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

Filing 4372

MEMORANDUM OF LAW in Opposition re: (243 in 1:14-cv-06228-SAS) MOTION to Dismiss for Lack of Jurisdiction and Failure to State a Claim. . Document filed by The Commonwealth of Pennsylvania. Filed In Associated Cases: 1:00-cv-01898-SAS-DCF, 1:14-cv-06228-SAS(Axline, Michael)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

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

Master File No. 1:00-1898
MDL 1358 (SAS)

This Document Relates To:

The Honorable Shira A. Scheindlin

Commonwealth ofPennsylvania v. Exxon Mobil
Corporation, et al., Case No. 14'-CV-06228

PLAINTIFF COMMONWEALTH OF PENNSYLVANIA'S OPPOSITION TO
DEFENDANT LUKOIL AMERICAS CORPORATION'S MOTION TO DISMISS FOR
LACK OF PERSONAL JURISDICTION AND FAILURE TO STATE A CLAIM

Table of Contents

Table of Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
I.

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II.

Statement of the Case. . ................................................... 3

III.

Facts. . ................................................................ 4

IV.

Pennsylvania Has Jurisdiction Over LAC ..................................... 10
A.

LAC's Motion to Dismiss Mischaracterizes the Commonwealth's Complaint and
Consequently Ignores Key Facts ...................................... 13

B.

LAC's Use of GPMI As an Agent for LAC Provides a Basis for Pennsylvania to
Exercise Jurisdiction Over LAC. ..................................... 14
1.

2.

C.

The Evidence Demonstrates LAC Used GPMI for LAC's Pecuniary
Benefit in Pennsylvania. . .................................... 14
LAC's Domination Over GPMI Meets the Test for Ascribing GPMI's
Conduct to LAC for Jurisdictional Purposes. . .................... 18

The Extent ofLAC's Control Over GPMI is Demonstrated by LAC's Fraudulent
Transfer of GPMI' s Properties Two Year Prior to Steering GPMI into
Bankruptcy .......... , ........................................... 20

V.

The Commonwealth Supports LAC's Request for an Evidentiary Hearing........... 22

VI.

The Complaint Adequately Pleads a Cause of Action Against LAC. . .............. 22
Conclusion ............................................................ 24

1

Table of Authorities

Bell Atl. Corp. v. Twombly,
550 U.S. 544, 555 (2007) ................................................. 24
Colandrea v. Colandrea,
42 Md. App. 421 (1979) ................................................. 19
Commonwealth ex rel. Pappert v. TAP Pharmaceuticals Products, Inc.,
868 A.2d (Pa. Commw. Ct. 2005) ....................................... 11, 14
Daval Steel Prod. v. MIV Fakredine,
951 F.2d (2d. Cir. 1991) ............................................ 13-14, 21
Dixon v. Process Corp.,
38 Md. App. 644, 382 A.2d (1978) ......................................... 19
Gao v. JPMorgan Chase & Co.,
No. 14 Civ. 4281 (S.D.N.Y. 2015) ........................................ 23
Hildreth v. Tidewater Equip. Co.,
378 Md. 724, 838 A.2d (2003) ........................................... 19
In re GPMI,
No. 11-02941-scc, (Ban1a. S.D.N.Y.) ......................................... 7
Inre GPMI,
No. 11-15606-scc, (Ban1a. S.D.N.Y.) ........................................ 7
In re Lupron Marketing and Sales Practices Litigation,
245 F. Supp.2d (D. Mass. 2003 ......................................... 11, 14
InreMTBE,
No. 1:00-1898, 2008 WL 3163634 (S.D.N.Y. 8/06/08) ......................... 24
In re MTBE, No. 1358,
959 F.Supp.2d (S.D.N.Y. 2013) ............................................ 22
Mylan Laboratories, Inc. v. Azko, NV,
2 F3d. (41h Cir. 1993) ............................................. 11, 12, 18

11

Schlossberg v. Bell Builders Remodeling, Inc.,
441 Md. 671, 109 A.3d (2015) ............................................ 19
Walden v. Fiore,
134 S.Ct. 1115 (2014) ................................................... 12
Statutes

11 U.S.C. Sect. 548 ............................................................ 7
42 Pa. C.S.A. § 5322. . .................................................... 1, 3, 11
Fed. R. Civ. P. 8 ............................................................ 22, 23

111

I.

INTRODUCTION.
Lukoil Americas Corporation (LAC) is not simply a holding company. Rather, LAC actively

conducts the business of OAO Lukoil, its parent corporation, in the United States, including in
Pennsylvania. LAC's activities between 2000 and 2011 included marketing MTBE contaminated
gas stations for sale in Pennsylvania and directing operations of Getty Petroleum Marketing, Inc.
(GPMI), at MTBE contaminated gas stations in Pennsylvania. Accordingly, LAC is subject to the
jurisdiction of Pennsylvania courts under Pennsylvania's long arm statute, 42 Pa. C.S.A. § 5322.
LAC's assertion that it merely "hold[s] stock and facilitat[es] financing for its subsidiaries"
(Motion to Dismiss (hereafter "Mot.") at 3) is directly contradicted by LAC's own actions and
admissions, including in these MDL proceedings. LAC admits in its' Master Answer, for example,
that: "Since October, 2000, LAC admits that, for certain periods during an individual year, LAC,
by and through its wholly owned subsidiary, GPMI, purchased and distributed gasoline containing
MTBE .... " Declaration of Molly McGinley Han (hereafter "Han Deel."), Ex. 1-a (Master Answer
at 1-2) and 1-b (Second Amend. Master Answer at 1-2). 1
LAC also affirmatively represented to lenders, in order to obtain multi-million dollar lines
of credit between 2000 and 2011, that: "Lukoil's management is fully committed to playing a
significant role in the management of Getty given its· extensive experience in the retail gasoline
business and as part of its strategy to expand into the U.S. Lukoil is active in the decision making

