In the

United States Court of Appeals

For the Seventh Circuit ____________________

Nos. 13-2447, 13-2522, 13-2568, 13-2570, 13-2572, 13-2605, 13-

2606, 13-2607, 13-2631, 13-2645, & 13-2866 

NCR CORPORATION, et al., 

Plaintiffs-Appellants,

v.

GEORGE A. WHITING PAPER COMPANY, et al.,

Defendants-Appellees.

____________________

Appeals from the United States District Court

for the Eastern District of Wisconsin.

Nos. 08-cv-16 and 08-cv-895 — William C. Griesbach, Chief Judge.

____________________

ARGUED FEBRUARY 28, 2014 — DECIDED SEPTEMBER 25, 2014

____________________

Before WOOD, Chief Judge, and KANNE and TINDER, Circuit 

Judges.

WOOD, Chief Judge. The invention of carbonless copy paper 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 quartercentury it became clear that the cost of this convenience was 
2 Nos. 13-2447 et al.

large-scale environmental contamination. That is because, 

until the early 1970s, the substance coating the paper included polychlorinated biphenyls (PCBs), a highly toxic pollutant. In the course of producing the carbonless paper, large 

quantities of PCBs were dumped into the Lower Fox River in 

Wisconsin, the site of the paper’s production. (References to 

the River in this opinion mean the Lower Fox, unless the 

context requires otherwise.) Recyclers poured yet more PCBs

into the River. 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), eventually 

ordered the responsible 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 Environmental Protection Agency (EPA) identifies the site of an environmental hazard that requires remediation under CERCLA, the statute’s financial responsibility 

rules are triggered. CERCLA imposes a “pay-first, split-thebill-later” regime. Any individual persons 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 entity’s equitable share of the costs.

NCR was the exclusive manufacturer and seller of the 

emulsion that gave treated paper its “carbonless-copy” character 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 action it seeks con-
Nos. 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 recycled the pulp 

to make new paper. Several ancillary questions and counterclaims 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 court, 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 

contribution from the paper mills. Worse than that, from 

NCR’s vantage point, the court held that the mills had meritorious counterclaims for cost recovery from NCR. NCR appeals that decision, and the defendant recyclers cross-appeal 

a handful of matters decided against them. Before addressing these matters, we begin with some background about the 

cleanup effort.

I. Background Facts

The Lower Fox River begins at Lake Winnebago in northeastern Wisconsin and winds northeasterly for 39 miles until 

it discharges into Green Bay, which flows into Lake Michigan. 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, 

ENVIRONMENTAL PROTECTION AGENCY (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 pollutant that attracted the attention of the EPA in the mid-1990s. PCBs are carcinogenic for 

humans and animals alike, and they have harmful noncarcinogenic effects on the immune, reproductive, neurological, and endocrine systems, as well as the skin. See Health 

Effects of PCBs, EPA (June 13, 2013), http://www.epa.
Nos. 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 PCBs had been released into the River. 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 permitted a writer or typist to make instant copies of documents

without the use of carbon paper. This effect is achieved by 

coating the back of a top sheet of paper with an emulsion 

containing “microcapsules” of dye and solvent; the microcapsules burst when a user writes on the sheet and thereby 

reproduce the same image on the lower sheet. A critical ingredient of the emulsion was Aroclor, a PCB-based chemical 

sold by Monsanto. NCR manufactured the emulsion, which 

it then sold to two companies (Appleton Coated Paper 

Company and Combined Paper Mills), which coated the paper and sold the finished product back to NCR for commercial distribution. Those two companies were formally independent from NCR until 1969 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 coat the 

paper was necessarily lost in the production process and 

was mixed with the wastewater that the mills released into 

the River. Explaining the second way requires us to give a 

bit more background about the paper industry. Producing 

paper from raw materials is relatively expensive. The pro-
6 Nos. 13-2447 et al.

duction process creates a fair amount of waste, scraps, and 

undersized rolls that are unusable by the original manufacturer; these are called “broke” in the trade. Making paper 

from recycled broke is cheaper than making it from scratch, 

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 coated paper with NCR’s emulsion 

also participated in the normal industry practice of selling 

broke to recycling mills. Upon receipt of the broke, the recycling mills would process it to separate the usable fibers 

from the coating, thus removing the PCBs from the portion 

of the paper that went into the new product. The waste (including 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 

riverbed. 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 August 1970, and NCR ceased using PCBs in its carbonless copy paper once its supplies of Aroclor ran down 

the following year. The EPA issued regulations largely banning the use of PCBs in 1979. See 40 C.F.R. § 761.1 et seq.

Congress passed CERCLA in 1980 to spur the environmental cleanup of sites contaminated by hazardous substances. See Pub. L. No. 96-510, 94 Stat. 2767 (1980) (codified 

as amended at 42 U.S.C. § 9601 et seq.). The EPA, in coordination with the Wisconsin Department of Natural Resources
Nos. 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 River into five “operable units,” 

which is jargon for geographic sections, and ordered a combination of dredging the riverbed and capping contaminated 

areas so 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 the EPA determines that environmental remediation is required, CERCLA shifts the cost of that cleanup to 

the parties responsible for creating the hazard and away 

from taxpayers, who otherwise would be left to pick up the 

bill. The statute identifies who is regarded as a Potentially 

Responsible Party (PRP) in a cleanup action: 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 substance; and parties that accepted the substance for transportation to a disposal site of their choosing. CERCLA § 107(a), 

42 U.S.C. § 9607(a). All PRPs are liable for costs incurred by 

the state and federal governments related to the remediation. At the liability stage, no consideration is given to a party’s relative fault in contributing to the hazardous conditions 

at the site; any party 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 to this case, but that question is not before 
8 Nos. 13-2447 et al.

us here. We are concerned with separate CERCLA provisions that allow a PRP that believes it has paid cleanup costs

in excess of its fair share to sue to recover contribution from 

other PRPs jointly liable for cleanup at the same site. See 

CERCLA § 113(f), 42 U.S.C. § 9613(f). In such an action, the

district court is directed to allocate contribution costs under 

section 113(f) “using such equitable factors as the court determines 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 that its financial burden has by now exceeded 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. It held that NCR and its indemnitor and former subsidiary Appvion were not entitled 

to any equitable contribution for the expenses they incurred 

as part of the Lower Fox River cleanup. It further ruled that 

the recycling mills should receive contribution from NCR for 

their costs, including those incurred in the form of “natural 

resources damages.”

