In re Methyl Tertiary Butyl Ether ("Mtbe") Prod.

Decision Date20 August 2001
Docket NumberNo. 00-Civ. 1898(BS).,00-Civ. 1898(BS).
Citation175 F.Supp.2d 593
PartiesIn re: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION
CourtU.S. District Court — Southern District of New York

Morris A. Ratner, Lieff, Cabraser, Heimann & Bernstein, LLP, New York City, for Liaison Counsel.

Lewis J. Saul, Jon Hinck, Lewis Saul & Associates, P.C., Washington, DC, Robert Gordon, Mitchell M. Breit, John M. Broaddus, Weitz & Luxenberg, P.C., New York City, A. Hoyt Rowell, Ness, Motley, Loadholt, Richardson & Poole, Mt. Pleasant, SC, for the Berisha and La Susa Plaintiffs.

Morris A. Ratner, Elizabeth J. Cabraser, Lieff, Cabraser, Heimann & Bernstein, LLP, New York City, Joe R. Whatley, Jr., Whatley Drake, L.L.C., Birmingham, AL, Dennis C. Reich, Reich & Binstock, Houston, TX, Timothy Crowley, Crowley & Douglas, Houston, TX, A. Hoyt Rowell, T. Christopher Tuck. Ness, Motley, Loadholt, Richardson & Poole, Mt. Pleasant, SC, C. Anthony Graffeo, Cory, Watson, Crowder & Degaris, Birmingham, AL, Mitchell A. Toups, Weller, Green, McGown & Toups, Beaumont, TX, for the Young Plaintiffs.

Stephen M. Tillery, Steven A. Katz, Michael B. Marker, Carr, Korein, Tillery, et al., Belleville, IL, Scott Summy, Celeste Evangel, Cooper & Scully, PC, Dallas, TX, for the England Plaintiffs.

Kenneth F. McCallion, Goodkind Labaton Rudoof & Sucharow LLP, New York City, for the Berrian Plaintiffs.

Peter Sacripanti, McDermott, Will & Emery, New York City, for Liaison Counsel.

Robert H. Shulman, Mindy G. Davis, Brent H. Allen, Howrey Simon Arnold & White LLP, Washington, DC, Christopher S. Colman, Rebecca L. Batchelder, Amerada

Hess Corporation, Woodbridge, NJ, for Amerada Hess Corp.

Richard C. Godfrey, J. Andrew Langan, Mark S. Lillie, Kirkland & Ellis, Chicago, IL, for Atlantic Richfield Co.

Richard C. Godfrey, J. Andrew Langan, Mark S. Lillie, Kirkland & Ellis, Chicago, IL, for BP Corp. North America, Inc. & Amoco Oil Co.

Richard E. Wallace, Jr., Anthony F. King, Peter C. Condron, Wallace King Marraro & Branson, Washington, DC, Dan E. Ball, Edward Cohen, Roman Wuller, Thompson Coburn LLP, St. Louis, MO, for Chevron USA, Inc.

Nathan P. Eimer, Pamela R. Hanebutt, Lisa S. Meyer, Eimer Stahl Klevorn & Solberg, Chicago, IL, for Citgo Petroleum Corp.

Dan H. Ball, Edward Cohen, Roman Wuller, Thompson Coburn LLP, St. Louis, MO, for Conoco, Inc.

Robert H. Shulman, Mindy G. Davis, Brent H. Allen, Howrey Simon Arnold & White, Washington, DC, Robert E. Kelley, Jr., Houston, TX, for El Paso CGP Co.

Richard E. Wallace, Jr., Anthony F. King, Peter C. Condron, Wallace King Marraro & Branson, Washington, DC, for Equilon Enterprises, LLC.

Peter Sacripanti, Craig H. Zimmerman, James A. Pardo, McDermott, Will & Emery, New York City, Dan H. Ball, Edward Cohen, Roman Wuller, Thompson Coburn LLP, St. Louis, MO, David B. Weinstein, Kimberly Staffa Mello, Bales & Weinstein, P.A., Tampa, FL, for Exxon Mobil Corp.

Richard E. Wallace, Jr., Anthony F. King, Peter C. Condron, Wallace King Marraro & Branson, Washington, DC, for Motiva Enterprises, LLC.

Robert H. Shulman, Mindy G. Davis, Brent H. Allen, Howrey Simon Arnold & White, Washington, DC, for Phillips Petroleum Co.

Richard E. Wallace, Jr., Anthony F. King, Peter C. Condron, Wallace King Marraro & Branson, Washington, DC, John E. Galvin, Fox Galvin, LLC, St. Louis, MO, for Shell Oil Co. and Shell Oil Products Co.

John S. Guttmann, Sy Gruza, Heather Andrade, Beveridge & Diamond, P.C., Washington, DC, for Sunoco, Inc. (R & M).

Richard E. Wallace, Jr., Anthony F. King, Peter C. Condron, Wallace King Marraro & Branson, Washington, DC, for Texaco Inc. and Texaco Refining and Marketing, Inc.

Kenneth Pasquale, Melvin A. Brosterman, Christine Fitzgerald, Stroock, Stroock & Lavan LLP, New York City, for Tosco Corp.

Edward S. Weltman, Jonathan Price, Christopher J. Garvey, Schneck Weltman & Hashmall LLP, New York City, for United Refining Corp.

Kenneth M. Bialo, Matthew McCoy, Baker Botts LLP, New York City, for Valero Marketing and Supply Co.

