No Right to Jury Trial in Action to Determine Coverage for Future Remedial Costs
The New Jersey Supreme Court, reversing the Appellate Division, recently held that an action for a declaration of coverage or no coverage under an insurance policy for future environmental remediation costs is an action for specific performance, for which there is no right to a jury trial. The Supreme Court clarified that regardless of whether it is the insurer or the policyholder that initially files the action, the purpose of the litigation is the same - a determination of whether coverage exists for future environmental remediation costs. The Court's holding of no jury trial was based on the fact that a declaration of responsibility for unliquidated future costs is not adequately addressed through money damages, but rather requires equitable relief - which is inappropriate for jury determination. The Court's decision indicates that, where damages are liquidated, there may be a right to a jury trial. Insurance Company of North America v. Anthony Amadei Sand & Gravel, Inc., 162 N.J. 168 (1999).
Eighth Circuit RCRA Ruling May Impact NJ
In Harmon Industries, Inc. v. Browner, 191 F.3d 894 (1999), the Eighth Circuit held that once a state with an authorized Resource Conservation and Recovery Act ("RCRA") hazardous waste program undertakes an enforcement action against a defendant, EPA may not maintain a separate enforcement action based on the same set of facts. The Eighth Circuit held that this agency practice, called "overfiling," violates both the language of RCRA and the doctrine of res judicata. The case has great significance for EPA's RCRA enforcement policy. EPA traditionally has asserted this right to overfile as necessary to ensure that states adequately enforce environmental laws and regulations and to provide consistency in enforcement nationwide. The regulated community has for a long time objected on the grounds that EPA's practice frustrates RCRA's purpose of allowing states to operate the program, rather than EPA. Although an Eighth Circuit decision, this case may impact New Jersey as well. As reported in our December 1999 newsletter, on August 2, 1999, pursuant to RCRA, EPA authorized New Jersey's hazardous waste program. Thus, NJDEP is authorized to pursue RCRA enforcement actions. If EPA complies with Harmon outside of the Eighth Circuit, it will be precluded from overfiling on NJDEP enforcement actions. If, however, EPA chooses to disregard the decision in other circuits, a New Jersey court may find itself faced with this identical issue.
Appellate Division Upholds Past Settlement Agreements Under Invalidated Waste Flow Regulations
On December 13, 1999, the Appellate Division held that settlements and penalties based on New Jersey's former, invalidated waste flow regulations are valid and enforceable. Zuccarelli v. NJDEP, A-5236-97T5 (App. Div. Dec. 13, 1999). According to the opinion, the appellant had entered into a settlement with NJDEP in 1992 for various waste flow violations. Following approval of the settlement agreement, several court decisions invalidated New Jersey's waste flow scheme, culminating with the landmark Third Circuit decision in Atlantic Coast that New Jersey's waste flow regulations discriminated against interstate commerce. In refusing to re-open Zuccarelli's case, the court emphasized the tremendous burden that retroactivity for all finalized settlements and penalties would place on the judicial system and on NJDEP. The court also noted that Zuccarelli and the other appellants were not compelled to settle their cases in 1992 and that, instead, they could have contested NJDEP's claims and even raised the constitutional argument that subsequently was upheld.
