Morgan Hill mushroom grower sued over alleged toxic waste dumping

Watsonville-based Monterey Mushrooms, Inc. allegedly dumped toxic levels of ammonia into creeks in Morgan Hill, prompting a $67 million lawsuit from the Santa Clara County district attorney’s office. Watsonville-based Monterey Mushrooms, Inc. allegedly dumped toxic levels of ammonia into creeks in Morgan Hill, prompting a $67 million lawsuit from the Santa Clara County district attorney’s office. Photo: Santa Clara District Attorney’s Office Photo: Santa Clara District Attorney’s Office Image 1 of / 4 Caption Close Morgan Hill mushroom grower sued over alleged toxic waste dumping 1 / 4 Back to Gallery

South Bay prosecutors are suing a mushroom grower for $67 million after the company allegedly dumped toxic wastewater into a creek that runs to San Francisco Bay, officials said Thursday.

Monterey Mushrooms Inc. grows mushrooms in several states and is headquartered in Watsonville. Investigators with the California Department of Fish and Wildlife found that over six years, the grower’s Morgan Hill facility pumped waste contaminated with hazardous levels of ammonia into Fisher Creek, which flows into Coyote Creek, according to the Santa Clara County district attorney’s office.

Runoff from compost piles on the property made its way into Fisher Creek tributaries, according to the lawsuit.

“Generally, process water goes into a process water holding pond and gets evaporated,” said Denise Raabe, a deputy district attorney. “By getting rid of it, though, dumping it into the creeks, they’re not having to construct another pond.”

Over two days in 2017, the company allegedly pumped nearly 700,000 gallons of wastewater into Fisher Creek. Officials said the ammonia was created by the horse stable hay and poultry manure used in the mushroom-growing process.

The company said in a statement Thursday that it was “shocked” at the filing and confirmed it had been speaking with the district attorney’s office about the impact of local flooding from heavy storms in late 2016 and early 2017.

“Our Morgan Hill facility was inundated by these record storms and rainwater volume, which resulted in a record release of process water, primarily rainwater, leaving the property,” officials said. “Due to this experience, the company has collaborated with county and state agents and spent millions of dollars to install additional storage, as well as engineer the separation of storm water.”

A hearing is scheduled for Jan. 25 in Santa Clara County Superior Court.

Gwendolyn Wu is a San Francisco Chronicle staff writer. Email: gwendolyn.wu@sfchronicle.com Twitter: @gwendolynawu