Under the ACOs, the State of New Jersey reserved its right to recover additional "natural resource damages" (NRD), i.e., compensation for the injury and destruction of natural resources and the public's loss of the use and enjoyment of those resources. In August 2004, DEP filed two complaints against Exxon seeking NRD at Bayway and Bayonne, and asserting claims under the Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.24
Both DEP and Exxon moved pre-trial to bar the testimony of all or most of their adversaries' experts. Rather than conduct pre-trial hearings to determine admissibility, see N.J.R.E. 104(a), with the judge's approval, all experts testified while the parties preserved their objections. Utilizing a complex, mathematical methodology known as "Habitat Equivalency Analysis" (HEA), DEP's experts estimated that NRD damages at both sites totaled $8.9 billion. Exxon's experts challenged the admissibility of any opinions based on HEA in the first instance, although, as Judge Hogan noted in his written decision, Exxon's experts, utilizing HEA, estimated NRD damages to be between $1.4 and $3 million.
Under the terms of the proposed consent judgment, Exxon agreed to pay $225 million to the state treasurer, and the State agreed to place that money in a segregated account within the Hazardous Discharge Site Cleanup Fund, where the monies "shall earn interest and may not be used for any purpose" until the consent judgment "becomes final and non-appealable." The State also agreed to: release Exxon from all NRD claims based on the discharge of contaminants onto the soil and sediments of Bayway and Bayonne; dismiss surface water NRD claims without prejudice to raising them, under certain conditions, in a future action; release Exxon with prejudice and covenants not to sue for all NRD claims relating to more than one thousand Exxon retail gas stations in New Jersey, excluding those where methyl tertiary butyl ether (MTBE)
The parties further agreed that: the consent judgment would not alter, suspend, or otherwise impact Exxon's obligations under any ACO, except for the Morses Creek deferral; the State would retain full authority and sole discretion to require Exxon to take any action to "address an immediate environmental concern, an
DEP provided notice of the proposed consent judgment in accordance with N.J.S.A. 58:10-23.11e2. See Cumberland Farms, Inc. v. N.J. Dep't of Envtl. Prot.,
Before DEP responded to the comments and indicated whether it intended to seek approval of the consent judgment or not, Lesniak and the Environmental Groups moved to intervene in the lawsuit. In a written opinion, Judge Hogan denied those motions without prejudice.
DEP also noted "numerous and significant" legal and evidentiary issues in the lawsuit were still unresolved, with no assurance DEP would ultimately succeed. For example, early pretrial decisions in the
With Exxon's support, DEP subsequently moved before Judge Hogan for approval of the settlement. Judge Hogan permitted the Environmental Groups and Lesniak to appear as amicus curiae. They filed extensive briefs and orally argued against approval.
In a written decision and conforming order filed August 25, 2015, Judge Hogan approved the consent judgment, holding it was fair, reasonable, faithful to the Spill Act's goals, and in the public interest. He concluded that DEP had applied "rational methods" to estimate total damages and to determine what Exxon's fair payment would be for those damages, and that $225 million represented "a reasonable compromise given the substantial litigation risks the DEP faced at trial and would face on appeal." The
The Environmental Groups and Lesniak renewed their requests to intervene, arguing in part that intervention was appropriate so they could appeal Judge Hogan's approval of the consent judgment. By orders dated October 9, 2015, accompanied by a comprehensive written decision, Judge Hogan denied both applications with prejudice.
These appeals followed. We have consolidated them now for purposes of issuing a single opinion.
I.
Appellants argue Judge Hogan erred in concluding standing was a prerequisite to their intervention in the lawsuit, and, even if he was correct, they established standing both to intervene at trial and to challenge the court's approval of the consent judgment on appeal. We first consider whether standing is a prerequisite to intervention at trial, and, if so, whether appellants had standing to intervene.
A.
Our Rules of Court govern intervention at trial, and the trial court's interpretation of those rules is subject to our de novo review. Washington Commons, L.L.C. v. City of Jersey City,
(1) claim "an interest relating to the property or transaction which is the subject of the transaction," (2) show [that the movant] is "so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest," (3) demonstratethat the "[movant's] interest" is not "adequately represented by existing parties," and (4) make a "timely" application to intervene.
