Appleton Papers, Inc., Lower Fox River and Green Bay Site (Board decision, December 18, 2012)

Plain-English summary

EPA Region 5 issued a unilateral administrative order requiring Appleton Papers and other potentially responsible parties to perform cleanup work at the Lower Fox River and Green Bay Superfund Site. Appleton Papers petitioned for reimbursement of about $174 million in costs, arguing that a federal court had ruled it was not liable under CERCLA. The Board held that the court's ruling was not final and that the required cleanup action had not been completed, so the reimbursement petition was premature. It dismissed the petition without prejudice and stated that Appleton Papers could refile on the same or similar grounds when the matter became ripe. The Board did not decide whether Appleton Papers ultimately qualified for reimbursement.

Decision snapshot

• Cited authorities: 42 U.S.C. §§ 9601, 9606, and 9607
• Outcome: The reimbursement petition was dismissed without prejudice as premature.
• Key point: A CERCLA reimbursement petition cannot proceed while the underlying liability ruling remains nonfinal and the required response action is incomplete.

Full text (EPA EAB public release)

             BEFORE THE ENVIRONMENTAL APPEALS BOA
         UNITED STATES ENVIRONMENTAL PROTECTION A                                y
                         WASHINGTON, DC                                              DEC 1 8 2012
                                                                                             pals Board
                                          )

In re: )
)
Appleton Papers, Inc. ) CERCLA § 106(b) Petition No. 12-04 (Lower Fox River & Green Bay Site) )
)
--------------------------)

ORDER DISMISSING PETITION FOR REIMBURSEMENT WITHOUT PREJUDICE

     On November 13, 2007, the United States Environmental Protection Agency ("EPA"),

Region 5 ("Region") issued a unilateral administrative order ("UAO") under section 106 of the

Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended

by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. §§ 9601-9675

("CERCLA"). The UAO required Appleton Papers, Inc. ("API") and other potentially ·

responsible parties ("PRPs") to conduct remedial action, including dredging, capping and

covering of contaminated sediments, and long-term monitoring and maintenance, to address

polychlorinated biphenyl-contaminated sediments at the Lower Fox River and Green Bay

Superfund Site ("Site") in northwestern Wisconsin. When the remedial actions have been

completed, the UAO requires certain procedures to be followed, including notification by

respondents and certification by the Region, for determining that respondents have performed the

required actions at the Site in full satisfaction of the UAO.

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On June 8, 2012, API filed a petition with the Environmental Appeals Board ("Board")

for reimbursement in the above-captioned matter seeking to recover approximately $174 million

in costs API had incurred in complying with the UAO. Petition for Reimbursement of Costs

(June 8,2012) ("Petition") at 2. Although it is undisputed that all of the cleanup actions

contemplated by the UAO have not been completed, API nevertheless asserts that it is entitled to

reimbursement under CERCLA § 106(b), 42 U.S.c. § 9606(b), because in an ongoing

enforcement action initiated by the United States and the State of Wisconsin in the U.S. District

Court for the Eastern District of Wisconsin, 1 the District Court ruled that API is not a liable party

under CERCLA. The District Court's order is attached as Exhibit 4 to API's Petition. See

Decision Granting Motion for Reconsideration (Apr. 10,2012) ("District Court Order"). API

asserts that due to the District Court Order ruling that API is not liable under CERCLA, all of .

API's required actions under the UAO should be deemed completed for purposes of its

reimbursement petition. Petition at 4.

   The Region filed a response seeking dismissal of the petition on the ground that API has

not completed the actions required by the UAO. In the alternative, the Region moves for a stay

of the proceedings because the issue of API's liability currently is being litigated in the United

States District Court for the Eastern District of Wisconsin. See Motion to Dismiss the Petition of

Appleton Papers Inc. orin the Alternative Motion to Stay Proceedings (July 13,2012) ("Motion

to Dismiss"). API filed a reply to the Region's response, in which API urges this Board to deny

the Region's Motion to Dismiss. See Memorandum of Appleton Papers Inc. In Opposition to

    IThe enforcement action is captioned: United States and State of Wisconsin v. NCR

Corp., et ai, Case No.1 O-CV-910 (E.D. Wis.).

                                             -2­

EPA's Motion to Dismiss Petition for Reimbursement (Aug. 1,2012) ("API's Reply"). API

asserts that even though the work required by the UAO has not been completed, CERCLA's

reimbursement provisions must be interpreted flexibly where, as here, a recipient of a UAO "was

adjudicated by a federal court to have no CERCLA liability." API's Reply at 2. API states

further that the Region has failed to articulate any basis for staying this matter.

