United States Senate
Committee on Environment and Public Works
Subcommittee on Transportation,
Infrastructure, and Nuclear Safety
Testimony of Dan Guttman
Price-Anderson Act Reauthorization
January 23, 2002
My name is Dan Guttman, My work address is
1155 15th Street, N.W., Suite 410; telephone no. 202-638-6050;
email: dan@dguttman.com. Thank you for the
opportunity to appear before you today.
I am an attorney in private
practice. I am a Fellow at the Washington Center for the Study of American
Government at Johns Hopkins University and of the National Academy of Public
Administration.
I appear on my own behalf as a citizen, but am privileged to draw on experience
relating to the operations of
nuclear power plants, the nation=s nuclear weapons complex, and Cold War related exposures of citizens,
nuclear weapons workers and Aatomic veterans@ to radiation risk.[1]
Summary
In the interim since the 1988 Price-Anderson Act amendments, Federal
court decisions construing the law, electric utility industry restructuring,
and inquiries and enactments treating revelations of Cold War era radiation
exposures to citizens, soldiers, and nuclear weapons workers have highlighted
issues which merit attention in current Congressional consideration of the
Price-Anderson Act. This testimony will seek to identify some of these
questions, which, of course, are now framed by the events of September 11,
2001.
Courts have agreed that the 1988 Price Anderson Act Amendments
fundamentally restructured the law by: (1) creating a federal cause of action (Apublic liability@) for claims related to nuclear incidents;
where such claim exists, state law based claims on the facts are, with limited
exception, precluded; [2]
(2) providing that the legal principles, or rules of decision, for determining
public liability are rooted in state law. However, in the context of this
agreement, and with further developments since 1988 in mind, issues that
warrant current attention include:
(1) What conduct will trigger, and require, Price Anderson Act
jurisdiction?
Court decisions call into
question: (a) whether the Act covers conduct that is intentional (as well as
conduct that is accidental); (b) whether the Act requires that the defendant(s)
be party to an indemnification agreement with the government; (c) whether the
Act reaches into disputes regarding common commercial products; for example,
watch dials.
Congress may wish to resolve conflicts or misunderstandings on the
basis for, and scope of, Price-Anderson Act jurisdiction raised by court
decisions.
(2) Are Acts of Terrorism Covered by the Act?
The
Price Anderson Act (through the definition of Apublic liability@) excludes claims Aarising out of acts of war,@ raising obvious questions about the Act=s coverage of damage and injuries stemming from acts of terrorism.
Congress may wish to consider whether the Price-Anderson Act should be
amended to expressly address terrorist acts. Does Congress intend to cover Aacts of terrorism?@ If so, is the current statutory wording
clear enough to embrace this intent? If the intent is not to cover nuclear
accidents caused by acts of terrorism, how will they be covered? Assuming the
intent is to cover such acts, what kind of finding or declaration will be
required to trigger the Act --- and who shall be empowered to make this
finding?
(3) Will The Retrospective Unit Owner Funding Required by the Act be
Available in the Deregulation Era?
The Act relies on nuclear unit owners to make
Aretrospective@ (i.e., post-accident) contributions where the initial tier of
insurance is exhausted by an accident. Under the Act=s present terms, and given the current number
of operating units, this obligation may be in the range of $80-90 million per
unit -- or over $ 9 billion dollars. The Aretrospective@
nuclear plant owner obligation, in short, is relied on to provide the lion=s share of funding for relief in a major
accident.
Since 1988, the utility
industry has undergone profound restructuring, hallmarked by nuclear unit
divestitures, corporate restructuring, and the consolidation of nuclear unit
ownership. This restructuring, particularly when coupled with the well-known
financial difficulties of major California utilities and Enron, raises
questions about the premises of
retrospective funding. The basic concern was identified in the NRC=s 1998 Price-Anderson report to Congress, and
it has just been underscored by a December, 2001 GAO report, which found that
NRC reviews of license transfer applications did not provide adequate assurance
that new corporate owners will have sums needed to provide for future
decommissioning costs.
Indeed, the form restructuring is taking may render the public
particularly vulnerable to funding shortfalls. As the GAO report observed,
nuclear units are being consolidated under a limited number of Afleet@ owners. This consolidation may yield important benefits in safety,
reliability, and accountability. On the other hand, consolidation of ownership
raises the possibility that the owner may have to bear retrospective payment
burden measured in the hundreds, not tens, of millions, and the further
possibility that the ripple of effects of an any nuclear accident on any
utility system may cause cross-the-board unit shutdowns that will leave the Afleet@ owner without revenue sources to pay retrospective commitments.
Congress should act to assure that industry restructuring does not come
at the cost of the integrity of the Act=s funding, whether by assuring that
NRC license transfers provide for the needed commitments, specifying
particular commitments (e.g., prepayment or reserve for Price Anderson
obligations as condition for license transfer), or providing for a review and
further steps thereafter.
(4) Should There be Clear and Consistent Treatment of Willful or
Reckless Misconduct?
Potential liability for
willful or reckless misconduct appears to differ depending upon whether the
actor is a NRC licensee, a Department of Defense contractor, or a Department of
Energy contractor. In the first case, courts have indicated that actors may, to
some degree that itself may benefit from clarification, be liable for punitive
damages; in the second case, procurement rules provide for limitation on
indemnification in the case of willful misconduct, in the third case there is
no evident limitation on indemnification.
Congress may wish to consider
whether there is reason for the differing set of rules and, if not, to provide
for a clear and consistent set.
