In re the Directive of the New Jersey Department of Environmental Protection
In re the Directive of the New Jersey Department of Environmental Protection
Opinion of the Court
The opinion of the Court was delivered by
In 1984, the Department of Environmental Protection (DEP) investigated the source of a serious groundwater contamination in the Township of West Milford. The contamination was traced to an Amoco gasoline station leased by Kimber Petroleum Corporation and a Chevron gasoline station owned by Solar Oil Sussex at the time of the contamination. The groundwater contamination required residents of the Greenbrook Estates neighborhood to be connected to an outside water supply. Acting pursuant to the New Jersey Spill Compensation and Control Act, DEP directed Kimber Petroleum and Solar Oil to pay $2.16 million to fund the construction of an alternate water supply, failing which each would be subjected to treble damages. Kimber Petroleum and Solar Oil resisted payment of these costs, appealed to the Appellate Division, and moved for a stay of DEP’s order exacting costs and imposing treble damages upon a refusal to pay. On July 31, 1986, the Appellate Division denied the motion for a stay pending appeal. On October 20, 1986, the Court certified the appeal pursuant to Rule 2:12-2 and ordered appellants to pay or to post security for the claimed costs of the removal but enjoined the imposition of treble damages.
I.
Kimber Petroleum and Solar Oil challenge the constitutionality of the New Jersey Spill Compensation and Control Act (the Spill Act), N.J.S.A. 58:10-23.11 to -23.11z. In particular, they assert that the Spill Act’s treble damages provision violates the
The treble damages section of the Spill Act is as follows: Whenever any hazardous substance is discharged, the [Department of Environmental Protection] may, in its discretion act to remove or arrange for the removal of such discharge or may direct the discharger to remove, or arrange for the removal of, such discharge____ Any discharger who fails to comply with such a directive shall be liable to the department in an amount equal to three times the cost of such removal ... [N.J.S.A. 58:10-23.11f(a).]
The following section deals with the polluter’s liability:
Any person who has discharged a hazardous substance or is in any way responsible for any hazardous substance which the department has removed or is removing ... shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs.
An act or omission caused solely by war, sabotage, or God, or a combination thereof, shall be the only defenses which may be raised by any owner or operator of a major facility or vessel responsible for a discharge in any action arising under the provisions of this act. [N.J.S.A. 58:10-2S.llg(c), (d).]
Thus under these provisions a “discharger” is one who has “discharged a hazardous substance or is in any way responsible” for such a discharge. Id. The liability of a discharger is absolute—it is strict, “without regard to fault”, and joint and several; only limited defenses not associated with fault—i.e., relating to war, sabotage or divine factors—are available. Id. See State, Dep’t of Envtl. Protection v. Ventron Corp., 94 N.J. 473, 501-03 (1983) (liability under the Spill Act extends to parent corporation of wholly owned subsidiary that violated the Spill Act).
II.
At the outset we point out that DEP, in issuing the directives in this case, has not been acting within the language of the Spill Act as strictly interpreted. The Act directly authorizes DEP to take one of two alternative actions when it discovers illegally-dumped hazardous waste: 1) it can act to remove the waste (and then bring a cost-recovery action against the responsible parties, N.J.S.A. 58:10-23.11q), or 2) it can direct a responsible party to remove the waste. N.J.S.A. 58:10— 23.11g(c), (d). In this case, DEP has done neither. DEP’s
DEP’s practice of requiring payment by responsible parties while maintaining control itself over remedial actions is not directly authorized by the Spill Act.
III.
The United States Supreme Court has upheld the validity under the federal constitution of multiple damages provisions. Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 584, 62 S.Ct. 1216, 1223, 86 L.Ed. 1682, 1691 (1942); Missouri Pac. Ry. Co. v. Tucker, 230 U.S. 340, 348-49, 33 S.Ct. 961, 962-63, 57 L.Ed. 1507, 1510 (1913); Missouri Pac. Ry. Co. v. Humes, 115 U.S. 512, 523, 6 S.Ct. 110, 114, 29 L.Ed. 463, 466 (1885). The Supreme Court regularly applies antitrust legislation, which, like the Spill Act, combines treble damages with joint and several liability. See, e.g., Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981); Cantor v. Detroit Edison Co., 428 U.S. 579, 96 S.Ct. 3110, 49 L.Ed.2d 1141 (1976). The Sherman Antitrust Act has been interpreted in a way that those subjected to onerous joint and several liability provisions have no right of contribution. Texas Indus., supra.
The plaintiffs do not, however, claim that the Spill Act’s treble damages provision, as such, is invalid.
In Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908), the Supreme Court invalidated state rate-making legislation because the legislation permitted railroads to obtain judi
The federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §§ 9601 to 9657, has a provision similar to, but not identical with, the Spill Act’s treble damages provision. 42 U.S.C. § 9607(e)(3) states:
If any person who is liable for a release or threat of release of a hazardous substance fails without sufficient cause to properly provide removal or remedial action upon order of the President pursuant to section 104 or 106 of this Act, such person may be liable to the United States for punitive damages in an amount at least equal to, and not more than three times, the amount of any costs incurred by the Fund as a result of such failure to take proper action.
The main difference between the language in the Spill Act and that of CERCLA is the former’s mandatory tone. Compare N.J.S.A. 58:10-23.11f(a) (“Any discharger who fails to comply ... shall be liable ... in an amount equal to three times the cost of such removal.”) (emphasis added) with 42 U.S.C. § 9607(c)(3) (“If any person ... fails without sufficient cause”, etc.) (emphasis added).
CERCLA’s treble damages provision, has been challenged on the same ground as the Spill Act’s treble damages provision is today challenged, as an allegedly unconstitutional infringement
The State purports to sidestep these constitutional claims by arguing that the directives that apparently impose potential liability for treble damages are actually merely notice of obligations under the Spill Act. It characterizes the treble damages provision as a mandatory, not a conditional, multiple damages provision. It argues that the directives do not possess independent legal force, i.e., they do not as such prescribe liability for treble damages, but serve only to provide notice to potentially responsible parties of their obligations under the Spill Act. The directive, according to the State, simply gives the polluter the opportunity to clean up any dump sites for which it is responsible, thus serving only as a notice and as a basis for a defense to the imposition of treble damages liability: if the notice is not sent, liability cannot be imposed. The State contends that since the Legislature has the power to impose unconditional mandatory treble liability, it surely has the power to impose contingent treble damages, which benefits the alleged discharger—the ability to avoid “mandatory” multiple damages
The State’s characterization of the treble damages provision avoids reality. N.J.S.A. 58:10-23.11f(a) states that the only choice a company has when faced with a DEP directive is compliance or treble damages. Unlike most other laws with multiple damage provisions, the Spill Act’s treble damages provision does not merely notify persons of potential liability and inform those persons how they may stay clear of illegal behavior. These provisions are indisputably coercive; they have the purpose and the effect of compelling persons to pay money to the State, even if those persons have a valid claim that they are not justly or legally responsible for the payment.
No exception is made for those who refuse compliance in order first to determine the directive’s validity. However, the DEP argued that even though a charged party cannot avoid compliance with the required payment of costs, there are means available for bringing a challenge to the validity of a DEP directive without risking further penalties. The alleged violator can pay the costs assessed in the directive and then seek reimbursement from the Spill Fund. Such hearings would be before boards of arbitration with appeals to the Appellate Division.
Boards of arbitration shall be convened by the administrator when persons alleged to have caused the discharge, the administrator or other persons contest the validity or amount of damage claims or cleanup and removal costs present ed to the fund for payment. If the source of discharge is not known, any person may contest such claims presented for payment to the fund.
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One board of arbitration may be convened to hear and determine all claims arising from or related to a common discharge.
The boards shall have the power to order testimony under oath and may subpoena attendance and testimony of witnesses and the production of such documentary materials pertinent to the issues presented to the board for determination. Each person appearing before the board shall have the right to counsel.
*79 Determinations made by the board shall be final. Any action for judicial review shall be filed in the Appellate Division of the Superior Court within 30 days of the filing of the decision by the administrator. [N.J.S.A. 58:10-23.-lln(a), (c), (d), (g).]
The Supreme Court has held that it is sufficient for the due process guarantee of the federal constitution that there be some forum where an order’s validity can be challenged without penalty; it need not be the same forum where enforcement actions are prosecuted and the challenge need not be pre-payment. Yakus v. United States, 321 U.S. 414, 64 S.Ct. 660, 88 L.Ed. 834 (1944). Under this analysis, the pre-adjudication payment of actual costs under the statute with the opportunity later to contest the legality or reasonableness of such costs without further penalty
Nevertheless, under the circumstances, there remain doubts as to the Act’s validity under the federal constitution because of the way in which it combines the lack of a pre-enforcement hearing with strict liability and added penalty for noncompliance.
