Heating oil companies and the former owners of a dry-cleaning business that Morristown Associates sued over a leaking underground storage tank were squaring off against not only the shopping center owner but also amicus participants like the New Jersey State Bar Association. The NJSBA contends that no statute of limitations should cover contribution actions under the Spill Act, but that any court decision expressly backing a limitations period shouldn't apply retroactively to avoid punishing lawyers and their clients who thought they were playing by the rules.
Before an appellate decision in the case last year, there was almost no environmental practitioner in New Jersey who thought there was a statute of limitations for such actions, Craig Provorny of Herold Law PA said on behalf of the NJSBA. Ruling against Morristown Associates, the Appellate Division applied a general six-year limitations period for property damage claims and used the discovery rule to determine when that clock started ticking. The Spill Act, enacted in 1976, doesn't include a specific limitations period.
"Not once in all these years have I ever been faced with a motion in [Spill Act] litigation predicated on the statute of limitations," Provorny said.
Representing the former owners of Plaza Cleaners, David Field of Lowenstein Sandler LLP suggested it wasn't the job of the Supreme Court to worry about whether getting the law right would open up environmental attorneys to malpractice claims.
"Your job is to call balls and strikes," Field said. "I'm not here to protect them or prosecute them, but so be it. I don't think this is new law."
Justices peppered attorneys with questions on the statutory language at issue and whether defendants in a contribution action should be able to mount a statute of limitations defense.
One subsection of the law that primarily concerns property acquisitions and due diligence requirements mentions that "war, sabotage or God" are the only other defenses for "any owner or operator of a major facility or vessel responsible for a discharge." Meanwhile, other language in the Spill Act regarding the ability of private parties to launch contribution actions for cleanup costs states that contribution targets only have the defenses available to parties pursuant to that other subsection.
While the U.S. Congress has amended the Comprehensive Environmental Response, Compensation and Liability Act to include a statute of limitations defense, the state Legislature has never taken similar steps with the Spill Act, according to Morristown Associates attorney Steven Singer.
"If a statute of limitations is to be added to the Spill At and applicable to contribution actions, that is a function of the Legislature, not the judiciary," Singer said.
However, Justice Anne Patterson asked why language restricting the defenses available to contribution defendants would go beyond major facilities and vessels based on the statute's construction, and she wasn't alone in that line of questioning.
"Is it one rational interpretation that the Legislature wanted to be a lot tougher on major facilities?" Justice Barry Albin asked.
Later, Justice Patterson questioned Field on why the subsection dealing with contribution actions wasn't just applying the "war, sabotage or God" limitations to parties across the board, but Field said that wouldn't make sense.
"You have to look at the major-facility-and-vessel spirit of the statute," he said. "The big boys were being taken to task. The little guy was not the focus of those provisions."
As the New Jersey State League of Municipalities mentioned in an amicus brief, the subsection of the Spill Act concerning the defenses available to major facilities used to state that "any other person shall have available to him any defense authorized by common or statutory law," which would include the general statute of limitations. However, the Legislature removed that language in 1979, which Justice Jaynee LaVecchia seemed to note as the court mulled a possible limitations period.
"To the extent that there was even an oblique reference to it, it was deleted," she said.
The trigger for any statute of limitations could prove critical. The appellate panel found that Morristown Associates, which filed suit in 2006, should have discovered the contamination no later than 1999, when a different underground storage tank on the property had to be removed. An environmental audit in 1993 showed no underground storage tanks at the site.
Chief Justice Stuart Rabner asked Kristin Hayes, an attorney for Spartan Oil Co., why those circumstances would reasonably require them to check a different tank.
"They learned in 1999 that report was inaccurate," Hayes said. "Under general theories of tort law, a property owner has an obligation to maintain property in a reasonably safe manner."
Morristown Associates is represented by Steven Singer.
Edward Hsi and Amy Hsi are represented by David Field of Lowenstein Sandler LLP.
Spartan Oil Co. is represented by Kristin V. Hayes of Wiley Malehorn Sirota & Raynes.
Defendants including Petro Inc. are represented by Joseph M. Gaul Jr. of Gaul Baratta & Rosello LLC.
The case is Morristown Associates v. Grant Oil Co. et al., case number 073248, in the New Jersey Supreme Court.
--Editing by Katherine Rautenberg.
