United States v. NCR Corp. (960 F. Supp. 2d 793, 2013)

FINDINGS OF FACT AND CONCLUSIONS OF LAW ON PLAINTIFFS’ FIFTH CLAIM FOR RELIEF

WILLIAM C. GRIESBACH, Chief Judge.

I. Introduction

This is an action brought by the United States and the State of Wisconsin under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601 et seq., seeking, among other relief, an injunction requiring the defendant paper manufacturing and coating companies to comply with the most recent order of the United States Environmental Protection Agency (EPA) concerning the remediation of polychlorinated biphenyls (PCBs) that they discharged into the Lower Fox River between 1954 and continuing into the early 1970s. On April 27, 2012, 2012 WL 1490200, this Court issued a preliminary injunction requiring Defendant NCR Corporation to comply with a Unilateral Administrative Order (“UAO”) issued by the Environmental Protection Agency (EPA) in 2007. That decision was affirmed by the Seventh Circuit United States Court of Appeals in August 2012. The United States and the State of Wisconsin then sought to make the injunction permanent, and to have it deemed enforceable against the other defendants as well. To that effect, in December 2012 the defendants appeared for an eleven-day trial to the Court on the fifth claim for relief presented in the Plaintiffs’ amended complaint. In that claim, the Plaintiffs sought a judicial determination that the defendants— NCR and other paper companies situated in Little Lake Butte des Morts and along the Lower Fox River — must comply with the 2007 UAO and continue cleaning up the Lower Fox River, particularly the stretch between De Pere and Green Bay, a portion of the river designated Operable Unit 4, or just OU4. In large part, the trial and its related pre- and post-trial motion practice were a comprehensive effort designed to allow this Court to determine whether the preliminary determinations it had made in its April 27, 2012 ruling should be made permanent.

Prior to trial, the court granted summary judgment affirming the propriety of the clean-up remedy, holding that the Administrative Record compiled by the EPA and the Wisconsin Department of Natural Resources demonstrates that the selected remedy is not arbitrary and capricious or otherwise contrary to law. Based on that ruling, along with the stipulations of several parties, the liability of all of the recipients of the UAO, with the exception of Appleton Papers Inc., which had been previously dismissed from the case, was established. The central issue that remained for trial was whether the financial responsibility for the clean-up of the downstream sections of the river was a joint and several obligation of the upstream defendant dischargers or merely several. In other words, the key issue was whether the general public, represented by the Plaintiffs, was entitled to a ruling requiring each of the defendants to comply with the UAO, leaving those defendants free to seek further resolution among themselves of any disputes they may have over what share of the clean-up costs each should bear.

Section 107(a) of CERCLA imposes strict liability for contamination upon the owner of any facility that discharges hazardous substances into the environment. 42 U.S.C. § 9607(a). But what is the rule where the owners of two or more facilities discharge hazardous substances into a body of water such as a river? Federal courts have consistently interpreted section 107(a) to impose joint and several liability on responsible parties unless they can show that a reasonable basis for apportionment of the harm exists. Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 613-15, 129 S.Ct. 1870, 173 L.Ed.2d 812 (2009). This rule is consistent with the Restatement of the Law of Torts: “Where the tortious conduct of two or more actors has combined to bring about harm to the plaintiff, and one or more of the actors seeks to limit his liability on the ground that the harm is capable of apportionment among them, the burden of proof as to the apportionment is upon each such actor.” Restatement (Second) of Torts, § 433B(2). The reason for the rule placing the burden of proof as to apportionment on the defendants is to avoid the injustice of allowing multiple defendants who have combined to cause the plaintiff harm to further burden the plaintiff by requiring that he or she present such evidence or, even worse, allow the defendants to escape liability where the nature of the harm makes apportionment difficult or impossible. “As between the proved tortfeasor who has clearly caused some harm, and the entirely innocent plaintiff, any hardship due to lack of evidence as to the extent of the harm caused should fall upon the former.” Id., cmt. d.

Further, while it would be unjust to hold a defendant liable for the entire harm sustained by the plaintiff when such defendant caused only a portion of-it, the same is not the case when the defendant’s own conduct, either by itself or combined with others, was a cause of all or substantially all of the harm. In the latter case, the plaintiff can look to such a defendant for the entirety of the loss and leave it that defendant to seek equitable contribution from other parties who may be liable. This is what is meant by joint and several liability: “Each of two or more persons whose tortious conduct is a legal cause of a single and indivisible harm to the injured party is subject to liability to the injured party for the entire harm.” Restatement (Second) of Torts, § 875.

These are the principles of law that underlie the instant dispute. In many cases, the question of whether a party’s liability for harm is both joint and several or merely several is almost entirely academic. This is because it will often make little difference whether the liability of multiple responsible parties is apportioned in the trial of the plaintiffs claim against the defendants or in the trial of a separate claim for contribution among the several responsible parties. As long as all of the defendants who share responsibility for the harm are solvent and share the same level of culpability, they are assured it will all be sorted out in the end. Where either condition is absent, however, a finding of joint and several liability can dramatically increase a responsible party’s ultimate liability.

If, for example, one or more of the parties responsible for the pollution of a river was insolvent, the remaining parties, assuming their liability is joint and several, would be liable for the entire clean-up even though they had no chance of recovering in contribution from the other responsible party or parties. This result rests on the view that an innocent plaintiff should not suffer the wrong caused by an insolvent wrongdoer when another wrongdoer is also liable. Matthies v. Positive Safety Mfg. Co., 2001 WI 82, ¶ 11, 244 Wis.2d 720, 628 N.W.2d 842. The rule holding responsible parties jointly and severally liable, where appropriate, is therefore an important tool in furthering CERCLA’s policy of promoting the timely clean-up of hazardous waste sites and ensuring that the costs of such cleanup efforts are borne by those responsible for the contamination. Burlington, 556 U.S. at 602, 129 S.Ct. 1870.

