In Re: Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation

Filing 4225

TRANSCRIPT of Proceedings re: conference held on 6/18/2015 before Judge Shira A. Scheindlin. Court Reporter/Transcriber: Andrew Walker, (212) 805-0300. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 7/27/2015. Redacted Transcript Deadline set for 8/6/2015. Release of Transcript Restriction set for 10/2/2015.(McGuirk, Kelly)

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1 F6IKMTBC 1 2 Conference UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x 3 4 IN RE: METHYL TERTIARY BUTYL ETHER ("MTBE") PRODUCTS LIABILITY LITIGATION 5 6 00 MDL 1358 00-cv-01898 04-cv-04968 07-cv-10470 14-cv-06228 (SAS) (SAS) (SAS) (SAS) ------------------------------x 7 June 18, 2015 2:30 p.m. 8 Before: 9 HON. SHIRA A. SCHEINDLIN, 10 District Judge 11 APPEARANCES 12 13 14 15 16 17 18 19 20 21 22 23 MILLER, AXLINE & SAWYER Attorneys for Plaintiffs BY: MICHAEL D. AXLINE, ESQ. DUANE MILLER, ESQ. JACKSON GILMOUR & DOBBS, PC Attorneys for Plaintiffs BY: JOHN D.S. GILMOUR, ESQ. WEITZ & LUXENBERG, P.C. Plaintiffs' Liaison Counsel BY: WILLIAM A. WALSH, ESQ. COHN LIFLAND PEARLMAN HERRMANN & KNOPF LLP Attorneys for New Jersey Plaintiffs BY: LEONARD Z. KAUFMANN McDERMOTT, WILL & EMERY Attorneys for Defendants Exxon Mobil Corp. and Defendants' Liaison Counsel BY: JAMES A. PARDO, ESQ. ANTHONY A. BONGIORNO, ESQ. STEPHEN J. RICCARDULLI, ESQ. 24 25 SEDGWICK LLP Attorneys for Defendant Mobil Oil Corporation BY: PETER C. CONDRON, ESQ. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 2 F6IKMTBC 1 2 3 Conference APPEARANCES (Cont'd) ARCHER & GREINER PC Attorneys for Defendant Exxon Mobil Corporation BY: CARLOS BOLLAR WILLIAM STACK, ESQ. 4 5 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP Attorneys for Defendant Exxon Mobil Corporation BY: JEFFREY J. PARKER, ESQ. 6 7 AKIN, GUMP, STRAUSS, HAUER & FELD, LLP Attorneys for Defendant Lukoil Americas Corporation BY: JAMES P. TUITE, ESQ. 8 9 KING & SPALDING LLP Attorneys for Defendant Chevron BY: JEREMIAH ANDERSON, ESQ. 10 11 EIMER STAHL KLEVORN & SOLBERG Attorneys for Defendant Citgo Petroleum Corporation BY: PAMELA HANNEBUT, ESQ. 12 13 14 ARNOLD & PORTER LLP Attorneys for Defendants Atlantic Richfield Company, BP Products North America Inc., Atlantic Richfield Company, BP Products North America, Inc. BY: STEPHANIE WEIRICK 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 3 F6IKMTBC 1 2 Conference THE COURT: All right, hello. I'll read the names. I have Mr. Ehrlich. 3 MR. EHRLICH: 4 THE COURT: 5 MR. DUNHAM: 6 THE COURT: 7 Ms. Cameron? 8 9 10 Yes, your Honor. Mr. Dunham. Yes, your Honor. Mr. Cameron? Is there a Mr. or Camerson. MR. McMANUS: McManus. Who is on the phone? Hello, your Honor. This is Keith I work with Mr. Camerson, and he won't be joining us today. 11 THE COURT: That's helpful to know. 12 Mr. Cepeda Diaz? 13 MR. CEPEDA DIAZ: 14 THE COURT: 15 MS. MALDONADO: 16 THE COURT: 17 Mr. Couret? 18 MR. COURET: 19 THE COURT: Ms. Smitha or Ms. Smith? 20 MS. SMITH: Yes, your Honor. 21 THE COURT: Ms. Hirsch? 22 MS. HIRSCH: 23 THE COURT: 24 MR. CARTER: 25 THE COURT: Yes, I'm here, your Honor. Ms. Maldonado? Yes, your Honor. Good afternoon. Good afternoon. Yes, your Honor. Good afternoon. Yes, your Honor. Mr. Carter? Yes, your Honor. Ms. Farley? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 4 F6IKMTBC Conference 1 MS. FARLEY: 2 THE COURT: 3 MS. HALL: 4 THE COURT: Mr. Covey? 5 MR. COVEY: Yes, your Honor. 6 THE COURT: And Mr. McCall? 7 the phone? 8 Good afternoon, your Honor. Ms. Hall? Yes, your Honor. Duke McCall? Is there a Mr. McCall on No? Okay, so the folks on the phone, I think, are just 9 going to be listening in but will not be participating because 10 there's a lot of lawyers in the room; it would be difficult to 11 have the participation. 12 goes on. 13 hear. So I hope you can hear most of what I'll ask the lawyers to speak up and hopefully you'll 14 So we have Mr. Walsh? 15 MR. WALSH: Good afternoon, your Honor. 16 THE COURT: Good afternoon, Mr. Axline. 17 MR. AXLINE: 18 THE COURT: 19 MR. MILLER: 20 THE COURT: 21 MR. GILMOUR: 22 THE COURT: 23 MR. PARISI: 24 THE COURT: 25 MR. PARISI: Good afternoon, your Honor. Mr. Miller. Good afternoon. Mr. Gilmour. Good afternoon, your Honor. Mr. Parisi. Good afternoon. That's it for the plaintiffs' side, right? No, I'm not on the plaintiffs' side. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 5 F6IKMTBC 1 Conference THE COURT: Oh. The way they put it on the seating 2 chart, it looked that way. Okay. So, for the plaintiffs, 3 there are four lawyers here, that's it, right, Walsh, Axline, 4 Miller, Gilmour? 5 MR. AXLINE: Correct. 6 THE COURT: Mr. Pardo. 7 MR. PARDO: Good afternoon, your Honor. 8 THE COURT: Mr. Bongiorno. 9 MR. BONGIORNO: Good afternoon, your Honor. 10 THE COURT: Mr. Riccardulli. 11 MR. RICCARDULLI: 12 THE COURT: 13 MR. PARKER: 14 THE COURT: 15 MR. ANDERSON: 16 THE COURT: Mr. Tuite. 17 MR. TUITE: Good afternoon, your Honor. 18 THE COURT: I'm sorry, I'm having trouble with that. 19 Mr. Stack. 20 MR. STACK: Yes, your Honor. 21 THE COURT: Good afternoon. 22 Mr. Bollar. 23 MR. BOLLAR: 24 THE COURT: 25 MS. HANNEBUTT: Good afternoon, your Honor. Mr. Parker. Good afternoon, your Honor. Mr. Anderson. Good afternoon. Good afternoon. Good afternoon, your Honor. Ms. Hannebutt. Good afternoon, your Honor. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 6 F6IKMTBC Conference 1 THE COURT: Mr. Condron. 2 MR. CONDRON: 3 THE COURT: 4 MS. WEIRICK: 5 THE COURT: 6 MR. PARISI: 7 THE COURT: Good afternoon, your Honor. Ms. Weirick. Good afternoon, your Honor. Now Mr. Parisi. Good afternoon. Everybody else who's here, if any of you 8 do end up speaking -- and I recognize many of you -- please, 9 everybody, be sure to state your name each time. It's 10 difficult for the court reporter. 11 but he doesn't, so each time, stand and say, "this is 12 Mr. Axline and" or "this is Mr. Pardo and" each time, so we get 13 a pretty clear record. 14 I know you folks for years We actually have a fair amount of business today, and 15 I hope to move through it as efficiently as possible. 16 starting with Pennsylvania. 17 final preparation of the case management order, and there is 18 some disagreement as to language and not just language but what 19 has to be done by whom and when. 20 through all of that. 21 I am There are questions about the And so I will try to move There's a disagreement in proposed section 2(a) 22 regarding MTBE release site lists, and defendants want the CMO 23 to require plaintiff to identify every release, a site report 24 of the commonwealth or of which the commonwealth is otherwise 25 aware. And the commonwealth wants to limit the list to only SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 7 F6IKMTBC 1 2 Conference those reported to it. It seems to me this is a small disagreement and can be 3 resolved by the following language: 4 plaintiff shall identify every release site reported to the 5 commonwealth or which the commonwealth discovered through its 6 own investigation." 7 it's too vague. 8 the commonwealth discovered through its own investigation." 9 either reported to it or you've already discovered it and 10 you've probably made a record of that somewhere if you've 11 discovered it, but I'm not going to "aware of" to it. 12 And that's it. "By December 31st, 2015, Forget the word "aware"; So I'd be happy to read that again. "Or which So All right, next, there's a disagreement about potable 13 wells with MTBE detections. 14 that the commonwealth needs to identify every well that has a 15 detection or even, I guess, that could have a detection. 16 Plaintiff says, you know, unlike a lot of these cases, we don't 17 own or operate these wells, and if we were to go out and be 18 required to test every well, there are a million of them, and 19 that would be $100 million spent, and we don't think we should 20 have to do that. 21 And the defendants' position is And there's a dispute about who's going to pay for 22 that too. The defendants say in their letter, whether 23 plaintiff can recover from the cost of searching out and 24 sampling wells is an issue for another day. 25 well, not really, not if you're going to tell me I've got to go Plaintiffs say, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 8 F6IKMTBC 1 2 Conference out and do a million wells at the cost of a million dollars. So I think the answer to this at this time is that 3 plaintiff only needs to identify the information that is 4 currently in its possession, custody or control. 5 usual rule in discovery. 6 that which does not exist. 7 That's the They don't have to create a record of So if they have a documentation in their possession, 8 custody or control, that has to be defined carefully, regarding 9 wells that have detections or have been tested or have no 10 detection, whatever it is, they have to turn over such records, 11 but they're not directed that they're required to test a 12 million wells. 13 Now, whether there is going to be a question down the 14 road as to whether by not identifying something they will have 15 waived a claim, I think that is an issue for another day. 16 other words, if they're not aware of a detection and a 17 detection occurs six months from now or five years from now, 18 that may be a new and timely claim. 19 on that issue, as to whether by their failing to identify a 20 particular well today they have waived a claim forever. 