A legal dispute in Montana could drastically curb the government’s use of aerial fire retardant to combat wildfires after environmentalists raised concerns about waterways being polluted with the potentially toxic red slurry that’s dropped from aircraft.

A coalition that includes Paradise, California — where a 2018 blaze killed 85 people and destroyed the town — said a court ruling against the U.S. Forest Service in the case could put lives, homes, and forests at risk.

An advocacy group that’s suing the agency claims officials are flouting a federal clean water law by continuing to use retardant without taking adequate precautions to protect streams and rivers. The group, Forest Service Employees for Environmental Ethics, requested an injunction blocking officials from using aerial retardant until they get a pollution permit.

The dispute comes as wildfires across North America have grown bigger and more destructive over the past two decades as people move into fire-prone areas and overgrown forests create more catastrophic megafires that are harder to fight.

Forest Service officials acknowledged in court filings that retardant has been dropped into waterways more than 200 times over the past decade. They said it happens usually by mistake and in less than 1 percent of the thousands of drops annually.

“The only way to prevent accidental discharges of retardant to waters is to prohibit its use entirely,” government attorneys wrote. “Such a prohibition would be tantamount to a complete ban of aerial discharges of retardant.”

Government officials and firefighters say fire retardant can be crucial to slowing the advance of a blaze so firefighters can try to stop it.

“It buys you time,” a former region chief and air attack group supervisor for California’s state fire agency, Scott Upton, said. “We live in a populous state — there are people everywhere. It’s a high priority for us to be able to use the retardant, catch fires when they’re small.”

Forest Service officials said they are trying to come into compliance with the law by getting a pollution permit but that could take years.

“The Forest Service says it should be allowed to pollute, business as usual,” the head of the Eugene, Oregon-based group behind the lawsuit, Andy Stahl, said. “Our position is that business as usual is illegal.”

A ruling from a U.S. district court judge, Dana Christensen, is expected sometime after the opposing sides present their arguments during a Monday hearing in federal court at Missoula.

Judge Christensen denied a request to intervene in the case by the coalition that includes Paradise, other California communities and trade groups such as the California Forestry Association. The judge is allowing the coalition’s attorney to present brief arguments.

More than 100 million gallons of fire retardant were used during the past decade, according to the Department of Agriculture. It’s made up of water and other ingredients including fertilizers or salts that can be harmful to fish, frogs, crustaceans, and other aquatic animals.

Health risks to firefighters or other people who come into contact with fire retardant are considered low, according to a 2021 risk assessment commissioned by the Forest Service.

To keep streams from getting polluted, officials in recent years have avoided drops inside buffer zones within 300 feet of waterways.

Under a 2011 government decision, fire retardant may only be applied inside the zones, known as “avoidance areas,” when human life or public safety is threatened and retardant could help. Of 213 instances of fire retardant landing in water between 2012 and 2019, 190 were accidents, officials said.

The remaining 23 drops were necessary to save lives or property, they said.

Mr. Stahl’s organization suggested in court filings that the buffer zones be increased, to 600 feet around lakes and streams.

In January — three months after the lawsuit was filed — the Forest Service asked the Environmental Protection Agency to issue a permit allowing the service to drop retardant into water under certain conditions. The process is expected to take more than two years.