Exxon Seeks to Overturn $1.5 Billion UST Verdict

Company says ruling about leak unsupported by the facts, law

HOUSTON -- Exxon Mobil Corp. said it hopes to overturn on appeal a verdict that included $1.5 billion in damages awarded by a Maryland jury this week for an underground storage tank (UST) gasoline leak that contaminated local drinking water, reported The Wall Street Journal.

Lawyers who handle similar cases were stunned by the size of the verdict and said it likely will be reduced on appeal, said the report. The verdict--believed to be the largest ever for a case of underground contamination from a gas station--suggests juries are unwilling to be lenient on pollution, [image-nocss] theJournal said.

"The jury was expressing its outrage for paying $4 a gallon," Robert Bassman, general counsel for the Petroleum Marketers Association of America (PMAA), told the newspaper.

Exxon, in a statement, said it will appeal the jury awards. "We are obviously disappointed at this result, which we believe is unsupported by the facts and the law," an Exxon spokesperson said in a statement. "As soon as the leak was discovered, we immediately took responsibility and, sparing no expense, began cleanup activities."

A Maryland Department of the Environment investigation found that the leaking 12,000-gallon tank was refilled several times after the leak began. The plaintiffs' complaint alleged that the independent station owners continued "business as usual" after the leak was discovered.

Bassman said that he does not expect any final judgment for years.

The Baltimore County jury ordered Exxon to pay more than $1.5 billion in damages--two-thirds in punitive damages--from a 2006 leak that lasted 37 days and released more than 26,000 gallons of gasoline into the groundwater in the area, which has no public water and depends on wells for drinking water. The plaintiffs in the case were 160 families and businesses in rural Maryland. The jury awarded compensatory damages for diminished property value, fear of cancer, loss of use of the area, fear of the loss of property value and for medical monitoring costs.

"This has got to be clearly the largest [UST] verdict ever," Channing Martin, head of the energy and environmental law section at Richmond, Va., law firm Williams Mullen, told the paper. He said he was astonished by the size of the verdict, because Exxon acknowledged responsibility and acted swiftly to remediate. "This is not a situation where you have illnesses reported throughout the community," he said. "The release was detected 37 days after it happened."

Joseph Freudenberg, a partner at Dilworth Paxson LLP and former senior counsel at Sunoco Inc., told the Journal, "There is no question the compensatory and punitive-damages verdicts were a message. Juries are not willing to accept major corporations that, in their view, do not do their duty to the community. Exxon, in particular, has an additional burden when you see quarter after quarter of billion-dollar earning results that they are 'getting away with something'."

In an earlier case brought by different households, the jury awarded $150 million in compensatory damages, but not punitive damages. Exxon Mobil is also challenging that verdict, said the report.

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