FRANKFORT — Lawyers for environmental groups argued Thursday in Franklin Circuit Court that a motion by the state Energy and Environment Cabinet to exclude them from a settlement with coal companies which submitted inaccurate pollution reports demonstrates the cabinet does not protect the public interest.

Judge Phillip Shepherd did not rule on a motion by Appalachian Voices, Kentuckians for the Commonwealth, Kentucky Riverkeeper, Water Alliance and three private citizens to intervene in the case, but promised to issue a ruling “promptly.”

In October the environmentalists announced their intention to sue the companies under the federal Clean Water Act, claiming Frasure Creek and ICG Coal submitted false and fraudulent reports of pollutants discharged into streams from mining operations. Under provisions of the CWA, the state had 60 days to take action against the companies before the environmentalists could file their suit and it sought to enter a settlement with the coal companies in Franklin Circuit Court. That settlement said the Energy and Environment Cabinet investigated the claims and found 2,700 violations but termed them “transcription errors.” The settlement levied fines of $310,000 and $350,000. The environmentalists claimed they uncovered 20,000 violations with potential fines of up to $740 million.

Shepherd heard arguments Thursday on a motion by environmentalists to intervene in the case. Lawyers for the cabinet and coal companies contended the environmentalists’ interests are represented by the cabinet and they have no legal right to intervene under Kentucky law, that they may sue in federal court under provisions of the CWA. They also argued Franklin Circuit Court has no jurisdiction under the federal law and isn’t the proper venue.

But Mary Cromer, an attorney from the Appalachian Citizens Law Center who represents the environmentalists, argued the CWA specifically prohibits the state from opposing citizens groups’ intervention, has not properly represented the interests of the public in protecting Kentucky’s waterways, the penalties are inadequate, and the consent judgment would end the case before they environmentalists could act in federal court.

“That the cabinet would oppose citizens’ intervention here when the regulations clearly require the state not to oppose intervention is by itself sufficient to show the state is not sufficiently representing the applicant’s interests,” Cromer told Shepherd.

She said Cabinet Secretary Leonard Peters has publicly stated the cabinet lacks the capacity to fully enforce the CWA provisions and the cabinet is guilty of “systematic failure to monitor” the safety of streams where citizens draw drinking water, fish and seek recreation. She said the cabinet has shown “a pattern and history of non-enforcement that is astonishing.”

The environmentalists contend the settlement imposes inadequate penalties to deter future violations. Cromer said the settlement would show coal companies it’s cheaper to ignore the regulations and then settle with the cabinet for small penalties if caught.

Mary Stephens, attorney for the cabinet, argued the cabinet’s action was “swift and thorough,” and the cabinet “took immediate and significant action” once the violations were brought to light by the environmental groups, proving the cabinet represents their interests.

Arguing a point of law, Stephens said while environmentalists “have an interest in clean water, that is not a legally protectable right in Kentucky – only in federal court.”

She and Ann Chesnutt, an attorney for Frasure Creek, argued Shepherd has no jurisdiction or venue, that the CWA requires such suits to be pursued in federal courts with jurisdiction over the counties in which the violations occurred. But the settlement was filed in Franklin Circuit by the cabinet, leaving the environmentalists no option but to ask to intervene, according to one of their attorneys Peter Harrison.

“It is not our choice to file in this court,” Harrison said. “It was the cabinet’s choice to file here, in effect choosing venue for us.”

Shepherd said environmentalists have a “real interest” in the settlement and Kentucky case law appears to support allowing them to participate. But he also seemed to acknowledge that federal courts are the proper place to pursue their complaints.

“I am concerned that if I were to approve the consent decree without (environmentalists’) having their day in court, that would erect barriers that would be insurmountable if they chose to go to federal court,” he said.

Lauren Waterworth, another environmental attorney, argued the federal court would see a state court-approved consent decree as the end of the matter, preempting any federal action.

Chesnutt, the attorney for Frasure Creek, said if Shepherd refused to approve the consent decree, there would be no incentive to negotiate settlements to avoid litigation. Plus, she said, Frasure Creek has admitted the violations and is prepared to pay penalties.

“We’ve been standing here with money in hand,” she said.

Shepherd said the case poses “very difficult questions” but that he’ll “try to get you a ruling here as soon as I can complete my evaluation.”

RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach himn at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.