Kalamazoo River Study Group v. Rockwell International Corporation and Eaton CorporationKalamazoo River Study Group v. Rockwell International Corporation and Eaton Corporation
OPINION
In 1990, federal and state environmental authorities officially recognized the massive polychlorinated biphenyls (“PCB”) contamination of the Kalamazoo River in Michigan by placing a portion of the river on the National Priorities List (“NPL”). The ensuing litigation over which entities were responsible for what share of the considerable investigation and cleanup costs has traced an eight-year oscillation through and between various levels of the federal court system. In the latest appearance in our courthouse, Plaintiff-Appellant Kalamazoo River Study Group (“KRSG”), a consortium of former paper-mill owners whose facilities polluted the river, appeals two distinct decisions of the District Court for the Western District of Michigan regarding the allocation of investigation and remediation costs to Defendants-Appellees Rockwell/Meritor (“Rockwell”) and Eaton Corporation (“Eaton”).
Following the placement of a stretch of the river on the NPL, the member companies of the KRSG entered into a remediation agreement with state and federal authorities. KRSG then filed actions against several other manufacturers who operated facilities on the river, including Rockwell and Eaton, under the contribution provision of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”).
See
KRSG first appeals the district court’s denial of its motion to reopen the order relieving Rockwell of any contribution responsibility. After the district court issued its zero-allocation order, KRSG discovered new evidence of increased environmental contamination, prompting it to file the motion to reopen. The district court, construing KRSG’s filing as a motion under
We AFFIRM both district court judgments.
I. FACTS AND PROCEDURAL HISTORY
In their nearly decade-long battle, these adversaries have amassed a prodigious factual record, brimming with environmental assessments, ecological data, and scientific opinions. We have already comprehensively detailed many of the pertinent factual disputes elsewhere.
See Kalamazoo River Study Group v. Rockwell Int'l Corp.,
A. Overview
In 1990, the federal Environmental Protection Agency (“EPA”) added to the NPL a thirty-five-mile stretch of the Kalamazoo River after discovering, in coordination with the Michigan Department of Natural Resources (“MDNR”), large PCB concentrations in the river.
Rockwell I,
The study of the river, referred to as the Remedial Investigation/Feasability Study (“RI/FS”), uncovered massive PCB contamination. The AOC mandated that for the purposes of the RI/FS, KRSG had to study an expanded ninety-five-mile stretch of the Kalamazoo River. The RI/FS zone included the Eaton Battle Creek plant fifteen miles upstream of the NPL site and the Rockwell Universal Joint facility, located in Allegan downstream of the NPL site. The administrative successor to the MDNR, the Michigan Department of Environmental Equality (“MDEQ”), ultimately concluded in 1997 that the river contained over 350,000 pounds of PCBs.
PCBs, which accumulate predominantly in organically rich, quiescent areas of the river, present a grave public health risk, mainly because they contaminate fish with potentially cancerous chemical waste. Monsanto Corporation produced several different varieties of PCBs all under the brand name “Aroclor,” (i.e., Aroelors 1242, 1254, and 1260, with the higher number corresponding to a greater PCB molecular weight). The KRSG companies used Ar-oclor 1242 extensively in their de-inking and paper manufacturing operations for several decades beginning in the 1930s, and they also used Aroclor 1254 in transformers, capacitors, hydraulic systems, and paints. Throughout the NPL site, Aroclor 1242 is the most prevalent PCB, and the MDEQ and EPA determined that KRSG companies were responsible for the bulk of the Aroclor 1242 contamination at the NPL site. The MDEQ also detected
All four KRSG companies have not disputed that they are liable and responsible parties within the meaning of CERCLA.
