Petition for Writ of Certiorari — First United Methodist Church of Hyattsville v. United States Gypsum Co.

—

Suprem

89-7 28 | FILED

;

No.

IN THE CLERK

NOV 6 IBS

JR

a | :

Supreme Court of the United States

OCTOBER TERM, 1989

FIRST UNITED METHODIST CHURCH

OF HYATTSVILLE,

Petitioner,

UNITED STATES GYPSUM COMPANY,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PETER T. ENSLEIN

ASHCRAFT & GEREL

2000 L Street, N.W.

Suite 700

Washington, D.C. 20036

(202) 783-6400

Counsel for Petitioner

CASILLAS PRESS INC. — 1717 K ST NW WASHINGTON DC 20036 — 223-1220

(i)

QUESTION PRESENTED

Does Section 104(a)(3)(B) of the Comprehensive En-

vironmental Response, Compensation, and Liability Act of 1980

(‘‘CERCLA”’), 42 U.S.C. § 9604(a)(3)(B), which limits the

United States Environmental Protection Agency's authority

to respond to releases from products which are a part of the

structure of buildings and result in exposure within buildings,

also bar the application of CERCLA to private actions which

seek to recover the costs of responding to such releases?

(ii)

LIST OF PARTIES

First United Methodist Church of Hyattsville was the ap-

pellant in No. 88-1612 before the United States Court of Ap-

peals for the Fourth Circuit.

United States Gypsum Company was the appellee in No.

88-1612.

(in)

TABLE OF CONTENTS

Page

ee elk enas ba sceacataneees ill

ee oS ek eek kcetbscedaueege l

IE SG SP oa PES = 2

IEEE MPUUMUUPMUEIDs 0 vc nce ccccnccccdacccen whale vnenen 2

eae 2

REASONS FOR GRANTING THE WRIT....................... 4

ee ee Pa ekg cans 646 4600%bannnd 17

TABLE OF AUTHORITIES

Cases:

Burlington Northern R. Co. v. Oklahoma Tax Com.,

481 U.S. 454 (1987)........... I oie Ona a 6s che ee 14

Cadillac Fairview/Califorma v. Dow Chemical Co.,

Nees cnc cnc ea ceacnsntcen 6, 12

County of Orange v. National Gypsum Co.,

appeal docketed, No. 89-2529 (Sth Cir. May 26, 1989)........... s)

Davis v. Lukhard, 788 F.2d 973 (4th Cir.), cert.

demied sub nom. Stanton v. Lukhard, 479 U.S.

as SEE re 16

Dedham Water Co. v. Cumberland Farms Dairy, Inc.,

I I Ms os cca ccc nnsncnsaccuscacsn 6, 11

Demby v. Schweiker, 671 F.2d 507 (D.C. Cir. 1981)............. 16

Idaho v. Howmet Turbine Component Co.,

Nee TT Tn eee ns cance ben eeustesencuacs ll

a

(iv)

Page

Interchange Office Park v. Standard Industnes, Inc.,

654 F. Supp. 166 (W.D. Tex. 1987)... .... 2.2.6... e eee ee eee ll

Layne v. GAF Corporation, 42 Ohio Misc.2d 19,

537 N.E.2d 252 (C.P. Cuyahoga Ct. 1988)................55. 13

Mississippi Power & Light Co. v. Moore,

487 U.S. ___, 108 S.Ct. 2428 (1988)... ..... 6.6.6 eee eee eee 8

New York v. General Electric Co.,

592 F. Supp. 291 (N.D. N.Y. 1984)... .. 2.2... 6c eee 11

Pennsylvania v. Union Gas Co.,

cee Bs eee ME en SRE CRIED os nes nnccnccen 5, 7, 8, 13

Smith Land and Improvement Corp. v. Celotex Corp.,

851 F.2d 86 (3rd Cir. 1988), cert. denied, 109

en ne ee a ebb ne hed esasscenevned 6

3550 Stevens Creek Associates v. Barclays Bank of

California, appeal docketed, No. 88-15503

en cen ccneuncadcnesseencnscarceens a

United States v. Conservation Chemical Co.,

619 F. Supp. 162 (W.D. Mo. 1985).......-.. 6.6... ee ee 10,11

United States v. Metate Asbestos Corp.,

584 F. Supp. 1143 (D. Ariz. 1989)... ..... 6... eee eee eee 5

United States v. Nicolet,

712 F. Supp. 1193 (D. Pa. 1989)... ..... 26... eee eee ee ee ee 13

United States v. Northeastern Pharmaceutical &

Chemical Co., 579 F. Supp. 823 (W.D. Mo. 1984),

aff'd in part and rev'd in part on other grounds,

810 F.2d 726 (8th Cir. 1986), cert. denied,

OB oon hace nbceeeehe weds ansaccececenseces 10

United States v. Reilly Tar and Chemical Corp.,

546 F. Supp. 1100 (D. Minn. 1982)......... 2.6.6.6. e eee eee 10

(v)

Page

United States v. Southeastern Pennsylvania

Transport Authority, 24 E.R.C. 1860

a a oe ic cdececbbunte ll

United States v. Wade, 577 F. Supp. 1326 (E.D.

PL CRU < pun edeavebbnusetckesaieess eevee ee eanes ll

Utah State Department of Health v. Ng,

fx LO ll

Walls v. Waste Resource Corp., 823 F.2d 977 (6th

Rak Sens eae ex baie ae Mats bee Saco asin sa haw ubieee ll

Wickland Ot! Terminals v. ASARCO, Inc.,

Fee ee Oe Ee I I, wa nccaceccbensecavetcsacades 6, 12

Wilshire Westwood Associates v. Atlantic Richfield Corp.,

FF | Ge ere ee ee are 8

Statutes:

Comprehensive Environmental Response, Compensation,

and Liability Act of 1980, 42 U.S.C. §§ 9601 ef seg......... passim

Md. Cts. & Jud. Proc. Code Ann. § 5-108(a) ................... 3

Superfund Amendments and Reauthorization Act of 1986,

Pub. L. No. 99-499, 100 Stat. 1613..................... passim

er ee Tn sooo as kc kee a Goes vada eeekencees Lane 2

Se Gite EG + ic kad okuhnavhesteeaciusoe canara 2

Oe etn, IG Fk 3 0ds ws nk cece baa os ae ore 11

CURE SOM... ooencn cee ee Sa 11

(vi)

Rules: Page

GO CPLR. 6 SOBA... cssccccccsccncccccscccccccvcccccsecceees 5

"Se. | & WITT CTT rrr 3

Other Authorities:

Attorney General's Asbestos Liability Report to

the Congress (Sept. 1981)... 6... 66ers 13

Brief of the United States as Amicus Cunae

filed Feb. 17, 1989 in 3550 Stevens Creek Associates

Easterbrook, The Role of Original Intent in

Statutory Construction, 11 Harv. J.L. & Pub.

Pol'y GD CRGBRD. cc ccccccccccccccncccncscsccccsccnceneces 14

EPA, Extent of the Hazardous Release Problem and

Future Funding Needs (CERCLA Section 301(a)(1)(C)

Sheedy) (Dec. 198A)... occ cc cscccccccccccnnvccesesneeseeeess 10

Exec. Order No. 12316, 46 Fed. Reg. 42237 (1987). ............ 12

House Conf. Rep. No. 962, 99th Cong., 2d Sess.

BED CRBBRD. occ nccccccccccccccccnccencecescceccecusenccecs 16

Senate Rep. No. 11, 99th Cong., Ist Sess. (1985)... ........... 14

Starr, Observations About the Use of Legislative History,

ROOF Baden B.5. BiB. nn cccccccccccccscncaccaccccccccecceces 14

Superfund Improvement Act of 1985: Hearings on

S.51 and S.494 Before the Senate Comm. on

Environment and Public Werks, 99th Cong..,

Dam Daee BE Gia cnc ccccccnccccceccstcccuscceccaccaceses s

IN THE

Supreme Court of the Wnited States

OCTOBER TERM, 1989

—s

No.

FIRST UNITED METHODIST CHURCH

OF HYATTSVILLE,

. Petitioner,

Vv.

UNITED STATES GYPSUM COMPANY,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

First United Methodist Church of Hyattsville petitions for

a wnt of certiorari to review the judgment of the United States

Court of Appeals for the Fourth Circuit in this case.

OPINIONS BELOW

The opinion of the United States Court of Appeals for the

Fourth Circuit is reported at 882 F.2d 862 and is reprinted }

in the appendix hereto (‘‘App.’’) at 12a - 25a. The order and

memorandum opinion of the United States District Court for

the District of Maryland is unreported and is reprinted at App.

la-lla.

nell

2

JURISDICTION

The judgment of the United States Court of Appeals was

entered on August 10, 1989. App. at 12a. The jurisdiction of

this Court is invoked under 28 U.S.C. § 1254(1).

RELEVANT STATUTES

The pertinent provisions of the Comprehensive Environmen-

tal Response, Compensation, and Liability Act of 1980, as

amended by the Superfund Amendments and Reauthorization

Act of 1986, are Sections 104(a)(3) and 203(a), 42 U.S.C.

