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

Filing 4385

CONSENT DECREE AS TO DUKE ENERGY MERCHANTS, LLC ONLY: THEREFORE, with the consent of the Parties to this Consent Decree, it is hereby ORDERED and ADJUDGED: This case was removed to the United States District Court for the District of New Jersey pursuant to 28 U.S. C. § 1446(d) and the Energy Policy Act of 2005, 42 U.S.C. § 7545, et seq., which expressly authorized the removal of legal actions related to allegations involving MTBE contamination, and then assigned to the Southern District of New York ("S.D.N.Y.") as part of the Multi-District Litigation. For purposes of approving and implementing this Consent Decree, the Parties to this Consent Decree waive all objections and defenses they may have to the jurisdiction of this Court over the Parties and this Consent Decree. The Parties shall not challenge the S.D.N.Y.'s jurisdiction to enforce this Consent Decree against the parties to this Consent Decree. Within fourteen (14) days after the effective date of this Consent Decree, Duke shall pay the Plaintiffs One Million Seven Hundred Thousand Dollars ($1,700,000.00). (As further set forth in this Order) Duke Energy Merchants, LLC terminated. (Signed by Judge Shira A. Scheindlin on 2/19/2016) (kl) Modified on 2/29/2016 (kl). (Additional attachment(s) added on 2/29/2016: # 1 Appendix A, # 2 Appendix B, # 3 Appendix C, # 4 Appendix D, # 5 Appendix E, # 6 Appendix F) (kl).

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Wedeking, Esq. of Sidley Austin LLP, appearing as attorney for defendant Duke Energy Merchants, LLC ( '\Duke 11 ) i and these· Parties having amicably resolved their dispute before trial: I. A. BACKGROUND The Plaintiffs initiated this action on or around June 28, 2007 by filing a complaint against Duke and other defendants· in the Superior Court of the State of New Jersey, Mercer County, Docket MER-L-1622-07, Compensation ( 11 and the Spill Act 11 ) N.J. S .A. pursuant Control , Act, to the N.J. S .A. New Jersey 58:10-23.11 to Spill -23.24 the New Jersey Water Pollution Control Act, 58: 10A-1 to -20, and the common law. The action was removed to the United States District Court for the District of New Jersey, and later assigned to the multi-district litigation in the United States District Court for the Southern District of New York, MDL No. 1358 (SAS) (\\Multi-District Litigation"), for coordinated pre-trial proceedings. B. The Plaintiffs filed amended complaints, the latest being the Fourth Amended Complaint, which was filed on June 19, 2012 (the "Complaint 11 ) . c. Plaintiffs, in their Complaint, seek past and future damages they allegedly have incurred and will incur as a result of alleged widespread contamination of the waters of New Jersey by methyl tertiary butyl ether ( "MTBE'') . 2 D. Plaintiffs, in their Complaint, seek past and future costs they allegedly have incurred and will incur as a result of alleged widespread contamination of the waters of New Jersey by MTBE. Plaintiffs, in their Complaint, seek injunctive relief E. qoncerning the remediation of MTBE discharges. Du~e F. principal is a Delaware limited liability company with its place of business at 500 South Tryon Street 1 Charlotte, North Carolina. G. Duke filed liability on any asserted various responsive and all pleadings claims defenses to asserted the in which by it denied Plaintiffs allegations and and claims not owned, contained in the Complaint. Duke H. represents and avers that it has operated/ leased, or branded any service stations in New Jersey; that it has not owned or operated any underground storage tanks in New Jerseyi that it has not owned or operated any pipelineS 1 tankers, or barges used to transport gasoline; that it has not transported gasoline by rail or road in New Jersey; that it has not manufactured MTBE; that it was not the ultimate seller of any gasoline within New Jersey; that it played no role in the decision to introduce the use of MTBE into the gasoline supply in New gasoline Jersey; and that containing MTBE it into has the 3 not leaked waters of or spilled any New Jersey; but acknowledges that at relevant times in (from or about approximately 2000 to January 2004), it acted as a middle market participant in the gasoline market anq in that capacity{ traded gasoline that contained MTBE. I. The Parties to this Consent Decree recognize, and this Court by entering this Consent Decree finds, that the Parties to this Consent Decree have