Mindy G. Barfield

We represented the Kentucky Coal Association (KCA) when the Environmental Protection Agency attempted to implement a final guidance that enabled blockage of Clean Water Act permits for coal mining operations.

The EPA issued final guidance in July 2011 which directed its field offices to object to state-issued permits in certain ecoregions in Appalachia (particularly Eastern Kentucky and West Virginia) unless they contained a “reasonable potential analysis” prior to permit issuance (even if the mine was new and therefore no site-specific data upon which to base an RPA was available) and/or numerical conductivity limits, which allowed EPA to block permits for virtually all new or expanded surface coal mines in Eastern Kentucky or West Virginia.  We represented the KCA in arguing that the EPA had exceeded its authority in issuing the final guidance because it went beyond their oversight as outlined in the Clean Water Act and the Surface Mining Control and Reclamation Act.  We also alleged that the EPA’s final guidance infringed upon the states’ authority to enact and monitor their own water quality standards.

Our case was transferred to the U.S. District Court in Washington, D.C., where the KCA became a co-plaintiff along with the National Mining Association, the Commonwealth of Kentucky, the state of West Virginia, and the city of Pikeville (Ky.).  Working in coordination with other plaintiff counsel, we prepared extensive briefs, including researching and addressing Kentucky-specific requirements related to water conductivity standards.  We also participated in oral arguments during a hearing, demonstrating that the power to set water quality standards is delegated to the states and that the EPA did not follow the formal rulemaking process to attempt to implement a federal standard.

After hearing oral arguments, the judge ruled that EPA’s reliance upon the final guidance to object to and thereby block the issuance of individual Clean Water Act permits for new or expanded surface coal mines in Eastern Kentucky and West Virginia was unjustified and unlawful.  Unfortunately, EPA continues to refuse to issue the permits at issue in direct contravention of the court’s order.  The case is now on appeal before the U.S. Circuit Court of the District of Columbia.

Learn more about this case in the article: Judge Sides With Coal Industry Against EPA

In order to provide reasonable cost insurance to local Kentucky school boards, the Kentucky School Board Association (KSBA) created the Kentucky School Board Insurance Trust (KSBIT) and in particular two self-insured funds – one for workers compensation and one for property and liability claims. KSBA directly managed the funds for many years, and in later years utilized an outside entity third party administrator to handle claims. Financial examinations conducted by the Kentucky Department of Insurance from 2005 forward revealed the funds were consistently in a deficit position. Despite calls from DOI examiners, DOI did not order any assessments, and KSBA did not seek any from its members. The Kentucky League of Cities assumed management responsibilities in 2010. Despite new efficiencies and cost savings, the funds continued to be in a deficit position and KLC called for an assessment of members in 2012. Ultimately, the funds went into rehabilitation in 2013, and large assessments totaling approximately $50 million were ordered by the Franklin Circuit Court. The firm represented the Kentucky League of Cities in litigation challenging its management of the two self-insured funds, and in particular the rates charged to members and its change of TPA. The claims against the Kentucky League of Cities were settled in late 2015. The rehabilitator’ claims against KSBA and the KSBIT Board remain pending.

The firm represented a national insurance company in a first party bad faith claim arising from an auto accident. In evaluating his underinsured motorist (UIM) claim, the insurer rejected a spinal outpatient surgery he had done claiming it was controversial and not recommended by the mainstream medical community. A jury ultimately entered a verdict exceeding his UIM limits. The insured claimed the insurer had acted in bad faith in its handling and evaluation of the claim, utilizing protocols intended to maximize company profits at the expense of the insureds and claimants. The claim was settled prior to trial.

The firm represented a national insurance company in a first party bad faith claim by its insured. The case arose from a car accident. A mine employee, who left work, allegedly fell asleep and collided with another vehicle. The occupants of the second vehicle claimed significant injuries. These accident victims filed suit and subsequently added the mine that employed the tortfeasor as a defendant. They claimed their injuries arose from the mine’s negligent supervision of the tortfeasor. The insurer for the mine initially defended the claim but later denied the claim and withdrew a defense, relying upon a total auto exclusion in their CGL policy. After the defense was withdrawn, the mining company failed to assume their own defense and, after failing to answer requests for admission, a judgment totaling $40 million was ultimately entered against it. The insured sued the insurer, claiming there was coverage under the policy, and/or that it waived its right to deny coverage by initially defending without a written reservation of rights. It also claimed the denial was in bad faith. The state trial court ultimately ruled there was coverage under the policy, and thus the insurer was responsible to pay the $40 million judgment entered against the insured. The trial of the bad faith claim was scheduled for a later date. The court’s coverage decision was appealed, and during the appeal a global settlement was reached on all claims.

In this case, the plaintiff’s estate claimed the medical malpractice carrier had acted in bad faith in handling and settling an underlying malpractice claim against the insured doctor. The plaintiff claimed that doctor ran a “pill mill” and improperly prescribed several narcotic medicines to the decedent who eventually overdosed. During this same time period the defendant doctor was cited by the state medical licensing board and thereafter restricted from prescribing medicines. The defendant doctor defended by claiming that he provided the decedent proper warning and that if taken as prescribed no overdose would have occurred. He retained two experts who were prepared to testify that the doctor complied with the standard of care and/or that his conduct did not cause the overdose. The case ultimately settled for less than the policy limits a little more than a year after it was commenced. The bad faith case followed, with the decedent’s estate claiming that the insurer had acted in bad faith by unduly delaying a claim where liability was reasonably clear and making offers less that the true claim value. After initial written discovery was exchanged, the insurer moved for summary judgment on the bad faith claim on several grounds, including that the doctor had not consented to settlement until the day of settlement and because the doctor’s liability for causing the overdose was not beyond dispute and absent such clear liability, an insurer was entitled to make no offer and proceed to trial without exposing itself to bad faith liability. The court ultimately concluded no additional discovery was needed to address these issues and entered summary judgment. The plaintiff filed a motion to vacate the order under Rule 59 and this, too, was denied. The case is currently pending before the Kentucky Court of Appeals.

The U.S. issued a Section 105(c) citation to this Arkansas mining company, claiming that it fired its general manager after he has made formal complaints about the safety of the mine and its practices. This matter was settled on favorable terms to the client.