21 In So I'm not about to rule I can say on the record that I doubt it, that if and 22 when they detect something, a claim may materialize at that 23 time, but that's not a ruling, that is my inclination, but it 24 may not be for me. 25 could occur 30 years from now, who knows, but that's my ruling Who knows when that is going to occur? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 It 9 F6IKMTBC 1 Conference for now on the wells issue. 2 The third dispute at section 2(c) has to do with 3 really a related issue: Defendants want the plaintiff to 4 produce the maximum and most recent MTBE detection data for 5 each release site and each well. 6 that the plaintiff gives is that defendants actually have done 7 MTBE sampling for release sites that they own or operate. 8 So I think the ruling is directed to both sides: Now, I think one response 9 Everybody has a date that you will negotiate and pick for the 10 CMO, at which they have, to both sides have to, identify the 11 maximum and most recent MTBE detection date or for each release 12 and each well, to the extent that they have possession, custody 13 or control over such a record. 14 So if the defendants own and operate -- you know the 15 rule: If you want to confer, raise your hand, say, can I 16 please confer? 17 while I'm speaking. 18 break. Because I find it distracting for you to confer If you want a moment, I'm happy to take a You want a moment? 19 MR. BONGIORNO: Sorry, your Honor. No. 20 THE COURT: 21 In any event, both defendants and plaintiff are If you need one, just say so. 22 directed to identify any record they have of any sampling data 23 period. 24 they own and operate. 25 that are reported or which they investigated, and it can be the So, for the defendants, it will probably be the sites For the plaintiff, it would be those SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 10 F6IKMTBC 1 Conference same date. And that advances the ball for everybody. 2 CMO4 declarations -- and I'm using your language as a 3 shorthand but I think the lawyers here know what that means -- 4 the plaintiffs wants to at a provision that requires the 5 defendants to produce CMO4 declarations regarding information 6 on the shipment and distribution of gasoline into and within 7 Pennsylvania to sort of, how shall I say it, aid everybody in 8 getting things identified. 9 reliable way to identify release sites is through a review of 10 the Department of Environmental Protection's site remediation 11 files and the Underground Storage Tank Indemnification Fund 12 files, USTIF, and I agree that that is good. 13 The defendants say, well, the most So the plaintiff, commonwealth, must review the DEP 14 files, the USTIF files, and I think you knew that, but the 15 question is: 16 declarations? 17 is timing. 18 Do the defendants have to do the CMO4 And I think the answer is yes. The only issue One could say, oh, sure, eventually defendants have to 19 do it, but why does it have to be part of the CMO, because the 20 CMO should be settling a schedule all around? 21 that date may be further out than a date for more easily 22 accessible information, but it has to be done. 23 these declarations should be filed, but you need to negotiate 24 when in the process. 25 going to be asked to do those declarations; you've done them in So I realize So I do think Eventually, I'm sure, you knew you were SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 11 F6IKMTBC 1 Conference other cases. 2 So it's only a matter of when. And I'm not ordering a 3 date right now. 4 it through, figure out who goes first, what's logical. 5 already said that the records from DEP and USTIF are probably 6 more readily available and should come first. 7 mean you shouldn't work out these declarations eventually. 8 I've explained where you should. 9 I'm telling you, put it in, work it out, talk And I But that doesn't You want to say something, Mr. Pardo? 10 MR. PARDO: I wanted to ask for your permission just 11 to confer for five seconds. 12 THE COURT: 13 (Pause) 14 MR. PARDO: Thank you. 15 THE COURT: Okay. 16 Now, motion to amend the complaint: Okay, good. So we go on. Now, here, the 17 commonwealth wants to file a motion to amend the complaint. 18 The first thing I'd like to do, at all costs, is avoid another 19 motion. 20 we could here. 21 I'd like to just talk about amending the complaint, if First of all, they want to amend the USTIF claim, and 22 I already said they could. 23 have things to add to that claim, I dismissed it with leave to 24 replead, so you have leave to replead that. 25 I put it in the opinion, if you That's easy. Then you want to add two new corporate entities SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 12 F6IKMTBC Conference 1 related to LUKOIL. 2 LUKOIL, you want to add a fraudulent transfer claim against 3 LUKOIL America and new defendants, LUKOIL North America and 4 LUKOIL Oil Company and individual defendants, again, and they 5 you want to beef up the veil-piercing claim to include 6 additional allegations. 7 And to individual defendants related to Some of these seem yes, and some of these seem no. I 8 think the short answer is: 9 conveyance claim because 11, U.S.C., Section 544(b) says that 10 the trustee in bankruptcy has exclusive right to bring such an 11 action, and did, and it's done, and the plaintiff can't do it 12 because their trustee did it. 13 straightforward. 14 out because it was done by the liquidating trustee in the GPM 15 bankruptcy. 16 It is futile to add a fraudulent So I think that's pretty I think the fraudulent conveyance action is So, as far as the veil-piercing, yes, I don't see why 17 you can't beef up allegations. 18 It doesn't mean you're winning anything, but everybody should 19 always plead the best and fullest complaint they can. 20 you have new allegations, you should put them in. 21 says, under Maryland law, you're never going to prevail. 22 I'm not prepared to decide that. 23 fully briefed. 24 25 It's just an amended complaint. So, add the allegations. So if I know LAC But I'll decide that when it's They'll move to dismiss that claim under Maryland law, and if they're right, they'll win and SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 13 F6IKMTBC Conference 1 that's the end of it. But you might as well plead the best set 2 of claims you can. 3 add veil-piercing claims. So I have no problem with your amending to 4 I also note that it might be actually direct liability 5 that you're now pleading as to LUKOIL North America LNA because 6 you say you've discovered evidence that they may have directly 7 owned sites. 8 add that. 9 10 If you haven't, you haven't, so you can certainly I already mentioned fraudulent conveyance, no? I think that's it. 11 Well, then the individual defendants wouldn't be 12 added. If you can't add the fraudulent conveyance claim, you 13 aren't going to be adding the individuals either. 14 actually, I think I just talked of everything but Pennsylvania. 15 Now that I did, anybody want to say anything? 16 UNIDENTIFIED SPEAKER: 17 THE COURT: Yes. A person on the phone does? 18 folks were just observing. 19 So, Who said yes? I thought you Maybe she wasn't speaking to me. 20 Anybody present in the courtroom want to say anything 21 about Pennsylvania, or did I take care of the problem for now? 22 Mr. Miller? 23 MR. MILLER: 24 25 Good afternoon, your Honor. substantially helped us. THE COURT: Good. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 You've 14 F6IKMTBC 1 Conference MR. MILLER: But I need to explain something. It may 2 relate to timing, it may relate to the ultimate form of how we 3 approach the problem. 4 We have -- the Department of Environmental Protection 5 has approximately 16,000 reported releases and tens of millions 6 of documents concerning those releases located at six different 7 facilities, each of which resembles a warehouse. 8 documents, there are undoubtedly references to detections of 9 MTBE in a well. Within those The time required to review tens of millions 10 of documents to find each private well that was near a service 11 station and was tested by the environmental consultant, which 12 had nothing to do with the state other than the fact that these 13 investigations must be reported to the state -- we weren't 14 running the investigation. 15 16 17 THE COURT: Let me interrupt. These are not electronically searchable? MR. MILLER: We could scan all those documents. We 18 certainly intend to make the documents available if the 19 defendants want to copy them, but even if we scan them -- let's 20 say we scan for MTBE as a term -- 21 22 23 THE COURT: Then could you OCR? Could you do it just by looking for the word? MR. MILLER: Let's say you scan for MTBE for a well. 24 All the monitoring wells would show up being referred to on 25 every page. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 15 F6IKMTBC 1 Conference So unless they use the term "private well," which 2 seems unlikely, they may use a name for it like the property 3 owners, it would be very difficult even if we scanned every 4 document and did discrete searches. 5 about reading every page. So we're literally talking The burden is extraordinary. 6 THE COURT: Burden? 7 MR. MILLER: Yes. 8 There is a solution. 9 I don't think that -- given the number of wells we're talking about, a million private wells, 10 only half of which, 450,000, we know the location, I don't 11 think we're going to ever -- 12 THE COURT: 13 thing. 14 I'm sorry, I didn't understand the last Does that mean you don't know the location of the other 550,000? 