negotiated this Consent Decree in good faith; that the implementation of this Consent Decree will allow the Parties to this Consent Decree to avoid continued, prolonged and complicated litigation; and that this Consent Decree is fair, reasonable, and in the public interest. THEREFORE, with the consent of the Parties to this Consent Decree 1 it is hereby ORDERED and ADJUDGED: II. This case was 1. Court for JURISDICTION removed to the United States District the District of New Jersey pursuant to 2 8 U.S. C. 1446(d) and the Energy Policy Act of 2005, 42 U.S.C. seq. , which expressly authorized related to allegations involving the removal MTBE of part of the Multi-District Litigation. 4 7545, et legal actions contamination, assigned to the Southern District of New York § § and then ("S.D.N. Y .") as For 2. Consent purposes Decree~ the of Parties to this objections and defenses this Court Parties over . the shall approving and this Consent Decree waive all they may have to the Parties and this challenge not implementing the S.D.N.Y. jurisdiction of Consent 1 Decree. The jurisdiction S to enforce this Consent Decree against the parties to this Consent Decree. III. This Consent Decree applies tor 3. the PARTIES BOUND Plaintiffs and defined below (each 1 only the Unless Settling Defendantsr as a '\Party" and collectively, the "Parties") . IV. 4. named and is binding upon, otherwise DEFINITIONS expressly provided, .terms used in this Consent Decree that are defined in the Spill Act or in the regulations promulgated under the Spill Act shall have statutory or the regulatory meaning. Whenever terms their listed below are used in this Consent Decree, the following definitions shall apply: "Consent Decree" shall mean this Consent Decree. 11 Damages 11 shall mean all damages alleged in the Complaint for claims arising from discharges of MTBE into Waters of the Stater as defined below, Department pursuant to N .J .A. C. 5 that were reported to the 7: lE-5 prior to the effective date of this Consent Decree or that occurred at any of the sites identified on the list included as Appendix A to this Consent Decree, including, but not limited to: a. The Plaintiffs' costs of assessing injury to Waters of the State; b. The costs contaminated which, of with restoring MTBE to the their waters of the pre-discharge for the purpose of the Consent Decreer State quality, shall be at or below 1 part per billion; c. Compensation for restoration of 1 the lost value of, injury to1 and/or destruction of, Waters of the State; d. Compensation for the treatment of well water containing MTBE to.its pre-discharge condition; and e. Attorneys' fees, consultants' and experts' fees, and other litigation costs. "DamagesiT do not include: a. Compliance, during any remediation, with any statutory or regulatory requirement that is not within this definition of damages 1 for example, without limitation, the mitigation of freshwater wetlands as required by N.J. A. C. 7:7A; and b. Past Cleanup and Removal Costs and Future Cleanup and Removal Costs, both as defined below. 6 "Day 11 stated to be a shall mean a calendar working day. day "Working Day" other than a Saturday, Sunday, unless expressly shall mean a or State holiday. day In computing time under this Consent Decree, where the last day would fall on a Saturday, Sunday, or State holiday, time shall run until the close of business of the next Working Day. uDuke' s Representations" shall mean Duke's representation, affirmation, and subject to that true that Duke it is declaration and correct penalties (i) has of perjury not owned, operated, leased, or branded any service stations in New Jersey; {ii) has not owned or operated any underground storage tanks in New Jersey; tankers, {iii) has not owned barges used to transport or operated g~soline any pipelines, in New Jersey; has not transported gasoline by rail or road in New Jersey; has not manufactured MTBE;. (vi) was not seller of any gasoline within New Jersey; the ultimate (vii) (iv) (v) retail has played no role in the decision to introduce the use of MTBE gasoline in New Jersey; and (viii) has not leaked or spilled any gasoline containing MTBE into the waters of New Jersey. 