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State v. Ventron Corp.

Decided: December 9, 1981.

STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, PLAINTIFF-APPELLANT,
v.
VENTRON CORPORATION, A MASSACHUSETTS CORPORATION; WOOD RIDGE CHEMICAL CORPORATION, A NEVADA CORPORATION; ROBERT M. WOLF & RITA W. WOLF, HIS WIFE; UNITED STATES LIFE INSURANCE COMPANY, A NEW YORK CORPORATION, VELSICOL CHEMICAL CORPORATION AND F.W. BERK AND COMPANY, INC., DEFENDANTS-APPELLANTS, AND ROVIC CONSTRUCTION CO., INC., A CORPORATION OF THE STATE OF NEW JERSEY, BY ITS STATUTORY RECEIVER, JOSEPH KEANE, INTERVENOR-PLAINTIFF, V. VENTRON CORPORATION, A MASSACHUSETTS CORPORATION; WOOD RIDGE CHEMICAL CORPORATION, A NEVADA CORPORATION; VELSICOL CHEMICAL CORPORATION AND F.W. BERK & CO., INC., DEFENDANTS, AND MOBIL OIL CORPORATION, CHEVRON U.S.A., INC., TEXACO, INC., AND EXXON COMPANY U.S.A., FOREIGN CORPORATIONS AUTHORIZED TO DO BUSINESS IN THE STATE OF NEW JERSEY, PLAINTIFFS-RESPONDENTS, V. STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION AND STATE OF NEW JERSEY DEPARTMENT OF THE TREASURY, SPILL COMPENSATION FUND, DEFENDANTS-RESPONDENTS



On appeal from the Superior Court, Chancery Division, Bergen County.

Botter, Antell and Furman. The opinion of the court was delivered by Furman, J.A.D.

Furman

Interlocutory appeals and cross-appeals were brought from judgments in an action by the Department of Environmental Protection (DEP) resolving statutory and common law liability for the cleanup and removal of mercury pollution in and adjoining tide-flowed Berry's Creek in Bergen County. After a 55-day trial without a jury the trial judge determined that F.W. Berk & Company (Berk) was jointly and severally liable; that Wood Ridge Chemical Corporation (Wood Ridge) was jointly and severally liable; that Velsicol Chemical Corporation (Velsicol) was severally liable for half the costs; that Ventron Corporation (Ventron) was severally liable for half the costs and that Robert and Rita Wolf (Wolfs) were not liable. In addition, the judge imposed liability against Velsicol for the surfacing of its 33-acre property adjoining Berry's Creek in order to prevent future run-off or drainage of mercury into Berry's Creek.

On their cross-claim the Wolfs were granted judgment against Ventron for fraudulent nondisclosure of mercury pollution in the sale and conveyance of a 7.1-acre property, inland from the Velsicol property and the site of a mercury processing plant from 1929 to 1974. The judgment below also set forth that the Spill Compensation Fund established under the Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq., L. 1976, c. 141, "constitutes a source of money which is available . . . to abate

problems such as the one before the Court." Both of these provisions of the judgment are also appealed.

The substantially undisputed facts are as follows. Berk owned and operated the mercury processing plant from 1929 to 1960 on a 40-acre tract west of Berry's Creek. In this litigation Berk is in default. The adjudication of its joint and several liability is not challenged on appeal.

Velsicol formed and capitalized Wood Ridge as its wholly-owned subsidiary in 1960. Wood Ridge then purchased Berk's assets, including the 40-acre tract. From 1960 to 1974 Wood Ridge operated the mercury processing plant. In 1967 Wood Ridge declared a land dividend of 33 acres, subdivided from the 40-acre tract, to its parent corporation Velsicol. Velsicol has remained the owner of the 33-acre tract. It sold all the capital stock of Wood Ridge to Ventron in 1968.

The adjoining 7.1-acre tract, on which the mercury processing plant was located, was owned by Wood Ridge until its merger into Ventron in 1974. The plant was shut down, machinery and equipment were sold by Ventron to Troy Chemical Company and removed from the site, and the 7.1-acre tract was conveyed by Ventron to the Wolfs.