[ Am. Civil Liberties Union of N.J., Inc. v. Cty. of Hudson,, 67, 352 N.J. Super. 44 (App. Div. 2002) ( ACLU ) (quoting Meehan v. K.D. Partners, L.P., 799 A.2d 629 , 568, 317 N.J. Super. 563 (App. Div. 1998) ).] 722 A.2d 938
"As the rule is not discretionary, a court must approve an application for intervention as of right if the four criteria are satisfied." Meehan,
On the other hand, Rule 4:33-2 (emphasis added) permits intervention "[u]pon timely application ... if the claim or defense and the main action have a question of law or fact in common." The rule must be "liberally construed ... with a view to whether intervention will unduly delay or prejudice the adjudication of the rights of the original parties[,]" ACLU,
Whether permissible intervention or intervention as of right, a party must comply with the procedure set out in Rule 4:33-3 (emphasis added):
A person desiring to intervene shall file and serve on all parties a motion to intervene stating the grounds therefor and accompanied by a pleading setting forth the claim or defense for which intervention is sought along with a Case Information Statement pursuant to R. 4:5-1(b)(1).
Rule 4:33-3 requires the movant to set forth a "claim or defense" in its pleading to intervene. Rule 4:33-2, the more liberal permissive intervention rule, provides the standard to guide the motion court's exercise of discretion, i.e., intervention is appropriate "if [the movant's] claim or defense" presents "a question of law or fact in common" with the pending action.
Appellants argue that none of our reported cases has squarely held that a putative intervenor must establish standing in order to intervene successfully under either Rule 4:33-1 or 4:33-2. We do not necessarily disagree.
Rule 4:33-1 tracks the language of Fed. R. Civ. P. 24(a)(2) verbatim. Allstate N.J. Ins. Co. v. Neurology Pain Assocs.,
In other words, a court must grant intervention if the putative intervenor is on the same footing as someone the court must otherwise "join[ ] as a party to the action." R. 4:28-1(a). As one federal court explained, "[t]he only difference between intervention of right under [the analogous federal rule] and joinder under [the analogous federal rule] is which party initiates the addition of a new party to the case."
In 1986, the United States Supreme Court noted in Diamond v. Charles,
We are not, of course, bound by this federal precedent, but we find it persuasive, given the nearly verbatim equivalency between our Rules and their source, the Federal Rules of Civil Procedure. Moreover, the core concepts contained in Rule 4:33-1 governing intervention as of right-the movant must have an "interest" in the "subject of the action," which may be "impair[ed] or impede[d]" without intervention-find equal voice in our standing jurisprudence. See, e.g., In re Camden Cty.,
Further, for the reasons already stated, based upon the express language of Rules 4:33-2 and 4:33-3, we conclude that in deciding whether to permit intervention, the court should consider if the intervenor has standing in its own right to assert a claim or defense that presents a "common" "question of law or fact" with the pending action.
As we discuss more fully below, our standing jurisprudence has always evidenced "an approach that is less rigorous than the federal standing requirements." Camden Cty.,
B.
The concept of standing in a legal proceeding refers to a litigant's "ability or entitlement to maintain an action before the court." People for Open Gov't v. Roberts,
Our courts generally take a liberal view of standing, since, as noted, we are not confined by the "case or controversy" requirement of Article III, Section 2 of the United States Constitution. Camden Cty.,
Judge Hogan concluded appellants lacked standing for purposes of intervention. He reasoned: (1) appellants were not entitled to bring a claim for NRD because the Spill Act only authorized DEP to bring such suits; (2) appellants could not utilize the private right of action provided by the Environmental Rights Act (ERA), N.J.S.A. 2A:35A-1 to -14, because the ERA provides only declaratory and injunctive relief, and appellants could not establish inaction or inadequate action by DEP; and (3) appellants' intervention motions were procedurally deficient under Rule 4:33-3 because they failed to state a claim.
i.
In 1991, the Legislature amended the Spill Act to provide a private right of action for contribution so that pollution dischargers could share the costs of remediation with additional dischargers not so designated by DEP, i.e., non-settling entities. Magic Petroleum Corp. v. Exxon Mobil Corp.,
[A]ny person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs no matter by whom incurred. Such person shall also be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs incurred by the [DEP] ....
[ N.J.S.A. 58:10-23.11g(c).]
[DEP ] may commence a civil action in Superior Court for, singly or in combination:
(1) a temporary or permanent injunction;
(2) the costs of any investigation, cleanup or removal ... ;
(3) the cost of restoring, repairing, or replacing real or personal property damaged or destroyed by a discharge ... and any reduction in value of the property caused by the discharge by comparison with its value prior thereto;
(4) the cost of restoration and replacement, where practicable, of any natural resource damaged or destroyed by a discharge; and
(5) any other costs incurred by the department.
