On March 25, 2020, in Refined Metals Corp. v. NL Indus., Inc., No. 1:19-CV-4578-JMS-DLP, 2020 WL 1448880 (S.D. Ind. Mar. 25, 2020), the Southern District of Indiana (Southern District) held that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)'s three-year statute of limitations for contribution actions can preempt the ten-year limitations period under Indiana’s Environmental Legal Action statute (ELA). Id. at *8. The court’s holding was limited but warns owners of contaminated property that they cannot avail themselves on state law to avoid CERCLA’s statute of limitations. Id.
Refined Metals first filed its claims in 2017 under CERCLA and the ELA seeking response costs related to environmental contamination but CERCLA’s three-year statute of limitations expired 16 years earlier. Id. at *3. Accordingly, the CERCLA claim was dismissed because it was time-barred.1 Id. Refined Metals then sought refuge under the ELA’s ten-year limitations period and filed its claim for the same response costs in state court.2 NL Industries removed the claim to federal court and raised the issue of conflict preemption.
CERCLA can coexist with state laws like the ELA, but state law will be preempted if it conflicts with CERCLA or frustrates its purpose. Id. at *7. The Southern District concluded that CERCLA preempted the ELA’s statute of limitations because Refined Metals’ ELA claim sought the very damages it could not recover under CERCLA. Id. at *8. The Southern District explained that state law cannot be used as a tool to circumvent limits on federal recovery. Id. at *7.
Although CERCLA and the ELA do not always directly overlap, Refined Metals’ claims were effectively the same under both statutes creating a direct conflict between federal and state law. Id. The court noted that allowing Refined Metals to pursue an ELA claim would prolong the liability period and frustrate Congress’ intent to “swiftly” and “expeditiously” resolve environmental disputes. Id. at *8. For that reason, conflict preemption applied and invalidated the ten-year statute of limitations and the ELA claim was dismissed. Id.
The court’s holding was limited to the facts before it and left open the possibility that conflict preemption would not apply if the ELA imposed additional liability as opposed to alternative liability. Id. If contaminated property owners use the ELA to seek liability not provided under CERCLA, the ten-year statute of limitations may still apply.
1Refined Metals’ first ELA claim was dismissed because the court relinquished its federal supplemental jurisdiction because the CERCLA claim was invalid. Id. at *3.
2The court noted that the ELA claim may also have been untimely under Indiana law. Id. at fn. 4.