By Mica Rosenberg
NEW YORK, July 26 A U.S. appeals court on Friday
upheld a ruling against Exxon Mobil Corp ordering the
company to pay $105 million in damages for polluting New York
City's groundwater with a toxic gasoline additive.
The U.S. Second Circuit Court of Appeals affirmed a 2009
jury verdict that found Exxon contaminated water supply wells
when methyl tertiary butyl ether (MTBE) leaked from its
underground storage tanks in the borough of Queens.
The appeals court rejected Exxon's arguments that it was
required to use the additive under the federal Clean Air Act.
Exxon said it would appeal to the U.S. Supreme Court.
An oxygen-containing substance that is added to gasoline to
promote more complete combustion and reduce air pollution, MTBE
was one of several additives recommended by regulators to reduce
It has now largely been phased out of the U.S. fuel supply
because of the danger to groundwater.
"MTBE has not been used for seven years," said Exxon
spokesman Todd Spitler. "Cleanup successfully continues."
New York City claimed Exxon went ahead and used the chemical
in the 1980s through the first half of the 2000s despite
warnings from its own scientists and engineers that it could be
harmful in areas that relied on groundwater for drinking.
MTBE has been identified as an animal carcinogen and a
possible human carcinogen and causes water to smell foul and
"Yet again, this company, which carelessly polluted our
groundwater supply, has been put in its place by a court," New
York City Mayor Michael Bloomberg said in a statement. "This
should be a warning to any company whose actions threaten New
Yorkers' health and quality of life."
The water wells in southeast Queens that were contaminated
serve as a backup supply for the city's drinking water when the
reservoirs upstate go offline because of repairs or droughts.
The city is planning to install and upgrade treatment
stations to remove the MTBE to ensure the drinking water meets
the same standards as the upstate system, the New York City Law
Department said in a statement.
"What's at issue here isn't just the choice to use MTBE,
it's the failure to warn people and the failure to take the
steps that ... would have avoided or mitigated the environmental
impacts of it," said attorney Victor Sher of the San
Francisco-based law firm of Sher Leff that represented the City
of New York.
Judges in the Second Circuit said the 11-week New York trial
in 2009 was meant to serve as a bellwether case to provide
guidance for other MTBE complaints that have been brought around
In April, a New Hampshire jury ruled that Exxon would have
to pay $236 million for MTBE contamination of drinking water in
the state. The company said at the time it had strong arguments
for an appeal.
Other major oil companies, including Royal Dutch Shell PLC
, BP PLC and Chevron Corp, previously
settled MTBE claims with the city for a total of $15 million,
the law department said.