The United States Supreme Court has never before ruled on the constitutionality of a statutory enforcement scheme that combined, as the Spill Act does, joint and several liability, nearly absolute liability, the virtual elimination of substantive defenses, mandatory treble damages, and no pre-enforcement hearing. In Woodland Private Study Group v. State of N.J., 616 F.Supp. 794 (D.N.J. 1985), the validity of such a scheme, in the context of the Spill Act, was examined by a federal district
Due process standards arguably call for a right to challenge the validity of a legislative or administrative order without facing the possibility that one will incur a greater penalty if such challenge is unsuccessful than the loss resulting from such an order if left unchallenged. See United States v. Pacific Coast European Conference, 451 F.2d 712, 717 (9th Cir. 1971) (under due process a “constitutional tolling principle” prevents one from being forced to pay a statutory penalty for noncompliance with an act during the time it is being tested in good faith); cf. Brown & Williamson Tobacco Corp. v. Engman, 527 F.2d 1115, 1119 (2nd Cir. 1975) (“one has a due process right to contest the validity of a legislative or administrative order ... without necessarily having to face ruinous penalties if the suit is lost.”). While none of the individual components of the Spill Act enforcement framework violates due process requirements the combined weight of the joint and several strict liability scheme with the lack of a pre-enforcement hearing opportunity and the imposition of punishment in the form of treble damages upon failure to comply—even if
The parties have questioned the Spill Act’s validity under the New Jersey Constitution and the state doctrine of fundamental fairness.
The Spill Act, as the State would have it interpreted and applied, could have a draconian impact on affected parties. A small company with arguably little or no actual responsibility for the discharge of a hazardous substance might be forced to pay a large amount of money, with no effective pre-payment judicial recourse, no means to challenge the DEP’s estimate of the monetary amount needed, and a potentially long delay before it gets its refund from the Spill Fund or the contribution due from the other liable dischargers. The result in fact could be confiscatory. This kind of problem—undue harshness in the individual application of the Act’s enforcement provisions—can be rectified by recognition of the availability of a good-cause exception. The availability of such an exception would allow a genuinely aggrieved party with legitimate defenses to urge these in order to avoid the imposition of heavy penalties. Provisions for such an exception could be achieved through the minimal modification of the literal terms of the Act by implying an exception similar to that found in CERCLA. See supra at 76. Without an implied good cause, or reasonable cause exception, the statute may infringe the state or federal constitutions.
The question thus presented is whether the implication of such a good cause exception can be reconciled with the intent
We are satisfied that so interpreted, the Act will not be significantly weakened and that responsible polluters will remain fully amenable to the necessarily strict enforcement machinery of the Act. The Spill Act serves the important interests of preventing and eliminating contamination from toxic waste dumps.
We turn more specifically to the additional issues of what kind of good-cause defenses would be available in a treble damages/enforcement action. This calls for an examination of the substantive liability of parties for removal under the Act and the nature and extent of damages available.
Since the Act provides for joint and several liability DEP’s assessment of one’s proportional share of liability will rarely be the subject of a good-cause defense. In addition, the Act’s strict liability provision will severely restrict claims involving the initial triggering of liability. Nevertheless, there remains a number of possible good-cause defenses. Kimber Petroleum and Solar Oil, for example, raise several arguments against the validity of the statutory damages scheme. ■ One claim is that the costs sought are unreasonable; it is asserted that the work to construct a new water supply is beyond the statutory liability of a responsible party, which is limited to, at most, the cleanup and removal of the hazardous waste discharge. The meaning of the statute on this point is not clear. N.J.S.A. 58:10-23.11g(a)(2) defines “all cleanup and removal costs” to include “the cost of restoration and replacement, where possible, of any natural resource damaged or destroyed by a discharge.” Funding the creation of an alternative water supply might also fit under the equally broad definition, id. at (a)(1), that cleanup and removal costs include damage to private property. Thus it is arguable that a discharger would be responsible for creating an alternative long-term water supply. On the other hand, the construction of the extensive infrastructure entailed in a water supply may not be within the contemplation of replacing a natural resource destroyed by a discharge. Moreover, genuine disputes may arise in terms of whether the previous water supply was wholly a part of a “natural resource” and whether a discharge brought about the
While the statute then can be read broadly to encompass such far ranging costs as being included in “removal costs”, we acknowledge a countervailing position that such costs exceed those reasonably within the contemplation of the statute. We cannot on the record presented and the issues actually argued resolve these questions of statutory construction. We raise them to suggest that in an appropriate case, an aggrieved party should have the right, in an action for reimbursement to recover costs, to demonstrate that an element of the costs imposed by DEP is unreasonable. An identical contention raised on an objectively reasonable basis could constitute a “good-cause defense” to a pre-payment enforcement directive.
IV.
We conclude that (1) a good-cause defense by necessary implication is provided under the treble damages provision of the Spill Act, (2) good-cause defenses include challenges to the reasonableness of the costs assessed, and (3) the DEP has the authority to seek removal costs from dischargers while controlling remedial action and obtain treble damages upon failure to pay such costs.
