Water Contamination Trends Affecting Industry Today

October 18, 2016

This is part two of “Between Flint and a Hard Place: A Confluence of Trends Regarding Water Contamination and Remedial Enforcement”, a three-part series of guest blog posts from Enhesa. The identified how lead in the drinking water in Flint, Michigan sparked a heightened awareness about water quality in the U.S. This second post dives deeper into trends regarding water contamination involving private industry actors, analyzing how Flint, an issue created by public officials, may be inspiring more stringency in enforcement proceedings.

“For many of us, clean water is so plentiful and readily available that we rarely, if ever, pause to consider what life would be like without it.” – Marcus Samuelsson

Since lead was found in the public drinking water in Flint, Michigan, water quality has received increased attention from governments and their regulators. Although the crisis in Flint was a governmental, or public, issue, private industry is beginning to be impacted by the public outcry surrounding Flint as regulators are searching for contaminated water, and when it is found, they are hunting for parties responsible for or potentially responsible for the contamination. The  identified how regulators in some cities and states are taking more proactive approaches to test water quality, determining if water quality is safe, and even in determining who is responsible for remediation of contaminated water sources. From those examples, companies that are located near contaminated water could expect more stringent investigations, fines, consent decrees or other forms of remediation mandates, such as providing bottled water to affected populations and paying for laboratory sampling costs, water treatment, and monitoring. Additionally, companies that operated near now-contaminated water sources, even if in compliance with regulations at the time of operation, may still be sued for remediation expenses by government actors. Since Flint, litigation and higher jury verdicts for plaintiffs seem more and more likely too.

A Trend Where Everyone’s Involved with Safe Drinking Water

The Flint water crisis in Michigan and the Gold King Mine blowout in Colorado that dumped heavy metals into the Animas and San Juan Rivers, could make it look like government officials are always to blame whenever there is a water quality emergency. On March 21, 2016, the Flint Water Advisory Task Force, commissioned by the Michigan governor to investigate the causes of the Flint water crisis, concluded in its final report that the Michigan Department of Environmental Quality (MDEQ) had primary responsibility. On April 20, 2016, the Michigan Attorney General filed criminal charges against two MDEQ officials and Flint’s water quality supervisor for, among other felonies and misdemeanors, tampering with evidence and violating the Michigan Safe Drinking Water Act. It is almost convenient that there is someone to blame in these examples of water contaminated with metal toxins. When regulators are in charge, it’s a bit easier to identify responsible parties and begin to collect damages if industry might be responsible. Yet, even when government representatives are the negligent actors and even when regulators accept responsibility for water contamination crises, recent cases show that this does not protect other parties, private industry especially, from consequences.

Gold King Mine SpillFor example, in Colorado it is undisputed that the U.S. Environmental Protection Agency (EPA) took a risky approach to plug the Gold King Mine. The project backfired, spewing 880,000 pounds of toxic metals into the Animas and San Juan River systems, impacting tribal and state interests along and down the rivers. While the EPA accepted responsibility for the calamity, this did not stop the state of New Mexico and the Navajo Nation from suing private companies over the spill. One company had previously mined the Gold King Mine, but had regulator-approval in 2003 to discontinue water treatment activities for its closed mining operation.

While the Gold King Mine case and Flint may make it look like regulators are to blame, the suits by New Mexico and the Navajo Nation that hold private parties accountable even when government agents have claimed responsibility may be one more sign, in addition to the regulator responses to community activism since Flint, of a growing trend of regulators seeking parties to pay to remediate unsafe water conditions. It’s not that agencies haven’t held polluters responsible before, it’s more that since Flint and other recent water crises, regulators are searching for contaminated water or they are no longer accepting that water is safe enough for communities, and then the regulators are pursuing potentially responsible parties.

Timing Is Everything

In the case of State v. Exxon, et al., on October 2, 2015, the New Hampshire Supreme Court awarded the state 236 million USD for groundwater contaminated with methyl tertiary butyl ether (MTBE). Although now recognized as a potential human carcinogen at high doses, MTBE was not banned in New Hampshire until 2007, years after Exxon had been adding it to fuel. Exxon was found culpable because the state claimed the company should have known not to market fuel containing MTBE given the rising concerns for its use in products. The energy company appealed, claiming New Hampshire never definitely identified the company as the polluter, but the U.S. Supreme Court refused Exxon’s January 20, 2016 appeal of the decision, leaving the decision as the largest-ever jury verdict in New Hampshire. The U.S. Supreme Court also refused to hear an appeal by Exxon of a $105 million USD jury verdict awarded to New York City over MTBE contamination of groundwater.

These verdicts are setting new precedents for industries that caused or allegedly caused environmental damages that have the potential to harm human health. Although the MTBE cases have been developing for years, the delivered verdicts and the Supreme Court’s decisions to allow the verdicts to stand are recent and further indication that there is a trend toward holding companies that use chemicals that have been found in contaminated drinking water to higher standards.

