Site Remediation Reform Act: How Does the Act Impact NJDEP’s Natural Resource Damage Program?

October 20th, 2009 | Posted by: Christopher DeGrezia 0| comments:

Site Remediation Reform Act - Natural Resource DamageThere are two significant provisions in the Site Remediation Reform Act (SRRA) that will impact how NJDEP pursues its claims for Natural Resource Damages (NRD). The first is a fairly obvious change to existing law (the Statute of Limitations) setting deadlines for the state to bring a claim for NRD.  The second, and more significant provision, stems from a subtle reference nestled amid NJDEP’s newly defined powers of direct remedial oversight.  Click here to read more about direct NJDEP oversight.  Although NJDEP promises that its direct oversight of remediation will be the exception rather than the rule, the power of direct oversight will likely play a larger role in promoting NRD settlements than is currently the case.

A New Statute of Limitations.  Prior to SRRA, NJDEP was required to sue a liable party for NRD within five and a half years of the date its claim first accrued. A claim accrued on the later of January 2, 2002, or completion of remedial investigation (RI) at the site.  For cases where the RI was complete before January 1, 2002, NJDEP had to settle with or sue potentially liable parties by July 1, 2007 – and in many cases it did.  For cases where RI’s were completed after January 1, 2002, time was running out.  And, as more RI’s would be completed going forward, NJDEP would be faced with a growing number of NRD claims that it would have to pursue or lose that right.  The fix – more time.

With the enactment of SRRA, NJDEP has five and a half years from the date that Remedial Action is compete for the entire site to assert a claim for NRD. Although the SRRA amendment does not (as did prior amendments) extend a limitations period that had expired prior to May 7, 2009, that proviso helps only a small class of cases – those where the RI was completed between January 2, 2002, and November 7, 2003.  In every other case, even those where the statute of limitations was set to expire on May 8, 2009, NJDEP now has a lot more time to bring suit.  Extending the NRD deadline clearly has negative impacts.  The passage of yet more time before NJDEP must bring suit will be a challenge to the preservation of evidence, the availability of witnesses and the ability of witnesses to recall events.  Likewise, NJDEP will have more time to strengthen its NRD program.

Direct NJDEP Oversight and the NRD Program.  Under the direct oversight provisions of SRRA, NJDEP is given discretion to assume direct oversight of remediation at any site where “the Department determines that more than one environmentally sensitive natural resource has been injured by contamination from the site.” Given that NJDEP considers all groundwater in the state to be a natural resource, as well as the broad scope of the definition of natural resources generally,8 there are many sites that potentially will fall within this direct oversight provision.  This new direct oversight provision regarding natural resources provides NJDEP with leverage to force an NRD settlement.  In fact, NJDEP has said that it intends to use that leverage.  Simply put, once an RI is completed by an LSRP and submitted to NJDEP (no doubt under cover of a form specifying whether two or more natural resources at the site have been impacted), NJDEP has the tools it needs to evaluate whether it has any NRD claim. If so, NJDEP can then use the threat of assuming direct oversight to secure an NRD settlement – if you settle with NJDEP and resolve the NRD claim, you eliminate the incentive (and perhaps the basis) for NJDEP to exercise direct oversight. Refuse and NJDEP may assume direct oversight of your case. While NJDEP is likely only to do so where the resources in question are of significant interest, experience shows that NJDEP’s view of the value of an NRD claim can be more expansive than some might think reasonable.

It is significant that NJDEP intended specifically to benefit the NRD program in creating the “sensitive natural resources” category of direct oversight.  It is even more significant that NJDEP acknowledges that it intends to leverage this provision to encourage NRD settlements. Exactly how NJDEP will wield its power of direct oversight in the NRD arena remains to be seen.  As you move forward with remedial activity at your site, however, this is a potential pitfall and perhaps opportunity that should be kept clearly in view.

If you need assistance or have any specific questions, feel free to contact: 

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