    By order dated August 16, 2012, the Board sought clarification from the Region on three

issues raised in the Petition and in the Region's Motion to Dismiss: the status of the District

Court Order and the timing ofthe appeals process; whether API is entitled to reimbursement if

the District Court Order is affinned on appeal; and the relevance of a cost sharing arrangement

between API and other PRP's. See Order for Clarification (Aug. 16,2012). The Region filed a

response to the Order for Clarification on October 11,2012. See EPA's Response to Order for

Clarification. API filed a reply on November 1, 2012. See Memorandum of Appleton Papers

Inc. in reply to the Board's Order for Clarification ("API Clarification Reply").

    Section 106(b)(2) of CERCLA allows any person who has complied with an

administrative order issued by EPA or another federal agency under section I06(a) ofCERCLA

to petition for reimbursement of the reasonable costs incurred in complying with the order, plus

interest. 42 U.S.C. § 9606(b)(2). To establish a claim for reimbursement, a petitioner must

demonstrate it was not liable for response costs under CERCLA section I07(a), 42 U.S.C.

§ 9607(a), or that EPA's selection of the ordered response action was arbitrary and capricious or

was otherwise not in accordance with law. CERCLA § I06(b)(2)(C) - (D), 42 U.S.c.

§ 9606(b)(2)(C) - (D). As this Board previously has stated, completion of the required action is

                                             -3­

one of four express statutory conditions for seeking reimbursement. 2 CERCLA § 106(b),

42 U.S.C. § 9606(b); see In re Glidden Co., 10 E.A.D. 738, 746 (EAB 2002); In re A&W

Smelters and Refiners, Inc., 6 E.A.D. 302, 315 (EAB 1996), affd962 F. Supp 1232 (N.D. Cal.

1997), aff'd in part & rev 'd in part other grounds, 146 F.3d 1107 (9th Cir. 1998). The "required

action" refers to the specific cleanup actions required by the terms of the UAO. Once a party

completes these actions, it can seek reimbursement for the costs under CERCLA § 106(b),

42 U.S.C. § 9606(b). Employers Ins. of Wausau v. Browner, 52 F.3d 656, 663 (7th Cir. 1995).

   API does not dispute that completion of the required action is a statutory prerequisite to

seeking reimbursement. Rather, API asserts that the Board should hold that the required action is

complete in this case because, pursuant to the District Court Order, API is not a liable party

under CERCLA. According to API, "while the remediation itself is not yet complete, it is

undisputed that all of the 'required action' by API under the [UAO] is now complete. The

'completion of the required action' was on April 10, 2012," upon issuance of the District Court

Order. Petition at 10. Although API does not cite to any case law, nor is the Board aware of any

case law, explicitly holding that a prior determination of non-liability constitutes "completion of

the required action" for purposes of CERCLA § 106(b)(2)(A), 42 U.S.C. section 9606(b)(2)(A),

API asserts that such a holding is consistent with the Seventh Circuit's reasoning in Employers

Ins. of Wausau v. Browner, 52 F.3d 656,663 (7th Cir. 1995). See Petition at 9-10. In Wausau,

the Seventh Circuit made clear that a party can seek reimbursement only when it completes the

    2 The other prerequisites the petitioner must establish before the Board will consider the

merits of a reimbursement request are that the petitioner: 1) complied with the order; 2) submitted the petition within sixty days of completing the action; and 3) incurred costs responding to the order. CERCLA § 106(b); 42 U.S.C. § 106(b); see In re A&W Smelters and Refiners, Inc., 6 E.A.D. 302, 315 (EAB 1996).

                                            -4­

actions required by the terms of the UAO. Wausau, F.3d at 663. Under certain

circumstances, however, the court opined that than of the actions

required by the UAO may be sufficient for purposes of ""''-'XU£,LF. reimbursement, where, for

example, a party cannot U£lJ'''''''' the required action for reasons beyond its control, where the

agency takes steps to postpone completion or unreasonably refuses to certify completion, or

where the UAO is overly broad. Id. at 663-65. Under circumstances, the court suggested

the need for flexibility in interpreting reimbursement provisions. Id. at 665. API

    this Board to              such flexibility in this case given      District Court's liability

determination.

     The issue of whether a prior determination of non-liability constitutes "completion of the

required action" for purposes of CERCLA 106(b) is one of first impression and one that

thorough review and analysis at appropriate time. However, as the """'.F.£'U'H points out in its

Motion to and as API has conceded, see Clarification Reply at 1, the District

Court's liability determination is nota final order and is subject to appeal. It would be highly

inefficient Board to an Agency ruling on this issue District Court

Order is subject to revision before entry final judgment 3 or reversal on appeaL See, e.g., re

Desert Rock Energy PSD Appeal Nos. 08-03 through 08-06, slip op. at 18

Sept. 2009) (stating that it would be highly inefficient for the Board to a ona

permit where the was contemplating vu"'.. <...,~'" to permit), 14 _ ; In re Titan

     3 See   Fed. Civ.      54(b) (absent         a final            an order or decision "that

adjudicates than all claims or the than all parties does not the action as to any of the claims or parties and may be revised at any time before of a judgment adjudicating all the claims and all the parties' rights and liabilities.").

