State sues Chevron

Attorney General Herbert Slatery is suing Chevron and its subsidiaries for a “prolonged and costly scheme” to take more than $18 million from a state fund used to cleanup spills of oil and gas, reports The Tennessean.

The fund reimburses tank owners for expenses during spill cleanups, but is intended as a last-resort fund for owners who cannot afford the costs. Owners with private insurance must first seek cleanup costs from their insurance companies.

The lawsuit alleges the companies used taxpayer funds to pay for leaks and spills at more than 100 Tennessee gas stations — despite having private insurance that paid for the cleanup costs.

The lawsuit filed in Davidson County Chancery Court also accuses Chevron and its subsidiaries of filing falsified paperwork for millions of dollars to pay for leaks at storage tanks that occurred before the cleanup fund was operating.

In its applications for cleanup costs, the company “misled” the state and continued to “misrepresent the insurance status of the facilities,” the lawsuit said.

The state is seeking more than $18 million in funds to be returned as well as penalties ranging between $2,500 and $10,000 for each false claim filed.

The fund has paid out more than $370 million to hundreds of tank owners across the state since it was created in 1988…. (T)he company is seeking to dismiss the lawsuit, claiming in some instances Chevron and its subsidiaries had sought state funds to make up the difference in their cleanup costs from the “pennies-on-the-dollar” claim payouts from their insurers.