Prosecution of Oil Company by Orange County District Attorney Sets Precedent

For Immediate Release
December 17th, 2002
Contact: Michelle Emard
Media Relations Director
(714) 347-8405 Office
(714) 323-4486 Cell
(714) 359-2239 Pager

Prosecution of Oil Company by Orange County District Attorney Sets Precedent

The People of Orange County vs. ARCO Settlement
SANTA ANA – December 17, 2002 – Today Orange County District Attorney (OCDA) Tony Rackauckas announced the settlement of a multi-million dollar environmental protection lawsuit against the Atlantic Richfield Company (ARCO) on behalf of the People of Orange County.  This is a case of unprecedented magnitude.  It represents the largest civil litigation of its kind ever prosecuted in the United States by a district attorney on behalf of an entire county.

The case took nearly four (4) years to fully investigate, mediate and settle.  During this time, the Office of the Orange County District Attorney and the County of Orange committed a record number of internal and external resources to bringing this complex lawsuit to a successful conclusion.  This substantial expenditure of staff, money and time on this case was made for one very important reason:  To protect the drinking water for the citizens of Orange County.

Threat to Supply of Drinking Water Discovered
District Attorney Rackauckas personally made the decision to file this environmental protection lawsuit based upon reports filed by local and state regulatory agencies and an environmental watchdog group called Communities for a Better Environment.  These reports provided evidence that numerous state statutes and regulations related to the installation, maintenance, monitoring, permitting, testing and overall operation of underground gasoline storage tanks (UST) were being violated on an ongoing basis in Orange County.

Tests show the supply of drinking water in Orange County is currently free of contamination.  However, these reports proved that there had been a failure to adequately assess and cleanup the resulting contamination of the aquifer, groundwater and soil caused by the leaking USTs.  The presence of a gasoline additive called MTBE (methyl tertiary-butyl ether) in the leaking fuel added to the problem.  It is more soluble and moves further and faster through groundwater than other components of gasoline.  MTBE can be detected in very small amounts because it makes the contaminated water taste and smell like turpentine, but it is extremely difficult and expensive to remove.

A majority of those living in Orange County get their drinking water from local sources.  Seventy percent of the nearly three million people who live in Orange County rely upon the Santa Ana River Basin for 70% of their water supply.  There are thousands of production wells that currently tap into this critical source of water and more will likely need to be drilled to meet the future water needs of Orange County.  However, if the aquifer system becomes contaminated at any point, a portion of it will have to be shutdown and costly imported water will have to be purchased to make-up the shortfall in supply.

Orange County District Attorney Takes Immediate Action
Collectively, these findings indicated that a significant threat to the supply of drinking water in Orange County clearly existed and would grow worse if immediate action was not taken.  District Attorney Rackauckas moved quickly to file the lawsuit, stating:  “My goal was to compel the defendants to bring all identified sites into compliance and cleanup any contamination caused by leaking underground storage tanks and retail gas station operations.”

“After being served with the lawsuit, ARCO began to take corrective action to bring all of its retail gas stations into compliance,” District Attorney Rackauckas said.  “The company started making the necessary repairs to the underground storage tanks and launched a variety of remediation programs to clean-up contaminated sites.  ARCO has indicated a desire to work with my office to ensure violations do not occur again so we can keep Orange County’s drinking water safe today and into the future.”

OCDA Case Against ARCO Sets Precedent
This case is unique because it represents the first time a district attorney has prosecuted a major oil company to force the compliance and clean-up of every single violation at each gas station location for the entire history of the statute of limitations.  A case of this magnitude is very expensive and quite lengthy to litigate.  However, although the costs associated with trying this type of case can be prohibitive, District Attorney Rackauckas decided that the potential threat to the drinking water supply in Orange County justified the action.  He summarized his position in saying, “Safe drinking water is a truly priceless commodity and Orange County’s supply deserves to be protected.”

The Office of the OCDA committed a record number of attorneys to this litigation, particularly from the Environmental Protection.  All were required to develop expertise in both the area of civil litigation and in the highly complex legal area of underground storage tank compliance and clean-up laws.  The Orange County Board of Supervisors also approved the hiring of two outside law firms to assist with the litigation of this complex civil case, Robinson, Calcagnie & Robinson, and Lopez, Hodes, Restaino, Milman & Skikos.

In addition, the following local, regional and state departments, boards and agencies played an integral role in the resolution of this lawsuit:

Orange County Health Care Agency; Anaheim, Fullerton, Orange and Santa Ana Fire Departments; South Orange County Water Authority; Santa Ana Regional Water Quality Control Board; San Diego Regional Water Quality Control Board; and State Water Resources Control Board.

The members of the Orange County Hazmat Strike Force Team, a multi-agency task force which meets regularly under the direction of the Orange County District Attorney’s Environmental Protection Unit, also worked to assist in the investigation and prosecution of this case.

Settlement Achieves Full Recovery of Costs, Clean-Up and Compliance
The settlement for this case is summarized as follows:

  • ARCO must pay $5 million dollars to reimburse the Office of the Orange County District Attorney and County of Orange for all litigation costs
  • ARCO must pay $3 million dollar for a fund controlled by OCDA to pay for an independent consultant (hydrogeologist) to monitor the clean-up of all identified sites in Orange County
  • ARCO is bound to pay for clean-up of all sites regardless of the cost
  • ARCO must bring all gas station sites into full compliance