June 09, 2014

Supreme Court Decides CTS Corp. v. Waldburger

On June 9, 2014, the United States Supreme Court decided CTS Corp. v. Waldburger, No. 13-339, holding that the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) does not preempt state statutes of repose.

CTS Corporation owned property in North Carolina at which it stored certain hazardous substances. When CTS sold the property in 1987, it promised the site was environmentally sound. The buyer later sold portions of the property, and those later buyers learned in 2009 that their well water was contaminated with these hazardous substances.

The buyers and adjacent landowners sued CTS in a state-law nuisance action, seeking remediation of the environmental harm and damages for past and future harm. CTS moved to dismiss, arguing that North Carolina's statute of repose, which prevents suits brought more than 10 years after a defendant's last culpable act, barred the plaintiffs' claim. The district court agreed, concluding that CTS's last possible culpable act occurred when it sold the property in 1987, more than 20 years before the plaintiffs sued. A divided panel of the Fourth Circuit reversed, holding that 42 U.S.C. § 9658, a provision of CERCLA that preempts statutes of limitations that apply to state-law tort actions in certain circumstances, preempted North Carolina's statute of repose.

The Supreme Court reversed the Fourth Circuit's decision, holding that § 9658 preempts only state statutes of limitations and not state statutes of repose. The Court explained that 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, however, "puts an outer limit on the right to bring a civil action," measured from the date of a defendant's last culpable act or omission. Unlike a statute of limitation, which may be equitably tolled for reasons such as the plaintiff's inability to discover his or her injury, a statue of repose may not be equitably tolled; it is essentially an absolute bar on a defendant's liability, regardless whether the plaintiff's injury has even occurred.

In holding that § 9658 preempted only state statutes of limitations, the Court first reasoned that the statutory language, which referred only to a "statute of limitations," supported its conclusion, even though a 1982 report commissioned by Congress had recommended preempting both statutes of repose and statues of limitations. Instead, the Court found that the report's explicit reference to statutes of repose as a distinct and separate category supported the Court's conclusion that Congress did not intend to preempt statutes of repose when it failed to include the term in the statute. Second, the use of the singular term "the applicable limitations period" to preempt two different time periods with different purposes would be an awkward statutory construction. Third, the definition of "the applicable limitations period," as "the period" during which a "civil action" under state law "may be brought" calls to mind a statute of limitations, rather than a statute of repose, which does not relate to the accrual of a cause of action. Fourth, § 9658 provides for equitable tolling for certain plaintiffs, and statutes of repose cannot be tolled. Finally, CERCLA does not provide a complete remedial framework for all harm caused by toxic contaminants, so the fact that some claims may still be time-barred does not provide an "unacceptable obstacle" to CERCLA's goals.

Justice Kennedy delivered the opinion of the Court, and was joined in full by Justices Kagan and Sotomayor. Chief Justice Roberts and Justices Scalia, Thomas, and Alito joined all but a portion of the opinion. Justice Ginsburg filed a dissenting opinion, in which Justice Breyer joined.

Download Opinion of the Court

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