(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued February 19, 1997 -- Decided May 15, 1997
GARIBALDI, J., writing for a majority of the Court.
The issue in this appeal is whether the Township of Voorhees is liable under the Sanitary Landfill
Facility Closure and Contingency Fund Act (the Closure Act) as an “owner” and, therefore, barred from
seeking remediation expenses from that Act's Contingency Fund (the Fund).
During the l960's and early l970's, Millard Eply, president of Buzby Brothers Material Corporation
(Buzby), operated a sanitary landfill on a lot owned by Buzby, known as the Buzby Brothers Landfill.
During its years of operation, Voorhees sent waste to the landfill.
In December 1977, Voorhees purchased one of the lots from Buzby for $1.00 with the expectation of
building a public park. Buzby had closed the landfill at least five years earlier. However, unbeknownst to
Voorhees, during its years of operation the landfill had accepted hazardous waste for disposal on the lot, in
spite of the fact that the Department of Environmental Protection (DEP) had permitted the landfill to accept
only municipal, bulky, and non-chemical industrial wastes.
In l982, ten years after the landfill had been closed by Buzby and five years after Voorhees
purchased it, the Legislature passed the Closure Act, which imposed liability on “owners or operators” of
sanitary landfills for costs related to the improper operation or closure of those facilities. The Closure Act
also created the Contingency Fund to provide recoupment of remediation expenses by eligible parties.
In October 1986, the DEP issued a draft New Jersey Pollutant Discharge Elimination System
(NJPDES) permit to Voorhees for the lot. The DEP advised Voorhees that, if the permit were finalized, the
Township would be required to install monitoring wells around the perimeter of the lot to evaluate potential
discharge of contaminants from the former landfill. This was the first notice Voorhees had that the landfill
might have environmental problems.
Thereafter, Voorhees entered into an Administrative Consent Order with the DEP and spent several
hundred thousand dollars on remedial measures. It then filed a claim with the Fund seeking recoupment of
the money spent on remediation, asserting that it had suffered damages because the landfill had been
improperly operated and closed. The Environmental Claims Administration (ECA) denied the claim,
reasoning that Voorhees was ineligible to recover damages because it was an “owner” of a sanitary landfill
and, therefore, itself jointly and severally liable for closure costs under the Act.
Voorhees appealed the ECA's ruling to the Office of Administrative Law. Despite the DEP's
motion for summary disposition, the Administrative Law Judge (ALJ) found that Voorhees did not fall
within the literal meaning of “owner or operator” under the Closure Act. Furthermore, the ALJ found that,
even if the language of the Act were debatable, the Supreme Court's reasoning in prior case law had
excluded purchasers of closed landfills from the definition of “owner.”
Thereafter, in l994, the DEP adopted amended rules for the processing of Fund claims, which, in
effect, excluded Voorhees's claim for reimbursement. Voorhees appealed the validity of the l994 regulations,
but its request to stay the appeal until the conclusion of the administrative hearing was denied.
Following the adoption of the new regulations, the DEP renewed its motion to the ALJ for summary
disposition of Voorhees's claim. The ALJ granted the motion, finding the new regulations applicable.
Voorhees then filed exceptions with the Commissioner, who modified the ALJ's decision, finding that, even
absent the new regulations, Voorhees was an “owner” under the Closure Act. Voorhees appealed not only
from the Commissioner's final decision, but also from the DEP's adoption of the new regulations. The
Appellate Division consolidated both matters.
The Appellate Division found that Voorhees was not an owner within the intendment of the Closure
Act and that its remediation costs should be recouped from the Fund. In turn, the Fund would acquire
subrogation rights from the current property owner against the former owner or operator of the landfill.
The Supreme Court granted the DEP's petition for certification, which was limited to the issue of
whether Voorhees was entitled to recover the cost of remediation under the Closure Act.
HELD: Because Voorhees never owned or operated the landfill and never took part in any closure activities,
it is not liable for cleanup costs and is entitled to reimbursement for such costs from the Contingency Fund.
1. When the Legislature passed the Closure Act, it emphasized the Act's broad parameters in its legislative
findings and declarations. (pp. 8-9)
2. Because the Fund is liable for damages resulting from the operation or closure of a sanitary landfill, the
Closure Act contains mechanisms for generating revenue from the owners or operators from which the Fund
compensates claimants harmed by improper closure or operation. (pp. 9-10)
3. The Closure Act provides protection for post-enactment purchasers of property that has been used as a
landfill by requiring that a contract for sale of such property specifically state the fact and period of time
during which the property was used as a landfill. (pp. 10-11)
4. In construing a statute, the primary task is to effectuate the legislative intent in light of the language used
and the objectives sought to be achieved. (pp. 11-12)
5. The Closure Act is a cost-spreading mechanism designed to impose cleanup costs on the landfill industry.
Thus, the Legislature intended the Fund to be available to reimburse the current owner or claimant for
remediation of improper landfill closure and to then obtain a claim against the owner or operator of the
landfill. Such an interpretation encourages owners to take prompt and appropriate actions to remedy
environmental problems that threaten the public welfare. (pp. 12-16)
6. The purpose of the provision of the Act requiring that a potential purchaser of land be specifically
advised that the land was formerly used as a landfill is to ensure that purchasers knowingly assume
responsibility for potential liability. (pp. 16-17)
Judgment of the Appellate Division is AFFIRMED.
