In Borough of Edgewater v. Waterside Construction, LLC, et al., 2022 WL 557903 (D.N.J. Feb. 24, 2004), Plaintiff Borough of Edgewater (“Edgewater”) brought Spill Act claims relating to PCB contaminated material which was used as fill in a public park project.  At issue was whether Arconic, as a prior owner of the property from which the fill was obtained, was “in any way” responsible for contamination resulting from use of the fill at another property.  The Court held that, because Arconic had no control over the property, and hence the fill, at the time of its subsequent use, it was not liable to the Borough under the Spill Act.

In 1938 Alcoa, now known as Arconic, constructed and operated an industrial plant including a structure known as “Building 12” which was found to be contaminated with PCBs.  As we described in a prior post on this case, Arconic sold the property in 1997 to North River Mews Associates, LLC.  In 2011, Edgewater wanted to improve a 27-acre public park owned by the borough known as “Veterans Field” and the construction company hired to perform the improvement project imported and used as fill PCB-contaminated material from Building 12.Edgewater brought claims against Arconic, among others, including a Spill Act contribution claim pursuant to 58 N.J. Stat. Ann. 58:10-23, 11(f)(a)(2) which provides  that whenever a discharger cleans up and removes a discharge of a hazardous substance, that discharger shall have a right of contribution against all other dischargers and persons “in any way responsible” for a discharged hazardous substance. 

Edgewater claimed Arconic was a person “in any way responsible for a discharged hazardous substance” by virtue of its generation of PCBs at the Arconic property and its prior ownership.  The district court disagreed, granting summary judgment in favor of Arconic.  See Borough of Edgewater v. Waterside Construction, LLC, et al., 2021 WL 3030280 (D.N.J. July 19, 2021).  The court held that to impose liability under the Spill Act, “there must be shown to be a reasonable link between the discharge, the putative discharger, and the contamination at the specifically damaged site.”  Because Arconic “did not own, possess, or control Building 12 at the time its hazardous materials were disposed of at Veterans Field, and had not for approximately 15 years”, it was not liable.  The court held “Arconic was not the discharger of the contamination at Veterans Field and was not involved in any decisions or actions concerning the discharge.”

Edgewater moved for reconsideration arguing there had been a clear error of law and manifest injustice.  While there had been no cases decided in New Jersey involving the same fact pattern, Edgewater argued the Court misapplied numerous New Jersey cases under which Arconic should be held liable:

• • Edgewater argued its case was “directly analogous” to New Jersey Turnpike Authority v. PPG Industries, Inc., 197 F.3d 96 (3d Cir. 1999), in which three companies who processed chromium ore in New Jersey for decades causing Chromate ore processing residue “sold or gave” the contaminated material to contractors for construction fill. The court distinguished this from Arconic, who did not sell or give the PCB material to anyone.  Rather, the material was taken from Building 12 without Arconic’s knowledge over a decade after Arconic no longer owned or controlled the property. 
  • Edgewater also argued the court misapplied the case of DEP v. Dimant, 51 A.3d 816 (N.J. 2012), in which the New Jersey Supreme Court held that the phrase “in any way responsible” requires “some connection between the discharge and the alleged discharger.” The Court found that following Dimant, New Jersey courts had applied the language “in any way responsible” to require either “ownership or control over the property at the time of the damaging discharge, or control over the hazardous substance that caused the contamination.”  Accordingly, the Court rejected Edgewater’s argument that it must only show a connection between the PCBs at Building 12 and the contamination at Veteran’s Field for liability under the Spill Act. 
  • The Court then discussed its decision in Dorrell v. Woodruff Energy, Inc., 2021 WL 922446 (N.J. Sup. Ct. App. Div. Mar. 11, 2021), in which the court refused to impose liability on a company which regularly delivered fuel to an above-ground storage tank which leaked. The court found that “mere delivery of oil, that is at some point later in time discharged from a tank, is [not] sufficient to establish liability.”   Rather, for the delivery company to be liable, the plaintiff had to show the defendant had notice of the leak, such as a small leak over time which required it to deliver more oil than the tank’s capacity.  The Court held Dorrell refuted Edgewater’s interpretation of the Spill Act because while there was a connection between the fuel which spilled and the ultimate harm, more was required to impose liability. 
  • Similarly, in Voellinger v. Electro-Coatings, Inc., 2012 WL 1548060 (N.J. Sup. Ct. App. Div. June 29, 2011), defendant ECI owned and operated a metal plating business which was sold to Aeroplating in 1980. Aeroplating later sued ECI under the Spill Act for the release of certain chemicals on the property during ECI’s ownership which stemmed from a degreaser used by ECI.  The court refused to impose liability on ECI, finding that even if the degreaser used by ECI was a source of contamination, Aeroplating must prove the discharge occurred during ECI’s ownership for ECI to be liable.  Again, the court found that while there was a connection between the defendant’s hazardous substance and the ultimate harm, that was not sufficient to impose liability.

Accordingly, the court rejected Edgewater’s interpretation of the Spill Act which would impose liability where there is a connection between the defendant’s hazardous substance and the ultimate environmental harm.  Rather, there must be a link between “the discharge complained of and the alleged discharger.”  While the Court noted that Arconic could be liable in a traditional “two-site” case – i.e., where PCBs at Building 12 migrated to an adjacent site – where contaminated materials from a property are later used without the prior owner’s knowledge or control, the nexus between the prior owner and the discharge at issue is insufficient for liability under the New Jersey Spill Act.

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