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

Filing 4299

OPINION AND ORDER: For the above reasons, the Orders of July 26, 2013; December 30, 2013; and May 21, 2015 (Dkt. Nos. 315, 357, 601) are VACATED as to the Dismissed Defendants, Trammo Petroleum, Inc.'s Motion to Dismiss for lack of personal jurisdiction is GRANTED, and the remaining Dismissed Defendants are REINSTATED. The parties are directed to submit a joint proposed discovery schedule to this Court by December 18, 2015. (As further set forth in this Order) (Signed by Judge Shira A. Scheindlin on 12/3/2015) Filed In Associated Cases: 1:00-cv-01898-SAS-DCF, 1:07-cv-10470-SAS(kl)

In the Companion Opinion, I overruled that holding. I now hold that the Fraguada
decision is properly interpreted as ending – but not retroactively invalidating – the
automatic tolling of jointly and severally liable defendants under Arroyo v.
Hospital La Concepcion, 130 D.P.R. 596 (1992) and restarting the running of the
statute of limitations.1 Familiarity with the facts and reasoning of the Companion
Opinion is presumed for the purposes of the present Opinion.
The issue currently before the Court is the disposition of the
defendants dismissed from this action based on this Court’s now vacated decisions
(the “Dismissed Defendants”).2 For the reasons set forth below, this Court’s
Orders of July 26, 2013; December 30, 2013; and May 21, 2015 are VACATED as
to the Dismissed Defendants, Trammo Petroleum, Inc.’s Motion to Dismiss for
lack of personal jurisdiction is GRANTED, and the remaining Dismissed
Defendants are REINSTATED.
II.

BACKGROUND
The Dismissed Defendants were all added in the Third Amended

1

See Companion Opinion, Section V.B.

2

The Dismissed Defendants are Idemitsu Apollo Corporation; Peerless
Oil and Chemicals, Inc.; Petrobras America Inc.; Trammo Caribbean, Inc.;
Trammo Petroleum, Inc.; Vitol Inc.; and Vitol S.A.
2

Complaint (“TAC”) on December 3, 2012.3 On July 16, 2013, this Court granted
Motions to Dismiss brought by defendants Peerless Oil and Chemicals, Inc.
(“Peerless”); Trammo Petroleum, Inc. (“TP”); and Trammo Carribean, Inc
(“Caribbean”) (Caribbean and TP together the “Trammo Defendants”) on the
ground that the statute of limitations had run.4 5 The Trammo Defendants moved
for dismissal on alternative grounds as well. Caribbean claimed that it was
incapable of being sued because it had dissolved as a corporation, and TP argued
that because it has never conducted business in Puerto Rico, the Court lacks
personal jurisdiction.6 Because the Trammo Defendants were dismissed on statute
of limitations grounds, the Court declined to decide these alternative grounds for
dismissal.7
On December 30, 2013, this Court granted Motions for Summary
3

See TAC (Dkt. No. 178).

4

See In re MTBE Prods. Liab. Litig., 959 F. Supp. 2d 476 (S.D.N.Y.
2013). The dismissal of Total, S.A. and Total Outre-Mer, S.A. for lack of personal
jurisdiction is not affected by this Opinion.
5

The Court subsequently reaffirmed this decision in response to a
Motion for Reconsideration. See In re MTBE Prods. Liab. Litig., No. 07 Civ.
10470, 2013 WL 4008632 (S.D.N.Y. Aug. 2, 2013).
6

Memorandum of Law in Support of Motion to Dismiss of Trammo
Petroleum, Inc. and Trammo Caribbean, Inc. (“Trammo Mem.”) at 6-8, 15-16
(Dkt. No. 208).
7

See In re MTBE Prods. Liab. Litig., 959 F. Supp. 2d at 498 n. 192.
3

Judgment brought by Vitol, Inc.; Vitol, S.A.; and Idemitsu Apollo Corporation on
the ground that the statute of limitations had run.8 In granting all of the above
Motions, this Court relied on the fact that “Fraguada bars the Commonwealth’s
use of the 2007 filing date to toll the statute of limitations.”9
In light of these two decisions, on May 21, 2015, the Commonwealth
stipulated that an additional TAC defendant, Petrobras America Inc., stood in a
similar position as the other Dismissed Defendants and should therefore be
dismissed.10 The Commonwealth agreed to the stipulation “for purposes of appeal”
of the aforementioned Orders.11
On June 12, 2015, two additional TAC defendants, Shell Western
Supply and Trading Limited and Shell International Petroleum Company Limited
brought a Motion for Summary Judgment on nearly identical statute of limitations
grounds.12 In its Opposition, the Commonwealth brought to this Court’s attention
8

See In re MTBE Prods. Liab. Litig., No. 07 Civ. 10470, 2013 WL
6869410 (S.D.N.Y. Dec. 30, 2013).
9

In re MTBE Prods. Liab. Litig., 959 F. Supp. 2d at 497. Accord In re
MTBE Prods. Liab. Litig., 2013 WL 6869410 at *3-4. The first Complaint in this
action was filed on June 12, 2007.
10

See Order of Dismissal (Dkt. No. 601).

