Georgia-Pacific Consumer Products LP et al v. NCR Corporation et al

Filing 921

PHASE II BENCH TRIAL OPINION & ORDER re: [878, 887, 913 and 917]: Parties shall file proposed Judgment no later than 5/31/2018; signed by Chief Judge Robert J. Jonker (Attachments: #1 Appendix, #2 Exhibit A, #3 Exhibit B) (Chief Judge Robert J. Jonker, sdb)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

GEORGIA-PACIFIC CONSUMER
PRODUCTS LP, FORT JAMES
CORPORATION, and
GEORGIA-PACIFIC LLC,
Plaintiffs,
CASE NO. 1:11-CV-483
v.
HON. ROBERT J. JONKER
NCR CORPORATION,
INTERNATIONAL PAPER CO., and
WEYERHAEUSER CO.
Defendants.
___________________________________/
PHASE II BENCH TRIAL OPINION & ORDER
I. INTRODUCTION
This case addresses responsibility under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (“CERCLA”) for clean up of the Kalamazoo River and
Portage Creek in Southwest Michigan among four parties: Georgia Pacific, International Paper, and
Weyerhaeuser, all paper companies with mills on the river–and NCR, the developer and a
manufacturer of carbonless copy paper (“CCP”).
The river area is contaminated with polychlorinated biphenyls (“PCBs”), a hazardous
substance under CERCLA. It is contaminated because the paper mills in the Kalamazoo River
Valley discharged PCBs as part of their waste streams in the mid to late 20th century. The PCBs
were in the mills’ waste streams because they recycled wastepaper as a source of pulp, and some of
that wastepaper was NCR’s CCP which contained PCBs. More specifically, from 1954 to 1971 (“the

production period”), NCR’s CCP was made using Aroclor 1242, a source of PCBs. To address the
potential harm of PCBs in the environment, the U.S. Environmental Protection Agency (“EPA”) has
declared 80 miles of the river and portions of the surrounding area a Superfund Site under CERCLA.
The case involves complex legal and factual questions, and the Court bifurcated the trial.
In Phase I, the Court determined that all of the parties are potentially responsible parties under
CERCLA. (ECF No. 432). Georgia Pacific, Weyerhaeuser, and International Paper are liable as
owners or operators of mills. 42 U.S.C. § 9607(a)(1)-(2). NCR is liable as an arranger. 42 U.S.C.
§ 9607(a)(3). In Phase II, the parties ask the Court to determine the scope of costs at issue, whether
the costs are divisible, and how to allocate costs among the parties. It was not a short task; 20 days
of trial and thousands of exhibits were used to present the parties’ positions on the issues. Based on
the parties’ presentations, the post-trial briefs, and all other matters of record, the Court renders its
decision as to the parties’ share of responsibility below. The Court concludes each party has an
equitable share of responsibility for past costs and allocates those costs in the following overall
percentages: Georgia Pacific 40%; NCR 40%; International Paper 15%; and Weyerhaeuser 5%. The
Court determines there is too much uncertainty about the allocation of appropriate future costs at this
time, though a declaratory judgment regarding liability for these costs will enter as required by
statute.
II. FACTUAL BACKGROUND
A.

Overview of Operational History
The events at the heart of this case date back several decades. Much of the information from

the production period is no longer readily available. Many potential witnesses, such as employees
and officers of the mills, are no longer around to share memories of long-ago events. Many
2

operational records have been lost or discarded in the intervening years of mergers, bankruptcies,
and general business practices. The parties presented a plethora of documents, experts, and
mathematical models in an effort to fill in the blanks. The trial testimony and exhibits provide
exhaustive background on many topics, but a streamlined narrative is more fitting to describe the
basis of the Court’s decision. Ultimately, the finder-of-fact must draw inferences from the available
evidentiary data points to present a coherent basis for decision.
1.

The Mills
a.

The De-Inking Process in General

The paper mills in this case were all engaged, at one time or another, in the business of
recycling NCR’s CCP. During the production period these mills operated de-inking mills, which
meant that instead of using virgin wood as its feedstock, the mills used recycled paper as their
primary source of fiber. Though the exact recycling process differed slightly from mill to mill, Dr.
Woodard explained that generally the wastepaper was put through a de-inking process that used a
combination of heat, chemicals, and agitation to remove inks from the paper fibers. (ECF No. 839,
PageID.28479-28482). The resulting de-inked paper fibers provided the basis for new paper, much
of it fine paper like what this opinion is likely printed on. (Id.).
Dr. Wolfe testified that not all of the inputs to the papermaking process at the de-inking mills
ended up as sellable paper products. Instead, the de-inking process resulted in two “streams.” (ECF
No. 838, PageID.28228-28229). One stream contained the paper fibers that ultimately went on to
become new paper. The other stream contained the sizeable amount of waste discharge from the
recycling process. This effluent contained a mix of unusable paper fibers, ink, clay, caustic soda,
and trace metals. Testimony at trial established that the paper mills sometimes discharged the waste
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directly to the Kalamazoo River or to Portage Creek, but that the mills also used primary, and then
secondary, treatments for its effluent. Throughout the production period the effluent sometimes
contained PCBs from NCR’s CCP.
Dr. Wolfe also testified that during the de-inking process gelatin capsules containing the
PCBs could rupture and release PCBs. He explained that PCBs are hydrophobic, and would
primarily attach to the surface area of solids within the effluent. The PCBs could be released at
several different points. The capsules could rupture during the de-inking process, or the capsules
could remain intact but release PCBs through diffusion. Some of the capsules could also remain
intact, but degrade after being discharged in the effluent. When the capsules degraded in the
environment, they would release PCBs into the river water and sediment. (ECF No. 838,
PageID.28228-28229).
b.

The Kalamazoo River Valley Mills Connected to this Case

There were a little over a dozen paper mills in the Kalamazoo River Valley that operated at
least for some time during the production period. Below, the Court highlights those mills that are
at the center of the case.
i.

The Kalamazoo Paper Company Mill

The Kalamazoo Paper Company (“KPC”) operated a large mill along the Kalamazoo River
during the production period. Georgia Pacific later acquired KPC, so Georgia Pacific is a
responsible party in this case as the owner and operator of the KPC mill. The KPC mill was one of
the largest de-inking mills on the Kalamazoo River. Until 1954, the waste from the mill was

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discharged directly into the river. (See Tx. 11464).1 At that time, KPC started operating a clarifier,
which is a form of primary treatment that allowed residual solids in the mill’s effluent to settle. The
settled residual solids were then removed to settling ponds and, ultimately, to nearby landfills
adjacent to the Kalamazoo River. (Tx. 4691 at -046). In 1967, the mill connected to the Kalamazoo
Water Reclamation Plant for secondary treatment of its wastewater. Secondary treatment typically
involves using oxygenation to encourage biological breakdown of the compounds that remain in
wastewater after primary treatment.
ii.

The King Mill

A second major de-inking paper mill, the King mill, was located across the Kalamazoo River
from the KPC mill. The King mill produced similar products in similar quantities to the KPC mill.
It therefore had a similar output of wastes, both to the Kalamazoo River and to nearby landfills.
Prior to 1955, wastewater from the King mill was discharged directly to the Kalamazoo River. (Tx.
4877 at –691). Thereafter the mill operated a clarifier. (Id. at -696). The mill ceased its de-inking
operations in 1965 and shut down completely in 1971. (Id. at -732). The King mill was owned and
operated by Allied Paper Company, which has since gone bankrupt.
iii.

The Bryant Mill

The Bryant mill was the third large de-inking mill in the area. The Bryant mill was owned
by the St. Regis Company, which was later acquired by International Paper. St. Regis owned and
operated the Bryant mill until 1956, when it leased the mill to the Allied Paper Company. Allied

1

“Tx” refers to the trial exhibits in this case. Where possible the Court refers to the specific
page of the exhibit using the last three digits of the Bates number appearing on the exhibit or, if no
Bates number is provided, the sequential pdf page.
5

then purchased the mill from St. Regis in 1966. International Paper is a responsible party in this
litigation as owner of the mill while substantial PCB discharges were being made.
Unlike the KPC and King mills that sit on the banks of the Kalamazoo River, Bryant mill sits
next to Portage Creek, a tributary to the Kalamazoo River. During the production period Portage
Creek was dammed at Alcott Street which created a pond approximately 29 acres in size. (Tx. 6574
at –315). The pond was colloquially known as the Bryant mill pond. A large portion of the
discharges from the Bryant mill, including many of the discharges from the de-inking facility, were
made into the mill pond. The pond had relatively tranquil water which meant that some of the
suspended solids in the mill’s effluent settled in the pond. Those solids that did not settle flowed
down Portage Creek and into the Kalamazoo River, approximately three miles away. In a sense, the
Bryant mill pond worked as a clarifier. The dam was sometimes lowered for various reasons, which
meant that settled solids were sometimes stirred up and released downstream. After St. Regis had
transferred ownership of the mill to Allied, the dam was lowered for a time in 1972 and then
permanently in 1976, which meant that settled sediment, and PCBs, were scoured from the pond.
The remaining contents of the pond were removed in a remedial action in 1998. (Tx. 6765).
Bryant mill added an actual primary treatment system in 1954, and connected to the
Kalamazoo public sewage treatment system for secondary treatment in 1969. Settled residual solids
from Bryant mill clarifiers were disposed of in nearby landfills.
iv.

Plainwell Mill

The fourth mill in this case is the Plainwell mill, which is located downstream of the KPC
and King mills on the Kalamazoo River, and downstream of the confluence of Kalamazoo River and
Portage Creek. The Plainwell mill, also called the Simpson-Plainwell or the Hamilton mill, was a

6

de-inking mill until 1963, when it switched to using virgin pulp as its primary feed source. (ECF
No. 840, PageID.28546). In 1954, the Plainwell mill began operating a primary treatment system
for its effluent and thereafter experimented with secondary treatment over different time periods.
Although the Plainwell mill had similar operations to the three mills discussed above, the mill
operated at a smaller scale and produced substantially less paper as compared to the KPC, King, or
Bryant mills.
The Plainwell mill was owned and operated between 1954 and 1970 either by Weyerhaeuser
or by companies for which Weyerhaeuser has assumed liabilities. Accordingly, Weyerhaeuser is also
a responsible party.
2.

NCR and Carbonless Copy Paper

NCR is a multifaceted corporation that was based in Dayton, Ohio during the production
period. In the early 1950s, NCR developed specialty paper that allowed people to write or type in
duplicate without messy carbon sheets. NCR started selling this carbonless copy paper in 1954, and
it became a profitable product line. NCR created CCP by creating an emulsion with tiny capsules
of colorless ink. That emulsion was coated on the back of a sheet of paper. A second sheet of paper
was coated on its front with a clay compound, then the two sheets of paper were put together. When
a person wrote or typed on the paper, the pressure broke the tiny capsules and released the dye,
which reacted with the clay to become dark and reproduce what was being written. Chris
Wittenbrink testified at trial that the transfer solvent in the emulsion was made of PCBs, namely
Aroclor 1242, that were purchased from the Monsanto company. (ECF No. 852, PageID.29783).
NCR would pay independent coating companies to put the emulsion on paper, and then buy the

7

resulting paper that was then used to create finished products such as forms, receipts, and tickets.
(Id.).
In the CCP production process, a sizeable portion of the paper did not become finished
product because it was trimmed away, had manufacturing defects, or was otherwise unusable. Spent
forms were also included in waste streams after end users were finished with them. The unused or
discarded material, called broke and trim, was sold to brokers of recycled paper, who would sell it
to the de-inking mills to use as feedstock to produce new paper. Broke and trim CCP was used by
mills as one component in mixes of different feedstock.
At first, CCP was not a good candidate for use as a feedstock because the de-inking process
would rupture many of the tiny capsules and the ink inside would react with clays in the mixture.
This tended to give the recycled paper produced from it a bluish tint. In response, NCR developed
a process that allowed de-inking mills to wash away most of the capsules before they ruptured. The
capsules containing PCBs were therefore mostly washed out with the wastewater. At the end of the
production period, in 1971, NCR switched to a different emulsion to coat its CCP that did not
contain PCBs.
3.

The Kalamazoo River’s Contaminants

PCBs were not the only substances the mills discharged in their waste effluents. Over the
years, measurements of Total Suspended Solids (TSS) and Biochemical Oxygen Demand (BODs)
demonstrated significant loading to, and burden on, the Kalamazoo River and Portage Creek.
Witnesses at the Phase II trial testified that during the production period both the Kalamazoo River
and Portage Creek were heavily polluted. For example John Hesse described the surveys of Portage
Creek he conducted as part of his work for the State of Michigan. He testified the creek appeared

8

turbid, and had a consistency and color of a blueberry milkshake. (ECF No. 829, PageID.27581).
For purposes of this litigation the Court concludes that PCBs are the contaminant of concern for this
CERCLA site. (ECF No. 806, PageID.24937). NCR contends the TSS and BOD loading is at least
relevant, both as it relates to determining the mills’ relative contribution of PCBs to the Superfund
Site and to the mills’ culpability. The Court acknowledges these, and many other things, may well
bear on overall equitable allocation. However, the Court accepts the testimony of the regulatory
officials that PCBs are driving the cleanup costs.
Not all PCBs are the same. The Monsanto company produced and sold a range of PCBs in
the United States. NCR purchased PCBs in the form of Aroclor 1242 (meaning the product
contained an average amount of 42 percent chlorine) from Monsanto and used Aroclor 1242 to
manufacture the emulsion for use in its CCP. In his deposition Dr. Vodden, a former Monsanto
employee, testified that PCBs with lower chlorine content tend to be more volatile and break down
relatively quickly in the environment. Higher chlorinated PCBs, such as Monsanto’s Aroclor 1254
and Aroclor 1260, which are used extensively in electrical applications, are more stable. (ECF No.
875-8). Aroclor 1242 was between these two poles. Dr. Vodden testified that once released into the
environment, the lower chlorinated components could break down, leaving only the higher
chlorinated components. Therefore, PCBs in the environment with a lower chlorine content can be
consistent with an original profile of Aroclor 1254. (Id. at PageID.31271). Dr. Vodden’s testimony
is supported by an internal Monsanto study that found Aroclor 1242 residues resembled Aroclor
1254 / 1260. (ECF No. 856, PageID.30164 (citing Tx. 2240 at -379)).
NCR argues that up to a quarter of the PCBs in environmental samples have a profile
consistent with higher chlorinated PCBs for which its CCP would not be responsible. The Court

9

acknowledges the possibility of some contributions apart from CCP, but the Court concludes as a
matter of fact that the vast majority of the PCBs are linked to CCP. Moreover, the Court is satisfied
as a matter of fact and law that there is no proper basis for parsing out the PCBs that may be
unrelated to the CCP. The costs of addressing the PCBs linked to CCP would not be materially
lower even if there were some way to quantify and then divide any non-CCP sources of PCBs.
B.

