### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No s

. 13

- 2447, 13

- 2522, 13

- 2568, 13

- 2570, 13

- 2572 , 13

- 2605, 13

- 2606, 13

- 2607, 13

- 2631, 13

- 2645, & 13

- 2866
NCR C ORPORATION , et al.
, Plaintiffs

- Appellants
,

v.

G EORGE A. W HITING P APER C OMPANY , et al.
, Defendants

- Appellees

.

____________________ Appeal s from t he United States District Court for the Eastern District of Wisconsin. No s. 08

- cv

- 16 and 08

- cv

- 895

— William C. Griesbach
, Chief Judge

.

____________________
A RGUED F EBRUARY 28, 2014

— D ECIDED S EPTEMBER 25 , 2014

____________________

Before W OOD , Chief Judge , and K ANNE and T INDER , Circuit Judges

. W OOD , Chief Judge

. The invention of carbonless copy p aper by NCR Corporation in the mid

- 1950s solved a small problem and created a large one. Though it alleviated the messy side effects of carbon paper for those who wanted copies in the pre

- photocopy era, over the next quar ter

century it became clear t hat the cost of this convenience was2 Nos. 13

- 2447 et al.

large

- scale environmental contamination. Th at is because, until the early 197 0s , the substance coating the paper inclu ded polychlorinated biphenyls (PCBs), a highly toxic poll utant. In the course of producing the carbon less paper, large quantities of PCBs were dumped in to the Lower Fox River in Wisconsin, the site of the paper’s produc tion. (References to the River in this opinion mean the Lower Fox, unless the context requires otherwise.) Recyclers poured yet more PCBs into the R iver. In time, the problem attracted the attention of the federal government, which , invoking the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) ( popularly known as the Superfund ), e ventually order e d the responsibl e parties to clean up the mess

. See 42 U.S.C. § 9601 et seq. This case requires us to decide who should foot the considerable bill

. Once the E nvironmental P rotection A gency (EPA) i dent ifies the sit e of an environmental hazard that requires rem ediation unde r CERCLA , the statute’s financial responsibility rules are triggered. CERCLA impos es a “ pay

- first, split

- the

bill

- lat er” regime. Any individual person s or corporations meeting certain statutory criteria can be required to pay for the cleanup . Anyone who paid can then recover contribution from other responsible parties in accordance with that ent ity’s equitable share of the costs.

NCR was the exclusive manufacturer and seller of the emulsion that gave treated paper its “carbonless

- copy” cha rac ter during what the parties call the Production Period (1954 to 1971). That emulsion, unfortunately, used Aroclor 1242 as a solvent, and Aroclor 1242 is a PCB. Given its role in the pollution, NCR has thus far picked up the lion’s share of the cleanup tab for the River site. In this ac tion it seeks co n-No s

. 13

- 2447 et al. 3

tribution from several other paper mills along the river

. Those firms were in the recycling business ; they bought NCR’s leftover scraps of carbonless copy paper, washed the harmful chemicals off into the River , and recy cled the pulp to make new paper. Several ancillary questions and counte rclaims were raised along with NCR’s contribution claim, and we will address each in turn. The main event, though, relates to the equitable allocation of costs.

The district c ourt, after holding a first phase of discovery on the question of when each party became aware that the primary chemical ingredient of carbonless copy paper was harmful, held that NCR was not entitled to any equitable contribut ion from the paper mills. Wor se than that, from NCR’s vantage point, the court held that the mills had mer itorious counterclaims for cost recovery from NCR. NCR a ppeals that decision, and the defendant recy clers cross

- appeal a handful of matters decided against them. Before addres sing these matters, we begin with some background about the cleanup effort.

I. Background Facts The Lower Fox River begins at Lake Winnebago in nort heastern Wisconsin and winds northeasterly for 39 miles until it discharges into Green Bay, which flows into Lake Mich igan. For decades, the River has been to papermaking what Pittsburgh once was to steel: the heart of the industry, and home to the highest concentration of paper mills in the world. See Region 5 Cleanup Sites: Background
, E NVIRONMENTAL P ROTECTION A GENCY (Aug. 3, 2011), http://www.epa.gov/region05/cleanup/foxriver/background. htm (all websites cited last accessed Sept. 24, 2014 ).4 Nos. 13

- 2447 et al.

In addition to their infamous smell, paper mills produce a good deal of solid byproduct, which they long disposed of by dumping it into the River. This had a deleterious effect on the River and its ecosystem, and by 1970 the sorry state of the River was visible to the naked eye

.

Among the solid matter suspended in the mills’ effluent

were PCBs , which were the pol lutant t hat attracted the atte ntion of the EPA in the mid

- 1990s. PCBs are carcinogenic for humans and animals alike, and they have harmful non

carcinogenic effects on the immune, reproductive, neur olo gical, and endocrine systems, as well as the skin. See Health Ef

fects of PCBs
, EPA (June 13, 2013), http://www.epa.No s

. 13

- 2447 et al. 5

gov/waste//hazard/tsd/pcbs/pubs/effects.htm . By the time their use was banned by the EPA in 1979, some 250,000 pounds of P CBs had been released into the R iver. See Lower Fox River and Green Bay Site , EPA (Apr. 2, 2014), http://www.epa.gov/region05/ cleanup/foxriver/

. The PCBs in the River can all be traced back to NCR’s carbonless copy paper, which it (along with other companies with which it contracted) produced between the mid

- 1950s and 1971. As the name suggests, carbonless copy paper pe rmitted a writer or typist to make instant copies of document s without the use of carbon paper. This effect i s achieved by coating the back of a top sheet of paper with an emulsion containing “microca psules” of dye and solvent ; the micr ocapsules burst when a user wri te s on the sheet and thereby reproduce the same image on the lower sheet. A critical i ngredient of the emulsion was Aroclor, a PCB

- based chemical sold by Monsanto. NCR manufactured the emul sion, which it then sold to two companies (Appleton Coated Paper Compan y and Combined Paper Mills), which coat ed the p aper and s old the finished product back to N CR for comme rcial distribution. Those two companies were formally ind ependent from NCR until 1 969 and 1970, respectively, when they became NCR’s wholly owned subsidiaries. The PCBs used to make carbonless copy paper ended up in the Lower Fox River in two principal ways. First was the straightforward one: some of the emulsion used to c o at the paper was necessarily lost in the production process and was mixed with the wastewater th at the mills released into the R iver. Explaining the second way requires us to give a bit more background about the paper industry

. Producing paper from raw materials is rel atively expensive. The pr o-6 Nos. 13

- 2447 et al.

duction process creates a fair amount of waste, scraps, and undersized rolls that are unusable by the original manufa ctur er; these are called “broke” in the trade. Making paper from r ecy cled broke is cheaper than making it from sc ratch,

a fact that spurred the growth of a sub

- industry of “recycling mills.” The nongovernmental defendants in this case are such mills. These mills purchase broke from other paper mills through middlemen and use it to make paper. The companies that coate d paper with NCR’s emulsion also participated in the normal industry practice of selling broke to recycling mills. Upo n receipt of the broke, the rec ycling mills would process it to separate the usable fibers from the coating, thus removing the PCBs from t he portion of the paper that went into the new product

. The waste (i ncluding of course the PCBs) was then dumped into the River with the mills’ wastewater. Another problem with PCBs is that they attach readily to solids and do not degrade . As more and more PCBs were dumped into the River each year, they accumulated in the riv erbed

. Eventually, people became aware of the dangers of PCBs
, and both private and governmental entities began to take action. Monsanto stopped selling products containing PCBs in Augu st 1970, and NCR ceased using PCBs in its ca rbonless copy paper once its supplies of Aroclor ran down the following year. The EPA issued regulations largely ba nning the use of PCBs in 1979. See 40 C.F.R. § 761.1 et seq. Congress passed CERCLA in 1980 to sp ur the enviro nmental cleanup of sites contaminated by hazardous su bstances. See Pub. L. No. 96

- 510, 94 Stat. 2767 (1980) (codified as amended at 42 U.S.C. § 9601 et seq. ). The EPA, in coordin ation with the Wisconsin Department of Natural ResourcesNo s

. 13

- 2447 et al. 7

(WDNR)
, set its sights on the Lower Fox River as a CERCLA cleanup target in 1998 ; it issued a final cleanup plan in 2002. See United States v. NCR Corp. , 688 F.3d 833, 836 (7th Cir. 2012). The plan divided the R iver into five “operable units,” which is jargon for geo graphic sections, and ordered a co mbination of dredging the riverbed and capping contaminated

areas s o as to remove and contain the PCBs and prevent them from reaching Lake Michigan, where it would be all but impossible to do anything about them.

When t he EPA determines that environmental remedi ation is required, CERCLA shifts the cost of that cleanup to the parties resp onsible for creating the hazard and away from taxpayers, who otherwise would be left to pick u p the bill. The statute identifies who is regarded as a Potentially Responsible Party (PRP) in a cleanup ac tion: it includes the current owners and operators of the cleanup site; the owners and operators at the time that the hazardous substance was disposed; parties that “arranged for” disposal of the su bstance; and parties that accepted the substance for transpo rtation to a disposal site of their choosing. CERCLA § 107(a), 42 U.S.C. § 9607(a). A ll PRPs are liable for costs incurred by the state and federal government s related to the remedi ation. A t the liability stage, no consideration is given to a pa rty’s relative fault in contributing to the hazardous conditions at the site; any part y meeting one of the statutory definitions is potentially liable for the full cost of cleanup. With one important exception to which we will return, all of the nongovernmental litigants before us are admitted PRPs for the Lower Fox River cleanup. Many of these parties have challenged their liability to the government in separate litigation related t o this case, but that question is not before8 Nos. 13

- 2447 et al.

us here. W e are concerned with separate CERCLA prov isions that allow a PRP that believe s it has paid cleanup costs in excess of its fair share to sue to recover contribution from other PRPs jointly liable for cl eanup at the same site. See CERCLA § 113(f), 42 U.S.C. § 9613(f). In such an action, the dis trict court is directed to allocate contribu tion costs under section 113 (f) “using such equitable factors as the court d etermines are appropriate.” Id. § 9613(f)(1)

. After the EPA issued a unilateral administrative order in 2007 governing the cleanup of operable units 2 through 5 at the Lower Fox River site, NCR took the lead in responding and bore much of the cost of remediation from that point onward. Believing tha t its financial burden has by now e xceeded its fair share, NCR filed this suit for contribution against the other PRPs named in the administrative order. Over the next several years, the district court disposed of a number of issues in the case . I t held th at NCR and its i ndemnitor and former subsidiary Appvion were not entitled to any equitable contribution for the expenses they incurred as part of the Lower Fox Riv er cleanup. It further ruled that the recycling mills should receive contribution from NCR fo r their costs, including those incurred in the form of “natural

r e sources d amages. ” Between the appeal and the cross

- appeal, we have a co nsiderable array of issues before us. They include the follo wing: (1) whether NCR ( and Appvion , which stands in the

sa me position as NCR for this purpose , and so unless othe rwise required we use “NCR” to refer to both ) are entitled to

recover any portion of the cost of clean

- up under either se ction 107 or 113 of CERCLA, 42 U.S.C. §§ 9607, 9613; (2) whether NCR has any arranger liability; (3) whether the di s-No s

. 13

- 2447 et al. 9

trict court erred by awarding costs to Glatfelter without of fsetting its insurance recoveries; (4) whether NCR is liable for natural resource damages; (5) whether the court erroneously dismissed Glatfelter’s claims ba sed upon discharges at Po rtage, Wisconsin; and (6) whether the district court wrongly dismissed Glatfelter’s common

- law counterclaims as pre empted. We ad dress the issues in that order

. II. Cost Recovery or Contribution

We begin with NCR’s assertion that it sho uld not be r equired to proceed by way of a contribution action under se ction 113 (f) at all, but instead should be able to sue the d efendant mills under the more plaintiff

- friendly provision for cost recovery found at CERCLA § 107(a), 42 U.S.C. § 96 0 7(a). W e review this question of statutory interpretation de novo

. Storie v. Randy’s Auto Sales, LLC , 589 F.3d 873, 876 (7th Cir. 2009).

