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Two final defendants agreed Monday to settle in an MTBE underground water contamination case, concluding an 11-month trial that involved more than a dozen companies. Shell Oil Co. said Monday it would pay $28 million — the largest payout — to the South Lake Tahoe Public Utility District, bringing the total settlement to $69 million. Twelve companies settled for a total of $30 million before the trial began in September. In April, a jury verdict declared MTBE as a gasoline additive was a “defective product,” and the remaining four companies, including Shell, since have reached agreements rather than let the jury ring up a damage award for them. Duane Miller, who represents the utility district, said the verdict and settlements put the petroleum companies on notice that they must take remedial action or risk more financial adversity. “The oil industry has to seriously consider getting MTBE out of gasoline sooner rather than later, unless they wish to face juries again with these kinds of issues,” said Miller, name partner in Sacramento’s Miller, Sher & Sawyer. Miller predicted the trial testimony and damage awards would have a major impact on similar lawsuits pending in Illinois, Texas and elsewhere in California, such as Santa Monica. “Hopefully they’ll be resolved without going to court,” he said. San Francisco Superior Court Judge Carlos Bea, who presided over the closely watched trial and approved the settlements, told jurors Monday before he dismissed them that they had made history. “It’s an important case that is part of the development of environmental law,” Bea said. Jury foreman Michael Hawley said jurors found that evidence overwhelmingly showed the environmental problems posed by the gasoline additive were ignored by petroleum companies. “We wanted our verdict to mean that the oil companies didn’t tell their customers or the public of the danger,” Hawley said. During the trial, defendants including Texaco Inc. and Tosco Corp. argued the federal government ordered them to make a cleaner-burning gasoline. They said MTBE, or methyl tertiary butyl ether, met the demand, and gas stations were taught how to safely store the fuel. But the jury rejected that argument and instead told the oil companies in South Lake Tahoe Public Utility District v. Atlantic Richfield Co. 999128, that whatever the benefits of MTBE, its risks and potential danger to humans outweighed them. “It’s as I’ve told the jury, for a long time, we have had air we can see,” Miller said. “We don’t want water we can taste.” MTBE reportedly tastes like turpentine. He conceded, however, that there is no scientific evidence that MTBE is a carcinogen. But the powerful defective product verdict cleared the way for serious settlement talks to begin, he said, after initial efforts fizzled. “It was the major motivating factor,” he said. “We were able to settle with people whom we were unable to settle with before.” The defendants who settled before the trial began included Unocal Corp., Exxon Mobil Corp. and BP American Inc. After the jury verdict, one by one the remaining defendants reached agreements. Tosco settled for $3 million in June, and Lyondell Chemical Co. of Houston, the country’s main manufacturer of MTBE, paid $4 million soon afterward. That left two defendants, Shell and a Lake Tahoe gas station, preparing for the damage phase of the trial. In addition to Shell’s settlement Monday, the gas station known as Tahoe Tom’s agreed to pay $300,000. Shell defense counsel Stephen Jones of Sedgwick, Detert, Moran & Arnold declined to comment and referred questions to company headquarters in Van Nuys. Shell spokesman Cameron Smyth said the oil giant decided to throw in the towel and put the lawsuit behind it. “It was just determined that this was the appropriate action to eliminate other protracted litigation,” such as appeals, Smyth said in an interview.

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