11

Id.

12

See Memorandum of Points and Authorities in Support of the Motion
for Summary Judgment of Shell Western Supply and Trading Limited and Shell
4

subsequent decisions of the Puerto Rico Court of Appeals and District of Puerto
Rico interpreting Fraguada.13 These decisions were nearly unanimous in their
reading of Fraguada that ran contrary to this Court’s prior Orders.14 On October
15, 2015, this Court held oral argument on the statute of limitations tolling issue to
determine if the law of the case should be overruled.15 As a result of that oral
argument, I issued an Order to Show Cause “why this Court should not vacate and
reconsider” the above Orders because I was “concerned that those decisions may
be erroneous.”16
In response to the Order to Show Cause, the Dismissed Defendants
argue that the Commonwealth should be judicially estopped from arguing that the
Arroyo rule applies on the present facts and, in any event, there is not “manifest

International Petroleum Company Limited (Dkt. No. 607).
13

See The Commonwealth of Puerto Rico’s Memorandum of Law in
Opposition to Shell Western Supply and Trading Limited’s and Shell International
Petroleum Company Limited’s Motion for Summary Judgment Based on Statute of
Limitations at 5-11 (Dkt. No. 622).
14

See Companion Opinion, Section IV.C.

15

See 10/15/15 Transcript of Oral Argument, No. 00 Civ. 1898 (Dkt.
No. 4278). This motion is addressed in the Companion Opinion.
16

10/15/15 Order to Show Cause (Dkt. No. 639).
5

injustice” that requires overruling the law of the case.17 In addition, defendants
argue that were the Court to vacate the earlier Orders, “it would reach the same
result, in whole or in part.”18
In support of this final contention, the Dismissed Defendants proffer
three arguments. First, taking a cue from the dissenting justices in Fraguada, they
argue that the doctrine of laches should bar the Commonwealth’s claims.19 Second,
they contend that the statute of limitations requires dismissal of the
Commonwealth’s “island-wide claims” as well as the site-specific claims where
the Commonwealth had notice of MTBE contamination prior to June 12, 2006 –
one year prior to the filing of the initial Complaint.20 To that end, the Dismissed
Defendants request the opportunity to conduct discovery and make appropriate
motions for summary judgment at individual contamination sites.21 Third, the
defendants note that a later phase trial may potentially proceed under a theory of

17

Dismissed Defendants’ Response to the Court’s Order to Show Cause
Why the Court Should Not Vacate and Reconsider the Dismissal Orders (“OSC
Resp.”) at 6 (Dkt. No. 650).
18

Id.

19

See id.

20

Id. at 8-10.

21

See id. at 9-10.
6

market share liability – which only permits several liability, not joint and several.22
Because the Arroyo tolling rule only applies to joint and several liability, no tolling
applies in a case alleging only several liability.23 The defendants request that the
Court require the Commonwealth to identify “their intended liability theory,” and
if the Commonwealth is unwilling to commit to a particular theory, the Dismissed
Defendants “request a ruling that, if Plaintiffs are allowed to pursue in the future an
alternative liability theory that results in several . . . liability, the claims against the
Dismissed Defendants will at such time be dismissed on the basis of limitations.”24
Each of these arguments, as well as the alternative ground for
dismissal brought by TP, is addressed below. Because Caribbean and the
Commonwealth both represent that a stipulation of dismissal in both Puerto Rico
cases is imminent, the Court will withhold a decision on Caribbean’s alternative
ground for dismissal.25
III.

LEGAL STANDARD26

22

See id. at 10.

23

See id.

24

Id. at 10 n. 19.

25

See 11/16/15 Transcript of Conference, 00 Civ. 1898 (Dkt. No. 4294).

26

Because the motions reconsidered here are both Motions for Summary
Judgment and Motions to Dismiss, I address both standards below.
7

A.

