Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Georgia-Pacific Consumer Products LP v. NCR Corp.

United States District Court, W.D. Michigan, Southern Division

March 29, 2018

GEORGIA-PACIFIC CONSUMER PRODUCTS LP, FORT JAMES CORPORATION, and GEORGIA-PACIFIC LLC, Plaintiffs,
v.
NCR CORPORATION, INTERNATIONAL PAPER CO., and WEYERHAEUSER CO. Defendants. Cost Category Order Location Costs Credits Net Total Cost Category Order Location Costs Credits Net Total Cost Category Order Location Costs Credits Net Total Cost Category Order Location Costs Credits Net Total Cost Category Order Location Costs Credits Net Total Category Cost Cost Category Order Location Costs Credits Net Claim Time Barred Net Recoverable Cost Category Order Location Costs Credits Net Claim Time Barred Net Recoverable Cost Category Order Location Costs Credits Net Claim Time Barred Net Recoverable Cost Category Order Location Costs Credits Net Claim Time Barred Net Recoverable

          PHASE II BENCH TRIAL OPINION & ORDER

          ROBERT J. JONKER, CHIEF UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         This case addresses responsibility under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”) for clean up of the Kalamazoo River and Portage Creek in Southwest Michigan among four parties: Georgia Pacific, International Paper, and Weyerhaeuser, all paper companies with mills on the river-and NCR, the developer and a manufacturer of carbonless copy paper (“CCP”).

         The river area is contaminated with polychlorinated biphenyls (“PCBs”), a hazardous substance under CERCLA. It is contaminated because the paper mills in the Kalamazoo River Valley discharged PCBs as part of their waste streams in the mid to late 20th century. The PCBs were in the mills' waste streams because they recycled wastepaper as a source of pulp, and some of that wastepaper was NCR's CCP which contained PCBs. More specifically, from 1954 to 1971 (“the production period”), NCR's CCP was made using Aroclor 1242, a source of PCBs. To address the potential harm of PCBs in the environment, the U.S. Environmental Protection Agency (“EPA”) has declared 80 miles of the river and portions of the surrounding area a Superfund Site under CERCLA.

         The case involves complex legal and factual questions, and the Court bifurcated the trial. In Phase I, the Court determined that all of the parties are potentially responsible parties under CERCLA. (ECF No. 432). Georgia Pacific, Weyerhaeuser, and International Paper are liable as owners or operators of mills. 42 U.S.C. § 9607(a)(1)-(2). NCR is liable as an arranger. 42 U.S.C. § 9607(a)(3). In Phase II, the parties ask the Court to determine the scope of costs at issue, whether the costs are divisible, and how to allocate costs among the parties. It was not a short task; 20 days of trial and thousands of exhibits were used to present the parties' positions on the issues. Based on the parties' presentations, the post-trial briefs, and all other matters of record, the Court renders its decision as to the parties' share of responsibility below. The Court concludes each party has an equitable share of responsibility for past costs and allocates those costs in the following overall percentages: Georgia Pacific 40%; NCR 40%; International Paper 15%; and Weyerhaeuser 5%. The Court determines there is too much uncertainty about the allocation of appropriate future costs at this time, though a declaratory judgment regarding liability for these costs will enter as required by statute.

         II. FACTUAL BACKGROUND

         A. Overview of Operational History

         The events at the heart of this case date back several decades. Much of the information from the production period is no longer readily available. Many potential witnesses, such as employees and officers of the mills, are no longer around to share memories of long-ago events. Many operational records have been lost or discarded in the intervening years of mergers, bankruptcies, and general business practices. The parties presented a plethora of documents, experts, and mathematical models in an effort to fill in the blanks. The trial testimony and exhibits provide exhaustive background on many topics, but a streamlined narrative is more fitting to describe the basis of the Court's decision. Ultimately, the finder-of-fact must draw inferences from the available evidentiary data points to present a coherent basis for decision.

         1. The Mills

         a. The De-Inking Process in General

         The paper mills in this case were all engaged, at one time or another, in the business of recycling NCR's CCP. During the production period these mills operated de-inking mills, which meant that instead of using virgin wood as its feedstock, the mills used recycled paper as their primary source of fiber. Though the exact recycling process differed slightly from mill to mill, Dr. Woodard explained that generally the wastepaper was put through a de-inking process that used a combination of heat, chemicals, and agitation to remove inks from the paper fibers. (ECF No. 839, PageID.28479-28482). The resulting de-inked paper fibers provided the basis for new paper, much of it fine paper like what this opinion is likely printed on. (Id.).

