NJ Supreme Court Declares No Statute of Limitations Defense in Contribution Actions under State’s Cleanup Law

Posted on January 30, 2015 by David B. Farer

On Monday, January 26, 2015, the New Jersey Supreme Court issued its opinion in Morristown Associates, a closely watched case on the potential applicability of the state’s general 6-year limitations period to actions by contribution plaintiffs under the state’s strict, joint and several liability cleanup law, the Spill Compensation and Control Act (commonly referred to as the “Spill Act”).

The Court found no such applicability, and declined to impose a limitations period for commencement of Spill Act contribution actions.

The Spill Act itself expressly provides private parties with a powerful statutory cause of action to seek recompense from others (known as “contribution defendants”) for costs incurred in cleaning up and removing discharges of hazardous substances.  Defenses are statutorily limited to those set forth in the Spill Act, such as acts of war, sabotage and God.  The Spill Act does not articulate a limitations period within which aggrieved parties must commence contribution actions.

Lower state courts had differed on the question of imposing a Spill Act limitations period, and decisions of the federal district court in New Jersey had applied New Jersey’s general 6-year statute, noting that this would be consistent with the approach under CERCLA --  the federal Superfund law -- which does impose limitations periods.  In the trial court and appeals court decisions in Morristown Associates, both of the lower courts had found the state’s general 6-year period to be applicable.  The trial court further held that the 6-year limitation period commenced at the point when the contribution plaintiff should have discovered through investigation that it had the basis for a Spill Act claim, another point that the Appellate Division affirmed.

Focusing on the plain language of the Spill Act, and the legislature’s express statements of intent as set forth in the law, the Supreme Court rejected application of any limitation period.  The Court particularly looked to the restricted set of defenses under the law, and the verbiage that contribution defendants are to be afforded “only” those defenses. 

The Court found that the plain text of the Spill Act supports the legislature’s intention to include no statute of limitations defense, noting that “the Spill Act is remedial legislation designed to cast a wide net over those responsible for hazardous substances and their discharge on the land and waters of this state.”

The Court also saw “no reason to interpose in these factually complex cases a new requirement to determine when one knew of a discharge in order to afford the remediating party the contribution right that the Spill Act confers as against all other responsible parties.  We decline to handicap the Spill Act’s intentionally broad effect in such manner.”

The Appellate Division’s judgment was reversed, and the case remanded.



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