The Kalamazoo River Superfund Site
The CERCLA site has been studied by the state of Michigan and the federal government for

decades. Mr. Hesse testified that in 1965, he worked with Dr. Knight to research the organic
loadings in the river and the impact of those loadings on the river’s health. (ECF No. 829,
PageID.27537). Mr. Hesse returned to the area in the early 1970s to perform biological surveys and
narrow down the source of PCBs that were being discharged into Lake Michigan from the
Kalamazoo River. (ECF No. 829, PageID.27543).
Studies of the river continued, and on May 5, 1989, the EPA proposed that the Kalamazoo
River Superfund Site (the “Superfund Site”) be placed on the National Priorities List (“NPL”). The
EPA then listed the Site on August 30, 1991. (ECF No. 806, PageID.24937). In his deposition,
James Saric, an EPA remedial project manager at the Superfund Site, testified that PCBs were the
toxic substances used to evaluate whether the area should be placed on the NPL. When the area
ultimately was listed, PCBs were in fact the substances that justified the listing. (ECF No. 875-10,
PageID.31310-31311). The EPA further determined that the major historical source of PCBs in the
Kalamazoo River were wastewater discharges from the paper industries. (ECF No. 875-10,
PageID.31322; see also Tx. 2461 at -953).

10

The Superfund Site in total includes approximately eighty miles of the Kalamazoo River
(from Morrow Dam to Lake Michigan) and roughly three miles of Portage Creek running up from
its confluence with the Kalamazoo River past the Bryant and Monarch mills. It further includes
disposal areas, adjacent river banks and contiguous flood plains, all of which are contaminated with
PCBs. The EPA has divided the Superfund Site into several current or former operable units
(“OUs”) to manage, study, and cleanup the Superfund Site. The river itself is OU5, and is divided
into seven separate work areas tied mostly to current or former dams. The EPA has provided a
detailed description of each operable unit (Tx. 2175) and this Section provides a short summary of
those units. An overview map of the superfund site is attached as Exhibit A.
1.

Unit Associated Mostly with International Paper: Operable Unit 1

OU1 covers 89 acres along Portage Creek. The unit includes the Bryant mill pond and
former operational areas for the Bryant mill and the Monarch mill.2 The former operational areas
include dewatering lagoons, a landfill, and 19-acre disposal area that received dewatered paper mill
residuals from the dewatering lagoons. (Tx. 5683 at 17-20). OU1 received paper mill waste from
the Bryant and Monarch mills until the late 1980s. The EPA performed a Time-Critical Removal
Action (“TCRA”) in 1998 to remove PCB contaminated sediments from the Bryant mill pond
portion of OU1. (Tx. 6419 at -768). Other actions include the collection of groundwater, which is
sent to the Kalamazoo Wastewater Treatment Plant. (Tx. 2175 at 20).

The EPA released a

feasibility study for OU1 in January 2015, and in September 2015 the EPA issued a proposed
remedial action plan. (Tx. 9853). A final remedy has not yet been selected.

2

The Monarch mill was a de-inking mill operated by Allied and located along Portage Creek.
(Tx. 6334 at -691 & -692). Like the Bryant mill, effluent from its clarifier was discharged above the
Bryant mill pond. The mill ceased de-inking in 1957.
11

2.

Units Associated Mostly with Georgia Pacific
a.

Operable Unit 2

OU2 involves approximately 32 acres consisting of two inactive disposal areas, and is
contaminated with PCBs from the recycling of NCR’s CCP. OU2 is located on the south side of the
Kalamazoo River and is upstream from the confluence of the Kalamazoo River and Portage Creek.
The operable unit includes the Willow Boulevard and A-Site Landfills that were used to dispose of
dewatered papermaking residuals from the King and KPC mills. (Tx. 4691 at -046). Those landfills
received paper waste from the mills during the 1960s, ‘70s and ‘80s. Over the years PCBs from the
landfills have eroded into the soil and sediment either adjacent to or in the Kalamazoo River.
Remedial action at OU2 began in May 2011 and was completed in June 2014. (Tx. 9431 at
27). Garry Griffith, a Georgia Pacific environmental engineer, testified that the history of remedial
work at OU2 included excavation of materials containing PCBs, construction of a cover system,
stabilization of banks and berms, installation of a groundwater monitoring network, establishment
of erosion controls, and establishment of procedures for long-term monitoring programs. (ECF No.
831, PageID. 28011-28013). Future activities in the unit include operation, maintenance, and
continued monitoring.
b.

Operable Unit 3

OU3 covers roughly 23 total acres of the Superfund Site and includes the King Highway
Landfill, approximately 7 acres of former dewatering lagoons on the former KPC mill site, and the
King Street storm sewer. The King Highway lagoons received paper mill waste from the KPC Mill
from the late 1950s until 1977. KPC continued to deposit paper mill waste at the landfill from 1977

12

through 1997. Like the disposal areas in OU2, PCBs have migrated via erosion or surface water
runoff from the landfills into adjacent areas and the Kalamazoo River. (Tx. 2175 at 28-29). Erosion
of the landfills, in general, was discussed at trial by Mr. Hesse. Mr. Hesse testified that he observed
the landfills during his study with Dr. Knight and saw that they extended down to the water. (ECF
No. 829, PageID.27610).
A record of decision, or ROD, for OU3 was issued in 1998. (Tx. 6410). Georgia Pacific
conducted remedial response activities at OU3 from 1996 to 2003. The response activities included
the installation of sheetpiling, removal of PCB-contaminated soils, sediment, and paper residuals,
and the construction of a final cover system at the Landfill. (Tx. 2175, at 41-43). Georgia-Pacific
completed the final remedy for OU3 in 2003.
c.

Operable Unit 6

There is currently no OU6 in the Superfund Site. The former OU6 was located north of OU2,
across the Kalamazoo River. It included the former KPC and Hawthorne Mill properties.3 Mr.
Griffith testified that between 2000 and 2009 a removal action was conducted that removed residual
solids from the mill lagoons. After the completion of the work, Georgia Pacific petitioned the EPA
to have the mill property delisted from the Superfund Site. (ECF No. 831, PageID.28024-28025).
The petition was granted on June 30, 2009, after the EPA determined the mill property was no longer
a source of PCBs to the river. (Tx. 2175 at 7). Accordingly the EPA does not currently have an
OU6 at the Superfund Site. (Id.) If, however, investigations at any of the remaining paper mill

3

The Hawthorne mill was located along the Kalamazoo River between the Morrow Dam and
the river’s confluence with Portage Creek. The mill was a fine paper mill, but its owners state it did
not recycle NCR’s CCP. (Tx. 11786). The EPA has stated it is unclear whether de-inking occurred
at the mill. (Tx. 4118 at -668). PCBs were detected in a waste sludge discharge pipe at the mill.
(Id.). Georgia Pacific purchased the former mill property in 1978.
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properties result in a determination that those properties are a source of PCB contamination, the EPA
will designate that property as OU6. (Id.)
3.

Units Associated Mostly with Weyerhaeuser
a.

Operable Unit 4

OU4 is located on the west side of the Kalamazoo River immediately downstream from the
Plainwell Dam. OU4 includes the 12th Street Landfill, which is approximately 6.8 acres in size, and
other associated areas, all of which were contaminated by PCBs from NCR’s CCP. The landfill is
bordered by the Kalamazoo River and wetlands to the North. OU4 received paper mill waste, some
of which contained PCBs, from the Plainwell mill from approximately 1955 until 1981.4 The landfill
was closed in 1984. (Tx. 7821 at -991). Mr. Gross testified Weyerhaeuser Company completed the
remedial actions in OU4 in 2012, subject to ongoing operations and maintenance. (ECF No. 846,
PageID.29096; see also Tx. 7821 at -972).
b.

Operable Unit 7

OU7 encompasses 35 total acres and includes the former Plainwell mill property which is
located on the west side of the Kalamazoo River and upstream from the Plainwell dam. The unit is
further divided into three historical operational areas including the mill buildings and dewatering
lagoons that contained residual solids contaminated by PCBs. (Tx. 7815 at -001). Weyerhaeuser
has completed a Remedial Investigation / Feasibility Study for OU7 (Id.) and the EPA has issued a
Record of Decision (Tx. 8015). Mr. Gross testified Weyerhaeuser has already implemented some
of these remedial actions and will continue that work. (ECF No. 846, PageID.29097).

4

After the production period, residual solids from the lagoons were removed and placed in
the landfill.
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4.

The Unit Associated With all Parties: Operable Unit 5

OU5 is the river portion of the site. It includes the 80 miles of the Kalamazoo river and a 3
mile stretch of Portage Creek. OU5 is contaminated with NCR’s PCBs from the paper mills’
effluents.
For purposes of its removal and remediation activity, the EPA subdivided OU5 into seven
work areas. (Tx. 2175 at 76). Area 1 covers the lower portion of Portage Creek as well as a portion
of the Kalamazoo River from Morrow dam downstream to the Plainwell dam. Work Area 1 is
further subdivided into Area 1A for the stretch of Portage Creek from below the Bryant Mill dam
to Portage Creek’s confluence with the Kalamazoo River; Area 1B for the stretch of Kalamazoo
River between the Morrow dam and the confluence of Portage Creek with the Kalamazoo River; and
Area 1C for the stretch of the Kalamazoo River between the confluence of Portage Creek with the
Kalamazoo River down to the Plainwell dam. The EPA has approved the remedial investigation
report and feasibility study for Area 1.
The other areas are: Area 2 for the Kalamazoo River from Plainwell dam downstream to the
Otsego City dam; Area 3 for the Kalamazoo River from Otsego City dam downstream to Otsego
dam; Area 4 for the Kalamazoo River from Otsego dam downstream to Trowbridge dam; Area 5 for
the Kalamazoo River from Trowbridge dam downstream to Allegan City dam; Area 6 for Lake
Allegan; and Area 7 for the Kalamazoo River from Allegan dam downstream to Lake Michigan.
There have been several TCRAs conducted in order to remove PCB-impacted sediments and
flood plain soils from the river unit. (ECF No. 806, PageID.24939). Two TCRAs involved the
former Plainwell impoundment and Plainwell dam No. 2 impoundment.

The Plainwell

impoundment TCRA was funded by Georgia Pacific and Millennium Holdings LLC. Work began
15

in 2007 and was completed in 2009. The Plainwell dam No. 2 area TCRA began work in 2009 and
was completed in 2010. (Id.) Work on the third TCRA was completed in 2013 and covered PCBimpacted sediment in Portage Creek between the Bryant mill dam and the creek’s confluence with
the Kalamazoo River. A forth TCRA removed contaminated solids from the Bryant mill pond.
(ECF No. 875-10, PageID.31324).
Except for Area 1, the EPA has not finalized a remedy for any portion of OU5. Chase
Fortenberry, a project manager for the Superfund Site, testified that the EPA issued a ROD for Area
1 on September 28, 2015. (ECF No. 831, PageID.28057). The approved remedy includes removing
contaminated sediment and flood plain soils in the work area, engineering and institutional controls,
and monitored natural recovery. (Tx. 9881).
III. PROCEDURAL HISTORY
In 2010, Georgia Pacific brought this CERCLA action seeking recovery from International
Paper, NCR, and Weyerhaeuser for its past and future costs related to its investigation and cleanup
activities. The parties engaged in extensive factual and expert discovery over the next three years.
Given the size and complexity of the case, the Court bifurcated the trial into two phases. The Court
devoted Phase I to the determination of the parties’ liability under CERCLA. Phase II, which is at
issue here, focused on the allocation of damages among the responsible parties.
After a bench trial, the Court resolved Phase I by issuing an Opinion and Order on September
26, 2013. In that decision, the Court found all the parties were liable under CERCLA. (ECF No.
432). Both Georgia Pacific and Weyerhaeuser had acknowledged their responsibility as owners and
operators of de-inking mills during the production period, so the focus there was on the remaining

16

two parties. In the Phase I decision, the Court determined that both NCR and International Paper
were also liable: NCR as an arranger and International Paper as an owner or operator (or both). Id.
The Court held that NCR is liable as an arranger in this case because it supplied CCP broke
and trim to the de-inking mills, and the broke and trim contained PCBs. As a result, the mills used
the broke and trim as part of their repulping operations and released PCBs to the river. At least some
of the broke generated by NCR and its coaters reached the Superfund Site. (ECF No. 432,
PageID.12746-12747). Of course all, or virtually all, of the PCB-containing wastepaper is ultimately
traceable back to NCR because NCR developed and controlled the proprietary process for the PCBcontaining CCP.
The Court held that the PCB-containing waste was, at least originally, a product the paper
mills were willing to pay for as feed for their recycling businesses. But by no later than 1969, NCR
knew that the CCP scrap was not useful for a fully informed buyer. Rather, it was a worthless waste
product at best, and a serious environmental hazard and liability at worst. (Id. at PageID.1274312744). NCR did not disclose this knowledge to the paper industry. Instead it continued to sell CCP
broke and trim to brokers and recyclers even though it knew that the wastepaper was an
environmental and economic liability. More than that, NCR actively attempted to conceal the
hazards associated with CCP wastepaper from recyclers, the public, and the government by delaying
public announcement and minimizing the significance of what it was learning. (See id. at
PageID.12745). Even after an NCR-affiliate in the UK stopped circulating the waste in the UK,
NCR continued feeding the market in the U.S.
The Phase I decision also determined that International Paper is liable as an owner or operator
because it is the successor-in-interest to St. Regis, who was the owner of the Bryant Mill at a time
17

when the Mill was recycling CCP and thereby disposing of PCBs at the Superfund Site. (Id. at
PageID.12756). None of the ownership and disposal facts were seriously contested. Rather,
International Paper argued that St. Regis’s ownership fell within a statutory exception to ownership
held primarily to secure a loan. The Court found the exception inapplicable. (Id. at PageID.1275512756). As such, International Paper, as the successor-in-interest to St. Regis, qualified as the owner
of the Bryant mill for purposes of CERCLA liability. (Id. at PageID.12756).
Having determined liability, the matter proceeded to Phase II. There Georgia Pacific asked
the Court to determine the parties’ share of responsibility for its past costs as well as to allocate the
parties’ responsibility for future costs.
IV. Claimed Costs & Statute of Limitations
Before proceeding with the Phase II analysis, the Court will first discuss the total amount in
past costs Georgia Pacific avers it has spent before the Phase II trial. Then the Court will determine
the total approximate costs it concludes are not time-barred, are proper claimed costs under
CERCLA, and are consistent with the National Contingency Plan.
A.