         Dr. Wolfe testified that not all of the inputs to the papermaking process at the de-inking mills ended up as sellable paper products. Instead, the de-inking process resulted in two “streams.” (ECF No. 838, PageID.28228-28229). One stream contained the paper fibers that ultimately went on to become new paper. The other stream contained the sizeable amount of waste discharge from the recycling process. This effluent contained a mix of unusable paper fibers, ink, clay, caustic soda, and trace metals. Testimony at trial established that the paper mills sometimes discharged the waste directly to the Kalamazoo River or to Portage Creek, but that the mills also used primary, and then secondary, treatments for its effluent. Throughout the production period the effluent sometimes contained PCBs from NCR's CCP.

         Dr. Wolfe also testified that during the de-inking process gelatin capsules containing the PCBs could rupture and release PCBs. He explained that PCBs are hydrophobic, and would primarily attach to the surface area of solids within the effluent. The PCBs could be released at several different points. The capsules could rupture during the de-inking process, or the capsules could remain intact but release PCBs through diffusion. Some of the capsules could also remain intact, but degrade after being discharged in the effluent. When the capsules degraded in the environment, they would release PCBs into the river water and sediment. (ECF No. 838, PageID.28228-28229).

         b. The Kalamazoo River Valley Mills Connected to this Case

         There were a little over a dozen paper mills in the Kalamazoo River Valley that operated at least for some time during the production period. Below, the Court highlights those mills that are at the center of the case.

         i. The Kalamazoo Paper Company Mill

         The Kalamazoo Paper Company (“KPC”) operated a large mill along the Kalamazoo River during the production period. Georgia Pacific later acquired KPC, so Georgia Pacific is a responsible party in this case as the owner and operator of the KPC mill. The KPC mill was one of the largest de-inking mills on the Kalamazoo River. Until 1954, the waste from the mill was discharged directly into the river. (See Tx. 11464).[1] At that time, KPC started operating a clarifier, which is a form of primary treatment that allowed residual solids in the mill's effluent to settle. The settled residual solids were then removed to settling ponds and, ultimately, to nearby landfills adjacent to the Kalamazoo River. (Tx. 4691 at -046). In 1967, the mill connected to the Kalamazoo Water Reclamation Plant for secondary treatment of its wastewater. Secondary treatment typically involves using oxygenation to encourage biological breakdown of the compounds that remain in wastewater after primary treatment.

         ii. The King Mill

         A second major de-inking paper mill, the King mill, was located across the Kalamazoo River from the KPC mill. The King mill produced similar products in similar quantities to the KPC mill. It therefore had a similar output of wastes, both to the Kalamazoo River and to nearby landfills. Prior to 1955, wastewater from the King mill was discharged directly to the Kalamazoo River. (Tx. 4877 at -691). Thereafter the mill operated a clarifier. (Id. at -696). The mill ceased its de-inking operations in 1965 and shut down completely in 1971. (Id. at -732). The King mill was owned and operated by Allied Paper Company, which has since gone bankrupt.

         iii. The Bryant Mill

         The Bryant mill was the third large de-inking mill in the area. The Bryant mill was owned by the St. Regis Company, which was later acquired by International Paper. St. Regis owned and operated the Bryant mill until 1956, when it leased the mill to the Allied Paper Company. Allied then purchased the mill from St. Regis in 1966. International Paper is a responsible party in this litigation as owner of the mill while substantial PCB discharges were being made.

         Unlike the KPC and King mills that sit on the banks of the Kalamazoo River, Bryant mill sits next to Portage Creek, a tributary to the Kalamazoo River. During the production period Portage Creek was dammed at Alcott Street which created a pond approximately 29 acres in size. (Tx. 6574 at -315). The pond was colloquially known as the Bryant mill pond. A large portion of the discharges from the Bryant mill, including many of the discharges from the de-inking facility, were made into the mill pond. The pond had relatively tranquil water which meant that some of the suspended solids in the mill's effluent settled in the pond. Those solids that did not settle flowed down Portage Creek and into the Kalamazoo River, approximately three miles away. In a sense, the Bryant mill pond worked as a clarifier. The dam was sometimes lowered for various reasons, which meant that settled solids were sometimes stirred up and released downstream. After St. Regis had transferred ownership of the mill to Allied, the dam was lowered for a time in 1972 and then permanently in 1976, which meant that settled sediment, and PCBs, were scoured from the pond. The remaining contents of the pond were removed in a remedial action in 1998. (Tx. 6765).

