Aranosian Oil Co. v. State, 2014–0553
| Citation | 168 N.H. 322,127 A.3d 665 |
| Decision Date | 27 October 2015 |
| Docket Number | No. 2014–0553,2014–0553 |
| Parties | ARANOSIAN OIL CO., INC. & a. v. STATE of New Hampshire |
| Court | Supreme Court of New Hampshire |
168 N.H. 322
127 A.3d 665
ARANOSIAN OIL CO., INC. & a.
v.
STATE of New Hampshire
No. 2014–0553
Supreme Court of New Hampshire.
Argued: June 18, 2015
Opinion Issued: October 27, 2015
Bianco Professional Association, of Concord (James J. Bianco, Jr. and Christina A. Ferrari on the brief, and Mr. Bianco orally), and Law Office of Manning & Zimmerman, PLLC, of Manchester (Anna Goulet Zimmerman on the brief), for the petitioners.
Joseph A. Foster, attorney general (K. Allen Brooks, senior assistant attorney general, on the brief and orally), for the respondent, the State of New Hampshire.
CONBOY, J.
The petitioners, importers or distributors of oil into New Hampshire, appeal an order of the Superior Court (Brown , J.) denying their petition for declaratory judgment and equitable relief against the respondent, the State of New Hampshire. We affirm.
The Environmental Protection Agency (EPA) requires that owners of underground storage tanks demonstrate their ability to pay cleanup costs and compensate third parties for bodily injury and property damage arising out of releases of petroleum products from their tanks. See 40 C.F.R. § 280.93 (2014). New Hampshire's Oil Discharge and Disposal Cleanup Fund (ODD Fund), established in 1988, is an EPA-approved program that complies with the federal requirement. RSA ch. 146–D (Supp. 2014); see Laws 2014, 177:1 (repealing RSA chapter 146–D, eff. July 1, 2025). The purpose of the ODD Fund is
to establish financial responsibility for the cleanup of oil discharge and disposal,
and to establish a fund to be used in addressing the costs incurred by the owners of underground storage facilities and bulk storage facilities for the cleanup of oil discharge and disposal, to protect groundwater, and for reimbursement for third party damages.
RSA 146–D:1.
The ODD Fund operates as an excess insurance fund. An owner of an underground storage facility is eligible to receive reimbursements from the fund only to the extent that costs and damages incurred by the owner exceed the policy limits of the owner's private insurance. RSA 146–D:6, III (amended 2015). Each underground storage facility owner is subject to a statutory deductible ranging from $5,000 to $30,000 based upon the number of facilities owned, and to a reimbursement cap of $1,500,000. RSA 146–D:6, II, III (amended 2015). In addition, the underground storage facility owner must be in compliance with state law. RSA 146–D:6, I (amended 2015).
The ODD Fund is financed by a fee upon imported oil. RSA 146–D:3, I (amended 2015). The fee is paid on a per gallon basis by distributors who import oil into New Hampshire. RSA 146–D:3, II (amended 2015). The fee currently is $.015 per gallon. Id. The ODD Fund is capped at $10,000,000, at which point the fees are "discontinued and only reestablished when the fund's balance is less than $5,000,000." Id. Since 1988, when the ODD Fund was established, fees have been suspended twice, once from December 1996 through July 1998, and again from September 1999 through December 2000.
In 2003, the State sued several gasoline suppliers, refiners, and chemical manufacturers seeking damages for groundwater contamination allegedly caused by methyl tertiary butyl ether (MTBE), an oxygenate added to gasoline to increase the octane levels of fuels. See State v. Exxon Mobil Corp., 168 N.H. –––, ––––, 2015 WL 5766678 (2015) (Exxon MTBE litigation). The petitioners were not parties to that lawsuit. Prior to trial, the State settled with all defendants except Exxon Mobil Corporation and ExxonMobil Oil Corporation (collectively, Exxon). Id. at ––––. The State received $136,510,120 from those settlements. The case went to trial against Exxon in 2013. Id. at ––––. The jury determined that the State's total damages from groundwater contamination due to MTBE are $816,768,018. Id. at ––––. The jury determined that $142,120,005 of those damages were attributable to past cleanup costs. Id. at ––––. The jury found that Exxon's market share for gasoline in New Hampshire during the applicable time period was 28.94% and, accordingly, the trial court entered an amended verdict of total damages against Exxon in the amount of $236,372,644. Id. at ––––. We affirmed the verdict on appeal. See id. at ––––.
