Environmental damage assessment a rarety for New Jersey

The manufacturer who abandoned a tainted thermometer plant - which reopened as the Kiddie Kollege day care without an environmental cleanup - was recently ordered to pay $4 million in damages and to share in the $2 million remediation of the Gloucester County site.

The court action taken against Philip J. Giuliano last month is rare in a state that has more than 14,000 contaminated sites.

Jeff Tittel, director of the N.J. chapter of the Sierra Club, said the last time the DEP took advantage of a 1977 law that allows the agency to collect damages against polluters was a decade ago. "Usually DEP will go after a polluter just to cover the cleanup costs, and that's done about twice a year," he said. "Ten years ago, it sued for damages in the Passaic River dioxin case and then settled recently for $145 million." The river, in North Jersey, contains high concentrations of dioxin, PCBs, and other toxins that were built up after more than 100 years of industrial dumping by various companies, according to the DEP and the federal Environmental Protection Agency.

That sum is expected to be deposited in a New Jersey environmental fund - along with the $6 million that could be collected in the Kiddie Kollege matter - to be used for future cleanups, said Tittel, who has been monitoring toxic sites for more than a decade.

"These were high-profile matters. What we've found is the higher the profile, the more likely the state is going to do the right thing." He said the DEP needs to be more aggressive in suing more polluters.

A DEP spokesman did not respond Friday to e-mailed questions asking for the number of polluters the agency has sued for damages in the last 12 months and for the amount collected to reimburse the state for cleanups.

The Kiddie Kollege case began with the discovery that about 100 infants and children were exposed to dangerous mercury vapors in their day-care center in Franklin Township between 2004 and 2006. Mercury vapors can cause brain and kidney problems, and health officials said the effect on children's developing brains was unknown. The story captured national attention and led to changes in state laws to better protect children from such exposure.

Giuliano, who had represented himself in the litigation, said "no comment" when reached by phone last week. During a trial five years ago to determine who was responsible for the cleanup, he sent a videotaped deposition in which he said that he was bankrupt and that he had notified the DEP he could not afford the remediation the agency had ordered.

But deputy attorney general Richard Engel said that a judge had denied Giuliano's bankruptcy application and that the state would have been willing to work with him on paying for the cleanup. Instead, Giuliano "just walked away" from the site, Engel said, leading the DEP to seek damages. To give the DEP some leverage against polluters, the 1977 Spill Act allows it to seek triple the cost of the cleanup when a site is abandoned.

Tittel praised the DEP for pursuing the action against Giuliano, saying the numerous shuttered toxic sites across the state increased the possibility that people could be exposed to lingering toxins. "This sends a clear message to polluters," he said.

The judge also held Jim Sullivan III and his wife, father, brother, two sisters, and other relatives liable for the cleanup of the thermometer plant. Sullivan, who had operated a real estate business next door, acquired the building from Franklin Township in a foreclosure action when taxes became delinquent. He had testified at the trial that he assumed a cleanup had taken place and then leased the building to the day-care operator.

Superior Court Judge Anne McDonnell ordered the Sullivans to contribute to the $2 million cleanup, saying they should have done their homework or, at the very least, listened to their attorney, who advised them to undertake an environmental assessment. She did not specify how the $2 million should be divided between the Sullivans and Giuliano.

Sullivan did not respond to calls for comment, but his lawyer said he would appeal.

The litigation, which began eight years ago and included a class-action lawsuit filed on behalf of the Kiddie Kollege children, is still before an appeals panel. Judge James Rafferty, now retired, had delivered a verdict in 2011 that held the state DEP, county, township, Giuliano, and the Sullivans negligent and then assigned amounts each party should pay into a $1.5 million medical-monitoring fund for the children. The government agencies had oversight over the day-care center but failed to protect the children from exposure to toxins, the judge said.

Before the verdict was rendered, the Sullivans and the day-care operator settled for $1 million. But now the Sullivans are suing to recoup legal fees and other expenses from Franklin Township, saying the municipality failed to warn them the building was contaminated before selling it at a tax sale.

The county also settled, agreeing to pay $300,000 toward the children's legal claims. But the township and state DEP are appealing the verdict, in which they were ordered to pay $525,000 and $150,000, respectively, for the children's monitoring. Jim Maley, who represents the township, has said Rafferty's decision could make the township vulnerable to future lawsuits by the children's parents if any file personal injury claims linking their exposure to a particular health problem. So far none, have been filed.

The attorneys who represent the children are also appealing rulings over the denial of a portion of the legal fees they requested.

Jim Pettit, lead attorney in the children's class-action suit, said he found DEP's recent announcement that it had won a "court victory" against Giuliano and the Sullivans ironic. "The state is saying we think it's appropriate for Giuliano and the Sullivans to pay for what happened at Kiddie Kollege, but the state is actively opposing a verdict that calls for it to pay into the children's monitoring fund," he said.