Exhibit 21

Case 3:14-cv-01772-MO Document 33-35 Filed 04/10/15 Page 1 of 17
IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re: )

) Case No. 09-10235 (BLS)

SMURFIT-STONE CONTAINER )

CORPORATION, et al., ) (Jointly Administered)

)

Debtor. ) Chapter 11

UNITED STATES’ MEMORANDUM IN SUPPORT OF DEBTORS’ 9019 MOTION 

FOR APPROVAL OF SETTLEMENT AGREEMENT

AND RESPONSE TO PUBLIC COMMENTS 

The United States submits this memorandum in support of Debtor and certain debtors-inpossession (collectively, “Debtors”)1

 

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification 

number, are: Smurfit-Stone Container Corporation (1401), Smurfit-Stone Container Enterprises, Inc. (1256), 

Calpine Corrugated, LLC (0470), Cameo Container Corporation (5701), Lot 24D Redevelopment Corporation 

(6747), Atlanta & Saint Andrews Bay Railway Company (0093), Stone International Services Corporation (9630), 

Stone Global, Inc. (0806), Stone Connecticut Paperboard Properties, Inc. (8038), Smurfit-Stone Puerto Rico, Inc. 

(5984), Smurfit Newsprint Corporation (1650), SLP Finance I, LLC (8169), SLP Finance II, LLC (3935), SMBI Inc. 

(2567), Smurfit-Stone Container Canada Inc. (3988), Stone Container Finance Company of Canada II (1587), 

3083527 Nova Scotia Company (8836), MBI Limited/Limitée (6565), Smurfit-MBI (1869), 639647 British 

Columbia Ltd. (7733), B.C. Shipper Supplies Ltd. (7418), Specialty Containers Inc. (6564), SLP Finance General 

Partnership (9525), Francobec Company (7735), and 605681 N.B. Inc. (1898). The Debtors’ corporate headquarters 

are located at, and the mailing address for each Debtor is: 222 North LaSalle Street, Chicago, Illinois 60601.

Rule 9019(a) motion to approve the proposed Settlement 

Agreement in this matter, lodged with this Court on October 28, 2010. Pursuant to Section XIV 

of the Settlement Agreement, the United States Department of Justice gave the public notice of 

the lodging of the decree and provided an opportunity for the public to comment on it for a 

period of thirty (30) days. “Settlement Agreement,” Section XIV at 31-33, (Case No. 09-10235 

(BLS), lodged October 28, 2010); 75 Fed. Reg. 67767-67768 (November 3, 2010). The 

comment period has expired and the United States has received three adverse comments and one 

objection to the proposed Settlement Agreement. After due consideration, the United States has 

determined that the proposed settlement is in the public interest. See “Settlement Agreement,” 

Section XIV at Paragraph 29 (October 28 2010). Accordingly, the United States supports 

Debtors’ 9019 motion for approval of the Settlement Agreement, filed on November 19, 2010.

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I. THE PROPOSED SETTLEMENT AGREEMENT

The proposed Settlement Agreement resolves federal claims under Section 107(a) of the 

Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended 

("CERCLA"), 42 U.S.C. § 9607(a), for:

(1) response costs incurred and to be incurred by the Environmental Protection 

Agency ("EPA") in connection with response actions performed by EPA at the following 

sites: Sauer Dump Site in Dundalk, Maryland; 68th Street Dump Site in Baltimore, 

Maryland; Casmalia Disposal Site near Santa Maria, California; BCX Tank Superfund 

Site in Jacksonville, Florida; Ward Transformer Site, Raleigh, North Carolina; and the 

Portland Harbor Superfund Site in Portland, Oregon;

(2) removal costs pursuant to the Oil Pollution Act ("OPA"), 33 U.S.C. § 2701-2762, 

in connection with the discharge of oil from Debtor's Portland Harbor Superfund Site; 

and 

(3) natural resource damages and assessment costs, incurred and to be incurred by the 

Department of Interior and National Oceanic and Atmospheric Administration 

(collectively, "natural resource trustees"), at and near Debtor's Portland Harbor facility.

Pursuant to the Settlement Agreement, Smurfit will distribute stock on account of allowed 

bankruptcy claims in the total amount of $15,358,174.00 for federal environmental claims -

$12,358,174.00 for EPA claims and $3,000,000.00 for natural resource trustees’ claims. 

