In CTS Corp. v. Waldburger, 13-339, 2014 WL 2560466 (U.S. June 9, 2014), the United States Supreme Court held that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, also known as Superfund) does not preempt state-enacted statutes of repose, striking a blow for plaintiffs seeking compensation for historic toxic contamination.
Waldburger involved a group of North Carolina landowners who sued an electronics manufacturer that previously owned a plant adjacent to the plaintiffs’ land, alleging damages from leaking contaminants on the plant property. The plaintiffs allegedly first learned of their well water contamination in 2009 and filed a state-law nuisance action in 2011, more than 24 years after the manufacturer sold the plant. The landowners sought reclamation of any toxic chemicals and remediation of environmental injury along with compensatory damages for past and future harm.
The District Court for North Carolina dismissed the case, citing North Carolina’s 10-year statute of repose, which, unlike a statute of limitations, provides defendants with a “clean slate” by serving as a complete bar to any suit brought after a statutorily specified time. Although a statute of limitations may be tolled while a plaintiff is unaware of his or her claims, a statute of repose provides that a defendant is free from all liability past a specific point. Because the defendant in the instant matter sold the electronics plant in 1987, more than 24 years before suit was filed, the District Court held that state law protected the defendant from a suit filed more than 10 years after the “last act or omission of the defendant giving rise to the action.” See N.C. Gen. Stat. Ann. § 1–52(16). However, the Fourth Circuit reversed, ruling that CERCLA’s remedial purpose preempted the 10-year statute of repose. Waldburger v. CTS Corp., 723 F.3d 434 (4th Cir. 2013) cert. granted, 134 S. Ct. 896, 187 L. Ed. 2d 702 (U.S. 2014) and rev'd, 13-339, 2014 WL 2560466 (U.S. June 9, 2014).
The Supreme Court reversed the Fourth Circuit in a 7-2 decision delivered by Justice Kennedy, holding that CERCLA does not preempt state-enacted statutes of repose. The key, the Court noted, is in the specific language used in the relevant provisions of the law. Justices Scalia, Thomas, Alito and Chief Justice Roberts concurred in the judgment, while Justices Ginsberg and Breyer dissented.
CERCLA Section 9658 applies to statutes of limitation for hazardous substance cases, and provides that State law governs statutes of limitations, except in situations when the applicable limitations period for a personal injury or property damage 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, [then] such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.” Section 9658 is silent as to statutes of repose.
The Supreme Court looked at the specific language of Section 9658 to support its analysis that Congress did not intend to preempt statutes of repose and wholly dismissed the idea that CERCLA’s general remedial intent should control its interpretation: “The Court of Appeals supported its interpretation of § 9658 by invoking the proposition that remedial statutes should be interpreted in a liberal manner. The Court of Appeals was in error when it treated this as a substitute for a conclusion grounded in the statute’s text and structure. After all, almost every statute might be described as remedial in the sense that all statutes are designed to remedy some problem.” CTS Corp. v. Waldburger, 2014 WL 2560466 at *7. The key, rather, is in the text itself.
First, the Court focused on the notion of general applicability of state law, in that Section 9658 bears the heading “State law generally applicable,” with the preemption discussion included as an exception to that general rule. Id. The Court also examined the language of a 1982 Study Group Report commissioned by Congress, which recommended the adoption of the rules embodied in Section 9658 and urged the repeal of both statutes of repose and limitations, referring to each by distinct language and in separate categories. Id. at *9. When Congress, in drafting CERCLA, “did not make the same distinction, it is proper to conclude that Congress did not exercise the full scope of its pre-emption power.” Id. In other words, if Congress really meant to preempt state statutes of repose, it would have said as much.
The Court was similarly unconvinced by arguments that Section 9658 should be read in such a way as to help all plaintiffs sue for harm caused by toxic contaminants. “CERCLA, it must be remembered, does not provide a complete remedial framework. The statute does not provide a general cause of action for all harm caused by toxic contaminants. § 9658 leaves untouched States’ judgments about causes of action, the scope of liability, the duration of the period provided by statutes of limitations, burdens of proof, rules of evidence, and other important rules governing civil actions.” Id. at *11. Instead, “Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to stand by both concepts and to tolerate whatever tension there [is] between them.” Id.
Justices Scalia, Thomas, Alito and Chief Justice Roberts did not join in Part II-D of Justice Kennedy’s opinion, which stated that express preemption provisions should be given “a narrow interpretation.” Instead, the justices espoused the notion that express preemption provisions should be interpreted with language accorded its ordinary meaning. Id. at *12. Justice Ginsberg, with Justice Breyer joining, dissented, opining that the Fourth Circuit “got it exactly right in holding that § 9658 supersedes state law contrary to the federally required discovery rule.” Id. at *15.
The Court’s ruling is somewhat tempered by the fact that fewer than half of the states have statutes of repose; only 19 states have such statutes for tort cases. In those states, defendants will be protected from toxic exposure claims arising from the distant past, and can rely on the state’s statute of repose to provide a clean slate moving forward.