State Underground Petroleum (SUPERB)

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1 State Underground Petroleum Environmental Response Bank Act (SUPERB)

2 Overview Third Party Issues Insurance Issues Class Action Issues Prerequisites for class certification under South Carolina law Bowens v. 7-Eleven, Inc. Fairey v. Exxon

3 Third Party Issues

4 South Carolina SUPERB Act (A): There is created within the state treasury two separate and distinct accounts which are to be administered by the department of health and environmental control. The superb account and the superb financial responsibility fund are created to assist owners and operators of underground storage tanks but not to relieve the owner or operator of any liability that cannot be satisfied by the provisions of this chapter.

5 South Carolina SUPERB Act (A): The Superb Account must be used for payment py of usual, customary, and reasonable costs for site rehabilitation of releases from underground storage tanks containing petroleum or petroleum products.

6 South Carolina SUPERB Act (A): The Superb Financial Responsibility Fund must be used for compensating third parties for actual costs for bodily injury and property damage caused by accidental releases from underground storage tanks containing petroleum or petroleum products. The Superb Financial i Responsibility Fund must not be used for reimbursing claims for punitive damages.

7 South Carolina SUPERB Act (A): Sites not in substantial compliance with regulations are not eligible for compensation from the superb account, and no third party claims resulting from that release may be paid from the superb financial responsibility fund.

8 South Carolina SUPERB Act (C): The Superb Financial Responsibility Fund must be used to reimburse owners or operators who compensate third parties or compensate third parties directly, only for bodily injury and property damages caused by releases from underground storage tanks containing petroleum or petroleum products, exclusive of any legal costs of the parties, and only when there are judgments, settlements, alternative dispute resolution outcomes, or consent orders for damages for bodily injury or property damage, or both, that are approved by a court of competent jurisdiction within the State of South Carolina.

9 South Carolina SUPERB Act (C): To seek payment from the Superb Financial Responsibility Fund, the owner or operator must notify the department in writing within sixty days and must defend in good faith against the claim or suit.

10 South Carolina SUPERB Act (C): At its discretion, the department may intervene in the claim or suit to protect the Superb Financial Responsibility Fund. It Intervention ti includes, ld but bti is not tli limited itdt to, defending the claim, approving the claim, or participating i in the settlement t of the claim.

11 South Carolina SUPERB Act (C): The Superb Financial Responsibility Fund is not liable for any claims where no owner or operator exists.

12 South Carolina SUPERB Act (23): "Third party claim" - a civil action brought or asserted by an injured party against an owner or operator of an underground storage tank for bodily injury or property damages resulting from a release of petroleum or petroleum products from an underground storage tank. Underground storage tank owner or operator, owner of the property where the underground storage tank is located, a person to whom properties are transferred in anticipation i of damage due to a release, Employees or agents of an owner or operator, or employees or agents of the property owner must not be considered a third party.

13 South Carolina SUPERB Act (2): "Bodily injury" means actual medically documented costs and medically documentable future costs of adverse health h effects that have resulted from exposure to a release of petroleum or petroleum products from an underground storage tank. Bodily injury does not mean pain and suffering.

14 South Carolina SUPERB Act (15): "Property damage" - a documented adverse physical impact to structures or property as a result of a release of petroleum or petroleum products from an underground storage tank. Total damage is limited to the difference between THE original i lf fair market value of fth the property or structure t and the residual value or the depreciated replacement cost of the property or structure, whichever is less. The documented presence of petroleum or petroleum products at levels not posing an unacceptable risk to human health or environment shall not be grounds for a claim or suit.

15 Insurance Issues

16 South Carolina SUPERB Act (A): No insurance policy, guarantee, surety bond, or any other financial responsibility mechanism which is executed to provide this or additional amounts of coverage shall contain any terms, endorsements, conditions, provisions, or other language that requires expenditures of funds from the Superb Account or the Superb Financial Responsibility Fund prior to or in lieu of payment by the mechanism, and no such financial responsibility mechanism which has previously been executed shall operate so as to require the expenditure of funds from the Superb Account or Superb Financial Responsibility Fund until funds provided by the financial responsibility mechanisms have been exhausted.

