OfficeMax Pays Georgia-Pacific $15M For Polluted Lumber Mill Cleanup

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OfficeMax Pays Georgia-Pacific $15M For Polluted Lumber Mill Cleanup

 user admin 2014-10-02 at 11:02:21 am Views: 494
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    OfficeMax Pays Georgia-Pacific $15M For Polluted Lumber Mill Cleanup
    OfficeMax Pays Georgia-Pacific $15M For Calif. Mill Cleanup
    By David Siegel
    Law360, New York (September 30, 2014, 12:14 PM ET) — Georgia-Pacific LLC and OfficeMax Inc. asked a California federal judge on Monday to approve a $14.75 million settlement resolving a dispute over responsibility for cleanup costs at a polluted lumber mill that bars any future claims against OfficeMax based on the facts alleged in the suit.

    The two companies urged U.S. District Judge William H. Orrick to approve the settlement, which stipulates the dismissal with prejudice of all claims and counterclaims and includes a “bar order” protecting OfficeMax from any future related claims, regardless of whether they are brought under the Comprehensive Environmental Response, Compensation and Liability Act or or or any other federal or state statute or common law. OfficeMax is required to make a payment of $14.75 million to Georgia-Pacific.

    Under the agreement, OfficeMax denies that it is liable to Georgia-Pacific under CERCLA or otherwise. Georgia-Pacific had alleged that OfficeMax’s 88-year operation of the mill resulted in the release of a range of hazardous substances onto the site.

    “Georgia-Pacific and OfficeMax have agreed that OfficeMax’s payment can and should ‘buy peace’ for OfficeMax,” the joint motion states.

    The agreement follows mediation efforts in San Francisco before retired U.S. District Judge Layn R. Phillips, now a partner at Irell & Manella LLP, according to the joint motion.

    The mill site, which occupies more than 400 acres of California coastland, began operations in 1885 under Union Lumber Co. After developing a substantial lumber mill on the property, Union Lumber merged in 1968 with Boise Cascade Corp., which eventually became OfficeMax, according to the company.

    Georgia-Pacific acquired the site in 1973 for $18 million, and shut it down in 2002. It is currently unoccupied save for a small Georgia-Pacific office and a water treatment plant run by the city of Fort Bragg, according to Georgia-Pacific.

    The company began investigating environmental concerns at the site in 2004, and that investigation was taken over by the California Environmental Protection Agency's Department of Toxic Substances Control in 2006. The DTSC subsequently hit Georgia-Pacific with a remediation order demanding cleanup of the site, according to the complaint.

    Georgia-Pacific launched the suit in May 2012, claiming that it and OfficeMax's predecessors contributed to the release of hazardous substances at the site, including metals, dioxins, polycyclic aromatic hydrocarbons and petroleum hydrocarbons, but that it alone has been stuck with the $31.4 million cleanup tab, with significant additional costs likely to come.

    OfficeMax moved to dismiss the suit in 2013, claiming that Georgia-Pacific purchased the site for $18 million in 1973 under a deal that allocated future risks, liabilities and obligations at the site to the buyer as of the closing date.

    In rejecting that bid, Judge Orrick said OfficeMax had failed to meet its burden showing that Georgia-Pacific lacks evidence to support its claim.

    Georgia Pacific and OfficeMax said in their motion that they asked the city of Fort Bragg, a defendant in the case, to consent to the proposed agreement but have not yet received a decision. The parties’ proposed order granting approval of the settlement contemplates the city not objecting to the agreement.

    Jen Ruppert of Bassi Edlin Huie & Blum LLP, the firm representing the city of Fort Bragg, told Law360 that the City Council will meet Tuesday night to discuss the settlement, and that she couldn’t comment before then. She noted that under the proposed settlement, Fort Bragg will not be required to pay any portion of the cleanup costs or damages.

    A hearing on the motion is scheduled for Oct. 15 before Judge Orrick.

    Attorneys for Georgcia-Pacific and OfficeMax did not respond Tuesday to a request for comment.

    Georgia-Pacific is represented by Hunton & Williams LLP.

    OfficeMax is represented by Lewis Brisbois Bisgaard & Smith LLP.

    The City of Fort Bragg is represented by Bassi Edlin Huie & Blum LLP.

    The case is Georgia-Pacific LLC v. OfficeMax Inc. et al., case number 3:12-cv-02797, in the U.S. District Court for the Northern District of California.

    –Additional reporting by Gavin Broady. Editing by Richard McVay.