JUSTICE O'HERN filed a separate dissenting opinion in which JUSTICE POLLOCK joins. Justice
O'Hern considered the majority's decision to transform a fund created to compensate the innocent victims
of past unsafe landfill practices into a windfall for dump owners at the expense of the taxpayers. He further
believed that the Court's opinion would force a circularity of actions.
CHIEF JUSTICE PORITZ and JUSTICES STEIN and COLEMAN join in JUSTICE
GARIBALDI's opinion. JUSTICE O'HERN filed a separate dissenting opinion in which JUSTICE
POLLOCK joins. JUSTICE HANDLER did not participate.
SUPREME COURT OF NEW JERSEY
A-
108 September Term 1996
IN THE MATTER OF THE ADOPTION
OF N.J.A.C. 7:1I
-----------------------------
TOWNSHIP OF VOORHEES,
Petitioner-Respondent,
v.
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
ENVIRONMENTAL CLAIMS
ADMINISTRATION,
Respondent-Appellant.
Argued February 19, 1997 -- Decided May 15, 1997
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
291 N.J. Super. 183 (1996).
Eileen P. Kelly, Deputy Attorney General,
argued the cause for appellant (Peter G.
Verniero, Attorney General of New Jersey,
attorney; Mary C. Jacobson, Assistant
Attorney General, of counsel).
Richard M. Hluchan argued the cause for
respondent (Levin & Hluchan, attorneys;
Richard S. Morrison, on the brief).
The opinion of the Court was delivered by
GARIBALDI, J.
This appeal involves the Township of Voorhees's suit to
recover environmental remediation expenses under the Sanitary
Landfill Facility Closure and Contingency Fund Act (the Closure
Act), N.J.S.A. 13:1E-100 to -116. The primary issue is whether
Voorhees is liable under the Closure Act as an "owner" and,
therefore, barred from seeking remediation expenses from that
Act's Contingency Fund (the Fund). The Appellate Division held
that Voorhees was not an owner within the intendment of the
Closure Act and, therefore, not barred from applying for
statutory damages. Matter of Adoption of N.J.A.C. 7:1I,
291 N.J.
Super. 183 (App. Div. 1996).
During the 1940's, Buzby Brothers Materials Corporation (Buzby) owned and operated a sandmining operation in Voorhees, located on adjacent tracts of land designated as Lot 4 (37 acres) and Lot 33 (19 acres). In March 1959, Buzby initiated a landfilling project on portions of Lot 4 that had been sandmined. The general idea was for the landfilling to follow the sandmining.
In the 1960's and early 1970's, the president of Buzby, Millard Eply, operated a sanitary landfill on Lot 4, which became known as the "Buzby Brothers Landfill." During its years of operation, Voorhees sent waste to the landfill. In 1966, Lot 33 was purchased from Buzby by the RCA Corporation (RCA). A few years later, pursuant to a lease agreement, Buzby continued sandmining and commenced landfilling on Lot 33.
The Department of Environmental Protection (DEP) permitted
the Buzby Brothers Landfill to accept municipal, bulky, and non
chemical industrial wastes. Buzby Brothers, however, also
accepted hazardous wastes for disposal.
After Millard Eply died in 1969, the operation of the
landfill was taken over by Margaret Eply, his wife and an officer
of the Buzby corporation. Sometime in 1972, all landfilling
operations ceased on Lot 4. Landfilling operations continued,
however, on Lot 33, until it reached its capacity in l978.
In December 1977, Voorhees purchased Lot 4 from Margaret
Eply for $1.00 with the expectation of building a public park.
At the time of the purchase, the landfill had been closed for at
least five years. Although aware that Lot 4 had been used as a
sanitary landfill, Voorhees believed, and had no reason to doubt,
that the landfilling operation had been properly closed in
accordance with existing laws and regulations. Furthermore,
Voorhees had no reason to believe that the lot would experience
environmental problems. For several years after the purchase,
Lot 4 remained undeveloped and vacant.
In 1982, ten years after the landfill had been closed and
five years after Voorhees purchased it, the Legislature passed
the Closure Act, N.J.S.A. 13:1E-100 to -116, which imposed
liability on "owners or operators" of sanitary landfills for
costs related to the improper operation or closure of those
facilities. The Closure Act also created the Contingency Fund to
provide recoupment of remediation expenses by eligible parties.
N.J.S.A. 13:1E-105.
On October 30, 1986, pursuant to the Water Pollution Control
Act, N.J.S.A. 58:10A-1 to -20, the DEP unilaterally issued a
draft New Jersey Pollutant Discharge Elimination System (NJPDES)
permit to Voorhees for Lot 4. The draft permit advised Voorhees
that, if the permit were finalized, the Township would be
required to install monitoring wells around the perimeter of Lot
4 to evaluate potential discharge of contaminants from the former
landfill. Receipt of the draft permit was the first notice
Voorhees had that the landfill might have environmental problems.
