Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

A victory in the Supreme Court is generally welcome news for the U.S. Environmental Protection Agency (EPA). But, the Court’s decision last month in a Clean Water Act case may foreshadow a sweeping change in administrative law that would certainly not please EPA or other agencies: the end of a long-standing rule of judicial deference to agencies in the interpretation of their own regulations.

It is well established that when they interpret statutes, federal agencies are accorded substantial deference, such that a court must uphold an agency’s reading of an ambiguous statute as long as it is a plausible, reasonable reading. This is known as Chevron deference.

The Court has long applied the same rule when agencies interpret their own regulations. Beginning with Seminole Rock in 1945, the Court laid down the rule that an agency’s interpretation controls, even it is not the best or most natural reading, as long as it is not “plainly erroneous or inconsistent with the regulation.” This is often called Auer deference, after the 1997 case that reaffirmed the principle.

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In a unanimous decision that was at once sweeping and limited, the New Jersey Supreme Court held that the Department of Environmental Protection (DEP) need not obtain a warrant before entering a residential parcel to ensure compliance with the terms of a wetlands permit. The Court stopped short of a blanket validation of all warrantless searches under the wetlands statute, or of all warrantless searches of residential property subject to any sort of permit, instead grounding its holding in the protections afforded by the process that DEP must follow, and limiting it to searches of properties that are subject to a wetlands permit.

The case concerned the property of Robert and Michelle Huber. The parcel was subject to a permit issued to the developer of the property in 1992 under the Freshwater Wetlands Protection Act (FWPA). A deed restriction referring to the permit was recorded when the developer sold the property in 1994. The property was sold once again, in 1997, before the Hubers acquired it in 1999. Their title report also referred to the permit.

In 2002, after complaints from a neighbor about the placement of fill and the mowing of vegetation in restricted portions of the Hubers’ land, DEP sent an inspector to the property. The parties disputed whether he received permission to enter the property, but he did in fact enter and collected evidence of violations. Subsequent inspections, aerial photographs, and the Hubers’ own admissions eventually established clear evidence of permit violations. DEP assessed a civil penalty and ordered the Hubers to submit a restoration plan. An administrative law judge, the DEP Commissioner, and the Appellate Division all upheld the DEP order.

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The United States Environmental Protection Agency (“EPA”) recently released its long-awaited final vapor intrusion draft guidance (“Final VI Guidance”). The nearly 200-page document establishes a complex framework for assessing vapor intrusion from analyzing key factors; making risk management decisions; and implementing, monitoring and terminating mitigation strategies and is intended to be used at any site that is being evaluated under CERCLA, RCRA, EPA’s brownfield grantees, or state agencies with delegated authority. The Final VI Guidance supercedes all prior EPA guidance documents addressing vapor intrusion assessment and mitigation including the 2002 Draft Vapor Intrusion Guidance, but takes into account the public comments submitted from 2002 through 2012 and the recommendations of the Office of Inspector General (OIG).

In addition to the Final VI Guidance, which applies generally to petroleum hydrocarbons, EPA released its companion Guidance For Addressing Petroleum Vapor Intrusion At Leaking Underground Storage Tank Sites (“PVI Guidance”), which focuses specifically on petroleum hydrocarbons released from underground storage tanks. For these situations, the guidance recommends that owners and operators assess any immediate threat to safety, conduct a site characterization and develop a conceptual site model, delineate a lateral inclusion zone, identify preferential transport pathways within the inclusion zone, sample if light non-aqueous phase liquid (“LNAPL”) exists within 15-feet of an underlying building, and mitigate as appropriate.

“When final, these guidance documents will help ensure vapor intrusion exposure assessment and mitigation actions to protect human health are undertaken in a technically, scientifically and nationally consistent manner,” stated Richard Kapuscinski, a senior official in EPA’s Office of Superfund Remediation and Technology Innovation, in a memorandum announcing the Final VI Guidance release.

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A recent news release on the NJDEP website discusses new efforts by the Christie Administration to streamline vital rebuilding projects necessitated by the destruction caused by Superstorm Sandy. The new rules, which were adopted on an emergency basis on April 16th, are intended to eliminate some of the red tape typically associated with permit procedures, while ensuring the protection of coastal resources and encouraging the rebuilding of a more resilient New Jersey coastline. This is just the latest action taken by the Governor and NJDEP to ease the burden on residents, businesses and municipalities seeking to rebuild. Beginning as early as five days after the storm swept through New Jersey, actions were already being taken to waive permitting requirements for those rebuilding vital infrastructure such as roads and bridges. More recently, the Christie Administration adopted a streamlined process for property owners wanting to rebuild to new elevation standards in flood zones.

Bob Martin, Commissioner of the NJDEP, justified these emergency actions, stating that the “Christie Administration is committed to taking every step possible to help our communities become stronger than ever from this historic storm, including eliminating unnecessary red tape that would needlessly impede the important work ahead. These common sense changes will make it easier for our residents and businesses to continue on the road to recovery while ensuring continued protection of natural resources.” Many activities that require individual permits will now be allowed under general permits or permits by rule. An example of these changes is the use of permits by rule for the maintenance of beaches and dunes in advance of the 2013 hurricane season. A general permit will replace individual permits for projects that create living shorelines with vegetation, sand, organic materials and/or bivalves such as oysters and clams. Countless other measures are similarly aimed at reducing both the time and money that formerly would have been spent on more complex permit requirements.

While these rules are being implemented on an emergency basis for 60 days, there is a concurrent proposal for a permanent rule change, which will be open for public comment for a period of 30-days. Comments can be submitted online until June 5th. A public hearing on the final rule will be held on May 22nd at the Long Branch Municipal Building in Long Branch, New Jersey. Following the 30-day comment period, the NJDEP will respond to any public comments before adopting the permanent rule, which it hopes to do at the expiration of the emergency rule.

Adam C. Arnold is an Associate in the Gibbons Real Property & Environmental Department.

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In a recent interview by Law360, Irvin M. Freilich, a Director in the Gibbons Real Property & Environmental Department, discussed the most challenging case he has faced yet, as well as an aspect of environmental law he feels should be reformed. This interview also provides insight into an important lesson Mr. Freilich learned early on that he has carried with him throughout his legal career. To view the full interview, please click here.

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For the first time in more than two decades, the Federal Emergency Management Agency (“FEMA”) has updated its Advisory Base Flood Elevation (“ABFE”) maps for New Jersey’s coastal counties. The Christie Administration adopted these new standards as an emergency measure on January 24, 2013, and through formal NJDEP regulations, has now made them permanent. The revised FEMA elevations, which remain subject to change, are anywhere from two to four feet higher on average than the standards that had been in effect prior to Hurricane Sandy. New Jersey residents, particularly those impacted by flooding from Hurricane Sandy, should be aware of this change, as the NJDEP has incorporated these revised maps as the new standard throughout the state for the elevation of reconstructed homes in flood zones.

The Commissioner of the NJDEP, Bob Martin, defended the new standards as more protective of flood-prone properties, and as helping affected residents avoid a dramatic increase in flood insurance premiums once FEMA formally adopts new guidance for flood insurance. One obvious question is how some residents, still struggling to recover financially from the devastation caused by Sandy, are meant to afford such a significant undertaking as elevating their homes. According to a news release on NJDEP’s website, the Christie Administration is looking to help such residents offset this cost by providing funds from the federal Community Development Block Grant. Eligible homeowners could receive up to $150,000 for reconstruction and elevation of their flood-damaged homes, according to the article.

Depending on the amount of damage incurred at a given residence, the elevation revisions may not have immediate consequences. Homes that sustained less than 50% damage are not required to do anything, but are cautioned that they will likely be subject to much higher flood insurance costs if they choose not to elevate in accordance with new standards. If, on the other hand, a residence sustained more than 50% damage, the owner must elevate to the new standard plus one foot, as required by the Flood Hazard Area Control Act. Under the amended rules, property owners rebuilding to the new standards will not need to apply for a special NJDEP Flood Hazard Area permit, which should result in savings on permit fees and design costs, as well as saving the time that it would normally take for NJDEP review.

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The U.S. Supreme Court’s decision on superfund “arranger liability” in Burlington Northern & Santa Fe Railway Company v. United States continues to reverberate. In an article published in BNA’s Environmental Due Diligence Guide, David Freeman and Harry Clayton examine two recent decisions on arranger liability in Carolina Power & Light Co. v. Alcan Aluminum Corp. The full article is available here.

Pictured above: David J. Freeman (left) is a Director in the Gibbons Real Property & Environmental Department. Harry H. Clayton, IV (right) is an Associate in the Gibbons Real Property & Environmental Department.

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In a decision that gives the green light to an important component of the Christie Administration’s “Common Sense Principles” approach to regulation, the Appellate Division has upheld the New Jersey Department of Environmental Protection’s (NJDEP) “waiver rule,” which permits the department to waive strict compliance with many of its regulations in defined circumstances. Full implementation of the rule will have to wait, however, as the Appellate Court invalidated a variety of forms and guidance documents that NJDEP had posted on its website without going through the normal rulemaking process required by the Administrative Procedure Act (APA).

As we reported last year, NJDEP formally promulgated the waiver rule in April 2012, after a contentious, year-long rulemaking process that saw over 500 members of the public submit many hundreds of comments. The proposal grew out of an executive order from Governor Christie that directed all agencies to establish “Common Sense Principles” for regulations and to apply those principles in a variety of ways, including the adoption of rules that provided for waivers of conflicting or unduly burdensome rules.

The rule, which is set forth on NJDEP’s website, allows NJDEP to waive strict compliance with its rules in limited circumstances, in a manner that is consistent with the agency’s environmental mission. But there are significant limitations on that authority. A waiver may be granted only when at least one of the following criteria are satisfied: (1) the applicant is subject to conflicting rules, (2) strict compliance would be unduly burdensome, (3) the waiver would result in a net environmental benefit, or (4) the waiver is justified by a public emergency. The waiver rule does not apply to a number of categories of requirements, including requirements imposed by statute or by federal regulations; numeric or narrative standards that protect human health; and requirements concerning remediation funding sources and other financial matters.

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Jennifer M. Porter, Esq., a Director in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program SEQRA, on Friday, March 8, 2013, in Latham, New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA), including specific discussion on regulatory requirements and compliance, the integration of SEQRA with the project review process, cumulative impacts and segmentation, the new environmental assessment forms, the proposed amendments to SEQRA, as well as offer practical advice on how to use SEQRA to obtain a better project without bankrupting the applicant. Ms. Porter will be part of the afternoon panel and will be discussing SEQRA litigation issues including the statute of limitations, standing to sue, defending or attacking negative declarations and procedural and substantive judicial review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

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David J. Freeman, a Director in the Gibbons Real Property & Environmental Department, will speak at the upcoming Strafford webinar, "New Developments in Brownfield Redevelopment," on Tuesday, March 19, 2013.

Recently, brownfield development has grown more complex, creating new challenges on top of the pre-existing federal, state and local legal and regulatory requirements and permitting approvals. Mr. Freeman and his fellow panelists will discuss "hot topics" in brownfield redevelopment, including:

• Bona Fide Purchaser Requirements After the Ashley II Decision
• Vapor Intrusion
• Brightfields
• Changes in Land Use
• Financing
• Environmental Justice

There will also be a question-and-answer session on these and other brownfield-related topics following the speakers' presentations.

For additional information or to register at a 50% discount, please click here.

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The U.S. Supreme Court's decision on "arranger liability" under Superfund in Burlington Northern & Santa Fe Ry. Co. v United States continues to reverberate. The most recent manifestation is a January 31, 2013, decision by the U.S. District Court for the Eastern District of North Carolina in Carolina Power & Light Co. v. Alcan Aluminum Corp. In that decision, the Court granted summary judgment to Georgia Power Co. on the basis that its sale of used transformers to the operator of the Ward Transformer Superfund Site (Site) did not amount to an "arrangement for disposal." In examining the "fact-specific circumstances," the Court determined that the evidence established that these transactions were sales of a "useful product" rather than ones with an intent to dispose of a hazardous substance.

The Site is an extensively contaminated facility in Wade County, North Carolina that for many years was the location of a transformer repair and recycling facility. Extensive cleanup has already taken place, and additional remediation is underway and planned. Total costs of the cleanup are expected to exceed $100 million.

Two potentially responsible parties, Carolina Power & Light and Consolidation Coal, entered into an administrative settlement with EPA to perform, inter alia, an initial removal action. They then sued more than 100 companies for cost recovery and contribution under Sections 107 and 113(f) of Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The Section 107 claims were dismissed at an earlier stage of the litigation on the basis that Section 113 provides the exclusive avenue for cost recoupment by parties that have settled with the government.

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The New Jersey Department of Environmental Protection (“NJDEP”) recently issued its answers to frequently asked questions (FAQs) regarding the emergency amendments to New Jersey’s Flood Hazard Area Control Act Rules. The emergency regulations were signed into law by New Jersey Governor Christie on January 24, 2013, in the wake of Hurricane Sandy. The new regulations adopt the Federal Emergency Management Agency’s (“FEMA”) updated Advisory Base Flood Elevation (“ABFEs”) maps as the rebuilding standard for the entire state. The rules set minimum elevation standards for the reconstruction of houses and buildings in areas that are in danger of flooding. Because the rules are complex and so many officials and the public are affected, NJDEP issued the FAQs explaining the benefits of the amendments, who is covered, and tips for getting started.

Highlights of the rule amendments include the following:

1) Adopts height and construction requirements in FEMA’s Advisory Base Flood Elevation maps as a state standard for reconstruction.

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As discussed in a recent blog post, two months ago, a New Jersey Appellate Division panel announced that commercial tenants were not liable for a dangerous condition outside of their leasehold. Now, in a surprising ruling, a separate Appellate Division panel has reached the opposite conclusion. While it is likely that the Supreme Court of New Jersey will be asked to resolve the divergent rulings, in the meantime, commercial tenants should be aware of their shifting duties to guests and customers.

In November 2012, the Appellate Division addressed an appeal from the Trial Court’s grant of summary judgment to a commercial tenant in a slip-and-fall case, where the injury occurred in the parking lot of a strip mall. In Kandrac v. Marazzo’s Market at Robbinsville the plaintiff filed suit against the owner/landlord of a strip mall as well as a commercial tenant in the strip mall (the grocery store at which she had been shopping) prior to her injury in the parking lot. The plaintiff alleged that both the owner of the strip mall and the commercial tenant were negligent in their maintenance of the parking lot. The Trial Court granted summary judgment in favor of the commercial tenant and the Appellate Division affirmed, concluding that the grocery store “owed no duty of care to its invitee for an injury that occurred in the common area of the shopping center.”

In Kandrac, the Appellate Division relied in large part on the lease agreement between the grocery store and the property owner, which clearly stated that the tenant was not responsible for the maintenance of “common areas,” including sidewalks and parking areas. The Appellate Division acknowledged that while the covenant in the lease pertaining to the landlord’s obligation to maintain common areas in good operating condition did not relieve the tenant of all duties to its customers regarding ingress and egress, the assignment of responsibility in the lease impacted the tenant’s ability to address conditions in the parking lot. The Court concluded that the lease “squarely assign[ed]” the duty of maintenance to the landlord, and thus an innocent victim had adequate recourse against the landlord.

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The New Jersey Department of Environmental Protection (“NJDEP”) recently issued new vapor intrusion screening levels (“VISL”) and related guidelines, which will have an immediate impact on existing remediation sites. The screening levels were updated to reflect the changes in toxicity values and risk-based equations set forth in the United States Environmental Protection Agency’s (“USEPA”) most recent Regional Screening Level (“RSL”) Tables. NJDEP implemented the new VISL as of January 16, 2013. Parties conducting remediations and their Licensed Site Remediation Professionals will need to analyze how these new screening levels impact their sites.

The procedures and associated timeframes in which to conduct a site evaluation based on the new VISL varies as follows:

• Unrestricted use final remediation documents for ground water issued prior to January 16, 2013 require no further investigation for the vapor intrusion (“VI”) pathway.
• Restricted use final remediation documents for ground water issued prior to January 16, 2013 require an evaluation of the VI pathway as part of the biennial certification; an assessment of the order of magnitude changes using the new VISL; and, based on this information, implementation of additional remediation as required.
• Remedial Action Workplans for ground water issued prior to January 16, 2013 require a review of existing data for order of magnitude changes using the new VISL and, based on this information, implementation of additional remediation as required.
• If none of the aforementioned scenarios exist, there is a 90 day period to evaluate all existing site conditions and data using the new VISL. The 90-day review period terminates April 16, 2013.

A VISL implementation flowchart is available here.

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In the controversial area of Superfund regulation, the United States Environmental Protection Agency (“EPA”) appears to be making steps toward more successful and more efficient negotiation of remedial design (“RD”)/remedial action (“RA”) settlements in Superfund cases. EPA recently released its Revised Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations (“the Negotiation Policy”) and Transmittal of Updated Superfund Response and Settlement Approach for Sites Using the Superfund Alternative Approach (“Alternative Approach”).

The Negotiation Policy supercedes portions of the July 17, 1999, Negotiation and Enforcement Strategies to Achieve Timely Settlement and Implementation of Remedial Design/Remedial Action at Superfund Sites that relate to requests for approval to continue RD/RA negotiations beyond the 120-day negotiation moratorium under Section 122 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and supercedes the September 30, 2009 Interim Policy on Managing the Duration of RD/RA Negotiations in its entirety. It also addresses issues raised in the May 2012 Results of the Evaluation of the 2009 Interim Policy on Managing the Duration of Remediation Design/Remedial Action Negotiations (“May 2009 Results”).

The Negotiation Policy includes a lengthy negotiation template that emphasizes “dialogue” over the paperwork-intensive approvals that are required when Potentially Responsible Parties (PRPs) seek extensions of the 120-day negotiation moratorium. To achieve its goal, the Negotiation Policy sets forth a schedule of status conferences with various agency representatives including the Office of Regional Counsel, Program Offices, the Office of Site Remediation Enforcement, and the Department of Justice. The Negotiation Policy also stresses “more aggressively utilizing [EPA] enforcement tools,” including bifurcation of the RD/RA to help start work sooner, fund lead or enforcement-leverage options including mixed funding and mixed work, and use of unilateral administrative orders (UAOs) for all or a portion of the work.

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The answer you get depends on the question you ask. That’s the take-home lesson from the Supreme Court’s decision in Los Angeles Flood Control District v. Natural Resources Defense Council. All parties agreed on the answer to the specific question on which the Court granted certiorari. The Court, applying its own 2004 precedent, said they were correct -- there was no “discharge” that violated the District’s permit because the flows in question simply went from one part of the same river system to another. The Court never reached the alternative ground for liability urged by the plaintiffs because it went beyond that narrow question. The result? A reversal and a win for the District on essentially procedural grounds.

The Clean Water Act requires a permit for discharges from some municipal stormwater systems. The District has had such a permit for discharges from its stormwater sewers into the Los Angeles and San Gabriel Rivers since 1990. Under the statute’s citizen suit provision, NRDC and the Santa Monica Baykeeper sued the District, alleging, among other things, that water-quality measurements from stations within the rivers demonstrated violations of the District’s permit. The District Court granted summary judgment to the District, pointing to “thousands of permitted dischargers” to the rivers and holding that the record was insufficient to show that the District had violated its permit. The Ninth Circuit reversed in relevant part, holding that the District was liable for discharges from certain concrete-lined portions of the river over which it exercised control into downstream portions of the rivers that had no concrete linings.

The Supreme Court granted the plaintiff’s petition for certiorari, but on the narrow question of whether a Clean Water Act “discharge of pollutants” occurs when polluted water flows from one portion of a river, through a concrete channel or other engineered improvement in the river, into a lower portion of the same river. The grant of certiorari was curious since all of the parties, as well as the United States as amicus curiae, agreed that the answer to the question was “no.” Indeed, the Court had already held in 2004, in South Florida Water Management District v. Miccosukee Tribe, that the transfer of polluted water between two parts of the same water body did not constitute a discharge of pollutants under the statute, which defines the term as “any addition of any pollutant to navigable waters from any point source.” In Miccosukee, the Court had held that no discharge occurred when water was removed from a water body, transported through a pump station, and returned to the same water body. The case at hand was even easier, for the polluted water in question never even left the rivers; it simply flowed from a concrete-lined portion of a waterway to an unimproved portion of the same waterway. Therefore, in an 8-0 decision by Justice Ginsburg (Justice Alito concurred in the result), the Court reversed and remanded the case to the Ninth Circuit.

