New Jersey Supreme Court Delineates the Nature of the Connection that a Plaintiff Must Establish to Impose Liability under the New Jersey Spill Compensation and Control Act

In New Jersey Department of Environmental Protection v. Dimant, the New Jersey Supreme Court delineated, for the first time, the nature of the connection that a plaintiff must establish to impose liability under the New Jersey Spill Compensation and Control Act (Spill Act).

In 1988, residential well sampling indicated that the groundwater in Bound Brook, New Jersey, was contaminated with tetrachloroethylene (PCE). After an investigation, the New Jersey Department of Environmental Protection (NJDEP) identified several potential sources of the contamination, including a laundry and dry cleaning operation in a strip mall then known as Sue’s Clothes Hanger (Sue’s). Although historical dry cleaning operations occurred on the premises and at a neighboring dry cleaner dating back to the 1950s, Sue’s was identified as a potential source based solely upon a December 1988 sample of fluid dripping from a pipe protruding from Sue’s to the pavement below. NJDEP never re-tested the pipe, and there was no evidence that the pipe continued to drip, or how frequently it dripped, or where the fluid went after it left the pipe.

In 2000, an NJDEP staff geologist concluded that Sue’s and the neighboring dry cleaner were the sources of the PCE contamination at the affected wells. Although the geologist concluded that operations at the premises now occupied by Sue’s contributed to the contamination, she did not specifically determine that Sue’s dry cleaning operations, as opposed to historic operations, caused the contamination.

The trial court concluded that NJDEP failed to prove, by a preponderance of the evidence, that Sue’s (as opposed to other site operations) discharged PCE that contaminated the groundwater. The Appellate Division affirmed, holding that liability under the Spill Act requires proof of a nexus between a discharge and contamination. In doing so, the Appellate Division concluded that Sue’s release of PCE through the dripping pipe, without resulting damage, was not a “discharge” under the Spill Act.

The Supreme Court rejected the Appellate Division’s analysis, finding that under the plain language of the statute, Sue’s release of PCE, no matter how small, constituted a “discharge” under the Spill Act. The determinative question, however, according to the Supreme Court, was not whether there was a discharge, but rather whether NJDEP connected the discharge to the contamination and relief sought from Sue’s. Specifically, the Court stated as follows:

Thus, through the requirement of a connection between the discharge, over which the party had some control or responsibility, and the Spill Act response to the damage, the focus in the Spill Act remains on proof of a connection between the discharge complained of and the resultant Spill Act response. The task remains to clarify the proof necessary to establish that connection.

In addressing the proofs needed to establish that connection, the Court rejected application of a common law proximate-cause analysis in favor of a standard that accommodates and supports the multiple forms of relief available under the Spill Act. Applying this rationale, the Court concluded that while the mere existence of a discharge is enough to support injunctive relief under the Spill Act, a reasonable nexus or connection between the discharge and some environmental damage must be proved, by a preponderance of the evidence, before a plaintiff may recover response costs under the Spill Act:

In this matter, 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 – the groundwater damage – in some real, not hypothetical, way. A reasonable nexus or connection must be demonstrated by a preponderance of the evidence. As the Third Circuit noted, in a case that the Appellate Division cited favorably,…while a plaintiff need not “trace the cause of the response costs” to each defendant in a multidefendant case involving a contaminated site, it is not enough for a plaintiff to simply prove that a defendant produced a hazardous substance and that the substance was found at the contaminated site and “ask the trier of fact to supply the link.”…In sum, we hold that on proof of the existence of a discharge, one can obtain prompt injunctive relief under the Spill Act. However, in an action to obtain damages, authorized costs and other similar relief under the Act, there must be shown a reasonable link between the discharge, the putative discharger and the contamination at the specifically damaged site.

Applying this newly promulgated standard, the Supreme Court affirmed.

While the standard newly elucidated by Dimant is of some assistance to potentially responsible parties under the Spill Act, it is not a panacea for Spill Act liability. Dimant does not require common law proximate cause, but rather, it requires a Spill Act plaintiff only to offer some proof of a connection between a release and contamination. That burden does not appear to be a great one. Absent proof of such a connection, however, Dimant liability under the Spill Act will not accrue.