Accordingly, we rule that the DEP directive issued to Kimber Petroleum and Solar Oil threatening treble damages upon noncompliance complies with the Spill Act. The provisions of the DEP directive ordering the payment of removal costs are valid and enforceable subject, however, to any good-cause defense that may be raised by the appellants. Nevertheless, in this case we need not consider further the applicability of a good-cause defense as a basis for denying treble damages because the Court has ordered the parties to pay the remedial costs assessed by the directive or security for those costs and has for purposes of this appeal excused liability for treble damages
Under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. §§ 9601 to 9657, the Environmental Protection Agency (EPA) has three options: 1) it may file a civil suit to force a responsible party to remove the hazardous waste, id. at § 9606(a); 2) it may issue an administrative order requiring removal; id., and 3) it can use Superfund moneys for the cleanup, and the responsible parties would then be liable for those amounts to the Superfund. Id. at §§ 9604(a)(1), 9612(c)(1); see Wagner Elec. Corp. v. Thomas, 612 F.Supp. 736, 738 (D.C.Kan. 1985). The EPA thus does not seem to be authorized by CERCLA to act in a way analogous to the way that DEP has acted in this case: i.e., to maintain control of the cleanup operations while requiring the responsible parties to prepay.
However, we note that if the DEP completed the cleanup and removal and then assessed costs, the accuracy of DEP's assessment of the costs would not be the issue it predictably is when a directive is issued to an alleged polluter before the cleanup has begun.
A number of other New Jersey statutes authorize the recovery of treble damages. See, e.g., N.J.S.A. 2A:18-61.6 (fraudulent eviction), 2A:33-2 (impounding distressed chattels), 17:33A-7 (insurance fraud), 46:10A-2 (mortgage financing), 56:4-2 (unfair competition).
Kimber Petroleum and Solar Oil argue that arbitration is an inadequate alternative forum for challenging the validity of DEP’s Directives because only the amount of costs can be challenged in that forum. We do not agree with the implied narrow reading of N.J.S.A. 58:10-23.1 In. The scope of the arbitrator’s powers under that section is clearly broad enough to cover and challenge brought to the validity of any aspect of a directive. However, the DEP maintains that no recourse to the fund or its arbitration procedures may be had by a partially responsible discharger. Thus the remedy is illusory in almost all cases.
The Woodland court based its determination on its conclusion that the Act’s post-enforcement arbitration provision satisfied the needs of parties claiming innocence of any wrongdoing. Some question arises, however, as to the adequacy of this provision for parties admitting responsibility but contesting the amount of money determined by the DEP as being required. One reading of the Act would find arbitration unavailable, at least to the extent of any contested amounts, in such a situation. See Tree Realty, Inc. v. Department of Treasury, 205 N.J.Super. 346, 349 (App.Div. 1985) (any party in any way responsible for an offending discharge is fully liable and "there is no point in submitting the matter to arbitration."). Such a problem would not arise, however, if a good-cause defense was read into the Act.
Cf. Pennzoil v. Texaco, — U.S.-,---& nn. 10-11, 107 S.Ct. 1519, 1526-27 & nn. 10-11, 95 L.Ed.2d 1, 16-17 & nn. 10-11 (1987) (federal court should abstain from determining validity of state statute under the federal constitution in part to give the state courts an opportunity to modify the statute's interpretation in light of a state constitutional provision).
The need for action in this area, and, in particular, for state government action, was shown by a recent report that stated that nationally there are tens
In addition, the DEP has the option of itemizing the amounts required by its directives in order to limit the extent of what can be reached by a good-cause defense.
Dissenting Opinion
dissenting.
The Court’s decision today very substantially expands the power of the State, through the Department of Environmental Protection (DEP), to remedy the adverse effects of discharges of hazardous substances. In attempting to address the grave risks that hazardous substances pose to our society, the statute provides that the DEP may require a polluter to clean up and remove a hazardous discharge and its effects. Today the Court correctly finds that the DEP may alternatively require the polluter to pay on demand the estimated cost of such cleanup, leaving it to the Department to complete the task. Whereas the former is provided expressly in the statute, the latter power is found to exist by implication. This is a most important, indeed, a necessary, expansion of the Department’s vital role in this area.
It is therefore ironic that in this same decision the Court provides polluters with a defense found nowhere in the Act. This defense allows a polluter to escape treble damages for refusal to comply with a DEP demand for cleanup and removal money whenever the polluter’s refusal to pay was based on “good cause.” The Court thereby holds that despite the Act’s explicit and unqualified requirement for cleanup on demand (or, alternatively, for payment on demand), the polluter who refuses to pay may successfully avoid liability for treble damages—the weapon designed by the Legislature to assure that cleanup funds would immediately be made available by polluters. If the polluter is found to have had “good cause” to refuse such payment, no treble damages are imposed even though the polluter was, in fact and in law, liable for such payment.
