Division of Law Litigation Efforts Brought in $189-Million-Plus In Settlements, Judgments and Collections in 2016

Monies obtained through litigation included settlements and judgments resulting from lawsuits alleging consumer, securities and other fraud, environmental cases, taxation matters and other types of affirmative litigation and debt recovery actions. Litigation-related payouts by the State in 2016 totaled approximately $87.8 million.

Attorney General Porrino credited DOL attorneys for their dedication and continued commitment to litigation excellence on behalf of New Jersey citizens.

“Our Division of Law attorneys continue to provide a consistently high level of representation in every facet of the legal mission – including defense of State statutes, advice to client agencies, and the handling of a wide range of litigation matters, many of them complex or highly sensitive,” Porrino said. “On a daily basis, our DOL lawyers are working here in Trenton and throughout New Jersey on issues that truly matter – from protecting children to preserving our environment, and from safeguarding consumers to safeguarding civil rights. Simply put, the results obtained by our DOL attorneys impact the lives of countless New Jersey residents every day.”

Noteworthy settlements and judgments obtained by DOL in 2016 included:

Coastal Eagle Point (MTBE Litigation): The State entered into a settlement agreement worth a total of $21.2 million in 2016 that resolved MTBE litigation against defendant Coastal Eagle Point Oil Co.

Acting on behalf of the Department of Environmental Protection (DEP), DOL attorneys previously had filed suit against numerous oil and chemical companies for causing damage to New Jersey’s groundwater by manufacturing, blending and distributing the gasoline additive MTBE (Methyl Tertiary Butyl Ether.) More settlements in the MTBE litigation are anticipated in 2017. Defendants in the case include major petroleum refiners, distributors and sellers of gasoline in New Jersey, as well as independent chemical manufacturers of MTBE.

Perini Corp.: In April 2008, the State filed a lawsuit against the nationwide general contracting firm Perini Corp., as well as numerous other parties involved in the design and construction of the Southwoods State Prison in Bridgeton, Cumberland County. The lawsuit sought to recover damages related to alleged deficient design and construction of a hot water system built as part of the multi-phased prison facility project. After trial briefing and appeals on the issue, the parties engaged in extensive settlement negotiations to resolve the State’s claim. The eventual settlement, finalized in 2016, resulted in payment of $11.2 million to the State.

South Brunswick Asphalt: In 2016, DOL attorneys finalized a settlement with officials of the former South Brunswick Asphalt Co. that resolved a groundwater contamination lawsuit brought by the Department of Environmental Protection in 2002. The $10 million settlement addressed contamination at an industrial site off Route 37 in Manchester Township, Ocean County, where for many years asphalt manufacturing processes resulted in the unlawful discharge of chemicals that eventually polluted nearby potable water wells. The chemicals included benzene, styrene toluene, xylene, trichloroethane, trichloroethylene and dichloroethylene.

Palmco Power NJ: Third-party energy suppliers Palmco Power NJ and Palmco Energy NJ agreed to pay the State $786,254 to resolve allegations they engaged in aggressive and deceptive marketing practices and failed to provide what they promised to consumers – energy rates that were competitive, lower than utility company rates or consistent with the pricing mechanisms contained in Palmco’s contracts. The settlement included a requirement that New-York-based Palmco pay up to $4.5 million in restitution to consumers, and that Palmco significantly revise its business practices.

Hyundai and Kia: DOL attorneys were part of the national Executive Committee that negotiated an overall $41.2 million, multi-state settlement with auto makers Hyundai and Kia in 2016. The settlement resolved allegations that Hyundai and Kia misrepresented the fuel economy ratings for certain of their model year 2011, 2012 and 2013 vehicles. The exaggerated fuel economy estimates were put forth at a time when gasoline prices in New Jersey and across the nation were especially high. New Jersey received $1.7 million as a result of the settlement.

B&K Masonry & Chimney: Through DOL efforts on behalf of the Division of Consumer Affairs, an unscrupulous contractor who induced consumers into paying for chimney repairs that were never finished was barred by a Superior Court Judge from any future home improvement work in New Jersey. The same contractor also was ordered to pay the State $1.1 million. Leroy N. Brown – doing business as B&K Masonry & Chimney of New York — was found by the court to have committed more than 400 violations of New Jersey consumer protection laws and regulations. Among other things, Brown was accused of falsely representing himself as a registered contractor in New Jersey, and of using dire warnings about health and safety risks to induce consumers – most of them elderly — to sign up for expensive chimney repairs that were either botched or not completed. In at least one case, the members of a family reportedly had to flee their home because of high carbon monoxide levels detected after Brown did chimney liner work there.

Bristol-Myers Squibb: Drug manufacturer Bristol-Myers Squibb agreed to pay New Jersey, 42 other states and the District of Columbia a total of $19.5 million to resolve allegations the company used false and misleading representations to promote its antipsychotic drug Abilify. Under the agreement, New Jersey received $468,661. Bristol-Myers Squibb also agreed to implement marketing, sales, disclosure and other reforms aimed at avoiding recurrence of the conduct at issue. Among other things, Bristol-Myers Squibb was accused of improperly promoting Abilify for off-label uses – uses not approved by the federal Food and Drug Administration. The company also was accused of making unsupported efficacy claims about the drug, and of failing to clearly disclose risks associated with taking it.

In addition to monies obtained through settlements and judgments in 2016, DOL also successfully collected more than $10.9 million through post-judgment collection actions on behalf of various State agencies including the Division of Taxation, the Department of Labor and New Jersey Transit.

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