Koch v. Hicks

241 F.R.D. 185, 2007 U.S. Dist. LEXIS 41680
CourtDistrict Court, S.D. New York
DecidedFebruary 20, 2007
DocketNos. 1:00-1898, MDL 1358(SAS), M 21-88
StatusPublished
Cited by9 cases

This text of 241 F.R.D. 185 (Koch v. Hicks) 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
Koch v. Hicks, 241 F.R.D. 185, 2007 U.S. Dist. LEXIS 41680 (S.D.N.Y. 2007).

Opinion

OPINION AND ORDER

SCHEINDLIN, District Judge.

I. INTRODUCTION

The Crossroads Exxon gasoline station in Fallston, Maryland, is one of hundreds of thousands of stations across the country that stores its gasoline in underground tanks. Residents and homeowners who live nearby have sued Exxon Mobil Corporation and the owner of the station (“Defendants”) because, according to the allegations, the station’s underground tanks have been leaking gasoline with methyl tertiary butyl ether (“MTBE”).1 These individual residents and homeowners have brought claims under Maryland law for (1) public nuisance, (2) private nuisance, (3) trespass to property, (4) negligence, and (5) strict liability for an abnormally dangerous activity.2 The individual plaintiffs include: (1) Hope and Frank Koch, (2) Gail and Robert Kurtz, (3) Alora Roche and her son, Drake Roche, and (4) Jennifer and Timothy Stevens.3

These individual plaintiffs (“Plaintiffs”) now move under Rule 23 of the Federal Rules of Civil Procedure for the Court to certify two subclasses and to appoint them as representatives.4 The two subclasses include:

1. Homeowner Subclass: “This class consists of all persons owning real property in the vicinity of the Crossroads Exxon who have suffered a legally cognizable injury due to the contamination, including (1) those homeowners who have experienced interference with the quiet enjoyment of their property by the actual or threatened presence of MTBE and other gasoline constituents on/in their land and in their water supply wells; (2) those homeowners whose wells have or have had detectable levels of MTBE and other gasoline constituents and whose property requires restoration or remediation; and/or (3) those homeowners whose properties have suffered diminution in market value as a result of MTBE contamination emanating from the Crossroads Exxon.”5
2. Medical Monitoring Subclass: “All persons residing in the area from 1989 until the present (inclusive) who have consumed and/or used groundwater drawn from a supply well in the vicinity of the Crossroads Exxon.” 6

For the reasons below, Plaintiffs’ motion for certification of the Homeowner Subclass is granted. The motion for certification of the Medical Monitoring Subclass is denied.

[190]*190II. BACKGROUND ON LEAKING UNDERGROUND STORAGE TANKS AND MTBE

“Each year approximately 9 million gallons of gasoline (the equivalent of a full supertanker) are released to the environment in the United States from leaks and spills, according to an estimate by the Alliance for Proper Gasoline Handling.”7 Much of this gasoline contains MTBE, a chemical compound that many companies have added to gasoline since 1979.8 “It is an oxygenate, meaning it increases the oxygen content of the gasoline. It is also a source of octane in gasoline.”9

“While the use of MTBE as a fuel additive in gasoline has helped to reduce harmful air emissions, it has also caused widespread and serious contamination of the nation’s drinking water supplies.”10 A major problem with MTBE is that it “dissolves and spreads readily in the groundwater underlying a spill site, resists biodegradation, and is difficult and costly to remove from groundwater.” 11 “It is known to be carcinogenic in animals and is potentially cancer-causing in humans, as well.”12

Underground storage tanks, or “USTs,” are among the main sources of MTBE groundwater contamination.13 In 1984, there were more than two million underground storage tanks, “most of which were located at gas stations across the country.”14 According to the General Accounting Office, “by September 2000, approximately 1.5 million tanks had been permanently closed, leaving an estimated 693,107 tanks subject to federal UST program requirements.” 15

“Leaking USTs have been identified as the likely sources of a number of the more problematic releases of MTBE to the environment, including releases that have closed water supplies in Santa Monica and Glennville, California.”16 For example, in California, “the minimum number of MTBE point sources from leaking UST sites is estimated at greater than 10,000.”17 Likewise, in this case, Plaintiffs live near underground storage tanks that they allege have been leaking gasoline with MTBE into the ground and they seek to represent two classes of people who have been harmed: The Homeowner Subclass and the Medical Monitoring Subclass.

[191]*191III. THE LAW OF THE TRANSFEROR CIRCUIT APPLIES TO CLASS CERTIFICATIONS IN MULTI-DIS-TRICT LITIGATION (“MDL”)

A threshold issue to address before considering if Plaintiffs’ proposed class should be certified is whether the law of the transferor circuit (ie., Fourth Circuit) or the law of the transferee circuit (ie., Second Circuit) should control. On January 3, 2007, this Court held in another case assigned to this MDL that the law of the' transferor circuit applies when deciding motions for class certification under Rule 23.18 Nonetheless, Defendants submit “that this Court must apply the law of the Second Circuit ... to the Plaintiffs’ Motion for Class Certification” because the Court’s previous opinion is contrary to “established” Second Circuit law.19

A. The Second Circuit’s Decision in Menowitz Does Not Establish Which Circuit’s Law Applies on a Motion for Class Certification

The primary Second Circuit case on which Defendants rely is Menowitz v. Brown,20 and there are at least two problems with this reliance. The first is that Menowitz was an appeal of a motion to dismiss-—not class certification—so it does not qualify as established Second Circuit law on the issue of which circuit’s law controls when deciding whether to certify a class under Rule 23. In fact, the decision that this Court issued on January 3, 2007, explained that “[i]n the context of pre-trial issues such as motions to dismiss or discovery disputes, section 1407 requires the application of the law of the transferee circuit where the motions are being considered.”21 But these cases do not resolve what law to apply on a class certification because “whether to certify an action on behalf of a class under Rule 23 is not merely a pretrial issue.”22

The second problem with the Defendants’ argument is it ignores the Supreme Court’s decision in Lexecon v. Milberg Weiss Bershad Hynes & Lerach23 which substantially undermines the Second Circuit’s holding in Menowitz.24 “Prior to Lexecon, the vast majority of cases were settled or resolved by summary judgment in the transferee court, or

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Bluebook (online)
241 F.R.D. 185, 2007 U.S. Dist. LEXIS 41680, Counsel Stack Legal Research, https://law.counselstack.com/opinion/koch-v-hicks-nysd-2007.