Governor Christie has come under attack recently as a result of the agreement by his administration to accept $225 million to settle the State’s natural resource damage claim against Exxon Mobil for the Bayonne and Bayway refinery sites in Bayonne and Linden, New Jersey and other sites owned or operated by Exxon, but that criticism seems essentially unfounded. While it is true that the State sought over $8 billion in damages from Exxon for injury to natural resources associated with the two refineries, such a recovery would have been unprecedented and was based upon economic calculations as to injury which are highly controversial and arguably speculative. Just because billions of damages were demanded does not mean that anything near that sum would have been awarded by the trial judge and survived a lengthy appeals process. The State was unsuccessful in the two natural resource damages suit that it did bring to trial.

The recovery of natural resource damages in New Jersey, a concept which reached its zenith during the leadership of the NJDEP by Bradley Campbell in the McGreevey Administration more than a decade ago, seeks payment from a polluter for monies which are in addition to the cost of cleaning up the contamination. The concept is that the pollution has caused injury to the State’s natural resources and that the State and its citizens should be compensated for that injury. However, the problem with that approach is that often the alleged injury is difficult to discern and may involve damage which is not observable, or of any real world consequence. It was Campbell, whose op-ed piece criticizing the proposed settlement was published in the New York Times, who ignited the current furor.

I have generally advised my clients during the past few years to seek to resolve natural resource issues now before the political winds again blow in the direction of seeking more substantial recoveries for such damages. It remains to be seen whether the fallout from this new controversy involving Exxon Mobil will now cause the pendulum to swing back faster than expected.

Questions? Let Mitchell know.

Mitchell Kizner is a New Jersey focused attorney in Flaster Greenberg PC’s Litigation and Environmental Law departments. He represents clients in insurance, environmental, construction and other commercial matters as part of his active litigation and commercial law practice. He is also General Counsel to the firm. He can be reached at mitchell.kizner@flastergreenberg.com or 856.382.2247.