A jury has awarded the State of New Hampshire $236 million in damages against Exxon Mobil Corp. for groundwater contamination. While this was by far the largest verdict in the state’s history, it represents only about two days’ worth of profit for the energy company, according to an industry analyst. According to Fadel Gheit, managing director of oil and gas research and a senior analyst at Oppenheimer & Co., the verdict won’t put a dent in Exxon Mobil’s bottom line. He pointed out that “Exxon will probably make close to a $40 billion profit this year,” adding, “that’s two days’ work.”
The Jurors awarded the state the entire $236 million it was seeking from Exxon Mobil to monitor and remediate groundwater contaminated by MTBE, a chemical added to gasoline to reduce smog, but found to travel farther and faster in groundwater than gasoline without the additive. Experts testified that a teaspoon can cause widespread contamination. This 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.
Jurors found that Exxon Mobil was negligent in adding MTBE to its gasoline and that MTBE was a defective product. They also found Exxon Mobil liable for failing to warn distributors and consumers about its contaminating characteristics. 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 that the company should not be held liable for sites contaminated by other retail businesses.
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 of New Hampshire has collected in MTBE settlement money to $136 million.
Sher Leff, the California law firm that successfully handled the New York City case, was hired by New Hampshire Attorney General Michael Delaney to try his state’s case against Exxon Mobil. Matt Pawa, a lawyer with the Pawa Law Group in Boston, was also brought in by the Sher Leff firm and was involved in the case from the start. Jurors had more than 400 exhibits to go through, including memos and reports dating back decades. Those memos included some in which Exxon Mobil researchers warned against using MTBE gasoline because of the extensive harm it can do to groundwater.
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