Court approves Passaic River litigation settlements totaling $165 million; State to pursue remaining claims against primary defendant Occidental

TRENTON – Acting Attorney General John Hoffman and Department of Environmental Protection Commissioner Bob Martin announced today that a Superior Court judge has approved two settlements in the Passaic River litigation that will provide the State with $165.4 million, and permit the DEP to immediately proceed with its substantial legal claims against principal defendant Occidental Chemical Corporation. Occidental is accused of intentionally dumping dioxin and other chemical waste into the Passaic River for decades.

Under the first settlement approved by the court, a total of $130 million will be paid to the State by several defendants including Spanish oil company Repsol, S.A., and Argentina-based energy conglomerate YPF, S.A., YPF Holdings, Inc. and YPF Interntional. Also party to the settlement are CLH Holdings, Inc., Maxus Energy Corporation, Maxus International Energy Company and Tierra Solutions, Inc.

Under terms of the agreement approved by Judge Sebastian Lombardi, the settling defendants’ total exposure to all claims for Passaic River cleanup and removal costs and damages could go as high as $530 million, subject to certain conditions and exceptions related to resolution of the suit against Occidental.

In the second settlement approved by Judge Lombardi, 261 third-party defendants — including 70 municipalities and other public entities — will collectively pay the State a total of $35.4 million. The State did not sue the third-party defendants. Those parties were brought into the case by two of the settling defendants – Maxus and Tierra.

In suing the third-party defendants, Maxus and Tierra argued that pollution of the Passaic River started more than two centuries ago, and that many public and private parties also contributed to its current condition.

Hoffman hailed the two settlements, which were approved by the court yesterday, as a vital step forward in the State’s effort to ensure that polluters pay all costs associated with the Passaic River cleanup, and that New Jersey residents are compensated for damages caused by the pollution.

“These are important settlements for the people of New Jersey and for our environment,” said Hoffman. “The residents of New Jersey should not be forced to bear the cost of cleaning up the Passaic River – a precious natural resource damaged by industrial polluters. In this case and every other case involving polluters who have violated the State’s environmental laws — regardless of how or when – it is our commitment to ensure that those responsible for the contamination are held accountable.”

“The cleanup of the lower Passaic River is extremely important to the health and safety of people who live and work along the river, and is one of our top environmental priorities,” Martin said. “The parties responsible for the pollution should be accountable for the expense of the remediation. We have stood firm in that commitment, and we are pleased with the court’s approval of these settlements.”

Going forward, Hoffman explained, the State intends to pursue its claims against the one remaining non-settling principal defendant, Occidental Chemical Corporation, for future clean-up and removal costs related to contamination of the Passaic River. The State also will pursue Occidental for damages resulting from the intentional discharge of Agent Orange, dioxins and other hazardous substances by the former Diamond Shamrock plant. These costs and damages are separate from, and in addition to, the $165.4 Million the State will receive from today’s settlements.

The Passaic River Litigation was launched by the State eight years ago against Occidental Chemical Corporation and other companies associated with the former Diamond Shamrock Chemicals Company plant in Newark.

Diamond Shamrock manufactured pesticides and herbicides from the 1940s through the 1960s, including the infamous defoliating chemical Agent Orange during the Vietnam War. Over a period of many years, the Diamond Shamrock plant discharged the known carcinogen dioxin, as well as other hazardous substances, into the Passaic River.

In 2012, Judge Lombardi entered a judgment against Occidental Chemical Corporation, holding it liable for all of the State’s clean-up and removal costs because Occidental is the legal successor to Diamond Shamrock. In previous litigation, New Jersey’s Appellate Division determined that Diamond Shamrock intentionally dumped hazardous pollutants into the Passaic River for decades. Judge Lombardi, with the assistance of Special Master retired judge Marina Corodemus, has been overseeing the litigation for several years.

The federal Environmental Protection Agency is currently finalizing a detailed plan for cleanup of the lower eight miles of the Passaic River, which is expected to be released in early 2014.

The State is represented in the Passaic River litigation by Deputy Attorney General John F. Dickinson of the Division of Law, Special Counsel Jackson Gilmour and Dobbs, PC of Houston, Texas, and Special Counsel Gordon and Gordon, of Springfield.

The DEP reminds residents that harvesting blue claw crabs from the waters of the lower river and Newark Bay is prohibited because of the contamination. The DEP continues to engage in coordinated multi-language education efforts reinforcing the ban with the help of community groups and municipalities in the lower Passaic River and Newark Bay region.