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United States District Court, S.D. New York

September 3, 2004.

Alon USA Energy Inc., et al., 04 Civ. 2059 (SAS). City of Dodge City v. Alon USA Energy Inc., et al., 04 Civ. 2060 (SAS). Chisholm Creek Utility Authority v. Alon USA Energy Inc., et al., 04 Civ. 2061 (SAS). City of Bel Aire v. Alon USA Energy Inc., et al., 04 Civ. 2062 (SAS). City of Sioux City, City of Ida Grove, City of Galva, Iowa v. Amerada Hess Corp., et al., 04 Civ. 1723 (SAS). Town of Mishawaka v. Amerada Hess Corp., et al., 04 Civ. 2055 (SAS). City of South Bend, Indiana v. Amerada Hess Corp., et al., 04 Civ. 2056 (SAS). North Newton School Corp. v. Amerada Hess Corp., et al., 04 Civ. 2057 (SAS). City of Rockport v. Amerada Hess Corp., et al., S.D. Ind., 04 Civ. 1724 (SAS). Escambia County Utilities Authority v. Adcock Petroleum, Inc., et al., 04 Civ. 1722 (SAS). Patrick County School Board v. Amerada Hess Corp., et al., 04 Civ. 2070 (SAS). Town of Hartland v. Amerada Hess Corp., et al., 04 Civ. 2072 (SAS). Quincy Community Services District v. Atlantic Richfield Co., et al., 04 Civ. 4970 (SAS). Town of Marksville v. Alon USA Energy Inc., et al., 04 Civ. 3412 (SAS). Town of Rayville v. Alon USA Energy, Inc., et al., 04 Civ. 3413 (SAS). Buchanan County School Board v. Amerada Hess Corp., et al., 04 Civ. 3418 (SAS). Craftsbury Fire District #2 v. Amerada Hess Corp., et al., 04 Civ. 3419 (SAS). Town of Matoaka v. Amerada Hess Corp., et al., 04 Civ. 3420 (SAS). Town of Campbellsburg, Indiana v. Amerada Hess Corp., et al., 04 Civ. 4990 (SAS).

The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge


This multi-district litigation comprises dozens of cases, in which numerous plaintiffs are seeking relief from contamination or threatened contamination of groundwater from various defendants' use of the gasoline additive methyl tertiary butyl ether ("MTBE"). Defendants removed many of the actions from state court, asserting four grounds of federal subject matter jurisdiction: (1) federal agent jurisdiction; (2) substantial federal question; (3) complete preemption; and (4) bankruptcy jurisdiction.*fn1 The plaintiffs in nine New York cases moved to remand*fn2 On March 16, 2004, I denied the motions, holding that this Court has federal agent jurisdiction pursuant to section 1442(a)(1) of Title 28 of the United States Code, over all MTBE cases pending before it.*fn3 I found, among other things, that defendants had sufficiently alleged that they added MTBE to gasoline at the direction of the EPA, a federal agency, to comply with the requirements of the Reformulated Gasoline ("RFG") Program and the Oxygenated Fuels ("OF") Program.*fn4

At a subsequent status conference, plaintiffs sought clarification of my March 16, 2004 Opinion and Order ("MTBE III Opinion") because several of the plaintiffs are located in areas not covered by the RFG or OF programs. Therefore, plaintiffs argued, there could be no federal agent jurisdiction over cases filed in the non-RFG and non-OF areas as a matter of law.*fn5 Plaintiffs had not distinguished between RFG and non-RFG areas in their prior memorandum of law because they thought they were briefing only the New York cases, and New York is an RFG state.*fn6 I therefore permitted plaintiffs to move for clarification of the Court's MTBE III Opinion.*fn7 The moving plaintiffs reside in parts of California, Florida, Indiana, Iowa, Kansas, Louisiana, Vermont, Virginia, and West Virginia, that are located outside RFG and OF areas.*fn8 I now consider whether federal agent jurisdiction exists over cases filed by plaintiffs in non-RFG and non-OF areas.*fn9 I. BACKGROUND

  Familiarity with the Court's previous decisions in this multi-district litigation is assumed.*fn10 I shall describe only those facts relevant to the determination of these motions.


  MTBE is a chemical compound that is a byproduct of the gasoline refining process.*fn11 It has enhanced solubility in water and is chemically attracted to water molecules. Defendants used and continue to use MTBE as a gasoline additive. Sometime after 1979, in order to boost the octane level in higher grades of gasoline, defendants began manufacturing, distributing and/or selling gasoline with MTBE in concentrations averaging approximately two to four percent. Since 1990, defendants have added MTBE to gasoline in concentrations of up to fifteen percent. The publicly articulated justification for adding MTBE to gasoline is that it helps fuel burn more efficiently, thereby reducing air pollution.*fn12

  Because of its high solubility, MTBE races through underground water reservoirs, quickly reaching the water table and wells whenever gasoline leaks, spills, or is released into the environment. In addition, MTBE resists physical, chemical, and microbial degradation, which allows it to persist in underground aquifers for many decades, far longer than other components of gasoline. It is known to be carcinogenic in animals and is potentially cancer-causing in humans, as well. Even small quantities of MTBE impart a turpentine-like taste and odor to water, rendering it unfit for human consumption.*fn13

  Plaintiffs allege that at all relevant times to this litigation defendants have known that adding MTBE to gasoline would result in massive groundwater contamination. As early as 1980, defendants were aware of MTBE's risk to groundwater because of well contamination in Rockaway, New Jersey and Jacksonville, Maryland Throughout the 1980s and 1990s, subsequent contamination of other wells and aquifers, as well as scientific studies and reports, confirmed the risks posed by MTBE. Although defendants publicly denied the risks, their own documents confirm that they were aware of the harm posed by their use of MTBE.*fn14

  Despite their knowledge of its risks, defendants conspired to mislead the EPA and the public about the hazards of adding MTBE to gasoline. Defendants failed to provide the EPA with information it sought regarding MTBE's safety, and persuaded the EPA not to undertake additional testing.*fn15 These actions constitute "Defendants' pattern of exaggerating the environmental benefits of MTBE while understating or concealing the real environmental hazards, all of which Defendants knew or should have known at the time."*fn16 Defendants continued to use MTBE even though there were safer alternatives available. Plaintiffs claim that defendants had a duty to disclose the risk of MTBE but failed to do so.*fn17

