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State v. Exxon Mobil Corp.

ELR Citation: 45 ELR 20191
Nos. 2013-0591, -0668, (N.H., 10/02/2015)

The Supreme Court of New Hampshire upheld a $236 million jury award against an oil company for groundwater contamination. In 2003, New Hampshire sued several gasoline suppliers, refiners, and chemical manufacturers seeking damages for groundwater contamination allegedly caused by methyl tertiary butyl ether (MTBE). All but the oil company at issue in this case settled with the state. After almost 10 years of litigation, the case went to trial in 2013 on three causes of action: negligence, strict liability for design defect, and strict liability for failure to warn. The jury found in favor of the state on all of its claims. The company raised a number of issues on appeal, all of which were rejected by the court. The CAA does not preempt the state's tort claims. Although the reformulated gasoline program required gasoline used in specific geographic areas to have a minimum oxygen content, achieved by the addition of an oxygenate of the manufacturer's choice, nothing in the CAA or its legislative history supports the conclusion that the choice among oxygenate options was a significant objective of the federal reformulated gasoline program. The choice of oxygenate options is a means toward improving air quality, and the existence of the choice itself is not critical to furthering that goal. As such, the state's tort claims do not conflict with federal law. In addition, the record supports a finding that the company departed from the applicable standard of care by acting unreasonably under the circumstances and that it had a duty to warn the state of the characteristics of MTBE gasoline. Likewise, market share liability was an acceptable theory of recovery, the state was allowed to rely on aggregate statistical evidence, and the company was not unfairly prejudiced in its ability to present evidence of fault on the part of other nonparties. But the court reversed the lower court's imposition of a trust upon approximately $195 million of the damages award. No common-law precedent or statute provides for the imposition of a trust over the state's damages award.