Attorney Gen. v. The Dow Chem. Co.

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ATTORNEY GENERAL OF THE STATE OF NEW JERSEY; NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION; THE COMMISSIONER OF THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION; THE ADMINISTRATOR OF THE NEW JERSEY SPELL COMPENSATION RMD; and ACTING DIRECTOR OF THE NEW JERSEY DIVISION OF CONSUMER AFFAIRS, Plaintiffs, v. THE DOW CHEMICAL COMPANY, VIBRANTZ CORPORATION f/k/a FERRO CORPORATION, LEGACY VULCAN LLC f/k/a VULCAN MATERIALS COMPANY, and “ABC CORPORATIONS” 1-10 NAMES FICTITIOUS, Defendants.

Civil Action No. 23-02449 (RK) (JBD)

United States District Court, D. New Jersey

April 23, 2024

NOT FOR PUBLICATION

OPINION

ROBERT KIRSCH, UNITED STATES DISTRICT JUDGE

THIS MATTER comes before the Court on Plaintiffs'^[1] Motion to Remand to state court under 28 U.S.C. § 1447(c). (ECF No. 72). Defendant The Dow Chemical Company (“Dow”) opposed Plaintiffs' Motion, (ECF No. 73), and Defendants Legacy Vulcan, LLC f/k/a Vulcan Materials Company (“Vulcan”) and Vibrantz Corporation f/k/a Ferro Corporation (“Vibrantz”) joined Dow's opposition, (ECF Nos. 79, 80). Plaintiffs replied. (ECF No. 84.) The Court has carefully considered the parties' submissions and decides the motions without oral argument pursuant to Federal Rule of Civil Procedure 78(b) and Local Civil Rule 78.1(b). For the reasons set forth below, the Court GRANTS Plaintiffs' Motion to Remand this case to Superior Court of New Jersey Law Division, Mercer County.

I. BACKGROUND

A. Procedural History

Plaintiffs in this case include the Attorney General of the State of New Jersey (“Attorney General”), and the New Jersey Department of Environmental Protection (“DEP”). Under the Public Trust Doctrine, the State is the “trustee of all natural resources within its jurisdiction for the benefit of its citizens,” and DEP is vested with the authority to seek compensation for injuries to New Jersey's natural resources. (Complaint, ECF No. 1-2 ¶ 16 (citing N.J.S.A. § 58:10-23.1 la; N.J.S.A. § 13:lD-150(b)).) Additional plaintiffs are the Commissioner of DEP, the Administrator of the New Jersey Spill Compensation Fund, and the Acting Director of the New Jersey Division of Consumer Affairs. (Id. ¶¶ 18-19 (citing N.J.S.A. § 58:10-23.llj; § 52:17B-120, -124).)

On March 23, 2023, Plaintiffs sued Defendants in the Superior Court of New Jersey, Law Division, Mercer County. Plaintiffs brought claims for defective design, failure to warn, negligence, public nuisance, trespass, impairment of the public trust, and violations of the New Jersey Spill Compensation and Control Act (the “Spill Act”), N.J.S.A. § 58:10-23.11 et seq. Plaintiffs also brought claims for violations of the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56:8-2 et seq against Dow and Vulcan. (Id. ¶¶ 95-236). The State's Complaint focuses on industrial and other private use and disposal of 1,4-dioxane stabilized products. (Id.) For purposes of its Complaint, the State defines natural resources of the State as including “all land, fish, shellfish, wildlife, biota, air, water, and other such resources owned, managed, held in trust, or otherwise controlled by the State” as well as the “waters of the State,” which include “the ocean and its estuaries, all springs, streams, and bodies of surface water or groundwater, whether natural or artificial, within the boundaries of this State or subject to its jurisdiction.” (Id. ¶¶ 66-67 (citing N.J.S.A. § 58:10-23.11b; § 58:10A-3(t)).) The State's definition of natural resources does not include “those natural resources on or underlying federally owned property, such as military facilities.” (Id. ¶ 68.)

On May 3, 2023, Defendant Dow, with the consent of the other Defendants, removed this case from state court, raising four independent grounds for federal jurisdiction. (Notice of Removal (“NOR”), ECF No. 1.) On August 14, 2023 the Plaintiffs filed a Motion to Remand (“MTR”) this action, Dow opposed (joined by the other Defendants) (ECF No. 74),^[2] and Plaintiffs replied (ECF No. 84). Certain exhibits, Dow's Opposition to the MTR, and Plaintiff's unredacted reply were sealed by Magistrate Judge J. Brendan Day on February 29, 2024.^[3] (ECF No. 85.)

B. Factual Allegations

This case is brought by the State of New Jersey concerning the ongoing impact of the synthetic industrial chemical 1,4-dioxane on New Jersey's natural resources, particularly its ground water and waterways. (Complaint, ¶¶ 1-3.) 1,4-dioxane is a “likely human carcinogen” that has been associated with liver, gall blader, and other cancers, is “known to cause liver and kidney damage,” and is otherwise “[h]ighly toxic and extremely persistent in the environment.” (Id. ¶¶ 5, 30.) 1,4-dioxane does not occur naturally in the environment. (Id. ¶ 30.) The State alleges Defendants are “designers, manufacturers, marketers, and sellers of 1,4-dioxane and certain industrial and commercial products containing 1,4-dioxane.” (Id. ¶ 1.)

