WASHINGTON (Legal Newsline) - Georgia-Pacific has asked the U.S. Supreme Court to reverse a Sixth Circuit Court of Appeals decision it says misconstrued the federal Superfund pollution law and will force companies to clog the courts with speculative lawsuits against other potential polluters unless it is struck down.
The Sixth Circuit ruled last April that the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, or CERCLA, had a strict three-year statute of limitations for accused polluters to sue anyone else they believed were liable for Superfund cleanup costs. The decision conflicts with a ruling by the First Circuit, and Georgia-Pacific argues it imposes an impossible burden on companies by forcing them to sue anybody who might have contributed to a Superfund site before they have determined what pollutants are present and what the cleanup costs will be.
If upheld, the decision would “incentivize a barrage of premature protective suits” and result in an unfair allocation of Superfund costs, the Koch Industries unit argues in a certiorari petition with the Supreme Court. “This Court’s review is urgently needed to resolve the split and prevent the Sixth Circuit’s error from taking root in this critically important area of the law, which governs decades- long cleanup efforts involving enormous sums of money.”
The underlying case dates back to the 1950s, when paper manufacturers lined the Kalamazoo River and its tributaries in southern Michigan. Some of the manufacturers used recycled copy paper remnants called “broke” that came from NCR and had an emulsion coating containing PCBs. To facilitate sales, NCR developed a process to wash the PCBs off the paper, causing the chemicals to collect in paper mill wastewater and the Kalamazoo River bottom.
Georgia-Pacific worked with the Environmental Protection Agency to clean up the river. The area was declared a Superfund site in 1990 and G-P and several other companies formed a “study group” to investigate the extent of the pollution and how much it would cost to clean up. A federal court in 2000 declared that group “potentially responsible parties" legally liable for the cleanup under CERCLA. But the extent of the pollution was hardly known then, G-P argues. Cleanup costs eventually soared past $300 million.
By 2010 G-P had identified other PRPs including NCR and International Paper, which had operated a mill on the Portage Creek tributary flowing into the Kalamazoo. Since water only flows one way, G-P said, the IP mill had to be responsible for PCBs in Portage Creek. It sued to include them in the Superfund recovery. A trial court allocated 15% of the cost to International Paper, but it appealed and the Sixth Circuit reversed the ruling.
The Sixth Circuit cited Section 113(g)(2) of CERCLA, which authorizes courts to enter a declaratory judgment holding polluters liable for “response costs.” That first happened in 1998, the Sixth Circuit panel ruled, triggering the three-year statute of limitations in Section 113(g)(3)(A) of the law.
In its appeal to the Supreme Court, G-P says the 1998 decision was “a bare declaratory judgment of liability” that didn’t begin to state what how much the cleanup would cost the parties. The law imposes a three-year statute of limitations after a judgment “for recovery of …costs or damages” but there were no “costs or damages” in the initial decision, the company argues.
“The upshot of the Sixth Circuit’s ruling is that Georgia-Pacific cannot recoup any of the tens of millions of dollars it has spent on cleanup thus far, or any of the hundreds of millions of dollars it will likely spend in the future—even though the district court has already determined that other parties share significant responsibility for the pollution at the site,” G-P said.
The First Circuit considered the same question in a case involving American Cyanamid and ruled the other way, but the Sixth Circuit said it wasn’t bound by that decision. Weyerhauser and International Paper, in briefs opposing certiorari filed with the Supreme Court, say the law refers to judgment in “any action” to recover costs, without stating that judgment must also quantify those costs.
There is no basis for the “parade of horribles” G-P outlines in its brief, International Paper contends.
“Appeals court decisions dating back 16 years have applied essentially the same rule as the decision below for contribution actions premised on CERCLA settlements, without any noticeable uptick in litigation, let alone clogged dockets or chaos,” the company said in its Supreme Court brief.
If the Supreme Court takes G-P’s appeal, it will join another important environmental case that was argued in October involving the Sackett family and their long-running fight to build a house on land they own near a lake in Idaho. They won a landmark decision in 2012 allowing landowners to challenge Clean Water Act violation orders immediately in federal court. Now they are challenging the Ninth Circuit Court of Appeals decision upholding the EPA’s determination that their landlocked parcel, which is separated from the lake by a roadway, contains wetlands classified as “waters of the United States.”