In a groundbreaking decision, a San Francisco jury determined yesterday that gasoline containing the additive MBTE is a defective product and that two major oil companies were aware of but did not disclose the additive’s dangers when they began marketing it. The lawsuit was brought by the South Tahoe Public Utility District after it discovered that MBTE had seeped into groundwater and polluted a third of the district’s drinking-water wells in the late 1990s. MTBE, which causes gas to burn more cleanly, is thought to be a carcinogen. The jury found Shell Oil and Lyondell Chemical (formerly Atlantic Richfield Chemical), as well as Tosco (now part of Phillips Petroleum), guilty of placing a defective product on the market, and said Shell and Lyondell acted with malice by withholding information about MBTE. The verdict, which is the first of its kind, could set a precedent for dozens of similar cases pending in other parts of the country and result in billions of dollars in damages and cleanup costs for the nation’s largest oil companies.

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