Summary Judgment
Summary judgment is appropriate where, “viewing the record in the

light most favorable to the non-moving party . . . ‘there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.’”27 “In
making this determination . . . we resolve all ambiguities and draw all permissible
factual inferences in favor of the party against whom summary judgment is
sought.”28 “A fact is material if it might affect the outcome of the suit under the
governing law, and an issue of fact is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party.”29
“The moving party bears the burden of showing the absence of a
genuine dispute as to any material fact.”30 To defeat a motion for summary
judgment, the non-moving party must “‘do more than simply show that there is
some metaphysical doubt as to the material facts, and may not rely on conclusory

27

Robinson v. Concentra Health Servs., Inc., 781 F.3d 42, 44 (2d Cir.
2015) (quoting Fed. R. Civ. P. 56(a)) (quotations omitted).
28

Simpson v. City of New York, 793 F.3d 259, 265 (2d Cir. 2015)
(quotations omitted).
29

Windsor v. United States, 699 F.3d 169, 192 (2d Cir. 2012), aff’d, 133
S.Ct. 2675 (2013) (quotations and alterations omitted).
30

Crawford v. Franklin Credit Mgmt. Corp., 758 F.3d 473, 486 (2d Cir.
2014) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970)).
8

allegations or unsubstantiated speculation.’”31
“‘The function of the district court in considering the motion for
summary judgment is not to resolve disputed questions of fact but only to
determine whether, as to any material issue, a genuine factual dispute exists.’”32
“‘Credibility determinations, the weighing of the evidence, and the drawing of
legitimate inferences from the facts are jury functions, not those of a judge.’”33
“‘Because the statute of limitations is an affirmative defense, the defendant bears
the burden of establishing by prima facie proof that the limitations period has
expired since the plaintiff’s claims accrued.’”34
B.

Motion to Dismiss
1.

Rule 12(b)(6) Standard

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the court
must “accept[ ] all factual allegations in the complaint as true and draw[ ] all

31

Robinson, 781 F.3d at 44 (quoting Brown v. Eli Lilly & Co., 654 F.3d
347, 358 (2d Cir. 2011)).
32

Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015) (quoting
Kaytor v. Electric Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010)).
33

Crawford, 758 F.3d at 486 (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986)).
34

Szymanski v. Local 3, Int’l Bhd. of Elec. Workers, 577 Fed. App’x 52,
53 (2d Cir. 2014) (quoting Overall v. Estate of Klotz, 52 F.3d 398, 403 (2d Cir.
1995)).
9

reasonable inferences in the plaintiff’s favor.”35 The court evaluates the
sufficiency of the complaint under the “two-pronged approach” set forth by the
Supreme Court in Ashcroft v. Iqbal.36 Under the first prong, a court may “begin by
identifying pleadings that, because they are no more than conclusions, are not
entitled to the assumption of truth.”37 For example, “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not
suffice.”38 Under the second prong of Iqbal, “[w]hen there are well-pleaded factual
allegations, a court should assume their veracity and then determine whether they
plausibly give rise to an entitlement for relief.”39 A claim is plausible “when the
plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.”40 Plausibility
requires “more than a sheer possibility that a defendant has acted unlawfully.”41
When deciding a motion to dismiss, “a district court may consider the facts alleged

35

Grant v. County of Erie, 542 Fed. App’x 21, 23 (2d Cir. 2013).

36

See 556 U.S. 662, 678-79 (2009).

37

Id. at 679.

38

Id. at 678 (citation omitted).

39

Id. at 679.

40

Id. at 678 (citation omitted).

41

Id. (quotations omitted).
10

in the complaint, documents attached to the complaint as exhibits, and documents
incorporated by reference in the complaint.”42 In addition, “[t]he Court may take
judicial notice of filings in other courts ‘not for the truth of the matters asserted in
the other litigation, but rather to establish the fact of such litigation and related
filings.’”43
2.

Rule 12(b)(2) Standard

A plaintiff has the burden of proving personal jurisdiction by a
preponderance of the evidence.44 “[A] plaintiff need only allege facts constituting
a prima facie showing of personal jurisdiction to survive a Rule 12(b)(2) motion.”45
The plaintiff may make such a showing with “an averment of facts that, if credited,
would suffice to establish jurisdiction over the defendant.”46 “The Court may rely
on the allegations contained in the complaint as well as on affidavits submitted by
42

DiFolco v. MSNBC Cable LLC, 622 F.3d 104, 111 (2d Cir. 2010)
(citing Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002)).
43

Brandon v. Musoff, No. 10 Civ. 9017, 2012 WL 135592, at *3
(S.D.N.Y. Jan. 17, 2012) (quoting Global Network Commc’ns, Inc. v. City of New
York, 458 F.3d 150, 157 (2d Cir. 2006)).
44

See Koehler v. Bank of Bermuda Ltd., 101 F.3d 863, 865 (2d Cir.

