Burlington Northern & Santa Fe Railway Co. v. Poole Chemical Co. , 419 F.3d 355 ( 2005 )

United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT July 28, 2005
_____________________
Charles R. Fulbruge III
No. 04-11217 Clerk
_____________________
BURLINGTON NORTHERN & SANTA FE RAILWAY COMPANY,
Plaintiff,
POOLE CHEMICAL COMPANY,
Defendant - Third Party Plaintiff - Appellant,
versus
SKINNER TANK COMPANY; ET AL.,
Third Party Defendants,
SKINNER TANK COMPANY,
Third Party Defendant - Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
_________________________________________________________________
Before WIENER, DeMOSS, and PRADO, Circuit Judges.
EDWARD C. PRADO, Circuit Judge:
This appeal requires the court to decide whether § 9658 of
the Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA) preempts the Texas statute of repose in a
lawsuit involving a buyer’s products liability claim. After
considering that issue, the court concludes that § 9658 does not
preempt the Texas statute of repose and affirms the judgment of
the district court.
Background Facts
Appellant Poole Chemical Company (Poole) operates an
agricultural blending facility near Slanton, Texas. Appellee
Skinner Tank Company (Skinner) manufactures and sells storage
tanks. Skinner manufactured two large above-ground storage tanks
and sold them to Poole on October 28, 1988.
On January 29, 2003, one of the tanks ruptured. The rupture
released several hundred thousand gallons of chemicals onto
Poole’s property and an adjacent railroad right-of-way. Poole
and the Slanton fire department initiated emergency response
services; Poole reclaimed some of the spilled chemicals.
Plaintiff Burlington Northern & Santa Fe Railway Company (the
“railroad company”) conducted an emergency clean-up and
restoration of its right-of-way at a cost of $2.1 million. On
March 4, 2004, the railroad company sued Poole under CERCLA for
the cost of the clean-up.
Having learned that it had no insurance to cover the cost of
the accident, Poole filed a third-party complaint against three
defendants, one of which was Skinner, on April 19, 2004. Poole
brought various state law claims against Skinner, alleging that
the tank Skinner sold it was defective.
Skinner moved for summary judgment based on Texas’s 15-year
statute of repose for products liability claims against
manufacturers. Skinner argued that Poole’s claims were barred
because Poole did not file its complaint within 15 years of the
sale of the tank. Poole responded with various arguments about
2
why the statute of repose did not apply to its claims. The
district court thoroughly analyzed each of Poole’s arguments and
determined that the statute barred each of Poole’s claims. The
district court entered judgment in Skinner’s favor and certified
the judgment as final as to Poole and Skinner. Poole challenges
the district court’s summary judgment in this appeal. This court
reviews the judgment de novo.1
Whether Texas’s 15-Year Statute of Repose Applies
Section 16.012 of the Texas Civil Practice and Remedies Code
establishes a 15-year statute of repose for products liability
cases. That section provides that “a claimant must commence a
products liability action against a manufacturer or seller of a
product before the end of 15 years after the date of the sale of
the product by the defendant.”2 Here, the date of the sale of
the allegedly defective product was October 28, 1988; Poole filed
its lawsuit on April 19, 2004, more than 15 years after the date
of the sale. Thus, if § 16.012 applies, Poole’s claim is barred.
The current version of § 16.012 applies to actions filed on
or after July 1, 2003.3 That version became effective on
1
Pension Ben. Guar. Corp. v. Wilson N. Jones Mem’l Hosp.,
374 F.3d 362, 366 (5th Cir. 2004); Olander v. Compass Bank, 363
F.3d 560, 564 (5th Cir. 2004).
2
TEX. CIV. PRAC. & REM. CODE ANN. § 16.012(b) (Vernon Supp.
2004-05).
3
TEX. CIV. PRAC. & REM. CODE ANN. § 16.012(b) historical note
(Vernon Supp. 2004-05) [Act of June 2, 2003, 78th Leg., R.S., ch.
204, § 23.02, 2003 Tex. Gen. Laws 847, 899].
3
September 1, 2003——seven months after the chemical spill occurred
and one month and 28 days before the fifteenth anniversary of the
sale of the Skinner tanks to Poole.4 Because the 15-year repose
period affects claims that arose from events that occurred before
the law came into effect, it is a retroactive law.5 Poole
maintains that § 16.012 cannot be applied retroactively because
there is no clear legislative intent for retroactive application.
