Environmental UPDATE March 2006

Vapor Intrusion: A New Frontier For Site Remediation

The New Jersey Department of Environmental Protection ("NJDEP") has recently taken steps to address the issue of vapor intrusion at certain contaminated sites in the state. Vapor intrusion is defined as the "migration of volatile chemicals from the subsurface into overlying buildings." While the potential for intrusion of vapors into indoor air from subsurface contamination has been known for some time, recognition of the pathway as a potential driver in the remediation process as well as for human health risk exposure is fairly recent. Experience with radon, a naturally occurring substance, heightened awareness of this exposure pathway some years ago and led to a growing recognition of the significance of inhalation exposure to toxic substances, not just in the workplace or as a result of traditional air emissions.

The vapor intrusion pathway results in exposure through inhalation to humans who occupy the buildings, which may be a more significant risk than through ingestion, since it is theorized that contaminants are absorbed more quickly through inhalation. Moreover, if in the air, humans are more likely to come into contact with the contaminants, since people cannot choose to selectively stop breathing and must breathe the air around them; there are no viable alternatives to breathing the air in a person's immediate vicinity. Unlike when a potable well is impacted and an alternative source of drinking water (bottled or city water) can be provided, if the air is impacted, there are no appropriate controls to prevent exposure. Respirators are not practical except in certain and relatively limited occupational settings, most likely where the chemical is being used.

Vapor intrusion is currently getting much attention, especially from regulators. The United States Environmental Protection Agency ("USEPA") began requiring evaluation of the pathway at National Priorities List ("NPL") and Resource Conservation and Recovery Act ("RCRA") sites under draft guidance issued in 2002. Many states, including New Jersey, New York and Pennsylvania, have published guidance or policy to address vapor.

Assessment of the vapor intrusion pathway can be more complicated than other environmental assessments. Vapor movement may not be predictable in the sub-surface, and preferential pathways may cause vapor to travel to areas where there is no soil or groundwater contamination present.

The science of vapor intrusion also is rapidly developing. Screening and investigation methods are evolving. Health effects are not fully understood, especially when considering that in many instances vapor intrusion results in long-term chronic exposure to relatively low levels of contaminants. For many contaminants, appropriate exposure levels have not yet been identified.

For many sites, consideration of vapor intrusion will change the paradigm of site assessment that assumes no human exposure exists if no one is using the contaminated water. Vapor intrusion challenges the assumption that sub-surface contamination is "trapped," not presenting a risk of exposure to humans. There appears to be no doubt that consideration of vapor intrusion will be part of the assessment and remediation of sites contaminated with volatile chemicals.

In June 2005, NJDEP published draft vapor intrusion guidance on its website with an announcement that it was accepting comments on the document, which it did for a two-month period. NJDEP reportedly received 25 comments from a range of interested parties including industry, environmental groups and USEPA and DOD. As a result, NJDEP did revise the document and then published it as "final guidance" on October 25, 2005.

Significantly, NJDEP has taken action in the form of a guidance document, not a regulation. Theoretically, therefore, the document is not binding on parties conducting remediations. However, NJDEP has stated that it will be assessing vapor intrusion and expects that the guidance will be followed, or else data or conclusions may be rejected. Moreover, if the guidance is ignored, parties will not receive regulatory closure on their cases. Thus, it is clear that NJDEP will base decisions in the remediation context on compliance with the guidance.

Since NJDEP did not engage in formal rulemaking when promulgating the guidance, there may be grounds to attack the guidance procedurally. Administrative agencies, including NJDEP, must act in accordance with the Administrative Procedures Act. If an agency action is tantamount to a rule, then it must engage in prescribed rule making procedures in order to validate its action. While NJDEP did make the guidance available on its website, as well as request and accept comment from the public on the draft guidance, the procedure was nonetheless infirm as it did not meet the formal requirements of the Administrative Procedures Act.

NJDEP has indicated that vapor intrusion will likely be a subject that is addressed through the rulemaking process when the Technical Regulations for Site Remediation ("Tech. Regs.") come up for renewal in 2007. Thus, the Department recognizes that it is an appropriate subject for rulemaking. Even though it is still only in the form of guidance, vapor intrusion cannot be ignored by the regulated community without substantial risk. The practical effect of the guidance is to create a series of actions that must be completed or assessed prior to receiving a No Further Action letter from NJDEP.

