County of Suffolk v. Amerada Hess Corp.

341 F. Supp. 2d 351, 164 Oil & Gas Rep. 1128, 59 ERC (BNA) 1243, 2004 U.S. Dist. LEXIS 13135
District Court, S.D. New York·Decided July 13, 2004·No. No. MDL 1358(SAS); No. 04Civ.5424 (SAS)·Published·Cited by 1 cases

Opinion

OPINION AND ORDER

SCHEINDLIN, District Judge.

This case is one of dozens of cases in a multi-district litigation (“MDL”), in which numerous plaintiffs are seeking relief from contamination or threatened contamination of groundwater from various defendants’ use of the gasoline additive methyl tertiary butyl ether (“MTBE”).1 This opinion re[355] lates only to County of Suffolk, et al. v. Amerada Hess Corp., et al., No. 04 Civ. 5425.

On May 6, 2002, plaintiffs County of Suffolk and Suffolk County Water Authority (collectively “Suffolk”) filed a complaint in the United States District Court for the Eastern District of New York against many energy companies, not including Am-erada Hess Corporation, alleging that defendants were liable for adding MTBE to their gasoline, knowing it would contaminate and create an enhanced risk to groundwater.2 On August 19, 2002, Suffolk filed a separate action against Amera-da Hess in state court, alleging the same claims. Thereafter, Suffolk withdrew its complaint from the Eastern District and amended its state court complaint to add essentially the same defendants from the federal action.3

The state court case proceeded for a year and a half when, on March 22, 2004, defendant Lyondell Chemical Corporation (“Lyondell”) filed a third-party complaint against Marathon Ashland Petroleum LLC (“Marathon”) for indemnification and contribution should Suffolk succeed on its claims. In response, Marathon removed this case to federal court based on section 1442(a) of Title 28 of the United States Code, the federal officer removal statute. In its Notice of Removal, Marathon cited my March 16, 2004 Opinion and Order, holding that this Court has federal agent jurisdiction over the consolidated MTBE cases.4 The Judicial Panel on Multidistrict Litigation transferred the instant action to me as a related case.

Suffolk now moves to remand, arguing that: (1) Marathon should be barred from removing the case as a third-party defendant; (2) Marathon is not a federal officer for purposes of the federal officer removal statute; and (3) the Court should abstain from exercising its jurisdiction. For the reasons that follow, Suffolk’s motion to remand is denied.

I. BACKGROUND

A. The Allegations5

MTBE is a chemical compound added to gasoline to increase the gasoline’s oxygen content and make it cleaner burning. MTBE does not occur naturally but is a byproduct of the gasoline refining process. It is highly soluble in water and does not readily biodegrade. Because of its high solubility, MTBE races through underground water reservoirs, quickly reaching the water table and wells whenever gasoline leaks, spills, or is released into the environment. It is known to be carcino[356] genic in animals and is potentially cancer-causing in humans, as well. Even small quantities of MTBE impart a turpentine-like taste and odor to water, rendering it unfit for human consumption. MTBE has been detected in approximately thirteen percent of Suffolk County’s water wells, which draw from the county’s “sole source” aquifers and numerous streams.6 Suffolk views the contamination as a significant health risk to the people who depend on the aquifier system for drinking water.7

Sometime after 1979, defendants started adding MTBE to gasoline in concentrations of approximately two to four percent in order to boost the octane level in higher grades of gasoline. Since the early 1990s, defendants have added MTBE in much higher concentrations, typically eleven to fifteen percent, in all grades of gasoline. MTBE was not the only viable option to achieve octane enhancement. Rather, its use reflected a choice and preference of defendants to profit from a gasoline refining waste byproduct. Suffolk contends that defendants added MTBE to their gasoline, knowing that it would contaminate groundwater, and also that defendants conspired to market MTBE as a gasoline additive in order to maximize their own profits.8

Based on these allegations, Suffolk asserts claims for (1) public nuisance; (2) strict liability for design defect; (3) strict liability for failure to warn; (4) negligence; (5) private nuisance; (6) violation, of New York’s General Business Law; and (7) violation of New York’s Navigation Law.9

B. Grounds for Removal

Marathon removed this action to federal court, asserting federal agent jurisdiction pursuant to section 1442(a). Marathon’s allegations in support of removal are essentially identical to those I considered in denying remand in the consolidated cases.

Marathon asserts that in 1977, Congress amended the Clear Air Act to federalize fuel content requirements.10 Pursuant to the amendment, the United States Environmental Protection Agency (“EPA”) has express and exclusive authority to decide what fuels and fuel additives are sold nationwide.11 By Federal Regulations issued in 1979 and 1988, EPA allows MTBE to be added to gasoline in amounts of up to fifteen percent by weight.12

In 1990, Congress again amended the Clean Air Act. Among other things, the amendments created two programs requiring petroleum refiners to blend oxygenates into gasoline sold throughout much of the country. These programs — the Oxy-Fuel Program (“OFP”) and the Reformulated Gasoline (“RFG”) Program — were designed to reduce the emission of air pollutants. According to Marathon, Congress was aware when it enacted the amendments that only a small number of oxygenates could be blended with gasoline to meet the requirements, and that MTBE would have to be used in the vast majority of oxygenated gasoline sold in the United States.13 Moreover, Congress drafted the [357] amendments to ensure MTBE could be used because “Congress intended that petroleum refiners use MTBE in gasoline.”14

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County of Suffolk v. Amerada Hess Corp., 341 F. Supp. 2d 351, 164 Oil & Gas Rep. 1128, 59 ERC (BNA) 1243, 2004 U.S. Dist. LEXIS 13135 (S.D.N.Y. 2004).

341 F. Supp. 2d 351 (County of Suffolk v. Amerada Hess Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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