Murphy AG and DEP Rubber Stamp Christie Pollution Settlement With Big Oil

Posted on March 13, 2018 by Bill Wolfe

Continuity with Christie corporate friendly lax DEP enforcement policy

AG rubber stamps Christie Deals BEFORE legal & policy review of DEP NRD program

Deals call into question Murphy’s promise to restore NJ environmental leadership

The state “knows it has a weak legal hand,” making it reluctant to push too hard and more willing to settle, Wolfe said, adding that Exxon’s lawyers are “sharp enough to know this” too.

“There’s this wink and a nod going on where the DEP is saying, ‘We won’t squeeze you too hard if you just come to the table and settle,’” Wolfe said, adding that it’s been “a quiet little dance for 10 years,” with the state knowing it can’t get more than pennies on the dollar. ~~~ NJ Law Journal

[Update – 3/14/18 – even though the public comment period is closed and the Court has approved these settlements as final, to illustrate these problems, today I filed an OPRA for the following documents. We’ll keep you posted with what we find:

I request copies of the Natural Resource Damage Assessments DEP conducted for MTBE injuries to groundwater in support of the NRD Settlements that were announced by Attorney General Grewal’s 3/12/18 press release, including Sunoco, BP, Amoco, Atlantic Richfield, Shell, and all others. ~~~ end update 

The day before Gov. Murphy’s first budget address – when he surely knew the State House press corps would be focused exclusively on that – Murphy’s Attorney General  Grewal quietly announced a controversial “Natural Resource Damage” (NRD) settlement with Big Oil (Sunoco, BP, Amoco, et al).

Curiously, the AG’s press release did not provide a link to the text of the Settlement documents, which is really disturbing, given that law requires a public comment period and all prior DEP NRD settlements have been posted for public comment. (But, emulating Trump, the AG’s release did provide a link to the AG’s Twitter feed. What bullshit!)

[Update – clarification: the AG’s press release was issued after the public comment period closed:

Notice of the three proposed settlements was previously published in the New Jersey Register. All three settlements were subject to a public comment period, and all three have been reviewed and approved by the U.S. District Court for the Southern District of New York. ~~~

That means that they were Christie negotiated and proposed settlements and are final. So why issue the Murphy administration celebratory press release now after the fact? The AG is effectively praising the Christie AG and DEP, so the whole problem is actually worse than I thought. The Murphy administration is not reluctantly accepting the Christie deal in anticipation of reforming the NRD policy and program. The are praising the existing Christie program and have no intention of any reforms to strengthen it.~~~ end update]

In addition to the budget diversion, AG Grewal on the same day issued a press release about his opposition to the Trump Administration’s off shore drilling plans. He was likely seeking to divert the depleted environmental press corps.

The attempted news management didn’t work, at least at NJ Spotlight, who reports today (read the whole story)

The Murphy administration yesterday said it has settled cases with three oil companies who have agreed to pay nearly $200 million for polluting water with a potential human carcinogen.

Attorney General Gurbir S. Grewal announced approval of draft settlements reached by the Christie administration to resolve natural-resources damage lawsuits against the three defendants involving contamination of groundwater with an additive to gasoline.

Two hundred million dollars is a betrayal of the public and pennies on the dollar of the actual “natural resource damage” caused by these billion dollar corporate polluters.

The Christie administration faced lawsuits and was pilloried by the public, media, legislators, and environmental groups for their pennies on the dollar settlement of the DEP’s $8.9 billion NRD Exxon claim.

So surely, Gov. Murphy, AG Grewal, and Acting DEP Commissioner McCabe all had to know that the NRD issue was controversial and that the Christie Administration’s NRD settlement policy was polluter friendly, and warranted legal policy review and regulatory reforms at DEP.

The MTBE litigation has been ongoing for over a decade – the AG couldn’t wait another few months for reforms to be put in place?