1,4-dioxane was “used primarily as a stabilizer for chlorinated solvents, particularly 1,1,1-trichloroethane (“TCA”)” largely from the 1950s through the 1990s. (Id. ¶ 4.). TCA was “used to dissolve oil and grease from metal in industrial settings.” (Id. ¶ 32.) Approximately 90% of manufactured 1,4-dioxane was incorporated into TCA. (Id.) The 1996 Montreal Protocol, an international treaty designed to protect the ozone layer, “banned TCA for its role in depleting the ozone layer.” (Id.) Limited use of TCA continued after the Montreal Protocol was put in place, and manufacturing of 1,4-dioxane continued. (Id.) In the United States, 1,4-dioxane was primarily manufactured by Defendants Dow and Vibrantz. (Id. ¶ 31.) The technology for 1,4-dioxane stabilization of TCA was owned and licensed by Dow, and licensed by Vulcan from Dow. (/d ¶ 33.)

The primary uses for 1,4-dioxane products-i.e. vapor degreasing and other forms of metal cleaning-“resulted] in concentrated amounts of 1,4-dioxane.” (Id. ¶ 48.) The use of degreasing equipment resulted in concentrated 1,4-dioxane because 1,4 dioxane “boils at a higher temperature than TCA” which means that during vapor degreaser operations “a relatively high proportion of 1,4-dioxane remains as a liquid.” (Id.) Further, the process of vapor degreasing releases TCA into the atmosphere, and requires the operator continually add TCA to the tank. (Id.) TCA was typically stabilized by between 2.5% and 4.5% 1,4-dioxane by weight. (Id.) Because the 1,4-dioxane remained in the tank as a liquid while the TCA itself evaporated into the atmosphere, “the ending concentration of 1,4-dioxane was often as high as 15% to 25%.” (Id.) The state alleges much of the waste TCA from vapor degreasers “were often disposed of as ordinary products (e.g. down drains and into sanitary landfills) even though they had toxic and hazardous properties, where they then migrated into surface water and groundwater.” (Id.) In short, the use of degreasing equipment resulted in the release of concentrated 1,4 dioxane waste into the environment. (Id. ¶ 47.)

Once disposed of, “l,4-[d]ioxane has characteristics that have resulted in extensive and persistent contamination of New Jersey's natural resources.” (Id. ¶ 34.) 1,4-dioxane is (1) mobile, and readily transported through soil into water; (2) miscible-i.e. it is totally water soluble and can travel long distances once it accesses a body of water; and (3) persistent, and does not readily biodegrade or chemically degrade either in the environment or in conventional water treatment systems. (Id.)

The State further alleges,

once it was discharged, disposed of, or otherwise released into New Jersey's environment, 1,4-dioxane migrated through soils or other sediments into surface water and groundwater, where it now either contaminates and injures other natural resources, or persists in and continuously injures the water, resisting natural degradation and proving difficult and costly to treat or remove. 1,4-Dioxane entered the State's water and other natural resources through, among other things, leaks and spills, onsite waste water treatment systems, landfill leachate, disposal sites, and industrial, commercial, and residential wastewater discharges.

(Id. ¶ 35.) The state's case focuses on 1,4 dioxane that reached groundwater from TCA-related industrial uses “primarily because degreasing operations were characterized by inefficient solvent recapture and disposal systems that did not protect against 1,4-dioxane releases.” (Id. ¶ 49.) Users of the chlorinated solvents, including TCA, “routinely disposed of waste solvents by pouring them onto the ground or into trenches for evaporation or burning.” (Id. ¶ 50.) Further, “leaks, spills, and typical disposal practices led to frequent and substantial releases from facilities using 1,4-dioxane compounds.” (Id. ¶49.)

The State alleges Defendants advised chlorinated solvent users to dispose of waste solvents “in ways that Defendants knew or should have known would inevitably result in 1,4-dioxane contamination of natural resources, including surface water and groundwater.” (Id. ¶ 51.) Defendants developed Chemical Safety Data Sheets (“CSDS”) and Material Safety Data Sheets (“MSDS”) that were “intended to advise the actual handlers and users of Defendants' chemicals about hazardous ingredients in their products, as well as proper handling and disposal methods.” (Id. ¶ 52.) The 1965 CSDS for TCA includes information about grades inhibited, or stabilized, by 1,4-dioxane. (Id. ¶ 53.) The CSDS stated TCA is “one of the least toxic of the chlorinated hydrocarbons” and did not provide any information related to the 1,4-dioxane or proper methods for removal or disposal. (Id.) In both the 1965 CSDS and subsequent MSDS and marketing literature, Dow and Vulcan advised users to use methodologies that they knew or should...