The H onorab le D avid R
. H erndon, Chief J ud ge ofthe Un it ed  Sta tes D istrict Co u r t f o r the So u the rn D istrict of Ill ino is, s i t t i ng by des i gna t i on. 

## In the 

# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 10

- 2480 U NI T ED S TATE SOF A MERI CA, etal., P la intif fs-A pp ellees, v. G EORGE A. W HI T I NG P AP ER C O ., etal.,D efend a nts-A pp ellees. A PP E A L OF : A PPL ET ON P AP ERS I NC . an d NCR C ORPO RA T I ON, Interv eno rs.

A pp eal from the United S t ates Di strictC our t fo r the E astern Di stricto f Wisc onsin
. No . 09- C- 692

—WilliamC. G riesbach, Judge .
A RGUED J AN UA RY 12, 2011

— D ECI DE D M AY 4, 2011

B ef or e K ANNE an d T INDER, C ircu it Judges , a nd H E R ND ON, D i s t r i ctJudg e . 2 N o. 10

- 2480 K ANN E , Cir cu i tJudg e . In 200 9, the Uni te d S ta te s an d th e St at e o f W isc on sin (“t h e G ov er n m en ts ”) file d su it infed er al d ist ric t c ou rtag ai n s t e l ev en of th e p ot en tia lly re sponsibl e par ti es ( “PRPs”) i n an e nvi ro nm ental cl ea nup, s ee k i ngr es p ons e co st s unde rthe Co m pr eh en si ve En viron m entalResponse , Com pensati on, and Lia

bi l i ty A ct, 42 U
. S. C. § 9 601 et seq. (C E R C L A ). Sh or tly ther eafter, the Gover nm ents fi l ed noti ce o fa de m in im is conse nt decr ee pu rs uant to CE RC LA § 122( g)
. Eventual l y, th e G overn m en ts m oved f or settlem en t. A p p leton P ap ers I nc. and N C R Corpor ati on inter vened. The di str i ct cou rt grante d the set t le m en t m otion over th e intervenor s’ o pp osi ti on. Later, the Gover nm ents m ove d fo r a de m inim is se tt l ementw i tha twel fthdefen dan t, a nd the di s t r i c tc o ur tg r a nt e d thi s mo t i o n. App l e t o n a nd NCR a p p e a l e d th e g r a n to fb o th s e t t l e me n tmo t i o n s . We a ffi r m.

I. B ACK GR OUN D The Fo x R iveri n W i sco nsi n i s hea vi l y c ontam i nated wi thPo l y ch l o r i na te d b i phe ny l s ( “P C B s”)
. Appl et o n a nd N CR are resp o ns ibl e f o rmuch o fthe se PCBs
. The y c o ntr ibuted si gni fi cant a m ounts of Arocl or12 42, the m ost pr ev al en t PC B in Fox Ri ve r . The r i ve ra l so c o nt ains othe r PC Bs, i ncl ud i ng Arocl or 12 54 and A ro cl or12 60. A p p let o n , N C R, an d a few oth er P R P s a re cu rre n tly payi ng t o cl ean up Fo x Ri veri n com pli ance with a 2 007 E nv ironm en tal Protect ion A gen cy ord er. A pp let on a nd N CR ar e s eek i ng co ntributi on, i n a s epar a t e s u i t, fr o m ma n y o th e rP R P s . T h e s e i n c l u d e the tw el ve PRP s s ubj ect to the c onse nt decr ees i n thi s s uit :N o. 10

