January 24, 2013

Presented by Alfred Smith, Partner

CLE InternationalColorado River Conference

Perchlorate Update

The San Gabriel Valley

History of Basin Contamination1979 – VOC contamination

discovered1983 – Basin declared superfund site1994 – R.O.D. issuedAdding perchlorate and NDMA to the

mix–1997 testing–No ready treatment solution–Water supply crisis

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How Widespread is Perchlorate in U.S.?Surface and Drinking Water Occurrences

UCMR Systems Measuring for Perchlorate

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How Widespread is Perchlorate in U.S.?Surface and Drinking Water Occurrences

The ComplaintThree Water Companies and Water

Quality Authority bring CERCLA action naming scores of defendantsAlleged waste discharge practices

contaminated groundwaterLiability under CERCLA for some

undisclosed portion of the clean up estimated between $89,000,000 and $100,000,000.

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Approximately 19 defendants file cross-claims on water entities involved with recharging groundwater with Colorado River water

Named over three dozen partiesWater purveyors, cities, counties and

WatermasterAllegation that groundwater recharge from the

Colorado River triggers CERCLA liability6

Defendants’ Response

EPA detected perchlorate in Henderson Nevada EPA alleged that 1,000 pounds per day of

perchlorate entered Lake Mead and the Colorado River through contaminated groundwater Perchlorate linked to two manufacturing facilitiesCleanup activities underway under the

supervision of EPA and the Nevada Division of Environmental Protection

Perchlorate and the Colorado River

Water Entities’ Response

Water entities filed motions to dismiss for failing to state a claimRule 11 MotionFrivolous ClaimsNo reasonable basis in fact or law

Water Entities’ Response

Recharge does not create liability Under CERCLANot an “Arranger”Recharge is a beneficial use, not a wasteState water policy and legislation

encourage groundwater recharge and conjunctive use

Motions to Dismiss

No specific intent to dispose of a wasteBurlington Northern & Santa Fe Railway

Co., et al. v. United States, et al., 129 S.Ct. 1870 (2009)Team Enterprises, LLC v. Western

Investment Real Estate Trust, No. 10-16916 (9th Cir. July 26, 2011)

Motions To Dismiss

Judicial Immunity for Court-Appointed WatermasterRecharge Operations Conducted Pursuant

to Order of the Los Angeles Superior CourtWatermaster is not a “person” under

CERCLA

Motions To Dismiss

Court orders mandatory mediation and stayed all litigation activitiesSpecial Master AppointedMultiple settlement conferences, status

conferences and mediation

Litigation Stay

Pending Settlements in Principle ReachedConsent DecreesMotions for Good Faith Settlement

ApprovalContinuing Jurisdiction

Current Status

Contact

Alfred E. SmithPartner

Nossaman LLP777 S. Figueroa Street, 34th Floor

Los Angeles, CA 90017Phone 213 612-7800

Fax 213 612-7801asmith@nossaman.com

www.nossaman.com