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New Jersey Dep't of Environmental Protection v. Exxon Mobil Corp.

Superior Court of New Jersey, Appellate Division

April 25, 2007, Argued ; June 6, 2007, Decided

DOCKET NO. A-6588-05T5

Opinion

 [*391]  [**347]  The opinion of the court was delivered by

PARRILLO, J.A.D.

At issue is whether an entity may be strictly liable under the New Jersey Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to 23.24, for damages for the loss of use of natural resources adversely affected by its discharge of hazardous substances, a question of first impression in this State. On leave granted, the New Jersey Department of Environmental Protection (DEP) and the Administrator of the New Jersey Spill Compensation Fund appeal from the May 26, 2006 order of the Law Division dismissing on summary judgment the State's statutory claim against defendant Exxon Mobil Corporation (Exxon Mobil or defendant) to recover such natural resource damages. For reasons that follow, we reverse and remand.

By way of background, at all relevant times Exxon Mobil operated petroleum refineries [***3]  and petrochemical plants in both Linden and Bayonne. The Linden facility commenced operation as early as 1909 on 1300 acres (the Bayway site) and consisted of a refinery, two chemical plants, tank fields, and a distribution station. A waterfront area borders on the Arthur Kill. Two streams on the site join to form Morses Creek. Two tank fields on the site drain to the Rahway River. Land use in the vicinity of the site is residential, commercial, and industrial.

The Bayonne site originally consisted of 640 acres, but as of the late 1960s, was reduced to 288 acres including 250 acres of land  [*392]  and 38 riparian waterfront acres. The site is surrounded by heavy and light industry, interconnected by a transportation network of roadways, railroads, and the navigable waters of the Kill Van Kull and Upper New York Bay. Platty Kill Creek is located to the west of the site, the Upper New York Bay to the north, and the Kill Van Kull to the south.

During much of the period between 1909 and 1972, the Bayonne and Bayway refineries were interconnected by pipeline and operated as a single, integrated refinery and petrochemical facility, generally known as the "New Jersey Works" up until 1954, and thereafter [***4]  the "Jersey Works". According to Exxon Mobil, the United States government controlled production activities at the New Jersey Works during World War II, resulting in increased production and greater quantities of wastes that needed disposal.

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393 N.J. Super. 388 *; 923 A.2d 345 **; 2007 N.J. Super. LEXIS 174 ***

NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION AND ADMINISTRATOR, NEW JERSEY SPILL COMPENSATION FUND, PLAINTIFFS-APPELLANTS, v. EXXON MOBIL CORPORATION, DEFENDANT-RESPONDENT.

Subsequent History:  [***1]  Approved For Publication June 6, 2007.

On remand at, Summary judgment granted, in part, summary judgment denied, in part by New Jersey Dep't of Envtl. Prot. v. Exxon Mobil Corp., 2008 N.J. Super. Unpub. LEXIS 3066 (Law Div., Aug. 29, 2008)

Prior History: On appeal from May 26, 2006, order of the Superior Court of New Jersey, Law Division, Union County, L-3026-04 consolidated with L-4415-04 from the Law Division, Hudson County.

N.J. Dep't of Envtl. Prot. & Adm'r v. Exxon Mobil Corp., 2006 N.J. Super. Unpub. LEXIS 3010 (Law Div., May 26, 2006)

Disposition:  The court reversed the order and remanded the case to the trial court for further proceedings, particularly, allowing plaintiffs to obtain loss of use damages as a component of the costs of mitigating damage to public natural resources sought.

CORE TERMS

natural resources, damages, restoration, cleanup, costs, site, removal, remediation, contamination, Directive, hazardous substance, loss of use, discharged, Creek, settlement, polluters, replacement, responsible party, strictly liable, Environmental, wetlands, compensatory, provisions, refineries, resources, hazardous, mitigate, acres, compensation payment, contaminated site

Environmental Law, Hazardous Wastes & Toxic Substances, Cleanup, Administrative Proceedings & Litigation, Remedies, Damages, Business & Corporate Compliance, CERCLA & Superfund, Cleanup Standards, General Overview, Assessment & Information Access, Audits & Site Assessments, Natural Resources & Public Lands, Oil Pollution Act, Oil Spill Liability Trust Fund, Tax Law, Federal Excise Taxes, Fuel Taxes, Nuisances, Strict Liability, & Trespasses, Enforcement, Cost Recovery Actions, Strict Liability, Jurisdiction, Administrative Law, Judicial Review, Standards of Review, Deference to Agency Statutory Interpretation, Exceeding Statutory Authority, Agency Rulemaking, Rule Application & Interpretation, Governments, Legislation, Interpretation, Consent Judgments