I dissent from that holding. Not only does the statute not provide for a “good cause” exception—on this there is no
I.
The magnitude of our state’s hazardous waste problem is beyond dispute. New Jersey produces 12.5% of the United States’ chemical output, making the state the second largest chemical producer in the nation; 970 chemical plants are located in this state. Chemical Industry Council of New Jersey, Press Release (Trenton, N.J., n.d.). Moreover, chemicals produced out of state are transported along the northeast corridor via New Jersey’s highways and railways, where accidents can lead to their release into this state’s environment. The risks are aggravated by geologic, hydrologic, and soil conditions that make New Jersey’s water supply peculiarly vulnerable to contamination. Of the fifty states, New Jersey is thought to have the most severe hazardous waste problem. Morris, "Hazardous Wastes in New Jersey,” 38 Rutgers L. Rev. 623, 624-26 (1986); see also New Jersey Department of Environmental Protection, Status Report on the Hazardous Waste Management Program in New Jersey, Vol. II at 19 (Oct. 1986) (New Jersey leads the nation in the number of hazardous waste sites identified by the Federal Superfund program with 97 of the 888 designated as of 1986); English, “Hazardous Waste Regulation: A Prescription for Clean Water,” 13 Seton Hall L. Rev. 229, 230-31 n. 11 (1983) (by producing approximately 350,000 tons of hazardous waste per year, New Jersey surpasses all other states in the generation of hazardous waste).
The Legislature’s decision to use unconventional remedies in the Spill Compensation and Control Act (“the Act” or the “Spill Act”), N.J.S.A. 58:10-23.11 to -23.11z, was based on a valid perception that this state faces an enormous environmental problem and that a great deal of money will be required to
[w]henever the department acts to remove a discharge or contracts to secure prospective removal services, it is authorized to draw upon the money available in the fund. Such money shall be used to pay promptly for all cleanup costs incurred by the department in removing or in minimizing damage caused by such discharge. [N.J.S.A. 58:10-28.11f(a).]
Thereafter, the Fund seeks reimbursement from those responsible for the pollution.
A critical attribute of the law, then, is that it creates an immediately available source of funds to clean up discharges of hazardous materials. The conventional approach—a suit by the DEP to establish liability, a judgment requiring the defendant to clean up or to pay for the cleanup, and ultimately further orders to compel compliance (including orders holding defendant in contempt, setting a date for compliance, extending the date, and so on)—was deemed inadequate for the solution of the problem. The Legislature mandated the expeditious cleanup and removal of hazardous wastes because this problem is not static, but constantly growing. The need was for relief from pollution, not for judgments and orders that, although perhaps vindicating individual rights, would leave pollution removal to the remote and uncertain future. The Legislature concluded that there was a need for immediate relief. The Fund is one means devised by the Legislature to achieve this result. Its purpose is to make sure that cleanup and removal come first— through the Fund—with litigation, if any, to follow.
Despite its size, the Fund does not begin to meet New Jersey’s cleanup needs. The problem of remedying both today’s new spills and the consequences of past pollution far
The Legislature decided that whatever else was needed would come not from the taxpayers but from the polluters themselves.
The methods devised by the Legislature of assuring relatively rapid cleanup of these sites include imposition of almost absolute liability for cleanup and removal costs. “An act or omission caused solely by war, sabotage, or God, or a combination thereof, shall be the only defenses which may be raised by any owner or operator of a major facility or vessel responsible for a discharge in any action arising under the provisions of this Act.” N.J.S.A. 58:10-23.11g(d). Moreover, liability is “joint and several.” Anyone “in any way responsible” for the discharge that ultimately poisons a site is liable for all cleanup and removal costs. N.J.S.A. 58:10-23.11g(c). In other words, a
The majority expresses no objection to the Legislature’s imposition of absolute liability and joint and several liability. It is the next step in the Legislature’s attempt to remedy the problem that causes the Court to hesitate in executing this law as written by the Legislature. The legislation provides that one designated by the DEP as liable for these costs may be required on demand of the DEP—before any adjudication of such liability—to undertake the entire cleanup and removal task. Alternatively, as the Court today correctly holds, the party may be required to pay to the DEP, on its demand, an amount sufficient to enable the DEP (or its contractors) to effect the
The Court holds that treble damages are not recoverable if the responsible party’s refusal to pay is based on “good cause” even when that party is, in fact, fully liable. “Good cause” is not fully described, but it appears to be an honest belief, grounded on objective fact, that the party is not liable or, if liable, is not liable for the amount claimed. As the majority says, “[i]f the court determines that a company’s basis for noncompliance is objectively reasonable, even if the court does not ultimately uphold the company’s argument, DEP’s request for treble damages may be rejected if not reasonable in light of all the circumstances.” Ante at 84. Precisely what this means is not clear. It may imply, in addition to a defense based on the objective reasonableness of a refusal to comply with the DEP’s demand for funds, a further defense, in the action to recover treble damages, that the DEP’s request is “not reasonable in light of all the circumstances.”
