Alice Baker

November 13, 2009

On October 19, a federal jury awarded New York City $104.7 million compensatory damages for groundwater contaminated by ExxonMobil. City officials, who had been seeking $250 million to construct a treatment plant, hailed the verdict as a victory.

During the 11-week trial, attorneys for New York City showed that Exxon and Mobil—prior to their merger in 1999—knew that a new gasoline additive would be a dangerous compound if it were introduced into the nation's groundwater. The trial concerned six wells in Queens where the city plans to build a water-treatment plant called Station 6. ExxonMobil was the lone holdout after United States District Judge Shira Scheindlin dismissed claims against 33 other companies, which settled with city for a total of $13.7 million.

MTBE, or methyl tertiary butyl ether, was previously used to oxygenate gasoline. Oil companies began adding oxygenators to help gasoline burn more completely and reduce tailpipe emissions. The use of MTBE increased after the 1990 Clean Air Act amendments required stricter emissions standards. Increased use led to increased contamination through fuel leaks from storage tanks and other sources. Through these leaks, MTBE, which is highly soluble in water, contaminated groundwater that is often used as a source of municipal drinking water. Although data of health effects on humans is limited, MTBE may cause dizziness, nausea and nervous system disorders. Additionally, there is some indication that MTBE may cause cancer. ExxonMobil attorneys deny this. It was not disputed that MTBE's presence makes water undrinkable since it smells and tastes like turpentine. As health concerns surrounding MTBE grew through out the 1990s, many states, including New York, banned its use in gasoline. Currently 25 states have banned or restricted the use of MTBE.

The award of compensatory damages was the third phase of a four-phase trial. Initially, ExxonMobil attorneys claimed that the city had no intention of ever actually building Station 6. ExxonMobil claimed that the station is sited in an "industrial cesspool," which would never be suitable for drinking water. They claim that pollution of the area is not due to MTBE, but because the groundwater contained pharmaceutical and human waste, dry-cleaning fluid from a company once located near the site and 70,000 gallons of diesel fuel spilled at a nearby bus depot. In the second phase of the trial, ExxonMobil claimed that even if the city does build a well at the site, there is no evidence that MTBE will be present when the well is completed and turned on in 15-25 years. In this phase, the court determined that ExxonMobil was liable for poisoning the water. The city argued that ExxonMobil ignored evidence from its own scientists of a risk of groundwater contamination. The city asserted that ethanol could have been more widely used and was not. While Ethanol does not pose the same health threats it is more expensive. The city also claimed that ExxonMobil failed to warn government agencies, gasoline station owners, water suppliers, and the public about the dangers of MTBE. In the final phase the court will decide if any punitive damages should be imposed.

Besides the relevant environmental issues in this case, the trial was eventful. Two jurors were dismissed from the case. The first after he admitted having conducted Internet research on the case. The second was dismissed after the forewoman threatened her with a fork. The attorney for Exxon Mobil asked that the juror who did the threatening also be removed. However, Judge Scheindlin asked each of the other jurors individually if they felt threatened. They all said no.

The award represents a significant win for New York City and many other municipalities who have filed similar suits against oil companies. The verdict sends a message to polluters and places a high value on the public's right to potable drinking water. This decision has placed the financial burden of cleaning up contamination to the groundwater system on the polluters. As New York City Mayor Michael Bloomberg said, "Our water supply is one of our most vital resources, and we will work to protect it and go after those who damage it."

Sources

Environmental Protection Agencyfile://localhost/, http/::www.epa.gov:MTBE:(last visited Nov. 5, 2009).

Mireya Navarro, City Says Exxon is Liable for Tainted Well Water in Queens, N.Y. Times, Aug. 7, 2009, available at http://www.nytimes.com/2009/08/07/science/earth/07exxon.html.

Mireya Navarro, City Awarded $105 Million in Exxon Mobil Lawsuit, N.Y. Times, Oct. 20, 2009, available at http://www.nytimes.com/2009/10/20/science/earth/20exxon.html.

Press Release, New York City Law Department, Exxon Mobil found liable for $105 million for contamination of New York City's Groundwater (Oct. 19, 2009) (on file with author).

Thom Weilich, Exxon Additive fouled New York Groundwater, Jury Told (Update2), Bloomberg.com, Aug. 4, 2009, available at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=an4v3mm7rO5s.

Thom Weilich, Exxon Juror Reports Threats by Another, Leaves Trial (Update3), Bloomberg.com, Oct. 16, 2009, available at http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJzRgJTFrycY.