Orange Cnty. Water Dist. v. Unocal (In re Methyl Tertiary Butyl Ether (“MTBE”) Prods. Liab. Litig.), Master File No. 1:00–1898.MDL No. 1358 (SAS).No. M21–88.

824 F.Supp.2d 524

In re METHYL TERTIARY BUTYL ETHER (“MTBE”) PRODUCTS LIABILITY LITIGATION.This document relates to:Orange County Water District

v.Unocal, et al., 04 Civ. 4968.

Master File No. 1:00–1898.MDL No. 1358 (SAS).No. M21–88.

United States District Court, S.D. New York.

June 20, 2011.

Michael Axline, Esq., Tracey O'Reilly, Esq., Miller, Axline & Sawyer, Sacramento, CA, for Orange County Water District.

Matthew T. Heartney, Esq., Arnold & Porter LLP, Los Angeles, CA, for Atlantic Richfield Company and BP Products North America, Inc.

Robin Greenwald, Esq., Robert Gordon, Esq., Weitz & Luxenberg, P.C., New York, NY, for Plaintiffs.Peter John Sacripanti, Esq., James A. Pardo, Esq., McDermott Will & Emery LLP, New York, NY, for Defendants.

OPINION AND ORDER

SHIRA A. SCHEINDLIN, District Judge:I. INTRODUCTION

In this consolidated multi-district litigation (“MDL”), plaintiffs seek relief from contamination, or threatened contamination, 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 natural degradation of MTBE in water. In this case, plaintiff Orange County Water District (“OCWD” or the “District”), which is responsible for maintaining groundwater quality within its geographic region, alleges that defendants' use and handling of MTBE has resulted in contamination and threatened future contamination of groundwater within that region.¹

In two previous decisions I dismissed a large number of OCWD's common law claims as time-barred.² The claims that survived included common law claims for injuries suffered due to MTBE releases occurring after May 6, 2000 (including nuisance and trespass), statutory claims under the Orange County Water District Act (“OCWD Act” or the “Act”) “to recover reasonable costs actually incurred since May 6, 2000,” and “declaratory relief with respect to future expenses OCWD may incur.” ³

OCWD now moves for partial summary judgment under Federal Rule of Civil Procedure 56(a) on three claims against certain defendants associated with fourteen gasoline service station sites ⁴ that share four common, undisputed characteristics: first, at each of the fourteen sites, MTBE has been detected in groundwater samples drawn mainly from “Shallow” aquifers ⁵ at levels exceeding five parts per billion (“ppb”); ⁶ second, each defendant either owned or leased the station and any on-site underground storage tanks (“USTs”) associated with the station; third, each defendant supplied MTBE gasoline to the station; and fourth, each defendant has conducted remediation at the site.⁷ While deferring the issue of damages for trial, OCWD argues that these undisputed facts establish defendants' liability (1) under the OCWD Act and for (2) public nuisance and (3) trespass. For the reasons set forth below, OCWD's motion is denied.

II. BACKGROUNDA. Defendants' Remediation Activities

The defendants implicated in this motion are performing remediation under agency supervision pursuant to Chapter 6.7 of the California Health and Safety Code, which relates to unauthorized UST releases.⁸ A “release” is broadly defined as “any spilling, leaking, emitting, discharging, escaping, leaching, or disposing from an underground storage tank into or on the waters of the state, the land, or the subsurface soils.” ⁹ Spills and overfills “due to the use of improper equipment, faulty equipment, operator error, or inattention or overfilling” that take place while gasoline is being placed in a UST also qualify as unauthorized releases.¹⁰ When a release is detected, the owner or operator of the UST is responsible for reporting the occurrence to the local designated agency (not OCWD ¹¹) and describing the details of the spill and any corrective or remedial actions undertaken and any further remedial actions necessary to clean up the release. ¹² The owner or operator then performs any necessary corrective action as identified in a work plan approved by the agency, under the supervision of the agency, until closure.¹³

B. OCWD

OCWD is a statutorily-created “special water agency” charged with the responsibility to “maintain, replenish, and manage groundwater resources” within its geographic area.¹⁴ OCWD is statutorily authorized to “prevent interference [with] ... [or] diminution ... [or] pollution or contamination” of that groundwater.¹⁵ OCWD is also empowered “to conduct any investigations of the quality of the surface and groundwaters within the district ... to determine whether those waters are contaminated or polluted” and to “expend available funds to perform any cleanup, abatement, or remedial work required under the circumstances.” ¹⁶ Although OCWD owns many monitoring wells ( i.e., wells used to monitor groundwater contamination), unlike other plaintiffs in this MDL, OCWD does not own any production wells ( i.e., wells used to provide water to the public).¹⁷

