WASHINGTON (CN) - Distinguishing it from a statute of limitations, the Supreme Court on Monday found that a North Carolina statute of repose prevents landowners from suing over toxic contamination.
The dispute involves a tract of land in Asheville where CTS Corp. had for decades stored notable quantities of trichloroethylene (TCE) and manufactured products using TCE, cyanide, chromium VI and lead.
When CTS sold the facility in 1987, it promised realtors that the property "had been rendered in an environmentally clean condition." The company said that, "to the best of [its] knowledge, no on-site disposal or otherwise wanton disposal methods were practiced at [the] facility," and that as soon as "the existing inventory of materials contained in drums and other miscellaneous equipment within the plant [was] removed from the premises, no threat to human health or the environment [would] remain."
Dozens of buyers nevertheless soon learned that their well water contained concentrated levels of TCE and cis-1,2-dichloroethane (DCE), solvents that have carcinogenic effects.
David Bradley and Renee Richardson led the landowners in a lawsuit, but a federal judge dismissed the action under North Carolina's 10-year limitation on the accrual of real property claims.
A divided three-judge panel of the 4th Circuit nevertheless reversed
after finding that the discovery rule articulated in Section 9658 of the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA) pre-empts North Carolina's 10-year limitation.
The Supreme Court took up
the case this past February and reversed, 7-2, Monday.
At issue is the difference in how Section 9658 treats state-enacted statutes of limitations and statutes of repose.
Despite their common features, "the time periods specified are measured from different points, and the statutes seek to attain different purposes and objectives," Justice Anthony Kennedy wrote for the majority. "And, as will be explained, §9658 mandates a distinction between the two."
While Black's Law Dictionary explains that a statute of limitations creates "a time limit for suing in a civil case, based on the date when the claim accrued," Kennedy noted that a statute of repose "puts an outer limit on the right to bring a civil action."
"Like a discharge in bankruptcy, a statute of repose can be said to provide a fresh start or freedom from liability,' he explained. "Indeed, the double jeopardy clause has been described as 'a statute of repose' because it in part embodies the idea that at some point a defendant should be able to put past events behind him."
Equitable tolling meanwhile can apply to a statute of limitations but not to a statute of repose, "even in cases of extraordinary circumstances beyond a plaintiff's control," according to the ruling.
"As an illustrative example, under North Carolina law statutes of limitations may be tolled but statutes of repose may not," Kennedy wrote.
The Asheville property owners in this case contend that learned about the contamination in 2009, more than 20 years after taking ownership.
Kennedy said that one "altogether unambiguous textual indication that §9658 does not pre-empt statutes of repose is that §9658 provides for equitable tolling for 'minor or incompetent plaintiff[s].'"
"As noted in the preceding discussion, a 'critical distinction' between statutes of limitations and statutes of repose 'is that a repose period is fixed and its expiration will not be delayed by estoppel or tolling,'" Kennedy continued. "As a consequence, the inclusion of a tolling rule in §9658 suggests that the statute's reach is limited to statutes of limitations, which traditionally have been subject to tolling. It would be odd for Congress, if it did seek to pre-empt statutes of repose, to pre-empt not just the commencement date of statutes of repose but also state law prohibiting tolling of statutes of repose - all without an express indication that §9658 was intended to reach the latter."
The pre-emption is likewise implied because statutes of repose "creat[e] an unacceptable 'obstacle to the accomplishment and execution of the full purposes and objectives of Congress,'" the decision states.
The respondent property owners "argue that pre-emption of statutes of repose advances §9658's purpose, namely to help plaintiffs bring tort actions for harm caused by toxic contaminants, but Kennedy said "the level of generality at which the statute's purpose is framed affects the judgment whether a specific reading will further or hinder that purpose."
"CERCLA, it must be remembered, does not provide a complete remedial framework," he continued. "The statute does not provide a general cause of action for all harm caused by toxic contaminants. Section 9658 leaves untouched states' judgments about causes of action, the scope of liability, the duration of the period provided by statutes of limitations, burdens of proof, rules of evidence, and other important rules governing civil actions."
Ultimately the property owners did not show that, in light of the decision by Congress to leave those many areas of state law untouched, "statutes of repose pose an unacceptable obstacle to the attainment of CERCLA's purposes," the ruling states.
Neither Kennedy nor four other members of the majority joined the final section of the decision, which says the interpretation advanced by the property owners would strip statutes of repose from further serving any real function.
Chief Justice John Roberts and Justices Antonin Scalia, Clarence Thomas and Samuel Alito - all members of the majority who did not join in the aforementioned section -separately emphasized their belief "that '[t]he proper rule of construction for express pre-emption provisions is ... the one that is customary for statutory provisions in general: Their language should be given its ordinary meaning.''
"The contrary notion - that express pre-emption provisions must be construed narrowly - was 'extraordinary and unprecedented' when this court announced it two decades ago, and since then our reliance on it has been sporadic at best," Roberts continued. "For the reasons given in the balance of the opinion, ordinary principles of statutory construction demonstrate that 42 U. S. C. §9658 pre-empts only statutes of limitation and not statutes of repose."
Justice Ruther Bader Ginsburg wrote in dissent that the federally required commencement date under (a)(1) and (b)(4) of Section 9658 "displaces the earlier date state law prescribes."
"In lieu of uniform application of the 'federally required commencement date,' the court allows those responsible for environmental contamination, if they are located in the still small number of states with repose periods, to escape liability for the devastating harm they cause, harm hidden from detection for more than 10 years," Ginsburg added, joined by Justice Stephen Breyer. "Instead of encouraging prompt identification and remediation of toxic contamination before it can kill, the court's decision gives contaminators an incentive to conceal the hazards they have created until the repose period has run its full course.
"Far from erring, the Fourth Circuit, I am convinced, got it exactly right in holding that§9658 supersedes state law contrary to the federally required discovery rule. I would affirm that court's sound judgment."