Products Liability Law Daily $11M settlement proposed in Chevron groundwater contamination suit
Monday, January 7, 2019

$11M settlement proposed in Chevron groundwater contamination suit

By Kathleen Bianco, J.D.

Chevron U.S.A. Inc. and Union Oil Co. of California (Chevron defendants) have agreed to pay $11 million to settle a suit filed by the Orange County Water District (OCWD) seeking to recover damages for possible soil and groundwater contamination. The proposed settlement, which has been submitted to a California federal judge for a determination of good faith, addresses the claim as it relates to eight specific sites for which Chevron and Union Oil are defendants (Orange County Water Dist. v. Unocal Corp., January 3, 2019).

In 2003, OCWD filed suit against certain members of the oil industry, including Chevron and Union Oil, seeking to recover damages for possible soil and groundwater contamination caused by the release of gasoline containing methyl tertiary butyl ether (MTBE) from gasoline station sites. OCWD alleged that gasoline containing MTBE was released from gasoline station sites within or near the boundaries of the water district and contaminated and/or threatened to contaminate the soil, soil-vapor, surface water, and/or the groundwater basin managed, owned, operated, used, and/or protected by OCWD. The suit asserted causes of action for products liability, negligence, trespass, nuisance, and violations of the Orange County Water District Act.

Terms of proposed settlement. If approved, the settlement agreement would release the defendants from all claims arising from the release of covered substances, as defined in the agreement, at the eight sites identified in Chevron’s Motion for Order Determining Good Faith Settlement in exchange for a payment of $11 million to the OCWD. The agreement also includes a waiver from section 1542 of the California Civil Code, such that each party accepts and assumes the risk, if the facts with respect to the settlement agreement are found to be other than or different from the facts now believed to be true. Furthermore, the proposed settlement does not constitute an admission of liability, but rather a compromise of disputed liability.

The case is No. 8:03-cv-01742-CJC-DFM.

Attorneys: Daniel Boone (Miller Axline & Sawyer) for Orange County Water District. Anne M. Voigts (King and Spalding LLP) for Union Oil Co. of California. David L. Schrader (Morgan Lewis and Bockius LLP) for Chevron USA Inc. and ChevronTtexaco Corp.

Companies: Orange County Water District; Union Oil Co. of California; Chevron USA Inc.; ChevronTexaco Corp.

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