- 2480 3

Se c t i on 10 4( e) r eques t s ar e a t ool by whi c h the fede ra l gove rn 1 m ent can obtai n inf orm ati on abo ut the cr eati on, s torage, use, (co n tin u ed ...) N eenah F oundry Com pany; Gree n Bay M etr opol i tan Se w er age Dis tr i ct; the Cityo fDe Per e; Pro cter& Ga m b le P a p e rP r o d u c t s C o mp a n y ; U n i o n P a c i fi c R a i l r o a d C o mpan y ; Gr ee n Ba y Pa ck ag i ng, Inc o r po r at ed; Hea r t o fthe Val l ey M etr opol i tan S ew er age Dis tr i ct; Laf ar ge Corp or atio n ; L eic h t T ra n sfe r an d Sto ra ge C om p an y; W i s c o n sin Publi c Ser vi ce Corpor ati on; Inter nati onalPaperCom pany; and G eor ge A
. W hi ti ng PaperCom pany ( the “ de m in im is d efend an ts”). I n 2 0 0 9 , the Go v e r nme nt s fi l e d s ui t a g a i ns tthe de m inim is defendants under CER CL A §§ 10 6 a nd 107
. S ee 4 2 U. S
. C
. § § 9 6 0 6 , 96 07
. T h e G o v e r n me n t s th e n fi l e d t wo separ ate co nsent decree s

— one f orthe C i ty ofDe Per e, the othe r f orth e rem ai ni ng de m inim is defendants. De Pe r e a g r e e d t o p a y $ 2 1 0 , 0 0 0 t o s a t i s fy i t s l i ab i l i ty. The others ag re ed to pay a co m bi ned tot alo f$1 , 875, 000. The Gover nm ents est i m ate d that the to talcl eanup cost w oul d be, acc ounti ng f oruncer tainty, $1.5 bi l l i on. They al so est i m ate d th at e ach o fthe de m inim is defendants ha d d i s c h a r g e d n o mo r e th a n 1 0 0 k i l o g r a ms o fP C Bs and that, i n tota l, 230, 000 ki l ogr am s o fPCB s had be en di s c ha r g e d int o the F o x Ri v e r . T he t o t a ldi s c ha rg e est i m ate i s a conse rv ati ve one, base d on a l ow-end est i m ate ofA ro cl or12 42, notto ta l P C B s. The Governm ents base d th ei r i nd i vi du alco ntributi on e sti m ate s o n the de m inim is defe nd ants’ r esponse s t o CE RC LA § 104( e) i nfo rm ati on re quests ( “§ 104( e) r equests ”), o n dis cove ryr esponse s 14 N o. 10

- 2480

(
. . . c on t i nu e d) 1 d ispo sal, an d release of haz ard o u s sub stan ces an d p ollu tan ts. 4 2 U .S.C . § 9 6 0 4 (e)(2 ). fro m A pp l eto n and N CR ’ s co ntributi on s uit, and on sta tem ents by the de m inim is de fen dan ts c er ti fy i ng that they had turned over a ll info rm ati on r el ate d to thei r use o fPCB s. The De partm ento fJ us ti ce fi l ed no ti ce o fthe c o ns en t d e c r e e s i nth e F e d e r a lR e g i s t e ra n d s o l i c i t e d p u b l i c c o mm ent. A pp l eto n and N CR o bj ecte d to both set tl em en ts , ar g ui ngtha t th e se tt l ement s unde r es ti m at ed th e de m inim is de fe nd a nt s ’ c o nt r ib uti ons . App l e t o n a nd NCR ba se d the i ro bj ec ti ons o n s tu di es s ug g es tingtha t th e Gover nm ents had u nd er est i m ate d the am ount o fA ro cl or 1254 and 126 0 in th e Fox Riv er . These studie s a l so provi ded di re ct e vi dence ofPCB use by som e de m inim is defen dan ts
. T he Go ve r nm en ts a g r ee d wi thNCR ono ne poi nt: theyrec og ni zed thatGree n Bay M etr o Se w er age m ay have disc harg ed m or e than 100 ki l og ra m s o fPCB s. A pp l eto n and N CR cl ai m ed Green Bay M etr o Se w er age had dischar ged up to 324 ki l ogra m s. The Governm ents m ade an e ven m ore cauti ous e sti m ate o f48 0 k i l ogr am s, and G re en Bay M etr o agr eed to a cor re sp ondingpaym ent o f$3 25, 000. T he r em ai ni ng de m inim is defendants’ paym ents re m ai ned the s am e. A fterthe noti ce a nd co m m ent proce ss, the Gover nm ents m o ve d f o rs et tl ementi n the di stri ctc o ur t. Appl et o n a nd N CR i nter vened and opposed the m oti ons f orse ttl em en t. The di st r i ctc o ur t appr o ve d b oths et tl ementN o. 10

- 2480 5 decree s a nd gr anted the m oti ons f orsettl em ent. A pp l eto n a nd NCRthe n a pp e a l e d.

