SteveK July 17th, 2010

On July 13, 2010, in Commissioner of the Department of Planning and Natural Resources v. Century Alumina, LLC, et.al., the Federal District Court from the St. Croix division of the Virgin Islands, held that an action to recover natural resource damages (NRD) must be commenced within 3 years of the constructive knowledge of the injury by the trustee.

The plaintiff trustee brought the claim against a number of industrial entities for the release of contaminants onto a number of industrial tracts at various times which injured the land as well as groundwater and the Caribbean Sea.  The defendants moved for summary judgment seeking dismissal of the claims under CERCLA’s limitation of actions provision, which provides that an action for NRD must be commenced within 3 years following “the date of the discovery of the loss and its connection with the release in question.” Although the statute does not state what is meant by “discovery” the court relied upon numerous prior decisions as to other statutes and other aspects of CERCLA to conclude that it is based upon the constructive knowledge of the trustee. The court went on to clarify that the knowledge of the agency, including the knowledge of any prior trustee, would be imputed to the present trustee.  Accordingly, the determination of whether there was NRD related to the discharges would require an analysis of when the trustee knew or should have known that there was an injury to the natural resource related to the discharges, which would commence the running of the time for bringing an action. With this ruling in hand, the court analyzed the facts as to each site and each defendant, dismissing some claims and allowing others to continue.

This case demonstrates that there courts will take a rational approach in considering the relationship between knowledge of a discharge of contaminants and the commencement of NRD claims. The interests of the government to pursue recovery of NRD, while important, will not allow the government to be inattentive to their statutory obligation to act promptly to seek to enforce these rights.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

Tags: CERCLA, Contamination, Environmental Law, Ground water, Groundwater, Natural Resource Damages, NRD, Pollution, Statute of Limitations

• Defense Litigation , Environmental Law , Natural Resource Damages
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SteveK July 16th, 2010

On June 12, 2010, in Mereno v. American Home Products, Inc., the New Jersey Appellate Division affirmed the dismissal of a claim by Mark Moreno and his mother of defectively manufactured oral polio vaccine (OPV) which had been administered to plaintiff resulting in a brain tumor and permanent disabilities. It was claimed that the vaccine used was defective because the manufacturer failed to screen for infective Simian Virus 40 (SV40).  Since plaintiffs were unable to identify the responsible manufacturer, they named all the companies licensed to manufacture OPV at the relevant time. The Court affirmed that summary judgment was appropriate even though discovery was not complete, because the plaintiff could not show that the outstanding discovery would supply information relevant either to lead to the identity of the manufacturer or to any theory of collective liability.

In analyzing the plaintiffs’ claims of collective liability, the court first considered whether the law of New Jersey or the law of New York applied as evidence indicated that the OPV was administered in New York; however, the plaintiffs have resided in New Jersey for over 35 years. The Court reviewed the various theories of collective liability and concluded that under the laws of both states, they could not be applied in this case.  The court distinguished a New York decision applying market-share liability to the manufacturers of another drug, DES, because the injury did not result from the defective design of the drug, as with DES, but was due to the failure of a manufacturer to comply with federal regulations relevant to screening and neutralization of SV40 and “and produced a defective or deviant vaccine.” The Appellate Court, therefore, concluded that the failure of a single manufacturer to comply with proper manufacturing processes and procedures did not warrant imposition of liability on all the manufacturers of the same product.

This decision continues to reinforce the requirement of proper product identification, and the need for the plaintiff to prove causation-in-fact, and further reviews the limited grounds where a court will shift the burden to defendants to distinguish their product or actions from that of other defendants.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

Tags: collective liability, drug liability, Environmental Law, insurance law new jersey, OPV, oral polio vaccine, Products Liability Defense, SV40, Toxic Torts

• Bodily Injury Defense , Defense Litigation , Environmental Law , Toxic Torts
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SteveK July 9th, 2010

On June 2, 2010, in United States v. Aerojet, the Court of Appeals for the 9^th Circuit allowed non-settling PRPs to intervene, by right, to challenge a CERCLA settlement. By this decision, the 9^th circuit joined the 10^th circuit (See, the December 8^th post reporting on U.S. v. Albert Investment) and the 8^th circuit (U.S. v. Union Electric, a decision from 1995) in ruling that a non-settling PRP has a right to contribution under CERCLA that satisfies the requirements for intervention under the federal rules.

