NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, Plaintiff-Respondent,
EXXON MOBIL CORPORATION, Defendant-Respondent.
September 11, 2017
appeal from Superior Court of New Jersey, Law Division, Union
County, Docket Nos. L-3026-04 and L-1650-05.
Raymond J. Lesniak, amicus curiae-appellant, argued the cause
pro se, individually and as New Jersey State Senator in
A-0668-15 (Richard L. Rudin and Julia O. Donohue, on the
Lloyd (Columbia Environmental Law Clinic, Morningside Heights
Legal Services, Inc.) argued the cause for amicus
curiae-appellants New Jersey Sierra Club, Clean Water Action,
Environment New Jersey, and Delaware Riverkeeper Network in
A-0810-15 (Edward Lloyd, attorney; Edward Lloyd and Susan J.
Kraham, on the briefs).
Theodore V. Wells, Jr. (Paul, Weiss, Rifkind, Wharton &
Garrison, LLP) of the New York bar, admitted pro hac vice,
argued the cause for respondent Exxon Mobil Corporation
(Archer & Greiner, and Theodore V. Wells, Jr., attorneys;
Marc A. Rollo, Arthur H. Jones, Jr., Theodore V. Wells, Jr.,
John F. Baughman (Paul, Weiss, Rifkind, Wharton &
Garrison, LLP) of the New York bar, admitted pro hac vice,
Daniel J. Toal (Paul, Weiss, Rifkind, Wharton & Garrison,
LLP) of the New York bar, admitted pro hac vice, and Jaren
Janghorbani (Paul, Weiss, Rifkind, Wharton & Garrison,
LLP) of the New York bar, admitted pro hac vice, on the
Kanner (Kanner & Whiteley, LLC) of the Louisiana bar,
admitted pro hac vice, argued the cause for respondent New
Jersey Department of Environmental Protection (Christopher S.
Porrino, Attorney General, and Allan Kanner, attorneys;
Richard F. Engel, Deputy Attorney General, Jeffrey Jacobson,
Chief Counsel, David Apy, Assistant Attorney General,
Elizabeth B. Petersen (Kanner & Whiteley, LLC) of the
Louisiana bar, admitted pro hac vice, Allison M. Shipp
(Kanner & Whiteley, LLC) of the Louisiana bar, admitted
pro hac vice, and Allan Kanner, of counsel and on the brief).
Judges Messano, O'Connor, and Vernoia.
1991, the New Jersey Department of Environmental Protection
(DEP) and Exxon Mobil Corporation (Exxon) entered into two
administrative consent orders (ACOs), requiring Exxon to
remediate polluted sites it owned and operated at the Bayway
Refinery in Linden (Bayway) and the Bayonne Facility
(Bayonne). In addition to requiring Exxon to pay a civil
penalty, the ACOs required the company to: undertake remedial
investigations; prepare work plans and feasibility studies;
undertake all additional investigations and actions necessary
to remediate the sites under DEP's supervision; submit
quarterly progress reports; and reimburse DEP for all
oversight costs and costs incurred in investigating and
responding to Exxon's discharges. See N.J. Dep't
of Envtl. Prot. v. Exxon Mobil Corp., 393 N.J.Super.
388, 391-93 (App. Div. 2007) (Exxon I) (providing
historical background regarding operation of these two sites
and the ACOs).
the ACOs, the State of New Jersey reserved its right to
recover additional "natural resource damages"
(NRD), i.e., compensation for the injury and destruction of
natural resources and the public's loss of the use and
enjoyment of those resources. In August 2004, DEP filed two
complaints against Exxon seeking NRD at Bayway and Bayonne,
and asserting claims under the Spill Compensation and Control
Act, N.J.S.A. 58:10-23.11 to -23.24 (Spill Act), and common
law theories of public nuisance and trespass.
not discuss in detail pretrial rulings and controversies,
except to note that in 2006, the trial court granted DEP
summary judgment holding Exxon was strictly liable for NRD
and restoration costs under the Spill Act. It also dismissed
DEP's NRD claim for "loss of use damages." We
granted DEP leave to appeal - Exxon did not seek
interlocutory review - and, in Exxon I, 393 N.J.
