Texas Civil Justice League

NEWS

02/26/2007
Chisum Files Low-Emission Fuels Bill

Rep. Warren Chisum (R-Pampa) filed HB 1927, which protects manufacturers and sellers of low emission fuels and fuel additives from lawsuits based on the federally-mandated standards to which such fuels and fuel additives are manufactured. The bill will not affect liability for releasing fuel and fuel additives into the environment.

In recent years fuel refiners and sellers have been targeted by lawsuits at the state and federal level based on the presence in gasoline of fuel additives designed to reduce vehicle emissions. These suits have alleged, among other things, that gasoline containing additives such as MTBE or ethanol is a “defective product,” even though it fully meets the requirements of the federal Clean Air Act and accompanying regulations. These suits have also attempted to apply other theories of liability, such as trespass and public nuisance, to fuel refiners and sellers, although their only conduct involved making or selling gasoline manufactured in compliance with specific government standards.

While these lawsuits have yet to succeed, they have cost the refining industry millions of dollars to defend and, consequently, increase the cost of gasoline for consumers. Should these lawsuits proliferate, they will also discourage manufacturers of fuel additives and renewable fuels, such as biodiesel, from pursuing new clean fuel technologies, to the detriment of consumers and the environment. The proposed legislation would end this type of costly and non-meritorious litigation by assuring that the mere use of a federally-mandated fuel additive in gasoline that complies with federal standards may not be the basis of a lawsuit.

HB 1927 amends Chapter 82, Civil Practice and Remedies Code, to state that a manufacturer or seller of a fuel additive or blending component is not liable in a products liability action for any injury to a claimant caused by some aspect of the formulation or production of the additive or blending component unless: (1) the additive or component failed to comply with standards, regulations, controls, or prohibitions promulgated by the federal government or an agency of the federal government at the time of manufacture or sale; and (2) the failure to comply was a producing cause of the claimant’s injury.

The bill further states that a manufacturer or seller of a fuel is not liable in a products liability action for any injury to a claimant caused by some aspect of the formulation or production of the fuel unless: (1) the fuel failed to comply with standards, regulations, controls, or prohibitions promulgated by the federal government or an agency of the federal government at the time of manufacture or sale; and (2) the failure to comply was a producing cause of the claimant’s injury.

The bill does not affect the liability of a person who spills or discharges a fuel additive, blending component, or fuel for: (1) environmental remediation costs; (2) damages arising from drinking water contamination; or (3) damages arising from negligence, public or private nuisance, trespass, breach of warranty, breach of contract, or any other theory of liability.

The change in the law made by the bill applies to an action: (1) commenced on or after the effective date; or (2) pending on the effective date and in which the summary adjudication or trial, or any new trial or retrial following motion, appeal, or otherwise, begins on or after the effective date.