LEGAL NEWSLINE

ANNAPOLIS, Md. (Legal Newsline) -- The Maryland Court of Appeals on Tuesday threw out claims of fraud against ExxonMobil Corp. and reversed $1 billion in judgments against the company over an underground gasoline leak.

The state's high court, in one opinion, threw out $1 billion in punitive damages from a 2011 verdict.

In a separate opinion, the Court rejected some claims from a 2009 case in which $150 million was awarded to a group of plaintiffs, and ordered some of those claims be returned to Baltimore County Circuit Court for trial.

The Court ruled that the plaintiffs in the two cases -- hundreds of Jacksonville-area families and businesses affected by the 2006 leak -- could not collect for the cost of medical monitoring or emotional distress -- in this case, for fear of contracting cancer and fear of loss of property value.

"Appellees attempt to paint Exxon as attempting intentionally to deceive Jacksonville residents at every turn with a callous disregard for their health and safety, yet provide little but speculation as to Exxon's actual knowledge during the remediation process," Judge Glenn T. Harrell Jr. wrote for the Court in its first opinion.

"Certainly, Exxon could have done a better job communicating with residents of the Jacksonville area, reduced errors and described more clearly the investigatory process. That Exxon's efforts were imperfect, however, does not rise to fraud."

The two lawsuits stemmed from a leak of about 26,000 gallons of gasoline from the underground tanks at Exxon's fueling station located in Jacksonville.

The community -- the site of multiple gas leaks over the years -- is reliant largely on private wells, rather than municipal supply sources, for its potable water.

Following the gas release into the underground aquifer serving the wells, one group of 466 Jacksonville residents and business owners sued Exxon for damages stemming from the contamination of their water supply, other consequential effects and alleged misrepresentations by the company.

The result was a jury award of $496,210,570 in compensatory damages and $1,045,550,000 in punitive damages for the plaintiffs.

Exxon appealed both the compensatory and the punitive damages awards.

In the second, or companion, case against the company, there was a dispute as to when residents learned of the leak.

Exxon argued it notified Herbert Meade, administrator for the oil control program in the state Department of the Environment, of the spill Feb. 17, and that Meade immediately contacted the president of the local community association.

The second group of plaintiffs, who maintained they learned of the leak only after local media reported the story four days later, alleged their properties had decreased in value and that their health was threatened as a result of exposure to toxic chemicals from the gas leak -- specifically, methyl tertiary-butyl ether, or MTBE, a possible carcinogen, and benzene, a known carcinogen.

A spokesman for Exxon told the Baltimore Sun Tuesday that the company was pleased with the Court's decision.

"The evidence showed that we acted appropriately after the accident and the court has agreed," spokesman Charlie Engelmann wrote in an email to the Sun.

"We have apologized to the Jacksonville community and we remain ready to compensate those who were truly damaged by this unfortunate accident. We will continue the cleanup."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.