NJ Appeals Court Rules Municipal Courts Can Enforce Spill Act Penalties

NJ Appeals Court Rules Municipal Courts Can Enforce Spill Act Penalties

Before the close of 2019, the Appellate Division held that the New Jersey Department of Environmental Protection (DEP) can enforce the New Jersey Spill Compensation and Control Act (Spill Act) in municipal courts. The ruling in New Jersey Department of Environmental Protection v. Alsol Corporation is significant given that the NJDEP is increasingly seeking to enforce Spill Act penalties in the municipal courts.

New Jersey Spill Act

The Spill Act provides that “any person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs no matter by whom incurred.” The statute, N.J.S.A. 58:10-23.11f(a)(2)(a), also authorizes a private cause of action by a responsible party for contribution from other responsible parties.

Of particular relevance to the Appellate Division decision, the Spill Act provides that any person who violates a provision of the Spill Act or who fails to pay a civil administrative penalty will be subject to a civil penalty not to exceed $50,000 per day for each violation and that “any penalty incurred under this subsection may be recovered with costs in a summary proceeding… in the Superior Court or a municipal court.” The Spill Act further provides that the “Superior Court and the municipal courts shall have jurisdiction to impose a civil penalty for a violation…in accordance with the procedures set forth in the Penalty Enforcement Law of 1999.”

Facts of New Jersey Department of Environmental Protection v. Alsol Corporation

The NJDEP filed a complaint against Alsol Corporation (Alsol) in the Milltown Municipal Court, using the “Special Form of Complaint and Summons” prescribed by the Administrative Director of the Courts, for failure to remediate a property.

When the matter came before the Milltown Municipal Court, Alsol moved to dismiss the summons for lack of subject matter jurisdiction. Alsol argued that municipal courts do not have the authority to adjudicate the merits of an enforcement action brought by the DEP involving alleged violations of the Spill Act.

The municipal court judge concluded that N.J.S.A. 58:10- 23.11u(d) only confers municipal courts with jurisdiction to enforce civil penalties “where a finding of liability has already been adjudicated.” The municipal court judge also rejected the DEP’s interpretation of N.J.S.A. 58:10- 23.11u(d) and held that municipal courts’ jurisdiction in matters arising out of the Spill Act are limited to conducting summary proceedings to enforce “a penalty previously imposed by either the administrative law court or the [S]uperior [C]ourt.” The NJDEP appealed to the Law Division, which reversed the municipal court’s decision.

Appellate Division Decision

The Appellate Division affirmed. “We conclude municipal courts have jurisdiction pursuant to N.J.S.A. 58:10-23.11u(d) to impose civil penalties under the Spill Act in a summary proceeding conducted pursuant to the Penalty Enforcement Law of 1999, N.J.S.A 2A:58-10 to -12,” the court held.

In reaching its decision, the Appellate Division found that the plain reading of the Spill Act authorizes NJDEP to bring a penalty enforcement action. The court explained:

[A] plain reading of the text in N.J.S.A. 58:10-23.11u(d) reveals the Legislature intended to authorize the DEP to bring a penalty enforcement action against “[a]ny person who violates a provision of [N.J.S.A. 58:10-23.11], or a court order issued pursuant thereto, or who fails to pay a civil administrative penalty in full or to agree to a schedule of payments.”

The appeals court highlighted that it reached a similar conclusion in a prior decision involving the Solid Waste Management Act. It also noted that the Supreme Court endorsed the NJDEP’s approach in Rule 7:2-1(h) by “making this type of summary action cognizable in the municipal courts using the Special Summons the DEP used here.”

Key Takeaway

Potentially responsible parties under the Spill Act should be aware that DEP may seek to pursue Spill Act penalties in municipal court. Given that the Appellate Division has sanctioned the approach, the agency may opt for this approach with greater frequency.

If you have any questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Dan McKillop, or the Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.