In the final guidance, NJDEP has adopted a staged approach to assessing the vapor intrusion pathway. Under this iterative approach, there are steps that can be followed in order to ensure that taking an indoor air sample is warranted. The guidance also uses familiar terms found in the Tech Regs to describe the investigative and remedial process, which is likely intended to make assessment of this pathway consistent with already established assessments for other pathways.

The initial stage of investigation as set forth in the guidance is the preliminary assessment/site investigation phase, where it is determined whether vapor intrusion is an issue to be further addressed at the site. Factors to consider include the type of contaminant involved; the contamination present at the site must have a tendency to volatilize. If vapor intrusion is an issue, early assessment includes a determination of whether rapid or immediate action is required for occupied buildings. The rapid action may be additional investigation, but on a quicker schedule, or an interim (or emergency) remedial measure.

Next, the guidance sets forth the stages comprising the remedial investigation phase. At this point, there is a comparison of site data from groundwater and/or soil gas to generic screening levels to determine whether vapor may be an issue. The guidance generally requires assessment of all structures within 100 feet (vertically and horizontally) of groundwater contamination for most VOCs, and within 30 feet of dissolved petroleum-related contamination. This will likely give rise to the necessity of off-site sampling of potentially many properties and structures.

Groundwater sampling is a routine part of the current site remediation process to delineate contamination. The additional sampling for vapor intrusion, soil gas and indoor air, however, begins to involve new considerations. For example, with respect to soil gas samples, the preference is to take sub-slab soil gas samples. This involves drilling a hole in the floor of the lowest level of the building, a process that a building owner may refuse to allow. If not inside, then the soil gas sample should be taken within 10 feet of the foundation of the structure. Thus, there is no avoiding that access to other properties, as opposed to sampling in public rights of way, is likely required.

If warranted, air sampling is the next step. Air sampling clearly requires access to the property as well as access to the structures. In the commercial or industrial context, this may not be as problematic as in the residential setting, although employers or landlords may not wish to face questions from employees or tenants. Unlike potable water sampling, which may require entry into the home to collect the sample, and can be accomplished in a matter of minutes with little disturbance to the occupant's daily routine, air sampling takes hours and requires the residents to remove products and/or refrain from undertaking certain activities for days prior to the sampling event. Interpretation of sampling results can also be complex since there are sources of indoor air contamination that are present, referred to as background, irrespective of the underlying contaminant plume.

The last phase of the guidance outlines remediation and monitoring of vapor intrusion. It is interesting to note that the remedial effort to address the vapor intrusion pathway is comparatively inexpensive as it involves installation of a mitigation system which, for a residential home, costs approximately $1,200. The on-going operation and maintenance of that system, however, will include additional costs. What is not clear from NJDEP's guidance is when the remediation is considered complete. Conceivably, remediation is not complete until the contaminated groundwater is at or below NJDEP standards, which can take many years.

This article only touches upon the implications arising from NJDEP's approach to vapor intrusion. Without question, consideration of the vapor intrusion pathway will alter the site assessment and site remediation process that we have come to know.

In the Courts

In a recent Supreme Court of New Jersey opinion, Raleigh Avenue Beach Association v. Atlantis Beach Club, Inc., 185 N.J. 40, interpreting the public trust doctrine, the Court held that upland sands privately owned by a beach club were required to be made available to the public. Affirming last year’s Appellate Division opinion, the Court held that the private beach club could not limit public access to the dry sand beach area, but the club could charge reasonable fees for any services provided.

Atlantis Beach Club in Lower Township, Cape May County, owns a 480 foot parcel of upland beach located in a residential area. The beach was free to the public until 1996. Atlantis then began charging membership fees for use of the beach and beach services. Local residents sued to gain access to the beach under the public trust doctrine; and Atlantis sued to enjoin public access under trespass principles.

The public trust doctrine is an ancient common law principle that the land covered by tidal waters is held by the sovereign in trust for public use. The Court held under the four factors previously established in Matthews v. Bay Head Improvement Association, 95 N.J 306, that the public trust doctrine extends to the beach owned by Atlantis. The four factors used to determine the public's right in privately owned dry-sand beaches are: (1) the location of the dry sand in relation to the foreshore; (2) the extent and availability of public upland sand areas; (3) the nature and extent of public demand; and (4) the private owner's use of upland sand area. Using these factors, the Court determined that Atlantis' beach was the only beach in Lower Township facing the Atlantic Ocean, was within easy walking distance of local residential communities, was in great demand by residents and tourists, and was being used for commercial purposes that excluded the general public. Based on these factors, the Court held that the dry sand area must be open to the general public, but that Atlantis could charge reasonable fees for services provided. Atlantic could not, however, charge for entrance onto the beach. The Court also held that the NJDEP has the authority to review the proposed fees charged under the Coastal Area Facility Review Act permit held by Atlantis.

