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Shell defendant in $423 million settlement of water contamination class-action


Google Images Six Greater Lowell Communities to Share Water-Pollution Settlement

Posted on: Wednesday, 14 May 2008, 15:00 CDT

By Rita Savard, The Sun, Lowell, Mass.

May 14–A half-dozen communities in Greater Lowell will receive a slice of a $423 million settlement from a class-action lawsuit over water contamination.

Several major oil refiners, including BP and Chevron, have agreed to pay up in what was billed as the largest settlement to date with many of America’s leading oil companies over drinking-water contamination caused by methyl tertiary butyl ether — the gasoline additive known as MTBE.

“The settlement will allow the Chelmsford Water District to invest in its water system and protect the long-term viability of its water resource,” said Ron Wetmore, chairman of the town’s Board of Water Commissioners.

Chelmsford, Lowell, Billerica, Tyngsboro, Tewksbury and Wilmington await a portion of approximately $83 million that is expected to be divided among 80 municipalities in Massachusetts, according to attorney Rich Sandman, of the Malden law firm, Rodman, Rodman & Sandman. Sandman represents all the Massachusetts plaintiffs, together with Scott Summy of the Dallas law firm Baron & Budd, and Rob Gordon and Perry Weitz of the New York law firm Weitz & Luxenberg.

Because the settlement agreement is currently being reviewed by a federal-court judge, Sandman would not disclose the sum of money going to each Massachusetts community yesterday.

Payments will be determined for each town and city based on how MTBE affected their drinking-water supply.

“Big cities are not often getting big money and little towns are,” Sandman said. “Even though we’re talking about some larger cities (like Lowell and Lawrence), we’re not necessarily talking about large issues. It’s not necessarily the population of a town, or how many served, but rather the level of MTBE in the readings.”

The defendants in the case — representing about 70 percent of the country’s oil refiners — agreed to make a cash payment of $423 million to water providers in a total of 17 states nationwide.

The settlement also requires that the defendants pay their share of treatment costs for any wells owned and operated by plaintiffs that become contaminated by MTBE over the next 30 years.

“It’s an added layer of protection for our drinking-water supply,” said Robert Delaney, superintendent of the Chelmsford Water District.

Settling defendants in the case include BP Amoco, Atlantic Richfield, Chevron, Conoco Phillips, Shell, Marathon, Valero, CITGO, Sunoco, Hess, Flint Hills, El Paso Corp., Merchant Energy and Tesoro.

At least six companies declined to settle, the largest being oil giant Exxon Mobil Corp.

“The suits are without merit and our conduct did not cause physical injury or damages,” said Exxon Mobile spokeswoman Prem Nair. “We will vigorously defend our position.”

The lawsuit was filed in 2003, at the same time Congress was debating an energy bill that would have granted immunity to the oil companies for MTBE product liability lawsuits.

“The oil companies lobbied hard,” said Sandman. “They fund a lot of political campaigns and have a lot of friends in Congress.”

But in the fall of 2003, the legislation was defeated by one vote.

MTBE was added to gasoline at varying levels between 1979 and 2007, on the heels of legislation requiring lower emissions.

The plaintiffs maintain that the industry knew about the environmental dangers of the chemical, which dissolves in water, but that they used it instead of other possible alternatives because it was less expensive.

Experts say much of the MTBE found in groundwater and public drinking-water supplies stems from leaks in underground storage tanks. The Environmental Protection Agency states that MTBE is a possible human carcinogen at high doses, although it is unclear at what level it poses a health risk.

Sandman said the settlement might be tied up in federal court for another couple of months before communities see any compensation.

Delaney said any money received will be split among Chelmsford’s three water districts and for water treatment. The Chelmsford Water District would like to eventually use the funds to place the Smith Street pumping station back on line. The station, which would provide the town with another million gallons of water, was shut down in 1999.

“But you can’t start making plans until you have the money in hand,” Delaney said.

Material from the Associated Press was used in this report.


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Copyright (c) 2008, The Sun, Lowell, Mass.

Distributed by McClatchy-Tribune Information Services.


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