State of Maryland v. Exxon Mobil Corporation et al
REVISED MEMORANDUM OPINION. Signed by Judge Ellen L. Hollander on 9/4/2019. (cags, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
STATE OF MARYLAND,
Civil Action No. ELH-18-0459
EXXON MOBIL CORPORATION, et al.,
This Memorandum Opinion resolves numerous motions to dismiss a 168-page Complaint
filed by the State of Maryland (“State” or “Maryland”) against approximately sixty-five
defendants.1 The State seeks to redress the alleged contamination of its waters with methyl tertiary
butyl ether (“MTBE”), an oxygenate additive that was commonly blended into gasoline in the
1980s and 1990s. ECF 2 (Complaint).2
The Complaint contains eleven counts. ECF 2, ¶¶ 308, 417. The first six counts allege
common law tort claims: Strict Product Liability Based on Defective Design (Count I); Strict
Product Liability Based on Failure to Warn (Count II); Strict Liability for Abnormally Dangerous
Activity (Count III); Public Nuisance (Count IV); Trespass (Count V); and Negligence (Count VI).
The remaining counts seek to impose liability under various provisions of the Environment Article
The case was initially assigned to Judge Marvin J. Garbis. In July 2018, it was reassigned
to me, due to the retirement of Judge Garbis. See Docket.
Defendant Atlantic Richfield Company removed the case from the Circuit Court for
Baltimore City to federal court, pursuant to 28 U.S.C. § 1331 and Section 1503 of the Energy
Policy Act of 2005, 42 U.S.C. § 7545. ECF 1 (Notice of Removal). As discussed, infra, the State
moved to remand. ECF 283. I denied the motion in a Memorandum Opinion and Order of October
24, 2018. See ECF 346; ECF 347.
(“E.A.”) of the Maryland Code (2013 Repl. Vol., 2019 Supp.): E.A. § 4–401 et seq. (Count VII);
E.A. § 4–701 et seq. (Count VIII); E.A. § 9–301 et seq. (Count IX); E.A. § 9–401 et seq. (Count
X); and E.A. § 7–201 et seq. (Count XI).
Several motions are now pending. Defendant Total Petrochemicals & Refining USA, Inc.
(“TPRI”)3 moved to dismiss the Complaint for lack of personal jurisdiction, pursuant to Fed. R.
Civ. P. 12(b)(2), and for failure to state a claim, under Fed. R. Civ. P. 12(b)(6). ECF 333. The
motion is supported by a memorandum of law (ECF 333-1) (collectively, “TPRI Motion”) and two
exhibits. ECF 333-2; ECF 333-3. The State opposes the TPRI Motion (ECF 357), supported by
two exhibits. ECF 357-1; ECF 357-2. TPRI has replied (ECF 377), with an exhibit. ECF 377-1.
Defendants Duke Energy Merchants, LLC (“Duke Energy”), George E. Warren
Corporation (“Warren”), and Guttman Energy, Inc. (“Guttman Energy”), joined by TPRI and
Hartree Partners, LP (“Hartree”), also moved to dismiss the Complaint, pursuant to Fed. R. Civ.
P. 12(b)(6), for failure to state a claim. ECF 334; see also ECF 338 (Hartree Joinder). The motion
is supported by a memorandum of law. ECF 334-1 (collectively, “Warren Motion”). The State
opposes the Warren Motion (ECF 358), supported by an exhibit. ECF 358-1. Defendants filed a
reply (ECF 378), as well as two exhibits. ECF 378-1; ECF 378-2.
In addition, sixty-two defendants, including Exxon Mobil Corporation (“Exxon”), TPRI,
Duke Energy, Warren, and Guttman Energy, jointly moved to dismiss the Complaint under Fed.
R. Civ. P. 12(b)(6). ECF 335. It is supported by a memorandum of law (ECF 335-1) (collectively,
the “Joint Motion”) and an exhibit. ECF 335-3. The State opposes the Joint Motion. ECF 359.
Defendants have replied (ECF 381), and submitted two exhibits. ECF 381-1; ECF 381-2.
TPRI was formerly named “Fina Oil and Chemical Company.” See ECF 357-1 at 31;
ECF 357-2, ¶ 27.
In a separate motion, defendant 7-Eleven, Inc. (“7-Eleven”) joins the Joint Motion (ECF
336), supported by a memorandum of law. ECF 336-1 (collectively, “7-Eleven Motion”). It
moves to dismiss the Complaint for failure to state a claim. ECF 336 at 1. Alternatively, it seeks
“a more definite statement of [the] claims against 7-Eleven,” pursuant to Fed. R. Civ. P. 12(e). Id.
The State opposes the 7-Eleven Motion (ECF 355), supported by an exhibit. ECF 355-1. 7-Eleven
has replied. ECF 379.
In addition, defendant Lukoil Pan Americas LLC (“LPA”) moved to dismiss the
Complaint, pursuant to Fed. R. Civ. P. 12(b)(2), for lack of personal jurisdiction, and under Fed.
R. Civ. P. 12(b)(6), for failure to state a claim. ECF 342. The motion is supported by a
memorandum of law (ECF 342-1) (collectively, “LPA Motion”) and an exhibit. ECF 342-2. The
State has filed an opposition. ECF 368. LPA replied (ECF 387), with an exhibit. ECF 387-1.
Defendant PJSC Lukoil (“PJSC”)4 also moved to dismiss the Complaint, pursuant to Fed.
R. Civ. P. 12(b)(2), for lack of personal jurisdiction. ECF 343. It is supported by a memorandum
of law (ECF 343-1) (collectively, the “PJSC Motion”) and an exhibit. ECF 343-2. The State
opposes the PJSC Motion (ECF 366), with exhibits. ECF 366-1; ECF 366-2; ECF 366-3. PJSC
has replied. ECF 388.
No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons
stated below, I shall grant the PJSC Motion, and grant in part and deny in the part the Joint Motion.
I shall deny the remaining motions.
PJSC was previously known as “OAO Lukoil.” ECF 139 at 1 n.1 (Disclosure of
Corporate Interest Statement filed by PJSC on Feb. 22, 2018).
MTBE and Water Contamination
MTBE is a chemical compound made by combining methanol (a derivative of natural gas)
and isobutylene (a by-product of the gasoline-refining process). ECF 2, ¶ 103. It was commonly
blended into gasoline in the 1980s and 1990s as an “oxygenate” and “octane enhancer” to reduce
carbon monoxide tailpipe emissions. Id. ¶¶ 107, 117–129. Compared with other oxygenates like
ethanol, MTBE was inexpensive to manufacture because it was made from readily available
refinery byproducts. Id. ¶¶ 103, 127.
Gasoline is made by processing crude oil at a refinery. Id. ¶ 105. It is then transported
through pipelines, tank ships, and barges to “common storage tanks” located at terminals around
the country. Id. ¶ 106. From there, it is “transshipped” by pipeline or other means to “secondary
terminals” or “depots,” and then taken by trucks to gas stations for retail sale. Id. MTBE was
blended into the gasoline at the refinery itself, or “splash blended” at terminals by adding it to
truck tanks after those tanks were filled with gasoline from the terminal. Id. ¶ 105. Because
MTBE-enhanced gasoline is fungible, batches were frequently comingled from different sources
during the production and distribution process. Id. ¶¶ 99–100.
MTBE allegedly enters the environment “through disposals, deposits, releases, leaks,
overfills, spills, discharges and evaporative releases,” and is “principally release[d]” while in
underground storage tanks or during delivery. Id. ¶¶ 1, 109. When released, MTBE is highly
soluble in groundwater, spreads rapidly, does not naturally degrade, resists removal and treatment
from groundwater, and is difficult to locate. Id. ¶¶ 2, 110–11, 113. It can also migrate into
Given the procedural posture of this case, I must assume the truth of all factual allegations
in the Complaint. See E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440
(4th Cir. 2011).
subsurface-soil regions and penetrate into aquifers. Id. ¶¶ 112, 114. For these reasons, the State
claims that MTBE “is and has been more difficult and more expensive to remove from
groundwater than other contaminants.” Id. ¶ 114.
The United States Geological Survey has reported that MTBE is the “second most
frequently detected volatile organic chemical in groundwater in the United States.” Id. ¶ 130.
Around the United States, MTBE has been detected in “over 20% of aquifers tested in places where
high MTBE-content gasoline was used.”
MTBE has also been found in “varying
concentrations and at varying times” in public water systems and private drinking-water wells in
Maryland. Id. ¶¶ 218, 220. According to the State, studies have shown that MTBE “is a probable
human carcinogen,” can cause “significant adverse health effects when ingested,” and “can render
drinking water putrid and unfit for human consumption.” Id. ¶¶ 4, 137.
The History of MTBE Use and Legislative Background
In 1979, before defendants allegedly knew the harmful effects of MTBE, the Administrator
of the United States Environmental Protection Agency (“EPA”) granted a waiver for the use of
7% MTBE in unleaded gasoline, finding that MTBE as a fuel additive did not cause or contribute
to the failure of any emission control device or system. Id. ¶¶ 117, 134; Application for Methyl
Tertiary Butyl Ether, Decision of the Administrator, 44 Fed. Reg. 12,242, 12,243 (Mar. 6, 1979).
The market demand for MTBE and MTBE-blended gasoline began around the same time and grew
rapidly, continuing well into the 1990s. ECF 2, ¶¶ 117, 125. By 1996, MTBE “ranked second
among all organic chemicals produced in the United States, with virtually the entire production
going into gasoline.” Id. ¶ 129.
Growth in the MTBE market was encouraged by the 1990 Clean Air Act Amendments,
which established the Reformulated Gasoline Program (“RFG Program”).
Clean Air Act
Amendments of 1990, Pub. L. No. 101–549, 104 Stat. 2399 (1990) (“CAA”), § 219(k). The RFG
Program required the use of reformulated gasoline containing at least 2.0% oxygen by weight in
designated ozone “non-attainment” areas of the country, meaning areas that do not meet the
national ambient air quality standards (“NAAQS”) for ozone. Id. § 219(k)(2)(B). Subsequent
EPA regulations included MTBE as one of several oxygenates to be used in the testing of
reformulated gasoline. See, e.g., Use of Alternative Analytical Test Methods in the Reformulated
Gasoline Program, 40 C.F.R. § 80.46(g), 61 Fed. Reg. 58304, 58306 (Nov. 13, 1996). Portions of
Maryland were subject to the RFG Program. ECF 2, ¶ 122.
The 1990 Amendments also authorized EPA’s initiation of the Oxygenated Fuel Program
(“OF Program”), which required gasoline in some metropolitan regions to contain at least 2.7%
oxygen by weight to reduce carbon monoxide during the fall and winter months. CAA, § 219(m).
The State alleges that MTBE-blended gasoline sold in non-attainment areas often exceeded the
minimum oxygenate requirements in the RFG and OF programs, and was even used in the regions
that were not participating in the RFG program. ECF 2, ¶ 124.
By 2000, the federal government recognized the dangers of the release of MTBE into
groundwater and took initial steps to consider eliminating it as a fuel additive. See Methyl Tertiary
Butyl Ether (MTBE); Advance Notice of Intent to Initiate Rulemaking Under the Toxic Substances
Control Act to Eliminate or Limit the Use of MTBE as a Fuel Additive in Gasoline, 65 Fed. Reg.
16,094 (Mar. 24, 2000). Around this time, several states had “taken actions designed to limit the
use of MTBE in gasoline.” Id. at 16,097. Many lawsuits alleging MTBE contamination were filed
and consolidated before the United States District Court for the Southern District of New York.
See In re Methyl Tertiary Butyl Ether Prods. Liab. Litig. v. Atl. Richfield Co. (In re MTBE), MDL
No. 1358, 2000 U.S. Dist. LEXIS 14901, at *4 (J.P.M.L. Oct. 10, 2000).
In 2005, Congress passed the Energy Policy Act (“EPACT”), which phased out the RFG
oxygenate requirement and established the Renewable Fuel Program in its place. See Energy
Policy Act of 2005, Pub. L. No. 109–58, §§ 1501, 1504, 119 Stat. 594 (2005), codified in part at
42 U.S.C. § 7545 et seq.6 The new program requires gasoline suppliers to blend their product with
renewable fuels, such as cellulosic biomass ethanol, waste derived ethanol, and biodiesel. Id.
The EPACT also directly addressed the status of MTBE as an additive to gasoline.
Congress made the following findings, id. § 1502, 42 U.S.C. § 7545:
since 1979, methyl tertiary butyl ether (hereinafter in this section referred
to as “MTBE”) has been used nationwide at low levels in gasoline to replace
lead as an octane booster or anti-knocking agent;
Public Law 101–549 (commonly known as the “Clean Air Act Amendments
of 1990”) (42 U.S.C. [§] 7401 et seq.) established a fuel oxygenate standard
under which reformulated gasoline must contain at least 2 percent oxygen
by weight; and
the fuel industry responded to the fuel oxygenate standard established by
Public Law 101–549 by making substantial investments in—
(A) MTBE production capacity; and
(B) systems to deliver MTBE-containing gasoline to the
Claims and Procedural History
The State initially filed suit in the Circuit Court for Baltimore City on December 13, 2017,
in its capacity as parens patriae; as trustee of the State’s natural resources; and under the Maryland
Environmental Standing Act, Md. Code (2013 Repl. Vol., 2019 Supp.), § 1–501 et seq. of the
Natural Resources Article (“N.R.”). ECF 2, ¶ 6. The suit named approximately sixty-five
The EPACT is codified in various titles of the U.S. Code, including 16 U.S.C. and 42
defendant manufacturers, marketers, and distributors of gasoline that together “controlled all, or
substantially all, of the market in Maryland for MTBE and MTBE gasoline” for the relevant period.
ECF 2, ¶ 26. Between 1995 and 2001, about 1.2 billion gallons of pure (or “neat”) MTBE was
included in the reformulated gasoline sold in Maryland. Id. ¶ 214.
Maryland alleges that defendants knew as early as 1980 that MTBE was harmful and could
contaminate groundwater (id. ¶ 134), but refused to warn the public or to use safer alternatives like
ethanol. Id. ¶ 206. According to Maryland, defendants “knew, or reasonably should have known,”
that the MTBE gasoline distribution and retail system throughout Maryland contained leaks. Id.
¶ 204. Even so, defendants allegedly defended and promoted MTBE, despite knowledge of its
risks, and engaged in deceptive marketing of MTBE as a clean or environmentally friendly
gasoline. Id. ¶¶ 161–189, 225–232. Maryland asserts that defendants “falsely or inadequately
addressed MTBE” in their material safety data sheets provided to customers. Id. ¶ 233.
As indicated, the Complaint includes claims for strict liability (defective design, failure to
warn, abnormally dangerous activity); public nuisance; trespass; negligence; and violations of
various State environmental statutes. The State seeks compensatory and punitive damages and
costs for testing, cleanup, monitoring, and restoration of State waters, as well as an injunction
requiring defendants to test and treat drinking water wells containing MTBE. Id. at 163–66.
Defendant Atlantic Richfield Company (“ARCO”) removed the case to federal court under
Section 1503 of the EPACT, 42 U.S.C. § 7545. See ECF 1. ARCO asserted that jurisdiction is
proper in federal court because the case is within the court’s Article III judicial powers. Id. ¶¶ 2,
5. Specifically, ARCO claimed that the allegations of MTBE contamination raise questions of
federal law under the CAA and EPACT, which “together are part of a comprehensive federal
scheme” (id. ¶ 5), and that plaintiff’s claims conflict with, and are preempted by, federal law. ECF
1, ¶¶ 5–6. The Notice of Removal also raised other potential defenses under federal water quality
standards and the Due Process and Excessive Fines Clause of the United States Constitution. Id.
Moreover, ARCO asserted that “all defendants properly joined and served in this action have
consented to this removal.” Id. ¶ 8.
Thereafter, the State moved to remand. ECF 283.7 In a Memorandum Opinion (ECF 346)
and Order (ECF 347) of October 24, 2018, I denied the State’s motion. I concluded that removal
was proper under Section 1503 of the EPACT because the Notice of Removal identified a colorable
federal defense of preemption under the Clean Air Act. ECF 346 at 21–33.8
As noted, TPRI, LPA, and PJSC have each moved to dismiss the Complaint for lack of
personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2). ECF 333 (TPRI); ECF 342 (LPA); ECF
343 (PJSC). Sixty-two defendants, including TPRI, LPA, and PJSC, have moved for dismissal for
failure to state a claim, pursuant to Fed. R. Civ. P. 12(b)(6). See ECF 335 (Joint Motion). And, a
few defendants have presented additional arguments for dismissal. See ECF 334 (Duke Energy,
Warren, Guttman Energy, TPRI Supplemental Motion to Dismiss); ECF 336 (7-Eleven Joinder
and Supplemental Motion to Dismiss); ECF 338 (Hartree Joinder); ECF 342 (LPA Motion to
Pursuant to Fed. R. Civ. P. 5.1(a), the State also filed a Notice of Constitutional Question
(ECF 284), which was served on the Attorney General of the United States. Id. at 2. On July 13,
2018, the United States filed a Motion to Intervene for the Limited Purpose of Supporting the
Constitutionality of Section 1503 of the Energy Policy Act. ECF 320 (“Motion to Intervene”). In
a Memorandum (ECF 322) and Order (ECF 323) of July 30, 2018, I granted the government’s
Motion to Intervene.
Section 1503 of EPACT provides:
Claims and legal actions filed after the date of enactment of this Act related to
allegations involving actual or threatened contamination of [MTBE] may be
removed to the appropriate United States district court.
I begin by addressing the motions to dismiss for lack of personal jurisdiction. Then, I will
turn to the remaining motions.
Motions to Dismiss for Lack of Personal Jurisdiction
Defendants TPRI, LPA, and PJSC have each moved to dismiss the Complaint for lack of
personal jurisdiction, pursuant to Fed. R. Civ. P. 12(b)(2). ECF 333 (TPRI); ECF 342 (LPA); ECF
343 (PJSC). “[A] Rule 12(b)(2) challenge raises an issue for the court to resolve, generally as a
preliminary matter.” Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016). Under Rule
12(b)(2), the burden is “on the plaintiff ultimately to prove the existence of a ground for
jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.
1989); see Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014); Carefirst
of Md., Inc. v. Carefirst Pregnancy Ctr’s, Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citing Mylan
Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 59–60 (4th Cir. 1993)).
When the existence of jurisdiction “turns on disputed factual questions the court may
resolve the [jurisdictional] challenge on the basis of a separate evidentiary hearing, or may defer
ruling pending receipt at trial of evidence relevant to the jurisdictional question.” Combs, 886 F.2d
at 676. In its discretion, a court may permit discovery as to the jurisdictional issue. See Mylan
Labs, 2 F.3d at 64. Or, the court may rule solely on the basis of motion papers, supporting legal
memoranda, affidavits, and the allegations in the complaint. Grayson, 816 F.3d at 268; Consulting
Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009). In that circumstance, the
“plaintiff need only make ‘a prima facie showing of personal jurisdiction to survive the
jurisdictional challenge.’” Grayson, 816 F.3d at 268 (quoting Combs, 886 F.2d at 676); see also
Universal Leather, 773 F.3d at 558, 560–61. However, “‘[a] threshold prima facie finding that
personal jurisdiction is proper does not finally settle the issue; plaintiff must eventually prove the
existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial
evidentiary hearing.’” New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290,
294 n.5 (4th Cir. 2005) (emphasis in original) (citation omitted); see Universal Leather, 773 F.3d
at 558; Combs, 886 F.2d at 676.
“In deciding whether the plaintiff has made the requisite showing, the court must take all
disputed facts and reasonable inferences in favor of the plaintiff.” Carefirst of Md., 334 F.3d at
396. But, the court is “not required to look solely to the plaintiff’s proof in drawing those
inferences.” Mylan Labs, 2 F.3d at 62.
The State alleges that defendants are “MTBE and MTBE gasoline manufacturers,
marketers and distributors” that “together controlled all, or substantially all, of the market in
Maryland for MTBE and MTBE gasoline” at all relevant times. ECF 2, ¶ 26; see also id. ¶ 125
(“In or around January 1995, defendants introduced into the stream of commerce in Maryland
MTBE gasoline …”). As outlined, some of the defendants contend that this Court lacks personal
jurisdiction as to them.
