WASHINGTON -- The Supreme Court ruled Monday that a group of homeowners in North Carolina can't sue a company that contaminated their drinking water decades ago because a state deadline has lapsed, a decision that could prevent thousands of other property owners in similar cases from recovering damages after being exposed to toxic waste.

In a 7-2 decision, the justices said state law strictly bars any lawsuit brought more than 10 years after the contamination occurred - even if residents did not realize their water was polluted until years later.

The high court reversed a lower court ruling that said federal environmental laws should trump the state law and allow the lawsuit against electronics manufacturer CTS Corp. to proceed.

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The decision is a setback for the families of several thousand former North Carolina-based Marines suing the federal government in a separate case for exposing them to contaminated drinking water over several decades at Camp Lejeune. The government is relying on the same state law to avoid liability. That case is currently pending at the 11th U.S. Circuit Court of Appeals in Atlanta.

The ruling on Monday involves property owners living on land where CTS used to make electronics equipment until it sold the property in 1987. It wasn't until 2009 that residents discovered their well water contained chemicals that can cause numerous health problems including cancers, reproductive disorders and birth defects.

North Carolina has a "statute of repose" that ends a plaintiff's right to seek damages to property more than 10 years after the last act of contamination occurred. The property owners argued that their claims were still valid under federal environmental laws, which give victims two years to sue from the date they discover what caused their illness.

Writing for the majority, Justice Anthony Kennedy said Congress did not intend to pre-empt state "statutes of repose" laws that set a deadline for property claims based on the date of final contamination. He said federal environmental laws only cover statutes of limitation, where the clock starts running at the time of the injury.

"The case for federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to stand by both concepts and to tolerate whatever tension there is between them," Kennedy said.

In dissent, Justice Ruth Bader Ginsburg said Congress was concerned about state statutes that "deprive plaintiffs of their day in court." That concern is apparent in the case of diseases like cancer that take years to develop before a victim understands the cause, she said.

Ginsburg said the majority's decision "gives contaminators an incentive to conceal the hazards they have created until the repose period has run its full course." She was joined in dissent by Justice Stephen Breyer.

At Camp Lejeune, health officials estimate as many as 1 million people may have been exposed to tainted groundwater over several decades. In 2012, President Barack Obama signed a bill into law providing health benefits to Marines and family members exposed to the water from 1957 to 1987.

Last month, Angela Canterbury, with the Project on Government Oversight, told CBS affiliate WNCT: "We would like for the government to finally stop trying to prevent Camp Lejeune victims from getting justice in every circumstance. It is just high time for the government to take responsibility and to make things right."