\§ 9604(a)(3), 9658(a).

STATEMENT OF THE CASE

This is an asbestos property damage action brought by the

petitioner, First United Methodist Church of Hyattsville (the

‘‘Church’’), a nonprofit organization located in the State of

Maryland, against respondent, United States Gypsum Com-

pany (‘‘USG’"’), a manufacturer of asbestos-containing building

products which is headquartered in Chicago, Illinois.

As onginally pled, the Church's Complaint sought damages

in tort and in contract because its building was contaminated

by USG’s asbestos-containing acoustical plaster. USG's plaster

was installed in the Church during construction which was

completed in 1962. In 1985, the building was inspected by an

industnal hygienist and found to be contaminated by USG's

product. The hygienist recommended its removal. The Church

did so at a cost in excess of $225,000.00.

On June 15, 1989, the Church filed suit in the Circuit Court

for Prince George’s County, Maryland. The suit was there-

after removed by USG to the United States District Court

for the District of Maryland, pursuant to 28 U.S.C. § 1441.

In the latter forum, USG filed a motion for partial summary

judgment on all claims at issue here arising from the contamina-

tion of the Church's premises by asbestos-containing plaster,

interposing Maryland's 20-year statute of repose as a com-

plete defense, § 5-108(a) Md. Cts. & Jud. Proc. Code Ann.

(‘*§ 5-108(a)"’). The Church opposed this motion urging,

inter alia, that the time limits of the Maryland statute

are preempted Section 203(a) of CERCLA, 42 U.S.C.

§ 9658(a). The CERCLA provision establishes a uniform

discovery statute of limitation for all state law property damage

actions based on the release of a hazardous substance uito

the environment.

On October 13, 1988, the District Court granted USG’s mo-

tion, and finding no just reason for delay, entered a final judg-

ment pursuant to Fed. R. Civ. P. 54(b) as to all of the Church's

claims at issue here.

On November 21, 1988, the Church filed its Notice of Ap-

peal to the United States Court of Appeals for the Fourth Cir-

cuit. The Court of Appeals heard argument on June 9, 1989

and, on August 10, 1989, affirmed the judgment of the District

Court. The Court of Appeals ruled that CERCLA was not ‘‘in-

tended to apply to recover costs incurred for removing

asbestos products which are part of the structure of a build-

ing.’ App. at 20a. The court premised its holding on Section

104(a)(3) of CERCLA, 42 U.S.C. § 9604(a)(3). This provi-

sion, added to CERCLA as part of the Superfund Amendments

and Reauthonzation Act of 1986 (Pub. L. No. 99-499, 100 Stat.

1613) (‘“SARA’’) states in pertinent part:

~— (3) Limitations on response

The President shall not provide for a removal or

remedial action under this section in response to a

release or threat of release —

** *

(B) from products which are part of the struc-

ture of, and result in exposure within, residential

buildings or business or community structures;

** *

(4) Exception to limitations

Notwithstanding paragraph (3) of this subsection,

to the extent authorized by this section, the Presi-

dent may respond to any release or threat of release

if in the President’s discretion, it constitutes a public

health or environmental emergency and no other

person with the authority and capability to respond

to the emergency will do so in a timely manner.

While recognizing that this limitation applies only to the Presi-

dent of the United States, the Court of Appeals concluded that

‘‘it would be anomalous indeed if Congress had seen fit to limit

the President’s authority to respond to a particular type of

environmental hazard while placing no such limits on members

of the general public.’’ App. at 22a. As a result, the Court

of Appeals declined to apply Section 203(a) of CERCLA rather

than the Maryland statute of repose to the Church’s claims,

reasoning that Congress could not have intended Section 203(a)

to preempt state law in an area beyond CERCLA’s ambit. App.

at 23a-24a.

REASONS FOR GRANTING THE WRIT

The Court of Appeals’ decision improperly limits the applica-

tion of CERCLA to private cost recovery actions, subjecting

them to a limitation which by its very terms applies only to

federal government response actions and not to private ac-

tions. Moreover, the Court of Appeals’ application of Section

104(a)(3) is: (1) contrary to the position of the United States

a ee s Se =~ es

Environmental Protection Agency (‘‘EPA’’) which is charged

with the responsibility of enforcing CERCLA; and (2) in con-

flict with the interpretation of CERCLA by other federal courts.

The Court should grant the petition for certiorari to clarify

the application of CERCLA to private cost recovery actions.

1. The CERCLA Statutory Scheme

CERCLA was enacted to facilitate the prompt cleanup of

hazardous substances by both federal and private remedial ac-

tions. To that end, CERCLA imposes strict liability: ‘‘The

remedy the Congress felt it needed in CERCLA is sweeping:

everyone who is potentially responsible for hazardous-waste

contamination may be forced to contribute to the costs of

cleanup.’’ Pennsylvania v. Union Gas Co., ____ U.S. ___.,

109 S.Ct. 2273, 2285 (1989) (emphasis in the onginal).

CERCLA provides several separate but complementary

devices to provide for cleanup, compensation and liability

where there is a release or threat of release of a hazardous

substance.! First, Section 104, 42 U.S.C. § 9604 authorizes

the Federal Government to conduct its own removal or

remedial actions, using money from the Superfund. Second,

under Section 106 of CERCLA, 42 U.S.C. § 9606, the United

States may compel responsible parties to undertake a cleanup.

Third, Section 107, 42 U.S.C. § 9607, authorizes recovery

of the costs of response actions either by the Federal Govern-

ment or by private parties from the various liable parties,

including present and past owners of a facility and generators

'Asbestos is clearly a hazardous substance subject to CERCLA. See

United States v. Metate Asbestos Corp., 584 F Supp. 1143 (D. Anz. 1989);

40 C.F.R. § 302.4 (1986) (listing asbestos among the hazardous substances

in the EPA National Contingency Plan).

and transporters of hazardous substances.? Section 107(a)

‘“‘expressly creates a private cause of action,’’ which is ‘‘a

remedy independent of governmental actions financed by

Superfund.’’ Wickiand O1i Terminals v. ASARCO, Inc., 792

F.2d 887, 890-92 (9th Cir. 1986). Accord, Cadillac Fair-

view/California v. Dow Chemical Co., 840 F.2d 691, 693 (9th

. Cir. 1988).

A fundamental premise of CERCLA is that the massive prob-

lem posed by releases of hazardous substances into the en-

vironment cannot be addressed unless the limited public funds

devoted to the Superfund are supplemented by private cleanup

efforts, supported by private cost recovery actions. Thus, in

Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805

F.2d 1074, 1081 (1st Cir. 1986), the court noted that a liberal

reading of the statute which eliminates procedural obstacles

to private party recovery best comports with ‘‘congressional

purposes by preserving the limited resources of the

Fund... .’’ See also, Smith Land and Improvement Corp.

v. Celotex Corp., 851 F.2d 86, 91-92 (3rd Cir. 1988), cert.

denied, 109 S.Ct. 837 (1989) (‘‘[t]he costs associated with

cleanup must be absorbed somewhere. Congress has em-

phasized funding by responsible parties, but if they cannot be

ascertained or cannot pay the sums necessary, federal monies

may be used.’’). hs

The Court recently acknowledged that the purpose of

CERCLA is best served by promoting private cleanup actions

which in turn will preserve the much needed resources of the

Superfund:

Congress did not think it enough, moreover, to per-

mit only the Federal Government to recoup the costs

2In some cases, Sections 111 and 112 of CERCLA allow private parties

“to recover response costs through claims against the Superfund. 42 U.S.C.

§§ 9611, 9612.

~)

of its own cleanups of hazardous-waste sites; the

Government’s resources being finite, it could neither

pay up front for all necessary cleanups nor under-

take many projects at the same time. Some help was

needed, and Congress sought to encourage that help

by allowing private parties who voluntarily cleaned

up hazardous-waste sites to recover a proportionate

amount of the costs of cleanup from other poten-

tially liable parties.

Union Gas Co., 109 S.Ct. at 2285.

2. The Court of Appeals’ decision is in conflict

with the position of the EPA.

Congress amended CERCLA in 1986 by passing SARA.

SARA conserves the assets of the Superfund, assuring that

the EPA can respond effectively to the most dire environmen-

tal emergencies while leaving to other persons the task of ad-

dressing the less immediate problems. The Senate testimony

of EPA Administrator Lee M. Thomas in support of the limita-

tions and exceptions provisions of the SARA amendments most

cogently expresses this purpose:

What we have tried to do, Senator, with this. . .

is in fact narrowly define exclusions, . . . and not,

in fact, draw very sharply down the number of sites

that you have seen us deal with under Superfund to

this point . . . . We are getting more and more in-

quiries, more and more suggestions, that [t]he

breadth of the law as it currently exists makes Super-

fund an eligible source of funding for a wide, broad

array of public works projects, all kinds of water

system improvement projects, all kinds of individual

home and housing projects. We are suggesting this

[is] a very important provision. We feel we have

worked long and hard to draft it narrowly but so that,

prospectively, we can ensure that our focus and our

funding is on those major problems of hazardous

wastesites and hazardous substance releases which

we think is the primary intent of the Superfund

Program.

