A New Jersey Appellate Division panel has expanded the availability of common law strict liability damages, in a decision likely to complicate dismissal of claims that go beyond statutory remedies for Natural Resource Damages actions.
The litigation was brought by the New Jersey Department of Environmental Protection against Hess Corp, and its successor in interest at the former Hess refinery in Woodbridge Township. Plaintiffs sought recovery under the Spill Act, the Water Pollution Control Act, and under New Jersey common law for public nuisance, trespass, and strict liability. They were appealing the lower court’s decision to dismiss the trespass and common law strict liability claims and limit the remedy for public nuisance to injunctive relief.
The Appellate Division decision reversed the lower court’s interpretation of the Spill Act to subsume common law claims and reversed its analysis of common law strict liability. It upheld the dismissal of trespass claims, and largely upheld the decision with respect to public nuisance.
Abnormally dangerous activities
The most significant element of the decision was discussion of the common law strict liability claim, which turned on the question of whether the refinery was an “abnormally dangerous” activity.
Storage and processing of crude oil and refined petroleum products have not previously been deemed “abnormally dangerous” activities in NJ state courts. And as a result, the claim for common law strict liability for maintaining abnormally dangerous conditions has not applied to petroleum refineries in New Jersey, nor to other petroleum storage or processing facilities.
The Appellate Division applied the longstanding six-factor test articulated in New Jersey Department of Environmental Protection v. Ventron Corp: 1) the existence of a high degree of risk of some harm to the person, land, or chattels of others; 2) likelihood that the harm that results from it will be great; 3) inability to eliminate the risk by the exercise of reasonable care; 4) extent to which the activity is not a matter of common usage; 5) inappropriateness of the activity to the place where it is carried on; and 6) extent to which its value to community is outweighed by its dangerous attributes.
The court distinguished the case from the one other decision addressing abnormally dangerous activities in the petroleum context – Biniek v. Exxon Mobil Corp. The court noted that comparison of a gas station to a refinery like the Hess facility was “totally inapposite.”
However, the court’s analysis was fairly cursory. It concluded that the “extent of its operations, its proximity to sensitive waterways and environmental areas, and the danger of pollutants allegedly used” were sufficient to satisfy the Ventron criteria.
Given the cursory nature of the court’s analysis it’s difficult to know how far the precedent will apply. But at a minimum, it’s likely to encourage more claims of common law strict liability in the petroleum context and complicate the motion to dismiss such claims. Note that the dismissal of strict liability claims against the successor in interest, since the complaint had alleged no similar activity regarding discharge or contamination.
The court also reversed in part the lower court’s dismissal of the public nuisance claims, insofar as they precluded “monetary relief” in the form of costs of abatement. The lower court had dismissed claims for public nuisance, holding that “the only available remedy to the State was that of abatement.”
Actions for public nuisance can be brought by both private citizens and public entities, but different remedies are available. Private citizens may seek damages, provided they are able to show “special injury” that is distinct from what is suffered by the general public. Public entities, by contrast, are not eligible to recover “typical tort damages.” As the New Jersey Supreme Court explained in In re Lead Paint, though public entities are limited to seeking abatement, that includes the right to recover “the obligations, including the costs, of the abatement.”
The application of the public nuisance analysis in the context of petroleum discharge and contamination is a reminder that any legislative effort to extend the public nuisance doctrine to permit general tort remedies would have potential to trigger ripple effects across the legal landscape in New Jersey.