Category: Environmental and Green Issues

Insurer Alleges Pollution Policy Void Because of Policyholder’s Failure to Disclose

AIG Specialty Insurance Co. (“AIG”) recently asserted in a New Jersey Federal District Court Complaint that it owes no coverage to Thermo Fisher Scientific Inc. (“Thermo Fisher”) for cleanup costs associated with contaminated groundwater at a facility owned by Thermo Fisher in Fair Lawn, New Jersey. The crux of AIG’s claim is the fact that Thermo Fisher failed to disclose to AIG that the company had been monitoring groundwater pollution at its site for nearly three decades. AIG alleges the existence of two consent orders relating to groundwater contamination at the site and, more specifically, the presence of PFAS, so-called “forever chemicals” detected in a wellfield affected by the site. Both of these consent orders were in existence when Thermo Fisher sought a pollution liability policy with AIG. AIG asserts that Thermo Fisher either knew or should have known about the groundwater pollution conditions at its facility and the claims against the facility by the United States Environmental Protection Agency (“EPA”) prior to seeking the pollution liability policy at issue, facts that should have been disclosed in the application. AIG alleges that Thermo Fisher’s failure to disclose these consent orders and the fact that the Thermo Fisher plant was part of a Superfund site is sufficient to trigger a number of exclusions in the pollution...

New Jersey Governor Signs Environmental Justice Legislation

On September 18, 2020, New Jersey Governor Phil Murphy signed legislation intended to address the disproportionate environmental and public health impacts of pollution on overburdened communities. The legislation, versions of which have been proposed several times over the past decade, imposes additional requirements on companies seeking permits for new or expanded facilities under a variety of environmental statutes. It also requires the New Jersey Department of Environmental Protection (NJDEP) to evaluate how the proposed permitted activities would impact those communities determined to be “overburdened” under the new law. Earlier this summer, marking the “Juneteenth” anniversary of the emancipation of slaves in the United States, Governor Murphy had indicated his support for the legislation, which some environmental advocates have dubbed the “holy grail” of the environmental justice movement. Although critics of the law raised concerns about its effect on manufacturing and business investment in New Jersey, the bill passed the state legislature in late August, with votes of 49-28-1 in the state Assembly and 21-14 in the state Senate. The types of facilities covered by the new law include certain power plants, incinerators, sewage treatment plants, solid waste facilities, and landfills, as well as other facilities deemed to be “major sources of air pollution” (as determined by the federal Clean Air Act). Governor Murphy stated that,...

Susanne Peticolas Elected to Serve as President of the Justice Stewart G. Pollock Environmental American Inn of Court

Susanne Peticolas, a Director in the Environmental Department at Gibbons P.C., has been elected to serve as President of the Justice Stewart G. Pollock Environmental American Inn of Court (“Pollock Inn”) for the 2020-2022 term. The Pollock Inn is named for former Justice Stewart G. Pollock, who sat as an Associate Justice on the Supreme Court of New Jersey from 1979 to 1999 and was the author of numerous landmark environmental cases, including NJDEP v. Ventron. The Pollock Inn is one of only two American Inns of Court focused on environmental law. Previous Pollock Inn presidents include retired Judge Deanne Wilson of the New Jersey Superior Court, former NJDEP Commissioner Jerry English, and Stephanie Brand, Director of the New Jersey Division of Rate Counsel. On being introduced as the new Pollock Inn president, Ms. Peticolas commented, “I am honored to be selected by my Inn colleagues to lead this wonderful organization, and I am humbled to follow in the footsteps of such extraordinarily talented predecessor presidents. I am committed to carrying on their legacy of leadership and promotion of the goal of the Inn – to foster the highest levels of professionalism through example, education, and mentoring.” The American Inns of Court organization grew out of discussions in the 1970s among the American members of...

USDOJ Legal Memo Clarifies Department’s Policy on Using Federal Judgment Fund to Settle Superfund Cases

A U.S. Department of Justice legal memo, obtained under the Freedom of Information Act by Bloomberg Law, has clarified and restated the Department’s strict policy against using the federal Judgment Fund to settle Superfund cases in which the federal government is a Potentially Responsible Party (PRP). The memo states that the federal government can settle its liability by payments from the Fund only if the settlement is “final” – that is, there are no contingencies or future payments due. Many Superfund settlements do not meet that standard, since they typically include reopeners, “pay-as-you-go” arrangements, or provisions for additional funding if the remedy proves more expensive than originally estimated. As Gibbons Director David J. Freeman told Bloomberg Law, “It’s not a favorable development for the program, or for making progress on settlements in general, for the government to be taking such a hard line on this.” This policy will likely result in making it more difficult to achieve settlements at sites where the federal government is a PRP.

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...

(State) Settlors Beware, Too: In Reversal, Third Circuit Declares that State Settlement Does Not Protect Against Federal Claims under CERCLA

Previously, the District of New Jersey ruled that a polluting party’s settlement agreement with the New Jersey Department of Environmental Protection (NJDEP) provided contribution protection from the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) claims based on costs incurred by the United States Environmental Protection Agency (USEPA) at the same site, even though USEPA was not a party to the settlement. In a prior blog post discussing that decision, we noted that the District Court’s decision was likely to be appealed. It was. On appeal, the Third Circuit considered the inquiry of “[w]hether a polluting party’s settlement with the State of New Jersey protects it from lawsuits seeking contributions toward expenditures made by the Federal Government on the same site,” and determined in a precedential opinion that, “the answer here is no.” CERCLA section 113(f)(2) provides that “[a] person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.” The District Court applied the analysis commonly adopted by other federal courts to determine the “matters addressed” of the previous settlement where the scope is not made explicit by the agreement itself. This analysis includes factors such as the location, time frame,...