II. A NA LYSIS I n re vi ew i ng t h e co nsent decree s, we are co nstr ai ned b y a d o u b l e d os e o f d efe re n c e. Se eU ni t e d S t at e s v. Cannon s Eng’g Corp. , 89 9 F
. 2d 79, 84 ( 1stCi r. 1 99 0). Fi rs t, the t ri alco urt m ust deferto the expert i se ofthe age ncy an d to t h e f e d er al p olic y e n c ou ra gin g s et tle m en t. In re Tutu Wat e rWe l l s C E R C LA Li t igat i on , 32 6 F
. 3d 201, 20 7 ( 3d Cir
. 20 03)
. Thus, the dist ri ct c ourtm ust ap p rove a conse nt decr ee i fi t is r eas onabl e, co nsi ste nt with C E R C L A ’s goa ls, an d su b st an tiv ely a n d p ro c ed u ra lly fair
. Id. W e, i n turn, d eferto the dist ri ct c ourt ’ s deci si on

— re vie w in g on ly for an ab u se of d isc re tio n . Ca n non s E ng’g, 89 9 F
. 2d at 84.

A
. No R ational Ba sis T he distric t c ou rt conc lud ed the con sen t d ecrees w ere su b st an tiv ely fair. A p p let on an d N C R a r gu e t h at th is co nc l us i o n h as no r at i o na lb as i s in th e r ec o r d. A co ns en t d e c r e e i s s u b s t a n t i v e l y f a i ri fi t s t e r ms a r e b a s e d o n c o mp ar at iv e fa u lt. Tutu Wel ls , 326 F.3d at20 7; Cannon s E ng’g, 89 9 F
. 2d at 87. T h e c alculat i on o fco m parat i ve f aul t “ shoul d be uphel d unles s i t i s a rbi tr ar y, capr i ci ous, an d devoi d ofa ra ti onalbas i s. ” C anno ns E ng’g, 8 9 9 F
. 2d at 87 ( “[ W ] hat co nsti tutes the bestm eas ure ofco m parative fault .
. . shou ld be left larg ely to th e E PA ’s exp ertise. ”).6 N o. 10

- 2480

U nion Paci ficprov ided c ert ifie d responses to rel evant § 104( e) 2 req u ests that h ad b een serv ed on oth er p arties. Rare l y doe s a n appell ate court concl ud e the di str i ct cour t had no f actualbas i s t o approve a conse nt decr ee. A p p let on an d N C Rca n p oin t t o on ly on e s u c h h old in g. In U ni t e d S t at e s v. M ont r os eChe m . Corp. , th e N in th C irc u it r ev er se d the a ppr o va lo fa c o ns en t dec r ee b ec au se the re cor d i ncl ud ed no info rm ati on

— n o te v e n a n u ns up port ed est i m ate

— ab o utthe t o ta lc o sto fc l ea nup orthe set tl i ng par ti es’ co m parat i ve faul t. 50 F. 3d 741, 74 7 ( 9th Cir
. 1 9 9 5 )
. We ne e d n o tde c i de wh e the ra n un s up po rt ed e s t i ma t e w o u l d b e a s uf f i c i e n tf a c t u a lb a s i s t o a ffi r m a conse n t decr ee