Georgia Pacific’s Initial Claimed Costs
At trial, Roger Hilarides testified that Georgia Pacific was seeking to recover approximately

105.5 million dollars in response costs spent at the Superfund Site. (ECF No. 831, PageID.278986).
The chart below provides an overview by operable unit of the amounts Georgia Pacific claims to
have spent through September of 2014 and is seeking to recover in Phase II. (Tx. 2617).5

5

During Phase II, Mr. Hilarides testified that Georgia Pacific has spent an additional two to
three million dollars since September 2014 (ECF No. 831, PageID.27897). In filings after trial,
Georgia Pacific avers it has spent several million dollars more.
18

Cost Category

Location

1990 AOC

OU5-Central

$293,113.28

-

$293,113.28

1990 AOC

OU5-East

$406,860.72

$3,542.70

$403, 318.02

1990 AOC

OU5-General

$12,316,472.68

($395,165.46)

$11,921,307.22

1990 AOC

OU5-Portage Creek

$8,814.81

-

$8,814.81

1990 AOC

OU5-West

$2,895,276.57

($6,200.54)

$2,889,076.03

2007 Plainwell TCRA

OU5-West

$18,850,746.76

($1,025,000.00)

$17,825,746.76

2007 SRI/FS AOC

GeorgiaPacific’s OU5
Costs

Order

OU5-Central

$7,377,526.38

-

$7,377,526.38

2007 SRI/FS AOC

OU5-East

$8,524.61

-

$8,524.61

2007 SRI/FS AOC

OU5-General

$8,487,789.11

($89,357.02)

$8,398.432.09

$38,570.03

-

$38,570.03

$5,704,008.43

-

$5,704,008.43

2007 SRI/FS AOC

Costs

OU5-Portage Creek

Credits

Net Total

2007 SRI/FS AOC
2007 Termination AOC

OU5-General

$167,817.10

($94,001.36)

$73,815.74

2008 Response Cost
AOC

OU5-General

$1,845,000.00

-

$1,845,000.00

2009 Plainwell No. 2
TCRA

OU5-Central

$8,828,123.79

($1,999,496.75)

$6,828,627.04

N/A (Mead . RockTenn)

OU5-General

-

($1,581,250.00)

($1,581,250.00)

SUBTOTAL

Cost Category

OU5-West

$62,034,630.44

OU2

$4,434,433.48

-

$4,434,433.48

N/A (2007-2009 Costs)

OU2

$598,857.68

-

$598,857.68

2007 Termination AOC

OU2

$953.93

-

$953.93

2009 Consent Decree

OU2

$15,628,975.64

-

$15,628,975.64

SUBTOTAL

Cost Category

Location

1990 AOC

GeorgiaPacific’s OU2
Costs

Order

Costs

$20,663,220.73

Net Total

Order

Location

1990 AOC

GeorgiaPacific’s OU3
Costs

Costs

Credits

OU3

$5,960,703.58

-

$5,960,703.58

2000 AOC

OU3

$5,985,341.70

-

$5,985,341.70

SUBTOTAL

$11,946,045.28

19

Credits

Net Total

Cost Category

Order

Location

1990 AOC

GP Mill Property

2006 GP Mill Property
TCRA

GP Mill Property

2007 Termination AOC

GP Mill Property

N/A (Gould Paper
Corp. Settlement)

Costs

GP Mill Property

Credits

Net Total

Cost Category

($2,259.55)

$1,776,279.27

$3,611,485.47

-

$3,611,485.47

$3,017.18

-

$3,017.18

-

($100,000.00)

($100,000.00)

SUBTOTAL

GeorgiaPacific’s Mill
Property
(OU6) Costs

$1,778,538.82

$5,290,781.92

Ft. James Mill Property

$13,369.32

-

$13,369.32

1990 AOC

OU5-Central

$94,349.59

-

$94,349.59

1990 AOC

OU5-East

$103,254.21

($1,518.30)

$101,735.91

1990 AOC

OU5-General

$4,309,939.58

($9,636.49)

$4,300,303.09

1990 AOC

OU5-Portage Creek

$670.86

-

$670.86

1990 AOC

OU5-West

$1,099,968.95

($2,657.37)

$1,097,311.58

N/A (Rock-Tenn
Settlement)

OU5-General

-

($81,250.00)

($81,250.00)

SUBTOTAL

$5,526,490.35

TOTAL COSTS CLAIMED:
TOTAL CREDITS CLAIMED:

$110,852,504.26
($5,391,335.54)

NET TOTAL CLAIMED:

B.

Location

1990 AOC

Ft. James’s
Costs

Order

Costs

Credits

Net Total

$105,461,168.72

Statute of Limitations
In 2014, on the eve of the Phase II trial, the Sixth Circuit clarified the relevant statute of

limitations for filing an action for contribution under Section 113(f). In Hobart Corp. v. Waste
Management of Ohio, Inc., the Sixth Circuit held that:
Actions for contribution under § 113(f) must be filed within three
years of “(A) the date of judgment in any action under [CERCLA] for
recovery of such costs or damages, or (B) the date of an
administrative order under [§ 122(g)] (relating to de minimis
settlements) or [§ 122(h)] (relating to cost recovery settlements) or

20

entry of a judicially approved settlement with respect to such costs or
damages.”
758 F.3d 757, 763 (6th Cir. 2014) cert. denied, 135 S. Ct. 1161 (2015). Moreover, the Sixth Circuit
held that responsible parties must seek reimbursement in the form of a contribution action under
Section 113(f), rather than a direct cost recovery under Section 107 if they met one of Section 113’s
statutory triggers. Id. at 767.
Based on the Sixth Circuit’s holding in Hobart, the Defendants moved for summary
judgment. The Defendants argued that prior litigation in 2010, to which Georgia Pacific was a party,
triggered the company’s obligation to assert Section 113(f) contribution claims against Defendants
within three years of that date. Therefore, Defendants argued all of Georgia Pacific’s claims were
now time-barred. In the alternative, Defendants claimed that several administrative agreements
entered into by Georgia Pacific (1990 AOC, 2006 ASAOC, 2007 ASAOC for RI/FS, and the 2007
ASAOC for Plainwell) triggered the statute of limitations period, resulting in at least some of the
contribution claims being time-barred.
On August 12, 2015, this Court issued its Order on Defendants’ motions for summary
judgment. (ECF No. 787). The Court held that the 2010 litigation did not trigger Georgia Pacific’s
duty to assert its claims under Section 113(f), and that its claims were therefore not time-barred in
their entirety. As to the costs associated with the administrative agreements, the Court held that the
1990 AOC by itself, and even when read in conjunction with the 2007 Order by Consent, did not
constitute “administrative settlements” for purposes of triggering the Section 113 three-year statute
of limitations. As such, the Court denied Defendants’ motion for summary judgment relating to
Georgia Pacific’s costs under the 1990 AOC for removal actions in OU5, OU2, and OU6. These
costs were not time-barred in a Section 107 cost-recovery action. Similarly, the expenses related to
21

OU3 were not time-barred under Section 113 because the contribution statute did not trigger them.
However, under the timing rules for Section 107, the OU3 costs were time-barred, as even Georgia
Pacific conceded, so the Court entered summary judgment on those costs.
As to the costs associated with the 2006 ASAOC, 2007 ASAOC for RI/FS, and the 2007
ASAOC for Plainwell, the Court held that those agreements constituted “administrative orders” for
purposes of Section 113’s statute of limitations under the Sixth Circuit’s holding in Hobart.
Therefore, the statute of limitations on Georgia Pacific’s claims under these agreements had run, and
the Court granted summary judgment for costs falling under those agreements to the Defendants.
C.

Claimed Costs After the Statute of Limitations Ruling
After the Phase II trial, Georgia Pacific amended its cost calculations. Per Georgia Pacific’s

post-trial briefing, the Court’s Order on Defendants’ motions for summary judgment resulted in the
following costs (net of credits) being time-barred (ECF No. 882, PageID.31888):
Category

Cost

2007 Plainwell TCRA

$17,825,746.76

2007 SRI/FS

$21,523,518

2006 GP Mill Property TCRA

$3,511,486

OU3 Costs

$11,946,045
Total:

$54,806,796.35

The chart below updates the earlier chart of the amounts Georgia Pacific claims it has spent
by operable unit by adding in those costs that are now time-barred:

22

Cost
Category

Costs

OU5-Central

$293,113.28

-

$293,113.28

-

$293,113.28

1990 AOC

OU5-East

$406,860.72

($3,542.70)

$403,318.02

-

$403,318.02

1990 AOC

OU5-General

$12,316,472.68

($395,165.46)

$11,921,307.22

-

$11,921,307.22

1990 AOC

OU5-Portage
Creek

$8,814.81

-

$8,814.81

-

$8,814.81

1990 AOC

OU5-West

$2,895,276.57

($6,200.54)

$2,889,076.03

-

$2,889,076.03

2007 Plainwell
TCRA

OU5-West

$18,850,746.76

($1,025,000.00)

$17,825,746.76

($17,825,746.76)

$0.00

2007 SRI/FS AOC

OU5-Central

$7,377,526.38

-

$7,377,526.38

($7,377,526.38)

$0.00

2007 SRI/FS AOC

OU5-East

$8,524.61

-

$8,524.61

($8,524.61)

$0.00

2007 SRI/FS AOC

OU5-General

$8,487,789.11

($89,357.02)

$8,398,432.09

($8,398,432.09)

$0.00

2007 SRI/FS AOC

OU5-Portage
Creek

$38,570.03

-

$38,570.03

($38,570.03)

$0.00

2007 SRI/FS AOC

OU5-West

$5,704,008.43

-

$5,704,008.43

($5,704,008.43)

$0.00

2007 Termination
AOC

OU5-General

$167,817.10

($94,001.36)

$73,815.74

-

$73,815.74

2008 Response
Cost AOC

OU5-General

$1,845,000.00

-

$1,845,000.00

2009 Plainwell
No. 2 TCRA

OU5-Central

$8,828,123.79

($1,999,496.75)

$6,828,627.04

N/A (Mead/RockTenn

OU5-General

-

($1,581,250.00)

($1,581,250.00)

-

SUBTOTAL

Cost
Category

Location

1990 AOC

GeorgiaPacific’s
OU5 Costs

Credits

$62,034,630.44

($39,352,808.30)

Credits

Net Claim

Time Barred

Time Barred

$1,845,000.00
-

-

$6,828,627.04
$1,581,250.00

$22,681,822.14

Net
Recoverable

Order

Location

1990 AOC

Georgia
Pacific’s
OU2 Costs

Costs

Net Claim

Net
Recoverable

Order

OU2

$4,434,433.48

-

$4,434,433.48

-

$4,434,433.48

NA (2007 - 2009
Costs)

OU2

$598,857.68

-

$598, 857.68

-

$598,857.68

2007 Termination
AOC

OU2

$953.93

-

$953.93

-

$953.93

2009 Consent
Decree

OU2

$15,628,975.64

-

$15,628,975.64

-

$15,628,975.64

23

SUBTOTAL

Cost
Category

Credits

Net Claim

($0)

$20,663.220.73

Net
Recoverable

Location
OU3

$5,960,703.58

-

$5,960,703.58

($5,960,703.58)

$0

2000 AOC

OU3

$5,985,341.70

-

$5,985,341.70

($5,985,341.70)

$0

SUBTOTAL

Cost
Category

Order
1990 AOC

Georgia
Pacific’s
OU3 Costs

Costs

$20,663.220.73

$11,946,045.28

($11,946,045.28)

$0

Credits

Net Claim

Time Barred

Net
Recoverable

Location
GP Mill Property

$ 1,778,538.82

($2,259.55)

$1,776,279.27

-

$1,776,279.27

2006 GP Mill
Property TCRA

GP Mill Property

$3,611,485.47

-

$3,611,485.47

($3,611,485.47)

$0

2007 Termination
AOC

GP Mill Property

$3,017.18

-

N/A/ (Gould Paper
Corp. Settlement)

GP Mill Property

-

($100,000.00)

($100,000.00)

-

($100,000.00)

SUBTOTAL

Cost
Category

Order
1990 AOC

Georgia
Pacific’s
Mill
Property
(OU6) Costs

Costs

Time Barred

5,290.781.92

($3,611,485.47)

$1,679,296.45

Credits

$3,017.18

Net
Recoverable

Order

Location
Ft. James Mill
Property

$13,369.32

-

1990 AOC

OU5-Central

$94,349.59

-

$94,349.59

-

$94,349.59

1990 AOC

OU5-East

$103,254.21

($1,518.30)

$101,735.91

-

$101,735.91

1990 AOC

OU5-General

$4,309,939.58

($9,636.49)

$4,300,303.09

-

$4,300,303.09

1990 AOC

OU5-Portage
Creek

$670.86

-

$670.86

-

$670.86

1990 AOC

OU5-West

$1,099,968.95

($2,657.37)

$1,097,311.58

-

$1,097,311.58

N/A (Rock-Tenn
Settlement)

OU5-General

-

($81,250.00)

($81,250.00)

-

($81,250.00)

SUBTOTAL

$5,526,490.35

-

$5,526,490.35

24

Net Claim

-

1990 AOC

Fort James’s
Costs

Costs

$3,017.18

$13,369.32

Time Barred

-

$13,369.32

TOTAL COSTS CLAIMED
TOTAL CREDITS CLAIMED
NET CLAIMED

$110,852,504.26
($5,391,335.54)
$105,461,168.72

TIME BARRED
NET RECOVERABLE

($54,910,339.05)
$50,550,829.67

Based on its amended cost calculations, The Court finds Georgia Pacific currently seeks a net
recovery of approximately $50,650,829.67 in non-time-barred past costs.6
D.

