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Chevron Loses Oil Spill Verdict

Jurors order the company to pay $41 million to plaintiffs from a Montana town.

August 20, 2004|From Times Wire Services

ChevronTexaco Corp. has been ordered to pay $41 million to about 80 residents of a tiny town in northern Montana due to damage caused by a leaking underground pipeline.

The leak occurred in 1955 near a now-closed refinery in the farming town of Sunburst.

A jury in Great Falls, Mont., awarded the residents $16.1 million in compensatory damages Wednesday and $25 million in punitive damages Thursday.

"We were very pleased with the verdict because ... it will allow the Sunburst plaintiffs to clean up the contamination," said David Slovak, an attorney for the plaintiffs.

The class-action lawsuit revolved around a 19-acre underground plume of contaminants caused by a pipeline leak at the Sunburst Works Refinery. Plaintiffs cited a variety of health problems, from arthritis and miscarriages to skin conditions and mononucleosis, in connection with the plume.

"There is no health risk to the people of the town of Sunburst associated with the contamination under the refinery," ChevronTexaco spokesman Michael Barrett said in a statement. "We sympathize with those residents who have been concerned about the loss of any value in their property."

He said Chevron had been trying since 1989 to remediate the damage caused by the spill.

Barrett said the oil company would appeal the verdict.

State District Judge Thomas McKittrick must hold a hearing to determine whether the punitive damages are reasonable.

Sunburst, situated along Interstate 15 about 10 miles south of the U.S.-Canada border, has a population of about 400.

The 82 plaintiffs, including the Sunburst School District, filed the lawsuit in 2001. The suit argued that Chevron's plan to monitor the groundwater while nature continued to filter out the chemicals would take too long.

The plaintiffs preferred that the company extract groundwater and treat it.

Shares of San Ramon, Calif.-based ChevronTexaco fell $1.07 on Thursday to $93.10 on the New York Stock Exchange.

Associated Press and Bloomberg News were used in compiling this report.

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