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Gatx Terminals Corp. v. New Jersey Department of Environmental Protection

Decided: May 4, 1981.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 173 N.J. Super. 531 (1980).

For reversal -- Justices Sullivan, Pashman, Clifford, Schreiber and Pollock. For affirmance -- None. The opinion of the Court was delivered by Sullivan, J.


This appeal involves the validity of a portion of the regulations adopted by the Department of Environmental Protection (DEP) under the authority of the Spill Compensation and Control Act (SCCA), N.J.S.A. 58:10-23.11 et seq.

The SCCA provides for State control of the transfer and storage of hazardous substances, establishes no-fault liability for damages due to spills of such substances, creates the New Jersey Spill Compensation Fund for the payment of claims resulting from spills and imposes a tax on the owner or operator of each regulated facility to finance this fund. On January 6, 1977 the SCCA was approved and, shortly thereafter, the DEP proposed regulations for the administration of the Act. 9 N.J.R. 68-69 (1977). After public hearings and considerable debate, the Commissioner of Environmental Protection established a task force comprised of representatives from government, industry and environmental organizations to review these proposed regulations. This task force then developed a revised set of regulations which, with some modifications, was thereafter formally adopted. N.J.A.C. 7:1E-1.1 et seq.

The DEP regulations, as promulgated, are divided into four subchapters. Subchapter 1 outlines the scope of the regulations and provides definitions for key terms such as "Discharge," "Hazardous substances," "Major facility," "Spill" and the like. N.J.A.C. 7:1E-1.1 through 1.8. Subchapter 2 establishes procedures for discharge notification and response. N.J.A.C. 7:1E-2.1 through 2.3. Subchapter 3 provides standards for discharge cleanup organizations which engage or intend to engage in

cleanup and removal activities. N.J.A.C. 7:1E-3.1 through 3.2. Subchapter 4 requires major facilities to prepare and implement a discharge prevention, confinement or countermeasure plan and a discharge cleanup and removal plan. Additionally, Subchapter 4 establishes various standards for major facilities pertaining to construction, design, equipment, maintenance, security, inspection and personnel training. N.J.A.C. 7:1E-4.1 through 4.24.

GATX Terminals Corporation (GATX), one of the regulated major facilities, filed an appeal challenging the validity of the Subchapter 4 regulations on the ground that the language of the SCCA contains no authority for the DEP's promulgation of regulations affecting the design, construction or maintenance of such facilities. The Appellate Division sustained the challenge in part, ruling that the DEP's authority under the Act was limited to providing standards for "procedures, personnel and equipment" and did not extend to the regulation of design and construction. 173 N.J. Super. 531, 539 (1980). This Court granted certification to consider the DEP's contention that the Appellate Division ruling ignored the broad mandate of the Legislature and the clear remedial nature of the Act. 85 N.J. 109 (1980). For the reasons hereinafter set forth, the judgment of the Appellate Division is reversed and the regulations in question reinstated.

The SCCA reflects legislative awareness of the inherent dangers to the economy and environment presented by spills and discharges of hazardous substances. The legislative findings and declarations set forth therein are:

The Legislature finds and declares: that New Jersey's lands and waters constitute a unique and delicately balanced resource; that the protection and preservation of these lands and waters promotes the health, safety and welfare of the people of this State; that the tourist and recreation industry dependent on clean waters and beaches is vital to the economy of this State; that the State is the trustee, for the benefit of its citizens, of all natural resources within its jurisdiction; and that the storage and transfer of petroleum products and other hazardous substances between vessels, between facilities and vessels, and between facilities, whether onshore or offshore, is a hazardous undertaking and imposes risks of damage to persons and property within this State.

The Legislature finds and declares that the discharge of petroleum products and other hazardous substances within or outside the jurisdiction of this State constitutes a threat to the economy and environment of this State. The Legislature intends by the passage of this act to exercise the powers of this State to control the transfer and storage of hazardous substances and to provide liability for damage sustained within this State as a result of any discharge of said substances, by requiring the prompt containment and removal of such pollution and substances, and to provide a fund for swift and adequate compensation to resort businesses and other persons damaged by such discharge. [ N.J.S.A. 58:10-23.11a]

The Act prohibits the discharge of hazardous substances. N.J.S.A. 58:10-23.11c. It requires the owners or operators of a facility subject to the Act to submit detailed information to the DEP including a primary and contingency cleanup and removal plan for spills, an itemization of all equipment and trained personnel used or employed in any capacity at the facility to prevent discharges of hazardous substances, and a list of all precautionary measures followed to prevent discharges. N.J.S.A. 58:10-23.11d(a) - (e). Subparagraph (f) of the same section requires the DEP to promulgate rules and regulations "establishing standards for the availability of preventative, cleanup and removal procedures, personnel and equipment at any major facility . . ., as well as ...

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