1996).
45

M & M Packaging v. Kole, 183 Fed. App’x 112, 114 (2d Cir. 2006)
(alteration in original) (citations omitted).
46

Penguin Grp. (USA) Inc. v. American Buddha, 609 F.3d 30, 35 (2d
Cir. 2010) (quotation marks and citations omitted).
11

the parties, and must draw all inferences and resolve any doubts in favor of the
plaintiffs notwithstanding contrary information proffered by the moving parties.”47
However, the Court “will not draw argumentative inferences in the plaintiff’s
favor, nor must we accept as true a legal conclusion couched as a factual
allegation.”48
A court must undertake a “two-step inquiry” to determine if it can
exercise personal jurisdiction over a defendant.49 “First, we determine whether the
defendant is subject to jurisdiction under the law of the forum state . . . Second, we
consider whether the exercise of personal jurisdiction over the defendant comports
with the Due Process Clause of the United States Constitution.”50 Because Puerto
Rico’s long-arm statute “extends personal jurisdiction as far as the Federal
Constitution permits,” the only inquiry is whether the exercise of jurisdiction

47

General Elec. Capital Corp. v. Titan Aviation, LLC, No. 06 Civ. 4795,
2007 WL 107752, at *3 (S.D.N.Y. Jan. 16, 2007) (citing A.I. Trade Fin., Inc. v.
Petra Bank, 989 F.2d 76, 79-80 (2d Cir. 1993)).
48

In re Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir.
2013) (citations and quotations omitted).
49

Sonera Holding B.V. v. Cukurova Holding A.S., 750 F.3d 221, 224 (2d

Cir. 2014).
50

Id.
12

comports with the demands of the Due Process Clause.51 Personal jurisdiction may
be exercised “‘if the defendant has certain minimum contacts with [the State] such
that the maintenance of the suit does not offend traditional notions of fair play and
substantial justice.’”52
The Commonwealth alleges only specific jurisdiction over TP in this
case.53 Specific jurisdiction requires both a “minimum contacts” and a
“reasonableness” inquiry. First, the plaintiff must demonstrate that “the claim
arises out of, or relates to, the defendant’s contacts with the forum.”54 As the
Supreme Court recently explained, “the relationship [between the defendant and
the forum state] must arise out of contacts that the ‘defendant himself’ creates with

51

Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir. 1994) (citing Dalmau
Rodriguez v. Hughes Aircraft Co., 781 F.2d 9, 12 (1st Cir. 1986)).
52

Sonera Holding, 750 F.3d at 225 (quoting Goodyear Dunlop Tires
Operations, S.A. v. Brown, 131 S.Ct. 2846, 2853 (2011)) (quotations omitted)
(alterations in original).
53

See Plaintiffs’ Opposition to Motion to Dismiss by Defendants
Trammo Petroleum, Inc. and Trammo Caribbean, Inc. (“Opp. to Trammo Motion”)
at 2.
54

Licci ex rel. Licci v. Lebanese Canadian Bank, 732 F.3d 161, 170 (2d
Cir. 2013). Accord Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)
(for the proper exercise of specific jurisdiction, the defendant must have
“purposefully directed” his activities toward the forum and the litigation must
“arise out of or relate to” those activities).
13

the forum State.”55 Though “a defendant’s contacts with the forum State may be
intertwined with his transactions or interactions with the plaintiff or other
parties . . . a defendant’s relationship with a plaintiff or third party, standing alone,
is an insufficient basis for jurisdiction.”56 “Due process requires that a defendant
be haled into court in a forum State based on his own affiliation with the State, not
based on the ‘random, fortuitous, or attenuated’ contacts he makes by interacting
with other persons affiliated with the State.”57 Second, jurisdiction must be
reasonable.58 Courts weigh the following factors in evaluating the
“reasonableness” requirement of due process:
(1) the burden that the exercise of jurisdiction will impose on the
defendant; (2) the interests of the forum state in adjudicating the
case; (3) the plaintiff’s interest in obtaining convenient and
effective relief; (4) the interstate judicial system’s interest in
obtaining the most efficient resolution of the controversy; and (5)
the shared interest of the states in furthering substantive social
policies.59

55

Walden v. Fiore, 134 S.Ct. 1115, 1122 (2014) (quoting Burger King,
471 U.S. at 475).
56

Id. at 1123 (citation omitted).

57

Id. (quoting Burger King, 471 U.S. at 475).

58

See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292

(1980).
59

Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480 U.S. 102, 113-14

(1987).
14

IV.

APPLICABLE LAW
In Puerto Rico, Article 1802 of the Civil Code, L.P.R.A. section 5141,

governs obligations that “arise from fault or negligence.”60 “The statute of
limitations for these actions is one year as provided by Art. 1868 of the Civil Code,
31 L.P.R.A. sec[tion] 5298.”61 In Puerto Rico, the limitations period runs from the
time the aggrieved party has “notice of the injury, plus notice of the person who
caused it.”62 Once a defendant has established that the injury occurred more than
one year prior to the filing of the TAC, i.e., December 3, 2011, the plaintiff “‘bears
the burden of proving that [it] lacked the requisite knowledge at the relevant
times.’”63
“Art. 1873 of the Civil Code, 31 L.P.R.A. sec. 5303 establishes that
the expiration of the statute of limitations in actions is tolled by [1] exercising them
in court, [2] by an extrajudicial claim by the creditors, and [3] by any other act of

60

Fraguada at *3 (certified translation) (Dkt. No. 277).