Between the appeal and the cross-appeal, we have a considerable array of issues before us. They include the following: (1) whether NCR (and Appvion, which stands in the 

same position as NCR for this purpose, and so unless otherwise required we use “NCR” to refer to both) are entitled to 

recover any portion of the cost of clean-up under either section 107 or 113 of CERCLA, 42 U.S.C. §§ 9607, 9613; (2) 

whether NCR has any arranger liability; (3) whether the dis-
Nos. 13-2447 et al. 9

trict court erred by awarding costs to Glatfelter without offsetting its insurance recoveries; (4) whether NCR is liable for 

natural resource damages; (5) whether the court erroneously 

dismissed Glatfelter’s claims based upon discharges at Portage, Wisconsin; and (6) whether the district court wrongly 

dismissed Glatfelter’s common-law counterclaims as 

preempted. We address the issues in that order.

II. Cost Recovery or Contribution

We begin with NCR’s assertion that it should not be required to proceed by way of a contribution action under section 113(f) at all, but instead should be able to sue the defendant mills under the more plaintiff-friendly provision for 

cost recovery found at CERCLA § 107(a), 42 U.S.C. § 9607(a).

We 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 113 has 

proven vexing for courts. Section 107(a) is meant to support

a claim for parties to recover costs incurred during a selfinitiated environmental cleanup, while section 113(f) creates 

a right to contribution for parties already subject to liability 

in either a section 107 action 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). Proceeding by way of section 107(a) holds advantages for a plaintiff 

insofar as it can recover “any ... necessary costs of response 

incurred,” and defendants can assert only the statutory defenses enumerated in section 107(b), such as acts of God, acts 
10 Nos. 13-2447 et al.

of war, and third-party omissions. See 42 U.S.C. 

§ 9607(a)(4)(B). See also California v. Neville Chem. Co., 358 

F.3d 661, 672 (9th Cir. 2004). Equity plays no role in a section 107(a) action, in contrast to a section 113(f) action, where 

the entire allocation of costs is equitable, and even a defendant who concedes statutory liability may argue that it should 

bear none of the costs of response. The defendant in a section 107(a) action can always bring a section 113(f) counterclaim if the plaintiff is a PRP, but the burden of proof would 

then be on the counterclaiming defendant to demonstrate an 

entitlement to contribution. See Atl. Research Corp., 551 U.S. 

at 140 (explaining availability of 113(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 under section 107(a) 

or 113(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 subjected to an action under section 106 or 107, 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 proceed under section 113(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 subjected to an enforcement or liability action, and that is not party to a settlement, may proceed 

under section 107(a). See Cooper Indus., Inc. v. Aviall Servs., 

Inc., 543 U.S. 157, 166–68 (2004). Section 113(f) is closed to a 

litigant without a preexisting or pending liability determination against it even if it wants to proceed by that route, because that statute creates a right to contribution, and contri-
Nos. 13-2447 et al. 11

bution exists only among joint tortfeasors liable for the same 

harm. See RESTATEMENT (SECOND) OF TORTS § 886A. See also

Cooper Indus., 543 U.S. at 166–68 (unavailability of section 113(f)); Atl. Research Corp., 551 U.S. at 135–36 (availability of section 107(a)). Thus, although a strict reading of the 

phrase “necessary costs of response” in section 107(a) might 

suggest that parties who pay pursuant to an enforcement 

action might be able to sue under section 107(a), this court—

like our sister circuits—restricts plaintiffs to section 113 contribution 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 3397147 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 107(a) 

is controlled by our decision in Bernstein. In that case we 

held that a settlement with the EPA “resolves” a party’s liability when the agreement, by its own terms, releases a party

from CERCLA liability in an enforcement action. Bernstein, 

733 F.3d at 204–15. We contrasted two Administrative Orders of Consent 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 

completed work. The PRP was therefore limited to a contribution action under section 113(f) to recover its costs. The 

later order stipulated that “nothing in this Order constitutes 

a satisfaction or release from any claim or cause of action 

against the Respondents,” and that “[t]hese covenants [not 
12 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. The agreement memorialized in that

order disclaimed any admission of liability 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 obligations. The PRP’s liability therefore could not be considered 

“resolved” by the order for CERCLA purposes. This meant 

that the order could form the basis of a section 107(a) suit 

because the PRP was still in the process 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 remedial work in 2007. The company concedes that its costs 

under the 2001 consent decree must be recovered under section 113(f), if at all. It continues, however, to assert its ability 

to sue the recycling mills under section 107(a) for costs incurred pursuant to the 2004 and 2007 orders.

Its argument with respect to the 2007 order is easily dispatched. The government filed a lawsuit to enforce that order in 2010. Under CERCLA’s express terms, a party may 

seek contribution from any other PRP “during or following 

any civil action under section 9606 [CERCLA § 106] of this 

title or under section 9607(a) [CERCLA § 107(a)] of this title.”

CERCLA § 113(f)(1); 42 U.S.C. § 9613(f)(1) (emphasis added).

