NOT FOR PUBLICATION WITHOUT THE APPROVAL

OF THE COMMITTEE ON OPINIONS

PREPARED BY THE COURT

NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,

Plaintiff,

EXXON MOBIL CORPORATION,

Defendant.

FILED WITH THE COURT

AUG 25 2015
Michael J. Hogan. J.S.C.. ret Recall

SUPERIOR COURT OF NEW JERSEY
UNION COUNTY
LAW DIVISION

DOCKET NOS.: UNN-L-3026-04,
consolidated with Docket No. 
1650-05

DECISION

 

For the Plaintiff:
John J. Hoffman, Acting Attorney General

Richard F. Engel, Esq., Deputy Attorney General

Allan Kanner, Esq. and Elizabeth B. Petersen, Esq., Special Counsel to the Attorney General

(Kanner Whiteley, L.L.C.)

For the Defendant:

Marc A. Rollo, Esq., Attorney for Defendant (Archer Greiner RC.)
Theodore V. Wells, Jr., Esq., Attorney for Defendant (Paul, Weiss, Rifkind, Wharton Garrison

LLP)

Alice A. Brown, Esq., Attorney for Defendant

HOGAN, M. J., P.J. Chancery. Retired on Recall

I. Introduction, Statement of Facts, and Procedural History
“Nearly any consent decree can be viewed simultaneously as ‘a crackdown or a sellout.’”
United States v. Telluride Co., 849 F. Supp. 1400, 1402 (D. Colo. 1994) (quoting William A.
Rodger, Jr., 2 Environmental Law: Air and Water, § 4.40 at 584 (1986)). This quote rings
especially true for the settlement that this court has been tasked with reviewing. After eleven
years of litigation, including a sixty-six day trial before this court, the New Jersey Department of
Environmental Protection (“DEP,” State,” or “Department”) and ExxonMobil Corporation
(“Exxon”) have agreed to a consent judgment (“Proposed Consent Judgment” or “Consent
Judgment”) that resolves the State’s claims for natural resource damages in New Jersey
Department of Environmental Protection v. Exxon Mobil Corp., Docket No. UNN-L-3026-04,
consolidated with Docket No. UNN-L-1650-05 (“Bayway/Bayonne Litigation”). The Consent
Judgment also resolves (1) the State’s pending claims in New Jersey Department of
Environmental Protection v. Exxon Mobil Corp. f/k/a GATX Terminals Corp., Docket No. L1063-07, consolidated with Docket No. L-0563-03; and (2) certain potential claims the DEP may
have against Exxon at fifteen other facilities and 1768 retail gas stations.
After giving considerable time and thought to its task, for the reasons stated in this
opinion, the court finds that the proposed consent judgment is fair, reasonable, in the public
interest, and consistent with the goals of the Spill Compensation and Control Act (“Spill Act”),
N.J.S.A. 58:10-23.11 to -23.24. It therefore approves the Consent Judgment. The facts and
procedural history have been set out in a number of previously issued opinions.1 However,

1

Additional information can be found in the Appellate Division’s three interlocutory appeal opinions and this
court’s opinion disposing of four intervention motions. N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., 420 N.J.
Super. 395, 397-401 (App. Div. 2011); N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. A-0316-09T2, 2011
N.J. Super. LEXIS 1385, at *1-2, *27-28 (App. Div. 2011); N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., 393
N.J. Super. 388, 391-97 (App. Div. 2007); N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. UNN-L-3026-04,
slip op. at 1-6 (N.J. Super. Ct. Law Div. July 13, 2015).

1

 because an understanding of this case’s facts and history is integral to understanding the court’s
approval of the Proposed Consent Judgment, the court provides its own Statement of Facts and
Procedural History.2
I.A. Statement of Facts
During the mid-1800s, the Constable Hook peninsula, which is located in the Upper New
York Bay, was composed of salt marshes and intertidal wetlands. Farming was the main local
occupation at this time, but by the 1870s, industry began to spring up.3 One such operation was
the Prentice Oil Company, which was established in 1875 and produced kerosene.4 It is this
company that John D. Rockefeller, through his Standard Oil Company,5 first set his sights on in
establishing what would become the Bayonne Facility (“Bayonne”) at issue in this case.6
Although Prentice had only twenty employees when Standard Oil acquired it in 1877,7
Standard soon began to extensively modify the land, expand its holdings, and develop
infrastructure for an oil refinery. For example, to eliminate the cost of shipping oil to the coast, in
1887 Standard finished constructing an oil pipeline that transported 10,000 barrels of crude oil
from the fields of Pennsylvania directly to Bayonne for processing.8 Outward expansion
continued until the refinery hit its peak in 1936, at which time it employed 5000 workers and
consisted of 650 acres.9 After this time, Standard began selling off tracts of land.10 Even though
all refining and manufacturing had ceased by 1971, the site continued to function as a petroleum
2

Throughout this opinion, the court will reference a number of authorities from the Bayway/Bayonne Litigation
trial. These include select witnesses’ trial transcripts and exhibits that either side introduced into evidence. “PEX”
and “DEX” are shorthand for “Plaintiff’s Exhibit” and “Defendant’s Exhibit,” respectively.
3
Trial Transcript, Southgate, Jan. 29, 2014, Pg. 179, Ln. 18-22. Such industry included a lead and zinc company,
varnish works, and powder mill. Id. at Pg. 204, Ln. 2-19.
4
Trial Transcript, Southgate, Feb. 10, 2014, Pg. 204, Ln. 7-25; PEX 694A, Pg. 21.
5
Standard Oil is Exxon’s predecessor in interest. In this opinion, the company names are used interchangeably.
6
Bayonne is currently situated at 250 East 22nd Street, Bayonne, New Jersey. Proposed Consent Judgment, ¶ 4.
7
Trail Transcript, Southgate, Feb. 10, 2014, Pg. 205, Ln. 9-10.
8
Trail Transcript, Southgate, Feb. 11, 2014, Pg. 41, Ln. 1-14.
9
PEX 694A, Pg. 42.
10
Id. at 37-38.

2

 storage facility and wholesale distribution center.11 In 1993, Exxon sold approximately 210 acres
of the site to International Matex Tank Terminals (“IMTT”), while still retaining ownership of a
few acres.12
At the turn of the twentieth century, the land that would eventually become the Linden
Bayway Refinery (“Bayway”) was similarly composed of marshes and wetlands.13 Although
farming used to be the main occupation,14 by the time Standard Oil began acquiring land in 1907,
the area was beginning to industrially develop. For instance, the Pennsylvania and Short Line
Railroads of Monopoly fame cut across the area.15 After Standard first acquired land at Bayway,
it began constructing refinery infrastructure and did not begin producing petroleum products
until 1909.16 Over the course of the 1900s, Exxon continued to expand operations, refine crude
oil, and manufacture chemicals until December 1992, when it sold the site to the Bayway
Refining Company, a wholly-owned subsidiary of the Tosco Corporation.17 Tosco ultimately
sold the site to Conoco,18 which in turn sold it to Phillips 66.19 Currently, Bayway is owned by
both Phillips 66 and Infineum,20 although several other companies have easements and
leaseholds.21
During the course of Exxon’s ownership and operation of the two sites, large amounts of
hazardous substances,22 including petroleum products, were discharged into the lands and waters

11

Id. at 23, 38.
PEX 865C, Pg. 8. IMTT entered into an NRD settlement with the State for $3 million.
13
Bayway is currently situated at 1400 Park Avenue, Linden, New Jersey. Proposed Consent Judgment, ¶ 4.
14
Trial Transcript, Southgate, Jan. 29, 2014, Pg. 184, Ln. 18-19.
15
PEX 733E.
16
PEX 698A, Pg. 16.
17
DEX 972, Pg. 3.
18
Trial Transcript, Walters, Jan. 27, 2014, Pg. 154, Ln. 11 – Pg. 155, Ln. 3.
19
Trial Transcript, Messina, Aug. 29, 2014, Pg. 97, Ln. 2 – Pg. 98, Ln. 1.
20
Trial Transcript, Messina, Aug. 27, 2014, Pg. 53, Ln. 10-17.
21
Id. at Pg. 54, Ln. 2 – Pg. 55, Ln. 12; Trial Transcript, Sacco, May 13, 2014, Pg. 121, Ln. 15-25.
22
For the Spill Act’s definition of “hazardous substances,” see N.J.S.A. 58:10-23.11b.
12

3

 at and near the sites.23 To address the cleanup of this chronic contamination, the State and Exxon
voluntarily entered into two Administrative Consent Orders (“ACOs”) on December 19, 1991.
Although Exxon denied any statutory or regulatory violation, they agreed to pay a civil penalty
of $1,500,000 for Bayway24 and $1,350,000 for Bayonne.25 In order to “determine the nature and
extent of the problems presented by the discharges of hazardous substances and pollutants at the
Site[s],” Exxon and the Department agreed on the necessity to conduct a remedial investigation
and feasibility study of remedial action alternatives.26 They also agreed “to develop and
implement a plan for remedial action to remove or remediate the hazardous substances and
pollutants from the Site[s].”27 Through December 31, 2014, Exxon has spent $136,101,470 in
remediation-related costs for Bayway and $121,616,000 in remediation-related costs for
Bayonne.28 Importantly, both ACOs contained a “Reservation of Rights” section that stated,
“This Administrative Consent Order shall not be construed to affect or waive the claims of
federal or State natural resources trustees against any party for damages for injury to, destruction
of, or loss of natural resources.”29
I.B. Procedural History
On August 19, 2004, the DEP elected to exercise this reserved right and filed two
complaints against Exxon for alleged injuries to natural resources at Bayway and Bayonne.30 The

23

PEX 0001A (Bayway), ¶¶ 4, 9-10; PEX 505A (Bayonne), ¶¶ 5, 9-10.
PEX 0001A, ¶ 16.
25
PEX 505A, ¶ 16.
26
PEX 0001A, ¶ 12; PEX 505A, ¶ 12.
27
PEX 0001A, ¶ 12; PEX 505A, ¶ 12.
28
Certification of Frank J. Messina, ¶¶ 3-4.
29
PEX 0001A, ¶ 75, PEX 505A, ¶ 75.
30
Bayway Complaint, ¶ 1; Bayonne Complaint, ¶ 1. Although the Bayway Complaint was filed in Union County
and the Bayonne Complaint was filed in Hudson County, the complaints were eventually consolidated under Union
County Docket Numbers: UNN-L-3026-04 (Bayway) and UNN-L-1650-05 (Bayonne).
24

4

 complaints brought statutory Spill Act claims,31 as well as common law public nuisance and
trespass claims,32 for alleged injuries to groundwater, surface water, and ecological resources.33
On October 7, 2004, Exxon attempted to remove the case to the United States District Court for
the District of New Jersey. This attempt was unsuccessful, and the matter was remanded back to
the Superior Court by a March 24, 2005 order. Pursuant to a January 11, 2006 case management
order, Judge Ross Anzaldi, the motion judge at the time, bifurcated the case between the State’s
Property Claims and Surface Water Claims.34
On the same date, the DEP moved for partial summary judgment, seeking a
determination that Exxon was strictly liable as a matter of law for all cleanup and removal costs
under the Spill Act, including the restoration of natural resources. Exxon cross-moved for
summary judgment on the ground that the Spill Act does not provide liability for “loss of use” of
natural resources. On May 26, 2006, Judge Anzaldi granted both motions in part, holding that
Exxon was strictly liable under the Spill Act for natural resource damages (“NRD”), including
restoration, but dismissing the DEP’s Spill Act claims for loss of use damages. N.J. Dep’t of
Envtl. Prot. v. Exxon Mobil Corp., 393 N.J. Super. 388, 397-98 (App. Div. 2007) (hereinafter
“Exxon I”). Although Exxon elected not to appeal the strict liability ruling, the DEP sought an
interlocutory appeal on the loss of use issue. Id. at 398. After examining the Spill Act’s language,
intent, and recent amendments, the Appellate Division reversed and held that loss of use
damages “are a component of costs of mitigating damage to public natural resources.” Id. at 402.

31

Bayway Complaint, ¶¶ 27-33; Bayonne Complaint, ¶¶ 38-44.
Bayway Complaint, ¶¶ 34-43; Bayonne Complaint, ¶¶ 45-54.
33
Bayway Complaint, ¶¶ 8-19; Bayonne Complaint, ¶¶ 11-22.
34
Case Management Order, ¶¶ 1-2 (Jan. 11, 2006). The parties jointly agreed to this order because litigation
involving the Surface Water Claims (the Kill Van Kull, Upper New York Bay, Arthur Kill, and Rahway River) was
expected to include hundreds of potentially responsible parties. On the other hand, they expected litigation involving
the Property Claims to only involve the State and Exxon. All further references in this opinion to the
Bayway/Bayonne Litigation concern the State’s Property Claims.
32

5

 While this appeal was pending, on November 3, 2006, the State’s natural resource
damage assessment (“NRDA”) expert, Stratus Consulting, issued its damages report. At Bayway,
the report identified 1252 acres of intertidal wetland, palustrine meadow/forest (“palustrine
meadow”), and upland forest/meadow (“upland meadow”) habitats that were contaminated.35 At
Bayonne, the report identified 475.7 acres of contaminated habitats.36 Stratus quantified these
damages at $8.9 billion, $2.5 billion for on-site “primary restoration” and $6.4 billion for off-site
“compensatory restoration.”37
After the Appellate Division decided Exxon I in the State’s favor, the DEP moved to
amend its complaints to include common law strict liability counts. N.J. Dep’t of Envtl. Prot. v.
Exxon Mobil Corp., 420 N.J. Super. 395, 398 (App. Div. 2011) (hereinafter “Exxon II”). Exxon
then moved for partial summary judgment, seeking to dismiss the strict liability counts on the
theory that the statute of limitations had run and that the extension statute, N.J.S.A. 58:10B-17.1,
did not apply. Exxon II, 420 N.J. Super. at 398.38 On July 23, 2009, Judge Anzaldi ruled in
Exxon’s favor and dismissed the DEP’s common law strict liability counts. Id. at 401. On May
31, 2011, the Appellate Division reversed and held that the statute of limitations did not bar the
common law strict liability counts because the common law could be considered part of the

35

PEX 1576.
PEX 1581.
37
Compensatory damages were broken down as follows: $3.014 billion for intertidal salt marsh restoration, $3.042
billion for palustrine meadow restoration, and $308 million for upland meadow restoration. Stratus Report, Pg. 4-13.
38
Prior to 1991, statutes of limitation did not run against the State, pursuant to the common law doctrine of nullum
tempus occurrit regi (“no time runs against the king”). After the New Jersey Supreme Court abolished this doctrine,
the Legislature responded by adopting a general ten-year statute of limitations. N.J.S.A. 2A:14-1.2. In July 2001,
this general statute was amended to reference an extension statute governing environmental contamination matters.
This statute was again amended and extended in December 2005. Currently, the extension statute expands the tenyear limitation by five years and six months, so that the statute does not run until fifteen years and six months after a
cause of action accrues under the State’s environmental laws. Exxon II, 420 N.J. Super. at 398-400.
36

6

 State’s environmental laws, which have been legislatively granted an extension on their statute of
limitations. Id. at 411.39
During 2009, Judge Anzaldi also made three key rulings, none of which were appealed
by the losing party. First, on January 22, 2009, he ruled that the Spill Act applies retroactively
for natural resource damages that occurred before 1977, the year the Act came into effect. N.J.
Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. UNN-L-3026-04, letter op. at 5 (N.J. Super. Ct.
Law Div. Jan. 22, 2009) (hereinafter “Retroactivity Ruling”). Second, on June 5, 2009, he
granted Exxon’s “physical modification” motion. This ruling dismissed “the DEP’s claims,
under the Spill Act and the common law, for damages for injuries to natural resources of the
State on the Bayway and Bayonne sites that are the result of physical modifications to the
Bayway and Bayonne sites.” N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. UNN-L-302604, at ¶ 1 (N.J. Super. Ct. Law Div. June 5, 2009) (hereinafter “Physical Modification Ruling”).
Finally, in his July 24, 2009 Public Trust Ruling, he held that “[a]ny lands which are
contaminated as a result of actions by Exxon or its predecessors could be subject to damages
under the Spill Act.” N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. UNN-L-3026-04,
letter op. at 4 (N.J. Super. Ct. Law Div. July 24, 2009) (hereinafter “Public Trust Ruling”). With
these rulings decided, and settlement negotiations unable to bear fruit, the parties prepared for
trial, which was to begin January 2014.40

39

On the same day that he ruled in Exxon’s favor concerning the statute of limitation’s application to the common
law strict liability count, Judge Anzaldi also denied the DEP’s motion for interlocutory payment of approximately
$1 million in natural resource damage assessment costs. Although the DEP also appealed this decision, the
Appellate Division, on the same day that it released Exxon II, also released a third interlocutory appeal decision
affirming Judge Anzaldi’s denial of the payment motion. N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. A0316-09T2, 2011 N.J. Super. LEXIS 1385, at *1-2 (App. Div. 2011).
40
Due to the expected length of the trial, and as a convenience to the court, the parties agreed to have the case tried
in Burlington County.

7

 I.C. The Parties’ Experts and the Trial
Each side assembled a host of expert witnesses for what was agreed to be the “battle of
experts” that was to unfold over the coming months. The only thing matching the number of
each sides’ expert witnesses were the number of “Rule 104 Motions”41 that the opposing side
filed in an attempt to exclude the opposing witnesses: the State retained eight experts, seven of
which Exxon sought to exclude with Rule 104 Motions; Exxon sought to introduce six experts,
and the State countered with six Rule 104 Motions. Such hearings are normally held before the
expert testifies and outside the presence of the jury so that the jury will not hear inadmissible
testimony if the judge ultimately excludes the expert. In the interest of judicial economy, because
the present case was to be a bench trial expected to last many months, the court and the parties
agreed to allow all experts to testify at trial. The parties agreed that post-trial, the court would
then decide the pending 104 Motions. Further, it was agreed that the court would not consider the
testimony of excluded experts in forming its opinion.
The court intended to release its 104 decisions as part of its opinion. Due to the
settlement of this case, that opinion, and thus the 104 rulings that it contains, has not been
released. However, a brief discussion of each sides’ experts is warranted in order to understand
this court’s approval of the Proposed Consent Judgment.
The State proffered Dr. Joshua Lipton and Dr. Eldon Blancher II of the aforementioned
Stratus Consulting, their central witnesses, as experts in the fields of (1) natural resource damage
assessment; (2) environmental toxicology and chemistry; (3) ecology; and (4) environmental
science. The State retained Lipton to determine the extent of natural resource injury to the
41

Pursuant to New Jersey Rule of Evidence 104(a), “When the qualification of a person to be a witness, or the
admissibility of evidence . . . is in issue, that issue is to be determined by the judge.” N.J.R.E. 104(a). At these “104
Hearings,” either party may challenge the qualifications of the other side’s expert witness or the admissibility of that
witness’s testimony.

