United States of America et al v. NCR Corporation et al

Filing 1167

ORDER signed by Chief Judge William C Griesbach on 1-3-17 granting 1105 Motion in Limine and excluding evidence regarding natural resource damages. (cc: all counsel) (Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
UNITED STATES OF AMERICA,
Plaintiff,
v.

Case No. 10-C-910

NCR CORP. and APPLETON PAPERS INC.,
Defendants.

DECISION AND ORDER

The Plaintiffs (“the government”) have entered into a number of settlements with several
parties. Generally, these settlements allocated payments in different amounts to the State of
Wisconsin, the Superfund, and the Natural Resource Damage Assessment and Restoration
(NRDAR) fund. (See, e.g., ECF No. 20 at 24-25.) In the upcoming trial, Defendant Glatfelter
proposes to establish that the allocations set forth in these settlements, and approved by this court,
over-allocated funds to natural resource damages (“NRDs”) and under-allocated funds to help pay
for contamination cleanup. In its view, this means the settlements that have been reached do not
reduce the remaining liability by the proper amount. The government has filed a motion in limine
seeking to exclude evidence on that score, arguing that the allocation of NRDs has already been
made in the settlements. In its view, Glatfelter should not get the opportunity to litigate matters that
have already been decided. For the reasons given below, the motion will be granted.

Section 113(f)(2) of CERCLA provides as follows:
A person who has resolved its liability to the United States or a State in an
administrative or judicially approved settlement shall not be liable for claims for
contribution regarding matters addressed in the settlement. Such settlement does not
discharge any of the other potentially liable persons unless its terms so provide, but
it reduces the potential liability of the others by the amount of the settlement.
42 U.S.C. § 9613(f)(2).
Glatfelter’s argument relies on the last clause of that subsection. In its view, any settlement
with the United States “reduces the potential liability of the others by the amount of the settlement.”
Id. So far, this is not controversial. What the government disputes, however, is Glatfelter’s belief
that it may probe beneath the terms of the settlements reached to determine exactly how the
settlement funds should have been allocated.
As noted above, Glatfelter believes the settlements over-allocated funds to natural resource
damages and under-allocated funds to help pay for contamination cleanup. This is a costly error to
Glatfelter’s detriment because the funds allocated to natural resource damages do not “count” in
reducing the potential liability of non-settling parties under § 113(f)(2). Glatfelter therefore believes
the remaining share of potential liability is artificially large, meaning that Glatfelter (and others,
though they do not join in its motion) could be on the hook for more than their fair share of costs.
Glatfelter does not believe it should be bound by the settling parties’ allocation decisions, which it
views as somewhat arbitrary, and so a large part of its case is devoted to unpacking the settlements
and providing other evidence, including expert evidence, as to what the actual or true natural
resource damages should have been. It is that amount that should be used to reduce Glatfelter’s
liability, rather than the actual figure the settling parties reached. In support of this argument,
Glatfelter relies on CERCLA § 107(f)(1), which provides that “[t]here shall be no double recovery
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under this chapter for natural resources damages . . .” 42 U.S.C. § 9607(f)(1). In Glatfelter’s view,
recovering more for natural resource damages would result in a double recovery. At trial, therefore,
Glatfelter proposes to ensure that the government does not receive a double recovery by
demonstrating the proper amount of natural resource damages.
The government argues that its motion should be granted because otherwise Glatfelter would
be allowed to undo the consent decrees the court approved by re-litigating the “proper” allocation
for natural resource damages.

It further argues that such arguments are barred by res

judicata principles. The government’s analysis is correct. First, in 2014 Glatfelter itself appeared
to have recognized that funds allocated to NRDs would be forever “lost,” rather than subject to
some further reallocation proceeding. It wrote: “Glatfelter maintains its belief that the payments
of NRDs under the consent decrees may very well result in an overpayment of NRD recoveries.
That overpayment will effectively be lost to the remaining defendants; it will not offset any costs
or damages for which those remaining defendants might be liable.” (ECF No. 938 at 4.) It
continued, “However, Glatfelter expects its fair share of those costs and damages ultimately to be
relatively low, so Glatfelter’s likely share of the overpayment is probably small relative to the likely
high cost to Glatfelter of litigating the NRD claim. Further, Glatfelter generally shares Plaintiffs’
interest in getting to a final judgment in this case promptly and efficiently. Accordingly, Glatfelter
will not oppose the entry of the consent decrees.” (Id.) Glatfelter’s present position appears to be
sharply at odds with these sentiments.
Regardless of its past litigation position, there is no precedent for Glatfelter’s view that
settlement allocations are subject to re-litigation after the fact. If the question of the “proper”
allocation of natural resource damages were subject to a later trial, there would seem to be little
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point in allocating those damages as part of any settlement. The exercise in allocation is made by
the settling parties, with the non-settling parties able to provide comments (which Glatfelter did).
The settlement must then be approved by the court. The time for allocating settlement funds has
long passed.
Third, the statutory hook on which Glatfelter relies does not resurrect the allocation issue.
It is true that the statute says there shall be no double recoveries for natural resource damages. 42
U.S.C. § 9607(f)(1). But all this means is that the different government trustees may not go after
the same parties to recover the same natural resources damages. “If there is a later disagreement
between the co-trustees, that disagreement would have to be resolved by successive litigation
between the trustees, but it could in no way affect the liability of the responsible party or parties.”
United States v. Asarco Inc., 471 F. Supp. 2d 1063, 1068 (D. Idaho 2005). This means a defendant
is protected from being sued twice for the same natural resource damages; it does not suggest that
a defendant may litigate the allocation of natural resource damages following a settlement that
allocated those same damages. In short, even if more funds are allocated to NRDs than might
otherwise be warranted, that does not mean the government has obtained a double recovery.
Finally, Glatfelter’s expansive reading of the double-recovery bar ignores the plain language
of § 113(f)(2), which provides that settlements “reduce[] the potential liability of the others by the
amount of the settlement.” The language of 113(f)(2) thus links any reduction in Glatfelter’s
liability to “the amount of the settlement,” which can only mean the actual dollar value of the
settlement, not some abstract amount that could be litigated later. The amount of the settlement is
the amount of the settlement. Akzo Nobel Coatings, Inc. v. Aigner Corp., 197 F.3d 302, 308 (7th
Cir. 1999) (section 113(f)(2) “reduces third-party claims by the actual cash value of settlements
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reached with governmental bodies.”) Moreover, by definition, settlements are compromises that
do not necessarily reflect a “correct” allocation of funds; instead, they are the product of a number
of judgments, or guesses, about what the evidence might eventually show and how a judge might
rule. By linking the liability reduction to a “settlement,” Congress was acknowledging that fact and
cutting off any notion that parties were entitled to obtain a liability reduction through some more
searching inquiry or separate trial about the “true” value of NRDs, as opposed to the negotiated
valuation. The settlement is the definitive fact that governs any reduction in liability Glatfelter
might ultimately enjoy. This does not mean that settling parties and the government have the ability
to concoct settlement allocations out of thin air. Settlements are subject to public comment and
court approval. What it means, simply, is that a non-settler’s liability is reduced by the amount of
the settlement, not the amount that party thinks the settlement should have been.
The motion to exclude evidence pertaining to any overpayment of natural resource damages
is therefore GRANTED.
SO ORDERED this 3rd day of January, 2017.
/s William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court

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