Whether or not responsible parties are jointly and severally liable also takes on greater significance when the level of culpability of those responsible for the harm differs. Again, the Restatement provides guidance: “There is no right of contribution in favor of any tortfeasor who has intentionally caused the harm.” Restatement (Second) of Torts, § 886A(3). Although the rule speaks of harm that is intentionally caused, the comments to this section make clear that the rule has been applied to reckless, wilful or wanton conduct as well. Id., cmt. k; see also Browning-Ferris Industries of Illinois, Inc. v. Ter Maat, 195 F.3d 953, 959 (7th Cir.1999) (noting that “polluters differ in the blameworthiness of the decisions or omissions that led to the pollution, and blameworthiness is relevant to an equitable allocation of joint costs,” while acknowledging that “it would not entitle the judge to make one polluter pay for separable costs wholly imposed by other polluters”). This factor is what makes the issue of joint and several liability key in this case.

In 2008 NCR, along with Appleton Papers Inc., brought a lawsuit for contribution against the other Potentially Responsible Parties (PRPs) in this action. In a 2009 decision, however, the court ruled that equitable principles (which apply in contribution cases but not in divisibility/apportionment cases) precluded NCR from receiving contribution from the other PRPs and required that the other PRPs receive contribution from NCR for the money they had paid. Specifically, the court concluded that NCR either knew or should have known that PCBs were environmentally toxic, but instead of halting sales of its PCB-laden product it actually increased production to record levels. In the court’s view, NCR brought about the PCB problem and failed to mitigate its extent when it had the chance, and therefore should bear the cost of the cleanup rather than having it shared by parties who had no idea they were using dangerous toxins in their manufacturing process. Appleton Papers Inc. v. George A Whiting Paper Co., No. 08-C-0016, 2009 WL 5064049 (EJD.Wis. Dec. 16, 2009).

The fact that NCR has been held barred under equitable principles from obtaining contribution from other contributors to the PCB contamination distinguishes this case from most other CERCLA actions. If that ruling stands, NCR would be responsible for paying the entirety of the estimated $700 million remediation costs for OU2 through OU5. But if NCR can show that the harm is divisible, it will no longer be considered jointly and severally liable for the harm but only severally liable for its portion of the harm, which NCR argues is at most 20%. The distinction between joint liability and merely several liability thus has major implications for NCR and for the other defendants.

A finding of joint liability also has serious implications for the government’s enforcement efforts. First, a finding of joint liability would allow the government to pursue any of the jointly liable PRPs for funding of the cleanup effort. Second, NCR has already paid substantially more for the cleanup in OU4 than the 20% or less it believes is its divisible share. Thus, if NCR succeeds in proving its divisibility defense, the government can no longer require NCR to keep funding the remediation.

This, then, is the underlying context in which the dispute between the parties arises. Having considered the evidence presented and the arguments of counsel, the court now concludes that NCR and the upstream defendants have failed to prove that the harm at issue is divisable for purposes of determining liability under CERCLA. This is not to say that the costs of the clean-up cannot be reasonably apportioned among the responsible parties. Clean-up costs in CERCLA actions can always be apportioned among the responsible parties; that is the whole point of section 113(f), which explicitly authorizes a court to “allocate response costs among liable parties using such equitable factors as the court determines are appropriate.” 42 U.S.C. § 9613(f)(1). If the costs of clean-up were not reasonably divisible in some fashion, it would make little sense to allow for contribution. Rather, as explained below, it is the upstream defendants’ failure to demonstrate how the downstream harm can be reasonably apportioned among the multiple causes of that harm that makes their liability joint and several. More specifically, neither NCR, nor any of the other responsible parties have proved that each individually was not either a sufficient or necessary cause of the harm at issue. Accordingly, the relief requested in the fifth claim in the plaintiffs’ amended complaint will be granted.

II. Background

A. The PCB Problem

Between 1954 and 1971 the NCR Corporation sold a product called carbonless copy paper, which proved to be a useful product having a wide array of commercial applications. A key component of that paper was an emulsion containing Aroclor 1242, a type of PCB manufactured by the Monsanto Company. PCBs have subsequently been shown to cause serious health problems in humans. Throughout this period, NCR sold its emulsion to a company called Appleton Coated Paper Company (“ACPC”), which coated paper with the emulsion to produce the carbonless copy paper. NCR then sold that coated paper on the commercial market.

The process of coating paper with NCR’s emulsion resulted in releases of emulsion into the Lower Fox River from ACPC. As discussed in more detail below, estimates of ACPC’s releases of emulsion into the river were between roughly 10 and 40% of the total PCB releases to the river. In 1970 NCR purchased Appleton Coated Paper Company, and as a result NCR is liable for the discharges made by ACPC. The fact that NCR happened to be the source of the PCBs in the first place does not impact its liability, although (as the court held in the parallel case and as discussed in Part II below) it has major implications if equitable considerations rule the day.

Most of the remainder of the PCB pollution in the Lower Fox River arises out of the recycling, rather than the production, of carbonless copy paper. Many paper mills take in bales of used paper (called post-consumer waste paper), mix the paper into a watery slurry, and then recover the paper fibers for use in producing new paper. Discharges from this process represented a relatively small 4 to 12 % of PCBs discharged into the river, according to 1998 government estimates. (Ex. 2127 at NCR-FOX 438509.) The rest of the PCB discharges (the majority of the total) resulted from several mills’ use of the “broke” and trim from ACPC’s coating process. Broke is an industry term denoting the unusable paper scraps that are produced during the manufacture of coated paper. In these ways, many paper mills along the river unwittingly took in large quantities of contaminated paper products for re-use in their own paper. The papermaking process is water-intensive, and these mills ultimately released significant quantities of PCBs from recycled NCR paper into the river, either directly or through publicly owned treatment works (“POTW”). (After a previous trial in the parallel case, the court determined that ACPC had not “arranged” for the disposal of its broke, and thus NCR is not liable on the basis of its sales of broke to other paper companies. Instead, its liability results from the discharges ACPC itself made during the production of NCR paper.) In sum, there were three principal ways that PCBs were released into the River: (1) ACPC released emulsion containing PCBs during the production of NCR paper; (2) some mills recycled post-consumer waste paper that had small quantities of NCR paper in it; and (3) some mills directly recycled NCR “broke,” which contained NCR’s emulsion.

B. PCBs and the Lower Fox River

When PCBs are discharged into a waterway, they tend not to dissolve. Instead, because PCBs are “hydrophobic” substances, they adsorb (attach) to sediments in the river and then either deposit in the riverbed or flow through the river into Green Bay. This affinity for solids (particularly finer solids, which have relatively more surface area than larger solids) is the primary reason that many PCBs have deposited in substantial quantities in the river bottom. The depositing of PCBs in the riverbed is thus dependent not only on the quantity (mass) of PCBs released but also on the amount and kind of sediment available to which the PCBs can adsorb and then deposit.

