Source: http://www.lexology.com, May 20, 2015
By: Gerald F. George, Davis Wright Tremaine LLP
On May 19, a district court ruled that a company had established divisibility for its liability at a major downstream segment of the Fox River mega-site in Wisconsin, capping its liability for that segment at 28%. This same court had initially held that the company, NCR, was jointly and severally liable for PCB contamination at the site. This decision and the appellate court’s earlier reversal of the initial rejection of the divisibility argument signal that courts may be increasingly receptive to divisibility claims in Superfund actions.
In its prior ruling, the district court had applied a binary measure of harm based on remediation costs, and denied NCR’s motion seeking divisibility.  The 7th Circuit Court of Appeals upheld that ruling on an interim appeal, but later reversed itself and held that “harm” was a continuous measure of the resulting risk to health and the environment, which would vary with the amount of PCBs present, and not on the cost of remediation.
In the remand, noting that the appellate court had held that remediation costs would also be continuous, with costs higher in areas that were more toxic, the district court then held that it was reasonable to apply the harm percentages to the costs of remediation: “It requires no stretch of logic to conclude that NCR would also be responsible for a similar amount of the cleanup costs.”
Over the objections of the US, the district court defined “harm” as the volume of PCBs present in that segment of the Site, with NCR’s share limited to an estimate of the percentage of those PCBs that originated with NCR.  In accepting the percentage proposed by NCR, the court relied upon estimates offered in the earlier trial by an expert for another party that were admittedly inexact “ballpark” numbers, but were likely an overestimate of the actual NCR contribution.  Rejecting US arguments about the imprecision of the estimates, the court held that the numbers represented the expert’s “best estimate” and that the use of averages in determining the NCR contribution was appropriate, finding that the facts indicated that the NCR contribution in some areas was likely lower than average and in others may have been higher.  Describing the Supreme Court decision in Burlington Northern as seeming to “lower the bar” for the kinds of evidence needed for apportionment, the court held “It is reasonableness, not precision, that governs apportionment analysis.”
In the period since the Supreme Court issued its Burlington Northern decision, the United States has been steadfastly arguing that the law on apportionment had not changed, and it regularly pointed to favorable district court decisions, including the initial decisions adverse to NCR, to support that view.  With the appellate reversal and this decision on remand, that argument now has lost much of its force.  We can expect that responsible parties at Superfund sites will push courts and allocation mediators to walk through the door opened by the Supreme Court and seek fair apportionment.