In a win for business owners hit with environmental cleanup costs, New Jersey’s Supreme Court held Wednesday that regulators can’t recover money without proof of a nexus between the pollution and the allegedly responsible entity.
The ruling, in Department of Environmental Protection v. Dimant, A-2-11, upheld two lower courts that found insufficient evidence a Bound Brook laundromat and dry cleaning establishment caused the groundwater pollution for which it was dunned for investigative and cleanup costs.
The unanimous court said that although the DEP need only show a discharge to obtain injunctive relief under the Spill Compensation and Control Act, “in order 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.”
The case goes back to 1988, when water wells in Bound Brook were found to be contaminated with perchloroethylene or tetrachloethylene — commonly known as PCE or PERC — used by dry cleaners and at auto shops and machine shops. In the immediate area of the contamination were three businesses dealing with clothes — Sue’s Clothes Hanger, Zaccardi’s Cleaners and Michael James Cleaners — along with a Mobil gas station and an automobile dealership.
In 2004, the DEP filed compensation claims against several parties, including Zaccardi’s and Sue’s, alleging they were the sources of the contamination, even though Sue’s used a closed-system and there was no evidence of any substantial leakage. Investigators, during one inspection in 1988, found one pipe at Sue’s with a slight leak of PCE that trailed into the cleaner’s parking lot. The leak at Sue’s was found to contain 195,000 parts per billion; the state’s acceptable standard is one part per billion. The owners of Sue’s at the time of the inspection, Bharat and Priti Shah, were named as third-party defendants.
Michael James Cleaners was not sued, since it did not use PCE.
Zaccardi’s settled with the DEP, and the claims against Sue’s Cleaners and the Shahs went to trial. Superior Court Judge William D’Annunzio dismissed the demands for compensation. The Appellate Division affirmed.
The court rejected Sue’s argument that the discharge was de minimis.
Affirming, the Supreme Court rejected the DEP’s contention that because there was a leak found at Sue’s, the business should be responsible at least for the costs of investigating whether it was the cause of the well water contamination and, ultimately, the cost of cleaning the groundwater.
“The legislative history of the Spill Act, and case law interpreting the Act, establishes that the discharge of hazardous waste by an operator must be tied to the discharge by that operator and not another,” Justice Jaynee LaVecchia said.
“Once a party is found responsible for a discharge, there is another requirement to be satisfied,” she said. “A nexus also must be demonstrated to exist between the discharge for which one is responsible — in any way — and the contaminated site for which cleanup and other related costs are incurred.
“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.”
The DEP “never presented sufficient proof of a reasonable, tenable basis for how the drip of fluid containing PCE observed at Sue’s one day in 1988 resulted in the contamination of groundwater in Bound Brook,” she added.
Sue’s attorney, George Hardin of Springfield’s Hardin, Kundla, McKeon & Poletto, says he agrees with the court’s analysis.
Hilary Semel, executive director of the amicus Eastern Environmental Law Center, says “we are concerned that the discharger was not found liable for even the costs of an investigation, much less for damages at all.”
The Shahs’ lawyer, Jacob Grouser, of New Brunswick’s Hoagland, Longo, Moran, Dunst & Doukas, was away from his office and unavailable for comment.
Lee Moore, a spokesman for the Division of Law, which represented the DEP, says only that the ruling is under review.