[ N.J.S.A. 58:10-23.11u(b) (emphasis added).]
ii.
Both appellants seemingly accept that the Spill Act provides no private right of action for citizens to seek NRD from a polluter. The Environmental Groups argue, however, that they have standing under the ERA because of DEP's inadequate enforcement; that is, DEP's decision to settle the lawsuit under the terms of the consent order. They also contend they have standing pursuant to the common law. We disagree.
"The ERA creates a private cause of action for declaratory and injunctive relief to protect the environment against 'pollution, impairment and destruction.' " Patterson v. Vernon Twp. Council,
Beginning with our decision in Township of Howell v. Waste Disposal, Inc.,
Although Judge Hogan found appellants failed to demonstrate DEP's actions in this case were inadequate, a conclusion with which we agree, any private right of action under the ERA is limited to "injunctive or other equitable relief to compel compliance with a statute, regulation or ordinance, or to assess civil penalties for the violation as provided by law." N.J.S.A. 2A:35A-4(a) ; see also Bowen Eng'g v. Estate of Reeve,
Moreover, even if we are wrong about the need to demonstrate standing in order to intervene at trial, any error in denying intervention in this case was not prejudicial and did not bring about an unjust result. R. 2:10-2. Appellants sought intervention solely to argue against the settlement. In granting both appellants' motions to file briefs and make argument as amici, Judge Hogan essentially permitted them to assert their claims as if they had intervened, and he considered fully the arguments they raised before approving the consent judgment. See Atl. Emp'rs Ins. Co. v. Tots & Toddlers Pre-School Day Care Ctr., Inc.,
II.
We come to what is the more difficult issue presented by these appeals. Judge Hogan's conclusion that appellants could not intervene to preserve a right to appeal is not entitled to any deference, because the trial court lacks authority to decide whether an appeal is cognizable in the Appellate Division and whether any
Lesniak contends DEP's decision to settle the litigation is akin to any other agency action, and, therefore, reviewable as of right on appeal pursuant to Rule 2:2-3(a)(2). We disagree, only to the extent that we are not reviewing agency action in this case, but rather the consent judgment approved by Judge Hogan. However, although appellants could not intervene at trial because they had no standing to pursue the claims made in the lawsuit, we must now consider whether appellants may challenge the merits of Judge Hogan's approval of the settlement before this court.
We have considered the ability of a non-party to file an appeal challenging the judgment entered by the trial court in a variety of settings. "In the post-judgment setting, motions for intervention have received mixed treatment by our courts." Warner Co. v. Sutton,
Similarly, federal courts have been circumspect in granting intervention post-settlement. See, e.g., R&G Mortg. Corp. v. Fed. Home Loan Mortg. Corp.,
Certainly, "[o]ur prior decisions have recognized the appropriateness of granting a party affected by a judgment leave to intervene to pursue an appeal if a party with a similar interest who actively litigated the case in the trial court has elected not to appeal." CFG Health Sys., L.L.C. v. Cty. of Essex,
CFG filed a new action, claiming the county's decision was arbitrary and capricious, and CHS's bid was fatally defective.
Before reaching the merits of the appeal and reversing, Judge Skillman wrote:
Our grant of CHS's motion for intervention was directly supported by the principles set forth in Chesterbrooke. CHS's position in this litigation was the same as the County's position; that is, the County's decision to rebid the contract was reasonable and should be upheld. Thus, CHS's position was adequately represented before the Law Division by the County. However, once the County elected not to pursue an appeal from the judgment of the Law Division invalidating its resolutions, CHS's position was no longer adequately represented by the County. Therefore, we reaffirm our decision to grant CHS leave to intervene in order to pursue this appeal.
[Id. at 385-86 ,.] 986 A.2d 695
Likewise, in Chesterbrooke,
We have also recognized a party's right to file an appeal following settlement in the trial court. Warner presented facts that are somewhat similar to this case. There, the appellant environmental groups sought intervention to appeal a settlement reached between a mining company and the local planning board. Warner,
We have also considered appeals brought by individuals and public interest groups that challenged settlements between DEP and others. See, e.g.,
Exxon argues appellants have no standing to appeal because they were not parties in the trial before Judge Hogan. Certainly, some of our opinions have implicitly or explicitly recognized that the intervenor-appellant had standing to pursue the claim in the trial court before bringing the appeal. See CFG,
However, we have not necessarily preconditioned the right to appeal upon participation in the prior proceeding. SMB Assocs.,
[T]his right to seek judicial review of administrative decisions inheres not only in those who are direct parties to the initial proceedings before an administrative agency ... but also belongs to all persons who are directly affected by and aggrieved as a result of the particular action sought to be brought before the courts for review.