Consistency with NCP
Having determined the amount of non time-barred past costs that Georgia Pacific seeks to

recover, the Court moves on to determine whether all those past costs may be recovered under
CERCLA. Specifically, in order to recover under CERCLA, a private plaintiff bears the burden
of showing by a preponderance of the evidence that the costs it seeks are necessary and consistent
with the EPA’s National Contingency Plan. See 42 U.S.C. § 9607(a)(4)(B). “A cleanup will be
consistent . . . if, taken as a whole, it is in ‘substantial compliance’ with 40 C.F.R. § 300.700(c)(5)(6), and results in a “CERCLA-quality cleanup.” Franklin Cty. Convention Facilities Auth. v. Am.
Premier Underwriters, Inc., 240 F.3d 534, 543 (6th Cir. 2001).
A “CERCLA-quality cleanup” is a response action that (1) protects
human health and the environment, (2) utilizes permanent solutions
and alternative treatment technologies or resource recovery
technologies to the maximum extent practicable, (3) is
cost-effective, (4) satisfies Applicable and Relevant or Appropriate

6

The Court’s calculation of the time-barred costs relating to the 2007 SRI/FS AOC differs
slightly from the costs that Georgia Pacific provided in its Post Phase II Trial Brief (ECF No. 882,
PageID.31888) and in its proposed findings of fact (ECF No. 883, PageID.32089). The Court uses
the numbers as provided by Georgia Pacific in its Proposed Findings of Fact (ECF No. 801) and
applies the statute of limitations consistent with its ruling. There are a lot of moving parts, and some
amounts may be misclassified. As stated below, the Court will require the parties to submit a
Proposed Judgment consistent with its allocation ruling, which may clarify and correct–or at least
frame disputes–over any necessary adjustments.
25

Requirements (“ARARS”) for the site, and (5) provides opportunity
for meaningful public participation.
Id.
Several witness for Georgia Pacific, such as Roger Hilarides, described the costs incurred
and how those were handled and documented. Mr. Hilarides testified that Georgia Pacific began
tracking its costs in 1990 with the formation of the Kalamazoo River Study Group and that
Georgia Pacific regularly made entries in its databases to record and preserve the response costs
it incurred at the Superfund Site. (ECF No. 831, PageID.27890). Mr. Hilarides testimony is
supported by the testimony of Garry Griffith, who stated he would review invoices from Georgia
Pacific’s contractors to make sure they were consistent with the agreement that applied to the
work, and then submit the invoice to his supervisor. Once the invoice was approved by the
supervisor, it was submitted for payment, which would be recorded in Georgia Pacific’s databases.
(ECF No. 831, PageID.28001-28002). Mr. Saric also testified the EPA approved several cleanup
actions and that the EPA believed each of them was reasonable and necessary. (ECF No. 875,
PageID.31320-21).
The Court finds that Georgia Pacific has established by a preponderance of the evidence
that it incurred reasonable costs that were consistent with the NCP. In fact, nearly all of the non
time-barred past costs incurred by Georgia Pacific at the Superfund Site are necessary and
consistent with NCP. The costs are well documented and are in substantial compliance with the
regulations. There are two exceptions. At trial, Dr. David Johns, a witness for Weyerhaeuser,
identified $643,889 in costs Georgia Pacific incurred to study natural resource damages. (ECF No.
849, PageID.29530-29532; see also Tx. 8054). This amount was “essentially the same” as that
found by NCR’s witness, Jeffrey Zelikson. (ECF No. 861, PageID.30614). The Court has held
26

that natural resource damages are outside the scope of this case. (ECF No. 547, PageID.15191).
The Court credits Dr. Johns and Mr. Zelikson’s testimony on this point and so approximately
$643,889 in general costs for Operating Unit 5 are removed from what Georgia Pacific can recover
from other parties in this action. Mr. Zelikson also identified $340,059 in costs that are more
properly described as advocacy than response costs. (ECF No. 861, PageID.30615). The Court
credits this testimony as well and therefore a further amount of $340,059 in general costs are also
removed from what Georgia Pacific may recover.
Both Dr. Johns and Mr. Zelikson, as well as other witnesses for the Defendants such as
Raymond Dovell and Robert Rock, identified additional response costs that the Defendants
contend were not adequately documented and /or are not necessary and consistent with NCP. The
Court is not persuaded by this testimony. NCP is not a high bar, and the burden on Georgia Pacific
to show consistency with NCP is simply a preponderance of the evidence. The argument Georgia
Pacific advanced on cross with these witnesses was that there was enough information
documenting its incurred costs from the context of the materials and invoices submitted and
maintained, and the Court agrees. Furthermore, once consistency with NCP is established,
CERCLA defendants are usually subject to joint and several liability. Thus to the extent the
parties seek further detail of allocation by area, it is up to the defendants to carve up the costs and
establish divisibility, if they can.
Finally, Georgia Pacific has received insurance payments to help cover liability costs at 23
sites, including the Kalamazoo River. The other parties would have that amount taken away from
what Georgia Pacific can seek in reimbursement to avoid a possible double recovery by Georgia
Pacific. NCR offered the testimony of Professor Ken Abraham who stated that Georgia Pacific

27

received a total of $69,852,000 in insurance proceeds associated with its settlements. Professor
Abraham provided information on how insurance payments worked, and the role that offsets play
to prevent double recovery. (ECF No. 861, PageID.30633-30634). The Court does not see the
concern of double recovery present in this case. There is no risk of double payment because: 1)
Georgia Pacific has incurred costs that, by operation of the Court’s statute of limitations ruling,
it is not able to recover from the parties in sums that would amount to double payment; and 2) the
insurance settlement involved over 20 sites that are not part of this case. Furthermore, Georgia
Pacific paid insurance premiums to help cover events like this, and it encourages prudent insurance
coverage to allow the company to receive at least some benefit from the coverage it paid for.
Accordingly the Court finds a total of approximately $983,948 in claimed costs are not
necessary and consistent with NCP. Accounting for the previous calculations, the Court finds a
total past cost amount of approximately $49,666,881.67 that is non-time-barred and consistent with
NCP. With the total amount of recoverable past costs established, the Court moves on to the
parties’ arguments on whether that amount is divisible, and how it should be allocated.
V. SUMMARY OF THE PARTIES’ CONTENTIONS
Georgia Pacific acknowledges that the paper mills appropriately bear some responsibility
for cleanup, but insists the most culpable wrongdoer is NCR. NCR developed the PCB-containing
paper and fed it into the repulping stream. It continued to do this even after it learned of the risks,
and the mills did not. In fact, Georgia Pacific believes NCR concealed what it knew and this
makes NCR uniquely culpable (and principally responsible) for its costs. Georgia Pacific further
contends the mills’ responsibility should be apportioned principally on volume estimates because
precise calculations, such as year by year discharge calculations, are not possible. Finally, Georgia

28

Pacific suggests that any allocation to Georgia Pacific should reflect credit for its proactive and
constructive engagement with the authorities, and its overall efforts to address PCB contamination
at the Superfund Site.
NCR disputes the basis for arranger liability. But even assuming it is an arranger, NCR
says its share of responsibility must be limited to the factual premises of its liability and
apportioned accordingly. In NCR’s view, only a small fraction of CCP can even arguably be traced
from NCR to the Kalamazoo Valley, and the majority of NCR’s broke and trim was recycled at
the Fox River. Applying layers of mathematical analysis, NCR isolates its maximum exposure to
2% of the total PCB load in the Superfund Site. And even as to this load, NCR contends that the
paper mills are more culpable than NCR because the mills were the parties that actually put the
waste into the river. Finally NCR contends that any allocation must take into account the
operational decisions of the paper mills, and the fact that the mills benefitted from recycling CCP.
International Paper also contests the basis for its liability as successor to St. Regis. But
even assuming it’s liable, International Paper says it is not an actively culpable party. Rather, it
is simply a technical legal successor to a mill operation that discharged to a tributary creek and to
the Bryant mill pond where most of the solids settled. According to International Paper, the
operation of the mill pond meant that most of the PCBs International Paper is responsible for never
reached the Kalamazoo River. Moreover, International Paper says its predecessor’s loading was
nowhere near as high as other parties suggest. And International Paper further argues Georgia
Pacific’s laches uniquely harmed it. Based on all these considerations, and more, International
Paper argues it should receive only a minimal allocation.

29

Weyerhaeuser admits liability, but says it has already contributed more than it could
possibly be responsible for based on any rational allocation of past costs because it is accountable
only for the Plainwell mill’s discharges, and all parties agree the mill discharged significantly less
effluent than the other mills. Weyerhaeuser states it has already paid over $10 million to clean
up the area by the Plainwell operation. This is more than enough, it says, to cover whatever
allocation could fairly be made against it.
VI. PHASE II ANALYSIS
A.

Legal Standards
1.

CERCLA Cost Recovery and Contribution

CERCLA has two cost-shifting provisions that have been invoked in this case. Section 107
provides a mechanism for recovery of costs incurred by either the government or a private party.
42 U.S.C. § 9607(a). In cost recovery actions, defendants are usually subject to joint and several
liability if the plaintiff has shown that reasonable costs incurred were consistent with the National
Contingency Plan of the U.S. Environmental Protection Agency (“EPA”). However, if a defendant
shows that a harm is divisible or capable of apportionment, the defendant is only severally liable
for its share of the harm. To show divisibility, a defendant must show that: 1) a harm is
theoretically capable of apportionment; and 2) the record supports a reasonable basis for
apportionment in that particular case. Burlington Northern and Santa Fe Ry. Co. v. United States,
556 U.S. 599, 615 (2009).
Section 113 provides for equitable contribution of costs from one party to another “using
such equitable factors as the court determines are appropriate.” 42 U.S.C. § 9613(f)(1).
Contribution can be sought by a person liable under Section 107 or a person who has entered an

30

administrative or judicially approved settlement. 42 U.S.C. § 9613(f). CERCLA was intended to
“facilitate the prompt cleanup of hazardous waste sites by placing the ultimate financial
responsibility for cleanup on those responsible for hazardous wastes.” Kalamazoo River Study
Grp. v. Menasha Corp., 228 F.3d 648, 652 (6th Cir. 2000). Courts use equitable factors to
encourage those goals by allocating costs appropriately among liable parties. Id. at 656.
Courts in the Sixth Circuit have sometimes turned to non-exhaustive lists of equitable
factors to help in this exercise. For example, the Gore factors direct a court to look at:
•

The ability of the parties to demonstrate that their contribution to a discharge, release, or
disposal of a hazardous waste can be distinguished;

•

The amount of the hazardous waste involved;

•

The degree of involvement by the parties in the generation, transportation, treatment,
storage, or disposal of the hazardous waste;

•

The degree of care exercised by the parties with respect to the hazardous waste concerned,
taking into account the characteristics of such hazardous waste; and

•

The degree of cooperation by the parties with the Federal, State, or local officials to prevent
any harm to the public health or environment.

Centerior Serv. Co. v. Acme Scrap Iron & Metal, 153 F.3d 344, 354 (6th Cir. 1998). Similarly,
the Torres factors focus the analysis on:
•

The extent that clean-up costs are attributable to a specific party;

•

The party’s level of culpability;

•

The degree to which the party benefitted from the disposal of the waste; and

•

The party’s ability to pay its share of the cost.

United States v. Consol. Coal Co., 345 F.3d 409, 413 (6th Cir. 2003). In summary, a court has
broad discretion to promote the goals of CERCLA when handling contribution claims. Id.

31

2.

Disentangling Cost Recovery and Contribution

Courts have long struggled to disentangle claims under Sections 107 and 113 of CERCLA.
See Hobart Corp. v. Waste Management of Ohio, Inc., 758 F.3d 757, 766-67 (6th Cir. 2014). The
Sixth Circuit has said that the two avenues are mutually exclusive, and that contribution under
Section 113 is the appropriate mechanism when it is available. Id. at 767. Courts have cautioned
against “slicing and dicing” costs between cost recovery and contribution. NCR Corp. v. George
A. Whiting Paper Co., 768 F.3d 682, 692 (7th Cir. 2014); Ford Motor Co. v. Michigan Cons. Gas
Co., No. 08-13503, 2015 WL 540253 at *12 (E.D. Mich. Feb. 10, 2015). Although Section 107
and Section 113 are both at play in this case, the ultimate outcome is driven by the equitable
allocation among the parties, so the Court focuses on the facts relevant to that analysis.7
B.

