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United States v. NCR Corp.

United States District Court, E.D. Wisconsin

July 12, 2018

UNITED STATES OF AMERICA and THE STATE OF WISCONSIN, Plaintiffs,
v.
NCR CORPORATION, et al., Defendants.

          DECISION AND ORDER DENYING MOTION FOR RECONSIDERATION AND GRANTING MOTION FOR RULE 56(g) FINDINGS

          WILLIAM C. GRIESBACH, CHIEF JUDGE UNITED STATES DISTRICT COURT

         I. Motion for Reconsideration

         Plaintiffs United States and the State of Wisconsin have moved for reconsideration of my decision denying their motion for partial summary judgment on their cost recovery claim against Defendant P. H. Glatfelter under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq. 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 of the PCB contamination of the lower Fox River that has continued for close to twenty years. See United States v. P. H. Glatfelter Co., 768 F.3d 662 (7th Cir. 2014); ECF No. 1033. In what remained of this enforcement action, Plaintiffs sought recovery from defendant P. H. Glatfelter Company, the last non-settling defendant, 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 September 30, 2015.

         Glatfelter did not dispute that the EPA incurred well over $30 million of these unreimbursed costs in its response to the PCB contamination of the Site. Glatfelter nevertheless opposed Plaintiffs' motion on the ground that Plaintiffs had already recovered far in excess of the additional $33 million they were seeking from Glatfelter from the other responsible parties with whom Plaintiffs had settled. Since CERCLA prohibits double recovery by government entities, Glatfelter argued in its cross motion for summary judgment that Plaintiffs' claims against it should be denied. I found that a material factual dispute precluded summary judgment in favor of either side and denied their respective motions. It is that decision that Plaintiffs ask me to reconsider.

         As relevant here, CERCLA requires responsible parties to pay, and authorizes the federal and state governments to recover, two different categories of injury or harm flowing from the release of hazardous substances into the environment: (1) response or cleanup costs; and (2) natural resource damages (NRD). As to the first category, under Section 107(a)(4(A), responsible parties are required to pay “all costs of removal or remedial action incurred by the United States Government or a State or an Indian Tribe not inconsistent with the national contingency plan.” 42 U.S.C. § 9607(a)(4)(A). The costs of removal or remediation are either paid directly by the responsible parties or incurred by the federal and state governments, which then seek reimbursement from the responsible parties. As to the second category, 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). Amounts collected for NRD go 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.

         “Importantly, CERCLA articulates a policy against double recovery.” K.C. 1986 Ltd. P'ship v. Reade Mfg., 472 F.3d 1009, 1017 (8th Cir. 2007) (citing 42 U.S.C. § 9614(b) (prohibiting duplicate recovery for the same removal costs)). In other words, the government is not allowed to collect more than it costs to remediate the contaminated site and compensate the interested parties for damages to natural resources. Glatfelter argues that Plaintiffs are trying to accomplish just such a double recovery here. Glatfelter's argument rests on Section 113(f)(2) of CERCLA which 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) (emphasis added).

         Over the past two decades, 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 millions of dollars collected by Plaintiffs, more than $100 million of the settlement proceeds has been allocated to the Natural Resource Damage Assessment and Restoration (NRDAR) Fund maintained by the United States Department of the Interior. Glatfelter contends that this amount vastly exceeds the actual damages to natural resources caused by the PCB contamination. 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 expert 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, Plaintiffs have deprived the non-settling defendants of the benefit of the reduction in liability to which they are statutorily entitled under Section 113(f)(2). Once the full amount of the money already paid in settlement of the claims is properly allocated, Glatfelter contends, the remaining unreimbursed costs the United States is seeking is reduced to zero.

         As I noted in my decision denying the parties' cross motions for partial summary judgment, Plaintiffs dispute Glatfelter's contention that the amount of the settlements allocated to the NRDAR Fund for the Site exceed the actual NRD. In fact, Plaintiffs argue that notwithstanding their decision to withdraw their NRD claim after the last series of settlements, the NRDAR Fund trustees' formal damage assessment is for far more than the amount of the settlements allocated to the Fund. Plaintiffs note that the DOI-commissioned study of past and future recreational fishing damages alone were estimated in 1998 dollars at $123 million. ECF No. 1155 at 8. It was this dispute over these facts that led me to conclude that neither party was entitled to judgment as a matter of law and that a trial would be needed.

         Plaintiffs argue, however, that the factual dispute over whether the amounts already collected for NRD exceed the damage to the natural resources actually caused by the contamination does not preclude judgment in their favor. In essence, Plaintiffs argue that the factual dispute between the parties over whether the NRDAR was over-funded is not material to their cost recovery claim. This is because, in Plaintiffs' view, Section 113(f)(2) does not require a reduction in a non-settling party's liability for recovery costs by amounts paid by other potentially liable parties for natural resource damages. Because a claim for NRD is different than a claim for recovery of cleanup costs, Plaintiffs contend that payment by a settling party for NRD does not reduce the liability of a non-settling party for recovery of cleanup costs. Since Glatfelter concedes that Plaintiffs have unreimbursed cleanup costs in excess of $30 million, Plaintiffs argue that the fact that they may have collected $60 million more than the actual damage to natural resources is irrelevant.

         I rejected this argument in denying Plaintiffs' motion for summary judgment, noting that the language of Section 113(f)(2) calling for a reduction of the liability of non-settling parties by amounts received from other potentially liable persons in settlement does not distinguish between cleanup costs and NRD. By its plain terms, the statute calls for a reduction of the liability of non-settling parties “by the amount of the settlement.” This language provides no basis for reducing a responsible party's liability for only response costs and ignoring liability for NRD; it applies to the liability of the non-settling parties in general. And since Glatfelter has been found jointly and severally liable with the other responsible parties, it is entitled to the reduction in liability provided by the statute.

         In addition to my reliance on the plain language of the statute, I explained why Plaintiffs' interpretation of the law was unreasonable in my original decision. In essence, I explained that the fact that CERCLA plaintiffs allocate certain portions of settlement proceeds to the NRDAR Fund is not a blank check by which the governments can siphon settlement funds away and make them unavailable for reducing the liability of the non-settling parties for cleanup costs:

[T]o adopt the government's construction of the statute would insulate the government's allocation and use of settlement proceeds from any form of judicial review. The government would be able to minimize or even eliminate Section 113(f)(2) reductions by simply allocating all or most of the proceeds to NRDAR funds. For as Glatfelter points out, when the government settles with a responsible party, it in effect controls the terms of the agreement that govern how the payment received in settlement will be allocated between the response cost and NRD claims under the settlement agreement. The settling defendants have no incentive to negotiate the allocation terms as long as both claims are being dismissed. ECF No. 1157 at 17. What the government chooses to do with settlement proceeds should not diminish non-settlors' right to full ...

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