EPA-devised Allocation Assigns 99.9% of Responsibility for Passaic River Contamination to Occidental Chemical Corporation

Group of companies reaches historic agreement with the United States to help resolve longstanding Passaic River Superfund case

Published on December 17, 2022

A group of more than 80 private and publicly-traded companies, most of whom are members of the so-called “Small Parties Group (SPG),” has reached a landmark agreement with the U.S. Environmental Protection Agency (EPA) to help fund cleanup of the Lower Passaic River in northern New Jersey, which is part of one of the largest and most contaminated Superfund sites in the country.

The SPG is comprised of parties that the U.S. alleges are minor contributors of contaminants to the Lower Passaic River. The settlement between the U.S. and these parties was predicated on the results of an EPA-sponsored allocation that found Occidental Chemical Corporation bears more than 99.9 percent of the responsibility for cleaning up the Lower Passaic River, which recent estimates suggest will cost nearly $2 billion. Occidental refused to participate in the EPA-sponsored allocation.

Instead of cooperating with the government and fulfilling its obligation to protect public health and the environment, Occidental opted to litigate the issue in separate judicial proceedings. In so doing, Occidental is attempting to escape accountability and shift responsibility for funding the cleanup to parties who had only minor roles in the River’s contamination.

The EPA settlement announced today marks a milestone in the River’s cleanup. For decades, Occidental’s corporate predecessors Diamond Alkali and Diamond Shamrock treated the Passaic River as their own personal sewer. Process wastes and off-spec product generated from the manufacture of the extremely toxic Vietnam-era defoliant Agent Orange at Diamond’s Lister Avenue plant in Newark were intentionally and illegally dumped straight into the River.

The Diamond Alkali Superfund Site was among the very first in history to be designated by EPA as a Superfund site for inclusion on the National Priorities List in 1984, following the discovery of 2,3,7,8-tetrachlorodibenzo-p-dioxin (2,3,7,8-TCDD) in sediment at and adjacent to Diamond’s Lister Avenue facility. A known byproduct of the manufacture of Agent Orange, 2,3,7,8-TCDD is one of the most toxic substances known to science.

EPA has attributed virtually all of the 2,3,7,8-TCDD present in Lower Passaic River sediments to Diamond’s former operations at the Lister Avenue facility. Several other hazardous substances found in River sediments have also been linked to former operations at the Lister Avenue facility, including DDT and other pesticides.

Under the terms of the settlement, in addition to the monies already spent to investigate and remediate portions of the River, the group of company parties has collectively agreed to pay $150 million to settle their purported liability stemming from historical contamination present in a 17-mile stretch of the Lower Passaic River between Dundee Dam and its confluence with Newark Bay. This settlement will help fund the remedies EPA has selected for the Lower Passaic River, all the while ensuring that cleanup efforts will not be unreasonably delayed any further by litigation.

“Today’s EPA announcement marks a definitive step in allocating and adjudicating responsibility for the contamination of the Passaic River,” explained Jeffrey Talbert, partner at Preti Flaherty, and liaison counsel to the SPG. “This Superfund case has languished through courts and regulatory processes for far too long, while the primary culprit sought more litigation and delays, with the ultimate goal of escaping accountability.

“Mountains of scientific data, accumulated through years and countless studies, clearly showed the principal actor, and documented what it did, to create one of the biggest environmental scars of our country,” Talbert said.

Today’s announcement by EPA also marks the culmination of more than four years of fact-finding, legal and technical evaluations and mathematical calculations through an EPA sanctioned and approved allocation methodology. This painstaking process was designed to characterize the nature and extent of Passaic River contamination, allocate responsibility, and devise a path toward remediation.

Following a 45-day public comment period, the settling parties will request the proposed settlement be approved and entered by the Federal District Court for the District of New Jersey.

Environmental Reporter