Plaintiffs Must Cast a Wide Net for Spill Act Claims

The New Jersey Appellate Division has applied the doctrine of judicial estoppel to uphold the dismissal of a Spill Act contribution action on the grounds that the plaintiffs failed to seek contribution from all potentially responsible parties that were known (or reasonably knowable) in an earlier action. The court ruled that the application of judicial estoppel in the case before it was consistent with the Spill Act’s objective to cast a wide net over those responsible for hazardous substances and their discharge on the land and waters of the state. “Plaintiffs are precluded from floating a lazy cast toward one discharger and then shooting a second line toward others, seeking contribution for cleanup of the same property.”

The plaintiffs in Terranova v. Gen. Elec. Pension Trust (Docket No. A-5699-16T3), owners of commercial property that had long been used as a gas station, brought this action in 2015. The defendants were owners/operators of the property from 1960 through 1980, during which time soil and groundwater at the property had allegedly been contaminated by three underground storage tanks. Of consequence to the court’s decision, the plaintiffs had previously filed an action in 2010 against two separate individuals that had operated the gas station from 1981 through 2008, but the plaintiffs had failed to assert claims against the current defendants during that 2010 action.

In affirming the trial court’s entry of summary judgment in favor of the defendants, the Appellate Division noted that in the 2010 action, the plaintiffs had argued that the defendants in that action were the sole culpable dischargers. Moreover, the plaintiffs had taken that position despite receiving evidence of other possible dischargers. The court stated that the plaintiffs’ decision to disregard the possibility that other dischargers – from whom the plaintiffs now seek contribution – were responsible under the Spill Act and pursue only certain defendants is the type of inconsistent practice necessitating the application of the judicial estoppel doctrine.

The court was unpersuaded by the plaintiffs’ argument that judicial estoppel was not a recognized defense under the Spill Act. The court drew a distinction between legislative defenses (e.g. statute of limitations) and defenses originating in court rules or equitable principles, concluding that “judicial estoppel is not a defense subject to any overriding legislation and, as such, it may be maintained against a Spill Act claim.” The doctrine does not preclude property owners from seeking contribution from dischargers under the Spill Act, but it does compel owners to pursue dischargers that are known or reasonably knowable in a single action.

Given the court’s ruling in Terranova, it is imperative that plaintiffs with Spill Act claims cast their nets wide and assert claims against all dischargers that are known or reasonably knowable under the circumstances.

Adam C. Arnold is an Associate in the Gibbons Environmental Department.
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