The United States Court of Appeals for the Third Circuit recently handed down two noteworthy decisions on environmental liability under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). One involves the appropriate methodology for allocation of cleanup costs between two responsible parties based on equitable factors; the other involves whether a new owner of contaminated property is responsible for governmental response costs incurred prior to its purchase of the relevant property. Both set new precedent that should be of interest to the regulated community.
The State of New Jersey ratcheted up its environmental enforcement activities earlier this year with the filing of six lawsuits seeking to recover environmental damages, as we previously reported in There Is A New Sheriff In Town – State Files Six New Environmental Enforcement Cases. While we wait for these lawsuits to move forward, one question remains: If “there is a lesson in everything,” as a wise man once said, what lessons are to be learned from the filing of these suits?
The New Jersey Department of Environmental Protection (“NJDEP”) continues to take action on emerging contaminants, and, as of September 4th, adopted a maximum contaminant level (“MCL”) for perflourononanoic acid (“PFNA”) in drinking water. PFNA is not regulated at the federal level, and New Jersey is the first state to set an enforceable standard for PFNA in drinking water. The new MCL is 0.013 micrograms per liter, that is, 13 parts per trillion, an extraordinarily low level.
States are going to have a greater role in setting energy policy under the United States Environmental Protection Agency’s (“EPA”) proposed Affordable Clean Energy (“ACE”) Rule. EPA proposed the ACE Rule to replace the Obama Administration’s Clean Power Plan (“CPP”), which never took effect due to legal challenges. Unlike the CPP, where the EPA set standards and requirements for state plans, the newly proposed ACE Rule tasks the States with a larger role in pursuing clean power and addressing pollution from existing coal power plants, invoking mixed emotions from various sectors of the community.
Contaminated site remediation projects in New Jersey are governed by an assemblage of rules and regulations that implement the State’s environmental statutes. Just last week, the New Jersey Department of Environmental Protection (“NJDEP”) adopted amendments to a number of these rules. While the NJDEP has characterized the amendments as changes that will clarify the rules and further streamline the implementation of the site remediation program, there are a number of noteworthy revisions that modify existing remediation obligations and procedures.
Touting it as the “largest single-day environmental enforcement action in New Jersey in at least a decade,” the State yesterday filed six lawsuits seeking to recover cleanup costs, three of which also seek recovery of natural resource damages (“NRD”). The dramatic announcement yesterday left no doubt that the Murphy Administration’s approach to environmental enforcement will be markedly different than the essentially non-existent enforcement under the Christie Administration.
New case law suggests that environmental policies may be needed to fill widening gaps in the primary insurance held by most businesses (i.e., Commercial General Liability “CGL” policies). CGL policies typically contain a “pollution exclusion” that excludes coverage for losses relating to “pollutants,” and the definition of pollutants in standard CGL policies is extremely broad. In fact, a federal court of appeals recently held that storm water runoff qualifies as a pollutant, and, thus, no coverage exists under a CGL policy for damage relating to such runoff.
The litigation between the State of New Jersey and ExxonMobil over natural resource damages allegedly caused by former Exxon oil refineries in Bayonne and Linden appears to have come to a close earlier this year when the New Jersey Supreme Court rejected petitions filed by third parties challenging the State’s settlement of its claims against Exxon.
Over the past few years, a number of state agencies have begun to take steps to address emerging contaminants like per- and -polyfluororalkyl substances (“PFAS”) and 1,4 dioxane. Just this past January, we reported on our blog that the New Jersey Department of Environmental Protection (“NJDEP”) set the most stringent limits in the country for perfluorooctanoic acid (“PFOA”) and perfluorononanoic acid (“PFNA”) in drinking water and adopted a regulation that added PFNA to the List of Hazardous Substances under the New Jersey Spill Compensation and Control Act (See our January 30, 2018 Blog Article – NJDEP Takes Further Step In Regulating Emerging Contaminants).
Earlier this year, New Jersey passed legislation (Assembly Bill 1954) that changed the availability of certain funding to public and private entities under the Hazardous Discharge Site Remediation Fund (“HDSRF” or the “Fund”). The HDSRF program provides grants and loans to public entities and certain private entities that require financial assistance to investigate and remediate suspected or known contaminated sites.