The U.S. Supreme Court has agreed to tackle the question of whether CERCLA’s preemption clause (Section 9658) applies to state statutes of repose as well as state statutes of limitations. 

The petition for writ of certiorari accepted by the Supreme Court was filed by counsel for CTS Corporation, which operated a large electronics parts plant in Asheville, North Carolina.  The plant was closed in 1985 and the property was sold 2 years later to a real estate developer.  The property was then divided into many parcels and sold to private homeowners. 

In 2011, the homeowners filed action in U.S. district court against CTS, claiming that the land they bought was contaminated by 1 million pounds of industrial chemicals, including trichloroethylene (TCE) and cis-1, 2-dichloroethane (DCE), both solvents that have carcinogenic effects. 

North Carolina’s 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. 

CERCLA explicitly preempts state statutes of limitations, but makes no mention of statutes of repose.  While the relevant North Carolina law does not include the phrase “statute of repose,” it explicitly bars lawsuits 10 years after a defendant acted; therefore, it is effectively a statute of repose.  Following the recommendation of a magistrate, the district court dismissed the claims because CERCLA’s preemption of state statutes of limitation does not apply to North Carolina’s statute of repose.

A remedial law

In a 2 to 1 decision, the U.S. Court of Appeals for the 4th Circuit disagreed.  The majority points out that pressure on Congress to enact CERCLA in the final hours of the 96th session resulted in a law that is hampered by ambiguity in several areas.  However, according to the majority, 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. 

The majority states:
“When faced with a remedial statute, our interpretive charge is simple: Employ a ‘standard of liberal construction [to] accomplish [Congress's] objects.’  In light of this charge, we reject a reading of Section 9658 that excludes application of its provisions to North Carolina's ten-year limitation.  Such an interpretation may seem to be textually sound under one possible reading of the statute, but it offers too narrow an approach and one that thwarts Congress's unmistakable goal of removing barriers to relief from toxic wreckage.

Refusing to apply Section 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 Section 9658 to address, we will not read the statute in a manner that makes it inapplicable in such a circumstance.  Doing so cannot be termed an honest attempt to ‘effectuate Congress's intent.’  Accordingly, we hold that the federally required commencement date in Section 9658 preempts North Carolina's ten-year limitation on the accrual of real property claims.”

Congressional awareness

In a dissent, Judge Thacker writes that while CERCLA is indeed remedial it was not Congress’s intention to “arm toxic tort plaintiffs with every possible advantage nor remove every obstacle from their path to recovery.”  Thacker further points to CERCLA’s legislative history, which, he says, clearly indicates that Congress was aware that statutes of limitations were a distinct category of time-bar statutes and specifically chose only to preempt those statutes and not other statutory time bars such as statutes of repose.      

“That Section 9658 reaches state statutes of limitations but not statutes of repose strikes a balance between harmonizing certain procedural matters in toxic tort cases and allowing states to continue to regulate their own substantive areas of law,” writes Thacker.
The single question raised by CTS counsel that the Supreme Court will address is:  “Did the Fourth Circuit correctly interpret 42 U.S.C. §9658 to apply to state statutes of repose in addition to state statutes of limitations?”

Waldburger v. CTS Corporation