15 MR. MILLER: 16 THE COURT: 17 MR. MILLER: 18 19 20 That's correct. Oh, okay. Go ahead. They're historical wells before the registration program was started. THE COURT: Now I understand the statement. You know the location of only 450,000 of 1 million? 21 MR. MILLER: Yes. 22 I don't think we're ever going to have a day when we 23 present individual evidence on each private well that was 24 impacted by MTBE and which station did it, and we can still 25 make a valid claim. I'm going -- SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 16 F6IKMTBC Conference 1 THE COURT: 2 MR. MILLER: A claim for what? For -- let's just talk about New 3 Hampshire for just a moment because they presented their 4 evidence in three months, not three plus years, which would be 5 a discussion of individual gas stations, every single one in 6 Pennsylvania and every well, you're talking about a trial in 7 inestimable length. 8 THE COURT: 9 10 But we have not been doing that. We've tried to do a bellwether type trials anyway or focused case type trials anyway. 11 MR. MILLER: Yes. This comment I'm about to make 12 doesn't relate to a bellwether trial, which is clearly much 13 shorter. 14 issue and a statewide claim proceeds against those who have not 15 settled? 16 But what if the bellwether trial doesn't resolve the In that event, what New Hampshire did in their case is 17 they presented evidence that they took a statistically 18 representative subset of private wells and used the results 19 from that subset to estimate scientifically and accurately, in 20 our view, the total damage statewide, and they didn't need to 21 go out and test every well in New Hampshire, because if you do 22 a representative sample and say 12 percent of the wells have 23 MTBE in it, you can apply that percentage to the total. 24 They did -- 25 THE COURT: That sounds good for damages, but not for SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 17 F6IKMTBC 1 Conference remediation. 2 MR. MILLER: Remediation is a smaller group. 3 16,000 releases. So that's easier to do. 4 We have It's a different issue, but at the moment, I'm talking about wells. 5 So if we go and spend unbelievable effort and a lot of 6 money to identify individual wells, will it affect the trial if 7 we have a strategy to do a trial in a more reasonable period of 8 time that focuses on a statistical approach to estimating the 9 damage claim? I can't see how it will ever help them. 10 THE COURT: 11 MR. MILLER: How it will ever? Help them understand our claim. That's 12 going to become very clear when the experts testify. 13 can talk about how to approach the problem of making sure that 14 that expert's testimony is adequately previewed with the 15 defendants so they can prepare for it. 16 issue. 17 And we That's a separate But the idea of developing a comprehensive list by 18 going through tens of millions of pages, reading until you go 19 blind, trying to find a single entry that is very difficult to 20 identify electronically through scanning the documents, which 21 even if we did that, we could not possibly do it in 2015, even 22 if we were lucky in the electronic interpretation of the 23 records. 24 25 So I'm suggesting to you that at this point in time, if you require us to do a list, we need a much longer time SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 18 F6IKMTBC Conference 1 period, and I'm suggesting that doesn't further the case, it 2 doesn't help the defendants. 3 consultants that tested those private wells, frankly, in many 4 of the release sites. 5 that information. 6 THE COURT: They are the ones who hired the Not all, but many. So they already have Well, couldn't there be a combination of 7 ideas? One, you have the statistical sampling type proof from 8 the point of view of proving damages, but you're always going 9 to have to try some releases and the wells that are impacted, 10 and that's a matter of focus -- well, focus releases that we've 11 done before in other cases, and then all the wells associated 12 with focused releases, so to speak, I think, as we call them 13 focused sites, but then on those wells, you'd have to produce 14 it. 15 MR. MILLER: If we decide with the Court, whatever you 16 order, to do focused sites, there's no question in my mind 17 that's a manageable burden. 18 THE COURT: 19 MR. MILLER: 20 21 that. We can identify the wells -- Right. -- given adequate time, and we can do That's not what I'm discussing. THE COURT: No, no. You would have a combination of a 22 statistical approach, but you'd also have a number of sites 23 where you fully discover every well you say is impacted as a 24 result of the release of that site, every well. 25 instances, whether it's 20, or 40, or however many we choose, SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And in those 19 F6IKMTBC Conference 1 then you have to go for every well in the focus sites, and you 2 say you can do it? 3 MR. MILLER: Yes. 4 THE COURT: Right. 5 Mr. Pardo. 6 MR. PARDO: No question. That's manageable. Okay. Your Honor, before we get too far down 7 that road, I want to make sure I know you're not ruling today, 8 there's no ruling here, I haven't heard any ruling. 9 THE COURT: You haven't heard any rulings, but you 10 heard some rulings. 11 MR. PARDO: No, no, no, on this issue -- 12 THE COURT: Okay. 13 MR. PARDO: -- of statistical extrapolation. 14 THE COURT: Correct. 15 MR. PARDO: I just want to be clear. We're taking 16 about New Hampshire. As you, I think, know, that case is up on 17 appeal right now. 18 extrapolation is a constitutionally fair way to determine 19 damages, nor to determine any of the other issues that have 20 always been the subject of normal discovery, normal proofs in 21 this case, causation -- And we do not believe that statistical 22 THE COURT: Is that one of the issues on appeal? 23 MR. PARDO: It is. 24 THE COURT: Statistical sampling was the right 25 approach? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 20 F6IKMTBC Conference 1 MR. PARDO: That is one of the issues. 2 THE COURT: Where is this pending, the highest court 3 4 5 of New Hampshire? MR. PARDO: your Honor. Correct. New Hampshire Supreme Court, Correct, your Honor. 6 THE COURT: Where is that up to? Argument, brief? 7 MR. PARDO: Just argued. 8 THE COURT: Argued? 9 MR. PARDO: So I know you haven't ruled on this. This 10 would be something that it would be a sea change from how we've 11 done the cases for many, many years on this MDL, and I would 12 respectfully submit that if we were even thinking of going in 13 that direction, we ought to have briefing -- the opportunity to 14 brief you on this because there are, in our view, some serious 15 constitutional -- 16 THE COURT: Well, it's also interesting to know what 17 the New Hampshire Supreme Court has to say. Since it's been 18 argued, it would be interesting to see how it comes out. 19 MR. PARDO: But I've heard -- 20 THE COURT: Also, the numbers here might far surpass 21 New Hampshire. Pennsylvania is a big state. And even if it 22 was acceptable there, which is not what you hope will be the 23 outcome of the appeal, but even if it is, you would still have 24 an argument here that it's a different case anyhow. 25 understand you certainly don't want that issue to be decided SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 So I 21 F6IKMTBC 1 Conference without full briefing. I understand that. I understand that. 2 MR. PARDO: Right. 3 Now, we know, or I guess plaintiff knows, where 4 450,000 of these private wells are. 5 that I guess they don't. 6 where those wells are, maybe they shouldn't be in this case, 7 okay. 8 maybe those are the private wells they start with. 9 There's another 550,000 I would submit if they don't know But for the 450,000 that they do know where they are, THE COURT: But did you hear the numbers? Even if it 10 was half of the numbers that Mr. Miller described, it's a huge 11 number of records, huge, and from the plaintiffs' perspective, 12 and maybe even mine, we'd all like it to be done within our 13 lifetime. 14 Now, you're younger than I am, so your lifetime is 15 longer, mine is shorter, so I want to get it done, and so 16 that's the problem. 17 Mr. Miller said is a long, long task and very extensive. 18 issue is does it have to be done. 19 site approach with the associated wells. 20 got another suggestion for statewide statistical proof, which 21 apparently was used in New Hampshire. 22 actually, about it except what I heard today. 23 Even 45 percent of the numbers that The We've always taken the focus Now he's saying he's I know nothing, So I don't know whether that's a good idea or not, and 24 what a state high court is at least going to tell us doesn't 25 bind me, but it would be interesting to know. But we could SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 22 F6IKMTBC Conference 1 certainly start with the focus approach and find some way to 2 select geographically, let's say, around the state of 3 Pennsylvania, so we can get all the different kinds of areas, 4 you know, urban, suburban, rural, near water, not near water, 5 however you wanted to choose 50 or whatever sites, and start 6 with that. 7 he's got to do it for 450,000 sites of which he knows the 8 location, it may be the burden outweighs the benefit at this 9 point. 