In re Methyl Tertiary Butyl Ether ("MTBE) Prod. Liab. Litig., MDL 1358

In Re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation This document relates to Commonwealth of Pennsylvania v. Exxon Mobil Corporation, et al., Case No. 14 Civ. 6228 (VSB)

MDL No. 1358

Master File No. 1:00-1898

United States District Court, S.D. New York

August 2, 2021

James A. Donahue, III

Pennsylvania Office of the Attorney General

Linda C. Barrett

Pennsylvania Governor's Office of General Counsel

Michael Axline

Miller & Axline, P.C.

Daniel Berger

Tyler E. Wren

Berger & Montague, P.C.

Stewart L. Cohen

Robert L. Pratter

Michael Coren

Cohen, Placitella & Roth, P.C.

Counsel for Plaintiff Commonwealth of Pennsylvania

James P. Tuite

Katherine M. Katchen

Matthew A. Scarola

Akin Gump Strauss Hauer & Feld LLP

Counsel for Defendant Lukoil Americas Corporation

James A. Pardo

Lisa A. Gerson

McDermott Will & Emery LLP

Counsel for Certain Defendants

OPINION & ORDER

Vernon S. Broderick United States District Judge

I. Factual Background......................................................................................................................................................3

A. MTBE Generally.........................................................................................................................................................3

B. LAC and Getty Petroleum Marketing Inc.....................................................................................................................3

C. Material Safety Data Sheets Produced by Certain Defendants......................................................................................6

D. Public Statements and Advertising by Certain Defendants.............................................................................................9

E. Certain Defendants' Claims for Payments From the Underground Storage Tank Indemnification Fund............................13

II. Relevant Procedural History.........................................................................................................................................13

III. Legal Standards..........................................................................................................................................................16

A. Rule 12(b)(2)...............................................................................................................................................................16

B. Rule 12(b)(6)...............................................................................................................................................................17

IV. Discussion..................................................................................................................................................................18

A. Lukoil Americas Corporation's Motion to Dismiss........................................................................................................18

1. Personal Jurisdiction......................................................................................................................................................18

a. Applicable Law.............................................................................................................................................................18

b. Application....................................................................................................................................................................21

i. General Jurisdiction.........................................................................................................................................................22

a) Choice of Law...............................................................................................................................................................23

ii. Specific Jurisdiction........................................................................................................................................................25

2. Failure to State a Claim..................................................................................................................................................35

a. Liability for Conduct After LAC Acquired GPMI............................................................................................................36

b. Liability for Conduct Before LAC Acquired GPMI.........................................................................................................39

B. Certain Defendants' Motion to Dismiss...........................................................................................................................40

1. Count III: Public Nuisance..............................................................................................................................................41

2. Counts VI and VII: Violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law.........................41

a. Applicable Law...............................................................................................................................................................41

b. Application......................................................................................................................................................................42

i. Count VI: The Material Safety Data Sheets........................................................................................................................43

ii. Public Statements..............................................................................................................................................................45

a) Government Gas Advertisement........................................................................................................................................45

b) Newspaper Articles..........................................................................................................................................................48

iii. Availability of Injunctive Relief...........................................................................................................................................52

3. Count IX: Violation of the Pennsylvania Storage Tank and Spill Prevention Act...................................................................52

a. Applicable Law..................................................................................................................................................................52

b. Application.........................................................................................................................................................................53

V. Conclusion.........................................................................................................................................................................56

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 Pennsylvania (“the Commonwealth” or “Pennsylvania”) alleges that defendants' use and handling of MTBE contaminated, or threatens to contaminate, groundwater within its jurisdiction. Before me are (1) Defendant Lukoil Americas Corporation's (“LAC”) motion to dismiss for lack of personal jurisdiction and for failure to state a claim; and (2) the motion to dismiss for failure to state a claim of certain other Defendants.^[1]

For the reasons that follow, the motions are each GRANTED IN PART and DENIED IN PART. Specifically, the Commonwealth has sufficiently alleged that Defendant Getty Petroleum Marketing Inc.'s veil may be pierced for jurisdictional purposes; therefore, LAC's motion to dismiss for lack of personal jurisdiction is DENIED. However, because the Commonwealth has failed to plausibly allege facts sufficient to warrant a finding that Defendant Getty Petroleum Marketing Inc.'s veil may be pierced for liability purposes and the Commonwealth has not properly pled successor liability, LAC's motion to dismiss for failure to state a claim is GRANTED. Because the Commonwealth has once again failed to allege that any Defendants possessed or controlled the MTBE release sites that the Commonwealth alleged created a nuisance, Certain Defendants' motion to dismiss Count III is GRANTED.^[2] Because the Commonwealth has not set forth any specific allegations of deceptive and misleading conduct that are actionable under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), Certain Defendants' motion to dismiss Counts VI and VII against them are GRANTED.^[3] Finally, because the Commonwealth has adequately alleged that the Insurance Defendants^[4] were required to disclose information about their private insurance coverage in response to the Commonwealth's request for information on subrogation, Certain Defendants' motion to dismiss the Commonwealth's claim under the Pennsylvania Storage Tank and Spill Prevention Act is DENIED.

I. Factual Background^[5]

A. MTBE Generally

MTBE is an additive used to oxygenate and/or enhance the octane of gasoline. (SAC ¶¶ 138, 140.)^[6] It can be introduced into the environment “through disposals deposits, releases, leaks, overfills, spills and evaporative releases . . . from a variety of sources, principally . . . gasoline storage and delivery systems.” (Id. ¶ 144.) When it encounters water, MTBE behaves differently from the other constituents of gasoline. (Id. ¶ 145.) It separates from those constituents, dissolves easily, does not readily adhere to soil...