(5) When Should State Established Duty(ies) of Care be Preempted?
Courts agree that the 1988
Amendments create a federal cause of action that is rooted in state law rules
of decision, but have generally held that the duty of care owed by
Price-Anderson defendants is that stated in Federal dose exposure regulations, to the exclusion of state law
duty of care standards.
Congress may wish to consider
whether this exception to the Act=s reliance on state standards is warranted, particularly where the
state standard may supplement, but not conflict with, the federal standard of care.
(6) What is the Burden of Proof to Show Causation of Injury Where
Records are Inadequate?
In order to obtain Price-Anderson compensation, an individual may need
to show not only that he or she was exposed to radiation hazard and that he is
now sick, but also that the exposure caused the sickness. The difficulties of
determining that harm to a specific individual (e.g., cancer) was caused by a
specific exposure(s) to radiation are well understood, particularly when the
injury manifests itself years after the exposure. We now know that when the government (and its contractors)
exposed citizens, soldiers, and workers to radiation during the Cold War those
responsible for exposures too often failed to keep the records, and provide for
the monitoring, that might help determine cause and effect B and provide for compensation B at
years remove. In light of this new understanding, Congress and the Executive
branch have adopted the principle that where injured citizens show that they
were likely exposed to potentially injurious amounts of radiation, the
government (or contractors or further designees) bears the burden of providing
exposure and monitoring data needed to defeat claims that the injury was caused
by the exposure.
Congress may wish to consider the express incorporation into the
Price-Anderson Act of the principle that those who expose citizens to radiation
risk without providing for recordkeeping and monitoring bear the burden of
showing that their conduct is not the cause of resulting injury.
(7) Is Justice Done by Current Statutes of Limitations Provisions
Which May Preclude Recovery Where Injury is Latent for Years?
At least one court has indicated that adherence to the letter of the
Price Anderson Act required it to do injustice by dismissing a case involving
an alleged Anuclear incident@ because of the failure of the state statute
of limitations to contemplate injury from radiation exposure -- i.e., injury
that may be latent for many years before visible manifestation..
Congress may wish to revisit the workings of Price Anderson Act
statutes of limitations where state law does not adequately contemplate the
reality that some radiation injuries may be hidden for years before discovery.
1.
Jurisdictional
Requirements
1.
Is an
Indemnification Agreement a Prerequisite to the Triggering of Price-Anderson
Jurisdiction?
Is an indemnification agreement a prerequisite for the triggering of
Price-Anderson?
In Gilberg v. Stepan Co., 24 F. Supp 2d 325 (D. N.J. 1998) the
court found that the existence of a Price-Anderson indemnity agreement with the
government is key to the determination of whether a radiation release is
covered by Price Anderson.
The case dealt with alleged
contamination of the surrounding community from thorium tailings at a chemical
plant that operated from 1918 to 1956. The court noted that the Atomic Energy
Act authorized the NRC to license the production and possession of nuclear
materials. Price Anderson did not mandate, as it does in regard to power plant
licensees, that these further licensees be subject to assured pools of
coverage. The Stepan court concluded that an Aoccurrence@, under the definition of Anuclear incident,@ Acan only be an event at the location of or
the contract location as those terms are defined as an applicable indemnity
agreement.@ In the absence of such agreement, the court
found, Price Anderson does not apply.
The Court explained:
While
it is true that any thorium or thorium tailings at the facility may have been
the subject of AEC or NRC licenses for source and/or byproduct
materials...licenses for these types of materials have never been subject to
Price-Anderson=s financial protection provisions. Therefore,
neither the AEC nor the NRC would have entered into an indemnification
agreement covering activity conducted under such licenses. In the absence of an
indemnification agreement, entered into under 42 U.S.C. Section 2210 and
covering the activities which give rise to the liability alleged, there can be
no Aoccurrence,@ that is no event at the site of Alicensed activity@ that would constitute a Anuclear incident.@ Without a nuclear incident, there is no claim for public liability,
and without a claim for public liability there is no federal jurisdiction under
Price-Anderson.[fns. Omitted]
Stepan=s conclusion was embraced in Heinrich v.
Sweet, 62 F. Supp. 2d 282 (D.Mass. 1999), which involved claims related to
human radiation experiments conducted by doctors and universities under Atomic
Energy Commission contract.
However, Stepan=s conclusion has
been rejected elsewhere,[3] including at least one case -- Carey v.
Kerr-McGee, 60 F. Supp 2d 800 (N.D. Ill. 1999)-- which followed Stepan.
Carey concerned allegations of
contamination from thorium tailings at Kerr-McGee=s West Chicago plant. Plaintiffs argued that for Price Anderson to
apply there had to be a release of radioactive material from a facility which
is both (a) licensed by the NRC and (b) covered by an indemnification agreement
with the NRC. Because the facility, while subject to certain licensing, was not
signatory to an indemnification agreement, plaintiffs contended that there was
no Aoccurrence,@ as provided for by the Act and therefore it did not apply. The court,
noting that the Act does not define occurrence, looked to Webster=s dictionary and found that an occurrence had
been alleged.
2.
Is Intentional, in Addition to Accidental,
Conduct Covered by the Act?
