Magic Petroleum Corporation v. Exxon Mobil Corporation (069083)

SYLLABUS
(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
interest of brevity, portions of any opinion may not have been summarized).
Magic Petroleum Corporation v. Exxon Mobil Corporation (A-46-12) (069083)
Argued November 6, 2013 -- Decided July 28, 2014
FERNANDEZ-VINA, J., writing for a unanimous Court.
In this appeal, the Court considers whether a property owner’s claims for contribution under the Spill
Compensation and Control Act (Spill Act or Act), N.J.S.A. 58:10-23.11 to -23.24, must be deferred under the
doctrine of primary jurisdiction until after the conclusion of New Jersey Department of Environmental Protection
(DEP) remediation enforcement actions, or whether a property owner may proceed against responsible parties to
recover sums expended to remediate the site before the DEP concludes its involvement in the site.
In a proceeding before the Office of Administrative Law (OAL), the DEP sued Magic Petroleum, Inc.
(Magic) for expenses incurred during the remediation of hazardous material on land owned and operated by the
company. Although Magic asserted that other parties were responsible, Magic bore the entire cost of cleanup
pursuant to the DEP’s determination that Magic was a discharger.
On August 12, 2003, while the DEP proceedings were ongoing, Magic filed a claim for contribution in the
Superior Court under the Spill Act, alleging that Exxon Mobil Corporation (ExxonMobil) and several other parties
were responsible for a portion of the costs associated with the cleanup. The trial court dismissed Magic’s claim
without prejudice, reasoning that, under the doctrine of primary jurisdiction, the contribution claim could only be
filed following complete remediation of the site. The court adduced that deferring the case to the DEP would afford
the Department time to employ its expertise in evaluating the full extent of the contamination and total costs of the
cleanup, components essential to awarding the final allocation of costs following completion of the remediation.
Magic moved for reconsideration, which was denied.
Magic appealed, and the Appellate Division affirmed the trial court’s orders dismissing the complaint and
affirming the denial of Magic’s request for reconsideration. The panel reasoned that while the Superior Court and
the DEP have concurrent jurisdiction to determine whether ExxonMobil is a discharger, only the DEP could identify
the contamination, analyze the extent of the discharge, and devise a cleanup strategy. Those findings, the panel
continued, needed to be made prior to the Superior Court’s allocation of liability. Furthermore, the panel held that a
party must first obtain written approval of the remediation plan from the DEP before commencing a contribution
claim under the Spill Act. The Court granted Magic’s petition for certification. 213 N.J. 387 (2013).
HELD: Plaintiff property owners or other responsible parties may file contribution claims in Superior Court, and a
court may allocate liability before the final resolution of a site remediation plan by the DEP. The trial court may assign
liability based on evidence presented at trial, but may not be able to issue a final damages award. In addition, a party
need not obtain written approval of the remediation plan prior to filing a claim for contribution.
1. The New Jersey Legislature enacted the Spill Act in 1976 to “stem the threat to the economy and environment of
the State posed by the discharge of petroleum products and other hazardous substances.” Marsh v. N.J. Dep’t. of
Envtl. Prot., 152 N.J. 137, 144 (1997) (internal quotation omitted). The Act prohibits the “discharge” of “hazardous
substances” into the environment and provides for the cleanup of that discharge. N.J.S.A. 58:10-23.11c. (pp. 11-12)
2. The DEP is charged with managing public funds to quickly and efficiently restore lands spoiled with
environmental contamination. N.J.S.A. 58:10-23.11f(a)(1) (authorizing the DEP to “act to clean up and remove or
arrange for cleanup and removal of such discharge” or to “direct the discharger to clean up and remove or arrange
for the cleanup and removal of the discharge”). The Legislature established strict liability for causing environmental
contamination and mandated that dischargers are jointly and severally liable. N.J.S.A. 58:10-23.11g(c)(1). Thus,
the DEP may collect the entire amount of cleanup costs from one discharger, even when that party was only partially
responsible for the spill. (pp. 12-13).
