The New Jersey Supreme Court yesterday ruled that the state must demonstrate a cause-and-effect connection before it holds a suspected polluter responsible for contaminating groundwater or other natural resources, even if a hazardous discharge has occurred.
The unanimous 42-page decision may make it more difficult and more expensive for the New Jersey Department of Environmental Protection to pursue potential polluters to recover cleanup costs.
It also marks a possible weakening of the state’s toughest law governing the reclamation of contaminated sites, the New Jersey Spill Control Act. The 1976 measure was passed in the wake of a big oil spill, and was a model for the federal Superfund law.
The case that led to the Supreme Court decision was a relatively minor one, involving groundwater contamination in Bound Brook that polluted some residential wells. The discharge was alleged to have come from a family-owned dry cleaners in a small, three-unit strip mall.
Despite its low profile, the case attracted enormous interest from the business community and environmental organizations, both of which joined in the suit, largely because of its precedent-setting potential.
“We felt compelled to become involved because of the devastating implications it could have had to every business in New Jersey,’’ said John Galandak, president of the Commerce and Industry Association of New Jersey, which was joined in the case by the New Jersey Chamber of Commerce, the Fuel Merchants Association of New Jersey, and the Chemistry Industry Council of New Jersey.
They argued, and the court agreed, that the state was trying to hold Sue’s Clothes Hangar accountable for ground-water contamination without ever proving it was the source of the pollution. Before Sue’s began operations, other dry cleaning establishments had operated in the same strip mall.
Environmentalists were troubled by the decision.
“We are very concerned it does weaken the Spill Act, which was groundbreaking legislation,’’ said Hilary Semel, executive director of the Eastern Environmental Law Center.
“The Spill Act was intended to have a broad standard of liability so pollution could be investigated and cleaned up by those responsible,’’ Semel said. “It will possibly slow down any type of cleanup and also mean there could be less funding for those cleanups.’’
Jeff Tittel, director of the New Jersey Sierra Club, agreed. “This decision makes it very hard for DEP to require cleanups where there is contaminated groundwater, especially in urban areas where there are many leaks and spills,’’ he said.
New Jersey's highest court and its lower ones argued that the state did only a cursory examination of who was to blame for the contamination of the residents’ wells in Bound Brook. In its opinion, the court noted that none of the facts in the case are in dispute.
Those facts include the discovery in 1988 of contaminated groundwater tainted by perchloroethylene (PCE), a compound used in the dry cleaning industry. Sue’s Clothes Hangar was part of a strip mall that had been the site of a laundry and dry cleaning business since the 1950s.
In probing the source of contamination, the DEP had taken samples from two locations at Sue’s, one near a pit close to the dry cleaning machines and another from a pipe protruding from the business to the building’s exterior, both of which showed above normal PCE levels. Those were the only samples the state agency took from Sue’s, a point repeatedly mentioned by the court.
In its arguments, the DEP said the undisputed evidence of Sue’s PCE discharge, combined with the fact that the highest concentrations were found the groundwater beneath the property, create the “necessary causal nexus’’ to impose liability under the Spill Act.
The court ruled that the DEP must satisfy another requirement.
“A nexus also must be demonstrated to exist between the discharge for which one is responsible -- in any way -- and the contaminated site for which cleanup and other related authorized costs are incurred,’’ according to the decision. “A reasonable nexus or connection must be demonstrated by a preponderance of the evidence.’’
The court ruled that there was no basis for the state to shift liability to Sue’s because the DEP never made the requisite connections showing how the water dripping from the pipe at the business “reasonably could have made its way into the groundwater.’’
In seeking to hold Sue’s liable for cleanup studies and remediation costs, the court held that the DEP failed to provide a connection.
“We conclude that it would be fundamentally unfair to saddle Sue’s with such an investigatory obligation, on a joint and several liability basis, at this time, considerable more than a decade after the DEP discovered the dripping pipe during Sue’s operation,’’ the court concluded.
Joint and several liability holds a business potentially accountable for all the cleanup costs, even if they contributed only a fraction of the pollution.
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