In the latest development in the litigation over the environmental cleanup of the Fox River in northeastern Wisconsin, the U.S. District Court for the Eastern District of Wisconsin has found that NCR Corporation’s liability for the remediation of a section of the river is divisible—not joint and several under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The Fox River is a Superfund site contaminated primarily with polychlorinated biphenyls (PCBs) from historic paper manufacturing and recycling facilities along the river. This opinion is believed to be the first such judicial decision that has ruled in favor of a divisibility defense since the Supreme Court’s 2009 decision in Burlington Northern & Santa Fe Ry. Co. v United States. Whether it is an indication of how Courts may address divisibility and apportionment of cleanup costs at complex sediment sites and other sites in the future remains to be seen.
At Trial, Denial of the Divisibility Defense
The District Court’s May 15, 2015 ruling follows a trial and subsequent appeal in which NCR’s potential liability for the remediation of a section of the River known as Operable Unit 4 (OU4) was a primary focus. Following a December 2012 bench trial, the District Court determined that the harm caused to OU4 was not “theoretically capable of divisibility.” United States v. NCR Corp. That determination rested, in part, on the way harm was defined. The Court explained that “during the trial, it was made clear that the amount of PCBs a given party had discharged bore little relation to the harm that existed in OU4.” Id. at 810. Rather, harm was defined by reference to the 1 ppm remedial action level, whereby an area of sediment was deemed harmful “regardless of whether it has 1.1 ppm or 35 ppm of PCBs.” Id. The District Court concluded that “even a very large increase in PCB contamination does not move the needle in making that area any more harmful. Put another way, once an area qualified as contaminated, additional PCB loads do not make that area any more contaminated, at least from a remedial perspective.” Id. The District Court did not find persuasive NCR’s testimony concerning the extent to which its releases alone impacted the overall remedial cost. Thus, the District Court found that the harm was not theoretically capable of divisibility and did not reach the second prong of the analysis, i.e., whether there was a reasonable way of apportioning damages.
The Seventh Circuit Steps In
On appeal, the Seventh Circuit found error in the District Court’s treatment of the harm as binary because the “1.0 ppm remedial action level is not quite the line of demarcation it appeared to be,” noting EPA’s remedial goal is a surface-weighted average concentration of 0.25 ppm, which “drives the ultimate harm with which EPA is concerned, i.e., the harm to human health and the environment.” United States v. P.H. Glatfelter Co. Therefore, the Seventh Circuit explained, the harm is better understood as continuous and not binary because PCB concentrations below 1.0 (and even 0.25) ppm still pose a threat to human health and the environment, and that risk of harm increases with concentrations at higher levels. Id. at 677. The Seventh Circuit concluded that “the harm would be theoretically capable of apportionment if NCR could show the extent to which it contributed to PCB concentrations.” Id. at 678. If NCR could make this showing, the Court anticipated that “a reasonable basis for apportionment could be found in the remediation costs necessitated by each party.” Id.