Maryland Appeals Court Vacates Bulk Of $147 Million Exxon Pipeline Leak Award

ANNAPOLIS, Md. - (Mealey's) The Maryland Court of Special Appeals on Feb. 9 vacated much of a $147 million jury award to homeowners whose groundwater was contaminated with benzene and methyl tertiary-butyl ether (MTBE) by a 26,000-gallon gasoline leak at an Exxon Mobil Corp. station (Exxon Mobil Corporation v. Paul D. Ford, et al., No. 1804, September Term, 2009, Md. Spec. App.).

In a 322-page decision comprising five separate opinions, a majority of the panel ruled that  Judge Maurice W. Baldwin of the Baltimore County Circuit Court properly allowed the jury to consider mental stress, which comprised more than $70 million of the total award.  However, a different majority found insufficient evidence of emotional distress for 53 of the Jacksonville, Md., residents and imprecise jury instructions for the rest.  The 53 residents will take away nothing for emotional distress, while the other group will be allowed to assert their emotional distress claims at a new trial. 

The appeals court also struck down damages for medical monitoring, saying, "There is no toxic tort (or any tort) case in Maryland that permits recovery of damages for the present fear of contracting cancer when the plaintiff has not suffered a present physical injury."  The only damages allowed largely intact were for diminution of property values. 

88 Households 

The plaintiffs represent more than 88 households in the Four Corners neighborhood of Jacksonville, north of Baltimore.  Exxon Mobil did not dispute that a drilling accident that went undetected for 37 days caused a leak at the Jacksonville Exxon station, discharging more than 700 gallons of gasoline per day before it was shut off in February 2007.  

The plaintiffs sued in the Circuit Court, asserting claims for strict liability for an abnormally dangerous activity, private nuisance, trespass, negligence and fraudulent concealment.  ExxonMobil accepted liability for all of the claims except fraudulent concealment, the court said, disputing only causation and damages. 

Trial began in October of 2008 and continued for five months, with the jury rejecting the fraudulent concealment claim and a request for punitive damages.  The $147 million compensatory award included diminution in value, emotional distress, fear of cancer and the cost of medical monitoring.  Exxon filed post-trial motions requesting judgment notwithstanding the verdict, a new trial or remittitur.  After a hearing, the Circuit Court ordered remittitur as to the diminution in value awards to four households that had sold their homes since the leak.  The court denied the remaining motions. 

The panel consisted of Judges James R. Eyler, Deborah S. Eyler, Timothy E. Meredith, Patrick L. Woodward, Robert A. Zarnoch, Alexander Wright Jr., Kathryn Grill Graeff, Michele D. Hotten and Shirley M. Watts.  Chief Judge Peter B. Krauser, and Judges Albert J. Matricciani Jr. and Christopher B. Kehoe did not participate in the argument or decision. 

The plaintiffs are represented by Stephen L. Snyder of The Snyder Litigation Team in Baltimore.  Exxon is represented by James F. Sanders of Neal and Harwell in Nashville, Tenn. 

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