SUPERFUND: Supreme Court rules for industry in fight over contaminated groundwater 

On June 9th, in a not unexpected opinion (double negatives have their place), the U.S. Supreme Court overturned the 4th Circuit and held that CERCLA does not preempt a state statute of repose, where the language of the CERCLA provision refers only to “statutes of limitation.”

I’ve discussed this case before (see here). It involves a blanket NC statute of repose that cuts off any claims more than 10 years after the last act of the defendant. The Plaintiffs here did not discover the contamination in their wells (which likely caused cancer and other severe injuries) until more than 10 years after CTS left the site. CERCLA has a broad 3 year discovery rule that explicitly overrides (“preempts”) any state “statute of limitations” (SOL) The NC statute is called a “statute of repose” (SOR), and the Supremes said that the legal distinction between a SOL and a SOR was sufficiently well-known when Congress passed the provision, and the provision refers only to SOLs. This, along with the common precept that Federal Preemption has to be narrowly applied, was enough for the majority of justices to find that SORs are not preempted.

The narrow application of preemption is certainly de rigueur, and is, in my opinion, sufficient for the result. However, the arguments regarding the difference between a SOL and a SOR are somewhat forced. First, almost all state SOLs already have a discovery rule, so the CERCLA provision is somewhat superfluous if its only application is to SOLs. (The time limits do vary for the discovery period, so arguably the important part of the CERCLA provision was the 3 year time period.) Second, many states do have some form of a “repose” statute (i.e., one that completely cuts off claims regardless of discovery), but still refer to them as statutes of limitations. A number of  legal scholars have commented on the interchangeable use of these terms, and the issue arises quite frequently.

Some have opined the decision was made to benefit the government in the Camp Lejeune lawsuits, which also arise in North Carolina. (see below) (The DOJ filed a brief supporting CTS’s argument.) Unquestionably it benefits those responsible for contamination. On the other hand, the preemption provision was extremely broad; it started the clock when contamination was discovered, as opposed to most discovery rules which start when an injury occurs. (So this is an additional argument that the provision is not merely superfluous.)

The net effect of the Supremes ruling is a middle ground – the CERCLA preemption provision does not override what is clearly a statute of repose, but could, in some circumstances, expand the window for bringing claims that would otherwise be barred by a statute of limitations.

In summary, an SOR is not an SOL, but an SOR means Plaintiffs are SOL.

(Shut Out of a Lawsuit, that is.)