City of Perth Amboy v. Madison Industries

Nos. A-1127-81T3; -1276-81T3 (N.J. Super. Ct. App. Div. April 21, 1983)

The court affirms a damage award against two polluters for contamination of a city water supply in violation of the New Jersey Spill Compensation and Control and Water Pollution Control Acts but reverses on the allocation of liability, ruling that the polluters be held jointly and severally liable. The trial court, holding defendants severally liable, had ordered them to pay the cost of specified cleanup measures, which the court fixed at $5.2 million, apportioned according to their contribution to the problem. In addition, the trial court had awarded the City of Perth Amboy $100,000 for the temporary loss of its watershed. The court first upholds the trial court's choice of cleanup programs, ruling that although the plan is not guaranteed success, substantial evidence supports the court's choice. The court then rejects the city's challenge to the trial court's award of temporary rather than permanent damages for loss of its watershed, noting that the city may seek additional damages if the restoration fails or if costs of obtaining replacement water rise.

The court rules that appellants should be held jointly and severally liable. Under New Jersey common law either appellant, rather than the public, would be held fully liable because the act of either would have necessitated a restoration program, and the entire program must be completed to restore the water supply. Also, the Spill Compensation and Control Act calls for joint and several strict liability. However, the court also rules that as between appellants, the trial court correctly apportioned damages. The court then rules that the trial court erred in fixing the damages before the actual cost of cleanup was known. The court notes that state laws will protect the appellants from paying for unreasonable cleanup expenses. Finally, the court rules that it was proper for the trial court to hire an independent expert and to bill appellants for the expert's fees.

Counsel for Appellant
William J. Bigham, Vincent J. Paluzzi
Sterns, Herbert & Weinroth
186 W. State St., Trenton NJ 08607
(609) 392-2100

Michael L. Rodberg, Murray D. Brochin
Lowenstein, Sandler, Brochin, Kohl, Fisher & Boylan
65 Livingston Ave., Roseland NJ 07068
(201) 992-8700

Counsel for Respondents
Albert W. Seaman
272 High St., P.O. Box 868, Perth Amboy NJ 08862
(201) 826-2100

Steven R. Gray, Deputy Attorney General; Deborah T. Poritz
Division of Environmental Protection
Dep't of Law & Public Safety, Justice Complex Bldg., 25 Market St., Trenton NJ 08625
(609) 292-4919

Before Bischoff, Coleman, and Gaulkin, JJ.

[13 ELR 20554]

Per curiam:

These appeals and cross appeals are from the final order and judgment entered in these consolidated actions in favor of plaintiffs, City of Perth Amboy and the New Jersey Department of Environmental Protection (DEP), against defendants, Chemical & Pollution Sciences, Inc., (CPS), and Madison Industries, Inc., (Madison). The trial judge found that organic chemical emissions from CPS and heavy metal emissions from Madison entered the groundwater and the waters of neighboring Prickett's Brook resulting in contamination of an adjacent well field owned by the City of Perth Amboy. Statutory authority for a specific remedy to this pollution, created by the Spill Compensation and Control Act, N.J.S.A. 58:10-23.1(g)(c), and the Water Pollution Control Act, N.J.S.A. 58:10A-10c(3), was invoked by the trial court to compel contribution by both industrial defendants for the cost of DEP's recommended program for restoration of Prickett's Brook watershed.

The remedy ordered by the court provided for: (1) construction and operation of a slurry cutoff wall three to five feet thick of an impermeable substance surrounding the two industries at their boundaries to a depth of approximately 70 feet and anchored in the South Amboy fire clay layer underlying the aquifer; (2) installation of four maintenance wells within the slurry cutoff wall, four decontamination pump wells outside the slurry cutoff wall and monitoring wells to determine contamination levels; (3) diversion [13 ELR 20555] or Prickett's Brook to a new channel to the south and east bypassing the two industries; (4) dredging, pumping and disposal of contaminated sediments of Prickett's Pond.

The trial court ordered that the contaminants which are to be pumped from the area may be discharged into a Middlesex County Utilities Authority interceptor through a constructed pipeline. Dredged metal contaminants are to be pretreated if necessary in a plant to be constructed at Madison's expense.