The Lower Fox River stretches some 39 miles from Lake Winnebago to the mouth of Green Bay. For remedial purposes it has been administratively divided into five “operable units,” called OUs: OU1 is Little Lake Butte des Morts; OU2 is the stretch from Appleton to Little Rapids; OU3 is Little Rapids to De Pere; OU4 is De Pere to Green Bay; and OU5 is Green Bay itself. OU1 has already been cleaned up (at a cost of nearly $100 million), and most parts of OU2, OU3 and OU5 are being monitored rather than remediated because levels of contamination are relatively low. At trial the key issue was the ongoing cleanup effort in OU4, which is the most complex and expensive cleanup site in the whole project, with estimates suggesting it could cost on the order of $700 million to remediate.

Much of the complexity of this case is due to the fact that there were a number of companies discharging PCBs from different locations along the river. For example, the PCBs from dischargers far upstream in OU1 deposited themselves in different quantities and concentrations all along the river’s entire 39-mile stretch, with a large but unknown quantity not depositing at all and making their way out into the Bay. Even without knowing anything about hydrodynamics or bathymetry (the study of underwater geography), one can envision the difficulty in tracing PCB concentrations in OU4 to the various dis-chargers, some of which are more than thirty miles upstream.

Each discharge site has its own idiosyncratic characteristics, which adds still further to the difficulty in tracing PCBs. OU1, OU2 and OU3 are faster moving sections of river that, according to one expert, have a “trapping efficiency” of between 0.2(OU2) and 7 % (OU1). (Tr. 2183-84.) This means that PCBs discharged into those faster-moving sections do not settle as readily as they do in OU4, which is a slower and deeper stretch of river. And PCBs that do settle in these areas are subject to “scouring,” which is the process of being swept up by currents after settling. These PCBs are then re-suspended in the water column and then they either redeposit or travel farther downstream. Thus, in order to settle to the river bottom in significant quantities, PCBs need a sufficient quantity of solids to attach to, and they need a hospitable environment for settling as well. This partially explains why the slower-moving OU4, parts of which were described as a “sediment trap,” contains the largest amounts and concentrations of settled PCBs.

The varying speeds of the river are explained in large part by the river’s elevation changes. Lake Winnebago and the Appleton stretches of the Lower Fox River are nearly 750 feet above sea level, whereas Green Bay and OU4 are less than 600 feet above sea level. This drop in elevation is roughly equivalent to that of Niagara Falls, and much of the elevation change occurs in a small section of the river in OU2. Thus, as discussed at some length below, sediment containing PCBs has a general tendency to flow downriver rather than settle. Exhibit 9962 demonstrates the drop in elevation:

A further feature aiding the downstream movement of PCBs is the design of its nine federally-operated dams. These dams all contain what are known as Tainter gates (named for their inventor, Jeremiah Burn-ham Tainter, who designed the first such gate at a dam in Menominee, Wisconsin). For our purposes, the salient design feature of Tainter gates is the fact that they open from the bottom, rather than letting water spill over from the top. (Tr. 2307:12-14.) This means that sediments that accumulate at the base of a dam are allowed to sluice through the bottom rather than build up behind the dam. (Tr. 2307:18-21.)

A final characteristic of OU4 is the presence of a shipping channel that was dredged periodically by the Army Corps of Engineers. The dredging process removed layers of sediment and moved the sediment to the sides of the channel, thus redistributing the PCBs that had already settled. In addition, the increased depth of the dredged channel, combined with the slower current, made the channel area a sediment trap, an area highly conducive to the deposition of solids and the PCBs that had attached to them. Thus, large masses of PCBs that had arrived from upstream sources ended up settling in the dredged channel of OU4 and then being dispersed by dredging.

The map below shows the length of OU4, from the De Pere dam in the upper left to the mouth of Green Bay in the inset on the bottom. The areas that are subject to dredging are shown in green (the majority of this dredging has already been done in upper OU4), as well as high-concentration areas in red. (Ex. 5003, 5004.)

In sum, several features of 0U4 render it a far more depositional area than the other sections of the river. Its lower elevation, greater depth and slower currents made it a hospitable place for PCBs to settle, and the dredging channel added to that effect. On top of that, the swift current of other sections of the river, as well as the dams’ Tainter gates, all aided the process of PCBs flowing downstream and settling in OU4.

C. The Defendant Facilities

As noted above, the paper companies that discharged PCBs into the river were not consolidated in a single area. Instead, they lined the river from its source in OU1 (Little Lake Butte des Morts) all the way to OU4. The environmental harm in OU4 was caused primarily by three major dis-chargers: P.H. Glatfelter, located in OU1; NCR, in OU2; and Georgia-Pacific, in lower OU4. What follows is a thumbnail sketch of each PRP and its location along the river.

1. Bergstrom Mill (P.H. Glatfelter)

The Bergstrom mill, now owned by P.H. Glatfelter, lies at the upstream end of OU1, some 39 miles from the mouth of Green Bay. The Bergstrom mill took in large quantities of NCR broke to recycle for use in its paper. As with the other recycling mills, it released significant amounts of PCBs into the river when it discharged its effluent. Initial government estimates suggested that Glatfelter’s mill was responsible for some 16 to 27% of PCBs released into the river. (Ex. 2127 at NCR-FOX 438509; Ex. 7257, Table 4.)

2. Wisconsin Tissue Mills (WTM I Company)

Wisconsin Tissue Mills is also an OU1 Defendant. During the production period (1954-71), it discharged directly to the Lower Fox River only sporadically during sewer bypass events. After 1976, it discharged its wastewater through its own treatment plant. Its liability arises from the fact that during the PCB era it took in significant (but relatively smaller) quantities of NCR broke and then discharged effluent to the river through the Neenah-Menasha publicly owned treatment works.

