In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig.

CourtU.S. Court of Appeals — Second Circuit
Writing for the CourtSUSAN L. CARNEY
CitationIn re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig., 725 F.3d 65 (2nd Cir. 2013)
Decision Date26 July 2013
Docket NumberDocket Nos. 10–4135–cv, 10–4329–cv.
PartiesIn re METHYL TERTIARY BUTYL ETHER (“MTBE”) PRODUCTS LIABILITY LITIGATION.

OPINION TEXT STARTS HERE

Paul D. Clement, Bancroft PLLC, Washington, DC (Traci L. Lovitt, Nicholas W. Haddad, Jones Day, New York, NY; Peter John Sacripanti, James A. Pardo, Lauren E. Handel, McDermott Will & Emery LLP, New York, NY, on the brief), for DefendantsAppellantsCross–Appellees Exxon Mobil Oil Corporation, Exxon Mobil Corporation, and Mobil Corporation.

Paul M. Smith, Jenner & Block LLP, Washington, DC (Susan E. Amron, Assistant Corporation Counsel, New York City Law Department, New York, NY; Victor M. Sher, Sher Leff LLP, San Francisco, CA, on the brief), for PlaintiffsAppelleesCross–Appellants the City of New York, the New York City Water Board, and the New York City Municipal Water Finance Authority.

Donald W. Fowler, Eric G. Lasker, Hollingsworth LLP, Washington, DC; Donald D. Evans, American Chemistry Council, Washington, DC; Thomas J. Graves, American Coatings Association, Inc., Washington, DC; Quentin Riegel, National Association of Manufacturers, Washington, DC; Elizabeth Milito, NFIB Small Business Legal Center, Washington, DC; Robin S. Conrad, National Chamber Litigation Center, Inc., Washington, DC, for amici curiae American Chemistry Council, American Coatings Association, the National Association of Manufacturers, the NFIB Small Business Legal Center, and the Chamber of Commerce of the United States of America, in support of DefendantsAppellants–Cross–Appellees.

Joseph R. Guerra, James R. Wedeking, Sidley Austin LLP, Washington, DC, for amici curiae National Petrochemical and Refiners Association and American Petroleum Institute, in support of DefendantsAppellants–Cross–Appellees.

Michael B. Mukasey, Anne E. Cohen, Debevoise & Plimpton LLP, New York, NY; Hugh F. Young, Jr., Product Liability Advisory Council, Inc., Reston, VA, for amicus curiae The Product Liability Advisory Council, Inc., in support of DefendantsAppellants–Cross–Appellees.

Michael E. Wall, Natural Resources Defense Council, San Francisco, CA, Johanna Dyer, Natural Resources Defense Council, New York, NY, for amicus curiae Natural Resources Defense Council, in support of PlaintiffsAppellees–Cross–Appellants.

Paula T. Dow, Attorney General of New Jersey, George N. Cohen, Richard F. Engel, Deputy Attorneys General, Trenton, NJ; Michael Axline, Miller, Axline & Sawyer, Sacramento, CA, for amicus curiae New Jersey Department of Environmental Protection, in support of PlaintiffsAppellees–Cross–Appellants.

Before: PARKER, HALL, and CARNEY, Circuit Judges.

SUSAN L. CARNEY, Circuit Judge:

+-----------------+
                ¦Table of Contents¦
                +-----------------¦
                ¦                 ¦
                +-----------------+
                
+----------------------------------+
                ¦I.¦BACKGROUND                 ¦79 ¦
                +----------------------------------+
                
+------------------------------------------------------------------------+
                ¦    ¦A.  ¦MTBE and Its Effects                                   ¦80    ¦
                +----+----+-------------------------------------------------------+------¦
                ¦    ¦B.  ¦The Clean Air Act and the Reformulated Gasoline Program¦81    ¦
                +----+----+-------------------------------------------------------+------¦
                ¦    ¦C.  ¦The City's Water–Supply System                         ¦81    ¦
                +----+----+-------------------------------------------------------+------¦
                ¦    ¦D.  ¦The City's Claims                                      ¦82    ¦
                +----+----+-------------------------------------------------------+------¦
                ¦    ¦E.  ¦The Trial                                              ¦83    ¦
                +------------------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦1. ¦Phase I: Future Use of the Station Six Wells          ¦83     ¦
                +----+----+---+------------------------------------------------------+-------¦
                ¦    ¦    ¦2. ¦Phase II: Peak MTBE Concentration in the Station Six  ¦85     ¦
                ¦    ¦    ¦   ¦Wells                                                 ¦       ¦
                +----+----+---+------------------------------------------------------+-------¦
                ¦    ¦    ¦3. ¦Phase III: Liability and Statute of Limitations       ¦86     ¦
                +----------------------------------------------------------------------------+
                