11 Future Cleanup and Removal Costs 11 shall mean all direct and indirect costs the Plaintiffs will incur on or after the effective date of this Consent Decree, costs, to remediate MTBE discharges 7 including oversight that were reported to the Department pursuant to N.J.A.C. 7:1E-5 prior to the effective date of this Consent Decree as set forth in Paragraph 28. "MTBE" shall mean methyl tertiary butyl ether, neat or as a part of gasoline or as a contaminant of other fuel 1 and the degradation byproducts of tertiary butyl alcohol ( "TBA' 1 ) commercial grade MTBE, including In addition, MTBE shall include • TBA when TBA is or was present in MTBE gasoline. 11 Paragraph" shall mean a portion of this Consent Decree identified by an Arabic numeral or an upper case letter. 11 Past Cleanup and Removal Costsn shall mean all direct and indirect costs the Plaintiffs incurred before the effective date of this Consent Decree, including oversight costs, to remediate MTBE discharges. 11 Plaintiffs" Commissioner, and mean shall the plaintiffs Administrator/ and any DEP 1 the successor department, agency or official. 11 Sectionn shall mean a portion of this Consent Decree identified by a roman numeral. 11 Settling Defendant 11 shall mean defendant Duke Energy Merchants, LLC and shall include all parent companies, officers, directors, employees, predecessors, predecessors in interest, successors, past and present (each 1 a "Related Entity 11 ) 1 officers~ directors, and employees but only to the extent that the 8 alleged liability of any Related Entity is based on its or his or her status and in its or his or her capacity as a Related Entity, and not to the extent that the alleged liability of the Related Entity with respect to MTBE contamination arose independently of its or his or her status and capacity as a Related Entity of Settling Defendants. "Waters of the estuaries, all springs, water 1 State 11 are the ocean and its streams and bodies of surface or ground whether natural or artificial, within the boundaries of the State of New Jersey or subject to its jurisdiction. V. 5. (a) SETTLING DEFENDANT 1 S COMMITMENTS Within fourteen this Consent Decree, {14) days after the effective date of Duke shall pay the Plaintiffs One Million Seven Hundred Thousand Dollars ($1,700,000.00). (b} Duke shall pay the amount specified in Paragraph 5 (a) above by certified check made payable to "Treasurer, State of New Jersey" or by wire transfer of immediately available funds pursuant to instructions provided by Plaintiffs. Duke shall mail or otherwise deliver the payment and previously received from Plaintiffs wire transfer Duke shall to 1 any payment or in the event of contemporaneously payment to: John N. Sacco, Chief 9 invoice send notice if a of Office of Natural Resource Restoration Green Acres Program New Jersey Department of Environmental Protection 501 East State Street 1 1st Floor Mail Code 501-01 Trenton, New Jersey 08625i · with a photocopy thereof to: Section Chief, Cost ~ecovery and Natural Resource Damages Section, Division of Law, Department of Law and Public Safety, Richard J. Hughes Justice Complex, 25 Market Street, P.O. Box 093, Trenton, New Jersey 08625-0093. VI. 6. (a) PLAINTIFFS' COVENANTS AND In consideration of, RE~EASES and upon receipt of, the payment required in Section V above/ and except as otherwise provided in Section VII below, take judicial, the Plaintiffs covenant not to administrative or other action sue~ or to against the Settling Defendant for reimbursement of Past Cleanup and Removal Costs. 10 (b) Decree, Notwithstanding ·any other provision of this Consent in consideration of I and upon receipt of, the payment required in Section V above, the Plaintiffs covenant not to suet or to take judicial, administrative or other action against the Settling Defendant based upon Settling Defendant's liability under the (i) common law and (ii) statutory or other theories of products liability with respect to MTBE discharges into Wat~rs of the State that occurred prior to the effective date of this Consent Decree as set forth in Paragraph 28. In further consideration of, and upon the receipt of, 7. the payment required in Section V above, and except as otherwise provided in Section VII below, the Plaintiffs fully and forever release, and agree not to otherwise take covenant not to sue/ judicial, administrative or other action against the Settling Defendant for Damages. The covenants and r.eleases contained in this Section 8. VI shall take effect upon the Plaintiffs receiving the payment that Settling Defendant is required to make pursuant to Section V above 1 in full 1 and in compliance with the terms of this Consent Decree. The covenants and releases contained in this Section 9. VI extend only to Settling Defendant defendant, party, person or entity. 