The US Supreme Court has again reiterated that the federal Superfund law should be interpreted narrowly and plainly, this time while addressing the statute’s impact on state tort theories arising from releases of hazardous substances. In CTS Corp. v. Waldburger, the Court held that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not preempt state statutes of repose, ruling that the federal commencement date established by CERCLA applies only to statutes of limitation.
In Waldburger, a group of landowners in Asheville, North Carolina alleged a variety of state tort theories against the former operator of a manufacturing facility, claiming they had been exposed to contaminated groundwater released from the facility. Plaintiffs alleged that they first learned of the contamination in 2009, two years before filing suit and safely within North Carolina’s three-year statute of limitations for tort claims. However, the suit was filed nearly 24 years after the manufacturer sold the facility, well beyond North Carolina’s ten-year statute of repose.
In the handful of states that maintain them, statutes of repose act as a substantive bar on the assertion of a claim after the last liability-causing act of the defendant, typically ten or twenty years. Statutes of repose begin to run on the date of the defendant’s last act or omission, regardless of whether the claimant was aware of its injury. Statutes of limitation, conversely, typically begin to run only when the plaintiff knew or should have known of its injury. In cases involving historic contamination, accordingly, it is possible if not common for claims to be timely under a state statute of limitations but barred by a state statute of repose.
Although Congress did not provide in CERCLA for any general federal common law right of recovery for hazardous substance-related tort damages—as opposed to cleanup costs—it did provide a uniform federal commencement date for claims under state law theories. 42 U.S.C. Section 9658 provides that, notwithstanding anything contrary in state law, state statutes of limitations for tort damages arising from hazardous substance exposure do not begin to run until the plaintiff knew or reasonably should have known of its injury. CERCLA is silent regarding whether the federal “discovery rule” applies also to state statutes of repose.
In Waldburger, the US District Court in North Carolina dismissed the case, citing the state’s statute of repose, which imposes a complete bar to any suit brought after 10 years from the last activity or omission that gave rise to the claims. In doing so, the District Court rejected Plaintiffs’ argument that section 9658 of CERCLA preempted the state’s statute of repose. The Plaintiffs appealed to the Fourth Circuit, which reversed the District Court’s dismissal on the grounds that CERCLA’s remedial purpose justified preempting the statute of repose, despite the fact that section 9658 does not directly address statutes of repose.
The US Supreme Court reversed the Fourth Circuit’s ruling in a 7-2 decision written by Justice Kennedy. The Court held that CERCLA does not preempt state statutes of repose under the plain text of section 9658. Section 9658 provides that state law governs statutes of limitations for hazardous substance cases unless the applicable state statute of limitations is shorter than that proscribed by federal law, in which case the federal “discovery rule” controls. The language refers specifically to statutes of limitations and is silent as to statutes of repose. To further support its decision, the Court looked to a 1982 Study Group Report commissioned by Congress, which recommended the adoption of the rule embodied in Section 9658 and addressed the statute of repose issue separately from its discussion of statutes of limitations. Noting that distinction, the Court found that had Congress intended to also preempt state statutes of repose, it would have done so expressly.
Justices Scalia, Thomas, and Alito, and Chief Justice Roberts concurred in Justice Kennedy’s opinion except for Part II-D, which states that express preemption provisions should be given a “narrow interpretation.” The concurring opinion counters that express state law preemption provisions should be interpreted by according the language of the statute its ordinary meaning. Justice Ginsburg, with Justice Breyer joining, dissented, stating that the Fourth Circuit “got it exactly right in holding that § 9658 supersedes state law contrary to the federally required discovery rule,” and expressing concern that the ruling will prevent recovery where a long latency period exists and could encourage defendants to hide their past conduct until any potential claims would be barred.
After a setback in Atlantic Research, the Waldburger ruling represents another win for the position advanced by the federal government in its role as the nation’s most prominent potentially liable party. The US filed an amicus brief in Waldburger arguing that, had Congress intended to preempt state statutes of repose, it would have done so expressly. The government argued that allowing private parties to recover tort damages long after state legislatures had decided such claims should be barred was not a result compelled by CERCLA’s remedial purposes. That is particularly true in light of the fact that the federal cleanup cost claims established by CERCLA have statutes of limitations that are triggered by the incurrence of cleanup costs, not the date of the original act of contamination.
The government’s interest in Waldburger likely arises from the claims it currently faces by plaintiffs alleging exposure to chlorinated compounds released at its Marine Corps base in North Carolina, Camp Lejeune. The contamination at Camp Lejeune was recently discovered, many years after the last reported use of the compounds at the base. The United States has already notified the 11th Circuit of the Waldburger decision in one such case, Bryant v. United States, No. 12-15424 (11th Cir.), June 9, 2014, where the federal government is appealing a district court order preempting the same North Carolina statute of repose under section 9658.