February 2015
Practice Group:
Environmental, Land
and Natural
Resources
New Jersey Supreme Court Rules Unanimously:
There is No Statute of Limitations Defense to
Contribution Actions Under the Spill Act
By Brian S. Montag and Emily S. Tabak
On January 26, 2015, the New Jersey Supreme Court unanimously ruled in Morristown
Associates v. Grant Oil Co. 1 that the general six-year statute of limitations for injury to real
property 2 does not apply to contribution claims under the New Jersey Spill Compensation
and Control Act (Spill Act). 3 The Spill Act is silent on the issue of a statute of limitations
applicable to contribution actions, and explicit that the only defense to liability is “an act or
omission caused solely by war, sabotage, or God, or a combination thereof.” 4 The Court
was clear that it would not add a time-bar defense to this enumerated list based on an
inference; as a result, there is no statute of limitations on Spill Act contribution claims.
Factual background
Plaintiff Morristown Associates is the owner of a strip-mall shopping center, Morristown
Plaza, which includes Plaza Cleaners, a dry-cleaning business, among its tenants. 5 In 1978,
the dry cleaner installed an underground fuel oil storage tank to operate its steam boiler, and
in 2003, a well installed near the storage tank revealed fuel oil contamination that was traced
to the storage tank’s severely deteriorated fill and vent pipes. 6 It was estimated that the
damage had developed as early as 1988, causing oil to leak from the pipes each time the
tank was filled by heating oil supply companies approximately once per month. 7
Between 2006 and 2009, plaintiff filed suit against various defendants, including heating oil
companies, pursuant to the Spill Act, which prohibits the discharge of hazardous substances,
provides for the cleanup of that discharge, and imposes joint and several liability on the
responsible parties. 8
The trial court granted defendants’ summary judgment motions, holding that the general sixyear statute of limitations for injury to real property applied to Spill Act contribution claims,
and as such, claims against defendants for damage that occurred more than six years before
that defendant was brought into the case were time-barred. 9
1
(A-38-13 (073248) (N.J. Jan. 26, 2015).
N.J.S.A. 2A:14-1.
3
N.J.S.A. 58:10-23.11f(a)(2)(a).
4
N.J.S.A. 58:10-23.11f(a)(2)(a), incorporating N.J.S.A. 58:10-23.11g(d).
5
Morristown slip op. at 5.
6
Morristown slip op. at 6-7.
7
Morristown slip op. at 7.
8
Morristown slip op. at 4, 8.
9
Morristown slip op. at 9.
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New Jersey Supreme Court rules unanimously: there is no statute of
limitations defense to contribution actions under the Spill Act
Legislative background and intent
The Court observed that the Spill Act’s basic liability structure originally contemplated that
most hazardous discharge cleanup actions would be conducted by the New Jersey
Department of Environmental Protection (DEP), with a strictly liable Spill Fund to finance the
prevention and clean up of hazardous discharges and to provide for damages against
owners and operators of major facilities or vessels, without regard to fault. 10
By 1991, the statute had been amended to provide joint and several strict liability to any
person who has discharged a hazardous substance, or is in any way responsible for any
hazardous substance, without regard to fault, for all cleanup and removal costs, no matter by
whom incurred.11 Further, the Spill Act expressly allows those who have entered into an
agreement with DEP to remove a hazardous discharge the right to seek contribution from
responsible parties. 12
These changes meant that any responsible party, even if only partially responsible, could be
required to pay the entire cost of the clean up.13 The reality was that, instead of the DEP
conducting most cleanup actions with damages through the Spill Fund, there was, instead, a
prevalence of private parties undertaking remediation actions through an agreement with
DEP, and directly seeking contributions from other responsible private parties. 14
The Court’s decision and reasoning
The 1991 amendment to the Spill Act, which provides a contribution right for defendants,
states: “the contribution defendant shall have only the defenses to liability available to parties
pursuant to [the statute, namely: ‘an act or omission caused solely by war, sabotage, or God,
or a combination thereof’]”. 15
The Court emphasized that neither this provision, nor any other provision in the Spill Act,
sets forth a statute of limitations applicable to contribution actions. 16 Further, by stating that
a contribution defendant shall have only the previously listed defenses, the Court found that
the legislature had made an express restriction and had not simply been silent as to a statute
of limitations defense. 17
As a result, the Court refused to add a statute of limitations to the Spill Act where it was not
already included in its list of identified defenses. 18
10
Morristown slip op. at 19–21.
