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

46 F. Supp. 3d 440, 2014 WL 4631416
District Court, S.D. New York·Decided September 16, 2014·No. Master File No. 1:00-1898; MDL No. 1358 (SAS); No. M21-88·Published·Cited by 2 cases

Opinion

OPINION AND ORDER

SHIRAA. 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 [443]*443ether (“MTBE”) and/or tertiary butyl alcohol, a product formed by the breakdown of MTBE in water. In this case, plaintiff Orange County Water District (the “District”), which is charged with maintaining groundwater quality, 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.1

Currently before the Court is a motion for summary judgment brought by Atlantic Richfield Company (“ARCO”), BP West Coast Products LLC, and BP Products North America, Inc. (collectively, the “BP Defendants”), and Shell Oil Company, Equilon Enterprises LLC, and Texaco Refining and Marketing Inc. (collectively, the “Shell Defendants”)2 on the ground that the District’s claims are precluded under the doctrine of res judicata. For the reasons stated below, the motion is GRANTED.

II. BACKGROUND3

A. Prior Lawsuits Against Defendants

In January 1999, the Orange County District Attorney (“OCDA”) initiated two civil actions in Orange County Superior Court, each on behalf of the State of California, alleging that defendants were responsible for unauthorized releases of MTBE gasoline from underground storage tanks they owned, operated, and/or supplied throughout Orange County, resulting in contamination of Orange County soil and groundwater.4 One suit named ARCO as a defendant; the other suit named Shell Oil Company as a defendant.5 In October 2000, the OCDA filed a First Amended Complaint in the action against ARCO (“BP FAC”), adding BP Amoco as a defendant.6 The BP FAC contained additional allegations regarding the health and environmental risks of releases of MTBE gasoline into Orange County groundwater.7 The BP FAC stated that the OCDA seeks to “compel defendants to cleanup ... groundwater contamination ... caused by ... [MTBE] which contamination constitutes a continuing nuisance ... recover damages ... protect the environment and [ ] prevent the destruction of groundwater resources.”8 The BP FAC asserted claims for equitable relief, damages, and penalties, based on claims for public nuisance and violations of California’s Health & Safety Code, Fish & Game Code, and [444]*444Business & Professions Code.9 In April 2001, the OCDA filed a First Amended Complaint (“Shell FAC”) in the action against Shell Oil Company containing similar additional allegations.10 The OCDA asserted the same claims in the Shell FAC as in the BP FAC.11

B. The District

The District “is' a special water agency created ... to maintain, replenish, and manage groundwater resources.” 12 The District does not own groundwater, but it does own- “land overlying groundwater at various locations within the District” and claims to have “water rights therein.”13

Though not a party to the OCDA’s suits, the District was familiar with and actively monitored them.14 For instance, the District circulated a copy of the BP FAC, a press release from the OCDA, and newspaper articles about the lawsuit to its water producers and board of directors.15 The District also communicated with the OCDA regarding the suits and provided the OCDA with “technical assistance” to aid “in the enforcement of cleanup of MTBE and other petroleum contaminants from leaking gasoline storage tanks in Orange County.”16 The District was present for at least one meeting, perhaps more, with the OCDA regarding the OCDA’s suits17 and, in a separate correspondence, stated that it “support[ed] the efforts of the DA to expedite cleanup actions by the responsible parties.”18

C. Resolution of the OCDA’s Litigation

On December 17, 2002, the Orange County Superior Court entered a Final Judgment Pursuant to Stipulation and Order Thereon (“BP Final Judgment”), settling all of the OCDA’s claims against the BP Defendants.19 The settlement constituted “a release from any known or unknown past or present claims, violations, or causes of action that were or could have been asserted in the First Amended Complaint” with regard to MTBE contamination.20 Pursuant to the terms of the BP Final Judgment, the BP Defendants agreed to reimburse OCDA’s investigation costs and to fund and implement a plume delineation program.21 The BP Defendants also became subject to injunctive relief, which remained in effect for five [445]*445years following entry of the BP Final Judgment.22 BP stopped adding MTBE to gasoline produced in California the same month that the BP Final Judgment was entered.23

On January 5, 2005, the Orange County Superior Court entered a Final Judgment Pursuant to Stipulation and Order Thereon in the action against the Shell Defendants (the “Shell Final Judgment”), settling the OCDA’s claims against the Shell Defendants.24 The relief provided to the OCDA in the Shell Final Judgment was similar to that of the BP Final Judgment, including compensation for investigation costs, the funding of a plume delineation program, and injunctive relief.25 Unlike the BP Final Judgment, however, the Shell Final Judgment stated that “the Plaintiff does not intend for [the Shell] Final Judgment to serve to legally bar ... any ... action ... of ... the Orange County Water District.... Plaintiff does not include, and the Orange County District Attorney does not represent, any water district....”26

The day the Orange County Superior Court entered the Shell Final Judgment, counsel for the District appeared in court to oppose the entry of the judgment on the ground that the District had litigation pending over MTBE contamination against the Shell Defendants.27 Accordingly, the District requested time to brief a petition to intervene, but the Orange County Superior Court denied the District’s request.28 The Shell Defendants opposed the intervention, stating on the record that the intervention attempt was untimely.29 The OCDA opposed the District’s intervention as well but stated that the OCDA “[does not] believe that we’re in privity with the Water District.”30 In denying the District’s request and entering the Shell Final Judgment, the judge made no factual findings, stating: “I make no findings about the effect of this settlement on any other action. I’ll let an appropriate court at an appropriate time make those determinations.” 31

[446]*446D.

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In re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation, 46 F. Supp. 3d 440, 2014 WL 4631416 (S.D.N.Y. 2014).

46 F. Supp. 3d 440 (In re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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