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DEFENSE OF AGRICULTURAL CHEMICAL CONTAMINATION CASES UNDER THE EPA SAFE DRINKING WATER ACT

Presented on November 12, 1993 at the 1993 National Conference of the American Agricultural Law Association

by Thomas A. Packer, Partner, Gordon & Rees, LLP

Litigation arising from use of agricultural chemicals in pesticides and fertilizers is becoming a more frequently encountered aspect of toxic tort litigation. Agricultural chemicals have been subject to a dramatic increase in regulation over the past two decades. At the same time, there has been an increase in the number and strictness of regulations relating to drinking water standards. Scientific and technological advances have also increased the ability to detect traces of chemicals in water in more minute amounts than ever before. These factors have converged to the point where pesticides and fertilizer residues are now being detected in drinking water sources at levels which exceed recently enacted regulatory standards. Consequently, the operators of water delivery systems are increasingly turning to the agricultural chemical industry for compensation for the costs of remediating such situations.

Most significantly, the Environmental Protection Agency pursuant to 1986 amendments to the Safe Drinking Water Act has recently promulgated final regulations establishing maximum contaminant levels for organic and inorganic chemicals. State governments have also adopted these maximum contaminant levels and have sought to enforce them against municipalities and other water providers. Consequently, these water providers are now suing manufacturers and distributors of agricultural chemicals found in drinking water for compensation to remediate situations in which certain chemicals are found in excess of government mandated maximum contaminant levels. The defense of such cases requires counsel to be knowledgeable regarding the applicable governmental regulations, the agricultural chemical industry, pesticide application practices, scientific and technical issues concerning the chemical at issue, the communities and water delivery systems themselves, as well as being able to engage in a defense which may involve numerous co-defendants.

Four federal statutes authorize EPA regulation of pesticides and fertilizers in groundwater: The Federal Water Pollution Control (Clean Water) Act, 33 U.S.C. §§ 1251-1387, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §§ 9601-9675, the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), 7 U.S.C. §§ 136 et seq., and the Safe Drinking Water Act (SDWA) 42 U.S.C. §§ 300f et seq. EPA has used these statutes in part to develop a regulatory program to control contamination of groundwater. This outline will deal primarily with the maximum contaminant levels set forth to implement provisions of the Safe Drinking Water Act and will also address the applicability of FIFRA as a defense to claims for costs of remediation brought by water suppliers. Although EPA uses provisions of the Clean Water Act for regulating waste discharges into water, as a practical matter it is not used as regulatory authority for pesticide contamination of groundwater because Congress exempted agricultural run-off from the Clean Water Act's regulatory program. Agricultural run-off has been defined as a "non-point source," a class of contamination not subject to the Clean Water Act's permitting requirements. The Clean Water Act does require states to develop water quality management plans to identify and control non-point source pollution, but does not require EPA to promulgate any regulations under the program.

CERCLA establishes a structure for federal response to sites contaminated through past improper disposal of hazardous wastes. Although EPA could use CERCLA authority to clean up groundwater contaminated through the normal use of pesticides, it has chosen to exclude such sites from CERCLA programs. Apparently EPA has decided that because the number of sites contaminated by pesticides is potentially very large and may impose a disproportionate financial demand, FIFRA is the most appropriate statute for controlling the source of contamination resulting from the registered use of pesticides. Congress has also prohibited recovering cleanup costs for pesticide site cleanups.

While FIFRA provides the central regulatory authority for EPA's pesticide strategy, it only allows EPA to regulate the manufacturing, marketing and labeling of pesticides through its pesticide registration program and does not mandate cleanup of specific sites. FIFRA is essentially a preventive regulation which empowers EPA to register a pesticide only if its use as authorized will not cause "unreasonable adverse effects" to man or to the environment. 7 U.S.C. §§ 136a(c)(5), 136(bb) (1980). See also discussion of FIFRA and other relevant issues in Johnson and Ware, Pesticide Litigation Manual (1993).

