This week, the United States Supreme Court issued a ruling of interest to any Potentially Responsible Party regarding the effect of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) on state statutes of repose.
As is commonly known, Congress enacted CERCLA (or “Superfund”) in 1980 to provide for the collection of funds for hazardous waste cleanup and to establish guidelines related to the release and disposal of hazardous waste. Relevant to the Supreme Court’s decision this week, CERCLA includes a “discovery rule” that governs when the statute of limitations on a claim begins to run. Under this rule, “statutes of limitations in covered actions begin to run when a plaintiff discovers, or reasonably should have discovered, that the harm in question was caused by the contaminant.”
Without question, CERCLA’s discovery rule “preempts state statutes of limitation that are in conflict with its terms.” In other words, if a state statute of limitations commences at any time prior to when the plaintiff “discovers, or reasonably should have discovered that [his] harm . . . was caused by the contaminant,” CERCLA steps in and delays the commencement date until the plaintiff discovers the harm.
In CTS Corporation v. Waldburger, the United States Supreme Court considered whether the discovery rule also preempts state statutes of repose. Although statutes of limitation and statutes of repose share similarities, they serve distinct functions and purposes in the legal system. At a basic level, statutes of limitation present a time limit for bringing an action that is calculated from the date the action accrues, whereas statutes of repose place an end date on the bringing of an action based on a defendant’s last blameworthy act or omission. Thus, as demonstrated by Waldburger, a plaintiff who discovers his injury 24 years after the defendant’s last act may be able to bring his cause of action within 3 years under a statute of limitations, but may nonetheless be prevented from bringing his action at all if the state where the harm occurred (e.g., North Carolina) has a 10-year statute of repose. Put simply, statutes of repose place “an outer limit on the right to bring an action,” and they can—and do—bar a claim before a plaintiff has any knowledge of his injuries. Despite this seeming harshness, statutes of repose play an important role in our system of civil justice by protecting defendants from liability after a set period of time. Recognizing this role and distinguishing it from the role of statutes of limitation, the Court held that that CERCLA’s discovery rule does not preempt state statutes of repose.
The import of the Court’s decision is monumental for defendants in states with statutes of repose applying to personal injury and real property causes of action. In such states, a Potentially Responsible Party cannot be liable to a plaintiff who brings an action beyond the time limit set by the statute—regardless of when the plaintiff discovers his harm. Furthermore, defendants in states that do not have a statute of repose now have an incentive to encourage the passage of such a measure.
In sum, the Court’s decision in Waldburger is a notable victory for defendants and provides necessary protection against protracted liability for alleged environmental harm.