Judge Uncovers Flaws in Toxic Cleanup Lawsuit

(CN) - The latest owners of land contaminated with coolants, oil, and other toxic waste must amend their $25 lawsuit against various predecessors, a federal judge ruled.

Sternco Dominion Real Estate Corp. and the Hartz Mountain Group owned the Harrison, N.J., property in question from 1970 to 1999.

When they ceasing their manufacturing and other industrial operations around 1993, the companies followed a directive from the New Jersey Department of Environmental Protection to remediate, and they sought contribution from prior owners.

Before Harrison Redevelopment Agency acquired the title in 2011 through an order of condemnation, the property was owned for 12 years by FER Boulevard Realty and its principal, Erez Shternlicht.

In the process of redeveloping the property with its tenant, Heller Urban Renewal, Harrison allegedly learned that Sternco and Hartz never completed the cleanup, as required by New Jersey's Industrial Site Recovery Act, and that response costs will total $25 million.

Harrison and Heller ultimately sued Sternco, Hartz, FER and Shternlicht, alleging that the property is polluted with oil, polychlorinated biphenyls - which were once widely used to cool transformers and electric motors - and other hazardous waste.

The federal complaint asserts violations of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), two New Jersey statutes, and common law.

U.S. District Judge Stanley Chesler dismissed the entire complaint last week.

"Despite Heller's interpretation of the unresolved [Industrial Site Recovery Act] ISRA cleanup obligations, it provides no authority supporting its view that the [Department of Environmental Protection] DEP action has proven insufficient," the unpublished opinion states. "Heller has pleaded no facts concerning government inaction or failed action. As discussed above, New Jersey law holds that these are essential prerequisites to the cause of action provided by the [New Jersey Environmental Rights Act] ERA."

Chesler dismissed the trespass claim with prejudice but authorized the plaintiffs to amend their claims under CERCLA and the Spill Act, as well as claims for strict liability and negligence.

"The problem with the allegations is that they do not set forth facts which, if taken to be true, plausibly state that an instance of hazardous waste disposal occurred during the ownership period of either the Hartz defendants or the FER defendants," Chesler wrote.

Chesler also refused to declare that Heller is not responsible for the cleanup or indemnification, finding that the company "has provided no indication that CERCLA provides for such remedies."

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