The Safe Drinking Water Act of 1988 has resulted in EPA setting national primary and secondary drinking water standards and initiating regulations to prevent the harmful contamination of public water systems. EPA promulgated regulations which set forth maximum contaminant level goals (MCLGs). MCLGs are non-enforceable goals that are to be set "at the level at which no known or anticipated adverse effects on the health of persons occur, and which allow(s) an adequate margin of safety." 42 U.S.C. § 300g-l(b)(4) (1988). EPA also set forth enforceable maximum contaminant levels (MCLs) that set the maximum permissible levels of contaminants of water delivered to any user of a public water system. Id. at § 300f(3). In January 1991, EPA issued its final National Primary Drinking Water Regulations - Synthetic Organic Chemicals and Inorganic Chemicals; Monitoring for Unregulated Contaminants; National Primary Drinking Water Regulations Implementation; National Secondary Drinking Water Regulations; 56 Fed. Reg. 3,526 (1991), (codified at 40 C.F.R. parts 141-143 (1992)). The effective date of this regulation was July 30, 1992. These regulations survived several legal challenges as reported in International Fabricare Institute v. U.S. Environmental Protection Agency, (D.C. Cir. 1992) 972 F.2d 384.

The regulations apply to each public water system unless: 1) it consists only of distribution and storage facilities and does not have any collection and treatment facilities, 2) obtains all of its water from, but it not owned or operated by, a public water system to which such regulations apply, 3) does not sell water to any person and, 4) is not a carrier which conveys passengers in interstate commerce. 40 C.F.R. § 141.3 (1992). A public water system is defined as a, system for the provision to the public of piped water for human consumption, if such system has at least fifteen service connections or regularly serves an average of at least 25 individuals daily at least 60 days out of the year." 40 C.F.R. § 141.2 (1992).

EPA has empowered the State in which the water system is located with primary enforcement responsibility along with requiring that the State must have adopted drinking water regulations which are no less stringent than the national primary drinking water regulations and has adopted and is implementing adequate procedures for the enforcement of such State regulations. 40 C.F.R. § 142.10 (1992).

A variance or temporary exemption (of up to three years) from these regulations may be granted by the State. 40 C.F.R. §§ 142.20-142.56 (1992). Consequently, claims for remediation of any presence of agricultural chemicals in drinking water exceeding the promulgated MCLs may not arise until the water provider is forced by the State to remediate. Enforcement mechanisms may differ from state to state. As an example, the California Department of Health Service, pursuant to California's Safe Drinking Water Act, may issue citations, assess civil monetary penalties, petition a court for appointment of a receiver of the water district, seek a court order directing compliance with maximum contaminant levels or may suspend or revoke an operating permit. California Health & Safety Code §§ 4031-4039.6.

The regulations set forth maximum contaminant levels for 17 inorganic and organic contaminants which are described as either pesticides or ingredients in pesticide products or fertilizers. 56 Fed. Reg. 3528, table 3 (1991). These identified contaminants are as follows:

Additional maximum contaminant levels were promulgated by EPA in 1992, with effective dates of January 17, 1994 and a compliance period of 1993-1995 for those water systems with 150 or more service connections. 57 Fed. Reg. 31776 (1992). The agricultural chemicals included in this most recent EPA regulation include:

Applicable federal statutes generally do not provide a private cause of action for the benefit of plaintiffs in private litigation. Consequently, the claims and defenses will usually involve traditional common law theories, with the major exception of the preemption defense to be asserted under FIFRA.

Defendants will inevitably face a cause of action for strict liability. The elements of the cause of action vary from state to state and the standards set out in the Restatement 2d of Torts, § 402A, that a product is actionable if it is "in a defective condition unreasonably dangerous," is a well-known general standard. Plaintiffs' attorneys primarily rely on a failure to warn cause of action instead of a manufacturing defect or design defect as a basis for liability. A manufacturing defect can be discovered, or an allegation refuted, by investigating the pesticide's formulation. Most pesticides have lot or batch numbers on them which can be traced to retained product samples. Packaging and conditions during distribution are also possible sources of the occurrence of a defect.

Most strict liability actions involve allegations of failure to warn of a substantial danger, failure of the product to perform as safely as an ordinary consumer would expect, failure to adequately test the product and an allegation that the risks of the product outweigh any benefits. In addition to existing common law defenses, a statutory defense to strict liability causes of action includes preemption under FIFRA.

