First Legislative Response to CTS Corp. v. Waldburger

June 13, 2014.  The recent U.S. Supreme Court decision in CTS Corp. v. Waldburger  effectively denied the North Carolina plaintiffs the ability to seek compensation for property damage and health problems  caused by contamination of their drinking water wells. As noted in an earlier post, the decision  means that a North Carolina law barring  tort claims filed more than ten years after the last act giving rise to the claim will continue to be a significant obstacle for plaintiffs injured by environmental contamination. [See N.C.G.S. 1-52(16)]

The N.C. House of Representatives quickly responded to the CTS decision with proposed legislation. The House  gutted  a Senate bill on appearance bonds, replacing the original bill language with a provision excluding  some tort claims  “caused or contributed to by the consumption, exposure, or use of water supplied from groundwater contaminated by a hazardous substance, pollutant, or contaminant” from the 10-year  statute of repose in  G.S. 1-52(16).   Yesterday, a  House judiciary committee approved the new version  of Senate Bill 574; with no other committee referrals, the bill can go directly to the House calendar.

The bill would clearly benefit plaintiffs in  some  pending  toxic tort cases  — including  Marines who have  filed suit  over contaminated  drinking water at Camp Lejeune.   Presumably, the bill  intends to preserve the nuisance action filed by the plaintiffs in the CTS case.  The only question may come in interpretation of the bill’s effective date clause; the bill applies the exclusion to a pending  action “if there has been no final disposition with prejudice against that plaintiff issued by a court of competent jurisdiction as to all the plaintiff’s claims for relief to which this act otherwise applies”. The Supreme Court decision in CTS v. Waldburger  confirms the dismissal of the plaintiffs’ entire nuisance action based on the state statute of repose, which would certainly be considered a final disposition. If the intent of the bill is to resurrect the CTS plaintiffs’ claims, the effective date language may need to be clarified.

Unfortunately, the current bill draft does not fix the fundamental problem  created  by a 10-year statute of repose for toxic tort claims because it only provides relief to claimants whose last exposure to  contaminated groundwater occurred on or before June 19, 2013.   The bill  keeps  the 10-year statute of repose for damage claims based on exposure to environmental contamination that continues beyond that date or first occurs after that date. The limited exclusion from the statute of repose sunsets completely in 2023.

The same circumstances that made it impossible for the CTS plaintiffs to bring a damage claim within the 10 year statute of repose still exist — groundwater contamination may only be detected years after the last act that caused the contamination; limited state enforcement resources mean  delays  in fully assessing many contaminated sites; and  some of the health effects of groundwater contamination only develop over decades.  Pending cases don’t represent the universe of environmental contamination injuries in the state. New contamination incidents   continue to be discovered with some regularity as development moves into areas with groundwater contamination from past industrial activity or old waste disposal sites.  As noted in the earlier post, it is not unusual for the last act contributing to property damage or health effects from environmental contamination to have occurred more than a decade before discovery of the problem. As long as those conditions exist,  the  10-year statute of repose will  continue to  prevent people who have been harmed by environmental contamination from seeking compensation for personal injury and property damage.

One more piece of background information. Bloomberg News quoted John Korzen (director of the Appellate Advocacy Clinic at Wake Forest University School of Law, which represented the plaintiffs in the CTS case) as saying that only Connecticut, Oregon, Kansas and North Carolina have generally applicable statutes of repose.