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New Jersey Utility Providers Free to File Property Damage Claims Directly with the Courts

Robert Lieber
Weltman, Weinberg & Reis Co., L.P.A. - Philadelphia Office

December 18, 2013

Previously published on December 16, 2013

JCP&L v. Melcar Utility and the Demise of N.J. Stat. § 48:2-80(d). Are You Taking Advantage? How long will the advantage last?

In Jersey Central Power & Light Co. v. Melcar Utility Co., the New Jersey Supreme Court ruled that the mandatory arbitration provision of N.J. Stat. § 48:2-80(d) is unconstitutional.1 JCP&L sued Melcar as a result of damage to underground electrical wires. The case ultimately centered around the issue of whether a plaintiff has the right to a jury trial for property damages. The New Jersey Supreme Court ruled that the state's constitution guarantees the right of trial by jury for a statutory cause of action that is rooted in the common law. Although JCP&L's cause of action fell under the Underground Facility Protection Act (UFPA), which is statutory in nature, the act itself is rooted in common law negligence, whereby individuals (or in this instance companies) owe each other a standard of care.

What does this mean for you? It means that utility companies in New Jersey no longer have to go directly to arbitration. You can now immediately file a lawsuit against the individual or business that damaged your property. The benefits are numerous.

Previously, all arbitration hearings were administered by the Office of Dispute Settlement (ODS), a subsection of the Office of the Public Defender. The ODS mandated that all arbitrations be held in Trenton.2 Although Trenton is more or less in the center of the state, it is not convenient for those individuals who reside in Cape May or Sussex counties. Now you can file suit in the county where the damage occurred; this is a convenience that benefits all parties.

Another added convenience is the decrease in time it can take to obtain a judgment. Filing a complaint directly through the courts allows you to bypass the arbitration. Ultimately, this means that you can obtain a judgment sooner, which will allow you to move more quickly to recover your monetary loss.

There are other added benefits to filing directly with the courts, including but not limited to monetary savings. But this advantage may not last long. Within six months of the Supreme Court's decision, the New Jersey Law Revision Commission penned a tentative report regarding the UFPA and the unconstitutionality of the mandatory arbitrations.3 The report ended by proposing new language for the UFPA that would reinstate the arbitration process while complying with the JCP&L v. Melcar decision. The amended rule is pending adoption.

For now utility providers are free to file their claims directly with the courts, but be forewarned that this advantage may not last very long. Enjoy it while it lasts.

1 212 N.J. 576 (2013)
2 http://www.state.nj.us/defender/UndergroundFacilityProtectionAct.pdf
3 https://dspace.njstatelib.org/xmlui/bitstream/handle/10929/26920/l4152013i.pdf?sequence=1


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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