A federal judge in New Jersey has ruled that the state waived its right to pursue natural resources damages (NRD) by writing a letter to defendant stating that the state environmental agency did not intend to pursue NRD for the site. FMC Corp. v. American Cyanamid, No. 01-0476 (D.N.J. 9/29/10). The New Jersey Department of Environmental Protection’s Office of Natural Resources Restoration wrote the January 2003 letter in response to an inquiry from defendant concerning the amount of NRD that would be sought at a site in Franklin Township, New Jersey.

Thereafter, the state agency changed its NRD policy and filed a lawsuit in 2006 seeking NRD from defendant and others. The agency argued that the state did not waive its right to assess NRD and, even if it did, “a government agency may change policies for the benefit [of] the public without creating rights in parties who claim to have relied on the old policy.” The court disagreed with the government, ruling that the state agency’s letter “could not have been more explicit” as to the agency’s intention not to seek NRD. The letter did not state that the agency’s intention was subject to policy shifts within the agency or that the state’s intention was founded on a current agency policy of not pursuing NRD for groundwater contamination. According to the court, under these circumstances, the state agency expressly waived its right to seek NRD at the site.