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In re Vineland Chemical Co.

Decided: August 15, 1990.

IN THE MATTER OF VINELAND CHEMICAL COMPANY (VICHEM)


On appeal from decision of the New Jersey Department of Environmental Protection.

King, Baime and Keefe. The opinion of the court was delivered by King, P.J.A.D.

King

On this appeal, appellant Vineland Chemical Company (ViChem) challenges the New Jersey Department of Environmental Protection's (DEP) denial of a permit to discharge two types of effluent to groundwater. We affirm the final decision of the Commissioner of DEP substantially for the reasons given in his 40-page written opinion of December 21, 1989. We conclude that Commissioner Daggett's decision was consistent with his legal authority and supported by substantial credible evidence in the record.

This is a concise recent procedural history of this matter which spans almost the last two decades. On March 2, 1982 ViChem submitted an application to DEP seeking a New Jersey

Pollutant Discharge Elimination System (NJPDES) discharge-to-groundwater permit for two types of effluent. On April 14, 1986 DEP gave public notice of its intent to deny ViChem's application. Public comments were received between April 14 and July 24, 1986 and a public hearing was held on June 23, 1986. On March 23, 1987 DEP issued a final decision denying ViChem's application for a NJPDES permit. On April 24, 1987 ViChem requested an administrative hearing and a stay pending disposition of its appeal from DEP's final decision. On November 2, 1987 DEP denied ViChem's request for a stay. On November 18, 1987 we granted ViChem a stay.

On June 15, 1987 this matter was transmitted to the Office of Administrative Law as a "contested case." Plenary hearings were conducted before an Administrative Law Judge (ALJ) in November and December 1988. On July 10, the ALJ issued his initial decision recommending reversal of DEP's decision to deny ViChem's permit application.

On December 21, 1989, then-Commissioner of DEP Christopher Daggett issued his final decision. He declined to follow the ALJ's recommendation and affirmed DEP's decision to deny ViChem's NJPDES permit requests. On January 22, 1990 ViChem sought a stay of DEP's final decision from then-Acting Commissioner Helen Fenske. On January 23, 1990 ViChem filed a notice of appeal from DEP's final decision.

On March 9, 1990 DEP Commissioner Judith Yaskin denied ViChem's request for a stay pending this appeal. On March 27, 1990 ViChem filed an emergency application with this court seeking a stay pending appeal. This panel heard oral argument on the application for a stay on March 27, 1990. We denied ViChem's request for a stay but accelerated the appeal and scheduled argument for June 6, 1990.

This is a more elaborate background of the matter. For more than 30 years, ViChem has been engaged in the manufacture of organic herbicides and fungicides at its plant in Vineland. The ViChem site consists of about 20 acres. It contains

several manufacturing and storage buildings, a laboratory, a workers' changing facility, a wastewater treatment plant, several lined lagoons and several unlined "percolation" lagoons. The lined lagoons are used to store arsenic-contaminated water prior to its treatment and discharge. The unlined percolation lagoons are used to allow discharged water to percolate through the soil down to the water table. In this appeal ViChem challenges DEP's decision not to permit it to discharge two types of effluent into the unlined percolation lagoons.

In the early 1970's ViChem stored waste salts from its production processes in outdoor piles at its manufacturing plant. These waste salts contained 1% to 2% arsenic, which ViChem used in the production of its products. Over time, rain caused the arsenic in the salt piles to leach into the groundwater beneath ViChem's facility. Also during the 1970's ViChem discharged untreated water containing arsenic -- referred to as "process waters" -- directly into the ground under its plant. These practices resulted in substantial arsenic contamination of the soil and groundwater under ViChem's plant which exists to this day.

The groundwater under the ViChem site is part of the Cohansey-Upper Kirkwood aquifer, also referred to as the shallow or upper aquifer. This groundwater flows into the Blackwater Branch which is a tributary of the Maurice River. From the Maurice River the flow continues into Union Lake. Below the Union Lake Dam the Maurice River continues until it flows into the Delaware River.

Beneath the Cohansey-Upper Kirkwood aquifer is the Lower Kirkwood aquifer, also referred to as the deeper or lower aquifer. The Lower Kirkwood aquifer is used by the City of Vineland for its water supply. A dispute existed between the parties about whether all of the water in the Cohansey-Upper Kirkwood aquifer flows into the Blackwater Branch or whether some of it percolates down to the Lower Kirkwood aquifer. Interestingly, a report prepared by a ViChem consultant, Dr.

