N.J. Dep't of Envtl. Prot. v. Dimant

• Decision Date: 26 September 2012
• Citation: 212 N.J. 153,51 A.3d 816
• Parties: NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION and Acting Administrator, New Jersey Spill Compensation Fund, Plaintiffs–Appellants, v. Ofra DIMANT, Rita Lapinski, Charles Zaccardi, Evelyn M. Zaccardi, Gary C. Zaccardi, Michael Zaccardi, and Zaccardi's Cleaners, a New Jersey Partnership, Defendants, and Chouchan Samman, Riad Samman, and Sue's Clothes Hanger, Inc., Defendants/Third–Party Plaintiffs–Respondents, v. Bharat K. Shah, Priti B. Shah, and PTR, PTB, PTM Corp., Third–Party Defendants–Respondents, and Louis Scharlat, Conchetta Scharlat, Anthony Chirico, Donald H. Hickman, Floyd S. Randolph, and Cleaning Village of Somerset, Inc., Third–Party Defendants.
• Court: New Jersey Supreme Court

212 N.J. 153

51 A.3d 816

NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION and Acting Administrator, New Jersey Spill Compensation Fund, Plaintiffs–Appellants,

v.Ofra DIMANT, Rita Lapinski, Charles Zaccardi, Evelyn M. Zaccardi, Gary C. Zaccardi, Michael Zaccardi, and Zaccardi's Cleaners, a New Jersey Partnership, Defendants,andChouchan Samman, Riad Samman, and Sue's Clothes Hanger, Inc., Defendants/Third–Party Plaintiffs–Respondents,

v.Bharat K. Shah, Priti B. Shah, and PTR, PTB, PTM Corp., Third–Party Defendants–Respondents,andLouis Scharlat, Conchetta Scharlat, Anthony Chirico, Donald H. Hickman, Floyd S. Randolph, and Cleaning Village of Somerset, Inc., Third–Party Defendants.

Supreme Court of New Jersey.

Argued May 7, 2012.

Decided Sept. 26, 2012.

Richard F. Engel, Deputy Attorney General, argued the cause for appellants (Jeffrey S. Chiesa, Attorney General of New Jersey, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mark D. Oshinskie, Deputy Attorney General, on the briefs).

George R. Hardin, argued the cause for respondent Sue's Clothes Hanger, Inc. (Hardin, Kundla, McKeon & Poletto, attorneys; Mr. Hardin, Arthur A. Povelones, Jr., Springfield, and James P. Krupka, on the briefs).

Jacob S. Grouser, New Brunswick, argued the cause for respondents Bharat K. Shah, Priti B. Shah, and PTR, PTB, PTM Corp. (Hoagland, Longo, Moran, Dunst & Doukas, attorneys).

Keith E. Lynott, argued the cause for amici curiae New Jersey Chamber of Commerce and Commerce and Industry Association of New Jersey (McCarter & English, attorneys; Mr. Lynott and J. Forrest Jones, Newark, on the brief).

Steven J. Picco, submitted a brief on behalf of amici curiae Fuel Merchants Association of New Jersey and Chemistry Council of New Jersey (Saul Ewing, attorneys; Mr. Picco, Andrea A. Lipuma, and Deborah L. Shuff, Princeton, on the brief).

William J. Schulte submitted a brief on behalf of amici curiae Food and Water Watch, Inc., and Raritan Riverkeeper, Inc. d/b/a New York/New Jersey Baykeeper (Eastern Environmental Law Center, attorneys; Mr. Schulte and Alice R. Baker, on the brief).

Justice LaVECCHIA delivered the opinion of the Court.

Seeking contribution for costs expended in the investigation and remediation of contaminated groundwater that tainted private wells in Bound Brook, the New Jersey Department of Environmental Protection and the Administrator of the New Jersey Spill Compensation Fund (hereinafter collectively the DEP), filed this action under the Spill Compensation and Control Act (Spill Act or Act). Although the DEP named several defendants in its complaint, and third-party complaints were filed thereafter, by the time of trial the only direct defendant remaining in the DEP's case was Sue's Clothes Hanger (Sue's).¹

After a bench trial, the court found that the DEP failed to prove by a preponderance of the evidence that any discharge by Sue's caused the groundwater contamination in issue. Absent such a nexus, the court held that the DEP could not compel contribution by Sue's under the Spill Act for investigation, cleanup, or damages caused by the contaminated groundwater. Accordingly, the court dismissed the claim. The Appellate Division affirmed, expandingon the trial court's reasoning in a published opinion. N.J. Dep't of Envtl. Prot. v. Dimant, 418 N.J.Super. 530, 14 A.3d 780 (2011).

