Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Monday, May 20, 2024 | Back issues
Courthouse News Service Courthouse News Service

MTBE Case to Stay in Federal Court, Judge Says

(CN) - A lawsuit accusing oil companies of contaminating the soil and groundwater in Merced, Calif., with the MTBE gasoline additive belongs in federal court, a federal judge in Manhattan ruled. U.S. District Judge Shira A. Scheindlin said the case was properly removed to her court, but stayed silent on the bigger issue of whether a relatively new section of the Energy Policy Act violates the Constitution.

The lawsuit, brought by the city's Redevelopment Agency, is part of multidistrict litigation accusing ExxonMobil and others of contaminating soil and ground water with the gasoline additive methyl tertiary butyl ether (MTBE), or its byproduct, tertiary butyl alcohol (TBA).

Both substances are believed to be carcinogens.

Merced sued in state court in April 2008, blaming the additive for a "blighted redevelopment area." The case was eventually removed to federal court and consolidated with more than 100 other lawsuits from around the country.

Merced challenged the legality of the removal, and the U.S. government jumped in to back up the oil companies. The government argued that the move was constitutional, because the oil companies "asserted federal defenses," which it claimed entitled them to a change of venue under section 1503 of the Energy Policy Act.

The section "allows for the removal of legal actions related to allegations of MTBE contamination," according to the ruling.

Judge Scheindlin said the section was added to the legislation "as a compromise," after a safe-harbor provision limiting liability for MTBE producers faced "widespread objections by members of Congress."

The government insisted the section "is part of a comprehensive congressional scheme" that requires "either the averment of a federal defense or the presence of minimal diversity."

Judge Scheindlin pointed to the law's language in deciding to keep Merced's lawsuit in federal court.

"It is difficult to imagine statutory text that is that is clearer than that of section 1503," she wrote. "It permits the removal of all '[c]laims and legal actions filed after the date enactment of this Act related to allegations involving actual or threatened contamination of methyl tertiary butyl ether (MTBE).' ... Section 1503, by its own terms, creates federal jurisdiction over all MTBE-related cases."

Though she found removal appropriate, she expressed concern "that section 1503 allows defendants to remove MTBE-related cases to federal court without providing plaintiffs" the right to do so.

"Section 1503 is not unique among jurisdictional statutes in giving only one party the right to access federal court," Judge Scheindlin wrote in a footnote. "However, these statutes are arguably justified by the greater need of one party to obtain the protection of federal court. It is possible that section 1503 lacks a similar rationale."

Merced never raised this claim, because it wanted the case to stay in state court.

"However, I do not rule out the possibility that section 1503, by providing only defendants with the ability to access federal court, might unconstitutionally deny plaintiffs due process and/or equal protection," she wrote.

"At some point every statute is subjected to its first judicial interpretation," Scheindlin said, adding that the constitutionality of section 1503 "must wait for another day."

"Section 1503 authorizes this case to be in federal court, and that authorization has not produced an unconstitutional result," she concluded. "Whether the application of section 1503 will lead to unconstitutional results in other instances must wait for another day when that issue is squarely presented."

Categories / Uncategorized

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.