MARC-PHILIP FERZAN ACTING ATTORNEY GENERAL of NEW JERSEY Richard J
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MARC-PHILIP FERZAN ACTING ATTORNEY GENERAL OF NEW JERSEY Richard J. Hughes Justice Complex 25 Market Street, PO Box 093 Trenton, New Jersey 08625-0093 Attorney for Plaintiffs By: John F. Dickinson, Jr. Deputy Attorney General (609) 984-4863 JACKSON GILMOUR & DOBBS, PC GORDON & GORDON 3900 Essex Lane, Suite 700 505 Morris Avenue Houston, Texas 77027 Springfield, New Jersey 07081 By: William J. Jackson, Special Counsel By: Michael Gordon, Special Counsel (713) 355-5000 (973) 467-2400 NEW JERSEY DEPARTMENT OF : SUPERIOR COURT OF NEW JERSEY ENVIRONMENTAL PROTECTION, LAW DIVISION - ESSEX COUNTY THE COMMISSIONER OF THE : DOCKET NO. ESX-L9868-05 (PASR) DEPARTMENT OF ENVIRONMENTAL PROTECTION and THE : Civil Action ADMINISTRATOR OF THE NEW JERSEY SPILL COMPENSATION : BRIEF IN SUPPORT OF FUND, PLAINTIFFS’ MOTION FOR PARTIAL : SUMMARY JUDGMENT AGAINST Plaintiffs, OCCIDENTAL CHEMICAL CORPORATION v. : AND MAXUS ENERGY CORPORATION OCCIDENTAL CHEMICAL : CORPORATION, TIERRA SOLUTIONS, INC., MAXUS ENERGY : CORPORATION, MAXUS INTERNATIONAL ENERGY : COMPANY, REPSOL YPF, S.A., YPF, S.A., YPF HOLDINGS, INC., YPF : INTERNATIONAL S.A. (f/k/a/ YPF INTERNATIONAL LTD.) and : CLH HOLDINGS, : Defendants. : MAXUS ENERGY CORPORATION AND TIERRA SOLUTIONS, INC., : Third-Party : Plaintiffs, : v. : 3M COMPANY, et al., : Third-Party Defendants. : TABLE OF CONTENTS TABLE OF AUTHORITIES ........................................................................................................... i PRELIMINARY STATEMENT .....................................................................................................1 FACTUAL SUMMARY .................................................................................................................3 A. DSCC Intentionally Discharged Dioxin, DDT and Other Hazardous Substances from the Lister Plant into the Passaic River. .........................................3 B. OCC Is DSCC’s Direct Successor by Merger. ........................................................8 APPLICABLE LEGAL STANDARD ..........................................................................................10 ARGUMENT .................................................................................................................................11 POINT I DSCC IS STRICTLY, JOINTLY AND SEVERALLY LIABLE UNDER THE SPILL ACT FOR ALL CLEANUP AND REMOVAL COSTS ASSOCIATED WITH ITS DISCHARGES OF HAZARDOUS SUBSTANCES INTO THE PASSAIC RIVER. ..........11 A. The Passaic River Is a Waterway of the State of New Jersey. ..............................12 B. DSCC and OCC Are “Persons” Within the Meaning of the Spill Act. .................12 C. DSCC “Discharged Hazardous Substances” into the Passaic River. .....................13 1. As a matter of policy, intent and design, DSCC “discharged” its waste chemical effluent into the Passaic River during the entire period of its plant operations. .....................................................................13 2. DSCC’s wastes and chemical effluent include “hazardous substances” as that term is defined under the Spill Act. ............................16 D. DSCC Is Liable for All Past and Future Cleanup and Removal Costs Associated With Its Discharges. ............................................................................17 POINT II OCC IS STRICTLY, JOINTLY AND SEVERALLY LIABLE FOR ALL CLEANUP AND REMOVAL COSTS ASSOCIATED WITH DSCC’S DISCHARGES OF HAZARDOUS SUBSTANCES INTO THE PASSAIC RIVER. ...........................................18 A. As the Merged Entity, OCC Is Strictly, Jointly and Severally Liable for DSCC’s Discharges to the Passaic River. ..............................................................19 B. OCC’s Recent Theory that Lister Plant Liabilities Were “Transferred” Out of DSCC Before Its Purchase Is Without Merit.....................................................23 1. As a matter of law, OCC/DSCC cannot absolve itself of liability to Plaintiffs by transferring that liability to a subsidiary. ..............................24 -i- 2. Even if it was possible for OCC/DSCC to absolve itself of liability to Plaintiffs by transferring that liability to a subsidiary, the purported transfer at issue failed to do so. .................................................26 POINT III OCC AND MAXUS ARE ESTOPPED FROM DENYING THE FACT OF DSCC’S INTENTIONAL DISCHARGES OF DIOXIN, DDT AND OTHER HAZARDOUS SUBSTANCES INTO THE PASSAIC RIVER. .................................................27 A. Plaintiffs Can Establish All of the Elements for Collateral Estoppel Under New Jersey Law. ....................................................................................................29 1. The issue to be precluded is identical to the issue