         Bryant mill added an actual primary treatment system in 1954, and connected to the Kalamazoo public sewage treatment system for secondary treatment in 1969. Settled residual solids from Bryant mill clarifiers were disposed of in nearby landfills.

         iv. Plainwell Mill

         The fourth mill in this case is the Plainwell mill, which is located downstream of the KPC and King mills on the Kalamazoo River, and downstream of the confluence of Kalamazoo River and Portage Creek. The Plainwell mill, also called the Simpson-Plainwell or the Hamilton mill, was a de-inking mill until 1963, when it switched to using virgin pulp as its primary feed source. (ECF No. 840, PageID.28546). In 1954, the Plainwell mill began operating a primary treatment system for its effluent and thereafter experimented with secondary treatment over different time periods. Although the Plainwell mill had similar operations to the three mills discussed above, the mill operated at a smaller scale and produced substantially less paper as compared to the KPC, King, or Bryant mills.

         The Plainwell mill was owned and operated between 1954 and 1970 either by Weyerhaeuser or by companies for which Weyerhaeuser has assumed liabilities. Accordingly, Weyerhaeuser is also a responsible party.

         2. NCR and Carbonless Copy Paper

         NCR is a multifaceted corporation that was based in Dayton, Ohio during the production period. In the early 1950s, NCR developed specialty paper that allowed people to write or type in duplicate without messy carbon sheets. NCR started selling this carbonless copy paper in 1954, and it became a profitable product line. NCR created CCP by creating an emulsion with tiny capsules of colorless ink. That emulsion was coated on the back of a sheet of paper. A second sheet of paper was coated on its front with a clay compound, then the two sheets of paper were put together. When a person wrote or typed on the paper, the pressure broke the tiny capsules and released the dye, which reacted with the clay to become dark and reproduce what was being written. Chris Wittenbrink testified at trial that the transfer solvent in the emulsion was made of PCBs, namely Aroclor 1242, that were purchased from the Monsanto company. (ECF No. 852, PageID.29783). NCR would pay independent coating companies to put the emulsion on paper, and then buy the resulting paper that was then used to create finished products such as forms, receipts, and tickets. (Id.).

         In the CCP production process, a sizeable portion of the paper did not become finished product because it was trimmed away, had manufacturing defects, or was otherwise unusable. Spent forms were also included in waste streams after end users were finished with them. The unused or discarded material, called broke and trim, was sold to brokers of recycled paper, who would sell it to the de-inking mills to use as feedstock to produce new paper. Broke and trim CCP was used by mills as one component in mixes of different feedstock.

         At first, CCP was not a good candidate for use as a feedstock because the de-inking process would rupture many of the tiny capsules and the ink inside would react with clays in the mixture. This tended to give the recycled paper produced from it a bluish tint. In response, NCR developed a process that allowed de-inking mills to wash away most of the capsules before they ruptured. The capsules containing PCBs were therefore mostly washed out with the wastewater. At the end of the production period, in 1971, NCR switched to a different emulsion to coat its CCP that did not contain PCBs.

         3. The Kalamazoo River's Contaminants

         PCBs were not the only substances the mills discharged in their waste effluents. Over the years, measurements of Total Suspended Solids (TSS) and Biochemical Oxygen Demand (BODs) demonstrated significant loading to, and burden on, the Kalamazoo River and Portage Creek. Witnesses at the Phase II trial testified that during the production period both the Kalamazoo River and Portage Creek were heavily polluted. For example John Hesse described the surveys of Portage Creek he conducted as part of his work for the State of Michigan. He testified the creek appeared turbid, and had a consistency and color of a blueberry milkshake. (ECF No. 829, PageID.27581). For purposes of this litigation the Court concludes that PCBs are the contaminant of concern for this CERCLA site. (ECF No. 806, PageID.24937). NCR contends the TSS and BOD loading is at least relevant, both as it relates to determining the mills' relative contribution of PCBs to the Superfund Site and to the mills' culpability. The Court acknowledges these, and many other things, may well bear on overall equitable allocation. However, the Court accepts the testimony of the regulatory officials that PCBs are driving the cleanup costs.