Indeed, in its per curiam opinion affirming our judgment in SMB Associates, the Court concluded that the American Littoral Society (ALS) had standing to appeal CARB's final decision even though it had not participated in the agency proceedings.
The policy choice between the desire to have a manageable administrative hearing process (without a proliferation of parties) and the public interest in not having non-party objectors raise issues in judicial appeals that might better be resolved in the agency process is difficult. This case is atypical in that the position of the primary regulator (DEPE) in the administrative hearing was at variance with that of the final review body (CARB). ALS argues that it could not have foreseen that existing DEPE policy would not be applied to the case under review. ALS did not lay back to sandbag its opponents later. Thus, although our dissenting colleague makes an excellent argument that notions of fundamental fairness and exhaustion of administrative remedies should preclude sophisticated third-party objectors from intervening in litigation after observing its progress for several years, this is not the case for application of those principles. These facts are much too unusual to deny ALS standing to appeal, even though ALS should have made its position known earlier in the administrative process. Under the circumstances, the Appellate Division did not err in concluding that ALS, as an association concerned with the preservation of our coastal resources, had sufficient interests in the water-dependent development issues of this case to appeal the CARB action under Rule 2:2-3(a)(2).
[ SMB Assocs., , 137 N.J. at 61-62.] 644 A.2d 558
We therefore reject Exxon's argument.
DEP acknowledges that a party may challenge settlements under the Spill Act, but only if the challenger can independently assert standing. It contends that Lesniak's interests, as a resident of Elizabeth and legislator for that district, fail to provide him with standing. DEP argues that the Environmental Groups lack standing to appeal for some of the same reasons that prevented their intervention before Judge Hogan, noting no court has permitted a private third party to challenge an NRD settlement on appeal because private parties cannot sue for NRD under the Spill Act. It also argues that the Environmental Groups cannot appeal because DEP has adequately represented their interests throughout the litigation, including settlement of the lawsuit.
We conclude Lesniak lacks standing to pursue this appeal. We agree with DEP that he lacks a sufficient "personal or pecuniary interest or property right adversely affected by the judgement." A.L.,
We conclude, however, the Environmental Groups do have standing to appeal, based upon their broad representation of citizen interests throughout this state. We disagree with DEP that the Environmental Groups have no standing to appeal because DEP shares the same objectives they do, and the agency continues to adequately represent the groups' interests.
We recognize DEP's preeminent position as the agency designated by the Legislature to "formulate comprehensive policies for the conservation of the natural resources of the State, the promotion of environmental protection and the prevention of pollution of the environment of the State." N.J.S.A. 13:1D-9. We
Although we agree private actors cannot sue for NRD, the Legislature amended the Spill Act by enacting
prior to its agreement to any administrative or judicially approved settlement entered into pursuant to [the Spill Act], ... shall publish in the New Jersey Register and on the New Jersey Department of Environmental Protection's website the name of the case, the names of the parties to the settlement, the location of the property on which the discharge occurred, and a summary of the terms of the settlement, including the amount of any monetary payments made or to be made. The Department of Environmental Protection shall provide written notice of the settlement, which shall include the information listed above, to all other parties in the case and to any other potentially responsible parties of whom the department has notice at the time of the publication.
[Ibid. (emphasis added).]
We note that this section was enacted at the same time N.J.S.A. 58:10-23.11f(a)(2)(b) was added to the Spill Act, Cumberland Farms,
However, the statute's legislative history does not elucidate the Legislature's purpose in also requiring DEP to furnish a separate public notice of the court settlement. As we have noted, "[e]ven
We therefore conclude the Environmental Groups have standing to appeal Judge Hogan's decision approving the consent judgment. We now turn to that issue.
III.