Super, at 410, we reversed and restored DEP's claim for
"loss of use" NRD damages. In New Jersey
Department of Environmental Protection v. Exxon Mobil
Corp., 420 N.J.Super. 395, 397-98 (App. Div. 2011)
(Exxon II), we reversed the trial court's
dismissal of DEP's strict liability claim, which was
added in an amended complaint, on statute of limitations
grounds. In 2014, Judge Michael J. Hogan presided over a
sixty-six day bench trial.
DEP and Exxon moved pre-trial to bar the testimony of all or
most of their adversaries' experts. Rather than conduct
pre-trial hearings to determine admissibility, see
N.J.R.E. 104(a), with the judge's approval, all experts
testified while the parties preserved their objections.
Utilizing a complex, mathematical methodology known as
"Habitat Equivalency Analysis" (HEA), DEP's
experts estimated that NRD damages at both sites totaled $8.9
billion. Exxon's experts challenged the admissibility of
any opinions based on HEA in the first instance, although, as
Judge Hogan noted in his written decision, Exxon's
experts, utilizing HEA, estimated NRD damages to be between
$1.4 and $3 million.
two days of summations and the submission of written closing
arguments, Judge Hogan set about to render a written decision
on the reserved N.J.R.E. 104(a) motions and the case in
chief. Before he did, however, the parties advised they had
reached a settlement.
the terms of the proposed consent judgment, Exxon agreed to
pay $225 million to the state treasurer, and the State agreed
to place that money in a segregated account within the
Hazardous Discharge Site Cleanup Fund, where the monies
"shall earn interest and may not be used for any
purpose" until the consent judgment "becomes final
and non-appealable." The State also agreed to: release
Exxon from all NRD claims based on the discharge of
contaminants onto the soil and sediments of Bayway and
Bayonne; dismiss surface water NRD claims without prejudice
to raising them, under certain conditions, in a future
action; release Exxon with prejudice and covenants not to sue
for all NRD claims relating to more than one thousand Exxon
retail gas stations in New Jersey, excluding those where
methyl tertiary butyl ether (MTBE) had been discharged; release
Exxon with prejudice from all NRD claims relating to sixteen
other statewide facilities (designated as Attachment C
facilities), including the former Paulsboro Terminal, which
had been the subject of ongoing litigation since 2007, but
excluding those facilities where MTBE had been discharged;
and defer the final remedy determination and remediation of
Morses Creek near Bayway until Exxon ceased refining
operations at the site.
parties further agreed that: the consent judgment would not
alter, suspend, or otherwise impact Exxon's obligations
under any ACO, except for the Morses Creek deferral; the
State would retain full authority and sole discretion to
require Exxon to take any action to "address an
immediate environmental concern, an imminent and substantial
endangerment to public health, welfare or the environment, or
an emergency response arising from or related to"
Bayway, Bayonne, the gas stations and Attachment C
facilities; and, the court would retain continued
jurisdiction and enforcement of the consent judgment's
terms. Lastly, the consent judgment declared that nothing
contained therein "shall be considered an admission by
[Exxon], " and it granted Exxon contribution protection
"to the fullest extent possible" pursuant to the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA), 42 U.S.C. §§ 9601-675, the
Spill Act, and any other statute, regulation, or common law
principle that allowed contribution rights against
provided notice of the proposed consent judgment in
accordance with N.J.S.A. 58:10-23.Ile2. See Cumberland
Farms, Inc. v. N.J. Dep't of Envtl. Prot., 447
N.J.Super. 423, 441 (App. Div. 2016) ("[U]nder N.J.S.A.
