June 11, 2014. In a case out of North Carolina, the United State Supreme Court has ruled that a state can cut off the time allowed for someone injured by environmental contamination to sue the person responsible — in many cases, closing off any legal remedy before the plaintiff even knows about the contamination and the damage it has caused. The decision in CTS Corp. v. Waldburger leaves the plaintiffs in that case without any recourse against the company alleged to be responsible for unsafe levels of industrial solvents in their drinking water wells. But unless either Congress or the N.C. General Assembly acts, the decision also closes the door on many others injured by environmental contamination.
The facts (as stated in the lower federal appeals court decision). CTS operated an electroplating facility on Mills Gap Road in Asheville, N.C. from 1959 to 1985 and used a number of toxic chemicals in the manufacturing processes including trichloroethylene (TCE), cyanide, chromium VI and lead. In 1987, CTS sold much of the 54-acre site to a realty company that in turn sold the property for residential development. Twelve years later, plaintiffs David Bradley and Renee Richardson learned that their home drinking water well had high levels of two solvents, TCE and cis-1, 2-dichloroethane (DCE), associated with increased cancer risk and other health effects. In 2011, Bradley, Richardson and 23 other property owners filed a nuisance action against CTS seeking remediation of the contamination and damages for current and future harm including reduced property values and potential health impacts.
The legal issue. Under North Carolina law, there is a three year statute of limitation for personal injury or property damage claims ( in legalese, “torts”). The statute of limitation only begins to run after the plaintiff knows or should have known of the injury. But the same law bars the filing of a tort claim more than 10 years after the last act of the defendant that gives rise to the damage claim even if the plaintiff did not know of the injury until later. This kind of outer limit on tort claims, known as a “statute of repose”, cannot be suspended even for good cause. Although the plaintiffs in the CTS case filed suit within three years after first learning of the well contamination as required by the statute of limitation, CTS Corporation’s “last act” had been the sale of the Mills Gap Road property in 1987 — 22 years earlier. In federal district court, CTS successfully moved to dismiss the plaintiff’s nuisance action based on North Carolina’s 10-year “statute of repose”.
The issue on appeal was whether the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) preempts the state’s 10-year “statute of repose”. CERCLA sets a federal framework for response to environmental contamination caused by hazardous substances, but Congress elected to rely on state laws to provide a remedy for individuals harmed by environmental contamination. Since environmental contamination can go undetected for long periods of time and cause injury — such as cancer — that only develops over decades, CERCLA provides that the time allowed to bring a claim under state tort law only begins to run when the plaintiff learns or should have learned of the damage or injury. CERCLA § 9658 expressly preempts state laws that use a different starting point for time limitations on toxic tort claims.
The U.S. Supreme Court decision. The Fourth Circuit Court of Appeals concluded that CERCLA § 9658 preempts both statutes of limitation and statutes of repose, allowing the plaintiff’s lawsuit against CTS to go forward. The U.S. Supreme Court (after a long discussion of the differences between statutes of limitation and statutes of repose and the history of CERCLA § 9658) reversed the appeals court decision and held that CERCLA § 9658 only preempts statutes of limitation. As a result, North Carolina’s 10-year statute of repose bars property owners near the CTS site from suing the company for contamination of their drinking water wells. One of the two dissenting U.S. Supreme Court justices, Stephen Breyer, noted the clear implication of the CTS decision, saying that it
allows those responsible for environmental contamination…to escape liability for the devastating harm they cause, harm hidden from detection for more than 10 years. Instead of encouraging prompt identification and remediation of toxic contamination before it can kill, the Court’s decision gives contaminators an incentive to conceal the hazards they have created until the repose period has run its full course.
Others affected by the CTS decision. There have been a number of contamination incidents in North Carolina that follow the pattern of late discovery and delayed understanding of human health effects. Two examples:
U.S. Marine Corps Base Camp Lejeune. In 1982, the Marine Corps discovered that drinking water from two of the eight water treatment plants on base had high levels of contaminants. The Tarawa Terrace water system had high levels of the dry-cleaning solvent PCE (perchloroethylene or tetrachloroethylene). PCE has been associated with increased cancer risk; kidney and liver damage; and reproductive effects. (The PCE came from an off-base dry-cleaner that had improperly handled its waste.) The Agency for Toxic Substances and Disease Registry (ATSDR) has estimated that PCE concentrations in water produced by the Tarawa Terrace water treatment plant exceeded the current federal drinking water standard for much of the 30-year period between November 1957-February 1987. The most contaminated wells were shut down in February 1985.