Superfund Improvement Act of 1985: Heanngs on S.51 and

S.494 Before the Senate Comm. on Environment and Public

Works, 99th Cong., lst Sess. at 13 (1985).

It is clear that the focus of 1986 CERCLA amendments was

on claims involving the Superfund under Section 104(a) rather

than, as the Court of Appeals characterized it, ‘‘a substan-

tive limitation on the breadth of CERCLA itself.’’ App. at 22a.

The Court of Appeals has improperly narrowed the breadth

of CERCLA’s application in private cost recovery actions, rely-

ing upon statutory language which by its terms applies only

to federal government response actions under Section 104.

This ruling curtails the authority Congress assigned to private

parties in the cleanup of hazardous substances, authority

recognized by this Court in Union Gas Co.

The EPA is charged with the primary responsibility for the

enforcement of CERCLA. The EPA’s interpretation of this

statutory scheme, therefore, is to be accorded great weight

to which the judiciary should defer. See Mississippi Power &

Light Co. v. Moore, 487 U.S. ___, 108 S.Ct. 2428 (1988);

Wilshire Westwood Associates v. Atlantic Richfield Corp, 881

F.2d 801, 803-810 (9th Cir. 1989) (EPA’s interpretation of

CERCLA’s scope is ‘“‘highly persuasive’ and ‘‘should be

accorded considerable deference.’’).

The EPA has taken precisely the same position as the

Church with respect to: the scope of CERCLA; the meaning

of the 1986 CERCLA amendments; and the distinction be-

tween permissible action by the Federal Government under

Section 104 as contrasted with acts by private parties under

Section 107.

In 3550 Stevens Creek Associates v. Barclays Bank of

California, appeal docketed, No. 88-15503 (9th Cir. Nov. 8,

1988), the District Court dismissed a private action filed under

Section 107(a)(4)(B) seeking recovery of response costs in-

curred in removing asbestos from a commercial building,

holding that Section 104(a)(3) precluded such claims. In its

amicus curiae brief filed in the pending appeal in 3550 Stevens

Creek Associates ,* the EPA urged the reversal of this decision:

The district court’s ruling in this case unnecessari-

ly limits private cost recovery actions brought under

Section 107 by subjecting them to a limitation which

by its terms applies only to federal government

response action under Section 104. This ruling is

contrary to the statutory language and fails to

recognize the important independent role Congress

assigned to private parties in the huge task of clean-

ing up hazardous substances across the nation.

Brief of the United States as Amicus Cunae filed February 17,

1989 in 3550 Stevens Creek Associates at 7. Moreover, the

EPA has reported to Congress that

[djuring the post-World War II period, matenals

containing asbestos were extensively used in the

construction of schools, commercial and government

buildings, and residences. These materials were

often sprayed or trowelled onto ceilings, walls, and

beams as a fire-retardant or as insulation. Spray-

applied materials containing asbestos [e.g., USG‘s

33550 Stevens Creek Associates is scheduled for oral argument on

November 14, 1989. CERCLA’s application to private asbestos removal

cost recovery actions is also at issue in County of Orange v. National

Gypsum Co., appeal docketed, No. 89-2529 (5th Cir. May 26, 1989).

10

acoustical plaster] are commonly friable (i.e., easily

crumbled or pulverized) and can result in the release

of asbestos fibers into the environment. Studies of

exposure to asbestos in workplace settings have con-

cluded that inhalation of asbestos fibers can lead to

pulmonary cancer, mesothelioma, and fibrosis of the

lung.

EPA, Extent of the Hazardous Release Problem and Future

Funding Needs (CERCLA Section 301(a)(1)(C) Study), at 5-12

(Dec. 1984). The context of the EPA’s assertion implies that

asbestos removal and recovery of the costs thereby incurred

are matters squarely within the ambit of CERCLA.

3. The Court of Appeals’ decision is in conflict

with the construction of CERCLA by other

federal courts, and it is contrary to the express

terms of Section 104.

Liability under Section 107(a) is imposed ‘‘notwithstanding

any other provision or rule of law, and subject only to the

defenses set forth in subsection (b),’’ 42 U.S.C. § 9607(a).

It is well settled that ‘‘Section 107(a) was meant to stand by

itself; liability under it can be determined without the numerous

inquiries [into Section 104 and Section 111 limitations on Fund

expenditures] suggested by the defendant.’’ United States v.

Reilly Tar and Chemical Corp., 546 F.Supp. 1100, 1118 (D.

Minn. 1982). Thus, for example, many courts have held that

Section 104(c)(3), 42 U.S.C. § 9604(c)(3), which requires the

EPA and a given state to enter into a cooperative agreement

before proceeding with a Fund-financed response, is not a

limitation on cost recovery actions under Section 107. See,

e.g., United States v. Conservation Chemical Co., 619 F.Supp.

162, 208-09 (W.D. Mo. 1985); United States v. Northeastern

Pharmaceutical & Chemical Co., 579 F.Supp. 823, 850 (W.D.

ll

Mo. 1984), aff'd in part and rev'd in part on other grounds,

810 F.2d 726 (8th Cir. 1986), cert. denied, 108 S.Ct. 146

(1987); New York v. General Electric Co., 592 F.Supp. 291,

303 (N.D. N.Y. 1984); United States v. Wade, 577 F.Supp.

1326, 1336 (E.D. Pa. 1983).

Similarly, courts have held that Section 112(a), 42 U.S.C.

\ 9612(a), which requires 60 days notice to the EPA before

initiating a claim against Superfund, does not apply to cost

recovery actions under Section 107(a). Walls v. Waste Resource

Corp., 823 F.2d 977, 979-981 (6th Cir. 1987); Idaho v. Howmet

Turbine Component Co., 814 F.2d 1376 (9th Cir. 1987);

Dedham, 805 F.2d at 1076-1082; Interchange Office Park v.

Standard Industries, Inc., 654 F.Supp. 166, 169-170 (W.D.

Tex. 1987); Utah State Department of Health v. Ng, 649

F.Supp. 1102, 1004-5 (D. Utah 1986); United States v.

Southeastern Pennsylvania Transport Authonty, 24 E.R.C.

1860, 1864 (E.D. Pa. 1986); Conservation Chemical Co., 619

F.Supp. at 209-11.

The Court of Appeals’ conclusory inference that limitations

on Fund-financed actions under Section 104 must apply to

private cost recovery actions under Section 107 is contrary

to the language of Section 107. Moreover, the cases cited

above demonstrate that Section 107 stands on its own. If Con-

gress had meant to limit cost recovery for responding to

releases of asbestos, it presumably would have addressed this

specifically in Section 107 itself, as it did for certain releases

of registered pesticides, 42 U.S.C. § 9607(i), and federally

permitted releases, 42 U.S.C. § 9607(j).4

‘Congress has also placed some limitations which apply to CERCLA as

a whole in the definition section of the statute. See, e.g., 42 U.S.C.

\ 9601(14) (defining ‘‘hazardous substance’’ for purposes of the statute

to exclude ‘‘petroleum, including crude oil or any fraction thereof. . ."’);

42 U.S.C. § 9601(22)(D) (defining ‘‘release’’ so as to exclude *‘the nor-

mal application of fertilizer’’).

12

The explicit language of Section 104(a)(3) confirms that this

limitation in particular cannot apply to private actions under

Section 107. This provision states that ‘‘the President shall

not provide for a removal or remedial action under this sec-

tion,’’ in response to several categories of releases, including

products which are part of the structure of buildings. 42 U.S.C.

§ 9604(a)(3) (emphasis added). By its terms, this limitation

only applies to actions taken by the EPA under Section 104.°

This reading is- reinforced by the language of Section

104(a)(4), which creates an exception to the bar of Subsec-

tion (a)(3) whenever the EPA determines in its discretion that

the relevant release or threat of release ‘‘constitutes a public

health or environmental emergency and no other person with

the authority and capability to respond to the emergency will

do so in a timely manner.”’

Furthermore, the last phrase of Subsection (a)(4) indicates

that Congress expected that private parties would respond

to the releases covered by Subsection (a)(3), thus preserv-

ing the Fund for emergencies where no other party could re-

spond. There is no reason to think that Congress wanted to

bar such responding private parties from recovering their

costs. Such a bar would have been contrary to the obvious

congressional desire to encourage private cleanups in order

to preserve the Fund. See Cadillac Fairview, 840 F.2d at 694

(citing ‘‘CERCLA’s broad remedial purpose to promote private

enforcement actions ‘independent of governmental actions

financed by Superfund’’’ (quoting Wickland, 792 F.2d at 892)).

Moreover, in his 1981 Report to Congress, the United States

Attorney General stated that it was in the national interest

that school districts faced with substantial asbestos removal

SThe President has delegated his response authority under CERCLA

generally to the EPA. Exec. Order No. 12316, 46 Fed. Reg. 42237 (1987).