OPINION AND ORDER

SCHEINDLIN, District Judge.

I. INTRODUCTION

This consolidated multi-district litigation comprises several putative class actions brought on behalf of private well-owners seeking relief from the contamination or threatened contamination of their wells. Although the allegations of each action are somewhat different, the common charge is essentially the same: defendants, petroleum companies doing business throughout the United States, knowingly caused the widespread contamination of groundwater as a result of their use of a gasoline additive known as methyl tertiary butyl ether ("MTBE").1 Although certain named plaintiffs seek compensatory and/or punitive damages, the relief sought by the putative classes consists primarily of a court-supervised program of MTBE testing, monitoring, education, and, where appropriate, the provision of clean water and/or remediation.

Now before this Court are defendants' motions to dismiss.2 For the reasons set forth below, defendants' motions are denied in part and granted in part.

II. FACTUAL BACKGROUND3
A. MTBE

MTBE is a chemical compound designed to increase the oxygen content of gasoline. It is produced from methanol and isobutylene, a by-product of the gasoline-refining process. See MC ¶ 39. MTBE is highly soluble and travels faster and farther in water than other gasoline components. See id. ¶¶ 37, 48, 49. As a result, whenever MTBE is released into the environment it has the ability to infiltrate underground water reservoirs and contaminate wells drawing from underground aquifers. See id. ¶ 49. MTBE's foul taste and odor render water unusable and unfit for human consumption. See id. ¶ 51. The chemical make-up of MTBE also allows it to persist in underground aquifers for decades at a time. See id. ¶ 50. MTBE is a known animal carcinogen that has been linked to many potential human health problems. See id. ¶ 54. The United States Environmental Protection Agency ("EPA") has classified MTBE as a possible human carcinogen. See id.

Every year over nine million gallons of gasoline with MTBE escape into the environment during transportation, storage, sale or use in the United States. See id. ¶ 56. Thousands of gallons also enter the ground from gas stations due to consumer overfills of gas tanks, as well as jobber overfills of underground storage tanks ("UST's"). See id. ¶ 58. In addition, MTBE can reach the ground through rainfall.4 See id. ¶ 60.

B. The Reformulated Gasoline Program

In 1990, Congress established the Reformulated Gasoline Program ("RFG Program") in section 211(k), 42 U.S.C. § 7545(k), of the Clean Air Act ("CAA"), 42 U.S.C. §§ 7401 et seq. The RFG Program was enacted to help reduce ozone forming volatile organic compounds ("VOC's") and emissions of toxic air pollutants. See 42 U.S.C. § 7545(k)(1). In furtherance of this purpose, the RFG Program requires the use of reformulated gasoline in the nine largest metropolitan areas with the most severe summertime ozone levels and other ozone non-attainment areas that opt into the program.5 See 42 U.S.C. § 7545(k)(6) and (10)(D). Section 7545(k)(1) directs the EPA, the agency charged with overseeing the RFG Program, to issue regulations

requir[ing] the greatest reduction in emissions of ozone forming volatile organic compounds (during the high ozone season) and emissions of toxic air pollutants during the entire year achievable through the reformulation of conventional gasoline, taking into consideration the cost of achieving such emission reductions, any non air-quality and other air-quality related health and environmental impacts and energy requirements.

42 U.S.C. § 7545(k)(1). In contrast with conventional gasoline, reformulated gasoline is required to contain an increased chemical oxygen content, enabling the fuel to burn cleaner and thus reduce the emission of VOC's. The RFG Program requires that reformulated gasoline consist of at least 2.0% oxygen by weight. See 42 U.S.C. § 7545(k)(2). The CAA also requires that gasoline contain 2.7% oxygen by weight during the wintertime in areas that are not in attainment for the NAAQS for carbon monoxide. See 42 U.S.C. § 7545(m).

In order to meet the required oxygen level, gasoline manufacturers add oxygenates such as MTBE to the gasoline. See MC ¶ 40. Gasoline with MTBE has been certified by the EPA for use in the RFG Program pursuant to section 7545(k)(4) and MTBE is currently the oil industry's "oxygenate of choice." Id. ¶ 130. Today, MTBE comprises up to 15% of every gallon of gasoline sold in the designated nonattainment areas. See id. ¶ 131.

C. Defendants' Knowledge and Activities

Defendants began manufacturing, distributing and selling gasoline containing MTBE in the late 1970's. See id. ¶ 41. By the mid-1980's, MTBE was in widespread use in high-octane gasoline. See id. ¶ 42. After the enactment of the RFG Program, defendants began adding MTBE to gasoline in much greater concentrations, typically 11 to 15%. See id. ¶ 43.

1. Defendants' Knowledge of the Threat to Groundwater Caused by MTBE

Plaintiffs allege that the defendants were aware or should have been aware of the threat to groundwater caused by adding MTBE to gasoline. Defendants were aware of specific incidents of MTBE groundwater contamination as early as 1980. See id. ¶¶ 66-70, 73-74. By 1984, defendants, including Exxon,6 Shell and Chevron, were exchanging information concerning MTBE contamination in Maryland, New York, and Rhode Island dating back to 1978. See id. ¶ 74. In March 1987, defendants became aware of MTBE contamination in six different locations along the eastern seaboard. See id. ¶ 75. In addition, defendants had knowledge of two major incidents in Liberty, New York and East Patchogue, New York, occurring respectively in 1988 and 1990. See id. ¶¶ 76-77, 79.

Defendants were also cognizant of scientific studies describing the dangers of MTBE....

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