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Federal judge allows suit over groundwater contamination to proceed

U.S. District Judge Ellen L. Hollander. (File photo)

U.S. District Judge Ellen L. Hollander. (File photo)

Maryland’s lawsuit to redress the contamination of its waters with a gasoline additive can proceed after a federal judge denied the majority of motions to dismiss.

U.S. District Judge Ellen L. Hollander ruled on multiple motions to dismiss on Sept. 4. She issued a revised opinion Monday after being notified that her 86-page opinion had been selected for publication in a federal supplement.

Maryland Attorney General Brian E. Frosh announced the lawsuit, which names more than 50 petroleum-related companies, in December 2017. The complaint alleges widespread water contamination from methyl tertiary butyl ether, or MTBE, a fuel additive since replaced with ethanol that leaked from underground storage tanks at service stations.

The lawsuit names companies such as ExxonMobil, Shell, Sunoco, BP, Chevron, Hess and Marathon.

“Our water is a vital public resource and a source of drinking water for a large number of Maryland residents,” Frosh said in a statement when the suit was filed. “These companies knew that the use and sale of MTBE gasoline in Maryland would contaminate the state’s drinking water and render a lot of it virtually undrinkable.”

The state brought in a team of outside attorneys in early 2016 to assist with the filing of a lawsuit, with a sliding scale of up to 22.5% of the recovery of damages up to $100 million to 8% for damages of $1 billion and above if the case proceeds to trial. Lower percentages would be awarded if the case settles.

The lawsuit alleges the defendants knew as early as 1980 that MTBE was harmful and could contaminate groundwater but did not warn the public or use safer alternatives. The complaint makes claims for strict liability, public nuisance, trespass, negligence and violations of state environmental statutes.

The motion to dismiss for failure to state a claim joined by 62 of the defendants was largely denied. Hollander dismissed the state’s trespass claim for properties outside its exclusive possession but preserved the remaining claims.

Maryland’s complaint admits that MTBE cannot be linked to a particular defendant because it lacks any distinguishing traits among products. However, the complaint argues that the state’s “injury was caused by the commingled, fungible MTBE gasoline of several defendants,” according to the opinion. Hollander said Maryland courts have not addressed that theory of causation but concluded they would endorse its application in this case.

“To shield defendants from liability merely because the nature of their product makes it impossible to establish the manufacturer, refiner, or supplier would be contrary to Maryland law and public policy,” she concluded.

Hollander also found Maryland stated a claim for a design defect because it alleges contamination was a foreseeable risk of the sale of MTBE gasoline, as well as a claim for failure to warn because there may be evidence that someone in the supply change exercised control and had a duty to caution consumers.

Maryland’s public nuisance claim was also preserved, with Hollander concluding the state “plausibly alleges that defendants who manufactured and distributed MTBE gasoline substantially contributed to the creation of a public nuisance.”

“It asserts that defendants had extensive knowledge of the environmental hazards associated with MTBE; intentionally and deceptively promoted MTBE as an additive in gasoline despite this knowledge; manufactured and distributed MTBE gasoline in Maryland even though they knew or reasonably should have known that it would be placed into leaking gasoline storage and delivery systems there; and failed to warn downstream handlers, consumers, and the public of the dangers associated with the MTBE,” she wrote.

Hollander also declined to dismiss the state’s environmental law claims.

The case is State of Maryland v. ExxonMobil Corporation et al., 1:18-cv-00459.

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