The cost of the slurry cutoff wall is to be borne by the defendants in proportion to the area enclosed by the slurry cutoff wall within their respective industrial sites. The cost of the construction and operation of the wells and the diversion of Prickett's Brook is to be shared equally by both defendants. The cost of heavy metal removal and sludge dewatering is to be borne by Madison. The cost of pumping pond water out of Prickett's Pond and disposing of the pumped waters into the Middlesex County Utilities Authority system is assessed against CPS. The total cost of the corrective measures is 5.2 million dollars. Each defendant is held to be only severally liable for its share of the total costs for the corrective measures. In addition, Madison and CPS are held jointly and severally liable to Perth Amboy for damages in the amount of $100,000 for the loss of use of its watershed during the four year projected duration of the cleanup program.

In these appeals defendants and the City of Perth Amboy question the propriety of the remedial measures claiming a lack of credible evidence to support the efficacy, necessity and fairness of the ordered cleanup and removal methods. We are persuaded that such uncertainty as exists regarding the ordered use of these particular methods does not warrant a new trial as to remedy. The proofs demonstrate extensive toxic pollution of the Perth Amboy watershed directly attributable to defendants' activities. Liability for the contamination is not contested in these appeals. We recognize, as did the trial judge, that the experimental nature of the possible remedial methods available under current technology precludes an absolute guarantee of success. Nevertheless, reasonable success with the ordered measures is indicated by the testimony of the court appointed expert. This reasonable probability, considered with the dangers to public health and safety inherent in an alternative plan such as the abandonment of the watershed, necessitates an attempt at cleanup. We find sufficient credible evidence in the record to support the findings and conclusions of the trial court. Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 484 (1974).

In its cross-appeal, the City of Perth Amboy contends that the award of $100,000 in damages is grossly inadequate. This figure represents the loss of the beneficial use of Perth Amboy's property located within the affected area of Pickett's Brook watershed as a water resource for the four year period of the cleanup program. At trial, the city proposed to abandon the watershed and sought damages for the permanent loss of its property andfor loss of the water itself.

We agree with the trial court's determination that the city's plan to abandon the use of the watershed was not as responsive to the public interest as the DEP's plan to restore and purify this water source. The DEP proposal is intended to safeguard the future water supply of the city and other downstream users. The city's claim for damages for loss of the water itself was denied because the city's water needs were being met by the suction and pump wells of another city watershed. The trial court's assessment of $100,000 damages presumes that the remedial measures ordered will succeed within four years and is without prejudice to any future claim for damages if these measures fail — or if, before four years time, the water needs of the city exceed the capacity of the city's presently operating wells. We affirm the damage award to the City of Perth Amboy. Since the court correctly wanted to see if the ordered remedies would work, it did not intend for the monetary aspect to be final. The court used its equitable power to fashion remedies which include the present payment of money, installation of cleanup procedures and future damages to the city if the cleanup measures do not work. This is highly desirable and we, therefore, affirm that aspect of the judgment.

In its cross-appeal, DEP alleges two grounds for error in the trial court's decision. First, it is claimed that joint and several liability should have been assessed against CPS and Madison. Second, the liability of the defendants for the cost of abating their pollution should not have been limited to a specific figure.

The trial court's division of costs between defendants reflects the court's apparent concern with the fact that the contamination by Madison and CPS were distinct, one being of heavy metals and the other of organic compounds. Under common law tort principles, damages for harm are to be apportioned among two or more causes where there are distinct harms, or there is a reasonable basis for determining the contribution of each cause to a single harm. Hill v. Macomber, 103 N.J. Super. 127 (App. Div. 1968); PROSSER, LAW OF TORTS (4 ed. 1971), § 52 at 313.

As a practical matter, however, we find that the harm caused in the present case is indivisible in that the pond would have been contaminated as a water source from either of defendant's actions and the pond cannot be decontaminated unless both defendants fulfill their obligations to reimburse DEP for the costs of the remedial measures ordered by the court. Without an assessment of joint and several liability, either defendant's failure to meet the financial obligation imposed by the judgment would leave DEP in a position where it has insufficient funds from defendants to abate the contamination. The efficacy of the remedial measures ordered by the court, such as the construction of a slurry wall and rerouting of the brook, depends on completion.

