A Tale of Two Rivers: An Analysis of Different Approaches to Proving Intent for CERCLA Arranger Liability

• Date: 01 July 2015

7-2015 NEWS & ANALYSIS 45 ELR 10699

A Tale of Two

Rivers: An

Analysis of

Different

Approaches to

Proving Intent for

CERCLA

Arranger Liability

by Chris Dow

Chris Dow is an environmental attorney in San Francisco,

CA, with several years of CERCLA litigation experience.

Summary

Courts have grappled with the scope of CERCLA

arranger liability ever since the U.S. Supreme Court’s

2009 decision in Burlington Northern & Santa Fe

Railway Co. v. United States. Two opposite deci-

sions on nearly identical facts illustrate the variety

of approaches. In the rst, a manufacturer’s actions

related to the sa le of PCB-laden scrap paper did not

show the requisite intent to dispose; in the second, evi-

dence gleaned from documents and expert testimony

was the primar y basis for holding the same manufac-

turer liable as an arranger. e latter outcome suggests

the importance of circumstantial evidence in these

cases, a nd counsel should seek discovery of such evi-

dence at an early stage.

I. Introduction

e Lower Fox R iver ru ns through Wisconsin from Lake

Winnebago into Green Bay and Lake Michigan. Histori-

cally the river has been, and remains today, a major hub

for paper production, a water-intensive process. Compa-

nies founded along the river produce widely used paper

products with brand names such as Quilted Northern and

Charmin. To the south and east, across Lake Michigan,

lies the Kalamazoo River. It too has a history as a center

for paper production.

From approximately 1954 to 1971, NCR Corp. took

part in a paper manufacturing process t hat, in addition to

producing a popular consumer paper product, also gen-

erated byproduct scrap paper containing polychlorinated

biphenyls (PCBs). is scrap paper was purchased by recy-

cling paper mills located along both rivers. e mills recy-

cled the scrap to manufacture various new paper items and,

as a result, released wastewater that contained PCBs into

the Lower Fox and Kalamazoo Rivers. PCBs are known to

cause cancer and other adverse health eects in animals,

and are a potential carcinogen in humans.1

Largely due to this PCB contamination, both rivers are

currently the foc us of cleanup enforcement ac tions by the

U.S. Environmental Protection Agency (EPA).2 Litiga-

tion concerning who should pay for clea nup, and to what

extent, is pending bet ween NCR and the recycling paper

mills.3 e mills have argued that NCR, by either directly

or indirec tly supplying them with PCB -containing scrap

paper, arranged for the d isposal of a haza rdous substance

and thereby a ssumed “arranger” cleanup liability under

the Comprehensive Environmental Response, Compen-

sation, a nd Liability A ct (CERCL A) of 1980.4 NCR has

disagreed with the recycling mill s’ characterization of

the disposition of this scrap paper, and countered with

CERCLA’s judicially fashioned “usef ul product defense”

to arranger liability, arguing the PCB-containing scrap

paper was not disposed of, but rather sold as a useful prod-

1. For more information on the health hazards of PCBs, visit the U.S. Envi-

ronmental Protection Agency’s (EPA’s) PCB web page, http://www.epa.gov/

osw/hazard/tsd/pcbs/pubs/eects.htm (last visited May 28, 2015).

2. For more information on the Lower Fox and Kalamazoo River enforcement

actions, respectively, visit the U.S. Department of Justice web page, www.

justice.gov/enrd/3643.htm; and EPA’s Region 5 Superfund web page, www.

epa.gov/region5/cleanup/kalproject/index.htm (last visited May 28, 2015).

3. e cases are Appvion, Inc. v. P.H. Glatfelter Co., No. 08-C-16, led in the

Eastern District Court of Wisconsin, and Georgia-Pacic Consumer Prod-

ucts, L.P. v. NCR Corp., No. 1:11-cv-00483, led in the Western District

Court of Michigan.

4. 42 U.S.C. §§9601-9675, ELR S. CERCLA §§101-405.

Editors’ note: e author was an attorney on the Fox River case from 2008-

2010, representing one of the paper mill-recycling defendants. He was

involved in the trial court decision mentioned in footnote 7. e author was

not involved in the Fox River arranger liability trial or decision discussed

in this Article.

Copyright © 2015 Environmental Law Institute®, Washington, DC. Reprinted with permission from ELR®, http://www.eli.org, 1-800-433-5120.