New Jersey Decision Further Defines Scope of State's NRD Claims

September 8, 2009
Client Alert Newsletter September 2009

In NJDEP v. Exxon Mobil Corporation, which appears to be the seminal New Jersey case tackling novel legal issues regarding the New Jersey Department of Environmental Protection’s ("NJDEP's") authority to recover natural resource damages ("NRDs") and the scope of those claims, Judge Anzaldi addresses defendant Exxon Mobil Corporation's ("Exxon's") most recent challenge to plaintiff’s NRDs claims in a July 24, 2009 letter opinion. Exxon’s motion sought partial summary judgment on the ground that NJDEP can only recover NRDs under the New Jersey Spill Compensation and Control Act ("Spill Act") or common law for property it holds in the "public trust," and since several portions of the property at issue are not within the public trust, NJDEP cannot seek damages for any alleged injury thereto. The sections of property Exxon argues fall outside of the public trust include: private uplands, former tidal wetlands which the state has disclaimed any rights to, and tidally flowed lands conveyed in fee to Exxon or its predecessor. With respect to the private uplands portion of the property, Exxon argued that the area is not within the public trust, as the public trust doctrine only encompasses resources including the air, water and tidally flowed lands - which does not include land above the mean "high water mark" (i.e., the upland). While ultimately rejecting Exxon's argument, Judge Anzaldi acknowledged that the public trust doctrine had not yet been applied to private uplands, but nevertheless determined that, "the Spill Act clearly permits restoration and recovery of property no matter where located or created."

With respect to the current or former wetland portions of the property, Exxon claims such lands were removed from the public trust when the state failed to claim them as required under the 1981 Riparian Claim Amendment ("RCA"), or were conveyed to Exxon from the state in fee in an effort to transform the wetlands into private upland property. NJDEP contends in response that the citizens of New Jersey did not relinquish their rights under the public trust and/or Spill Act upon enactment of the RCA, and further, that while lands conveyed to Exxon may have transferred development rights to the property, it did not allow the pollution of the land. Agreeing with NJDEP, Judge Anzaldi held that "neither Riparian Amendment, nor grants made of riparian lands to Exxon or its predecessors removes the State's rights as public trustee to seek damages for contamination."