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

Filing 4281

LETTER addressed to Judge Shira A. Scheindlin from James A. Pardo dated 10/29/15 re: Defendants' Pre-Conference Reply Letter for the November 3, 2015 Conference. Document filed by Exxon Mobil Corp.(Pardo, James)

Boston Brussels Chicago Düsseldorf Frankfurt Houston London Los Angeles Miami
Milan Munich New York Orange County Paris Rome Seoul Silicon Valley Washington, D.C.
Strategic alliance with MWE China Law Offices (Shanghai)

BY HAND DELIVERY AND ELECTRONIC MAIL

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

October 29, 2015

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 November 3, 2015 Conference

Dear Judge Scheindlin:
Defendants respectfully submit this reply letter in advance of the November conference.
I. OCWD: Entry of Final Judgment Pursuant to Federal Rule of Civil Procedure 54(b)
Judgment Defendants: As noted previously, the Judgment Defendants (i.e., the Shell
and BP Defendants) believe that entry of a Rule 54(b) final judgment as to them is appropriate.
However, OCWD misinterprets the Judgment Defendants' objections to the proposed “Opinion
and Order” that OCWD submitted to the Court. The Judgment Defendants were not suggesting
that the Court only needs to issue an order similar to the order it issued in the City of New York
case or that such a document is sufficient to confer appellate jurisdiction. Rather, as stated in
Defendants' October 1 letter to the Court, “the Court must determine independently whether its
orders granting summary judgment to the Shell and BP Defendants meet Rule 54(b)’s criteria for
entry of final judgment.” The Judgment Defendants do not believe it is appropriate for the
parties to draft the Court's findings for it, because appellate courts take a jaundiced view of a
district court “autographing” such documents prepared by the parties. Boston Prop. Exch.
Transfer Co. v. Iantosca, 720 F.3d 1, 7-8 (1st Cir. 2013).
The Judgment Defendants also take issue with certain of the statements contained in
OCWD’s proposed opinion and order, including that the upcoming “Focus Plume” trial was
intended as a “bellwether” trial; that if OCWD were successful on any appeal it would have a
right to reopen discovery as to the Shell and BP Defendants’ Phase 1 sites, because discovery has
been closed as to those sites, and all other Phase 1 sites, for years; and that the issuance of a Rule
54(b) final judgment here would not lead to piecemeal appeals. All are factually and legally
erroneous.

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

340 Madison Avenue New York New York 10173-1922 Telephone: [phone] Facsimile: [phone] www.mwe.com

The Honorable Shira A. Scheindlin
October 29, 2015
Page 2
Finally, OCWD attempts to misconstrue comments by Shell’s counsel about the scope of
any appeal. Shell’s counsel indicated to the Court that he “can't imagine” that the Judgment
Defendants, the prevailing parties in the district court, would “affirmatively” cross-appeal any
adversely-decided interlocutory orders. Generally, cross-appeals by the party that prevailed in
the district court are deemed unnecessary and any issues decided adversely to the prevailing
party may be raised as alternative grounds for affirmance. The Judgment Defendants reserve
their right to raise such issues on appeal.
In short, the Judgment Defendants support entry of a Rule 54(b) final judgment, but they
do not support entry of OCWD’s proposed order and opinion.
Non-Judgment Defendants: The District’s letter avoids the compelling reasons why a
Rule 54(b) order is inappropriate here. The District begins by feigning surprise that the NonJudgment Defendants are objecting to a Rule 54(b) order. But this should be no surprise. The
Non-Judgment Defendants (and the Judgment Defendants) objected to a Rule 54(b) order the
first time the District raised this issue in April 2015. See Defs.’ Apr. 21, 2015 Reply Ltr., at 7-8
(at Ex. 1). The Non-Judgment Defendants argued—as they argued again in their October 1,
2015 letter—that the District failed to show that there was no just reason for delay, the equities
did not favor a Rule 54(b) order, and a Rule 54(b) order would result in disfavored piecemeal
appeals. The issue was again on the agenda for the June 2015 status conference, but the District
opposed a Rule 54(b) order, arguing that “[a]t the [April 24] status conference, the Court
indicated that an appeal of all prior rulings at this time would not be desirable.” See Pls.’ June
15, 2015 Reply Ltr., at 3-4 (at Ex. 2). BP and Shell represented that they were meeting and
conferring to try to avoid some of the very issues on which the Non-Judgment Defendants are
now objecting. See Defs.’ June 10, 2015 Preconference Ltr., at 4 n.3 (at Ex. 3). Those efforts
failed, so the District should not be surprised now that the Non-Judgment Defendants are
objecting to a Rule 54(b) order.
More fundamentally, the District does not dispute that critical issues that affect the NonJudgment Defendants will be decided by an appeal to the Second Circuit that does not involve
them. Indeed, conspicuously absent from the District’s letter is a statement or admission that it
will not appeal the statute of limitations, OCWD Act, trespass, or nuisance rulings to the Second
Circuit as part of its Rule 54(b) appeal. Defendants won these issues, and therefore the District
would have to appeal them after entry of a Rule 54(b) judgment or risk a waiver argument later,
as the District itself acknowledged in its June 15, 2015 Reply Letter. Although the District
claims that Shell’s counsel stated that Shell would not cross-appeal any issues, a prevailing party
does not need to cross-appeal any issues when it is defending a judgment in the district court. It
may simply assert those issues as alternative grounds for affirmance. Montoya v. FedEx Ground
Package Sys., Inc., 614 F.3d 145, 149 (5th Cir. 2010) (“‘A successful party in the District Court
may sustain its judgment on any ground that finds support in the record.’ . . . No cross-appeal is
required. . . .”) (citation omitted); Crocker v. Piedmont Aviation, Inc., 49 F.3d 735, 741 (D.C.
Cir. 1995) (“‘Cross-appeals for the sole purpose of making an argument in support of the
judgment are worse than unnecessary.’”) (citations omitted). As a result, every important ruling

