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

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

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

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

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

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

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

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

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

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

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

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

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

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

It is universally recognized that the 2009 Site Remediation Reform Act (SRRA) completely overhauled the process of site remediation in New Jersey. Less obvious, perhaps, was how the new statute could affect contractual cleanup obligations in agreements that predate SRRA’s enactment. In 89 Water Street Associates LLC v. Reilly, the Appellate Division held that the language of a purchase-and-sale agreement from 2004 required the seller to meet all of the requirements of the later-enacted statute, even if the cleanup takes much longer, and costs much more, than originally envisioned. The saga begins in 2004, when the plaintiff entered into a contract to purchase an industrial property in Bridgeton from the defendant’s predecessors in interest. The owner had already been through one remediation process, having obtained a “no further action” letter (NFA) from the New Jersey Department of Environmental Protection (NJDEP) under the Industrial Site Recovery Act (ISRA) (then known as the Environmental Cleanup Responsibility Act). The owner leased the site to a company (NRI) that he controlled in 1984. Fast forward twenty years, when the parties entered into a contract to transfer the property for $475,000. The agreement set a closing date, which could be extended by six months, but...

New Jersey Enacts Changes to Landmark 2009 Site Remediation Reform Act

New Jersey Enacts Changes to Landmark 2009 Site Remediation Reform Act

In 2009, in the face of a significant backlog of sites that were stuck in the Department of Environmental Protection (DEP) pipeline, the New Jersey Legislature dramatically changed the process of site remediation in the Garden State with the enactment of the Site Remediation Reform Act (SRRA). The SRRA partially outsourced DEP’s review role by authorizing “private” oversight of cleanups by Licensed Site Remediation Professionals (LSRPs). On August 23, 2019, Governor Murphy signed new legislation that made further adjustments to the changes wrought by the SRRA. The legislation (L. 2019, c. 263), which sailed through both legislative chambers without a single opposing vote, makes a number of changes to the LSRP program, as well as other changes affecting parties responsible for conducting remediation projects. Amendments Affecting LSRPs Removal of unoccupied structures from list of areas that must be addressed as an “immediate environmental concern.” Expansion of LSRP duties to report immediate environmental concerns and previously unreported discharges. A slight relaxation of licensing requirements for individuals who may have temporarily left the work force for personal reasons. Clarification of prior acts and punishments that will disqualify a person from obtaining an LSRP license. Tightening of LSRPs’ oversight responsibilities to ensure that...

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

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

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

N.J. Appellate Division: Both Parties Were Ineligible for Public Entity Cleanup Grant Where Private Party Conducting Remediation for County’s Benefit Was Not County’s Redeveloper or Agent

N.J. Appellate Division: Both Parties Were Ineligible for Public Entity Cleanup Grant Where Private Party Conducting Remediation for County’s Benefit Was Not County’s Redeveloper or Agent

For purposes of obtaining financial assistance from the State, cleaning up environmental contamination for a governmental body’s benefit is not the same as cleaning it up on behalf of the government as its formal designee. That is the hard lesson that a former landowner learned in the New Jersey Appellate Division’s August 29, 2018 decision in In re Hazardous Discharge Site Remediation Fund Public Entity Grant Application for Remedial Investigation and Remedial Action. When Barry Rosengarten contracted to sell a parcel of land in Perth Amboy to Middlesex County for use as open space, he agreed to remediate environmental contamination, and the County escrowed monies from the sale to be released to Mr. Rosengarten as he performed the cleanup. The County also agreed to cooperate in seeking State grants that could offset those costs and thus reduce Mr. Rosengarten’s net cleanup expenses. Through Mr. Rosengarten’s counsel, the County applied to the New Jersey Department of Environmental Protection (NJDEP) for either a Brownfield Development Area Grant or a 75% Recreation and Conservation Grant. NJDEP denied the application after finding that the County was not performing the cleanup and that the contract did not provide that Mr. Rosengarten was doing the work...

Superfund Task Force Listening Session on Recommendation 16-2, Part 2: Improving Implementation of Cleanup Agreements for Response Actions by PRPs

Superfund Task Force Listening Session on Recommendation 16-2, Part 2: Improving Implementation of Cleanup Agreements for Response Actions by PRPs

On June 18, 2018, the United States Environmental Protection Agency’s (“EPA”) held the last of eight listening sessions on the recommendations of its Superfund Task Force. This last listening session concerned Part 2 of Recommendation 16-2018, which calls for improvement in the process of implementing cleanup agreements under which potentially responsible parties (PRPs) commit to carry out site cleanups under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). EPA speakers included Ellen Stern (Office of Regional Counsel, Region 10), Ken Patterson (Office of Site Remediation Enforcement (OSRE), Douglas Dixon (OSRE), and Charles Howland (Office of Regional Counsel, Region 3). They noted a number of reasons for delays in the completion of cleanups under such agreements, ranging from the submission of multiple versions of the same deliverable and time-consuming dispute resolution procedures to lax (or, conversely, excessively stringent) enforcement of deadlines and imposition of stipulated penalties. They also acknowledged EPA’s reluctance to exercise its most extreme enforcement tool – taking over the work and using financial assurance established by the PRPs. Outside participants called on EPA to expand the number of PRPs that are called upon to perform cleanups (including municipalities) to reduce the financial burden on any one PRP. The Superfund...

New Jersey Appellate Division Upholds $225 Million NJDEP Settlement With Exxon Mobil for Natural Resource Damages

New Jersey Appellate Division Upholds $225 Million NJDEP Settlement With Exxon Mobil for Natural Resource Damages

In 2004, the New Jersey Department of Environmental Protection (NJDEP) sued Exxon Mobil Corporation under the Spill Act to recover natural resource damages (NRDs) for the Bayway refinery in Linden and another facility in Bayonne. Fourteen years later, New Jersey’s Appellate Division has upheld a consent judgment, entered by Judge Michael J. Hogan after a sixty-day bench trial, that settled NJDEP’s claims at the Bayway and Bayonne sites as well as 16 other Exxon facilities (including a terminal in Paulsboro) and over 1,000 retail gas stations, in exchange for a record payment of $225 million. In addition to the validity of the consent judgment itself, the case presented a number of important procedural questions regarding the ability of the non-party appellants – here, State Senator Raymond Lesniak and several environmental organizations – to participate in the litigation and to appeal from the trial court’s entry of the consent judgment. First, the Court upheld the trial court’s refusal to permit Senator Lesniak and the environmental groups to intervene in the case (either as of right or permissively) to argue against the settlement, holding for the first time in a reported decision that a putative intervenor must have standing, and that even under...