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ExxonMobil to Pay $105M for Polluting NYC Water

(CN) - A federal jury found ExxonMobil liable for poisoning New York City groundwater with the gasoline additive MTBE and ordered the oil company to pay the city nearly $105 million in damages. But U.S. District Judge Shira Scheindlin declined to award punitive damages, saying the contamination was not in the city's active water supply.

The additive methyl teriary butyle ether, or MTBE, was found in six wells in the Jamaica section of Queens. Those drinking wells had been designated for emergencies.

The city said Exxon ignored reports by its own scientists and engineers warning of possible health concerns and urging the company not to use MTBE near groundwater used for drinking.

The jury found Exxon guilty of failing to warn government agencies and the public that it had added MTBE to the gasoline.

But Judge Scheindlin said the city failed to present evidence "to establish the degree of malicious, reckless or wanton conduct necessary to support an award of punitive damages."

She also said awarding punitive damages would not serve as a deterrent, because MTBE has been outlawed in New York since 2004. It's currently banned in 20 states.

The city didn't present evidence of any major spills at the station in Queens, rather "the case against ExxonMobil is primarily based on its role as one of the many suppliers of MTBE containing gasoline to the New York harbor over a lengthy period of time," Judge Scheindlin wrote.

Thirty-three oil companies had already settled similar claims with the city. Exxon was the holdout defendant.

MTBE helps gasoline burn more cleanly and reduces tailpipe emissions. But a former director of Exxon's research and environmental health division revealed during cross examination that concerns about MTBE went back to the 1980s.

Numerous Exxon employees claimed that gasoline additives, including MTBE, "might render water undrinkable by humans." They informed Exxon managers that it has "low taste and odor thresholds." The additive purportedly tastes like turpentine.

The parties "vehemently disagree" over its impact on human health, the ruling states. The city said the National Science and Technology Council found that "MTBE is a known animal carcinogen and ... had the potential ... to be a human carcinogen." It purportedly can also cause dizziness, nausea and nervous-system disorders.

The jury found Exxon responsible for product liability, failure to warn people about the dangerous nature of its product, trespass, public nuisance and negligence.

Exxon said it was disappointed with the verdict and was considering its legal options, as it shouldn't have to pay for someone else's contamination.

The city said it plans to build a water treatment plant in Queens called Station 6 that will clean 10 million gallons per day. It said the water from the wells will be ready within 15 to 20 years as a back-up source for drinking water.

"Our water supply is one of our most vital resources, and we will work to protect it and go after those who damage it," New York City Mayor Michael R. Bloomberg said in a statement.

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