In re Methyl Tertiary Butyl Ether (Mtbe) Products

• Court: U.S. District Court — Southern District of New York
• Writing for the Court: Scheindlin
• Citation: In re Methyl Tertiary Butyl Ether (Mtbe) Products, 402 F.Supp.2d 434 (S.D. N.Y. 2005)
• Decision Date: 31 May 2005
• Docket Number: MDL No. 1358(SAS),M21-88.,No. 1:00-1898.,1:00-1898.
• Parties: In re: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION This document relates to: California-American Water Co. v. Atlantic Richfield Co., et al., No. 04 Civ. 4974; City of Fresno v. Atlantic Richfield Co., et al., No. 04 Civ. 4973; City of Riverside v. Atlantic Richfield Co., et al., No. 04 Civ. 4969; City of Roseville v. Atlantic Richfield Co., et al., No. 04 Civ. 4971; Quincy Community Services District v. Atlantic Richfield Co., et al., No. 04 Civ. 4970; Silver, et al. v. Alon USA Energy, Inc., et al., No. 04 Civ. 4975; People of State of California, et al., v. Atlantic Richfield Co., et al., No 04 Civ. 4972.

402 F.Supp.2d 434

In re: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION

This document relates to: California-American Water Co. v. Atlantic Richfield Co., et al., No. 04 Civ. 4974;

City of Fresno v. Atlantic Richfield Co., et al., No. 04 Civ. 4973;

City of Riverside v. Atlantic Richfield Co., et al., No. 04 Civ. 4969;

City of Roseville v. Atlantic Richfield Co., et al., No. 04 Civ. 4971;

Quincy Community Services District v. Atlantic Richfield Co., et al., No. 04 Civ. 4970;

Silver, et al. v. Alon USA Energy, Inc., et al., No. 04 Civ. 4975;

People of State of California, et al., v. Atlantic Richfield Co., et al., No 04 Civ. 4972.

No. 1:00-1898.

MDL No. 1358(SAS)

M21-88.

United States District Court, S.D. New York.

May 31, 2005.

Victor M. Sher, Todd E. Robbins, Sher Leff LLP, San Francisco, CA, Scott Summy, Celeste A. Evangelisti, Baron & Budd, P.C., Dallas, TX, for California-American Water Co., City of Riverside, City of Roseville, Quincy Community Services District, Martin Silver, Pauline Silver, Laura Silver, John T. Kruso, Dennis A. Kruso, Stephen L. Kruso, Diane K. Crandall, Adrian Kruso, Sacramento County Water Agency, Sacramento Groundwater Authority, Citrus Heights Water District, Del Paso Manor Water District, Fair Oaks Water District, Florin Resource Conservation District, Rio Linda Elverta Community

Water District, Sacramento Suburban Water District, San Juan Water District, and City of Sacramento.

Michael D. Axline, Miller, Axline & Sawyer, P.C., Sacramento, CA, for City of Fresno.

Robert Gordon, Stanley N. Alpert, C. Sanders McNew, Weitz & Luxenberg, P.C., New York, NY, for Plaintiffs.

Peter John Sacripanti, James A. Pardo, Stephen J. Riccardulli, McDermott, Will & Emery LLP, New York, NY, for Defendants.

OPINION AND ORDER

SCHEINDLIN, District Judge.

I. INTRODUCTION

The California Plaintiffs¹ seek relief from the actual and/or threatened contamination of their water supply with the gasoline additive methyl tertiary butyl ether ("MTBE"). Plaintiffs assert, among others, causes of action under California Civil Code § 1882.² Defendants now move to dismiss the section 1882 claims, arguing that the provision does not apply to the alleged contamination of water. In addition, defendants move to strike plaintiffs' prayers for treble damages and attorneys' fees pursuant to section 1882.2 of the California Civil Code and section 1021.5 of the California Code of Civil Procedure.³ Defendants' motion is granted for the reasons that follow.

II. LEGAL STANDARD

A. Motion to Dismiss

Under Rule 12(b)(6), a motion to dismiss should be granted only if "`it appears beyond doubt that the plaintiff can prove no set of facts in support of [its] claim which would entitle [it] to relief.'"<sup>4</sup> At the motion to dismiss stage, the issue "`is not whether a plaintiff is likely to prevail ultimately, but whether the claimant is entitled to offer evidence to support the claims. Indeed it may appear on the face of the pleading that a recovery is very remote and unlikely but that is not the test.'"⁵ The task of the court in ruling on a Rule 12(b)(6) motion is "merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof."⁶ When deciding a motion to dismiss, courts must accept all factual allegations in the complaint as true, and draw all reasonable inferences in plaintiff's favor.⁷

B. Motion to Strike

Federal Rule of Civil Procedure 12(f) permits the Court to "order stricken from any pleading any insufficient defense or any redundant, immaterial, impertinent, or scandalous matter."⁸ Courts are generally "very reluctant to determine disputed or substantial issues of law on a motion to strike."⁹ A motion to strike on the ground that the matter is impertinent and immaterial should be denied "`unless it can be shown that no evidence in support of the allegation would be admissible.' "¹⁰ "Immaterial" matter is that which has no essential or important relationship to the claim for relief, and "impertinent" material consists of statements that do not pertain to, and are not necessary to resolve, the disputed issues.¹¹

III. DISCUSSION

A. California Civil Code §§ 1882-1882.6

Section 1882.1 of the California Civil Code provides:

A utility may bring a civil action for damages against any person who commits, authorizes, solicits, aids, abets, or attempts any of the following acts:

(a) Diverts, or causes to be diverted, utility services by any means whatsoever.