Fed. R. Civ. P. 4(k)(1)(A) authorizes a federal district court to exercise personal jurisdiction
over a defendant in accordance with the law of the state in which the district court is located.
Carefirst of Md., 334 F.3d at 396. Therefore, in Maryland, “to assert personal jurisdiction over a
nonresident defendant, two conditions must be satisfied: (1) the exercise of jurisdiction must be
authorized under the state’s long-arm statute; and (2) the exercise of jurisdiction must comport
with the due process requirements of the Fourteenth Amendment.” Id.; accord Carbone v.
Deutsche Bank Nat’l Tr. Co., No. RDB-15-1963, 2016 WL 4158354, at *5 (D. Md. Aug. 5, 2016);
Mackey v. Compass Mktg., Inc., 391 Md. 117, 141 n.6, 892 A.2d 479, 493 n.6 (2006).
Maryland’s long-arm statute is codified at Md. Code (2013 Repl. Vol., 2019 Supp.), § 6103(b) of the Courts & Judicial Proceedings Article (“C.J.”). It authorizes “personal jurisdiction
over a person, who directly or by an agent,” id.:
(1) Transacts any business or performs any character of work or service in the State;
(2) Contracts to supply goods, food, services, or manufactured products in the
(3) Causes tortious injury in the State by an act or omission in the State;
(4) Causes tortious injury in the State or outside of the State by an act or omission
outside the State if he regularly does or solicits business, engages in any other
persistent course of conduct in the State or derives substantial revenue from
goods, food, services, or manufactured products used or consumed in the State;
(5) Has an interest in, uses, or possesses real property in the State; or
(6) Contracts to insure or act as surety for, or on, any person, property, risk,
contract, obligation, or agreement located, executed, or to be performed within
the State at the time the contract is made, unless the parties otherwise provide
When interpreting the reach of Maryland’s long-arm statute, a federal district court is
bound by the interpretations of the Maryland Court of Appeals. See Carbone, 2016 WL 4158354,
at *5; Snyder v. Hampton Indus., Inc., 521 F. Supp. 130, 135–36 (D. Md. 1981), aff'd, 758 F.2d
649 (4th Cir. 1985); see also Mylan Labs, 2 F.3d at 61. The Maryland Court of Appeals has
“consistently held that the reach of the long arm statute is coextensive with the limits of personal
jurisdiction delineated under the due process clause of the Federal Constitution” and that the
“statutory inquiry merges with [the] constitutional examination.” Beyond Sys., Inc. v. Realtime
Gaming Holding Co., 388 Md. 1, 22, 878 A.2d 567, 580 (2005) (citing Mohamed v. Michael, 279
Md. 653, 657, 370 A.2d 551, 553 (1977)); see also Stover v. O'Connell Assocs., Inc., 84 F.3d 132,
135–36 (4th Cir. 1996) (stating that “the two inquiries essentially become one”); accord ALS Scan,
Inc. v. Dig. Serv. Consultants, Inc., 293 F.3d 707, 710 (4th Cir. 2002).
To be sure, “the reach of the [long-arm] statute is as far as due process permits . . .” Mackey,
391 Md. at 140 n.5, 892 A.2d at 492 n.5. However, the Maryland Court of Appeals has clarified
that the statutory analysis remains a requirement of the personal jurisdiction analysis. In Mackey,
the Maryland Court of Appeals said, 391 Md. at 141 n.6, 892 A.2d at 493 n.6 (citations omitted):
We stated recently in Beyond v. Realtime . . . that “the purview of the long arm
statute is coextensive with the limits of personal jurisdiction set by the due process
clause of the Federal Constitution.” We did not, of course, mean by this that it is
now permissible to simply dispense with analysis under the long-arm statute . . .
Rather, . . . we interpret the long-arm statute to the limits permitted by the Due
Process Clause when we can do so consistently with the canons of statutory
Since Mackey, the Maryland Court of Appeals has repeatedly affirmed that “determining
whether a Maryland court may exercise personal jurisdiction over a foreign defendant requires a
two-step analysis.” Bond v. Messerman, 391 Md. 706, 721, 895 A.2d 990, 999 (2006); see also
CSR, Ltd. v. Taylor, 411 Md. 457, 472, 983 A.2d 492, 501 (2009) (stating that personal jurisdiction
analysis “entails dual considerations”). First, the court considers “whether the requirements of
Maryland’s long-arm statute[ ] are satisfied.” CSR, 411 Md. at 472, 983 A.2d at 501 (citing Bond,
391 Md. at 721, 895 A.2d at 999; Mackey, 391 Md. at 129, 892 A.2d at 486; and Beyond, 388 Md.
at 14, 878 A.2d at 576). Second, it considers “whether the exercise of personal jurisdiction
comports with the requirements imposed by the Due Process Clause of the Fourteenth
Amendment.[ ]” CSR, 411 Md. at 473, 983 A.2d at 501 (citing Bond, 391 Md. at 721, 895 A.2d at
999; and Beyond, 388 Md. at 15, 878 A.2d at 575). Nevertheless, the Maryland Court of Appeals
has, in some situations, declined to consider the first step where the analysis of the second step
demonstrates conclusively that personal jurisdiction over the defendant would violate due process.
See, e.g., Bond, 391 Md. at 722, 895 A.2d at 1000.
Due process jurisprudence recognizes “two types of personal jurisdiction: general and
specific.” CFA Inst. v. Inst. of Chartered Fin. Analysts of India, 551 F.3d 285, 292 n.15 (4th Cir.
2009). The Fourth Circuit has explained:
General personal jurisdiction, on the one hand, requires “continuous and
systematic” contacts with the forum state, such that a defendant may be sued in that
state for any reason, regardless of where the relevant conduct occurred. Specific
personal jurisdiction, on the other hand, requires only that the relevant conduct have
such a connection with the forum state that it is fair for the defendant to defend
itself in that state.
Id. (citing, inter alia, Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414–15
(1984)) (internal citations omitted).
A court may exercise general jurisdiction over foreign corporations to hear “any and all
claims” against the corporations “when their affiliations with the State are so ‘continuous and
systematic’ as to render them essentially at home in the forum State.” Goodyear Dunlop Tires
Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quoting Int’l Shoe Co. v. Washington, 326
U.S. 310, 314 (1945)). In contrast, specific jurisdiction “depends on an ‘affiliatio[n] between the
forum and the underlying controversy . . .’” Id. (citation omitted) (alteration in Goodyear).
The United States Supreme Court has long held that personal jurisdiction over a
nonresident defendant is constitutionally permissible so long as the defendant has “minimum
contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional
notions of fair play and substantial justice.’” Int'l Shoe Co., 326 U.S. at 316 (quoting Milliken v.
Meyer, 311 U.S. 457, 463 (1940)). Courts have separated this test into individual “prongs,” first
ascertaining whether the threshold of “minimum contacts” is met, and then considering whether
the exercise of jurisdiction on the basis of those contacts is “constitutionally reasonable.” ALS
Scan, 293 F.3d at 712.
The “minimum contacts” test is met where the defendant has “purposefully avail[ed]
himself of the privilege of conducting business under the laws of the forum state.” Consulting
Eng'rs, 561 F.3d at 278. A determination that the defendant has established minimum contacts
with the forum state amounts to a conclusion that “‘it is presumptively not unreasonable to require
him to submit to the burdens of litigation in that forum as well.’” Id. (quoting Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 476 (1985)).
Generally, the court must consider the prong of constitutional reasonableness “[i]f, and
only if” the minimum contacts test is met. Consulting Eng'rs, 561 F.3d at 278. The constitutional
reasonableness inquiry permits a defendant “who purposefully has directed his activities at forum
residents” to defeat jurisdiction, if he can “present a compelling case that the presence of some
other considerations would render jurisdiction unconstitutional.” Burger King, 471 U.S. at 477.
However, in some cases, the constitutional reasonableness analysis can “serve to establish the
reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise
be required.” Id.
As indicated, general jurisdiction allows a plaintiff to bring “any and all claims” against a
party in that jurisdiction. Goodyear, 564 U.S. at 919. But, “the threshold level of minimum
contacts sufficient to confer general jurisdiction is significantly higher than for specific
jurisdiction.” ALS Scan, 293 F.3d at 715 (internal quotation marks omitted); accord Saudi v.
Northrop Grumman Corp., 427 F.3d 271, 276 (4th Cir. 2005). And, the Fourth Circuit has long
held that “broad constructions of general jurisdiction” are “generally disfavored.” Nichols v. G.D.
Searle & Co., 991 F.2d 1195, 1200 (4th Cir. 1993).
To determine whether there is specific jurisdiction over a defendant, courts consider several
factors. These include: “(1) the extent to which the defendant purposefully availed itself of the
privilege of conducting activities in the State; (2) whether the plaintiffs' claims arise out of those
activities directed at the State; and (3) whether the exercise of personal jurisdiction would be
constitutionally reasonable.” Consulting Eng'rs, 561 F.3d at 278 (citing ALS Scan, 293 F.3d at
715); accord Unspam Techs., Inc. v. Chernuk, 716 F.3d 322, 328 (4th Cir. 2013); ESAB Grp., Inc.
v. Zurich Ins. PLC, 685 F.3d 376, 392 (4th Cir. 2012); Carefirst of Md., 334 F.3d at 397.
TPRI argues that it is not properly subject either to general or specific personal jurisdiction
in this Court because it has never manufactured, marketed, distributed, or sold MTBE gasoline in
Maryland. ECF 333-1 at 1–5. Indeed, it asserts “there is no evidence indicating that a drop of
TPRI gasoline containing MTBE is actually in Maryland, let alone evidence that TPRI specifically
directed gasoline containing MTBE to the State.” Id. at 5.
The Complaint contains minimal allegations specific to TPRI. It states only that TPRI is a
Delaware corporation with its principal place of business in Texas, that TPRI is qualified to do
business in Maryland, and that TPRI has a resident agent in Maryland. ECF 2, ¶ 85. However,
the exhibits submitted by the State and TPRI shed further light on TPRI’s role in the MTBE supply
The exhibits show the following. TPRI is a Delaware corporation that refines and
manufactures gasoline. ECF 333-2 (Kim Arterburn Decl.), ¶ 2. It does not have any facilities in
Maryland and has never manufactured, sold, or contracted for the delivery of MTBE products in
Maryland. Id. ¶¶ 2, 11. However, TPRI availed itself of a distribution system for MTBE products
whose network included Maryland. That is, TPRI sold and shipped approximately 1.5 million
barrels of its MTBE gasoline to third parties via the Colonial Pipeline, a pipeline system that is
dedicated to the delivery of gasoline to Maryland, Delaware, New Jersey, Pennsylvania, and New
York. ECF 357-2 (Bruce Burke Decl.), ¶¶ 16, 27; see also ECF 333-2, ¶ 9. Because most of the
MTBE gasoline shipped on the Colonial Pipeline was fungible and commingled with the products
of other suppliers, it is impossible to determine where TPRI’s MTBE gasoline was delivered. ECF
357-2, ¶¶ 22–23. However, the State’s expert, Bruce Burke, reviewed TPRI’s shipment data and
the number of delivery points on the Colonial Pipeline in Maryland, and posits that 83.7 percent
of the MTBE gasoline that TPRI shipped on the Colonial Pipeline can be tied to distribution centers
that supplied MTBE gasoline to the State. Id. ¶ 27.
TPRI’s participation in the MTBE supply chain does not end there. It also sold over three
million barrels of MTBE gasoline from a facility in New Jersey during the relevant time. ECF
357-2, ¶ 30; ECF 333-3 (Craig Watel Decl.), ¶ 3. More than half of this gasoline was shipped to
third parties, including Shell Oil and Mobil Oil, via barge. ECF 357-2, ¶ 30; ECF 333-3 at 4–13.
And, records show that Maryland received barge shipments of gasoline from New Jersey during
this time. ECF 357-2, ¶ 31. Finally, along with its manufacture and sale of MTBE gasoline, TPRI
also sold neat MTBE to numerous nationwide distributors of gasoline, many of which supply
gasoline to Maryland. Id. ¶ 29.
Viewing the facts and allegations in the light most favorable to Maryland, the State has
made a prima facie showing that this Court has personal jurisdiction over TPRI under Maryland’s
long-arm statute. In relevant part, that statute permits the exercise of personal jurisdiction over
one who “[c]auses tortious injury in the State or outside of the State by an act or omission outside
the State if he regularly does or solicits business, engages in any other persistent course of conduct
in the State or derives substantial revenue from goods, food, services, or manufactured products
used or consumed in the State.” C.J. § 6–103(b)(4). The exhibits demonstrate that TPRI
deliberately participated in the regional distribution of MTBE gasoline and that such conduct
plausibly resulted in the regular introduction of TPRI’s products into Maryland. These acts and
omissions allegedly caused the State’s tortious injury—i.e., the contamination of its waters.
Accordingly, personal jurisdiction is proper under C.J. § 6–103(b)(4).
In addition, the State has made a prima facie showing that personal jurisdiction over TPRI
comports with due process. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980),
the Supreme Court stated, id. at 297:
[I]f the sale of a product of a manufacturer or distributor . . . is not simply an isolated
occurrence, but arises from the efforts of the manufacturer or distributor to serve
directly or indirectly, the market for its product in other States, it is not
unreasonable to subject it to suit in one of those States if its allegedly defective
merchandise has there been the source of injury to its owner or to others.
This is precisely the conduct that is plausibly shown here. TPRI sold and shipped large
volumes of its MTBE gasoline to third parties via a pipeline dedicated to the delivery of gasoline
to Maryland and the surrounding four states. ECF 357-2, ¶¶ 16, 27. It also sold neat MTBE to
nationwide distributors—some of whom are also defendants in this case—whose networks
included Maryland. Id. ¶ 29. Although the fungible nature of MTBE gasoline and the complex
gasoline supply chain make it impossible to say where exactly TPRI’s MTBE gasoline ended up,
TPRI’s placement of its MTBE gasoline into the stream of commerce plausibly resulted in the
regular and anticipated—rather than the random or fortuitous—introduction of its products in
Maryland. This constitutes purposeful availment. See In re MTBE, 399 F. Supp. 2d 325, 332
(S.D.N.Y. 2005) (finding defendant purposefully availed itself of the privilege of doing business
in the forum states by selling large volumes of MTBE-containing gasoline to a nationwide
distributor); see also Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 179 (5th Cir. 2013) (finding
personal jurisdiction over nonresident defendant who sold 203 forklifts to customers in the forum
state through a national distributor, consisting of approximately 1.55% of defendant’s sales during
that period); Hart v. Bed Bath & Beyond, Inc., 48 F. Supp. 3d 837, 843 (D. Md. 2014) (finding
personal jurisdiction over nonresident manufacturer who sold its “fuel gel” to national retailer with
stores in Maryland and retailer in fact sold 1,992 bottles of the gel in Maryland). Cf. J. McIntyre
Mach. Ltd. v. Nicastro, 564 U.S. 873, 885–86 (2011) (Breyer, J., concurring) (finding no personal
jurisdiction over a British company that directed marketing and sales efforts at the United States
through a distributor, but whose only contact with the forum state was the sale of one of its
machines to a resident of that state); see also Hart, 48 F. Supp. 3d at 842 (noting that Justice
Breyer’s concurrence in J. McIntyre is controlling).
Indeed, courts in MTBE cases brought in other states have found personal jurisdiction over
TPRI based on the kind of conduct shown here. See Rhode Island v. Atl. Richfield Co. (Rhode
Island MTBE), 357 F. Supp. 3d 129, 146–47 (D.R.I. 2018) (finding that jurisdiction over TPRI
was proper in Rhode Island where state alleged that TPRI introduced MTBE “into the sequence of
pipelines and storage tanks dedicated to the delivery of gasoline to Rhode Island”); State v. Atl.
Richfield Co. (Vermont MTBE), 142 A.3d 215, 224 (Vt. 2016) (finding plaintiff plausibly alleged
that TPRI was subject to personal jurisdiction in Vermont based on its supply of MTBE gasoline
to the nationwide distribution system).
Moreover, the State’s claims arise out of TPRI’s contacts with Maryland, as required for
specific personal jurisdiction. See Goodyear, 564 U.S. at 919. The State brings this suit for the
tortious manufacture, marketing, sale, and distribution of MTBE that caused the contamination of
its waters, and TPRI’s contacts with Maryland arise from its manufacture and nationwide
distribution of MTBE products.
Finally, the exercise of specific personal jurisdiction over TPRI is constitutionally
reasonable. TPRI is a national corporation and has not shown that it would bear any unique burden
litigating this case in Maryland; it says only that it has no presence here and is defending similar
litigation in other states. ECF 333-1 at 17. By contrast, the State has a strong interest in trying its
case against TPRI in Maryland, alongside the other alleged tortfeasors, and where evidence
concerning its MTBE contamination will be located.
Accordingly, I shall deny TPRI’s motion to dismiss for lack of personal jurisdiction.
LPA & PJSC
Defendants LPA and PJSC9 are corporate affiliates, and both move to dismiss the
Complaint for lack of personal jurisdiction. ECF 342 (LPA); ECF 343 (PJSC); see also ECF 140
(Disclosure of Corporate Interest Statement of Feb. 22, 2018 filed by LPA stating that it is an
indirect, wholly owned subsidiary of PJSC). They argue that they are not properly subject to this
Court’s personal jurisdiction because they never sold or delivered MTBE gasoline in Maryland,
nor do they have any presence in Maryland. ECF 342-1 at 1; ECF 343-1 at 1–2.
The State argues that LPA and PJSC have waived their right to challenge personal
jurisdiction. ECF 365 at 9–11; ECF 367 at 16–17. It points out that LPA and PJSC did not file
their motions to dismiss for lack of personal jurisdiction until October 5, 2018, weeks after they
joined in the submission of the motion to dismiss for failure to state a claim, filed by sixty-two
defendants on September 13, 2018. See ECF 335-1. Because that initial motion to dismiss did not
raise the defense of personal jurisdiction, the State argues that LPA and PJSC have waived this
During the time relevant to this litigation, PJSC Lukoil was known by its former name,
“OAO Lukoil.” ECF 139 at 1 n.1. However, for clarity, I shall refer to the entity as PJSC.
A defendant may waive the defense of personal jurisdiction by failing to timely raise it in
the time prescribed by Fed. R. Civ. P. 12. Rule 12(g)(2) provides that “a party that makes a motion
under [Rule 12] must not make another motion under this rule raising a defense or objection that
was available to the party but omitted from its earlier motion.” Rule 12(h)(1)(A) further clarifies
that a “party waives any defense listed in Rule 12(b)(2)–(5) [including defense of lack of personal
jurisdiction] by . . . omitting it from a motion in the circumstances described in Rule 12(g).”
It is true, as the State asserts, that LPA and PJSC filed their motions to dismiss for lack of
personal jurisdiction after the submission of the joint motion to dismiss for failure to state a claim
filed by them and sixty other defendants. However, two days before the joint motion was filed,
the defendants submitted a proposed briefing schedule to the Court. ECF 331 (Letter to Court of
Sept. 11, 2018). That letter stated that LPA and PJSC “will join in the consolidated motion to
dismiss,” which was due on September 13, 2018, and that “they will also file a separate motion to
dismiss based on individualized defenses, to be due on September 27, 2018.” Id. at 3–4. Further,
it provided that the State consented to the briefing schedule. Id. at 4.10
Accordingly, the State was aware of the intention of LPA and PJSC to raise individualized
defenses before the defendants submitted the joint motion to dismiss on September 13, 2018. In
light of this advance notice to the State, and particularly because of the early stage of this litigation,
as well as the size and complexity of the case, I conclude that LPA and PJSC did not waive the
defense of personal jurisdiction by failing to raise it in the joint motion filed by them and sixty
other defendants. See Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 60–61 (2d Cir. 1999) (observing
On September 26, 2018, LPA and PJSC filed a request for an extension of time to file
their motions until October 5, 2018. ECF 339. This Court granted their request that same day.
that in determining whether waiver or forfeiture of objections to personal jurisdiction has occurred,
“we consider all of the relevant circumstances”).
