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US Supreme Court ponders if state law nixes homeowners’ toxic tort claim

US Supreme Court ponders if state law nixes homeowners’ toxic tort claim

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The ability of a group of North Carolina homeowners to bring a lawsuit over latent contamination in their well water will come down to the U.S. Supreme Court’s answer to a single, if technical, question: Is there a functional difference between a statute of limitations and a statute of repose?

The issue in CTS Corp. v. Waldburger, No. 13-339, arises from the discovery of high levels of toxicity in the well water of homeowners in Asheville, N.C. The contamination, discovered in 2009, was caused by the use of the solvent trichloroethylene at a nearby CTS Corp. electronics manufacturing plant which closed down in 1985.

The homeowners filed a nuisance suit against CTS, but a federal court dismissed the complaint based on a North Carolina law which states that no real property-based causes of action “shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.”

On appeal, students from Wake Forest University’s Appellate Advocacy Clinic represented the homeowners and argued before the 4th U.S. Circuit Court of Appeals, which reversed. The 4th Circuit held that §309 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which prohibits state-imposed statutes of limitations on claims of injury based on hazardous substances, preempted the North Carolina law.

CTS’s petition for certiorari was granted by the Supreme Court.

Walking a fine line

At oral arguments Wednesday, Brian Murray, a partner in the Chicago office of Jones Day, argued on CTS’s behalf that the North Carolina law is a statute of repose which cuts off causes of action entirely, not a statute of limitations, and therefore §309 of CERCLA does not apply.

The CERCLA provision’s “structure, historical context, and other relevant considerations all … make clear that it [has] no effect on statutes of repose,” Murray said.

“But if you were to prevail, then [companies can] go to their state legislatures and say, ‘Enact a statute of repose. That would get us off the hook,’” Justice Ruth Bader Ginsburg said.

“There has not been a rash of moves [by] state legislatures [to enact these laws] since this law has been enacted,” Murray replied.

Justice Elena Kagan wondered if the distinction made sense.

“Why would [Congress] have wanted [to] not also get rid of the statute of repose?” Kagan asked. “Presumably, the idea is you should have some chance to sue after you’ve discovered the injury and the cause.”

Murray said Congress was walking a fine line: trying to preserve some causes of action without trampling on the right of states to set their own rules.

“It perceived potentially serious federalism problems” if it stepped over that line, Murray said.

Some justices asked whether the line was so fine as to be difficult to see.

“To tell you the truth, I’ve never heard of this distinction between statutes of repose and statutes of limitations,” Justice Antonin Scalia said.

Joseph Palmore, assistant to the U.S. solicitor general arguing as amicus in support of CTS, called §309 a “surgical modification” of state law meant only to stop limitations periods. The purpose of preempting state limitations laws is specific, he argued, and the reasoning doesn’t apply to statutes of repose.

“The policy consideration behind a statute of repose is related but distinct from a statute of limitations,” Palmore said. Limitations statutes are about “incentivizing a plaintiff to get into court quickly. The statute of repose is intended to provide certainty [to] the defendant” that it no longer faces potential liability.

Preserving claims vs. ending them

John Korzen, director of the Wake Forest clinic in Winston-Salem, N.C., argued on behalf of the homeowners.

He asserted that the CERCLA provision was designed “to preserve claims for latent harm from environmental releases, from a facility of hazardous waste, until the person discovers the cause of that latent harm.”

Statutes of repose or limitations, Korzen said, are “just two ways of saying the same thing.” They refer to “when an action may be brought or a period after which an action may not be brought.”

Chief Justice John Roberts Jr. suggested that depended on whether a state had a discovery rule. “The whole purpose of this was to require a discovery rule.”

“The purpose was to have a uniform trigger date that started the time to bring an action once you had discovered your harm,” Korzen replied.

“But the purpose of the statute of repose is not to preserve latent causes of action,” Roberts said. “It’s quite the opposite. It’s to put an end to in particular latent causes of action.”

“Congress’s purpose was to preserve claims, no matter what the period was,” Korzen insisted.

A decision is expected later this term.


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