Archive for the tag 'NRD'

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

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.

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