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Litigation over the gasoline additive MTBE has heated up in recent weeks with a wave of suits filed around the country. But is it a flare-up of dying embers? It appears to be the end of the line for lawsuits claiming that the additive, methyl tertiary butyl ether, is a defective product that pollutes water supplies. Last Friday, shortly before press time, the Republicans on the House-Senate conference committee released to the committee’s Democrats the final draft of the federal energy bill, which the Democrats hadn’t even seen. The bill, which has been veiled in secrecy, was not expected to be publicly released until Saturday. According to The Associated Press, the bill includes language that will immunize the oil industry from future claims. The bill’s effective date had been rumored to be Oct. 1, with some talk of a possible rollback to April 1. Sources said the date in the draft is Oct. 1, but that could not be confirmed. Though there could be additional negotiations, few changes are expected since the Republicans represent a majority on the committee. Votes are expected in the House and Senate this week, and passage appears almost certain. Several lawsuits filed in recent weeks were timed with the October deadline firmly in mind, most notably the first statewide claim, brought on behalf of New Hampshire. Several defense lawyers agreed to discuss the litigation, some on the condition that their clients not be named. A few declined to speculate about what Congress will do. But more than one pointed out, as did Andrew Langan of Chicago’s Kirkland & Ellis, that plaintiffs will still have the benefit of trespass and nuisance laws and state environmental regulations. “I’m not aware of any efforts to rewrite or revise any of those laws,” he said. “There are funds in every state to clean up spills,” agreed Nate Eimer of Chicago’s Eimer Stahl Klevorn & Soldberg, who represents Citgo Corp. and is taking the lead in defending the New Hampshire case. “There are traditional methods that states have successfully used for a long time.” Maureen Smith, senior assistant attorney general and lead attorney for New Hampshire, has no plans to back off, no matter what Congress does. “We will oppose any argument they make that they are off the hook,” she said, “and we will proceed full force with the litigation until a court directs us otherwise.” Plaintiffs’ lawyers have suffered stinging losses in the past few years. MTBE suits in North Carolina, Maine and New York failed to certify classes of private well owners claiming their water was contaminated. Jon Hinck, who represented plaintiffs in all three (and is now staff attorney at the Natural Resources Council of Maine), pronounced the effort “close to dead.” Public suppliers win Suits on behalf of public water providers have fared better. Two California municipalities have won substantial settlements. A third is well on its way. The case that made the biggest splash was South Lake Tahoe Public Utility District v. Atlantic Richfield, No. 99-9128 (San Francisco Super. Ct.). In April 2002, the Tahoe jury found five large manufacturers and refiners, including Shell and Texaco, guilty of selling a defective product. Following the liability phase, the companies settled for a total of $37 million. In addition, Exxon, Chevron and several other companies had settled before trial for $32 million, for a total of $69 million. “The Tahoe case is what has galvanized the oil industry to try to avoid liability for making the choice of what it put into gasoline,” said plaintiffs’ lawyer Victor Sher of San Francisco’s Sher & Leff. He’s convinced it inspired the effort on the energy bill. What defense lawyer Peter Sacripanti objects to, he said, is that gasoline content is supposed to be a matter of federal law. What’s more, when Congress amended the Clean Air Act in 1990, it mandated that oil companies reformulate gas with oxygenates like MTBE (now being replaced by ethanol). “ South Tahoe shows that you can have juries regulate the content of gasoline,” said Sacripanti, in the New York office of Chicago’s McDermott, Will & Emery. “That’s what the product liability cases do. They attempt to put federal law in the hands of state juries.” Plaintiffs’ lawyers counter that the companies chose the chemical knowing that storage tanks often leak, that MTBE leaches swiftly through soil and is more soluble than other chemicals-making it harder to remove from water-and that it’s extremely slow to biodegrade. They did so because it was cheap, said Sher. “It was a wise choice only if they ignored the pollution cost,” he said. In the second case, an Oakland-based environmental organization settled a suit with eight manufacturers and refiners in 2001 and 2002. It required them to clean up nearly 1,000 sites contaminated by leaking storage tanks or face contempt of court penalties. Communities for a Better Environment v. Unocal Corp. No. 99-7013 (San Francisco Super. Ct.). In the third, Santa Monica, Calif., has basically settled with four defendants. ChevronTexaco and ExxonMobil agreed to pay $30 million and guarantee the cost of treatment-an estimated $500 million, according to Sher, one of the lead lawyers. ARCO agreed to pay $9.7 million and Ultramar another $4.5 million, Sher said, adding that all settlement motions are final and binding, subject only to court approval. He predicted the other six defendants will settle by next month. The City of Santa Monica v. Shell, No. 01CC04331 (Orange Co., Calif., Super. Ct.). Sher is a busy man. He’s also co-counsel in the New Hampshire case and has filed another five MTBE lawsuits. But no one seems busier than Scott Summy, his co-counsel on four of those cases, and on Santa Monica as well. Summy, a partner at Dallas’ Baron & Budd, was also lead lawyer in the Communities for a Better Environment case. He’s been filing furiously, aiming to beat the deadline. All told, Summy said, he represents more than 100 public water providers, many of them cities, in a dozen states. His co-counsel on most of these cases is Robert Gordon of New York’s Weitz & Luxenberg. “Because you’re dealing with America’s drinking water,” he said, “I think this is one of the most sympathetic and compelling cases you can bring on behalf of a plaintiff to a jury. They’re not cases the oil companies want to try.” The immediate battleground in New Hampshire, and elsewhere, is jurisdiction. Last week Eimer and co-counsel removed the case to federal court. Assistant AG Smith said she’ll fight to remand it. Hechler’s e-mail is [email protected].

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