Almost immediately after the Spill Compensation and Control Act was enacted in 1976, the legislature and the courts began to struggle with ownership liability issues. That struggle continues today. Recent federal case law has added an additional wrinkle to Spill Act liability for owners of contaminated property. Both current and former owners of industrial or commercial properties should be aware of potential liabilities and methods for limiting those liabilities.
As originally enacted, the Spill Act imposed strict liability for clean-up and removal costs on “any person who has discharged a hazardous substance.” 1976, N.J. Laws Ch., 141, § 8c. It was therefore clear that a property owner was not liable without actual participation in the discharge. See New Jersey Dep’t of Envtl. Prot. v. Exxon Corp ., 151 N.J. Super. 464, 473 (Ch. Div. 1977) (rejecting NJDEP’s argument that “simple ownership of land, without any affirmative act, is sufficient to assess liability”). However, the Spill Act language and thus the scope of Spill Act liability has been modified and expanded several times since the act’s initial promulgation in 1976. Most importantly, the phrase “in any way responsible” was introduced in 1979. Under the Spill Act’s current iteration, any “person who has discharged a hazardous substance, or is in any way responsible for any hazardous substance, shall be strictly liable, jointly and severally, without regard to fault, for all cleanup and removal costs.” N.J.S.A. 58:10-23.11g(c)(1). While the phrase “in any way responsible” is not defined in the Spill Act, it has become generally accepted that ownership of property at the time of a discharge is sufficient to subject the property owner to liability. However, it has remained unclear whether and when a party who purchases property after a discharge has occurred can be held liable under the Spill Act.