  Based on these allegations, plaintiffs assert causes of action for: (1) strict liability for design defect and/or sale of a dangerously defective product; (2) strict liability for failure to warn; (3) negligence; (4) public nuisance; (5) private nuisance; (6) trespass; (7) civil conspiracy; and (8) breach of warranty.*fn18

  B. Reformulated Gasoline Program and Oxygenated Fuels Program

  During the 1950's and 1960's, Congress enacted a series of statutes in order to encourage and assist the states in curtailing air pollution.*fn19 However, that approach was ineffective, and in 1970, Congress amended the Clean Air Act ("CAA") to increase "federal authority and responsibility in the continuing effort to combat air pollution."*fn20 The amendments required the EPA to set National Ambient Air Quality Standards ("NAAQS") and required states to meet these standards under the EPA's supervision.*fn21 In addition, the amendments established some federal control over fuels, such as requiring the registration of fuels and fuel additives.*fn22 In 1990, Congress again amended the CAA to address air quality issues in areas of the country that were not in compliance with the NAAQS. These federal requirements mandated the production and sale, by specified dates, of cleaner burning RFG and/or OF in certain parts of the country.*fn23

  Beginning in 1992, the OF Program required the use of OF gasoline in certain geographical areas for up to four winter months each year. OF must contain at least 2.7 percent oxygen by weight. Beginning in 1995, the RFG Program required RFG to be used year round in nine of the most heavily polluted metropolitan areas. RFG must contain at least two percent oxygen by weight.*fn24 Where OF and RFG areas overlap, OF sold during the four winter months is required to contain 2.7 percent oxygen instead of two percent oxygen while meeting all of the other RFG requirements. The EPA approved the use of seven compounds to achieve the requirements set forth in the RFG and OF Programs: (1) MTBE; (2) ethanol; (3) methanol; (4) tertiary amyl methyl ether ("TAME"); (5) ethyl tertiary butyl ether ("ETBE"); (6) tertiary butyl alcohol ("TBA"); and (7) diisopropyl ether ("DIPE"). As part of the 1990 Amendments, Congress also enacted Anti-Dumping provisions to address concerns of conventional gasoline becoming "dirtier" as a result of the RFG Program. Gasoline refining creates certain byproducts that are "cleaner" and other byproducts that are "dirtier." Therefore, a refiner could theoretically comply with the RFG Program by directing the clean byproducts to RFG, while leaving the dirty ones in conventional gasoline. Congress knew this and therefore directed the EPA to promulgate rules to "ensur[e] that gasoline sold or introduced into commerce . . . does not result in average per gallon emissions [of pollutants] in excess of such emissions of such pollutants . . . in calendar year 1990. . . ."*fn25 In essence, all refiners were required to ensure that conventional gasoline sold after 1990 was at least as clean, from an emissions standpoint, as gasoline sold in 1990.*fn26

  C. Pipeline Distribution System

  Gasoline sold in the United States is distributed through a highly complex system of pipelines, marine tankers, barges, and tank trucks. The distribution system moves over nine million barrels (or 378 million gallons)*fn27 of gasoline from refineries to consumers daily. While there are several ways to transport refined products, pipelines are the most efficient and important means and transport almost seventy percent of petroleum products. Marine tankers account for approximately twenty-five percent, with the balance consisting of tank truck and rail deliveries.*fn28

  Over 70,000 miles of pipelines are used to ship and distribute fuel products to areas of the country lacking sufficient refining capacity, such as the Northeast and the Midwest. Although some refiners use their own pipelines, many ship their products through common carrier pipelines, which permit any qualifying shipper to move product between locations by paying a published tariff.*fn29 Large common carrier pipelines typically ship petroleum product in batches of 25,000 barrels or more. A "batch" is a distinct volumetric parcel of product that is pumped through the pipeline from an origin point to a predetermined destination point.*fn30

  Because the product being transported is fluid, adjacent batches end up mixing with each other at the boundaries.*fn31 "Transmix" refers to the boundary material between two distinctly different products, such as gasoline and diesel fuel. "Interface" refers to the boundary mix between two different grades of the same product, such as conventional gasoline and RFG. Although interface can be blended directly into the lower quality product and used, transmix cannot be utilized without reprocessing to separate the different products.*fn32 Federal Regulation provides that the interface between RFG and conventional gasoline may be blended down and sold as conventional gasoline.*fn33

  The boundaries of the RFG and OF areas do not correspond to the gasoline distribution system because they were defined by the EPA with reference to the NAAQS — not the idiosyncracies of the distribution system. Accordingly, some RFG and OF ends up being sold outside the program areas, in a phenomenon known as "spillover." Spillover occurs for a number of reasons, such as the difficulty of delivering the right product volume at the right time, changes in actual versus predicted demand during transit time, and regional price dislocations. Spillover is especially likely to occur in some of the high demand RFG regions — primarily the larger metropolitan areas.*fn34


  Section 1447(c) of Title 28 provides that a case removed from state court shall be remanded "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction." When a party files a motion to remand challenging the removal of the action from state court, "the burden falls squarely upon the removing party to establish its right to a federal forum by `competent proof.'"*fn35 "Out of respect for the independence of state courts, and in order to control the federal docket, `federal courts construe the removal statute narrowly, resolving any doubts against removability.'"*fn36 If the removing party cannot demonstrate federal jurisdiction by `competent proof,' the removal was improper, and the district court must remand the case to the court in which it was filed.*fn37

  "As a general rule, absent diversity jurisdiction, a case will not be removable if the complaint does not affirmatively allege a federal claim."*fn38 Federal jurisdiction exists where a case falls within the original "federal question" jurisdiction of the United States district courts: "The district courts shall have jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."*fn39 A case "arises under" federal law when federal law creates the cause of action,*fn40 or "where the vindication of a right under state law necessarily turn[s] on some construction of federal law."*fn41

  "To determine whether the claim arises under federal law, we examine the `well-pleaded' allegations of the complaint and ignore potential defenses."*fn42 Thus, the presence of a federal defense does not furnish a sufficient basis for jurisdiction, "even if the defense is anticipated in the plaintiff's complaint, and even if both parties concede that the federal defense is the only question truly at issue."*fn43 "[A] complaint which appears to be grounded solely in state law actually may be federal in nature, and thus removable, if its true nature has been disguised by the plaintiff's artful pleading."*fn44

  Removal is permitted in two instances where the "well-pleaded complaint" rule is not satisfied. First, a case may be removed when a federal statute wholly displaces the state law cause of action though complete preemption.