         Not all PCBs are the same. The Monsanto company produced and sold a range of PCBs in the United States. NCR purchased PCBs in the form of Aroclor 1242 (meaning the product contained an average amount of 42 percent chlorine) from Monsanto and used Aroclor 1242 to manufacture the emulsion for use in its CCP. In his deposition Dr. Vodden, a former Monsanto employee, testified that PCBs with lower chlorine content tend to be more volatile and break down relatively quickly in the environment. Higher chlorinated PCBs, such as Monsanto's Aroclor 1254 and Aroclor 1260, which are used extensively in electrical applications, are more stable. (ECF No. 875-8). Aroclor 1242 was between these two poles. Dr. Vodden testified that once released into the environment, the lower chlorinated components could break down, leaving only the higher chlorinated components. Therefore, PCBs in the environment with a lower chlorine content can be consistent with an original profile of Aroclor 1254. (Id. at PageID.31271). Dr. Vodden's testimony is supported by an internal Monsanto study that found Aroclor 1242 residues resembled Aroclor 1254 / 1260. (ECF No. 856, PageID.30164 (citing Tx. 2240 at -379)).

         NCR argues that up to a quarter of the PCBs in environmental samples have a profile consistent with higher chlorinated PCBs for which its CCP would not be responsible. The Court acknowledges the possibility of some contributions apart from CCP, but the Court concludes as a matter of fact that the vast majority of the PCBs are linked to CCP. Moreover, the Court is satisfied as a matter of fact and law that there is no proper basis for parsing out the PCBs that may be unrelated to the CCP. The costs of addressing the PCBs linked to CCP would not be materially lower even if there were some way to quantify and then divide any non-CCP sources of PCBs.

         B. The Kalamazoo River Superfund Site

         The CERCLA site has been studied by the state of Michigan and the federal government for decades. Mr. Hesse testified that in 1965, he worked with Dr. Knight to research the organic loadings in the river and the impact of those loadings on the river's health. (ECF No. 829, PageID.27537). Mr. Hesse returned to the area in the early 1970s to perform biological surveys and narrow down the source of PCBs that were being discharged into Lake Michigan from the Kalamazoo River. (ECF No. 829, PageID.27543).

         Studies of the river continued, and on May 5, 1989, the EPA proposed that the Kalamazoo River Superfund Site (the “Superfund Site”) be placed on the National Priorities List (“NPL”). The EPA then listed the Site on August 30, 1991. (ECF No. 806, PageID.24937). In his deposition, James Saric, an EPA remedial project manager at the Superfund Site, testified that PCBs were the toxic substances used to evaluate whether the area should be placed on the NPL. When the area ultimately was listed, PCBs were in fact the substances that justified the listing. (ECF No. 875-10, PageID.31310-31311). The EPA further determined that the major historical source of PCBs in the Kalamazoo River were wastewater discharges from the paper industries. (ECF No. 875-10, PageID.31322; see also Tx. 2461 at -953).

         The Superfund Site in total includes approximately eighty miles of the Kalamazoo River (from Morrow Dam to Lake Michigan) and roughly three miles of Portage Creek running up from its confluence with the Kalamazoo River past the Bryant and Monarch mills. It further includes disposal areas, adjacent river banks and contiguous flood plains, all of which are contaminated with PCBs. The EPA has divided the Superfund Site into several current or former operable units (“OUs”) to manage, study, and cleanup the Superfund Site. The river itself is OU5, and is divided into seven separate work areas tied mostly to current or former dams. The EPA has provided a detailed description of each operable unit (Tx. 2175) and this Section provides a short summary of those units. An overview map of the superfund site is attached as Exhibit A.

         1. Unit Associated Mostly with International Paper: Operable Unit 1

         OU1 covers 89 acres along Portage Creek. The unit includes the Bryant mill pond and former operational areas for the Bryant mill and the Monarch mill.[2] The former operational areas include dewatering lagoons, a landfill, and 19-acre disposal area that received dewatered paper mill residuals from the dewatering lagoons. (Tx. 5683 at 17-20). OU1 received paper mill waste from the Bryant and Monarch mills until the late 1980s. The EPA performed a Time-Critical Removal Action (“TCRA”) in 1998 to remove PCB contaminated sediments from the Bryant mill pond portion of OU1. (Tx. 6419 at -768). Other actions include the collection of groundwater, which is sent to the Kalamazoo Wastewater Treatment Plant. (Tx. 2175 at 20). The EPA released a feasibility study for OU1 in January 2015, and in September 2015 the EPA issued a proposed remedial action plan. (Tx. 9853). A final remedy has not yet been selected.

