In Re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation

725 F.3d 65, 43 Envtl. L. Rep. (Envtl. Law Inst.) 20171, 2013 WL 3863890, 77 ERC (BNA) 1254, 2013 U.S. App. LEXIS 15229
CourtCourt of Appeals for the Second Circuit
DecidedJuly 26, 2013
Docket10-4135-cv (L), 10-4329-cv (XAP)
StatusPublished
Cited by152 cases

This text of 725 F.3d 65 (In Re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation, 725 F.3d 65, 43 Envtl. L. Rep. (Envtl. Law Inst.) 20171, 2013 WL 3863890, 77 ERC (BNA) 1254, 2013 U.S. App. LEXIS 15229 (2d Cir. 2013).

Opinion

SUSAN L. CARNEY, Circuit Judge:

Table of Contents

I. BACKGROUND..........................................................79

A. MTBE and Its Effects.................................................80

B. The Clean Air Act and the Reformulated Gasoline Program................81

C. The City’s Water-Supply System .......................................81

D. The City’s Claims............................................ 82

E. The Trial ............................................................83

1. Phase I: Future Use of the Station Six Wells.........................83

2. Phase II: Peak MTBE Concentration in the Station Six Wells...........85

3. Phase III: Liability and Statute of Limitations........................86

a. Injury........................................................87

b. Causation.....................................................88

c. Damages.....................................................89

d. Statute of Limitations..........................................90

e. Phase III Jury Verdict.........................................91

F. Punitive Damages.....................................................91

G. Juror Misconduct.....................................................94

H. Post-Trial Motions....................................................95

II. DISCUSSION............................................................95

A. Preemption ..........................................................95

1. Federal Preemption of State Law....................................96

2. Conflict Preemption: the Impossibility Branch........................97

a. The Import of the Jury’s Finding on the City’s Design-Defect

Claim......................................................98

b. Considering Ethanol as a Possible Alternative to MTBE...........100

3. Conflict Preemption: the Obstacle Branch...........................101

4. Tortious Conduct Beyond Mere Use of MTBE .......................103

B. Legal Cognizability of Injury..........................................104

1. Standing........................................................105

2. Injury As a Matter of New York Law...............................107

C. Ripeness and Statute of Limitations....................................109

D. Sufficiency of the Evidence as to Injury and Causation....................112

1. The Jury’s 10 ppb MTBE Peak Concentration Finding................113

2. The Jury’s Consideration of Market Share Evidence..................115

E. New York Law Claims................................................117

1. Negligence......................................................117

2. Trespass........................................................119

3. Public Nuisance..................................................121

4. Failure to Warn..................................................123

F. Juror Misconduct....................................................125

G. The City’s Cross-Appeals for Further Damages..........................126

1. Compensatory Damages Offset.....................................126

2. Punitive Damages................................................127

III. CONCLUSION..........................................................130

*78 Exxon Mobil Corporation, Exxon Mobil Oil Corporation, and Mobil Corporation (collectively, “Exxon”) appeal from an amended judgment entered in favor of the City of New York, the New York City Water Board, and the New York City Municipal Water Finance Authority (collectively, “the City”) on September 17, 2010, in the United States District Court for the Southern District of New York (Shira A. Scheindlin, Judge), following an eleven-week jury trial and post-trial proceedings. The case was selected to serve as a bellwether trial in certain long-running multidistrict litigation, consolidated in the District Court, that concerns contamination of groundwater by the organic chemical compound methyl tertiary butyl ether (“MTBE”). 1

As described in greater detail below, this extended litigation arose from the intensive use of MTBE as a gasoline additive by Exxon and other gasoline companies in the New York area from the 1980s through the first half of the 2000s, when a state ban on MTBE brought the era to an end. Treatment with MTBE increased the oxygen content of gasoline and mitigated harm to air quality caused by automobile emissions, thereby furthering the goals of the Clean Air Act, 42 U.S.C. §§ 7401-7671q, as amended from time to time. Because of spillage and leakage from gasoline stored in underground tanks, however, MTBE-treated gasoline was released into the ground, contaminating groundwater supplies. MTBE causes water to assume a foul smell and taste, and has been identified as an animal carcinogen and a possible human carcinogen. In 1990, Congress identified MTBE as one of several additives that gasoline suppliers might use to satisfy new federal oxygenate requirements set forth in amendments to the Clean Air Act, calling for the creation of a “reformulated gasoline” program. In 2005, however, Congress ended that program.

In this suit, the City sought to recover from Exxon for harm caused by the company’s introduction of gasoline containing MTBE into a system of water wells in Queens known as the Station Six Wells. Although not currently operative, the City alleged that the Station Six Wells are a significant component of its overall plan to deliver potable water to its residents without interruption over many years to come. Without significant treatment of the water drawn by those wells, the City would be unable to rely on their eventual use, and it alleged that this inability constituted a serious and compensable harm under various State tort law and other legal theories.

Because of the matter’s complexity, the trial proceeded in several phases. Phase I of the trial addressed whether the City established that it intends in good faith to *79 use the Station Six Wells as a source of drinking water in the future. The jury-answered that question in the affirmative.

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725 F.3d 65, 43 Envtl. L. Rep. (Envtl. Law Inst.) 20171, 2013 WL 3863890, 77 ERC (BNA) 1254, 2013 U.S. App. LEXIS 15229, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-methyl-tertiary-butyl-ether-mtbe-products-liability-litigation-ca2-2013.