U.S. ANNOUNCES LARGEST PENALTY EVER AWARDED AGAINST A PUBLIC WATER SYSTEM IN MONTEREY COUNTY, CALIFORNIA

WASHINGTON, D.C. - The Justice Department and the U.S. Environmental Protection Agency today announced that Judge Jeremy Fogel, of the U.S. District Court for the Northern District of California in San Jose, issued an order on May 20 imposing the largest penalty ever against a public water system. Defendants Alisal Water Corporation, related companies, and Robert and Patricia Adcock, the individual owners of the systems, were ordered to pay a penalty of $500,000 for violations of the federal Safe Drinking Water Act.

“This case is an example of how the federal government can work together with state and local governments in enforcing environmental laws,” said Thomas L. Sansonetti, Assistant Attorney General for Environment & Natural Resources. “The Justice Department was able to provide the resources to bring the action in federal court and convince the judge of the need for extraordinary relief. The water systems will be placed in the hands of reputable purveyors and the large penalty sends a message to these defendants and other providers that violations of the Safe Drinking Water Act will not be tolerated.”

"The EPA will continue to be vigilant in ensuring that Monterey County residents have water safe to drink at all times," said Alexis Strauss the EPA's water division director for the Pacific Southwest region. "The county, state and EPA together pursued these violators to ensure false test results and other violations were exposed."

The case involves privately owned drinking water companies serving 28,000 consumers in Salinas and other parts of Monterey County, California. The U.S. originally filed the action in 1997 alleging that defendants submitted false drinking water reports to state and local regulators in the early 1990s. Under the federal Safe Drinking Water Act, the U.S. retains the right to enforce the Act even when the state has primary enforcement responsibility. In this case, the State of California asked the U.S. Environmental Protection Agency to intervene and bring an action against Alisal Water Corporation and related entities.

In 2000 and 2001, while the case was pending before the court, two of defendants’ small systems, the Moss Landing and Vierra Canyon Water Systems, experienced boil water orders extending for months. Government inspections of the water company facilities at this time and defendants’ inability to resolve the boil water orders in a timely manner led the U.S. to seek to have the companies put in receivership and sold to reputable purveyors. After trial in early 2002, the court agreed with the U.S. and appointed a receiver to take over all but one of defendants’ systems. In April of this year, the Court ordered the systems in receivership sold to a number of different water companies. The sales are pending.

The penalty, higher than that in any reported SDWA public water system case, was, according to the Court, warranted “in light of the number and nature of violations at issue, Defendants’ repeated refusals to cooperate with regulators over a span of years, the serious risks to public health and the fears and inconvenience imposed upon thousands of Defendants’ customers.” The Court specifically found that the violations spanned approximately a decade and that defendants conduct reflects a persistent pattern of non-compliance with the most basic responsibilities of a public utility.” In settling on a $500,000 penalty, the Court found no evidence to warrant mitigation of the penalty except defendants’ limited ability to pay.

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