Located near the mouth of the Churchill River in Labrador, the community of Mud Lake is only accessible by boat in the summer or snowmobile in the winter. According to the explorer R. F. Holme (cited in the ENL), "Muddy Lake" which he visited in 1887 had been given the name a few years earlier when movement of the earth''s crust opened up a large mud spring making the water to be "opaque and foul".

Unfortunately, in May of 2017, the town was flooded and most of its residents had to be evacuated to Happy Valley-Goose Bay where they were given shelter at Canadian Forces Base Goose Bay, where some may be still living.

According to CBC News, after a couple of years of uncertainty, "a Newfoundland and Labrador Supreme Court justice [Justice Gillian Butler] has ruled that a class-action lawsuit filed against Nalcor Energy and the provincial government for damage to houses in Mud Lake, Labrador, after flooding in the Churchill River in the spring of 2017, can go ahead".

The root of the case, is who caused the flood to occur? The plaintiffs (the townsfolk of Mud River) have maintained, right from the beginning that the damage was caused by the Muskrat Falls hydroelectric project, and that Nalcor Energy, the Crown corporation in charge of the project, is at fault.

Ray Wagner, the Halifax lawyer who launched the suit, was reported as saying that "the case will now go to a common issues trial, where the liability of the province and of Nalcor Energy will be assessed". The most recent update, from Wagners Co. dated July 12, 2019 stated that "certification was granted on July 11, 2019. A notice plan to inform class members about certification and what it means will be implemented once the certification order has been issued by the court. Trial dates have not yet been set, but the parties are now in the process of preparing for a trial".