Riker Danzig Environmental Update December 2017

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Riker Danzig Environmental Update December 2017
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Riker Danzig Environmental Update December 2017
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NJDEP Revises Soil Remediation Standards Applicable to Historic Fill and Other Common Contaminants

On September 18th, the New Jersey Department of Environmental Protection (“NJDEP”) revised its soil remediation standards for eighteen contaminants in response to new toxicology studies by the U.S. Environmental Protection Agency. The revised standards became effective immediately; however, completed or nearly completed cleanups may be exempt from complying with certain of the new, more stringent standards in particular situations. Numeric standards for eleven constituents have increased and now are more lenient, and the standard for one constituent, thallium, was deleted entirely. Conversely, six other constituents now have more stringent standards. Parties responsible for ongoing cleanups should consider whether these new standards change the scope of their investigation or remediation. Parties responsible for completed cleanups also should consider whether a more stringent standard requires further action or whether a more lenient standard permits early termination of ongoing obligations associated with their cleanup. Properties containing historic fill material or that have been the site of operations utilizing solvents, such as dry cleaners, metal manufacturers and parts degreasers, are among the most likely to be affected by the new standards.

NJDEP established more lenient standards for seven different polycyclic aromatic hydrocarbons (“PAHs”), which are common contaminants and often are found in contaminated historic fill material throughout the state. The strict soil remediation standards for PAHs triggered significant remediation obligations at many of these historic fill sites, even though those sites themselves had not been subject to intensive industrial use. The typical remediation approach is placing a cap of clean soil, asphalt, or some other barrier on top of the historic fill and recording a deed notice notifying potential buyers that the site is contaminated. Notably, a party responsible for maintaining a historic fill cap that is no longer necessary under the new standards can obtain relief from the long-term remedial action permit compliance obligations and associated costs, including the requirement to post financial assurance, pay annual fees, conduct biennial certifications and monitor and maintain the cap itself. Similarly, owners of property with a deed notice for historic fill can remove the deed notice, after obtaining NJDEP’s permission, if their property complies with the new, more lenient standards for PAHs.

The soil remediation standards for tetrachloroethene (“PCE”), historically used by dry cleaners, metal manufacturers, and parts degreasers, increased substantially. However, in practice, this change may have a less significant impact on responsible parties’ remediation costs than the change in the PAH standards, as the extent of remediation of PCE-contaminated soil often is driven by the impact to groundwater standard developed for each particular site, which can be stricter than both the old and new soil remediation standards for PCE. Nevertheless, the new standard for PCE will reduce the burden of soil remediation in situations where the impact to groundwater standard does not apply or where site-specific factors cause the impact to groundwater standard to exceed the new PCE soil remediation standard.

Parties responsible for property impacted by the six constituents subject to more stringent soil remediation standards have the less enviable task of determining the increased cost of these new obligations. The six constituents with more stringent standards are 1,1’-biphenyl; cyanide; hexachloroethane; nitrobenzene; pentachlorophenol; and trichloroethene (“TCE”). TCE, formerly a commonly used solvent, is the most prevalent of these constituents. As with PCE, however, the extent of remediation of TCE often depends on the still unchanged and generally more stringent impact to groundwater standard, so the practical impact of the more restrictive soil remediation standards for TCE may not be significant.

For sites undergoing investigation or remediation where one of these six constituents is present, the scope of the investigation or remediation may expand. However, sites where hexachloroethane, nitrobenzene (residential sites only), pentachlorophenol, and TCE are present may take advantage of a “phase-in period” which excuses the responsible party from the new, stricter requirements. Where the remediation standard decreased by less than an order of magnitude, i.e., a factor of ten, which is the case for the contaminants listed above, the party responsible can avail itself of the old, more lenient remediation standard if it submits its remedial action report or remedial action workplan to NJDEP before March 18, 2018.

Remediated sites that are subject to either a no further action letter (“NFA”) from NJDEP or a response action outcome (“RAO”) from a Licensed Site Remediation Professional can be reopened and subject to further clean up, but only where the new remediation standard differs from the previous standard by more than an order of magnitude. The soil remediation standards for 1,1’-biphenyl, cyanide, and nitrobenzene (non-residential sites only) decreased by more than an order of magnitude. Property owners or parties otherwise responsible for sites with an NFA or RAO for these constituents should seek advice regarding the need for further remediation, as the failure to do so could lead to penalties from NJDEP or difficult questions from prospective purchasers performing due diligence if the property is offered for sale.