Our cases have long recognized the necessity of holding a judicial hearing to approve a settlement in a variety of situations when significant public interests are involved. Courts have taken this approach when reviewing settlements of: land use litigation, see Friends of Peapack-Gladstone v. Borough of Peapack-Gladstone Land Use Board,
In Warner II,
The hearing on the proposed settlement is not a plenary trial and the court's approval of the settlement is not an adjudication of the merits of the case. Rather, it is the court's responsibility to determine, based upon the relative strengths and weaknesses of the parties' positions, whether the settlement is "fair and reasonable," that is, whether it adequately protects the interests of the persons on whose behalf the action was brought.
[ Morris Cty. Fair Hous. Council v. Boonton Twp.,, 370, 197 N.J. Super. 359 (Law Div. 1984) (citations omitted), aff'd o.b., 484 A.2d 1302 , 209 N.J. Super. 108 (App. Div 1986).] 506 A.2d 1284
We might add one further standard, although it seems implicit from Judge Skillman's description. The judge conducting the fairness hearing must conclude that the settlement does not exceed the legal authority of the public entity. See, e.g., Warner II,
In his written decision approving the settlement, Judge Hogan recognized that none of our state court decisions had addressed the applicable standard for his review of the proposed settlement. He analogized to the standard employed by federal courts in reviewing CERCLA settlements, citing New Jersey Department of Environmental Protection v. Atlantic Richfield Co.,
Judge Hogan extensively reviewed the history of the litigation, including prior settlement demands and offers. He carefully examined DEP's estimates of NRD for the Attachment C facilities and the retail gas stations included in the consent judgment, and the arguments raised by the Environmental Groups regarding those
Judge Hogan rejected any argument that DEP lacked authority to settle claims beyond the original pleadings. He reasoned the court had jurisdiction over Spill Act claims, and the consent judgment was "within the general scope of the case made out by the pleadings" and furthered the goals of the Spill Act. The judge summarized:
After years of litigation and negotiations, [DEP] and [Exxon] have resolved their disputes and potential disputes over Bayway, Bayonne, Paulsboro, fifteen other Attachment C Facilities, and 1768 Retail Gas Stations. Through the approval of the Proposed Consent Judgment, the DEP will recover $225 million for alleged natural resource damages, while still retaining their right to refile their Surface Water Claims and pursue MTBE pollution allegedly caused by Exxon. In reaching this result, the court finds that the DEP applied rational methods in order to estimate total damages and determine what a fair payment would be for those damages. Although far smaller than the estimated $8.9 billion in damages, Exxon's payment represents a reasonable compromise given the substantial litigation risks the DEP faced at trial and would face on appeal. Furthermore, the Consent Judgment is faithful to the Spill Act's goals and in the public interest.
The Environmental Groups make several arguments. They contend the amount Exxon paid is not reasonable based on DEP's experts' estimate of damages, and the judge did not properly consider the relative strength of the parties' litigation positions. They also argue Judge Hogan lacked jurisdiction, and DEP lacked authority, to settle CERCLA claims. The Environmental Groups further contend the consent judgment violates the Spill Act and CERCLA because it does not direct all recovered funds to be used for the remediation and restoration of natural resources.
We found no New Jersey decision that defines our standard for reviewing Judge Hogan's approval of the settlement following the hearing. Clearly, since Judge Hogan conducted the trial, heard the
The Environmental Groups and DEP both argue we should look to federal decisions regarding appellate review by circuit courts of district courts' approvals of CERCLA settlements. In one such case, the Third Circuit said:
Appellate review, therefore, is "encased in a double layer of swaddling." First, there is deference to the administrative agencies' input during consent decree negotiations and the law's policy of encouraging settlement. Where the appropriate agency has reviewed the record and has made a reasonable determination of fault and damages, that determination is owed some deference. Second, there is deference accorded the District Court under an abuse of discretion standard.
[ Tutu Wells,(quoting United States v. Cannons Eng'g Corp., 326 F.3d at 207, 84 (1st Cir. 1990) (internal citations omitted) ).] 899 F.2d 79
Accord United States v. George A. Whiting Paper Co.,
Here, Judge Hogan presided over an extended trial and the post-trial proceedings. He heard all the witnesses and considered all of the parties' arguments and submissions, including the issues raised by appellants, during his review of the proposed consent judgment. Judge Hogan had the best opportunity to gauge the strength of the experts' estimates regarding NRD, the relative
We lastly consider whether Judge Hogan committed a "material error of law" because (1) the court lacked jurisdiction, or DEP lacked authority, to release Exxon from CERCLA exposure, or (2) the consent order did not specifically limit redirection of the settlement funds away from the Spill Act Fund and remediation and restoration of natural resources in the State.
