On March 9, the U.S. Court of Appeals for the Fourth Circuit issued a ruling affirming the District Court’s rejection of Virginia common law property damage claims based largely on negligence, nuisance, trespass, and argument that the Comprehensive Environmental Response, Compensation, and Liability Act , 42 U.S.C. §§ 9601 et seq. (CERCLA), statute of limitations preempts the application of the Virginia’s five-year statute of limitations. The case is Blankenship v. Consolidation Coal company, et al. Relying on First United Methodist Church of Hyattsville v. U.S. Gypsum Co., the District Court rejected the Blankenships’ argument that Virginia’s statutes of limitations was been preempted by CERCLA, which provides a discovery rule in some circumstances for when state statutes of limitations begin to run and, alternatively, the District Court concluded that, even if CERCLA preempted the Virginia statute, the CERCLA discovery rule would not aid the Blankenships because “they reasonably should have known about their claims more than five years before they filed their actions.”

In 1994, Consolidation Coal Company (CCC), following the provision of required public notice, obtained the necessary state permits to authorize the “dewatering” of CCC’s Buchanan Mine by pumping water to the nearby Beatrice Mine, an “exhausted” coal mine owned by Island Creek Coal Company (ICCC). This dewatering operation concluded in 2003. Several years later, the Blankenships, who owned property above portions of the Beatrice Mine, filed federal lawsuits against CCC asserting damage claims based on trespass, nuisance, negligence and related grounds, and demanded hundreds of millions of dollars in compensation, punitive damages, and injunctive relief.

The District Court rejected these claims, holding that they were barred by the Virginia statute of limitations. In addition, the District Court rejected the plaintiffs’ argument that that CERCLA’s statute of limitations and its “discovery rule” preempted the Virginia statute of limitations. To invoke Section 9658 of CERCLA, which sets forth the CERCLA statute of limitations, there must be a CERCLA cause of action. Here, the Blankenships did not establish a CERCLA claim; there was no claim that there was a release of hazardous substances which triggered response costs by the Blankenships. The Fourth Circuit agreed with the District Court’s reasoning, and also pointed out that Section 9607(j) of CERCLA excludes from CERCLA liability any liability for any “federally permitted release.” Here, CCC had obtained the necessary government permit from the state agencies and accordingly it was a “federally authorized permit under federal law.”