While the issue of preemption of failure to warn and design defect claims under FIFRA could be the subject of an entire article, it will briefly be addressed here. The defense attorney will want to raise at the earliest stage in the case, and most likely by way of attacking plaintiff's initial pleadings, that any pesticide at issue was regulated and registered by the federal government. It should be argued that all pesticides are toxic and in order to determine the right dose for pesticide application and that the benefits of the pesticide use outweigh the environmental impact, EPA or other agencies such as the United States Department of Agriculture, in accordance with their pervasive regulation of the registration and labeling of pesticides, conducted an independent and critical review of all available data bearing on the safety of all registered pesticides.

Originally enacted in 1947, FIFRA was designed primarily as a licensing and labeling statute, but in 1972 Congress enacted the Federal Environmental Pesticide and Control Act, a detailed revision of FIFRA that created a comprehensive regulatory statute. FIFRA directs the federal government, through EPA, to regulate the manufacturing, marketing and labeling of all pesticides in the United States. 7 U.S.C. 136, et seq. Under FIFRA, EPA has the exclusive authority to regulate the content of a pesticide label which ordinarily includes toxicity warnings, application and use instructions and precautionary instructions. 40 C.F.R. 156.10 (1990). EPA is charged with the responsibility of determining that a pesticide label contains warnings adequate to protect health and the manufacturer must accompany its pesticide product with the EPA-approved label and is forbidden from adding to or altering the label. 7 U.S.C. §§ 136(q), 136(a), 136a(c)(5)(B), 136j(a)(2)(A). See also, 40 C.F.R. 152.112(f) (1990).

FIFRA provides that any State may regulate the sale or use of any federally registered pesticide or device in the State but only if and to the extent the regulation does not permit the sale or use prohibited and that the State shall not impose or continue in effect any requirements for labeling or packaging in addition to or different from those required under FIFRA. 7 U.S.C. § 136v (1980). Consequently, defense counsel must argue that FIFRA expressly preempts State common law tort claims based on labeling or failure to warn. Particularly relevant defense-oriented decisions include Levesque v. Miles. Inc. (D.N.H. 1993) 816 F.Supp. 61; Cipollone v. Liggett Group. Inc. (1992) 112 S.Ct. 2608; Arkansas-Platte & Gulf Partnership v. Van Waters, Inc. (10th Cir. 1993) 981 F.2d 1177 and Pappas v. The Upjohn Company (11th Cir. 1993) 985 F.2d 516.

Defense counsel need to be alert to the possibility that even if preemption is found, that it may not be allowed for claims predicated on pre-October 21, 1972 labeling. See, Gibson v. Dow Chemical Company 1992 WL 404681, (E.D.Ky.). Since many pesticides were applied prior to 1972 there may be allegations that as they are still being found in groundwater they failed to degrade, and this could become an issue impeding a full preemption defense to strict liability claims.

Despite FIFRA preemption, other related claims may be brought such as allegations that EPA was provided improper or inadequate data when it approved the labels, improper formulation or claims that any sale of a particular pesticide was in itself negligent regardless of warning because less hazardous alternatives were available. However, these claims are more difficult and expensive to prove and are less appealing than the more straightforward inadequate warning claims. Additionally, since the states are given authority to regulate the "sale" or "use" of pesticides, this may prohibit preemption of design defect claims other than failure to warn. 7 U.S.C. §§ 136v(a) and (b) (1980). FIFRA will also not be able to be used as a defense if chemical contamination from fertilizers is alleged, unless a pesticide was a component of a fertilizer mixture.

Plaintiffs may also allege that defendants had a duty to market the pesticide without contaminating groundwater supplies and exceeding primary drinking water standards. There may also be allegations that the pesticide was negligently handled, applied and disposed of. Defense counsel must be diligent in becoming familiar with all applicable federal, state and local regulations which apply to the handling of pesticides.

These would include regulations prescribing certain methods of disposing of pesticide containers and residues. Counsel must also ascertain whether there could possibly be any violation of any restriction or ban of the pesticide. For example, if a defendant sold or used a banned pesticide, then it could be subject not only to possible criminal penalties but plaintiffs may argue that these actions constitute negligence per se. The defendant would also be at risk of having punitive damages alleged in such a situation and consequently serious investigation is warranted.

A defendant manufacturer's duty to warn may be limited by Comment n to section 388 of the Restatement Second of Torts which sets forth the "learned intermediary defense" which generally has been described as standing for the proposition that there is no need to give a warning to one in a particular trade or profession against a danger generally known to that trade or profession or to a purchaser who is well aware of the inherent dangers of the product.

