Does § 9658 of the Comprehensive Environmental Response, Compensation, and Liability Act apply to state statutes of repose in addition to state statutes of limitations?
In 2009, Respondent Peter Waldburger and other landowners discovered that their well water was contaminated with chemicals similar to the ones stored by CTS Corporation when it owned the land 20 years earlier. About two years after this discovery, Waldburger and the other landowners brought a nuisance action, subject to North Carolina law, against CTS. North Carolina requires that suits involving real property be brought within three years of the injury becoming discoverable (a statute of limitation) and within ten years of the defendant’s last act (a statute of repose). In attempting to prevent dismissal of this case, Waldburger argues that this latter ten year requirement is preempted by § 9658 of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). CTS argues that § 9658 does not apply to statutes of repose, only to statutes of limitations. The Supreme Court now has to consider whether § 9658 applies to statutes of repose. Resolution of this case will have far-reaching consequences, affecting both potential defendants, including industrial companies and the United States government, and potential victims of contamination and hazardous waste—which could include anyone who does not know that they are suffering injury from undiscovered hazardous waste.
For certain state-law tort actions involving environmental harms, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) preempts the state statute of limitations’ commencement date and replaces it with a delayed commencement date provided by federal law. Specifically, 42 U.S.C. § 9658 provides that if “the applicable limitations period for such an action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.” Id. § 9658(a)(1). Section 9658, in turn, defines “applicable limitations period”-i.e., the state laws to which § 9658 applies-to “mean the period specified in a statute of limitations during which a civil action referred to in subsection (a)(1) of this section may be brought.” Id § 9658(b)(2).
In this case, the United States Court of Appeals for the Fourth Circuit deepened a split in the state and federal appellate courts by interpreting § 9658 to preempt not just state statutes of limitations but also state statutes of repose. A statute of limitations extinguishes a claimant’s right to pursue a cause of action after a certain period of time following accrual, whereas a statute of repose abolishes a cause of action as to a particular defendant after a period of time, regardless of whether the claim has accrued.
The question presented is: Did the Fourth Circuit correctly interpret 42 U.S.C. § 9658 to apply to state statutes of repose in addition to state statutes of limitations?
From 1959 to 1985, Petitioner CTS Corporation (“CTS”) operated a fifty-four acre facility in Asheville, North Carolina, where notable quantities of chemicals were stored. Waldburger v. CTS Corp. 723 F.3d 434, 440 (4th Cir. 2013). In 1987, CTS sold this property to Mills Gap Road Associates after promising realtors that the land was clean. Id. The property was eventually apportioned and resold, ending up in the hands of Respondent Peter Waldburger and other landowners (“Waldburger” or “landowners”).Id. In 2009, some of the landowners discovered that their well water was contaminated with chemicals similar to the ones stored by CTS. Id. at 437, 440. About two years after this discovery, and about 20 years after CTS sold the property, the landowners brought a nuisance action against CTS for contaminating their well water. Id.at 440–41.
In North Carolina, the landowners’ nuisance action is subject to a three-year statute of limitation, which commences when the damage becomes apparent or reasonably ought to have become apparent. Waldburger v. CTS Corp.,723 F.3d at 440–41 (citing N.C. Gen. Stat. § 1-52). In addition to this three year limitation, North Carolina law prohibits a cause of action involving damage to property if it “accrue[s] more than 10 years from the last act or omission of the defendant giving rise to the cause of action.” Id. at 441 (quoting N.C. Gen. Stat. § 1-52(16)). Based on this latter prohibition, CTS sought to dismiss the case, for failure to state a claim, because the landowners’ cause of action accrued more than 10 years after CTS sold the property—CTS’s last act. Id. A federal magistrate judge heard arguments, and recommended dismissal which the United States District Court for the Western District of North Carolina adopted—dismissing the case. See id. The landowners appealed to the United States Court of Appeals for the Fourth Circuit. See generally id.
Before the Fourth Circuit, the landowners argued—as they did below—that this dismissal was improper because North Carolina’s 10 year of limitation was preempted by the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). See Waldburger v. CTS Corp.,723 F.3d at 441. CERCLA was enacted by Congress as a mechanism to deal with the fallout of hazardous waste. Id. at 438. In 1986, Congress amended CERCLA to include a preemption provision providing that for “any action brought under State law… if the applicable limitations period for such action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.” Id. at 439 (citing 42 U.S.C. § 9658). The landowners argued that this language preempted North Carolina’s law while CTS argued that this language applied only to statutes of limitations, which commence at the discovery of the injury, and not to a statute of repose, like the North Carolina law, which commences from the defendant’s last act. See generally id.
