CSG Law Alert: Appellate Division Addresses Common Law Claims in DEP Enforcement Action

In a recent decision, the Appellate Division clarified DEP’s ability to recover damages for environmental contamination under common law, holding that (1) the Spill Act does not subsume common law claims, (2) strict liability may apply to oil refining and storage operations, (3) the Public Trust Doctrine does not confer sufficient property rights to support trespass claims, and (4) public nuisance claims made by public entities may result in abatement costs. See DEP v. Hess Corp., Dkt. A-2893-18T2 (App. Div. Apr. 7, 2020).

The case involves a 210-acre oil refinery and storage facility in Woodbridge. Hess Corp. owned and operated the facility from 1958 until 2013 when it was acquired by the current owner, Buckeye Partners. DEP alleged that Hess discharged over eight million gallons of crude oil and other hazardous substances at the property, resulting in contamination of surface water, ground water and soils. Hess and Buckeye moved to dismiss DEP’s common law claims of strict liability, trespass and public nuisance.

Common Law Claims. As an initial matter, the Appellate Division held that Spill Act claims do not subsume common law claims. The Spill Act specifically contemplates common law claims co-existing with Spill Act claims.

Strict liability. The Court found that Hess’s alleged oil refinery and storage operations on a 210-acre property adjacent to environmentally sensitive areas, including the Arthur Kill, created an “abnormally dangerous condition for which strict liability may be imposed.” In so doing, the Court distinguished a Law Division case finding that a gas station was not abnormally dangerous, explaining that the refinery complex simply is not comparable to a gas station. Strict liability claims against Buckeye were dismissed because DEP did not allege that Buckeye used or permitted a use of the land that created the abnormally dangerous condition.

Trespass. The Court dismissed DEP’s trespass claims. DEP’s property interest in contaminated ground and surface water arises from the Public Trust Doctrine (i.e., property interests are held in trust by the State on behalf of the people). Trespass claims require invasion to land in the exclusive possession of the plaintiff. The trespass claims were dismissed because the Public Trust Doctrine does not convey exclusive possession.

Public Nuisance. The Court dismissed DEP’s public nuisance damages claim because public entities cannot seek monetary relief for public nuisance. However, the Court explained that DEP may seek injunctive relief ordering abatement of the nuisance, which may necessarily require the defendant to bear the costs of such abatement.

This decision reaffirms many of the well-established principles underlying DEP cost-recovery actions. Despite being non-precedential, it also clarifies the scope of potential common law liability for defendants.

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