Exxon Mobil Corp. v. Ford
71 A.3d 144
Md.2013Background
- In 2005 an Exxon contractor punctured an underground gasoline feed line at an Exxon-owned station; ~26,000 gallons leaked and contaminated the local aquifer supplying wells for ~87 households.
- Over 200 plaintiffs recovered collective trial-court judgments (~$146 million) for various damages; the Court of Special Appeals affirmed in part and reversed in part.
- The Maryland Court of Appeals granted certiorari and in Exxon Mobil Corp. v. Ford, 433 Md. 426, 71 A.3d 105 (2013), affirmed in part and reversed in part, recognizing medical-monitoring claims but reversing certain awards (fear-of-cancer, future monitoring, and diminution awards for uncontaminated wells) and remanding diminution-in-value claims.
- Respondents moved for reconsideration arguing they never elected diminution-in-value and should be allowed on remand to pursue loss of use and enjoyment; Exxon requested reimbursement of supersedeas bond premium costs (~$920,566) under Md. Rule 1-406.
- The Court denied reconsideration, ruled Respondents had elected diminution-in-value at trial (based on their submitted jury instruction), and denied Exxon’s request for bond premium costs, revising the prior pro rata cost order to require each party to bear its own costs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether respondents may elect on remand to pursue loss of use and enjoyment instead of diminution in market value | Respondents: trial court never gave an express election; they never argued permanency inconsistent with loss of use, so they should be allowed to elect on remand | Exxon: respondents proposed and used jury instructions limited to diminution in value; they elected that measure at trial | Held: Respondents had effectively elected diminution-in-market-value by submitting and obtaining jury instructions that struck loss-of-use language; no new election on remand granted. |
| Whether the trial court erred in instructing solely on diminution in market value | Respondents: instruction improperly limited their recovery; they preserved alternative theory | Exxon: instruction mirrored Respondents’ own proposed (modified) pattern instruction | Held: No error — the given instruction reflected respondents’ proposed strikes eliminating loss-of-use; they pursued diminution. |
| Whether Exxon is entitled to recover supersedeas bond premium costs (~$920,566) under Md. Rule 1-406 | Exxon: Rule 1-406 permits inclusion of bond premium in costs; requests specific mandate direction to include premiums assessed pro rata against respondents | Respondents: imposing near-$1M premium liability on individual victims is unconscionable and would deter mass toxic-tort litigation | Held: Denied — court declined to enforce bond premium costs against respondents and revised mandate to have each party bear its own costs. |
| Whether the court should change cost allocation given the mixed result on appeal | Exxon: pro rata allocation of costs (as previously ordered) should include bond premiums | Respondents: mixed affirm/reverse outcome and equities favor relieving respondents from premiums; fairness and deterrence concerns | Held: Court exercised equitable discretion, analogized federal precedents, and ordered that each party bear its own costs. |
Key Cases Cited
- Exxon Mobil Corp. v. Ford, 433 Md. 426, 71 A.3d 105 (Md. 2013) (Court’s prior opinion affirming in part and reversing in part; remanded diminution claims)
- Exxon Mobil Corp. v. Albright, 433 Md. 502, 71 A.3d 150 (Md. 2013) (related opinion addressing similar issues from same incidents)
- Exxon Valdez v. Exxon Mobil Corp., 568 F.3d 1077 (9th Cir. 2009) (appellate discretion to order each party to bear costs where judgment is affirmed in part and reversed in part)
- Furman v. Cirrito, 782 F.2d 353 (2d Cir. 1986) (costs are reimbursement, not punitive; courts may deny premium bond costs in equitable circumstances)
- Republic Tobacco Co. v. N. Atl. Trading Co., Inc., 481 F.3d 442 (7th Cir. 2007) (district courts have broad discretion to deny bond premium costs when appellate judgment is modified)
- O’Donnell v. McGann, 310 Md. 342, 529 A.2d 372 (Md. 1987) (avoid constructions that create constitutional problems related to ability to post supersedeas bonds)
- Washington Suburban Sanitary Comm’n v. Phillips, 413 Md. 606, 994 A.2d 411 (Md. 2010) (statutory or rule construction should avoid casting doubt on constitutionality)