Consultant Unable To Escape NJ Contaminated Fill Case

October 31st, 2012

We have previously reported on how disposal of fill material tends not to be well-regulated. During the real estate bubble demand for aggregate was at a premium. Due to the scarcity and cost of aggregate or fill material, contractors often use pulverized construction debris from other construction sites as fill material.

Despite the fact that construction and demolition (C&D) debris can contain asbestos, lead‑based paint, oil and PCBs, most states do not strictly regulate C&D waste streams. Those states have established management practices for C&D have usually adopted qualitative protocols (descriptions of the waste stream) instead of quantitative protocols (sampling) to determine how to manage various types of C&D debris.

One of the more infamous examples of contaminated fill involved the demolition of the Ford Motor automotive assembly plant in Edison,New Jersey. When Ford closed the plant in 2004, it entered into a remediation agreement with the NJDEP to comply with the requirements of the New Jersey Industrial Site Recovery Act (ISRA). Ford entered into a “zero-dollar sales agreement” with Edgewood Properties (Edgewood) where Ford agreed to provide 50,000 cubic yards of Recycled Concrete Aggregate (“RCA”) to Edgewood for use as fill material at seven residential  projects that Edgewood was developing in exchange for Edgewood agreeing to remove the material from the Ford site.

In June 2005, Edgewood discovered that the concrete fill from the Edison plant exceeded the residential limits for PCBs and also the commercial limits in some areas. Beginning in September 2005, Ford began the process of excavating and removing the PCB-contaminated material at the seven Edgewood sites and another half-dozen properties that received PCB-contaminated concrete. In March 2006, NJDEP issued an administrative order to Ford and other parties to remediate the PCB contamination at the impacted sites. In addition, the NJDEP ordered Edgewood to stop development at the impacted sites until the cleanup was satisfactorily completed. Ford filed a complaint asserting claims under the CERCLA and the New Jersey Spill Act for contribution and indemnification. Edgewood, in turn, asserted cross-claims, counterclaims and a third-party complaint against other contractors and consultants involved in the demolition project alleging claims for breach of contract, contribution, negligent misrepresentation, and civil conspiracy.

The parties in this sprawling lawsuit dispute virtually all of the material facts, particularly the allegations involving the specific responsibilities of the parties.  Indeed, in its most recent opinion, the federal district court for the district court of New Jersey declined to grant a motion for summary judgment in favor of Arcadis, Inc. because of material questions of fact over the extent Arcadis was involved in the off-site distribution of contaminated concrete. Ford Motor Co. v. Edgewood Properties, 2012U.S. Dist. LEXIS 125197 (D.N.J. 8/31/12).

The following facts are gleaned from this opinion and the numerous briefs: Ford Motor Land Development Corporation (“Ford Land”) entered into a contract with MIG/Alberici (MA) to demolish the concrete floor slabs and reuse the crushed concrete for on-site fill, road bed, and other similar uses. The contract required MA to dispose crushed concrete containing PCBs pursuant to NJDEP requirements.

Ford Land retained Golder Associates (Golder) to assist in pre-decommissioning support services at the Edison Site, including formal preparation of a decommissioning project manual (the “Manual). Under the Manual, MA was primarily responsible for managing demolition debris through recycling, disposal, or reuse pursuant to the Manual. MA and Ford Land intended to use crushed concrete generated from the demolition of the buildings as backfill if allowed by the Manual and the applicable NJDEP applicable regulations. At the time, the NJDEP PCB regulations provided that concrete containing less than 0.50 ppm could be used at residential sites while concrete material with PCBs between 0. 50 ppm and 2 ppm could be use at commercial sites.

Ford Land also retained Arcadis USA (Arcadis) to identify the ISRA regulatory requirements applicable to the reuse of crushed concrete on-site as backfill. Arcadis advised that a variance from the technical requirements was necessary to use the crushed concrete on-site because, from a regulatory standpoint, the use of crushed concrete as backfill was a gray area. A variance plan containing a sampling plan was developed and submitted to NJDEP for approval. The court found a genuine dispute of fact existed as to whether Arcadis developed the sampling plan since while there was evidence that Arcadis developed the first draft of the sampling plan, other parties were involved in finalizing the plan.

In November 2004, NJDEP approved a variance to reuse crushed concrete at the Edison Plant provided that the crushed material did not contain unlawful detections of PCBs. Accordingly, once the concrete was crushed, MA segregated the concrete material depending upon PCB concentrations. Edgewood contended that Golder issued a memorandum to Edgewood’s environmental consultant that stated that concrete stockpiles that were suitable for residential use were being staged for off-site locations while concrete with PCB concentrations above residential use criteria were being segregated and properly disposed off-site.

Arcadis sought summary judgment on the Edgewood claim that Arcadis was liable as a CERCLA arranger. The court found Edgewood has raised genuine disputes of material fact on Arcadis’ knowledge that Ford was pursuing zero dollar sale agreements for its crushed concrete and on the role Arcadis played arranging those contracts with visitors who viewed sample piles at the Edison Site. The court also said there were genuine disputed facts if Arcadis exercised sufficient dominion and control over the contaminated concrete either directly or through others. These disputed material facts precluded summary judgment in favor of Arcadis, the court ruled. For similar reasons, the court also denied summary judgment on Edgewood’s NJ Spill Act claim against Arcadis.

