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

United States District Court, S.D. New York

September 16, 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 the District.

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

Richard E. Wallace, Jr., Esq., Peter C. Condron, Esq., Amanda Gilbert, Esq., Sedgewick LLP, Washington, D.C., Counsel for Shell Defendants.

Matthew T. Heartney, Esq., Lawrence A. Cox, Esq., Stephanie B. Weirick, Esq., Arnold & Porter LLP, Los Angeles, California, Counsel for BP 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, plaintiff Orange County Water District (the "District"), which is charged with maintaining groundwater quality, 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.[1]

Currently before the Court is a motion for summary judgment brought by Atlantic Richfield Company ("ARCO"), BP West Coast Products LLC, and BP Products North America, Inc. (collectively, the "BP Defendants"), and Shell Oil Company, Equilon Enterprises LLC, and Texaco Refining and Marketing Inc. (collectively, the "Shell Defendants")[2] on the ground that the District's claims are precluded under the doctrine of res judicata. For the reasons stated below, the motion is GRANTED.

II. BACKGROUND[3]

A. Prior Lawsuits Against Defendants

In January 1999, the Orange County District Attorney ("OCDA") initiated two civil actions in Orange County Superior Court, each on behalf of the State of California, alleging that defendants were responsible for unauthorized releases of MTBE gasoline from underground storage tanks they owned, operated, and/or supplied throughout Orange County, resulting in contamination of Orange County soil and groundwater.[4] One suit named ARCO as a defendant; the other suit named Shell Oil Company as a defendant.[5] In October 2000, the OCDA filed a First Amended Complaint in the action against ARCO ("BP FAC"), adding BP Amoco as a defendant.[6] The BP FAC contained additional allegations regarding the health and environmental risks of releases of MTBE gasoline into Orange County groundwater.[7] The BP FAC stated that the OCDA seeks to "compel defendants to cleanup... groundwater contamination... caused by... [MTBE] which contamination constitutes a continuing nuisance... recover damages... protect the environment and [] prevent the destruction of groundwater resources."[8] The BP FAC asserted claims for equitable relief, damages, and penalties, based on claims for public nuisance and violations of California's Health & Safety Code, Fish & Game Code, and Business & Professions Code.[9] In April 2001, the OCDA filed a First Amended Complaint ("Shell FAC") in the action against Shell Oil Company containing similar additional allegations.[10] The OCDA asserted the same claims in the Shell FAC as in the BP FAC.[11]

B. The District

The District "is a special water agency created... to maintain, replenish, and manage groundwater resources."[12] The District does not own groundwater, but it does own "land overlying groundwater at various locations within the District" and claims to have "water rights therein."[13]

Though not a party to the OCDA's suits, the District was familiar with and actively monitored them.[14] For instance, the District circulated a copy of the BP FAC, a press release from the OCDA, and newspaper articles about the lawsuit to its water producers and board of directors.[15] The District also communicated with the OCDA regarding the suits and provided the OCDA with "technical assistance" to aid "in the enforcement of cleanup of MTBE and other petroleum contaminants from leaking gasoline storage tanks in Orange County."[16] The District was present for at least one meeting, perhaps more, with the OCDA regarding the ...


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