Facts
- The State of New Hampshire sued Exxon Mobil Corporation and other gasoline-related companies in New Hampshire state court, alleging that defendants’ use of methyl tertiary butyl ether (MTBE) in gasoline contaminated groundwater throughout the state.
- New Hampshire alleged that MTBE, once released, spread readily through groundwater and created widespread cleanup and remediation costs.
- Because gasoline containing MTBE from multiple suppliers was commingled in distribution and sale, New Hampshire could not identify which defendant’s gasoline caused contamination at particular sites.
- New Hampshire proceeded under a market-share liability theory, seeking to allocate damages among defendants based on each defendant’s share of the relevant New Hampshire gasoline market during the period of injury.
- A jury found defendants liable and awarded total damages of roughly $800 million; Exxon’s approximate 30% market share resulted in a judgment of about $230+ million against Exxon.
- The trial court permitted damages to be allocated using market-share liability.
- The trial court also imposed a trust over a substantial portion of the award (about $195 million), restricting how the State could use that portion of the damages.
- Exxon appealed, challenging (among other issues) the use and application of market-share liability and trial rulings affecting liability and damages.
- The State cross-appealed, challenging the trial court’s imposition of the trust.
Issues
- Whether New Hampshire law permits recovery under a market-share liability theory for MTBE groundwater contamination when the State cannot identify which defendant’s product caused contamination at specific locations.
- Whether, on this record, the trial court properly allowed the jury to allocate damages among defendants based on market share.
- Whether the trial court had authority to restrict the State’s use of a large portion of the damages award by placing it into a trust.
Decision
- The New Hampshire Supreme Court affirmed the trial court’s rulings on the merits, including the application of market-share liability and the judgment holding Exxon liable for its share of the MTBE-related harm.
- The court reversed the portion of the judgment imposing a trust over a substantial part of the damages award, holding that the trial court erred by limiting how the State could use that money.
Legal Principles
- Market-share liability may be used where a plaintiff proves a prima facie case on all elements except identification of the specific tortfeasor, and product identification is impracticable because products from multiple makers were fungible and commingled.
- Under market-share liability, liability is several (not joint) and is apportioned according to each defendant’s proven share of the relevant market at the time of injury.
- In deciding whether market-share liability is appropriate, courts may consider factors reflected in the Restatement (Third) of Torts, including: whether the product is generic or interchangeable, whether the harm has a long latency period, the plaintiff’s inability to identify the source, the clarity of the causal link, the presence of other likely contributing causes, and the adequacy of market-share data.
- A defendant’s market share may be established through competent evidence sufficient to permit a rational allocation of responsibility, even if the plaintiff cannot trace contamination at a given location to a particular supplier.
- A trial court may not, absent proper legal authority, restrict a sovereign plaintiff’s use of a money judgment by ordering that damages be placed into a trust or otherwise earmarked for particular expenditures.
Conclusion
State v. Exxon Mobil Corporation held that New Hampshire could recover for statewide MTBE groundwater contamination using market-share liability when commingling made supplier identification impossible, affirming Exxon’s liability in proportion to its market share while reversing the trial court’s separate order that placed a major portion of the damages into a trust.