CSG Law Alert: Superior Court Holds that NJDEP Claims for Natural Resource Damages May be Commenced Before Completion of Response Actions with Limitations

The Superior Court of New Jersey recently clarified the liberal standards afforded to the New Jersey Department of Environmental Protection (“NJDEP”) when commencing a lawsuit for natural resource damages. See NJDEP v. Ford Motor Company, BER-L-3268-22 (Sup. Ct. Feb. 21, 2023) (the “Ford Motor Decision”). Responsible parties dealing with claims for natural resource damages should be aware that this decision provides further support for the NJDEP to commence litigation before such damages are fully assessed or calculated.

However, the NJDEP’s ability to pursue damages for natural resource damages is not without limits. As set forth in the Ford Motor Decision, natural resource damages pursued by the NJDEP under a theory of public nuisance are limited to abatement damages, not more general compensatory money damages including loss of use or value.

Specifically, the Ford Motor Decision involves alleged dumping activities by the Ford Motor Company and its related entities (collectively “Ford”) at the 500-acre Ringwood Mines Site in Ringwood, New Jersey (the “Mines”). The history of Ford’s involvement with the Mines goes back many decades when Ford operated a nearby assembly plant in Mahwah beginning in the 1950s which was, at the time, one of the largest automobile assembly plants in the country.

The NJDEP’s Complaint asserts that Ford is responsible for natural resource damages in virtually all environmental media (i.e. biota, soil, wetlands, groundwater, surface water, etc.) existing at the Mines by what it describes as Ford’s “intentional, improper, and illegal dumping of hazardous industrial waste and contaminants over a nearly seven-year period” in the late 1960s and early 1970s. The NJDEP demands relief for the natural resource damages pursuant to the New Jersey Spill Compensation and Control Act; the New Jersey Water Pollution Control Act; the Solid Waste Management Act; and several common law claims, including public nuisance. Ford responded to the NJDEP’s Complaint by filing a motion to dismiss, which the Court partially denied.

Ford’s motion asserted that the Complaint should be dismissed as premature under N.J.S.A. 58:10B-17.1b, the statutory limitations set forth in the Brownfield and Contaminated Site Remediation Act. Generally, Ford argued that claims for natural resource damages are precluded as “no cause of action shall be deemed to have accrued . . . until completion of the remedial action for the entire contaminated site.” The basis of this argument was that natural resource damages could only be calculated at such time when the remedial action is complete and were thus too speculative to assert a viable claim.

In dismissing Ford’s argument, the Court reviewed the plain language of the statute, and related legislative history, and held that the statutory focus is on the expiration of the time to sue, not a limitation of when such an action can be commenced. As such, the Ford Motor Decision lends support for the NJDEP to commence litigation for natural resource damages at very early stages in a remediation.

However, as stated above, the NJDEP’s ability to pursue damages for natural resource damages has some limits. In the Complaint, the NJDEP pursued natural resource damages under several common law theories, including public nuisance. Specifically, the NJDEP alleged damages which included compensation for the “lost value of any injured natural resource of the State” caused by Ford’s public nuisance. However, Ford was successful in limiting the NJDEP’s nuisance claim to abatement relief.

In addressing the public nuisance claim, the Court addressed and relied upon the New Jersey Supreme Court’s holding in In re Lead Paint Litig., 191 N.J. 405 (2007), and recognized the historical limitation of a public entity to seek abatement for a public nuisance, not money damages in general. The Ford Motor Decision noted the distinction in precedent between “primary restoration damages,” which refer to the costs of “restoring natural resources to their pre-discharge condition,” and “compensatory restoration damages,” which refers to damages for the “replacement of ecological services and values lost.” See New Jersey Dep’t of Envtl. Prot. V. Exxon Mobil Corp., 393 N.J. Super. 388, 406 (App. Div. 2007) (internal quotations omitted). The Ford Motor Decision held that only “primary restoration damages” are permitted under the public nuisance doctrine, but also highlighted that the “compensatory restoration damages” would likely still be recoverable under the NJDEP’s other legal claims.

Given the NJDEP’s ability to assert these other legal claims, a party undergoing remedial efforts in New Jersey should take little comfort that it is protected from an NJDEP lawsuit for natural resource damages while such damages are still being investigated and assessed.

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