On its negligence claim, Edgewood had argued Arcadis knew Ford and its agents would be transferring recycled concrete to third parties and therefore owed a duty of care to Edgewood to ensure that the crushing, handling, testing, stockpiling, transfer, and disposal of the concrete be done in  a reasonable and safe manner as well as in accordance with applicable laws. Arcadis denied it owed any duty to Edgewood on the grounds that its role was limited to ISRA compliance and that it was not responsible or involved with the handling, testing and off-site distribution of the concrete generated from demolition. However, the Court said the extensive summary judgment record showed that Arcadis owed a duty of care to Edgewood.

First, the court said a reasonable jury could find that Arcadis knew that other contractors were relying on Arcadis’ determination that the sampling methodology separating concrete to be used on- and off-site was reasonable and conservative, that Arcadis knew about Ford’s plan to distribute contaminated concrete to third parties, and Arcadis knew that Ford was considering Edgewood as a potential recipient of contaminated concrete through a zero dollar sales agreement

Turning to the relationship of the parties, the court also found that Arcadis’ role went beyond mere ISRA compliance, finding that the summary judgment record contained evidence that Arcadis actually participated in those non-ISRA issues crushing, stockpiling, sampling, marking, reviewing, distributing, and compiling concrete for purposes of enabling off-site disposition through zero dollar sales agreement. In so doing, the court said Arcadis increased the risk of harm to potential recipients of contaminated concrete. Therefore, the court said, Arcadis had a specific duty to ensure that the off-site distribution of concrete conformed with the applicable standards. In reaching these conclusions, the court made the following findings:

  • Arcadis played a role in establishing and modifying the sampling methodology included in the variance request that was to be used for determining what concrete would be used on-site or off-site;
  • Arcadis had a role in sampling concrete and advising the assessment of alternatives available in the absence of specific NJDEP regulations or guidance on concrete reuse;
  • Arcadis was involved in inspecting stockpiled concrete scheduled for crushing, analyzing samples and reporting the results, was involved in changing Golder’s sampling method;
  • Arcadis, along with Golder, had a supervisory role in deciding what levels of contaminated concrete would be used as backfill, the corresponding sampling methodology, and how the samples and piles would be labeled

The court cautioned that Edgewood still had to demonstrate that Arcadis breached its duty of care in overseeing concrete processing operations and unlawfully distributed contaminated concrete from the Edison site.

Back in April, we covered a Minnesota lawsuit involving contaminated fill material from a road project.  The recent decision in Woodcliff, Inc. v Jersey Construction, Inc, 2012 U.S. Dist. LEXIS 125214 (D.N.J. 9/4/12) is another case involving contaminated fill from a road project.  In April 2009, the defendant JCI removed approximately 8,000 cubic yards of soil as part of road construction project associated with construction of a new shopping center in Hamilton Township by Stanbery Hamilton LLC (Stanbery). The work was done pursuant to a development agreement between Stanbery and NJDOT that required Stanbery to perform road improvements. The shopping center site had been previously used as an apple orchard.

JCI offered to make the excavated soil available to plaintiff Woodcliff for use as fill material for its residential development known as Woodcliff Estates at Hamilton (“Woodcliff Estates”). One year later, Woodcliff learned the soil was contaminated with arsenic from the former apple orchard.  Woodcliff incurred approximately $ 59K to investigate the extent of the contamination and anticipated incurring significantly more costs to complete remediation. As a result, Woodcliff filed a lawsuit against JCI and NJDOT asserting common law and the Spill Act.

NJDOT said it was not liable under the government redevelopment exemption of the Spill Act. However, the court denied the agency’s summary judgment motion because there were a number of unresolved issues of material fact involving NJDOT’s ownership of the property from which the fill material was excavated.

More interesting was the court decision to grant summary judgment in favor NJDOT on the trespass claim. The court cited prior NJ decisions holding that the use of trespass was an “inappropriate theory of liability” for contamination cases and that courts should not  “endeavor to torture old remedies to fit factual patterns not contemplated when those remedies were fashioned.”

We covered other incidents involving contaminated fill material in the Schnapf Environmental Journal that was published from 1998 to 2008. For example, we reported on a residential project in Kalmath Falls where asbestos-containing building materials had been buried, a proposed residential development site in Providence where auto fluff had been used as fill, and at a construction site in Leominster where pulverized pieces of transite piping was discovered. Past SEJ issues discussing these and other cases are available from the newsletter page of this website.

There have been instances where developers have spent millions of dollars to remediate sites only to have them re-contaminated with fill material. State environmental agencies simply do not have the resources to track the volume of C&D generated by construction sites and contractors looking to increase profit margins have little financial incentive or time to find clean fill. Thus, it is important that developers establish a system to screen the fill materials that are to be imported to their development sites.

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