A Defining the relation between cost

- recovery suits under section 107 and contribution actions under section 11 3 has prov en ve xing for courts. Section 1 07(a) is meant to support

a c laim for parties to recover costs incurred during a self

initiated environmental cleanup, while section 11 3(f) creates a right to contribution for parties already subject to liability in either a secti on 1 07 ac tion or an action by the government under CERCLA § 106, 42 U.S.C. § 9606. See United States v. Atlantic Research Corp. , 551 U.S. 128, 138

– 39 (2007). Procee ding by way of section 1 07(a) holds advantages for a plaintiff insofar as it can recover “any ... necessary costs of respon se incurred,” and defendants can assert only the statutory d efenses enumerated in section 1 07(b), such as acts of God, acts10 Nos. 13

- 2447 et al.

of war, and third

- party omissions. See 42 U.S.C. § 9607(a)(4)(B)

. S ee also California v . Neville Chem

. Co. , 358 F.3d 661, 672 (9th Cir. 2004). Equity plays no role in a se ction 1 07(a) action, in contrast to a section 1 13(f) acti on, where the entire allocation of costs is equitable, and even a defen dant who concedes statutory liability may ar gue that it should bear none of the costs of response . The defendant in a se ction 1 07(a) action can always bring a section 1 13(f) counte rclaim if the plaintiff is a PRP, but the burden of proof would then be on the counterclaim ing defendant to demonstrate an entitlement to contribution. See Atl

. Research Corp. , 551 U.S. at 140 (explaining availability of 1 13(f) counterclaim); Goodrich Corp. v. Town of Middlebury , 311 F.3d 154, 168 (2d Cir. 2002) (discussing burden of proof). Whether a party must proceed und er section 1 07(a)

or 1 13(f) depends on the procedural posture of the claim. Atl. Research Corp. , 551 U.S. at 139

– 40 (citing Consol. Edison Co. of N.Y. v. UGI Utils., Inc. , 423 F.3d 90, 99 (2d Cir. 2005)). If a party already has been subject ed to an action under se ction 1 06 or 1 07, or has “resolved its liability to the United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement,” it must proc eed under se ction 1 13(f). 42 U.S.C. §§ 9613(f)(1), (f)(3)(B); see Bernstein v. Bankert , 733 F.3d 190, 201

– 02 (7th Cir. 2012). Conversely, a party that has not been subject ed to an enforcement or liabi lity action, and that is not party to a settlement, may proceed under section 1 07(a). See Cooper Indus., Inc. v. Aviall Servs., Inc. , 543 U.S. 157, 166

– 68 (2004). S ection 1 13(f) is closed to a litigant without a preexisting or pending liability determin ation against it even if it wants to proceed by that route, b ecause that statute creates a right to contribution, and contr i-No s

. 13

- 2447 et al. 11

bution exists only among joint tortfeasors liable for the same harm. See R ESTATEMENT (S ECOND ) OF T ORTS § 886A

. S ee also Cooper Indus. , 543 U.S. at 166

– 68 (unavaila bility of se ction 1 13(f)); Atl

. Research Corp. , 551 U.S. at 135

– 36 (availabi lity of section 1 07(a)). Thus, although a strict reading of the phrase “necessary costs of response” in section 1 07(a) might suggest that parties who pay pursuant to an enforcement action might be able to su e under section 107(a) , this court

— like our sister circuits

— restricts plaintiffs to section 113 co ntribution actions when they are available. Bernstein , 733 F.3d at 206. See also Hobart Corp. v. Waste Mgmt. of Ohio, Inc., Nos. 13

- 3273, 13

- 3276, 2014 WL 339 7147 at *7 (6th Cir. July 14, 2014) (agreeing with Bernstein that sections 107(a) and 113(f) provide mutually exclusive remedies).

B The question whether NCR may sue under section 1 07(a) is controlled by our decision in Bernstein . In that case we held that a settlement with the EPA “resolves” a party’s li ability when the agreement, by its own terms, releases a part y from CERCLA liability in an enforcement action. Bernstein
, 733 F.3d at 204

– 15

. We contrasted two A dministrative O rders of Cons ent between the PRP and the EPA, both of which contained explicit language stating that the PRP would not be protected from suit by the EPA until after it had completed its cleanup obligations under the orders. The earlier order dealt with a project on which the PRP had

c ompleted work. The PRP was therefore limited to a contr ibution action under section 113(f) to recover its cost s . The later order stipulate d that “nothing in this Order constitutes a satisfaction or release from any claim or cause of action against the Resp ondents,” and that “[t]hese covenants [not12 Nos. 13

- 2447 et al.

to sue] are conditioned upon the complete and satisfactory performance by Respondents of their obligations under this Order.” Id. at 203 , 207

. T he agreement memorialized in that order disclaimed any admission of l iabil ity by the PRP, Id. at 204, and the terms of the agreement gave the EPA the right to sue up until the point when the PRP completed its obl ig ations . The PRP’s liability therefore could not be considered “resolved” by the order for CERCLA purpos es. Th is meant that the order could form the basis of a section 107(a) suit because the PRP was still in the proc ess of complying with it

. NCR’s response costs at the River site arose under three orders: a consent decree following a 2001 suit by the EPA and WDNR
, an Administrative Order of Consent for design work in 2004, and a Unilateral Administrative Order for r emedial work in 2007. The company concedes that its costs under the 2001 consent decree must be recovered under se ction 1 13(f), if at all. It continues , however, to assert its ability to sue the recycling mills under section 1 07(a) for costs i ncurred pursuant to the 2004 and 2007 orders.

It s argument with respect to the 2007 order is easily di spatched. The government filed a lawsuit to enforce that o rder in 2010. U nder CERCLA’s express terms, a party may seek contribution from any other PRP “ during or following any civil action under section 96 06 [CER C L A § 106] of this title or under section 96 07(a) [CERCLA § 107(a)] of this title.” CERCLA § 113(f)(1); 42 U.S.C. § 96 13(f)(1) (emphasis added). Thus, a section 1 13(f) action is available to NCR for the costs incurred under the 2007 order . This means that section 107(a) is not av a ilable. See Bernstein
, 733 F.3d at 206. We are unpersuaded by NCR’s contention tha t the costs it incurred under the order before the action was filed in October 2010No s

. 13

- 2447 et al. 13

were “voluntary,” and thus not part of the costs recoverable under section 1 13(f). Such slicing and dicing of costs i ncurred under the same administrative order makes littl e sense when a party’s liability for all of those costs will ult imately be determined in the enforcement action.
As for the 2004 Administrative Order of Consent, our analysis again is guided by Bernstein

. The question whether NCR has resolved its liability to the government through the consent order

— and thus is limited to section 1 13(f)

— is a matter of contract interpretation. On that score, the consent order here diverges in every meaningful way from the one in Bernstein that left section 1 07(a) available

. In Bernstein , the
covenants no t to sue were “conditioned upon the complete and satisfactory perfor mance” of the PRP’s obligations. 733 F.3d at 203. In contrast, under the 2004 order here both the EPA and W DNR “covenant[ed] not to sue or to take admi nistrati ve action against Respondents [under CERCLA or state law] for performance of the work.” It explicitly provi ded that “[t]hese covenants not to sue shall take effect upon the Effective Date ” (emphasis add ed); in Bernstein , the covenants did not take e ffect until completion of the work.
To be sure, the NCR order also has language conditio ning the covenants on “satisfactory performance” of NCR’s obligations. But this means only that the federal or state governm ent could sue NCR if it breaches the agreem ent

— a standard ar rangement that is consistent with the fact that neither the EPA nor Wisconsin could sue NCR if it complied with its obligations. The agreement resolved NCR’s liability
, and so the district court correctly held that it limited NCR to procee ding under section 1 13(f). To hold otherwise would mean that no consent order could resolve a party’s liability14 Nos. 13

- 2447 et al.

until the work under it was complete . Such a rule would be contrary both to the analysis in Bernstein and to common

sense.
C Appvion finds itsel f in a materia lly different position from NCR when it comes to the choice between cost reco very and contribution. In fact, it appears to be in a n unusual, possibly unique , position among parties incurring cost s u nder CERCLA : it was initially identified as a PRP by the go vernment and paid re sponse costs in that capacity, but later it

was held to fall outside of CERCLA’s statutory grounds for liability. It is now on the hook for response costs only as NCR’s indemnitor pursuant to an agreement signed when the companies split up. It is seeking the costs of response it paid directly wh ile it was regarded as a PRP. To understand how Appvion ended up in this position, it is helpful to look at its corporate history. It started out as Appleton Coated Paper Company, one of the two mills that coated copy paper with NCR’s PCB

- based emulsion and then sold the finished carbonless product back to NCR. In 1970, NCR acquired all of its stock, and it became NCR’s wholly owned subsidiary. It then merged with another NCR subsid iary and was renamed “Appleton Papers, Inc.,” which merged with NCR in 1973 and became an unincorporated division. NCR later sold the assets of that division to an ou tside corporation called Lentheric, which changed its name in 1978 to Appleton Papers Inc. (without a comma, unlike its previous iteration). It finally became Appvion after yet one more name change in 2013.No s

. 13

- 2447 et al. 15

The 2007 Unilateral Administrative Order identified A ppv ion as a PRP, and th e government named it as a defendant in its 2010 enforcement ac tion under section 1 06. In late 2011, however, the district court de cided that Appvion had not assumed Appleton Coated Paper Company’s CERCLA li ability when it was sold by NCR, and that the liability r emained wi th NCR as a matter of contract. This ruling c reated a conceptual problem, because App

vion already had i ncurr ed costs of compliance under the 2007 order. The district court sidestepped the question

— apparently of first impression

— whether a party formerly identified as a PRP but later found not to have that status (and thus not to be liable under CERCLA ) could recoup its costs under section 1 07(a)
, 1 13(f)
, neither, or both . Instead, the court found that Appvion had agreed to indemnify NCR for CERCLA costs as part of an earlier settlement agreement between the compa nies . (The existence of this agreement was the basis for Appvion’s successful argument that it was not directly liable in the government’s 2010 enforcement a ction.) The court held that whatever costs Appvion had i ncur red could not be traced to C ERCLA ; they were incurred instead pursuant to the indemnity agreement. The agre ement provided, the court concluded, that Appvion’s “rights, limitations, and defenses” were the same as NCR’s. Appvion was subrogated to NCR’s contr ibution claim through CERCLA § 112(c), 42 U.S.C. § 96 12(c)(2) (providing for su brogation), and could recover its costs exclusively through NCR and this subrogation arrangement.