While Exxon was using an additive that wasn’t actually banned until after the contamination case began, similar to the ongoing plastics company case in the northeastern United States mentioned in the , PFOA is a suspected potential carcinogen. Yet, it wasn’t until after NHDES identified the PFOA contamination and sent the formal request to the plastics company, that the agency created ambient groundwater quality standards (AGQS) for PFOA and perfluorooctane sulfonate (PFOS), another PFC. By creating AGQS for PFOA and PFOS, parties who are responsible for a site must apply for and obtain a groundwater management permit for any contaminated site and are responsible for site investigation, management and remediation for contamination that is caused by the discharge of the contaminants.

Drinking Water TestingThe EPA has also not issued mandatory restrictions on the levels of PFOA in drinking water, but the seeming trend is not necessarily that there needs to be a hard and fast rule that a company is (1) definitely responsible for contaminated water or (2) that the chemical has to be banned, restricted, or even definitely defined as an illness-causing substance in some way. DuPont has been in court cases since 2001 for its use of PFOA, which is also called C8. After studying PFOA from 2011 to 2012, a panel of scientists concluded that the chemical was “more likely than not” to cause certain cancers and on July 6, 2016, a jury from the U.S. District Court in Southern Ohio awarded a man with testicular cancer $5.1 million USD. This jury verdict came after Flint, as compared to a similar case against DuPont where the plaintiff in that case had kidney cancer and was awarded $1.6 million USD in October 2015. There are thousands of other cases that have been brought against DuPont regarding PFOA claims, and they are likely to be influenced by any amassing public perceptions on the dangers of contaminants in water, potentially with higher verdict awards.

It does seem that contaminated water issues are accumulating in recent years and even quicker in the months since Flint. Moreover, if there is a trend, companies that are not proven to be definitely responsible could feel the sting such as in the Gold King Mine lawsuits, Exxon MTBE case, and the plastics company situation with PFOA contaminated water in New Hampshire, New York and Vermont. Also, companies that use any chemical, whether or not the chemical has been proven to be a definitive hazard to human health when ingested in drinking water, seem to be at risk under this trend for being held responsible for ailments in the nearby communities, such as in the DuPont cases.

Additionally, investigations and lawsuits may become more harrowing for any industry that uses suspected or known toxic substances due to recent changes to the U.S. Toxic Substances Control Act (TSCA). Amendments to the law give the EPA more authority to review and regulate chemicals. While the EPA could consider numerous factors in how it regulated chemicals before the amendments, the EPA must now only consider human and environmental health as it assesses the safety of chemicals. During the review of existing chemicals, which must be done before the end of the year, the EPA must identify high-priority chemicals. High-priority chemicals will be those that are known human carcinogens, but the agency will also look at chemicals stored near significant sources of drinking water. Considering the number of recent chemically-contaminated water stories, the EPA may experience a great amount of pressure as it identifies chemicals. If a company is using a substance that the EPA ultimately identifies as high priority, and the company is a potentially responsible party for a contamination event, then the company could experience something like Exxon did in that the company should have known of the dangers to human health. In litigation, it could mean increased verdict awards for plaintiffs or larger settlement agreements.

Trending on the Private Side

Industry is perceptibly at risk from the growing concerns with water safety. Companies using chemicals, especially suspected carcinogens, will likely be under greater scrutiny for many more years due to the accumulation of concurrent water contamination events in the U.S. Couple this spiral of heightened regulatory review of water contamination with the amendments to TSCA and industry would indeed be wise to ensure it complies diligently with chemical waste management regulations, discharge permits, and if applicable, consent decree responsibilities for Superfund sites. This may be particularly important for facilities near drinking water sources.

Water Quality TestingAlthough the Flint water crisis had seemingly even less to do with private company activities than the mining water catastrophe at the Gold King Mine, the extent of the government bumble in Michigan led to public fear in numerous other jurisdictions. Since Flint, more states and municipalities have begun actively looking for contamination in ways they have not before. Additionally, the recent trend in what happens when excessive contaminants are found indicates that even if a regulatory agency is largely responsible, numerous parties will be evaluated for their responsibilities in causing the contamination. For example, the EPA was the agency responsible for the Gold King Mine, but New Mexico is seeking another suit for damages from the state of Colorado because of the oversight responsibilities that rested on its regulators. Even in Flint, where criminal charges have been brought against three regulators, on June 22, 2016, the Michigan Attorney General filed a civil suit against two companies: one was hired as a water-quality consultant in 2015 and the other was hired in 2011 to help operate the water treatment plant using the Flint River. The civil suit claims professional negligence and fraud, stating the companies caused Flint’s lead poisoning problem to continue and worsen, which created an ongoing nuisance.

The cases suggest that state agencies that regulate water safety may become stricter on industry that either discharge metals into water sources or perform activities that could discharge toxic and regulated substances to state waters years into the future.

Companies that use chemicals that could contaminate drinking water sources may find it useful to comply with more stringent self-regulation standards or thoroughly review facility-specific chemical use, storage, and waste management protocols to see if there are contamination risks that can be better managed. Companies may also find it useful to review the kinds of chemicals they use or store on site, and identify potential dangers to humans from those chemicals and if it is feasible to consider a less toxic alternative. This may be especially useful as the EPA moves forward with its new responsibilities under TSCA.

The third post in this three-part series, Between Flint and a Hard Place, will provide more thoughts on the continuation of these suspected trends in water contaminated cases and proactive recommendations for industry.