3. Menasha Corporation

Menasha Corporation owned the John Strange Paper Mill in Menasha, Wisconsin, until 1983. Unlike many of the other mills, the John Strange facility was not a de-inking mill, meaning that it did not remove the inks from paper it recycled. The John Strange facilities recycled little or no NCR broke directly, but it did recycle post-consumer waste paper, called mixed paper. It used this paper to manufacture paperboard products such as boxes and cardboard tubes rather than traditional office paper. Mixed paper, as the name implies, included all sorts of office paper, including NCR paper in quantities that are disputed. Because mixed paper includes only a small but unknown amount of NCR paper, the presence of PCBs in post-consumer mixed paper is believed to be significantly lower than the levels found in NCR broke.

4. CBC Coating

CBC Coating, Inc. operated the Riverside Paper production facility in Appleton. Like Menasha, CBC was not a de-inking mill, meaning that it did not use NCR broke directly in its recycling process. Instead, it took in post-consumer wastepaper, some of which contained PCBs from NCR’s paper. CBC discharged its waste-water to the City of Appleton’s POTW. Its releases are not believed to be a significant source of PCBs, however.

5. Appleton Coated Paper Company (NCR)

As noted earlier, Appleton Coated Paper Company, now owned by NCR, discharged PCBs differently than the other mills. Instead of discharging through the process of recycling broke, ACPC’s discharges were a direct byproduct of the process of coating NCR paper with the emulsion that contained PCBs. These production releases of PCBs were released to the river when small amounts of the emulsion (somewhere between 1 and 5%) were lost during production and after occasional events like spills. A preliminary government estimate suggested that ACPC’s facilities were responsible for nearly 40% of PCBs released into the river. (Ex. 7257, Table 4.)

6. U.S. Paper

U.S. Paper Corporation operated a mill in De Pere at the bottom of the De Pere Dam, which is located at the beginning (upstream) end of OU4, also known as OU4A. Like Menasha’s John Strange mill, U.S. Paper’s mill was a paperboard mill making cardboard products, including toilet paper rolls. Thus, it did not recycle NCR paper, which was white, as a significant part of its business. In about 1966, however, it began manufacturing white paper rolls using white NCR broke, but even then it used only a small portion of NCR broke in the process, as white rolls themselves constituted only a limited portion of its recycled product business.

7. Georgia-Pacific

Finally, the Fort Howard mill owned by Georgia-Pacific operated in the downstream portion of OU4, known as OU4B. Georgia-Pacific discharged significant quantities of PCBs into lower OU4, but unlike the other mills it has settled its liability with the governments by virtue of a consent decree. As such, although it is a significant party and one of the three major dischargers, it is not currently the subject of the governments’ request for injunctive relief.

III. Legal Standards for Divisibility and Apportionment

The Seventh Circuit has described exceptions to joint and several liability as “rare.” Metropolitan Water Reclamation Dist. of Greater Chicago v. North American Galvanizing & Coatings, Inc., 473 F.3d 824, 827 n. 3 (7th Cir.2007). The exception to joint and several liability arises if the defendant can demonstrate that the harm in question is capable of being divided. Historically, this so-called divisibility defense had not been well-received, but in 2009 the Supreme Court issued its decision in Burlington N. & Santa Fe Ry. Co. v. United States, which NCR argues revived the defense. To demonstrate that the harm is divisible, a defendant bears the burden of showing two things. First, it must prove that the harm is theoretically capable of being divided. This is a question of law that depends largely on the Restatement (Second) of Torts. United States v. NCR, 688 F.3d 833, 838 (7th Cir.2012). Citing the Restatement, both the Supreme Court and Seventh Circuit framed the analysis this way:

[W]hen 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 has himself caused. Restatement (Second) of Torts, §§ 443A, 881 (1976); Prosser, Law of Torts, pp. 313-14 (4th ed. 1971).... But where two or more persons cause a single and indivisible harm, each is subject to liability for the entire harm. Restatement (Second) of Torts, § 875; Prosser, at 315-17.

Id. (citing Burlington Northern, 556 U.S. at 614, 129 S.Ct. 1870) (ellipses in original).

Although a question of law, the analysis relies on policy and facts; at its essence it asks whether one polluter should be considered such a significant cause of the harm that the harm attributable to that cause is incapable of being divided, or whether the parties’ contribution to the harm is so impossible to trace that the harm is indivisible. If a court concludes that the harm is theoretically capable of being divided, the second question is whether a reasonable factual basis for an apportionment exists. Id.

The Burlington Northern ease, which addressed only this second question, has already been discussed at length in numerous previous iterations of this action and its companion contribution action. It is clear that Burlington lowered the bar for defendants in the sense that they need only show “rough” calculations of apportionment in order to clear the second hurdle, i.e., in demonstrating a reasonable basis for apportionment. United States v. NCR, 688 F.3d at 842. For example, in Burlington Northern the district court conceded that its apportionment could have been off by as much as 50%, but the fact that the court included an uncertainty factor of 50% in its calculations allowed the Supreme Court to uphold it. Yet, even though it is undeniable that Burlington Northern loosened the rules governing how a given harm might be apportioned, it did not address the key issue here, which is whether the harm is theoretically divisible in the first place.

In this case we are guided not only by Burlington Northern but by the Seventh Circuit’s consideration of this court’s grant of preliminary relief to the government in 2012. The Seventh Circuit affirmed by concluding, on the sparse record then before it, that NCR’s discharges were a sufficient cause of the environmental harm in OU4. The Court began by noting that apportionment is improper “where either cause would have been sufficient in itself to bring about the result, as in the case of merging fires which burn a building.” 688 F.3d at 839 (citing Rest. (2d) Torts § 434, cmt. i). It then found it dispositive that NCR had not refuted “the government’s contention that NCR’s contributions of PCB would, alone, require approximately the same remedial measures.” 688 F.3d at 839. Although there was some evidence that dredging costs would be lower if there were fewer PCBs, the Court found that point to be poorly developed. Instead, it found that although the “details” of the cleanup might vary if NCR had been the only discharger, there was not enough of a difference to suggest that the ham was divisible. Id. at 840. Thus, because NCR’s discharges would, on their own, require roughly the same remedial measures that are now being undertaken, it could be deemed a sufficient cause of the harm. And because it would have essentially caused almost all of the harm just on its own, as a legal and policy matter it made sense to conclude that NCR should be deemed jointly and severally liable for the OU4 harm. In addition, the Seventh Circuit observed that some kinds of harm are simply unsuitable for divisibility by their very nature. For example, divisibility may be improper when “a chemical is harmful when it surpasses a certain amount” or when “a chemical may not be very harmful but becomes so when mixed with other chemicals.” Id. at 841.