Overview of the Court’s Phase II Ruling
These are the Court’s Phase II findings and conclusions, in summary form:
1.

The contaminant of concern in the Kalamazoo River is PCBs. PCB loads are what
drive the need to remediate the river, and the costs of investigation and cleanup to
date.

2.

As found in Phase I, all of the parties before the Court are liable parties under
CERCLA. The record in Phase II has reinforced that finding.

3.

No party is uniquely culpable for PCBs in the Kalamazoo River that have required
a massive and ongoing cleanup effort. Each party played a significant role in
creating and perpetuating the PCB pollution at the Superfund Site.

4.

The Court finds no convincing basis for divisibility of harm in the river system. In
particular the Court rejects NCR’s attempt to mathematically segment its
responsibility to a tiny fraction of the PCB loading. To the extent a party’s
geographic activity in the river system–International Paper in the Portage Creek

7

To the extent cross or counter claims for contribution have not been adequately pled, the
Court would exercise its discretion under FED. R. CIV. P. 15(a)(2) to allow amendment of the
pleadings.
32

tributary, and Weyerhaeuser downstream in Plainwell–affect equitable
responsibility for costs, the Court’s allocation of the past costs accounts for it.
5.

C.

The Court’s allocation is for past costs only. The allocation may well inform
allocation of future costs, but the Court finds the present record insufficient to
provide any reasonable and equitable basis for apportioning costs yet to be
incurred. The Court will enter a declaratory judgment holding all parties liable, but
leave for future proceedings determination and allocation of the future costs.

Explanation of Findings and Conclusions
1.

The contaminant of concern in the Kalamazoo River is PCBs. PCB loads are what
drive the need to remediate the river, and the costs of investigation and cleanup to
date.

In a sense, it is easy to reach the conclusion that PCBs are the contaminant of concern at
the Superfund Site. The parties in fact agree on this point (ECF No. 806, PageID.24937) and this
admission was reinforced by the testimony of several witnesses including James Saric of the EPA
(ECF No. 875-10, PageID.31310), Paul Bucholtz of the MDEQ (ECF No. 875-11, PageID.31345),
Garry Griffith, a former Georgia Pacific project manager (ECF 831, PageID.28010), and Scott
Cornelius, who also worked as a project manager at the Superfund Site. (ECF No. 852,
PageID.29656). Exhibits introduced at trial similarly establish PCBs are the contaminant of
concern. (See, e.g., Tx. 2463). Clearly PCB pollution is what is driving remedial efforts at the
Superfund Site. Furthermore, the presentations during Phase II established the major source of
PCBs at the Site is the effluent from the de-inking mills that recycled NCR’s CCP. (See Tx. 2464
at -953). Mr. Saric testified that the EPA agrees wastewater from the paper mills that recycled
CCP was the “major historical source” of PCBs. (ECF No. 875-10, PageID.3122).
But in another sense the issue is more complicated because not all PCBs are the same.
NCR argues that more than a nominal amount of PCBs in the river–up to 25%–did not come from
NCR’s CCP emulsion. And NCR contends that other pollutants in the paper mills’ effluents are
33

very much relevant in apportioning responsibility. The Court is satisfied that NCR’s CCP accounts
for by far the greatest volume of PCBs in the Kalamazoo River, and that any PCB contribution
from other sources has had a negligible impact on investigation and cleanup costs to date. There
has been no reliable showing that there was any significant contributor of PCBs to the Superfund
Site other than from the paper mills. NCR witness, John Butler, admitted as much when he
testified at trial he had not seen documentation of any other source of PCBs to the river other than
from the paper mills. (ECF No. 965, PageID.30984-30985). Therefore, regardless of how
ubiquitous PCBs may have been during the production period, at this Superfund Site, the paper
mills are the only known source of PCBs.
Accordingly, the PCBs from the paper mills’ effluent are a hazardous substance and
possible carcinogen. They are what led the EPA to place the Kalamazoo River on the National
Priority List and are driving the investigation and cleanup costs.
2.

As found in Phase I, all of the parties before the Court are liable parties under
CERCLA. The record in Phase II has reinforced that finding.

In Phase I, the Court concluded all of the parties are liable under CERCLA as an arranger
or as owners, operators, or both. Nothing in the presentations in Phase II cause the Court to
question that conclusion. The evidence presented at Phase II in fact buttresses the Phase I ruling
that all parties are liable under CERCLA. Since Georgia Pacific and Weyerhaeuser admitted they
were liable in Phase I, here it is only necessary to discuss NCR and International Paper.
a.

NCR

In its earlier decision, the Court concluded NCR had a hand in all of the CCP that was
responsible for the PCB contamination at the Kalamazoo River Superfund Site, and that NCR
knew “no later than March of 1969” that the PCBs in its CCP had dangerous properties. At least
34

by that point, no fully informed paper mill would elect to purchase CCP broke and trim as a useful
product. (ECF No. 432, PageID.12746).
In Phase II, NCR tried to move this date forward by offering evidence to try to show that
Monsanto, the manufacturer of PCBs, was still insisting during the production period that PCBs
did not threaten the environment or human health. For example, at trial NCR pointed to a letter
dated near the end of the production period–February 9, 1970–from Monsanto to its customers.
Monsanto’s letter acknowledged the then recent press reports about studies that had discovered
PCBs in the environment. (Tx. 4424 at -733). Monsanto admitted that the PCBs in these reports
“strongly resemble[d]” its Aroclors 1254 and 1260. But Monsanto went on to assure its customers
that PCBs with a chlorine content of less than 54 percent, which implicitly includes Aroclor 1242,
had not been found in the environment and did not appear to present a potential problem to the
environment. (Id.) NCR also called several experts whose testimony largely overlapped with the
Court’s Phase I evidence. Marcia Williams’ testimony, for example, was that PCB use during the
production period was ubiquitous, and that it would not have been reasonable to conclude during
this period that Aroclor 1242 posed a material risk of environmental harm to water bodies. (ECF
No. 854, PageID.29940; see also Tx. 12572). The other parties, and especially, Georgia Pacific,
responded by citing several communications within NCR and Monsanto, and calling witnesses
such as Dr. Joe Rodricks, Dr. Vodden, Dr. Paton, and Dr. James Kittrell, all in an attempt to show
that NCR dragged its feet about switching from PCBs to a more expensive alternative even as it
was increasingly aware that its PCBs were toxic.
In accord with the Phase I Opinion, the Court finds that NCR knew at least by the late
1960s that its CCP broke was, at best, not a useful product for a fully informed paper mill and, at

35

worst, a serious environmental hazard. Georgia Pacific laid out a time line that helps place the
Monsanto letter in context and provides a solid foundation that reinforces NCR’s liability as an
arranger. For example, Dr. Vodden testified at his deposition about his communications with NCR
and that the concerns with PCBs at the time were not driven by their toxicity, but rather by the
uncertainty of what might happen if PCBs were allowed to continue to accumulate in the
environment. (ECF No. 875-8, PageID.31284; see also Tx. 2286, 2983). Dr. Kittrell also testified
that NCR knew as early as 1954 that “free” Aroclor 1242, that is PCBs that were not encapsulated,
could be toxic and that NCR knew that the capsules were ruptured in the repulping process. (ECF
No. 830, PageID.27709-27710 (citing Tx. 1357)). All this strengthens the Court’s Phase I
conclusion.
By reaching this determination, the Court necessarily rejects any attempt to relitigate Phase
I.
In the Court’s mind Phase II must build off of the factual findings and conclusions from
Phase I. Any overlap from Phase I must be read in that context. Phase II is not an opportunity to
relitigate Phase I. Ms. William’s testimony focused on re-weighing the evidence and performing
a retrospective analysis that at least implicitly undermined, or tried to undermine, Phase I
conclusions. The matter at hand, however, is on the current problem of PCBs in the Superfund
Site and the only question now is how to divide the cost. The Court remains satisfied that NCR
is liable as an arranger in this case.
b.

International Paper

In Phase I, the Court found that Georgia Pacific had not shown by a preponderance of the
evidence that PCBs were discharged by the Bryant mill between 1946 and June 30, 1956, the

36

period when International Paper’s predecessor actually operated the mill. (ECF No. 432,
PageID.12749-12750). But the Court concluded there was no question that Georgia Pacific met
its burden of showing that PCBs were discharged by the Bryant mill between July 1956 and 1966,
the period when the mill was operating under International Paper’s predecessor. The Phase II
presentations reinforced this conclusion. Witnesses such as Mr. Hesse and Dr. Woodard described
the pollution from the Bryant Mill that entered Portage Creek and the Kalamazoo River. Thus
International Paper is responsible for its predecessor, who owned one of the large mills while
thousands of pounds of PCBs were being released to the site.8
3.

No party is uniquely culpable for PCBs in the Kalamazoo River that have required
a massive and ongoing cleanup effort. Each party played a significant role in
creating and perpetuating the PCB pollution at the Superfund Site.

The three paper mills largely agree that NCR should be found uniquely culpable in this
action because NCR developed the CCP emulsion containing Aroclor 1242. They believe NCR
is also uniquely culpable because NCR encouraged the paper mills to continue recycling its CCP
while NCR was hiding the growing body of evidence that Aroclor 1242 was toxic. NCR
employees admitted as much, Georgia Pacific argues, in an October 24, 1975, memo that stated
the paper mill “recycling companies are the innocent victims of circumstances created by” CCP
manufacturers. (Tx. 1625).

8

Much of the evidence of releases in the case is based, at least in part, on mediation
questionnaires filled out in earlier litigation, and later certified and submitted to regulators as Section
104(e) responses. Experts for each party relied on these questionnaires. International Paper objects
to admission of the questionnaires on hearsay grounds. The Court finds that the questionnaires are
the type of facts or data “experts in a particular field would reasonably rely on . . . in forming an
opinion on the subject.” FED. R. EVID. 703. They properly come into evidence under Rule 703 to
assist in evaluating the strength of the opinion testimony on loading.
37

According to Georgia Pacific, NCR accumulated knowledge about the hazards of PCBs
throughout the production period and that knowledge is sufficient to find NCR uniquely culpable
for the PCBs at the Superfund Site. Georgia Pacific’s time line begins in 1960. By this point,
Georgia Pacific argues that NCR should have been aware of the toxicity of free PCBs and that
recycling NCR broke would contaminate food. Five years later, in 1965, Georgia Pacific contends
NCR continued to sell its CCP broke, despite “definitely” being aware, according to Dr. Rodricks,
that there was a risk of contaminating paper that could be used in food contact. (ECF No. 828,
PageID.27386-28387). A year later, Dr. Sören Jensen discovered that PCBs persisted in the
environment (Tx. 1458) and in 1967 Monsanto sent a copy of Dr. Jensen’s lecture to NCR. (Tx.
1466). Scott Tucker, a former Monsanto employee, testified at his deposition that he was asked
to review Jensen’s work and found it to be valid and the information produced to be real. (ECF
No. 875-12, PageID.31358). Then, by October 28, 1969, Monsanto began to consider effluents
from re-pulping mills as a source of PCBs in the environment. (Tx. 1521).
In the following years, Georgia Pacific contends NCR continued to promote its broke
despite growing press and governmental inquiries. NCR in fact urged Monsanto to delay any
disclosures and align the parties’ stories. (ECF No. 882). According to Georgia Pacific, Monsanto
resisted NCR’s efforts and on April 13th, 1970, Monsanto finally suggested sending a warning
about its Aroclors, including Aroclor 1242, to Monsanto customers. (Tx. 4828). The warning
stated studies had found PCBs were an environmental contaminant and that extreme care should
be taken to prevent entry of the product into the environment. (Tx. 1644). Notwithstanding that
warning, Georgia Pacific argues NCR continued to supply its CCP emulsion to its coaters until
May 25, 1971. (ECF No. 432, PageID.12745).

38

For its part NCR, through the testimony of witnesses like Scott Cornelius, contends that
it never hid its knowledge about PCBs to the mills. Furthermore, NCR avers it would not have
mattered how much of the available information was shared with the mills because their behavior
throughout this period indicates the mills would have discharged PCBs to the river regardless of
what the mills knew. This is because the mills discharged other pollutants they knew to be toxic,
and because the mills benefitted economically from delaying implementation of treatment systems.
According to NCR, the mills treated the Kalamazoo River and Portage Creek as open
sewers throughout the production period with little regard for the environment. (ECF No. 885,
PageID.32677 (citing ECF No. 840, PageID.28654)). Dr. Allen, one of NCR’s witnesses, testified
that the paper mills in the Kalamazoo River Valley discharged roughly 800 million pounds of total
suspended solids to the Superfund Site. (ECF No. 861, PageID.30510). NCR’s briefing also
references an article from Professor Frank Emerson who wrote that in the mid 20th century the
paper mills “ were, in effect, using the [Kalamazoo] River as a free sewer for the disposal of
wastewaters bearing a large load of inorganic and biodegradeable materials.” (Tx. 4350 at 188).
Professor Emerson went on to write that “there was much evidence of septic action. Gas eruptions
from the water gave the appearance of splashes of raindrops all about. Chunks of sludge, varying
in size up to that of a platter, were raised from the bottom of the river by gases.” (Id. at 191).
During trial, NCR called other witnesses like James Pope, who described the Kalamazoo River
as a “dead river.” Mr. Pope testified the river was “virtually totally white from the titanium
dioxide used in the paper mill process.” Furthermore “there was evidence of sludge building up,
breaking up from the bottom of the river.” (See ECF No. 854, PageID.29868).

