Lessons from NJDEP’s Recent Enforcement Actions

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 obvious lesson, and the one touted by the State, is: “If you pollute [New Jersey’s] natural resources, [the State is] going to make you pay.”   However, further reflection suggests that there are other lessons to be learned.

Lesson #1: New Jersey Will Broadly Distribute its Remediation Resources

While we do not know for certain how the NJDEP chose the six sites involved in its recent lawsuits, it seems that the State made a conscious effort to select sites that are spread across New Jersey.  One of the sites is situated in Atlantic County, two are situated in Middlesex County, two are situated in Essex County, and one is situated in Warren County.  As Attorney General Grewal said at his press conference on the filing of the recent suits: “The truth is that environmental pollution affects us all, North and South, rural and urban, rich and poor.”   This statement and the geographic distribution of the enforcement actions suggest that the State intends to clean up sites across New Jersey, and allocate its limited financial resources, without focusing on any specific region.

Lesson #2: New Jersey Prioritizes Sensitive Receptors

It also seems that the State focused its enforcement efforts on sites that impact sensitive receptors.  At least four of the six new actions involve a sensitive resource or population.  One action involves a former manufacturing facility in the Ironbound District of Newark, on which residential homes were subsequently built; a second involves another former manufacturing facility in the Ironbound, where a school was recently built; a third involves the former site of a manufactured gas plant near the Beach Thorofare waterway in Atlantic City; and a fourth involves a former petroleum refinery located on the Arthur Kill.  While the NJDEP has long focused its publicly funded remediation efforts on the protection of receptors, these lawsuits suggests that the State will also use the threat of future litigation as a tool to promote remediation that protects sensitive resources and populations.  Further, given that the State plans to file additional lawsuits, sites that impact sensitive receptors may be the next to receive a complaint.

Lesson #3: New Jersey May Impose Liability on an “Interim Owner”

In one of the recent lawsuits involving a former gas station in Fords, the State seeks to impose responsibility for historical contamination on an interim owner because it knew or should have known of contamination when it acquired the property and, therefore, did not qualify as an “innocent purchaser,” which is statutorily exempt from environmental liability.  As discussed in another article, The Impending Expansion of Interim Owner Environmental Liability, New Jersey courts previously seem to agreed that an interim owner (i.e., an entity that purchased property after it was contaminated, did not cause or contribute to the contamination, and has since sold the property to a new owner) is exempt from liability for pre-existing contamination.  See, e.g., White Oak Funding, Inc. v. Winning, 341 N.J. Super. 294, 300-01 (App. Div.), certif. denied 170 N.J. 209 (2001).  In the recent lawsuit, the State does not allege that the interim owner caused or contributed to the contamination, but it does allege that the interim owner was unjustly enriched by the remediation of the property with public funds during the time it owned the property.  If the State is successful in imposing liability on an interim owner because of its failure to qualify as an innocent purchaser, this will represent a significant expansion of liability under the New Jersey Spill Compensation and Control Act.

Conclusion

The regulated community will continue to look for lessons in the State’s ongoing environmental enforcement activities, and there are likely to be many lessons in the coming months, whether as a result of the progress of the above litigation or new lawsuits brought under Governor Phil Murphy’s aggressive environmental enforcement policy.

For more information, please contact the author Matthew A. Karmel at mkarmel@riker.com  or any attorney in our Environmental Practice Group.