Sixth Circuit: Long-Litigated Superfund Claims Barred by Statute of Limitations

On April 25, 2022, the U.S. Court of Appeals for the Sixth Circuit addressed the application of the statute of limitations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) in Georgia-Pacific Consumer Products LP et al. v. NCR Corp. NCR is the latest in a long line of cases stemming from PCB contamination related to carbonless copy paper manufacturing and recycling. In NCR, the court concluded that the claims of Georgia Pacific (GP) against NCR, International Paper, and Weyerhaeuser for costs stemming from a series of administrative settlements and court judgments were barred by CERCLA’s statute of limitations.

GP filed suit against NCR, International Paper, and Weyerhaeuser (defendants) to recover responses costs for remediation of the Kalamazoo River, alleging that each of these defendants was liable as either a successor to an owner/operator of a mill that discharged PCBs or as an arranger for disposal. The costs at issue stemmed from a collection of administrative settlements and orders that GP had entered into over the years.

Before suing the defendants, GP had previously sued other parties in the 1990s for contribution, and that case resulted in a series of court decisions in 1998, 2000, and 2003 regarding the contamination. These decisions included a declaratory judgment holding GP liable for costs to clean up the river. None of the defendants in the current litigation was a party to the earlier case that led to these court decisions.

The defendants argued that GP’s claims were all barred by CERCLA Section 113(g). The district court analyzed the statute of limitations on a settlement- and order-specific basis, barring claims for some of GP’s costs but not others. The district court found that the declaratory judgment in the 1990s litigation did not trigger the statute of limitations because it merely established liability but did not determine the extent of that liability. The district court also examined the limitations question through the lens of res judicata, finding that the absence of the defendants from the earlier adjudication made it unfair to bar GP’s cost recovery claims because of a litigation that did not involve the current defendants.

On appeal, the Sixth Circuit held that all claims were barred. The court first addressed the issue that the defendants were not parties to the prior lawsuit. The Sixth Circuit found this immaterial, explaining that CERCLA’s statute of limitations does not focus on who was involved in the settlement but rather “what was settled.” Thus, the question was not whether International Paper and Weyerhaeuser had been parties to the prior lawsuit but rather whether the costs GP was seeking to recover were part of the prior lawsuit. The court then turned to the substantive limitations question. Section 113(g) requires, in part, that contribution claims “for any response costs or damages” be brought within three years of (1) “the date of judgment in any action under this chapter for recovery of such costs or damages” or (2) “the date of an administrative order … or entry of a judicially approved settlement with respect to such costs or damages.” The court held that even a “bare bones” declaratory judgment was sufficient because even if the declaratory judgment did not set specific costs, where it required parties to pay response costs, that was sufficient to trigger Section 113(g).

The Sixth Circuit’s decision in NCR is noteworthy because it means that even as against uninvolved parties, court orders may start CERCLA’s limitations period even if those decisions do not attribute specific costs to specific parties. The decision reinforces the importance of developing a full slate of potentially responsible parties as early as possible and to consider carefully the potential effects of strategic decisions in seeking to recover costs associated with remedial actions and removal efforts.

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