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Summit Council Urges State to Indemnify City in Multi-Million-Dollar Passaic River Cleanup Litigation

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SUMMIT, NJ - Common Council, by a 5-1 vote at a special meeting on Tuesday, decided not to give its approval to a planned defense in a long-standing pollution case involving the Passaic River until the scope of the proposed litigation is reduced and the state agrees to indemnify the 75 municipalities named co-defendants in the case.

The New Jersey Department of Environment Protection (DEP) in 2005 filed an environmental cleanup suit under the Spill and Water Pollution Acts of 1976 against nine companies and their predecessors for the “intentional discharge of toxic chemicals” from Newark’s Diamond Alkali Plant, that manufactured herbicides, including Agent Orange and DDT, from 1951 until the plant closed in 1969.

The lawsuit contends the failure of the firms to properly cleanup the Passaic River from these discharges caused economic damage to the Newark Bay water complex.

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Named as “second party defendants” in the suit were Occidental Chemical, which bought Diamond Alkali in 1988; Tierra Solutions, which owns the plant site; Maxus Energy (formerly named Diamond Shamrock), Maxus International, CLH Holdings and four YPF affiliates in Argentina.

Maxus and Tierra, in turn, filed “third party claims” in 2009 against 300 entities, alleging they all were responsible for polluting the waters with spillage and sewage over the prior 80 years. Defendants include the State of New Jersey, the Port Authority of New York and New Jersey, public companies, the New Jersey Departments of Agriculture and Transportation, 75 municipalities and six sewage treatment authorities, including the Joint Meeting, of which Summit is a member.

Last July, New Jersey Superior Court Judge Sebastian Lombardi determined that Occidental was liable for the cleanup costs with Maxus Energy and Tierra and that the firms had to live up to an agreement to remove 200,000 cubic yards of river sludge.

A special master has been assigned to coordinate the case in which more than 200 law firms now are involved. Discovery began on May 9 of this year, and is expected to involve 80 years of documents that could produce 100 billion pages of text, according to a press release from Summit Common Council President Richard Madden.

According to the press release, legal cost estimates range to $5 billion with litigation lasting five years or more.

Estimates of the cleanup liability damages exceed $10 billion.

According to the press release, if half of the damages were levied against the 75 municipalities, who are not remotely liable, their costs would average $100 million each.

Tuesday’s resolution disapproved of the proposed scope of the litigation plan and the costs involved.

It urged the governor, the attorney general and the legislature to reduce the case scope and indemnify each of the 75 municipalities.

“Otherwise, the consequences could have devastating effects on municipalities that are strained now. This case could bankrupt and destroy several cities,” the resolution said.

Councilman Dave Bomgaars, the council’s representative to the Joint Meeting, voted against the resolution.

At the suggestion of Councilman Thomas Getzendanner, Madden agreed to see that the council’s feelings are conveyed to State Senator Thomas Kean, Jr., Assemblyman Jon Bramnick and Assemblywoman Nancy Munoz.

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