24 Statutes of Limitation and Repose
Statutes of Limitation. Statutes of limitation are mandatory deadlines by which a plaintiff must bring a claim in a civil case or lose their ability to pursue it. In many, if not most torts cases, the statute of limitations is 2 or 3 years; the law of the forum determines the length. For certain narrow areas that involve long-term projects (like architecture and construction) or long-lasting harm (such as in latent chemical pollution cases), there may be longer prescribed periods of potential liability. In a number of jurisdictions, defamation actions have a one-year limit.
In some cases, parties try to strategically present their claim in whichever of the available windows is longer and courts, if they are aware of such efforts, do not permit parties to frame their claims strategically so as to avoid the expiration of the statute of limitations. Although this topic is often an add-on at best in many law school classes, it is worth highlighting that it is likely legal malpractice for lawyers not to know the statutes of limitations or indeed, to practice in a way that causes a client to lose the ability to pursue their claim due to missing the deadline imposed by statute.
The “clock” starts running, typically, from the time when the claim accrued, that is, from the first possible time when the plaintiff could file suit and obtain relief. In tort law, this is usually the time of tortiously caused injury. However, in some instances, a plaintiff’s injury predates their awareness of injury. For example, this could happen when the plaintiff is defamed without their initially being aware of it and later suffers professionally or personally, only then discovering the existence of an earlier defamatory statement that has caused harm. Similarly, a plaintiff may be exposed to some sort of harm or defective design that exerts harmful effects which take some time to become discernible or whose cause has not previously been traced to the tortfeasor. In cases such as these, where the injury is latent or unknown, the claim accrues from the time of discovery rather than injury. This extension of the start of the statute of limitations is known as the “discovery rule.”
The expiration of the statute of limitations is usually raised by the defendant as a defense to the lawsuit. However, the statute may be “tolled,” or paused, for minors or those incapable of bringing a claim for reasons of incompetence or disability. In some instances, parties may be estopped from using the expiration of the statute of limitations as a defense if they have engaged in behaviors like fraud or deceit that caused the plaintiff to delay bringing a lawsuit.
Statutes of limitation are generally considered to impose procedural limits. A claim will be dismissed as time-barred if it falls outside the statute of limitations by even a single day, regardless of the substantive merits of the claim. The central purpose of these statutes is to incentivize prompt action by the plaintiff; effectively, they start a legislative timer running. In that sense, these statutes are forward-looking. They begin at some date in time (injury or discovery) and then fix a particular period in time.
Statutes of Repose. By contrast, statutes of repose are typically considered to be substantive rather than procedural, and they are aimed less at incentivizing the plaintiff than protecting the defendant. Statutes of repose create an outer limit on the right to bring a civil action. This limit is not measured from the date on which the claim accrues but instead from the date of the last culpable act or omission of the defendant. A statute of repose bars any suit that is brought after a specified time from the defendant’s last action. In torts, that could mean negligently designing or manufacturing a product, or continuing to sell copies of a book that contains defamatory language. The repose will bar a lawsuit even if the period ends before the plaintiff has discovered an injury. In fact, it will bar a lawsuit even if the plaintiff has not yet been injured and sustains later-arising injury. Effectively, a statute of repose creates a sharp break for the defendant, a fresh start or point at which they can be clear that they are no longer potentially liable in connection with some action or venture. Without such a statute, for instance, a contractor who builds a building could find themselves sued two or three decades after building it as the result of a latent defect’s becoming known.
Statutes of repose exist to protect against risks of infinite liability and to ensure some predictability for potential defendants. Such statutes are retrospective in the sense they look back to the last action by the defendant to measure potential claims’ validity. The interest in giving “repose” or peace of mind to the defendant is so strong that unlike statutes of limitations, statutes of repose are not usually tolled for equitable considerations (such as age or incompetence). Because they are somewhat more rigid and potentially harsher for plaintiffs, statutes of repose are less commonly used. They also tend to be longer. For instance, the statute of repose for construction-based claims tends to be ten years long. They can be a very helpful policy tool, however, in areas such as medical malpractice, products liability or construction in which industry or policy-makers fear the chilling effects of potentially endless liability.