Thus, a section 113(f) action is available to NCR for the costs 

incurred under the 2007 order. This means that section

107(a) is not available. See Bernstein, 733 F.3d at 206. We are 

unpersuaded by NCR’s contention that the costs it incurred 

under the order before the action was filed in October 2010 
Nos. 13-2447 et al. 13

were “voluntary,” and thus not part of the costs recoverable 

under section 113(f). Such slicing and dicing of costs incurred under the same administrative order makes little 

sense when a party’s liability for all of those costs will ultimately 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 113(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 107(a) available. In Bernstein, the

covenants not to sue were “conditioned upon the complete 

and satisfactory performance” of the PRP’s obligations. 733 

F.3d at 203. In contrast, under the 2004 order here both the 

EPA and WDNR “covenant[ed] not to sue or to take administrative action against Respondents [under CERCLA or 

state law] for performance of the work.” It explicitly provided that “[t]hese covenants not to sue shall take effect upon the 

Effective Date” (emphasis added); in Bernstein, the covenants 

did not take effect until completion of the work. 

To be sure, the NCR order also has language conditioning the covenants on “satisfactory performance” of NCR’s 

obligations. But this means only that the federal or state 

government could sue NCR if it breaches the agreement—a 

standard arrangement 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 

proceeding under section 113(f). To hold otherwise would 

mean that no consent order could resolve a party’s liability 
14 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 itself in a materially different position 

from NCR when it comes to the choice between cost recovery and contribution. In fact, it appears to be in an unusual, 

possibly unique, position among parties incurring costs under CERCLA: it was initially identified as a PRP by the government and paid response 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 while 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 

subsidiary 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 outside 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.
Nos. 13-2447 et al. 15

The 2007 Unilateral Administrative Order identified Appvion as a PRP, and the government named it as a defendant 

in its 2010 enforcement action under section 106. In late 2011, 

however, the district court decided that Appvion had not

assumed Appleton Coated Paper Company’s CERCLA liability when it was sold by NCR, and that the liability remained with NCR as a matter of contract.

This ruling created a conceptual problem, because Appvion already had incurred 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 107(a), 113(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 companies. (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 action.) The court held that whatever costs Appvion had incurred could not be traced to CERCLA; they were incurred 

instead pursuant to the indemnity agreement. The agreement provided, the court concluded, that Appvion’s “rights, 

limitations, and defenses” were the same as NCR’s. Appvion 

was subrogated to NCR’s contribution claim through

CERCLA § 112(c), 42 U.S.C. § 9612(c)(2) (providing for subrogation), and could recover its costs exclusively through 

NCR and this subrogation arrangement.

In the run-of-the-mill case, a rule that a CERCLA indemnitor (here, Appvion) is limited to proceeding through its

indemnitee would be sound. The leading case in this area is 
16 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 indemnitor insurance company had not incurred costs “under 

CERCLA” because the money it disbursed did not correspond to “costs of response,” but rather to independent contractual obligations based on the indemnified party’s costs of 

response. Id. at 952–53. If the rule were different, the court 

feared, insurers could exploit it to make an end-run around 

section 113(f): they could make payments directly to jointly 

liable parties instead of filtering the money through their indemnitees. They could then turn around and bring a section 107(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 107(a) 

by standing in the shoes of its indemnitee in a section 113(f) 

action. Permitting it to operate outside section 113(f) would 

unjustly improve its litigating position.

This case, however, does not fit the normal pattern. Appvion was not acting as an indemnitor when it paid the response costs it now seeks to recover; 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 

indemnity agreement is a one-way street: it does not expand 

NCR’s costs of response and thus allow it to sue for contribution toward Appvion’s costs for paying at least part of 

NCR’s contribution share.

It is conceivable that in some circumstances, an indemnitor-former PRP that incurs direct response costs and is later 

found not liable under CERCLA may wish to recover costs 
Nos. 13-2447 et al. 17

even from the party it is indemnifying. Imagine, for example, a hypothetical situation in which Appvion paid $20 million in response costs before it was found not to be a PRP, 

and later NCR was assigned to pay $5 million in contribution to its fellow PRPs in a section 113(f) action. Appvion 

would be on the hook to NCR for $5 million under the indemnity 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 agreement. 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 party that was erroneously 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 statutory mechanism is 

the proper one for reimbursing the erroneously imposed 

costs paid by the non-PRP. But it seems apparent that something should be available. This is true regardless of any independent indemnity agreement with another PRP, insofar 

as costs that fall outside the agreement are concerned. A section 113(f) action is a poor fit for this situation, because contribution exists only among joint tortfeasors. RESTATEMENT 

(SECOND) OF TORTS § 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 reasonably 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 wholly voluntary. It makes 

sense, we think, to apply that lack of compulsion retroactively. Under Atlantic Research Corp., Appvion is therefore entitled to bring a section 107(a) action against the PRPs sharing 

liability for the 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 indemnifying NCR when it incurred these response costs. Section 

107(a) is not available for the recovery of any costs that arise 

through Appvion’s indemnity agreement; we agree with the 

Ninth Circuit’s holding in Chubb that the company qua indemnitor is limited to its indemnitee’s CERCLA remedies.

Maintaining the bright-line distinction between costs incurred 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 reverse its decision and remand for further proceedings.

III. Rights to Contribution 

We now turn to two related questions on the merits: 

whether the district court abused its discretion when it held 
Nos. 13-2447 et al. 19

on summary judgment that NCR was not entitled to contribution for any of its response costs at the Lower Fox River 

site; and whether the court correctly ruled that the recycling 

mills were entitled 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 response 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, 507 (7th 

Cir. 1992); FED. R. CIV. P. 56(a). The equitable allocation of 

response costs in a CERCLA action, however, is for the district court to decide in its discretion, and we do not start 

from scratch in determining whether we would allocate every penny in the same way. See Browning-Ferris Indus. of Ill., 

Inc. v. Ter Maat, 195 F.3d 953, 957, 959 (7th Cir. 1999) (holding that district court “did not abuse [its] discretion”). Instead, this court has implicitly accepted, and some of our sister circuits have more explicitly stated, that we review the 

district court’s allocation for abuse of discretion, even when 

the issue comes to us on appeal from summary judgment.