In the run

- of

- the

- mill case, a rule that a CERCLA inde mni tor (here, Appvion) is limited to proceeding through its indem nitee would be sound . The lead ing case in this area is16 Nos. 13

- 2447 et al.

Chubb Custom Ins. Co. v. Space Systems/Loral, Inc. , 710 F.3d 946 (9th Cir. 2013). There, the Ninth Circuit held that an inde mni tor insurance company had not incu rred costs “under CERCLA” because the money it disbursed did not corr espond to “costs of response,” but rather to independent co ntractual obligations based on the indemnified party’s costs of response. Id. at 952

– 53. If the rule were different, the court f eared
, insurers could exploit it to make an end

- run around section 1 13(f): they could make payments directly to jointly liable parties instead of filtering the money through their i ndem nitee s . They could then turn around and bring a se ction 1 07(a) action against those parties because the insurer (by hypothesis) was not a PRP. Chubb reflects the fact that an indemnitor normally is able to satisfy the full amount of any claim it would otherwise have brought under section 1 07(a) by standing in th e shoes of its indemnitee in a section 1 13(f)

ac tion. P ermit ting it to operate outside section 1 13(f) would unjustly improve its litigating position.

This case , however, does not fit the normal pattern. Ap p

vion was not acting as an indemnitor when it paid the r esponse costs it now seeks to re cover; as of then, it was a PRP. Even if it were to stand in NCR’s place, it could not hope to

recover for what it paid, because NCR would not be entitled to contribution for response costs that it did not bear. The in demnity agreement is a one

- way street: it does not expand NCR’s costs of response and thus allow it to sue for contr ibution toward Appvion ’s costs for paying at least part of NCR’s contribution share.
It is conceivable that in some circumstances, an inde mn itor

- former PRP that incurs direct response costs and is later found not liable under CERCLA may wish to recover costsNo s

. 13

- 2447 et al. 17

even from the party it is indemnifying. Imagine, for exa mple, a hypothetical situation in which Appvion paid $20 mi llion in response cost s before it was found not to be a PRP, and later NCR was assigned to pay $5 million in contrib ution to its fellow PRPs in a section 1 13(f) action. Appvion would be on the hook to NCR for $5 million under the i ndemnity agreement (assuming it indemnifies at 100%)

. Even though in principle it starts out wanting to recover the $20 million it paid in response costs because it was not a liable party in the first place
, in the end the sum needed to make it whole would be $ 25 million

— its own response costs of $20 million plus the $5 million paid under the indemnity agre ement. There is good reason to take the position that at least the $20 million should be allocated equitably among the PRPs , not irrevocably assigned to a par ty that wa s erron eously identified as a PRP and in that capacity complied with the EPA’s order while contesting its liability. Principles of contract should govern any rights between the parties under the indemnity agreement. It is not readily apparent which statuto ry mechanism is the proper one for reimbursing the erroneously impos ed costs paid by the non

- PRP . But it seems apparent that som ething should be available. This is true regardless of any i ndependent indemnity agreement with another PRP, insofar as costs th at fall outside the agreement are concerned. A se ction 1 13(f) action is a poor fit for this situation , because co ntribution exists only among joint tortfeasors. R ESTATEMENT (S ECOND ) OF T ORTS § 886A. A party such as Appvion that is no longer a PRP logically cannot be a joint tortfeasor for CERCLA purposes.18 Nos. 13

- 2447 et al.

That leaves us with section 107(a). It turns out to be a re asonably good fit, if one characterizes Appvion’s response payments as constructively voluntary. When it turned out that Appvion could not legally be bound to pay the response costs that it had already paid under the order, the nature of those payments had to be reconsidered. Had Appvion been properly characterized from the start, any payments it might have made would have been who lly voluntary. It makes sense, we think, to apply t hat lack of compulsion retroactiv ely

. Under Atlantic Research Corp. , Appvion is therefore ent itled to bring a section 1 07(a) action against the PRPs sharing liability for t he Lower Fox River site. See 551 U.S. at 135

– 36

. We stress that this action is available not because Appvion is NCR’s indemnitor, but precisely because it was not indemn ifying NCR when it incurred these response costs. Section 107(a) is not available for the recovery of a ny costs that ari se through Appvion’s indemnity agree ment ; we agree with the Ninth Circuit’s holding in Chubb that the company qua i ndemnitor is limited to its indemnitee’s CERCLA remedies. Maintaining the bright

- line distinction between costs i ncurred as a former PRP and costs incurred as an indemnitor should prevent the undesirable scenario that would permit an indemnitor to exploit the use of direct CERCLA payments to enhance its litigating position
, while safeguarding the rights of non

- responsible parties not to have to contribute to the costs of clean

- up. Because the district court held that Appvion could not sue under section 107(a), we must r everse its decision and re mand for further proceedings.

III. Rights to Contribution

W e now turn to two related questions on the merits: whether the district court abused its discretion when it heldNo s

. 13

- 2447 et al. 1 9

on summary judgment that NCR was not entitled to contr ibution for a ny of its response co sts at the Lower Fox River site; and whether the court correc tly ruled that the recycling mills were enti tled to 100% contribution from NCR for their own costs, as they asserted in counterclaims

. We discuss these two points together, as they are just two different ways of asking whether NCR can be held responsible for all r esponse costs, no matter who paid initially. We generally review a grant of summary judgment de

novo . A party is entitled to summary judgment if, viewing the evidence in the light most favorable to the non

- moving party, there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. See Envtl. Transp. Sys., Inc. v. ENSCO, Inc. , 969 F.2d 503, 5 07 (7th Cir. 1992); F ED

. R. C IV

. P. 56 (a)

. The equitable allocation of response costs in a CERCLA action , howeve r, is for the di strict court to decide in its discretion, and we do not start from scratch in determining whether we would allocate ev ery penny in the same way. See Browning

- Ferris Indus. of Ill., Inc. v. Ter Maat , 195 F.3d 953, 957, 959 (7th Cir. 1999) (h ol ding that district court “did not abuse [its] discretion”). I nstead, this court has implicitly accepted, and some of our si ster circuits have more explicitly stated, that we review th e district court’s allocation for abuse of discretion, even when the is sue comes to us on appeal from s ummary judgment. See ENSCO , 969 F.2d at 506, 509 (indicating district court d ecided case on summary judgment and discussing court’s discretion under CERCLA); United States v. R.W. Meyer, Inc.
, 932 F.2d 568, 573 (6th Cir. 199 1) (applying abuse of discr etion standard when evaluating summary judgment); see also Goodrich Corp. v. Town of Middlebury , 311 F.3d 154, 170 (2d Cir. 2002); Tosco Corp. v. Koch Indus., Inc. , 216 F.3d 886, 89420 Nos. 13

- 2447 et al.

(10th Cir. 2000); Boeing Co. v. Cascade Corp.
, 207 F .3d 1177, 1187 (9th Cir. 2000).

We begin with the text of section 113(f): Any person may seek contribution from any other person who is liable or potentially liable under se ction 96 07(a) [CERCL A § 107(a)] of this title, during or following any civil action under section 96 06 [CERCL A § 106] of this title or under section 96 07(a) of this title. Such claims shall be brought in accor dance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal law. In resolving contrib ution claims, the court may allocate response costs among liable parties using such equ itable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the abse nce of a civil action under section 96 06 of this title or section 96 07 of this title. 42 U.S.C. § 9613(f) (CERCLA § 113(f))

. In a contribution a ction the court is not concerned with deciding whether a pa rty is liable under CERCLA. That is a ques tion for the e nforcement action; the contribution action merely imports its conclusions. Even so, meeting a statutory liability trigger renders a party only potentially liable for contribution under CERCLA. ENSCO , 969 F.2d at 507. It is within the district court’s power to require all, none, or some intermediate share of contribution from a PRP, depending on the court’s weighing of the equities. We have described the district court’s authority in this area as “broad and loose.” Browning

- Ferris , 195 F.3d at 957.No s

. 13

- 2447 et al. 21

CERC LA not only entrusts the district court to make the u ltimate equitable allocation of costs, but it also grants the
court the authority to decide which equitable factors will i nform its decision in a given case. Kerr

- McGee Chem. Corp. v. Lefton Iron & Metal Co. , 14 F.3d 321, 326 (7th Cir. 1994). In that connection, “a court may consider several factors, a few factors, or only one determining factor ... depending on the totality of circumstances presented to the court.” ENSCO
, 969 F.2d at 509. The fact

- intensiv e inquiry is “particularly suited” to case

- by

- case analysis, and we have resisted a ttempts to impose upon district courts a require ment to either include or to ignore any particular factors in its ultimate d ecision, even ones that might strike an unbiased observer as salient facts. Id. Even so, we have a responsibility to do more than rubber

- stamp the district court’s decision, and so we begin by exploring how the court arrived at its decision to place 100% of the financial burden for cleaning up the Lower Fox River on NCR.