When the federal statute completely pre-empts the state-law cause of action, a claim which comes within the scope of that cause of action, even if pleaded in terms of state law, is in reality based on federal law. This claim is then removable under 28 U.S.C. § 1441(b), which authorizes any claim that `arises under' federal law to be removed to federal court.*fn45
Second, a state law action may be removed to federal court where Congress expressly so provides.*fn46 Therefore, where a statute specifically gives federal courts jurisdiction over a particular subject matter, removal is proper even where the "well-pleaded complaint" rule is not satisfied.*fn47


  A. Applicable Law

  The federal officer removal statute is an exception to the "well-pleaded complaint" rule because Congress expressly provided that actions against persons acting under color of a federal officer or agency may be removed to federal court, despite the absence of any federal claims.*fn48 Section 1442(a) permits a private party to remove a state court action if (1) the party acted under the direction of a federal officer or agency; (2) the party has a colorable federal defense; and (3) there is a causal connection between the federal direction and the conduct in question.*fn49

  B. Discussion The twenty-one water provider plaintiffs who are movants here all reside in areas not encompassed by the OF or RFG programs. Thus, plaintiffs argue that the Court lacks federal agent jurisdiction with respect to their cases because the EPA never directed that gasoline contain oxygenates of any kind — let alone MTBE — in these plaintiffs' jurisdictions. The OF and RFG programs require only that gasoline sold within certain designated areas must contain an oxygenate. Because the programs' requirements never applied to gasoline sold outside the designated areas, defendants could not have been acting under the direction of a federal officer or agency for purposes of section 1442(a) when they sold gasoline in those areas.*fn50

  Plaintiffs contend that defendants' use of MTBE in non-OF and non-RFG areas is completely voluntary. MTBE's presence outside designated areas is due to defendants' intentional use of MTBE as an octane enhancer — not the inadvertent sale of RFG or OF outside program areas.*fn51 RFG and OF is segregated in the distribution system for use in specified areas. In a competitive market, it is unlikely that RFG would be sold outside covered areas because RFG is generally more expensive than conventional gasoline. Plaintiffs assert that to the extent RFG is distributed in non-RFG areas, it represents defendants' voluntary economic decision not to reprocess interface mixtures of RFG and conventional gasoline.*fn52

  Defendants make two principal arguments that they were acting at the direction of Congress and the EPA.*fn53 First, federal regulation requires that interface between shipments of RFG and conventional gasoline be classified as conventional gasoline. Regulation 40 C.F.R. § 80.78 states: "No person may combine any reformulated gasoline with any conventional gasoline or blendstock, except that a refiner may do so at a refinery under the requirements specified in § 80.65(i), or if the combined product is designated as conventional gasoline." In explaining this rule, the EPA stated that "[i]nterface mixtures of RFG . . . and conventional gasoline must be classified as conventional gasoline."*fn54 Therefore, RFG is "blended down" into conventional gasoline, which is then sold in non-RFG areas. Second, defendants assert that RFG is sometimes delivered and sold in non-RFG areas because the boundaries of the areas and the fuel distribution networks do not coincide, thereby resulting in some "spillover" sales of RFG in non-RFG areas.

  With respect to the California plaintiff, Quincy Community Services District ("Quincy"), defendants make the additional argument that federal law, in the form of California's federally approved state implementation plan ("SIP"), required that gasoline in Plumas County (where Quincy resides) include oxygenates. The CAA requires each state containing areas not meeting clean air standards to develop a written compliance plan, an SIP, which must then be approved by the EPA.*fn55 Thus, according to defendants, EPA approval of California's SIP turned the SIP into a federal requirement for purposes of the federal officer removal statute.*fn56 Plaintiffs counter that EPA approval of California's SIP is of no consequence because California has the authority to regulate its own fuel standards and the EPA has no discretion to reject an SIP that is more stringent than the minimum federal standards. Therefore, the EPA's "pro forma approval" cannot transform the SIP into a federal mandate for purposes of section 1442 removal.*fn57

  Defendants' first argument fails because federal regulation does not require RFG to be blended into conventional gasoline. The regulation on which defendants rely specifically provides that RFG and conventional gasoline may be combined "at a refinery under the requirements specified in § 80.65(i)."*fn58 Subparagraph 80.65(i)(6)(I), in turn, permits any refiner to "use the procedures specified in this paragraph (i) to combine previously certified conventional gasoline with reformulated gasoline . . . [or] to reclassify conventional gasoline into reformulated gasoline. . . ."*fn59 Therefore, the EPA contemplated that interface could be reprocessed as RFG and did not necessarily have to be blended into conventional gasoline for sale in non-RFG areas. Furthermore, although the cited EPA document states that interface mixtures of RFG and conventional gasoline must be classified as conventional, the cited passage refers to "those instances where illegal interface mixing occurs."*fn60 As just discussed, the mixture of RFG and conventional gasoline is not illegal if the interface is processed pursuant to section 80.65(i).

  Defendants had a choice. They could: (1) blend down interface into conventional gasoline; (2) reprocess interface to reclassify it as RFG; or (3) refrain from selling interface altogether. I recognize that it may have been prohibitively expensive or impractical to reprocess all interface to prevent RFG from being sold in non-RFG areas. However, unless Congress or the EPA recognized it when they enacted and implemented the RFG Program, defendants cannot claim they acted under the direction of a federal officer for purposes of the federal officer removal statute when they sold MTBE-containing gasoline outside covered areas. Defendants have not cited, and this Court has not found, any evidence that the federal government knew that defendants would have to blend down interface.

