The Fourth Circuit has expanded liability for private injuries resulting from abandoned waste sites by pre-empting state laws that limit the time in which civil actions may be brought against prior site owners. In a decision issued on July 9, a three judge panel by a 2-1 vote concluded that that “the discovery rule articulated in § 9658 of the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA), 42 U.S.C. §§ 9601-9675, preempts North Carolina’s ten-year limitation” of such actions. The complex analysis of the CERCLA discovery rule and the operative North Carolina statute will result in a former landowner being unable to dismiss suits at the outset of a proceeding. Instead, it is more likely to be required to defend the claims at trial.
The case involves an electroplating site in Asheville, NC where electronic parts were manufactured and disposed of that contained a variety of toxic substances including TCE, cyanide, chromium and lead. The former owner and defendant, CTS Corporation, sold the site in 1987 to a company which in turn sold parcels to persons who built homes on the property. In 2011, 25 landowners sued CTS under a variety of legal theories. CTS last used the property for activities that were identified as causing the plaintiffs harm in 1985. CTS moved to dismiss the action under a North Carolina statute of repose, similar to a statute of limitation. The district court granted the dismissal. “The court reasoned that the ten-year limitation is a statute of repose and that because [CERCLA] § 9658 mentions only statutes of limitations, it is inapplicable here.” The plaintiffs appealed.
The three judge panel analyzed § 9658 of CERCLA at length. It acknowledged that CERCLA is a complex statute, and explicitly found the statutory section at issue ambiguous. Before the CERCLA provision has any operative effect, “a state limitations period must meet two conditions before the federally required commencement date applies to a cause of action: (1) it must be an “applicable limitations period” that is “specified in the State statute of limitations or under common law” and (2) it must “provide a commencement date which is earlier than the federally required commencement date.” Id. § 9658(a)(1). The panel concluded that “in spite of § 9658’s repeated use of the phrase “statute of limitations,” the text is susceptible to an interpretation that includes repose limitations such as North Carolina’s.” This conclusion had the effect of setting aside the ten year limitation under North Carolina law, and applying the more generous federal provision which allows the suit to proceed to trial.
In a lengthy dissent, Judge Thacker reviewed the same text and legislative history as the majority and arrived at a diametrically different conclusion: “in my view the plain and unambiguous language of § 9658 indicates only statutes of limitations were intended to be preempted. Even if the preemptive effect of § 9658 were susceptible to two interpretations, a presumption against preemption would counsel that we should limit § 9658’s preemptive reach to statutes of limitations without also extending it to statutes of repose.” The balance of her dissent examined the distinctions—and confusion—between statutes of limitations and repose. She concluded that the North Carolina statute at issue was the latter, not the former, and that Congress in adding § 9658 to CERCLA after its original enactment did not intend to effect statues of repose. “That § 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. It is the prerogative of Congress to strike that balance.”
The case is Waldburger v. CTS Corporation, No. 12-1290 (July 10, 2013). For more information contact Blair Gardner in Jackson Kelly’s Charleston office at 304 340-1146..