Supplemental Environmental Projects (SEPs) are projects included in enforcement settlements that provide environmental or public health benefits related to the violations being resolved. SEPs have been used as an element of federal environmental settlements since the 1980s. Regulators like that SEPs encourage settlement and result in tangible environmental benefits. The regulated community likes the community goodwill associated with SEPs and the ability to offset potential fines by 80% of the estimated cost of the SEP.

However, SEPs have detractors and in March 2020 the Department of Justice issued a memo halting the use of SEPs. By way of explanation the memo restated legal arguments first raised against the use of SEPs in the 1980s. Specifically, that SEPs divert funds that would otherwise be collected by Treasury, in violation of the Miscellaneous Receipts Act (“MRA”). EPA Guidance has established criteria directly addressing SEP compliance with the MRA since 2002.

In response to the March 2020 memo, environmental plaintiffs filed an action in federal court seeking a judicial declaration that the memo was unlawful. DOJ responded by moving to dismiss while also issuing a clarifying memo purporting to distinguish the newly prohibited SEPs from the often indistinguishable and permissible equitable mitigation projects. Regardless, the federal action was rendered moot when both memos were rescinded by the Biden administration in February.

While the withdrawn DOJ memos prohibiting the use of SEPs are now inoperative, potential parties to settlements should be aware that a federal rule finalized in December 2020 prohibits settlement agreements requiring defendants to provide goods or services to third parties for SEPs (28 CFR 50.28), and that the rule stands in tension with portion of EPA’s 2015 SEP Guidance regarding third-party SEP recipients. The rule remains in effect while the Biden administration considers whether it should be withdrawn or revised.

The State of New Jersey continues its support of revitalizing brownfields with the enactment of the New Jersey Economic Recovery Act of 2020, P.L. 2020, c. 156, which was signed into law by Governor Murphy on January 7, 2021 (the “Act”). The Act includes new programs, including a tax credit program entitled the Brownfields Redevelopment Incentive Program Act . On January 12, 2021, the New Jersey Economic Development Authority (“NJEDA”) Board of Directors approved the implementation of the NJEDA Brownfield Loan Program, which is part of the broader NJEDA Community Revitalization initiative. Both programs will cover many types of remediation costs but will entail a demonstration of a project financing gap, as well as compliance with Prevailing Wage and Affirmative Action requirements. Although the Brownfield Redevelopment Incentive Tax Credit program is still being developed, NJEDA is currently accepting loan applications from January 14 through April 13, 2021. Continue Reading New Brownfields Redevelopment Incentive Programs in New Jersey

On January 7, 2021, New Jersey Governor Murphy signed the New Jersey Economic Recovery Act of 2020. P.L. 2020 c. 156. Included within the statute is the Brownfields Redevelopment Incentive Program Act. This section of the law creates a tax incentive program for a redeveloper of a brownfield site to obtain a tax credit to close a “project finance gap” and provide needed financing for the remediation and redevelopment of a brownfield site. The program, which is administered by the New Jersey Economic Development Authority (“EDA”), is summarized below. Continue Reading What Real Estate Developers Need to Know About the 2020 New Jersey Brownfields Tax Credit

On June 29, 2020, the EPA issued a memo notifying applicable members of the regulated community that effective August 31, 2020, it is terminating the temporary policy suspending certain monitoring and reporting requirements.  

The controversial policy was originally put into place on March 26, 2020 to address issues related to compliance due to the COVID-19 pandemic.  However, the EPA left open the possibility that on a “state or national basis, in whole or in part, at any earlier time, taking into account changing conditions in a state or region of the country” the policy could be terminated prior to August 31.  However, if that were to happen, the EPA would provide at least seven days notification prior to doing so.

For additional information pertaining to the coronavirus outbreak, please visit CSG’s COVID-19 Resource Center.

On April 6, 2020, the New Jersey Department of Environmental Protection (“NJDEP”) proposed substantial changes to the Remediation Standards at N.J.A.C. 7:26D, promulgated under the Brownfield and Contaminated Site Remediation Act, N.J.S.A. 58:10B-1 et seq. (“Brownfield Act”). The proposal seeks to amend the existing Remediation Standards in a number of ways, many of which have potential for significant impacts on ongoing and future remediation in the state. The following is a brief discussion of some, but not all, of the changes that NJDEP proposes.

To begin with, NJDEP’s proposed amendments would update the default minimum remediation standards for various media and exposure pathways. For ground water and surface water, the existing Ground Water Quality Standards and Surface Water Quality Standards remain in effect. However, the proposed rule would mark a sea change in how NJDEP conceptualizes soil remediation standards. Currently, the Remediation Standards provide for combined health-based standards for ingestion-dermal and inhalation pathways. Under the proposed rules, the Remediation Standards would, instead, provide distinct health-based standards for each pathway, separating the ingestion-dermal standard from the inhalation standard. While not part of the proposed rulemaking, NJDEP is amending its existing technical guidance documents to reflect these changes. We will be on the lookout for those documents as they come available.

