City Expected to Settle Biggest Case

By Lookout Staff

Nov. 20 -- Likely ending what has been called Santa Monica's "biggest case ever," the City Council Friday is expected to approve a major settlement in the City’s lawsuit against more than one dozen oil companies charged with contaminating the city's drinking water.

The proposed settlement (which will be taken up at a special 10 a.m. closed session meeting) includes agreements with three oil giants -- Shell, Mobile and Chevron -- which were among the companies that contaminated five of the city's 11 water wells with a gasoline additive that leaked from their underground storage tanks.

Terms of the settlement will be unveiled at a press conference Friday attended by Mayor Richard Bloom and representatives of Shell and Chevron.

"This is a major piece of litigation," Bloom told The Lookout Thursday. "It involves one of the most important environmental issues in the city's history.

" If we're able to resolve it in a way that benefits the rate payers of Santa Monica, then we've done a really good thing," Bloom said.

The settlement comes more than a year after Chevron and Mobile agreed to pay the City $30 million to build and operate a treatment facility to clean up the suspected cancer-causing gasoline additive MTBE.

Under that landmark settlement, if the City prevailed in its suit against the other oil companies charged with polluting the Charnock well field in West Los Angeles, the two oil companies would be repaid a portion of their contribution to restoring the City's drinking water.

Filed in June 2000, the suit, which City officials dubbed Santa Monica's "biggest case ever," came six months after oil company representatives walked out of negotiations with the city.

It was the second suit the City filed since MtBe was discovered in the mid-nineties and the first where the City hired outside attorneys, in this case three powerful firms, to battle the companies.

As part of a 1997 clean up agreement, the oil companies picked up the tab for replacement drinking water, most of which the city has bought from the Los Angeles Metropolitan Water District since 1996.

Shell, however, decided to stop paying the city's water replacement costs when its interim agreement expired, spurring the U.S. Environmental Protection Agency to order the company to continue to pay Santa Monica $3 million a year to replace most of the city's water supply.