13

costs have the ability to recover from the manufacturers which

sold these products without warning of these hazards. See Af-

torney General's Asbestos Liability Report to the Congress (Sept.

1981) at iv-vii.

Indeed, the Court of Appeals overlooks the possible impact

of its statutory interpretation: had asbestos conditions at the

Church created ‘‘a public health or environmental emergen-

cy,’’ Section 104(a)(4) would have empowered the EPA to

expend Superfund monies to remedy this hazard. The EPA,

in turn, could have brought suit against the Church to reclaim

the government’s removal costs. In such a circumstance, given

the Court of Appeals’ ruling, the Church would have no

recourse against the persons responsible for the placement

of the hazardous substance in its facility. This result is clearly

contrary to CERCLA’s aim which is that “‘everyone who is

potentially responsible for hazardous-waste contamination may

be forced to contribute to the costs of cleanup.”’ Union Gas

Co., 109 S.Ct. at 2285.

The Court of Appeals’ construction effectively leaves

CERCLA available only as a remedy for cleaning up asbestos

dumps (see, e.g., United States v. Nicolet, 712 F.Supp. 1193

(D. Pa. 1989)), but prohibits CERCLA’s application to the

arguably more dangerous release of asbestos fibers in a con-

tained ‘‘environment.’’ See Layne v. GAF Corporation, 42 Ohio

Misc.2d 19, 537 N.E.2d 252 (C.P. Cuyahoga Ct. 1988)

(mesothelioma caused by asbestos fibers released into the air

of an office building). In short, the Court of Appeals’ inter-

pretation of CERCLA discourages private cleanup efforts in

dangerous buildings, making it more likely that Superfund

monies will have to be spent under Section 104(a)(4)’s

emergency exception.

14

4. The Court of Appeals’ decision is in conflict

with the legislative history of Section 104.

The plain, unambiguous language of the statute refutes the

Court of Appeals’ conclusion that the Church may not recover

the cost of removing a hazard from its premises. Resort to

the legislative history of CERCLA is therefore unnecessary.

The Court observed in Burlington Northern R. Co. v. Okla-

homa Tax Com., 481 U.S. 454, 461 (1987):*

Legislative history can be a legitimate guide to a

statutory purpose obscured by ambiguity, but ‘‘[i)n

the absence of a ‘clearly expressed legislative

intention to the contrary,’ the language of the statute

itself ‘must ordinarily be regarded as conclusive.’’’

United States v. James, 478 U.S. 597, 606 (1986)

(quoting Consumer Product Safety Comm'n v. GTE

Sylvania, Inc., 447 U.S. 102, 108 (1980)). Unless

exceptional circumstances dictate otherwise,

‘‘lw]hen we find the terms of a statute unambiguous,

judicial inquiry is complete.’’ Rubin v. United States,

449 U.S. 424 (1981).

The Court of Appeals, however, sees support for its ruling

in the Senate Report on SARA. The Senate Report states (S.

Rep. No. 11, 99th Cong., 1st Sess. 16-17 (1985)):

CERCLA response authorities are extremely

broad, but there are nevertheless situations, some

of which may be life-threatening, which are not within

the law's scope. The Agency has encountered some

difficulties, primarily political, in restraining CERCLA

responses to the scope of the law. For this reason,

S. 51 proposes to make more explicit certain areas

which the law does not cover.

*See also Starr, TT aes ae 1987

Duke LJ. 371; Easterbrook, The Role of Original Intent in Statutory

Construction, 11 Harv. J.L. & Pub. Pol'y 59 (1987).

15

Specifically, S. 51 makes more clear the exclusion

from remedial or removal action of a release or a

threat of a release:

—from products which are part of the structure of,

and result in exposure within a facility;

The Environmental Protection Agency has

received requests to take removal or remedial action

in situations where the contamination was from

building materials used in the structure and was

creating an indoor hazard. This section would clarify

that such situations are not subject to remedial or

removal action.

New subsection (b)(4) provides that, notwith-

standing these exclusions, the President can provide

remedial or removal action if the President believes

that the release or threat of release constitutes a

public health or environmental emergency and no

other person with the authority and capability will

respond in a timely manner.

While this report speaks loosely about situations which are

‘not within the law’s scope,’’ it is clear that the focus was

on limiting the EPA's responsibility for responding to certain

hazards in order to protect the Fund from political pressures

to mount expensive responses to those hazards. There is

absolutely no indication that the Committee intended to limit

private actions under Section 107(a) for costs incurred in

responding to a release of hazardous substances.

Significantly, the Conference Report on SARA contains none

of the broad language one finds in the Senate Report. The Con-

ference Report characterizes the Senate provision (which was

16

adopted) as follows (H. Conf. Rep. No. 962, 99th Cong., 2d

Sess. 190 (1986)) (emphasis added):

Section 112(b) prohibits the President from under-

taking a response action under section 104 in re-

sponse-to a release . . . from products which are

part of the structure of residential buildings or

businesses or community structures which result in

exposure in such structures . . . . These limitations

on response actions will not apply, however, if in

the President's discretion the releases constitute a

public health or environmental emergency and no

other person with the authority and capability to re-

spond will do so in a timely manner.

The Conference Committee thus did not contemplate that

the limitations would apply to anyone besides the Federal

Government acting under Section 104. The Conference Report

must be accorded more deference than the Senate Report,

‘‘inasmuch as the conference report represents the final state-

ment of terms agreed upon by both houses of Congress, [and]

next to the statute itself, . . . is the most persuasive evidence

of Congressional intent behind the enactment of a statute."’

Davis v. Lukhard, 788 F .2d 973, 981 (4th Cir.), cert. denied

sub nom. Stanton v. Lukhard, 479 U.S. 868 (1986); see also

Demby v. Schweiker, 671 F.2d 507, 510 (D.C. Cir. 1981).

The Court of Appeals’ application of Section 104(a)(3) limits

CERCLA's broad remedial! purpose by discouraging private

cleanup efforts and increasing the likelihood that Superfund

monies will be tapped to pay for emergency cleanup of

asbestos-contaminated buildings. This result is clearly con-

trary to the intent of Congress when it enacted CERCLA.

CONCLUSION

For the foregoing reasons, the Court should grant the writ

and reverse the decision below.

Resnectfully submitted,

Peter T. Enslein

ASHCRAFT & GEREL

2000 L Street, N.W.

Suite 700

Washington, D.C. 20036

(202) 783-6400

Counsel for Petitioner

la

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

FIRST UNITED METHODIST

CHURCH OF HYATTSVILLE

Plaintiff :

v. : CIVIL NO.

JH-88-2030

UNITED STATES GYPSUM COMPANY

Defendani

ORDER

Upon consideration of United States Gypsum Company’s

motion for partial summary judgment, the plaintiff's opposi-

tion thereto, and defendant’s reply, it is the opinion of this

Court that the plaintiff’s claims based on any improvement to

its real estate that first became available for use on June 17,

1966 are barred by Maryland’s Statute of Repose. Accordingly,

it is this 13th day of October, 1988, by the United States

District Court for the District of Maryland, ORDERED:

1. That defendant’s motion for partial summary judgment

BE, and the same hereby IS, GRANTED;

2. That plaintiff's claims against the defendant arising from

improvements to plaintiff's realty prior to 1966 are barred by

the Statute of Repose; and

3. That the Clerk mail copies of this Order to counsel of

record.

/s/

Joseph C. Howard

United States District Judge

2a

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

FIRST UNITED METHODIST

CHURCH OF HYATTSVILLE

Plaintiff

v. : CIVIL NO.

= JH-88-2030

UNITED STATES GYPSUM COMPANY

Defendant

MEMORANDUM OPINION

Defendant in this action, United States Gypsum Company

(‘‘U.S. Gypsum’’), moves this Court for partial summary judg-

ment ‘‘with respect to all of plaintiff’s claims based on any

improvement to its real estate that first became available for

its intended use before June 17, 1966.’’ (Paper #14 at 1). The

basis of this motion is defendant’s claim that the action is bar-

red by Maryland’s Statute of Repose, Md. Cts. & Jud. Proc.

Code Ann. § 5-108 (1984). This Court agrees. Because there

is no genuine dispute as to any material fact, and U.S. Gyp-

sum is entitled to judgment as a matter of law, summary judg-

ment is granted with respect to all claims based on im-

provements prior to June 17, 1966. No hearing is necessary.

Local Rule 6(B).

I.

Facts

Construction of the First United Methodist Church of

Hyattsville (‘United Methodist”’ or ‘‘the Church’’) began in

1961. (Complaint, para. 8). U.S. Gypsum was employed to

supply asbestos-containing acoustical plaster for the ceilings

3a

of the Church which was installed by Kidwell and Kidwell

Corp., a plaster subcontractor. (Compiaint, para. 11). In 1969,

U.S. Gypsum again supplied a small amount of acoustical

plaster as replacement material. (Complaint, para. 12).