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An article published last year entitled, "NJ Charges Forward with Electric Vehicle Network," discussed the concerted efforts of New Jersey and several other states to develop a Northeast Electric Vehicle Network and promote alternative transportation fuels. The goal of this project is to encourage economic growth, maintain the region’s leadership in the area of clean energy, and reduce the region’s dependence on oil. Toward that end, two bills were recently introduced in the New Jersey State Legislature that would provide further incentive for New Jersey drivers to make the transition to alternative energy vehicles.

The first bill, A4000, proposes to authorize the use of constitutionally dedicated moneys to fund the conversion of certain diesel vehicles to compressed natural gas or electric vehicles. More specifically, the bill would permit the Department of Environmental Protection to provide a grant, upon proper application, to any owner of a regulated commercial bus, regulated solid waste vehicle, or diesel-powered school bus who chooses to convert their bus or vehicle to one that is powered by compressed natural gas or electricity. This is seen as a crucial step in New Jersey’s continued efforts to go green. “Transitioning individual and fleet vehicles off of petroleum and on to alternative domestic fuels is a critical step for all of us,” said Chuck Feinberg, Chairman of the New Jersey Clean Cities Coalition. “We need to do it not just for environmental reasons, but also for our economic security and energy independence.”

The second bill, A3500, proposes certain exemptions from the NJ sales and use tax for hybrid electric vehicles, compressed natural gas vehicles, and equipment used for refueling or recharging certain vehicles. Currently, only zero emission vehicles (ZEVs) are exempt from the sales and use tax under New Jersey law. Under this newly proposed bill, receipts from the sales of hybrid electric vehicles and the sales of vehicles fueled exclusively by compressed natural gas would be exempt from fifty percent (50%) of the tax imposed under the Sales and Use Tax Act. Furthermore, receipts from sales of equipment used for refueling or recharging such vehicles would be fully exempt from the tax imposed under the Sales and Use Tax Act. This last provision is an important step toward encouraging the infrastructure that is necessary to make widespread use of such vehicles practical and convenient for New Jersey drivers.

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On November 28, 2012, New York State confirmed that its health assessment of the proposed regulations governing hydraulic fracturing, also known as “fracking,” being conducted by a panel of three leading public health experts, would be delayed. Immediately thereafter, the State’s Department of Environmental Conservation (“NYSDEC”) filed for a 90-day extension of the November 29, 2012, regulatory deadline for finalizing fracking regulations.

The new set of regulations proposed by NYSDEC can be found at the agency’s website. A public comment period on these proposed regulations opened on December 12, 2012, and will run through January 11, 2013. There will be no public hearings during this review cycle. However, the NYSDEC now has 90 days to complete the regulation or face beginning the entire process anew with a new public comment period.

THE MARCELLUS SHALE FORMATION AND FRACKING IN NEW YORK STATE

The Marcellus shale formation, which is a rich source of oil and natural gas, runs along the southern portion and Finger Lakes region of New York State, providing great potential for the drilling of natural gas.

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When government actions cause flooding of your land, does it constitute a “taking” that triggers the Fifth Amendment’s requirement of “just compensation?” Supreme Court precedent dating back to 1872 teaches that when the flooding is permanent, such as when a new dam creates a lake, a compensable taking has occurred. But what if the flooding is only temporary? Can that constitute a taking? The Federal Circuit said, “Never.” In Arkansas Game and Fish Commission v. United States, the Supreme Court disagreed, and said, “Sometimes.”

The case has its roots in 1993, when the U.S. Army Corps of Engineers changed the way it operated a dam located upstream from a wildlife management area owned by the Arkansas Game and Fish Commission. Departing from a practice that went back to the dam’s construction in 1948 and which was reflected in its Water Control Manual (Manual), the Corps -- at the request of downstream farmers who desired a longer harvest time -- slowed the rate at which it released water from the dam during the fall. As a result, instead of short-term flooding that receded quickly, the wildlife management area experienced extensive flooding that would last well into the following spring and summer. Each year from 1994 through 2000, the Corps decided to continue this new practice. The downstream farmers were happy, but the Commission, which repeatedly objected to the Corps’ new mode of operating the dam, was not. The Corps ultimately ceased the practice in 2001.

The Commission sued the United States in the Court of Federal Claims in 2005, alleging that the Corps’ temporary deviations from its Manual constituted a compensable taking. The Commission pointed to the cumulative impact of the extensive flooding of the wildlife management area, including destruction of timber and terrain changes that required expensive reclamation measures. The Court of Federal Claims eventually awarded the Commission $5.7 million. On the Corps’ appeal, however, the Federal Circuit reversed, reading several Supreme Court cases as holding that government-induced flooding can give rise to a takings claim only if the flooding is “permanent or inevitably recurring.”

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David J. Freeman, a Director in the Real Property & Environmental Department of Gibbons P.C., has been unanimously reelected to a second term as president of the New York City Brownfield Partnership, a public/private nonprofit organization dedicated to promoting the cleanup and redevelopment of brownfields in New York City.

The Partnership is a member organization of more than 40 real estate developers and owners, community organizations, governmental agencies, and environmental professionals who are active on brownfield matters. Working with the New York City Office of Environmental Remediation (OER), the Partnership serves as an information resource on a range of brownfield development issues; encourages collaboration among stakeholders in the brownfields process; helps communities understand their brownfield issues; highlights successful projects through an annual awards program; supports the education and training of brownfield professionals; and provides information and insight to help the city’s development community better navigate the process of redeveloping vacant and underutilized land with environmental issues.

“David joined Gibbons earlier this year as part of a strategic expansion of our environmental practice throughout the region,” says Patrick C. Dunican Jr., Chairman and Managing Director of the firm. “His work with the Brownfields Partnership raises the profile of our practice in New York City and strengthens our ties with critical contacts and organizations in the field.”

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Commercial tenants in multi-tenant shopping centers can now breathe a sigh of relief as the New Jersey Appellate Division in Kandrac v. Marrazzo's Market of Robbinsville, safeguards the boundaries of commercial tenant liability for business invitees, reiterating that a commercial tenant does not owe a duty to its patrons to maintain a common area, such as a parking lot, that the landlord is contractually obligated to maintain.

The decision adds to the previously designated responsibilities of commercial entities, see, e.g., Luchejko v. City of Hoboken (commercial entities have considerable rights to maintain adjacent sidewalks); Stewart v. 104 Wallace St., Inc. (commercial landowners have a duty to maintain sidewalks abutting property in reasonable good condition); Antenucci v. Mr. Nick’s Mens Sportswear (extending duty of commercial tenants to maintain sidewalk abutting store in exclusive possession of tenant); Warrington v. Bird (proprietor has duty to exercise reasonable care to not subject patrons to unreasonable risk of harm in traversing expected route), while confirming a special carve-out for commercial tenants in a multi-tenant shopping center who have contracted out of certain maintenance duties in common areas.

The injured plaintiff in Kandrac v. Marrazzo’s Market at Robbinsville, was walking through a parking lot of a multi-tenant shopping center after leaving Marrazzo’s Market when her “foot caught a hump” in the pavement, causing her to trip, fall forward on her face, and sustain injuries. She thereafter filed a complaint against Marrazzo’s Market (the “tenant or Marrazzo’s”) and Foxmoor Associates, LLC (the “landlord”) alleging negligence. The tenant filed a motion for summary judgment based on a provision of its lease agreement, which stated, in relevant part, that “the LESSOR [(Foxmoor)] covenants and agrees that it shall maintain the common areas of the shopping center in good operating condition.” Finding the landlord responsible for maintenance of the common area where plaintiff was injured, the Trial Court granted the tenant’s motion.

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On October 23, 2012, the New York Court of Appeals handed down its decision in Bronx Committee for Toxic Free Schools v. New York City School Construction Authority. In it, the Court held that the public notice procedures that the School Construction Authority followed under the New York State Brownfield Cleanup Act (BCA) did not satisfy the related, but distinct public notice and comment obligations under the State Environmental Quality Review Act (SEQRA).

The issue arose in Bronx Committee because at the time of SEQRA review, remediation had not yet taken place. Accordingly the Authority did not include in its Environmental Impact Statement (EIS) a plan for long-term maintenance and monitoring, believing that any discussion of such procedures would be premature prior to completion of cleanup. When remediation was finished, the Authority took the position that a Supplemental Environmental Impact Statement (SEIS) was unnecessary in light of the extensive public notice requirements that it had followed pursuant to the BCA.

The Court disagreed with the Authority. Because “the long term maintenance and monitoring of … engineering controls were too important not to be described in an EIS,” the Court held that the plain language of SEQRA required their inclusion, either in the EIS or by the filing of an SEIS.

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On November 3, 2012, less than five days after Hurricane Sandy washed away much of the Jersey Shore and its infrastructure, NJDEP Commissioner Bob Martin signed Administrative Order No. 2012-13 (the “Order”), temporarily waiving permitting requirements for State, County and Municipal agencies seeking to rebuild after the storm. The swift action of NJDEP unleashed a storm of its own from critical environmentalists worried that the rush to rebuild the devastated areas would recreate the same vulnerabilities.

The Order provides certain temporary permitting waivers to State, County and Municipal agencies for purposes of repairing and/or replacing public infrastructure damaged as a result of Hurricane Sandy. Permitting programs and rules affected by the Order include the Coastal Permit Program, the Flood Hazard Area Control Act, and the Freshwater Wetlands Protection Act Rules.

Waivers provided by the Order are limited to activities consisting of (1) in-kind replacement of existing public infrastructure, and (2) repair of scouring caused by Hurricane Sandy that is directly adjacent to an existing bridge, culvert, or public roadway. In order to qualify, the activities cannot (a) result in an exceedance of the pre-existing footprint of the public infrastructure, (b) adversely impact previous flow conditions or environmental resources, or (c) obstruct flow in the respective channel or floodway.

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On October 29, 2012, as Hurricane Sandy began its assault on the State, a New Jersey Appellate Court in New Jersey Schools Development 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.

The Appellate Division noted that White Oak addressed two key issues. White Oak held that a property owner who did not own the property at the time of a discharge of hazardous substance at the property, could not be held liable for the “passive migration of pre-existing contamination.” As well, the White Oak Court held that the post-contamination owner’s failure to perform environmental due diligence, though it was aware of the property’s prior use as a fuel oil distribution business, did not make the defendants “in any way responsible” under the Spill Act for the contamination. According to the Marcantuone Court, the viability of this determination was superseded by the 2001 Amendments which extended the “innocent purchaser” defense to pre-1993 acquisitions.

The 2001 Amendments provided that a property owner who had purchased their property post contamination but, prior to September 14, 1993 (the effective date of the New Jersey Industrial Site Recovery Act), must prove by a preponderance of the evidence that an inquiry of the prior ownership and use of the property had been undertaken. This extension of the “innocent purchaser” defense made it clear that there was potential Spill Act liability for the pre-1993 purchaser that did not qualify for the defense. The adequacy of the inquiry -- due diligence -- would be determined by “the good and customary standards” at the time of the purchase.

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As companies in the northeast region take advantage of an improving real estate market, in the face of aggressive agency enforcement, and complex environmental programs and policies, the need for environmental counsel to assist with transactions, navigate potential pitfalls and mitigate future liability, has become essential. In a recent article published by The Metropolitan Corporate Counsel, three new Gibbons Directors - William Hatfield, Camille Otero, and David Freeman - discuss: 

• the firm's strategic decision to expand the practice group;
• the growth of the environmental law market;
• and how their experience can assist clients in this expanding field.

Click here to read the full article.

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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.

The Appellate Division affirmed and the New Jersey Supreme Court (which released its decision on September 26th), affirmed and modified the Appellate Division’s ruling, and determined that “a party in Sue’s circumstances must be shown to have committed a discharge that was connected to the specifically charged environmental damage … in some real, not hypothetical way.” The DEP argued that because PCE had been found dripping onto the ground from a pipe, Sue’s should have been held strictly liable under the Spill Act for all costs and damages associated with all PCE contamination in the area. In support of this argument, DEP relied on the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which plaintiffs claimed requires no proof of causation between a defendant’s release of a hazardous substance and a plaintiff’s incurrence of response costs. Specifically, the DEP argued that a “proven discharge at the site of contamination is sufficient to meet the nexus test.” The Court rejected this argument, noting that the distinct language in the Spill Act made it inappropriate to adopt the more lenient causation standard applied in CERCLA claims. However, the Court rejected a more stringent “proximate cause” standard and fashioned a middle ground to establish proof of nexus under the Spill Act. In sum, the Court held that “on proof of the existence of a discharge, one can obtain prompt injunctive relief under the Spill Act. However, in an action to obtain damages, authorized costs and other similar relief under the Act there must be shown a reasonable link between the discharge, the putative discharger, and the contamination at the specifically damaged site.”

The ultimate impact of this decision for future Spill Act cases remains to be seen. Until now, New Jersey courts have largely looked to CERCLA for guidance on proof of nexus in Spill Act cases. The State’s highest court has now clarified the standard for nexus in a Spill Act suit and has created two different standards: one for injunctive relief and one to recover damages. To recover damages, a plaintiff cannot simply present a hypothetical nexus and ask the trier of fact to connect the dots, nor can they obtain damages from a defendant without connecting that defendant’s specific discharge to the contamination at a specific site.

Adam C. Arnold is an Associate in the Gibbons Real Property & Environmental Department. William S. Hatfield, a Director in the Gibbons Real Property & Environmental Department, co-authored this post.

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The Gibbons Real Property & Environmental Department will once again exhibit at the International Council of Shopping Centers (ICSC) National Conference & Deal Making Idea Exchange, this year located at the Atlantic City Convention Center in Atlantic City, NJ on September 11 & 12. The Conference provides an opportunity for real estate professionals to network and focus on getting deals done.

Please stop by and visit us at booth #231 to meet several attorneys from the firm's Real Estate Development and Transactional Real Estate practice groups. While you're there, test your putting skills and see how you can "ace" your next deal.

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David A. Brooks, a Director in the firm’s Real Property & Environmental Department, will be a featured panelist at the New Jersey State Bar Mid-Year Meeting this October in Las Vegas, Nevada. The topic of his seminar is, “Recent Developments in the New Jersey Spill Compensation and Control Act.” The program will address various cases decided in the past year or two concerning efforts to establish liability for environmental releases under the "Spill Act." Several of those cases set forth the burden that a plaintiff must meet when using scientific evidence to prove its case. The seminar will discuss the recent rulings and predict where the law on this subject is heading. It is being held on Thursday, October 11, from 10:00 - 11:15 am.

The Mid-Year Meeting 2012 is presented by the New Jersey State Bar in conjunction with the New Jersey Institute for Continuing Legal Education. This year’s meeting will take place at the Encore at Wynn Las Vegas on October 10-14, 2012. Please click here to register.

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David A. Brooks and Paul M. Hauge, both members of the Gibbons Real Property & Environmental Department, contributed a chapter in Implementing Institutional Controls at Brownfields and Other Contaminated Sites. Edward F. McTiernan, Deputy Counsel with the New York Department of Environmental Conservation, co-authored the chapter with Mr. Brooks and Mr. Hauge.

Their chapter covers the state of New Jersey; and appears in Part III of the volume, which is entitled "Selected States and Ontario, Canada." The chapter covers New Jersey’s particular approach to institutional controls, including the implications of the 2009 Site Remediation Reform Act. The book is published by the American Bar Association.

Implementing Institutional Controls at Brownfields and Other Contaminated Sites discusses why the Uniform Environmental Covenants Act (UECA) is important and how most states are handling institutional control issues, whether they have adopted UECA or not. Other institutional control tools, such as EPA's use of five-year reviews under the federal Superfund law, Land Use Control Implementation Plans, and state and local innovations are also discussed, as well as recent efforts to improve regulators’ and practitioners’ understanding of institutional control issues.. Amy L. Edwards is the editor of this edition.

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On August 6, New Jersey Board of Public Utilities (BPU) announced proposed amendments to multiple sections of the regulations governing renewable energy and energy efficiency. The amendments will affect New Jersey’s renewable portfolio standards, class II renewable energy certifications (RECs) and net metering. These proposed amendments come a few weeks after Governor Christie signed S-1925 into law on July 24, 2012, increasing the state’s solar requirements, and giving what is expected to be a boost to the solar energy business in the state.

Among the amendments is a provision which will specify the eligibility criteria for electric generation to be used as the basis for class II RECs. It is intended to codify existing practice and clarify what electric generation qualifies for class II RECs.

The changes proposed to the net metering regulations would clarify the terminology for the time period used to size renewable generation facilities. In addition there is a proposed expansion of the net metering to generation facilities located on contiguous properties.

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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 site’s current owner, One Flint Street LLC, filed suit against Exxon and others for alleged petroleum contamination at a site in Rochester that it had recently purchased. At the outset of the case, plaintiff filed for partial summary judgment against Exxon, on the grounds that the long history of operating a refinery on the site by Exxon’s predecessor, Vacuum Oil, clearly established liability for the contamination found there. Plaintiff supported its motion with test results and an expert’s affidavit that certain contaminants could have come only from refinery operations, which plaintiff never conducted.

The Court denied the motion, holding that the evidence does not establish conclusively that the discharges occurred while Exxon’s predecessor, rather than plaintiff, owned the property. The Court seemed to suggest that evidence of any contribution to site conditions by the current owner would defeat a Nav Law claim for contribution against a past discharger.

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While developers and investors were celebrating the boost to the solar energy business when Governor Christie signed S-1925 into law on July 24, 2012, increasing the state’s solar requirements, the off-shore wind sector received a boost when the US Army Corps of Engineers approved the Individual Permit under the Clean Water Act for Fishermen’s Atlantic City Windfarm. This is the final permit needed in order for Fishermen’s Energy to begin construction of the demonstration project.

The demonstration project will be built 2.8 miles from the Atlantic City boardwalk and the turbines could generate up to 25 megawatts, powering 10,000 homes.

There are eleven other companies interested in building wind farms off the coast of New Jersey. The success of the nacent industry, however, may depend on the availability of financing and incentives.

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On July 19, 2012, Coopers Ferry Partnership was one of 17 community partners selected by the U.S. Environmental Protection Agency (“EPA”) to receive technical assistance as part of its 2011 strategic agenda to renew support for green infrastructure and promote its effective implementation. The Coopers Ferry Partnership will receive $70,000 to advance projects aimed at reducing water pollution in Camden, New Jersey.

EPA’s technical assistance will help Coopers Ferry Partnership evaluate the benefits of the Camden Stormwater Management and Resource Training (SMART) Initiative. The SMART Initiative is a public/private collaboration between the City of Camden, Camden County Municipal Utilities Authority, Cooper’s Ferry Partnership, Rutgers Cooperative Extension Water Resources Program, New Jersey Tree Foundation, NJ Department of Environmental Protection, community organizations, and Camden residents to restore and revitalize Camden neighborhoods. The objective of the Initiative is to develop a comprehensive network of green infrastructure programs and projects for the City of Camden.

Urban run-off of stormwater from roofs and roadways is a serious problem across the country. Large volumes of polluted stormwater degrade the country’s rivers and lakes. Cities, faced with aging and inadequate stormwater infrastructure are increasingly turning to green infrastructure solutions. Green infrastructure, such as rain gardens, green roofs and permeable pavement, uses vegetation and soil to manage rainwater where it falls. By weaving natural processes into the urban environment, green infrastructure provides not only stormwater management, but also flood mitigation, air quality management, and much more. In Camden, four rain gardens were built on the site of an abandoned gas station. Thus, in addition to the stormwater and flood mitigation, the neighborhood traded in a blighted eyesore for a lovely and and productive park. According to EPA, “At a time when so much of our infrastructure is in need of replacement or repair and so few communities can foot the bill, we need resilient and affordable solutions that meet many objectives at once. Green infrastructure is one solution.”

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On July 11, the New York State Department of Environmental Conservation (NYSDEC) released the draft scope for the Generic Environmental Impact Statement (GEIS) on proposed amendments to the regulations that implement the State Environmental Quality Review Act (SEQRA). These amendments, intended to streamline the SEQRA process, would create a number of significant changes to the regulations, the first changes since 1996.

Among the proposed changes are to require public scoping of all Environmental Impact Statements (EIS). Currently this is not mandatory. Making the process mandatory recognizes the importance of public scoping as a tool to focus an EIS on key substantive and significant issues. In addition, there would be an automatic completion provision to the final EIS review process under certain circumstances. If the final EIS is not prepared within the 180-day period for completion, the EIS will be deemed complete on the basis of the draft EIS, public comment and the response to comments prepared and submitted by the project sponsor to the lead agency. This provision extends review periods and provides certainty for when the EIS process ends.

