BP, Chevron Units Among Companies Settling N.Y. Gasoline Additive Cases

BP Plc, Chevron Corp. and Royal Dutch Shell Plc units were among dozens of energy companies that agreed to pay $42 million to settle claims brought by communities on New York’s Long Island alleging contamination of water with a gasoline additive.

The companies and the plaintiffs, including water districts and the towns of Southampton, East Hampton and Huntington, filed notice today of their motion to dismiss the lawsuits. The suits, part of larger litigation over methyl tertiary butyl ether, were brought by 23 Long Island districts, said Marc Bern, a lawyer for the plaintiffs, who said the pact’s financial terms were confidential. The total amount was $42 million, according to a person familiar with the settlement.

“Everybody has signed onto the settlement and we’re just waiting for the payments to be made,” Bern, of Napoli Bern Ripka LLP in New York, said in a phone interview. “We’ll be sending the districts their individual settlements in the next two weeks or so.”

More than 70 lawsuits filed by water providers and state and local governments were consolidated before U.S. District Judge Shira Scheindlin in Manhattan for pretrial information- gathering, according to an energy industry website. In October, a federal jury in New York ordered Exxon Mobil Corp. to pay $104.7 million in damages after finding the company liable for poisoning New York City water wells with the additive.

Bill Tanner, a spokesman for Shell, didn’t have an immediate comment. Sean Comey, a spokesman for Chevron, and Daren Beaudo, a spokesman for BP, didn’t immediately return calls for comment.

Future Contamination

Some of the Long Island cases were filed as far back as 2003. Most of the litigation was over threatened future contamination, Bern said. “There’s very little current contamination.”

Additives such as MTBE are chemical compounds that raise the oxygen content of gasoline to make it burn more cleanly and efficiently. The U.S. Congress amended the Clean Air Act in 1990 to require companies to add an oxygenate to gasoline to reduce air pollution.

MTBE renders water undrinkable and can cause nausea and other maladies, the plaintiffs have argued.

In the Exxon Mobil trial, New York City argued that the company could have used ethanol as an oxygenate and instead opted to use MTBE to save money. New York State banned the use of MTBE starting in 2004, as have dozens of other states.

Exxon Mobil has asked Scheindlin to overrule the jury, order a new trial or reduce the damages award.

The case is In Re: Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation, 00-cv-1898, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Thom Weidlich in Brooklyn, New York, federal court at tweidlich@bloomberg.net.

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