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Bayway refinery. Photo: Carmen Natale/ALM

Three major petroleum conglomerates—Shell, BP and Sunoco—have agreed to pay New Jersey a total of $196.5 million to settle claims that they damaged the state’s environment and natural resources by producing gasoline laced with the additive MTBE.

According to an announcement on Monday by New Jersey Attorney General Gurbir Grewal, the payouts by the oil and chemical companies mean that New Jersey has now secured settlements of more than $350 million from various defendant companies named in multidistrict litigation over MTBE—methyl tertiary butyl ether—contamination.

“These are important legal settlements on behalf of New Jersey citizens—not only in terms of the dollars, but in terms of sending a message that we are committed to working with DEP [the state Department of Environmental Protection] to protect our state’s natural resources and hold accountable companies that pollute,” Grewal said in a statement.

The state has been pursuing the litigation for more than a decade, claiming that waterways throughout New Jersey have been contaminated by gasoline containing MTBE that was supplied to the market by the Bayway Refinery in Linden, New Jersey.

The DEP first filed suit in state court in 2007 against ConocoPhillips Co., which was then the owner of the Bayway Refinery, and nearly 50 other companies, under state environmental laws.

The case was later consolidated by the Judicial Panel on Multidistrict Litigation in the U.S. District Court for the Southern District of New York, where a related case against Chevron was dismissed in 2014.

U.S. District Judge Vernon Broderick of the Southern District of New York is presiding over the litigation. The defendants include major petroleum refiners, distributors and sellers of gasoline in New Jersey, as well as independent chemical manufacturers of MTBE, according to Grewal’s office.

In May 2017, the Attorney General’s Office announced that it had reached a $39 million consent agreement with Phillips 66 Co. in the MTBE litigation.

The state continues to pursue its MTBE damage claims against the remaining named defendants in the litigation who haven’t settled, the office noted.

The state pointed out Monday that those defendants include ExxonMobil.

Representatives for Shell, BP and Sunoco could not be immediately reached for comment on Monday.

According to Grewal, Sunoco—including Sunoco Inc. and Sunoco Inc. (R&M)—has already paid the state $64 million to resolve its liability for MTBE damages. Meanwhile, BP—including BP America Inc., BP Amoco Chemical Co., BP Corporation North America Inc., BP Products North America Inc. and Atlantic Richfield Co.—has agreed in a separate settlement to pay $64 million, and has already paid the state $32 million. And Shell—including Equilon Enterprises, Motiva Enterprises, Shell Oil Co., Shell Oil Products Co. and Shell Trading (US) Co.—has agreed to pay $68.5 million.

The state was represented by, among other attorneys, outside counsel Leonard Kaufmann, a partner at Cohn Lifland Pearlman Herrmann & Knopf in Saddle Brook, New Jersey. He declined to comment Monday.

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Jason Grant

Jason Grant is a New York-based litigation reporter for the New York Law Journal and Law.com, and a former practicing attorney in Manhattan. Contact Jason at jgrant@alm.com. On Twitter: @JasonBarrGrant

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