980 F. Supp. 2d 821
W.D. Mich.2013Background
- Kalamazoo River/Portage Creek are contaminated with PCBs discharged by paper mills that recycled wastepaper, including NCR’s carbonless copy paper (CCP) produced with Aroclor 1242 from 1954–1971.
- CCP production generated "broke" (trim/waste) sold into the wastepaper market and used by regional recyclers; recycling released PCBs in effluent discharged to the river.
- NCR outsourced coating, sold coated rolls and conversion facilities; it developed de-inking methods and sold broke to brokers/recyclers nationwide.
- GP sued NCR, International Paper (IP, successor to St. Regis), and Weyerhaeuser under CERCLA for cleanup costs; Weyerhaeuser admitted liability (reserving allocation issues).
- After a two-week bench trial, the court found NCR liable as an arranger under CERCLA (NCR knew by 1969 CCP broke was waste/hazard and continued to market it), and found IP liable as an owner of the Bryant Mill during periods when PCBs were discharged (secured-lender exemption did not apply).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arranger liability for NCR under §9607(a)(3) | NCR arranged disposal by selling CCP broke after it knew recycling produced PCB waste and thus intended or planned disposal | NCR: CCP broke was a useful product sold in ordinary commerce, not an arrangement for disposal; also disputes that CCP broke reached Site | Held: NCR is an arranger—by ~1969 NCR knew broke was hazardous waste but continued to offload it to recyclers; arranger liability established |
| Causal nexus: Did CCP broke reach the Kalamazoo River Site? | Broke from NCR/coaters and Systemedia converters was sold into regional market and reached mills at Site | NCR denied sufficient proof that its CCP broke was delivered to Site | Held: Preponderance of evidence (shipment records, witness testimony, market/distance analysis) that CCP broke reached the Site |
| IP liability as owner/operator of Bryant Mill under §9607(a)(2) | St. Regis (IP’s predecessor) owned the Mill while it was recycling CCP and discharging PCBs; ownership during disposal makes IP liable | IP: after July 1, 1956 title retention was primarily to protect security interest (seller-financed sale); secured-creditor exemption applies | Held: IP (St. Regis) retained ownership but the lease was genuine and not merely a security device; secured-lender exemption does not apply; IP liable as owner for disposals occurring while it held title |
| Timing of disposal pre-July 1, 1956 (relevance to St. Regis operation period) | GP: PCBs were present at Site by mid-1950s, implying Mill disposal could have occurred while St. Regis operated Mill (1946–6/30/1956) | IP: GP cannot prove CCP-derived PCB disposals occurred at Bryant Mill before July 1, 1956 | Held: GP failed to prove by preponderance that CCP-derived PCB disposal occurred at Bryant Mill before July 1, 1956; but GP proved disposals occurred during 7/1/1956–1966 while St. Regis still held title |
Key Cases Cited
- Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599 (2009) (arranger liability requires intent to dispose; fact-intensive inquiry)
- United States v. Cello‑Foil Prods., Inc., 100 F.3d 1227 (6th Cir. 1996) (arranger liability analysis and role of affirmative acts)
- Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886 (10th Cir. 2000) (CERCLA liability may be inferred from totality of circumstances)
- United States v. Monsanto Co., 858 F.2d 160 (4th Cir. 1988) (owner liability under §9607 extends regardless of degree of participation)
- Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir. 2010) (even minimal hazardous waste can trigger CERCLA PRP status)
- Kalamazoo River Study Grp. v. Menasha Corp., 228 F.3d 648 (6th Cir. 2000) (elements for CERCLA contribution action)