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

United States District Court, S.D. New York

May 5, 2014

IN RE: METHYL TERTIARY BUTYL ETHER (

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

Michael Axline, Esq., Miller, Axline, & Sawyer, Sacramento, CA, Justin J. Arenas, Esq., John K. Dema, Esq., Law Offices of John Dema, P.C., Rockville, Maryland, Counsel for Commonwealth. Peter John Sacripanti, Esq., James A. Pardo, Esq, McDermott Will & Emery LLP, New York, NY, Liaison Counsel for Defendants:

Michael A. Walsh, Esq., Strasburger & Price, LLP, Dallas, TX, Counsel for Defendant Tauber Oil.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

I. INTRODUCTION

This is a consolidated multi-district litigation ("MDL") relating to contamination - actual or threatened - of groundwater 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. In this case, the Commonwealth of Puerto Rico ("the Commonwealth") alleges that defendants' use and handling of MTBE has contaminated, or threatened to contaminate groundwater within its jurisdiction. Familiarity with the underlying facts is presumed for the purposes of this Order.

Tauber Oil Company ("Tauber") now moves to dismiss the Commonwealth's complaints[1] for lack of personal jurisdiction.[2] For the following reasons, the motion is granted.

II. BACKGROUNDS[3]

Tauber is a Texas-based marketer of energy products.[4] From 1985 to 1997, Tauber sold MTBE to Phillips Petroleum Company ("Phillips Petroleum"), Phillips 66 Company, and Phillips Chemical Company ("Phillips entities") - all located in Bartlesville, Oklahoma - in a series of "spot sales."[5] Tauber had no distribution or agency agreements with any Phillips entity.[6] Because all MTBE sales were governed by Free on Board contracts, title transferred from Tauber to the Phillips entities in Texas.[7] Tauber had no title on the vessel that transported the MTBE and no involvement in determining the MTBE's ultimate destination.[8]

Instead, Phillips Petroleum independently arranged for the shipment of neat MTBE to Puerto Rico for gasoline blending at Phillips Chemical Puerto Rico Core facility ("Core facility").[9] The Core facility sold gasoline to the wholesale market both in Puerto Rico and elsewhere.[10] However, the gasoline was not always blended with MTBE.[11] The Core facility sometimes used other octane enhancers.[12]

Tauber never manufactured, marketed, traded, stored, sold, solicited, advertised, or otherwise handled finished gasoline, gasoline containing MTBE, or neat MTBE in Puerto Rico.[13] Tauber was not involved in any decision by any Phillips entity to use or ship MTBE to Puerto Rico.[14] Nor was Tauber's price for MTBE contingent on the ultimate destination of the MTBE.[15]

III. LEGAL STANDARD

A. Rule 12(b)(2) Motion to Dismiss

"The plaintiff bears the burden of establishing personal jurisdiction over the defendant."[16] "[W]here... discovery has not begun, a plaintiff need only allege facts constituting a prima facie showing of personal jurisdiction to survive a Rule 12(b)(2) motion."[17] However, "[a]fter discovery, the plaintiff's prima facie showing, necessary to defeat a jurisdiction testing motion, must include an averment of facts that, if credited by the trier, would suffice to establish jurisdiction over the defendant."[18] Conclusory allegations are insufficient-"[a]t that point, the prima facie showing must be factually supported."[19] When a "defendant rebuts plaintiffs' unsupported allegations with ...


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