About 750 Fallston residents have cleared a legal hurdle in their multibillion-dollar lawsuit against Exxon Mobil Corp., alleging they were exposed to groundwater contaminated by a former Exxon station nearly a decade ago.
The 4th U.S. Circuit Court of Appeals has rejected the oil giant’s bid to have the matter litigated in federal court, rather than Harford County Circuit Court, where it was filed in 2004.
In the nine years since it was filed, the case has been through a series of procedural twists and turns that, ultimately, led to two separate lawsuits, featuring the same claims and a nearly identical class of plaintiffs.
Exxon successfully removed the second lawsuit to U.S. District Court in November 2011, but, largely because of the time the first case has been pending in state court, a federal judge last year took the rare step of abstaining from taking any action on it.
On Wednesday, the 4th Circuit affirmed that ruling.
The state-court action had been put on hold pending resolution of the jurisdictional battle, Wednesday’s opinion notes.
In both actions, the plaintiffs claim that the former Upper Crossroads Exxon Station contaminated the water in Fallston with the gasoline additive methyl tertiary butyl ether, a potential carcinogen more commonly known as MTBE.
They allege that Exxon Mobil negligently continued to use MTBE despite knowledge that the chemical could contaminate groundwater.
The plaintiffs allege injuries such as headaches, fear of developing cancer and declining property values.
Each plaintiff is seeking $15 million in compensatory and $75 million in punitive damages. The plaintiffs also seek $850 million for restoration, reimbursement and remediation of their water supply.
The first case, known by its lead plaintiff Koch, was filed in June 2004.
The second case was filed in November 2011 at the request of the county judge who had first certified the case as a class action and then, without prompting, decertified it. That case is known by its lead plaintiff, Ackerman, and includes all but the seven named plaintiffs in the original Koch filing.
Immediately after Exxon succeeded in removing the Ackerman case to federal court, the plaintiffs amended the Koch lawsuit to add the names of all the Ackerman plaintiffs to the state-court action.
Thus, all the claims in the Ackerman case will be resolved by the Koch litigation, the 4th Circuit noted.
In upholding U.S. District Court Judge William D. Quarles Jr.’s decision, the 4th Circuit noted that the two cases grew from the same facts, involved the same claims and stemmed from a single lawsuit that had been wending its way through the state court system for several years.
“[E]ven if the court’s determination that the plaintiffs did not intend to subvert jurisdiction was clearly erroneous, the district court clearly had the discretion to consider these unusual circumstances,” Chief Judge William B. Traxler Jr. wrote for the 4th Circuit.
Judge Roger L. Gregory joined Traxler’s opinion for the three-judge panel.
In a concurring opinion, Judge Allyson K. Duncan said she would affirm Quarles’ decision solely because of an appellate court’s duty to defer unless the lower court’s ruling was an abuse of discretion.
But Duncan, unlike her two colleagues, found fault with Quarles’ conclusion that the Ackerman plaintiffs were not trying to subvert removal to federal court.
“Regardless of any other asserted purpose, plaintiffs have acknowledged that they acted with the intent to defeat federal jurisdiction over their claims,” she said.
Exxon Mobil can seek review of the three-judge panel’s decision to the full 4th Circuit. If that request is unsuccessful, the company could appeal to the U.S. Supreme Court.
Exxon Mobil’s attorney James F. Sanders referred all questions about the case to the company’s public affairs department. Sanders is with Neal & Harwell PLC in Nashville, Tenn.
Todd M. Spitler, an Exxon Mobil spokesman, said in an email that the company had no comment on the decision.
The plaintiffs’ attorney, Paul D. Raschke, did not return telephone messages seeking comment Thursday. Raschke is with the Law Offices of Peter G. Angelos P.C. in Baltimore.
The Fallston litigation is different from two mass-action lawsuits brought against Exxon Mobil over a gasoline leak at a different station, which continued for more than a month in 2006.
In the Jacksonville cases, Maryland’s top court in February struck down jury awards totaling $1 billion in punitive and nearly $650 million in compensatory damages. The Maryland Court of Appeals also ordered new trials on property damage and medical-monitoring claims for a small subset of Jacksonville residents and businesses whose property showed actual contamination.
In the Fallston cases, the plaintiffs claim that, from August 1990 on, the aquifer that provides water to their properties near Crossroads Exxon has been contaminated with MTBE and that ExxonMobil knew of the contamination.
“Despite this knowledge, Exxon never made the necessary repairs and improvements to prevent the ongoing contamination,” the Ackerman complaint states.
“It did not level with the residents and warn them of the harm they faced,” the lawsuit adds. “Exxon instead placed its economic interests ahead of the health and safety of the plaintiffs.”
Exxon, in papers filed with the federal court, denied engaging in wrongful conduct with respect to any of the plaintiffs.”
In 2000, the Maryland Department of the Environment required Exxon Mobil to install a carbon filtration system in an active drinking well in the Upper Crossroads area after finding the water contained 92 parts per billion of MTBE, according to an MDE fact sheet dated Oct. 1, 2010. That is more than the generally accepted level of 40 parts per billion, according to the U.S. Environmental Protection Agency.
In spring 2005, Exxon closed the gas station and decommissioned the active underground storage tank after an MTBE concentration exceeding 6,000 parts per billion was found in an on-site monitoring well, the department stated. MTBE was also found in area residential drinking water wells, the fact sheet added.
In May 2010, groundwater samples from 99 monitoring wells revealed that MTBE level had dropped to 178 parts per billion. Based on the decrease, the department approved the shutting down of a groundwater pump and treatment system at the site, the MDE fact sheet says.
WHAT THE COURT HELD
Ackerman et al. v. Exxon Mobil Corp. et al., 4USCA No. 12-1103. Reported. Opinion by Traxler, C.J. Concurrence by Duncan, J. Argued Jan. 30, 2013. Filed Aug. 7, 2013.
Did the U.S. District Court err in abstaining from jurisdiction over a removable case that was parallel to a pending action in state court?
No; a federal judge can factor in how long a case has been pending in state court in deciding whether to abstain from exercising jurisdiction.
Paul D. Raschke for plaintiffs-appellees; Andrew Gendron for defendants-appellants.
RecordFax # 13-0807-60 (42 pages).