The case involved the U.S. reaching a settlement with a group of PRPs to contribute $8.1 million towards an $87 million cleanup. As usual, the consent decree provided contribution protection to the settling PRPs. As is required, the Department of Justice filed a suit filed to perfect the settlement by a consent decree. After posting the consent decree in the Federal Register, a group of non-settling PRPs filed objections to the settlement. As they were not satisfied that their interests were properly addressed, the non-settling group filed a motion to intervene. The trial court denied the motion which was appealed to the 9^th Circuit and reversed.

The focus of the 9^th Circuit’s decision was whether the settlement would extinguish the non-settling PRP’s contribution rights under Section 113(f)(2) of CERCLA. In evaluating the right to intervene under Federal Rules of Civil Procedure 24(a)(2) and Section 113(i) of CERCLA, the court identified the interest at issue as the PRP’s contribution rights and  ensuring that the consent decree “embodies a fair and reasonable allocation of liability.” The court determined that entering the consent decree would cut off the non-settling parties’ contribution rights against those that settled. This, the court held, provided the non-settling parties a protectable interest. In addition, the court noted that settlement may result in the non-settling PRPs becoming responsible for the remaining amount of the cleanup costs.  This would bring into question the defined interest of an appropriate allocation of liability.

This decision brings the majority view to one that favors intervention.  This approach will likely encourage the government to seek global settlements of CERCLA matters, provide encouragement for parties to develop settlements that include all the major parties or groups, and provide greater leverage to certain parties or groups of parties in CERCLA settlement negotiations.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

Tags: CERCLA, Environmental Law

• Environmental Law
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SteveK July 7th, 2010

Todd Ruback, of counsel to the firm, who concentrates his practice in technology and privacy law recently participated in ESI Report,  entitled Cloud Computing, Data Breaches & Case Update discussing the benefits and burdens associated with cloud computing.  The podcast can be heard at http://legaltalknetwork.com/podcasts/esi-report/2010/05/cloud-computing-data-breaches-case-update/

Tags: Privacy Law, Technology Law

• Privacy Law , Technology Law
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SteveK July 7th, 2010

Retired Judge Harriet Derman, who heads our alternative dispute resolution team, was named by Governor Chris Christie to his newly constituted Judicial Advisory Panel.  The mission of the seven person  Panel is to provide the Governor with “independent and objective counsel… regarding the suitability of candidates under consideration for judicial appointment.”  Judge Derman will assist in the vetting of judicial candidates for the trial court.

Tags: ADR, Arbitration

• Alternate Dispute Resolution (ADR) , Mediation , Special Master
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SteveK May 3rd, 2010

Judge Harriet Derman retired from the Bench in Somerset County where she had been the Presiding Judge of the Equity Division for Somerset, Hunterdon, and Warren Counties and the Probate Judge for Somerset County. She now leads the Alternative Dispute Resolution (ADR) team at the firm and also provides case management and special master services.

Judge Derman’s experience as a practicing attorney includes tax (she has an L.LM. in tax from New York University), corporate, securities, contract negotiation, real estate, estate planning and estate administration, and planned real estate development. As a civil trial judge in Middlesex and the Presiding Judge of the Civil Division in Somerset Counties, Judge Derman tried and settled thousands of personal injury matters, ranging from slip and fall and UM/UIM and malpractice cases to complex, multiparty litigation. The Judge also handled employment litigation, trying and settling sexual harassment, CEPA, and workplace discrimination cases, as well as several million-dollar construction defect and injury cases.

In the Chancery Court, Judge Derman oversaw matters dealing with corporate and partnership matters, with many cases emanating from family succession issues, quiet title actions with emphasis on easements, medical and other restrictive covenant questions, as well as securities and trade secret disputes. Judge Derman considers her experiences in practice, handling estate administration and estate planning, as having served her well as Probate Judge in Somerset County where she tried and settled Will contests and elective share, undue influence, breach of fiduciary duty, and fiduciary accounting cases, among other matters. Judge Derman is also a member of the American College of Trust and Estate Counsel.