  By contrast, defendants have sufficiently alleged that the federal government directed them to add MTBE to gasoline for sale in likely spillover areas. The EPA expected that "some reformulated gasoline [would] be sold outside covered areas, due mainly to idiosyncracies of the gasoline distribution system, in a phenomenon commonly referred to as `spillover.'"*fn61 The agency knew that "[e]stimates of gasoline `spillover' from different sources range[d] from less than 10 percent all the way to 25 percent,"*fn62 despite the "incentive to minimize unnecessary costs, such as spillover."*fn63 The EPA even took spillover into account when considering how to determine the total oxygen content of gasoline for purposes of complying with the Anti-Dumping rules. It proposed that the total oxygen content equal


the sum of (1) the oxygen required by the oxygenated fuels program in those CO nonattainment areas not in the reformulated gasoline program, (2) the spillover of reformulated gasoline into areas outside that program, and (3) the spillover of oxygenated fuels into areas outside that program.*fn64
In addition, Congress was aware that defendants would need to direct at least some MTBE to non-RFG states.*fn65

  Plaintiffs in certain California, Indiana, Vermont, and Virginia cases reside in likely spillover regions due to their current or historical proximity to RFG areas.*fn66 Accordingly, defendants in those cases have sufficiently alleged that they acted at the direction of a federal officer because the federal government expected to turn some non-covered areas into RFG areas as a practical matter when it promulgated the RFG Program. To the extent there are factual questions as to whether MTBE's presence is traceable to spillover, removal is appropriate to allow a federal court to resolve those issues. Notably, plaintiffs do not dispute that the presence of MTBE in non-RFG states is due at least in part to spillover sales.*fn67 As plaintiff Quincy is located in a likely spillover region in California, I need not address defendants' final argument regarding SIP approval.

  Because federal agent jurisdiction does not extend to all the cases at issue, I now turn to defendants' other jurisdictional bases of removal as to the cases filed in Florida, Iowa, Kansas, Louisiana, and West Virginia.*fn68


  A. Applicable Law

  Although "the vast majority of cases brought under the general federal-question jurisdiction of the federal courts are those in which federal law creates the cause of action . . . a case may arise under federal law `where the vindication of a right under state law necessarily turn[s] on some construction of federal law.'"*fn69 Courts examine whether state law causes of action involve substantial questions of federal law because a suit does not "arise under" federal law "unless it really and substantially involves a dispute or controversy respecting the validity, construction or effect of such a law, upon the determination of which the result depends."*fn70 Thus, courts must look at each of the elements involved in plaintiffs' state law causes of action to determine whether federal law is implicated.*fn71 However, the mere violation of a federal standard as an element of a state law claim does not necessarily change the nature of the case from state to federal.*fn72

  B. Discussion

  Defendants argue that the Court has substantial federal question jurisdiction because federal law (the CAA) controls the balancing at the heart of each of plaintiffs' product liability, negligence, and nuisance claims. Specifically, federal law determines the balance of costs and benefits that the fact-finder must perform in determining whether there was a defect in or feasible alternative to the allegedly defective product.*fn73

  Defendants assert that federal law provides the rule of decision in these cases for two reasons. First, federal law requires that clean air be given primacy in any determination of RFG content. The CAA directs the EPA to consider air quality above all other factors when regulating RFG. Therefore, a jury must be given an instruction that federal law requires clean air benefits to be weighed more heavily than other factors that might go into the cost-benefit analysis at the heart of plaintiffs' tort claims. Second, with respect to claims directed solely at conventional gasoline, the EPA's Anti-Dumping rules require that conventional gasoline not experience any decrease in air quality. Hence, a jury may not trade off clean air emissions degradation against clean water.*fn74

  Plaintiffs respond that the EPA's obligation to give clean air benefits greater weight in its rule-making proceedings has no bearing on a jury's assessment of state law products liability tort claims. Furthermore, even if it did, it would not create a substantial federal question.*fn75

  Although defendants direct their balancing argument at multiple causes of action, the argument is only applicable to one of plaintiffs' product liability claims — namely, strict liability for design defect. This cause of action requires, as an element of the claim, that the product in question be unreasonably dangerous.*fn76 In determining whether the product is defective in design, most jurisdictions follow a "risk-utility balancing" test, in which a product is deemed defective only if the magnitude of the risk outweighs any benefits.*fn77 As a result, design defect litigation has largely been concerned with the feasibility of safer alternative designs.*fn78 Thus, the key question is whether plaintiffs' right to relief on their strict liability claims requires resolution of a substantial question of federal law. I conclude that it does not.

  First, plaintiffs define the defective product as "gasoline containing MTBE." The term "gasoline containing MTBE" can be construed in several ways: (1) RFG containing MTBE; (2) conventional gasoline with MTBE due to the EPA's Anti-Dumping Rules; and/or (3) conventional gasoline with MTBE due to octane enhancement. The federal scheme regulating gasoline content would arguably be relevant under the first two definitions. However, the most logical reading of the complaints is that plaintiffs are referring to the third definition. Plaintiffs' complaints and memoranda of law are peppered with allegations that defendants used MTBE — not because the federal government directed them to — but because such use allowed defendants to profit from a gasoline refining waste byproduct.*fn79 Moreover, with respect to the non-RFG states, plaintiffs plausibly argue that MTBE is widely used to boost octane.*fn80 For instance, they cite a report by the federal Energy Information Administration, which states: [D]uring the first few years of the Federal RFG program almost all of the MTBE consumed in the nation was RFG and oxygenated gasoline. Over the last few years it appears that MTBE has found its way back into the conventional gasoline pool as an octane blending component. . . . Also, the decline in MTBE demand arising from the State bans could depress the market price of MTBE such that it becomes economical to increase its use as an octane blendstock.*fn81

 Therefore, it is not clear that a jury would ever consider the federal government's evaluation of the benefits of clean air if plaintiffs eventually prove that MTBE's presence in Florida, Iowa, Kansas, Lousiana, and West Virginia is due to octane enhancement.

  Second, even if a jury had to consider the CAA and the EPA's regulations, this does not raise a substantial question of federal law. The Supreme Court has cautioned: "[T]he mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction."*fn82 In this case, consideration of the federal scheme of gasoline content regulation does not fundamentally alter the state tort nature of plaintiffs' actions."*fn83 The CAA did not eliminate or alter the defendants' duties of care; it merely supplied potential defenses, such as conflict preemption. The question remaining to be litigated, however, is whether defendants breached their duties or engaged in other tortious conduct — which is a question of state law. Therefore, the Court lacks substantial federal question jurisdiction over plaintiffs' claims.