8

 Bayway and Bayonne sites and to quantify the value of any allegedly lost resources or services.
Although Blancher did not testify at trial, he collaborated with Lipton to produce the combined
expert report on injury and damages at the sites (the “Stratus Report”). As mentioned above,
Lipton testified that this Report quantified primary restoration damages at $2.5 billion and
compensatory restoration damages at $6.4 billion. To arrive at this $6.4 billion figure, Lipton
employed a Habitat Equivalency Analysis (“HEA”), a complex, mathematical methodology.
Lipton’s HEA required a number of inputs, which Exxon contested, for the formula to reach its
ultimate output: the $6.4 billion figure. Some of these inputs were allegedly within Lipton’s area
of expertise, such as (1) the number of injured acres of certain habitats; (2) the per-acre cost to
restore allegedly injured intertidal, subtidal, and palustrine meadow habitats; (3) the alleged start
dates for the accrual of damages; (4) how long it would take to implement restoration; (5) the
end date for the benefits of restoration; (6) the base year by which to measure the value of a
dollar; and (7) the proper discount rate. For two other key inputs, the State needed to retain other
witnesses.
The first of these was Dr. Emily Southgate, who opined on the condition of Bayonne and
Bayway prior to Standard Oil’s arrival. The State sought to have her qualified as an expert in the
field of historical ecology. Her testimony was critical to the State’s case for two reasons. First,
her opinion on the sites’ condition before Standard Oil’s arrival was important because the
Appellate Division has held that the Spill Act “requires the return of natural resources to their
pre-discharge condition.” Exxon I, 393 N.J. Super. at 405-06. Secondly, the sites’ condition was
important because one of the inputs to Lipton’s HEA was the habitat condition prior to the
accrual of damages, i.e., the first discharge.

9

 The second of these expert witnesses was Robert Williams, a proffered expert in the
fields of forestry, forest reforestation, and forest restoration cost estimation. The State retained
Williams to estimate the cost of restoring an uplands meadow as part of their overall restoration
plan. Williams’ estimate was key to determining the per-acre uplands meadow restoration cost
input for the HEA.
In support of its claim for on-site primary restoration at Bayway and Bayonne, the State
retained Randy Horsak, head of the consulting firm 3TM, and sought to have him qualified in the
fields of environmental engineering and engineering cost estimation. Horsak’s charge was to
give cost estimates of the State’s proposed wetlands restoration project and overall cost for
primary restoration at Bayway and Bayonne. The State also sought to introduce Ronald
Ostermiller, a purported expert in the fields of engineering, project development, conceptual
design, and cost estimation. He testified to support the State’s assertion that its primary
restoration plan was practicable, as required under the Spill Act. N.J.S.A. 58:10-23.11u.b(4).
The State’s final two witnesses were John Sacco, current head of the Office of Natural
Resources Restoration, and Dr. Robert Morrison, a chemist. The State offered Sacco as an expert
in the fields of (1) environmental management, including restoration projects; (2) environmental
science with emphasis on coastal ecosystems and restoration; (3) applied ecology; (4) natural
resource damage assessment practice in New Jersey; and (5) New Jersey trust resources.
Morrison was retained to review Exxon’s soil sampling results from Bayway and Bayonne and
develop a database of chemicals detected in the soils and sediments. Although Exxon did not
seek to exclude Morrison’s opinions on 104 grounds, it retained its own chemist, who sought to
undercut these opinions.42

42

For how the State’s proffered experts are relevant to the court’s decision to approve the Proposed Consent
Judgment, see infra Part III.B.

10

 This expert was Dr. Paul Boehm, whom Exxon proffered in the fields of (1)
environmental organic chemistry; (2) environmental forensics; (3) environmental assessment and
chemistry; and (4) fate and transport of chemicals. Exxon retained Boehm (1) to review Drs.
Lipton’s and Morrison’s reports, to understand the methodologies that they used, and to
determine whether those were generally accepted methodologies; and (2) to analyze the chemical
background information in the Bayonne and Bayway areas. In a further effort to undermine
Lipton’s and Morrison’s testimony, Exxon retained Dr. Thomas Ginn, whom they proffered as
an expert in the fields of (1) ecotoxicology; (2) ecology; (3) natural resource damage
assessments; (4) habitat equivalency analysis; (5) environmental risk assessment; and (6)
resource equivalency analysis. Exxon retained him to (1) review the State’s experts’ reports and
give opinions on them; (2) evaluate the ecological conditions at Bayway and Bayonne; and (3)
provide his own opinions concerning the injuries to natural resources at the sites. As another
critique of not only the Stratus Report, but also Horsak’s 3TM Report, Exxon retained Dr. John
Rodgers and proffered him as an expert in the fields of (1) wetlands; (2) construction and
restoration of wetlands; (3) estimating costs of wetland construction and restoration; (4)
ecotoxicology; and (5) environmental toxicology.
These three proffered experts collaborated with Dr. William Desvousges, who was to be
Exxon’s counterpart to Dr. Lipton. Exxon offered him as an expert in the fields of economics and
natural resource damage assessments and the subfield of natural resource economics. Exxon
retained Desvousges to (1) provide an objective assessment of potential economic losses
associated with Bayway and Bayonne; and (2) evaluate the expert reports of the State’s
witnesses. In addition to pointing out alleged flaws in Dr. Lipton’s NRDA and HEA,

11

 Desvousges, along with Boehm, Ginn, and Rodgers, formulated his own HEA, which estimated
damages as being between $1.4 million and $3 million.
Exxon proffered Dr. Maury Klein as an expert in the field of history and retained him to
discuss (1) the value of wetlands and how this value has changed over time; (2) the benefits New
Jersey received from the Bayonne and Bayway refineries; and (3) the role these refineries played
in World War II (“WWII”). By showing how the value of wetlands has changed over time,
Exxon sought to discredit Lipton’s HEA. They argued that for a HEA to reliably function, a key
assumption was that the value of the natural resource must not change over time. As for the
alleged refinery benefits and the refineries’ role during WWII, Exxon sought to argue that they
deserved a credit for these benefits and that the State could not recover damages during the War
years under the Spill Act’s “Act of War” affirmative defense. N.J.S.A. 58:10-23.11g(d)(1).
Last was Dr. Tod Delaney, whom Exxon offered as an expert in the fields of engineering
and site investigations. Exxon retained Delaney to examine the Bayway and Bayonne site
development from the commencement of infrastructure construction until the late 1970s. With
his testimony, Exxon sought to show that, pursuant to Judge Anzaldi’s Physical Modification
Ruling, all or most of the State’s alleged natural resource damages were not due to the discharge
of hazardous substances, but rather lawful industrial modifications. See N.J.S.A. 58:10-23.11b
(defining “discharge” as “any intentional or unintentional action or omission resulting in the
releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of hazardous
substances into the waters or onto the lands of the State, or into waters outside the jurisdiction of
the State when damage may result to the lands, waters or natural resources within the jurisdiction
of the State”).

12

 From January to September 2014, this court heard sixty-six days of trial, which included
expert opinion testimony, factual lay testimony, and two days for closing arguments. At the end
of trial, the court set off to begin work on its written opinion, which it estimated would not be
ready until spring 2015. In November 2014, the parties submitted their extensive post-trial briefs,
which maintained the same positions they asserted at trial. Then, in February 2015, a letter from
the parties arrived notifying the court that they were on the cusp of reaching a settlement. On
February 20, 2015, they notified the court that an agreement had been struck.
II. The Proposed Consent Judgment
Under the terms of the Proposed Consent Judgment, Exxon agrees to pay the State “$225
million by certified check made payable to ‘Treasurer, State of New Jersey,’ or by wire transfer
pursuant to instructions provided by the [State].”43 The State shall place that money into a
segregated account within the Hazardous Discharge Site Cleanup Fund, where it will earn
interest and shall not be used by the State for any purpose, until the Consent Judgment becomes
final and non-appealable.44 In return, the State (1) releases with prejudice and covenants not to
sue Exxon for all claims that it asserted or could have asserted in the Bayway/Bayonne
Litigation;45 (2) dismisses the Surface Water Claims without prejudice and agrees that the
Surface Water Claims can only be brought in the future in a multi-defendant action if a formal
natural resource damage assessment is completed by the applicable trustee through a procedure
that allows for Exxon’s participation;46 (3) releases with prejudice and covenants not to sue
Exxon for all NRD relating to Exxon Retail Stations (the “Retail Gas Stations”) located within
the state (this excludes any claims involving any Exxon Retail Station where methyl tertiary
43

Proposed Consent Judgment, ¶ 5.
Ibid.
45
Id. at ¶ 7.
46
Id. at ¶ 8.
44

13

 butyl ether (“MTBE”) has been discharged);47 (4) releases and covenants not to sue Exxon for all
NRD relating to sixteen facilities listed in Attachment C (the “Attachment C Facilities”),
excluding any claims involving any facility listed on Attachment C where MTBE has been
discharged (one of these facilities is the Former Paulsboro Terminal #3045 that has been the
subject of ongoing litigation in Gloucester County, New Jersey Department of Environmental
Protection v. Exxon Mobil Corp. f/k/a/ GATX Terminals Corp., Docket No. L-1063-07
consolidated with L-0563-03 (“Paulsboro Litigation”);48 and (5) agrees to defer the final remedy
determination and remediation for Morses Creek “until the cessation of refining operations at the
[Bayway] site, which will be when operational conditions at [Bayway] no longer require the
regular discharge into Morses Creek of 30 million gallons per day or more of once-through noncontact cooling water pursuant to NJPDES Permit No. NJ0001511 (or as renewed/reissued).”49
Further, the parties agree that (1) each party shall bear its own costs and expenses in the
Bayway/Bayonne Litigation and Paulsboro Litigation;50 (2) the Proposed Consent Judgment will
not alter, suspend, or otherwise impact Exxon’s obligations under any ACOs, with the exception
of the Morses Creek deferral;51 (3) the State shall retain full authority and sole discretion to
require Exxon to take any action to “address an immediate environmental concern, an imminent
and substantial endangerment to public health, welfare or the environment, or an emergency
response arising from or related to the Bayonne Facility, the Bayway Facility, any of the

47

Id. at ¶ 9.
Id. at ¶ 10. The sixteen Attachment C Facilities are: (1) Atlantic City Terminal 99-ACP; (2) Atlantic City
Terminal #3001; (3) Edison Research Lab; (4) Edison Synthetics Plant; (5) Flemington Terminal; (6) Florham Park
Facility; (7) Trenton Terminal #29005; (8) Linden Technical Center; (9) Linden Terminal #29074; (10) Long
Branch Terminal; (11) Morristown Municipal Airport Fuel Farm; (12) Paulsboro Terminal #3045; (13) Paulsboro
Lube Plant #29004; (14) Former Tomah Facility; (15) Pennington Facility; and (16) Teterboro Airport Fuel Farm.
Id. at Attachment C.
49
Id. at ¶ 13.
50
Id. at ¶ 14.
51
Id. at ¶ 15. In addition to the Bayway/Bayonne ACOs, Exxon has entered into ACOs for the Attachment C
Facilities and Retail Gas Stations.
48

14

 ExxonMobil Retail Stations, and any of the sites listed in Attachment C;”52 and (4) Exxon will
not “sue or assert any claim or cause of action against the State concerning the Matters
Addressed.”53
The agreement also states that “[n]othing contained in this Consent Judgment shall be
considered an admission by [Exxon] . . . of any wrongdoing or liability on [its] part,”54 and it
grants Exxon contribution protection “to the fullest extent possible pursuant to Section 113(f)(2)
of [the Comprehensive Environmental Response, Compensation, and Liability Act] CERCLA,
42 U.S.C.A. §§ 9613(f)(2), the Spill Act, N.J.S.A. 58:10-23.11f.a.(2)(b) and any other statute,
regulation, or common law principle that provides contribution rights against ExxonMobil . . .
.”55 Finally, the agreement contains a non-severability clause that states:
All Sections, Paragraphs and provisions of the Consent Judgment (except
headings and section titles) are integral to the Consent Judgment, and any Court
Order that does not approve this Consent Judgment in its entirety or attempts to
modify this Consent Judgment, except as to ministerial changes, shall cause this
Consent Judgment to be void and of no effect, unless otherwise agreed in writing
by the Parties.56
In accordance with N.J.S.A. 58:10-23.11e2, the State published a copy of the Proposed
Consent Judgment on the DEP’s website, published notice in the New Jersey Register, and
arranged for notice in twelve newspapers.57 Details of the settlement were made public April 6,
2015. The settlement immediately received extensive public backlash and has since been the
topic of a number of media sources. Although the DEP usually gives the public thirty days to
comment on any proposed settlement, due to the heightened public interest, it extended the time
period prescribed in N.J.S.A. 58:10-23.11e2 to sixty days. This Public Comment Period ended
52

Id. at ¶ 16.
Id. at ¶ 18.
54
Id. at ¶ 20.
55
Id. at ¶ 23.
56
Id. at ¶ 29.
57
Id. at ¶¶ 24-25.
53

15

 June 5, 2015, by which time the DEP had received 16,013 public comments (“Public Comments”
or “Public Commenters”),58 the vast majority of which were opposed to the settlement. The
purpose of soliciting these comments is twofold. First, in any settlement under the Spill Act, the
DEP reviews the comments before it decides to make a formal application for approval of a
settlement. Second, the court ultimately charged with approving a settlement can review the
comments for assistance in determining if the settlement is fair, reasonable, and in the public
interest.59
On June 9, 2015, the New York/New Jersey Baykeeper, New Jersey Sierra Club, Clean
Water Action, Delaware Riverkeeper, Delaware Riverkeeper Network, Environment New Jersey,
Natural Resources Defense Council, and New Jersey Audubon (the “Environmental Groups”)
collectively filed a motion to intervene as of right under N.J. Ct. R. 4:33-1 or, alternatively, for
permissive intervention under N.J. Ct. R. 4:33-2. On June 19, 2015, New Jersey State Senator
Raymond Lesniak, individually and as a member of the New Jersey State Senate for the 20th
Legislative District (Union), filed motions seeking intervention under the same court rules. The
Environmental Groups and Senator Lesniak opposed the Proposed Consent Judgment and sought
to intervene so that they could (1) brief and orally argue against the Consent Judgment; and (2)
have a right of appeal should the court approve it.
On July 13, 2015, the court denied these motions without prejudice. N.J. Dep’t of Envtl.
Prot. v. Exxon Mobil Corp., No. UNN-L-3026-04, slip op. at 32 (N.J. Super. Ct. Law Div. July

58

Response of the New Jersey Department of Environmental Protection to Public Comments Received on Proposed
Natural Resource Damage Consent Judgment with Exxon Mobil Corporation, 3 (hereinafter “DEP Response to
Public Comments”).
59
After reviewing these comments, on July 9, 2015, the DEP released its “Response to Public Comments” and
formally moved for approval of the Proposed Consent Judgment. Exxon also filed a brief in support of the Consent
Judgment.

16

 13, 2015) (hereinafter “Exxon III”).60 In its written opinion, the court invited the movants to
apply for amicus status, something that both the State and Exxon had indicated they would not
oppose. Although the court initially intended to hold oral argument on the Consent Judgment
July 21, 2015, it delayed the hearing for nine days in order to give the Environmental Groups and
Senator Lesniak (collectively “Amici”) time to apply for amicus status and submit amicus
briefs.61
Less than three days before this hearing was to occur, on July 27, 2015, the
Environmental Groups, through counsel, notified the court that they were appealing Exxon III
and filed a motion with the court requesting a stay. On July 30, 2015, after hearing oral argument
on the stay request, the court denied the request. N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp.,
No. UNN-L-3026-04, letter op. at 12 (N.J. Super. Ct. Law Div. July 13, 2015). That same day,
the court heard oral argument on the Proposed Consent Judgment. Urging approval were Acting
Attorney General John Hoffman, the State’s special counsel, and counsel for Exxon. Amici
urged the court to deny the Consent Judgment. At the time this court released this opinion, the
Appellate Division had not yet ruled on the Environmental Groups’ motion for leave to appeal.
III. Standard of Review and
Application of that Standard to the Proposed Consent Judgment
In certain respects, this is a case of first impression for New Jersey state courts, which
have never adopted a Spill Act consent judgment review standard. When reviewing Spill Act
settlements, federal courts apply the same standard to these settlements that they apply to federal

60

As to the Intervention as of Right Motions, the court found that the DEP adequately represented the movants and
that their motions were not timely. Exxon III, slip op. at 25-26. As to the permissive intervention motions, the court
found that they were not timely, would unduly delay proceedings, and prejudice the adjudication of the rights of the
original parties. Id. at 31.
61
Amicus Curiae Scheduling Order, 1-2.

17

 CERCLA settlements. See, e.g., N.J. Dep’t of Envtl. Prot. v. Atl. Richfield Co. (In re Methyl
Tertiary Butyl Ether “MTBE” Prods. Liab. Litig.), 33 F. Supp. 3d 259, 264 (S.D.N.Y. 2014)
(citing Reichhold, Inc. v. U.S. Metals Refining Co., 655 F. Supp. 2d 400, 444 (D.N.J. 2009); N.J.
Dep’t of Envtl. Prot. v. Gloucester Envtl. Mgmt. Servs., Inc., 821 F. Supp. 999, 1009 (D.N.J.
1993)). Under this standard, courts review consent decrees to ensure they are fair, reasonable,
consistent with CERCLA’s goals, and in the public interest.62 Additionally, the DEP,63 Exxon,64
and Amici65 all agree that the court should apply this standard. Despite this general consensus,
the Spill Act does not mandate a specific settlement review standard,66 and this court is aware of
no New Jersey state court that has adopted any specific standard. Indeed, neither the parties nor
Amici have pointed to any such case. For the reasons stated below, however, the court will adopt
this standard: Spill Act consent judgments, whether approved judicially or administratively,
should be fair, reasonable, faithful to the objectives of the Spill Act, and in the public interest.
This section proceeds by first discussing a court’s role in reviewing a CERCLA
settlement. It then explains why the federal standard is harmonious with New Jersey general
settlement caselaw. This section will then conclude with a number of subsections that explain
why the Proposed Consent Judgment is (1) procedurally fair; (2) substantively fair; (3)
reasonable; and (4) consistent with the Spill Act’s intent and goals. Section IV will then address
specific objections to the Proposed Consent Judgment and explain why it is in the public interest.

62

The In re MTBE litigants also agreed on this standard for review of Spill Act settlements. 33 F. Supp. 3d at 264
n.39.
63
DEP’s Brief in Support of Motion to Approve the Proposed Consent Judgment, 9 (“DEP’s Brief”).
64
Defendant Exxon Mobil Corporation’s Memorandum of Law in Support of the New Jersey Department of
Environmental Protection’s Motion to Approve the Proposed Consent Judgment, 17 (“Exxon’s Brief”).
65
Brief of Movants Amici Curiae in Opposition to Proposed Consent Judgment, 3 (“Environmental Groups’ Brief”);
Brief of Amicus Curiae Senator Raymond J. Lesniak in Response to Motions to Approve Proposed Consent
Judgment, 12 (“Senator Lesniak’s Brief”).
66
The CERCLA review standard comes from the Superfund Amendments and Reauthorization Act of 1986’s
legislative history. Cannons, 899 F.2d at 85 (citing H.R. Rep. No. 253, Pt. 3, 99th Cong., 1st Sess. 19 (1985),
reprinted in 1986 U.S.C.C.A.N. 3038, 3042).