Judge Derman’s service in the Family Division provided the experience to provide the child custody and parenting time arbitration services recently approved by the Supreme Court in Fawzy v. Fawzy, 199 N.J. 456 (2009), as well as mediation or arbitration services with regard to alimony, child support, equitable distribution, and relocation.

The firm is pleased to have Judge Derman join the firm to lead us in the growing field of ADR. She is available to assist litigants in resolving disputes in a prompt and cost-effective manner.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including Alternate Dispute Resolution. For additional information about the matters in this bulletin or in the firm’s ADR practice, please contact Judge Harriet Derman, Ret. who heads the firm’s ADR Practice Group.

Tags: ADR, Arbitration, Mediation, Special Master

• Alternate Dispute Resolution (ADR) , Mediation , Special Master
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SteveK April 29th, 2010

In the recent unreported decision, Proformance Insurance Co. v. Riggins, the New Jersey Appellate Division addressed a dispute between two insurers as to the responsibility to pay for the demolition of a home necessary for implementation of cost effective environmental remediation, holding that the cost of demolition was not excluded by the owned property exclusion.  In the case, Proformance insured the property owned by Don Kolbe from 2002 until 2004, and MetLife insured it from 2004 until 2006.  A leak was discovered from the underground eating oil tank in 2006.  It was undisputed that the tank had been leaking for four to eight years prior to the discovery.

Proformance acknowledge its obligation to provide coverage, and engaged two consultants to evaluate the options to remediate the property. Each consultant provided two options, one that required demolition of the house, the other allowed the house to remain with structural supports during the process of remediation.  The cost of the demolition option cost approximately $145,000 less than the support option. Proformance elected the more cost effective option.  MetLife agreed to contribute to the remediation, but not for the costs related to demolition, arguing that it constituted damage to owned property. The Court disagreed finding that the house was not damaged by the contamination and that the destruction to the house was not due to “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The Court held that the decision to destroy the house was “simply a function of the decision to employ the most cost-effective means of addressing covered claims, rather than the product of any ‘occurrence’ as defined in the MetLife policy.”  Accordingly, the Court concluded that the exclusion did not apply. The Court further stated that it saw no rational basis to extend coverage for the costs of the structural option but excluding coverage for the less expensive option of reimbursing the homeowner for the demolition of the residence.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and insurance matters. For additional information about the matters in this bulletin or in the firm’s environmental  or insurance practice, please contact Steven A. Kunzman, Esq. who heads the Environmental and Insurance Coverage Practice Groups.

Tags: Environmental Law, NJ insurance law

• Environmental Law , Insurance Law
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SteveK April 26th, 2010

In the recent decision in Agere Systems, Inc, et. al. v. Advances Environmental Technologies, LLC, et. al., the 3^rd Circuit Court of Appeals continued the discussion of the complex interaction between sections 107(a) and 113(f) of CERCLA. Agere involved a case from the Eastern District of Pennsylvania related to the Boarhead Superfund Site. The EPA commenced a 107(a) action against Cytec, Ford and SPS on June 2, 2000 by filing a complaint along with a consent decree for OU-1. Cytec, Ford and SPS subsequently entered into a separate settlement agreement with Agere, TI and two other companies to collectively fund and perform work for OU-1. The EPA subsequently commenced another 107(a) suit against Cytec, Ford and TI by filing a complaint and a second consent decree related to OU-2.  A private settlement agreement was entered into by the three companies with Agere, which assigned its rights for cost recovery to the group. The parties that had settled subsequently brought an action against Carpenter Technology Corporation to recover costs. After trial, the District Court held Carpenter liable, and allocated a significant share to Carpenter, including an enhanced share based upon the court finding that Carpenter had significant culpability in creating the Superfund site and because of its lack of cooperation in cleaning up the site.

