In a recent unpublished decision, In the Matter of Spill Fund Lien, DJ No. 129570-02, the Appellate Division held that the New Jersey Department of Environmental Protection (“NJDEP”), through the Spill Fund Administrator (the “Administrator”), could file a Spill Act lien against the property of a person in any way responsible for a discharged hazardous substance (“person in any way responsible”). The court also found that NJDEP’s “lien contest” guidance, the procedure for challenging Spill Act liens, satisfied procedural due process requirements. This decision removes a potential ground for challenging Spill Act liens, expands the universe of persons against whom a Spill Act lien can be filed, and may even expand the universe of persons against whom NJDEP can level treble damages claims. Continue Reading Appellate Division Rules that “Persons in Any Way Responsible” Are Dischargers Under the Spill Act, Upholds NJDEP’s “Lien Contest” Process as Constitutional
On June 10, 2019, the State of New Jersey released a draft of the 2019 New Jersey Energy Master Plan (the “EMP”) for comment. If adopted, the EMP would be a seismic shift in New Jersey energy policy. Quoting the draft plan, “New Jersey is embarking on a significant transition in its energy system, including aggressively pursuing energy efficiency and conservation measures, modernizing the grid, decentralizing electricity production, decarbonizing the energy system, and adding significant additional load to the grid through growth of electricity sales.” The scope of the changes ahead are likely to touch every business and individual in New Jersey. The draft plan highlights the following commitments made by Governor Phil Murphy:
- Increasing the Renewable Portfolio Standard to 50% by 2030.
- Generating 3,500 MW of offshore wind by 2030.
- Installing 2,000 MW of energy storage by 2030.
- Increasing energy efficiency standards by at least 2% in the electric sector and 0.75% in the natural gas sector by 2024.
- Transitioning to a new solar incentive program.
- Developing a community solar program that allows more state residents to benefit from solar energy, especially low and moderate income (“LMI”) families.
- Putting 330,000 Zero Emission Vehicles on the road by 2025.
The draft EMP proposes the following strategies to achieve 100% clean energy generation by 2050:
- Reduce energy consumption and emissions from the transportation sector by phasing out motor gasoline and conventional diesel consumption as quickly as possible through electrifying the transportation sector, reducing reliance on vehicles and increasing mass transit.
- Accelerate deployment of renewable energy and distributed energy resources, including the development of offshore wind and in-state renewable energy generation, and the interconnection of carbon-neutral distributed energy resources, on-site generation systems, storage and equipment or processes that are appropriately sized, modular and decentralized.
- Maximize energy efficiency and conservation and reduce peak demand by setting clear energy related goals and accountability, reducing wasted energy through improvements in building thermal envelopes, appliance efficiency, energy benchmarking, equipment controls, strategic energy management and attention to peak demand reduction.
- Reduce energy use and emissions by decarbonizing the building sector, which would include include zero net carbon and EV ready construction standards, with an early focus on new construction, and the conversion of oil and propane fueled buildings, and the eventual reduction on the reliance on natural gas for heating.
- Modernize grid and utility infrastructure by planning for, financing and implementing the necessary distribution system upgrades to handle increased electrification and integration of distributed energy resources, supporting bi-directional grid power flow, empowering customers to manage power consumption and self-generation, and actively engaging in transmission planning and siting, including the use of smart meters and Advanced Distribution Management Systems.
- Support community energy planning and action in LMI and environmental justice (“EJ”) communities by encouraging municipalities that house predominately LMI or EJ communities to establish community energy plans and enact them with state support, and develop programs that support affordable access to renewable energy and energy efficiency, such as the existing community solar pilot program.
- Expand the clean energy innovation economy by supporting the growth of in-state clean energy industries through workforce training, clean energy finance solutions and investing in innovative research and development programs, including the establishment of a Green Bank and a Commercial Property Assessed Clean Energy (C-PACE) lending program to increase the amount of public and private capital flowing to clean energy projects and innovations.
Stakeholders will have multiple opportunities to comment on the draft EMP before it is finalized, including six stakeholder meetings held over three days as follows:
- Stakeholder Meetings on Wednesday, July 17 at 10 am and 1:30 pm at the State House Annex in Trenton.
- Stakeholder Meetings on Thursday, August 8 at 1 pm and 4:30 pm at Larson Auditorium at Seton Hall Law School in Newark.
- Stakeholder Meetings on Thursday, September 12 at 1 pm and 4:30 pm at Black Box Theater at the Kroc Center in Camden.