Worse, AG Grewal had to know that the underlying flaw in DEP’s NRD program was LEGAL and that Christie AG  settled the Exxon NRD case because of what he saw as “litigation risk”. (sorry, the State of NJ’s links to the Christie AG settlement and Judge Hogan’s opinion are no longer working.)

As the NJ Law Journal reported, the lack of DEP NRD regulations created litigation risk that drove the pennies on the dollar settlement:

The proposed $225 million pollution settlement between New Jersey and Exxon Mobil Corp. has been criticized as inadequate, given the state’s nearly $9 billion damages claim, but some lawyers and environmentalists have questioned whether the state’s valuation of the case would have withstood judicial scrutiny.

Murphy’s Acting DEP Commissioner McCabe is an attorney and former US Justice Department natural resource lawyer, so surely she understands the legal and policy weaknesses of the Christie NRD legal policy and DEP program.

So why on earth did Murphy AG Grewal (and DEP McCabe) rubber stamp the Christie draft settlements BEFORE conducting a policy review and public process of reform, including promulgating DEP NRD regulations that the courts have found necessary?

Former DEP Commissioner Brad Campbell entered into a settlement agreement to promulgate NRD regulations years ago (but never honored his legal commitment to the court).

As the NJ Law Journal reported:

The plaintiffs asked the court to compel the DEP commissioner “to promulgate and adopt the method of quantifying [the] alleged legal obligation to compensate the state for groundwater NRD in accordance with the provision of the New Jersey Administrative Procedures Act.” The case settled soon after, with the state agreeing to adopt formal rules….

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.”

Acting DEP Commissioner McCabe either signed off on this deal or was cut out of the loop.

If she signed off – before even having the opportunity to conduct a policy review of DEP’s NRD program and soliciting public input on much needed reforms – she is either incompetent or an unprincipled coward.

If she was cut out of the loop, she should resign.

This NRD settlement is an outrage that should spawn the same condemnations that the Christie Exxon sweetheart NRD deal did.

Furthermore, it calls into serious question Gov. Murphy’s repeated rhetoric and commitments to reverse the Christie environmental policies and restore NJ’s environmental leadership.

Unfortunately, we were not surprised, because from the day the Transition Team was announced, we understood that Gov. Murphy was a corporate Democrat and that he was surrounded by and listening to corporate Democrats.

Similarly, we have criticized Acting DEP Commissioner McCabe for a series of mis-steps that amount to continuity with the Christie policy (see this and this and this and this), so this MTBE NRD deal is part of a deeply troubling pattern, just another – but much larger – mistake.

I could be wrong – perhaps McCabe has done her homework and just doesn’t want to step out of the corporate Democrat line and become another deposed DEP Commissioner like her only female predecessor, Judy Yaskin, see: this old NJ Spotlight story

In the case of the Salem nuclear power plants, the controversy stretches back nearly three decades to the days of former Gov. Jim Florio’s administration. Then-Department of Environmental Protection Commissioner Judith Yaskin ordered cooling towers to installed at Salem — at a cost at that time estimated to be $2 billion –– citing a study that found the plant killed more fish each year than commercial fishermen harvested from Delaware Bay. …

Scott Weiner, who succeeded Yaskin as DEP commissioner, reversed the Salem cooling-tower decision. Instead, PSEG agreed to undertake a massive restoration program of more than 20,000 acres of tidal wetlands along the shores of the Delaware Bay. After he left state government, Weiner worked briefly as a consultant to PSEG.

Somehow, I smell Boss George Norcross and Senate President Sweeney’s scent on this dirty deal. There were NRD settlement precedents with Big Oil in Sweeney’s District.
And aside from NRD settlements, we know how Sweeney took care of the same corporate polluters in loopholes and subsidies in NJ’s climate bill – the same goes for DEP enforcement of air pollution control regulations and chemical safety regulations, and drinking water standards, as well as toxic site cleanup requirements. Sweeney’s Assembly friend Burzichelli pushed legislation to rollback all NJ strict standards to federal minimums (an ALEC bill co-sponsored by ALEC NJ Chair Senator Oroho)
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