The DEP later issued a final permit, only to rescind it based on
our holding in Vi-Concrete Co. v. New Jersey Department of
Environmental Protection, ll5 N.J. l, 3-4 (l989).See footnote 1
Although Vi-Concrete was pending, Voorhees entered into an
Administrative Consent Order with the DEP and spent several
hundred thousand dollars on remedial measures, including the
installation and maintainance of appropriate monitoring wells.
Thereafter, Voorhees filed a claim with the Sanitary Landfill
Contingency Fund seeking recoupment of the money spent on
remediation. Voorhees asserted that it suffered damages because
the landfill was improperly operated and closed.
The Environmental Claims Administration (ECA), the part of
the DEP responsible for administering the Fund, denied the claim.
The ECA reasoned that Voorhees was ineligible to recover damages
because the Township was an "owner" of a sanitary landfill, and
therefore, was itself jointly and severally liable for closure
costs under N.J.S.A. 13:1E-103.
In reaching that conclusion, the ECA relied on the fact that
N.J.S.A. 13:1E-102(b) defines "owner or operator" as "every owner
of record of any interest in land whereon a sanitary-landfill
facility is or has been located." The ECA also denied Voorhees's
request for attorney's fees because such costs did not constitute
damages within the meaning of N.J.S.A. 13:1E-106(a) and N.J.A.C.
7:1I-4.
Voorhees appealed the ECA's ruling to the Office of
Administrative Law. The DEP moved for summary disposition,
asserting that Voorhees qualified as an "owner" under the plain
meaning of the Closure Act. The Administrative Law Judge (ALJ)
denied the DEP's motion for summary decision, finding that
Voorhees did not fall within the literal meaning of "owner or
operator" under the Closure Act. The ALJ stated that, even if
the language was debatable, our reasoning in Vi-Concrete, supra,
excluded purchasers of closed landfills from the definition of
"owner."
In 1994, the DEP responded by adopting amended rules for the
processing of Contingency Fund claims. Central among those
regulations was N.J.A.C. 7:1I-1.5, which included a clarification
of the definition of "owner" contained in N.J.S.A. 13:1E-102(b).
Specifically, N.J.A.C. 71I-1.5 defined "owner" to include
entities owning property "whereon a sanitary landfill is located,
has been located, had been located, or at any time was located."
N.J.A.C. 7:1I-1.5 (emphasis added). Also, N.J.A.C. 7:1I-1.5
defined "damages" such that attorneys fees incurred in filing
claims and participating in administrative hearings were not
recoverable.
26 N.J.R. 1116.
The amended regulations also contained a "Construction and
Applicability" section. See N.J.A.C. 7:1I-1.2(b). That section
provided that the 1994 regulations "shall apply to the processing
of all claims which have not been paid, settled, denied or the
subject of a final decision by the Commissioner of the Department
on or before February 22, 1994, notwithstanding the date upon
which any such claim was filed with the Department."
26 N.J.R. 1115. Voorhees appealed the validity of the 1994 regulations,
but its request to stay the appeal until the conclusion of the
administrative hearing was denied.
Following the adoption of the new regulations, the DEP
renewed its motion to the ALJ for summary disposition of
Voorhees's claim. The ALJ found the newly adopted regulations
applicable to Voorhees and granted the DEP's motion. Voorhees
then filed exceptions with the Commissioner who determined that
the regulations were created for the "specific reason of
clarifying existing law." The Commissioner modified the ALJ's
initial decision, stating that "even absent the new regulations
Voorhees is an `owner' under the Closure Act." Voorhees appealed
not only from the Commissioner's final decision, but also from
the DEP's adoption of the new regulations. The Appellate
Division consolidated both matters.
The Appellate Division, relying on Vi-Concrete, supra, found
that "Voorhees is not an owner within the intendment of the
Closure Act." Matter of Adoption of N.J.A.C. 7:1I,
291 N.J.
Super. 183, 187 (App. Div. l996).See footnote 2 It further found that this
did not resolve the matter because the "statutory language
fosters more than one possible meaning." Id. at l92. Examining
the legislative intent, the panel determined that "the Closure
Act reflects a goal to subject to statutory damages those persons
or corporations that benefitted from the operation of the
sanitary landfill." Ibid. Specifically, the Appellate Division
concluded that
[t]he legislative objective then was to impose
responsibility upon an owner who enabled the
improper closure to occur. The legislation,
however, does not suggest that any person who
acquired title to a closed sanitary landfill prior
to the enactment of the Closure Act should be
liable for statutory damages.
Applying our reasoning in Vi-Concrete, the panel concluded that, when the DEP requires a pre-Act purchaser of a closed landfill to install monitoring wells on its property, those costs
should be recouped from the Contingency Fund. Id. at 193-94.
The Appellate Division pointed to our statement in Vi-Concrete,
that "the `claimant' for purposes of the Closure Act would be the
current property owner, from whom DEP would acquire subrogation
rights against the owner or operator of the landfill." Id. at
194 (quoting Vi-Concrete, supra, 115 N.J. at 15). Consequently,
the Appellate Division found that Voorhees was not barred from
applying for statutory damages. Id. at 194.
