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From Products Liability Law Daily, September 11, 2013

Commingled product theory not applicable to causation issues in MBTE contamination action

By Pamela C. Maloney, J.D.

The City of Fresno, California, could not rely on the judicially-created commingled product theory to prove causation in its strict liability and negligence claims against companies that supplied gasoline containing methyl tertiary butyl ether (MTBE)—a water-soluble gasoline additive—to specific stations located within its jurisdiction, the U.S. District Court for the Southern District of New York ruled (In re: Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation (City of Fresno v. Chevron U.S.A., Inc.)), September 10, 2013, Scheindlin, S.). The court also determined that the three-year statute of limitations applicable to claims for tortious injury to property barred the city’s remaining claims against gasoline and MTBE suppliers.

Background. The City of Fresno sought damages from a number of companies that refined, manufactured, supplied, distributed, handled, and/or used MTBE in their gasoline to pay the costs to remove MTBE pollution from drinking water supplies and to cover the costs of site assessments. Following settlements and stipulated dismissals with respect to a number of defendants, three groups remained: (1) the Causation Defendants seeking dismissal of strict liability and negligence claims because Fresno failed to prove that their products caused or threatened to cause damage to the water supply; (2) the Limitations Defendants seeking dismissal of all claims against them arising out of MTBE contamination at certain stations as time-barred by California’s three-year statute of limitations; and (3) the Nuisance Defendants, whose claims were mooted as a result of the resolution of the other Defendants’ motions.

Commingled product theory. In order to protect Fresno’s interests while fairly apportioning liability, the court had developed a commingled product theory of proof which provides that “if a plaintiff could prove that certain gaseous or liquid products of many refiners and manufacturers were present in a completely commingled or blended state at the time and place that the harm or risk of harm occurred, and the commingled product caused plaintiff’s injury, each refiner or manufacturer is deemed to have caused the harm. Each of the refiners and manufacturers would then be given the opportunity to exculpate itself by proving that its product was not present at the relevant time and place and that, therefore, its product could not be part of the commingled or blended product.”

In this case, the court concluded that Fresno could not invoke the commingled product theory because the City did not meet its burden of showing that the Causation Defendants’ products were present at the gas stations at issue when the releases of MTBE occurred. The use of the commingled product theory did not relieve Fresno of its duty to prove direct causation, the court noted, clarifying that the theory was justified only when gathering evidence was impractical. In this case, Fresno could have gathered evidence directly connecting the Causation Defendants’ products to the limited number of gas stations involved. However, Fresno admitted that the products of one Causation Defendant were supplied to a gas station only after the release of MTBE. In the case of a second Causation Defendant, Fresno offered no evidence that its products were delivered to the gas station prior to the release of MTBE. Finally, with respect to the third Causation Defendant, Fresno presented no evidence connecting its products to MTBE within the City’s territory. In light of the lack of evidence tying the products of the Causation Defendants to any of the gas stations, the court refused to invoke the commingled product theory and granted the Causation Defendants’ motion for summary judgment.

Statute of limitations. Turning to the question of whether the remaining claims against the Limitations Defendants were time-barred, the court stated that under California’s last element accrual rule, the three-year statute of limitations begins to run from the occurrence of the harm to the property. The court further stated that the law of the case established that a claim for MTBE contamination accrued under California law when “(1) MTBE is present in the groundwater and ‘results in a contamination of the groundwater[;]’ or (2) ‘the presence of MTBE in the groundwater caused or should have caused [a water district] to take some action.’” The Limitations Defendants provided uncontroverted evidence showing that Fresno was aware of the risks of MTBE by the late 1990s and that five ppb had been set as the maximum contamination level at that same time. It was reasonable for a government agency charged with protecting groundwater to respond upon detection of five ppb. Thus, if Fresno were asserting claims for injury to groundwater and/or soil in its territory, those claims would be time-barred. However, Fresno argued that its interest was not in protecting the groundwater and soil, which was not within the City’s mandate. Instead, Fresno argued that its claims were based on damage to the deeper drinking water supply aquifer, and those claims did not accrue until 2001 when MTBE was first detected in a drinking water production well within the City’s jurisdiction. However, Fresno presented no direct evidence of MTBE contamination in the City’s production wells and failed to designate an expert to perform fate and transport modeling that would have tied MTBE detections at the gas stations to Fresno’s production wells. Because no jury could find that the groundwater and soil contamination at the gas station sites threatened Fresno’s production wells, the last element of harm occurred when MTBE was discovered in the groundwater at the gas stations in the 1990s and, therefore, the remaining claims were barred by the three-year limitations period.

The case number is: 1:00-1898; MDL 1358 (SAS); M21-88.

Attorneys: Michael Axline (Miller, Axline, & Sawyer) for the City of Fresno. James R. Wedeking (Sidley Austin) for Duke Energy Merchants. Brian M. Ledger (Gordon & Rees LLP) for Kern Oil & Refining Company. Colleen P. Doyle (Hunton & Williams) for Tesoro. Robert E. Meadows (King & Spalding LLP) for the Limitations and Nuisance Defendants.

Companies: Kern Oil & Refining Co.; Duke Energy Merchants; Tesoro; Valero Marketing and Supply Company; Coastal Chemical, Inc.

MainStory: TopStory SCLIssuesNews SofLReposeNews ChemicalNews CaliforniaNews NewYorkNews

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