The Honorable Shira A. Scheindlin
October 29, 2015
Page 3
from this Court affecting the Non-Judgment Defendants may be presented to and decided by the
Second Circuit in a proceeding in which they are not directly involved.
The potential ability to file an amicus brief does not remedy this glaring prejudice. Amici
are given fewer words, do not get argument, and have no right to control the appeal or postappeal process. Here, the appellate issues would be so intertwined with issues that directly affect
the Non-Judgment Defendants that any limit on the Non-Judgment Defendants’ participation in
an appeal is both unfair and prejudicial.
As explained in Defendants’ October 1, 2015 letter, the Second Circuit has rejected Rule
54(b) appeals based on the threat of prejudice just like this. See Arlinghaus v. Ritenour, 543 F.2d
461, 464 (2d Cir. 1976) (“determination of some issues involving the defendant against whom
the complaint had been dismissed ‘might result in prejudice to the other defendants who would
not have had an opportunity before us to participate in the determination of those issues’”
(citations omitted)). As the Second Circuit recognized, “[n]ot only would this court be required
to review the same conduct twice, in defiance of the federal policy against piecemeal appeals,
but our decision could have a profound effect on the appeal which [the remaining defendant] will
almost certainly take from the judgment against him[.]” Id. By hearing the Rule 54(b) appeal,
“we would, in effect, have decided the appeal [the remaining defendant] will take from the
decision against him without having accorded him a right to be heard.” Id. The District claims
in passing that the Arlinghaus reasoning does not apply here, but it does not attempt to
distinguish it. Nor can it. The prejudice identified by the Second Circuit in Arlinghaus is
exactly the same type of prejudice the Non-Judgment Defendants face here.
The
inappropriateness of a Rule 54(b) appeal is more pronounced in this MDL because the second
appeal would be to the Ninth Circuit, potentially creating a circuit split on the very same orders.
Remarkably, rather than explain why a Rule 54(b) order will not result in the type of
piecemeal appeals that circuit courts categorically reject (and here, to different circuit courts, no
less), the District embraces piecemeal appeals, apparently believing that a piecemeal appeal here
will provide useful MDL-wide guidance. The District relies on the Court’s 2010 Rule 54(b)
ruling in City of New York, 2010 WL 1328249 (S.D.N.Y. April 5, 2010), for this position, but
fails to note that only Exxon-related defendants remained at the time of that Rule 54(b) appeal.
No other Defendants’ rights were prejudiced by the Rule 54(b) appeal, which is far from the
situation here. The District also forgets that there are no other California MTBE cases in the
MDL or in state court at this time, so there would be no useful MDL guidance from a piecemeal
appeal on California-specific issues.
Sincerely,

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

EXHIBIT 1

Case 1:00-cv-01898-SAS-DCF Document 4202 Filed 04/22/15 Page 1 of 34

Boston Brussels Chicago Düsseldorf Frankfurt Houston London Los Angeles Miami
Milan Munich New York Orange County Paris Rome Seoul Silicon Valley Washington, D.C.
Strategic alliance with MWE China Law Offices (Shanghai)

BY HAND DELIVERY AND ELECTRONIC MAIL

Peter John Sacripanti
Chairman
[e-mail]
[phone]

April 21, 2015

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 April 24, 2015 Status Conference

Dear Judge Scheindlin:
Defendants respectfully submit this reply letter in advance of the April 24 conference. 1
PLAINTIFFS’ AGENDA ITEMS
I.