The Fourth Circuit, after characterizing North Carolina’s 10 year limitation as a statute of repose, held that the commencement for the statute of repose was preempted by CERCLA. See Waldburger v. CTS Corp.,723 F.3d at 441, 444. Faced with an adverse decision, CTS petitioned for writ of certiorari to the United States Supreme Court which was subsequently granted. Now the Supreme Court is presented with the question: whether CERCLA’s language (in § 9658) applies to state statutes of repose. See Brief for Petitioner, CTS Corp. at i.
This case presents the Supreme Court with the opportunity to consider whether CERCLA’s preemption provision applies to state statutes of repose. Brief for Petitioner at i. CTS argues that CERCLA’s preemption only applies to statutes of limitations, not statutes of repose—which is connected with a defendant’s last act rather than with the injury. See generally id. The landowners argue that CERCLA expressly or, at least, implicitly, preempts the commencement of state statutes of repose. See Brief for Respondents, Peter Waldburger et al. at 17, 29. The resolution of the case will impact how long defendants remain civilly liable for causing contaminations and, conversely, how long the availability of relief remains for plaintiffs.
Perpetual Liability versus Remedy AvAILaBILITy
A major concern for CTS and supporting amici is the possibility of perpetual liability if statutes of repose are preempted. See Brief for Petitioner at 53; see also Brief of Amici Curiae American Chemistry Council et al. (“ACC”) in support of Petitioner at 7, 9. The American Chemistry Council (“ACC”) and several supporting trade associations assert that statutes of limitation that begin when the injury is discoverable expose manufacturers to virtually open-ended liability and that statutes of repose mitigate this effect. See Brief of ACC at 10. The ACC and other associations believe that without statutes of repose, the threat of perpetual liability would lead to over-deterrence while discouraging manufacturers from making products safer—because manufacturers will fear that changes to products would change the standard of care causing them to be liable for old products. See id. at 9. Furthermore, the ACC and other associations caution that with perpetual liability, fewer companies will be willing to manufacture necessary products, and perform necessary activities, that happen to produce hazardous waste. See id.
On the other hand, landowners and supporting amici worry that victims of hazardous waste will lose their day in court if CERCLA does not apply to statutes of repose. See Brief for Respondents at 30; see also Brief of Amicus Curiae Natural Resources Defense Council (“NRDC”) at 3. In particular, the Natural Resources Defense Council (“NRDC”) is concerned that the time limitations for statutes of repose will expire before plaintiffs are able to discover that they had been injured. Brief of NRDC at 3. This is especially relevant in the hazardous waste context where, according to the NRDC, latent injuries from contamination may not be discovered until many years later after the contamination occurs. Id. at 3–5. Moreover, the NRDC notes that the hazardous effects of contamination can remain for decades after statutes of repose expire, and are often hard to locate when contaminants have no odor, taste, or color. See id. at 9–10.
Public Health versus public GOod
In addition to keeping the courthouse doors open to plaintiffs, the landowners and the NRDC worry about the health consequences of hazardous waste and contamination. The NRDC notes that toxic contamination sites are disproportionately located near low income and other vulnerable populations. Brief of NRDC at 6. Hazardous waste, which can migrate slowly into areas not previously contaminated, can affect these individuals, as well as the general population through contamination of soil, groundwater, and even the food chain according to the NRDC. Id. at 8–9, 13. This concern is intensified if CERCLA’s preemption provision does not apply to statutes of repose becuse, according to the landowners, states might be incentivized to pass more defendant-friendly statutes in order to capture more hazardous waste producers for their states. Brief for Respondents at 31.