In addition, a lengthy expansion of the list of Type II actions (actions not subject to SEQRA) is proposed which includes:

• minor subdivisions;
• recommendations of a county or regional planning entity following a referral pursuant to General Municipal Law sections 239-m or 239-n;
• a number of actions that encourage development in urban areas verses development in greenfields;
• actions encouraging the installation of solar energy arrays;
• and actions that allow for the sale, lease or transfer of property for a Type II action.

The proposed amendments also show NYSDEC’s embrace of the electronic age by allowing for electronic filing of EIS’s with NYSDEC and attempt to rectify problems associated with project sponsor uncertainty regarding the costs of SEQRA review by the lead agency and its consultants, by requiring that a lead agency provide a project sponsor with an estimate of the review cost by the lead agency and/or its consultants, if requested.

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David J. Freeman, formerly head of the Environmental Practice Group at the New York City office of Paul Hastings, has joined Gibbons P.C.’s New York office as a Director in the Real Property & Environmental Department. Mr. Freeman represents the buyers, sellers, and developers of properties in all environmental law areas including brownfields, due diligence, hazardous waste cleanups, and sustainability. He also litigates matters related to remediation, cost recovery, property damage, and exposure to toxic substances.

“David is a highly regarded lawyer who will help us expand the environmental practice in our New York office,” says Patrick C. Dunican Jr., Chairman and Managing Director of Gibbons. “He will help us to provide additional services to our clients in this market.”

Mr. Freeman has been recognized by clients and peers as a leading environmental lawyer in both the Chambers USA Guide to America’s Leading Law Firms and Super Lawyers. He is also a frequent author and speaker on environmental law topics, and received a 2012 Burton Award for Legal Achievement for his work as “an outstanding law firm author.”

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The Gibbons Real Property & Environmental Department, and four of its attorneys, were among the 10 Gibbons practice areas and 20 individual attorneys ranked in the 2012 edition of the Chambers USA Guide to America’s Leading Lawyers for Business. Chambers annually rates the nation’s leading business lawyers and law firms through comprehensive interviews with top companies, attorneys, and business executives, plus extensive supplementary research.

The Chambers editorial and client testimonials included below highlight the Gibbons Real Property & Environmental Department and its attorneys:

Real Estate: The firm fields a skilled team in transactional real estate and development work, and has an enviable roster of clients. The team’s recent highlights include handling the real estate work in ITT’s separation into three separate companies, and the representation of Cooper University Hospital in its purchase of land for a new cancer facility. Clients particularly appreciate the hands on and personal approach that the partners at this large firm offer. Sources say: “I will use this firm going forward as often as possible and certainly for all my future real estate work. They are superior with respect to service, resources, thoroughness and professionalism.” “They are very well respected with a reputation for results. Where necessary, they will work day and night to meet deadlines.”

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The United States District Court for the Southern District of Texas in May v. Apache Corporation, 2012 WL 156547 (S.D.Tex. May 1, 2012) issued an interesting decision on the relationship between federal and state environmental claims and where they can be heard. The case has some parallels to a case pending in the New Jersey State court captioned the New Jersey Department of Environmental Protection v. Occidental Chemical Corp., et als.

In the May case, plaintiffs had filed various state law claims and a jury demand that lingered for four years in the Texas state court arising out of drilling for and production of oil and gas on the plaintiffs’ property. On the eve of trial, plaintiffs amended their pleadings to advance CERCLA causes of action based on alleged groundwater contamination. The defendants promptly removed the entire case to federal court.

On the remand hearing, the federal court held that CERCLA is an exclusive federal jurisdiction matter and claims brought under CERCLA could not be remanded. Plaintiffs, perhaps regretting the assertion of their CERCLA claims, back-tracked, arguing that their federal causes of action were premature. Premature or not, since they did not dismiss the federal claims, the Court held that those claims had to remain in the federal court.

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As we reported this past December and January, last year the U.S. Environmental Protection Agency (EPA) released a draft report that linked contamination found in wells near Pavillion, Wyoming to the practice of hydraulic fracturing, or fracking. A report prepared for an oil and gas industry group, however, says the EPA study was deeply flawed.

The new report, prepared for the Washington-based Independent Petroleum Association of America by S.S. Papadopulos & Associates, Inc. of Bethesda, Maryland, concludes that EPA provided neither “sufficient data nor analysis to support most of the report’s conclusions.” It criticizes EPA’s study design, notes to a lack of background and baseline data for many key parameters, and points to analytical concerns that undermine the data cited in EPA’s report. All of the “lines of evidence” that EPA cited to support its findings -- including the conclusion that fluids used in the fracking process have affected the area’s groundwater -- can be explained with alternative hypotheses, according to the Papadopulos report.

Fracking involves the pumping of pressurized water, sand, and chemicals into underground rock formation (such as the Marcellus Shale formation in Pennsylvania and New York) that contains natural gas. The high-pressure fluid creates cracks, or fractures, in the rock, allowing the trapped gas to escape, flow into the well and up to the surface.

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For several years, landlords in New York have defended against personal injury liability for mold, arguing that Fraser v. 301-52 Townhouse Corp., 870 N.Y.S.2d 266 (2008), established a categorical rule that epidemiological studies were insufficient to support a finding of causation for respiratory illnesses. In a recent Appellate Division decision, Cornell v. 360 West 51st Street Realty, LLC, 939 N.Y.S.2d 434 (App. Div. 2012), the Court clarified Fraser and held that the scientific evidence in each case should be evaluated under the Frye test, thus opening the door to mold cases.

In Cornell, plaintiff Brenda Cornell brought a personal injury suit against her landlord for a respiratory illness she allegedly suffered due to mold released into the air after the landlord began removing debris from the basement as part of a renovation. At trial, the Court heard testimony that the damp conditions in the basement had created an environment of fungus and that years of spores and dust were disturbed by contractors during the renovation. It was further revealed that indoor mold levels in the apartment were unacceptable. Plaintiff’s treating physician stated in an affidavit that the mold contamination and damp conditions were recognized causes of various respiratory problems. The physician stated that, in arriving at his conclusion, he used a universally accepted methodology that physicians use to assess causation and diagnosis of illnesses. He further relied on a variety of peer-review studies.

Defendants eventually cross moved for summary judgment, which was granted by the Trial Court. The lower court based its decision on Fraser in which the Court found that the epidemiological evidence presented by defendant’s expert, who happened to be the same expert for Cornell, was not sufficiently strong to permit a finding of general causation. In so doing, the Court created a categorical rule, which required dismissal of plaintiffs’ toxic mold claims.

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To fully implement the Site Remediation Reform Act, the New Jersey Department of Environmental Protection (NJDEP) has published a notice of adoption of amendments to the Administrative Requirements for the Remediation of Contaminated Sites (ARRCS rules), N.J.A.C. 7:26C in the New Jersey Register today, May 7, 2012. This adoption also amends several other rules related to site remediation in New Jersey, including the repeal and replacement of the Technical Requirements for Site Remediation, N.J.A.C. 7:26E, and amendments to the Industrial Site Recovery Act rules, N.J.A.C. 7:26B. This rule adoption is concurrent with the final May 7, 2012 deadline for almost all remediating parties to engage a Licensed Site Remediation Professional to conduct remediations in NJ.

David A. Brooks is a Director in the Gibbons Real Property & Environmental Department.

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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.

The RPS system is a computerized modeling system designed to help the Department to categorize sites based on potential risk to public health, safety or the environment. The RPS model utilizes a variety of information, including ground water, soil, and vapor intrusion, sampling data to determine a site score. Once the RPS score is determined, the site is catalogued for relative ranking against sites with similar scores and assigned a specific category number from 1 through 5. Category 1 represents the lowest score (least potential risk to public health) and Category 5 represents the highest score (greatest potential risk to public health).

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Twelve lawyers in the Gibbons Real Property & Environmental Department were listed by New Jersey Super Lawyers and New Jersey Super Lawyers Rising Stars as leaders in their fields. In addition, Russell B. Bershad, Co-Chair of the Gibbons Real Property & Environmental Department, was listed as a top 100 attorney in New Jersey. Overall, 69 lawyers in the firm were featured in these two publications.

The following members of the department were listed in the 2012 issue of Super Lawyers: 

• Russell B. Bershad, Real Estate, Co-Chair of the Gibbons Real Property & Environmental Department
• Irvin M. Freilich, Environmental Litigation
• Howard Geneslaw, Land Use/Zoning
• Douglas J. Janacek, Land Use/Zoning, Co-Chair of the Gibbons Real Property & Environmental Department
• John H. Klock, Construction/Surety
• Susanne Peticolas, Environmental

Those listed in the Rising Stars section were:

• Michael Miceli, Land Use/Zoning
• Sandro G. Ocasio, Environmental Litigation
• Uzoamaka N. Okoye, Business Litigation
• Jennifer M. Porter, Land Use/Zoning
• Jennifer P. Smith, Real Estate
• Jason R. Tuvel, Land Use/Zoning

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Irvin M. Freilich, Team Leader of the Gibbons Environmental Practice, Susanne Peticolas and Paul M. Hauge (Director and Associate, respectively) authored the lead article in the Environmental Law section of the February 27, 2012, New Jersey Law Journal. The article, entitled “Step Aside or Step Up?,” discusses recent decisions from the New Jersey Appellate Division in Magic Petroleum Corp. v. Exxon Mobil Corp. and from the Third Circuit in Raritan Baykeeper v. NL Industries, Inc. These environmental cases involve the often-confusing doctrine of primary jurisdiction, under which courts -- sometimes -- abstain from rendering a decision in a given case to allow an expert agency to make its own determination first. You can read the entire article here.

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Jennifer M. Porter, Esq., a Director in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program SEQRA, on Thursday, June 7, 2012, in Long Island (Carle Place), New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on regulatory requirements and compliance, analysis methodologies and techniques of SEQRA, recent trends and case law, incorporating renewable resources into the planning process and environmental review of public/private partnerships. Ms. Porter will be part of the morning panel and will be discussing SEQRA basics, including applicable state and local regulations, SEQRA processes and procedures, agencies and decisions subject to SEQRA, determining “significance,” and EIS preparation and review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

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As we recently reported, the New Jersey Department of Environmental Protection (NJDEP) announced on March 8 that it had finalized a new waiver rule that will permit the department to relax environmental rules in certain limited circumstances. It took a coalition of environmental and labor groups just two weeks to file a lawsuit challenging the new rule.

The legal challenge was predictable, given the overwhelming response to NJDEP’s March 2011 proposal, which drew comments from over 500 members of the public. The announcement of the lawsuit again revealed sharp divisions about the wisdom and legality of the rule . Those challenging the rule claim that it violates separation-of-powers principles and undercuts important environmental protections, while the rule’s supporters see it as a carefully circumscribed tool for providing needed flexibility.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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The U.S. Supreme Court unanimously held on March 21 that an Idaho couple who had received a compliance order from the U.S. Environmental Protection Agency (EPA) for allegedly illegal filling of wetlands could directly challenge the order in court, and did not have to wait until EPA filed a lawsuit to enforce the order in court before obtaining judicial review of its validity. The opinion completely changes the rules of the game in EPA’s enforcement of the Clean Water Act, and gives landowners a powerful new tool to dispute what they see as erroneous EPA determinations.

The Idaho landowners, Michael and Chantell Sackett, received a compliance order after filling a portion of their residential lot near Priest Lake in preparation for the construction of a home. According to the order, EPA had concluded that their property contained wetlands protected by the Clean Water Act, and that they had violated the statute by filling wetlands without a permit from the Army Corps of Engineers. It also ordered the Sacketts immediately to restore the site. Believing that their lot did not, in fact, contain any protected wetlands, the Sacketts sought a hearing with EPA, but their request was denied. They then filed a lawsuit in federal district court challenging the order as “arbitrary and capricious” under the Administrative Procedure Act (APA). The district court dismissed their suit, and the Ninth Circuit affirmed the dismissal.

Writing for the Court, Justice Scalia needed just ten pages to conclude that the EPA’s issuance of the compliance order was a final agency action reviewable under the APA. It was clearly final, he wrote, because it determined the Sacketts’ rights and obligations and because legal consequences flowed from it -- including, importantly, a doubling of the penalties they could face in a future EPA enforcement action from as much as $37,500 per day (for violating the statute) to as much as $75,000 per day (for violating the statute and the order as well). The order also made it more difficult for them to obtain an “after-the-fact” permit for their activities. It did not matter, Justice Scalia continued, that the order invited the Sacketts to engage in “informal discussions” of its requirements and to point out any inaccuracies. EPA had no obligation to reconsider its original findings, which were, for all intents and purposes, final.

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About two months ago, several NJ Legislators, including State Senator Paul Sarlo (Bergen/Passaic) and Assemblyman Ronald Dancer, proposed bills that would amend the 2008 “Permit Extension Act.” Designed to give developers breathing room in the sluggish economy by extending the validity of development approvals, Proposed Bill S743 (the “Bill” or “S743”) is gaining traction and is moving through the necessary legislative committees. On March 5, 2012, S743 passed by a vote of 4-0 by the Senate Budget and Appropriations Committee. The Bill is scheduled to go before the Assembly Appropriations Committee on March 12, 2012.

Under the current version of the Permit Extension Act, the expiration of all “approvals” that were granted during the “extension period” as defined in the statute have been tolled through December 31, 2012. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” S743 proposes that the definition of the “extension period” be changed so that it runs through December 31, 2014. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received during the extension period could be extended as far out as June 30, 2015. It should be noted that A337 proposed to extend the “extension period” through December 31, 2015. However, A337 has not gained the same head of steam as S743.

S743 as amended includes language to make it clear that as it pertains to Statewide planning areas, the definition of “extension area” shall remain in effect until June 30, 2013, or until such later time as the State Planning Commission revises and readopts New Jersey’s State Strategic Plan and adopts regulations to refine this definition. Further, all underlying municipal, county, and State permits or approvals within the Pinelands Area are extended pursuant to the “Pinelands Protection Act,” N.J.S.A. 13:18A-1 et seq.

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The New Jersey Department of Environmental Protection (NJDEP) announced on March 8 that it had finalized a new waiver rule that will permit the department to relax environmental rules in certain limited circumstances. The new rule, which grew out of an executive order from Governor Christie that called upon state agencies to apply “common sense principles” in implementing and enforcing legal requirements, will be formally published on April 2, 2012 and will become effective on August 1, 2012.

NJDEP’s March 2011 proposal for the waiver rule generated many hundreds of comments from over 500 members of the public. The agency also held a public hearing on the proposed rule, where most speakers opposed it. The final rule reflects some modifications to the original proposal, but retains its basic thrust: to allow NJDEP to waive strict compliance with its rules in limited circumstances, in a manner that is consistent with the agency’s environmental mission.

A waiver may be granted only when at least one of the following criteria are satisfied: (1) the applicant is subject to conflicting rules, (2) strict compliance would be unduly burdensome, (3) the waiver would result in a net environmental benefit, or (4) the waiver is justified by a public emergency. The waiver rule does not apply to a number of categories of requirements, including requirements imposed by statute or by federal regulations; numeric or narrative standards that protect human health; and requirements concerning remediation funding sources and other financial matters.

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With full implementation of the Site Remediation Reform Act on the horizon, the New Jersey Department of Environmental Protection (NJDEP) recently clarified that for parties currently proceeding with remediation under NJDEP oversight pursuant to an Administrative Consent Order (ACO) or Remediation Agreement (RA), such parties will be expected to engage a Licensed Site Remediation Professional no later than May 7, 2012. Any ACO/RA requirements to obtain NJDEP pre-approval of reports and workplans will be held in abeyance. Likewise, any ACO/RA specific timeframes will also be held in abeyance. Instead, responsible parties must meet all regulatory and mandatory timeframes prescribed in applicable rules. However, the ACO/RA will otherwise remain in effect until the remediation is complete or covered by a remedial action permit and parties will be subject to, among other requirements, the remediation funding source requirements and stipulated penalties.

David A. Brooks is a Director in the Gibbons Real Property & Environmental Law Department.

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Jennifer M. Porter, Esq., a Director in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program SEQRA, on Friday, March 9, 2012 in Latham, New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on regulatory requirements and compliance, the integration of SEQRA with the project review process, cumulative impacts and segmentation and how to use SEQRA to obtain a better project without bankrupting the applicant. Ms. Porter will be part of the afternoon panel and will be discussing SEQRA litigation issues including the statute of limitations, standing to sue, defending or attacking negative declarations and procedural and substantive judicial review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

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Apparently concerned that the economy may not be recovering rapidly enough, the 215th New Jersey Legislature now convened, introduced a new bill (A337) on January 10, 2012, by Assemblyman Ronald S. Dancer of District 12, to change the definition of the “extension period” under the Permit Extension Act so that it runs through December 31, 2015. Therefore, based on the 6-month tolling provision currently in the Permit Extension Act, approvals received for development applications during the extension period could be extended as far out as June 30, 2016. Bill A337 has been referred to the Assembly Housing and Local Government Committee.

In 2008, as the economy was sliding into recession, the New Jersey Legislature passed the “Permit Extension Act,” which tolled the expiration of all development approvals that were granted during the “extension period” as defined in the statute. The intent was to preserve the benefit of permits until the economy improved. The “extension period” is currently defined as “the period beginning January 1, 2007 and continuing through December 31, 2012.” The definition of “approvals” under the Permit Extension Act covers most permits issued by State rule or regulation, including, preliminary and final approvals for development applications under the New Jersey Municipal Land Use Law.

If signed into law, Bill A337 could provide developers with an opportunity to wait a little longer for the economy to turn around in order to build projects that have received approvals and are considered dormant at the present time.

Jason R. Tuvel is an Associate in the Gibbons Real Property & Environmental Department.

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In December, we reported on the release of a draft report from United States Environmental Protection Agency’s (EPA) Office of Research and Development on a possible link between groundwater contamination in some Wyoming wells and hydraulic fracturing (“fracking”) activity in the area. Now, as promised, EPA is initiating an independent assessment of the report by outside peer reviewers.

The EPA report garnered intense attention from both proponents and opponents of fracking, which extracts natural gas from underground rock formations through the pumping of a pressurized mixture of water, sand, and chemicals that creates cracks, or fractures, in the rock, allowing the trapped gas to escape, flow into the well and up to the surface. Concerns over groundwater contamination could delay or limit fracking in New York, Pennsylvania, and a number of other states.

EPA published a Federal Register notice on January 17, 2012 that seeks nominations for experts to review the draft report as well as all public comments received during a comment period that will close on January 27. An EPA peer review contractor will select five to seven outside reviewers from among those nominated.

The agency is looking for recognized experts in a variety of fields (e.g., petroleum engineering, hydrology, geophysics, and water quality) who have no financial conflicts of interest or whose position would otherwise create an appearance of a lack of impartiality. Nominations (preferably via e-mail) must be submitted by February 17.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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On December 21, 2011, the United State Environmental Protection Agency (EPA) announced that it had issued the first ever national standards for mercury emissions and other air pollutants from power plants. The regulations were mandated by the 1990 Clean Air Act Amendments. EPA estimates that the new standards will make a major contribution to public health by preventing 11,000 premature deaths and 4,700 heart attacks annually, as well as 130,000 cases of childhood asthma symptoms and about 6,300 cases of acute bronchitis among children each year.

EPA Administrator Lisa P. Jackson stated, "The Mercury and Air Toxics Standards will protect millions of families and children from harmful and costly air pollution and provide the American people with health benefits that far outweigh the costs of compliance." According to EPA, the standards rely on widely available pollution controls that are already in use at more than half of the nation’s coal-fired power plants.

Sources will have three years to achieve compliance, with a fourth year available from state permitting authorities for technology installation. In developing the final rules, EPA consulted with State, local, and tribal officials in and also worked with industry groups, unions and other stakeholders. It reviewed over 900,000 comments. Critics of the regulations assert that they will result in job loss because older coal fired plants may be required to close. EPA counters that society as a whole will benefit because prevention of asthma, heart attacks, bronchitis and other illnesses attributable to air toxics will save $37 billion to $90 billion in health care costs each year by 2016.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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A draft report from United States Environmental Protection Agency’s (EPA) Office of Research and Development has tentatively pointed a finger at hydraulic fracturing (“fracking”) as a cause of groundwater contamination detected in a number of wells near the town of Pavillion, Wyoming. The report, which has not yet undergone outside peer review, is likely to set off alarm bells among both proponents and opponents of fracking, including those in eastern states like New York, New Jersey, and Pennsylvania.

