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State v. Exxon Mobil Corp.

Citation. 126 A.3d 266 (N.H. 2015)
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Brief Fact Summary.

Plaintiff, the State of NH sued several gasoline suppliers and chemical manufacturers for causing groundwater contamination. Defendant was one of those companies.

Synopsis of Rule of Law.

Under market share liability, the burden of identification shifts to the defendants if the plaintiff establishes a prima facie case on every element of the claim except for identification of the actual tortfeasors. Each defendant would be severally liable for the portion of the judgment that represents its share of the market at the time of the injury.

Facts.

In 2003, plaintiff the State of NH sued several gasoline suppliers, refiners, and chemical manufacturers. Plaintiff argued that these companies included an additive in their gasoline, which caused extensive groundwater contamination. Plaintiff could not trace the additive back to the company that caused the contamination, but argued that all the companies should be held liable according to their market share of products containing MTBE. Since Exxon’s market share for gasoline in NH was around 30%, the jury found a verdict against Exxon for approximately $236 million of the damages based on its market share.

Issue.

Was trial court correct in using the market share liability theory?

Discussion.

The Court first explained that the purpose of creating the theory of market share liability was to hold businesses accountable to consumers where the traditional standard of negligence is insufficient to determine causation in an era of mass production and complex marketing methods.

The Court noted 6 factors from Restatement (Third) of Torts in examining whether market share liability applies and determined that it should be applied in this case.

  1. As to the first factor, the generic nature of the product, the Court found that plaintiff had alleged sufficient facts for the court to conclude that MTBE is interchangeable with other brands of the same product.
  2. As to the second factor, whether the harm caused by the product has a long latency period, the Court agreed with trial court that the harm caused by MTBE was not latent because it travels faster and further than other chemicals. Thus, the Court found this factor in favor of Exxon.
  3. As to the third factor, the plaintiff’s inability to identify which defendant caused the harm, the Court found it favored plaintiff as all accused companies mixed gasoline together.
  4. As to the fourth factor, the clarity of the causal connection between the defective product and harm suffered by plaintiff, the Court agreed that this favored plaintiff.
  5. As to the fifth factor, whether other medical or environmental factors could have contributed to the harm, the Court noted that Exxon had not asserted that other factors contributed.
  6. As to the sixth factor, the sufficiency of the market data, the Court found that the plaintiff’s experts had presented enough market data.

The Court explained that under market share liability, the burden of identification shifts to the defendants if the plaintiff establishes a prima facie case on every element of the claim except for identification of the actual tortfeasors. Once these elements are established, each defendant is severally liable for the portion of the judgment that represents its share of the market at the time of the injury.


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