7th Circuit Hits the Brakes on Burlington Northern, Imposes Causal Element to CERCLA Volumetric Apportionment

August 14, 2012

In the highly anticipated decision United States of America and the State of Wisconsin v. NCR Corporation, __ F.3d __, No. 10-C-910, 2012 WL 3140191 (7th Cir., Aug. 3, 2012), the Court of Appeals for the 7th Circuit affirmed that NCR Corporation (“NCR”), a potentially responsible party (“PRP”) that had unilaterally ceased performing environmental response work at Wisconsin’s Lower Fox River and Green Bay Superfund site on the grounds that it had paid more than its apportioned share, would be required to resume that work under an order issued by the Environmental Protection Agency (“EPA”) and the state of Wisconsin. This decision imposes a significant limitation on the “apportionment” defense to joint and several Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) liability that the Supreme Court set forth in Burlington Northern and Santa Fe Railway Co. v. United States, 556 U.S. 599 (2009) and may signal a shift back toward a broader imposition of such liability in appropriate cases. 


From 1954 to 1971, NCR and several other PRPs owned and operated paper mills that generated and discharged several hundred tons of polychlorinated biphenyls (“PCBs”) into the Lower Fox River, which feeds into Green Bay. Much of the PCB contamination could be traced to the use of carbonless copy paper, a product that NCR both produced on its own and supplied to local plants owned by other PRPs. Following an investigation that spanned four years, EPA issued a cleanup plan in 2002 that called for a combination of remedial techniques to reduce waterborne PCB levels to 1.0 parts per million (ppm) — the maximum safe level.

NCR did not challenge its liability under CERCLA and performed work under EPA’s supervision for several years at a cost of more than $50 million. However, NCR disputed that it alone was responsible for the site’s remediation costs and attempted to recover an equitable share of its expenses from other PRPs through litigation in the local district court. Shortly after those claims were denied, NCR notified EPA that it intended to cease complying with the cleanup orders, arguing that its contribution to the contamination was divisible and that it had performed more than its share of the work. In response, EPA sought and received a preliminary injunction against NCR, and this appeal followed.

Apportionment Defense Rejected

In the case below, the district court rejected NCR’s argument that the contamination in the river was divisible and therefore subject to apportionment among the PRPs. Following the lead of Burlington Northern, the 7th Circuit turned immediately to the common law — specifically to the Restatement (Second) of Torts § 433A, which states that “when two or more persons acting independently caus[e] a distinct or single harm for which there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion of the total harm that he himself caused.” However, “where two or more persons cause a single and indivisible harm, each is subject to liability for the entire harm.” Id.

The 7th Circuit utilized a two-part test to assess whether apportionment may shield a PRP from joint and several liability under CERCLA: first, the court must determine whether the harm is “theoretically capable of apportionment” (a mixed question of law and fact); and second, if the harm can be apportioned, the court must determine how to apportion damages (a question of fact). NCR Corp., 2012 WL 3140191 at *4 (citations omitted).

Here, the analysis stopped at step one because the 7th Circuit held apportionment improper under NCR’s theory that remediation costs at the site may be divided among the PRPs on the basis of volumetric contribution. The court found that even assuming NCR’s expert testified accurately as to NCR’s contribution to the PCB contamination in the river and bay, that contribution alone would have been sufficient to raise PCB levels above the 1.0 ppm threshold. Furthermore, the primary type of remediation required under the EPA plan — soil dredging — would have carried the same cost regardless of whether the water was lightly or heavily contaminated because the same volume of soil would be dredged under either scenario. In other words, EPA would have required the same remediation work at the same expense even if no other PRPs had discharged PCBs into the water, and NCR could not satisfy its burden to prove otherwise. Indeed, the triggering effect of the 1.0 ppm threshold was lost on NCR’s expert, who testified that his model would split liability 10/90 between one party whose discharges increased the water’s PCB concentration to 3.0 ppm, and another whose discharges increased it to 30.0. The court responded that “both polluters are liable because either discharge of PCB was sufficient to create a condition that is hazardous to human health under EPA guidelines . . . . Put another way, the need for cleanup triggered by the presence of a harmful level of PCBs in the river is not linearly correlated to the amount of PCBs that each paper mill discharged.” Id. The court found this set of facts to mirror the classic joint and several liability hypothetical wherein two separate fires converge on a building; under the restatement, either firestarter may be held 100 percent liable for the resultant damage.


Burlington Northern did not address the first step of the two-part analysis because the parties agreed that the contamination was “theoretically capable of apportionment.” Burlington Northern, 556 U.S. at 615. While Burlington Northern opened the door to an apportionment defense to joint and several liability that included a volumetric contribution component, this case limits the circumstances in which a contribution-by-volume method for assessing apportionment can be used. The decision indicates that volumetric apportionment can be applied only when a responsible party can establish that the amount of its contaminants alone would not have caused the necessary response work. Thus, the holding turned on two key facts: first, PCBs must be remediated only after reaching a particular concentration threshold; and second, the cost to remediate PCBs is static for any concentration over that threshold. Had this case involved a pollutant whose harm increases in proportion to its concentration in the environment, “then a court might be able to measure harm based simply on the volume of contaminant” and thereby permit apportionment among the PRPs. NCR Corp., 2012 WL 3140191 at *7. But where, as here, one or more PRPs’ discharges are independently sufficient to trigger a relatively fixed level of response costs, divisibility cannot apply. This decision will undoubtedly be cited as part of the ongoing development of joint and several liability under CERCLA.

This article was originally published by Bingham McCutchen LLP.