N.J. Dep't of Envtl. Prot. v. Exxon Mobil Corp.
181 A.3d 257
N.J. Super. Ct. App. Div.2018Background
- In 1991 DEP and Exxon entered ACOs requiring Exxon to remediate contamination at Bayway and Bayonne; DEP reserved natural resource damages (NRD) claims. DEP sued Exxon for NRD in 2004; extensive pretrial and trial proceedings followed, including bench trial in 2014.
- DEP's experts used Habitat Equivalency Analysis to estimate NRD at ~$8.9 billion; Exxon's experts produced far lower HEA estimates and challenged HEA admissibility.
- While the judge reserved rulings on expert admissibility, parties reached a consent judgment: Exxon paid $225 million; DEP released Exxon from many NRD claims (with carve-outs), kept enforcement authority under ACOs, and the judgment provided contribution protection language.
- DEP published statutorily required public notice and received ~16,000 public comments; environmental groups and State Senator Lesniak sought to intervene to oppose settlement—motions were denied (first without prejudice; later denied with prejudice to intervene to appeal).
- Judge Hogan approved the settlement after a fairness hearing, finding it fair, reasonable, consistent with Spill Act goals, and in the public interest; appeals followed by Lesniak and several environmental organizations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether standing is a prerequisite to intervene at trial | Appellants: standing is not strictly required by precedent; they can intervene to protect public/environmental interests | DEP/Exxon: Rules require a movant to assert a claim or defense (thus standing) before intervention | Court: Movant must demonstrate standing to assert an independent claim or defense under Rules 4:33-1/2/3; affirmed denial of trial intervention because appellants lacked standing to pursue NRD claims |
| Whether appellants may intervene post-judgment to preserve right to appeal | Appellants: may intervene after judgment to appeal settlement affecting public resources; public-interest groups have at least slight private interest sufficient for standing to challenge settlement | DEP/Exxon: appellants lack independent standing to appeal; DEP adequately represents public interest; private parties cannot sue for NRD | Court: Lesniak lacks standing; Environmental Groups have standing to appeal the consent judgment to protect public interests despite not having NRD claim |
| Appropriate standard for judicial review of the consent judgment | Appellants: settlement amount and scope are inadequate/unreasonable, court erred in assessing fairness and legal authority; must closely scrutinize relative litigation positions | DEP/Exxon: defer to agency and trial judge (who presided at trial); apply abuse-of-discretion standard and deference to agency’s expertise and settlement negotiations | Held: Judge Hogan did not abuse discretion—review defers to agency input and trial judge’s factual findings; settlement found fair, reasonable, consistent with Spill Act and public interest |
| Whether DEP lacked authority or judge lacked jurisdiction to release CERCLA exposure or to permit use/transfer of settlement funds | Appellants: settlement improperly releases federal CERCLA exposure and does not ensure funds are dedicated to NRD restoration | DEP/Exxon: agency need not obtain EPA permission; Spill Act does not mandate deposit of settlement proceeds into a particular fund; allocation/appropriation is a legislative function | Held: No legal error shown; court will not second-guess appropriation or budgetary allocation; DEP need not obtain federal authorization for settlement releases in this context |
Key Cases Cited
- N.J. Dep't of Envtl. Prot. v. Exxon Mobil Corp., 393 N.J. Super. 388 (App. Div. 2007) (prior appellate decision in the same litigation addressing liability and NRD claims)
- New Jersey Department of Environmental Protection v. Exxon Mobil Corp., 420 N.J. Super. 395 (App. Div. 2011) (appellate decision addressing statute of limitations and related issues in same litigation)
- Town of Chester v. Laroe Estates, Inc., 137 S. Ct. 1645 (U.S. 2017) (an intervenor of right must have Article III standing to pursue relief different from a party with standing)
- In re Tutu Water Wells CERCLA Litigation, 326 F.3d 201 (3d Cir. 2003) (federal standard: approve consent decrees that are fair, reasonable, and consistent with statute; appellate review affords deference to agency and district court)
- CFG Health Sys., L.L.C. v. Cty. of Essex, 411 N.J. Super. 378 (App. Div. 2010) (permitting intervention on appeal where an original party elects not to appeal and intervenor’s interests are no longer represented)
- SMB Assocs. v. N.J. Dep't of Envtl. Prot., 264 N.J. Super. 38 (App. Div. 1993) (addressing standing to challenge DEP/agency actions; affirmed in part by the N.J. Supreme Court)
- Cumberland Farms, Inc. v. N.J. Dep't of Envtl. Prot., 447 N.J. Super. 423 (App. Div. 2016) (statutory notice requirements for DEP settlements under the Spill Act)