61

Id. (alterations in original).

62

Rodriguez-Suris v. Montesinos, 123 F.3d 10, 13 (1st Cir. 1997)
(quotation and citations omitted).
63

Alejandro-Ortiz v. Puerto Rico Elec. Power Auth., 756 F.3d 23, 27
(1st Cir. 2014) (quoting Hodge v. Parke Davis & Co., 833 F.2d 6, 7 (1st Cir.
1987)).
15

acknowledgment of debt by the debtor.”64 On August 13, 2012, the Puerto Rico
Supreme Court changed the rule governing the application of these tolling
mechanisms in Fraguada. As this Court interprets the Fraguada opinion, “that
decision ended Arroyo tolling and restarted the running of the statute of limitations
for imperfectly jointly and severally liable co-tortfeasors.”65
V.

DISCUSSION
As an initial matter, this Court has the power to sua sponte revise all

non-final judgments under Federal Rules of Civil Procedure 54(b):66
[A]ny order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties does not end the action as to any of the
claims or parties and may be revised at any time before the entry
of a judgment adjudicating all the claims and all the parties’ rights
and liabilities.
The Court’s power to revise its earlier decisions, however, is constrained by the
law of the case doctrine. The Dismissed Defendants argue that the Court should
not overturn the law of the case because the Commonwealth would not suffer

64

Fraguada at *3.

65

Companion Opinion, Section V.B.

66

See Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d
207, 212 (2d Cir. 2010) (“Sinoying does not dispute that the District Court was
empowered to revisit and vacate sua sponte the order attaching YDX’s assets in
New York.”).
16

manifest injustice.67 This argument misses the mark. Manifest injustice is only
one possible justification for overturning the law of the case.68 As explained in
more detail in the Companion Opinion, Section V.A, this Court’s decision to
overturn the law of the case rests on its conclusion that the earlier Orders were
clear error, not that the Commonwealth would suffer manifest injustice.
The Dismissed Defendants briefly press the argument that judicial
estoppel should prevent the Commonwealth from asserting that Arroyo tolling
applies in the present case because the Commonwealth apparently argued that
Arroyo tolling did not apply on similar facts to the Puerto Rico Court of Appeals in
Cubero Aponte v. Autoridad de Acueductos y Alcantarillados de P.R., 2014 WL
7474663 (T.C.A. Oct. 10, 2014).69 The defendants spend little time developing this
argument and for good reason. Judicial estoppel does not constrain the legal
conclusions this Court may reach nor does it serve to prevent the Court from

67

See OSC Resp. at 2-6.

68

See Ali v. Mukasey, 529 F.3d 478, 490 (2d Cir. 2008) (holding that the
law of the case should not be overturned “absent ‘cogent’ and ‘compelling’ reasons
such as ‘an intervening change of controlling law, the availability of new evidence,
or the need to correct a clear error or prevent manifest injustice’” (quoting United
States v. Tenzer, 213 F.3d 34, 39 (2d Cir. 2000))).
69

See OSC Resp. at 2.
17

correcting a previous error of law.70
The Dismissed Defendants have failed to provide any persuasive
reason why this Court should not vacate its earlier Orders after concluding in the
Companion Opinion that they rest on a clear error of law.71
A.

Arguments Against Vacatur Raised in Response to the Order to
Show Cause
The Dismissed Defendants argue that even if this Court were to vacate

the earlier dismissals, it would reach the same conclusion on other grounds. That
other grounds may justify the same ultimate conclusion does nothing to prevent
this Court from correcting an error of law, nor should it. Indeed, the arguments
70

See 28 Am. Jur. 2d Estoppel and Waiver § 68. In any event, the
Dismissed Defendants have not demonstrated that the Commonwealth would gain
an “unfair advantage,” as they must, to invoke judicial estoppel. United States v.
Szpyt, 785 F.3d 31, 41 (1st Cir. 2015) (“A third consideration is whether the party
seeking to assert an inconsistent position would derive an unfair advantage or
impose an unfair detriment on the opposing party if not estopped.”).
71