See
B. Rockwell
KRSG’s contribution action against Rockwell alleged that Rockwell’s Allegan facility, which produced universal joints for automobiles and construction equipment, contributed to the PCB contamination at the NPL site. The Allegan facility was in operation from the early 1900s until 1989. In 1987, the EPA, in an unrelated action, added the Allegan facility to the NPL because of arsenic, cyanide, and chromium contamination, but not because of any widespread PCB contamination. Soil tests at Allegan did reveal the presence of some Aroclor 1254 (along with some Aroclor 1242 and 1260) in the groundwater and light non-aqueous phase liquid (the oily film on top of water). Even though there existed no definitive proof that Rockwell ever purchased PCBs or conducted manufacturing operations that would necessitate the use of PCB-containing oils, the presence of PCBs on the property indicated that it did in fact purchase and employ PCBs in its operation. This fact, however, did not resolve the more salient question of whether these PCBs actually found their way to the Kalamazoo River such that they contributed to the overall pollution for which KRSG was responsible. In December 1998, the district court held that Rockwell did release PCBs into the Kalamazoo River NPL site and was therefore liable for some of the pollution. 1
Subsequently, in June 2000, the district court set out to determine the precise allocation of costs Rockwell owed to KRSG. The district court focused almost exclusively on the quantity of PCBs released by Rockwell versus the amount leaked by the KRSG companies. It determined that “[gjiven the low levels of PCBs on the Rockwell property, and the fact that the river sediments and the fish tend to show no significant contribution by Rockwell, the Court finds that Rockwell’s PCB contribution was very minimal, particularly in contrast to the contribution by [KSRG’s] members.” Joint Appendix (“J.A.”) I at 926 (Dist.Ct.Op.6/3/00).
2
The court ruled that KRSG could not recover from Rockwell. KSRG appealed, arguing that the
The immediate circumstances giving rise to this appeal were borne of the acrimonious relationship between the EPA and Rockwell. In April 1998, the EPA revoked Rockwell’s authority to investigate the Allegan NPL site because of multiple delays and acts of noncompliance by Rockwell. Throughout 2000 and 2001, the EPA assumed control of the investigation and discovered that the Allegan facility in fact had dramatically higher PCB levels than Rockwell had previously disclosed; in some instances the new PCB levels were more than one hundred times the previously reported levels. On August 9, 2001, the EPA ordered Rockwell to abate an “imminent and substantial endangerment to the public health.... ” J.A. I at 942 (EPA Order, Aug. 2001). The EPA also noted one PCB plume was then entering the Kalamazoo River and another was migrating towards the river.
After learning of the EPA order, KRSG filed a motion with the district court on September 21, 2001 to reopen the CERC-LA allocation proceedings fifteen months after the court had made its June 2000 allocation order. KRSG claimed that Rockwell had deliberately obfuscated this data in contravention of its statutory duty, and as a result KRSG asked the court to use its “equitable power” to reconsider the allocation. KRSG did not refer to its motion as a
On appeal, KRSG offers several alternative arguments. First, KRSG contends that the district court erroneously considered KRSG’s motion as a
C. Eaton
KRSG originally brought a contribution action against Eaton because Eaton operated three facilities near the Kalamazoo River NPL site: Eaton Marshall, Eaton Battle Creek, and Eaton Kalamazoo. The district court granted summary judgment in favor of Eaton as to the Marshall and Kalamazoo facilities in June 1998. Eaton Battle Creek, which is no longer in operation, was located fifteen miles upstream of Morrow Lake Dam and twenty miles upstream of the Kalamazoo River NPL site. While it was beyond the boundaries of the NPL site, it was within the larger confines of the RI/FS zone. The Battle Creek facility manufactured automotive parts, namely engine valves and gears, and un-disputedly released significant quantities of oil into the river for over four decades. The main question attendant to the contri-
There is some evidence that Eaton Battle Creek employed PCB-laden oils in its manufacturing processes, although it appears that it did not do so on a regular basis. Investigators discovered PCBs (primarily Aroclors 1248, 1254, and 1260) in several sewer outditches and in the wood blocks that lined the floor at Battle Creek. The district court eventually concluded that “the PCBs used in Eaton’s Battle Creek facility were only found in the transformers and capacitors and the hydraulic fluids, and those fluids were not released to the River in any regular or measurable manner.” J.A. II at 300 (Dist. Ct.Op.12/7/98). In other words, Eaton minimally used some PCB-containing hydraulic oils in closed systems; the oil from these systems did not flush directly into the river and leaked only in small amounts onto the floor and possibly into various sewer ditches on the Eaton property.