Importantly, the proposed amendments would also include impact to ground water soil remediation standards. Under the current iteration of the rules, NJDEP establishes such standards on a case-by-base basis. The proposed rulemaking would create codified remediation standards “for soil and soil leachate for the migration to ground water pathway, based upon migration of contaminants to ground water and subsequent human ingestion of ground water.” Also of significance is NJDEP’s proposed remediation standard for indoor air. Currently, the rules do not provide standards for remediating indoor air based on vapor intrusion.

Note that under the Brownfield Act, NJDEP may require ongoing remediations with an approved remedial action work plan (“RAWP”) to comply with newly promulgated standards where those standards are more stringent than the standards under which the RAWP was approved. As such, individuals, property owners, and developers with ongoing remediation would benefit from monitoring the progress of these proposed amendments, as they have the potential for significant impacts, even for sites that are well underway.

Since publishing notice of the proposed rule, NJDEP has extended the public comment deadline from June 5, 2020 to August 5, 2020, based on the needs of the State’s COVID-19 response. 

The text of NJDEP’s proposed alterations to the Remediation Standards can be found here.

On May 2, 2020 Governor Murphy signed Executive Order No. 136 tolling several timeframes administered by DEP, as well as extending certain filing deadlines.

Beginning on March 9, 2020, all timeframes governing public notice, review, or final action on applications for, or renewals of permits, registrations, plans, petitions, licenses, rates, and other approvals under the following statutes administered by DEP are tolled beginning on March 9, 2020:

  • N.J.S.A. 13:1D-32 (Construction Permits),
  • N.J.S.A. 13:19-8 (Coastal Area Facility Review Act Permits),
  • N.J.S.A. 48:3-7 (Utility Property Transactions), and
  • N.J.S.A. 58:16A-67 (Stream Cleaning Permit).

The timeframes are tolled by each day during the Public Health Emergency declared by Executive Order No. 103 (2020), and no request submitted pursuant to any of these statutes shall be deemed complete or approved for failure to act within the timeframes prescribed by the four statutory provisions listed above.

For what is commonly referred to as the “Dirty Dirt Law”, timeframes are extended by the number of days of the Public Health Emergency declared in Executive Order No. 103 (2020) plus an additional 60 days for:

  • businesses to submit a registration form to DEP to engage in soil and fill recycling services pursuant to N.J.S.A. 13:1E-127.1;
  • DEP to review and issue such registration;
  • the deadline after which a business may not engage in soil and fill recycling services without a valid registration; and,
  • a registrant to submit an administratively complete license application to the Attorney General.

The deadline for the governing body of each municipality to submit its yearly recycling tonnage report to DEP by July 1, 2020, under N.J.S.A. 13:1E-99.16.e (Municipal Recycling System), is extended by 60 days.

The deadline for recyclers, manufacturers, collection locations and local government units who collect electronic devices to submit their semiannual report to DEP by August 1, 2020, as required by N.J.S.A. 13:1E-99.105c, is extended by 60 days.

For additional information pertaining to the coronavirus outbreak, please visit CSG’s COVID-19 Resource Center.

On April 16, 2020, the Appellate Division of the New Jersey Superior Court, the state’s intermediate appellate court, published three precedential opinions concerning the state’s condemnation of ocean-front property for access and use by the public.  New Jersey, from Sandy Hook to Cape May, has 130 miles of beaches on the Atlantic Ocean.  “Goin’ down the shore” is a firmly held tradition for New Jersey residents and visitors alike.  In 2018, around 48 million people visited the Jersey Shore counties and many of them enjoyed the beaches.  Public access and use of those beaches have occasioned public debate and court cases.  These three cases continue the line of decisions approving actions taken to create and protect such access and use.

State v. 1 Howe Street Bay Head, LLC involved a privately owned and maintained revetment (rocks covered with sand and vegetation) between homes and the ocean to protect against coastal storm flooding.  The state, with the financial assistance of the United States, intended to build a 14-mile dune and berm system to be replenished periodically after the beaches naturally eroded.   In Bay Head, this system was to be built between the revetment and the ocean. The state contended, in the trial below, that its proposed system would provide the best protection against flooding, in part because, unlike the revetment, it would also protect the beach itself.  The project required the condemnation of private property for the project as well as public access and use.  The 1 Howe Street Bay Head LLC asserted a number of defenses that were rejected by the court below and the Appellate Division.  It ruled that the state has the power to condemn easements for storm-protection purposes and for public access to public waters (which, under New Jersey law, includes the ocean) and the use of those waters.

In State v. 10.041 Acres of Land in the Borough of Point Pleasant Beach, the 14-mile dune and berm system crossed a commercial public beach property that provided parking and visitor services to the public wishing beach and ocean access.  The state wanted an easement over much of the commercial beach property, but not all.  The state included in the easement language that gave the Department of Environmental Protection, without conditions, the right to operate the beaches subject to the easement.  The appellant objected claiming it was illegal.  The trial court below and the Appellate Division authorized the State’s language.