All stakeholders also are invited to submit written comments until 12 pm on Monday, September 16, 2019.
If you have any questions or would like assistance in developing a set of comments, please contact your CSG attorney or one of the authors of this blog post.
Robert Crespi will be speaking at the Brownfield Coalition of the Northeast’s 2019 Northeast Sustainable Communities Workshop on June 4, 2019. Rob will co-moderate the panel titled, “Getting Your Fill of Fill – A Discussion of the Issues Brownfield Developers Should be Aware of When Testing, Disposing and Reusing Building Materials, Including Concrete, Brick and Block,” from 12:10 – 1:00 pm. The full-day event will be held at the New Jersey Institute of Technology in Newark, NJ.
For more information or to register, please visit the event webpage.
When the New Jersey courts issue an “unpublished opinion,” across the top of the first page is a warning. “This opinion shall not ‘constitute precedent or be binding upon any court.’” But sometimes such opinions are ones not to be ignored by lawyers and clients dealing with certain issues.
In the Matter of Lacey Township Permit (Superior Court of New Jersey, Appellate Division, Docket No. A-3173-16T3, April 26, 2019) was an appeal by a citizens’ group seeking to overturn the issuance of an environmental permit by the New Jersey Department of Environmental Protection (“DEP”). The permit process allows for 30 days of public comment after the submission of the application by the applicant. The citizens’ group submitted timely comments as did a number of other interested parties. At the end of the comment period, DEP issued a deficiency letter to the applicant. Several months later, the applicant submitted a revised application addressing the deficiencies. DEP then had 90 days to issue a decision on the revised application. During those 90 days, DEP consulted with two of the commenters and the applicant to lessen the project’s impact on turtles that regularly nest in and access the project area. The permit was approved and later notice of the permit’s approval was published.
The citizens’ group had the right to request a hearing on the permit approval within 30 days of the notice of approval. If it had requested a hearing, it could have also requested a stay of the project’s construction. It did neither. The project was completed six months after the notice of the permit’s approval was issued.
It is not surprising the court denied the citizen’s group request. Overturning a permit is difficult before New Jersey Courts and an unpublished decision on this issue normally would not merit comment. But this case is different.
Here the court pointed out what the citizens’ group could have done differently. Not that these actions would have affected the court’s decision but, as with having chicken soup when is ill, it could not have hurt. The citizens’ group could have sought to confer with DEP while it was considering the deficiencies in the original permit application. It could have requested a hearing within 30 days after notice of the permit’s issuance. Finally, it could have sought “a stay of construction pending appeal from DEP and this court.” It took none of these actions.
The points in the above paragraph do not fall within the court’s holding. Instead, they are best characterized as advice to parties opposing a permit in the future. It is this “advice” that makes this case important even if it cannot be cited as precedential.
The United States 8th Circuit Court of Appeals recently decided that a tire company and its affiliate could be held liable under the Comprehensive Environmental Response, Compensation and Liability Act at 42 U.S.C. § 9601 et seq. (“CERCLA”) for selling property knowing that the contaminated buildings thereon would be demolished. Dico, Inc. (“Dico”) owned several old industrial buildings in Des Moines, Iowa. The buildings were all well past their commercially useful lives, and needed costly repairs and upkeep. They were also contaminated with PCBs.
The buildings soon came to the attention of the EPA, which ordered Dico to address the PCBs and submit a long term maintenance plan for review. EPA also required ongoing testing, annual reports, and immediate notification if changes in site conditions threatened further release of PCBs. Without performing any remediation of its own, Dico, through its corporate affiliate, Titan Tire Corporation (“Titan”), sold the buildings to Southern Iowa Mechanical (“SIM”) with the understanding that it would demolish the PCB-laden structures. Dico and Titan did not inform SIM of the PCBs, and they did not inform EPA of the sale. Instead of incurring a $1 million remediation, Dico and Titan saw a $100,000 profit. Thereafter, EPA undertook its own PCB remediation, and later sued Dico and Titan under CERCLA on the theory that they had arranged for the disposal of hazardous substances.
The 8th Circuit employed the United States Supreme Court’s analytical framework for arrangers set forth in Burlington Northern & Santa Fe Railway Company v. United States, 556 U.S. 599 (2009). In that case, the Supreme Court found that Shell was not liable as an arranger when it shipped product to third-party distributors who happened to spill its products. Shell knew that various minor spills and leaks of its products occurred while in the custody of the third-party distributors, and Shell took steps, such as issuing manuals and advisories, to prevent such spills. Nonetheless, third-party distributors continued to leak Shell’s products. The Supreme Court held that, because Shell never specifically planned for its products to be spilled while in the custody of the third-party distributors, as evidenced by its conduct, it was not liable as an arranger.