The State argues that the motions of LPA and PJSC should nonetheless be denied because
they are properly subject to specific personal jurisdiction in this Court. ECF 365 at 13; ECF 367
at 22. I address each motion in turn.
LPA argues that this Court lacks personal jurisdiction because the Complaint is devoid of
“a single allegation against [it].” ECF 342-1 at 3. Further, it asserts that it is a “trading entity”
that “simply has nothing to do with the MTBE dispute.” Id. at 5.
In fact, the Complaint contains few allegations specific to LPA. It alleges only that LPA
is a Delaware corporation, is qualified to do business in Maryland, has a resident agent in
Maryland, and is “a successor in interest to relevant assets of GPMI.” ECF 2, ¶ 62. However, the
Complaint alleges that defendants together “represent substantially all of the Maryland market for
MTBE gasoline.” Id. ¶ 98. And, the evidence submitted by the State and LPA shows the
following: LPA is a “trading company whose core business is buying and selling crude oil and
petroleum products such as . . . gasoline, and gasoline components.” ECF 342-2 (Simon Fenner
Decl.), ¶ 4; ECF 365-1 (Bruce Burke Decl.), ¶ 27. It “essentially acts as a middleman.” ECF 3422, ¶ 5. LPA never bought, sold, blended, or delivered MTBE products in Maryland. ECF 387-1
(Simon Fenner Supp. Decl.), ¶¶ 2–6. In 2003 and 2004, however, LPA sold large volumes of
MTBE gasoline to several national and regional distributors, including BP, Chevron, Hess, Shell,
and Valero. ECF 365-1, ¶¶ 28–29. Most of these transactions involved delivery of gasoline to the
Colonial Pipeline, which is dedicated to the supply of gasoline to Maryland, Delaware, New
Jersey, Pennsylvania, and New York. Id. ¶¶ 28, 30. Based on this information, the State’s expert
concluded that LPA supplied MTBE gasoline to Maryland during the relevant period. Id. ¶ 30.
This evidence plausibly demonstrates that LPA’s contacts with Maryland are similar to
those of TPRI. That is, LPA sold and shipped MTBE gasoline to national and regional distributors
via the Colonial Pipeline, a pipeline system dedicated to the supply of gasoline in Maryland and
the surrounding four states. For similar reasons, therefore, the State has made a prima facie
showing that LPA is properly subject to this Court’s specific personal jurisdiction. See supra,
Section II.B.1. In particular, personal jurisdiction is permitted under Maryland’s long-arm statute,
which authorizes personal jurisdiction over any person who “[c]auses tortious injury in the State
or outside of the State by an act or omission outside the State if he regularly does or solicits
business, engages in any other persistent course of conduct in the State or derives substantial
revenue from goods, food, services, or manufactured products used or consumed in the State.”
C.J. § 6–103(b)(4).
The exercise of specific personal jurisdiction over LPA also comports with due process.
LPA sold and delivered MTBE gasoline to large distributors along the Colonial Pipeline. This
conduct shows purposeful availment. See Vermont MTBE, 142 A.3d at 225 (finding specific
personal jurisdiction over defendant who supplied MTBE gasoline to distribution system whose
network included the forum state); In re MTBE, 399 F. Supp. 2d at 332 (stating that defendant “is
subject to personal jurisdiction in each of the forum states because it supplies MTBE-containing
gasoline to the national market.”). The State’s claims arise out of LPA’s contacts with Maryland,
as required for specific personal jurisdiction. See Goodyear, 564 U.S. at 919. And, LPA has not
shown that this Court’s exercise of specific personal jurisdiction over it would be unreasonable.
Accordingly, I shall deny LPA’s motion to dismiss the Complaint for lack of personal
PJSC contends that this Court lacks personal jurisdiction over it because it is a Russian
holding company that has never been directly involved in the supply chain for MTBE gasoline in
the United States. ECF 343-1 at 2–3. The State argues, however, that PJSC is properly subject to
specific personal jurisdiction in this Court based on its own activities and the activities of its
indirect subsidiary, GPMI. ECF 367 at 2–3.
The exhibits submitted by the State and PJSC show the following. PJSC is a Russian
company that has hundreds of subsidiaries. ECF 343-2 (Anatoly Martynov Decl.), ¶¶ 7–8. It owns
100 percent of Lukoil Americas Corporation (“LAC”), which in turn owned 100 percent of GPMI,
a Maryland corporation, from 2000 to 2011. Id. ¶¶ 5, 14; ECF 367-2 at 67–74 (Merger Agreement
of Nov. 2, 2000); see also ECF 367-3 at 72 (stating that “Getty is a wholly-owned subsidiary of
[LAC], which is in turn owned by [PJSC], Russia’s largest vertically integrated oil company.”).
PJSC served as a guarantor for GPMI on multiple contracts, including: (1) a multi-year gasoline
supply agreement between GPMI and BP North America, another Maryland corporation, ECF
367-2 at 93–98 (Guaranty Agreement of Oct. 2, 2000); (2) GPMI’s lease agreement for hundreds
of gas stations, including stations in Maryland, id. at 158–77 (Guaranty Agreement of Nov. 2,
2000); and (3) a $475 million loan GPMI obtained in 2005, ECF 367-3 at 70, 86–112 (Guaranty
Agreement of Sept. 19, 2005). PJSC made significant other capital contributions to GPMI. ECF
367-3 at 76 (“Furthermore, to date [PJSC] has made over $50 million in capital contributions to
GPMI] and plans for additional contributions going forward.”); ECF 2, ¶ 272.
PJSC also entered into a licensing agreement with GPMI to use the Lukoil brand
throughout the United States, and funded a campaign for the rebranding of GPMI’s gas stations.
ECF 367-3 at 56–67 (License Agreement of Aug. 21, 2003); ECF 367-3 at 74 (Confidential
Memorandum sent by PJSC and GPMI in Aug. 2005 re $475 million loan, stating: “The rebranding
will be supported by a significant marketing and advertising campaign (approximately $10MM
per year) to be funded by [PJSC], which should increase brand awareness as a tier one brand and
position Lukoil gasoline as a non-Middle Eastern gasoline alternative.”). And, when GPMI
became unprofitable, PJSC allegedly orchestrated and carried out a scheme to transfer all of
GPMI’s profitable assets to another subsidiary and drive GPMI into bankruptcy. ECF 367 at 12–
16; ECF 2, ¶¶ 287–91.
Notably, however, the declaration submitted by PJSC states that PJSC has never
manufactured, distributed, sold, or purchased MTBE in the United States (ECF 343-2, ¶ 12); never
sold gasoline in the United States, including gasoline containing MTBE (id. ¶ 11); never owned or
operated a refinery, a petroleum product terminal, or service station in the United States (id. ¶ 10);
has no employees and conducts no operations in the United States (id. ¶ 13); maintained its own
books and records (id. ¶ 20); and never controlled the day-to-day operations of GPMI, including
its budgeting, marketing, operating, personnel, or sales. Id. ¶ 22.
As a threshold matter, I conclude that the State has not made a prima facie showing that
PJSC is subject to specific personal jurisdiction in this Court based on its own conduct. It has not
shown that PJSC purposefully availed itself of doing business in Maryland in any way, apart from
its role as the indirect corporate parent of GPMI, a Maryland corporation. That alone is not enough.
See Debt Relief Network, Inc. v. Fewster, 367 F. Supp. 2d 827, 830 (D. Md. 2005) (“… it is also
true that ‘a foreign parent corporation is not subject to the jurisdiction of a forum state merely
because its subsidiary is present or doing business there’”) (quoting Alpine View Co. v. Atlas Copco
AB, 205 F.3d 208, 218 (5th Cir. 2000)); see also Vitro Elec. v. Milgray Elec., Inc., 255 Md. 498,
502, 258 A.2d 749, 751 (1969) (“[A] forum corporation is not construed as doing business within
a state merely because of its ownership of all of the shares of stock of another corporation doing
business in the state.”). Moreover, PJSC’s contacts with Maryland as the indirect corporate parent
of GPMI—serving as a guarantor on GPMI’s major contracts and providing capital to GPMI—do
not provide the basis for this suit. See Saudi, 427 F.3d at 276.
Therefore, the question is whether PJSC is subject to personal jurisdiction in this Court
because of the activities of its subsidiary, GPMI. It is well settled that “[a] corporation exists as a
legal entity separate and distinct from its corporate shareholders.” Cancun Adventure Tours, Inc.
v. Underwater Designer Co., 862 F.2d 1044, 1047 (4th Cir. 1988); see United States v. Bestfoods,
524 U.S. 51, 61 (1998) (“It is a general principle of corporate law deeply ‘ingrained in our
economic and legal systems' that a parent corporation . . . is not liable for the acts of its
subsidiaries.”) (citation omitted). Thus, “it is generally the case that the contacts of a corporate
subsidiary cannot impute jurisdiction to its parent entity.” Saudi, 427 F.3d at 276.
However, the Fourth Circuit has observed: “‘[F]ederal courts have consistently
acknowledged that it is compatible with due process for a court to exercise personal jurisdiction
over an individual . . . that would not ordinarily be subject to personal jurisdiction in that court
when the individual . . . is an alter ego . . . of a corporation that would be subject to personal
jurisdiction in that court.’” Newport News Holdings Corp. v. Virtual City Vision, Inc., 650 F.3d
423, 433 (4th Cir. 2011) (quoting Patin v. Thoroughbred Power Boats Inc., 294 F.3d 640, 653
n.18 (5th Cir. 2002)) (alterations in original). So, “[t]o assert jurisdiction over a parent company
based on the conduct of a subsidiary, the court must find circumstances warranting it to pierce the
corporate veil.” Newman v. Motorola, Inc., 125 F. Supp. 2d 717, 722–23 (D. Md. 2000). The law
of the forum state determines whether the corporate veil should be pierced to exercise personal
jurisdiction over a nonresident defendant. Burns & Russell Co. v. Oldcastle, Inc., 198 F. Supp. 2d
687, 697 (D. Md. 2002).
Notably, “Maryland generally is more restrictive than other jurisdictions in allowing a
plaintiff to pierce the corporate veil.” Harte–Hanks Direct Mktg./Balt., Inc. v. Varilease Tech.
Fin. Grp., 299 F. Supp. 2d 505, 514 (D. Md. 2004) (citing Residential Warranty Corp. v. Bancroft
Homes Greenspring Valley, Inc., 126 Md. App. 294, 728 A.2d 783, 790–91 (1999)). The
Maryland Court of Appeals has adopted the so called “agency” test in deciding whether to pierce
the veil separating parent corporations from their subsidiaries for jurisdictional purposes. Mylan
Labs, 2 F.3d at 61 (citing Vitro Elec., 255 Md. at 501–03, 258 A.2d at 751–52); Haley Paint Co.
v. E.I. Dupont De Nemours & Co., 775 F. Supp. 2d 790, 797 (D. Md. 2011). Under the agency
test, the court may attribute the actions of a subsidiary corporation to the parent corporation only
if the parent exerts considerable control over the activities of the subsidiary. Mylan Labs, 2 F.3d
at 61 (citing Cannon Mfg. Co. v. Cudahy Packing Co., 267 U.S. 333, 335–38 (1925)); see Fin. Co.
of Am. v. Bank of Am. Corp., 493 F. Supp. 895, 903–08 (D. Md. 1980). The central inquiry is
“whether significant decisions of the subsidiary must be approved by the parent.” Mylan Labs, 2
F.3d at 61.
Courts consider various factors in determining whether the requisite level of control exists,
such as “whether the parent and subsidiary maintain separate books and records, employ separate
accounting procedures, and hold separate directors' meetings.” Id. In addition, courts consider
“the level of interdependence between parent and subsidiary.” Id. (citing Harris v. Arlen Props.,
Inc., 256 Md. 185, 200, 260 A.2d 22, 29 (1969)). “Finally, the court must find that [the parent]
knew, or should have known, that its conduct would have some impact in Maryland.” Mylan Labs,
2 F.3d at 61–62.
The exhibits demonstrate that PJSC exercised some control over GPMI. PJSC contributed
capital to GPMI, served as a guarantor on GPMI’s major contracts, oversaw GPMI’s budget, and
shared its brand name with GPMI. But, the exhibits also show that PJSC and GPMI existed largely
as separate entities; they maintained their own books and records, had their own boards of
directors, and did not comingle their accounts. ECF 343-2, ¶¶ 18, 20. Moreover, in the declaration
submitted by PJSC in support of its motion, its corporate representative asserts that PJSC never
exercised control over the day-to-day operations of GPMI. Id. ¶ 22.
On these facts, the State has not sustained its burden of showing that PJSC exerted a degree
of control over GPMI greater than that of a typical parent company and, thus, that GPMI’s contacts
with Maryland may be imputed to PJSC for jurisdictional purposes. See Haley Paint Co. v. E.I.
Dupont de Nemours & Co., No. RDB-10-0318, 2012 WL 1145027, at *4 (D. Md. Apr. 3, 2012)
(finding insufficient control where evidence showed that parent company was required to “approve
the most significant contracts entered into by [the subsidiary]” but that subsidiary had significant
autonomy in its day-to-day operations); Newman, 125 F. Supp. 2d at 723 (declining to pierce the
corporate veil where the parent and subsidiary used consolidated financial statements and the
parent had to approve major decisions of the subsidiary because the subsidiary was a separate
corporate entity with its own financial records and there was no allegation that subsidiary was
merely a sham company); see also Call Carl, Inc. v. BP Oil Corp., 391 F. Supp. 367, 371 (D. Md.
1975) (“Notwithstanding the fact that the parent may own all of a subsidiary's stock, and
interlocking directorships may exist between the two corporations, it is axiomatic that if a
subsidiary maintains its own books and accounts, and makes its own marketing, purchasing,
management and other policy decisions, it cannot be held to be acting as an agent of the parent.”).
Viewing the facts in the light most favorable to the State, I conclude that the State has not
made a prima facie case for personal jurisdiction over PJSC. The record is devoid of facts from
which sufficient minimum contacts with Maryland may be reasonably inferred. And, the exercise
of personal jurisdiction over PJSC, a foreign corporation, would impose a significant burden upon
it. See Asahi Metal Indus. Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102, 115 (1987)
(“The unique burdens placed upon one who must defend oneself in a foreign legal system should
have significant weight in assessing the reasonableness of stretching the long arm of personal
jurisdiction over national borders.”).
In these circumstances, subjecting PJSC to personal
jurisdiction in this Court would “offend ‘traditional notions of fair play and substantial justice.’”
Int'l Shoe, 326 U.S. at 316 (quoting Milliken, 311 U.S. at 463).
As an alternative to granting PJSC’s motion, the State asks the Court for the opportunity
to conduct limited jurisdictional discovery. ECF 367 at 30–31. Specifically, the State argues that
jurisdictional discovery “into [PJSC]’s own contacts with Maryland, as well as its role in managing
GPMI, would resolve any uncertainty about [PJSC]’s involvement in GPMI’s blending and sale
of MTBE gasoline in Maryland.” Id. at 31.
“Discovery under the Federal Rules of Civil Procedure is broad in scope and freely
permitted.” Mylan Labs, 2 F.3d at 64. However, district courts “‘have broad discretion in [their]
resolution of discovery problems that arise in cases pending before [them].’” Carefirst of Md.,
334 F.3d at 402 (quoting Mylan Labs, 2 F.3d at 64) (alterations in Mylan Labs). In some cases,
where the record suggests some indicia of personal jurisdiction, limited jurisdictional discovery
may be warranted to ascertain more facts. See, e.g., Combs, 886 F.2d at 676–77 (defendants’
solicitations to investors in the forum state were sufficient to establish a prima facie case for
jurisdiction); Androutsos v. Fairfax Hosp., 323 Md. 634, 649–50, 594 A.2d 574 (1991)
(defendant's advertisement directed at forum state was indicia of personal jurisdiction). But,
“[w]hen a plaintiff offers only speculation or conclusory assertions about contacts with a forum
state, a court is within its discretion in denying jurisdictional discovery.” Carefirst of Md., 334
F.3d at 402–03 (citing McLaughlin v. McPhail, 707 F.2d 800, 806 (4th Cir. 1983) (concluding that
district court did not abuse its discretion in denying jurisdictional discovery when, “[a]gainst the
defendants' affidavits,” plaintiff “offered nothing beyond his bare allegations that the defendants
had had significant contacts with the [forum] state of Maryland”)).
Indeed, the Fourth Circuit has said that, “where a plaintiff's claim of personal jurisdiction
appears to be both attenuated and based on bare allegations in the face of specific denials made by
defendants, the court need not permit even limited discovery confined to issues of personal
jurisdiction should it conclude that such discovery will be a fishing expedition.” Carefirst of Md.,
334 F.3d at 403 (citation omitted); see Unspam Tech., Inc. v. Chernuk, 716 F.3d 322, 330 n.1 (4th
Cir. 2013) (suggesting that the court did not abuse its discretion in denying jurisdictional discovery
based on conclusory allegations of personal jurisdiction); ALS Scan, 293 F.3d at 716 n.3
(upholding district court's refusal to allow plaintiff to engage in jurisdictional discovery where
plaintiff's request was based on “conclusory assertions”).
In my view, jurisdictional discovery is not warranted here. The record lacks any plausible
indicia that PJSC had minimum contacts with Maryland or exerted so much control over its
subsidiary, GPMI, such that GPMI’s contacts may be imputed to PJSC. The State has not pointed
to facts that contradict PJSC’s declaration, (ECF 343-2), outlined earlier, nor has it suggested any
reason to question its accuracy. Although this Court “must take all disputed facts and reasonable
inferences in favor of the plaintiff,” Carefirst of Md., 334 F.3d at 396, it is “not required to look
solely to the plaintiff’s proof in drawing those inferences,” Mylan Labs, 2 F.3d at 62.
Accordingly, I will deny the State’s request for jurisdictional discovery as an alternative to
ruling on the issue of personal jurisdiction over PJSC. And, I shall grant PJSC’s motion to dismiss
for lack of personal jurisdiction.
Motions to Dismiss for Failure to State a Claim
As noted, sixty-two defendants filed a joint motion to dismiss the Complaint for failure to
state a claim under Rule 12(b)(6). ECF 335. Several defendants also filed supplemental motions
to dismiss. See ECF 334 (Duke Energy, Warren, Guttman Energy, TPRI); ECF 336 (7-Eleven);
ECF 338 (Hartree); ECF 342 (LPA).
A defendant may test the legal sufficiency of a complaint by way of a motion to dismiss
under Rule 12(b)(6). In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty.
Servs. Bd., 822 F.3d 159, 165–66 (4th Cir. 2016); McBurney v. Cuccinelli, 616 F.3d 393, 408 (4th
Cir. 2010), aff’d sub nom., McBurney v. Young, 569 U.S. 221 (2013); Edwards v. City of
Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). A Rule 12(b)(6) motion constitutes an assertion by
a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of
law “to state a claim upon which relief can be granted.”
Whether a complaint states a claim for relief is assessed by reference to the pleading
requirements of Fed. R. Civ. P. 8(a)(2). That rule provides that a complaint must contain a “short
and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the
rule is to provide the defendants with “fair notice” of the claims and the “grounds” for entitlement
to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–56 (2007).
To survive a motion under Fed. R. Civ. P. 12(b)(6), a complaint must contain facts
sufficient to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see
Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (citation omitted) (“Our decision in Twombly
expounded the pleading standard for ‘all civil actions’. . .”); see also Willner v. Dimon, 849 F.3d
93, 112 (4th Cir. 2017). But, a plaintiff need not include “detailed factual allegations” in order to
satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Moreover, federal pleading rules “do not
countenance dismissal of a complaint for imperfect statement of the legal theory supporting the
claim asserted.” Johnson v. City of Shelby, Miss., 574 U.S. 10, 135 S. Ct. 346, 346–47 (2014) (per
In other words, the rule demands more than bald accusations or mere speculation.
Twombly, 550 U.S. at 555; see Painter’s Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir.
