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EPA releases Draft Clean Water Strategy and seeks further comment.

SteveK — Fri, 20 Aug 2010 19:06:59 +0000

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

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

SteveK — Tue, 17 Aug 2010 14:39:46 +0000

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.

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

SteveK — Tue, 17 Aug 2010 14:35:56 +0000

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 9^tCircuit, U.S. v Aerojet, and the 10^th 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 (1^st Cir. 2001).

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

SteveK — Tue, 17 Aug 2010 14:32:59 +0000

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.”

District Court holds the Statute of Limitations for NRD claims under CERCLA is triggered by constructive knowledge of injury by Trustee.

SteveK — Sat, 17 Jul 2010 12:26:00 +0000

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.

Appellate Division rejects application of collective liability to claim related to oral polio vaccine.

SteveK — Fri, 16 Jul 2010 18:20:08 +0000

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.

9th Circuit Joins Other Circuits Allowing PRP to Challenge CERCLA Settlement

SteveK — Fri, 09 Jul 2010 14:00:06 +0000

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.

Todd Ruback podcast on cloud computing.

SteveK — Wed, 07 Jul 2010 20:40:26 +0000

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/

Judge Harriet Derman (Ret) named to Judicial Advisory Panel.

SteveK — Wed, 07 Jul 2010 20:33:29 +0000

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.

Judge Harriet Derman, retired NJ Superior Court Chancery Division, has expanded the firm’s alternate dispute resolution services.

SteveK — Mon, 03 May 2010 18:14:03 +0000

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.