Law Article: Justices Lean Toward Landowners

Justices Lean Toward Landowners In CERCLA Fight

By Sean McLernon
Law360, New York (April 23, 2014)

The U.S. Supreme Court on Wednesday signaled support for a decision to revive contamination claims against CTS Corp., suggesting that Congress did not believe there was a distinction between statutes of limitations and statutes of repose when it amended the Comprehensive Environmental Response, Liability and Compensation Act.

The North Carolina statute of repose at issue prevents plaintiffs from bringing any claims arising more than 10 years after an act of pollution occurred. The Fourth Circuit in July found that CERCLA preempts statutes of repose like the one in North Carolina, despite CERCLA’s exclusive use of the phrase “statute of limitations.”

Under CERCLA, state statutory limitation periods cannot begin running prior to a plaintiffs’ knowledge of potential injury, the Fourth Circuit said, reviving claims that had been dismissed under the North Carolina statute.

CTS attorney and Jones Day partner Brian J. Murray argued that Congress was very careful to tread lightly when it enacted limits on state statutes of limitations, deliberately choosing not to mention statutes of repose in the law, but Justice Elena Kagan said that would defeat the law’s purpose.

“I mean, presumably the idea is you should have some chance to sue after you’ve discovered the injury and the cause of the injury,” Justice Kagan said. “And if here, the statute of repose is preventing that, why would Congress have wanted to modify a statute of limitations but not get rid of the statute of repose?”

Both Justice Kagan and Justice Antonin Scalia seemed to back the group of 25 landowners that launched the suit in 2011 after learning that local well water contained concentrated levels of hazardous toxins allegedly released from a facility owned by CTS until 1987.

Justice Scalia told Murray that he has never heard of this distinction between statutes of repose and statutes of limitations, and questioned whether Congress had ever enacted a statute making such a distinction. Justice Kagan said she had no knowledge of federal lawmakers separating the two terms either.

“Well, but in general, Mr. Murray, I think Justice Scalia is right, that, in general, Congress hasn’t made this distinction,” Justice Kagan said. “In general, this court has not made this distinction.”

Murray argued that Congress knew exactly what it was doing when it chose the language, noting that a study group considering changes to CERCLA before the law was passed did make the distinction.

“I come back to the text and the structure of the statute here, which again, only does one thing, moving a commencement date defined as the beginning of the period in which one of these actions may be brought,” Murray said. “That simply does not define a statute of repose.”

Justice Kagan remained skeptical, suggesting that Murray was giving Congress too much credit by arguing that Congress wanted to alter one and not alter the other because it did not want to impinge the state’s constitutional prerogatives.

“Now, that’s a very legally sophisticated Congress you’re asking us to imagine,” Justice Kagan said, drawing laughter inside the courtroom.

Justice Scalia also wondered whether Congress really would have understood the distinction.

“Are they not considered, as I used to consider them when I was in law school, and even as late as 1986, I would have considered that a statute of limitations,” Justice Scalia said. “Now, you think Congress is smarter. They — they know the law better.”

CTS received support from the federal government in the case, as U.S. Department of Justice attorney Joseph R. Palmore said that the relevant section of CERCLA “surgically modifies” state law tort actions and otherwise leaves them untouched.

“Congress would have gone about this in a much more straightforward way if it had wanted to accept the study group’s suggestion that it repeal or the suggestion was actually directed to the states that the states repeal statutes of repose, Congress would have done so expressly,” Palmore said. “It wouldn’t have done so by awkwardly laying a discovery rule on top of statutes of repose.”

That 700-page study group report, however, only used the term “statutes of repose” once, and that was within the heading of “statute of limitation,” the landowners’ attorney and Wake Forest University professor John J. Korzen told the court.

“And what the study group said is that in a handful of states, statutes of repose have the same effect of statute of limitations without a discovery rule barring people’s claims before they know they’ve been harmed,” Korzen said. “And it said nothing about one is substantive, one is procedural. It just had the same effect.”

Justice Ruth Bader Ginsburg also seemed to agree with the Fourth Circuit, saying that she believed Congress was trying to establish a federal requirement for a commencement date. “So when you ask the question, how much time do I have to sue for one of these CERCLA injuries, the answer would be three years after you know the cause of injury,” Justice Ginsburg said.

Justice Anthony Kennedy also said that he had not heard of a distinction between statutes of limitation and statutes of repose.

“I agree with Justice Scalia,” Justice Kennedy said. “I didn’t have Justice Ginsburg as a law professor, but I — this was new for me.”

According to the landowners’ suit, CTS stored “notable quantities” of the carcinogen trichloroethylene found in the residents’ drinking water and manufactured products containing cyanide, lead, chromium and other toxins. The district court had dismissed the suit after determining that the plaintiffs cannot bring claims against a company more than 10 years after the last alleged act or omission of that company — in this case, the 1987 sale of the plant — regardless of when the plaintiffs became aware of the harm.

CTS is represented by Brian J. Murray, Michael F. Dolan and Richard M. Re of Jones Day and E. Thomison Holman of Adams Hendon Carson Crow & Saenger PA. The landowners are represented by John J. Korzen of Wake Forest University School of Law. The case is CTS Corp. v. Waldburger et al., case number 13-339, in the U.S. Supreme Court

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