A recent decision by the United States District Court for the Western District of Michigan dismissed two defendants from a contribution action under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) even though the evidence indicated that they probably discharged low levels of PCBs to the Kalamazoo River (River). At first, the decision appears to flout the conventional teaching that CERCLA liability applies to anyone who disposes of any quantity of a hazardous substance, no matter how small. A closer examination, however, shows that the court based its decision to dismiss the two defendants on the court's broad authority under Section 113(f) of CERCLA to consider "equitable factors" in allocating cleanup costs among liable parties. Section 113 authorizes a party that is liable for cleanup costs at a contaminated site to sue other liable parties for contribution towards paying for the cleanup of the site.
The Kalamazoo River Study Group (KRSG) consists of three companies that operated paper mills on the River in southwest Michigan. The members of the KRSG discharged large quantities of polychlorinated biphenyls (PCBs) to the Kalamazoo River as a result of recycling a type of carbonless copy paper that included PCBs. These operations were largely responsible for large quantities of PCBs -- between 350,000 pounds and 4 million pounds -- which contaminated sediments in the Kalamazoo River and nearby ponds and landfills, as a result of which the River became a National Priorities List Site.
The KRSG sued eight other corporations in a CERCLA contribution action, seeking to recover some of the KRSG's costs of conducting a Remedial Investigation/Feasibility Study. Three defendants moved for summary judgment on liability. The court granted two of the three motions.
Defendant Menasha Corporation argued that its mill on the River used only PCB-free wood chips, kraft paper, and old corrugated containers in its recycling process, and, therefore, did not discharge any PCBs. The KRSG argued that very low levels of PCBs were found in Menasha's finished product on two occasions, and that Menasha's wastewater discharged to the River tested positive for PCBs on four occasions (at very low levels, all less than 1.0 part per billion). For purposes of the summary judgment motion, the court considered the evidence in the light most favorable to the KRSG, and assumed that some PCBs had entered Menasha's feedstock through recycled paper, and that some of those PCBs entered Menasha's wastewater stream and were discharged into the River. Nonetheless, the court held that the evidence, even viewed favorably to KRSG, was "not sufficient to support Plaintiff's allegations of liability. The frequency and quantity of PCB releases by Menasha is purely theoretical and speculative . . . In comparison to the high level of PCBs that Plaintiff's members are responsible for, any PCBs released by Menasha fall far short of meeting the threshold-of-significance standard. The releases are so minimal by comparison that they do not equitably justify a response by Menasha." (Emphasis added.)
Defendant Pharmacia & Upjohn Company (Upjohn) had used PCBs in certain dust control devices from 1950 through the mid-1980's at two of its properties. Upjohn occasionally rinsed some of the oil from these devices into a sewer that led to the City of Kalamazoo (City) Sewage Treatment Plant. PCBs were detected in the rinsewater at levels ranging up to 2.3 parts per billion. The court noted that these discharges did not go directly to the River, but instead were discharged to the Kalamazoo Wastewater Reclamation Plant (KWRP), which removed at least some of the PCBs, particularly after the City added advanced treatment in 1985. The court gave little weight to the testimony of a KRSG expert who estimated that before 1985, the KWRP would have been able to remove only about half of the PCBs discharged by Upjohn, so that the other half would have been discharged to the River. The court rejected KRSG's arguments, considering them "speculative at best," because there was "little concrete information" concerning the various aspects of Upjohn's operations and the ultimate fate of any PCBs discharged from Upjohn's facilities. The court concluded that, at most, Upjohn's operations "resulted in the occasional and incidental release to the KWRP of very small quantities of PCBs," and the court, therefore, granted Upjohn's motion for summary judgment.
In contrast, however, the court refused to grant summary judgment to defendant Rock-Tenn, which owned a recycled paperboard mill also located on the River. Rock-Tenn had acquired its mill from Mead Corporation. During Mead's ownership, a wastewater treatment lagoon at the mill had accumulated sludge containing PCBs in concentrations of up to 20,000 parts per billion. Rock-Tenn continued to use the wastewater treatment lagoon, although it contended that it did not add any new sources of PCB contamination. On three occasions, PCBs were detected in Rock-Tenn's wastewater effluent, between 0.19 and 0.47 parts per billion. The court refused to grant summary judgment to Rock-Tenn because the court believed that there was a question of fact whether Rock-Tenn continued to resuspend sediment from the treatment lagoon and discharge it to the River on a regular basis. The court distinguished Rock-Tenn's situation from Upjohn's in three ways: 1) Rock-Tenn's discharges resulted from daily wastewater treatment activities, rather than intermittent discharges; 2) Rock-Tenn's lagoons contained a high concentration of PCBs; and 3) Rock-Tenn discharged its wastewater directly to the River rather than to the sewage treatment plant.
Strictly speaking, the court's legal rationale does not change the principle that a party may be held liable under CERCLA for disposing of even a minute quantity of a hazardous substance. The court used its equitable authority under the contribution provision of CERCLA to determine that the levels of PCBs contributed by Menasha and Upjohn, if any, were so low, in comparison with the amount discharged by KRSG, that it would be inequitable to require Menasha or Upjohn to reimburse KRSG for any of its costs. The court relied on a recent decision by the United States District Court in Massachusetts, Acushnet v. Coaters, Inc., which held that a discharge by a contribution-defendant must meet a certain "threshold of significance" in order to impose CERCLA liability. The court also found support in language in the Sixth Circuit's recent decision in United States v. Cordova Chemical Company, which states that "liability [under CERCLA] attaches only to those parties who are culpable in the sense that they by some realistic measure helped create the harmful conditions."
Kalamazoo River Study Group v Rockwell International, et al. 1998 W.L. 111682 (W.D. Mich. March 6, 1998).
This article was prepared by Christopher J. Dunsky, a partner in our Environmental Department, and previously appeared in the May, 1998 edition of the Michigan Environmental Compliance Update, a monthly newsletter prepared by the Environmental Department and published by M. Lee Smith Publishers.