Tagged: NL Industries

Since its original enactment in 1976, New Jersey’s Spill Compensation and Control Act (commonly known as the Spill Act) has been amended no fewer than ten times. The New Jersey Supreme Court had to grapple with that complicated history in its recent decision in NL Industries, Inc. v. State of New Jersey, No. A-44-15. Reversing the 2015 opinion of the Appellate Division, on which we have already written, the Court held that while the original statute made New Jersey subject to Spill Act liability by including the State in the definition of a “person,” subsequent amendments that (among other changes) expanded some portions of the statute to cover pre-enactment discharges did not “clearly and unambiguously” abrogate the State’s sovereign immunity for pre-enactment activities. As a result, the State can never face Spill Act liability associated with its discharges that occurred before the statute’s effective date of April 1, 1977. The case concerned the remediation of a contaminated site on the shoreline of Raritan Bay with an estimated cleanup cost of $79 million. Development plans for the area in the 1960s led to a proposal to construct a seawall. At least some of the material used in the seawall, which was completed in the early 1970s, allegedly consisted of furnace slag from a lead smelting facility operated...

The New Jersey Supreme Court has decided to hear the State’s appeal of a September 2015 Appellate Division decision that held the State potentially liable for cleanup costs at the Raritan Bay Slag Site. As we reported last fall, the Appellate Division held in NL Industries, Inc. v. State of New Jersey that the Spill Compensation and Control Act, which imposes liability upon both dischargers of hazardous substances and on parties “in any way responsible” for the hazardous substances, is applicable to the State. Under the Appellate Division’s ruling, the State could bear liability for all or some of the cleanup costs related to a seawall that was constructed using contaminated materials. The suit alleges that the State should be held liable because it owned the land under the seawall, approved its construction, issued a riparian grant to the developer that sought to build it, and issued a permit for it.

Be careful what you wish for. That may be the message of the Appellate Division’s September 23 opinion in NL Industries, Inc. v. State of New Jersey, No. A-0869-14T3. Affirming a “thoughtful and erudite” 2014 Law Division opinion by Judge Douglas K. Wolfson, the appellate court held that the onerous liability regime of the 1976 Spill Compensation and Control Act (commonly known as the Spill Act), which imposes strict, joint, and several liability for cleanups on both the dischargers of hazardous substances and on the much broader class of parties “in any way responsible” for the hazardous substances, is equally applicable to the State. As a result, the State may be responsible for a portion of the remediation of a contaminated site on the shoreline of Raritan Bay that will likely cost more than $75 million.