A panel of judges in New Hampshire has decided North Atlantic Refining must defend itself in that state's Supreme Court against allegations it sold gas that contaminated ground and surface waters.
The State of New Hampshire filed a lawsuit against refiners and manufacturers that allegedly supplied gas containing a compound commonly called MTBE.
That stands for methyl tertiary butyl ether, which is said to boost octane levels and produce a cleaner burning fuel.
It alleges the substance escaped into and contaminated groundwater when it was sold in the state between 1995 and 2006.
New Hampshire banned the additive in 2007.
North Atlantic, which operates the refinery in Come By Chance, was one of the refiners named in the case.
It was owned by the Vitol group of companies when the majority of the alleged offences occurred.
The case facts say the Come By Chance operation manufactured gas containing MTBE for sister Vitol companies between 1995 and 2006.
The states believes North Atlantic delivered the product to Vitol in New Hampshire and was involved in promoting it, even though the company knew its product would pollute ground and surface waters.
North Atlantic moved to dismiss New Hampshire's complaint in 2007, arguing the state had no jurisdiction over it.
A discovery was heard in 2008 and, in July 2009, the refinery's notion was dismissed after the trial court thought the state had justified the suit and its jurisdiction over North Atlantic.
The refinery appealed that decision and the three-judge panel turned it down May 7.
In their deliberations, the judges concluded the state's legal action relates to the shipments produced in Come By Chance and shipped to New Hampshire.
They said North Atlantic availed of the protection of the state's laws and, as the exporter of record for shipments of MTBE gasoline to Vitol, the company was an integral part of the distribution system.
The panel also deemed it was fair to require the refinery to defend the suit.
North Atlantic was sold to Harvest Energy Trust in October 2006.
Harvest was taken over by the Korean National Oil Corporation late last year.
A spokeswoman with North Atlantic said the company does not discuss ongoing litigation, but also noted "our former owner has indemnified us" against the New Hampshire claim.