2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation
of the elements of a cause of action,” it is insufficient. Twombly, 550 U.S. at 555. Rather, to
satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual
matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of
those facts is improbable and . . . recovery is very remote and unlikely.” Id. at 556 (internal
quotation marks omitted).
In reviewing a Rule 12(b)(6) motion, a court “must accept as true all of the factual
allegations contained in the complaint” and must “draw all reasonable inferences [from those facts]
in favor of the plaintiff.” E.I. du Pont de Nemours, 637 F.3d at 440 (citations omitted); see
Semenova v. MTA, 845 F.3d 564, 567 (4th Cir. 2017); Houck v. Substitute Tr. Servs., Inc., 791
F.3d 473, 484 (4th Cir. 2015); Kendall v. Balcerzak, 650 F.3d 515, 522 (4th Cir. 2011), cert.
denied, 565 U.S. 943 (2011). But, a court is not required to accept legal conclusions drawn from
the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). “A court decides whether [the
pleading] standard is met by separating the legal conclusions from the factual allegations,
assuming the truth of only the factual allegations, and then determining whether those allegations
allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A
Society Without a Name v. Virginia, 655 F.3d 342, 346 (4th. Cir. 2011), cert. denied, 566 U.S. 937
Courts ordinarily do not “‘resolve contests surrounding the facts, the merits of a claim, or
the applicability of defenses’” through a Rule 12(b)(6) motion. Edwards, 178 F.3d at 243 (quoting
Republican Party v. Martin, 980 F.2d 943, 952 (4th Cir. 1992)). However, “in the relatively rare
circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint,
the defense may be reached by a motion to dismiss filed under Rule 12(b)(6).” Goodman v.
Praxair, Inc., 494 F.3d 458, 464 (4th Cir. 2007) (en banc); accord Pressley v. Tupperware Long
Term Disability Plan, 553 F.3d 334, 336 (4th Cir. 2009). Because Rule 12(b)(6) “is intended
[only] to test the legal adequacy of the complaint,” Richmond, Fredericksburg & Potomac R.R.
Co. v. Forst, 4 F.3d 244, 250 (4th Cir. 1993), “[t]his principle only applies . . . if all facts necessary
to the affirmative defense ‘clearly appear[ ] on the face of the complaint.’” Goodman, 494 F.3d at
464 (quoting Forst, 4 F.3d at 250) (emphasis added in Goodman).
“Generally, when a defendant moves to dismiss a complaint under Rule 12(b)(6), courts
are limited to considering the sufficiency of allegations set forth in the complaint and the
‘documents attached or incorporated into the complaint.’” Zak v. Chelsea Therapeutics Int'l, Ltd.,
780 F.3d 597, 606 (4th Cir. 2015) (quoting E.I. du Pont de Nemours, 637 F.3d at 448). The court
“may not consider any documents that are outside of the complaint, or not expressly incorporated
therein . . .” Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013); see Bosiger
v. U.S. Airways, 510 F.3d 442, 450 (4th Cir. 2007). But, in limited circumstances, when resolving
a Rule 12(b)(6) motion, a court may consider documents beyond the complaint without converting
the motion to dismiss to one for summary judgment. Goldfarb v. Mayor & City Council of Balt.,
791 F.3d 500, 508 (4th Cir. 2015).
In particular, a court may properly consider documents that are “explicitly incorporated
into the complaint by reference and those attached to the complaint as exhibits.” Goines, 822 F.3d
at 166 (citation omitted); see also Six v. Generations Fed. Credit Union, 891 F.3d 508, 512 (4th
Cir. 2018); Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195, 198 (4th Cir. 2014); U.S. ex rel.
Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014); Am.
Chiropractic Ass’n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004), cert. denied, 543
U.S. 979 (2004); Phillips v. LCI Int’l Inc., 190 F.3d 609, 618 (4th Cir. 1999). However, “before
treating the contents of an attached or incorporated document as true, the district court should
consider the nature of the document and why the plaintiff attached it.” Goines, 822 F.3d at 167
(citing N. Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163 F.3d 449, 455 (7th Cir.
A court may also “consider a document submitted by the movant that [is] not attached to
or expressly incorporated in a complaint, so long as the document was integral to the complaint
and there is no dispute about the document’s authenticity.” Goines, 822 F.3d at 166 (citations
omitted); see also Woods v. City of Greensboro, 855 F.3d 639, 642 (4th Cir. 2017), cert. denied,
138 S. Ct. 558 (2017); Oberg, 745 F.3d at 136; Kensington Volunteer Fire Dep’t. v. Montgomery
County, 684 F.3d 462, 467 (4th Cir. 2012). To be “integral,” a document must be one “that by its
‘very existence, and not the mere information it contains, gives rise to the legal rights asserted.’”
Chesapeake Bay Found., Inc. v. Severstal Sparrows Point, LLC, 794 F. Supp. 2d 602, 611 (D. Md.
2011) (citation omitted) (emphasis in original). See also Fed. R. Civ. P. 10(c) (“A copy of a written
instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”).
In addition, “a court may properly take judicial notice of ‘matters of public record’ and
other information that, under Federal Rule of Evidence 201, constitute ‘adjudicative facts.’”
Goldfarb, 791 F.3d at 508; see also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308,
322 (2007); Katyle v. Penn Nat’l Gaming, Inc., 637 F.3d 462, 466 (4th Cir. 2011), cert. denied,
565 U.S. 825 (2011); Philips v. Pitt Cty. Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009). But,
under Fed. R. Evid. 201, a court may take judicial notice of adjudicative facts only if they are “not
subject to reasonable dispute,” in that they are “(1) generally known within the territorial
jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources
whose accuracy cannot reasonably be questioned.”
Choice of Law
The parties assume without discussion that Maryland law applies here. The case was
removed to federal court pursuant to Section 1503 of the EPACT and Article III’s “arising under”
jurisdiction because the defendants raised a colorable federal defense of conflict preemption under
the CAA. ECF 1; ECF 347 (Order Denying Motion to Remand of Oct. 24, 2018). However, the
State asserts claims founded only on Maryland law. ECF 2. Accordingly, this Court applies the
choice of law principles of Maryland, the forum state. See Erie R.R. v. Tompkins, 304 U.S. 64, 78
(1938); Colgan Air, Inc. v. Raytheon Aircraft Co., 507 F.3d 270, 275 (4th Cir. 2007); Walker v.
Nat’l R.R. Passenger Corp., 703 F. Supp. 2d 495, 501 (D. Md. 2010); see also In re MTBE, No.
SAS-14-6228, 2015 WL 1500181, at *2–3 (S.D.N.Y. Mar. 30, 2015) (holding that state substantive
law applied in case for MTBE contamination that was removed to federal court pursuant to Section
1503 of the EPACT).
Under Maryland’s choice-of-law principles, tort claims are governed by the law of the state
where the alleged harm occurred (“lex loci delicto”). See, e.g., Lewis v. Waletzky, 422 Md. 647,
657, 31 A.3d 123, 129 (2011); Proctor v. Wash. Metro. Area Transit Auth., 412 Md. 691, 726, 990
A.2d 1048, 1068 (2010). In this case, the alleged harms occurred in Maryland. See ECF 2, ¶¶ 3,
213–24. Accordingly, Maryland law applies to the State’s common law tort claims in Counts IVI of the Complaint. And, of course, Maryland law also governs the State’s claims in Counts VIIXI under Maryland’s Environment Article.
I first address the arguments raised in the defendants’ Joint Motion. I will then consider
the supplemental motions.
The first six counts of the Complaint allege common law tort claims under theories of both
strict liability and negligence: strict product liability based on defective design (Count I); strict
product liability based on failure to warn (Count II); strict liability for abnormally dangerous
activity (Count III); public nuisance (Count IV); trespass (Count V); and negligence (Count VI).
Defendants argue that all of these claims must be dismissed because the State fails to plead
causation. ECF 335-2 at 4–7. Specifically, defendants assert that the State admits it cannot prove
traditional causation because it alleges in the Complaint that “MTBE gasoline is a fungible product
and lacks traits that would make it possible to identify the product as being manufactured,
distributed, or sold by a particular defendant.” Id. at 4–5 (quoting ECF 2, ¶ 99). And, because
Maryland courts have rejected alternative theories of liability, defendants argue that the State’s
tort claims should be dismissed for failure to plead this necessary element. Id. at 6–7.
Proximate cause is a necessary element in actions for negligence and strict liability. Ford
Motor Co. v. Gen. Accident Ins. Co., 365 Md. 321, 335, 779 A.2d 362, 369–70 (2001) (identifying
the three “product litigation basics” as defect, attribution of defect to seller, and a causal
relationship between the defect and the injury) (citing Harrison v. Bill Cairns Pontiac, 77 Md.
App. 41, 50, 549 A.2d 385, 390 (1988)); Arbogast v. A.W. Chesterton Co., 197 F. Supp. 3d 807,
811 (D. Md. 2016); Pittway Corp. v. Collins, 409 Md. 218, 255 n.17, 973 A.2d 771, 793 n.17
(2009) (noting that proximate cause is a necessary element of product liability claims based on
theories of both strict liability and negligence). A defendant’s conduct is the proximate cause of a
plaintiff’s injury when it is “1) a cause in fact, and 2) a legally cognizable cause.” Pittway, 409
Md. at 243, 973 A.2d at 786; see Copsey v. Park, 453 Md. 141, 164, 160 A.3d 623, 636 (2017).
The Maryland Court of Appeals has explained, Pittway, 409 Md. at 243–44, 973 A.2d at
In other words, before liability may be imposed upon an actor, we require a certain
relationship between the defendant's conduct and the plaintiff's injuries. The first
step in the analysis to define that relationship is an examination of causation-in-fact
to determine who or what caused an action. The second step is a legal analysis to
determine who should pay for the harmful consequences of such an action.
The causation-in-fact inquiry asks “‘whether defendant’s conduct actually produced an
injury.’” Id. at 244, 973 A.2d at 786 (quoting Peterson v. Underwood, 258 Md. 9, 16–17, 264
A.2d 851, 855 (1970)). Maryland courts have developed two tests to determine whether the
requisite causation exists: the “but-for test” and the “substantial factor” test. Id.
Under the but-for test, the requisite causation exists when the injury would not have
occurred but for the defendant’s conduct. Pittway, 409 Md. at 244, 973 A.2d at 786–87 (citing
Peterson, 258 Md. at 16, 264 A.2d at 855). The but for test applies in cases where only one
negligent act is at issue. Id. at 244, 973 A.2d at 786.
The Maryland Court of Appeals has also adopted the substantial factor set forth in the
Restatement (Second) of Torts (1965) (“Restatement”). Pittway, 409 Md. at 244, 973 A.2d at 787
(citing Eagle-Picher Indus., Inc. v. Balbos, 326 Md. 179, 208–09, 604 A.2d 445, 459 (1992)).
Under the substantial factor test, the requisite causation may be found if it is “‘more likely than
not’” that the defendant’s conduct was a substantial factor in producing the plaintiff’s injuries.
Copsey, 453 Md. at 164, 160 A.3d at 636 (quoting Pittway, 409 Md. at 244, 973 A.2d at 787);
accord Balbos, 326 Md. at 209, 604 A.2d at 459. This test applies when two or more independent
acts bring about an injury. Pittway, 409 Md. at 244, 973 A.2d at 787.
In determining whether the requisite connection exists under the substantial factor test, the
following considerations are relevant:
(a) the number of other factors which contribute in producing the harm and the
extent of the effect which they have in producing it;
(b) whether the actor's conduct has created a force or series of forces which are in
continuous and active operation up to the time of the harm, or has created a situation
harmless unless acted upon by other forces of which the actor is not responsible;
(c) lapse of time.
Pittway, 409 Md. at 245, 973 A.2d at 787 (quoting Restatement, § 433).
If causation in fact is established under the appropriate test, the proximate cause analysis
turns to whether the defendant’s conduct was the legal cause of the plaintiff’s injuries. Copsey,
453 Md. at 165, 160 A.3d at 637; Pittway, 409 Md. at 245, 973 A.2d at 787. This analysis focuses
on foreseeability; the court asks whether the “actual harm to a litigant falls within a general field
of danger that the actor should have anticipated or expected.” Pittway, 409 Md. at 245, 973 A.2d
The parties’ dispute centers on the traditional requirement that, in product liability cases,
the plaintiff must “link the defendant to the product” to establish causation. Scapa Dryer Fabrics,
Inc. v. Saville, 418 Md. 496, 510, 16 A.3d 159, 167 (2011); see Reiter v. Pneumo Abex, LLC, 417
Md. 57, 69, 8 A.3d 725, 732 (2010); see also Lohrmann v. Pittsburgh Corning Corp., 782 F.2d
1156, 1162–63 (4th Cir. 1986) (“To support a reasonable inference of substantial causation from
circumstantial evidence, there must be evidence of exposure to a specific product on a regular basis
over some extended period of time in proximity to where the plaintiff actually worked.”); Lee v.
Baxter Healthcare Corp., 721 F. Supp. 89, 93 (D. Md. 1989) (“Maryland courts apply traditional
products liability law which requires the plaintiff to prove that the defendant manufactured the
product which allegedly caused the injury.”); W. Page Keeton, Prosser & Keeton on the Law of
Torts § 103 at 713 (5th ed. 1984) (“It is quite clear that an essential element of the plaintiff’s case
has been the identification of the named defendant as the manufacturer or supplier of the defective
The State’s Complaint does not satisfy this element. It alleges that MTBE “lacks traits that
would make it possible to identify the product as being manufactured, distributed, or sold by a
particular defendant.” ECF 2, ¶ 99. Therefore, defendants argue that the State’s common law tort
claims should be dismissed for failure to plausibly allege causation. ECF 335-2 at 4–5.
The State retorts that it adequately pleads causation under both traditional and alternative
theories. ECF 359 at 4. First, as to traditional causation, the State argues that it plausibly alleges
The defense of superseding cause “arises primarily when ‘unusual’ and ‘extraordinary’
independent intervening acts occur that could not have been anticipated by the original
tortfeasor.’” Pittway, 409 Md. at 249, 973 A.2d at 789 (citation omitted).
that each defendant that contributed MTBE or MTBE gasoline to the commingled product that
polluted its waters was a substantial factor in producing the injury. Id. at 4–5. And, the State says
that it can “use market share evidence (as well as other evidence) to estimate what percentage of
the leaked MTBE was manufactured or supplied by each defendant.” Id. Second, the State
contends that Maryland courts would endorse at least two of the alternative liability theories
pleaded in its Complaint—market share liability and commingled product liability—as an
alternative to the product identification requirement. Id. at 8.
Thus, the Court must determine whether the product identification requirement for
causation bars recovery where, as here, the State alleges that its injury was caused by the
commingled, fungible MTBE gasoline of several defendants. To my knowledge, however,
Maryland courts have never addressed this question.
The role of a federal court when considering an issue of state law is to “interpret the law
as it believes that state’s highest court of appeals would rule.” Abadian v. Lee, 117 F. Supp. 2d
481, 485 (D. Md. 2000) (citing Liberty Mut. Ins. Co. v. Triangle Indus., Inc., 957 F.2d 1153, 1156
(4th Cir.), cert. denied, 506 U.S. 824 (1992)); accord Private Mortg. Inv. Servs., Inc. v. Hotel &
Club Assocs., Inc., 296 F.3d 308, 312 (4th Cir. 2002) (stating that federal court’s task in
considering an issue of state law is to “predict how [the state’s highest] court would rule if
presented with the issue”). Therefore, this Court must predict how the Maryland Court of Appeals
would rule if presented with the issue. Twin City Fire Ins. Co. v. Ben Arnold-Sunbelt Beverage
Co. of S.C., 433 F.3d 365, 369 (4th Cir. 2005) (stating that federal court's task in considering an
issue of state law is to “‘predict how [the state's highest] court would rule if presented with the
issue’”) (quoting Private Mortg. Inv. Servs., Inc. v. Hotel & Club Assocs., Inc., 296 F.3d 308, 312
(4th Cir. 2002)); accord Abadian v. Lee, 117 F. Supp. 2d 481, 485 (D. Md. 2000) (citing Liberty
Mut. Ins. Co. v. Triangle Indus., Inc., 957 F.2d 1153, 1156 (4th Cir. 1992), cert. denied, 506 U.S.
I reject at the outset the State’s argument that it plausibly alleges causation under the
substantial factor test. As noted, the substantial factor is used when two or more independent acts
bring about a single injury. Pittway, 409 Md. at 244, 973 A.2d at 787. Fatal to the State’s
argument, however, is that a cause must be sufficient before it can be substantial. See Balbos, 326
Md. at 208, 604 A.2d at 459 (stating that “‘[i]f two causes concur to bring about an event, and
either one of them, operating alone, would have been sufficient to cause the identical result,’ some
test of proximate causation, other than ‘but-for’ is needed”) (quoting Prosser & Keeton, supra, §
41 at 266); see also Restatement, § 432(2) (“If . . . each [force] of itself is sufficient to bring about
harm to another, the actor's negligence may be found to be a substantial contributing factor.”);
Asphalt & Concrete Servs., Inc. v. Perry, 221 Md. App. 235, 261, 108 A.3d 558, 574 (2015) (“The
‘substantial factor’ test appears when ‘two independent causes concur to bring about an injury, and
Under the Maryland Uniform Certification of Questions of Law Act, Md. Code (2013
Repl. Vol., 2019 Supp.), C.J. § 12–601 et seq., this Court may certify a question of law to the
Maryland Court of Appeals “if the answer may be determinative of an issue in pending litigation
in the certifying court and there is no controlling [Maryland] appellate decision, constitutional
provision, or statute. . .” See C.J. § 12-603. Certification “ensur[es] the correct legal outcome,
aid[s] in judicial economy, and manifest[s] proper respect for federalism.” Sartin v. Macik, 535
F.3d 284, 291 n.6 (4th Cir. 2008).
When deciding whether certification of a question of law is appropriate, a federal court
must undertake a two-part inquiry. First, the court must consider whether the answer “‘may be
determinative of an issue in pending litigation.’” Antonio v. SSA Sec., Inc., 749 F.3d 227, 234 (4th
Cir. 2014) (quoting C.J. § 12-603)). Second, it must “evaluate whether [the question may be
answered] based on a ‘controlling appellate decision, constitutional provision, or statute of
[Maryland].’” Antonio, 749 F.3d at 234 (second alteration in original) (quoting C.J. § 12-603).
No request for certification has been made by any party in this case. In my view,
certification is not necessary in order to resolve the issue. I am reasonably satisfied that I am able
to anticipate the way in which the Maryland Court of Appeals would rule.
either cause, standing alone, would have wrought the identical harm.’”) (quoting Yonce v.
SmithKline Beecham Clinical Lab, 111 Md. App. 124, 138, 680 A.2d 569 (1996)).
Here, the State alleges that defendants are collectively responsible for the MTBE gasoline
that was released into its waters, resulting in widespread contamination. ECF 2, ¶¶ 1, 220. But,
the State does not allege that any single defendant’s conduct was sufficient to cause its injury.
Accordingly, it fails to plausibly allege causation under the substantial factor test.
I turn to consider whether, as the State argues, Maryland courts would allow it to proceed
under the market share and/or commingled product theories of liability where product
identification is necessary for relief. ECF 359 at 8. I begin by outlining those theories.
The theory of market share liability was fashioned by the California Supreme Court in
Sindell v. Abbott Labs, 607 P.2d 924 (Cal. 1980). There, the plaintiff was injured as a result of her
mother’s ingestion of diethylstilbesterol (“DES”) during pregnancy. Id. at 925. Because the
plaintiff was unable to identify the manufacturer of the precise product that caused her injuries,
she filed suit against several manufacturers of DES. Id. at 925–26. The court found that the
defendants, taken together, constituted 90% of the DES market during the relevant period, and that
they knew or should have known that DES was a carcinogenic substance but failed to warn the
public of its potential danger. Id. at 937. Recognizing that “advances in science and technology
create fungible goods which may harm consumers and which cannot be traced to any specific
producer,” the Sindell Court shifted the burden to defendants to disprove causation. Id. at 936–37.
