Source: New Hampshire Union Leader, January 14, 2013
By: Dave Solomon
Attorneys for Citgo Petroleum Corp. called for a mistrial on Monday only half way into the first day of what many observers believe is the largest civil trial in New Hampshire history.
Superior Court Justice Judge Peter H. Fauver denied the motion, but agreed to address the jury today regarding statements made by the state’s lead attorney in her opening arguments.
The case pits the state of New Hampshire against ExxonMobile and Citgo over the use of the gasoline additive MTBE, which the state alleges has caused widespread groundwater contamination. New Hampshire sued 22 oil and gas companies in late 2003 over MTBE, but settled with all but two in the ensuing years.
The state’s lead attorney, Jessica Grant of the San Francisco law firm Sher-Leff, displayed for the jury several memos and letters, which she said indicated ExxonMobile and Citgo executives were well aware of the dangers posed by MTBE, but continued to manufacture and distribute gasoline containing the toxic chemical for years.
After the lunchtime recess, the lead attorney for Citgo accused Grant of producing “a fabricated document” and making “fraudulent representations to the jury.”
Attorney Nate Eimer, of the Chicago firm EmierStahl, said a memo and attachment that Grant said came from Citgo files, were actually “a fabrication of Ms. Grant’s law partner.”
The first four pages of the document in question were from a letter to Citgo about MTBE, he said, but the rest of the package was “a compilation of documents produced by various parties.”
“There’s nothing nefarious here,” Grant said. “Both documents were on our exhibit list. At worst, there was a transcription error.”
Attorneys for Citgo and Exxon also challenged a statement by Grant to the jury regarding a possible witness. When they told the court they had no intention of calling that witness, Grant said she would, at which time the oil company attorneys pointed out the witness was not on the state’s witness list either.
The judge agreed the issue would have to be cleared up. He asked attorneys to draft wording to “correct something that may have been said to the jury that was not accurate.”
The combative exchange over documents and witnesses came at the end of a long day, which saw Grant and one attorney for Exxon complete opening arguments. Exxon still has another attorney to address the jury today, along with Eimer on behalf of Citgo.
The fact that it is likely to take two days just to complete opening arguments indicates how complicated the trial will be. Observers expect it to last four to six months. Although it’s a Superior Court Case, it was moved to the federal courthouse to prevent a backlog in state criminal and civil cases.
Scope of contamination
After a presentation on the dangers of MTBE, Grant describe the scope of contamination in the state and the estimated cost of cleanup. She said the state has already spent $142 million in MTBE cleanup, and has barely scratched the surface, with 228 high-risk sites in the state and an estimated 5,590 contaminated wells.
“We know that more than 5,000 wells are contaminated,” she told the jury, “but we have to go out and test them to find out where they are.”
The cost of that testing and subsequent remediation are at the heart of the claim against the oil companies. Grant said testing all the wells in the state will cost $305 million, treating those that are contaminated would cost another $150 million and cleaning the high-risk sites would cost $218 million. Add that to the $142 million the state has already spent and the total claim against the 22 oil companies is greater than $800 million.
The state has already collected about $120 million in previous settlements, and has apportioned the liability on the basis of market share in the state.
Since Exxon controlled 30 percent of the gasoline market in New Hampshire, the state is seeking 30 percent of $800 million, or about $245 million from Exxon.
Citgo had a much smaller share of the market, somewhere between 3 percent and 9 percent depending on the year, and is being sued for a smaller amount.
“The evidence will show that the defendants knew or should have known that adding MTBE would cause widespread contamination in New Hampshire,” Grant said.
Representing Exxon is James W. Quinn of Weil, Gotshal & Manges, an international law firm with offices in Boston.
In his opening argument, he used a variety of documents obtained from state files to demonstrate that the state was well aware of the dangers of MTBE, but made a policy decision to allow the reformulated gas into the state as a way of coping with EPA mandates to deal with air pollution in the state’s most populous counties.
The state had alternatives, he said, like mandatory emission testing, which was not as politically palatable.
“MTBE, as it turned out, was the most effective way to address air pollution,” he said. “That’s why it got added to gasoline … There were great benefits to MTBE, but there were some downsides and all of those downsides were known to everyone.”