We granted the DEP's petition for certification.
146 N.J. 565 (1996).
As in Vi-Concrete, supra, 115 N.J. at 6, the question before this Court is one of statutory construction. We must decide whether Voorhees, which purchased a sanitary landfill prior to the enactment of the Closure Act, is entitled to recover remediation costs under that Act.
In 1982, the Legislature passed the Closure Act to supplement the Solid Waste Management Act, N.J.S.A. 13:1E-1 to
-37. The Legislature emphasized the Act's broad parameters in its legislative findings and declarations:
[T]he proper closure of sanitary landfills is essential to the public health, safety and welfare; that closure activities can require capital expenditures at a time when revenues collected by sanitary landfill facilities are minimal or nonexistent; and that it is necessary to guarantee that adequate funds are reserved to insure such closure.
The Legislature further finds and declares that
the improper operation or closure of sanitary landfill
facilities can result in the contamination of surface
and ground waters . . . that the migration of methane
gas from sanitary landfill facilities poses a
significant threat to life and property; that
compensation for the damage resulting from improper
operation or closure is, at best, inadequate; and that
it is necessary to provide a mechanism for the prompt
and adequate compensation for these damages.
To effectuate those goals, the Legislature created the
"Sanitary Landfill Facility Contingency Fund", which is
administered by the ECA. In part, N.J.S.A. 13:1E-105 states that
the Fund was "established as a nonlapsing, revolving fund in the
Department of Environmental Protection. . . . [It is] credited
with all tax revenues collected by the division pursuant to
section 5." N.J.S.A. 13:1E-105. Moreover, the Fund is strictly
liable for all direct and indirect damages, no matter by whom
sustained, proximately resulting from the operations or closure
of any sanitary landfill. N.J.S.A. 13:1E-106(a).
Because the Fund is liable for such damages, the Closure Act
contains mechanisms for generating revenue. The Act provides
that "[e]very owner or operator of a sanitary landfill facility
shall be jointly and severally liable for the proper operation
and closure of the facility, as required by law, and for any
damages, no matter by whom sustained, proximately resulting from
the operations or closure." N.J.S.A. 13:1E-103. Under the Act,
`Owner or operator' means and includes, in
addition to the usual meanings thereof, every
owner of record of any interest in land whereon a
sanitary landfill facility is or has been located,
and any person or corporation which owns a
majority interest in any other corporation which
is the owner or operator of any sanitary landfill
facility.
That definition is not only important in determining
liability to the Fund, but is central in allocating
responsibilities under the Closure Act. For example, "owners and
operators" are taxed for the amount of waste they accept. See
N.J.S.A. l3:lE-l04(a). "Owners or operators" are also required
to deposit money in escrow every month reflecting the tonnage of
materials received the preceding month, see N.J.S.A. l3:lE-l09(a), and may be required to file an annual audit. See
N.J.S.A. l3:lE-ll0. Those tax and escrow provisions apply to
sanitary landfill facilities in operation after January l, l982
(the effective date of the Closure Act). Johnson Machinery Co.,
Inc. v. Manville Sales Corp.,
248 N.J. Super. 285, 300 (App. Div.
l99l).
From revenue collected, the Fund provides compensation for
"claimants" harmed by the improper operation or closure of
landfills, regardless of whether the landfill was in operation
before or after the Act's effective date. Vi-Concrete, supra,
115 N.J. at 13-15. In return for providing this compensation,
however, the DEP acquires the claimant's cause of action.
N.J.S.A. 13:1E-111.
The Closure Act also provides protection for post-enactment
purchasers of property that has been used as a landfill. In
part, N.J.S.A. 13:1E-116 provides:
No person shall contract to sell any land which has
been utilized as a sanitary landfill facility at any
time prior to the effective date of [the Closure Act]
unless the contract of sale . . . shall state the fact
and the period of time that the land was so utilized.
A purchaser who does not receive the required notice in the contract of sale has the option of voiding the contract. N.J.S.A. 13:1E-116(b).
III
In order to assess Voorhees's claim for remediation expenses, it must first be determined whether Voorhees is an "owner" of a sanitary landfill as that term is used and defined by the Closure Act. The DEP argues that if Voorhees qualifies as an "owner," it would be unable to recover remediation expenses from the Fund because it would be subject to liability under the Closure Act. See N.J.A.C. 7:1I-3.1 (1988); N.J.A.C. 7:1I-2.6 (1994); 26 N.J.R. 1117.
In construing a statute, the primary task is to "`effectuate the legislative intent in light of the language used and the objectives sought to be achieved.'" Merin v. Maglaki, 126 N.J. 430, 435 (1992) (quoting State v. Maguire, 84 N.J. 508, 514 (1980)). "[S]tatutes are to be read sensibly rather than literally and the controlling legislative intent is to be presumed as `consonant to reason and good discretion.'" Schierstead v. Brigantine, 29 N.J. 220, 230 (1959) (quoting Morris Canal & Banking Co. v. Central R.R. Co., 16 N.J. Eq. 419, 428 (Ch. 1863)); see also Guiseppi v. Walling, 144 F.2d 608, 624 (2d Cir. 1944) (Hand, J.) ("There is no surer way to misread any document than to read it literally.").