Under Texas law, an “act will not be applied retrospectively
unless it appears by fair implication from the language used that
it was the intent of the Legislature to make it applicable to
both past and future transactions.”6 Here, the plain language of
§ 16.012 demonstrates that the Texas legislature intended for the
15-year repose period to apply retroactively. The provision
provides that a claim for a defective product must be brought
before the end of 15 years after the date of the sale.7
Moreover, the legislature specifically provided that the repose
period applies to “an action filed on or after July 1, 2003.”8
4
Previously, § 16.012 applied to manufacturers of
manufacturing equipment.
5
Barshop v. Medina County Underground Water Conservation
Dist., 925 S.W.2d 618, 633 (Tex. 1996); Tex. Water Rights Comm’n
v. Wright, 464 S.W.2d 642, 648 (Tex. 1971).
6
Ex parte Abell, 613 S.W.2d 255, 258 (Tex. 1981).
7
TEX. CIV. PRAC. & REM. CODE ANN. § 16.012(b) (Vernon Supp.
2004-05).
8
TEX. CIV. PRAC. & REM. CODE ANN. § 16.012(b) historical note
(Vernon Supp. 2004-05) [Act of June 2, 2003, 78th Leg., R.S., ch.
4
Had the Texas legislature intended for § 16.012 to apply only
prospectively, the legislature would have provided that the 15-
year repose period applies to actions that “accrued” on or after
July 1, 2003. Thus, the Texas legislature intended for the
statute of repose to apply retroactively.
Whether Retroactive Application Violates Texas’s General
Prohibition Against Retroactive Laws
Poole maintains that retroactive application of § 16.012
would violate the Texas constitution’s prohibition against
retroactive laws. In general, the Texas constitution prohibits
retroactive laws.9 Texas courts, however, have indicated that
laws affecting a remedy are not unconstitutionally retroactive
under the Texas constitution unless the remedy is entirely taken
away.10 The Texas legislature can restrict the time for filing a
claim without violating the retroactivity provision of the Texas
constitution so long as “it affords a reasonable time or fair
opportunity to preserve a claimant’s rights under the former law,
or if the amendment does not bar all remedy.”11
Section 16.012 does not bar all remedy, but rather shortens
204, § 23.02, 2003 Tex. Gen. Laws 847, 899] (emphasis added).
9
TEX. CONST. art. 1, § 16.
10
City of Tyler v. Likes, 962 S.W.2d 489, 502 (Tex. 1997).
11
Likes, 962 S.W.2d at 502 (discussing a new immunity
provision of the Texas Tort Claims Act that prevented the
plaintiff from recovering from a municipal defendant even though
the plaintiff’s claim accrued before the new defense was
available to the defendant).
5
the time for filing suit on a claim. Whereas the Texas
legislature had not previously specified a time for filing suit
for a defective product against a manufacturer, it did so when it
amended § 16.012. Here, the tank ruptured approximately seven
months before § 16.012 became effective and almost two months
before the expiration of fifteen years following the sale of the
Skinner tanks. As result, Poole had nine months (from the
January 29, 2003 rupture of the tank until the October 28, 2003
fifteenth anniversary of the sale of the tanks) to file its
third-party complaint against Skinner——and at least one month and
28 days following the September 1, 2003 effective date of the
amendment to § 16.012. Poole thus had a reasonable amount of
time in which to file its third-party complaint, constituting a
fair opportunity to preserve its rights against Skinner under the
former Texas law.12 If Poole believed that a defective tank
caused the accident, it did not need to wait until it was sued by
12
See Likes, 962 S.W.2d at 502 (determining that retroactive
application was not unreasonable where the plaintiff had 17
months to file her claim before it was barred by a new statute);
Wright, 464 S.W.2d at 642 (concluding that a new statute that
provided for cancellation of water permits upon proof of ten
continuous years of nonuse provided a reasonable remedy despite
the fact that six months of the ten-year period was prior to the
statute's effective date); AT&T v. Rylander, 2 S.W.3d 546, 554
(Tex. App.——Austin 1999, pet. denied) (deciding that 11 months is
a reasonable amount of time to file a request for a refund where
a new law established a statute of limitations); but see Alvarado
v. Gonzales, 552 S.W.2d 539, 542-43 (Tex. Civ. App.——Corpus
Christi 1977, no writ) (explaining that a new statute that gave a
mother only 21 days to establish paternity and enforce child
support could not be applied retroactively).
