February 05, 2015 Practice Points

NJ Supreme Court: No Time Limits to Spill Act Contribution Claims

The court's decision in Morristown Associates v. Grant Oil Co. once and for all closes the door on the statute-of-limitations defense.

Kevin J. Bruno and Kevin R. Doherty

Defendants can no longer assert a statute-of-limitations defense to claims of contribution under the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11, et seq. Following the recent unanimous decision by the New Jersey Supreme Court in Morristown Associates v. Grant Oil Co., a responsible party cleaning up a contaminated site can pursue claims against other potentially responsible parties without worrying that their claims may be time-barred. Simply put, there is no statute of limitations applicable to claims for contribution brought under the Spill Act.

Facts and Procedural History


In 1979, plaintiff Morristown Associates purchased a strip mall in Morristown, New Jersey, where one of the tenants, a dry-cleaning business, had installed an underground storage tank (UST). The dry-cleaning business was later sold and resold several times to different individuals. In 2003, when oil contamination was subsequently discovered in the soil surrounding the strip mall, it was determined that the contamination was linked to the dry cleaner’s leaking UST.

Morristown Associates took steps to remediate the property, and in 2006, filed Spill Act claims against one of the fuel companies that had serviced the UST, seeking contribution for costs related to the cleanup. Over the next three years, Morristown Associates filed three amended complaints, adding the owners and prior owners of the dry-cleaning business and several other fuel companies as additional defendants.

The defendants moved for summary judgment on the ground that the plaintiff’s contribution claims were time-barred by the general six-year statute of limitations for property-damage claims (N.J.S.A. 2A:14-1), arguing that the plaintiff should have been aware of the leaking UST by at least 1999, when another UST in the strip mall was investigated and found to be leaking. The trial court agreed and the Appellate Division affirmed, finding that because the Spill Act does not address a statute of limitations, plaintiffs in Spill Act cases must comply with the six-year statute of limitations applicable to general property-damage claims.  

The New Jersey Supreme Court’s Analysis


The Supreme Court began by looking at the history and purpose of the Spill Act, noting that the act was expressly amended to allow the party performing the cleanup to bring contribution claims against other potentially responsible parties to recoup the costs of the cleanup and removal.

Although the Spill Act is notably silent as to whether there is a statute of limitations for such contribution claims, the act does list several specific defenses for contribution defendants. In turn, the court focused on, among other things, the act’s provision specifying that a defendant shall have “only” those defenses to liability available to it under N.J.S.A. 58:10-23.11g(d), i.e., “an act or omission caused solely by war, sabotage, or God, or a combination thereof.” Recognizing that the Spill Act enumerates the only defenses available to contribution defendants, and that a statute of limitations defense is not included in the list, the Supreme Court found that the legislature could not have intended to permit the imposition of contribution liability on culpable dischargers to be frustrated by the imposition of a general and prior enacted, but unreferenced, statute of limitations. The court differentiated the statute-of-limitations defense from other unlisted defenses that should presumably be maintained, such as challenges to venue, service of process, and subject-matter jurisdiction, as those defenses are established by court rules under the jurisdiction of the supreme court, and are not subject to overriding legislation. Statutes of limitations, by contrast, are the product of the legislature.

The supreme court concluded that the plain text and a common-sense reading of the act supports this view, and that the construction adopted by the court “supports the longstanding view, expressed by the legislature and adhered to by the courts, that the Spill Act is remedial by design to cast a wide net over those responsible for hazardous substances and their discharge on the land and water of this state.”

Conclusion


The supreme court’s ruling is welcome news to responsible parties performing cleanup work, as they no longer have to fear losing the opportunity to sue other potentially responsible parties for contribution due to time constraints. The ruling is consistent with the Spill Act, which is designed to facilitate the cleanup of contaminated sites and hold dischargers responsible for such cleanups. It undoubtedly allows more contributing defendants to be brought into the cleanup process, as the court’s decision once and for all closes the door on the statute-of-limitations defense (unless, of course, the legislature amends the act).

 

Kevin J. Bruno and Kevin R. Doherty are with Blank Rome LLP in New York, New York.


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