         2. Units Associated Mostly with Georgia Pacific

         a. Operable Unit 2

         OU2 involves approximately 32 acres consisting of two inactive disposal areas, and is contaminated with PCBs from the recycling of NCR's CCP. OU2 is located on the south side of the Kalamazoo River and is upstream from the confluence of the Kalamazoo River and Portage Creek. The operable unit includes the Willow Boulevard and A-Site Landfills that were used to dispose of dewatered papermaking residuals from the King and KPC mills. (Tx. 4691 at -046). Those landfills received paper waste from the mills during the 1960s, ‘70s and ‘80s. Over the years PCBs from the landfills have eroded into the soil and sediment either adjacent to or in the Kalamazoo River.

         Remedial action at ¶ 2 began in May 2011 and was completed in June 2014. (Tx. 9431 at 27). Garry Griffith, a Georgia Pacific environmental engineer, testified that the history of remedial work at ¶ 2 included excavation of materials containing PCBs, construction of a cover system, stabilization of banks and berms, installation of a groundwater monitoring network, establishment of erosion controls, and establishment of procedures for long-term monitoring programs. (ECF No. 831, PageID. 28011-28013). Future activities in the unit include operation, maintenance, and continued monitoring.

         b. Operable Unit 3

         OU3 covers roughly 23 total acres of the Superfund Site and includes the King Highway Landfill, approximately 7 acres of former dewatering lagoons on the former KPC mill site, and the King Street storm sewer. The King Highway lagoons received paper mill waste from the KPC Mill from the late 1950s until 1977. KPC continued to deposit paper mill waste at the landfill from 1977 through 1997. Like the disposal areas in OU2, PCBs have migrated via erosion or surface water runoff from the landfills into adjacent areas and the Kalamazoo River. (Tx. 2175 at 28-29). Erosion of the landfills, in general, was discussed at trial by Mr. Hesse. Mr. Hesse testified that he observed the landfills during his study with Dr. Knight and saw that they extended down to the water. (ECF No. 829, PageID.27610).

         A record of decision, or ROD, for OU3 was issued in 1998. (Tx. 6410). Georgia Pacific conducted remedial response activities at ¶ 3 from 1996 to 2003. The response activities included the installation of sheetpiling, removal of PCB-contaminated soils, sediment, and paper residuals, and the construction of a final cover system at the Landfill. (Tx. 2175, at 41-43). Georgia-Pacific completed the final remedy for OU3 in 2003

         c. Operable Unit 6

         There is currently no OU6 in the Superfund Site. The former OU6 was located north of OU2, across the Kalamazoo River. It included the former KPC and Hawthorne Mill properties.[3] Mr. Griffith testified that between 2000 and 2009 a removal action was conducted that removed residual solids from the mill lagoons. After the completion of the work, Georgia Pacific petitioned the EPA to have the mill property delisted from the Superfund Site. (ECF No. 831, PageID.28024-28025). The petition was granted on June 30, 2009, after the EPA determined the mill property was no longer a source of PCBs to the river. (Tx. 2175 at 7). Accordingly the EPA does not currently have an OU6 at the Superfund Site. (Id.) If, however, investigations at any of the remaining paper mill properties result in a determination that those properties are a source of PCB contamination, the EPA will designate that property as OU6. (Id.)

         3. Units Associated Mostly with Weyerhaeuser

         a. Operable Unit 4

         OU4 is located on the west side of the Kalamazoo River immediately downstream from the Plainwell Dam. OU4 includes the 12th Street Landfill, which is approximately 6.8 acres in size, and other associated areas, all of which were contaminated by PCBs from NCR's CCP. The landfill is bordered by the Kalamazoo River and wetlands to the North. OU4 received paper mill waste, some of which contained PCBs, from the Plainwell mill from approximately 1955 until 1981.[4] The landfill was closed in 1984. (Tx. 7821 at -991). Mr. Gross testified Weyerhaeuser Company completed the remedial actions in OU4 in 2012, subject to ongoing operations and maintenance. (ECF No. 846, PageID.29096; see also Tx. 7821 at -972).

         b. Operable Unit 7

         OU7 encompasses 35 total acres and includes the former Plainwell mill property which is located on the west side of the Kalamazoo River and upstream from the Plainwell dam. The unit is further divided into three historical operational areas including the mill buildings and dewatering lagoons that contained residual solids contaminated by PCBs. (Tx. 7815 at -001). Weyerhaeuser has completed a Remedial Investigation / Feasibility Study for OU7 (Id.) and the EPA has issued a Record of Decision (Tx. 8015). Mr. Gross testified Weyerhaeuser has already implemented some of these remedial actions and will continue that work. (ECF No. 846, PageID.29097).