decided in the Aetna Trial. ................................................................................................29 2. The issue of whether DSCC intentionally discharged dioxin and other hazardous substances into the Passaic River was actually litigated in the Aetna Trial. ........................................................................30 3. The Superior Court in the Aetna Trial issued a final judgment on the merits. ...................................................................................................32 4. The determination that DSCC intentionally discharged dioxin and other hazardous substances into the Passaic River was essential to the judgment...............................................................................................33 5. OCC, as DSCC, Was a Party in the Aetna Trial, and Maxus Was in “Privity” with DSCC..................................................................................35 B. None of the Restatement § 28 Exceptions to the Application of Collateral Estoppel Apply Here. .............................................................................................37 C. The “Considerations” in Restatement (Second) of Judgments § 29 Are, Likewise, Inapplicable. ..........................................................................................39 CONCLUSION ..............................................................................................................................43 -ii- TABLE OF AUTHORITIES Cases American Standard, Inc. v. Oakfabco, Inc., 907 N.Y.S.2d 98 (N.Y. Sup. Ct. 2008) ..............................................................................24 Baker v. Nat’l State Bank, 161 N.J. 220 (1999) ...........................................................................................................20 Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995) .....................................................................................................10, 13 Brotherton v. Celotex Corp., 202 N.J. Super. 148 (Law Div. 1985) ................................................................................18 Bussell v. DeWalt Products Corp., 259 N.J. Super. 499 ...............................................................................................19, 25, 27 City of Perth Amboy v. Madison Indus., Inc., 1983 N.J.Super. LEXIS 1111 (App. Div. 1983) ................................................................11 Dep’t of Envtl. Prot. v. Exxon Mobil Corp., 393 N.J. Super. 388 ...........................................................................................................11 Dep’t of Envtl. Prot. v. Ventron Corp., 94 N.J. 473 (1983) ...........................................................................................11, 20, 25, 27 Diamond Shamrock Chems. Co. v. Aetna Cas. & Sur. Co., 134 N.J. 481 (1993) .........................................................................................30, 31, 33, 34 Grant-Howard Assoc. v. General Housewares Corp., 472 N.E.2d 1 (N.Y. 1984) ..................................................................................................24 Gregory Marketing Corp. v. Wakefern Food Corp., 207 N.J. Super. 607 (Law Div. 1985) ..........................................................................28, 30 Haynes v. Kleinewefers & Lembo Corp., 921 F.2d 453 (2d Cir. 1990)...............................................................................................24 In re Estate of Dawson, 136 N.J. 1, 20-21 (1994) ..............................................................................................29, 33 In re Kimber Petroleum Corp., 110 N.J. 69 (1988) .............................................................................................................11 In Re Silicon Gel Breast Implants Products Liability Litigation, 837 F. Supp. 1123 (N.D. Ala. 1993) ..................................................................................24 -i- Kortenhous v. Eli Lilly & Co., 228 N.J. Super. 162 ......................................................................................................28, 40 Lacey Mun. Utils. Auth. v. Dep’t of Envtl. Prot., 369 N.J. Super. 261 ............................................................................................................38 Lincks v. Erie R. Co., 97 N.J.L. 343 (1922) ..........................................................................................................23 Longobardo v. Chubb Ins. Co., 234 N.J. Super. 2 ................................................................................................................38 Matthews v. Bay Head Improvement Ass’n, 95 N.J. 306 (1984) .............................................................................................................12 Maxus Energy Corp. v. Occidental Chemical Corp., 244 S.W.3d