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Indiana Supreme Court Addresses Statute of Limitations for Certain Environmental Causes of Action

08.01.2008

The Indiana Supreme Court recently decided the case of Pflanz v. Merrill Foster, No. 36S01-0710-CV-425 (June 19, 2008) addressing the issue of when the statutes of limitations begin to run for environmental causes of action under the Indiana Underground Storage Tank (UST) Act and under common law theories. There are different statutes of limitations applicable to these theories of liability: the statute of limitations applicable to a claim under the UST Act is 10 years; however, the statute of limitations applicable to a common law claim is 6 years.

The Pflanzes filed a Complaint against prior owners and operators of a service station to recover clean up costs incurred by the Pflanzes from leaking underground storage tanks. Their Complaint asserted both UST Act claims and common law claims of waste and negligence.

In Pflanz, the Supreme Court found that when the statute of limitations for environmental damage begins to run depends upon the cause of action involved:

  • A cause of action under the UST Act is one for contribution. Because the Pflanzes’ clean up obligation did not begin to run until they were ordered by IDEM to clean up the property, the Supreme Court held that the statute of limitations for their UST Act claim did not begin to run until they had been ordered to clean up the property.
  • The statute of limitations for the common law claims of waste and negligence begins to run when the plaintiff, in the exercise of ordinary diligence, knew or should have known of the injury. Therefore, a plaintiff has 6 years from when it knew or should have known of the contamination to bring a common law claim.

The Pflanz case did not address the issue of when the statute of limitations for a claim under the UST Act begins to run when the plaintiff voluntarily cleans up the property without an order from IDEM.

Also, the Pflanz case did not address the issue of when the statute of limitations for an Indiana Environmental Liability Act ("ELA") claim begins to run. The ELA does not have a specific statute of limitations contained in the ELA. The United States District Court for the Southern District of Indiana has applied the common law statute of limitation for damage to real property (which is 6 years) to an ELA claim. In a case involving claims under the ELA, Cooper Industries, LLC v. City of South Bend, the Supreme Court accepted transfer and heard oral arguments in January 2008, but has not yet handed down a decision. Cooper Industries, LLC v. City of South Bend may resolve the question of when the statute of limitations for an ELA claim begins to run.

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