September 10

Case Alert: CTS Corp. v. Waldburger

In CTS Corp. v. Waldburger et al., a 7-2 decision delivered by Justice Anthony Kennedy, the U.S. Supreme Court narrowed the scope of the Comprehensive Environmental Response, Compensation, and Liability Act’s (CERCLA) preemption of state law. (134 S.Ct. 2175 (2014) (hereinafter “CTS Corp.”)). CERCLA was enacted in 1980 to provide a federal cause of action to recover cleanup costs resulting from the release of hazardous substances and pollution into the environment. Section 9658 of CERCLA starts the running of the statute of limitations “when a plaintiff discovers, or reasonably should have discovered, that the harm…was caused by the contaminant.” (Id. at 2180.) This type of statute of limitations is known as the discovery rule. If a tort claim is brought under state law, CERCLA’s section 9658 preempts state statutes of limitation that are in conflict with CERCLA’s statute of limitations. (42 U.S.C. § 9658(a)(1).). Lower courts, however, have disagreed as to whether CERCLA preempts state statutes of repose. In CTS Corp., the Court held that section 9658 does not preempt state statutes of repose and limited its preemptive power to only statutes of limitation.

This case arose out of North Carolina, which has a statute of repose that limits the time in which a tort suit can be brought against a defendant to 10 years following the defendant’s last culpable act. (CTS Corp, 134 S.Ct. at 2181.) Between 1959 and 1985, CTS Corporation operated an electronics plant that used hazardous chemicals in the manufacture and disposal of its electronics. In 2009, the Environmental Protection Agency informed the landowners that these hazardous chemicals had contaminated the groundwater under the property impacting their well. However, the Court determined that CTS Corporation’s last culpable act was when it sold the property in 1987. In 2011, 24 years after CTS Corporation sold the property, the landowners brought a state law nuisance action against CTS Corporation for contaminating their well water. The District Court dismissed the plaintiffs’ claim, holding that it was barred by the 10 year statute of repose. The Court of Appeal interpreted section 9658 more broadly to preempt statutes of repose and reversed. The Supreme Court granted certiorari.

The distinction between statutes of limitation and statutes of repose has not always been clear, and the Court acknowledged that at the time CERCLA was enacted the term “statute of limitations” could be used to refer to both. The time period that is set by a statute of limitations is based on the date when a claim accrues, or “when the plaintiff can file suit and obtain relief.” (Id. at 2182, (internal quotations omitted).) A statute of limitations incentivizes plaintiffs to diligently pursue their claims while the evidence is fresh. Statutes of repose, on the other hand, are measured from the date of defendant’s last culpable act or omission. (Id.) Statutes of repose protect defendants by creating a legislatively determined end date to potential liability; they are “said to provide a fresh start or freedom from liability.” (Id. at 2183.) Although, the Court acknowledged ambiguity in the meaning of the terms, it found a report prepared by the Senate Committee on Environment and Public Works to be persuasive, if not dispositive.

The report, Injuries and Damages from Hazardous Waste –Analysis and Improvement of Legal Remedies, distinguished between statutes of limitations and statutes of repose, and recommended that CERCLA preempt both types of state laws in order to protect against the “long latency periods involved in harm caused by toxic substances.” (Id. at 2181.) Nevertheless, section 9658 refers explicitly to statutes of limitations and makes no mention of statutes of repose. The Court reasoned that the language in section 9658 was adopted by Congress in the face of a specific recommendation to preempt both kinds of statutes in the report. Furthermore, statutes of repose were left out of the language in 9658 because Congress rejected the reports recommendation, and decided to leave the states with the authority to enact statutes of repose to limit a defendant’s liability after a certain date. The Court further noted that section 9658 incorporates the doctrine of equitable tolling, whereby a statute of limitations can be tolled due to circumstances that prevented the plaintiff from pursuing her claim. The Court emphasized that equitable tolling only applies to statutes of limitation because the policy behind a statute of limitations, a plaintiff’s diligent pursuit of claims, is not served when circumstances justify the plaintiff’s inability to do so. These policy considerations do not apply to statutes of repose because “the repose period is fixed” and “mandates that there shall be not cause of action beyond a certain point.” (Id. at 2187.) The Court concludes that Congress adopted section 9658 to specifically preempt statutes of limitation and not statutes of repose.

The Court reversed the lower court’s decision and found that the plaintiff’s state law nuisance action was barred by North Carolina’s statute of repose. The Court narrowly construed section 9658 and limited CERCLA’s preemptive strength. Statutes of repose have become more popular among the states due to the adoption of the discovery rule for statutes of limitation. (1 Toxic Torts Litigation Guide § 7:54.) Thus, the Court’s narrow reading of section 9658 could leave plaintiffs in states that have statutes of repose without a tort action to recover personal injury and property damage costs. On the other hand, it will prevent defendants from being brought into court for actions that occurred in the distant past. This ruling could also continue to encourage states to pass statutes of repose if they elect to limit a defendant’s liability for torts, including those that involve historic releases of hazardous substances. However, the Court’s ruling does not diminish a plaintiff’s ability to pursue recovery of clean-up costs under CERCLA.

For more information, contact:
Jennifer Hartman King
JHartmanKing@KingWilliamsLaw.com
916.379.7533

September 5

2014 Best of the Bar Winner: Jennifer Hartman King

A King Williams Law LLP attorney, Jennifer Hartman King, was recognized in The Sacramento Business Journal’s annual “Best of the Bar” special publication. The “Best of the Bar” focuses on local attorneys who have been nominated by their peers and vetted by a panel of their peers. Jennifer is one of the founding partners of King Williams Law LLP. This is the second year in a row that Jennifer has been recognized for her accomplishments in environmental law.

Click here for the full story about Jennifer Hartman King.

For more information, contact:
Jennifer Hartman King
JHartmanKing@KingWilliamsLaw.com
916.379.7533

September 5

Jennifer Hartman King rated as a Super Lawyer

Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The selection process includes independent research, peer nominations and peer evaluations.

SuperLawyers - Jennifer Hartman KingClick Here to visit Super Lawyers.

For more information, contact:
Jennifer Hartman King
JHartmanKing@KingWilliamsLaw.com
916.379.7533