On September 25, 2014, the Seventh Circuit issued two opinions in litigation related to the Fox River Superfund site in Wisconsin. The Fox River is a sediment site contaminated primarily with polychlorinated biphenyls (PCBs) from the paper making industry. In one of these decisions, the Seventh Circuit held that, based on evidence at trial, the environmental harm to the Fox River was theoretically capable of being apportioned among the potentially responsible parties (PRPs), and that a permanent injunction was not an appropriate remedy for enforcing a Unilateral Administrative Order (UAO) under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). U.S. v. P.H. Glatfelter Co., No. 13-2436, 13-2441 (7th Cir. Sept. 25, 2014).
U.S. v. P.H. Glatfelter Co. is the government’s enforcement action against two PRPs at the Fox River Site, P.H. Glatfelter Company (Glatfelter) and NCR Corporation (NCR). The enforcement action is based on a 2007 Unilateral Administrative Order (2007 UAO) issued to the PRPs at the Site. NCR originally led the efforts to implement the 2007 UAO, but eventually refused to perform the work in 2012. The lower court issued a preliminary injunction against NCR requiring it to comply with the 2007 UAO, and then subsequently issued a permanent injunction to all of the non-settling PRPs.
The Seventh Circuit reversed the lower court’s imposition of a permanent injunction. The Court agreed with the Defendants that “permanent injunctive relief is an inappropriate mechanism to enforce an administrative order under §106(b) of CERCLA.” Id. at 35. The Court distinguished between subparts (a) and (b) of Section 106 and found that injunctive relief may be appropriate under Section 106(a) of CERCLA because this provision allows EPA to force PRPs to act in an emergency situation where there is “an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility.” In contrast, “unlike an action under the first section of §106(a), equitable considerations play no part in an action to enforce an administrative order under §106(b).” Id. at 37. Furthermore, permanent injunctive relief is not necessary to enforce a UAO because “the statute already provides for civil penalties . . . [when] a PRP fails to comply with such an order ‘without sufficient cause,’” noting that “[n]othing we have said prevents the government from seeking declaratory relief to establish that a PRP lacks sufficient cause for noncompliance.” Id. at 38.
The Seventh Circuit also held that the harm at the Fox River was not capable of apportionment. Instead, the Court found that “the harm would be theoretically capable of apportionment if NCR could show the extent to which it contributed to PCB concentrations.” Id. at 29. And if NCR could make this showing, “a reasonable basis for apportionment could be found in the remediation costs necessitated by each party.” Id. at 29. This is one of the few opinions since Burlington Northern in 2009 in which a Court has found that an environmental harm is theoretically capable of apportionment.