|TRENTON – Acting Attorney General John J. Hoffman announced today that the Division of Law obtained litigation settlements and judgments on behalf of the State totaling more than $346 million in 2014.
The dollar amount obtained by the Division in 2014 represents $42 million more -- a 14 percent increase -- over the amount recovered in 2013.
Monies obtained on behalf of the State in 2014 included settlements and judgments resulting from environmental litigation, debt recovery, taxation matters, and lawsuits alleging consumer, securities and other fraud, as well as other types of affirmative litigation.
Acting Attorney General Hoffman credited Division of Law attorneys for their dedication and hard work, noting that they perform at a consistently high level in every facet of the Division’s mission – including advice to client agencies, defense of state statutes, and the handling of a broad array of legal matters, many of them highly sensitive or complex, or both.
”Attorneys in the Division of Law continue to do a fantastic job of handling affirmative litigation, defending New Jersey statutes and preserving the State’s vital environmental, economic and other resources,” said Hoffman. “While the total number of dollars recovered in any given year is affected by many variables, there is one constant -- the stellar quality of the legal work being done, day in and day out, by the Deputy Attorneys General and Assistant Attorneys General in the Division of Law.”
“The Division of Law is honored to serve its clients and the citizens of New Jersey,” said Division of Law Director Jeffrey S. Jacobson. “Through the work of some of New Jersey's best lawyers, we remain committed to pursuing monetary and other relief where New Jersey residents have been victimized, the State's resources have been compromised, or government programs have been misused or abused.”
Noteworthy outcomes obtained by Division attorneys in 2014 included:
- Occidental Chemical Corp. Settlement: In a major environmental settlement, the Occidental Chemical Corp. agreed to pay the State $190 million to resolve its liability for past cleanup and removal costs, natural resource damages and other costs and damages related to contamination of the Passaic River. The Occidental settlement was the third and final settlement in the Passaic River litigation, a series of lawsuits brought by the State in which it obtained costs and damages from multiple parties responsible for contaminating the river. Altogether, the State has recovered a total of $355.4 million from the three Passaic River litigation settlements, two of which were finalized in 2013. Occidental Chemical is a legal successor to Diamond Shamrock Chemicals Company. In a prior court proceeding, Diamond Shamrock was found to have intentionally dumped hazardous pollutants – including dioxins, a known carcinogen -- into the Passaic River. In 2011, a Superior Court Judge entered a judgment against Occidental Chemical holding it liable for certain of the State's Passaic-River-related clean-up and removal costs because of its status as legal successor to Diamond Shamrock.
- Route 22 Auto Sales, et. al, Settlement: Acting on behalf of the Division of Consumer Affairs, Division of Law attorneys obtained a $1.8 million settlement, plus consumer restitution, from eight auto dealerships and their two owners. The settlement resolved allegations of deceptive sales tactics including failure to disclose existing mechanical defects or past damage to used cars, charging for supplemental warranties and other costly “after-sale” items without customer consent, and failure to honor negotiated or advertised vehicle prices. The settlement addressed conduct that took place at the following dealerships: Route 22 Toyota, Route 22 Honda, Route 22 Nissan and Route 22 Kia, all of Hillside, Hackettstown Honda, Hudson Honda of West New York, Freehold Hyundai, and Freehold Chrysler Jeep.
- East Coast Title Services (Civil Penalties): Division lawyers obtained civil penalties totaling $1.8 million against East Coast Title Services, Inc. for violating the New Jersey Insurance Producer Licensing Act. Violations included the comingling of premium funds with personal funds, the misappropriation of premium funds on 87 title policies, failure to issue more than 65 title policies, failure to submit required monthly reports, and failure to cooperate with a Department of Banking and Insurance (DOBI) investigation.
In addition to imposing significant financial penalties, DOBI revoked the insurance producer licenses of East Coast Title Services and ordered payment of more than $50,000 in restitution. East Coast Title Services did not respond to the charges.
- GlaxoSmithKline Settlement: In June 2014, New Jersey received approximately $2.45 million as a result of its participation in a multi-state settlement with GlaxoSmithKline, LLC that resolved allegations the company unlawfully promoted its asthma drug Advair, as well as its antidepressant drugs Paxil and Wellbutrin, for unapproved uses in violation of consumer protection laws, including New Jersey’s Consumer Fraud Act. In addition to the monetary terms of settlement, GlaxoSmithKline agreed to implement a number of reforms in its marketing and promotion of products, including refraining from making claims about product efficacy not supported by substantial evidence or substantial clinical experience.
- Point Roll Settlement: New Jersey led a multi-state Internet privacy investigation that yielded a $750,000 settlement agreement with Gannett-owned digital advertising and technical services company PointRoll, Inc. The investigation concerned whether Point Roll violated consumers’ privacy by unlawfully circumventing the privacy settings in Apple Inc.’s Safari Web browsers. New Jersey and the other participating states alleged that Point Roll unlawfully deployed a browser circumvention technique that allowed it to place browser cookies on consumers’ Safari Web browsers despite privacy settings configured to “block cookies from third-parties and advertisers.” (Cookies are small files set in Internet users’ Web browsers that allow advertisers to gather information about those users including, depending on the type of cookie, their Web surfing habits.) New Jersey’s share of the settlement was approximately $200,000.
- Conrail Taxation Settlement: Division attorneys negotiated the settlement of a multi-year franchise tax dispute with Conrail, whereby Conrail agreed to pay the State $2.8 million. The agreement resolved a litigation matter in which Conrail had challenged the allocation factor used to apportion its income. The dispute centered on Conrail’s assertion that, under the applicable statute, apportionment should be based on track miles actually used, and the State’s position that apportionment should be based on the total number of track miles over which Conrail has trackage rights.
- National Envelope Settlement (Additional Recovery): In 2014, the Division obtained an additional $1 million recovery in an environmental litigation matter involving a contaminated former industrial property in Union Township.
The property at issue was the former site of manufacturing operations for the National Envelope Corporation. In total, the Division has now brought in approximately $3.7 million in relief from the National Envelope matter. Specifically, the U.S. Bankruptcy Court for the District of Delaware previously authorized payment of $1.4 million to the New Jersey Department of Environmental Protection (DEP) for future clean-up at the site. A developer also agreed to perform a $1.3 million cleanup at the property, so it could be developed for future housing. That work was completed in 2013. In 2014, Division of Law attorneys negotiated an additional payment of $1 million from Linde, a prior owner of the property and another responsible party, as part of the settlement of private federal court litigation that DEP was asked to join. The additional $1 million also will be used by DEP for clean-up of the National Envelope property, which is contaminated with chlorinated solvents in the soil and groundwater, and with heavy metals (lead and arsenic) in the soil.