14-Year Cleanup Is Not Unreasonable

14-Year Cleanup Is Not Unreasonable

The U.S. Court of Appeals for the Third Circuit recently affirmed a ruling that a seller of property did not breach its contractual or statutory cleanup obligations where its cleanup was not yet complete after 14 years.  Under a 1985 contract of sale, seller Essex Chemical Corp. ("Essex") assumed the responsibility for remediating the property and obtaining NJDEP's approval of the cleanup.  The cleanup, however, has been ongoing since 1985 and Essex has yet to obtain NJDEP approval.

The Third Circuit stated: "[w]hen boiled down to its essence, appellants' argument is that because the cleanup of the property has taken longer to finish than the parties originally anticipated, Essex has breached Paragraph 16 of the agreement as it has not completed the cleanup within a 'reasonable time.'  While it may be unfortunate that it has taken Essex an extended period of time to complete the cleanup of this property, the delay does not support a conclusion that the amount of time it already has spent is unreasonable given the nature of Essex's contractual obligation."

Although the court did not find the length of Essex's cleanup unreasonable, the court did state in a footnote:  "n view of our result appellees should understand that they do not have forever to complete the remediation and detoxification.  To the contrary, they must diligently pursue their efforts to obtain NJDEP approval within a reasonable time.  Of course, it is not our intention by making this point to invite further litigation.  We believe that if appellees are diligent in these efforts and keep appellants advised of the steps they are taking that the parties should be able to avoid additional judicial proceedings."  <I>Black Horse Lane Assoc. et al. v. Dow Chemical Corp. et al.</i>, No. 00-5031 (3d Cir. Sept. 20, 2000).