Thursday, May 5, 2011

USA v. George A. Whiting Paper Company

May 4: In the U.S. Court of Appeals, Seventh Circuit, Case No. 10-2480. Appeal from the United States District Court for the Eastern District of Wisconsin. In 2009, the United States and the State of Wisconsin (the Governments) filed suit in Federal district court against eleven of the potentially responsible parties (PRPs) in an environmental cleanup, seeking response costs under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq. (CERCLA). Shortly thereafter, the Governments filed notice of a de minimis consent decree pursuant to CERCLA § 122(g). Eventually, the Governments moved for settlement. Appleton Papers Inc. and NCR Corporation intervened.
    The district court granted the settlement motion over the intervenors' opposition. Later, the Governments moved for a de minimis settlement with a twelfth defendant, and the district court granted this motion. Appleton and NCR appealed the grant of both settlement motions. The Appeals Court affirmed the district court decision.
    By way of background, the case involves the Fox River in Wisconsin which is heavily contaminated with Polychlorinated biphenyls (PCBs). Appleton and NCR are responsible for much of the PCBs. They contributed significant amounts of Aroclor 1242, the most prevalent PCB in Fox River. The river also contains other PCBs, including Aroclor 1254 and Aroclor 1260. Appleton, NCR, and a few other PRPs are currently paying to clean up Fox River in compliance with a 2007 U.S. EPA order. Appleton and NCR are seeking contribution, in a separate suit, from many other PRPs.
    On one of the major issues in the case, i.e. the "rational basis" of the settlement, the Appeals Court said, "The district court concluded the consent decrees were substantively fair. Appleton and NCR argue that this conclusion has no rational basis in the record. A consent decree is substantively fair if its terms are based on comparative fault. . . The calculation of comparative
fault 'should be upheld unless it is arbitrary, capricious, and devoid of a rational basis.' Cannons Eng'g, 899 F.2d at 87 ('[W]hat constitutes the best measure of comparative fault . . . should be left largely to the EPA's expertise.')."
    The Appeals Court said, "Rarely does an appellate court conclude the district court had no factual basis to approve a consent decree. Appleton and NCR can point to only one such holding. . . We need not decide whether an unsupported estimate would be a sufficient factual basis to affirm a consent decree -- the Governments' estimate here has adequate support in the record." Other legal issues addressed by the Appeals Court in the opinion included: Consideration of non-1242 Aroclors; Unresolved Issue of Divisibility; Insufficient Discovery; and Improper Consideration of Equitable Factors.
    Access the complete opinion (click here). [*Remed]

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