IV. Using NCR’s Approach, the Harm in OU4 is Not Theoretically Capable of Being Divided

The first question is whether the harm in OU4 is theoretically capable of being divided. In its decision preliminarily answering that question “no,” the Seventh Circuit appeared most persuaded by the fact that NCR had not meaningfully disputed the government’s claim that the cleanup in the river would be similar or identical even if NCR had been the only contributor of PCBs to the Site. 688 F.3d at 839. In other words, at the preliminary injunction stage, it appeared that NCR’s PCB discharges would have been sufficient, on their own, to require approximately the same remedial measures that are now being undertaken. As such, dividing the harm on the basis of each party’s degree of contribution to the harm would be inappropriate.

A. NCR’s Divisibility Argument

NCR marshaled substantial resources in its attempt to demonstrate the falsity of the premise that had proven dispositive during the preliminary injunction stage. In an effort to “refute the government’s contention that NCR’s contributions of PCB would, alone, require approximately the same remedial measures,” id., NCR’s expert, John Butler, used a “stand-alone” cost method to demonstrate the remedial measures and costs that would be required by each PRP’s relative PCB pollution. Relying on estimates of the parties’ PCB discharges, Butler concluded that the remediation effort would be substantially more modest if NCR had been the only discharger. As such, NCR could not be considered a sufficient cause of the harm in OU4.

Butler’s analysis depended on the work of other experts, however. First, James Braithwaite analyzed the most fundamental question facing the PRPs, namely, how many pounds of PCBs each party discharged. Using that data, Dr. Craig Jones built a model that attempted to demonstrate how PCBs moved within the river and where they ended up. Philip Simon assessed the costs that would be required based on the discharges of each PRP, and then Mr. Butler tied everything together by explaining how, in his view, the remedy would be much more modest had NCR been the only discharger. Before addressing Mr. Butler’s analysis, the court must describe the data and models that formed the basis of his opinions.

1. James Braithwaite

Mr. Braithwaite is an environmental engineer with more than 40 years of experience in hazardous waste management and remediation of hazardous waste sites. (Tr. 691-92.) As noted above, Braithwaite’s principal role was to estimate how many PCBs each PRP discharged into the river. Naturally it is a difficult task to determine PCB discharges from numerous parties, given that most of the discharges occurred in the 1960s. Braithwaite thus relied heavily on a 2000 report drafted by a consulting firm called Amendola Engineering on behalf of the United States Fish and Wildlife Service. (Tr. 695.) In addition to the Amendola Report, which itself relied partly on an earlier study by the Wisconsin DNR known as Tech Memo 2d (Ex. 2127), Braithwaite spent some three years investigating matters on his own— reviewing documents, conducting interviews, and the like.

Mr. Braithwaite did not simply adopt all of the Amendola Report’s figures, however. In fact, he altered many of them. With respect to Appleton Coated Paper Company (ACPC) — NCR’s predecessor and the source of NCR’s liability in this action — Braithwaite downwardly adjusted the Amendola PCB discharge calculations. The discharge estimates rely on a key figure that the parties have heavily disputed: the emulsion loss rate. Although the NCR-produced emulsion was valuable and efforts were made to save as much of it as possible, some of the emulsion was inevitably “lost” during ACPC’s paper-coating process and was flushed into the sewer and eventually into the river.

Case 2 of the Amendola Report, which represented a middle range of many variables, had assumed an emulsion loss rate of 2.5%. This, along with other assumptions, produced an estimate for NCR’s discharges at about 313,000 pounds, or roughly 40% of the total amount released to the river. (ECF No. 90, Ex. 1 at 12 (Case 2)). Braithwaite, however, concluded that the proper loss rate should be a mere 1.0% rather than 2.5%. Braithwaite relied in part on the interviews and testimony from ACPC employees who stated that they treated the emulsion like “gold” because its high cost made up some 60% of the entire cost of making carbonless copy paper. (Tr. 703:6.) Employees had several mechanisms for conserving the emulsion, including weighing the emulsion more than once and capturing as much of it as possible. (Tr. 703-704.) They monitored emulsion use with weekly reports and used every conceivable measure to conserve it.

This information (which was not accounted for in the Amendola Report) was corroborated in Braithwaite’s view by other information suggesting that the loss rate was even lower than 1%. For example, a contemporary document hand-written by the late Thomas Busch, of ACPC, suggested that the loss rate could have been as low as 0.22%. (Ex. 4223.) Busch, who would later become president of ACPC, entitled the document “Potential Aroclor to Appleton Sewer in 1954 to 1969.” (Recall that Aroclor was the trade name of the type of PCBs involved here.) Braithwaite testified that, based on the figures within the document as well as its title, his understanding was that the document was intended to estimate how many PCBs were discharged by ACPC during the relevant period. Although the document did not contain a loss rate, Braithwaite was able to calculate one (0.22%) using the numbers Busch provided. Braithwaite believed that although the document was hand-written, its level of detail and facts rendered it reliable and not a rough, “back-of-the-envelope” type of effort. In addition, he also relied upon another contemporary document prepared by Mr. Busch. (Ex. 4221.) Using a number of calculations and estimates he described as conservative, Braithwaite arrived at an emulsion loss rate of about 0.9% after interpreting the figures from the Busch report, which was a formal, typed business report. Rounding up and using an emulsion loss rate of 1.0% (which he asserted was conservative), Braithwaite calculated that ACPC and the Combined Locks mill were responsible for discharging some 68,000 pounds of PCBs into the river, or only about 10.74% of the total. (Tr. 728.)

