Maryland v. Exxon Mobil Corp., CIVIL ACTION NO. ELH-18-0459

Citation352 F.Supp.3d 435
Decision Date24 October 2018
Docket NumberCIVIL ACTION NO. ELH-18-0459
Parties State of MARYLAND, Plaintiff, v. EXXON MOBIL CORPORATION, et al., Defendants
CourtU.S. District Court — District of Maryland

Adam Dean Snyder, Brian E. Frosh, Matthew Spencer Zimmerman, Sari Mandel Levin, Stephanie D. Cobb Williams, State of Maryland Office of the Attorney General, Baltimore, MD, Nathaniel Paul Short, Scott E. Kauff, Law Offices of John K. Dema, P.C., Rockville, MD, John K. Dema, Law Offices of John K. Dema PC, Christiansted, VI, Michael Axline, Miller and Axline PC, Sacramento, CA, Tyler E. Wren, Berger and Montague PC, Philadelphia, PA, for Plaintiff.

Ava E. Lias Booker, Melissa O. Martinez, Candace Ali Blydenburgh, Jonathan Paul Harmon, McGuireWoods LLP, John Bucher Isbister, William W. Carrier, III, Tydings and Rosenberg LLP, Joseph William Hovermill, Alexander Peter Creticos, Joseph Lanham Beavers, Miles and Stockbridge PC, Daniel J. Donovan, Donovan and Rainie LLC, Michael Alan Brown, Nelson Mullins Riley & Scaborough LLP, Ezra Gollogly, Kramon and Graham PA, Baltimore, MD, Carlos Bollar, Daniel R. Farino, Archer & Greiner P.C., Haddonfield, NJ, James Franklin Sanders, Neal and Harwell PLC, Nashville, TN, Michael P. Cullen, Apex Oil Company, Inc., Erika M. Anderson, Meghan E. Ball, Dowd Bennett LLP, St. Louis, MO, Amanda A. Jacobowski, Andrew R. Running, Benjamin O'Connor, J. Andrew Langan, Kirkland and Ellis LLP, Lisa S. Meyer, Nathan P. Eimer, Pamela R. Hanebutt, Eimer Stahl LLP, Chicago, IL, Daniel C. Sale, King & Spalding LLP, Laura Robinson Kaufman, Matthew R. Thurlow, Baker & Hostetler LLP, Michelle Ciszak Pardo, Duane Morris LLP, Brian Burgess, Goodwin Procter LLP, James R. Wedeking, Sidley Austin LLP, Brian A. Scotti, Gordon Rees Scully Mansukhani LLP, John S. Guttmann, Beveridge and Diamond PC, Peter C. Condron, Crowell & Moring LLP, Christopher Danley, Joshua Frank, Martha S. Thomsen, Baker Botts LLP, Alphonse Michael Alfano, Jeffrey Laurence Leiter, Bassman Mitchell Alfano and Leiter Chtd., Connor Mullin, Stanley E. Woodward, Jr., Akin Gump Strauss Hauer and Feld LLP, Michael D. Goodstein, Anne E. Lynch, Van Ness Feldman LLP, Meagan Elizabeth Roach, Buchanan Ingersoll and Rooney PC, Michelle Ciszak Pardo, Duane Morris LLP, Gary C. Adler, Clark Hill PLC, Jerry Stouck, Greenberg Traurig LLP, Daniella Adar Einik, Jones Day, Washington, DC, Charles Correll, King and Spalding LLP, San Francisco, CA, James J. Maher, Jeremiah J. Anderson, Gabriel Kaim, Jessica G. Farley, Stephen C. Dillard, Norton Rose Fulbright US LLP, Christopher H. Domingo, Diane Myers, Jones Day, Gabriel Kaim, Jessica G. Farley, Stephen C. Dillard, Houston, TX, Chad W. Higgins, Portland, ME, Mark E. Tully, Goodwin Procter LLP, James Messenger, Gordon Rees Scully Mansukhani LLP, Traci Lovitt, Jones Day, Boston, MA, John McMeekin, Susan M. Dean, Rawle and Henderson LLP, Philadelphia, PA, Stephen Riccardulli, Buchanan Ingersoll and Rooney PC, David Kahne, Francis Healy, Melvin A. Brosterman, Stroock and Stroock and Lavan LLP, James Pardo, McDermott Will and Emery LLP, New York, NY, Katherine Katchen, Akin Gump Strauss Hauer and Feld LLP, Philadelphia, PA, Brian L. Zagon, VanNess Feldman LLP, Lafayette, CA, Courtney Jones Kieffer, Elizabeth F. Griffin, Michael Andrew Walsh, Clark Hill PLC, Dallas, TX, for Defendants.

MEMORANDUM OPINION

Hon. Ellen L. Hollander, United States District JudgeThe State of Maryland ("State" or "Maryland") filed a 168-page Complaint in the Circuit Court for Baltimore City against approximately sixty-five defendants, seeking to redress the alleged contamination of the State's waters with methyl tertiary butyl ether ("MTBE"), an oxygenate additive that was commonly blended into gasoline in the 1980s and 1990s. ECF 2 (Complaint). Defendant Atlantic Richfield Company ("ARCO") removed this case to federal court. ECF 1. Thereafter, the State filed a Motion to Remand (ECF 283), supported by a memorandum (ECF 283-1) (collectively, "Remand Motion"), and many exhibits. Defendants have filed an opposition to the Remand Motion (ECF 299), along with numerous exhibits.1

The State has replied. ECF 303.2

No hearing is necessary to resolve the Remand Motion. See Local Rule 105-6. For the reasons that follow, I shall deny the Remand Motion.