1

LAC filed its Second Master Answer in the New Jersey matter. In New Jersey, LAC did
not move to dismiss based on lack of personal jurisdiction, but instead acknowledged that "LAC,
by and through its wholly owned subsidiary, GPMI, purchased and distributed gasoline
containing MTBE .... " . Id. The SAC alleges LAC is responsible for liabilities of both GPMI
and Lukoil North America. Both entities owned stations and did business in Pennsylvania. LAC
admitted in its Interrogatory Responses that LNA has over 50 MTBE release sites in
Pennsylvania (Han Deel. Ex. 3-a).
1

and strategic planning processes at Getty (such as the rebranding campaign, modernization of
existing sites and expansion into the blending and supply business)." Han Deel., Ex. 2-a (Calyon
Loan) at LAC002457.
The stations LAC managed included more than 100 MTBE-contaminated stations in
Pennsylvania. See, e.g., Han Deel., Ex. 3-a & 3-b. Many of these stations were rebranded "Lukoil"
at the direction of LAC. Han Deel. Ex. 4-a (LAC Unanimous Written Consent (2/06/03) (directing
$3 million to be infused to GPMI to rebrand Getty stations with the Lukoil trademark(s)); see also
·Han Deel., Ex. 2-a (Calyon Loan) at LAC002476, stating, "As a result of its purchase of Getty and
acquisition of certain ConocoPhillips gas stations, Lukoil owns a total of2,035 stations in the U.S.
as of January 1, 2005" (emphasis added). LAC was clearly aware of potential liability for MTBE
contamination at these stations. Han Deel., Ex. 13-a.
LAC directly marketed gas stations in Pennsylvania (including MTBE-contaminated
stations), without any mention of GPMI. LAC offered for sale "All Sites Located Throughout The
State Of Pennsylvania," including "89 Prime Retail Gasoline Sites," consisting of "61 Fee Simple
Properties" and "28 Leased Properties" that were "Branded Lukoil." Han Deel., Ex. 4-b & 4-c.
Contrary to the assertion by Mr. DeLaurentis that "LAC has never represented itself as GPMI," and
that LAC "has officers and directors, but has never had any non-officer employees," monthly reports
to Russia represented that it was "Lukoil Americas Corporation" that owned more than a thousand
service stations and had hundreds of employees. Compare Delaurentis Deel. at if 13 &

if 34 with Han

Deel. Ex. 14-c ("2008 Monthly Report" indicating that Lukoil Americas Corporation had 1571 gas
stations and 709 employees in December, 2008).

2

LAC's direct involvement in business activities in Pennsylvania began even before it
acquired GPMI. Prior to purchasing GPMI in 2000, LAC itself negotiated directly with GPMI's
then-owner Getty Realty (a/k/a Getty Properties Corporation) to alter the terms of the Master Lease
governing GPMI gas stations, including stations contaminated with MTBE in Pennsylvania. Han
Deel., Ex. 5-a (In re GPMI Adv. Proc. 5/28/13 Trans. ofV. Gluzman (hereafter "5/28/13 Gluzman
Trans.") at 967- 968). After obtaining concessions for the Master Lease, LAC then purchased GPMI
and immediately took the company private. Han Deel., Ex. 6-c. Between 2000 and 2011 LAC
managed GPMI for the benefit of LAC and OAO Lukoil, treating GPMI as either an agent for or a
division of Lukoil rather than as an independent, separately owned business. 2
LAC's motion to dismiss for lack of personal jurisdiction should be denied. LAC's direct
activities and control of businesses in Pennsylvania more than satisfies Pennsylvania's long arm
statue, 42 Pa. C.S.A. § 5322.
LAC also argues that the allegations in the Second Amended Complaint ("SAC") are too
"cursory" to state a claim. Mot. at 23. Although the Federal Rules require only notice pleading, Fed.
R. Civ. P. 8(a), the SAC is replete with specific allegations about LAC, including 51 new paragraphs

based upon jurisdictional discovery conducted by the Commonwealth subsequent to the filing of the
initial complaint. See SAC at 100-110, ifif 296-347.

II.

STATEMENT OF THE CASE.
On December 14, 2014, LAC moved to dismiss the First Amended Complaint based on lack
2

Although the Commonwealth believes the evidentiary hearing requested by LAC is
unnecessary given the extensive evidence ofLAC's business activities in Pennsylvania, the
Commonwealth would welcome such a hearing. Having LAC's principals testify under oath
before the Court would help clarify for the Court the extent to which LAC was not simply
"holding stock and arranging financing for subsidiaries," but rather directly participating in the
management and operations of GPMI.
3

of jurisdiction. Plaintiff sought, and was granted, time to pursue jurisdictional discovery. 3 The
Com.m.onwealth subsequently obtained over 433,000 documents (approximately 750,000 pages),
including relevant documents that had been silentlym.igrated from. GPMI to LAC in 2009 and which
LAC did not acknowledge or identify until the Com.m.onwealth inquired about them. after reviewing
documents filed by the Trustee in GPMI's bankruptcy. 4
Based in part upon this discovery, the Com.m.onwealth filed its Second Am.ended Com.plaint,
adding 51 paragraphs under a new section titled, "The Lukoil Defendants Are Directly and
Vicariously Liable for GPMI's Environmental Liabilities." (SAC at 100-110,

iii! 296-347). In

addition, the SAC added claims againstLAC's subsidiary Lukoil North America, LLC ("LNA") and
against LAC's parent company, OAO Lukoil n/k/a PJSC Lukoil.

III.

FACTS.
As noted above, in 2000, LAC began direct negotiations with Getty Realty to purchase

GPMI. As part of those negotiations, LAC demanded changes to the "Master Lease" governing
Getty gas stations, including stations in Pennsylvania. Han Deel., Ex. 5-a (5/28/13 Gluzm.an Trans.
at 967-968). LAC and its CEO, Mr. Gluzm.an, negotiated am.endm.ents that directlyim.pacted leases
for gasoline stations throughout the Com.m.onwealth, including the allocation of environmental

3

In jurisdictional discovery the Com.m.onwealth sought documents and a 30(b)(6)
deposition from. LAC. The 30(b)(6) deposition has not yet been taken because approximately
750,000 pages of documents were provided in November and December, 2015, including
approximately 400,000 documents ofESI materials from. GPMI and are still being reviewed and
the parties are still meeting and conferring regarding LAC's claim. of privilege of withheld
materials. If the Court is inclined to allow an evidentiary hearing, the Com.m.onwealth requests
permission to take the 30(b)(6) deposition prior to the hearing.
4

LAC has asserted an "attorney-client" privilege for documents shared with GPMI, even
though GPMI as a corporate entity no longer exists. Such a position is directly contrary to LAC's
representations in this Court that GPMI was separate from. and independent of LAC.
4

liabilities at those stations. Id. at 1084 (by Mr. Gluzman: "I bought - I personally selected the
company, I personally worked and bought the company in 2000"). See also Han Deel. Ex. 6-a
("Offer to Purchase" at 18 ("Background of the Offer").
When LAC acquired GPMI in 2000, GPMI was a publically traded corporation. On the day
LAC bought GPMI, however, LAC announced to the S.E.C. that because GPMI was now a whollyowned company, it was no longer required to submit public reports to the S .E. C. Han Deel., Ex. 6-c.
From that day until 2011, LAC and OAO Lukoil treated GPMI as a private division and/or agent of
LAC, carrying out the explicit goals of LAC and OAO Lukoil in the Northeast United States,
including Pennsylvania, even when those goals were not in the best interests of GPMI itself.
In 2003, for example, LAC directed GPMI to "rebrand" Getty stations with Lukoil
trademarks, and gave GPMI $3 million to carry out the rebranding (including at stations in
Pennsylvania). Han Deel., Ex. 4-a.
In 2004 LAC signed a $360,000,000 Credit Agreement so that GPMI could purchase service
stations, including stations in Pennsylvania.

