State v. Atlantic Richfield Company

2016 VT 22, 142 A.3d 215, 201 Vt. 343, 2016 WL 3031662, 2016 Vt. LEXIS 22
CourtSupreme Court of Vermont
DecidedFebruary 12, 2016
Docket2015-204
StatusPublished
Cited by30 cases

This text of 2016 VT 22 (State v. Atlantic Richfield Company) is published on Counsel Stack Legal Research, covering Supreme Court of Vermont primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. Atlantic Richfield Company, 2016 VT 22, 142 A.3d 215, 201 Vt. 343, 2016 WL 3031662, 2016 Vt. LEXIS 22 (Vt. 2016).

Opinion

Reiber, C.J.

¶ 1. This interlocutory appeal requires us to examine the contours of the “stream-of-commerce” doctrine of personal jurisdiction, which was introduced by the U.S. Supreme Court in a 1980 decision but later divided the Court with respect to its scope. Defendant Total Petrochemicals & Refining USA, Inc. (TPRI) challenges a decision of the superior court, civil division, denying its motion to dismiss, for lack of personal jurisdiction, plaintiff State of Vermont’s complaint alleging that TPRI, along with twenty-eight other defendants, contaminated the waters of the state by introducing into those waters a gas additive called methyl tertiary butyl ether (MTBE). We affirm.

¶ 2. In June 2014, the State filed a seventy-six-page complaint in the superior court alleging that the decision of the twenty-nine defendants, all major oil and chemical companies, to manufacture MTBE or to refine, blend, or supply gasoline containing MTBE, and/or to promote, market, or distribute the sale of such gasoline, knowing that it would reach and contaminate the waters of the State of Vermont, caused widespread degradation — as well as a threat of future harm — to both surface water and groundwater within the state. The complaint stated that, compared to other gasoline constituents, MTBE contaminates and spreads in water *346 more quickly and resists removal and treatment, thereby presenting a particularly serious threat to state waters. The complaint also stated that defendants were aware of, but concealed, the risks associated with using the additive in gasoline. The complaint set forth nine causes of action, including actions for restoration of damaged natural resources and groundwater in violation of 10 V.S.A. §§ 1390 and 1410, public and private nuisance, trespass, negligence, strict liability for design defect and failure to warn, and civil conspiracy. Among other things, the State sought compensation for damages to natural resources and for the costs of investigating, monitoring, and remediating those damages, as well as injunctive and equitable relief and punitive damages.

¶ 3. In August 2014, TPRI filed a motion to dismiss the complaint for lack of personal jurisdiction, arguing that the company did not have the required minimum contacts with Vermont and that asserting personal jurisdiction over it would violate traditional notions of fair play and substantial justice. Along with the motion, TPRI filed an affidavit of its senior manager for financial accounting, who averred, among other things, that: (1) TPRI is a Delaware corporation engaged in petroleum refining and the manufacture of petrochemicals, with headquarters in Houston, Texas, and facilities in Texas, Louisiana, Colorado, Connecticut, and Alabama; (2) TPRI has never been registered with the Vermont Secretary of State and has never been qualified to do business in the State of Vermont; (3) TPRI has never maintained employees or an office in Vermont and has never entered into a contract with any distributor for the delivery of MTBE, or gasoline containing MTBE, into Vermont; (4) “TPRI never refined gasoline containing MTBE, manufactured MTBE, blended MTBE, supplied gasoline containing MTBE, or otherwise made, marketed, advertised, stored, or sold any product containing MTBE in Vermont”; and (5) from 2006 to the present, only 0.0013% of TPRI’s total revenue came from Vermont sales.

¶ 4. In its opposition to TPRI’s motion to dismiss, the State argued that TPRI should be subject to personal jurisdiction in Vermont because it had knowingly placed its fungible commercial products in a national distribution system that included Vermont. Along with its memorandum of law opposing TPRI’s motion, the State submitted an affidavit of its expert, a senior vice-president of an energy and chemicals advisory business, discussing how gasoline is manufactured and distributed to retail gas stations in *347 the United States and in particular the Northeast and Vermont. The expert explained that gasoline from refineries is commingled in pipelines and sent to various distribution centers, where it is moved by other means of transportation to retail gas stations. The expert focused in particular on the distribution of gasoline into the East Coast market and from there into New England and Vermont. The expert opined that although it is impossible to determine the origin of any given gallon of gasoline because of its fungible nature and commingling in transport, over time any supplier of gasoline into the East Coast market will have supplied gasoline throughout the entire supply system, including New England and Vermont.

¶ 5. Thus, according to the expert, it was “reasonable to conclude” that refiners supplying MTBE-gasoline to the East Coast distribution system understood the fungible nature of the gasoline they produced and the likelihood that, over time, they were supplying MTBE-gasoline to the northern terminus of the Colonial Pipeline in New Jersey and onward to New England and Vermont. The expert identified three activities by TPRI that linked that company to the supply of MTBE-gasoline in Vermont: (1) blending MTBE-gasoline in New Jersey storage tanks, some of which was more likely than not to have ended up in Vermont; (2) manufacturing MTBE-gasoline in its Texas refinery and shipping it on to the Colonial Pipeline, where more likely than not some of it found its way into Vermont; and (3) selling MTBE to numerous national gasoline marketers over a twenty-year period ending in 2007, with the reasonable expectation that its MTBE would be distributed nationally, including in New England and Vermont.

¶ 6. The State also argued, in the alternative, that if the superior court deemed its submission in opposition to TPRPs motion to dismiss insufficient for the court to exercise personal jurisdiction over TPRI, it should be given the opportunity to engage in discovery on the question of jurisdiction. In response to the State’s opposition to its motion, TPRI argued that the undisputed facts and controlling law precluded the State of Vermont from asserting personal jurisdiction over it. TPRI asked the court to deny the State’s request for discovery on the jurisdictional question, arguing that the State was not entitled to discovery because it had failed to make a prima facie case by asserting any specific, nonconclusory facts that could establish personal jurisdiction.

*348 ¶ 7. Following oral argument on TPRI’s motion to dismiss, the superior court denied the motion in a January 16, 2015 decision. The court ruled that “[bjecause TPRI undisputedly manufactured neat MTBE and MTBE gasoline and sold those products to national distributors who in turn distributed those products for sale in the northeast market, including in Vermont, TPRI has sufficient contacts with the State of Vermont for the exercise of personal jurisdiction over it with respect to alleged injuries resulting from the sale of MTBE gasoline in Vermont.” On May 22, 2015, in response to TPRI’s motion for reconsideration, the court reiterated that personal jurisdiction was established in Vermont because “TPRI took active steps in sending its products through the Colonial Pipeline from Texas to New Jersey and conducted activities in New Jersey that actively directed its products for distribution and use throughout the entire northeastern United States gasoline market, including Vermont, such that it could have been foreseen being haled into court in Vermont as a destination state.”

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Cite This Page — Counsel Stack

Bluebook (online)
2016 VT 22, 142 A.3d 215, 201 Vt. 343, 2016 WL 3031662, 2016 Vt. LEXIS 22, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-atlantic-richfield-company-vt-2016.