Monday, June 9, 2014
The Supreme Court ruled today in CTS Corp. v. Waldburger that the federal Comprehensive Environmental Response, Compensation, and Liability Act, or CERCLA, does not preempt a state statute of repose that blocked the plaintiffs' state-law nuisance claim for environmental damage caused by the defendant. (A statute of repose sets a time limit on the filing of a complaint, much like a statute of limitations.) The case means that state-law claims for environmental damage that fall outside a state's statute of repose (because the plaintiffs didn't learn about the damage until years after the defendants caused it), including the plaintiffs' case here, will be dismissed--unless and until Congress changes CERCLA to provide for preemption of state statutes of repose.
The case arose when a group of property owners sued CTS for environmental damage to their land. CTS previously ran an electronics plant on the land, where it manufactured and disposed of electronics and electronic parts. As part of the operation, CTS stored certain chemicals. CTS later sold the property to the plaintiffs, certifying it as environmentally sound.
The plaintiffs realized that the property wasn't environmentally sound--but 24 years after the sale. So when they sued, CTS successfully moved to dismiss the case based on the state statute of repose, which prevents subjecting a defendant to a tort suit more than 10 years after the last culpable act of the defendant. The plaintiffs argued that CERCLA preempted the statute of repose, allowing their case to move forward. The Court today agreed with CTS.
Justice Kennedy wrote the majority opinion and said that the text, the historical understanding of the language, and the Court's "presumptions about the structure of pre-emption" all pointed to preemption. The opinion turned in large measure on the historical understanding of the difference between a statute of limitations and a statute of repose. That's because everyone agrees that CERCLA's plain language preempts state statutes of limitations. The question was whether it also covered statutes of repose. The Court said no. (The Court said that CERCLA's drafters understood that there was a difference between the two, but included only statutes of limitations, not statutes of repose, in the preemption clause.)
Justices Sotomayor and Kagan joined Justice Kennedy's opinion in full. Chief Justice Roberts and Justices Scalia, Thomas, and Alito joined in the result and all but the portion that relied on the Court's "presumptions about the structure of pre-emption."
Justice Ginsburg wrote a dissent, joined by Justice Breyer. Justice Ginsburg argued that CERCLA's "discovery rule" displaced the commencement-of-action date in the state statute of repose. She wrote that the CERCLA's discovery rule set the commencement date as the date that the plaintiffs actually knew (or reasonably should have known) that the injury was caused by the defendant, not the date of the defendant's last act or omission (in the state statute of repose). This meant that the plaintiffs filed within the statute of repose, and that their case should be allowed to proceed.
As in all preemption cases, Congress could have the last word. Here, as elsewhere, Congress can change the federal statute to provide for preemption of state law after the Court interpreted it not to preempt state law (or vice versa). That seems unlikely here, though.