18

 * * *
The policy of the law to encourage settlements has particular force where “a government
actor committed to the protection of the public interest has pulled the laboring oar in constructing
the proposed settlement.” United States v. Cannons Eng’r Corp., 899 F.2d 79, 84 (1st Cir. 1990)
(citing F.T.C. v. Standard Fin. Mgmt. Corp., 830 F.2d 404, 408 (1st Cir. 1987)). Although
judicial deference is warranted in these situations, “‘the true measure of the deference due
depends on the persuasive power of the agency’s proposal and rationale, given whatever
practical considerations may impinge and the full panoply of the attendant circumstances.’” Ibid.
(quoting Standard Fin., 830 F.2d at 408). “Respect for the agency’s role is heightened in a
situation where the cards have been dealt face up and a crew of sophisticated players, with
sharply conflicting interests, sit at the table.” Ibid.; see also New York v. Panex Indus., No. 94CV-0400E(H), 2000 U.S. Dist. LEXIS 7913, at *14-15 (W.D.N.Y. June 6, 2000) (inferring
substantive fairness when “the consent decrees were the product of vigorous negotiations by
skilled negotiators”).
In such situations, “the district court must refrain from second-guessing the Executive
Branch,” Cannons, 899 F.2d at 84 (emphasis added), as the standard “is not whether the
settlement is one which the court itself might have fashioned, or considers ideal, but whether the
proposed decree is fair, reasonable, and faithful to the objectives of the governing statute.” Ibid.
(citing Durrett v. Housing Auth., 896 F.2d 600, 604 (1st Cir. 1990)); see also United States v.
Charles George Trucking, 34 F.3d 1081, 1085 (1st Cir. 1994) (“[A] trial court, without
abdicating its responsibility to exercise independent judgment, must defer heavily to the parties’
agreement and the EPA’s expertise.”); Arizona ex rel. Woods v. Nucor Corp., 825 F. Supp.
1452, 1456 (D. Ariz. 1992) (“Thus, the court will not conduct a de novo review of the merits of

19

 the proposed settlement, but neither will it ‘mechanistically rubberstamp’ the Agreement.”
(quoting Cannons, 899 F.2d at 84)); In re Acushnet River & New Bedford Harbor, 712 F. Supp.
1019, 1032 (D. Mass. 1989) (stating that courts are “not required to ensure that the sovereigns
have struck the best deal possible”). This is so due to “congressional intent concerning the role of
agency expertise,” and because the “federal courts have neither the time nor the expertise to do
so, and CERCLA has properly left the scientific decisions regarding toxic substance cleanup to
the President’s delegate, the EPA administrator and his staff.” United States v. Akzo Coatings of
Am., 949 F.2d 1409, 1424 (6th Cir. 1991). While giving proper deference, courts are to “ensure
that the agency has considered all the relevant evidence in the record and has acted within the
public interest.” Id. at 1426; see also Plaskett v. Esso Standard Oil S.A. (In re Tutu Water Wells
CERCLA Litig.), 326 F.3d 201, 207 (3d Cir. 2003) (“Where the appropriate agency has
reviewed the record and has made a reasonable determination of fault and damages, that
determination is owed some deference.”). “Protection of the public interest is the key
consideration in assessing whether a decree is fair, reasonable and adequate.” Akzo, 949 F.2d at
1435 (citing Acushnet River, 712 F. Supp. at 1028; United States v. Ketchikan Pulp Co., 430 F.
Supp. 83, 86 (D. Ala. 1977)); see also United States v. Kramer, 19 F. Supp. 2d 273, 280 (D.N.J.
1998) (stating that Congress intended federal courts to take “into account the interests of the
public at large, the settling parties and the non-settlers alike”).
The fairness and reasonableness of a consent decree are “pragmatic concepts, and
evaluating them requires common sense, practical wisdom, and a dispassionate assessment of the
attendant circumstances.” Charles George, 34 F.3d at 1085. This pragmatic evaluation does not
require “mathematical exactitude” or “precise calculations.” Mathes v. Century Alumina Co.,
Civ. Nos. 2005/0062, 2007/114, 2008 U.S. Dist. LEXIS 85590, at *8 (D.V.I. Oct. 22, 2008).

20

 This is due to the reality that “[i]n settlement negotiations, particularly in the early phases of
litigation, precise data relevant to determining the total extent of harm caused and the role of
each PRP is often unavailable.” Cannons, 899 F.2d at 88 (citing Superfund Settlements with De
Minimis Waste Contributors: An Analysis of Key Issues by the Superfund Settlements Project,
May 8, 1987, Vol. XIV Chem. Waste Lit. Rptr. 34, 46 (June 1987));67 see also Charles George,
34 F.3d at 1088 (“[A] muddled record is the norm in most CERCLA litigation.”). Courts do not
“leave matters in limbo until more precise information is amassed” because to do so “would
disserve a principal end of the statute -- achievement of prompt settlement and a concomitant
head start on response activities . . . .” Cannons, 899 F.2d at 88. As long as the data “falls along
the broad spectrum of plausible approximations, judicial intrusion is unwarranted . . . .” Ibid.
(citing United States v. Rohm & Haas, 721 F. Supp., 666, 685-86 (D.N.J. 1989)). Courts must
“compare the proportion of total projected costs to be paid by the settlors with the proportion of
liability attributable to them, and then factor into the equation any reasonable discounts for
litigation risks, time savings, and the like that may be justified. United States v. Montrose Chem.
Corp., 50 F.3d 741, 747 (9th Cir. 1995) (citing Charles George, 34 F.3d at 1087).68 A final
consideration is that although it is “self-evident that generally defendants do not settle litigation
for the full value of the asserted damages . . . . [I]n the general run of CERCLA cases . . .
defendants will generally settle for substantially less -- indeed, often for far less given the
inherent problems of proof in these cases -- than the asserted damages.” Acushnet River, 712 F.
Supp. at 1032 (emphasis added).

67

“PRP” is shorthand for “potentially responsible party.”
In Montrose, the Ninth Circuit used the word “settlor” to refer to parties settling a lawsuit. Other courts use the
word “settler” to refer to the same thing. When quoting sources, this court will use the word used in the source.
When not quoting sources, the court will use “settler.”
68

21

 Although the court’s task is “quite limited,” Rohm & Haas, 721 F. Supp. at 685, the
standard is not without teeth. Courts should deny proposed consent decrees if they do not have
“at least an estimate of the projected total natural resource damages at issue in th[e] case.”
Montrose, 50 F.3d at 743 (rejecting a proposed consent decree because the governments’
preliminary damage estimate was known only to the Special Master and not the district court
judge). This estimate is necessary so that courts have some benchmark with which to compare
proposed consent decrees. Id. at 746. Once they have this information, courts must “actually
engage with [it] and explain in a reasoned disposition why the evidence indicates that the consent
decrees” meet CERCLA’s standard. Arizona v. City of Tucson, 761 F.3d 1005, 1012 (9th Cir.
2014) (rejecting a proposed consent decree because, inter alia, the district court’s “entire
numerical analysis [was] found in a single footnote” and its “opinion even fail[ed] to mention the
parties’ individual and aggregate settlement amounts”). Importantly, courts must remember that
deference “does not mean turning a blind eye to an empty record on a critical aspect of
settlement evaluation.” Montrose, 50 F.3d at 748.69
Although this standard may seem amorphous, as this opinion will show, fairness and
reasonableness “have more than a superficial meaning.” Telluride, 849 F. Supp. at 1402. In many
ways, fairness concerns the interactions among parties (settlers, non-settlers, and trustees) and
the methods trustees use to (1) calculate total damages; (2) apportion liability; and (3) calculate
the amount each settler pays. Public interest and consistency with the governing statute concern

69

In addition to Montrose and Tucson, the United States District Courts for the Districts of the Virgin Islands,
Colorado, and Southern District of New York have rejected proposed consent decrees under this standard. In re
MTBE, 33 F. Supp. 3d at 271 (rejecting a Spill Act judicial consent order because the DEP “created an unreliable
list of 498 sites to determine total damages” and “assigned a an [sic] arbitrary $50,000 damages value” to 4547
other sites); Mathes, 2008 U.S. Dist. LEXIS 85590, at *20 (rejecting a CERCLA proposed consent decree because
the government produced “neither the total natural resource damages assessment nor the total project costs”);
Telluride, 849 F. Supp. at 1403-04 (rejecting a Clean Water Act consent decree because “the EPA relied heavily, if
not exclusively,” on the defendant’s expert report “to produce the work plan for . . . remediation and mitigation
projects”).

22

 whether the settlement is an appropriate mechanism for accomplishing environmental cleanup.
Reasonableness links fairness with these two concepts by comparing the total recovery with the
total damages estimate. Under this prong, courts examine whether the settlement amount
appropriately reflects litigation risks and is a large enough sum to further the statute’s goals and
the public interest.
* * *
The court’s review of the relevant New Jersey caselaw concerning settlements shows that
New Jersey courts generally review settlements to ensure fairness, reasonableness, consistency
with the governing statute, and public interest, the same assurances federal courts look for when
reviewing CERCLA consent decrees. For instance, when reviewing DEP settlements under the
Freshwater Wetlands Protection Act (“FWPA”), N.J.S.A. 13:9B-1 to -30, New Jersey courts
ensure that settlements are not “unreasonable or inconsistent with the policies underlying the
FWPA.” Ocean Cnty. Chapter Inc. of Izaak Walton League of Am. v. Dep’t of Envtl. Prot., 303
N.J. Super. 1, 11 (App. Div. 1997). Under Ocean County, courts are also to establish that “the
procedures which the DEP follow[s] in entering into the settlement . . . [are not] unfair,” id. at
12, and can approve a settlement with less than a full record, just as under CERCLA. Compare
id. at 9 (“We also conclude that appellant failed to show . . . that there is a need for a remand to
develop a complete record supporting the settlement.”), with Cannons, 899 F.2d at 88 (“Yet, it
would disserve a principal end of the statute -- achievement of prompt settlement and a
concomitant head start on response activities -- to leave matters in limbo until more precise
information is amassed.”). Furthermore, when reviewing Mount Laurel settlements,70 courts
make sure they are “fair and reasonable” and “adequately protect[] the interests of the persons on
whose behalf the action was brought.” Morris Cnty. Fair Housing Council v. Boonton Twp., 197
70

These settlements involve fairness in affordable housing.

23

 N.J. Super. 359, 370 (App. Div. 1984) (citing Armstrong v. Milwaukee Bd. of Sch. Dirs., 616
F.2d 305, 314-15 (7th Cir. 1980); Cotton v. Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977)).71 This
standard of review is appropriate because it allows for enough deference to balance New Jersey’s
strong public policy favoring settlements, Nolan v. Lee Ho, 120 N.J. 465, 472 (1990); Ocean
Cnty., 303 N.J. Super. at 10, with the need to protect settling parties and the public interest.
Additionally, this standard recognizes that like the EPA, the DEP has been charged by the
Legislature with the duty of “facilitat[ing] and coordinat[ing] activities and functions designed to
clean up contaminated sites in the State.” N.J.S.A. 58:10-23.11a; see also In re Stream
Encroachment Permit, Permit No. 0200-04-0002.1 FHA, 402 N.J. Super. 587, 596 (App. Div.
2008) (“The NJDEP is authorized to ‘formulate comprehensive policies for the conservation of
the natural resources of the State, the promotion of environmental protection and the prevention
of pollution of the environment of the State.” (citing N.J.S.A. 13:1D-9)).
Despite their general agreement that the court should apply the CERCLA standard,72 at
times, the DEP and Exxon have urged this court to apply even more deferential standards. For
instance, the DEP has argued that:
The Spill Act was enacted before CERCLA, against a state law backdrop in which
New Jersey courts long have been instructed to uphold governmental lawsuit
settlements “absent clear and convincing evidence of fraud or other compelling
circumstances.” Ocean Cnty. Chapter Inc. v. N.J. Dep’t of Envtl. Prot., 303 N.J.
Super. 1, 12 (App. Div. 1997). The Legislature never indicated, either upon
enactment of, or any amendment to, the Spill Act, that a more probing review
applies to Spill Act settlements.73

71

Courts’ review of these settlements to ensure they “adequately protect[] the interests of the persons on whose
behalf the action was brought,” is analogous to protection of the public interest. Mount Laurel suits are brought on
behalf of those seeking affordable housing, while Spill Act NRD suits are brought by the DEP on behalf of the
public.
72
The court views the parties’ assertion in the Proposed Consent Judgment that “this Consent Judgment is fair,
reasonable, and in the public interest,” as further evidence that they agree with Amici that this is the correct
standard. Proposed Consent Judgment, ¶ I.
73
Plaintiff’s Reply to Amici Briefs and in Further Support of Motion to Approve the Proposed Consent Judgment,
10 (“DEP’s Reply Brief”).

24

 This is not an inaccurate assertion, but it comes from Ocean County, the same case that held that
FWPA settlements must be fair, reasonable, and consistent with the policies underlying the
FWPA. The court finds that the DEP’s “fraud” argument is best understood as a component of a
settlement’s “fairness,” for if settlement negotiations are premised on fraud, they cannot be
considered fair.
Likewise, Exxon has argued that, “The Spill Act does not, however, expressly provide
the standard for such judicial approval, and there is no New Jersey caselaw squarely on point.
New Jersey law nonetheless sets forth a clear standard for the review of agency action pursuant
to statutory mandate.”74 Exxon asserts that “agency decisions ‘will generally be upheld so long
as they advance the agency’s purpose and function,’”75 and that courts “may reverse an agency
decision if it is arbitrary, capricious, or unreasonable.”76 Further, they contend that agency
decisions should only be disturbed if they are “patently corrupt, arbitrary or illegal.”77
Again, these considerations have their place in the standard, but they are not the be-all
and end-all for Spill Act settlements. Although Exxon is correct that DEP decisions will only be
reversed if they are “arbitrary, capricious, or unreasonable,” In re Stream Encroachment Permit,
402 N.J. Super. at 597 (citations omitted), the DEP has “no superior ability to resolve purely
legal questions,” such as whether the Proposed Consent Judgment is fair, reasonable, and in the
public interest. Greenwood v. State Police Training Ctr., 127 N.J. 500, 513 (1992) (emphasis
added). When reviewing CERCLA settlements, federal courts, however, apply the arbitrary and
capricious standard to a number of settlement components and trustee decisions made in order to
formulate these components. Federal trustee decisions that are reviewed under the arbitrary and

74

Exxon’s Brief, 13-14.
Id. at 14 (quoting Gonzalez v. N.J. Prop. Liab. Ins. Guar. Ass’n, 412 N.J. Super. 406, 417 (App. Div. 2010)).
76
Id. at 15 (quoting In re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp., 216 N.J. 370, 385 (2013)).
77
Id. at 16 (quoting In re Stream Encroachment Permit, 402 N.J. Super. at 598).
75

25

 capricious standard include (1) estimation of total damages, In re MTBE, 33 F. Supp. 3d at 265;
(2) the chosen measure of comparative fault and apportionment of liability, Cannons, 899 F.2d at
87; Mathes, 2008 U.S. Dist. LEXIS 85590, at *7-8; and (3) the chosen method of determining
the total projected costs to be paid by each settler. In re MTBE, 33 F. Supp. 3d at 268-70. In
other words, the inputs (trustees’ calculations and methods) used to produce the final consent
decree are reviewed under arbitrary and capricious, while the output (the consent decree itself) is
reviewed for fairness, reasonableness, faithfulness to the objectives of the governing statute, and
public interest.
In conclusion, the court finds that CERCLA’s settlement review standard is harmonious
with general New Jersey settlement law. It therefore adopts this standard for Spill Act
settlements. In the following subsections, the court will review the Proposed Consent Judgment
for fairness, reasonableness, consistency with the Spill Act’s objectives and intent, and public
interest. During its review, when the court encounters technical decisions made by the DEP, it
reviews them under the arbitrary and capricious standard.
III.A. Fairness
III.A.1. Procedural Fairness
“[F]airness in the CERCLA settlement context has both procedural and substantive
components.” Cannons, 899 F.2d at 86 (citing United States v. Cannons Eng’r Corp., 720 F.
Supp. 1027, 1039-40 (D. Mass. 1989)). “To measure procedural fairness, a court should
ordinarily look to the negotiation process and attempt to gauge its candor, openness, and
bargaining balance.” Ibid. (citing Cannons, 720 F. Supp. at 1040; Rohm & Haas, 721 F. Supp. at
680-81; Kelley v. Thomas Solvent Co., 717 F. Supp. 507, 517-18 (W.D. Mich. 1989); Acushnet
River, 712 F. Supp. at 1031; City of New York v. Exxon Corp., 697 F. Supp. 677, 693 (S.D.N.Y.
26

 1988); New York v. Town of Oyster Bay, 696 F. Supp. 841, 844-45 (E.D.N.Y. 1988); United
States v. Hooker Chems. & Plastics Corp., 540 F. Supp. 1067, 1080 (W.D.N.Y. 1982)).
Negotiations must be “conducted at arm’s length,” Tutu Water Wells, 326 F.3d at 206, and the
parties must act “forthrightly and in good faith.” See Cannons, 899 F.2d at 86.
In determining whether the government entered into the decree in good faith, courts
examine the “willingness of [the trustee] to thoroughly consider all oral and written comments
made with regard to the proposed decree.” Akzo, 949 F.2d at 1435. When governments supply
the court and commenters with additional technical information, this is evidence of good faith
and fairness. See Nucor Corp, 825 F. Supp. at 1459 (discussing substantive fairness). On the
other hand, if the government’s reaction to unfavorable comments is “to dismiss them as
unfounded,” this evinces a lack of good faith. Telluride, 849 F. Supp. at 1406.
The court finds that the Proposed Consent Judgment is procedurally fair. The record
shows that the negotiations between two highly sophisticated parties with sharply conflicting
interests were full of adversarial vigor. Cannons, 899 F.2d at 84, 87 n.4. Further, the parties were
on equal footing, and the process was open and candid. Id. at 86. Finally, the DEP provided
numerous substantive responses to the Public Comments and supplied the court and commenters
with additional information after digesting them. Even though Amici do not seriously question
the Consent Judgment’s procedural fairness, a review of the negotiating process is helpful to
understanding other aspects of its fairness and reasonableness.
Amici contend that the State’s decision to settle for $225 million, an amount they
consider “suspiciously low,”78 was an abrupt change of course.79 This is not the case, as

78
79

Brief Supporting Environmental Groups’ Motions to Intervene, 1.
Id. at 7.

