Are you in a case where an on-site and off-site groundwater plume of dry-cleaning solution (perchloroethylene or PCE) or other hazardous substance is intersected by sewers through which the used and disposed solution flowed?  If so, the case of Mission Linen Supply v. City of Visalia (2019 WL 446358) bears your close review.

Based on the facts and expert testimony adduced at the bench trial, the court determined that: 1) the sewers were installed by the City below general industry standards; 2) the City sewers had numerous defects including holes and broken pipes, cracks, separated joints, missing portions of pipes, root intrusion and other conditions; and, 3) PCE was released into the environment as a result of these defects.

Pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), the two dry cleaners who operated at the site and the City were found liable.  In allocating the future cleanup costs, the court determined the equitable basis for allocation was the plume itself.  The prior dry cleaners were responsible for the on-site costs and the City was responsible for the off-site costs “because the City’s defective/leaking pipes transported and spread the PCE beyond the property boundaries.”   50% of future costs were assigned to the City.

A review of this case’s Findings of Fact show what expert testimony and evidence is necessary to reach the result reached by this court.  The case is also a warning to municipalities with sewer lines intersecting cleanup sites or what could become cleanup sites.  Do not fail to regularly and properly maintain your sewer systems.

The New Jersey Department of Environmental Protection (NJDEP) has proposed to change Surface Water Quality Standards antidegradation designations for 749 miles of rivers and streams in New Jersey. The changes will heighten standards for regulated discharges to those waterbodies and extend the applicable Flood Hazard Area Control Act riparian development buffer from the current 150 feet to 300 feet. The buffer restricts development and excludes sewer service for development.

Antidegradation designations provide three levels of regulation for surface waters – including Outstanding Natural Resource waters (primarily in the Pinelands), Category One waters and Category Two waters. The waterbodies subject to the proposed redesignations are currently Category Two, which means that water quality is permitted to decrease based on social or economic justifications. The proposed redesignation to Category One will prohibit any measurable change to water quality, and, therefore, new or expanded wastewater discharges must maintain the existing water quality of the receiving waterbody.

Of the total 749 additional miles proposed to be added to Category One, 734 miles are proposed for redesignation based on NJDEP’s findings of exceptional ecological significance and 53 miles are based on exceptional fisheries resources (with 38 miles of overlap). Waterbodies are deemed exceptional fisheries resources when fish surveys reveal naturally reproduced trout in their first year of life. A waterbody is considered to have exceptional ecological significance if it has either habitat suitable for at least one of seven endangered species documented to live there or if the waterbody includes an exceptional aquatic community. An exceptional aquatic community has a healthy community of small aquatic animals (like snails, larvae and worms), and at least two of the following: optimal habitat, excellent fish community, compliance with water quality criteria, and limited impervious surface runoff. Approximately 137 miles are proposed based on endangered species habitat while 600 miles are based on exceptional aquatic community.

Of note, the proposed Category One designations include tributaries of the river segments that NJDEP claims qualify for redesignation. Previously, NJDEP prohibited discharges to upstream tributaries that would result in a measurable change to water quality at the Category One boundary. As a result of this changed approach, the tributaries identified in the rule, which have not been shown to have either exceptional ecological significance or exceptional fisheries resources, will now have 300 foot development buffers.

Waterbodies impacted by the proposed rule are listed below. Details regarding the specific segments of the waterbodies slated for redesignation are set forth in the proposed rule, available here. Property owners within 300 feet of the redesignated waters may be impacted by these rule changes. The public hearing is scheduled for April 8, 2019 at 1:00 PM at the New Jersey Forensic Science Technology Center Auditorium in Hamilton. Written comments are due May 3, 2019.

The proposed redesignations apply to portions of the following waterbodies:

Atlantic Coastal Basin: Tuckerton Creek and Westecunk Creek.

