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.