Reversing NJDEP Brownfield Act decision, NJ Appellate Court finds continuity of property ownership t

The New Jersey Appellate Court reversed NJDEP’s denial of Appellant’s request to receive a Hazardous Discharge Site Remediation Fund Innocent Party Grant (innocent party grant) to pay for remediation of Appellant’s Hanover Township property under the Brownfield and Contaminated Site Remediation Act (Brownfield Act). The innocent party grant pays for remediation of contaminated sites if the site owner did not discharge or use any hazardous waste on the site and if the owner “[is a person who] acquired the property … and continues to own the property until such time as the authority approves the grant…” NJDEP denied Plaintiff’s grant request based on the determination that Appellant, Cedar Knolls 2006, LLC, is 1) not a “person” and 2) not the same “person” that acquired the property – a requirement for qualification of the grant. In reversing, the court found that 1) the LLC qualifies as a “person” because “the substance of ownership and continuity [outweigh]… the technicalities of the legal form” and 2) that there was no change in ownership because the property was transferred through family trusts before ultimately, upon expiration of the trusts, being transferred to the LLC (which is solely owned by the beneficiary of the trust). In its analysis, the court looked to the plain language and legislative intent of both the Brownfield Act and of the Industrial Site Recovery Act as “part of a unified legislative strategy to address the remediation of contaminated sites.”

Cedar Knolls 2006, LLC v. New Jersey Department of Environmental Protection, 2017 WL 4158890 (N.J. Super. Ct. App. Div. Sept. 20, 2017).