Chemos Corp. v. State Dept. of Environmental Protection Div. of Hazardous Waste Management

• Decision Date: 15 December 1989
• Citation: 568 A.2d 75,237 N.J.Super. 359
• Parties: CHEMOS CORP., a New Jersey Corporation, Plaintiff-Appellant, v. STATE of New Jersey DEPARTMENT OF ENVIRONMENTAL PROTECTION DIVISION OF HAZARDOUS WASTE MANAGEMENT, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 359

237 N.J.Super. 359

568 A.2d 75

CHEMOS CORP., a New Jersey Corporation, Plaintiff-Appellant, v. STATE of New Jersey DEPARTMENT OF ENVIRONMENTAL PROTECTION DIVISION OF HAZARDOUS WASTE MANAGEMENT Defendant-Respondent.

Superior Court of New Jersey Appellate Division.

Argued Oct. 31, 1989.

Decided Dec. 15, 1989.

Betsy Rosenbloom, for plaintiff-appellant (Fox and Fox attorneys, Betsy Rosenbloom, Newark, on the brief).

Stuart J. Lieberman, for defendant-respondent (Peter N. Perretti, Jr., Atty. Gen., attorney, Michael R. Clancy, Asst. Atty. Gen., of counsel, Stuart J. Lieberman, on the brief).

Before Judges ANTELL, BILDER and ASHBEY.

PER CURIAM.

Plaintiff Chemos appeals from the action of the Department of Environmental Protection (DEP) rescinding its approval of a "negative declaration" that Chemos' leased industrial site could legally be closed without penalty or cleanup under the Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6 et seq., and the rules, regulations and procedures adopted thereunder ( N.J.A.C. 7:26B-1.1 et seq.). ¹ We affirm based on our conviction that Chemos was not prejudiced by DEP error. Nonetheless, we write briefly concerning the absence of DEP regulations with respect to the actions which Chemos challenges.

We begin with a brief review of the Act. The Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6 et seq., was enacted in 1983 to provide for expeditious cleanup of industrial sites at the time they are closed, sold or otherwise transferred. The object of the statute was to impose:

... a precondition on the closure, sale or transfer of certain properties associated with the manufacture, refining, transportation, treatment, storage, handling, or disposing of hazardous substances or wastes. The precondition is the execution of an approved cleanup plan which details the measures necessary to detoxify the property, or the approval by the Department of Environmental Protection of a [negative] declaration that there has been no discharge of hazardous substances or wastes on the property or that any such discharge has been cleaned up in accordance with procedures approved by the department and there remain no hazardous substances or wastes on the property. [Senate Energy and Environment Committee Statement, Assembly, No. 1231-L.1983, c. 330 (appended to N.J.S.A. 13:1K-6 at 199) ].

The legislative intent was clearly expressed in its finding

... that the generation, handling, storage and disposal of hazardous substances and wastes pose an inherent danger of exposing the citizens, property and natural resources of this State to substantial risk of harm or degradation; that the closing of operations and the transfer of real property utilized for the generation, handling, storage and disposal of hazardous substances and wastes should be conducted in a rational and orderly way, so as to mitigate potential risks; and that it is necessary to impose a precondition on any closure or transfer of these operations by requiring the adequate preparation and implementation of acceptable cleanup procedures therefor. [ N.J.S.A. 13:1K-7]

To that end,

strict requirements are established requiring owners or operators of an industrial establishment planning to close, sell or transfer operations to give notice to DEP, N.J.S.A. 13:1K-9 and to develop and implement a DEP approved cleanup plan unless DEP defers the cleanup in certain specified instances. N.J.S.A. 13:1K-9 & 11. [Superior Air Prod. v. NL Industries, 216 N.J.Super. 46 at 62-63, 522 A.2d 1025 (App.Div.1987).]

It is of course clear that ECRA is a "no fault" statute which carries sanctions for failure to comply. See N.J.S.A. 13:1K-13a; N.J.A.C. 7:26B-1.7(a), ² and the courts have liberally interpreted its remedial language. See Dixon Venture v. J. Dixon Crucible, 235 N.J.Super. 105, 561 A.2d 663 (App.Div.1989) (ECRA remedies include incidental damages as between buyer and seller of ECRA regulated land); Matter of Fabritex Mills, Inc., 231 N.J.Super. 224, 555 A.2d 649 (App.Div.1989) (abandonment of hazardous substance manufacture leaving unlabeled drums is not a continuation of "storage" activity and triggers ECRA cleanup); Matter of Vulcan Materials Co., 225 N.J.Super. 212, 542 A.2d 25 (App.Div.1988) (closure of industrial establishment located on landfill does not trigger cleanup under the Solid Waste Management Act, but does trigger ECRA); In re Robert L. Mitchell Tech. Ctr., 223 N.J.Super. 166, 538 A.2d 410 (App.Div.1988), certif. den. 111 N.J. 605, 546 A.2d 526 (1988) (transfer of research facility auxiliary to industrial establishment triggers ECRA). ³

