Argument analysis: Was Congress more “legally sophisticated” than the Justices when it overrode state limitations on lawsuits for toxic exposure?
Was Congress legally sophisticated enough to distinguish between “statutes of limitations” and “statutes of repose” when it amended the “Superfund” legislation (known as CERCLA) in 1986? At the oral argument in CTS Corp. v. Waldburger, some Justices confessed that the crucial distinction that CTS ascribes to Congress was complete news to them. The case turns on whether the respondents – homeowners whose well water was polluted by toxics – are barred from suing CTS by a North Carolina law that requires suits to be brought less than ten years after the defendant’s last action. The Fourth Circuit ruled that the North Carolina law was preempted because Congress did not intend to distinguish between statutes of limitations and statutes of repose when it tolled state statutes of limitations until after the victims of toxic exposure have discovered their injuries.
Representing petitioner CTS, Brian J. Murray argued that Congress did not intend to preempt the North Carolina law because it is a statute of repose and not a statute of limitations. Murray maintained that Section 309 of CERCLA, 42 U.S.C. § 9658, was a “surgical” compromise in which Congress sought both to protect victims of toxic exposure by tolling state statutes of limitations but also to respect core federalism concerns by enabling states to set an absolute end date for lawsuits through statutes of repose. Pressed to explain why legislation prompted by concern over toxic releases would not also preempt statutes of repose, Murray maintained that Congress realized that statutes of repose were within “the heartland of state law” whose preemption could raise “serious constitutional problems.”
Murray quickly ran into trouble from unexpected quarters when Justice Scalia, and later Justice Kennedy, confessed that they had not been aware of any legal distinction between statutes of limitations and statutes of repose and would have considered both to be “statutes of limitations” because they set time limits on the filing of lawsuits. Murray conceded that Congress has never expressly distinguished between statutes of limitations and statutes of repose, but he argued that a statute’s label should not matter. Murray maintained that even if the distinction was news to the Justices, Congress “understood the distinction” when it enacted Section 309. He described the failure to preempt statutes of repose as a very careful compromise that was necessary to avoid serious constitutional problems. After Justice Scalia observed that “you think Congress is smarter” and that “they know the law better,” Justice Kagan observed “that’s a very legally sophisticated Congress you’re asking us to imagine” to make a distinction that the Justices were not themselves making. Murray argued that floor exchanges concerning the legislation indicated that Congress was very sophisticated, prompting a sarcastic comment from Justice Scalia questioning the value of such legislative history.
Justice Kagan challenged Murray’s argument that Section 309’s language concerning the “commencement date” of a state limitation could not logically apply to a statute of repose. She noted that North Carolina’s ten-year bar runs from the last act or omission of the defendant, which could be considered the “commencement date” to which Section 309 refers. Justice Scalia agreed that if a state had only a statute of repose, and not a separate statute of limitations, the statute of repose’s commencement date would fit it within Section 309’s definition of preemption.
CTS shared its argument time with the United States supporting it as an amicus. Assistant to the Solicitor General Joseph Palmore maintained that North Carolina’s ten-year bar is not preempted because it is a statute of repose. Justice Kagan questioned why Section 309 should not simply apply to both statutes of repose and statutes of limitations. Palmore argued that the two are very different in character, with the statute of limitations serving as a procedural bar and the statute of repose as substantive law. He agreed that the label given them should not be controlling.
Justice Kagan then asked what the “commencement date” for the statute of limitations was in this case. When Palmore replied that it would have been in 2009 when plaintiffs discovered their injury, Justice Kagan questioned whether that could be since by then the lawsuit already had been barred by North Carolina’s ten-year statute of repose. Palmore suggested two possibilities: either 2009 could be the commencement date, but there would be a separate barrier to relief, or there could be no commencement date under state law, thus making Section 309 inapplicable because it was not earlier than the federal commencement date.
Showing no signs that it was his Supreme Court debut, John Korzen, director of the Appellate Advocacy Clinic at Wake Forest, made a polished and confident argument. Emphasizing that the purpose of Section 309 was to preserve claims for latent injuries until the injuries had been discovered, he argued that Section 309 preempted both North Carolina laws. Justice Kennedy opined that “there’s merit to your argument” and admitted that the distinction between a statute of limitations and a statute of repose “was new for me.” Justice Sotomayor noted, however, that the expert study group commissioned by Congress had mentioned a distinction between the two in the report that gave rise to Section 309’s enactment. Korzen responded that the report recommended that states change their laws to toll both statutes of limitations and statutes of repose until plaintiffs had discovered latent injuries, but that Congress did not wait for them to act, enacting Section 309 instead to accomplish this end.
In response to a question from Justice Kagan concerning how Section 309 applied to the North Carolina statutes, Korzen replied that it applied to the two limitation periods in the state – the three-year statute of limitations and the ten-year statute of repose. Justice Scalia then noted that the federal preemption provision only refers to the statute of limitations, using the singular, suggesting that both were not preempted. Korzen claimed that the singular was used because preemption only occurs for “the one the defendant is asking to apply to dismiss a case with prejudice,” here the ten-year period. Justice Scalia, however, described this as “a real problem” with the homeowners’ argument. Justice Kagan suggested that the reference to “applicable limitations period” in the statute indicated that it could apply in situations where a state had both a statute of limitations and a statute of repose. Justice Scalia replied that both of the periods are applicable, but plaintiffs had just run afoul of one of them. He noted that the argument was becoming one of “angels on the head of a pin.”
The potential policy consequences of the Court’s decision received some attention at the argument. Justice Ginsburg expressed concern that a ruling for CTS could lead more states to adopt statutes of repose, defeating Section 309’s purpose of preserving claims until plaintiffs discovered their injuries. Chief Justice Roberts was skeptical that there would be any rush to adopt such statutes. When Korzen noted the power of lobbyists, the Chief Justice noted that there would be lobbyists on both sides. Korzen argued that a ruling preserving the North Carolina law would create an incentive for companies to “cover up” instead of “clean up.” Justice Scalia noted that even if the North Carolina statute of repose is preempted, it would not stop a state from adopting a very short limitations period, such as three months, that Section 309 would only toll until injury was discovered.
In this case, the Justices will have to choose between two fundamentally different versions of what Congress intended when it adopted Section 309. Was Congress concerned solely with preserving a day in court for the victims of exposure to toxic releases by guaranteeing that their suits would not be barred until they had discovered their injuries? Or was Section 309 of CERCLA a careful compromise to assist some victims, while allowing states to preserve their ability to shut the courthouse doors on others before their latent injuries were discovered?
Based on statements made during the argument, it seems highly likely that Justices Ginsburg and Kagan are inclined to vote to affirm the decision below in favor of the homeowners, while Chief Justice Roberts is inclined to reverse. Justice Breyer was uncharacteristically silent at the argument, and Justice Sotomayor seemed skeptical of the homeowners’ arguments. Justices Scalia and Kennedy, the two Justices who confessed that the crucial distinction CTS wants the Court to believe Congress sought to draw was news to them, hold the decisive votes in this case. The tenor of the argument suggests that this is a closer case than many initially thought it would be. It may even turn out to be one where the influence of the federal government as an amicus will prove to be what tips the balance.