Reducing Contingent Liability

There is an advantage to utilizing the Morris County solid waste disposal system from a contingent liability perspective.

An advantage that is difficult to quantify, but is nonetheless very substantial, arises from the use of the Morris County waste disposal system. Under federal and state environmental laws, the generator and arranger for the disposal of hazardous waste is jointly and severally liable for the clean up of any releases of such materials. In recent years, many Morris County municipalities have been joined in litigation regarding the clean up of landfills to which municipal waste was delivered a long time ago.

Exposure to such liability can be substantially reduced by the use of the MCMUA system for a variety of reasons. First, when the MCMUA selected the landfill for the disposal of Morris County’s waste it did so in accordance with exacting environmental due diligence standards and chose a facility with state of the art environmental safeguards. Additionally, the owner of the facility, Waste Management Inc., is one of the most prominent and financially viable solid waste companies in the country, if not the world, and has provided the MCMUA with an expansive indemnification of environmental liability.

Use of an identified landfill offering such protections is overwhelmingly safer than running the risk that the waste generated in the municipality may be disposed of at a variety of different landfills over the course of a year, or, for that matter, a month or even a week. Such scattered disposal practices may be the case with haulers who offer a deceptively attractive rate because they "play" the spot market. For a public body with significant financial resources to protect, such multiple exposure is especially dangerous, particularly given the magnifying impact of joint and several liability.

These contingent liability concerns are more important now than they have ever been. Historically, the exposure of municipalities to the financial impact of environmental litigation for solid waste disposal has been dulled by the benefits of liability insurance. Not only have insurance companies paid the settlements and judgements that have been awarded for the disposal practices of decades ago, but they have also paid the sometimes heavy cost of legal and engineering fees that accompany the defense of such litigation. In the future such expense will come directly from the municipal budget because insurance policies written since the mid-1980s explicitly exclude coverage of such claims.