The DEP petitioned this Court, claiming that the trial and appellate courts misperceived the nexus required for liability under the Spill Act. The DEP argues that by imposing a common law causation standard for damages, the Appellate Division panel's decision in this matter has unsettled the law governing the liability of dischargers under the Spill Act for hazardous-substance spills. We granted certification, 208 N.J. 381, 30 A.3d 318 (2011), and now affirm, with slight modification to the analysis. We specifically affirm the Appellate Division's judgment that found that the DEP's proofs failed to demonstrate a sufficient nexus to impose on Sue's any contribution obligation for this groundwater contamination. The DEP needed to demonstrate a nexus between the discharge proved to be committed by Sue's during its period of operation and the groundwater contamination in issue. Although we accept the trial court's determination that the DEP's proofs fell short of demonstrating such a connection between the discharge committed by Sue's and the groundwater contamination, we clarify that the Spill Act does not require proof of the common law standard of proximate-cause causation of specific environmental damage as a precondition to relief under the Act.

I.

We begin with a brief description of the landmark legislation that provides the framework for this matter.

In 1976, the New Jersey Legislature passed the Spill Act, which “was a pioneering effort by government to provide monies for a swift and sure response to environmental contamination.” Marsh v. N.J. Dep't of Envtl. Prot., 152 N.J. 137, 144, 703 A.2d 927 (1997). Since its enactment, other states, as well as the federal government, have passed similar legislation. Ibid.; see, e.g., Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.A. §§ 9601 to 9675. That said, the Spill Act was unique when enacted. It was the most comprehensive spill cleanup program in the nation. See Governor's Press Release for Assembly Bill No.1903 (“ Governor's Press Release ”), at 1 (Jan. 6, 1977).

The specter of a massive offshore oil spill provided the initial impetus for the Spill Act. Buonviaggio v. Hillsborough Twp. Comm., 122 N.J. 5, 7–8, 583 A.2d 739 (1991).² The express purpose of the Act was

to exercise the powers of this State to control the transfer and storage of hazardous substances and to provide liability for damage sustained within this State as a result of any discharge of said substances, by requiring the prompt containment and removal of such pollution and substances, and to provide a fund for swift and adequate compensation to resort businesses and other persons damaged by such discharges....

[N.J.S.A. 58:10–23.11a.]

The Legislature directed that the Act “be liberally construed to effect its purposes,” N.J.S.A. 58:10–23.11x, which include protection of the public health, safety, and welfare, ibid., protection and preservation of the state's land, waters, and natural resources, N.J.S.A. 58:10–23.11a, and ensuring that polluters bear the costs of cleanup efforts, see In re Kimber Petroleum Corp., 110 N.J. 69, 90, 539 A.2d 1181 (1988) (Wilentz, C.J., dissenting). Those general purposes find their parallels in broadly worded key operative provisions within the Act.

The Spill Act strictly prohibits the discharge of hazardous substances, N.J.S.A. 58:10–23.11c, and defines a “discharge” as

any intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of hazardous substances into the waters or onto the lands of the State, or into waters outside the jurisdiction of the State when damage may result to the lands, waters or natural resources within the jurisdiction of the State....

[N.J.S.A. 58:10–23.11b.]

By covering acts and omissions, and by including many verbs describing the manner in which a hazardous substance might reach land or water, the category of what constitutes a “discharge” is self-evidently broad. Decisional law has delimited the outer contours of a discharge only to some degree. See, e.g., White Oak Funding, Inc. v. Winning, 341 N.J.Super. 294, 299, 775 A.2d 222 (App.Div.) (holding that discharge did not occur when hazardous substance, already present in water or soil, merely migrates through that medium), certif. denied,170 N.J. 209, 785 A.2d 437 (2001); Atlantic City Mun. Utils. Auth. v. Hunt, 210 N.J.Super. 76, 96, 509 A.2d 225 (App.Div.1986) (holding that placement of waste into non-leaking containers does not constitute “a discharge”).

N.J.S.A. 58:10–23.11g(c)(1) establishes a broad scope of liability under the Spill Act:

[A]ny person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs no matter by whom incurred. Such person shall also be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs incurred by the department or a local unit....

Like CERCLA, the enactment of which followed the Spill Act, the Act has a “superfund” from which the State can pay for cleanup in emergency situations and for cleanup of abandoned sites where no responsible parties can be identified. See Buonviaggio, supra, 122 N.J. at 7–10, 583 A.2d 739 (discussing Spill Fund). Although the Spill Act did not establish a defined set of potentially responsible parties (PRPs)—the approach taken later in CERCLA—case law interpreting the statute has generated a list of PRPs. ³ If responsible parties fail to participate in the cleanup, the Spill Act permits the DEP to recover three times the amount expended in cleaning the contaminated site. N.J.S.A. 58:10–23.11f(a)(1). The “cleanup and removal costs” for which an entity becomes liable include “all direct costs,” and certain “indirect costs,” that are “associated with a discharge.” N.J.S.A. 58:10–23.11b.

With those key provisions in mind, we turn to the record in this matter.

II.

A.

The following facts provided the basis for the trial court's conclusions, and are not disputed on appeal.

In 1988, samples from scores of residential wells in Bound Brook revealed contaminated groundwater. The primary contaminant was perchloroethylene or tetrachloroethylene (PCE or PERC),⁴ a compound used in the dry cleaning industry and as a degreaser in automobile and machine shops. PCE is a volatile organic chemical compound that evaporates quickly when exposed to air and dissolves when mixed with water.

The investigation into the source of the...