Earlier in this litigation, OCWD argued, and this Court accepted, that OCWD has usufructuary rights in the groundwater that it alleges defendants have contaminated.¹⁸ I held that on the basis of these property rights, OCWD is able to pursue its common law claims, such as public nuisance and trespass.¹⁹ In a later Opinion, I held that, for the purposes of determining when the statute of limitations for those common law claims began to run,²⁰ “whether OCWD has suffered an injury turns on whether [ ] contamination caused or should have caused OCWD to act in furtherance of its charge[ ][of] protecting all groundwater within the District's territory.” ²¹ I concluded that “OCWD was appreciably harmed as a matter of law when MTBE was detected at or above five ppb at any monitoring well within OCWD's territory.” ²²

C. OCWD's Regulatory Context

OCWD is one of at least two other agencies with concurrent oversight of the water supply in and around its service area. First, California's State Water Resources Control Board comprises nine regional water boards, one of which is the Santa Ana Regional Water Quality Control Board (“Regional Board”). The Regional Board's territory encompasses several water districts, including OCWD. Second, the Orange County Health Care Agency (“OCHCA”) is a regional public health agency tasked with, inter alia, investigation and remediation of certain MTBE spill sites. Both the Regional Board and OCHCA have been active in remediation of MTBE at spill sites within OCWD's service area, including those owned by defendants, but neither agency has undertaken MTBE remediation efforts beyond those spill sites.

In a previous decision, I held that OCWD's usufructuary rights in its groundwater were not subservient to the rights of other agencies such as the Regional Board, and denied defendants' motion to stay or remand based on a theory of primary jurisdiction.²³ That motion was based in part upon defendants' contention that various other regulatory agencies were already active in the on-site remediation at various sites within OCWD's territory, and that California's regulatory scheme had already provided or would provide the relief sought by OCWD in this suit.²⁴ In denying that motion, I noted that “[w]hile other agencies such as the Regional Board or OCHCA may engage in spill-site remediation, they do not attempt remediation or containment of MTBE plumes that may have escaped the spill site before remediation efforts began (or may persist despite such efforts) ....” ²⁵

D. OCWD's Efforts

“OCWD became acquainted with MTBE contamination in 1995 .... Soon after, OCWD began systematic testing for MTBE contamination within its district.” ²⁶ Since then, the District has retained environmental consultants to prepare reports regarding MTBE contamination at gas stations in the District's service area, including the stations that are the subject of this motion.²⁷ The consultants' reports generally characterize MTBE levels, movement in groundwater, migration pathways, and potentially vulnerable production wells near each of the sites.²⁸ The District has not yet performed any actual MTBE cleanup at or around any of the sites involved in this motion.

III. LEGAL STANDARD

Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” ²⁹ “An issue of fact is genuine if ‘the evidence is such that a reasonable jury could return a verdict for the nonmoving party.’ A fact is material if it ‘might affect the outcome of the suit under the governing law.’ ” ³⁰ “[T]he burden of demonstrating that no material fact exists lies with the moving party ....” ³¹ “When the burden of proof at trial would fall on the nonmoving party, it ordinarily is sufficient for the movant to point to a lack of evidence ... on an essential element of the nonmovant's claim.” ³² In turn, to defeat a motion for summary judgment, the non-moving party must raise a genuine issue of material fact. To do so, the non-moving party must do more than show that there is “ ‘some metaphysical doubt as to the material facts,’ ” ³³ and “ ‘may not rely on conclusory allegations or unsubstantiated speculation.’ ” ³⁴ However, “ ‘all that is required [from the non-moving party] is that sufficient evidence supporting the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial.’ ” ³⁵

“In ruling on a motion for summary judgment, a court must resolve all ambiguities and draw all factual inferences in favor of the nonmoving party.” ³⁶ However, “[i]t is a settled rule that ‘[c]redibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not for the court on a motion for summary judgment.’ ” ³⁷ Summary judgment is therefore “appropriate only if there is no genuine...