58:10-23.Ile2, the DEP and a potentially responsible party
may not agree to a settlement of NRD liability until after
the DEP has published notice of the terms of the
settlement."), certif. denied, 229 N.J. 149
(2017). DEP received 16, 013 public comments, mostly
objections, including comments from Raymond J. Lesniak, a
resident of the Bayway section of Elizabeth and State Senator
for the 20th Legislative District, (appellant in A-0668-15),
and the New Jersey Sierra Club, Clean Water Action,
Environment New Jersey, and Delaware Riverkeeper Network
(collectively, the Environmental Groups) (appellants in
DEP responded to the comments and indicated whether it
intended to seek approval of the consent judgment or not,
Lesniak and the Environmental Groups moved to intervene in
the lawsuit. In a written opinion, Judge Hogan denied those
motions without prejudice.
same day, DEP issued its response to the public comments,
portions of which we summarize. DEP stated the proposed
judgment was the second largest NRD settlement with a single
corporate defendant in United States' history, and the
largest NRD settlement in New Jersey's history. DEP
asserted that Exxon had already spent more than $130 million
remediating Bayway and more than $12 0 million remediating
Bayonne, and that the proposed consent judgment would not
change or cap Exxon's continued obligation to "spend
whatever amount of money is necessary to fully remediate all
of its contaminated sites in accordance with DEP's
also noted "numerous and significant" legal and
evidentiary issues in the lawsuit were still unresolved, with
no assurance DEP would ultimately succeed. For example, early
pre-trial decisions in the State's favor as to liability
could be subject to appeal and ultimately reversed.
Additionally, Judge Hogan had not yet ruled on the
admissibility of DEP's experts' opinions, or
determined the amount of NRD, if any, actually proven by the
State. Under the proposed settlement, Exxon gave up its right
to appeal all issues. DEP further noted that the proposed
consent judgment did not settle claims against Exxon at gas
stations and other facilities where MTBE was discovered.
Exxon's support, DEP subsequently moved before Judge
Hogan for approval of the settlement. Judge Hogan permitted
the Environmental Groups and Lesniak to appear as amicus
curiae. They filed extensive briefs and orally argued against
written decision and conforming order filed August 25, 2015,
Judge Hogan approved the consent judgment, holding it was
fair, reasonable, faithful to the Spill Act's goals, and
in the public interest. He concluded that DEP had applied
"rational methods" to estimate total damages and to
determine what Exxon's fair payment would be for those
damages, and that $225 million represented "a reasonable
compromise given the substantial litigation risks the DEP
faced at trial and would face on appeal." The court
filed a fully executed consent judgment on August 31, 2015;
Exxon tendered payment a few weeks later.
Environmental Groups and Lesniak renewed their requests to
intervene, arguing in part that intervention was appropriate
so they could appeal Judge Hogan's approval of the
consent judgment. By orders dated October 9, 2015,
accompanied by a comprehensive written decision, Judge Hogan
denied both applications with prejudice. These appeals
followed. We have consolidated them now for purposes of
issuing a single opinion.
argue Judge Hogan erred in concluding standing was a
prerequisite to their intervention in the lawsuit, and, even
if he was correct, they established standing both to
intervene at trial and to challenge the court's approval
of the consent judgment on appeal. We first consider whether
standing is a prerequisite to intervention at trial, and, if
so, whether appellants had standing to intervene.
Rules of Court govern intervention at trial, and the trial
court's interpretation of those rules is subject to our
de novo review. Washington Commons, L.L.C. v. City of
Jersey City, 416 N.J.Super. 555, 560 (App. Div. 2010).
"We apply familiar canons of statutory construction to
interpret the court rules[, ] . . . look[ing] first to the
plain language . . . and giv[ing] the words their ordinary
meaning." Robertelli v. N.J. Office of Att'y
Ethics, 224 N.J. 470, 484 (2016) (citations omitted).
"We also read the language of a rule 'in context
with related provisions so as to give sense to the [court
rules] as a whole.'" Ibid, (quoting
Wiese v. Dedhia, 188 N.J. 587, 592 (2006)) .
4:33-1 governs intervention as of right. To satisfy the rule,
a moving party must
(1) claim "an interest relating to the property or
transaction which is the subject of the transaction, "
(2) show [that the movant] is "so situated that the
disposition of the action may as a practical matter impair or
impede its ability to protect that interest, " (3)
demonstrate that the "[movant's] interest" is
not "adequately represented by existing parties, "
and (4) make a "timely" application to intervene.