It determined that if the defendants were unable to show that they did not manufacture the injurycausing product, and the plaintiff was able to prove the rest of her case, they would be liable for
any judgment against them according to their share of the DES market at the time of injury. Id. at
Thus, under the market share theory, the burden to disprove causation shifts to the
defendants if they represent a “substantial share” of the relevant product market and the plaintiff
establishes a prima facie case on the other elements of her claim. Sindell, 607 P.2d at 936–37.
Liability is then apportioned among those defendants unable to disprove causation based on their
respective shares of the market for the injury-causing product.
Wallace & Gale Asbestos
Settlement Tr. v. Busch, 464 Md. 474, 211 A.3d 166 (2019).
The theory of commingled product liability was developed by the court in In re MTBE, 379
F. Supp. 2d 348 (S.D.N.Y. 2005), specifically for MTBE cases. In a consolidated, multi-district
litigation case assigned to former Judge Shira A. Scheindlin, she described the theory as follows,
id. at 377–78:
When a plaintiff can prove that certain gaseous or liquid products (e.g., gasoline,
liquid propane, alcohol) of many suppliers were present in a completely
commingled or blended state at the time and place that the risk of harm occurred,
and the commingled product caused a single indivisible injury, then each of the
products should be deemed to have caused the harm . . . Because the petroleum
products were commingled to form a new mixture, each of the ten refiners
contributed to the injury in proportion to the amount of product that each supplied.
Under this theory, each refiner actually caused the injury. Thus, if a defendant's
indistinct product was present in the area of contamination and was commingled
with the products of other suppliers, all of the suppliers can be held liable for any
harm arising from an incident of contamination.
In other words, when a commingled product causes a single, indivisible injury, “each of
the . . . refiners contributed to the injury in proportion to the amount of the product that each
supplied.” Id. at 378. Thus, each should be held proportionately liable. Id.
Under the commingled product theory, the plaintiff bears the burden of proving that each
defendant actually contributed to the harm. Id. This requires a showing that the product of each
supplier-defendant is known to be present in the commingled product. Id. at 378–79. If such a
showing is made, damages are “apportioned by proof of a defendant's share of the market at the
time a risk of harm was created to a class of potential victims.” Id. at 378.
Maryland courts have rejected market share liability in asbestos cases. See Wallace &
Gale, 464 Md. at 489-91, 211 A.3d at 1174–76 (noting that Maryland rejects market share liability
in asbestos cases); Reiter, 417 Md. at 65, 8 A.3d at 730 (stating that, in asbestos cases, marketshare liability “is not recognized under Maryland law”). But, to my knowledge, Maryland’s
appellate courts have never considered the commingled product theory.
In In re MTBE, 379 F. Supp. 2d 348, Judge Scheindlin was assigned the difficult task of
predicting whether the tort law of fifteen different states would recognize alternative theories of
causation in cases alleging MTBE contamination. Some of those states, like Maryland, had not
adopted alternative theories of liability to address the product identification requirement for
causation in product liability cases. See id. at 379 (Connecticut); id. at 394 (Indiana); id. at 403
(Kansas); id. at 413 (New Hampshire); id. at 420 (New Jersey); id. at 437 (Pennsylvania); id. at
439 (Vermont, Virginia, and West Virginia). Judge Sheindlin conducted a thorough analysis of
each state’s tort law and concluded that all of them would apply either the commingled product or
market share theories of liability where product identification was necessary for relief. Id. at 382
(Connecticut); id. at 396–97 (Indiana); id. at 405 (Kansas); id. at 416 (New Hampshire); id. at 421
(New Jersey); id. at 437 (Pennsylvania); id. at 440 (Vermont, Virginia, and West Virginia).
Accordingly, she denied the defendants’ motions to dismiss the claims asserted by plaintiffs in
each of those states for failure to adequately plead causation.
Other courts have also found that plaintiffs in MTBE cases may prove causation using an
alternative approach. See Rhode Island MTBE, 357 F. Supp. 3d at 141 (concluding that MTBE
defendants had the burden of apportioning harm on plaintiff’s tort claims); State v. Exxon Mobil
Corp. (New Hampshire MTBE), 126 A.3d 266, 297–98 (N.H. 2015) (finding that the trial court
properly allowed the jury to determine that defendant could be held liable for its percentage of the
supply market of MTBE gasoline, noting that “the State faced an impossible burden of proving
which of several MTBE gasoline producers caused New Hampshire’s groundwater
The Restatement (Second) of Torts—on which Maryland’s appellate courts frequently
rely—similarly endorses a modification of traditional causation principles under the circumstances
presented here. Specifically, the Restatement provides: “Where the tortious conduct of two or
more actors has combined to bring about harm to the plaintiff, and one or more of the actors seeks
to limit his liability on the ground that the harm is capable of apportionment among them, the
burden of proof as to the apportionment is upon each such actor.” Id. § 433B(2). The comments
explain that the paradigmatic case is “the pollution of a stream by a number of factories which
discharge impurities into it.” Id. cmt. c.
Further, the Restatement provides, § 433B(2) cmt. d:
The reason for the exceptional rule placing the burden of proof as to apportionment
upon the defendant or defendants is the injustice of allowing a proved wrongdoer
who has in fact caused harm to the plaintiff to escape liability merely because the
harm which he has inflicted has combined with similar harm inflicted by other
wrongdoers, and the nature of the harm itself has made it necessary that evidence
be produced before it can be apportioned. In such a case the defendant may justly
be required to assume the burden of producing that evidence, or if he is not able to
do so, of bearing the full responsibility. As between the proved tortfeasor who has
clearly caused some harm, and the entirely innocent plaintiff, any hardship due to
lack of evidence as to the extent of the harm caused should fall upon the former.
The Maryland Court of Appeals has said that “‘the common law is not static; its life and
heart is its dynamism—its ability to keep pace with the world while constantly searching for just
and fair solutions to pressing societal problems.’” Kelley v. R.G. Indus., Inc., 304 Md. 124, 140,
497 A.2d 1143, 1150 (1985) (quoting Harrison v. Mont. Cty. Bd. of Educ., 295 Md. 442, 460, 456
A.2d 894 (1983)). The court has demonstrated a tendency to fashion the common law to allow
plaintiffs to pursue recovery when the facts and circumstances of their actions presented obstacles
to relief. See Phipps v. Gen. Motors Corp., 278 Md. 337, 352–53, 363 A.2d 955, 963 (1976)
(adopting the theory of strict liability outlined in the Restatement, reasoning that “there is no reason
why a party injured by a defective and unreasonably dangerous product, which when placed on
the market is impliedly represented as safe, should bear the loss of that injury when the seller of
that product is in a better position to take precautions and protect against the defect”); see also
Boblitz v. Boblitz, 296 Md. 242, 273, 462 A.2d 506, 521 (1983) (abrogating the rule of interspousal
immunity in negligence cases because it is “unsound in the circumstances of modern life”); Harris
v. Jones, 281 Md. 560, 566, 380 A.2d 611, 614 (1977) (adopting the tort of intentional infliction
of emotional distress). The Court has also said that the question of proximate cause is “to be
decided in a common sense fashion in the light of the attending facts and circumstances. . .” Jubb
v. Ford, 221 Md. 507, 513, 157 A.2d 422, 425 (1960); see Medina v. Meilhammer, 62 Md. App.
239, 247, 489 A.2d 35, 39 (1985) (“The court should not indulge in refinements and subtleties as
to causation which would defeat the ends of justice.”) (citations omitted).
This case presents a compelling case for modification of the traditional product
identification requirement. The State alleges that MTBE has caused widespread contamination of
its waters; that MTBE gasoline is a fungible product; that MTBE gasoline is routinely commingled
between different manufacturers and suppliers; and that defendants together controlled
substantially all of the market for MTBE gasoline in Maryland. ECF 2, ¶¶ 98–102. 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
I am satisfied that, rather than support the rigid application of traditional causation
principles, Maryland courts would endorse the application of an alternative theory of liability in
this case where product identification is a necessary element for relief. Therefore, I conclude that
Maryland courts would allow the State to proceed on its claims under the commingled product
theory, which is “closer to traditional causation than market share liability.” In re MTBE, 591 F.
Supp. 2d 259, 268 (S.D.N.Y. 2008). However, it applies only when: (1) the product of each
defendant is present in the commingled product, and; (2) the commingled product caused the
plaintiff’s harm. In re MTBE, 379 F. Supp. 2d at 378–79. The application of this theory ensures
fairness in apportioning liability and would provide compensation to innocent parties for the
alleged contamination of their water supply.
Accordingly, the State’s failure to link particular defendants to particular releases of MTBE
gasoline into its waters does not mandate dismissal of its tort claims at this time.
Of course, this theory will be inapplicable if traditional proof of causation is possible after
discovery. At this stage, however, the State may rely on this theory to survive dismissal.
Design Defect (Count I)
Count I of the Complaint alleges strict liability based on defective design. ECF 2, ¶¶ 308–
21. Defendants argue that this claim must be dismissed because the State fails to allege that MTBE
gasoline was defective as a consumer product. ECF 335-2 at 12.
Maryland has adopted the theory of strict liability for product liability, as set forth in the
Restatement (Second) of Torts, § 402A. Phipps, 278 Md. at 352, 363 A.2d at 963; see May v. Air
& Liquid Sys. Corp., 446 Md. 1, 23, 129 A.3d 984, 997 (2015). Section 402A provides, in pertinent
(1) One who sells any product in a defective condition unreasonably dangerous to
the user or consumer or to his property is subject to liability for physical harm
thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial
change in the condition in which it is sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his
(b) the user or consumer has not bought the product from or entered into any
contractual relation with the seller.
The “theory of strict liability is not a radical departure from traditional tort concepts.”
Phipps, 278 Md. at 351, 363 A.2d at 963. However, notwithstanding the terminology of the
doctrine, “the seller is not an insurer, as absolute liability is not imposed on the seller for any injury
resulting from the use of his product.” Id. Rather, “[p]roof of a defect in the product at the time
it leaves the control of the seller implies fault on the part of the seller . . . for injuries caused by the
product.” Id. Moreover, under § 402A, defenses are still available to the seller, such as “where
injury results from abnormal handling or use of the product. . . .” Id. at 346, 363 A.2d at 960.
Nevertheless, the Phipps Court observed that “there are those kinds of conditions which,
whether caused by design or manufacture, can never be said to involve a reasonable risk.” Id. at
345, 363 A.2d at 959. Therefore, the court expressly “adopt[ed] ‘the theory of strict liability as
expressed in Section 402A of the Restatement (Second) of Torts,” and as referred to today as the
“consumer expectation” test. Id. at 353, 363 A.2d at 963. It reasoned: “In our view, there is no
reason why a party injured by a defective and unreasonably dangerous product, which when placed
on the market is impliedly represented as safe, should bear the loss of that injury when the seller
of the product is in a better position to take precautions and protect against the defect.” Id. at 352–
53, 363 A.2d at 963.
A plaintiff must establish the following elements to prevail in an action for strict product
liability in Maryland: “(1) the product was in defective condition at the time that it left the
possession or control of the seller, (2) that it was unreasonably dangerous to the user or consumer,
(3) that the defect was a cause of the injuries, and (4) that the product was expected to and did
reach the consumer without substantial change in its condition.” Phipps, 278 Md. at 344, 363 A.2d
at 958 (citing Restatement, § 402A); see Parker v. Allentown, Inc., 891 F. Supp. 2d 773, 791 (D.
Md. 2012). An action for strict liability focuses “not on the conduct of the manufacturer but rather
on the product itself.” Phipps, 278 Md. at 344, 363 A.2d at 958.
“A product defect may arise from the design of the product, a deficiency in its manufacture,
or from the absence or inadequacy of instructions or warnings as to its safe and appropriate use.”
Shreve v. Sears, Roebuck & Co., 166 F. Supp. 2d 378, 407 (D. Md. 2001) (citing Simpson v.
Standard Container Co., 72 Md. App. 199, 203, 527 A.2d 1337, 1339–40 (1987)); see Phipps, 278
Md. at 345, 363 A.2d at 960; Kelley, 304 Md. at 135, 497 A.2d at 1148; Owens–Illinois, Inc. v.
Zenobia, 325 Md. 420, 601 A.2d 633, 639 (1992). In Nissan Motor Co. v. Nave, 129 Md. App.
90, 740 A.2d 102 (1999), the Maryland Court of Special Appeals explained, id. at 118, 740 A.2d
at 117 (citations omitted):
There are three situations in which a product is in a “defective condition”: (1) there
is a flaw in the product at the time of sale making it more dangerous than intended;
(2) the manufacturer of the product fails to warn adequately of a risk or hazard
related to the way the product was designed; or (3) the product has a defective
Maryland courts apply either the consumer expectation test or the risk-utility test to
determine whether a product is “defective and unreasonably dangerous, for strict liability
purposes.” Halliday v. Sturm, Ruger & Co., 368 Md. 186, 193, 792 A.2d 1145, 1150 (2002); see
Kelley, 304 Md. at 135–36, 497 A.2d at 1148–49; Grinage v. Mylan Pharm., Inc., 840 F. Supp. 2d
862, 870 (D. Md. 2011). The consumer expectation test is derived from § 402A of the Restatement.
See Halliday, 368 Md. at 193, 792 A.2d at 1150. Under that test, a “defective condition” is defined
as a “‘condition not contemplated by the ultimate consumer, which will be unreasonably dangerous
to him.’” Id. (quoting Restatement, § 402A cmt. g). And, a product is “unreasonably dangerous”
if it is “‘dangerous to an extent beyond that which would be contemplated by the ordinary
consumer who purchases it with the ordinary knowledge common to the community as to its
characteristics.’” Id. (quoting Restatement, § 402A cmt. i); see also Prosser & Keeton, supra,
§ 99 at 698.
Under the risk-utility test, a product is defective and unreasonably dangerous “if the danger
presented by the product outweighs its utility.” Halliday, 368 Md. at 194, 792 A.2d at 1150; see
Lloyd v. General Motors Corp., 275 F.R.D. 224, 226 (D. Md. 2011). Application of this test
involves the consideration of several factors: “‘(1) the usefulness and desirability of the product,
(2) the availability of other and safer products to meet the same need, (3) the likelihood of injury
and its probable seriousness, (4) the obviousness of the danger, (5) common knowledge and normal
public expectation of the danger (particularly for established products), (6) the avoidability of
injury by care in use of the product and (7) the ability to eliminate danger without seriously
impairing the usefulness of the product.’” Singleton v. Int'l Harvester Co., 685 F.2d 112, 115 (4th
Cir. 1981) (quoting Phipps, 278 Md. at 345 n.4, 363 A.2d at 959 n.4); see also Parker, 891 F.
Supp. 2d at 791; Lloyd v. General Motors Corp., 266 F.R.D. 98, 108 (D. Md. 2010).
Where the risk-utility test is applied, “the issue usually becomes whether a safer alternative
design was feasible. . .” Halliday, 368 Md. at 194, 792 A.2d at 1150. However, the Maryland
Court of Appeals has said that the risk-utility test applies only when the product “malfunctions in
some way.” Id. at 200, 792 A.2d at 1153; see Kelley, 304 Md. at 138, 497 A.2d at 1149 (stating
that the risk-utility test is “only applied when something goes wrong with a product”); Parker, 891
F. Supp. 2d at 791 (“The risk/utility test applies ‘when something goes wrong with the product,’
such as here, where the rack tipped over.”) (quoting Halliday, 368 Md. at 197, 792 A.2d at 1152);
Grinage, 840 F. Supp. 2d at 870.
Indeed, the Halliday Court said, 368 Md. at 209, 792 A.2d at 1153: “Given the controversy
that continues to surround the risk-utility standard articulated for design defect cases in § 2 of the
Restatement (Third), we are reluctant . . . to cast aside our existing jurisprudence in favor of such
an approach on any broad, general basis.” Rather, said the court, the holding “in Kelley, that the
risk-utility test does not apply to a design defect unless the product malfunctions in some way . . .
remain[s] the law of Maryland.” Id. at 200, 792 A.2d at 1153.
The State alleges that “Defendants manufactured and/or sold MTBE gasoline.” ECF 2,
¶ 309. Further, it alleges that defendants’ MTBE gasoline was defective and unreasonably
dangerous in multiple ways not contemplated by consumers: “MTBE is released more readily from
gasoline transportation, storage and delivery systems or facilities than are the other constituents of
gasoline” (id. ¶ 310); “MTBE gasoline, when used in its intended manner, causes extensive
groundwater contamination that is difficult, time consuming and expensive to respond to” (id.);
“even at extremely low concentrations, MTBE renders groundwater putrid, foul, and unfit for use
by humans” (id.); and “MTBE and MTBE gasoline pose significant threats to the public health,
comfort, safety and welfare and the environment.” Id. In addition, the State alleges that the
defective design of MTBE gasoline caused its injures. Id. ¶¶ 315, 320.
Defendants maintain that the consumer expectation test applies to the State’s claim for
defective design and that, under that test, the State’s claim fails because its alleged injury was not
the result of its use of MTBE gasoline as a consumer product—i.e., as fuel. ECF 335-2 at 14. The
State argues, however, that it plausibly states a claim for defective design under both the consumer
expectation test and the risk-utility test. ECF 359 at 19.
The State’s allegations indicate that the consumer expectation test is the appropriate test
for evaluating its strict liability claim for defective design. As noted, the risk-utility test applies
only when the product at issue “malfunctions in some way.” Halliday, 368 Md. at 200, 792 A.2d
at 1153. The essence of the State’s claim for defective design is not that defendants’ MTBE
gasoline malfunctioned. Rather, it posits that defendants’ MTBE gasoline was defective and
unreasonably dangerous when used in its ordinary and intended way. See, e.g., ECF 2, ¶ 310
(“MTBE gasoline, when used in its intended manner, causes extensive groundwater contamination
that is difficult, time consuming and expensive to respond to and remediate.”). Accordingly, I
proceed to consider defendants’ argument that the State’s claim fails under the consumer
Defendants argue that the State fails to state a claim for defective design under the
consumer expectation test because the State was not injured as a result of its use of defendants’
MTBE gasoline. ECF 335-2 at 14. To be sure, the State does not allege that MTBE contaminated
its waters through its use of MTBE gasoline to drive its motor vehicles. Rather, it alleges that its
waters were contaminated when MTBE gasoline was released into the environment from hundreds
of release sites in the State, primarily from storage and delivery systems. ECF 2, ¶¶ 1, 109, 220.
However, Maryland courts have never limited recovery in strict liability for design defect
to ultimate users of the product, as defendants ask the Court to do here. Moreover, the Maryland
Court of Special Appeals has found that bystanders may recover in strict liability for foreseeable
injuries caused by the defective design of a product. See Valk Mfg. Co. v. Rangaswamy, 74 Md.
App. 304, 307–08, 323, 537 A.2d 622, 623–24, 631–32 (1988) (noting that “[t]he general
consensus clearly favors ‘bystander’ recovery” and concluding that motorist struck by a snow plow
device on a truck could recover against the manufacturer of the snow plow device), rev'd on other
grounds sub nom. Montgomery County v. Valk Mfg. Co., 317 Md. 185, 562 A.2d 1246 (1989).
Although I have not identified any cases in which the Maryland Court of Appeals has
addressed the issue of bystander recovery in strict liability for defective design, the Maryland Court
of Appeals has upheld bystander recovery in strict liability for failure to warn upon a sufficient
showing of causation. In ACandS, Inc. v. Godwin, 340 Md. 334, 667 A.2d 116 (1995), for instance,
the plaintiffs asserted strict liability and negligence claims against various asbestos manufacturers
for injuries caused by their exposure to block and pipe covering manufactured by defendants. Id.
at 348, 667 A.2d at 122. The court observed that some of the plaintiffs “were bystanders, in the
sense that they did not work directly with asbestos products.” Id. at 349, 667 A.2d at 123.