In re Cincinnati Radiation Litigation, 874 F Supp 796, 830-832 (SD Ohio 1995) involved claims of injury
caused by human radiation experiments conducted by government supported experimental
treatments of cancer patients. The court found that a Apublic liability@ claim requires unintended, or accidental,
conduct. Thus, even though radiation might have caused injury, there was no
Price Anderson claim. The decision explained:
While
the alleged conduct of the experiments and the alleged failure to inform the
subjects of the experiments may be reprehensible, the operation of the
Teletherapy Unit was an application of nuclear medicine. Thus, in this case the
nuclear source at issue was employed as intended and cannot give rise to a
claim under the Price-Anderson Act. Moreover, liability under the
Price-Anderson Act turns on the existence of a Anuclear incident,@ which does not occur when there is no unintended escape or release of
nuclear energy.
See also McCafferty v. Centerior Service Company, 983 F. Supp. 715 (N.D. Ohio 1997) (Aall of Plaintiffs claims which arise as a
result of their unintended exposure to radiated materials are preempted by the
Amendments Act, and must be analyzed for inconsistencies with that legislation.@)
In a subsequent human radiations experiment decision, Heinrich v.
Sweet, 62 F. Supp. 2d 282 (D. Mass. 1999), the court determined that
Price-Anderson jurisdiction was not governed by the intentionality of the
conduct, but by whether the alleged conduct is subject to an indemnification
agreement. Responding to the decision in In re Cincinnati Radiation
Litigation, the court explained:
Several
reported cases, however, appear to undermine this interpretation of the
statute. See Day v. NLO Inc., 851 F. Supp. 869 (S.D. Ohio 1994)(Act
applies to claims of occupational exposure to radiation not alleged to have
been caused by accidental release); Sawyer v. Commonwealth Edison Co.,
847 F. Supp. 96 (N.D. Ill. 1994) (Act applies to claim for injuries resulting
from alleged ongoing occupational exposure); Coley v. Commonwealth Edison
Co., 768 F. Supp. 625 (N.D. Ill. 1991)(same); Building and Constr.
Trades Dep=t
v. Rockwell Int=l, 756 F. Supp. 492 (D. Colo. 1991) (Act
applies to intentional and tort claims related to occupational exposure.) [4]
Following the analysis in Stepan, as discussed above, the Heinrich
court held that the determinative issue was not intentionality, but
indemnification.
3.
Is Price
Anderson Coverage Commensurate with the Use of Atomic Energy, or NRC Licensing
Jurisdiction?
Some courts appear to find that Price-Anderson jurisdiction broadly
attaches to activities that are, or may be, within NRC jurisdiction.
Kerr-McGee Corp. v. Farley, 115 F. 3d 1498 (10th Cir. 1997), cert. denied,118
S. Ct. 880 (1998) involved Navajo Tribal Court jurisdiction over a claim that
tribe members had been injured by exposure to radioactive and toxic materials
released from a Kerr-McGee facility on land leased from the tribe. Those
alleging injury claimed that because there was no indemnification agreement,
Price-Anderson jurisdiction did not apply (and, therefore, there was no
question of whether the case had to be in Federal court, not tribal court). The
court rejected the claim:
Nothing
in [the Supreme Court=s Silkwood
decision] suggests that the absence of an indemnity agreement makes
[the Act=s] jurisdictional provisions inapplicable.
Furthermore, as quoted...the jurisdictional provisions of [the Act], as amended
by the 1988 Amendments, appear broad enough to create a federal forum for any
tort claim even remotely involving atomic energy production.
Gassie v. SMH Swiss Corp., 1998 U.S. Dist. Lexis 2003 (E.D. La. Feb. 17, 1998) was a class
action claiming injury from the leak of tritium (a radioisotope used to produce
luminescence) from Swatch watches. The defendant was an NRC licensee. The Court
found that the claim was a public liability claim arising out of a nuclear
incident B and, under Price Anderson, therefore subject
to removal from state to Federal court and treatment under the Act:
Although
the words Aany nuclear incident@ were employed by Congress to convey the
broad scope of the jurisdictional grant, there is little support in the
legislative history or in other legal precedent for the idea that a products
liability case, such as the one Plaintiffs have filed in this one, to conclude
that the leaking of tritium from Swatch Watches constitutes a nuclear incident
in terms of the Price-Anderson Act. However, there is also little support to
negate Defendants=
argument that Plaintiffs= claims constitute a public liability action arising from a nuclear
incident. In fact, the unambiguous words of the Price-Anderson Act indicate
that Plaintiffs= claims do constitute a public liability
action arising from a nuclear incident.
The court concluded that Price-Anderson would apply to tritium leaks
from watches, unless Plaintiffs could establish (which the court found they did
not) that the NRC permitted regulatory control of byproducts to be assumed by
the State ( Louisiana in the case at hand).
II Post September 11: Are Acts of Terrorism Covered by the
Act, or Are they Excluded as AActs of War@?
After September 11, there is obvious need to consider the applicability
of Price-Anderson to nuclear incidents stemming from terrorist activity. It is
not clear whether, and under what circumstances, the Act would cover damage and
injury resulting from terrorist conduct.
The Act=s definition of Apublic liability@ excludes Aclaims arising out of an act of war.@ See 42 U.S.C. Section 2014(w)(ii).
Thus, depending on the definition of AActs of War,@the
Price-Anderson Act may include or exclude the consequences of terrorist
activity.
Congress should consider whether it wishes to revisit the Aacts of war@ exclusion, to provide clarification of what is intended in light of
recent events. For example:
Does Congress intend that the Aacts of war@ exclusion is also intended to exclude Aterrorist@
conduct? If so, does the Act currently make this clear? If Congress intends the
Act to provide for terrorist accidents, does the current language make that
clear? Where there is uncertainty about particular Aterrorist@ conduct, who (e.g., Congress and/or the Executive or the court) will
be responsible for determining the scope of the exclusion, and by what means
(e.g., Presidential directive, NRC review)? In the absence of clarification,
the answers to such questions may fall by default to the courts, which would
plainly benefit from Congressional guidance.
