MICHIGAN (From news reports) -- Georgia-Pacific waited far too long to sue International Paper and Weyerhaeuser for contribution to the massive costs it faced in cleaning up an 80-mile Superfund site along the Kalamazoo River in southwestern Michigan, a federal appeals court held Monday.
The 6th U.S. Circuit Court of Appeals said Georgia-Pacific's 2010 lawsuit was time-barred because its own liability had been established in a separate lawsuit against other companies in 1998, even though the damages were unknown at that point.
In a case of first impression for the federal appellate courts, the 6th Circuit found that a "bare declaratory judgment" of Superfund liability is enough to trigger the law's three-year statute of limitations on contribution lawsuits.
"True, GP did not yet have a bill in hand for response costs or damages" in 1998, but it "had received the responsibility to pay for 'as-yet-unfinished' remedial work," Circuit Judge Karen Nelson Moore wrote for the court, joined by Circuit Judges Raymond Kethledge and Bernice Bouie Donald. "The 1998 declaratory judgment on liability therefore started the contribution clock ticking."
GP, International Paper and Weyerhaeuser and their attorneys did not immediately respond to requests for comment on Monday.
According to the 6th Circuit, the U.S. Environmental Protection Agency put the Kalamazoo River on the National Priorities List in 1990 due to the "proliferation of PCBs" from paper-mill operations there - especially the recycling of carbonless copy paper. GP quickly entered a consent agreement with the state of Michigan.
In 1995, GP and two other paper companies filed suit against Rockwell, Eaton, and other area businesses, seeking a declaration that they were also at fault. However, the judge found GP liable in 1998.
Over the next decade, GP entered several more consent decrees with the state and EPA before filing suit against International Paper and Weyerhaeuser in federal court in Grand Rapids in 2010.
In 2018, Chief U.S. District Judge Robert Jonker ordered International Paper to contribute about 15%, and Weyerhaeuser about 5%, toward the $50 million that GP had spent between 2007 and 2014, and to share later costs for any "response activities for the (National Priorities List) Site" in an amount to be determined.
The 6th Circuit reversed the 2018 judgment on statute of limitations grounds, but agreed that GP can still sue for "costs that fall outside of that judgment."
However, "the judgment's breadth suggests that identifying such costs will prove difficult in practice," the panel warned.
The case is Georgia-Pacific Consumer Products et al. v. Weyerhaeuser Co et al, 6th U.S. Circuit Court of Appeals, No. 18-1806.
For Georgia-Pacific: Michael Shebelskie and George Peter Sibley III of Hunton Andrews Kurth
For Weyerhaeuser: Mark Schneider and Margaret Hupp of Perkins Coie
For International Paper: John Parker and Ryan Fischbach of BakerHostetler