Seeking Municipal Funding Through the Legal Process

The need for municipal funding can be a persistent concern for local government leaders, who often juggle many priorities. Utility funding to support infrastructure improvements, for example, while often needed to meet new state and/or federal regulations, may compete with other vital projects. In these instances, municipalities may even have to shoulder costs to mitigate potential environmental risks from soil or groundwater contamination. These issues can be a drain on municipal budgets, requiring leaders to make tough decisions over which projects receive funding and which must wait. For officials who strive to meet all their communities’ needs, this can be frustrating. 

For municipalities dealing with contamination concerns, the traditional funding sources of grants, loans, taxes, and utility rate-setting may not be sufficient to cover the costs of water treatment or other mitigation efforts. Increasingly, leaders seeking municipal funding for these types of projects are looking beyond typical sources. One alternative solution is to pursue litigation to hold polluting manufacturers accountable. Cities, counties, and public utilities have utilized this funding strategy for decades to recover costs after discovering contamination. While the ongoing litigation over PFAS is perhaps the most well-known example, entities have recovered costs for many other contaminants over the years, including perchlorate, methyl tertiary butyl ether (MTBE), 1,2,3-trichloropropane (TCP), and more. As states begin regulating additional emerging contaminants, such as 1,4-dioxane, many municipal leaders are considering similar legal funding strategies to meet their communities’ needs. Entities can use the funds acquired through these methods to support infrastructure projects, environmental cleanup efforts, or even other important local government initiatives. 

When considering using the law to recover contamination costs, municipal leaders may have questions regarding the litigation process. In this article, we will explain how environmental law firms can guide municipalities through the cost recovery process from start to finish. We will also explore how attorneys experienced in this area of law can help entities overcome common challenges, including statutes of limitations and identification of contaminant sources. 

Legal Consultation: The First Step When Seeking Municipal Funding

The first step for leaders exploring their legal options is to arrange for a consultation with an environmental law firm with experience in contamination cost recovery. During this meeting, an attorney will explain potential claims and strategies to secure municipal funding. The consultation also provides an opportunity for decision-makers to get to know the attorney and firm and ask specific questions they may have about their experience and the legal process. After this meeting, municipal leaders should be able to determine whether the firm is an ideal fit for their needs. If so, they may make plans to engage with them and proceed with the litigation process outlined below. 

What is the Litigation Process for Contamination Lawsuits?

Contamination litigation follows a unique process. Although municipal officials may be accustomed to more common legal issues, seeking legal counsel with expertise in this specific area of law may help avoid costly mistakes. An experienced firm can work with municipalities to streamline the legal process, reducing the staff time and resources required. 

While each case is unique and may require special attention in one or more areas, the basic steps of the litigation process are as follows: 

1. Investigation: An environmental law firm can help identify the most likely source of contamination and can perform research to find additional information that may be helpful to the case. 

2. Filing the lawsuit and initial disclosures: The law firm completes the appropriate paperwork to file a lawsuit on behalf of the municipality. The municipality and the firm may work together to collect evidence of polluters’ wrongdoing. 

3. Fact discovery: The plaintiff and defendant each have access to the information from the opposite side of the lawsuit. Documents and information are exchanged upon request. 

4. Mediation: Sometimes, defendants prefer to offer plaintiffs a settlement to avoid going to trial. A law firm with experience in similar cases can help municipalities determine an appropriate settlement amount. If both sides cannot agree to a settlement, then the parties proceed to the next step. 

5. Expert discovery: The municipality’s legal counsel conducts further research. If expert analysis is required at this point, specialists may become involved. 

6. Settlement or trial: After exchanging evidence, the plaintiff and/or defendant may attempt to reach a settlement or proceed to trial. 

By carefully selecting a law firm with experience in contamination litigation, municipalities can be better prepared for each step of the legal process. Polluting manufacturers can recognize that law firms that have gone to trial against large companies in the past will not be afraid to do so again if necessary. Therefore, it is important to choose a legal team that will support the municipality in seeking the best possible outcome, whether that means reaching a settlement or defending their clients’ rights in trial. 