39

NCR goes on to argue that the paper mills saved substantial sums by delaying the
implementation of primary and secondary treatment systems. (ECF No. 867, PageID.3111631117). Even when the mills finally installed waste-treatment systems, NCR argues, the mills
routinely bypassed those systems. Robert Barrick, for example, testified that bypassing was a
considerable issue at the Bryant mill. (ECF No. 863, PageID.30741). Mr. Pope similarly testified
that during the 1960s, bypass was a “major problem” at the paper mills. (Id. at 29873-29874). Dr.
Woodard, on cross examination, agreed that bypasses were a problem at all of the Kalamazoo
mills. (ECF No. 840, PageID.28603-28604; see also Tx. 4309). Other discharges came through
the mills’ landfills that were created near, and sometimes on, the Kalamazoo River. Both Dr.
Wolfe and Mr. Hesse testified about erosion from the landfills into the river. (ECF No. 829,
PageID.27632; ECF No. 838, PageID.28265). Mr. Hagen expanded on this testimony and testified
the landfills released PCBs into the Kalamazoo River. (ECF No. 856, PageID.30191).
NCR claims that this disregard by the mills shows there is little doubt the mills would not
have change their recycling practices regardless of whether the paper mills had access to the
available knowledge of PCBs. There was little to discourage them from doing so, and not even
a 1929 Michigan law that made it a criminal offense “for any person to discharge or permit to be
discharged into any of the lakes, rivers, streams, or other waters of this state any waste or pollution
of any kind that will tend to destroy fish life or be injurious to public health” (Tx. 12587 at 598)
could persuade the mills otherwise. NCR argues the mills admitted they were violating the law,
and as an example points to a December 31, 1958 memo from the Allied Paper Corporation which
states the King mill was “in flagrant violation of our Michigan Water Resources Commission
orders on the amount of waste that we may discharge into the Kalamazoo River.” (Tx. 4323).

40

None of these arguments convinces the Court that any party is uniquely culpable here. The
effort by the paper mills is to show that the combined, accumulated knowledge by NCR about
PCBs was sufficient to give NCR all it needed to stop supplying its effusion to the coaters well
before it did. The exhibits supporting Georgia Pacific’s time line, however, must be read in
context. The testimony from Dr. Rodricks for example, is focused on the risk of PCBs in recycled
paper used in food packaging. The basic point from this testimony was that PCBs were bad for
food and food packaging. But this is only an indirect link, at most, to the paper mills’ effluents
from the de-inking process that were discharged into the environment. It provides only limited
insight on NCR’s responsibility, and certainly does not establish unique culpability.
The other documents relied on by Georgia Pacific certainly support NCR’s culpability, but
not to the extent that the Court can assign NCR unique culpability. The documents show that the
wide distribution of information about PCBs took time for NCR to assimilate and process in order
to complete the puzzle. It makes sense that NCR would ask Monsanto for a delay of a few weeks,
not an indefinite period, to investigate Aroclor 1242. (Tx. 1539). As Dr. Vodden testified, it was
the uncertainty regarding the PCBs accumulating in the environment that drove concerns. (ECF
No. 875-8, PageID.31284).

This was also the thrust of the testimony from Cumming Paton, a

former Monsanto specialist, who testified about Monsanto’s communications with NCR during
the late 1960s. (ECF No. 875-9). And there was conflicting information too. As noted, Monsanto
told its customers in 1970 that it did not believe lower chlorinated PCBs were hazardous to the
environment. And in November 1969, Monsanto, while recognizing Aroclor was in the effluent
of its plants, found no reports of finding Aroclor 1242 in the environment, and stated there was no
harmful effect known to man or other mammals after 40 years of production. (Tx. 2585 at -636).

41

So when NCR concluded in 1975 that the mills were innocent victims, it was not because
NCR was admitting to the scheme alleged by Georgia Pacific; rather it was because NCR knew
it had supplied PCBs that, in hindsight, it should not have done. This is made clear by a further
reading of the same memo that states although NCR “did use PCB there was no evidence at that
time that their use would create a future pollution problem.” (Tx. 1625). The memo further
mentions that the manufacturers replaced PCBs voluntarily, and based on only limited information.
(Id). While this does not absolve NCR of its culpability as an arranger, the Court does find the
evidence shows a lot of back and forth and uncertainty, especially in the early going, that viewed
overall shows NCR responded to emerging information, rather than engaged in any sort of
extended coverup. All that said, it is more than clear that NCR did, as discussed in the Phase I
opinion, drag its feet.
NCR’s focus on other pollutants to argue the mills would have continued discharging PCBs
no matter how much of the available information they had does not absolve NCR, or make the
mills uniquely culpable. The evidence at hand establishes that the entire industry, including NCR,
had little concern for the environment by modern reckoning. That’s the problem everyone now
has to acknowledge in figuring out how to pay for the cleanup of a mess we wish, in retrospect,
had never been made. Pointing out the paper mills’ contribution cannot eliminate NCR’s own
responsibility for developing the CCP product that generated the source of the PCBs now driving
investigation and cleanup costs. The task now is to remove those PCBs and part of the economic
assessment is to share the cost of cleanup amongst the responsible parties. This supports a fair
allocation, not zero allocation.

42

Therefore, based on all the above reasons, the Court does not see a basis for concluding that
any party is uniquely culpable in the matter.
4.

The Court finds no convincing basis for divisibility of harm in the river system. In
particular the Court rejects NCR’s attempt to mathematically segment its
responsibility to a tiny fraction of the PCB loading. To the extent a party’s
geographic activity in the river system–International Paper in the Portage Creek
tributary, and Weyerhaeuser downstream in Plainwell–affect equitable
responsibility for costs, the Court’s allocation of the past costs accounts for it.

NCR and the paper mills provide differing theories of divisibility. NCR advances a series
of considerations that it argues should lead to a very small apportionment. The paper mills’ theory
of divisibility is based on the mills’ geographic locations in the Superfund Site, and the undisputed
fact that their discharges did not travel upstream. The Court briefly addresses both arguments and
its reasons for concluding why one overall equitable allocation is a better resolution here for costs
to date.
a.

NCR’s Divisibility Arguments

NCR advances four main premises for divisibility that it claims should cap its
responsibility at roughly 2%: 1) NCR had nothing to do with 25% of the PCB contamination at the
site; 2) NCR did not own or control most of the potential sources of CCP; 3) only very little of
NCR’s CCP reached the site because of successful markets elsewhere; and 4) the vast majority of
PCBs were discharged prior to 1969, the date when it has been found to be an arranger. (ECF No.
885, PageID.32664). The Court has dealt with the first three elsewhere; they are, in the Court’s
view, not theoretical or practical bases for divisibility, but simply factors in equitable allocation
to the extent the Court finds them factually supported.9 In regards to the fourth premise, NCR

9

The Court does not find the first factually supported, as noted earlier in the discussion of
Mr. Butler’s testimony. The second and third factors–even if factually supported–are not as
43

marshaled a series of experts that assembled the available data and combined it with assumptions
to build interlocking layers of mathematical estimates: 1) inputs of CCP combined with discharges
of solids in wastewater can give PCB discharge estimates; 2) PCB discharges allow for estimates
of how those pollutants made their way through the river system; 3) this, in turn, allows for
estimates of which areas will need to be remediated; finally, 4) models can allocate responsibility
for certain remediation to discharges from a particular mill in a particular year.
The Court rejects NCR’s divisibility theory. At a general level, the NCR divisibility
argument fails because it is based on a faulty legal premise. NCR reads the Phase I Opinion to
establish the company as liable only for discharges after March 1969. However, Phase I focused
on determining whether the parties were liable, and the Court found NCR liable as an arranger.
In Phase II, the Court takes the liable parties and determines how to allocate costs among them.
NCR’s attempt to push the March 1969 date forward is, in the Court’s view, largely immaterial to
the outcome of the divisibility argument. NCR is liable as an arranger for generating at least some
of the PCBs now in an undifferentiated mass in the Kalamazoo River. Moreover it had a hand in
all of the PCB discharges from the paper mills, as NCR was the sole producer of CCP paper.
Whether paper was coated by NCR or an independent coater (while NCR still held title to the
emulsion), NCR was the one who benefitted from selling the useful product. True, some of the
CCP broke and trim that reached the site came from coaters other than NCR, but the use of that
recycled paper was only viable thanks to a process NCR developed to prevent blueing. The
particular timing of when PCB discharges occurred provides no meaningful basis for divisibility.
As most, the timing is a factor to consider in equitable allocation.

exonerating as NCR makes them out to be, as noted later in the discussion on equitable allocation.
44

Eliminating the fallacy of the timing premise erodes the fundamental basis of the
interlocking expert theories that NCR tried to advance. Dr. Rausser relied on the flawed
assumption in his simulations. (ECF No. 867, PageID.31122). Mr. Butler relied on it in his standalone analysis. (ECF No. 865, PageID.31014). Mr. Wittenbrink relied on it in his site nexus
analysis. (ECF No. 852, PageID.29825). NCR’s expert on cesium dating, Dr. Reible, testified
about the date at which PCBs had been deposited into the river. While comparing the years in
which PCBs and cesium-137 from thermonuclear testing were released may be an interesting
theoretical exercise, it also involved substantial uncertainty. Dr. Reible had to make assumptions
about whether deposition rates changed or stayed constant over time, which is not a simple
question when impoundments were being removed along the river at the time. In fact, assumptions
about deposition rates made by different NCR experts conflicted with each other. More
importantly, the entirety of the cesium dating exercise relied on seven core samples from Lake
Allegan to determine the timing of PCB releases in the entire Kalamazoo River system. While a
small sample size like seven may be justified in some circumstances, it is particularly problematic
when there were thirty cores available, including three others in Lake Allegan. One in particular
was excluded explicitly because its data did not match the story, showing PCB releases earlier than
the other cores. The Court does not find seven hand-selected samples to be an adequate basis for
any expert opinion. The Court puts no weight on the cesium-137 analysis.
The substantial uncertainty in Dr. Reible’s model applies to the models of NCR’s other
experts. The Court is satisfied that there is no other mathematically precise way for divisibility in
this case. The liability for each of the four parties rests on different bases. In particular, NCR is
an arranger, while all others are mill owners or operators. NCR’s models rest primarily on

45

calculated or modeled loadings, which naturally skew responsibility to the mills, and do not take
seriously NCR’s role as the creator of the CCP in the first place. Moreover, NCR’s experts had
to piece together loading estimates based on a few data points, uncertain estimates of mill
production, and other rough assumptions. The estimates of suspended solids released by each of
the mills, which were often used as a proxy for PCB loads, are inherently uncertain. Mills did not
conduct regular testing of their effluents, and when they did, records were not always kept. When
records were kept, they were not always retained. Other considerations, such as discharges from
landfills, mill ponds, overflows, and bypasses, all add to the uncertainty of the suspended solids
discharged into the Superfund Site. Loading data, whether from mediation summaries, or
otherwise, is not reliable for the type of precise calculations that NCR offers. Moreover, it is not
just uncertainty regarding the inputs of PCBs loading that bears on the Court’s conclusion there
is no other basis for divisibility. There is also uncertainty on the amount of PCBs that have been
washed from the Kalamazoo River system and into Lake Michigan. Like all mathematical models,
these kinds of uncertainly on both the input and the output cells creates the opportunity for the
modeler to manage the uncertainties in a way that generates desired modeling results.
The big unknown variable of PCB loading into the river means NCR’s attempts to develop
a more specific model are unsuccessful because they are built on unreliable numbers. NCR’s
experts largely conceded that specific numbers could not be reached. The experts had to make too
many assumptions, tried to do too much with too little, and built upon other estimates that did the
same. Dr. Scott’s mass energy balance model, for example, is based on a cascade of assumptions
based on limited data and the model varied widely based on the data used and the updates of the
other witnesses to their reports. As Dr. Allen admitted, if the inputs are off, the output of a model

46

will also be off, regardless of the reliability of the model itself. (ECF No.861, PageID.30557).
And the partition coefficient of Dr. Allen’s model includes a number of assumptions that leaves
room for a lot of flexibility in the math. (ECF No. 861, PageID.30515). Dr. Nairn’s model, which
builds from Dr. Allen’s estimates, includes a plus or minus of 50% change to the PCB loads. That
only underscores the uncertainty of his model. (ECF No. 859, PageID.30415). Mr. Butler’s standalone cost model then teeters atop numbers that are not very stable or reliable.
In sum, there is a basic agreement on the paper mills’ relative contribution of PCBs: the
Bryant, King, and KPC mills all released comparable amounts of PCBs, with the Plainwell mill
releasing a lesser, though more than de minimis, amount. There is too much uncertainty and lack
of data to reach much beyond that. Ultimately what occurred in the past, and the experts’
diverging opinions on those events, must all be viewed against the reality of the presence of a
substantial amount of undifferentiated PCBs at the Superfund Site to which all parties contributed,
including NCR.
For all these reasons, the Court rejects NCR’s divisibility arguments.
b.