See ENSCO, 969 F.2d at 506, 509 (indicating district court decided 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. 1991) (applying abuse of discretion 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, 894 
20 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 section 9607(a) [CERCLA § 107(a)] of this title, during or 

following any civil action under section 9606

[CERCLA § 106] of this title or under section 9607(a) 

of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil 

Procedure, and shall be governed by Federal law. In 

resolving contribution claims, the court may allocate 

response costs among liable parties using such equitable 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 

absence of a civil action under section 9606 of this title 

or section 9607 of this title.

42 U.S.C. § 9613(f) (CERCLA § 113(f)). In a contribution action the court is not concerned with deciding whether a party is liable under CERCLA. That is a question for the enforcement 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. 
Nos. 13-2447 et al. 21

CERCLA not only entrusts the district court to make the ultimate equitable allocation of costs, but it also grants the 

court the authority to decide which equitable factors will inform 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-intensive inquiry is “particularly 

suited” to case-by-case analysis, and we have resisted attempts to impose upon district courts a requirement to either 

include or to ignore any particular factors in its ultimate decision, 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 date 

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.” Defendants
22 Nos. 13-2447 et al.

argued that actual or constructive knowledge of the risk and 

any failure to take immediate action to prevent the risk 

would be the key factors in determining the equitable allocation of costs.

The court adopted the defendants’ proposal for targeted 

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 responsibility than parties further down the stream (so to 

speak)” and that “under some circumstances, joint tortfeasors having substantially greater culpability can be denied 

contribution altogether.” A ruling reached on this basis, the 

court hoped, would obviate the need for much of the discovery that NCR and Appvion were seeking.

The parties undertook discovery in accordance with this 

plan, and both sides filed motions for summary judgment. 

Their efforts yielded a hefty record, with some 900 exhibits, 

covering expert and government reports; deposition testimony; laboratory notes; corporate records; and correspondence. Based on these materials, the court distilled the undisputed 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 an 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. WDNR 
Nos. 13-2447 et al. 23

estimated 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 operations of the defendants during 

the 1954 to 1971 period. The remainder, it said, was dumped 

by recycling mills continuing to recycle carbonless copy paper after the production period ended in 1971. These estimates, however, were outside the 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 know 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 exclusive licensee for carbonless copy paper production in Europe. The Wiggins Teape documents showed that the company 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 dissolves the fats in the skin and 

leaves it cracked and vulnerable to infection.) An independent 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 environmental effects of Aroclor in the late 1960s: on March 12, 

1969, it circulated an internal memo with advice about how 

to deal with customers’ concerns 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 increasing worries about PCBs in crafting its own response. 

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 specifically naming NCR as a source of the pollution. Samples taken 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 

becoming acutely aware of the problem and that British regulators were zeroing in on Aroclor as an environmentally 

toxic substance. Nevertheless, documents from that year reveal that NCR pushed Wiggins Teape not to disclose that 

NCR was the source of the Aroclor-coated paper. This request 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 about potential toxicity since 

1955. The memo also said that the 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.
Nos. 13-2447 et al. 25

Monsanto stopped selling Aroclor 1242 in 1970, explaining to its customers that PCBs’ “use in synthetic resin compositions may be a source of ... alleged environmental contamination.” NCR decided to draw down its remaining stock 

of Aroclor; it ceased using Aroclor to make carbonless copy 

paper in April 1971. The following year, NCR circulated an 

internal memorandum stating, “In the late 1960’s accumulative 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 environmental harm by the late 1960s. This is not to say that 

NCR knew definitively that PCBs were harmful, but it was 

aware that there 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 letter 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 industrywide report stating that the presence of PCBs in paper prod-
26 Nos. 13-2447 et al.

ucts and mill effluents had been 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 1950 because it might contain PCBs; and 3) testimony by a Fort Howard employee that Monsanto’s decision to 

stop selling Aroclor 1242 in 1970 was “well known.” The 

court discounted the industry report because it was prepared in 1976 and did not show that the mills were specifically alerted to PCBs in NCR’s products; it found the 

Menasha agent’s testimony unhelpful because he later repudiated it and the plaintiffs themselves rejected it in a different document before the court; and it found the Fort Howard employee’s testimony to be beside the point, because the 

deponent dated the knowledge to 1974, not 1970. 

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 environment. The importance of this 

early knowledge, it thought, drowned out all other equitable 

factors. It added 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 period from 1954 until the mid-1960s, when all parties were 

ignorant of the risks posed by PCBs, because “between parties who produced the product and those who merely processed it and recycled it along with all other paper products 

or water sources, these latter parties are significantly less 

blameworthy.” The court recognized that this was not a 

claim for indemnification by the defendants, but it felt that 
Nos. 13-2447 et al. 27

such actions provided a useful analogy. The principles behind indemnification—particularly when one party provides 

another with a defective product—argued for denying contribution 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 parties had knowledge of the harmfulness of PCBs. There was 

little that would have alerted the recyclers 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 express exemption for the use of 

“recycled PCBs,” 49 Fed. Reg. 28,172, 28,175 (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. Reg. 24,206 (June 

27, 1988). For the interim periods when the defendants continued to recycle PCB-contaminated paper before these express 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 (although 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 overall PCBs in the River. At any rate, said the court, there was 

no evidence that these additional releases contributed significantly to the cleanup costs, and they did not put a dent in 
28 Nos. 13-2447 et al.

NCR’s overall greater equitable responsibility for the cleanup. 

The court also pointed to policy reasons in support of its 

conclusions. It worried that encouraging “manufacturers of 

a toxin” to continue using it until an economically feasible 

replacement can be found, and then allowing the manufacturer to recover contribution from “innocent processors” of 

the toxin, created a moral hazard. Finally, it thought that an 

approach that encourages producers of toxic materials to act 

“swiftly and proactively” as soon as the data begin to suggest the potential for environmental damage was more compatible with CERCLA.

