I.

I.

INTRODUCTION

Claims to reclaim the value of lost use of natural resources fit to pollution, so-called "natural resource damages" or "NRD" have protracted been called the "sleeping giant" of environmental liability.1 High profile NRD recoveries, so as the nearly $1 billion NRD award against Exxon for the Exxon Valdez oil spill,2 have shown that NRD awards can reach giant proportions. However, not many NRD claims have been brought since they were first authorized by the agency of Congress in 1980,3 and industry came to believe that the giant was "asleep."4 That situation has changed in recent Jersey, where the Department of Environmental Protection ("NJDEP") has announced a major initiative to address more than 4000 claims5 and argue up to $950 million6 in NRD from 66 corporations.7 This may well herald similar programs in other states.

The question of whether modern Jersey's initiative marks the beginning of a nationwide stretch is important both to industry and its insurers for several reasons. First, NRD awards, while not many can exceed the multi-million dollar splendor of cleanups.8 Second, NRD claims have the potential to revive "closed" environmental claims and undermine the finality of arrangements with policyholders for sites that have been the make subordinate of past coverage litigation. Finally, of recent origin Jersey is historically a trend-setting state onward environmental issues and other states may come next suit if NJDEP is able to get back significant awards under its NRD initiative.

This article provides a brief overview and history of NRD claims and examines whether just discovered Jersey's current NRD initiative is likely to be the start of a nationwide incline section II examines the history, legal bases and ultimate parts of NRD claims, as well as several basic defense Section III discusses the treatment of NRD claims subordinate to established environmental coverage law and the efficiency of NRD claims on previously take downed settlements, releases and commutations between NRD defendants and their insurers. The final section assesses whether fresh Jersey's high profile NRD initiative signals the beginning of a nationwide trending

We conclude that the industry and insurers would be wise to monitor the progres of novel Jersey's NRD initiative, but that there is no clear indication that other jurisdictions will tread on the heels of New Jersey's lead. This is in part suitable to the appointment of a just discovered NJDEP commissioner and NJDEP's promise to issue just discovered NRD regulations for public elucidation The release of these regulations will likely be followed through extensive industry comment and, perhaps, litigation. Thus, novel Jersey's NRD enforcement program is likely to suffer significant changes over the nearest year, and other jurisdictions will likely wait to papal court how successful New Jersey is at collecting NRD penalties before devoting resources to beef up their confess programs.

II.

THE HISTORY AND NATURE OF NATURAL RESOURCE DAMAGE CLAIMS

A. The universal of Natural Resource Damages

NRD are intended to compensate the public for the los or impairment of natural resources.9 Natural resource damages consist of: (1) richnesss of restoring or replacing injured resources to a pre-contamination "baseline" condition; (2) compensation to the public for the reduction or elimination of the resources from the time of initial injury until integral restoration or replacement; and (3) any costlinesss of the NRD assessment itself.10

An NRD claim is fundamentally different from a traditional cleanup action in that it solicits to value and compensate for the los of "use" or "services" of a resource and not simply the cost of cleaning it up The valuing of "lost use" or "lost services" is a highly subjective exercise. Without the guidance of a market price, single can attempt to value the two "active" and "passive" uses." "Active uses" include "consumptive" uses, of the like kind as drinking water, eating fish, and harvesting lops "Non-consumptive" uses include activities like as swimming, hiking and camping.12 level harder to estimate are the more abstract "passive" or non-use values of missing resources. They include the value of knowing that a resource exists (so-called "existence value") and the knowledge that a resource is available for the public's use, flat if it is not used (the "resource" or "option value").13

The lack of a precise definition of what constitutes the "damage to" or "value of" a natural resource causes great disquiet in the wake of of the present day Jersey's NRD initiative. When a potentially responsible party ("PRP") receives a two-page "Notice of Intent to Initiate Litigation" from the novel Jersey Attorney General's Office, it cannot confess the size of the potential damages being sought PRP may be justified in believing that the canopy of heaven or more accurately the clod and water - as well as the value all of their actual and potential uses - are the limits.

B The Authority of Natural Resource Trustees across Trust Resources

Federal and state NRD claims are extensions of the customary law "public trust doctrine," pursuant to which the sway has the right to court damages to resources to which no individual retains title. Such resources are be of opinioned to be held by the sway in trust for citizens.14