This news story originally provided by The Charleston Gazette

May 28, 2006

Flood trial could spell industry trouble

Beckley jury finds logging, mining liable for damage

By The Associated Press

The jury verdict in the first trial to determine liability for severe July 2001 floods in Southern West Virginia might be the opening scene of a nightmare for the state’s logging and mining industries.

Neither is used to being found liable for damages linked to cutting timber or unearthing coal, but that’s precisely what happened in the first of a series of lawsuits stemming from floods that hit Southern West Virginia on July 8, 2001. Now the likes of coal giants Peabody Energy Corp. and Massey Energy Co., as well as timber owners and logging companies, face a potential shift in West Virginia’s attitude toward once all-powerful industries.

Some see the decision reached earlier this month by a Raleigh County jury as an omen. The jury decided that improper logging practices allowed by two timberland owners contributed to severe flooding. Another jury will determine actual damages later.

How that plays out for logging and mining remains to be seen, but the stakes in additional lawsuits involving five other Southern West Virginia watersheds will be high. The flooding caused an estimated $143 million in damages across seven counties and spawned litigation involving thousands of plaintiffs and more than 100 defendants, including Peabody, Massey and other large coal companies.

Massey, for instance, has been sued along with nine subsidiaries, while several Peabody subsidiaries are facing suits as well.

People on both sides are wondering whether the first case marks the start of a losing streak for coal and timber interests.

After all, lawsuits against mining and logging rarely get to court in Southern West Virginia, much less result in losses, said Patrick McGinley, an environmental law professor at West Virginia University. Even finding attorneys willing and able to tangle with coal and timber traditionally has been almost impossible in much of the state because of their political and economic muscle.

West Virginia is the second-largest coal-producing state in the United States. The industry generated approximately $270 million in state taxes last year and employs about 40,000 people. More than 80 percent of the state is forested and the timber industry generates more than $3 million in taxes annually and employs more than 30,000 people in forestry and related industries.

“The cultural change in residents seeing that there is somebody that can represent their interests and actually having the courage to go out of town and find those that will carry their story into the courts, that’s what’s exceptional,” McGinley said. “The lawyers who have the resources to level the playing field, that’s new.”

Environmental law experts say such cultural shifts are predictable.

Ohio’s Cuyahoga River, for instance, caught fire repeatedly from the 1930s until it finally received national attention in 1969, resulting in the Clean Water Act. A similar shift may be occurring in Louisiana, where oil and gas companies have been sued for allegedly contributing to Hurricane Katrina’s damage by harming Gulf Coast wetlands.

“Sometimes the litigation is — or changing patterns in litigation — is a sign of changing social views of what sorts of environmental impacts are acceptable,” said Jonathan Adler, an environmental law professor at Case Western Reserve University in Cleveland.

“I would certainly expect that things that were considered to be just, you know, unfortunate, but necessary consequences of mining a few decades ago, are things that people object strongly to today.”

Neither the coal mining nor logging industry is sure what to make of the verdict. And both are sticking to their oft-stated belief that God or Mother Nature is to blame.

“I think it’s still very early to be trying to figure out exactly what the reaction is to it,” said Bill Raney, president of the West Virginia Coal Association. “There seems to be a whole lot more questions than there are answers at this point.”

The state’s timber industry is taking a similar approach.

“Science and facts do not prove what the jury ... decided. It was decided on emotional issues,” said Dick Waybright, executive director of the West Virginia Forestry Association. Waybright denounced the verdict to the Legislature’s Forest Management Review Commission, during its joint interim meeting last week.

“You can harvest timber any way you want to, and it will have little or no effect on flooding,” he told lawmakers.

Waybright said insurance companies are already telling logging firms to expect rate hikes soon.

“If this case stands, there won’t be any more logging and probably won’t be any more farming and mining,” Waybright said.

Associated Press writer Lawrence Messina also contributed to this story.