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This section contains the nature of the case and procedural background.

D operated the Legler landfill in a palpably unreasonable manner. Prior to 1971, D operated another landfill that was the subject of complaints by neighboring residents and at least one citation for violation of state regulations. D opened the Legler landfill in 1972. The Department of Environmental Protection (DEP) excluded liquid or soluble industrial wastes and limited the depth of waste deposits to a specific grade above the level of the groundwater. From the inception of the landfill's operation, D failed to monitor the quantity and types of liquid waste dumped at the landfill, and ignored its duty to control and limit the depth of the trenches in which wastes were deposited. There was substantial evidence that D disregarded the conditions imposed by DEP, and that D's negligent operation of the landfill resulted in chemical contamination of the groundwater in the area and the underlying aquifer. Ps offered expert testimony to prove that the chemical contamination of their wells was caused by D's improper operation of the landfill. Of the twelve identified chemicals, four were known carcinogens. Other potential toxic effects identified by the toxicologist included liver and kidney damage, mutations and alterations in genetic material, damage to blood and reproductive systems, neurological damage, and skin irritations. The toxicologist also testified about differences in the extent of the chemical exposure experienced by various plaintiffs. An expert in the diagnosis and treatment of diseases caused by exposure to toxic substances testified that the Ps required annual medical examinations to afford the earliest possible diagnosis of chemically induced illnesses. Her opinion was that a program of regular medical surveillance for Ps would improve prospects for cure, treatment, prolongation of life, and minimization of pain and disability. More than 150 Ps gave testimony with respect to damages, describing in detail the impairment of their quality of life during the period that they were without running water, and the emotional distress they suffered. Ps' testimony detailed their emotional reactions to the chemical contamination of their wells and the deprivation of their water supply, as well as their fears for the health of their family members. Expert psychological testimony was offered to document Ps' claims that they had sustained compensable psychological damage as a result of the contamination of their wells. No claims were asserted by Ps seeking recovery for specific illnesses caused by their exposure to chemicals. Rather, they claim damages for the enhanced risk of future illness attributable to such exposure. They also seek to recover the expenses of annual medical examinations to monitor their physical health and detect symptoms of disease at the earliest possible opportunity. The trial court granted D's motion for summary judgment dismissing the enhanced risk claim. It held that Ps' proofs, with the benefit of all favorable inferences, would not establish a 'reasonable probability' that plaintiffs would sustain future injury as a result of chemical contamination of their water supply. The trial court held that recognition of the enhanced risk claim would cause the jury to 'speculate * * * [as] to the future health of each plaintiff,' and raise 'the spectre of potential claims * * * increasing in boundless proportion.' It also held that future claims for injury attributable to exposure to contaminants in the water supply would not be barred by the statute of limitations. The jury verdict included damages of $8,204,500 for medical surveillance. The Appellate Division affirmed the dismissal of the enhanced risk claim, but characterized the trial court's observation that future claims for physical injury would not be barred by the statute of limitations as 'dictum only,' having 'no controlling significance to the future rights of the parties.' The Appellate Division reversed the claims for medical surveillance expenses because, like the claims for 'enhanced risk,' they were too speculative to warrant recognition under the Tort Claims Act. Both parties appealed.

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