Lennon, noted: "It is possible that the more contaminated water is taking a much deeper path than was initially believed." This 1982 report concluded that more study was needed to determine the ultimate destination of the arsenic-contaminated water beneath the ViChem site.

Back on February 8, 1971 DEP had issued an order alleging that ViChem was "discharging industrial waste and other polluting matter into the Blackwater Branch of the Maurice River," contrary to N.J.S.A. 58:12-1 and 58:12-3, both since repealed. See L. 1977, c. 74. The order directed ViChem to provide industrial wastewater treatment or disposal facilities in order to dispose of its waste sufficiently, in a manner approved by DEP.

On August 22, 1973 DEP filed a civil complaint against ViChem, alleging that it had failed to comply with the February 8, 1971 order, and seeking injunctive relief and penalties. This action resulted in a judicial consent order in the Chancery Division entered on March 11, 1977. The order required ViChem to take action towards elimination of its waste disposal problems. Because ViChem failed to comply with the terms of the consent order, DEP was forced to obtain an amended order enforcing litigant's rights on July 22, 1977 and another such order on October 2, 1978.

As part of its plan to control the discharge of arsenic from its plant, ViChem proposed to construct a water treatment facility. Before ViChem could construct this facility, it was required to obtain a Treatment Works Approval (TWA) pursuant to N.J.S.A. 58:10A-6b. While the record does not disclose when ViChem first made application for a TWA, it appears that this did not occur until some time after July 22, 1977, the effective date of the Water Pollution Control Act, N.J.S.A. 58:10A-1 to -20.

N.J.A.C. 7:14-12.1 to -12.26 established a three-stage approach for obtaining a TWA. Stage I requires an applicant to obtain a conceptual approval of a treatment works. Stage II

requires an application to build, install or modify a treatment works. Stage III requires an approval to operate a treatment works. On December 9, 1977 DEP issued ViChem a Stage I conceptual approval of the proposed treatment works. This approval advised ViChem to refer to the rules under the New Jersey Water Pollution Control Act, (N.J.S.A. 58:10A-1 to -20) in preparing its Stage II application. By letter dated December 20, 1978 DEP expressed its intent to issue ViChem a Stage II approval but noted that ViChem's plans and engineer's report failed to "sufficiently demonstrate that the State requirement for a maximum [arsenic] concentration of .05 mg/l [N.J.A.C. 7:9-6.6] will be routinely achieved."*fn1 This letter warned that ViChem would be required to install additional treatment equipment if its proposed waste treatment facility could not attain compliance with this State's effluent standard.

On January 30, 1979 DEP issued ViChem a Stage II and Stage III TWA which authorized it to construct and operate the proposed waste treatment facility. This approval stated that the treatment facility would be permitted to discharge treated effluent at the rate of 36,000 gallons per day (gpd) into ViChem's unlined percolation lagoons. ViChem asserts that its TWA approval also permitted it to discharge 150,000 gpd, later increased to 200,000 gpd, uncontaminated noncontact cooling water.*fn2 DEP's approval again cautioned that ViChem's proposed facility must "produce an effluent of such a nature as to protect the quality of the receiving waters in accordance with the current rules of [DEP] and the Delaware River Basin Commission." The approval specified that all waters discharged

into ViChem's unlined percolation lagoons should not contain more than 0.05 mg/l arsenic, the then-prevailing potable water standard of DEP and the U.S. Public Health Service.

In March 1980 ViChem's waste treatment facility became operational. Quickly it became apparent that ViChem failed to meet DEP's 0.05 mg/l standard for arsenic discharges to groundwater. N.J.A.C. 7:9-6.6. According to a report prepared by ViChem, the 0.05 mg/l standard could not be achieved consistently by currently available methods. This report concluded that current technology enabled it to reduce arsenic concentration to between .05 mg/l and 1 mg/l. As a result, ViChem requested that DEP waive its 0.05 mg/l arsenic standard. On December 18, 1980 DEP rejected ViChem's waiver request and advised it to "diligently pursue [other] treatment processes in order to obviate any need for further adversarial proceedings to mandate same."