Before dealing with the legal analysis of the Court’s limitation on this treble damage power, a summary of its practical effect is instructive. As written by the Legislature, this seemingly harsh provision might have promptly supplied the State with the wherewithal to meet its cleanup and removal goals. Those companies partly or fully responsible for creating hazard
It is the importance of this goal that seems not to have had a sufficient impact on the Court’s analysis. The threat of damage from these sites is severe and imminent. Failure to address the threat will be deleterious not only to industry and growth but to life itself. The goal of the challenged provision is to force polluters to pay prior to litigation so that the State can address the problem immediately.
Balanced against this goal, the Court posits the potential unfairness of the remedy. An uninsured small business, truly in doubt as to its liability, may be faced with a grim choice. It may pay, thereby placing the company in financial jeopardy notwithstanding the prospect of reimbursement, or, alternatively, it may refuse to pay and risk an ultimate treble damage sanction. If unfairness does result, the administrator of the Fund has discretion to compromise a claim against a discharger that would otherwise be subject to the treble damage penalty because of its refusal to pay. It is noteworthy that in the companion case, In re J.I.S. Industrial Service Company Landfill, 110 N.J. 101 (1987), the DEP, after making a demand for payment (in that case to finance a design and feasibility study), thereby triggering potential treble damages, settled the matter apparently by agreeing to various contributions from numerous dischargers. In other words, the law does not require the enforcement agency to act unfairly. See N.J.S.A. 58:10-23.11q.
The Court underestimates the potential impact of its “good cause” exception to the treble damages remedy. Each dischar
The concept of “good cause” has performed a great service in the law, especially where narrow specifics in legislation or decisional law are not feasible. The virtue of “good cause”—its flexibility, its expansiveness, its ability to cover many different kinds of situations, difficult to define in advance—is in this situation a vice. Instead of the assured prompt flow of funds to the State from those who are responsible for polluting our environment, instead of the prompt cleanup and removal of hazardous substances, we will have delay and litigation leading to the compromises that have for so long afflicted governmental attempts to act effectively in this area.
This is an arena where desperately needed action has been dreadfully delayed. In re J.I.S. Industrial Service Company Landfill, supra, 110 N.J. 101, is but one example. After twenty years, the courts, the DEP, and the polluter are still arguing about a plan for cleanup. With today’s judicially designed exception to liability, we can expect more of the same—delay reinforced by the predictable reluctance of judges and juries to impose treble damages on a polluter who shows some semblance of honesty and “good cause” in not putting up the money.
No balancing of societal interests—assuming this were a permissible concern of the Court—calls for such a result. By that balance the Court, in order to avoid the possibility of unfair application to a few, may be seriously impeding society’s attempt to escape the certain substantial destruction caused by these poisonous sites. Our need for the swift action that the threat of treble damages would elicit dwarfs the unfairness that may result from the actual imposition of this remedy.
It is difficult to meet the Court’s constitutional argument, since the majority concedes that “it is sufficient for the due process guarantee of the federal Constitution that there be some forum where an order’s validity can be challenged without penalty; it need not be the same forum where enforcement actions are prosecuted and the challenge need not be pre-payment.” Ante at 79. Perhaps the strongest argument that the Court can muster to support its doubt about the constitutional validity of these provisions is its statement that “the United States Supreme Court has never before ruled on the constitutionality of a statutory enforcement scheme that combined, as the Spill Act does, joint and several liability, nearly absolute liability, the virtual elimination of substantive defenses, mandatory treble damages, and no pre-enforcement hearing.” Ante at 79. Each of those, however, as the Court has pointed out, ante at 80-81, is constitutional; there is no
Other than noting instances where this Court has held that the protections of the state Constitution exceed those of the federal Constitution, today’s decision makes no attempt to articulate what state constitutional principles are violated. The position of this Court in the past has been that
[w]here only property rights are involved, mere postponement of the judicial inquiry is not a denial of due process, if the opportunity given for the ultimate judicial determination of the issue be adequate; delay in the judicial determination of property rights is ofttimes unavoidable where it is essential that governmental needs be immediately satisfied. [Jamouneau v. Harner, 16 N.J. 500, 522-23 (1954), cert. den., 349 U.S. 904, 75 S.Ct. 580, 99 L.Ed. 1241 (1955).]
The Court today has failed to demonstrate that this principle should be abandoned.
The “fundamental fairness” doctrine, cited by the Court to lend support to its conclusion, is inapplicable. That doctrine has been used by this Court, usually in the criminal context, to assure fairness to individual litigants where the procedure, though it may fall short of constitutional infirmity, shocks our sense of justice.
