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In the Matter of Crompton

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


October 27, 2011

IN THE MATTER OF CROMPTON COLORS, INCORPORATED.

On appeal from the New Jersey Department of Environmental Protection, ISRA Case No. E20010324.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued November 17, 2010

Before Judges Fuentes, Ashrafi and Nugent.

Appellant, 50 West Street, LLC, a subsidiary of Hartz Mountain Industries and the former landlord of Crompton Colors, appeals the action of the New Jersey Department of Environmental Protection (DEP) rescinding a No Further Action (NFA) letter issued in 2002, and denying appellant's request for a hearing to contest the rescission. We remand for a hearing.

I

50 West Street is located in a commercial and residential area east of the Garden State Parkway in the Township of Bloomfield. The site was designated 60 West Street until the property was subdivided in 1991. Prior to 1965, this site was owned by Walter Kiddie Fire Extinguisher Company. Hartz purchased the property in 1965 and subsequently leased the premises to Peerless Bindery.

In October 1991, the site was subdivided establishing two parcels currently known as Block 305, Lots 5.01 and 5.02. There were two buildings at the site in 1990, a warehouse occupied by Peerless, and a three-story office building leased to Child Development Center. The warehouse was demolished in 1990 by Stratford Development Company and replaced by a new warehouse, corresponding to Lot 5.02. This property was renovated in the 1990's and leased to Crompton & Knowels Colors, Inc. (later known as Crompton Colors Incorporated). The three-story structure occupied by the Child Development Center remained as Lot 5.01.

As part of the warehouse demolition, Stratford removed from the site a 10,000-gallon No.2 heating oil tank. According to the Discharge Investigation and Corrective Action Report (DICAR) prepared by Cortell Associates on behalf of Hartz:

During the removal of the 10,000 gallon tank, petroleum product was observed in the surrounding soil and on the surface of the groundwater in the excavation. All oil product was vacuum pumped from the surface of the groundwater and petroleum hydrocarbon contaminated soils were removed from the excavation. As part of the remedial action three groundwater monitoring wells were installed at the site to assess groundwater quality and to determine groundwater flow direction.

Soil and groundwater sampling were conducted onsite. The first round of groundwater sampling revealed no petroleum hydrocarbons above the detection limit. During the second round, a level of 1.1 parts per million (ppm) was detected in only one of the monitoring wells. After four rounds of soil excavation, elevated levels of total petroleum hydrocarbons (TPH) were detected at the east end of the excavation. Base/neutral organic analysis of two of the soil samples revealed slightly elevated levels of these compounds.

The residual petroleum hydrocarbon contamination observed in the fill materials does not pose a threat to human health or the environment. The excavation has been backfilled with clean fill and crushed stone and has been covered by an eight inch concrete foundation. The entire site will be paved or covered with buildings, thereby eliminating any exposure to the residual TPH. (emphasis added.)

At the time Hartz removed the 10,000-gallon oil tank, undertook these remediation measures, and commissioned the DICAR, the property had not been subdivided. Thus, the DEP stored the information contained in the DICAR under the 60 West Street address. When the DICAR was resubmitted to the DEP in March 1993, the property was again identified as 60 West Street.

By letter dated October 19, 1995, the DEP Bureau of Underground Storage Tanks responded to the DICAR and requested Hartz to provide disposal information for the contaminated soil, to conduct additional remedial investigation, and to report the results of these efforts within ninety days in a Remedial Action Workplan. In a report dated January 29, 1996, Envirotech Consultants, Inc., responded on behalf of Hartz, providing disposal information regarding the contaminated soil and information on the monitoring wells.

By letter dated March 15, 1996, the DEP found the Envirotech report "unacceptable," and required Hartz to address "the issues within the Remedial Investigation Sections," and submit another Remedial Investigation Report addressing the issues identified within ninety days. Of particular relevance here, this letter from DEP referenced the address site as "60 West Street."

