Partial Settlement in Passaic River Contamination Litigation

Excerpted from NJDEP Press Release http://www.nj.gov/dep/newsrel/2013/13_0062.htm

Acting Attorney General John Hoffman and Department of Environmental Protection (DEP) Commissioner Bob Martin announced today that several principal defendants in the Passaic River litigation have agreed to pay the state $130 million to resolve a portion of the state’s claims related to contamination of the Passaic River.

The settling defendants are Spain-based oil and gas conglomerate Repsol, S.A, Argentina-based energy conglomerate YPF, S.A., YPF Holdings, Inc. and YPF International, as well as CLH Holdings, Inc., Maxus Energy Corporation, Maxus International Energy Company and Tierra Solutions, Inc. The agreement follows a recently-announced $35.4 million proposed settlement with 258 third-party defendants and, if approved by the court, will allow the state to immediately proceed with its claims against the principal defendant, Occidental Chemical Corporation (OCC), for the bulk of the state’s damages and future costs.

Going forward, the state intends to pursue its liability claims against the one remaining non-settling principal defendant, Occidental Chemical Corporation, for all future clean-up and removal costs related to contamination of the Passaic River. It also will pursue OCC 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 $130 Million received from the settling defendants.

Last summer 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.

Under terms of the agreement announced today, 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.

The Passaic River Litigation was launched by the state more than seven 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.

The EPA is currently finalizing a detailed plan for the cleanup of the lower eight miles of the Passaic River.

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.