A

After the court sorted out the questions of cost

- recovery and contribution, it held a scheduling conference under Rule 26(f) and asked the parties to lay out a discovery plan. NCR and Appvion proposed that the court set a firm trial dat e and permit full discovery into all relevant matters at once. The defendants countered with the suggestion that the court limit initial discovery to “(1) when each party knew, or should have known, that recycling NCR

- brand carbonless paper would result in the discharge of PCBs to a waterbody, thereby risking environmental damage; and (2) what, if any, action each party took upon acquiring such knowledge to avoid the risk of further PCB contamination.” Defendants22 Nos. 13

- 2447 et al.

ar gued that actual or constructive knowledge of the risk and any failure to take immedi ate action to prevent the risk would be the key factors in determining the equitable alloc ation of costs. The court adopted the defendants’ proposal for targe ted discovery

. It explained that, in the relatively wide

- open world of equitable

- contribution actions, “fairness would seem to dictate that those who were in the best position to know about possible contamination ... should bear more r esponsibility than parties further down the stream (so to speak)” and that “under some circumstances, joint tortfe asors having substantially greater culpability can be denied contribution altogether.” A ruling reached on this basis, the
court hop ed, would obviate the need for much of the disco very that NCR and Appvion were seekin g. The parties undertook discovery in accordance with this plan, and both sides filed motions for summary judgment. The ir efforts yielded a hefty record, with some 900 exhibits
, covering ex pert and government reports; deposition test imo ny; labora tory notes ; corporate records; and correspon dence. Based on these materials, the court distilled the undi sputed material facts.

The court began by finding that NCR used Aroclor 1242, a solvent containing PCBs and manufactured by Monsanto, from 1954 until it found a n adequate alternative in 1971. During this time, which it called the “production period,” roughly 30 million pounds of the PCB

- laden emulsion were used. Though it had not yet called for discovery into the quantities that were discarded into the River, the court noted that the WDNR calculated that 98% of the PCBs in the Lower Fox River entered it during the production period. WDNRNo s

. 13

- 2447 et al. 23

esti mated that 39% of the PCBs entered the river as a result of NCR’s own manufacturing process, and 56% entered as a result of the recycling operati ons of the defendants during the 1954 to 1971 period. The remainder , it said, was dumped by recycling mills continuing to recycle carbonless copy p aper after the production period ended in 1971. These est imates, however, were outside t he scope of the discovery plan, and NCR did not concede their accuracy. We therefore disregard this data for present purposes.

The court next considered evidence about knowledge: what did each party kno w about the environmental dangers posed by PCBs, and when did it acquire this knowledge

. For this purpose, the court relied heavily on correspondence by the British company Wiggins Teape, which was NCR’s e xclusive licensee for carbonless copy paper production in E urope. The Wiggins Teape documents showed tha t the co mpany was aware as early as 1964 that Aroclor was toxic, and that it knew that recycled NCR paper could not be used for food packaging unless it was sufficiently cleansed.

There were also records of scientific tests beginning in 1965 demonstrating the toxicity of Aroclor 1242. NCR’s own studies showed that PCBs had a “defatting effect” when they came into contact with skin, and indicated that the company was searching for a replacement. (In other words, PCBs are an irritant that chemically dissolve s the fats in the skin and leaves it cracked and vulnerable to infection.) An indepen dent study published by the Swedish scientist Soren Jensen in 1966 called PCBs “as poisonous as DDT,” and said they were harmful to the liver and the skin. NCR scientists were aware of this report by February 1967 at the latest.24 Nos. 13

- 2447 et al.

Monsanto apparently began to worry about the en v ironmental effects of Aroclor i n the late 1960s: on March 12, 1969, it circulated an internal memo with advice about how to deal with customers’ conce rns about Aroclor’s safety. It essentially advocated silence, except with NCR

— which by itself comprised 40% of the market for Aroclor 1242 in 1968. Monsanto decided to follow NCR’s approach toward the i ncreasing worries about PCB s in crafting its own respo nse. When Monsanto employees visited NCR headquarters in late March 1969, NCR officials told them that it wanted to stay informed about new developments, but it was not going to make any changes unless another article appeared specif ically naming NCR as a source of the pollution. Samples ta ken by Monsanto in late 1969 and early 1970 showed that the effluent from NCR’s emulsion plants had “quite high” levels of Aroclor 1242. Wiggins Teape documents from 1970 show that it was becomi ng acutely aware of the pro blem and that British re gulators were zeroing in on Aroclor as an environmentally toxic substance. Nevertheless, documents from that year r eveal that NCR pushed Wiggins Teape not to disclose that NCR w as the source of the Aroclor

- coat ed paper . This r equest made Wiggins Teape executives uncomfortable. An internal memo from the latter written on February 13, 1970, indicated that although no study had definitely established a causal link between PCBs and health problems at that point, Wiggins Teape had known a bout potential toxicity since 1955 . The memo also said that t he Jensen report in 1966 awoke a “sleeping tiger.” It worried that a comparison could be drawn between the PCB threat and the evolving public knowledge of the health dangers of cigarettes.No s

. 13

- 2447 et al. 25

Mons an to stopped selling Aroclor 1242 in 1970, explai ning to its customers that PCBs’ “use in synthetic resin co mpositions may be a source of ... alleged environmental co ntamination.” NCR d ecided to draw down its remaining stock of Aro clor; it ceased using Ar o clor to make carbonless copy paper in April 1971. The following year, NCR circulated an internal memorandum stating, “In the late 1960’s accumul ative evidence began to show that PCBs may have adverse effects on certain forms of animal life. ... The resistance to breakdown

— such as thermal and biodegradation

— was shown to lead to accumulations in the environment.” The authenticity of these documents was not contested, and in light of them the district court concluded that it could draw certain inferences that could not be disputed. First, it concluded that NCR knew that PCBs posed a risk of env ironmental harm by the late 1960s. This is not to say that NCR knew definitively that PCBs were harm ful, but it was aware that the re was a danger that they were toxic to human and animal life when released in waterways, and that they did not break down in the environment. At the latest, said the court, NCR knew this much when Monsanto sent its le tter about environmental concerns in early 1970.

The court next concluded that none of the defendants knew about the risks of PCBs until after NCR had ceased to produce carbonless copy paper in 1971. It noted that NCR had produced no evidence that any defendant knew that NCR’s paper contained PCBs at all, or that the paper could lead to environmental damage, in the period before April 1971. In drawing this inference, the court discounted three pieces of evidence that NCR now highlights : 1) an industry

wide report stating that the presence of PCBs in paper pro d-26 Nos. 13

- 2447 et al.

ucts and mill effluents had b een recognized since the late 1960s ; 2) testimony from a Menasha purchasing agent that it was instructed not to buy carbonless copy paper broke as early as 195 0 because it might contain PCBs ; and 3) testim ony by a Fort Howard employee that Monsanto’s decis ion to stop selling Arocl or 1242 in 1970 was “well known. ” The court discounted the industry report because it was pr epared in 1976 and did not show that the mills were specif ically alerted to PCBs in NCR’s products ; it found the Menasha agent’s testimony unhelpful because he later rep udiat ed it and the plaintiffs themselves rejected it in a diffe rent document before the court ; and it found the Fort Ho ward employee’s testimony to be beside the point, because th e deponent dated the knowledge to 1974 , not 197 0.
In the district court’s view, the record left no doubt that NCR and Appvion knew long before others that PCBs posed a long

- term risk to the environ ment. T he importance of this early knowledge , it thought, drowned out all other equitable factors. It add ed that NCR actually increased its production of PCB

- laden carbonless copy paper even as its knowledge of the risks increased in the late 1960s
, and NCR’s response to the evidence was sluggish at best. It also reasoned that NCR was in a far better position to learn about the risks, even if it was not fully aware of them. Finally, it found that the equities strongly favored the defendants even in the p eriod from 1954 until the mid

- 1960s, when all parties were ignorant of the risks posed by PCBs, because “bet ween pa rties who produced the product and those who merely pr ocessed it and recycled it along with all other paper products or water sources, these latter parties are significantly less blameworthy.” Th e court recognized that this was not a claim for indem nification by the defendants, but it felt thatNo s

. 13

- 2447 et al. 27

such ac tions provided a useful analogy. The principles b ehind indemnification

— particularly when one party provides another with a defective product

— argued for denying co ntribution to NCR.

The district court decided that no equitable adjustment was needed for the period when the defendant recycling plants continued to use broke from NCR’s carbonless copy paper after the product was discontinued in April 1971, and indeed past the point where the court concluded that all pa rties had knowledge of the harmfulness of PCBs. There was little that would have alerted the recycler s to the danger of this use

. In 1976, Wisconsin approved the continued use of wastepaper containing PCB in recycling operations. See Wis. Stat. § 144.50(3)(c) (1976). The EPA promulgated a regulation in 1979 that allowed the continued use of PCB

- containing carbonless copy paper, 44 Fed. Reg. 31,514 (May 31, 1979), and in 1984 it granted an e xpress exemption for th e use of “recycled PCBs,” 49 Fed. Reg. 28,172, 2 8,175 (July 10, 1984). A further amendment to allow the “safe level” of recycled PCBs to be measured in a more flexible way (to benefit the paper recyclers) followed in 1988, 53 Fed. Re g. 24 , 206 (June 27, 1988). F or the interim perio ds when the defendants co ntinued to recycle PCB

- contaminated paper before these e xpress authorizations, the district court used a WDNR study to conclude that the amount of PCBs dumped into the River during this period was less than two percent of the total (al though it did not conduct discovery on this point) . It would be a “Herculean task
, ” the court feared, to try to isolate and apportion responsibility for such a small portion of the ove rall PCBs in the River. At any rate, said the court, there was

no ev idence that these additional releases contributed signi ficantly to the cleanup costs, and they did not put a dent in28 Nos. 13

- 2447 et al.

NCR’s overall greater equitable responsibility for the clea nup.
The court also pointed to policy reasons in support of its conclu sions . It worried that encouraging “manufacturers of a toxin” to continue using it until an economically feasible replacement can be found, and then allowing the manufa cturer to recover contribution from “innocent processors” of the toxin, creat ed a moral hazard. F inally, it thought that an approach t hat encourage s producers of toxic materials to act “swiftly and proactively” as soon as the data be gin to su ggest the potential for environmental damage was more co mpatible with CERCLA

. B

NCR attacks the district court’ s grant of summary jud gment on two fronts. Its main thrust, to which we will return in a moment, is that it was an abuse of discretion to dete rmine at this stage that the equities so clearly favored the d efendants as to make NCR responsible for 100% of the costs of response

— both its own costs and the costs initially borne by the defendant recyc ling mills

. It also makes the procedural argument that the district court impermissibly resolved di sputed questions of fact on the way to reaching summary judgment. W e reject th e latter contention. The district court faithfully applied the appropriate standard for summary judgment, and the conclusions it reached about the parties’ relative knowledge and awareness of the risks of PCBs were consistent with the undisputed evidence in front of it. NCR’s contention that the district court resolved dispu ted questions about when the company knew about the da ngerousness of PCBs is based on a misunderstanding or aNo s

. 13

- 2447 et al. 29

mischaracterization of the conclusions that the district court drew. If the district court ha d determined, without qualific ation , that NCR knew how dangerous PCBs were in the mid

1960s, NCR might have a point. NCR presented evidence showing that it did not believe that Aroclor 1242 was toxic because the initial eviden ce of toxicity related to Aroclor products with higher amounts of chlorine. (Aroclors were numbered based on their chlorine content; the “42” in Ar oclor 1242 indicates that the product was 42% chlorine.) An expert retained by NCR produced a report stating that earl ier studies focused on higher

- chlorinated Aroclors, and that the toxicity of PCBs was “poorly known” even through the early 1970s.

