New Jersey Loses Hundreds of Millions in Natural Resources Damages

TRENTON, New Jersey, October 1, 2007 (ENS) - New Jersey may not be able to get compensation for damage to the state's natural resources by polluters in thousands of contaminated groundwater cases, according to an analysis of a recent court ruling by Public Employees for Environmental Responsibility, PEER, a national alliance of state and federal agency resource professionals.

This ruling affects as many as 4,600 sites prioritized by the New Jersey Department of Environmental Protection, DEP.

The problem stems from the state's failure to adopt regulations governing how to calculate "natural resources damages" for polluted drinking water.

As a result, polluters can avoid compensating the public for treatment of contaminated groundwater, replacement water supply lines, drilling new wells and associated damages - leaving taxpayers to cover these costs.

On August 24, 2007, a state Superior Court dismissed an attempt by the DEP to recover a natural resource damage claim against Exxon Mobil involving benzene and toluene contamination of private wells in the Hillwood Lakes area of Ewing Township.

The court found that the DEP did not follow the rulemaking process to establish, by regulation, a reliable formula for calculating natural resources damages. Without regulations, the court ruled that the state agency lacked adequate scientific support to proceed on a case-by-case basis.

The problem may not be resolvable because the administration of Governor Jon Corzine allowed the statute of limitations on these cases to expire on June 30, 2007, after it had been twice extended under previous administrations.

"This regulatory train wreck was completely preventable," said New Jersey PEER Director Bill Wolfe, a former DEP analyst, pointing to repeated acknowledgements by state officials of the need to act:

• In 2002 "Vulnerability Assessments," DEP estimated that as many as 4,600 cases may require "natural resources damages litigation which would necessitate both rule making and extending the statute of limitations.

This data prompted former DEP Commissioner Bradley Campbell to say he was "astounded to find on taking office in [2002] that the [DEP] had not pursued, or left unsettled, thousands of cases against polluters responsible for a wide range of damages to New Jersey's natural resources." Campbell pledged to put the program "back on track."


• In a 2004 settlement agreement of the case New Jersey Society of Environmental & Economic Development v. Campbell, the DEP legally committed to propose formal natural resource damage regulations


• At a May 24, 2005 seminar at Rutgers' Cook College, John Sacco, chief of DEP's Office of Natural Resource Restoration pledged that natural resource damage regulations will "hopefully" be proposed in fall 2005. But since then, there has been no apparent activity to move rules forward, Wolfe said.

Not only are all these lawsuits now in jeopardy, but so are all future such litigation and ongoing natural resources damages settlement negotiations in an unknown number of groundwater pollution cases.

"The corporations who had the most at stake stalled the NRD program during the Whitman administration but failed to kill it outright," Wolfe said. "Now, through inaction, the Corzine administration has provided polluters precisely the relief they sought."

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