10 That's what we've done before. But to tell him So you're right that I'm not ruling, but I probably 11 said enough to give both sides a lot to talk about in any 12 meet-and-confer on how to continue, and then if you're at an 13 impasse, and they insist on this sampling idea and want to 14 start briefing even before the New Hampshire high court rules, 15 so be it, it will have to be briefed because I don't know 16 anything about the technique and why it would be valid or 17 wouldn't be valid. 18 19 I assume there were experts in that case that said it was valid? 20 MR. MILLER: 21 THE COURT: 22 Yes, your Honor, of course. Sure. But there were defense experts who said it wasn't? 23 MR. MILLER: Of course. 24 THE COURT: 25 No, I understand that. Sure. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 23 F6IKMTBC Conference 1 MR. MILLER: It's all predictable. 2 THE COURT: Yes. 3 MR. PARDO: For me, your Honor, and maybe for some of 4 the other defendants, this is not what you're doing, but it's a 5 little frustrating to hear this, because, of course, we have a 6 complaint in this case that alleges that there are private 7 wells that have been impacted. 8 9 THE COURT: Oh, but there are. private wells that have been impacted. They know there are They don't know how 10 many, they don't know how many locations. 11 there are -- it's a correct statement that there are private 12 wells that have been impacted. 13 So that's the issue. 14 private well in the State of Pennsylvania? 15 MR. PARDO: They surely know It doesn't mean all 1 million. They say -- did they plead each and every No. I understand. But let me generally push back on that. 16 They say that, and we say we know that to be true, but I don't 17 know that to be true. 18 THE COURT: Wait, wait. 19 generalities. 20 that's been impacted? 21 I haven't seen that. You're talking in You don't know that there's any private well You think it could be zero? MR. PARDO: Well, it could be. 23 THE COURT: I doubt it, too. 24 MR. PARDO: Of course. 22 25 I doubt it, to be honest. But my point is he has to know -- to assert that in his complaint, he has to know that SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 24 F6IKMTBC 1 Conference there are wells out there that have been -- 2 THE COURT: I'm sure he does know there are wells, the 3 question is does he know about 20, or a hundred thousand, or 4 700,000? 5 there are some. 6 I don't know what he knows, but I'm sure he knows Now, the question is, how many does he have to tell 7 you about now, or does he have to research, does he have to go 8 through -- what was it? 9 locations? How many millions of documents in six 10 What was that number? 11 MR. MILLER: 12 Tens of millions. I can't give you a precise number. 13 THE COURT: Tens of millions is good enough. 14 So there's tens of millions of pieces of paper, 15 there's six locations. 16 electronic at this point. 17 They're paper, they're not even That's what I know. So he could do it at great cost and delay, but you 18 know those twin words, cost and delay, are what we try not to 19 do. 20 taken that would eliminate undue cost and delay. So I'm trying to see if there's an approach that can be 21 And, actually, identifying every single private well 22 that's been impacted seems to me almost a tactic to make sure 23 litigation can't move at all. 24 tactical, I get that, but let's see if there's a solution that 25 works, and I think you think it's not statistical sampling. So -- okay, you're paid to be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 25 F6IKMTBC Conference 1 MR. PARDO: I'm certain it's not. 2 THE COURT: Well, from the defense point of view, I 3 know your position, I'll be curious what the New Hampshire 4 Supreme Court -- and it could go higher than that. 5 event, that's for another day. 6 7 The focus approach, though, we have used repeatedly in this litigation, so I think you need to talk to each other. 8 9 But in any MR. MILLER: Your Honor, I'm happy to confer with counsel, and as soon as we identify the focus sites, I think we 10 can work on a good description of what we owe them. 11 generally consistent with what we've done in the past. 12 shouldn't be hard for us to work out. 13 14 THE COURT: It will be It I think we took that approach in New Jersey, which is also a big state. 15 MR. MILLER: Yes. 16 MR. PARDO: We'll be happy to talk. 17 THE COURT: That's all we can do today because like 18 you, Mr. Pardo, I didn't know this argument was coming about 19 this sampling, and how it was done in New Hampshire, and the 20 experts. I'm just not up to speed. 21 MR. PARDO: Fair enough. 22 THE COURT: Which does take us to New Jersey. 23 MR. AXLINE: 24 THE COURT: 25 MR. AXLINE: I'm sorry, your Honor. Go ahead, Mr. Axline. There was one other point which you SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 26 F6IKMTBC Conference 1 touched on that I'd like to respond to, and that's the 2 fraudulent transfer. 3 THE COURT: Oh, I didn't touch on that. I think I 4 said it was over because the trustee brought the action, and 5 under the bankruptcy statute, exclusive jurisdiction and 6 whatever, that's it. 7 MR. AXLINE: 8 the defendants for the first time in their reply letter -- 9 10 So under 544(b), which was cited to us by THE COURT: Is that the bankruptcy statute that I cited? 11 MR. AXLINE: Yes. 11 U.S.C. -- 12 THE COURT: 13 MR. AXLINE: 14 The entities that we want to sue for fraudulent 544(b), there it is. Yes. 15 transfer are not the bankrupt party, they are the other 16 entities that were not involved in the bankruptcy that 17 participated in the fraudulent transfer. 18 is to ask for a little time to look at this issue more closely 19 and perhaps submit a short letter brief to you on the question 20 of whether 544(b) applies to claims against nonbankrupt 21 parties. 22 THE COURT: I guess what I'd like I think that's only fair. That was raised 23 at the end, and I even had in my notes to ask you if you could 24 show me why that doesn't foreclose it, and that's exactly what 25 you're saying, give me a little while to write a letter SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 27 F6IKMTBC Conference 1 researching this point and explain why it may not foreclose 2 this action. 3 raises the same issues, and it was brought by the liquidating 4 trustee in the GPMI bankruptcy. 5 saying, that these were not bankrupt entities, but it may be 6 that the action raised the same issues, I don't know. But it was a fraudulent conveyance action, which So I understand what you're 7 And you, Mr. Tuite? 8 MR. TUITE: Tuite. 9 THE COURT: Tuite, I know that. 10 MR. TUITE: Thank you, your Honor. I know that. On behalf of 11 LUKOIL Americas Corporation, we don't have any problem with his 12 submitting a brief -- 13 THE COURT: He said a letter for now. 14 MR. TUITE: -- a letter brief, but I do want to point 15 out that the same parties they want to sue in this action were 16 the parties that were sued in the bankruptcy court. 17 THE COURT: That's what I thought. They may not have 18 been in bankruptcy, but they were the same parties that the 19 liquidating trustee moved against. 20 really the same action. I thought so. I think it's 21 But, Mr. Axline, to his credit, said let me look at 22 this action in the next few days, let me research it and dig 23 down, and see if I can make the argument or not. 24 if his research tells him he can't, he won't, but he hasn't had 25 really a chance to respond to the statutory argument that says SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And I guess 28 F6IKMTBC Conference 1 that a fraudulent conveyance claim is foreclosed. 2 He may reach that conclusion, I don't know. 3 MR. TUITE: Thank you, your Honor. 4 THE COURT: If he doesn't reach that conclusion, not 5 surprisingly, and you need to submit a surreply, so to speak, 6 letter, that's okay because I want to understand the issue. 7 And then we talk about it anyway, that's not a full briefing, 8 it's letters. 9 days. And we all like to learn things in the law most So we'll see. 10 Yes, Mr. Bongiorno? 11 MR. BONGIORNO: Thank you, your Honor. Before we move 12 on, might I confer with Mr. Pardo on a couple of things before 13 we say all set? 14 THE COURT: 15 MR. BONGIORNO: 16 (Pause) 17 MR. BONGIORNO: 18 Honor. Yes. Thank you. Thank you for indulging us, your We are now all set. 19 THE COURT: 20 So we go to New Jersey. 21 22 Good. Okay. I went back to the bankruptcy statute. All right. The New Jersey plaintiffs also want to add 23 this same fraudulent transfer claim, and I think it's the 24 identical issue, whether you're foreclosed by the trustees -- 25 liquidating trustees' action in the GPMI bankruptcy. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 You may 29 F6IKMTBC Conference 1 well be, so I think you need to confer with Mr. Axline and 2 together decide whether there's a letter to be written or 3 whether you concede the point. 4 MR. KAUFMANN: 5 plaintiffs. 6 counsel for New Jersey. 7 8 9 So that's fair? Leonard Kaufmann, for New Jersey Thank you, your Honor. THE COURT: Yes, Mr. Axline is also So we certainly will do that. Thank you. So I won't say more about that today. On the other hand, LNA, which is LUKOIL North America, 10 the plaintiff now believes they have direct liability because 11 of new discovery that it owned sites in New Jersey in which 12 there's been releases. 13 that they think they have proof of a direct liability, you can 14 amend to add that. 15 So to the extent that there's proof -- So as I understand the amendment, the fifth amended 16 complaint would only be with respect to LNC and related 17 entities, and now at this point in time, the commission is only 18 as to direct liability. 