Leading the Lawsuit Reform Fight Since 1986!
HB 1927 by Chisum, the Low-Emission Fuels Act (LEFA), is posted for a hearing in House Civil Practices tomorrow, Wednesday, March 14, 2007. The committee will meet at 10:30 a.m. or upon adjournment in E1.010. Please plan to attend and sign a card in support of the bill.
In recent years fuel refiners have been targeted by lawsuits at the state and federal level based on the presence of low emission fuel blends or additives in gasoline. These suits have alleged, among other things, that gasoline containing additives such as MTBE or ethanol is a “defective product,” even though it fully meets the requirements of the federal Clean Air Act and accompanying regulations. These suits have also attempted to apply other theories of liability, such as trespass and public nuisance, to fuel refiners, although their only conduct involved making gasoline precisely the way the federal government mandated that they make it. To date refiners have paid out nearly $300,000,000 in judgments or settlements. These liabilities illustrate the dangerous nature of the U.S. tort system, where a refiner or fuel additive manufacturer can be held liable simply for making and selling a product that is in full compliance with EPA requirements.
These settlements, together with the tens of millions of dollars refiners and additive manufacturers have expended to defend them, increase the cost of gasoline for consumers. Should these lawsuits, which name nearly every fuel refiner in the country as defendants, continue to proliferate (and there are nearly a hundred of them currently pending, and the numbers keep rising), they will also discourage manufacturers of fuel additives and renewable fuels, such as biodiesel, from pursuing new, clean fuel technologies, to the detriment of consumers and the environment. HB 1927 ends this type of costly and frivolous litigation by assuring that the mere use of a federally-mandated fuel additive may not be the basis of a lawsuit.
In 1979 the federal Environmental Protection Agency approved MTBE as a fuel additive to help reduce air pollution by making gasoline burn more cleanly. By 1990 about 25 percent of the gasoline in use nationally contained MTBE. This proportion has increased dramatically since the 1990 Clean Air Act Amendments (CAAA), which required mandated the use of winter oxygenated fuel (Oxy-Fuel) and reformulated gasoline (RFG). Consequently, the use of MTBE rose from approximately 1.4 billion gallons in 1992 to 4 billion gallons in 2000, as refiners fully implemented the Oxy-Fuel and RFG programs.
At the time the CAAA required the increased use of MTBE, EPA had been well aware of the risk of groundwater contamination associated with MTBE spills. On January 22, 1988, EPA added MTBE to its first Drinking Water Priority List, finding that MTBE is relatively water soluble compared to other gasoline components. At the same time, however, numerous studies, including those conducted by the World Health Organization (1999), the International Agency for Research on Cancer (1999), the National Toxicology Program (2000), and, most recently, the European Union (2002), have all concluded that MTBE should not be classified as a probable or known human carcinogen. Moreover, EPA data from 2005 indicates that only 0.4% of the nation’s water supply systems may have MTBE impacts that conceivably could require remediation, and even these have no adverse health effects. Additionally, the U.S. Geological Survey (2002) found that the number of reported detections of MTBE is significantly less than for other contaminants. MTBE is neither widespread in the nation’s public water supply, nor is it associated with any carcinogenic or other threat to public health.
HB 1927 provides that a manufacturer or seller of a fuel additive, fuel blended with a fuel additive, or renewable fuel (such as biodiesel) shall not be liable under any theory of liability if the additive or fuel conforms to all applicable regulations, controls, and prohibitions of the U. S. Environmental Protection Agency (EPA).
The legislation does not restrict, prohibit, or otherwise affect the liability of any person who spills or discharges an additive or fuel into the environment. Such persons could still be held legally responsible for causing any contamination of drinking water, as they currently are. In fact, it should be emphasized that, according to the EPA, more than 95 percent of the remediation costs for contamination caused by leaking underground storage tanks are paid for by parties responsible for the release. The specter of local government and taxpayers funding MTBE cleanup is patently false, and the proposed legislation will do nothing to change that.
Now more than ever, federal, state, and local governments must encourage the use of cleaner, more efficient, and renewable fuels. Frivolous lawsuits against manufacturers of those fuels and fuel additives would create massive uncertainty, discourage investment in new and improved fuel technologies, and threaten the future energy independence of our state and nation. The proposed legislation creates a safe harbor for such investment and technology, without impairing the ability of public and private parties to recover damages for environmental contamination from those who actually cause the harm.
Copyright 2007 Texas Civil Justice League
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