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In re Methyl Tertiary Butyl Ether Prods. Liab. Litig.

ELR Citation: 39 ELR 20239
Nos. No. 00 MDL 1898, (S.D.N.Y., 10/19/2009) Punitive damages denied

A district court held that evidence of an oil company's conduct presented at a trial concerning methyl tertiary butyl ether (MTBE) groundwater contamination in New York is insufficient as a matter of law to establish the degree of maliciousness, recklessness, or wanton conduct to support an award of punitive damages. In the next 15 to 20 years, New York City intends to construct and to use water wells as a back-up source of drinking water for city residents. A jury already determined that when the wells become operational, MTBE levels in the water will peak at 10 parts per billion—the state's current maximum contaminant level (MCL) for MTBE in drinking water. The city seeks punitive damages against the company, but it failed to show how the company's conduct created either significant actual harm or a substantial risk of severe harm to the drinking wells at issue. No reasonable jury could find that the company's conduct created a substantial risk that persistent levels of MTBE at the wells would exceed the state's MCL. Nor could any reasonable jury conclude that the risk of harm to the city residents, resulting from the company's conduct, significantly outstripped the actual harm caused by that conduct. The wells at issue have not been used as a source of drinking water at any time relevant to this litigation. Moreover, the company's conduct in its role as a controller of gasoline stations—from which no major spills occurred—did not create a substantial risk of severely injuring the city at the wells. And since New York banned the use of MTBE in 2004, there is no need to deter further reprehensible conduct specifically relating to the use of MTBE in New York. The court, therefore, granted the company's motion to preclude a jury from considering the issue of punitive damages. (Editor's note: The jury concluded that the company must pay $105 million in compensatory damages for the MTBE contamination).

[Prior decisions in this litigation can be found at 32 ELR 20228, 37 ELR 20116, 38 ELR 20147, 38 ELR 20180, and 38 ELR 20198.]