III. Is The Act=s Reliance on Retrospective Funding Reliable
in Light of Utility Industry Restructuring?
Retrospective premium payments comprise the lion=s share of potential funding in the case of a
severe accident. Given current industry deregulation, there is need to assure
that these payments will be available if needed.
Price-Anderson creates a two-tier system to provide funding to the
current liability limit of approximately $9.4 billion. Pre-paid private
insurance set at $200 million is to be supplemented by retrospective deferred
payments on each unit in the event of an accident requiring additional sums.
The deferred payments are based on a formula where reactor owners each provide
an equal amount per unit per accident to the limit of $9.4 billion. (For
example, assuming 110 reactors are operating, a per unit payment of $83.9
million would yield $9.23 billion).
At the time of the 1988 Amendments, the landscape was still dominated
by vertically integrated utilities with names that likely incorporated the name
of the locality or region long served.
Since 1988, names and corporate structures have changed beyond ready
recognition. Some vertically integrated utilities have divested themselves of
nuclear units, others have sought to build fleets of units, and new entrants
into the business have considered purchasing units. Moreover, as experiences in
California and with Enron show, the once unthinkable prospect of the bankruptcy
of a purveyor of electric Autility@service has now become quite thinkable.
In theory, the NRC will assure the continued adequacy of funding
through reviews conducted in the transfer of unit licenses to new owners. In
December 2001 the General Accounting Office (AGAO@) reported on the adequacy of NRC oversight
of decommissioning funding in the restructuring environment.[5]
The GAO found that Afor the most part@ NRC reviews of new owners= financial qualifications Aenhanced the level of assurance that they
will safely own and operate their plants in the deregulated environment.@ (Report, at 6).However, the GAO found
substantial basis for concern that financial reviews may not be adequate where
the transfer is not predicated on the precomittment of the amounts potentially
required. Thus, in the case of the NRC review of a merger that has yielded the
nation=s largest Afleet@ of nuclear units, the GAO found (report at
6):
The
new owner did not provide, and the NRC did not request, guaranteed additional
sources of revenue above the market sale of its electricity, as other new
owners had. Moreover, NRC did not document its review of the financial
information B including revenue projections, which were
inaccurate B that the new owner submitted to justify its
qualifications to safely own and operate 16 plants. [[6]]
The GAO concluded (at 34):
NRC=s inconsistent review and documentation of
license transfer requests creates the appearance of different requirements for
different owners or different types of transfers...While its standard review
plan offers a sound basis for obtaining consistency, NRC is clearly not
consistently achieving the desired results.
Moreover, the 1998 NRC report to Congress records that, even prior to
deregulation, studies showed that utilities could not be expected to Aafford@ retrospective payments in excess of $32 million (in 1996 dollars).[7]
The report pointed out that deregulation might reduce this amount further:
the current deregulatory environment, which may
lead to restructuring within the nuclear power industry, may impact the ability
of some nuclear power entities to handle a $20 million annual retrospective
premium assessment. [[8]]
Indeed, the form restructuring is taking may render the public
particularly vulnerable to funding shortfalls. As the GAO report observed,
nuclear units are being consolidated under a limited number of Afleet@ owners. This consolidation may yield important benefits in safety,
reliability, and accountability. On the other hand, consolidation of ownership
raises the possibility that the owner may have to bear retrospective payment
burden measured in the hundreds, not tens, of millions, and the further
possibility that the ripple of effects of an any nuclear accident on any
utility system may cause cross-the-board unit shutdowns that will leave the Afleet@ owner without revenue sources to pay retrospective commitments. [9]
In sum, Congress should act to ensure that industry restructuring does
not render the retrospective payment obligation=s that is at the core of Price-Anderson an illusion. In substance, as
well as form, NRC reviews of nuclear unit ownership changes must provide
assurance that the new owner(s) will be capable of making such Price-Anderson
payments as may be called for. If, as the GAO report on decommissioning funding indicates, the NRC
cannot uniformly provide this assurance, then Congress should consider
alternatives, perhaps including demonstration of guaranteed availability of
Price-Anderson funding.
IV Punitive Damages: How Should Willful or Reckless Misconduct
Be Treated?
An actor whose willful or reckless misconduct causes harm may be
treated differently depending upon whether the actor is a Department of Energy
(ADOE@) contractor, a Department of Defense (ADOD@) contractor, or an NRC licensee. In the
first case, under present laws and rules government will generally pick up the
costs of all litigation and damage paymentsBregardless of the actor=s culpability. In the latter cases, the actor who engages in willful or
reckless misconduct is on notice that it may be responsible for payments in its
own right.
The standard nuclear indemnification clause applied by DOD (under 50
U.S.C. Section 1431), provides, in part: [10]
(d)
When the claim, loss, or damage is caused by willful misconduct or lack of good
faith on the part of any of the Contractor=s principal officials, the Contractor shall not be indemnified for ‑‑
(1)
Government claims against the Contractor (other than those arising through
subornation); or
(2) Loss or damage affecting the Contractor=s property.
Thus, DOD contractors (many of whom, of course, are also DOE
contractors) are not completely off the hook for damages stemming from Awillful misconduct or lack of good faith.@
Similarly, courts have found that NRC licensees may themselves be
liable for punitive damages in cases where the sums involved are beyond those
which the Federal government is obligated to pay.
