N.J. Dep't of Envtl. Prot. v. Amerada Hess Corp., Civil Action No. 15-6468(FLW)

• Decision Date: 22 May 2018
• Docket Number: Civil Action No. 15-6468(FLW)
• Parties: NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, et al., Plaintiffs, v. AMERADA HESS CORPORATION, et al., Defendants.
• Court: United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey

NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, et al., Plaintiffs, v. AMERADA HESS CORPORATION, et al., Defendants.

Civil Action No. 15-6468(FLW)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

May 22, 2018

**NOT FOR PUBLICATION**

OPINION

WOLFSON, United States District Judge

:

This matter comes before the Court on the cross-motions of Plaintiffs New Jersey Department of Environmental Protection ("NJDEP"), the Commissioner of the New Jersey Department of Environmental Protection, and the Administrator of the New Jersey Spill Compensation Fund (collectively "Plaintiffs") and Defendants Exxon Mobil Corporation and ExxonMobil Oil Corporation, ExxonMobil Oil Corporation, Exxon Mobil Corporation, Getty Petroleum Marketing Inc., Getty Properties Corp., Gulf Oil Limited Partnership and Cumberland Farms, Inc. (collectively, "Defendants"), to declare the extent of Plaintiffs' Seventh Amendment right to trial by jury for claims raised in Plaintiffs' Fourth Amended Complaint for past and future primary and compensatory restoration damages under the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq. (the "Spill Act"), the Water Pollution Control Act, N.J.S.A. 58:10A-1 to 35 ("WPCA"), and the common law of the State of New Jersey; as well as to establish a bifurcated trial structure separating Plaintiffs' legal and equitable claims, pursuant to Fed. R. Civ. P. 42.

For the reasons set forth below, the Court finds that Plaintiffs are entitled, under the Seventh Amendment, to a jury trial on their statutory and common law claims (i) for primary restoration damages for estimated future costs not yet incurred, (ii) for compensatory restoration damages, and (iii) for all other miscellaneous legal relief sought in connection with Plaintiffs' common law claims, including punitive damages. Plaintiffs are not entitled to a jury trial on their claims (i) for primary restoration damages to recover past costs already incurred, and (ii) for all other miscellaneous equitable relief, including injunctive relief. Accordingly, the Court will bifurcate the proceedings in this matter into (1) an initial jury trial of Plaintiffs' statutory and common law claims for primary restoration damages based on estimates of future costs, compensatory restoration damages, and other legal relief including punitive damages; and (2) a subsequent bench trial on Plaintiffs' Spill Act primary restoration damages claim for past costs incurred and other equitable relief, including any injunctive relief.¹

I. FACTUAL BACKRGOUND & PROCEDURAL HISTORY

The factual background of this matter is set forth in detail in New Jersey Dep't of Envtl. Prot. v. Amerada Hess Corp., 323 F.R.D. 213 (D.N.J. 2017) (the "Restoration Opinion"). As relevant to the present motion, Plaintiffs seek to recover againstDefendants for injuries to the groundwater of the State of New Jersey alleged to have been caused by the discharge of Methyl Tertiary Butyl Ether ("MTBE"), on and around properties owned and/or controlled by Defendants (the "Trial Sites"). In their Fourth Amended Complaint, Plaintiffs raise three common law causes of action — product liability, public nuisance, and negligence² — and two statutory causes of action — under the Spill Act and the WPCA. Although Plaintiffs bring their claims under a number of different legal theories, all share substantially the same prayer for relief. Plaintiffs seek a declaratory judgment³ of Defendants' joint and several liability for and seek to recover (i) primary restoration damages for all past and future costs incurred or to be incurred to investigate, clean up, remove, restore, treat, monitor, and otherwise respond to the discharge of MTBE into the waters of the State of New Jersey, such that the waters are restored to their original, pre-discharge condition ("primary restoration")⁴, see, e.g.,Fourth Amended Complaint ("FAC"), Prayer for Relief, p. 29-30, ¶¶ a, b, c, d, ; (ii) compensatory restoration damages for the lost interim value, benefits, and services of the State's water resources during the period of their injury and contamination by MTBE ("compensatory restoration")⁵, id. at ¶¶ a, e; (iii) all appropriate injunctive relief to abate or mitigate MTBE contamination of the State's waters, id. at, p. 30, ¶ g; (iv) all other appropriate legal relief, including punitive damages, id. at p. 30, ¶¶ f, h, i; and (v) attorneys' fees and costs, id. at ¶ j. The Fourth Amended Complaint contains a jury demand on all claims.

