Author: Paul M. Hauge

NJDEP Solicits Input as It Begins Process of Drafting Regulations to Implement Landmark Environmental Justice Legislation

As we reported, New Jersey Governor Phil Murphy recently signed the nation’s first environmental justice law, which seeks to address the unfair distribution of the environmental and public health impacts of polluting activities by imposing additional requirements on parties seeking to site, expand, or renew permits for various types of facilities in “overburdened communities,” which are defined in the statute in terms of economic and demographic criteria. The statute requires the New Jersey Department of Environmental Protection (NJDEP) to promulgate regulations to implement its requirements. NJDEP began the public process of developing those regulations on October 22 when Olivia Glenn, Deputy Commissioner for Environmental Justice and Equity, and Sean Moriarty, Chief Advisor for Regulatory Affairs, hosted an online public information session in which they sought the public’s input on how the regulations should address numerous definitional and procedural issues. (The statute will not take effect until NJDEP promulgates its regulations.) Companies seeking to obtain or renew certain NJDEP permits for new or expanded facilities that fall within the statute’s scope and are located in overburdened communities must prepare an “environmental justice impact statement” and provide for expanded public hearings on their project. In addition to applying the requirements of other applicable statutes and regulations, NJDEP must then determine if the proposed new or expanded facility...

That Mine Is Yours, Not Theirs: Ninth Circuit Holds That WWII Shutdown Order Did Not Make Federal Government the CERCLA “Operator” of California Gold Mine

One perennially vexing issue for federal courts in cases brought under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law, is what makes someone an “operator” of a facility, and thus strictly (and, in most cases, jointly and severally) liable for cleanup costs. In particular, what degree and nature of control over a facility exercised by the government make it an operator? (We recently blogged on this issue.) In its recent decision in United States v. Sterling Centrecorp Inc., a divided panel of the Ninth Circuit held that a World War II-era federal order that shut down a gold mine in California did not give the government sufficient control over the operations of the mine to make it a CERCLA operator. Upon entering World War II, the United States faced a serious shortage of nonferrous metals, especially copper, and a corresponding shortage of the machinery and materials needed to produce them. Scarce resources needed to be redirected from nonessential operations to essential ones, and gold mines, such as the Lava Cap mine in Nevada County, California, were deemed nonessential. An order of the War Production Board required the mine to cease operations in 1943. While the order was revoked in 1945, operations at the mine never resumed. It was...

Pre-SRRA? SRRA!: NJDEP Clarifies Applicability of SRRA to Pre-SRRA Cleanup Orders and Agreements

In a listserv published on September 10, 2020, the New Jersey Department of Environmental Protection (NJDEP) has once again made clear that the innovative requirements of the 2009 Site Remediation Reform Act (SRRA), including the requirement to retain a licensed site remediation professional (LSRP), apply to any cleanup being performed under an administrative consent order (ACO) or remediation agreement (RA) that predates the enactment of SRRA on November 4, 2009. (SRRA was amended last year in what some commentators termed “SRRA 2.0.”) The NJDEP release, which supersedes a 2012 listserv on the same subject, confirms that (except for cleanups at certain federal facilities or sites being addressed under federal statutes) all parties conducting remediation work must retain an LSRP, even if they are subject to a pre-SRRA ACO or RA. NJDEP will hold in abeyance all ACO/RA requirements regarding departmental pre-approval of reports and work plans, as well as any deadlines contained in the order or agreement. Remediating parties must instead meet all regulatory and mandatory timeframes in NJDEP’s regulations. Other requirements in the ACO/RA will remain in effect, including those relating to a remediation funding source (RFS), RFS surcharges, and stipulated penalties. The new listserv also clarifies that SRRA overrides any termination provision in a pre-SRRA ACO or RA. NJDEP will not terminate an...