6
the railroad company, or until it realized it had no insurance,
to file its lawsuit against Skinner. Accordingly, retroactive
application of § 16.012 does not violate the Texas constitution’s
general prohibition against retroactive laws.
Whether Retroactive Application Violates
the Texas Open Courts Policy
Poole also argues that retroactive application violates the
Texas constitution’s open courts provision because it prevents
Poole from pursuing what it characterizes as accrued, vested
causes of action. Poole argues that applying § 16.012 to its
causes of action cuts short the otherwise applicable two-year
limitations period by 15 months and thus takes away its remedy.13
The Texas open courts provision states that “[a]ll courts
shall be open, and every person for an injury done him, in his
lands, goods, person or reputation, shall have remedy by due
course of law.”14 This provision “does not create any new right,
but is a declaration of a general fundamental principle that for
such wrongs as are recognized by the law of the land, the [Texas]
courts shall be open and afford a remedy.”15 A plaintiff who
13
Poole asserted claims for negligence, strict liability,
and breach of warranty. The Texas statute of limitations for
negligence and strict liability is two years. TEX. CIV. PRAC. &
REM. CODE ANN. § 16.003(a) (Vernon 2002). The statute of
limitations for Poole’s warranty claim is four years. TEX. BUS. &
COMM. CODE ANN. § 2.725 (Vernon 1994).
14
TEX. CONST. art. 1, § 13.
15
Ellerbe v. Otis Elevator Co., 618 S.W.2d 870, 873 (Tex.
Civ. App.——Houston [1st Dist.] 1981).
7
claims that a law violates the Texas open courts provision can
prevail by showing that “the restriction is unreasonable or
arbitrary when balanced against the purpose and basis of the
statute.”16 In Texas, a statute is presumed to be
constitutional.17 Thus, Poole has the burden of showing that §
16.012 is unconstitutional.18
Here, Poole cannot meet his burden because Texas courts have
determined that the 15-year repose period for defective products
is “reasonably related to the legitimate state purpose of
protecting manufacturers and sellers from stale claims.”19
Additionally, “Texas courts have repeatedly held that statutes of
repose do not violate the open courts provisions of the Texas
Constitution.”20 In order for common law causes of action like
Poole’s claims to be protected by the Texas constitution, the
claims “must be a vested right or something more than a mere
16
Rose v. Doctors Hosp., 801 S.W.2d 841, 843 (Tex. 1990);
Howell v. Tex. Workers’ Comp. Comm’n, 143 S.W.3d 416, 444 (Tex.
App.——Austin 2004, pet. denied).
17
Enron Corp. v. Spring Indep. Sch. Dist., 922 S.W.2d 931,
934 (Tex. 1996).
18
Enron, 922 S.W.2d at 934.
19
Zaragosa v. Chemetron Inv., Inc., 122 S.W.3d 341, 346
(Tex. App.——Fort Worth 2003, no pet.).
20
Zaragosa, 122 S.W.3d at 346; see also Barnes v. J.W.
Bateson Co., 755 S.W.2d 518, 521 (Tex. App.——Fort Worth 1988, no
writ) (stating that 10-year statute of repose for claims against
architects does not violate open courts provision).
8
expectancy based upon an anticipated continuance of existing
law.”21 In Texas, a “party has no vested right to a cause of
action” because neither the federal constitution nor the Texas
constitution “forbids the abolition of common-law rights to
attain a permissible legislative objective.”22 Thus, prior to
September 1, 2003, Poole had nothing more than an expectation
based on an anticipated continuance of existing law, an
expectation that is not protected by the Texas constitution.23
Consequently, retroactive application of § 16.012 does not
violate the open courts provision of the Texas constitution.
Whether CERCLA Preempts Texas’s 15-Year Statute of Repose
Finally, Poole contends that § 9658 of CERCLA preempts §
16.012, superimposing a rule of discovery on the commencement of
the running of § 16.012's period of repose. Poole thus maintains
that under § 9658, the 15-year period of repose did not begin to
run until January 29, 2003, when the tank ruptured.
