In re: MTBE Products Liability Litigation

Jul 26: In the U.S. Court of Appeals, Second Circuit, Case Nos. 10-4135 & 10-4329. The Appeals Court explains that After an eleven-week bellwether trial and years of related litigation, the District Court entered a $104.69 million judgment for the City of New York, the New York City Water Board, and the New York City Municipal Water Finance Authority (collectively, the City) and against Exxon Mobil Corporation, Exxon Mobil Oil Corporation, and Mobil Corporation (collectively, Exxon). The jury found Exxon liable under New York tort law for contaminating City-owned wells in Queens by its release of the chemical methyl tertiary butyl ether (MTBE), which Exxon used as a gasoline additive from the mid-1980s through the mid-2000s, and whose use New York State banned as of 2004.

 

    On appeal, Exxon challenges the verdict, arguing primarily that the City's common law claims are preempted by the Federal Clean Air Act, which, from the mid-1990s through 2004, required use of gasoline oxygenates, such as MTBE, in New York City. Exxon also argues that because (among other reasons) the jury projected MTBE levels equal to the State's maximum contaminant level, the City's injury was not legally cognizable; that the City's action was not ripe for adjudication (or alternatively, that it was barred by the statute of limitations); that the City failed sufficiently to prove the elements of negligence, trespass, public nuisance, and failure-to-warn; and that the District Court erred in its handling of alleged jury misconduct. On cross-appeal, the City faults the District Court for instructing the jury to offset its damages award by the cost of remediating pre-existing contamination, and for its ruling that, as a matter of law, the City was not entitled to an award of punitive damages. The Appeals Court affirmed the decision of the District Court in its entirety.

 

    The Appeals Court concludes, "To summarize: We conclude that the state law tort verdict against Exxon is not preempted by the federal Clean Air Act. We conclude that the jury's finding that the MTBE levels in Station Six Wells will peak at 10 ppb in 2033 -- the MCL for MTBE since 2004 -- is not inconsistent with a conclusion that the City has been injured. We conclude that the City's suit was ripe because the City demonstrated a present injury, and that the City's suit was not barred by the statute of limitations. We conclude that the jury's verdict finding Exxon liable under state tort law theories is not precluded by the jury's concurrent conclusion that the City had not carried its burden, in the design-defect context, of demonstrating a feasible, cost-reasonable alternative to MTBE available to satisfy the standards of the now repealed Reformulated Gasoline Program. We conclude that Exxon's demand for a retrial because of an incident of juror misconduct is unavailing. And we conclude that the jury properly offset the gross damages award by amounts it reasonably

attributed to cleanup of contaminants other than MTBE, and that the City was not entitled to a jury determination of Exxon's liability for punitive damages."

 

    Access the complete 117-page opinion (click here). [#Air, #Water, #Toxics, #Drink, #CA2]