Interpreting Federal Statutes of Limitations

• Publication year: 2022

37 Creighton L. Rev. 493. INTERPRETING FEDERAL STATUTES OF LIMITATIONS

Creighton Law Review

Vol. 37

ADAM BAIN(fn*) & UGO COLELLA(fn**)

Determining whether the limitations provision of a federal statute bars a cause of action is not always a simple chronological calculation. Where a plaintiff's action might otherwise be barred as untimely, a court may apply an equitable exception to the limitations period to save the case. Courts often do so without first analyzing whether Congress intended for the exception to apply to the particular federal statute. For example, without any statutory analysis, courts have applied a discovery rule of accrual to many federal statutes of limitations. Under a discovery rule, the time period of the limitations provision does not begin until the plaintiff discovers, or should have discovered, her injury. The United States Supreme Court, in a series of recent cases, has held that there must be a basis for inferring Congressional intent to incorporate an equitable exception, including the discovery rule of accrual, into a federal statute. The Court, however, has not articulated a comprehensive interpretive approach for determining when Congress intends to include (or exclude) equitable considerations in a statute of limitations.

In this Article, we propose such an approach. Our interpretive model is based not only upon the Supreme Court's decisions, but also upon principles of statutory interpretation and the policies underlying federal statutes of limitations. Our interpretive approach provides that when a statute is silent regarding equitable exceptions, a court can presume Congress intended to incorporate those exceptions that were generally-recognized at the common law at the time of the statute's enactment. On the other hand, if an exception was not generally-recognized at common law, a court can presume Congress did not intend to incorporate the exception by silence. Whichever presumption applies, it can be overcome if there is relevant and reliable evidence of Congressional intent regarding the exception in the language of the statute, its legislative history, or its purposes. In describing and applying this interpretive approach, we conclude that federal courts, including the Supreme Court, have incorporated equitable exceptions into many federal statutes even when there was no reliable basis to infer that Congress intended those exceptions to apply. This is particularly true with respect to the discovery rule of accrual, which we show had a questionable interpretive origin, yet has been reflexively incorporated into many federal statutes of limitations.

INTRODUCTION

In his concurring opinion in TRW, Inc. v. Andrews,(fn1) Justice Scalia called a discovery rule of accrual for a federal statute of limitations a "bad wine of recent vintage."(fn2) As the sommelier of statutory interpretation, the Supreme Court over the past fourteen years has frequently cultivated the vineyards of federal statute of limitations law. TRW is one of many recent cases in which the Supreme Court has grappled with equitable exceptions to the time periods in federal limitations provisions.(fn3) Some of these cases have involved the discovery rule of accrual,(fn4) Justice Scalia's "bad wine", while others have involved the doctrine of equitable tolling.(fn5)

A discovery rule of accrual determines when a statute of limitations begins to run. Under the most typical discovery rule, a cause of action "accrues" - that is, starts the limitations period running - when the plaintiff knows, or has reason to know, of his injury. For lack of a better description, this rule has been dubbed a "due diligence injury discovery rule."(fn6) Although, as we shall see, there are variations of this rule,(fn7) the justification for this particular discovery rule lies in the perceived unfairness to a plaintiff when a statute of limitations begins to run while the plaintiff is "blamelessly ignorant" of the "unknown and inherently unknowable" fact of her injury, to use the words of the Supreme Court.(fn8)

For example, suppose a plaintiff has been exposed to a carcinogen by the negligence of the defendant. Under the discovery rule, the statute of limitations for the plaintiff's cause of action would not begin to run until the plaintiff learned, or should have learned, that she has cancer - a discovery that may occur many years after the initial exposure and after the disease process began.(fn9) As another example, imagine that a farmer tests his underground water well and learns that his water is contaminated with hazardous chemicals. Suppose, too, that the contamination was caused by a negligent release of chemicals from a nearby industrial plant that occurred decades ago. Under the discovery rule of accrual, the statute of limitations on the farmer's tort action for property damages would not begin to run until the farmer detected - or should have detected - the contamination, even if the groundwater beneath his property had, in fact, been contaminated for several years.(fn10)

On their face, many federal statutes of limitations do not contain a discovery rule of accrual. The limitations provision merely requires the plaintiff to file the action within a certain period of time from the date the cause of action "accrues" or "arises."(fn11) Nevertheless, many federal courts have incorporated a discovery rule of accrual into federal statutes containing such language.(fn12) In TRW, Justice Scalia argued against incorporating a broad discovery rule of accrual into statutes that do not reference a discovery rule.(fn13) He noted that the traditional, standard rule for commencement of the time period of a statute of limitations was when the plaintiff first had a complete and present cause of action.(fn14) In other words, for Justice Scalia, limitations periods are not tethered to a plaintiff's knowledge, whether actual or putative. Rather, the limitations clock starts running at the moment the plaintiff possessed the right to apply to a court for relief, regardless of whether the plaintiff knew of that right or of the essential facts from which that right arose.(fn15)

The discovery rule departs from this conception. According to Justice Scalia, it is a modern, unjustified departure, hence, a "bad wine of recent vintage."(fn16) But, why is the discovery rule an unjustified departure, or "bad wine," if it saves the claims of plaintiffs who are blamelessly ignorant of their injuries? After all, the law generally favors resolution of claims on their merits, rather than dismissals for non-compliance with "technical" time periods in federal statutes. This, of course, does not represent the full spectrum of policy interests implicated in the statute of limitations context. Just as it may seem "unfair" to declare a potentially meritorious claim time barred, it is equally "unfair" to disregard the principle of repose, which provides defendants certainty that potential claims - whose adjudication may be materially hampered by the passage of time - will expire on a date certain. Even so, an abstract consideration of these policy considerations alone can lead courts astray from their law-interpreting role and into the precarious - and some say undemocratic and unconstitutional - role of lawmaking. Accordingly, whether the discovery rule of accrual or any other equitable exception should be imported into a federal statute of limitations necessarily requires an inquiry into Congressional intent, using well-known rules of statutory construction.

The process of statutory interpretation serves its own policies (most notably, consistency and separation of powers), and it strives to arrive at a meaning that corresponds to the intent of the legislature that enacted the statute.(fn17) In deciding cases involving limitations issues over the past fourteen years, the Supreme Court has construed several federal statutes. Drawing on those cases and the process of statutory interpretation itself, we prescribe an interpretive approach for adjudicating issues which involve the discovery rule of accrual or other equitable exceptions to federal limitations provisions. The key to our approach, to borrow Justice Scalia's metaphor, is the "vintage" of a particular equitable exception - such as the discovery rule - at the time of a statute's enactment. Simply stated, if the courts generally-recognized a particular equitable exception for statutes of limitations at the time a given federal law was enacted, then a presumption arises that Congress intended for that same equitable exception to apply to the new law's statute of limitations. However, if the courts did not recognize the equitable exception at that time, then the opposite presumption arises - that Congress did not intend for the exception to apply. The normal indicia of Congressional intent - the language of a statute, its legislative history, and its purposes - can overcome either presumption.

This interpretive approach for federal statutes of limitation first appeared in the Supreme Court's equitable tolling cases, starting with Irwin v. Department of Veterans Affairs.(fn18) The Court's recent decision in TRW shows how the approach has evolved to apply to the discovery rule of accrual as a unique equitable exception. Although these recent Supreme Court cases confirm the applicability of our approach, our rule is at odds with an earlier Supreme Court decision...