February 10, 2019

Statute of Limitation for an Environmental Legal Action Is Ten Years; Elkhart Foundry & Machine Co.

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In 2009, the Indiana Supreme Court held that an Environmental Legal Action (ELA) was subject to a six-year statute of limitations. But in 2011, the legislature passed a statute which arguably extended the statute of limitations to 10 years. The question in this case was whether the new statute was a statute of limitations or a cap on the recoverable damages.

The Foundry operated an iron foundry on a site in Elkhart, but went out of business in 2004. In 2007, the Foundry dissolved and one of its creditors took ownership of the site.

That same year, Elkhart began looking into purchasing the site and learned that it was contaminated. The City eventually purchased and remediated the site.

The City filed an ELA against the Foundry in 2016. The Foundry moved for summary judgment, arguing that the ELA was time-barred. The trial court disagreed with the Foundry.

The new statute (IC § 34-11-2-11.5) provided that the plaintiff in an ELA can seek to recover “[t]he costs incurred not more than ten (10) years before the date the action is brought, even if the person or any other person also incurred costs more than ten (10) years before the date the action is brought.” The Foundry argued that this language limited the damages recoverable in an ELA and was not a statute of limitations. In making this argument, the Foundry relied on a recent decision from the Indiana Court of Appeals.

The Foundry relies heavily on this Court’s 2016 decision in Schuchman/Samberg Investments, Inc. v. Hoosier Penn Oil Co., 58 N.E.3d 241 (Ind. Ct. App. 2016), trans. denied. There, the panel held that a plaintiff’s ELA “seeking recovery of costs incurred to remediate its own property . . . is subject to the six-year statute of limitation set forth in I.C. § 34-11-2-7.” Id. at 250. On its way to that holding, the panel noted its belief that Section 34-11-2-11.5 is not a statute of limitation. Specifically, the panel suggested that the statute “says nothing of the time frame within which an ELA claim must be brought or the events that trigger the running of that period. Instead, it imposes a limitation on the types of damages recoverable in an ELA claim in the form of a ten-year look-back period.” Id. at 246 n.5.

The problem with the Foundry’s reliance on the footnote in Schuchman/Samberg Investments is that, as the panel in that case acknowledged, Section 34-11-2-11.5 was “inapplicable” to the ELA at issue because the lawsuit was filed in 2009, two years before the enactment of the statute. Id. As such, the footnote was dicta and therefore nonprecedential.

Moreover, this panel disagreed. It found that the statute “plainly says something about ‘the time frame within which an ELA claim must be brought’ and ‘the events that trigger the running of that period.’” And the Court found it notable that the statute was housed in Indiana Code chapter 34-11-2, which is titled “Specific Statutes of Limitations.”

We are aware that these headings “are not part of the law and may be altered by the lawful compilers,” Ind. Code § 1-1-1-5(f), but we are also aware that the legislature often omits headings altogether, so its inclusion of headings here is worth noting. In any event, even if we disregard the headings the legislature gave to Article 34-11 and Chapter 34-11-2, the fact that Section 34-11-2-11.5 was placed in Chapter 34-11-2, alongside numerous statutes of limitation, tells us that the legislature intended Section 34-11-2-11.5 to be read as a statute of limitation.

Thus, the City timely brought the ELA, and the trial court correctly denied the Foundry’s motion for summary judgment.

Lessons:

  1. The statute of limitations for an Environmental Legal Action is ten years.
  2. When the legislature includes a heading in a chapter of the Indiana Code, then its inclusion is worth noting when construing statutes in that chapter.
  3. A statute may be interpreted based on the other statutes with which it is placed.