N CR also presented some evidence showing that the company internally felt that PCBs were not an environme ntal risk. For example, notes taken from a meeting between NCR and Monsanto employees showed that the parties di scussed an incident of mass bird deaths in the Irish Sea in November 1969 ; those notes indicate that the investigation “cleared PCBs.” On the same document , the employee ta king the notes wrote, “We think it degrades.” The record also contains a letter sent from Monsanto to its customers in 1970 saying that Aroclors with a chlorine content below 54% “a ppear to present no potential problem to the environment.” This evidence of NCR’s subjective beliefs would call into dispute any conclusion that NCR knew for a certainty about the impact its PCB use would have on the environment in the mid

- 1960s. But the district court did not say that NCR had such perfect knowle dge. I nstead, it concluded that NCR was beginning to see the warning signs about PCBs in the mid

- 1960s. This is indisputably true; Wiggins Teape doc u-30 Nos. 13

- 2447 et al.

ments showed awareness of PCBs’ toxicity in 1964, and NCR had the Jensen Repo rt by early 1967 at the latest

. The court’s point was that by the mid

- 1960s NCR was aware that Ar oclor posed a risk of being harmful to the environment . Ev idence had begun to accumulate that PCBs might cause s evere damage . The recycling mills , in contrast, had not seen that evi dence, a nd even if they had seen it, they had no a pparent way o f knowing that NCR’s broke contain ed PCBs. Whether NCR was given different information about higher

chlorinated Aroclors, or whether some of its fears about PCBs were allayed during a meeting with Mons anto e mployees, does not change the fact that it was on alert by then

. Given the district court’s ca ution in drawing its factual conclusion about NCR’s knowledge in the period between 1964 and 1971, we find nothing in the record to bring its findings into dispute. NCR’s argument could be taken to suggest that the district court should not have settled for such a modest conclusion; once it chose to decide the case based on knowledge, NCR might say, it should have pr oceeded (perhaps after more discovery) to resolve in full what each par ty knew and when. Th is is just another way of pu tting the question whether it was an abuse of discretion to decide contribution shares based on the facts as they stood

— the issue to which we now turn.

C

Th e ultimate question on this part of the appeal is whet her the district court abused its discretion by allocating 100% of the Lower Fox River response costs to NCR at this jun cture. In the past, we have stressed that the di strict court’s discre tion is broad , both when it determines how much weight to place on any given e quitable fac tor before theNo s

. 13

- 2447 et al. 31

court, and also when it chooses which factors are pertinent at all for the case before it. Firms that have failed to secure contri bution have come to us looking for greater certainty. Some have argued that fidelity to volumetric shares is r equired, see Browning

- Ferris , 195 F.3d at 958

– 59, and others have urged that fault must play the leading r ole, ENSCO
, 969 F.2d at 507 n.4. We have rejected these pleas for a one

size

- fits

- all bright

- line rule. Courts may permissibly make the equitable allocation based on “several factors, a few fa ctors, or only one determining factor ... depending on the t otality of circumstances presented to the cour t,” as long as the factors chosen are rational. ENSCO , 969 F.2d at 509

. S ee also Litgo N.J. Inc. v. Comm’r N.J. Dep’t of Envtl. Prot. , 725 F.3d 369, 387 (3d Cir. 2013) (courts have “tremendous discretion”).

Yet discretion has limits. Even if some factors are not
outcome

- determinative on their own, the district court’s d ecision must reflect its consideration of th e particulars of the

case, lest the outcome become too divorced from the pu rposes underlying CERCLA . For example, in Kerr

- McGee Chemical Corp. v. Lefton Iron & Metal Co. , we found an abuse of discretion when the district court allocated cleanup costs based on the erroneous belief that an indemnification agreement between the parties did not apply to the costs at issue. 14 F.3d 321, 326 (7th Cir. 199 4). While acknowledging that the indemnification agreement was “not necessarily d eterminative” of the contribution question, we held that it should have been con sidered when allocating costs and that one party’s responsibility for producing most of the was te at the cleanup site did not justify “ ignor [ing] other relevant considerations.” Id.32 Nos. 13

- 2447 et al.

The Eighth Circuit confronted a similar problem in K.C.1986 Ltd. P’ship v. Reade Mfg. , 472 F.3d 1009 (8th Cir

. 2007). The district court there had refused to consider
pr etrial settlement credits obtained by one of the parties in its contribution decis ion, despite CERCLA’s explicit policy against double recovery . See 42 U.S.C. § 9614(b). Reasoning that the district court “failed to consider a relevant factor that should ha ve been given significant weight,” the appellate court found an abuse of discretion. Id. at 1017. It explained that “[i]n determining which equitable factors are appropriate, the policies articulated in CERCLA cannot be ignored.” Id. In one significant way , this case is unlike th e earlier ones
, or nearly any other CER C LA contribution a ction . Usually, a litigant dissatisfied with its contribution share will assert that the district court assigned impermissible weight to ce rtain factors based on evidence in t he record, or discounted facts that it should not have. In those situations , it is relativ ely easy to evaluate whether the district court neglected to consider an im portant factor or placed unacceptable weight on some factors while failing to accord due re spect to others. Here, however
, we are asked to decide whether the district
court is authorized to preselect the equitable factor that it b elieves most likely to determine the outcome, and then co nduct limited discovery into that factor to see if it can reach an equitable determination.

We do not dismiss phased discovery out

- of

- hand as a n unacceptable way to manage CERCLA contribution actions. Questions of cause and culpability surrounding an enviro nmental cleanup can be tremendously complex, and disco ver y into every matter that a nyone deems relevant

— no ma t-No s

. 13

- 2447 et al. 33

ter how unlikely it is to sway a court’s equitable allocation of
costs

— could be prohibitively expensive and wasteful of the time of the court and parties alike. If one factor, such as knowledge, will so clearly overwhelm all others such that inquiry into other matters is unnecessary, there is no reason to force parties to bear additional costs just for the sake of appearances. Nonetheless, the court’s ulti mate decision must reflect CERCLA’s equitable prin ciples. W e have always drawn a distinction between determining an action based on a single factor, and considering only certain factors on the way to the decision. The former practice is what ENSCO approved . See 969 F.2d at 509. The latter showed up in Ker r

- McGee , in which we reversed because the district court failed to show its awareness of certain relevant factors before arriving at its equitable conclusion. Similarly, in Beazer East, Inc. v. Mead Corp. , the Third Circuit found an abuse of discretion whe n the district court “prioritize[d] a priori the parties’ relative contributions of waste over their contractual intent to all ocate environmental liability among themselves.” 412 F.3 d 429, 447 (3d Cir. 2005). These cases demonstrate that the di strict court must decide what is relevant based on the record as a whole; a n allocation based on otherwise permissible fa ctors will not be rescued if it does not explain why the court has chosen to disregard other apparently relevant info rmation

. Kerr

- McGee , 14 F.3d at 326; cf. R.W. Meyer , 932 F.2d at 573 (“Congress intended the court to deal with these situ ations by creative means, considering all the equities and ba lan c ing them in the interests of jus tice.”) (emphasis added).

NCR argues that the district c ourt here made the same error that we criticized in Kerr

- McGee : that it pre selected34 Nos. 13

- 2447 et al.

knowledge as the determinative factor and permit ted di scovery into only that aspect of the case , thus depriving NCR and Appvion of the opportunity to develop evidence of ot her potentially relevant factors. NCR is not suggesting (or at least it should not be suggesting) that it necessarily i s ent itled to a different result based on the additional evidence it would have presented. Instead, it contend s that the alloc ation decis ion could not have been made based on the totality of the circumstances because the district court did not have the totality of the circumstances before it. At least three equ itable factors that the court put to one side would have been relevant to the que stion of cost allocation, it urge s : the pa rties’ relative volumes of PCB discharges; sources of PCBs in the river other than carbonless copy paper; and the parties’ levels of voluntary cooperation with the government’s cleanup effort. We agree with NCR tha t these point s are potentially re levant to an understanding of who should contribute to the costs of the Fox River cleanup. For us to evaluate the district court’s allocation decision, therefore, we would need to see either that it evaluated and reject ed t hese considerations as bases for allocation, or that it explained why one or more of them were so immaterial when compared with the ones on which it chose to rely as to make it fruitless for a party to d evelop evidence on those points. Unfortunately, the court did not record its thinking in this respect. We are thus unable confidently to say that the court chose knowledge as the deciding factor because u ndisputed facts showed that the relative volumes of di scharge, alternate sources, and voluntary coopera tion paled in comparison to knowledge. When explaining why it choseNo s

. 13

- 2447 et al. 35

to proceed solely on the basis of the parties’ knowledge of the dangers posed by PCBs in the first instance, the court said that its “premise was that parties who knew, or should have know n, about the dangers of PCBs should bear the brunt, or even the entirety, of any cleanup costs resulting from PCB contamination.” Its analysis of the parties’ relative knowledge was thorough and thoughtful, and reasonable as far as it went

. The problem is that the court’s reasons for r ejecting co nsideration of other factors leave us unable to say whether the record adequately supported the court’s decision to select knowledge as the decisive fac tor . All the court said was that apportionment on factors apart from knowledge “would r equire additional phases of the trial” in which the parties could prove other disputed facts like volume. It then reite rate d its conclusion about knowledge, both that NCR was “not completely ignorant” of the dangers of PCBs during a t least some of the period when they were producing carbo nless copy paper, and that it was in the “best position” to learn of the dangers be fore it was fully aware. It added that in the period before any party could have been aware of the dangers, the equi ties favored the recycling mills because NCR actually produced the product, whereas the recycling mills “merely processed it”; it analogized the recycling mills to “innocent end

- users.” It added that NCR bore more r esponsibility because the “defect” in its product

— the PCBs

—

w as the key to its profitability and not “inci dental,” and that NCR was “sluggish” in its response to the mounting data about PCBs. As compelling a picture as this is on the knowledge issue, it does not explain why other factors, such as cooperation in36 Nos. 13

- 2447 et al.

the cleanup or relative volumes dumped, are so wholly i rrelevant to the equitable determination that information about them need not even be gathered or presented by the parties. Without a more complete record, we are unable to endorse the c ourt’s decision to resolve the case on the basis it chose. As a practical matter, the district court was unable to avoid mentioning basic facts such as the relative volumes of PCB s discharge d by the par ties, even though it qualified those references with t he acknowledgment that the figures had not been subject to discovery. O ther factors that NCR proposes, such as cooperation, might have influence d the court’s conclusions about NCR’s slow responses to da ta

. We hasten to say, however, that further informatio n may just as easily point in the other direction and have the effect of rei nforcing the district court’s present conclusions. It is imposs ible to know at this juncture what the likely effect will be.

