Legal Alert

New Jersey Appellate Court Limits Natural Resource Damage Claims Based on Common Law Theories

April 9, 2020

In its complaint in New Jersey Department of Environmental Protection, et al. v. Hess Corporation, et al., the state sought natural resource damages (NRDs) from two defendants arising from the alleged environmental contamination at a former oil refinery and terminal. The trial court dismissed the strict liability and trespass claims in their entirety, and limited the public nuisance claims to injunctive relief (thus cutting off the state’s ability to seek monetary damages through a claim for public nuisance). The State filed an interlocutory appeal. Following full briefing and oral argument, the New Jersey Appellate Division affirmed-in-part and reversed-in-part.

On appeal, the state argued that it could assert claims for common law trespass based on its supposed role as the “trustee, for the benefit of its citizens, of all natural resources within its jurisdiction.” The Appellate Division rejected that assertion. It instead joined a chorus of other courts, ruling that the state cannot assert common law trespass claims for NRDs unless it has exclusive possession over the subject property. Here, the natural resources allegedly damaged were either on private property or in a navigable waterway, with the state having exclusive ownership of neither. So the state’s trespass claim failed.

With respect to the strict liability claims, the Appellate Division reversed the dismissal of the claim against one defendant but affirmed the dismissal of the claim against the other. The distinction between those claims was based on the nature of the facts pleaded in the complaint. The court found that the complaint contained detailed allegations of abnormally dangerous conduct by a defendant that operated a refinery, citing numerous contamination events causing plaintiffs’ claimed NRDs, and that these allegations were sufficient to survive a motion to dismiss the strict liability claim. But the court found that the state failed to plead that the other defendant had engaged in any activity that could be deemed “abnormally dangerous,” and so affirmed the dismissal of the claim against that defendant.

Finally, the court affirmed the limited value of public nuisance claims in NRD cases by ruling that such claims may be used to require abatement (i.e., to either compel or to recover the costs of remediation), but not to recover monetary damages, such as NRDs.

Ballard Spahr’s Environment and Natural Resources group has substantial experience representing companies involved in NRD claims and other environmental litigation. Please contact the authors of this alert to learn more.

Copyright © 2020 by Ballard Spahr LLP.
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