• Penalties, Penalties Everywhere
  • December 22, 2011
  • Law Firm: Riker Danzig Scherer Hyland Perretti LLP - Morristown Office
  • A consistent concern raised by the business community with respect to the proposed ARRCS rules governing the administrative requirements for the remediation of contaminated sites are the more than 250 base penalties listed in the rules.  The amount and number of penalties, the potential duplicity in violations, the lack of clarity on how the NJDEP will enforce these penalties and the NJDEP's stated intention to be more aggressive on enforcement in the future has created concern in the regulated community.

    The proposed rules set forth base penalties for numerous potential violations with little indication as to how the NJDEP is going to impose such penalties when an infraction occurs.  Many of these, such as for failure to submit documentation, appear to be simply imposing punishment for technical violations and have no bearing on whether the enforcement response is proportional to harm or potential harm to the environment.  Yet, Governor Christie in Executive Order No. 2 mandated that an agency's enforcement mechanism shall "value performance based outcomes and compliance, over the punitive imposition of penalties for technical violations that do not result in negative impacts to the public health, safety or environment."  With respect to enforcement, the proposed rules seem to be taking the exact opposite approach mandated by the Governor's Order.

    The amounts of the base penalties in the proposed rules have substantially increased from the amounts in the current rules, often up to $15,000, $20,000 or $25,000 per violation.  Moreover, as the proposed rules are now written, the NJDEP could impose multiple penalties on a responsible party for a single mistake or infraction.  For example, a remediating party that fails to comply with ISRA may be assessed a penalty for both a general violation of ISRA and a violation of the specific requirement giving rise to the non-compliance.  These penalties can be imposed on a daily basis.  Further, many of the listed violations have no correlation to potential impacts on human health and safety or the environment.

    Many of the violations are categorized as "non-minor," which means, unlike "minor" violations, the responsible party is not provided a grace period in which it can correct any alleged error or deficiency without penalty.  Certain of the violations listed as "non-minor," such as the failure to provide documentation, should be designated as "minor" under the grace period law, especially when it does not appear the violation will result in harm to the environment.

    More troubling is that certain of the listed violations suggest the NJDEP can question, through an enforcement action, the professional judgment of an LSRP.  Examples of these violations include: "[f]ailure to comply with this chapter when conducting remediation pursuant to any of the applicable statutes;" "[f]ailure to properly conduct a preliminary assessment;" and "[f]ailure to conduct a remedial investigation when required."  This could result in the untenable situation where a remediating party is penalized because its LSRP's approach differs from the approach that would have been preferred by the NJDEP.  In situations where the NJDEP may prefer a different approach, the rules should provide that the NJDEP will not take enforcement action unless it can demonstrate that the LSRP's approach was not protective of human health and the environment.

    It is unclear how these specific base penalties will bolster the NJDEP's already broad authority under the SRRA and the Spill Act to take enforcement actions for violations regarding the clean up of a contaminated site.  At a minimum, the NJDEP should clarify the proposed rules to eliminate duplicity, provide for greater use of grace periods to correct violations and require the penalties to reflect potential risks and impacts to public health and the environment.