United Methodist was unaware that U.S. Gypsum’s acous-

tical plaster, Audicote, contained sprayed-on asbestos. (Plain-

tiff’s Opposition, Exhibit 17, Affidavit of A. Hensel Fink). In

1985, Dennis J. Leebel, Chairman of the Board of Trustees

of First United, retained Occupational Medicine Center, Inc.

(‘““OMC’’) to inspect and test the Church for asbestos

materials. (Plaintiff's Opposition, Exhibit 19, Affidavit of Dennis

J. Leebel). OMC reported that it found friable sprayed-

asbestos ceiling material in United Methodist and recommend-

ed its removal. (Leebel Affidavit, para. 6).

United Methodist originally filed suit against U.S. Gypsum

in the Circuit Court for Prince George’s County on June 17,

1988. The suit was subsequently removed to this Court and

assigned to the Honorable Norman P. Ramsey, who transfer-

red the case to the undersigned. United Methodist’s complaint

alleges three causes of action in tort (strict liability, negligence,

fraud) and two in contract (breach of express and implied war-

ranties). The complaint seeks money damages estimated at

$225,000 for the removal of asbestos-containing materials in

the Church building.

The parties have stipulated, for purposes of this motion,

that the installation of the plaster ceilings in 1962 was part

of the original construction of the Church building and that the

building was first available for its intended use sometime in

1962. The parties have also stipulated that most of the material

allegedly containing asbestos was installed in 1962 and that

only a small amount of such material was involved in the 1969

repair referred to in paragraph 12 of the complaint. (Paper

#12).

4a

II. ,

U.S. Gypsum’s Motion for Partial Summary Judgment

The basis for U.S. Gypsum’s motion is that United

Methodist’s pre-1966 claims are barred by the Statute of

Repose.! The pertinent section of this statute provides

that ‘‘no cause of action for damages accrues . . . for damages

incurred . . . to real or personal property resulting from the

defective and unsafe condition of an improvement to real prop-

1In full, the Statute of Repose provides:

§ 5-108. Injury to person or property occurring after completion of im-

provement to realty.

(a) Injury occurring more than 20 years later. — Except as provided by

this section, no cause of action for damages accrues and a person may

not seek contribution or indemnity for damages incurred when wrongful

death, personai injury, or injury to real or personal property resulting from

the defective and unsafe condition of an improvement to real property oc-

curs more than 20 years after the date the entire improvement first

becomes available for its intended use.

(b) Action against architect, professional engineer, or contractor. — A

cause of action for damages does not accrue and a person may not seek

contribution or indemnity from any architect, professional engineer, or con-

tractor for damages incurred when wrongful death, personal injury, or in-

jury to real or personal property, resulting from the defective and unsafe

condition of an improvement to real property, occurs more than 10 years

after the date the entire improvement first became available for its intended

use.

(c) Three-year limitation after accrual of cause of action. — Upon accrual

of a cause of action referred to in subsections (a) and (b), an action shall

be filed within three years.

(d) Exception. — This section does not apply if the defendant was in

actual possession and control of the property as owner, tenant, or other-

wise when the injury occurred.

(e) When action accrues. — A cause of action for an injury described

in this section accrues when the injury or damage occurs.

(Ann. Code 1957, art. 57, § 20; 1973, 1st Sp. Sess., ch. 2, § 1; 1979,

ch. 698; 1980, ch. 605).

Webel iny |

5a

erty [which] occurs more than 20 years after the date the en-

tire improvement first becomes available for its intended use.”’

Md. Cts. & Jud. Proc. Code Ann. § 5-108(a). U.S. Gypsum’s

product was installed in 1962; the improvement first became

available for its intended use in 1962. First United filed suit

on June 17, 1988, twenty-six years after the prescribed period.

Accordingly, U.S. Gypsum argues, the suit is barred.

Ill.

Summary Judgment Generally

Before addressing the motion’s merits, the Court believes

it helpful to set out the general principles governing Rule 56

dispositions.

Summary judgment may be awarded:

[A]gainst a party who fails to make a showing suffi-

cient to establish the existence of an element essen-

tial to that party’s case, and on which that party will

bear the burden of proof at trial.

Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In ruling

on a motion for summary judgment, the Court must deter-

mine ‘‘whether the evidence presents a sufficient disagree-

ment to require submission to a jury or whether it is so one-

sided that one party must prevail as a matter of law.’’ Ander-

son v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986).

Summary judgment is proper if the pleadings, depositions,

answers to interrogatories and admissions on file, grouped with

any affidavits, show there is no genuine issue of material fact.

In the typical summary judgment scenerio [sic] — where

the moving party does not have the burden of proof on the

material facts of trial — Celotex is helpful in determining the

parties’ initial Rule 56 burdens. The moving party must first

6a

identify evidence which demonstrates the absence of a genuine

issue of material fact regarding the nonmoving party’s case.

Celotex, 477 U.S. at 323. The Court has clarified what an

opposing party may fairly be required to show to defeat the

motion where it would have the burden of proof on the issue

at trial. Thus, once the moving party has discharged its initial

burden, the nonmoving party — who bears the burden of proof

at trial — must go past the pleadings and isolate specific facts

that show a genuine issue for trial. Jd. at 324. The nonmoving

party can oppose the motion with ‘‘any of the kinds of

evidentiary materials listed in Rule 56(c) . . . .”’ Jd. In that

regard, the nonmoving party is entitled to the benefit of all

favorable inferences and legal theories indicated by the

evidence. If the nonmoving party fails to properly oppose

the motion, the Court must enter judgment in favor of

the moving party. Jd. at 322-323.

Ill.

Application of the Statute to U.S. Gypsum

U.S. Gypsum’s motion contains two central arguments: (1)

the Statute of Repose applies to suppliers/manufacturers such

as the defendant, and (2) the Statute is a substantive enact-

ment of law which extinguishes a cause of action, in contrast

to a statute of limitations which is merely a procedural bar to

the availability of a remedy, and is therefore not subject to

tolling.

A.

Cts. and Jud. Proc. § 5-108

Does Apply to Suppliers/Manufacturers

U.S. Gypsum can assert the defense of the Statute of

Repose because the Maryland courts have extended this

7a

a”

defense to suppliers of an allegedly unsafe and defective

product.

In Whiting-Turner Contracting Co. v. Coupard, 304 Md.

323, 499 A.2d 178 (1985), the Court of Appeals held that the

Statute of Repose was constitutional in the face of an equal

protection challenge, even though Subsection (b) of the Statute

provided greater protection to architects and engineers than

to suppliers or other persons under Subsection (a). (Subsec-

tion (b) only contains a ten-year limitation period for architects

and engineers.) The Court found that ‘‘[t]he Legislature could

view the liability exposure of the supplier to be less than that

of an architect, because the former is in a better position than

the latter to detect defects. 304 Md. at 356. The Court cited

several cases from other jurisdictions which have extended

the defense of a statute of repose to suppliers of materials

or equipment. 304 Md. at 356-57.

Subsection (a) of § 5-108 is unique in that it contains no

limiting language defining the class for which this section ap-

plies. In fact, only Maryland and the District of Columbia have

enacted statutes with general provisions not limited to cer-

tain defendants or to certain activities. /.H. Westerman Co.

v. Fireman’s Fund Ins. Co., 499 A.2d 116 at 121, n.4.

United Methodist’s opposition contains no case law to refute

the argument that § 5-108(a) is inapplicable to actions against

suppliers and manufacturers. Rather, United Methodist cites

to the legislative history of the Statute and cites the Gover-

nor’s Commission Report No. 3F to the General Assembly.

This 1973 report stated that § 5-108 protects only builders.

The Court finds this unpersuasive in light of the Court of

Appeals’ decision in Whiting-Turner, supra.

First Methodist cites Allentown Plaza Associates v. Subur-

ban Propane Gas Corp., 43 Md. App. 337, 405 A.2d 326, 330

8a

(1979), for the proposition that § 5-108 cannot be applied

retrospectively. The Church argues that the acoustical plaster

at issue was completed by 1962 but § 5-108 was not effective

until January 1, 1974. The court in Whiting Turner rejected

this argument as it applied to Subsection (b) of the Statute.

Subsection (b), like Subsection (a), extinguishes a cause of

action. Accordingly, this Court finds that Subsection (a) should

also apply retrospectively.

B.

Maryland’s Statute of Repose is a Substantive

Enactment of Law and is not Subject to Tolling

U.S. Gypsum argues that since § 5-108 is a substantive

enactment of law that extinguishes a cause of action, in con-

trast to a statute of limitations, which is merely a procedural -

bar to the availability of a remedy, § 5-108 is not subject to

tolling.

Both this Court and the Fourth Circuit have concluded that

§ 5-108 is substantive law. President and Directors, etc. v.

Madden, 505 F.Supp. 557 (1980), aff'd, 660 F.2d 91 (1981).