  A. July 16, 2002 Opinion and Order

  On July 16, 2002, this Court issued an opinion and order, holding that state law claims concerning the contamination of groundwater by MTBE are not preempted by the CAA.*fn84 Although familiarity with the opinion is assumed, I shall briefly summarize the analysis here because it informs defendants' arguments regarding complete preemption.

  In MTBE I, private well owners sued many petroleum companies, seeking relief from the contamination or threatened contamination of their wells as a result of the defendants' use of MTBE. Like plaintiffs here, the MTBE I plaintiffs asserted causes of action for strict liability for design defect, failure to warn, public nuisance, negligence, and conspiracy to market an unsafe product, among other claims.*fn85 The defendants argued that the claims should be dismissed as expressly and conflict preempted.*fn86

  In holding that the claims were not preempted, I examined the text, purpose, and legislative history of the CAA and concluded that Congress did not intend to preempt the plaintiffs' state law claims.*fn87 Section 211(c)(4)(A) of the CAA provides, in relevant part:

[N]o State (or political subdivision thereof) may prescribe or attempt to enforce, for purposes of motor vehicle emission control, any control or prohibition respecting any characteristic or component of a fuel or fuel additive . . . (ii) if the Administrator has prescribed . . . a control or prohibition applicable to such characteristic or component. . . .*fn88
Thus, the CAA's preemption provision specifically limits the reach of the statute to preempt state regulation only when it is "for purposes of motor vehicle emission control." The statute's purpose supports such an interpretation because the purpose of the CAA is to "protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population."*fn89 In addition, legislative history indicates that Congress, through the RFG Program, sought to reduce harmful vehicle emissions in the "larger context of market forces, health and environmental impacts, regional priorities, technological feasibility and other considerations."*fn90 I therefore held that the plaintiffs' state law claims fell outside the scope of preemption because they concerned groundwater contamination; the claims were not brought for purposes of motor vehicle emission control.*fn91 I did not reach the issue of conflict preemption because resolving that issue involved questions of fact that could not be addressed on a motion to dismiss.*fn92

  B. Applicable Law

  In determining whether a state law claim is completely preempted, courts "start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress."*fn93 "Congressional purpose is the `ultimate touchstone' of preemption analysis."*fn94 Congressional intent may be explicitly stated in the statute's text or implicitly contained in its structure and purpose.*fn95 Where the statutory provision contains preemptive language, the court need not go beyond that language to determine whether Congress intended to preempt at least some state law.*fn96 The court must determine the domain expressly preempted by that language, bearing in mind that "each case turns on the peculiarities and special features of the federal regulatory scheme in question."*fn97

  "Federal regulations have no less pre-emptive effect than federal statutes."*fn98 The preemptive force of a regulation does not depend on express. Congressional authorization to displace state law.*fn99 "Where Congress has directed an administrator to exercise his discretion, his judgments are subject to judicial review only to determine whether he has exceeded his statutory authority or acted arbitrarily."*fn100 Therefore, the proper inquiry is (1) whether the administrator intended to preempt the state law, and if so, (2) whether the action was within the scope of the administrator's delegated authority.*fn101

  C. Discussion Defendants argue that plaintiffs' claims are completely preempted because EPA regulations governing RFG content and the Anti-Dumping rules have preemptive force, even if the CAA itself does not displace state law. Defendants assert that the EPA intended by regulation to preempt any dissimilar state controls of fuel additives and that the agency had authority to do so under sections 211(k) and 211(c) of the CAA. Section 211(k) grants the EPA broad rule-making authority to implement the RFG program and Anti-Dumping rules, while section 211(c) contains the express preemption provision.*fn102

  Defendants contend that plaintiffs' claims are not saved (as plaintiffs argue) because the claims are allegedly not "for purposes of motor vehicle emission control."*fn103 Defendants first argue that plaintiffs' claims do, in fact, attempt to regulate emissions for the following reason. If plaintiffs are successful, defendants would be barred from using MTBE because it would be classified as a defective product, based, in part, on its discharge into the air when gasoline is combusted.

  Defendants next argue that plaintiffs (and this Court) incorrectly read the statute [quoted earlier at text accompanying note 86] as permitting states to "prescribe or attempt to enforce" regulation of fuel content so long as it is for some purpose other than motor vehicle emission control. Rather, the clause "for purposes of motor vehicle emission control" only modifies the phrase "attempt to enforce" — and not "prescribe" — because according to grammatical rules, a qualification placed after the disjunctive word "or" applies only to the term after the disjunction. Therefore, the preemption provision is properly read: "[N]o state (or political subdivision thereof) may prescribe . . . any control or prohibition respecting any characteristic or component of a fuel additive. . . ."*fn104 In any case, the qualification in section 211(c) is not determinative because the EPA also promulgated its rules pursuant to 211(k), which does not contain the restriction.*fn105

  Defendants finally argue that federal law provides several exclusive remedies for parties seeking to alter the design of RFG — to wit, (1) effecting change through the rule-making process; (2) through EPA approval of state implementation plans; (3) EPA authority to ban MTBE under the Toxic Substances Control Act; and (4) a remedy for leaking underground storage tanks under the Resource Conservation and Recovery Act. Specifically with respect to groundwater contamination, state law continues to provide remedies against those parties responsible for spills, leaking tanks, or other releases of MTBE into groundwater.*fn106

  To determine whether plaintiffs' state law claims are completely preempted, the Court must consider (1) whether the EPA meant to preempt state law claims based on groundwater contamination, and if so (2) whether the EPA was acting within the scope of its delegated authority.*fn107 Because Congress delegated its authority to the EPA, the agency is "uniquely qualified to determine whether a particular form of state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress."*fn108 If the EPA promulgated regulations intended to preempt state law, the Court "should not disturb [them] unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned."*fn109

  1. The EPA did not intend to preempt the field of fuel content regulation for all purposes.

  The EPA has expressed its understanding of the preemptive effect of its fuel content regulations: The national scope of gasoline production and distribution suggests that federal rules should preempt State action to avoid an inefficient patchwork of potentially conflicting regulations. Indeed, Congress provided in the 1977 Amendments to the Clean Air Act that federal fuels regulations preempt non-identical State controls except under specified circumstances (see, section 211(c)(4) of the Clean Air Act). EPA believes that the same approach to federal preemption is desirable for the reformulated gasoline and anti-dumping programs. EPA, therefore, is issuing today's final rule under the authority of sections 211(k) and (c), and promulgates under section 211(c)(4) that dissimilar State controls be preempted unless either of the exceptions to federal preemption specified by section 211(c)(4) applies.