By letter dated March 16, 1981 ViChem stated:

We have found in our waste water treatment plant that we can achieve the desired range of inorganic arsenic required by state regulation. However, the less toxic methyl arsonic acid is reduced (using the best attainable technology) to about 0.5 ppm. Because of the great stability of the compound, its rapid dilution by natural waters and its relatively low toxicity compared to inorganic arsenic we respectfully request that the treatment works as presently operated be approved for a continuing interim basis. Meanwhile we will as we have, for a decade, continue our research to reduce all arsenic effluent to less than .05 ppm.

Subsequent correspondence between DEP and ViChem dwelt upon and established ViChem's position that a regulatory distinction should be drawn between organic and inorganic forms of arsenic. ViChem maintained that the organic form is "far less toxic than the inorganic form" and that the arsenic at its site was and is predominately organic. In a letter of September 2, 1981 ViChem asserted that it could only be held to the .05 mg/l federal EPA arsenic standard which had recently been

amended to apply to the inorganic form only.*fn3 ViChem claimed that it had met that standard of .05 mg/l as to inorganic arsenic.

DEP refused to change its position with regard to requiring that ViChem's treatment-plant effluent contain no more than .05 mg/l total arsenic, a standard with which ViChem never complied. On July 16, 1981 ViChem requested an administrative hearing contesting DEP's arsenic effluent standard as applied to it. On December 22, 1981 the July 16 initiative by ViChem was settled by entry of an administrative consent order (ACO). The ACO, among other things, provided:

11. ViChem shall continue to investigate treatment alternatives to meet the effluent limit of 0.05 mg/l [arsenic] as proposed in ViChem's submittal dated July 13, 1981. To determine the effectiveness of each proposal, speciation will be conducted during the study on the treatment plant influent used in the bench scale tests. Monthly progress reports will be submitted to NJDEP for a period of three (3) months; then a final report of the study must be submitted within four (4) months from the effective date of this Consent Order.

12. While the proposed experimental testing is being conducted and until such time as a decision is made by NJDEP on the achievability of 0.05 mg/l effluent limit, ViChem may only discharge its treated water into the unlined lagoon at a level of total arsenic concentration of not more than 0.7 mg/l.

The ACO also stated that ViChem did not waive its right to challenge DEP's arsenic concentration standard in the future. In a covering letter accompanying the ACO sent to ViChem's counsel, DEP stated:

On March 6, 1981 DEP, pursuant to the Water Pollution Control Act of 1977 (WPCA or Act), N.J.S.A. 58:10A-1 to -20; L. 1977, c. 74, enacted regulations implementing the New Jersey

Pollutant Discharge Elimination System (NJPDES), N.J.A.C. 7:14-1 to -14.8. The NJPDES was implemented to forbid the discharge of pollutants to water without a permit issued by the Commissioner of DEP or the Administrator of the EPA. N.J.S.A. 58:10A-6a. See In the Matter of the Issuance of a Permit by the Department of Environmental Protection to Ciba-Geigy Corporation, 120 N.J. 164, 169-170, 576 A.2d 784 (1990). On March 2, 1982 ViChem applied to DEP for an NJPDES permit to discharge 36,000 gpd of treatment plant effluent and also a permit to discharge 200,000 gpd of noncontact cooling water. Following submission of its application, ViChem heard nothing from DEP until January 17, 1984 when, according to ViChem, DEP informed it that the NJPDES permits would soon be issued.

On April 14, 1986 DEP publically noticed its intent to deny ViChem's NJPDES permit applications. Following a public hearing and comment period, on March 23, 1987 DEP issued its decision to deny both NJPDES permits requested by ViChem. DEP gave these reasons for its 1987 decision:

1. Vineland Chemical Co. withdraws water from the Kirkwood formation at a depth of 135 feet below ground surface. The 200,000 GPD of groundwater that is withdrawn from the Kirkwood formation is circulated through the facility's cooling system (where it has the potential to become contaminated in the event of an upset) and is then discharged directly to the series of three unlined infiltration/percolation lagoons. This discharge is monitored continuously for specific conductance. In the event of an upset that causes conductivity to exceed 1000 umhos Ö (indicating the presence of pollutants in the cooling water), an alarm would sound and the cooling water would be directed to the lined hazardous waste surface impoundments for storage and subsequent treatment prior to discharge.

The 200,000 GPD is being discharged by means of infiltration/percolation into the Cohansey aquifer, which is already highly contaminated with arsenic (and possibly other compounds) as a result of past practices at the facility. These past practices included improper storage of waste piles (arsenic salts) that were left uncovered, ...


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