1
3. In 1992, the Legislature amended the Spill Act to clarify that dischargers ordered by the DEP to pay for the
entirety of cleanup costs were entitled to seek contribution from other responsible parties, based in part, on “the
normal course of tort law.” L. 1991, c. 372, § 14. At the time of the amendment’s passage, the “normal course of
tort law” included the already-existing right of contribution, codified in the Joint Tortfeasors Contribution Law,
N.J.S.A. 2A:53A-1, as modified by the Comparative Negligence Act, N.J.S.A. 2A:15-5.1. In pertinent part, the Spill
Act provides that “[w]henever one or more dischargers or persons cleans up and removes a discharge of a hazardous
substance, those dischargers and persons shall have a right of contribution against all other dischargers and persons
in any way responsible for a discharged hazardous substance or other persons who are liable for the cost of the
cleanup and removal of that discharge of a hazardous substance.” N.J.S.A. 58:10-23.11f(a)(2)(a). (pp. 13-15)
4. Importantly, the Legislature directed that contribution plaintiffs seek relief before a court. The Legislature
bestowed upon the courts liberal discretion to “allocate the costs of cleanup and removal among liable parties using
such equitable factors as the court determines are appropriate.” N.J.S.A. 58:10-23.11f(a)(2)(a). The Legislature
went further to ensure private entity dischargers were not prevented from seeking recourse in the courts, dictating
that “[n]othing in [N.J.S.A. 58:10-23.11f(a)(2)(a)] shall affect the right of any party to seek contribution pursuant to
any other statute or under common law.” Thus, the Legislature established a private right of action in contribution
so that dischargers designated by the DEP could share the cost of remediation with additional potentially responsible
dischargers not initially designated by the DEP. The Legislature focused on the courts as the venue to allocate
liability percentages, while the DEP continued to apply its expertise in the remediation of the site. (pp. 15-17)
5. This appeal requires the Court to address the doctrine of primary jurisdiction. Primary jurisdiction is applicable
when a case is properly filed in the Superior Court but the court declines original jurisdiction, referring specific
issues to the appropriate administrative body. The court gives deference to the administrative body’s interpretation
of its own regulations and findings of fact on particular issues that are within the special competence of the agency
pursuant to applicable statutes. Essentially, the court retains jurisdiction but defers action until the agency has
reviewed the case and employed its expertise. In instances where the court and the agency have concurrent
jurisdiction, disputed factual issues should be evaluated by the agency because of its expertise, but legal issues
should be left to the court to decide. Although no formula exists to evaluate the applicability of primary jurisdiction,
our courts have been guided by a four-part test, which considers (1) whether the matter is within the conventional
experience of judges; (2) whether the matter is peculiarly within the agency’s discretion, or requires expertise; (3)
whether inconsistent rulings might disrupt the statutory scheme; and (4) whether prior application has been made to
the agency. (pp. 17-20)
6. Primary jurisdiction is not applicable in this contribution claim. First, dischargers statutorily are afforded the
same right as the DEP to sue other potentially responsible parties in order to recover contribution costs for
contamination where other parties caused a portion of the discharge. Additionally, the Spill Act gives the court, not
the DEP, jurisdiction over contribution claims. N.J.S.A. 58:10-23.11f(a)(2)(a). Indeed, here, the DEP implicitly
conceded that a claim for contribution, and specifically the allocation of liability, is a form of recourse not within the
DEP’s jurisdiction. Moreover, contribution claims do not necessitate the expertise of the DEP because allocating
liability and considering expert testimony are matters within the conventional experience of judges. Therefore, the
DEP and the courts share concurrent jurisdiction over the recovery of cleanup costs. (pp. 20-24)
7. Finally, a contribution plaintiff need not obtain the DEP’s written approval of the investigation and remediation
plan prior to filing a claim for contribution. The Court reaches this conclusion based upon the plain language of the
statute and the clear Legislative intent to amend the Spill Act to clarify and permit a private claim for contribution.
The issue of allocation of liability is independent from the issue of the total amount of the costs. While dischargers
are required to have written approval for the actual expenses that they incur for the purpose of remediation in order
to seek contribution for those expenses, that is not a prerequisite to allocation of responsibility for the costs
associated with the approved remediation. (pp. 25-27)
The judgment of the Appellate Division is REVERSED, and the matter is REMANDED to the trial court
for proceedings consistent with this opinion.
CHIEF JUSTICE RABNER, JUSTICES LaVECCHIA and ALBIN, and JUDGES RODRÍGUEZ
and CUFF (both temporarily assigned) join in JUSTICE FERNANDEZ-VINA’s opinion. JUSTICE
PATTERSON did not participate.
2
SUPREME COURT OF NEW JERSEY
A-46 September Term 2012
069083
MAGIC PETROLEUM CORPORATION,
Plaintiff-Appellant,
v.
EXXON MOBIL CORPORATION and
MARIE TIRICO,
Defendants-Respondents,
and
TRENTON OIL COMPANY and M.M.
WERTHEIM CORPORATION,
Defendants
and
EXXON MOBIL CORPORATION,
Defendant/Third-Party
Plaintiff-Respondent
v.
LINKING RING PETROLEUM,
Third-Party Defendant.
Argued April 1, 2014 – Decided July 28, 2014
On certification to the Superior Court,
Appellate Division.
Michael G. Sinkevich, Jr., argued the cause
for appellant (Lieberman & Blecher,
attorneys; Stuart J. Lieberman, of counsel).
Robert T. Lehman argued the cause for
respondent Exxon Mobil Corporation (Archer &
1
Greiner, attorneys; Mr. Lehman, Adam P.
Baas, and Sarah A. Gribbin, on the briefs).
Lance J. Kalik submitted a letter in lieu of
brief on behalf of respondent Marie Tirico
(Riker Danzig Scherer Hyland & Perretti,
attorneys).
Martha N. Donovan argued the cause for
amicus curiae New Jersey Apartment
Association (Norris McLaughlin & Marcus,
attorneys; Ms. Donovan and Edward A. Hogan,
on the brief).
Martha N. Donovan submitted a brief on
behalf of amicus curiae Ironstate
Development Co., Ltd. (Norris McLaughlin &
Marcus, attorneys; Ms. Donovan and Edward A.
Hogan, on the brief).
JUSTICE FERNANDEZ-VINA delivered the opinion of the Court.
When environmental contamination occurs, the Spill
Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11
to -23.24, makes all dischargers jointly and severally liable
for the entire cost of cleanup. The New Jersey Department of
Environmental Protection (DEP or Department) is involved in a
spill cleanup either by affirmatively compelling a “discharger”
to remediate the site or by managing remediation accomplished by
parties. Remediation expenses are the responsibility of the
party or parties who are “in any way responsible” for the
pollution. N.J.S.A. 58:10-23.11g. The Spill Act specifically
authorizes a private right of action, thus allowing parties to
seek contribution totaling an amount equal to the party’s share
2
of liability for the remediation costs from other responsible
parties. See N.J.S.A. 58:10-23.11f(a)(2)(a).