II. CERCLA STATUTORY FRAMEWORK

Congress enacted CERCLA in response to widespread concern over the severe 

environmental and public health effects resulting from improper disposal of hazardous wastes 

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and other hazardous substances. See generally United States v. R.W. Meyer, Inc., 889 F.2d 

1497, 1500 (6th Cir. 1989), cert. denied, 494 U.S. 105 (1990); United States v. Akzo Coatings of 

America, Inc., 949 F.2d 1409, 1416-18 (6th Cir. 1991); Eagle-Picher v. EPA, 759 F.2d 922, 925 

(D.C. Cir. 1985); United States v. Chem-Dyne Corp., 572 F. Supp. 802 (S.D. Ohio 1983). 

CERCLA, as amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 

No. 99-499, 100 Stat. 1613 (Oct. 17, 1986) (SARA), grants broad authority to the United States 

in connection with the cleanup of waste sites.

CERCLA provides EPA with several options when EPA determines that response action 

is needed at a particular hazardous waste site. For example, EPA may undertake the response 

action on its own, utilizing funds from the Superfund, and then sue the responsible parties for 

reimbursement of the Superfund. 42 U.S.C. §§ 9604, 9607. Responsible parties under CERCLA 

are liable for both response costs and injuries to the natural resources affected by the release of 

hazardous substances. 42 U.S.C. § 9607(a)(4)(c). EPA may also issue administrative orders 

under CERCLA Section 106 directing responsible parties to implement response actions. 42 

U.S.C. § 9606. Responsible parties include the owners and operators of hazardous substance 

facilities as well as those who arranged for the disposal, treatment, or transport of the hazardous 

substances. 42 U.S.C. § 9607. 

Having created the liability system and enforcement tools to allow EPA to pursue 

responsible parties for Superfund cleanups, Congress expressed a strong preference that the 

United States settle with responsible parties in order to avoid spending resources on litigation 

rather than on cleanup. See United States v. Akzo Coatings of America, Inc., 949 F.2d 1409, 

1436 (6th Cir. 1991) ("presumption in favor of voluntary settlement"); In re Cuyahoga 

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Equipment Corporation, 980 F.2d 110 (2d Cir. 1992) (citing City of New York v. Exxon Corp., 

697 F. Supp. 677, 693 (S.D.N.Y. 1988)); United States v. Cannons Engineering Corp., 899 F.2d 

79, 92 (1st Cir. 1990); United States v. DiBiase, 45 F.3d 541, 545-46 (1st Cir. 1995); Kelley v. 

Thomas Solvent Company, 717 F. Supp. 507 (W.D. Mich. 1989); H.R. Rep. No. 253, pt. 1, 99th 

Cong., 1st Sess. 80 (1985), reprinted in 1986 U.S. Code Cong. & Ad. News 2862. CERCLA 

encourages settlements by providing protection from contribution claims for matters addressed to 

parties who settle with the United States. Section 113(f)(2) of CERCLA, 42 U.S.C. § 9613(f)(2). 

This provision provides settling parties with a measure of finality in return for their willingness 

to settle. United States v. Pretty Products, Inc., 780 F. Supp. 1488 (S.D. Ohio 1991); see

Cannons Engineering, 899 F.2d at 92; O'Neil v. Picillo, 883 F.2d 176, 178-79 (1st Cir. 1989), 

cert. denied, 493 U.S. 1071 (1990); United Technologies Corp. v. Browning-Ferris Industries, 

Inc., 33 F.3d 96 (1st Cir. 1994), cert. denied, 115 S. Ct. 1176 (1995); H.R. Rep. No. 253, pt. 1, 

99th Cong., 1st Sess. 80 (1985), reprinted in 1986 U.S. Code Cong. & Ad. News 2862. In 

addition, a party that has settled its CERCLA liability may bring actions for contribution against 

other non-settling responsible parties. 42 U.S.C. § 9613(f)(1). See United States v. R.W. Meyer, 

Inc., 932 F.2d 568 (6th Cir. 1991); Chem-Dyne, 572 F. Supp. 802. 

III. JUDICIAL REVIEW OF SETTLEMENT AGREEMENTS

The well settled standard applied to review of the United States' proposed settlements 

under CERCLA is whether a settlement is fair, reasonable and consistent with CERCLA. 

United States v. Akzo Coatings of America, Inc., 949 F.2d 1409, 1424, 1426 (6th Cir. 1991); 

United States v. Cannons Engineering, 899 F.2d 79, 84 (1st Cir. 1990); United States v. 