Upper Delaware River Basin: Brookaloo Swamp, Paulins Kill West Branch, Beaver Brook, Blair Creek, Furnace Brook, Jacksonburg Creek, Jacobs Creek, Lubbers Run, Cowboy Creek, Mountain Lake Brook, Paulins Kill, Pequest River, Pond Brook, Swartswood Creek, Weldon Brook, Merrill Creek Reservoir, Mine Brook Tributary, Musconetong River tributaries, Pohatcong Creek, Pophandusing Brook, Scout Run.

Lower Delaware River Basin: Cohansey River, Cooper River, Crystal Creek, North Run Tributary, Raccoon Creek, Salem River, Woodbury Creek, Blackwater Brook, Maurice River, Burnt Mill Brook, Fishing Creek, Breen Brook, Indian Run, Little Robin Brook, Manatico Creek, Maurice River, Muddy Run, Oldmans Creek, Old Robins Branch of Dennis Creek, Still Run.

Passaic, Hackensack and New York Harbor Complex Basin: Whippany River, Bear Brook, Cresskill Brook, Fox Brook, Ramapo River tributary west of Woodstock, Spring Brook, Stone House Brook.

Upper Raritan River Basin: Lamington River, Neshanic River, Pleasant Run, Prescott Brook, North Branch of Raritan River, South Branch of Raritan River, Rock Brook, Turtleback Brook, Beaver Brook, McVickers Brook.

Wallkill River Basin: Beaver Run, Clove Brook, West Branch Papakating Creek, Rutgers Creek, Wallkill River, Morris Lake.

New Jersey continues to lead the country in the effort to regulate so-called “Forever Chemicals,” the family of chemicals known as perfluoroalkyl and polyfluoroalkyl substances (“PFAS”) found to be prevalent in drinking water supplies around the country due to their high solubility, mobility and persistence in water.  PFAS are found in many household products, and they have been used in various industrial applications – including electroplating, metal finishing, adhesives, paints and many coatings.  PFAS are also found in Aqueous Film Forming Foam (“AFFF”), which is used to extinguish fires caused by petroleum products such as oil and jet fuel.

In September 2018, New Jersey became the first state to establish a drinking water standard (“Maximum Contaminant Level” or “MCL”) for PFAS, following the recommendations of the Drinking Water Quality Institute (“DWQI”), which is an advisory body to the New Jersey Department of Environmental Protection (“NJDEP”) responsible for recommending MCLs in drinking water.  The NJDEP established an MCL for perfluorononanoic acid (“PFNA”) of 13 parts per trillion (“ppt”).  Recently, the NJDEP announced plans to propose the country’s first MCLs for perfluorooctanoic acid (“PFOA”) and perfluorooctanesulfonic acid (“PFOS”).  DWQI recommends an MCL for PFOA of 14 ppt, and an MCL for PFOS of 13 ppt; these numeric criteria may be included in the upcoming rule proposal.

In addition to regulating PFAS in drinking water, the State intends to regulate PFAS in ground water as well.  NJDEP has developed and is requesting public input for draft Interim Specific Ground Water Quality Criteria (ISGWQC) and draft Interim Practical Quantitation Levels (PQLs) for PFOS and PFOA, which will establish cleanup levels in groundwater contaminated with these substances. In its announcement, NJDEP expressed its disappointment in the Trump Administration’s failure to move quickly to establish federal MCLs for PFAS.

On April 20, 2018, Governor Murphy signed Executive Order 23. In the order, Governor Murphy concluded that New Jersey’s low-income communities and communities of color have been exposed to disproportionately high and unacceptably dangerous levels of air, water, and soil pollution, and that the State should focus its efforts on promoting environmental justice. Accordingly, the order, among other things, directed the New Jersey Department of Environmental Protection and the Department of Law and Public Safety to develop “guidance for all Executive branch departments and agencies for the consideration of [e]nvironmental [j]ustice in implementing their statutory and regulatory responsibilities.” On December 17, 2018, the NJDEP’s Office of Environmental Justice released a draft of its “Environmental Justice Executive Order No. 23 Guidance” for public comment. To accomplish the goals set forth in the Executive Order, the guidance establishes its definition of environmental justice, identifies environmental justice issues, describes environmental justice action plans, and provides for an environmental justice interagency counsel.

