The U.S. Supreme Court held last week in CTS Corp. v. Waldburger that Section 309 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9658, preempts only states' statutes of limitations -- but not statutes of repose -- for state tort law claims arising from a release of hazardous substances.
Section 309 imposes a "discovery rule" on more restrictive state statutes of limitations -- meaning that the time period in which a plaintiff must file suit does not begin to run until the plaintiff knew or should have known that the damages were caused by the release. In holding that Section 309 also does not graft this "discovery rule" onto state statutes of repose, the Court left intact certain states' legislative decisions to provide defendants a date certain at which their exposure to tort liability arising from a release of hazardous substances ends.
The immediate effect of the Court's direct holding will likely be somewhat limited, as relatively few states appear to have adopted statutes of repose applicable to state tort law claims arising from a release of hazardous substances. However, the Court's opinion likely will have additional ramifications that environmental and toxic tort litigants and members of the regulated community should be aware of, including the need to address statutes of repose as a separate and distinct legal concept in tolling agreements and transactional documents.
I. Statutes of Limitations Versus Statutes of Repose
If it is not readily apparent what statutes of repose are and how they differ from the more familiar statutes of limitations, you are not alone. Even Justice Scalia acknowledged in oral argument that: "To tell you the truth, I've never heard of this distinction between statutes of repose and statutes of limitations."1
The Court in Waldburger explained that "[s]tatues of limitations and statutes of repose both are mechanisms used to limit the temporal extent or duration of liability for tortious act. . . . But the time periods specified are measured from different points, and the statutes seek to attain different purposes and objectives."2 Statutes of limitations impose a time limit based on "when the injury occurred or was discovered"3 and seek to motivate plaintiffs to prosecute claims diligently and before "evidence has been lost, memories have faded, and witnesses have disappeared."4 "A statute of repose, on the other hand, puts an outer limit on the right to bring a civil action" based on "the date of the last culpable act or omission of the defendant"5 and reflect "a legislative judgment that a defendant should 'be free from liability after the legislatively determined period of time.'"6
II. Factual and Procedural Background
The Court's need to analyze the difference between statutes of limitations and statutes of repose arose from alleged contamination related to a former CTS Corporation electronics plant in Ashville, North Carolina (Property). CTS operated the plant from 1959 to 1985 and stored chemicals on the Property, including trichloroethylene (TCE). CTS sold the Property in 1987 to a developer, who in turn sold portions of the Property to various individuals.
In 2011, two such property owners and other nearby residents brought a state tort law claim against CTS, seeking monetary damages and remediation related to the alleged contamination of their well water with TCE and other chemicals. CTS moved to dismiss, arguing that its last act on the Property occurred in 1987 when it sold the Property, and therefore Plaintiffs' claim was time barred under North Carolina's ten-year statute of repose for real property claims. N.C. Gen. Stat. § 1-52(16). Plaintiffs countered that CERCLA Section 309 grafted the discovery rule onto this North Carolina statute, causing the ten-year period to begin to run in 2009 when the Plaintiffs first discovered the contamination arising from a release of TCE and other chemicals and not in 1987.