A statute of limitation (SOL) establishes the maximum time period for filing certain civil and criminal actions. The purpose of an SOL is to allow legal claims to be resolved within a reasonable amount of time while at the same time preventing fraudulent and stale claims after evidence has been lost or after the facts have become obscure through the passage of time or the defective memory, death, or disappearance of witnesses. The SOL is an affirmative defense that a defendant generally asserts before filing its answer to a complaint.
An SOL starts to run (think of a ticking clock) when all the essential elements of a cause of action have occurred. At this point, the claim is said to have “accrued.” The SOL can produce harsh or unfair results when injured parties may not become aware that they have been injured until after the SOL has expired. For example, plaintiffs may not discover contamination or the effects of exposure to contamination years after the wrongful conduct (e.g., initial spill or release of the contaminants).
As a result, many legislatures have adopted “discovery” rules providing that the SOL will not start until a plaintiff knew or should have known through the exercise of due diligence of the essential facts underlying the cause of action. Other states address this problem by recognizing the “continuing tort” doctrine so that the continuing presence of contamination gives rise to a new cause of action each day until the contamination is remediated. Leading cases illustrating the continuing tort doctrine in environmental litigation are Burley v. Burlington N. & Santa Fe Ry. Co, 2012 Mont. LEXIS 31 (Mt. 2/7/2012) and Hoery v. United States, 64 P.3d 214 (Colo. 2003).
Note that CERCLA section 309 essentially grafts a federal discovery rule onto a state SOL for causes of actions for personal injury or property damages claims based on exposure of releases of hazardous substances, pollutants or contaminants. 42 U.S.C. 9658(b)(4) creates a “federal commencement date” which is the date the plaintiff knew (or reasonably should have known) that the personal injury or property damages were caused or contributed to by a hazardous substance, pollutant or contaminant.
Finally, many states also have adopted statutes of repose (SOR) that provide a hard outside date for bringing certain actions. The expiration of the SOR will extinguish the underlying cause of action. SORs run from the occurrence of some event, and not when the injury that gave rise to the claim occurs. State SORs typically range from six to ten years depending on the cause of action. SORs are stricter than SOLs because the SORs will not be tolled or suspended by fraud or discovery of injury.
In Plainview Water District v American Castings and Manufacturing Company et al, Index No.009435/10 (Sup. Ct-Nassau Cty 3/27/13) the issue before the court was if the New York three-year statute of limitations (SOL) set forth in CPLR 214-c(2) to recover damages to property caused by latent effects from exposure to hazardous substances had expired. CPLR 214-c (2) provides that the SOL starts when the plaintiff discovers the injury or should have discovered the injury through the exercise of due diligence. New York courts have held that discovery occurs when, based upon an objective level of awareness of the dangers and consequences of the particular substance, the injured party discovers the primary condition on which the claim is based.
In this case, the plaintiff operated five pumping plants and thirteen supply wells that supplied drinking water to approximately 32, 000 residents of five Long Island towns. Two of the water supply wells are located downgradient from a 140-acre industrial park with 75 buildings where a variety of commercial and industrial activities have been conducted. Plaintiff alleged it detected trichloroethane (“TCA”) in supply well 1-2 at levels exceeding the maximum contaminant level (“MCL”) as well as dichloroethene (“DCE”) and dichloroethane (“DCA”) at levels exceeding one-half of the MCL in June 2007. After discovery of the TCA, supply well l -2 was taken out of service.
In 2010, the plaintiff filed its lawsuit seeking to recover the costs to treat and monitor the contaminated drinking water as well as to implement certain improvements to its water supply system. One of the defendants, Veeco Instruments Inc (Veeco), filed a motion to dismiss plaintiff s complaint on the grounds that the SOL had expired long before the plaintiff commenced its action. Veeco argued that plaintiff was aware of the groundwater contamination (i.e., the injury to its property) as early as 1994 when its consulting engineers issued a Master Water Plan Report Update that reported TCA had been detected in the water district monitoring wells. Veeco also pointed to a November 13, 1998 letter from the plaintiff to the New York State Department of Environmental Contamination (NYSDEC) that identified the Veeco’s premises as a suspected source of the contamination. Veeco also noted that plaintiff had submitted a New York Drinking Water State Revolving Fund application that stated that well l-2 has yielded “detectable” levels of TCE, TCA, DCA and DCE and that TCA, DCA and DCE were detected above the MCL at monitoring well clusters. The application sought funding to install an air stripping treatment system for wells 1-1 and l-2 to “resolve an imminent threat to public health caused by the anticipated presence of primary contaminants (i.e. VOCs, MTBE and nitrates) at levels in excess of the MCLs.” In response, the Plaintiff argued that the mere presence of contaminants did not constitute injury for purposes of the CPLR 214-c (2) SOL. Instead, the plaintiff argued it did not have cognizable damages until the contaminants exceeded the MCL and the water district had to shut down the well.
Relying on MTBE Products Liability Litigation, 458 F Supp 2d 149 (SD NY 2006), the court first ruled that the MCL was simply a convenient guidepost in determining that a particular level of contamination has likely caused an injury and that contamination did not have to exceed the MCL for an to injury to occur and the SOL clock to start ticking.
Turning to the evidence, the court found that the plaintiff was aware of the presence of detectable amounts of TCA in the supply well at least by July 2004 and had incurred substantial costs as a result of the detected of contamination below the MCL. Since plaintiff was aware of contamination in its supply well and the source more than three years before the commencement of this action, the court dismissed the complaint on the ground that is barred by the statute of limitations.