Under Indiana’s Environmental Legal Action statute, Ind. Code § 13-30-9-2, a party that has incurred costs to remove or remediate contamination resulting from a release of a hazardous substance is entitled to bring an environmental legal action (“ELA”) against any other party that caused or contributed to the release of the hazardous substance. Another statute, Ind. Code § 34-11-2-11.5 limits the recoverable costs in an ELA claim to those which were incurred no more than 10 years before the filing of the lawsuit to assert the ELA claim. Indiana courts have interpreted Ind. Code § 34-11-2-11.5 as establishing a rolling 10-year statute of limitations for ELA claims from the date of the most recently-incurred removal or remediation expense. See Elkhart Foundry & Mach. Co. v. City of Elkhart Redevelopment Comm’n for City of Elkhart, 112 N.E.3d 1123, 1126-28 (Ind. Ct. App. 2018). In other words, each time a potential ELA claimant incurs a cleanup cost, a new 10-year period of limitations begins to run. Id. (“the legislature did not intend for the ten-year limitation period to start running, once and for all, when the plaintiff incurs its ‘first’ cleanup cost. Rather, a new ten-year period starts to run with the incurrence of each additional cleanup cost.”).
In practice, this typically means that an ELA claim can be filed at any time within 10 years of the date of the last item of cleanup costs incurred, but that the claimant will be time-barred from recovering any costs incurred more than 10 years prior to the filing of the lawsuit. For example, if a party incurred cleanup costs of $100,000 per year for a five year period from 2008-2012 and filed suit to assert an ELA on January 1, 2020, the $300,000 in costs incurred from 2010-2012 would be recoverable, while the $200,000 in costs incurred prior to 2010 would be time-barred since they were incurred more than 10 years prior to the filing of the lawsuit on January 1, 2020.
However, a recent line of federal court decisions addressing similar claims under the federal Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9601 et seq., suggests that CERCLA’s much shorter statutes of limitations may apply to some state law ELA claims asserted under the Indiana ELA statute.
When Congress passed CERCLA, it was careful to note that while a plaintiff is not permitted to recover compensation for the same claims under both CERCLA and state law, CERCLA does not preempt states from imposing additional liability for environmental releases of hazardous substances. 42 U.S.C. § 9614. Thus, state laws providing avenues to recover removal or remediation costs can coexist with CERCLA, as long as they do not conflict with CERCLA. See Vill. of DePue, Ill. v. Exxon Mobil Corp., 537 F.3d 775, 786 (7th Cir. 2008) (noting that while “CERCLA’s preemptive scope is not total . . . [t]he precise contours of CERCLA preemption over state environmental cleanup actions or municipal ordinances that affect federal removal or remedial actions are not easy to discern.”).
The limits of Indiana’s ELA statute’s coexistence with CERCLA were tested in Refined Metals Corp. v. NL Indus., Inc., 2020 WL 1448880 (S.D. Ind. Mar. 25, 2020). In that case, a buyer of a contaminated property sought to pursue an ELA claim against a party that had contributed to the contamination of the property. The buyer had previously filed suit under CERCLA, but that claim was dismissed due to the buyer’s failure to file suit within the 3-year statute of limitations for contribution claims under CERCLA set forth in 42 U.S.C. § 9613(g)(3). When the buyer subsequently filed a new ELA claim for the same damages under Indiana’s ELA statute, the Court held that this was an impermissible attempt to circumvent CERCLA’s limits on recovery using the longer 10-year statute of limitations under Ind. Code § 34-11-2-11.5, which directly conflicts with CERCLA’s 3-year statute of limitations for contribution actions. 2020 WL 1448880 at *7-8. In other words, the buyer was “invoking the ELA to recover costs that it could not recover under CERLA.” Id. at 7. As a result, the Court dismissed the ELA claim, holding that the ELA’s 10-year statute of limitations cannot be used to circumvent CERCLA’s shorter statute of limitations. Five months later, the Northern District of Indiana followed suit, reaching the same conclusion and dismissing a group of contaminated property owners’ ELA claim that sought the same recovery the group had pursued in a CERCLA claim that was barred under CERCLA’s 3-year statute of limitations for contribution claims. Lusher Site Remediation Grp. v. Nat’l Fire Ins. Co. of Hartford, 2019 WL 3811926 (S.D. Ind. Aug. 14, 2019).
These two recent cases serve as a warning to parties who may seek to recover environmental cleanup costs under Indiana’s ELA statute: if those costs could have been recovered under CERCLA, the applicable statute of limitations may be as short as 3 years.
If you have questions about environmental remediation claims, contact your DSV attorney or Alex Trueblood at firstname.lastname@example.org.
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