27

 settlement negotiations began under the Corzine Administration, as far back as 2007.80 In 2008,
during mediation conducted by retired Associate Justice Daniel O’Hern,81 “the State proposed a
settlement whereby Exxon Mobil would pay $95 million to the State, $55 million in attorneys’
fees and costs to the State’s outside counsel, and perform off-site remedial projects which the
State valued at approximately $400 million.”82 Exxon immediately rebuffed this proposal, and
Justice O’Hern concluded that further negotiations at that time would be useless.83 Although the
total dollar figure on this proposal was $550 million, the Corzine Administration had performed
an internal valuation of the package that, due to the effect of the pretrial special counsel retainer
agreement, valued the whole package at $350 million.84 Negotiations did not resume until early
2012.85
Later that year, after the State made a settlement demand of $325 million, Exxon
countered with an offer of only $20 million.86 The parties were still far apart. At this time, the
State adopted a strategy under which they believed the only way to force Exxon “into a
reasonable settlement posture” was to aggressively push their case at trial.87 This gambit bore
fruit, as negotiations reopened late in the trial.
For the first time, Exxon offered a substantial sum of money to settle the case: $100
million.88 This time, however, it was the State, emboldened by its effort at trial and believing that

80

Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 49, Ln. 4-12.
Negotiations conducted through a mediator, especially a respected jurist, are a particularly effective way of
ensuring a consent judgment’s procedural fairness, and this court urges the DEP and future defendants to take
advantage of this technique.
82
Certification of Acting Attorney General John J. Hoffman in Support of Plaintiff’s Motion to Approve the
Proposed Consent Judgment, ¶ 3 (“Hoffman Certification”). Although this document is only a certification, not a
trial exhibit, and General Hoffman was not subject to any cross-examination, it was still submitted under oath,
subject to penalty of perjury. Additionally, there are other sources that reference negotiations under the Corzine
Administration, and the court has no reason to doubt General Hoffman’s veracity. Finally, the court reminds readers
that the benefit of detailed exhibits and witness testimony is the rare exception for NRD settlements. Cases often
settle with far less of a record.
83
Ibid.
84
Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 49, Ln. 16 – Pg. 50, Ln. 2.
85
Hoffman Certification, ¶ 4.
81

28

 this sum was inadequate, that took a hardline approach and rejected the offer.89 Post-trial,
negotiations continued in a “protracted and arduous” fashion90 until “the parties arrived at a
figure that exceeded what the State had considered to be fair and reasonable:” $225 million, in
addition to maintaining Exxon’s duty to continue to clean up and remediate the sites under the
ACOs.91
The State proceeded under two different governors and numerous DEP Commissioners to
attempt to settle this case for a guaranteed sum of money, rather than leaving it to the
uncertainties of trial. For seven years, Exxon repeatedly responded to the State’s olive branches
with only token offers. An aggressive trial strategy is often the only way to bring reluctant
parties to the table, and the State employed this tactic with success. The February 2015
agreement was not made on a whim, but was the end product of lengthy negotiations and zealous
advocacy at trial.
Furthermore, Amici’s contention that the State’s inclusion of the Attachment C Facilities
and Retail Gas Stations was done without consideration of the facts is also without merit. As
General Hoffman made clear, during the 2012 negotiations, “the notion of a global settlement
resolution was discussed.”92 In that year, these additional sites were analyzed, and that analysis
“was consistent with the de minimis value that is accorded those initial sites in the [Proposed
Consent Judgment].”93 The State has known the limited value of these sites for years now, and,

86

Ibid.
Id. at ¶ 5; Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 51, Ln. 6-19.
88
Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 54, Ln. 7-14.
89
Ibid.
90
Hoffman Certification, ¶ 12.
91
Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 54, Ln. 16-20. Although Amici have argued that the
Consent Judgment’s reaffirmation of Exxon’s ACO remediation duties is meaningless, this reaffirmation is
important because without it, Exxon had a colorable argument that a primary restoration award released them from
their remediation responsibilities.
92
Id. at Pg. 51, Ln. 20-22.
93
Id. at Pg. 51, Ln. 22 – Pg. 52, Ln. 2.
87

29

 contrary to Amici’s contention, the justifications and valuations of these sites laid out in the DEP
Response to Public Comments were not post-hoc rationalizations.
The court also finds that the DEP Response to Public Comments evinces the fact that the
Consent Judgment was entered into in good faith. Released July 9, 2015, this document contains
a nine-page introduction, twenty-two pages of substantive comments/responses, and a lengthy
attachment listing all Exxon Retail Gas Stations located in New Jersey.94 The DEP provided
numerous, substantive responses to the public’s comments and concerns on the Consent
Judgment’s (1) Surface Water Claims provision; (2) Morses Creek deferral; (3) grant of
contribution protection to Exxon; (4) denial of liability provision; (5) adequacy of recovery; (6)
inclusion of the Attachment C Facilities and Retail Gas Stations; (7) reaffirmation of Exxon’s
ACO duties; (8) lack of a provision mandating that the entire $225 million be used for
environmental purposes; (9) the amount of money the State will spend in attorneys’ fees; and
(10) tax issues.95 In response to calls for more complete information, when the State formally
notified the court that it was seeking approval of the Proposed Consent Judgment on July 9,
2015, it provided additional certifications on the negotiation process and inclusion of the
additional facilities. Furthermore, the DEP opened its Attachment C Facility files to the public
and did not oppose the Environmental Groups’ and Senator Lesniak’s amicus applications.
The court gives no weight to two of Amici’s final critiques of the Consent Judgment’s
procedural fairness. Senator Lesniak contends that because the Attorney General and DEP
Commissioner issued press releases praising the Consent Judgment when it was first announced
to the public, this shows “that they were firmly committed to the settlement” even before

94
95

See generally DEP Response to Public Comments.
See generally id. For the court’s analysis of these issues, see infra Section IV.

30

 considering the Public Comments.96 The court is uncertain what the Senator expected the
Attorney General and Commissioner to say in their press releases. Viewed against the backdrop
of eight years of settlement negotiations where Exxon’s initial position was $0, the State saw the
settlement as a victory.
In a similar vein, the Environmental Groups fault the DEP for maintaining in its post-trial
brief that it proved $8.9 billion worth of damages and asserting that Exxon’s defenses were
weak.97 Again, the court is at a loss for what the Environmental Groups expected the DEP to
argue in its post-trial briefs. Although the trial influenced settlement negotiations, the two events
were traveling on parallel paths. The DEP was all too aware that over the past seven years,
negotiations had repeatedly broken down. It makes perfect sense that the DEP would attempt to
lock in a certain sum of money through settlement, while maintaining their trial arguments in the
event negotiations collapsed.
In conclusion, the court finds that the Proposed Consent Judgment is procedurally fair. It
was the product of arm’s length, adversarial negotiations between two highly motivated,
sophisticated parties. Moreover, the DEP demonstrated good faith with their Response to Public
Comments and allowance of Amici to submit briefs and argue orally.
III.A.2. Substantive Fairness
While the procedural fairness inquiry examines the process, the substantive fairness
inquiry examines the output of that process. “Substantive fairness introduces into the equation
concepts of corrective justice and accountability: a party should bear the total cost of the harm
for which it is legally responsible.” Cannons, 899 F.2d at 87 (citing Developments in the Law –
Toxic Waste Litigation, 99 Harv. L. Rev. 1458, 1477 (1986)). These concepts dictate that
96
97

Senator Lesniak’s Brief, 7.
Environmental Groups’ Brief, 8.

31

 “settlement terms must be based upon, and roughly correlated with, some acceptable measure of
comparative fault, apportioning liability among the settling parties according to rational (if
necessarily imprecise) estimates of how much harm each PRP has done.” Ibid. (citing Rohm &
Haas, 721 F. Supp. at 685; Cannons, 720 F. Supp. at 1043; Kelley, 717 F. Supp. at 517; United
States v. Conservation Chem. Co., 628 F. Supp. 391, 401 (W.D. Mo. 1985)). “As long as the
measure of comparative fault on which the settlement terms are based is not ‘arbitrary,
capricious, and devoid of a rational basis,’ the district court should uphold it.” United States v.
Se. Pa. Transp. Auth., 235 F.3d 817, 824 (3d Cir. 2000) (quoting Cannons, 899 F.2d at 87).
Likewise, a trustee’s calculation of total damages must not be arbitrary, capricious, and
unreasonable. In re MTBE, 33 F. Supp. 3d at 265. “In addition, the ultimate measure of
accountability ‘is the extent of the overall recovery, not the amount of money paid by any
individual defendant.’” United States v. Davis, 261 F.3d 1, 25 (1st Cir. 2001) (quoting Charles
George, 34 F.3d at 1086).98 Finally, to account for the fact that precise data is often unavailable,
“particularly in the early phases of environmental litigation,” Cannons, 899 F.2d at 88, a trial
court’s “finding of procedural fairness may also be an acceptable proxy for substantive fairness,
when other circumstantial indicia of fairness are present.” Davis, 261 F.3d at 23 (citing Charles
George, 34 F.3d at 1089); see also Cannons, 899 F.2d at 87 n.4 (“To the extent that the process
was fair and full of ‘adversarial vigor,’ Exxon, 697 F. Supp. at 693, the results come before the
court with a much greater assurance of substantive fairness.”).

98

In the present case, this consideration might not seem to have that much relevance because Exxon is the only
defendant. In its seminal CERCLA settlement decision, however, the First Circuit noted that reasonableness,
fairness, and fidelity to the statute “are all mutable figures taking on different forms and shapes in different factual
settings. . . . We believe that Congress intended, first, that the judiciary take a broad view of proposed settlements . .
. .” Cannons, 899 F.2d at 85. The court finds that the broad principles of this tripartite formula are applicable in all
Spill Act settlement cases. As a note to future reviewing trial courts, in situations where there are multiple
defendants, “The proper way to gauge the adequacy of settlement amounts to be paid by settlings PRPs is to
compare the proportion of total projected costs to be paid by the settlors with the proportion of liability attributable
to them.” Davis, 261 F.3d at 24 (citing Charles George, 34 F.3d at 1087).

32

 Due to the high level of procedural fairness, the Proposed Consent Judgment comes
before the court with strong indicia of substantive fairness. The court finds, however, that even
without these indicia, the Consent Judgment is substantively fair on its own merits. This section
continues by examining the DEP’s method of calculating total damages, method of calculating
an adequate sum paid by Exxon, and decision to not bring suits for fifteen of the Attachment C
Facilities and Retail Gas Stations. Because these are the types of decisions well within the DEP’s
area of technical expertise and statutorily delegated duties, the court, as stated above, will review
them under the arbitrary and capricious standard.
III.A.2.a. The DEP’s Total Damages Estimates
Amici do not contest the substantive fairness of the DEP’s total damages estimate for
Bayway and Bayonne. In fact, if Amici had things their way, this is the amount of money that
Exxon would pay for damages to these sites. This estimate, $8.9 billion, was calculated by Dr.
Lipton’s Stratus Consulting after conducting a natural resource damage assessment at the sites.
The court does not pass judgment on the accurateness of this figure, but it finds that the DEP’s
decisions to retain Stratus and accept its assessment of the sites were well within its discretion
and not arbitrary and capricious. Amici, however, fiercely contest the DEP’s total damages
estimates for the Attachment C Facilities and Retail Gas Stations.
The court finds that these estimates are also substantively fair. Of the sixteen Attachment
C Facilities, only one is part of a pending suit: the Former Paulsboro Terminal #3045
(“Paulsboro”). The DEP initiated this suit in 2007 against Exxon and two other larger-fault
defendants.99 Based on an expert report and NRDA, the DEP initially estimated total damages at
$84 million: $81 million for primary restoration and $3.4 million for compensatory

99

DEP’s Reply Brief, 20.

33

 restoration.100 In 2011, the DEP settled with the non-Exxon defendants for $1.1 million, a
settlement that the Honorable Anne McDonnell, J.S.C., approved.101 This payment was for post1989 damages, the year Exxon stopped operating the facility. After this settlement, the DEP’s
experts re-examined the data to determine the pre-1989 damages attributable to Exxon and
estimated these damages at $12.4 million for primary restoration and $1.4 – $3.2 million for
compensatory restoration.102 The court finds that the method used to estimate total damages at
Paulsboro, the employment of specialized experts to conduct a formal NRDA, is much like the
method it has determined is substantively fair for the Bayway/Bayonne estimation. The DEP’s
initial and post-2011 estimates were plausible and rational.
Review of the DEP’s total damages estimate for the other fifteen Attachment C Facilities
presents more of a challenge for the court because NRDAs have not been completed for the sites.
However, the court is mindful of the fact that because “a muddled record is the norm,” formally
completed NRDAs are the rare exception in CERCLA and Spill Act NRD settlements. See
Charles George, 34 F.3d at 1088 (citing Cannons, 899 F.2d at 88; Lynnette Boomgaarden &
Charles Breer, Surveying the Superfund Settlement Dilemma, 27 Land & Water L. Rev. 83, 121
(1992); Barry S. Neuman, No Way Out? The Plight of the Superfund Nonsettlor, 20 Envtl. L.
Rep. 10,295, 10,299 (July 1990)). The court agrees that in these situations, trustees must be
given flexibility and that trial courts “should give the [DEP]’s expertise the benefit of the doubt
when weighing substantive fairness.” Cannons, 899 F.2d at 88; see also Charles George, 34 F.3d
at 1088 (citations omitted).
Applying these principles to the DEP’s total damages estimate for the fifteen other
Attachment C Facilities, the court finds that this estimate is not arbitrary and capricious and is
100

Id. at 20-21.
Id. at 21.
102
Ibid.
101

34

 supported by substantial, credible evidence. Exxon has remediation obligations for all these
Facilities, but the DEP has no plans to bring NRD suits for any of them. This is because the
contamination is so insubstantial, that none of the sites have “groundwater or other
contamination that would make it cost effective for [Commissioner Martin] to recommend that
suit be filed.”103
The court has examined the following evidence of contamination and injury at these sites.
First, attached to Commissioner Martin’s Certification in Support of the Consent Judgment are
sixteen certifications from his professional staff describing the size of groundwater plumes at
each site. With the exception of three plumes that are sixteen, twenty, and twenty-five acres
large, all plumes are less than five acres in size.104 In fact, half are less than two acres in size.105
Second, Commissioner Martin’s Certification laid out six factors that his staff evaluated to
determine what they would expect to claim as NRD: (1) the location of the site; (2) whether the
site is in a water supply deficit or surplus area; (3) what water supply planning area the site is in;
(4) the size of the classification exemption area (“CEA”) (which indicated how much
groundwater may not be used due to possible contamination); (5) the duration of the injury; and
(6) the water recharge rate.106 Based on these factors, the DEP estimated total damages for these
fifteen Attachment C Facilities at $4 million.107 According to Commissioner Martin, this
recovery “compares favorably to . . . prior similar settlements.”108 Finally, the court has weighed
General Hoffman’s statements made during oral argument. Responding to an Amici assertion
103

Certification of Commissioner Bob Martin in Support of Motion to Approve Consent Judgment, ¶ 29 (“Martin
Certification”).
104
See generally Martin Certification (Staff Certifications).
105
See generally id.
106
Id. at ¶ 31.
107
DEP Response to Public Comments, 14. The $4 million amount does not include the DEP’s estimate of injuries
caused by the discharge of MTBE, which is present at eight of the sixteen Attachment C Facilities. The Proposed
Consent Judgment specifically reserves the DEP’s right to bring future suits to recover for MTBE damages.
Proposed Consent Judgment, ¶ 10.
108
Martin Certification, ¶ 34.

35

 that the DEP’s evaluation and valuation of these sites was done after the Public Comment Period
ended, he clarified that “valuation was done in [20]12, that was similar to the valuation that was
done every year before the information came in, was that these sites are not worth the litigation
costs.”109 Based on this information, the court cannot say the DEP’s valuation was “‘willful and
unreasoning . . . without consideration and in disregard of circumstances.’” Gloucester, 591 F.
Supp. 2d at 753 (quoting In re Proposed Xanadu Redevelopment Project, 402 N.J. Super. 607,
642 (App. Div. 2008)).
Amici point out that some of the sixteen staff certifications admit that some groundwater
studies are not 100% complete and that there exists contamination other than just groundwater.
For these reasons, they have sought to intervene in this case in order to conduct supplemental site
investigations and get additional discovery. Whatever their motives, the caselaw makes clear that
when the DEP has performed a rational analysis after reviewing the evidence, such detailed
investigations are not required for this court to approve the Consent Judgment. For example, in
Arizona ex rel. Woods v. Nucor Corp., two public commenters urged the U.S. District Court for
the District of Arizona to reject a settlement because a remedial investigation and feasibility
study (“RI/FS”) had not been formally completed. 825 F. Supp. at 1462. Rejecting this argument,
the court reasoned, “Completion of an RI/FS undoubtedly would reduce the uncertainty
regarding the total clean up cost at the Study Area and possibly reduce uncertainty regarding the
proportional fault of the PRPs. Uncertainty, however, is inevitable even with an RI/FS.” Id. at
1463. Both the Spill Act and CERCLA seek to achieve early settlements in order to expedite
remediation and restoration, and were this court to accept Amici’s argument, it “conceivably
could preclude all agreements, a result contrary to [the Spill Act’s] objective.” See ibid. The DEP
is aware of the contamination, groundwater and otherwise, at the Attachment C Facilities, has
109

Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 52, Ln. 10-14.

36

 applied their technical expertise in a rational fashion, and reached a total damages dollar figure.
The caselaw and practical realities of a limited budget require no more.
Applying these same principles to the DEP’s total damages estimate for the 1768 Retail
Gas Stations, the court reaches the same conclusion. Since 2007, many of these retail stations
have been part of New Jersey Department of Environmental Protection v. Atlantic Richfield Co.
(In re Methyl Tertiary Butyl Ether “MTBE” Products Liability Litigation), the MTBE litigation
in the Southern District of New York.110 To be clear, as with the Attachment C Facilities, the
Proposed Consent Judgment releases Exxon for only non-MTBE NRD at these stations.111 Of
these 1768 retail stations, 716 have had discharges of MTBE and are the subject of the In re
MTBE litigation.
As with the fifteen non-Paulsboro Attachment C Facilities, the DEP has known about
non-MTBE NRD at these stations for years and has consistently concluded that these stations are
not worth litigating.112 During settlement negotiations, however, Commissioner Martin’s staff
reexamined their records to be sure. Specifically, this effort checked which of the remaining
1052 sites have CEAs that “would indicate ground water contamination that requires non-use of
the ground water for potable purposes.”113 This review identified only thirty sites, with plume
sizes ranging “from .02 acres, to just over seven acres.”114 Running these thirty sites through the
six factor algorithm that it used for the Attachment C Facilities,115 the DEP concluded that the
total monetary damages estimate for the Retail Gas Stations was “nominal.”116 Again, the court’s
task is always easier when formal NRDAs have been completed for sites being settled. However,
110

Although the In re MTBE district court initially rejected a settlement between the DEP and Citgo, that settlement
has since been approved.
111
Proposed Consent Judgment, ¶ 9.
112
Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 52, Ln. 10-14.
113
Martin Certification, ¶ 18.
114
Id. at ¶ 19.
115
Id. at ¶ 20.
116
DEP Response to Public Comments, 11.

37

 no court or state requires the completion of a formal NRDA and attachment of a precise dollar
figure to each settlement site. Through the administrative settlement process, the DEP has
developed the CEA threshold system and applied the six damage estimate factors in a reliable
fashion for years now.117 Importantly, although the DEP has not quantified damages with
mathematical exactness for the Attachment C Facilities and Retail Gas Stations, qualitative
methods, such as the CEA threshold analysis and six factored damage estimate analysis suffice.
See Mathes, 2008 U.S. Dist. LEXIS 85590, at *16.
In response to the DEP’s total damages estimates, Amici rely on the aforementioned In re
MTBE and Mathes v. Century Alumina Co. These cases, however, are easily distinguishable
from the DEP’s estimates. The district court initially rejected the In re MTBE settlement between
the DEP and Citgo Petroleum Corporation for a number of reasons. First, the DEP had
formulated a list of 498 sites that contained MTBE above 700 parts per billion. In re MTBE, 33
F. Supp. 3d at 263. The DEP then multiplied 498 by $4,657,608 (the average cost of restoration
at ten DEP selected sites) to reach a portion of their total damages estimate. Ibid. The district
court took issue with this procedure because a review of the 498 sites on the list showed that
seven of the ten DEP selected sites were excluded from the list and it included at least one site
where the DEP’s experts conducted no discovery. Id. at 268. Second, the district court took issue
with the fact that for 4547 other sites, the DEP arbitrarily attributed a $50,000 damages tag to
each of these sites. Ibid. The DEP provided no explanation for how it reached this $50,000
figure. Ibid. In the present case, the DEP has provided a rational explanation for its total damages
estimates, unlike for its In re MTBE estimate.
In Mathes, the district court refused to approve the settlement because the trustee
provided no total damages estimate whatsoever. Mathes, 2008 U.S. Dist. LEXIS 85590, at *12117

Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 53, Ln. 5-25.

