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New Jersey Files Lawsuit Against ExxonMobil For Gloucester County ContaminationMarch 8, 2019

The State of New Jersey filed a six-count lawsuit against ExxonMobil seeking damages for alleged dumping activity in East Greenwich Township and Paulsboro Borough dating back to the 1950s. The lawsuit includes claims for Natural Resource Damages.  According to the news release by the New Jersey Department of Environmental Protection (NJDEP), the property was used by Mobil Corp. to dispose of drums containing petroleum products and other hazardous substances resulting in PCB contamination.  These activities, according to NJDEP, resulted in discharges to adjacent wetlands and waterways, which flowed directly to the Delaware River, supporting the Natural Resource Damages claims.

Notably, this is the fifth case brought by the Attorney General for Natural Resource Damages since the beginning of 2018.  This lawsuit is also the first one filed by New Jersey against ExxonMobil since the widely publicized, and controversial, settlement with ExxonMobil for claims related to its Bayway and Bayonne refineries in 2015.  The change in Administration in Trenton has marked a vast shift in the State’s treatment of contamination and Natural Resource Damages.  Both the Attorney General, Gurbir Grewal, and NJDEP Commissioner, Catherine McCabe, in announcing this lawsuit, made statements indicating both an interest and willingness to bring claims against alleged polluters, including those related to the contamination of wetlands and New Jersey’s waterways.

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Appellate Division Upholds the ExxonMobil Natural Resource Damage SettlementFebruary 15, 2018

The New Jersey Appellate Division rejected an appeal from Environmental Groups and a former State Legislator of the New Jersey Department of Environmental Protection’s two administrative consent orders (ACOs) with ExxonMobil resolving a lawsuit over Natural Resource Damages (NRD) assessed at its facilities in Linden and Bayonne. The settlement was controversial as the $225 million was far less than what certain experts had originally estimated the damages to be. The Appellate Division upheld the ACOs, which had been approved by the trial judge. ExxonMobil still remains responsible for all clean-up and remedial costs related to contamination at those facilities.

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New Jersey Approves Constitutional Amendment to Earmark Monies for Environmental Clean-UpNovember 8, 2017

Nearly 70 percent of New Jersey voters approved a ballot measure on Tuesday that will ensure that monies paid by polluters will be used to actually clean-up contamination and that future governors will not be able to redirect the funds. This issue was on the ballot as the result of New Jersey’s settlement with ExxonMobil.  Governor Christie settled with ExxonMobil for more than $225 million but a cap of funds for natural resource damages meant that the majority of the damages collected would not be used for the restoration and remediation of contaminated land.  The outcome of the ballot question and the resulting constitutional amendment will cause controversy in determining if and how much money will be allocated to a particular site, if any,  for remediation and restoration but the money will have to be used for environmental restoration and not directed to the general funds.

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DEP Settles With Occidental in Passaic River LitigationSeptember 15, 2014

The final remaining party in the NJDEP Passaic River litigation with potential responsible parties, Occidental Chemical Corp. ("Occidental"), has been tentatively resolved.  The Attorney General and NJDEP Commissioner, Bob Martin, announced today the proposed settlement.  The settlement is subject to a public comment period and review.  If the settlement is approved, Occidental will pay $190 million to resolve the lawsuit.  The settlement proceeds are to reimburse the State for past cleanup and removal costs, natural resource damages and other related costs.

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NJDEP Fails to Establish Its Burden of Proof and Appellate Division Upholds Denial of Natural Resource DamagesApril 9, 2012

In New Jersey Department of Environmental Protection, et. al. v. Essex Chemical Corporation, the New Jersey Appellate Division affirmed a trial court decision that the New Jersey Department of Environmental Protection (NJDEP) did not carry its burden of proof that Essex Chemical Corporation (Essex) is responsible for natural resource damages. Essex owned property in South Brunswick, which it sold in 1985. Prior to the sale, Essex identified various locations where discharged hazardous, non-chlorinated and chlorinated chemicals had leaked into the soil and groundwater. Essex developed a plan with the NJDEP Site Remediation Program (SRP) to implement a remediation plan for the property.

