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A few months ago, we reported on an interesting Seventh Circuit opinion on CERCLA §107 claims issued in the Fox River clean-up litigation in Wisconsin. The Fox River clean-up, and the ensuing private party litigation, represents one of a number cases that have arisen from EPA’s efforts to remediate water bodies throughout the country that have been declared to be Superfund sites—including the Lower Passaic River and Newark Bay in northern New Jersey, the Hudson River in upstate New York, and the Gowanus Canal in Brooklyn.
To provide some context to the Fox River litigation, Appleton Papers, Inc. (“API”) and NCR Corp. (“NCR”) are the lead PRPs who entered into a judicial consent decree with EPA, providing $41.5 million to fund the remediation of PCB contamination in the Lower Fox River and Green Bay in Wisconsin. API and NCR subsequently filed a private party action under CERCLA §107 for cost recovery and CERCLA §113 for contribution against various other PRPs whose operations were implicated as contributing to the Fox River contamination. In response to API and NCR’s CERCLA suit, defendants filed various common law counterclaims for contribution, cost recovery, indemnification, negligence, strict liability, and public nuisance. The case is captioned as Appelton Papers Inc. v. George A. Whiting Paper Co., No. 2:08-cv-00016-WCG (E.D. Wis.).
In this most recent development, API and NCR argued that the state law claims were preempted by CERCLA and that, because the court had previously ruled that defendants were not entitled to contribution from NCR for costs associated with Operating Unit 1 (“OU1”), judgment should be entered against the defendants on the common law claims. Defendants argued that their state law claims associated with these same CERCLA response costs were viable, and were not preempted by the court’s determination that NCR was not liable for any of the CERCLA response costs associated with OU1.
The court held that defendants’ state law claims were in reality, an improper attempt to recover the same CERCLA damages that the court had already ruled upon, regardless of defendants’ attempts to re-characterize them. While common law actions can be plead as a supplement to CERCLA, if costs are incurred pursuant to CERCLA’s mandates, CERCLA is the only avenue to reapportion those costs. Here, the only costs that defendants had incurred were CERCLA-related response costs associated with the clean-up of the Fox River contamination. These costs were preempted by the court’s previous determination that NCR had no liability for OU1, in other words, that NCR was allocated a 0% share for that portion of the clean-up. The court noted, “what CERCLA takes away, state law claims cannot give back,” and reiterated that a PRP’s remedies for contribution and cost recovery lie within the framework of CERCLA—“a PRP must resort to the mechanisms that CERCLA itself provides for reallocation of its costs, or else the state law claims could conflict with CERCLA’s distribution scheme.” The Court noted that this does not mean that a PRP would be barred from filing a common law claim seeking other tort or contract damages that are unrelated to CERCLA response costs, such as a negligent non-disclosure claim, but that such actions cannot allow a party to effectively double-dip— “[these cases] do not, however, support the idea that a PRP in an action in which CERCLA has already apportioned the [response] costs may also pursue state law claims seeking to recover those same CERCLA response costs.”
The Fox River litigation will continue, as will the clean-up process that includes large-scale dredging and capping of PCB-contaminated sediments. A link to EPA’s official site information can be found here.