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MTBE Appeals Decision

MTBE Appeals Decision

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Published by Celeste Katz
MTBE Appeals Decision
MTBE Appeals Decision

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Published by: Celeste Katz on Jul 26, 2013
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12/05/2013

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10-4135-cv (L), 10-4329-cv (XAP)In re: MTBE Prods. Liability Litig.
United States Court of Appeals
FOR THE SECOND CIRCUIT August Term, 2011(Argued: May 23, 2012 Decided: July 26, 2013) Docket Nos. 10-4135-cv (L), 10-4329-cv (XAP) I
N RE
:
 
M
ETHYL
T
ERTIARY 
B
UTYL
E
THER
(“MTBE”)
 
P
RODUCTS
L
IABILITY 
L
ITIGATION
 B e f o r e:P
 ARKER
,
 
H
 ALL
, and C
 ARNEY 
,
Circuit Judges
. _____________________________  After an eleven-week bellwether trial and years of related litigation, the DistrictCourt entered a $104.69 million judgment for the City of New York, the New YorkCity Water Board, and the New York City Municipal Water Finance Authority(collectively, the “City”) and against Exxon Mobil Corporation, Exxon Mobil OilCorporation, and Mobil Corporation (collectively, “Exxon”). The jury found Exxonliable under New York tort law for contaminating City-owned wells in Queens by itsrelease of the chemical methyl tertiary butyl ether (“MTBE”), which Exxon used asa gasoline additive from the mid-1980s through the mid-2000s, and whose use New York State banned as of 2004. On appeal, Exxon challenges the verdict, arguingprimarily that the City’s common law claims are preempted by the federal Clean Air Act, which, from the mid-1990s through 2004, required use of gasolineoxygenates, such as MTBE, in New York City. Exxon also argues that because(among other reasons) the jury projected MTBE levels equal to the State’smaximum contaminant level, the City’s injury was not legally cognizable; that theCity’s action was not ripe for adjudication (or alternatively, that it was barred bythe statute of limitations); that the City failed sufficiently to prove the elements of negligence, trespass, public nuisance, and failure-to-warn; and that the DistrictCourt erred in its handling of alleged jury misconduct. On cross-appeal, the Cityfaults the District Court for instructing the jury to offset its damages award by the
Case: 10-4135 Document: 218-1 Page: 1 07/26/2013 1000469 117
 
cost of remediating pre-existing contamination, and for its ruling that, as a matterof law, the City was not entitled to an award of punitive damages. For the reasonsset forth below, we AFFIRM the decision of the District Court in its entirety. ___________________________ P
 AUL
D.
 
C
LEMENT
,
 
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 
),
forDefendants-Appellants-Cross-Appellees ExxonMobil Oil Corporation, Exxon Mobil Corporation,and Mobil Corporation
.P
 AUL
M.
 
S
MITH
, Jenner & Block LLP, Washington,DC (Susan E. Amron, Assistant CorporationCounsel, New York City Law Department, New York, NY; Victor M. Sher, Sher Leff LLP, SanFrancisco, CA,
on the brief 
),
for Plaintiffs- Appellees-Cross-Appellants the City of New York,the New York City Water Board, and the New YorkCity Municipal Water Finance Authority
.Donald W. Fowler, Eric G. Lasker, HollingsworthLLP, Washington, DC; Donald D. Evans, AmericanChemistry 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 LegalCenter, Washington, DC; Robin S. Conrad,National Chamber Litigation Center, Inc.,Washington, DC,
for
amici curiae
AmericanChemistry Council, American Coatings Association,the National Association of Manufacturers, theNFIB Small Business Legal Center, and theChamber of Commerce of the United States of  America, in support of Defendants-Appellants-Cross-Appellees.
Joseph R. Guerra, James R. Wedeking, Sidley Austin LLP, Washington, DC,
for
amici curiae2
Case: 10-4135 Document: 218-1 Page: 2 07/26/2013 1000469 117
 
National Petrochemical and Refiners Associationand American Petroleum Institute, in support of Defendants-Appellants-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 Defendants- Appellants-Cross-Appellees.
Michael E. Wall, Natural Resources DefenseCouncil, San Francisco, CA, Johanna Dyer, NaturalResources Defense Council, New York, NY,
for
amicus curiae
Natural Resources Defense Council,in support of Plaintiffs-Appellees-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 Plaintiffs- Appellees-Cross-Appellants
. _______________________________ Table of ContentsI. BACKGROUND..................................................8 A.MTBE and Its Effects.......................................9B.The Clean Air Act and the Reformulated Gasoline Program.......11C.The Citys Water-Supply System.............................12D.The Citys Claims..........................................14E.The Trial................................................161.Phase I: Future Use of the Station Six Wells..............162.Phase II: Peak MTBE Concentrationin the Station Six Wells.............................193.Phase III: Liability and Statute of Limitations............23a.Injury........................................24b.Causation.....................................26c.Damages......................................293
Case: 10-4135 Document: 218-1 Page: 3 07/26/2013 1000469 117

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