KRSG attempted to prove that Eaton PCBs actually entered the river and contributed to the pollution of the NPL site or the RI/FS zone by presenting undisputed evidence that Morrow Lake, situated between Battle Creek and the NPL site, is polluted with primarily Aroclor 1254 and minimally Aroclor 1260. KRSG could not have polluted Morrow Lake, because it lies upstream of the KRSG facilities, so the ensuing questions were (1) whether Eaton polluted Morrow Lake and (2) whether any of the Morrow Lake PCB contamination impacted the NPL site such that upstream polluters of Morrow Lake should be held responsible as contributing parties. 3 Morrow Lake is contaminated with Aroclor 1254 (constituting ninety percent of the total PCB contamination), and while there is evidence that Battle Creek’s wastewater discharge ditch is heavily contaminated with Aroclors 1254 and 1260 at levels comparable to or exceeding the Aroclor 1242 contamination at the actual NPL site, other companies, including Clark Equipment, used this ditch. Evidence also exists that between Eaton Battle Creek and Morrow Lake, the PCBs appeared in high concentrations in areas with low amounts of organic material, suggesting that when one controls for the presence of organic content (a procedure known as “carbon normalization”), the PCB concentration of Ar-oclors 1254 and 1260 near Battle Creek was among the highest in the Kalamazoo River area.
In December 1998, the district court ruled that while the evidence showed that Eaton did utilize some PCBs in its electrical and hydraulic equipment, any PCB leaks were minimal in volume and sporadic in occurrence, such that Eaton was not liable for contribution. However, in assessing liability, the district court employed an improper liability standard, which caused us to remand the case for reevaluation.
See Kalamazoo River Study Group v. Menaska,
The district court then proceeded to receive evidence on the allocation of response costs between KRSG and Eaton. KRSG presented the testimonies of Brown and McLaughlin, with the latter stating that he discovered at Battle Creek PCB concentrations ranking in the upper 2% of all PCB samples taken from the NPL site. Many of McLaughlin’s samples, which demonstrate the presence of high PCB concentrations, came from a drainage ditch leading to the river that Eaton shared with Clark Equipment. McLaughlin concluded that Battle Creek significantly contributed to the PCB contamination at the NPL site.
Eaton, in response, relied on the testimony of Connolly, who testified that the PCB concentrations in the ditch and several of the sample locations near the ditch’s outfall to the river were not characteristic of the PCB concentrations in the river between Battle Creek and Morrow Lake. Connolly essentially posited that the Aroc-lor 1248, 1254, and 1260 concentrations in the general river channel were not consistent with Eaton Battle Creek as a PCB point source. Connolly noted the lack of a PCB gradient spanning the distance between Battle Creek and Morrow Lake. Generally, PCB concentrations will be highest near the PCB source and will increasingly diminish as the distance from that source grows. Comparing the Kalamazoo River to other PCB-contaminated rivers with a “normal” PCB gradient, such as the Hudson River in New York and the Housatonic River in Massachusetts, Connolly highlighted the lack of a gradient stretching from the Battle Creek “source” to further downstream points. Connolly testified that this lack of a gradient contradicted the conclusion that Battle Creek was a primary contributor of Aroclor 1254. Connolly bolstered his theory by suggesting that the absence of a high concentration of PCB contamination at the sediment-rich upstream entrance to Morrow Lake provided strong evidence that facilities closer to Morrow Lake, such as the Benteler Industries and Consumers Power sites, were the true sources of the Morrow Lake contamination.
On August 29, 2002, the district court ordered Eaton to pay ten percent of KRSG’s investigation costs in the RI/FS zone (ten percent of the total $622,615.79 investigation cost for that portion equals $ 62,261.58). First, the court noted that KRSG had “the burden of proving its equitable right to contribution by a preponderance of the evidence.” J.A. II at 433 (citing
United States v. R.W. Meyer, Inc.,
The court then reached the ten-percent figure by applying the “Gore Factors” outlined in
Cmterior Service Co. v. Acme Scrap Iron & Metal Corp.,
On appeal of the Eaton decision, KRSG first contends that “[ajlthough the District Court paid lip service to the preponderance of the evidence standard ... it applied a much more stringent standard,” requiring KRSG to disprove the potential responsibility of other upstream facilities. KRSG’s Eaton Br. at 17. Second, KRSG claims that the district court committed clear factual errors by accepting the theory that the PCB contamination at Morrow Lake and at the NPL site might have come from sources other than Battle Creek.