The Court's holding in this case is very fact specific. The Court may conclude differently in a case where public access is sufficiently met. This struggle, however, between the public's desire for access to the ocean and a private landowner's desire to protect his bundle of property rights from public invasion is not likely to end in the near future and will require case by case judicial review.

An en banc panel of the Third U.S. Circuit Court of Appeals has struck down its 1993 precedent and held that the USEPA may recover costs it incurs to oversee the cleanup of contaminated sites by potentially responsible parties pursuant to the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq. ("CERCLA"). United States v. E.I. DuPont de Nemours & Co., __ F. 3d __ (3rd Cir., Dec. 22, 2005). In overturning United States v. Rohm & Haas Co., 2 F.3d 1265 (3rd Cir. 1993), the Third Circuit has joined every other federal appellate court to consider the question of USEPA's authority to recover oversight costs pursuant to CERCLA. The court reconsidered its earlier decision, finding that CERCLA contains both a "clear statement" delegating to USEPA the authority to recover oversight costs and an "intelligible principle" constraining the USEPA's actions in exercising this authority. The Court found, among other things, that USEPA's oversight of a remedial action is "monitoring reasonably required to assure" that such actions protect public health and the environment. Further, a responsible party may challenge USEPA's oversight costs as inconsistent with the National Contingency Plan.

As discussed in our September 2005 newsletter, the Highlands Water Protection and Planning Act, N.J.S.A. 13:20-1 et seq. (the "Act"), was signed into law on August 10, 2004. A lawsuit alleging that the Actss application resulted in a taking of property without just compensation and that the Act's retroactive application violated due process and equal protection guarantees was dismissed on November 15, 2005 by the Superior Court of New Jersey, Law Division - Morris County. See OFP, L.L.C. v. The State of New Jersey, No. MRS-L-000160-05. The plaintiff, OFP, was the owner/developer of 93 acres in Washington Township that received approval of a Potable Water Supply Permit on May 14, 2004. Because the Act applied retroactively to permit approvals obtained after March 29, 2004, OFP was subject to the Act and potentially could not develop its property.

The Court first weighed the Act's benefits to drinking water and natural resources against the Act's restriction on private property rights, which restriction was mitigated by exemptions, hardship waivers, transfer of development rights and voluntary acquisitions by the State. The Court concluded that a taking had not occurred. The Court also held that the retroactive application of the Act did not deprive the OFP of a fundamental right, and dismissed its due process and equal protection claims.

Finally, the Court agreed with the State's argument that OFP had not exhausted its administrative remedies, because NJDEP had not reached a final decision on whether the plaintiff could develop its property. The Court rejected the argument by OFP that it should not be required to wait for a final decision of administrative remedies because the remedy procedures had not been promulgated. Rather, the Court determined that OFP must await both promulgation of the regulations governing administrative remedies and final decision under those remedies before it could bring the case.

The Court in Cooper Industries v. Aviall Services, Inc., 54 U.S. 1099 (2004) held that only a party who had satisfied its obligation to the government under §106 or §107 of CERCLA could bring an action under §113(f)(1) of CERCLA. In light of Aviall, many plaintiffs have found they may no longer have a claim for contribution under §113(f)(1). As the two cases below depict, many plaintiffs are attempting to keep their §113(f)(1) claims for contribution by attempting to expand the definition or scope of what constitutes government action under §106 or §107 of CERCLA.

A plaintiff in the District of Connecticut unsuccessfully tried to argue that a state-issued administrative pollution abatement order was akin to a §106 or §107 government order for purposes of standing. CadleRock Properties Joint Venture, L.P. v. Schilberg, __ F. Supp. 2d __, No. 3:01CV896 (D. Conn. July 19, 2005). The Court held that the state administrative action did not qualify as a required CERCLA enforcement action and, therefore, the plaintiff could not proceed with its §113(f)(1) contribution claim because it lacked the necessary standing.

