US Supreme Court Rejects ExxonMobil’s Appeal of New Hampshire’s $236 Million MTBE Verdict

May 16, 2016
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On May 16, 2016, the United States Supreme Court rejected ExxonMobil’s final appeal of the $236 million jury verdict against the oil giant. The Court announced that it will not accept ExxonMobil’s appeal, bringing to an end a lawsuit filed by the State of New Hampshire in 2003. With the Supreme Court’s decision, the State should finally see payment of the jury’s verdict. It is estimated that in addition to the verdict, ExxonMobil will be charged with another $100 million in interest.

Litigation Background – ExxonMobil’s Relentless Effort Strategy

In 2003, the New Hampshire Attorney General, with lawyers from SL Environmental Law Group, sued twenty-two major oil companies for adding MTBE to New Hampshire’s gasoline knowing that it would contaminate the State’s drinking water supplies. Prior to trial, all the defendants except Exxon settled with the State for over $136 million. After ten years of motions and procedural challenges, trial against ExxonMobil began on January 14, 2013. The San Francisco-based law firm SL Environmental Law Group was co-lead counsel with the New Hampshire Attorney General’s Office. On April 9, 2013, after a three month trial – the longest in state court history – a New Hampshire jury took less than two hours to find unanimously that ExxonMobil was negligent in supplying over 2 billion gallons of MTBE gasoline that resulted in widespread contamination of the State’s drinking water. As one juror stated at the time, all 12 jurors felt “very, very confident about our decision.” The Attorney General stated that “by its verdict, the jury validated what we knew – Exxon was aware of the risks of manufacturing MTBE gasoline, but went ahead and added MTBE to New Hampshire’s gasoline.”

ExxonMobil’s effort to force the State to litigate its verdict all the way to the U.S. Supreme Court was not surprising. Following the jury’s verdict, Fadel Gheit, managing director of oil and gas research and a senior analyst at Oppenheimer & Co., told the Associated Press the verdict won’t put a dent in Exxon Mobil’s bottom line. “Exxon will probably make close to a $40 billion profit this year,” Gheit said in 2013. “That’s two days’ work.” He said it’s no surprise that ExxonMobil would take the State’s contamination lawsuit to trial, saying the company “will make you sweat for every dollar you think you’re going to get.” Company leaders view it as a matter of principle, he said.

SL Environmental Law Group’s founder Alexander Leff said “I am extremely proud that we were able to partner with the Attorney General to bring this substantial financial benefit to the State. The combination of the Attorney General’s determination and our ability to bring to bear the resources necessary to battle ExxonMobil has brought about this tremendous victory for the benefit of New Hampshire’s citizens.” Richard Head, who was an Associate Attorney General at the time of the trial and is now a partner at SL Environmental Law Group, said “the jury sent a clear message that the costs associated with the contamination of drinking water should be paid for by those who are responsible for the pollution, not the citizens. It was always the goal of this case to help the State provide access to safe and clean drinking water to its citizens.”

Settlement Funds Are Being Used to Cleanup MTBE

This effort by SL Environmental Law Group and the Attorney General has already provided direct benefits to New Hampshire’s citizens. The settlement money received by the State is being used to cleanup MTBE contaminated sites. The New Hampshire Department of Environmental Services (DES) and the Attorney General developed a Memorandum of Understanding (MOU) outlining a coordinated interdepartmental approach to the expenditure and administration of the funds received under the settlements with the settling oil companies.  DES also established an MTBE Remediation Bureau to implement the new programs. As a result, even without payment of ExxonMobil’s judgment, the settlement money is already flowing into communities directly affected by MTBE contamination.

When ExxonMobil does pay the judgment against it, the State has already taken additional steps to ensure the funds will be used to protect groundwater resources. New Hampshire recently enacted Senate Bill 380 which establishes a statewide groundwater trust fund and advisory commission. The law will ensure that the funds recovered in the lawsuit against ExxonMobil and other suppliers of MTBE gasoline will be administered to provide continual funding for the investigation and remediation of MTBE contaminated groundwater. By creating the MTBE Remediation Bureau and enacting SB 380, the State of New Hampshire has effectively and forcefully silenced ExxonMobil’s claim that the State was simply going to use the litigation funds to pad the State’s general fund. The State has ensured that the funds will be used provide access to safe and clean drinking water now and in the future.

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