As it isn't your fault I would lawyer up IF the cost will be recouped, if not, I don't see a good reason to unless you just want to make a point and have expendable money. Water in fuel isn't a new thing and sucks but shouldn't do that to you engine. I only really fill up at 1 place (a Shell near my house) so if anything happens I can track down where the problem came from fairly easily. Even with that said though it will probably be an uphill battle for you, just depends on how much you really want to interrupt your life over a $3700 bill. You shouldn't have to pay it absolutely, but what will the other costs be of pursuing this?