38

 13. The court found that it could not determine whether the settlement was substantively fair
because it had no number by which to compare the share being paid by the settling defendant.
This court has the DEP’s total damages estimates for all four of the above-discussed areas: (1)
$8.9 billion for Bayway and Bayonne; (2) between $13.8 million and $15.6 million for
Paulsboro; (3) $4 million for the fifteen other Attachment C Facilities; and (4) nominal for the
Retail Gas Stations.
As a final argument against the substantive fairness of the total damages estimate for the
retail stations, Amici contest that the DEP has not made their files available to the public for
these sites, in contrast to its decision to open up its files for the Attachment C Facilities. There is
a perfectly reasonable explanation for this seeming discrepancy. A number of the retail stations
are part of ongoing In re MTBE litigation. Many of these files contain privileged information and
estimates for these stations, and it makes sense that the DEP would not want to hand over
analyses and strategies that their adversaries could use against them in other lawsuits. See United
States v. BP Exploration & Oil Co., 167 F. Supp. 2d 1045, 1052 (N.D. Ind. 2001) (“The
Government is under ‘no obligation to telegraph its settlement offers, divulge its negotiating
strategy in advance, or surrender the normal prerogatives of strategic flexibility which any
negotiator cherishes.’” (quoting Cannons, 899 F. 2d at 93)).
III.A.2.b. The DEP’s Methods of Calculating an Adequate Settlement Sum
The court finds that the DEP’s methods for calculating the amount to be paid by Exxon
for Bayway/Bayonne, Paulsboro, the fifteen other Attachment C Facilities, and the Retail Gas
Stations are supported by a rational basis and not arbitrary and capricious. See Mathes, 2008
U.S. Dist. LEXIS 85590, at *7 (requiring “‘rational estimates of the harm each party has
caused’” (quoting Tutu Water Wells, 326 F.3d at 207)). During the 2012 negotiations, then
39

 Executive Assistant Attorney General Hoffman established a benchmark for the State’s
settlement demand.118 He did this by analyzing comparable NRD settlements119 and determining
what the State’s average compensation was for an acre of contaminated wetlands.120 In
consultation with the DEP, he determined that the average per-acre recovery was $83,770.121
Had the State recovered this amount per-acre for Bayway/Bayonne, Exxon’s payment for these
sites would have only been approximately $159 million.122
As $220 million of the total $225 million from the Proposed Consent Judgment is for the
Bayway/Bayonne recovery, this means the State beat its historical average by $61 million. For
four reasons, this method was a rational process for determining how much Exxon should pay for
the injuries it has allegedly caused. First, determining a per-acre recovery amount for injured
wetlands falls squarely within the DEP’s technical expertise. Second, the $83,770 figure was
calculated based on past settlements that were determined, either administratively or judicially,
to be fair, reasonable, and in the public interest. This means that both state regulators and jurists
alike considered this per-acre recovery to be substantively fair. Third, all of these prior
settlements were published and put out for public comments. According to General Hoffman,
“Nobody ever contested that they were not fair and reasonable settlements.”123 Finally, three of
the four settlements off which this $83,770 figure is based were conducted jointly with federal
trustees.124 The federal government conducted their own cross-check of these amounts and
determined that they were fair and reasonable. Using this number as a benchmark, and then

118

Id. at Pg. 46, Ln. 5-17.
These were “settlements in which the State both received and could tie a monetary award for both primary and
compensatory restoration to specified acres of contaminated wetlands and in which defendants still had their cleanup
and remedial obligations.” Id. at Pg. 46, Ln. 19-23.
120
Id. at Pg. 47, Ln. 13-18.
121
Hoffman Certification, ¶ 20.
122
Ibid.; Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 56, Ln. 16-23.
123
Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 56, Ln. 24 – Pg. 57, Ln. 1.
124
Hoffman Certification, ¶ 19; Oral Argument Transcript, Hoffman, July 30, 2015, Pg. 57, Ln. 2-7.
119

40

 beating it by almost 40%, is a highly rational method for determining the amount Exxon should
pay for their discharges at Bayway and Bayonne.
The DEP’s method for calculating the amount paid by Exxon for injuries at Paulsboro
also was not arbitrary and capricious. As discussed above in the “Total Damages” Section, the
State settled with two of the three Paulsboro defendants for $1.1 million out of their estimated
$68.1 – $70.8 million in damages. Again, no one contested through the public comments this
roughly 1.6% recovery by the State. When the State reviewed these numbers and settled Exxon’s
$13.4 – $15.6 million total damages share for $1 million, this was a rational decision. There is
nothing substantively improper with the DEP’s decision to use this as a benchmark and then
recover a far larger percentage, on top of Exxon’s Paulsboro remediation obligations.
The DEP’s method of determining the amount paid by Exxon for contamination at the
fifteen other Attachment C Facilities and Retail Gas Stations is also rational. As discussed above,
for these two groups of sites, the DEP analyzed CEAs and the six damage factors. For the fifteen
remaining Attachment C Facilities, the DEP recovery is $2.6 million.125 This 65% recovery of
the $4 million estimate (2.6/4.0) is per se fair and reasonable.
In an effort to draw a parallel to In re MTBE, Amici have attempted to paint the DEP’s
explanation for recovery at these fifteen sites as “inconsistent.” 33 F. Supp. 3d at 268 (rejecting
DEP settlement with Citgo because, inter alia, the DEP’s list of 498 sites contained
inconsistencies). The Environmental Groups assert:
The Department’s defense of the Settlement’s natural resources damage releases
for the other fifteen Attachment C sites is similarly incomplete and selfcontradictory. Although the Department ascribes a value to these sites, the sum
varies from document to document. Commissioner Martin says he valued them at
$2.6 million. Supra Pt. III.A. (citing Martin Cert. ¶¶ 24, 32-33). In its public-

125

Martin Certification, ¶ 33.

41

 comment response, the Department says it valued them at about $4 million.
Comment Response 14.126
This contention results from their misreading and misunderstanding of Commissioner Martin’s
Certification and the DEP Response to Public Comments. In the Public Comment Response, the
DEP states, “Based on the information in DEP’s site remediation files, the total value of NRD for
the 15 sites other than Paulsboro was estimated to be approximately $4 million.”127 In his
certification, Commissioner Martin states, “I allocated $2.6 million of the total settlement to the
Appendix C portion of the settlement.”128 The two numbers, 2.6 million and $4 million, are not
inconsistent, but rather refer to different things.
Like the Attachment C Facilities, the DEP has no current plans, had no past plans, and
has no future plans to bring NRD suits for the Retail Gas Stations. The costs of bringing these
suits and performing NRDAs outweighs any potential recovery at these sites.129 Therefore, the
fact that the DEP is recovering anything, let alone $1.4 million130 for non-MTBE NRD at these
sites, is per se fair and reasonable and results in an unexpected recovery for the People of New
Jersey.
III.A.2.c. The DEP’s Decisions Not to Bring Suits for the
Attachment C Facilities and Retail Gas Stations
The Legislature has vested the DEP with broad discretion to bring and settle NRD suits.
Implicit in this power is the ability to decide when it is not proper to bring a lawsuit. In everyday
life, people make cost/benefit decisions that lawsuits are an inefficient waste of time and
resources compared to the potential recovery they would bring. The same is true for the DEP.
126

Environmental Groups’ Brief, 19.
DEP Response to Public Comments, 14 (emphasis added).
128
Martin Certification, ¶ 33 (emphasis added).
129
See id. at ¶ 13.
130
Id. at ¶ 22.
127

42

 To this point, the court has belabored this reality with citations to caselaw that make clear
the fact that trustees can settle suits with far less than a full damages picture. Routinely, district
courts reject objectors’ calls for full evidentiary hearings. Rohm & Haas, 721 F. Supp. at 686-87
(citing Acushnet River, 712 F. Supp. at 1031 n.21; United States v. Laskin, 1989 U.S. Dist.
LEXIS 4900, at *30 (N.D. Ohio Feb. 27, 1989); Exxon, 697 F. Supp. at 691; Kelley, 717 F.
Supp. at 507). The DEP has demonstrated that the fifteen Attachment C Facilities and Retail Gas
Stations have nominal potential NRD claims. They have applied reasoned, if imprecise, methods
to determine these sites’ values. For two additional reasons, their decisions not to bring these
suits is rational.
First, Exxon and the State have differing views on the statute of limitations’ application
to these sites. Exxon contends that the statute has run, but the State contends that the statute does
not run until remediation is completed at the sites. Litigation over the proper application of the
statute would only add to the time and expense of these suits and would further dilute any
potential recovery.
Second, 716 of the 1768 Retail Gas Stations have discharges of MTBE at the sites and
are part of the Southern District of New York litigation. This means that if the DEP did not
include non-MTBE NRD claims in that suit, they would most likely be estopped from doing so
in the future under the “entire controversy doctrine.” McNeil v. Legislative Apportionment
Comm’n, 177 N.J. 364, 395 (2003). This concern, together with the potential statute of
limitations issue, makes it all the more clear that any recovery on non-MTBE claims is an
unexpected gain. With these potential claims now settled, the DEP has extra time and resources
to pursue the In re MTBE claims and other MTBE claims at the Attachment C Facilities, claims
the DEP believes are substantial.

43

 Contrary to Amici’s wishes, the court will not penalize the DEP for properly exercising
its discretion, especially when both the Appellate Division and Supreme Court have recognized
that the DEP must perform this task “‘in the context of complex environmental cleanups and a
finite source of cleanup funds.’” Exxon I, 393 N.J. Super. at 400 (quoting Marsh v. N.J. Dep’t of
Envtl. Prot., 152 N.J. 137, 144 (1997)). At the conclusion of the Bayway/Bayonne Trial, the
State submitted costs of $1,199,537.23 for expert witnesses.131 These costs are included in its
outside counsel’s fee and cost application of $50,096,966.34 million. By any standard, these are
large amounts of money. The State has substantial expertise in environmental cost/benefit
analysis and has weighed the prospect of such future costs against the benefits of litigating these
minor cases. Because they have done this analysis, the court will not make them litigate to attain
such Pyrrhic victories when settlement is a less costly and more effective option. See Exxon, 697
F. Supp. at 693 (“Nonetheless, the settling companies are willing to settle because of the inherent
risks of continued litigation, and because a ‘victory’ after protracted litigation may prove to be
more expensive than settlement.”); Plutarch, Pyrrhus, in THE LIVES OF THE NOBLE GRECIANS
AND ROMANS

483 (John Dryden trans., The Modern Library rev. ed. 1864) (c. 120 A.D.) (“The

armies separated; and it is said, Pyrrhus replied to one that gave him joy of his victory that one
other such would utterly undo him.”).
* * *
In conclusion, the court finds that the Proposed Consent Judgment is substantively fair.
The following DEP estimates and decisions all pass the arbitrary and capricious standard used to
review agency action: (1) the estimate of total damages for Bayway and Bayonne, the
Attachment C Facilities, and the Retail Gas Stations; (2) the calculation of adequacy of the

131

PEX 1625, 1662-63.

44

 amount paid by Exxon for each of these three areas; and (3) the DEP’s decision not to file NRD
suits for fifteen of the Attachment C Facilities and the Retail Gas Stations.
It bears noting that if the substantive fairness prong did not seem like a difficult hurdle
for the Proposed Consent Judgment to jump, this is due to the nature of this settlement.
Practically every CERCLA settlement opinion this court has reviewed, whether by a district or
circuit court, discussed fairness in the context of a multi-defendant lawsuit. Those courts were
mainly concerned with fairness vis-à-vis settling and non-settling defendants or with fairness
between non-settlers and the trustee. The typical settlement dispute involves a non-settling
defendant objecting to the trustee’s liability allocation system or method of calculating total
damages and arguing that it in some way prejudices them. But see generally Acushnet River, 712
F. Supp. 1019 (discussing both non-settler and intervening interest group objections).
Because Exxon and the State voluntarily entered into the Proposed Consent Judgment
after highly contested negotiations and now simultaneously urge this court to approve it, there is
less of a reason for this court to police substantive fairness. Charles George, 34 F.3d at 1088
(“There is little need for a court to police the substantive fairness of a settlement as among
settling parties of a particular class. Sophisticated actors know how to protect their own interests,
and they are well equipped to evaluate risks and rewards.”). The public’s interest in this suit and
their concern over the perceived inadequacy of the recovery amount, however, begin to come
into sharper focus in the next section. There, the reasonableness inquiry shifts the court’s
attention from fairness among the parties to whether the Consent Judgment adequately
compensates the public for harm to its natural resources.

45

 III.B. Reasonableness
There are three facets to a consent decree’s reasonableness. First, the “decree’s likely
efficaciousness as a vehicle for cleansing the environment is of cardinal importance.” Cannons,
899 F.2d at 89 (citing Cannons, 720 F. Supp. at 1038; Conservation Chem., 628 F. Supp. at 402;
United States v. Seymour Recycling Corp., 554 F. Supp. 1334, 1339 (S.D. Ind. 1982)). The
second facet “will depend upon whether the settlement satisfactorily compensates the public for
the actual (and anticipated) costs of remedial and response measures.” Id. at 90. The third factor
concerns the relative strength of the parties’ litigating positions and litigation risks. Ibid. Bearing
this third facet in mind, in conjunction with the fairness and fidelity to the statute prongs, the
proper way to gauge the adequacy of the settlement is “to compare the proportion of total
projected costs to be paid by the settlors, with the proportion of liability attributable to them, and
then to factor into the equation any reasonable discounts for litigation risks, time savings, and the
like that maybe justified.” Charles George, 34 F.3d at 1087.
As the Bayway/Bayonne Litigation was a natural resource damages case, the first factor
might not seem that relevant to the court’s review of the Consent Judgment. This is because the
first factor is “basically a question of technical adequacy, primarily concerned with the probable
effectiveness of proposed remedial responses.” Cannons, 899 F.2d at 89-90 (emphasis added).
However, the Consent Judgment importantly reaffirms Exxon’s remedial obligations at not only
Bayway and Bayonne, but also for the Attachment C Facilities and Retail Gas Stations.132 In the
Public Comments, there has been, unfortunately, a lack of understanding over the potential
significance of this provision.

132

Proposed Consent Judgment, ¶ 15.

46

 One of Exxon’s trial arguments was that if the court awarded primary restoration
damages, this should release Exxon from their ACO remediation obligations. The distinction
between the two types of cleanups is key. “[R]emediation involves the cleanup of contaminants
to ‘risk-based’ levels, whereas ‘[primary] restoration’ and ‘replacement’ requires return of the
natural resource to its pre-discharge condition . . . .” Exxon I, 393 N.J. Super. at 393. Primary
restoration, therefore, is more all-encompassing than remediation because if a natural resource is
returned to its pre-discharge condition, it is in a better state than if it had only been cleaned up to
risk-based levels.
Exxon’s argument, then, boils down to the fact that plaintiffs are not allowed a double
recovery, and an award of primary restoration that maintains a defendant’s remediation
obligations could arguably be viewed as a double recovery. The court, in this decision, does not
pass judgment on the merits of this argument. For present purposes, however, the fact that Exxon
is paying compensatory NRD on top of the Consent Judgment’s reaffirmation of their
remediation obligations means that the Consent Judgment is technically adequate for cleaning up
the environment.
Furthermore, the Consent Judgment is an appropriate vehicle for cleansing the
environment because it places “the risks of future uncertainties upon [Exxon] rather than the
government[].” Kramer, 19 F. Supp. 2d at 288-89. Paragraph Sixteen of the Consent Judgment
states:
The [State] shall retain full authority and sole discretion to require ExxonMobil to
take any action, or arrange for action to be taken, to address an immediate
environmental concern, an imminent and substantial endangerment to public
health, welfare or the environment, or an emergency response arising from or
related to the Bayonne Facility, the Bayway Facility, any of the ExxonMobil
Retail Stations, and any of the sites listed in Attachment C.133
133

Id. at ¶ 16.

47

 The U.S. District Court for the District of New Jersey has found a similar provision to be
reasonable. Id. at 289. The first reasonableness factor, therefore, weighs in favor of approving
the Consent Judgment.
The Consent Judgment also adequately compensates the public for injuries to natural
resources. Adequacy of recovery is not “merely a function of how close a settlement comes to
meeting an estimate of projected costs.” Charles George, 34 F.3d at 1085. Were this the standard,
many NRD settlements could not be considered reasonable due to the fact “that defendants will
generally settle for substantially less -- indeed, often for far less given the inherent problems of
proof in these cases -- than the asserted damages.” See Acushnet River, 712 F. Supp. at 1032.
Rather reasonableness is a pragmatic concept that “requires common sense, practical wisdom,
and a dispassionate assessment of the attendant circumstances.” Ibid. Although much of the
analysis for this second factor overlaps with the litigation risks factor, there are a few distinct
points. Amici and the Public Commenters have continually argued that the State’s $225 million
recovery cannot be reasonable in light of the Stratus Report’s $8.9 billion damages estimate. It is
true that Judge Anzaldi found Exxon to be strictly liable and that Exxon did not file an
interlocutory appeal challenging this ruling. Exxon I, 393 N.J. Super. at 397-98. For two reasons,
however, this finding of liability, together with the Stratus estimate, did not guarantee that the
State was going to recover $8.9 billion at trial.
First, because Exxon reserved their right of appeal on the liability issue, they would have
had the right to appeal the ruling to the Appellate Division and Supreme Court. This legal ruling
would have been reviewed de novo, and if reversed, would have left the State with a $0 recovery.
Second, assuming Exxon is in fact liable, they are only liable for those damages which the State
can prove at trial. For any number of reasons, discussed more fully below, had the State not met

48

 the preponderance of evidence hurdle for certain areas of allegedly damaged habitats, it could
not have recovered damages for those areas. Although the Consent Judgment’s perceived deep
discount is only reasonable if justified by litigation risks, courts have held that the public can be
adequately compensated when a trustee “only receives a portion of the remediation cost from a
party previously adjudicated liable for the entire cost.” Davis, 261 F.3d at 25-26 (citing United
States v. Davis, 11 F. Supp. 2d 183, 192 (D.R.I. 1998)) (agreeing with district court).
The fact that the recovery amount far outpaces the State’s previous wetlands settlement
recoveries134 shows that the amount adequately compensates the public. Bearing in mind that the
DEP is accorded deference on this determination, id. at 21, the fact that in the past, both federal
trustees and other trial court judges have considered lower per-acre recovery sums to be
reasonable, underscores the reasonableness of the DEP’s near 40% improvement over their
historical average. Moreover, this recovery is adequate considering the litigation risks and real
possibility that the State could have walked away from litigation with far less money, or none
whatsoever.
Litigation risks can be broken down into trial risks and appellate risks. Trial risks
encompass the possibility that this court would have accepted some or all of Exxon’s legal
contentions and found that the State did not meet their burden of proving injuries to natural
resources or loss of natural resource services. Appellate risks encompass the appeals Exxon has
made clear they would take from Judge Anzaldi’s pre-trial rulings, this court’s legal rulings and
findings of fact made at trial, and Exxon I and Exxon II. Due to the method the State employed
to calculate damages at Bayway and Bayonne, the court is in a unique position to weigh these
risks in that it has the ability to estimate, in dollar amounts, the effect that various adverse rulings
might have on the State’s potential recovery.
134

See supra Section III.A.2.b.