Hercules, Inc., 961 F.2d 796, 800 (8th Cir. 1992). Review of such settlements is committed to 

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the discretion of the reviewing court, see United States v. Hooker Chemical & Plastics Corp., 

776 F.2d 410, 411 (2d Cir. 1985), which is to exercise this discretion in a limited and deferential 

manner, Akzo Coatings, 949 F.2d at 1424; Cannons Engineering, 889 F.2d at 84; In re Cuyahoga 

Equipment Corp., 980 F.2d 110, 118 (2d Cir. 1992). 

The judicial deference to settlements reached by the parties to litigation is "particularly 

strong" when that settlement "has been negotiated by the Department of Justice on behalf of a 

federal administrative agency like EPA which enjoys substantial expertise in the environmental 

field." Akzo Coatings, 949 F.2d at 1436. The balance of competing interests affected by a 

settlement with the federal government "'must be left, in the first instance, to the discretion of the 

Attorney General,'" Kelley v. Thomas Solvent Company, 717 F. Supp. 507, 514-515 (W.D. 

Mich. 1989) (citation omitted), since the Attorney General retains "considerable discretion in 

controlling government litigation and in determining what is in the public interest." United 

States v. Associated Milk Producers, Inc., 534 F.2d 113, 117 (8th Cir.), cert. denied, 429 U.S. 

940 (1976). "Indeed, where a settlement is the product of informed, arms-length bargaining by 

the EPA, an agency with the technical expertise and the statutory mandate to enforce the nation's 

environmental laws, in conjunction with the Department of Justice, one court has indicated that a 

presumption of validity attaches to that agreement." United States v. Rohm & Haas Co., 721 F. 

Supp. 666, 681 (D.N.J. 1989) (citing City of New York, 697 F. Supp. at 692) (emphasis added). 

Fairness in the CERCLA settlement context has both procedural and substantive 

components. Cannons, 899 F.2d at 86. To measure procedural fairness, a court should 

ordinarily look to the negotiation process and attempt to gauge its candor, openness, and 

bargaining balance. Cannons, 899 F.2d at 86. A determination that a settlement is procedurally 

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fair “may also be an acceptable proxy for substantive fairness, when other circumstantial indicia 

of fairness are present.” United States v. Davis, 261 F.3d 1, 23 (1st Cir. 2001).

In reviewing substantive fairness, the court need only determine whether a proposed 

settlement reflects a reasonable compromise of the litigation. U.S. v. Rohm & Haas Co., 721 

F.Supp. 666, 685 (D.N.J. 1989). In order to be fair to other non-settling responsible parties, a 

settlement should recover at least an amount "roughly correlated with some acceptable measure 

of comparative fault," apportioning liability "according to rational (if necessarily imprecise) 

estimates" of fair shares of liability for a given Facility. Cannons Engineering, 899 F.2d at 87.7

Whether a settlement is “reasonable” for purposes of judicial review of CERCLA 

settlements sometimes involves review of the technical effectiveness of cleanup requirements in 

settlements obligating settling parties to perform remediation. None of the proposed settlements 

require Debtors to perform remediation. Rather, they generally provide money either to a special 

account or a trustee for use in cleanup of the Site pursuant to response or corrective action 

measures that are or have been selected separately. Courts typically find such monetary 

settlements reasonable. See, e.g., Kelley, 717 F. Supp. at 518 (settlement providing monetary 

Factors considered by courts reviewing CERCLA settlements for fairness include "‘the strength 

of the plaintiffs' case, the good faith efforts of the negotiators, the opinions of counsel, and the 

possible risks involved in the litigation if the settlement is not approved.'" Kelley v. Thomas 

Solvent Co., 717 F.Supp. 507, 517 (W.D.Mich.1989) (citing United States v. Hooker Chemical 

& Plastic Corp., 607 F. Supp. 1052, 1057 (W.D.N.Y.), affirmed, 776 F.2d 410 (2d Cir. 1985)). 

 7 Accord, In re Energy Cooperative, Inc., 173 B.R. 363, 367 (N.D. Ill. 1994); In re Eagle-Picher Industries, 

Inc., 197 B.R. 260 (Bankr. S.D. Ohio 1996), aff’d, 1997 U.S. Dist. LEXIS 15436 (July 14, 1997 S.D. Ohio).

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recovery was reasonable because it “functions exactly as the CERCLA cost recovery action was 

intended”). 