B

NCR attacks the district court’s grant of summary judgment on two fronts. Its main thrust, to which we will return 

in a moment, is that it was an abuse of discretion to determine at this stage that the equities so clearly favored the defendants as to make NCR responsible for 100% of the costs of 

response—both its own costs and the costs initially borne by 

the defendant recycling mills. It also makes the procedural 

argument that the district court impermissibly resolved disputed questions of fact on the way to reaching summary 

judgment. We reject the 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 disputed questions about when the company knew about the dangerousness of PCBs is based on a misunderstanding or a 
Nos. 13-2447 et al. 29

mischaracterization of the conclusions that the district court 

drew. If the district court had determined, without qualification, that NCR knew how dangerous PCBs were in the mid1960s, NCR might have a point. NCR presented evidence 

showing that it did not believe that Aroclor 1242 was toxic 

because the initial evidence of toxicity related to Aroclor

products with higher amounts of chlorine. (Aroclors were 

numbered based on their chlorine content; the “42” in Aroclor 1242 indicates that the product was 42% chlorine.) An 

expert retained by NCR produced a report stating that earlier studies focused on higher-chlorinated Aroclors, and that 

the toxicity of PCBs was “poorly known” even through the 

early 1970s.

NCR also presented some evidence showing that the

company internally felt that PCBs were not an environmental risk. For example, notes taken from a meeting between 

NCR and Monsanto employees showed that the parties discussed 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 taking 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% “appear 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 knowledge. Instead, it concluded that NCR 

was beginning to see the warning signs about PCBs in the 

mid-1960s. This is indisputably true; Wiggins Teape docu-
30 Nos. 13-2447 et al.

ments showed awareness of PCBs’ toxicity in 1964, and NCR 

had the Jensen Report by early 1967 at the latest. The court’s

point was that by the mid-1960s NCR was aware that Aroclor posed a risk of being harmful to the environment. Evidence had begun to accumulate that PCBs might cause severe damage. The recycling mills, in contrast, had not seen 

that evidence, and even if they had seen it, they had no apparent way of knowing that NCR’s broke contained PCBs. 

Whether NCR was given different information about higherchlorinated Aroclors, or whether some of its fears about 

PCBs were allayed during a meeting with Monsanto employees, does not change the fact that it was on alert by then.

Given the district court’s caution 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 proceeded (perhaps after more discovery) to resolve in full what 

each party knew and when. This is just another way of putting 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

The ultimate question on this part of the appeal is whether the district court abused its discretion by allocating 100% 

of the Lower Fox River response costs to NCR at this juncture. In the past, we have stressed that the district court’s 

discretion is broad, both when it determines how much 

weight to place on any given equitable factor before the 
Nos. 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 

contribution have come to us looking for greater certainty. 

Some have argued that fidelity to volumetric shares is required, see Browning-Ferris, 195 F.3d at 958–59, and others 

have urged that fault must play the leading role, ENSCO, 

969 F.2d at 507 n.4. We have rejected these pleas for a onesize-fits-all bright-line rule. Courts may permissibly make 

the equitable allocation based on “several factors, a few factors, or only one determining factor ... depending on the totality of circumstances presented to the court,” as long as the 

factors chosen are rational. ENSCO, 969 F.2d at 509. See 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 decision must reflect its consideration of the particulars of the 

case, lest the outcome become too divorced from the purposes 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. 1994). While acknowledging 

that the indemnification agreement was “not necessarily determinative” of the contribution question, we held that it 

should have been considered when allocating costs and that 

one party’s responsibility for producing most of the waste 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 

pretrial settlement credits obtained by one of the parties in 

its contribution decision, 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 have 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 the earlier ones, 

or nearly any other CERCLA contribution action. Usually, a 

litigant dissatisfied with its contribution share will assert

that the district court assigned impermissible weight to certain factors based on evidence in the record, or discounted 

facts that it should not have. In those situations, it is relatively easy to evaluate whether the district court neglected to 

consider an important factor or placed unacceptable weight 

on some factors while failing to accord due respect to others. 

Here, however, we are asked to decide whether the district 

court is authorized to preselect the equitable factor that it believes most likely to determine the outcome, and then conduct limited discovery into that factor to see if it can reach an 

equitable determination.

We do not dismiss phased discovery out-of-hand as an 

unacceptable way to manage CERCLA contribution actions. 

Questions of cause and culpability surrounding an environmental cleanup can be tremendously complex, and discovery into every matter that anyone deems relevant—no mat-
Nos. 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 ultimate decision must reflect 

CERCLA’s equitable principles. We 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 Kerr-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 when 

the district court “prioritize[d] a priori the parties’ relative 

contributions of waste over their contractual intent to allocate environmental liability among themselves.” 412 F.3d 

429, 447 (3d Cir. 2005). These cases demonstrate that the district court must decide what is relevant based on the record 

as a whole; an allocation based on otherwise permissible factors will not be rescued if it does not explain why the court

has chosen to disregard other apparently relevant information. Kerr-McGee, 14 F.3d at 326; cf. R.W. Meyer, 932 F.2d

at 573 (“Congress intended the court to deal with these situations by creative means, considering all the equities and balancing them in the interests of justice.”) (emphasis added).

