Environment Reporter™ keeps you fully up to date on rapidly changing developments in courts, Congress, federal agencies, state legislatures, industry, and environmental organizations.
By Steven M. Sellers
March 5 — NCR Corp. avoided liability in 2013 for a specific contaminated parcel within the Lower Fox River Superfund site, but a federal court in Wisconsin reversed course March 3 by reopening a final judgment and finding that the company shares liability for contamination at the entire site.
NCR is liable under the Comprehensive Environmental Response, Compensation, and Liability Act for PCB contamination at a parcel known as operable unit 1 (OU-1), even though NCR's facilities were miles downstream at operable unit 2, the U.S. District Court for the Eastern District of Wisconsin said.
The court granted a motion for reconsideration filed by P.H. Glatfelter Co.
The ruling opened a 2013 judgment that had absolved NCR of liability for OU-1—and it excused Glatfelter's failure to appeal that ruling—citing an intervening Seventh Circuit holding that a party responsible for contamination anywhere at a Superfund site can be held responsible for all removal costs (U.S. v. P.H. Glatfelter Co., 768 F.3d 662 (7th Cir. 2014).
“Given the complexity of the issues raised, as well as the underlying uncertainty of CERCLA law, a court should not be over-eager to strictly apply procedural rules that bar arguments, particularly arguments that now seem viable,” the court said.
Superfund lawyers told Bloomberg BNA March 5 the decision was unusual, and may have greater significance in the future.
“The interesting decision will be the next one,” Seth Jaffe, a Superfund lawyer with of Foley Hoag in Boston, told Bloomberg BNA in an e-mail.
“While NCR might be theoretically liable for upstream OU-1 contamination, it should have a very strong argument under Burlington Northern that the OU-1 costs are divisible and its appropriate share of OU-1 liability should be zero percent. If the court rejects that argument, that decision would be significant,” Jaffe said.
In Burlington Northern, the U.S. Supreme Court clarified the scope of arranger liability and apportionment under CERCLA (Burlington N. & Santa Fe Ry. v. United States, 556 U.S. 599 (2009).
Other Superfund lawyers agreed the decision could significantly affect apportionment of costs among the parties later on.
“The Seventh Circuit held that Glatfelter is a liable party for the entire site because it discharged a hazardous substance at the ‘Site,' and whether it got from OU-1 downstream [to] OU-4 is not relevant for CERCLA liability,” Robert Fox of Manko, Gold, Katcher & Fox in Bala Cynwyd, Pa., told Bloomberg BNA March 5 in an e-mail.
Fox said that conclusion is consistent with CERCLA law that does not require causation as part of the prima facie case for cost recovery or contribution.
“What is different here,” Fox said, “is that NCR is being held as a liable party for contamination in OU-1, which is upstream of their discharges, while the Seventh Circuit held Glatfelter liable for OU-4, which is downstream. In essence, because the Site is OU-1 through OU-4, NCR is also a liable party for the whole site.”
“The way I think this will work out is that if NCR is a liable party for OU-1, they will argue that they are not jointly and severally liable and that as a matter of apportionment their liability for OU-1 is [zero] because it is upstream of NCR,” Fox said.
“The twist is that the burden of proof has shifted from the plaintiff, who can now show NCR to be a liable party for OU-1, to NCR who has the burden of proof on apportionment,” Fox said.
Glatfelter unsuccessfully argued in the Seventh Circuit appeal that its downstream contamination from OU-1 was of insufficient magnitude to justify CERCLA liability for contamination at another site (OU-4).
“Based on the Seventh Circuit's ruling, Glatfelter now argues that what's good for the goose is good for the gander: if Glatfelter must be held liable for the entire Site—regardless of causation—then so must NCR,” the court said.
Precluding Glatfelter from making that argument, the court said, “could work a manifest injustice because it would mean the parties are not on a level playing field.”
In its original ruling absolving NCR of liability, the court held it wasn't plausible that waste from one parcel would flow upstream from another, and concluded that the designations of specific parcels of the Superfund site was a “bureaucratic happenstance.”
Those conclusions, for purposes of CERCLA liability, were rejected in the Seventh Circuit decision, the court said.
Requests for comment March 5 to counsel in the case weren't successful.
Judge William C. Griesbach wrote the opinion.
The law offices of Greenberg Traurig represented P.H. Glatfelder Co.
Sidley Austin and Cravath Swaine & Moore represented NCR Corp.
To contact the reporter on this story: Steven M. Sellers in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Peter Hayes at email@example.com
The opinion is available at http://www.bloomberglaw.com/public/document/APPVION_INC_and_NCR_CORP_Plaintiffs_v_PH_GLATFELTER_COMPANY_et_al.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)