Han Deel., Ex. 2-b (Excerpts of 2004 "Credit

Agreement & Guarantee). Most of these stations were purchased from ConocoPhillips and many
of them were (and still are) contaminated with MTBE. Han Deel., Ex. 3-a. The 2004 Credit
Agreement's Guarantee identifies LAC as a "Grantor" and states that "the Borrower [GPMI] and the
other Granters [including LAC] are engaged in related businesses, and each Grantor [including LAC]
will derive substantial direct and indirect benefit from the extensions of credit under the Credit
Agreement .... " Han Deel., Ex. 2-b at LAC005687.
In 2005, LAC affirmatively represented that it was part of the management team of GPMI
in order to obtain a multi-million dollar line of credit. LAC emphasized the role of LAC's

5

management and the experience of Mr. Gluzman, the "Director and CEO of Lukoil Americas," and
his "substantial experience in the gasoline distribution business."

Han Deel., Ex. 2-a

at

LAC002457 & LAC002460. This representation was made at a time when Mr. Gluzman testified
he was working for Lukoil and not GPMI. Han Deel. Ex. 5-a, 5/28/13 Gluzman Trans. at 962-63.
LAC explained to the lender that it was rebranding the stations to be acquired as Lukoil
stations, as part of Lukoil' s efforts to expand Lukoil' s operations. "The rebranding will be supported
by a significant marketing and advertising campaign (approximately $1 OMM per year) to be funded
by Lukoil."

Id. at LAC002457. To insure LAC control, money from the credit line was paid

directly to LAC, not GPMI, and then funneled by LAC to GPMI. Id. at LAC002506 ("the projection
assumes the following distributions will be paid to the Company's parent, Lukoil Americas
Corporation ("LAC") through the maturity of the term loan in 2010 (in millions).") Id.
LAC also participated in supplying third parties with gasoline, including gasoline
"additives." A 2005 agreement with Sunoco, for example, states: "Sunoco agrees to pay Getty
$0.0030 per gallon/or LAC additive and 0.0040 per gallon 140%LAC as product is loaded at the
rack into their trucks." Han Deel., Ex. 8-c (emphasis added). While the Commonwealth is still
reviewing the several hundred thousands of pages of documents LAC provided in December, there
is plainly evidence that LAC was involved in supply activities.
In 2007, LAC developed a plan to get out from under GPMI liabilities, while retaining
GPMI's valuable assets. The plan was expressly approved by OAO Lukoil and involved LAC
transferring 100% of its GPMI stock to LNA, LNA stripping GPMI of profitable stations in
Pennsylvania (and elsewhere), then transferring 100% of GPMI stock, along with GPMI's money
losing stations, back to LAC some two weeks later. Han Deel., Ex. 7-a & 10-a. Lukoil would then

6

sell GPMI for $1 dollar and keep it afloat just long enough to avoid a bankruptcy trustee clawing
back the profitable stations. Han Deel., Ex. 14-a. See 11 U.S.C. § 548 ("The trustee may avoid any
transfer . . . of an interest of the debtor in property, or any obligation ... incurred by the debtor, that
was made or incurred on or within 2 years before the date of the filing of the petition").
Despite the fact that this Plan plainly was not in the best interests of GPMI, this is precisely
what happened. After selling GPMI's profitable stations in 2009, in February of 2011 LAC,
consistent with the Plan, sold its entire stock in GPMI to Cambridge Petroleum Holdings for a grand
total of$1. DeLaurentis Deel. at 17, if 46. Mr. DeLaurentis fails to mention that, as part of the $1
sale (and consistent with the Plan), LAC arranged for OAO Lukoil to provide $25 million in funding
to Cambridge to keep GPMI afloat until two years after the transfer of profitable stations to LNA.
Han Deel., Ex. 9-a. On December 5, 2011, just two years and a few days after the November 13,
2009 transfer of assets from GPMI to LNA, GPMI declared bankruptcy in the Southern District of
New York. In re GPMI, No. 11-15606, Doc. #1 (Bankr. S.D.N.Y.).
The Plan hatched by LAC in 2007 and carried out between then and 2011, however,
ultimately did not protect LAC from a claim by the bankruptcy Trustees for fraudulent transfer of
assets, including service stations in Pennsylvania. In re GPMI Adversary Proceeding, No. 11-02941,
Doc. #1 (Bankr. S.D.N.Y.). In 2013, after several weeks of trial, LAC settled the adversary
proceeding with the Trustees for GPMI for $93M. In re GPMI, No. 11-15606, Doc. #911,
Settlement Agreement at 3 (7/29/13).

Mr. Gluzman's testimony in bankruptcy court regarding who he worked for was confusing
at best. At one point he testified that for three years after LAC purchased GPMI: "I was only
working for GPMI. I'm talking from the time we acquired the company [GPMI] for the next couple,

7

three years." Han Deel. Ex. 5-a, 5/28/13 Gluzman Trans. at 959. Mr. Gluzman then testified that
he undertook several major campaigns on behalf of OAO Lukoil after 2003, including negotiating
for ConocoPhillips to become a 20% shareholder in Lukoil. Id. at 961. During this same period of
time LAC represented to potential lenders that it was directly involved in the management and
operations of GPMI, which included managing MTBE contaminated stations in Pennsylvania. The
bankruptcy court was certainly confused by Mr. Gluzman's testimony. It inquired:
THE COURT: Okay. But at this - at that time frame, who
was your employer?
THE WITNESS: GPMI.
THE COURT: Okay. But you just - in response to what Mr. Kirpalani asked
you, you indicated that you worked on a corporate deal for OAO Lukoil.
THE WITNESS: Correct.
THE COURT: Ari.d did OAO Lukoil compensate you for that work?
THE WITNESS: I was-I was given sort of option for- stock option for the
deal, yes.
Han Deel. Ex. 5-a, 5/28/13 Gluzman Trans. at 962.
One thing that Mr. Gluzman's testimony did make clear was that GPMI's finances were
completely controlled by Lukoil. He testified: "Lukoil had their very, very strict reporting
system, not [just] to GPMI, to every subsidiary.... GPMI had to report operational data and
financial data on many different levels." Id. at 964.
The extent of Lukoil's control over GPMI is evidenced not only by LAC's (and GPMI's)
admissions when seeking funding, but also by the fact that GPMI had no independent budgeting
authority. Rather, GPMI had to obtain approval from Lukoil for any expenditure. As Mr. Gluzman
testified:
Budgeting was one of the difficult, difficult situations, for not only GPMI but
for every subsidiary [of OAO Lukoil]. Budget was very vigorously attacked by the
parent company on every subsidiary to make sure that the subsidiary stays within
8