In Madden, Judge Kaufman analyzed the District of Colum-

bia’s Statute of Repose, D.C. § 12-310. After deciding that

the Maryland Court of Appeals would consider § 5-108

substantive, id. at 572, Judge Kaufman held ‘‘that the Court

of Appeals of Maryland would view D.C. Code § 12-310 as

a substantive grant of immunity.’’ Jd. at 575.

Although no court has held that § 5-108 can be tolled by

fraud or concealment,? this Court takes guidance from a

2In Getsz v. GBMC, 313 Md. 301, 545 A.2d 658 (1988), the court held

that Cts. & Jud. Proc § 5-203 [fraud tolling statute] was applicable to

Maryland's wrongful death statute. However, the Court stated, ‘‘[wle

intimate no opinion as to the effect of § 5-203 on the medical malpractice

statute of repose."’ Jd. at 325, n.9.

9a

recent opinion from the District of Columbia which held to the

contrary. In Wesley Theological Seminary v. U.S. Gypsum Co.,

et al., No. 85-1606, slip op. (D.C.D.C. Jan. 5, 1988), the

Honorable Joyce Hens Green held that D.C. § 12-310, the

D.C. Statute of Repose, is not tolled by concealment of the

defects by defendants. Slip op. at 10, n.7. Moreover, the

period runs solely from the date of the construction or improve-

ment. Jd.

Statutes of repose, unlike statutes of limitation which are

normally procedural, provide a defendant complete and total

relief upon the passage of time and are not dependent on any

other action. The Eighth Circuit has recently held that

Nebraska's Statute of Repose is not tolled by allegations of

fraud.

Because the injuries for which plaintiff seeks occur-

red after expiration of the ten-year period [provid-

ed by the statute of repose] plaintiffs could not have

been fraudulently induced to postpone timely filing

of their lawsuits. Thus, the theory of equitable toll-

ing is unavailable under the circumstances of this

case. [Emphasis in onginal.]

Peterson v. Fuller Co., 807 F.2d 151 at 153 (8th Cir. 1986).

Since United Methodist claims its cause of action accrued in

1985 (plaintiff's opposition at 23), it was not fraudulently in-

duced to postpone timely filing of its lawsuit.

United Methodist’s opposition contains nothing that would

demonstrate that there exists a genuine dispute as to a material

fact. Plaintiff's opposition takes issue with the authority cited

by U.S. Gypsum and nothing more. United Methodist states

that § 5-108 is not a statute of repose because the statute itself

and its legislative history lack this designation. (Opposition at

20). It also argues that if § 5-108 is a substantive enactment,

the General Assembly would have codified it with other ex-

a

10a

plicitly granted substantive immunities. Jd. Although the typical

rule provides that statutes of limitation are substantive only

if: (1) the limitations period is set forth in the statute, and (2)

the statute creates a cause of action, Madden J conclusively

stated that the Maryland Court of Appeals would consider

Maryland's Statute of Repose as substantive, 505 F.Supp. at

572, and this finding was upheld on appeal. 660 F:2d 91. This

Court finds Methodist’s arguments unavailing.

Finally, United Methodist argues that § 5-108 is preemp-

ted by the Comprehensive Environmental Response, Com-

pensation and Liability Act of 1980 (‘““CERCLA’’), 42 U.S.C.

§ 9601-9658. United Methodist argues that § 9658 requires

the application of the federal discovery rule in cases involving

property damage caused by hazardous substances. This Court

disagrees. CERCLA is only triggered in an action involving

the release of a hazardous substance into the environment or

in ambient air, which has been defined as that portion of the

atmosphere, external to buildings, to which the general public

has access.’ Therefore, United Method’s [sic] preemption

argument is misplaced.

Although an allegedly defrauded plaintiff should have his day

in court, the General Assembly has responded to the problems

arising from the expansion of liability based on defective and

unsafe conditions of an improvement to real property. The

legislature's response was the creation of Maryland's Statute

340 C.F.R. § 50.1(e), definition of ‘‘ambient air’’ under the Clear [sic]

Air Act. CERCLA does not define this term. However, this definition can

be extrapolated from other regulations because the vanous federal en-

vironmental laws are often held to be in pant materia. See, e.g., U.S. v.

Shell Oil Co., 605 F. Supp. 1064 (D.C. Colo. 1985).

lla

of Repose, which this Court finds applicable here. According-

ly, U.S. Gypsum’s motion for partial summary judgment is

granted. A separate order shall be issued.

/s/

Joseph C. Howard

United States District Judge

Date: October 13th, 1988

12a

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 88-1612

FIRST UNITED METHODIST CHURCH OF

HYATTSVILLE

Plaintiff-Appellant

v.

UNITED STATES GYPSUM COMPANY

Defendant-Appellee

Appeal from the United States District Court for the District

of Maryland, at Baltimore. Joseph C. Howard, District Judge.

(C/A 88-2030-JH)

Argued: June 9, 1989 Decided: August 10, 1989

Before RUSSELL and HALL, Circuit Judges, and BUTZNER,

Senior Circuit Judge.

Peter Tyler Enslein (Michelle A. Parfitt, James M. Hanny,

ASHCRAFT & GEREL on brief) for Appellant. George Albert

Nilson John E. Griffith, Jr., John A. Singer, PIPER & MAR-

BURY; Thomas B. Kenworthy, MORGAN, LEWIS &

BOCKIUS on brief) for Appellee.

HALL, Circuit Judge:

The First United Methodist Church of Hyattsville, Maryland

(‘‘First United’’) appeals the district court’s grant of partial

13a

summary judgment in favor of United States Gypsum Com-

pany (‘‘USG’’) based on a Maryland statute of repose, § 5-108

Md. Cts. & Jud. Proc. Code Ann. Specifically, the district court

held that the repose period of § 5-108(a) was not preempted

by the Comprehensive Environmental Response and Compen-

sation Act of 1980 (““CERCLA’’), 42 U.S.C. § 9658. Finding

no error, we affirm.

I.

In 1961, First United undertook construction of a new church

building. At the direction of the building’s architect, an

asbestos-containing acoustical plaster, manufactured by USG,

was applied to the building’s ceilings. The church was con-

secrated on May 20, 1962, and has been in continuous use

ever since. In 1969, a portion of the ceiling was replaced and

asbestos-laden plaster was again used.

In July, 1985, First United became concerned over the

possibility that asbestos materials may have been used in the

construction of the church. In August, the presence of danger

from the acoustical plaster was discovered and First United’s

Board of Trustees directed its removal from the building.

On June 15, 1988, First United brought suit against USG

in Maryland state court alleging that the plaster posed a health

hazard to those who frequently occupied the building. The

Church sought to recover the cost of the removal of the

plaster, an amount in excess of $225,000.00. USG removed

the case to federal court without opposition.

First United’s complaint advanced the state law theories of

strict liability, negligence, breach of express and implied war-

ranties, and fraud. On July 26, USG filed a motion for partial

summary judgment on all claims arising from installation of the

plaster which occurred before June 17, 1966, interposing

ena eee rest

14a

Maryland’s 20-year statute of repose as a complete defense.

§ 5-108(a) Md. Cts. & Jud. Proc. Code Ann. On October 13,

the district court granted the motion and, finding no reason

for just delays, entered a final judgment pursuant to Fed. R.

Civ. P. 54(b) as to all pre-1966 claims. This appeal followed.

II.

First United makes several arguments against the applica-

tion of the statute of repose to its claims. The church’s primary

contention is that manufacturers are not in the class of per-

sons protected by the statute. Alternatively, First United

argues that even if the statute applies, USG’s fraudulent con-

cealment of the hazards of its plaster serve to toll the statute’s

running. Finally, the church argues that the time limits of

§ 5-108, as applied to its claims, have been preempted by

CERCLA’s § 9658, which establishes a uniform statute of

limitations for all state law property damage actions based on

the release of any hazardous substance into the environment.

We address these arguments in turn.

The statute of repose reads in pertinent part:

§ 5-108. Injury to person or property occurring

after completion of improvement to realty.

(a) Injury occurring more than 20 years later. —

Except as provided by this section, no cause of ac-

tion for damages accrues and a person may not seek

contnbution or indemnity for damages incurred when

wrongful death, personal injury, or injury to real or

personal property resulting from the defective and

unsafe condition of an improvement to real proper-

ty occurs more than 20 years after the date the en-

tire improvement first becomes available for its in-

tended use.

15a

First United bases its narrow reading of this broad grant

of immunity on a passage from the statute’s legislative history

that characterizes the statute as protecting ‘‘builders, con-

tractors, landlords, and realtors.’’ See Allentown Plaza

Associates v. Suburban Propane Gas Corp., 43 Md. App. 337,

342-44, 405 A.2d 326 (1979) (discussing the Revisor’s Note

to § 5-108). According to First United’s argument, because

USG as manufacturer of the plaster does not fit into one of

these categories, it cannot have benefit of the statute. We

do not agree.

