How SL Helped Pomona, CA Recover Its Perchlorate Treatment Costs

In the late 2000s, the City of Pomona, California discovered a concerning and costly water quality issue: perchlorate contamination above the 6 ppb (parts per billion) regulatory limit in 14 of its drinking water wells. Consumption of water containing perchlorate is associated with serious health risks, particularly for fetuses and infants. The City knew that it needed to act quickly to ensure the safety of its community.

Knowing that local residents had not played a role in causing the water contamination, Pomona's leaders wanted to protect them from the financial strain of cleanup efforts. They decided to seek to hold the polluters responsible for drinking water treatment costs and other related expenses. There was just one problem: the suspected source of Pomona's perchlorate contamination was defective fertilizer last used in the area decades earlier. Could the manufacturer of this contaminated fertilizer be identified and held responsible? Despite this challenge, the City was committed to doing everything in its power to make polluters, not residents, pay the multimillion dollar price for perchlorate cleanup.

With the help of SL Environmental Law Group, the City of Pomona was able to identify and sue the fertilizer manufacturer , ultimately recovering over $30 million to cover the past, present, and projected future costs of treating the perchlorate.. This particular legal battle was unusually tough from the start, but SL had the knowledge and persistence to see it through. With SL's support, the City overcame many challenges, eventually achieving its goal of holding a polluter accountable for the damage it had caused.

Discovery of Perchlorate Contamination

The City of Pomona was conducting routine testing for drinking water contaminants regulated in the State of California in the late 2000s when it detected elevated concentrations of the chemical perchlorate. Exposure to perchlorate can cause severe negative health effects, especially for vulnerable individuals. As a result, Pomona's leaders knew they had to act quickly to protect public health.

Levels Exceeded California's Regulatory Limit for Perchlorate in Drinking Water

Perchlorate is a chemical often found in rocket propellants and fireworks. It is also used in the production of matches, flares, and other explosives. The concentration of perchlorate allowed in drinking water has been strictly regulated in the State of California since 2007, when it established an MCL (maximum contaminant level) of 6 ppb for the chemical. In 2015, the PHG (public health goal) was revised to an even lower level of 1 ppb. While public health goals are not enforceable, they represent the levels at which contaminants present no health risks. This very low PHG underscores the dangers of perchlorate contamination, even in extremely small amounts.

Public Health Implications of Perchlorate Exposure

Exposure to perchlorate can have severe and lasting effects on human health. The chemical can inhibit iodide uptake, reducing thyroid hormone levels and interfering with thyroid function essential for the growth of developing fetuses and young children. These thyroid problems can also affect the maintenance of metabolism and cognitive function in adults. Because perchlorate is considered a toxic substance, a quick and thorough response upon detection above regulatory limits is necessary to safeguard community health.

Immediate Action to Protect Public Health

To protect the safety of its community, the City of Pomona wasted no time in responding to the perchlorate detection by making expensive modifications to its existing treatment processes, eventually spending nearly $10 million to design and build a water treatment system specifically for removing perchlorate. The projected expenses also extended beyond the initial construction of the plant, as its operations and maintenance costs were expected to be tens of millions of dollars more over the decades that perchlorate was expected to persist. In need of funding and with limited resources available, Pomona began exploring options to hold polluters responsible for the increased costs. In 2010, the City retained SL Environmental Law Group to seek to recover past and future costs associated with remediating perchlorate contamination.

Polluters Should Pay - But Who?

Like many other water providers who have filed contamination lawsuits since, Pomona used a legal theory called products liability. Under this doctrine, manufacturers are liable for damage caused by products that fail to live up to an ordinary consumer's reasonable expectations for their safety, or that have an unnecessarily risky design, or if they fail to warn of the products’ hidden dangers. Products liability empowers those injured by a product to pursue litigation against the manufacturer.  

To litigate under this principle, however, a manufacturer must first be identified. In many cases, such as the more recent proceedings concerning PFAS, this is relatively simple. PFAS, and firefighting foam that contained it, was produced only by certain manufacturers. However, identifying the source of the perchlorate in the Pomona, California water system was more complicated. The potential local sources identified were not found to match the specific type of perchlorate found in the water.

Experts Helped Trace Contaminants to Surprising Origin

Pomona sought assistance from experts who, after thorough research, discovered that 90% of the perchlorate pollution in the region originated from fertilizer imported from Chile in the first half of the 20^th century. This fertilizer, mined from the Atacama Desert in Chile, was distributed to local citrus farmers in the Pomona area by a corporate predecessor to SQM North America Corporation (SQMNA), a branch of the multinational mining entity Sociedad Química y Minera de Chile (SQM). SL and the City of Pomona had successfully identified the polluters and were ready to seek to hold them accountable for selling dangerous products. With SL's help, the City filed a product liability lawsuit against SQM seeking recovery of the City’s past and future costs for remediating perchlorate contamination.

Proving the Case: How SQM Contributed to Fertilizer Contamination

Perchlorate contamination due to defective agricultural products can be especially challenging for affected water systems, as it can exist for years before being detected. Some types of point-source pollution such as accidental spills of hazardous substances can be quickly noticed, enabling cleanup to begin immediately to reduce environmental impact. In contrast, contaminants from fertilizer can slowly infiltrate into soil and water over decades of continuous application, and the risks of perchlorate in particular to human health were not fully understood until decades after the fertilizer was used. In Pomona's case, fertilizer contamination went unnoticed until it became a serious issue that was regulated by the state and costly to remediate. Despite these challenges, SL attorneys argued that SQM should take responsibility for the cost of cleaning up contamination caused by its defective products.

Flawed Manufacturing Practices Led to Contamination

SQM tried to avoid responsibility, but SL pointed out that the company knew that perchlorate was a dangerous contaminant, at least to plants. Furthermore, SL discovered that manufacturing methods had existed beginning in the 1920s that could have removed most of the perchlorate from the fertilizer. This meant that SQM had decided not to make their products safe for users and their communities, even though they had the ability to do so.

Pomona's Hard-Fought Legal Battle

As a large multinational corporation, SQM had many resources at its disposal to push back against Pomona and SL. Despite the clear evidence indicating that its actions had led to perchlorate contamination, SQM deflected responsibility for its defective product. The company challenged the City of Pomona through a long legal battle including multiple trials and appeals. Despite SQM’s efforts, the City of Pomona and SL refused to give up the fight.

Persistence Paid Off in Over $30.2 Million Recovery

Finally, 13 years of hard-fought litigation came to a close when the Ninth Circuit Court of Appeals ruled in April 2023 that the evidence supported the city’s claim that the fertilizer had been defectively designed to contain excess levels of perchlorate. The court further determined that the suit was not barred by the statute of limitations. Proceedings in the case officially culminated with SQM's payment to the City of more than $30.2 million in the fall of 2023. This payment represented the City’s full costs, both those already incurred and those expected to be over the next 30 years, for treating perchlorate in its drinking water supplies, along with certain costs awarded by the court, plus interest.