11 and not to any other 10. VI The covenants and releases contained in this Section do not pertain to any matters other than those expressly stated herein. VII. 11. The Settling Defendant PLAINTIFFS• RESERVATIONS Plaintiffs' is willingness subject to to the settle Settling compliance with all remediation requirements, in any applicable agreement, order statute, or regulation, other rule, inc 1uding Remediation Reform Act, N.J.S.A. 58:10C-1, et seq. Defendant agrees that hazardous substances all investigation they perform under the Defendant's if any, or document, with set forth and the any Site The Settling and remediation of State oversight (as opposed to federal oversight) will be performed pursuant to the Site Remediation Reform Act, N.J.S.A. SB:lOC-1 et seq., and the accompanying regulations and guidance notwithstanding N .J .S .A. 58:10C-27(e). such The Plaintiffs reserve their rights to enforce compliance. Failure to comply with any remediation requirement may give rise to additional liability for Damages to the extent that noncompliance increases the scope or duration of injuries to Waters of the State, and the Plaintiffs expressly reserve their rights to pursue the Settling Defendant for such increased scope or duration of injuries to Waters of the State caused by Settling Defendant 1 S noncompliance. 12 12. The Plaintiffs reserve, and this Consent Decree is without prejudice to, all rights against the Settling Defendant concerning any matter not addressed in this Consent Decree, including; but not limited to, the following: a. claims based on the Settling Defendant's failure to satisfy any term or provision of this Consent Decree; b. liability arising from the Settling Defendant being in any way responsible for a hazardous substance other than MTBE that is discharged into the Waters of the State; c. liability for remediation cleanup of and discharges not Department pursuant to N. J .A. C. costs removal for to the reported 7: lE-5 prior to the effective date of this Consent Decree as provided in Paragraph 28; d. liability for any future discharge or unsatisfactory storage or containment of any hazardous substance by the Settling Defendant, other than as provided for in an administrative consent order or as otherwise ordered or approved by plaintiff DEP; e. criminal liability; f. liability for any violation by the Settling Defendant of federal or state law that occurs effective date of this C0nsent Decree; and 13 after the g. liability for any claim pending or filed on or after the effective date of this Consent Decree against the Spil.l Fund concerning the discharge of MTBE into · the Waters of the State. VIII. SETTLING DEFENDANT'S COVENANT The Settling Defendant covenants not to sue or assert 13. any claim or cause of action against the State, department, including any agency or instrumentaJ,.ity of the State 1 concerning the matters addressed in the Complaint and this Consent Decree. The .Settling 14. above does not apply Defendant's where covenant the in Plaintiffs Paragraph sue or 13 take administrative action against the Settling Defendant pursuant to Section VII above. IX. FINDINGS AND ADMISSIONS OF LIABILITY Nothing 15. contained in this Consent Decree shall be considered an admission by the Settling Defendantr or a finding by the Plaintiffs or by the Court, of any wrongdoing or liability on the Settling Defendant 1 S part. X. 16. EFFECT OF SETTLEMENT AND CONTRIBUTION PROTECTION Nothing in this Consent Decree shall be construed to create any rights person not a in 1 Party to or grant this any cause Consent 14 of Decree. action to, The any preceding sentence shall not be construed to waive or nullify any rights that any person not a signatory to this Consent Decree may have under applicable law. 17. Settling Defendant expressly reserves and causes of action that concerning any matter 1 the Settling transactionr rights, claims, including any right to contribution, defenses, all demands, Defendant or occurrence may have against any person not a Party to this Consent Decree. 