Commonwealth of Pennsylvania: Initial Case Management Order

Attached at Exhibit A is a side-by-side comparison of the parties’ proposals which
highlights the disputed issues. The most substantive of those issues are discussed below.
The Site List Proposals: During the course of a meet-and-confer, Plaintiffs’ counsel
represented that the universe of gasoline release sites in the Commonwealth is roughly
comparable to the New Jersey case – i.e., several thousand sites. However, unlike in New Jersey,
reformulated gasoline was not required throughout Pennsylvania. As such, it cannot be assumed
that every gasoline release site is also an MTBE release site. And, it is clear from meet-andconfer conversations that Plaintiffs have no meaningful understanding of the number of sites
or wells in the state that have actually been impacted by MTBE. 2 Despite the fact that the
1

Defendants respectfully request an extension of the page limits for reply letters given the length
of Plaintiffs’ opening letter and Plaintiffs’ inclusion of what amounts to two pre-motion letters.
2
Plaintiffs state that they should not have to identify impacted wells because “the costs of
identifying all such wells that have been impacted by MTBE is an element of the
Commonwealth’s damages, and not a component of the Commonwealth’s discovery
obligations.” Pls.’ Ltr. at 3. This statement ignores Plaintiffs’ allegation that “MTBE has been
found throughout the Commonwealth … in both public water supply wells and private domestic
wells,” (Am. Compl. ¶ 229), and the request to recover past costs of treating such wells (see
generally Prayer for Relief). Defendants are justifiably asking Plaintiffs to identify such

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

340 Madison Avenue New York New York 10173-1922 Telephone: [phone] Facsimile: [phone] www.mwe.com

Case 1:00-cv-01898-SAS-DCF Document 4202 Filed 04/22/15 Page 7 of 34
The Honorable Shira A. Scheindlin
April 21, 2015
Page 7

Id. at 349-50. This is exactly what happened here. All claims for nuisance asserted by the
OCDA against BP and Shell were subsumed by and merged into the Consent Judgments, and res
judicata bars OCWD’s belated efforts to revive such claims now in any form whatsoever.
Finally, OCWD falls far short of establishing a basis for Rule 54(b) certification, which
requires the Court to make an express finding that there is “no just reason for delay.” Capitol
Dist. Physician’s Health Plan v. O’Higgins, 951 F. Supp. 352, 364 (N.D.N.Y. 1997), citing
Ginett v. Computer Task Group, Inc., 962 F.2d 1058, 1091 (2d Cir. 1992). Nothing in the record
supports “expressly determin[ing] that there is no just reason for delay” under Rule 54(b).
On the contrary, OCWD delayed some seven months in seeking Rule 54(b) certification.
Although Rule 54(b) contains no precise time frame for seeking certification, a leading treatise
explains: “Prudent practitioners will seek a Rule 54(b) determination promptly, and within the
28-day period allotted for alterations or amendments to ‘judgments’ … as prompt action…
comports with the Rule 54(b) objective of permitting some piecemeal appeals where delay would
be unduly harsh or unjust.” Federal Civil Rules Handbook (2015 ed.) at p. 1091. Cf. Bank of
N.Y. v. Hoyt, 108 F.R.D. 184, 185-86 (D.R.I. 1985) (declining to adopt “inflexible” time limit,
but noting that “thumb-twiddling is itself some evidence that the disappointed suitor considers
delay in seeking appellate review to be a tolerable circumstance”). OCWD proffers no reason
for its lengthy delay, which alone is a sufficient basis for denial of OCWD’s request.
More fundamentally, OCWD’s delay is antithetical to any determination that no just
reason for delay exists. In this context, the Court is to act as a “dispatcher,” taking “into account
judicial administrative interests as well as the equities involved.” Curtiss-Wright Corp. v. Gen.
Elec. Co., 446 U.S. 1, 8 (1980). Given OCWD’s delay, no equities favor certification. Contrary
to OCWD’s assertion, it is unlikely that immediate appellate review would allow for inclusion of
Shell and BP in upcoming proceedings following remand even if OCWD were somehow
successful. 9 Immediate appeal is unlikely to avoid judicial hardship or have any other positive
effect at the trial court level. See Litton Indus., Inc. v. Lehman Bros., 1989 WL 162315, *9
(S.D.N.Y. 1989) (“The only claim of hardship alleged… is that expensive pre-trial discovery and
litigation may be avoided… [but] this is not the type of hardship contemplated by Rule 54(b)”).
OCWD’s request is also at odds with federal judicial policy disfavoring “piecemeal
litigation” – “delaying appeal is favored where ‘the adjudicated and pending claims are closely
related and stem from essentially the same factual allegations.’” Cullen v. Margiotta, 618 F.2d
226, 228 (2d Cir. 1980). Here, there is a close relationship between the Summary Judgment and
the Court’s prior rulings, cited in that Order, which would not be subject to appellate review if
Rule 54(b) certification were granted. See, e.g., 46 F. Supp. 3d at 450 n.69 (primary injury that
OCWD must show to establish public nuisance is injury to the public rather than “special” injury
to its property) (citing In re MTBE, 824 F.Supp.2d 524, at 539 (S.D.N.Y. 2011)); id. at 452 n.90
9