Finally, a CERCLA settlement must be consistent with the statutory goals of CERCLA:

(1) Congress’ desire to equip the federal government with tools necessary for prompt and 

effective responses to hazardous waste disposal problems of national magnitude; and (2) 

Congress’ desire that those responsible for causing the problems thus identified bear the costs 

and responsibility for remedying the harmful conditions they created. United States v. Wallace, 

893 F. Supp. 627, 636 (N.D. Tex.1995). CERCLA authorizes the cleanup of hazardous waste 

sites using money from the Superfund, but the Superfund is limited and cannot finance cleanup 

of all of the many hazardous waste sites across the nation. Congress knew when it enacted 

CERCLA that the costs of response activities would greatly exceed the Superfund. Kelley, 717 

F. Supp. at 518. Thus, settlements of CERCLA cases in which the defendants agree to reimburse 

the Superfund for past expenditures are in the public interest. Cost-effective settlement practices 

also preserve resources of the Government in its efforts to clean up hazardous waste sites as 

quickly as possible. See Kelley, 717 F. Supp. at 518; See, e.g., In re Bell Petroleum, 3 F.3d at 

897.

IV. THE COMMENTS

Three public comments and one objection were received on the Settlement Agreement. 

A. Comment of Jill Mosteller noting the disparity between a recommended “reserve 

amount” and the settlement amount for the Portland Harbor Superfund Site.

One adverse comment was received by the Department of Justice by email on November 

5, 2010. (Attachment A). Jill Mosteller, the commentor, stated that “[the proposed settlement] 

falls well short of the $50 million reserve the federal government requested in May to cover 

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Smurfit's liability for past water pollution from its North Portland corrugated cardboard box 

plant, 9930 N. Burgard Way.” She objected that the proposed settlement, with regard to the 

allowed claim for the Portland Harbor Superfund Site, is inadequate in the face of such a 

potential liability.

The $50 million “reserve” amount described in the article was an amount that the United 

States contemplated, in lieu of settlement, to fully protect the federal environmental claims2

Otherwise, the comment does not reflect any case-specific concerns about the United 

States’ estimation of the Debtors’ equitable fair share of the total liability for the Portland Harbor 

Superfund Site (or the costs and difficulties of litigating the claims). 

, if 

they had to be adjudicated and new evidence established that Debtor’s equitable share exceeded 

the amounts that had been sought to settle the claims. See “The United States’ Objection to 

SSCE Distribution Reserve Amounts,” at 9-10, (Docket No. 7520, May 7, 2010)(Attachment B). 

In Paragraph 36 of the Objection, the United States stated that “[a]ny reserve should be 

conservatively set at a high level so as to preserve the Government’s ability to recover any 

amounts the Court may find should be allowed.” In the Objection the United States proposed a 

reserve amount of $50 million for the claims relating to the Portland Harbor Superfund Site. 

Thus, the comment is predicated upon a misunderstanding of the purpose of a reserve amount. 

The reserve amount described in the comment did not reflect an estimate of the Debtor’s 

equitable share based upon current information. It was a protective amount to ensure that 

adequate reserves would be available to pay the Government’s claims, when a judgment was 

reached. In light of the settlement, however, the reserve amount is no longer relevant. 

 

2 See the United States’ Proofs of Claim Nos. 11430 and 11431, as amended by Claim No. 13789, which reestimates future response costs for the Portland Harbor Superfund Site.

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B. Comment on behalf of American Premier Underwriters, Inc., concerning 

disposition of funds available as a result of the Sauer Dump Site settlement 

amount.

Another comment was received on December 3, 2010 from attorney Benjamin G. 

Stonelake, Jr., BlankRome, LLP, on behalf of American Premier Underwriters, Inc. (“APU”), 

relating to the disbursement of settlement proceeds for the Sauer Dump Site. (Attachment C). 

The comment specifically objects to Paragraph 17(a)(i)(b) of the proposed Settlement 

Agreement, which provides: 

The cash distribution for EPA’s Allowed Claim for the 

Sauer Dump Site shall be deposited in a Site-wide Special 

Account within the EPA Hazardous Substance Superfund 

to be retained and used to conduct or finance response 

actions at or in connection with the Site, or to be transferred 

by EPA to the EPA Hazardous Substance Superfund. 