In this appeal, we consider whether a property owner’s
claims for contribution under the Spill Act must be deferred
under the doctrine of primary jurisdiction until after the
conclusion of DEP remediation enforcement actions or whether a
property owner may proceed against responsible parties to
recover sums expended to remediate the site before the DEP
concludes its involvement in the site.
The facts in this case led to two separate legal actions.
In the first case, the DEP sued Magic Petroleum, Inc. (Magic)
for expenses incurred during the remediation of hazardous
material on land owned and operated by the company. Although
Magic asserted that other parties were responsible, Magic bore
the entire cost of cleanup pursuant to the DEP’s determination
that Magic was a discharger. Magic then sought contribution
from Exxon Mobil Corporation (ExxonMobil), the owner of
neighboring land, to defray the cost of the cleanup. That
action started the pending case. Magic’s claim was dismissed
without prejudice by the trial court, which reasoned that, under
the doctrine of primary jurisdiction, the contribution claim
could only be filed following complete remediation of the site.
The court adduced that deferring the case to the DEP would
afford the Department time to employ its expertise in evaluating
the full extent of the contamination and total costs of the
3
cleanup, components essential to awarding the final allocation
of costs following completion of the remediation.
The Appellate Division affirmed the trial court’s decision.
The appellate panel recognized that the Superior Court and the
DEP have concurrent jurisdiction to determine whether ExxonMobil
is a discharger, but the DEP has sole jurisdiction over
identifying contaminants on the land and assessing the extent of
the discharge in order to formulate the proper remediation plan.
Furthermore, the panel held that a party must first obtain
written approval of the remediation plan from the DEP before
commencing a contribution claim under the Spill Act.
While the extent of the cleanup has yet to be ascertained,
we agree that the trial court may determine, subject to proofs,
whether ExxonMobil is also responsible for the contamination.
Moreover, we conclude that the trial court may assign liability
to responsible parties, based on evidence presented at trial,
but we note that the court may not be able to issue a final
damages award. Further, we determine that a party need not
obtain written approval of the remediation plan prior to filing
a claim for contribution. Therefore, we reverse the judgment of
the Appellate Division and remand to the trial court.
I.
A.
In the early 1990s, Magic purchased Lot 19.01 in the
Clarksburg area of Millstone Township. On that lot, Magic owned
4
and operated a gasoline refueling and service station, which was
subsequently discovered to be the source of ground and water
contamination on the land. Across the street, ExxonMobil owned
a parcel of land, designated as Lot 11,1 where it operated
another gasoline refueling station, rife with its own
contamination issues.
At the time of purchase, Magic was aware that its property
contained several underground storage tanks (USTs), that were
leaking petroleum hydrocarbons into the soil and ground water.
In fact, the DEP became involved with Lot 19.01 in 1989, years
before Magic purchased the land, after the DEP detected strong
petroleum odors and ionization on the land. Those contaminants
were later determined to be a “discharge” pursuant to the Spill
Act, N.J.S.A. 58:10-23.11b. As a result, two USTs were removed
in 1991.
In 1995, the DEP issued a Field Directive notifying Magic
of the need to investigate and remediate the hazardous
substances discharged on Lot 19.01. In 1997, Magic had three
more USTs removed from the property. In 1999, Magic entered
into an Administrative Consent Order (ACO) with the DEP, whereby
Magic agreed to remediate the property under DEP oversight. The
DEP issued an Administrative Order and Notice of Civil
1
Defendant Marie Tirico purchased Lot 11 from ExxonMobil in
1988. Tirico then sold Lot 11 to defendant Trenton Oil Company.
Later, Magic’s principal, Avinash Vashisht, acquired Lot 11 and
transferred it to another corporation, Linking Ring Petroleum,
also owned by Vashisht.
5
Administrative Penalty Assessment on May 9, 2003, when,
according to the DEP, Magic failed to comply with the ACO.
Magic requested an administrative hearing and the case was
transferred to the Office of Administrative Law (OAL). Magic
asserted that the proceeding should be stayed to admit
ExxonMobil as a party so that liability could be allocated to
each potentially responsible party accordingly.
Magic also sent letters to the DEP requesting that the
agency join ExxonMobil in the remediation plan. The DEP
responded by letter dated August 21, 2003, directing that “the
assessment of a percentage of the responsibility is best
addressed in negotiation with ExxonMobil or before the [c]ourt.”
An administrative hearing was held, and on November 1,
2006, an Administrative Law Judge (ALJ) concluded that the
contamination of Lot 19.01 was properly attributed to a
discharge for which Magic was “in any way responsible” under
N.J.S.A. 58:10-23.11g. The ALJ also found that Magic was in
violation of the ACO. The DEP adopted the ALJ’s decision on
December 18, 2006.
Before completion of the OAL proceeding, Magic filed a
complaint in Superior Court, Law Division in which it alleged
that the 1999 ACO was a contract, that DEP breached the contract
and that DEP breached the duty of good faith and fair dealing.
A Law Division judge dismissed the case on October 4, 2006.
Magic then appealed the dismissal of the case and the final
6
decision of the DEP to the Appellate Division, which
consolidated the cases and affirmed both judgments. We denied
certification. Vashisht v. N.J. Dep’t. of Envtl. Prot., 198
N.J. 473 (2009).
B.
