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United States v. NCR Corp.

United States District Court, E.D. Wisconsin

February 5, 2018

NCR CORPORATION, et al., Defendants.


          William C. Griesbach, Chief Judge.

         In what remains of this enforcement action under Section 107(a)(4) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607(a)(4), the Plaintiffs seek recovery from defendant P. H. Glatfelter Company of more than $33 million in unreimbursed costs (including statutory prejudgment interest) incurred by the Environmental Protection Agency (EPA) in remediating the PCB contamination of the lower Fox River (the Site) through June 30, 2015. Glatfelter, together with other defendants, including NCR Corporation and Georgia Pacific, were previously found jointly and severally liable for the $1.3 billion clean-up that has continued for close to twenty years. See United States v. P. H. Glatfelter Co., 768 F.3d 662 (7th Cir. 2014), and ECF No. 1033. A trial in this action on the amounts that remained owing for the clean-up and on the apportionment of liability among the remaining, non-settling defendants, Appvion, and Georgia Pacific in the related contribution action, NCR v. Whiting et al, No. 08-C-0016, was scheduled to commence on May 8, 2017. ECF No. 1152. The trial was removed from the calendar and all proceedings stayed on January 20, 2017, however, after the Plaintiffs filed a notice of settlement and a proposed consent decree they had entered into with NCR and Appvion, the successor company to Appleton Papers, Inc., which was seeking reimbursement from the other defendants for clean-up costs it had allegedly paid as a volunteer. ECF Nos. 1169, 1183.

         Following the required public comment period and further consultation with the parties, the Plaintiffs filed their joint motion for court approval of a revised consent decree on March 29, 2017. Over Glatfelter's objection, the court approved the revised consent decree, which resolved most of the issues that remained for trial, in a decision and order entered on August 23, 2017. That decision is currently on appeal. What remains before the court are the cross motions for summary judgment of the United States and Glatfelter on the United States' claim for unreimbursed past response costs (through September 30, 2015) associated with the Site as a whole or response work in Operable Units 2 through 5 at the Site. Both the United States and the State of Wisconsin also seek a declaration that Glatfelter is liable for any future related response costs. This decision will address those motions. It will also address Glatfelter's motion for reconsideration of the court's January 3, 2017 order granting the government's motion in limine precluding Glatfelter from offering evidence at trial intended to show that the amount of money that was received by the Plaintiffs in previous settlements and allocated to the Natural Resource Damage Assessment and Restoration (NRDAR) fund substantially exceeds the actual damages to natural resources caused by the PCB contamination and the costs of its assessment. ECF No. 1171.

         A. Statutory Framework

         Under Section 107(a)(4)(A) of CERCLA, responsible parties must pay “all costs of removal or remedial action incurred by the United States Government . . . not inconsistent with the national contingency plan. 42 U.S.C. § 9607(a)(4)(A). The National Contingency Plan (NCP), promulgated as a regulation pursuant to Section 105 of CERCLA, 42 U.S.C. § 9605, prescribes requirements for removal and remedial actions. Consistent with the broad language of the statute and its remedial purpose, “all costs” has been held to include the direct costs of actual clean-up, as well as a broad range of costs, such as investigative costs and enforcement costs. The term has also been held to include as indirect costs administrative and overhead costs incurred in managing the greater Superfund program. United States v. W. R. Grace & Co., 429 F.3d 1224, 1250 (9th Cir. 2005); United States v. E. I. DuPont De Nemours and Co., Inc., 432 F.3d 161, 178 (3d Cir. 2005); United States v. R. W. Meyer, Inc., 889 F.2d 1497, 1499-1508 (6th Cir. 1989). In addition, the statute expressly allows for the recovery of interest. 42 U.S.C. § 9607(a)(4). Once recovered, such funds are deposited with the United States Treasury to replenish the Hazardous Substance Superfund, which is used to finance CERCLA cleanup efforts across the nation. See 42 U.S.C. §§ 9601(11), 9604; 26 U.S.C. § 9507; see also United States v. Bestfoods, 524 U.S. 51, 55 (1998).