Hartz submitted another Remedial Investigation Report in July 1996, which included data from additional soil and groundwater samples taken in May 1996. Again, the property is identified as 60 West Street. This Remedial Investigation Report indicated benzo(b)flouranthene and benzo(a)pyrnene were present in the soil in concentrations exceeding the N.J.A.C. 7:26D Appendix 1 standard. The report also indicated groundwater contamination in excess of the New Jersey Ground Water Remediation Standards, N.J.A.C. 7:26D-2.2. The report nevertheless noted:

Although the . . . contaminants were detected . . . it is suspected that their source(s) is (are) not directly related to the former #2 fuel oil tank that was decommissioned from the facility in January, 1991. The location of the former tank is approximately 50 feet downgradient [from the contaminants.] The presence of contaminants are therefore attributed to either the historical fill material at the site or the ground-water coming from offsite and upgradient.

By letter dated August 21, 1996, the DEP informed Hartz that "[b]ased on our review of the information submitted, the Department finds that Hartz Mountain has complied with the existing requirements regarding the remedial investigation and remedial action for the listed discharges and investigated underground storage tank system. Therefore, no further action is required for this area of concern." (emphasis added.)

The letter referenced 60 West Street as the site where the tank had been removed, and specifically made "no representation regarding the environmental conditions of any other areas for the referenced property." DEP further required Hartz "to investigate this site in order to identify any areas of concern that may be contributing to the noted contamination, or alternatively, to confirm that the source of the noted contamination is off-site." It is undisputed that Hartz did not conduct this investigation.

II

As noted earlier, Hartz leased the warehouse property to Crompton Colors in 1991, which continuously occupied the site until 2001. During this ten-year period Crompton Colors handled and stored at the warehouse a variety of hazardous substances. The cessation of business of Crompton's warehouse operation in 2001 triggered the requirements of the Industrial Site Recovery Act (ISRA), N.J.S.A. 13:1K-6 to -14.

On August 17, 2001, Crompton filed with the DEP a General Information Notice and Expedited Review Application,*fn1 seeking authorization to cease operation at 50 West Street, Block 305, Lot 5.01. (emphasis added). By letter dated December 3, 2001, referencing 50 West Street as the site, the DEP informed Crompton that it did not qualify for expedited review "since the above reference industrial establishment site has not previously received a previous No-Further-Action approval."

Crompton responded by submitting a Preliminary Assessment Report, a Negative Declaration Affidavit, and a revised General Information Notice listing the address as 50 West Street, but revising the lot number to reflect Lot 5.02. In the Preliminary Assessment Report, Crompton indicated that there had not been "any known discharges of hazardous substances and wastes at the site." The report noted that the site was the former location of Peerless Bindery, with the address 60 West Street. The report specifically noted that Crompton's operations involved the storage of raw materials, purchased dyes, and finished goods from other Crompton facilities in New Jersey. It also provided detailed information regarding potential areas of environmental concern, and noted that the areas where Crompton had stored hazardous materials did not have floor drains or other conduits to the underlying soil. Crompton did not disclose, however, the presence of soil and groundwater contamination that had been identified in the 1996 NFA letter.

Based on these representations, the DEP issued a letter dated February 19, 2002, informing Crompton that "no further action is necessary for the remediation of the industrial establishment . . . so long as Crompton Colors did not withhold any information from the Department."*fn2

III

In the brief filed in this appeal, the DEP noted that the Kiddie Kollege child care center, located in Franklin Township, Gloucester County operated on a site where mercury thermometers had been manufactured. The issue came to light in 2004, when children who used the site were found to have abnormally high levels of mercury in their urine. It was subsequently determined that the building on that site was contaminated with mercury.

In the aftermath of this incident, the DEP mapped all known child care centers and schools, drew a 500 foot radius around every child care center and school, and examined all open and closed cases within the radius to determine whether any of them could potentially affect the child care facilities.*fn3

As part of this reexamination, the DEP revisited Hartz's application and concluded that the contamination not addressed by Hartz as part of the underground storage tank removal was actually located at 50 West Street. By letter dated August 22, 2007, the DEP rescinded its 2002 NFA letter issued to Crompton. The DEP also directed Hartz and Crompton's successor, Chemtura, to submit a Remedial Investigation Workplan, pursuant to N.J.A.C. 7:26E-4.2, with a schedule for the investigation of potential vapor intrusion at the Child Development Center within fourteen days of the receipt of the August 22, 2007, letter.

