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Recently, both the New Jersey Department of Environmental Protection (NJDEP) and the New Jersey State Bar Association (NJSBA) filed amicus briefs asking the New Jersey Supreme Court to overturn an Appellate Division’s holding that a six-year statute of limitations applies to contribution claims under the New Jersey Spill Compensation and Control Act (“Spill Act”). Morristown Assocs. v. Grant Oil Co., 432 N.J. Super 287 (App. Div. 2013). These two briefs echo the arguments made by the Passaic River Coalition (the “Coalition”) in an amicus brief submitted and prepared by the attorneys at Lieberman & Blecher.
In its amicus brief, NJSBA focuses on the effects the Appellate Division’s holding would have on lawyers and the court system. The NJSBA argues that this decision would force attorneys to file lawsuits prematurely – or file suits that may have previously not been filed – in order to protect client’s rights and shield attorneys from malpractice claims, characterizing this outcome as an “unworkable quagmire”. The NJSBA brief also highlights the fact that the decision would undo decades of effective contribution claim resolution under the Spill Act without a statute of limitations.
In an argument mirroring the Coalition’s, the NJSBA reasons that, if the Supreme Court chooses to uphold the Appellate Division’s decision, it should only apply prospectively. The NJSBA notes that many potential claimants, relying on prior cases and the plain language of the Spill Act, have delayed filing suit until remedial activities were completed. Many of these potential claimants may now be time barred from bringing a contribution claim. The NJSBA also asks the Supreme Court to recognize the impact of the decision on environmental legal practitioners. Prior to the decision, it would have been reasonable for an attorney to counsel their clients to delay filing a claim under the Spill Act as there was no risk of losing the claim based on untimeliness. That advice may now prevent clients from recovering and expose the attorney to liability for malpractice.
The NJSBA also addresses when the six-year statute of limitations, if applicable, should begin to run. The Appellate Division held that, under the discovery rule, the statute of limitations begins to run when the contamination is, or should reasonably have been, discovered. In the NJSBA’s view, this holding will only serve to multiply the number of Spill Act claims. Under the Spill Act, a claimant must enter into a lengthy process whereby a clean-up plan is approved and remedial work begins. Consequently, the Morristown Assocs. decision puts parties in a position where they are forced to file suit based on mere estimated damages and against parties whom they are uncertain were involved in the contamination, rather than risk losing their right to contribution. The NJSBA proposes that, alternatively, the statute of limitations should not begin to run until any remedial activities are complete. In the NJSBA’s estimation, this would create more certainty for landowners and attorneys and also achieve the purpose of the Spill Act, i.e., holding the responsible parties liable for cleaning up their mess.
The NJDEP, by contrast, focuses its argument on the effects the decision would have on its efforts to encourage private parties to remediate contaminated sites. In its brief, the NJDEP expresses its concern that a six-year statute of limitations will make private parties who are currently cleaning up sites with little intervention by the NJDEP less willing to bear these costs, resulting in fewer remediated sites and a greater cost to the public rather than to the responsible parties.
The NJDEP argues that the plain language of the Spill Act makes it clear that the intent of the Legislature was to not include a statute of limitations in cleanup actions. They note that the Act spells out the only defenses to a contribution claim and a statute of limitations was expressly excluded. The NJDEP points to the fact that, in another part of the statute, the Legislature included a statute of limitations, which evidences that they contemplated statutes of limitations, but elected not to include it on the list of possible defenses. The Legislature maintained this position through two rounds of revision, despite the fact that the Spill Act’s federal analog, CERCLA, includes a statute of limitations.
The NJDEP also argues that the Appellate Division decision ignores its own precedent set in the case Pitney Bowes v. Baker Industries, Inc., 277 N.J. Super 484 (1994), which found that a statute of repose defense did not apply to contribution claims under the Spill Act and that “the imposition of any defense based on the passage of time would do violence to the purposes of this claim.” This rationale was later applied to a statute of limitations in Mason v. Mobil Oil Corp., 1999 N.J. Super Unpub. LEXIS 7 (App. Div. June 8, 1999).
Like the Coalition and the NJSBA, the NJDEP is concerned about what effect this six-year statute of limitations would have on the current process of remediation. The NJDEP worries that a statute of limitations would make landowners less inclined to take the financial risks associated with site remediation, leaving many sites contaminated that may have otherwise been cleaned up. The NJDEP notes that New Jersey has some14,500 active sites in their remediation program. Roughly 73% of these sites are being remediated by private entities. The NJDEP argues that the decision could shift the burden of cleanup costs associated with sites for which a contribution claim is time barred to the NJDEP, requiring the use of public money. According to the NJDEP, this decision will frustrate its duty to protect the public and defend natural resources and their ability to realize the purposes of the Spill Act.
The attorneys at Lieberman & Blecher, P.C., who regularly assist clients with environmental issues that arise in the context of site remediation and claims under the Spill Act, will be closely following the developments in this area. Our attorneys are highly experienced in areas of land use, real estate, redevelopment and regulatory permitting, compliance, and enforcement. We have assisted many property owners, both plaintiffs and defendants, in contribution actions under the Spill Act and our attorneys are poised to address the impact of this recent decision in present and future cases.