During the operation of the mercury processing plant by Berk and Wood Ridge, mercury flowed and drained into Berry's Creek from the industrial site via waste effluents, groundwater leaching and surface run-off. Mercury content in the waste effluents piped to the creek was as much as two to four pounds a day. Mercury-contaminated waste was dumped on both the 7.1-acre tract and the 33-acre tract. The trial judge reached a finding, which was supported by credible evidence, that Velsicol accepted dumping of mercury-contaminated waste on its property until the shutdown of Wood Ridge's operations in 1974.

The trial judge concluded that Berry's Creek adjoining the Velsicol property is heavily polluted and a public nuisance through the "vast cumulative effect" of mercury pollution. The concentration of mercury in the sediments of Berry's Creek for a

stretch of several thousand feet is the highest reported in freshwater sediments anywhere in the world, far exceeding acceptable standards. The toxic compound methyl mercury has been and is being formed through chemical processes. Mercury in the water of Berry's Creek is at dangerously high concentrations, particularly so during storms.

Because of the diminished oxygen in Berry's Creek, fish are only present when swept in by the tide. As the result of feeding by fish off microorganisms in the sediments, there is a threat of mercury poisoning to humans who, in turn, eat the fish.

A reliable expert witness estimated the weight of mercury in the subsoil and groundwater under the 33-acre tract owned by Velsicol and the 7.1-acre tract owned by the Wolfs at 268 tons. The trial judge found that mercury is still carried to Berry's Creek via surface water run-off from the Velsicol property but that DEP failed to prove present ground-water leaching of mercury into the creek.

The highest surface and subsurface concentration of mercury is on the Wolf property, formerly the site of the mercury processing plant. After acquiring title in 1974 the Wolfs demolished the five industrial buildings and built warehouses. With the approval of DEP and the Federal Environmental Protection Agency the Wolfs excavated the upper layer of mercury-contaminated soil from the easterly portion of their property, closest to Berry's Creek, removed hundreds of thousands of cubic yards to the westerly portion and installed a containment system. Because of filling, the Velsicol property is now somewhat upgrade from the Wolf property, between it and Berry's Creek. Whether the Wolfs' containment system will prove effective to seal off the massively contaminated upper layer of soil was not established at the time of the trial.

The trial judge determined that Wood Ridge, as owner and operator of the mercury processing plant, was guilty of discharges of mercury, a hazardous and toxic substance, into a

waterway of the State, in violation of N.J.S.A. 23:5-28, which was first enacted in 1937, and of the Water Quality Improvement Act of 1971, N.J.S.A. , 58:10-23.1 to 23.10, which was repealed by the Spill Compensation and Control Act, effective April 1, 1977. Based on that determination, the trial judge, properly in our view, imposed liability against Wood Ridge for abatement of a public nuisance as defined by statute, Alpine v. Brewster , 7 N.J. 42, 50 (1951), as well as under the common law principle of strict liability for unleashing a dangerous substance during non-natural use of land. Rylands v. Fletcher , 3 H. & C. 774 (Exch.1865), rev'd L.R. 1 Exch. 265 (1866), rev'd L.R. 3 H.L. 330 (1868); Bridgeton v. B.P. Oil, Inc. , 146 N.J. Super. 169 (Law Div. 1976); U.S. v. FMC Corp. , 572 F.2d 902 (2 Cir. 1978).

As stated by the Exchequer Chamber in Rylands v. Fletcher:

We think the true rule of law is that the person who for his own purposes brings on his land and collects and keeps there anything likely to do mischief if it escapes, must keep it at his peril, and if does not do so is prima facie answerable for all the damage which is the natural consequence of its escape.

The State had standing to maintain that common law action as the owner in fee of Berry's Creek, a tide-flowed estuary. O'Neill v. State Hwy. Dept. , 50 N.J. 307 (1967).

The trial judge also determined that the Spill Compensation and Control Act of 1977 was not applicable to impose liability for discharges of mercury into a waterway of the State prior to its effective date. We disagree with that determination in view of the amendment to the act, effective January 23, 1980, which establishes that the DEP may undertake the cleanup and removal of a discharge of a hazardous substance occurring prior to the effective date of the Spill Compensation and Control Act "if such discharge poses a substantial risk of imminent danger to the public health or safety or imminent and severe damage to the environment," and that all cleanup and removal costs are the joint and several liability of those responsible for such discharges.

The Spill Compensation and Control Act, N.J.S.A. 58:10-23.11g(c), as ...


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