NJ Superior Court Dismisses NJDEP's Natural Resource Damages Claim

November 16, 2007
by NICOLE MOSHANG
Client Alert Newsletter November 2007

On August 24, the New Jersey Superior Court Law Division dismissed with prejudice an attempt by the New Jersey Department of Environmental Protection ("NJDEP") to recover natural resource damages associated with ground water contamination in the Hillwood Lakes area of Ewing Township. In NJDEP v. Exxon Mobil Corp., Judge Mary Jacobson found that NJDEP failed to prove its claim for natural resource damages because it calculated such damages using a formula that was not vetted through the rulemaking process or supported by sufficient scientific evidence. NJDEP used the formula that it developed for its settlement program, which in this case resulted in the delineation of a 24-acre area of ground water contamination lasting 30 years, and the valuation of such ground water at a rate equivalent to prices charged by the Trenton Water Company. Speaking from the bench, Judge Jacobson found no support for NJDEP's use of the formula: "[T]he real problem with the expert opinion that [NJDEP] gave is that it depends entirely and admittedly on the surrogate ground water formula that the Department has used in its settlement program and now is attempting to use as the basis for its expert calculation of damages in this case, without adequate support in this record, scientific support in this record, for various elements of the formula and without having adopted the formula as a rule." Assuming other courts follow Judge Jacobson's ruling, NJDEP will have to prove its natural resource damage claims using a method that has been adopted by rule, or by presenting sufficient scientific evidence on a case-by-case basis. In the wake of the recent ruling, NJDEP has begun to engage outside experts in pending natural resource damage lawsuits who will purportedly attempt to support its claims through scientific evidence.