                                                     5­

---------

Tire § 106(b) Petition No. 10-01, at 4 10,2010) (Order Granting

Stay of Proceedings) (staying CERCLA 106(b) proceedings before the Board on judicial

economy grounds where liability central to the Board's deliberations is concurrently being

      in federal district court). Under these circumstances, the Board has determined that the

Petition is not ripe review at the present time. 4 At a minimum, Board consideration of API's

petition must be delayed until final judgment is "'...."'. . "'," and the time for an appeal has

    In its reply to the Region's Motion to Dismiss, API asserts that the delay resulting from

the dismissal of Petition this matter would result injustice" to API. Reply

at 2. "UIPH'>" the Board notes that API could have moved for certification of the District Court

Order as a final judgment and thereby potentially avoided or minimized this delay. See

Civ. Pro. 54(b) ("When an action ",,."''''''M more than one claim * * * or when multiple
are involved, the court may direct entry of a final judgment as to one or more, but

than all, claims or parties only the court expressly determines that there is no just reason for

delay.").5 Had API filed such a motion, the District Court would had the opportunity to

    4 The Region also has           that API failed to comply with certain requirements of the

UAO during 2011 and 2012. See Motion to Dismiss at 11-14. As points out, it was during this time period that API was challenging its liability in the enforcement action, an action which resulted in the district court's liability determination. Because any Board review of the merits of this assertion might be by a final judgment on liability, the Board does not reach this issue at the present time.

     5    purpose of rule 54(b) "is to avoid the possible injustice a delay in

judgment on a distinctly separate claim or as to fewer than all of the parties until a final adjudication of the entire case by making an immediate appeal available. 10 Charles A. Wright et aI., Federal Practice and Procedure § at 33 (3d ed. 1998). "The rule attempts to strike a balance between the undesirability of more than one appeal in a action and the need for making review available in multi-party or multi-claim situations at a time that best serves the

                                                 -6­

weigh the equities and determine if entry of a final judgment was appropriate. 6 See Curtiss-

Wright Corp. v. Gen. Elec. Co., 446 U.S. 1, (1980) (the task of weighing and balancing

contending factors regarding certification under Rule 54(b) is peculiarly one for the trial judge; a

trial judge's determination on certification is entitled to substantial deference on review). By

failing to seek certification of the District Court Order as a final judgment under Federal Rule of

Civil Procedure 54(b), API bears at least partial responsibility for any delay in the Board's review

of the Petition for Reimbursement under CERCLA § 106(b). Further, API has failed to convince

the Board that API will suffer any "gross injustice" from today's dismissal without prejUdice.

    For the reasons stated above, API ' s Petition is hereby dismissed without prejudice as

premature. In re Cozinco, Inc., 7 E.A.D. 708, 724-25 (EAB 1998) (remedy for prematurely filed

petition for reimbursement is dismissal without prejudice). This order solely addresses the

timeliness of the Petition and in no way precludes API from re-filing the Petition based on the

same or similar grounds when the matter is ripe for Board review.

    So ordered.7

Dated: .iLtc . fEr e5W/OV ENVIRONMENTAL APPEALS BOARD

                                   BY: ~Y1t- · ~
                                                 Leslye M. Fraser
                                          Environmental Appeals Judge

needs of the litigants." Id. at 35 .

    In responding to the Board's August 16, 2012 Order for Clarification, the Region stated,
    6

and API has not disputed, that no party sought certification under Rule 54(b). See EPA's Response to Order for Clarification at 1 (Oct. 11,2011).

   7 The two-member panel deciding this matter includes Environmental Appeals Judges

Leslye M. Fraser and Kathie A. Stein.

                                            -7­

CERTIFICATE OF SERVICE

   I hereby certify that copies of the forgoing Order Dismissing Petition for Reimbursement

Without Prejudice in the matter of Appleton Papers, Inc., CERCLA § 106(b) Petition No. 12-04, were sent to the following persons in the manner indicated:

By First Class Mail : Ronald R. Ragatz
Dennis P. Birke
Megan A. Senatori
DeWitt Ross & Stevens S.C.
Two East Mifflin Street
Madison, WI 53703

                         Gregory A. Krauss
                         1629 K St., NW, Suite 300
                         Washington, D.C. 20006

                         Heidi Davidson Melzer
                         Melzer Law, LLC
                         4469 Wyandot Trail
                         Green Bay, WI 54313

By Pouch Mail: Richard M. Murawski
Associate Regional Counsel (C-14J)
U.S. EPA Region 5
77 West Jackson Blvd.
Chicago, IL 60604

By Inter-Office Mail: Antoinette Powell-Dickson (2271A)
Office of Site Remediation Enforcement
U.S. EPA

Dated:
DEC 1 8 2012
Secretary