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Waldburger v. CTS Corporation, no. 12-1290

Decided: July 10, 2013

The Fourth Circuit Court of Appeals reversed the district court’s grant of the defendant corporation’s motion to dismiss the plaintiff landowners’ nuisance action. The court held that the discovery rule articulated in § 9658 of the Comprehensive Environmental Response, Liability, and Compensation Act (CERCLA), 42 U.S.C. § § 9601-9675, preempts North Carolina’s ten-year limitation on the accrual of real property claims.

From 1959 to 1985, the defendant, CTS Corporation (CTS), operated the Mills Gap Road Electroplating Facility (the Facility) in Asheville, North Carolina. The Facility manufactured and disposed of electronics and electronic parts. In 1987, CTS sold the Facility, promising realtors that the property had been rendered in an environmentally clean condition. Portions of the land were eventually sold to the plaintiff landowners, who learned subsequent to their purchase that their land was contaminated. In 2009, they learned that their well water contained concentrated levels of trichloroethylene (TCE) and cis-1, 2-dichloroethane (DCE), both solvents that have carcinogenic effects. The landowners joined together and brought a nuisance claim.

In North Carolina, claims become nonexistent once ten years have passed since a defendant’s last tortious act, regardless of whether a claimant had knowledge of his harm within the ten-year window. This window is classified under state law as a statute of repose, which limits the time that a plaintiff has to bring a claim, based entirely on when the defendant acted. In this case, the last act or omission of CTS occurred in 1987, when it sold the Facility. Thus, when the landowners filed their nuisance action in 2011, CTS moved to dismiss, maintaining that North Carolina’s ten-year limitation on the accrual of real property actions barred the claim. The landowners countered, citing § 9658 of CERCLA as preemptive of North Carolina’s limitation. The court rejected the landowners’ argument, reasoning that the ten-year limitation is a statute of repose and that because § 9658 mentions only statutes of limitations, it is inapplicable here and recommended dismissal. Thus, in reviewing the district court’s dismissal, the Fourth Circuit addressed whether § 9658 preempts state statues of repose.

The court sought to interpret the statute in light of Congress’ intent. Therefore, the court first examined the text of the statute. The court found that the text of § 9658 was capable of at least two interpretations: (1) it is limited only to statutes of limitations and (2) it applies to both statutes of limitations and statutes of repose. Therefore, the court concluded that the statute was ambiguous. Further, even if the text were plain and unambiguous, the historically inconsistent use of the terms “statutes of limitations” and “statutes of repose” rendered sufficient ambiguity. Therefore, the court then examined the legislative history of the statute. Because CERCLA is a remedial statute, it should be given a broad interpretation to effect its ameliorative goals. Therefore, the court adopted the interpretation which makes § 9658 applicable to both statutes of limitations and statutes of repose, such as North Carolina’s ten-year limitation. The court held that the federally required commencement date in § 9658 preempts North Carolina’s ten-year limitation on the accrual of real property claims.

Full Opinion

– Sarah Bishop