USA – NEW JERSEY Law and Practice Contributed by: Nicole Dory, Christina Sartorio Ku, Meredith Rubin and Camryn Goldstein, Connell Foley LLP
5.3 Key Defences To defend claims of civil environmental liability in New Jersey, the key defences include the “innocent purchaser” defence, the absence of fault, interven- ing cause, statute of limitations, contributory or com- parative negligence, or state-of-the-art or compliance with regulatory requirements at the time of release. The innocent purchaser defence provides a defence to liability for certain property owners who acquire contaminated property without knowing or having reason to know about contamination, provided they performed “all appropriate inquiries” before purchase, which includes conducting a ASTM Phase I Environ- mental Site Assessment before purchase and may also require the purchaser to perform a Preliminary Assessment (PA) and Site Investigation (SI) that meets the requirements of state law. To defend claims of regulatory liability for the viola- tions of permits or approvals, permit holders may demonstrate compliance with permit conditions, that they exercised reasonable care, or they fulfilled monitoring and reporting requirements. In New Jer- sey, regulatory liability and enforcement actions may also be mitigated by – eg, self-reporting and prompt action upon learning of a discharge, co-operating with the NJDEP, and demonstrating remedial progress in response to violations. While these defences exist, they may be of limited val- ue given New Jersey’s statutory scheme of strict liabil- ity for contamination, including for historical releases. 6. Corporate Liability 6.1 Liability for Environmental Damage or Breaches of Environmental Law Under New Jersey law, corporate entities may be held liable for environmental damage or regulatory viola- tions. Such liability can include strict liability for the release of hazardous substances, remediation obliga- tions, permit violations and cost-recovery actions. The NJDEP and the OAG can seek civil penalties, injunc- tive relief and even criminal sanctions. Further, the “responsible corporate officer” (RCO) doctrine allows liability of corporate officers who had authority and responsibility to prevent violations, but failed to do
so. The corporate entity itself, as operator or permit- holder, may also be subject to enforcement if it failed to comply with environmental laws or permit condi- tions, or caused contamination. Corporate liability for environmental violations is enforced in New Jersey, particularly in actions involving the remediation of contaminated sites and enforcement actions in over- burdened communities. New Jersey’s ERA also allows private citizens to sue entities that violate environmen- tal laws if such violations are not being addressed by the government. 6.2 Environmental Taxes New Jersey imposes several environmental taxes under various statutes, targeting specific activities and substances to address environmental concerns. The Spill Act levies an excise tax, known as the Spill Tax, on petroleum products and designated hazard- ous substances at the point of first transfer and that are located at “major facilities,” which are facilities that store, process, handle, produce, refine, transfer or transport hazardous substances and have a total storage capacity of 20,000 gallons or more of haz- ardous substances, excluding petroleum products, or 200,000 gallons or more of all hazardous substances, including petroleum products. The funds collected are allocated to the Spill Compensation Fund to provide funding for the remediation of hazardous substances. The Solid Waste Management Act imposes taxes on owners or operators of sanitary landfill facilities that include a solid waste services tax, a resource recov- ery investment tax, and a solid waste importation tax. There is also a recycling tax on solid waste collected for transfer out-of-state. Under New Jersey’s tax law, excise taxes are imposed on sewerage and water corporations operating in the state. New Jersey does not have an “environmental tax” scheme like some other jurisdictions, but it dedicates a portion of corporate business tax revenues to environ- mental programmes. The state also has implemented mechanisms to address greenhouse gas emissions, such as emissions trading programmes and incentives for reducing carbon emissions.
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