United States v. P.H. Glatfelter Co.
| Decision Date | 19 November 2014 |
| Docket Number | 13–2441.,Nos. 13–2436,s. 13–2436 |
| Citation | 768 F.3d 662 |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. P.H. GLATFELTER COMPANY and NCR Corporation, Defendants–Appellants. |
| Court | U.S. Court of Appeals — Seventh Circuit |
OPINION TEXT STARTS HERE
Christian R. Larsen, Attorney, Office of the United States Attorney, Milwaukee, WI, Robert H. Oakley, Attorney, Department of Justice, Washington, DC, Cynthia R. Hirsch, Attorney, Office of the Attorney General, Madison, WI, for appellee.
David G. Mandelbaum, Attorney, Greenberg Traurig LLP, Philadelphia, PA, for appellant.
Before WOOD, Chief Judge, and KANNE and TINDER, Circuit Judges.
Today we issue two decisions related to the cleanup of the Lower Fox River and Green Bay Superfund Site in northeastern Wisconsin. This decision addresses a claim brought by the United States to enforce a 2007 unilateral administrative order issued by the Environmental Protection Agency (EPA) under § 106 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9606.1 EPA's 2007 order directs several potentially responsible parties (PRPs) to clean up the portion of the Site downstream of Little Lake Butte des Morts. Some of the issues relevant to the government's claim to enforce EPA's order were resolved on summary judgment, then the district court held a bench trial. After trial, the court ruled in favor of the government and entered a declaratory judgment and permanent injunction requiring the PRPs to comply with EPA's order.
Four PRPs appealed—NCR Corporation, P.H. Glatfelter Company, Menasha Corporation, and WTM I Company—and their appeals were consolidated. However, shortly after oral argument, the government lodged in the district court a proposed consent decree that would resolve its claims against Menasha and WTM. Thus, we have deconsolidated the appeals of those two PRPs, and we will resolve only the appeals of NCR and Glatfelter in this opinion. For the reasons that follow, we affirm in part and reverse in part.
The Superfund Site at issue encompasses both the Lower Fox River and Green Bay. The history of the Site is more fully described in our contemporaneously issued opinion in NCR Corp. v. George A. Whiting Paper Co., No. 13–2447, 768 F.3d 682, 2014 WL 4755491 (7th Cir. Sept. 25, 2014). For now, suffice it to say that several paper mills discharged wastewater containing polychlorinated biphenyls (PCBs) into the River from the mid-1950s through the 1970s, and since 1998, the Site has been the subject of massive remedial efforts conducted pursuant to CERCLA.
The Lower Fox River begins at the outlet of Lake Winnebago and flows northeast for approximately 39 miles before it enters Green Bay. In 1998, EPA began working with the Wisconsin Department of Natural Resources (WDNR) to develop a remedial plan for the Site. As part of that plan, the Site was divided into five geographic sections, or “operable units,” which are used “when phased analysis and response is necessary or appropriate given the size or complexity of the site.” 40 C.F.R. § 300.430(a)(1)(ii)(A). Operable Unit 1 or “OU1” runs from the outlet of Lake Winnebago to the Appleton Dam, a stretch of the River also known as Little Lake Butte des Morts; OU2 runs from the Appleton Dam to the Little Rapids Dam; OU3 runs from the Little Rapids Dam to the De Pere Dam; OU4 runs from the De Pere Dam to the mouth of the River at Green Bay; and OU5 is Green Bay itself. Only OU2–OU5 are at issue here, as the cleanup of OU1 was litigated separately and carried out pursuant to a consent decree. The Site and its operable units are shown in the figure below, which is taken from the agencies' 2007 record of decision amendment.
NCR and Glatfelter are PRPs under CERCLA § 107(a), 42 U.S.C. § 9607(a), because they or their corporate predecessors formerly owned and operated paper mills that discharged wastewater containing PCBs into the River. NCR is responsible for two mills that produced carbonless copy paper using an emulsion containing PCBs and then discharged PCB-contaminated wastewater into OU2. Glatfelter is responsible for a mill that re cycled scraps of carbonless copy paper unusable by the original manufacturer and then discharged PCB-contaminated wastewater into OU1.
