Gravel2Gavel Construction & Real Estate Law Blog
Twice, courts have been called upon to interpret North Carolina’s 10-year statute of repose in connection with injuries allegedly stemming from the release of hazardous substances. CTS Corporation v. Waldburger involved CTS’s liability under CERCLA as the past owner of a manufacturing facility in North Carolina whose operations resulted in the release of hazardous substances which allegedly caused damage to Waldburger’s land. Stahle v. CTS Corporation involved CTS’s liability stemming from the discharge of toxic solvents into a nearby stream to which allegedly Stahle was exposed. CTS prevailed with its argument that the statute of repose barred claims against it in Waldburger (property damage) but it was not so fortunate in Stahle (personal injury).
Waldburger
In Waldburger, the U.S. Court of Appeals for the Fourth Circuit held that CERCLA preempted North Carolina’s statute of repose, and CTS could not therefore rely on state law to have the lawsuit dismissed. North Carolina’s statute of repose prevents subjecting a defendant to a tort suit brought more than 10 years after the last culpable act of the defendant. N.C. Gen. Stat. Ann. § 1-52(16) (“[N]o cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.”). Waldburger appealed the decision to the Supreme Court and, on appeal, Waldburger challenged that Section 9658 of CERCLA preempts this statute.
Section 9658(a)(2) provides that “[e]xcept as provided in [Subdivision (a)(1)], the statute of limitations established under State law shall apply in all actions brought under State law for personal injury, or property damages, which are caused or contributed to by exposure to any hazardous substance, or pollutant or contaminant, released into the environment from a facility.” Subdivision (a)(1) provides that “[i]n the case of any action brought under State law for personal injury, or property damages, which are caused or contributed to by exposure to any hazardous substance, or pollutant or contaminant, released into the environment from a facility, 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.” For purposes of Section 9658, the term “federally required commencement date” means “the date the plaintiff knew (or reasonably should have known) that the personal injury or property damages… were caused or contributed to by the hazardous substance or pollutant or contaminant concerned.” 42 U.S.C.§ 9658(b)(4)(A). The term “applicable limitations period” is defined as “the period specified in a statute of limitations during which a civil action … may be brought.” 42 U.S.C.§ 9658(b)(2).
Upon review, the Supreme Court first distinguished between state-enacted statutes of limitations and statutes of repose, noting that “the time periods specified are measured from different points, and the statutes seek to attain different purposes and objectives.” “[A] statute of limitations creates ‘a time limit for suing in a civil case, based on the date when the claim accrued.'” In contrast, a statute of repose “puts an outer limit on the right to bring a civil action.” It further noted that “[s]tatutes of limitations, but not statutes of repose, are subject to equitable tolling.” The Court found that “[i]n light of the distinct purpose for statutes of repose, the definition of ‘applicable limitations period’ (and thus also the definition of ‘commencement date’) in § 9658(b)(2) is best read to encompass only statutes of limitations.” The Court, reversing the Court of Appeals, held that, “[u]nder a proper interpretation of § 9658, statutes of repose are not within Congress’ pre-emption mandate.”
Stahle
In early March of 2016, the U.S. Court of Appeals, in Stahle, again ruled against CTS’s attempts to invoke North Carolina’s 10-year statute of repose to avoid liability. This time the claims involved alleged personal injuries. Stahle’s injuries allegedly stemmed from CTS operation’s discharge of toxic solvents into a nearby stream to which he was exposed and, many years later, caused his leukemia. Stahle lived in the area of the plant from 1959 until 1968, but filed his lawsuit in 2014. Since there was no definitive decision from the Supreme Court of North Carolina construing the statute of repose in such situations, the Court of Appeals, sitting in diversity, was compelled to make an educated guess as to how the Supreme Court would interpret the statute.
The Court of Appeals cited to Waldburger‘s analysis of the distinction between statutes of limitations and repose. However, it rejected CTS’s suggestion that Waldburger supports its argument in the instant case: “The Supreme Court in Waldburger held that the North Carolina statute of repose was not preempted. 134 S. Ct. at 2185-88. At issue here is whether the non-preempted North Carolina statute applies to claims arising from disease. This issue was not before the courts in Waldburger, and Waldburger has no bearing on the current case.”
Reviewing many cases, the Court of Appeals concluded that “the Supreme Court of North Carolina considers Section 1-52(16) only applicable to certain latent injuries, and because disease is not a latent injury, would not find Section 1-52(16) applicable to Stahle’s claim.”