In Boarhead Farm Agreement Group v. Advanced Environmental Technology Corp., 381 F. Supp. 2d 427 (E.D. Pa. 2005), plaintiffs argued that the two consent decrees they had negotiated and signed with USEPA should constitute satisfaction of their CERCLA obligation to the government, and thus provide them with standing under Aviall to enable them to pursue a contribution claim under §113(f)(1). The Boarhead court allowed the plaintiffs to proceed with their §113(f)(1) contribution claim, distinguishing plaintiffs' situation from that of Aviall because the government had been involved with and oversaw the remediation of this site, whereas in Aviall the government had not been involved in the site remediation.

Legislative Action

Former Governor Richard Codey announced New Jersey's Coast 2005 Initiative. This plan is intended to serve as a comprehensive plan to protect New Jersey's coastal resources. It calls for tougher standards and regulations to protect the coastal ecosystem, improve public access, protect coastal wildlife and their habitats and support tourism, seafood and maritime industries. This Initiative came after the release of two federal studies showing a decline in US coastal resources. Following the release of these federal studies, the NJDEP issued a public white paper outlining proposals to enhance shore protection. Public hearings were then held to obtain public comment on the proposals. NJDEP then made recommendations, which have been incorporated into this Initiative.

The Initiative calls for restoration of water quality to assure the existence of shell fishing areas, restoration of 500 acres of oyster production in Delaware Bay, strengthening standards for ocean dischargers, strengthening coastal zone restrictions regarding offshore oil and gas development, and prohibition of development along the shore in threatened and endangered species habitats, wetlands, water resource and recharge areas. NJDEP will also target grants for projects that would improve coastal water quality.

Governor Codey intended this Initiative to show New Jersey's leadership role in dealing with the threats to the coastal system. The Initiative will be addressed under the current coastal zone management programs. The Coastal Management Office, a component of NJDEP's Coastal Zone Management Program, develops long term planning projects for New Jersey's coastal resources.

New Jersey's Groundwater Quality Standards ("GWQS") specify the water quality criteria and designated uses to protect the state's waters. The water quality criteria are numerical values assigned to each constituent which serve as the basis for setting groundwater discharge standards under the New Jersey Pollutant Discharge Elimination program, and establish standards for groundwater quality cleanups under the Site Remediation Program.

NJDEP readopted the GWQS with amendments on October 4, 2005, and the amendments became effective on November 7, 2005. Out of the 113 GWQS criteria covered by the standards, 19 have been made more stringent, 42 have been relaxed, 15 have been deleted and two have been added. The readopted GWQS also included updated language and removal of outdated references, and revisions to the subsections concerning criteria derivation. The revised GWQS can now be found at N.J.A.C. 7:9C.

On December 21, 2005, Acting Governor Codey signed Senate Bill 2892 into law, P.L. 2005, c.245. The bill extends the statute of limitations by 18 months for civil actions brought by the State for natural resource damage compensation.

With the Legislative session ending in early January, there was a push to enact a number of bills into law. All of the following were recently signed into law by Governor Codey:

P.L. 2005, c. 285 requires scheduled revisions to New Jersey's Statewide Water Supply Plan and appropriated $2.5 million for this purpose.

P.L. 2005, c. 301 appropriates $30 million to NJDEP for grants to or on behalf of local government for wastewater treatment system projects.

P.L. 2005, c. 315 forgives repayment of a conditional hardship grant that is provided to a business for the upgrade, removal or cleanup of its underground storage tanks if the property is condemned or upon the exercise of the power of eminent domain.

P.L.2005, c. 348 clarifies that protection from contribution suits applies upon the resolution of a person’s liability to the State under the Spill Compensation and Control Act pursuant to a No Further Action letter as well as pursuant to a settlement agreement.

P.L.2005, c. 349 appropriates $53 million to NJDEP from the "Water Supply Bond Act of 1981" for certain water supply projects and planning.

P.L. 2005, c. 355 authorizes NJDEP to replace the person responsible for remediation on property that is condemned pursuant to the Eminent Domain Act, with condemnor under certain circumstances.

P.L. 2005, c. 358 implements the amendments to Article VIII, Section II, paragraph 6 of the State Constitution to expand the authorized uses of the Corporation Business Tax revenue to fund the diesel air pollution control program and the administrative costs of the underground storage tank grant and loan program.

P.L. 2005, c. 360 provides that 75% of a developer's incurred remedial costs be reimbursed from future generated taxes for redevelopment projects. The legislation applies to developers who began remediation prior to the enactment of the Brownfields Act.