New Jersey Files Six Lawsuits as Part of Its Environmental Justice Initiative

Last week, New Jersey Attorney General Gurbir S. Grewal and Department of Environmental Protection (DEP) Commissioner Catherine R. McCabe announced jointly the state’s filing of six environmental enforcement actions against alleged polluters in minority and low-income communities in various locations throughout the state. The filings are this administration’s latest action in its environmental justice initiative, as Gibbons has previously covered on this blog. The six lawsuits involve sites in Newark, East Orange, Camden, and two sites in Trenton. In these suits, the state brings claims under various New Jersey environmental statutes, including the Spill Compensation and Control Act, the Water Pollution Control Act, the Air Pollution Control Act, the Solid Waste Management Act, the Industrial Site Recovery Act, and the Brownfield and Contaminated Site Remediation Act. Per the joint press release, the lawsuits in Newark and Trenton “involve companies that released hazardous substances at their properties and refused to clean them up.” In Newark, the state seeks to require the defendants to investigate the extent of the contamination, to clean up the site, and to reimburse the state for over $500,000. For one of the Trenton sites, the state similarly seeks to compel the defendants to clean up the site and to reimburse the state for over $400,000. At the other Trenton site, the state...

NJ Governor Supports Additional NJDEP Permitting Requirements to Address Environmental Justice Concerns

On June 19, 2020, Governor Murphy announced his support for proposed legislation that would require the New Jersey Department of Environmental Protection (NJDEP), and permit applicants, to take additional steps prior to permits being issued for new or expanded facilities under a wide variety of state environmental statutes. The proposed legislation, which aims to protect those communities that historically have been most impacted by pollution from industrial and related activities, would require the NJDEP to publish and maintain a list of those communities determined to be “overburdened.” In the proposed legislation, “overburdened community” is defined as: “any census block group, as determined in accordance with the most recent United States Census, in which at least one half of the households qualify as low income households, and either: (1) at least 40 percent of the residents of the census block group identify as Black, African American, Hispanic or Latino, or as members of a State-recognized tribal community; or (2) at least 40 percent of the households in the census block group have limited English proficiency.” Prior to approval of covered permit applications, an applicant would be required to assess and prepare an environmental impact statement to outline both the existing environmental and health stressors already borne by the relevant community, as well as any additional impacts...

New Jersey Publishes Formal Stringent Drinking Water Standards for PFOA and PFOS

On June 1, 2020, the New Jersey Department of Environmental Protection (DEP) officially published health-based drinking water standards for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS). These chemicals have received serious attention from the environmental community in the last several years due to increasing science that has confirmed the harmful impact of PFOA/PFOS on human health and the environment. These new more stringent rules, published in the New Jersey Register, set maximum contaminant levels (MCLs) at: 14 parts per trillion for PFOA and 13 parts per trillion for PFOS. The DEP also added PFOA and PFOS to the state’s list of hazardous substances. Site remediation activities and regulated discharges to groundwater of PFOA and PFOS will now have to comply with these new standards. These new formal standards establish a regulatory framework that will provide consistency in remediation activities statewide. It is important to note that PFOA and PFOS are just two of potentially thousands of per- and polyfluoroalkyl substances (or PFAS). To date Vermont and New Hampshire are the only other two states to set MCLs for PFAS. New York is working on similar standards. New Jersey issued a standard of 13 parts per trillion for perfluorononanoic acid (PFNA) in 2018. The federal government has not yet established MCLs for PFAS. While there...

Recent CERCLA Decision Allows Divisibility of Comingled Groundwater Plume

In Burlington Northern, when the United States Supreme Court decided that joint and several liability under section 107 of CERCLA could be ameliorated in cases where the harm was theoretically capable of apportionment, potentially responsible parties (PRPs) hailed the decision outlining the test for divisibility as a great breakthrough. In practice, however, the availability of the divisibility defense that PRPs hoped would flow from the Burlington Northern decision has been limited, particularly in complex, comingled groundwater plume cases. In March 2020, however, the District Court in Von Duprin LLC v. Moran Electric Service, Inc. et al. (United States District Court, Southern District of Indiana – Indianapolis Division. Case No. 1:16-cv-01942-TWP-DML) issued the first CERCLA decision finding that a comingled groundwater plume was capable of apportionment because there was a reasonable basis to divide the harm. The District Court relied on the findings of one of the technical experts, who analyzed substantial groundwater monitoring results from four different source areas and demonstrated that the magnitude of the concentrations and chemical characteristics of the Chlorinated Volatile Organic Compounds (CVOCs) were different in the four source areas. The Von Duprin case involved the release of hazardous substances at four properties located in Indianapolis, Indiana, including property previously owned by Von Duprin (the “Von Duprin Facility”) and three upgradient...