We understand that a party’s knowledge that it is eithe r doing something wrong or running an undue risk that it is doing something wrong can be a compelling basis for deci ding who should contribute to the costs of clean

- up. But we do not want, either advertently or inadvertently, to privilege that factor above all others. Knowledge may be the point that tips the scale, but only after other plausible relevant fa ctors have been considered and either added to the balance or discarded as inappropriate for the case at hand.

We also note that some of the reasons the court gave for allocating all of the cost s to NCR do not appear to be co nsistent with its stated rationale, particularly for the period of “general ignorance” preceding the existence of any serious evidence about the dangers of PCBs. Regardless of whether NCR produced the carbonless copy paper and the defendantNo s

. 13

- 2447 et al. 37

mills merely recycled it, the fa ct remains that it was used in in all of their businesses. At least for that period, the court gave no reason to fault one party more than another for pr oducing something that it did not realize was environmenta lly toxic. The court also did not explain why it was important whether the harmful material was essential or collateral to the product’s main purpose

. We do not lightly impose the burden on either the parties or the court of additional complex and time

- consuming di scovery , and we appreciate the effo rt that the district court has made to manage this case. Nonetheless, i n the equitable realm where CERCLA contribution actions exist, we must remain vigilant to ensure tha t the financial responsibility for this huge project is properly allocated. On the su mmary judgment record before us, we cannot be sure either that the court did, or that it did not, adequately consider all of the circumstances before making its decision. We therefore v acate the judgment of the district court denying any contri b ution to NC R and imposing the response costs of the recycling mills on NCR, and remand so that the district court can d ecide which factors will guide its decision on the basis of a more complete record.

IV. NCR’s Arranger Liability Next, we address an argument made on c ross

- appeal by P.H. Glatfelter Company and WTM I Company (collectively “Glatfelter”) that the district court, despite its allocation of all response costs for operable u nits 2 through 5 to NCR, subject ed NCR to less liability than it deserved. Glatfelter a sserts t hat NCR sh ould have been held liable under CERCLA

as a n entity that “arranged for disposal” of a toxic substance (PCBs) based on its corporate predecessor’ s sale of broke to38 Nos. 13

- 2447 et al.

recycling mills. See CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3). While thi s matter would be largely academic if only operable units 2 through 5 were at stake, a finding a dverse to NCR on so

- called “arranger liability” would also make it liable for response costs at operable unit 1 , which is the designation for Little Lake Butte des Morts. This would increase NCR’s exposure in contribution.

Glatfelter’s case for NCR’s arranger liability centers on the actions of NCR’s corporate predecessor Appleton Coated Paper Company, which was one of the mills that coated ca rbonless copy paper with NCR’s emulsion during the pr oduction period. Recall from the discussion of Appvion’s CERCLA § 107 claim that Appleton Coated was eventually subsumed within NCR, and that its CERCLA liability co ntractually remained wit h NCR when its assets were sold to the corporation now known as Appvion. See supra at 14

. R ecall further that one way the carbonless coating mills made money during the production peri od was to sell their broke to the recycling mills for reprocessing. See discussion begi nning supra at 5

. The theory advanced by Glatfelter is that Appleton Coated was “arranging for disposal” of its PCBs when it sold the broke to the recycling mills , and therefore that NCR remains responsible for the site whe re those PCBs ended up.

The district c ourt held a trial on this point and made se veral findings of fact . Even though Appleton Coated tried to minimize its broke creation because its sale price did not outweigh the cost of materials and labor, the broke was va luable and recorded as an asset on the company’s balance sheet. Selling broke , the court concluded
, allowe d Appleton Coated to “mitigate loss es” from its production of carbonlessNo s

. 13

- 2447 et al. 39

copy paper; the court rejected the idea that the broke was an independent product for sale. The broke had value to the r ecycling mills, which is why they were willing to pay for it ; t he alternative would have been for A ppleton Coated to pay for disposal or recycling. Appleton Coated invested a co nsiderable amount of money in re covering the broke, grading it, sorting it, storing it, and baling it. The broke was then sold to the recycling mills i n a competitive market. After using it, the mills would direct as they saw fit disposal of their waste from reprocessing the broke

. Though the recycling mills attempted to prove that A ppleton Coated knew that NCR’s PCB emulsion would end up in the River as a result of its broke sales, the district court found the evidence insufficient to conclude that any ind ividual employee at Appleton Paper fully knew what th e mills were do ing with the n on

- fibrous components of broke. This is not to say Appleton Coated was ignorant of the ge neral recycling process; it realized that some byprod uct would end up in the River. Nevertheless, the evidence did
not show that Appleton Coated was aware of how much b yproduct would be flushed into the River and the e xtent to which it would be treated before it was d ischarge d. The
court characterized Appleton Coated as “indifferent” t o what happened to its broke after it was sold. What qualifies as “arranging for disposal” under CERCL A § 107 is clear at the margins bu t murky in the mi ddle. At one end of the spectrum are parties that “enter into a transaction for the sole purpose of discarding a used and no longer useful hazardous substance

. ” Burlington N orthern & Santa Fe Ry. Co. v. United States , 556 U.S. 599, 610 (200 9). Those entities are clearly covered by the statute. At the other40 Nos. 13

- 2447 et al.

end, a party cannot be held liable “merely for selling a new and useful product if the purchaser of that product later, and unbeknownst to the seller, disposed of the product in a way that led to contamination.” Id. Between these two extremes is a gray area, where liability becomes a “fact

- intensive i nquiry” that goes beyond the formalities of whether the transaction is termed a “disposal” or “sale” and looks to whether Congress meant to co ver the transaction when it enacted CERCLA. Id.

In Burlington Northern , the Supreme Court held that Shell Oil Company could not be held liable as an arranger when it contracted for the shipment of a hazardous chemical with knowledge that some of it was likely to leak en route. Id. at 604. Mere knowledge of potential spills was not enough to show that Shell “planne d for” disposal of the chemical. T he Court explained that arranger liability will not follow when the disposal is the “peripheral result of the legitimate sale of an unused, useful product.” Id. at 612. By contrast, the First Circuit’s decision in United States v. General Electric Co. , 670 F.3d 377 (1st Cir. 2012), illustrates a situation where a nominal “sale” qualified as the kind of disposal t hat triggers arranger liability. There, General Ele ctric sold drums of “scrap” material containing PCBs that it could not use in electric capacitators . It charged a bargain price to a local “chemical scrapper” who put them to use for his “industrial needs. ” Id. at 380. Although the scrapper later informed G eneral E lectric that the quality of the material was declining and that they should come retrieve some of the drums, the drums remain ed unused on the site for years and began to leak. Id. at 381. The cour t reasoned that mater ial stored in 55

- gallon drums that the company tried to u n-No s

. 13

- 2447 et al. 41

load in any way it could (including transfers to local lan dfills, sales to local governments for use as a dust suppre ssant, giving it away to employees, and discharging it into the Hudson River) was waste for disposal, regardless of whether the scrapper paid a nominal fee. Id. at 385. The court a ffirmed the factual finding that “ any profit it derived from selling scrap [chemicals]

... was subordinate and incidental to the immediate benefit of being rid of an overstock of u nusable chemicals .” Id.

The district court here arrived at a different conclusion: it found that Appleton Coated’s main purpose in selling broke was not to get rid of it, but instead to place it on a compet itive ma rket and recoup some of its costs of production. This is a factual finding, and thus one that we would disturb only if it were clearly erroneous. It is not. The district court e xplained that Appleton Coated invested significant resources in recapturing bro ke, and that it would have disposed of the broke qu ite differently if there were not such a healthy ma rket for it. The court also observed that th e mill was not sel ling containers of concentrated PCBs in an attempt to get rid of them, but instead was selling a product (broke) that is not inherently hazardous , and often comes without PCBs at all

. This distinguishes broke from the drums of chemicals at i ssue in General Electric

. Glatfelter argues that arranger liability should follow b ecause Appleton Coated knew that the recycling mills would separate the paper fibers in the broke from the PCBs, and that the mills would then dump the PCBs into the River. It would be enough, it contends , that the production mill s took “intentional steps” to dis card the broke given their knowledge that it would end up in the River. Glatfelter ur g-42 Nos. 13

- 2447 et al.

es in particular that the district court’s finding that Appleton Coated was at most indifferent to the final destina tion of the PCBs
, and that there was no particular kno wledge of their fate, set too high a bar, and that “generalized knowledge” that the recycling mills would dispose of them in some way would suffice.

Glatfelter’s two

- step rule to finding arranger liability
, under which all that would have to be shown is i ntentionally getting rid of a product and knowing that some part of it will be disposed later
, would sweep almost any entity that ever touches the product under arranger liability. Even the original producer would fall under this defi nition , as Mo nsanto in tentionally sold Aroclor to NCR and must have known that some portion of it would end up being discar ded. NCR’s sale of carbonless copy paper on the consumer market might also qualify as “arranging for disposal” under this theory, because eventually all co nsumer paper ends up being disposed of somewhere. This would expand arranger liability well past the limit established in Burlington Northern

. Perhaps, however, Glatfelter is willing to accept a na rrower rule, under which the putative arranger must be

some one other than the manufacturer of the product . But again, Burlington Northern establishes that not all parties fi tting that bill will qualify as arrangers. A company using hazardous materials to manufacture a “new and useful product” that it then sells on the open market, even with knowledge that some of that product will be discarded, is not an arranger, although it might be liable un der another provision of CERCL A

. Even selling with perfect knowledge that the buyer will dispose of the materials at some point in the future cannotNo s

. 13

- 2447 et al. 43

on its own qualify as arranging for disposal. In order to d ecide if someone is an arranger, it is also important to look at the party’s in te nt. I t is more likely to be an arranger if it was simply trying to dispose of the materials, or if it was co mpelled to get rid of them . Although getting the broke out of its factory was surely useful at some level to Appleton Coa ted, getting rid of invento ry is useful to every seller of a product. The simple fact, based on the dis trict court’s fin dings, is that Appleton Coated was not just trying to find a way to dispose of trash when it sold its broke, nor did it need to find a way to bring it to an ultima te destination . It prepared and sold broke because broke was a valuable input for the recycling mills

. O nce the recycling mills obtain ed Appleton Coated’ s broke, what happened to the PCBs embedded in the broke

was com plete ly out of the seller’ s hands. The recycling mills could have dumped the byproduct of their broke processing in the River, sold it again to another entity, contracted with a disposal company to get rid of it, or brought it to a landfill themselves . Whatever the buyers did with this byprodu ct, Appleton Coated neither con tracted with them to take that step, nor did it have any control over what the recycling mills ultimately did. This lack of control is a good reason to find Appleton Coated was not arranging for disposal (though we do not mea n to suggest that an ostrich approach would work)

. See United States v. Shell Oil Co. , 294 F.3d 1045, 1055 (9th Cir. 2002) (“[C]ontrol is a crucial element of the d etermination of whether a party is an arranger under § 9607(a)(3) .”). Compare Catellus Dev. Corp. v. United States
, 34 F.3d 748 , 750

– 52 (9th Cir. 1994) (finding arranger liability when auto parts store sold used batteries to “cracking plant” for disposal even though plant extracted lead from batteries,44 Nos. 13

- 2447 et al.

while rejecting idea that all byproduct sales are disposal)
, with Shell Oil , 294 F.3d at 1055 (distinguishing Catellus b ecause party had no “direct involvement in arrangements for the disposal of waste”).

