Sez Who? Appellate Division Questions Expert’s Qualifications to Testify in Spill Act Case

New Jersey’s Spill Compensation and Control Act (“Spill Act”) makes dischargers of hazardous substances, as well as persons “in any way responsible” for the discharged hazardous substances, liable in contribution to a person who remediates the discharge. Since the statute’s enactment in 1976, courts have often been called on to define limits on the category of parties who can be held responsible, especially the vague sub-category of persons “in any way responsible.” In its recent unpublished decision in Dorrell v. Woodruff Energy, Inc., the Appellate Division held that a supplier could not be held liable as a person “in any way responsible” simply for delivering fuel to the site in question. Reviewing the evidence presented in the trial court about another defendant’s potential liability, the court provided important guidance for both plaintiffs and defendants on the appropriate role of expert witnesses in Spill Act cases.

The plaintiff, Sandra Dorrell, owned a store in Alloway Township. When she sought to sell the property, she discovered petroleum contamination in the soil and groundwater. She filed suit in 2011 to seek contribution from the parties she considered responsible for the contamination: Woodruff Energy, Inc. (“Woodruff”), Gulf Oil Limited Partnership (“Gulf”), and Chevron U.S.A. Inc. (“Chevron”), Gulf’s successor. The case had been to the Appellate Division once already, resulting in a reversal of the trial court’s grant of summary judgment on statute of limitations grounds.

The evidence at trial established that Woodruff had regularly delivered fuel oil to a basement oil tank. Sometime in the 1990s, oil from the tank spilled onto the basement’s dirt floor and seeped into the ground. Woodruff did not, however, own the tank and was not responsible for its condition. Those facts, the trial court found, and the Appellate Division affirmed on Dorrell’s appeal, were not enough to establish Woodruff’s liability. “Dorrell effectively asks this court,” said the Appellate Division, “to find that mere delivery of oil, that is at some later point discharged from a tank, is sufficient to establish liability. We decline to do so where Woodruff did not own the tank, and where the record fails to establish a contractual responsibility to maintain or inspect the tank.” Moreover, Dorrell had not presented any evidence regarding the tank’s condition over time that might have put Woodruff on notice that something was amiss, such as a burst seam or records showing that Woodruff had delivered more oil on any given occasion than the tank could hold. “Failure to establish why the leak occurred,” the Appellate Division concluded, “doomed plaintiff’s claim” against Woodruff. Contrary to Dorrell’s contention, the trial court had not required her to show fault on the part of Woodruff; instead, it had properly applied the requirement imposed by the Supreme Court in NJDEP v. Dimant and Magic Petroleum Corp. v. Exxon Mobil Corp., that a Spill Act plaintiff show a reasonable nexus between the discharge, the discharger, and contamination at the affected site. In Dimant, the proofs did not establish a nexus between the discharge (a dripping pipe) and groundwater contamination in nearby wells; in Dorrell, the plaintiff failed to show any connection between Woodruff and any discharge from the tank.

The evidence regarding Chevron’s liability was much more complex. Dorrell alleged that Gulf (Chevron’s predecessor) had delivered gasoline to three underground storage tanks (UST), including a 1000-gallon tank that Gulf installed and then abandoned, and two older 550-gallon tanks that were later removed. Dorrell also alleged that Gulf had delivered kerosene to the basement tank. Gulf eventually ceased its deliveries after being replaced by Woodruff, and gasoline sales at the site ceased in the early 1960s. The trial court held that neither Chevron nor Woodruff was liable for any fuel oil or kerosene contamination, but held that Chevron was likely the owner and thus responsible for the 1000-gallon UST. The court ordered Chevron to investigate the tank; if the investigation confirmed that the tank contained gasoline, Chevron would have to remediate the gasoline contamination on the site, but if the tank did not contain gasoline, Chevron’s “responsibility would end.” Chevron cross-appealed.

After holding that leaving behind a tank containing a hazardous substance (such as the 1000-gallon UST, assuming it contained gasoline) can be enough to make a party a person “in any way responsible,” the court turned to the key issue in Chevron’s cross-appeal: not whether the UST contained gasoline, but rather whether there was competent evidence showing any contamination of Dorrell’s site with gasoline. It was undisputed, in light of testimony from experts for Dorrell, Woodruff, and Chevron, that the soil and groundwater were contaminated with kerosene and fuel oil, but the trial court relied entirely on Dorrell’s sole expert on gasoline contamination, a licensed site remediation professional (LSRP), to find that there was in fact gasoline contamination at Dorrell’s property.