As currently written, the guidance employs the definition of environmental justice developed by the United States Environmental Protection Agency. According to USEPA, environmental justice is “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” Fair treatment, in turn, means that “no group of people should bear a disproportionate share of the negative environmental consequences resulting from industrial, governmental, and commercial operations or policies.” Groups bearing such disproportionate shares are called, “environmental justice communities.” While the guidance does not define the phrase “disproportionate share,” NJDEP will use an environmental justice screening tool developed by USEPA called “EJSCREEN,” and other tools already used by other State agencies, to more precisely establish the meaning of the phrase.

The guidance identifies several issues generally faced by environmental justice communities. These issues include excessive air pollution from stationary and mobile sources, lead contamination in housing, drinking water, and soils, pesticide exposure, and high density of sites contaminated with hazardous substances. Other highlighted issues include cumulative health impacts from exposure to many sources of pollution, social conditions such as lack of access to affordable housing, healthcare, and healthy food, and vulnerability to effects of climate change.

To respond to these challenges, State agencies with programs affecting environmental justice communities will prepare State agency action plans or “EJ Action Plans.” These plans will include provisions for educating staff about environmental justice. They will also identify existing programs that have a significant impact on environmental justice communities, and help State agencies to work together to leverage program and funding opportunities to benefit environmental justice communities. The plans will also describe the current methods used to provide program information to environmental justice communities, solicit community feedback and collaboration, and identify opportunities to improve engagement with environmental justice communities. NJDEP will assist other State agencies in preparing the EJ Action Plans.

The guidance also calls for an environmental justice interagency council, or “EJ Interagency Council.” Sitting on the council would be the heads, or senior designees, of the Agencies with programs affecting environmental justice communities. The council would serve as a forum for collaboration and for identifying environmental justice concerns, developing priorities and action plans, and facilitating collaboration with environmental justice communities. The guidance also provides for the formation of workgroups within the counsel. In particular, the guidance states that the first workgroups will address the use of screening tools and methodologies to identify environmental justice communities, assess cumulative health risks in environmental justice communities, study lead exposure, and investigate the disproportionate effects of climate change. Other workgroups could be formed to address other issues as well.

NJDEP will be accepting public comments on the guidance until March 22, 2019. Comments should be submitted to eo23@dep.nj.gov. The guidance can be found here.

A Department of Environmental Protection proposed regulation in the December 17, 2018 New Jersey Register, 50 N.J.R. 2480(a), will limit the public’s ability to learn the location of birds and animals “potentially capable of inflicting serious or fatal injuries or being a menace to public health…”  Pursuant to the Open Public Records Act, N.J.S.A. 47:1A-1 et seq. (OPRA), the public may obtain government records unless otherwise exempted.  Other than the owner of a particular property requesting records relating only to that property, this proposal exempts access to records that identify, track, or otherwise determine the location of such animals that include, but are not limited to “bears, nondomestic dogs, nondomestic cats, venomous and constrictor snakes and exotic species.”

The stated purpose for the proposal is to protect these birds and animals from being tracked or located by members of the public, some of whom may “seek out and encounter these species and/or interfere with the Department’s management efforts.  The Department has documented numerous instances where members of the public have placed themselves and others, including Department employees, in danger because of such activities.”

Granting only a landowner the ability to learn of the presence of these animals on the property owned misses one key point.  These animals move from property to property.  For numerous reasons, a property owner is entitled to know whether these animals are in the general vicinity of the owned property to understand the likelihood of encountering them directly or indirectly.  Absent such knowledge, residents of these areas may be at risk of harm from their dangerous animal and bird neighbors.  Instead of limiting records access to a landowner, access should be granted to those persons within an area where there is reasonable probability that they may come in contact with an animal or bird capable of inflicting serious or fatal injuries to a human.

A public hearing concerning this rule proposal is scheduled on Thursday, January 31, 2019 and written comments are due electronically by close of business on February 15, 2019.  For more details, see 50 N.J.R. 2480(a).