  . . .


EPA believes that the limited federal preemption promulgated here appropriately balances the utility and efficacy of uniform national rules with States' needs to address their unique pollution problems.*fn110
Thus, the EPA intended its regulations to have "limited" preemptive effect under the "specified circumstances" of section 211(c)(4). As I explained in MTBE I, that section limits preemption to state regulation of fuel and fuel additives "for purposes of motor vehicle emission control."

  With respect to RFG, the EPA has reinforced this understanding of limited preemption in subsequent regulations and in other remarks to Congress. For instance, the agency has said: neither section 211(m) nor section 211 as a whole establishes a comprehensive federal presence. Instead, the fuels programs under section 211 provide a number of federal requirements but also explicitly preserve a role for the states in regulating fuels. Section 211(c)(4) preempts state action, but only under certain circumstances. . . .*fn111

 This explains why the EPA advised states that "any Federal controls on volatility would preempt any state and local emission-related provisions"*fn112 and that states "have authority to regulate a fuel's components or qualities for the purpose of emission control until EPA establishes Federal controls or prohibitions. . . ."*fn113 Moreover, the EPA approved a state proposal requiring higher oxygen fuel content than that mandated by the CAA because "[t]he legislative history indicates that Congress intended to provide flexibility to states regarding oxygen content, and did not want to restrain that flexibility by setting a federal mandate for a specific oxygen level that states must require."*fn114 Given the EPA's reluctance to preempt state regulation in the area of emission control — an area expressly preempted by the CAA — it is difficult to believe that the EPA intended to preempt state regulation of fuel content to prevent and remediate groundwater contamination.

  Similarly, the EPA, through its Anti-Dumping rules, only intended to preempt the field of conventional gasoline content to the extent pollutant emissions could become worse as a result of the RFG Program. In seeking comments on proposed options for determining 1990 baseline toxic emissions, the EPA stated that "[t]he key issue is the likelihood of increased toxic emissions occurring, particularly through the fuel parameters which are not addressed by the less stringent options."*fn115 The EPA was not inclined to regulate the components of conventional gasoline where emissions were not expected to increase,*fn116 nor where the environmental benefits were only marginal at best.*fn117 The agency's focus was on pollutant emissions, and defendants have not offered any evidence to indicate otherwise.

  2. The EPA does not have authority to preempt the field of fuel content for all purposes.

  Even assuming arguendo that the EPA intended to preempt state regulation of fuel content for all purposes, defendants' argument would still fail because the EPA does not have the authority to effect such blanket federal preemption. Sections 211(c) and (k) of the CAA only authorize the EPA to promulgate controls or prohibitions on fuel content as they relate to pollutant emissions.*fn118

  Although the Court has already ruled on the preemptive scope of section 211(c)(4), I now address defendants' semantic argument and find that it lacks merit. Defendants urge that the qualification "for purposes of motor vehicle emission control" only modifies the phrase "attempt to enforce," and therefore, the scope of preemption is actually broader than the Court held in MTBE I. However, defendants' tortured interpretation defies the structure and function of the CAA.

  In interpreting the text of a statute, the Supreme Court has advised:

[T]ext consists of words living `a communal existence,' in Judge Learned Hand's phrase, the meaning of each word informing the others and `all in their aggregate tak[ing] their purport from the setting in which they are used. Over and over we have stressed that in expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy. . . . Statutory construction is a holistic endeavor.*fn119
Even without looking beyond section 211(c), it is plain that the requirement of motor vehicle emission control extends to prescriptions of fuel content and not just attempts to enforce existing prescriptions. Indeed, paragraph (1) of section 211(c) grants the Administrator authority to


control or prohibit the manufacture, introduction into commerce, offering for sale, or sale of any fuel or fuel additive . . . (A) if in the judgment of the Administrator any emission product of such fuel or fuel additive causes, or contributes, to air pollution . . . or, (B) if emission products of such fuel or fuel additive will impair to a significant degree the performance of any emission control device or system. . . .
(emphasis added). Hence, the EPA's authority to prescribe fuel regulations is a function of motor vehicle emission effects. Logic dictates that the EPA would only have the power to preempt areas of state law over which the agency itself has regulatory authority.*fn120 If it were otherwise, the anomalous result would be that neither the federal government nor the states could regulate fuel characteristics and components that are unrelated to motor vehicle emissions.

  The EPA's understanding of the preemption provision comports with the Court's analysis. In response to a question concerning the legality of Colorado's proposal to mandate the use of oxygenates in gasoline, the agency responded that section 211(c)(4) "prohibits states from prescribing controls or prohibitions, for the purpose of emissions control, regarding the use of automotive fuels or fuel additives if the Administrator has prescribed a different control under section 211(c) regarding that fuel additive. . . ."*fn121 Nor does section 211(k) empower the EPA to preempt state regulation of fuel content for all purposes. With respect to RFG, the EPA was directed to promulgate regulations requiring the "greatest reduction in . . . emissions of toxic air pollutants. . . ." Not only does section 211(k) set forth requirements for reducing certain emissions, but it also establishes performance standards (from an emissions standpoint) for RFG.*fn122 Furthermore, the Administrator must certify a fuel formulation if it complies with the general requirements concerning nitrogen oxide emissions, content of oxygen, benzene, and heavy metals, and if the formulation achieves "equivalent or greater reductions in emissions . . . of toxic air pollutants."*fn123 The emphasis is clearly on emissions control.*fn124

  Likewise, section 211(k)(8), governing the Anti-Dumping rules, is solely concerned with preventing the increase of pollutants in conventional gasoline. That section directs the EPA to promulgate regulations to ensure that conventional gasoline is at least as clean as it was in 1990.*fn125 Nowhere does it instruct or permit the EPA to regulate conventional gasoline generally. The fact that section 211(k) does not contain the express qualification "for purposes of motor vehicle emission control" does not mean that such a limitation does not exist.

