State v. Atlantic Richfield Company , No. 340

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- 14 Wncv (Teachout, J., January 15 , 2015)

[The text of this Vermont trial court opinion is unofficial. It has been reformatted from the original. The accuracy of the text and the accompanying data included in the Vermont trial court opinion database is not guaranteed.] STATE OF VERMONT

SUPERIOR COURT CIVIL DIVISION Washington Unit Docket No. 340

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- 14 Wn cv

STATE OF VERMONT

, Plaintiff

v.

ATLANTIC RICHFIELD COMPANY, et al.

Defendants.

DECISION

Defenda n ts Exxon Mobil Corporation, ExxonMobil Oil Corporation, and Mobil Corporation’s Motion to Dismiss

This matter is before the Court on a Motion to Dismiss filed July 18, 2014 by d efendants

Exxon Mobil Corporation, Exxon Mobil Oil Corporation, and Mobil Corporation (“Exxon”). Th e majority of the 28 c o

- d efendants named in the State’s Complaint have joined in Exxon’s Motion

to Dismiss. Oral argument was held on the motion on November 13, 2014. At oral argument all defendants were represented by Attorney David J. Lender. The State of Vermont was represented by Assistant Attorney General Scot L. Kline.

Background

This action relates to contamination of Vermont waters by methyl tertiary butyl ether (“ M T B E”), a gasoline additive. The State has filed this action a gainst 29 defendants , all of

who m allegedly participated in the promotion, marketing, distribution, an d sale of gasoline containing M T B E in Vermont. Due to its chemical characteristics

, MTBE spreads farther through groundwater and is more difficult to remediate than other gasoline constituents . The

State seeks re mediation and recovery costs under a number of legal theories

, including the violation of Vermont groundwater and natural resource protectio n statutes, negligence, strict products liability, public and private nuisance, trespass, and civil conspiracy.

MTBE has been a known contamina nt of Vermont waters since the early 2000s. In 2005

, t he Vermont legislature recognized the dangers posed by MTBE and passed legislation banning the sale or storage of gasoline containing MTBE effective January 1, 2007. Despite this ban, the State alleges in the complaint that “[o]ver the past six years, testing at sites and monitoring or [sic] production wells across the State has revealed for the first time newly discovered MTBE contamination in groundwater that was not reasonably discoverable prior to then.” Compl. ¶ 172, filed June 5, 2014.

Neither Exxon nor any other defendant has filed an Answer. Rath er, Exxon filed , and

other defendants joined

, a Motion to Dismiss for failure to state a claim upon which relief can be granted, pursuant to V.R.C.P. 12(b)(6). In their Motion to Dismiss, Defendants argue that the2

State’s complaint is time barred by the g eneral six

- year statute of limitations for civil actions, 12 V.S.A. § 511

.

Analysis

The purpose of a Rule 12(b)(6) motion is to test the law of the claim, not the facts that might support it. Kane v. Lamothe, 2007 VT 91, ¶ 14, 182 Vt. 241 . The c ourt will only grant a motion to dismiss for failure to state a claim “when it is beyond doubt that there exist no facts or circumstances, consistent with the complaint that would entitle the plaintiff to relief.” Bock v.

Gold , 2008 VT 81, ¶ 4, 184 Vt. 57 5. In examining a Rule 12(b)(6) motion, the court assumes that all factual allegations in the complaint are true and must also “accept as true all reasonable inferences that may be derived from plaintiff's pleading. ” Richards v. Town of Norwich, 169 Vt. 44, 48

– 49 (1999). “Since averments of time and place are material for testing the sufficiency of a complaint, defenses based on a failure to comply with the applicable statute of limitations are properly raised in a motion to dismiss.” Bethel v. Mount Anthony Union High Sch. Dist. , 173 Vt. 633, 634 (2002). Thus, if, accepting as true all factual allegations in the compla i nt and all

reasonable inferences drawn therefrom the compl a int does not state a claim that accru ed within the limitations period

, the motion should be granted and the complaint dismissed.

