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The U.S. Supreme Court has clarified the preemptive power of CERCLA, holding that CERCLA does not preempt state statutes of repose, even though it does preempt certain state statutes of limitation. On June 9, 2014, the Supreme Court ruled in the case of CTS Corp. v. Waldburger, No. 13-339, [enhanced version available to lexis.com subscribers], reversing the Fourth Circuit Court of Appeals and upholding the application of the North Carolina statute of repose at issue. Justice Kennedy wrote the majority opinion with Justices Ginsburg and Breyer dissenting.
It is undisputed that CERCLA preempts statutes of limitations in certain circumstances. The issue decided by the Supreme Court was whether that preemption extended to statutes of repose as well. As explained by the Supreme Court, "a statute of limitations creates a time limit for suing in a civil case, based on the date when the claim accrued." Slip. op. at 5. In contrast, a statute of repose "puts an outer limit on the right to bring a civil action. That limit is measured not from the date on which the claim accrues but instead from the date of the last culpable act or omission of the defendant." Slip. op. at 6.
CERCLA preempts state statutes of limitation in cases brought under state law for personal injury or property damages caused by exposure to hazardous substances by providing a federally required commencement date (FRCD) for certain statutes of limitation. The FRCD is the date the plaintiff knew or reasonably should have known that the personal injury or property damages at issue were caused or contributed to by the hazardous substance concerned. 42 U.S.C. § 9658(b)(4), [enhanced version available to lexis.com subscribers]. If the state statute of limitations provides a commencement date earlier than the FRCD, CERCLA preempts the state law and the state limitation period shall commence on the FRCD.
The Supreme Court noted that this section of CERCLA deals only with statutes of limitation and does not mention statutes of repose. In addition, and more significantly to the Court, a statute of reposes "is not related to the accrual of any cause of action." Slip. op. at 14. In contrast, the FRCD is specifically targeted at the accrual of a cause of action. Because the purpose and application of a statue of repose is distinct from a statute of limitations, the Supreme Court held that CERCLA does not preempt state statutes of repose.
The defendant in this case had sold its polluting operations in 1987, but the plaintiffs did not discover that their well water was contaminated until 2009, and then filed suit in 2011. The North Carolina statute of repose provides that "no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action." N.C. Gen. Stat. Ann. § 1-52(16), [enhanced version available to lexis.com subscribers]. More than 10 years had passed since the defendant's last culpable action because the defendant had sold the operations in 1987. Thus, under the Supreme Court's ruling, the North Carolina statute of repose bars the plaintiffs' claims because they were filed more than 10 years after the defendant sold the operations.
This ruling will be beneficial to defendants facing claims related to historical contamination caused by operations or actions many years ago, as was the case in CTS Corp. Now, even if the injuries caused by historical contamination remain latent and undiscovered for years, the entity responsible for that contamination may be able to rely on a state statute of repose to bar future claims related to the historical contamination.
The Supreme Court's decision is available here.
By Allison Torrence, Associate, Jenner & Block
Read more at Corporate Environmental Lawyer Blog by Jenner & Block LLP.
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