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State DEP Went too Far, Asking Industrial Site for a Clean Bill of Health

Tom Johnson | July 9, 2012

Appeals Court decision highlights the tangled state of environmental laws in NJ.

The state overstepped its authority in ordering an industrial outfit to certify that its property was not contaminated before it could be closed or sold, according to a New Jersey appeals court ruling.

In a 36-page decision, the three-judge panel ruled that the requirement adopted by the New Jersey Department of Environmental Protection is inconsistent with laws approved by the Legislature aimed at streamlining the regulatory process and minimizing “government involvement in certain business transactions.’’

The case revolved around a Livingston manufacturer that handled small quantities of hazardous waste. The company sought an exemption from a contentious cleanup law requiring it to clean up any toxins on its property before shutting down or being sold.

The decision also underscored the changing nature of the state’s tough environmental laws, once regarded as among the strictest in the nation. The original law, enacted in 1983, was put in place after dioxin was discovered at a former manufacturer of Agent Orange in Newark. The contamination, which also found its way into the Passaic River, still has not been cleaned up.

Called the Environmental Cleanup Responsibility Act, the measure generated enormous opposition from the banking and real estate industry because it held up many conveyances of industrial properties. Eventually, lawmakers amended the law with the aim of streamlining the process a decade later.

In 2009, the state again amended cleanup statues, privatizing most projects cleaning up hazardous waste from contaminated sites, a step bitterly opposed by the environmental community, but strongly backed by business interests.

The appellate court ruling draws heavily on that history in reversing a decision by the DEP to not grant an exemption from the cleanup requirements to Des Champs Laboratories, Inc. From 1982 to 1996, the company operated a light assembly facility on Okner Parkway. When the company sought to sell the facility, it obtained a “no further action’’ letter from the agency, a document that asserted there had been no discharge of hazardous substances from the facility.

But eight years later, the DEP investigated a problem involving groundwater contamination in Livingston, later determining that the source of the problem originated in the middle of the former Des Champs’ property. Upon that determination, the agency sought to rescind the “no further action’’ letter.

In response, the company’s attorney requested a “de minimis’’ quantity exemption (known as a DQE), arguing that the facility handled a negligible amount of hazardous substances and thus should not to be subject to the law. When the DEP denied its request, the company appealed.

In reviewing the history of the various cleanup laws, the court ruled that the DEP, despite its important regulatory role, acted in the present context beyond its legislatively delegated powers.

According to the court, “It did so by injecting into the DQE process a requirement that governing statues do not authorize, i.e., forcing an applicant that has only handled de minimis quantities of hazardous materials to provide a certification that the property is free of contamination before its operations can be closed or title to its property transferred.’’

The court also argued in its ruling that the recent changes in cleanup laws “have not eviscerated our state’s additional legislative goals of remediating contaminated sites and protecting the public health, safety and welfare.’’ It noted those objectives remain enforceable through other environmental statues, including the New Jersey Spill Act, which requires cleanup of hazardous discharges.

It also invited the Legislature to act to clear up any ambiguity over the exemption issue.

“In particular, nothing in this opinion precludes the passage of amended legislation that would explicitly and unambiguously require a DQE applicant to certify that its property is now ‘clean’ before a closure or sale, or at the very least, make clear that the department is authorized to adopt and enforce regulations imposing such significant obligations.’’

Jeff Tittel, director of the New Jersey Sierra Club, called the opinion “very troubling, but expected.’’ He argued that past legislative actions make it easier to develop contaminated sites, but not to clean them up, resulted in the court siding with the company.

“Bad laws make for bad court decisions, putting the public health at risk,’’ he said.

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