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

Filing 4250

LETTER addressed to Judge Shira A. Scheindlin from JAMES A. PARDO dated 8/17/15 re: DEFENDANTS' PRECONFERENCE REPLY LETTER FOR THE AUGUST 20, 2015 CONFERENCE. Document filed by Exxon Mobil Corporation.(Pardo, James)

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James A. Pardo
Attorney at Law
[e-mail]
[phone]

August 17, 2015
BY HAND DELIVERY AND ELECTRONIC MAIL

The Honorable Shira A. Scheindlin
United States District Judge
Southern District of New York
Daniel Patrick Moynihan Courthouse
500 Pearl Street, Room 1620
New York, New York 10007-1312
Re:

Master File C.A. No. 1:00-1898 (SAS), M21-88, MDL No. 1358
Defendants’ Pre-Conference Reply Letter for August 20, 2015 Status Conference

Dear Judge Scheindlin:
Defendants respectfully submit this reply letter in advance of the August 20 conference.
JOINT AGENDA ITEM
I.

Commonwealth of Pennsylvania: Report on CMO Negotiations

Section V(A) – Plaintiff writes that “Defendants wish to insert into the CMO … a
provision allowing unrestricted discovery to commence immediately with respect to the damages
claimed by the Commonwealth.” Plaintiff seems to suggest that it should not be expected to
respond to discovery related to damages more than a year after filing its Complaint. Plaintiff
also seemingly ignores that Section V(A) has been an agreed-to section of the proposed CMO
ever since the parties first exchanged drafts and that Plaintiff, not Defendants, changed positions.
Ignoring the last-minute nature of Plaintiff’s objection, Defendants have assured Plaintiff
that they have no intention of serving extensive discovery on damages before the end of the year.
Specifically, Defendants will seek neither expert opinion nor site-specific damages evidence
during that time (Plaintiff will not even have identified the sites at issue until December 31).
Rather, Defendants will seek discovery only on discrete, non-site-specific issues. See Email
from S. Riccardulli to M. Axline (Aug. 17, 2015) (providing list of topics Defendants may want
to pursue in the next 4-5 months) (at Ex. A). Defendants object to efforts to word-smith the
bounds of permissible damage discovery before any discovery is served. Such an effort is much
less efficient than conferring if and when a concrete objection is made to a concrete request.

U.S. practice conducted through McDermott Will & Emery LLP.

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The Honorable Shira A. Scheindlin
August 17, 2015
Page 2
Accordingly, the Court should reject Plaintiff’s request for an order requiring Defendants
to preview whatever damage discovery they might serve before actually serving it. There is no
justification for turning the discovery process on its head in this manner, or for putting a blanket
limitation on Defendants’ ability to take discovery on this vital topic. Defendants’ topic V(A) is
appropriate for discovery and should be adopted by the Court in the CMO.
CMO 4 Declarations – As it did with Section V(A), Plaintiff has changed its position.
When it first asked Defendants to provide CMO 4-type declarations, it asked Defendants for a
date by which Defendants could do so. In July, Plaintiff accepted Defendants’ December 31
proposal for service of CMO 4 declarations. See, e.g., Email from M. Axline to T. Bongiorno
(July 22, 2015) (“Attached is a redline of your latest draft PA CMO. I just redlined a clean copy
of your draft because we accepted most of your changes,” including the December 31 date for
CMO 4) (at Ex. B). Within the last week, however, Plaintiff went from requesting that
Defendants roll responses to CMO 4 with a completion date of December 31, to (for the first
time in its preconference letter) requesting that the Court order Defendants to complete the full
declarations by October 1 – three months earlier. 1
However, Plaintiff has yet to provide a legitimate reason why it needs these signed
declarations before the end of the year. Plaintiff claims that this information is “foundational” to
the Commonwealth’s case and that it somehow will assist in the formation of a release site list.
As to the first rationale, December 31 already has been deemed an acceptable time for the parties
to exchange “foundational” information – including, most critically, Plaintiff’s list of sites at
which MTBE has been released in a case that was brought to remedy release of MTBE at sites.
As to the second rationale, Defendants already have noted their disagreement with
Plaintiff’s position that the requested information – related to supply chains, refinery ownership,
and purchase information – has anything to do with the identification of sites at which MTBE
has been released. Nonetheless, what Plaintiff’s letter fails to acknowledge is that Plaintiff
served, and Defendants responded to, a set of interrogatories that in many ways mirror (at times,
verbatim) the CMO 4 categories. Therefore, Plaintiff already has received and will continue to
receive more of this information on a rolling basis, ahead of December 31. Despite the same,
Plaintiff now wants Defendants to complete their investigation on the statewide distribution and
supply chain in less than two months (and ask a corporate representative to swear to the
completeness and veracity of that investigation). Defendants have said they can complete this
investigation by December 31, and Plaintiff has not shown that they will be prejudiced by this
schedule. Therefore, the Court should approve the parties’ original agreement to provide CMO
1

