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
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
“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
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
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.”
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
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
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
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