In analyzing whether this defense is appropriate, the courts will generally look at: (1) the dangerous condition of the product, (2) the purpose for which the product is used, (3) the form of any warnings given, (4) the reliability of the third party as a conduit of the necessary information about the product, (5) the magnitude of the risk involved and (6) the burdens imposed on the supplier by requiring that he directly warn all users. See, Adams v. Union Carbide (6th Cir. 1983) 737 F.2d 1453 cert. denied, 469 U.S. 1062 (1984). However, this defense may have limited applicability in groundwater contamination cases since the plaintiffs are either water suppliers or customers of drinking water and ordinarily not users of the pesticide. In any event, the most likely scenario is that the defendants will either be denying that they had knowledge that their product was entering the groundwater or that it was known that it could do so.

Another defense may be put forth by manufacturers if the pesticide has been reformulated and the manufacturer has discharged its duty by warning its formulation purchaser of dangers associated with the use of the product. See, Groll v. Shell Oil Company (1983) 148 Cal.App.3d 444. The pesticide industry lends itself to the use of this defense by manufacturers since there are many more formulators compared with producers of pesticides.

Defense counsel should also consider putting on a state-of-the-art defense. This defense is generally deemed available when the theory of liability is negligent failure to warn or negligent design. State of the art has been defined as that level of scientific and technical knowledge pertinent to the product which existed at the time it was designed and manufactured. It has been found to be a relevant consideration in evaluating the factors to be weighed in a risk-benefit analysis. See, Vermulen v. Superior Court (1988) 204 Cal.App.3d 1192; Anderson v. Owens-Corning Fiberglas Corp (1991) 53 Cal.3d 987; Groll v. Shell Oil Company, supra, 148 Cal.App.3d 444.

A statute of limitations defense must also be considered in every case for all causes of action. This will inevitably depend upon the particular state's statute of limitations for various causes of action. An interesting issue in the context of actions based on the federal or state maximum contaminant levels is that while a water provider may realize that the pesticide was present in its drinking water, it may not have been deemed to be harmful according to statute or regulation and consequently no action was required to remediate the presence of the pesticide until the new, lower, maximum contaminant levels were recently enacted. The statute of limitations might also be affected by any temporary variances or compliance extensions granted by state authorities to water providers.

The plaintiff may allege that use of a pesticide constituted an ultrahazardous activity since the pesticide migrated through soil, contaminated well water and presents substantial health risks. While it is important to remember that water rights may vary significantly from state to state, in such a situation most states generally have a rule that the plaintiff must allege unlawful interference with a possessory right in real property. Also, depending on a particular state's statutes, such a cause of action may be filed at periodic intervals in order to comply with the applicable statute of limitations.

A plaintiff may rely on Restatement Second, Torts, section 849 which provides that conduct which affects the quality or quantity of water may constitute a trespass. This section of the Restatement states that whether a tort is committed in such a situation is treated in other chapters of the Restatement. However, a review of the Restatement reveals that there are no other provisions for trespass as to groundwater.

A defense to these causes of action must be put forward that there is no wrongful diversion or appropriation of water because minute amounts of the pesticide are discovered to be present. It must also be argued that the water provider does not own the water but rather only has a right to its use. Most trespass causes of action also contain an element of intent and defendants should argue that there was no intent for their pesticide to enter the groundwater and in any event defendants were not owners of the pesticide when it entered the groundwater, rather, usually the user (grower) had title passed to him by that time. See, City of Bloomington, Inc v. Westinghouse Elec. Corp. (7th Cir. 1989) 891 F.2d 611, 615; City of Manchester v. National Gypsum Co. (D.R.I. 1986) 637 F.Supp. 646.

Although liability for trespass may be imposed if the trespass is a result of ultrahazardous activity, ultrahazardous activity necessarily involves risk of serious harm to person, land or chattels of others which cannot be eliminated by exercise of the utmost care and which also is not a matter of common usage. See, Smith v. Lockheed Propulsion Company (1987) 247 Cal.App.2d 774. The defense must argue that the use of the pesticide was common usage and thus was not an ultrahazardous activity.

