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P.H. Glatfelter Co. v. Windward Prospects Ltd.

United States Court of Appeals, Seventh Circuit

January 31, 2017

P.H. Glatfelter Co., Plaintiff-Appellant/Cross-Appellee,
Windward Prospects Ltd., Defendant-Appellee/Cross-Appellant.

          Argued January 19, 2017

         Appeals from the United States District Court for the Eastern District of Wisconsin, Green Bay Division. No. 15-MC-46 - William C. Griesbach, Chief Judge.

          Before Flaum, Manion, and Williams, Circuit Judges.

          Flaum, Circuit Judge.

         These three appeals arise out of a discovery dispute between P.H. Glatfelter Co., a paper manufacturer, and Windward Prospects Ltd., an English company on which Glatfelter served a non-party subpoena. Two of the appeals are taken by Glatfelter from the district court's orders denying both Glatfelter's motion to compel responses to its subpoena and Glatfelter's motion for reconsideration. The third appeal, which we treat as a cross-appeal, was taken by Windward to seek an award of fees and costs under Federal Rule of Civil Procedure 37. For the reasons that follow, we dismiss all three appeals for lack of jurisdiction.

         I. Background

         The present appeals are ancillary to an ongoing multiparty effort to clean up polychlorinated biphenyls (PCBs) in the bed of the Lower Fox River in northeastern Wisconsin. See generally United States v. P.H. Glatfelter Co., 768 F.3d 662, 665-67 (7th Cir. 2014); NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 686-89 (7th Cir. 2014); United States v. NCR Corp., 688 F.3d 833, 835-36 (7th Cir. 2012). From the mid-1950s through the 1970s, several paper mills and a coating plant discharged wastewater containing PCBs into the Lower Fox River. By 1979, when the EPA banned PCB use, approximately 250, 000 pounds of PCBs had been released into the river bed. Beginning in the 1990s, the EPA and the Wisconsin Department of Natural Resources began investigating the contamination to develop a cleanup plan under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The EPA's final plan, adopted in 2002, proposed a cleanup proceeding in stages through a combination of dredging and capping at various sites.

         The remediation cost for the Lower Fox River is estimated to be approximately $700 million. See, e.g., P.H. Glatfelter Co., 768 F.3d at 667. Under CERCLA, the obligation to pay for the cleanup falls on the parties responsible for creating the hazard, and potentially responsible parties (PRPs) may be liable for the full costs of remediation. Paper manufacturers NCR Corporation and Appvion, Inc. were named by the EPA as PRPs and have funded the ongoing cleanup. Other companies with a potential role in the discharge of PCBs, including Glat-felter, also were named as PRPs and agreed to perform remedial work.

         In late 2007, the EPA issued a unilateral administrative order directing the PRPs to begin remedial work in the last four operable units of the Lower Fox River. NCR and Appvion undertook many of those remedial efforts. They then sued other PRPs, including Glatfelter, in the Eastern District of Wisconsin, seeking to recover the cleanup costs and to require other PRPs to pay for future remedial work.[1] The district court initially ruled on summary judgment that NCR and Appvion were not entitled to any equitable contribution from the other paper mills involved. In 2014, we reversed and remanded the cost recovery action back to the district court. See NCR Corp., 768 F.3d at 687, 689-90, 713. That action remains pending, with Appvion seeking recovery against Glatfelter and other PRPs for the Lower Fox River cleanup costs Appvion has incurred, in addition to subrogation and declaratory relief.

         Windward is an English entity allegedly conducting Ap-pvion's defense of CERCLA claims and managing Appvion's responsibility for the Lower Fox River cleanup operations. Windward ratified the commencement of the cost recovery action by Appvion and has stated that Windward will be bound by the result. To defend against Appvion in the cost recovery action, Glatfelter sought discovery relating to Appvion's costs from both Appvion and Windward. Glatfelter contends that identifying those costs (and any potential offsets from insurance, settlements, or indemnification payments) depends on understanding how funds changed hands between Appvion and its insurers or indemnitors, including Windward.

         Glatfelter first attempted to obtain discovery from Windward through Appvion, which refused to accept service on Windward's behalf. Glatfelter next sent a copy of its discovery request by certified mail to Windward's counsel at his home office in New Hampshire. He returned the envelope unopened. Glatfelter then filed a motion to compel responses to its discovery requests in the Eastern District of Wisconsin. The district court denied the motion, ruling that Windward's ratification of Appvion's action did not, on its own, give Glatfelter an independent right to seek discovery from the former under Federal Rules of Civil Procedure 33 or 34, but that there are other ways to obtain discovery from non-parties.

         Glatfelter next issued a subpoena to Windward at its attorney's New Hampshire address. Windward's counsel informed Glatfelter that Windward would not be making any production because it was not subject to the jurisdiction of the United States federal courts. Windward also objected to the subpoena to the extent that it sought documents or information available from another more convenient, less burdensome, or less expensive source (i.e., Appvion).

         Glatfelter then instituted this ancillary proceeding in the District of Massachusetts, [2] seeking to compel Windward to respond to the subpoena. Glatfelter also simultaneously moved under Rule 45(f) to transfer the case to the Eastern District of Wisconsin, where the cost recovery action was pending before Judge Griesbach, who had presided over the case since it was first filed. Following a hearing, the magistrate judge in Massachusetts ordered a transfer to the Eastern District of Wisconsin, and the ancillary action was docketed before Judge Griesbach. After receiving additional arguments and evidence, he denied the motion to compel, concluding that the court lacked personal jurisdiction over Windward and that Glatfelter had not established which documents it sought that were not already subject to production by Appvion. Glatfelter filed a motion for reconsideration, which the district court also denied.

         Glatfelter appealed the district court's denial of its motions, and Windward filed a third appeal regarding fees, which we treated as a cross-appeal. In our order dated July 25, 2016, we directed that Windward's cross-appeal be taken with the other appeals, ...

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