We agree with the Appellate Division that Voorhees falls
within the "literal" meaning of "owner" under N.J.S.A. 13:1E-102(b). Nonetheless, we recognize, as did the Appellate
Division, that the statute is ambiguous and susceptible to more
than one reasonable meaning. Thus, we look to the underlying
purposes of the Act in order to decide this case.
The legislative history of the Act and the Act's
comprehensive statutory scheme establish that the Legislature
intended that the liability associated with improper closure and
operation of landfills rest with those parties exercising
ownership or control over the site during the landfill's
operation and subsequent closure. In essence, the Closure Act is
a cost-spreading mechanism designed to impose cleanup costs on
the landfill industry. See generally New Jersey Dept. of Envtl.
Protection v. Gloucester Envtl. Mgt. Serv. Inc.,
800 F. Supp. 1210, 1218 (D.N.J. 1992) (noting broad policy objectives
underlying Act "mandate that those persons who are in a position
to know of and control the improper operation and closure of
landfills be held liable as `owners and operators' for statutory
violations").
We also find evidence of the Legislature's intent to impose
closure liability on the landfill industry in the language of the
Act itself. See, e.g., N.J.S.A. 13:1E-104 (levying tax on all
solid waste accepted for disposal on every owner or operator of
landfill); N.J.S.A. 13:1E-109 (requiring owner or operator to
deposit money in escrow depending on amount of waste accepted per
month); N.J.S.A. 13:1E-110 (requiring annual audit depending upon
volume of waste received). That intent is further demonstrated
by the legislative history of the Act, which states in relevant
part:
This bill . . . imposes a levy on the disposal of
solid waste, the revenues of which are to be deposited
in escrow accounts to ensure the proper closure of
sanitary landfill facilities; and a tax on the disposal
of solid waste, the proceeds of which are to be used to
establish a Sanitary Landfill Contingency Fund, to be
used to pay damages resulting from the improper
operation or closure of any sanitary landfill.
. . . [The bill] (3) mandate[s] that landfill
owners or operators establish escrow accounts for
closure costs; (4) clarif[ies] that the Fund would be
available to cover the costs of personal injuries,
remedial actions taken by the Department to protect the
public health, safety and welfare, and damages
resulting from hazardous waste disposed of in sanitary
landfills.
[Assembly Committee Statement to Assembly No.
1935, April 27, 1981 (emphasis added).]
Furthermore, after signing the bill into law, Governor Byrne
stated:
The bill . . . establishes the Sanitary
Landfill Facility Contingency Fund Tax on the
owners and operators of sanitary landfills
. . . . The bill will also require the
operators of landfills to make a monthly
deposit in an escrow account to cover their
costs of closure. . . . The escrow account,
payed over the life of the landfill, will
ensure substantial funds to cover closure
costs of those facilities. Owners and
operators of landfills will be allowed to
raise the rates they charge for solid waste
collection, but the increased costs to
consumers are expected to be minimal.
[Press Release from the Office of the
Governor, November 30, l98l.]
This interpretation is consistent with our findings in Vi-Concrete, supra. In Vi-Concrete, we were presented with the
issue of whether the Commissioner could issue an unsolicited
NJPDES permit to a closed landfill under the Water Pollution
Control Act. 115 N.J. at 6. The broader issue was whether the
DEP could require the installation of monitoring wells at closed
landfills. Ibid.
Addressing the propriety of the NJPDES permit, we held that,
absent a "substantial evidential basis for believing the landfill
was discharging pollutants into state's waters," the DEP could
not unilaterally issue such a permit. Id. at 12. As such, the
NJPDES permit issued to Vi-Concrete was invalid. Id. at 13.
Although the case focused on the Water Pollution Act, see
N.J.S.A. 58:10A-1 to -20, the Court looked at the Closure Act to
buttress its conclusion.
In so holding, we recognized that the Closure Act
highlighted the "critical" issue in that case: "who should bear
the cost of installing and maintaining monitoring facilities at
sanitary landfill sites closed before the effective date of the
Closure Act?" Id. at 15. In our analysis, we stated that the
Act was intended to generate revenue to pay the costs associated
with the improper closure of any sanitary landfill. Id. at 14.
Furthermore, we noted that the Contingency Fund's revenues were
"derived from the taxes levied on all operating landfills,
reflecting a legislative purpose to impose on the landfill
industry the financial burden of remediating damages caused by
improperly closed landfills." Id. at 14-15 (emphasis added).
Accordingly, we found that the Legislature intended the Fund
to be available to "pay for remediation of improper landfill
closure, including specifically the cost of installing and
maintaining monitoring wells." Id. at 16. In such cases, the
"current property owner" would be the "claimant" under the Fund
and the DEP would obtain a claim against the owner or operator of
the landfill. Id. at 15. Therefore, the dissent's assertion,
that the Buzbys would escape liability to clean this landfill
displays a total misunderstanding of that well-established
principle. Post at ___ (slip op. at 3).