Fracking involves the pumping of pressurized water, sand, and chemicals into underground rock formation (such as the Marcellus Shale formation in Pennsylvania and New York) that contains natural gas. The high-pressure fluid creates cracks, or fractures, in the rock, allowing the trapped gas to escape, flow into the well and up to the surface. Eastern states have adopted a variety of policies toward fracking, ranging from Pennsylvania’s enthusiastic promotion to New York’s temporary moratorium and ongoing effort to promulgate protective regulations to New Jersey’s attempted legislative prohibition that was vetoed in favor of a temporary ban.

Whether fracking may contaminate groundwater is a critical question facing policy makers across the country. The EPA study, conducted in response to complaints from residents about objectionable taste and odor problems in water drawn from the drinking water wells after fracking in nearby gas production wells, concludes, based upon both data and complex scientific reasoning, that fracking has caused impacts to ground water in the Pavillion area. EPA also noted certain limitations of the study: its purpose was “to determine the presence, not the extent, of ground water contamination in the formation,” and the results are specific to the Pavillion area, where fracking occurs in and below a drinking water aquifer and near drinking water wells, unlike production practices in many other parts of the country.

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The all electric Nissan Leaf is now available in seven new states, bringing the total to 30, including New Jersey, where it is sold. The additional states are Delaware, Indiana, Louisiana, Nevada, Ohio, Pennsylvania and Rhode Island. This is good news for Delaware, Pennsylvania and Rhode Island, which are members of the Transportation and Climate Initiative planning for an Electric Vehicle (EV) Network across the Northeast.

The proposed EV Network is intended to enable EV drivers to be able to use their vehicles easily throughout the Northeast from northern New England to Washington, D.C. In addition, it hopes to attract private investment with consistent standards and regulations across the region. The project will develop a plan and guidance documents for the development of a network of charging stations.

On September 22, 2011, the Transportation and Climate Initiative, which includes New Jersey as a member, was awarded a federal grant of nearly $1 million to start planning the EV Network. According to Commissioner Martin, "Improving air quality in New Jersey is a top priority of the Christie Administration. But in addition to helping us reduce auto emissions and improving the health of our residents, this new network will provide an economic boost to the State through the creation of new green jobs in research and production of electric cars and electric vehicle infrastructure."

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An 1881 deed and an 1882 Supreme Court decision formed the background for a very modern controversy recently addressed by the Pennsylvania Superior Court. The decision, Butler v. Estate of Powers, casts a shadow over ownership rights in natural gas contained in the Marcellus Shale formation, and has left many companies in the “fracking” industry uncertain about what they own.

The deed in question conveyed a 244-acre parcel to the appellees’ alleged predecessors in title, but reserved “one half the minerals and Petroleum Oils” to the grantor. The appellees claimed to own the surface and 100% of the minerals and petroleum -- including, specifically, natural gas contained in the Marcellus Shale formation under the parcel -- based on adverse possession. The appellants, heirs to the estate of the grantor, claimed that the reservation in the deed gave them, and not the appellees, half of the shale gas.

The issue: what legal rule should the court apply? Most observers thought that the Pennsylvania Supreme Court’s 1882 decision in Dunham v. Kirkpatrick, as extended by its 1960 decision in Highland v. Commonwealth controlled. Those cases held that a conveyance of “mineral rights” is presumed not to include the right to extract oil and gas. The Supreme Court later carved out an exception to Dunham in U.S. Steel Corp. v. Hoge, which held that coalbed methane belongs to the owner of the coal. The Hoge rule was thought to apply only to coal and the gas contained within it.

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Gibbons P.C. is proud to announce that several Real Property & Environmental Department (RPE) practice areas have achieved national and metropolitan rankings in the 2012 edition of Best Law Firms, published by U.S. News and Best Lawyers®. Best Lawyers® is the oldest and most respected peer-review publication in the legal profession. In addition, seven RPE attorneys have been individually selected for inclusion in six different categories.

The firm’s Land Use & Zoning Law practice was nationally ranked in the third tier in its category. In addition, the Department achieved first-tier rankings for the Newark, New Jersey metropolitan region in five categories:

• Environmental Law
• Land Use & Zoning Law
• Litigation – Environmental
• Natural Resources Law
• Real Estate Law

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The Clean Water Act regulates the placement of fill into the “waters of the United States.” That term has come to include wetlands -- or at least some wetlands. The Supreme Court’s last attempt, in Rapanos v. United States, to clarify which wetlands fall within the statute’s coverage caused great confusion, as the five Justices who agreed on the judgment (a four-Justice plurality led by Justice Scalia, and Justice Kennedy, who concurred separately) generated two separate tests for jurisdiction. Which test should lower courts apply? In an opinion released on October 31, the Third Circuit said, “both” -- if the wetlands in question satisfy either Justice Scalia’s test or Justice Kennedy’s test, they fall within the statute’s reach.

Justice Scalia’s plurality opinion Rapanos, decided in 2006, took a “wet” view of “waters of the United States,” restricting that term to “relatively permanent” water bodies that formed “geographic features.” Wetlands, under this test, fall within the statute’s scope only if they have “a continuous surface connection” to such bodies of water. By contrast, Justice Kennedy’s “dry” test construed the statute to cover any wetlands that have a “significant nexus” with “waters of the United States, i.e., that the wetlands, alone or in combination with similar lands in the region, significantly affect the chemical, physical, and biological integrity of covered waters.

In United States v. Donovan, the Third Circuit affirmed a district court summary judgment against Delaware landowner David Donovan, who had been fined $250,000 and ordered to remove 0.771 acres of fill that he had placed on his property without obtaining a permit from the Army Corps of Engineers. Donovan argued that the multiple opinions in Rapanos failed to provide a governing legal standard for Clean Water Act jurisdiction, and that therefore pre-Rapanos case law should govern. The Third Circuit disagreed, and, adopting the position taken by the First Circuit and the Eighth Circuit, held that the Corps of Engineers could assert jurisdiction if the wetlands on Donovan’s property met either test set forth in Rapanos. The Court further held that the government’s evidence indisputably showed that Donovan’s wetlands satisfied the “significant nexus” test, and thus did not have to decide whether there was any genuine issue as to whether they satisfied the Rapanos plurality’s test.

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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.”

Under the Site Remediation Reform Act (SRRA), N.J.S.A. 58:10C-1 et seq., passed in May 2009, the NJDEP is required to establish a ranking system for active remediation sites based on risk to public health, safety and the environment, the length of time the site has been undergoing cleanup, economic impact, and other relevant factors. To that end, NJDEP designed the Remedial Priority Scoring system which uses modeling assumptions on data gathered from a number of databases on the 12,000 known contaminated sites. Certain sites are excluded from the RPS process, including homeowner sites, sites undergoing operations and maintenance monitoring, and unknown source cases.

The computerized process attempts to provide relative rankings of active sites using selected data from the Geographic Information System (GIS) tools, multiple geographic databases and layers, the New Jersey Environmental Management System (NJEMS), the Known Contaminated Sites (KCS) report, and groundwater sampling data. Ongoing development of the model will eventually incorporate contaminated soil data and corresponding pathways. All sites will receive a tiered ranking between one and five, with tier five representing the highest contamination risk.

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On October 20, 2011, New Jersey Department of Environmental Protection Commissioner Bob Martin announced that New Jersey signed an agreement with other states and the District of Columbia to develop a Northeast Electric Vehicle Network and promote alternative transportation fuels. This announcement comes less than one month after New Jersey, along with the other members of the Transportation and Climate Initiative, received a federal grant of nearly $1 million to start planning a network of charging stations for electric vehicles (EVs). The goal of the Network is to bolster economic growth, maintain the region’s leadership in the clean energy economy and reduce the area’s dependence on oil and its emissions of greenhouse gases and other pollutants.

The Electric Vehicle Network is intended to enable EV drivers to be able to use their vehicles easily throughout the Northeast from northern New England to Washington, D.C. In addition, it hopes to attract private investment with consistent standards and regulations across the region. The project will develop a plan and guidance documents for the development of a network of charging stations. It is anticipated that EVs will reduce emissions from the transportation sector by shifting vehicles from petroleum to cleaner, more efficient electricity produced by renewable resources. In New Jersey, nearly 40% of the state’s greenhouse gas emissions come from the transportation sector.

In announcing New Jersey’s membership in the agreement, Commissioner Martin stated,

The Christie Administration is committed to improving New Jersey's air quality. Diversifying the types of vehicles that people in the Northeast and Mid-Atlantic drive to include more electric, hybrid and alternate-fuel vehicles is a very important part of improving our air quality. The Northeast Electric Vehicle Network will provide the planning needed to develop and spur the construction of infrastructure that will drive market demand for these vehicles. At the same time, this effort will lead to job creation and economic growth.

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The U.S. Supreme Court will take up another Montana river case. The case involves a dispute between the State of Montana and a power company that purchased dams on several Montana rivers, which are licensed under the Federal Power Act by the Federal Energy Regulatory Commission. The last time Montana visited the U.S. Supreme Court, it lost to Wyoming in a dispute over water usage under the Yellowstone River Compact. This time Montana stands to gain $41,000,000 as fair market rental for its river beds granted on summary judgment and upheld by the Montana Supreme Court.

The power company, PPL Montana, LLC, is a wholesale electric generator (exempt from public utility regulation) who owns several federally licensed dams on various rivers in Montana. At issue is the ownership of over 500 miles of rivers and 5,600 acres of riverbed under dams and reservoirs associated with two federally licensed hydroelectric facilities on the upper Missouri, Madison and Clark Fork Rivers in Montana. Most of the dams were constructed between 1891 and 1930 and the projects were approved in 1949 and 1956 under the Federal Power Act. According to the Montana Supreme Court, the riverbeds belong to the State of Montana. When the original 13 states became sovereign, they gained absolute right to all navigable rivers and the lands beneath them for public use. All states joining the Union thereafter were put on equal footing with the original thirteen and so acquired the same rights. Thus Montana’s ownership depends upon whether the rivers were navigable when the Montana joined the union, i.e. 1889. Navigability basically means whether a log can float downstream. If so, it is commercially navigable. PPL had argued that under US Supreme Court precedent, the issue of navigability for title purposes required a section by section test where there were relevant non-navigable sections of the river at the time of statehood. The trial court had concluded that a section by section analysis was not necessary and that based on current conditions of recreational usage on parts of the rivers, the entire rivers were navigable in 1889.

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Today New Jersey Department of Environmental Protection Commissioner Bob Martin announced that New Jersey, along with the other members of the Transportation and Climate Initiative, have received a federal grant of nearly $1 million to start planning a network of charging stations for electric vehicles. The initiative is expected to spur job creation and the use of electric vehicles (EVs).

The grant was awarded by the U.S. Department of Energy to the Transportation and Climate Initiative which is comprised of 11 states in the Northeast and the District of Columbia. The Initiative was launched in June 2010 with the goal of reducing greenhouse gases in the transportation sector and helping build a clean energy economy. In New Jersey, nearly 40% of the state’s greenhouse gas emissions come from the transportation sector.

The proposed Electric Vehicle Network is intended to enable EV drivers to be able to use their vehicles easily throughout the Northeast from northern New England to Washington, D.C. In addition, it hopes to attract private investment with consistent standards and regulations across the region. The project will develop a plan and guidance documents for the development of a network of charging stations.

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On August 16, 2011, the United States Environmental Protection Agency (USEPA) issued its final rule on chemical reporting which will apply to the next reporting period running from February 1, 2012 through June 30, 2012. Adopted pursuant to section 8(a) of the Toxic Substances Control Act (TSCA), the rule increases the type and amount of information USEPA will collect on commercial chemicals from chemical manufacturers, including importers, allowing USEPA to better identify and publish information on the manufacturing, processing, and use of commercial chemical substances and mixtures on the TSCA Chemical Substance Inventory (TSCA Inventory).

The new rule, referred to as the Chemical Data Reporting Rule (CDR), amends and renames the existing Inventory Update Rule. The rule requires more frequent reporting of critical information on chemicals and requires the submission of new and updated information relating to potential chemical exposures, current production volume, manufacturing site-related data, and processing and use-related data for a larger number of chemicals. Instead of reporting every five years, the reporting period returns to a four year cycle.

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On August 18, 2011, DEP Commissioner Bob Martin and DOT Commissioner James Simpson released a set of guidelines to revamp and apply consistency to New Jersey’s land leasing process for State Lands. A panel of ten State Agencies was convened to analyze the current lease policies and compile a Lease Valuation Report that offers recommendations on leases for Tidelands; Linear Corridor Projects (other than Tidelands); Publicly Bid, Market-Based and Nominal Fee leases; Telecommunications Towers and Antennas, Aquaculture, and leases Related to Transportation Corridors. The guidelines will be adopted by all State agencies, with most of the guidelines implemented immediately.

The panel reported an honest and critical view of the current system for valuing certain types of leases labeling it simply as “broken.” The panel noted that some fee schedules are terribly outdated and that certain rules and statutes prevent the maximization of compensation to the State for the use of its land.

The new guidelines serve two public purposes: 1) to ensure that the State and its Citizens receive fair compensation for the use of State land and 2) to reduce the environmental impact of those that require use of State lands for private projects.

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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.

The proposal includes major amendments, repeals and new rules intended to fully implement the new LSRP oversight remediation paradigm. The proposed Final Rules provide for the following:

• Amending the Administrative Requirements for the Remediation of Contaminated Sites (ARRCS) rules, the Underground Storage Tank (UST) rules and the Industrial Site Remediation Act (ISRA) Rules to remove all provisions related to the phase-in period;
• Recodifying all administrative requirements from the ISRA Rules and UST rules to the ARRCS rules;
• Adding mandatory timeframes for completion of remedial investigation and implementation of remedial action;
• Repealing and replacing the current Technical Requirements with new performance-based Technical Requirements, intended to allow more flexibility in addressing contamination and potential exposure pathways. Many of the existing Technical Requirements will be recast as a new series of technical guidance documents providing direction on how to achieve the performance-based goals;
• Amending the Discharges of Petroleum and Other Hazardous Substances rules to require compliance with both a facility’s discharge cleanup and removal plan and the ARRCs rules; and 
• Reformatting text where needed to make the rules easier to understand, to correct typographical and grammatical errors, and to update cross-references.

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Gibbons is pleased to congratulate Edward F. McTiernan on his new position as Deputy Counsel for the New York State Department of Environmental Conservation (DEC).

For the past 17 years, Mr. McTiernan has been a director at Gibbons, leading the firm’s environmental team, representing clients before federal and state administrative agencies, and litigating complex environmental actions. He was also a member of the firm’s Executive Committee. During his tenure, Gibbons achieved stellar rankings in the environmental law category in such publications as the Best Lawyers in America and Chambers USA Guide to America’s Leading Lawyers for Business, and Mr. McTiernan himself was listed in both those publications, as well as in New Jersey Super Lawyers. Prior to his career in law, he worked as an environmental scientist focused on site remediation.

“As leader of the Environmental Team at Gibbons, Ed has earned the trust and respect of Gibbons clients and colleagues with his exceptional skill, commitment, and insight,” says Patrick C. Dunican Jr., the firm’s Chairman and Managing Director. “We are confident Ed will do similarly outstanding work for the DEC, and we wish him all the best.”

Mr. McTiernan starts at the agency on August 29, 2011. Remarks Joe Martens, DEC Commissioner, “Ed is a seasoned litigator who is intimately familiar with environmental regulatory issues. His knowledge of the remediation process and his skill in resolving environmental disputes will make him a valuable member of our legal team.”

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In early 2011, several bills were introduced to encourage the installation of Electric Vehicle (EV) charging stations. Senator Greenstein introduced Senate bill 2603, in January, which would require the New Jersey Turnpike Authority and the South Jersey Turnpike Authority to provide EV charging stations at the service areas along the toll roads, allocating 5% of the parking spaces to EV stations. The bill was reported out of the Senate Environment and Energy Committee on February 14. In March, another bill, S2784, also introduced by Senator Greenstein, would require new shopping center developments to allocate 5% of the parking spaces to EV charging stations. Both of these bills have been sitting since the Spring. Nonetheless, even in the absence of legislative mandates, EV stations have been popping up in NJ and NY. One of the newest ones announced is in Avalon, NJ.

Touted as the first EV charging station at the Jersey shore, Avalon opened its 24 hour charging station on August 5 in front of its public safety building. Under a public-private arrangement with U-Go Stations, the firm has built and will maintain the charging station and pay the town a percentage of the revenue generated. At the moment, there is not much competition. A search of EV charging stations within 150 miles of Newark, revealed 73 charging stations, two of them in Newark itself and the majority of them in Manhattan and Connecticut. Many of the locations are public parking lots, anticipating the future needs of their customers. Others are colleges and universities. In Connecticut, a number of Whole Foods markets have EV charging stations.

It is unclear exactly who is using these charging stations now. The first battery electric car, the Nissan Leaf, was introduced in December 2010, although other major manufacturers have announced the development of EVs. Moreover, the number of EVs is likely to increase because of new fuel efficiency standards announced requiring cars and trucks to meet the equivalent of 54 mph by 2025.

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In what is described as the country’s biggest Superfund site, Judge William Griesbach of the Eastern District of Wisconsin on July 5, 2011, rejected the United States’ attempts to compel defendants Appleton Papers Inc. and NCR Corporation to comply with an EPA directive requiring sediment remediation in the Fox River at a rate substantially similar to the rate at which they had remediated sediment over the last few years.

A Unilateral Administrative Order issued by EPA in 2007 required the dredging and disposal of approximately 3.5 million cubic yards of sediment from the Fox River, as well as the installation of caps and the use of sand to cover PCB-laden riverbed sediment. In 2009, NCR and Appleton created a limited liability corporation (“LLC”) to perform the work and the LLC entered into a long term contract with Tetra Tech to perform the remediation. Although they dredged 550,000 cubic yards of material in 2009 and 743,000 cubic yards in 2010, NCR and Appleton proposed a reduction in the amount of dredging for 2011. EPA rejected this proposal and instead, issued a work plan requiring the dredging of between 605,000 and 810,000 cubic yards of sediment in 2011.

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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.

David Brooks of Gibbons P.C. was the moderator and a panelist for the Vapor Intrusion presentation, an issue that has received increased attention in recent years from both US EPA and New Jersey. Other speakers at the Forum included not only legal practitioners but the New Jersey Department of Environmental Protection, Non-Profit Organizations, and Private Sector Companies. Jeannie Fox, President of the New Jersey Board of Public Utilities gave a keynote speech during the Forum focusing on solar issues in New Jersey.

As a testament to the increased interest in environmental topics as well as the historical success of the Forum, program attendance increased over last year. Attendees earned 11.4 Continuing Legal Education credits including several highly sought after ethics/professionalism credits.

Sandro G. Ocasio is an Associate in the Gibbons Real Property & Environmental Department.

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The 2011 edition of the Chambers USA Guide to America’s Leading Lawyers for Business features 10 Gibbons practice areas and 18 individual attorneys ranked in the top tiers. The firm has appeared in the New Jersey section of the Chambers guide since its inception, but the 2011 version includes the highest total number of firm practices and attorneys to achieve the distinction of a Chambers ranking.

“It is a great accomplishment in and of itself to achieve a Chambers ranking, but the addition of new attorneys to the rankings, and the upward mobility within the rankings, are even more impressive,” says Patrick C. Dunican Jr., Chairman and Managing Director of Gibbons. “What that says is that Gibbons does not rest on its laurels, that the firm and our attorneys are constantly striving to provide ever more exceptional legal and client service.”

Chambers annually rates the nation’s leading business lawyers and law firms through comprehensive interviews with top companies, attorneys, and business executives, plus extensive supplementary research. Chambers and client testimonials, excerpted from this year’s guide, highlight the Gibbons Real Property & Environmental Department that ranked in the guide for New Jersey:

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The U.S. Environmental Protection Agency (EPA) on July 7 finalized a new rule aimed at reducing interstate air pollution across the eastern half of the country. The Cross-State Air Pollution Rule (CSAPR) requires reductions in power plant emissions in 27 states that cause or contribute to ozone and/or fine particulate pollution in other states.

The development of the CSAPR required EPA to analyze a bewildering array of linkages between sources and downwind states in which the same state could be both a source and a receptor. New Jersey, for example, is affected by particulate emissions from Pennsylvania, but also contributes to ozone levels in Connecticut. The new rule replaces the 2005 Clean Air Interstate Rule, which was the subject of a 2008 court decision that left the old rule in place but, because of its many flaws, required EPA to replace it with a new rule implementing the Clean Air Act’s requirements regarding interstate air pollution.