budget.
So, there was special forms, thousands of different forms, spreadsheets in
Russia. So I had to hire actually an additional person who became an accountant for
me.
Q.
Who was that?
A.
Elana Picman [sic. Yelena Bitman], and she was in charge of communications
with Moscow and to make sure that all the reports were going to Moscow on time .
. . . And every quarter she had to go to Moscow to defend the budget, because any
deviation in budget was like an earthquake for them.
Han Deel. Ex. 5-a, 5/28/13 Gluzman Trans. at 965. While Mr. Gluzman's testimony with respect
to who he was working for at any given time was confusing, it is clear that he was acting on behalf
of (and as an agent for) LAC at all times. He testified in bankruptcy court, for example, that: "We
were advised [by Lukoil] to move most of the liabilities to LNA [Lukoil North America], but I was
still an officer and a director of GPMI." Id. at 1030.
Lukoil's control over the operations of GPMI is also evidenced by Mr. Gluzman's testimony
that he was acting on behalf of Lukoil when he carried out the plan to strip GPMI of its valuable
assets. When reviewing an example of a Lukoil memo, Mr.. Gluzman explained the memo was
"typical" of instructions given by Lukoil with respect to GPMI. Id. at 1037:8 & Han Deel., Ex. 10-a
(OAO Lukoil meeting minutes). Mr. Gluzman testified that this document "was basically ordering
certain people to do certain things." Han Deel. Ex. 5-a, 5/28/13 Gluzman Trans. at 1037:10-12. The
bankruptcy court had a number of questions about this document, including the following:
Could I ask you, the reference there to implement the business
THE COURT:
reorganization of Lukoil Americas, is that the same proposed reorganization
arrangement for the retail business in the USA, or is that different?
THE WITNESS: No, no. That's the same.

Id. at 1041 :2-9 (emphasis added). Lukoil' s "retail business in the USA" was primarily, if not
exclusively, GPMI.

9

The fact that GPMI operated as an agent or division of LAC is also evidenced by the fact that
''unanimous consent" resolutions for the Board of GPMI had to be submitted to Lukoil for review
and editing before they could be adopted by GPMI. Han Deel., Ex. 11-a. The extent to which LAC
used GPMI as an agent or division is also evidenced in e-mails, such as the e-mail in which Alex
Pozdnyakov, an employee ofGPMI, instructed another GPMI employee: "Could you send out an
email to persons who. have cell phones that in compliance with the decision of the president of OAO
Lukoil Oil Company, Getty will not be providing mobile phone services to participants of the
management exchange." Han Deel. Ex. 11-c.
Finally, Mr. Gluzman, who was President and CEO of LAC and GPMI simultaneously,
testified under oath in another matter that his boss was the C.E.O. of Lukoil, Mr. Alekperov, and his
perspective was that Getty was "partners" with the Commonwealth of Pennsylvania as it relates to
Getty's contract with Bionol and that he met with Governor Rendell about the deal. Han Deel. Ex.
12(a), GPMI v. Bionol Clearfield, 4/11/11 Trans. ofV. Gluzman at LAC005363, 5445-46 & 5450.

See also Han Deel., Ex. 8-a (Correspondence from S. Logovinsky to Gov. Rendell with a bold,
large-font "Lukoil" trademark on the letterhead and facsimile stamp from "Lukoil Americas LLC"
and Ex. 8-b (describing 6/20/06 merger ofLACLLC and LAC)).

IV.

PENNSYLVANIA HAS JURISDICTION OVER LAC.
The Commonwealth asserts both general and specific jurisdiction over LAC. Pennsylvania

courts have general jurisdiction over LAC because LAC has a substantial connection with the forum
state through its own activities and through the activities of its agent, GPMI. Pennsylvania courts
also have specific jurisdiction over LAC because LAC controlled many of the MTBE contaminated
stations at issue in this case and arranged to supply gasoline and gasoline additives to third parties,

10

including in Pennsylvania.
Pennsylvania's long-arm statute states in pertinent part:
A tribunal may exercise personal jurisdiction over a person ... Who acts directly or
by an agent, as to a cause of action or other matter arising from such person: (1)
Transacting any business in this Commonwealth. . .. [including] (I) ... a series of
similar acts for the purpose of thereby realizing pecuniary benefit ... (ii) The doing
of a single act in this Commonwealth for the purpose of thereby realizing pecuniary
benefit . . . (iii) The shipping of merchandise directly or indirectly into or through
this Commonwealth. (iv) The engaging in any business within this Commonwealth,
whether or not such business requires licence or approval by any government unit of
this Commonwealth. (2) Contracting to supply services or things in this
Commonwealth. (3) Causing harm or tortious injury by an act or omission in this
Commonwealth. (4) Causing harm or tortious injury in this Commonwealth by an
act or omission outside this Commonwealth. (5) having an interest in, using, or
possessing real property in this Commonwealth."
42 Pa. C.S.A. § 5322(a)(l)-(5).
Cases applying Pennsylvania's long arm statute have looked to federal veil piercing when
jurisdictional issues involve relationships between ostensible parents and subsidiaries. See

Commonwealth ex rel. Pappert v. TAP Pharmaceuticals Prod., Inc., 868 A.2d 624, 633-644 (Pa.
Commw. Ct. 2005) (approving of and applying the federal jurisdictional veil-piercing test set out in

In re Lupron Marketing and Sales Practices Litig., 245 F. Supp.2d 280, 291-92 (D. Mass. 2003)).
In Lupron the court found personal jurisdiction over a parent company that had "utilized the
subsidiary in such a way that the agency between the two corporations can be perceived-and that is
enough."); see also Mylan Laboratories, Inc. v. Azko, NV., 2 F3d. 56, 61 (41h Cir. 1993) ("Maryland
Court of Appeals ... has adopted the so-called 'agency' test in deciding whether to pierce the veil
separating parent corporations from their subsidiaries for jurisdictional purposes."). The central
inquiry is "whether significant decisions of the subsidiary must be approved by the parent." Id. In
determining whether it is appropriate to assert jurisdiction based upon a parent's relationship with

11

a subsidiary, the court examines a number of factors, including whether the parent "knew, or should

have known, that its conduct would have some impact in [the relevant state]." Mylan, 2 F.3d at
61-62 (emphasis added). This test is easily satisfied here, as shown by evidence supplied by LAC
itself. 5
LAC directly negotiated the terms of a lease that applied to service stations contaminated
with MTBE throughout Pennsylvania. It subsequently directed and financed the purchase of
additional stations (including MTBE contaminated stations), and directed the transfer of those
stations between different LAC subsidiaries for the purpose of LAC's pecuniary gain. LAC also
directed (and paid for) the re-branding of stations in Pennsylvania to "Lukoil" for the purpose of
LAC's pecuniary gain. Acting by and through its agent/division GPMI, it directed operations at
MTBE contaminated gas stations throughout Pennsylvania. LAC also was apparently involved in
supplying "additives" to gas being sold by GPMI to third parties, such as Sunoco, which owned and
operated MTBE contaminated gas stations in Pennsylvania. LAC represented to lenders that it was
managing and directing GPMI in order to obtain hundreds of millions of dollars in loans to purchase
gas stations (including MTBE contaminated gas stations in Pennsylvania) and it controlled the funds
from those loans. It also directly marketed gas stations in Pennsylvania to prospective buyers when
it wanted to rid GPMI of money losing stations. And as explained iti part IL B, below, LAC did not
observe corporate formalities with respect to GPMI, but rather managed and operated GPMI as a
division of, or agent for, LAC.

