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Md. board approves outside counsel for MTBE lawsuits

ANNAPOLIS — The Board of Public Works approved a contract to hire a consortium of outside attorneys to represent the state against petroleum companies as Maryland seeks to recover costs for the testing and cleanup of a widely used gasoline additive that has contaminated well water.

The board approved the contract with the group of three firms, including Rockville-based John K. Dema, during its Wednesday meeting. During that meeting, the board also approved a controversial rule change that will now allow counties to use state school construction and renovation funds to pay for temporary window air conditioning units.

“I have no problem approving this item,” said Maryland Treasurer Nancy K. Kopp said of the legal contract. “I think this is the major item, actually, more so than school construction on this agenda. I am very concerned that we don’t have a handle, and we won’t until we go through a process, on the impact of the MTBE on Maryland and Maryland citizens. It’s toxic.”

Kopp, along with board members Gov. Larry Hogan and Comptroller Peter V.R. Franchot, voted to approve the contract.

The contract with Dema and Berger & Montague, P.C. of Philadelphia, Pennsylvania, and  Miller & Axline, P.C. of Sacramento, California, grants the three firms a sliding scale of up to 22.5 percent for recovery of damages up to $100 million to 8 percent for $1 billion and above. Both of those fee levels are set for after the start of a trial, with lower percentages awarded for settlements before cases reach the discovery or trial phases.

“Maryland has been looking at this question for three or four years now and has only now brought it to this point,” said Matthew Zimmerman, an assistant attorney general. “The contaminant is no longer sold, it’s no longer distributed but it’s not gone and it won’t be gone unless the state has the resources, the money, the personnel to address the problem — find out how widespread — and take legal action where necessary.”

Methyl tertiary butyl ether, more commonly known as MTBE, was added to gasoline more than 20 years ago as a way to help fuel burn cleaner during summer months and ease smog issues. But the odorless, colorless chemical was found to dissolve easily in water and soon was identified as a culprit in widespread contamination of groundwater including private drinking wells.

“We have investigated a number of areas where there have been gas leaks and found there is ground water contamination, drinking water contamination, and we propose to pursue that litigation with this contract,” Zimmerman.

In 2001, states and municipalities began filing lawsuits seeking to recover the costs of testing and cleanup.

“This chemical moves with ground water, bonds with groundwater and does not break down nor degrade,” Zimmerman said. “Basically, it’s become ever more widespread.”

New Hampshire, New Jersey, Pennsylvania Vermont and Kentucky have all pursued legal actions against petroleum companies. Zimmerman said Maryland has similar geology to those other states.

There are 400,000 private drinking wells in Maryland. Add to that 3,600 public drinking water systems. Zimmerman said have not all been adequately tested because of a lack of money and resources.

In New Hampshire, state officials determined that roughly 9 percent of its drinking water wells were contaminated with the chemical and reached a settlement of $136 million with petroleum companies, except for Exxon. The state took Exxon to court and won a judgment of $236 million against the company.

Zimmerman said the Maryland expects to see the same rate of contamination of wells.

“Historically, these defendants as a group have settled out of court with the exception of Exxon,” Zimmerman said. “Exxon has fought to the end. The others have not.”

Zimmerman said the contract with the consortium that will represent Maryland is comparable to those in other states.

On the same agenda, the board also unanimously voted to approve a change in rules that will allow local jurisdictions to use state school construction and renovation money to purchase and install temporary window air conditioning units.

The change comes after years of complaints by Franchot, who has used his seat on the board as a bully pulpit from which to castigate elected officials — primarily Baltimore County Executive Kevin Kamenetz — for failing to address overheated classrooms.