Chemos proposed to close its ECRA-covered "small business" industrial establishment. N.J.A.C. 7:26B-1.10(d). See N.J.S.A. 13:1K-8f. The facility had long been involved in the manufacturing of coatings for metal, wood and plastic. The substances used in its manufacture of enamels, lacquers and paints were stored in drums, and its hazardous substance inventory included: Acetone, Toluene, Amyl Acetate, Methyl Ethyl Ketone, Methanol, Ethyl Acetate, Nitrocellulose, Xylene, Ethanol, Dibutyl Phthalate, N-Butanol, Butyl Acetate, Butyl Alcohol, Dioctyl Phthalate, mineral spirits, and Sodium Hydroxide, all of which it asserted had been or would be removed from the site as part of its closure plan. ⁴

In order to evaluate Chemos' ECRA appeal, a brief review of the applicable regulations is in order. Under DEP regulations ECRA applies upon "triggering" events. One such "trigger" is the cessation of operations. N.J.A.C. 7:26B-1.5(b)15. Another is the termination of a lease. N.J.A.C. 7:26B-1.5(b)13. Both of these "triggers" applied to Chemos. An industry proposing to close its operation must give written notice to DEP no more than 5 days subsequent to public release of the closure decision, N.J.A.C. 7:26B-1.6(a)3, along with a general information statement (GIS). This GIS must be followed by a Site Evaluation Submission Statement (SES) within 45 days. N.J.A.C. 7:26B-3.2(c). The SES requires inter alia a detailed sampling plan for soil, surface water, groundwater and air. N.J.A.C. 7:26B-3.2(c)11. The only way that the operator of the industrial establishment may avoid the sampling plan requirement is to "propose [exemption] to the Department ... by providing full documentation of the justification ... [other than economic]." N.J.A.C. 7:26B-3.2(d). After a sampling plan is approved, DEP must be able to observe the taking of samples and may take its own samples. N.J.A.C. 7:26B-4.2. Sampling results must be accompanied by a proposed negative declaration (or cleanup plan), and if not satisfied, DEP may require further sampling. N.J.A.C. 7:26B-4.3. DEP notifies the applicant when required information has been satisfactorily submitted and the filings are complete. N.J.A.C. 7:26B-3.2(f). ⁵

There is no applicable statutory or regulatory time-frame for DEP's approval of a cleanup plan. Under the statute, however, an applicant may seek a "negative declaration" (that no hazardous substances remain) and within 45 days of the submission of this proposed negative declaration, DEP must approve the negative declaration or inform the industrial establishment that a cleanup plan is to be submitted. ⁶ N.J.S.A. 13:1K-10b; N.J.A.C. 7:26B-5.2. Under its regulations DEP "shall" not approve the negative declaration until notice and sampling plan requirements are met. N.J.A.C. 7:26B-5.1(b). Following submission of a negative declaration, if the Department so determines, the owner or operator must submit a cleanup plan within the time DEP specifies. N.J.S.A. 13:1K-10b; N.J.A.C. 7:26B-5.2(d)2.

In preparation for seeking DEP approval of a negative declaration, on or about August 3, 1988, Chemos filed its GIS and notified DEP's Division of Hazardous Waste Management that it had ceased doing business as of that date at the site (which was owned by Alken Realty Co., Inc. (Alken), its landlord). DEP immediately advised Chemos that it had not given sufficient lead time (60 days) prior to closing, which might affect the validity of its action under ECRA, and that it would not review whether the site as closed complied with ECRA until Chemos' SES was submitted. Chemos filed its SES on September 16, 1988. The SES indicated that a sampling plan "is currently in preparation and will be submitted subsequent to this document." DEP sent a deficiency notice, noting the absence of a sampling plan. In answer to DEP's deficiency notice of October 13, 1988, Chemos filed an SES supplement on March 2, 1989, providing results of fuel oil tank integrity test but no sampling plan. Its SES supplement said, "Since the fuel oil tank has been certified as tight and no other sampling appears necessary, a sampling plan will not be filed." Chemos submitted an affidavit seeking a negative declaration on March 2, 1989, certifying that no hazardous substances remained on the premises, except for the remaining fuel oil tank. On March 31, 1989, Chemos terminated its lease (apparently by its terms). On April 5, 1989, DEP sent Chemos a notice that its filings were complete as of March 8, 1989, but again advising Chemos that

an approvable negative declaration or cleanup plan must be provided [to DEP] 60 days prior to finalization of the proposed action. Since such lead time was not provided in this case, it is entirely possible that our review will not be completed by your proposed date. ⁷

On April 11, 1989, DEP case manager Georgette E. Bunch conducted an inspection of the site. In answer to further DEP inquiries regarding a protruding pipe, ground solvent tanks in the drum storage area and flooring the sump area, Chemos mailed supplementary affidavits on April 13, 20 and 24. No sampling or cleanup plan was required of Chemos immediately following the inspection. In its April 24, 1989 cover letter with supplementary material, Chemos again said that no sampling plan would be submitted.

On May 4, 1989, DEP issued a...