In Silkwood v. Kerr-McGee,
464 U.S. 238 (1984)-- which directly involved the question of federal
preemption of state causes of action and did not directly involve
Price-AndersonB the Supreme Court held that punitive damages
under state laws would not frustrate the federal scheme for regulation of
nuclear matters. The 1988 amendments, addressing the Silkwood decision=s provision of punitive damage, expressly
limited punitive damages.[11]
However, some post 1988 court decisions provide that punitive damages may still
be in order when, in essence, they do not come out of the government's hide.[12]
In In Re: TMI, 67 F. 3d 1119 (3d Cir. 1995), the Court of
Appeals considered the availability of punitive damages in light of the 1988
amendments. The court concluded that Ait is clear from the unambiguous language of those [1988] Amendments
that Congress did not intend to change the result the Supreme Court had reached
in Silkwood.@ The Court elaborated: The Court of Appeals
noted that in enacting the 1988 Amendments Congress Adid not hesitate@ to overturn @certain court decisions, but only partially limited Silkwood=s holding.@ The Court also reviewed the legislative history of the 1988
Amendments, finding Alucid
declarations@ of Congressional intent to allow punitive
damages.[13]
See also, Smith
v. General Electric, 938 F. Supp 70 (D. Mass.1996)(Aa claim for punitive damages may be asserted
directly against a defendant who >supplied materials or services= to a nuclear power plant so long as such an award is authorized by the
law of the forum@);[14]
Corcoran v. New York Power Authority,
935 F. Supp. 376 (S.D.N.Y. 1996)(denying motion to dismiss claims against
non-licensee because Ait is
incongruous to argue that contractors cannot be subject to suit simply because
they may be indemnified [by the licensee].@[15]
In sum, by contrast to the DOD rules and the potential for punitive
damages awaiting NRC licensees, it appears that the current operations of the
Price Anderson and procurement law may provide some deterrence (and/or post
accident punitive damages) where an NRC licensee or DOD contractor engages in
willful misconduct, but no such deterrence or relief in the case of a DOE
contractor. If this is so, what basis
is there for permitting DOE contractors to continue to be the exception to the
rule?
V. Duty of Care: Should Federal
Numerical Dose Regulations be the Duty of Care to the Exclusion of State Standards?
A predicate to recovery under tort law is a finding that the defendant
has breached its Aduty
of care.@ The majority of courts have found that the
duty of care is measured by the applicable federal numerical dose regulations,
to the exclusion of further duty(ies) of care provided by normally governing
state tort law.[16]
The exclusive application of the Federal duty of care appears to be in
conflict with underlying Price Anderson Act policy that, while federal courts
will have jurisdiction over claims arising from nuclear incidents, principles
of state law are to be applied in determining compensatory damage claims. There is obvious wisdom in assuring that
federal nuclear safety standards are not undermined by conflicting state law.
However, the question is whether this principle should govern without
consideration of whether state standards are in conflict with federal
standards.
The tension between state law
standards and federal safety standards was crystallized and addressed in the seminal
Karen Silkwood case, Silkwood v. Kerr-McGee, 464 U.S. 238 (1984), In
that case the Supreme Court permitted claims for damages, even punitive
damages, to proceed even where the Plaintiff did not claim that maximum
radiation exposure levels had been exceeded.[17] The Supreme Court observed [fns.omitted]:
Although
the Price-Anderson Act does not apply to the present situation, the discussion
preceding its enactment and subsequent amendment indicated that persons injured
by nuclear incidents were free to utilize existing tort law remedies.
***
In
sum, it is clear that in enacting and amending the Price-Anderson Act Congress
assumed that state law remedies, in whatever form they might take, were
available to those injured by nuclear incidents. This was so even though it is
well aware of the NRC=s
exclusive authority to regulate safety matters. No doubt there is tension
between the conclusion that safety regulation is the exclusive concern of the
federal law and the conclusion that a State may nevertheless award damages
based on its own law of liability. But as we understand what was done over the
years in the legislation concerning nuclear energy Congress intended to stand
by both concepts and to tolerate whatever tension there was between them....It
may be that the award of damages based on the state law of negligence or strict
liability is regulatory in the sense that a nuclear plant will be threatened
with damages liability if it does not conform to state standards, but that
regulatory consequence was something that Congress was quite willing to accept.
In the interim since the 1988 Amendments, however, courts have
generally found that federal standards govern to the exclusion of state
standards -- without need for analysis of the potential for conflict between
the two.
For example, in Roberts v. Florida Power & Light, 146 F. 3d
1305 (11th Cir. 1998), the plaintiffB a former nuclear power plant worker suffering from terminal cancer B alleged, among other things, that Florida
Power & Light (AFPL@):
unreasonably
exposed him to more radiation than was necessary, that the company did not help
him take precautionary steps, such as buying appropriate clothing, and that FPL
did not warn him of the danger of working at the plant.
The plaintiff alleged that
these failures were violations of duties owed to him under the common law of
the state of Florida. FPL successfully sought to dismiss Mr. Roberts= suit on grounds that Mr. Roberts did not
plead that the FPL plant had exceeded federally-determined radiation standards.
