Supreme Court Poised To Limit Tort Claims For Historic Pollution

The U.S. Supreme Court agreed this January to review a decision of the 4th U.S. Circuit Court of Appeals finding the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, or CERCLA, preempts state statutes of repose as well as limitations. In general, a statute of limitations bars claims after a certain period of time since an injury, whereas a statute of repose bars claims after some action by the defendant, even if it takes place before the plaintiff is injured. A statute of repose is thus more favorable to defendants, because it bars more claims.

4TH CIRCUIT DECISION

On July 10, 2013, in a 2-1 decision, the 4th Circuit reversed a lower court ruling that barred a common law nuisance claim by owners of contaminated property. The 4th Circuit's ruling was based on a statute of repose and allowed the nuisance claim to proceed, notwithstanding the contamination occurring earlier than 1987. Otherwise, a 10-year statute of repose would have applied.1

The case involved nuisance claims brought by 25 landowners in North Carolina, following the 2009 discovery that their well water contained concentrated levels of trichloroethylene, or TCE, and cis-1,2- dichloroethane, or DCE, allegedly caused by a former CTS Corp. plant nearby.

At issue was Section 9658 of CERCLA, which governs actions under state law for damages from exposure to hazardous substances. Section 9658 says, "the statute of limitations established under state law shall apply,"2 except where the applicable limitations period (as specified in the state statute of limitations or under common law) would begin earlier than the "federally required commencement date." This may occur when the plaintiff knows or reasonably should have known that the personal injury claimed was caused by the hazardous substance concerned.3

The issue for resolution by the 4th Circuit was whether CERCLA's language preventing application of statutes of limitation prior to the CERCLA-established date is broad enough to encompass "statutes of repose."

The majority first determined that the term "statute of limitations" is ambiguous as to whether it includes statutes of repose and then looked to other indicia of congressional intent to interpret the term. Relying on statements in a report issued in 1982 by a CERCLA study group appointed by Congress, the majority found that the term "statute of limitations" was intended to apply to both statutes of limitation and statutes of repose. As to the implications of its decision, the majority stated:

Our decision here will likely raise the ire of corporations and other entities wishing to rest in the security of statutes of repose, free from the threat of being called to account for their contaminating acts. They likely will cite the well-known policies underlying such statutes and asseverate that we have ignored them. But we are not ignorant of these policies, nor have we turned a blind eye to their importance.

Accordingly, we reaffirm our conclusion that North Carolina's 10-year limitation on the accrual of actions is preempted by Section 9658 of CERCLA. In so holding, we simply further Congress's intent that victims of toxic waste not be hindered in their attempts to hold accountable those who have strewn such waste on their land.4

The decision notes that it is consistent with the 9th U.S. Circuit Court of Appeals' holding in McDonald v. Sun, 548 F.3d at 774 (9th Cir. 2008). It also distinguishes the...