Exxon Groundwater Contamination Lawsuit Results in $105M Verdict

A federal jury in New York returned a $104.7 million verdict on Monday against Exxon Mobile in a groundwater contamination lawsuit brought by New York City over the use of the gasoline additive methyl tertiary butyl ether (MTBE).

The verdict follows an 11-week trial in the U.S. District Court for the Southern District of New York. The amount is $150 million shy of what the city sought in the lawsuit, which was brought in 2004 against Exxon for contamination of drinking water in five wells in the borough of Queens.

The wells were allegedly contaminated with the gasoline additive MTBE, an oxygenate used to make gasoline burn cleaner and reduce the release of pollutants. The use of MTBE is restricted or banned in 25 states due to its propensity to leak from underground storage tanks (USTs) used by gas stations, automotive shops, and other locations where fuel might be stored. MTBE-contaminated water tastes and smells similar to gasoline, making it unpalatable.

While no adverse human health effects for MTBE have ever been quantified, it has been shown to be a cancer-causing agent when exposed to animals in high doses.

New York City filed groundwater lawsuits against 23 oil companies in 2003 for gas stations across the city which leached MTBE into water supplies. All of those companies settled with the city for a total of $15 million except Exxon.

Exxon officials have said that they do not believe they are responsible for the contaminated wells, and indicated to the New York Times that they will examine all legal means at their disposal in the wake of the jury’s verdict.

There are dozens of similar MTBE gasoline additive lawsuits pending throughout the United States, brought by environmental groups, residents and municipalities. The lawsuits generally contain similar allegations, that oil companies knew or should have known that MTBE could leach into the groundwater and wells from leaking USTs, and that those companies failed to warn municipalities or residents and did not take proper precautions to prevent the leaks.

In 1998, the Environmental Protection Agency (EPA) enacted new regulations that require leaking USTs to be upgraded or replaced. However, there are hundreds of sites nationwide where MTBE has contaminated drinking water. Tracing the source of MTBE contamination, removing the leaking tanks and cleaning up the contaminated soil and wells can cost millions of dollars and tends to hit small, cash-strapped, communities using small municipal or private wells the hardest.