         4. The Unit Associated With all Parties: Operable Unit 5

         OU5 is the river portion of the site. It includes the 80 miles of the Kalamazoo river and a 3 mile stretch of Portage Creek. OU5 is contaminated with NCR's PCBs from the paper mills' effluents.

         For purposes of its removal and remediation activity, the EPA subdivided OU5 into seven work areas. (Tx. 2175 at 76). Area 1 covers the lower portion of Portage Creek as well as a portion of the Kalamazoo River from Morrow dam downstream to the Plainwell dam. Work Area 1 is further subdivided into Area 1A for the stretch of Portage Creek from below the Bryant Mill dam to Portage Creek's confluence with the Kalamazoo River; Area 1B for the stretch of Kalamazoo River between the Morrow dam and the confluence of Portage Creek with the Kalamazoo River; and Area 1C for the stretch of the Kalamazoo River between the confluence of Portage Creek with the Kalamazoo River down to the Plainwell dam. The EPA has approved the remedial investigation report and feasibility study for Area 1.

         The other areas are: Area 2 for the Kalamazoo River from Plainwell dam downstream to the Otsego City dam; Area 3 for the Kalamazoo River from Otsego City dam downstream to Otsego dam; Area 4 for the Kalamazoo River from Otsego dam downstream to Trowbridge dam; Area 5 for the Kalamazoo River from Trowbridge dam downstream to Allegan City dam; Area 6 for Lake Allegan; and Area 7 for the Kalamazoo River from Allegan dam downstream to Lake Michigan.

         There have been several TCRAs conducted in order to remove PCB-impacted sediments and flood plain soils from the river unit. (ECF No. 806, PageID.24939). Two TCRAs involved the former Plainwell impoundment and Plainwell dam No. 2 impoundment. The Plainwell impoundment TCRA was funded by Georgia Pacific and Millennium Holdings LLC. Work began in 2007 and was completed in 2009. The Plainwell dam No. 2 area TCRA began work in 2009 and was completed in 2010. (Id.) Work on the third TCRA was completed in 2013 and covered PCB-impacted sediment in Portage Creek between the Bryant mill dam and the creek's confluence with the Kalamazoo River. A forth TCRA removed contaminated solids from the Bryant mill pond. (ECF No. 875-10, PageID.31324).

         Except for Area 1, the EPA has not finalized a remedy for any portion of OU5. Chase Fortenberry, a project manager for the Superfund Site, testified that the EPA issued a ROD for Area 1 on September 28, 2015. (ECF No. 831, PageID.28057). The approved remedy includes removing contaminated sediment and flood plain soils in the work area, engineering and institutional controls, and monitored natural recovery. (Tx. 9881).

         III. PROCEDURAL HISTORY

         In 2010, Georgia Pacific brought this CERCLA action seeking recovery from International Paper, NCR, and Weyerhaeuser for its past and future costs related to its investigation and cleanup activities. The parties engaged in extensive factual and expert discovery over the next three years. Given the size and complexity of the case, the Court bifurcated the trial into two phases. The Court devoted Phase I to the determination of the parties' liability under CERCLA. Phase II, which is at issue here, focused on the allocation of damages among the responsible parties.

         After a bench trial, the Court resolved Phase I by issuing an Opinion and Order on September 26, 2013. In that decision, the Court found all the parties were liable under CERCLA. (ECF No. 432). Both Georgia Pacific and Weyerhaeuser had acknowledged their responsibility as owners and operators of de-inking mills during the production period, so the focus there was on the remaining two parties. In the Phase I decision, the Court determined that both NCR and International Paper were also liable: NCR as an arranger and International Paper as an owner or operator (or both). Id.

         The Court held that NCR is liable as an arranger in this case because it supplied CCP broke and trim to the de-inking mills, and the broke and trim contained PCBs. As a result, the mills used the broke and trim as part of their repulping operations and released PCBs to the river. At least some of the broke generated by NCR and its coaters reached the Superfund Site. (ECF No. 432, PageID.12746-12747). Of course all, or virtually all, of the PCB-containing wastepaper is ultimately traceable back to NCR because NCR developed and controlled the proprietary process for the PCB-containing CCP.