The Court expresses concern regarding what it perceives as the uncertainty of the right of a party who pays on demand to be reimbursed if the party establishes thereafter that it was not liable for the full amount paid. See ante at 80 n. 5. The Court would better vindicate the legislative will by interpreting the statute to assure complete reimbursement under those circumstances, instead of assuming that the only route to constitutionality (or more accurately the only route to avoid doubtful constitutionality) is to weaken severely a mechanism that the Legislature relied on to insure prompt availability of private funds to aid in the immediate cleanup of hazardous waste sites.
It requires no great imagination to find such a right of reimbursement. The statute makes it clear that the Fund will have an action against parties responsible for paying cleanup and removal costs. N.J.S.A. 58:10-23.111 Strongly implied is the correlative right to reimbursement from the Fund where one not liable for cleanup and removal pays the Department on demand for the cost of that work. The Legislature surely intended that such a party, on establishing its non-liability or its
The Court notes that “the DEP maintains that no recourse to the Fund or its arbitration procedures may be had by a partially responsible discharger,” and concludes that “[t]hus the remedy is illusory in almost all cases.” Ante at 79 n. 4. Obviously, no recourse to the Fund may be had by any “partially responsible discharger” if, under the law, that discharger is liable for the entire damage. It is difficult to understand how the statute is unconstitutional (or the remedy “illusory”) in failing to provide reimbursement to a party that has paid all of the damages when that party is in fact liable for all of the damages. If the partially responsible discharger has been overcharged for the total cost of the cleanup, however, that discharger must have recourse against the Fund.
If this is the concern that leads the Court to question the constitutionality of the statute, its insubstantiality is apparent. It is eliminated by a construction of the statute that is not only reasonable but compelled.
Had the Legislature intended a “good cause” exception, or anything like it, it would have said so. It provided, in this very Act, that penalties for failure to pay the tax imposed by the Act might be remitted if such failure “was excusable under the circumstances,” N.J.S.A. 58:10-23.11h(e); no similar excuse is provided for refusal to pay for cleanup costs, see N.J.S.A. 58:10-23.11g(d). Moreover, the Legislature was undoubtedly aware of the provision in the parallel federal statute triggering treble damages only where the polluter’s failure to clean up was “without sufficient cause.” 42 U.S.C. § 9607(c)(3). The fact that our Legislature saw fit to impose treble damages without the slightest mention or hint that any excuse would suffice to avoid this sanction (if the party refused demand for
The Court’s analysis of the possible claims of Kimber and Solar in this case, ante at 85-86, indicates the myriad circumstances that this Court envisions as perhaps giving rise to “good cause” to refuse payment. The effect of this broad exception, then, will be to encourage a polluter to resist DEP demands for cleanup and removal funds. What will occur is a full-blown trial involving complex questions of liability and quantum of damages that will likely take years to resolve. And that will be followed by appeals. One can predict that with the treble damage inducement thus drained of its strength, the State will be forced to look elsewhere for the needed financing to fund cleanups as spills occur. Meanwhile, continued delay will render cleanup and removal of hazardous substances increasingly difficult and expensive. By creating an exception where none was intended by the Legislature nor required by the Constitution, the Court has, I fear, significantly diminished the State’s ability to deal effectively with a critical problem.
The Court effectively holds that unless a good cause defense is allowed the statute in its operation violates due process. Ante at 82. The Court notes, however, that treble damages could be assessed against polluters in a law that contained no demand-refusal triggering mechanism. Ante at 75. As the Court points out, “[t]he Supreme Court regularly applies antitrust legislation, which, like the Spill Act, combines treble damages with joint and several liability. The Sherman Antitrust Act has been interpreted in a way that those subjected to onerous joint and several liability provisions have no right of contribution.” Ibid, (citations omitted). A demand-refusal triggering mechanism can, from that vantage point, be viewed as less onerous than the impact of antitrust legislation: not only does our substantive law allow a right of contribution from other tortfeasors, but treble damages can be escaped by paying the underlying liability on demand. The
It is widely recognized that the requirements of due process cannot be determined in the abstract, without regard to the concrete interests at stake in a given circumstance. See Jamouneau v. Harner, supra, 16 N.J. at 514 (“The basic right of private property perforce yields to an overriding public need.”). In none of the due process cases cited by the Court was the state’s interest as urgent and as weighty as it is here. Our state has found that in order to remove as quickly as possible the poisons that menace the public health and welfare, vast sums must immediately be made available to commence the effort. The only way such sums will be available is if polluters are forced to pay their fair share and to do so now. The Legislature has determined, and correctly so, that ordinary legal process is. wholly inadequate for this purpose. Lawsuits to compel removal and cleanup, to recover damages on proof of liability, and to recover treble damages would all afford traditional due process, but would leave the state Fund without the means to satisfy its immediate need for funds from polluters.
