State of Maryland v. Exxon Mobil Corporation, 1:18-cv-00459-SAG

Background

Maryland sued ~65 manufacturers, marketers, and distributors alleging MTBE contamination of State waters and seeking cleanup costs, damages, and injunctive relief. Complaint asserts strict liability (design, failure to warn, abnormally dangerous activity), public nuisance, trespass, negligence, and violations of Maryland environmental statutes.
MTBE: widely used gasoline oxygenate in 1980s–1990s; highly soluble, persistent in groundwater, and difficult/expensive to remove; Maryland alleges widespread detection and likely health risks.
Defendants include refiners that supplied MTBE-blended gasoline into interstate distribution systems (e.g., Colonial Pipeline) and downstream handlers operating storage/retail sites in Maryland.
Multiple defendants moved to dismiss for lack of personal jurisdiction and/or failure to state claims; key jurisdictional contests involved TPRI, Lukoil Pan Americas (LPA), and PJSC Lukoil (PJSC).
Court denied remand earlier (federal jurisdiction based on a colorable federal preemption defense under the Energy Policy Act). In this opinion the court: grants PJSC's 12(b)(2) motion; denies TPRI's and LPA’s 12(b)(2) motions; grants-in-part and denies-in-part the joint Rule 12(b)(6) motion (notably dismissing trespass claims only to the extent they concern properties not in the State’s exclusive possession).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Personal jurisdiction over nonresident suppliers (TPRI, LPA, PJSC)	Suppliers put MTBE into national distribution (pipeline/barge) that regularly and foreseeably supplied Maryland; that suffices for specific jurisdiction	No direct sales/operations in Maryland; lack of purposeful availment; PJSC argues parent-company status insufficient	Specific jurisdiction exists over TPRI and LPA (prima facie) based on distribution into Maryland market; PJSC dismissed for lack of jurisdiction (parent conduct insufficient; no veil-piercing shown)
Adequacy of causation pleading for product torts	Maryland may use commingled-product (or market-share) theories when fungible product prevents identification of single source; alleges defendants jointly controlled the market	Defendants: product-identification is essential; fungibility precludes causation and requires dismissal	Court predicts Maryland would permit commingled-product liability where each defendant’s product is shown present in the commingled mix and that mix caused harm; thus dismissal on causation grounds denied at pleading stage
Strict liability (design) and bystander recovery	State: MTBE gasoline design made it unreasonably dangerous to public health and environment; bystander (non-user) recovery appropriate for foreseeable harms to public resources	Defendants: consumer-expectation test fails because State wasn’t an ordinary consumer of the product (injury not from use as fuel)	Court finds consumer-expectation test applicable; bystander recovery not barred — State plausibly alleges foreseeable harm from ordinary use/storage/distribution and survives dismissal
Failure-to-warn duty and scope	State: defendants knew hazards and had duty to warn foreseeable downstream users and public; omissions caused contamination	Defendants: no duty to "warn the world," sophisticated-user defense, and futility where defendants controlled tanks	Court holds State plausibly pleaded duty and causation; sophisticated-user and futility defenses premature at pleading stage
Public nuisance and supplier liability	State: manufacture, marketing, and distribution substantially contributed to public nuisance (widespread water pollution)	Defendants: nuisance requires exclusive control of nuisance-causing instrumentality; manufacturers/distributors not liable	Court rejects an exclusive-control requirement and allows nuisance claims to proceed against entities alleged to have substantially contributed to the nuisance
Trespass concerning State waters and citizens' properties	State (parens patriae/trustee): may vindicate public/quasi-sovereign interests including water resources	Defendants: trespass requires exclusive possession; State lacks exclusive possession of public waters or private wells	Court dismisses trespass claims only as to properties not in State’s exclusive possession (e.g., natural waters and citizens’ properties); trespass otherwise survives for State-owned properties
Statutory environmental claims under Maryland Environment Article	State: defendants who manufactured/marketed/supplied MTBE are "persons responsible for the discharge" under E.A. §4–401(j)(1)(iii) because their acts/omissions placed oil where likely to reach State waters	Defendants: statutory liability limited to owners/operators of discharged oil or facilities, not upstream manufacturers/suppliers; group pleading inadequate	Court applies plain statutory text; subsection (iii) covers anyone who "through act or omission causes the discharge." State plausibly alleges that manufacturers/suppliers caused/distributed MTBE into locations likely to reach waters; statutory claims survive pleading stage

Key Cases Cited

Int'l Shoe Co. v. Washington, 326 U.S. 310 (establishes minimum contacts test for personal jurisdiction)
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (stream-of-commerce purposeful availment principle)
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (general jurisdiction limits)
J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (discusses stream-of-commerce and distributor-directed conduct)
Phipps v. General Motors Corp., 278 Md. 337 (Maryland adoption of strict products liability principles)
Pittway Corp. v. Collins, 409 Md. 218 (Maryland proximate-cause and causation tests)
Zenobia v. Owens-Illinois, Inc., 325 Md. 420 (seller/manufacturer strict liability and warning principles)
ACandS, Inc. v. Godwin, 340 Md. 334 (bystander recovery and asbestos exposure causation)
Sindell v. Abbott Laboratories, 607 P.2d 924 (Cal. 1980) (market-share liability doctrine)
In re Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., 379 F. Supp. 2d 348 (S.D.N.Y. 2005) (commingled-product theory in MTBE context)
Rhode Island v. Atlantic Richfield Co., 357 F. Supp. 3d 129 (D.R.I. 2018) (court applied commingled/market theories to MTBE claims)