New York Times

Supreme Court Rules in Favor of Electronics Plant in Poisoned Water Case

June 10, 2014
by Adam Liptak

WASHINGTON — Landowners who say a North Carolina electronics plant poisoned their drinking water missed a filing deadline, the Supreme Court ruled on Monday.

The decision, in a 7-to-2 vote, is likely to affect similar suits from the families of thousands of former Marines over what they say was toxic pollution at Camp Lejeune, also in North Carolina.

The case decided on Monday concerned a 1980 federal law that made it easier to sue over environmental contamination, which can be hard to discover and may cause symptoms only decades later. The law said state statutes of limitations do not begin to run until plaintiffs learn of, or should have discovered, the harm in question.

The plaintiffs in Monday’s case said their drinking water had been contaminated between 1959 and 1985 by a plant in Asheville, N.C., run by CTS Corporation. They sued in 2011, after a 2009 report from the Environmental Protection Agency.

Both sides agreed that the suit was not barred by North Carolina’s statute of limitations. The question for the justices was whether a separate state law — a 10-year so-called statute of repose — was displaced by the 1980 federal law.

Justice Anthony M. Kennedy, writing for the majority, said no. The second state law, which started to run when CTS took its “last culpable act,” barred the suit, he wrote. CTS sold the Asheville property in 1987; the plaintiffs did not sue until 24 years later.

Justice Kennedy relied on a congressional report that had recommended federal pre-emption of both statutes of limitations and statutes of repose. But, he said, Congress had taken action on only the first recommendation.

Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Clarence Thomas, Samuel A. Alito Jr., Sonia Sotomayor and Elena Kagan joined all or most of the majority opinion in the case, CTS Corp v. Waldburger, No. 13-339.

In dissent, Justice Ruth Bader Ginsburg, joined by Justice Stephen G. Breyer, wrote that Justice Kennedy had created an artificial distinction between the two kinds of laws.

“The court allows those responsible for environmental contamination, if they are located in the still small number of states with repose periods, to escape liability for the devastating harm they cause,” she wrote, listing Alabama, Connecticut, Kansas and Oregon among such states.

“Instead of encouraging prompt identification and remediation of toxic contamination before it can kill,” she wrote, “the court’s decision gives contaminators an incentive to conceal the hazards they have created until the repose period has run its full course.”

In a second decision on Monday, this one unanimous, the justices provided guidance to federal courts about how to apply a 2011 decision, Stern v. Marshall. That ruling said that a provision of the bankruptcy laws that authorized bankruptcy judges to hear some kinds of claims was unconstitutional, reasoning that such judges do not have the protections of life tenure guaranteed by Article III of the Constitution.

Monday’s decision, Executive Benefits Insurance Agency v. Arkison, No. 12-1200, arose from a lawsuit in a bankruptcy court seeking the return of what a bankruptcy trustee said was fraudulently transferred money. The trustee won before the bankruptcy judge.

On appeal, the defendant said the bankruptcy judge had been powerless to decide the case. The Supreme Court, in an opinion by Justice Thomas, said that may have been true but was irrelevant, as a federal district judge had conducted an independent factual and legal review.

That, Justice Thomas wrote, was the correct method for claims called into question by the 2011 decision.

“When a bankruptcy court is presented with such a claim,” he wrote, “the proper course is to issue proposed findings of fact and conclusions of law.” The district judge, Justice Thomas said, is then to review those proposals independently and enter the binding court judgment.