The 3^rd Circuit identified six essential challenges present by Carpenter: 1) the 113(f) claim was time-barred because Carpenter did not share a common liability with the plaintiffs since the EPA claim was filed after the expiration of the time for the filing of such actions, 2) Agere and TI cannot bring a 107(a) action for sums paid in a private settlement with other plaintiffs, as opposed to sums paid by the other parties to the EPA, based upon the provisions of 107(a), 3) the plaintiffs that signed the OU-1 and OU-2 Consent Decrees do not have rights to sue under 107(a); only section 113(f) claims may be pursued, 4) Cytec, Ford, SPS and TI failed to present competent evidence of the total waste they disposed of at the site, and therefore the allocation of liability by the District Court was flawed, 5) the allocation was flawed by a miscalculation of volumetric shares in that the court did not consider the culpability and lack of cooperation of the plaintiffs, and improperly relied upon volumetric shares rather than the dollar amounts collected from the settling defendants, and 6) the limitations of the plaintiffs claims under section 107(a) of  CERCLA should apply to the similar provision in related Pennsylvania law.

The 3^rd Circuit carefully explored each issue and remanded the case to the District Court for further findings. The district court was directed to make further findings on facts related to whether certain claims were time-barred. In addition, the district court was required to make determinations as to the waste volumes based upon appropriate evidence.

The most significant aspect of the decision is the Circuit Court’s exploration of the interaction between Section 107(a) and 113(f) as developed in United States v. Atlantic Research Corp. 551 U.S. 128 (2007). The Court noted that in Atlantic Research the Supreme Court held that 107(a) “permits a PRP to recover only the costs is has ‘incurred’ in cleaning up a site,” and that payment to settle a claim does not constitute the incurring of response costs. Since the money paid by TI and Agere to settle the case was placed in a trust to fund the actual work at OU-1 and OU-2, the requirement that the claim be for recovery of response costs was satisfied. The 3^rd Circuit concluded that the Supreme Court did not intend to exclude all settlement payments, particularly where the funds were not reimbursement of costs incurred by others, but were actually used to fund the remedial work.  The Court went on to distinguish the Supreme Court’s statement that the parties that could not make 107(a) claims could still maintain a claim under Section 113(f), noting that it was not intended to provide the opposite; that is, that a party that was precluded from a 113(f) claim would not have a 107(a) claim.  In this case neither Agere nor TI were able to maintain 113(f) claims for contribution because neither were sued by the EPA or the other PRPs. The Court concluded that Congress could not have intended to “penalize cooperative cleanup efforts by excluding from CERCLA’s broad recovery provisions all PRPs who, like Agere and TI, have come forward and assist[ed] in a cleanup even though they have not been subjected to cost recovery suit.” The Court found that such a result would be contrary to the goal of CERCLA “to encourage private parties to assume the financial responsibility of cleanup by allowing them to seek recovery from others.”

The 3^rd Circuit then went on to consider the 113(f)/107(a) issues regarding the defendants sued by the EPA: Cytec, Ford and SPS. Carpenter argued that those parties had only 113(f) claims since once a party settles the 107(a) claims, it is only entitled to assert 113(f) claims.  The Court noted that the issue of whether a party in the position of Cytec, Ford and SPS may bring a 107(a) claim in addition to a 113(f) claim was left open in Atlantic Research. The 3^rd Circuit noted that if the parties had rights under 107(a) as well as 113(f), the trial court, on remand, could impose 100% of the liability on Carpenter. Further, Carpenter would not be able to resolve this by a Section 113(f) counterclaim since the parties that had settled with the EPA would be shielded from liability under section 113(f)(2).  The Court agreed that this would be a perverse result since the primary goal of CERCLA is to have polluters pay.

The remand to the trial court, therefore, required the court to explore significant issues regarding whether certain aspects of the claim were time barred, and to conduct a fact intensive analysis to support an allocation among all parties.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

Tags: CERCLA, Environmental Law

• Environmental Law
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SteveK April 12th, 2010

In Davanne v. Edison, (see previous blog entry of Feb. 19,2010) Martin Allen successfully argued before the New Jersey Supreme Court that the 8th Amendment prohibition against unreasonable and excessive fines does not apply to a dismissal of a tax appeal because of an income producing property owner’s failure to respond to a request from a tax assessor for income and expense information.