The CSAPR will require reductions in sulfur dioxide emissions as early as January 1, 2012 and nitrogen oxide emissions by May 1, 2012. By 2014, it is anticipated that sulfur dioxide emissions will be reduced by 74% and nitrogen oxide emissions by 54% from 2005 levels in the affected region. According to EPA, the CSAPR will prevent over 13,000 premature deaths each year, at a cost that will be dwarfed by the benefits of the rule.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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Reversing the Second Circuit, the Supreme Court on June 20, 2011 held, in American Electric Power Company v. Connecticut, that the Clean Air Act, along with EPA regulatory action that it authorizes, displaces any federal common-law right to seek abatement of emissions of greenhouse gases (GHGs) from power plants. The Court’s decision means that for the foreseeable future, the debate over the proper scope of federal GHG regulation will take place in the executive and legislative branches and not the courts. It also leaves unanswered the question whether traditional state common-law remedies still have a role to play in GHG regulation.

The case began as two separate lawsuits filed in the Southern District of New York by eight States and the City of New York, and by three nonprofit groups, against five power companies that, according to the complaints, are the five largest emitters of carbon dioxide in the country. The plaintiffs sought injunctive relief in the form of orders to cap and reduce the emissions, invoking both the federal common law of interstate nuisance and state common law. The district court dismissed both actions as presenting non-justiciable political questions, but the Second Circuit reversed. The appellate panel (which included then-Circuit Judge Sonia Sotomayor) held that the suits were not barred by the political question doctrine, that the plaintiffs had standing to bring their claims, and that the Clean Air Act did not displace federal common law. Recognized that EPA has the authority under the Clean Air Act to regulate carbon dioxide as an air pollutant, and the principle that federal common law is displaced when Congress has spoken directly to a particular issue, the appellate court held that at least until EPA takes some specific regulatory action -- beyond its then proposed (but not final) finding that greenhouse gases endanger public health and welfare, the statute does not regulate greenhouse gas emissions, or does not regulate such emissions from stationary sources. Subsequent to the appellate decision, in December 2009, EPA issued its final GHG Endangerment Finding, identifying six GHGs in the atmosphere to be a threat to public health and welfare of current and future generations. Although the Endangerment Finding does not impose any requirements on industry, it is a prerequisite to such regulation.

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On Monday, January 3, 2011, the Environmental Protection Agency published in the Federal Register, 76 Fed. Reg. 5,370 (Jan. 31, 2011), a Notice of Opportunity for Public Input on the Potential Addition of Vapor Intrusion Component to the Hazard Ranking System (the “HRS”). Should this proposal become a rule it would add another contamination pathway to analyze in connection with listing sites on the National Priorities List (the “NPL”).

The HRS is the principal tool used by EPA to determine which contaminated sites to place on the NPL. Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), which was enacted in 1980 and amended in 1986 by the Superfund Amendments and Reauthorization Act (“SARA”), EPA was required to develop a mechanism to identify sites posing the most serious and immediate threat to the environment or human health and create the list of those sites, constituting the NPL. The HRS was developed to handle that directive.

The HRS is a numerical system that takes into account four potential contamination pathways: 1) groundwater migration; 2) surface water migration; 3) soil exposure; and 4) air migration. During the preliminary assessment and site inspection phase of a site remediation, these four pathways are evaluated using three categories: 1) likelihood that a site has released or has the potential to release hazardous substances into the environment; 2) characteristics of the waste; and 3) people or sensitive environments affected by the release. A score is assigned to each pathway based on this analysis and a formula is employed to determine an overall score, which ranges from 0 to 100. A site with a score of 28.50 or more is eligible to be placed on the NPL.

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The EPA has announced that six different New Jersey communities will receive a total of $3.4 million under the agency’s brownfield grant program in FY 2011. The grants will fund assessment and cleanup efforts at contaminated sites so that the sites can be returned to productive use. The grant program, part of EPA’s larger brownfield efforts, will award some $76 million in grants this year, and has awarded over $800 million since its inception. New Jersey’s grants will fund activities at thirteen sites or areas in Newark, Jersey City, Trenton, Elizabeth, Mantua Township, and Maurice River Township.

At the state level, government funding for brownfield revitalization in New Jersey has virtually dried up. As reported on this blog earlier this month, New Jersey’s Brownfield Reimbursement Program has run out of money and is temporarily shut down.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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On Tuesday, June 7, the Christie Administration released the State’s draft 2011 Energy Master Plan (Master Plan). The Master Plan provides the Administration’s strategic vision of energy in New Jersey. In particular, the “use, management and development of energy in New Jersey over the next decade,” and includes in-depth discussion of New Jersey’s electricity sources, uses, regulations, challenges, and incentives across all users of electricity in the State: residential, commercial, and governmental. These links provide access to the official State of New Jersey Governor’s Release of Tuesday, June 7th, and the full Draft.

Impact on Solar

While the Master Plan will be subject to public hearings before becoming final, the Master Plan supports the State’s solar initiatives. Although the Master Plan raises concerns about excess allocation of resources to certain energy sectors, such as solar, it, however, confirms the State’s commitment to solar as a key part of NJ’s energy future and proposes that incentives remain in place long term. The Master Plan acknowledges “the integral role that solar energy can play in New Jersey’s ability to meet its RPS objective as well as its role as an engine for economic growth.” The Master Plan, however, has encouraged the BPU to “step up its regulatory review of solar PV to ensure that State-sponsored programs represent worthwhile initiatives that achieve a sensible balance among competing ….objectives,” but the Plan clearly does support behind-the-meter commercial/industrial solar installations rather than residential and certain grid-connected systems.

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The Supreme Court in Montana v. Wyoming --U.S.--, 131 S.Ct. 1765 (2011), rejected Montana’s claim that Wyoming’s usage of water depleted the amount of water available to it under the Yellowstone River Compact between Montana and Wyoming. Montana contended that Wyoming breached Article V(A) of the Compact which provided that “appropriative rights to the beneficial uses of the water of the Yellowstone River System existing in each signatory State as of January 1, 1950, shall continue to be enjoyed in accordance with the laws governing the acquisition and use of water under the doctrine of appropriation.”

Better farming techniques of irrigation developed since 1950 have allowed Wyoming farmers to divert the same amount of water but have resulted in reducing the amount of water returning to the river as run off. It is as though Wyoming farmers had been using leaky buckets for irrigation that returned water to the river in 1950, but later bought new buckets that didn’t leak, giving the farmers more water and more use of it, reducing the amount of water returned to the river and available to the downstream Montana users.

The concept the Court focused on was “beneficial use” and diversion, not depletion. The Court considered appropriation as a water right that once it is perfected, “is senior to any later appropriators' rights and may be fulfilled entirely before those junior appropriators get any water at all.” Thus in the Court’s view, as long as Wyoming farmers diverted the same amount of water in 2011 as in l950, they did not violate the compact, even if the diversion caused depletion of the water resources.

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The Brownfield Reimbursement Program (the “Program”), a New Jersey State initiative designed to reimburse developers up to 75% of costs incurred to remediate a brownfield site, has run out of money and is temporarily shut down. This development arrives on the heels of a recent New Jersey Department of Environmental Protection (“NJDEP”) announcement that, effective May 3, 2011, applications to the Underground Storage Tank Fund, a similar initiative to help homeowners remove USTs, will not be reviewed or processed due to insufficient funds.

Effectuated under the Brownfields and Contaminated Site Remediation Act of 1998, the Program was available to any party that is not liable under the Spill Compensation and Control Act N.J.S.A.58:10-23.11g. Funding for reimbursement under the Program was derived from tax revenues and appears to be a victim of the general budget crisis.

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On Friday, June 24, 2011, David A. Brooks, Counsel to the Gibbons Real Property and Environmental Department, will moderate a panel, “Vapor Intrusion: Old Problems - New Rules” at the 2011 Environmental Law Section Forum Weekend presented by the New Jersey State Bar Association and the New Jersey Institute for Continuing Legal Education and co-sponsored by the New Jersey Corporate Counsel Association. This full weekend program presents an annual update on environmental law in New Jersey and will also include panels discussing funding for remediation projects, New Jersey’s licensed site remediation professional program, litigation related to the remediation of urban river systems, the role of non-governmental organizations, renewable energy and climate change, and ethical issues.

The conference will be held at the Golden Inn in Avalon, New Jersey from June 24, 2011 through June 26, 2011. Please click here to register.

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Thanks to a special “extension statute” enacted in 2001, the statute of limitations that requires the State of New Jersey to commence a civil action within ten years of its accrual does not apply to an action for natural resource damages (NRDs) that is brought “pursuant to the State’s environmental laws.” The Appellate Division recently held that the Legislature intended “the State’s environmental laws” to include the common law -- or at least the common law of strict liability -- and revived a claim that otherwise would have been time-barred.

The State’s Department of Environmental Protection (DEP) filed two complaints against Exxon Mobil Corporation in August 2004, seeking natural resource damages for discharges of pollutants at sites in Linden and Bayonne under the Spill Act and common-law theories of nuisance and trespass. DEP later amended its complaints to add counts sounding in strict liability.

When the trial court dismissed the nuisance and trespass claims, finding that they were time-barred because the extension statute did not apply to such common-law claims, DEP did not appeal that ruling. But when the trial court reached the same conclusion about the common law strict liability claim, DEP filed an interlocutory appeal, which the Appellate Division agreed to hear. Reversing the trial court, the appellate court held that the extension statute did apply, such that DEP’s strict liability claim was not time-barred.

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In February and May of 2011, the New Jersey legislature induced identical bills in the Senate (S 2722) and Assembly (A3915) to ban the manufacture and sale of products containing decabromodiphenyl ether (decaBDE). DecaBDEs are used in plastics for TV cabinets, consumer electronics, wire insulation, back coatings for draperies and upholstery. Growing concerns over the connection between decaBDEs and liver, thyroid and neurodevelopmental toxicity have lead a number of states, countries, as well as the European Union to institute bans.

Under the proposed legislation, the ban would go into effect on January 1, 2014, and apply to products containing more than 0.1% decaBDE, unless it is used for military or transportation purposes or is solely derived from recycled materials and used exclusively in electronic equipment. Sellers would have up to December 31, 2014 to sell off existing stock. Violations of the act would be an unlawful practice under the NJ Consumer Fraud Act, N.J.S.A 56:8-1 et seq., carrying a penalty of $10,000 for the first offense and up to $20,000 for subsequent violations.

Washington was the first state to implement a ban on decaBDE products, joined by several others, including Oregon, Maine, Vermont and Maryland. In addition, in December 2009, EPA negotiated phaseout commitments from three companies responsible for most of the decaDBEs sold or imported into the United States who agreed to end all uses of the chemical by December 2013.

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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.

As a result USEPA’s recent “Federal Programs Guide” is a welcome reminder of the federal resources that may be available to assist brownfield redevelopment projects. This comprehensive guidebook provides an agency-by-agency survey of brownfield-related initiatives. EPA’s guidebook also presents a valuable primer on tax credits and favorable tax treatment for brownfield remediation.

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The Eighth Circuit recently addressed an issue which the United States Supreme Court expressly side-stepped in 2007 when it decided United States v. Atlantic Research Corp., 551 U.S. 128 (2007). In Atlantic Research, the Court left open the question whether potentially responsible parties that incur response costs pursuant to an administrative consent order or a judicially approved consent decree may pursue a cost recovery claim under §107 of CERCLA, §113 of CERCLA or both sections.

In Atlantic Research, the Supreme Court held that ARC, a private party that had incurred response costs, could bring suit under §107 of CERCLA because it had “voluntarily” incurred response costs to remediate its property. It also recognized that the costs of reimbursement paid pursuant to a legal judgment or settlement are recoverable only under §113(f) of CERCLA. The Court refused to classify other response costs that did not fit either of these categories, declining to decide whether response costs incurred pursuant to a consent decree could be recovered under §107, §113(f) or both sections of CERCLA.

This issue left open by the U. S. Supreme Court in 2007 was recently ruled upon by the Eight Circuit in Morrison Enterprises, LLC v. Dravo Corporation, No. 10-1468 (April 5, 2011, 8th Cir.). Morrison and the City of Hastings, Nebraska sued Dravo Corporation under §107 of CERCLA to recover response costs that they had incurred responding to contaminated groundwater at the Site. In 1991 and again in 1996, Morrison had entered into Administrative Orders on Consent with EPA to operate a groundwater extraction and treatment system, which began operating in 1997. Morrison also entered into a consent decree regarding the operation of the groundwater extraction and treatment system.

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The New Jersey Department of Environmental Protection (“NJDEP”) launched a new e-permitting program that will allow the public to apply on-line for certain coastal permits. The program is consistent with the Governor’s “Common Sense Principles” outlined in Executive Order No. 2 which focused on the need to reduce the high costs and regulatory burdens that are thought to impede growth and opportunity in the State of New Jersey.

The program will compliment NJDEP’s existing on-line permit application systems for its air, water and underground storage tank cleanup programs. Property owners may now apply for two types of general permits on-line: a GP-14 permit for in-kind bulkhead replacements and a GP-19 permit for dock replacements in artificially constructed lagoons. The process simply requires the applicant to answer a short list of questions and to certify to the truthfulness of those answers. Based on the applicant’s responses, the program will approve or reject the permit.

The new program is expected to vastly streamline the existing permit process, which currently may take up to three months for a response. Automating the permit process also frees up valuable NJDEP resources.

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For the first time, the LexisNexis Environmental Law & Climate Change Community has honored a select group of blogs that they believe set the online standard for the practice area. This Real Property & Environmental Law Alert is among those they named in their 50 Top Environmental and Climate Change Blogs for 2011.

According to LexisNexis, "The Top 50 Blogs for the Environmental Law & Climate Change Community recognizes preeminent thought leaders in the blogosphere and creates an invaluable content aggregate for all segments of the environmental law and climate change practice. Most good blogs provide frequent posts on timely topics, but the authors in this year’s collective take their blogs to a different level by providing insightful commentary that demonstrates how blogs can—and do—impact the practice of environmental and climate change law."

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Last month, the Environmental Protection Agency published a notice  for “Public Comment on the Development of Final Guidance for Evaluating the Vapor Intrusion to Indoor Air Pathway From Contaminated Groundwater and Soils (Subsurface Vapor Intrusion Guidance)” in the Federal Register. The draft of the Subsurface Vapor Intrusion Guidance was initially released for comment during 2002 and the EPA is planning on issuing final guidance by November 20, 2012.

More recently, the EPA published a Review of the Draft 2002 Subsurface Vapor Intrusion Guidance which summarized portions of the 2002 guidance requiring update. In general, the EPA noted the observed complexity and variables impacting the migration of volatile organic compounds since issuance of the initial 2002 guidance.

Comments must be submitted to the EPA by May 14, 2011. However, the EPA anticipates making another draft of the guidance available for public comment during the Spring of 2012.

David A. Brooks is Counsel to the Gibbons Real Property & Environmental Department.

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Susanne Peticolas, a Director in the Gibbons Real Property & Environmental Department, was the Dinner Speaker at the April meeting of the Institute for Supply Management - New Jersey, Inc. on April 13, 2011. She addressed the issue of greenwashing, unjustifiable product claims of being environmentally sensitive and strategies to help companies avoid the problem.

Ms. Peticolas explained that sustainability has become an increasingly important corporate aspiration in the face of global warming concerns and the U.S. commitment to reduce greenhouse gases under the Copenhagen Accords. Among common corporate sustainability practices is buying “green” products from “green” vendors. Although there are some third party independent verification systems, such as Energy Star, Forest Stewardship Council, and LEED, much of the green marketplace operates on a caveat emptor basis. The proposed Green Guides published by the Federal Trade Commission in October 2010, offer guidance on what kind of eco-friendly claims are appropriate. The Guides are a useful tool, backed by the FTC’s enforcement powers, and provide some check on the marketplace, but cannot substitute for a savvy and informed purchasing manager.

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The Audit Committee of the New Jersey Department of Environmental Protection’s Site Remediation Professional Licensing Board is soliciting comments on its draft process and questionnaire for the completion of statutorily required audits of the work of Licensed Site Remediation Professionals (LSRPs). The Committee is accepting comments until April 18, 2011. The Board intends to finalize the process and questionnaire at its May 2, 2011 meeting.

The New Jersey Site Remediation Reform Act created the Board to oversee the work of LSRPs. Under the statute, each year the Board must audit the submissions and conduct of at least 10% of all LSRPs. The audits will serve as a first step for gathering information on LSRP submissions and on their compliance with the statute’s code of conduct for LSRPs. The draft process and questionnaire can be found on the Board’s website.

Comments should be submitted by 5:00 p.m. on April 18, 2011 via e-mail to karen.hershey@dep.state.nj.us or via mail to:

Site Remediation Professional Licensing Board
c/o New Jersey Department of Environmental Protection/Site Remediation Program
Office of Assistant Commissioner
PO Box 420; Mailcode 401-06
401 East State Street
Trenton, New Jersey 08625-0420
Attn: Audit Committee

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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The City of Yonkers, New York, under a December 21. 2010 Consent Agreement (“Agreement”) with the United States Environmental Protection Agency (“EPA”), has initiated a recycling program to properly handle its residents’ spent fluorescent light bulbs.

An EPA inspection of various Yonkers buildings in 2008 led to a City citation for violating the Resource Conservation and Recovery Act (“RCRA”), which governs the storage, treatment, and disposal of hazardous waste. Under RCRA, mercury-containing bulbs, such as fluorescent bulbs, must be handled as hazardous waste and, therefore, must be disposed of in a special licensed facility. Alternatively, if the bulbs are properly recycled they can be handled under universal waste rules, which greatly simplifies the accounting of their disposal and lifts other federal requirements.

Under the Code of Federal Regulations, a Small Quantity Universal Waste Handler accumulates less than 5,000kg of universal waste on site at any one time whereas a Large Quantity Universal Waste Handler accumulates 5,000kg of universal waste or more on site at any one time. 5,000kg is roughly the equivalent of 18,000 4’ linear T12 fluorescent bulbs or 27,000 4’ linear T8 fluorescent bulbs. The City of Yonkers is defined under the Agreement as a Small Quantity Generator, that is, a generator of less than 1,000kg of universal waste per month. This is roughly the equivalent of 3,600 4’ T12 fluorescent bulbs or 5,400 4’ linear T8 fluorescent bulbs.

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One of the problems with electric cars (EVs) is - what do you do when the battery runs down? Currently there are 500 charging stations in the United States and 400 of them are in California. In an attempt to address the dead battery problem and encourage purchase of EVs, on March 21, 2011, the New Jersey State Senate introduced Bill S2784 (the “Bill”) which requires owners of shopping center developments to include charging stations. Under the Bill, owners of a “shopping center development” must equip not less than five (5%) percent of the parking spaces for the shopping center development with electric vehicle charging stations. Moreover, such stations must be available for use during the hours of operation of the shopping center development.

The term “shopping center development” is defined by the Bill as “a privately owned and operated commercial development that is or is to be owned and managed as a unit consisting of a building or series of buildings on a common site together with adjacent parking area of no less than 100 parking spaces to which the public is invited.”

The Bill proposes that shopping center owners can recoup “costs of compliance” with the Bill by imposing charges on motorists for EV charging . Therefore, shopping center owners will be required under the Bill to erect signage stating the price per unit of time, unit of voltage, or other measure of usage, as determined by the New Jersey Board of Public Utilities (the “BPU”) to be charged to the motorist for such service. No shopping center owner would be permitted to sell electricity at a price that exceeds the maximum amount per unit set by the BPU. Under the Bill, the BPU is directed to adopt standards for a schedule of prices. A comment period and public hearing on the schedule of prices is required to be held by the BPU before the per unit price is set.

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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.

However, in Dimant the Appellate Division reminded all potential plaintiffs seeking to impose liability for clean-up costs on former owners or operators that they must meet their burden by coming forward with a preponderance of the evidence sufficient to prove a “nexus” between the defendant and the discharge as well as connecting the damages to the contamination. Although plaintiffs may resort to circumstantial evidence and experts, any break in the chain of connections between a defendant and the discharge or the discharge and the alleged contamination (or the contamination and the plaintiff’s damages) should be fatal after Dimant.

