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New Jersey Assembly unanimously passes bill broadly allocating liability and damages for hazardous substance discharges from offshore drilling platforms

Source: http://www.lexology.com, May 20, 2015
By: Alexander J. Bandza, Jenner & Block

Last week, the New Jersey Assembly unanimously passed a bill, A4258, which is notably broad in its language on allocating liability and damages for releases of hazardous substances from offshore drilling platforms.  The bill would supplement N.J.S.A. 58:10-23.11, the New Jersey Spill Compensation and Control Act, which defines hazardous substances to include petroleum and petroleum products.  The bill sets out that potentially liable parties include “[a]ny person who discharges a hazardous substance from a drilling platform” or “is in any way responsible for a hazardous substance that is discharged from a drilling platform.”  (Emphasis added.)  This discharge need not occur within the jurisdiction of New Jersey so long as the hazardous substance eventually “enters the waters of the State.”  Persons that meet the above two conditions are “strictly, jointly and severally [liable], without regard to fault,” for:

  • “cleanup and removal costs”;
  • “damages for injury to, destruction of, loss of, or loss of use of natural resources, including costs of assessing the damage”;
  • “damages for injury to, or economic losses resulting from, destruction of real or personal property”; and
  • “damages for loss of profits or impairment of earning capacity due to the injury, destruction, or loss of real or personal property, or natural resources.”

Furthermore, the bill explicitly preserves any liability that might arise under “any other State law, or rule or regulation, or federal law.”  The bill likely reflects the sentiment of the New Jersey tourism and fishing industries, among others, about the effects of any spill on their industries, as well as environmental concerns over harms to natural resources.  Concerns about these effects have been heightened since the U.S. Bureau of Ocean Energy Management gave the green light earlier this year to allow seismic testing for oil and gas off the Atlantic Coast.  It will be interesting to see the progression of this bill considering that Gov. Chris Christie has repeatedly opposed any drilling off the New Jersey coastline.
A copy of the bill is available here.

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