5

LAC cites Walden v. Fiore, 134 S.Ct. 1115 (2014) as supporting its motion, but that
case supports the Commonwealth. In Walden, the Court reiterated that "although phy~ical
presence in the forum is not a prerequisite to jurisdiction, physical entry into the State - either by
the defendant in person or through an agent, goods, mail, or some other means -is certainly
relevant contact." Id. at 1122 (internal citations omitted) (emphasis added).

12

A.

LAC's Motion To Dismiss Mischaracterizes The Commonwealth's Complaint
And Consequently Ignores Key Facts.

LA C's motion to dismiss is based upon two erroneous assumptions. First, LAC assumes the
Commonwealth's case is simply and only a product liability case. See, e.g., Mot. at 11. Based on
this erroneous assumption, LAC argues it cannot be subject to personal jurisdiction in Pennsylvania
because it was not involved in GPMI's decisions to sell MTBE gasoline. 6 Mot. at 1, 16. LAC's
liability, however, arises not simply :from product liability, but also :from LAC's direct control over
service stations contaminated with MTBE in Pennsylvania. Thus, even ifLAC's mantra that it was
not involved in the decision to use MTBE gasoline were true (and it is not), LAC's control over
MTBE contaminated stations in Pennsylvania provides an independent basis for jurisdiction over
LAC with respect to claims arising :from contamination at those stations.
Second, LAC assumes that the Commonwealth bases its claims on LAC' s :fraudulent transfer
of GPMI property to another LAC subsidiary in 2009. Mot. at 18-21. Based on this erroneous
assumption, LAC argues that the :fraudulent transfer did not cause MTBE contamination and
therefore does not provide a basis for jurisdiction. Id. The Commonwealth, however, has never
asserted that the fraudulent transfer caused MTBE contamination. Rather, the :fraudulent transfer
is evidence (and particularly strong evidence) of the extent to which LAC treated GPMI as an agent
or division. The :fraudulent transfer helped LAC and OAO financially but was a disaster for GPMI.
It ultimately contributed to GPMI's bankruptcy. Although the event occurred after MTBE was no

longer in gasoline, it is indicative of the extent of LAC's control of GPMI throughout the entire
period that LAC owned GPMI. See, e.g. Daval Ste.el Prod. v. MIV Fakredine, 951F.2d1357 (2d.

6

LAC argues, for example, that whether GPMI has purposefully availed itself of the
benefits of the Pennsylvania forum is "of no moment, because its contacts may not be attributable
to LAC." Mot. at 4. ·
13

Cir. 1991) (finding that "information concerning financial transactions and movements of corporate
assets subsequent to the transaction [at issue] was evidence admissible on the issue of alter ego
liability .... ")

B.

LAC's Use of GPMI As An Agent For LAC Provides A Basis For Pennsylvania
To Exercise Jurisdiction Over LAC.
1.

The Evidence Demonstrates LAC Used GPMI For LAC's Pecuniary
Benefit in Pennsylvania.

Because LAC has used GPMI to carry out LAC's business in Pennsylvania, LAC can be
haled into court under the Commonwealth's long arm statute. Commonwealth ex. rel. Pappert,

supra, 868 A.2d at 633-34; In re Lupron. Supra, 245 F. Supp. 2d at 291-92. As the court stated in
Lupron: ''jurisdiction has been premised on a finding of control-not merely the degree of control
innately inherent in the family relationship, but the exercise of control by the parent' greater than that
normally associated with conimon ownership and directorship."' (citations omitted).) Evidence that
LAC's control of GPMI went far beyond that "normally associated with ownership and directorship"
includes the following.

CorporateFormalities. NeitherLACnorGPMiobservedcorporateformalities. Neitherheld
board meetings where minutes were taken. Instead, both entities acted through "unanimous consent"
decrees signed by the directors. These consents had to be edited and approved by Lukoil before they
could be adopted by GPMI. Han Deel., Ex. 11-a. LAC "regularly made decisions by unanimous
consent rather than by convening a meeting." See DeLaurentis Deel. at if 15(c); see also id. at if 33.

Absence ofCorporate Records. The Commonwealth in discovery sought all board minutes
from LAC, but LAC provided no board minutes. Instead, LAC produced ''unanimous consents" of
the LAC board. See Delaurentis Deel. at if 15(c) and if 33 ("It was not the practice of either LAC or

14

GPMI to keep board minutes"). While documents are still being reviewed, it is clear from the
evidence reviewed so far that both GPMI and LAC submitted draft board "unanimous consents" to
OAO Lukoil for review and editing prior to execution by the GPMI and LAC boards. See Han Deel.,
Ex. 11-a.
Selection and maintenance ofofficers. Contrary to DeLaurentis' Declaration that at the time

of the merger, GPMI continued to run as before the merger, when LAC bought GPMI, LAC
controlled selection and assignment of GPMI's executive personnel. LA C's Gluzman testified that
he appointed the president (DeLaurentis) and Vice-President and C.F.O. (Michael Hantman) and
even hired the law firm to be used by GPMI. Han Deel., Ex. 5-a at 5/28/13 Trans. ofV. Gluzman
at 956-57. Moreover, the officers for LAC and GPMI, and subsequently LNA, were essentially
identical and interchangeable. Han Deel. Ex. 7-c at LAC002195-2196; see also Han Deel., Ex. 15
(LA C's D&O insurance covers GPMI officers). Not surprisingly, at least one GPMI officer admitted

to being completely ignorant of the fact that he was an officer of LAC. Han Deel., Ex. 5-b (In re
GPMI Adversary Proc., 6/10/13 Trans. of S. Logovinsky at 11.
Sharing ofHeadquarters. LAC and GPMI shared. the same address and office equipment at

Lukoil Plaza in New York City. See Han Deel., Ex. 2-a at LAC002446.
Control over day-to-day operations. GPMI did not operate as an independent company, but

rather GPMI operated as an agent or division of LAC.· All of GPMI's monthly, quarterly, semiannual and annual reports had to be sent to Moscow (OAO Lukoil) and GPMI's accountant was
required to travel to Moscow every quarter to defend the company's budget. Han Deel. Ex. 5-a at
5/28/13 Trans. ofV. Gluzman at 965. While electronic information is still being reviewed, there is
evidence that OAO Lukoil president would direct and manage certain GPMI operations, including

15

directions regarding cell phone usage. Han Deel., Ex. 11-c (4/11/05 e-mail from A. Pozdnyakov,
"in compliance with the decision of the president of OAO Lukoil Oil Company, Getty will not be
providing mobile phone services to participants of the management exchange."). Contrary to
DeLaurentis' Declaration

if

31, officers did not "make clear in external communications the

particular company for which such officer was speaking." See, e.g., Han Deel., Ex. 11-b (12/28/05
e-mail from A. Pozdnyakov, identifying himself as GPMI but addressing business relating to the
dissolution of another Lukoil company, Lukoil Cayman Trading.); see also id. at Exs. 4-b, 4-c & 15.