[Am. Civil Liberties Union of N.J., Inc. v. Cty. of
Hudson, 352 N.J.Super. 44, 67 (App. Div. 2002) (ACLU)
(quoting Meehan v. K.D. Partners, L.P., 317
N.J.Super. 563, 568 (App. Div. 1998)).]
the rule is not discretionary, a court must approve an
application for intervention as of right if the four criteria
are satisfied." Meehan, 317 N.J. Super, at 568.
other hand, Rule 4:33-2 (emphasis added)
permits intervention "[u]pon timely application
. . . if the claim or defense and the main
action have a question of law or fact in common." The
rule must be "liberally construed . . . with a view to
whether intervention will unduly delay or prejudice the
adjudication of the rights of the original parties[, ]"
ACLU, 352 N.J. Super, at 70, "and whether
intervention will eliminate the need for subsequent
litigation." Zirger v. Gen. Accident Ins. Co.,
144 N.J. 327, 341 (1996) (citation omitted). The decision to
grant or deny permissive intervention "vests
considerable discretion in the trial court[, ]"
Evesham Township Zoning Board of Adjustment v.
Evesham Township Council, 86 N.J. 295, 299 (1981), thus
we review the court's determination of a permissive
intervention motion under an abuse of discretion standard.
City of Asbury Park v. Asbury Park Towers,
388 N.J.Super. 1, 12 (App. Div. 2006).
permissible intervention or intervention as of right, a party
must comply with the procedure set out in Rule
4:33-3 (emphasis added):
A person desiring to intervene shall file and serve on all
parties a motion to intervene stating the grounds therefor
and accompanied by a pleading setting forth the claim or
defense for which intervention is sought along with a
Case Information Statement pursuant to R.
procedure is "mandatory, " Pressler & Verniero,
Current N.J. Court Rules, cmt. on
R. 4:33-3 (2018), although courts should liberally
permit movants "reasonable opportunities to
cure procedural defects in their motions to
intervene." ACLU, 352 N.J. Super, at 66-67
4:33-3 requires the movant to set forth a "claim or
defense" in its pleading to intervene. Rule
4:33-2, the more liberal permissive intervention rule,
provides the standard to guide the motion court's
exercise of discretion, i.e., intervention is appropriate
"if [the movant's] claim or defense" presents
"a question of law or fact in common" with the
pending action. Ibid. Under the plain language of
these two Rules, intervention is not appropriate unless the
putative intervenor can assert its own "claim or
defense." See Pressler & Verniero, cmt. 1
on R. 4:33-2 ("Clearly those without standing
in the first instance are also without sufficient interest to
warrant intervention."). If the moving party must have
standing to assert its own claim or defense before the court
exercises its discretion and permits intervention,
it seems illogical that in some situations a court must
grant intervention under Rule 4:33-1, even if
the movant cannot assert its own claim or defense.
argue that none of our reported cases has squarely held that
a putative intervenor must establish standing in order to
intervene successfully under either Rule 4:33-1 or
4:33-2. We do not necessarily disagree.
when considering whether a third party may become directly
involved in pending litigation or administrative action, our
courts have repeatedly used the phrase "standing to
intervene" as conceptually equivalent to
"standing." See, e.g., State v. N.J.
Zinc Co., 40 N.J. 560, 576-78 (1963) (holding that the
holder of an unexercised option to buy land lacked standing
to intervene or participate in a condemnation proceeding);
N.J. Div. of Youth & Family Servs. v. P.P., 422
N.J.Super. 583, 602-03 (App. Div. 2011) (concluding resource
parents, statutorily-barred from becoming parties to a Title
Nine proceeding, lacked "standing to intervene");
In re A.S., 388 N.J.Super. 521, 524-26 (App. Div.
2006) (holding adoption agency lacked standing to intervene
in Title Nine action); Loigman v. Twp. Comm. of
Middletown, 297 N.J.Super. 287, 297 (App. Div. 1997) (citing
with approval Woodbridge State School Parents Ass'n
v. American Federation of State, County & Municipal
Employees, 180 N.J.Super. 501, 503 (Ch. Div. 1981),
holding parents' association lacked "standing to
intervene in a labor dispute between employees . . . and the
governmental entity responsible for the school's
operation"); State v. Jan-Mar, Inc., 210
N.J.Super. 236, 240-41 (Law Div. 1985) (holding that option
holder lacked "standing to intervene" in
condemnation action, and relying on N.J. Zinc),
aff'd in part on other grounds, 236 N.J.Super.