In Terranova v. General Electric Pension Trust,  a decision approved for publication, the Appellate Division has confirmed that “[j]udicial estoppel is a defense to Spill Act claims for contribution . . .”  The matter arises out of two cases involving gasoline released from underground storage tanks (USTs) removed and replaced in or about 2000.  In the first case, the current property owner plaintiffs brought suit in 2010 solely against two former tenants seeking, inter alia, contribution under the Spill Act.  In that litigation, the current property owner plaintiffs took the position and obtained an expert opinion that any and all contamination associated with former USTs occurred exclusively during the former tenants’ occupancy.  The case proceeded to arbitration, whereby the arbitrator adopted the findings of plaintiffs’ expert and held the former tenants liable for the contamination and requiring them to take over the remediation.  The arbitrator’s decision was reduced to a final judgment in 2012.

In 2015, plaintiffs’ retained a new expert who opined that the former USTs were leaking prior to the former tenants’ occupancy.  With that information, plaintiffs filed a new suit seeking contribution from the owners and operators who preceded the plaintiff’s ownership and lease to the two former tenants named in the first litigation.* Prior to the end of discovery, defendants in the second litigation filed a motion for summary judgment seeking to have the matter dismissed pursuant to several equitable doctrines, including judicial and collateral estoppel, as well as the entire controversy doctrine.  The trial court granted the motion based on judicial estoppel and plaintiffs appealed.

Citing Morristown Assocs. v. Grant Oil Co., 220 N.J. 360 (2015), plaintiffs argued that the defenses to Spill Act claims are expressly limited to “an act or omission cause solely by war, sabotage, or God, or a combination thereof,” N.J.S.A. 58:10-23.11g(d)(1).  Because the doctrine of judicial estoppel is not a listed defense, plaintiffs maintained it simply is not available.  In affirming the trial court’s decision, the Appellate Division disagreed.

Again citing Morristown Associates, the Appellate Division pointed out that while the Supreme Court concluded that the Legislature intended that individuals are limited to the Spill Act’s subsection (d) defenses, it explicitly rejected an argument that the exclusion of defenses in the Spill Act’s contribution provision “deprives a defendant of other unlisted defenses that should presumably be maintained, such as challenges to venue, service of process, and subject matter jurisdiction.  Such defenses are established by court rules under the jurisdiction of the Supreme Court and are not subject to overriding legislation.”  Id. at 382.  Accordingly, “judicial estoppel is not a defense subject to any overriding legislation and, as such, it may be maintained against a Spill Act claim.”  Applying the equitable principles of judicial estoppel, the Appellate Division affirmed the court below, finding that plaintiffs were precluded from taking a position in the second litigation contrary to the one upon which they prevailed in first litigation.  Because plaintiffs took the position in the first case that any and all contamination associated with former USTs occurred exclusively during the former tenants’ occupancy and prevailed, they were precluded from asserting liability against the defendants in the second case.

The Appellate Division reasoned that the “[a]pplication of the doctrine does not preclude property owners from seeking contribution from dischargers under the Spill Act. It simply compels owners to pursue, in a single action, dischargers which are known or reasonably knowable from the circumstances.”  Acknowledging that judicial estoppel is an extraordinary remedy, the Appellate Division emphasized that the circumstances of the case compelled its application.

While the Appellate Division affirmed on the basis of judicial estoppel, it made clear that the integrity of the judicial process is dependent upon compliance with the equitable principles of not only judicial estoppel, but also collateral estoppel and the entire controversy doctrine.  Therefore, it appears likely that all three equitable doctrines will apply to a claim for contribution pursuant to the Spill Act.

*CSG’s David J. Mairo and Michael K. Plumb represented a defendant in the second litigation.

In an unpublished decision, the Appellate Division of the Superior Court of New Jersey recently ruled that the NJDEP was required, but failed, to undertake formal rulemaking before imposing liability under several NJDEP regulations that govern radon measurement and mitigation activities.  NJDEP v. Radiation Data, Inc., Docket No. A‑1777‑17T3 (N.J. App. Div. Oct. 9, 2018).