On August 12, 2003, while the DEP proceedings were ongoing,
Magic filed a claim for contribution in the Superior Court under
the Spill Act, alleging that ExxonMobil and several other
parties were responsible for a portion of the costs associated
with the cleanup of the contamination on Lot 19.01. That claim
gave rise to this appeal. Both Magic and ExxonMobil engaged in
extensive discovery efforts, including serving and answering
interrogatories, hiring experts, and obtaining reports regarding
which party was responsible for the contamination of Lot 19.01.
On June 14, 2010, ExxonMobil filed a notice to stay the
case or to dismiss the complaint without prejudice. In support
of its motions, ExxonMobil asserted that the DEP’s determination
of necessary remediation projects must precede any court
allocation of liability under the Spill Act.
The court dismissed the case without prejudice, reasoning that,
since the DEP was already on Magic’s property collecting data
about the discharge contaminants, the allocation of liability
would be more accurate if adjudged after the DEP had detailed
information about the extent of the contamination and necessary
remediation. The court focused on the DEP’s current role in the
7
remediation on Lot 19.01 and the DEP’s function in the
evaluation of the type of cleanup that would be required. That
assessment would substantially affect the dollar amount of
cleanup costs to be paid by the responsible parties. Magic
moved for reconsideration, which was denied.
Magic appealed to the Appellate Division. In an
unpublished opinion, the Appellate Division affirmed the trial
court’s order dismissing the complaint without prejudice and
affirming the denial of Magic’s request for reconsideration.
The appellate panel reasoned that, while the Superior Court had
sole jurisdiction to allocate the costs of remediation among
liable parties, several other issues needed to be addressed
before reaching the allocation of liability.
Specifically, the Appellate Division stated that, although
the court and the DEP had concurrent jurisdiction over whether
ExxonMobil was a “party in any way responsible,” only the DEP
could identify the contamination, analyze the extent of the
discharge, and devise a cleanup strategy. Those findings, the
panel continued, needed to be made prior to the Superior Court’s
allocation of liability. Relying on the doctrine of primary
jurisdiction, the Appellate Division found that the unsettled
issues would be best decided by the expertise of the DEP so as
to avoid inconsistent rulings. The Appellate Division also
declared that Magic, and any other party seeking contribution
8
under the Spill Act, must obtain written approval from the DEP
for the remediation plan prior to filing a contribution claim.
Magic petitioned this Court, and we granted certification.
213 N.J. 387 (2013).
II.
Magic argues that the trial court’s dismissal of its
contribution claim was improper because primary jurisdiction is
not applicable. Relying on N.J.S.A. 58:10-23.11f, Magic asserts
that the Legislature did not include any language either
limiting a party’s recourse in the courts or requiring that a
party wait until after the environmental investigation is
complete and the remedial action plan is approved before filing
a contribution claim. Magic maintains that the plain language
of the statute bestows upon the court broad powers to allocate
liability in contribution claims, permitting the court to use
“such equitable factors as the court determines are
appropriate.” N.J.S.A. 58:10-23.11f(a)(2)(a).
As a corollary, Magic contends that written approval by the
DEP for the investigation and proposed remediation plan is not
required prior to filing a claim for contribution, contrary to
the Appellate Division’s decision. In support of this argument,
Magic relies on the new regulatory scheme for site cleanup
governed by the Site Remediation Reform Act, N.J.S.A. 58:10C-1
to -29. That statute changed the mechanism for remediation
projects by placing the bulk of oversight duties in the hands of
9
licensed site remediation professionals2 (LSRPs) and retaining
only minimal oversight responsibilities for the DEP. See
N.J.S.A. 58:10C-1.3; see also N.J.S.A. 58:10C-27. Magic argues
that demanding written approval prior to the filing of a
contribution claim is impractical and impossible in light of
this legislation because the DEP no longer oversees remediation
projects or provides approval for remediation plans.
ExxonMobil argues that the trial court appropriately
applied the doctrine of primary jurisdiction in dismissing the
case without prejudice because only the DEP has the authority to
determine the scope and nature of a party’s discharge liability.
Further, ExxonMobil contends that the DEP should be allowed to
ascertain specific facts within its expertise before the
contribution claim can proceed, particularly because the DEP is
required to verify the extent of discharge and evaluate the
remediation plan on Magic’s property, in accordance with the
ACO.
Furthermore, ExxonMobil contends that in order for a party
to recover in a contribution claim, the expenses for which the
party seeks contribution must meet the definition of “cleanup
2
Licensed site remediation professionals are individuals who
independently oversee the cleanup of contaminated sites,
ensuring that the process is conducted effectively and in
compliance with New Jersey statutes and regulations. See
N.J.S.A. 58:10C-14. The Site Remediation Professional Licensing
Board issues licenses for LSRPs based on strict criteria,
including a particular level of education and experience in the
environmental field. See N.J.S.A. 58:10C-3, -5.
10
and removal costs.” ExxonMobil contends that the Spill Act
dictates that “cleanup and removal costs” are only those for
which the party has obtained prior “written approval from the
[D]epartment.” N.J.S.A. 58:10-23.11b. Accordingly, ExxonMobil
insists that a party seeking contribution must have written
approval for the remediation plan prior to filing a claim for
contribution.
The New Jersey Apartment Association and Ironstate
Development Co. Ltd., appearing as amici curiae, join in Magic’s
assertion that written approval from the DEP is not required
prior to filing a claim for contribution. Amici reason that
such a prerequisite would cause an exceptionally burdensome
backlog of remediation cases for the DEP.
III.
A.
