768 F.3d 662
7th Cir.2014Background
- CERCLA §106 action to enforce EPA's 2007 order directing PRPs to cleanup OU2-OU5 downstream of Little Lake Butte des Morts.
- The Site is divided into OU1-OU5; OU1 remediation litigated separately under a prior consent decree.
- NCR Corporation and P.H. Glatfelter Company appealed the district court’s summary judgment and bench-trial rulings; Menasha and WTM I’s appeals were deconsolidated.
- The district court upheld the remedy selection, held NCR and Glatfelter liable for certain cleanup costs, and issued a declaratory judgment and permanent injunction requiring compliance.
- The Seventh Circuit partially affirmed and partially reversed, affirming the remedy and liability rulings but vacating the permanent injunction and remanding NCR’s divisibility defense for reconsideration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Propriety of the remedy under CERCLA §9613(j) review | NCR and Glatfelter contend the remedy was not in accordance with law | NCR and Glatfelter argue improper consideration and cost-based flaws in remedy selection | Remedy upheld; not arbitrary or capricious under record facts |
| EPA-WDNR cooperative agreement and administrative record | Cooperative agreement valid; WDNR authorized remedial tasks | Cooperative agreement not properly included in administrative record | Cooperative agreement valid; district court properly considered outside-record materials to evaluate remedy |
| Substantive review of the remedy | Agency acted reasonably; dredging favored, but review should be substantive | District court focused on process; remedy not adequately scrutinized | District court conducted substantive review; decisions not arbitrary or capricious |
| 2010 explanation of differences and ROD amendment requirement | Cost increase required ROD amendment or similar action | EPA's explanation of differences was proper; cost alone did not necessitate amendment | EPA's interpretation valid; no mandatory ROD amendment; explanation of differences appropriate for non-fundamental change |
| Divisibility and scope of Glatfelter and NCR liability; injunctive relief | NCR and Glatfelter liable for site-wide cleanup costs; divisibility issues unresolved | Divisibility defenses should limit liability to attributable portions | Glatfelter liable for OU4 costs; NCR’s divisibility remanded for reconsideration; permanent injunction vacated; liability on site-wide basis affirmed by remand to reconsider NCR's divisibility |
Key Cases Cited
- National Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644 (U.S. 2007) (arbitrary-and-capricious review requires considering relevant factors)
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (administrative-action review under arbitrary-and-capricious standard)
- James Madison Ltd. v. Ludwig, 82 F.3d 1085 (D.C. Cir. 1996) (need for thorough, probing review beyond procedures in agency decisions)
- USA Gov't Grp. Loan Servs., Inc. v. Riley, 82 F.3d 708 (7th Cir. 1996) (supplemental materials may be used to create a record for evaluating challenges)
- Auer v. Robbins, 519 U.S. 452 (U.S. 1997) (agency interpretations of its own regulations bind courts unless plainly erroneous)
- Ottati & Goss, Inc. v. United States, 900 F.2d 429 (1st Cir. 1990) (in CERCLA §106(b) enforcement, injunctive relief is enjoined; focus on EPA order and penalties)
- Old Republic Ins. Co. v. Emp'rs Reinsurance Corp., 144 F.3d 1077 (7th Cir. 1998) (equitable considerations do not govern enforcement under CERCLA §106(b))