IN RE METHYL TERTIARY BUTYL ETHER LIABILITY

• Decision Date: 16 November 2009
• Docket Number: Master File No. 1:00-1898. MDL No. 1358 (SAS). No. M21-88.
• Parties: In re METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION. This document relates to: Orange County Water District, v. Unocal, et al., 04 Civ. 4968.
• Court: U.S. District Court — Southern District of New York

676 F.Supp.2d 139

In re METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION This document relates to: Orange County Water District, v. Unocal, et al., 04 Civ. 4968.

Master File No. 1:00-1898. MDL No. 1358 (SAS). No. M21-88.

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

November 16, 2009.

Michael Axline, Esq., Tracey O'Reilly, Esq., Miller, Axline & Sawyer, Sacramento, CA, for Orange County Water District.

Matthew T. Heartney, Esq., Arnold & Porter LLP, Los Angeles, CA, for Atlantic Richfield Company and BP Products North America, Inc.

Robin Greenwald, Esq., Robert Gordon, Esq., Weitz & Luxenberg, P.C., New York, NY, for Plaintiffs.

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

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge:

I. INTRODUCTION

In this consolidated multi-district litigation ("MDL"), plaintiffs seek relief from contamination, or threatened contamination, of groundwater from various defendants' use of the gasoline additive methyl tertiary butyl ether ("MTBE") and/or tertiary butyl alcohol ("TBA"), which is a product formed by the natural degradation of MTBE in water. The parties have already engaged in extensive motion practice, and familiarity with the Court's previous opinions is assumed.¹ In this case, plaintiff Orange County Water District ("OCWD"), which is responsible for maintaining groundwater quality, alleges that defendants' use and handling of MTBE has resulted in contamination and threatened future contamination of groundwater within its geographic region.

Defendants have moved for summary judgment on the ground that OCWD's common law claims are time-barred. OCWD filed this action on May 6, 2003, and a three-year statute of limitations is in effect. The parties dispute when the statute of limitations begins to run.

OCWD argues that the statute of limitations does not begin to run until MTBE contamination escapes remedial efforts undertaken by other government agencies that OCWD contends must respond before it does to reported MTBE releases. However, because OCWD's common law claims are based on its property rights in the groundwater within its geographic region, its claims accrue when that groundwater is appreciably harmed, and not when OCWD begins to remediate that harm. OCWD's property rights are not dependent on remedial efforts by other agencies.

OCWD was appreciably harmed as a matter of law when MTBE was detected in monitoring wells at or above California's Maximum Contaminant Level ("MCL"). Most releases occurring prior to May 6, 2000, resulted in such contamination before that date. As a result, the vast majority of OCWD's common law claims are time-barred. However, with regard to three specific releases, there is a genuine issue of material fact as to whether OCWD should have been aware that it had suffered appreciable harm. OCWD's common law claims based on these releases may be timely if the statute of limitations was tolled by the discovery rule. Finally, OCWD is entitled to proceed with its common law claims for injuries it suffered due to releases occurring after May 6, 2000.

II. BACKGROUND

A. Procedural History

In 2006, defendants first moved for summary judgement on the ground that OCWD's claims are time-barred.² In deciding that motion, I divided the causes of action into three categories based on the date that MTBE was released at a particular site. I denied defendants' motion for summary judgment "as to claims arising from releases which occurred after May 6, 2000."³ I granted the motion "as to claims arising from releases which occurred prior to May 6, 2000, where OCWD acted in response to an MTBE contamination."⁴

With respect to releases which occurred prior to May 6, 2000, but where OCWD had not acted in response to an MTBE contamination, I invited further briefing on two issues: "(1) which of those releases did not result in appreciable harm before May 6, 2000, either because the MTBE did not reach the groundwater or because MTBE was not detected at a level that required, or should have required, OCWD to take action; and (2) whether the statute of limitations should be tolled based on the discovery rule."⁵ The parties have now fully briefed those issues.