Comparing the two types of statutes, their name is a helpful starting point. Statutes of limitation are aimed at limiting the plaintiff and statutes of repose are aimed at giving the defendant peace of mind or the finality of “repose.” Recall that statutes of limitation are procedural and forward-looking, aimed at the plaintiff; statutes of repose are substantive and retrospective, aimed primarily at the defendant. Sometimes the two operate together as in the following example.
Example: A Statute of Limitations and Repose
In Illinois, a statute of limitations mandates that an owner wishing to bring a lawsuit for a construction defect do so within four years of actual or constructive notice of the defect. 735 ILCS 5/13-214 (a). A statute of repose cuts off the period of potential discovery, however: “No action based upon tort, contract or otherwise may be brought against any person for an act or omission of such person in the design, planning, supervision, observation or management of construction, or construction of an improvement to real property after 10 years have elapsed from the time of such act or omission.” 735 ILCS 5/13-214 (b). This means that the owner has up to ten years from the date of substantial completion of the construction within which to discover the defect and another four years during which 214(a)’s limitation period runs, or effectively, up to fourteen years maximum from the defendant’s last actions.
There are four limits or exceptions imposed: if the builder voluntarily provides a longer warranty or engages in fraudulent misrepresentations, these limitations on the timeliness of available actions will be disregarded under express provisions set out at 214(d) and (e) respectively. In addition, the limitation and repose provisions are both tolled for disability or youth: “If a person otherwise entitled to bring an action could not have brought such action within the limitation periods herein solely because such person was under the age of 18 years, or a person with a developmental disability or a person with mental illness, then the limitation periods herein shall not begin to run until the person attains the age of 18 years, or the disability is removed.” 735 ILCS 5/13-214 (c).
Lastly, the legislature expressly excepted asbestos cases. Under 214(f), the statute of repose “does not apply to an action that is based on personal injury, disability, disease, or death resulting from the discharge into the environment of asbestos.” Asbestos use was common in construction and insulation and thus often implicated in construction injuries. It is now subject to several restrictions and partial bans given the conclusive evidence that it causes several kinds of cancer. Listing an exception here creates the strong incentive it creates for builders to take preventive measures in all matters related to asbestos. It also comports with Illinois legislation and regulation by the Illinois Environmental Protection Agency, which have issued specific rules about asbestos.
In conclusion, there are overlapping policy interests in the two forms of statutory limits and legislatures sometimes expressly connect them in the way the Illinois example above illustrates. In general, the two types of limits on causes of action in tort law can be distinguished and must be separately taken into account whenever they are both relevant.
When issue-spotting, look at the plaintiff’s conduct to assess whether they’ve complied with the statute of limitations. If there is mention of a statute of repose, look at the date of defendant’s last known conduct to see whether the claim is barred.
Perkins v. HEA of Iowa, Inc., Supreme Court of Iowa (2002)
(651 N.W.2d 40)
Diane Perkins contracted hepatitis C as a result of her employment at HEA of Iowa, a retirement facility in Clinton. An arbitrator awarded her workers’ compensation benefits, but the award was vacated by the acting industrial commissioner. On judicial review, the award was reinstated by the district court, which ruled that the commissioner’s findings, with respect to the application of our discovery rule, were not supported by substantial evidence. The employer appealed. The court of appeals, on a divided vote, affirmed. We granted the employer’s application for further review. We affirm the decision of the court of appeals and the judgment of the district court.
The industrial commissioner found the following facts. On October 2, 1990, a patient at HEA had a shunt in his leg used for attaching a dialysis catheter. The shunt was pulsating and leaking blood. The charge nurse directed Perkins to take the patient’s vital signs and to re-dress the shunt wound. Part of Perkins’ job was to listen for “bruits” (or unusual noises). As Perkins leaned over the patient’s leg to listen for bruits near the shunt, the leg ruptured. The entire room was sprayed with blood. Perkins had blood all over her body and in her mouth, eyes, and ears.