49

 As discussed above, the State, through Dr. Lipton and Stratus Consulting, used a HEA to
quantify injuries at Bayway and Bayonne. Both trial and appellate risks have a direct impact on
the acceptability of the inputs to the HEA formula. At trial, over Exxon’s objection, the court
accepted as demonstratives two active Excel spreadsheets that Dr. Lipton created.135 Although
the State maintained that they proved all $8.9 billion in total damages, the purpose behind
providing these demonstratives was to allow the court to reliably adjust downward the damages
award if, for example, it determined that the State did not prove all of their damages. The result
of this is that although Public Commenters and Amici can downplay how risks would affect the
State’s recovery in theory, the court can actually consider in dollar amounts how adverse rulings
would negatively impact the State’s recovery.136 The court finds that although a “reasonableness
inquiry, like that of fairness, is a pragmatic one, not requiring precise calculations,” United States
v. Charter Int’l Oil Co., 83 F.3d 510, 521 (1st Cir. 1996) (emphasis added) (citing Charles
George, 34 F.3d at 1085), nothing in the caselaw prohibits such calculations and estimates,
especially when they would help the reader understand the court’s decision.
Although not calculated by the HEA, which calculates compensatory damages, the State
also sought a $2.5 billion award for on-site primary restoration. Under N.J.S.A. 58:1023.11u.b(4), the State has the burden of demonstrating, by a preponderance of the evidence, that
any restoration plan is “practicable.” This does not present much of a hurdle for compensatory
restoration plans because the State can select sites that will easily accommodate restoration. The
State, however, must take sites as it finds them when seeking to conduct primary restoration.
This means that if certain site-specific realities make primary restoration non-practicable, the

135

These active spreadsheets were based on the State’s static spreadsheets in evidence.
Whether the court would have accepted the HEA methodology itself, not just its inputs, is also a risk. At trial,
HEA’s reliability was a question of first impression for New Jersey courts.
136

50

 State may not conduct primary restoration. If this is the case, courts in turn cannot award primary
restoration damages.
In an effort to show that their primary restoration plan for Bayway and Bayonne was
practicable, the State sought to introduce the expert engineering testimony of Randy Horsak and
Ronald Ostermiller. For several days during trial, Exxon challenged these witnesses on crossexamination with numerous potential difficulties the State would encounter or failed to consider
when seeking to restore natural resources at the Bayway and Bayonne sites. These realities
included, but were not limited to, the estimated length of time to complete the work, the cost of
the plan, the plan’s highly conceptual nature, the fact that the plan would need approval and be
monitored by many regulatory authorities, which the State had not considered, and the fact that
Exxon no longer owns the sites. Exxon also countered with the expert testimony of Dr. John
Rodgers and other fact witnesses.
Again, it bears noting that the court never admitted Horsak’s, Ostermiller’s, or Rodgers’
testimony into evidence. They all testified conditionally while the opposing sides’ 104 Motions
were pending. In this opinion, the court does not pass judgment on their testimony or on the
practicability of the State’s primary restoration plan. However, if the court had found that the
State did not meet its burden of proving practicability, the State would have recovered $0 for
primary restoration damages, and its total potential recovery would have been reduced to $6.4
billion, a reduction of over 28%.
The next significant litigation risk concerns whether the Spill Act’s NRD provision
applies retroactively. In 2009, Judge Anzaldi held that the State could seek restoration damages
for pre-1977 injuries, the year the Spill Act came into effect. Retroactivity Ruling, letter op. at 5.
He based his ruling off New Jersey Department of Environmental Protection v. Ventron Corp.,

51

 94 N.J. 473 (1983), in which the Supreme Court held that the Spill Act’s remediation provision
applies retroactively. This Retroactivity Ruling was the law-of-the-case, and had this matter
concluded with the issuance of this court’s opinion, this court would have felt obligated to follow
it. The restoration damages retroactivity risk, however, is actually a dual trial and appellate risk,
as well as a question of first impression under the Spill Act.
Although the court would have applied the Spill Act’s NRD provision retroactively, it
still had to interpret Judge Anzaldi’s ruling to determine what “retroactivity” meant. In the
normal sense, retroactive damages mean the defendant is liable for not only pre-Act damages,
but also that they must pay money to compensate the State for the pre-Act years that the natural
resource was injured. On the other hand, the court could have construed the Spill Act’s NRD
provision to reflect CERCLA’s provision. Under CERCLA, “There shall be no [NRD] recovery .
. . where such damages and the release of a hazardous substance from which such damages
resulted have occurred wholly before the enactment of this Act [enacted Dec. 11, 1980].” 42
U.S.C. § 9607(f)(1). Courts have interpreted this provision to mean that if damages occur before
1980, and the natural resources remain damaged after 1980, then trustees can only recover a
monetary award from 1980 onwards. Either way this court ruled, its interpretation would have
been reviewed on appeal, as well as Judge Anzaldi’s Retroactivity Ruling. If these rulings were
reversed, because most of the alleged injuries occurred before the Spill Act came into effect –
some of which even allegedly occurred over a hundred years ago – the State’s recovery would be
nominal, if anything at all.
If the Spill Act’s NRD provision was determined to be retroactive only to 1977, the year
it came into effect, because one of the key HEA inputs was the “year damages begin to accrue,”
the effect on the State’s potential recovery would be significant. Entering “1977” as the input

52

 into the Bayway and Bayonne HEA demonstratives and assuming no primary restoration, the
maximum recovery for the State shrinks to $1.269 billion, a reduction of over 85% based on only
two litigation risks.
The retroactivity risk does not end there, because even if this court interpreted Judge
Anzaldi’s Retroactivity Ruling to mean full retroactivity, it still would have been obligated to
perform “as-applied” Takings and Substantive Due Process analyses under the Fifth and
Fourteenth Amendments to the U.S. Constitution. Even if the court, the Appellate Division, and
the New Jersey Supreme Court found that retroactive application of the Spill Act’s NRD
provision did not violate Exxon’s Fifth and/or Fourteenth Amendment rights, Exxon could
appeal such rulings to the United States Supreme Court.
Under that Court’s Fifth Amendment takings test, which has been incorporated against
the states through the Fourteenth Amendment, if any of these four courts found that the
economic impact of its award impermissibly interfered with Exxon’s reasonable investmentbacked expectations, such an award would constitute an impermissible taking without just
compensation. Connolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 225 (1986). In fact,
applying this test, a plurality of the Court has found that the retroactive application of the Coal
Industry Retiree Health Benefit Act of 1992 (“Coal Act”) constitutes a taking when it seeks to
hold corporations liable for acts that occurred only thirty years before its passage. E. Enters. v.
Apfel, 524 U.S. 498, 538 (1998) (plurality opinion). In the instant case, the State was looking for
damages back to 1877, a hundred years before the Spill Act came into effect.
Eastern Enterprises only commanded a plurality of the Court, but Justice Kennedy’s
concurrence raised the specter of substantive due process invalidation of retroactive laws.
Although he sharply criticized the plurality for their takings analysis, Justice Kennedy agreed

53

 with their ultimate conclusion: the Coal Act could not compel Eastern Enterprises to make health
care payments for actions that occurred thirty years before the Act’s enactment. E. Enters., 524
U.S. at 539 (Kennedy, J., concurring in the judgment and dissenting in part). Importantly, he
noted that the retroactive application of laws has been disfavored since before the founding of
this country. Id. at 547.
Finally, assuming the State proved damages back to 1877, the Spill Act’s retroactive
application to the Bayway and Bayonne sites could still have been invalidated under New Jersey
courts’ “manifest injustice test.” Nobrega v. Edison Glen Assocs., 167 N.J. 520, 537, 545 (2001)
(discussing this country’s “long-standing belief” that retroactive laws are unjust and how the
manifest injustice standard is broader than that afforded by the Constitution). If a court found
either a takings, substantive due process, or manifest injustice violation, again, the State’s
maximum compensatory damages recovery would be reduced to $1.269 billion.
The next risk concerns the Spill Act’s interplay with the Public Trust Doctrine. The Spill
Act allows the State to seek recovery for injuries to natural resources, which it defines as “all
land, fish, shellfish, wildlife, biota, air, waters and other such resources owned, managed, held in
trust or otherwise controlled by the State.” N.J.S.A. 58:10-23.11b (emphasis added). Because the
entirety of Bayway and Bayonne is privately owned property, Exxon contends that the sites
cannot be considered land that is owned, managed, or otherwise controlled by the State.
Although they do not dispute that the State holds all surface water and groundwater in trust, they
argue that courts’ historical application of the Public Trust Doctrine negates the possibility that
the State can recover damages for injuries to most of the upland soils and sediments at the sites.
The New Jersey Supreme Court has defined the public trust as being “the land flowed by the
tidal waters, which extend to the mean high water mark.” Matthews v. Bay Head Improvement

54

 Ass’n, 95 N.J. 306, 312 (1984) (emphasis added). Because most of the land at Bayway and
Bayonne is inland of the mean high water mark, Exxon contends that these lands are not natural
resources, as defined under the Spill Act, for which the State can recover damages. Rejecting this
assertion, Judge Anzaldi held that “any lands which are contaminated as a result of actions by
Exxon or its predecessors could be subject to damages under the Spill Act.” Public Trust Ruling,
letter op. at 4 (emphasis added).
Judge Anzaldi’s ruling would have constituted law-of-the-case, and this court would have
applied it when formulating its opinion. As with the Retroactivity Ruling, and this court’s
interpretation of that ruling, the Appellate Division and Supreme Court would have reviewed this
ruling de novo. Exxon contends, and the court agrees, that if either of these courts reversed, the
maximum number of acres for which the State could seek damages, those lands flowed by the
mean high water mark, would be approximately 150 to 200 acres of intertidal habitat.137 Under a
200-acre scenario, assuming no primary restoration and a 1977 start date, the State’s maximum
potential recovery would have been reduced to approximately $300 million.
Even if the Appellate Division and Supreme Court upheld the Public Trust Ruling and
allowed for full retroactivity, the Uplands Meadow Cost Estimation Risk could have reduced the
State’s total potential recovery by $308,000,000. In order to establish the restoration cost per an
acre of uplands meadow, the State retained Robert Williams. Although Exxon did not challenge
his forestry and forest reforestation credentials, they contended that Williams lacks the requisite
expertise in estimating the cost of forest restoration.138 If the court granted Exxon’s Williams 104
Motion and barred his testimony, even assuming the State demonstrated that Exxon injured all
acres of uplands meadow for which the State was seeking damages, Dr. Lipton’s HEA would not

137
138

Exxon’s Brief, 44.
Trial Transcript, Williams, Apr. 16, 2014, Pg. 47, Ln. 8-13.

55

 have had the necessary per-acre uplands meadow restoration cost input, which Williams
estimated at $90,000. Therefore, the court would have been compelled to award $0 for uplands
meadow injuries.
The one pre-trial ruling that Judge Anzaldi issued in Exxon’s favor, his Physical
Modification Ruling, was potentially the most significant trial risk for the State. That is because
even if all of the above-mentioned risks were resolved in the State’s favor, the Physical
Modification Risk had the potential to render these victories moot. Although the previously
discussed risks were all purely legal issues, this risk involved the overlooked fact that the State
still would have had to prove damages at trial.
Under the Spill Act, the State can recover for natural resources that were “damaged or
destroyed by a discharge” of a hazardous substance. N.J.S.A. 58:10-23.11u.b(4). A “discharge”
is defined as:
[A]ny intentional or unintentional action or omission resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying or dumping of hazardous
substances into the waters or onto the lands of the State, or into waters outside the
jurisdiction of the State when damage may result to the lands, waters or natural
resources within the jurisdiction of the State.
N.J.S.A. 58:10-23.11b. Because the State must prove by a preponderance of the evidence that a
discharge of a hazardous substance injured a natural resource or impaired a natural resource
service, see N.J.A.C. 7:26E-1.8 (defining “injury” under the Spill Act’s regulations as “any
adverse change or impact of a discharge on a natural resource or impairment of a natural
resource service”), the State cannot recover damages under the Spill Act if something other than
a discharge of a hazardous substance injures a resource or its services. For this reason, in his
Physical Modification Ruling, Judge Anzaldi dismissed “the DEP’s claims, under the Spill Act
and the common law, for damages for injuries to natural resources of the State on the Bayway

56

 and Bayonne sites that are the result of physical modifications to the Bayway and Bayonne
sites.” Physical Modification Ruling, at ¶ 1.
Due to this ruling, this court’s post-trial task interpreting Judge Anzaldi’s ruling was to
be a highly fact-intensive consideration. According to Exxon, the evidence showed that many
wetlands, meadows, and forests were lawfully cleared and/or filled, as authorized by the New
Jersey Riparian Commission and Riparian Grants, before they began lawfully building refinery
infrastructure. Therefore, if any hazardous substances were discharged, it was argued that this
could not have occurred until after the natural resources were lawfully altered from their natural
state. Exxon did not dispute that they were liable for remediation, if, for example, oil spilled onto
a parking lot, but the gist of their argument is that a defendant cannot be liable for natural
resource damages if a discharge does not adversely affect the pre-discharge resource. The State’s
view of the evidence was that it demonstrated the wetlands were filled with contaminated fill and
that this action constituted a “discharge” under the Spill Act. Therefore, the natural resources
were injured prior to the commencement of refinery operations. Without passing judgment on the
parties’ contrasting views, the court finds that this issue, no matter how the court interpreted the
Physical Modification Ruling, presented a substantial litigation risk for both the State and Exxon.
Furthermore, the court also had to construe the Physical Modification Ruling and identify
modifications to which it applied. The transcript of Judge Anzaldi’s Physical Modification
Ruling shows that Judge Anzaldi viewed his ruling as a “generic ruling,” because, as the
evidence had not been established at the time, neither party was able to point to specific
structures to which it was to apply.139 This court could have interpreted it broadly, to dismiss
damages for every type of modification, even those that occurred for the purpose of receiving

139

Motion Transcript, Anzaldi, J., June 1, 2009, Pg. 19, Ln. 6 – Pg. 21, Ln. 19.

57

 hazardous substances. Or, it could have interpreted it narrowly, to dismiss damages for only
typical modifications, such as cutting down trees, paving roads, or constructing buildings.
Even if the court interpreted this ruling narrowly, and all the other issues were resolved in
the State’s favor, the State still would not have been out of the woods. As the court mentioned
above, the regulations implementing the Spill Act, the Technical Requirements for Site
Remediation (“Technical Regulations”), N.J.A.C. 7:26E-1.1 to -5.8,140 define injury as “any
adverse change or impact of a discharge on a natural resource or impairment of a natural
resource service, whether direct or indirect, long term or short term, and that includes the partial
or complete destruction or loss of the natural resource or any of its value.” N.J.A.C. 7:26E-1.8.
For the purposes of the Bayway/Bayonne Litigation, the DEP took the position that the mere
presence of contamination not only automatically equaled an “injury,” but that it equaled a 100%
injury. Although the court does not pass judgment on the DEP’s interpretation of this regulation,
two specific phrases in its language present additional litigation risks.
The first is the regulation’s use of the phrase “adverse change or impact.” N.J.A.C.
7:26E-1.8 (emphasis added). According to Mr. Sacco, the “[p]resence of contamination is an
adverse change.”141 Exxon contested that one cannot assume that the presence of contamination
equals an adverse change or impact and that the proper method is to measure the effect
contamination has on a natural resource or its service. In fact, even Dr. Lipton was not convinced
of Sacco’s certitude and referenced the ancient expression of Paracelsus, the father of toxicology,
that “the dose makes the poison.”142
The second phrase is the regulation’s acknowledgement that injuries include “the partial
or complete destruction or loss of the natural resource or any of its value.” N.J.A.C. 7:26E-1.8
140

Adopted in 1993, the Technical Regulations were amended in 1997 to include natural resource damages.
Trial Transcript, Sacco, May 1, 2014, Pg. 84, Ln 19.
142
Trial Transcript, Lipton, Mar. 31, 2014, Pg. 141, Ln. 11-14.
141

58

 (emphasis added). By its plain language, the regulation therefore appears to contemplate losses
of natural resources or their services that can be less than 100%. If this is the case, then it
presents a litigation risk for the State because, as they admitted, their experts did not measure the
losses of natural resources or their services.143 If the court’s review of the trial evidence showed
that certain partially injured resources were still providing services, then this too would have
reduced the State’s damages award.
Even if this court, or any appellate court, found in the State’s favor on all of these risks,
disputes over two final HEA inputs could have significantly reduced the State’s damages award.
First, assuming the court accepted any estimate concerning the amount of money it would take to
restore one acre of 100% injured intertidal wetland, it could have accepted Dr. Lipton’s estimate
($274,000), Dr. Rodgers’ estimate ($50,000), or some number in-between. If the court found
Lipton’s estimate unreliable and accepted Rodgers’ estimate, assuming all other risks were
resolved in the State’s favor, this would have reduced the State’s compensatory damages
recovery by billions of dollars. Assuming the court accepted Rodgers’ estimate and used 1977 as
the start date, this would have reduced the State’s compensatory damages recovery to $707
million.
The remaining input risk concerns the appropriate HEA discount rate. The State, through
Dr. Lipton, contended that practically all trustees, state or federal, and all scholars accept a 3%
rate. Exxon countered with the assertion that although this may be true, none of these trustees or
scholars have ever attempted to set a discount rate that dates back as far as 1877. They further
asserted that a 3% rate can only be reliably used from the late-1970s onward. The court will not
delve into the merits of this dispute, but it notes, for example, that had it found the appropriate

143

Id. at Pg. 130, Ln. 6-15.