18. When entered/ this Consent Decree will constitute a within the meaning of N.J. S .A. judicially approved settlement 58:10-23.1lf.a. (2) (b) and 42 U.S.C. 9613(f) (2) § for the purpose of providing contribution protection to the Settling Defendant from contribution actions related to the causes of action pled in the Complaint. The Parties agree, Consent Decree this Court finds/ entitled, Consent upon Decree, fully to and by entering this that the Settling Defendant is satisfying protection its from obligations contribution under this actions or claims for matters addressed in the Complaint and this Consent Decree. In 19. order for the Settling under cqntribution actions or claims Consent Decree/ copy Consent the draft Decree 15 obtain from for Complaint and this of to 58:10-23.11f.a. (2) (b) N.J.S.A. protection Defendant matters addressed in the the Plaintiffs published a on Plaintiffs' website and published notice of this Consent Decree in the New Jersey Register, and arranged for notice 1 as described_ in the following paragraph, to the other parties in this case and to the other potentially responsible 58:10-23.11e2. parties in accordance with ·N.J.S.A. Such notice included the following information: a. the caption of this casei b. the name of the Settling Defendant; c. a summary of the terms of this Consent Decree; and that a d. copy of the draft Consent Decree is available on the Plaintiffs 1 website. In fulfillment of N.J.S.A. 20. 58:10-23.11e2, the Parties have provided written notice of this Consent Decree to all other parties in the case and to other potentially responsible parties by: a. Duke sending a letter to liaison defense counsel and serving a copy of such letter on counsel of record in the above captioned litigation via LexisNexis File and Serve; and b. Duke publishing notice in the following newspapers: i. Asbury Park Press; ii. Atlantic City Press; iii. Bergen Record; iv. Burlington County Timesi v. New Jersey Herald; vi. South Jersey Times; and 16 vii. Star Ledger; and c. Plaintiffs Register Office Notice of via Natural public distributing can the Site Resource access a copy Remediation Restoration's at of the New Jersey Program's listserv and the which the http://nj.gov/dep/srp and http://nj.gov/dep/onrr respectively. This notice is deemed compliant with the notice requirement of N.J.S.A. 58:10-23.11e2. The Plaintiffs will submit this Consent Decree to the 21. Court for result entry pursuant of the notice to of Paragraph 35 this Consent below unless, Decree as pursuant a to Paragraphs 19 and 20 above, the Plaintiffs receive information that considerations discloses facts or that indicate to Plaintiffs, in their sole discretion, that the Consent Decree is inappropriate, improper or inadequate. In 22. any subsequent proceeding initiated by recovery of costs, the administrative Plaintiffs and/or damages, for or judicial injunctive relief, or other appropriate· relief not alleged in the Complaint, the Settling Defendant shall not assert, any defense or claim based upon the and may not maintain, principles however, that of the entire nothing in controversy this enforceability of this Consent Decree. 17 doctrine; Paragraph provided, affects the XI . 23. Nothing in GENERAL PROVISTONS this Consent Decree shall be deemed to constitute preauthorization of a claim against the Spill Fund within the meaning of N.J.S.A. 58:10-23.11k or N.J.A.C. 7:1J. 24. to The Plaintiffs enter into this Consent Decree pursuant the police powers of the State of New Jersey for the enforcement of the laws of the State and the protection of the public health and safety and the environment. All obligations imposed upon the Settling Defendant by this Consent Decree are continuing regulatory obligations pursuant to the police powers of the State of New Jersey. 25. No payment owed or made pursuant Decree is intended to constitute a debt, to this Consent damage claim, penalty or other claim that may be limited or discharged in a bankruptcy proceeding. This Consent Decree.shall be governed and interpreted 26. under the laws of the State of New Jersey. 27. If any provision application thereof to extent, invalid or be any of this person Consent or unenforceable, Decree or the circumstance, to any the remainder of this Consent Decree or the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be 18 affected thereby and each provision of this Consent Decree shall be valid and enforced to the fullest extent permitted by law. XII. 28. EFFECTIVE DATE The effective date of this Consent Decree shall be the date upon which this Consent Decree is entered by the Court. XIII. 29. RETENTION OF JURISDICTION This Court retains jurisdiction over both the subject matter of this Consent Decree and the Parties for the duration of the performance of the terms and provisions of this Consent Decree for the purpose of enabling any of the Parties to apply to the Court at any time for such further order, direction, and relief as may be necessary or appropriate for the construction or modification of this Consent Decree, or to effectuate or enforce compliance with its terms. XIV. 30. The COOPERATION AND DOCUMENT RETENTION Settling Defendants agree to make employees available to testify at or prior to trial current for this case only without the need to serve subpoenas so long as such employees are only asked to appear where they would otherwise be subj ~ct to a proper subpoena and Plaintiffs pay the such employees' costs of travel for the purpose of providing testimony. 