19 transfer issue? You'll be discussing this fraudulent 20 MR. KAUFMANN: Leonard Kaufmann. Yes, your Honor. 21 THE COURT: 22 And then the only other New Jersey issue -- thank you Okay, good. 23 for coming for such a short time, but the only other issue with 24 you folks is that you agree that a number of documents were not 25 docketed, you're going to create a joint list, apparently some SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 30 F6IKMTBC Conference 1 CMOs were not, some pretrial orders, some letter briefs, and 2 you jointly requested they be added to the docket, and, of 3 course, I agree with that. 4 with your joint list, and we'll add them. So all you've got to do is come up 5 THE LAW CLERK: 6 THE COURT: 7 That takes us to the Orange County Water District. 8 This one is also in the process of being remanded, and 9 They have them. Oh, they have them. there are a couple of issues. I didn't know that. One, I think, is minor, one is 10 far more major that has to do with the declaratory relief, 11 we'll get to that in a minute. 12 that I think is somewhat minor, defendants want to add a 13 sentence that says something like, "All other claims for relief 14 were either decided against plaintiff or stipulated as 15 dismissed on the terms set forth in the applicable stipulations 16 subject to the right of appeal, so no other claims or 17 defendants remain at these sites for the purposes of trial 18 after remand." But with respect to the one 19 The plaintiff opposes that sentence saying it would 20 cause confusion because there's some rights that's not being 21 remanded instead of what is being remanded. 22 defendants on this one. 23 think it clarifies for the judicial panel what claims and what 24 defendants remain in the case. 25 be added. I side with the I don't think it creates confusion. I No confusion, I think it should SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 31 F6IKMTBC 1 2 3 Conference Who am I looking at? easier one. OCWD. So I think that's the You'll leave with that, and that's the ruling. Now, the bigger one. This whole question about 4 declaratory relief and the history of what this Court has said 5 on different occasions apparently has caused a great deal of 6 confusion. 7 action, I'm filing an action for declaratory -- no, for 8 declaratory judgment. Standard cause of action, we used to 9 call it a DJ action. And then declaratory relief is also an Declaratory relief was brought as a cause of 10 available remedy in many cases, and we don't usually find it 11 until the back end of a complaint saying, and we seek a 12 declaration that as a remedy. 13 between a cause of action and a remedy, although I'm not sure 14 it has a whole lot of real meaning. 15 So I understand the difference But in any event, in 2006, I authored an opinion which 16 dismissed the cause of action for declaratory relief entitled 17 "Cause of Action: 18 for that dismissal was I said, well, that remedy was available 19 under the Orange County's common-law causes of action, so it's 20 essentially duplicative. 21 clarification and I wrote: 22 of action are determined to require declaratory relief, such 23 relief remains available under those causes of action." 24 then later down the road, in 2011, now five years after the 25 first ruling, I wrote: Declaratory Relief Act Claim," but the basis And then OCWD asked for a "If any of OCWD's remaining causes And "The claims that survived included SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 32 F6IKMTBC Conference 1 declaratory relief with respect to future expenses OCWD may 2 incur." 3 Now, that is a classic use of declaratory judgment, 4 you know, I want a declaration that for future expenses, the 5 defendants have to pay for. 6 nuisance or being duplicative, it's a classic declaratory 7 judgment claim, and I said that one of the claims that survived 8 is declaratory relief with respect to future expenses. 9 It's got nothing to do with Then there was CMO116, that is 116, written in July of 10 2014, and that CMO set forth the remaining claims and which 11 defendants were at each focus site as of that date, July 16, 12 2014, and that CMO did include declaratory relief as a 13 remaining claim at various focus sites. 14 say, oh, you didn't really mean what you wrote, this only was 15 supposed to reflect what OCWD intended to pursue at the trial, 16 and we didn't think we needed to move against it because it was 17 just a list, so we didn't object at the time. 18 defendants say, look, the water district can ask the transferor 19 court, the trial court, to allow the remedy of declaratory 20 relief for continuing nuisance, but this is somewhat 21 problematic because if the trial court says it's not a remedy 22 for continuing nuisance or there is no such claim, that 23 wouldn't take care of all the declaratory relief sought in the 24 OCWD action. 25 I specifically said there may be declaratory relief outside of Well, the defendants And now the That just has to do with the nuisance claim. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 And 33 F6IKMTBC 1 Conference that particular common-law claim. 2 So the county says, look, it does remain available as 3 a cause of action, you only ruled on a limited context, and the 4 basis of your ruling was duplicative on the continuing nuisance 5 claim, which the defendants are going to tell the trial court 6 needs to be struck, and the trial court might agree, but that 7 wouldn't eliminate all declaratory relief. 8 9 In fact, as I read the letters, defendants are going to say that Article III courts have no inherent authority to 10 order declaratory relief. 11 as we do it all the time. 12 I don't even know what that means, So the long and short of this one is actually I think 13 it can be part of the remand that there is declaratory relief 14 still in the case, and there is no reason for me to say they 15 can't put that in based on the 2006 ruling which has been 16 clarified many times since. 17 one, and you can do all the rest of your arguing to the poor 18 judge who is the one who gets the pleasure of trying the OCWD 19 case. 20 So that's where I come out on that So you can speak afterward, but I might as well finish 21 OCWD because there's another big issue. The other big issue 22 has to do with the water district's request for clarification 23 about the res judicata fact on the continuing nuisance claims 24 from the Court's September 16, 2014 ruling on the BP and Shell 25 defendants' motion for summary judgment. We discussed last SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 34 F6IKMTBC Conference 1 time how best to deal with this question. 2 options. 3 was an option of a 1292, I think, certification, and there was 4 a punt which said, oh, well, just give it to the trial court 5 and tell the trial court that the MDL judge was wrong, and that 6 the trial judge should essentially ignore the law of the case 7 and overrule, so to speak, the MDL court. 8 direction I think I was heading in at that time. 9 There were several There was the option of a 54(b) certification, there And that's the But I have to say, after reading these letters, I've 10 come around to a different view. 11 54(b) may be the right way to go. 12 to it in the water district's letters is they say, if you allow 13 that, it's going to trigger an appeal of all the prior rulings 14 as to these defendants, not just the res judicata/continuing 15 nuisance issue. 16 I now think that actually And the only big objection So my question for the crowd today is: Is that a red 17 herring, or is that an issue? 18 raising bunches of other challenges with bunches of other 19 rulings, or is that just a red herring, and, really, this is 20 the one you want to take up? 21 trigger -- it could trigger the right to appeal other issues, 22 so does either the water district or the defendants intend to 23 raise other issues just because the right to do so is 24 triggered? 25 In other words, will you be So, in other words, it could If you get what I'm trying to say. MR. AXLINE: I'll handle that, your Honor. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 Mike 35 F6IKMTBC 1 Conference Axline, for the Orange County Water District. 2 THE COURT: 3 MR. AXLINE: Okay. Yes, I have to correct what I told you 4 last time in one sense. I told you we only wanted to take this 5 one issue up on appeal. We thought that should be the only one 6 to go up. 7 some research on this, if we go up on a 54(b) final judgment 8 against Shell and BP, we are obligated to raise every issue -- I think, however, in looking at it afterwards, doing 9 THE COURT: 10 MR. AXLINE: 11 THE COURT: 12 MR. AXLINE: 13 THE COURT: 14 15 What are these every issue? What's there? There are statute of limitations rulings. Now we're talking about BP and Shell? Yes. Not anybody else. So what was the statute of limitations ruling? MR. AXLINE: Well, your Honor ruled that the statute 16 of limitations precluded a common-law claims other than 17 continuing nuisance where there were detections at a station 18 prior to the bar date, which I think was May 6 of 2000. 19 20 THE COURT: That's those two defendants. There could have been claims against those two defendants. 21 MR. AXLINE: Yes. 22 THE COURT: Okay. 23 MR. AXLINE: 24 25 So that's one. There were also -- and the defendants can speak to what they may want to raise. THE COURT: I'll surely give them their turn. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 Go 36 F6IKMTBC 1 Conference ahead. 2 MR. AXLINE: Then there was a ruling on the causation 3 issue. 