Big Ideas For Small Water Agencies Facing Chemical Contaminants In Drinking Water

By Seth Mansergh

Who should pay, literally and figuratively, for chemical contamination of source water?

Small water utilities are facing existential challenges as they struggle to meet new state and federal drinking water standards. For example, in California more than 200 small water systems have groundwater contaminated with the chemical 1,2,3-trichloropropane (TCP), a toxic legacy from pesticides used for decades in agricultural areas. Smaller systems — some serving as few as 15 people — struggle to earn enough revenue to finance expensive water treatment facilities or import alternative water supplies. They are forced to consider shutting down wells in violation of TCP health standards. Others are looking to consolidate with large neighboring systems. Some, however, are looking at product liability law to play a major role in finding funds to clean up their water supplies. Understanding why requires a little bit of background.

A History Of Contamination

Starting in the 1940s and continuing for decades, chemical companies like Shell Oil and Dow Chemical Company sold agricultural pesticides, known as soil fumigants, to farmers working up and down California. These fumigants had different names, the most common being Shell’s D-D and Dow’s Telone. But they had one thing in common: They all contained TCP — not as an active ingredient that helped to kill pests, but as an impurity, a byproduct left over from the manufacturing process that the companies chose not to remove. Unlike other chemicals in the soil fumigants, TCP does not bind to soil or break down easily. Instead, it leaches into groundwater. Evidence shows that Shell and Dow knew the TCP would enter groundwater supplies and contaminate them, but the manufacturers never shared this information with the farmers. They continued to sell the product for years until the companies ceased making soil fumigants that included TCP in the 1980s. What was left was a legacy of TCP-contaminated groundwater throughout California.

Regulations And Funding

Both California and the International Agency for Research on Cancer have added TCP to their lists of chemicals known to cause cancer. Because of TCP’s extreme toxicity, even at low levels, California’s Office of Environmental Health Hazard Assessment in 2009 adopted one of the most stringent public health goals for TCP in drinking water ever established in the state at the time. Since 2018, California water agencies have complied with quarterly testing mandates and a maximum contamination level (MCL) of five parts per trillion. Meeting this very strict standard has been difficult for water systems, especially the small and underfunded systems in California’s agricultural areas.

Over the past few years, California’s focus on helping small systems that routinely violate state and federal health guidelines has brought several new tools to the fight to improve water quality. In 2015, California became the first state in the U.S. to legally declare that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. A few years later, the law known as Senate Bill 88 gave substance to the largely symbolic declaration by authorizing the state to order cities to consolidate their water systems with smaller, unincorporated neighbors when public health is at issue. But funding has always been an issue with these consolidations.

In response, the state legislature in 2019 established the Safe and Affordable Drinking Water Fund, which set aside over $1 billion over a decade to help struggling public water systems and private wells meet health standards. These funds can be used to improve treatment and delivery systems or to hire experts to help address problems. They can also be used to fund mergers between small systems, a priority for the state. The success of these consolidations depends on many factors: the willingness of the utilities to merge and the ability of ratepayers to afford water system improvements, among others. Even with this fund, getting the appropriate amount of funding can be difficult. Product liability law can help with this complex water-quality challenge for small water systems.

Seeking Justice Via The Courts

The law is clear in most states that the designer, manufacturer, or seller of a defective product is responsible for harm caused by that product. Product liability laws are in place to protect consumers from dangers, defects, or malfunctions that could harm people. Cities and water systems are fighting back against the chemical companies abusing these laws. Their argument is simple: Polluters should pay for cleaning up the messes they made. Since 2005, dozens of water providers of all sizes have brought lawsuits against Shell and Dow to recover the costs of removing TCP from their drinking water.

Recently, Shell and Dow have paid to settle multiple lawsuits for TCP contamination, and Shell has been found liable for TCP contamination in multiple jury trials. In 2019, a jury awarded a verdict against Shell for $54 million. In 2016, a jury awarded the city of Clovis $22 million in its suit against Shell Oil. In both lawsuits, the jury found that the cities were harmed by the design of the fumigant, that the benefits of its product with TCP did not outweigh the risks, and that those risks were knowable at the time it was sold. But these were results with larger cities. How would that process work for small community water systems? How long would it take? How much would it cost?

Starting The Legal Process

The pathways to taking legal action can vary. Most water systems, municipalities, and organizations start by looking for attorneys who specialize in complex environmental law. Environmental law is a vast field but, in general, has to do with how people treat the natural world. The “polluter pays” principle has been a key concept within this field for decades as a means for demanding that polluters, not innocent community members, bear the costs of their pollution.

The good news for these cash-strapped small systems is that some environmental law firms take on cases like these on a contingency basis. No money for attorney fees is required up front. Instead, the attorneys take their fee and related costs from a pre-negotiated percentage of the settlement or judgment. This means that attorneys typically take cases that they believe have good merit with clear liability by an organization or person with the ability to pay a judgment or settlement.

For very small water systems, there are also some other options. For example, one community water system might have to shut down a well because of contamination with TCP. In the same groundwater basin, a vineyard or a school might also face the same problem with its well. These water users could band together to sue the chemical manufacturers responsible for contaminating the groundwater for the costs of cleaning it up.

For very small water systems, there are also some other options. For example, one community water system might have to shut down a well because of contamination with TCP. In the same groundwater basin, a vineyard or a school might also face the same problem with its well. These water users could band together to sue the chemical manufacturers responsible for contaminating the groundwater for the costs of cleaning it up.

Organizations should review qualifications and experience before selecting and entering into a contract with a law firm. Some factors to consider include:

• Specific knowledge of water utilities and water contamination law
• Track record of success in similar cases
• Licensed to practice law in your state
• A fee schedule that works within your budget

With these factors in mind, water systems, cities, and other organizations can often find a legal partner willing to help them recoup groundwater treatment costs and restore safe and reliable water supplies to the communities they serve.

Time Is Ticking

For many communities coping with contaminated groundwater, the damage to their water supplies happened over many years, often decades. The solutions to these problems take time to put into place as well, whether it means applying for state grants, merging with another water agency, recovering costs through the courts, or some combination of all three.

But taking time to see how grant applications play out may not be the best option before pursuing legal action. In some instances, water systems may be subject to a three-year statute of limitations on product liability cases. This means that cases brought three years after a water provider has taken steps to remediate TCP may risk dismissal by the court. It certainly is a deadline to be aware of when thinking about taking legal action. It may be best to move quickly and make a claim for some organizations.

An All-Of-The-Above Approach

Litigation can be time-consuming, with resolution (and dollars) coming years after filing suit. But for many communities dealing with a toxic legacy in groundwater, it is a good option, especially when combined with other strategies such as consolidation with other water systems and the pursuit of state funding for water-quality issues.

Suing the parties responsible for the pollution helps water providers pay for critical water infrastructure facilities without passing on the heavy burden to ratepayers. The chemical companies that caused the contamination should bear the costs of bringing water supplies into compliance with state regulations. The law holds those companies liable for the problem.

With the emergence of PFAS in more water systems across the country, there is a lot to be learned from TCP litigation in California that can help utilities to make better and faster decisions. In many ways, they have set a precedence for other communities to seek rightful compensation from chemical polluters to complement their typical funding mechanisms. When the health of future generations is at stake, using every tool to tackle the challenge just makes sense.

About The Author

Seth Mansergh is an attorney at SL Environmental Law Group San Francisco, where he exclusively represents drinking water suppliers, including cities, water districts, mutual water companies, and other utilities in identifying and holding groundwater polluters accountable. He can be reached at SMansergh@ slenvironment.com.