+-----------------------------------------------------+
                ¦   ¦   ¦  ¦a.¦Injury                            ¦87  ¦
                +---+---+--+--+----------------------------------+----¦
                ¦   ¦   ¦  ¦b.¦Causation                         ¦88  ¦
                +---+---+--+--+----------------------------------+----¦
                ¦   ¦   ¦  ¦c.¦Damages                           ¦89  ¦
                +---+---+--+--+----------------------------------+----¦
                ¦   ¦   ¦  ¦d.¦Statute of Limitations            ¦90  ¦
                +---+---+--+--+----------------------------------+----¦
                ¦   ¦   ¦  ¦e.¦Phase III Jury Verdict            ¦91  ¦
                +-----------------------------------------------------+
                
+------------------------------------------+
                ¦  ¦F.¦Punitive Damages               ¦91  ¦
                +--+--+-------------------------------+----¦
                ¦  ¦G.¦Juror Misconduct               ¦94  ¦
                +--+--+-------------------------------+----¦
                ¦  ¦H.¦Post–Trial Motions             ¦95  ¦
                +------------------------------------------+
                
+---------------------------------------------------+
                ¦   ¦                                          ¦    ¦
                +---+------------------------------------------+----¦
                ¦II.¦DISCUSSION                                ¦95  ¦
                +---------------------------------------------------+
                
+------------------------------------------+
                ¦  ¦A.¦Preemption                     ¦95  ¦
                +------------------------------------------+
                
+----------------------------------------------------------------+
                ¦    ¦   ¦1.¦Federal Preemption of State Law              ¦96    ¦
                +----+---+--+---------------------------------------------+------¦
                ¦    ¦   ¦2.¦Conflict Preemption: the Impossibility Branch¦97    ¦
                +----------------------------------------------------------------+
                
+----------------------------------------------------------------------------+
                ¦    ¦    ¦   ¦a. ¦The Import of the Jury's Finding on the City's    ¦98     ¦
                ¦    ¦    ¦   ¦   ¦Design–Defect Claim                               ¦       ¦
                +----+----+---+---+--------------------------------------------------+-------¦
                ¦    ¦    ¦   ¦b. ¦Considering Ethanol as a Possible Alternative to  ¦100    ¦
                ¦    ¦    ¦   ¦   ¦MTBE                                              ¦       ¦
                +----------------------------------------------------------------------------+
                
+---------------------------------------------------------+
                ¦   ¦   ¦3.¦Conflict Preemption: the Obstacle Branch¦101  ¦
                +---+---+--+----------------------------------------+-----¦
                ¦   ¦   ¦4.¦Tortious Conduct Beyond Mere Use of MTBE¦103  ¦
                +---------------------------------------------------------+
                
+------------------------------------------+
                ¦  ¦B.¦Legal Cognizability of Injury  ¦104 ¦
                +------------------------------------------+
                
+----------------------------------------------------+
                ¦   ¦   ¦1.¦Standing                            ¦105 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦Injury As a Matter of New York Law  ¦107 ¦
                +----------------------------------------------------+
                
+-----------------------------------------------------------------------+
                ¦    ¦C.  ¦Ripeness and Statute of Limitations                   ¦109   ¦
                +----+----+------------------------------------------------------+------¦
                ¦    ¦D.  ¦Sufficiency of the Evidence as to Injury and Causation¦112   ¦
                +-----------------------------------------------------------------------+
                
+---------------------------------------------------------------------+
                ¦    ¦   ¦1. ¦The Jury's 10 ppb MTBE Peak Concentration Finding¦113   ¦
                +----+---+---+-------------------------------------------------+------¦
                ¦    ¦   ¦2. ¦The Jury's Consideration of Market Share Evidence¦115   ¦
                +---------------------------------------------------------------------+
                
+------------------------------------------+
                ¦  ¦E.¦New York Law Claims            ¦117 ¦
                +------------------------------------------+
                
+----------------------------------------------------+
                ¦   ¦   ¦1.¦Negligence                          ¦117 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦Trespass                            ¦119 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦3.¦Public Nuisance                     ¦121 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦4.¦Failure to Warn                     ¦123 ¦
                +----------------------------------------------------+
                
+----------------------------------------------------------+
                ¦   ¦F. ¦Juror Misconduct                            ¦125  ¦
                +---+---+--------------------------------------------+-----¦
                ¦   ¦G. ¦The City's Cross–Appeals for Further Damages¦126  ¦
                +----------------------------------------------------------+
                
+----------------------------------------------------+
                ¦   ¦   ¦1.¦Compensatory Damages Offset         ¦126 ¦
                +---+---+--+------------------------------------+----¦
                ¦   ¦   ¦2.¦Punitive Damages                    ¦127 ¦
                +----------------------------------------------------+
                
+-------------------------------------------------------------------+
                ¦    ¦                                                       ¦      ¦
                +----+-------------------------------------------------------+------¦
                ¦III.¦CONCLUSION                                             ¦130   ¦
                +-------------------------------------------------------------------+
                

Exxon Mobil Corporation, Exxon Mobil Oil Corporation, and Mobil Corporation (collectively, “Exxon”) appeal from an amended judgment entered in favor of the City of New York, the New York City Water Board, and the New York City Municipal Water Finance Authority (collectively, “the City”) on September 17, 2010, in the United States District Court for the Southern District of...

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