Enforcement Alert
Volume 6, Number 3
Office of Regulatory Enforcement
June 2003
Protecting the Quality of Our Nation's Drinking Water
Federal Court in California Finds Owners-Operators of
Public Water Systems Liable for SDWA Violations;
Places Eight Systems in Receivership
On April 9, 2003, a federal dis-
trict court in California handed
down another significant ruling in the
ongoing litigation between the United
About
Enforcement Alert
Enforcement Alert is published
periodically by the EPA's Office of
Regulatory Enforcement, Office of
Enforcement and Compliance
Assurance to inform and educate
the public and regulated community
of important environmental
enforcement issues, recent trends
and significant enforcement
actions.
This information should help the
regulated community anticipate
and prevent violations of federal
environmental law that could
otherwise lead to enforcement
action. Reproduction and wide
dissemination of this publication
are encouraged. To receive this
newsletter electronically, see
http://www.epa.gov/compliance/
resources/newsle tters/civil/
enfalert/index.html.
Director, Office of Regulatory
Enforcement: Walker B. Smith
Editor: Virginia Bueno
bueno.virginia@epa.gov
Address changes: Send email
message to: ncepiwo@one.net
Document Number: EPA 325-N-03-001
States and Alisal Water Corp., Toro
Water Service, Inc., and Robert and
Patricia Adcock, the majority share-
holders, officers, and directors of the
companies. These defendants are the
owners and operators of nine public
water systems in Monterey County,
California. Following earlier rulings
holding the Adcocks personally liable
for the water systems' violations of
the Safe Drinking Water Act
(SDWA), the court in its latest ruling
found that the Adcocks had fraudu-
lently conveyed assets away from
the companies. With this latest rul-
ing, the court has made it clear that
owners and operators of public wa-
ter systems will face serious conse-
quences when they fail to comply
with safe drinking water regulations.
This litigation began on Jan. 30,
1997, when the United States filed a
judicial action against Alisal, Toro
Water Service, and Robert and
Patricia Adcock. The United States
alleged that Alisal had violated the
SDWA by:
Exceeding the total coliform
bacteria limits;
Failing to give the public no-
tice of its violations;
Failing to perform required
tests to confirm the presence of
harmful bacteria;
Improperly reporting test re-
sults to the County and the California
Department of Health Services; and
Failing to sample its smaller
water delivery systems to ensure com-
pliance with lead and copper regula-
tions.
In August 2000, the district court
issued its first partial summary judg-
ment finding the defendants liable for
numerous violations of the SDWA, in-
cluding several violations involving in-
accurate reporting. In a case of first
U.S. and Guam Reach
Agreement for Guam
Waterworks Authority
Violations
SAN FRANCISCOThe
United States Attorney in Guam and
the U.S. Environmental Protection
Agency announced on May 21 the
terms of an agreement that requires
the Guam Waterworks Authority
and the Government of Guam to
take specific initial measures to im-
prove Guam Waterworks' drinking
water and wastewater systems.
Continued on Page 41 See Guam
Waterworks"
ittp://www.epa.gov/compliance/resources/newsletters/civil/enfalert/index.html
-------
Enforcement Alert
impression under the SDWA, the
court found the corporate defendants
and the individual defendants, the
Adcocks, liable for myriad violations.
The court held that the Adcocks were
liable because of their personal con-
duct as owners and operators.
During the trial in this case, the
United States described a pattern of
noncompliance and intransigence dat-
ing back to the mid-1980s. The United
States also demonstrated that the de-
fendants were not competent to run
their water systems and that, based
upon information provided by the de-
fendants themselves, they lacked ad-
equate financial capabilities to make
required improvements to ensure de-
livery of safe drinking water to con-
sumers. The United States therefore
sought a receiver to correctly run the
systems, with the goal of ultimately
selling the water systems to more re-
sponsible operators. The government
also sought a monetary penalty against
the defendants.