Exxon argues that because the State knew of MTBE contamination in Vermont and knew of the harmful environmental effects of MTBE on State waters by 2007 at the latest

, the complaint, which alleges a g eneralized injury to the state waters as a whole

, is time

- barred and

should be dismissed.

The State opposes the motion, arguing that there is no statute of limitations for claim s relate d to a public trust resource. The State relies on 12 V.S.A. § 462

, which provides t hat the

statute of limitations shall not extend to “ lands belonging to the state.” This is an exception to the general rule that the limitations “for the commencement of actions shall apply to the same actions when brought in the name of the state, or otherwise, for the benefit of the state, as in actions brought by citizens.” 12 V.S.A. § 461. Although the Supreme Court has upheld th e § 462 exemption as constitutional , its review explicitly characterized the provision as exempting

“own ership claims” relating to State lands

. Chittenden v. Waterbury Ctr. Cmty. Church, Inc.

, 168 Vt. 478, 483 (1998). 1 In other words, the usual effect of § 462 is that plaintiffs cannot assert adverse possession ownership claims against the State or other entities identified in the statute. See, e.g., Roy v. Woodstock Cmty. Trust, Inc. , 2013 VT 100A, ¶ 45.

In arguing t hat § 462 somehow eliminates a statute of limitations defense when the the

State asserts harm to groundwater, a public trust resource, the State relies on the 1918 Vermont Supreme Court decision in Hazen v. Perkins . 92 Vt. 414 (1918). That case involved, in relevant

1 A paragraph in this case summarizes the effect of the pertinent statute of limitations provisions: “ Generally, Vermont law applies a fifteen

- year limitation period to actions seeking recovery or possession of land. See 12 V.S.A. §

502 . Accordingly, one who seeks to maintain a claim of adverse possession or to assert a prescriptive easement must demonstrate that the use or possession in question has outlasted this limitation period. See Community Feed Store, Inc. v. Northeastern Culvert Corp., 151 Vt. 152, 155, 559 A.2d 1068, 1070 (1989) (noting that elements of adverse possession and pr escriptive easement claims are ‘essentially the same’ ). In this case, however, there is no limitation period because of

the effect of 12 V.S.A. § 462 . That provision exempts from any limitation period al l ownership claims relating to ‘ lands given, granted, sequestered or appropriated to a public, pious or charitable use, or t o lands belonging to the state.’ Id. ”3

part, the defendant’s claim that he had obtained “a prescriptive right to control the flow of water from [Lake Morey] by means of a dam or gate at the outlet.” Id

. at 420. While t he Court did

note th at the water of the lake and land underneath the lake were held by the state “for the common and public use of all

, ” it grounded its reject ion of the defendant’s prescriptive easement argument in a statutory predecessor of § 462. Id

. In doing so

, the Cou rt specifically held “[w]ith such a statute in force, no prescriptive rights , such as are here claimed by defendant, affecting real property of the State , could be acquired.” Id

. (emphasis added). Control of the water level occurred “by the dam and sluice erected at the outlet by direction of the General Assembly. . .”

Id. In other words, the claimant would not have been able to control the water level without having an interest in the dam and slu ice, which were physical components of real property owned by the State. This case is consistent with § 462 cases generally , i.e., that one cannot acquire interests in real property interests owned by the State by adverse possession. It does not

support the State’s argument in this case that § 462 exempts the State from the requirement to file claims of injury within the statute of limitations period.

Since 1918, § 462 has been applied consistently to preclude claims of adverse possession

or prescriptive right s against real property of the State. Section 462 has never been applied to common law tort actions or actions by the state to enforce environmental statutes, even where a public trust resource is involved. This comports with the plain language of § 462

, which applies only to “ lands belonging to the state.” Section 462 does not, therefore, eliminate the statute of limitations for causes of action for injury to the State’s waters as a whole as a public trust

resource

.

