A federal appeals court dealt a major blow this year to North Carolina’s efforts to force the Tennessee Valley Authority to cut back its power plant emissions. N.C. Attorney General Roy Cooper and others had blamed TVA emissions for air pollution problems in western North Carolina. Carolina Journal Associate Editor David Bass discussed the court ruling with Donna Martinez for Carolina Journal Radio. (Click here to find a station near you or to learn about the weekly CJ Radio podcast.)
Martinez: What did the Appeals Court rule?
Bass: Basically they reversed the lower court ruling in the TVA case — basically threw out what the lower court judge had said. The judge had reached a conclusion agreeing with [N.C. Attorney General] Roy Cooper that, yes, TVA was a nuisance to the state of North Carolina and their emissions were actually killing people in the western part of the state. And so, what that judge had required was emissions controls on four TVA power plants, and so what the appellate court had said was, “Your reasoning in that case essentially was ridiculous, and we’re reversing you.” Now, of course, Cooper has the option of appealing it to the Supreme Court, or he could also ask for a review by the entire Circuit Court.
Martinez: Let’s make sure everyone understands what Attorney General Cooper’s claim was. Is it fair to say that he was saying these power plants in Tennessee were basically polluting the air, and it was blowing over into western North Carolina, and North Carolina needed to do something about that?
Bass: Yes, exactly. In a lot of ways it was billed as a public health crusade, with the attorney general coming in and saying, “You need to clean up your act on behalf of our citizens.” Again, the lower court very much agreed with that reasoning, but on appeal it was a unanimous, three-judge panel of the Fourth Circuit Court of Appeals. And they said, “Not so fast.”
Martinez: In the meantime, I think you just said that these power plants had to go ahead and do some mitigation to try to address what the argument was.
Bass: Yes, and there is some debate about that. I think TVA would say, “We were going to do these controls anyway,” but Roy Cooper has made a big deal about the fact that TVA has installed these controls and that it’s supposedly helping the health of folks out in the western part of the state.
Martinez: So the [appellate] court has reversed that ruling. But as I understand it, North Carolina has put a lot of time and money into this lawsuit. You’ve done some investigating on this. What are we looking at here?
Bass: To date it’s about $8 million that has been poured into the lawsuit from the Attorney General’s office, and they’ve gotten that from various sources of funding — about $2 million of it actually came from the state Division of Air Quality. And there was some controversy about that a year or two back. And also some controversy about a couple of outside law firms that Cooper’s office had hired to help litigate the case — some of their reimbursements and, to some extent, how much they were paying them per hour.
Martinez: Let’s talk first about the Division of Air Quality, because evidently there were some concerns in that organization — that’s a state agency — over Cooper’s lawsuit. What was the concern?
Bass: There was a memo that then-director of the Division of Air Quality Keith Overcash had sent out, basically complaining about this transfer that the General Assembly had made — transferring about $2 million from the Division of Air Quality to the Attorney General’s office, specifically for the TVA case. And he was basically saying, “This is really putting us in a pinch here.” From their perspective, they’d say, “We’re actually doing real work, cleaning up the air, helping the environment, and these cuts are going to lead to staff position eliminations, so actual loss of jobs.” So that was the main crux of the memo, and I’m sure you get different opinions over there on whether the TVA case is worthwhile, but they were looking at it from a financial standpoint. They definitely — at least Overcash — definitely didn’t like the transfer.
Martinez: You also mentioned some questions over some attorneys’ fees and reimbursements. You also have been looking into those. Tell us what you found the money was spent on.
Bass: Well, the AG’s office by law is required to keep receipts and invoices that they receive from these law firms. So about a year and a half ago I had gone through and looked through all of those just to see what they were paying them, and found some interesting irregularities that actually led to some changes, some money being paid back from the law firms to the AG’s office. So they were, in essence, reimbursements that weren’t supposed to have been made.
Martinez: So the law firms essentially were saying, “Yeah, we were overpaid.”
Bass: Right, exactly. And just a couple examples — one of them was that one law firm’s paralegal is based in Indiana, and she had been flying to Washington, D.C., a lot for preparation for the TVA trial. She ended up renting a pretty nice hotel room in Washington, D.C., for about a month, but since she was flying back to Indiana so much, she actually only ended up staying in the hotel 14 of those nights.
Martinez: Now wait a second. So she had a hotel for a month but only stayed there less than half the month?
Bass: Exactly. And the whole cost for it was about $7,000, and for those unused nights, she spent $4,000. And that was an expense that the AG’s office did not ask to be paid back for. But it’s just kind of an example of — who was reviewing these receipts? Were they really being careful with it? And I think it’s apparent that they weren’t scrubbing it as good as they could have.
Martinez: And to be clear, these are taxpayer dollars that are being expended on these things.
Bass: Exactly, yes.
Martinez: Now at one point, Roy Cooper was asked about all of this. What was his response to, for example, the data that you just told us about?
Bass: At a Council of State meeting last year, in 2009, Cherie Berry, Commissioner of Labor, had talked to Roy Cooper about it, because Cooper was asking for some more money and another allocation for the TVA case. Berry was saying, “Well, what about these past expenditures that you’ve had? It dooesn’t look like you’ve been very careful about how you’re spending your money.” And Cooper said, “We are careful, we scrub our expenses, and if there is something that’s not allowed, we make sure that the law firm pays us back for that.” And, of course, given the Council of State, the make-up of it in terms of the party affiliation, they ended up approving the new money for the TVA case.
Martinez: The Council of State is predominately Democrats. Roy Cooper is a Democrat; Cherie Berry, a Republican.
Bass: Exactly. At least she raised the point, but they continued the funding for it.
Martinez: So we have this ruling — basically [it] overturns the points that Attorney General Roy Cooper was making in his support of this lawsuit. Do we know what his response is to this overturning of the decision?
Bass: I think there is no doubt he was disappointed. The only public statement that they’ve made on it was that he’s happy that TVA had at least installed the controls that they’ve installed and that they’re making progress. And there has been no definite word on whether they’re going to appeal. I imagine they’re going to appeal, but there is no official word on it yet.
Martinez: Do we have any information about the other allies? One would presume that folks in the environmental movement were also behind this lawsuit. First of all, is that a correct assumption? Do we know who else was supporting this lawsuit, or who might be weighing in on thinking perhaps this should be appealed?
Bass: I think environmentalists in general definitely did support the lawsuit. Some of the details here — I think you start getting into more of a question of good government rather than necessarily the environmental side. But I think, overall, environmentalists would say, “Yes, appeal it,” because any kind of restrictions they could put on power plants, they would be in favor of.
Martinez: In the meantime, the TVA has come out on top, yet they have gone ahead and expended this money on some emissions controls. Do we know for sure if they were going to do that anyway? You mentioned you thought they might be planning to do that.
Bass: Yes. They say they were going to do it, but it’s not a definite, so it’s kind of up in the air whether that was really going to take place, but it’s what Roy Cooper is using now as a justification.