Whether an environmental investigation recently has begun or a remediation has been completed for many years, parties responsible for property with historic fill or property impacted by the other constituents mentioned in this article should consider the impact of the new soil remediation standards on their obligations under New Jersey law.  

NJDEP to Adopt Strict Standards for PFOA and PFNA in Drinking Water

On November 1st, New Jersey Department of Environmental Protection (“NJDEP”) Commissioner Bob Martin announced that the Department would move forward with adopting strict drinking water standards for two emerging contaminants that studies have linked to adverse health effects. According to NJDEP’s press release, New Jersey will become the first state to formally adopt Maximum Contaminant Levels (“MCLs”) requiring statewide testing of public drinking water systems for perfluorooctanoic acid (“PFOA”) and perfluorononanoic acid (“PFNA”). In fact, the Department has already accepted the State Drinking Water Quality Institute’s recommended health-based MCL of 14 parts per trillion (ng/L) for PFOA and has proposed an MCL of 13 ng/L for PNFA. During a news conference in Voorhees, New Jersey, Commissioner Martin said that “setting protective standards for these contaminants continues New Jersey’s long tradition of being a national leader in using strong science to ensure residents receive the highest quality drinking water.”

PFOA and PFNA belong to a group of chemicals called per-and polyfluoroalkyl substances (“PFAS”) that do not readily break down in the environment and remain in the body for a long time, or bioaccumulate, once absorbed through drinking or eating. For more than a decade, scientists have been studying the health effects associated with PFAS and a growing number of studies suggest that exposure to PFOA and PFNA over certain levels may lead to adverse effects, including developmental issues, thyroid and liver damage, increased blood cholesterol levels, and impacts to the immune system, as well as certain types of cancer.

PFOA has been used in a wide variety of consumer products and industrial applications, including the manufacture of non-stick cookware and food packaging. It also has been used to make upholstered furniture and carpets as well as all-weather clothing and water-resistant shoes and mattresses. PFNA has been used in the manufacturing of high-performance plastics that are resistant to heat and harsh chemicals. As a result of the wide usage of these chemicals and their persistence in the environment, PFOA and PFNA have been found in the majority of drinking water systems that have been tested throughout the state.

Public water systems that identify exceedances of the MCLs for PFOA and PFNA will need to take steps to ensure that the drinking water is suitable for public consumption. In fact, some water purveyors in impacted areas already have utilized point of entry treatment (“POET”) systems, while others have drawn replacement water from deeper, more protected groundwater sources.

Given the developing science and understanding of the prevalence of and adverse health effects associated with emerging contaminants like PFOA and PFNA, it is very possible that we will see the emergence of additional contaminants of concern and new regulation in the future.  

New York Imposes Stricter Requirements for Reuse of Fill and Construction and Demolition Debris

The New York State Department of Environmental Conservation (“NYSDEC”) recently revised its solid waste management regulations, the first significant changes since 1993, reorganizing the existing rules and revising requirements for solid waste landfills, waste transporters, beneficial use determinations (“BUD”), and reuse of fill material, construction and demolition (“C&D”) debris and wastes generated from oil and gas production. Notably, the NYSDEC’s concerns surrounding illegal dumping resulted in regulations that contain stricter requirements for reuse of fill material and C&D debris.

The revised regulations, 6 NYCRR Section 360.13, set forth when entities may reuse fill material rather than be required to dispose of it. Entities wanting to reuse fill must meet certain requirements, including conducting an analytical and physical characterization of the fill. The sampling of the fill must be conducted by a qualified environmental professional (“QEP”), that is, a person with sufficient training to exercise professional judgment regarding the presence and impact of hazardous substances. The NYSDEC classifies the fill material as general fill, restricted use fill or limited use fill, based upon the physical constituents of the fill, and each has its own sampling requirements. The frequency of the sampling is based on the quantity of the fill for reuse. The QEP is required to sample the fill for metals, PCBs, pesticides, certain semi-volatile and volatile organic compounds, and asbestos if there was demolition of structures on the site from where the fill originated. The allowable concentration of any contaminant is based upon the classification of the fill and where it is going to be reused.

