In an opinion that reinforces the importance of the statute of limitations to defendants, the Vermont Supreme Court upheld a trial court’s decision that the State’s claims of a “generalized injury” from methyl tertiary butyl ether (“MTBE”) groundwater contamination were time-barred under Vermont law. See State of Vermont v. Atlantic Richfield Co., 2016 VT 61 (May 27, 2016). The State brought suit in 2014, alleging that gasoline refiners and marketers were liable for knowingly distributing gasoline containing the oxygenate, which then leaked into groundwater across the state.

Defendants argued in a motion to dismiss that the State was aware of any alleged injury to groundwater when it enacted its MTBE ban nine years prior to bringing the suit, and therefore the State’s claims were outside of the six-year statute of limitations. The State claimed a 1785 statue that excludes claims relating to “lands belonging to the state” from the six-year limitations period applied here because the State holds groundwater in public trust. The State also argued that its general claims arising under a 2008 statute that establishes a state policy to protect groundwater resources are not time-barred because that statute became effective less than six years before Vermont filed its complaint. In January 2015, the trial court rejected the State’s arguments, and dismissed the State’s claims to the extent they alleged a generalized injury to Vermont’s groundwater system as a whole.

The Court reaffirmed the trial court’s decision on interlocutory appeal. It held that the state lands exception has been consistently interpreted to apply only to claims of ownership of state property, not to generalized claims of injury. The Court also explained that, absent a showing of legislative intent, a statute cannot be read to include “unlimited retroactive application to conduct and injuries that occurred . . . decades prior to its enactment.” The State, the Court found, could make no such showing here.

The Court left open questions that were not part of the appeal, including whether the state-lands exception could apply to specific instances of groundwater contamination, and whether the continuing tort doctrine saves the State’s claims from the statute of limitations at specific sites.

This blog was prepared with the assistance of Matthew Snyder.