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A federal judge has rejected a $12 million settlement between the state of Utah and Kennecott, saying the settlement is not fair or adequate.

In a ruling made public Friday, U.S. District Judge J. Thomas Green said the proposed settlement has three major flaws. First, the state did not adequately determine that groundwater damaged by Kennecott tailings could not be restored before agreeing to accept a payment too small to restore the water damaged. Second, the state's settlement with Kennecott failed to protect the water from future contamination. Third, the settlement did not take into account the extent of damage the state has suffered and will suffer as a result of the contamination.Green's ruling hands a victory to the Salt Lake County Water Conservancy District and local environmental groups who have decried the settlement as woefully inadequate. The district filed a federal suit last fall seeking to have the settlement overturned and permission to intervene in negotiations.

In 1986, Utah sued Kennecott for $126 million, saying Kennecott mining had contaminated underground water in the Salt Lake Valley with minerals and salt. Since then, both sides have conducted several studies on the extent of water damage. More than a year ago, state attorneys began secret negotiations with Kennecott to settle the claim out of court. Last summer, the state announced that Kennecott agreed to pay $12 million for damage to underground water.

Critics have chided the Utah attorney general's office for not allowing public input into the settlement.

In a two-week hearing last spring, attorneys for the conservancy district presented evidence that suggested the damage to the area's underground water supply by decades of Kennecott mining was much greater than $12 million.

They also told Green that the water could be treated but the cost would be closer to $36 million.

In his ruling, Green said both the state and Kennecott failed to prove that restoration of the water is not feasible. The state had planned to spend the $12 million on water projects in other parts of the state. It announced that it did not intend to attempt restoration of underground water damaged by Kennecott.

Green noted, however, that federal water laws urge the treatment of water wherever possible. The state has not proven that remediation of the contaminated water cannot be done.

The state's proposed settlement with Kennecott would have prohibited any future litigation against the mining company should the damage to the underground water prove to be greater than it is now believed to be.

Kennecott has controlled future contamination to some degree, "but it was also made clear that much more is needed," the ruling said. Green noted, "It is apparent that the contaminated plumes are being further contaminated by Kennecott operations."

He criticized the state's proposed settlement for not addressing the expansion of contaminated water going on underground. Conservancy district attorneys told Green during trial that water contaminated with salts and metals from Kennecott mining is spreading through the valley's underground water supply and will eventually rob the district of its clean water source.

Assistant Utah Attorney General Joe Tesch said state attorneys will review Green's ruling and decide whether to appeal it to the 10th Circuit Court of Appeals. "I haven't seen it yet, so it wouldn't be right to comment on it," Tesch said.

If the state opts not to appeal, the state's 1986 suit against Kennecott will likely go to trial, Tesch said.