More recently, in Stellakis v South Plainfield, an unreported decision of the Tax Court, we argued, and the Court determined that taxpayer’s counsel failed to present any evidence at the County Tax Board despite calling the Assessor as his witness and referring him to comparable sales referred to in a settlement letter. The Tax Court, after reviewing an audio recording of the County Board hearing, held that the hearing was a sham and dismissed the Tax Court appeal pursuant to N.J.S.A. 54:51A-1(c), which precludes review by the Tax Court if the County Board matter was dismissed for lack of prosecution.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in real estate tax appeals. For additional information about the matters in this bulletin or in the firm’s real estate tax appeal group, please contact Martin Allen, Esq

Tags: Local Government Law, Tax Appeals

• Municipal Law , Real Estate , Tax Appeals
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SteveK April 12th, 2010

On April 5, 2010 the NJ in Buttitta v. Allied Signal, Inc. et.al. the Appellate Division affirmed the largest award in an asbestos/mesothelioma case in NJ. The jury awarded the plaintiff widow and family $8,000,000 for pain and suffering, $2,000,000 for loss of consortium, $9,281,660 for loss of earnings, $2,030,544 for loss of services and $3,000,000 to each of the three children for loss of parental care and guidance. The award against Borg-Warner and the Canadian mining company, Asbestos Corporation, Ltd. (ACL), was in addition to funds collected from settling parties, General Motors, Honeywell (for Bendix brake products) and C.L. Zimmerman a distributor of ACL asbestos. (This office represented Zimmerman, which settled during trial.) Borg-Warner and ACL challenged this significant award on numerous grounds, including causation, failure of the court to exclude testimony of numerous experts, and the failure of the court to allow the defendants to submit interrogatory responses of settled parties to the jury for the purpose of allocating responsibility to those settled parties, as well as the refusal of the court to include the settled parties on the verdict sheet, also for the purpose of allocating liability. ACL also challenged the striking of its defenses based upon their inability to produce certain documents required in discovery due to Canadian laws that prohibited production of the information requested.

The decedent, Mark Buttitta, had worked as a parts picker at a GM facility in summers while a student at Colgate University. His father had also worked at the same facility while Mark was growing up. It was claimed that Mark was exposed to asbestos from the parts and the accumulated dust in the GM parts warehouse, and also from the asbestos in the dust on his father’s clothing when Mark was growing up. Mark contracted mesothelioma in his early 50’s and died leaving a wife and three daughters in their teens and early 20s. Claims were asserted against the manufacturers and distributors of asbestos containing automotive parts including brakes and clutches, as well as the companies that mined and distributed asbestos to GM for the manufacture of brakes and clutches.

The Appellate Court affirmed all of the procedural and evidentiary decisions of the trial judge and the jury award. In doing so it concluded, based upon the uncontradicted expert testimony, that mesothelioma “is associated with the ‘the smallest’ exposure to asbestos and can develop from the cumulative effects of minimal and infrequent exposure.” The Court also affirmed the ruling that the responses to interrogatories of GM, which had settled before the start of trial, were not admissible by defendants under the rules of court, which permit use of interrogatories as statements of any party, since GM was no longer a party to the litigation. Borg-Warner, the court also held, “bore the burden of presenting a basis for allocation of percentages of fault in order to reduce its individual percentages of fault, which it failed to do.” In short, there was no evidence presented at trial to support the claims against the settled parties.  Accordingly, the Court concluded that it was correct that the settling parties were not included on the verdict sheet to permit the jury to allocate percentages of liability to any party other than the remaining defendants, Borg-Warner and ACL.

A significant question raised in this decision involves the ruling prohibiting the use of the interrogatories of settled parties to prove cross-claims so that the jury can assign liability to settled defendants.  This raises questions where joint defense groups are careful not to develop independent evidence to support cross-claims. This, of course, only present a question if parties settle during or immediately prior to trial when it is too late for the remaining parties to adequately develop the necessary evidence and expert testimony. In the usual case, independent settlement is always a possibility at any time. Accordingly, defendants will need to develop a manner to develop appropriate evidence to support cross-claims in the event they become the last party in a case.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, PC ( www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contact Steven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.

Tags: Asbestos, Mesothelioma, Products Liability Defense, Toxic Torts

• Asbestos , Bodily Injury Defense , Defense Litigation , Environmental Law , Products Liability , Toxic Torts
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