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NJ Supreme Court Rules No Statute of Limitations for Private Cost Recovery Actions Under the NJ Spill Act.

In Morristown Associates v. Grant Oil Co., an eagerly anticipated ruling, the New Jersey Supreme Court clarified a critically important and much debated issue as to whether private cost recovery claims under the New Jersey Spill Compensation and Control Act (the “Spill Act”), N.J.S.A. 58:10-23.11, et seq., are subject to the six-year statute of limitations. The Spill Act did not contain a limitations period at first. In 1994, in Pitney Bowes v. Baker Industries, 277 N.J. Super 484 (App. Div. 1994), the Appellate Division ruled that the ten year Statute of Repose not apply to limit claims under the Spill Act due to the lack of any limiting language in the Spill Act and based upon public policy that parties responsible for pollution should pay to clean it up. In 2002 the legislature added three year limitation period for the State to bring claims against responsible parties commencing when the cleanup is complete. The legislature did not add a limitation period for private cost recovery actions. In Morristown Associates, the Appellate Division ruled that the actions for private parties to recovery costs to clean up property must be brought within six years of when the contamination should have been discovered based upon reasonably diligent inquiry. Some Federal Courts also held there to be a six year limitations period. The New Jersey Supreme Court finally settled the issue holding that the six year statute of limitations does not apply for private cost recovery actions under the New Jersey Spill Act.

From a policy perspective, the Court found that, given the remedial nature and statutory admonishment that the Spill Act is to be “liberally construed,” “the Legislature could not have intended to permit its imposition of contribution liability on culpable dischargers to be frustrated by the imposition of a general and prior enacted, but un referenced, statute of limitations.” The Court therefore declined to “add to its list of identified defenses based on an inference from its silence about statutes of limitations generally.”

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