In 1976, New Jersey Legislature enacted the Spill Act in an
effort to “stem the ‘threat to the economy and environment of
the State’ posed by the ‘discharge of petroleum products and
other hazardous substances.’” Marsh v. N.J. Dep’t. of Envtl.
Prot., 152 N.J. 137, 144 (1997) (quoting N.J.S.A. 58:10-23.11a);
see also Buonviaggio v. Hillsborough Twp. Comm., 122 N.J. 5, 8
(1991). The stated purpose of the Spill Act is
to exercise the powers of this State to
control the transfer and storage of
hazardous substances and to provide
liability for damage sustained within this
State as a result of any discharge of said
11
substances, by requiring the prompt
containment and removal of such pollution
and substances, and to provide a fund for
swift and adequate compensation to resort
businesses and other persons damaged by such
discharges.
[N.J.S.A. 58:10-23.11a.]
Importantly, the Spill Act prohibits the “discharge” of
“hazardous substances” into the environment and provides for the
cleanup of that discharge. N.J.S.A. 58:10-23.11c; accord
Buonviaggio, supra, 122 N.J. at 8. In keeping with the
Legislature’s intent that the Spill Act be liberally construed,3
“discharge” is defined broadly as
any intentional or unintentional action or
omission resulting in the releasing,
spilling, leaking, pumping, pouring,
emitting, emptying or dumping of hazardous
substances into the waters or onto the lands
of the State, or into waters outside the
jurisdiction of the State when damage may
result to the lands, waters, or natural
resources within the jurisdiction of the
State.
[N.J.S.A. 58:10-23.11b.]
Moreover, under provisions of the Spill Act, the DEP is
charged with managing public funds to quickly and efficiently
restore lands spoiled with environmental contamination. Marsh,
supra, 152 N.J. at 145. Accordingly, the DEP also is authorized
to “act to clean up and remove or arrange for cleanup and
removal of such discharge or may direct the discharger to clean
3
“The Spill Act being necessary for the general health, safety,
and welfare of the people of this State, shall be liberally
construed to effect its purposes.” N.J.S.A. 58:10-23.11x.
12
up and remove or arrange for the cleanup and removal of the
discharge.” N.J.S.A. 58:10-23.11f(a)(1). The Legislature
established strict liability for causing environmental
contamination:
[A]ny 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.
[N.J.S.A. 58:10-23.11g(c)(1).]
Therein, the Legislature also mandated that dischargers are
jointly and severally liable. Ibid. Thus, the DEP may collect
the entire amount of cleanup costs from one discharger, even
when that party was only partially responsible for the spill.
However, the DEP is not the only entity entitled to recover
cleanup costs. In 1992, the Legislature amended the Spill Act
to clarify that dischargers ordered by the DEP to pay for the
entirety of cleanup costs were entitled to seek contribution
from other responsible parties, based in part, on “the normal
course of tort law.” L. 1991, c. 372, § 14; see Statement to S.
2657, A. 3659 at 6 (June 11, 1990).
At the time of the amendment’s passage, the “normal course
of tort law” included the already-existing right of
contribution, codified in the Joint Tortfeasors Contribution
Law, N.J.S.A. 2A:53A-1, as modified by the Comparative
Negligence Act, N.J.S.A. 2A:15-5.1. See Young v. Latta, 123
13
N.J. 584, 592 (1991). The right of contribution is a statutory
construction. See N.J.S.A. 2A:53A-3; Young, supra, 123 N.J. at
588. The basic purpose in creating the right of contribution
was to achieve “a sharing of the common responsibility [among
tortfeasors] according to equity and natural justice.”
Sattelberger v. Telep, 14 N.J. 353, 367-368 (1954). Therein,
the general right of contribution invokes several liability by
intending that the defendant-in-contribution shall pay no more
than the party’s percentage of liability. N.J.S.A. 2A:15-
5.3(e).
The purpose of the contribution amendment to the Spill Act
was to encourage prompt and effective remediation by those
parties responsible for contamination who might otherwise be
reluctant to cooperate in the remediation efforts for fear of
bearing the entire cost of cleanup when other parties were also
responsible for the creation and continuation of the discharge.
S. Envtl. Quality Comm., Statement to S. Comm. Substitute for S.
No. 2657 and Assemb. No. 3659, 204 Leg. at 1-2 (Dec. 10, 1990)
[hereinafter Statement to S. Substitute S. No. 2657]. In
pertinent part, the Spill Act provides that
[w]henever one or more dischargers or
persons cleans up and removes a discharge of
a hazardous substance, those dischargers and
persons shall have a right of contribution
against all other dischargers and persons in
any way responsible for a discharged
hazardous substance or other persons who are
liable for the cost of the cleanup and
14
removal of that discharge of a hazardous
substance.
[N.J.S.A. 58:10-23.11f(a)(2)(a).]
The amendment expressly created a separate contribution
cause of action for private parties seeking to recover a portion
of the cleanup costs. See Hous. Auth. v. Suydam Investors,
L.L.C., 177 N.J. 2, 18 (2003). “In order to accomplish a fair
and equitable ultimate sharing of the remediation burden among
all responsible parties and thereby to promote contamination
cleanup, N.J.S.A. 58:10-23.11f(a)(2)(a) casts a broad net
encompassing ‘all other dischargers and persons in any way
responsible for a discharged hazardous substance . . . .’”
Pitney Bowes, Inc. v. Baker Indus., Inc., 277 N.J. Super. 484,
487-88 (App. Div. 1994); see also Cyktor v. Aspen Manor Condo.