Nevertheless, the court upheld the jury’s award of compensatory damages to the plaintiff
bystanders where the evidence showed that exposure to defendants’ asbestos was a substantial
cause of their injuries—i.e., that defendants’ asbestos products were frequently used near
plaintiffs, and plaintiffs were regularly exposed to them. Id. at 351–59, 667 A.2d at 124–27. See
also Georgia-Pacific Corp. v. Pransky, 369 Md. 360, 363–67, 800 A.2d 722, 723–26 (2002)
(upholding jury verdict for plaintiff who was exposed to defendant’s product as a bystander where
there was sufficient evidence that her exposure was a substantial factor in causing her
And, to my knowledge, the majority of courts that have addressed the issue have allowed
bystanders to recover in strict liability against sellers for foreseeable injuries caused by defective
products. See Berrier v. Simplicity Mfg., Inc., 563 F.3d 38, 54 & n.25 (3d Cir. 2009) (collecting
cases); Haumersen v. Ford Motor Co., 257 N.W.2d 7, 16 (Iowa 1977) (plaintiff struck by defective
car); Embs v. Pepsi–Cola Bottling Co., 528 S.W.2d 703, 706 (Ky. 1975) (plaintiff injured by
exploding soda bottle at convenience store); Howes v. Hansen, 201 N.W.2d 825, 831–32 (Wis.
1972) (plaintiff injured when his foot came in contact with allegedly defective lawn mower).
This approach is supported by policy considerations. Allowing bystanders to recover in
strict liability against manufacturers and/or sellers for foreseeable injuries caused by a defectively
designed product places the risk of harm on the entity most capable of controlling the risk.
The State plausibly alleges that the contamination of its waters was a foreseeable risk of
defendants’ sale of MTBE gasoline. It asserts that “gasoline containing significant amounts of
MTBE was sold on a virtually universal basis throughout Maryland beginning in the 1990s” (ECF
2, ¶ 214), and that defendants were responsible for all or substantially all of this market. Id. ¶ 98.
The State also alleges that the release of MTBE gasoline into its waters was “inevitable” (id. ¶ 209)
and, indeed, that “MTBE contamination is associated with all transportation, storage, and use of
MTBE gasoline.” Id. ¶ 215.
Based on these allegations, and the absence of any authority foreclosing recovery in strict
liability to bystanders for foreseeable injuries caused by defective products, I reject defendants’
argument that the State’s design defect claim fails because its alleged injury was not the result of
its use of MTBE gasoline as a consumer product.
Failure to Warn (Count II)
Count II of the Complaint alleges strict liability for failure to warn. ECF 2, ¶¶ 322–31.
Defendants argue that this claim must be dismissed because the State fails plausibly to allege that
defendants had a legal duty to warn the State or its citizens about the alleged hazards of MTBE,
and, in any event, no such duty to “warn the world” exists under Maryland law. ECF 335-2 at 14.
A seller has a duty to warn of the dangers of a product “‘if the item produced has an inherent
and hidden danger that the producer knows or should know could be a substantial factor in causing
an injury.’” Shreve, 166 F. Supp. 2d at 413 (quoting Virgil v. Kash N' Karry Serv. Corp., 61 Md.
App. 23, 484 A.2d 652, 657 (1984)); see Zenobia, 325 Md. at 437, 601 A.2d at 641 (holding that
a seller “is not strictly liable for failure to warn unless the seller has ‘knowledge, or by the
application of reasonable, developed human skill and foresight should have knowledge, of the
presence of the . . . danger’”) (quoting Restatement, § 402A cmt. j); see also May, 446 Md. at 9,
129 A.3d at 988; Georgia Pac., LLC v. Farrar, 432 Md. 523, 530–31, 69 A.3d 1028, 1033 (2013);
Moran v. Faberge, Inc., 273 Md. 538, 544–45, 332 A.2d 11, 15–16 (1975). Conversely, a seller
does not have a duty to warn of an open and obvious danger in its product. Mazda Motor of Am.,
Inc. v. Rogowski, 105 Md. App. 318, 326, 659 A.2d 391, 395 (1989); Virgil, 61 Md. App. at 33,
484 A.2d at 657.
“‘Whether there is a duty to warn and the adequacy of warnings given must be evaluated
in connection with the knowledge and expertise of those who may reasonably be expected to use
or otherwise come into contact with the product. . .’” Emory v. McDonnell Douglas Corp., 148
F.3d 347, 350 (4th Cir. 1998) (quoting Mazda Motor, 105 Md. App. at 327, 659 A.2d at 395).
The State alleges that defendants manufactured, distributed, and sold MTBE gasoline in
Maryland. ECF 2, ¶ 98. Further, it alleges that defendants knew of the environmental hazards
associated with MTBE and its propensity to contaminate groundwater (id. ¶¶ 134, 178); defendants
knew that MTBE gasoline storage and delivery systems were prone to leaks and spills (id. ¶ 199);
the dangers of MTBE gasoline were not obvious to ordinary users (id. ¶ 324); defendants had a
duty to provide foreseeable users with adequate warnings of the dangers posed by MTBE and
MTBE gasoline (id. ¶ 326); and, despite defendants’ knowledge of the dangers of MTBE gasoline,
they continued to manufacture, market, and sell MTBE gasoline without warning “retailers,
customers, other Downstream Handlers, intended users and consumers, and the public” of its
dangers. Id. ¶ 206.
Of course, there is no duty to “warn the world.” Gourdine v. Crews, 405 Md. 722, 749,
955 A.2d 769, 786 (2008). However, the duty to warn extends “‘not only to those for whose use
the chattel is supplied but also to third persons whom the supplier should expect to be endangered
by its use.’” Farrar, 432 Md. at 531, 69 A.3d at 1033 (quoting Restatement, § 388 cmt. d). And,
the State plausibly alleges that the harm it suffered was a foreseeable result of defendants’
placement of MTBE gasoline into the Maryland market. It avers that there was a large market for
MTBE gasoline in Maryland in the 1990s (ECF 2, ¶ 214); that defendants were responsible for all
or substantially all of this market (id. ¶ 98); and that “MTBE contamination is associated with all
transportation, storage, and use of MTBE gasoline.” Id. ¶ 215. These allegations plausibly
establish that defendants had a duty to warn the State of the dangers associated with MTBE because
they created and controlled a market for products in the State that posed unique, substantial harms
to its resources. See In re MTBE, 175 F. Supp. 2d 593, 625–26 (S.D.N.Y. 2001) (finding that
plaintiffs plausibly alleged that defendants owed them a duty to issue warnings for MTBE gasoline
where, although the plaintiffs did not allege that the contamination of their wells was the result of
their own use of MTBE gasoline, the allegations showed that their injuries were a foreseeable
result of defendants’ placement of MTBE gasoline in the marketplace).
In passing, defendants also suggest that the State fails plausibly to allege that the lack of
any warning about the hazards of MTBE gasoline caused its injury. ECF 335-2 at 17. This is not
so. The Complaint alleges that “[h]ad the Downstream Handlers and intended users and consumers
of MTBE gasoline received adequate warnings or instructions concerning the safe use of MTBE
gasoline, they would have, or were substantially likely to have, avoided the risks or dangers
attendant to the use of MTBE gasoline, including avoiding MTBE gasoline altogether.” ECF 2, ¶
Maryland law recognizes a presumption in failure to warn cases that, to avoid injury,
“plaintiffs would have heeded a legally adequate warning had one been given.” U.S. Gypsum Co.
v. Mayor & City Council of Balt., 336 Md. 145, 162, 647 A.2d 405, 413 (1994); see Balbos, 326
Md. at 228, 604 A.2d at 469; Estate of White ex rel. White v. R.J. Reynolds Tobacco Co., 109 F.
Supp. 2d 424, 435 (D. Md. 2000) (“In some jurisdictions, including Maryland, there is a
presumption in strict liability cases that a plaintiff would have read and heeded an adequate
warning if it had been given.”). Accordingly, I am satisfied that the State plausibly alleges that
defendants’ failure to warn caused its injury.
Defendants also argue that the State’s failure to warn claim must be dismissed because,
under the sophisticated user defense, they discharged any duty to warn when they sold MTBE
gasoline to gasoline station owners and operators. ECF 335-2 at 17. The sophisticated user
defense insulates suppliers of dangerous or defective products from liability for failing to warn
ultimate users of the product if the supplier reasonably relied on an intermediary to provide a
warning. Balbos, 326 Md. at 217–18, 604 A.2d at 463–64; see Miller Metal Fabrication, Inc. v.
Wall, 415 Md. 210, 216 n.6, 999 A.2d 1006, 1010 n.6 (2010); Kennedy v. Mobay Corp., 84 Md.
App. 397, 403–13, 579 A.2d 1191, 1196 (1990), aff'd, 325 Md. 385 (1992) (per curiam); O’Neal
v. Celanese Corp., 10 F.3d 249, 251 (4th Cir. 1993). The purpose of this defense is “to put some
restraints on the expanding liability of manufacturers.” Balbos, 326 Md. at 218, 604 A.2d at 464.
In determining whether a supplier reasonably relied on an intermediary to give warnings,
courts consider several factors: (1) “the dangerous condition of the product”; (2) “the purpose for
which the product is used”; (3) “the form of any warnings given”; (4) “the reliability for the third
party as a conduit of necessary information about the product”; (5) “the magnitude of the risk
involved”; and (6) “the burdens imposed on the supplier by requiring that he directly warn all
users.” Balbos, 326 Md. at 219, 604 A.2d at 464.
Defendants’ assertion of the sophisticated user defense at this stage is premature. Courts
may resolve the applicability of affirmative defenses when ruling on a motion to dismiss only
when “all facts necessary to the affirmative defense ‘clearly appear[ ] on the face of the
complaint.’” Goodman, 494 F.3d at 464 (quoting Forst, 4 F.3d at 250) (emphasis added in
Goodman). Those circumstances do not exist here. The Court cannot determine from the record
before it whether defendants reasonably relied on any particular gasoline station owners or
operators to warn ultimate consumers of the risks associated with MTBE. Accordingly, I reject
defendants’ argument that the sophisticated user defense mandates dismissal of the State’s failure
to warn claim.
Finally, defendants argue that, to the extent the State’s failure to warn claim is directed
against defendants who owned, operated, or controlled gasoline storage equipment, it fails because
any warnings about the risks associated with MTBE gasoline would have been given to defendants
themselves and, hence, futile. ECF 335-2 at 19.
There is no duty to warn if the warning “cannot feasibly be implemented or have practical
effect.” Sherin v. Crane-Houdaille, Inc., 47 F. Supp. 3d 280, 297 (D. Md. 2014); Farrar, 432 Md.
at 541, 69 A.3d at 1039 (holding that trial court erred in finding a duty to warn because “there was
no practical way that any warning given by [the defendant] to any of the suggested intermediaries
would or could have avoided that danger”). Put another way, if a warning would have been futile,
then it cannot be said that the defendant’s failure to relay the warning was the proximate cause of
the plaintiff’s injuries.
As indicated, defendants assert that any warnings about the hazards of MTBE
contamination would have been futile to the extent that they themselves owned the gasoline storage
equipment from which any discharges occurred. ECF 335-2 at 19. But, the Court cannot make
this determination on the allegations before it. The defendants represent the supply chain of MTBE
gasoline for the Maryland market; they include manufacturers, distributors, sellers, etc., many of
which operated at multiple levels of that chain. And, the Court cannot glean from the Complaint
whether any of those defendants had the requisite control over gasoline stations and storage
equipment they owned such that any warnings given would have “effectively served” as warnings
to themselves. See In re MTBE, No. SAS-07-10470, 2015 WL 3763645, at *6 (S.D.N.Y. June 16,
2015) (granting summary judgment on plaintiff’s failure to warn claim against defendant whose
“local retailers and operators needed [its] consent to make any changes or alterations to the
[underground storage tanks]” because any such warnings “would have effectively served as
warnings to [defendant] itself”); cf. id. (denying summary judgment on plaintiff’s failure to warn
claims against defendants whose local operators “had a greater ability to make changes”).
Accordingly, I shall deny defendants’ Joint Motion to dismiss the State’s failure to warn
Abnormally Dangerous Activity (Count III)
Count III of the Complaint alleges strict liability for abnormally dangerous activity. ECF
2, ¶¶ 332–37. Defendants assert that this claim must be dismissed because the Complaint does not
identify the particular defendants against whom the claim is asserted, the locations at which the
alleged abnormally dangerous activity occurred, or the particular resources that were allegedly
injured. ECF 335-2 at 20–22.
Maryland has adopted the standard for strict liability for abnormally dangerous activities
outlined in Section 519 of the Restatement. See Rosenblatt v. Exxon Co., U.S.A., 335 Md. 58, 69,
642 A.2d 180, 185 (1994) (citing Yommer v. McKenzie, 255 Md. 220, 257 A.2d 138 (1969)).
Section 519 of the Restatement provides, in relevant part: “One who carries on an abnormally
dangerous activity is subject to liability for harm to the person, land or chattels of another resulting
from the activity, although he has exercised the utmost care to prevent the harm.”
In determining whether an activity is abnormally dangerous under this standard, courts
consider the following factors:
(a) existence of a high degree of risk of some harm to the person, land or chattels
(b) likelihood that the harm that results from it will be great;
(c) inability to eliminate the risk by the exercise of reasonable care;
(d) extent to which the activity is not a matter of common usage;
(e) inappropriateness of the activity to the place where it is carried on; and
(f) extent to which its value to the community is outweighed by its dangerous
Toms v. Calvary Assembly of God, Inc., 446 Md. 543, 553, 132 A.3d 866, 872 (2016) (citing
Restatement, § 520); see Kelley, 304 Md. at 132–33, 497 A.2d at 1146–47.
The “most crucial” consideration is the “appropriateness of the activity in the particular
place where it is being carried on.” Yommer, 255 Md. at 225, 257 A.2d at 140; see Rosenblatt,
335 Md. at 70, 642 A.2d at 186; Kelley, 304 Md. at 133, 497 A.2d at 1147 (“The thrust of the
doctrine is that the activity be abnormally dangerous in relation to the area where it occurs.”). This
cause of action is available for “claims by an occupier of land harmed by an activity abnormally
dangerous in relation to the area, which is carried on by a contemporaneous occupier of
neighboring land.” Rosenblatt, 335 Md. at 72, 642 A.2d at 186.
Defendants contend that the State’s strict liability claim for abnormally dangerous activity
must be dismissed because the State does not identify which of the sixty-five defendants are the
“Downstream Handler defendants” against whom the claim is brought, the locations at which the
alleged abnormally dangerous activity occurred, or the particular resources that were allegedly
injured as a result. ECF 335-2 at 20–22. None of these arguments carries the day.
The State asserts its strict liability claim for abnormally dangerous activity against the
“Downstream Handler” defendants who stored “large quantities of MTBE gasoline in underground
storage tanks in the vicinity of waters of the State used as drinking and/or irrigation water and/or
near population centers with drinking water wells.” ECF 2, ¶ 333. The State defines “Downstream
Handlers” as “entities engaged in the storage, transport, handling, retail sale, use, and response to
spills of such gasoline and/or persons who own operate, or are in charge of oil storage facilities.”
Id. ¶ 186. According to the State, its “precious and limited drinking and irrigation water resources
are located directly beneath and adjacent to these defendants’ places of business” (id. ¶ 334), and
the challenged activity “resulted in the release of MTBE gasoline into the waters of the State.” Id.
¶ 333. And, the State identifies forty-one of the sites at which MTBE gasoline was released into
its waters. Id. ¶ 220.
Maryland does not identify which of the sixty-five named defendants engaged in this
activity. Nor does it pinpoint all of the contamination sites and injured resources. But, the
allegations provide defendants with “fair notice of what the . . . claim is and the grounds upon
which it rests.” Twombly, 550 U.S. at 555. Fed. R. Civ. P. 8(a)(2) demands no more, particularly
because defendants are in a better position to know some of the relevant facts—e.g., the locations
of MTBE gasoline spills that occurred on their own properties. See Robertson v. Sea Pines Real
Estate Companies, Inc., 679 F.3d 278, 291 (4th Cir. 2012) (“The requirement of nonconclusory
factual detail at the pleading stage is tempered by the recognition that a plaintiff may only have so
much information at his disposal at the outset.”).
Moreover, the alleged conduct plausibly constitutes an abnormally dangerous activity. See
Yommer, 255 Md. at 227, 257 A.2d at 141 (holding that “the storage of large quantities of gasoline
immediately adjacent to a private residence” constituted an abnormally dangerous activity for
which strict liability applied); Kelley, 304 Md. at 133, 497 A.2d at 1147 (“If a gasoline station
owner has faulty tanks which leak gasoline into the underground water supply, that might be
abnormally dangerous if the land in which the tanks are buried is located in a well populated
area.”); see also In re MTBE, 457 F. Supp. 2d 298, 316 (S.D.N.Y. 2006) (“Maryland courts allow
strict liability claims for abnormally dangerous activities such as the pollution of percolating
groundwater by gasoline and similar substance.”).
Therefore, I shall deny defendants’ Joint Motion to dismiss the State’s claim for strict
liability based on abnormally dangerous activity.
Public Nuisance (Count IV)
Count IV of the Complaint alleges public nuisance. ECF 2, ¶¶ 338–48. Defendants argue
that this claim must be dismissed “to the extent it is premised on defendants’ alleged manufacture,
marketing, or supply of gasoline MTBE” because courts have refused to impose nuisance liability
on parties for merely manufacturing, marketing or distributing a product. ECF 335-2 at 24.
The Maryland Court of Appeals has relied on the definition of public nuisance set forth in
Section 821B of the Restatement: “‘A public nuisance is an unreasonable interference with a right
common to the general public.’” Tadjer v. Montgomery County, 300 Md. 539, 552–53, 479 A.2d
1321, 1327 (1984) (quoting Restatement of Torts (Second), § 821B(1) (1979)); see Gallagher v.
H.V. Pierhomes, LLC, 182 Md. App. 94, 114, 957 A.2d 628, 639–40 (2008); Adams v. NVR Homes,
Inc., 193 F.R.D. 243, 251 (D. Md. 2000).
Section 821B of the Restatement goes on to state:
Circumstances that may sustain a holding that an interference with a public right is
unreasonable include the following:
(a) whether the conduct involves a significant interference with the public health,
the public safety, the public peace, the public comfort or the public convenience, or
(b) whether the conduct is proscribed by a statute, ordinance or administrative
(c) whether the conduct is of a continuing nature or has produced a permanent or
long-lasting effect, and, as the actor knows or has reason to know, has a significant
effect upon the public right.
“Widespread water pollution is indeed a quintessential public nuisance.” Rhode Island
MTBE, 357 F. Supp. 3d at 142; see Restatement, § 832 (“Pollution may also result in a public
nuisance, as defined in § 821B, when there is interference with a right common to all members of
the public-as, for example, when the pollution kills the fish in a public stream, or prevents the use
of a public bathing beach.”); New York v. Shore Realty Corp., 759 F.2d 1032, 1051 (2d Cir. 1985)
(“We have no doubt that the release or threat of release of hazardous waste into the environment
unreasonably infringes upon a public right and thus is a public nuisance as a matter of New York
law . . .”).
Defendants argue that the State’s public nuisance claim must be dismissed to the extent
that it is premised on their manufacture, marketing, or supply of MTBE gasoline because, in those
capacities, they did not have control over the MTBE gasoline when it was allegedly released into
the State’s waters. ECF 335-2 at 22–23. They cite a single District Court case from Maryland,
Cofield v. Lead Indus. Ass’n, Inc., No. MJG-99-3277, 2000 WL 34292681 (D. Md. Aug. 17, 2000),
to support this argument. There, the court dismissed a public nuisance claim brought against lead
paint manufacturers because “it [was] indisputable that the Defendants in the instant case lack[ed]
control over the lead containing products that are alleged to constitute a nuisance.” Id. at *7. The
court reasoned that liability in nuisance requires “that the nuisance-causing instrumentality be
within the exclusive control of the defendant.” Id.
However, to my knowledge, Maryland courts have never adopted the “exclusive control”
rule for public nuisance liability outlined by the court in Cofield. To the contrary, Maryland courts
have found that a defendant who created or substantially participated in the creation of the nuisance
may be held liable even though he (or it) no longer has control over the nuisance-causing
instrumentality. See Adams, 193 F.R.D. at 256–57 (“It has been held that where the finished
product of a third party constitutes a public nuisance, the third party may be held liable for creation
of the public nuisance, even though it no longer has control of the product creating the public
nuisance.”); E. Coast Freight Lines v. Consol. Gas, Elec. Light & Power Co. of Balt., 187 Md.
