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U.S. Supreme Court Echoes ACA amicus arguments in CTS Corporation v. Peter Waldburger, et al.

On June 9, the U.S. Supreme Court reversed an appellate court judgment in CTS Corporation v. Peter Waldburger, et al., issuing a decision that reinforces the foundations of the amicus brief that ACA submitted in support of CTS. The nation's highest court, in a 7-2 opinion delivered by Justice Anthony M. Kennedy, concluded that 42 U.S.C. S9558 (Comprehensive Environmental Response, Compensation, and Liability Act of 1980's Section 309) does not preempt state statutes of repose.

On March 3, ACA filed an amicus brief supporting U.S. Supreme Court petitioner CTS Corporation, in a case arguing that the U.S. Fourth Circuit Court of Appeals erroneously interpreted the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, commonly known as "Superfund") Section 309 to eviscerate federal preemption language and the effect of state statutes of repose for products' manufacturers. Oral arguments were heard in this case by the U.S. Supreme Court on April 23.

The case, CTS Corporation v. Peter Waldburger, et al., was in the U.S. Supreme Court on Writ of Certiorari to the U.S. Court of Appeals for the Fourth Circuit. ACA was joined in its amicus brief by the American Chemistry Council, American Petroleum Institute, National Association of Manufacturers, and Precision Machined Products Association.

In the lower court ruling, the split, three-judge panel found that although section 309's language "could reasonably lead to a conclusion that its application is limited only to statutes of limitations," an alternative reading is possible that encompasses statutes of repose. In doing so, the court effectually jettisoned CTS' argument that the plaintiffs' claims of toxic torts are time-barred under North Carolina tort law, which includes a 10-year statute of repose. CTS, and ACA in its brief, urged the Supreme Court to revert to a narrow, plain-text reading of the language of the law in order to uphold the constitutional principle of federalism and overturn the appellate court ruling.

"Under a proper interpretation of [section]9658, statutes of repose are not within Congress' pre-emption mandate. Although the natural reading of [section]9658's text is that statutes of repose are excluded, the Court finds additional support for its conclusion in well-established 'presumptions about the nature of pre-emption.' Medtronic, Inc. V. Lohr, 518 U.S. 470, 484-485 (1996) (citing Gade v. National Solid Wastes Management Assn., 505 U.S. 88, 111(1992)," wrote Justice Kennedy. "The effect of that presumption is to support, where plausible, 'a narrow interpretation' of an express preemption provision."

To that point, ACA's brief argued in its introduction and summary:

"By failing to appreciate the difference between statutes of repose and statutes of limitation, the court of appeals impermissibly expanded the plain text of 42 U.S.C. S9558 (CERCLA S309) to preempt state statutes of repose in addition to statutes of limitation. Properly understood, statutes of repose do not cut off the remedy as a statute of limitation does. Statutes of repose abolish the cause of action altogether ... This means that instead of being procedural rules, statutes of repose are substantive ... The {court of appeal) panel majority's overbroad reading of CERCLA thus unwittingly created a situation in which Congress is effectively dictating to the states the content of their substantive laws ... To begin, statutes of repose serve to reinforce the tort law theories under which we normally hold actors liable. Although the primary goal of the law in this area is to promote reasonable conduct, perpetual liability creates situations where companies would be incentivized to act unreasonably in an attempt to avoid liability. ... Section 309 could preserve lawsuits in any area--even far outside the environmental context--that happen to involve anything that could be considered a 'hazardous substance' under CERCLA ... Congress did not intend that result, and the plain text of S309 prohibits it."

ACA's brief emphasized that statutes of repose represent important policy choices made by states designed to ensure that designers and manufacturers do not face perverse disincentives to market and improve their products. This makes repose statutes just as much a substantive component of a state's tort law as, for example, the standard of proof that a plaintiff must adduce at trial to show liability.

Congress adopted CERCLA, an omnibus federal hazardous clean-up and cost recovery statute, including section 309 (also known as section 9658), which contains a "discovery rule"; this means that the time period in which plaintiffs must file a claim does not begin to run until they knew or should have known that the release caused their damages. Thus, S309 supplants these statutes and imposes a federal one ("the date the plaintiff knew, or reasonably should have known, that personal injury or property damages were caused or contributed to by the hazardous substance or pollutant or contaminant concerned").

ACA noted that this is purely a procedural device--setting the reasonable time period within which a plaintiff must file a suit based on when the alleged causal connection to injury has been discovered. In contrast, statues of repose, substantive in nature, extinguish causes of action altogether after a set period of time, e.g., 10 or 20 years, regardless of when the statute of limitations would begin to run. If Section 309's commencement date is preemptive across both procedural and substantive periods, the substantive statutes of repose will be effectively gutted, since their typically longer periods of time would not begin to run until the same time as typically shorter statutes of limitations. ACA argued that Congress did not intend to preempt applicable state statutes of repose, which are geared to benefit the civil justice system by providing the right balance of deterrence/incentives for behavior, and serve to help maintain a level playing field in environmental/toxic tort litigation, when it passed CERCLA.

Contact ACA's Tom Graves ( for more information.
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Title Annotation:ACA lessues In-Depth
Publication:JCT CoatingsTech
Date:Aug 1, 2014
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