Proliferation of Lead-Exposure Litigation Creates New Risks for Contractors

On January 16, 2016, President Obama declared a federal state of emergency in Flint.  Dozens of class actions were filed in state and federal courts against government officials and agencies involved in the decision to change Flint’s water source.¹  Among other claims, the plaintiffs alleged gross negligence, intentional misconduct, fraud, assault and battery, and intentional infliction of emotional distress.  Notably, several lawsuits also named as defendants the engineering firms retained by the city to study alternative drinking water sources and to design and implement the new water treatment system using the city’s existing water plant.²

National media coverage of the Flint water crisis has understandably resulted in increased scrutiny of the nation’s drinking water systems.  In May 2016, an investigation by USA Today revealed that between 2012 and 2016, nearly 2,000 water systems across the country contained lead levels that exceeded the EPA’s action levels.³  Given the frequency of coverage that lead-tainted drinking water continues to receive in the media, the prevalence of lead in the country’s drinking water supply, and the adverse health effects of lead poisoning, lawsuits stemming from lead exposure or contamination are likely to multiply over the next decade.  

B. How Does Lead-Exposure Litigation Implicate Contractors?

Contractors are particularly susceptible to the increased risk of lead-exposure complaints given the potential impacts of roadway construction and repairs, underground work (such as replacement of sewer or drain lines), and other disruptive construction activities.  In the past year, class actions were filed in Chicago, Philadelphia, and Fresno alleging that city officials knowingly undertook construction work that disturbed old lead pipes, causing toxic levels of lead to leach into the city’s drinking water.⁴  

In Micheli v. City of Fresno, the plaintiffs sued the city as well as two private contractors that installed new water meters.  The class plaintiffs claimed that the city of Fresno and its private contractors negligently connected brass water meters to galvanized piping, which allegedly violated industry standards, accelerated corrosion of existing lead pipes, and exposed residents to toxic levels of lead in their drinking water.

Although the contractors were not sued in the Philadelphia or Chicago class actions, the plaintiffs alleged that construction activities resulted in disturbances to underground lead piping that has caused widespread harm to residents and their properties.  The class plaintiffs in Delopoulos v. City of Philadelphia claimed that drilling, hammering, sawing, refitting of piping, and related activities damaged lead service lines connected to the residences that caused lead to contaminate the water supply.  The class plaintiffs in Blotkevic  v. City of Chicago alleged that the city’s efforts to replace hundreds of miles of lead piping has increased the amount of lead particulates in the drinking water.  

It is not hard to envision similar claims against contractors that perform construction or repair work on behalf of the government, whether sued directly by plaintiffs or brought in as third parties by a public body or agency seeking indemnification.⁵  Because litigation linking lead-tainted drinking water to construction activity is a relatively new phenomenon, it remains to be seen if government contractors will become a popular target of such litigation.  

C. Considerations for Reducing Risk of Involvement with Lead-Exposure Litigation

Depending on the nature of the project, the contractor’s relationship with the utility/owner, and the jurisdiction where the project is located, a proactive contractor and its counsel may have several avenues to avoid or limit liability arising from lead-exposure lawsuits:

1. Notify residents about the work to be performed in the area, the risk of increased lead levels in drinking water potentially associated with the work, the dangers of lead exposure, and protective measures to ensure safety of drinking water.
2. Put the owner on notice of potential effects of the work on underground lead-containing pipes or structures and, if possible, recommend alternative means and methods to minimize or reduce potential release or dispersal of lead particulates.
3. Retain a third party to collect data on lead levels in the drinking water before and after work to identify any measurable changes.  
4. Implement safety protocols recommended by the EPA to reduce the risk of lead exposure in addition to any special requirements of the owner.
5. Ensure strict compliance with contract requirements when performing work by utilizing quality control inspectors tasked with overseeing the work and thoroughly documenting compliance with plans and specifications.

In addition to these practical measures, a contractor should confer with its insurance broker to determine if its program provides coverage for lead-exposure claims.  A contractor’s counsel should also be familiar with federal and state immunity law.  In addition to the immunity recognized in Boyle and its progeny that applies to federal projects,⁶ many jurisdictions have enacted immunity statutes with their own unique requirements.  A contractor’s counsel should also be aware of any pitfalls in any applicable anti-indemnity or limitation-of-liability statutes.  

D. Conclusion

Most lead-exposure suits to date have not targeted the contractors who performed the work that allegedly caused or exacerbated the contamination, but contractors should be prepared in the event that changes.  Prudent contractors should be aware of the risk of getting ensnared in this type of litigation before bidding on work that may impact or disturb underground lead-containing pipes or structures.  At a minimum, contractors and their counsel should explore available insurance coverage options, assess the ramifications of any indemnity or insurance obligations required by the contract, and take necessary steps when performing the work to satisfy the legal requirements of applicable federal and state immunity law. 

Endnotes

1. See, e.g., Mays v. City of Flint, No. 16-106112 (Mich. Cir. Ct.-Genesee Jan. 19, 2016) (state class action against City of Flint, Receivership Transition Advisory Board, and individual state and city officials); Mays v. Snyder, No. 15-14002, 2015 WL 7175656 (E.D. Mich. Nov. 13, 2015) (federal class action against governor, State of Michigan, City of Flint, and individual state and city officials); Boler v. Earley, No. 16-10323, 2016 WL 691240 (E.D. Mich. Jan. 31, 2016) (same); McMillian v. Snyder, No. 16-10796, 2016 WL 861350 (E.D. Mich. Mar. 7, 2016) (same).

2. See, e.g., Mason v. Lockwood, Andrews & Newnam, No. 16-106150 (Mich. Cir. Ct.-Genesee Jan. 25, 2016) (state class action against engineering firms for professional negligence); Gilcreast v. Lockwood, Andrews & Newnam, No. 16-11173, 2016 WL 1258320 (E.D. Mich. Mar. 31, 2016) (federal class action against engineering firms for professional negligence).  The city of Flint hired two engineering firms to prepare the city’s water treatment plant to produce the city’s drinking water supply after the switch.  These defendants allegedly failed to include necessary upgrades for anti-corrosive treatment.

3. Laura Ungar, Lead Taints Drinking Water in Hundreds of Schools, Day Cares Across USA, USA Today (Mar. 17, 2016), https://www.usatoday.com/story/news/nation/2016/03/17/drinking-water-lead-schools-day-cares/81220916.

4. See Blotkevic  v. City of Chicago, No. 16-2292, 2016 WL 692549 (Ill. Cir. Ct.-Cook Feb. 18, 2016); Delopoulos v. City of Philadelphia, No. 16-503980, 2016 WL 3091171 (Pa. Comm. Pl. June 2, 2016); Micheli v. City of Fresno, No. 16-2937 (Fresno Sup. Ct. Sept. 9, 2016).

5. Kay Baxter, Benjamin Heckman, & Joseph Speelman, Lead Litigation:  Lead in Drinking Water Issues in the 21^st Century, http://www.iadcmeetings.mobi/assets/1/7/13.1-_LEAD_IN_DRINKING_WATER_ISSUES_IN_THE_21st_CENTURY_Panel_2-21-2017.pdf.  (noting that the types of defendants in such suits “may continue to grow to include also contractors, civil engineers, civil planners, and others who designed and built public water systems with lead-containing  pipes, or even to contractors who knowingly built homes with lead pipes, used lead fixtures, or hooked into the lead main source without determining other viable alternatives.”).