On March 23, 2011, the New Jersey Appellate Division issued an important decision regarding a property owner’s liability pursuant to the New Jersey Spill Act. In NJDEP v. Dimant, the Appellate Court held that liability under the Spill Act requires proof of some nexus (or connection) between the use or discharge of a hazardous substance and contamination in and around the surrounding area. In the below passage, the Court went further in clarifying and defining liability in Spill Act cases than (in my opinion) any time before:
It is also evident from the Spill Act’s definition of a “discharge,” which explicitly refers to resultant “damage[s],” that some nexus between the use or discharge of a substance and its contamination of the surrounding area is needed to support a finding of Spill Act liability.
A reading of this decision suggests that the mere ownership of property during the time the discharge is discovered (as opposed to when the discharge occurred) is not sufficient to impose liability. This is potentially very significant and will likely change the way NJDEP handles large regional, multi-party contaminated sites. It appears that in order for NJDEP to prove that a property owner or other potential responsible party (PRP) is liable for contamination on the site and/or of the surrounding area of the site, NJDEP must prove that the property owner and/or PRP was responsible for the discharge, i.e. did the owner or PRP use, store, or generate the contaminants that caused the resultant damage.