Court okays $165M Passaic River settlements

A Superior Court judge in Trenton has approved two settlements that will provide the state with $165.4 million in the ongoing Passaic River pollution litigation, Acting N.J. Attorney General John J. Hoffman and Department of Environmental Protection Commissioner Bob Martin announced last week.

Authorities said this also will permit the DEP to immediately proceed with its substantial legal claims against the principal defendant in the Passaic case, the Occidental Chemical Corp., which is accused of intentionally dumping dioxin and other chemical waste into the river for decades.

Hoffman hailed the two settlements, which were approved by the court last Thursday, as a vital step forward in the state’s effort to ensure that polluters pay all costs associated with the Passaic River cleanup and that New Jersey residents are compensated for damages caused by the pollution.

“The residents of New Jersey should not be forced to bear the cost of cleaning up the Passaic River, a precious natural resource damaged by industrial polluters,” Hoffman said.

“The cleanup of the lower Passaic River is extremely important to the health and safety of people who live and work along the river, and is one of our top environmental priorities,” stated Martin. “The parties responsible for the pollution should be accountable for the expense of the remediation.”

Under the first settlement approved by Judge Sebstian Lombardi, $130 million will be paid to the state by “nondischarging” defendants, including Spanish oil company Repsol, S.A., and Argentinabased energy conglomerate YPF, S.A., YPF Holdings Inc. and YPF International.

Also party to the settlement are CLH Holdings Inc., Maxus Energy Corp., Maxus International Energy Co. and Tierra Solutions Inc.

Under terms of the agreement, authorities said, the settling defendants’ total exposure to claims for Passaic cleanup, removal costs and damages could go as high as $530 million, subject to conditions related to resolution of the suit against Occidental.

In the second settlement approved by Lombardi, 261 third-party defendants — including 70 municipalities and other public entities — will collectively pay the state a total of $35.4 million. The state did not sue the third-party defendants. They were brought into the case by Maxus and Tierra, which had argued that pollution of the Passaic started more than two centuries ago and that many public and private parties contributed to its current condition.

Going forward, Hoffman explained, the state intends to pursue its claims against the one remaining nonsettling principal defendant, Occidental Chemical Corp., for future clean-up and removal costs related to contamination of the river.

The state also will pursue Occidental for damages resulting from the intentional discharge of Agent Orange, dioxins and other hazardous substances by the former Diamond Shamrock plant in the Ironbound section of Newark. The Passaic River litigation was launched by the state eight years ago against Occidental and other companies associated with the Newark plant.

From the 1940s through the ‘60s, Diamond Shamrock manufactured pesticides and herbicides, including the infamous defoliant Agent Orange, used during the Vietnam War. Over a period of many years, the state says, Diamond Shamrock discharged the known carcinogen dioxin, as well as other hazardous substances, into the Passaic River.

In 2012, Judge Lombardi entered a judgment against Occidental, holding it liable for all of the state’s clean-up and removal costs because Occidental is the legal successor to Diamond Shamrock.

The federal Environmental Protection Agency is currently finalizing a detailed plan for cleanup of the lower eight miles of the Passaic River. The report is expected to be released in early 2014.

–Karen Zautyk

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