Source: http://www.greenbaypressgazette.com, October 25, 2014
By: Paul Srubas
NCR Corp. continued to produce carbonless copy paper well after learning a chemical involved in the manufacturing process posed a long-term risk to human health and the vitality of the Fox River, a federal appellate court has found.
The company knew long before area paper recyclers did that polychlorinated biphenyls, or PCBs, were a problem, the court concluded. But that still might not be enough to justify sticking it with all of the Fox River cleanup costs, the 7th District Court of Appeals ruled recently.
Dredging and processing sediment from the river remains under way this year and should wrap up for the season in the coming weeks. About 440,000 cubic yards of sediment has been removed this year, and about 165 acres have been capped as part of the contamination cleanup and mitigation process. The project is expected to finish in 2017.
The appellate court ruling overturns that of U.S. District Judge William Griesbach, who had found that NCR’s early knowledge meant the company should be liable for all cleanup costs, estimated at nearly $1 billion.
That doesn’t mean NCR is off the hook. It sends the case back to Griesbach to determine whether other factors should be considered in apportioning blame.
Griesbach also must consider the volumes of PCBs discharged into the river by NCR and paper recyclers, whether any of the PCBs in the river came from a source other than carbonless copy paper and whether NCR’s liability should be mitigated by how much it has already cooperated with the U.S. Environmental Protection Agency in cleaning up the river.
Griesbach had discounted those issues on the grounds that paper companies that bought scrap NCR copy paper, recycled it and discharged PCB-contaminated waste into the river as part of the process did so without having NCR’s advance knowledge of the dangers that posed.
“We hasten to say, however, that further information may … have the effect of reinforcing the district court’s present conclusions,” the appellate court said. “It is impossible to know at this juncture what the likely effect will be.
“We understand that a party’s knowledge that it is either doing something wrong or running an undue risk that it is doing something wrong can be a compelling basis for deciding who should contribute to the costs of clean-up. But we do not want … to privilege that factor above all others.”
It is good news for NCR, one of two companies that have footed the lion’s share of the cleanup costs so far. And it’s not the only good news.
The appellate court also overturned Griesbach’s ruling that the environmental harm caused to the Fox River from several decades of PCB discharges can’t possibly be divided up based on the amounts each company discharged. Under Griesbach’s earlier decision, there was no practical way to divide shares of discharge responsibilities. Now, the appellate court has upheld NCR’s right to argue that it should be liable only for the portion of discharge it was responsible.
NCR contracted in the 1950s and 1960s with Appleton Coated Paper Corp. and Combined Paper Mills to coat the paper with PCB-laden emulsion. NCR then sold the finished product as carbonless copy paper. Scrap from the production process was sold to several area paper companies that used it for its recyclable fiber. Production involving that recycled paper was a major source of PCBs in the river, according to the government.
All the companies that used NCR’s paper for recycling have been identified by the government as potentially responsible for PCB pollution in the Fox River.
Appleton Coated Paper and Combined Paper Mills also were responsible for getting PCBs in the river, according to the government, but those companies don’t exist anymore.
NCR eventually bought them. In 1978 — well after NCR stopped producing the copy paper with PCBs — it sold the two plants to the newly formed Appleton Papers Inc. Griesbach previously ruled that Appleton Papers did not acquire the liability when it acquired the two plants. However, API remains financially responsible because of an agreement it made with NCR in the late 1990s to cover 60 percent of the two companies’ liability in PCB cleanup.
The court of appeals ruling last month also opens the door for API to seek compensation from the other potentially responsible parties for the amount it spent so far on cleanup.
Meanwhile, the U.S. Department of Justice has moved ahead with plans to seek court approval for $55 million worth of settlements with companies and governments deemed partially responsible for the contamination. Several similar deals already have been made and executed with other companies.
The money in these latest proposed agreements would involve payments by Kimberly-Clark Corp., Menasha Corp. U.S. Paper Mills, WTM I Co., CBC Coating, Inc., NewPage Wisconsin System Inc., the city of Appleton and the Neenah-Menasha Sewerage Commission. While some of that money would cover some expenses by the U.S. Environmental Protection Agency and the state Department of Natural Resources, about $45 million would go for natural resource damage assessment.
The department filed the settlements, gathered public comment for a period and now is seeking U.S. court approval. It made the request this month, just weeks after the 7th District Court of Appeals ruling.
It’s unclear what if any effect the appellate court ruling could have on settlement agreements, at least some of which were made under the assumption that they protect the agreeing party from compensatory lawsuits from other potentially responsible parties.
— psrubas@pressgazettemedia.com and follow him on Twitter @PGpaulsrubas.
Fox River cleanup timeline
• 1976: First fish consumption advisories jointly issued by the Wisconsin Department of Health and Social Services and the Wisconsin Department of Natural Resources.
• 1976: Congress passes Toxic Substances Control Act to outlaw manufacture, sale and distribution of PCBs.
• 1989-90: Large-scale sampling conducted in Green Bay/Lower Fox River. Initial results reported in 1993.
• 1995: More extensive sediment sampling conducted downstream of the De Pere dam as part of the Fox River Coalition.
• January 1997: The Wisconsin Department of Natural Resources and seven paper companies sign $10 million agreement to do demonstration projects.
• July 1997: Federal, state and tribal officials sign an agreement to share resources in devising comprehensive cleanup.
• September 1998: Demonstration project begins on Lower Fox River section and is completed in December 1999.
• November 2006: The DNR and EPA release amended cleanup plan for Lower Fox River.
• May 2007: Dredging below De Pere dam begins, with sediment trucked to Michigan landfill.
• June 2007: Paper companies begin meeting with mediator to try to reach financial settlement on cleanup project.
• June 28, 2007: DNR and EPA release final cleanup plan for Lower Fox River to include dredging and capping.
• Dredging and capping has taken place seasonally every year, with completion expected in 2017, as companies and the government continue to wrangle in court over costs.