MTBE Update — Maryland AG’s Office Commences MTBE Litigation Against 50 Oil Companies
Just last month, the Maryland Attorney General filed suit in Baltimore City Circuit Court against over 50 petroleum related companies to recover damages and address widespread contamination of Maryland’s waters with methyl tertiary butyl ether (MTBE). MTBE is a chemical compound that was used as a fuel additive in gasoline since the late 1970s to make the fuel burn more cleanly, reducing smog. In the 1990s, MTBE was used specifically to fulfill the oxygenate requirements set by Congress in the 1990 Clean Air Act Amendments. In 2005, Congress removed this requirement and MTBE was phased out and replaced with ethanol.
MTBE readily dissolves in groundwater, spreads rapidly, does not naturally degrade, and resists removal and treatment from groundwater. Even small amounts can cause a very foul odor and taste in water. Moreover, MTBE is now believed to be potentially carcinogenic.
Maryland alleges that MTBE was discharged into the environment from leaking underground storage tanks at service stations and other locations, causing serious groundwater contamination. The State seeks to recover the costs of inspecting and cleaning up MTBE contamination, damages for injury to the State’s water, as well as an injunction that requires the defendants to identify the full scope of contamination in Maryland, test for MTBE in wells, and remove MTBE from the State’s water.
MTBE litigation is not new. In 2008, a group of major oil companies entered into a $423 million settlement to settle over 500 lawsuits brought by water suppliers and users in California and 19 other states over groundwater contaminated with MTBE. In May 2016, a $236 million unanimous verdict by a Merrimack County Superior Court jury that was upheld by the New Hampshire Supreme Court, was declined for further review by the U.S. Supreme Court, bringing the lawsuit originally filed in 2003 against 22 oil companies for adding MTBE into the state’s gasoline finally to a close.
And this past May, the New Jersey Attorney General’s office announced that another oil company had agreed to pay the state $39 million to resolve its liability in a lawsuit that the NJDEP filed back in June 2007 against numerous oil and chemical companies for damages to the Garden State’s ground water as a result of the defendant’s manufacture, blending and distribution of MTBE. The defendants in that case included major petroleum refiners, distributors and sellers of gasoline in New Jersey, and independent chemical manufacturers of MTBE. The $39 million settlement with this one defendant brought the total settlement amount from the New Jersey action to $157 million as of May 2017. Pennsylvania and Puerto Rico are also pursuing similar claims against the petroleum industry.