Sunday, May 24, 2015
It was the largest such verdict in New Hampshire history, and Exxon, perhaps predictably, has been contesting it ever since.
The battle appears to be finally nearing a head. Last week, Exxon’s attorneys asked the state Supreme Court to vacate the judgment and, at the least, order a new trial. They argue, in part, that Exxon was unfairly blamed for contaminations that other companies or distributors may have caused, or that may not even exist or ever be discovered.
“This is essentially a groundwater contamination case without the spills,” Exxon’s attorney, former U.S. solicitor general Paul Clement, told the court Thursday.
Exxon and other petroleum suppliers began using MTBE – methyl tertiary butyl ether – in New Hampshire in the 1990s after the state joined a federal program requiring suppliers to oxygenate gas to reduce air pollution.
The state banned MTBE in 2007, after years of national warnings about its contamination threat – it spreads faster and farther than other gas components, and costs more to clean up – and four years after state prosecutors began seeking damages to help pay for cleaning up associated spills.
All but Exxon eventually settled out of court.
Exxon claims the state knew when it joined the federal program that MTBE was the most feasibly available oxygenate in New England, and that it posed environmental risks. The state said it first learned of the risks in the late ’90s, and argued that Exxon could have used ethanol, a less-toxic additive, but chose not to in an effort to increase profits.
“Exxon produced MBTE, it was a byproduct of its refining activity,” said the state’s attorney, David Frederick. “It didn’t produce ethanol. So it viewed this as a profit opportunity: If we use MBTE we can kill two birds with one stone and make a lot of money to boot. And that’s what they did.”
The state identified up to 300,000 susceptible private wells and related ground sites, but said it would take decades of sampling to know how many had been contaminated, and that even then it would be impossible to determine who had caused the contamination. (MTBE has no chemical footprint, making it untraceable.)
Instead, a judge allowed prosecutors to pursue damages proportional to Exxon’s total production share. That decision, Clement said, was unprecedented, and it effectively undercut the company’s ability to defend itself.
“The circumstances that led to one person’s contamination, the degree of the contamination, the problems they face, how they got there, who’s responsible – the who, what, how and where – all those are different from spill to spill,” Clement said. He added that, although MTBE is untraceable, the gas in which it is found is not.
Chief Justice Linda Dalianis countered that the additive “doesn’t stay there, it moves.”
“You can probably figure out that the biggest part of a spill that’s near your station is your responsibility,” she said. “But when it migrates in the ground and five years go by, some of that spill might be somewhere else.”
“We’d be happy to have a trial as to our responsibility for particular spills, including particular spills that are close to our stations,” Clement replied.
The state claims Exxon is culpable both because it knew of the risks associated with MTBE as early as 1984, long before the state was made aware of them, and because leaks and spills are inevitable.
“This is a leaky industry,” Frederick said. “Everybody knows it’s a leaky industry.”
The state has already begun identifying and cleaning up contaminated sites. The Department of Environmental Services launched a 13-person Remediation Bureau last spring, using some of the $81.6 million from the settlements with other MTBE suppliers. That figure – what’s left after administrative and legal costs were deducted – is restricted and can only be used for remediation efforts.
Gary Lynn, who heads the bureau, said nearly 800 samples have been taken so far, and that 24 percent have some level of MTBE contamination. About 1 percent require intervention – installing treatment systems, removing tainted soil or diverting water lines to local municipal sources.
Whether the money from the Exxon verdict should be restricted to MTBE investigation and cleanup is one of the issues also before the supreme court. Exxon says it should be restricted, the state says that, because it was jury verdict rather than a settlement, it should not.
No date is set for a decision by the court. Three of the five justices – Justice Jim Bassett, Justice Carol Ann Conboy and Justice Robert Lynn – have recused themselves from the case. Retired superior court judge Timothy Vaughan is sitting in as a substitute.
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