Gibbons Law Alert
In what is a potential game changing decision, the Appellate Division of the Superior Court of New Jersey, in Morristown Associates v. Grant Oil Company, et al., Docket No. A-0313-11T3 (App. Div. Aug. 23, 2013) recently held that the six year statute of limitations applicable to property damage claims is applicable to private claims pursuant to the New Jersey Spill Compensation and Control Act.
On October 29, 2012, as Hurricane Sandy began its assault on the State, a New Jersey Appellate Court in New Jersey School Developments Authority v. Marcantuone created its own “storm” in Spill Act jurisprudence by holding that purchasers of contaminated property prior to September 14, 1993, can be liable under the Spill Act if they failed to conduct due diligence prior to purchase. In reaching this conclusion, the Appellate Division held that the long-standing 2001 decision in White Oak Funding, Inc. v. Winning had been superseded, in part, by the 2001 amendments to the Spill Act (“2001 Amendments”), which had been adopted a few weeks before the White Oak decision and became effective a week after the decision.
In NJDEP v. Dimant, et al., the Department filed suit under New Jersey’s Spill Compensation and Control Act (the “Spill Act”), alleging that the defendant, Sue’s Clothes Hanger, Inc. (“Sue’s”), a dry cleaning business, was responsible for damages related to groundwater contamination on various properties in Bound Brook. The sole evidence supporting DEP’s claim for damages against Sue’s rested on a pipe that was found dripping perchloroethylene (PCE) onto a driveway in the late 1980s. The trial court judge ruled that the DEP had not sufficiently proved a nexus between the PCE dripping from Sue’s pipe in the 1980s and the groundwater contamination at issue. The plaintiffs appealed.
An upstate Supreme Court Justice has denied summary judgment on liability under Section 181 of the state’s Navigation Law against a company whose predecessor owned and operated a petroleum refinery on the site for almost 60 years. The decision in One Flint Street LLC v. Exxon Mobil Corp, et al., Index No. 2011/4470 (July 18, 2012, Monroe Co. Sup. Ct.) establishes a high bar for obtaining summary judgment in Nav Law cases.
The New Jersey Department of Environmental Protection (“NJDEP”) will soon release scores for contaminated properties pursuant to the Remedial Priority Scoring (“RPS”) system. The RPS system was mandated by the Spill Compensation and Control Act (N.J.S.A. 58:10-23.16) as amended by the Site Remediation Reform Act (“SRRA”). Under the statute, the factors that NJDEP may consider in ranking the sites include: the level of risk to the public health, safety, or the environment; the length of time the site has been undergoing remediation; the economic impact of the contaminated site on the municipality and on surrounding property; and any other factors deemed relevant by the NJDEP.
In the next few weeks, responsible parties for some 12,000 known contaminated sites in New Jersey will be receiving a letter with a draft Remedial Priority Score (RPS) for their particular site compliments of the New Jersey Department of Environmental Protection (NJDEP). The NJDEP has not specified how the rankings will be used, although the RPS system has been described by the NJDEP as “a triage tool to sort sites for further consideration.”
On August 15, 2011, the New Jersey Department of Environmental Protection (NJDEP) issued proposed Final Rules to implement the Site Remediation Reform Act (SRRA) adopted in May 2009. These rules are intended to be the final implementation step in the phased transition of New Jersey’s site remediation process from NJDEP command and control to private oversight by Licensed Site Remediation Professionals (LSRPs). Instead of NJDEP overseeing every step of a cleanup, the LSRP, licensed by a 13-member Licensed Site Remediation Professional Board with investigative and disciplinary powers, is responsible for making day-to-day decisions about a clean-up. Certain categories of cleanups remain under NJDEP oversight, such as where the responsible party has a history of non-compliance or has failed to meet mandatory deadlines. The rule proposal appeared in the New Jersey Register on August 15, 2011 and can be viewed online. Comments can be submitted until October 14, 2011.
On the weekend of June 24-26, 2011, the New Jersey Institute of Continuing Legal Education (“NJICLE”) in cooperation with the New Jersey State Bar Association (“NJSBA”), and New Jersey Corporate Counsel Association, held its annual Environmental Law Section Forum Weekend (“the Forum”). Taking place in Avalon, New Jersey, the Forum featured three days of seminars covering various hot-button environmental topics including, Funding for Remediating Sites, Vapor Intrusion, the LSRP Program, Non-Governmental Organizations’ Perspectives on Issues and Resolutions, the well-known NJDEP v. Occidental case also referred to as the Lower Passaic River litigation, Climate Change, and rounded out the weekend with two programs on Ethical Issues including Alternative Fee Arrangements and Multi-Party Settlements.
Encouraging development of environmentally challenged real estate — brownfields — is usually the task of state agencies. In New Jersey the Office of Smart Growth; the Economic Development Authority and the Department of Environmental Protection all offer programs intended to encourage redevelopment of brownfields. However, states are struggling to fund and support their brownfield programs and funds for outreach to potential developers and their allied professionals are in short supply.
On May 18, 2011, the New Jersey Appellate Division upheld a trial court’s decision that the New Jersey Department of Environmental Protection had failed to establish sufficient “nexus” or connection between the operator of a dry cleaner and regional groundwater contamination. In New Jersey Department of Environmental Protection v. Dimant, et al., (Docket A-3180-09T2), the Appellate Division soundly rejected New Jersey’s claim that “the Spill Act must be interpreted and applied very broadly to find that any discharge at any time, even a de minimis one, imposes liability on all operators handling that product, and that a direct causal connection between the discharge and the damages need not be established.” This sort of argument which asks the court to overlook critical connections is all too common in environmental cases. Indeed, governmental plaintiffs often invoke policy reasons when asking for relaxed nexus requirements whereas private parties seeking contribution frequently call on the courts to shift the burden to the alleged dischargers.