Developer Waits Too Long To File Consumer Fraud Case Agst Consultant for Failing to Identify PCB-Contaminated Concrete

During the real estate boom of the past decade, developers were hard-pressed to find aggregate for their projects. The time pressures posed by tight construction schedules, the enormous profits that contractors could make by shifting around demolition debris and of course the tendency for some aspects of the industry to be occupied by shady characters eventually conspired to expose the weaknesses of the regulatory programs governing solid waste

The poster child for the problems associated with the under-regulation of demolition  debris and fill material is the fiasco involving the deconstruction of the Ford plant in Edison, New Jersey. The lessons learned in this case will no doubt be relevant for other communities, states and developers dealing with abandoned auto plants.

The latest installment in this saga occurred last month when a federal district court reversed an earlier ruling and denied a request to add a consumer fraud case against a consultant in Ford Motor Company v Edgewood Properties, 2010 U.S. Dist. LEXIS 13086 (D.N.J. 12/10/10). In February 2004, Ford entered into a Remediation Agreement with the New Jersey Department of Environmental Protection ("NJDEP") in accordance with the requirements of the New Jersey Industrial Site Recovery Act ("ISRA").Ford contracted with MIG Alberici ("Alberici") to demolish the plant and use the concrete as on-site fill.

In November 2004, NJDEP approved a plan to demolish the plant and reuse crushed concrete at the Plant  provided that the crushed material did not contain unlawful concentrations of PCBs.However, after work began, Alberici realized that that there was more concrete than originally estimated and that  could be used at the site. As a result, Ford sought out buyers for the excess concrete. Ford and Edgewood Properties entered into a contract whereby Ford agreed to provide 50,000 cubic yards of concrete to Edgewood in exchange for Edgewood hauling it off the site. According to NJDEP requirements, concrete with PCB concentrations below 0.49 parts per million ("ppm") could be used for residential areas while concrete with concentrations between 0.50 ppm and 2 ppm could be use at commercial properties but concrete with PCB concentration above 2 ppm could not be reused for any purpose.In June 10, 2005,  Edgewood entered into a subcontract then with EQ Northeast, Inc. ("EQ"), a company that Ford used during the deconstruction Under the agreement, EQ was responsible for sampling crushed concrete. Edgewood, in turn, would then remove all crushed material that was suitable for residential use for reuse as aggregate at other residential development locations in the state. Apparently, the crushed concrete was supposed to be staged into stockpiles according to its PCB concentrations. Indeed, Edgewood later asserted in its lawsuit that in 2005 Golder Associates, Inc., Ford's environmental consultant, provided ELM, Inc., Edgewood's environmental consultant, with a memorandum that stated that only stockpiles of concrete  where the samples exhibited PCB concentrations suitable for residential use cleanup criteria were being staged for potential re-use at appropriate off-site locations while stockpiles where the samples exceeded the residential use criteria were being segregated and properly disposed off-site.

In June 2005, Edgewood discovered that the concrete that it had transported to seven residential development sites contained excessive levels of PCBs. Edgewood complained to Ford who commenced excavation and removal of the contaminated concrete from the various properties. The NJDEP then issued an administrative order ("AO") compelling Ford, Alberici and Edgewood to submit a response plan to completely excavate the sites of all contaminated material and for Edgewood to stop all construction on the contaminated properties. In 2006, Ford filed a lawsuit to recover its costs against Edgewater who, in turn, filed counter-claims against Ford as well as third-party claims against a number of parties including Golder and Arcadis, for for breach of contract, contribution,  negligent misrepresentation,and civil conspiracy.

In 2010, Edgewood filed a motion to amend its complaint to add a claim against Golder for violations of the New Jersey Consumer Fraud Act (NJCFA).  To prevail in a NJCFA claim, a plaintiff must establish that the defendant engaged in "unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of any material fact . . . in connection with the sale of advertisement of any merchandise or real estate. Edgewood alleged that Golder’s memos contained knowing misrepresentations that "Edgewood would receive crushed concrete not exceeding the residential or unrestricted use criteria

Because the request to amend the complaint had occurred after the statute of limitations for filing an NJCFA claim had expired, Edgewood had to show the court that it had not unduly delayed seeking to amend its pleadings.  The court initially granted Edgewood’s motion based on representations that of its counsel that the request to amend had been based on new information that had come to its attention. Golder filed a motion for reconsideration on the basis that the court had relied on erroneous information. Golder pointed out that the information that Edgewood alleged to be new was actually contained in Golder memos that Edgewood had possessed as early as December 2006 and that Edgewood had utilized when it pled the identical claim against Ford Motor Company in 2006. The court conclude that Edgewood has failed to provide any justification for waiting two years to assert the NJCFA claim when it had all of the information in its possession at the time if filed its original action against Golder. Accordingly, the court granted the motion for reconsideration and denied Edgewood’s request to assert the NJCFA count against Golder in 2008. Edgewood has also not provided this Court