Posted on April 5, 2011 by Michael Rodburg
CERCLA liability under section 107 is often characterized as strict, joint and several unmitigated by considerations of causation, fault or fairness. Contribution is different, however. Congress, in section 113(f)(1), specifically authorized the courts to allocate costs “using such equitable factors as the court determines are appropriate.” Illustrative of this fundamental difference is the fight over who shall pay what for the massive PCB cleanup of the Lower Fox River.
NCR is incurring the bulk of the costs based on discharges of PCBs incident to the manufacture of carbonless paper at a facility on the River. It sued numerous paper mills along the River based on their discharges of PCB containing wastewater incident to the recycling of trim and waste carbonless paper. In late December 2009, Judge Griesbach of the Eastern District of Wisconsin dismissed NCR’s suit for contribution against the paper mills based on NCR’s knowledge of the content and risks associated with PCB-containing carbonless paper as manufacturer/developer of the product compared to the recycling paper mills.
Framed thus — in old fashioned terms about knowledge of dangers and avoidance of risk—it was no contest. NCR was denied contribution because of its knowledge, learned gradually over time, about the toxic nature of PCBs as against those who merely, and without access to NCR’s superior knowledge of the product, processed it for recycling. The Court’s analysis, it said, “is governed by traditional principles of equity, such as the relative fault of the parties, any contracts between the parties bearing on the allocation of cleanup costs, and the so called ‘Gore factors.’” The lengthy recitation of the largely undisputed facts was nothing less than a moral indictment of NCR’s actions and reactions as the knowledge about PCB toxicity and its threat to the environment came to be documented and disseminated; in short, nothing less than a fault-based conclusion.
The flip side of this case came down in February 2011. Judge Griesbach decided that the paper mills, which had incurred expenses related to various EPA and Wisconsin DNR orders and settlements, monitoring and investigation, were entitled to contribution from NCR for those portions of the River where both recycling and manufacturing PCB contamination occurred. This time around the Court was satisfied that its singular use of NCR’s “fault” as the sole determinant to deny NCR contribution in 2009 was likewise sufficient to grant the paper mills a right of contribution against NCR. In other words, fault or culpability can become the overriding factor and permit the court to eschew consideration of any other equitable factors, including Gore factors. One sees in the Court’s emphasis on charging the financial cost on those “responsible” for creating the hazardous conditions a tone and direction quite at variance with the rather automatic analysis of liability under section 107. Hence, although approximately half of the PCBs originated with the paper mills and not NCR’s manufacturing, the Court, on culpability grounds, was prepared to impose the entire cost on NCR exclusive only of amounts reimbursed to the defendants by insurance.