Nieman v. NLO, Inc.

• Citation: 108 F.3d 1546
• Decision Date: 19 March 1997
• Docket Number: No. 95-3677,95-3677
• Parties: , 65 USLW 2680 Anthony J. NIEMAN, Plaintiff-Appellant, v. NLO, INC. and NL Industries, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

Page 1546

108 F.3d 1546

44 ERC 1321, 65 USLW 2680

Anthony J. NIEMAN, Plaintiff-Appellant, v. NLO, INC. and NL Industries, Inc., Defendants-Appellees.

No. 95-3677 United States Court of Appeals,Sixth Circuit.

Argued May 24, 1996.

Decided March 19, 1997.

Roger W. Healey, briefed, Stephen B. Hoffsis, argued, Buechner, Haffer, O'Connell & Meyers, Cincinnati, OH, for Plaintiff-Appellant.

William H. Hawkins, II, Frost & Jacobs, Cincinnati, OH, Kevin T. Van Wert, Lee Radford, argued and briefed, Kirkland & Ellis, Chicago, IL, for Defendants-Appellees.

Before: KRUPANSKY, DAUGHTREY, and MOORE, Circuit Judges.

MOORE, J., delivered the opinion of the court, in which DAUGHTREY, J., joined. KRUPANSKY, J. (pp. 1562-69), delivered a separate dissenting opinion.

MOORE, Circuit Judge.

Appellant Anthony J. Nieman appeals the district court's grant of a motion to dismiss in favor of Appellees, NLO, Inc. ("NLO") and NL Industries, Inc. ("NLI"), pursuant to Fed.R.Civ.P. 12(b)(6) based on the expiration of the statute of limitations. For the reasons that follow, we affirm in part and reverse in part.

I. BACKGROUND

Nieman claims that the discharge of uranium from a nuclear processing facility in Fernald, Ohio, has damaged and continues to damage his property. His complaint alleges violations of the Price-Anderson Act, 42 U.S.C. § 2210(n)(2) and (o), and various state law claims premised upon his allegation that on December 10, 1984, "a massive leak of uranium occurred at the Fernald plant." Compl. p 10. Specifically, Nieman claims that appellees are liable for a "continuing trespass":

The Defendants, by and through release of uranium into the air, into the groundwater, and into the underlying aquifer have created a trespass on the property of the Plaintiff that continues to this day and will continue into the foreseeable future.

Compl. p 20. Nieman argues that because he has alleged a continuing trespass, his claim is not barred by the statute of limitations despite the fact that he had notice of the discharge by 1985, when the In re Fernald litigation was filed. ¹ Nieman filed the instant lawsuit on November 3, 1994.

Appellees filed a motion to dismiss or, in the alternative, for summary judgment, arguing that Nieman's claims were barred by the statute of limitations. Appellees argued that Nieman failed to allege that he was unaware of the release of uranium at or about the time it occurred in December 1984. Moreover, appellees point out that the pleadings from the In re Fernald litigation, a class action from which Nieman was excluded in 1986 and which asserted nearly identical claims, establish that Nieman had actual notice of his claims more than four years before he filed suit. Therefore, appellees claim that Nieman's action was barred by the four-year statute of limitations under Ohio Rev.Code § 2305.09, which both parties agree is the applicable statute of limitations.

The district court granted defendants' motion to dismiss. Finding that the damages both past and future could have been estimated in one action, the district court found that Nieman could not state a claim for "continuing trespass." Therefore, the district court applied the discovery rule, which normally dictates when a cause of action accrues:

"In the context of tort claims for seepage of water or oil, courts have typically concluded that the cause of action accrues from the date of the injury or from the date on which the injury became apparent or discoverable by due diligence." Korgel v. United States, 619 F.2d 16, 18 n. 4 (8th Cir.1980). Furthermore, "where all damages both past and future can be presently estimated in one action, successive actions cannot be brought for recurring or continuing damages." Id. at 18; see also Hamo v. Exxon Corp., slip op. no. 1143, at 1, 1982 WL 5760 (Ohio Ct.App.1982) ("Assuming that the damage is continuing, this still would not extend the four year Statute of Limitations. The Statute of Limitations, 2305.09, provides that in an action for trespassing underground, the cause accrues when the wrongdoer is discovered.").

