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Blog editor
Blog Contributors
Cost-recovery and contribution lawsuits under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) can sometimes drag on for several years, or longer, because of the multitude of potentially responsible parties (PRPs), the often-separate liability and allocation phases, and appeals of rulings decided at each phase, among other complications. The recent decision in Georgia-Pacific Consumer Products LP et al. v. NCR Corp., 1:11-cv-483 (W.D. Mich.), highlights the winding and prolonged paths that some of these cases can take.
The lawsuit concerns the Kalamazoo River Superfund site in Michigan, which had been contaminated with polychlorinated biphenyls (PCBs) as a result of over a century of paper mills operating in the area. The site has had a long history of litigation over costs, especially costs incurred by one PRP, Georgia-Pacific.
In 2010, Georgia-Pacific filed an action against three PRPs, NCR, International Paper, and Weyerhauser, seeking to recover more than $100 million in cleanup costs and a declaratory judgment regarding future costs, estimated to total between $600 million and $850 million.
In a 2018 ruling, following a bench trial on the issue of damages and equitable allocation, U.S. District Judge Robert T. Jonker found that roughly half of Georgia-Pacific’s claimed past costs, just over $49 million, were recoverable under CERCLA. The court further decided that the four PRPs (Georgia-Pacific, NCR, International Paper, and Weyerhauser) were responsible for splitting this tab according to a 40/40/15/5 allocation split. The court also entered a declaratory judgment of future liability incurred at the site against the parties but did not impose an allocation for future costs because of uncertainty regarding the total spend and remediation options.
In 2022, however, Judge Jonker’s ruling was overturned by the Sixth Circuit as to two of the PRPs, International Paper and Weyerhauser, because the plaintiff’s contribution claim was deemed time-barred against them. (The ruling did not apply to NCR, which entered a Consent Decree in 2020 and paid the contribution award to Georgia-Pacific). Effectively, the Sixth Circuit held that International Paper and Weyerhaeuser were not liable for any part of the over $49 million for cleanup costs incurred up until 2014.
On remand from the Sixth Circuit’s decision, Judge Jonker was left to decide what, if anything, from his 2018 ruling remained intact and what issues needed to be retried. Specifically, following the remand, Georgia-Pacific asked the district court to enter judgment preserving its right to sue International Paper and Weyerhaeuser for future cleanup costs of the site, estimated to total over $850 million, notwithstanding the Sixth Circuit’s ruling on the statute of limitations issue relating to the contribution claim. International Paper and Weyerhaeuser argued that they should not remain subject to the declaratory judgment for liability of future costs as the Sixth Circuit did not address the issue on appeal.
In April 2024, the district court retained its prior declaratory judgment finding all four parties (i.e., Georgia-Pacific, NCR, International Paper, and Weyerhaeuser) liable for future response costs incurred at the site. The district court found that retaining this declaratory judgment on liability was entirely consistent with the Sixth Circuit’s mandate and a “practical way to avoid re-litigating liability determinations that the Court of Appeals did not address or disturb.” Finally, the district court reversed its previous determinations on cost allocation and contribution awards, finding that the Court of Appeals clearly disagreed and determined that the actual recovery number for past costs should have been zero based on the proper application of the three-year limitations period on contribution actions.
The decision reinforces that the defendants remain liable for future cleanup costs at the Superfund site despite the statute of limitations determination about past costs.