In 1985, Camp Lejeune also confirmed contamination in wells supplying the Hadnot Point water treatment plant. The primary contaminant was TCE, but testing also showed elevated levels of PCE, benzene and other chemical compounds produced by degradation of TCE. The Hadnot Point well contamination came from several different sources — leaking petroleum underground storage tanks, industrial spills, and old waste disposal sites. ATSDR has estimated that water from the Hadnot Point system exceeded current drinking water standards for at least one contaminant from August 1953 until January 1985.
Between 500,000 and 1 million Marines and family members may have been exposed to contaminated drinking water at the base before the contaminated wells were shut down in 1985. Information about the contamination and its possible health effects developed slowly. ATSDR just published the results of a health study of Camp Lejeune Marines on February 19, 2014. The study, reported in Environmental Health, found a 10% higher incidence of certain cancers among Marines stationed at Camp Lejeune between 1975-1985 as compared to Marines stationed at Camp Pendleton during the same time period.
Nearly 30 years went by between the initial contamination of the Camp Lejeune wells and discovery of the contamination in 1982. Another 30 years passed between closure of the most contaminated wells and development of information on the potential health effects on a large, but transient, population of service members and their families. Given the many different parties potentially involved — the owners and operators of several different contamination sources and the Marine Corps as the water system operator — it may be difficult to pinpoint the timing of every “last act” contributing to injury. But given the 60-year history of events at Camp Lejeune, the CTS decision may well remove any legal remedy for Marines harmed by the drinking water contamination.
Stony Hill Road TCE Contamination, Wake Forest. In 2005, the Wake County Health Department found TCE in a drinking water well serving a home on Stony Hill Road in Wake Forest. DENR’s Division of Water Quality tested six nearby wells, but found no additional contamination. The the one contaminated well was closed and DENR shifted its efforts to finding the person (or company) responsible for the contamination. Soil tests suggested that a property next door to the one contaminated well had been the source of the TCE contamination; two circuit board assembly companies had operated on the property. When DENR received no response to repeated requests for the owner to assess the extent of the groundwater contamination coming from the property, DENR initiated another round of state well testing in 2012. The 2012 tests revealed another contaminated well, triggering a broader well testing program carried out with the help of the U.S. Environmental Protection Agency. The 2012 tests ultimately found TCE in 21 residential wells; 14 wells had levels of TCE over the federal drinking water standard.
Seven years had passed between identification of the first contaminated well on Stony Hill Road and confirmation that contamination had spread to nearly two dozen other wells. Since the 2005 testing found only one contaminated well located immediately next door to the likely contamination source, Stony Hill Road had been considered low risk and fell down the list of hazardous sites competing for the attention of DENR’s Inactive Hazardous Sites program. The state’s Inactive Hazardous Sites Act, N.C. General Statute 130A-310 et seq., also has weaknesses that make it possible for a polluter to simply wait — taking no action to fully assess and remediate contamination until DENR forces the issue through an enforcement order. Given limited state resources and a need to prioritize sites based on known risk, ten years can easily go by before a contamination incident is fully assessed.
Response to the CTS decision. The U.S. Supreme Court decision dealt with a narrow issue — interpretation of the CERCLA provision on statutes limiting the time to file a damage claim based on environmental contamination. Seven justices concluded that Congress had not intended for the provision to affect state statutes of repose; the two dissenting justices disagreed. Congress has the power to make the intent of the federal law more clear and remove any doubt about the impact on statutes of repose. Closer to home, the N.C. General Assembly has the power to amend state law to remove the 10-year limitation on damage claims arising out of environmental contamination. Otherwise, North Carolina citizens will continue to be caught in a Catch-22 — too few state resources to insure that people potentially damaged by environmental contamination will know in time to use the legal remedies available and state laws that encourage polluters to wait until the clock runs out.