Stahle v. CTS Corp.

• Decision Date: 02 March 2016
• Docket Number: No. 15–1001.,15–1001.
• Citation: 817 F.3d 96
• Parties: Kent STAHLE, Plaintiff–Appellant, v. CTS CORPORATION, Defendant–Appellee. North Carolina Advocates for Justice, Amicus Supporting Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

817 F.3d 96

Kent STAHLE, Plaintiff–Appellant,

v. CTS CORPORATION, Defendant–Appellee.North Carolina Advocates for Justice, Amicus Supporting Appellant.

No. 15–1001.

United States Court of Appeals, Fourth Circuit.

Argued: Sept. 17, 2015.

Decided: March 2, 2016.

ARGUED:Kaitlin Price, Mackenzie Salenger, Wake Forest University School of Law, Winston–Salem, North Carolina, for Appellant. Earl Thomison Holman, Adams Hendon Carson Crow & Saenger, P.A., Asheville, North Carolina, for Appellee. ON BRIEF:John J. Korzen, Director, Zachary K. Dunn, Third–Year Law Student, Davis T. Phillips, Third–Year Law Student, Appellate Advocacy Clinic, Wake Forest University School of Law, Winston–Salem, North Carolina, for Appellant. Michael W. Patrick, Law Office of Michael W. Patrick, Chapel Hill, North Carolina; Cathy A. Williams, Wallace & Graham, PA, Salisbury, North Carolina, for Amicus Curiae.

Before WYNN, FLOYD, and THACKER, Circuit Judges.

Reversed and remanded by published opinion. Judge FLOYD

wrote the opinion in which Judge WYNN joined. Judge THACKER wrote an opinion concurring in the judgment.

FLOYD

, Circuit Judge:

At issue in this appeal is the scope of North Carolina General Statutes Section 1–52(16)

, which at the relevant time provided:

Unless otherwise provided by statute, for personal injury or physical damage to claimant's property, the cause of action, except in causes of actions referred to in G.S. 1–15(c)

, shall not accrue until bodily harm to the claimant or physical damage to his property becomes apparent or ought reasonably to have become apparent to the claimant, whichever event first occurs. Provided that no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action.

The Supreme Court of North Carolina has explained that this statute "establishes what is commonly referred to as the discovery rule, which tolls the running of the statute of limitations for torts resulting in certain latent injuries," although "such actions remain subject to the [10–year] statute of repose provision." Misenheimer v. Burris, 360 N.C. 620, 637 S.E.2d 173, 175–76 (2006)

.

Appellant Kent Stahle was diagnosed with leukemia

. He subsequently brought a complaint against Appellee CTS Corporation (CTS). Stahle alleges that CTS was responsible for dumping toxic solvents from an Asheville-area manufacturing plant into a local stream, and that childhood exposure to the contaminated stream water many years ago caused his leukemia. The district court dismissed Stahle's complaint, holding that the statute of repose in Section 1–52(16) barred his action.

We disagree. The Supreme Court of North Carolina has not yet directly resolved whether Section 1–52(16)

applies to disease claims. As a federal court sitting in diversity faced with an unresolved question of state law, we must predict how the question would be decided by that state's highest court. Because we understand that under North Carolina law a disease is not a "latent injury," we conclude that the Supreme Court of North Carolina would not find Section 1–52(16)

applicable to Stahle's claim. Accordingly, we reverse and remand the case to the district court for further proceedings.

I.

CTS is a Delaware corporation that was licensed to do business in North Carolina. CTS purportedly owned CTS of Asheville, Inc. (CTS of Asheville), a now-dissolved North Carolina corporation. From 1959 to 1983, CTS of Asheville operated a manufacturing facility in Buncombe County, North Carolina. As part of its manufacturing operations, CTS of Asheville used various toxic solvents, including trichloroethylene. CTS of Asheville allegedly dumped large quantities of these toxic contaminants onto its property and into a stream known as Dingle Creek.

From 1959 until 1968, Stahle lived with his family on a property on Dingle Creek, downstream of CTS of Asheville's manufacturing plant. During this period, Stahle was exposed to the contaminated water of Dingle Creek. Many years later, Stahle was diagnosed with Chronic Myelogenous Leukemia

.

On February 20, 2014, Stahle filed a one-count complaint against CTS in the Western District of North Carolina. Stahle alleges that CTS of Asheville's negligence in dumping toxic chemicals into Dingle Creek caused his leukemia

. CTS moved to dismiss Stahle's complaint, principally on the basis that it was time-barred under North Carolina General Statutes Section 1–52(16), the second sentence of which provides that "no cause of action shall accrue more than 10 years from the last act or omission of the defendant giving rise to the cause of action." CTS argued that the last possible relevant "act or omission of the defendant" occurred in 1968 when Stahle moved away from Dingle Creek; as such, the statute applied to bar any action by Stahle not brought by 1978. Stahle responded that precedent of the Supreme Court of North Carolina and decisions of this Circuit established that statutes such as Section 1–52(16) do not apply to claims arising from disease.

