Precedential Ruling in DEP Decision on ISRA DQE Exemption

April 22, 2015
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Significant Victory for Client R&K Associates, LLC in a Precedent-Setting Case

Scarinci Hollenbeck has announced a significant victory for its client R&K Associates, LLC in a precedential case tried by John M. Scagnelli, Partner and Chair of the Environmental and Land Use Law Group, together with William A. Baker, Esq. also of that group. The case R&K Associates, LLC v. Des Champs Laboratories, Inc. involved the availability of an ISRA (Industrial Site Recovery Act) De Minimis Quantity Exemption (DQE) to Des Champs Laboratories, Inc. which sold its Livingston, New Jersey property to R&K in 1997. The matter was tried before an OAL administrative law judge and decided by NJDEP Commissioner Martin who issued a Final Decision in favor of R&K.

The ruling in this matter has far-reaching implications for owners of industrial establishments seeking ISRA DQEs as well as for environmental consultants who perform assessments of their facilities.

By way of background, at the time of the sale, Des Champs was granted NFA Approval based on a Negative Declaration stating there was no contamination of the property. After finding that the property was the source of contamination of Livingston’s drinking water wells, the NJDEP rescinded that NFA approval in 2008. Then, 12 years after it sold the property, Des Champs filed for an ISRA DQE Exemption. The case went up to the Appellate Division twice, and was remanded for hearing in 2014 before Judge Gail Cookson who issued an initial decision ruling in favor of R&K on several grounds. Recently, in his Final Decision, NJDEP Commissioner Bob Martin ruled that (i) Des Champs had no standing to apply for an ISRA DQE as a former owner, 12 years after leaving the property; (ii) Des Champs had waived its legal right to apply for an ISRA DQE exemption since it initially obtained ISRA approval through a different route; and (iii) Des Champs had not provided documentary and witness information to the environmental consultant who initially performed the Preliminary Assessment of the Des Champs facility.

The ruling in this matter has far-reaching implications for owners of industrial establishments seeking ISRA DQEs as well as for environmental consultants who perform assessments of their facilities.

Mr. Scagnelli explained that “this case is significant as it is the first case that discusses the standards for documentary as well as witness proof of a party’s entitlement to a DQE. The decision makes it clear that the DQE is not an automatic paper exemption – you have to back it up.”

He continued, “The case sets forth the standard of care a party and its environmental consultant need to use in performing an environmental preliminary assessment, and explained the importance of the DEP’s decision. Parties who initially select one way to comply with ISRA statute when selling a property or business cannot – years later – assert that they can comply in a different way if the DEP determines their initial means of compliance was invalid.”


About John Scagnelli:
John M. Scagnelli environmental law practice encompasses the entire environmental law field, including environmental compliance, environmental litigation, environmental auditing, environmental permitting and environmental counseling. He serves as environmental counsel for banks and lending institutions, commercial and industrial companies, states and municipalities, real estate development organizations, and other organizations. His environmental work includes remediation projects and litigation relating to state environmental statutes.

About William Baker:
William A. Baker concentrates his practice in the area of environmental law, including environmental regulatory compliance, environmental permitting, environmental litigation, environmental due diligence and environmental counseling.

About the Scarinci Hollenbeck Environmental Litigation Group:
Scarinci Hollenbeck’s attorneys have significant experience in representing clients in environmental lawsuits in federal and state courts and in proceedings before administrative agency tribunals. They are proficient at handing broad spectrum of environmental contamination and toxic tort claims, including remediation and litigation under the Resource Conservation and Recovery Act (RCRA), the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) and the New Jersey Spill Compensation and Control Act.