TRENTON, N.J. (Legal Newsline) – An appeals court has upheld a settlement between the New Jersey Department of Environmental Protection and ExxonMobil over damaged sites at the Bayway Refinery.

The Superior Court of New Jersey Appellate Division upheld the settlement Feb. 12.


The agreement had been challenged in court by then-state Sen. Raymond Lesniak and the New Jersey Sierra Club, Clean Water Action, Environment New Jersey and Delaware Riverkeeper Network. 

The case dates back to 1991 when Exxon and the DEP signed administrative consent orders with one another. As part of the agreement, Exxon was to remediate polluted sites, conduct an investigation and develop work plans and feasibility studies.

The state of New Jersey retained its right to seek further compensation for the destruction of natural resources. 

“In August 2004, DEP filed two complaints against Exxon seeking NRD (natural resource damages) 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,” the court decision stated.

“The trial court granted DEP summary judgment holding Exxon was strictly liable for NRD and restoration costs under the Spill Act."

NEP estimated that the damage at both sites cost about $8.9 billion. However, the two parties came to a settlement agreement in which Exxon would pay $225 million to the state treasury, which would be placed in a Hazardous Discharge Site Cleanup Fund.

On Aug. 25, 2015, Judge Michael Hogan approved the consent judgment.

Yet, the environmental groups and Lesniak continued to try and intervene, which is where this appeal stems from. 

“Appellants argue Judge Hogan erred in concluding standing was a prerequisite to their intervention in the lawsuit,” the court decision states.

“The Environmental Groups argue, however, that they have standing under the ERA (Environmental Rights Act) because of DEP's inadequate enforcement; that is, DEP's decision to settle the lawsuit under the terms of the consent order. They also contend they have standing pursuant to the common law. We disagree,” the court decision stated.

The court concluded that Lesniak had no standing but the environmental groups did, “based upon their broad representation of citizen interests throughout this state.” 

However, the court did not reverse the lower court’s decision but ultimately upheld it.

“Although the environmental groups assert a laudable goal, we find no authority prohibiting the transfer of the settlement proceeds or limiting their use, nor any authority that permits this court to wade into the budgetary waters.”

As part of the settlement between DEP and Exxon, “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 1,000 Exxon retail gas stations in New Jersey, excluding those where methyl tertiarybutyl ether (MTBE) had been discharged; release Exxon with prejudice from all NRD claims relating to 16 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.”

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