To regain its image, large

expenses and relief from federal waterquality

regulations, the Town of Pinedale

filed a civil complaint June 30 against former

water-quality lab Zedi US Inc., claiming

“professional negligence” led to inaccurate,

expensive and negative results when its 2018

tests seemed to show Fremont Lake raw

water was tainted.

The complaint was filed in 9th District

Court and assigned to Judge Marv Tyler –

and as of Aug. 26, nothing else was filed to

further the case.

However, following a closed executive

session during the Aug. 24 Pinedale Town

Council meeting, a motion was approved

to accept the settlement agreement with

Banded Iron, Zedi for $175,000.

“I think it’s been the town’s position that

there have been errors in the lab tests that

triggered the actions by the EPA and the

Fremont Lake Study,” Mayor Matt Murdock

said following the meeting. “The purpose of

the lawsuit was to recoup some of the costs

and repay the town.”

The settlement agreement was not filed

in the court but should be completed in

September when it will be made available to

the public, Murdock said.

Following a review by the town’s legal

counsel, Murdock released a statement.

“After the completion of the Fremont Lake

Watershed Study, the Town of Pinedale was

firmly convinced that Zedi Labs had made

an error in its initial sampling in 2018, which

led to the erroneous report that there were

fecal coliforms in Fremont Lake which led to

the EPA ruling and significant expenditures

by the Town,” the statement said.

“Based upon that conviction, the Town

filed suit against Zedi and the companies

who purchased its assets. Prior to filing any

lawsuit, the Town attempted to settle with

Zedi, which took the position there was no

negligence or liability on its part and refused

to offer any settlement,” the statement said.

The sale of the company posed additional

problems for recouping any losses.

“It was discovered that Zedi (which had

been acquired by a company named Banded

Iron) no longer has a United States company

or United States assets and the company

(which is in Canada) was being dissolved.

It was also discovered that the company’s

insurance policy (that was in effect at the

time) did not cover water testing – only oil

and gas,” the statement said.

“After review of the formal lawsuit that

was filed, but without acknowledging any

fault or liability, Zedi made an ultimate

settlement offer of $175,000. This offer was

accepted by the Town. It is expected that the

money will begin to reimburse costs to the

Town and the State Land and Investment

Board (SLIB) which provided essential

emergency funding, as well as for attorney’s

fees incurred in litigating the matter,” it

states.

History

Town officials were mystified when Zedi,

located in Pinedale until October 2018,

began showing noncompliant fecal coliform

tests and the Environmental Protection

Agency demanded expensive solutions –

which Pinedale officials did their best to

address.

“The town is required by the EPA to test

its water for total coliform analysis and fecal

coliform analysis,” the complaint says, and

Fremont Lake “historically exhibited higher

levels of total coliform at the same time

each year (July-September due to higher

temperatures.)”

But even with high coliform levels in the

summer, “no fecal coliforms above EPA

requirements were observed in the previous

14 years of monitoring Fremont Lake.”

“In July, August and September 2018

(Zedi, later known as Banded Iron US Inc.

and acquired by SPL, Inc.) testing detected

noncompliant fecal coliform in the water

samples taken from the town’s raw water

intake testing site from Fremont Lake,” states

the complaint written by attorney Elizabeth

Greenwood.

The lab never isolated E. coli from the

samples, which “supports a finding that the

fecal readings are invalid as it is highly unlikely

that E. coli isolates would be absent,” it states.

Zedi’s reports “were highly probable false

positives due to the negligent testing and lab

conditions maintained by (Zedi) in 2018.”

During the summer, it says, Zedi did

not keep its waterbath “broth” at the

recommended consistent temperature of 44.6

degrees Fahrenheit, did not follow its standard

operating procedures and also left open its

doors to allow oil and gas vehicles to go in and

out and bring temperature changes, it states.

Even as town officials worked to correct the

situation and isolate the potential source, Zedi

kept reporting high fecal coliform levels in the

water samples, the complaint states.

Tests seemed to show that all of Fremont

Lake was being contaminated simultaneously

by a single source, it says.

Out of business

In October 2018, Zedi closed its lab and

referred the town to its Riverton lab, which

officials learned could not get EPA-certified

to test for fecal coliform, “reportedly having

failed at least two proficiency tests.”

It wasn’t until the town sent samples from

August and September to Zedi and another

lab – Energy Laboratories in Billings – that

Zedi’s test processes and analyses came under

the microscope, the complaint states. The town

since set up its own lab and has certified staff

for testing the town’s water samples and other

samples submitted by the public.

The town gathered water samples in late

August and September 2018 and sent some to

Zedi and some to Energy Laboratories. Some

arrived in an eight-hour window; others that

arrived late at Energy Lab’s Billings location

were not used for an official comparison, the

complaint says. Regardless, Energy Labs

detected no fecal coliforms.

Both labs were asked to do tests at the same

time and again, Zedi reported fecal coliform

while the Energy Labs’ test did not. Neither

reported E. coli counts.

“(Zedi) did not even obtain the supplies for

confirming fecal coliforms until late October

2018,” it states. When Zedi “performed its

single confirmation test in October 2018, it

came back as negative for a fecal coliform.”

Costly remedies

However, the past test results had already

“triggered EPA action against the town,”

requiring Pinedale to remediate the results

“with extremely expensive options.”

The first was installing expensive

filtration equipment on Fremont Lake with a

$16-million cost.

The second option required Pinedale to

develop another water source and disconnect

Fremont Lake’s public water system.

The third option required a watershed

study to identify fecal coliform sources at

intakes, modify and mitigate the sources and

write a description of how these measures

would mitigate the sources. The town chose

this option at a cost of nearly $400,000, the

complaint states.

The complaint asks for a six-person jury

trial to determine if the “samples had been

properly tested,” whether or not the “false

images” of Fremont Lake’s water for drinking

and recreation would have resulted.

It also asks for damages to cover costs of

duplicate testing, EPA requirements and the

impacts of the “highly probable false negative”

results to Pinedale’s reputation and that of

Fremont Lake.

Through the end of July, Pinedale Town

Clerk Maureen Rudnick said the town has

paid legal fees to Greenwood Law for more

than $10,700 to litigate the lawsuit and she

anticipated at least one more invoice.

“We’re grateful for the help and support of

SLIB and the many agencies that contributed

to our Watershed Study, and to Branded Iron/

Zedi for doing their best to make up for our

loss,” Murdock said in his statement.

– Editor Holly Dabb contributed to this

article.