Federal Court Rejects Argument That New York MTBE Case Created New Standard Of Causation

The U.S. District Court for the Southern District of New York granted summary judgment to an American chemical company on claims by a group of Indian plaintiffs for property damage incurred by hazardous chemicals originating from a chemical manufacturing facility in Bhopal, India from 1969 to 1984.  The American company was then the majority owner of the Indian company that owned the facility.  In 2012, the same court granted summary judgment to the American company on the class’s personal injury claims following a catastrophic 1984 gas leak.  The Second Circuit affirmed that grant of summary judgment.  The claims for property damage were stayed pending the resolution of the personal injury claims.

The plaintiffs alleged that there was evidence in the property damage case not present in the personal injury case that established genuine issues of material fact for the purposes of overcoming summary judgment.  The court disagreed.  The plaintiffs also argued that the Second Circuit’s ruling in the recent New York MTBE litigation compels a different, less stringent standard than requiring the plaintiffs to show that the American company caused the complained-of injuries.  The district court explained that the Second Circuit did not announce “a new standard of law” in the MTBE litigation and that the court applied the “traditional substantial factor test” for the causation inquiry.  Additionally, the district court explained that in the MTBE case, the jury found liability not just for the mere use of MTBE, but because of a finding of additional tortious conduct (knowledge that the company knew station owners would store the product containing MTBE in underground tanks that leaked and was substantially certain that its gasoline would leak into groundwater).