NCR argues that the district court here made the same 

error that we criticized in Kerr-McGee: that it preselected 
34 Nos. 13-2447 et al.

knowledge as the determinative factor and permitted discovery into only that aspect of the case, thus depriving NCR 

and Appvion of the opportunity to develop evidence of other potentially relevant factors. NCR is not suggesting (or at 

least it should not be suggesting) that it necessarily is entitled to a different result based on the additional evidence it 

would have presented. Instead, it contends that the allocation decision 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 equitable factors that the court put to one side would have been 

relevant to the question of cost allocation, it urges: the parties’ 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 that these points are potentially relevant 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 rejected these 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 develop 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 undisputed facts showed that the relative volumes of discharge, alternate sources, and voluntary cooperation paled 

in comparison to knowledge. When explaining why it chose 
Nos. 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 known, 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 rejecting consideration of other factors leave us unable to say whether the 

record adequately supported the court’s decision to select 

knowledge as the decisive factor. All the court said was that 

apportionment on factors apart from knowledge “would require additional phases of the trial” in which the parties 

could prove other disputed facts like volume. It then reiterated its conclusion about knowledge, both that NCR was 

“not completely ignorant” of the dangers of PCBs during at 

least some of the period when they were producing carbonless copy paper, and that it was in the “best position” to 

learn of the dangers before it was fully aware. It added that 

in the period before any party could have been aware of the 

dangers, the equities 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 responsibility because the “defect” in its product—the PCBs—

was the key to its profitability and not “incidental,” 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 in 
36 Nos. 13-2447 et al.

the cleanup or relative volumes dumped, are so wholly irrelevant 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 court’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 

PCBs discharged by the parties, even though it qualified 

those references with the acknowledgment that the figures 

had not been subject to discovery. Other factors that NCR 

proposes, such as cooperation, might have influenced the 

court’s conclusions about NCR’s slow responses to data. We 

hasten to say, however, that further information may just as 

easily point in the other direction and have the effect of reinforcing the district court’s present conclusions. It is impossible to know at this juncture what the likely effect will be.

We understand that a party’s knowledge that it is either 

doing something wrong or running an undue risk that it is 

doing something wrong can be a compelling basis for deciding 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 factors 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 costs to NCR do not appear to be consistent 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 defendant 
Nos. 13-2447 et al. 37

mills merely recycled it, the fact 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 producing something that it did not realize was environmentally 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 discovery, and we appreciate the effort that the district court 

has made to manage this case. Nonetheless, in the equitable 

realm where CERCLA contribution actions exist, we must 

remain vigilant to ensure that the financial responsibility for 

this huge project is properly allocated. On the summary 

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 vacate the judgment of the district court denying any contribution to NCR and imposing the response costs of the recycling 

mills on NCR, and remand so that the district court can decide 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 cross-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 units 2 through 5 to NCR, 

subjected NCR to less liability than it deserved. Glatfelter asserts that NCR should have been held liable under CERCLA

as an entity that “arranged for disposal” of a toxic substance 

(PCBs) based on its corporate predecessor’s sale of broke to 
38 Nos. 13-2447 et al.

recycling mills. See CERCLA § 107(a)(3), 42 U.S.C. 

§ 9607(a)(3). While this matter would be largely academic if 

only operable units 2 through 5 were at stake, a finding adverse 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 carbonless copy paper with NCR’s emulsion during the production period. Recall from the discussion of Appvion’s 

CERCLA § 107 claim that Appleton Coated was eventually 

subsumed within NCR, and that its CERCLA liability contractually remained with NCR when its assets were sold to 

the corporation now known as Appvion. See supra at 14. Recall further that one way the carbonless coating mills made 

money during the production period was to sell their broke 

to the recycling mills for reprocessing. See discussion beginning 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 where those PCBs

ended up.

The district court held a trial on this point and made several 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 valuable and recorded as an asset on the company’s balance 

sheet. Selling broke, the court concluded, allowed Appleton 

Coated to “mitigate losses” from its production of carbonless 
Nos. 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 recycling mills, which is why they were willing to pay for it; 

the alternative would have been for Appleton Coated to pay 

for disposal or recycling. Appleton Coated invested a considerable amount of money in recovering the broke, grading 

it, sorting it, storing it, and baling it. The broke was then sold 

to the recycling mills in 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 Appleton 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 individual employee at Appleton Paper fully knew what the

mills were doing with the non-fibrous components of broke.

This is not to say Appleton Coated was ignorant of the general recycling process; it realized that some byproduct 

would end up in the River. Nevertheless, the evidence did 

not show that Appleton Coated was aware of how much byproduct would be flushed into the River and the extent to 

which it would be treated before it was discharged. The 

court characterized Appleton Coated as “indifferent” to 

what happened to its broke after it was sold.

What qualifies as “arranging for disposal” under 

CERCLA § 107 is clear at the margins but murky in the middle. 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 Northern & 

Santa Fe Ry. Co. v. United States, 556 U.S. 599, 610 (2009). 

Those entities are clearly covered by the statute. At the other 
40 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 inquiry” that goes beyond the formalities of whether the 

transaction is termed a “disposal” or “sale” and looks to 

whether Congress meant to cover 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 “planned for” disposal of the chemical. The 

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 that triggers arranger liability. There, General Electric 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 General Electric that the quality of the material 

was declining and that they should come retrieve some of 

the drums, the drums remained unused on the site for years

and began to leak. Id. at 381. The court reasoned that material stored in 55-gallon drums that the company tried to un-
Nos. 13-2447 et al. 41

load in any way it could (including transfers to local landfills, sales to local governments for use as a dust suppressant, 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 affirmed 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 unusable 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 competitive market 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 explained that Appleton Coated invested significant resources 

in recapturing broke, and that it would have disposed of the 

broke quite differently if there were not such a healthy market for it. The court also observed that the mill was not selling 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 issue in General Electric.

Glatfelter argues that arranger liability should follow because 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 mills took 

“intentional steps” to discard the broke given their 

knowledge that it would end up in the River. Glatfelter urg-
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 destination of the 

PCBs, and that there was no particular knowledge 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 intentionally 

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 definition, as Monsanto intentionally sold Aroclor to NCR and must have 

known that some portion of it would end up being discarded. NCR’s sale of carbonless copy paper on the consumer 

market might also qualify as “arranging for disposal” under 

this theory, because eventually all consumer 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 narrower rule, under which the putative arranger must be 

someone other than the manufacturer of the product. But 

again, Burlington Northern establishes that not all parties fitting 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 under another 

provision of CERCLA.

