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Spill Act Decision Impacts Liability for Discharges Occurring Before 1977

A recent court decision could mean higher remediation costs for parties liable under the New Jersey Spill Compensation and Control Act (“Spill Act”) for discharges that occurred prior to 1977. This week, the New Jersey Supreme Court held that the State of New Jersey cannot be held liable for claims under the Spill Act arising from discharges prior to the adoption of the Spill Act in 1977. The Court further clarified that Spill Act plaintiffs need not satisfy the notice-of-claim requirements under the Torts Claims Act and that the Spill Act does not strip the State of its immunity for discretionary governmental activities such as the issuance of permits. 

A recent court decision could mean higher remediation costs for parties liable under the New Jersey Spill Compensation and Control Act (“Spill Act”) for discharges that occurred prior to 1977. This week, the New Jersey Supreme Court held that the State of New Jersey cannot be held liable for claims under the Spill Act arising from discharges prior to the adoption of the Spill Act in 1977. The Court further clarified that Spill Act plaintiffs need not satisfy the notice-of-claim requirements under the Torts Claims Act and that the Spill Act does not strip the State of its immunity for discretionary governmental activities such as the issuance of permits. 

The case, NL Industries, Inc. v. State of New Jersey, involves a Superfund Site in Laurence Harbor. In 1968, the State granted a riparian land grant and building permit for a seawall to be constructed by Sea-Land Development Corporation meant to protect Laurence Harbor from future erosion. The State also owned a portion of the land on which the seawall was built. In 2007, contamination was detected along the seawall, and the New Jersey Department of Environmental Protection (“NJDEP”) reported the same to the United States Environmental Protection Agency (“EPA”). The EPA ordered NL Industries, Inc., which had produced the slag used in the Laurence Harbor projects, to remediate the site. NL sought contribution from the State due to its role as regulator and riparian landowner.

The Court’s holding threatens to complicate and frustrate efforts to fairly allocate liability and costs for Spill Act remediation arising out of pre-1977 discharges. Parties found liable under the Spill Act will no longer be able to seek contribution from the State if this liability arises out of discharges pre-dating the adoption of the Spill Act.

The Supreme Court decision in NL Industries, Inc. v. State of New Jersey is available at http://www.judiciary.state.nj.us/opinions/supreme/a_44_15.pdf

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