The comment asserts that the transfer of settlement proceeds from a Site-wide Special Account 

for the Sauer Dump Site to the general Superfund would be a “[g]ross injustice to the parties 

implementing future remedial activities . . . because the parties may be unable to recover any 

additional costs from Smurfit.” (Attachment C at 2). In its comment, APU notes that it has 

already been given assurance in an email from EPA-Region 3 that “any proceeds from the 

Smurfit bankruptcy will be put into a Site Specific Special Account to be used for future actions 

in connection with the Sauer Dump Site.”3

The language in the Settlement Agreement is identical to the model language provided in 

EPA’s “Consolidated Guidance on the Establishment, Management and Use of CERCLA Special 

Accounts” (“2002 Guidance”) and simply reflects that “special accounts are subaccounts within 

 Id. Nothing in the settlement negates this 

commitment. 

 

3 The use of the term “Site-specific” is used interchangeably from the term “Site-wide.”.

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the EPA Hazardous Substance Superfund (Trust Fund).” (Attachment D at 1,3). The 2002 

Guidance makes it clear that “[t]here are two critical components of the model language: use of 

the funds for a response action; and use at that site.” Id. at 6. This is consistent with the desires 

expressed in APU’s comment. There is no agency action yet – no record of decision -- selecting 

remedial response actions for the Sauer Dump Site. Thus, the settlement proceeds cannot be 

locked into a Site-wide Special Account for use only at the Sauer Dump Site, since EPA later 

may determine that future actions at the Site will not use all the funds in the special account. See

“Guidance on the Planning and Use of Special Account Funds,” OSWER Directive # 9275.1-20 

(“2010 Guidance”) (September 28, 2010).4

The proposed Settlement Agreement achieves the result sought by APU, within the scope 

of the relevant statutory provision, CERCLA Section 122(b)(3), 42 U.S.C. § 9622(b)(3)

 Under these circumstances, the language proposed in 

APU’s comment is not appropriate. (See Attachment C at 3). 

5

 

4 EPA’s 2010 guidance regarding the use of Special Accounts states: “Special Account balances that exceed the 

estimated known and potential future response costs should be transferred to the general portion of the Trust Fund 

after resources have been considered for reclassification in accordance with the ‘Superfund Special Account 

Guidance’ issued July 16, 2002. These resources will be made available for future appropriation by Congress.” 

Guidance at 6.

, and 

EPA’s guidances on special accounts. The provision in Paragraph 17(a)(i)(b) is standard 

settlement language, as established by EPA’s 2002 Guidance, for creating a Special Account. 

On the basis of that guidance and the proposed Settlement Agreement, the Smurfit cash 

distribution for the Sauer Dump Site will be deposited in a Site-wide Special Account for use at 

the Sauer Dump Site. In the event, however, that the special account balances exceed the 

estimated known and potential future response costs at the Site, the funds will be transferred to 

5 Section 122(b)(3) of CERCLA, 42 U.S.C. § 9622(b)(3), provides: “If, as part of any agreement, the President will 

be carrying out any action and the parties will be paying amounts to the President, the President may, 

notwithstanding any other provision of law, retain and use such amounts for purposes of carrying out the 

agreement.”

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the general Trust Fund. 2010 Guidance at 6. Of course, if the proposed Settlement Agreement is 

not approved, there is no authority to establish a Special Account for this site and thereby 

achieve a result that APU seeks. 42 U.S.C. 9622(b)(3).

C. Objection and comment on behalf of Schnitzer Steel Industries, Inc., and 

Schnitzer Investment Corp. seeking dedication of the cash distributions for the 

Portland Harbor Site to AOPC 3.

On December 3, 2010, an objection and a comment were filed on behalf of Schnitzer 

Steel Industries, Inc., and Schnitzer Investment Corp. (together referred to as “Schnitzer”). 

(Attachments D and E). The content of these documents is identical. Schnitzer is a potentially 

responsible party at the Portland Harbor Superfund Site with joint and several liability for the 

site-wide harm found there. On the basis of an agreement with Schnitzer on language in the 

proposed Order (Attachment F), Schnitzer is withdrawing its objection and comment. Section V, 

Paragraph 4(a)(5) of the Settlement Agreement is clarified that, subject to all appropriate legal 

authorities, EPA Region 10 shall place the proceeds received from this settlement into a Portland 

Harbor Superfund Site-wide Special Account within the EPA Hazardous Substance Superfund. 

