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

United States District Court, S.D. New York

July 30, 2014

IN RE: METHYL TERTIARY BUTYL ETHER (

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

Zachary W. Carter, Corporation Counsel of the City of New York, Susan E. Amron, Elizabeth Harris, Assistant Corporation Counsel, New York, NY,

Victor M. Sher, Esq., Sher Leff LLP, San Francisco, CA,

Robert Chapman, Esq., Eisner Jaffe Gorry Chapman & Ross, P.C., Beverly Hills, CA, Counsel for Plaintiff City of New York.

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

James W. Quinn, Esq., David J. Lender, Esq., Theodore E. Tsekerides, Esq., Weil, Gotshal & Manges LLP, New York, NY, Counsel for Exxon Mobil Corporation.

MEMORANDUM OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge.

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 City of New York, the New York City Water Board, and the New York City Municipal Water Finance Authority (collectively, "the City") alleged that Defendants' use and handling of MTBE has contaminated, or threatened to contaminate groundwater at service stations, refineries, and terminals throughout New York City. Familiarity with the facts of this case is presumed for the purposes of this Order.

ExxonMobil Corporation, ExxonMobil Oil Corporation and Mobil Corporation (collectively, "Exxon") bring this motion asking the Court to establish a court-supervised trust for the funds that Exxon must pay to satisfy the $104.69 million judgment[1] rendered in favor of the City after an eleven week jury trial. The City objects on the grounds that Exxon's motion (1) is untimely; (2) violates the parties' tolling agreement; and (3) is unsupported by case law. The City also contends that Exxon lacks standing to request a trust. For the following reasons, Exxon's motion is DENIED.

I. BACKGROUND

On August 3, 2009, the City commenced a jury trial against Exxon on the claims alleged in their Fourth Amended Complaint ("FAC").[2] Those claims relate to past and future MTBE detections in five public water supply wells, located in Queens, New York, and owned and operated by the City.[3] During the trial, the City told the jury that it would build a water treatment facility within the next fifteen years to remove MTBE from groundwater in Queens.[4]

On October 19, 2009, the jury found Exxon liable on the City's claims of public nuisance, negligence, trespass, and product liability for failure to warn.[5] However, the jury found Exxon not liable on the City's claims of private nuisance and product liability for design defect.[6] The jury then awarded the City $104, 690, 000 in damages.[7] On September 17, 2010, the parties filed an Amended Judgment, stating:

ORDERED, ADJUDGED AND DECREED: that [the City] recover from [Exxon]... for product liability (failure to warn or insufficient warning), trespass, public nuisance, and negligence... in the amount of $104, 690, 000; plus prejudgment interest... plus post-judgment interest....[8]

The parties also entered a Tolling Agreement that required Exxon to "pay the judgment in full, including applicable accrued pre- and post-judgment interest, if any, within ...


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