Journal-News.com (Ohio): County signs off on $10M Shell settlement: “…the county’s claim contends the defendants knew the pipes were unsuitable for water service, misrepresented the quality of the piping, violated expressed and implied warranties, committed fraud, engaged in deceptive trade practices, and created a public nuisance” (ShellNews.net) 25 March 05
HAMILTON — Butler County commissioners voted this week to accept a $10.4 million settlement in its lawsuit against Shell Oil Co. related to thousands of water pipe failures in the past decade.
County Administrator Derek Conklin said Thursday that a final settlement in Butler County Common Pleas Court is pending approval of all the parties involved. Representatives from those parties, with the exception of Butler County Commissioner Michael Fox — who voted against the settlement — declined comment or could not be reached Thursday.
The suit was filed in 2001 by Butler County Prosecutor Robin Piper.
“Those who made money from the sale of this defective product should pay for the cost of repairs, not the citizens of Butler County,” Piper said at the time. “This civil suit will help reimburse the county for expenses incurred in the past and anticipated to be incurred in the future.”
The pipes, which were then sold under the trade name Blu-Max, were used to connect county meters to water mains in about 13,500 locations in the eastern part of the county in the 1980s and 1990s. Jack Thornsberry, head of operations for the county’s Environmental Services Division, said 4,029 of those connections have failed since the late 1990s.
“Since about 2000, we’ve spent over 55,000 man-hours fixing these problems,” Thornsberry said. “We didn’t have a system in place to track this before then.”
Past pipe break repairs have cost the county about $2,000 each, including labor, materials and restoration of any damage the break caused, he said. Based on the average cost and the number of failures, the cost to the county to date has been about $8 million, he said.
“We’ve conservatively budgeted for about 8,400 failures in the next 10 years,” Thornsberry said. “We budgeted those to cost right about $2,000 each, but we’re getting better and better at this, so the cost could be lower.”
At that price, the county could end up paying another $16.8 million to fix the busted pipes.
The 2001 claim was filed against Shell, which manufactured the pipes; Utility Service and Supply, a pipe supplier in Monroe; and Vanguard Plastics Inc., of McPherson, Kan., and Orangeburg Industries Inc., of Greeneville, Tenn., which helped market the product.
The county alleged that Shell represented in its marketing materials that the Blu-Max pipe would not corrode and would last for up to 50 years. The pipes were manufactured using a plastic resin commonly known as polybutylene and took the place of metal piping.
However, the county’s claim contends the defendants knew the pipes were unsuitable for water service, misrepresented the quality of the piping, violated expressed and implied warranties, committed fraud, engaged in deceptive trade practices, and created a public nuisance.
Fox said he voted against the settlement because he believes that over time, the damages related to the pipe failures will cost much more than the $10.4 million provided for in the settlement.
“It was worth going to court,” he said. “I believe our case was strong and would have withstood the scrutiny of a court challenge, especially in regard to the issues of fraud and misrepresentation. It was a judgment call, though, and I don’t fault them for wanting to take the money they could get.”
Fox credited the prosecutor’s office and attorneys from Middletown law firm Frost Brown Todd, which helped with the county’s case in bringing the matter to court.
Butler County Bureau reporter Jessica Brown contributed to this report.
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