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IN RE

August 11, 2005.

IN RE: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION. This document relates to: American Distilling & Manufacturing Co.
v.
Amerada Hess Corp., et al., No. 04 Civ. 1719. Columbia Board of Education v. Amerada Hess Corp., et al., No. 04 Civ. 1716. Our Lady of the Rosary Chapel v. Amerada Hess Corp., et al., No. 04 Civ. 1718. Town of East Hampton v. Amerada Hess Corp., et al., No. 04 Civ. 1720. United Water of Connecticut v. Amerada Hess Corp., et al., No. 04 Civ. 1721. Escambia County Utilities Authority v. Amerada Hess Corp., et al., No. 04 Civ. 1722 Village of Island Lake v. Amerada Hess Corp., et al., No. 04 Civ. 2053. City of Mishawaka v. Amerada Hess Corp., et al., No. 04 Civ. 2055. North Newton School Corp. v. Amerada Hess Corp., et al., No. 04 Civ. 2057. City of Rockport v. Amerada Hess Corp., et al., No. 04 Civ. 1724. Town of Campbellsburg, Ind. v. Amerada Hess Corp., et al., No. 04 Civ. 4990. City of South Bend v. Amerada Hess Corp., et al., No. 04 Civ. 2056. City of Galva v. Amerada Hess Corp., et al., No. 04 Civ. 1723. City of Dodge City v. Amerada Hess Corp., et al., No. 04 Civ. 2060. City of Bel Aire, et al. v. Amerada Hess Corp., et al., No. 04 Civ. 2062. City of Park City v. Amerada Hess Corp., et al., No. 04 Civ. 2059. Chisholm Creek Utilities Authority v. Amerada Hess Corp., et al., No. 04 Civ. 2061. Town of Rayville v. Amerada Hess Corp., et al., No. 04 Civ. 3413. Town of Marksville v. Amerada Hess Corp., et al., No. 04 Civ. 3412. Town of Duxbury v. Amerada Hess Corp., et al., No. 04 Civ. 1725. City of Portsmouth v. Amerada Hess Corp., et al., No. 04 Civ. 2066. City of Dover v. Amerada Hess Corp., et al., No. 04 Civ. 2067. New Jersey American Water Co. v. Amerada Hess Corp., et al., No. 04 Civ. 1726. Town of Wappinger v. Amerada Hess Corp., et al., No. 04 Civ. 2388 United Water New York, Inc. v. Amerada Hess Corp., et al., No. 04 Civ. 2389. Village of Pawling v. Amerada Hess Corp., et al., No. 04 Civ. 2390. Roslyn Water District v. Amerada Hess Corp., et al., No. 04 Civ. 5422. Port Washington Water District v. Amerada Hess Corp., et al., No. 04 Civ. 3415. Long Island Water Corp. v. Amerada Hess Corp., et al., No. 04 Civ. 2068. Incorporated Village of Sands Point v. Amerada Hess Corp., et al., No. 04 Civ. 3416. Hicksville Water District v. Amerada Hess Corp., et al., No. 04 Civ. 5421. Franklin Square Water District v. Amerada Hess Corp., et al., No. 04 Civ. 5423. City of New York v. Amerada Hess Corp., et al., No. 04 Civ. 3417 County of Suffolk, et al. v. Amerada Hess Corp., et al., No. 04 Civ. 5424. County of Nassau v. Amerada Hess Corp., et al., No. 04 Civ. 9543. Water Authority of Great Neck North v. Amerada Hess Corp., et al., No. 04 Civ. 1727. Water Authority of Western Nassau v. Amerada Hess Corp., et al., No. 04 Civ. 9544. Northampton Bucks County Municipal Authority v. Amerada Hess Corp., et al., No. 04 Civ. 6993. Town of Hartland v. Amerada Hess Corp., et al., No. 04 Civ. 2072. Craftsbury Fire District # 2 v. Amerada Hess Corp., et al., No. 04 Civ. 3419. Buchanan County School Board v. Amerada Hess Corp., et al., No. 04 Civ. 3418 Patrick County School Board v. Amerada Hess Corp., et al., No. 04 Civ. 2070. Town of Matoaka v. Amerada Hess Corp., et al., No. 04 Civ. 3420.



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

OPINION AND ORDER

I. INTRODUCTION

Plaintiffs bring these actions seeking relief from the actual or threatened contamination of their groundwater with methyl tertiary butyl ether ("MTBE"), a chemical added to gasoline. Defendant Lyondell-Citgo Refining LP ("LCR") moves, pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, to dismiss the complaints filed against it in fifteen states: Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Vermont, Virginia, and West Virginia (collectively, "forum states"). Defendant Equistar Chemicals, LP ("Equistar") also moves to dismiss for lack of personal jurisdiction in cases filed in nine states: Connecticut, Indiana, Kansas, Massachusetts, New Hampshire, New York, Vermont, Virginia, and West Virginia.*fn1 For the reasons stated below, both defendants' motions are denied.*fn2

