The Posturing and Hypocrisy On The Exxon Deal Is Stunning

Loudest Legislative Critics Responsible For Gutting NJ’s Cleanup Laws

Critics weren’t just “sitting on the sidelines”

Site Remediation Reform Act (PL 2009, c.60) – Senator Oroho (R-ALEC) was an additional Senate sponsor. McKeon sponsored the Assembly version.  Read the post and learn why this law is a disaster that is far worse than the Exxon deal.

I have written extensively about the Exxon deal, explaining why it is worse than was originally perceived. That post was a leading in depth early analysis that has been echoed by many others since more facts and analyses have come out.

Yes, the Christie Settlement in not in the public interest and could have and should have been far better. The inclusion of over 800 gas stations, 16 additional sites, and the collapse on recovery of the $8.9 billion in estimated damages are particularly egregious.

But the posturing by Democratic legislators has gone way over the top, so today we focus on exposing how the loudest critics and advocates of “the public interest” have systematically betrayed the public interest, advanced corporate interests, and privatized and gutted NJ’s cleanup laws.

Stay tuned – We name names.

Sitting on the sidelines?

Yesterday’s decision by Judge Hogan to reject the effort by environmental groups and Senator Lesniak to intervene in the case was based in part on the fact that these folks “sat on the sidelines” (to quote the Christie DEP’s brief) and raised no objections for over 10 years and therefore were too late to complain.

But the reality is far worse: as I’ve written previously, environmental groups were not “sitting on the sidelines” during that period, they were pigs at the trough, receiving NRD money from DEP and keeping quiet about what they knew were other pennies on the dollar settlements just like Exxon.

[There’s a lot of gnashing of teeth – correctly so – particularly from environmentalists about the fact that the communities that suffered Exxon pollution will not see any of the money. But NY/NJ Baykeeeper was given $1 million from a DEP settlement for a spill in the Arthur Kill. Did any communities on the Kill see a penny of that money? Nope, it went to a Baykeeper pet project: oyster restoration. And that was just one of many DEP NRD deals that quietly funded NJ environmental groups and their pet projects. Astonishing hypocrisy here.]

Meanwhile, Legislators weren’t “sitting on the sidelines” either – Oh no, they were very busy:

• failing to conduct legislative oversight of DEP’s NRD program, despite persistent valid criticisms, including failure to honor a judicial commitment to promulgate regulations courts found necessary to enforce the program;
• ignoring legal vulnerabilities exposed in Court cases that struck down DEP’s attempts to recover Natural Resource Damages (NRD); and
• gutting NJ’s cleanup laws, protecting corporate interests, and cutting communities out of the cleanup process

After over a decade of this kind of conduct by legislators – which we outline in more detail below – it is beyond hypocrisy for those same legislators who led he charge in dismantling NJ’s cleanup laws and ignoring serious NRD concerns to be the loudest critics of the Exxon deal.

Flaws in the settlement that betray the “public interest”

There are a few general themes that stand out in the various valid criticisms by legislators:

• the deal elevated corporate economic interests over the public interest
• the deal will allow the site to remain contaminated and not restore natural resources damaged by pollution
• the community was shut out and does not benefit from the settlement
• the deal contradicts the scientific findings and recommendations from DEP consultants that the actual damages were $8.9 billion
• there are several technical sweetheart provisions designed protect Exxon’s profits

So, let’s take these themes and apply them to the pattern of conduct by the Democratically controlled legislature over the last decade.

Legislative Neglect and Rollbacks

The DEP’s NRD program goes back to the 1990’s, but the program expanded greatly under the leadership of Gov. McGreevey’s DEP Commissioner Brad Campbell, who documented a universe of about 6,000 potential NRD cases due to groundwater contamination. [Full disclosure: I was involved in this while at DEP in 2002 – 2004 – read a law review journal piece on Campbell’s NRD expansion and the reaction it generated.]

Campbell got strong opposition from powerful corporate polluters, including their friends in the Legislature, who tried to thwart those efforts in various ways, including engaging in behind the scenes pushback, using the Gov.’s Office and oversight during budget hearings, and enacting a statute of limitations.

A similar story occurred during the tenure of Corzine DEP Commissioner Lisa Jackson, who filed 120 NRD cases to avoid statute of limitations problems.

So, here are specific examples of that long pattern of legislative neglect that served corporate interests:

1. Lack of oversight of DEP’s NRD program

Every year the Legislature reviews DEP’s budget, with includes NRD staff and settlement revenues. Did they ever ask how the program was working and whether DEP was adequately staffed and aggressively pursuing NRD recoveries?

The Legislature is presumed to follow the decisions of the Judicial Branch, particularly on important legal policy issues like NRD.

DEP settled a legal challenge to the NRD program and pledge to adopt regulations that Courts find necessary to enforce NRD recoveries. This history was reported by the NJ Law Journal:

A March 23, 2003, letter from deputy attorney general Richard Engel to Picco said the DEP “has long planned to promulgate regulations to improve the current Natural Resource Damage program” and “is currently developing its regulatory proposals, and plans to file one or more rule proposals prior to Aug. 1, 2005.” Engel’s letter said the “forthcoming rules clearly will afford the NJ SEED plaintiffs an administrative forum, subject to judicial review, in which to present policy and legal arguments presented in or related to the pending litigation.”

