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BROWNFIELDS REDEVELOPMENT: NEW JERSEY SUPREME COURT UPHOLDS DEP'S MINIMUM GROUNDWATER CLEANUP STANDARDS
by Nielsen V. Lewis, Esquire
While the vision of restoring contaminated properties in New Jersey to productive use is not new, a major step in this direction was taken by the New Jersey Legislature with its enactment of the Brownfield and Contaminated Site Remediation Act, N.J.S.A. 58:10B-1 et seq., L. 1997, c. 278 ("Brownfields Act"). "Brownfields" refers to abandoned or underutilized sites, usually in urban areas, burdened with contamination discouraging or complicating their redevelopment. A comprehensive law, the Brownfields Act created significant new incentives for developers to invest in cleaning up and restoring Brownfield sites to productive use, including finality of cleanups, protection of developers from unknown cleanup liabilities and the promise of more flexible cleanup standards.
Missing from the State's program of legal, financial and regulatory incentives for Brownfields redevelopment, however, has been the adoption of more flexible cleanup standards based upon site-specific risk assessments taking into account individual site conditions and actual or planned uses. The Brownfields Act seemed to promise regulatory reform in this regard:
[T]he State needs to ensure that the public health and safety and the environment are protected from the risks posed by contaminated cists and that strict standards coupled with a risk-based and flexible regulatory system will result in more cleanups and thus the elimination of the public's exposure to these hazardous substances and the environmental degradation that contamination causes. [N.J.S.A. 58:10B-1.2.(emphasis added).]
The Act directed the Department of Environmental Protection ("DEP") to adopt minimum cleanup standards for soil, groundwater and surface water quality
to ensure that the potential for harm to public health and safety and to the environment is minimized to acceptable levels, taking into consideration the location, the surroundings, the intended use of the property, the potential exposure to the discharge, and the surrounding ambient conditions, whether naturally occurring or man-made. [N.J.S.A. 58:10B-12(a) (emphasis added).]
In a policy paper published when the Brownfields Act was enacted, the DEP stated:
"Pursuant to the 1998 Brownfields Act, this Department will be developing remediation standards which will make certain that the potential for harm to public health and safety, and to the environment, is minimized to acceptable levels, taking into account certain factors, including the intended use of the property. N.J.S.A. 58:10B-12. Important to those who wish to cleanup a Brownfield site and transform it into a new business site - whether the question concerns how clean the soil must be, or how clean the water must be - the current, planned or potential site use will be considered. ["The Greening of New Jersey's 'Brownfields' - As Viewed By the Department of Environmental Protection," seminar material for the program, "1998 Brownfields Law," sponsored by the New Jersey Institute of Continuing Legal Education" (emphasis added).]
Thus developers and the regulated business community expectantly awaited the DEP's adoption of regulatory changes authorizing more flexible, risk-based cleanup standards for individual Brownfield sites, especially those where groundwater was not being used, and not planned to be used, for drinking water.
The DEP's adoption of more flexible, risk based minimum cleanup standards for Brownfield sites did not follow. On February 3, 2003, DEP adopted N.J.A.C. 7:26E-1.13 setting forth minimum groundwater and surface water cleanup standards for the cleanup of contaminated property under all New Jersey environmental laws. The new regulation incorporated the numeric cleanup standards of the Ground Water Quality Standards, N.J.A.C. 7:9-6, Appendix, Tables 1 and 2. These numeric cleanup levels have statewide application without regard to specific conditions, uses or risks posed to public at a particular site. In adopting N.J.A.C. 7:26E-1.13, the DEP rejected proposals to adopt more flexible groundwater and surface water cleanup requirements based on site risk assessments. 34 N.J.R. 171 (Jan. 7, 2002). As stated in the new rule, "the Department will not accept alternate numeric groundwater remediation standards developed based on a site-specific risk assessment." N.J.A.C. 7:26E-1.13(d). In response to numerous public comments, the DEP reasoned that to address site-specific conditions, flexibility already existed in the "narrative standards" of N.J.A.C. 7:26E-1.13(b)2, and existing site remediation requirements - the question of selecting an appropriate remedy or when and how to achieve the numeric Groundwater Quality Cleanup Standards. 35 N.J.R. 710, 727-28 (Feb. 3, 2003)
The numeric cleanup standards of N.J.A.C. 7:26E-1.1.3 were challenged in Court by industry as inconsistent with the language and intent of the Brownfields Act. In the case entitled In re Adoption of N.J.A.C. 7:26E-1.13, 377 N.J. Super. 78 (App. Div. 2005), the Appellate Division rejected the legal challenge, deferring to the agency's perceived experience and judgment with regard to such specialized, scientific matters. Although the Court found the arguments of the litigants "plausible" given the language of the Brownfield Act, it held they failed to show that the new regulation violated the statute with clearly convincing evidence.
Granting an application of the litigants, the Supreme Court of New Jersey agreed to hear the matter. Numerous environmental, commercial and industry groups contributed briefs as friends of the court. The Supreme Court's decision has arrived and the numeric groundwater and surface water cleanup standards of the DEP remain in effect. On February 28, 2006, the Supreme Court affirmed the decision of the Appellate Division for substantially the reasons expressed in the lower Court opinion.
While the Supreme Court opinion may be a disappointment, the decision whether to invest in the cleanup and redevelopment of a Brownfield site should not turn on this latest legal development. Builders considering the purchase and redevelopment of Brownfield sites should evaluate a panoply of other significant legal, financial and regulatory incentives available under the Brownfields Act and associated State and Federal regulatory programs making redevelopment of Brownfield sites far more attractive than in years past.
Nielsen V. Lewis, the partner-in-charge-of Hill Wallack's Environmental Practice Group and a member of its Land Use Division, concentrates his law practice on environmental law, solid and hazardous waste law, insurance law and land use, including complex environmental litigation. A frequent writer and lecturer on environmental topics, Mr. Lewis was a panelist at the recent seminar, "Brownfield Redevelopment, Natural Resources Damages & Insurance Update 2005," sponsored by the New Jersey Institute of Continuing Legal Education. For more information on DEP's Brownfield redevelopment program and incentives, or advice on issues arising out of Brownfield sites, Mr. Lewis may be contacted directly at (609) 734-6308 or emailed at nvl@hillwallack.com.
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