The U.S. Supreme Court yesterday rejected an expansive interpretation of the federal extender provision in the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that would have applied the provision to both state statutes of limitations and state statutes of repose in hazardous waste cases. In CTS Corp. v. Waldburger, No. 13-339 (June 9, 2014), the Court reversed the United States Court of Appeals for the Fourth Circuit and held that CERCLA’s extender provision—which extends the time for filing certain state-law causes of action related to hazardous waste—applies only to state statutes of limitations, not to state statutes of repose. In reaching that result, the Court’s reading of the language of the CERCLA extender provision will likely influence the interpretation of similar provisions in other statutes, such as the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and the Housing and Economic Recovery Act of 2008 (HERA). The important distinctions noted by the Court between statutes of limitations and statutes of repose, including that statutes of repose are “fixed” and that their “expiration will not be delayed by estoppel or tolling,” also could impact several pending cases in which plaintiffs have sought to apply tolling principles to federal and state statutes of repose.
Congress enacted CERCLA in 1980 to promote the cleanup of hazardous waste sites. The Act provides a federal cause of action to recover the costs of cleanup from culpable entities, but does not provide a
federal cause of action for personal injury or property damage. Rather, Congress directed the preparation of an expert report to determine the adequacy of existing common law and state remedies. That report identified certain time periods for bringing suit under state law as a significant barrier to recovery: plaintiffs who discovered their injuries long after the alleged polluting acts could find their suits untimely as a matter of state law. The report recommended that States repeal both applicable statutes of limitations (i.e., statutes that run from when a cause of action “accrues”) and statutes of repose (i.e., statutes that run from a defendant’s last culpable act or omission).
In 1986, Congress addressed that concern by amending CERCLA. It added a provision to the Act, Section 9658, that preempts the commencement date of any applicable state-law “limitations period” in the event that “the federally required commencement date,” which is the date on which a plaintiff knew or reasonably should have known of her injury, is later than the otherwise applicable date under state law. 42 U.S.C. § 9658(a)(1) and (b)(4)(A). Congress mandated that state-law limitations periods—whatever their duration—could commence only when plaintiffs had reasonable notice of their injuries. The question in CTS Corp. was whether that provision applies only to state statutes of limitations or also to state statutes of repose.
The plaintiffs in CTS Corp. are homeowners whose property formerly housed a facility operated by CTS Corporation (CTS) until the mid-1980s. Following a 2009 report that identified pollution at the site, the plaintiffs brought a nuisance claim against CTS under North Carolina state law. North Carolina has a three-year statute of limitations for nuisance claims that runs from the date when the alleged damage became or reasonably should have become apparent. The parties agreed that the suit was not barred by that three-year limitations period. North Carolina, however, also has a ten-year statute of repose that runs from the date of a defendant’s last alleged culpable act. Because CTS’s last act had occurred in the 1980s, CTS claimed that the plaintiffs’ 2011 suit was barred by the State’s ten-year repose period. Plaintiffs responded that Section 9658 applies to both state statutes of limitations and statutes of repose—and thus pursuant to Section 9658, the ten-year repose period had not begun to run until 2009 when they discovered their injury. The district court agreed with CTS that Section 9658 applies only to state statutes of limitations, but a divided panel of the Fourth Circuit reversed. The Supreme Court then granted review.
THE SUPREME COURT’S DECISION
In a 7-2 decision written by Justice Kennedy, the Supreme Court held that CERCLA’s extender provision preempts only state statutes of limitations, not state statutes of repose. The Court began its analysis by explaining the difference between statutes of limitations and statutes of repose: statutes of limitations begin to run when a cause of action accrues and their purpose is to ensure diligent pursuit of claims, whereas statutes of repose begin to run from a defendant’s last culpable act or omission and their purpose is to ensure freedom from liability after a specified period of time. See slip op. at 5–8. The Court
made clear that statutes of repose are “not related to the accrual of any cause of action” and are not measured “from the date on which the claim accrues.” Id. at 6.
With those differences in mind, the Court examined the text of Section 9658. The Court first observed that Section 9658 “uses the term ‘statute of limitations’ four times”—a fact that the Court found “instructive” but not “dispositive.” Id. at 11. The Court observed that “other features of the statutory text further support the exclusion of statutes of repose,” because Section 9658 “uses the terms ‘the applicable limitations period,’ ‘such period shall commence,’ and ‘the statute of limitations established under State law.’” Id. at 13. In the Court’s view, that singular terminology would have been “an awkward way” to refer to two time periods under state law (a limitations period and a repose period). Ibid. In addition, the language of those terms, together with the statute’s reference to “‘the period’ during which a ‘civil action’ under state law ‘may be brought,’” more naturally refers to statutes of limitations that deal with the accrual of causes of action. See id. at 14–15. The Court also noted that, even though the expert report commissioned by Congress had recommended repeal of both statutes of limitations and statutes of repose, Congress had referred only to statutes of limitations in Section 9658. See id. at 13. Finally, the Court rejected the argument that preemption of state statutes of repose would advance CERCLA’s purpose of helping plaintiffs bring tort suits because CERCLA “does not provide a complete remedial framework” and “leaves untouched States’ judgments” about a wide range of rules governing state tort actions. Id. at 16.1
The Court’s decision in CTS Corp. distinguishes at length between statutes of limitations and statutes of repose. It will therefore influence the interpretation of other federal provisions that extend a state statute of limitations or limitations period. For instance, FIRREA and HERA extend state-law statutes of limitations for certain actions brought by the National Credit Union Administration Board (NCUA), the Federal Deposit Insurance Corporation (FDIC), and the Federal Housing Finance Administration (FHFA). But like Section 9658, those extender provisions make no mention of federal or state statutes of repose and, as CTS Corp. confirms, congressional intent is discerned primarily from the statutory text. The extender provisions applicable to the NCUA, FDIC, and FHFA also expressly refer to the “accrual” of claims, a concept that, as CTS Corp. confirms, is applicable only to statutes of limitations, not statutes of repose. CTS Corp. thus indicates that those provisions also serve to extend only statutes of limitations and not statutes of repose. That issue is pending in National Credit Union Administration Board v. Nomura Home Equity Loan, Inc. (No. 13-576), a case that the Court has been holding for its decision in CTS Corp. In the event that the Court does not grant certiorari in Nomura, it likely will remand for the Tenth Circuit to reconsider its approach to FIRREA’s extender provision in light of the Court’s decision in CTS Corp.
The Court’s explanation of the differences between statutes of limitations and statutes of repose will also influence those courts considering whether various forms of tolling apply to statutes of repose. The majority in CTS Corp. stated that statutes of repose “generally may not be tolled” and that their “expiration will not be delayed by estoppel or tolling.” Slip op. at 7 (internal citation and quotation marks omitted). The issue of whether American Pipe tolling applies to statutes of repose is currently being briefed in Public Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc. (No. 13-640).