One of the Environmental Litigation Group’s most impressive accomplishments is their success in litigating MTBE cases against the major oil companies in the United States. Refiners blended methyl tertiary butyl ether or “MTBE” into gasoline beginning in the early 1980s despite knowing that, even when used properly, MTBE would cause widespread groundwater contamination. As the companies predicted, MTBE became a rampant contaminant plaguing public water providers.
Shareholder Scott Summy filed the first lawsuit in the United States alleging that MTBE contaminated drinking water. He sued Conoco Oil on behalf of a group of Wilmington, North Carolina residents whose water was contaminated by a gasoline spill at a nearby Conoco gas station. In 1997, Conoco Oil settled with these residents for a confidential amount.
Now, the ELG has represented more than 200 public entities seeking to recover the costs of removing MTBE and benzene from drinking water supplies. Their clients include an array of entities from small villages to entire states. To date, our attorneys have recovered hundreds of millions of dollars to remediate contamination across the country.
MTBE Litigation Timeline
1980First documented case of MTBE contamination in Rockaway, NJ; oil industry learns of unique MTBE risk to environment
Mid 1980sInternal documents reveal that oil industry engineers discover MTBE contamination risks and counsel companies against its use.
1990Clean Air Act passed by Congress requires non-specific oxygenates to be added to gasoline in Reformulated Gas States.
1995Scott Summy files first MTBE contamination case representing Wilmington, NC residents against Conoco.
1997Summy and legal team win favorable verdict for clients and successfully resolve first MTBE lawsuit.
1998Summy files water contamination suit on behalf of Communities for a Better Environment (California) and uncovers documents showing corporate knowledge of MTBE risks from the 1980s, which become basis for future product liability claims.
2000City of Santa Monica forced to import 30% of drinking water following MTBE contamination of wells; hires Summy and Baron & Budd in suit against oil companies.
2002Baron & Budd reaches significant settlement with oil companies on behalf of City of Santa Monica.
2003Amendment to Energy Bill absolving oil companies of liability in MTBE claims is defeated in U.S. Senate by one vote.
2008Baron & Budd’s Scott Summy, as co-lead counsel for 153 plaintiffs from 17 states, reaches historic partial settlement with oil industry, including substantial monetary recovery as well as 30-year well protection plan.
MTBE’s characteristics made it a poor choice from an environmental standpoint. It dissolves much more easily in water than the other hazardous chemicals in gasoline — benzene, toluene, ethyl-benzene and xylene (BTEX). That means that when MTBE comes in contact with water, it quickly dissolves and flows along with the water. While the BTEX ingredients of gasoline will tend to stick to soil and stay put, MTBE doesn’t. It flows through the soil to water. As a result, even a small spill of MTBE-containing gasoline will pollute groundwater and can contaminate a nearby well.
Even worse, MTBE does not biodegrade into harmless substances in the natural environment like the BTEX ingredients will. Instead of lessening over time, MTBE continues to spread, contaminating larger quantities of water.
And MTBE is not easy to clean up once it is in the environment. Because it dissolves so completely in water, it is much more difficult and more expensive to get back out of groundwater than the BTEX chemicals. The oil companies’ own estimates say that adding MTBE to gasoline makes a cleanup project five times more expensive.
MTBE is a specific concern for drinking water providers because MTBE can make water smell and taste like turpentine. It takes only a few drops of MTBE to contaminate a body of water equivalent to an Olympic-size pool. The taste and smell alone can make the water undrinkable, but taste and smell are not the only problem. The EPA says that MTBE causes cancer in animals and may cause cancer in humans, too.
Liability for MTBE Contamination
Through two decades of litigating MTBE cases, the Environmental Litigation Group has learned that many of the oil companies who chose to use MTBE in their gasolines foresaw the type of contamination that became a reality for drinking water providers.
When gasoline is delivered to a gas station, it is stored in large underground storage tanks. Documents and deposition testimony confirm that in the 1980s, the oil companies in the United States knew that hundreds of thousands of those tanks across the country were leaking, releasing gasoline into the soil under the tanks. The companies also knew that when MTBE leaks from those tanks, it would easily contaminate groundwater and underlying aquifers, requiring expensive remediation efforts.
The documents also show that some of these oil companies were warned by their own environmental departments not to add MTBE to their gasoline for these very reasons. Some were dealing with MTBE contamination first-hand at their own stations, but they continued to add MTBE to gasoline anyway. After all, MTBE was cheap and available.
The ELG also discovered that the oil companies misrepresented the dangers of MTBE to the U.S. Environmental Protection Agency (EPA). Although the companies had their own experience with MTBE contamination, they told the EPA that MTBE did not pose any special threat to the environment. In fact, they promoted MTBE to the EPA as environmentally friendly. When researchers reported in the mid-1980s about the dangers of MTBE as a water contaminant, the oil companies formed an MTBE Committee to counter the bad press and assure the EPA that MTBE was not a risk to the environment.
Role of Station Owners
In MTBE cases, our attorneys do not usually sue the owners of gasoline stations that released MTBE-containing gasoline. Under the law of products liability, when a product is defective, everyone in the “chain of distribution” from the manufacturer to the final retailer can be held responsible for harm caused by that product.
But the ELG’s philosophy is that the entity owner who knew about the danger posed by a product and decided to sell that product anyway is the responsible party who should pay for harms caused by that product. With respect to MTBE, our attorneys have taken the position that the oil companies should be held responsible because they knew the risks of using MTBE, knew from experience that MTBE would leak and would require costly cleanup, misrepresented those risks to EPA and the government, and decided to add MTBE to gasoline anyway. Gas station owners were not part of the decision-making process: they had no control over what went into gasoline, and they didn’t know about MTBE or the problems it caused.
The National Settlement
In 2008, the ELG at Baron & Budd negotiated a settlement with the bulk of the major oil companies that required the oil companies to pay a substantial cash settlement to 153 public water providers and a number of private well owners in 17 states. The companies also agreed to pay for cleanup of any MTBE contamination discovered in the next 30 years — providing protection to an additional 3,600 wells serving millions of Americans. The national settlement represents tremendous progress toward holding the oil companies responsible and getting communities the resources they need to clean up America’s public drinking water supplies.
Another benefit of the litigation and settlement is that it brought MTBE to public attention. States began to ban the use of MTBE-containing gasoline in 2001. By 2009, twenty-four states had passed similar bans, and refiners had ceased using MTBE.
The ELG lawyers at Baron & Budd represented approximately 21 public water providers from six states in similar litigation against oil refiners. We settled these cases (without engaging in discovery) for almost $20 million.