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From Products Liability Law Daily, June 17, 2015

Puerto Rico design defect claims arising out of MTBE contamination fail

By Pamela C. Maloney, J.D.

The Commonwealth of Puerto Rico failed to counter evidence that the benefits from the use of the gasoline additive methyl tertiary butyl ether (MTBE) outweighed the risks of groundwater contamination and, therefore, a federal district court in New York granted a motion for summary judgment on the Commonwealth’s strict liability and negligent design defect claims. The court also granted summary judgment on the Commonwealth’s failure-to-warn claims, finding that although there was question of fact as to whether the MTBE manufacturer’s warnings about the risk of ground water contamination were adequate, under the sophisticated user doctrine, there was no duty on the part of the sophisticated purchasers of MTBE to warn their customers—the major oil companies—about that risk (In re: Methyl Tertiary Butyl Ether (“MTBE”) Products Liability Litigation (Commonwealth of Puerto Rico v. Shell Oil Co.)), June 16, 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 methyl tertiary butyl ether (MTBE). The Commonwealth of Puerto Rico brought suit against various defendants for injuries to waters of the Commonwealth, alleging that their use and handling of MTBE has contaminated or threatened to contaminate the groundwater. Before the court in this proceeding was a motion for summary judgment on the Commonwealth’s design defect and inadequate warnings claims.

Design defect. The court explained that the key factual inquiry to be made in determining the existence of a design defect centered on the availability of feasible alternatives to MTBE for use in gasoline supplied in Puerto Rico. The only expert offered by the Commonwealth did not undertake an analysis of the gasoline specifications for Puerto Rico generally, the feasibility of alternatives to MTBE, or which alternate octane boosters any of the defendants should have used instead of MTBE. As such, it failed to rebut the defendant’s experts who had thoroughly evaluated alternative octane enhancers and uniformly had concluded, based on a variety of economic and non-economic factors, that they were much less viable than MTBE, in that they could not be produced in large enough quantities in Puerto Rico and presented significant safety hazards. In light of this evidence, the defendants met their burden of proving that the overall utility of the product exceeded the overall risk and, thus, were entitled to summary judgment on the strict liability and negligent design defect claims.

Warning defects. Addressing the Commonwealth’s claim that the warnings provided were inadequate to warn about the risk of MTBE contamination, the court acknowledged that, as a threshold matter, there was a material dispute of fact over the sufficiency of the warnings regarding those risks and noted that no expert testimony was needed to establish that dispute. However, the Commonwealth admitted that the sophisticated purchasers of MTBE had no duty to warn their customers—the major oil companies—regarding the specific dangers of the chemical because the major oil companies also were sophisticated purchasers that knew about the alleged hazards posed to groundwater resources by MTBE. Thus, the Commonwealth could pursue its failure to warn claim against the sophisticated purchasers of MTBE, but not against the purchasers of the MTBE-blended gasoline.

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

Attorneys: A. Hoyt Rowell (Richardson, Patrick, Westbrook & Brickman, LLC), David T. Ritter (Baron & Budd, PC), and Hannah Lim (Weitz & Luxenberg, PC) for plaintiffs. Brian A. McGill (McDermott Will & Emery), Kenneth Pasquale (Stroock, Stroock & Lavan, LLP), Paul W. Ishack (Stark & Keenan), James D. Payne (Guida, Slavich & Flores, PC), Ben M. Krowicki (Morgan, Lewis & Bockius), and Michael Robert Gordon (K&L Gates LLP) for Tosco Corp., Frontier El Dorado Refining Co., Circle K Stores, Inc., La Gloria Oil and Gas Co., and American Refining Group Inc.

Companies: Tosco Corp.; Frontier El Dorado Refining Co.; Circle K Stores, Inc.; La Gloria Oil and Gas Co.; American Refining Group Inc.

MainStory: TopStory DesignManufacturingNews WarningsNews ChemicalNews NewYorkNews

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