Federal appeals court upholds judgment favoring SCV Water

Agency not required to establish liability for future costs tied to remediation at Whittaker-bermite site

A federal appeals court this week upheld a $68.5 million June 2022 judgment in favor of the Santa Clarita Valley Water Agency, according to water officials.

The agency also claimed a win in its effort to obtain additional declaratory relief under CERCLA, or the Comprehensive Environmental Response, Compensation, and Liability Act, in a news release Monday evening.

The legal win under the 1980 federal law means the water retailer does not need to establish liability for future costs related to remediation at the Whittaker-bermite site.

“Today’s ruling by the 9th Circuit is an important step in a lengthy process to ensure SCV Water finally recovers funding to address groundwater contamination caused by the Whittaker Corp.,” SCV Water General Manager Matt Stone said in the release. “Water quality remains our top priority, and this ruling ensures that SCV Water customers remain protected and will continue to receive drinking water that meets all standards set by federal and state regulatory agencies.”

The appeal stemmed from a December 2021 jury finding Whittaker, a wholly owned subsidiary of Parker Hannifin, primarily was responsible for the damages sought by SCV Water, according to the agency.

The Whittaker-bermite site was previously the subject of a decades-long cleanup effort by the state Department of Toxic Substances Control. The site was deemed cleared in 2021. From the 1930s to the 1980s, the grounds were used for everything from munitions testing to rocket manufacturing.

SCV Water officials have estimated their total cost in capital improvement for water-treatment projects at over $200 million, and ongoing

operating costs in excess of $15 million once all of its systems are online. SCV Water is also engaged in a yearslong lawsuit against 3M and Dupont to recover costs.

One of Whittaker’s arguments on appeal was that it was not the only polluter to damage the soil, having taken possession of the land in 1967, after decades of misuse. This argument ultimately was rejected.

“The jury found Whittaker liable for negligence, trespass, public nuisance and private nuisance, and awarded damages for past harm and restoration or repair costs,” according to a summary of the court’s opinion by Judge Richard C. Tallman. “The jury verdict was reduced to $64,870,000, reflecting a 10% reduction due to SCVWA’S fault for failure to mitigate damages and an offset for a settlement between SCVWA and a third party.”

Whittaker raised three issues on appeal denied by the three-judge panel, according to SCV Water’s release.

Mark Elliott, a partner with Pillsbury Winthrop Shaw Pittman LLP’S environmental and natural resources practice group who represented Whittaker during January oral arguments of the appeal, was not immediately available for comment Tuesday.

Whittaker argued the district court abused its discretion by permitting SCV Water to assert restoration costs as a measure of damages, that SCV Water did not adequately establish that groundwater treatment facilities are an appropriate measure of damages and that the jury award of costs was not reasonable.

“After carefully reviewing the record, we hold that none of Whittaker’s arguments are availing, and thus we affirm the jury award against Whittaker,” Tallman wrote.