Plaintiffs may also allege that they are property owners adversely affected by the nuisance of contamination of their groundwater by a pesticide, thus constituting a private nuisance. However, plaintiffs must prove unlawful interference with the private use and enjoyment of their real property.

Defense counsel in this situation must argue that water is public, not private, and the plaintiff does not own the water. While a state may have a parens patriae interest so that it can assert a private nuisance theory based on a proprietary interest, a municipality or water company may not. In other words, the right to safe drinking water is a public right, not a private right, and belongs to the water customers. This distinction is significant, since while a city must generally abate a public nuisance, it may only be able to recover costs if statutory authority exists. See, Torrance Redevelopment Agency v. Solvent Coating Company (C.D. Calif. 1991) 763 F.Supp. 1060, 1065.

The water provider may argue that since it is liable for penalties to the appropriate state authority for not complying with a state's directive to provide water with no pesticides above the maximum contaminant levels established by EPA and since the water provider may have already expended money for remedial work, it may argue that it is entitled to indemnity based on principles of implied equitable indemnity. However, the defense should argue that there is no equitable indemnity because equitable indemnity only arises in a situation where there is injury to a third party for which the plaintiff may be held liable and it must also be a situation where the plaintiff is jointly and severally liable to a third party. However, in at least one California case, Carrier Corporation v. Detrex Corporation (1992) 4 Cal.App.4th 1522, the court found an indemnity cause of action appropriate because the state had issued a clean up and abatement order under a statute regulating the discharge of waste into state waters.

The plaintiff water provider may also allege that since it has spent money in an attempt to abate the contamination, it is entitled to compensation under equitable principles of restitution. However, a plaintiff must show a taking of property by defendants or actual unjust enrichment for restitution to apply. Defendants should argue that a fundamental function and prime duty of a municipality is to preserve the health and safety of its residents and it cannot recover damages for abating a public nuisance without express statutory authority. Courts have held that restitution is not available as a cause of action in toxic cleanup cases. See, Board of Education of City of Chicago v. A.C & S, Inc. (1989) 131 Ill.2d 428, 546 N.E.2d 580. See also, County of San Luis Obispo v. Abalone Alliance (1986) 178 Cal.App.3d 848, 860.

Plaintiffs may also allege that since its wells are the sole source of drinking water and its rate structures for providing water recover the costs of delivering the water and achieve a reasonable rate of return on capital investment in the water system, there is a binding contractual relationship between the water provider and its customers which has provided them with revenues over a substantial period of time. Consequently, the plaintiff water provider may allege that abatement programs will increase the costs of water to its customers and thus its prospective economic advantage has been interfered with by defendants.

The defense must argue that to the extent this cause of action alleges intentional interference with prospective economic advantage that there is a lack of intent. See, Rest.2d, Torts § 766B; Seaman's Direct Buying Service v. Standard Oil Co. (1984) 36 Cal.3d 752. To the extent such a cause of action is based on allegations of negligence, the defense must argue that such damage was not foreseeable. See, Ales-Peratis Foods. Int'l. v. American Can Co. (1985) 164 Cal.App.3d 277.

The plaintiff may also seek a declaration from the court that the defendants are liable for any future damages arising out of groundwater. The defense must argue that such liability is too speculative as to future circumstances and that equitable relief may not be granted where the law affords a remedy such as damages and the legal remedy may be regarded as complete and adequate, as damages would be. See, Jaffe v. Huxley Architecture (1988) 200 Cal.App.3d 1188, 1192-1193.

Plaintiffs may claim fear of developing cancer and other diseases which may be associated with exposure to the particular agricultural chemical involved. Such claims have been used more frequently due to a lack of genuine present injury either due to the nonexistence of such injury or a possible long latency period associated with exposure. Generally there must be some evidence of causal relation to a defendant's negligence and a showing that the fear claimed is itself reasonable. See, Hagerty v. L&L Marine Services. Inc. (1986 5th Cir.) 788 F.2d 315; Heider v. Employers Mutual Liability Insurance Company of Wisconsin (La.Ct.App. 1970) 231 So.2d 438.

Plaintiffs may also allege an actual increased risk of future injury by way of developing a particular disease or condition. Most courts require that before plaintiffs may recover, plaintiffs must show to reasonable degree of medical certainty that they were more likely than not to develop the disease as a result of established exposure. See, Stead v. F.E. Meyers Co., Div. of McNeil Corp., 785 F.Supp. 56 (D.Vt. 1990); Sterling v. Velsicol Chemical Corp., 855 F.2d 1188 (6th Cir. 1988).

