The Eshelman Company, Inc. v. Waste Water Industrial Solutions, LLC

In 2025, The Eshelman Company, an industrial parts manufacturer, contracted Waste Water Industrial Solutions to design and install a custom wastewater treatment system at its Ohio plant to meet EPA discharge limits. The system repeatedly failed performance tests, causing untreated effluent releases and $2.8 million in regulatory fines. Eshelman terminated the contract and sued for breach of contract and professional negligence, seeking $4.5 million in damages. Waste Water denied liability, blaming Eshelman's operational errors and counterclaimed for $600,000 in unpaid invoices. The case proceeded in the U.S. District Court for the Southern District of Ohio, with a bench trial held in late 2025.

On January 7, 2026, the court ruled in favor of The Eshelman Company, finding that Waste Water breached express performance warranties. The limitation of liability clause was deemed unenforceable due to gross negligence. Eshelman was awarded $3.2 million in compensatory damages and $400,000 in legal costs; the counterclaim was dismissed with prejudice.

Whether Waste Water Industrial Solutions materially breached the contract by delivering a system that failed to meet the guaranteed effluent quality standards, and whether the contract's limitation of liability clause capped recoverable damages.

The ruling drew attention to the enforcement of performance guarantees in environmental service contracts and set a notable precedent for piercing limitation-of-liability clauses when a contractor's failures lead to significant regulatory harm. It prompted wastewater equipment suppliers to revise risk allocation provisions and underscored corporate accountability under the Clean Water Act.