  II. BACKGROUND

  A. LCR

  LCR is a major producer of petroleum products in the United States, earning revenues of $4.2 billion in 2003.*fn3 MTBE-containing gasoline is among the products manufactured at LCR's refinery in Houston, Texas.*fn4 In addition to gasoline, LCR derives substantial revenue from selling chemical products, such as benzene, toluene, orthoxylene, and paraxylene.*fn5 These chemicals are used to manufacture consumer goods, ranging from clothing, plastics, drinking cups and soft drink bottles to upholstery, videotapes, paints, and resins.*fn6

  LCR is a joint venture between Lyondell Chemical Company ("Lyondell"), which owns 58.75% of the company, and Citgo Petroleum Corporation ("Citgo"), which owns the remaining 41.25%.*fn7 LCR is part of the Lyondell "enterprise," which includes Lyondell's own chemicals business, and the Equistar, Millennium Chemicals, Inc., and LCR businesses.*fn8 Lyondell, Citgo, and Equistar are parties to a number of agreements with LCR with respect to product sales, raw materials, and administrative services.*fn9 These agreements specifically provide for cooperation among them to produce MTBE and MTBE-containing gasoline.*fn10 Each year LCR purchases forty-four million gallons of MTBE from Equistar for blending into gasoline.*fn11

  LCR sells approximately 120,000 gallons of MTBE-containing gasoline per day (or 48.3 million gallons per year).*fn12 "Substantially all" of its gasoline is sold to Citgo, which then distributes the gasoline via its nationwide network of branded retail locations, 7-Eleven convenience stores, and independent branded marketers throughout the country.*fn13 Citgo's nationwide distribution network reaches nearly every state (including all of the states where LCR contests jurisdiction) through a network of over 13,500 locations, five refineries, and fifty-six refined product terminals throughout the United States.*fn14

  B. Equistar

  Equistar is a wholly-owned subsidiary of Lyondell.*fn15 It is one of the world's largest chemical producers, generating revenues of $6.5 billion and amassing assets of $5 billion in 2003.*fn16 Equistar has sixteen manufacturing facilities that produce various chemicals "used in countless items that make everyday living safer, healthier and more convenient."*fn17 It is North America's second largest producer of ethylene, the world's most widely used petrochemical, and the third largest producer of polyethylene in North America.*fn18 In addition, Equistar produces 284 million gallons of MTBE per year (or approximately 18,500 barrels each day).*fn19 Plaintiffs estimate that from 1998 to 2003, Equistar generated revenue amounting to approximately $124,000,000 in Connecticut; $513,000,000 in Indiana; $311,000,000 in Kansas; $205,000,000 in Massachusetts; $65,000,000 in New Hampshire, $346,320,000 in New York; $28,000,000 in Vermont; $451,000,000 in Virginia; and $92,000,000 in West Virginia*fn20 — an aggregate of approximately $2.1 billion from direct sales of various products to the nine states where it now contests jurisdiction.*fn21

  Pursuant to a "Shared Services Agreement," Equistar shares many business services with the other members of the Lyondell enterprise, such as engineering, research and development, information technology, human resources, sales and marketing, raw material supplies, physical office space, and facility services.*fn22 In addition, the companies are also managed by a single team in which all of Equistar's executive officers are also officers of Lyondell, and Equistar's chief executive officer is designated by Lyondell.*fn23

  As noted above, the companies comprising Lyondell's enterprise also cooperate to produce and market MTBE and MTBE-containing gasoline. Using technology licensed from Lyondell, Equistar produces MTBE at two facilities located in Texas: Channelview and Chocolate Bayou.*fn24 Output from these facilities, other than one Channelview facility, is sold to Lyondell for resale.*fn25 Lyondell supplies MTBE to refiners, such as ExxonMobil, that operate on a nationwide level.*fn26 The remaining facility produces approximately one-third of Equistar's MTBE, and is sold to LCR for blending into gasoline that is then distributed through Citgo's nationwide distribution network.*fn27 Equistar's MTBE also reaches the national market through sales to other refiners with broad distribution.*fn28

  III. LEGAL STANDARD

  A court must dismiss an action against any defendant over whom it lacks personal jurisdiction.*fn29 On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the defendant.*fn30 "Where, as here, a court relies on pleadings and affidavits, rather than a full blown evidentiary hearing, the plaintiff need only make a prima facie showing that the court possesses personal jurisdiction over the defendant."*fn31 "A plaintiff can make this showing through [its] own affidavits and supporting materials, containing [a] [good faith] averment of facts that, if credited . . ., would suffice to establish jurisdiction over the defendant."*fn32 When the issue is addressed on affidavits, a court must construe all allegations in the light most favorable to the plaintiff and resolve all doubts in the plaintiff's favor.*fn33 Thus, a court accepts as true all of the plaintiff's averments of jurisdictional facts.*fn34

  The determination of whether a federal court has personal jurisdiction over a defendant is a two-part inquiry. First, a court must evaluate whether jurisdiction is proper under the state's long-arm statute. Second, it must determine whether the exercise of personal jurisdiction comports with the requirements of due process.*fn35 Because several of the forum states permit the exercise of personal ...


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