A person receiving restricted-use or limited-use fill is prohibited from taking payment for accepting such material. There also are notification requirements when transferring fill material from one site to another. In fact, the NYSDEC must be notified of any transfers of fill material generated in, imported to or relocated within New York City and also transfers of restricted-use and limited-use fill in other areas of the State when the amount of fill is greater than ten (10) cubic yards.

Fill material that is reused on-site in areas with similar physical characteristics is exempt from the regulations. If, however, fill is going to be reused on-site in a public place and exhibits evidence of contamination it must be covered with a minimum of twelve (12) inches of soil and meet the requirements for general fill.

The regulations, 6 NYCRR Part 360, also apply to reuse of C&D debris. Additionally, 6 NYCRR Section 361-5 sets forth operational and permit requirements for facilities that recycle C&D debris. These facilities are required to keep records of the quantity and type of material sent from the facility and the destination of the material used as alternative capping material. Further, C&D tracking documents must accompany all fill material leaving a C&D facility that does not qualify for a beneficial use determination.

Entities that plan to reuse fill or C&D debris should review and gain an understanding of these new requirements and determine how best to adhere to them in order to avoid potential penalties and enforcement action.

Court Rules that Gas Station Defendants are Not Off the Hook for “Primary Restoration” Natural Resource Damages 

In a case before the United States District Court for the District of New Jersey, the New Jersey Department of Environmental Protection (“NJDEP”) seeks to recover natural resource damages (“NRD”) from a number of gas station defendants (the “Gas Station Defendants”) for the alleged discharge of Methyl Tertiary Butyl Ether (“MTBE”) into the groundwater at five gas station sites in northern and central New Jersey. NJDEP v. Amerada Hess Corp., Docket No. 15-6468 (Nov. 1, 2017). This past summer, the Gas Station Defendants sought leave to file a motion for partial summary judgment on the issue of whether the NJDEP could recover primary restoration natural resource damages. Under the New Jersey Spill Compensation and Control Act (the “Spill Act”), primary restoration damages are available to the NJDEP for the implementation of a primary restoration plan that would restore the environment to pre-discharge conditions more quickly than would occur through a remediating party’s proposed remediation program. The Gas Station Defendants contend, however, that such damages are only available where the NJDEP can establish that there is an “injury or threat to human health, flora or fauna” that provides a reasonable basis or justification for expedited restoration over and above the Gas Station Defendants’ planned remediation. While the Gas Station Defendants argued that a heightened legal standard should apply to claims for recovery of primary restoration damages, the District Court refused to adopt this view and determined that the burden of proof proposed by the Gas Station Defendants was not found in the Spill Act.

The Gas Station Defendants argued that the NJDEP was not entitled to primary restoration damages because the NJDEP-approved remediation plans for the MTBE contamination, once completed, would restore the contaminated groundwater to pre-discharge concentrations through the process of natural attenuation, and therefore, damages for the costs of an “expedited remediation” are not warranted. In fact, the Gas Station Defendants took the position that the NJDEP may recover primary restoration damages only where the groundwater contamination gives rise to “an injury or threat to human health, flora or fauna” and that the NJDEP had not presented evidence of any such injury. The NJDEP argued to the contrary, that it was entitled to damages for any primary restoration plan that is “practicable,” which is a question of fact that cannot be resolved on summary judgment. The District Court agreed with the NJDEP and found that the appropriate burden of proof for claims for primary restoration damages under the Spill Act is to establish by a preponderance of evidence that the primary restoration plan is “practicable,” meaning “reasonably capable of being done” or “feasible” in light of “site-specific realities.”

The District Court noted that this inquiry is highly fact-specific and should take into account the estimated length of time required to complete the restoration plan, the cost of the restoration plan, the extent to which the restoration plan is concrete, nonabstract and readily implementable rather than abstract or conceptual, the regulatory approvals required for the restoration plan from authorities other than the NJDEP, and any other legal obstacles or barriers to the implementation of the restoration plan. The District Court went on to note that this factual inquiry should be accomplished through submission of fact and expert evidence and is generally not suitable for summary disposition. As such, it remains to be seen whether the NJDEP will ultimately prevail on its claim for primary restoration damages.