II. JURISDICTION
The district court had proper jurisdiction over the original contribution action pursuant to
III. ANALYSIS
Because KRSG’s two appeals present completely distinct legal and factual issues, we discuss each in turn. First, we examine KRSG’s claim that the district court erred in denying KRSG’s motion to reopen the allocation decision against Rockwell. Second, we explore KRSG’s argument that the district court erred both in its choice of a standard of liability and its application of that standard to the facts in its Eaton allocation order. We hold that the district court acted properly in both instances.
A. KRSG’s Rockwell Appeal
1. Standard of Review
Generally, we review the denial of a
2. The Reopening of Allocation Orders under CERCLA
KRSG bases its objection to the district court’s pigeonholing of its motion to reopen as a
KRSG is certainly correct that principles of equity guide CERCLA’s contribution provision, but nothing in CERCLA compels the conclusion that the equitable underpinnings of an allocation decision exempt it from the requirement that motions to alter judgments be brought under
The crux of KRSG’s argument is that because a district court relies upon equitable factors to make an allocation decision, such a decision is forever subject to revision should there be any alteration in the equitiés underlying the allocation order. KRSG’s position cannot prevail. The equitable basis of CERCLA allocation decisions does not deprive all allocation orders of their finality. Other equitable decisions, such as an order mandating specific performance in a contract dispute, are not automatically subject to future revision. KRSG does not point us to any part of CERCLA in which Congress has expressed a desire that
all
allocation decisions should be considered ongoing or non-final such that there is another method by which relief from judgment may be sought other than
KRSG also cites the Seventh Circuit’s opinion in
PMC, Inc. v. Sherwin-Williams Co.,
What these cases show is not that allocation decisions in CERCLA cases are inherently subject to change, but rather that
Similarly, KRSG’s focus on PMC is misplaced. The Seventh Circuit’s PMC decision only hypothesized about what a district court could do in the face of a premature claim if there were uncertainty about one of the equitable factors, i.e., cooperation. The Seventh Circuit’s statements in dicta did not establish a ground rule that all allocation decisions based on equitable determinations will always be subject to revisions. Moreover, hurting rather than helping KRSG’s argument is the fact that the Seventh Circuit affirmed the district court’s decision not to alter the allocation despite new evidence of contamination when the district court concluded that any contribution PMC may have made to the contamination at the site was negligible.
In allocating no costs of the future remediation to Rockwell, the district judge mentioned nothing about a provisional order or potential alterations in the future. Nor does the language of the district court’s order leave room for us to infer that the allocation decision was provisional or susceptible to change based upon future events. Unlike the lower courts in
Acush-net
and
PMC,
the district court did not describe how the circumstances of this case or the insufficiency of the evidence left open the possibility for future alteration of the allocation. Rather, the district court here simply stated that under the “Gore” equitable factors, “Rockwell should not be required to contribute to the remediation of the ... Superfund site. The PCB releases by Plaintiffs members are more than sufficient to justify imposing on Plaintiff the entire cost of response activities relating to the NPL site.” J.A. I at 926 (Dist.Ct.Op.6/3/00). This allocation order does not intimate that the evidence before the district court on any of the equitable factors considered was incomplete such that the order would be subject to revision without a
This was not such an order. There is no reading of the district court’s opinion that suggests its zero-allocation order was ongoing or subject to change in the future. Furthermore, we have been presented with no support for the notion that CERC-LA provides a mechanism independent of
3. The District Court’s Choice Between Application of
KRSG alternatively contends that if its motion to reopen is viewed as a
Most cases consider
We also must heed the requirement that parties cannot disguise
KRSG is incorrect in its assertion that the district court’s allocation order was “prospective” in the
Thus, we agree with the district court’s decision to apply
B. KRSG’s Eaton Appeal
KRSG appeals both the evidentiary standard employed by the district court and the court’s allocation to Eaton of only for ten percent of the investigation and for none of the future cleanup costs. More specifically, KRSG claims that the district court paid “lip service” to the “preponderance of evidence” standard, while actually employing a much higher and more stringent standard; in KRSG’s estimation, the district court held it to an impermissible standard of “absolute disproof’ because it required KRSG to demonstrate conclusively that other parties did not cause the PCB contamination in the discharge ditch and in the river. We disagree. We conclude that the district court applied the appropriate “preponderance of the evidence” standard and neither abused its discretion in allocating only ten percent of the costs to Eaton nor committed a clear error in its factual findings.