From 1985 to 1992, Essex removed tanks, excavated contaminated soil and installed a pump-and-treat system to handle to groundwater contamination. In 2001, the system reached an "asymptotic mean," which means the system stopped removing contamination when the levels of contaminant dropped to very low amounts. Thus, Essex with SRP approval, implemented a new plan involving in-situ chemical oxidation, which involves the injection of a reactive solution into the groundwater to change the contamination into non-hazardous chemical by-products. This process worked and the western portion of the property was cleaned up. On the northern and western sides of the property, Essex implemented a soil vapor extraction system, which substantially reduced but did not eliminate the contamination.

Essex, with SRP approval, changed the remediation plan to add a pump-and-treat system to clean the groundwater. By 2004, the system reached an asymptotic mean and Essex, with SRP approval, added in-situ bioremediation, which reduced the soil and groundwater contamination to near or below pre-discharge restoration levels. Essex had spent $5 million to remediate and the SRP believed Essex had done what it needed to do for the remediation, although there was still minimal contamination in the bedrock.

Essex then began remediation of an adjacent property, which was contaminated as the result of Essex's operations. Essex proposed in-situ bioremediation to address the contamination on the adjacent property.

NJDEP offered two experts to support its claims for natural resource damages. These two experts proposed a plan to restore the shallow groundwater to pre-discharge levels within ten years by physically removing the contaminated groundwater and the associated soils by excavation and then flushing the remaining areas of contamination with clean groundwater by using a groundwater extraction trench. The cost associated with this plan was $5.7 million. NJDEP's expert testified that soil excavation is more expensive than other plans, such as bioremediation, but that it works better because the contamination is physically moved and that it would be completed within ten years.

Essex's expert testified that additional soil extraction was unnecessary and would be ineffective. He testified that NJDEP's plan would become ineffective when it reached its asymptotic mean and another technique would be required.  He testified that the in-situ bioremediation plan was a more effective treatment technology and had already worked well on the property. He testified that it was the most cost-effective plan and it could be re-applied if necessary until the property reached its pre-discharge conditions.

NJDEP also sought compensatory damages and presented an expert who testified that there are two approaches to measure compensatory damages. The first approach is a valuation approach, which seeks to directly value the resource. The other is a resource compensation or resource-to-resource approach, to determine how much restoration would be needed to offset the natural resource injuries. The expert utilized the "Resource Equivalency Approach" (REA), which involved NJDEP purchasing the property at a price based upon a market analysis, in order to protect that land from future contamination. Essex's expert testified that one must consider the natural resource's lost services when calculating the damages. He testified that NJDEP did not identify any lost services or uses from the contaminated groundwater, thus the natural resource damages would be zero.  He also testified that the plan to purchase the property was not an appropriate way to measure damages. He testified that that plan would provide natural resource uses beyond groundwater preservation and result in a windfall to NJDEP.

The trial court found that NJDEP did not meet its burden of proof. The trial court held that NJDEP did not show why the property needed to be remediated within ten years and why Essex's plan would not work. The trial court noted that there had been no injury to flora or fauna and that the groundwater contamination has not affected the health and/or safety of the people in New Jersey. Try trial court also found that NJDEP did not meet its burden regarding compensatory damages as NJDEP's expert utilized information regarding asking prices for residential, commercial and industrial properties within a 20-mile radius, which the court found inaccurate and insufficient. The court also questioned the REA method of calculation as there had been no harm to human health or wildlife.

NJDEP appealed the decision in part arguing that it should have been given deference as the trustee of the State's natural resources. The Appellate Division held that NJDEP still had to establish by a preponderance of the evidence that its plan should be implemented rather than Essex's plan and to establish the damages associated with the contamination. NJDEP also argues that Essex's plan does not include a timeframe for completion. The Appellate Division upheld the trial court's decision regarding natural resource damages and held that plaintiffs did not show that the groundwater contamination adversely affected the public health, safety and welfare thus they did not show any benefit to implementing NJDEP's plan. The Appellate Division also upheld the trial court's decision regarding compensatory damages based upon the analysis used by NJDEP's expert.

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