To the extent that [the] DEP determined that monitoring
wells are required to be installed and maintained on
landfill sites closed prior to January 1982, the Fund
established by the Closure Act is clearly authorized to pay
the costs of such installation and maintenance. Presumably,
the "claimant" for purposes of the Closure Act would be the
current property owner, from whom [the] DEP would acquire
subrogation rights against the owner or operator of the
landfill. We assume that present owners of closed landfill
sites would readily consent to [the] DEP's installation and
maintenance of leachate monitoring wells on their property
if the cost is borne by the Sanitary Land Fill Facility
Contingency Fund.
A further consideration supporting that interpretation is the desire to encourage owners to take prompt and appropriate actions to remedy environmental problems that threaten the public welfare. See N.J.S.A. l3:lE-l0l. If current landowners know that remediation expenses can be recovered from the Fund, they
will more likely consent to the DEP's request for remedial
measures.
Construing the Act in that fashion also vindicates the
public interest, because current owners of former landfill sites
will be empowered to expeditiously remediate environmental
hazards that threaten public health, safety, and welfare.
Enabling pre-Act purchasers of closed landfills to receive
compensation from the Contingency Fund fosters another primary
purpose of the Act, the provision of prompt and adequate
compensation to persons injured by the improper closure or
operation of a sanitary landfill. N.J.S.A. 13:1E-101.
Because this case turns on whether Voorhees benefitted from
the use of the property as a sanitary landfill and was
responsible for closure activities, the fact that Voorhees knew
that the site was previously utilized as a landfill and actually
sent waste to the facility is of no import. Voorhees never owned
or operated the landfill and never took part in any closure
activities. Therefore, it is not liable for cleanup costs and is
entitled to reimbursement for such costs from the Contingency
Fund.
We find little merit in the DEP's concern that our holding will cause real-estate buyers to speculate on closed landfills. Voorhees is not speculating in real estate. This property was purchased to be used as a public park. Furthermore, we do not think that a market for closed landfills will develop,
particularly in view of N.J.S.A. l3:lE-ll6. Under that provision
a post-Act purchaser who did not receive notice that there was a
former landfill on the property may void the contract of sale at
his or her discretion. The purpose of that provision is to
ensure that purchasers knowingly assume responsibility for
potential liability. Ibid. (citing Johnson Machinery, supra, 248
N.J. Super. at 305). In that case, the Appellate Division
observed that such notice is critical because it informs the
buyer that he or she is subject to the Closure Act. Thus, a
person receiving notice cannot make a claim against the Fund.
The notice provision ensures that our decision will not
cause a substantial drain on the Fund. Recovery under the fund
for present owners of a closed landfill is very limited. Only
those present owners of closed landfill sites who (l) purchased
the land after the landfill facility was closed; (2) purchased
prior to passage of the Closure Act; and (3) took no part in the
landfill facility's operations will be entitled to recoup the
costs of remediation from the Fund.See footnote 3
Nor do we agree with the DEP's attempt to draw an analogy between the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.A. §§9601 to -9657, and the Closure Act to establish Voorhees' liability. First, CERCLA is not applicable to this case. Second, nothing in the legislative history of the Closure Act indicates that the Legislature considered CERCLA when it enacted that Act. Therefore, CERCLA has no bearing on Voorhees's liability under the Closure Act.
The Closure Act provides a mechanism for compensating parties who are injured by the operation or improper closure of landfills. To generate revenue for the Fund, the Act both taxes and imposes liability on owners and operators of sanitary landfills. The Legislature imposed the burden of remediation costs on the landfill industry. Voorhees never benefitted from the operation of the landfill, which was closed years before Voorhees purchased the site. When Voorhees obtained the property, it had no reason to believe that it had not been closed in accordance with appropriate laws.
The judgment of the Appellate Division is affirmed.
CHIEF JUSTICE PORITZ and JUSTICES STEIN and COLEMAN join in JUSTICE GARIBALDI's opinion. JUSTICE O'HERN filed a separate dissenting opinion in which JUSTICE POLLOCK joins. JUSTICE HANDLER did not participate.
SUPREME COURT OF NEW JERSEY
A-
108 September Term 1996
IN THE MATTER OF THE ADOPTION
OF N.J.A.C. 7:1I
-----------------------------
TOWNSHIP OF VOORHEES,
Petitioner-Respondent,
v.
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
ENVIRONMENTAL CLAIMS
ADMINISTRATION,
Respondent-Appellant.
O'HERN, J., dissenting.
This case is an illustration of Murphy's Law of unintended
consequences.See footnote 4 A fund created to compensate the innocent
victims of past unsafe landfill practices has been transformed
into a windfall for dump owners.
In 1977, Voorhees Township purchased the Buzby Brothers
Landfill for $1.00. The previous owners, the Buzbys and others,
had discharged solid waste at this facility and, pursuant to
N.J.S.A. 58:10-23.11 to -23.24 (the Spill Act), Voorhees is or
may be jointly or severally liable to clean up the site. The
Buzby Landfill is a notorious site that has housed large amounts
of environmentally hazardous wastes for over thirty years.
