Magic Petroleum Corporation v. Exxon Mobil Corporation (069083)

95 A.3d 175, 218 N.J. 390, 2014 WL 3858455, 2014 N.J. LEXIS 800
CourtSupreme Court of New Jersey
DecidedJuly 28, 2014
DocketA-46-12
StatusPublished
Cited by22 cases

This text of 95 A.3d 175 (Magic Petroleum Corporation v. Exxon Mobil Corporation (069083)) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Magic Petroleum Corporation v. Exxon Mobil Corporation (069083), 95 A.3d 175, 218 N.J. 390, 2014 WL 3858455, 2014 N.J. LEXIS 800 (N.J. 2014).

Opinion

Justice FERNANDEZ-VINA delivered the opinion of the Court.

When environmental contamination occurs, the Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24, makes all dischargers jointly and severally liable for the entire cost of cleanup. The New Jersey Department of Environmental *395 Protection (DEP or Department) is involved in a spill cleanup either by affirmatively compelling a “discharger” to remediate the site or by managing remediation accomplished by parties. Remediation expenses are the responsibility of the party or parties who are “in any way responsible” for the pollution. N.J.S.A 58:10-23.11g. The Spill Act specifically authorizes a private right of action, thus allowing parties to seek contribution totaling an amount equal to the party’s share of liability for the remediation costs from other responsible parties. See N.J.S.A. 58:10— 23.11f(a)(2)(a).

In this appeal, we consider whether a property owner’s claims for contribution under the Spill Act must be deferred under the doctrine of primary jurisdiction until after the conclusion of DEP remediation enforcement actions or whether a property owner may proceed against responsible parties to recover sums expended to remediate the site before the DEP concludes its involvement in the site.

The facts in this case led to two separate legal actions. In the first case, the DEP sued Magic Petroleum, Inc. (Magic) for expenses incurred during the remediation of hazardous material on land owned and operated by the company. Although Magic asserted that other parties were responsible, Magic bore the entire cost of cleanup pursuant to the DEP’s determination that Magic was a discharger. Magic then sought contribution from Exxon Mobil Corporation (ExxonMobil), the owner of neighboring land, to defray the cost of the cleanup. That action started the pending case. Magic’s claim was dismissed without prejudice by the trial court, which reasoned that, under the doctrine of primary jurisdiction, the contribution claim could only be filed following complete remediation of the site. The court adduced that deferring the case to the DEP would afford the Department time to employ its expertise in evaluating the full extent of the contamination and total costs of the cleanup, components essential to awarding the final allocation of costs following completion of the remediation.

*396 The Appellate Division affirmed the trial court’s decision. The appellate panel recognized that the Superior Court and the DEP have concurrent jurisdiction to determine whether ExxonMobil is a discharger, but the DEP has sole jurisdiction over identifying contaminants on the land and assessing the extent of the discharge in order to formulate the proper remediation plan. Furthermore, the panel held that a party must first obtain written approval of the remediation plan from the DEP before commencing a contribution claim under the Spill Act.

While the extent of the cleanup has yet to be ascertained, we agree that the trial court may determine, subject to proofs, whether ExxonMobil is also responsible for the contamination. Moreover, we conclude that the trial court may assign liability to responsible parties, based on evidence presented at trial, but we note that the court may not be able to issue a final damages award. Further, we determine that a party need not obtain written approval of the remediation plan prior to filing a claim for contribution. Therefore, we reverse the judgment of the Appellate Division and remand to the trial court.

I.

A.

In the early 1990s, Magic purchased Lot 19.01 in the Clarksburg area of Millstone Township. On that lot, Magic owned and operated a gasoline refueling and service station, which was subsequently discovered to be the source of ground and water contamination on the land. Across the street, ExxonMobil owned a parcel of land, designated as Lot 11, 1 where it operated another gasoline refueling station, rife with its own contamination issues.

*397 At the time of purchase, Magic was aware that its property contained several underground storage tanks (USTs), that were leaking petroleum hydrocarbons into the soil and ground water. In fact, the DEP became involved with Lot 19.01 in 1989, years before Magic purchased the land, after the DEP detected strong petroleum odors and ionization on the land. Those contaminants were later determined to be a “discharge” pursuant to the Spill Act, N.J.S.A. 58:10-23.11 b. As a result, two USTs were removed in 1991.

In 1995, the DEP issued a Field Directive notifying Magic of the need to investigate and remediate the hazardous substances discharged on Lot 19.01. In 1997, Magic had three more USTs removed from the property. In 1999, Magic entered into an Administrative Consent Order (ACO) with the DEP, whereby Magic agreed to remediate the property under DEP oversight. The DEP issued an Administrative Order and Notice of Civil Administrative Penalty Assessment on May 9, 2003, when, according to the DEP, Magic failed to comply with the ACO.

Magic requested an administrative hearing and the ease was transferred to the Office of Administrative Law (OAL). Magic asserted that the proceeding should be stayed to admit ExxonMobil as a party so that liability could be allocated to each potentially responsible party accordingly.

Magic also sent letters to the DEP requesting that the agency join ExxonMobil in the remediation plan. The DEP responded by letter dated August 21, 2003, directing that “the assessment of a percentage of the responsibility is best addressed in negotiation with ExxonMobil or before the [cjourt.”

An administrative hearing was held, and on November 1, 2006, an Administrative Law Judge (ALJ) concluded that the contamination of Lot 19.01 was properly attributed to a discharge for which Magic was “in any way responsible” under N.J.S.A* 58:10-23.11g. The ALJ also found that Magic was in violation of the ACO. The DEP adopted the ALJ’s decision on December 18, 2006.

*398 Before completion of the OAL proceeding, Magic filed a complaint in Superior Court, Law Division in which it alleged that the 1999 ACO was a contract, that DEP breached the contract and that DEP breached the duty of good faith and fair dealing. A Law Division judge dismissed the case on October 4, 2006. Magic then appealed the dismissal of the case and the final decision of the DEP to the Appellate Division, which consolidated the cases and affirmed both judgments. We denied certification. Vashisht v. N.J. Dep’t of Envtl. Prot., 198 N.J. 473, 968 A.2d 1189 (2009).

B.

On August 12, 2003, while the DEP proceedings were ongoing, Magic filed a claim for contribution in the Superior Court under the Spill Act, alleging that ExxonMobil and several other parties were responsible for a portion of the costs associated with the cleanup of the contamination on Lot 19.01. That claim gave rise to this appeal.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Sandra Dorrel v. Woodruff Energey, Inc.
New Jersey Superior Court App Division, 2024
Atlantic City Board of Education v. Farook Hossain
New Jersey Superior Court App Division, 2024
N.J. Dep't of Envtl. Prot. v. Exxon Mobil Corp.
181 A.3d 257 (New Jersey Superior Court App Division, 2018)
Nl Industries, Inc. v. State(076550)
156 A.3d 1043 (Supreme Court of New Jersey, 2017)
Greg and Renee Matejek v. Martha and Guy Watson
155 A.3d 1049 (New Jersey Superior Court App Division, 2017)
Estate of Myroslava Kotsovska v. Saul Liebman (073861)
116 A.3d 1 (Supreme Court of New Jersey, 2015)
Morristown Associates v. Grant Oil Company (073248)
106 A.3d 1176 (Supreme Court of New Jersey, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
95 A.3d 175, 218 N.J. 390, 2014 WL 3858455, 2014 N.J. LEXIS 800, Counsel Stack Legal Research, https://law.counselstack.com/opinion/magic-petroleum-corporation-v-exxon-mobil-corporation-069083-nj-2014.