Section 9658 provides that in state law causes of action for
personal injury or property damage arising from exposure to any
hazardous substance or contaminant released into the environment
from a facility, where the applicable “statute of limitations”
21
Zaragosa, 122 S.W.3d at 346-47.
22
Tex. Gas Exploration Corp. v. Fluor Corp., 828 S.W.2d 28,
32 (Tex. App.——Texarkana 1991, writ denied).
23
Zaragosa, 122 S.W.3d at 346-47; McCulloch v. Fox & Jacobs,
696 S.W.2d 918, 924 (Tex. App.——Dallas 1985, writ ref’d n.r.e.).
9
provides a commencement date that is earlier than the “federally
required commencement date” (FRCD), the later federal date
controls.24 Section 9658 defines “commencement date” as the
“date specified in a statute of limitations as the beginning of
the applicable limitations period,”25 and defines the FRCD as
“the date the plaintiff knew (or reasonably should have known)
that the personal injury or property damages . . . were caused or
contributed to by the hazardous substance . . . concerned.”26
Thus, § 9658 engrafts a discovery rule on state statutes of
limitations, deferring the “accrual of a cause of action until
the plaintiff knew or, exercising reasonable diligence, should
24
Specifically, § 9658 provides as follows:
(a) State statutes of limitations for hazardous
substance cases
(1) Exception to State statutes
In the case of any action brought under State law
for personal injury, or property damages, which
are caused or contributed to by exposure to any
hazardous substance, or pollutant or contaminant,
released into the environment from a facility, if
the applicable limitations period for such action
(as specified in the State statute of limitations
or under common law) provides a commencement date
which is earlier than the federally required
commencement date, such period shall commence at
the federally required commencement date in lieu
of the date specified in such State statute.
(emphasis added).
25
42 U.S.C. § 9658(b)(3).
26
Id. at § 9658(b)(4)(A).
10
have known of the facts giving rise to the cause of action.”27
Poole maintains that § 9658 preempts § 16.012 because §
16.012 contains no discovery rule. Poole contends that under §
9658 the date of the sale of the tank is the commencement date,
and that because the sale of the tank was earlier than the date
Poole knew about its injury, the FRCD applies to its claim.
Poole maintains that the 15-year repose period is a 15-year
limitations period that began to run on the date of the rupture
of the tank; thus, Poole argues that it had until January 29,
2018 to file its claim.28
In cases involving statutory construction, a court begins
with the plain language of the statute.29 A court assumes that
the legislative purpose of a statute is “‘expressed by the
ordinary meaning of the words used.’”30 A court considers the
language used in a statute as conclusive unless Congress has
27
Computer Assoc. Int’l v. Altai, Inc., 918 S.W.2d 453, 455
(Tex. 1996).
28
If § 9658 completely preempts § 16.012 as Poole argues, §
16.012's 15-year repose period would not apply. Instead, the
applicable Texas statutes of limitations that would ordinarily
apply to Poole’s state law claims would apply; that is, Poole
would have two years from the date of the rupture to file his
negligence and strict liability claims, and four years to file
his contract claim.
29
See Am. Tobacco Co. v. Patterson, 456 U.S. 63, 68 (1982)
(explaining the basic principles of statutory construction before
interpreting a provision of the Civil Rights Act of 1964).
30
Am. Tobacco Co., 456 U.S. at 68 (quoting Richards v.
United States, 369 U.S. 1, 9 (1962)).
11
clearly expressed a contrary intent.31
Here, the reach of the plain language of § 9658 does not
extend to statutes of repose like § 16.012. Literally, § 9658
states that it only preempts state law when the applicable state
statute of limitations “provides a commencement date which is
earlier than the [FRCD]”——no mention of peremptory statutes or
statutes of repose. The provision defines “commencement date” as
the “date specified in a statute of limitations as the beginning
of the applicable limitations period.”32 Section 16.012,
however, is not a statute of limitations; it is a statute of
repose, and the differences between statutes of limitations and
statutes of repose are substantive, not merely semantic.
Although courts considering the applicability of § 9658 have
not always clearly distinguished a statute of repose from a
statute of limitations,33 the two types of statutes are quite
31
Id.