On the other hand, the ACC and other associations believe that statutes of repose serve the public good. See Brief of ACC at 11. First, the ACC and other associates submit that statutes of repose promote certainty in commercial transactions, protecting jobs and preventing increased taxes derived from lengthy lawsuits. Id. Second, statutes of repose improve judicial economy, according to ACC and others, by reducing stale cases and focusing plaintiffs on liable parties and not just the original manufacturer. Id. at 11–12. Finally, statutes of repose, the ACC and other associates assert, lower insurance rates because insurance companies are not forced to maintain large amounts of capital in anticipation of lawsuits years down the line. Id. at 13. All these benefits will be lost, however, if, as the Voice of the Defense Bar fears, CERCLA has the effect of rendering statutes of repose meaningless by requiring commencement to begin at discovery. See Brief of Amicus Curiae Voice of the Defense Bar in Support of Petitioner at 14.
In 1980, Congress enacted CERCLA to ensure that the parties responsible for environmental harm or injury caused by chemical pollution would bear the costs of their actions. See Brief for Respondents at 5. A study group tasked with reviewing the adequacy of existing legal remedies concluded that statutes of limitation can bar recoveries in cases with long latency periods, and recommended that states adopt a discovery rule, in which an action accrues when the plaintiff discovers the injury. See id. at 7. Here, the Court must determine whether § 9658 of CERCLA, which provides that a state statute of limitation cannot commence before an injury is discoverable, preempts North Carolina’s statute of repose, which has a period beginning on the date of the defendant’s last act. See Brief for Petitioner at 4–5. CTS argues that the plain language of § 9658 only applies to commencement dates of statutes of limitation, whereas North Carolina’s statute of repose has no applicable commencement date. See id. at 17. Waldburger, on the other hand, argues that North Carolina’s repose provision defines the period during which a civil action may be brought, and thus falls under § 9658’s definition of an applicable limitations period. See Brief for Respondents at 15.
Even if the Court finds that CERCLA does not expressly preempt a state statute of limitations period, the Court may still resolve any ambiguity in favor of or against preemption. CTS argues against preemption, noting that principles of federalism and constitutional avoidance dictate that statutory ambiguity be resolved against preemption. See Brief for Petitioner at 35–37. Waldburger disagrees, arguing that the statute is remedial and should be read broadly. See Brief for Respondent at 32.
DOES CERCLA EXPRESSLY PREEMPT A STATE STATUTE OF REPOSE?
Under § 9658(a)(1), if a state statute provides for a limitations period with a commencement date earlier than the commencement date under federal law, then the federally required date will apply to the action. CTS contends that this federal preemption provision applies to statutes of limitation, linked to periods connected to the plaintiff’s injury or discovery of an injury, and statutes of repose, linked to periods connected to the defendant’s conduct. See Brief for Petitioner at 21. CTS distinguishes between the natures and purposes of statutes of limitation and repose, characterizing statutes of limitation as procedural and statutes of repose as substantive. See id.CTS further details the difference between the two, arguing that a statute of limitations is designed to encourage the prompt exercise of litigant rights, whereas a statute of repose forecloses liability for a defendant if a cause of action can no longer be brought. See id. at 21–22. CTS argues that another crucial difference is that commencement dates do not exist in statutes of repose, because the period imposed by a statute of repose runs from the date of a defendant’s last act and without regard to whether a cause of action has accrued. See id. at 23. CTS asserts that by only providing a back-end date after which a cause of action expires, § 9658’s language pertaining to periods beginning when a civil action may be brought cannot apply to a statute of repose, as a repose period does not dictate a front-end date on which to commence suit. See id.Furthermore, CTS argues that preemption will apply if and only if a state law commencement date is earlier than the federally required commencement date. See id. at 24. However, if a statute of repose has run, then there will be no possible state commencement date, as a claim can no longer be brought. See id.Additionally, CTS contends that express preemption would have required statutory language including multiple time period definitions. See id. at 25.
Waldburger, on the other hand, argues that CERCLA’s definitions should control interpretations of the statute. See Brief for Respondents at 17. Waldburger claims that contrary to the characterization advanced by CTS, repose provisions inherently define periods during which actions may be brought. See id. at 18. These periods, according to Waldburger, also include an applicable commencement date by having a beginning tied to a specific event, which is the date of the defendant’s last conduct. See id. at 19. Waldburger argues that the definition of the applicable limitations period must be distinguished from the definition of the commencement date. See id.Waldburger claims that there are two possible applications of the commencement date: first, § 9658(a)(1) may apply to any action in which the state limitations period would provide a date earlier than the federally required date, which would lead to preemption; second, § 9658(a)(2) provides that the state statute of limitations applies, unless the exception of (a)(1) applies. See id. at 21. As a result, the statute allows plaintiffs to benefit from the more favorable limitations period. See id. Because the state commencement date passes earlier than the federally required commencement date, § 9658 should apply and preempt the state provision. See id. at 20. Furthermore, Waldburger argues that the § 9658 definitions include repose provisions, making it unnecessary to explicitly reference these provisions. See id. at 23. Waldburger argues that interpreting the statute as inapplicable to repose provisions is also incorrect because the “statute of repose” is judicial, not legislative, terminology. See id. at 24. Waldburger also notes that the definition of a statute of limitations is a broader term than that of a statute of repose, and has been read to include statutes of repose as a subcategory. See id. at 26–27.
