TCS Daily

If At First It Doesn't Succeed, the Trial Lawyers Will Come Again

By Stephen Schwartz - January 6, 2004 12:00 AM

What is MTBE and what does it have to do with national energy policy? A gasoline additive, MTBE (methyl tertiary-butyl ether) effectively cuts down ozone pollution and airborne toxic chemicals generated by motor vehicles. Shouldn't that be cause for celebration? The federal authorities thought so, when they mandated its use in 1990. The Sierra Club also thought so, when even before then, it named MTBE one of the 10 most innovative and environmentally helpful products.

But MTBE is now seen as a pollutant itself. And the eagerness of trial lawyers to find a new source of income in environmental suits has made MTBE a stumbling block to passage of the Omnibus Energy Bill.

The House of Representatives passed the Omnibus Energy Bill on November 18. In the Senate, debate on the bill has yet to reach cloture, which would lead to a vote. However, the Senate may be approaching cloture on the bill. Iowa Republican Sen. Chuck Grassley said December 16 that two powerful Democrats, Jay Rockefeller of West Virginia and Dan Inouye of Hawaii would support cloture, giving the 60 votes needed to move the bill forward.

The previous cloture vote, in November, was 57 in favor. Sen. Majority Leader Bill Frist (R-TN), who had changed from support for cloture to a position allowing movement on the bill, will likely change back.

Some people are unhappy with the Omnibus Energy Bill because of its mandate for a national ethanol policy, major tax breaks for industry, and outlays of porkbarrel spending.

But as House Majority Leader Tom DeLay (R-TX) has pointed out, much lobbying against the bill has been carried by trial lawyers, who object to the bill including a provision extending limited product liability protection to manufacturers and sellers of MTBE. Rep. DeLay has described the campaign by trial lawyers against the MTBE liability extension as a "rampage."

MTBE or Not MTBE? That Is the Question.

MTBE became a feature in the U.S. environment when the federal Environmental Protection Agency brought about its inclusion in gasoline, as a means to reduce chemicals burned into the air. But its misuse by firms handling it after it has been delivered from the manufacturer has led to trace pollution of groundwater.

Experts on MTBE, including some concerned about its groundwater effect, say it has yet to be established whether the benefits it brings in terms of cleaner air outweigh the bad effects in groundwater. In addition, some other pollutants have much higher concentrations in groundwater, including such compounds as dry cleaning fluid.

The ethanol industry has campaigned to label MTBE a national issue, because ethanol is the sole available alternative to MTBE, even though it can only be made cost-competitive with large government subsidies. MTBE is now being phased out, but trial lawyers anticipate its transformation into a "new asbestos" that will produce vast financial rewards. A California lawsuit in 2002 at first seemed to point in this direction, but was settled with no finding that MTBE is a defective product. Nevertheless, hundreds of MTBE suits have already been filed.

Producers argue that holding their firms liable -- after they were compelled by Congress to adopt MTBE, under the 1990 Clean Air Act -- for the negligence of others handling and storing products that contain MTBE is to extend the present American obsession with punishing corporations, regardless of their innocence, to a new level of absurdity. It was bad enough when a fast food chain was sued for serving coffee that was too hot, but what if the plaintiff had also sued the coffee company?

Congress has recognized the imbalance of this situation. Its offer to shield manufacturers of MTBE, gasoline refineries using MTBE, and others who sell or store it from frivolous legal claims represents a good faith effort to undo damages caused by legislation, in this case environmental legislation intended to lower air pollution.

Trial lawyers want to maintain their claims that MTBE is a defective product, allowing suits to be filed against anybody involved in its manufacture, transportation, sale, and use. Defining MTBE as a bad product appears easier than proving negligence in cases involving it. The Omnibus Energy Bill simply removes this basis for filing a suit, while preserving the right of federal, state, and local authorities to sue MTBE manufacturers for actual pollution by them.

Still, actual pollution by MTBE producers is not the problem addressed in MTBE lawsuits. Trial lawyers have responded to this challenge by claiming a need for an immense MTBE cleanup, and payment of damages, that would bankrupt cities, counties, and states if they are forced to pay.

MTBE is as partisan an issue as one gets. Republicans have tended to close ranks against handing more legitimacy to trial-lawyer looting of industry. Democrats will line up to claim another victory of environmental vigilance if MTBE producers are brought down. And one of the leading trial lawyers in MTBE cases -- with more than 50 cases involving the additive pending -- is Fred Baron, of Baron & Budd, Dallas, TX, who is currently the National Finance Chairman of Sen. John Edwards' presidential campaign.

Trial lawyers have indoctrinated Americans with the notion that if enterprises cannot be bludgeoned into compensation in areas for which they have no liability, then the political system can be held hostage until such liability is accepted. Opposition to a vote on the Omnibus Energy Bill because of MTBE is but another, egregious example of this practice. The Senate should move on to a vote.

Stephen Schwartz is a Washington-based commentator on national and international politics and economics.


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