At a hearing held on November 16, 2017, the parties represented that there was a dispute concerning Plaintiffs' entitlement to trial by jury for their Spill Act claims. The Court set a briefing schedule, and, on January 22, 2018, the parties filed cross motions addressing Plaintiffs' entitlement to trial by jury and the permissible ordering of bench and jury proceedings under the Seventh Amendment. Although initially represented as concerning the Spill Act, the parties' motion briefing addresses Plaintiffs' entitlement to trial by jury for all of Plaintiffs' statutory and common law claims based upon the character of the relief sought in each claim. In their motion, Plaintiffs argue that the Seventh Amendment entitles them to a jury trial on all claims in their Fourth Amended Complaint, including claims under the Spill Act, which seek either compensatory or primary restoration damages. Plaintiffs further contend that the Seventh Amendmentmandates that these legal claims be tried to a jury before any remaining equitable claims are tried to the bench. In their cross motion, Defendants substantially concede⁶ that Plaintiffs are entitled to a jury trial on their claims for compensatory restoration damages, but argue, based upon the Third Circuit's decision in Hatco Corp. v. W.R. Grace & Co. Conn., 59 F.3d 400 (3d Cir. 1995), that primary restoration damages under the Spill Act, and, by implication, such damages under all of Plaintiffs' legal theories, constitute equitable relief for which the Seventh Amendment provides no jury trial right. Defendants further contend that Plaintiffs' claims for primary restoration damages constitute roughly 99.4% of Plaintiffs' total potential recovery in the Fourth Amended Complaint, such that trying them first would advance the interests of judicial efficiency. Defendants therefore request that the Court exercise its discretion under Fed. R. Civ. P. 42 to bifurcate the trial into an initial bench trial on Plaintiffs' Spill Act claim for primary restoration damages, and a subsequent jury trial on all remaining claims for legal relief.

II. STANDARD OF REVIEW

In considering the present cross motions, the Court is called upon to resolve Plaintiffs' entitlement to trial by jury on their claims for monetary damages and to determine how, if at all, any trial in this matter should be bifurcated to ensure the efficient resolution of Plaintiffs' claims, while preserving Plaintiff's right to trial by jury under the Seventh Amendment. "When a jury trial has been demanded . . . [t]he trial on all issuesso demanded must be by jury unless . . . the court, on motion or on its own, finds that on some or all of those issues there is no federal right to a jury trial." Fed. R. Civ. P. 39(a)(2). "The right to a jury trial in federal court, regardless of whether the claim arises under state law, presents a question of federal law." In re City of Philadelphia Litigation, 158 F.3d 723, 726 (3d Cir. 1998) (citing Simler v. Conner, 372 U.S. 221, 222 (1963) (per curiam)). This holds true "'even when a state statute or state constitution would preclude a jury trial in state court.'" Marra v. Philadelphia Hous. Auth., 497 F.3d 286, 313 (3d Cir. 2007), as amended (Aug. 28, 2007) (quoting Gipson v. KAS Snacktime Co., 83 F.3d 225, 230 (8th Cir. 1996) (citations omitted)). "This long-recognized precept is dictated by the clear command of the Seventh Amendment," Marra v. Philadelphia Hous. Auth., 497 F.3d 286, 313 (3d Cir. 2007), as amended (Aug. 28, 2007), and plays a critical role in the present case, where past state practice suggests that Spill Act claims are tried to the court, not a jury, under state law. See GEI Int'l Corp. v. St. Paul Fire & Marine Ins. Co., 287 N.J. Super. 385, 391-92, 671 A.2d 171, 174 (App. Div. 1996), aff'd sub nom. In re Envtl. Ins. Declaratory Judgment Actions, 149 N.J. 278, 693 A.2d 844 (1997) ("In New Jersey, as in other jurisdictions, the right to trial by jury remains inviolate, N.J. Const. art. I, ¶ 9, but inviolate only with respect to causes of action that were triable by jury at common law. . . . The Spill Act is a newly-created statutory right and the Legislature by its enactment did not codify nor could it have codified a common law right that did not pre-exist."); W.R. Grace & Co. v. Weja, Inc., No. A-5527-03T1, 2006 WL 3435047, at *1 (N.J. Super. Ct. App. Div. Nov. 30, 2006) ("No jury trials are available for claims brought under [Spill Act]").

The Seventh Amendment to the United States Constitution provides that "in Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved...." U.S. Const. amend. VII. "[T]he Seventh Amendment [ ] applies not only to common-law causes of action, but also to 'actions brought to enforce statutory rights that are analogous to common-law causes of action ordinarily decided in English law courts in the late 18th century, as opposed to those customarily heard by courts of equity or admiralty.' " Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 348, 118 S.Ct. 1279, 140 L.Ed.2d 438 (1998) (quoting Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 42, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989)). See also Doe v. Hesketh, 828 F.3d 159, 169 (3d Cir. 2016) ("'The Seventh Amendment [applies] to actions enforcing statutory rights, and requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the...