On April 9,2002, the court ordered
eight of the defendants' privately-
owned drinking water systems into
receivership as a result of defendants'
failure to comply with the SDWA and
to ensure the safety of the drinking
water that they provided to their cus-
tomers (the ninth system has not yet
been ordered into receivership but is
operating under a court order requir-
ing compliance with the SDWA). The
judge found especially serious the de-
fendants' failure to monitor the qual-
ity of its water and their submission
of "... false results, at best with gross
negligence and at worst with con-
scious intent to deceive." The judge
was concerned that the violations had
seriously affected customers: on one
water system, customers had endured
a five-week order to boil their water
before consumption, while on another
system, customers were forced to boil
their water for 10 months due to fe-
cal coliform contamination. The court
opined that misleading letters to cus-
tomers concerning the nature of the
drinking water problems had further
exacerbated the seriousness of the
violations. The court pointed to a long
history of violations, including viola-
tions of lead and copper sampling rules
that had continued not only after the
Adcocks had received a notice of vio-
lation from EPA, but even after the
initiation of this action in district court
and into the time of trial. Failing to take
responsibility for their actions, the de-
fendants chose to litigate rather than
cooperate with regulators.
In the most recent ruling in the ac-
tion, the court granted the United
States' claim for fraudulent convey-
ance of assets against the Adcocks.
The United States had argued at trial
on July 17, 2002, that the defendants
had fraudulently conveyed significant
assets into trusts in an effort to place
them beyond the reach of the govern-
ment. The court agreed and found that
in early 2002, at the time of the trial on
liability, the fair market value of the
assets was approximately $1.7 million.
With this important issue decided, ad-
ditional proceedings will focus on as-
sessment of an appropriate monetary
penalty against the defendants.
An Important Microbial Rule: Total Coliform Rule
When a "boil water emergency" is announced, there is often mention of a "total coliform violation." The Total
Coliform Rule sets limits for total coliform levels in drinking water, and dictates the type and frequency of testing that
water systems must perform. Coliforms are a group of bacteria, most of which are harmless, but all of which serve as
detectable markers that indicate when drinking water is potentially contaminated by more serious agents. There are
many types of bacteria, parasites, and viruses that can cause immediate, though usually mild, health problems when
humans ingest them in drinking water. Among the health problems that contamination can cause are diarrhea, cramps,
nausea, and vomiting. Together, these symptoms comprise a general category known as gastroenteritis, not usually life-
threatening for a healthy person. However, these same microbiological contaminants may cause more serious problems
for people with weakened immune systems, such as the very young, elderly, or the immuno-compromised. In addition,
other bacteria, viruses, and parasites may cause debilitating diseases, even among more healthy individuals.
Given the wide range of such microbiological contaminants, testing drinking water for each of them individually would
be difficult and expensive. Instead, water systems must measure coliform levels. The presence of coliforms in drinking
water indicates that there may be other more serious disease-causing agents in the water, which suggests that remedial
actions are required because the treatment system is not working properly or there is a problem in the pipes delivering the
water.
June 2003
-------
Enforcement Alert
National Primary Drinking
Water Regulations
Approximately 170,000 public wa-
ter systems exist nationwide. These
public drinking water systems, which
may be publicly or privately owned,
serve at least 25 people or 15 service
connections for at least 60 days per
year. Through the Public Water Sys-
tem Supervision (PWSS) program,
EPA implements and enforces drink-
ing water standards to protect public
health. Public water systems range in
size from large municipal systems
serving millions of people to small
trailer parks, campgrounds, day care
centers, and rest stops, but do not in-
clude drinking water wells that serve
fewer than 25 people. Roughly one-
third of the nation's public water sys-
tems are community water systems
like the ones involved in the Alisal
case.
Under the Safe Drinking Water
Act (SDWA), EPA regulates the qual-
ity of the nation's drinking water by
setting maximum contaminant levels
(MCLs) and by promulgating National
Primary Drinking Water Regulations.
MCLs limit the amount of certain con-
taminants in drinking water. MCL lim-
its reflect the level of protection nec-
essary for human health and the level
that water delivery systems can
achieve using the best available tech-
nology. Besides prescribing these lim-
its, EPA also sets water-testing sched-
ules and methods that water systems
must follow to verify that these limits
are being met. The rules may also re-
quire acceptable techniques for treat-
ing water to remove certain contami-
nants.
More than 80 contaminants are
regulated by the SDWA, including mi-
crobiological contaminants such as
June 2003 ^^^^^^^^
Through the Public
Water System
Supervision
Program, EPA
implements and
enforces drinking
water standards.
fecal coliform and
chemical contami-
nants such as lead
and copper. The
Lead and Copper
Rule, one of the
drinking water regu-
lations violated in 1he
Alisal case, sets
treatment technique
requirements to en-
sure that safe levels
of lead and copper
are met in the
public's drinking wa-
ter. For more infor-
mation on these
rules, see EPA's
website at http://www.epa.gov/
safewater/source/therule.html.