The patient was infected with hepatitis C, a fact not known to Perkins prior to the rupture. Perkins testified she did not even know what hepatitis C was at that time. A written report of the incident was made, and Perkins was informed by the director of nursing at HEA that, because the patient had hepatitis C, Perkins needed to be tested. A letter in evidence from HEA to its insurance carrier regarding this event described the protocol for testing for hepatitis C infection. The tests should be conducted shortly after possible exposure in order to determine whether the exposed person had been previously infected. Six months later a second test should be performed to determine if the disease had actually been contracted. A third test is recommended at one year after exposure. Perkins was tested on October 11, 1990, shortly after the event, and the test results were negative. The testing physician recommended that she be retested six months after her exposure. However, no other testing was done until late 1995 when Perkins had pneumonia or early 1996 when she was seen at the University of Iowa Hospitals and Clinics. Through these tests, Perkins was found to have abnormal liver function, but she was *43 not actually diagnosed with hepatitis C until April 1996.
Perkins filed a workers’ compensation claim in October 1996. HEA defended on the grounds that this was an occupational disease under Iowa Code chapter 85A (1995), and her claim was barred by the one-year statute of repose under section 85A.12. In the alternative, HEA claimed, if this was an “injury” under Iowa Code chapter 85, it was barred by the two-year statute of limitations of section 85.26(1). Perkins responded that this event did not result in an occupational disease under chapter 85A, and as to the statute of limitations under chapter 85, her injury had not been discovered until 1995 or 1996. Under our discovery rule, she claims, her application for benefits was timely.
Our review of an industrial commissioner’s decision is on error, not de novo. We, like the district court, are bound by factual findings made by the commissioner so long as those findings enjoy substantial support in the record made before the agency. [***] The industrial commissioner found that Perkins was put on “inquiry notice” at the time she was advised of the seriousness of hepatitis C exposure and the necessity of further testing. While the focus of the industrial commissioner and the reviewing courts has been on the application of the discovery doctrine, we must first focus on the employer’s claim that this was an occupational disease, not an industrial injury. If it was an occupational disease, Iowa Code section 85A.12 would indisputably defeat the claim because that section is a statute of repose, not a statute of limitation. Therefore, the discovery rule would be inapplicable to save the plaintiff’s case. [***] We therefore address the question of whether this was an occupational disease or an industrial injury.
III. The Occupational Disease Argument.
The statutory definition describes an occupational disease in terms of a worker’s “exposure” to conditions in the workplace. [***] The term “exposure” indicates a passive relationship between the worker and his work environment rather than an event or occurrence or series of occurrences, which constitute injury under the Workers’ Compensation Act. [c]
We have said:
[A]n “injury” is distinguished from a “disease” by virtue of the fact that an injury has its origin in a specific identifiable trauma or physical occurrence or, in the case of repetitive trauma, a series of such occurrences. A disease, on the other hand, originates from a source that is neither traumatic nor physical. [c]
It is significant in determining whether Perkins suffered an occupational disease, or an injury under workers’ compensation, that Perkins’ infection was linked to a sudden, specific incident of exposure.
The contraction of disease is deemed an injury by accident in most states if due to some unexpected or unusual event or *44 exposure. Thus, infectious disease may be held accidental if the germs gain entrance through a scratch or through unexpected or abnormal exposure to infection. 3 Larson’s Workmen’s Compensation Law § 51, at 51–1 (2002).
We agree with the industrial commissioner, the district court, and the court of appeals that this was an “injury” under the workers’ compensation provisions of Iowa Code chapter 85, not an “occupational disease” under chapter 85A. The issue still to be resolved is the application of the statute of limitations and the discovery rule.
Under Iowa Code section 85.26(1),
[a]n original proceeding for benefits under this chapter or chapter 85A … shall not be maintained in any contested case unless the proceeding is commenced within two years from the date of the occurrence of the injury for which benefits are claimed….
