As the plaintiffs in this case learned the hard way, with a statute of repose, the time period begins to run from the date of the defendant's last culpable act, even if the plaintiff does not learn of its injuries before the time is up. And even CERCLA could not save them. (photo credit: www.ships-antiques.com)

As the plaintiffs in this case learned the hard way, with a statute of repose, the time period begins to run from the date of the defendant’s last culpable act, even if the plaintiff does not learn of its injuries before the time is up. (photo credit: http://www.ships-antiques.com)

On June 9, 2014, the U.S. Supreme Court issued a decision holding that the Comprehensive Environmental Response and Liability Act (CERCLA) preempts only state statutes of limitation and not statutes of repose. CTS Corp. v. Waldburger, No. 13-339, — S.Ct. —- (2014). The case involved a landowner’s state-law nuisance action based on environmental harm allegedly caused by the prior landowner. The prior landowner argued that because it had last owned the property 24 years ago, the plaintiff’s claim was time-barred by North Carolina’s “statute of repose,” which provides that “no cause of action shall accrue more than 10 years after the last act or omission of the defendant giving rise to the cause of action.” N.C. Gen. Stat. sect. 1-52(16). The plaintiff countered that the ten-year period had not yet expired because this state statute was preempted by CERCLA’s “discovery rule,” 42 USC 9658. Section 9658 provides that state statute of limitations periods applicable to actions for personal injury or property damage arising from the release of hazardous substances only begin to run when a plaintiff discovers that the harm in question was caused by the hazardous substance. In other words, the plaintiff argued that the 10-year period in section 1-52 only began when the plainitff first learned about the environmental harm to its property (which was less than ten years ago), and not when the environmental harm actually happened (which was more than ten years ago).

Thus, the issue before the Court was whether section 9658, which unquestionably applies to state statutes of limitations, also applies to statutes of repose. As the Court explained, whereas a statute of limitation creates a time limit for suing in a civil case based on the date when the claim accrued, a statute of repose puts an outer limit on the right to bring a civil action; it is based on the last culpable act of the defendant and unrelated to when (or even if) a plaintiff’s cause of action accrues. A statute of repose is a legislative judgment that after a certain period of time, a defendant should no longer be subject to liability—not unlike a discharge in bankruptcy. A key difference is that statutes of limitation are subject to equitable tolling, where the limitations period can be extended where the plaintiff faces extenuating circumstances. There is no tolling for statutes of repose.

The Court concluded that the legislative history and text of section 9658—which only refers to statutes of “limitation” and which includes equitable tolling provisions–indicated that Congress was aware of the difference between statutes of limitations and statutes of repose and intended CERCLA to preempt only the former. In support of its decision, the Court also noted the judicial principle that where a preemption clause is capable of more than one reading, courts should ordinarily accept the reading that disfavors preemption.

Justices Ginsberg and Breyer dissented, questioning why the majority resisted the “straightforward reading” of section 9658 that CERCLA’s discovery-based federal “commencement date” applies equally to the “commencement” of both statutes of limitation and repose.

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