Shell, Hoechst Agree to Create Fund to Repair Pipes in Landmark Case
A landmark settlement was approved Thursday requiring two chemical companies to spend $950 million to repair damage caused by leaky plastic pipes installed in millions of homes nationwide, including thousands in Southern California.
In the biggest property-damage settlement in the United States, Shell Oil Co. and Hoechst Celanese Corp. agreed to create a fund to repair damage caused by allegedly faulty polybutylene pipes.
While polybutylene was never approved for use in the city of Los Angeles, the gray plastic piping was widely used in other parts of Southern California. In San Diego County, an estimated 40,000 homes were built using polybutylene piping.
Lawyers representing property owners in a class-action lawsuit alleged that the piping system--once touted as being more flexible and cheaper than other plastic or copper plumbing--leaked when exposed to chlorine and other chemicals commonly found in tap water.
Nationwide, as many as 6 million housing units, including mobile homes and apartments, were constructed with this type of plumbing.
Property owners who can show actual leaks in polybutylene plumbing are eligible to receive the money. In most cases, homeowners have one year to apply.
“This is an extraordinary victory for consumers,” said Arthur Bryant, executive director of Trial Lawyers for Public Justice, a public interest law firm that brought the suit. Homeowners “will essentially get 100 cents on the dollar for all repair costs and be eligible to get an entirely new plumbing system at no cost.”
Houston-based Shell made the materials used for the pipes; Somerville, N.J.-based Hoechst manufactured the fittings. Both companies have denied that the equipment is defective.
Tennessee State Judge Michael Maloan approved the settlement Thursday, ending a decade of lawsuits over the pipes. Attorneys have been negotiating a settlement for about two years.
“We’re very pleased that 10 years of litigation has finally been concluded,” said Daniel Hyde, a Houston lawyer representing Shell Oil.
“The resources being devoted to litigation can now be directed to claims service for people who have had problems with the product.”
Bryant said the two companies have agreed to spend a minimum of $950 million. “If that isn’t enough,” he said, “they will either have to pay what is necessary” or be sued again.
Another chemical company that made fittings, DuPont Co., agreed in May to pay $120 million to settle claims over leaky pipes.
The settlement, while available to homeowners nationwide, brings to a close 21 similar cases being litigated in 18 states.
Two toll-free numbers have been set up to help property owners with questions and claims: (800) 876-4698 and (800) 568-9455.