Source: http://www.businessinsurance.com, June 9, 2014
By: Judy Greenwald
The U.S. Supreme Court on Monday held that plaintiffs were time-barred in a pollution case from pursuing their claims under the Comprehensive Environmental Response compensation and Liability Act of 1980, more commonly known as Superfund.
At the heart of the high court’s 7-2 ruling in CTS Corp. v. Peter Waldburger is the distinction between state statutes of limitations and statutes of “repose.”
While both are mechanisms used to limit the time within which firms can be held liable, the statute of limitations creates a time limit for suing in a civil case based on the date when the claim occurred. A statute of repose bars any suit that is brought after a specified time since the defendant acted, even if this period ends before the plaintiff has suffered an injury.
There are at least five states, North Carolina, Connecticut, Kansas, Oregon and Alabama, that have such litigation, according to court papers.
According to the ruling, Elkhart, Indiana-based CTS Corp. ran an electronics plant in Asheville, North Carolina, from 1959 to 1985, where it manufactured and disposed of electronics and electronics parts. In the process, it stored the chemicals trichloroethylene and cis-1,2-dichloroethane.
CTS sold the property in 1987, promising the site was environmentally sound, according to the ruling. The buyer eventually sold portions of the property to individuals, who along with adjacent landowners, filed suit alleging damage from contaminants in the land. The suit was filed in 20011, 24 years after the property was sold.
Citing North Carolina’s statute of repose, which says suits may not be brought more than 10 years after the “last culpable act” of the defendant, the U.S. District Court in Asheville dismissed the litigation, but was overturned by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia.
The Supreme Court held that the North Carolina statute of repose was not pre-empted by CERCLA’s discovery rule, despite the fact that it would have been pre-empted by the statute of limitations. It said Congress did not explicitly pre-empt the states’ statutes of repose.
“CERCLA, it must be remembered, does not provide a complete remedial framework,” said the majority opinion. “The result of respondents’ interpretation” that the statute of repose does not apply, “would be that statutes of repose would cease to serve any real function. Respondents have not shown the statute has the clarity necessary to justify that reading.”
In her dissent, Justice Ruth Bader Ginsburg states, “The distinction the Court draws between statutes of limitations and repose prescriptions cannot be what Congress ordered.”
Commenting on the ruling, attorney Cal R. Burnton, a partner with law firm Edwards Waldman Palmer L.L.P. in Chicago, said the ruling “is a step in the right direction, helping prevent companies from being judged on standards that may not be in place anymore.”