In this round of briefing, defendants originally argued that both OCWD's common law and statutory claims were time-barred.⁶ Since that time, OCWD amended its complaint so that with respect to its statutory claims it only seeks "to recover reasonable costs actually incurred since May 6, 2000" and "declaratory relief with respect to future expenses it may incur."⁷ In response, defendants have withdrawn their summary judgment motion with respect to OCWD's claims under the Orange County Water District Act.⁸

B. Facts

1. OCWD

While OCWD owns many monitoring wells (i.e., wells used to monitor groundwater contamination), unlike other plaintiffs in this MDL, OCWD does not own any production wells (i.e., wells used to provide water to the public).⁹ OCWD is a "special water agency" created by California statute and charged with the responsibility to "maintain, replenish, and manage groundwater resources" within its geographic area.¹⁰ OCWD is statutorily authorized to "prevent interference with ... or diminution... or pollution or contamination" of that groundwater.¹¹ OCWD is also empowered "to conduct any investigations of the quality of the surface and groundwaters within the district ... to determine whether those waters are contaminated or polluted" and to "expend available funds to perform any cleanup, abatement, or remedial work required under the circumstances."¹²

2. OCWD'S Regulatory Context

OCWD is one of several agencies with concurrent oversight of the water supply in and around its service area. California's State Water Resources Control Board is comprised of nine regional water boards, including the Santa Ana Regional Water Quality Control Board ("Regional Board").¹³ The Regional Board's territory encompasses several water districts, including OCWD.¹⁴ The Orange County Health Care Agency ("OCHCA") is a regional public health agency tasked with investigation and remediation of certain MTBE spill sites.¹⁵

While it is undisputed that the legislature envisioned that the water agencies would work in concert with one another to remediate water contamination, the exact nature of the relationship among OCWD and the other regulatory agencies presents an unresolved question of fact.¹⁶ Primarily on the basis of the 1989 Memorandum of Understanding ("MOU") between OCWD and the Regional Board,¹⁷ OCWD asserts that "it relies upon the Regional Board and local oversight authorities to initiate `first responses' to reported MTBE releases."¹⁸ Defendants, by contrast, argue that "nothing in that MOU permits OCWD to defer action of its own while waiting to see if MTBE purportedly will escape Regional Board efforts."¹⁹ Because a reasonable fact-finder could accept either interpretation of this document, I cannot resolve this factual dispute at this stage of the litigation. However, as discussed below, the question of when OCWD's claims accrued does not depend on which agency had initial responsibility to remediate MTBE contamination.

III. APPLICABLE LAW

A. Legal Standard

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."²⁰ "`An issue of fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. A fact is material if it might affect the outcome of the suit under the governing law.'"²¹ "The burden of demonstrating that no material fact exists lies with the moving party ...."²²

In turn, to defeat a motion for summary judgment, the non-moving party must raise a genuine issue of material fact. "When the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence to go to the trier of fact on an essential element of the nonmovant's claim."²³ To do so, the non-moving party must do more than show that there is "`some metaphysical doubt as to the material facts,'"<sup>24</sup> and it "`may not rely on conclusory allegations or unsubstantiated speculation.'"²⁵ However, "`all that is required from a non-moving party is that sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.'"²⁶

In determining whether a genuine issue of material fact exists, the court must "construe the evidence in the light most favorable to the non-moving party and draw all reasonable inferences" in that party's favor.²⁷ However, "it is a settled rule that `credibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not for the court on a motion for summary judgment.'"²⁸ Summary judgment is therefore "appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law."²⁹

B. California's Statute of Limitations

Because OCWD's claims arise under California law, they are governed by the three-year statute of limitations found in section 338 of the California Code of Civil Procedure.³⁰ The limitations period begins running when a plaintiffs cause of action accrues.³¹ In California, a plaintiff will be deemed to have suffered injury sufficient to give rise to a cause of action when it has suffered some "appreciable and actual harm."³² "In an action involving tortious injury to property," such as trespass or nuisance, the relevant injury is "harm to the property itself."³³ Although the harm incurred must be more than nominal, a plaintiff need not have ascertained the full scope of...