Funding Water Contamination Cleanup: Incorporating Litigation

The contamination of drinking water, wastewater, and soil impacts a wide range of agencies and populations, leading to costly cleanup efforts and potentially requiring ongoing investments for both public and private entities.  

As contaminants like PFAS, 1,4-dioxane, perchlorate, and TCP threaten water quality and public health, many public and private entities are being left financially responsible for expensive remediation projects.  

Water contamination is a costly issue, but that doesn’t mean entities like municipalities, utilities, and private well owners should bear the financial burden of remediation on their own — especially when manufacturers are responsible for releasing harmful contaminants into the environment.  

So, how can organizations secure funding for water contamination cleanup without passing on inflated costs to their customers and constituents?  

Water contamination litigation can serve as a powerful financial resource for these agencies, as well as an effective way to hold polluters accountable for their actions.

Agencies may not realize that they’re eligible to pursue this type of litigation, or that it can serve as an effective cost recovery strategy even if they aren’t actively spending on remediation.

Understanding the Contamination Landscape

PFAS: A Critical Opportunity for Cost Recovery and Accountability

Per- and polyfluoroalkyl substances (PFAS), also known as ‘forever chemicals,’ pose an ongoing contamination threat to water, soil, and air — in part due to their widespread manufacturing in the 20th century for use in various consumer products, firefighting foams, and industrial applications.  

PFAS currently lies at the center of many ongoing regulatory and legal activities, including landmark settlements from 3M ($12.5B), DuPont ($1.18B), Tyco ($750M), and BASF ($316.5M) to provide financial relief for affected drinking water agencies. The Court’s attention is now beginning to shift toward soil contamination cases, potentially expanding cost recovery opportunities for municipalities, airports, landfills, and fire training facilities affected by this contaminant.  

PFAS contamination cases can be a bit more straightforward when compared to other contaminants, in that agencies can pursue legal action against the PFAS manufacturers by simply demonstrating the presence of PFAS in their water, wastewater, or soil —without needing to identify the specific party that caused the contamination. This is due to the well-documented manufacturing history of PFAS by companies like 3M and DuPont. As with other types of contamination, agencies affected by PFAS can file a lawsuit even if remediation efforts haven’t been mandated by regulation. Legal action can be taken to secure funds for potential future cleanup efforts if contamination is present in water, wastewater, or soil.  

1,4-Dioxane & Emerging Contaminants in Water

Utilities may also face increasing regulatory scrutiny for the presence of other emerging contaminants in water systems, such as 1,4-dioxane, which is primarily used to stabilize chlorinated chemicals in various industrial applications.  

After decades of improper discharge and disposal, 1,4-dioxane has become a prominent contaminant in groundwater and surface water. While regulatory guidance surrounding it is still evolving, we are starting to see momentum at the federal and state levels.  

In November 2024, EPA released the final revised risk determination for 1,4-dioxane, concluding that the chemical presents an unreasonable risk to human health under its current conditions of use. The state of New York also finalized regulations to reduce its presence in Consumer Products, and several other states are in the process of defining their own Maximum Contaminant Levels (MCLs) for 1,4-dioxane. At the time of this article’s publication, these additional states include California, New Jersey, Illinois, and Virginia.

Federal regulations typically set the baseline for regulations, but states are always free to regulate contaminants more stringently. Agencies can expect that even if 1,4-dioxane isn't federally regulated, states may develop their own regulations to safeguard drinking water sources.  

Although 1,4-dioxane and other emerging contaminants are not federally regulated, agencies affected by contamination can still pursue litigation as a proactive way to offset the expected financial burden associated with their remediation.

It’s important to note that, unlike PFAS drinking water settlements, where an agency must only confirm the presence of the contaminant, 1,4-dioxane cases require the agency to identify the contamination source in order to take legal action.

Once the contamination source is identified, agencies can pursue damages related to cleanup costs, alternative water sources, and future remediation. This requirement to trace the contamination source has shaped how agencies approach litigation. A relevant example, albeit with a different contaminant, is the case brought by the City of Lindsay which filed a claim against a perchlorate polluter. The resulting settlement allowed the city to fund the design and installation of a two-stage ion exchange treatment plant and cover the ongoing operation and maintenance costs of the plant.  

Perchlorate & Historic Contaminants

The EPA has committed to proposing a National Primary Drinking Water Regulation for perchlorate by November 21, 2025. At the state level, California set early notification levels for perchlorate in 1997 and established an enforceable Maximum Contaminant Level (MCL) by 2007—years ahead of federal action. Additionally, Massachusetts, Nevada, and Arizona have also set notification levels for perchlorate in drinking water as of the publication of this article.

Agencies affected by perchlorate contamination have pursued and secured major litigation outcomes against the parties responsible for perchlorate contamination in water systems.  