During a meet-and-confer on Friday, August 14, Defendants offered a compromise whereby
certain CMO 4 information would be “rolled” to Plaintiff beginning no later than October 31,
with a completion date of December 31. Defendants further suggested that Plaintiff identify the
topics that it believes are relevant to creation of the MTBE release site list – Defendants are
hard-pressed to see the connection – which then could be prioritized for disclosure. Plaintiff has
not accepted this proposal.

The Honorable Shira A. Scheindlin
August 17, 2015
Page 3
4-type declarations by December 31.
Pre-Amendment UTPCPL Discovery – Your Honor has ruled that Plaintiff failed to
sufficiently plead a UTPCPL claim. Although the Court granted leave to amend, it did not
authorize a broad-based fishing expedition for Plaintiff to attempt to substantiate its cause of
action. Either Plaintiff has a good-faith basis – and supporting information – to allege a
UTPCPL claim (as required by Rule 11), or it does not. Its professed need for discovery is a
tacit admission it does not. Plaintiff should be given a short deadline to decide whether it will
amend its complaint, after which the pleadings in this case should close. 2
Plaintiff’s attempt to distinguish the case law prohibiting pre-claim discovery is
unavailing. Plaintiff provides no support for its contention that this prohibition hinges on a
court’s jurisdiction. See Pls.’ Preconf. Ltr.at 3. Cf. Mixing & Mass Transfer Tech., LLC v.
Lightnin, Inc., Case No. 4:05-CV-1519, 2006 WL 140414, at *3 (M.D. Pa. Jan. 18, 2006) (in
context of order requiring more definite statement, i.e., where court retained jurisdiction,
recognizing that federal rules do not permit pre-complaint discovery). To the contrary, the
rationale for Rule 27’s strict requirements is that discovery should not “enable parties to fish for
some ground for bringing suit.” See Marshal v. Madoff, 2015 WL 2183939, at *2 (S.D.N.Y.
May 11, 2015) (internal quotations omitted). The same rationale applies here, where Plaintiff’s
stand-alone UTPCPL claim was dismissed for failure to state a claim. 3 It is irrelevant that
Plaintiff has remaining claims pending before the Court.
Finally, Plaintiff contends that its proposed discovery is relevant to its failure to warn
claim. If so, this statement begs the question why Plaintiff sought leave to serve such discovery
in the first place. One answer is that the discovery clearly is intended to support Plaintiff’s
UTPCPL claim and is not relevant to a failure to warn. 4 Nonetheless, if it is Plaintiff’s position
that the proposed discovery is not a fishing expedition intended to support its dismissed claim,
but rather proper discovery relevant to a failure to warn claim, then there should be no problem
with the Court setting a short deadline for amendment.
***

2

Prompt action on any further amendment is particularly important because, although
Defendants have yet to answer the Complaint, they are being asked to respond to substantial
discovery.
3

It is ironic that on a cause of action that the Court held requires false advertising to the public,
Plaintiff is unable to substantiate its claim without taking discovery.