The Paper Mills’ Geographic Arguments

All of the parties recognize the physical reality that PCBs travel downstream, and not
upstream, when they enter the river system. Based on geography, PCBs found in sediment
upstream in the Kalamazoo River from the confluence with Portage Creek must be from either the
KPC or King mills, unless someone trucked them from a downstream source to an upstream
discharge point first, and there is no evidence of that. Likewise, PCBs found in Portage Creek
must be from the Bryant mill, and PCBs up river from the Plainwell mill and its landfill were not
discharged from the Plainwell mill. On the other hand, PCBs found down river from any particular

47

point of original discharge could have come from any or all of the upstream sources, and there is
no reliable way to sort out what particular source is responsible for any particular downstream
PCB.
How, if at all, should the parties and the Court account for this in apportioning or allocating
costs for investigation and cleanup of the river unit itself–OU5? Georgia Pacific has split OU5
into four geographic segments that correspond with the physical conditions of the river and the
locations of the mills, much as the EPA has divided the river into several work areas. (ECF No.
831, PageID.27894).10 At trial, Roger Hilarides testified that OU5-East includes the portion of the
Kalamazoo River from the Marrow Dam to the confluence of the Kalamazoo River and Portage
Creek. (Id. at 27895). OU5-Portage Creek includes the lower portion of Portage Creek up to its
confluence with the Kalamazoo River. (Id.) OU5-Central begins with the confluence of the
Kalamazoo River with Portage Creek and moves downstream to the Plainwell mill location. (Id.)
OU5-West then includes the remainder of OU5, from the Plainwell mill downstream until Lake
Michigan. (Id.) Georgia Pacific also created a non-geographic segment, OU5-General, that would
cover costs that were not specific to one of the four geographic segments. (Id. at PageID.27894).
Georgia Pacific then proposes different allocations for each unit.
This is certainly a plausible approach, but not one the Court favors because it too presumes
more certainty than is possible at this Site. All parties have a common interest in source removal
upstream to the extent it contains PCBs before they spread further downstream. Moreover, the
upstream loadings are very uncertain in any event. The Court sees no basis for divisibility or
apportionment on this geographic basis. To the extent the geography matters in equitable

10

A map of Georgia Pacific’s geographic segmentation is attached as Exhibit B.
48

allocation, the Court has taken this into account in its single overall allocation for costs to date.
Accordingly, the Court will consider the river segments, that is OU5 East, West Central, and
Portage Creek, together and make an overall equitable allocation based on the relevant equitable
allocation factors, including the position of the mills along the Kalamazoo River and Portage
Creek. For the reasons detailed below the Court’s allocation covers the work at OU2 as well.
For these general and specific reasons, the Court finds that the harms in this case are not
reasonably capable of apportionment on this record, despite the laudable efforts that certainly made
the record longer, richer, and more interesting. Ultimately, however, the Court is not satisfied they
establish a basis for divisibility.
5.

The Court’s allocation is for past costs only.

CERCLA provides that “the court shall enter a declaratory judgment on liability for
response costs or damages that will be binding on any subsequent . . . actions to recover further
response costs or damages.” 42 U.S.C. § 9613(g)(2). Article III of the United States Constitution
limits the jurisdiction of courts to cases or controversies. U.S. Const. Art. III, § 2, Cl. 1. To satisfy
this requirement, “a party seeking declaratory relief must allege facts to support a likelihood that
it will incur future costs recoverable under CERCLA.” GenCorp, Inc. v. Olin Corp., 390 F.3d 433,
451 (6th Cir. 2004). There is no doubt future costs will be incurred, so there is a proper basis for
entry of a declaratory judgment, and the Court will do so.
But is there a basis for declaratory judgment that includes an advanced equitable
allocation?

Georgia Pacific urges the Court to allocate future costs of investigation and

remediation of PCBs in the Kalamazoo River. Defendants argue the Court should wait to see what
costs are actually incurred. The Court sees no basis for an advanced equitable allocation. There

49

is a high level of uncertainty as to the shape of what remedies will actually apply, and no real basis
to assess costs without even knowing the remedy. The only thing that is certain right now about
the future costs at the Superfund Site is that it will take decades to complete the work–and it may
take that long even to select a remedy. It makes sense to wait until the process is further along and
the remediations more concrete before allocating future costs.
The uncertainty of the contour of the remedies was made evident through the testimony of
individuals such as James Saric, who testified that although the EPA expects there will be
remediation activities, the EPA has not made any final remediation decision for any parts of the
Kalamazoo River (ECF No. 875-10, PageID.31321, 31337) and Dr. Martin Lebo, a fact witness
and former project manager for the OU5 portion of the Superfund Site. Dr. Lebo testified that
hydrology changes from the Plainwell impoundment TCRA changed the erosion pattern
downstream. (ECF No. 846, PageID.29153). This testimony only adds to the uncertainty here.
Though it appears a ROD has issued since Mr. Saric’s testimony, a final decision has not yet been
reached for the vast majority of OU5. The allocation assigned for past costs in this case may be
a useful starting point for the future, but the Court will not enter a judgment with any fixed future
allocation.
D.

Equitable Allocation
All of the above considerations lead to the task of determining an equitable allocation for

the liable parties, and the application of the Gore and Torres factors. Much of what has previously
been discussed is still relevant to determine the equitable allocation of responsibility between
Georgia Pacific, International Paper, Weyerhaeuser, and NCR–all of whom have been found liable
in this action. Each party proposes their own allocation method based on various considerations,

50

and each party believes it should be allocated no more than a nominal share. Ultimately, the Court
must come up with its own allocation based on all matters of record. Below, the Court briefly
summarizes NCR and GP’s methodologies and its reasons for rejecting them. Then the Court will
discuss its own rationale and present its overall allocation determination that takes into account
the arguments of the parties.
1.

NCR’s Allocation Alternative

NCR contends that an economically sound allocation should take into account several basic
factors, many of which overlap with the Gore and Torres factors. These facts include the relative
discharges of each of the mills, the parties potentially responsible for the discharges at each mill,
the proportional assignment of any discharges made by non-parties, and an equitable division
between parties responsible for a single discharge. (ECF No. 867, PageID.31119-31120).
Dr. Rausser testified that the mills benefitted economically by recycling paper rather than
creating paper with virgin pulp. He estimated the mills saved a total of $695,000,000 by recycling
paper between 1964 and 1981. When it came to NCR’s allocation, Dr. Rausser performed a
“simulation analysis” that inputted contribution estimates from several different experts, the
assumed arranger period, an assumed amount of NCR CCP that reached the Site, and an equitable
division for any of the CCP that reached the Site. (ECF No. 867, PageID.31125). Dr. Rausser then
ran his model 100,000 times. (Id. at 31129-31130). Based on his model of the experts, Dr.
Rausser assigns Georgia Pacific an allocation of 55.1 %, International Paper an allocation of
35.7%, Weyerhaeuser an allocation of 7%, and NCR an allocation of 2.3%. (ECF No. 867,
PageID.31134).

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2.

Georgia Pacific’s Allocation Alternative

Georgia Pacific proposes a method of allocating costs based on the geographic segments
of the river, the paper mills’ contributions to that segment, the parties’ connected to the mills, an
allocation of responsibility, and then an aggregation of the results. International Paper and
Weyerhaeuser tacitly agree with the methodology, to the extent it takes into account the mills’
relative discharges, the geographic location of the mills, and NCR’s role as the source of the PCBs
in the river. Accordingly, the Court will sketch out Georgia Pacific’s proposal below, and then
explain why it is rejecting it in favor of the overall amalgamation of all factors into a single
number.
Georgia Pacific proposes a four step method for allocating costs to OU5 and OU2. (ECF
No. 882, PageID.31930). The method begins “by identifying the mills whose PCB discharges are
relevant as physical sources of PCBs in that section of the Site and in what proportion.” (Id.)
Second, Georgia Pacific proposes to identify the parties connected to the PCB discharges from
each mill. Generally, this means identifying the owner / operator of the mill as well as attaching
NCR as an arranger. (Id. at 31933). Third, Georgia Pacific contends the Court should allocate
responsibility for the PCBs attributable to the mill amongst the parties connected to that mill in
step 2. Here, Georgia Pacific argues that NCR should fully indemnify Georgia Pacific at this point.
(Id.) At the fourth step, Georgia Pacific believes the Court should aggregate steps 1 and 3 and then
adjust as necessary, taking into account any non volumetric factors. (Id.) The attached appendix
provides an example of Georgia Pacific’s methodology as applied to the central portion of OU5
as well as OU2.

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3.

The Court’s Reason for Rejecting the Parties’ Proposed Methods

In the previous section, the Court rejected NCR’s argument that there exists a mathematical
basis for divisibility. The same reasoning leads the Court to reject NCR and Georgia Pacific’s
attempts to demonstrate a mathematically precise equitable allocation as an alternative approach.
The Court was unpersuaded by Dr. Rausser’s economic benefit approach. For one thing,
it ignores the fact that NCR dragged its feet on sharing knowledge about PCBs with the paper
mills. And on cross, Dr. Rausser retreated from his testimony by admitting that, at least for the
Plainwell mill, the savings from recycling CCP would not have been meaningful. (ECF No. 867,
PageID.31157). Furthermore Dr. Rausser did not include Weyerhaeuser’s documents that detailed
the actual cost of installing secondary treatment in his analysis. (Id. at 31164). But the main flaw
with Dr. Rausser’s model is that he ignores the fact that NCR greatly benefitted from the sale of
its CCP broke and trim. On cross, he admitted that NCR had profit margins of twenty percent and
experienced over $2.1 billion in revenues from the production of its CCP in 1970-1972 alone.
(ECF No. 867, PageID.31177, 31179). Thus the attempt to shift the burden nearly entirely to the
mills because of their economic benefits from recycling is entirely unpersuasive.
Turning to Georgia Pacific’s four-step method, the Court finds it to be too legalistic and
more mathematically precise than an allocation in this case can actually be. The approach also
needlessly separates out several equitable considerations into separate steps. Considerations such
as the parties’ relative contributions, a party’s connection to a certain mill site, culpability,
knowledge of the hazard, and degree of cooperation are all equitable considerations covered by the
Gore and Torres factors and are more properly considered together.

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As it relates to OU5, the Court reiterates that downstream mills still realize a very real
benefit from upstream studies and remedial work that may reduce downstream costs. That said,
the Court recognizes the physics of the matter and that a mill or landfill’s discharges, in all
likelihood, did not move upstream. The Court has factored that reality into its allocation.
Accordingly all the mills as well as NCR, are responsible with respect to the entirely of OU5. As
for OU2, the physics are more pronounced–removal of solids from an upstream landfill. But even
here, all parties benefit from source control, and many uncertainties remain that belie the apparent
mathematical neatness of it all. At this stage of the case, a single allocation figure is still better
able to account for all equitable factors.
4.

The Court’s Allocation
a.

Summary of the Court’s Reasoning

Due to the lack of reliable data from the production period, almost a half century ago, the
Court prefers a single overall allocation that accounts for all of the Gore and Torres factors and one
that applies across all the costs incurred so far. This allocation reflects the Court’s conclusion that
all of the parties are responsible for a portion of the costs incurred for investigating and
remediating PCB contamination because all of them have a degree of culpability regarding the
contamination. NCR had a hand in all of the carbonless copy paper that was responsible for the
PCB contamination and, as found in Phase I, knew that there were environmental and human
dangers to releasing the wastewater from recycling CCP, even as it encouraged the de-inking mills
to continue to recycle its product. Georgia Pacific operated one of the largest paper mills in the
area that experts from all the parties agree contributed a large share of the PCB contamination.
International Paper owned another one of the largest paper mills in the area that experts agree was

54

one of the large contributors of PCBs, but International Paper was less actively involved in the
release of PCBs because it leased the mill out to another company that ran it. Moreover, the
primary discharges were to Portage Creek, which somewhat dampened the flow of PCBs into the
river itself. Weyerhaeuser operated a smaller paper mill that nonetheless contributed a nonnegligible portion of PCB contamination to the river. Its discharge point was much farther down
river than any other mill.
Further all of the mill parties used landfills that had inadequate protections in place to
prevent PCBs from eroding into the river.11 Finally although there are some PCB profiles that
would be consistent with other Aroclors, and thus with non-papermaking sources, there has been
no convincing showing that those other PCBs have affected cleanup of the Superfund Site at this
point in such a way that justifies shifting the equitable allocation. These considerations all bear
the Gore and Torres factors, including the parties’ respective culpability, the ability of the parties
to demonstrate their contribution can be distinguished, the degree of the parties’ involvement at
the Superfund Site, the degree of care and cooperation exercised by the parties, the extent that costs
are attributable to a specific parties, and the degree to which the parties benefitted from the
disposal of PCBs. Consol Coal Co., 345 F.3d at 413; Centerior, 153 F.3d at 354.

11

The Court could have attempted to allocate the river costs–OU5–different from some of
the landfill work–such as OU2. The Court considered several different approaching involving
different allocations by operating unit. Ultimately, however, the Court opted for one overall
allocation to take into account all factors, including the geographical reality of some of the landfill
work, such as OU-2. All parties benefit to some extent from the landfill removal work because it
reduces loading sources to the river, so all parties may fairly bear a share. On the other hand,
downstream mills can persuasively argue they benefit less than the actual operator or former operator
of the landfill. Rather than attempt to parse the equities on a unit-by-unit-basis, the Court molded
all considerations into a single number.
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Therefore, based on an equitable weighing of the many factors in play, the Court
determines the following allocation is a just outcome for past costs to date: NCR 40%; Georgia
Pacific 40%; International Paper 15%; and Weyerhaeuser 5%. Thus the majority of the
allocation–60%– goes to the paper mills, with their differences in volume, location, and approach
to the problem reflected in the different percentage for each mill. But NCR, as the creator of the
PCB-containing emulsion and the party that encouraged the recycling of its CCP, still takes a
significant share that the Court believes fairly reflects its equitable allocation.
b.

The Court’s Allocation to Each Party
i.