In City of New York, for example, Exxon filed its notice of appeal on October 13, 2010. The
Second Circuit did not issue its decision until July 26, 2013.

Case 1:00-cv-01898-SAS-DCF Document 4202 Filed 04/22/15 Page 8 of 34
The Honorable Shira A. Scheindlin
April 21, 2015
Page 8

(“As explained above and in my prior ruling, the District’s usufructuary rights are appropriative
and therefore subordinate to the state,” citing In re MTBE, 824 F. Supp. 2d at 546-47). In other
words, OCWD cannot overcome the policy disfavoring piecemeal litigation as required in order
to obtain Rule 54(b) certification. See Brunswick Corp. v. Sheridan, 582 F.2d 175, 183-85 (2d
Cir. 1978) (reflecting “general policy disfavoring piecemeal appeals” in reversing judgment
improperly certified under Rule 54(b)).
IV.

Puerto Rico I & II: Request for Briefing Schedule on Prescription

Plaintiffs’ proposal regarding Defendants’ prescription summary judgment motion(s)
requires comment for several reasons, not the least of which is that they never raised their
proposal in the parties’ discussions concerning prescription and summary judgment briefing.
Also missing from Plaintiffs’ two-page request is that Plaintiffs are unwilling to concede that any
site at issue in either Puerto Rico action is time-barred. 10 Both of these facts inform Defendants’
response to Plaintiffs’ proposal.
First, with regard to Plaintiffs’ request for a single summary judgment motion on
prescription: one size does not fit all. As addressed in Defendants’ opening letter, Defendant
Petrobras will move for summary judgment on the grounds that this Court’s ruling on the
Trammo/ Vitol limitations motions requires Petrobras’ dismissal. (At least one other Defendant
may join this motion.) 11 Other Defendants have different limitations arguments, premised on
different facts. While an “omnibus” summary judgment motion (with enhanced page limits)
might serve to present certain Defendants’ arguments, all Defendants should not be required to
combine disparate motions into one to ease Plaintiffs’ “burden” in responding.
Second, Plaintiffs’ proposed briefing schedule is entirely unrealistic and objectionable.
Plaintiffs would require Defendants to file their initial brief on May 1, 2015 – a week after the
conference – while also asking Defendants to merge their respective “complex” legal arguments
and “myriad” facts into a single brief. Defendants propose the following: the remaining
Defendants (i.e., not Petrobras) will agree to submit an “omnibus” brief so long as the pageextension proposed by Plaintiffs is acceptable to the Court; and will submit initial papers on May
15; Plaintiffs’ Response due on June 15; Defendants’ Reply on June 29. No sur-reply is
warranted. 12 As to Puerto Rico II, Defendants propose that Rule 12 motion practice proceed
with Defendants’ initial papers due on May 22; Plaintiffs’ Responses due on June 5; and
Defendants’ Reply papers on June 19.

10

The Court may recall directing the parties to confer to determine if “some of these motions are
even necessary” and “what’s barred and what’s not barred.” Jan. 15, 2015 Conf. Tr. at 37.
11
As to Defendant Petrobras’s motion for summary judgment, Plaintiffs have agreed to the
briefing schedule proposed in Defendants’ opening preconference letter. Defs.’ Ltr. at 5.
12
Plaintiffs have offered no legitimate grounds to merit a sur-reply at this juncture – the
“complexity” of the issues or the possible “impact” of this Court’s decision do not suffice.

EXHIBIT 2

EXHIBIT 3

Boston Brussels Chicago Düsseldorf Frankfurt Houston London Los Angeles Miami
Milan Munich New York Orange County Paris Rome Seoul Silicon Valley Washington, D.C.
Strategic alliance with MWE China Law Offices (Shanghai)

BY HAND DELIVERY AND ELECTRONIC MAIL

Peter John Sacripanti
Chairman
[e-mail]
[phone]

June 10, 2015

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 Letter for June 18, 2015 Status Conference

Dear Judge Scheindlin:
Defendants respectfully submit this letter in advance of the June 18, 2015 conference.
JOINT AGENDA ITEMS
I.

