Archive for September, 2011

U.S. Supreme Court adopts the “cat’s paw” theory of liability in an employment case.

SteveK September 21st, 2011

In a decision that may have wide ranging impact on New Jersey employment practice the U.S. Supreme Court adopted the “cat’s paw” theory of liability under the Uniformed Services Employment and Reemployment Rights Act (USERRA), a statute designed to protect those in the military from discrimination. USERRA, is similar to Title VII; therefore, the opinion is likely to be applied to Title VII matters, and potentially to matters arising under the New Jersey Law Against Discrimination (NJLAD). The cat’s paw theory of liability is defined as a situation where one person is used by another to accomplish their purpose. Thus, where the employer (the cat) is influenced by an employee’s discriminatory animus toward another (the cat’s paw) resulting in an adverse employment action, the employer may be liable to the adversely affected employee.
In Staub v Proctor Hospital, the Supreme Court reversed a decision by the Seventh Circuit absolving an employer of liability where the decision maker relied on the report of a supervisor to terminate an employee. The Supreme Court ruled that where the decision maker was influenced by the supervisor’s anti-discriminatory motives (in this case based on the employee’s service in the military), the employer is liable to the terminated employee for damages where a causal connection exists between the employers’ action and the discriminatory motives of the supervisor.
Given the dearth of New Jersey case law on this subject, Courts will need to answer the question whether the decision maker was influenced by the alleged discriminatory motives of a supervisor; an inherently fact specific inquiry. This may cause more cases to survive motions for dismissal or summary judgment in employment cases prior to trial.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum PC (http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of parties in employment matters. For additional information about the matters in this bulletin or in the firm’s Employment Practice, please contact Richard P. Flaum, Esq.

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.

 

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NJ Federal District Court dismisses CERCLA Section 113 and private nuisance claim by subsequent property owner that conducted voluntary cleanup.

SteveK September 2nd, 2011

On August 13, 2011, the Federal District Court for the District of New Jersey continued to clarify the limits of Section 113 claims under CERCLA and  also addressed common law claims of a subsequent property owner in Queens West Development Corporation v. Honeywell International, Inc. Plaintiff acquired property formerly operated by Warren Chemical Works, which was subsequently acquired by Honeywell. The property was contaminated from discharges of substantial amounts of creosote, coal tar, and related substances. The property was to be redeveloped by plaintiff for residential, commercial and recreational uses. Plaintiff claimed to have incurred over $16 million in investigation and remediation costs, and anticipated total response costs that would be equal to or exceed $20 million. Defendant moved for dismissal of various counts of the complaint including claims in Count Two of the Complaint, under Section 113 of CERCLA, claims in Count Three for common law private nuisance, and claims in Count Four for restitution.  In deciding the case, the Court addressed the intersection between claims under ‘ 107 of CERCLA and Section 113. The Court noted that the case presented a unique issue: “whether a party that voluntarily undertakes a cleanup action can maintain a claim for contribution under § 113(f)(3)(B), when it has simultaneously asserted a claim for cost recovery under § 107(a).” The Court noted that courts have explained that Section 107 “authorizes the United States, a state, or `any other person’ to seek reimbursement for all removal or remedial costs associated with the hazardous materials on the property, provided that those actions are consistent with the National Contingency Plan, and that the United States Supreme Court held in Atlantic Research that the “plain language” of § 107 “authorizes cost-recovery action by any private party, including PRPs.” As a result, a private party is not required to establish its own liability in order to assert a claim under  Section 107. Section 113(f)(3)(B), however, allows the assertion of a right of contribution only “to PRPs that have settled their CERCLA liability with a [S]tate or the United States through either an administrative or judicially approved settlement.” Since Plaintiff had voluntarily incurred the response costs, is not a PRP, and did not enter into an approved settlement or resolved all their liability to the U.S. or the State of New York, they could not maintain the  Section 113 claim. Thus, the Court dismissed the  Section 113 claim contained in the Second Count.

The Court next addressed the claims for private nuisance. As the proceeding was in New Jersey, but involved New York property, the Court considered the law of private nuisance in both jurisdictions. The Court concluded that the law was the same, and that although a private nuisance “consists of an interference with one’s interest in the private use and enjoyment of land” it only applies to interference with use of adjoining land, not to subsequent owners of the same property.

Finally, the Court refused to dismiss the restitution claim. Defendants argued that it should be dismissed since it is preempted by CERCLA. The Court refused to dismiss the claim, however, since it remained an alternative common law claim that would survive if the Plaintiff fails to prove the claim under  Section 107 of CERCLA.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, 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 App. Div. dismisses Spill Act contribution claim due to primary jurisdiction of NJDEP.

SteveK September 1st, 2011

In Magic Petroleum, Inc. v. Exxon Mobil, the New Jersey Appellate Division dismissed, without prejudice, Magic’s claim for contribution of remedial costs against Exxon due to NJDEP’s primary jurisdiction of the remedial investigation at the plaintiff’s property. Plaintiff had been the subject of an administrative consent order (ACO) to investigate and remediate contamination at its property resulting from leaking underground storage tanks.  Plaintiff contended that the majority of the contamination came from the neighboring Exxon station and refused to comply with its obligations under the ACO until the NJDEP required Exxon to participate in the investigation. Magic litigated its obligations under the ACO through administrative proceedings, and was required to follow the order. Magic, however,  continued to refuse to conduct the investigation, insisting that the investigation should be imposed upon and shared by Exxon. The NJDEP eventually took over the investigation of the plaintiff’s property. Magic then commenced a contribution action against Exxon.

Exxon filed a motion to stay or dismiss the proceedings, without prejudice, pending the NJDEP’s investigation and remediation of the Magic property, arguing that the NJDEP’s efforts must precede any decision by the court. The trial judge dismissed the case, deferring to the NJDEP’s primary jurisdiction. The Appellate Division affirmed.  The Appellate Court noted that under the doctrine of “primary jurisdiction” a court may defer to an agency where the resolution of an issue is within the special competence of the agency. The court further noted that private contribution rights under the Spill Act require the court to allocate responsibility for remediation costs, but that the initial determination of whether a party is responsible can be decided by the NJDEP, and that “only the DEP can define the contaminants, determine the extent of the discharge, identify the authorized forms of investigative testing, and permissive methodology of cleanup.” Furthermore, “to be entitled to reimbursement and contribution under the Spill Act, a party must obtain written approval under from the DEP of the investigation and proposed remedial action.”  Accordingly, the court concluded that these decisions were within the scope of the special expertise of the DEP and should be determined prior to the case being able to proceed.

This decision demonstrates that a responsible party under the Spill Act that does not conduct investigation and remediation, but allows it to be done by the State, does so at its peril. To do so may have a significant impact in the party’s ability to pursue a contribution claim against other responsible parties, as it allows the NJDEP to determine and define the scope of the investigation, remediation, and possibly to potentially influence any future contribution claim or allocation. It is interesting to consider the effect of the Site Remediation Reform Act (SRRA) on the statements by the court that the DEP will define the contaminants, the extent of the discharge, the forms of investigation and the method of cleanup. Under the SRRA these determinations can be made by a Licensed Site Remediation Professional (LSRP), in accordance with the regulations for site investigation and remediation, referred to the Tech. Regs.  Accordingly, it is may not be that the DEP has to make these decisions. This points, again, to the importance of the party seeking contribution to address and control the response to be able to develop the information, and assert and control the contribution claim.

DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, 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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