Beware of Contractual Statutes of Limitation Affecting Claims for Deficient Environmental Services

The Appellate Division of the Superior Court of New Jersey recently upheld a provision in an environmental services contract that reduced the time to bring a claim under the contract to one year. Elar Realty Co. v. Environmental Risk Limited, Docket No. A-2201-15 (N.J. App. Div. Oct. 11, 2017). As a result, the property owner was unable to bring a claim against its environmental contractor for deficient work in performing remediation.

In Elar Realty, a property owner, Elar Realty Company (“Elar Realty”), entered into a written contract with an environmental contractor, Environmental Risk Limited, for work relating to the remediation of its property. While Environmental Risk Limited initially began the work, it subsequently sold its assets and open contracts, including the contract with Elar Realty, to another environmental contractor, GZA GeoEnvironmental, Inc. (“GZA”). GZA then performed services in connection with the Elar Realty’s property, and Elar Realty paid GZA for these services. GZA performed under the contract until December 24, 2008 when Elar Realty terminated the contract because of “deficiencies in GZA’s work.” Elar Realty Co., (slip op. at 2-3).

Approximately two years later, Elar Realty sued GZA and Environmental Risk Limited in connection with these deficiencies. GZA and Environmental Risk Limited both argued that Elar Realty’s claims were barred by a one-year statute of limitations that it had agreed to in the written contract for environmental services. Elar Realty challenged the applicability of the one-year statute of limitations, but the Appellate Division summarily upheld the shortened statute of limitations and dismissed Elar Realty’s claims. Elar Realty Co., (slip op. at 7). By way of explanation, the Appellate Division cited other cases, which held that “[c]ontract provisions limiting the time parties may bring suit have been held to be enforceable, if reasonable.” See, e.g., Mirra v. Holland Am. Line, 331 N.J. Super. 86, 91, 751 A.2d 138, 140 (App. Div. 2000).

This is not the first time that the New Jersey courts have upheld a strict contractual provision in a contract for environmental services. For example, in 66 VMD Associates, LLC v.Melick-Tully and Associates, the Appellate Division upheld a provision limiting the liability of an environmental contractor for breach of contract to a mere $25,000. Docket No. A-4008-09 (N.J. App. Div. Aug. 11, 2011). In so doing, the Appellate Division acknowledged that courts generally enforce a contract as written, with few exceptions.

In light of the above, environmental contractors and anyone contracting for services from such a company should carefully review their contracts in order to adequately protect their respective interests. Contractual statutes of limitation are commonly included in environmental services agreements that can and should be closely considered and negotiated.

Regulatory Update

United States Environmental Protection Agency

Environmental Literacy Grant Awarded by EPA

In July, the EPA awarded The College of New Jersey (“TCNJ”) with a $91,000 grant to provide environmental training to educators in the state.

A major focus of the grant will involve protecting local water sources as well as the development of school-specific projects at ten local elementary schools.

TCNJ will create a “think and do” tank through its Sustainability Institute in order to establish a professional development series for the integration of environmental information into the school’s curriculum.

Dave Muha, Vice President for Communications at TCNJ, envisions that the grant will not only lead to the creation of environmental sustainability education projects, but will also encourage enduring change for environmental health in the state.

Nationwide, more than 30 grants were awarded, totaling $3.3 million.

For additional information, please visit www.epa.gov.  

New Jersey Legislative Update

New Jersey State Legislature Quietly Introduces Three Aggressive Renewable-Energy Bills

In early October, the New Jersey State Legislature quietly introduced three bills, which aggressively pursue goals to overhaul the state’s energy policies, exceeding any proposals thus far to reduce the state’s dependence on fossil fuels and increase the use of renewables.

The first bill requires that 100 percent of the state’s electricity is supplied by renewable sources by 2050. The second bill targets an offshore wind capacity of 3,500 megawatts by 2030, and the third bill sets aggressive goals for power suppliers regarding energy storage.

This aggressive approach, however, is not shared by everyone. The progress of these bills has been slowed down by an Assembly Committee. In addition, some business lobbyists have raised concerns that an over-reliance on renewable energy will lead to higher electricity bills.

