Source: http://insurancenewsnet.com, June 19, 2014
Attorneys representing the Commonwealth of Pennsylvania claim that gasoline containing the additive known as MTBE caused widespread pollution and harm to Pennsylvania’s waters.
The attorneys on Thursday filed separate lawsuits in the Philadelphia Court of Common Pleas seeking relief and reimbursement from major oil companies and for the alleged misuse of the Pennsylvania Underground Storage Tank Indemnification Fund.
Methyl tertiary butyl ether, a chemical additive that oil companies manufactured and used in gasoline, was distributed and sold throughout Pennsylvania beginning in the 1970s. It was phased out in Pennsylvania in 2005, and largely replaced by ethanol.
The first suit, filed by Attorney General Kathleen Kane and Gov. Tom Corbett’s General Counsel James Schultz, seeks to recover millions of dollars that the state paid to clean up MTBE groundwater pollution. The lawsuit also seeks monetary damages for the loss of groundwater use and damages for the water resources. It also seeks injunctive relief, fines and penalties relating to unfair and deceptive trade practices and marketing of MTBE and MTBE gasoline.
“When we entrust the Commonwealth to the hands of others we expect that they will care for it as we do, however, when companies pollute something so precious as our water this cannot and will not be overlooked,” Kane said.
“MTBE-related spills over the past 20 years have cost Pennsylvania hundreds of millions of dollars,” said General Counsel Schultz. “We cannot take the health of Pennsylvania’s waters for granted and their protection must remain our utmost priority.”
Since 1994, more than 3,000 gasoline releases have occurred from underground storage tanks at gas stations and other petroleum facilities located in every Pennsylvania county. More than 75 percent of these spills and leaks involved MTBE gasoline, which is substantially more difficult to clean up than MTBE-free gasoline.
The lawsuit alleges that the oil companies knew of MTBE’s unprecedented risk to groundwater, but nevertheless used it as an additive in gasoline sold in Pennsylvania. It also details how MTBE is more persistent and mobile in groundwater, which increases the size, complexity, duration and cost of MTBE gasoline clean-ups, many of which continue to this day. Minute amounts of MTBE render water non-potable due to foul and putrid smell and taste.
A number of other states and governmental bodies are suing or have sued oil companies for MTBE groundwater pollution, with substantial recoveries achieved.
A second lawsuit filed by Kane and Schultz seeks reimbursement of funds, initially disbursed by storage tank fund to 36 named defendants, to clean up gasoline spills, regardless of whether they were MTBE related or not.
The storage tank fund lawsuit alleges that, the defendants had numerous releases prior to 1994 which were ineligible for reimbursement from the fund and that the defendants collected in excess of $1 billion under their commercial, captive and mutual insurance policies for the same corrective action costs covered by the fund.
The storage tank fund lawsuit further asserts that the defendants chose to not disclose what they knew about the pre-1994 releases and that they failed to inform the state about their insurance recoveries. The Commonwealth alleges that these “double-dip” payments are prohibited by law and that the oil companies must disgorge the payments.