State, ex rel. Attorney General of the State of Delaware v. BP America Inc.

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
STATE OF DELAWARE, ex rel. )
KATHLEEN JENNINGS, Attorney )
General of the State of Delaware )
)
Plaintiff, )C.A. No. N20C-09-097 MMJ CCLD
)
BP AMERICA., BP P.L.C., CHEVRON )
CORPORATION, CHEVRON U.S.A. INC., )
CONOCOPHILLIPS, CONOCOPHILLIPS )
COMPANY, PHILLIPS 66, PHILLIPS 66 )
COMPANY, EXXON MOBIL )
CORPORATION EXXONMOBIL OIL )
CORPORATION, XTO ENERGY INC., )
HESS CORPORATION, MARATHON OIL )
CORPORATION, MARATHON OIL )
COMPANY, MARATHON PETROLEUM )
CORPORATION, MARATHON )
PETROLEUM COMPANY, LP )
SPEEDWAY LLC, MURPHY OIL )
CORPORATION, MURPHY USA INC., )
ROYAL DUTCH SHELL PLC, SHELL OIL )
COMPANY, CITGO PETROLEUM )
CORPORATION, TOTAL S.A., TOTAL )
SPECIALITIES USA INC., OCCIDENTAL )
PETROLEUM CORPORATION, DEVON )
ENERY CORPORATION, APACHE )
CORPORATION, CNX RESOURCES )
CORPORATION, CONSOL ENERGY )
INC., OVINTIV, INC., and AMERICAN )
PETROLEUM INSTITUTE, )
)
Defendants. )
1
Submitted: January 29, 2024
Decided: February 12, 2024
On CNX Resources Corporation, Citgo Petroleum Corporation
and Murphy USA Inc.’s Motion for Reargument
DENIED
On Consol Energy Inc.’s Joinder in Motion for Reargument
DENIED
On Apache Corporation’s Motion for Clarification
and/or Limited Reconsideration
of the Court’s January 9, 2024 Opinion
DENIED
ORDER
1. By Opinion dated January 9, 20241, the Court granted in part and denied
in part Defendants’ various Motions to Dismiss.
2. Defendants CNX Resources Corporation, Citgo Petroleum Corporation
and Murphy USA Inc. (“CNX”); Consol Energy Inc. (“Consol”); and Apache
Corporation (“Apache”) have moved for reargument.
3. CNX argues that the Court overlooked the arguments for dismissal of the
failure to warn claim. Specifically, the State failed to adequately allege that CNX
had “superior knowledge” or “special knowledge” that the products were likely to
be dangerous for the use for which the products were supplied. CNX asserts that
Rule 9(b)’s heightened pleading standard applies to the State’s failure to warn claim.
1
State ex rel. Jennings v. BP America Inc., et al., 2024 WL 98888 (Del. Super.).
2
4. Consol also argues that the State failed to allege this it had “special
knowledge” that its use of products would likely contribute to climate change.
5. Apache argues that the State did not plead that Apache specifically knew
that its products were endangering the environment or harming consumers. The
State did not allege that Apache “researched the effects of fossil fuel consumption
or that Apache participated in any discussions regarding the same.” Thus, Apache
asserts that there can be no inference of its knowledge. Additionally, Apache
contends that the State has failed to allege that “any of Apache’s production made
its way to Delaware nor has it pleaded any specific sales or marketing efforts to
consumers...in the State of Delaware.”
6. As to CNX, the State responds that under Rule 9(b), while negligence must
be pled with particularity, “knowledge and other condition of mind...may be averred
generally.” The Rule 9(b) particularity requirement regarding state of mind applies
to fraud claims. Further, the arguments about “special” or “superior” knowledge
were exhaustively briefed.
7. As to Consol, the State’s response is the same.
8. As to Apache, the State additionally responds that the State alleged that
each Defendant knew or had reasons to know that their fossil fuel products were
causing harm to their consumers and to the State. The State also alleged that Apache
3
made statements in and outside Delaware regarding their campaign of deception and
thus failed to warn consumers.
9. It the January 9, 2024 Opinion, the Court found, in part:
Failure to Warn
The State argues that Defendants failed to warn by
making misrepresentations about climate change and
attempting to indirectly induce Delaware consumers to
buy their fossil fuel products.2 Defendants “had a duty to
warn both consumers and bystanders that would
foreseeably be harmed by the intended use of their
products, and because [Defendants] made sure the dangers
of their products were neither open nor obvious through
their pervasive climate-disinformation campaigns.”3
Under Section 388 of the Restatement (Second) of Torts
and Delaware law, a manufacturer has a duty to warn users
of the dangerous nature of its products.
One who supplies directly or through a third person
a chattel for another to use is subject to liability to those
whom the supplier should expect to use the chattel with
the consent of the other or to be endangered by its probable
use, for physical harm caused by the use of the chattel in
the manner for which and by a person for whose use it is
supplied, if the supplier
(a) knows or has reason to know that the chattel is or is
likely to be dangerous for the use for which it is supplied,
and
(b) has no reason to believe that those for whose use the
chattel is supplied will realize its dangerous condition, and
2
Pl.’s Answering Brief in Opposition to Defs. Joint Motion to Dismiss for Failure to State a
Claim at 53.
