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Appeals Court Allows Louisville Coal Ash, Whiskey Fungus Lawsuits to Proceed

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Opinions issued by a federal appeals court Monday will allow two major air pollution-related lawsuits in Louisville to move forward.

The cases before the the Sixth Circuit Court of Appeals involve two different pollutants: coal ash and whiskey fungus.

One lawsuit was filed against utility Louisville Gas and Electric, by neighbors living close to the company’s Cane Run Power Plant. They say their property was contaminated by coal ash leaving the nearby coal-fired power plant (which hassince been replaced by natural gas), and are seeking damages.

The other lawsuit involves liquor giant Diageo, which operates several facilities in Louisville. In that case, people living near whiskey warehouses allege that ethanol vapors are leaving Diageo’s properties and combining with condensation to create unsightly black whiskey fungus (Baudoinia compniacensis) on their homes.

The lawyers for LG&E and Diageo both argued that the federal Clean Air Act preempts common law claims. Because both companies had a federal permit to burn coal and distill liquor, respectively, the plaintiffs couldn’t sue them under Kentucky’s nuisance law. That local law is meant to protect neighbors against nuisance air pollution.

Both cases were filed originally in federal district court, and judges in each ruled the cases could move forward. But both LG&E and Diageo appealed those decisions to the appellate court. Now, with Monday’s opinions affirming the district court rulings, both cases will proceed.

Attorney William McMurry is representing the residents suing Diageo. He said among Diageo, Brown-Forman and Heaven Hill, more than 6,000 tons of ethanol are released in Jefferson County every year.

“It has got to stop,” he said. “We live in a modern era. We have technology we believe can be put in play that will eliminate the ethanol from Jefferson County residents having to suffer through it completely, 100 percent. It’s being used in the brandy industry in California.”

McMurry is also pursuing similar lawsuits against liquor companies in Louisville and elsewhere, including suits against Brown-Forman and Heaven Hill in Jefferson Circuit Court, in Franklin Circuit Court against Buffalo Trace and Jim Beam, against Diageo in Scotland, and against Diageo and Cruzan in the Virgin Islands for rum fungus.

Attorney Jeff Sanders is representing the residents suing LG&E. He said his clients were relieved the case would move forward.

“I think the plaintiffs are looking forward to their day in court,” he said.

Both cases will now return to district court, and will ultimately go before juries.

Diageo spokewoman Zsoka McDonald said the company was disappointed by the ruling and would continue to defend itself against the allegations.

LG&E spokeswoman Liz Pratt echoed that, adding that LG&E would consider all options going forward.

"Aside from the threshold legal issues raised to date, we continue to believe the allegations raised in the case are without merit," she wrote in an email. "LG&E takes its role as an environmental steward seriously."

Erica Peterson is WFPL's Director of News and Programming.