— the Gove rnm ents’ es ti m ate her e has a de qu a t e s up po r ti n the r e c o r d. A ccor ding to A pp l et on a nd N CR, the onl y b ase s for th e de m inim is defen dan ts ’ c o m par at i ve f au l t ar e th e Gov ernm en ts ’ uns uppo r te d c o nc l us i o ns . In r ea l i ty, the r ec o r d i nclud es i nf o r m at i o n abo ute ac h o fthe de m inim is defe nd ants’ d ischarge s o fPCB s. W hi ti ng Paper, Gree n BayM et r o S ewe r ag e, Gr ee n Ba y Pa ck ag i ng, Hea r t o fthe Val l ey, Inte rnat i onalP aper, P ro cter& Gam bl e, and U ni on Pa ci fi c a l lr es po nde d t o § 1 04 ( e) r eq ue st s. The de m inim is

2 defe nd ants t h at di d not r espond to § 104( e) r equests pr o v i de d c e r t i fi e d s t a t e men t s ab o ut the i ru s e o fP CBs and about any p ot en ti aldi schar ges . The r eco rd al so includ ed de p ositi on tran script s and w ritten d iscovery r es po ns es pr o duce d i n r el at ed l i ti g at i o n. F i na ll y, the re c or d inc lu d ed info rm at ion d ra w n fr om th e p u b lic com m ent pr oce ss.N o. 10

- 2480 7 Contrary t o A pp l eton a nd N CR ’ s a rgum ent, thes e sour ces ar e no t devo i d ofco ntent. In f act, A pp leton an d N CR us ed th e i nf o r m at i o n fr o m Gr ee n Ba y M et ro Se w er age ’ s § 10 4( e) r esponse s to dem onst ra te that Green BayM et r o S ewe r ag e’ s di sc ha r g es e xc ee ded th e Gov ernm en ts ’ o r i g i na le st i m ate
. Gi ve n the a m o unto fr el ev an t info r m a t ion i n th e record , w e find that the record p ro vid es a rat ion al ba sis on w h ich th e d ist ric t c ou rtco u ld con clud e the cons en t d ecrees w ere su bsta nt ively fai r.
B
. C o nsid eratio n o

f no n-1 24 2 A roc lo rs A pp l eto n and N CR next ar gue that th e c onsent decre es ar e no t su bs ta nt i ve l y f air bec au se the e st i m at es o fthe de m inim is de fen dan ts ’ c o m par at i ve f au l t do not ac co unt f ornon- 1242 A ro cl or s. This ar gum ent r est s o n a f al se prem i se. In tr uth, the es ti m ate s o fthe i nd i vi du al demi n im is defendants’ co m parat i ve f aul t a ccount f or di s c ha r g e s o fa l lP CBs

— no t j us t Aro cl o r1 24 2. Acco r di ng to A pp l eto n an d N C R, the Governm ents re l i ed on surve ys ofPCB pol l uti on

— w hi ch f ocus on Arocl or 1 2 42

— to der i ve i ndi vi duale st i m at es . Butthe Go ve r nm ents actual l y r el i ed on § 10 4( e) r esponse s a nd o ther dir ect i nfo rm at ion about the de m inim is defe nd ants’ disc harg es. These sour ces cove r disc harg es ofal lPCB s. T h e G ov er n m en ts d id co n sid er on ly A ro c lor 1 24 2 in thei r est i m at e o fthe tot alam ount o fPCB s di schar ged i nto the F ox Ri ver . But A p p l eto n and N CR wise l y do not c on te st th is c h oic e: in c lu d in g n o n -12 42 A ro c lors in t h is est i m ate would have onl y decr eas ed the de m inim is defendants’ co m parat i ve f aul t.8 N o. 10