         Under Section 107(a)(4)(C), “damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from such a release” of hazardous substances are also recoverable from responsible parties. 42 U.S.C. § 9607(a)(4)(C). Liability for natural resource damage (NRD) goes to the United States Government and the State in which the damage occurs. Liability for NRD also extends to any Indian tribe where the damage is to natural resources “belonging to, managed by, controlled by, or appertaining to such tribe, or held in trust for the benefit of such tribe, or belonging to a member of such tribe, if such resources are subject to a trust restriction on alienation.” 42 U.S.C. § 9607(f)(1). Funds recovered for NRD are held in trust by the United States Department of the Interior (DOI)

         “for use only to restore, replace, or acquire the equivalent of such natural resources.” Id. Any determination or assessment of damages to natural resources made in accordance with the applicable regulations has “the force and effect of a rebuttable presumption on behalf of the trustee in any administrative or judicial proceeding under this chapter or section 1321 of Title 33.” 42 U.S.C. § 9607(f)(2)(C).

         In cases such as this where multiple parties are responsible for the discharge of hazardous substances and the resultant pollution, the general rule is that each party responsible for the discharge is jointly and severally liable for the entirety of the clean-up and damages resulting therefrom, unless that party can establish a reasonable basis for apportionment. See Burlington Northern & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 614 (2009) (“Not all harms are capable of apportionment, however, and CERCLA defendants seeking to avoid joint and several liability bear the burden of proving that a reasonable basis for apportionment exists.”). Even where joint and several liability obtains, a party that pays more than its fair share can seek contribution from any other party that is liable or might be liable. Finally, and key to the dispute between the parties here, is Section 113(f)(2), which governs settlement. That Section states:

A person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement. Such settlement does not discharge any of the other potentially liable persons unless its terms so provide, but it reduces the potential liability of the others by the amount of the settlement.

42 U.S.C. § 9613(f)(2) (italics added).

         B. Previous Settlements, Allocation of Payments and Remaining Amounts Due

         Over the past two decades, the Plaintiffs have resolved the liability of dozens of parties alleged to have contributed to the PCB contamination of the Site through a number of judicial consent decrees and administrative orders. Of the hundreds of millions of dollars expended in the cleanup or recovered by the Plaintiffs, the United States claims that roughly $33 million remains of its own costs incurred for the cleanup of the non-OU1 portion of the Site that has not been reimbursed. This amount represents direct and indirect costs incurred by the EPA, together with pre-judgment interest through September 30, 2015. The specific amounts are set forth in an Itemized Cost Summary, which contains a tabular breakdown of the various costs under the headings EPA Payroll and Travel Costs, Contractor Costs, Miscellaneous Costs, Inter-Agency Agreement Costs, Superfund Cooperative Agreement Costs, EPA Indirect Costs, and Prejudgment Interest. ECF Nos. 1132 ¶¶ 5, 7; 1133 at 10. It is this amount that the United States seeks to recover from Glatfelter, the last non-settling defendant.

         Glatfelter does not dispute that the EPA incurred the vast majority of these costs in its response to the PCB contamination of the Site. In fact, it appears Glatfelter has no objection to well over $30 million of the total unreimbursed response costs the government claims EPA incurred. The government contends that NCR's objection to an additional $2 million, which Glatfelter has joined, can be readily resolved in favor of the government, leaving the government's right to recover roughly $32 million in unreimbursed response cost clear as a matter of law. With Glatfelter's joint and several liability already established, the government contends that it is entitled to summary judgment for at least this amount, with the remaining portion of its claim to be determined at trial unless the parties are able to reach agreement on the relatively small amount still in dispute.

         If that was the end of the matter, the resolution would be clear. Unfortunately, it is not. Glatfelter points out that the Plaintiffs have allocated more than $100 million dollars of the settlement proceeds to the NRDAR Fund maintained by the United States Department of the Interior for NRD caused by the release of PCBs to the Site. Glatfelter contends that this amount vastly exceeds the actual NRD. In support of this contention, Glatfelter notes that over $60 million of the funds transferred to the NRDAR Fund have not yet been applied to any response costs or NRD. Those funds, Glatfelter contends, “remain unspent in the NRDAR Fund for various as-yet-undetermined future NRD projects at the Fox River site.” ECF No. 1157 at 2. Glatfelter has proffered evidence in the form of the opinion of its experts that the NRD injury suffered at the Fox River site already has been more than adequately compensated by the over $40 million spent to date. ECF No. 1106-2. Thus, Glatfelter contends, the more than $60 million remaining in the NRDAR Fund constitutes a windfall. More importantly, Glatfelter contends that by allocating such a large portion of the settlement proceeds to the NRDAR Fund, the Plaintiffs have deprived the non-settling ...

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