Ass’n, 359 N.J. Super. 459, 476 (App. Div. 2003) (internal
citations omitted) (stating that contribution provision was
enacted to “provide a right of contribution to ‘accomplish a
fair and equitable . . . sharing of the remediation burden among
all responsible parties’”) (alteration in original) (quoting
Pitney Bowes, supra, 277 N.J. Super. at 488).
Importantly, the Legislature directed that contribution
plaintiffs seek relief before a court. The Legislature bestowed
upon the courts liberal discretion to “allocate the costs of
cleanup and removal among liable parties using such equitable
factors as the court determines are appropriate.” N.J.S.A.
15
58:10-23.11f(a)(2)(a). The Legislature went further to ensure
private entity dischargers were not prevented from seeking
recourse in the courts, dictating that “[n]othing in [N.J.S.A.
58:10-23.11f(a)(2)(a)] shall affect the right of any party to
seek contribution pursuant to any other statute or under common
law.” Ibid.
Federal courts interpreting the Spill Act have set out
several factors, which may provide guidance to New Jersey courts
allocating contribution costs for remediation of hazardous
substances. The Federal District Court in New Jersey suggests
the following considerations, better known as the “Gore factors”
(1) the ability of the parties to
demonstrate that their contribution to a
discharge, release or disposal of a
hazardous waste can be distinguished;
(2) the amount of the hazardous waste
involved;
(3) the degree of toxicity of the hazardous
waste involved;
(4) the degree of involvement by the parties
in the generation, transportation,
treatment, storage, or disposal of the
hazardous waste;
(5) the degree of care exercised by the
parties with respect to the hazardous waste
concerned, taking into account the
characteristics of such hazardous waste; and
(6) the degree of cooperation by the parties
with the federal, state or local officials
to prevent any harm to the public health or
the environment.
16
[Lenox Inc. v. Reuben Smith Rubbish Removal,
91 F. Supp. 2d 743, 747 (D.N.J. 2000).
(citation omitted).]
Additionally, courts may look to any other “equitable factors as
the court determines are appropriate” to allocate liability.
N.J.S.A. 58:10-23.11f(a)(2)(a).
Thus, under the Spill Act, the Legislature established a
private right of action in contribution so that dischargers
designated by the DEP could share the cost of remediation with
additional potentially responsible dischargers not initially
designated by the DEP. The Legislature focused on the courts as
the venue to allocate liability percentages for such recourse,
while the DEP continued to apply its expertise in the
remediation of the site.
B.
This appeal also requires us to address the doctrine of
primary jurisdiction. The doctrine of primary jurisdiction is
applicable when a case is properly filed in the Superior Court
but the court declines original jurisdiction, referring specific
issues to the appropriate administrative body. Daaleman v.
Elizabethtown Gas Co., 77 N.J. 267, 269 n.1 (1978). The court
gives deference to the administrative body’s interpretation of
its own regulations and findings of fact on particular issues
that are within the special competence of the agency pursuant to
applicable statutes. See ibid. Essentially, the court retains
jurisdiction but defers action until the agency has reviewed the
17
case and employed its expertise. See Campione v. Adamar, Inc.,
155 N.J. 245, 264 (1998).
This doctrine is especially important for “‘promoting
proper relationships between the courts and administrative
agencies charged with particular regulatory duties.’” Boss v.
Rockland Elec. Co., 95 N.J. 33, 40 (1983) (quoting United States
v. W. Pac. R.R. Co., 352 U.S. 59, 63-64, 77 S. Ct. 161, 164-65,
1 L. Ed. 2d 126, 132 (1956)).
In instances where the court and the agency have concurrent
jurisdiction, disputed factual issues should be evaluated by the
agency because of its expertise, but legal issues should be left
to the court to decide. See ibid. (“[W]here the resolution of a
contested legal issue properly brought before a court
necessarily turns on factual issues within the special province
of an administrative agency, the court should refer the factual
issues to that agency.”). On the other hand, “[w]hen the legal
rights of parties are clear, it is unjust and unfair to burden
them with an administrative proceeding to vindicate their
rights.” Ibid. (citing N.J. Civil Serv. Ass’n v. State, 88 N.J.
605, 613 (1982)).
In Boss, a utility company sought to cut down trees on a
residential property rather than trim and prune them under a
long-standing easement. Id. at 36-37. This Court concluded
that a provision in the easement needed to be interpreted in
accordance with regulations of the Board of Public Utilities
18
(BPU) prior to any judicial action, reasoning that “when the
determination of the legal issue must be preceded by ‘the taking
of the necessary evidence and the making of necessary factual
findings,’ it is best done by the administrative agency
specifically equipped to inquire into the facts.” Id. at 39-40
(quoting Roadway Express, Inc. v. Kingsley, 37 N.J. 136, 140
(1962)). Thus, the Court remanded the case, instructing that
the BPU Commissioners make factual findings, which would then be
submitted to the trial court for a decision on the legal issue.
Id. at 42.
By contrast, this Court found that, in the interest of
justice and an expeditious remedy, a taxpayer need not pursue a
formal appeal to an agency for a refund of over-assessed taxes
paid because of clerical errors on the part of the municipality.
Farmingdale Realty Co. v. Borough of Farmingdale, 55 N.J. 103,
110-11 (1969). Focusing on administrative exhaustion, this
Court reasoned that, although the taxpayer might have appealed
to the agency, the trial court appropriately could enter a
judgment because the case involved only legal questions. Id. at
112-13.