It is worth noting that courts have occasionally found due process
concerns to be implicated when a defendant is reinstated much later in the same
legal proceedings. No such concerns arise here. The Dismissed Defendants were
given notice, the opportunity to be heard, and will be given the opportunity to
conduct discovery and make motions as needed. See, e.g., United States v. State of
Ark., 791 F.2d 1573, 1576-77 (8th Cir. 1986) (holding that due process required
additional proceedings before a finding of liability could be applied to a reinstated
defendant); Dillon v. Cobra Power Corp., 560 F.3d 591, 595-97 (6th Cir. 2009)
(holding that reversal of an earlier summary judgment decision based on evidence
presented at trial violated the dismissed defendants due process rights); AlbertyVelez v. Corporacion De Puerto Rico Para La Difusion Publica, 242 F.3d 418,
423-26 (1st Cir. 2001) (same).
18

that laches and statute of limitations for island-wide and site-specific claims would
lead to the same result actually necessitate first vacating the earlier opinions and
reinstating the Dismissed Defendants in order to allow them to conduct the
necessary discovery and make motions on these grounds.
The one argument that must be addressed – because it goes directly to
the statute of limitations ground – is that proceeding on a theory of market share
liability would eliminate Arroyo tolling, which only applies to jointly and severally
liable tortfeasors. The Dismissed Defendants correctly note that market share
liability is not joint and several.72 Nonetheless, at this stage of the proceedings, the
Court must rely on the claims as alleged in the Complaint to determine if the
statute of limitations is tolled.
Market share liability is not a single concept and can be either a theory
of causation or a means for apportioning liability. In the first instance, it is “an
evidentiary tool that allows a plaintiff to prove causation”73 and serves as a
72

See In re MTBE Prods. Liab. Litig., 739 F. Supp. 2d 576, 598
(S.D.N.Y. 2010) (“[D]amages [under market share liability] are apportioned
according to each defendant’s share of the market at the time of injury, and thus,
liability is several, rather than joint and several.”); In re MTBE Prods. Liab. Litig.,
447 F. Supp. 2d 289, 299-300 (S.D.N.Y. 2006) (“Under market share liability . . .
each defendant is severally liable for the portion of the judgment that represented
its share of the market at the time of the injury.”).
73

In re MTBE Prods. Liab. Litig., 517 F. Supp. 2d 662, 668 (S.D.N.Y.

2007).
19

“surrogate for proof.”74 Some courts, however, have used market share liability
“as a surrogate for dividing the aggregate damages” after culpability has been
established.75 In any event, market share liability is a juridical tool for providing
equitable relief, “not an independent claim.”76
Under Arroyo, tolling is contingent on the claims, not the ultimate
resolution of the litigation. As the Arroyo court wrote, “the obligation [to remedy
harm] does not arise from the will of the parties, it is unilateral, by virtue of a
person’s voluntary act vis-a-vis another person; and the law acknowledges and
sanctions the natural obligation of repairing the damages claimed.”77 At this
juncture, the key question is whether the claims alleged give rise – as a matter of
law – to joint and several liability.78 Here, the TAC sufficiently alleges that
“Defendants are jointly and severally liable for the full costs of all investigatory,
remedial, removal, and other actions necessary to detect, delineate, abate, remove

74

Restatement (Third) of Torts: Apportionment of Liability § 26
reporter’s note n (1999).
75

Id.

76

In re MTBE Prods. Liab. Litig., 517 F. Supp. 2d at 668.

77

Arroyo, 130 D.P.R. 596 (official translation) (quotations omitted).

78

See Tokyo Marine & Fire Ins. Co. v. Perez & Cia., De Puerto Rico,
Inc., 142 F.3d 1 (1st Cir. 1998) (discussing whether, as a matter of law, an insurer
may be held jointly and severally liable with a tortfeasor).
20

and remediate MTBE in the waters of the Commonwealth.”79 Whether any given
defendant is in fact jointly and severally liable for the injury alleged cannot be
determined at this stage of the proceedings.80 If, at the end of the day, liability – as
a matter of law – is not joint but only several, then any verdict must be vacated if
the one-year limitations period had expired as to any particular defendant at the
time that defendant was sued.
B.

Statute of Limitations Reconsideration
All of the Dismissed Defendants, except Idemitsu, assert that the

Commonwealth necessarily had knowledge of the alleged injury – MTBE
contamination to the waters of the Commonwealth – at the time the initial
Complaint was filed in 2007.81 The memoranda of law then articulate a date by

79

TAC, Request for Relief ¶ A (note ¶ 19 clarifies that “[w]hen the term
‘Defendants’ is used alone, it refers to all Defendants
named herein jointly and severally”).
80

Indeed, the Puerto Rican Civil Code recognizes that “solidarity does
not presuppose that the scope or source of liability is identical for each solidary
debtor. To the contrary, ‘[s]olidarity may exist, even though the creditors and
debtors are not bound in the same manner, and for the same periods and under the
same conditions.’” Tokyo Marine, 142 F.3d at 6 (quoting P.R. Laws Ann. tit. 31, §
3104).
81