An appeal from a denial by the court below for a requested plenary hearing (in effect, a trial with witnesses) was decided in New Jersey Department of Environmental Protection v. Midway Beach Condominium Association, Inc.  This case also involved a privately maintained preexisting storm protection system.  The condominium association contended before the trial court that the 14-mile dune and berm system was unnecessary at its property because of the preexisting system.  It requested a plenary hearing so that the court, after hearing and evaluating testimony, would rule on the issue.  The court below ruled that there was no triable issue of fact because there was no dispute as to the facts.  The state submitted a certification demonstrating the preexisting system was inadequate and the condominium association failed to dispute it.  The Appellate Division affirmed the ruling of the court below.  It also rejected an argument that, because each condominium owner had rights to access to beachfront property, each of them had to be included in the condemnation process.  The court referenced a statute that specifically provides that that condominium owners should participate through their condominium association.

Certainly, these cases will not be the last ones to address challenges to easements for public beach access and use.  But the defenses potentially available to challengers is shrinking.

As we are all dealing with the impact of the ongoing COVID pandemic, it is important to remember that this year marks the 50th anniversary of the start of the Environmental Decade, which began in 1970.  That year, the first Earth Day occurred and both the United States Environmental Protection Agency and the New Jersey Department of Environmental Protection were created.  The decade commenced with the enactment of the National Environmental Policy Act, 42 U.S.C. 4321 et seq. (“NEPA”).  This seminal legislation is the basis by which all federal agencies must consider the environmental impacts of planned federal actions by preparing an environmental assessment or, if there are potential significant impacts, an environmental impact statement.  Agencies are required to mitigate (or have applicants for approvals mitigate) to offset environmental impacts from the federal actions.

By signing NEPA at the start of the decade, President Nixon set the tone for a renewed focus on environmental issues.  In the years that followed, other major federal environmental legislation was enacted.  In 1970, the Clean Air Act was adopted establishing national air quality standards and requiring states to adopt implementation plans to achieve compliance.  This was further amended and expanded in 1977.  In 1972, the Federal Water Pollution Control Act was substantially amended, rewritten and expanded upon. The law was further broadened by the Clean Water Act of 1977.  These laws led to the regulation of discharges to surface water and the protection of wetlands among other things.  In 1976, the Resource Conservation and Recovery Act was adopted, creating comprehensive regulation of hazardous waste.  In 1980, the Comprehensive Environmental Response Compensation and Liability Act was signed into law establishing the federal Superfund cleanup program.  Similar state laws were enacted in New Jersey and other states during this time period.  Since then, these laws have been continually updated and refined as new environmental risks have been identified and addressed.

As a teenager in the 1970s, I enjoyed the outdoors and, as a result of the first Earth Day, became interested in environmental protection.  After obtaining a science degree and attending law school, I have been fortunate to develop an environmental legal practice where I have witnessed the implementation of these laws and the positive impact they have had on the environment.  While things are certainly much improved from where they were in 1970, much remains to be done and new challenges arise every day.

NEPA manifested a general understanding that the unintended consequences of human activity could negatively affect the environment and needed to be considered.  The other statutes focused on specific means of addressing and reducing negative impacts on the environment, primarily by controlling large sources of pollution or requiring clean up of past pollution.   

Today, 50 years later, changes are being proposed to the NEPA process which some believe will undermine its fundamental principles.  The changes include limiting the scope of review and putting time limits on the process, among others. The regulation of large sources of pollution has been effective to a degree, but both air quality and fishable/swimmable water goals have not been achieved and there are ongoing discussions about reducing the scope of some of the pertinent regulations.  Cleanups have progressed, but many sites remain.  New challenges have been recognized such as the impacts of global warming and the determination that certain chemicals which have not been regulated to date pose potential health risks. 

Anyone concerned with the environment and all environmental lawyers need to be involved in addressing the issues facing us in 2020.  The spirit and principles that led to the enactment of NEPA need to be preserved and further advanced.  Policymakers need to look at the most pressing environmental risks and prioritize addressing those first.  The next generation of environmental laws need to move beyond point source pollution regulation to forcing changes in behavior at all levels that will protect the environment and finally achieve the goals of the legislation from the 1970s while meeting the challenges of this century.  This process has begun through the enactment of laws pushing clean energy as the preferred (or only) alternative.  But more is needed.  One of the lessons learned from the COVID crisis is that reduction in vehicle miles travelled does lead to immediate clean air benefits.  Let’s use this  lesson to make the real changes we need  to achieve the goals established 50 years ago.

Let’s all start by changing our own behavior and making the 2020s the new 1970s when it comes to furtherance of environmental protection. 

In celebration of Earth Day 2020, CSG employees participated in EarthShare’s Responsible Tomorrows Challenge. For more information, please visit EarthShare’s website.

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.

David J. Mairo was featured on Envision Environmental, Inc.’s The Business of Environment podcast discussing how to strike an appropriate balance between the technical and legal sides of environmental issues such as site remediation, land use, real estate transactions and regulatory compliance to achieve results clients, regulators and other stakeholders can agree on. Throughout the episode, Dave also touches upon best practices when managing ever-changing environmental regulations, when to call an environmental attorney, Brownfield redevelopment and considerations to keep in mind when acquiring a property.

To listen to the podcast, please visit Envision Environmental’s website.