Cinergy trial ends with split verdict

A federal jury returned a verdict that a major energy company violated clean-air rules at a coal-fired power plant along the Ohio River in southeast Indiana.

The Southern District of Indiana verdict Tuesday night came following six days of trial and eight hours of jury deliberation in U.S., et al. v. Cinergy Corp., et al., No. 1:99-cv-1693. The decade-old case involves violations to parts of the Clean Air Act intended to make sure that older power plants that have major upgrades also meet more modern pollution limits with new permitting and emissions controls.

In a partial retrial of some claims after the original May 2008 verdict that went mostly in Duke's favor, jurors on Tuesday found that Duke – which bought Cinergy in 2006 – violated the law in two of its projects at three power plants and did not on four of those projects. Jurors found violations made in two repair projects at the Gallagher plant in Floyd County, while determining that four other projects at the Gibson plant in southwest Indiana and the Beckjord plant near Cincinnati, Ohio, did not violate federal clean air rules.

"I've got to say this about Indiana juries: They are really conscientious," said U.S. Department of Justice attorney Phillip Brooks, who was the lead plaintiffs attorney representing the government. "This was some really tough stuff, and they spent about eight hours going through it all. My brain is fried, but my hat's off to them."

A year ago, a jury found that Cinergy had violated the Clean Air Act at its Wabash plant in Terre Haute, but cleared the company on modifications made at four other plants throughout Indiana and Ohio.

This was the second time Duke has faced a liability on this issue, which dates to 1999. The Environmental Protection Agency alleged the energy company Cinergy had substantially upgraded some of its power plants in Indiana and Ohio without installing the proper modern pollution controls as required. The government alleged that Cinergy's work exceeded ordinary maintenance or repairs and required a permit at each of the plants before that construction began, but the company disagreed that the projects mandated any new pollution controls or permits.

U.S. Judge Larry McKinney late last year ordered a new liability trial after finding that Duke attorneys misled jurors about one of its witnesses, a former employee with knowledge of power plant improvements. The witness was paid a consulting fee, a point not revealed at trial; however, Duke attorneys at the same time portrayed government witnesses being experts paid for their testimony. That gave the government a second trial to prove its case, which started May 11 and ran through Tuesday morning when the jurors began deliberating about noon. A verdict announcement came about 8 p.m. from the court.

A Duke Energy spokeswoman could not be reached for comment about the verdict, but a spokeswoman for the Clean Air Task Force described this as an environmental victory despite the verdict falling mostly in Duke's favor.

"That simple math doesn't reflect the potential significance of this outcome for the people living near the plants and downwind of them," spokeswoman Ann Weeks said. " Those folks … have had to breathe thousands of tons of additional air pollution that should not have been emitted since the company made the changes at the Gallagher plant that the jury has now found unlawful."

A remedy phase for these claims will be scheduled, and an order is expected soon on the previous remedy phase resulting from the rest of the verdict reached in May 2008 – that involved allegations at the Wabash plant in Terre Haute, where jurors found Cinergy had violated the law. Judge McKinney has not yet ruled on that remedy or scheduled the next remedy trial.