SUPERFUND:

Arcane arguments, big stakes as Supreme Court hears N.C. cleanup case

The Supreme Court grappled with abstruse legal terminology today at the heart of an electronics manufacturer's bid to torpedo a case brought by two dozen North Carolina landowners accusing the company of contaminating their groundwater with industrial solvents.

At issue in oral arguments in CTS Corp. v. Waldburger were technicalities in North Carolina state law.

On the line is whether people who've experienced environmental harm -- cancer and other diseases -- can bring lawsuits against the polluters or whether they are barred by "statutes of repose."

Much like a statute of limitations -- which allows a specified period of time for filing a lawsuit from when the alleged injury occurs -- North Carolina's statute of repose bars all lawsuits that are filed after 10 years from the last "act" or "omission" by defendants.

CTS of Elkhart, Ind., which operated an electroplating facility in Asheville from 1959 to 1986, claims the landowners' lawsuit is barred because the company last acted when it sold the property to a real estate developer in 1987.

The landowners say that their claims should not be dismissed because the federal Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, contains a provision that exempts toxic waste cases from such time limits. They won at the Richmond, Va.-based 4th U.S. Circuit Court of Appeals.

CERCLA was meant to hold responsible parties accountable for cleaning up their waste, the plant's neighbors say. In many instances, individuals don't know they are injured by the waste for years and therefore don't know they have reason to file a lawsuit.

CTS, represented by Jones Day attorney Brian Murray, argues the CERCLA exemption only applies to statutes of limitations, not repose.

The federal law contains language pre-empting state statutes of limitations, but it does not include the term "statute of repose." The plain language, Murray therefore argued, bars the landowners' claims.

The company's contention was warmly received by Chief Justice John Roberts.

The purpose of a statute of repose, he said, "is not to pursue latent causes of action ... it's to put an end to latent causes of action."

At the end of a repose period, he said, the opportunity to file a lawsuit is "completely finished."

John Korzen, a Wake Forest University law professor representing the landowners, argued that contention runs counter to Congress' intent with CERCLA.

Congress "was concerned about people not having their day in court," Korzen said.

The case centers on CTS's use of trichloroethylene, or TCE, in manufacturing electrical components for hearing aids and auto parts at the Asheville facility.

In 1987, the company sold more than 50 acres to a developer, claiming the tract was "environmentally clean." The buyer built nearly 100 housing units on the property.

But a few years later, testing revealed significantly elevated levels of TCE -- a carcinogen -- in the soil and surface water. Further testing, in 1999, found nearby private groundwater wells with levels of TCE thousands of times above safe drinking water standards.

Several health problems, including cancers, have cropped up in the community, leading local activists to strongly criticize CTS as well as U.S. EPA's handling of the property. Testing by the agency in 2007 and 2008 revealed an additional four private wells with elevated TCE levels (Greenwire, April 8).

The agency, working with CTS, has provided bottled water and home filtration systems to many in the area. It added the site to its Superfund cleanup program in 2012, though CTS has also challenged that decision in a federal appeals court (Greenwire, April 10).

Less than two years after EPA's testing results were made public in 2009, about two dozen landowners sued CTS for damages.

Justices' questions

Many of the arguments today, however, focused on the tricky issue of what is the difference between a statute of repose and a statute of limitation and whether, therefore, CERCLA's language should apply to both.

The landowners appeared to gain the support of liberal Justices Ruth Bader Ginsburg and Elana Kagan.

In sharp questioning of CTS's lawyer, Ginsburg said that under the company's reading of CERCLA, polluting companies could lobby state legislatures to enact statutes of repose.

Companies, she contended, would say, "That would get us off the hook."

Further, Kagan asked, "Why would Congress have wanted to modify statutes of limitations and not ... a statute of repose?"

Conservative Justice Antonin Scalia also indicated some support for the landowners. He said he had "never heard of this distinction between statutes of repose and statutes of limitations."

It's asking a lot of the court, both Scalia and Kagan said, to assume Congress knew the difference.

CTS is backed in the case by the Department of Justice. The precedent set by the case will likely apply to claims filed by former Marines against the Department of Defense for their exposure to TCE and other carcinogens while they were stationed at Marine Corps Base Camp Lejeune in Jacksonville, N.C.

About a dozen veterans and their families have filed lawsuits against the Defense Department stemming from what some experts consider the worst water contamination event in U.S. history. They have been consolidated in a federal appeals court and are pending the ruling in the CTS case (see related story).

Joseph Palmore of the DOJ contended today that CERCLA's language "surgically" modifies state statutes of limitations but leaves statutes of repose in place.

It was difficult to read how the court may rule on the case. The conservative wing of the court, including Roberts and Justice Anthony Kennedy -- the usual swing vote -- appeared skeptical of the landowners' desire to apply CERCLA's language to the statute of repose, though Kennedy acknowledged that the distinction between the two "was new to me."

Scalia, additionally, seemed critical of both sides' arguments.

A ruling is expected by the end of June.

Twitter: @GreenwireJeremy | Email: jjacobs@eenews.net

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