Cases brought pursuant to violation of maximum contaminant levels relating to the primary drinking water standards are most likely to be brought by the water providers themselves. Consequently, there is substantial doubt as to whether fear of cancer or fear of increased risk of disease claims may be brought due to lack of standing and the fact that the provider's action is in essence a claim for economic damage to its ability to sell water.

Plaintiffs exposed to agricultural chemicals are increasingly seeking recovery of costs for medical monitoring or medical surveillance. Whether sought as an element of damages or an independent cause of action, the premise for such recovery is the same, that is, early diagnosis and treatment of a disease for which plaintiffs claim will result in a benefit or improved outcome. Defense counsel should take the position that the law does not allow recovery for future medical costs absent or present physical injury. See, Ball v. Joy Technologies, Inc. (4th Cir. 1991) 58 F.2d 36. For significant analyses of this issue in opinions which may no longer be cited, see Abuan v. General Electric Co. (1993) WL 321868 (9th Cir. Guam). See also, Potter v. Firestone Tire & Rubber Co. (1990) 225 Cal.App.3d 213, review granted 9 Cal.App.4th 881 (1990), and Miranda v. Shell Oil (1992) 5 Cal.App.4th 878, review granted, 93 C.D.O.S. 1971 (1993).

Whether a water provider may pursue such a claim is an open question. It is conceivable that such a plaintiff may claim as part of its damages the cost of medical monitoring for its customers to ensure that it is providing safe water, however, since the consumers of the water are not plaintiffs themselves defense counsel should test this theory at an early stage in the pleadings by way of arguing a lack of standing.

The following are some practice issues involving the defense of drinking water pesticide contamination cases. The strategy of the defense will depend upon the scope of the case and an individual defendant's potential exposure. A likely scenario would involve a plaintiff versus manufacturers of the involved pesticides and the formulators, distributors and applicators. Groups of cases may be coordinated or consolidated if they involve similar pesticides and are in the same general area. While class actions have been attempted, certification is a problem for plaintiffs due to not only the conjectural nature of injury but also the individual circumstances presented on liability and damages issues. While some of the following advice is applicable to handling any complex litigation matter, and the practical aspects of handling complex litigation could be the subject of a separate presentation, the following addresses some aspects of likely defense issues to arise in the defense of these cases. Different tactics and strategies will likely be used depending upon the status of the defendant, that is, whether it is a manufacturer or distributor. However, the following general practice tips should be applicable to all defendants.

An early meeting with the client is essential. One person should be selected to lead the investigation on behalf of the company and deal with employees on a basis protected by the attorney-client privilege so that preliminary and incomplete results of investigations are protected from disclosure. Since groundwater contamination litigation may involve allegations that pesticides were applied in an the area many years ago and are still being detected in groundwater, efforts should also be made to locate former employees. The former employees should be advised that plaintiff's counsel may attempt to contact them in order to obtain statements and the employees should additionally be requested to refer any inquiries to defense counsel. Additionally, the employee should be made aware that he is entitled to representation for purposes of handling such inquiries or being deposed and that the former employees should also refrain from discussing the litigation with other company employees. The employee should additionally be asked if he has kept any documents relating to his involvement with the pesticide since some employees, particularly chemical salesmen, keep customer lists or labels.

The client should also start gathering relevant records in order to respond to the inevitable document requests. These records may also reveal potential cross-defendants or third-party defendants. Proposed revisions to the Federal Rules of civil Procedure may also require disclosure of relevant documents at the outset of the proceedings and thus this process should begin as soon as possible. See, Civil Justice Reform Act of 1990 28 U.S.C. §§ 471-482 (1990).

As in any litigation of this type, a consultant/expert witness should be retained for scientific knowledge as well as to testify as to a particular client's involvement in the case. Although joint experts may be later retained, it is advisable to have one particular expert who can testify on behalf of the client and who can act as a resource for defense counsel.