28 (App. Div. 1989).
4:33-1 tracks the language of Fed.R.Civ.P. 24(a)(2) verbatim.
Allstate N.J. Ins. Co. v. Neurology Pain Assocs.,
418 N.J.Super. 246, 254 (App. Div. 2011); Pressler &
Verniero, cmt. 1 on R. 4:33-1. The federal rule and
our Rule mandate intervention if the intervenor's status
is comparable to that of a party that must be mandatorily
joined in the action by the court, with the additional
requirement that the party's interest is not otherwise
adequately represented by existing parties. Ibid.
Compare Fed.R.Civ.P. 19(a)(1)(B)(i) (requiring joinder
"if . . . th[e] person claims an interest relating to
the subject of the action and is so situated that disposing
of the action in the person's absence may . . . as a
practical matter impair or imped the person's ability to
protect the interest"), and the nearly
identical language of R. 4:28-l (a) (2) (i)
(requiring joinder "if . . . the person claims an
interest in the subject of the action and is so situated that
the disposition of the action in the person's absence may
. . . as a practical matter impair or impede the person's
ability to protect that interest"), with
Fed.R.Civ.P. 24(a)(2) (stating for "Intervention of
Right . . . the court must permit anyone to intervene who . .
. claims an interest relating to the property or transaction
that is the subject of the action, and is so situated that
disposing of the action may as a practical matter impair or
impede the movant's ability to protect its
interest"), and the nearly identical language
of R. 4:33-1 (mandating intervention "if the
applicant claims an interest relating to the property or
transaction which is the subject of the action and is so
situated that the disposition of the action may as a
practical matter impair or impede the ability to protect that
other words, a court must grant intervention if the
putative intervenor is on the same footing as someone the
court must otherwise "join as a party to the
action." R. 4:28-1(a). As one federal court
explained, "[t]he only difference between intervention
of right under [the analogous federal rule] and joinder under
[the analogous federal rule] is which party initiates the
addition of a new party to the case." New York State
Ass'n for Retarded Children, Inc. v. Carey, 438
F.Supp. 440, 445 (E.D.N.Y. 1977). It is, therefore, entirely
understandable our courts routinely recognize that a
successful intervenor is a party to the litigation.
Williams v. State, 375 N.J.Super. 485, 530 (App.
Div. 2005), aff'd sub nom. In re P.L. 2001, Chapter
362, 186 N.J. 368 (2006).
1986, the United States Supreme Court noted in Diamond v.
Charles, 476 U.S. 54, 68 n.21 (1986), that "[t]he
Courts of Appeals have reached varying conclusions as to
whether a party seeking to intervene as of right must himself
possess standing." Compare Brennan v. N.Y. City Bd.
of Educ, 260 F.3d 123, 131 (2d Cir. 2001) ("[W]here
a proposed intervenor's interests are otherwise
unrepresented in an action, the standard for intervention is
no more burdensome than the standing requirement."),
Wade v. Goldschmidt, 673 F.2d 182, 185 n.5 (7th Cir.
1982) (A proposed intervenor must demonstrate a direct,
significant and legally protectable interest in the property
at issue in the law suit. The interest "must be
based on a right which belongs to the proposed intervenor
rather than to an existing party in the suit.")
(emphasis added), and Solien v. Miscellaneous Drivers
& Helpers Union, 440 F.2d 124, 132 (8th Cir. 1971)
("Intervention as of right presupposes that the
applicant has a right to maintain a claim for the relief
sought"), with United States v. Imperial Irrigation
Dist., 559 F.2d 509, 521 (9th Cir. 1977) ("A party
seeking to intervene pursuant to [Fed. R. Civ. P.] 24 . . .
need not possess the standing necessary to initiate the
lawsuit."), rev'd and vacated on other
grounds, 447 U.S. 352 (1980). ...