  The CAA's citizen suit provision supports this Court's finding that Congress would not have sanctioned the EPA's preemption of state law causes of action unrelated to motor vehicle emission control. The CAA creates a federal private right of action "against any person . . . who is alleged to have violated . . . or to be in violation of (A) an emission standard or limitation under this chapter or (B) an order issued by the Administrator or a State with respect to such a standard or limitation."*fn126 The statute does not, however, provide remedies for the types of violations the plaintiffs allege. Plaintiffs allege actual or threatened groundwater contamination from MTBE-containing gasoline. They seek relief in the form of, inter alia, investigation, testing and monitoring, alternative water, well head treatment, and early detection systems for wells. Prevailing on a federal claim to enforce gasoline emissions standards would not necessarily remedy plaintiffs' injuries. For example, upon a finding that a defendant's RFG did not meet the emissions standards, the defendant could comply by adding more MTBE to its RFG instead of a non-contaminating oxygenate.

  Furthermore, the CAA contains a savings clause, which preserves "any right which any person (or class of persons) may have under any statute or common law to seek enforcement of any emission standard or limitation or to seek any other relief. . . ."*fn127 The statute's preemption provision and savings clause must be read together because a "savings clause assumes that there are some significant number of common-law liability claims to save."*fn128 In this case, the savings provision makes clear that section 211(c)(4) does not preempt all state law claims prescribing controls or prohibitions on gasoline content.*fn129 It reflects a Congressional determination that occasional non-uniformity is acceptable in order to promote the public health and welfare.*fn130 Thus, it is implausible that Congress gave the EPA authority to completely preempt claims for groundwater contamination.

  Defendants argue that plaintiffs have other remedies for groundwater contamination, which would not result in the impermissible regulation of fuel content by states. However, the CAA's preemptive effect on plaintiffs' claims does not turn on whether federal law generally provides the exclusive remedies, but whether the statute in question provides the only recourse to plaintiffs.*fn131 In the two categories of cases where the Supreme Court has found complete preemption — certain causes of action under the Labor Management Relations Act and the Employment Retirement Income Security Act — the federal statutes provided the exclusive causes of action and also set forth procedures and remedies governing them.*fn132 This makes sense because an exclusive federal cause of action would be a clear indication that Congress intended to completely preempt a field.*fn133 That is not the case here.

  4. Plaintiffs' claims are not completely preempted.

  Defendants argue that plaintiffs' claims are preempted because plaintiffs contend, inter alia, that MTBE is emitted from car tailpipes and falls back to the earth as rain.*fn134 This final argument is unavailing because the central inquiry is whether the legal duty that is the predicate for plaintiffs' state law claims constitutes a prescription or attempt to enforce fuel regulations for purposes of motor vehicle emission control.*fn135 Plaintiffs' claims are preempted only if they would impose a state law regulation of gasoline for emissions purposes.

  Plaintiffs' claims fall outside the scope of the narrowly preempted field of fuel regulation. Although plaintiffs' product liability claims seek to regulate gasoline as a product, they do so only to prevent contamination of groundwater by MTBE. Furthermore, the state tort claims are principally aimed at regulating certain behavior by defendants, rather than control of the fuel product itself. For instance, the predicate duty for negligence claims is the general duty of every manufacturer to use due care to avoid foreseeable dangers caused by its products.*fn136 The precondition for the failure to warn claims is the duty to inform users and purchasers of the risks associated with using potentially dangerous products.*fn137 And the prerequisite for claims of conspiracy to misrepresent or conceal material facts is the duty not to commit fraud.*fn138 These duties arise independently of the regulation of fuel content. Plaintiffs' nuisance, trespass, and breach of warranty claims are similarly broad. Therefore, the breadth of most of plaintiffs' claims place them outside the limited scope of preempted fuel regulations authorized by Congress.*fn139


  A. Applicable Law

  Section 1334(b) of Title 28 provides federal district courts with original but not exclusive jurisdiction of all civil proceedings (1) arising under title 11 of the Bankruptcy Code; (2) arising in cases under title 11; and (3) related to cases under title 11.*fn140 A proceeding "arises under" title 11 if it is predicated on a right created by the Bankruptcy Code.*fn141 A proceeding "arises in" a title 11 case if it "would have no existence outside of the bankruptcy."*fn142 And a proceeding is "related to" a title 11 case if it could conceivably have an effect on the bankruptcy estate.*fn143 "Arising under" and "arising in" cases are collectively called "core" bankruptcy proceedings, while "related to" cases are non-core.*fn144

  It is important to distinguish between core and non-core cases because this determination signals whether mandatory or discretionary abstention will apply.*fn145 If a proceeding is non-core, mandatory abstention may be applicable. A party seeking mandatory abstention must demonstrate that: (1) the motion to abstain was timely; (2) the action is based on a state law claim; (3) the action is "related to" but not "arising in" a bankruptcy case or "arising under" the Bankruptcy Code; (4) section 1334 is the sole basis of federal jurisdiction; (5) an action was commenced in state court; and (6) the action can be "timely adjudicated" in state court.*fn146 If a proceeding is core, section 1334(c)(1) permits a court to abstain if abstention is "in the interests of justice, or in the interest of comity with State courts or respect for State law." The factors considered for discretionary abstention include: (1) the effect on the efficient administration of the bankruptcy estate; (2) the extent to which issues of state law predominate; (3) the difficulty or unsettled nature of the applicable state law; (4) comity with state courts; (5) the degree of relatedness or remoteness of the proceeding with the main bankruptcy case; (6) the existence of a right to trial by jury; (7) prejudice to the involuntarily removed parties; and (8) the potential for duplicative and uneconomical use of judicial resources.*fn147

  Nonetheless, regardless of which abstention provision governs, "[t]he court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground."*fn148 Courts in this district have treated the discretionary abstention and equitable remand provisions as essentially identical and consider the same factors in deciding whether to abstain and remand*fn149 B. Discussion

