New Jersey's Appellate Division Holds State May Be Liable For Cleanup Costs Under New Jersey's Spill Act

Action Item: On August 26, 2015, in a case of first impression, the Appellate Division of the New Jersey Superior Court in NL Indus., Inc. v. State of New Jersey, No. A0869-14T3, 2015 N.J. Super. LEXIS 161 (N.J. Super. Ct. App. Div. Aug. 26, 2015), held that the State of New Jersey is subject to strict liability for the discharge of hazardous substances under New Jersey's Spill Compensation and Control Act, N.J.S.A. 58:10-23.11, and is not immunized from liability based on the New Jersey Tort Claims Act, N.J.S.A. 59:1-1 - 12-3 or any other principles of sovereign immunity. This ruling clarifies that a responsible party at a cleanup site may obtain contribution for cleanup and removal costs under the Spill Act from both private and public entities, including the State of New Jersey. The Appellate Division's decision was approved for publication on September 23, 2015. Responsible parties cleaning up contaminated sites in New Jersey now have an additional party to target for contribution to further reduce their liability for cleanup and removal costs: the State of New Jersey itself. Faced with an issue of first impression, the Appellate Division of the Superior Court of New Jersey in NL Indus., Inc. v. State of New Jersey, No. A0869-14T3, 2015 N.J. Super. LEXIS 161 (N.J. Super. Ct. App. Div. Aug. 26, 2015) (approved for publication on September 23, 2015), held that the State of New Jersey is subject to the strict liability provisions of New Jersey's Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 (“Spill Act”), and cannot evade such liability based on the immunities enumerated in New Jersey's Tort Claims Act, N.J.S.A. 59:1-1 - 12-3 (“TCA”) or any doctrine of sovereign immunity. This ruling is significant because it will allow responsible parties at cleanup sites to sue not only private, corporate entities for contribution to recover cleanup costs under the Spill Act, but also the state if the state “is in any way responsible” for the discharge of a hazardous substance. The state need not be an active participant in a discharge to be held liable for cleanup costs under the Spill Act; the state may be liable, for example, if it exercised a degree of control over the actual discharger. In that regard, the ruling in NL Industries also reaffirms that the Spill Act imposes broad liability for discharges of hazardous substances.

Facts

In NL Industries, the State of New Jersey, Old Bridge Township, and the United States Army Corps of Engineers entered into an agreement in the 1950s relating to the construction and maintenance of a beachfill protective structure, a levee, and other measures to address shoreline and beach erosion in the Laurence Harbor area of Old Bridge Township. The project, known as the Shore Protection...