Witnesses testify in STPUD’s MTBE contamination lawsuit | TahoeDailyTribune.com

Witnesses testify in STPUD’s MTBE contamination lawsuit

Hema Easley, Tahoe Daily Tribune

Attorneys representing South Tahoe Public Utility District in an MTBE contamination lawsuit are trying to prove negligence by gasoline refiners and distributors caused the fuel additive to leak into Lake Tahoe’s underground wells, contaminating the water.

So far, 15 witnesses have been called to back allegations.

Vic Sher, one of three attorneys representing STPUD, refused to give details of the testimony or characterize the trial. He said between 10 and 15 more witnesses will be called to testify in the next two weeks, after which time, the prosecution will bring in witnesses.

“It is progressing as we expected. Evidence is being presented,” said Sher of the Sacramento-based Miller, Sher and Sawyer law firm. He said giving details of the testimony would be inappropriate while the trial is in progress.

The lawsuit stems from a 1997 incident in which eight wells at Lake Tahoe’s South Shore were found to be contaminated with methyl tertiary butyl ether, which allegedly leaked from underground storage tanks. The contaminated wells, in addition to four wells in close proximity, were shut down.

This dropped the number of operating wells in the district to 22, making it difficult for the district to meet peak summertime demands, according to STPUD.

In November 1998, STPUD filed a lawsuit claiming 31 defendants — ranging from big oil companies to South Shore gas owners — sold MTBE in South Lake Tahoe when they knew, or should have known, that the gasoline additive would reach groundwater and contaminate public water supplies.

An engineering firm hired by STPUD to estimate the damage caused by MTBE reported it would take more than $50 million and decades of restoration work to undo the damage.

MTBE is an oxygenate used to make fuel combust more efficiently. It is a suspected cancer-causing agent, and at low levels of contamination, it renders water undrinkable. MTBE-tainted water smells and tastes like turpentine.

Since the lawsuit was filed, all but six of the defendants have settled out of court with STPUD. Gasoline refiner Chevron, one of the defendants, agreed to pay STPUD $10 million as its share in the MTBE contamination lawsuit. Exxon Mobil Corp. agreed to pay $12 million last year, while Atlantic Richfield Co. and local service station owners paid $6 million. Unical paid $3.25 million.

All together, STPUD has received $31.25 million in out-of-court settlements. No specific dollar amount was listed in the lawsuit, but the district said it sought millions of dollars in compensatory damage needed to investigate and treat the water supply. The district also sought punitive damages.

“It’s a precedent-setting case,” said Dennis Cocking, information officer for the district. “The fact that we have settled for $32 million shows that we have a very strong case.”

He said organizations in similar situations are waiting to see the outcome of the case before deciding what course of action to take.

Defendants refusing to settle out of court are Shell Oil, Tosco, Lyondell Chemical Co., Ultramar, Tahoe Tom’s and Terrible Herbst.

Lyondell Chemical Co., an MTBE producer and a subsidiary of ARCO, says it neither manufactures, sells, transports nor stores MTBE-blended gasoline, and therefore was unfairly named in the lawsuit.

The accusations “do not involve our company or our product. We have a strong case,” said David Harpole, spokesman for Lyondell.

However, STPUD said all the 31 defendants are responsible for undoing the damage they knowingly or unknowingly caused as a result of the MTBE leakage. An out-of-court settlement does not absolve them of the responsibility to clean groundwater.

“They are still on the hook for cleaning up the mess in the groundwater. It’s not our job,” Cocking said.

Money received in out-of-court settlements will go toward cleaning the contaminated wells, said Cocking. The defendants must pay to clean other water sources which may be contaminated by MTBE, he said.

“Customers of STPUD shouldn’t have to bear a dime of the cost of cleaning up,” Cocking said.

The liability phase of the lawsuit, in which witnesses are called and cross-examined to establish the liability of the defendants, is expected to end by Christmas, Sher said. The second part of the trial, the penalty phase, which includes the final arguments and the jury’s decision, is likely to end by April, he said.

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