4 nuisance. 5 causation at stations where a defendant -- 6 7 We moved for summary judgment on causation and You granted us summary judgment with respect to THE COURT: Well, you wouldn't be appealing anything if you won. 8 MR. AXLINE: Right. 9 judgment on nuisance itself. 10 THE COURT: 11 MR. AXLINE: 12 So those are the two issues that come to mind that I Okay. But you declined to grant summary And you could appeal that. Which is what we had moved for, yes. 13 think we would be forced, if we went to 54(b) route rather than 14 the 1292(b) -- 15 16 17 18 19 THE COURT: I'll talk about that next. I will turn to 1292. What about the defendants? If I were to allow the 54(b), Mr. Condron, what else might you need to raise. MR. CONDRON: Peter Condron, for the defendants. Your 20 Honor, it largely depends on the scope of what OCWD would be 21 appealing. 22 THE COURT: Well, they just said. 23 MR. CONDRON: We won, so we would obviously defend on 24 res judicata grounds to the extent they attacked the set of 25 rejected rulings on the statute of limitations, causation SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 37 F6IKMTBC 1 2 3 4 Conference and -THE COURT: No, but that's responding. Are there any issues that you would be raising? MR. CONDRON: Affirmatively? I can't imagine that we 5 would, your Honor. 6 granting summary judgment to them on the nuisance claim. 7 not sure he could appeal that at this juncture. 8 9 10 11 THE COURT: Mr. Axline had mentioned about you're not I'm But if it's a final judgment as to BP and Shell, that's his whole point, he needs to raise every claim that could theoretically bring him back in. MR. CONDRON: Yes, I'm not sure that the denial of 12 summary judgment motion to the plaintiffs is something that 13 could be raised on appeal at that point in time, however. 14 THE COURT: 15 MR. CONDRON: 16 And outside of that, again, since we would be 17 I see your point. Yes. defending -- 18 THE COURT: That's probably right. 19 MR. CONDRON: 20 where we would be responding -- 21 THE COURT: 22 MR. CONDRON: 23 THE COURT: 24 MR. CONDRON: 25 THE COURT: -- I think we're probably in a position So at most, it's three issues, not one? Correct. Maybe even two, not one. Depending upon what they raise. Well, no, because the summary judgment may SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 38 F6IKMTBC 1 Conference not really be an appealable issue. 2 MR. CONDRON: 3 THE COURT: Correct. That it was denied, the opposite of denied 4 is granted. I don't see how that brings back -- if the statute 5 of limitations takes you out or if the nuisance takes you out, 6 it doesn't matter. 7 MR. CONDRON: I think you're right. 8 THE COURT: 9 So at most, it sounds like two issues, possibly three. Right. 10 It's still not as burdensome, I think, as sending it back to 11 the trial court as to dismissed defendants. 12 to be some finality being dismissed. 13 Believe me, I understand appeals, but they're supposed to have 14 some finality from the rulings to put them in the remand 15 bucket, so to speak, where they're forced to almost all over 16 again litigate an issue they won here. 17 judge starts saying, yeah, well, I disagree with that judge on 18 this, that's sort of a field day for both sides to say, oh, 19 well, I see we've got a good shot here, let's reraise 20 everything done in the last 12 years, and keep this judge busy 21 for years, and never have a trial. 22 There was supposed I understand appeals. And, by the way, if the So I'm not sure sending it back is really what you 23 want either because it could open the door to that judge 24 reconsidering everything, both issues you won and issues you 25 lost. So I'm not keen on that. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 39 F6IKMTBC 1 Conference So what I'd like to turn to is 1292 and revisit that. 2 So if we don't do 54(b), what do the parties think of 1292? 3 Because I do think this issue should get heard. 4 finally these people aren't there, and they're big companies, 5 and you want them there, so it should get heard, and hopefully 6 fast. 7 So what do you think of 1292 versus 54(b)? After all, I think it will be faster to do an appeal right here. 8 MR. AXLINE: We would prefer 1292(b) to 54(b). 9 I do want to add one thing that Mr. Condron maybe 10 overlooked or forgot. 11 jurisdiction, that's one that we won, and that they may decide 12 to raise on appeal, so -- 13 14 15 16 THE COURT: There was a ruling on primary No, he didn't say it. He usually doesn't need you as co-counsel. MR. AXLINE: If you're stacking up issues under 54(b) versus issues -- 17 THE COURT: I know, but let him figure out his own. 18 In any event, Mr. Axline? 19 MR. AXLINE: So, in any event, I think that the issues 20 to be resolved on appeal would be much more discrete and 21 targeted under 1292(b). 22 23 24 25 THE COURT: It doesn't meet the standards? Can I, with a straight face, write a 1292(b) certification? MR. AXLINE: I think you can. determinative as to these parties. It's certainly It's going to have a ripple SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 40 F6IKMTBC Conference 1 effects for all the other parties in the case. 2 pretty compelling reasons for granting it. 3 4 There are I have a little concern that the Court of Appeals is less receptive to 1292(b) certifications. 5 THE COURT: Correct. I think that's true. They have 6 to take the 54(b) final judgment unless they say it's not, but 7 it is. 8 What do you think, Mr. Condron? 9 MR. CONDRON: I think there is a problem with 1292(b) 10 certification on a couple of them, your Honor. First of all, 11 I'm not sure it does actually meet the legal standard of 12 controlling question of law and substantial grounds, et cetera. 13 But, more importantly, 1292(b) has to involve an order 14 of the court that's being examined, and I think if the Second 15 Circuit were to look at the order that you issued on 16 res judicata, they would find nowhere in it the issue that the 17 plaintiffs want to raise. 18 that issue can be certified. 19 And, therefore, I'm not sure that The Court of Appeals, and I looked at this last night 20 before coming up here, they take the order, they don't take the 21 issue. 22 they have to take it from the order, and there's nothing in 23 your order that discusses continuing nuisance because as we 24 know, the plaintiffs didn't raise it. 25 So while you may recommend an issue that they look at, THE COURT: Honestly, I don't remember that detail. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 41 F6IKMTBC Conference 1 You studied it last night. 2 was a little more current for me, so I don't remember, to be 3 honest. 4 MR. CONDRON: 5 THE COURT: 6 But you reviewed it, and you know what's Is he right, Mr. Axline, about the order itself? Maybe you didn't have a chance to review it either. 9 10 I understand. in that order, I don't. 7 8 I did other work last night that MR. AXLINE: Well, I didn't review it, but I'm familiar with it. 11 THE COURT: 12 MR. AXLINE: Well, sure. And this issue that we asked you 13 initially to address, which is whether the order bars 14 continuing nuisance causes of action, which arise each day, 15 that arose after the consent judgments that they base their 16 motion on, that was not directly addressed to you in the 17 summary judgment briefing. 18 19 THE COURT: that decided? 20 So maybe it's never been decided. Was And if so, where? MR. AXLINE: It has not been decided, your Honor. 21 in our view -- that's why we brought it to you seeking 22 And clarification. 23 THE COURT: Well, I denied that, but maybe that was 24 wrong. If I have not decided what to do about postconsent 25 judgment -- releases, is that what you said? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 42 F6IKMTBC Conference 1 MR. AXLINE: 2 THE COURT: Yes. If I never decided that squarely, it may 3 be I should and was wrong to deny the request for 4 clarification. 5 MR. AXLINE: In fairness to Mr. Condron, and I am sure 6 he's going to argue this, he's going to say we should have 7 raised it in opposing their summary judgment motion. 8 9 THE COURT: Yes, but that's not the best answer because nothing to take up, as he just pointed out under 1292, 10 if I never decided it. So the law has to be a little bit 11 flexible or we're all in the wrong business. 12 decided, and it should be decided here. It needs to be 13 MR. AXLINE: We think it's obviously very central. 14 THE COURT: No, I understand why there was a consent 15 agreement, but then things happened afterward, is it barred or 16 not. 17 relatively short briefing schedule and an opinion targeted to 18 that would give us an order that if you win, the point can be 19 taken up on 1292 quickly, and if for some reason you lose the 20 point, and that would put you back in the case that's being 21 remanded, right? If I didn't squarely address that, Mr. Condron, maybe a 22 MR. AXLINE: 23 THE COURT: That's correct. If they lose that point, and then they 24 could also seek or be the one to seek the 1292, but they can no 25 longer seek a 54(b), that's the problem. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 43 F6IKMTBC 1 2 Conference But in any event, if I didn't squarely decide that, I should. 3 MR. CONDRON: Two points on that, your Honor. Number 4 one, Mr. Axline is quite right, they didn't raise it, and our 5 position is that they should have because we moved for summary 6 judgment on all the claims in the complaint. 7 Secondly -- 8 THE COURT: 9 10 I'm not going to stand on that. consider it a technicality now. I'll I want to have a square ruling. 