Applying this rationale, the 8th Circuit concluded that Dico and Titan were liable as arrangers. There was enough evidence that Dico and Titan planned to dispose of the PCB contaminated buildings through the sale to SIM. Indeed, despite knowing that the buildings were contaminated and subject to an EPA order, Dico and Titan never related these facts to SIM. This indicated Dico and Titan intended to rid themselves of known PCB contamination. Other facts also evidenced the intent to dispose. The buildings were well past their useful life and not likely to be used again. Dico and Titan knew SIM would demolish the buildings. The PCBs were not destined for any further, useful purpose. Dico and Titan also knew that the remediation would cost roughly $1 million, but before doing any remediation of their own, they sold the property to SIM for $100,000. These facts led the 8th Circuit to conclude that the lower court had an adequate basis for finding that Dico and Titan were properly liable as arrangers under CERCLA.
The 8th Circuit decision makes clear that courts are willing to consider a wide variety of facts and circumstances when considering arranger liability. Further, disposal does not require active disposal. Inaction coupled with intent to dispose was enough to impose CERCLA liability in this case.
On March 1, 2019, the National Park Service proposed revisions (FR Document 2019-03658) to the regulations governing the National Register of Historic Places (“National Register”). The proposal is controversial and has sparked concern within the historic preservation community.
Pursuant to Section 106 of the National Historic Preservation Act, a Federal action that encroaches upon a National Register-listed historic property or a property eligible for such requires the Federal agency proposing the encroachment to work with the state historic preservation office, local governments and interested persons in an attempt to understand the public concerns about a project and accommodate them where appropriate. The new proposal affects the National Register nomination process.
Under the current regulations, anyone, including the Keeper of the National Register, may nominate a property or district to the Keeper of the National Register for listing. If the property owner objects, or for a district, if a majority of the owners object, the property or district will not be listed. Under the proposed regulations, only the Federal Agency with jurisdiction or control of the property may nominate it to the National Register. The proposed revisions also change the method of determining if a majority of the landowners object to nomination. Pursuant to the proposal, a majority will not be based on one landowner/one vote. Instead, a majority will be based on a majority of the land area proposed for inclusion in the historic district.
Preservationists are concerned that, in some instances, Federal agencies will refuse to nominate their historic properties to the National Register. Preservationists also believe the proposed revisions will likely result in a reduction of nominations to the National Register or determinations of eligibility for listing. The preservationists also are concerned that Federal agencies will be less likely to avoid projects that encroach upon their unlisted historic properties. A major concern is that the exclusion of a Federal agency building, such as a post office, from a potential historic district may have a cascading influence on other property owners’ willingness to have their properties included in a National Register-listed historic district.
Comments concerning the proposed revisions must be submitted to the National Park Service by April 30, 2019.
In answer to the question above, the answer is no as shown by a recent case. In National Parks Conservation Association v. Semonite, 916 F.3d 1075 (D.C. Circuit, 2019), the Army Corps of Engineers (Corps) was, in effect, reprimanded and overruled for its decision to allow the construction of electrical transmission towers and lines across a river Congress had earlier recognized as America’s Founding River. Virginia’s James River runs past a number of historic properties including Jamestown, site of the first permanent English settlement in North America, and the Captain John Smith National Historic Trail, “the nation’s only congressionally –protected water trail.” An independent federal agency, the Advisory Council on Historic preservation, deemed this area “a relatively unspoiled and evocative landscape that provides context and substance” for these historic properties. The decision remanded the case to the United States District Court for the District of Columbia to vacate the permit and require the Corps to prepare an Environmental Impact Statement (“EIS”). In doing so, the court referred to these properties as “historic treasures” in a region of “singular importance to the nation’s history.”
This case is viewed by historic preservationists as a major and positive decision that will be precedential or persuasive in future cases. Pursuant to the National Environmental Policy Act, the Corps is required to consider alternatives to a project encroaching upon a historic resource and prepare an EIS if that project will significantly affect the historic resource. However, if the Corps determines preliminarily that a project has “no significant impact” on such a resource, it can skip an EIS.