Mr. Braithwaite also disagreed with the Amendola Report’s conclusions about PCB discharges from non-deinking mills, namely Menasha (the John Strange mill) and U.S. Paper (De Pere mill). The Amendola report had assumed that these mills, which made paperboard products rather than white paper, would not be able to recycle much carbonless copy paper (“CCP”) because color from the paper would show up in the final product, a fact that would be unacceptable in the industry. Braithwaite, however, concluded that these mills had recycled significant quantities of NCR’s carbonless copy paper, both as broke from ACPC and from the recycling of post-consumer mixed paper, which had small amounts of CCP in it. Relying on the testimony of mill employees, Braithwaite testified that these mills could, in fact, have used CCP without color problems. He further found that if mixed paper constituted between 16% and 30% of their recyclable stock, and if CCP constituted 1% of incoming mixed paper (a conservative estimate), then the John Strange mill discharged some 13% of all of the PCBs into the river while U.S. Paper discharged some 3%.

Braithwaite’s estimates of discharge percentages for all of the PRPs are as follows:

NCR (ACPC and Combined Locks): 10.74%

Glatfelter: 20.14%

Menasha (John Strange mill): 13.34%

WTMI: 4.40%

CBC Coating (Riverside Paper): 1.26%

U.S. Paper (De Pere): 3.19%

Georgia-Pacific: 46.93%

(Ex. 5044.)

2. Dr. Craig Jones

Mr. Braithwaite’s discharge estimates are simply estimates of the amount of PCBs each PRP discharged. As such, they do not explain how, or whether, or to what extent, the discharged PCBs actually made their way into sediment at the bottom of OU4. That is where Dr. Jones comes in. Dr. Jones, an environmental engineer, has been working on hydrodynamic modeling for eighteen years. (Tr. 1091.) Using the estimates provided by Mr. Braithwaite, Dr. Jones input that data into a fate-and-transport model designed to simulate the movements of sediment and PCB transport in the river. Key to the model was the use of EFDC software (“Environmental Fluid Dynamics Code”), which was described as the state-of-the-art model for applications such as this. (Tr. 1108:17.) In addition to the discharge estimates from Braithwaite, Jones used other data, such as information about water levels and wind, as inputs. The model also incorporated variables, or parameters, that account for water movement, as well as the transport of sediments and PCBs. (Ex. 5114.) To take just a single example, one parameter is what’s called shear stress, a measurement of how much friction the water current exerts on the river bottom. As the stress level increases (in faster currents), more sediment is disturbed and resuspended in the water column. (Tr. 1110-11.) Thus, the model attempts to account for areas of the river where resuspension occurs due to scouring effects as well as those areas where sediments are more likely to deposit permanently. With these inputs and parameters, including bathymetry data (the topography of the river bottom), Jones divided up the Site into roughly 8,000 grid cells and was able to simulate water and sediment movement, as well as PCB deposition, within those individual cells. (Tr. 1120.)

Dr. Jones testified that he was able to calibrate the hydrodynamics of the model and was able to validate it using actual data from the river. He testified, for example, that the sediment transport model was able to show accurate deposition rates throughout a number of sediment sample cores that were taken. (Tr. 1137-40; Ex. 5123.) Jones also testified that the model accurately predicted PCB contamination as well. In other words, he showed that the model’s predictions of PCB contamination roughly matched up with actual core samples taken from the river. (Ex. 5124.) Finally, Dr. Jones testified that the model results passed a sensitivity analysis, meaning that even if the variables and inputs were altered dramatically, the relative contributions of the PCB dischargers did not change dramatically. (Ex. 5162.) This allows increased confidence in the model because it demonstrates that the results are not due to any idiosyncraeies that might exist in the model’s inputs or parameters.

3. Philip Simon

Philip Simon’s role was to take the conclusions arrived at by Dr. Jones and Mr. Braithwaite and link those with actual remediation costs within OU4. Simon divided OU4 into 73 “apportionment polygons,” (Ex. 5067) which were areas of relatively similar characteristics, and using cost data and the PCB fate and transport information from Dr. Jones, he was able to calculate each party’s share of the remediation cost in each polygon. For example, Simon was able to determine that polygon 4-31, would cost roughly $6.3 million to remediate. Of that amount, he determined that Georgia-Pacific owed the lion’s share, or 76%, while NCR owed 5% and Glatfelter owed 10%. (Ex. 5068.) Aggregating all this information from the 73 different polygons, Simon concluded that NCR’s share of the cost to remediate the harm in OU4 was only about 15%.

4. John Butler

John Butler, a chemist and former EPA employee with 35 years of experience analyzing environmental economic issues, reached his conclusions by using estimates from Dr. Connolly and the experts described above. The other experts in effect painted a picture of what OU4 would look like if NCR had been the only discharger of PCBs. Based on that picture, Butler then applied the remedy criteria used by the government to determine what kind of remedy OU4 would require if NCR had been the only polluter. One of the key remedial rules is the 1.0 ppm threshold that separates areas that need to be remediated from those that do not. Applying this and other of the government’s remediation rules, Butler went about determining which remedial actions, if any, would need to be applied to different parts of the river, which he had conceptually divided up into polygons. For instance, if a certain polygon would have a concentration lower than 1 ppm if NCR were the only discharger, he could determine that that polygon would not need to be dredged or remediated at all. In other cases, a polygon that otherwise needed to be dredged might have been a candidate for capping (a cheaper remedy) had NCR been the only polluter. Thus, Butler’s analysis determines areas that would not need to be remediated at all in the NCR-only scenario, as well as areas for which different remedies could be applied. Using the estimates provided by the Simon team and Dr. Connolly, Butler concluded that the remedy in OU4 would be much less extensive and substantially cheaper.

Butler also claimed to have reached a similar result using assumptions provided by Dr. Wolfe, Georgia-Pacifíc’s expert. Dr. Wolfe’s analysis had found that NCR had contributed some 43% of the PCBs in OU4A and 27 % for OU4B, and Butler applied these figures to the data in the same way he had with the estimates given by Dr. Connolly and the Simon team. Even with these much higher estimates of NCR’s PCB contribution, Butler testified that the NCR-only scenario would still require 40 % less dredging than the Site currently requires — a substantial reduction. (Tr. 2783 at 25.) Thus, in NCR’s view, even using the numbers of an adversarial party (Georgia-Pacific), the remedy would be 40 % less if NCR had been the only discharger of PCBs. In fact, NCR claims that even the government’s principal witness, Richard Fox, accepted the premise that if NCR were the only dis-charger, the costs of remediation would naturally be lower. (Tr. 333:22.) And during the preliminary injunction phase, the same witness had agreed that the costs involved in an NCR-only scenario would be “dramatically lower.” (Tr. 334:3-8; ECF No. 365 Tr. 125:1-4.)

