ExxonMobil Liable Over Mandated MTBE

Must pay New Hampshire $236 million for groundwater contamination despite Clean Air Act

Published in CSP Daily News

CONCORD, N.H. -- A jury found Exxon Mobil Corp. liable Tuesday in a long-running lawsuit over groundwater contamination by the gasoline additive methyl tertiary butyl ether (MTBE), and ordered the oil company to pay $236 million to New Hampshire to clean it up, reported the Associated Press.

Each side spent time during the trial bashing their opponents' expert witnesses, accusing each other of exaggeration and painting different pictures of the extent of MTBE contamination in New Hampshire's drinking water, said AP.

The jurors reached their verdicts in less than 90 minutes, after sitting through nearly three months of testimony in the longest state trial in New Hampshire history.

"We appreciate the jurors' service during this long trial, but erroneous rulings prevented them from hearing all the evidence and deprived us of a fair trial," ExxonMobil lawyer David Lender told the news agency.

Jurors found that ExxonMobil was negligent in adding MTBE to its gasoline and that it was a defective product. They also found ExxonMobil liable for failing to warn distributors and consumers of the product about its contaminating characteristics.

The jury determined that the hazards of using MTBE gasoline were not obvious to state officials, who opted into the reformulated gasoline (RFG) program in 1991 to help reduce smog in the state's four southernmost counties.

The state said more than 600 wells in New Hampshire are known to be contaminated with MTBE, and an expert witness estimated the number could exceed 5,000. Jessica Grant, representing the state, said ExxonMobil should pay $236 million to offset the state's cost to monitor and treat wells contaminated with MTBE.

Jurors had more than 400 exhibits to sift through, including internal memos and reports. Those memos included some dating back to 1984 in which ExxonMobil researchers warned against using MTBE gasoline. Grant said the oil giant ignored its own memos that raised ethical and environmental concerns about MTBE's ability to contaminate faster and further than nontreated gasoline.

Lawyers for Exxon Mobil countered that the state is seeking big bucks from a company that experienced minimal spills at its own New Hampshire sites and cleaned those years ago, said the report. They argued that Exxon Mobil used MTBE to comply with federal Clean Air Act mandates to reduce air pollution and should not be held liable for sites contaminated by unnamed third parties, such as junk yard owners and independent gas station owners.

Grant said Exxon Mobil put MTBE in gasoline five years before the government mandate in 1990 that the company use one of seven oxygenators available, including ethanol. She argued Exxon's decision to keep using MTBE--even in the face of growing evidence of environmental liabilities--was motivated by profit.

"This is a case about decisions made by the government over 40 years ago," said ExxonMobil attorney James Quinn. "The government told Exxon Mobil to get the lead out and we did. They told us to use oxygenates and we did. ... What is the case really all about? It's about hind-sighting, scapegoating, second-guessing and muddling.

In wrapping up his arguments, Exxon Mobil attorney David Lender accused the state of going to great lengths to "manufacture a huge number for this case" in terms of damages sought.

"If MTBE is really as big a problem as the state says, why is this trial the first time you're hearing about it?" he asked.

The corporation was the sole remaining defendant of the 26 the state sued in 2003. CITGO was a co-defendant when the trial began, but went into settlement negotiations with the state and ultimately settled for $16 million. That brought the total the state has collected in MTBE settlement money to $136 million.

The trial began Jan. 14; Testimony ended March 27. And although the trial is the longest in New Hampshire history, the verdict will not be the final word, AP said. Both sides have indicated they are laying the groundwork for an appeal.

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