“Water, Water, Everywhere, Nor Any Drop to Drink”: Oil Companies attempt CAFA removal after plaintiffs alleging contaminated ground water redefine the class definition. Another decision in the deluge of commencement cases.

In re Methyl Tertiary Butyl Ether ("MTBE") Products Liability Litigation, No. 1:00-1898, MDL 1358, 2006 WL 1004725 (S.D.N.Y. Apr. 17, 2006).

Methyl tertiary butyl ether (MTBE), a gasoline additive, is added to enhance gasoline combustion and reduce tailpipe emissions thereby resulting in less pollution, at least theoretically. However, MTBE readily dissolves in water, can move rapidly through soils and aquifers, and is resistant to microbial decomposition making it difficult to remove in water treatment. Further, the EPA has classified MTBE as a potential human carcinogen. Thus, it’s easy to understand how property owners abutting service stations would be skittish regarding their drinking water, especially if it originates in the ground water under their land. In this class action, the plaintiffs acted on their concerns, rational or not, and filed a class action against Shell Oil and Exxon Mobile alleging negligence, strict liability, and conspiracy claims. After the plaintiffs amended their complaint post-CAFA (for the fifth time), refined the class definition and brought in two plaintiff to replace those who had already settled, the defendants, thirsty for a federal forum, removed the action on five separate grounds, including CAFA and the Energy Policy Act of 2005 (allowing removal of MBTE cases). Like Samuel Taylor Coleridge’s Ancient Mariner, the defendants’ thirst, however, must remain unquenched.

Addressing CAFA, Judge Shira Scheindlin noted that simply naming new plaintiffs for others who “fall out of the case…is a common and normally an unexceptional” event that does not recommence the action for removal purposes. Applying Illinois law (the home state of the original filing), the court found that an amendment can commence a new action if it does not relate back, meaning if it does not arise out of the “same transaction or occurrence” described in the original suit.

Like CAFA, the Energy Policy Act of 2005 had a similar timing issue, since that law only applied to “claims and legal actions” filed after August 8, 2005. The new plaintiffs did not trigger a new case for purposes of establishing jurisdiction under either statute.

The only difference created by the fifth amended complaint was greater clarity, given that the new pleading was simply more specific: it changed the class definition from property owners of non-commercial property “upon which a private water supply well exists that provides drinking water” to those “who are within 3000 feet of services stations that are or were owned or operated by Defendants.” Rejecting defendants’ claims that their service stations were now a specific target, Judge Scheindlin found that the previous version of the complaint took aim at “fact-specific spill information.” “Thus the essential nature of plaintiffs’ claims remains the same,” and the latest complaint “did not in effect begin a new case.” The judge supported her argument with Seventh Circuit case law, but did not discuss in detail by now familiar commencement cases like Knudsen v. Liberty Mutual Ins. Co. (“Knudsen II”), 435 F.3d 755 (7th Cir. 2006), and Plubell v. Merck & Co., 434 F.3d 1070 (8th Cir. 2006). (Editors’ Note: See the CAFA Law Blog summary of Knudsen II posted on January 30, 2006 and the CAFA Law Blog summary of Plubell posted on January 25, 2006.)

One consolation for the oil companies: Judge Scheindlin declined awarding attorneys fees to the plaintiffs, given that “[r]emovability is an evolving and difficult field of law.”