Equity Affirms an Inventive Solution to an Environmental Dilemma

Matejek v. Watson, 449 N.J. Super. 179 (App. Div. 2017).  Sometimes, judicial opinions do not require the citation of many cases in order to reach their result.  That can be most true in cases involving Chancery issues, where inventive solutions sometimes go beyond what precedent may offer.  Today’s opinion by Judge Fisher in an environmental case is an example.

Oil was discovered in a tributary to a brook in Hillsborough.  There were five condominium units adjoining the area, one of those units owned by plaintiffs and another by defendants.  The Department of Environmental Protection (“NJDEP”) removed underground storage tanks from each of those units and visited the site a few months later to confirm the absence of oil in the tributary, but took no other action.  The NJDEP’s file remained open, however, creating a cloud on the title to each of the condominium units.

Seven years passed.  Plaintiffs then sued all the other condominium unit owners, seeking to compel them to participate in and share the cost of an investigation and, if necessary, remediation of the property.  Plaintiffs invoked the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.24 (“the Spill Act”), which makes dischargers of contamination jointly and severally liable for the entire cost of an environmental cleanup and permits a responsible party to seek contribution from other responsible parties.

The Chancery Division, after a bench trial, granted the relief sought.  The parties were directed to a retain a licensed site remediation professional (“LSRP”), and if the LSRP called for remediation, the parties were to share the cost of that remediation equally.

Defendants, alone among the unit owners, appealed.  Their “challenge to the judgment chiefly relies on the lack of evidence that they caused, in whole or in part, the contamination that warranted the NJDEP’s involvement.  The judge recognized this but found the circumstances did not preclude imposition of an equitable remedy by which that evidence might be revealed.”  Judge Fisher agreed.  Plaintiffs’ title was encumbered, and absent a remedy of this sort, plaintiffs would have had to assume the entire cost of remediation in order to remove the cloud on their title.  There was adequate remedy at law, so an equitable remedy was required.

The Spill Act may not have expressly contemplated this sort of action for contribution, Judge Fisher observed, but that did not call for reversal.  The Spill Act’s “general approach” now calls for findings by an LSRP, who affirms that a site is clean and then so advises the NJDEP, which can then conduct its own confirmatory investigation.  The result here sufficiently paralleled that approach as to make it an appropriate result.

The only cases that Judge Fisher needed to cite were some precedents to the effect that “a court’s equitable jurisdiction provides as much flexibility as is warranted by the circumstances,” and that “equity will not suffer a wrong without a remedy.”  Defendants invoked another maxim– “equity follows the law”– but Judge Fisher found that unavailing for two reasons.

First, as already noted, the Spill Act now leaves to private parties the burden of clearing clouds on their title, and absent a remedy of this sort plaintiffs would be stuck with all the costs.  Second, the Spill Act is to be liberally construed, as the N.J.S.A. 58:10-23.11x states and the Supreme Court has confirmed in caselaw.  A liberal construction that compelled further investigation was in the best interest of all parties, even if further litigation might occur after the LSRP reported on the outcome of that investigation.  The panel “commend[ed] the trial judge’s exercise of discretion in adopting an inventive solution- the necessity of which was compelled by all the relevant circumstances- in this particular situation.  This little gem of an opinion (only eight pages total) is a classic example of what Chancery is about it.