385, 397–98, 50 A.2d 246, 252 (1946) (“We may, therefore, conclude that the weight of authority
is that a contractor, even after he has completed his work, may be held liable in damages if such
work is inherently dangerous and constitutes a public nuisance.”); see also Gorman v. Sabo, 210
Md. 155, 161, 122 A.2d 475, 478 (1956) (“One who does not create a nuisance may be liable for
some active participation in the continuance of it or by the doing of some positive act evidencing
its adoption.”); Maenner v. Carroll, 46 Md. 193, 215 (1877) (“Now, it is certainly true, that every
person who does or directs the doing of an act that will of necessity constitute or create a nuisance,
is personally responsible for all the consequences resulting therefrom, whether such person be
employer or contractor.”).
As noted, Maryland courts have followed the Restatement’s definition of public nuisance.
See, e.g., Tadjer, 300 Md. at 552–53, 479 A.2d at 1327; see Gallagher, 182 Md. App. at 114, 957
A.2d at 639–40. And, under the Restatement, “[o]ne is subject to liability for a nuisance caused
by an activity, not only when he carries on the activity but also when he participates to a substantial
extent in carrying it on.” Restatement, § 834.
Moreover, other courts have found that plaintiffs may recover in public nuisance from
MTBE manufacturers and distributors that played a significant role in the creation of the nuisance
where the governing state law had not foreclosed such liability. See In re MTBE, 725 F.3d 65,
121–23 (2d Cir. 2013) (upholding jury verdict against defendant for public nuisance under New
York law where evidence showed that defendant manufactured MTBE gasoline, supplied that
gasoline to service stations in plaintiffs’ locale, and knew that its gasoline would be stored in
underground tanks that leaked); In re MTBE, 175 F. Supp. 2d at 629 (finding that plaintiffs stated
viable nuisance claims under the laws of California, Florida, Illinois, and New York where they
alleged that defendants manufactured and distributed MTBE gasoline with knowledge of its
dangers, failed to warn downstream handlers of those dangers, marketed and promoted the use of
MTBE by misrepresenting its chemical properties, and actively conspired to conceal the threat
posed by MTBE). Cf. In re MTBE, No. SAS-14-6228, 2015 WL 4092326, at *3–4 (S.D.N.Y. July
2, 2015) (dismissing public nuisance claim under Pennsylvania law where “Pennsylvania courts
have repeatedly constrained liability for public nuisance specifically to an owner or operator of a
nuisance source” and do not impose liability for public nuisance “in the context of injuries caused
by defective product design and distribution”) (citations and internal quotation marks omitted).
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 (ECF 2, ¶ 346);
intentionally and deceptively promoted MTBE as an additive in gasoline despite this knowledge
(id.); 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 (id. ¶¶ 161, 198, 346); and failed to warn downstream handlers, consumers, and the
public of the dangers associated with the MTBE. Id. ¶ 206. The State also asserts that defendants
controlled all or substantially all of the market for MTBE and MTBE gasoline in Maryland. Id. ¶
Because no case law forecloses this theory of public nuisance liability under Maryland law,
I reject defendants’ argument that the State’s public nuisance claim must be dismissed to the extent
it is premised on their manufacture, marketing, and supply of MTBE gasoline.
Trespass (Count V)
Count V of the Complaint alleges trespass. ECF 2, ¶¶ 349–57. A trespass occurs “‘when
a defendant interferes with a plaintiff’s interest in the exclusive possession of the land by entering
or causing something to enter the land.’” Exxon Mobil Corp. v. Albright, 433 Md. 303, 408, 71
A.3d 30, 94 (2013) (quoting Rosenblatt, 335 Md. at 78, 642 A.2d at 189); see Balt. Gas & Elec.
Co. v. Flippo, 348 Md. 680, 689, 705 A.2d 1144, 1148 (1998); JBG/Twinbrook Metro Ltd. P’ship
v. Wheeler, 346 Md. 601, 618, 697 A.2d 898, 907 (1997); Patapsco Loan Co. v. Hobbs, 129 Md.
9, 98 A. 239, 241 (1916) (“Every unauthorized entry upon the property of another is a trespass.”).
The State alleges that “defendants’ intentional and/or negligent conduct caused MTBE to
enter, invade, intrude upon, injure, trespass, and threaten to trespass upon the State’s possessory
interest in properties it owns, the possessory interest of its citizens in properties they own which
the State asserts here on their behalf in its parens patriae capacity, and the State’s possessory
interest as the trustee of the State’s natural water resources.” ECF 2, ¶ 350.
Defendants maintain that the State cannot recover in trespass for the alleged MTBE
contamination of properties that it does not exclusively possess—i.e., the natural waters of the
State and properties owned by its citizens. ECF 335-2 at 25–26. This seems like a straightforward
application of law: a party cannot recover for trespass to properties that it does not exclusively
possess. See, e.g., Albright, 433 Md. at 408, 71 A.3d at 94.
But, the State insists otherwise. Although it does not dispute that it lacks exclusive
possession of the natural waters of the State and properties owned by its citizens, the State asserts
that it has the requisite possessory interest to recover for trespass to these properties, “both as a
quasi-trustee of Maryland’s water resources and as a parens patriae representative of its citizens’
water ownership interests.” ECF 359 at 33–34. It eschews mention of any controlling authority
in support of this argument. See id.
Parens patriae means “parent of the country” and “refers traditionally to [the] role of state
as sovereign and guardian of persons under legal disability.” Alfred L. Snapp & Son, Inc. v. Puerto
Rico, ex rel., Barez, 458 U.S. 592, 600 & n.8 (1982) (quoting Black’s Law Dictionary 1003 (5th
ed. 1979)). The doctrine of parens patriae that has developed in case law “establish[es] the right
of a State to sue . . . to prevent or repair harm to its ‘quasisovereign’ interests.” Hawaii v. Standard
Oil Co. of Cal., 405 U.S. 251, 258 (1972); see United States v. Johnson, 114 F.3d 476, 481 (4th
Cir. 1997) (“At bottom, parens patriae is a standing doctrine under which a state may under proper
circumstances sue on behalf of its citizens when a separate quasi-sovereign interest also is at
stake.”); Alaska Sport Fishing Ass’n v. Exxon Corp., 34 F.3d 769, 773 (9th Cir. 1994) (“State
governments may act in their parens patriae capacity as representatives for all their citizens in a
suit to recover damages for injury to a sovereign interest.”). Quasi-sovereign interests include a
state's interest “in the health and well-being—both physical and economic—of its residents in
general.” Snapp, 458 U.S. at 607.
When a state proceeds in its parens patriae capacity, it is “‘deemed to represent all its
citizens.’” New Jersey v. New York, 345 U.S. 369, 372–73 (1953) (quoting Kentucky v. Indiana,
281 U.S. 163, 173–74 (1930)); see Envtl. Def. Fund, Inc. v. Higginson, 631 F.2d 738, 740 (D.C.
Cir. 1979) (“Under the parens patriae concept, . . . a state that is a party to a suit involving a matter
of sovereign interest is presumed to represent the interests of all its citizens.”). The Supreme Court
explained that this doctrine “is a necessary recognition of sovereign dignity, as well as a working
rule for good judicial administration.” New Jersey, 345 U.S. at 373.
The State brings this suit for the widespread contamination of its waters. This is an injury
that is properly redressed in parens patriae. See State v. City of Dover, 891 A.2d 524, 530 (N.H.
2006) (holding that state “has parens patriae standing to bring contamination suits against the
MTBE defendants on behalf of [its] residents”); see also South Carolina v. North Carolina, 558
U.S. 256, 274 (2010) (“An interest in water is an interest shared with other citizens, and is properly
pressed or defended by the State.”); New York v. New Jersey, 256 U.S. 296, 301–02 (1921)
(concluding that the state was the proper party to seek recovery for sewage dumping to its waters).
The more difficult question is how this affects the scope of the State’s trespass claim. That
is, does proceeding in parens patriae give the State “exclusive possession” of contaminated
properties within its borders—even those it does not own—such that it may recover for trespass to
those areas? One court has answered this question in the affirmative. See Rhode Island MTBE,
357 F. Supp. 3d at 144 (concluding that Rhode Island could “protect its pseudo-sovereign interest
in the welfare of its citizens and integrity of its natural resources” by seeking relief in trespass for
widespread MTBE contamination).
However, there is no support for this position under Maryland law. As best I can determine,
Maryland courts have never deviated from the rule that an action for trespass lies only “‘when a
defendant intrudes upon a plaintiff’s interest in the exclusive possession of the land . . .’” Albright,
433 Md. at 408, 71 A.3d at 94 (quoting Rosenblatt, 335 Md. at 78, 642 A.2d at 189) (emphasis
added); accord Hanna v. ARE Acquisitions, LLC, 400 Md. 650, 658, 929 A.2d 892, 896 (2007);
Grymes v. State, 202 Md. App. 70, 94, 30 A.3d 1032, 1046 (2011). And, although one court has
found that the State’s quasi-trustee interest in its natural waters could support recovery in public
nuisance for an oil spill, Maryland v. Amerada Hess Corp., 350 F. Supp. 1060, 1067 (D. Md.
1972), the State does not identify any cases in which Maryland courts have found that its quasitrustee interest in its natural resources, or proceeding parens patriae, confers the requisite
possessory interest to sustain a trespass claim. Nor does the State explain why proceeding under
a theory of public nuisance—which does not require exclusive possession—would be inadequate.
Accordingly, I shall grant the Joint Motion to dismiss the State’s trespass claim to the
extent it is based on properties outside of its exclusive possession—i.e., its natural waters and the
properties of its citizens.
Defendants make two additional arguments for dismissal of the State’s trespass claim.
First, they assert that, even with respect to properties that the State does own directly, the claim
nonetheless fails because the Complaint does not identify the properties upon which the State’s
trespass claim is based. ECF 335-2 at 26. I disagree.
The State brings this suit against defendants for the widespread MTBE contamination of
its waters. ECF 2, ¶ 216. Federal Rule of Civil Procedure 8(a)(2) does not require the State to
identify the precise locations of all the State properties that were contaminated by MTBE. See
Rhode Island MTBE, 357 F. Supp. 3d at 136 (rejecting the defendants’ argument that the state
failed to meet the notice pleading standard because the Complaint did not identify specific
contamination sites). It requires only that the complaint contain “a short and plain statement of
the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). I am satisfied that
the State’s allegations meet this standard.
In addition, defendants contend that the State’s trespass claim fails to the extent it is
premised on defendants’ manufacture, distribution, or supply of MTBE gasoline that was
subsequently released by another entity. ECF 335-2 at 26–27. They assert that defendants acting
in those capacities lacked the requisite control of the underground storage tanks at the time the
alleged trespasses occurred—when MTBE was released into the State’s waters. Id. at 27.
The Maryland Court of Appeals has said: “[W]hen an adjacent property is invaded by an
inanimate or intangible object it is obvious that the defendant must have some connection with or
some control over that object in order for an action in trespass to be successful against him.”
Rockland Bleach & Dye Works Co. v. H.J. Williams Corp., 242 Md. 375, 387, 219 A.2d 48, 54
(1966); see JBG/Twinbrook, 346 Md. at 626, 697 A.2d at 911. But, viewing the allegations in the
light most favorable to the State, the Court cannot say on the record before it that the defendants
who manufactured and distributed MTBE gasoline lacked such control over the gasoline stations
and storage equipment where MTBE releases occurred. Accordingly, I reject this argument.
In sum, I shall grant the defendants’ Joint Motion to dismiss the State’s claim for trespass
to properties outside of its exclusive possession. I shall otherwise deny the Motion.
Maryland Environment Article Claims (Counts VII-XI)
Counts VII through XI of the Complaint allege violations of Maryland’s Environment
Article. ECF 2, ¶¶ 370–417. Defendants assert that these claims fail as a matter of law as to those
who acted as manufacturers, marketers, or suppliers of MTBE gasoline because such entities are
not subject to liability under the relevant statutory provisions. ECF 335-2 at 7–8. Defendants also
argue that, even to the extent they are subject to liability under the statute, the State’s claims must
be dismissed because they are supported only by conclusory allegations. Id. at 10.
A brief overview of the relevant statutory scheme is warranted. Count VII is brought under
Title 4, Subtitle 4 of the Environment Article (“Water Pollution Control and Abatement”). ECF
2, ¶¶ 370–90 (citing E.A. § 4–401 et seq.). In relevant part, that provision makes it “unlawful for
any person to discharge or permit the discharge of oil in any manner into or on waters of this
State.” E.A. § 4–410. “Oil” is defined to include petroleum, petroleum by-products, and gasoline.
E.A. § 4–401(h)(1). “Discharge” is defined as “the addition, introduction, leaking, spilling, or
emitting any oil to State waters or the placing of any oil in a location where it is likely to reach
State waters.” E.A. § 4–401(d).
The Subtitle empowers the Department of the Environment to enforce its provisions. See
E.A. § 4–405(c). It also contains a provision for enforcement by the Attorney General, id. § 4–
Upon a showing by the Attorney General, in behalf of the Department, that any
person is violating or is about to violate the provisions of this subtitle or is violating
or is about to violate any valid order or permit issued by the Department, an
injunction shall be granted without the necessity of showing a lack of adequate
remedy at law. In circumstances of emergency creating conditions of imminent
danger to the public health, welfare or the environment, the Attorney General, on
behalf of the Department, may institute a civil action for an immediate injunction
to halt any pollution or other activity causing the danger.
Count VIII is brought under E.A. Title 4, Subtitle 7 (“Oil Contaminated Site Environmental
Cleanup Fund”). ECF 2, ¶¶ 391–99 (citing E.A. § 4–701 et seq.). It establishes an “Oil
Contaminated Site Environmental Cleanup Fund” to provide reimbursement for the costs
associated with the cleanup of an oil spill involving an underground oil storage tank or heating oil
E.A. § 4–704; see also E.A. § 4–706(a). Section 4–706(a) states: “If the Department [of
the Environment] has assumed control of an oil spill situation involving an underground oil storage
tank or heating oil tank under this title, the Department may obtain from the Fund . . .
[r]eimbursement for usual, customary, and reasonable costs incurred in performing site
rehabilitation.” Further, E.A. § 4–706(c) provides:
In order to encourage that site rehabilitation activities be undertaken by an owner,
operator, or other person responsible for a discharge from an underground oil
storage tank or heating oil tank, any site rehabilitation costs including attorney's
fees and litigation costs incurred by the Department or the Fund under this section
shall be recoverable from the responsible party to the Fund.
Count IX is based on E.A. Title 9, Subtitle 3 (“Water Pollution Control”). ECF 2, ¶¶ 400–
07 (citing E.A. § 9–301 et seq.). Section 9–322 prohibits the “discharge of any pollutant” into the
waters of the State unless permitted by Title 4, Subtitle 4. And, E.A. § 9–342.2(a) provides: “A
person who discharges a pollutant into the waters of the State . . . shall reimburse the Department
for the reasonable costs incurred by the Department in conducting environmental health
monitoring or testing . . .” The Department may recover such costs in a civil action. E.A. § 9–
342.2(b). The Department may also “bring an action for an injunction against any person who
violates any provision of this subtitle or any rule, regulation, order, or permit adopted or issued by
the Department under this subtitle.” E.A. § 9–339(a).
Count X is lodged pursuant to E.A. Title 9, Subtitle 4 (“Drinking Water”). ECF 2, ¶¶ 408–
12 (citing E.A. § 9–401 et seq.). In relevant part, that Subtitle authorizes the Secretary of the
Department of the Environment to take action, including “suing for injunctive or other appropriate
relief,” to protect the public health where “a dangerous contaminant is present in or likely to enter
a public water system.” E.A. § 9–405(b).
Count XI is brought under E.A. Title 7, Subtitle 2 (“Controlled Hazardous Substances”).
ECF 2, ¶¶ 413–17 (citing E.A. § 7–201 et seq.). The purpose of that Subtitle “is to provide
additional and cumulative remedies to prevent, abate, and control pollution of the waters of this
State. . .” E.A. § 7–203. In relevant part, it authorizes the Department to take various actions
when a hazardous substance is released into the environment. See E.A. § 7–222; E.A. § 7–207. It
also establishes a “State Hazardous Substance Control Fund,” E.A. § 7–218, and provides that all
expenditures from the Fund made by the Department “in response to a release or a threatened
release of a hazardous substance a particular site shall be reimbursed to the Department for the
[Fund] by the responsible person for the release or the threatened release.” E.A. § 7–221(a).
Further, E.A. § 7–221(f) states:
(f) Upon request by the Department, and after reasonable notice, a person shall
provide to the Department any existing information or documents relating to:
(1) The identification, nature, and quantity of any hazardous substance which
is or has been generated, treated, stored, or disposed of at a site or facility, or
transported to a site or facility; and
(2) The nature or extent of a release of a hazardous substance at or from a site
I turn to defendants’ first argument for dismissal. Defendants assert that the only parties
that may be subjected to liability under the foregoing statutes are those that qualify as “person[s]
responsible for the discharge” within the meaning of Title 4, Subtitle 4. ECF 335-2 at 8–9 (citing
E.A. § 4–401(j)(1)). That provision states that a “person responsible for the discharge” includes:
The owner of the discharged oil;
The owner, operator, or person in charge of the oil storage facility, vessel,
barge, or vehicle involved in the discharge at the time of or immediately
before the discharge; and
Any other person who through act or omission causes the discharge.
According to defendants, this definition does not reach those who manufacture, market, or supply
gasoline. ECF 335-2 at 8–9. Therefore, defendants say, the State’s statutory claims fail as a matter
of law to the extent they are asserted against defendants in those capacities. Id. at 8.
The State does not disagree with defendants’ assertion that the State’s statutory claims may
lie only against a “person responsible for the discharge,” as defined in Title 4, Subtitle 4. ECF 359
However, it construes the scope of that definition differently. Id. It argues that
defendants who manufactured, marketed, and supplied MTBE gasoline qualify as “person[s]
responsible for the discharge” within the third subsection of the definition, because they “cause[d]
the discharge.” Id. at 12.
The E.A. does not define what it means to “cause” a discharge and, to my knowledge, no
court has construed the definition of “person responsible for the discharge” under the statute. E.A.
§ 4–401(j)(1). The Fourth Circuit has said that, in interpreting a state statute, a federal court should
“apply the statutory construction rules applied by the state's highest court.” In re DNA Ex Post
Facto Issues, 561 F.3d 294, 300 (4th Cir. 2009); see Carolina Trucks & Equip., Inc. v. Volvo
Trucks of N. Am., Inc., 492 F.3d 484, 489 (4th Cir. 2007).
Maryland “follows the general principles of statutory interpretation.” Johnson v. Mayor &
City Council of Balt., 430 Md. 368, 377, 61 A.3d 33, 38 (2013). “‘The cardinal rule of statutory
interpretation is to ascertain and effectuate the real and actual intent of the Legislature.’” Bottini
v. Dep't of Fin., 450 Md. 177, 195, 147 A.3d 371, 382 (2016) (quoting Wagner v. State, 445 Md.
404, 417, 128 A.3d 1, 9 (2015)); accord Bourgeois v. Live Nation Entm’t, Inc., 430 Md. 14, 26, 59
A.3d 509, 516 (2013); Lockshin v. Semsker, 412 Md. 257, 274, 987 A.2d 18, 28 (2010).
To that end, the Maryland Court of Appeals follows a two-step approach, Johnson, 430
Md. at 377–78, 61 A.3d at 38:
First, if the plain meaning of the statutory language is clear and unambiguous, and
consistent with both the broad purposes of the legislation, and the specific purpose
of the provision being interpreted, our inquiry is at an end. Second, when the
meaning of the plain language is ambiguous or unclear, we seek to discern the intent
of the legislature from surrounding circumstances, such as legislative history, prior
case law, and the purposes upon which the statutory framework was based.
