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Woodland Private Study Group v. New Jersey Dep't of Envtl. Protection

ELR Citation: 16 ELR 20025
Nos. No. 85-2291, 616 F. Supp. 794/23 ERC 2007/(D.N.J., 08/29/1985)

The court holds that the New Jersey Spill Compensation and Control Act (Spill Act) enforcement scheme does not violate the federal due process rights of alleged dischargers subject to New Jersey Department of Environmental Protection (DEP) cleanup directives. The court initially grants a potentially liable party's motion for permissive intervention under Federal Rule of Civil Procedure (FRCP) 24(b). Although this party may not intervene as of right under FRCP 24(a) because it failed to show that its interests would not be adequately represented by plaintiffs, permissive intervention is appropriate since the party raises identical claims to those already before the court and the litigants are not likely to be prejudiced. The court next holds that the DEP is immune under the Eleventh Amendment from plaintiffs' claims. However, plaintiffs may proceed with their action against the individual state officials.

Turning to plaintiffs' constitutional claims regarding individual components of the Spill Act, the court holds that the Act's strict liability and mandatory treble damages provisions do not violate due process. Statutes that impose strict liability for damages resulting from oil and chemical discharges are valid regulatory measures; liability for cleanup costs falls into this category. Treble damages provisions are common enforcement measures supported by case law. The court holds that the unavailability of "good faith" defenses to the imposition of treble damages and the lack of preenforcement judicial review of DEP directives do not, standing alone, violate due process. The court cocludes that the New Jersey Spill Compensation Fund provides an alternative remedy prior to a cost recovery action for parties wishing to challenge DEP orders, to allow them to avoid the risk of treble damages. Such parties can avoid treble damages by complying with the directives, filing a reimbursement claim against the Spill Fund, and contesting liability before an arbitration board whose decision is subject to judicial review. The court rejects plaintiffs' arguments that they are precluded from bringing a reimbursement claim. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not bar plaintiffs' recovery of Spill Fund monies since the DEP withdrew its request for CERCLA funds for cleanup of the site. Nor does the DEP's decision to fund its study with funds from the Governor's Contingency Fund bar plaintiffs' recovery from the Spill Fund. Third, a provision of the Act barring recovery of Spill Fund monies requested over six years from the date of the incident that caused the damage was repealed prior to the DEP directives. Fourth, the one-year statute of limitations does not bar plaintiffs from asserting a Spill Fund claim. Finally, although DEP considers plaintiffs responsible parties, they have standing to make a Spill Fund claim. Plaintiffs will be denied compensation only if the DEP can prove that plaintiffs are responsible parties.

The court next holds that the Act's enforcement mechanisms taken as a whole are not impermissibly coercive and satisfy due process. Plaintiffs' reliance on cases interpreting CERCLA that either permitted a good-faith defense or enjoined imposition of treble damages is misplaced because of the opportunity, under the Spill Act, to seek reimbursement. The Spill Fund reimbursement procedures satisfy due process requirements despite the unavailability of good faith defenses and preenforcement review. An impartial arbitration board decides plaintiffs' reimbursement claim and the board's decision is subject to judicial review. This system is more flexible and less costly than full-fledged administrative hearings, while still satisfying federal due process requirements.

Finally, the court holds that DEP's directive violates due process by requiring that the allegedly responsible parties act within seven days. The parties cannot reach an informed conclusion as to their probable liability under the Spill Act within that time period, and thus the provision could coerce an allegedly responsible party to comply with the directive to avoid treble damages liability. The party would still have a right to judicial review, but would be prevented from litigating a cost recovery action later. While DEP's action does not affect the outcome of the case because the court's temporary restraining order provided plaintiffs ample time to assess their liability, the court directs the DEP to adopt longer compliance deadlines in its directives requiring private parties to contribute to the study costs.

Counsel for Plaintiffs
William H. Hyatt Jr.
Pitney, Hardin, Kipp & Szuch
163 Madison Ave., CN 1945, Morristown NJ 07960-1945
(201) 267-3333

Counsel for Defendants
Mary C. Jacobsen, Ross A. Lewin, Deputy Attorneys General
Richard J. Hughes Justice Complex, CN112, Trenton NJ 08625
(609) 984-6500

Counsel for Plaintiff-Intervenor
Genevieve K. LaRobardier
Margolis, Chase, Kosocki, Aboyoun & Hartman
60 Pompton Ave. (Route #23), Verona NJ 07044
(201) 239-3000