Dimant involved the dry cleaning solvent perchloroethylene (PCE) which had impacted over 350 acres of groundwater in and around Bound Brook. Although there were no less than three dry cleaners in the neighborhood (each of which had several owners and operators), as well as two or three other possible sources of PCE, NJDEP’s investigations eventually focused on only one relatively short term operator of one of the dry cleaners. Using a combination of inspection reports that confirmed the presence of discharge pipes in and around dry cleaning operations, and sampling data, NJDEP’s expert concluded that one particular operator was the “primary source” of the groundwater contamination. However, the trial court took a critical look at the alleged connections between this dry cleaner’s operations and the PCE discharge as well as the nexus between any potential discharge and the probability that it caused such extensive contamination. After a non-jury trial, the court found that NJDEP failed to prove its case primarily because its expert failed to address the presence of older, weathered PCE which pre-dated defendant’s activities. NJDEP’s expert was further faulted for the failure to consider other possible sources of the PCE. Indeed, reading between the lines it appears that NJDEP probably cobbled together sufficient evidence to prove that defendant’s operations resulted in minor discharges into a paved parking area. However, it also appears that NJDEP utterly failed to establish that defendant’s discharge was of sufficient volume or duration to have permeated the pavement and entered the groundwater and then caused the contamination. Thus, the chain of connections between the dry cleaning operations and the contaminated groundwater was broken.

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The other shoe dropped on February 28 in the closely watched CERCLA case involving PCB contamination of the Fox River in Wisconsin. District Judge William C. Griesbach, who had previously ruled that the paper companies that made and discharged PCBs to the river could not seek contribution from recycling mills that unknowingly bought PCB-laden waste paper, called “broke,” and also discharged PCBs, held that those companies must reimburse those comparatively innocent companies for 100% of the costs they have incurred for most of the polluted river. But he held that it was too early to say whether the paper companies knew, and did, enough, to make them liable for “arranging for” disposal of the PCBs that ended up in the recycling mills’ discharges to an upstream stretch of the river.

In his recent decision, Judge Griesbach considered arguments concerning two separate stretches of the Fox River Superfund Site in Wisconsin, which the U.S. Environmental Protection Agency has divided into five operable units (OUs). The plaintiff paper companies discharged PCBs into OU2, and the PCBs flowed downstream to OUs 3,4, and 5. The recycling mills discharged PCBs to all five OUs, including OU1, which is upstream from all of the others. (Another decision in the Fox River case was the subject of an earlier blog post.

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Today, the New Jersey Department of Environmental Protection (NJDEP) published a proposed rule outlining circumstances in which the department would consider a waiver of environmental regulations that stand in the way of economic development. NJDEP will be holding a hearing on the proposed rule on April 14, 2011, at 3:00 pm.

The rule follows the Governor’s “Common Sense Principles” outlined in Executive Order No. 2 which focused on the need to reduce the high costs and regulatory burdens that are thought to impede growth and opportunity in the State of New Jersey.

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On February 17, 2011, the Assembly unanimously adopted bill A 2722. The bill, which is intended to implement some of the findings of the Red Tape Review Group, would amend the Administrative Procedures Act and provide administrative law judges (“ALJs”) with more tools to streamline contested administrative law cases. Interestingly, however, the bill would also strip the Commissioners of the New Jersey Department of Environmental Protection (“DEP”) and Department of Community Affairs (“DCA”), as well as some others, of their power to review, modify, or reject ALJs’ decisions in contested cases.

Currently, once a contested case is forwarded by the department to the Office of Administrative Law, the case is assigned to an ALJ, and a trial-like hearing is held. Upon completion of the hearing, the ALJ issues a report and decision with recommended findings of fact and conclusions of law. The department head (i.e. Commissioner of the DEP) then has 45 days to adopt, reject, or modify the recommended report and decision before the decision becomes final.

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For the first time, the LexisNexis Environmental Law & Climate Change Community is honoring a select group of blogs that they believe set the online standard for the practice area. This Real Property & Environmental Law Alert is among the nominees.

According to LexisNexis, they selected the nominees based on timely topics, quality writing, frequent posts and that certain something 'extra' that keeps a web audience coming back for more. They described our blog as follows:

“A rotating group of contributors writes about transactional real estate, development and redevelopment, and environmental law. Although there is some focus on developments in New Jersey, New York, Philadelphia and Delaware, the content is also national in scope.”

Readers are invited to comment and support their favorite nominees. We urge you to click here and give us your support for this blog and our postings. The deadline for comments is February 28, 2011.

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Jennifer M. Porter, Esq., an Associate in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program, SEQRA, on Thursday, March 10, 2011, in Latham, New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on regulatory requirements, the integration of SEQRA with the project review process, cumulative impacts and segmentation and the benefits and uses of a generic environmental impact statement. Ms. Porter will be part of the afternoon panel and will be discussing SEQRA litigation issues including the statute of limitations, standing to sue, defending or attacking negative declarations and procedural and substantive judicial review.

The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

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One perennial criticism leveled at the Department of Environmental Protection (“NJDEP”) is that it takes too long to issue permits. There have been a long list of initiatives intended to ensure that the NJDEP makes permit decisions which are predictable and timely. Indeed, Commissioner Martin has repeatedly commented on the need to ensure that NJDEP perform efficiently and focus on servicing all stakeholders - including applicants, and included this goal in his 2010 Vision Statement for the department. At long last, NJDEP appears to be taking concrete steps to implement efficiencies in the permit process. On January 27, 2011, NJDEP announced that it would begin to tackle this problem by changing the way it processes the most common land-use permits for contaminated sites and landfill closures.

Effective February 1, 2011, applications for land use permits such as Freshwater Wetlands, Flood Hazard and CAFRA will be processed by a special unit within the Site Remediation Group. The Office of Dredging and Sediment Technology has dealt with many of these issues over the years and will now process all land use permits for remediation projects ranging from site clean-up to landfill closure.

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Experienced New Jersey developers and land use attorneys understand the challenges that face an applicant when the proposed use is not expressly permitted in the municipality’s zoning district where the subject property is located. The challenge is only more complicated if the proposed use involves novel or unfamiliar technology such as renewable energy. However, in New Jersey, the government has been proactive in welcoming renewable energy projects through grants and legislation, making New Jersey definitely the place to be if you want to develop property geared towards the creation of a renewable energy facility powered by solar or wind.

The New Jersey Municipal Land Use Law (“MLUL”) has shed a ray of sunshine onthose developers who wish to construct a solar or wind renewable energy facility. Developers of a solar or wind renewable energy facility must be aware of N.J.S.A. 40:55D-66.11. This section of the MLUL expressly holds that a municipality must permit as-of-right the construction of a renewable energy facility when the subject property is located in one of the municipality’s industrial districts. The only conditions being that the property (or properties) be: (1) comprised of 20 or more contiguous acres; and (2) under common ownership. The statute defines “renewable energy facility” as a “facility that engages in the production of electric energy from solar technologies, photovoltaic technologies, or wind energy.”

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As more and more business owners and homeowners in New Jersey take advantage of the incentives available to build and maintain solar energy systems and solar panels, it’s important that such investments be protected from unwanted disputes with neighbors. A little known New Jersey statute may be able to help.

Recent statistics on New Jersey’s Clean Energy Program website indicate that New Jersey is the fastest growing market for solar power in the United States, and has the largest number of solar panel installations, second only to California, where neighborly disputes over trees blocking solar panels, solar panels impairing views, causing glare and other general nuisance claims are becoming more and more common. To avoid the same pitfalls in New Jersey, those installing solar panels should take advantage of New Jersey’s Solar Easements Act (N.J.S.A. 46:3-24, et. seq.), on the books since 1978.

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On January 13, 2011, the New Jersey Department of Environmental Protection’s Site Remediation Program will release new and updated forms for use by those conducting site investigations and cleanups. The forms -- which already number in the dozens -- must be used when information is submitted to the Program, and were developed pursuant to the requirements of the Site Remediation Reform Act. Interested parties will be able to see the new and updated forms by visiting a dedicated webpage, scrolling down or clicking on “Current Forms,” and noting the version and date for each form.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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The New Jersey Department of Environmental Protection is seeking input from all interested stakeholders as it develops proposed revisions to three separate sets of regulations that govern site cleanups: the Administrative Requirements for the Remediation of Contaminated Sites (“ARRCS”) rules,which were drafted to implement the Site Remediation Reform Act; the regulations covering cleanups under the Industrial Site Recovery Act (“ISRA”); and the rules for cleanups involving underground storage tanks. NJDEP’s call for public input represents an unusual opportunity to affect the agency’s plans as the proposals are being drafted. Three members of the Gibbons Environmental Team have already published a detailed analysis of important issues raised by NJDEP’s working drafts.

The stakeholder process is designed to incorporate the views and concerns of important segments of the public into the redesign of the regulations to make them consistent with the SRRA-created Licensed Site Remedial Professional (“LSRP”) program by the statutory deadline of May 2012. NJDEP anticipates publishing a formal proposal for revising the regulations in May 2011.

A dedicated page on NJDEP’s website includes links to working drafts of the revisions, as well as instructions on how to submit comments. Comments must be submitted by January 14, 2011 in an e-mail to SRRA@dep.state.nj.us with a subject line that reads “Stakeholder Input.”

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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Institutional controls, regulatory limits on human activity at a site, go by many names. The Department of Defense uses the term “land use controls.” ASTM E2091-00 has elected to use the phase “activity and use limitations.” Traditional real estate lawyers often think in terms of “covenants” or “easements.” Here in New Jersey, the Site Remediation Program uses the term “Deed Notice,” while the Freshwater Wetlands Permit Program has adopted the term “Conservation Restriction or Easement,” N.J.A.C. 7:7A-1.4. Whatever name they go by, institutional controls are intended to regulate human behavior and are used to supplement environmental remediation efforts by reducing the risk of unintended exposure to residual contamination. As a result, institutional controls are critical to the redevelopment of contaminated real estate and cost-effective clean-ups.

There is an ongoing debate over the effectiveness of institutional controls. Regulators, responsible parties and environmental practitioners are increasingly aware of the costs and challenges of using institutional controls. EPA’s Office of Solid Waste and Emergency Response has recently issued a preliminary draft second in what is intended to be a series of guidance documents governing the use institutional controls. EPA is soliciting public comment on this interim guidance document.

EPA’s November 2010 Interim Final Draft is entitled “Institutional Controls: A Guide to Planning, Implementing, Maintaining and Enforcing Institutional Controls at Contaminated Sites.” This document outlines EPA policy regarding institutional controls. The guidance document also presents a discussion of long-term site “stewardship” and enforcement options. EPA, like its state counterparts, is increasing focused on enforcement issues.

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On Monday December 6, 2010, New Jersey’s first black bear hunt in five years opened. It lasted for six days, coinciding with the annual deer hunt. An attempt to enjoin the hunt filed by Animal Protection League of New Jersey, the Bear Education and Resource Group and two individuals was rejected on Friday by the New Jersey Appellate Division in a per curiam decision that found that the appellants failed to meet the legal requisites for a stay. An emergent application to the New Jersey Supreme Court on Saturday also was unsuccessful.

The New Jersey Department of Environmental Protection (“NJDEP”) estimates that the black bear population in northern New Jersey is around 3,400. The hunt was expected to reduce the population by 250-700 animals. On the first day of the hunt, 264 bears were taken, the largest one-day tally in the hunt’s history. By the end of the hunt, 589 bears had been harvested.

NJDEP determined that a controlled hunt was a necessary component of its Comprehensive Black Bear Management Policy, which was developed to manage the bear population and reduce bear-human conflict. According to the Division of Fish and Wildlife, between January 1 and July 20, 2010, bears have been responsible for one attack on a person, three unprovoked attacks on dogs, 26 livestock kills, 23 attempted home entries, 27 successful home entries, 3 vehicle entries, 74 vehicle strikes, 13 aggressive behavior incidents, 526 nuisance incidents and 301 garbage raids, as well as 548 sightings. In addition to a controlled hunt, the Policy incorporates education, the continuation of ongoing research and population monitoring, appropriate non-lethal control measures, and investigation of all viable population control methods.

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After over a year since its creation, the nature of New Jersey’s Licensed Site Remediation Professional (LSRP) is still unclear. The program, signed into law in May 2009, removes the responsibility for oversight of clean-ups of contaminated sites from the New Jersey Department of Environmental Protection (NJDEP) to a cadre of licensed privately paid professionals. NJDEP will retain direct oversight of more complex sites and will resume direct oversight of LSRP sites under certain circumstances. It will take some time for the kinks in the program to be worked out. Depending on who you speak to, the view of what the LSRP is differs.

When the idea was first proposed, the environmental groups were convinced that the LSRP would be the proverbial “fox in the henhouse.” The concern was based on the fact that the LSRP is selected and paid by the responsible party - the polluter - in the view of these groups. The LSRP decides what needs to be done, how to do it, how much money will be needed to assure the clean-up and when the clean-up is finished. The final “sign off,” the Response Action Outcome (“RAO”) is issued by the LSRP. The RAO gives the responsible party a covenant not to sue by the NJDEP with respect to the property which was remediated.

In December of 2009, Jeff Tittel, Executive Director of New Jersey Sierra Club complained, “The LSRP program is much worse than the fox guarding the henhouse. It’s the fox building the henhouse and certifying that it’s safe.”

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For a real estate developer in New Jersey, it seems that there is no “repose” when it comes to the finality of land use approvals. Repose you ask? While the word may garner images of warm weather days at poolside, a developer can only think of repose as the day the appeal period expires on hard-won land use approvals, especially after facing objecting citizens at multiple hearings.

Under New Jersey’s Municipal Land Use Law (MLUL), land use approvals can be appealed within 45 days of a publication of a Notice of Decision in the town’s ordinance designated “official” newspaper. Under the MLUL, the developer is responsible to publish the Decision unless the town’s ordinance directs otherwise. The date of first publication starts the 45 day appeal period. On that 46th day following publication, the appeal period expires and “repose” commences, and the approval has become final and unappealable. A developer can then move forward with its project, secure in the knowledge that repose has begun ... or not.

Last week, the New Jersey Supreme Court heard arguments in Hopewell Valley Citizens' Group v. Berwind Property Group Development Co. where a Hopewell Township citizens group with a long list of environmental concerns about Berwind’s extensive office project petitioned the Court to exercise its discretion to extend the appeal period by a mere six days. In support, the Citizens argued that they filed their appeal timely, if only Hopewell Twp. had verbally advised them of the correct date of publication of the Notice of Decision. So much for repose!

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Roman lawyers were timed by water clocks which they realized could be slowed by the addition of dirt or sand and thereby gaining more time to argue. Hence lawyers are often cited for “muddying the waters.” In the case challenging the US Environmental Protection Agency’s stormwater rules for construction sites, it is the court that has muddied the waters. By holding the suit in abeyance, but keeping the problematic standard in place, the Seventh Circuit Court of Appeals has managed to confuse all of the parties.

The USEPA issued construction stormwater rules in December 2009, which were immediately challenged by the National Association of Home Builders and Wisconsin Builders Association in the Seventh Circuit as concerns the numeric turbidity value. The rules were scheduled to go into effect on February 1, 2010. EPA then filed an unopposed motion to vacate the numeric limitation pending a study to issue a new rule in November 2012. The Seventh Circuit essentially denied the motion as to vacating the numeric turbidity standard but apparently agreed to hold the suit in abeyance until February 2012 by granting the EPA’s motion “to the extent that the case is remanded to the EPA for further proceedings.” Thus, the numeric limitation stands: it is enforceable even though EPA has admitted in its brief that the process by which it was developed was flawed. A truly muddy situation.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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On Wednesday evening, October 19, 2010, the New Jersey Business and Industry Association (NJBIA) presented its annual "Awards For Excellence" to eleven New Jersey businesses for laudable Business Expansion, Environmental Quality, as Outstanding Employers, and for Public Service. Gibbons P.C. was amongst four companies honored for Public Service, joining two Gibbons clients, Peloton Advantage, LLC, the winner of the Business Expansion Award, and Hall’s Warehouse Corp., honored with a NJ Businesses Environmental Quality Award.

The "Gibbons Cares" community outreach initiative was recognized with a Public Service Award for its support of five focus areas: women in transition, fellowships fostering leadership in the next generation of New Jersey minority students, the City of Newark and its institutions, the needs of New Jersey food banks and the support of charities assisting Gibbons’ extended "family."

Peloton Advantage, LLC serves the pharmaceutical, biotech and medical device industries by providing publication planning, medical content development and sales training services. Peloton’s "good news" business experience is that it has experienced dramatic and rapid expansion in both numbers of employees, with a 428% increase, and in revenues, up 386% over the last five year period.

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How can the New Jersey Department of Environmental Protection (NJDEP) be improved? The agency released two different perspectives on that question over the past few weeks: a “top-down” view in the form of a “Transformation Plan” for reforming NJDEP, and a “bottom-up” view in the form of a compilation of hundreds of complaints and suggestions from NJDEP employees.

The NJDEP Transformation Plan released on October 7 announces the agency’s commitment to “making fundamental changes in how we function and in how we think about what we do daily.” Drawing on NJDEP’s new Vision Statement and a set of agency-wide priorities established by Commissioner Bob Martin, the Transformation Plan sets forth an ambitious program for changing both how NJDEP does its job -- changing its “business processes,” in the words of the plan -- and the substance of its policies. Underlying all three documents is a belief that environmental protection and economic growth can and must go hand in hand. Indeed, among the four “mission critical” priorities for NJDEP, the Transformation Plan lists “[s]upporting economic development of the State’s economy.”

Less sweeping in its verbiage but equally revealing about the agency is a set of over 700 complaints and suggestions from NJDEP employees released on October 14. The compilation, arranged by program area, ranges from the mundane (problems with telephones) to the far-reaching (frustration with enforcement policies). The survey provides an interesting glimpse into the internal workings of NJDEP at the staff level, where any agency-wide transformation would have to take root. The administration’s decision to make the compilation public may be an effort to show the public that support for changing NJDEP is not limited to management or political appointees but is shared by the rank and file.

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Jennifer M. Porter, Esq., an Associate in the Gibbons Real Property & Environmental Department, will be a speaker at Lorman’s New York CLE Program, SEQRA, on Tuesday, December 7, 2010 in Carle Place, New York.

The all-day program will provide a comprehensive overview of New York’s State Environmental Quality Review Act (SEQRA) including specific discussion on analysis framework and techniques, mitigation measures, interaction with other statutes and emerging fields in environmental review. Ms. Porter will open the seminar by discussing SEQRA basics including state and local SEQRA regulations, process and procedures, agencies and decisions subject to SEQRA, determining significance and environmental impact statement (EIS) preparation and review.

The program is particularly timely in view of New York Department of Environmental Conservation’s recent and long overdue release of the latest edition of the State Environmental Quality Review Act Handbook. The program is designed for attorneys, engineers, architects, city and county planners, environmental professionals, presidents, vice presidents, water resource specialists, public works directors, surveyors and project managers. For more information and to register for the program, click here.

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On October 15, the United States Environmental Protection Agency (“USEPA”) released a draft plan addressing its RE Powering Americas Land Initiative. The Initiative is designed to encourage development of renewable energy projects on current and formerly contaminated land and mine sites. The plan focuses on providing useful resources for communities, developers, industry, state and local governments or anyone interested in reusing such sites for renewable energy development.

The tools on the USEPA website include mapping and fact sheets for sites where USEPA and the U.S. Department of Energy National Renewable Energy Lab are analyzing the potential for wind, solar, or small hydro development. The mapping tool provides USEPA’s site name and identification information, the program managing the site; a link to the site's cleanup status information; and specific acreage and renewable energy resource information. Another interactive map offers information on the various federal and state incentives available for such projects.

As part of the plan, USEPA will reach out to prospective developers and investors though meetings and webinars. The first such webinar is scheduled for October 21, 2010, at 3:00 pm EDT. It will provide an overview of how siting renewable energy on brownfields benefits communities and how local governments can strategically plan for renewable energy siting on contaminated sites. Speakers will discuss their experiences on siting renewable energy project on contaminated sites, including challenges and advantages associated with using contaminated land.

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Irv Freilich and Susanne Peticolas, Directors in Gibbons Real Property & Environmental Department, will be panelists at ABA’s upcoming Regional CLE Workshop on October 27, 2010, titled "The Road Ahead: The Obstacles and Pitfalls to New Jersey’s Implementation of the LSRP Program" at Seton Hall Law School. For more information or to register for the program, click here.