A related question is whether a plaintiff in a case where there is no
extraordinary nuclear occurrence determination must show that his/her exposure
exceeded the federal numerical dose limit,
In In Re: TMI, 67 F.3d 1103 (3d Cir. 1995), the court considered
whether individual plaintiffs had to show that they were exposed in excess of
the permissible level. Defendants argued that even where the defendant
admittedly violated the permissible level, each plaintiff had to show that
he/she was exposed in excess of the permissible level The court held that: Athe duty of care is measured by whether
defendants released radiation in excess of Section 20.105 or 20.106, as
measured by the boundary of the facility, not whether each plaintiff was
exposed to those excessive radiation levels.@ The court added that A[o]f course, plaintiffs must still prove causation and damages before
they may recover.@
In Roberts v. Florida Power & Light, however, as the court
of appeals summarized, the district court found that:@[s]ince there was no extraordinary nuclear
occurrence involved in this case, the district court concluded that under the
Amendments Act, the plaintiffs must allege and prove that the defendant
breached its duty of care by exposing Bertram Roberts to an amount of radiation
in excess of federally defined permissible radiation dose standards.@ This holding was affirmed by the court of
appeals: A[a]s plaintiffs have failed to allege that
FPL breached its duty of care by exposing Bertram Roberts to an amount of
radiation in excess of the permissible amount allowed by federal regulation,
they have failed to state causes of action for negligence, strict liability or
loss of consortium.@[18]
In sum, Congress may wish to consider whether state law duty of care
standards should support claims where they are not in conflict with the
numerical standards set by the Federal government.
VI. Who Bears the Burden of Proof of
Causation in the Absence of Adequate Records?
As the Cold War recedes into history, there have been new inquiries
into the radiation exposures of ACold War Veterans,@ those workers, servicemen, and further citizens who served in the
development, production, and testing of nuclear weapons. It is useful to place
the Price-Anderson scheme in the context of the findings of these inquiries,
and the evolving burden of proof principles that they have led to.
In 1995 the President=s Advisory Committee on Human Radiation Experiments reported that from
the1940's to the early 1970's numerous citizens were unknowingly exposed to
radiation risk by virtue of being made subject to human radiation experiments.
In a nutshell:[19]
1. From the 1942-43 dawn of the Manhattan Project, the government, its
contractors, and biomedical researchers were well aware that radiation posed
potential risk to weapons workers, and that such risk had to be understood and
monitored;
2. At its 1947 creation, the
Atomic Energy Commission and its contractors engaged in a long hidden policy
and practice of hiding risks from affected citizens to avoid liability and
embarrassment -- even where national security itself did not require secrecy.
The Committee recommended, and the Administration accepted, that where such
coverup occurred, research subjects (or survivors) be compensated even in the
absence of physical injury.
3. The Advisory Committee found that the hidden policy and practice of keeping secrets to
avoid embarrassment and liability applied to workers, and their communities, as
well as to experimental subjects. Ongoing disclosures show that the policy and
practice was not effectively countermanded, and continued well past
mid-century.
4. The Advisory Committee found
that government and its contractors were well aware that radiation risks might
be latent for years, with injury occurring long after exposure. However, they failed to provide for
monitoring and recordkeeping sufficient to assure that risk would be minimized
and that its dimensions could be known at years remove. This finding, recent disclosures show,
applies to weapons workers as well.
The Committee recommended, and the Administration accepted, that in
circumstances where citizens are exposed to nontherapeutic radioactive risk and
the government (and/or private entities assisting it) fail to provide or
withhold the information needed by citizens to protect themselves, there should
be a presumption of compensation where: (1) the individual can demonstrate that
he or she was present within the zone of exposure; (2) injury that is
potentially related to the exposure is shown.
The Advisory Committee=s findings and the consequence for the burden of proof were part of the
underpinnings of the fall 2000 Nuclear Workers= compensation Act.
First, the Act finds:
(2).... workers were put at risk without their
knowledge and consent for reasons that, documents reveal, were driven by fears
of adverse publicity, liability, and employee demands for hazardous duty pay
(3)
Many previously secret records have documented unmonitored exposures to
radiation and beryllium and continuing problems at these [nuclear weapons
complex cites].
Second, in light of these findings, the Act provides that, upon finding
that data is not adequate to render determinations with regard to particular
claimants the burden shifts to the government.[20]
In sum, it is well appreciated that contests over causation of
potentially radiation induced injury is often difficult, costly, and
controversial. Recent experience shows that it may be wise to give notice that
the burden of proof will be borne by those exposing citizens to radiation risk
without keeping records or providing monitoring needed to show cause and effect
at some later date.
VII. Statute of Limitations: Three years
from discovery rule for Nuclear Incidents?
At what point will Price Anderson Act claims be barred because they are
filed too late -- even where those claiming radiation related injury could not
reasonably have known of their illness and its cause at an earlier time?
In Lujan v. Regents of the U. of California, 69 F. 3d 1511, the
Plaintiff brought suit to recover for the death of her daughter, who died at 21
as the result of recurrent brain cancers experienced since she was 18 months
old. The brain cancers were alleged to result from releases from Los Alamos national
laboratory. The suit was brought six years after the death.
Following the New Mexico state rule that wrongful death actions must be
brought within three years of death, the district court dismissed the
case. The Court of Appeals recognized
that the application of the three year rule to radiation exposures was
potentially unjust, but concluded that it was dictated by Congress:
We
recognize , as did the district court, that exposure to radiation Acan occur without the slightest indication of
its presence and the effects of such exposure may lie dormant for years.@..Congress was not unaware of the potential
for injustice in cases such as this...Yet it chose not to extend the
three-years-from discovery rule to all public liability actions when it extended
federal jurisdiction to cover all such actions. It is not for us to correct
Congress= alleged oversight.
