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New Jersey Appellate Division Holds Plaintiff Must Establish “Reasonable Nexus” to Recover Cleanup Costs under New Jersey Spill Act

Another opinion was issued yesterday in the Morristown Associates v. Grant Oil Co. case, Dkt. No. A-0313-11T3 (N.J. App. Div., Nov. 17, 2015), a case which became famous earlier this year when the New Jersey Supreme Court held that there is no statute of limitations for private-party contribution claims under the New Jersey Spill Act. After the case was remanded following the New Jersey Supreme Court’s decision, the Appellate Division had to address several issues that the parties had appealed, but were deemed moot when the Appellate Division previously dismissed the case on statute of limitations grounds. 

Yesterday, in a per curiam opinion, the New Jersey Appellate Division reaffirmed that plaintiffs seeking to recover cleanup costs from other potentially responsible parties under the New Jersey Spill Act must establish a “reasonable nexus” or connection between each defendant’s actions that allegedly caused a discharge of a hazardous substance and the contamination that the plaintiff is addressing, reaffirming the 2012 New Jersey Supreme Court decision in NJDEP v. Dimant, 212 N.J. 153 (2012). The Dimant case injected a causation requirement that was not previously a component of the Spill Act’s strict liability scheme, requiring that a party seeking contribution under the Spill Act must prove by a preponderance of the evidence a “reasonable link between the discharge, the putative discharger, and the contamination at the specifically damaged site.”

In Morristown Associates, which involves contamination from a leaking underground fuel oil tank in a shopping center, the Appellate Division held that any defendant who delivered fuel oil into a leaking tank or released a hazardous substance onto the ground at the property could be liable under the Spill Act, but that the “plaintiff must establish a nexus between each defendant and the fuel-oil contamination.”  Interestingly, the court ruled that liability would attach, even if it the defendant did not have actual notice that the tanks or fuel lines had been leaking.  The Appellate Division also dismissed plaintiff’s common-law negligence claims, which were barred by New Jersey’s general six-year statute of limitations for injuries to property.