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Justices grapple with statute of limitations language during oral arguments

February 22, 2019

A case involving a brownfield cleanup and a question of when a claim for recovery of costs can be brought met a skeptical Indiana Supreme Court Thursday, when the justices quizzed both sides on the meaning and implication of the state’s Environmental Legal Action statute.

The court heard oral arguments Feb. 21 to decide if it would grant transfer to Elkhart Foundry & Machine Company, Inc. v. City of Elkhart Redevelopment Commission, 20A03-1602-CT-02136.

At issue is a long debate over the statute of limitations for bringing a claim under the ELA. Indiana Code section 34-11-2-7 established a six-year limit, but an amendment that created I.C. 34-11-2-11.5 has been seen as providing a 10-year statute of limitations.  

The city of Elkhart Redevelopment Commission filed a lawsuit in 2016 against the Elkhart Foundry & Machine Co., Inc., for cleaning up the foundry’s former industrial site. Contaminants found on the 6.8 acres include arsenic, lead and chromium. Also, lead, fluoranthene and pyrene was found to be impacting the sediment of the nearby Elkhart River.

However, Elkhart Foundry argued the lawsuit was time-barred. It asserted the city had six years to file a claim from 2007, when it first learned of the contamination. The city countered that subsection 11.5 creates a 10-year statute of limitations that is triggered when the cleanup costs are incurred.

The Elkhart Superior Court agreed with the city, and the Indiana Court of Appeals affirmed.

Before the Supreme Court, attorney Erik Mroz, representing the foundry, said the Court of Appeals decision leads to an absurd result of a statute of limitations that essentially limits nothing.

“When I learn I have an actual fileable claim, I have 6 years to file that lawsuit, and when I file that lawsuit, the court just looks back 10 years,” said Mroz, partner at Drewry Simmons Vornehm LLP in Carmel. “My point is, without a hard and fast deadline to file the lawsuit, we don’t have a statute of limitations under the ELA. And if the Indiana Legislature did not want there to be a statute of limitations under the ELA, they could have just said so.”

Justice Mark Massa jumped in and asked why, if subsection 11.5 is not a statute of limitations, did the Legislature include it under the heading of statute of limitations? Joining that line of questioning, Chief Justice Loretta Rush pushed Mroz on the ELA versus the Underground Storage Tank Act. She cited Pflanz v. Foster, 888 N.E.2d 756 (Ind. 2008), and asked why the General Assembly would have one statute of limitations – here, 10 years – for cost recovery claims under the UST and a different one for the ELA.

Mroz responded, “It is our position that the plain and ordinary meaning of (subsection) 11.5 indicates that the Legislature did not abrogate the six-year statute of limitations for property damage claims.”

Justice Geoffrey Slaughter tested Elkhart’s argument, sparring with attorney Brent Huber before he even formally introduced himself to the court. He argued the ELA provision is unlike the others in the chapter in that it does not talk about when the claim accrues and when the lawsuit must be brought.

Huber, partner at Ice Miller LLP, maintained the ELA is action for contribution. The statute of limitations begins running when costs are incurred, not when the contamination was first known. Just knowing about the contamination does not trigger to statute of limitations’ clock.

Slaughter said, “My quibble with you is that those aren’t the words that the Legislature used, and I guess that prompts the question, ‘What is it that qualifies as law?’”

Huber responded, “I would submit that it is the words in the statute.”

Slaughter punched back, “But the words don’t help you here.”

Huber replied, “The courts have also recognized that you can consider the titles and the headings and the location of the statute, certainly the timing of the statute. If you look at all of those things, it’s quite clear that this was intended to be a statute of limitations.”

Slaughter reiterated, “The question for us is, ‘Does the intention matter or do the words matter?’”

Huber argued, “It would have no effect whatsoever if it was not a statute of limitations.”

Slaughter countered, “Well, no. it would have effect. It would simply be treated as (Mroz) suggests that there’s a 10-year lookback for these costs that your client is seeking to recover. It’s either subject to a six-year statute of limitations because as we said in (Cooper Indus. LLC v. City of South Bend, 899, N.E.2d 1274 (Ind. 2009)), it’s a claim about property damage. Or, even if you think the Legislature was repealing that part of Cooper too, then there’s a 10-year catch-all statute of limitations. It’s not as though there’s no statute of limitations.”

Huber responded, “In that situation, your honor, subsection (c) of 11.5 would have no meaning whatsoever because it clearly gives the plaintiff the right to recover 10 years’ worth of cost, and you simply cannot incur recoverable costs without knowing about the contamination.”

The full oral arguments can be watched here.

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