         The Court held that the PCB-containing waste was, at least originally, a product the paper mills were willing to pay for as feed for their recycling businesses. But by no later than 1969, NCR knew that the CCP scrap was not useful for a fully informed buyer. Rather, it was a worthless waste product at best, and a serious environmental hazard and liability at worst. (Id. at PageID.12743-12744). NCR did not disclose this knowledge to the paper industry. Instead it continued to sell CCP broke and trim to brokers and recyclers even though it knew that the wastepaper was an environmental and economic liability. More than that, NCR actively attempted to conceal the hazards associated with CCP wastepaper from recyclers, the public, and the government by delaying public announcement and minimizing the significance of what it was learning. (See Id. at PageID.12745). Even after an NCR-affiliate in the UK stopped circulating the waste in the UK, NCR continued feeding the market in the U.S.

         The Phase I decision also determined that International Paper is liable as an owner or operator because it is the successor-in-interest to St. Regis, who was the owner of the Bryant Mill at a time when the Mill was recycling CCP and thereby disposing of PCBs at the Superfund Site. (Id. at PageID.12756). None of the ownership and disposal facts were seriously contested. Rather, International Paper argued that St. Regis's ownership fell within a statutory exception to ownership held primarily to secure a loan. The Court found the exception inapplicable. (Id. at PageID.12755-12756). As such, International Paper, as the successor-in-interest to St. Regis, qualified as the owner of the Bryant mill for purposes of CERCLA liability. (Id. at PageID.12756).

         Having determined liability, the matter proceeded to Phase II. There Georgia Pacific asked the Court to determine the parties' share of responsibility for its past costs as well as to allocate the parties' responsibility for future costs.

         IV. Claimed Costs & Statute of Limitations

         Before proceeding with the Phase II analysis, the Court will first discuss the total amount in past costs Georgia Pacific avers it has spent before the Phase II trial. Then the Court will determine the total approximate costs it concludes are not time-barred, are proper claimed costs under CERCLA, and are consistent with the National Contingency Plan.

         A. Georgia Pacific's Initial Claimed Costs

         At trial, Roger Hilarides testified that Georgia Pacific was seeking to recover approximately 105.5 million dollars in response costs spent at the Superfund Site. (ECF No. 831, PageID.278986). The chart below provides an overview by operable unit of the amounts Georgia Pacific claims to have spent through September of 2014 and is seeking to recover in Phase II. (Tx. 2617).[5]

Cost Category
Order
Location
Costs
Credits
Net Total
Georgia-Pacific's OU5 Costs
1990 AOC
OU5-Central
$293, 113.28
-
$293, 113.28
1990 AOC
OU5-East
$406, 860.72
$3, 542.70
$403, 318.02
1990 AOC
OU5-General
$12, 316, 472.68
($395, 165.46)
$11, 921, 307.22
1990 AOC
OU5-Portage Creek
$8, 814.81
-
$8, 814.81
1990 AOC
OU5-West
$2, 895, 276.57
($6, 200.54)
$2, 889, 076.03
2007 Plainwell TCRA
OU5-West
$18, 850, 746.76
($1, 025, 000.00)
$17, 825, 746.76
2007 SRI/FS AOC
OU5-Central
$7, 377, 526.38
-
$7, 377, 526.38
2007 SRI/FS AOC
OU5-East
$8, 524.61
-
$8, 524.61
2007 SRI/FS AOC
OU5-General
$8, 487, 789.11
($89, 357.02)
$8, 398.432.09
2007 SRI/FS AOC
OU5-Portage Creek
$38, 570.03
-
$38, 570.03
2007 SRI/FS AOC
OU5-West
$5, 704, 008.43
-
$5, 704, 008.43
2007 Termination AOC
OU5-General
$167, 817.10
($94, 001.36)
$73, 815.74
2008 Response Cost AOC
OU5-General
$1, 845, 000.00
-
$1, 845, 000.00
2009 Plainwell No. 2 TCRA
OU5-Central
$8, 828, 123.79
($1, 999, 496.75)
$6, 828, 627.04
N/A (Mead . Rock-Tenn)
OU5-General
-
($1, 581, 250.00)
($1, 581, 250.00)
SUBTOTAL
$62, 034, 630.44

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.