Even selling with perfect knowledge that the buyer will 

dispose of the materials at some point in the future cannot
Nos. 13-2447 et al. 43

on its own qualify as arranging for disposal. In order to decide if someone is an arranger, it is also important to look at 

the party’s intent. It is more likely to be an arranger if it was 

simply trying to dispose of the materials, or if it was compelled to get rid of them. Although getting the broke out of 

its factory was surely useful at some level to Appleton Coated, getting rid of inventory is useful to every seller of a 

product. The simple fact, based on the district court’s findings, 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 ultimate destination. It 

prepared and sold broke because broke was a valuable input 

for the recycling mills. 

Once the recycling mills obtained Appleton Coated’s 

broke, what happened to the PCBs embedded in the broke 

was completely 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 byproduct, 

Appleton Coated neither contracted 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 mean 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 determination 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 because 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 continuum. Other sales can still qualify, particularly when they 

are for more than token amounts and take place on a competitive 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 operations, and they must take the bitter with the sweet of operating in that market. We therefore affirm the district court’s 

holding regarding NCR’s arranger liability. 

V. Insurance Offsets

We turn next to the question whether the district court 

should have offset against NCR’s contribution certain liability insurance proceeds that Glatfelter obtained. NCR objects 

to the district court’s ruling that its contribution liability 

should not be reduced by those amounts. Evaluation of its

claim requires us to decide two related matters: whether the 

collateral source rule applies in CERCLA contribution actions, and if not, whether any amount of Glatfelter’s insurance settlement should have been offset against NCR’s required contribution.
Nos. 13-2447 et al. 45

We agree with the district court that the collateral source

rule does not apply in CERCLA § 113(f) contribution actions, 

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 insurance compensation paid to an (innocent) injured third party. 

Id. at 1206–07; see also RESTATEMENT (SECOND) OF TORTS

§ 920A(2) & cmt. d. Contribution actions under CERCLA 

§ 107 are a mechanism for allocating costs among joint tortfeasors and are governed wholly by equity. Equity would 

not be served by requiring a district court to remain blind to 

alternate sources of recovery for one tortfeasor and the possibility 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 considered 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 district 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 its costs in common with other PRPs and the amount 

that covers individual costs (such as defense costs), that party cannot later assert that the settlement is dedicated wholly 

to its individual costs and thereby avoid having it credited 

against a counterparty’s contribution share. 566 F.3d at 1210
46 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 that would require all proceeds from an undifferentiated insurance settlement to cover common liability 

costs. Even NCR’s expert agreed that at least some of Glatfelter’s settlement was for defense costs, which are not subject 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 speculative, the 

court looked back to Glatfelter’s original insurance contract 

with its carrier. This contract included coverage for both direct liability and defense costs, although only the liability 

portion was capped at a certain amount of money. For the 

purpose of evaluating the claim before it, the court then 

made the assumption—favorable to NCR—that as much of 

the settlement as could be attributed to common liability

should be, in order to avoid any gamesmanship by Glatfelter. Thus, to calculate how much Glatfelter stood to recover, it started by taking the full amount of Glatfelter’s insurance settlement and subtracting that portion in excess of the 

contract’s liability maximum. Adding that figure to the contribution 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 recover more than 100% of its 

share. Accordingly, it held that Glatfelter’s insurance proceeds should not be offset against its contribution claim.

We find the district court’s reasoning sound. Contribution actions are governed by equity, and the disposition of

insurance settlements to a PRP is one aspect of that equitable 
Nos. 13-2447 et al. 47

determination. Friedland affirms that any level of double recovery 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 treat insurance settlements. Under different circumstances, the treatment of Glatfelter’s insurance proceeds 

might have been inequitable: if, for instance, Glatfelter had 

negotiated an enormous insurance settlement, but had strategically 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 determination 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 treating Glatfelter’s liability for operable units 

1 through 5 as an undivided cost, or if it was required to segregate the unit 1 costs and give NCR credit for the costs attributable to units 2 through 5. We are satisfied that because 

the amount of Glatfelter’s insurance settlement does not create a risk that it would be made more than whole if it receives its demanded contribution share, there was no harm 

in the district court’s decision to consider all of Glatfelter’s 

Fox River liability as a whole. We therefore affirm the district court’s decision not to credit Glatfelter’s insurance settlement against NCR’s contribution share.

VI. Natural Resource Damages

NCR appeals from the district court’s holding that the 

defendant recycling mills can recover all of their payments 
48 Nos. 13-2447 et al.

for natural resource damages in contribution from 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 reconsider this matter on remand. But NCR also urges that the 

district court committed legal error by holding that NCR 

could be responsible for the natural resource damages at all. 

We review that determination de novo.

Among the damages that parties can be required to pay 

under CERCLA § 107(a) as part of an environmental remediation 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 parties lack standing to bring natural resource damages claims 

under 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 Interior, 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 enforcement 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 initiate a section 107(a) action for natural resource damages is separate from the question whether a party subject to a section 107(a) action can then bring a section 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 damages, and NCR does not challenge that decision 
Nos. 13-2447 et al. 49

on appeal. We would agree with it at any rate; section 113(f) 

makes contribution available based on a party’s being liable 

under section 107(a); it does not make contribution contingent on the type of section 107 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 action 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 authorization. Though section 107(a)(4) makes some explicit references to “response 

costs,” those references are non-exclusive, and all of the 

types of damages listed at section 107(a)(4) reasonably can 

be understood as “response costs” for the purposes of section 113(f).

