Jury Rules Against
ChevronTexaco
In Cleanup Suit
By
EMILY CHASAN
Staff
Reporter of THE WALL STREET JOURNAL
August 20, 2004; Page A2
In a potentially worrisome decision for the
energy industry, a Montana jury ruled that ChevronTexaco
Corp. must pay $40.3 million for environmental damage
resulting from a gasoline pipeline in 1955.
The case, which centers on remaining
underground contamination at the old Sunburst Works refinery
in the central Montana town of Sunburst, raises questions
about the liability of companies for defunct refineries. Since
the Comprehensive Environmental Response, Compensation and
Liability Act, also known as the Superfund law, became federal
law in the 1980s, companies have been held liable for leftover
contamination at defunct refineries.
When they filed the suit in 2001, residents
of Sunburst and the farming community's school district,
claimed ChevronTexaco hadn't adequately cleaned up the oil
spill and that leftover toxins were harming public health and
property values. The company said it pumped the ground clean
for the two years following the leak in 1950s, and it
continues to monitor pollution levels there. It said the site
poses "no health risk" to the community and that
state regulators have agreed with that assessment.
The jury, in Montana's Eighth Judicial
District court in Great Falls, Mont., late Wednesday awarded
the case's plaintiffs $15.3 million in compensatory damages
and $25 million in punitive damages. Beyond that, legal
experts say the decision could leave the door open for similar
litigation elsewhere, at least in Montana, which has more than
200 Superfund sites.
ChevronTexaco said it would appeal.
Lawyers for the plaintiffs said they hope the
money would be used to speed up cleaning efforts. "It
might take 100 years of effort to clean it up naturally, but
maybe just 10 to 30 years by an active cleanup," said Tom
Lewis, an attorney for Lewis, Slovak & Kovacich, P.C., in
Great Falls, Mont.
In the past, experts say, few courts have
landed on this side of the issue, and further impact will be
based on the appealed decision. Other companies should
"carefully consider whether they need to continue
cleaning up their releases" even if their experts and
state agencies say there is little left to clean, says Lee
Paddock, a professor at Pace Law School in New York.