Congress may wish to assure itself that the Price-Anderson Act does not
work to prevent the bringing of otherwise meritorious claims because some state
limitations statutes may not contemplate the long term latency of radiation
risk.
This concludes my testimony. Thank you very much.
[1] The experience includes: (1) counsel to
municipally and cooperatively owned electric systems in the purchase of nuclear
power plant ownership shares and power supply, and related decommissioning
costs;(2) special counsel to Senator David Pryor in oversight of Department of
Energy contracting; (3) Executive Director, President Clinton=s Advisory
Committee on Human Radiation Experiments; (4) Commissioner, U.S. Occupational
Safety and Health Review Commission; (5) counsel, nuclear weapons workers union
(OCAW, and its successor PACE) on matters including the environmental cleanup
of the weapons complex, the privatization of the U.S. Enrichment Corporation,
and the Energy Employees Occupational Illness Compensation Act; (6) adviser to
Nye County, Nevada, on matters related to the potential Yucca Mountain
repository; (7) adviser to the special delegation to the United States of the
Chancellor of Austria regarding the Temelin nuclear power plant.
[2] For
example, the Court of Appeals for the Third Circuit stated in In Re TMI,
940 F. 2d 832 (3d Cir. 1991), cert denied, 112 S. Ct. 1262 (1992):
The
Amendments Act creates a federal cause of action which did not exist prior to
the Act, establishes federal jurisdiction for that cause of action, and
channels all legal liability to the federal courts through that cause of
action...Congress clearly intended to supplant all possible state causes of
action when the factual prerequisite of the statute are [sic] met.
[3]
Stepan notes that the vast majority of litigated cases either dealt with
indemnified facilities (e.g., power plants) or did not address the issue
of whether indemnification was a requisite to Price-Anderson jurisdiction.
Stepan addressed two prior cases, including
Kerr-McGee Corp. v. Farley, 115 F. 3d 1498 (10th Cir. 1997), cert
denied 118 S. Ct. 880 (1998) discussed below, which appeared to find
Price-Anderson jurisdiction commensurate with NRC licensing authority.
[4]
See also, Bohrmann v. Maine Yankee, 926 F. Supp. 211 (D. Maine) where the
court found that an intentional tort theory, as provided by Maine law, could be pursued under Price-Anderson. (AThere is no reason apparent to this Court to
believe that Congress intended that a defendant be insulated from liability for
intentional acts solely by complying with the federal safety standards...); Caputo
v. Boston Edison Co., 924 F. 2d 11 (1st Cir. 1991)(worker injury
claim for intentional infliction of emotional distress removed to federal court
pursuant to Price Anderson Amendment Act of 1988, dismissed for lack of factual
support).
[5] ANRC=s Assurance of Decommissioning Funding During Utility Restructuring
Could be Improved,@
GAO-02-48, December 2001.
[6] The
GAO elaborated, at page 21:
when
plant owners requested that their operating licenses for eight plants be
transferred to a contractor, NRC maintained the existing level of assurance by
continuing to hold the plant owners responsible for collecting decommissioning
funds. In addition, when NRC approved requests to transfer licenses related to
the sale of 15 plants, decommissioning funding assurances were increased
because the selling utilities prepaid all or most of the projected
decommissioning costs, and either the sellers or the new owners provided
additional financial guarantees for those projected costs that were not
prepaid. However, when NRC approved requests to transfer licenses in which the
new licensee intended to rely on periodic deposits into external sinking funds
for decommissioning, it did not always obtain the same level of financial
assurance...Among other things, NRC approved two requests to transfer ownership
of 25 plants without verifying that the new owners would have guaranteed access
to the decommissioning charges that their affiliated entities would collect.
[7] AThe Price-Anderson Act: Crossing the Bridge
to the Next Century a Report to Congress,@ Prepared by ICF Incorporated for the U.S.Nuclear Regulatory
Commission. See Appendix A.
[8] The
report explained:
The 1979 NRC
staff study determined that assessments at the $10 million level were
manageable but that problems might arise at the $20 million, and higher,
assessment levels. The 1983 Report to Congress, using financial data from 1981,
demonstrated that assessments at the $50 million level per reactor could pose
major problems for all four of the utilities and especially for the two with
more than one reactor each. It also showed how utilities began to evidence
financial distress at assessment levels ranging between $10 and $20 million.
That finding supported the 1979 NRC staff study's findings that recommended
limiting the maximum assessments to $10 million per year, because higher
assessments could cause financial distress.Using the Melicher method to
evaluate the four utilities, this analysis concludes that the maximum annual
assessment that all four utilities could afford seems to range between $20 and
$50 million. This is consistent with the previous analyses' findings concluding
that the maximum assessment level utilities could afford was between $10 and
$20 million, which equal $16 and $32 million, respectively, in 1996 dollars
when adjusted for inflation. However, the current deregulatory environment,
which may lead to restructuring within the nuclear power industry, may impact
the ability of some nuclear power entities to handle a $20 million annual
retrospective premium assessment.
[9] For
example, a Afleet@ owner may face the shutdown of much or all of its fleet if an accident
elsewhere is caused by a design flaw common to the fleet units. When nuclear
unit ownership was relatively dispersed, it might be hypothesized that
individual utilities could offset the impact of cross-the-board nuclear unit
shutdowns by generation (and related revenues) from other generation sources;
will this be the case under restructuring?