32
42 U.S.C. § 9658(b)(3) (emphasis added).
33
See First United Methodist Church of Hyattsville v. U.S.
Gypsum Co., 882 F.2d 862, 868 (4th Cir. 1989) (determining that §
9658 does not preempt a Maryland statute of repose in an
asbestos-removal action because CERCLA’s legislative history
indicated that it was not intended to apply to substances that
are part of a structure, despite clear indication that court
recognized the difference in a statute of repose and a statue of
limitation); Elec. Power Bd. of Chattanooga v. Monsanto Co., 879
F.2d 1368, 1378 (6th Cir. 1989) (explaining that a plaintiff’s
claims about equipment purchased more than ten years from the
date of filing of the lawsuit were untimely under CERCLA and
barred by a Tennessee statute of repose); Covalt v. Carey Canada,
860 F.2d 1434, 1436 (7th Cir. 1988) (finding that § 9658 did not
12
different.
A statute of limitations extinguishes the right to
prosecute an accrued cause of action after a period of
time. It cuts off the remedy. . . . A statute of
repose limits the time during which a cause of action
can arise and usually runs from an act of a defendant.
It abolishes the cause of action after the passage of
time even though the cause of action may not have yet
accrued.34
Typically, a statute of limitations for an action sounding in
tort starts to run on the date of the plaintiff’s legal injury.35
When an injury is inherently undiscoverable, however, states
often use the discovery rule to toll the running of the
limitations period until the plaintiff “discovers, or in
preempt Indiana statute of repose because CERCLA applies only to
releases into the environment and plaintiff’s claim involved his
exposure to asbestos, not a release of a hazardous substance);
Buggsi, Inc. v. Chevron U.S.A., 857 F. Supp. 1427, 1433 (D. Or.
1994) (concluding that § 9658 preempts an Oregon statute of
repose in a landowner’s action against the owner of an adjacent
petroleum bulk storage and distribution plant even though
petroleum is not defined as a hazardous substance because
petroleum is a pollutant and the plant was a facility, without
making any distinction between a statute of repose and a statute
of limitations); A.S.I., Inc. v. Sanders, 835 F. Supp. 1349, 1358
(D. Kan. 1993) (rejecting an argument that § 9658 did not preempt
a Kansas statute of repose because a statute of repose is
substantive rather than procedural because other courts have
treated the two types of statutes in the same way); Knox v. AC &
S, Inc., 690 F. Supp. 752, 758 (S.D. Ind. 1988) (deciding that §
9658 does not preempt Indiana statute of repose in an asbestos
products liability case without considering whether § 9658
applies to statutes of reposes).
34
Servicios-Expoarma, C.A. v. Indus. Mar. Carriers, 135 F.3d
984, 989 (5th Cir. 1998) (quoting Harding v. K.C. Wall Prods.,
831 P.2d 958, 967 (Kan. 1992)).
35
Coastal Distrib. Co. v. NGK Spark Plug Co., 779 F.2d 1033,
1036 (5th Cir. 1986).
13
exercising reasonable diligence should have discovered, facts
that indicate he has been injured.”36 In contrast, awareness of
injury is not a factor in determining when the time period of a
statute of repose starts to run.37 Unlike a statute of
limitations, “a statute of repose creates a substantive right to
be free from liability after a legislatively determined
period.”38 In other words, a statute of repose establishes a
“right not to be sued,” rather than a “right to sue.” Thus, with
the expiration of the period of repose, the putative cause of
action evanesces; life cannot thereafter be breathed back into
it. In Texas, such statutes “represent a response by the [Texas]
legislature to the inadequacy of traditional statutes of
limitations and are specifically designed to protect
[manufacturers] . . . from protracted and extended vulnerability
to lawsuits.”39
Section 16.012 is clearly a statute of repose because it
cuts off a claimant’s right to sue a manufacturer for a product
36
Colonial Penn Ins. v. Market Planners Ins. Agency, 157
F.3d 1032, 1034 (5th Cir 1998); see also In re Coastal Plains,
179 F.3d 197, 214 (5th Cir. 1999).
37
Wayne v. Tenn. Valley Auth., 730 F.2d 392, 401-02 (5th
Cir. 1984).
