The US Supreme Court recently announced it will hear an appeal of the Fourth Circuit’s decision in Waldburger v. CTS Corp., No. 12-1290 (4th Cir. 2013) involving the preemption of state statutes of repose by Section 9658 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).  In Waldburger, the Plaintiffs sued CTS Corporation for nuisance after discovering their lands were contaminated.  In 1987, CTS sold its land to a land acquisition partnership who then sold it to the Plaintiffs.  The Plaintiffs did not file their nuisance action until 2011.  CTS argued for dismissal, citing North Carolina’s ten-year statute of repose for real property actions.  The Plaintiffs countered, citing CERCLA Section 9658, which provides:

In the case of any action brought under State law for personal injury, or property damages, which are caused . . . by exposure to any hazardous substance . . . if the applicable limitations period for such action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute.”

The district court granted dismissal.  On appeal, however, the Fourth Circuit reversed, holding that the state statute of repose was preempted for three reasons: 1) the ten-year bar is located in a section titled “Limitations, Other than Real Property;” 2) the state statute technically meets the definition of an “applicable limitations period” as defined in CERCLA; and 3) the ten-year period’s commencement date is earlier than the federally required commencement date.

The dissent noted that the CERCLA definitions section defines “applicable limitations period” as “the period specified in a statute of limitations during which a civil action . . . may be brought.” (Emphasis original).  The dissenting judge also pointed to evidence that Congress understood the difference between a statute of limitation and a statute of repose and cited a “presumption against preemption” that has been endorsed by the Supreme Court.  See Bates v. Dow Agrosciences, LLC, 544 U.S. 431, 449 (2005).

An existing circuit split on this issue likely influenced the Supreme Court’s decision to hear this case.  The Ninth Circuit has held that “statute of limitations” in Section 9658 encompasses statutes of repose, while the Fifth Circuit has held to the contrary.  See McDonald v. Sun Oil Co., 548 F.3d 774, 777-78, 783 (9th Cir. 2008) and Burlington Northern & Santa Fe Rwy. Co. v. Poole Chem. Co., 419 F.3d 355 (5th Cir. 2005).  Should the Supreme Court decide that CERCLA Section 9658 preempts both state statutes of limitation and statutes of repose, companies who thought their liability had expired under an applicable statute of repose may nonetheless find themselves in court.