Exxon Mobil Corp. was found liable Tuesday in a long-running lawsuit over groundwater contamination caused by the gasoline additive MTBE, and the jury ordered the oil giant to pay $236 million to New Hampshire to clean it up.
The jurors reached their verdicts in less than 90 minutes, after sitting through nearly three months of testimony. Lawyers on both sides were stunned by the speed with which they reached the verdict on liability and even more stunned when the jurors took barely 20 minutes more to fill out the damages verdict.
The panel awarded the state all $236 million it was seeking to monitor and remediate groundwater contaminated by MTBE. The chemical was added to gasoline to reduce smog but was found to travel farther and faster in groundwater than gasoline without the additive.
Exxon Mobil lawyers made it clear outside the jury’s presence last week that they were laying the groundwork for an appeal.
“We appreciate the jurors’ service during this long trial, but erroneous rulings prevented them from hearing all the evidence and deprived us of a fair trial,” said Exxon Mobil lawyer David Lender.
The verdict is more than twice the $105 million jurors awarded the New York City Water District in 2009 in its case against Exxon Mobil over MTBE contamination. That case is on appeal.
Sher Leff, a California law firm that won the New York City verdict, was hired by the state of New Hampshire at the outset of its 2003 lawsuit to try its case against Exxon Mobil.
Jessica Grant, the state’s lead lawyer, said it was the largest verdict ever in an MTBE case, though a financial analyst noted that the award represents about two days’ worth of profit for the company.
Jurors found that Exxon Mobil was negligent in adding MTBE to its gasoline and that it was a defective product. They also found Exxon Mobil liable for failing to warn distributors and consumers about its contaminating characteristics.
The jury determined that the hazards of using MTBE gasoline were not obvious to state officials, who opted into the reformulated gasoline program in 1991 to help reduce smog in the state’s four southernmost counties.
Jurors also rejected Exxon Mobil’s defense that more than 300 junkyard and gas station owners not named in the lawsuit were responsible for much of the contamination. They also absolved the state of responsibility for the contamination.
The jury found damages in the amount of $816 million, but that award was reduced to 28.9 percent of the total — reflecting Exxon’s market share of gasoline sold in the state between 1988 and 2005.
Lawyers for Exxon Mobil argued the company used MTBE to meet federal Clean Air Act mandates to reduce air pollution and should not be held liable for sites contaminated by other retail businesses.
The U.S. Environmental Protection Agency has classified MTBE as a “possible human carcinogen.” New Hampshire banned its use in 2007.
The state says more than 600 wells in New Hampshire are known to be contaminated with MTBE and an expert witness estimated the number could exceed 5,000.
Irving, Texas-based Exxon Mobil was the sole remaining defendant of the 26 the state sued in 2003. Citgo was a co-defendant when the trial began in January, but it began settlement negotiations with the state and withdrew from the trial. Citgo ultimately settled for $16 million, bringing the total the state has collected in MTBE settlement money to $136 million.
Fadel Gheit, managing director of oil and gas research and a senior analyst at Oppenheimer & Co., said the verdict won’t put a dent in Exxon Mobil’s bottom line.
“Exxon will probably make close to a $40 billion profit this year, Gheit said. “That’s two days’ work.”
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