The Court rejected the Corps’ determination that the proposed transmission project would have no significant impact on the historic resources at issue as “arbitrary and capricious.” In doing so the Court questioned the acceptability of the Corps’ methodology for determining no significant impact in light of its “misgivings” about the location of a project of this magnitude. Newspaper accounts note that the project included 17 towers with four of them exceeding 295 feet above the water. The towers carry six cables of two inches in diameter and are capable of moving 500,000 volts. Construction costs exceeded $400 million. These towers are within sight of Jamestown, the Colonial National Park running between Yorktown and Williamsburg, and certain other historic properties along the James. The National Park Service believed the project “would forever degrade, damage, and destroy the historic setting of these iconic resources.”
So, it’s no wonder that the historic preservation community was enthusiastic about the decision. But a problem remains. The towers were built and the cables were installed prior to the court’s decision. In fact, the system was energized and power was moving only a few days before the court’s decision. The future of that system will now, in the first instance, be decided by the lower court.
* In the spirit of full disclosure, John A. McKinney, the author of this post, is a descendant of a Jamestown colonist who arrived there in 1619.
On April 1, 2019, the New Jersey Department of Environmental Protection (“NJDEP”) proposed drinking water standards (known as maximum contaminant levels, or MCLs) for two PFAS – 14 parts per trillion (“ppt”) for PFOA and 13 ppt for PFOS. If the rule is promulgated, it will set the limit for the amount of each substance that is permitted in drinking water systems and would be the most stringent in the nation for these compounds (New York is on track to establish 10 ppt limits for the 2 compounds). The effect of the rule could be far-reaching, since as many as 40 public water systems in New Jersey have already detected levels of these compounds above the proposed standards. As such, the water systems will be required to actively remediate the contaminated wells or take them out of service. The proposal will also require private potable well owners to sample for PFAS in real estate transactions, and will require landlords of rental properties to periodically sample potable wells after an 18-month phase-in period.
This rule is the next iteration of New Jersey’s recent and rapid regulation of the family of chemicals known as perfluoroalkyl and polyfluoroalkyl substances (“PFAS”). PFAS has been found to be prevalent in drinking water supplies around the United States due to their high solubility, mobility and persistence in water. As we recently reported, NJDEP promulgated a groundwater remediation standard for another PFAS compound, PFNA, of 13 ppt and recently established interim groundwater remediation standards for PFOA and PFOS of 10 ppt, pending promulgation of formal standards. In addition to proposing MCLs and groundwater remediation standards, NJDEP is also vigorously pursuing enforcement actions against the alleged manufacturers, dischargers and users of these compounds by recently filing a Spill Act Directive and Natural Resource Damage actions against these entities.
The publication of the MCL rule proposal in starts the 60-day comment period, including a May 15th public hearing.
On March 29, 2019 the New Jersey Board of Public Utilities (“BPU”) released the final Community Solar Energy Pilot Program Application Form (the “Application”) and announced the Application period opens on April 9, 2019 at 9:00 A.M. and closes on September 9, 2019 at 5:00 P.M. The form is substantially the same as the form released for comment in November 2018, however, there are some changes, including modifications to the scoring system.
It is important to note the following regarding the Application:
- Original signatures are required on all forms, and the certifications must be notarized. One original and three copies of the complete Application must be submitted to the BPU by hand or mail no later than 5:00 P.M. on September 9, 2019. In addition, an electronic copy of the complete Application must be submitted to two separate e-mail addresses contained in the Application.
- Projects that have begun operation and/or have been approved by the BPU for connection to the distribution system prior to February 19, 2019 are not eligible.
- Projects may not be larger than 5 megawatts (“MW”) and the applicant must have site control at the time of application. An option to purchase or option to lease will qualify as site control.
- If the project is not located on a rooftop or parking lot the applicant must have met with the New Jersey Department of Environmental Protection’s (“NJDEP”) Office of Permit Coordination and Environmental Review (“PCER”) to determine what permits may be required and to identify other potential issues. Applicants are expected to have completed the NJDEP Permit Readiness Checklist and submitted such checklist to NJDEP PCER prior to submitting the Application.
- An applicant may be a project developer, project owner, project operator, property owner, contractor, installer, land speculator or agent thereof.
- Only Applications that are administratively complete by the close of the application period will be considered. Applications may be amended and resubmitted during the application period without penalty.
- Projects must score a minimum of 30 points to qualify. Projects that score 30 points or higher will be presented to the BPU for participation in order, starting with the highest score and proceeding until the 75 MW cap is reached. At least 40% of the program capacity (at least 30 MW) must be allocated to LMI projects. The projects will be scored as follows:
- Low and Moderate Income (“LMI”) Inclusion – 30 points. A project is considered an LMI project if a minimum of 51% of the capacity is assigned to LMI subscribers.