  On April 12, 1987, Texaco Inc. (predecessor-in-interest to defendant Chevron Texaco) filed for Chapter 11 relief as a result of a highly-publicized $10.5 billion verdict in favor of Pennzoil. Texaco ultimately succeeded in settling the Pennzoil dispute for $3 billion in cash, and it emerged from bankruptcy protection on March 23, 1988, upon confirmation of its reorganization plan.*fn150 Among other things, Texaco's Confirmation Order enjoined the "commencement or continuation of any action . . . to collect, recover or offset any debt discharged" under the Order.*fn151 Defendants therefore argue that this Court has bankruptcy jurisdiction because plaintiffs assert pre-petition claims that threaten Texaco's discharge. Defendants add that the Court should not sever Chevron Texaco and remand the cases as against the other defendants because plaintiffs' claims derive from a common nucleus of operative fact, and because severance would be inconsistent with plaintiffs' theories of collective liability.*fn152

  Plaintiffs respond that there is no bankruptcy jurisdiction because they had no claim when Texaco's bankruptcy was concluded. Plaintiffs do not allege that their water was contaminated with MTBE by 1988, and it is the introduction of MTBE into plaintiffs' aquifers that gives rise to plaintiffs' claims. Furthermore, plaintiffs contend that their claims could not have been discharged because plaintiffs did not receive notice that their claims would be discharged if they did not file a claim in bankruptcy. Alternatively, if the Court finds that it has bankruptcy jurisdiction, plaintiffs request either severance of Texaco from the other defendants or equitable remand due to the state law nature of the claims and the remoteness of Texaco's Confirmation Order from these actions and the other defendants.*fn153

  Generally, confirmation of a debtor's plan of reorganization vests all property of the estate in the debtor, and the debtor emerges free and clear of all claims and interests of creditors.*fn154 In addition, confirmation of the plan discharges all debts that arose prior to confirmation of the plan whether or not a proof of claim was filed or the holder of a claim has accepted the plan.*fn155 A discharge in a title 11 case "operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor."*fn156 Therefore, no one may assert a claim arising prior to plan confirmation.*fn157

  In this case, plaintiffs assert several acts by defendants that allegedly occurred prior to Texaco's Confirmation Order in 1988. Plaintiffs contend the following: "Sometime after 1979," defendants manufactured, distributed, and sold gasoline with certain MTBE concentrations.*fn158 Defendants knew "at least as early as 1980 of the impact of MTBE and its contamination of water."*fn159 In October 1980 and April 1983, defendants learned of spills in Rockaway, New Jersey and Jacksonville, Maryland, respectively.*fn160 In 1986, defendants received and discussed the Garrett Report, a paper warning of inevitable groundwater contamination.*fn161 "Beginning in the early 1980s," defendants colluded with others to suppress information regarding MTBE.*fn162 Prior to the petition date, defendants misled the EPA into not testing MTBE under the Toxic Substances Control Act.*fn163 Defendants also misled the public. For instance, "on April 1 and 2, 1987" at a Conference on Alcohols and Octane, defendants represented that MTBE gasoline spills had been effectively dealt with, failing to inform the audience that MTBE resists biodegradation and is difficult to remediate.*fn164 All of these allegations constitute arguably dischargeable claims because they pre-date the confirmation of Texaco's reorganization plan.*fn165

  This Court has core bankruptcy jurisdiction because questions concerning when certain "claims" arose and whether those claims were discharged involve the enforcement and construction of Texaco's discharge injunction, a substantive right created by the federal Bankruptcy Code.*fn166 Proceedings to determine the allowance and disallowance of a claim against the estate are core proceedings.*fn167 Although Chevron Texaco has yet to ask this Court to enforce its Confirmation Order, it has clearly reserved its right to do so.*fn168 To conclude that the Court lacks core jurisdiction simply because defendants have raised the argument in opposition to remand instead of in an enforcement action would elevate form over substance.

  While the Court may abstain in its discretion, abstention is not warranted here for several reasons. First, remanding the remaining non-RFG cases would result in the duplicative and uneconomical use of judicial resources and the risk of inconsistent judgments. The Court has federal agent jurisdiction over more than forty MTBE cases, and by exercising its bankruptcy jurisdiction, it can best avoid the waste and inconsistency that multi-district litigation is intended to resolve.*fn169 Second, the exercise of jurisdiction would promote the efficient administration of Texaco's estate since a bankruptcy court of this district issued the original Confirmation Order. If it were later determined that plaintiffs' claims are pre-petition claims that were not discharged by the Confirmation Order and that Chevron Texaco is liable, plaintiffs may seek leave from this Court to reopen the bankruptcy proceedings. Third, the prejudice to the involuntarily removed parties would be minimal because counsel representing the non-RFG plaintiffs are already litigating other MTBE cases before this Court.*fn170 The removed parties would therefore gain certain efficiencies because their attorneys would be able to combine briefing, travel time, and court appearances, which would lower the cost of litigation and encourage more effective advocacy. Fourth, plaintiffs' right to a jury trial is not affected by this Court's exercise of jurisdiction. Finally, although plaintiffs allege state tort law claims, they do not involve difficult or unsettled questions of state law. Thus, the Court declines to abstain from the exercise of jurisdiction based on these factors.*fn171

  Of course, certain factors also weigh in favor of abstention — namely, the predominance of state law issues, comity with state courts, and the remoteness of the proceedings from the main bankruptcy case. In particular, I have already expressed some reluctance to exercise jurisdiction over dozens of defendants merely because a single defendant filed for bankruptcy and reorganized sixteen years ago.*fn172 Certainly, there is authority to abstain in such a situation.*fn173 However, upon further reflection, the exercise of jurisdiction is appropriate because plaintiffs' theories of collective liability cause the defendants to be inextricably intertwined; defendants will stand or fall together.*fn174 That is, plaintiffs can only recover if liability is apportioned among all manufacturers of MTBE-containing gasoline due to the impossibility of matching particular defendants to specific releases of MTBE. It is for this reason that the Court also declines to sever Chevron Texaco from the cases and remand the cases as against the remaining defendants. VII. CONCLUSION

   For the foregoing reasons, this Court has federal agent jurisdiction over certain California, Indiana, Vermont, and Virginia cases, and bankruptcy jurisdiction over all the consolidated cases.*fn175 Defendants have met their burden of establishing federal subject matter jurisdiction and their right to removal. The Clerk of the Court is directed to close these motions. A conference is scheduled for September 23, 2004 at 10:00 a.m.


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