In Radiation Data, defendant appealed from NJDEP’s final agency decision (after seven days of hearings) finding defendant liable for violating several requirements relating to the certification of radon testers and mitigators under the Radiation Protection Act, N.J.S.A. 26:2D-1 et seq. and relevant implementing regulations, N.J.A.C. 7:28-27.1 et seq.. On appeal, defendant argued that NJDEP’s Radon Section, which administered the state’s radon program, was wrongfully imposing regulatory standards upon defendant without adopting those standards through formal rulemaking processes. Specifically, the court determined that NJDEP had deviated from the text and stated intent of the radon measurement regulations by making defendant responsible for approximately 450 “affiliate” technicians not employed or controlled by defendant. Defendant further alleged that plaintiff was impermissibly enforcing an internal NJDEP “Guidance Document” as a mandatory rule without the required public notice and comment.

The Appellate Court affirmed in part, reversed in part and remanded in part. The court found that NJDEP was required, but failed, to undertake formal rulemaking for imposition of liability for the conduct of “affiliates” and for enforcing the informal “Guidance Document” concerning quality assurance and control plans as a mandatory rule, without the necessary public notice and comment.  The court held that NJDEP was obligated to undertake public notice and comment to make explicit that it intended to hold certified measurement businesses liable for the conduct of independent contract field tests rather than to require the agencies that employed such testers become certified measurement businesses. The court found that such liability was not apparent from the text of the regulations. With regard to the “Guidance Document,” the court observed that it added requirements not found in the adopted regulations or set forth specific requirements where regulations were more broadly written. Therefore, the court found that the NJDEP intended for the document to operate as an unpromulgated rule and remand was necessary for a determination as to which parts of the Guidance Document required formal rulemaking.

The court declined to vacate certain regulatory violations against the defendant since defendant’s measurement functions did not depend on activities of “affiliate” technicians, and were within defendant’s realistic ability to control.

NJDEP has proposed major amendments to the Stormwater Management rules at N.J.A.C. 7:8. (50 N.J.R. 2375(a)).  One of those proposed amendments, if adopted, will prevent or severely limit a developer’s ability to incorporate non-structural stormwater management strategies such as stormwater detention basins in a development. Instead, the developer will be required to utilize “green infrastructure” best management practices (“BMPs”).  One of the best definitions of green infrastructure comes from American Rivers:  “Green infrastructure is an approach to water management that protects, restores, or mimics the natural water cycle.”

The stated rationale for the amendments are that stormwater detention basins that collect surface water runoff from development-wide drainage areas, particularly runoff from paved or developed surfaces that prevent or limit rainfall infiltration, do not “mimic” the natural water cycle.  Nor are they as efficient at removing total suspended solids as smaller scale green infrastructure BMPs.

The proposed rule intends to replace non-structural strategies with green infrastructure that meets standards for groundwater recharge, stormwater quantity and stormwater runoff quality.  Table 5-1 of the proposed regulation lists such Green Infrastructure BMPs which include cisterns, dry wells, grass swales, green roofs, manufactured treatment devices, pervious paving systems, small-scale bioretention systems, small-scale infiltration basins, small-scale sand filters and vegetative filter strips.  The proposed rules do provide for waivers from strict compliance under specified circumstances.

There is a sixty day comment period and many comments are expected.  This proposal is a major change to existing practices and likely will increase development costs and result in the loss of developable land in any major development project.

Last week, the Attorney General and the Commissioner of the New Jersey Department of Environmental Protection held a press conference to announce the filing of eight new environmental enforcement actions. Targeted sites include Camden’s Puchack Wellfield Superfund Site, the Fillit Corp. site in Palmyra, 323 North Olden Ave. in Trenton, the Novick Chemical site in Newark, Tirpok Cleaners in Flemington, and gas stations in Newark, Camden and Phillipsburg.

