Exxon Mobil Corp. lost the second phase of a trial in which New York City accused the company of poisoning the city’s groundwater, with a jury ruling that a gasoline additive will remain in water wells for years.
The case is part of larger litigation over methyl tertiary butyl ether, or MTBE. More than 70 lawsuits filed by water providers and state and local governments were consolidated before U.S. District Judge Shira Scheindlin for pretrial information-gathering, according to an industry Web site.
An 11-member jury decided today that MTBE will contaminate the output of six affected wells at a peak level of 10 parts per billion in 2033. The verdict came on the third day of deliberations, less than two hours after jurors told Scheindlin they were deadlocked on a part of the case.
BP Plc, Chevron Corp.,ConocoPhillips, Hess Corp. and Royal Dutch Shell Plc. were among 33 companies that settled the case. Exxon Mobil, based in Irving, Texas, was the lone holdout.
“Even if small amounts are detected 15 or 20 years from now, that still would not change the fact that Exxon Mobil is not the source, nor would it establish the City’s claim for future damages during the next phase of the trial,” Kevin Allexon, an Exxon Mobil spokesman, said in a statement today.
The jury panel will next decide whether Exxon Mobil is liable for poisoning the water and, if so, how much it should pay. Exxon Mobil, the biggest U.S. oil company, may face millions of dollars in damages.
The trial concerns six wells, five of which New York says are poisoned with MTBE, in and near the Jamaica area of the borough of Queens. The city says it wants to build a water- treatment plant there called Station 6 that will clean 10 million gallons of water per day.
Exxon Mobil lawyers argued during the trial that the wells were turned off and unusable because of contaminants other than MTBE.
The wells are “located in an industrial cesspool that has nothing to do with MTBE,” Peter Sacripanti, a lawyer for Exxon Mobil at McDermott Will & Emery in New York, told jurors in his opening statement.
Exxon and Mobil, which merged in 1999, began using MTBE in the 1980s to boost octane. The U.S. Congress amended the Clean Air Act in 1990 to require companies to add an oxygenate to gasoline to reduce air pollution. Additives such as MTBE are chemical compounds that raise the oxygen content of gasoline to make it burn more cleanly and efficiently.
Exxon could have used ethanol as an oxygenate in New York, Victor Sher, a lawyer for the city with San Francisco-based Sher Leff LLP, told jurors. The company used MTBE to save 3 cents a gallon, he said. “They chose making money over protecting the public’s health and the environment,” Sher said.
The city argued that MTBE renders water undrinkable by making it smell and taste like turpentine. It can cause dizziness, nausea and nervous-system disorders, the city said. Sher said it also can cause cancer, which Sacripanti denied.
The MTBE removal would add $54 million to $70 million in capital costs and $120 million to $258 million in operating and maintenance costs over 40 years, according to a report by the environmental consulting firm Malcolm Pirnie Inc., done for the city.
If Exxon Mobil is found liable for poisoning the water, the fourth phase of the trial will decide what, if any, punitive damages will be imposed.
The case is City of New York v. Exxon Mobil Corp., 04-cv- 3417, grouped with others in the master-file case, In Re: Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation, 00-cv-1898, U.S. District Court, Southern District of New York (Manhattan).
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