Who’s in Charge Here?: Third Circuit Holds That Government Was Not an “Operator” of Jersey City Chromium Facility for Purposes of Superfund Liability

Federal courts have long struggled to determine the shape and boundaries of the wide liability net cast by the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law. In its recent decision in PPG Industries Inc. v. United States, the Third Circuit applied circuit and Supreme Court precedent to hold that the government’s influence over a chromite ore processing plant in Jersey City during World War I and World War II was not pervasive or intrusive enough to make the government a past “operator” of the plant and thus liable for cleanup costs. Prior to PPG’s 1954 acquisition of the plant (which it continued to operate until 1963), Natural Products Refining Corporation (NPRC) operated the plant, which processed chromite ore into various chromium chemicals, including sodium bichromate. During both World War I and World War II (when it designated the plant’s output as critical war materials, i.e., products manufactured for direct military use), the government regulated the production of chromium chemicals. Through a variety of price, labor, and production controls, the government sought to encourage increased production of these key chemicals. Those efforts, however, did not extend to direct control over day-to-day operations or to the use of government employees to run the facility. Moreover, while the government was aware...

“Cooperative Federalism” or “Paternalistic Central Planning”?: U.S. Supreme Court Agrees That State Courts Can Hear Claims Over Adequacy of CERCLA Cleanups Under Certain Circumstances, But Limits Plaintiffs’ Options

The federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund law, prescribes a careful process for making decisions on how to remediate contaminated sites. To avoid delay, the statute also divests federal courts of jurisdiction to hear most challenges to the selected remedy. In its recent opinion in Atlantic Richfield Co. v. Christian, the U.S. Supreme Court agreed that CERCLA does not bar state courts from hearing claims grounded in state law that go beyond claims for money damages and seek a cleanup that goes beyond what EPA requires. The case arose in Montana, where the Anaconda Copper Smelter operated for over a century and contaminated an area of over 300 square miles with arsenic and lead. Atlantic Richfield Company acquired the financially troubled smelter in the 1970s but could not reverse its decline, and closed it by 1980. Three years later, EPA named it one of its first official Superfund sites, and since then Atlantic Richfield has spent over $450 million on a cleanup that is expected to continue until 2025. The Superfund site that Atlantic Richfield has been remediating includes numerous residential properties. The owners of 98 of those properties sued Atlantic Richfield in Montana state court in 2008, asserting state common law claims. In addition to traditional...

A Refinery Is Not a Gas Station: N.J. Court Says Former Oil Operation Was Abnormally Dangerous Activity

The 1976 Spill Compensation and Control Act (“Spill Act”) gave New Jersey a wide variety of new powers to address, and seek reimbursement for, environmental contamination. Despite its broad new remedies, however, it did not pre-empt or “subsume” common-law theories such as strict liability for abnormally dangerous activities. Moreover, the historical operations at an oil refinery and terminal that resulted in substantial discharges and pollution of nearby waterways could constitute an abnormally dangerous activity. So held the Appellate Division in its recent opinion in New Jersey Department of Environmental Protection v. Hess Corporation. Hess involves a property in the Port Reading section of Woodbridge historically operated as an oil refinery and terminal. In its 2018 complaint against Hess (which developed the property in 1958 when it was known as Amerada Hess Corporation) and Buckeye Partners, LP (which acquired the property from Hess in 2013), the New Jersey Department of Environmental Protection (NJDEP) alleged discharges of oil affecting the nearby Smith Creek and Arthur Kill during Hess’s period of ownership.  The NJDEP asserted claims under the Spill Act, the Water Pollution Control Act, strict liability, trespass, and public nuisance, seeking both injunctive relief and money damages in connection with the defendants’ failure to assess injuries to natural resources and to restore the injured resources. Hess and Buckeye...

More Than Parking Tickets: Appellate Division Rules that New Jersey Municipal Courts Can Assess Civil Penalties for Spill Act Violations

Municipal courts are typically called on to rule on such matters as parking violations and speeding tickets. Some statutes, however, give them jurisdiction over a surprising variety of actions. In its published opinion in State of New Jersey Department of Environmental Protection v. Alsol Corporation, the Appellate Division held that one powerful environmental law, the Spill Compensation and Control Act (Spill Act), grants municipal courts jurisdiction to assess civil penalties for violations of the statute, even where the department has not already gone through an administrative process to assess such penalties. DEP’s complaint against Alsol arose from an October 2016 oil spill at a property it owns in Milltown. According to factual assertions made by the New Jersey Department of Environmental Protection (NJDEP), the spill was the result of a contractor’s faulty demolition of three electrical transformers. Oil from the transformers, later determined to contain polychlorinated biphenyls (PCBs), spilled onto the surface and into a storm drain. The oil allegedly reached Farrington Lake and may have reached Mill Pond and Lawrence Brook, which a Department of Environmental Protection (DEP) Fish and Wildlife Officer closed to fishing. The complaint, filed in Milltown Municipal Court, did not allege a violation of the Spill Act’s fundamental prohibition on the discharge of hazardous substances. Instead, it alleged that Alsol...