11 MR. CONDRON: This part isn't a technicality, your 12 Honor. 13 your opinion, you addressed the issue of whether or not there 14 was any continuing harm, and what your Honor found, which is 15 correct on the facts, is that after the consent judgments were 16 entered, when the BP judgment was entered in 2002, ours was 17 entered in 2005, we were no longer using MTBE in gasoline at 18 that point in California. 19 gasoline didn't involve MTBE. 20 THE COURT: 21 22 In a footnote in the brief, we are not -- I'm sorry, in So any subsequent release of But why? It could have been used in 2001, but didn't leak out, so to speak, till 2007. MR. CONDRON: No, that's not the way the system works, 23 your Honor. The gasoline would have been long gone from the 24 tank prior to 2007, 2005. 25 about 2002 to 2003 in California. Actually, we all took it out in There was a ban on it in SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 44 F6IKMTBC Conference 1 2004. And certainly the Shell consent order, which went into 2 place a year after that, would have long postdated any new 3 MTBE -- 4 THE COURT: 5 MR. AXLINE: So he's saying it's impossible. And that's not accurate, your Honor. It 6 misstates the law of continuing nuisance because under the 7 continuing nuisance doctrine, and this is what we'd like a 8 chance to brief, is that the cause of action continues until 9 the nuisance itself is abated. It's not the date of release, 10 but it's the date of which the nuisance is abated that the 11 cause of action ends, and the nuisance has not been abated at 12 these sites. 13 THE COURT: 14 MR. AXLINE: 15 MR. TUITE: 16 MR. AXLINE: And, again, there's no ruling on that? No. This wasn't briefed? Well, your Honor, you have ruled on this 17 before, and we put your prior rulings into our letters to you 18 for this conference. 19 denied this, that the rule is that there's a new cause of 20 action every day that there's a continuing nuisance until it's 21 abated. 22 You said, and the defendants have not So I really don't think there's going to be a big 23 fight about whether that's the legal rule. I think the 24 defendants are hanging their hat -- Shell and BP are hanging 25 their hat on an argument that we didn't raise this in the SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 45 F6IKMTBC 1 Conference opposition to the summary judgment motion. 2 THE COURT: But you're saying, in terms of preparing 3 56.1 type statements, there won't really be a back dispute, 4 you're going to concede that they didn't use it after X years, 5 but you're going to say it's a matter of releases or 6 contaminations that have not been abated, and that's a 7 continuing nuisance. 8 MR. AXLINE: 9 THE COURT: Exactly. So you should be able to agree on the 10 facts. It's just becomes a legal question that you say I have 11 not squarely ruled on. 12 MR. AXLINE: Correct. 13 MR. CONDRON: Your Honor, I'm not sure that's entirely 14 correct. 15 I'm looking at the three focus sites here. 16 California issued something called a low threat closure plan 17 for all three of the Shell sites. 18 which says, does a nuisance exist as defined by Water Code 19 Section 13050. 20 So we do have a factual dispute on that. 21 aside, there's no evidence that there's any continuing nuisance 22 that was ever put in the record -- 23 If we're going to agree on that fact -- of course, The state agency in There's a question in that For all three of the sites, the answer is no. THE COURT: But setting that He just said how he defines continuing 24 nuisance means the known nuisance has not yet been abated, and 25 he said as a matter of law, that equals a continuing nuisance. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 46 F6IKMTBC 1 2 Conference MR. CONDRON: We'll have the legal dispute on that issue. 3 THE COURT: Right. But that's a legal dispute, that's 4 not as hard. Then there would be the question of whether the 5 consent decree cuts it off anyway. 6 MR. CONDRON: 7 THE COURT: Correct. So there would be two steps to the legal 8 argument, whether that is the continuing nuisance because it 9 hasn't been abated and whether, in any event, it's cut off by 10 the consent decree because the consent decree should cover any, 11 I would think, contaminations that occurred up to the date of 12 the consent decree whether or not they have been abated. 13 That's what you bought when you settled, or at least that's 14 what you are going to argue. 15 MR. CONDRON: 16 THE COURT: 17 But in any event, the point is, shouldn't I squarely 18 I'm helping you frame your argument. rule so there's something to take up that does the trick? 19 20 Correct. MR. CONDRON: Well, we believe that you have, your Honor. 21 THE COURT: Not really. You just said, oh, no, you 22 don't believe. 23 ruled on the issue they would like heard. 24 25 You said I studied the order, and you never MR. CONDRON: issue. You never ruled on that particular You have found, however, that there was no continuing SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 47 F6IKMTBC 1 2 Conference harm in the footage in the opinion. THE COURT: Well, a footnote is a footnote. Why don't 3 we just get this done real fast, so that there is an explicit 4 ruling on the open issue, so to speak, because the one you said 5 I never ruled on, you're the one who pointed it out in 6 reviewing -- 7 MR. CONDRON: On his explicit issue, not on the issue 8 that really should be this, the important one to be focused on, 9 which is a continuing harm, and you did rule on that. 10 THE COURT: 11 MR. CONDRON: 12 THE COURT: 13 14 15 In this footnote? Correct. Well, I don't know if that was a subject of full briefing or not. MR. CONDRON: We certainly briefed it in our brief, your Honor. 16 THE COURT: Yes. 17 Since I think 54(b) is the best way to go, and even 18 better than 1292 -- I'm on the fence. 1292, as somebody 19 pointed out, they may not take it, and that doesn't advance 20 anything, but since I -- since I'm leaning toward 54(b), and 21 you say the order doesn't address the issue, then I would like 22 to squarely write on the issue as fast as I possibly can, which 23 would mean allowing briefing on a very limited issue. 24 limited record, I think. 25 statement that can be presented without disputed issues of And a And I would think a joint 56.1 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 48 F6IKMTBC 1 2 Conference fact. Some facts are agreed here, like you were not using it 3 after a certain date, and their theory is that if it's not 4 abated, it continues. 5 say, even if that's true, the consent decree cuts it off. 6 All right. 7 MR. AXLINE: 8 And you, of course, would come back and, Who's the moving party? Where am I? I think, fairly, the district, Mike Axline, should be the moving party. 9 THE COURT: 10 this is about to be remanded. 11 MR. AXLINE: 12 THE COURT: 13 thinking two weeks. So today is June 18. 14 before the holiday. That's July 2nd. 15 THE COURT: This is holding us up. We could file our motion in two weeks. You're reading my mind, Mr. Axline. MR. AXLINE: 16 I really like this one done fast because I was That's good, it's July 2nd. And keep it as late as you can. Obviously 17 I think it presents a discrete issue or two left over from the 18 major rulings already made. 19 How long would you need to respond? 20 MR. CONDRON: 21 22 23 Your Honor, I'm leaving the country on July 5th for a week. THE COURT: Yes, but you're not doing it alone, Mr. Condron. 24 MR. CONDRON: 25 THE COURT: No. I know you're not. But, anyway, what were SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 49 F6IKMTBC Conference 1 you going to suggest? 2 MR. CONDRON: 3 I would just ask for three weeks, just to give a little leeway on that. 4 THE COURT: July 23rd and reply? 5 MR. AXLINE: 6 THE COURT: 7 Maybe you've been doing this with me so long, that you Ten days. Oh, you got it again. 8 know exactly what the schedule is going to be. 9 take you to August 3rd. So that would That's the best I can do. And I 10 hopefully, maybe with luck, can try to squarely address this 11 fast. 12 go fast. If not, I'll get to it when I get to it, but I'll try to 13 Okay. 14 MR. AXLINE: So, your Honor, this raises a related 15 issue, and that is the suggestion to remand itself, which will 16 be, I think, impacted by your ruling. 17 THE COURT: 18 MR. AXLINE: 19 THE COURT: 20 21 Of course. I guess -I ruled on the declaratory half, and then there's this darn issue. MR. AXLINE: Yes, I would suggest -- I think I would 22 like to hear from the defendants on this, but it would make 23 sense to hold off on the suggested remand until this gets 24 resolved. 25 THE COURT: I think so. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 50 F6IKMTBC 1 2 Conference MR. PARKER: Your Honor, Jeff Parker. I would like to address the declaratory relief point, if I could, briefly. 3 In 2006, your Honor -- 4 THE COURT: I know all that. I stated it. I gave you 5 the whole history of all my rulings. I understand what I said 6 on one day, and I understand what I said on another day, and I 7 reviewed each of my statements, and I conclude, I conclude, 8 that the appropriate thing to do is to leave it in as a claim 9 because I was told -- I went through all this already. 10 should I repeat myself for the record? 11 Why transcript. 12 Go ahead. 13 MR. PARKER: You can read the Your Honor, one thing, then: With 14 respect to the 2011 opinion, they have represented in their 15 letter that your Honor held that debt relief was a viable 16 claim. 