The Landfill consists of two tracts of property amounting to
about fifty-six acres. Strawn v. Canuso,
140 N.J. 43, 49 (1995).
In 1986, the New Jersey Department of Environmental
Protection (DEP) directed Voorhees to install monitoring wells at
the site. Voorhees eventually agreed to undertake remedial
measures necessitated by the existence of the landfill on the
property. Voorhees seeks to recover from the Sanitary Landfill
Contingency Fund approximately $1 million in damages for the
costs incurred. DEP denied Voorhees' claim on the basis that
Voorhees was an owner of the landfill and thus was itself liable
for the closure costs pursuant to N.J.S.A. 13:1E-103. The Court
has seemingly turned the statute on its head and, instead of
imposing liability for closure costs on the owners of landfills,
has rewarded them by cleaning up and restoring their dumpsites at
the expense of the taxpayers.
The Sanitary Landfill Facility Closure and Contingency Fund
Act (Closure Act), L. 1981, c. 306, N.J.S.A. 13:1E-100 to -116,
imposes on owners or operators of sanitary landfills
responsibility for the proper closure of landfills. The Closure
Act requires each landfill owner or operator to establish an
escrow account for the closure of the landfill. N.J.S.A. 13:1E-109. It defines closure costs to include "the costs of the
placement of earthen or vegetative cover, the installation of
methane gas vents or monitors and leachate monitoring wells or
collection systems at the site of any sanitary landfill facility
. . . ." N.J.S.A. 13:1E-102a.
The Closure Act also established the Sanitary Landfill
Facility Contingency Fund (Fund), N.J.S.A. 13:1E-105. DEP
administers the Fund, which is run with the tax revenues (a
tipping tax) collected from all sanitary landfill facilities,
based on the amount of waste accepted for disposal. N.J.S.A.
13:1E-104. The Fund is made strictly liable for "all direct and
indirect damages, no matter by whom sustained, proximately
resulting from the operations or closure of any sanitary
landfill." N.J.S.A. 13:1E-106a. The characteristic
beneficiaries to be compensated are those living in the
neighborhood of the landfill who have suffered damages, such as
diminution of property values, from the presence of the landfill.
Citizens for Equity v. New Jersey Dep't of Envtl. Protection,
126 N.J. 391, 394 (1991).
It stands to reason that the Legislature would not in one
breath impose upon the owners of landfills the duty to clean up
and in the next breath give them the money to do the cleanup. If
instead of selling the landfill to Voorhees for $1.00, the Buzbys
had given or devised the property to Voorhees -- would Voorhees
be able to have the State (through its taxpayers) clean up the
site? If the answer is yes, as the majority asserts, could the
Buzbys have given the property to family or friends and enabled
them to receive a State-funded cleanup? The answer to me is
obviously no. Yet the majority's logic would go so far.
DEP argues that the recent adoption of the "Municipal
Landfill Site Closure, Remediation and Redevelopment Act" (the
Redevelopment Act), L. 1996, c. 124, N.J.S.A. 13:1E-116.1 to
-116.7, supports its interpretation of the Legislature's intent.
The Redevelopment Act authorizes DEP to enter a redevelopment
agreement covering municipal landfills closed prior to January 1,
1982 and makes the developer eligible to recover 75" of the costs
of remediation and closure of the landfill from a new fund. The
Act sets forth a number of factors related to the benefits of
redevelopment, including a potential for job creation, economic
development, the degree of economic and related social distress
in the area to be redeveloped, and the likelihood that the
project will generate enough sales tax income to repay the
Redevelopment Fund for the costs of closure. N.J.S.A. 13:1E-116.3. The Attorney General argues that "the Legislature would
not have needed to create a new source of reimbursement if the
total reimbursement of subsequent purchasers was already provided
by [the Fund]." This is not a complete answer because the
Court's opinion is limited to that class of purchasers who
acquired landfills before the 1982 Closure Act. However, several
other new initiatives providing mechanisms for recouping cleanup
costs would also be unnecessary in the case of pre-1982
acquisitions under the majority's theory. See Stuart J.
Lieberman, Buying, selling contaminated sites,
6 N.J.L. 1055
(Apr. 28, 1997) (outlining federal and state initiatives).
Any further doubt about DEP's interpretation of the
legislative intent evaporates under the facts of this case. As
the Appellate Division noted, Voorhees deposited its municipal
waste at the landfill for many years prior to the site's closure
and Voorhees' subsequent purchase.
291 N.J. Super. 183, 187
(App. Div. 1996). Voorhees is thus subject as a purchaser to
strict liability for cleanup under the Spill Act unless it can
show it "did not know and had no reason to know that any
hazardous substance had been discharged" at the landfill. See
N.J.S.A. 58:10-23.11g(d)(b)(1). Voorhees may also be subject to
liability under the Spill Act as a generator of the hazardous
waste accumulated at the site.
We are informed that to affirm the Appellate Division
decision will seriously undermine the ability of DEP to
administer the Fund. Voorhees was on notice that the property
that it purchased would be a source of pollution. DEP has
previously interpreted the language of N.J.S.A. 13:1E-103 to
allow claims by an innocent purchaser when the person failed to
discover the existence of the landfill despite making a
reasonable inquiry. See N.J.A.C. 7:1I-2.6(d)(1) (allowing
claimants to recover if, after exercising reasonable diligence,
they still had not discovered presence of landfill at time of
purchase).