59

 discount rate to be 2%, this would have substantially reduced the State’s best case compensatory
recovery.
Discussed above are some of the most obvious risks the State faced if it did not settle.
There are many more, including (1) whether “habitat” is a natural resource under the Spill Act;
(2) the appropriate NRDA baseline; (3) the parties’ “two foot sampling” dispute; (4) Exxon’s
argument that an award of primary restoration should obviate their ACO remediation obligations;
(5) Exxon’s “Act of War” affirmative defense; (6) whether Exxon was entitled to a credit for
alleged benefits that the Bayway/Bayonne Facilities provided to New Jersey; (7) Exxon’s
equitable estoppel defense; (8) the merits of Dr. Desvousges’ HEA that calculated damages at
$1.4 to $3 million; and (9) Exxon’s promised appeals of Exxon I and Exxon II. The litigation
risk point can, and has been made, without the court reliving the seven months from September
2014 to March 2015 when it was formulating its trial opinion. See Rohm & Haas, 721 F. Supp. at
685-86 (“Ours is not, at this stage, a factfinding [sic] mission. It is rather an assignment to
ensure that this is a reasonable compromise of this litigation. . . . [I]t must merely be reasonable
when measured by the range of plausible interpretations of that record.”). Whether by one large
risk breaking against the State, or numerous small risks joining forces, the potential existed for
the State to walk away from eleven years of litigation with little or nothing to show for it. As a
final reminder, most of what the experts on both sides testified to was subject to exclusion in the
104 Motions. All experts, save Dr. Morrison, testified conditionally while 104 Motions were
pending.144 Had the court granted just Exxon’s Lipton 104 Motion, the State could not have met
its burden of proof and would have recovered $0.145

144

During oral argument, Amici admitted that they have not read either parties’ 104 motions. Oral Argument
Transcript, Kyle, July 30, 2015 Pg. 137, Ln. 24 – Pg. 138, Ln. 12.
145
In its merits opinion, the court would have disposed of all trial risks discussed in this section. In this settlement
opinion, the court does not pass judgment on any trial or appellate risks.

60

 Amici contend that because the State has not specifically explained what litigation risks
drove them to settle, the Proposed Consent Judgment is not reasonable. The court is aware of no
jurisdiction, state or federal, that requires trustees to point out their weaknesses, thereby exposing
their vulnerabilities to future polluters. Reasonableness is judged on objective terms and does not
rise and fall on a trustee’s subjective fears. The court presided over this trial and understands the
legal and factual risks the State and Exxon faced in the Bayway/Bayonne Litigation. In light of
these risks, the Proposed Consent Judgment is an accurate reflection of the strength of the DEP’s
case. See id. at 687 (discussing reasonableness factors). In fact, many of these legal and factual
risks also apply to potential NRD suits at the Attachment C Facilities and Retail Gas Stations.
For these reasons, the court finds that the Proposed Consent Judgment is reasonable.
III.C. Faithfulness to the Spill Act’s Objectives
Consideration of whether the Proposed Consent Judgment is consistent with the Spill
Act’s objectives necessarily “involves matters implicating fairness and reasonableness. The three
broad approval criteria were not meant to be mutually exclusive and cannot be viewed in
majestic isolation.” Cannons, 899 F.2d at 90. “[I]n attempting to gauge a consent decree’s
consistency with the statute, courts must give wide berth to the agency’s choice[s] . . . .”
Cannons, 899 F.2d at 91 (finding that the EPA’s choice of eligibility criteria for de minimis
settlers “fell well within the ambit of Executive discretion”). After reviewing the Spill Act and
caselaw interpreting its provisions, the court finds that the Legislature had three broad goals in
mind when it passed the Act: (1) assure the prompt, effective cleanup of hazardous substances;
(2) place the financial burden of cleanup on polluters; and (3) encourage early settlements.
In the Act’s preamble, the Legislature declared the State’s policy “to control the transfer
and storage of hazardous substances and to provide liability for damage sustained with this State
61

 as a result of any discharge of said substances, by requiring the prompt containment and removal
of such substances . . . .” N.J.S.A. 58:10-23.11a. Interpreting the Spill Act, the Supreme Court
has enunciated a “polluter pays” principle. See Ventron, 94 N.J. at 499 (“On the balance, the
benefits accorded to the public by the statute outweigh any burden imposed on the polluters.”).
Likewise, the purpose of the Act’s 1991 amendments was to encourage early settlement by
granting contribution protection to any defendant who “has entered into an administrative or
judicially approved settlement with the State . . . .” See N.J.S.A. 58:10-23.11f. Such early
settlements are beneficial because they preserve public finances, “enabling the funds to be used
at other sites.” Kramer, 19 F. Supp. 2d at 289 (citing 131 Cong. Rec. H11,070 (Dec. 5, 1985)
(statement of Rep. Florio); N.J.S.A. 58:10-23.11r). In fact, these are the same three goals that
Congress intended to achieve through CERCLA.
First, CERCLA seeks to ensure the prompt, effective cleanup of hazardous wastes. Akzo,
949 F.2d at 1439 (citing Walls v. Waste Res. Corp., 823 F.2d 977, 978-79 (6th Cir. 1987));
Cannons, 899 F.2d at 90 (quoting Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d
1074, 1081 (1st Cir. 1986)). Second, Congress intended to place “the financial burden of the
cleanup on the PRPs.” Akzo, 949 F.2d at 1439 (citing Walls, 823 F.2d at 978-79); see also
Cannons, 899 F.2d at 91 (quoting Dedham, 805 F.2d at 1081). Third, by providing broad
contribution protection to early settlers, Congress sought to encourage early settlements. Davis,
261 F.3d at 27 (citing 42 U.S.C. § 9613(f)(2); Charter, 83 F.3d at 522; UTC v. Browning-Ferris
Ind., Inc., 33 F.3d 96, 103 (1st Cir. 1994)). Because the Proposed Consent Judgment furthers
these three goals, it passes the third review standard prong.
First, the Consent Judgment ensures the prompt cleanup of hazardous substances. As
previously discussed, it reaffirms Exxon’s remediation obligations at Bayway, Bayonne,

62

 Paulsboro, the other fifteen Attachment C Facilities, and the Retail Gas Stations. At Bayway and
Bayonne alone, Exxon has already spent over $257,000,000 remediating these sites, and it is
expected that their future expenditures will also be in the hundreds-of-millions range.146 Amici,
however, have raised one troubling aspect of the Consent Judgment that requires discussion.
By its terms, the Consent Judgment does not actually require the State to spend the entire
$225 million on the restoration and replacement of injured natural resources. According to
Amici, if the money recovered is not going to be spent on environmental purposes, the Consent
Judgment cannot further the Spill Act’s intent. This issue arises due to a recently enacted budget
provision that states:
Except as otherwise provided in this act and notwithstanding the provisions of any
other law or regulation to the contrary, the first $50,000,000 [and one-half of any
additional amounts] in natural resource, cost recoveries and other associated
damages recovered by the State, along with such additional amounts as may be
determined by the Director of the Division of Budget and Accounting, in
consultation with the Attorney General, to be necessary to pay for the costs of
legal services related to such recoveries, shall be deposited into the Hazardous
Discharge Site Cleanup Fund established pursuant to section 1 of P.L.1985, c.247
(C.58:10-23.34), and are appropriated for: direct and indirect costs of remediation,
restoration, and clean up; costs for consulting, expert, and legal services incurred
in pursuing claims for damages; and grants to local governments and nonprofit
organizations to further implement restoration activities of the Office of Natural
Resources Restoration. Recoveries in excess of the amounts appropriated pursuant
to this paragraph, consistent with the terms and conditions of applicable
settlement agreements or court rulings, shall be deposited in the General Fund as
general State revenue.
P.L.2015, c.63, Pg. 75, Ln. 33 – Pg. 76, Ln. 5 (emphasis added) (hereinafter the “Budget
Provision). Because the State’s special counsel is seeking $50,096,966.34 in attorneys’ fees,
Amici read this provision to mean that $50,096,966.34 will be deducted from $225 million,147

146

For a discussion of the Proposed Consent Judgment’s “Morses Creek Deferral” and how this deferral is both
consistent with the Spill Act’s goals and furthers the public interest, see infra Section IV.
147
This discussion of special counsel’s fee is, of course, only relevant if the court approves this fee. By way of letter
opinion and order issued the same day the court approves the Proposed Consent Judgment, the court also approves

63

 and the remainder will be deposited into the General Fund. On the other hand, the State and
Exxon argue that, first, this fee will be deducted from the $225 million. Then, $50,000,000 will
be deposited into the Hazardous Discharge Site Cleanup Fund. Finally, the excess will be
deposited into the General Fund. Assuming these are the only two ways to reconcile the
Proposed Consent Judgment with the Budget Provision, the court finds that the State’s reading is
the more plausible interpretation.
The plain language of the Budget Provision states that “the first $50,000,000 . . . along
with such additional amounts . . . necessary to pay for the costs of legal services related to such
recoveries, shall be deposited into the Hazardous Discharge Site Cleanup Fund . . . .” Id. at Pg.
75, Ln. 34-39. This language supports the State’s reading because $50,000,000 “along with”
$50,096,966.34 will be deposited into the Hazardous Discharge Site Cleanup Fund. The
“excess,” $124,903,033.66, will then be deposited into the General Fund. The Proposed Consent
Judgment’s fidelity to the Spill Act’s objectives, then depends upon the answer to the following
question: Can a NRD settlement that only allocates $50,000,000 to restoration and replacement
be considered to further the Spill Act’s goal of prompt, effective environmental cleanup? The
court answers this question in the affirmative.
When interpreting statutes, “it is not proper statutory construction to reach a result that
would render a provision completely meaningless.” Exxon I, 393 N.J. Super. at 409-10 (citing
Gabin v. Skyline Cabana Club, 54 N.J. 550, 555 (1969)). Here, the court has before it two
statutes, the Spill Act and the Budget Provision. The Spill Act expressly contemplates the
judicial approval of settlements. N.J.S.A. 58:10-23.11f. The Budget Provision, which
acknowledges the settlement of NRD suits, was passed against the backdrop of both N.J.S.A.

the fee. N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., No. UNN-L-3026-04, letter op. (N.J. Super. Ct. Law Div.
Aug. 25, 2015).

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 58:10-23.11f and a string of federal district court decisions that analyzed Spill Act settlements
for fairness, reasonableness, and fidelity to the statute. The court finds that under Gabin’s
reasoning, courts should also not interpret two statutes so as to render one of them completely
meaningless. This is what would happen if the court accepted Amici’s reasoning.
With the Budget Provision, the Legislature has implicitly contemplated judicial approval
of NRD settlements where only a portion of the recovery goes into the Hazardous Discharge Site
Cleanup Fund. If the court used the Budget Provision to find that the Proposed Consent
Judgment is not consistent with the Spill Act’s goals, then the budget provision would be
completely meaningless because no settlement over $50,000,000 could ever be approved. The
Legislature could not have intended such a result. Moreover, in a similar vein, courts have
approved consent decrees that do “not provide for full restoration and replacement of the injured
natural resources . . . .” Acushnet River, 712 F. Supp. at 1033-37. Had the express terms of the
Proposed Consent Judgment mandated that no money would go towards environmental cleanup
or restoration purposes, this would be a different issue. This situation, however, is not before the
court.
Above, the court used the phrase, “Assuming these are the only two ways to reconcile the
Proposed Consent Judgment with the Budget Provision . . . .” This is because there is a third
interpretation that reconciles the Consent Judgment with the Budget Provision. As stated in the
Consent Judgment, Exxon agrees to pay the State “$225 million by certified check made payable
to ‘Treasurer, State of New Jersey,’ or by wire transfer pursuant to instructions provided by the
[State].”148 Upon receiving this payment, the State “shall place that money in a segregated
account within the Hazardous Discharge Site Cleanup Fund (the “Account”). Until this Consent
Judgment becomes final and non-appealable, the settlement funds in the Account shall earn
148

Proposed Consent Judgment, ¶ 5.

65

 interest and may not be used by the State of New Jersey for any purpose.”149 It is well
established that, under New Jersey law, a “settlement agreement between parties to a lawsuit is a
contract.” Nolan, 120 N.J. at 472 (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App.
Div. 1983)). This means that, pursuant to general contract law, the proper way to interpret the
Proposed Consent Judgment is by giving effect to the plain meaning of its language, Atl. N.
Airlines v. Schwimmer, 12 N.J. 293, 301 (1953) (“The polestar of construction is the intention of
the parties to the contract as revealed by the language used . . . .”), and under this plain language,
the State “shall place [the entire $225 million] in a segregated account within the Hazardous
Discharge Site Cleanup Fund.”150
Although, pursuant to the Budget Provision, amounts in excess of the first $50,000,000
“shall be deposited in the General Fund as State revenue,” P.L.2015, c.63 Pg. 76, Ln. 4-5, this
only occurs when the terms and conditions of a settlement do not mandate the money go
elsewhere. See id. at Pg. 76, Ln. 3-4 (“Recoveries in excess of the amounts appropriated pursuant
to this paragraph, consistent with the terms and conditions of applicable settlement agreements or
court rulings, shall be deposited in the General Fund as general State revenue.” (emphasis
added)). The Consent Judgment mandates that the State deposit the entire $225 million in the
Account located within the Hazardous Discharge Site Cleanup Fund. Therefore, under this third
interpretation, it appears that under the plain language of both the Proposed Consent Judgment
and the Budget Provision, the “recoveries in excess” language of the Budget Provision does not
apply to the placement of the Proposed Consent Judgment funds.
Neither the parties nor Amici, however, have asked this court to interpret the terms of the
Proposed Consent Judgment, and for this reason, the court, at this point, has no role in deciding

149
150

Ibid. (emphasis added).
Ibid.

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 the ultimate fate of the State’s recovery. The interpretation the court suggests is only provided to
add even greater weight to its finding that the Consent Judgment is consistent with the Spill
Act’s goals. There may very well be a mechanism by which the State can remove amounts
initially deposited into the Hazardous Discharge Site Cleanup Fund and use those amounts for
other purposes. For the purposes of this decision, the court finds that if only $50,000,000 is going
towards cleanup and restoration, or if the entire $225,000,000 is going towards cleanup and
restoration, under either scenario, the Proposed Consent Judgment ensures the prompt, effective
cleanup of hazardous wastes.
The Proposed Consent Judgment also furthers the Spill Act’s second goal by placing the
financial burden of cleanup on Exxon. Under their ACO remediation obligations, which the
Proposed Consent Judgment reaffirms, Exxon must cleanup Bayway, Bayonne, Paulsboro, the
other fifteen Attachment C Facilities, and the Retail Gas Stations at their costs. Furthermore, it
requires Exxon to pay $225 million for a release of the State’s pending and potential NRD claims
at these sites. Additionally, it reserves the State’s right to pursue its Surface Water Claims and all
MTBE claims. Whether through litigation or settlement, the State may be able recoup further
payments from Exxon.
Finally, the Proposed Consent Judgment furthers the Spill Act, and indeed general New
Jersey, policy of promoting settlement. Through the passage of CERCLA and the Spill Act, both
Congress and the New Jersey Legislature sought “‘to encourage settlements that would reduce
the inefficient expenditure of public funds on lengthy litigation.’” Mathes, 2008 U.S. Dist.
LEXIS 85590, at *9 (quoting In re Cuyahoga Equip. Corp., 980 F.2d 110, 119 (2d Cir. 1992)).
These statutes provide contribution protection to settling defendants in order to induce them into

67

 settling, protection which the Consent Judgment extends to Exxon.151 See N.J.S.A. 58:10-23.11f;
Acushnet River, 712 F. Supp. at 1027 (“The carrot the EPA can offer potential settlors is that
they need no longer fear that a later contribution action by a non-settlor will compel them to pay
still more money to extinguish their liability.”).
One could argue that the Proposed Consent Judgment does not actually further the
“settlement goal” because both CERCLA and the Spill Act favor “early settlements,” and this
settlement cannot be considered early after eleven years of litigation. This contention ignores the
fact that the parties are settling many potential claims at the Attachment C Facilities and Retail
Gas Stations. The court finds that the Consent Judgment, therefore, furthers the goal of early
settlement by avoiding the lengthy delays and expenses that have plagued the Bayway/Bayonne
Litigation and Paulsboro Litigation. Given the protracted nature of the Bayway/Bayonne
Litigation, and potentially lengthy litigation concerning the other sites, “the Court believes the
public interest in the efficient and expeditious resolution of environmental cleanup claims
strongly militates in favor of entering the [Proposed Consent Judgment].” Litgo N.J., Inc. v.
Martin, No. 06-2891 (AET), 2011 U.S. Dist. LEXIS 127273, at *10 (D.N.J. Nov. 2, 2011).
Settlements are a particularly effective way of furthering the Spill Act’s goals because
they lock in swift guaranteed compensation. Numerous courts have recognized that “the
immediate transfer of funds is a significant factor” when considering fidelity to the statute and
public interest. See, e.g., Acushnet River, 712 F. Supp. at 1029 (“The immediate transfer of
funds is a significant factor because it gives the sovereigns control over and the interest derived
from a substantial amount of money.”); Exxon, 697 F. Supp. at 693 (“The immediate public
benefit is the availability of $13,798,472 for cleanup and remediation costs which might
otherwise be drawn from public coffers.”). In fact, settlement has long been the tactic of choice
151

Id. at ¶ 23.

68

 for the DEP, which has never won NRD litigation and had recovered only $115 million in
cooperative NRD settlements prior to the commencement of this suit.152 Even if the court were to
reject this settlement and issue its opinion, due to either Exxon’s or the State’s appeals, the State
would not receive any money from Exxon for perhaps another decade.153 In fact, due to litigation
risks, far from being unguaranteed, the State’s eventual compensation could be nothing. This
settlement also furthers the Spill Act’s objectives because it preserves as precedents Exxon I, the
Retroactivity Ruling, and the Public Trust Ruling,154 all decisions that will aid the State in future
litigation and settlement negotiations.155 For these reasons, the court finds that the Proposed
Consent Judgment is faithful to the Spill Act’s objectives.
IV. Public Interest
The court agrees with the CERCLA caselaw that “[p]rotection of the public interest is the
key consideration in assessing whether a decree is fair, reasonable, and adequate.” Akzo, 949
F.2d at 1435 (citing cases). In fact, during its review of the Proposed Consent Judgment, this was
the court’s “core concern.” See Rohm & Haas, 721 F. Supp. at 680 (“The court’s core concern in
deciding whether to approve this proposed decree is with ensuring that the decree furthers the
public interest as expressed in CERCLA.” (citing Seymour, 554 F. Supp. at 1337; H.R. Rep. No.
253, 99th Cong., 1st Sess. 19 (1985))). For this reason, the court gave special attention to the
points raised in the Public Comments and Amici’s written and oral arguments, which served a
vital role in the present Spill Act settlement review. The Public Commenters, through their

152

Trial Transcript, Sacco, Apr. 30, 2014, Pg. 61, Ln. 19 – Pg. 62, Ln. 6 (stating that this amount was for the
settlement of over 1700 sites).
153
This, of course, assumes the court would have awarded any money in the first place.
154
This settlement is also advantageous because it preserves Exxon II. Although this ruling furthers environmental
cleanup, the court has not listed it along with these other rulings because it dealt with common law strict liability,
not the Spill Act.
155
These rulings may only survive until the Legislature or an appellate court decides to overrule or modify them. For
the present time and immediate future, however, these rulings will be valuable to the State’s NRD program.

