The United States Court of Appeals for the Fourth Circuit Court recently ruled that North Carolina’s statutes of repose and limitations is trumped by Superfund’s discovery rule, under which the limitation period for filing a claim begins only when the injury and its cause are known. Waldburger v. CTS Corp., 4th Cir., No. 12-1290, 7/10/13. Citing the Ninth Circuit’s opinion in McDonald v. Sun, 548 F.3d 774 (9th Cir. 2008), the Fourth Circuit held that Superfund’s reference to “statute of limitations” in § 9658 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) includes statutes of repose.
In Waldburger, the landowners allege that the defendant contaminated their properties with trichloroethylene (TCE) and 1,2- dichloroethane (DCE) when the company owned and operated an electroplating facility in Asheville, North Carolina between 1959 and 1985. The Court found that CTS stored “notable quantities of TCE and manufactured products using TCE,” at the site. In 2011, the landowners sued CTS, alleging “diminution in the value of their real property” and fear “for their health and safety and that of their family members,” and seeking remediation and monetary damages.
The trial court dismissed the suit under North Carolina’s Gen. Stat. § 1 – 52(16), which prohibits a “cause of action [from] . . . accru[ing] more than 10 years from the last act or omission of the defendant giving rise to the cause of action” finding that the last act or omission of CTS occurred in 1987, when it sold the site to Mills Gap. The landowners appealed, arguing that CERCLA § 9658 preempts the North Carolina limitation. Section 9658 of CERCLA states:
(a) State statutes of limitations for hazardous substance cases
(1) Exception to State statutes
In the case of any action brought under State law for personal injury, or property damages, which are caused or contributed to by exposure to any hazardous substance, or pollutant or contaminant, released into the environment from a facility, if the applicable limitations period for such action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.
The Fourth Circuit held that the trial court erred when it ruled a nuisance claim brought by a group of landowners against CTS was time-barred under North Carolina’s 10-year statute of repose. Instead, the state’s statute of repose is preempted by CERCLA § 9658.
The Fourth Circuit joins the Ninth Circuit in its views on the relationship of the statutes, further adding to the split among circuit courts that have considered the issue. The Fifth Circuit has refused to find preemption in a similar situation involving a broken tank (rather than a latent harm) where the plaintiffs failed to file a complaint for more than a year after the tank ruptured. During that time, the statute of repose for a product liability claim in that state ran and expired. However, the differing case law may ultimately end up being based upon the distinction between latent versus known harm. Section 9658 is arguably directed only to latent harm.
Finding that § 9658 preempts state law, the Fourth Circuit first concluded that the North Carolina law is a statute of repose, rather than a statute of limitations. “North Carolina’s ten-year limitation bars lawsuits ‘brought after a specified time since the defendant acted,’ without regard for the plaintiff’s knowledge of his harm,” the appeals court said, citing the definition of statute of repose in Black’s Law Dictionary 1546 (9th ed. 2009). Nonetheless, the court decided, § 9658 was meant to apply to statutes of repose as well as statutes of limitation.
The court found that “the terms ‘statute of limitations’ and ‘statute of repose’ have seen considerable development in their usage and meaning,” and “that both scholars and courts have often used the terms interchangeably.” The court also found such a reading consistent with congressional intent. “Refusing to apply Sec. 9658 to statutes of repose allows states to obliterate legitimate causes of action before they exist. Because this is precisely the barrier that Congress intended Sec. 9658 to address, we will not read the statute in a manner that makes it inapplicable in such a circumstance,” the Fourth Circuit said.
While the circuits are currently split, the state of the law may not be as different as it appears at face value. However, it will be important to understand the state of the law in your individual circuit, and the type of harm (latent or known), in evaluating any obstacles or defenses in specific cases.