Nearly 40 years after The Whittaker Corp. stopped activities that contaminated the Santa Clarita Valley’s groundwater supply, a three-judge panel for the federal Ninth Circuit Court of Appeals heard arguments for an appeal over the cost of the cleanup.
Whittaker’s appeal claims the award to SCV Water Agency was speculative, and it should be thrown out because Whittaker didn’t get a chance to challenge the amount of property loss, which is a key factor in figuring out a party’s restoration cost under state law.
The company argued that it’s only required to return the groundwater to the level of contamination it was at when it acquired the property in 1967, which was years after the water supply was first polluted.
Attorneys for SCV Water Agency argued to the court back in January that in addition to the more than $68 million the water retailer-wholesaler has been awarded for treatment facilities, it should also get a federal declaration to recoup ongoing costs for water-blending, which is still necessary to clean the supply from the manufacturing contaminants while its cleanup facilities go online.
The costs have increased due to additional contaminants SCV Water has had to remove since its previous awards, the agency’s lawyers argued.
The case is a study of how long the financial issues surrounding environmental problems can take to resolve.
The panel also heard arguments over the safety of what’s considered an MCL, or maximum contaminant level, which is an Environmental Protection Agency term for the “maximum allowable amount of a contaminant in drinking water which is delivered to the consumer.”
Both parties are now awaiting the judges’ opinion on the appeal.
The federal appellate court does not announce schedules for when its opinions are ready and there’s no upcoming hearing scheduled. (Footage of the arguments can be seen here: youtube.com/watch?v=e9UCtsKa9Ms.)
SCV Water complaint
With a cleanup plan that began in the 1990s, the property was cleared for development by the state Department of Toxic Substances Control, which released its hold on the property in 2021, according to the DTSC website for the property: dtsc.ca.gov/whittaker-bermite.
Due to the contamination, SCV Water was first awarded just under $3 million in a 2007 settlement over its cleanup costs to address the groundwater impacts. The settlement agreement also required Whittaker to pay for the installation and operation of several perchlorate treatment systems and replacement wells to restore production capacity lost to contamination, SCV Water officials said.
Speaking on background, a water official indicated that judgment also required Whittakter to put away in excess of $70 million to pay for cleanup costs, which has since been spent.
Local water officials said they had to file a second complaint in 2018, when the detection of additional contaminants led the agency to realize more wells would have to be taken offline.
The 2018 complaint ultimately led to an additional $65.8 million judgment in July 2022, which is currently the amount being disputed by Whittaker.
Attorneys for SCV Water also argued at the hearing that the 2022 award should be higher.
That award figure assumed damages that would cover blending costs until its treatment plants were online, and since its treatment plants aren’t all online yet, the treatment costs have gone up.
Jennifer Meeker, the attorney representing SCV Water at the hearing, contended that Whittaker’s argument that the settlement was too high was based on “the idea that (SCV Water) has not been harmed or it’s kind of a ‘no big deal’ that their VOCs, which are carcinogenic, cancer-causing, not natural contaminants, the idea that these carcinogenics are really no big deal in the water, because, so far, the wells admittedly, haven’t pulled up water that has exceeded the MCL, which is the EPA’s level.”
“That’s why it’s still quote-unquote drinkable,” Judge Richard Tallman said.
“According to Whittaker, it’s still drinkable — I wouldn’t drink it. But according to Whittaker,” she replied.
“Well, you do though, don’t you,” Tallman asked, implying that water within the MCL can be served.
“I don’t live in Santa Clarita,” she replied.
Meeker was arguing that the water being released by SCV Water from the wells had to be at the level of zero detectable levels of contaminants per the wells’ permits. That meant an additional cost for blending until the treatment plants were online.
“The key point there is that the harm, reasonableness of harm, there’s no fine line based on an MCL level,” she said, noting the aquifer in question surrounding the Whittaker property is considered a “substantially impaired source,” which is why the state requires the supply released from Wells S-1 and S-2 in Saugus to have zero-allowable detection levels of contaminants.
SCV Water officials said Friday they were unable to comment on the proceedings or the arguments that are still a part of active litigation.
Whittaker arguments
However, Whittaker said its language regarding serving water that’s within the MCL comes from SCV Water.
“Whittaker only said that because that is what (SCV Water) has said to its customers for decades,” said Mark Elliott, counsel for Whittaker. “(SCV Water) has represented that ‘it’s no big deal,’ that ‘water is safe to drink at (wells) S-1 and S-2, we’re providing you that water with some blending, it’s not a big deal.’”
Elliott was arguing against Whittaker having to pay for additional blending costs, based on SCV Water’s contention that blended water is acceptable.
The significance in the argument is Whittaker’s contention that since it was not the first polluter on the property — it had been in use for about 30 years when Whittaker acquired it in 1967 — it shouldn’t be responsible for making the water pristine, only returning it to the state it was in when it acquired the already-polluted property. Pristine water would be a windfall, Whittaker argued, which is not allowable by state law for restoration.
Prior to Whittaker, the Los Angeles Powder Co. made dynamite at the site from 1934 to 1936, while Halifax Explosives made fireworks until 1942, according to The Signal’s archives. E.P. Halliburton Inc. made oilfield explosives; and then the Bermite Powder Co. moved in during the war effort to make flares and explosives throughout the Korean War.
The appellate panel questioned why that wasn’t brought up when the property was acquired by Whittaker, or during the trial court process; Elliott said the nature of the judgment process didn’t allow his client to introduce an expert on why the award should be reduced.
Elliott said blending was never explored as an alternative to the more expensive treatment plants.
At one point, Tallman said Whittaker already had an opportunity to argue that the award was excessive, which a trial jury rejected.
In her rebuttal, Meeker said the groundwater that’s underneath or near the Whittaker site is 100 times to 1,000 times the MCL level. She also cited evidence from a Whittaker expert who stated that contamination at that level doesn’t stop at the property line, “but rather it continues to migrate beyond the property line in a northwesterly direction to Santa Clarita’s wells.”
Even if you’re able to pump a supply and treat it so that it’s free of contaminants to users, Meeker said, you still have “massive amounts of contamination in the groundwater at the Whittaker site still migrating.”
Meeker asked for a federal declaration to address the migration problem, which she said would help the agency fully assess the contamination and its migration.
Elliott countered that the agency has repeatedly said the aquifers are safe.
Future plans
The land that was previously a DTSC cleanup site is now being looked at for a community of more than 6,500 housing units south of Soledad Canyon Road, east of Railroad Avenue and west of Golden Valley Road.
Now being billed as Sunridge, New Urban West is looking to build more than double the previous number of approved residential units on the land, from 2,911 to more than 6,500.
The proposal was the subject of a City Council study session on March 7, which reviewed the developer’s preliminary plans.
Prior to the Sunridge proposal, the developers behind what was then called Porta Bella pitched about 2,900 residential units and 2.5 million square feet of commercial space, 406 acres of parks and recreational space and a school site, and extensions of Magic Mountain Parkway, Santa Clarita Parkway and Via Princessa, which are also supposed to be extended according to the city’s general plan.
In July 2023, New Urban West submitted a preliminary design concept for the same land, which called for 6,550 residential units, the majority of which are multifamily or apartment units, 3.1 million square feet of commercial space, 430 acres of parks and recreational space and an extension of Via Princessa, City Manager Ken Striplin said.
The plans being discussed now call for six villages, expected to be built in six phases from east to west, with a blend of housing, commercial and recreational uses.
The City Council has not yet made a decision on the feasibility of preliminary development terms requested by Sunridge, and potential terms with New Urban West are expected to be presented to the City Council at a future hearing for discussion.