Potential Public Health
Impacts Associated with
Noncompliance
The potential public health impacts
associated with violating drinking wa-
ter regulations vary considerably de-
pending on the contaminants, concen-
trations, duration of exposure, and
other factors. For example, microbio-
logical contaminants such as fecal
coliform can cause a variety of gas-
trointestinal illnesses, with the poten-
tial for more severe, debilitating, and
sometimes fatal effects on children, the
elderly, and individuals with compro-
mised immune systems. Contamina-
tion of drinking water by sewage or
fecal matter can cause diseases such
as dysentery, cholera, meningitis, and
encephalitis. In children, lead contami-
nation can retard physical and mental
development and cause learning dis-
abilities, shorter attention span, kidney
problems, high blood pressure, and
other impairments. For this reason,
compliance with the National Primary
Drinking Water Regulations is critical
to protect public health. Violations of
contaminant limits and violations of the
monitoring and reporting requirements
that can hide the presence of harmful
contaminants can pose serious threats
to human health.
Compliance and
Enforcement Priorities with
Microbial Rules
Ensuring compliance with the "mi-
crobial rules" is a national priority for
EPA's compliance and enforcement
programs. These particular regulations
-------
Enforcement Alert
444
relate to the removal or inactivation
of microbiological contaminants such
as bacteria, viruses, and protozoa.
These regulations are a priority for
EPA because improperly treated
drinking water containing these con-
taminants may cause acute, severe
health affects.
Compliance Assistance: EPA
and the states conduct extensive com-
pliance assistance to public water sys-
tems. State and EPA compliance as-
Guam Waterworks/From Page 1
The "stipulated order for preliminary relief filed with the federal District
Court on May 21, 2003, begins the process of addressing compliance issues
at Guam Waterworks. The stipulated order addresses near-term injunctive
relief (over the next 3-5 years) needed to improve operations to address the
imminent and substantial endangerment situation. In a complaint filed on Dec.
20, the United States had alleged that Guam Waterworks repeatedly vio-
lated both the Clean Water Act and Safe Drinking Water Act. The federal
lawsuit was initiated to ensure that Guam Waterworks undertakes long-term
projects to correct these compliance issues at its five publicly owned treat-
ment works (POTWs) and three public water systems serving nearly 170,000
people. The United States and Guam Waterworks may agree to additional
conditions or a final settlement, including possible penalties, to address other
compliance issues after the initial measures are completed.
"We see the stipulated order as an important first step in the right direc-
tion," said Wayne Nastri, the EPA's Regional Administrator for the Pacific
Southwest. "It is a blueprint that maps out the path Guam must take to
safeguard the public and environment while offering high quality service to
its customers."
The order requires Guam Waterworks to:
hire properly trained professionals;
improve organizational inefficiencies;
complete a master plan and several technical assessments;
overhaul financial and operational systems;
enhance water disinfection programs;
improve the reliability of the existing infrastructure; and
begin the rebuilding process for the island's aging drinking water and
wastewater systems.
The federal District Court will retain jurisdiction to enforce the terms
of the order over the course of the next few years.
"This is a very important case," said Frederick Black, U.S. Attorney
for the District of Guam. "To protect public health, we must ensure that
Guam Waterworks is moving quickly towards compliance with the Safe Drink-
ing Water Act and the Clean Water Act."
sistance efforts include: conducting site
visits and sanitary surveys at PWSs
(i.e., a review of the site's water
sources, facilities, equipment, opera-
tions, and maintenance to evaluate
their adequacy to produce and distrib-
ute safe drinking water); helping sys-
tems invest in preventive measures;
providing financial assistance for sys-
tem improvements through the Drink-
ing Water State Revolving Fund and
other state funding programs; review-
ing water system plans and specifica-
tions; conducting training sessions;
holding public information meetings;
lending specialized monitoring equip-
ment; and publishing informational bul-
letins and newsletters regarding train-
ing events and other educational op-
portunities. For more information on
EPA's compliance assistance activi-
ties in this area, visit http://
www.epa.gov/compliance.
Informal Enforcement Actions:
When a drinking water violation is de-
tected, either EPA or the state will
respond. For less serious violations,
first response is often an informal ac-
tion such as a reminder letter, warn-
ing letter, notice of violation, field visit,
or telephone call.