How is the Legal Process Different for PFAS MDL Participants? 

While the litigation process outlined above is applicable to cost recovery lawsuits for many different contaminants, municipalities impacted by PFAS contamination may benefit from a simpler process. Because thousands of municipalities, utilities, state and local governments, and other entities filed similar complaints against the same PFAS manufacturers in recent years, these claims have been grouped together into a multidistrict litigation (MDL). By consolidating the discovery and pretrial motions, the MDL saves time and money for the plaintiffs and the defendants. Whether municipalities are facing challenges due to PFAS in drinking water, wastewater and biosolids, soil, or even from landfill leachate, they may be able to save valuable time and resources by filing a claim as part of the MDL. 

Common Challenges in Contamination Litigation 

Municipalities considering legal action against chemical manufacturers should be aware of potential obstacles on their path to cost recovery, such as state statutes of limitations and difficulty locating contaminant sources. Law firms that focus exclusively on this area of practice are accustomed to these concerns and can easily navigate any issues that may arise.  

How Does the Statute of Limitations Affect Contamination Lawsuits? 

A statute of limitations is a law that defines the maximum time in which an entity may seek recovery for damage they incurred. Each state has different rules dictating the time allowed and what events trigger the clock to start running.  

For municipalities seeking to recover costs from polluting manufacturers, the time limit may be as short as two years from when they first discovered the contamination. A municipality cannot recover funds through legal action if the statute of limitations has expired, no matter how justified their claims may be. Therefore, it is generally in a municipality’s best interest to seek legal guidance sooner rather than later. Even if a municipality suspects the statute of limitations may have already expired, it can be helpful to consult a qualified environmental attorney to determine if any legal funding solutions are still available based on the case’s specific details. 

How Can a Legal Team Help Identify Contamination Sources? 

As mentioned above, one of the first steps in seeking contamination cost recovery is determining the responsible party. This process can be simple for some contaminants, such as PFAS, which were exclusively produced by a few companies that are now named in thousands of lawsuits over the chemicals’ harmful effects. However, it is not always easy to track down the manufacturers that have allowed other contaminants to pollute soil or water. In some cases, without a known point source, the responsible party or parties may not be immediately apparent. Fortunately for municipalities seeking to hold polluters accountable, environmental law firms with experience in these types of cases can assist in locating contaminant sources. 

In one example of successful source identification, SL Environmental Law Group helped the City of Pomona, California determine the source of perchlorate drinking water contamination, eventually securing a recovery for the municipality of over $30.2 million. SL helped the city overcome significant challenges in tracking down the source, making it possible for Pomona to achieve funding to restore drinking water quality. Perchlorate is most often found in rocket propellants and fireworks, but the chemicals used for these purposes locally were not found to match the specific type of perchlorate found in Pomona’s water. Instead of giving up, SL Environmental sought assistance from outside experts, whose research led to the conclusion that contaminated fertilizer mined from the Atacama Desert in Chile by SQM North America Corporation (SQMNA) was the source of the contamination. By seeking help from SL to identify the cause of the contaminated drinking water, Pomona was able to hold the manufacturer responsible for the cost of water treatment solutions to remove perchlorate.

Conserving Time and Resources by Mitigating Potential Setbacks 

The litigation process for contamination cost recovery lawsuits is complex, which may put additional stress on local governments. Municipal leaders that are already managing limited time and resources can benefit from working with a law firm that focuses exclusively on helping those affected by contamination seek to recover funding. Because these firms are more familiar with the unique challenges of these cases, they can take more of the load off of municipalities. This allows local governments to dedicate their attention to the many other needs of their communities, trusting that their cost recovery efforts are in capable hands. 

Start Seeking Cost Recovery for Your Municipality 

Municipal leaders have many priorities to address when contamination is detected within their jurisdiction, and the need for funding to cover water treatment solutions or other important projects is just one of them. A law firm with experience in contamination  litigation can help busy local governments navigate the complex legal process. To learn more about options for your municipality, visit our resources. 

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