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April 18, 2008

Lawsuit filed over boat damage caused by ethanol in fuel

The suit claims that ethanol can damage fiberglass fuel tanks

The law firm of Kabateck Brown Kellner LLP reported it filed a class action lawsuit on April 7 against the major oil companies that sell ethanol-blended fuel, charging that the fuel causes serious damage to marine engines and fuel tanks.

The law firm said its class action suit on behalf of California boaters who have experienced fuel tank or engine damage names Big West, BP, Chevron, ConocoPhillips, ExxonMobil, Shell, Tesoro, Tower Energy, PetroDiamond and Valero.

"The price of gas is bad enough, but selling gasoline that dissolves gas tanks is a new low -- even for the oil companies," said Brian Kabateck, managing partner of Kabateck Brown Kellner, who is the lead attorney on the case. "The cost to the consumer is thousands of dollars in repairs."

Oil companies have long mixed additives into their gasoline as a way to boost octane. The chemical MTBE was used until 2004, when it was banned in many states because of environmental concerns. In response, the major oil companies replaced MTBE with ethanol -- but consumers were not adequately informed about the differences between MTBE and ethanol-mixed gasoline, nor were they informed about ethanol's effects on fiberglass marine fuel tanks, Kabateck said.

The suit claims that ethanol dissolves the resin that binds fiberglass threads together, which can cause fuel tank leaks and engine damage due to dissolved resin entering fuel systems.

In addition, ethanol's "phase separation" phenomenon causes additional problems for boaters, the law firm said.

Ethanol attracts water, and when enough water is absorbed by ethanol-blended gasoline, the ethanol and water solution separates from the gasoline (phase separation), with the gasoline floating to the top, Kabateck said. This can result in a layer of water with a high-concentration of ethanol at the bottom of
the fuel tank.

"The environment pays the price ? each time a damaged fuel tank leaks gasoline into the water," Kabateck said.

The suit was filed in U.S. District Court, Central District of California in Los Angeles. McNicholas & McNicholas, The Ball Law Firm, and Jacobson, Russell, Saltz & Fingerman LLP are also participating in the suit.

The suit seeks to represent a class comprising all owners of boats with fiberglass fuel tanks who have filled their tanks with ethanol-blended gasoline from a California retailer. The suit also seeks to represent everyone in California who owns a boat with a fiberglass fuel tank that had to be replaced because of damage caused by ethanol blended gasoline bought from a California retailer.