Court Holds That NJDEP's Informal Determination Not to Pursue PRP for Natural Resources Damages Cannot Later Be Reversed


A federal District Court in New Jersey recently ruled that the New Jersey Department of Environmental Protection (“NJDEP”) waived its rights to pursue Natural Resource Damages (“NRDs”) as a result of a letter sent to the defendant indicating that NJDEP did not intend to pursue the defendant for NRDs. FMC Corp. v. American Cyanamid, No. 01-0476 (D.N.J. 9/29/10). FMC involved a site in Franklin Township, New Jersey (the “Site”), which was placed on the federal Superfund National Priorities List in 1990. FMC Corp. (“FMC”) and the United States initiated settlement negotiations in 1997 regarding environmental remediation of the Site. During negotiations, FMC, in order to determine the extent of its liability at the Site for the environmental contamination, contacted the New Jersey Attorney General’s Office. Subsequently, the Deputy Attorney General for the State wrote to FMC in 2003 setting forth the costs the State intended to pursue for the Site. The letter also attached a memorandum from the NJDEP’s Office of Natural Resource Restoration indicating that the State would not pursue FMC for NRDs.

The State’s decision not to pursue FMC for NRDs was based on NJDEP’s policy adopted in the late 1990s that excluded on-site groundwater contamination from the assessment of NRDs in instances where there was no off-site groundwater contamination and where no other natural resources were impacted by the discharge of hazardous substances. This policy was in effect when the Deputy Attorney General wrote to FMC informing FMC that the State would not pursue FMC for NRDs.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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