ExxonMobil, Esso to Pay Puerto Rico $25M Settlement in Chemical Water Pollution Case

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Two major oil companies are set to pay Puerto Rico $25 million to settle claims they polluted the island’s water with a chemical compound added to gasoline. 

The deal between the territory and oil companies ExxonMobil Corp. and Esso Standard Oil Co. was approved by U.S. District Judge Silvia Carreno-Coll in a Puerto Rico federal court Wednesday, Law360 reported.

The settlement ends part of a 14-year legal battle over the alleged contamination of several hundred sites in Puerto Rico with the chemical methyl tertiary butyl ether (MTBE).

MTBE is a chemical compound that was used as a fuel additive in gasoline since the late 1970s. The chemical can easily contaminate drinking water, according to other ExxonMobil MTBE lawsuits. It easily dissolves in groundwater, spreads rapidly, does not naturally degrade, and resists removal from the groundwater. It can reportedly cause a foul odor and taste in water, and scientific evidence has raised concerns that the chemical can cause cancer.

The Puerto Rico lawsuit alleged ExxonMobil and Esso should be responsible for paying to clean up the chemical contamination of hundreds of sites on the archipelago, plus pay damages.

The settlement will see the $25 million paid out by Exxon and Esso in five installments, Law360 reported. An initial $5 million payment will be made 30 days after the settlement goes into effect, with the following four $5 million payments made quarterly. 

This case is just one in a national multidistrict litigation. Puerto Rico first filed in 2007, and cases were brought under one multidistrict litigation in 2016. 

The complaints were brought under the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Puerto Rico Environmental Policy Act. 

ExxonMobil is also facing class action from its investors. In a February class action lawsuit filed on behalf of all Exxon investors, the plaintiffs accused the company of falsely reporting its assets, leading to plummeting stock prices once the deception was revealed.

The lawsuit contends that Exxon overinflated its valuation of the region by $20 billion, overestimating how quickly it could drill for oil and gas and increase production.

What do you think of this settlement? Let us know in the comments! 

Puerto Rico is represented by Elise M. Keys, Justin J. Arenas, Scott E. Kauff and John T. Dema of the Law Offices of Jon K. Dema; Orlando H. Martinez-Echeverria of the Orlando H. Martinez Law Office; John D.S. Gilmour, William J. Jackson and William C. Petit of Kelley Drye & Warren LLP, and Duane Miller and Michael Axline of Miller Axline & Sawyer.

The Puerto Rico Exxon Esso Settlement is Commonwealth of Puerto Rico v. Shell Oil Co. et al., Case No. 3:07-cv-01505, in the U.S. District Court for the District of Puerto Rico.

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