It is true that broke is not a “ new and useful product” as described in Burlington Northern . 556 U.S. at 610 (emphasis added) . It is useful, but not new. Sales of a new and useful product, however, were meant to represent one end of a co ntinuum

. Other sales can still qualify, particularly when they are for mo re than token amounts and tak e place on a co mpetitive market. And unlike the products in both Burlington Northern and General Electric , the “product” at issue here was not the harmful chemicals themselves, but a useful input that also contained the hazardous material. Purchasing this product was essential to the recycling mills’ business oper ations, and they must take the bitter with the sweet of opera ting in that market. We therefore affirm the district court’s holding regarding NCR’s arranger liability.

V. Insurance Offsets

We turn ne xt to the question whether the district court should have offset against NCR’s contribution certain liabi lity insurance proceeds that Glatfelter obtained

. NCR objects to the district court ’s ruling that its contribution liability should not be reduced by t hose amounts. Eval uation of its claim requires us to decide two related matters: whether the collateral source rule applies in CERCLA contribution a ctions, and if not, whether any amount of Glatfelter’s insu rance settlement should have been offset against NCR’s r equired contribution.No s

. 13

- 2447 et al. 45

We agree with the district court that the collateral source rule does not apply in CERCLA § 113(f) contribution ac tions , and so in principle courts may take insurance payments into account when deciding contribution shares

. As the Tenth Circuit explained in Friedland v. TIC

- The Industrial Co. , 566 F.3d 1203 (10th Cir. 2009), the collateral source rule is meant to prevent a defendant from receiving the benefit of insu rance compensation paid to an (innocent) injured third party. I d. at 1206

– 07; see also R ESTATEMENT (S ECOND ) OF T ORTS § 920A(2) & cmt. d. Contribution actions under CERCL A § 107 are a mechan ism for allocating costs among joint tor tfeasors and are governed wholly by equity. Equity would not be served by requiring a dist rict court to remain blind to alternate sources of recovery for one tortfeasor and the po ssibility of its recouping more than 100% of its share

. Cf. K.C.1986 Ltd. P’ship v. Reade Mfg. , 472 F.3d 1009, 1018 (8th Cir. 2007) (district court should have conside red settlement credits when calculating amount of judgment); Boeing Co. v. Cascade Corp. , 207 F.3d 1177, 1190 (9th Cir. 2000) ( district court properly tried to eliminate double reimbursement for same expense). The question before us is thus narrow: whether the di strict court properly treated the insurance settlements in this

case. We look for guidance to Friedland ’s second holding, that when a party enters into a settlement with its insurer that does not break down the amount of the settlement that covers i ts costs in common with other PRPs and the amount that covers individual costs (such as defense costs) , that pa rty cannot later assert that the settle ment is dedicated wholly to its individual costs and thereby avoid having i t credited against a counterpar ty’s contribution share. 566 F.3d at 121046 Nos. 13

- 2447 et al.

(citing Hess Oil V.I. Corp. v. UOP, Inc. , 861 F.2d 1197, 1209 (10th Cir. 1988)).

The district court rejected as inequitable a reading of Friedland t hat would require all proceeds from an undiffe rentiated insurance settlement to cover com mon liability
costs

. Even NCR’s expert agreed that at least some of Gla tfelter’s settlement was for defense costs, which are not su bject to recovery in contribution. Some differentiation , it held, is thus necessary

. Noting that an after

- the

- fact attempt to earmark the settlement funds would be too speculativ e , the court looked back to Glatfelter’s original insurance contract with its carrier. This contract included coverage for both d irect liability and defense cost s, although only the liability portion was capped at a certain amount of money. For the purpose of evaluating the claim before it, t he court then made the assumption

— favorable to NCR

— that as much of the settlement as could be attribut ed to common liability should be , in order to avoid any gamesmanship by Gla tfelter . Thus, to calculate how much Glatfelter stood to reco ver, it started by taking the full amount of Glatfelter’s insu rance settlement and subtracting that portion in excess of the contract’s liabil ity maximum . Adding that figure to the co ntribution amount Glatfelter sought from NCR, it found that the combined amount of liability insurance and contribution would not cover Glatfelter’s full liability, so there was no danger that Glatfelter would recov er more than 100% of its share. A ccordingly, it held that Glatfelter’s insurance pr oceeds should not be offset against its contribution claim. We find the district court’s reasoning sound. Contrib ution actions are governed by equity , and the disposition of i nsurance settlements to a PRP is one aspect of that equitableNo s

. 13

- 2447 et al. 47

determination. Friedland affirms that any level of double r ecovery is inequitable in CERCLA contribution actions, and that ignoring insurance settlements when it would lead to double recovery is inconsistent with the statute’s purpose. It does not otherwise establish a bright

- line rule for how a court should t reat insurance settlements . Under differe nt ci rcumstances, the treatment of Glatfelter’s insurance proceeds might have been inequitable: if, for instance, Glatfelter had negotiated an enormous insurance settlement, but had str ategically allocated all of it to defense costs in the settlement agreement and put up a smokescreen of “bargaining away” its liability coverage. The governing rule is equity, and the way equity was achieved in Friedland may prove unsuitable
to other cases. The district court ’s dete r mination here that it was not inequitable to leave the insurance proceeds with Glatfelter was not an abuse of discretion. One final question is whether the district court abused its discretion by treat ing Glatfelter’s liability for operable u nits 1 throug h 5 as an undivided cost, or if it was required to se gregate the unit 1 costs and give NCR credit for the costs a ttributable to units 2 through 5. We are satisfied that because the amount of Glatfelter ’s insurance settlement does not cr eate a risk that it would be made more than whole if it r eceives its demanded contribution share , the re was no harm in the district court ’s decision to consider all of Glat felter’s Fox River liability as a whole . We therefore affirm the di strict court’s decision not to credit Glatfelter’s insurance se ttlement against NCR’ s contribution share.

VI. Natural Resource Damages

NCR appeals from the district cou rt’s holding that the defendant recycling mills can recover all of t heir payments48 Nos. 13

- 2447 et al.

for natural resource damages in contribution fr om NCR. To the extent contribution for natural resource damages might be affected by our holding in Part III above regarding the equitable allocation of costs, the district court is free to r econsider this matter on remand. But NCR also urges that the dist rict court committed legal error by holding that NCR could be responsible for the natural resource damages at all

. W e review that determination de novo

. Among the damages that parties can be required to pay under CERCLA § 107(a) as part of an environmental rem ediation effort are “damages for injury to, destruction of, or loss of natural resources ... resulting from [the] release” of a hazardous substance. 42 U.S.C. § 9607(a)(4)(C). Private pa rties lack standing to bring natural resource damages claims und er section 107; such actions can be initiated only by the federal government or a state or tribal government for lands in that government’s possession or control
, or held in public
trust . See 42 U.S.C § 9607(f)(1); Nat’ l Ass’n of Mfrs. v. U.S. Dep’t of the In terior , 134 F.3d 1095, 1113 (D.C. Cir. 1998) (“It is true that CERCLA does not permit private parties to seek recovery for damages to natural resources held in trust by the federal, state or tribal governments

... . ” )

. The upshot of the government’s enforcem ent efforts in our case is that the defendants have had natural resource damages assessed against them, while NCR has not

. But the question whether a party may initia te a section 107(a) action for natural r esource damages is separate from the question whet her a pa rty sub ject to a section 107(a) action can then bring a se ction 113(f) action for contribution based on its liability for natural resource damages . The district court held that CERCLA § 113(f) makes contribution available for natural resource damag es , and NCR does not challenge that decisionNo s

. 13

- 2447 et al. 49

on appeal. We would agree with it at any rate; section 113(f) makes cont ribution available based on a party ’s being lia ble under section 107(a); it does not make contribution conti ngent on the type of section 10 7 damages at issue . See 42 U.S.C. § 9613(f) (“ Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil a ction under section 9606 of this title or under section 9607(a) of this title .”) (emphasis added). The statute’s later reference to equitable allocation of “response costs” cannot reasonably be read as limiting this blanket au thorization. Though se ction 107(a)(4) makes some explicit references to “respo nse

co sts,” those references are non

- exclusive, and all of the types of damages listed at section 107(a)(4) reasonably can be understood as “respo nse costs” for the purposes of se ction 113(f).
Even so, NCR a rgues that the availability of section 113(f)

con tribution for natural resource damage s must be limited by the language of section 107(a)(4)(C), which makes a party liable for “ damages for injury to, destruction of, or loss of natural resources

... resulting from such a release .” 42 U.S.C. § 9607(a)(4)(C) (emphasis added). According to NCR, t he phrase “resulting from” establishes a causation requirement that must be proven before a party can be re quired to pay any natural resource damage s . It claims the district court i gnored this requirement and therefore improperly relieved the defendants of their burden of proof. NCR’s argument falters insofar as it blends the standard for establi shing liability for natural resource damage s under section 107(a) with the standard fo r obtaining contribution under section 11 3(f). Indeed, discus sion of section 113(f) is50 Nos. 13

- 2447 et al.