Under both common law principles and relevant statutory law, the public need not bear such a burden as against a responsible party. See Landers v. East Texas Salt Water Disposal Co., 248 S.W.2d 731 (Tex. 1952); Environmental Protect. Dep't. v. Ventron Corp., 182 N.J. Super. 210 (App. Div. 1981), certif. granted N.J. (1982). Moreover, the Spill Compensation and Control Act, N.J.S.A. 58:10-23.11g(c), requires that any person who has discharged a hazardous substance shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs. Accordingly, we impose joint and several liability for payment of all costs of DEP for all remedies ordered by the court which are to be implemented by DEP.The proportionate allocation approach used by the court to assess the costs of the remedies between defendants was both reasonable and equitable and should be followed amongst the defendants.

DEP's second contention that the court improperly limited defendants' liability to 5.2 million dollars to remedy the contamination is most persuasive. That sum may prove to be grossly inadequate to implement the ordered remedies. Under both the Spill Compensation and Control Act, N.J.S.A. 58:10-23.11g(c), and the Water Pollution Control Act, N.J.S.A. 58:10A-10c(3), the court is empowered to order that all costs to abate water pollution be paid by those adjudged liable for violating the law. These are specially created statutory remedies and are not, therefore, subject to common law requirements that plaintiff be limited to those specific present and prospective damages which he can prove at the time of trial. Rather, the intent of the statute is to charge those found to be responsible for pollution with the actual costs of cleanup. The implementation of this statute necessarily requires that unforeseen expenses and contingencies be considered. An accurate assessment of the prospective cost of the cleanup program is not possible considering the unknowns to be encountered in the course of employing the untried, innovative technology required in toxic waste removal plans. In the present case, the exact placement depth of the slurry cutoff wall has not yet been determined pending final investigation of the exact depth of the South Amboy fire clay layer at relevant points underlying the aquifer. Nor is it certain whether a treatment plant for metal contaminants will have to be built. These and other final decisions concerning exact methods and specifications await further study and could significantly impact upon the court's cost estimates.

In light of these uncertainties, it is quite possible that the 5.2 million dollars ordered by the court will not accurately reflect the eventual costs of implementation.Therefore, defendants are hereby obligated to pay all cleanup and removal costs actually incurred by DEP in implementing the remedies ordered by the court and are not limited to the amounts expressly imposed by the trial court's order and judgment.

Our reliance on statutory authority to require defendants to pay the costs of certain remedies does not negate our concern for fairness to defendants. The reasonableness of the costs imposed [13 ELR 20556] upon defendants, however, is adequately safeguarded by the provision of the trial court's judgment which provides that implementation of the remedial measures ordered "shall be accomplished in accordance with specifications to be developed by the Department [DEP] or by a contractor selected by the Department in accordance with any applicable State bidding laws. The specifications shall be submitted to the defendants and Perth Amboy before becoming final and shall be subject to approval by the Court." This provision allows the parties to have continued access to the Chancery Division to settle the reasonableness and necessity of any of the specifications or costs to be incurred. It should be remembered that lengthy delays will probably increase the ultimate costs and might also compel the court toconsider some form of security to insure payment by defendants.

Finally, defendants contend that the trial court erroneously required them to pay the fees of the court appointed expert. This contention is unpersuasive. In a complex case such as this one, it was quite appropriate for the court to have the benefit of a neurtral expert. The power of the court to appoint experts to assist the court and to assess the costs against any of the parties lies within the discretion of the Chancery Division. Azalone v. Azalone Brothers, Inc., 185 N.J. Super. 481, 489 (App. Div. 1982); see 12 A.L.R. 375 (1957), "Judicial Authority to Call Expert Witnesses." Here, the exercise of that power does not represent an abuse of discretion. The amount and reasonableness of the fees awarded Eames & Moore and whether they are entitled to prejudgment interest and counsel fees to collect their expert fees must still be resolved in the appeal and cross appeal filed under Docket No. A-3550-82T3. Since that appeal was only filed on April 5, 1983, it is not ready for disposition.

In summary, we affirm the provisions of the remedial plan, the damage award to Perth Amboy, and the requirement that defendants pay the court appointed expert's fees. We modify the judgment to impose joint and several liability against both defendants for the actual costs of cleanup and removal of the organic and metal contamination for which they have been found liable. This matter is remanded to the Chancery Division to implement its judgment as modified by this opinion. We do not retain jurisdiction.