During last year's trial of a clean air lawsuit, Duke Energy portrayed a witness with knowledge of improvements at its coal-fired power plants simply as a former employee.
At the same time, Duke attorneys portrayed government witnesses as experts who were paid for their testimony, according to the recent ruling by U.S. District Court Judge Larry McKinney.
After the trial it was discovered that Duke had agreed to pay its witness $200 an hour for his testimony, according to the court record, the Evansville Courier & Press reported.
In his December 18 ruling, McKinney wrote that knowing that information could have changed the jury's perception of the facts and its decisions.
The jury had ruled largely in Duke's favor in May.
"The case involved a substantial amount of a retired employee's time, including his travel. So he was paid. It is a routine fee," Angeline Protogere, a Duke Energy spokeswoman, told the Courier & Press.
The ruling paves the way for a new trial on most of the charges, and it gives the government and environmentalists who joined the lawsuit a second chance to prove that the company violated the Clean Air Act.
The lawsuit, filed in 1999, charges that Cinergy, now owned by Charlotte, N.C.-based Duke Energy, made changes at the power plants without updating pollution controls.
A new trial date has not been set, but Duke Energy's lawyers have been ordered to attend a January 13 hearing in Indianapolis and explain why they should not be suspended from practicing before the federal court in Indianapolis and pay court costs.
When the lawsuit was filed, it was one of several alleging that various utilities had not followed part of the Clean Air Act called New Source Review. Many of those companies settled the lawsuits out of court.
New Source Review is supposed to ensure that new or changed power plants and factories do not make air quality worse when they make additions or changes.
The jury ruled in Duke's favor on 10 of the 14 allegations, but the utility company lost on four allegations related to its Wabash River Power Station near Terre Haute, Indiana.
"This is important environmentally. The jury verdict last spring was problematic for us, but it did give us a win on one of the facilities. We were glad that the jury saw fit to rule for us on the Wabash River plant in May," said Jonathan Lewis, a Clean Air Task Force attorney.
"These are plants which have significantly contributed to Indiana's and Ohio's air pollution."
Regardless of the violations alleged in the lawsuit, Protogere said, Duke has since made large investments to reduce air pollution at its power plants, not only in Indiana and Ohio but also in Kentucky, North Carolina and South Carolina.
"A lot of the improvements at issue have already been made at these plants," she said.
By 2010, Protogere said Duke will have cut nitrogen oxide and sulfur dioxide pollution 70 percent at its power plants.