Natural resource damages are intended to compensate the public for the injury to, destruction of, or loss of natural resources. In many cases, these environmental contamination lawsuits can generate large windfalls for the state, with settlements often totaling hundreds of millions of dollars. In the past, funds were used for non-environmental purposes, such as balancing the state budget, which drew the ire of environmental groups and the public.
In 2017, New Jersey voters approved an amendment to the New Jersey Constitution (Article VIII, Section II, paragraph 9) that mandates funds from environmental settlements must be reinvested into anti-pollution efforts. Specifically, all State moneys received from settlements and awards in cases of environmental contamination relating to natural resource damages must be used for certain environmental purposes, which include to repair, replace, or restore damaged natural resources or to preserve the State’s natural resources. The amendment further provides that moneys must be spent in an area as close as possible to the geographical area in which the damage occurred.
Legislation Earmarks Funds for Natural Resource Restoration Projects
Senate Bill 3310 earmarks settlement monies from two lawsuits involving natural resource damages. The first is N.J. Dep’t of Env. Protection v. Exxon Mobil Corp., 453 21 N.J. Super. 588 (Law Div. 2015), which the Murphy administration maintains is not subject to the 2017 amendment. The bulk of the controversial $225 million settlement with Exxon Mobil was already diverted or used to pay legal fees.
Under the bill, $50 million would be deposited as natural resource damages into the Hazardous Discharge Site Cleanup Fund and appropriated to the DEP for: direct and indirect costs of remediation, restoration, and cleanup; costs for consulting, expert, and legal services incurred in pursuing claims for damages; grants and loans to local governments; and grants to nonprofit organizations.
Senate Bill 3310 also appropriates more than $110 million from funds recovered in connection with claims made by the State in N.J. Dep’t of Env. Protection v. Atlantic Richfield Co., et al., No. 37 08 CIV 00312 (S.D.N.Y.), which involved groundwater pollution caused by three oil companies. Those natural resource damages revenues would be deposited in the Natural Resources Damages – Constitutional Dedication account. The bill identifies several projects to receive funds, including Cape May Point Saltwater Intrusion Mitigation and Habitat Restoration ($30 million); Atlantic White Cedar Forest Watershed Restoration ($19 million); and Hudson-Raritan Estuary Water Quality Infrastructure/CSO Improvements ($10 million).
While environmental groups are happy that funds are finally going towards restoration efforts, they have raised concerns that the monies are not dedicated to areas damaged by the pollution. “The bill is too vague on where the money is going to go,’’ said Jeff Tittel, director of the New Jersey Sierra Club. “We want to make sure the funding for restoration projects is going directly to areas impacted by Exxon.’’
Increased Risk for NRD Suits
Additional NRD suits are likely on the horizon. In August, for the first time in a decade, New Jersey filed six new lawsuits seeking to recover natural resource damages. As detailed in greater depth in a prior post, Attorney General Gurbir S. Grewal and Department of Environmental Protection (DEP) Commissioner Catherine R. McCabe called it a “new day” for environmental enforcement in New Jersey.
“This is the largest single-day environmental enforcement action in New Jersey in at least a decade,”Attorney General Gurbir Grewal said in a press statement. “Today is just the beginning. We are going to hold polluters accountable – no matter how big, no matter how powerful, no matter how long they’ve been getting away with it. And we’re sending a message to every company across the state: if you pollute our natural resources, we are going to make you pay.”
The uptick in NRD lawsuits strongly suggests that the Murphy Administration plans to aggressively pursue natural resource damages. Given that such damages can often outweigh the costs of remediation, businesses should closely monitor the state’s new NRD initiative and contact a knowledgeable New Jersey environmental law attorney to discuss any concerns.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, at 201-806-3364.
Dissolving Your Business: Essential Legal Steps to Protect Your Interests
If you’re considering closing your business, it’s crucial to understand that simply shutting your doors does not end your legal obligations. Unless you formally dissolve your business, it continues to exist in the eyes of the law—leaving you exposed to ongoing liabilities such as taxes, compliance violations, and potential lawsuits. Dissolving a business can seem […]
The Role of Corporate Restructuring in Mergers & Acquisitions
Contrary to what many people think, corporate restructuring isn’t all doom and gloom. Revamping a company’s organizational structure, corporate hierarchy, or operations procedures can help keep your business competitive. This is particularly true during challenging times. Corporate restructuring plays a critical role in modern business strategy. It helps companies adapt quickly to market changes. Following […]
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public
Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]
Understanding Chattel Paper: A Key Component in Secured Transactions
Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]
For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]
Supreme Court and Title VII: Implications for Reverse Discrimination
Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