(b) Makes, or causes to be made, any connection or reconnection with property owned or used by the utility to provide utility service without the authorization or consent of the utility.

(c) Prevents any utility meter, or other device used in determining the charge for utility services, from accurately performing its measuring function by tampering or by any other means.

(d) Tampers with any property owned or used by the utility to provide utility services.

(e) Uses or receives the direct benefit of all, or a portion, of the utility service with knowledge of, or reason to believe that, the diversion, tampering, or unauthorized connection existed at the time of the use, or that the use or receipt, was without the authorization or consent of the utility.¹²

Section 1882 defines "tamper" as "to rearrange, injure, alter, interfere with, or otherwise to prevent from performing normal or customary function."¹³ The term "utility service" is defined as "the provision of electricity, gas, water, or any other service or commodity furnished by the utility for compensation."¹⁴

Defendants argue that plaintiffs' claims must be dismissed because section 1882.1 does not apply to the contamination of water. They contend that the statute's plain language and legislative history demonstrate that it addresses tampering with equipment used to provide utility services.¹⁵ Specifically, they argue that the phrase "property ... to provide utility services" does not include groundwater, and that the word "tamper" does not encompass contamination of groundwater. According to defendants, plaintiffs are seeking redress for injuries to the water itself, rather than to "property owned or used" by them to provide that water.

Plaintiffs respond that groundwater constitutes "property... used to provide utility services" because plaintiffs have usufructuary rights in the water pumped by their wells, and they "use" it to deliver potable drinking water to consumers. Plaintiffs argue that defendants' characterization of the section 1882 claims as seeking a recovery for injury to the water itself, improperly conflates raw groundwater with the finished, treated, potable water that plaintiffs deliver to their customers' taps. In addition, they assert that contamination is covered by the term "tamper" because it constitutes "injury" to, "alteration" of and/or "interference" with property under state law. Hence, the central dispute between the parties concerns the meaning of the words "property" and "tamper" as used in section 1882.1 of the Civil Code.

Under California law, in construing the meaning of a statute, courts "look first to the words the Legislature used, giving them their usual and ordinary meaning. If there is no ambiguity in the language of the statute, then the Legislature is presumed to have meant what it said, and the plain meaning of the language governs."¹⁶ However,

the `plain meaning' rule does not prohibit a court from determining whether the literal meaning of a statute comports with its purpose or whether such a construction of one provision is consistent with other provisions of the statute. The meaning of a statute may not be determined from a single word or sentence; the words must be construed in context, and provisions relating to the same subject matter must be harmonized to the extent possible. [] Literal construction should not prevail if it is contrary to the legislative intent apparent in the statute.¹⁷

The term "property" is not defined in section 1882, and plaintiffs' argument regarding its usufructuary rights cannot be dismissed out of hand. "The concept of property in California is extremely broad .... [and] is sufficiently comprehensive to include every species of estate, real and personal, and everything which one person can own and transfer to another...."¹⁸ "Ownership is not a single concrete entity but a bundle of rights and privileges as well as of obligations."¹⁹ "The authorities in [California] have uniformly defined the right to appropriative water as a possessory property right."²⁰ Therefore, under a liberal interpretation of the word "property," plaintiffs' usufructuary rights would be covered by the statute.

Nonetheless, the term "property" cannot be interpreted in isolation. When read in conjunction with the rest of section 1882.1, it is plain that the word "property" in subsection (d) does not mean property rights, but rather the physical object to which those rights attach — in this case, the instruments used to provide utility services (e.g., pipes, pumps, and meters). Subsection (d) prohibits tampering with any "property owned or used by the utility...." This "property" must be capable of both ownership and use because "property" cannot have one meaning when paired with "owned" and another when paired with "used." Plaintiffs' proffered definition is logical when coupled with the latter but not the former. While plaintiffs might exercise or "use" their usufructuary rights to provide water to customers, they cannot "own" or have property rights in usufructuary rights. Moreover, subsection (d) is not the only place where the term "property" is employed. Subsection (b) also makes it actionable to connect or reconnect one's utility service with "property owned or used by the utility...." This use of the word "property" only makes sense with respect to tangible objects, and not legal rights. Finally, all the provisions of section 1882.1 relate to the...