But the rule making never occurred, according to Picco.

“It’s never been done despite repeated requests to do it,” Picco said. “We followed up until it became clear that their inability to come up with rules was costing them in court.”

2. Failure to respond to Court decisions that narrowed or struck down DEP’s NRD claims

Over the last decade, the DEP lost 3 court cases, all of which struck down DEP’s attempts to recover NRD.

Typically, the Legislative branch closes legal loopholes identified in court decisions or crafts legislation to respond to court decisions where the legislature disagrees with the legal interpretation policy articulated by the court.

In this case, the Legislature sat on the sidelines as DEP was losing NRD cases and as a result of those losses negotiated pennies on the dollar NRD settlements.

Even the legal history of the Exxon case reveals weaknesses in current law that should have been addressed by the Legislature, particularly the DEP’s ability to recover “lost use”. Yesterday’s opinion by Judge Hogan discusses this legal history, citing Superior Court and Appellate Division decisions on that critical issue:

“Exxon cross- moved for summary judgment on the ground that the Spill Act does not provide liability for loss of use of natural resources. Ibid. Judge Ross Anzaldi, sitting as motion judge, granted both motions in part, holding that Exxon was strictly liable and dismissing the DEP’s claims for loss of use damages. Id. at 397-98. On appeal, Exxon did not contest Judge Anzaldi’s strict liability ruling. Id. at 398. The Appellate Division, however, reversed Judge Anzaldi’s loss of use ruling and held that loss of use damages “are a component of costs of mitigating damage to public natural resources.” Id. at 402.

Knowing that the DEP’s ability to recover for lost use of natural resources – which amounted to billions of dollars in the Exxon case – was legally vulnerable and could be appealed to the Supreme Court, the Legislature did nothing.

The legislature did nothing to oversee DEP’s NRD program to assure that they strengthen their ability to recover NRD.

That irresponsible inaction “let the courts” do corporate bidding.

3. Legislative rollbacks in Site Remediation Reform Act of 2009

While the Legislature abdicated its responsibility to oversee the NRD program or response to adverse court decisions, they did act – to a) dismantle NJ’s cleanup laws, b) privatize NRD and cleanup science and decision-making, and c) eliminate community involvement in cleanup decisions.

Specifically, the 2009 Site Remediation Reform Act (SRRA) – sponsored by the loudest Exxon critics: Senator Lesniak, Senator Smith and Assemblyman McKeon – did the following, all of which are the exact opposite of their criticism of the Exxon deal:

• privatized the science of NRD damage assessment and cleanup decisions

Among other things, the SRRA act allows Exxon’s consultants, with virtually no DEP oversight, to conduct “baseline ecological evaluations” (BEE) that document whether NR damages have occurred and trigger NRD recoveries. Exxon consultants also design cleanup plans and verify whether those plans comply with DEP standards.

Exxon’s legal briefs stated that their NRD liability was $0 – as in ZERO.

So, what do you think private consultants who work for Exxon would find in their BEE? Would they document $8.9 billion in NRD like the DEP’s consultant did? Keep dreaming. A consultant never puts a client’s neck in a billion dollar noose.

The SRRA also eliminated public participation in cleanup decisions and frustrated OPRA – so much for protecting the community and public interest, which are at the heart of the Exxon criticism.

The SRRA also allows corporate polluters to leave tons of highly contaminated soils, sediments and sludge on site forever – exactly like Exxon was allowed to do when Christie let them off the hook for restoring the site to original conditions, which would have required excavation and offsite disposal of over 9 million tons of this stuff.

There are several other provisions of the SRRA that also subvert the “public interest” to reduce corporate cleanup costs and NRD compensation, including elimination of compensation for lost use from the definition of remediation:

4. Ongoing current failures to correct serious flaws

Despite all these major problems, the Legislature has take only two small legislative steps to correct them: a bill to earmark 50% of settlement money to restoration; a bill to provide a 60 day public comment period on NRD settlements. There also is an effort to constitutionally dedicate the NRD money, but it needs work. There are other related problems, such as:

1. NJ Spill Act (State Superfund law) has a $50 million cap on liability for spills.

Legislation to increase or eliminate that cap is stalled in the Senate.

2. In response to Gov. Christie’s diversion of NRD settlement money, there is a Senate Concurrent Resolution (SCR 163 [1R]) to amend the Constitution to dedicate NRD settlement money to environmental restoration.

That SCR fails to explicitly include “compensation for lost use” opening the door to more legal uncertainty, corporate abuse and Court legal challenges.

With a record like this, it is remarkable that the same legislators now lambaste the Exxon deal, and do so with no accountability for this horrible legislative record that has protected corporate polluters and betrayed the public interest.

It is similarly stunning that the environmental community praises this hypocrisy.

And the cheerleading sycophants at BlueJersey are pathetic (think Bill knows that the environmentalists did not even try to challenge the legal presumption that DEP represents the public? Hogan almost ridicules that. DO you think Bill knows that judge Hogan was Whitman DEP “Open For Business” chief legal counselor? )