Parent's Finance of Subsidiary's Ability to Set Up for Operations. Although GPMI was
already in existence when it was acquired by LAC, LAC provided a significant equity infusion when
it acquired GPMI, as well as multiple equity infusions thereafter. 7 Han Deel., Exs. 4-a, 6-b & 2-b
at LAC005622. LAC (not GPMI) hired financial consultant Houlihan Lokey who advised Lukoil
"to recapitalize the company [GPMI]." Han Deel., Ex. 12-a at LAC005457. Again, significant
decisions about GPMI were made by the parent, not internally at GPMI.

Common Ownership. LAC owned 100% of GPMI until 2011 with the exception of a two
week period in November, 2009, when LAC transferred 100% of its stock in GPMito its subsidiary
LNA and LNA simultaneously transferred significant assets from GPMI to itselfand then transferred
the GPMI stock back to LAC 17 days later. Han Deel. Ex. 7-a; see also Ex.14-a.
Lukoil advertised that it owned and was in control of the service stations that LAC now
claims were run solely by an independent GPMI. Han Deel., Ex. 2-a at LAC002476; see also
(http://www.lukoilamericas.com/about-lukoil/history: "LUKOIL entered the United States market

7

Due to limitations on the number of exhibits that may be submitted, not all documents
have been provided. Numerous unanimous consents by LAC, however, demonstrate a regular
flow of millions of dollars of cash infusions going from LAC to GPMI. These unanimous
consents can be provided upon request.
16

in 2000 when it purchased New York-based Getty Petroleum Marketing Inc. and its network of
Getty-branded stations on the East Coast. The first LUKOIL-branded service station in the United
States opened in September 2003. In 2004, LUKOIL purchased a major portfolio of Mobil-branded
stations from ConocoPhillips Company in New Jersey and Pennsylvania, many of which
subsequently became LUKOIL-branded service stations.")

Financing and Capitalization. LAC does not dispute that it arranged for financing for GPMI.
See, e.g., DeLaurentis Deel. at ifl9. Lukoil's financing arm provided capital to LAC and Mikecon
to purchase GPMI and as part of the agreement to finance the purchase of GPMI, LAC "agreed to
place certain restrictions on the ability of Getty Petroleum Marketing, Inc. to incur indebtedness for
borrowed money once the Company beneficially owns all the issued and outstanding capital stock
of [GPMI]." Han Deel. Ex. 6-b (LAC Unanimous Written Consent (10/30/00). In 2004, LAC
guaranteed a $320 Million loan from Lehman Brothers for GPMI to buy hundreds of gasoline
stations in Pennsylvania and New Jersey. Han Deel., Ex. 2-b. LAC also arranged for capitalization
and equity infusions to GPMI from OAO Lukoil or one of its sister corporations. See, e.g., Han
Deel. Ex. 4-a.

Financial Dependency of the Subsidiary on the Parent Corporation.

According to a

testifying expert in the bankruptcy adversary proceeding, Lauren Ryan (CPA and certified fraud
examiner and insolvency reorganization advisor), GPMI "didn't have any third party sources of
capital. There was a heavy dependency on Lukoil. In fact, many of the reports that were filed
monthly- we call them MD&As, managing discussion analysis - always had a paragraph that talked
about a going concern and a dependency on Lukoil and what would happen if they stopped funding
us. And its no guarantee that they are going to continue to fund our operations. This went on for

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quite some period of time." Han Deel., Ex. 12-b, (In re GPMI Adv. Proc. 6-6-13 Trans. of L. Ryan
at 32-33.) At the time GPMI transferred its valuable assets to LNA, GPMI was already insolvent.

(Id. at 35) The transfer ultimately accelerated GPMI's insolvency and move towards bankruptcy.
Holding the subsidiary out as an agent. The Lukoil brand was integrated vertically from
OAO Lukoil to LAC to GPMI. OAO Lukoil and LAC directed GPMI to carry out a $50 million
dollar marketing campaign for the "Lukoil" brand. Han Deel. Ex. 2-a at LAC002460. GPMI's
letterhead emphasized that it was a "Lukoil" company. While Mr. DeLaurentis attempts to downplay
the letterhead (DeLaurentis Deel. at ,-r 31, "the letterhead expressly stated that GPMI was a subsidiary
of Lukoil"), the "Lukoil" mark was in large font on the top left of the letterhead and was front and
center of important documents such as marketing materials. See, e.g., Han Deel. Ex. 8-a (Letter to
Pennsylvania Gov. Rendell) and Han Deel., Ex. 4-b ("Lukoil Pennsylvania Offering") & Ex. 4-c.
Companies knew that wanted to do business with GPMI meant doing business with Lukoil. See Han
Deel., Ex. 12-c, In re GPMI Adv. Proc., Trans. of S. Gatto at 154 (testifying he traveled to Moscow
to discuss the Bionol-GPMI contract gasoline additive supply from the plant in Pennsylvania for with
Lukoil officers).
Under either Pennsylvania or Maryland law governing personal jurisdiction, LAC cannot
simply ask the Court to ignore LAC's own activities or LAC's relationship with and control over
GPMI. Under the factors set forth in Mylan Laboratories, supra, the extent of LAC' s control of
GPMI's activities in Pennsylvania clearly supports an exercise of personal jurisdiction by
Pennsylvania courts over LAC.

2.

LAC's Domination Over GPMI Meets the Test For Ascribing GPMl's
Conduct To LAC For Jurisdictional Purposes.

