In a stunning decision, the New Jersey Appellate Division held on August 23 that the State’s general six-year statute of limitations for property damage applies to private claims for contribution under the New Jersey Spill Compensation and Control Act.  Morristown Associates v. Grant Oil Co., (App. Div., No. A-0313-11T3, August 23, 2013).   The six-year clock begins to run when “the injured party discovers, or… should have discovered that he may have a basis for an actionable claim.”  Morristown, slip op. at 3 (quoting Lopez v. Swyer, 62 N.J. 267 (1973)).

The statute of limitations applicable to Spill Act claims has long been a subject of controversy.  The Act itself does not specify a limitations period.  In 1994, the Appellate Division held that a ten-year statute of repose did not apply to Spill Act contribution claims.  Pitney Bowes v. Baker Industries, Inc., 277 N.J. Super 484 (App. Div. 1994).  There, the court reasoned that the Spill Act “casts a broad net” and that the purposes of the Act would be defeated if responsible parties were excluded from liability because of a statute of repose.

Five years later, the Appellate Division held that no statute of limitations applied to private claims for contribution under the Spill Act.  Mason v. Mobil Oil Corp., 1999 WL 33605936 (N.J.Super.A.D.).  However, the decision was unpublished and therefore was not binding on other courts or litigants.

More recently, a federal court interpreting New Jersey law reached the opposite conclusion, holding that the six-year statute of limitations applied to Spill Act claims.  Reichhold, Inc. v. United States Metals Refining Co., 655 F. Supp.2d 400 (D.N.J. 2009).

The appellate court in Morristown rejected or distinguished its own earlier decisions, and sided with the 2009 federal court decision.

Still, uncertainty remains.  While the Appellate Division has now spoken in Morristown, the State Supreme Court has not yet weighed in on the issue, and the State Legislature, too, could seize the opportunity to amend the Spill Act if it disagrees with the holding in the Morristown case.