The trial court qualified the LSRP as an expert in investigating subsurface conditions, but found that he was not qualified to identify specific contaminants by reviewing analytical results. The trial court considered, but never ruled on, his qualification to opine about the cause of any contamination in the site. Nevertheless, over defense counsel’s objections, the court allowed him to testify on what the Appellate Division termed “circumstantial evidence” that gasoline was present on Dorrell’s property, that it came from the 1000-gallon UST, and that the UST was installed by Gulf. Because the trial judge retired after his decisions on liability, a different judge heard Chevron’s motion for judgment notwithstanding the verdict or, alternatively, for a new trial. The motion judge denied Chevron’s motion, finding that the LSRP was qualified to testify as he had, and had not offered a net opinion about the UST (even though he had never examined it).

The Appellate Division held that the trial judge and the motion judge had both erred in admitting the expert’s testimony. In particular, they permitted him to testify that certain compounds detected in chemical analyses were “signatures” or “markers” of gasoline, even though he had admitted that he lacked the training or experience to distinguish between signs of gasoline and signs of other petroleum products when reviewing the kinds of data he used; just being an LSRP was not enough to make him an expert on these issues. And even if he had been qualified, he did not disclose the facts and methods he used to identify gasoline in the analytical results, raising issues as to whether he had offered an inadmissible “net opinion.”

Rather than simply vacating the judgment against Chevron, the Appellate Division remanded the matter to the trial court with instructions to conduct a hearing pursuant to N.J.R.E. 104 on the admissibility of the expert’s opinions, based on both his qualifications and the reliability of his methodology. In so deciding, the appellate court noted two missteps during the trial. First, the trial court never rendered a decision on the expert’s qualifications to testify on causation; Chevron initially objected, but never insisted that the trial court make a decision on the record on that issue. Second, Chevron did not object to his testimony on the ground that it was a net opinion during the trial, but instead raised the issue in its post-trial motion. Under the circumstances, the Appellate Division concluded, the better path forward is to take a step backward and give Dorrell a chance to demonstrate (and to give Chevron a chance to challenge) the admissibility of the expert’s testimony at a Rule 104 hearing. If the trial court determines his opinions were not admissible, the judgment against Chevron will be vacated. If the trial court finds his opinions were admissible, the original order will be enforced. Either way, we can expect another trip to the Appellate Division.

Dorrell sets forth a few clear legal conclusions and offers some warnings for parties and litigators in Spill Act cases. First, simply delivering a hazardous substance to a site, without more, is not enough to make you liable for remediating that hazardous substance if it later ends up leaking into the soil or groundwater. Second, leaving behind a container with hazardous substances could be enough to make you liable as a person “in any way responsible.”

Parties and litigators should also heed the Appellate Division’s warning about offering, and objecting to, expert testimony in Spill Act cases. Environmental cases can involve many kinds of evidence and require many kinds of expertise. There is no such thing as a “one size fits all” environmental expert. An LSRP can review and understand different types of results in making judgments about a remediation and its compliance with regulatory requirements, and rely on information supplied by others in doing so, but the level of expertise required to offer an expert opinion is much higher. Moreover, if an LSRP has been involved in overseeing the remediation work, the better course is to retain an independent expert. Careful preparation and examination of the expert should also not be overlooked. Explicitly establishing both the expert’s qualifications under N.J.R.E. 702 and the bases for the expert’s opinion under N.J.R.E. 703 (through references to generally accepted methods, scientific literature on which the expert has relied, etc.) must ground testimony about the expert’s conclusions and opinions, even if the court or opposing counsel does not insist on every step. Litigators seeking to challenge expert testimony should do so early and often, raising all available objections early in the proceedings, insisting on explicit rulings, and, if necessary, seeking a Rule 104 hearing to test the bases for the opinions proffered.

The ten-year saga of Dorrell v. Woodruff Energy, Inc. continues.