69

 observant remarks on the Proposed Consent Judgment have provided the court with invaluable
assistance by giving voice to their objections, along with a few supportive comments.
With these public submissions in mind, when an agency charged with acting in the public
interest, such as the DEP, finds that the public interest is best served through settlement, that
decision is entitled to deference. See Nucor Corp, 825 F. Supp. at 1464. Although the court
should not mechanistically rubberstamp an agreement, it “must refrain from second-guessing the
Executive Branch,” Cannons, 899 F.2d at 84 (emphasis added), as the standard “is not whether
the settlement is one which the court itself might have fashioned, or considers ideal, but whether
the proposed decree is fair, reasonable, and faithful to the objectives of the governing statute.”
Ibid. (citing Durrett, 896 F.2d at 604). As settlements are the product of compromise, no
settlement will ever perfectly award the State everything that it wants. Due to the reasons
discussed in Section III, and the considerations outlined in the remainder of this opinion, the
court finds that approval of the Proposed Consent Judgment is in the public interest.
* * *
A number of Public Comments and Amici believe that the Proposed Consent Judgment’s
Surface Water Claims Provision is a one-sided giveaway to Exxon. Under this provision, the
State dismisses the Surface Water Claims without prejudice and agrees that they can only be
brought in the future in a multi-defendant action if a formal natural resource damage assessment
is completed by the applicable trustee through a procedure that allows for Exxon’s
participation.156 Those opposing this provision argue that there is no reason for the State to
dismiss its claims because they already have a suit pending. Further, they contend that allowing
Exxon, and Exxon alone, to participate in a pre-suit NRDA benefits Exxon at the expense of the
State and other potential defendants. On the “surface,” the court initially found this to be one of
156

Proposed Consent Judgment, ¶ 8.

70

 the more troubling provisions. After conducting its own independent review of NRDA
procedures found in the record and examining the State’s and Exxon’s responses, the public’s
concerns have been addressed. It is readily apparent that for at least four reasons, this provision
is beneficial to the State, Exxon, and other potential defendants and in the public interest.
First, by performing a NRDA before filing a complaint, the State avoids the very
situation for which Amici have faulted the State regarding the Attachment C Facilities and Retail
Gas Stations. If, down the road, the DEP believes that settlement of the Surface Water Claims is
in the public interest, during that settlement review proceeding, the reviewing judge will have a
fuller record. Second, by performing the NRDA pre-complaint, the State will know not only
whom to sue, but also against whom its case is strongest.
Third, allowing for Exxon’s participation creates the cooperation that the DEP has
consistently pointed out was lacking and led to the Bayway/Bayonne Litigation. The vast
majority of the DEP’s prior settlements were done cooperatively through the less costly
administrative process. Indeed, when federal courts see PRPs and trustees working together, they
consider this “laudable.” Mathes, 2008 U.S. Dist. LEXIS 85590, at *15 (“Renaissance’s
cooperation with DPNR and contributions thus far are laudable.”). Nothing in the Consent
Judgment prevents the DEP from inviting other potential defendants to participate in the NRDA.
The State, as well as counsel for Exxon, speaking on the company’s behalf during oral argument,
has represented that Exxon “welcomes the other major generators being invited to participate.”157
This is because a process that allows for all parties to participate at the beginning allows for cost
sharing and prevents the need for a supplemental study done years later. The fact that no
companies operating in the vicinity of the Arthur Kill have provided objections to this Consent
Judgment provision is suggestive that they too see the benefits of its inclusion.
157

Oral Argument Transcript, Wells, July 30, 2015, Pg. 96, Ln. 8-9.

71

 Fourth, due to the interstate nature of the surface waters, it is likely that in the re-filed
suit, there will be a joint-trusteeship between the DEP and federal government. If CERCLA or
Oil Pollution Act claims are brought, the trustees will not get to pick and choose who completes
the NRDA, rather they will be required to “invite the participation of [all] potentially responsible
part[ies].” 43 C.F.R. 11.32(a)(2)(iii)(A) (“The authorized official shall send a Notice of Intent to
Perform an Assessment to all identified potentially responsible parties. The Notice shall invite
the participation of the potentially responsible party, or, if several parties are involved . . . in the
development of the type and scope of the assessment and in the performance of the assessment.”
(emphasis added)). For these reasons, the court finds that the Surface Water Claims Provision is
in the public interest.
The next two objections concern the Consent Judgment’s interplay with legislatively
enacted laws. Amici and the Public Comments, particularly those by the Clayton Block
Company, Inc. and the Linden Roselle Sewerage Authority (“LRSA”), claim that the
contribution protection granted to Exxon in the Consent Judgment is another giveaway. This
provision, however, is beyond the court’s control. The Spill Act expressly mandates that anyone
who “has entered into an administrative or judicially approved settlement with the State, shall
not be liable for claims for contribution regarding matters addressed in the settlement or the final
remediation document, as the case may be.” N.J.S.A 58:10-23.11f(a)(2)(b) (emphasis added). In
fact, the Legislature amended the Spill Act to include this provision in order to induce defendants
into settling. This proverbial carrot is also a tool federal trustees employ to encourage settlement.
See 42 U.S.C. § 9613(f)(2). This litigation has been proceeding for eleven years, and during this
time, nothing has prevented Clayton Block, the LRSA, or other companies from doing what
Exxon has now done: voluntarily settle potential claims against them and receive contribution

72

 protection. Moreover, the court will not disapprove the Consent Judgment for this reason
because “the ultimate measure of accountability in an environmental case is the extent of the
overall recovery, not the amount of money paid by any individual defendant.” Charles George,
34 F.3d at 1086. If the public perceives the Spill Act’s contribution protection provision as
unfair, their redress is through the political branches of government.
The fact that Exxon may be able to deduct their settlement payment on their state and
federal tax returns is also not a reason to deny approval. As with contribution protection, the
Legislature and Congress allow settling defendants to deduct settlement payments. The court is
aware of no federal or state court that has rejected a NRD settlement because the settling
defendant could deduct its payment. In fact, the court is aware of no party that has ever even
raised this issue. The court believes this is so because this objection is without merit. Courts do
not wade into the tax strategies of multi-national corporations and determine how much, if any,
of settlement payments they are going to deduct from their New Jersey state taxes. If this court
were to reject the Proposed Consent Judgment for this reason, it would set a draconian precedent
whereby every settlement, NRD or otherwise, could be rejected. Such a result would be contrary
to this state’s pro-settlement policy.
Two other objections concern the fact that the State must bear its own costs and expenses
in the Bayway, Bayonne, and Paulsboro Litigation and that Exxon does not admit liability. These
provisions are standard settlement language in all fields of the law. In fact, Exxon also denied
liability in both 1991 ACOs, and no one took any issue at that time.
The Environmental Groups also argue that the Proposed Consent Judgment cannot be in
the public interest because it releases Exxon for “all NRD claims asserted or could have been

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 asserted” in the Bayway/Bayonne Litigation.158 According to them, the DEP could have
CERCLA, Oil Pollution Act, Clean Water Act, and/or Water Pollution Control Act claims
arising out of the contamination at Bayway and Bayonne. This argument must fail for two
reasons. First, plaintiffs are not allowed co-extensive double recoveries. If the DEP is recovering
from Exxon for damages under the Spill Act, the DEP cannot also recover from Exxon for those
same damages under other statutes or common law principles. Second, even if the DEP did not
explicitly release Exxon from these claims, these claims are likely implicitly barred by the entire
controversy doctrine, which requires plaintiffs to bring all possible claims in the same lawsuit
when those claims arise out of the same cause of action. McNeil, 177 N.J. at 395 (“The concept
that a party is required to bring all possible claims in one proceeding is embodied in the closely
linked concepts of res judicata and the entire controversy doctrine.”); Pressler, Current N.J.
Court Rules, cmt. 2 on R. 4:30A (2006).
Although the court’s initial fears concerning the Surface Water Claims Provision have
been completely allayed, the Proposed Consent Judgment’s Morses Creek Deferral Provision
still gives the court pause, though not fatally so. Paragraph Thirteen states:
Because Morses Creek receives process water discharges from the Bayway
Refinery Complex (“BRC”), and because of resulting operational conditions and
restrictions at Morses Creek, the final remedy determination and remediation for
Morses Creek, as depicted in Attachment A attached hereto, will be deferred until
the cessation of refining operations at the BRC site, which will be when
operational conditions at the BRC no longer require the regular discharge into
Morses Creek of 30 million gallons per day or more of once-through non-contact
cooling water pursuant to NJPDES Permit No. NJ0001511 (or as
renewed/reissued). Notwithstanding this deferral, ExxonMobil will continue to
timely comply with its permit and other regulatory obligations through the
completion of the feasibility study for Morses Creek.159

158
159

Proposed Consent Judgment, ¶ 7 (emphasis added).
Id. at ¶ 13 (emphasis added).

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 On its face, a provision that delays remediation of a contaminated creek until the cessation of
refining operations seems anathema to a statute and review standard that seeks to ensure the
prompt, effective cleanup of hazardous wastes. There are, however, a number of plausible
explanations for this paragraph’s inclusion in the Consent Judgment. But first, some background
is required.
The DEP introduced evidence at trial that demonstrated Morses Creek has been
contaminated with hazardous substances. In fact, it is not a stretch to say that, because Exxon is
required to remediate Morses Creek under the 1991 Bayway ACO, it is undisputed that the Creek
is contaminated. Since 1909, the Creek has always served an integral role to the operation of the
Bayway Refinery Complex. In order to provide cooling water for the refinery process, noncontact cooling water, which is not commingled with refinery product, is run through the plant
and discharged back into the Creek. The discharge of cooling water into the Creek is allowed
because every year the DEP, pursuant to their regulatory authority, grants the owner of the
refinery a permit to do so, currently NJPDES Permit No. NJ0001511.
During trial, Exxon introduced evidence and extensively cross-examined Randy Horsak
and Ronald Ostermiller in an attempt to show that primary restoration of the Creek was not
practicable. They also provided testimony of plant personnel with knowledge of the refinery’s
operations. Basically, their argument boiled down to the assertion that to implement the DEP’s
restoration plan for the Creek, the refinery, which is currently owned by Phillips 66, would have
to cease to operate as a viable refinery. In fact, for the past two decades, a debate has been
ongoing between the parties concerning whether remediation can occur while the refinery still
operates.160 Furthermore, although Exxon’s successors in interest must allow Exxon onto the site
so that they can comply with their remediation obligations, Exxon arguably does not have the
160

Oral Argument Transcript, Kanner, July, 30, 2015, Pg. 76, Ln. 24 – Pg. 77, Ln. 14.

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 power to force Phillips 66 to close the refinery so that Exxon can comply with these obligations.
Taking these considerations into mind, the State and Exxon have proffered a number of
reasonable explanations for this provision’s inclusion.
First, if Exxon and the DEP attempted to remediate the Creek while 30 million gallons of
water were being discharged into the Creek per-day, their task would be nearly impossible. There
was no trial evidence that provided a practicable alternative for long-term water supply. For this
reason, any remediation they attempted might not be possible, let alone effective. By waiting
until the refinery no longer discharges 30 million gallons of water into the Creek, the public is
guaranteed that remediation will be more complete and thorough. In this sense, the provision,
like the rest of the Proposed Consent Judgment is a reasonable compromise, even with the
extended deferral.
Second, the provision is in the public interest because it only defers remediation until
“operational conditions at the BRC no longer require the regular discharge into Morses Creek of
30 million gallons per day or more of once-through non-contact cooling water . . . .”161 In their
critique, Amici have overlooked this clause and instead only focus on the “cessation of refining
conditions” language. This clause defines what the cessation of refining conditions are under the
Consent Judgment. Currently, technology does not exist that would allow one to operate the
refinery without using at least 30 million gallons of non-contact cooling water. Once that
technology is developed, either the refinery owner will voluntarily adopt the new technology, or
the DEP will cease to issue “NJPDES Permit No. NJ0001511 (or as renewed/reissued).”162 Once
either of these events occur, the DEP will then have a right to require Exxon to fully remediate
Morses Creek under the ACO and Consent Judgment.

161
162

Proposed Consent Judgment, ¶ 13.
Ibid.

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 Third, even if the court were to reject the Consent Judgment, Morses Creek could not be
remediated anytime in the immediate future. Under the Bayway ACO, Exxon is obligated to
complete a feasibility study for Morses Creek. This study will identify a range of options and
available technology concerning how to go about remediation. After reviewing this study, the
DEP will then select the best option and issue Exxon a permit allowing them to remediate the
Creek. The Proposed Consent Judgment still requires Exxon to comply with its obligation to
complete the feasibility study. The study, which recommends the appropriate technology, should
therefore be completed by the “cessation of refining operations,” allowing the DEP to select a
remedy in a timely fashion.
Like settlement negotiations in general, the Morses Creek deferral has been an ongoing
dispute between the DEP and Exxon. In their effort to achieve near global peace, they have
included their resolution of this debate within the Proposed Consent Judgment. The Legislature
has designated the DEP, not the courts, with the task of bringing and settling NRD lawsuits. The
caselaw describing a court’s task of reviewing trustee settlements is clear: when a court finds that
the trustee has reviewed the underlying evidence and provided a plausible explanation for its
decision, it must defer to the agency’s expertise. See Tutu Water Wells, 326 F.3d at 207; Akzo,
949 F.2d at 1426; Cannons, 899 F.2d at 84 (stating that “the district court must refrain from
second-guessing the Executive Branch”); In re MTBE, 33 F. Supp. 3d at 264 (“Under New
Jersey law, a court will not ‘second-guess those judgments of an administrative agency,’ like the
NJDEP, which ‘fall squarely within the agency’s expertise.’” (quoting In re Stream
Encroachment Permit, 402 N.J. Super. at 597)); Gloucester, 591 F. Supp. 2d at 753 (“Agency
action is arbitrary and capricious if it has ‘no rational basis’ or if the action is ‘willful and
unreasoning . . . without consideration and in disregard of circumstances.’” (alteration in

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 original) (quoting In re Xanadu, 402 N.J. Super. at 642)); In re Stream Encroachment Permit,
402 N.J. Super. at 598 (stating that “‘if there is any fair argument in support of the course taken
[by the agency] or any reasonable grounds for difference of opinion among intelligent and
conscientious officials, the decision conclusively is legislative and will not be disturbed unless
patently corrupt, arbitrary or illegal. Doubts held by the courts as to the wisdom of the
administrator’s decision do not alter the case’” (alteration in original) (quoting N.J. Guild of
Hearing Aid Dispensers v. Long, 75 N.J. 554, 562-63 (1978))). For years, the DEP has
contemplated Morses Creek remediation and has now provided a reasonable explanation for why
that remediation should be deferred.
One thing is for sure: Morses Creek will be remediated much faster through the parties’
cooperation under the Consent Judgment than through prolonged battles in appellate courts. The
public interest would not be served by an ineffective or incomplete Morses Creek remediation.
Nor would it be served through the unintended consequence of closing the refinery. An
attempted closure would undoubtedly generate years of litigation between Phillips 66, Exxon,
and the State. This litigation would further delay remediation, which would not be in the public
interest or effectuate the Spill Act’s goals.
Finally, the Public Comments and Amici contend that the court has no authority to enter
the Attachment C Facility and Retail Gas Station portions of the settlement. For support they rely
on Local No. 93, Int’l Ass’n of Firefighters v. City of Cleveland, which they contend recognized
“that a consent decree cannot provide greater relief than a court could have ordered after a trial.”
478 U.S. 501, 524 (1986). Applying this general principle to the Proposed Consent Judgment,
they argue that the court cannot approve it because it provides greater relief than the court could

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 have awarded after the Bayway/Bayonne Litigation. Assuming Firefighters applies to the present
matter, the court is not convinced.
Firefighters laid out a three pronged test for when courts can enter consent decrees. The
decree must (1) spring from and serve to resolve a dispute within the court’s subject-matter
jurisdiction; (2) come within the general scope of the case made by the pleadings; and (3) further
the objectives of the law upon which the complaint was based. Firefighters, 478 U.S. at 525
(citations omitted). After laying out this test, Firefighters made clear that because “the parties’
consent animates the legal force of a consent decree. . . . A federal court is not necessarily barred
from entering a consent decree merely because the decree provides broader relief than the court
could have awarded after a trial.” Ibid. (citations omitted). When reviewing consent decrees
under this test, courts have repeatedly declined to endorse Amici’s “crabbed view.” Natural Res.
Def. Council v. Whitman, No. C 99-03701 WHA, 2001 U.S. Dist. LEXIS 18435, at *36 (N.D.
Cal. 2001); see also Alcan Aluminum Corp. v. Butler Aviation-Boston, Inc., No. CV-02-0562,
2003 U.S. Dist. LEXIS 16435, at *20 (M.D. Pa. 2003) (noting that “a party can receive
contribution protection with respect to a matter for which the government does not make a claim
against that party”); Sierra Club v. Browner, No. 93-124 (NHJ), 1994 U.S. Dist. LEXIS 16400,
at *10 (D.D.C. 1994) (approving consent decree even though the “EPA voluntarily agreed to
relief that may have been beyond this Court’s power to order after trial” because “such relief is
fair, within the general scope of a lawsuit within the subject matter jurisdiction of this Court, and
consistent with Congress’s Clean Air Act objectives”).
For instance, the U.S. District Court for the Northern District of California has held that
“a court may enter a consent decree that provides relief beyond what a court could otherwise
accord so long as some substantial part of it was within its jurisdiction.” Whitman, 2001 U.S.

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 Dist. LEXIS 18435, at *35 (emphasis added). As to the second prong, a decree is within the
general scope of the case made by the pleadings when the decree addresses the harm that was
alleged in the complaint. Id. at *38 (discussing the Third Circuit’s approach in Sansom Comm. v.
Lynn, 735 F.2d 1535, 1539 (3d Cir. 1984) and the Ninth Circuit’s approach in Sierra Club, Inc.
v. Elec. Controls Design, Inc., 909 F.2d 1350, 1355 (9th Cir. 1990)). Applying these principles,
this court can approve the Proposed Consent Judgment.
As a New Jersey court of general jurisdiction, this court has subject-matter jurisdiction
over Spill Act claims. The Consent Judgment is within the general scope of the case made out by
the pleadings because the complaint alleges harm to the State’s natural resources, and the
Consent Judgment addresses that harm. Finally, as discussed in Section III.C., the Consent
Judgment furthers the Spill Act’s objectives. In fact, rejecting an argument similar to that which
Amici make, the Northern District of Indiana has approved a CERCLA consent decree that
released BP from liability for eight refineries when not all eight were listed in each count of the
complaint. BP Exploration, 167 F. Supp. 2d at 1052. Any other result would be contrary to the
Spill Act’s settlement goal and contrary to the public interest.
V. Conclusion
Nearly a year ago, the court began the task of drafting its decision on the multitude of
issues raised by the parties during trial. In February of this year, and almost 300 pages later, the
court was informed of the Proposed Consent Judgment. Putting the draft decision aside, the court
took up the chore of determining whether the Consent Judgment is fair, reasonable, faithful to
the Spill Act’s goals, and in the public interest. In many respects, this effort was more difficult
than consideration of the merits decision – and no less important.

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 After years of litigation and negotiations, the New Jersey Department of Environmental
Protection and Exxon Mobil Corporation have resolved their disputes and potential disputes over
Bayway, Bayonne, Paulsboro, fifteen other Attachment C Facilities, and 1768 Retail Gas
Stations. Through the approval of the Proposed Consent Judgment, the DEP will recover $225
million for alleged natural resource damages, while still retaining their right to refile their
Surface Water Claims and pursue MTBE pollution allegedly caused by Exxon. In reaching this
result, the court finds that the DEP applied rational methods in order to estimate total damages
and determine what a fair payment would be for those damages. Although far smaller than the
estimated $8.9 billion in damages, Exxon’s payment represents a reasonable compromise given
the substantial litigation risks the DEP faced at trial and would face on appeal. Furthermore, the
Consent Judgment is faithful to the Spill Act’s goals and in the public interest. For these reasons,
the DEP’s motion to approve the Proposed Consent Judgment is GRANTED.

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