Scarinci Hollenbeck attorneys John M. Scagnelli and William A. Baker of the firm’s Environmental & Land Use Law practice group achieved a successful result on behalf of R&K Associates, LLC (“R&K”) in a case tried before the Superior Court of New Jersey Appellate Division, upholding a prior decision by Katherine R. McCabe, Commissioner of the NJDEP. The case is captioned R&K Associates, LLC v. New Jersey Department of Environmental Protection, Site Remediation Compliance and Enforcement and Des Champs Laboratories, Inc. This decision was the fourth time the case had been to the Appellate Division, in addition to an Office of Administrative Law (“OAL”) trial and OAL hearing.

The case involves the interpretation of the New Jersey Industrial Site Recovery Act (“ISRA”) de minimis quantity exemption statute.  R&K Associates, LLC is the owner of a property with historic groundwater contamination from prior operations conducted there.  Des Champs Laboratories (“Des Champs”), the prior property owner, sold the property to R&K in 1997 and obtained ISRA compliance with a negative declaration NFA approval.  In 2008, NJDEP rescinded Des Champs’ NFA approval and ordered Des Champs to undertake groundwater remediation. Des Champs argued that it qualified retroactively for an ISRA de minimis quantity exemption and did not have to remediate the groundwater.  The Administrative Law Judge (“ALJ”) in her Decision, and NJDEP Commissioner Katherine R. McCabe in her Final Decision, each ruled that Des Champs failed to meet its burden of proof by a preponderance of the evidence to show that it met the criteria for an ISRA de minimis quantity exemption.

Des Champs appealed from the NJDEP’s decision denying Des Champs a de minimis quantity exemption under ISRA. On appeal, the court affirmed, finding no basis to overturn the ALJ's or DEP's decisions or the agency’s administrative expertise. Des Champs had argued that the ALJ was bound by her original findings of fact that concluded Des Champs met the DQE threshold for use of hazardous substances during its operations. However, the Court rejected that argument and noted that Des Champ’s failure to meet its burden of proof fell at its feet having agreed at the outset of the remanded proceeding below that no further evidence was required to be introduced. The Court further noted the ALJ’s determination (as argued by R&K) that Des Champs had engaged in selective disclosure of information.