In 2012, the petitioners brought a petition for declaratory judgment and equitable relief against the State. Each petitioner is a " ‘distributor’ " of oil under RSA chapter 146–D and paid fees into the ODD Fund. They alleged that "[t]o date, the costs of MTBE remediation in the State of New Hampshire has been paid for primarily through" the ODD Fund, and that that fund is financed, in part, through fees that they paid. The petitioners sought a declaration that those fees "are unconstitutional as the [State] has
recovered and/or will recover funds from the MTBE Lawsuit for the cost of MTBE remediation," and that those fees should be reimbursed to them from: (1) "the settlement proceeds the [State] has received and will receive through the MTBE Litigation"; (2) "any future recovery the [State] receives
through the MTBE Litigation"; and (3) "[a]dditionally, or in the alternative, ... from the funds recovered, and/or to be recovered in the future in the MTBE Litigation, ... under principles of equitable subrogation and/or unjust enrichment."
The parties stipulated to the following facts. The petitioners paid $29,493,100.15 into the ODD Fund from December 1989 through December 2012. All but three petitioners sold gasoline to both third-party customers and gas stations that they own or with which they are affiliated. When a petitioner sold gasoline to a third party, the petitioner included the $.015 per gallon fee in the invoice. For the gasoline provided to gas stations that a petitioner owned or with which it was affiliated, there was not an invoiced charge for the $.015 per gallon fee. From 1996 to the end of 2012, the petitioners have collectively received $15,334,855 in reimbursements from the ODD Fund. From its inception in 1988, through the end of fiscal year 2013, ODD Fund income totaled $221,705,908. Of that total, $142,120,005 was spent on cleanup and remediation of MTBE. The balance of the ODD Fund income was spent on administrative costs, and cleanup and remediation costs unrelated to MTBE, or remains in the ODD Fund.
Following a two-day bench trial, the trial court denied the petition. The court found that the petitioners lacked standing to seek reimbursement out of the settlement funds because "the petitioners were not parties to the settlement agreements, nor did they raise any objection at the time they were approved by the Court." Assuming that the petitioners' claims were ripe with respect to the verdict money in the Exxon MTBE litigation, the trial court rejected their claims that payments made by them into the ODD Fund although not unconstitutional at the time they were paid, have been rendered unconstitutional by the State's recovery in the MTBE litigation. The trial court reasoned:
The parties do not dispute that the cleanup and remediation from MTBE contamination is far from complete: the jury found that the State was entitled to $674,648,013 in damages for MTBE remediation which the State had yet to undertake. Thus, even if the Supreme Court upholds the $236,372,664 verdict against ExxonMobil, the total recovery by the State from all settling and non-settling defendants would only total $372,882,784, which is far short of the funds needed to remediate already-identified MTBE contamination. It also far exceeds the current ... ODD ... Fund [ ] balance, and the $29,493,100.15 paid into the ODD Fund by the
petitioners since the Fund's inception[.] Accordingly, the fees paid by the petitioners are not grossly disproportionate to "the costs incurred by the owners of underground storage facilities and bulk storage facilities for the cleanup of oil discharge and disposal, to protect groundwater, and for reimbursement for third party damages," RSA 146–D:1, and are not retroactively unconstitutional.
The court concluded that "[b]ecause the petitioners' constitutional claim underpins their equitable claims, and the Court finds the fund fees are not unconstitutional, the doctrine of sovereign immunity bars the petitioners' equitable claims."
On appeal, the petitioners argue that the trial court erred in ruling that they lack standing to seek reimbursement of their fees from the settlement funds. They also argue that the trial court erred in ruling that their equitable claims are barred by sovereign immunity. Subsidiary to that claim, they argue that the court erred by "failing to find that the State's use of the settlement funds recovered in the MTBE
litigation to set up a new bureaucracy ... [is] unconstitutional," and that the court's denial of a remedy violates their constitutional rights...
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