Beveridge & Diamond

Natural Resource Damages Liability

Understanding Trustee Authorities, Relationships, and Restoration Needs

Our client received a notice in 1994 from the U.S. Fish and Wildlife Service that it and others were potentially liable under the Comprehensive Environmental Response, Compensation, and Liability Act (Superfund) and the Clean Water Act for natural resource damages (NRD) arising from historical PCB releases to the Lower Fox River and Bay of Green Bay from paper recycling and production.

The federal trustees (and two local Indian tribes) subsequently released a Restoration Compensation and Determination Plan (RCDP) suggesting that the paper companies were responsible for $176 to 330 million in resource restoration costs, and EPA and the State of Wisconsin issued two Records of Decision calling for hundreds of millions of dollars of remedial dredging in the river.

From the outset, we worked with our client to develop and implement long-term strategies to address these potential liabilities. We began early discussions with the state concerning its role as a natural resource trustee that resulted in a draft consent decree to settle the state's potential NRD claims against our client. We also negotiated an administrative order with EPA and the state to undertake a "time critical" dredging project in which other companies declined to participate.

As a result of the "state only" proposed NRD settlement and our client's other work agreements at the site, we subsequently were able to negotiate a settlement with the federal, tribal, and state natural resource trustees to resolve all NRD claims against our client associated with the river and bay, at an estimated cost of $12.5 million. The court's opinion approving the decree can be found at 313 F. Supp. 2d 902 (E.D. Wis. 2004). To date, no other company has been able to resolve its potential NRD liability for the site. Remedial design activities and associated negotiations are ongoing.