In actions involving several defendants, a defense group should be formed. The defense group offers advantages in reducing litigation costs and also in sharing expertise. A joint defense group agreement should be drafted to preserve confidentiality of the group's activities. See, Raytheon Co. v. Superior Court (1989) 208 Cal.App.3d 683. The joint defense group should establish a document repository for not only documents produced in the litigation but also documents obtained through investigation and research. optimally, the documents should be entered into a data base by optical scanner with word search abilities for easy retrieval.

The defense group should also retain joint experts as to common issues, for example, involving hydrology, toxicology, causation and levels of chemicals in the groundwater. Retention of experts to ascertain the costs of remediation and other damages claims by plaintiff should also be retained. The defense group should also consider jointly retaining an investigator to interview potential witnesses.

A Freedom of Information Act request should be made to EPA or other appropriate governmental agencies in order to discover what documents such agencies have pertaining to counsel's client. See, 5 U.S.C. § 552, et seq. Defense counsel should assume that the plaintiff will make a similar request so it should be determined what documents an agency has, especially before depositions of defendants commence. Defense counsel should also remember that a Freedom of Information Act request can include an inquiry that the agency provide the names of anyone else who has requested similar information. This way defense counsel will be alerted as to whether any other parties have requested the same information.

Tenders of the plaintiff's complaint should be made to all insurers and brokers. Coverage on these types of cases will obviously depend upon the policies themselves, but every effort should be made to notify all carriers as soon as possible.

Manufacturing defendants will inevitably start receiving tenders from the "downstream" defendants in the case. The response of the tenders will obviously depend upon the manufacturers' potential liability in the case vis-a-vis its downstream customers. The manufacturers' responses should be guided by its own assessment of liability exposure and evidence concerning causation, as well as the aggressiveness of the tenderers. Generally, a coordinated defense is preferable to infighting among the defendants. Consequently, manufacturers should attempt to work out tender agreements as soon as possible. The advantage of working out such agreements is that they save costs, avoid the defendants aggressively pursuing cross-complaints and assessing blame as to each other, which usually results in only a benefit to the plaintiff, and also gives the manufacturer control over the defense at an early stage. This is a particularly important advantage since acceptance of the tender will result in the manufacturer's counsel representing the tendering defendants and representing the employees of those defendants at deposition and responding to discovery requests. Early control by manufacturers will help in avoiding the customer "pointing the finger" at the manufacturer and instead promote a common defense theme.

However, the manufacturing defendant will also want to attempt to retain appropriate exclusions in any tender acceptance such as not agreeing to indemnify for punitive damages assessed against a tendering defendant or possibly excluding violations of statutes, misuse or intentional acts. Manufacturers may also attempt to ask for a payment from the tendering parties in return for accepting the tender. obviously, all this is negotiable and the manufacturing defendant must weigh the risk of defending cross-claims and its liability for attorney's fees of the tendering parties against the benefits of accepting the tenders as outlined above.

The most important tactical consideration for a distributor defendant is to keep its goals in mind. This means that the defense counsel for a distributor defendant must realize that the initial goal should not be to "win" the case in the classic sense of ultimately prevailing with a defense verdict. Rather, it must realistically try to have its tender accepted with as few conditions as possible, and as early as possible, or to either be dismissed from the case or settle with the plaintiff since any money paid results in a complete release as opposed to a tender acceptance with conditions. Other than states with a "pass through" defense to the ultimate manufacturer, distributors may be held strictly liable solely because they are in the chain of commerce, although a distributor should theoretically prevail on a cross-complaint against the manufacturers assuming that there is no independent basis for liability. However, a great deal of time and attorney's fees may be spent in a court ordered dismissal or a total indemnification award on a cross-complaint and the distributor defendants should do everything possible as early as possible to have their tenders accepted or otherwise resolve the matter.

The distributor defendant should also file cross-complaints as soon as possible in order to show their seriousness in pursuing their tenders. It is recommended that the cross-complaints be only against the parties to whom tenders are made since cross-complaints against other defendants of the same class, that is, distributor defendants, or even other "downstream" defendants who have no independent basis for liability, are ultimately counterproductive. The focus of the distributor defendants should be towards the upstream defendants who are responsible for the design and production of the pesticide which allegedly resulted in its presence in groundwater in harmful or excessive levels.

Lastly, distributor defendants should also consider forming a separate defense group of non-manufacturers. This defense group would promote the interests of the non-manufacturing defendants and also provide negotiating leverage with respect to the manufacturing defendants.