Moreover, where the Legislature did not provide an adequate
remedy for relief before the agency and did not intend to
prevent persons from seeking such recourse before the courts, we
held that individuals may bring common-law claims in the
Superior Court, even when the subject matter of the claims is
19
related to the agency’s purview. Campione, supra, 155 N.J. at
260. In Campione, the plaintiff sought to recover money damages
for malicious prosecution, breach of contract, and
discrimination based on the defendant casino’s enforcement of
gaming regulations against plaintiff for card counting. Id. at
249. When analyzing the Casino Control Act (CCA), N.J.S.A.
5:12-1 to -142, this Court found that the Legislature did not
create a forum for private individuals to bring grievances
before the Casino Control Commission (CCC), and the Court
therefore held that the plaintiff had properly filed his claims
in the Superior Court. Id. at 262. On the other hand, the
Court determined that primary jurisdiction was applicable to the
extent that the claim depended on interpretation of the CCA or
agency regulations, and ordered that the case should be referred
to the CCC for consideration of those matters alone. Id. at
264.
Although no formula exists to evaluate the applicability of
primary jurisdiction, our courts have been guided by a four-part
test, basing primary jurisdiction decisions on
1) whether the matter at issue is within the
conventional experience of judges; 2)
whether the matter is peculiarly within the
agency’s discretion, or requires agency
expertise; 3) whether inconsistent rulings
might pose a danger of disrupting the
statutory scheme; and 4) whether prior
application has been made to the agency.
[Boldt v. Correspondence Mgmt., Inc., 320
N.J. Super. 74, 85 (App. Div. 1999).]
20
IV.
Applying these principles to this appeal, we conclude first
that primary jurisdiction is not applicable in the setting of
this contribution claim. We hold that plaintiff property owners
or other responsible parties are permitted to file contribution
claims in Superior Court, and a court may allocate liability
before the final resolution of a site remediation plan by the
DEP.
First, dischargers statutorily are afforded the same right
as the DEP to sue other potentially responsible parties in order
to recover contribution costs for contamination where other
parties caused a portion of the discharge. There is no question
that the DEP has the authority to sue “any party responsible”
for cleanup costs following the DEP’s remediation of a site.
See N.J. Dep’t. of Envtl. Prot. v. Dimant, 212 N.J. 153, 159
(2012) (finding that to recover costs from responsible party,
DEP must show reasonable nexus between discharge, discharger
and contamination at the damaged site). At the time of filing,
and anytime as permitted by Rule 4:29-1, the DEP may join as
defendants in the suit as many or as few potentially responsible
parties as the agency deems necessary. N.J.S.A. 58:10-
23.11g(c). Because the DEP may join a party at the onset of a
claim, prior to determining the full extent of the
contamination, it follows that a private entity is granted that
21
same right to hold a responsible party accountable through a
contribution claim. To deny this right would be fundamentally
unfair, especially where the contribution plaintiff could be
liable for a substantial amount of cleanup costs, even when not
entirely -- or even substantially -- responsible for the
contamination.
Additionally, the Spill Act gives the court, not the DEP,
jurisdiction over contribution claims. N.J.S.A. 58:10-
23.11f(a)(2)(a). For example, if the DEP initiates
administrative proceedings against a discharger for
contamination of land, a discharger is permitted to file a
contribution claim so that the court can assign liability among
the potentially responsible parties. In such situations,
because the Legislature did not intend for private parties to
use the DEP as a forum to bring contribution claims, the only
recourse private-party dischargers have to obtain contribution
from other responsible parties is in the Superior Court. Just
as the CCC was not an appropriate place to bring common-law
claims against casinos, Campione, supra, 155 N.J. at 262, here,
the DEP is not the proper venue for dischargers to bring
contribution claims. Through the Spill Act, the Legislature
instructed that contribution claims should be filed in the
Superior Court. See N.J.S.A. 58:10-23.11f(a)(2)(a).
In its August 21, 2003 letter to Magic, the DEP implicitly
conceded that a claim for contribution, and specifically the
22
allocation of liability, is a form of recourse not within the
DEP’s jurisdiction. In that letter, the DEP expressly directed
that the determination of the percentage of liability is best
resolved either between the parties or “before the [c]ourt.”
Thus, the DEP clarified that the agency was not the proper forum
in which to debate or distribute liability among potentially
responsible parties.
Moreover, contribution claims do not necessitate the
expertise of the DEP. A contribution claim allocates liability.
Assigning liability is a matter within the conventional
experience of judges. Judges are tasked with assigning
liability in related Spill Act cases where the DEP sues a party
responsible for contamination of a site to recover cleanup
costs. Both in contribution cases and in general Spill Act
litigation, there is no question that the trial court may engage
in allocating a percentage of liability based on the factual and
expert proofs regarding the presence and volume of contaminants
on the land and the origin of those contaminants.
Additionally, the testimony of expert witnesses is both a
necessary aspect of the contribution case, integral to proving
liability, and a trial component with which judges are
intimately familiar. Thus, although the contribution claim
contains factors within the purview of the DEP, DEP expertise is
not essential in reaching a final decision on liability
allocation.
23
Therefore, it follows that the DEP and the courts share
concurrent jurisdiction over the recovery of cleanup costs.
Private parties are required to turn to the courts to seek
contribution from other entities that caused contamination on
the land in the form of a percentage of liability. Ultimately,
the final determination of costs will be dictated by the
remediation project and overseen by the DEP and the LSRPs.