Nonetheless, the environmental proponents of these bills, like the Sierra Club and Environment New Jersey, are eager to see this legislation advanced and are convinced that the state can in fact reach the goal of 100 percent renewable energy by 2050.

For additional information, please see www.njspotlight.com.

Recently Enacted Environmental Laws

P.L.2017, c 210 (A3056) Requires NJDEP to establish guidelines for K-12 schools and institutions of higher education to reduce, recover, and recycle food waste; extends “Food Bank Good Samaritan Act” immunity protections to public and nonpublic schools.

Recently Introduced Environmental Bills

S3412 / A4508: Improving Energy Infrastructure through Public-Private Partnership Act. Status: Reported out of Assembly Telecommunications and Utilities Committee; passed second reading; pending in Senate Economic Growth Committee.

S2873 / A4540: Requires municipal land use plan element of master plan to address smart growth, storm resiliency and environmental sustainability issues. Status: Reported out of Assembly Environment and Solid Waste Committee; passed by the Assembly; third reading, passed final passage in the Senate.

A5043: Requires State to uphold goals of Paris Climate Agreement. Introduced and referred to Assembly Environment and Solid Waste Committee.

S3470 / A4552: Encourages local units to plan for electric vehicle charging infrastructure. Status: Reported out of Assembly Housing and Community Development Committee, passed second reading.

Updated Status of Previously Reported Environmental Bills  

A4306: Requires NJDEP to adopt Statewide plan to reduce lead exposure from contaminated soils and drinking water. Status: Pending in Assembly Appropriations Committee; pending in Senate Environment and Energy Committee.

S2712: Prohibits dumping dredge spoils on and around certain islands without municipal approval. Status: Pending in Senate Environment and Energy Committee; pending in Environment and Solid Waste Committee.

A693 / A540: Requires State compensation of property owners for certain property devalued due to certain environmental laws; and requires State agencies to evaluate proposed administrative rules for potential to constitute taking of real property. Status: Pending in Assembly State Government Committee.

A960 / S1030: Imposes criminal penalties for discharge of untreated sewage from containment devices installed on watercraft. Status: Pending in Senate Environment and Energy Committee.

A1352: Concerns regulation of solid waste, hazardous waste, and recycling industries - implementing recommendations concerning the circumvention of oversight in the solid waste and recycling industries. Status: Reported from Senate Budget and Appropriations Committee with Amendments, second Reading in Senate.

A1353 / S575: Concerns combined sewer overflows; establishes Combined Sewer Overflow Solutions Fund; exempts improvements thereto from 2% property tax cap; and appropriates $5 million. Status: Pending in Senate Budget and Appropriations Committee.

A1356: Requires owner or operator of industrial establishment applying for de minimus exemption from “Industrial Site Recovery Act” to certify as to no actual knowledge of contamination exceeding remediation standards. Status: Introduced; pending in Assembly Environment and Solid Waste Committee.

A2076: Establishes de minimis levels for regulation of air contaminants and hazardous air pollutants, and directs NJDEP to establish de minimis levels for regulation of hazardous substances. Status: Introduced; pending in Assembly Environment and Solid Waste Committee.

A4880 / S3351: Amends law to limit NJDEP’s direct oversight of remediation of portion of contaminated site under certain circumstances. Status: Introduced; pending in Senate Environment and Energy Committee.

S1237 / A1954: Makes changes to funding provisions for financial assistance grants from Hazardous Discharge Site Remediation Fund. Status: Passed by the Assembly; pending in Senate Environment and Energy Committee.

S1368 / A3039: Requires NJDEP to obtain legislative approval and authorization before increasing a fee or imposing a new fee, but retains NJDEP authority to use ordinary administrative procedure when decreasing a fee. Status: Introduced; pending in Assembly Regulatory Oversight and Reform and Federal Relations Committee.

S2306 / A1352: Concerns regulation of solid waste, hazardous waste, and soil and debris recycling industries. Status: Out of Assembly Environment and Solid Waste Committee; second reading with amendments pending in Senate Committee.

S1707 / A2203: Establishes requirements for provision of energy from Class I renewable energy sources. Status: Passed by the Senate; pending in Assembly Telecommunications and Utilities Committee.