NCR

NCR argues its equitable share of response costs is very small. This is because the paper
mills, NCR says, were responsible for discharging PCBs, along with other pollutants, and the mills
flouted state laws and regulations designed to protect the environment. NCR insists that it, on the
other hand, acted in good faith when it chose to replace Aroclor 1242 in its CCP emulsion, and
could have arranged for only a small fraction of the CCP recycled at the site. The mills disagree,
and contend that a substantial amount, if not the entire amount, of the allocation should go to NCR.
Applying the Gore and Torres factors, the Court concludes NCR’s allocation is 40%.
Although NCR would like to cabin its responsibility to an “arranger period” starting in
1969, the Court must consider the equitable factor that NCR was involved in the release of PCBs
even before then. NCR was more involved in the release of PCBs than the general public. Indeed,
NCR was not open with the public about its use of PCBs in CCP, but instead tried to keep its use
of PCBs out of the press or regulator cross-hairs until a suitable alternative was found. While
NCR’s actions were not enough to make it uniquely culpable, there is sufficient information to

56

show it is culpable here and, as earlier described, was dragging its feet when it came to switching
from Aroclor 1242 in its emulsion.
Witnesses such as Chris Wittenbrink, tried to show that NCR should be responsible only
for its specific arrangement. This argument fails, first of all, because the Court has declined to
adopt NCR’s divisibility argument. But it also fails under application of the Gore and Torres
factors. Even before NCR had a knowledge and intent that made it an arranger of disposal under
Section 107’s definition, NCR was still involved in the release of PCBs. NCR created the PCBcontaining emulsion, held title to the product as it was converted to usable paper, and then sold that
finished product. As Dr. Kittrell testified, NCR developed a process to enable de-inking mills to
use CCP as a feedstock, a process that resulted in most of the PCBs being emitted in waste
streams. (ECF No. 830, PageID.27700). Furthermore, there has been no reliable showing on how
additional PCBs to the Superfund Site should shift the equitable allocation. NCR’s argument is
largely based on the fact that PCBs were ubiquitous during the production period, and used in a
variety of applications across the country. (See, e.g., Tx. 12572). This argument was largely
discredited by the testimony of NCR’s expert John Butler, who testified that he had not seen any
documentation that shows a significant source of PCBs at the Superfund Site other than from the
mills. (ECF No. 865, PageID.30984-30985).12 All these observations justify a substantially
higher percentage of responsibility than that asked for by NCR.

12

The other parties sought to hold Georgia Pacific to its position in previous litigation that
up to 25% of PCBs came from non-Aroclor 1242 sources. The argument is largely immaterial based
on the fact that the Court has not been convinced that any non-Aroclor 1242 PCBs have affected
cleanup costs. To the extent the estoppel argument survives this practical observation, the Court is
satisfied there exist sufficient differences between this litigation and earlier litigation that render
estoppel inapplicable.
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ii.

Georgia Pacific

Georgia Pacific owned and operated a sizeable mill that released thousands of pounds of
PCBs to the site. Georgia Pacific makes much of being the only party to actively step up and
cooperate with regulators to investigate and remediate the site, and the Court does factor in
Georgia Pacific’s cooperation. However, that positive element is at least partially offset by
evidence that Georgia Pacific was not always making good faith efforts to clean up the site in the
most efficient and expeditious manner. Some documents submitted to regulators were described
as arguments by lawyers instead of findings by scientists. The Court credits Scott Cornelius’
testimony about the frustrations the State had with the study group’s proposals. (ECF No. 852,
PageID.29701-29702; Tx. 4468). There is bound to be some friction between regulators and a
company facing a possible ten-figure tab to clean up an eighty mile stretch of river, but the Court
finds that the conflict between Georgia Pacific and regulators, particularly Michigan’s Department
of Environmental Quality, went beyond the normal friction that occurs in these situations.
When it comes to quantity of PCBs at the Superfund Site, Georgia Pacific’s main witness
on the issue of contaminated sediment fate and transport was Dr. Wolfe. Dr. Wolfe opined that
PCBs were released by the paper mills during the de-inking process and tended to settle in the
quiescent areas of the Kalamazoo River downstream from the major mills. (ECF No. 838,
PageID.28227-28228). Dr. Wolfe further opined that, because of the lack of available data, only
a “coarse grouping” of those dischargers was possible. (Id. at 28228). Still, Dr. Wolfe found
enough information to estimate loads of PCBs at the Superfund Site (see, e.g., Tx. 155), though
Dr. Wolfe insisted his model was of limited use and could not, for example, be used to construct
an estimate of the mills’ yearly discharges. Furthermore Dr. Wolfe clarified that he was not, in

58

fact, suggesting that the PCB mass provided in his report was actually the amount of PCBs
discharged by the mills. (ECF No. 838, PageID.28297).
The Court found the basic mechanics and physical processes, as described by Dr. Wolfe,
to largely be undisputed. The parties mostly agree about the movement of particles down the river,
and the settlement in the quiet areas. And the Court agrees that, as another witness would testify,
an estimate of the relative contribution potential of the mills’ discharges can be reached. Beyond
that, any attempt to calculate more exact numbers is limited by the uncertainty that Dr. Wolfe
himself identified. As Georgia Pacific’s counsel suggested, “the specific numbers aren’t very
important.” (ECF No. 838, PageID.28287).
Applying the equitable considerations, the Court concludes Georgia Pacific’s allocation
is 40%.
iii.

International Paper

International Paper also argues it should receive only a very small share of the equitable
allocation. International Paper argues that the PCB contributions from the Bryant and Monarch
mills, unlike the other mills, can be reasonable quantified, and that the Bryant and Monarch mills
were de minimis contributors of PCBs. Furthermore, International Paper argues that, as a passive
owner of the Bryant mill, it is less culpable than the other mills who each were more active in
contributing PCBs to the Superfund Site; and for that same reason International Paper says it did
not benefit from the activities that caused the contamination as much as those active operators did.
(ECF No. 881, PageID.31796). Finally, International Paper argues that its share should be reduced
because many of its potential witnesses and supporting documents have been lost to time, and

59

International Paper is relatively new to this case as compared to the other defendants. Thus, it
claims Georgia Pacific’s laches uniquely hurt the company.
The Court agrees that International Paper’s share of responsibility is less than NCR and
Georgia Pacific. International Paper was less directly involved in the operation of Bryant mill
when the mill was releasing PCBs. Thus, while still culpable as an owner, the culpability
consideration weighs differently than as to Georgia Pacific and Weyerhaeuser. But International
Paper’s efforts to paint its contribution of PCBs to the Kalamazoo River as de minimis largely
fails. International Paper asked Dr. Franklin Woodard to estimate the amount of PCBs discharged
by the paper mills. Using a “solids balance” approach, Dr. Woodard estimated the Bryant and
Monarch mill discharged between 13,249 and 22,099 pounds of PCBs from 1954 through 1985.
(Tx. 6849). According to his math, the KPC mill was the largest discharger, with the King and
Bryant mills following as higher-level dischargers. (ECF No. 840, PageID.28521). Mr. Helgen
added to Dr. Woodard’s testimony with a mass-balance approach and opined that very few of these
PCBs discharged by the Bryant mill found their way to the Kalamazoo River. This was because
the Bryant mill pond operated as a sort of super clarifier that trapped the vast majority of PCBs
with an efficiency approaching 95%. (ECF No. 843, PageID.28899).
While several experts agreed that the Bryant Mill point did trap PCBs-and this is borne out
in the fact that the EPA removed PCBs from the pond in the TCRA–Mr. Helgen’s estimates far
exceed the others. Furthermore, the estimate is punctured by uncertainty. Mr. Helgen’s testimony
is based on Dr. Woodard’s work. And Dr. Woodard largely depends on the role of the Bryant mill
pond. But the mill itself is unpredictable. As Dr. Woodard admitted, the mill was an “uncontrolled
settling pond.” There were times when the solids would settle, and other times when the solids

60

would be scoured from the bottom and flow over the dam. (ECF No. 840, PageID.28636). And
at one point Mr. Helgen stated that because of uncertainty, his estimate of 95% efficiency was
similar to Dr. Annear’s estimate of only 71% efficiency. (ECF No. 843, PageID.28909).
Thus reality and uncertainty get in the way of this analysis, as it does for many of the
witnesses in this case. Mr. Hesse’s testimony about the turbidity of Portage Creek, for example,
is inconsistent with International Paper’s theory that the vast majority of suspended solids settled
before reaching the creek and river. And as was noted in Mr. Helgen’s cross, if the mill pond did
operate with such a high efficiency in trapping solids, there would have been little reason for the
mill to connect to Kalamazoo’s treatment system, which would have been comparatively less
efficient by trapping only roughly seventy percent of solids. (ECF No. 843, PageID.29068).
So International Paper is in a different position both as its status as an owner while the mill
was being operated by Allied and by operation of the Bryant mill pond, which did capture at least
some PCBs. But the Court declines to find that the mill’s share was only de minimis. As an
owner, International Paper’s predecessor had contractual rights to inspect the facility and require
adequate environmental controls. International Paper was more involved than the general public
in the relevant releases. And the releases for the mill contributed an amount of PCBs on par with
the King and KPC mills, although some were trapped in the uncontrolled mill pond. Accordingly
the Court assigns International Paper an equitable allocation of 15%.
iv.

Weyerhaeuser

Weyerhaeuser owned and operated the Plainwell mill while the mill was releasing PCBs.
Weyerhaeuser also argued its contribution of PCBs to the river was minimal and that it should be
assigned only 0.38% of the allocation. Weyerhaeuser’s argument begins with Dr. Neil Ram, who

61

testified in Phase II about the relative total suspended solid loadings amongst the paper mills in the
Kalamazoo River Valley. Dr. Ram looked at both primary and secondary documents containing
numbers on total suspended solids and testified that in total, he inputted roughly 50,000 data
points. (ECF No. 846, PageID.29213). Another expert, Steven Werner, then converted the data
to an annual discharge rate. Mr. Werner agreed there was not enough information for specifics,
and instead developed a relative PCB contribution potential of the mills using the relative amount
of total suspended solids, the relative amount of CCP available in a given year, and concentration
data from waste solids. (ECF No. 848, PageID.29410). Under his method, Mr. Werner concluded
the Plainwell mill had a relative PCB contribution of 1.9% to the Superfund Site, while the King,
Bryant, and KPC mills all had much higher contributions collectively contributing about 89% of
the PCBs that went into the Kalamazoo River. (Tx. 8071). Weyerhaeuser further reduces its share
by referencing cases where another party was found to have unique knowledge about the waste
being disposed of. Those cases allocate roughly 75% of the response costs to the party with such
knowledge. Therefore, after adding in a further 5% shift due to Weyerhaeuser’s cooperation with
the government, Weyerhaeuser argues its 1.9% share should be split with 80% going to NCR and
20% going to Weyerhaeuser, leaving Weyerhaeuser with only a 0.38% equitable allocation. (ECF
No. 876, PageID.31496).
Other experts, like Dr. Wolfe, Dr. Woodard, and Dr Allen, largely agreed with Mr. Werner
that the Plainwell mill is responsible for substantially fewer PCBs in the Superfund Site, and the
Court agrees that under any analysis the Plainwell dam did discharge a lesser amount of PCBs, and
indeed the difference amounts to an order of magnitude. The Court does not believe this amounts
to only a 1.9% allocation (before accounting for other factors). Mr. Werner’s report depended, in

62

part, on Dr. Ram’s and Dr. Allen’s numbers and though Dr. Ram based his report on a large data
set, Dr. Ram admitted there were gaps present. Furthermore, the level of Weyerhaeuser’s
cooperation in cleanup is at least partially offset by the fact that the Plainwell mill, as is true for
all of the mills, were the ones releasing PCB with their effluents and depositing residual solids in
landfills on the banks of the river. Compounding the issue were the bypasses and leaks of the
treatment systems the mill did install. (Tx. 11182). Based on the consideration of the Gore and
Torres factors, the Court assigns Weyerhaeuser a 5% allocation.
E.

Form of Judgment
Entry of Judgment under Rule 58 will still require consideration of a variety of issues, even

with a simplified single allocation approach. The Court will require the parties to submit a
Proposed Judgment consistent with the allocation percentages here, and the recoverable costs that
have not been time-barred. Accordingly, no later than May 31, 2018, the parties shall file with the
Court either a stipulated form of judgment or, alternatively, proposed competing forms of
judgment with briefing on disputed issues.
F.

Other Matters
There are four pending motions yet to be resolved. In the first, (ECF No. 878) International

Paper asked the Court to admit four exhibits (Tx. 5714, 5715, 6740, and 12520) against Georgia
Pacific. This include a report from an expert and trial exhibits from earlier litigation. Georgia
Pacific opposes the motion. (ECF No. 886). The second motion (ECF No. 887) also seeks to
admit several exhibits that NCR objects to (Tx. 2920, 2923, 9857, 9859, 9913, and 9916). (ECF
No. 887). In a short filing, NCR states its objections should be well taken, but that it is not
necessary for the Court to resolve the objections because none of the exhibits supports the

63

proposition for which Georgia Pacific seeks to use them. (ECF No. 891, PageID.33113). The
Court will grant both of these motions. The Court has factored in the parties’ arguments on the
weight and persuasiveness of the documents into its equitable allocation.
The remaining motions (ECF Nos. 913 and 917) seek a scheduling conference, specifically
on the costs that Georgia Pacific has incurred after the Phase II trial. The motions will be denied
without prejudice. The Court intends to hold a scheduling conference, if necessary, after the
parties’ submissions on the proposed judgment.
VII. CONCLUSION
Georgia Pacific has established by a preponderance that it incurred reasonable costs
consistent with the National Contingency Plan. Those costs are not divisible by time and mill
because there is too much uncertainty, and the Court does not agree with the assumptions relied
upon by experts attempting to establish divisibility. The equitable allocation for costs to date is
40% to NCR, 40% to Georgia Pacific, 15% to International Paper, and 5% to Weyerhaeuser. A
declaratory judgment of future liability will be entered against the parties, but no allocation is
given for future costs because there is too much uncertainty about the costs and remediation
options that may unfold over a period of many years.
No later than May 31, 2018, the parties shall file with the Court either a stipulated form
of judgment or, alternatively, proposed competing forms of judgment with briefing on disputed
issues. The Court will hold a hearing on the matter if necessary.

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International Paper and Georgia Pacific’s Motions that seek to admit certain exhibits (ECF
Nos. 878 and 887) are GRANTED. Georgia Pacific’s Motions for a Scheduling Conference (ECF
Nos. 913 and 917) are DENIED WITHOUT PREJUDICE.

IT IS SO ORDERED.

Date:

March 29, 2018

/s/ Robert J. Jonker
ROBERT J. JONKER
CHIEF UNITED STATES DISTRICT JUDGE

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