This two-year statute of limitations is tempered by our “discovery” rule, which tolls the running of the statute until the injury is or should have been discovered. [c] The application of the discovery rule in personal injury and workers’ compensation cases has spawned considerable litigation in this court. The key issue has been: What did the claimant know concerning the elements of her claim, and when did she know it? The issue turns on whether Perkins was sufficiently on notice of an injury so as to have a duty to investigate further, under the reasonable-diligence standard, by arranging to be tested again after six months and one year from her exposure. This notice of the need to investigate has been referred to as “inquiry notice.” [c]
Knowledge is imputed to a claimant when he gains information sufficient to alert a reasonable person of the need to investigate. As of that date he is on inquiry notice of all facts that would have been disclosed by a reasonably diligent investigation. [c] The industrial commissioner found that the statute of limitations, Iowa Code § 85.26(1), barred Perkins’ claim because she was on inquiry notice of the key elements of her claim immediately upon her exposure to the patient’s blood.
[***] [T]he two-year limitation period begins to run when “the employee discover[s] or in the exercise of reasonable diligence should … discover [ ] the nature, seriousness and probable compensable character” of his injury or disease. [c] We have held that a claimant must have knowledge, either actual or implied, of all three characteristics of the injury before the statute begins to run. …
In Ranney the claimant was exposed to toxic paint solvents in his job from 1975 to 1981. In 1985 he was diagnosed with Hodgkin’s disease. Following his diagnosis, he inquired of several doctors about a possible connection between his exposure to the chemicals and his disease. In 1987 or 1988 his wife was a law student, and she discussed with Ranney the possibility of a connection between the exposure to chemicals and his health condition. [c] In 1991 Ranney asked a treating doctor about a connection, and the doctor confirmed a link between the job and his injury. Ranney filed his workers’ compensation case in 1991 and relied on the discovery rule to avoid the application of the statute of limitations.
We rejected Ranney’s claim that inquiry notice did not apply to his case because he suffered from a latent injury. We said:
When Ranney was diagnosed with Hodgkin’s disease in 1985, his condition was no longer latent; it was then known. At that point, Ranney was subject to the same duty to investigate as is any other plaintiff who knows he has sustained an injury. Id. at 154. We also rejected Ranney’s argument that he could not be charged with inquiry notice unless he was aware of the probable connection between his injury and his employment. We think that once a claimant knows or should know that his condition is possibly compensable, he has the duty to investigate. The purpose of the investigation is to ascertain whether the known condition is probably, as opposed to merely possibly, compensable. Ranney, 582 N.W.2d at 155 (citations omitted). [***]
In LeBeau v. Dimig, 446 N.W.2d 800 (Iowa 1989), the plaintiff was injured in an automobile accident on November 12, 1983. She made a claim for minor head injuries and was paid by the other driver, Dimig. In August 1985 LeBeau was diagnosed as having epilepsy. On July 31, 1987, she sued Dimig, claiming the epilepsy was caused by the 1983 accident. LeBeau, 446 N.W.2d at 801. The defendant raised the two-year statute of limitations under Iowa Code section 614.1(2). The plaintiff resisted a motion for summary judgment based on that defense by claiming she did not know, until 1985, that she had epilepsy. We said:
The issue raised in this appeal, however, is apparently one of first impression: When an accident occurs causing minor injuries and later more serious injuries appear, does the plaintiff’s cause of action “accrue” for statute of limitations purposes at the time of the first injury; at the time of the later manifestation of another injury; or are there two time periods, one commencing with the first injury and the other upon discovery of the second injury? Id. at 801–02. We characterized this as a “traumatic event/latent manifestation” case, or one in which the plaintiff has sustained both immediate and latent injuries caused by a noticeable, traumatic occurrence. At the time of the traumatic event, the plaintiff realizes both that he is injured and what is responsible for causing the injury. The full extent of the harm, however, has not become manifested. Id. at 802 [c].
