Trenton — In a stunning legal setback, the State of New Jersey cannot recover damages from polluters in what may be thousands of contaminated groundwater cases, according to Public Employees for Environmental Responsibility (PEER). The problem stems from the state’s failure to adopt regulations governing how to calculate “natural resources damages” (NRD) for polluted drinking water. As a result, polluters can avoid compensating the public for treatment of tainted groundwater, replacement water supply lines, drilling new wells and associated damages — leaving taxpayers with uncalculated costs.

On August 24, 2007, a state Superior Court dismissed with prejudice an attempt by the New Jersey Department of Environmental Protection (DEP) to recover a natural resource damage claim involving benzene and toluene contamination of private wells in the Hillwood Lakes area of Ewing Township. (N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp., Docket No. MER-L-2933-02 (N.J. Super. Ct. Law Div. Aug. 24, 2007)). The Court found that DEP did not follow the rule making process to establish, by regulation, a reliable formula for calculating natural resources damages. In the absence of regulations, the Court also found DEP lacked adequate scientific support to proceed on a case-by-case basis.

This ruling affects as many as 4,600 contaminated sites prioritized by DEP. The problem may be fatal due to an inexplicable related lapse by the Corzine Administration in allowing the statute of limitations on these cases to expire on June 30, 2007, after it had been twice extended under previous administrations.

“This regulatory train wreck was completely preventable,” stated New Jersey PEER Director Bill Wolfe, a former DEP analyst, pointing to repeated acknowledgements by state officials of the need to act:

  • In 2002 “Vulnerability Assessments,” DEP estimated that as many as 4,600 cases may require NRD litigation which would necessitate both rule making and extending the statute of limitations. This data prompted former DEP Commissioner Bradley Campbell to say he was “astounded to find on taking office in [2002] that the [DEP] had not pursued, or left unsettled, thousands of cases against polluters responsible for a wide range of damages to New Jersey’s natural resources,” pledging to put the program “back on track”;
  • In a 2004 settlement agreement of the case New Jersey Society of Environmental & Economic Development v. Campbell (N.J. Super. Law Div., Mercer County) DEP legally committed to propose formal natural resource damage regulations; and
  • At a May 24, 2005 seminar at Rutgers’ Cook College, John Sacco, Chief of DEP’s Office of Natural Resource Restoration pledged that natural resource damage regulations will “hopefully” be proposed in fall 2005. But since then, there has been no apparent activity to move rules forward.

In a June 2007 press release, DEP touted the filing of 120 NRD lawsuits that “could result in hundreds of millions of dollars in compensation from polluters who have harmed New Jersey’s natural resources, including numerous manufacturers and marketers of the gasoline additive MTBE.” Not only are all these NRD suits now in jeopardy, but so are all future such litigation and ongoing NRD settlement negotiations in an unknown number of groundwater pollution cases.

“The corporations who had the most at stake stalled the NRD program during the Whitman administration but failed to kill it outright. Now, through inaction, the Corzine administration has provided polluters precisely the relief they sought,” Wolfe added. “Those officials responsible for these policies and blocking these regulations should be identified and drummed out of public service.”


See a summary of the N.J. Dept. of Envtl. Prot. v. Exxon Mobil Corp ruling

Look at the DEP press release touting ill-fated recovery litigation

View 2006 law review (FDCC Quarterly) article on “New Jersey’s Natural Resource Damage Initiative”

New Jersey PEER is a state chapter of a national alliance of state and federal agency resource professionals working to ensure environmental ethics and government accountability.

Phone: 202-265-7337

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