ELR Citation: ELR 20714
No(s). 86-1830(MTB) (D.N.J. Dec 22, 1992)

The court holds that claims by a company owning property contaminated with polychlorinated biphenyls (PCBs) against third-party defendants for damages under state tort law and response costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) are time barred, and that the third-party defendants are entitled to summary judgment on the property owner's claims for indemnification and contribution under CERCLA. The plaintiff initiated this action against an aluminum manufacturing company that had owned and allegedly contaminated the property. The manufacturer filed a third-party complaint seeking contribution and indemnification from parties that had owned the property after the manufacturer, and from a company affiliated with one of the prior owners and a supplier of materials containing PCBs. The plaintiff and the manufacturer settled their claims, agreeing that the manufacturer's contribution and indemnification claims against the third-party defendants would be assigned to the plaintiff. In December 1991, the plaintiff moved for leave to file tort law and CERCLA's claims directly against the third-party defendants. The court first notes that the parties do not dispute that the calculation of the timeliness of the plaintiff's complaint seeking to add the state tort claims relates back to December 2, 1991, the date that the plaintiff filed its motion for leave to file a complaint under Federal Rule of Civil Procedure 14(a). The court further notes that the parties do not dispute that common-law tort claims are subject to New Jersey's six-year statute of limitations. The court holds that the discovery rule for determining the beginning of the statutes of limitation period applies, because courts have recognized that the size and complexity of environmental contamination cases such as this may present difficulties with regard to statutes of limitations. Further, equity demands that the plaintiff be given an opportunity to bring its newly asserted claims within the statute of limitations as expanded by the discovery rule. However, applying the discovery rule, the court finds that prior to December 1985, the plaintiff knew that there was PCB contamination on the property; that the contamination had most likely occurred during the use of the property by the aluminum manufacturer, that parties had owned the property after the manufacturer; and that the property had been kept in a substantially dilapidated condition.

The court holds that the plaintiff's claims under CERCLA for costs incurred in its removal actions are barred by CERCLA's three-year statute of limitations, because the removal phase concluded long before December 2, 1988, which is three years prior to the plaintiff's first assertion of CERCLA's claims against the third-party defendants. The court holds that the plaintiff's claims do not relate to the filing of its original claim, because the plaintiff has no complaint to amend. The claims it settled with the aluminum manufacturer were the only claims it had brought as plaintiff in more than six years. The court refuses to exercise its discretion to permit the plaintiff to file an amended complaint incorporating the newly asserted claims.

Turning to the plaintiff's indemnification claim, the court holds that the plaintiff's failure to oppose the third-party defendants' summary judgment motion warrants that the motion be granted as unopposed on the merits. The court notes that if the plaintiff had opposed the motion, the court would have granted summary judgment for the third-party defendants, because such claims cannot be assigned prior to judgment under New Jersey law. Finally, the court holds that the plaintiff's CERCLA contribution claims are barred, because the plaintiff has not extinguished the third-party defendant's liability before seeking contribution from them. Congress indicated its awareness and willingness to address the contribution rights of a settling party in CERCLA §113(f)(3)(B), where itexplicitly reserved the right to seek contribution for parties settling with the United States or a state, regardless of whether the settlement pertained to all or only some of the costs of a response action. In contrast, Congress created a general right of contribution in private-party actions but declined to include a provision that would secure that right for settlements of less than the entire action.

[A prior decision in this litigation is published at 19 ELR 21180.]

Counsel for Plaintiff
Allan Kanner
Kanner & Associates
6628 Rte. 179, P.O. Box 610, New Hope PA 18938
(215) 862-0500 or 629-8500

Counsel for Defendant and Third-Party Plaintiff
Eric Bregman
Sive, Paget & Riesel
460 Park Ave., New York NY 10022
(212) 421-2150