A federal district court recently held that cities and operators of drinking water plants in six states had standing to survive a motion to dismiss their class action complaint against a manufacturer of the herbicide atrazine, even though the plants’ finished water did not exceed U.S. EPA’s maximum contaminant level for atrazine.

Atrazine is the most common and cost-effective herbicide used by farmers in the corn belt states, but it can pose problems for drinking water plants that rely primarily on surface waters, as opposed to groundwater, as their raw water supply source. Atrazine can enter into surface waters, e.g., rivers and lakes, when farmers fail to follow the directions and warnings on the label, such as by applying too much product, or when farmers fail to employ best management practices to prevent atrazine run off, such as by failing to use buffer strips. Drinking water providers often find elevated concentrations of atrazine in their raw water supply during the planting season in late spring and early summer.

Under the federal Safe Drinking Water Act, drinking water providers are obligated to test their finished water, meaning the final product after the processing of the raw water, to make sure it does not contain atrazine in concentrations above U.S. EPA’s maximum contaminant level (“MCL”) of 3 parts per billion. The MCL for atrazine is calculated on an annualized basis of four quarterly samples. EPA’s preferred method to remove atrazine from raw water is through an expensive granular activated carbon (“GAC”) filtration system. And, for the past decade, many courts have followed the holding in Iberville Parish Waterworks Dist. No. 3 v. Norvartis Crop Protection, Inc., 45 F.Supp.2d 934 (S.D. Ala.), affirmed, 204 F.3d 1122 (11th Cir. 1999), that drinking water providers have no injury in fact, or standing to bring a claim, where the contamination levels have not exceeded, or even approached, the MCL.

Atrazine use garnered notoriety following a study by the Indiana State Chemist Office and Purdue University. The study found a significant association between atrazine concentrations in drinking water and prevalence of small-for-gestational-age births. However, the study’s authors concluded that “it is not clear at present whether this association represents a true cause-effect relationship, as other co-occurring chemicals [herbicides acetochlor, alachlor, and metolachlor] in drinking water were significantly correlated with atrazine.” H. Ochoa-Acuna, J. Frankenberger, L. Hahn, C. Carbajo, "Drinking-Water Herbicide Exposure in Indiana and Prevalence of Small-for-Gestational-Age and Preterm Delivery," Env’l Health Perspective, Vol. 117, No. 10 (Oct. 2009).

Against this backdrop, twenty-five cities and operators of drinking water plants in Indiana, Ohio, Illinois, Iowa, Kansas, and Missouri filed a class action lawsuit against Syngenta Crop Protection, Inc. and its parent corporation Syngenta AG (collectively, “Syngenta”) regarding Syngenta’s herbicide atrazine in the case City of Greenville, Illinois, et al. v. Syngenta Crop Protection, Inc. The case is pending in the United States District Court for the Southern District of Illinois. The plaintiffs alleged that Syngenta manufactured atrazine and sold it to farmers knowing it had a great potential to run off crop land and into surface waters that served as the drinking water providers’ raw water supply. The plaintiffs seek to hold Syngenta liable for past and future costs to test, monitor, and treat their raw water for atrazine through GAC filtration systems and punitive damages. The plaintiffs styled their lawsuit as a class action complaint and alleged claims for trespass; public nuisance; strict liability for manufacturing, marketing, and selling an unreasonably dangerous product; and negligence.

Syngenta moved to dismiss the lawsuit arguing that the drinking water providers lacked standing to pursue their claims because they failed to allege an injury in fact since their finished water had not exceeded the MCL for atrazine. The court denied the motion to dismiss as to standing and held “a water provider may demonstrate an injury in fact even if its finished water does not exceed an MCL if its [cost to process] the water to meet its statutory obligations to the public becomes more costly because of a [chemical manufacturer’s] conduct.”

The federal district court cautioned, however, that just because the drinking water providers survived a motion to dismiss did not imply that they would succeed in their claims at summary judgment or at trial. That is, the court noted that in order to survive summary judgment and succeed at trial, the drinking water providers would be required to demonstrate that the atrazine levels in their raw water so exceed the MCL that GAC filtration systems are required for them to provide potable water to the public, or that testing for atrazine is necessary because the atrazine levels in the raw water sources are so high as to credibly threaten to push the atrazine levels in the finished water above the MCL. But, if the water providers simply install a GAC filter simply to improve water quality outside a specific imminent threat of atrazine in excess of the MCL, the court stated that “establishing standing will be difficult in not impossible.”

The court’s warning is significant for several reasons. First, atrazine levels are highest in late spring and early summer, after farmers begin planting their crops, but the MCL is based on the average of four quarterly tests. This means elevated spring and summer levels will be tempered by lower fall and winter levels. Second, drinking water providers are already obligated by the Safe Drinking Water Act to test their finished water for atrazine four times a year, so it will be interesting to see if the drinking water providers increase the frequency of their testing to demonstrate an injury. The drinking water providers are in a Catch-22 situation because they may want to test more frequently to show elevated concentrations of atrazine in their finished water, but such exceedences would result in violations of their permits subjecting them to possible fines and penalties. And, it will be interesting to see whether Syngenta raises a non-party defense, i.e., that plaintiffs’ damages were caused by others who are not parties to the lawsuit, against the largest farmers who ignored warnings and misapplied the product or who failed to employ best management practices to prevent atrazine run off from entering into surface water bodies. Best management practices may come into sharper focus after EPA finalizes its new NPDES Pesticide General Permit in response to the Sixth Circuit Court of Appeals decision in National Cotton Council of America v. U.S. EPA, 553 F.3d 927. The new NPDES Pesticide General Permit must be in place by April 9, 2011.

In addition to addressing the MCL defense, the federal district court dismissed strict liability claims asserted by the City of Jasper, Indiana and Indiana American Water Company because Indiana law does not recognize a cause of action for design defects, but only manufacturing defects. The court also declined Syngenta’s economic loss rule defense, which prevents a party from recovering purely economic losses, such as lost profits, rental expenses, and the value of lost time, in a tort action absent damage to person or property. The court found that the alleged injury to plaintiffs’ raw water supply was sufficient take plaintiffs’ claims outside of the economic loss rule defense. Finally, the court declined to address future damages and defenses based on the five year statute of limitations suggesting those might be better handled at the summary judgment stage of the proceedings. We will continue to follow the City of Greenville, Illinois case.