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From Products Liability Law Daily, February 12, 2015

Gas and oil company’s attempt to limit recovery in MTBE MDL rejected

By Kathleen Bianco, J.D.

A federal district court in New York concluded that a gas and oil company was not entitled to partial summary judgment limiting the Commonwealth of Puerto Rico’s recovery of damages or entitlement to injunctive relief for groundwater contamination because a legitimate dispute existed over the sufficiency and completeness of the investigation into the contamination and the proposed remediation plans (In re: Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation (Commonwealth of Puerto Rico, et al. v. Shell Oil Co., et al., February 10, 2015, Scheindlin, S.).

Background. This case is part of an ongoing multi-district litigation relating to contamination of groundwater from the use of the gasoline additive MTBE and tertiary butyl alcohol, which is formed by the breakdown of MTBE in water. After 1979, oil companies began adding the oxygenate MTBE to gasoline to boost octane levels in higher grades of gasoline and to reduce air pollution. Gasoline oxygenates are intended to help the fuel burn more efficiently, thus reducing emissions.

MTBE is a chemical produced from methanol and isobutylene (a by-product of the gasoline refining process). It is very soluble in water and does not readily biodegrade. As such, if MTBE enters the ground, it migrates quickly through the groundwater, contaminating aquifers and wells. In addition, MTBE is much more persistent than other components in gasoline and may remain in groundwater for decades. MTBE gives water a foul taste and odor, making in unusable and unfit for human consumption.

Pending before the court is a motion for partial summary judgment filed by Sol Puerto Rico Limited (Sol), formerly known as The Shell Company (Puerto Rico) Limited, concerning certain remedies sought by the Commonwealth of Puerto Rico (Commonwealth) for injunctive relief and costs related to the investigation and remediation of MTBE at a specific location identified as Trial Site No. 3.

Damages. The gas and oil company sought a court order finding that the Commonwealth was not entitled to certain relief associated with the investigation and remediation of a specific groundwater contamination site because the gas company already had committed to providing and paying for the requested relief. The gas company argued that it was entitled to judgment because the relief sought was not ripe for adjudication. The court rejected this argument, finding that the issue of ripeness is based on the occurrence of an injury, not the scope of the damages resulting from the alleged injury.

The court further reasoned that the gas company was not entitled to partial summary judgment because there was a genuine dispute related to the adequacy of the contamination investigation undertaken by the gas company and the effectiveness of the proposed remediation plans. Consequently, the court rejected the gas company’s motion, opining that the disputed issues would need to be resolved at trial.

The case is Master File No. 1:00-1898, MDL 1358 (SAS), M21-88, 07 Civ. 10470.

Attorneys: David T. Ritter (Baron & Budd, PC), Duane C. Miller (Miller, Axline & Sawyer), and John K. Dema (Law Offices of John K. Dema, PC) for Commonwealth of Puerto Rico, Commonwealth of Puerto Rico Environmental Quality Board, and Commonwealth of Puerto Rico Through The Environmental Quality Board. Alec C. Zacaroli (Wallace King Domike & Reiskin, PLLC), Alejandro J. Cepeda-Diaz (McConnell Valdes LLC), and Alejandro J. Diaz (Paul Hastings LLP) for Shell Oil Co., Shell Company Puerto Rico Ltd., Shell Chemical Yabucoa, Inc., Shell Trading (U.S.) Co., Motiva Enterprises, LLC, and Equilon Enterprises, LLC. Peter John Sacripanti (McDermott Will & Emery LLP) for ExxonMobil Corp.

Companies: Shell Oil Co.; Shell Company Puerto Rico Ltd.; Shell Chemical Yabucoa, Inc.; Shell Trading (U.S.) Co.; Motiva Enterprises, LLC; Equilon Enterprises, LLC; ExxonMobil Corp.

MainStory: TopStory DamagesNews ChemicalNews NewYorkNews

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