A three-judge appellate panel of the New Jersey Superior Court has held that a discharger can be held strictly liable under the Spill Act for damages for “loss of use” of natural resources. NJDEP v. Exxon-Mobil (A-6588-05 June 6, 2007). These damages can be extraordinarily expensive. The case arises out of the remediation of Exxon’s former Bayonne Chemical Plant and Bayway Refinery. Exxon agreed to remediate discharges at the site, and remediate and restore damaged natural resources. Exxon refused, however, to pay for loss-of-use of those natural resources, arguing that the Spill Act (N.J.S.A. 58:10-23.11g (c)(e)) does not expressly provide that a party is strictly liable for such loss. The trial court agreed.

The Appellate Division reversed. The opinion, by implication, acknowledges that Exxon’s reading of the statute is correct- the statute is silent on loss-of-use damages—but finds authority in “broad implied powers” granted to NJDEP, NJDEP’s interpretation of its own powers and the court’s view “that the provisions the Spill Act reinforce the DEP’s inclusive interpretation.” Once again, the New Jersey courts have allowed an agency to define and expand its own powers without regard either to express statutory authority, as here, or direct legislative direction to the contrary, see In Re Adoption of N.J.A.C. 7:26E-1.13, 377 N.J. Super.78 ( App. Div. 2005).

This decision greatly strengthens NJDEP’s hand in seeking greater NRD remedies and exposes dischargers to potentially enormous costs for losses of natural resources which were or would have been used only in theory. An appeal to the New Jersey Supreme Court will likely follow.