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US: AT&T to pay $25 million to settle Calif. lawsuit

January 17th, 2006

AT&T Inc. will pay $25 million to end a lawsuit by California officials alleging the company failed to test properly and repair its underground storage tanks, the state attorney general said on Tuesday.

"This settlement will force AT&T to overhaul its business practices throughout the state so its underground storage tanks, and the public, are safe," Attorney General Bill Lockyer said in a statement.

"Every day they postponed inspections and repairs, they risked catastrophic leaks and spills of MTBE and other toxic chemicals into our environment and surrounding communities."

The lawsuit alleged environmental shortcomings at 531 underground storage tanks across California, some of which keep fuel for vehicles.

"This was not a case about actual environmental harm, nor has the state ever claimed that it was," AT&T said. "The main focus of this case is a dispute about whether AT&T California met a deadline for testing emergency generator tank secondary containment systems."

"While AT&T California believes it complied with the applicable law, we have agreed to settle this case in order to focus on our primary objective of providing communications services to our California customers."

The attorney general's statement said it was the second largest resolution of a storage tank lawsuit after a $45.8 million 2002 settlement with BP-Arco.

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