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03/31/2014

Gordon & Rees San Diego Team Wins Summary Judgment in Major Water Contamination Action

Gordon & Rees San Diego partner Brian Ledger and senior counsel Tatiana Dupuy won summary judgment in a large-scale environmental action filed by the plaintiff, the city of Fresno, alleging drinking water aquifers were contaminated by the actions of Gordon & Rees’s client Kern Oil & Refining Company.

The city of Fresno filed claims for strict liability, negligence, and nuisance against Kern Oil and other gasoline manufacturers and distributors, alleging contamination and threatened contamination of drinking water aquifers by the chemicals methyl tertiary butyl ether and tertiary butyl alcohol (collectively MTBE). As a plethora of actions concerning MTBE were filed across the country, this matter was included as part of a federal multidistrict litigation proceeding in the Southern District of New York before Presiding Judge Shira Scheindlin.

The plaintiff alleged that Kern manufactured and supplied gasoline containing MTBE that leaked from underground storage tanks at various gasoline stations and contaminated 31 different drinking water aquifers. The plaintiff further claimed the cost to remediate the drinking water aquifers would be in the range of $30 million to $60 million.

Following discovery that reduced the number of aquifers alleged to be contaminated by Kern from 31 to 13, Gordon & Rees filed two separate motions for summary judgment (MSJs). The first MSJ focused on causation. Gordon & Rees argued that the plaintiff had insufficient evidence to prove that Kern gasoline containing MTBE was supplied to any of the gasoline stations alleged to have contaminated the aquifers.

In opposing the MSJ, the plaintiff relied on the “commingled product theory,” which had been accepted by Judge Scheindlin in other MTBE cases and enabled the plaintiffs in those cases to overcome their causation hurdles. This theory allows a plaintiff to prove causation if it can show that a particular defendant’s product is part of an “undifferentiated mass” that contributed to the contamination, even if the plaintiff cannot show any particular shipment or amount of the defendant’s product that contributed to the contamination. The plaintiff argued the theory was applicable because it could show shipments of gasoline to the Fresno terminal (a storage facility), where the product would have been commingled with gasoline from other manufacturers, and then delivered to the subject gasoline stations. Gordon & Rees effectively argued, however, that the commingled product theory should not apply because the plaintiff had no evidence to show Kern Oil’s gasoline was commingled with any other gasoline at the Fresno terminal, or at any of the subject gasoline stations. Accordingly, Judge Scheindlin granted Kern’s first MSJ on causation.

The second MSJ was a motion for partial summary judgment that argued the statute of limitations barred the plaintiff's claims for seven of the 13 stations. Judge Scheindlin granted the second MSJ as well, finding that the plaintiff knew or should have known of the MTBE contamination more than three years prior to the filing of the plaintiff’s complaint.

Following the rulings, Judge Scheindlin denied the plaintiff’s attempts to limit the scope of her rulings and allow the plaintiff to add additional stations. The judge also granted Gordon & Rees’s request to dismiss the entire action with prejudice.

To read the opinion, click here.

Tatiana Dupuy
Brian M. Ledger



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