In a bit of a surprise, the U.S. Supreme Court decided on June 9 that a civil action brought under Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) may be pre-empted by a state statute which creates a “statute of repose.”
The case is interesting for two reasons: first, because CERCLA contains a provision (§9658) which was designed to provide a uniform period within which claims may be brought; and second, because the Court concluded that under the text of the statute, Congress understood the distinction between statutes of limitations and of statutes of repose, and chose to pre-empt the former but not the latter.
CERCLA governs civil action for personal injury and property damage from the unauthorized release of pollutants into the environment. When CERCLA was amended in 1986, Congress added a provision, now codified at §9658, that provides a nationally uniform time period within which to bring claims upon discovery of the injury. Congress justified this provision on the basis that injuries from the gradual release of hazardous substances may sometimes take years to manifest themselves. Since statutes of limitations vary widely across the states, a national standard for asserting civil actions was thought necessary.
CTS Corporation operated an electronics plant in Asheville, North Carolina from 1959 to 1985, during which it used and released hazardous chemicals on site. In 1987, CTS sold the property to a buyer who continued the operations, but in turn eventually sold portions of the property to individuals. Those landowners together with adjacent property owners brought suit in 2011. Notwithstanding having been absent from its former property for almost a quarter century, CTS was named as a defendant.
CTS defended the claim on the basis of North Carolina’s statute of repose which bars all claims brought more than 10 years after the last act or omission of the defendant. The plaintiffs asserted that §9658 of CERCLA pre-empted this defense. Procedurally, the District Court found that the statute of repose did apply, was not affected by CERCLA’s preemption of the state statute of limitation, and barred plaintiff’s claims. The Fourth Circuit reversed, finding that §9658 preempted the statute of repose to the extent that it denied claims otherwise preserved by application of CERCLA. In a spirited and closely reasoned opinion, Judge Thacker dissented, finding a distinction between statutes of limitations and repose, and concluding that CERCLA pre-empted the former but not the latter. The Supreme Court agreed.
In a 7-2 decision authored by Justice Kennedy, the Court decided that §9658 does not preempt statutes of repose for three reasons. First, the purposes served by statutes of limitation and repose differ, with the first acting to toll actions while the latter imposes an absolute bar to actions. Second, the Court found that the Fourth Circuit erred by not looking at the precise text of the statute, but instead used CERCLA’s “remedial purpose” to justify interpreting it liberally. Third, notwithstanding imprecise usage and confusion between the concepts of statutes of limitation and statutes of repose, Congress had commissioned a study by legal scholars to address the issue of a uniform standard established by §9658. The commission’s final report distinguished the two concepts and recommended that Congress enact a uniform statute to preempt both. CERCLA, however, uses only the term “limitations” and disregards “repose.” “[W]hen Congress did not make the same distinction, it is proper to conclude that Congress did not exercise the full scope of its preemption power.” (Slip Op. at 13.)
The decision should not be interpreted to mean that Congress does not have the power to preempt statutes of repose, only that it did not do so in this instance. In addition, the decision may have only limited effect as other environmental statutes that provide for private actions do not have a section comparable to §9658. Nevertheless, the opinion does provide states with a legal basis to bar at least some CERCLA claims once the actual activities have concluded and a significant amount of time has passed.