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Albany, N.Y.�A federal judge has cleared the way for New York’s ban on MTBE�a controversial fuel additive that is believed to lead to groundwater contamination�to take effect as planned on Jan. 1. Judge Norman A. Mordue rejected a trade group’s claim that the law is “conflict pre-empted” by federal law. In Oxygenated Fuels Ass’n v. Pataki, No. 1:00-CV-1073, the plaintiff trade organization sought a declaration that the law is pre-empted by the federal Clean Air Act. Mordue of the Northern District of New York previously held that the MTBE law is neither expressly nor implicitly pre-empted by federal law. His most recent decision addressed only one issue, conflict pre-emption, and the court again came down firmly on the side of the state. Because New York has a smog problem, the Clean Air Act (CAA) requires distributors to provide oxygenated fuels: gasoline mixed with additives designed to limit the emission of pollutants. Ethanol is one such substance, but it is relatively expensive. MTBE, or methyl tertiary butyl ether, the only viable alternative, is much cheaper. But MTBE was banned by New York state after authorities discovered it tends to contaminate ground water. Issue of pre-emption? The Oxygenated Fuels Association attempted to defeat state legislation by arguing that the CAA pre-empted state laws on fuel and additives. When Mordue rejected that argument, the organization focused on its claim of “conflict preemption”�that the New York legislation would effectively impede the objectives of Congress in enacting the act. The CAA was drafted to reduce pollution generated by motor vehicles, but in a manner that would not harm the economy by causing a significant increase in gasoline prices. At trial, the plaintiff argued that MTBE burns cleaner than ethanol-blended gasoline, but the court rejected its expert testimony and found that, at most, ethanol emissions are perhaps slightly worse than those from MTBE. Mordue also said that the primary purpose of the CAA was clearly environmental, not economic, and rejected the plaintiff’s argument that the law would have such a large economic impact that it is conflict pre-empted. “[E]nsuring an adequate supply of gasoline at reasonable cost is not, viewed in isolation, a goal of CAA; rather CAA’s goal of enhancing air quality must be viewed in the larger context of market forces, health and environmental impacts, regional priorities, technological feasibility and other considerations,” the judge said. Mordue said that the plaintiff simply could not sustain its weighty burden of overcoming the presumption favoring constitutionality of the state law. “In enacting [the MTBE] law to protect its citizens from groundwater contamination, the State of New York exercised a power traditionally reserved to the states,” he said. Appearing for the plaintiff were Seth Goldberg, Anita G. Fox and Lincoln L. Davies of Washington’s Steptoe & Johnson and Davis S. Howe and Eric C. Nordby of Hancock & Estabrook in Syracuse, N.Y. Representing the state defendants were assistant attorneys general D. Scott Bassinson, David A. Munro and Philip Bein. Congressional attempts to immunize the oil industry from MTBE claims failed in the Senate [NLJ, Nov. 17 and 24].

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