## Facts

- Exxon used methyl tertiary butyl ether (MTBE) as a gasoline additive at stations it operated or controlled in Queens, New York, during the relevant period.
- MTBE is highly soluble and persistent in groundwater and can impair drinking water quality at low concentrations through taste and odor.
- Gasoline spills and leaks occurred at multiple Exxon stations, including leaks linked to underground storage tanks; testing at one location found MTBE far above New York’s maximum contaminant level.
- MTBE contamination migrated toward the capture zone of the City’s “Station Six Wells,” a set of production wells planned for future drinking water supply.
- The City claimed Exxon knew MTBE posed a distinctive groundwater contamination risk but failed to implement reasonable prevention and detection measures and inadequately warned about MTBE’s risks.
- The City sued under New York law for negligence, trespass, public nuisance, and failure to warn, seeking damages for designing and constructing treatment facilities and for monitoring and protective measures.
- After an eleven-week jury trial, the jury found Exxon liable on all claims and awarded approximately $104.69 million in compensatory damages; the judgment also included declaratory relief tied to responsibilities for contamination affecting the Station Six Wells.

## Issues

1. Whether the City’s state-law tort claims were preempted by the Clean Air Act and the federal reformulated gasoline program.
2. Whether the City showed a present, legally cognizable injury and ripeness where the wells were not yet in service and some contamination levels had not exceeded regulatory limits.
3. Whether the evidence was sufficient on causation and damages, including proof linking Exxon’s releases to contamination threatening the Station Six Wells and proof supporting the treatment-cost award.
4. Whether asserted errors in jury instructions, evidentiary rulings, or the scope of declaratory relief required reversal or modification.

## Decision

- The Second Circuit largely affirmed the judgment for the City.
- The Clean Air Act did not preempt the City’s negligence, trespass, public nuisance, or failure-to-warn claims.
- The City established a present and ripe injury based on actual contamination and a credible threat of further contamination requiring reasonable treatment and protective expenditures.
- The evidence was sufficient to support liability, causation, and the $104.69 million compensatory damages award.
- The court sustained the challenged relief in substance, with only limited adjustments not altering the core outcome.

## Legal Principles

- Federal fuel regulations that permit multiple compliance options do not preempt state tort claims concerning the handling, control, and risk communication of a particular additive absent a clear conflict or mandate.
- A municipal water provider may suffer a present, compensable injury when contamination or threatened contamination of a drinking-water source makes reasonable treatment, monitoring, or protective action necessary, even before the source is placed in service or regulatory thresholds are exceeded.
- In complex environmental contamination cases, causation may be proven through circumstantial evidence combined with expert testimony and hydrogeologic modeling, even when the contaminant is chemically indistinguishable across sources.
- Under New York law, contamination interfering with public access to safe drinking water may support public nuisance liability; migration of contaminants into groundwater beneath a plaintiff’s property may support trespass; and failure-to-warn liability may rest on proof the defendant knew or should have known of distinctive risks yet did not provide adequate warnings or precautions.

## Conclusion

The Second Circuit upheld a substantial verdict holding Exxon liable for MTBE-related groundwater contamination threatening New York City’s future drinking-water wells, rejecting Clean Air Act preemption, recognizing treatment planning as a ripe injury, and finding the record sufficient to support causation and compensatory damages.


In re Methyl Tertiary Butyl Ether (MTBE) Prods. Liab. Litig., 725 F.3d 65 (2d Cir. 2013)