4

Plaintiff’s proposed document requests (which Plaintiff, not Defendants, suggested previewing)
all seek production of advertising and promotional materials. However, the issue on a strict
liability failure to warn claim is whether the product was distributed with sufficient warnings –
i.e., it is a distinct issue from whether any product advertisements were fraudulent or misleading.

The Honorable Shira A. Scheindlin
August 17, 2015
Page 4
As always, we appreciate your Honor’s attention to this matter and ask that this letter be
docketed by the Clerk’s Office so that it is part of the Court’s file.
Sincerely,

James A. Pardo
James A. Pardo
cc: All Counsel of Record by LNFS, Service on Plaintiffs’ Liaison Counsel

EXHIBIT A

EXHIBIT B

From:
Sent:
To:
Cc:
Subject:
Attachments:

Michael Axline <[e-mail]>
Wednesday, July 22, 2015 5:40 PM
Gerson, Lisa; Bongiorno, Anthony; Riccardulli, Stephen
'Tyler Wren'; 'Michael Coren'; 'T. O'Reilly'; Miller & Axline
Draft PA CMO
PA Proposed CMO (Defendants' 7-17-15 proposal with Plaintiff's redlines).docx

Importance:

High

Lisa, Tony and Steve 

Attached is a redline of your latest draft PA CMO.  I just redlined a clean copy of your draft because we accepted most of 
your changes. 

We altered the hyperlink language because, after looking into it more following our meet and confer we realized that it 
was not going to be technically feasible to create such hyperlinks.  Our alternative language would accomplish the same 
thing, with a little less efficiency. 

We would also like to discuss the “max detection” language.  Since both parties will be identifying release sites we think 
either both parties should identify max detections or neither should.  The benefit of both parties identifying max 
detections is that everyone can get on the same page about those numbers, and we can work to resolve any 
discrepancies.  The cost of both parties identifying max detections is that it seems both duplicative and 
unnecessary.  Perhaps you can elaborate on why you want this info (which you should already have) from the 
Commonwealth in the first instance. 

Let me know when your side has had a chance to review and you are ready to talk. 

Mike 

Miller & Axline / phone (916) 488‐6688 / fax (916) 488‐4288 This private communication may be confidential or 
privileged. If you are not the intended recipient, any disclosure, distribution, or use of information herein or attached is 
prohibited. 

1

distributed, stored, blended, supplied to or sold in the
Commonwealth of Pennsylvania; and
8.
C.

Lists of Pennsylvania MTBE release sites.

On June 9, 2015, Plaintiff provided Defendants with a list of sites at which

Plaintiff contends gasoline was released. By August 30, 2015, each Defendant shall
produce to Plaintiff any and all readily accessible electronic data (i.e., databases or other
files created for the purpose of centralizing or aggregating storage of information) in its
possession, custody or control regarding licensing, branding, and franchise agreements
for gasoline sales in Pennsylvania for every site (by name, address and site identification
number) within the Commonwealth at which Plaintiff contends gasoline was released.
D.

Plaintiff intends to serve subpoenas on Defendants’ current or former

environmental consultants to obtain readily available electronic data concerning: (1)
concentrations of MTBE and/or BTEX in soil and groundwater at release sites, and (2)
consulting reports regarding release sites.

Plaintiff will provide Defendants with

advance notice of such subpoenas as required by Federal Rule of Civil Procedure
45(D)(4). Upon receiving such notice, each Defendant agrees to inform the subpoenaed
consultant that it does not object to the consultant producing responsive, non-privileged
documents and expects the consultant to comply with its obligations under by Federal
Rule of Civil Procedure 45..
E.

The parties have met and conferred regarding the content of CMO

4.III.B.2 declarations as applied to the Pennsylvania action. The revised CMO 4 is
incorporated herein and attached at Exhibit A. As stated therein, Defendants will provide
the required declarations by December 31, 2015.