Editors' Summary: Contamination of groundwater and other public water supplies caused by the migration of hazardous wastes from chemical burial sites has long been recognized as posing a significant health hazard. The recent decision by a federal district court in Sterling v. Velsicol demonstrates the importance of state tort law in fixing liability for the harm caused by such dumpsites, as the $12.7 million award to the plaintiffs would indicate. In this article, Mr. Siegel and Mr. Salvesen analyze the Velsicol decision, particularly the award of damages for plaintiffs' fear of cancer and the increased risk of cancer, and argue that such an award is a departure from traditional damage rules. The article concludes that, in part because of the latency period for the manifestation of injuries resulting from exposure to hazardous chemicals, the award for increased risk is desirable, but that a new formulation of the increased risk rule is necessary.