EPA Region 10 intends to dedicate the proceeds received from this settlement to conduct or 

finance response actions after the Record of Decision for the Portland Harbor Superfund Site is 

issued. If EPA is able to enter into a settlement with one or more parties who agree to implement 

the Record of Decision, EPA intends to make such disbursements as agreed to by EPA and such 

parties from the settlement proceeds to perform work required under the settlement. 

No other comments have been received through the date of this response.

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V. THE PROPOSED SETTLEMENT AGREEMENT IS FAIR, REASONABLE 

AND CONSISTENT WITH ENVIRONMENTAL LAW AND THE PUBLIC 

COMMENTS RECEIVED DO NOT PROVIDE A BASIS TO DISAPPROVE 

THE SETTLEMENT AGREEMENT

For the reasons set forth below, the United States, having considered the public 

comments received, believes that the proposed Settlement Agreement is fair, reasonable, and 

lawful, notwithstanding the public comments submitted.

A. The proposed Settlement Agreement is fair, reasonable, and consistent with 

environmental law.

The proposed Settlement Agreement represents a reasonable and fair compromise after 

arm’s length negotiations by experienced bankruptcy and environmental counsel. The allowed 

general unsecured claims totaling $15,358,174.00 provide a substantial environmental benefit. 

The settlement avoids the need for protracted and expensive litigation and adjudication of the 

factual and legal issues that would otherwise further deplete the limited funds of the Debtors.

The Settlement Agreement is fair because it results from arm’s length 

negotiations lasting over a year among the settling parties. Numerous drafts were exchanged and 

negotiated. Moreover, the public comment process has ensured that the procedural fairness 

requirement is satisfied. Cf. Davis, 261 F.3d at 23 (noting lodging and publication as factors 

bearing on procedural fairness).

Also, the Settlement Agreement is a substantively fair compromise of the Debtors’ 

liabilities that considered the litigation risks and possible outcomes of proceeding to estimation 

hearings or other litigation. See Akzo, 949 F.2d at 1436 (among the factors determinative of 

substantive fairness are “the possible risks involved in the litigation if the settlement is not 

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approved.”). The compromise at any given site, therefore, generally reflects the litigation risk 

associated with the inherent difficulty of proving future cleanup costs on the basis of incomplete 

site investigation and cleanup action selection. The settlement amounts therefore fairly account 

for the fact that the Government has incomplete information and/or has not concluded the 

administrative process to decide on a cleanup approach at certain sites. See id. at 88 (noting that 

among the “frequently encountered reasons for departing from strict formulaic comparability are 

the uncertainty of future events and the timing of particular settlement decisions.”); cf. Sun Co., 

Inc. (R&M) v. Browning-Ferris, Inc., 124 F.3d 1187, 1193 (10th Cir. 1997) (noting that in 

performing equitable allocation in the context of a contribution action between PRPs, “the total 

cleanup costs – including responsibility for “orphan shares” – will be equitably apportioned 

among all the PRPs, with the court being able to consider any factors it deems relevant.”); 

Morrison Enterprises v. McShares, Inc., 302 F.3d 1127, 1135 (10th Cir. 2002); Pinal Creek v. 

Newmont Mining Corp. 118 F.3d 1298, 1303 (9th Cir. 1997) overruled on other grounds by

United States v. Atlantic Research Corp., 551 U.S. 128 (2007); Centerior Service Co. v. ACME 

Scrap Iron & Metal Corp., 153 F.3d 344, 354 n.12 (6th Cir. 1998), overruled on other grounds by

Atlantic Research Corp., 551 U.S. 128; Vine Street LLC v. Keeling, 460 F.Supp.2d 728, 761 

n.129 (E.D. Tex. 2006). Thus, the proposed settlement amounts reflect compromises by the 

United States that are substantively fair because they are roughly correlated with the Debtor’s 

comparable fault, taking into account the litigation risks and additional factors described above.

The proposed Settlement Agreement is likewise reasonable because it obtains an 

appropriate amount of recovery to perform future cleanup work at the sites and/or replenish the 

Superfund by recovering significant past costs. See, e.g., Kelley, 717 F. Supp. at 518. 

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Moreover, it avoids the cost and risks of litigation with the Debtors that would otherwise eat up 

the estate’s limited assets. See United States v. BP Exploration & Oil Co., 167 F. Supp. 2d 1045, 

1053 (N.D. Ind. 2001); United States v. Kramer, 19 F. Supp. 2d 273, 286-87 (D.N.J. 1998). 

