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New Jersey Department of Environmental Protection v. Alden Leeds, Inc.

153 N.J. 272, 708 A.2d 1161 (1998)

ENVIRONMENTAL LIABILITY—Knowing storage of hazardous reactive chemicals is a sufficient basis under the Air Pollution Control Act of 1954 to impose liability on a company when a fire causes the release of toxins into the atmosphere. Whether or not notice of the discharge is timely given is to be determined on a case by case basis.

A fire occurred at a plant where chlorine chemicals were manufactured, causing the release of chlorine gas into the atmosphere. The Department of Environmental Protection (DEP) assessed two civil penalties against the company that occupied the plant. The first penalty, pursuant to N.J.A.C. 7:27-5.2(a) (Code), which is an implementing regulation under the Air Pollution Control Act of 1954 (APCA), was a strict liability charge of causing or allowing the chlorine to be emitted. The second penalty was for failing to immediately and adequately notify the DEP. The Administrative Law Judge found the company liable for the release of hazardous substances under APCA, after concluding that the Code imposed strict liability. The judge also found the company guilty of failing to immediately and properly notify the DEP. The DEP Commissioner adopted the judge’s decision, but only after concluding that the Code required a causal nexus between the actions of the company and the release of the hazardous chemicals. The Commissioner held that the nexus was established by the knowing storage of chemicals reactive to heat and water. The Appellate Division reversed, finding that mere storage was not a sufficient causal nexus and that, since the company did not cause the hazardous release, immediate notification was not required. The matter was then appealed to the New Jersey Supreme Court.

The New Jersey Supreme Court had to determine whether APCA imposed strict liability on an owner or operator of a chemical facility that releases toxins into the atmosphere because of a fire on its premises. It held that the Code is a blanket prohibition on the release of contaminants into the atmosphere, regardless of any unintentional intervening cause that may have started the fire. However, strict liability is imposed only if there is a nexus between the release and the owner/operator. The Supreme Court found that the nexus test was satisfied, and the company strictly liable, simply because the company knowingly stored hazardous chemicals highly reactive with heat and water. It also found legislative intent to impose strict liability on entities that choose to store dangerous chemicals, even if those chemicals were properly stored. With respect to the issue of proper notice, the Supreme Court found for the defendant but on a different basis than that applied by the Appellate Division. The Supreme Court stated that timely notice was to be determined on a case-by-case basis measured from the time the chemical owner has actual knowledge, or reason to know, of the fire. Since the owner notified the DEP 18 minutes after arriving at the plant, and gave as complete a description of the situation as possible, the Supreme Court held that the notice was both timely and adequate.


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