See Trammo Mem. at 12; Defendant’s Vitol S.A. and Vitol, Inc.’s
Memorandum of Law in Support of Motion for Summary Judgment (“Vitol
Mem.”) at 8-10 (Dkt. No. 336); Memorandum of Law in Support of Motion to
Dismiss of Peerless Oil & Chemicals, Inc. (“Peerless Mem.”) at 14 (Dkt. No. 233).
21

which they claim the Commonwealth had knowledge of the individual defendant’s
gasoline or MTBE activity in Puerto Rico.82
Idemitsu, for its part, provides site-by-site dates for when the
Commonwealth knew of MTBE contamination and points to a discovery response
from ConocoPhillips in 2008 naming Idemitsu as a gasoline wholesaler as the date
the Commonwealth knew of Idemitsu’s identity, thereby triggering the running of
the one-year statute of limitations.83
Under the Arroyo rule, the filing of the initial Complaint tolled the
statute of limitations as to the later-added jointly and severally liable defendants.84
Therefore, even if knowledge of the injury is imputed to the Commonwealth on the
date the Complaint was filed, the filing of the Complaint tolled the statute of
limitations. Idemitsu’s argument similarly fails because the 2008 date by which
the Commonwealth allegedly had knowledge of Idemitsu’s activity in Puerto Rico
came after the Complaint was filed and tolling began. The Puerto Rico Supreme
Court’s decision in Fraguada ended that tolling period and restarted the running of

82

See Trammo Mem. at 12-15; Vitol Mem. at 9-10; Peerless Mem. at

14-15.
83

See Idemitsu Apollo Corporation’s Memorandum of Law in Support
of Its Motion for Summary Judgment at 2-4 (Dkt. No. 343).
84

See Companion Opinion, Section IV.A.
22

the one-year statute of limitations on August 13, 2013. The Commonwealth
alleged that the Dismissed Defendants are jointly and severally liable for the
aggregated harm to the waters of the Commonwealth in the TAC which was filed
less than three months later on December 3, 2012.
While the motions addressed here are both motions to dismiss and for
summary judgment, under either standard, all of the Dismissed Defendants were
timely added. Because the Commonwealth stipulated to the dismissal of Petrobras
on the basis that Petrobras “is also a Later-Added Defendant and subject to the
same treatment by this Court as Peerless, Trammo, Vitol, and Idemitsu,” justice
demands that Order be vacated as well.85
C.

Personal Jurisdiction Over Trammo Petroleum
Having determined that the statute of limitations decision was in error,

I now turn to whether this Court may exercise personal jurisdiction over TP. I
conclude that the Commonwealth has failed to make out a prima facie case of
personal jurisdiction because it has not demonstrated a sufficient relationship with
the forum “aris[ing] out of contacts that the ‘defendant [itself]’ create[d].”86 In the
TAC, the Commonwealth names TP as one of the “Refiner/Supplier Defendants,”

85

Order of Dismissal (Dkt. No. 601).

86

Walden, 134 S.Ct. at 1122 (quoting Burger King, 471 U.S. at 475).
23

asserting Claims I through V against this group of defendants based on the factual
allegations in paragraphs 88 to 95. In support of these allegations, the
Commonwealth points to the 2004 annual report from the United States Energy
Information Agency (“EIA”) naming “Trammo Petro Inc.” as the importer of
approximately 25,000 barrels of MTBE from Venezuela to Guayanilla, Puerto Rico
in November 2004.87 In addition, the Commonwealth provides emails and
documentation that refer generically to “Trammo” as the supplier of gasoline
products to Peerless in Puerto Rico.88 These emails contain discussions among
Peerless, Total Petroleum Puerto Rico (“Total”), and Gasolinas de Puerto Rico
about the details of Peerless supplying gasoline to Total, and the documentation
reflects Total’s notes about the supply scheme, including the chain of supply and
relevant price points.89
These documents are insufficient to support personal jurisdiction even
when viewed in the light most favorable to the Commonwealth. TP provides
extensive affidavits and documentation that this singular report naming “Trammo

87

See Opp. to Trammo Motion at 5 (citing Declaration of Daniel Boone
in Support of Plaintiffs’ Opposition to Motion to Dismiss by Defendants Trammo
Petroleum, Inc. and Trammo Caribbean, Inc. (“Boone Decl.”), Ex. 2).
88

See id. (citing Boone Decl., Ex. 3.).

89

See id.
24

Petro Inc.” was in error; Caribbean should have been named instead. Indeed, the
EIA’s own website states that “analysis . . . reveals that some imports are not
correctly reported.”90 Caribbean’s corporate records reveal that it purchased
24,889 barrels of MTBE, originating in Venezuela, and delivered to Guayanilla,
Puerto Rico on November 4, 2004.91 In addition, a U.S. Customs Broker invoice
shows that Caribbean – not TP – imported MTBE originating in Venezuela to
Puerto Rico on November 4, 2004.92
The emails that refer to “Trammo” must also be read to refer to
Caribbean. Every mention of Trammo in the nine pages of emails and notes
provided to the Court refers solely to Trammo supplying gasoline directly to
Peerless who then sold that gasoline to Total.93 This makes sense because, as TP
points out, Caribbean – not TP – had a gasoline supply contract with Peerless at
that time.94 In this context, no fair inference can be drawn that these references to
“Trammo” referred to TP.
90

Boone Decl., Ex. 2.