Lastly, the proposed Settlement Agreement is consistent with CERCLA because it 

conserves resources for cleanup rather than for litigation and appropriately places the fair burden 

of the cleanup costs on the party that contributed to the hazardous waste problem rather than on 

the tax-paying public. See Wallace, 893 F. Supp. at 636; Kelley, 717 F. Supp. at 518; Bell 

Petroleum, 3 F.3d at 897; See also In re Eagle-Picher Industries, Inc., 197 B.R. 260, 272 (Bankr. 

S.D. Ohio 1996) (noting that bankruptcy settlements are beneficial to all concerned because they 

provide for recoveries and thereby reduce the liability of other parties in a manner that might not 

otherwise be achieved). 42 U.S.C. 9613(f)(2).

B. The Settlement Agreement is in the public interest and the comments and objection have 

not provided any reason for disapproval.

The proposed Settlement Agreement is consistent with the goals and purposes of 

CERCLA and it secures environmental benefits that are in the public interest. The Debtors will 

pay to the United States a total of $15,358,174.00 in stock on our allowed claim for 

environmental liabilities that are alleged in the Proof of Claim. 

Three public comments and an objection were received on the Settlement Agreement. 

The Schnitzer objection to and public comment on the proposed settlement have been 

withdrawn. The comment from Jill Mosteller concerning a former “recommended reserve

amount” is no longer relevant in light of the settlement. Finally, APU provides no justification 

for limiting EPA’s discretion in distributing settlement proceeds to “PRPs or EPA to conduct or 

finance future response actions at or in connection with the Site.” See Attachment D at 3. The 

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settlement proceeds will be deposited in a Site-wide Special Account for use at the Sauer Dump 

Site. This is consistent with CERCLA Section 122(b)(3), 42 U.S.C. 9622(b)(3), and EPA 

Guidances on the retention of settlement proceeds in special accounts. 

The United States has not received any other comments or objections to the Settlement 

Agreement. The settlement clearly achieves public benefits while avoiding extensive litigation. 

It saves substantial time and resources for the parties as well as the Court. After due 

consideration of the comments, nothing about the proposed settlement can be construed to 

suggest that this settlement is not in accordance with the goals of CERCLA nor the public’s 

interest. Accordingly, the Court should enter the Settlement Agreement.

VI.

After due consideration, the United States continues to believe that the proposed 

Settlement Agreement, which has been signed by all of the parties

CONCLUSION

6

, is fair, reasonable and in the 

public interest. For the foregoing reasons, the plaintiff United States respectfully requests that 

the proposed Settlement Agreement be approved and that the Court enter the revised proposed 

order attached to this memorandum.

 

6 The settling parties are: Debtors; the United States; the Operating Industries Steering Committee (listed in Exhibit 

A to the Settlement Agreement); the JIS Performing Party Group (listed in Exhibit B to the Settlement Agreement); 

Carolina Power & Light Company d/b/a Project Energy Carolinas, Inc.; PCS Phosphate Company, Inc.; and 

Consolidation Coal Company. 

Case 3:14-cv-01772-MO Document 33-35 Filed 04/10/15 Page 16 of 17 Case 09-10235-BLS Doc 8858 Filed 12/20/10 Page 15 of 16
16

Respectfully submitted,

Robert G. Dreher

Acting Assistant Attorney General

Environment and Natural Resources

 Division

Bruce S. Gelber, Chief

Environmental Enforcement Section

Environment and Natural Resources

 Division

/S/ Elliot M. Rockler_____________

Elliot M. Rockler

Stacy D. Coleman

Environmental Enforcement Section

U.S. Department of Justice

P.O. Box 7611

Ben Franklin Station

Washington, D.C. 20044

(202) 514-2653 

David C. Weiss

United States Attorney

District of Delaware

Ellen W. Slights

Assistant United States Attorney

1201 Market Street

Chemical Bank Plaza

Suite 1100

P.O. Box 2046

Wilmington, DE 19899-2046

(302) 573-6277

OF COUNSEL:

DAVID SMITH-WATTS

Attorney-Advisor

U.S. Environmental Protection Agency

Ariel Rios Building

1200 Pennsylvania Avenue, NW

Washington, DC 20460

Case 3:14-cv-01772-MO Document 33-35 Filed 04/10/15 Page 17 of 17 Case 09-10235-BLS Doc 8858 Filed 12/20/10 Page 16 of 16