The program will feature interactive panels composed of nationally known environmental lawyers, in-house counsel and consultants who will discuss the details and implications of New Jersey’s Site Remediation Reform Act (SRRA), and in particular the newly minted Licensed Site Remediation Professional (LSRP) program. The impact of the LSRP program on environmental practitioners will be far reaching and extraordinary. From the manner in which environmental consultants will be retained and site investigations and clean-ups accomplished, to the ethical, work product and litigation considerations counsel will need to evaluate and address, the LSRP Program represents a sea-change in the way environmental counsel will practice their trade in the years to come.

The program has already dramatically changed the relationship between the environmental consultant and the client and raised the specter of frivolous suits from disgruntled clients. In addition, NJ Department of Environmental Protection has had to propose revisions to the SRRA interim rules relaxing certain remediation deadlines. These developments highlight the complex issues presented by the transition of New Jersey’s site remediation process from NJDEP command and control to private oversight by LSRPs and underscore the need to keep abreast of a rapidly developing area.

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It is difficult for a defendant to avoid a claim by invoking the doctrine of waiver, which requires proof of a clear, unequivocal act showing that the plaintiff deliberately intended to relinquish a known legal right. It is doubly difficult when the plaintiff is the State of New Jersey, against which the application of the doctrine is, in the words of a leading Supreme Court case, to be “most strictly limited.” But thanks to not just one, but two documents clearly showing such an intent -- including one from the deputy attorney general on the case -- a federal district judge recently held that the State had waived its right to seek natural resource damages at a site in Franklin Township.

 It Never Hurts to Ask

In New Jersey Department of Environmental Protection v. FMC Corporation, Civ. No. 01-0476 (D.N.J. Sept. 29,. 2010), District Judge Dennis M. Cavanaugh granted summary judgment in favor of FMC Corporation on a claim for natural resource damages (NRDs) asserted by the New Jersey Department of Environmental Protection (NJDEP) and the Administrator of the State’s Spill Compensation Fund. The site in question has been the subject of investigations, cleanup, lawsuits, and settlement negotiations going back to the 1980s. During one set of those settlement negotiations, FMC, which had already spent more than $6 million in cleanup costs, contacted the Attorney General’s office in an attempt to determine the full extent of its potential exposure at the site. The news from the State’s lawyers was good: according to a memorandum from the assessment coordinator at NJDEP’s Office of Natural Resource Restoration, NJDEP would not assess injuries to natural resources at the site because groundwater contamination did not extend beyond the site’s boundaries, and NJDEP policy then in effect was to exclude such groundwater contamination from NRD assessments.

As settlement negotiations continued, FMC in 2003 sought more information from the Attorney General’s office, including a copy of the NJDEP memorandum. In reply, the deputy attorney general provided the memorandum, which she described as “explaining why no natural resource damages are being assessed at this site. In the meantime, a new administration had taken office at the beginning of 2003. Under the new McGreevey administration, NJDEP policy changed, such that on-site groundwater contamination was no longer excluded from NRD assessments, at least in the context of settlement negotiations. That new policy was later memorialized in a September 2003 policy directive.

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All of us are intrigued by the concept of utilizing a clean, renewable energy source to generate abundant and cheap power for our homes and businesses. Some of us have even investigated installing a renewable energy system, but have come away disappointed due to onerous regulatory obstacles and the high cost associated with these installations. That is, unless you are looking into installing a solar energy power facility in New Jersey.

We explored the business case for solar energy in a recent article published by the Association of Corporate Counsel New Jersey Chapter. In addition, on August 19, 2010, Gibbons sponsored a solar energy conference in Woodbridge, NJ, attended by over 500 business owners, senior executives and industry representatives.

Douglas J. Janacek is a Director in the Gibbons Real Property and Environmental Department. Nancy A. Lottinville, Counsel to the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

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As discussed in a recent post, beaches have a way of generating difficult cases about when land-use regulations result in a compensable “taking” of property. A new opinion from the New Jersey Supreme Court reminds us that things can be just as complicated when the government takes beachfront property the old-fashioned way, via eminent domain. In City of Long Branch v. Liu, the Court held that the condemning municipality did not have to compensate the owner for land that was created by a government-funded beach replenishment project and appeared to expand the original parcel.

An Eminent Domain Case -- With a Twist

Under a redevelopment plan adopted in 1996, Long Branch sought to acquire an oceanfront parcel owned by Jui Yung Liu and Elizabeth Liu. The parties could not agree on a price, so in 2001 the city filed a complaint to take the property via eminent domain. The complaint used a property description from the Lius’ 1977 deed, which noted that the property extended to the mean high water mark.

So far, it’s a routine eminent domain action. But the Lius’ property -- or at least what they thought was their property -- had changed quite a bit in the intervening years. In the 1990s, the federal, state, and local governments had conducted a multi-million dollar beach replenishment program to protect shore communities. For two weeks, the Army Corps of Engineers dumped sand along the shoreline where the Luis’ property faced the Atlantic Ocean. As a result, dry sand now extended an additional 225 feet seaward of the mean high water mark described in the 1977 deed. In all, the project created more than two acres of dry sand. The Luis claimed title to the new land, and moved to amend the city’s complaint. Both the trial court and the Appellate Division rejected their request, and the Supreme Court granted certification to consider whether the Lius were entitled to compensation for the land created by the beach replenishment project.

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On October 4, 2010, the New Jersey Department of Environmental Protection (NJDEP) formally proposed revisions to the Site Remediation Reform Act’s (SRRA) interim rules. The revisions impact two important components of the interim rules: remediation deadlines and vapor intrusion investigations. These technical amendments are based upon stakeholder input and are intended to reduce the burden on the regulated community and New Jersey’s newly minted Licensed Site Remediation Professionals (LSRPs). The rule proposal appeared in the New Jersey Register on October 4, 2010 and can be viewed online. Comments can be submitted until December 3, 2010.

When adopting the SRRA, the New Jersey Legislature created a special enforcement mechanism called “direct oversight.” When a site, phase of the clean-up process or condition at the site warrants “direct oversight,” all of the key decisions - especially remedy selection - are made by NJDEP. In direct oversight the responsible party simply pays the bills - NJDEP makes the decisions. The SRRA also provides that when the responsible party misses a remediation milestone, then NJDEP must exercise direct oversight. N.J.S.A. 58:10C-27.

NJDEP’s pending rule proposal relaxes three important remediation milestones established by the interim rules. N.J.A.C. 7:26C-3.3.:

• the deadline for submitting preliminary assessment reports,
• the deadline for immediate environmental concern source control,
• and the deadline for installing free product removal technology at sites containing non-aqueous phase liquids, (generally to March 1, 2011 at the earliest).

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Owners of land subject to the 2004 Highlands Water Protection and Planning Act (Highlands Act) who preserve their land under the Green Acres Program or the State Farmland Preservation Program will benefit from special appraisal rules for five more years, thanks to legislation signed into law by Governor Christie on September 9. Under the “dual appraisal” provision, which expired last year but has now been extended to 2014, landowners receive two appraisals -- one based on current property value, and one based on pre-Highlands Act zoning and other restrictions -- and the higher appraisal is used as the basis for negotiation with the State on the appropriate payment.

According to a report released in August by the Highlands Council, nearly 300,000 acres of open space and farmland in the Highlands Region, or one-third of its total area, are already preserved. Preservation will also receive a major boost beginning next year when additional funds are generated from a $400 million land preservation bond issue approved by voters last year.

Both the extension of the “dual appraisal” provision and the availability of new preservation funding should enhance Highlands land preservation efforts in the coming years. Landowners who are concerned about the effect of the Highlands Act on the value of their property may want to investigate the potential benefits of various land preservation options.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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With the advent of New Jersey’s LSRP program comes an added financial benefit for environmental remediation matters requiring a remediation funding source (“RFS”). There is an opportunity to save on the statutory annual 1% surcharge on an RFS, especially useful for those sites subject to the requirements of the Industrial Site Recovery Act.

Among the new remediation requirements in the Administrative Requirements for the Remediation of Contaminated Sites, N.J.A.C. 7:26C (“ARRCS”) is an annual remediation cost review to be submitted to the NJDEP on a Remediation Cost Review Form. N.J.A.C. 7:26C-5.10. For new sites subject to the LSRP program and for older sites that have opted-in to the LSRP program, the form must be certified by the site’s LSRP.

Based on the revised cost of the remediation developed in conjunction with the annual review (though this can also be done at other times as well), the person required to establish it, may reduce the amount of the RFS upon submission of the remediation cost review form to the NJDEP. N.J.A.C. 7:26C-5.11. So long as its certified by the LSRP, there is no need to obtain NJDEP approval of an RFS reduction. Of course, such a reduction is ultimately subject to the NJDEP’s broad rights of review of all documents and submissions. N.J.S.A. 58:10C-21. Thus, if the RFS is reduced by the LSRP, then, the 1% RFS surcharge required by 7:26C-5.9 will accordingly be reduced. In addition, to the extent the cost of the RFS itself is driven by the amount (such as with letters of credit), there will be further cost savings. For those sites subject to an ISRA Remediation Agreement with high initial remediation cost estimates that have not been reviewed recently, there may be an opportunity for a substantial cost savings.

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A bill that would add the Port District of the Port Authority of New York and New Jersey to the definition of “wind energy zones” in the newly adopted Offshore Wind Economic Development Act, was reported out of the Senate Budge and Appropriations Committee on September 13, 2010. The amendment would allow tax credits for qualified wind energy facilities in the Port District.

The Port District encompasses an area within a radius of about 25 miles of the Statue of Liberty. According to the committee statement, the bill would not affect the total amount of tax credits available for wind energy facilities. Of course, the addition of another wind energy zone could reduce the amount of tax credits available for other wind energy facilities.

There are currently three offshore wind projects underway off the coast of New Jersey.

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With energy costs high and the focus on combating global warming, there is an impetus toward encouraging the development of Green Buildings. Buildings account for 39% of the total energy usage in the U.S., two thirds of the electricity consumption and 1/8 of the water usage. Building codes, setting minimum standards for construction, now include standards for energy efficiency. Green Codes are creeping in.

New Jersey’s Energy Subcode requires that a building permit applicant show compliance as part of the application. This code applies to low-rise residential and commercial buildings Under the Energy Code Compliance and Residential Prescriptive Packages, see N.J.A.C. 5:23-2.15(f)1.vi and N.J.A.C. 5:23-3.18. Compliance must be with the Energy Subcode and the 2006 International Energy Conservation Code (IECC) plus 20%. These are energy efficient standards for cooling and heating.

New York State has its Energy Conservation Construction Code of 2007 which is based on the 2004 IECC standards. This code becomes effective in December 2010. Pennsylvania has adopted Alternative Residential Energy Provisions 2009 based on 2009 IECC standards.

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If you are a NJ-based entity, do you have a power plant in the works? Are you thinking about a Combined Heat and Power (CHP) plant? If so, the New Jersey Economic Development Authority (NJEDA) has a grant for you if you act with alacrity. October 4, 2010, at 5:00 pm is the deadline for submitting an online solicitation for the competitive CHP grants. Grants are available for $450 per kW up to a maximum of $5 million per plant. All forms are available online.

It should be noted that grants cannot exceed 50% of the project. Upgrade projects are available for funding. However, the projects cannot come online before January 1, 2011, but must begin before September 30, 2011. And of course, the projects must be located in New Jersey.

The application fee is $500 with a closing fee of 1% of the approved grant. There are other fees and there are numerous eligibility requirements which should be checked carefully.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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On September 2, 2010, Americans for Prosperity staged a rally in front of the Atlantic County Utilities Authority windmills to protest against offshore wind turbines as a waste of taxpayer money. Ironically, according to the ACUA, its five wind turbines save it $600,000 a year in electricity bills.

The protest comes less than one month after Governor Christie signed the Offshore Wind Economic Development Act into law. The Offshore Wind Economic Development Act establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to come from offshore wind energy. New Jersey hopes that the new law will spur economic development and job growth in the state. 

There are currently three offshore wind projects underway off the coast of New Jersey.

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A standing-room only audience of more than 500 business owners, senior executives and industry representatives throughout the state attended a conference on August 19, sponsored by Gibbons P.C. and EisnerAmper LLP - Solar Energy for New Jersey Businesses, Developing & Financing Your Own On-Site Solar Facility - at the Woodbridge Hilton in Iselin, NJ.

The program (as covered by NJBIZ) featured elected officials, state representatives, and industry executives, who discussed the state of solar energy projects for business and other organizations in New Jersey - the second most active state for solar power installations and the seventh for venture capital investments in clean energy projects.

Speaking about real estate and development considerations affecting solar facility design and installation, Douglas Janacek, Co-Chair of the Gibbons Real Property & Environmental Department, emphasized the widespread desire of stakeholders to see construction of alternative energy facilities. In New Jersey, Mr. Janacek noted that there are a myriad of opportunities to locate solar facilities not just on new sites, but also existing, developed sites of all types and sizes.

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The compliance deadline for EPA’s 2008 lead paint rule, requiring contractors engaged in renovations of pre-1978 residences, schools and childcare facilities to be certified by April 22, 2010 was extended in June of this year in response to industry and congressional outcry. The reprieve was not sufficient for everyone. On July 8, the National Association of Home Builders, joined by other industry groups, filed suit against EPA seeking review of the final rule. In particular, they challenged EPA’s removal of the opt-out provision from the final rule.

As originally drafted, the rule provided for opting out of the lead paint rules for homes where there were no children under the age of 6 years. In the final version, the opt-out provision has been removed. According to NAHB Chairman Bob Jones,

About 79 million homes are affected, even though EPA estimates that only 38 million homes contain lead-based paint. Removing the opt-out provision extends the rule to consumers who need no protection.

The additional requirements for lead safety add an average of $2,400 to a project. Apparently EPA changed the rule without any new scientific data indicating a need. In a tight economy, it seems counterproductive to increase the cost of renovations without a clear benefit.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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It has been almost two decades since the last edition of the State Environmental Quality Review Act (SEQR) Handbook was released by the New York State Department of Environmental Conservation’s (NYSDEC) Division of Environmental Permits. Despite significant amendments to the SEQR regulations, 6 NYCRR Part 617 in January 1996 and tens of hundreds of cases of distinction on SEQR substance and procedure, many land use and environmental practitioners have been left to fend for themselves without up-to-date technical regulatory guidance from NYSDEC until now.

For those who are unfamiliar with the SEQR Handbook, it is a practical reference guide for agencies, project sponsors and the public with respect to the procedures prescribed by the State Environmental Quality Review Act. It has a user-friendly table of contents and each topic in the handbook is addressed through question and answer format. The questions range from basic information such as “What is the Environmental Notice Bulletin (ENB)?” to “How should a generic environmental impact statement (EIS) address required content differently than a site or project specific EIS?” In addition, the handbook provides a roadmap of the Part 617 SEQR Regulations before and after the 1996 Amendments and several helpful charts including one which shows all of the relevant steps in the SEQR process, the number of calendar days in which those steps must be addressed and provides citations to the section of the regulations that govern each step. Although not available in hard copy, a .pdf version of the SEQR Handbook is available for download or printing from NYSDEC’s website. Get your copy today by clicking here.

Jennifer M. Porter is an Associate in the Gibbons Real Property and Environmental Department.

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On August 19, 2010, just over two months after identical bills were introduced in the NJ Assembly and Senate, Governor Chris Christie signed the Offshore Wind Economic Development Act into law. By creating offshore wind renewable energy credits and financial assistance to qualified projects, it is hoped that the new law will spur economic development and job growth in the state.

The new law establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to come from offshore wind energy. The New Jersey Board of Public Utilities will be authorized to accept and approve applications for qualified offshore wind projects. The New Jersey Economic Development Authority will have the authority to provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembly facilities in the state.

The new law represents another step in implementing the energy policy outlined by the governor on April 20, 2010, making renewable energy a key component of New Jersey’s strategy for economic recovery and growth.

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A recently enacted New Jersey law encourages the use of solar energy by allowing solar panels to be excluded from the computation of impervious coverage when determining whether a development project complies with impervious coverage limitations. The new law, P.L.2010, c.4 , amends the Pinelands Protection Act, Coastal Area Facility Review Act, Highlands Water Protection and Planning Act, County Planning Act, Waterfront Development Law, and Municipal Land Use Law, as well as laws pertaining to the conversion of age-restricted community developments.

In each of these laws, the amendment defines a solar panel as “an elevated panel or plate, or a canopy or array thereof, that captures and converts solar radiation to produce power, and includes flat plate, focusing solar collectors, or photovoltaic solar cells and excludes the base or foundation of the panel, plate, canopy, or array.” Any solar panel meeting that definition can be excluded when computing impervious coverage.

The new solar panel law is just one of the initiatives which encourages the use of solar and other green energy sources. As recently reported on this blog in a post titled New Jersey Proposes Addition of Solar Power Facilities to its Green Initiative, identical bills, Senate S2126 and Assembly A3139, are pending before their respective house of the New Jersey’s legislature and would amend the MLUL to provide that Solar and Wind Energy Generation Facilities, when installed on the sites of former landfills, quarries and other extractive industries, are permitted uses. If the proposal is enacted, this status would be equally applicable to both public and private sites where landfills, quarries or other extractive industries are closed or closing.

Clearly, New Jersey is serious about alternative energy and is working legislatively to make it a reality.

Howard D. Geneslaw is a Director in the Gibbons Real Property & Environmental Department.

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Despite the new licensing program for environmental consultants in New Jersey, they still remain open to professional tort claims without the necessity of an affidavit of merit. As required by N.J.S.A. 2A:53A-27, a plaintiff making a claim for malpractice or negligence against a “licensed person” must provide an, “affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice, or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.”

Fifteen different types of “licensed persons” are subject to this requirement. N.J.S.A. 2A:53A-26. However, “licensed person” does not include “environmental consultants” broadly, though environmental engineers, licensed pursuant to N.J.S.A. 45:8-27, do fall within the definition of “licensed persons.” Those environmental consultants who are geologists by education and training and/or in the past, licensed pursuant to the requirements of the Underground Storage Tank Certification Program, N.J.S.A. 58:10A-24.1-8, are not included within the definition of “licensed person.”

In establishing Licensed Site Remediation Professionals (“LSRP”) in the Site Remediation Reform Act, N.J.S.A. 58:10C-1 et seq., the legislature did not add LSRP’s to the definition of “Licensed Person” for purposes of compliance with New Jersey’s affidavit of merit statute. Perhaps the issue is the mandate of the LSRP to, first and foremost, protect the “public health and safety and the environment,” N.J.S.A. 58:10C-16, as opposed to first serving the interest of their clients, though requiring an affidavit of merit does not appear to be inconsistent with such broad goals. In any event, LSRP’s must be aware that this new license alone does not appear to afford them the potential protections from frivolous law suits afforded by the affidavit of merit statute.

David A. Brooks is an Associate in the Gibbons Real Property and Environmental Department.

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New Jersey’s Natural Resource Damage (“NRD”) program is cobbled together from an aging policy directive issued in 2003, an Appellate Division decision, NJDEP v. Exxon Mobil Corporation, [393 N.J. Super 388 (App. Div. 2007)] and a handful of lower court rulings on various and sundry motions. There is no specific enabling statute and the agency has never adopted any formal regulations. In short, it’s the type of program which is bound to leave the regulators, the regulated community (and the lawyers who advise them) with plenty of questions. Because there are no clear rules, New Jersey’s NRD program has generated a significant amount of litigation.

A July 26, 2010 ruling issued by the Middlesex County Superior Court following a ten day trial indicates that New Jersey’s approach to NRDs might be in for some careful scrutiny. Of course, a trial court’s findings have limited value as precedent. Nevertheless, the recent ruling in NJ Dept. of Environ. Protection v. Essex Chemical can only be viewed as a disaster for the present ad hoc approach to NRDs favored by the New Jersey Department of Environmental Protection.

In this case, New Jersey’s experts were left without the presumption that usually flows from following duly promulgated rules. Without this presumption New Jersey’s experts were unable to meet their burden and the plaintiff simply failed to prove its case. This is the second time New Jersey has stumbled at the expert proof phase of an NRD case. It is especially noteworthy that the trial judge rejected a modified Resource Equivalency Analysis proposed by New Jersey’s experts. New Jersey is attempting to use this novel method in several other cases and the state may now be forced to change course.

New Jersey’s NRD program is both novel and evolving. So it is hardly surprising that when issues come before the courts, the state and its experts will have good days and bad days. They recently had a very bad day.