I. BACKGROUND
A. MTBE and Water Contamination

MTBE is a chemical compound made by combining methanol (a derivative of natural gas) and isobutylene (a by-product of the gasoline-refining process). ECF 2, ¶ 103. It was commonly blended into gasoline in the 1980s and 1990s as an "oxygenate" and "octane enhancer" to reduce carbon monoxide tailpipe emissions. Id. ¶¶ 107, 117–129. Compared with other oxygenates like ethanol, MTBE was inexpensive to manufacture because it was made from readily available refinery byproducts. Id. ¶¶ 103, 127.

Gasoline is made by processing crude oil at a refinery. Id. ¶ 105. It is then transported through pipelines, tank ships, and barges to "common storage tanks" located at terminals around the country. Id. ¶ 106. From there, it is further "transshipped" by pipeline or other means to "secondary terminals" or "depots," and then taken by trucks to gas stations for retail sale. Id. MTBE was blended into the gasoline at the refinery itself, or "splash blended" at terminals by adding it to truck tanks after those tanks were filled with gasoline from the terminal. Id. ¶ 105. Because MTBE-enhanced gasoline is fungible, batches were frequently comingled from different sources during the production and distribution process. Id. ¶¶ 99–100.

MTBE allegedly enters the environment "through disposals, deposits, releases, leaks, overfills, spills, discharges and evaporative releases," and is "principally release[d]" while in underground storage tanks or during delivery. Id. ¶¶ 1, 109. When released, MTBE is highly soluble in groundwater, spreads rapidly, does not naturally degrade, resists removal and treatment from groundwater, and is difficult to locate. Id. ¶¶ 2, 110–11, 113. It can also migrate into subsurface-soil regions and penetrate into aquifers. Id. ¶¶ 112, 114. For these reasons, the State claims that MTBE "is and has been more difficult and more expensive to remove from groundwater than other contaminants." Id. ¶ 114.

The United States Geological Survey has reported that MTBE is the "second most frequently detected volatile organic chemical in groundwater in the United States." Id. ¶ 130. Around the United States, MTBE has been detected in "over 20% of aquifers tested in places where high MTBE-content gasoline was used." Id. MTBE has also been found in "varying concentrations and at varying times" in public water systems and private drinking-water wells in Maryland. Id. ¶¶ 218, 220. Studies allegedly show that MTBE "is a probable human carcinogen," can cause "significant adverse health effects when ingested," and "can render drinking water putrid and unfit for human consumption." Id. ¶¶ 4, 137.

B. History of MTBE Use and Legislative Background

In 1979, before defendants allegedly knew the harmful effects of MTBE, the Administrator of the United States Environmental Protection Agency ("EPA") granted a waiver for the use of 7% MTBE in unleaded gasoline, finding that MTBE as a fuel additive did not cause or contribute to the failure of any emission control device or system. Id. ¶¶ 117, 134; Application for Methyl Tertiary Butyl Ether, Decision of the Administrator, 44 Fed. Reg. 12,242, 12,243 (Mar. 6, 1979). The market demand for MTBE and MTBE-blended gasoline began around the same time and grew rapidly, continuing well into the 1990s. ECF 2, ¶¶ 117, 125. By 1996, MTBE "ranked second among all organic chemicals produced in the United States, with virtually the entire production going into gasoline." Id. ¶ 129.

Growth in the MTBE market was encouraged by the 1990 Clean Air Act Amendments, which established the Reformulated Gasoline Program ("RFG Program"). Clean Air Act Amendments of 1990, Pub. L. No. 101–549, 104 Stat. 2399 (1990) ("CAA"), § 219(k). The RFG Program required the use of reformulated gasoline containing at least 2.0% oxygen by weight in designated ozone "non-attainment" areas of the country, meaning areas that do not meet the national ambient air quality standards ("NAAQS") for ozone. Id. § 219(k)(2)(B). Subsequent EPA regulations included MTBE as one of several oxygenates to be used in the testing of reformulated gasoline. See, e.g. , Use of Alternative Analytical Test Methods in the Reformulated Gasoline Program, 40 C.F.R. § 80.46(g), 61 Fed. Reg. 58304, 58306 (Nov. 13, 1996). Portions of Maryland were subject to the RFG Program. ECF 2, ¶ 122.

The 1990 Amendments also authorized EPA's initiation of the Oxygenated Fuel Program ("OF Program"), which required gasoline in some metropolitan regions to contain at least 2.7% oxygen by weight to reduce carbon monoxide during the fall and winter months. CAA, § 219(m). The State alleges that MTBE-blended gasoline sold in non-attainment areas often exceeded the minimum oxygenate requirements in the RFG and OF programs, and was even used in the regions that were not participating in the RFG program. ECF 2, ¶ 124.

By 2000, the federal government recognized the dangers of the release of MTBE into groundwater and took initial steps to consider eliminating it as a fuel additive. See Methyl Tertiary Butyl Ether (MTBE); Advance Notice of Intent to Initiate Rulemaking Under the Toxic Substances Control Act to Eliminate or Limit the Use of MTBE as a Fuel Additive in Gasoline, 65 Fed. Reg. 16,094 (Mar. 24, 2000). Around this time, several states had "taken actions designed to limit the use of MTBE in gasoline." Id. at 16,097. Many lawsuits alleging MTBE contamination were filed and consolidated before the United States District Court for the Southern District of New York. In re Methyl Tertiary Butyl Ether Prods. Liab. Litig. v. Atlantic Richfield Co. , MDL No. 1358, 2000 U.S. Dist. LEXIS 14901, at *4 (J.P.M.L. Oct. 10, 2000).

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