B. Analysis

NCR’s analysis was thorough and it addressed, in a comprehensive fashion, one of the key questions that the Seventh Circuit had focused on, namely: to what extent can NCR (or anyone else) be considered an independent, sufficient cause of the harm in OU4? But several problems with the analysis and its underlying assumptions and data convince me that NCR has not met its burden to show the harm in OU4 is theoretically capable of divisibility-

1. The Loose Relationship Between PCB Mass and Harm

Before determining whether the harm is theoretically capable of divisibility, it is important to define what the “harm” is. As set forth in my previous decision granting the government’s motion for a preliminary injunction (ECF No. 172), I noted that the harm could include the danger to the public, the actual volume of PCB-containing sediment at the bottom of the river, the cost to remediate (remove or cover) that sediment, or the remediation work itself. The Seventh Circuit concluded that the harm was best defined with reference to the contamination, as set forth in the government’s remediation rules. As noted above, the government has established a remedial threshold of 1.0 ppm, meaning that areas containing concentrations higher than that ratio are contaminated and thus subject to remediation. Thus, if a PRP’s discharges were necessary for that area to require remediation, that PRP contributed to the harm in that area. “Here ... contamination occurs whenever PCBs pass a threshold level (thereby triggering remedial requirements.)” 688 F.3d at 841.

The question, therefore, is whether a logical connection may be drawn between the amount of a given party’s PCB discharges and the contamination in OU4. On its face, it would seem reasonable to conclude that if Party A discharged 1,000 pounds of PCBs into the river and Party B discharged 500, then the harm would be capable of division based on the 2:1 ratio of the parties’ discharges. But the harm in this case is not so easily divided. At the preliminary injunction stage and during the trial, it was made clear that the amount of PCBs a given party had discharged bore little relation to the harm that existed in OU4. Since “harm” is defined with reference to the 1.0 ppm remedial action level, a given area of sediment will be considered contaminated harm regardless of whether it has 1.1 ppm or 35 ppm of PCBs. Because the need to remediate that parcel exists once that 1.0 ppm threshold is reached, even a very large increase in PCB concentration does not move the needle in making that area any more harmful. Put another way, once an area qualifies as contaminated, additional PCB loads do not make that area any more contaminated, at least from a remedial perspective.

For purposes of determining the cause of the harm in OU4, what this means is that the relationship between the mass of PCBs discharged and the resulting contamination is quite loose. Suppose it were possible to trace a given discharge of PCBs from A into a given spot in OU4. If that spot had a concentration of 2.0 ppm due to A’s discharges, it would not matter from a remedial perspective if B proceeded to discharge large masses of PCBs that brought that spot’s concentration from 2.0 up to 30 ppm. The area would require remediation either way. Because the exact same harm would have occurred with or without B’s discharges, we would consider A (as well as B) to be a sufficient cause of that harm. Throughout the Lower Fox River there are countless areas reflecting similar patterns. Because the 1.0 ppm threshold is relatively low, these areas would need remediation even if many of the PCBs had never been discharged to the river in the first place. In other words, a hypothetical reduction in PCB discharges — even by two-thirds— does not necessarily mean the remedy is reduced in any meaningful way.

These examples merely demonstrate what might be called the binary characteristics of contamination (as we have defined it) in a river: either the river is contaminated, or it is not. Just as one cannot kill a corpse by shooting more bullets into it, one cannot change the remedy in a given area by discharging more PCBs, assuming the minimum threshold of contamination has already been reached. Mr. Butler conceded that the relationship between the mass of PCBs discharged and the harm the PCBs ultimately caused was non-linear, meaning that there is not a strong correlation between discharges and harm. His task, however, was to show that the contamination in OU4 was not binary, that is, that the extent of the harm in the river was sensitive enough to PCB loads that it would get better or worse depending on the masses of PCBs discharged into the river.

At the extremes, it is obvious that there is some relationship between discharge masses and harm. For example, if A discharged only an eyedropper full of PCBs into the river, surely there would not need to be a $700 million remedial action, or any remedial action at all, since such a small discharge would not produce concentrations high enough for any areas to reach the 1.0 ppm threshold. At the other extreme, suppose that A discharged 10,000,-000 pounds of PCBs into the river. In that case, it is easy to imagine how the discharges of other parties might have had no effect at all on the contamination. If A discharged 10,000,000 pounds, the discharges of B and C would have produced no marginal increase in the harm because A’s discharges had already resulted in concentrations in excess of 1.0 ppm throughout the entirety of the river. In short, the more contamination our hypothetical Party A causes, the more likely it is that A’s discharges were a sufficient cause of the resulting harm.

In essence Mr. Butler was attempting to demonstrate that NCR’s discharges were more like the eyedropper example and less like the 10,000,000 pound example. Based on the discharge estimates provided by Mr. Braithwaite, Butler believed that NCR’s discharges were low enough that the discharges of the other PRPs made a difference to the remedy required. At the risk of repetition, it is worth exploring the mechanism of how Butler’s theory would work. As discussed above, if the other parties’ discharges raised the concentration in a given area from 4 to 6 ppm, then those discharges had no affect on the remedy, and NCR would be deemed the “sufficient cause” of the need to remediate that area. Butler conceded that large areas of OU4 fit that description because, in his view, even a two-thirds reduction in PCB loads would have resulted in only a 40% reduction in the remedy, meaning that there was not a 1:1 relationship between PCB masses and remedial work. So in order to show that there was some meaningful relationship (albeit non-linear) between NCR’s PCB discharges and harm, Butler had to show that there were large swaths of river bed where the discharges of other parties actually made a difference to the remedy. Specifically, he had to show that there were areas of the river where: (1) NCR’s discharges alone produced concentrations below the 1.0 ppm remedial action level; and (2) the concentration actually exceeded 1.0 ppm, due either to the other parties’ discharges or to a combination of their discharges with NCR’s.

