January 19, 2023

NJDEP May Subject Responsible Parties To Direct Oversight for PFAS Remediation Without Prior Court Approval and Adjudication of Good-Cause Defenses

By Heidi Minuskin and Ryan Gallagher

PFAS[1], otherwise known as per- and polyfluoroalkyl and nicknamed the “Forever Chemicals”, is a relatively new, but severe concern in New Jersey due to associated environmental and health impacts, especially when found in drinking water. PFAS is an umbrella term used to describe thousands of man-made chemicals that are extremely resistant to degradation and pose a substantial threat to human health and the environment, including being linked to cancer, pregnancy complications, and decreased fertility. Major sources of PFAS are fire training/fire response sites, industrial sites, landfills, and wastewater treatment plants/biosolids. Parties already addressing costly environmental remediation issues now face even more onerous requirements regarding the new Forever Chemicals with limited recourse.

In response to these concerns, the New Jersey Department of Environmental Protection (“NJDEP”) established maximum contaminant levels to protect health and the environment. Furthermore, in March 2019, the NJDEP issued a Statewide PFAS Directive (“Statewide Directive”) to entities which it determined could be responsible for PFAS contamination, and it imposed significant requirements, including site-specific timeframes to investigate, cleanup and remove contamination. Some designated responsible parties have attempted to push back on these requirements but with limited success. On January 9, 2023, the New Jersey Appellate Division decided a case where a responsible party under the Statewide Directive failed to meet the site-specific timeframes, resulting in NJDEP direct oversight (“Direct Oversight”). The party disputed the Direct Oversight determination, arguing that enforcement of the Statewide Directive is improper before its good-cause defenses were adjudicated, and that the Direct Oversight is invalid as arbitrary, capricious and unreasonable.

The Appellate Division held that the NJDEP is authorized, pursuant to New Jersey’s Spill Act, to undertake direct oversight of a remediation when it determines that one or more environmentally sensitive natural resources has been injured by contamination. Moreover, the Appellate Division held that a responsible party is not excused from complying with a NJDEP directive because it has asserted good-cause defenses to the Statewide Directive. The Court ruled that it will simply assess the good-cause defenses in upholding the imposition of penalties for failure to comply. If its defenses are valid, then the imposition of penalties will not be upheld. If those defenses do not prevail but are considered to be “objectively reasonable”, then an argument can be made that the imposition of treble damages as a penalty is not reasonable. The Court noted that NJDEP’s issuance of Direct Oversight does not trigger due process protections, as Direct Oversight is not a “penalty” but, instead, is just an enforcement tool while good faith defenses are asserted.

The Appellate Division further affirmed that the NJDEP’s Direct Oversight is not arbitrary, capricious and unreasonable because “substantial deference must be extended to an agency’s interpretation of its own regulations” and, thus, NJDEP retains authority to establish site-specific timeframes under the Statewide Directive. Failure to comply with those timeframes is “a sufficient basis for DEP’s determination that its direct oversight of [the responsible party’s] remediation of the Site and wide-ranging environmental impacts resulting from the migration of PFAS from the Site is mandated” and not an abuse of discretion.

These regulations and enforcement actions impact the actions of responsible parties subject to the Statewide PFAS Directive. It is critical that responsible parties understand these new regulations and the Statewide PFAS Directive to ensure compliance and understand how these requirements will impact real property and businesses. Please do not hesitate to reach out for guidance and advice on these emerging issues.

For more information, contact Heidi Minuskin, Esq. at hsm@spsk.com or 973-798-4949 and Ryan Gallagher, Esq. at rg@spsk.com or 973-798-4953.

DISCLAIMER: This Alert is designed to keep you aware of recent developments in the law. It is not intended to be legal advice, which can only be given after the attorney understands the facts of a particular matter and the goals of the client.

[1] Contaminants that are specific PFAS  include PFNA (perfluorononanoic acid) and PFOA (perfluorooctanoic acid), and  PFOS (perfluorooctane sulfonic acid)