Archive for August, 2010

EPA releases Draft Clean Water Strategy and seeks further comment.

SteveK August 20th, 2010

On August 20, 2010, the EPA posted its Draft Clean Water Strategy for review and comment. The Draft resulted from the Coming Together for Clean Water Conference which was hosted by EPA Administrator Lisa P. Jackson this past April. The Draft identifies the challenges to continuing the efforts launched by the 1972 passage of the Clean Water Act. While acknowledging the significant progress that has occurred since then, the community involved recognizes that much more needs to be done to revitalize the resources. The Draft further presents the significant economic benefits which can be realized from having clean water and in taking the actions and building the infrastructure to achieve the goals. The Draft demonstrates the continued viewpoint that environmental protection is not a drain on economic growth but a significant component of our development.

A copy of the Draft, information on the April conference, and information on providing comments on the draft, can be found on the EPA website at: http://blog.epa.gov/waterforum/ Comments will be accepted until September 17, 2010.

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

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NJ Trial Court Rules against NJDEP on NRD claim for failure to prove compensable harm or loss.

SteveK August 17th, 2010

In NJDEP v. Essex Chemical Corporation, a trial court of the New Jersey Superior Court recently ruled that the NJDEP had failed to prove that contamination to ground water resulted in compensable harm or loss entitling the State to an award of natural resource damages (NRD.)  Essex Chemical had owned and operated a facility where chlorinated volatile organic compounds were handled and later found in ground water. Essex commenced remedial actions under New Jersey law in 1984 and has continued to meet their obligations to conduct site remediation to the present day.

The NJDEP commenced an action for NRD in 2007, contending that the contamination to the ground water has resulted in a compensable loss to the people of the State and entitles the State to damages under the NJ Spill Act. The evidence at trial demonstrated that the remedial work was approved by the NJDEP and complied with the regulations governing site remediation (Tech. Regs.). The State’s expert on resource economics utilized a resource equivalency approach (REA) to support his damage evaluation, positing that the value of the loss can be based upon the cost of land that would support the same recharge to the ground water of the area contaminated. The Court rejected the expert’s opinion holding that it was not convinced that the method of calculation of compensatory damages was proper for the resource in question. The Court acknowledged that the REA approach was appropriate for loss of wildlife (e.g. fish, birds), or where the contamination has an effect on human health. Where, however, no such harm was identified, the Court did not accept the expert’s method of assigning values “to things that are normally invaluable,” presented as “non-use” values.  Since there was no evidence that the land in question will be developed nor any evidence that there was an intention to use the ground water or what it’s “non-use” value would be, the court found in favor of Essex Chemical and dismissed the claims.

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.

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Remaining defendant is liable for past costs not covered by CERCLA consent decree.

SteveK August 17th, 2010

In U.S. v. Iron Mountain Mines, the U.S. District Court for the Eastern District of California granted summary judgment to the plaintiffs against Iron Mountain Mines and T.W. Arman for past costs which had not been resolved in a consent decree in which claims against other PRPs at the Iron Mountain Mines Superfund Site were settled.  The plaintiffs had previously settled with the other PRPs for approximately $154 million of insurance to cover future cleanup costs over 30 years, $10 million for natural resource damages, and an additional $7 million for future clean up not covered by the insurance. The defendants argued that the settlement amounts well exceeded the $26 million in past costs that had been incurred prior to February 29, 1996 which were being sought from them, therefore providing plaintiffs complete recovery.  Defendants argued, further, that it would not be known until after the 30 year period for payment of cleanup under the insurance policy whether the plaintiffs would not be made whole. The plaintiffs argued that no money had been received for the past costs.  The Court agreed with the plaintiffs, finding that the consent decree did not address past costs, but only future remedial costs and NRD. Since Section 113(f)(3) of CERCLA permits suit against non-settling responsible parties if the relief obtained in a settlement was not complete, the Court held for the plaintiffs.

This decision points to the essential need for a party to be informed in every step in the negotiation of a settlement, particularly if they are not a party to the settlement. As in the recent decisions of the 9t Circuit,  U.S. v Aerojet, and the 10th Circuit, U.S. v Albert Investment Co., it s important to take an active position, and where appropriate move to intervene,  on a motion or action to approve a CERCLA consent decree. Indeed, it has been acknowledged that CERCLA can impose harsh results on non-settling PRPs. See, United States v. Davis, 261 F. 3d. 1, 28 (1st Cir. 2001).

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.

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9th Circuits holds owner of property at time cleanup costs are incurred is the owner under CERCLA

SteveK August 17th, 2010

On July 22, 2010, in State of California v. Hearthside Residential Corp., the court addressed a question of first impression: “whether the ‘owner and operator status under [CERCLA] is determined at the time that cleanup costs are incurred or instead the time that a recovery lawsuit seeking reimbursement is filed.” The concluded that the owner is determined at the time cleanup costs are incurred.

Hearthside had purchased property known as Fieldstone Property in Huntington Beach, California with the knowledge that it was contaminated with PCBs. Hearthstone entered into a consent order with the State in which it agreed to remediate the property, then sold to the property to the California State Lands Commission. The State determined that the adjacent residential site was also contaminated with PCBs which it alleged had migrated from the Fieldstone Property. The State considered Hearthstone responsible; however, Hearthstone disagreed, contending that it was not the owner when the suit was filed. The State, therefore, contracted to remediate the property and subsequently filed a complaint against Hearthstone.

Since CERCLA does not provide a clear answer to the issue of when a party is considered an owner for purposes of liability, and no case dealt with the issue directly, the court considered other aspects of the statute. The court concluded that the issue best aligns with CERCLA’s statute of limitations. Since the limitations provisions are triggered either (1) at the completion of a removal action, or (2) at the initiation of the remedial action, the court concluded that it was the intent of Congress was to have the statute of limitations “run against (and protect) the owner of the property at the time the cleanup occurs.” The court reasoned that if Hearthstone’s argument were accepted, “an owner could sell a recently cleaned piece of property to an innocent owner one day before the statute of limitations runs, with the result that the new owner would bear full cleanup liability under CERCLA if a recovery action was later timely filed.” Accordingly, the court saw this as contextual evidence of Congressional intent that the owner at the time of cleanup was to be considered the owner for the purpose of CERCLA liability.  In addition, relying on the date of filing of the cost recovery action contradicts the intent to have early settlements. In essence, Hearthside’s approach would require the filing of a suit in order to determine the date of ownership.  In addition, since the owner at the time of cleanup can help determine the scope of cleanup, “it follows that the same owner should be responsible for the cost of the remediation program that it had the opportunity to influence.”

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.

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