We agree with DEP that the agency does not need authority from the federal Environmental Protection Agency to decline prosecution of an environmental claim. None of the cases cited by the Environmental Groups supports their argument that DEP could not include as part of the consent judgment its intention to release Exxon from any CERCLA claims. The effect of the consent judgment upon possible unasserted claims of other parties is simply not before us.
DEP argues the Spill Act does not compel that all monies recovered by DEP be deposited in the Spill Act Fund. It cites other statutory provisions where the Legislature specifically required monies the agency recovered be deposited in specific funds. See, e.g., N.J.S.A. 58:10A-14.4 (requiring "all monies from penalties, fines, or recoveries of costs or improper economic benefits collected by the department" under the Water Pollution Control Act, N.J.S.A. 58:10A-1 to -14.6, to be deposited in the Clean Water Enforcement Fund). The Spill Act contains no such language.
Under the Appropriations Clause of the New Jersey Constitution, N.J. Const. art. VIII, § 2, ¶ 2, the power and authority to appropriate funds is vested in the Legislature. Burgos v. State,
Notes
The parties have not supplied full trial transcripts, see Rule 2:5-3(b), nor have they sought abbreviation of the transcripts pursuant to Rule 2:5-3(c). This deficiency has no impact on our review of the legal arguments raised, because they do not involve Judge Hogan's trial rulings or the actual evidence presented. But see Cipala v. Lincoln Tech. Inst.,
According to DEP, MTBE, used in gasoline, is highly soluble, migrates long distances very quickly, does not degrade readily and, at sites where MTBE has been discharged, represents, in relation to other hazardous substances, the greatest extent of groundwater plumes.
Although not contained in the consent judgment, Judge Hogan noted in his written opinion that "Exxon entered into ACOs for the Attachment C Facilities and Retail Gas Stations."
In their brief, the Environmental Groups argue that they had standing through the ERA under the "common law." The judge rejected this claim, concluding that both appellants could not bring a common law claim because they lacked an "ownership interest" in the polluted sites and their proposed complaints in intervention, filed pursuant to Rule 4:33-3, never included such a cause of action. Only Lesniak's complaint is in the appellate record, and it asserts no common law claim or claim under the ERA.
DEP made its non-privileged files on the Attachment C facilities available to the public for inspection.
As already noted, we do not have the transcripts of the trial itself. However, the Environmental Groups do not argue Judge Hogan's factual determinations were unsupported by the evidence, but rather, they challenge his assessment of that evidence.
The voters approved an amendment to our Constitution in November 2017 which prospectively addresses the Environmental Groups' concerns. Article VIII, Section II, paragraph 9, effective December 7, 2017, provides:
There shall be credited annually to a special account in the General Fund an amount equivalent to the revenue annually derived from all settlements and judicial and administrative awards relating to natural resource damages collected by the State in connection with claims based on environmental contamination.
The amount annually credited pursuant to this paragraph shall be dedicated, and shall be appropriated from time to time by the Legislature, for paying for costs incurred by the State to repair, restore, or replace damaged or lost natural resources of the State, or permanently protect the natural resources of the State, or for paying the legal or other costs incurred by the State to pursue settlements and judicial and administrative awards relating to natural resource damages. The first priority for the use of any moneys by the State to repair, restore, or replace damaged or lost natural resources of the State, or permanently protect the natural resources of the State, pursuant to this paragraph shall be in the immediate area in which the damage to the natural resources occurred in connection with the claim for which the moneys were recovered. If no reasonable project is available to satisfy the first priority for the use of the moneys, or there are moneys available after satisfying the first priority for their use, the second priority for the use of any moneys by the State to repair, restore, or replace damaged or lost natural resources of the State, or permanently protect the natural resources of the State, pursuant to this paragraph shall be in the same water region in which the damage to the natural resources occurred in connection with the claim for which the moneys were recovered. If no reasonable project is available to satisfy the first or second priority for the use of the moneys, or there are moneys available after satisfying the first or second priority for their use, the moneys may be used by the State to repair, restore, or replace damaged or lost natural resources of the State, or permanently protect the natural resources of the State, pursuant to this paragraph without geographic constraints. Up to 10 percent of the moneys appropriated pursuant to this paragraph may be expended for administrative costs of the State or its departments, agencies, or authorities for the purposes authorized in this paragraph.