This is the State’s second round of environmental enforcement actions this year, following six enforcement actions filed in August. Press releases related to this announcement stylized the new actions as “Environmental Justice Actions.” Environmental Justice addresses the disproportionate impacts of environmental consequences on groups of people based on race, color, national origin, or income. Accordingly, the State’s press releases include the mean income and minority population percentage of the areas surrounding each new enforcement site.

In addition to announcing the newly filed actions, the State also announced the creation of an “Environmental Enforcement and Environmental Justice Section” in the office of the Attorney General. While statements at the press conference suggested that this section is something never before seen in New Jersey, in fact the section appears to be a recycled version of the short-lived Environmental Prosecutor’s Office created by Governor Florio in 1992 and eliminated by Governor Whitman in 1994. Regardless, the creation of the office clearly conveys the message that aggressive environmental enforcement will continue throughout the current administration.

The action concerning the Puchack Wellfield, a Superfund Site that the EPA has been overseeing since the late 1990s, is notable among those filed last week because it seeks natural resources damages for injury to groundwater. As alleged by the State in that action, “there are thousands of sites in New Jersey confirmed as having groundwater contaminated with hazardous substances.” The historic contamination at those sites will provide the new enforcement section with ample opportunity to seek natural resources damages in future actions.

The New Jersey Appellate Division recently ruled that a landowner’s lawsuit against a former attorney and environmental consultant could proceed to the discovery phase.  In CCM Properties, LLC, et al. v. Pieper, et al, the plaintiff engaged an environmental consultant to perform a ground penetrating radar survey of a property to determine whether any underground storage tanks were present.  The contract specifically stated that no historical analysis or soil sampling would be performed, and further stated that the proposed work did not satisfy New Jersey Department of Environmental Protection requirements.  The consultant performed the scan, found two USTs, and recommended their proper removal.  Despite the fact that an investigation meeting NJDEP requirements had not been performed, plaintiff’s attorney advised that “all issues regarding the purchase of the subject property [were] resolved,” inducing plaintiff to close on the property.  Three  years later, the bank, upon receiving plaintiff’s refinancing application, commissioned a Phase I report.  The Phase I report stated that, in addition to the two discovered USTs, the property once featured another UST and a 250,000 gallon above ground storage tank.  The bank denied the refinance application.  Three years after the Phase I report, plaintiffs filed suit based upon the findings therein.  In particular, plaintiffs leveled a malpractice claim against the attorney for advising them to take title after the ground penetrating radar survey, and malpractice and breach of contract claims against the consultant for failing to advise that further investigation was needed.

Soon thereafter, the defendants moved to dismiss the complaint, claiming that the statute of limitations had expired, and that plaintiff had failed to state a claim.  The trial court agreed.  The Appellate Division reversed.

The Appellate Division first addressed the attorney malpractice statute of limitations issue.  Noting that it is very difficult for lay persons to know that they have been injured until actual damage occurs, the Appellate Division held that plaintiff’s malpractice action did not accrue until it actually received the Phase I report that served as the basis of the bank’s denial.  Thus, the six year statute of limitations did not bar the attorney malpractice action.  The Appellate Division next turned to the consultant malpractice action, and held that that action was properly dismissed.  The Appellate Division observed that the contract precisely circumscribed the consultant’s duties.  The contract expressly stated that the ground penetrating radar survey did not meet NJDEP requirements, and imposed no duty to detect and advise of aboveground storage tanks, soil contamination, or prior use of the property.  Thus, the consultant malpractice action was properly dismissed.

The breach of contract claim against the consultant however, was not.  The Appellate Division noted that, at the initial stages of litigation, the plaintiff’s allegations are treated as true, and that even “obscure statements” that establish a cause of action will overcome a motion for dismissal.  In light of the foregoing, the Appellate Division held that the consultant’s failure to find a third UST supported a breach of contract claim, and that that cause of action could go forward.

For those in the market for potentially contaminated properties, this case highlights the importance of sound legal counsel when interacting with consultants and their work product.  For consultants, the case highlights the value of good drafting.