In a 7-2 decision, the US Supreme Court in CTS Corporation v. Peter Waldurger et al, ___ S. Ct. ____, 2014 WL 2560466 (June 9, 2014) upheld a North Carolina law known as a statute of repose which had barred tort claims by property owners for damages against a manufacturer which had contaminated property which it subsequently sold more than twenty years prior to the lawsuit. Even though commentators are decrying that the decision will be used to deny recovery for injuries caused by contaminated groundwater such as the claims at Camp Lejeune North Carolina, those fears are misplaced. The decision should not substantially impact environmental litigation.
1. Statutes of Limitations Are Different than Statutes of Repose
A provision of CERCLA, 42 USC 9658, provides that statutes of limitations in a state could not be shorter than the statute of limitations under federal law for damages caused by the release of hazardous substances. The Court held that this CERCLA provision did not apply to a North Carolina statute of repose which had barred tort damages asserted by property owners for events occurring more than 24 years previously.
Statutes of limitations provide a time limit in which an injured person must bring a lawsuit after the elements of the claim have accrued. Most states including the federal government use a standard known as the “discovery rule” which provides that a claim does not accrue under the injury and conditions causing the injury are discovered.
A statute of repose puts an outer limit on the right to bring a lawsuit from the date of the last culpable act by a defendant. Such a statute cuts off claims after a certain absolute period. Statutes of repose are common in many states in regard to construction defects or product liability claims. There is no federal statute of repose in regard to hazardous waste releases.
The Court held that the provisions in CERCLA which preempts state statutes of limitations which are shorter than federal law did not apply to the distinct and separate statutes of repose that may exist in states such as North Carolina. Statutes of repose are not referenced in CERCLA. The decision in CTS did not create new law. The Court simply chose not to expand existing law.
2. Typical Personal Injury Claims Caused By Hazardous Substances Should be Distinguishable from the Property Damages at Issue in the CTS Decision
Many commentators have quickly asserted that this decision will adversely impact plaintiffs in litigation similar to the litigation over contaminated drinking water at Camp Lejeune Marine base in North Carolina. In the Lejeune litigation, contaminated groundwater occurring several decades ago may still have latent health impact on persons who have drank the water. In fact, the Justice Department filed a notice with the Eleventh Circuit Court of Appeals where some claims in the Lejeune litigation are pending and asserted that the CTS decisions mandates that the North Carolina statute of repose be applied to those cases. The claims in the two sets of cases are very distinguishable. The claims in the Lejeune litigation involve personal injuries in contrast to the property damage claims at issue in CTS. There is substantial debate as to whether the North Carolina statute of repose even applies to latent personal injury claims. Further the Court in the CTS decision recognized that a statute of repose does not commence until the final act or omission creating liability has occurred. A substantial portion of the claims in the Lejeune litigation relate to the failure of the government to warn of an ongoing danger. Where a duty to warn of a dangerous condition exists, the failure to warn is an ongoing breach of duty. Personal injury claimants in the Lejeune litigation should be able to establish substantial distinctions between their personal injury claims and the claims of property owners at issue in the CTS decision.
3. The Impact of the CTS Decision On Environmental Lawsuits Should be Limited
The impact of the ruling in CTS is likely to be limited.
- The decision has no effect on claims based on federal law.
- Claims for recovery of costs to remediate a contaminated property under 42 USC 9607 would not be barred regardless of when the release occurred.
- Claims for contribution as to the cost or remediation under 42 USC 9613(f) would not be barred.
- Citizen suits under RCRA’s 42 USC 6972 for abatement of prior releases of hazardous substances would not be barred.
- Claims based on state statutes or common law that are not subject to repose statutes are not barred.
- Existing theories under state law which have sustained asbestos and similar toxic tort litigation are not impacted.
- Claims based upon a continuing tort should not be barred. As noted above, where a duty to warn of a dangerous condition exists, the failure to warn is an ongoing breach of duty. The duty continues after the event that created the danger.
The CTS decision may disappoint parties that sought to expand rights for recovery of claims but the decision did not alter existing legal principles. The ultimate impact is likely to be very limited.