In Re: Methyl Tertiary Butyl Ether Products Liability Litigation

Background

This action is part of multidistrict litigation concerning alleged groundwater contamination from methyl tertiary butyl ether (MTBE) and tertiary butyl alcohol, a product formed when MTBE breaks down in water. New Jersey alleges that the defendants’ manufacture or use of MTBE contaminated, or threatened to contaminate, groundwater within the State. The motion addressed claims against Exxon Mobil Corporation and ExxonMobil Oil Corporation, which the opinion collectively calls “Exxon.”

Under New Jersey’s Spill Compensation and Control Act, “remediation” means reducing contamination to risk-based standards. For MTBE, the relevant standard is 70 parts per billion or less. “Primary restoration” refers to reducing contamination to pre-discharge conditions, which for MTBE means a level at or near zero. “Compensatory restoration” concerns the lost use and value of contaminated resources while restoration is pending.

Exxon had undertaken remediation efforts at various New Jersey sites under plans approved by the New Jersey Department of Environmental Protection. Exxon argued that the apparent success of those efforts made New Jersey’s claims for primary restoration damages unripe because the amount of any restoration damages depended on what the ongoing remediation ultimately accomplished.

Rule 12(b)(1) motion

Exxon moved under Federal Rule of Civil Procedure 12(b)(1), which permits dismissal when the court lacks subject-matter jurisdiction—the legal authority to hear the dispute. Exxon characterized New Jersey’s restoration-damages claims as too speculative and contingent on future remediation results.

The court denied the motion because binding Second Circuit precedent foreclosed Exxon’s ripeness argument. Ripeness asks whether a claim presents a real, present controversy rather than a hypothetical question. In an earlier decision involving another claim in this multidistrict litigation, the Second Circuit held that the presence of MTBE constituted a present injury and that uncertainty about a damages model was different from whether the underlying claim was ripe for adjudication.

The court applied that reasoning here. New Jersey’s operative pleading alleged that MTBE had been detected in the State’s waters and that the contamination had injured and continued to injure those waters. Exxon did not dispute the existence of present contamination. Instead, its argument concerned the reliability of predicting future restoration work and the resulting amount of damages. The court held that this was a damages issue, not a ripeness defect.

The court also relied on New Jersey law. The Spill Act allows New Jersey to pursue administrative and judicial remedies at the same time and does not require completion of administrative remediation before seeking restoration damages. The court rejected Exxon’s argument that a separate New Jersey statute postponed accrual of the claims until remediation was complete. The court read that statute as establishing a limitations period, not as defining when the claims accrued.

Closed sites and disposition

Exxon also asked the court to schedule a conference about claims involving “closed sites,” meaning sites that had reached a specified point in the remediation process under New Jersey regulatory law. The court agreed that the parties should first address those issues through a meet-and-confer process. Any issues that could not be resolved and were appropriate for judicial resolution could be presented to the designated magistrate judge handling general pretrial matters.

Judge Vernon S. Broderick’s conclusion states that Exxon’s motion was DENIED. The court also denied Exxon’s request for oral argument and directed the Clerk of Court to close the related open motions on the docket.