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# ■ No. 2: The largest court settlement for the City of Santa Monica on record
- URL: https://www.smdp.com/no-2-the-largest-court-settlement-for-the-city-of-santa-monica-on-record/
- Published: 2003-12-31T16:00:00.000Z
- Updated: 2026-10-23T03:25:53.000Z
- Author: Guest Author
- Tags: Business, Santa Monica, #archive-import

This month marked the end of a seven-year legal battle between three giant oil companies and City Hall. Orange County Superior Court Judge Stephen J. Sunvold approved a $300 million settlement between Shell Oil Company, ChevronTexaco and Exxon Mobil, all of which admitted to polluting the city’s water supply. The settlement is valued at $312.85 million, which includes a commitment to provide the city with a new water treatment facility, as well as $92.5 million in cash.

A new treatment facility, the first of its kind, will be built specifically to clean up the city’s water at the Charnock Well Field in West LA, the city’s main water source. The settlement ensures that the oil companies will pay for all costs to construct, operate and maintain the treatment plant, which officials expect will clean the city’s water supply by 2008.

City Hall’s lawsuit was levied against 18 oil companies and manufacturers in 2000\. Since then, City Hall has negotiated more than $18 million aside from the major settlement with the three companies.

The settlements include Union Oil Company (UNO- CAL) for $5 million and ConocoPhillips, on behalf of its subsidiary, Tosco, for $6 million. City Hall previously settled with Atlantic Richfield (ARCO) for $9.75 million, Ultramar for $4.5 million and Conoco for $4 million.

Only one major oil-industry defendant remains in the lawsuit — Lyondell Chemical Company, which is the successor to ARCO Chemical. Lyondell, along with the other companies, is a manufacturer of Methyl tertiary Butyl Ether, a gasoline additive that leaked into the city’s groundwater in 1996 and forced several wells to be closed, according to city officials.

No date has been set yet by the court for the trial between the city and Lyondell, but it’s expected that it will be sometime early next year.

Dozens of cities throughout the country are currently battling with oil companies because of MTBE contamination. Before Santa Monica’s settlement, the largest pay out relating to MTBE was in Lake Tahoe for $69 million.

It was discovered in 1996 that Santa Monica’s water supply was contaminated by MTBE, a gasoline additive designed to boost fuel performance and reduce emissions. City officials were able to cut off the water supply before it reached residents, but seven of the wells had to be shut down. The oil companies have since then been buying imported water to supply about half of the 12 million-plus gallons of water used by residents and businesses every day. It costs oil companies about $3 million each year to buy the water from the Metropolitan Water District.

![](https://storage.ghost.io/c/55/9f/559f9abc-8372-4a2e-8c2d-27386da4e363/content/images/2026/10/123103-13_01.jpg)

announced the multi-million dollar settlement between City Hall and three major oil companies in November. (Photo: File photo Marsha Moutrie)

*Originally published in the Santa Monica Daily Press print edition on December 31, 2003.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/123103.pdf?ref=smdp.com)