- Siting – 20 points. Higher preference for landfills, Brownfields, areas of historic fill, rooftops, parking lots and parking decks. Medium preference will be given to canopies over impervious surface (i.e. walkway) and areas in need of redevelopment. Preserved land, wetlands, forested area and farmland is not preferred. Up to 5 bonus points are available for landscaping, land enhancement, pollination support, storm water management and soil conservation.
- Product Offering – 15 points. Higher preference for guaranteed savings of greater than 10% and flexible terms (e.g. no cancellation fee and a short term contract). Medium preference for guaranteed savings greater than 5%. Projects with no guaranteed savings are not preferred.
- Community and Environmental Justice Engagement – 10 points. Higher preference for partnerships with municipalities, local community organizations and affordable housing providers. Medium preference for a letter of support from the municipality, if the project owner is a government and/or public or quasi-public entity or if the owner is an affordable housing developer.
- Subscribers – 10 points. Higher preference if more than 51% of the capacity is assigned to residential subscribers.
- Other Benefits – 10 points. Higher preference for projects that provide local jobs and projects which demonstrate co-benefits (e.g. paired with storage, a micro-grid, energy audit or energy efficiency measures).
- Geographic Limit – 5 points. Higher preference if subscribers are limited to the municipality in which the project is located or adjacent municipalities. Medium preference if subscribers are limited to the county in which the project is located or the adjacent county.
- Approved projects are expected to begin construction within 6 months of their approval by the BPU and are expected to become fully operational within 12 months of their approval. Extensions may be granted by the BPU in its discretion.
- Information requested in the application includes:
- Estimated number of subscribers and breakdown between residential, industrial and commercial subscribers.
- Whether the project is using an anchor subscriber.
- Cost estimates, including net installed cost, cost of customer acquisition, annual customer churn rate and annual operating expenses. Substantiating evidence must be attached in the form of charts and/or spreadsheet models.
- Applicants are expected to provide a good faith description of the product offerings as they are known at the time the application is filed. If the project is approved the applicant must notify the BPU and receive approval for any modification or addition to the product offerings.
In addition, the BPU clarified via order that community solar projects will apply for interconnection through the Electric Distribution Companies (EDCs) following normal interconnection procedures.
On March 25, 2019, the New Jersey Department of Environmental Protection (“DEP”) issued a Statewide PFAS Directive to a number of companies associated with the manufacture of poly- and perfluoroalkyl chemicals (“PFAS” which includes PFNA, PFOA and PFOS and other substances) and their replacement compounds. Pursuant to the Directive, these companies are to reimburse DEP’s past and future costs of investigating, monitoring, testing, treating, and remediating New Jersey’s drinking water and waste systems, private drinking water wells and natural resources including groundwater, surface water, soil, sediments and biota. The Directive requires certain information from these companies as to future costs and information related to the historic uses of PFAS and replacement chemicals including “information ranging from use and discharge of the chemicals through wastewater treatment plants, air emissions, and sales of products containing the chemicals to current development, manufacture, use and release of newer chemicals in the state.” The Directive notes that failure to comply will increase Respondents’ potential liability to the DEP in an amount equal to three times the cost of arranging for the cleanup and removal of the discharges.
This Directive states New Jersey’s resolve that these companies, and not New Jersey residents, pay the costs necessary to protect “public health and safety and the state’s environment.” The DEP contends that this Directive will require these companies to “fund millions of dollars in assessment and cleanup efforts” pursuant to the state’s Spill Compensation and Control Act, the Water Pollution Control Act and other state environmental laws.
New Jersey has been at the forefront of states acting to address PFAS. At the time of the Directive’s issuance, DEP Commissioner Catherine R. McCabe referenced the “near daily” finding of PFAS in New Jersey’s environment. As noted in the press release announcing the Directive’s issuance, New Jersey was “the first state to adopt a maximum contaminant level (MCL) of 13 parts per trillion for PFNA in drinking water, the strictest such standard in the nation. New Jersey’s standards supersede those of the U.S. Environmental Protection Agency, which does not regulate the chemicals that have been linked to cancer and other illnesses … Earlier this month, the DEP established interim specific groundwater quality standards for both PFOA and PFOS, at 10 parts per trillion. New Jersey is among the first states to pursue regulation of these compounds.”
Of course, the Directive is only the opening salvo. More is sure to come.
The Directive may be found here.