The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) preempts statutes of limitations under state law to ensure that entities that caused contamination will be liable even if the harm caused by that contamination has a long latency period.  However, CERCLA Section 9658 does not specifically say that state statutes of repose are also preempted and, in a 7 to 2 opinion, the U.S. Supreme Court has now ruled that Section 9658 cannot be interpreted to include statutes of repose as subject to preemption.

The opinion reverses a 2 to 1 ruling by the U.S. Court of Appeals for the 4th Circuit in CTS Corp. v. Waldburger et al.  CTS ran an electronics plant in Asheville, North Carolina, from 1959 to 1985.  The plant manufactured and disposed of electronics and electronic parts. In the process, it stored the chemicals trichloroethylene (TCE) and cis-1, 2-dichloroethane (DCE).  In 1987, CTS sold the property, along with a promise that the site was environmentally sound. The buyer eventually sold portions of the property to individuals who, along with adjacent landowners, brought the suit – 24 years after CTS sold the property – alleging damage from contaminants on the land.

A remedial statute

In its defense, CTS claimed that the suit was barred by North Carolina’s statute of limitations, which the defense argued is actually a statute of repose.  The difference between the two terms is critical to the case.  A statute of limitations bars claims against a party after a specified period of time after an injury occurred, was discovered, or should have been discovered.  In contrast, a statute of repose bars claims after a specific period of time after the defendant acted, even if this period ends before the plaintiff was injured. 

The 4th Circuit overturned a decision by a district court, which had ruled in CTS’s favor.  The 4th Circuit stated that there is no ambiguity regarding the intent of CERCLA—that it is a remedial statute written to remove legal barriers to cleaning up dangerous contaminated sites and holding polluters liable for their actions.  According to the 4th Circuit, refusing to apply Section 9658 to statutes of repose defeats Congress's “unmistakable goal of removing barriers to relief from toxic wreckage.”

No tolling in statutes of repose

In writing for the Supreme Court majority, Justice Anthony Kennedy stated that statutes of limitations and statutes of repose do have an overlapping purpose—to encourage plaintiffs to bring actions in a timely manner.  But Kennedy writes that the rationale for statutes of repose differs from that of statutes of limitations.  Kennedy quotes from the majority opinion in another Supreme Court case (Jones v. Thomas, 1989):  “Statutes of repose reflect legislative decisions that as a matter of policy there should be a specific time beyond which a defendant should no longer be subjected to protracted liability.  Like a discharge in bankruptcy, a statute of repose can be said to provide a fresh start of freedom from liability.”

To illustrate the majority position, Kennedy compares the tolling aspects of the two statutes.  Tolling refers to pausing the clock on a legal time period when a litigant has pursued his rights diligently but has been prevented from bringing timely actions because of extraordinary circumstances.  Kennedy notes that statutes of limitations are subject to equitable tolling.  “But a statute of  repose is a judgment that defendants should ‘be free from liability after the legislatively determined period of time, beyond which the liability will no longer exist and will not be tolled for any reason,’” wrote Kennedy, quoting the Corpus Juris Secundum (C.J.S.), Limitations of Actions. 

Intent of Congress?

After making a clear distinction between the impacts of statutes of limitations and statutes of repose, Kennedy examined the position of the 4th Circuit that statutes of repose should be preempted under Section 9658 because remedial statutes should be interpreted in a liberal manner.  Kennedy responded that almost all statutes might be described as remedial in the sense that they are all designed to remedy some problem. 

Kennedy also looks to a study group report commissioned by Congress before the passage of CERCLA.  The report clearly urged the repeal of the statutes of repose as well as statutes of limitations.  “But in doing so, the report did what the statute does not:  It referred to statute of repose as a distinct category,” wrote Kennedy.  “And when Congress did not make the same distinction, it is proper to conclude that Congress did not exercise the full scope of its preemptive power.”
In this context, there is “an evident intent not to cover statutes of repose,” concluded Kennedy.

In a dissent, Justice Ginsburg said the majority opinion thwarts “Congress’ clearly expressed intent” to ensure that plaintiffs will not be prevented recovery from injuries with latency periods running for decades.  Justice Breyer joined in the dissent.

CTS Corp. v. Waldburger et al.