While a statute’s legislative history is often helpful in resolv-

ing ambiguity one of the time-honored maxims of statutory

construction is that when the language of a statute is clear,

there is no need to rely on its legislative history. Ex Parte

Collett, 337 U.S. 55, 61 (1949). Such is the case here. This

statute unequivocally states that ‘‘no cause of action for

damages accrues’’ after the 20-year time limit. And, it is com-

pletely silent as to any limitation on the class of persons it pro-

tects. To remove manufacturers from the ambit of § 5-108(a)

as First United suggests, would be flatly inconsistent with this

language’s plain mandate. We are not alone in reaching this

result.

In ].H. Westerman Co. v. Fireman’s Fund Ins. Co., 499

A.2d 116 (D.C. App. 1985), the District of Columbia court

was forced to construe its nearly-identical statute of repose.

In concluding that manufacturers were covered by the statute,

the court reasoned that this language creates an immunity

which turns on the defendant’s connection to the improve-

ment rather than on the type of service the defendant rendered

or product it provided. Jd. at 120. We find this reasoning per-

suasive and hold that § 5-108(a) works to insulate from liabili-

16a

ty manufacturers of products used in improvements made to

real property. !

Il.

First United next contends that even if § 9-108(a) applies,

USG’s fraudulent concealment of the hazards of its plaster tolls

the time limits of the statute.2 We disagree.

The common law principle of equitable tolling of limitations

periods has been codified in Maryland:

If a party is kept in ignorance of a cause of action

by the fraud of an adverse party, the cause of ac-

tion shall be deemed to accrue at the time when the

party discovered, or by the exercise of ordinary

diligence should have discovered the fraud. (An.

Code 1957, art. 57, § 14; 1973, 1st Sp. Sess., Ch.

2, § 1)

§ 5-203 Md. Cts. & Jud. Proc. Ann.? As the language of

this provision indicates, it is intended to give relief to victims

of fraud by tolling the time of accrual of a cause of action for

purposes of an applicable statute of limitations. E.g., Butcher

v. Robertshaw Controls Co., 550 F. Supp. 692, 703 (D. Md.

1981). However, as the Maryland courts have repeatedly

‘See also Whiting-Turner Contracting Co. v. Coupard, 304 Md. 340,

349, 499 A.2d 178 (1985) (court in dicta commented that statute protects

‘‘suppliers of building materials’’).

Predictably, USG argues that First United’s lack of due diligence, not

USG’s fraud, was the reason that this action was not timely filed. This,

of course, is the quintessential question of fact in fraudulent concealment

cases; however, our disposition of this issue obviates any need for its

resolution.

*The statute has recently been amended, however, the amendment is

not applicable ‘‘to any actions arising from events occurring before July

1, 1987,’’ and thus has no effect on the instant dispute. See § 2, Ch. 592,

Acts 1987.

a me

17a

recognized, § 5-108 is a statute of repose, not a statute of

limitations, and the time of accrual has been set by the

Maryland General Assembly. Hilliard & Bartko Joint Venture

v. Fedco Systems, Inc., 309 Md. 147, 159, 522 A.2d 961

(1987); Whiting-Turner, 304 Md. at 350; Allentown Plaza,

43 Md. App. at 338 n.2; see also President and Directors, of

Georgetown College v. Madden, 505 F.Supp. 557, 571 (D. Md.

1980). These are meaningful distinctions.

A statute of limitations is a procedural device that operates

as a defense to limit the remedy available from an existing

cause of action. Goad v. Celotex Corp., 831 F.2d 508, 511 (4th ~

Cir. 1987), cert. denied, 108 S.Ct. 1871 (1988). A statute of

repose creates a substantive right in those protected to be

free from liability after a legislatively-determined period of time.

Id. Statutes of limitations are motivated by considerations of

fairness to defendants and are intended to encourage prompt

resolution of disputes by providing a simple procedural

mechanism to dispose of stale claims. Hang v. Johns-Manville

Products Corp., 284 Md. 70, 75, 394 A.2d 299 (1978). Statutes

of repose are based on considerations of the economic best

interests of the public as a whole and are substantive grants

of immunity based on a legislative balance of the respective

rights of potential plaintiffs and defendants struck by deter-

mining a time limit beyond which liability no longer exists.

Whiting-Turner, 304 Md. at 349-50. Thus, as a general rule,

a statute of limitations is tolled by a defendant’s fraudulent

concealment of a plaintiff's injury because it would be inequi-

table to allow a defendant to use a statute intended as a device

of fairness to perpetrate a fraud. Conversely, a statute of

repose is typically an absolute time limit beyond which liabili-

ty no longer exists and is not tolled for any reason because

to do so would upset the economic balance struck by the

legislative body. Knox v. AC&S, Inc., 690 F. Supp. 752, 759

(S.D. Ind. 1988).

18a

These general principles counsel that we should not lightly

disturb the Maryland General Assembly’s judgment on the

time limit set by § 5-108(a). We recognize, as the Maryland

court has recognized, the unique public policy concerns em-

bodied in the 20-year repose period:

[The statute is] a response to the problems aris-

ing from the expansion of liability based on the defec-

tive and unsafe condition .f an improvement to real

property. . . . If a legislative body concludes that

it will address the problem of expanded liability . . .

it must balance the interests of those potentially sub-

ject to liability, of those directly suffering Injury, and

of the public in having improvements built safely and

at a reasonable cost.

Whiting-Turner, 304 Md. at 349-50.

Further, it appears that a purpose of the statute was to in-

extricably tie the accrual of a property damage action to the

date an improvement was placed into use precisely because

tolling mechanisms, such as the one urged by First United,

had expanded the liability of potential defendants. jd. at 349.

Lastly, we note that had the Maryland General Assembly

desired that § 5-203 apply to § 5-108, it could have expressly

provided so as it has done in the medical malpractice arena.

See § 5-109(f)(2) Md. Cts. & Jud. Code Ann. (amended in

1987 to show the applicability of § 5-203). In view of these

considerations, it would be inappropriate for us to construe

§ 5-108(a) to provide for anything other than the 20-year

repose period Maryland’s lawmakers have chosen and con-

sequently, we hold that § 5-203 does not operate to toll that

period.

4See Glenn v. Morelas, 79 Md. App. 90, 555 A.2da 1064 (1989) (court

refused to recognize fraud tolling exception to § 5-109 prior to its

amendment).

ll at as ctaaneni ches OUI

to we st ATO O e icheiseaetlanis sana

adie ~~

19a

IV.

Lastly, we turn to First United's claim that § 5-108’s repose

period cannot preclude this action because it has been preemp-

ted by § 9658 of CERCLA. We cannot agree.

In relevant part § 9658 states:

(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 hazard-

ous 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 com-

mencement date in lieu of the date specified in such

State statute... .

(b)(4) Federally Required Commencement Date

(a) In General

Except as provided in subparagraph (B), the term

‘‘federally required commencement date’’ means the

date the plaintiff knew (or reasonably should have

known) that the personal injury or property damages

referred to in subsection (a)(I) were caused or con-

tributed to by the hazardous substance or pollutant

or contaminant concerned... .

(i) The terms used in this section shall have the

same meanings as when used in subchapter I of this

chapter. (emphasis added).

20a

First United argues that because — (1) asbestos is unques-

tionably a hazardous substance, see Knox, 690 F.Supp. at 755;

(2) the church building falls within the broad definition of a

‘*facility’’ codified at 42 U.S.C. § 9601(9); and (3) the escape

of asbestos fibers from USG’s plaster falls within the scope

of the phrase ‘‘release into the environment’’ as the terms

‘“‘environment’’ and ‘‘release’’ are defined in 42 U.S.C. §

9601(8), (22)5 — it must follow that the time limits of

§ 5-108(a), which extinguished this action even before the

church knew that it existed, must give way to the ‘‘federally

required commencement date’’ of 42 U.S.C. § 9658. This

argument fails to persuade because the premise on which it

rests — that CERCLA is intended to apply to recover costs

incurred for removing asbestos products which are part of the

structure of a building — is unsound.®

We acknowledge that CERCLA, as all remedial statutes,

must be given a broad interpretation to affect its ameliora-

tive goals. United States v. Motollo, 605 F.Supp. 898, 902

(D. N.H. 1985). We also recognize that the statute reaches

far more than hazardous waste sites; in fact, it has been said

that through CERCLA, ‘‘Congress sought to dea! with every

conceivable area where hazardous substances come to be

located. . . .’’ State of N.Y. v. General Elec. Co., 592 F.Supp.

291, 296 (N.D. N.Y. 1984). However, to infer that Congress,

5This proposition in First United’s syllogism is by no means a given.

See Knox, 699 F. Supp. at 757 (defining ‘‘release’’ in terms of ‘‘spills and

disposals of wastes’’); Covalt v. Carey Canada Inc., 860 F.2d 1434 (7th

Cir. 1988) (§ 9658 does not preempt state law because interior of

workplace is not ‘‘environment’’ for purposes of asbestosis suit based

on work place exposure).