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Believe it or not, in the 30 years of recorded decisions under CERCLA, the issue of who is an “owner” has not been decided, according to the Ninth Circuit Court of Appeals in California v. Hearthside Residential Corp., case number 09-55389 (Decided July 22, 2010).

CERCLA Section 107(a)(1) imposes liability on the current "owner and operator of a . . . facility." 42 U.S.C. § 9607(a)(1). In the Hearthside case, Hearthside Residential Corporation ("Hearthside") sold the property in question before the State of California sued it for reimbursement of clean-up costs. The Ninth Circuit determined that ownership for the purposes of CERCLA liability must be determined at the time of cleanup. The Court distinguished United States v. Fleet Factors Corp., 901 F.2d 1550, 1554 (11th Cir. 1990), abrogation on other grounds by statute recognized in Monarch Tile, Inc. v. City of Florence, 212 F.3d 1219, 1221 n.2 (11th Cir. 2000) by noting that Fleet Factors did not decide the temporal feature of when one is an owner for CERCLA liability. Other courts have interpreted the Fleet Factors case to impose owner liability on a party that owned or operated the facility at the time of the filing of the complaint. The Ninth Circuit noted that the Fourth and Sixth Circuits, while not squarely deciding the issue, in dicta suggested that the liable owner was an owner at the time of remediation or cleanup.

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Judge Robert J. Bryan of the United States District Court for the Western District of Washington recently issued two opinions in United States v. Washington State Department of Transportation that could have significant implications on the scope and extent of liability under the Comprehensive, Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §9601 et seq., particularly at urban river sites and harbors. Both decisions examine the liability of the Washington State Department of Transportation (“WSDOT”) at the Commencement Bay/Nearshore Tidelands Superfund Site.

In one opinion, decided on June 7, 2010, Judge Bryan examined WSDOT’s liability as an arranger under §107(a)(3) because it had designed, constructed and operated drainage systems intended to collect highway runoff which drained into nearby water bodies. In the second opinion, decided one month later on July 7, 2010, WSDOT’s potential liability was examined as an owner and operator under §§107(a)(1) and (2) of CERCLA because of its ownership of property near the Thea Foss and Wheeler Osgood Waterways, which are located within the Commencement Bay Site.

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Solar and Wind Energy Generation facilities may soon join the category of uses designated as permitted of right by New Jersey statute rather than by individual municipal ordinance, thus preempting municipal zoning powers granted under the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. (MLUL).

Identical Bills, Senate S2126 and Assembly A3139 are pending before their respective house of the New Jersey’s legislature and would amend the MLUL to provide that Solar and or Wind Energy Generation Facilities, when installed on the sites of former landfills, quarries and other extractive industries, are permitted uses. This status would be equally applicable to both public and private sites where landfills, quarries or other extractive industries are closed or closing.

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Last year, the Appellate Division in TAC Associates v. NJDEP, 408 N.J. Super. 117 (App. Div. 2009) had held that an applicant under the NJ Brownfield Innocent Party Grant, N.J.S.A. 58:10B-5, need not be a landowner at the time of application for such grant. In so ruling, the Appellate Division invalidated NJDEP regulations that imposed an ownership requirement, a requirement absent from the underlying statute.

In January of 2010, the legislature amended the Act to require that the landowner must acquire the property before 1983 and own it until application is made for a grant and the application is granted. On July 15, 2010, the New Jersey Supreme Court reversed the Appellate Division in TAC, holding that the “after the fact” amendment by the legislature clarified the intent of the legislation which the NJDEP gleaned in issuing its regulations.

Justice Rivera-Soto, in dissent, criticized the ruling,

The unvarnished and ugly truth is that, recognizing their error, defendants [NJDEP and NJEDA] scurried -- four years after the fact, six and one-half months after their position had been rebuffed by the Appellate Division, and while this appeal was pending before this Court -- to have the Legislature ratify rules defendants adopted that plainly exceeded the original statutory mandate.

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This summer, the long shadow cast by the oil rig blow-out in the Gulf of Mexico seems to be everywhere. For example, we recently reported that EPA has written to Congress endorsing the concept of reinstating the Superfund tax which expired back in 1995. Thus, it was only a matter of time before New Jersey got into the act.

On July 15, 2010, the Senate Environment and Energy Committee in Trenton took up S-2108. If adopted in its present form this bill would raise the limit on liability pursuant to the New Jersey Spill Compensation and Control Act from $50 million to $1 billion.

It is easy to question the necessity of increasing the limit on Spill Act liability. After all, the Spill Fund is used primarily to address contamination from land based facilities. If New Jersey were to experience an event where the total damages could exceed $50 million there is already overlapping state and federal authority under CERCLA, RCRA and the Oil Pollution Act of 1990.

It remains to be seen whether this sort of legislative reaction to a long hot summer of bad news from the Gulf will resonate with the new business friendly administration in Trenton. But it is already clear that the events in the Gulf have reached Trenton.

*Photo courtesy of EPA.

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On June 21, 2010, EPA sent a letter to Congress supporting the reinstatement of the Superfund tax which expired on December 31, 1995. EPA believes that the tax will provide a “stable, dedicated source of revenue ... and increase the pace of Superfund cleanup.” According to EPA, it would also ensure that the parties who manufactured or sold the substances that are being cleaned-up at hazardous waste sites - and not the taxpayers - would bear the cost of cleanup when responsible parties cannot be identified. EPA states that the taxes are needed to ensure that the “polluter pays” for the Superfund program.

Since 1995, the Superfund program has been financed largely from transfers from the country’s general revenue funds. The EPA would like to reinstate the taxes for a 10 year period beginning in January 2011, in the same manner as they were last in effect on crude oil, imported petroleum products, and imported substances that use hazardous chemicals as feedstock.

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On July 6, 2010, the USEPA proposed a new interstate transport of ozone and fine particulate rule for power plants. The goal of the rule is to achieve by 2014 a 72% reduction of sulfur dioxide (SO₂) and a 54% reduction of oxides of nitrogen (NOx) from 2005 levels.

The tri state area, like most of the states east of the Mississippi, is covered by this rule for both fine particulates and ozone. The sulfur and nitrogen oxides are fine particulates in the air.

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A long time in coming, but certainly below the radar screen, is the implementation of the EPA rule issued in 2008 requiring contractors engaged in renovations to be certified in handling lead based paint that may be present in homes, child care facilities and schools built before 1978. Certainly many of the buildings built before that time may well have lead based paint in them since it was not specifically prohibited until that date. However, many manufacturers moved long before 1978 to remove lead from their paint.

The rule applies to all trades engaged in renovation. Many trades can expose lead based paint, from the plumber to the electrician who may cut through walls where there may be lead based paint. Accordingly many contractors were unaware that the law applied to them and failed to obtain certification. A mad scramble for certification in the face of an April 22, 2010, deadline, together with industry outcry, led the Senate to introduce and pass a bill requiring EPA to delay implementation of the rule.

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On June 9, 2010, USEPA announced that data centers will be eligible to earn the Energy Star label. The data center must be in the top 25% of its peers in energy efficiency as measured by EPA’s energy performance scale, the Power Usage Effectiveness metric.

Unlike the Energy Star program for consumer appliances which relies on self-reporting, the Energy Star program for data centers requires a licensed professional to independently verify the energy performance of the building and sign and seal the application document that is sent to EPA for review and approval. Such data centers, which account for approximately 1.5% of electricity consumption, will be able to save money and energy and fight climate change. Moreover, with the increase in demand for “green” vendors by federal, state and local governmental agencies and corporations, a data center with an Energy Star label would have a competitive advantage in seeking such customers.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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In less than a month, the New Jersey legislature introduced and passed S-2036, the “Offshore Wind Economic Development Act." Both the NJ Senate and the Assembly passed the Senate version on June 28, 2010. This swift action quickly followed NJ’s joining a 10-state Atlantic OffShore Wind Consortium.

The bill establishes an offshore wind renewable energy certificate program that will require a percentage of electricity sold in NJ to be from offshore wind energy. The New Jersey Board of Public Utilities will be authorized to accept and approve applications for qualified offshore wind projects. The New Jersey Economic Development Authority will have the authority to provide financial assistance to qualified offshore wind projects and associated equipment manufacturers and assembly facilities in the state.

Concerns about potential environmental impacts have been soothed by the conclusions of a two year study led by New Jersey Department of Environmental Protection and announced in draft form on June 18, 2010. The study surveyed bird species, marine mammals, sea turtles and fish off the NJ coast and assessed the likely impact from the construction, operation and decommissioning of an offshore wind farm. The final report will provide the necessary data to screen sites, estimate potential impacts on sea animals and mitigation. NJDEP Commissioner Martin noted, “We now have the science and data needed to take the first steps towards making wind energy projects a reality for New Jersey. It puts us in the forefront environmentally, while also providing New Jersey with a great economic boost from jobs that will be created by this new green industry.” The final report is expected to be released in July.

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On June 8, 2010, Governor Chris Christie joined nine East Coast state governors in signing a Memorandum of Understanding with the U.S. Department of the Interior, which creates the Atlantic Offshore Wind Energy Consortium. The consortium is intended to foster federal-state cooperation for commercial wind development on the Outer Continental Shelf off the Atlantic coast.

According to U.S. Secretary of the Interior, Ken Salazar, wind could supply 20% of the nation’s electricity needs by 2030 and create a quarter of a million jobs.

New Jersey DEP Commissioner Bob Martin stated, “It opens the door of economic opportunity, allowing us to lure companies that manufacture the components of wind turbines, creating green jobs to harness the power of nature and provide our resident with a renewable energy supply.”

In a May 1, 2010, article, Abby Gruen of the Star Ledger, reports on 3 offshore wind projects currently underway off the coast of New Jersey, including a 20 megawatt project proposed for 3 miles off the coast of N.J. She notes that there is little opposition to wind energy in NJ in contrast to Massachusetts, where local opposition threatens its first offshore project.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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New Jersey is pressing forward with its efforts to privatize the site remediation process. Since adoption of the Site Remediation Reform Act (SRRA) in May 2009, there has been a steady stream of new regulations, new guidance documents and revised forms. Because of these changes, practitioners must constantly check the New Jersey Department of Environmental Protection’s website.

As part of the SRRA, the Legislature directed NJDEP to develop a remedial priority system. This system will combine readily available information about site specific characteristics and contamination with public data about receptors to develop a risk index. (This process should sound familiar to anyone who has worked with EPA’s Hazard Ranking System outlined in its complex Final Rule.)

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On June 8, 2010, in Westport Insurance Co. v. Appleton Papers, Inc., the Wisconsin Court of Appeals for the First District held that two insurers, namely Munich Re Ag and Westport Insurance Co., are liable each for $5 million dollars to compensate Appleton Papers, Inc. (Appleton) for cleaning up the sediment contamination in the Fox River. The Fox River is undergoing a cleanup pursuant to oversight by the United States Environmental Protection Agency.

Appleton acquired assets of National Cash Register Inc. (NCR) during the l950’s and later, NCR manufactured carbonless paper using PCBs (polychlorinated biphynols). The Fox River became polluted with PCBs, a suspected carcinogenic substance. Appleton had sued nine insurers but settled with seven. The remaining two filed the appeal decided by the Wisconsin Court of Appeals in a 2 to 1 decision. Among the issues raised on appeal was whether the insurers were responsible for “after-acquired liability,” namely liability that Appleton acquired along with NCR assets after the policy periods in question expired. The insurers also asserted that Appleton had made voluntary payments not covered by the policies and that notice to the insurers was late, excusing coverage.

While the case was decided under Wisconsin state law, it bears significance to USEPA led river cleanups here in New Jersey. At present the USEPA has entered into a consent decree with 73 potentially responsible parties to conduct a remedial investigation and feasibility study of the Lower Passaic River, a seventeen mile stretch of the estuarine portion of the Passaic River. Presumably parties potentially responsible for sediment contamination in the Passaic will be scrutinizing both their old insurance policies for possible coverage and this decision for legal authority.

Passaic River, Newark, NJ. Photo courtesy of EPA.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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On April 19, EPA announced awards of a total of nearly $80 million in grants to communities across the country to support the assessment, cleanup, and redevelopment of brownfield sites. Twelve of the grants, totalling $2.3 million, will go to New Jersey communities, including Camden, Jersey City, Newark, and Trenton.

Content for this blog post is authored by the Gibbons Real Property & Environmental Department.

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The Federal Power Act (FPA), which gives the Federal Energy Regulatory Commission (FERC) jurisdiction over interstate electricity sales, requires that all wholesale electricity rates be “just and reasonable,” including rates set by contracts between suppliers and purchasers. In its latest decision in this area, in NRG Power Marketing, LLC v. Maine Public Utilities Commission, No. 08-674, 558 U.S. -- (January 13, 2010), the Supreme Court, by an 8-1 vote, extended a doctrine first developed more than fifty years ago and made it extremely difficult for those who were not parties to the contract -- even states -- to challenge contractually set rates in FERC proceedings.

The complete article, as published in In-Sites, can be viewed here.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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A bill introduced on March 8, 2010, by Assemblyman John J. Burchizelli, and voted out of the Assembly Regulatory Oversight and Gaming Committee would prohibit all State agencies from adopting -- or even proposing -- regulatory standards tighter than those imposed by the federal government, unless such action is specifically authorized by State law. The measure, Assembly Bill No. 2486, would greatly affect environmental regulation, where federal law often sets nationally applicable requirements, but does not preempt State requirements that go beyond the federal "floor." The bill does not define the key term "specifically authorized by State law." It would not apply to regulations in effect on the date of its enactment, or to the readoption of such regulations in the future.

Content for this blog post is authored by the Gibbons Real Property & Environmental Department.

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On March 3 the City Council of New York approved legislation designed to deter illegal dumping into the city's waterways. The measure increases the maximum penalty for illegally dumping such materials as dirt, sludge, acid, or any other "refuse matters" from $250 to $10,000 for a first violation and $20,000 for subsequent violations.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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The tables were turned in a case decided by the New York Court of Appeals on February 18. In a reversal of their usual roles, an upstate developer argued that its properties were contaminated, while the Department of Environmental Conservation (DEC) argued that the sites did not require remediation. The court agreed with the developer, and the result could mean significant tax credits for potential redevelopers of contaminated sites throughout the state.

The complete article, as published in In-Sites, can be viewed here.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department. Paul M. Hauge, an Associate in the Gibbons Real Property & Environmental Department, assisted in the preparation of this post.

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On February 1, 2010 all construction projects that are over one acre in size must comply with the United States Environmental Protection Agency rules that were published on December 1, 2009. Essentially, the new rules are deigned to control discharges from the construction site such as sediment, turbidity, nutrients and metals. See Final Rule at 74 Fed. Reg. 62,996, 63,0003-04, 63,032 (December 1, 2009). The rule is national in scope and to the extent a state’s regulations are not as demanding the federal standard must be met. Any new construction permits after February 1, 2010 to which the act applies musts comply with the federal standard.

The complete article, as published in In-Sites, can be viewed here.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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On February 16, 2010, U.S. EPA launched a new State and Local Climate and Energy website which provides technical assistance, analytical tools, and outreach support to state, local, and tribal governments.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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The United States officially notified the UN that it will abide by the emission reduction goal of the Copenhagen Accords. U.S. climate envoy Todd Stern submitted America's target to the U.N. Framework Convention on climate change as part of a January 31 deadline negotiated in Copenhagen last year. Thus the U.S. promised that it will reduce global warming pollution about 17% below 2005 levels in the next decade. In doing so, Stern made a point of noting that the final figure could change depending on the outcome of U.S. legislation.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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In response to prodding from institutional investors, on January 27, 2010, the U.S. Securities and Exchange Commission voted to provide companies with interpretive guidance on existing SEC disclosure requirements regarding the impact that business or legal developments related to climate change may have on its business. The interpretive guidance identifies four examples of where climate change may trigger disclosure requirements including the impact of legislation and regulation, the impact of international accords, the indirect consequences of regulation or business trends and the physical impacts of climate change.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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Without changing a single standard, NJDEP may have made it easier to comply with its many surface water, groundwater, drinking water, and soil remediation standards by compiling a useful on-line compendium of selected environmental standards. Standards can change, though, so the prudent developer, consultant, or attorney will check the New Jersey Administrative Code before making any decisions.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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The Real Property Association of Canada posted "green" lease forms for single building and multi-building projects. The forms address sustainability principles and objectives and enable landlords and tenants to establish sustainability targets for energy, water, indoor air quality, and recycling. The forms also have provisions that enable landlords to carry out "green" renovations to existing building stock, and anticipate and provide for both carbon offsetting by a landlord, and future carbon trading. Users can also register to receive updates on the forms.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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Rutgers’ Center for Green Building released New Jersey Green Home Remodeling Guidelines Version 1.0 during the New Jersey State League of Municipalities 94th Annual Conference in Atlantic City on November 20, 2009. The documentation details green building practices homeowners or remodeling professionals can incorporate into common home remodeling projects.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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The passage in 2009 of the Site Remediation Reform Act (SRRA) introduced a great deal of uncertainty into the site cleanup process. The procedures, paperwork, and terminology of the site cleanup process have changed. NJDEP has developed a web page to help the public to stay abreast of all SRRA developments, including information such as the new Administrative Requirements for the Remediation of Contaminated Sites (ARRCS Rules).

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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Governor Christie's Department of Environmental Protection Transition Subcommittee issued its Final Report on January 15, 2010. The Report calls for significant changes in policies and practices in order to meet three overarching goals: "1) accelerate improvements to the environment, 2) remove unnecessary obstacles to economic growth and 3) more effectively manage limited fiscal and human resources." In order to meet these goals, the report recommends establishing clear department goals and performance metrics; reforming the regulatory regime to ensure legal compliance, scientific support and consideration of economic impact; streamlining the permitting process for land use; continuing advances initiated by the Site Remediation Reform Act; and establishing a comprehensive and stratgic approach toward natural resource stewardship. The report made other recommendations related to enforcement policies, regulations, promotion of "green" projects and budget and operations. Woven among a number of recommendations is a call for improvements in technology to facilitate transparency and efficiency.

The recommendations are ambitious, calling for redesigning the NJDEP in a way that will attract business investment, while improving and protecting human health and New Jersey's environment.

Content for this blog post is authored by the Gibbons Real Property & Environmental Department.

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November 3 marked the launching of the Licensed Site Remediation Professional (“LSRP”) program in earnest. On that date, all new remediation projects in New Jersey must be performed under the supervision of an LSRP, a new type of environmental professional mandated by the Site Remediation and Reform Act (“SRRA”). L. 2009, c. 60, Sections 1-29 (codified at N.J.S.A. 58:10C-1 to -29).

The complete article, as published in New Jersey Law Journal, can be viewed here.

Susanne Peticolas is a Director in the Gibbons Real Property & Environmental Department.

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Since late June, when the House narrowly passed the American Clean Energy and Security Act of 2009, the loud and rancorous debate over health care may have obscured another critical issue being considered by Congress: climate change and the regulation of greenhouse gas emissions. Decisions made public on successive days in September by a federal appellate court and the U.S. Environmental Protection Agency (EPA), however, may go a long way toward making wide-ranging federal controls over greenhouse gas emissions a reality.

The complete article, as published in In-Sites, can be viewed here.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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A troika of decisions should send chills through the halls of many utilities and corporations. The first horse of the troika is the decision by the U.S. Supreme Court that says that the U.S. Environmental Protection Agency (EPA) has the authority to regulate greenhouses gases (GHG) under the Clean Air Act (CAA), 42 U.S.C. § 7401 et seq., and can be compelled to do so. The second horse is the decision by the Second Circuit granting states the power to abate GHG under the federal common law of public nuisance. The third horse is the decision by the Fifth Circuit that takes the final step and states that private citizens affected by global warming have the right to bring private nuisance suits.

The complete article, as published in In-Sites, can be viewed here.

John H. Klock is a Director in the Gibbons Real Property & Environmental Department.

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On September 30, just days after finalizing its new rule on mandatory reporting of greenhouse gas (GHG) emissions, EPA announced that it is proposing to use existing Clean Air Act provisions to limits such emissions from the largest sources of such emissions. The proposed rule, which focuses on sources that emit more than 25,000 tons of GHGs per year, would subject hundreds of new sources and modifications to existing sources to EPA review each year. In total, according to EPA, some 14,000 large sources would come under the proposed rule, which requires them to obtain operating permits that include limits on GHG emissions.

Administrator Lisa P. Jackson, Remarks to the 2nd Annual Governors’ Global Climate Summit.

Paul M. Hauge is an Associate in the Gibbons Real Property & Environmental Department.

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