Saturday, March 18, 2017

NJ Spill Act decision: Sentence First – Verdict Afterwards?

Gibbons law firm attorney Paul M. Hauge writes: 

The New Jersey Spill Compensation and Control Act (Spill Act) has long included a contribution provision that permits private parties to recover cleanup costs incurred to the extent that they exceed their equitable share of those costs. In its recent opinion in Matejek v. Howard, the New Jersey Appellate Division interpreted the statute to give private parties another powerful remedy: the ability to compel other private parties who may be responsible for the contamination to participate in the investigation of the contamination, even before any findings about their respective responsibility.
The case arose in Hillsborough, where the Department of Environmental Protection (DEP) removed underground tanks from five units in a condominium project after oil was discovered in a nearby stream. After confirming the absence of oil in the stream a few months later, DEP took no further steps. Seven years later, with DEP’s file on the matter still open, the owners of one of the units sued the owners of the other four units, seeking to compel them to participate in and equally share in an investigation and, if necessary, cleanup of their property.

Even though there was no evidence about the precise source(s) of the contamination, the trial court found the fact that DEP had removed all five tanks to be sufficient grounds to order all of the other owners to participate in the investigation. The plaintiffs were ordered to retain a licensed Site Remediation Professional (LSRP), as required by the 2009 Site Remediation Reform Act (SRRA). The LSRP would render a report as to whether remediation was required; if so, the parties would share equally in the costs. The owners of one of the other units challenged the order, pointing to the lack of evidence that their tank had caused any contamination, and arguing that the Spill Act did not permit the relief that the trial court had granted.
The Appellate Division affirmed, noting that even though the plaintiffs’ claim was likely not what the Legislature had in mind when it enacted the Spill Act’s contribution provision, the SRRA fundamentally altered the way remediation (investigation and cleanup) gets done. The initiation of the process no longer requires any DEP action or findings. Instead, private parties who are aware of discharges on their property bear the burden of remediation and must hire an LSRP to oversee and, eventually, approve the work and submit those findings to DEP. Only at that point, the appellants argued, would the plaintiffs have any claim.
Not so, said the Appellate Division, agreeing with the trial court’s determination. It would be inequitable to force one property owner to bear all the costs of investigation and cleanup (and thus removing the encumbrance on their title). Where the law provides no remedy to ease that unfair burden, equity permits a court to fashion a remedy, even though the Spill Act itself does not provide for such a remedy. The Appellate Division cited two factors as supporting the trial court’s de facto expansion of the Spill Act’s remedies through the creation of what may be described as a provisional or anticipatory contribution right.
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