We emphasize that our holding is limited to the facts at hand, that is

to claims for the cost of removing asbestos from the structure of a building,

that was installed as part of that structure, and that creates a hazard only

within that building. We express no opinion as to the validity under

CERCLA of any other genre of asbetos actions.

ae

Yia

by enacting CERCLA, intended to preempt state statutes of

repose as applied to private asbestos-removal actions, is to

stretch the statute far beyond its intended reach. We need

look no further than the language of the statute to reach this

conclusion.

In 42 U.S.C. § 9604(a)(3), Congress limited the President's

authority to respond to the asbestos-removal problem:

The President shall not provide for a removal or

remedial action under this section in response to a

release or threat of release .. .

(B) from products which are part of the structure

of, and result in exposure within, residential buildings

or business or community structures; . . .”

First United argues that this limitation on the President’s

authority to act in no way limits the scope of § 9658 because

cost recovery actions brought by private parties typically are

not subject to the procedural requirements placed on similar

actions brought by the government.® See U.S. [v.] Conserva-

tion Chemical Co., 619 F.Supp. 162, 208-209 (W.D. Mo. 1985)

(\ 9604(c)(3) requirement of cooperative agreement before

proceeding with a response not applicable to private cost

recovery actions under § 9607); Walls v. Waste Resource

Corp., 823 F.2d 977, 979-981 (6th Cir. 1987) (60 day notice

requirement of § 9612(a) not applicable). We do not dispute

7This limitation is subject to exception if, in the President's discretion,

he determines that such a situation ‘‘constitutes a public health or en-

vironmental emergency and no other person with the authority and capabili-

ty to respond to the emergency will do so in a timely manner."’ 42 U.S.C.

§ 9604(a)(4).

8USG makes the counter-argument on this point that since First United

has not pleaded a cause of action under CERCLA, it cannot avail itself

of the preemptive effect of § 9658. See Knox, 690 F. Supp. at 757-58.

Because we decide that CERCLA does not preempt § 5-108(a), we need

not reach this issue.

22a

this general rule; however, it would be anomalous indeed if

Congress had seen fit to limit the President’s authority to re-

spond to a particular type of environmental hazard while plac-

ing no such limits on members of the general public. To resolve

this ambiguity we turn to the provision’s legislative history.

There, it is made clear that § 9604(a)(3)(B) represents much

more than a procedural limitation on the President’s authori-

ty; instead, it is a substantive limitation of the breadth of

CERCLA itself.

Section 9604(a)(3) originated as § 112(b) of Senate Bill 51,

which was the Senate’s version of the Superfund Amendments

and Reauthorization Act of 1986. P.L. 99-499, 100 Stat. 1613

(““SARA’’). See Retirement Community Developers, Inc. v.

Menne, 57 U.S.L.W. 2699 (D. Md. May 17, 1989). The

Senate Report accompanying this section stated, under a

heading entitled Clarifying the program’s scope, that:

CERCLA response authorities are extremely

broad, but there are nevertheless situations, some

of which may be life-threatening, which are not within

the law's scope. The Agency [Environmental Pro-

tection Agency] has encountered some difficulties,

primarily political, in restraining CERCLA responses

to the scope of the law. For this reason, S. 51 pro-

poses to make more explicit certain areas which the

law does not cover.

Specifically, S. 51 makes more clear the exclusion

from remedial or removal action of a release or a

threat of a release:

. . .« from products which are part of the struc-

ture of, and result in exposure within a facility. . . .

The Environmental Protection Agency has re-

ceived requests to take removal or remedial action

in situations where the contamination was from

23a

building materials used in the structure and was

creating an indoor hazard. This section would clarify

that such situations are not subject to remedial or

removal action.

S. Rep. No. 11, 99th Cong., 1st Sess. 16-17 (1985). Although

the compromise bill eventually passed as SARA was not Senate

Bill 51, the exact language of § 112(b) as proposed by the

Senate was adopted. H.R. Conf. Rep. No. 962, 99th Cong.

2nd Sess. 190 (1986) reprinted in 1986 U.S. Code Cong. &

Admin. News 3276, 3283. Thus, the Senate Report remains

an authoritative guide to interpreting this provision.® In view

of this clear expression of Congressional intent, we will not

expand CERCLA to encompass asbestos-removal actions.'°

Having drawn this conclusion, it follows naturally that § 9658

does not preempt § 5-108(a) as applied to asbestos-removal

actions. Congress could not have intended for § 9658 to

preempt state law in an area which CERCLA’s legislative

°First United contends that the Conference Report's characterization

of § 112(b) supports its view that the section limits only the President's

authority to act. While the Conference Committee’s brief explanation of

§ 112(b) does not discuss the substantive limits the provision is intended

to effect, the Committee expressly adopted the Senate’s provision without

stating that the Committee intended to modify its original meaning in any

way. H.R. Conf. Rep. No. 962, 99th Cong. 2nd Sess. 190 (1986) reprinted

in 1986 U.S. Code Cong. & Admin. News 3276, 3283. Consequently,

we conclude that the Senate’s explanation of § 112(b) remains viable.

10 But see Prudential Ins. Co. of America, et al v. U.S. Gypsum, et al.,

1989 Dist. Lexis 3791 (D. N.J. March 28, 1989). In a CERCLA asbestos-

removal action, the district court held that the plaintiffs did not state a

CERCLA claim because the sale of asbestos building materials was not

a ‘‘disposal’’ of a hazardous substance as defined by CERCLA. However,

the court went on, in dicta, to comment that it believed that the limits

of § 9604(a)(3) did not apply to private asbestos removal actions. With

this dictum we respectfully disagree.

24a

history expressly places outside ‘‘the scope of the law.’’!!

To conclude otherwise would be contrary to the principles of

comity which demand that in our federal system, state law

not be preempted unless it is the ‘‘clear and manifest pur-

pose of Congress.’’ Baker, Watts & Co. v. Miles &

Stockbridge, No. 88-1134/1135 (4th Cir. June 7, 1989) (en

banc), Slip Op. at 14 (quotation omitted).

In closing, we note that this interpretation of CERCLA ful-

ly comports with the most fundamental guide to statutory con-

struction — common sense. To extend CERCLA's strict liabili-

ty scheme to all past and present owners of buildings contain-

ing asbestos as well as to all persons who manufactured,

transported, and installed asbestos products into buildings,

would be to shift literally billions of dollars of removal cost liabili-

ty based on nothing more than an improvident interpretation

of a statute that Congress never intended to apply in this con-

text.'? Merine, at 2699. Certainly, if Congress had intended

‘tA report to Congress on the intended effect of § 9658 supports this

reasoning:

The remedies discussed in this report are legal remedies

for personal injury, environmental damages and reduction of

property value resulting from the spills of hazardous substances

and disposal of hazardous wastes for which CERCLA provides

cleanup and remedial activities. (emphasis added).

Injures and Damages from Hazardous Wastes — Analysis and Improve-

ment of Legal Remedies; A Report to Congress in Compliance with Sec-

tion 301(e) of the Comprehensive Environmental Response, Compensa-

tion and Liability Act of 1980, 97th Cong. 2d Sess.

'2]t is for this reason, that Congress simply did not intend for CERCLA

to remedy the asbestos-removal problem, that we decline to follow the

reasoning of Prudential, Knox and Covalt in rejecting First United's

preemption argument. Instead of recognizing the fact that CERCLA is out

of context in this situation, these courts rejected similar attempts to in-

voke the statute by construing CERCLA’s key terms in a way to exclude

asbestos-removal actions. Covalt, 860 F.2d at 1438-39 (defining ‘‘environ-

ment’ to exclude the interior of a workplace); Knox, 690 F.Supp. at 756-57

(defining ‘‘reiease’’ in terms of ‘‘spills’’ or ‘‘disposal’’); Pradential, 1989

i. ——

25a

for CERCLA to address the monumental asbestos problem,

it would have said so more directly when it passed SARA. In

fact, the only mention of this problem in SARA’s legislative

history that either party has raised, or that this Court has found

on its own, points to Congress’ intent to the contrary. While

CERCLA is unquestionably a far-reaching remedial statute that

must be interpreted with an eye toward this nation’s en-

vironmental probiems, it cannot reasonably be interpreted to

encompass the asbestos-removal problem. Accordingly, we

affirm the district court’s holding that § 9658 does not preempt

§ 5-108(a).

\

In sum, we hold that § 5-108(a) protects manufacturers of

goods used in improvements to real property and that the

20-year repose period of § 5-108(a) is not subject to the toll-

ing provision of § 5-203. We also hold that because CERCLA

does not authonze response cost recovery actions for removal

of asbestos from the structure of a building, § 9658 of

CERCLA does not preempt the repose period of 5-108(a).

Accordingly, we affirm the district court's ruling that all of First

United's pre-1966 claims are barred.

AFFIRMED.

Dist. Lexis at 29-31 (defining ‘‘disposal’’ to exclude the sale of a product

for consumer use). We find this analysis unsatisfactory because it runs

the risk of unnecessarily restricting the scope of CERCLA merely to

dispose of claims that the statute was never intended to encompass in

the first place. It is far better to simply acknowledge the inapplicability

of CERCLA to asbestos-removal claims than to restrict its operative terms.