19 With respect to former employees, facilitate the appearance of prior to trial, travel such witnesses to testify at they would otherwise· be Plaintiffs pay the costs subject of . such consents to appear. The to a former for the purpose of providing testimony 1 employee or so long as such former employees are only asked to appear where subpoena, Settling Defendants agree to Settling proper employees' and the former Defendants will provide to Plaintiffs last known addresses of former employees that are not willing to voluntarily testify unless prohibited by law or contract from doing so. The Settling Defendant further agrees to provide documents in response to reasonable requests by Plaintiffs without requiring the use of a subpoena. 31. The pr~visions of Settling the Defendant March 15, 2005 shall Order comply for with Preservation the of Documents entered in this matter. XV. 32. MODIFICATION This Consent Decree may be modified only by written agreement between the Parties approved by the Court. 33. . Nothing in this Consent Decree shall be deemed to alter the Court's power to enforce, supervise or approve modifications to this Consent Decree. XVI. ENTRY OF THIS CONSENT DECREE 20 The Settling Defendant consents to the entry of this 34. Consent Decree without further notice after the comment period specified in Paragraphs 19·and 20 above. Upon 35. conclusion of the Plaintiffs' review of any public comment received as a result of the notice desoribed in Paragraphs 19 and 20 above, the Plaintiffs shall promptly submit this Consent Decree to the Court for entry. 36 . this If for any reason the Court should decline to approve Consent Decree in the form presented, this agreement is voidable at the sole discretion of any Party and the terms of the agreement may not be used as evidence in any litigation among the Parties or third parties. 37. payment Within as set thirty forth days in of Seqtion request that the Court dismiss the V Plaintiffs' receipt above, . Plaintiffs of shall this action as to the Settling Defendant with prejudice pursuant to Fed. R. Civ. P. 41(a) (2). XVII. 38. Each SIGNATORIES/SERVICE undersigned representative of a Party to this Consent Decree certifies that he or she is authorized to enter into the terms and conditions of this Consent Decree, and to execute and legally bind such Party to this Consent Decree. 3 9. This Consent Decree may be signed and dated in any number of counterparts, each of which shall be an original, and 21 By: Anthony J. Farro, Director Publicly Funded Site Remediation Site Remediation Program Dated: Boornazian, Assistant Commissioner Natural & Historic Resources Dated: NEW JERSEY SPILL COMPENSATION FUND By: Anthony o, Administrator New Jersey Spill Compensation Fund Dated: John J. Hoffman, Acting Attorney General of New Jersey Attorney for Plaintiffs By: Gwen Farley Deputy Attorney General Dated: 23 By: --·-·········-------Anthony J. Farro, Director Publicly Funded Site Remediation Site Remediation Program Dated; By: Rich Boornazian, Assistant Commissioner Natural & Historic Resources Dated: NEW JERSEY SPILL COMPENSATION FUND By: _. . . . . .-.. .- . - - - - - - - - - - - - - - - . Anthony J. Farro, Administrator New o·ersey Spill Compensation Fund Dated: John J. Hoffman, Acting Attorney General of New Jersey Attorney for Plaintiffs Dated: 23 Duke Energy Merchants, LLC By: ------------~--~-------------- David J. atcher, President Duke Energy Merchants, LLC Dated: Person or Entity Authorized to Accept Service on Behalf of Duke Energy Merchants, LLC solely and exclusively with respect to this Consent Decree and for no other purpose: Steven J. Moss Associate General Counsel Duke Energy Business Services LLC 1000 E. Main Street Plainfield, IN 46168 I : With a copy to: 24 I APPENDIX A [SITE LIST] l 25

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