It is well-settled that CERCLA displaces state law statutes of limitation. After its recent  decision in CTS Corp. v. Waldburger, et al., No. 13–339 (U.S. June 9, 2014), the Supreme Court made it clear that CERCLA does not also displace statutes of repose for state law tort actions. In CTS Corp., the corporation stored harmful chemicals on its property located near Asheville, NC, which it sold in 1987.  The contamination was not discovered until 2009 and a lawsuit was not filed until 2011, 24 years after the company sold the property. The district court granted defendant’s motion to dismiss plaintiff’s nuisance claim, holding that the 10-year statute of repose barred this suit outright. The Fourth Circuit reversed, and found that the CERCLA provision which preempted statutes of limitations was ambiguous as to whether it also preempted statutes of repose.

On appeal, the Supreme Court answered this question when it reversed the Fourth Circuit and held that state statutes of repose are not preempted by CERCLA. The Court found that CERCLA makes a distinction between statutes of limitation and repose, and focused on the different purposes and objectives of the two types of statutes, as well as the differences in measuring the time period. After a thorough look at CERCLA’s language, as well as an examination of the differences between statutes of repose and limitation, the Supreme Court held that CERCLA does not preempt state statutes of repose, and that a suit filed outside of a state’s statute of repose time period is barred.

This, alas, affirms and potentially strengthens current law in North Carolina.  In a case in which this office served as counsel of record, the North Carolina Court of Appeals held, in Hodge v. Harkey, 178 N.C. App. 222 (2006), that the 10-year statute of repose is an affirmative defense in land contamination cases. The facts of Hodge are similar to those of CTS Corp., in that the plaintiffs did not discover the contamination until over 20 years after the defendants sold the property. In Hodge, , the court held that the “last act” in a land contamination case is “the last date the party owned the offending property in which USTs were buried, owned a UST located on the property, or delivered gasoline to a UST.” The Supreme Court’s decision in CTS did not overturn the Hodge decision, and, in fact, may have strengthened the statute of repose as an affirmative defense in land contamination cases.

In response to the CTS Corp. ruling, North Carolina has already enacted a law that excludes certain tort claims relating to groundwater contamination by a hazardous substance from North Carolina’s 10-year statute of repose.  The legislation excludes from the 10-year statute of repose claims for:

personal injury, or property damages caused or contributed to by the consumption, exposure, or use of water supplied from groundwater contaminated by a hazardous substance, pollutant, or contaminant, if the claimant’s last exposure to the contaminated groundwater occurred on or before June 19, 2013.

 While the legislation does provide benefit for plaintiffs in some pending cases, including civilian claims regarding contaminated water at Camp Lejeune, it is not certain that it would even provide relief for the plaintiffs in the CTS case.  The law’s language suggests that it would apply only to pending claims “if there has been no final disposition with prejudice against that plaintiff issued by a court of competent jurisdiction as to all the plaintiff’s claims for relief.”  It is hard to imagine dispositions more “final” than those rendered  by the US Supreme Court, thus apparently leaving the CTS plaintiffs without recourse.   Certainly, it does not address the fundamental problem of the universe of property owners and residents who will continue to be impacted by contaminated groundwater or other latent environmental contamination that resulted from releases occurring outside the 10-year statute of repose.  Furthermore, the carve-out provision would expire completely in 2023.

North Carolina stands with only a few other states (Connecticut, Oregon, and Kansas) in having a generally applicable statute of repose which effectively cuts off any private recourse against the parties responsible for the contamination.  While the North Carolina Legislature should be commended for making even this small concession to private individuals seeking redress for past contamination, this new law does little to address the underlying problems. With fewer public resources available for enforcement and remediation, the Legislature should not merely have placed a Band-Aid on a couple of press-worthy pending cases. It should have extended the statute of repose to 15 or 20 years, or permanently excluded its application to all claims relating to latent contamination in order to provide a strong incentive for responsible parties to clean up problems left behind.  While the short session produced a Band-Aid response to an immediate problem, we urge the Legislature to consider effecting real and lasting change to the Statute of Repose in the next long session.

Our thanks to R. Kyle Evans, rising third year student at UNC School of Law, who contributed to this article.