noticeably absent from NCR’ s brief . In its version of the sta tute, it is only when two parties have been held liable for causing the same natural resource damage s through their independent actions that contribu tion between the two could come into play. But this is not what CERCLA says. A party may seek

co n tribution “from any other person who is liable or pote ntially liable under section 9607(a) ... .” CERCLA § 113(f), 42 U.S.C. § 9613(f). Section 107(a)(4)(A)

- (D) explain s the types of damages for which a PRP may be liable, and section 113(f) does not dis criminate among the types of damages eligible for contribution. The district court correctly limited the “d irect causation” requirement of section 107(a)(4)(C) to the first part of a two

- step inquiry: first, determine whether a party is liable for natural resource damage s under se ction 107(a), and second, determine whether it is equitably entitled to contribution for those costs from another party liable under secti on 107(a). NCR’s argument might have merit if the question were whether NCR should be held directly liable to the go ver nment for natural resource damage s unde r section 107(a). I ndeed, the two cases to which NCR refers demonstrate that the causation require ment is all about whether a party is li able for natural resource damage s under section 107; neither mentions section 113(f) . See Dedham Water Co. v. Cumberland Farms Dairy, Inc. , 889 F.2d 1146, 1153

– 54 & n.7 (1st Cir. 1989); Idaho v. Bunker Hill Co. , 635 F . Supp. 665, 674

– 75 (D. Idaho 1986). Here, the causation requirement of section 107(a)(4)(C) was satisfied when the defendants were found liable for natural resource damage s. As lia ble parties under section 107, they could then seek contribution from NCR, aNo s

. 13

- 2447 et al. 51

fellow PRP

. This is enough to demonstrate that the district court was correct when it held that the defendants could seek contribution for natural resource damage s from NCR

. NCR also argues that the district court erred by failing to give it the chance to present the “defense” that the defen dants cannot “recover” for natural resource damage s that o ccurred prior to CERCLA’s enactment in December 1980. See 42 U.S.C. § 9607(f)(1) . Again, though, NCR mischaracterizes the defendants’ position as “recovery,” w hen in fact it is the government that has recovered against the defendants. The defendants merely present claims for contribution. Under the statute, the government could not have recovered for natural resource damage s incurred before December 1980, so the defendants have no way to ask for contribution for those costs either

— they cannot seek contribution for damages that they never paid.

The district court was correct in its treatment of the se l egal questions r egarding NCR’s liability for natural resource d amage s in contribution, and so we affirm its holdings on those points.

VII. Discharges at Portage , Wisconsin

We now turn to Glat felter ’s argument that the district court improperly granted summary judgment in favor of NCR on the question whether discharges at a facility in Po rtage, Wisconsin
, should subject NCR to l iability for response costs at operable u nit 1. Portage is 90 miles upstream of the Fox River site. Glatfelter’s theory is that the d ischarges there flow to u nit 1 and thus should make NCR liable in c ontrib ution

.52 Nos. 13

- 2447 et al.

This claim was the subject of some procedural confusion in the district court. Glatfelter pleaded its contribution cou nterclaim regarding the Portage facility against NCR , and i n a February 28, 2011
, order granting summary judgment in part and denying it in part, the district court held that NCR h ad no CERCLA liability for operable u nit 1. It did not mention the Porta ge

- discharge theory explicitly. Later, in response to a motion for summary judgment b y Appvion after it was found not to be a PRP in the enforcement action, Glatfelter argued (among other things) that Appvion’s summary judgment motion did not address the allegation that di scharges at Portage could lead to liability; the district court reje cted this theory and granted summary judgment against Glatfelter on October 4, 2012. The confusion surrounding the Portage theory is entirely of Glatfelter’ s making . While its appellate brief claims that the district court erred by addressing an unpleaded Portage

based claim against Appvion and ignoring its actual claim against NCR, it was Glatfelter itself that raised the Portage claim in response to Appvion’s motion for summary jud gment in an attempt to keep Appvion in the case. (Appvion took over the Por tage plant from NCR in 1978.) The district court naturally responded to the claim Glatfelter was ma king in its reply to Appvion’s summary judgment motion, and not to a claim against NCR t hat Glatfelter was not pres sing. The judge did not err by understandi ng Glatfelter’s a rgument to be that the Portage claim was about Appvion’s lia bility

. At any rate, the court held in 2011 that NCR was not liable for operable unit 1 , and in 2012 that Appvion was not eith er. Although Glatfelter asserted to the court that t heNo s

. 13

- 2447 et al. 53

Portage claim was still live when it responded to the plaintiffs’ summary judgment motion on the state

- law counterclaims in 2012, that assertion is difficult to square with the finding in NCR’s favor in 2011, especially if we credit Glatfelter’s current position that this claim was not pleaded against App vion at all. That Glatfelter ignored the claim for years is reason enough to affirm the district court’s decision that Glatfelter waited too long to preserve its rights. But the district court also add re ssed this claim on the merits. E ven if neither party e xplicitly moves for summary judgment on the issue, the district court may enter summary judgment on its own motion. See F ED

. R. C IV

. P. 56(f). Glatfelter addressed NCR’s and Appvion’s liability at opera ble u nit 1 both before the February 2011 summary judgment or der and in its brief before the October 2012 order. The matter could not have been a surprise. All things considered, it was self

- evident that Glatfelter’s Portage theory had little merit, and Gla tfelter itself admitted to the court that it was pressing it without much conviction. The district court dealt with it appropriately

. We therefore affirm the dismissal of Glatfelter’s Portage claim.

VIII. Preemption of Common

- Law Counterclaims

Several defendants pleaded state

- law counter cl aims of negligence, strict liability, and creation of a public nuisance against NCR in response to its contribution action. The di strict court held that these counterclaims were preempted by CERCLA because they would effectively reapportion CERCLA costs in a manner contrary to CERCLA itself

. On

cross

- appeal, the defendants challenge this ruling.54 Nos. 13

- 2447 et al.

State law is implicitly preempted when it “interferes with or is contrary to federal law.” Free v. Bland , 369 U.S. 663 , 666 (1962). Such interference exist s , among other circumstances, “where state law stands as an obstacle to the accomplis hment and execution of the full purposes and objectives of Congress.” Freightliner Corp. v. Myrick , 514 U.S. 280, 287 (1995) (quoting Hines v. Davidowitz , 312 U.S. 52, 67 (1941)) (int ernal quotation marks omitted). We have already dealt with an argument almost exactly like the one in this case. See PMC, Inc. v. Sherwin

- Williams Co. , 151 F.3d 610 (7th Cir. 1998). There, the district court a llowed PMC to collect contribution under Illinois’s contrib ution statute even though it was not available under CERCLA, and we reversed. PMC’s use of the state statute,

we explained , was an attempt to evade CERCLA’s contrib ution mechanisms. A llowing stat e law to defeat the statute would “nullify the sanction that Congress had imposed for the kind of CERCLA violation that PMC committed.” Id. at 618. As for CERCLA’s savings clause stating that the statute does not “ affect or modify in any way the obligation s or li abilities of any person under other Federal or State law, i ncluding common law, with respect to releases of hazardous substances or other pollutants or contaminants ,” 42 U.S.C. § 9652(d), we explained that this clause was meant to protect victims of toxic wastes, not joint tortfeasors against one a nother. PMC, Inc. , 151 F.3d at 617.

L ike PMC, Glatfelter and WTM are not “victim[s] of to xic

- waste contamination in any realistic sense.” Id. Their

common

- law theories all present the same theory of caus ation at bottom: NCR ’s common

- law torts caused the cou nterclaiming defendants to incur CERCLA liability , and ther e-No s

. 13

- 2447 et al. 55

fore they are entitled to damages from NCR. But CERCLA was written to ensure that parties like the defendants would be liable so that someone w ould be available to pay for the environmental cleanup

. T he situation the defendants d escribe is the exact scenario that CERCLA § 113(f) is meant to cover, when “the less guilty of two tortfeasors” is trying to recover against the other. PMC, Inc. , 151 F.3 d at 618. We will not use state law effectively to undo CERCLA’s remedial d esign

— a design meant to protect the environ ment, not parties that dumped hazardous waste for years

. The two regimes cannot coexist while remaining faithful to Congress’s explicit pu rposes, and thus the co mmon

- law counterclaims must be preempted. The district court is affirmed on this point.

IX. The Government’s Appeal of Appvion’s § 107 Liability We write briefly on one final matter. The United States urges us to reconsider in this actio n whether the district court correctly held that Appvion is not a PRP at the Fox River site. Though the government recognizes that this judgment was made in the enforcement action, and that ne ither NCR nor Appvion raised any claims against the United State s in this case , it suggests that a ruling affirming the di strict cou rt’s treatment of Appvion could be used to estop the government collaterally in the enforcement action, or to e stablish the law of the circuit. It is hard to see why the government would b e collatera lly estopped from appealing Appvion’s liability in the e nforcement action based on our decision in this contribution

case . One of the requirements for collateral estoppel to apply is that “the issue must have been actually litigated.” H

- D Mich., Inc. v. Top Quality Serv., Inc. , 496 F.3d 755, 760 (7th Cir.56 Nos. 13

- 2447 et al.

2007). The question of Appvion’s direct liability has not been litigated in this appeal. It would be beyond the scope of this appeal for one of the parties against whom Appvion actually raised c laims to revisit the matter of Appvion’s liability here; that is a question for the related enforcement action. There is no reason why the government should be allowed to press arguments that the other parties cannot.

Even if there were a real risk of collateral estoppel applying , the correct place to address that risk is in the enforcement action. S tanding to appeal does not extend to every party that might f eel the secondary effects of a case

. The cases the government cites that supposedly support its ability to press its claim all relate to the question whether a prevailing party has sufficient interest in an appeal. See EEOC v. Chicago Club , 86 F.3d 1423, 1431 (7th Cir. 1996); LaBuhn v. Bulkmatic Transport Co. , 865 F.2d 119, 133 (7th Cir. 1988). The government is neither a winner nor loser against Appvion in this contribution action; it is a nullity. We will leave the question of Appvion’s CERCLA liability for the enforcement action.

X. Conclusion

We R EVERSE the district court’s judgment with regard to Appvion’s ability to bring suit under CERCLA § 107(a). We V ACATE the decision to hold NCR responsible fo r all of the response costs at operable u nits 2 through 5 in contribution. We A FFIRM the following decisio ns : that NCR may proceed only un der CERCLA § 113(f); that NCR is not liable as an arrang er; that Glatfelter’s insurance settlement may not be offset against NCR’s contribu tion share; that NCR can be r equired to contribute for natural resource damages; that Gla tfelter’s counterclaim based on the discharges at PortageNo s

. 13

- 2447 et al. 57

should be dis missed; and that th e defendant s ’ state

- law counterclaims are preempted

. This case is R EMANDED for proceedings consistent with this opinion.