Decided: March 2, 2016
The Fourth Circuit reversed and remanded the district court’s ruling.
Appellant Kent Stahle was diagnosed with leukemia and alleges that appellee CTS Corporation (CTS) was negligent in dumping toxic chemicals from an Asheville manufacturing plant into a local stream. Stahle argues that through exposure to the contaminated stream water during his childhood at property located downstream from the plant, the toxic chemicals eventually caused his leukemia. The district court dismissed Stahle’s complaint, holding that the 10-year statute of repose in Section 1-52(16) barred his action. At issue in this appeal is the scope of 1-52(16), which is commonly referred to as North Carolina’s Discovery Rule. The statute tolls the running of the statute of limitations for torts resulting in “latent injuries” although such actions remain subject to the 10-year statute of repose provision.
Federal jurisdiction in this matter rests in diversity, so the governing state law is applied. Because the Supreme Court of North Carolina had not explicitly ruled on the applicability of the statute of repose to disease claims, the Fourth Circuit instead must analyze the previous relevant case law decided by the Supreme Court of North Carolina to anticipate how it would rule. Consequently, the Fourth Circuit understood that under North Carolina law a disease is not a “latent injury,” and concluded that the Supreme Court of North Carolina would not find the 10-year statute of repose applicable to Stahle’s claim.
Specifically, the previous case law expressed a distinction between latent injury claims and those including disease due to the characteristics of disease as a general phenomenon. Unlike a latent injury, the legal injury and awareness of a disease occur simultaneously at diagnosis. The case law also specified that disease claims are not to be included within the statute of repose unless the Legislature expressly includes it.
The Supreme Court of North Carolina has explained that when the language of a statute is clear and without ambiguity, it’s plain meaning is applied. CTS argued that 1-52(16) is facially unambiguous and therefore applied to Stahle’s disease claims. This argument eventually supported the district court’s holding. However, while North Carolina courts are guided by the principle of “plain meaning,” the district court focused narrowly on the isolated text of subsection 16 to determine its plain meaning, while the Supreme Court of North Carolina “does not read segments of a statute in isolation.” The Fourth Circuit analyzed the overall scheme of North Carolina’s statutory limitations and repose statutes and determined that 1-52(16) appears plainly to apply to only some-but not all- personal injury claims, which supports the decision that a disease is not a latent injury. The appellee’s argument was further weakened by the fact that previous case law had held 1-52(16) to be ambiguous on its face.
Because 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, the Fourth Circuit held the statute of repose in Section 1-52(16) inapplicable to Stahle’s claim.
Accordingly, the Court reversed and remanded the district court’s ruling.