38
Cadle Co. v. Wilson, 136 S.W.3d 345, 350 (Tex.
App.——Austin 2004, no pet.).
39
Tex. Gas Exploration Corp., 828 S.W.2d at 32 (discussing
the Texas statute of repose that applies to claims against
architects and builders).
14
defect by requiring him to “commence a products liability action
. . . before the end of 15 years after the date of the sale of
the product by the defendant,”40 and because it runs from an act
of the defendant——“the date of the sale of the product by the
defendant.”41 The plain language of § 9658, however, refers to
state statutes of limitations——not state statutes of repose.
This court is bound by that plain language, absent express
congressional intent to the contrary.42 Congress did not express
a contrary intent in this instance.
In enacting CERCLA, Congress intended “to facilitate the
prompt cleanup of hazardous waste sites and to shift the cost of
environmental response from the taxpayers to the parties who
benefitted from the wastes that caused the harm.”43 Section 9658
was not part of the original CERCLA. Congress added § 9658 as
part of the 1986 CERCLA amendments to respond to a report by a
congressional study group that determined that many state systems
were inadequate to deal with the delayed discovery of the effect
40
TEX. CIV. PRAC. & REM. CODE ANN. § 16.012(b) (Vernon Supp.
2004-05).
41
TEX. CIV. PRAC. & REM. CODE ANN. § 16.012(b) (Vernon Supp.
2004-05).
42
Am. Tobacco Co., 456 U.S. at 68.
43
OHM Remediation Servs. v. Evans Cooperage Co., 116 F.3d
1574, 1578 (5th Cir. 1997).
15
of a release of a toxic substance.44 Congress was concerned that
in the case of a long-latency disease like cancer, a plaintiff
could be barred from bringing his lawsuit if the state statute of
limitations ran from the time of the first injury rather than
from the time when the plaintiff discovered that his injury was
caused by the hazardous substance.45 Congress fixed this problem
by preempting the state statute of limitations with the FRCD,
which runs from the date the plaintiff knew or reasonably should
have known that his injury was caused by exposure to the
hazardous substance. As a result, CERCLA’s legislative history
indicates Congress intended for § 9658 to preempt a state statute
of limitations that deprives a plaintiff who suffers a long-
latency disease caused by the release of a hazardous substance of
his cause of action, but not to preempt a state statute of repose
like § 16.012.
This interpretation comports with a fundamental principle of
statutory construction——common sense.46 Under the proper
44
See H.R. CONF. REP. No. 99-962, 2d Sess. 262, reprinted in
1986 U.S.C.C.A.N. 3276, 3354.
45
See id.
46
See Cal. v. F.E.R.C., 383 F.3d 1006, 1016-17 (9th Cir.
2004) (explaining that the court must be guided by common sense
in determining congressional intent); United States v. Nippon
Paper Indus. Co., 109 F.3d 1, 4 (1st Cir. 1997) (describing
common sense as a good barometer of statutory meaning); Salt Lake
City v. Western Area Power Admin., 926 F.2d 974, 984 (10th Cir.
1991)(stating that the most fundamental guide to statutory
construction is common sense); First United Methodist Church of
16
application of that principle, § 9658 does not preempt § 16.012.
In addition, this case does not involve the delayed
discovery for which § 9658 was intended to address. The case
does not implicate a long-latency disease or involve a situation
where the time for filing a claim expired before the plaintiff
learned that a hazardous substance caused his injury. Poole’s
alleged injury was not inherently undiscoverable. Poole knew
about its injury as soon as the tank ruptured, and is held to
knowledge of the amendment to § 16.012 no later than its
effective date, September 1, 2003; yet Poole did not file its
third-party complaint until almost 16 months after the rupture.
Conclusion
Retroactive application of § 16.012 does not offend the
Texas constitution, and CERCLA’s § 9658 does not preempt §
16.012, vis-à-vis Poole’s product liability claims against
Skinner. Thus, the district court properly entered summary
judgment in Skinner’s favor. Consequently, the court AFFIRMS the
district court’s judgment.
AFFIRMED.
Hyattsville v. U.S. Gypsum Co., 882 F.2d 862, 869 (4th Cir. 1989)
(referring to common sense as the most fundamental guide to
statutory construction).
17