## Facts

- Suffolk County Water Authority (SCWA), a public benefit corporation operating public drinking-water systems in Suffolk County, alleged contamination of its groundwater wells by perchloroethylene (PCE/perc), a dry-cleaning solvent.
- SCWA alleged that perc is toxic and inherently dangerous, and that ordinary and intended dry-cleaning use resulted in releases into the environment.
- SCWA alleged that over time perc migrated through soil into Suffolk County’s sole-source aquifer, contaminating SCWA wells and requiring costly treatment and remediation.
- SCWA alleged that perc has a lengthy latency period, can take years to reach groundwater, and can remain for an extended and indeterminate period, complicating proof of source.
- SCWA sued manufacturers and others involved in supplying or integrating perc into dry-cleaning products and equipment, alleging product-based and negligence-based theories.
- SCWA asserted that perc was fungible across manufacturers and that it was impracticable to identify which manufacturer’s perc caused contamination at particular wells.
- Defendants moved to dismiss for failure to state a claim (and alternatively sought summary judgment), arguing that SCWA’s inability to identify a specific manufacturer’s product was fatal and that market share liability should not apply.
- The trial court denied dismissal and permitted a market-share-type theory at the pleading stage; on appeal, the Appellate Division modified aspects of the ruling while recognizing the possible availability of a market-share-type approach subject to limits.

## Issues

1. Whether SCWA could proceed under a market-share-type theory against perc manufacturers despite inability to identify the specific manufacturer whose product reached SCWA’s wells.
2. Whether the complaint sufficiently alleged defect, duty, breach, and causation to survive dismissal under New York pleading standards.
3. What constraints must apply if a market-share-type theory is used in an environmental contamination/property-damage context involving a fungible product with long latency.

## Decision

- The trial court denied defendants’ motion to dismiss, holding that SCWA pleaded legally cognizable claims and that market share liability could be available on the alleged facts.
- The Appellate Division modified aspects of the lower court’s treatment but agreed that, given allegations of fungibility and latency and the resulting identification problem, a market-share-type theory could be appropriate if proven.
- The Appellate Division emphasized that any such theory required a defined relevant market and time period, and proof of defendants’ participation in that market during the period connected to the contamination.

## Legal Principles

- On a motion to dismiss, a court accepts pleaded facts as true and tests legal sufficiency rather than weighing proof.
- Where a plaintiff alleges injury from a fungible product and shows that identifying the specific responsible manufacturer is impracticable due to the product’s nature and latency, a market-share-type allocation of liability may be available in limited circumstances.
- Use of a market-share-type theory requires careful limits, including defining the relevant product market, linking the relevant time period to the alleged harm, and permitting defendants to contest market participation and allocation.
- Allegations that a product is inherently dangerous/defective and that manufacturers knew or should have known of contamination risks can support pleading-stage claims sounding in strict products liability and negligence, even where specific product identification is disputed.

## Conclusion

The New York courts allowed SCWA’s groundwater-contamination claims to proceed past dismissal and recognized that a market-share-type theory may allocate responsibility among perc manufacturers when the product is alleged to be fungible and long-latent, making identification of the specific manufacturer impracticable, provided the plaintiff can define and prove the relevant market and time limits.


Suffolk Cnty. Water Auth. v. Dow Chem. Co., 121 A.D.3d 50 (N.Y. App. Div. 2d Dep’t 2014)