The New Jersey Superior Court Appellate Division recently confirmed that the New Jersey Spill Act applies retroactively and abrogates the State of New Jersey’s sovereign immunity for contribution to contamination.  The case, NL Industries, Inc. v. State, Dkt. No. L-1296-14 (Law Div., Middlesex Cnty., August 27, 2014), affd. Dkt. No. A-0869-1413, (App. Div., Aug. 26, 2015), deals with the remediation of contamination related to the historic construction of a sea wall and jetty in the Laurence Harbor section of Old Bridge Township.  The sea wall and jetty are part of the Raritan Bay Superfund site, which was placed on the National Priorities List in November 2009 after EPA detected elevated levels of lead and heavy metals in the soil, beach, sand, and sediments surrounding the Bay.  In January 2014, the EPA issued a unilateral administrative order to NL Industries, the manufacturer of lead and other heavy metal slags that were used to construct the sea wall, to clean up the contamination, which is anticipated to cost in excess of $75 million.  

NL brought suit against the State of New Jersey, seeking contribution for cleanup costs under the Spill Act, arguing NJDEP permitted and approved the construction of the seawall, with full knowledge that the wall would be built from lead-bearing slags, and did nothing to ameliorate the situation once the local municipalities and public raised concerns. The State filed a motion to dismiss, arguing that the Spill Act did not retroactively abrogate the State’s sovereign immunity for acts or omissions prior to the enactment of the Spill Act (i.e. before April 1, 1977).  The State also argued that NL failed to follow the notice procedures required by the New Jersey’s Tort Claims Act, which the State argued applied to Spill Act contribution and cost recovery claims as well as typical common law tort actions.

Judge Wolfson, the trial court judge, issued a lengthy written opinion (which the Appellate Division affirmed whole-scale), that rejected both of the State’s arguments.  The New Jersey Legislature explicitly amended the Spill Act to allow retroactive application of strict liability for acts or omissions that occurred prior to April 1, 1977.  When the Spill Act was amended again in 1991 to allow for a private right of contribution, Judge Wolfson noted that the New Jersey Legislature “declined to immunize or exclude ‘the State of New Jersey and any of its political subdivisions or agents’ from the Act’s reach,” but instead specifically defines a “person” that can be “in any way responsible” for the discharge of a hazardous substance to include the State of New Jersey, its political subdivisions, or agents.  N.J.S.A. 58:10-2311b.  Further, Judge Wolfson ruled that because the Spill Act specifically imposes liability on the State, he was “unable to discern any intent from the legislative history that would indicate a desire to make the procedure protection of the [Tort Claims Act] applicable to claims brought under the Spill Act.”

While NL’s claims against the State of New Jersey survived the State’s motion to dismiss, it is anticipated that the State will appeal the Appellate Division’s ruling to the New Jersey Supreme Court.  NL has also filed a similar suit against various municipalities and private defendants in the District of New Jersey which is still pending. 

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