1. Standards of Review
We review different aspects of the district court’s order using different standards of review. We review de novo the legal conclusions of the district court, but we review the court’s factual findings following a bench trial for clear error.
Menasha,
2. The District Court’s Application of a Standard of Liability
The district court’s application of a preponderance of the evidence standard is a mixed question of law and fact that we review de novo. CERCLA contribution plaintiffs must prove that they are entitled to reimbursement by a preponder-
3. The District Court’s Allocation Decision
We affirm the district court’s judgment because the court neither clearly erred in its factual finding nor abused its discretion in allocating only a small portion of KRSG’s investigation costs to Eaton. KRSG contends that the district court improperly required KRSG to disprove the complicity of potentially responsible parties other than Eaton. Eaton responds that KRSG did not provide enough evidence that Eaton could ever be “ruled in” as a PCB contributor and thus that KRSG’s failure to “rule out” other potential contributors was only one part of the district court’s final order. We accept neither view, but rather affirm the district court’s order because it appropriately weighed the evidence presented by both sides to conclude that Eaton was only minimally responsible for some of the investigation costs incurred by KRSG.
First, there is no indication that the district court clearly erred in its factual findings. Some of the evidence does support the theory that Eaton contributed to the PCB contamination for which KRSG is responsible. Aroclors 1254 and 1260, which comprise twenty-five percent of the PCB contamination at the NPL site and ninety percent of the PCB contamination at Morrow Lake, were found at Battle Creek. Throughout its history, Eaton Battle Creek discharged large quantities of oil to the river, and the wastewater ditch connecting the Battle Creek facility to the river contained high PCB concentrations, particularly when one controls for the amount of carbon content. Additionally, KRSG’s expert, McLaughlin, testified that no other potentially responsible party upstream of Morrow Lake, including Clark Equipment with whom Eaton shai*ed the wastewater ditch, released as much PCBs to the river as Eaton. McLaughlin also concluded that sources closer to Morrow Lake, such as Benteler Industries and Consumers Power, did not release PCBs to Morrow Lake and thus Eaton must be responsible.
Eaton countered KRSG’s evidence with support of its own and ultimately the court found Eaton’s proof more compelling than KRSG’s. The evidence presented by Eaton showed that it barely used any PCB-laden oils at Battle Creek and that most of the PCBs found in the wood floors came from closed — system transformers and hydraulics. The PCBs in the floor were thus the result of incidental and minor spillage, the oil from which would not have been flushed
The district court assessed all of this evidence and concluded that Eaton’s use of PCBs was exceedingly minimal and that any PCBs it did use barely impacted the pollution at Morrow Lake, let alone the contamination at the actual NPL site. In making this factual finding, the district judge rejected the testimony of KRSG’s expert McLaughlin because the judge did not believe that it was well-supported and because he considered Connolly’s testimony to be more persuasive. This preference of one expert over another was not clearly erroneous, as the district judge had the opportunity to assess and observe each expert before making his decision. The district court noted that Connolly “has the most expertise of any of the witnesses in the area of hydrogeology and the transport of PCBs in the river environment” and that Connolly had testified before Congress. J.A. II at 445 (Dist.Ct.Op.8/29/02). Based on his acceptance of Connolly’s testimony, the district judge concluded that KRSG had not proven by a preponderance of the evidence that Eaton should be responsible for a portion of KRSG’s costs. The district court did not clearly err in making these factual determinations; they were well-supported by the evidence as a whole, and the district court chose between two permissible interpretations of the evidence.
KRSG contends that the district court erred because rather than requiring it to prove Eaton’s complicity, the court forced KRSG to disprove the potential responsibility of Clark, Benteler, and Consumers Power to the PCB contamination in the Eaton/Clark wastewater ditch and Morrow Lake. This argument is flawed. Most importantly, the court did not rely solely on evidence that other parties may have added to the PCB contamination in Morrow Lake and the NPL site; in making its ruling, the court focused primarily on Connolly’s testimony about the lack of a gradient and the evidence that any PCBs Eaton may have leaked did not contribute to the pollution upstream of Morrow Lake, in Morrow Lake, or in the NPL site. Additionally, evidence exists that Clark, Benteler, and Consumers may have contributed to the PCB contamination upstream of the NPL site. The district court did not require KRSG to disprove in any absolute sense the potential contamination by those facilities, but rather considered the significant probability that they added to the pollution for which Eaton was being blamed. Thus, we cannot agree that the district court clearly erred in reaching its factual findings.
