The New Jersey Supreme Court in New Jersey Department of Environmental Protection ("NJDEP") v. Dimant held last week that the NJDEP must prove the presence of a "reasonable connection" between the discharge of a hazardous substance and the damages sought by the Department in order to establish liability under the New Jersey Spill Compensation and Control Act ("Spill Act").
In Dimant, the NJDEP brought suit against a dry cleaning establishment for perchloroethylene ("PCE") contamination, seeking costs it had incurred in the investigation and remediation of contaminated wells. The trial court found that the NJDEP failed to prove by a preponderance of the evidence that the groundwater contamination was caused by the dry cleaner. The Appellate Division affirmed and the Supreme Court has now affirmed the Appellate Division decision, adding a lengthy discussion intended to clarify the degree of causation the NJDEP is required to prove in Spill Act cases.
The Supreme Court explained that while the NJDEP was not obligated to establish that the discharge was the proximate cause of the damages sought, the Department nevertheless was required to show "a reasonable link between the discharge, the putative discharger and the contamination at the specifically damaged site." The Court refused to apply the more lenient causation standard of the federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or "Superfund"), where liability attaches upon "some connection" between a party's actions and the environmental contamination. But the Court also held that it is not enough under the Spill Act for a party to prove merely that a hazardous substance was produced and that the substance was found at the site.
The Court also clarified that any discharge of a hazardous substance within the state is prohibited. Thus, it recognized the NJDEP's authority to seek injunctive relief to stop an existing discharge or to order a preliminary assessment and site investigation when such discharge occurs, without having to prove resulting damage. The Court reiterated there is no de minimis exception to the Spill Act's prohibition against the discharge of a hazardous substance.
The Dimant decision is intended to provide greater clarity as to the degree of causation the NJDEP is legally required to establish under the Spill Act, although the extent to which it has done so likely will be the subject of debate in coming months. In any event, liability will continue to turn substantially on the facts of each case. The Dimant decision and its implications for the NJDEP and potentially responsible parties will be discussed at greater length in our next Environmental Update.