Finally, it would be contrary to the stated goals of the
Spill Act -- which promotes prompt remediation -- to force a
discharger to bear the burden of the entire cleanup cost until
such time as the remediation is fully complete. The completion
of a site’s remediation may take many years and could involve
substantial expenses. To force one party to shoulder such an
amount could prevent remediation from proceeding promptly by
generating a disincentive for the party to put forth the
financial contribution. Similarly, compelling one party to pay
all the cleanup costs would be inimical to the stated goals of
the Spill Act, particularly when that one party was not entirely
at fault for all of the contamination. Therefore, we hold that
a party determined to be a discharger and held responsible for
the cost of cleanup by the DEP is entitled to bring a
contribution claim against other potentially responsible parties
before the final tally of cleanup costs. Such a determination
is consistent with the Legislature’s intent to encourage
expeditious and efficient remediation of site contamination.
24
V.
We next turn our attention to whether the DEP’s written
approval of the investigation and remediation plan is needed
prior to filing a claim for contribution. We conclude that it
is not. We base this decision on the plain language of the
statute and the clear Legislative intent to amend the Spill Act
to clarify and permit a private claim for contribution.
ExxonMobil maintains that N.J.S.A. 58:10-23.11f(a)(2)(a)
permits parties to only recover “clean up and removal costs” in
a contribution claim. N.J.S.A. 59:10-23.11f(a) provides that,
[w]henever one or more dischargers or
persons cleans up and removes a discharge of
a hazardous substance, those dischargers and
persons shall have a right of contribution
against all other dischargers and persons in
any way responsible for a discharged
hazardous substance or other persons who are
liable for the cost of the cleanup and
removal of that discharge of a hazardous
substance.
[N.J.S.A. 58:10-23.11f(a) (emphasis added).]
The Legislature defines “cleanup and removal costs” as
all direct costs associated with a
discharge, . . . incurred by the State or
its political subdivisions or their agents
or any person with written approval from the
department in the: (1) removal or attempted
removal of hazardous substances.
[N.J.S.A. 58:10-23.11b (emphasis added).]
Accordingly, ExxonMobil asserts that Magic cannot recover for
contribution expenses until Magic has “written approval from the
department.” We disagree.
25
The Legislature was clear in instructing contribution
plaintiffs on the necessary proofs to succeed on a claim for
contribution, dictating that plaintiffs need only to prove that
a contribution defendant is liable for a discharge under the
Spill Act in order to prevail on a claim. N.J.S.A.
58:10-23.11f(a)(2)(a). (“In an action for contribution, the
contribution plaintiffs need prove only that a discharge
occurred for which the contribution defendant or defendants are
liable pursuant to the provisions of [N.J.S.A. 58:10-23.11g(c)],
and the contribution defendant shall have only the defenses to
liability available to parties pursuant to [N.J.S.A. 58:10-
23.11g(d)].”).
Thus, the argument in favor of requiring written approval
of a remediation plan is of no moment in this case. The issue
of allocation of liability is independent from the issue of the
total amount of the costs. N.J.S.A. 58:10-23.11f(a)(2)(a) does
not address the final determination of costs, only the
allocation of liability. Magic is not requesting that the court
assign a final allocation of cleanup costs. Rather, Magic is
only seeking that the court assign a percentage of liability, a
determination that does not require DEP approval.
According to the plain language of the statute, it is clear
that N.J.S.A. 58:10-23.11f(a)(2)(a) limits cleanup and removal
costs to only those costs approved by the DEP. However, the
provision does not pertain to the allocation of those costs.
26
While dischargers are required to have written approval for the
actual expenses that they incur for the purpose of remediation
in order to seek contribution for those expenses, that is not a
prerequisite to allocation of responsibility for the costs
associated with the approved remediation.
Mandating written approval prior to the filing of a
contribution claim would thwart the purpose of allowing
contribution claims, which the Legislature explained was to
encourage expeditious and efficient remediation. See Statement
to S. Substitute S. No. 2657, supra, at 1-2. Forcing
contribution plaintiffs to obtain written approval from the DEP
would lengthen the cleanup process and discourage parties from
cooperating with the DEP.
Therefore, we hold that written approval for the
remediation plan is not required prior to filing a contribution
claim.
VI.
The judgment of the Appellate Division is reversed and the
case is remanded for proceedings consistent with this opinion.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, and ALBIN, and
JUDGES RODRÍGUEZ and CUFF (both temporarily assigned) join in
JUSTICE FERNANDEZ-VINA’s opinion. JUSTICE PATTERSON did not
participate.
27
SUPREME COURT OF NEW JERSEY
NO. A-46 SEPTEMBER TERM 2012
ON CERTIFICATION TO Appellate Division, Superior Court
MAGIC PETROLEUM CORPORATION,
Plaintiff-Appellant,
v.
EXXON MOBIL CORPORATION and
MARIE TIRICO,
Defendants-Respondents,
and
TRENTON OIL COMPANY and M.M.
WERTHEIM CORPORATION,
Defendants,
and
EXXON MOBIL CORPORATION,
Defendant/Third-Party
Plaintiff-Respondent,
v.
LINKING RING PETROLEUM,
Third-Party Defendant.
DECIDED July 28, 2014
Chief Justice Rabner PRESIDING
OPINION BY Justice Fernandez-Vina
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
REVERSE AND
CHECKLIST
REMAND
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON ----------------------- ---------------------
JUSTICE FERNANDEZ-VINA X
JUDGE RODRÍGUEZ (t/a) X
JUDGE CUFF (t/a) X
TOTALS 6
1