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.

Governor Christie is Being Unfairly Attacked for his Stance on Exxon Natural Resource Damages Settlement

business handshakeGovernor Christie has come under attack recently as a result of the agreement by his administration to accept $225 million to settle the State’s natural resource damage claim against Exxon Mobil for the Bayonne and Bayway refinery sites in Bayonne and Linden, New Jersey and other sites owned or operated by Exxon, but that criticism seems essentially unfounded. While it is true that the State sought over $8 billion in damages from Exxon for injury to natural resources associated with the two refineries, such a recovery would have been unprecedented and was based upon economic calculations as to injury which are highly controversial and arguably speculative. Just because billions of damages were demanded does not mean that anything near that sum would have been awarded by the trial judge and survived a lengthy appeals process. The State was unsuccessful in the two natural resource damages suit that it did bring to trial.

The recovery of natural resource damages in New Jersey, a concept which reached its zenith during the leadership of the NJDEP by Bradley Campbell in the McGreevey Administration more than a decade ago, seeks payment from a polluter for monies which are in addition to the cost of cleaning up the contamination. The concept is that the pollution has caused injury to the State’s natural resources and that the State and its citizens should be compensated for that injury. However, the problem with that approach is that often the alleged injury is difficult to discern and may involve damage which is not observable, or of any real world consequence. It was Campbell, whose op-ed piece criticizing the proposed settlement was published in the New York Times, who ignited the current furor.

I have generally advised my clients during the past few years to seek to resolve natural resource issues now before the political winds again blow in the direction of seeking more substantial recoveries for such damages. It remains to be seen whether the fallout from this new controversy involving Exxon Mobil will now cause the pendulum to swing back faster than expected.

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.