Attorney General’s Office, DEP Announce $190 Million Settlement
With Sole Remaining Defendant Occidental in Passaic River Litigation

(14/P98) TRENTON – Acting Attorney General John J. Hoffman and Department of Environmental Protection (DEP) Commissioner Bob Martin announced today that Occidental Chemical Corp. has agreed to pay the State $190 million to resolve its liability for past cleanup and removal costs, natural resource damages and other costs and damages related to contamination of the Passaic River.

The Occidental agreement represents a proposed settlement, and is subject to a public comment period and review by a Superior Court Judge.  Should the settlement be approved, it will bring to $355.4 million the total amount recovered by New Jersey as a result of the Passaic River litigation. Among other terms, the proposed Occidental settlement calls for $50 million of the company’s payment to be used for natural resource restoration projects in and around the Newark Bay Complex.

“If approved, this is an important legal outcome for the residents of New Jersey, and for our environment,” said Acting Attorney General Hoffman. “The citizens of our state should not be forced to shoulder the cost of repairing damage to one of our most precious natural resources – the Passaic River -- by industrial polluters. Our objective throughout the Passaic River litigation has been to hold accountable those legally responsible for contaminating the river, and we have done so.”

“The cleanup of the lower Passaic River is vital to the health and safety of people who live and work along the river, and is one of the State’s top environmental priorities,” Commissioner Martin said. “The parties responsible for the pollution should be accountable for the expense of the remediation, and not the taxpayers of our state. We have stood firm in that commitment and strongly support the settlement being announced today.”

Occidental is the legal successor to Diamond Shamrock Chemicals Company, and the lone remaining defendant sued by the State over contamination of the Passaic River that had yet to settle.  

In a prior court proceeding, Diamond Shamrock was found to have intentionally dumped hazardous pollutants into the Passaic River for decades.  In 2011, a Superior Court Judge entered a judgment against Occidental holding it liable for certain of the State's Passaic-River-related clean-up and removal costs because of its status as legal successor to Diamond Shamrock. Among other hazardous substances, Diamond Shamrock discharged dioxins – a known carcinogen -- into the river from its plant in Newark.

Last year, Superior Court Judge Sebastian P. Lombardi approved two prior settlements in the Passaic River litigation totaling $165.4 million, $17.4 million of which is to be spent on natural resource restoration projects in and around the Newark Bay Complex. The first settlement resulted in payments to the State totaling $130 million by several non-discharging defendants, including Spanish oil company Repsol, S.A.,  and Argentina-based energy conglomerate YPF, S.A., YPF Holdings, Inc. and YPF International. Also party to that settlement were CLH Holdings, Inc., Maxus Energy Corporation, Maxus International Energy Company and Tierra Solutions, Inc.

The second settlement approved by Judge Lombardi involved 261 third-party defendants -- including 70 municipalities and other public entities that were sued and brought into the State’s case by Maxus Energy Corporation and Tierra Solutions, Inc.. Under that settlement, the third-party defendants paid a total of $35.4 million to the State.  

Factoring in all settlements, including the proposed Occidental settlement, a total of $67.4 million in payments to the State from the Passaic River litigation will be dedicated to natural resource restoration projects in New Jersey.

Occidental also has agreed under the proposed settlement announced today to pay certain costs associated with the $1.7 billion plan for the cleanup of the lower eight miles of the Passaic River announced by the federal EPA in April of this year, if those costs are assessed to the State under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).

Notice of the proposed Occidental settlement is scheduled to be published for public review and comment in the September 15, 2014 edition of the New Jersey Register and the proposed Consent Judgment with Occidental will be posted on the DEP’s Web site on that day.

It is expected that, if the DEP approves the proposed settlement following the required administrative notice and 30-day public comment period, it will be presented to the Court for final judicial review and approval in December of this year.
           
The Passaic River Litigation was launched by the State more than eight years ago against Occidental Chemical Corporation and other companies associated with the former Diamond Shamrock site on Lister Avenue in Newark. Diamond Shamrock manufactured pesticides and herbicides from the 1940s through the 1960s, including the infamous defoliating chemical Agent Orange during the Vietnam War.

The State is represented in the Passaic River litigation by Acting Attorney General Hoffman, Executive Assistant Attorney General Lee Vartan, Deputy Attorney General John F. Dickinson of the Division of Law, Special Counsel Jackson, Gilmour & Dobbs, P.C. of Houston, Texas, and Special Counsel Gordon and Gordon, of Springfield, New Jersey.

The DEP reminds residents that harvesting blue claw crabs from the waters of the lower river and Newark Bay is prohibited because of the contamination. The DEP continues to engage in coordinated multi-language education efforts reinforcing the ban with the help of community groups and municipalities in the lower Passaic River and Newark Bay region.