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Pennsylvania Files Lawsuit For MTBE PollutionJune 27, 2014

The State of Pennsylvania is the latest to file a lawsuit against oil refiners and distributors for pollution of the state’s groundwater with methyl tertiary butyl ether (“MTBE”).  ExxonMobil and BP are among the many companies sued for the costs associated with MTBE spills over the past twenty (20) years.  Many other states and cities have filed similar suits across the country.  There is current litigation regarding MTBE contamination in New Jersey in the federal court.

Related Practice: Environmental & Land Use

Attorney: Lindsay Cambron

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CITGO Petroleum Corp. to pay $23.25 million to settle MTBE contamination claimsNovember 12, 2013

CITGO Petroleum Corporation has agreed to pay $23.25 million to New Jersey to settle methyl tertiary butyl ether (MTBE) contamination claims.

In June 2007, the New Jersey Department of Environmental Protection (NJDEP) filed suit against nearly 50 MTBE manufacturers, refiners and marketers alleging that they were responsible for contamination of state waters with the gasoline additive MTBE. The proposed Judicial Consent Order (New Jersey Dep’t of Envtl. Prot. v. Atlantic Richfield Co., S.D.N.Y., No. 08-CIV-00312, proposed consent order 10/21/13) would resolve CITGO’s alleged liability for damages, past cleanup and removal costs, and injunctive relief under the New Jersey Spill Act and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).  CITGO’s remediation obligations, if any, are not affected by this settlement.

A copy of the proposed Judicial Consent Order is available for inspection via the Internet at http://www.nj.gov/dep/srp/legal/ and at the Department’s Office of Record Access.

Related Practice: Environmental & Land Use

Attorney: Frances Stella

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$216 Million Verdict Against ExxonMobil Over MTBE UseApril 15, 2013

A jury in New Hampshire awarded the State $216 million from ExxonMobil for contaminating its drinking water with methyl tertiary butyl ether (MTBE). The State of New Hampshire filed an $816 million lawsuit against 22 oil and gas companies regarding the use of MTBE and charging that the companies were aware of the harms associated with MTBE but that they used the chemical anyway. ExxonMobil was the only remaining defendant as the others settled out. The State submitted the costs associated with the clean-up and calculated an estimate of ExxonMobil's market share to determine its share of the damages. ExxonMobil will appeal the decision.

Related Practice: Environmental & Land Use

Attorney: Frances Stella

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NJ Appelate Divistion Holds NJDEP Must Prove Nexus Between Discharge and Contamination Under Spill ActApril 14, 2011

In New Jersey Department of Environmental Protection, et al. v. Ofra Dimant, et al., Docket No. A-3180-09T2, the Appellate Division upheld the trial court's ruling that the New Jersey Department of Environmental Protection ("NJDEP") did not prove a nexus between a discharge by defendant and the contamination in the area.

NJDEP filed a New Jersey Spill Act claim for contribution and indemnification pursuant to the New Jersey Spill Act, N.J.S.A. 58:10-23.11 to 23.24 ("Spill Act") against several defendants, including Sue's Clothes Hanger and its individual owners ("defendant") alleging that the laundromat and dry cleaner was responsible for water contamination on properties in Bound Brook. The defendant occupied a unit of a strip mall that was north and northeast of the contaminated properties. There were also several other dry cleaners in the area as well as a gasoline station and two Superfund sites.

The defendant began its operation as a self-serve laundromat and a twice-per-week dry cleaner, after purchasing the property from another dry cleaner in May 1987. In early 1989, the defendant discontinued use of the dry cleaning machines and dismantled and sealed the discharge pipes, making the period of defendant's operations, for purposes of this case, May 1987 to early 1989. In 2000, the NJDEP investigator and geologist found that the potable wells with the highest levels of perchloroethylene ("PCE") in 1988 and 1989 were located behind the defendant's property and another dry cleaner. NJDEP took additional samples, which resulted in soil samples containing almost undetectable levels of PCE, trichloroethylene ("TCE"), and dichloroethylene ("DCE"), but groundwater samples above the maximum contamination levels ("MCL") for PCE and methyl tertiary butyl ether ("MTBE"), a gasoline additive. The investigator concluded that the defendant was the primary source of the contamination but that the presence of TCE and DCE indicated that the contamination had been there for a long time prior to 1988.

The defendant's expert also opined that the contamination was there prior to the defendant's business operations and certain contamination was from the upgradient gasoline service station. The NJDEP investigator and the defendant's expert had differing views of the direction of the flow of groundwater.

In 2004, NJDEP filed a complaint against the defendant, the strip mall owner, the other dry cleaner and the individual owners of the dry cleaner seeking contribution for the costs of the environmental remediation. The defendant filed an answer, counterclaim and third-party complaint against prior owners and operators, including the previous owners of their business. Several defendants settled with the NJDEP, while others filed for and received bankruptcy protection. The defendant was the only remaining party at trial. The trial judge found that the NJDEP did not establish by a preponderance of the evidence that there was a nexus between discharge by the defendant and the groundwater contamination on the adjacent properties. The judge held that even though the Spill Act provides for strict liability, there is a requirement that a nexus between the discharge and the consequent damages be proved. The judge made several other findings regarding the NJDEP's investigation, as well as the historic operations at the site. NJDEP appealed.

The Appellate Division noted that Spill Act cases are generally focused on the connection between the discharge and discharger and that the "in any way responsible" standard is usually interpreted very broadly. The Court does, however, note that the statute's definition of discharge specifically refers to a resulting damage. The NJDEP did not cite any cases in which a discharger is held liable under the Spill Act without some proof of damage. The Court held that it was NJDEP's burden to demonstrate that the defendant had some connection to the PCE contamination or had contributed to the contamination from previous site operations. The Appellate Division also upheld the trial court's finding that the NJDEP did not prove whether the defendant's predecessors had caused the contamination and not one of the other tenants in the strip mall; thus the defendant could not be found liable as the successor operator, even though it continued the business operations of the previous owner as there was insufficient evidence to establish a discharge.

This case demonstrates that it is critical to demonstrate that it is critical to demonstrate a nexus between a discharge and the contamination.

Related Practice: Environmental & Land Use

Attorney: Frances Stella

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