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

959 F. Supp. 2d 476, 2013 WL 3733057
CourtDistrict Court, S.D. New York
DecidedJuly 16, 2013
DocketMaster File No. 1:00-1898; MDL No. 1358 (SAS); No. M21-88
StatusPublished
Cited by12 cases

This text of 959 F. Supp. 2d 476 (In re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation) is published on Counsel Stack Legal Research, covering District Court, S.D. New York 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, 959 F. Supp. 2d 476, 2013 WL 3733057 (S.D.N.Y. 2013).

Opinion

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

This is a consolidated multi-district litigation (“MDL”) relating to contamination — actual or threatened — of groundwater from various defendants’ use of the gasoline additive methyl tertiary butyl ether (“MTBE”) and/or tertiary butyl alcohol, a product formed by the breakdown of MTBE in water. In this case, the Commonwealth of Puerto Rico (“the Commonwealth”) alleges that defendants’ use and handling of MTBE has contaminated, or threatened to contaminate, groundwater within its jurisdiction. Familiarity with the underlying facts is presumed for the purposes of this Order.

Currently before the Court are four motions to dismiss brought by Total, S.A. (“Total Umbrella”),1 Total Outre-Mer, S.A. [480]*480(“TOM”), Peerless Oil and Chemicals, Inc. (“Peerless”), and Trammo Petroleum, Inc. (“Trammo Parent”) and Trammo Caribbean, Inc. (“Trammo Operating”) (collectively, “Trammo Defendants”). Four defendants — Total Umbrella, TOM, and the Trammo Defendants — move to dismiss for lack of personal jurisdiction and failure to state a claim on various grounds. Peerless moves to dismiss for failure to state a claim on the ground that the Commonwealth’s claims are time-barred. For the reasons stated below all of these motions are GRANTED.

II. BACKGROUND

A. Facts Common to All Moving Defendants

On June 12, 2007, the Commonwealth filed its initial complaint against gasoline suppliers for supplying or trading in gasoline products containing MTBE.2 On October 31, 2007, the case was transferred to this Court as part of the MTBE MDL.3 On December 3, 2012, the Commonwealth filed its Third Amended Complaint (“TAC”) that included several additional defendants, naming Total Umbrella, TOM, Peerless, and the Trammo Defendants as new “Refiner/Supplier Defendants.” 4 The TAC alleges that “[these defendants], at all times relevant to this action, refined, marketed and/or otherwise supplied (directly or indirectly) gasoline and/or other products containing MTBE that each such Defendant knew or should have known would be delivered into Commonwealth.”5 Five counts of the TAC apply to these five defendants and allege violations of Puerto Rican law on the grounds of (1) strict products liability for defective design and failure to warn; (2) public nuisance; (3) trespass; (4) negligence; and (5) violation of Puerto Rico Public Policy Environmental Act, Water Pollution Control Act, and underground storage tank control regulations.6

B. Facts Regarding Total Umbrella 1. Undisputed Facts

Total Umbrella is a publicly held company organized under the laws of France as a société anonyme, similar to a U.S. corporation, with its corporate headquarters and principal place of business at 2, Place Jean Miller, La Défense 6, 92400 Courbevoie, France.7 Total Umbrella “has no offices in the United States or its territories and is not registered to do business in any United States jurisdiction.”8 Total Umbrella is the “parent company of the [Total] Group” and has over eight hundred subsidiary companies.9 Total Umbrella’s divisions range from “the upstream segment” — exploration, hydrocarbon production, gas, electricity, and other forms of energy — to “the downstream segment”— refining, petroleum product marketing and distribution, speciality products, and the trading and shipping of crude oil and products — to “the chemical segment” — base [481]*481chemicals and polymers, intermediates and performance polymers and specialties.10

In 2004, TPPRC, a gasoline service station network incorporated and operating in Puerto Rico,11 was purchased by TOM, a company in the Total Group.12 TPPRC is wholly owned by Total Raffmage Marketing, S.A. (“Raffinage Marketing”) in which Total Umbrella has a seventy-four percent stake.13

2. Disputed Facts

a. Total Umbrella Is a Holding Company

The Commonwealth offers three documents in support of its allegation that Total Umbrella is not a holding company but rather an “integrated company.”14 First, a 2011 SEC filing states: “With operations in more than 130 countries, TOTAL has activities in every sector of the oil industry.” 15 The form also states: “[Total Umbrella] is the fifth largest publicly traded integrated international oil and gas company in the world.”16 Second, a press release from Paris attached to a 2004 SEC form announces that: “Total has finalized an agreement to acquire one hundred service stations on the island of Puerto Rico ... they will be branded by the Total colours by the end of 2005 ... This acquisition reinforce[s] Total’s development strategy in the Caribbean.”17 The press release goes on to say that “Total’s activities cover the whole energy chain of the petroleum industry ... [and] [t]he Group is a major player in chemicals.” 18 Third, pages from Total Umbrella’s website establish that it performs operations.19

Total Umbrella denies that it is anything except a holding company. Total Umbrella’s general counsel has testified that Total Umbrella is a holding company, not an operating company.20 Further, Total Umbrella’s SEC filings state that “when we refer to the parent holding company alone, we use the term [Total Umbrella] or the Company.”21

b. Total Umbrella Was Involved in the Puerto Rico MTBE Market

The Commonwealth alleges that Total Umbrella has sufficient contacts with Puerto Rico because it “participates in the Puerto Rico MTBE market.”22 In support of this contention, the Commonwealth [482]*482offers multiple documents, mostly relating to one of Total Umbrella’s operating companies, TPPRC.

i. E-mails

In support of its jurisdictional contention, the Commonwealth points to several emails that mention or involve Total Umbrella. First, a Total Umbrella employee confirmed in an email that TPPRC is a subsidiary of the Total Group in response to a request by Peerless, a potential supplier to TPPRC, for confirmation that TPPRC is a subsidiary of the Total Group:

Further to our conversation, please note that the shares of the company GPR ... renamed (or to be renamed) [TPPRC] have recently been acquired by Total Outre Mer (a 100% subsidiary of the Total group) ... [TPPRC] is engaged in the wholesale and retail distribution of petroleum products in Puerto Rico. I understand that the company Peerless Oil & Chemicals, Inc. have [sic] been approached to be one of the suppliers of [TPPRC]. Peerless are [sic] seeking, on request of BNP Paribas in New York ... confirmation that [TPPRC] ... is a subsidiary of the Total Group.23

The email concludes:

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959 F. Supp. 2d 476, 2013 WL 3733057, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-methyl-tertiary-butyl-ether-mtbe-products-liability-litigation-nysd-2013.