Hartz responded by letter dated September 12, 2007, arguing that the DEP did not have grounds to re-open the case for 50 West Street, and lacked the authority to compel Hartz to conduct a vapor intrusion study at the adjacent property, 60 West Street. Hartz characterized the DEP's actions as arbitrary and capricious because the 1996 data from the underground storage tank removal did not support reopening the case. According to Hartz, the data from the 1996 underground storage tank case indicated that there was "no good faith basis to believe that either 50 West Street LLC (or Chemtura) are responsible for the groundwater contamination." Hartz also noted it did not have a copy of Crompton's IRSA filings. Hartz concluded its response by demanding an administrative hearing "to contest the reopening" of its case.

Counsel for the DEP responded to Hartz in a letter dated September 9, 2009. The DEP rejected Hartz's attempt at disassociating itself from the actions taken by Crompton by noting that they were both obligated to "remediate all contamination at the industrial establishment pursuant to the Industrial Site Recovery Act." Hartz also received copies of all communications between Crompton and the DEP concerning the remediation of the industrial establishment. The DEP further rejected Hartz's claims that another site was the source of the groundwater contamination at 50 West Street because the other site is located over one-half mile southwest of 50 West Street, and the groundwater flow is in an east/southeast direction. Finally, the DEP rejected Hartz's demand for an administrative hearing.

IV

We will limit our discussion to Hartz's request for an administrative hearing to challenge the factual basis for the DEP's decision: (1) rescinding the NFA issued in 2002; and (2) directing Hartz to submit a Workplan, pursuant to N.J.A.C. 7:26E-4.2, with a schedule for the investigation of potential vapor intrusion at the Child Development Center. Citing Gloucester County Improvement Authority v. New Jersey Department of Environmental Protection, 391 N.J. Super. 244, 246 (App. Div. 2007), in which we held that the recipient of notice of violation of the Solid Waste Management Act is entitled to an administrative hearing, Hartz argues it should have the same right to challenge the actions taken here by the DEP. We agree.

In Gloucester County Improvement Authority we held that N.J.S.A. 13:1E-9(c) specifically provided for a hearing to contest the agency's finding of a violation of the Solid Waste Management Act. Id. at 250. ISRA contains a similar provision.

Whenever the commissioner finds that a person has violated this act, or any rule or regulation adopted pursuant thereto, the commissioner may issue an order specifying the provision or provisions of this act, or the rule or regulation adopted pursuant thereto, of which the person is in violation, citing the action that constituted the violation, ordering abatement of the violation, and giving notice to the person of the person's right to a hearing on the matters contained in the order. The ordered person shall have 20 calendar days from receipt of the order within which to deliver to the commissioner a written request for a hearing. After the hearing and upon finding that a violation has occurred, the commissioner may issue a final order. If no hearing is requested, the order shall become final after the expiration of the 20-day period. A request for hearing shall not automatically stay the effect of the order. [N.J.S.A. 13:1K-13.1b] (emphasis added).

We reject the DEP's characterization of its actions here as mere requests for submission of documentation and performance of studies Hartz was required to provide and perform as part of its original application for the 2002 NFA. The rescission of the NFA is a revocation of the permission the DEP gave Hartz in 2002 to convey this property free and clear of any remedial obligations under IRSA. The administrative directives to perform environmental studies fall within the purview of N.J.S.A. 13:1K-13.1b because we assume that Hartz is not free to ignore these directives without risking some type of enforcement action by the DEP.

A hearing is required in which Hartz may present evidence refuting the DEP's factual underpinnings to rescind a determination made more than nine years ago and to challenge its legal obligation to conduct any further environmental studies or undertake remedial measures.

Remanded for an adjudicatory hearing before the Office of Administrative Law. We do not retain jurisdiction.


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