The magistrate judge recommended that CTS's motion to dismiss be granted. The magistrate judge found that the statutory text of Section 1–52(16)

was unambiguous and did not contain an exception for diseases. The district court agreed with the recommendation and dismissed Stahle's action with prejudice. Stahle timely appealed.

II.

We review a district court's grant of a motion to dismiss de novo. Johnson v. Am. Towers, LLC, 781 F.3d 693, 706 (4th Cir.2015)

. This appeal presents a question of statutory interpretation, which we also review de novo. Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 512 (4th Cir.1999).

Because federal jurisdiction in this matter rests in diversity,¹ our role is to apply the governing state law. See BP Prods. N. Am., Inc. v. Stanley, 669 F.3d 184, 188 (4th Cir.2012)

. "It is axiomatic that in determining state law a federal court must look first and foremost to the law of the state's highest court, giving appropriate effect to all its implications." Assicurazioni Generali, S.p.A. v. Neil, 160 F.3d 997, 1002 (4th Cir.1998). If, as here, the state's highest court has not directly addressed the issue, a federal court "must anticipate how it would rule." Liberty Univ., Inc. v. Citizens Ins. Co. of Am., 792 F.3d 520, 528 (4th Cir.2015).² In other words, our task here is to anticipate whether the Supreme Court of North Carolina would rule that North Carolina General Statutes Section 1–52(16) bars Stahle's action.

III.

A.

This is not the first time we have anticipated North Carolina law on the subject of disease claims and personal injury statutes of repose. In Hyer v. Pittsburgh Corning Corp. we articulated our understanding that "the [North Carolina] Supreme Court does not consider disease to be included within a statute of repose directed at personal injury claims unless the Legislature expressly expands the language to include it." 790 F.2d 30, 34 (4th Cir.1986)

(quotation omitted). Hyer is still the law in this Circuit, and we are bound to follow it here. E.g., Demetres v. E.W. Constr., Inc. , 776 F.3d 271, 275 (4th Cir.2015) ; United States v. Collins, 415 F.3d 304, 311 (4th Cir.2005) ("A decision of a panel of this court becomes the law of the circuit and is binding on other panels unless it is overruled by a subsequent en banc opinion of this court or a superseding contrary decision of the Supreme Court." (quoting Etheridge v. Norfolk & W. Ry. Co., 9 F.3d 1087, 1090 (4th Cir.1993) )).

Section 1–52(16)

functions as a statute of repose directed at certain personal injury claims. The North Carolina General Assembly has not expressly expanded the language to include disease. Therefore, under our understanding of North Carolina law as articulated in Hyer, we conclude that the Supreme Court of North Carolina would not consider Section 1–52(16) applicable to claims arising out of disease.

B.

CTS argues that Hyer is distinguishable because it analyzed a different statute of repose. As stated above, the conclusion announced in Hyer is broad enough to encompass the statute at issue here. However, even assuming our articulation of North Carolina law in Hyer was broader than necessary to resolve that case—such that it should be considered non-binding dicta—we nevertheless conclude that applying the underlying reasoning in Hyer leads to the same result here.

In Hyer, we considered the scope of the statute of repose in North Carolina General Statutes Section 1–50(6)

. Section 1–50(6) was enacted in 1979 as part of "An Act Relating to Civil Actions for Damages for Personal Injury, Death or Damage to Property Resulting From the Use of Products." See 1979 N.C. Sess. Laws 689 (Products Liability Act). At that time, Section 1–50(6) provided:

No action for the recovery of damages for personal injury, death or damage to property based upon or arising out of any alleged defect or any failure in relation to a product shall be brought more than six years after the date of initial purchase for use or consumption.

Hyer, 790 F.2d at 32

. The plaintiff in Hyer was diagnosed with a disease, asbestosis, in 1981, and alleged in an action brought the same year that his disease had been caused by asbestos-related products manufactured by the defendant. Id. at 31–32. In response, the defendant presented evidence that it had sold its last product containing asbestos in 1972, meaning that nine years had passed before the action was brought. Id. at 32. The district court ruled that the action was time-barred by the six-year limit in Section 1–50(6).

We reversed, principally relying on the Supreme Court of North Carolina's intervening decision in Wilder v. Amatex Corp., 314 N.C. 550, 336 S.E.2d 66 (1985)

. Hyer, 790 F.2d at 32. As we explained in Hyer, Wilder also involved a disease claim, and the Wilder court faced the question of whether yet another statute of repose, the then-operative North Carolina General Statutes Section 1–15(b), "applie[d] to claims arising out of disease." 790 F.2d...