Expect the Unexpected: New Jersey Appellate Division Rules That Language of Pre-SRRA Contract Requires Remediation Under New Rules

It is universally recognized that the 2009 Site Remediation Reform Act (SRRA) completely overhauled the process of site remediation in New Jersey. Less obvious, perhaps, was how the new statute could affect contractual cleanup obligations in agreements that predate SRRA’s enactment. In 89 Water Street Associates LLC v. Reilly, the Appellate Division held that the language of a purchase-and-sale agreement from 2004 required the seller to meet all of the requirements of the later-enacted statute, even if the cleanup takes much longer, and costs much more, than originally envisioned. The saga begins in 2004, when the plaintiff entered into a contract to purchase an industrial property in Bridgeton from the defendant’s predecessors in interest. The owner had already been through one remediation process, having obtained a “no further action” letter (NFA) from the New Jersey Department of Environmental Protection (NJDEP) under the Industrial Site Recovery Act (ISRA) (then known as the Environmental Cleanup Responsibility Act). The owner leased the site to a company (NRI) that he controlled in 1984. Fast forward twenty years, when the parties entered into a contract to transfer the property for $475,000. The agreement set a closing date, which could be extended by six months, but did not permit termination of the contract if the closing did not occur on time....

New Jersey Enacts Changes to Landmark 2009 Site Remediation Reform Act

In 2009, in the face of a significant backlog of sites that were stuck in the Department of Environmental Protection (DEP) pipeline, the New Jersey Legislature dramatically changed the process of site remediation in the Garden State with the enactment of the Site Remediation Reform Act (SRRA). The SRRA partially outsourced DEP’s review role by authorizing “private” oversight of cleanups by Licensed Site Remediation Professionals (LSRPs). On August 23, 2019, Governor Murphy signed new legislation that made further adjustments to the changes wrought by the SRRA. The legislation (L. 2019, c. 263), which sailed through both legislative chambers without a single opposing vote, makes a number of changes to the LSRP program, as well as other changes affecting parties responsible for conducting remediation projects. Amendments Affecting LSRPs Removal of unoccupied structures from list of areas that must be addressed as an “immediate environmental concern.” Expansion of LSRP duties to report immediate environmental concerns and previously unreported discharges. A slight relaxation of licensing requirements for individuals who may have temporarily left the work force for personal reasons. Clarification of prior acts and punishments that will disqualify a person from obtaining an LSRP license. Tightening of LSRPs’ oversight responsibilities to ensure that non-LSRPs do not effectively perform work reserved for LSRPs. Requiring an affidavit of merit from...

NJDEP Proposes to Reclassify 749 Miles of Waterways to Highly Protected Antidegradation Status in First Such Move Since 2008

For the first time since 2008, the New Jersey Department of Environmental Protection (NJDEP) has proposed to amend its surface water quality standards to prohibit degradation of water quality in additional rivers and streams that did not previously enjoy such protection. The current proposal, which was released on March 4, would lift hundreds of miles of waterways to a more protected status as Category One waters. NJDEP’s water quality standards, found at N.J.A.C. 7:9B, have several components. The standards designate uses for all waters of the State, and prescribe water quality criteria (e.g., minimum levels of dissolved oxygen, and maximum levels of suspended solids and various toxics) necessary to allow for those uses. In addition, the standards establish three tiers of “antidegradation” designations. The highest tier consists of “outstanding natural resource waters,” so designated because of their unique ecological significance or because they are within the Pinelands, must be maintained in their natural state. Category One waters, occupying the second tier, are protected from any measurable change in their existing water quality. Water quality in Category Two waters, the third tier, may be lowered, but only with social and/or economic justification for the change. NJDEP’s proposal, which was first presented at a stakeholders meeting on January 17, would move 749 miles of waterways from Category...