- 2480 Apple to n a nd NCR’ s o nl y argum en t, the n, i s th atthe e v i de nc e i th a s p r e s e nt e d ab o utthe p r e s e nc e o fn o n- 1242 A ro cl or s s how s that the co nsent decree s l ack a r ati onal basi s. W e r ei ter ate thata dist ri ct c ourtsho uld deferto th e Gov ernm en ts ’ e xp erti se i n wei g hi nga m bi g uo us a nd c on fli cting ev id en c e o f su b st an tiv e fa irn es s. C anno ns E ng’g, 899 F. 2d at 88. A nd we w i l lo nl y di sturb the di str i ct co ur t’ s dec is i o n i fAppl et o n a nd NCR ca n s ho w tha t th e co ur t i g no r ed a m at er i alf ac to ro rmade “a s er i o us m ist ak e in w eig h in g” th e re lev an t fa c to rs . Id. at84
. Apple to n a nd NCR ha ve no t m etthi s he av y b urde n. The y po i ntt o s tud ies s ug g es tingtha t Aro cl o r s 12 54 a nd 1260 ar e m or e to x ic than A ro cl or12 42. Thi s, theyar gue, shows t he co nsent decree s l ack ra ti onalbas i s be cause th e n o n - 1 2 4 2 Ar o c l o r s d o n o t we i g h mo r e h e a v i l y i n t he dec r ee s’ c o m par at i ve f au l t ca l cul at i o ns . Butthe Go ve r nm e n t s p oin t t o e vid en c e s u gg es tin g t h at A ro c lor 1 24 2 is j us t as tox ic a s A roclors 1254 an d 1260. Th e d istri ct cou rt co ns i dered a l lthe r el ev an t ev i den ce a nd de ci ded th e G ov er n m en ts ’ ap p ro ac h w as rat ion al. W e a r e p oo rly sui ted to ev al uate the m er i ts ofthe confl i c tin g pos i ti ons. See Kalamazoo Riv e rSt udyGrp. v. Rockwel l Int ’ l Corp. , 27 4 F.3d 104 3 , 1 0 5 1 ( 6th Cir. 2001) (up hold ing d istri ct cou rt’s d ecision to d efer to the E P A ’s conc lusion th at A roclors 1242 and 1254 are eq ua ll y toxic). Th e d istri ct cou rt di d no t ab us e i ts di sc r et i o n b y de emi ngthe Go ve r nm ents’ to xi ci ty cal cul ati ons re aso nabl e. Apple to n a nd NCR also poi ntt o e vi den ce s ug g es ting th e Gov ernm en ts ha ve unde r es ti m at ed th e amoun t o fno n1 2 4 2 A r o c l o r s d i s c h a r g e d i n t o F o x R i v e r . E v e n i fweN o. 10

- 2480 9

wer e to di sr eg ar d the Go ve r nm en ts ’ e vi den ce o fthe amoun t o fno n- 12 42 Aro cl o r s i n F o x Ri ve r, Appletona nd N CR ’ s e vi dence w oul d not dem on str ate a l ack ofsubsta nti ve f ai rnes s. A pp l eto n and N CR cannotshow that the de m inim is defendants

— rath er th an a ny of the nu m ero us o th erPRP s

— ar e re sp on s i b l e for th e p u rp or te d ly uncounted non-1 242 A ro cl or s.
C
. U nre solve d Is sueof D ivis ibi li ty W e n o t e th a tAp p l e t o n a n d NC Ra p p e a lo n l y the di st ric t co ur t’ s appr o va lo fthe c o ns en t dec r ee s ati ss ue he r e . Any di v i s ib i l i t y de c i s i o n mad e

— o rn o ty e tma de

— in r el at ed l i ti g ati on i s be y o nd the s co pe o fthi s appe al
. The only relevant i ssu e , then , i s w he th er the d istri ct cou rt abused i ts disc re ti on byaffi rm i ng the con se n t d ecr ees bef or e deci ding w heth er the de m inim is defendants’ l i abi l i ty w as divi sibl e fro m thato fo therPRPs. By i ts na tu r e, a c o ns en t dec r ee e l i m i na te s m an y po ss ibl e o ut co m es tha t woul d ha ve b ee n b et te rf o ro ne sid e or th e o th er . See U ni t e d St at e s v. Ar m our& Co. , 402 U
. S. 673, 6 81 (1971) ( “[ I ] n exchange f orthe saving o fco st and el i m i nati on o fr i sk, the pa rt i es each g i ve up so m ethi ng they m i ght have w on had they proce ede d w i th th e l i ti g a t i o n . ” )
. Ap p l e t o n a n d NC Rh a v e n o ts h o wn that the s ett l em ent am ounts do not acco unt f orthe ri sk of div isibi l i ty. U nd erA pp l eto n and N CR ’ s theor y, part i es c ou ld n ev er n eg o t i a te aw ay th e ris k of w h ich sid e w ou ld preva i li n a di vi sibi l i ty dispute, ev en wh en