3
Id. at 39.
4
(c) fails to exercise reasonable care to inform them of
its dangerous condition or of the facts which make it likely
to be dangerous.
This duty extends not only to those for whose use
the chattel is supplied but also to third parsons whom the
supplier should expect to be endangered by its use, which
may include persons who have no connection with the
ownership or use of the chattel itself. The manufacturer’s
duty is dependent on whether it had knowledge of the
hazards associated with its product. The standard for
determining the duty of a manufacturer to warn is that
which a reasonable (or reasonably prudent) person
engaged in that activity would have done, taking into
consideration the pertinent circumstances at that time. And
even where that knowledge exists, liability is imposed
only where the manufacturer had no reason to think that
the users of its products would recognize the danger, and
it fails to exercise reasonable care in warning users of the
product’s dangerous nature.4
The State argues that Defendants had a duty to warn
because they knew or had reason to know that their fossil
fuel products were causing harm to their consumers and to
the State.5 The State also argues that it is an injured
bystander. Foreseeable bystanders need to be protected as
well.6 Courts have recognized that “bystanders should be
entitled to greater protection than the consumer or user
4
Ramsey v. Georgia S. Univ. Advanced Dev. Ctr., 189 A.3d 1255, 1278–1279 (Del. 2018) (citing
Restatement § 388) (quotes omitted).
5
Pl.’s Answering Brief in Opposition to Defs. Joint Motion to Dismiss for Failure to State a
Claim at 42.
6
Id. at 40.
5
where injury to bystanders from the defect is reasonably
foreseeable.”7
In response, Defendants argue that there is “no duty
to warn of or protect invitees from an open and obvious
danger.”8 Defendants allege that the State’s own
allegations in the Complaint admit that the potential
dangers of fossil fuel use on the climate have been “open
and obvious” for decades.9 Thus, Defendants had no duty
to warn about these dangers, and the negligent failure to
warn claims fail as a matter of law.10
The Court finds that the State has stated a claim for
failure to warn. The State has alleged that Defendants
knew that their products were endangering the
environment, and harming their consumers and the State
of Delaware (a valid bystander). However, the question of
whether the danger was open and obvious is not
appropriate for resolution at the dismissal stage.
10. The purpose of moving for reargument is to seek reconsideration of
findings of fact, conclusions of law, or judgment of law.11 Reargument usually will
be denied unless the moving party demonstrates that the Court overlooked a
precedent or legal principle that would have a controlling effect, or that it has
7
Elmore v. Am. Motors Corp., 70 Cal. 2d 578, 586 (1969); see also Prosser & Keeton on Torts §
100, pp. 703–704 (5th ed. 1984).
8
Defs. Joint Opening Brief in Support of Motion to Dismiss for Failure to State a Claim at 56
(quoting Jones v. Clyde Spinelli, LLC, 2016 WL 3752409, at *2 (Del. Super.)).
9
Id. at 57.
10
Id. at 57–58.
11
Hessler, Inc. v. Farrell, 260 A.2d 701, 702 (Del. 1969).
6
misapprehended the law or the facts in a manner affecting the outcome of the
decision.12 “A motion for reargument should not be used merely to rehash the
arguments already decided by the court.”13 To the extent moving Defendants have
asserted issues that were not raised in the submissions in support of its motion, new
arguments may not be presented for the first time in a motion for reargument.14 A
court cannot “re-weigh” evidence on a motion for reargument.15
11. The Court has reviewed and considered the parties’ written submissions
and arguments. The Court did not overlook a controlling precedent or legal
principle, or misapprehend the law or the facts in a manner affecting the outcome of
the decision. Rule 9(b) does not require that the State specifically allege “special”
or “superior” knowledge by each individual Defendant in support of its failure to
warn claim. Knowledge and state of mind may be averred generally. For purposes
of a motion to dismiss, a plaintiff asserting failure to warn need not plead specific
sales or marketing efforts to consumers in Delaware. It is sufficient to survive a
motion to dismiss that the State alleged that each Defendant knew or had reasons to
know that their fossil fuel products were causing harm to their consumers and to the
12
Ferguson v. Vakili, 2005 WL 628026, at *1 (Del. Super.).
13
Wilmington Trust Co. v. Nix, 2002 WL 356371, at *1 (Del. Super.).
14
Oliver v. Boston University, 2006 WL 4782232, at *1 (Del. Ch.).
15
Manichean Capital, LLC v. Sourcehov Holdings, Inc., 2020 WL 11660067, at *3 (Del. Ch.).
7
State, and that Apache made statements in and outside Delaware regarding their
campaign of deception and thus failed to warn consumers.
THEREFORE, Defendants’ Motions for Reargument are hereby DENIED.
IT IS SO ORDERED.
/s/ Mary M. Johnston
The Honorable Mary M. Johnston
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