Author: Paul M. Hauge

EPA Issues Directive to Clarify Existing Guidance on Sediment Cleanups

From Portland Harbor in Oregon to New Jersey’s Passaic River, contaminated sediment sites present unique challenges. While the EPA issued guidance documents for addressing contaminated sediment sites in 2002 and 2005, it has since learned many lessons in addressing dozens of such sites. A new memorandum from the EPA’s Office of Land and Emergency Management (OLEM), formerly the Office of Solid Waste and Emergency Response, sets forth 11 recommendations for improving the way the agency’s regional offices handle the complex process of cleaning up contaminated sediments.

No Need to Wait: Supreme Court Permits Judicial Review of Wetlands Jurisdictional Determinations

As we reported, four years ago, in Sackett v. EPA, the U.S. Supreme Court held that a recipient of a compliance order from the U.S. Environmental Protection Agency (EPA) for allegedly illegal filling of wetlands could directly challenge the order in court, and did not have to wait until EPA filed a lawsuit to enforce the order before obtaining judicial review of its validity. In a recent opinion the Court extended the rationale of Sackett and again lowered the threshold of judicial reviewability, holding that a landowner can seek judicial review of a mere determination by the U.S. Army Corps of Engineers (Corps) that its property contains wetlands whose filling would require a permit under the Clean Water Act.

Supreme Court Will Decide Whether State Can Face Liability Under Spill Act

The New Jersey Supreme Court has decided to hear the State’s appeal of a September 2015 Appellate Division decision that held the State potentially liable for cleanup costs at the Raritan Bay Slag Site. As we reported last fall, the Appellate Division held in NL Industries, Inc. v. State of New Jersey that the Spill Compensation and Control Act, which imposes liability upon both dischargers of hazardous substances and on parties “in any way responsible” for the hazardous substances, is applicable to the State. Under the Appellate Division’s ruling, the State could bear liability for all or some of the cleanup costs related to a seawall that was constructed using contaminated materials. The suit alleges that the State should be held liable because it owned the land under the seawall, approved its construction, issued a riparian grant to the developer that sought to build it, and issued a permit for it.

No Safe Harbor: State Can Face Liability Under Spill Act

Be careful what you wish for. That may be the message of the Appellate Division’s September 23 opinion in NL Industries, Inc. v. State of New Jersey, No. A-0869-14T3. Affirming a “thoughtful and erudite” 2014 Law Division opinion by Judge Douglas K. Wolfson, the appellate court held that the onerous liability regime of the 1976 Spill Compensation and Control Act (commonly known as the Spill Act), which imposes strict, joint, and several liability for cleanups on both the dischargers of hazardous substances and on the much broader class of parties “in any way responsible” for the hazardous substances, is equally applicable to the State. As a result, the State may be responsible for a portion of the remediation of a contaminated site on the shoreline of Raritan Bay that will likely cost more than $75 million.

Turnpike Authority is Not a “Local Government Unit”: Tax Court

All politics, the saying goes, is local. Not so with government, according to a recent decision from New Jersey’s Tax Court. In an opinion that teaches more about legislative drafting than it does about tax policy, the court in New Jersey Turnpike Authority v. Township of Monroe parsed a complex definition of “local government unit” in the Garden State Preservation Trust Act (GSPTA). It held that the New Jersey Turnpike Authority did not come within that definition, and thus could not claim that status to obtain an exemption from roll-back taxes on a parcel it purchased in 2009.

New York Court of Appeals Upholds Municipal Authority to Ban Fracking

New York’s highest court dealt a blow to the hydrofracking industry on June 30 when it upheld, in a consolidated opinion in Matter of Wallach v. Town of Dryden and Cooperstown Holstein Corp. v. Town of Middlefield, the authority of municipalities to use their zoning powers to ban hydrofracking. The Court of Appeals held that provisions on the towns’ zoning ordinances that prohibited hydrofracking anywhere within their borders were not preempted by the “supersession clause” of the state’s Oil, Gas and Solution Mining Law (OGSML). That clause, said the Court, prevents municipalities from regulating the “how” of hydrofracking but does not bar them from limiting “where” it can take place.

Second Circuit Holds That CERCLA’s “Act of War” Defense Shields Owners and Tenants from Cleanup Liability for Dust Created By Towers’ Destruction on 9/11

In the first decision of its kind, the Second Circuit on May 2, held that the September 11, 2001, attacks on the World Trade Center were “acts of war” for purposes of the affirmative defense for such acts contained in the onerous liability provision of the federal Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Accepting the arguments raised by Gibbons and other firms representing the owners and tenants of the buildings (and the airlines whose planes were hijacked), the Court found that even though they were not committed by uniformed military forces of a nation-state, the attacks were nevertheless acts of war for CERCLA purposes (though not necessarily in other legal contexts) because they (1) were “indistinguishable from military attack in purpose, scale, means, and effect,” (2) were recognized as acts of war by both the President and Congress, and (3) “wrested from the defendants all control over the planes and the buildings, obviated any precautions or prudent measures defendants might have taken to prevent contamination, and located sole responsibility for the event and the environmental consequences on fanatics whose acts the defendants were not bound by CERCLA to anticipate or prevent.”

New Jersey Supreme Court Holds That Claimants in Continuous-Trigger Environmental Coverage Cases Must Exhaust Policy Limits of Solvent Carriers Before Seeking Payment From Fund for Insolvent Carriers

Almost twenty years after establishing a methodology for allocating remediation costs among insurance policies in so-called “long-tail” cases, the New Jersey Supreme Court was faced with a new question: what happens when one of the insurers is insolvent? Applying a 2004 statutory amendment and interpreting it as reversing the result in a 1997 Appellate Division case, the Court held, in Farmers Mutual Fire Insurance Company of Salem v. New Jersey Property-Liability Insurance Guaranty Association that in such a case the policy limits of all solvent carriers must be exhausted before a claimant can recover any benefits from a special statutory fund created to stand in the place of insolvent insurers. The decision has important ramifications for corporations with complex insurance programs and potential environmental issues regarding sites where contamination may have been present over many years.

In Dune Construction Dispute, N.J. Supreme Court Holds that “Just Compensation” in Partial-Takings Cases Must Be Reduced by Value of All Reasonably Calculable Benefits

When the Borough of Harvey Cedars took a portion of the beachfront property of Harvey and Phyllis Karan to allow the Army Corps of Engineers to construct a protective dune, the Karans lost their view of the ocean, and a court awarded them $375,000 as compensation for the drop in the value of their $1.7 million home. In a momentous decision with important ramifications for shore protection efforts and for a much broader category of eminent domain cases, the New Jersey Supreme Court held that “just compensation” for the Karans should also have reflected the quantifiable benefits that they received as a result of the improved flood protection provided by the dune.

The Price Must Be Right: U.S. Supreme Court Extends “Nexus” and “Rough Proportionality” Requirements to Monetary Exactions Linked to Development Proposals

It has long been the law that regulators may not condition the grant of a land-use permit on the owner’s relinquishment of an interest in the property unless there is both a “nexus” and “rough proportionality” between the government’s demand and the effects of the proposed land use. In a case that may have been overlooked amidst several landmark decisions handed down in the same week, the U.S. Supreme Court ruled that these requirements also apply to monetary exactions.