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In re Methyl Tertiary Butyl Ether (" Mtbe") Products Liability Litigation

United States District Court, Second Circuit

July 31, 2013

IN RE: METHYL TERTIARY BUTYL ETHER (

Robin Greenwald, Esq., Robert Gordon, Esq., Weitz & Luxenberg, P.C., New York, New York, Counsel for Plaintiffs.

Duane C. Miller, Esq., Michael Axline, Esq., Miller, Axline, & Sawyer, Sacramento, CA, Counsel for RDA.

Peter John Sacripanti, Esq., James A. Pardo, Esq., McDermott Will & Emery LLP, New York, New York, Liaison Counsel for Defendants.

Jeffrey J. Parker, Esq., Whitney Jones Roy, Esq., Sheppard, Mullin, Richter & Hampton LLP, Los Angeles, CA, Counsel for Exxon Mobil Corp. on behalf of Chevron U.S.A. Inc., Shell Oil Co., Equilon Enterprises LLC, Tesoro Corp., and Tesoro Refining and Marketing Co.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

This is a consolidated multi-district litigation ("MDL") relating to contamination - actual or threatened - from various defendants' use of the gasoline additive methyl tertiary butyl ether ("MTBE") and/or tertiary butyl alcohol, a product formed by the breakdown of MTBE in water. The City of Merced Redevelopment Agency and the Merced Designated Local Authority[1] (collectively, the "RDA") filed the initial complaint in this case in Merced County Superior Court on April 7, 2008.[2] The case was subsequently removed to federal court and transferred to this MDL Court.[3]

The RDA alleges that Exxon Mobil Corporation, Chevron U.S.A. Inc., Shell Oil Company, Equilon Enterprises LLC, Tesoro Corporation, and Tesoro Refining and Marketing Company[4] (collectively, "Defendants") sold gasoline containing MTBE to Merced gasoline stations - identified in this litigation as the 1415 R Street Station and 1455 R Street Station (collectively, the "R Street Stations") - and that MTBE was released into the Merced Redevelopment Project Area to the North of the R Street Stations, causing damage. Based on these allegations, the RDA asserts five claims for: (1) cost recovery under California's Polanco Act;[5] (2) products liability; (3) negligence; (4) trespass; and, (5) nuisance.[6]

Presently before this Court are two motions for partial summary judgment brought by Defendants, seeking to dismiss: (1) the RDA's claims of products liability, negligence, nuisance, and trespass on the grounds that they are time-barred; and (2) the RDA's claims of nuisance and trespass, which cannot be supported by the "mere supply" of gasoline. For the reasons stated below, Defendants' statute of limitations motion is GRANTED. Because the limitations issue also precludes the RDA's claims of nuisance and trespass, Defendants' motion on those grounds is MOOT.

II. BACKGROUND

A. The Allegations

The RDA is an agency charged under the California Health and Safety Code with the power to "alter, improve, reconstruct, rehabilitate, modernize and clean up property in the blighted Merced Redevelopment Project Area ("[P]roject [A]rea")."[7] The RDA contends that Defendants are "legally responsible for the costs and damages relating to the presence and abatement of gasoline, hydrocarbons, and MTBE located in or around the Project Area which blight the Project Area, adversely impact the use of the Project Area, depreciate or stagnate property values, and adversely affect the interests of health, safety, and welfare of the people."[8] The RDA alleges that Defendants sold gasoline containing MTBE to Merced gasoline stations, which released it into the environment and "contaminated, polluted, and threatened, and continue[] to contaminate, pollute, and threaten, [the RDA's] Project Area."[9]

The RDA alleges that:

Gasoline containing MTBE [] was released from gasoline delivery systems in Merced until at least 1997 from gasoline retail stations... Over time, MTBE [] migrated down to groundwater and, after several years elapsed, traveled to the Project Area causing pollution, contamination, and interference with [RDA's] Project Area. This appreciable injury and damage occurred for ...

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