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

United States District Court, S.D. New York

August 29, 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, Counsel for Commonwealth.

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

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

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.

The Puerto Rico legislature recently enacted Law No. 53-2014 ("Law 53"), which states that "prescription does not apply to... claims of the Commonwealth of Puerto Rico relating to non-patrimonial public goods[.]" The Commonwealth now moves under Federal Rule of Civil Procedure 54(b) to revise the Court's prior orders - which dismissed certain defendants on statute of limitations grounds - based on Law 53, which purports to apply retroactively.[1] Defendants object on the grounds that Law 53 (1) does not apply to the Commonwealth's claims; (2) contravenes the separation of powers doctrine set forth in the Puerto Rico Constitution; and (3) violates both the Puerto Rico Civil Code and Defendants' due process rights.[2] For the following reasons, the Commonwealth's motion is DENIED.

II. BACKGROUND

On June 12, 2007, the Commonwealth filed its initial complaint against gasoline suppliers for supplying or trading in gasoline products containing MTBE. On October 31, 2007, the case was transferred to this Court as part of the MTBE MDL. Where an action is transferred under the MDL provision of 28 U.S.C. ยง 1407, "[the] transferee court applies the substantive state law... of the jurisdiction in which the action was filed."[3]

On December 3, 2012, the Commonwealth filed its Third Amended Complaint ("TAC") adding several defendants, including Peerless, Vitol, Trammo, and IAC.[4] On July 16, 2013, the Court held that the Commonwealth's claims against Peerless and Trammo were time-barred because they were filed after the one-year limitations period had run.[5] Similarly, on December 30, 2013, the Court dismissed the Commonwealth's claims against Vitol and IAC as time-barred.[6] The Court explicitly rejected the Commonwealth's argument that the doctrine of nullum tempus occurit regit ("nullum tempus") exempts the Commonwealth from "prescription" or limitations periods.[7]

On May 12, 2014, the Puerto Rico Legislature enacted Law 53.[8] In its "Statement of Motives, " Law 53 states that it is "the intention of this legislation to reaffirm and clarify that prescription does not apply in any manner to the Commonwealth of Puerto Rico whenever it acts in protection and defense of the public (non-patrimonial) goods of the People of Puerto Rico[.]"[9] Law 53 defines "non-patrimonial goods" as those "beyond human commerce."[10] Moreover, the law states that "[t]he norm concerning imprescriptibility over public nonpatrimonial goods and rights" is recognized in Puerto Rico.[11] In fact, "[alt the beginning of the last century, the [Puerto Rico] Supreme Court conceptualized it as an aspect of... nullum tempus ocurrit regit, pursuant to which prescription does not run against the State."[12] As such, Law 53 purports to amend Article 1830 and 1832 of the Puerto Rico Civil Code to "clarify" that the Commonwealth's "nonpatrimonial public goods which the Commonwealth has and maintains in the name and for the benefit of [the people] are not subject to prescription."[13] The law further states that it "shall apply retroactively [to every case] where there has not been a final, firm, and unappealable judgment."[14]

III. LEGAL STANDARD FOR REVISING A PRIOR ORDER UNDER RULE 54(B)

Rule 54(b) authorizes courts to revise "any order or other decision... that adjudicates fewer than all the claims... of fewer than all the parties... at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities." The district court's discretion to revise a prior ruling is, however, limited by the law of the case doctrine and subject to "the caveat that where litigants have once battled for the ...


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