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

ELR Citation: 37 ELR 20129
Nos. No. A-6588-05T5, (N.J. Super. Ct. App. Div., 06/06/2007)

The court, in a matter of first impression, held that an entity may be strictly liable under the New Jersey Spill Compensation and Control Act (Spill Act) for damages for the "loss of use" of natural resources adversely affected by its discharge of hazardous substances. The case arose after the state filed suit against an oil company under the Spill Act. The oil company did not dispute that it was strictly liable for the costs of physical restoration of natural resources damaged or destroyed by its discharge of hazardous substances. It also acknowledged that "loss of use" damages are available to the state under common law and other state statutes. The only issue, therefore, was whether the Spill Act affords the state the same relief. The Spill Act provides for strict joint and several liability, without regard to fault, "for all cleanup and removal costs no matter by whom incurred." The definition of "cleanup and removal cost" includes costs "incurred" to "mitigate damage to the public . . . welfare." The court concluded that "loss of use" damages are a component of costs of mitigating damage to public natural resources. The court also found a clear legislative recognition of the state's authority to seek compensation not just for physical injury to natural resources, but also for the loss of the benefits they provide. The court, therefore, reversed and remanded a lower court decision dismissing on summary judgment the state's statutory claim against an oil company to recover such natural resource damages.