MAPLEWOOD / SOUTH ORANGE / WEST ORANGE — The New Jew Jersey Office of the Attorney General and N.J. Department of Environmental Protection announced Sept. 15 that the Occidental Chemical Corporation has agreed to pay the state a $190 million settlement to end the Passaic River litigation.
In 2009, the Joint Meeting of Essex and Union Counties, a wastewater-treatment facility, was named as a third-party defendant, along with five other New Jersey sewage companies; 75 municipalities, including South Orange, Maplewood and West Orange; and more than 200 commercial entities.
According to a previous press release from the state, the state did not sue the third-party defendants; they were brought into the case by two of the settling defendants — Maxus Energy Corporation and Tierra Solutions Inc. In suing the third-party defendants, Maxus and Tierra argued that pollution of the Passaic River started more than two centuries ago and that many public and private entities had also contributed to its current condition.
Occidental was the sole remaining defendant that had yet to settle in the case of New Jersey Department of Environmental Protection, et al. v. Occidental Chemical Corporation, et al.
As members of the Joint Meeting, the sole allegation against Maplewood, South Orange and West Orange was that the towns contributed some discharge into Newark Bay, which subsequently flowed into the Passaic River.
According to state officials, the Occidental agreement represents a proposed settlement and is subject to a public comment period and review by a state Superior Court judge. Should the settlement be approved, the total amount recovered by New Jersey in the Passaic River litigation will reach $355.4 million.
Additionally, the proposed Occidental settlement calls for $50 million of the company’s payment to be used for natural resource restoration projects in and around the Newark Bay complex.
“If approved, this is an important legal outcome for the residents of New Jersey, and for our environment,” acting N.J. Attorney General John Hoffman said in the press release. “The citizens of our state should not be forced to shoulder the cost of repairing damage to one of our most precious natural resources — the Passaic River — by industrial polluters. Our objective throughout the Passaic River litigation has been to hold accountable those legally responsible for contaminating the river, and we have done so.”
“The cleanup of the lower Passaic River is vital to the health and safety of people who live and work along the river, and is one of the state’s top environmental priorities,” NJDEP Commissioner Bob Martin said in the release. “The parties responsible for the pollution should be accountable for the expense of the remediation, and not the taxpayers of our state. We have stood firm in that commitment and strongly support the settlement being announced today.”
In a prior court proceeding, Diamond Shamrock, the legal predecessor to Occidental, was found to have intentionally dumped hazardous pollutants into the Passaic River for decades. In 2011, a Superior Court judge entered a judgment against Occidental holding it liable for certain of the state’s Passaic River cleanup and removal costs. Among other hazardous substances, Diamond Shamrock discharged dioxins — a known carcinogen — into the river from its plant in Newark.
Last year, Superior Court Judge Sebastian Lombardi approved two prior settlements in the Passaic River litigation totaling $165.4 million, $17.4 million of which is earmarked for natural resource restoration projects in and around the Newark Bay complex. The first settlement resulted in payments to the state totaling $130 million by several non-discharging defendants, including Spanish oil company Repsol S.A., and Argentina-based energy conglomerate YPF S.A., YPF Holdings Inc. and YPF International. Also party to that settlement were CLH Holdings Inc., Maxus Energy Corporation, Maxus International Energy Company and Tierra Solutions Inc.
The second settlement involved the 261 third-party defendants. Under that settlement, the third-party defendants, including South Orange, Maplewood and West Orange, paid a total of $35.4 million to the state, with each municipality paying approximately $95,000 in damages apiece.
The towns’ governing bodies passed resolutions in March 2013 to settle the litigation. The Maplewood Township Committee passed Resolution No. 65-13 on March 19, 2013, in a 5-0 vote; the South Orange Board of Trustees passed Resolution No. 2013-054 on March 11, 2013, in a 5-0 vote; and the West Orange Township Council passed Resolution No. 61-13 on March 19, 2013, in a 4-0 vote
Factoring in all settlements, including the proposed Occidental settlement, a total of $67.4 million in payments to the state from the Passaic River litigation will be dedicated to natural resource restoration projects in New Jersey, according to state officials.
Occidental also has agreed under the proposed settlement to pay certain costs associated with the $1.7 billion plan for the cleanup of the lower 8 miles of the Passaic River announced by the federal EPA this past April.
It is expected that, if the DEP approves the proposed settlement following the required administrative notice and 30-day public comment period, it will be presented to the court for final judicial review and approval in December of this year, according to state officials.