Morristown slip op. at 23 (emphasis added).
12
Morristown slip op. at 26.
13
Magic Petroleum Corp. v. Exxon Mobil Corp., 218 N.J. 390, 402 (N.J. 2014).
14
Morristown slip op. at 25; see also id. at 17 (noting that as a practical matter, cleanup duties have shifted from DEP to
private parties, and it is estimated 72% of DEP-monitored sites are being cleaned up by private entities).
15
N.J.S.A. 58:10-23.11f(a)(2)(a), citing N.J.S.A. 58:10-23.11g(d) (emphasis added).
16
Morristown slip op. at 28.
17
Morristown slip op. at 28–29.
18
Morristown slip op. at 32.
11
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New Jersey Supreme Court rules unanimously: there is no statute of
limitations defense to contribution actions under the Spill Act
How the decision compares to CERCLA, ISRA, and federal New Jersey case
law on the Spill Act
A number of federal court decisions in the District of New Jersey that apply New Jersey law
concluded that the general six-year statute of limitations does apply to Spill Act claims.19
However, those federal cases relied on case law finding that a general statute of limitations
should apply to claims where the statute was silent on the subject.20 The Court
distinguished this precedent by finding that the Spill Act expressly listed its only defenses,
and did not include a statute of limitations defense and, thus, was not “silent.” 21
In addition, applying a statute of limitations to the Spill Act would have been consistent with
the approach taken in claims brought under the federal Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA). 22 Here too, the Court distinguished
CERCLA, pointing to CERCLA’s explicit statute of limitations applicable to contribution
claims, and noting that the legislature did not add a corresponding statute of limitations to the
Spill Act when it was amended to add the contribution provision.23
On the other hand, the Court’s holding was consistent with the Industrial Site Recovery Act
(ISRA), 24 which contains no statute of limitations, and provides that when a municipality
cleans up a contaminated property acquired through foreclosure on a tax sale, all
remediation expenditures shall be a debt of the immediate past owner or operator of the
industrial establishment. 25 New Jersey municipalities argued as amici in Morristown that it
would be illogical for a municipality to be able to recover without a time limitation under ISRA,
if a property was acquired through foreclosure pertaining to a certificate of tax sale, but not
under the Spill Act, when a property was acquired through purchase or eminent domain. 26
Policy implications
The Court’s decision supports the notion that the Spill Act is remedial legislation designed to
cast a wide net over those responsible for hazardous substances and their discharge.27 This
means that owners of contaminated property will not be subjected to de facto liability for
cleanup costs, and that dischargers of hazardous material will not be permitted to avoid
liability. 28
With the elimination of a time-bar defense, the Court has expanded the scope of liability, and
we can expect increased filing of contribution claims. Defendants seeking to avoid
contribution must be able to prove one of the enumerated act or omission of war, sabotage,
or God defenses, or prove that they were not responsible for the hazardous substance or
discharge in the first instance, in order to avoid liability.
19
Morristown slip op. at 15.
See Montells v. Haynes, 133 N.J. 282 (1993).
21
Morristown slip op. at 30 n.8.
22
42 U.S.C.A. §§ 9601-9675.
23
Morristown slip op. at 29 n.29, citing 42 U.S.C.A. § 9613(g)(3).
24
N.J.S.A. 13:1K-6 to -13.1.
25
N.J.S.A. 13:1K-9.3; Morristown slip op. at 18.
26
Morristown slip op. at 18.
27
See Morristown slip op. at 32.
28
Morristown slip op. at 17.
20
3
New Jersey Supreme Court rules unanimously: there is no statute of
limitations defense to contribution actions under the Spill Act
Authors:
Brian S. Montag
brian.montag@klgates.com
+1.973.848.4044
Emily S. Tabak
emily.tabak@klgates.com
+1.973.848.4092
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