NH jury verdict of $816M over MTBE contamination of state's drinking water

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CONCORD, NH, April 10, 2013 -- After a three month trial -- the longest in state court history -- a New Hampshire jury took less than two hours to find unanimously that ExxonMobil was negligent in supplying over 2 billion gallons of MTBE (methyl tertiary butyl ether) gasoline that resulted in widespread contamination of the state's drinking water. The jury awarded the state total damages of $816 million -- ExxonMobil will pay 28.94 percent (its market share), which is $236,372,664.

"The trial was about whether ExxonMobil designed a defective product, failed to warn about the increased dangers of MTBE and disregarded the advice its own environmental experts," said Jessica Grant of Sher Leff, lead trial attorney for the state of New Hampshire in this matter. "The finding of ExxonMobil's negligence is particularly important because it shows the jury understood that this problem could have been avoided."

In the trial which began on Jan. 14, 2013, the state of New Hampshire was seeking clean up costs relating to the contamination of New Hampshire's drinking water with MTBE -- a gasoline additive classified by the EPA as a "possible human carcinogen" that was banned in New Hampshire in 2007. The State sued to hold ExxonMobil liable for its share of the clean-up costs, based on the fact that the company supplied over 2.7 billion gallons of MTBE gasoline into New Hampshire, which accounts for nearly 1/3 of the state's gasoline market.

The state originally sued 26 oil companies in 2003 over the contamination of the state's drinking water by the gasoline additive MTBE. The state previously settled with all other parties but ExxonMobil -- collecting more than $130 million for MTBE cleanup from the other defendants.

Evidence showed that ExxonMobil's own environmental experts advised in the 1980's against adding MTBE to ExxonMobil's gasoline because it travels farther in groundwater than gasoline without MTBE and is resistant to biodegradation, which significantly increases the potential for contaminating much larger volumes of water. Although ExxonMobil contends that the use of MTBE was mandated by the EPA to curb air pollution, the Clean Air Act Amendments are oxygenate neutral, leaving it up to the oil companies as to which oxygenate to use.

Experts for the state estimate that over 40,000 New Hampshire drinking water wells are contaminated with MTBE and that 5,590 wells have levels of MTBE that are above the state's safe drinking water standard. The State was also seeking costs to clean up 228 high risk sites where MTBE has contaminated the soil and groundwater.

New Hampshire is the only state to have reached the trial stage in a suit over MTBE gasoline and is trying the case on a statewide basis. Other lawsuits brought by water districts, cities and individual well owners have ended in settlements. Lawyers from Sher Leff won a $250 million federal jury verdict in 2009 on behalf of New York City for MTBE contamination of city wells, which is currently on appeal -- Exxon Mobil's share of damages in that case was $105 million.

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