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The people that approved the radio station contest are legally liable to some degree in this woman's death. Contestants may have signed a waiver that exempt the radio station from responsibility. The article isn't clear.
To say that no one is at fault because no one knows about water intoxication is just asinine.
The bottom line is the contest endangered the contestants.
And even if the station made them sign waivers to enter, then the station still would still be liable to some degree unless they could successfully prove that the risks involved with the contest were at least explained to the contestants beforehand.
But chances are there were no waivers, judging by how dangerous this contest was. In this case, the station is fully liable. It is true that the contestants should have had a lick of sense themselves, nevertheless, the station should have to pay for their ignorance. The woman who died paid for their ignorance (and her own), and now her children have no living mother.
Water intoxication stories are usually associated with hazing rituals.
Pledges are forced to drink massive amounts of water and to not use the bathroom. After staying on their feet for hours on end, many hallucinate and/or get violently ill, and sometimes, somebody dies.
However, the most famous case of water intoxication involves a British schoolgirl's birthday party in the late eighties/early nineties (feel free to look it up).
She took Ecstasy and drank a couple gallons of water. Since pure MDMA dangerously inhibits the body from sweating, her brain cavity filled up with enough water to cause it to swell and compress the spinal nerve at the base of the neck which shut down her involuntary functions like breathing.
This death prompted an investigation that made MDMA illegal in many countries, including the United States.
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