Presented by the Environmental & Toxic Tort Litigation Practice Group

Legal Updates for Environmental Law - February 2016

Contamination Claims Under Nuisance and Trespass Must Show Fault  

Ross v. Ellman, et al., Supreme Court Docket No.: 074200, Appellate Division Docket No.: A-001024-12, Team 4, Law Division Consolidated Docket No.: MON-L-5002-07

In this environmental and toxic tort action, our Cherry Hill attorneys represented the prior owner of a property where it was discovered that an underground storage tank had leaked and contaminated the soil and underground water of two adjacent properties. The plaintiffs sued for strict liability under the Spill Compensation and Control Act, the Abnormally Dangerous Activities Doctrine, negligence, trespass and nuisance. The plaintiffs sought damages for diminution in property value, bodily injury and emotional distress.

Our attorneys obtained summary judgment at the trial court level, and the plaintiffs appealed. The trial court’s decision was upheld by the Appellate Division. On appeal to the New Jersey Supreme Court, the plaintiffs argued that the trial court erred in dismissing the nuisance and trespass claims on the basis that the plaintiffs were not required to show that the defendant was negligent in any way if the claim is based on a continuing nuisance/trespass. In a 4-3 decision, the New Jersey Supreme Court disagreed with the plaintiffs’ position and decided in favor of our client, holding that, where the underlying intrusion was unintentional, the standard for nuisance and trespass requires the plaintiff to show that the defendant’s actions were negligent, at a minimum.

Therefore, the Ross case holds that the mere discharge of contamination that impacts the property of a neighbor is insufficient to support claims under common law nuisance and trespass. There must be a showing of fault, i.e., that the persons responsible for the discharge of contaminants were at fault in allowing the discharge of hazardous substances to occur.

Supreme Court Rules That New Jersey's SOL Not Applicable to Spill Act Contribution Claims  

Morristown Associates v. Grant Oil Co., Decided January 26, 2015

Earlier this year, the New Jersey Supreme Court addressed whether the general six-year statute of limitations contained in N.J.S.A. 2A:14-1 applied to private claims for contribution made pursuant to the New Jersey Spill Compensation and Control Act (Spill Act), N.J.S.A. 48:10-23.11f(a)(2)(a).

The plaintiff in Morristown Associates purchased commercial property located in Morristown, New Jersey that contained a strip mall. Plaza Cleaners, a tenant and dry cleaning business owned by Robert Herring, had entered into a lease with the property’s previous owner, Morris Center Associates, in 1976. Due to construction, Herring was unable to occupy and operate Plaza Cleaners until 1978. At some point in time, a steam boiler was installed in a room at the rear of the leased space, as well as an underground storage tank (UST) for fuel to operate the boiler. Herring sold Plaza Cleaners to the defendants, Edward and Amy Hsi, in 1985, who owned the business until 1998, when it was sold to the present owner and third-party defendant, Byung Lee.

In August 2003, sampling of a monitoring well installed near Plaza Cleaner’s UST revealed fuel oil contamination. A subsequent remedial investigation indicated that, although the UST was intact, the fill and vent pipes were severely deteriorated, and large holes were noted. It was determined through forensic experts that these holes had developed as early as 1988 and that, since that time, oil had been discharging from these pipes each time the tank was filled.

The oil company defendants named in the action allegedly supplied fuel oil to Plaza Cleaners at various times between 1988 and 2003. The first issue addressed in the appeal was whether the general six-year statute of limitations applied to private claims for contribution. The New Jersey Supreme Court held that N.J.S.A. 2A:14-1’s six-year statute of limitations was not applicable to Spill Act contribution claims. Therefore, the court rejected the contrary determination of the Appellate Division and reversed and remanded the case to the Appellate Division for its consideration of other issues raised on appeal that were unaddressed.

One of these issues was whether the oil delivery defendants had to be on notice that the underground storage tank was compromised in order to find liability under the Spill Act. The trial court found:  

[I]n the absence of some triggering notice, or some triggering event or knowledge, the mere fact that an, that an oil company delivers oil to a tank without any reason whatsoever to know that that tank is somehow impaired or problematic or the system of filling is somehow defective, that strict [*8]  liability would not ordinarily attach in that hypothetical situation.

There must be more. Now that -- that more may not necessarily be negligence per se. But an act or omission. Something that occurs to trigger the strict liability under the Spill Act, I believe, is required.

On remand, the Appellate Division reversed this portion of the trial court’s decision, holding:

In this case, viewing the evidence in the light most favorable to plaintiff, any defendant who is shown to have delivered fuel oil into a leaking UST system, released a hazardous substance into the ground and could meet the statutory definition of a discharger. Additionally, if a defendant owned or operated a vehicle from which a discharge occurred, they could be a “person [*12]  responsible for a discharge.” N.J.A.C. 7:1E-1.6.

Therefore, the Appellate Division held that, at trial, the plaintiff must establish a nexus between each defendant and the fuel oil contamination. The plaintiff need not, however, prove that the defendants had triggering notice that the fill line was leaking.

Expansion of the Class of Persons Liable for Contamination Under the New Jersey Spill Act  

N.L. Industries, Inc. v. New Jersey, Docket No. A-0869-14 (N.J. App. Div. Aug. 26, 2015)

The Appellate Division held in this case that the state of New Jersey, as well as other “public polluters,” may be liable for the cleanup of environmental contamination because of their regulatory role and approval of activities that contribute to environmental contamination.

N.L. Industries filed a complaint against the state of New Jersey and other public polluters seeking contribution under the Spill Compensation and Control Act (Spill Act), N.J.S.A. 58:10-23.11 to 23.24, for costs to remediate the Laurence Harbor Shore Line in Old Bridge Township. The EPA had issued an order requiring N.L. Industries to remediate the site at an estimated cost of $79 million, alleging it produced the lead and other heavy metals contained in slag, which was used by private developer Sea-Land in 1968 to build a sea wall. The sea wall was meant as a substitute for the beach fill structure that had previously been constructed as part of a governmental shore protection project.

N.L. Industries alleged in this complaint that the state owned the land on which the sea wall was built and had been actively involved in the planning, approval and construction of the sea wall using the “slag.”

The state argued that the complaint against it must be dismissed because: (1) the Tort Claims Act immunizes the state; (2) the Spill Act does not retroactively abrogate the state’s “sovereign immunity”; and (3) the complaint failed to state a claim for relief. The latter argument was based upon the state’s averment that it was not “in any way responsible” under the Spill Act, N.J.S.A. 58:10-23.11g(c)(1) for the condition of the site.

The trial court determined that N.L. Industries sufficiently alleged facts showing that the state is a person “in any way responsible for the contamination” and held that the state was potentially liable under New Jersey law.

The Appellate Division affirmed.

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