september 2000

Natural Resource Damage Regulations of the Department of Environmental Protection (DEP) Have Been Upheld by the New Jersey Appellate Court

BACKGROUND

DEP adopted regulations in May, 1997 authorizing the state to seek compensation for injuries to natural resources from responsible parties. Although an industry association challenged the regulations, on April 17, 2000, the state Appellate Court affirmed their applicability.

As a result, here are some important issues to keep in mind:

The regulations now require that an evaluation of potential Natural Resource Damages be completed as part of the cleanup process.

When Natural Resource Damages have been identified, DEP plans to issue a No Further Action Letter requiring that Natural Resource Damages be resolved.

DEP will seek restoration of natural resources, rather than monetary damages.

DEP will not seek Natural Resource Damages if groundwater contamination does not extend offsite:

All open cases may be subject to evaluation of Natural Resource Damages by DEP.

DEP advises that cases in which No Further Action Letters have already been issued will not be re-opened.

WE RECOMMEND

You must consider the potential effect of Natural Resource Damages in negotiating real estate and business transactions, as well as in negotiating settlements of environmental disputes and insurance claims. You must also examine the potential impact of Natural Resource Damages on ongoing investigation and cleanups.

If you have any questions concerning the Natural Resource Damages, please contact Jay A. Jaffe.