P.L.2005, c. 365 requires an inventory of brownfields in the state and annual progress reports by the Brownfields Redevelopment Task Force.

P.L.2005, c. 374 extends eligibility for sale and use tax exemptions of energy and utility service purchases by certain manufacturing-intensive businesses in Urban Enterprise Zones and certain counties.

NJDEP

NJDEP has proposed penalty regulations for site remediation in response to litigation over the agency's failure to comply with the Grace Period Law set forth at N.J.S.A. 13:1D-125 et seq. See N.J. Dep't of Envtl. Prot./Haz. Waste Compliance & Enforcement v. Marisol, 367 N.J. Super. 614 (App. Div. 2004). The Grace Period Law requires NJDEP to differentiate between "minor" and "non-minor" violations of environmental laws and to allow unintentional minor violations to be corrected without penalty.

In August 2005, NJDEP proposed a penalty matrix for its Site Remediation Program, including for violations of the Technical Requirements for Site Remediation, N.J.A.C. 7:26E, and of the rules for the Industrial Site Recovery Act, N.J.A.C. 7:26B, underground storage tanks, N.J.A.C. 7:14B, and NJDEP oversight of site cleanups, N.J.A.C. 7:26C. Based upon the nature and extent of a minor violation, 30 to 90 days - the "grace period” - is provided by regulation to achieve compliance. Non-minor violations subject to penalty include, but are not limited to, failure to report a discharge of a hazardous substance, violations relating to maintenance of engineering and institutional controls, failure to submit a timely remedial action workplan, and failure to remediate an immediate environmental concern. "Base penalties" assigned to NJDEP's matrix range from $3,000 to $20,000 per violation.

In the past, NJDEP's Site Remediation Program has issued written notices of violation sparingly and only in egregious cases. No doubt the effect of NJDEP's penalty proposal, if it is adopted, will be to boost enforcement action by the Site Remediation Program and to increase the frequency and severity of Notices of Violation issued for failure to comply with Agency requirements.

The 6th Edition, 2005 Known Contaminated Sites List (KCSL) is now out. The new list contains basic information on approximately 13,700 sites in New Jersey where groundwater or soil contamination has been confirmed. The Site Remediation and Waste Management Department (SRWM) and the Office of Information Resources and Management are currently working on new Internet reporting methods which would enable SRWM to update the list more frequently. Digital data downloads in ArcView Shape file format are also available.

The August 2005 Field Sampling Procedures Manual is now available online. This new version replaces the 1992 edition and is the most current technical guidance. It is also the first edition published on the Web.

Environmental Justice

USEPA set forth five goals in its 2003-2008 Strategic Plan ("Plan"). They are: (1) clean air and global climate change, (2) clean and safe water, (3) land preservation and restoration, (4) healthy communities and ecosystems, and (5) compliance and environmental stewardship. In compliance with Executive Order 12898, USEPA is re-addressing how it will achieve these goals, taking into account environmental justice concerns. On June 22, 2005, USEPA issued a Federal Register Notice requesting public comment on two draft documents that set forth the goals and structure of its Environmental Justice Program ("Program"). The period for public comment ended on August 15, 2005.

The "Framework for Integrating Environmental Justice" sets forth how the USEPA plans to "coordinate, develop and enhance" the integration of its Plan with environmental justice considerations for 2006-2011. The "Environmental Justice Strategic Plan Outline" sets forth the mission and priorities of the Program, linking it to the USEPA's budget and performance. The twelve priorities include such goals as reducing asthma attacks due to air quality, ensuring safe drinking water, and reduction of childhood lead poisoning and exposure to pesticides. Under the Plan for example, if the current strategy plan called for a 3.4 million ton reduction of nitrogen oxide, the new environmental justice program might call for 1 million tons of that total reduction to be in areas with environmental justice concerns. Outlines of both documents are available at

www.epa.gov/compliance/resources/publications/ej/index.html

Congress has criticized the draft Plan for its proposal to drop race as a factor in identifying and prioritizing communities. This criticism follows upon a sharp criticism of USEPA by the Inspector General for failing to comply with Executive Order 12898. Both the House of Representatives and Senate have asked USEPA to see that funds are not used "in contravention of, or to delay the implementation of" Executive Order 12898, and a draft bill would prohibit USEPA spending if it was not consistent with the Order.