(Internal citations and quotation marks omitted); see Brutus 630, LLC v. Town of Bel Air, 448 Md.
355, 367–68, 139 A.3d 957, 964 (2016); Bourgeois, 430 Md. at 27, 59 A.3d at 516; Miller v.
Mathias, 428 Md. 419, 451, 52 A.3d 53, 72 (2012).
The provision at issue is found in E.A. Title 4, Subtitle 4. As noted, that Subtitle makes it
“unlawful for any person to discharge or permit the discharge of oil in any manner into or on the
waters of this State.” E.A. § 4–410(a). It states that “a person responsible for the discharge as
defined in § 4–410(j) of this subtitle is liable for any containment, cleanup, and removal costs or
damages. . .” E.A. § 4–419(c). And, as indicated, “Discharge” is defined as “the addition,
introduction, leaking, spilling, or emitting any oil to State waters or the placing of any oil in a
location where it is likely to reach State waters.” E.A. § 4–401(d).
E.A. § 4–401(j)(1) provides that the “person responsible for the discharge” includes:
The owner of the discharged oil;
The owner, operator, or person in charge of the oil storage facility, vessel,
barge, or vehicle involved in the discharge at the time of or immediately
before the discharge; and
Any other person who through act or omission causes the discharge.
The defendants’ position is that the definition of “person responsible for the discharge”
includes only “those entities that are directly responsible – by ownership or control of an oil
product or a releasing apparatus (e.g., a leaking [underground storage tank]) – for the actual
discharge or spillage of gasoline.” ECF 335-2 at 9. However, this construction is essentially a
rephrasing of subsections (i) and (ii) of the statutory definition that entirely ignores the third
subsection. That subsection plainly extends its reach to “[a]ny other person who through act or
omission causes the discharge.” E.A. § 4–401(j)(1). This alone is enough to rebut the defendants’
That the definition of “person responsible for discharge” is more expansive than defendants
assert is particularly clear when subsection (iii) is read in combination with the statutory definition
of “Discharge.” “Discharge” includes not only “the addition, introduction, leaking, spilling, or
emitting any oil to State waters,” but also “the placing of any oil in a location where it is likely to
reach State waters.” E.A. § 4–401(d). By the plain terms of the statute, then, liability can attach
when an actor, not even through any direct action but solely by omission, “cause[s],” E.A. § 4–
401(j)(1)(iii), oil to be placed “in a location where it is likely to reach State waters,” E.A. § 4–
Viewing the allegations in the light most favorable to the State, it plausibly alleges that
defendants who manufactured, marketed, and supplied MTBE gasoline fall within subsection (iii)
of E.A. § 4–401(j)(1), i.e., “person[s] responsible for the discharge.” It alleges that defendants are
collectively responsible for all or substantially all of the MTBE gasoline that was released in
Maryland (ECF 2, ¶¶ 98, 220); placed MTBE gasoline into the Maryland market despite
knowledge of its dangers and the likelihood of its release into the State’s waters (id. ¶¶ 384); and
failed to warn downstream handlers, foreseeable users, and the public of the dangers associated
with MTBE gasoline. Id. ¶ 386.
The Court need not decide whether the phrase “causes the discharge” in E.A. § 4–
401(j)(1)(iii) is broader than proximate causation in common law. I am satisfied that, because the
State sufficiently pleads proximate causation on its common law tort claims, see supra, Section
III.C.1, it plausibly alleges that defendants who manufactured, marketed, and/or distributed MTBE
are “person[s] responsible for the discharge” as “other person[s] who through act or omission
cause[d] the discharge.” E.A. § 4–401(j)(1)(iii). Thus, I reject defendants’ argument that the
State’s statutory claims must be dismissed as a matter of law to the extent they are premised on
defendants’ manufacture, marketing, or supply of MTBE gasoline.
Defendants also argue that the State’s statutory claims must be dismissed in their entirety
because they are supported only by conclusory allegations and improper group pleading. ECF
335-2 at 11. They contend that the Complaint is deficient because it does not specify which
defendants allegedly did what, where, when or how, but instead “lumps” them all together and
broadly alleges they are all “responsible” for discharges of MTBE gasoline within the meaning of
the E.A. Id. This argument also fails.
The pleading standard set by Rule 8(a)(2) of the Federal Rules of Civil Procedure is
minimal. It requires only that the complaint contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “[D]etailed factual
allegations” are not necessary; the statement need only “give the defendant fair notice of what the
. . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555.
The State’s Complaint meets this standard. It alleges that defendants together made up all
or substantially all of the MTBE gasoline market in Maryland (ECF 2, ¶ 98); that defendants who
manufactured and supplied MTBE gasoline are responsible for putting MTBE gasoline into the
stream of commerce despite their knowledge of its dangers (id. ¶¶ 384–87); that defendants who
are downstream handlers are responsible for discharges that occurred at their storage facilities; (id.
¶ 387); and that defendants breached their duty to use due care in the manufacture, handling,
storage, marketing, and sale of MTBE gasoline. Id. ¶ 388. The State also identifies forty-one of
the sites at which MTBE gasoline was released into its waters. Id. ¶ 220. These allegations provide
defendants with “fair notice” of the conduct underlying the State’s claims. Twombly, 550 U.S. at
Accordingly, I shall deny defendants’ Joint Motion to dismiss the State’s statutory claims.
Additional Arguments for Dismissal
I turn to the supplemental motions to dismiss for failure to state a claim filed by several
defendants. ECF 334 (Duke Energy, Warren, Guttman Energy, TPRI); ECF 338 (Hartree Joinder);
ECF 336 (7-Eleven); ECF 342 (LPA). With the exception of certain arguments raised by 7-Eleven,
the motions are largely repetitive. They argue that the Complaint fails to satisfy Rule 8 because it
offers no factual allegations about their individual actions but instead relies on improper group
pleading. ECF 334-1 at 3–7; ECF 336-1 at 13–20; ECF 342-1 at 3–5.
The Complaint, although quite long, could certainly be more detailed. It does not offer any
allegations specific to these defendants apart from listing their names, places of incorporation, and
places of business. ECF 2, ¶¶ 43, 48, 52, 73, 80, 85. However, as discussed, the Complaint
satisfies the liberal pleading standard of Rule 8(a)(2).
In short, the Complaint alleges that defendants were in the chain of distribution that
supplied MTBE gasoline to Maryland, knew or should have known of the environmental hazards
associated with MTBE gasoline, failed to warn foreseeable users of those dangers, and that releases
of MTBE gasoline in the State have resulted in the widespread contamination of its waters. It
asserts all claims against all defendants with the exception of Count III, its strict liability claim for
abnormally dangerous activity, which is brought only against downstream handler defendants.
ECF 2, ¶ 333. These allegations provide defendants with “fair notice” of the claims against them
“and the grounds upon which [they] rest.” Twombly, 550 U.S. at 555; see Chevron U.S.A Inc. v.
Apex Oil Co., 113 F. Supp. 3d 807, 815 n.1 (D. Md. 2015) (“Chevron’s claims against Apex do
not fail merely because Chevron grouped the defendants in order to bring identical claims against
each of them.”) (citing cases).
Accordingly, I reject defendants’ argument that the Complaint must be dismissed because
it fails to meet the notice pleading standard set by Federal Rule of Civil Procedure 8(a)(2).
I now consider the additional arguments for dismissal raised by 7-Eleven.
a. Downstream Handlers
7-Eleven asserts that it is a downstream handler, and it insists that the suit must be
dismissed because the Complaint is “inherently contradictory.” ECF 336-1 at 3. Specifically, it
points out that the Complaint defines “defendants” to include sellers of MTBE gasoline (ECF 2,
¶¶ 93, 309), and then defines “downstream handlers” as “entities engaged in the storage, transport,
handling, retail sale, use, and response to spills of such gasoline and/or persons who own operate,
or are in charge of oil storage facilities.” Id. ¶ 186. 7-Eleven argues that, as a result of these
overlapping definitions, the State’s allegations amount to claims against the downstream handler
defendants “for selling defectively designed products to themselves and failing to warn
themselves.” ECF 336-1 at 8.
The Complaint reveals that, generally speaking, there are two categories of players in the
supply chain for MTBE gasoline: “downstream handlers,” meaning sellers and distributors (ECF
2, ¶¶ 186, 207, 333); and “upstream handlers,” meaning manufacturers and refiners. See id. ¶¶
309–10. The State’s allegations indicate that these categories are not mutually exclusive, as some
defendants operate as both upstream handlers and downstream handlers. Id. ¶¶ 207, 333.
Herein lies the problem, according to 7-Eleven. The State does not distinguish between
the upstream handler defendants and the downstream handler defendants in its claims for strict
product liability, Counts I and II. It alleges, in relevant part: “Defendants knew that Downstream
Handlers and intended users and consumers did not have the wherewithal to inspect or test for
defects” (ECF 2, ¶ 315); and “defendants did not adequately warn or instruct Downstream
Handlers or the intended users or consumers as to the dangers of MTBE gasoline.” Id. ¶ 327.
According to 7-Eleven, these allegations amount to claims against the downstream handler
defendants for failing to uphold legal duties and obligations to themselves and, therefore, must be
dismissed. ECF 336-1 at 8.
7-Eleven ignores the applicable law and reads the Complaint too narrowly.
Maryland law, both manufacturers and sellers may be held liable in strict liability for injuries
caused by defective products. The Maryland Court of Appeals has stated:
In a strict liability action, if a product is defective when it was sold by a
manufacturer because it lacked a warning of its dangerous characteristics . . . and if
the defective and dangerous product reaches the user plaintiff without substantial
change, middlemen or intermediate sellers of the defective product are strictly
liable to the plaintiff user just as the manufacturer is liable to the plaintiff.
Zenobia, 325 Md. at 441–42, 601 A.2d at 643 (citing Restatement, § 402A cmt. f); see Phipps, 278
Md. at 352–53.
In my view, the State’s allegations are broad enough to assert claims for defective design
and failure to warn against both upstream handler defendants and downstream handler defendants.
As to design defect, it alleges that “[d]efendants manufactured and/or sold MTBE gasoline,” (ECF
2, ¶ 309), and that “[a]t the time that it left the defendants’ possession or control . . . MTBE gasoline
was defective and unreasonably dangerous” in several ways. Id. ¶ 310. As to failure to warn, the
State alleges that “[d]efendants did not adequately warn or instruct Downstream Handlers or the
intended users or consumers as to the dangers of MTBE gasoline.” Id. ¶ 327. This disjunctive
allegation indicates that the alleged failure to warn occurred either because upstream handlers
failed to warn downstream handlers, or because all defendants knew the risks of MTBE gasoline
and failed to warn end users.
Rule 8(d)(3) of the Federal Rules of Civil Procedure permits a party to “state as many
separate claims . . . as it has, regardless of consistency.” Ultimately, if it is shown that upstream
handler defendants failed to warn any downstream handler defendants of the latent dangers of
MTBE gasoline—and the downstream handlers were indeed reasonably unaware of those
dangers—it will not be able to proceed on its failure to warn claim against those downstream
handlers. See Zenobia, 325 Md. at 437, 601 A.2d at 641 (holding that a seller “is not strictly liable
for failure to warn unless the seller has ‘knowledge, or by the application of reasonable, developed
human skill and foresight should have knowledge, of the presence of the . . . danger’”) (quoting
Restatement, § 402A cmt. j). At this stage, however, dismissal is not warranted.
7-Eleven does not challenge any of the State’s other claims as “inherently contradictory,”
(ECF 336-1 at 3), nor could it. The State sets forth the conduct of the downstream handler
defendants underlying its remaining claims. See, e.g., ECF 2, ¶ 334 (Count III) (“Downstream
Handler defendants’ storage of large quantities of MTBE gasoline in underground storage tanks in
the vicinity of waters of the State used as drinking and/or irrigation water and/or near population
centers with drinking water wells is an abnormally dangerous activity.”); id. ¶ 367 (Count VI)
(“Defendants that are Downstream Handlers and that handled and/or stored MTBE gasoline within
the State breached their duty of care to properly install, maintain and/or operate their underground
storage tanks.”); id. ¶ 387 (Count VII) (“[D]efendants that are Downstream Handlers at oil storage
facilities at which there has been a discharge are persons responsible for the discharge.”).
Accordingly, I reject 7-Eleven’s argument that the Complaint must be dismissed as to
downstream handler defendants on the grounds that it is “inherently contradictory.” ECF 336-1 at
7-Eleven also purports to raise two arguments about causation. First, it asserts that the
market share theory of liability does not apply to downstream handler defendants. ECF 336-1 at
9. Second, 7-Eleven argues that the State may not proceed on its claims of negligence, nuisance,
In a footnote, 7-Eleven argues that the downstream handler defendants “are entitled to
a statutory defense applicable to certain product retailers.” ECF 336-1 at 2. The statute cited by
7-Eleven, C.J. § 5–405(b), provides nonmanufacturing sellers a defense if they establish the
(1) The product was acquired and then sold or leased by the seller in a sealed
container or in an unaltered form;
(2) The seller had no knowledge of the defect;
(3) The seller in the performance of the duties he performed or while the product
was in his possession could not have discovered the defect while exercising
(4) The seller did not manufacture, produce, design, or designate the specifications
for the product which conduct was the proximate and substantial cause of the
claimant's injury; and
(5) The seller did not alter, modify, assemble, or mishandle the product while in the
seller's possession in a manner which was the proximate and substantial cause of
the claimant's injury.
The Court cannot determine from the limited record before it whether any defendants are
entitled to this defense. Accordingly, resolution of this issue is improper at this stage. See
Goodman, 494 F.3d at 464 (citing Forst, 4 F.3d at 250).
and trespass under a commingled product theory against downstream handler defendants. Id. at
I need not address 7-Eleven’s concern about the scope of the market share theory of liability
because, as explained in Section III.C.1, supra, I did not find that the State could in fact proceed
under that theory. 7-Eleven’s argument about the application of the commingled product theory
also falls flat, but gives the Court the opportunity to outline the contours of its causation analysis.
In Section III.C.1, supra, I rejected the argument presented in defendants’ Joint Motion
that the State’s common law tort claims fail because the alleged nature of MTBE gasoline makes
it impossible to link particular defendants to the MTBE gasoline that allegedly contaminated the
State’s waters. I determined that the State could proceed on its tort claims under the commingled
product theory of liability where product identification is necessary for relief. However, product
identification is not a necessary element on the State’s claims for public nuisance, trespass, and
negligence against downstream handler defendants.
Judge Scheindlin explained this distinction as follows in In re MTBE, 415 F. Supp. 2d at
In my prior ruling, I predicted that fifteen states in this consolidated action would
apply the commingled product theory of market share liability (if plaintiffs are
unable to identify the offending product) to claims where product identification is
essential for relief. But plaintiffs and defendants overlook the fact that this theory
is not applicable where product identification is not at issue . . . [P]laintiffs may
proceed on the basis of the commingled product theory against downstream handler
defendants where they allege claims of products liability and failure to warn against
those defendants because those claims also hinge on the identification of the
product. However, where plaintiffs allege claims of negligence, nuisance, and
trespass based on allegations of negligent handling and release of MTBEcontaining gasoline, downstream handler defendants are liable for their actions
regardless of the product's source. These claims do not hinge on the identification
of the product and the commingled product theory of liability is irrelevant.
As Judge Scheindlin made clear, the commingled product theory of liability is irrelevant
to the State’s claims for negligence, nuisance, and trespass against downstream handler defendants.
Those claims are based on their handling and release of MTBE gasoline, not the source of the
product itself. See ECF 2, ¶¶ 345, 356, 367; see also ¶ 207. Therefore, 7-Eleven’s argument about
the scope of the commingled product theory of liability does not support dismissal of any claims.
b. Motion for a More Definite Statement
In the alternative to its motion for dismissal pursuant to Rule 12(b)(6), 7-Eleven moves for
a more definite statement, pursuant to Fed. R. Civ. P. 12(e). ECF 336 at 3–4. Rule 12(e) provides,
in relevant part:
A party may move for a more definite statement of a pleading to which a
responsive pleading is allowed but which is so vague or ambiguous that the party
cannot reasonably prepare a response. The motion must be made before filing a
responsive pleading and must point out the defects complained of and the details
In particular, 7-Eleven seeks a more definite statement from the State that sets forth the
following information: the capacity in which it sues 7-Eleven; when and where the alleged MTBE
releases occurred; the conduct by 7-Eleven that subjects it to liability for any alleged release; and
the type, location, and boundaries of the allegedly contaminated or threatened bodies of water.
ECF 336-1 at 13–19.
The Fourth Circuit has stated that Fed. R. Civ. P. 12(e) “must be read in conjunction with
Rule 8 . . .” Hodgson v. Va. Baptist Hosp., Inc., 482 F.2d 821, 822 (4th Cir. 1973). Pursuant to
Fed. R. Civ. P. 8(a), a complaint must contain three elements:
(1) a short and plain statement of the grounds for the court's jurisdiction, unless the
court already has jurisdiction and the claim needs no new jurisdictional support;
(2) a short and plain statement of the claim showing that the pleader is entitled to
(3) a demand for the relief sought, which may include relief in the alternative or
different types of relief.
Unlike a Rule 12(b)(6) motion, which tests the legal sufficiency of a complaint, a Rule
12(e) motion for a more definite statement focuses on whether “‘a party has enough information
to frame an adequate answer . . .’” Streeter v. SSOE Sys., No. WMN-09-01022, 2009 WL 3211019,
at *10 (D. Md. Sept. 29, 2009) (quoting Doe v. Bayer Corp., 367 F. Supp. 2d 904, 917 (M.D.N.C.
2005)). Such motions are “designed to strike at unintelligibility rather than simple want of detail.
. .” Seneca One Fin., Inc. v. Structured Asset Funding, LLC, No. DKC-10-1704, 2010 WL
4449444, at *2 (D. Md. Nov. 4, 2010) (citation and internal quotation marks omitted). And, they
“are viewed with disfavor, and are rarely granted.” Cellars v. Pac. Coast Packaging, Inc., 189
F.R.D. 575, 578 (N.D. Cal. 1999).
As explained in Federal Practice and Procedure § 1376, 5C Charles Alan Wright, et al.,
(3d ed. 2004):
As the cases make clear, [under Rule 12(e)] the pleading must be sufficiently
intelligible for the district court to be able to make out one or more potentially
viable legal theories on which the claimant might proceed; in other words the
pleading must be sufficient to survive a Rule 12(b)(6) motion to dismiss. At the
same time, the pleading also must be so vague or ambiguous that the opposing party
cannot respond to it, even with a simple denial as permitted by Rule 8(b), with a
pleading that can be interposed in good faith or without prejudice to himself.
Of relevance here, Wright adds: “The class of pleadings that are appropriate subjects for a
motion under Rule 12(e) is quite small.” Id. When the information sought in connection with a
Rule 12(e) motion “is available or properly sought through discovery, the motion should be
denied.” Seneca One Fin., Inc., 2010 WL 4449444, at *2. In addition, if the court is satisfied that
the complaint provides enough information to frame a responsive pleading, “a court should deny
the Rule 12(e) motion and avoid delay in maturing the case.” Doe, 367 F. Supp. 2d at 917.
I conclude that a more definite statement is not warranted in this case. Although the
Complaint lacks abundant detail, it provides defendants with “fair notice of what the . . . claim is
and the grounds upon which it rests.” Twombly, 550 U.S. at 555. The information sought by 7Eleven is available through discovery, and, in fact, defendants are likely in a better position to
know many of the relevant facts, such as the timing and location of any releases of MTBE gasoline
that occurred on their properties. Indeed, in other statewide MTBE cases, the parties have been
directed to work together to identify specific sites and release dates during discovery. See ECF
355-1 (Case Management Orders from MDL).
Therefore, I deny 7-Eleven’s motion for a more definite statement.
For the reasons stated above, I shall grant the PJSC Motion. And, I will grant the Joint
Motion in part, in that I will dismiss the State’s trespass claim to the extent it is based on properties
outside of the State’s possession. The motions are otherwise denied.
An Order follows.
Date: September 4, 2019
Ellen Lipton Hollander
United States District Judge
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