Formal Enforcement Actions: If
a violation is more serious, or it con-
tinues or recurs, EPA or the state ini-
tiate a formal enforcement response
that requires the violating public wa-
ter system to return to compliance.
Sometimes, formal enforcement may
be the best first tool to use to address
noncompliance due to public health im-
plications. Formal enforcement re-
sponses include administrative orders
with or without penalties, civil refer-
rals to state attorneys general or to
the Department of Justice, and other
sanctions such as denying permission
for system expansion, filing criminal
June 2003
-------
Enforcement Alert
charges, and imminent and substan-
tial endangerment orders.
The Alisal case is just one ex-
ample of a formal enforcement ac-
tion taken by EPA, the Department
of Justice, and states to ensure that
clean, safe drinking water is available
to every person in this nation. In 2000,
EPA and the states initiated nearly
3,200 formal enforcement actions
against public water systems for fail-
ure to comply with the SDWA, the
National Primary Drinking Water
Regulations, or their state equiva-
lents. Recent civil judicial enforce-
ment actions have been taken by
EPA against public water systems
serving large cities include New York
and Phoenix.
Imminent and Substantial
Endangerment Orders
One of the most important and ef-
fective drinking water enforcement
Ensuring compliance with
the "microbial rules" is a
national priority for EPA's
compliance and enforce-
ment programs.
tools available to EPA is the
authority available under Sec-
tion 1431 of the SDWA. Un-
der this authority, the United
States can issue administra-
tive orders or pursue civil ju-
dicial actions to address po-
tential or actual threats of im-
minent and substantial endan-
germent to public health
caused by contamination of
public water systems or un-
derground sources of drink-
ing water.
Section 1431 authority
may be used whether or not
EPA has promulgated a Na-
tional Primary Drinking Wa-
ter Regulation and an MCL for the
particular contaminants causing or po-
tentially causing the imminent and sub-
stantial endangerment, and whether or
not the defendant has violated any ap-
plicable regulation. The Agency has
used SDWA Section 1431 enforce-
ment authority to address contamina-
tion by microbiological contaminants
with acute health effects, other chemi-
cal contaminants with near-term health
effects, and cancer-causing chemical
contaminants with longer-term health
effects. In recent years, this authority
has been used to address a variety of
contaminant discharges (microbiologi-
cal contaminants, nitrates, etc.) affect-
ing surface water or groundwater. The
Agency has issued over 200 Section
1431 enforcement actions since the
enactment of the SDWA in 1974, in-
cluding the aforementioned Guam ac-
tion.
For additional information
regarding the concluded portions of
the Alisal case, contact Jon Merkle,
EPA Region 9, at (415) 972-3550.
For further information regarding
EPA's drinking water enforcement
program, including SDWA Section
1431 activity, please contact
Andrew Hudock, Office of
Regulatory Enforcement's Water
Enforcement Division, at (202) 564-
6032.
Office of Regulatory Enforcement
Office of Enforcement and Compliance
Assurance, U.S. Environmental Protection
Agency, Washington, D.C.
Useful Compliance
Assistance Resources
Office of Enforcement and
Compliance Assurance:
http://www.epa.gov/compliance
Safe Drinking Water Hotline:
1-800-426-4791
Envirofacts:
http://www.epa.gov/enviro
Safe Drinking Water Act:
http://www.epa.gov/compliance/civil/
federal/sdwa.html
Office of Water:
http://www.epa.gov/safewater
Coliform Rule:
http://www.epa.gov/safewater/
source/tcrquickrefguidevl O.pdf
National Compliance Assistance
Clearinghouse:
http://www.epa.gov/clearinghouse
Compliance Assistance Centers:
http://www.assistancecenters.net
Small Business Gateway:
http://www.epa.gov/smallbusiness
EPA's Audit Policy:
http://oecaftp.sdc-moses.com/
compliance/incentives/auditing/
auditpolicy.html
June 2003
-------
6ERA
United States
Environmental Protection Agency
Office of Regulatory Enforcement
(2241 A)
Washington, D.C. 20460
Official Business
Penalty for Private Use $300
'Enforcement Alert' newsletter
F Recycled/Recyclable. Printed with Soy/Canola Ink on paper that contains at least 30% recycled fiber
------- |