Cases & Deals

CTS Corporation wins Supreme Court CERCLA preemption case

Clients CTS Corporation

On June 9, 2014, the U.S. Supreme Court ruled in favor of Jones Day client CTS Corporation that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not preempt state statutes of repose.

In CTS Corp. v. Waldburger, CTS was sued in a North Carolina hazardous waste tort action for alleged conduct occurring decades ago. CTS asserted that the claim was barred by North Carolina's statute of repose, which precludes tort liability predicated on conduct that is more than ten years old. In response, the plaintiffs argued that the state statute of repose was preempted by CERCLA. In relevant part, CERCLA, 42 U.S.C. § 9658, postpones the commencement dates for state statutes of limitations. The U.S. Court of Appeals for the Fourth Circuit agreed with the plaintiffs and held that CERCLA preempted not just statutes of limitations but also statutes of repose.

The Supreme Court agreed to review the case and reversed the Fourth Circuit. Siding with CTS, the Supreme Court concluded that the text and structure of the CERCLA preemption provision resolve the question presented. First, § 9658 replaces a single limitations period described as "the period specified in a statute of limitations," including four separate references to the term "statute of limitations." The term "statute of repose," however, does not appear in the statute at all. While not always precise, the historical distinction between the two terms was well enough established by the time Congress enacted § 9658 and specifically adopted a study group's recommendation to replace state statutes of limitations but not statutes of repose. Second, it would have been awkward to refer to two distinct periods -- limitations and repose -- by the singular "applicable limitations period." After all, statutes of limitations and statutes of repose, while motivated by overlapping policies, serve distinct purposes. Unlike statutes of limitations, measured from when a plaintiff's claim accrues, statutes of repose reflect a legislative judgment that a defendant should be free from liability after a certain time period measured from the defendant's last act or omission. Third, § 9658 replaces a period during which a lawsuit may be brought, which presupposes that a cause of action exists. Under the applicable statutes of repose, however, there may be no cause of action in the first place. Fourth, § 9658 contains a special tolling rule, which traditionally applied to statutes of limitations but not to statutes of repose. Finally, the Court rejected the plaintiffs' argument that statutes of repose should be preempted because they prevent the attainment of CERCLA's statutory purposes. The Court reasoned that Congress chose to leave many areas of state law untouched, and thus statutes of repose are not incompatible with the various competing considerations that motivated the passage of § 9658.

Brian J. Murray argued the case in front of the U.S. Supreme Court for CTS. The Jones Day team on petition to the Supreme Court also consisted of Michael F. Dolan and Dennis Murashko, both of the Firm's Chicago office.

CTS Corp. v. Waldburger, 134 S. Ct. 2175 (2014)