New Ruling That There is No Statute of Limitations for Spill Act Suits Does Not Mean That Suits Seeking Damages for Contamination Should Wait

The recent ruling in Morristown Associates v. Grant Oil could lead to the misperception that a suit involving a claim for environmental remediation costs can be filed at any time. In Morristown Associates, the Court ruled that the New Jersey “Spill Act” was not subject to the general six year statute of limitations governing suits for property damage in New Jersey. However, there are still many reasons why such a suit should be filed sooner rather than later.

First, evidence bearing upon whether a party is responsible for an environmental discharge will not last forever. There needs to be testing of the substances that have been discharged so that conclusions may be made as to when the discharge occurred (and, ifat issue, who among several parties may be actually responsible). Often, it is as a result of such “dating” and/or “fingerprinting” of contamination that crucial evidence is obtained which can be used to support a claim. If the contamination degrades over time, the testing that can be performed will become less reliable or even meaningless.

Secondly, the New Jersey courts and federal courts applying New Jersey law apply what is known as the “Entire Controversy Doctrine.” That means that, with certain exceptions, all known claims against adverse parties involving a controversy must be raised in the same litigation or are forever barred. In the case of a suit between a landlord and a tenant respecting the condition of rented property or a suit between a property owner and a supplier or contractor concerning damage to property, claims involving known contamination must be raised in that proceeding or may not be able to be pursued later.

Finally, the Morristown decision involves only claims under the Spill Act. While the Spill Act is an important means of relief for those bringing environmental claims, it only provides recovery for remediation costs and natural resource damages. It has no application to claims of lost profits or other economic damages flowing from an environmental spill. Such claims must be brought under common law theories and these are still subject to the six year statute of limitations.

Questions? Let Mitchell know.

Mitchell Kizner of Flaster Greenberg

Mitchell Kizner is a New Jersey focused attorney in Flaster Greenberg PC’s Litigation and Environmental Law departments. He represents clients in insurance, environmental, construction and other commercial matters as part of his active litigation and commercial law practice. He is also General Counsel to the firm. He can be reached at mitchell.kizner@flastergreenberg.com or 856.382.2247.

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