Although we characterized LeBeau’s argument as “compelling,” we rejected it because her theory would allow splitting of a cause of action, resulting in the application of different statutes of limitation and inserting uncertainty into the resolution of such cases. [c] In LeBeau we held the plaintiff’s initial complaint of a minor injury and her collection of a relatively small settlement ($200) evidenced sufficient awareness of her injury to subject her claim to the two-year statute of limitations. Id. at 803. This “seriousness” component of inquiry notice, [c], is not triggered by “every minor ache, pain, or symptom” as we have noted. [cc] Therefore, the failure to file a claim within two years of the occurrence of the injury may be excused if the claimant had no reason to believe the condition was serious. If the injury is trivial or minor, or the symptoms indicate no serious problem, the seriousness component is not met. [c]
The industrial commissioner in assessing the discovery issue stated:
Claimant knew shortly after the incident at the nursing home that she had been exposed to hepatitis C. She was tested, and informed of the seriousness of the disease or condition [which she did not yet have]. She was counseled to return for further testing in six to twelve months for a final determination regarding her status. She was fully informed of the need for the testing, and underwent the initial tests. Claimant did not *47 follow-up with the medical care providers to undergo the later testing. Claimant knew of the possibility that she contracted hepatitis C at the time she took the initial test, October 11, 1990. As of October 11, 1990, she had been informed that the patient had hepatitis C. Based on the evidence, it cannot be determined that claimant was unaware of the seriousness of her condition, and that the condition was work-related. Claimant failed to file her petition within two years after the date of the injury, which was October 2, 1990. As a result, she takes nothing from these proceedings. (Emphasis added.)
None of our cases, and none of those cited by the HEA or the industrial commissioner, have applied the rule of law announced in the commissioner’s ruling, i.e., that exposure to a disease triggers a duty to inquire further. In all of the Iowa cases discussed in this opinion, the claimant knew he or she was injured, not merely exposed to injury, before the duty to inquire arose. In some cases the claimant did not know how serious the injury was or whether it was work-related, but in all of the cases the claimant knew he or she had suffered an injury before the statute of limitations began to run.
The Oklahoma Supreme Court, in another hepatitis C case, reached the same conclusion:
Mere exposure to an infectious disease, no matter how threatening, is not enough to constitute a compensable event—it is not “accidental injury.” An on-the-job exposure must pass through the incubation period and develop into an infectious disease before it may be viewed as an accidental injury compensable by the employer. An employer’s apprehension of an employee’s exposure to a disease, even when followed by the act of administering prophylactic vaccination, cannot be translated into compensation liability for an “accidental personal injury.” [c]
If there is anything clear in this record with respect to the “condition” to which the commissioner referred, it is that as of the time Perkins is charged with inquiry notice she had not been injured. She had been exposed through a traumatic and frightening event, but she was not injured. If, as we have said, inquiry notice does not arise from “every minor ache, pain, or symptom,” [c], inquiry notice surely cannot be triggered when there is no ache, pain, or symptom of an injury. [***] Our workers’ compensation law does not provide a remedy for a person who has merely been exposed to injury.
We hold the date of injury was the date Perkins discovered she had hepatitis C, April 20, 1996, the date it was diagnosed. It did not commence from the date she was exposed to it. The industrial commissioner’s application of a contrary rule in this case is “affected by other error of law,” Iowa Code § 17A.19(8)(e), and must be reversed. We therefore affirm, although on different grounds, both the ruling of the court of appeals and the judgment of the district court.
Note 1. The court states that it affirms, “although on different grounds,” the lower court’s rulings. On what grounds does this court affirm and what are the grounds on which the lower courts ruled?
Note 2. What is the knowledge standard required under the discovery rule? What policy concerns do you suspect are likely to underlie this choice of standard?
Note 3. Why do you think the court refrains from finding that “exposure to a disease triggers a duty to inquire further”? When does this court suggest a “duty to investigate” may arise?
Note 4. Statutes of Limitation and Repose serve multiple important functions as you see in Perkins. However, they impose costs on certain stakeholders and the system overall, as well. What doctrines do you imagine might they complicate? What purposes might they frustrate? What solutions do you imagine courts could undertake to balance out or minimize the tensions among these competing purposes? Should legislatures be involved?