Diamond Alkali is one of the longest existing extensively contaminated sites listed on the U.S. Environmental Protection Agency’s National Priority List of polluted locations in need of remediation. Despite what some estimate to be the most expensive remediation of a polluted site in U.S. history, the actual work to clean up decades of industrial pollution from New Jersey’s Passiac River appears poised to finally begin. 

The EPA, however, has only arranged for $150 million of costs to be covered by 85 parties not considered the primary polluter, leaving open the question of how the funding chasm will be filled.

The New Jersey Monitor reported the Diamond Alkali Superfund Site was projected to have the most expensive remediation in the history of the superfund program, costing $1.8 billion. At the time, officials expected that the full cost of cleanup would be paid for by “the polluters.”

In the case of the Diamond Alkali Superfund Site, it appears that the EPA has not followed the commonly intended remediation practice under the Comprehensive Environmental Response Compensation, and Liability Act (CERCLA) by not first reaching a remediation agreement with the actor deemed primarily responsible for the pollution. CERCLA empowers the EPA to handle pollution sites caused by known or likely to have caused entities, otherwise known as Potentially Responsible Parties (PRPs), and finance cleanup.

In December, EPA Newswire reported that the EPA and the U.S. Department of Justice submitted a consent decree to the U.S. District Court for the District of New Jersey. The consent decree identified 85 parties liable for $150 million for the cleanup of the Diamond Alkali site, far short of the $1.8 billion expected to be needed.

The settlement did not include Occidental Chemical Corp. (OCC), now deemed the primarily responsible party to the pollution. OCC is the corporate successor to Diamond Alkali/Diamond Shamrock Co. OCC had assumed the primary role of negotiating with the EPA regarding the site’s study and remediation since at least the 1980s. 

"I can say right off the top that the settlement seems very low, particularly in light of the number of parties involved and the overall cost of the work," Michele Langa, who co-chairs a community group that advises the federal Environmental Protection Agency on the cleanup, told NorthNewJersey.com.

U.S. Rep. Bill Pascrell Jr. (D-N.J.), called the settlement "an important step." However, he warned that taxpayers should absolutely not foot the bill.

"Forcing our neighbors to mop up the messes of others would be adding insult to injury and that cannot happen," he said in a statement.

The Department of Justice extended the public comment period on the Diamond Alkali consent decree for 90 days and will be available for public review until March 22. It can be viewed on the department’s website.

According to the EPA, the Diamond Alkali Superfund site includes the former manufacturing facility at 80-120 Lister Avenue in Newark, New Jersey. 

Throughout the 1940s, Kolker Chemical Works Inc. used the site to produce Dichloro-diphenyl-trichloreothane (DDT) among other chemicals. Diamond Alkali Co. owned and operated the facility in the 1950s and '60s.

In addition to DDT, the facility was engaged in producing agricultural chemicals, including herbicides used in "Agent Orange," a defoliant chemical known for the birth defects it caused following its use in the Vietnam War. The pollution to the river was so extensive that the state of New Jersey prohibits consuming fish or shellfish from the Lower Passaic River and Newark Bay. 

“For about 30 years in the mid-20th century, Diamond Alkali and other companies manufacturing pesticides, herbicides, and even the chemical components to make Agent Orange treated the Passaic River as their go-to dumping ground for hazardous waste,” Sen. Bob Menendez (D-N.J.) said in October of 2021 following the announcement of the current cleanup plan.

According to Wastebits, PRPs generally fund about 70% of any Superfund cleanup activity and are obliged to pay for cleanup wherever possible. The difference, or when an entity could not pay, was financed by the Hazardous Substance Response Trust Fund (or "Superfund"). The trust fund reached $8.5 billion at its peak, but was depleted in 2003. 

Federal case law has established that under CERCLA, the government’s primary goals are to promote the prompt cleanup of hazardous waste sites and to see that the costs of cleanup fall to those responsible for the pollution.

When any number of parties are liable, and when PRPs fight the EPA on the extent to which they are liable, cost allocation can get messy. However, the Congressional Record of testimony from Sen. Robert Stafford (R-Vermont), the floor manager of the 1986 Superfund Amendments and Reauthorization Act (SARA) in the Senate, indicates that the clear intent of CERCLA was that the government should recover all costs of clean up from a primarily responsible party and subsequently allow that party to pursue other actors to cover portions of their liability.  

“The theory underlying Superfund’s liability scheme was, and is, that the Government should obtain the full costs of cleanup from those it targets for enforcement, and leave remaining costs to be recovered in private contribution actions between settling and nonsettling parties,” Stafford explained in 1986.

The responsible party initially identified by the EPA to initiate cleanup is empowered to go after other responsible parties by seeking contribution for those parties’ portion under the theory of joint and several liability embedded in the CERCLA statute. This is a private action between the PRPs that does not involve the government as a party.

Traditionally the EPA’s leverage in initiating cleanup at Superfund sites has been highly dependent on arming early settlors, or those initial companies considered primarily responsible for the pollution, with the right to seek contribution from other private parties down the line. 

Courts have further acknowledged the importance of this principle to the public interest: 

“In addition, the government has a serious disincentive to collude with later settlors to cut off the rights of prior settlors just to extract a higher second-round settlement in a single clean-up proceeding. It is the government that is the repeat player in the world of CERCLA clean-ups. Should the government develop a reputation for cheating early settlors, that would deter settlements in later clean-ups (and reduce the amounts early-round settlors are willing to pay) and hence, in the long run, hurt the government's interests.”