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The regulated community breathed a collective sigh of relief when New Jersey's highest court released its decision today in Morristown Associates v. Grant Oil Co., -- NJ -- (2015), where it held that the state's general six-year statute of limitations is not applicable to private “contribution" lawsuits brought under the New Jersey Spill Compensation and Control Act (known as the "Spill Act"). Owners and operators of contaminated property in New Jersey have been awaiting this decision since the Appellate Division ruled, in 2013, that the limitations period did apply, upsetting a decades-long understanding to the contrary.
The Spill Act contains a provision allowing a private right of action, commonly called a “contribution" claim. It provides that a court may allocate the cost of cleaning up a contaminated site among multiple responsible parties using equitable considerations. There are many equitable considerations that are typically available as part of this analysis, including the amount of hazardous substances discharged, the length of ownership and/or operation, and the contaminants that are driving the cost of remediation. Private contribution cases under the Spill Act are a dominant means by which responsible parties can defray the cost of environmental clean ups. The traditional model (employed for decades in New Jersey) is one in which a party funding an environmental cleanup files a Spill Act contribution lawsuit against others who should also contribute because they are in some way responsible for the discharge of hazardous substances at the site.
The Spill Act statute itself has no express statute of limitations for bringing a contribution claim. For decades, property owners and others in the regulated community, as well as their lawyers, have labored under the impression that no such statute of limitations applied. The Appellate Division's 2013 decision to the contrary came as a surprise to the regulated community. In 2013, the intermediate appellate court found that parties had only six years to bring these claims, and its holding presented a problem for many in the regulated community because environmental cleanups often take much longer than six years to complete. This problem was eliminated today when the New Jersey Supreme Court reversed the Appellate Division finding.
In reaching its decision, the high court relied on the plain language and legislative history of the statute, finding no basis to impose a statute of limitations where none had existed before. The Court also noted that the Spill Act is “remedial” legislation, the impact if which would be diminished if an arbitrary limitations period were imposed. In concluding that no statute of limitations applies, the Court explained, "we do not unsettle a decades-long understanding in this State that no limitations period restricts contribution claims against responsible parties."
Today's decision clears the way for future environmental cost recovery actions that parties may have believed were time-barred following the Appellate Division's 2013 ruling. It is no longer a defense to an allegation of Spill Act responsibility to state that the contribution plaintiff is barred by New Jersey's catch-all statute of limitations. This allows property owners and others completing environmental investigation and remediation activities to proceed knowing that their potential claims against others who may have contributed to the contamination will not be barred. The decision removes one of the hurdles when a remediating party seeks to recoup the costs associated with an environmental cleanup in New Jersey.
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Lieberman & Blecher proudly represented the Passaic River Coalition in this case as a “friend of the court.”