— as he re

— th e cos t o fr eso l vi ng tha t di sp u te m i ght e xceed the tot al set tl em ent a m ount.10 N o. 10

- 2480 N ei therthe Gover nm ents northe de m inim is defendants have an inter esti n dis puting divi sibi l i ty here
. A pp l eto n an d N C Rare free t o d isp u te th e d ivis ibilit y of t h eir o wn l i ab i l i tyi n the a ppr o pr i at e su i t. Acco r di ng l y, the di st r i ctc o ur t di d no t ab us e i ts di sc r et i o n b y a p p rovi ng th e co ns en t dec r ee s be f o r e a di vi sibi l i tyde te r m i na ti o n.
D
. Insu fficien t D isco very A pp l eto n and N CR cl ai m m or e d isc overywas needed be f o r e th e di st r i ct co ur t co ul d appr o ve th e set tl ement agreem en t. T h e y d o not m ake clear w he n th e d iscovery sh o ul d ha ve t ak enpl ac e o rwho s ho ul d ha ve b ee n involved
. A p p leton an d N C Rdid not m ove for dis cove ry i n thi s c a s e , s o th e y c a n n o ta p p e a lth e d e n i a lo fa ny su chmot i o n. To the e xt en t th eya r g ue that th e Gov ernm ents and the de m inim is defen dants sho uld have engag ed in di sco ver y in or der t o est abl i sh a f actual basi s forthe c onse nt decr ee, we have a l re ady address ed th eir c o n c e rn s. T o th e e x te n t A p p let on an d N C Rch allen ge d isc ov er y lim ita tio n s in se p ar at e litig at ion, th eir ar gu m en t is be yo n d th e s c op e o f th is a p p ea l.

E
. Im pro per C o nsid eratio n o f E quit a ble Fa cto rs A pp l eto n and N CR ar gue that the di str i ct c ourt, i n i ts ap p ro va l of th e c on se n t d ec re es , co n s i d er ed eq u ita b le f ac to r s i n vi o l at i o n o f CERCLA § 12 2( g )
. By no t m aking th i s a r g u m en t u n til or al a rg u m en t, th ey forfe ite d it. See C eta v . M uk a sey, 535 F.3d 63 9, 64 9 n .16 (7t h C ir. 20 08 ).N o. 10

- 2480 11 Eve n i fno t f o r fei te d, Appl et o n a nd NCR’ s ar g um en t ha s no m erit. S ec ti o n 1 22 ( g ) put s f o r thc r i te r i a f o ri den

ti fyi ng de m inim is de fend an ts. I t d oes not l im it the factors a d istri ct cou rt can cons ider in d et e r m ining w he th er a se tt l ementd ecre e i s f ai r, r ea so nabl e, a nd c o ns i st en t w ith C E R C L A
. See42 U .S.C . § 96 22 (g) . M or eo ve r, w h ile the dist ri ct cour t’ s or der does m enti on co m parat i ve l i ab i l i t y, a n e qu i t ab l e f acto r, i t s de c i s i o n r e s t s o n i t s a pp ra isa l of co m p ar at ive fau lt

— an app ro p ri ate and neces

sa ry fac to r for co n sid er at i o n . SeeTu tu WaterWel ls , 32 6 F. 3d at 207; Ca nnons E ng’g, 89 9 F
. 2d at 87.

III. C ON CLU SI ON Be c a us e the di s t r i c tc o ur tdi d n o tab us e i t s di s cre ti on i n a ppr o ving th e co ns en t dec r ee s be twe enthe Go ve r nm ents and the de m inim is d efe nd ants, we A FFIRM i ts deci si ons.

5- 4- 11