As noted above, the test for jurisdictional veil-piercing in both Pennsylvania and Maryland

18

is based on agency, not on piercing the corporate veil nor paramount equity. LAC cites three cases
for the proposition that the Commonwealth must prove that piercing GPMI's corporate veil would
either 1) enforce a paramount equity or 2) prevent fraud. Mot. at 12-15. LAC's authorities,
however, do not address jurisdiction at all, but rather address substantive veil-piercing or alter ego
tests. Jn Hildreth v. Tidewater Equip. Co., 378 Md. 724, 838 A.2d 1204 (2003) a lessor sued a
foreign corporation lessee and its sole shareholder, director, and officer individually for unpaid rent.
The issue a trial was whether the principal could be held liable under the alter ego doctrine. The
issue of personal jurisdiction was never raised. Jn Schlossberg v. Bell Builders Remodeling, Inc.,
441 Md. 671, 109 A.3d 1146 (2015), the issued was what must be alleged (and ultimately proven)
to hold an individual liable for the obligation of corporate entity. Personal jurisdiction was not an
issue and was not addressed by the court. Finally, in Dixon v. Process Corp., 382 A.2d 893 (Md.
App. 1978), plaintiff sought to obtain a decree that the properties and assets of a subsidiary were
those of a parent so that a judgment lien against the parent could be collected from the subsidiary.
Again, personal jurisdiction was not an issue.
LAC argues that no court has ever applied Maryland law to disregard the corporate entity and
deal with substance over form, as though the corporatioll'does not exist, when necessary to prevent
fraud or enforce a paramount equity. Mot. at 17-18. In Colandrea v. Colandrea, 42 Md. App. 421,
428-29 (1979), however, when the president ofa corporation fraudulently transferred business ofone
corporation to a subsequent corporation, the court found the trial court was "clearly erroneous" in
failing to find that paramount equity required looking behind the corporate veil. Id. at 429. For
purposes of the motion to dismiss, however, the Commonwealth's main point is that LAC ignores
applicable jurisprudence involving personal jurisdiction and instead relies upon 'inapplicable

19

jurisprudence involving substantive veil piercing.

C.

The Extent Of LAC's Control Over GPMI Is Demonstrated By LAC's
Fraudulent Transfer of GPMl's Properties Two Years Prior To Steering GPMI
Into Bankruptcy.

LAC's plan to siphon the good assets from GPMI and give them to sister company LNA, then
float GPMI until the siphoned assets were protected from claw back in bankruptcy. This plan was
revealed to the President of Getty Realty as early as 2007. Han. Deel., Ex. 9-b (1114/09 email from
M. Hantman to S. Nekrasov; Ex. 14-a (LAC 20-yearprojection) & Ex. 10-d (In re GPMIAdv. Proc.,
Trans. of D. Driscoll at 1809:25 to 1812:15 ("Mr. Gluzman made it clear that if this plan went
forward, then once they completed their restructuring ofremoving assets from GPMI, then the plan
would be to continue to hold it for one year, which he assured me that the lawyers were requiring
him to do, and then that he would then - then the intention was to sell GPMI to anyone they could
sell it to." Id. at 1810:5-13.) Lukoil's plan unfolded just as described.

A "Lukoil Americas

Corporation Restructuring Plan" was developed which detailed the reassignment of properties,
assets and liabilities froni GPMI to LNA. Han Deel., Ex. 10-c ("Lukoil Americas Corporation
Restructuring Plan"); 8 see also Han Deel., Ex. 14-b (LAC Balance Sheets).
First, on November 13, 2009, LAC transferred ownership of GPMI (wholly owned
subsidiary) to LNA (wholly owned subsidiary). Han Deel. Ex. 7-a, 11/13/09 LAC Unanimous
consent). On that same date, GPMI sold its profitable assets to LNA, and the contract specifically
stated that MTBE contamination may be found in the Underground Storage Tanks. Han Deel., Ex.

8

LAC - not GPMI - hired Houlihan Lokey Financial Advisors to provide an opinion on
whether the transaction was fair to GPMI from a financial point of view - an opinion dated
November 13, 2009 (the same date as the transfer). The opinion included a number of
disclaimers, including that the opinion did not include an "independent verification" of the
representations, warranties or documents relied upon. Han Deel., Ex. 10-b at 2-3 (11113/09
Houlihan Lokey Opinion).
20

13-a (11/13/09 Purchase and Sale Agreement between GPMI and LNA). On November 16, 2009,
GPMI and LNA entered into a Services Agreement wherein GPMI would act as LNA's agent for
operational, financial and other activities, providing essentially a continuity of the business. Han
Deel. Ex.13-b (11/16/09 Services Agreement).
Just 17 days after LAC transferred GPMI to LNA, LNA transferred GPMI back to LAC. Han
Deel. Ex. 7-a. When GPMI came back to LAC, it was without its profitable assets. LAC officers
would later admit that the purpose of the transfer was to save the profitable assets. Han Deel. Ex.
10-e (1/11/11 Email from M. Hantman to V. Gluzman ("Attached is data on 95 master lease sites
contained in the Getty portfolio. The analysis indicates that Getty is losing money on these sites
which is precisely the reason they were not originally included in the sale to LNA.") LAC's transfer
of GPMI to LNA allowed it to have the appearance of being uninvolved with stripping the profitable
assets.
LAC held GPMI stock for approximately one-year after the fraudulent transfer, then sold
GPMI to Cambridge Petroleum (without GPMI's involv~ment), in February, 2011, for a single dollar
($1) and a promise by LAC to give an equity cash infusion to Cambridge of approximately $25
million dollars to keep it afloat for another year. Han Deel., Ex. 9-a. This was, at least in theory,
just enough time to shield the 2009 asset transfer from claims in bankruptcy.
As noted above, the Commonwealth discusses these activities not because the fraudulent
transfer of profitable stations caused MTBE contamination, but because they show the extent to
which LAC dominated and controlled GPMI, and used GPMI as an agent for or division of LAC.

See, e.g., Daval Steel Prod. v. MIV Fakredine, 951 F.2d 1357 (2d. Cir. 1991) (finding that
"information concerning financial transactions and movements of corporate assets subsequent to the

21

transaction [at issue] was evidence admissible on the issue of alter ego liability .... ")

V.

THE COMMONWEALTH SUPPORTS LAC'S REQUEST FOR
AN EVIDENTIARY HEARING.
Ifthis Court is not persuaded by the evidence provided by the Commonwealth demonstrating

LAC's minimum contacts with Pennsylvania, then the Commonwealth supports LAC's request for
an evidentiary hearing so that this Court can hear additional proof of the propriety of jurisdiction
over LAC. Given inconsistencies in the prior sworn testimony of LAC officers and directors, the
Commonwealth believes that having witnesses testify under oath before the Court would help the
Court judge the credibility ofLAC's witnesses.

VI.