Thus, the Court mu st determine whether

, based on the fac ts alleged in the complaint

, the

State has asserted claims that accrued within the six year limitations period.

A cause of action accrues “upon ‘the discovery of facts constituting the basis of the cause

of action or the existence of facts sufficient to put a person of ordinary intelligence and prudence on inquiry which, if pursued, would lead to the discovery.” Agency of Natural Resources v.

Towns , 168 Vt. 449, 452 (1998) (quoting Union Sch. Dist. v Lench , 134 Vt. 4 24, 427 (1976)).

C onsidering t he complaint as a whole

, the S tate primarily alleges a generalized injury to the

S tate’s groundwater as a public trust resource. As the S tate undisputedly discovered this generalized injury more than six years ago, t his claim is time

- barred by the six year statute of limitations in 12 V.S.A. § 511. T herefore

, Exxon’s motion to dismiss must be granted to the

extent that the State asserts a generalized claim of harm to the State’s groundwater system as a whole, without ref

erence to any specific geographic location or act of contamination

.

This is not to say, however, that the State has not alleged and cannot establish some

claims that are not time

- barred. The State’s broad assertion that it has, within the past six years, discovered MTBE contamination that was not reasonably discoverable before then does not provide specific factual information sufficient to determine when or where these specific claims of discovery occurred. While the State has not provided suffici ent clarity in the complaint as filed, presumably based on its theory that a generalized claim was not time

- barred, it has alleged discoveries within the past six years and may be able to identify claims that are not time

- barred

. Therefore, the court cann ot conclude that there are no facts or circumstances under which the

Plaintiff would be entitled to relief

.4

While the complaint will not be dismissed for this reason, as filed it does not sufficiently comply with the requirements of V.R.C.P. 9 (f) to put defendants on adequate notice of permissible claims. The State will be allowed additional time to amend the complaint to do so.

T he State argues that one of its claims, brought under 10 V.S.A. § 1390

, is timely as that statutory provision became effect ive in June 2008

, which was within the limitations period.

Section 1390 , entitled “Policy,” sets out the State’s policy on protecting and managing the State’s groundwater. It does not, on its face, authorize a specific new cause of action. This legislat ion does not relieve the State from meeting the statute of limitations requirements

.

Finally, the State argues that the “continuing tort doctrine” prevents application of the statute of limitations to some or all of the State’s claims. This doctrine has not been adopted in Vermont. Even assuming it applies, however, the question of under what circumstances the doctrine applies is one of fact and therefore its determination must await specific findings regarding what injuries the State suffered, when, and the nature of the State’s claim. At this point, the issue is whether sufficient fac ts have even been alleged that would support a claim

based on the doctrine.

Conclusion

The exemption in 12 V.S.A. § 462 does not act as a complete bar to the application of the statute of limitations in 12 V.S.A. § 511 for alleged generalized injur y to Vermont’s groundwater system as a whole

. Thus, to the extent the S tate’s complaint puts forth a general ized injury to

S tate waters

, such a claim is dismissed.

Because the complaint encompasses within it the assertion of discovery within the last six years of contamination not reasonably discoverable before then, t he court cannot conclude that the entire case should be dismissed. Nonetheless, the State has the obligation to comply with the pleading requirements of V.R.C.P. 9 (f) rather than make o nly a highly generalized claim.

Order

For the foregoing reasons, the motion to dismiss is granted as to pursuit of a claim for a generalized injury to the State waters as a whole, and otherwise denied at this time.

The State is granted 60 days to file an amended complaint that complies sufficiently with V.R.C.P. 9 (f) for purposes of Rule 12(b)(6).

Pending motions regarding case management will not be addressed until the filing of an amended complaint and answer to the amended complaint.

Dated at Mo ntpelier, Vermont this 1 5 th day of January 2015.

_____________________________ Mary Miles Teachout
Superior Judge