Second, we hold that the district court did not abuse its discretion by concluding that Eaton was responsible only for ten percent of the investigation costs and not responsible for any future costs of remedi-ating the NPL site. KRSG contends that the district judge abused his discretion,
Furthermore, the court did not myopically base its decision on KRSG’s failure to rule out Clark and Benteler as potential PCB sources. Whereas KRSG views the district court as requiring it to disprove other parties’ potential responsibility, the district court in reality recognized that some convincing evidence demonstrated that parties other than Eaton may have been the chief polluters of the wastewater ditch, Morrow Lake, and the NPL site. It accordingly held that Eaton was responsible for only a small portion of KRSG’s costs, because evidence showed that Clark contributed to the PCB contamination in the discharge ditch and that Benteler Industries and/or Consumers Power were the main sources of Aroclors 1254 and 1260 at Morrow Lake.
7
Yet, even ignoring
IV. CONCLUSION
Because the district court correctly dismissed KRSG’s motion to reopen as a
Notes
. Although the district court improperly burdened KRSG with a higher liability standard than was appropriate' and this panel subsequently reversed the district court's application of that standard, the district court’s finding of liability for Rockwell stands under both the discredited higher standard and the less onerous standard.
See Kalamazoo River Study Group v. Menasha Corp.,
. Owing to the consolidated nature of this case, the parties submitted two different joint appendices. The KRSG-Rockwell joint appendix (No. 01-2453) is denoted J.A. I, whereas the KRSG-Eaton joint appendix (No. 02-2192) is denoted J.A. II.
. KRSG is not responsible for the clean-up of Morrow Lake and other areas outside of the defined NPL site, but the RI/FS zone encompasses Morrow Lake and the Kalamazoo River upstream to Eaton Battle Creek. Eaton, as a contribution defendant, is potentially liable for future remediation costs only to the extent that PCBs for which it is responsible flowed downstream and impacted the NPL site. Eaton could be responsible for the costs of investigating the RI/FS even if its PCBs did not affect the NPL site.
. At oral argument, counsel for KRSG suggested that two sections of CERCLA support KRSG’s argument in this regard.
See
. At the outset, we cannot criticize the district court’s turn to
KRSG’s approach raises the specter of waiver. It is "a prerequisite to relief under
. Even if KRSG had filed a timely
. KRSG’s argument that the district court is being inconsistent with its past opinions in regards to the potential contributions of Clark and Benteler is without merit. KRSG argues at one point that the district court had previously exculpated Clark by stating that there was no qualitative or quantitative evidence of any PCB discharge by Clark. See KRSG’s Eaton Br. at 21 (citing J.A. II at 437 (Dist.Ct. Op.8/29/02)). Quite the opposite, the district court noted that Clark may have been responsible for some PCB contamination. It first remarked that even KRSG's expert, McLaughlin, "conceded that the PCBs found in the Eaton/Clark ditch could have originated from Clark if Clark’s effluent contained PCBs.” J.A. II at 437 (Dist.Ct.Op.8/29/02). The district judge cautioned that "no direct evidence” showed that Clark's discharges contained PCBs, but he mentioned that Clark may have used PCB-containing oils in its transformers and hydraulic systems. J.A. II at 437. Furthermore, there is no inconsistency with the district court’s previous finding during the liability phase, see J.A. II at 382-83 (Dist.Ct. Op.5/9/01), that Clark did not discharge any effluent to the ditch it shared with Eaton, because the district court held that this earlier finding was based upon the erroneous testimony of Thomas Mattson, who mistakenly claimed that Clark did not discharge any PCB-containing effluent to the shared ditch. See J.A. II at 436-37 (Dist.Ct.Op.8/29/02).
KRSG also complains about an alleged inconsistency between previous findings and the district court's holding that facilities closer to Morrow Lake were in fact the most likely source of the Aroclor 1254 and 1260 pollution at Morrow Lake. In an earlier order, the district court granted Benteler’s motion for summary judgment on KRSG’s contribution claim, which we affirmed.
Rockwell I,