The Legislature has concluded that the only remedy that will suffice is one that threatens severe sanctions against polluters who fail to pay immediately on demand. The process that is due to targeted companies, the Legislature has concluded, is the right, after suck payment, to sue to recover all or some of the payment if it is ultimately determined that the company involved either was not liable at all, or was liable for less than it paid. If the process that is due to such polluters requires more, requires that they be allowed not to pay in advance, but to contest their liability before payment, or to escape the treble
I suggest that the Court goes wide of the mark in its conclusion that today’s holding will cause little damage to the Legislature’s effort to clean up hazardous waste sites immediately. Today’s decision does not reckon with the unprecedented nature of the risk facing this state and its citizens. There is no room for judicial interference with this attempt at self-preservation. Only the clearest constitutional infirmity could justify today’s result. I find none, and the Court finds, at most, that “maybe” such a defect exists. I would allow this statute to be enforced as written.
For affirmance as modified—Justices CLIFFORD, HANDLER, O’HERN, GARIBALDI and STEIN—5.
Dissenting—Chief Justice WILENTZ—1.
The Act itself recognizes the Spill Fund's inadequacy. “If and to the extent that he determines that funds are available, the administrator shall approve and make payments for any cleanup and removal costs incurred by the Department for the removal of a hazardous substance____” N.J.S.A. 58:10-23.1 lf(c) (emphasis supplied). Shortages are also anticipated where the Fund is used to pay damages. "In the event that the total awards for a specific occurrence exceed the current balance of the Fund, the immediate award shall be paid on a prorated basis____" N.J.S.A. 58:10-23.11r.
Contributions from responsible parties figure prominently in this state’s overall toxic cleanup scheme. According to a recent DEP report, "New Jersey expects approximately $500 million in contributions from private responsible parties to meet the total program goal of $1.6 billion." New Jersey Department of Environmental Protection, New Jersey Hazardous Waste Management Program Update 1 (March 1987).
In New Jersey we have, until recently, accepted without question the idea that joint tortfeasors—those whose actions together add up to the total damage—are "jointly and severally” liable for the damages caused. The severity of the common-law rule was such that one could not obtain contribution even from those whose culpable actions were the major cause of the problem. That injustice has been remedied to a great extent, see NJ.S.A. 2A: 15-5.3, but there has been no general change in the law that holds each one of the joint tortfeasors liable for the entire damage, whether or not it is able to obtain contribution. The Legislature has recently placed certain limitations on the liability of joint tortfeasors, but these explicitly do not apply in environmental cases. See L. 1987, c. 325, § 3 (to be codified at NJ.S.A. 2A:15-5.2) (joint tortfeasor in non-environmental case responsible for 20% or less of harm is liable only for attributable share of damages; party responsible for over 20% but less than 60%, though liable for full amount of economic damages, is liable only for attributable share of noneconomic damages); see also Licensed Alcoholic Beverage Server Fair Liability Act, Z. 1987, c. 152, § 6 (to be codified at NJ.S.A. 2A:22A-6) (alcohol beverage server determined to be a joint tortfeasor is "responsible for no more than that percentage share of the damages which is equal to the percentage of negligence attributable to the server’’); L.1987, c. 404, § 5 (to be codified at NJ.S.A. 2A:15-5.5 et seq.) (similar limitation on liability of social hosts for alcohol-related accidents).
Most of the "fundamental fairness" cases cited by the majority, ante at 81-82, involve criminal proceedings. See, e.g., State v. Abbati, 99 N.J. 418, 427 (1985) (fundamental fairness precepts confirm court’s power to dismiss indictment with prejudice following mistrials attributable to repeated jury deadlocks); State v. Gaffey, 92 N.J. 374, 389 (1983) (due process and fundamental fairness considerations may, under certain circumstances, bar further prosecution of incompetent defendant whose previous indictment was dismissed without prejudice); State v. Tropea, 78 N.J. 309, 316 (1978) (whether or not double jeopardy clause applies to motor vehicle violations, considerations of fundamental fairness bar retrial); State v. Talbot, 71 N.J. 160, 168 (1976) (defense of entrapment is "bottomed on the principle of fundamental fairness"); State v. Gregory, 66 N.J. 510, 518 (1975) (fairness dictates compulsory joinder of
Reference
- Full Case Name
- IN THE MATTER OF THE DIRECTIVE OF THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, ISSUED TO KIMBER PETROLEUM CORPORATION, SHELL OIL COMPANY AND SOLAR OIL COMPANY
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- 6 cases
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- Published