91

See May 29, 2013 Declaration of William E. Markstein ¶¶ 6, 7 (Dkt.

No. 279).
92

See id. ¶ 8.

93

See Boone Decl., Ex. 3.

94

See April 12, 2013 Declaration of William E. Markstein ¶ 8 (Dkt. No.

209).
25

The Commonwealth does not allege that TP had any other contacts
with Puerto Rico. The evidence related to the single shipment of MTBE taken
together with TP’s affidavit stating that “it does not and did not conduct business
or sell gasoline in Puerto Rico, either itself or through an intermediary, or have any
agents in Puerto Rico,”95 convince this Court that TP does not have sufficient
minimum contacts for this Court to exercise personal jurisdiction.
Finally, in an attempt to manufacture personal jurisdiction, the
Commonwealth alleges new facts in its Opposition to supports its new contention
that Caribbean was an alter ego of TP. Yet these allegations – or any facts
supporting them – do not appear anywhere in the TAC, and the Commonwealth
has never asked this Court to pierce Caribbean’s corporate veil. This last ditch
effort to create personal jurisdiction must fail because “the Complaint cannot be
amended by the briefs in opposition to a motion to dismiss.’”96
VI.

CONCLUSION
For the above reasons, the Orders of July 26, 2013; December 30,

2013; and May 21, 2015 (Dkt. Nos. 315, 357, 601) are VACATED as to the

95

See id. ¶ 3.

96

U.S. Bank Nat. Ass’n v. PHL Variable Ins. Co., No. 12 Civ. 6811,
2013 WL 791462, at *2 (S.D.N.Y. Mar. 5, 2013) (quoting O’Brien v. National
Prop. Analysts Partners, 719 F.Supp. 222, 229 (S.D.N.Y. 1989)).
26

- Appearances Liaison Counsel for Plaintiff:
Robin Greenwald, Esq.
Robert Gordon, Esq.
Weitz & Luxenberg, P.C.
180 Maiden Lane
New York, NY 10038
[phone]
Counsel for Plaintiff:
John D.S. Gilmour, Esq.
Jackson Gilmour & Dobbs, P.C.
3900 Essex, Suite 700
Houston, TX 77027
[phone]
Jorge L. Flores, Esq.
Legal Counsel
Puerto Rico Department of Justice
Olimpo Street, Pda. 11
San Juan, PR 00907
[phone]
John K. Dema, Esq.
Law Offices of John K. Dema, P.C.
1236 Strand Street, Suite 103
Christiansted, VI 00820
[phone]
Orland H. Martinez, Esq.
Orland H. Martinez Law Offices
Centra de Seguros, Suite 413
701 Ponce de Leon Avenue
San Juan, PR 00907
[phone]

28

Michael Axline, Esq.
Miller Axline
1050 Fulton Avenue, Suite 100
Sacramento, CA 95825
[phone]
Liaison Counsel for Defendants:
Peter J. Sacripanti, Esq.
James A. Pardo, Esq.
Michael J. Dillon, Esq.
McDermott Will & Emery LLP
50 Rockefeller Plaza, 11th Floor
New York, NY 10020
[phone]
Counsel for Idemitsu Apollo Corporation:
David N. Lutz, Esq.
Theodore Dorenkamp, Esq.
Bowman and Brooke LLP
150 South Fifth Street, Suite 3000
Minneapolis, MN 55402
[phone]
Robert D. Wilson, Jr., Esq.
Littleton Joyce Ughetta Park & Kelly LLP
4 Manhattanville Road, Suite 202
Purchase, NY 10577
[phone]
Counsel for Peerless Oil and Chemicals, Inc.:
Adrian Sánchez-Pagán, Esq.
Sánchez-Pagán, LLC
P.O. Box 365006
San Juan, PR 00936
[phone]
29

Counsel for Petrobras America Inc.:
James B. Harris, Esq.
David C. Shulte, Esq.
Thompson & Knight LLP
1722 Routh Street, Suite 1500
Dallas, TX 75201
[phone]
Counsel for Trammo Petroleum, Inc. and Trammo Caribbean, Inc.:
Barry R. Temkin, Esq.
Sara N. Lewis, Esq.
Mound Cotton Wollan & Greengrass LLP
One New York Plaza
New York, NY 10004
[phone]
Counsel for Vitol S.A. and Vitol Inc.:
Peter Ligh, Esq.
Meghana D. Shah, Esq.
Travis J. Mock, Esq.
Sutherland Asbill & Brennan LLP
1114 Avenue of the Americas
New York, NY 10036
[phone]

30