In 2002, EPA and WDNR issued a record of decision (ROD) that selected a remedy for OU1–OU2. That remedy called for the dredging of approximately 784,000 cubic yards of sediment in OU1 but was limited to monitored natural recovery in OU2, with the exception of some dredging in Deposit DD at the downstream end of OU2 that would be undertaken as part of the OU3 remedy. In 2003, EPA and WDNR issued a second ROD, which selecteda remedy for OU3–OU5. That remedy called for the dredging of approximately 9,000 cubic yards of sediment in Deposit DD at the downstream end of OU2, approximately 586,800 cubic yards of sediment in OU3, and approximately 5,880,000 cubic yards of sediment in OU4. For OU5, the remedy was limited to monitored natural recovery, with the exception of some dredging near the mouth of the River.
In the years that followed, Glatfelter and other OU1 PRPs agreed to perform the necessary remedial design and action in OU1. Meanwhile, NCR and one other PRP agreed to perform the remedial design work for OU2–OU5. In 2007, based on information obtained during the full-scale remediation activities in OU1 and the remedial design work for OU2–OU5, the agencies decided to amend the ROD for OU2–OU5. The agencies determined that the all-dredging remedy they previously selected would not sufficiently reduce PCB concentrations in OU2–OU5 and that an approach that utilized capping or sand covering in some areas would cure that deficiency. The agencies also determined that capping and sand covering would be less expensive than dredging and that a remedy incorporating those methods would therefore be more cost effective. Ultimately, the agencies adopted a hybrid remedy, which maintained dredging as the default approach but allowed for capping and sand covering where certain design criteria were met.
In November 2007, EPA issued a unilateral administrative order pursuant to CERCLA § 106(a), 42 U.S.C. § 9606(a), directing the PRPs to conduct the cleanup required by the ROD amendment for OU2–OU5. Thereafter, NCR led the remedial efforts in OU2 and OU3 and conducted a significant amount of remedial action in OU4. Even so, NCR maintained that it should not be responsible for all of the cleanup costs. Thus, in 2008, it filed an action seeking contribution from the other PRPs. In response, the other PRPs filed counterclaims seeking contribution from NCR. Near the end of 2009, the district court ruled against NCR on its claim for contribution, and in 2011, it ruled in favor of the other PRPs on their counterclaims, holding that NCR was required to reimburse them for their response costs.
Meanwhile, in 2010, the agencies determined that they had significantly underestimated the costs associated with the cleanup of OU2–OU5. Thus, they published an explanation of significant differences, which adjusted their estimated total project costs for OU2–OU5 by about 62 percent, from about $432 million to about $701 million.2
Shortly after the district court held that NCR was required to reimburse the other PRPs for their response costs, NCR decided that it would no longer comply with EPA's 2007 order. NCR cut its remediation work in half during 2011, and it refused to commit to perform any work in 2012. This action ensued, in which the United States sought preliminary and permanent injunctive relief, along with a declaratory judgment, requiring NCR and the other PRPs to comply with EPA's order.
In 2012, the district court entered a preliminary injunction against NCR, requiring it to complete the remediation work scheduled for that year, and we affirmed.United States v. NCR Corp., 688 F.3d 833 (7th Cir.2012). Thereafter, the district court resolved two issues on summary judgment. First, it upheld the remedy selected by EPA and WDNR. Second, it held that Glatfelter and the other OU1 PRPs were liable for downstream cleanup costs. Then, in December 2012, the district court held an eleven-day bench trial, and a few months later, it ruled in favor of the government and entered a declaratory judgment and permanent injunction requiring the nonsettling PRPs to comply with EPA's 2007 order.
On appeal, NCR and Glatfelter ask us to vacate the declaratory judgment and permanent injunction. They attack the district court's summary judgment rulings, as well as its findings of fact and conclusions of law following the bench trial. For the reasons that follow, we hold that the district court erred in its consideration of NCR's divisibility defense and in its decision to enter a permanent injunction but correctly resolved the other issues before it. Therefore, we affirm in part and reverse in part.
The district court's summary judgment rulings came after the parties filed cross-motions for summary judgment on the propriety of the remedy, and the United States moved for summary judgment on the OU1 Defendants' liability. “As with any summary judgment motion, we review cross-motions for summary judgment ‘construing all facts, and drawing all reasonable inferences from those facts, in favor of the non-moving party.’ ” Laskin v. Siegel, 728 F.3d 731, 734 (7th Cir.2013) (quoting Wis. Cent., Ltd. v. Shannon, 539 F.3d 751, 756 (7th Cir.2008)). Summary judgment is appropriate if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).
When the government brings an action under 42 U.S.C. § 9606 to enforce an administrative cleanup order, CERCLA allows for judicial review of EPA's decision in selecting the response action. 42 U.S.C. § 9613(h)(2). However,...
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