The Closure Act could not be more explicit in its
application to closed landfills. It defines "owner or operator"
as "every owner of record of any interest in land whereon a
sanitary landfill facility is or has been located." N.J.S.A. 13:1E-102b. The Court has reinterpreted the statute in order to achieve what it believes to be a preferable result. Similar arguments have been made with respect to the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. §§ 9601 to 9675 (1997), which was enacted in response to evidence of improper hazardous waste disposal and was designed to effect the speedy cleanup of hazardous waste sites. Transtech Indus. v. A & Z Septic Clean, 798 F. Supp. 1079, 1082 (D.N.J. 1992), appeal dismissed, 5 F.3d 51 (3d Cir. 1993), cert. denied, 512 U.S. 1213, 114 S. Ct. 2692, 129 L.Ed.2d 823 (1994). CERCLA imposes strict liability upon those parties falling within its terms. United States v. Kramer, 757 F. Supp. 397, 419 (D.N.J. 1991). Courts have held that the purchaser of contaminated property is responsible under the Act even though the contamination did not occur during the period of ownership. See, e.g., New York v. Shore Realty Corp., 759 F.2d 1032, 1044 (2d Cir. 1985). Voorhees is therefore strictly liable under CERCLA.See footnote 5 All that the Court's decision accomplishes is to force a circularity of actions. DEP will be required to pursue Voorhees under our Spill Act and perhaps under CERCLA to obtain reimbursement of the same funds distributed from the Fund.See footnote 6 In
the alternative, DEP may be entitled to a set-off for its Spill
Act claim in the Closure Fund proceedings. This circuitous
approach is a waste of judicial and administrative time and
resources. Voorhees is already involved in a federal lawsuit
related to the Buzby Landfill. See Township of Haddon v. Royal
Ins. Co. of America,
929 F. Supp. 774, 776 (D.N.J. 1996).
The Court's reliance on Vi-Concrete Company v. New Jersey
Department of Environmental Protection,
115 N.J. 1 (1989), is
misplaced. What the Court actually held in Vi-Concrete was that
DEP did have authority to issue pollutant discharge elimination
permits when there was "a substantial evidential basis for DEP's
belief that the landfill is discharging pollutants into the
State's waters. Moreover, DEP must proceed by rulemaking to set
forth the standards that govern application of the [Water
Pollution Control Act's] permit procedures to closed landfills."
115 N.J. at 16. In essence, the Court said that if DEP proceeded
by rulemaking and had a basis for believing that a landfill was
discharging pollutants, the owner could be required to take the
remedial measures required by law. All that the Court decided in
Vi-Concrete was that DEP had to have regulations in place before
it could categorically issue water pollution permits to the
innocent acquirers of sanitary landfills.
I would reverse the judgment of the Appellate Division and
deny Voorhees' claim.
Justice Pollock joins in this opinion.
NO. A-108 SEPTEMBER TERM 1996
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
IN THE MATTER OF THE ADOPTION
OF N.J.A.C. 7:1I
-----------------------------
TOWNSHIP OF VOORHEES,
Petitioner-Respondent,
v.
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
ENVIRONMENTAL CLAIMS
ADMINISTRATION,
Respondent-Appellant.
DECIDED May 15, 1997
Chief Justice Poritz PRESIDING
OPINION BY Justice Garibaldi
CONCURRING OPINION BY
DISSENTING OPINION BY Justice O'Hern
Footnote: 1Voorhees appeared as amicus curiae in Vi-Concrete Co. v. New Jersey Dept. of Envtl. Protection, supra, ll5 N.J. at 6, n.3, in support of Vi-Concrete's petition for certification. Footnote: 2The DEP limited its petition for certification to whether Voorhees was entitled to recover the cost of remediation under the Closure Act. Therefore, the validity of the l994 regulations is not before the Court. Footnote: 3To encourage understandably reluctant developers to purchase and to develop urban landfills, the Legislature on November 6, l966, adopted the "Municipal Landfill Site Closure, Remediation and Development Act" (the Redevelopment Act L. l996, c. l24), that allows an eligible developer to recover 75" of the costs of remediation and closure of a landfill located in an urban area that had ceased operations prior to the enactment of the Closure Act. Due to the aforementioned limitations placed on owners recovering under the Closure Act, without the Redevelopment Act such owner-developers could not recover from the Fund. The Redevelopment Act offers further support that the DEP's fears that our decision will spark real estate speculation in closed landfills are unfounded. Footnote: 4"Murphy's Law" states that if there is a possibility for something to go wrong, it will go wrong. Sanders v. Weaver, 583 So.2d 1326, 1327 (Ala. 1991). Footnote: 5If the Legislature does not sooner amend the Act, Voorhees may return to the Fund to recover cleanup costs imposed on it under CERCLA. Footnote: 6The Spill Act is the State analog to CERCLA; it also imposes strict liability. SC Holdings, Inc. v. A.A.A. Realty Co., 935 F. Supp. 1354, 1365 (D.N.J. 1996).