Commonwealth of Pennsylvania: Proposed CMOs Covering Initial Disclosures

In advance of the last status conference, held on April 24, the parties met-and-conferred
regarding a CMO covering exchange of initial disclosures. While agreement was reached on a
number of issues, certain items remained in dispute, requiring the parties to submit competing
proposals. The Court addressed the disputed provisions on April 24. Therefore, following the
conference, Defendants sent Plaintiff a redline of Defendants’ initial proposed CMO, which
Defendants had edited to reflect all of the Court’s rulings at the April conference. 1 See Email
from A. Bongiorno to M. Axline, with Defs.’ CMO Redline (May 14, 2015) (at Ex. A).
Plaintiff responded with a redline of their own which, Defendants respectfully suggest, is
an improper attempt to seek reconsideration of certain of the Court’s April 24 bench rulings. In
fact, it is Plaintiff’s position that the Court did not resolve the disputed CMO issues at all, but
rather only intended the parties to meet and confer further.

1

See Status Conf. Tr. (Apr. 24, 2015), at 18-19 (ruling on Defs.’ proposed Section II regarding
site and well lists and MTBE data); id. at 20 (ruling on Pl.’s proposed Section V regarding
opening of general liability discovery); id. at 20-25 (ruling on Pl.’s proposed Section III.C
regarding subpoenas to environmental consultants); id. at 25-30 (ruling on Pl.’s proposed
Sections III.A.9-11); id. at 30-33 (ruling on Defs.’ proposed Sections III.A.8-12).

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

340 Madison Avenue New York New York 10173-1922 Telephone: [phone] Facsimile: [phone] www.mwe.com

The Honorable Shira A. Scheindlin
June 10, 2015
Page 4
disagree—and (2) is warranted based on the evidence, that judge can issue an appropriate order.
The Suggestion for Remand is not the place to decide what remedies are available. Rather, it is
the place to state which causes of action the Court is suggesting be remanded for trial.
Accordingly, Defendants request that declaratory relief be removed from the Suggestion of
Remand.
DEFENDANTS’ AGENDA ITEMS
I.

Commonwealth of Puerto Rico II: Report on Status of Rule 12 Motions

Defendants will report to the Court on the status of the Rule 12 motions discussed on the
May 7th teleconference and the parties’ meet-and-confer discussions regarding the need for the
same.
Defendants believe that the island-wide or non-site specific claims asserted in PRII are
duplicative of those same claims asserted in PRI, and are barred pursuant to either the prior
pending action doctrine or the statute of limitations. Defendants have attempted to engage in a
meet-and-confer with Plaintiffs to avoid unnecessary motion practice on this issue (see Ltr. from
M. Dillon to S. Kauff (June 8, 2015), at Ex. C), but, to date, Plaintiffs have taken the position that
they will not discuss this matter until after June 15, when the Commonwealth’s opposition briefs
are due to unrelated statute of limitations motions filed in PRI. Defendants believe that this issue
should be addressed now, particularly given the June 29 deadline for filing briefs in support of
Rule 12 motions directed to PR II.
Similarly, Defendants have also attempted to initiate meet-and-confer discussions with
Plaintiffs in response to their “bill of particulars” served on May 22, with various Defendants
having identified particular inaccuracies in this amplification of Plaintiffs’ pleading. Plaintiffs
have, again, stated that they will respond only “a reasonable time after” filing their opposition
brief on June 15 in the separate PRI action.
II.

OCWD: Shell and BP Defendants’ Request for Rule 54(b) Certification

Having considered the Court’s discussion of Rule 54(b) certification at the April 24, 2015
Status Conference, the Shell and BP Defendants believe that Rule 54(b) certification is the most
appropriate method for resolving any perceived issues arising from the Court’s September 16,
2014 Opinion and Order on the BP and Shell Defendants’ res judicata summary judgment
motion and join OCWD’s April 16, 2015 request that the Court certify that Opinion and Order as
a final judgment. See Pl.’s April 16, 2015 Pre-Conference Ltr., at 5-7. 3

3

The Shell and BP Defendants have been meeting and conferring about possible agreement on
procedural measures to address the issues raised by OCWD at the April 24, 2015 Status
Conference. The parties are continuing to meet and confer and will inform the Court of any
progress either in advance of or at the June 18 Status Conference.