In one notable example, the City of Pomona received a $30M+ settlement for perchlorate contamination.  

Their results highlight the value of experienced legal counsel and diligence in ensuring polluters are held accountable for their actions — and recovering critical funding for agencies.  

Past litigation outcomes like the City of Pomona’s case demonstrate that early action and a commitment to the legal process are typically key factors for ensuring the most favorable outcome and maximizing the amount of funding received.  

Why Litigation is a Funding Opportunity, Not a Liability

Dispelling the Misconception About Litigation and Remediation Spending

Misconception: Agencies must have already incurred remediation costs, be actively spending money on remediation, or have immediate plans to begin a remediation project before filing a lawsuit.  

Reality: While agencies don’t need to have completed or even begun physical remediation to file a lawsuit, they do need to demonstrate that the contamination has caused or will cause damages—typically through estimated costs or expert assessments. In PFAS drinking water litigation, for example, many agencies have successfully pursued claims based on documented contamination and projected remediation costs. Litigation can be a proactive strategy to secure funding for necessary cleanup efforts, even if on-the-ground remediation is still in the planning stages.

How Municipalities and Other Entities Can Leverage Litigation for Financial Stability

Four Key Steps to Secure Funding Through Litigation

1. Identify Contamination: Collaborate with legal and environmental professionals to test for the presence of regulated contaminants in your water system. In PFAS drinking water cases, agencies have often been able to file claims by simply confirming the presence of contamination. In other cases, you may need to prove contamination and identify the contamination source to pursue legal action.  

2. Understand Your Legal Rights: Depending on the type of contaminant, agencies such as municipalities, counties, airports, and landfill operators may be eligible to file a claim even if cleanup hasn’t yet begun – provided they can demonstrate the presence of the contaminant and anticipated costs to address it. Remember that litigation isn’t just for recovering past expenses — it can be a tool to secure funding before remediation becomes necessary.

3. Partner with the Right Legal Team:
   Your choice in legal representation can significantly shape your agency’s experience with the litigation process. Law firms that focus exclusively on environmental litigation are well-positioned to guide municipalities and utilities efficiently through complex legal proceedings. The right legal team will work to minimize the burden on your agency wherever possible.

Real-World Examples of Litigation as a Financial Resource

Addressing Common Concerns and Taking Action

Do We Have to Take Legal Action Right Now?

The goal of pursuing water contamination litigation is to ensure that your agency is positioned to benefit from all available legal claims and subsequent funding. That being said, not all cases and types of contamination are alike, so there’s no one-size-fits-all timeline for when to file a claim.  

There are, however, specific state-level statutes of limitations that may be applicable to you. We recommend consulting with an experienced legal representative to determine when the clock starts or has started for your agency based on your specific situation.  

Remember, claims can be filed to preserve future financial options, which means you don’t need to be in the process of mitigating contamination to start the process.  

Will Filing a Lawsuit Negatively Impact Our Public Reputation?

In this context, lawsuits are aimed at holding polluters accountable, which would in turn mitigate the burden on taxpayers or the need to raise costs for consumers.  

Taking legal action against those responsible for the contamination is a quantifiable way to protect your community from cost increases and ensure they are not the ones shouldering the financial burden of future remediation efforts.

Many agencies have successfully used litigation to protect community resources without exposing themselves or their community members to added financial risk.  

When you choose to begin the litigation process, having a clear action plan for when and how to inform your community about the contamination and subsequent legal proceedings can help you maintain positive public sentiment and reinforce trust with your community members.

How Do We Know if We’re Affected by Contamination?

Routine water quality testing can help you identify potential contamination in a timely manner. An experienced firm will partner with your agency to determine whether your testing data indicates the eligibility of your potential claims and how to structure your lawsuit based on your specific testing data and anticipated costs.  

SL Environmental Law Group has spent the past 20 years successfully representing hundreds of public and private agencies affected by water contamination, resulting in over $1.2 billion recovered in settlements and trials, to pay for the cost of contamination clean-up.

Our team has decades of experience exclusively representing water suppliers in contamination cases, which allows us to be time efficient both preparing for and during the lawsuit, reducing the burden on our clients.

Additionally, we operate on a contingency fee basis to ensure no upfront litigation costs for your agency or your ratepayers and to reinforce our commitment to securing the most favorable outcome for you and your community.

Strengthening Your Agency’s Budget with Contamination Litigation

Water contamination litigation isn’t just a reactive measure; it’s a forward-thinking strategy that enables public and private agencies to secure funding and improve their long-term financial stability without upfront costs.  

By taking advantage of your available legal options, your agency can proactively address environmental challenges and hold polluters accountable, all while strengthening your financial position.