HOW SHOULD STATUTORY AMBIGUITY BE RESOLVED?
CTS argues that even if § 9658 were ambiguous as to whether preemption should apply to repose provisions, principles of federalism, the presumption against preemption, and the avoidance doctrine all operate to prevent construing the statute to preempt statutes of repose. See Brief for Petitioner at 35. First, CTS cautions that § 9658 risks infringing on the boundaries of state tort law, which threatens state sovereignty by compelling the state to impose substantive tort liability when state laws would not otherwise do so. See id. at 36. Second, CTS argues that the presumption against preemption, which disfavors preemption when the text of a preemption clause has more than one plausible reading, is applicable even if there are other plausible interpretations of § 9658. See id.Third, CTS argues that given the federalism issues presented by this case, the canon of constitutional avoidance should be applied. See id. at 37. The canon, which requires that federal courts be certain of Congressional intent before finding that federal preemption applies in interpreting a statute that would upset the constitutional balance between the federal and state governments, would operate in this case to prevent the federal government from exceeding its authority. See id. CTS claims that if § 9658 is read to preempt statutes of repose, then the federal government would essentially be impermissibly compelling state legislatures to enact tort causes of action. See id. at 38. As a result, CTS argues that even if there is any ambiguity within § 9658, this ambiguity must still be resolved in favor of preventing preemption based on interpretive principles. See id. at 56.
Waldburger, however, argues that uniform preemption of less favorable commencement dates to plaintiffs is preferable because the conduct regulated under CERCLA can impact individuals across state lines, leading to plaintiffs with different commencement dates and possible barred claims. See Brief for Respondents at 31. Additionally, construing ambiguity in favor of uniform preemption may discourage states from passing more restrictive provisions in order to attract hazardous waste producers. See id.Waldburger claims that for these reasons, uniform preemption is more consistent with Congressional intent to protect plaintiffs’ rights. See id. Waldburger argues that because § 9658 is a remedial statute, preventing § 9658 from preempting statutes of repose would frustrate Congress’s remedial purpose. See id. at 33. Waldburger also refutes the statutory interpretation arguments advanced by CTS, first arguing that the presumption against preemption does not apply where the preemption of a state statute of repose will give effect to state common law claims. See id. at 36. Waldburger next addresses the avoidance canon issue, arguing that the doctrine only applies in cases where there are serious concerns about a statute’s constitutionality. See id. at 38. Waldburger claims that the statute here is an ordinary instance of federal preemption of state law. See id. at 38–39. Waldburger argues that instead of these interpretive principles, the remedial statutes rule, which supports a broad interpretation of statutes, should apply. See id. at 32. According to Waldburger, the remedial statutes rule supports interpreting § 9658 to apply to statutes of repose. See id. at 16. Therefore, Waldburger argues that based on Congressional intent, the statute’s remedial purpose, and principles of statutory interpretation, § 9658 should be construed to fully support preemption of all limitations periods with commencement dates earlier than the federally required date. See id.
In this case, the United States Supreme Court will decide whether the preemption provision of § 9658 in CERCLA applies to state statutes of repose. The Court must determine whether the statute expressly preempts repose provisions, and if not, whether principles of statutory interpretation support preemption. The Court’s ruling will impact the rights of plaintiffs injured by hazardous waste, the interests of companies looking to avoid perpetual liability, and the interests of the public at large.
- Richard Wolf, Government Straddles Both Sides in Toxic Water Cases, USA Today (Mar. 1, 2014 8:03 AM).
- CTS of Ashville Site, U.S. Env’t Prot. Agency (last updated Mar. 24, 2014).
- Legal Information Institute, Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).