New Jersey Supreme Court: The Spill Act Requires Proof of a Nexus Between a Discharger and the Contamination Being Cleaned Up

On September 26, 2012, the New Jersey Supreme Court issued its decision in New Jersey Dep’t of Envtl. Prot. v. Ofra Dimant.  In this case, the Supreme Court was called upon to address the proofs needed to tie a discharger to a contaminated site in order to find that discharger liable for the contamination under the New Jersey Spill Compensation and Control Act.  The Court held that the state was required to offer evidence demonstrating how the discharged contaminants reached the contaminated site.

The New Jersey Department of Environmental Protection had looked to hold certain parties liable for groundwater contamination in an area of Bound Brook, New Jersey.  That contamination, which consisted of chlorinated solvents, was discovered in 1988.  The Court examined whether defendant Sue’s Clothes Hanger was liable under the Spill Act and would therefore be required to reimburse the State for its cleanup and investigation costs related to the groundwater contamination.  Specifically, the case examined whether Sue’s was liable based upon their use and discharge of dry cleaning solvents for a fifteen month period beginning in December 1987.

The evidence in the case showed that in December 1988, the NJDEP and a health officer  inspected Sue’s to determine whether it might be a source of the Bound Brook groundwater contamination.  The inspectors observed an exterior pipe slowly dripping a liquid from five feet above an exterior paved driveway.  The liquid hit the pavement and then flowed away from the building.  The inspectors took a sample of that liquid from the pipe, which was found to contain dry cleaning solvents at 3,000 times greater than the applicable maximum contaminant level.  No samples were taken in soil beneath the pavement where the liquid had dripped, and no evidence was presented to show whether the dripping liquid had contaminated the groundwater.

The NJDEP argued “that it is sufficient to show a nexus between the substance discharged and its appearance in the environment to warrant relief under the Spill Act.”  In other words, the NJDEP position was that it’s observation of chlorinated solvents coming from Sue’s in the vicinity of the chlorinated solvent groundwater contamination was sufficient to satisfy the Spill Act’s “causation” requirement, and that the NJDEP was not required to offer evidence actually linking the pipe drip to the groundwater contamination. 

The State Supreme Court rejected that approach, and held that “a party in Sue’s circumstances must be shown to have committed a discharge that was connected to the specifically charged environmental damage of natural resources – groundwater damage – in some real, not hypothetical, way.  A reasonable nexus or connection must be demonstrated by a preponderance of the evidence.” 

The Court further stated that upon proof of a discharge of a hazardous substance, injunctive relief to stop that discharge is immediately available.  But “in an action to obtain damages, authorized costs and other similar relief under the [Spill] Act there must be shown a reasonable link between the discharge, the putative discharger, and the contamination at the specifically damaged site.”  In this case, the NJDEP had offered no evidence showing how the solvents leaking from Sue’s pipe actually migrated to the groundwater and contributed to its contamination.  Absence that evidence, Sue’s could not be held liable under the Spill Act.

Interestingly, the Court inferred that the State could have, at the time the drip was discovered, required Sue’s to investigate whether the confirmed dripping of the dry cleaning solvents had contaminated soil and groundwater beneath the drip.  But the Court stated that it would be “fundamentally unfair” to allow the NJDEP to require Sue’s to do so ten years later when this case made it to the courts.

The lesson to the regulated community from the Dimant case is that when confronted with possible liability under the Spill Act, the parties need to carefully evaluate whether the evidence presented demonstrates the required nexus between a discharge and the contamination.