17 South Carolina SUPERB Act (A): If a liability insurance policy or any other financial responsibility mechanism which provides financial responsibility coverage for sudden or nonsudden release of petroleum or petroleum products from an underground storage tank has been executed for a site at which compensation from the Superb Account is sought, no funds may be expended from the Superb Account until the funds provided by the financial responsibility mechanism have been exhausted.

18 Class Action Issues

19 Class Certification Proponents of class certification bear the burden of proving 5 prerequisites under S.C. law: Class must be so numerous that joinder of all members is impracticable Must be questions of law or fact common to the class Claims or defenses of the representative parties must be typical of the claims or defenses of the class Representative parties must fairly and adequately protect the interests of the class Amount in controversy must exceed $100 for each member of the class

20 Class Certification First four are often called requirements for numerosity, commonality, typicality, and adequacy of representation Failure to satisfy even one prerequisite is fatal to class certification.

21 Bowens v. 7-Eleven, Inc. What is the class action about? This Lawsuit involves what is now the 7-Eleven gas station at 1000 South Main Street in Goshen (the Station ). The Lawsuit alleges that Defendants are responsible for releases of gasoline from underground storage tanks at the Station. Plaintiffs iff allege that these releases entered the groundwater and soil in the neighborhood around the Station and caused gasoline vapors to enter into surrounding properties. Plaintiffs also allege that Defendants should have, but did not, notify residents of the Jackson Street Neighborhood of the releases.

22 Bowens v. 7-Eleven, Inc. But both sides agreed to the settlement to resolve the case and get benefits to Class Members. The Settlement provides up to $19,800, in benefits to clean up the neighborhood and to be divided among all Class Members who submit a valid claim form. The Court approved the Settlement on February 29, 2008.

23 Fairey v. Exxon On September 18, 1992, Mary Louise Fairey commenced this class action against Exxon for damages it had caused to her property and all other property which Exxon s service station operations had damaged in South Carolina. Ten years and ten months later, on July 18, 2004, this action was settled just after the trial of the case had begun. The settlement received final Court approval reported to be $30 million.

24 Fairey v. Exxon: NOTICE OF CLASS ACTION CLAIMS PROCEDURES TO MEMBERS OF THE SOUTH CAROLINA EXXON CONTAMINATION CLASS ACTION: YOU ARE HEREBY NOTIFIED OF THE EXISTENCE OF A CLAIMS PROCEDURE TO BE FOLLOWED FOR CLASS MEMBERS TO RECOVER FROM A SETTLEMENT FUND CREATED AS A RESULT OF THE SETTLEMENT OF THE ABOVE-REFERENCED ACTION.

25 Fairey v. Exxon: NOTICE OF CLASS ACTION CLAIMS PROCEDURES The class, on whose behalf these claims were asserted and on whose behalf this action has been settled, consists of: THOSE PERSONS WHO POSSESS AN INTEREST IN REAL PROPERTY WITHIN THE STATE OF SOUTH CAROLINA THAT HAVE BEEN POTENTIALLY CONTAMINATED BY PETROLEUM PRODUCTS, OR CHEMICALS ASSOCIATED WITH PETROLEUM PRODUCTS THAT HAVE LEAKED, SPILLED, OR BEEN RELEASED INTO THE ENVIRONMENT EITHER FROM EQUIPMENT OWNED, OPERATED OR CONTROLLED BY EXXON, ITS AGENTS OR ITS PREDECESSORS, OR FOR SERVICE STATION OPERATIONS CONDUCTED BY EXXON, ITS AGENTS OR PREDECESSORS, OR UNDER THE CONTROL OF EXXON OR ITS PREDECESSORS.

26 Fairey v. Exxon: NOTICE OF CLASS ACTION CLAIMS PROCEDURES This Court previously certified this case as a class action on March 13, 1998 and gave notice concerning the existence of this Class on March, 1999, which afforded all of those who wished to be excluded an opportunity to exclude themselves from this case. IF YOU FIT THE DESCRIPTION SET FORTH ABOVE AND DID NOT REQUEST TO BE EXCLUDED BY JULY 30, 1999, YOU ARE A MEMBER OF THIS CLASS AND HAVE THE RIGHT TO FILE A CLAIM AGAINST THE SETTLEMENT FUND CREATED AS A RESULT OF THE RESOLUTION OF THIS CLASS ACTION.

27 Thank You!

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