Even so, NCR argues that the availability of section 113(f) 

contribution for natural resource damages 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, the 

phrase “resulting from” establishes a causation requirement

that must be proven before a party can be required to pay 

any natural resource damages. It claims the district court ignored this requirement and therefore improperly relieved 

the defendants of their burden of proof.

NCR’s argument falters insofar as it blends the standard 

for establishing liability for natural resource damages under 

section 107(a) with the standard for obtaining contribution 

under section 113(f). Indeed, discussion of section 113(f) is 
50 Nos. 13-2447 et al.

noticeably absent from NCR’s brief. In its version of the statute, it is only when two parties have been held liable for 

causing the same natural resource damages through their 

independent actions that contribution between the two 

could come into play.

But this is not what CERCLA says. A party may seek 

contribution “from any other person who is liable or potentially liable under section 9607(a) ... .” CERCLA § 113(f), 42 

U.S.C. § 9613(f). Section 107(a)(4)(A)-(D) explains the types 

of damages for which a PRP may be liable, and section 113(f) 

does not discriminate among the types of damages eligible 

for contribution. The district court correctly limited the “direct 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 damages under section 107(a), and second, determine whether it is equitably 

entitled to contribution for those costs from another party 

liable under section 107(a).

NCR’s argument might have merit if the question were 

whether NCR should be held directly liable to the government for natural resource damages under section 107(a). Indeed, the two cases to which NCR refers demonstrate that 

the causation requirement is all about whether a party is liable for natural resource damages 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 damages. As liable parties under 

section 107, they could then seek contribution from NCR, a 
Nos. 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 damages from NCR.

NCR also argues that the district court erred by failing to 

give it the chance to present the “defense” that the defendants cannot “recover” for natural resource damages that occurred 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,” when 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 damages 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 these legal questions regarding NCR’s liability for natural resource 

damages in contribution, and so we affirm its holdings on 

those points.

VII. Discharges at Portage, Wisconsin

We now turn to Glatfelter’s argument that the district 

court improperly granted summary judgment in favor of 

NCR on the question whether discharges at a facility in Portage, Wisconsin, should subject NCR to liability for response 

costs at operable unit 1. Portage is 90 miles upstream of the 

Fox River site. Glatfelter’s theory is that the discharges there

flow to unit 1 and thus should make NCR liable in contribution.
52 Nos. 13-2447 et al.

This claim was the subject of some procedural confusion 

in the district court. Glatfelter pleaded its contribution counterclaim regarding the Portage facility against NCR, and in a 

February 28, 2011, order granting summary judgment in part 

and denying it in part, the district court held that NCR had 

no CERCLA liability for operable unit 1. It did not mention 

the Portage-discharge theory explicitly. Later, in response to 

a motion for summary judgment by 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 discharges at Portage could lead to liability; the district court 

rejected 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 Portagebased 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 judgment in an attempt to keep Appvion in the case. (Appvion 

took over the Portage plant from NCR in 1978.) The district 

court naturally responded to the claim Glatfelter was making in its reply to Appvion’s summary judgment motion, 

and not to a claim against NCR that Glatfelter was not pressing. The judge did not err by understanding Glatfelter’s argument to be that the Portage claim was about Appvion’s 

liability. 

At any rate, the court held in 2011 that NCR was not 

liable for operable unit 1, and in 2012 that Appvion was not 

either. Although Glatfelter asserted to the court that the
Nos. 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 Appvion 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 addressed this claim on the merits.

Even if neither party explicitly moves for summary 

judgment on the issue, the district court may enter summary 

judgment on its own motion. See FED. R. CIV. P. 56(f). 

Glatfelter addressed NCR’s and Appvion’s liability at 

operable unit 1 both before the February 2011 summary 

judgment order 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 Glatfelter 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 counterclaims of

negligence, strict liability, and creation of a public nuisance 

against NCR in response to its contribution action. The district 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 exists, among other circumstances, 

“where state law stands as an obstacle to the accomplishment 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)) 

(internal 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 allowed PMC to collect contribution under Illinois’s contribution 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 contribution mechanisms. Allowing state 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 obligations or liabilities of any person under other Federal or State law, including 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 another. PMC, Inc., 151 F.3d at 617.

Like PMC, Glatfelter and WTM are not “victim[s] of toxic-waste contamination in any realistic sense.” Id. Their 

common-law theories all present the same theory of causation at bottom: NCR’s common-law torts caused the counterclaiming defendants to incur CERCLA liability, and there-
Nos. 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 would be available to pay for the 

environmental cleanup. The situation the defendants describe 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.3d at 618. We will 

not use state law effectively to undo CERCLA’s remedial design—a design meant to protect the environment, not parties 

that dumped hazardous waste for years. The two regimes

cannot coexist while remaining faithful to Congress’s explicit 

purposes, and thus the common-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 action 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 neither NCR nor Appvion raised any claims against the United 

States in this case, it suggests that a ruling affirming the district court’s treatment of Appvion could be used to estop the 

government collaterally in the enforcement action, or to establish the law of the circuit.

It is hard to see why the government would be collaterally estopped from appealing Appvion’s liability in the enforcement 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 claims 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. Standing to appeal does not extend to 

every party that might feel 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 REVERSE the district court’s judgment with regard to 

Appvion’s ability to bring suit under CERCLA § 107(a). We 

VACATE the decision to hold NCR responsible for all of the 

response costs at operable units 2 through 5 in contribution. 

We AFFIRM the following decisions: that NCR may proceed 

only under CERCLA § 113(f); that NCR is not liable as an 

arranger; that Glatfelter’s insurance settlement may not be 

offset against NCR’s contribution share; that NCR can be required to contribute for natural resource damages; that Glatfelter’s counterclaim based on the discharges at Portage
Nos. 13-2447 et al. 57

should be dismissed; and that the defendants’ state-law 

counterclaims are preempted. This case is REMANDED for 

proceedings consistent with this opinion.