17 the introduction, it was a preface leading into their motion, 18 which was their motion for summary judgment on the OCWD act, 19 public nuisance and trespass, which your Honor denied. 20 a statement at the beginning essentially laying the groundwork 21 or the backdrop against which you were deciding. 22 any ruling reinstating or overruling -- 23 That's actually not what the opinion said. THE COURT: This was in So it's It was not No, no, I understand it wasn't reinstating 24 or overruling, but declaratory judgment, in some context, was 25 not ruled out, such as future expenses. I pointed that out. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 51 F6IKMTBC 1 Conference Also, it was in the list of claims. For a host of 2 reasons, this is the better way to go. 3 and you want to move to dismiss that claim explaining this 4 whole history, go ahead, but I think given all the various 5 rulings I've made over time, this is the better way to go. 6 MR. PARKER: Once it's back there, Thank you, your Honor. As long as we 7 have that clear in the record, that given the opportunity back 8 in the district court, we could move against that, we're fine. 9 Thank you. 10 THE COURT: You can explain why you think it applies 11 across the board when the original opinion in '06 clearly said 12 it's duplicative of the continuing nuisance, and that's why I 13 was striking it. 14 got to keep that judge busy, too. 15 But good luck, it's fine. As I said, you've So I think that takes us to the Rule 12 motions in 16 Puerto Rico. And I don't know if there's a lot to say there 17 except that defendants complain plaintiffs have basically been 18 too busy to talk to them, and that the plaintiffs have said, 19 after June 15th, we promise to sit down with you. 20 today is June 18th, which is all of three days later, but the 21 promise is there. 22 sure that I don't have work I shouldn't have to do, the motion 23 to negotiate would be most appreciated. 24 agreeable to letting the motion deadline slip by a week or so, 25 so you can continue these talks and be as efficient as possible I realize If everybody would sit down and try to be I might even be SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 52 F6IKMTBC Conference 1 with what has to be briefed or not. 2 That seems to me that what I can say is that I want the 3 plaintiff to sit down with you and be as agreeable and 4 commonsensical as possible, and whatever is left over has to be 5 a motion. 6 MR. PARDO: Okay. What more can I say today? That is actually very help. 7 Pardo, for Exxon Mobil, your Honor. 8 Jim That's very helpful, your Honor. 9 THE COURT: I don't know why, but, good. 10 MR. PARDO: No, it is because it's always helpful when 11 you encourage us to talk, but let me see if I can push it a 12 little further because I'd like a little more encouragement 13 from you to them. 14 THE COURT: Okay. 15 MR. PARDO: On May 7th, I talked to you about two 16 possible motions. 17 defendants in this case just couldn't figure out why they were 18 here. 19 couple of weeks. 20 One dealt with the fact that several Those are conversations that should take place the next Maybe we can get that worked out. The other motion, though, pertains to these nonsite 21 specific I1Y claims that have been asserted in the second 22 Puerto Rico action. 23 to the same island-wide nonsite specific claims that were 24 asserted -- 25 THE COURT: They are identical or virtually identical In Puerto Rico I? SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 53 F6IKMTBC Conference 1 MR. PARDO: -- eight years ago in Puerto Rico I, okay. 2 Our argument -- and you had this discussion with 3 Ms. Hannebut and Ms. O'Reilly a year ago -- is they're either 4 barred by the statute of limitations, because they clearly knew 5 by 2007 when they filed the first case, or at a minimum, 6 they're barred by the prior pending action. 7 hour ago, I don't need any more motions. 8 burden you with this motion, and a year ago, you said I don't 9 really want this to be a motion, they shouldn't be in the 10 11 You said this an We don't want to second. THE COURT: I still think that, at least listening to 12 one side; it's always very convincing when one side is heard. 13 But you make it sound right, either prior pending or statute of 14 limitations, island-wide nonspecific site claims are gone. 15 They're seven years too late at least. 16 point, but I'd like the plaintiff to get to that point 17 themselves or explain why not. 18 Mr. Gilmour. 19 MR. GILMOUR: Yes, your Honor. I understand your If I might just for a 20 moment talk about the May 7th teleconference that Mr. Pardo is 21 referencing. 22 remember, your Honor, that Mr. Kauff explained to you, Scott 23 Kauff, that there were additional new defendants that were 24 added, either 12 to 18, and you yourself said, your Honor, 25 that -- we represented that we did not believe the prior We did have that conversation. You may also SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 54 F6IKMTBC Conference 1 pending action doctrine would apply to them. 2 that sounds right to me, Mr. Pardo, do you agree. 3 said, I think that's right. 4 THE COURT: 5 6 7 8 9 You yourself said He also But there's still the statute of limitations. MR. GILMOUR: Yes, your Honor. And to the extent that we can have those conversations with defendants, we will. THE COURT: now, do it fast. Okay, good. That's all I'm saying, do it The motion date is June 29th. I would be 10 amenable if they sit down with you quickly to letting that slip 11 by a week or so. 12 have to do it. But this has got to get briefed, too, if I 13 MR. PARDO: We don't want to have to do it. 14 THE COURT: I agree. 15 MR. PARDO: Let me say this, though. I'm not afraid 16 to admit when I'm wrong. When I said that the prior pending 17 action doctrine -- on that call, when I said, yeah, that sounds 18 right to me, I was wrong. 19 THE COURT: Even if they weren't parties? 20 MR. PARDO: Even if they weren't parties. And there's 21 Southern District case law on this cited in our letter to them 22 on June 8th, you do not need identical parties between you. 23 got the same claims. 24 of the new parties are just subs or affiliates of parties from 25 the first action. We Basically the same parties because most We got the same categories of parties. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 55 F6IKMTBC Conference 1 Everything that needs to line up for invocation of the prior 2 pending action doctrine lines up here. 3 THE COURT: They have two good answers. 4 see if this motion has to be made. 5 You have to happy if it's made, and it's open and shut. 6 MR. GILMOUR: 7 THE COURT: 8 MR. GILMOUR: 9 I'm not going to be real Understood. But you'll decide, Mr. Gilmour. Yes, your Honor, understood. And, again, we're happy to discuss it with them. 10 MR. PARDO: Did we pick the date -- 11 THE COURT: Not yet. If I hear that you sit down and 12 are really talking, and I get a joint letter saying we are 13 talking after the conference with you where you were so strong 14 in your encouragement we actually met, could we have another 15 ten days, I'm inclined to say yes, but I don't want to do it 16 now. 17 make a motion June 29. If they're not going to sit down with you, you have to 18 MR. PARDO: I like that approach. 19 THE COURT: If they don't sit down in the next few 20 days, you start writing. 21 MR. PARDO: 22 MR. GILMOUR: 23 THE COURT: 24 25 All right. Fair enough. Thank you. And that was the last -- I think the last item on my agenda. Is there anything else anyone of the vast number of SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 56 F6IKMTBC Conference 1 lawyers here wants to raise? 2 MR. AXLINE: 3 THE COURT: Next conference, your Honor? That's always a good one. Do you have a 4 suggestion? When will it be ripe, so to speak? 5 think what dates. 6 affect the next conference. 7 out in Pennsylvania, I've given guidance on that. 8 like the usual, one month. Nothing really was set here that would 9 MR. AXLINE: 10 THE COURT: 11 MR. AXLINE: 12 13 14 15 I'm trying to I want to get that CMO hammered So it sounds Sort of mid to late July? Yes. When everybody's away. Particularly for the CMO. I think it's more likely people will be gone in August. THE COURT: vacations. Okay. It's nice that some people take Anyway mid to late July. Any suggestions? They're all the same to me. 16 know what days you prefer traveling. 17 You You don't like Mondays and Fridays, right? 18 MR. AXLINE: 19 MR. PARDO: 20 MR. AXLINE: 21 THE COURT: Tuesday, Wednesday or Thursday. 22 MR. AXLINE: Right, the last week in July. 23 MR. PARDO: 24 25 Correct. No. I don't have a calendar in front of me -- Well, that would be the 30th is a Thursday, the 23rd is also a Thursday. THE COURT: It's the third -- I think one of those, I might be away. SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300 57 F6IKMTBC 1 Conference The ABA has me for something. 2 One second. Oh, ABA is the very last week, so I guess like the 3 29th. 4 aren't good, but everything else is. So everything is good except the 29th and 30th. 5 MR. PARDO: The 28th is a Tuesday, your Honor. 6 THE COURT: That's okay. 7 MR. PARDO: Sure. 8 THE COURT: Done. 9 Okay. Those I like it. 28th at 2:30? July 28th at 2:30. Everyone, good to see you. 10 COUNSEL: 11 (Adjourned) Thank you, your Honor. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 SOUTHERN DISTRICT REPORTERS, P.C. (212) 805-0300

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