Neal Blankenship v. Consolidation Coal Company, 850 F.3d 630

Background

Consolidation Coal obtained state permits in 1994 to pump ("dewater") water from its Buchanan Mine into the exhausted, nearby Beatrice Mine (owned by Island Creek), and performed the operation through 2003. Notices and the permit application were published and placed on public file as required.
Property owners above portions of the Beatrice Mine sued Consolidation and Island Creek in state court (2011, 2013), later refiling in federal court, alleging trespass, nuisance, negligence, unjust enrichment, conversion, and seeking monetary and injunctive relief totaling hundreds of millions.
Defendants moved for summary judgment asserting Virginia statutes of limitations (three years for unjust enrichment; five years for other claims) barred the suits; plaintiffs argued CERCLA’s federal discovery rule (42 U.S.C. § 9658) preempted Virginia accrual rules so limitations should run from plaintiffs’ later discovery (2010–2011).
The district court granted summary judgment for defendants, holding Virginia’s accrual rule controls (claims accrue when injury occurs), CERCLA’s § 9658 does not preempt unless a plaintiff could assert a CERCLA claim, and, in any event, plaintiffs reasonably should have known of the dewatering well before the limitations period.
The Fourth Circuit affirmed: plaintiffs’ allegations did not state a CERCLA claim (they sought damage/unjust-enrichment relief, not cleanup costs), the transfers were federally permitted (excluding CERCLA liability), CERCLA’s discovery rule therefore did not preempt state limitations, and the publicity/notice meant Plaintiffs should have known earlier. Tolling and injunctive-relief arguments failed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CERCLA § 9658 preempts Virginia statutes of limitations to apply a federal discovery rule	§ 9658 preempts state accrual so limitations start when plaintiffs knew/should have known of injury (2010–2011)	§ 9658 applies only where CERCLA itself provides a cause of action; otherwise state law controls	Preemption does not apply because plaintiffs cannot assert a CERCLA cleanup/response claim
Whether plaintiffs pleaded a viable CERCLA claim (entitling them to § 9658 protection)	Alleged property damage from pumping water and loss of mine value/methane; sought relief tied to defendants’ conduct	Plaintiffs seek damages/unjust enrichment, not remediation/cleanup costs; transfers were permitted	Plaintiffs did not and could not state a CERCLA claim (no cleanup costs alleged; transfer was federally permitted)
Whether the transfers were exempt from CERCLA under the federally permitted release exclusion (§ 9607(j))	Permit was state-issued, so CERCLA discovery rule should still apply	Permit was an NPDES/related federally authorized permit (state-delegated), so § 9607(j) excludes liability	Transfers were federally permitted; CERCLA liability excluded
Whether statutes of limitations would still bar claims even under § 9658’s discovery rule	Plaintiffs actually did not discover harms until 2010–2011	Public notices, permit filings, construction, and press coverage meant plaintiffs reasonably should have known much earlier	Even under § 9658, plaintiffs should have known >5 years before filing; claims are time-barred

Key Cases Cited

First United Methodist Church v. U.S. Gypsum Co., 882 F.2d 862 (4th Cir.) (§ 9658 preemption applies only where CERCLA itself provides a cause of action)
Barnes ex rel. Estate of Barnes v. Koppers, Inc., 534 F.3d 357 (5th Cir.) (§ 9658 operates only when conditions for CERCLA cleanup are satisfied)
Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (2009) (describing CERCLA’s purpose to effect timely cleanup and allocate cleanup costs to responsible parties)
Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (presumption against preemption and principle of federalism)
St. George v. Pariser, 484 S.E.2d 888 (Va. 1997) (Virginia accrual rule: damage-based accrual when any injury is sustained)
Birchwood-Manassas Assocs., LLC v. Birchwood at Oak Knoll Farm, LLC, 773 S.E.2d 162 (Va. 2015) (tolling available only in extraordinary circumstances such as fraud that prevents assertion of claims)
Covalt v. Carey Canada, Inc., 860 F.2d 1434 (7th Cir.) (agreeing § 9658 does not reach harms outside CERCLA’s scope)