Mr. Butler’s testimony on these crucial points was limited and unconvincing. He testified that there would be significant reductions in both TSCA and non-TSCA dredging if NCR had been the only dis-charger, but his testimony was short on details and did not get to the heart of the issue identified above. The loose, nonlinear relationship between PCB discharges and harm is a substantial hurdle to overcome. Given the very large discharges by NCR, the assumption is that the remedy would have been roughly the same whether the other parties discharged or not. NCR, 688 F.3d at 839 (“Even if all that were present in the river were NCR’s contributions, the Lower Fox River would still need to be dredged and capped ... ”) Mathematically speaking, there is a universe of potential concentration increases that would increase the concentrations in ways that would not impact the remedy. For example, concentration increases from 2 to 3 ppm, 3 to 4, 6 to 9, 12 to 13, 14 to 35 or 25 to 40, etc. have no impact on the remedy because in each case the concentrations are already above 1.0 ppm. By contrast, the kinds of concentration increases that would actually make a difference to the remedy are limited to a very narrow category of areas where the concentration was below 1.0 in an NCR-only scenario and then rose above 1.0 due to the discharges of other parties. Thus, all things being equal, we would have no reason to assume that contamination in a given parcel of river bed would fall into that more narrow category; unless a good explanation is given, we would assume instead that contamination in a given area would not be sensitive to PCB discharges from other sources because most contamination increases fall into the immaterial category (say, from 6 to 8 ppm) rather than the narrow, threshold-crossing category that triggers remedial action (e.g., 0.8 to 1.3 ppm).

NCR did not provide any convincing reason to undercut these assumptions. Knowing what we know about the nonlinear relationship between mass and harm, and given the low remedial action threshold, it was incumbent on NCR to show exactly how the other PRPs’ discharges would have materially increased the remedy. This would have required a detailed showing of large numbers of polygons where remedial action was actually required (because concentrations exceeded 1.0 ppm) but where NCR’s contribution to the concentration was less than 1.0 ppm. Butler testified that that was the case, but he did not give anything approaching a detailed explanation of, for example, how many polygons fit that description. He did not suggest that most areas of the river were contaminated at a relatively low level that was close to the threshold (say, 1.2 ppm) where we might expect the contamination would actually be sensitive to discharges 'by other PRPs. Nor did he highlight specific areas of the river where it would be reasonable to conclude that substantial areas fall into the category of being sensitive to other PRPs’ discharges. Thus, although it is likely that there are certain discrete areas in the river where the contamination might have been sensitive to additional PCB loads, it would be speculation to conclude that these areas constituted a significant part of OU4— certainly not as much as Butler suggested. Mr. Butler’s analysis would likely be somewhat persuasive as a method of apportioning damages, but the Restatement requires us to divide not damages but causation, and his testimony on that score was limited. Restatement (Second) of Torts, § 443A. Here, the initial question is who caused the need for OU4 to be remediated, not how much each party should pay. Accordingly, even if there were not other problems in NCR’s analysis (as discussed below), I would not be persuaded that NCR had met its burden to show that the remedy would be materially different even if NCR had been the only polluter.

2. NCR’s Discharge Estimates Were Flawed

As noted above, Mr. Butler’s goal was to make NCR appear more like the eyedropper discharger than the 10,000,000 pound discharger. The importance of NCR discharging a relatively low mass of PCBs cannot be understated. In a general sense, it is easy to imagine why NCR would want to minimize its contribution to the PCB problem and limit its apportioned share, just as any tortfeasor would want to limit its damages. But minimizing PCB discharges is crucial not only in that general damages sense but in the more fundamental causation sense as well. As discussed above, given the low 1.0 ppm remedial threshold, a lower discharge assumption makes it much more likely that many areas of the river would be sensitive, from a contamination perspective, to additional PCB loads from other dischargers. In other words, a low discharge assumption for NCR makes it more likely that discharges from other PRPs had a material impact on the remedy, which is another way of saying NCR is an insufficient cause of the harm. In short, as NCR’s PCB discharge estimates rise, OU4 becomes less sensitive to additional PCB loads as more and more areas in OU4 reach the 1.0 ppm threshold based on NCR’s discharges alone. Mr. Butler’s causation analysis thus only works in a world where NCR discharged a relatively small amount of PCBs. Keeping the numbers low was therefore crucial to NCR’s entire analysis.

Mr. Braithwaite’s discharge estimates were the foundation upon which Mr. Butler built his causation analysis, and the United States and some of the other parties concentrated their greatest efforts at undermining Braithwaite’s discharge estimates. Some of the Defendants suggest that the errors inherent in Braithwaite’s analysis resulted in a “garbage in, garbage out” situation rendering NCR’s entire causation and apportionment framework unreliable. These criticisms are addressed below.

a. Reliance on the Amendola Report

First, the other parties note that the bulk of Braithwaite’s figures came from the 2000 Amendola Report, which was a “preliminary” report that itself acknowledged major uncertainties. In fact, according to the government, the report used the word “preliminary” no fewer than 16 times. The report employed four “cases” to demonstrate how a wide range of assumptions about PCB discharges would affect the final results. (Ex. 7257 at 366445.) Braithwaite, without having any actual hands-on knowledge of the paper-coating process at ACPC, simply chose a mid-range case (Case 2) as a starting point for his estimates. The report’s “key assumptions” themselves had ranges of possibilities. For example, the report used ranges of 2-5% for emulsion loss during the production of NCR paper, and changing the percentage of emulsion loss by only two percentage points (from 3% to 5%) had a major effect on PCB discharges: the estimate for NCR’s discharges rose from 452,000 pounds in Case 3 to 836,000 in Case 4. (Id. at 366452.)

In addition, the numbers in the Amendola report changed after the 2000 report was issued. In 2001, Amendola issued an updated report altering its estimates for the PRPs. Some of the changes were marked: for example, the estimate for Georgia-Pacific’s discharges was cut nearly in half. Despite these changes, Braithwaite did not use these figures. (He testified that he believed the government had refused to turn over the 2001 report. (Tr. 696:18-19.)) The government also argues that Braithwaite violated a basic rule of mass balance analysis when he upwardly adjusted the discharge estimates for Menasha and U.S. Paper but made no downward adjustment for other recyclers to balance that out. (The estimate for the total amount of recycled broke in the Fox Valley was to remain constant.)

Although these problems with Mr. Braithwaite’s analysis are not necessarily fatal to NCR’s divisibility analysis, they result in (at best) an uncertain footing for the defense. It goes without saying that there simply are no hard numbers from the PCB era that can be relied upon. Th