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State v. Ciba-Geigy Corp.

Decided: January 9, 1992.

STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
CIBA-GEIGY CORPORATION, DEFENDANT-APPELLANT, AND TOMS RIVER CHEMICAL CORPORATION, WILLIAM P. BOBSEIN AND JAMES A. MCPHERSON, DEFENDANTS



On appeal from the Superior Court of New Jersey, Law Division, Mercer County.

Michels, O'Brien and Conley. The opinion of the court was delivered by O'Brien, J.A.D.

O'brien

O'BRIEN, J.A.D.

Defendant Ciba-Geigy Corporation (Ciba) appeals from the denial of its motion to dismiss certain counts of an indictment against it and others on the ground of double jeopardy.*fn1 We reverse and remand.

Ciba operates a facility in the township of Dover in Ocean County. Chemical manufacturing operations had commenced at the site in the early 1950s. As of January 1970, operations at the site were being conducted by defendant Toms River Chemical Corporation (TRC), then wholly owned by three partners, Ciba Corporation, Geigy Chemical Corporation, and Sandoz Limited. Ciba Corporation and Geigy Chemical Corporation merged on October 21, 1970, to create Ciba-Geigy (Ciba), and in November 1981 Sandoz sold its interest in TRC to Ciba and TRC was merged into Ciba.

During the relevant time, Ciba produced organic dyes, epoxy resins and other products at the site. In 1977, the Department of Environmental Protection (DEP) first issued a certificate for the operation of a nonhazardous solid waste disposal facility to TRC. In 1979, DEP issued TRC a certificate of approved registration and engineering design approval for a ten-year expansion of the landfill, and on March 12, 1981, DEP and TRC executed an administrative consent order (1981 ACO) providing for the closure of Cell 1 of the landfill and the opening and operation of Cell 2 upon certain terms and conditions set forth in the 1981 ACO. The landfill approval provided for the disposal of solid waste consisting of sludge from TRC's effluent treatment plant and certain specified dry, nonhazardous chemical

waste, but prohibited TRC from placing any liquid or hazardous materials in the landfill.

The DEP conducted investigations of Cell 2 during 1984 and determined that some of the approximately 14,000 55-gallon drums which had been deposited in Cell 2 by Ciba contained liquid and many of the drums contained hazardous waste due in part to excessive amounts of Toluene, an industrial solvent, contained in the waste. DEP concluded that TRC and Ciba, as its successor, violated the landfill approval, the Solid Waste Management Act, N.J.S.A. 13:1E-1 et seq., and the regulations promulgated thereunder by depositing liquid and hazardous wastes into Cell 2. It also concluded that Ciba violated the Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq., and the regulations promulgated thereunder by accepting waste from outside sources for treatment at the waste water treatment plant. DEP further concluded that the company violated the 1981 ACO by (1) failing to fully characterize waste deposited in Cell 2 and report said characterization to DEP; (2) failing to characterize new waste generated by manufacturing process changes and report same to DEP; and (3) failing to submit reports to DEP concerning liner integrity. Thus, DEP demanded that the company take remedial action.

In the face of that demand for remedial action, Ciba and DEP entered into an administrative consent order dated April 25, 1985 (1985 ACO), under the terms of which Ciba agreed to remove the drums deposited in Cell 2 at its own cost and expense and to provide an irrevocable letter of credit in the amount of $5,000,000 to secure implementation of the removal plan, to appoint a work coordinator to oversee implementation of the order, and to reorganize its environmental structure pursuant to the specific terms of the order. The order also provided that Ciba pay $200,000 representing reimbursement to DEP for "(i) expenses heretofore incurred by DEP in investigating the operations of Cell 2, reviewing the Removal Plan, and other expenses related to the investigation of the violations set forth in this Order; and (ii) expenses to be incurred in the

future by DEP in monitoring the implementation of the Removal Plan."

The significant provisions of the 1985 ACO for purposes of this appeal are as follows:

22. There is hereby levied upon the Company, and the Company hereby agrees to pay to the Department within thirty (30) days of the effective date of this Order by certified check payable to the Department, a civil penalty in the amount of $1,450,000.00 representing a penalty for violations pertaining to the operation of Cell 2, for the acceptance of outside waste at the waste water treatment plant, and for the violations of the 1981 Consent Order as described in paragraph 11 of this Order.

36. Nothing contained in this Order or in any of the statements made by the Company to the Department, or by the Department to the Company, in connection with the negotiation or execution of this Order shall be deemed to constitute an admission by the Company or the Department of any fact or Conclusion of law or to constitute a waiver of any defense or other position the Company or the Department may take with respect to any of the matters referred to herein, or otherwise be used as probative of any fact in any proceeding of a civil or criminal nature; provided, however, that nothing in this paragraph shall relieve the Company of its obligation of full compliance with all of the terms and conditions set forth herein.

At the end of the 1985 ACO, the following unnumbered paragraph appears:

RESERVATION OF RIGHTS

This Order shall be fully enforceable in the New Jersey Superior Court upon the filing of a summary action for compliance pursuant to N.J.S.A. 13:1D-1, et seq., the Solid Waste Management Act, N.J.S.A. 13:1E-1, et seq., and the Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq. This Order may be enforced in the same manner as an Administrative Order issued by the Department pursuant to these same statutory authorities and shall not preclude the Department from taking whatever action it deems appropriate to enforce the environmental protection laws of the State of New Jersey in any manner not inconsistent with the terms of this Order; provided, however, that upon the Company's payment of the civil penalties referred to in paragraph 22 and the expenses referred to in paragraph 23, and upon the complete performance of the Removal Plan, the Department shall not seek any other penalties from the Company with respect to any of the matters referred to in paragraphs 9 through 11 of this Order. It is understood that this order shall resolve all charges the Department might bring based upon information available to the Department as of the effective date of this order, relating to the depositing of materials in Cell 2 or relating to the acceptance of outside waste into the waste water treatment plant, as set forth in paragraphs 9 through 11 of this Order,

except as provided by paragraph 24(h). No other matters are intended to be resolved by the signing of this Order. It is understood that this Order shall in no way be deemed to settle any matters insofar as they might result in the criminal liability of the Company or any of its past or present employees or officers. It is hereby acknowledged that the New Jersey Division of Criminal Justice is not a party to this document and is not bound in any way by the provisions herein.

It is undisputed that Ciba has fully complied with the provisions of the 1985 ACO, having implemented the removal plan at a cost, it contends, in excess of the $5 million set as security, paid the $200,000 for expenses, as well as the $1.45 million civil penalty.

On October 24, 1985, the State Grand Jury returned Indictment No. SGJ 147-85-2 against the same defendants here involved together with two other individual defendants. That indictment was dismissed in the Law Division on a finding that there were not twelve grand jurors qualified to vote on the indictment. We reversed that dismissal on January 20, 1988. See State v. Ciba-Geigy Corp., 222 N.J. Super. 343, 536 A.2d 1299 ...


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