[10] See,
Federal Acquisitions Regulations ‑‑ Part 52; Solicitation
Provisions and Contract Clauses; 52.250‑1 ‑‑ Indemnification
Under Public Law 85‑804 (Apr 1984).
[11] 42
U.S.C. Section 2210(s) provides:
No
court may award punitive damages in any action with respect to a nuclear
incident or precautionary evacuation against a person on behalf of whom the
United States is obligated to make payments under an agreement of
indemnification covering such incident or evacuation.
[12] Court
decisions that indicate that punitive damages are still available make plain
that punitive damages cannot be had against the government, but make less plain
what this means. For example; (1) if punitive damages must come from funding
other than that provided by the government, what does this mean when the
government stands as ultimate indemnitor? (2) is the test whether the funding
comes from the first or second tier of payments, and, if so, by what rationale
does one determine which pot the punitive damages come from? (3) are punitive
damages always available from those who are not directly indemnified by the
government (e.g., a contract supplier to an indemnified utility)?
[13]
The Court concluded:
Because
there is no conflict between the Amendments Act and the substantive laws of
Pennsylvania which allow punitive damages, we will instruct the district court
to proceed with the litigation of these matters in a manner consistent with
this opinion. In so doing, we emphasize that the district court has authority
to prioritize the various claims if punitive damages are awarded and that the
Price-Anderson Act=s
tri-level insurance scheme is easily adaptable to such a prioritization of
claims. It cannot be gainsaid that Aif there is a limited fund, priority should be given to compensating
those who have been injured rather than conferring windfalls on those who have
already been compensated.@.. We see nothing in the Act that precludes a district court from using
its discretion to limit or even preclude punitive damages in accordance with
the financial constraints of the fund and the Act=s prohibition against punitive damage awards being paid out of the
federal layer of insurance. However, we do not express any view as to whether
the district court should so exercise its discretion.
[14] In Smith v. General Electric 938 F
Supp 70 (D.Mass 1996), the court explained in denying General Electric=s Motion to dismiss the claims against it:
The
purpose of the channeling provision of the Price-Anderson Act is to make third
party vendors like GE indemnitees of nuclear plant operators like Boston
Edison. The Act does not exonerate GE of its legal liability, it merely shifts
the obligation to pay damages to Boston Edison. The distinction between an
indemnitee and a party immune from suit is critical, especially in a punitive
damages context...As the Third Circuit pointed out in TMI...the limitation on
punitive damages in the 1988 Amendments Act applies only when the United States
is an indemnifying party...
The
basis of plaintiff=s
punitive damages claim is the allegation that GE knowingly and recklessly sold
defective fuel rods to Boston Edison.
While it is true that Price-Anderson will eventually require Boston
Edison to indemnify GE for any damages, to dismiss GE at this stage as a party
would hinder plaintiffs from developing proof of knowing or reckless conduct on
GE=s part.
[15] Perhaps
by contrast, in O=Conner v. Commonwealth Edison, 13 F. 3d 1090 (7th Cir. 1994)(pipefitter sues utility) the
Seventh Circuit noted, in dicta at footnote 13: ASilkwood=s holding regarding damages was overruled by the Amendments Act which
specifically bars punitive damages.@ See, for the same language, footnote 5 to Nieman v.NLO
Industries, 108 F. 3d 1546 (6th Cir. 1997),
[16] The courts have further held that the
Federal standard to be applied is the applicable numerical standard, and not
ALARA (the AAs Low as Reasonably Achievable@ principle). See, e.g. In Re: TMI,
67 F.3d 1103 (3d Cir. 1995)(Awe note that no court appears to have actually applied ALARA as part of
the duty of care.@)
Carey v. Kerr-McGee, 60 F. Supp. 2d 800 (N.D. Ill. 1999) identifies McCafferty
v.Centerior Service Comm 983 F Supp 715, 718 (N.D. Ohio 1997) as a decision
which finds ALARA to be applicable. However, that decision agreed that the occupation
dose limits B not ALARA B defines the standard of care.
[17]
The Supreme Court recorded that the NRC had Adetermined that Kerr-McGee=s only violation of regulations throughout the incident was its failure
to maintain a record of the dates of two urine samples submitted by Silkwood.@
[18] Similarly,
in Lokos v. Detroit Edison, 67 F. Supp. 2d 740 (E.D. Mich.
1999)(individual claim of cancer related to occupational and community exposure
to Fermi Power Plant), the court stated that:A[t]o prevail in their PLA, plaintiffs must prove two essential
elements: (1) Mrs. Lokos= exposure exceeded the federal numerical dose
limits; and (2) such overexposure caused her to suffer a compensable injury
under the Amendments Act.@ The plaintiff, pointing to the TMI decision, argued that a breach of
duty occurs whenever excessive radiation is released, whether or not anyone is
present in the area exposed. The Court stated that in TMI defendants admitted
that the permissible levels were exceeded at the site boundary, and there was
no such evidence in the case at hand.
[19]
The
Committee=s Report is available as The Human
Radiation Experiments: Final Report of the President=s Advisory Committee (Oxford, 1996)(AFinal Report@).The Final Report contains a ACitizen=s Guide@ to accessing the documents and other
materials reviewed by the Committee. Page references in this testimony are to
the Oxford edition.
[20] Section
3626 (ADesignation of Additional Members of Special
Cohort@) empowers an expert panel to determine
whether there are classes of workers Awho likely were exposed to radiation but for whom it is not feasible to
estimate with sufficient accuracy the dose of radiation they received.