THE COMPLAINT ADEQUATELY PLEADS A CAUSE OF ACTION
AGAINST LAC.
Finally, LAC argues that the SAC fails to state a claim (Mot. at 23) because the allegations

in the complaint are "conclusory." This argument is itself "conclusory," however, and entirely
without merit. The Federal Rules require only notice pleading (Fed. R. Civ. P. 8) and not fact
pleading. The complaint is nevertheless replete with specific allegations supporting both personal
jurisdiction over LAC and each claim against LAC. SAC at 100-110, ~~ 296-247.
The SAC added 51 new factual claims against LAC, all of which must be taken as true and
construed in favor oftheplaintiffforpurposes of a motion to dismiss. In re MTBE, No. 1358, 959
F.Supp.2d 476, 489-90 (S.D.N.Y. 2013). Further, the allegations are "plausible"and include "factual
content that allows the court to draw the responsible inference that the defendant is liable for the
misconduct alleged." Id. (internal citations omitted).
LAC asserts that the recitation of facts do not include four facts that LAC argues are
"essential" to a sufficient pleading. Mot. at 23. These facts are not at all "essential" to a proper

22

notice pleading. Even if they were, a cursory review of the SAC demonstrates these facts are
specifically alleged among the allegations. The SAC alleges, for example, that LAC itself used or
had involvement with MTBE gasoline, including, but not limited to directing negotiations of the
Master Lease with Getty Petroleum Corporation for stations in Pennsylvania and alleging LAC
directed MTBE blending operations; SAC irir 301, 316, 326, 345-47 (alleging Lukoil knew about
environmental risks associated with service stations in Pennsylvania and harmed the Commonwealth
LAC); irir 123, 411-531 (alleging LAC wrongfully collected USTIF money); and irir 296, 304, 309,
339, 344-346 (alleging LAC is, in fact, responsible for MTBE use and contamination "directly,
indirectly, and through agents and/or officers, or alter-egos, successors in liability," SAC if 345).
LAC's motion ignores the fact that the SAC is not limited to a single allegation that LAC is
liable based on its ownership of GPMI. The SAC thoroughly alleges facts that LAC itself was
conducting business in Pennsylvania through GPMI. SAC at irir 296, 304, 309, 339, 344-346.
LAC also suggests it cannot be subject to "group pleading" and cites this Court's opinion
regarding the Commonwealth's UTPCPL claim. This Court's decision regarding "group pleading,"
however, was limited to the UTPCPL claims. That claim has now been replead and is subject to a
separate briefing. See Plaintiffs Opposition to Certain Defendants' Motion to Dismiss regarding
the UTPCPL claims. The a,rguments in the Commonwealth's brief opposing the motion to dismiss
the UTPCPL claims are incorporated herein as if fully set forth herein. The allegations provide
ample notice of the claims against LAC and therefore comport with Rule 8 with respect to both the
UTPCPL claims as well as all other counts; Gao v. JPMorgan Chase & Co., No. 14-CV-4281
(S.D.N.Y. 2015)(rejecting defendant's argument that group pleading is insufficient and stating,
"Fed.R.Civ.P. 8 requires only that a complaint provide "the defendant [with] fair notice of what the

23

claim is and the ground upon which it rests. . . . These claims ... and the grounds upon which they
rest, are clear from the complaint")( citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
LAC also argues that it should not be held liable for "the use of mtbe gasoline" prior to
LAC's purchase ofGPMI in 2000. Mot. at 23. The SAC alleges, however, that LAC is a successor
in liability for pre-2001 mtbe contamination, if 345. Whether LAC or Getty Properties is liable for
pre-2000 mtbe contamination is a separate and distinct issue from the issues in this motion to
dismiss. We do note, however, that this Court previously held, in a dispute between Getty Properties
and GPMI (when GPMI was still owned by LAC), that the successor liability issue with respect to
MTBE contamination must be determined on a site-by-site basis. In re MTBE, No. 1:00-1898,2008
WL 3163634 (S.D.N.Y. 8/06/08)(relating to County of Suffolk v. Amerada Hess Corp.)(denying
Getty Properties Corporation's (predecessor to GPMI) motion for summary judgment against GPMI
.as a successor in interest). The Court noted that the Environmental Indemnity Agreement (which
was the subject of negotiations between LAC and Getty prior to LAC's purchase ofGPMI), required
that "liability must be determined on a site-by-site basis." Id. at *3, 7-8. 9 LAC's request that the
Court now find, as a matter oflaw, that neither GPMI nor LAC has or had any liability for MTBE
contamination that occurred prior to 2000, should be denied.

Conclusion
For the foregoing reasons, the Commonwealth respectfully requests that the Court deny
LAC's motion to dismiss based upon lack of personal jurisdiction.
DATED: February 5, 2016.

Respectfully submitted,

9

The Court also stated that a plaintiff can bring a claim against both the successor and
predecessor corporations. Here, all the corporations in the line of successorship have been
named: GPC, GPMI, LNA, LAC and Lukoil. As this Court stated, success.or liability laws are
"designed to protect injured plaintiffs by ensuring them a source of recovery - not to protect
corporations that have transferred their assets from liability for their own torts." Id. at *4.
24

PENNSYLVANIA OFFICE OF ATTORNEY PENNSYLVANIA GOVERNOR'S OFFICE
GENERAL
OF GENERAL COUNSEL
James A Donahue, III, Esquire
Executive Deputy Attorney General
Strawberry Square, 14th Floor
Harrisburg, Pennsylvania 17120
[phone]
Email: [e-mail]

Linda C. Barrett, Esquire
Deputy General Counsel
333 Market Street, 17th Floor
Harrisburg, Pennsylvania 17101
[phone]
Email: [e-mail]

MILLER & AXLINE, P.C.

BERGER & MONTAGUE, P.C.

By: /s/ Michael Axline
Michael Axline, Esquire
Duane Miller, Esquire
Special Counsel to the
Commonwealth of Pennsylvania
1050 Fulton Avenue, Suite 100
Sacramento, California 95825-4225
[phone]
Email: [e-mail]
[e-mail]

Daniel Berger, Esquire
Tyler E. Wren, Esquire
Special Counsel to the
Commonwealth of Pennsylvania
1622 Locust Street
Philadelphia, Pennsylvania 19103
[phone]
Email: [e-mail]
[e-mail]

COHEN, PLACITELLA & ROTH, P.C.
Stewart L. Cohen, Esquire
Robert L. Pratter, Esquire
Michael Coren, Esquire
Special Counsel to the
Commonwealth of Pennsylvania
Two Commerce Square
Suite 2900, 2001 Market St.
Philadelphia, Pennsylvania 19103
[phone]
·I.
Email: [e-mail]
[e-mail]
[e-mail]
Attorneys for Plaintiff
The Commonwealth ofPennsylvania

25

1

2

PROOF OF SERVICE VIA LEXISNEXIS FILE & SERVE
Commonwealth ofPennsylvania v. Exxon Mobil Corporation, et al.,
United States District Court, Southern District ofNew York Case No. 14-cv-06228 (SAS)

3
4

I, the undersigned, declare that I am, and was at the time of service of the paper(s) herein
referred to, over the age of 18 years and not a party to this action. My business address is 1050
Fulton Avenue, Suite 100, Sacramento, CA 95825-4225.

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On the date below, I served the following document on all counsel in this action
electronically through LexisNexis File & Serve:

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8
9

PLAINTIFF COMMONWEALTH OF PENNSYLVANIA'S OPPOSITION TO
DEFENDANT LUKOIL AMERICAS CORPORATION'S MOTION TO DISMISS FOR
LACK OF PERSONAL JURISDICTION AND FAILURE TO STATE A CLAIM

10
11

I declare under penalty of perjury under the laws of the United States of America and the State of California
that the foregoing is true and correct.

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Executed on February 5, 2016, at Sacramento, California.

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