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Supreme Court Holds State Statutes of Repose Not Preempted by CERCLA

June 10, 2014

On Monday, June 9, 2014, the United States Supreme Court issued an opinion in CTS Corp. v. Waldburger , a case involving a lawsuit brought under the Comprehensive Environmental Response, Compensation, and Liability Act (commonly known as "CERCLA" or "Superfund") by a group of landowners against an electronics manufacturer allegedly responsible for decades-old pollution. [1] The Court held that CERCLA did not preempt a North Carolina state law, known as a statute of repose, that prevents a party from recovery if their suit is filed more than 10 years after the last culpable act of the defendant occurred.

The ruling is a potentially major victory for industries and states looking to protect businesses from pollution lawsuits based on historical business activities. States are now empowered, through statutes of repose, to determine how long companies may remain potentially liable under CERCLA for pollution caused by their historical operations.

The Court's opinion focuses on a provision in CERCLA that preempts state statutes of limitation, but does not explicitly reference state statutes of repose . Statutes of limitation establish timeframes within which a plaintiff must bring its claim and, in the context of CERCLA cases, generally begin to "run" when the plaintiff discovers the contamination. Statutes of repose, on the other hand, require that plaintiffs bring their claims within a timeframe based on when the contamination occurred, regardless of whether the plaintiff has discovered the contamination. Statutes of repose usually allow for a longer timeframe – 10 years is typical in many states – than statutes of limitation.

The landowners argued that CERCLA preempted North Carolina's 10-year statute of repose, but the majority disagreed. Because Congress only explicitly preempted state statutes of limitation but did not include statutes of repose within the same provision, the majority found that the principles of statutory interpretation required the Court to find that CERCLA does not preempt state statutes of repose.

For more information on the case and how it may affect your business, or for any other CERCLA-related questions, please contact Clark Hill's Environment, Energy and Natural Resources practice group.

[1] Case No. 13-339 (June 9, 2014)

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