Jury Slams Exxon With $105M in Damages Over Water Pollution

A federal jury in New York has found that Exxon Mobil Corp. must pay nearly $105 million in compensatory damages for contaminating the city's drinking water supply with the gasoline additive MTBE.

The case was the first MTBE-related lawsuit in the country to go to trial and result in a verdict, according to a statement by attorney Robert Chapman of Greenberg Glusker in Los Angeles, who represented the city.

"Today we achieved justice for the environment and improved safety for the people of New York," Chapman said.

MTBE is a gasoline additive that increases the oxygen content in fuel. It was used as early as the 1970s, and its use became more widespread after government regulations required oil companies to produce fuel with a higher oxygen content to reduce smog.

After an 11-week trial the jury in the U.S. District Court for the Southern District of New York found Exxon liable for trespass, public nuisance, negligence and failure to warn people about the dangerous nature of its product.

However, U.S. District Judge Shira Scheindlin prevented the jury from considering punitive damages, finding that city did not present evidence that Exxon's conduct was "malicious, reckless or wanton."

The city sued Exxon and other oil companies for the costs of removing the gasoline additive from its wells in Queens. Several of those companies, including Shell, BP, Chevron, Citgo, Hess and Sunoco, previously settled the city's claims against them for $15 million

According to the lawsuit, Exxon added MTBE to gasoline even though it knew it would contaminate groundwater when the gasoline leaked from underground storage tanks.

The city also said the oil company ignored warnings from its own scientists and engineers not to use the additive in areas of the country that use groundwater for drinking water.

Exxon also failed to warn government agencies, gasoline station owners, water suppliers and the public about the dangers from MTBE, the city contended.

New York state banned MTBE in 2004.

Numerous lawsuits have been filed across the country against oil companies and refineries for allegedly contaminating groundwater with MTBE.

The cases have been consolidated into a multidistrict litigation proceeding in the District Court before Judge Scheindlin.

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