District Court Opinion ("Dist.Ct.Op.") at 3-4. In determining that the damages both past and future could have been estimated in one action, the district court relied on the settlement in the class action lawsuit from which Nieman, because he was a former NLO employee, had been excluded, In re Fernald. The court also noted that the "allegation that the violation is continuing is suspect" because NLO ended its operation of the Feed Materials Production Center ("FMPC") in 1985, but the court declined to decide this issue because it found that Nieman's complaint was untimely for the alternative reasons stated above. Dist.Ct.Op. at 4 & n. 3.

II. STANDARD OF REVIEW

We review de novo a district court's dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6). Furthermore, we construe the complaint in the light most favorable to the plaintiff, accept as true all well-pleaded factual allegations, and determine whether the plaintiff undoubtedly can prove no set of facts in support of his claims that would entitle him to relief. Columbia Natural Resources, Inc. v. Tatum, 58 F.3d 1101, 1109 (6th Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1041, 134 L.Ed.2d 189 (1996).

III. ANALYSIS

A. Jurisdiction

Although the parties do not raise this issue, we begin our analysis with the question whether we may exercise subject matter jurisdiction over public liability actions under the Price-Anderson Act. Section 2210(n)(2) explicitly allows for removal of public liability actions to federal court. However, it has been argued that since "the substantive rules for decision" in public liability actions are "derived from" state law rather than federal law, 42 U.S.C. § 2014(hh), the claim does not arise under a law of the United States, and therefore federal question subject matter jurisdiction is not present. At least two courts of appeals have rejected this argument and held that the Price-Anderson Act as amended provides for a federal claim and affords federal question subject matter jurisdiction. See O'Conner v. Commonwealth Edison Co., 13 F.3d 1090, 1100 (7th Cir.), cert. denied, 512 U.S. 1222, 114 S.Ct. 2711, 129 L.Ed.2d 838 (1994); Brannon v. Babcock & Wilcox Co. (In re TMI Litig. Cases Consol. II) ("TMI II "), 940 F.2d 832, 857 (3d Cir.1991) (holding that the Amendments Act "while relying for definition upon state law elements, contains the federal components necessary to survive the constitutional challenge mounted"), cert. denied, 503 U.S. 906, 112 S.Ct. 1262, 117 L.Ed.2d 491 (1992), aff'd in part and rev'd in part on other grounds, 67 F.3d 1103, 1106 (3d Cir.1995), cert. denied, --- U.S. ----, 116 S.Ct. 1034, 134 L.Ed.2d 111 (1996). We agree with the analysis in O'Conner and TMI II holding that federal question subject matter jurisdiction does exist.

As will be discussed further below in relation to the merits of this appeal, the Price-Anderson Act, as amended ("Amendments Act"), does not merely transfer to federal court a state cause of action; rather, "a new federal cause of action supplants the prior state cause of action." O'Conner, 13 F.3d at 1100. Although Congress provided that the law governing a public liability action under the Price-Anderson Act is derived from state law, Congress did not adopt state law in "wholesale fashion." Id. Pursuant to 42 U.S.C. § 2014(hh), a subsection added to the Act in 1988, state law provides the substantive rules for decision in any public liability action only to the extent such law is not inconsistent with the provisions in § 2210. Thus, "Congress recognized that state law would operate in the context of a complex federal scheme which would mold and shape any cause of action grounded in state law." O'Conner, 13 F.3d at 1100. In the Amendments Act, "Congress ensured that all claims resulting from a given nuclear incident would be governed by the same law, provided for the coordination of all phases of litigation and the orderly distribution of funds, and assured the preservation of sufficient funds for victims whose injuries may not become manifest until long after the incident." TMI II, 940 F.2d at 857. Thus, we conclude, as have the Third and Seventh Circuits, that the federal ingredients in the Amendments Act are sufficient to satisfy the jurisdictional requirements of Article III.

B. Preemption

This court must also consider at the outset whether the Price-Anderson Act preempts Nieman's state law claim for continuing trespass, the only potentially viable state law claim in his complaint. The parties raised this issue for the first time at oral argument, and therefore the district court did not address it below.

1. The Statutory Language

Our analysis must begin with the statute itself. Congress enacted the Price-Anderson Act ("the Act") in 1957 as an amendment to the Atomic Energy Act ("AEA") "to encourage private sector investment in the development of nuclear power by limiting the liability of private owners and operators in the event of a nuclear incident." Day v. NLO, Inc., 3 F.3d 153, 154 n. 1 (6th Cir.1993). The Act requires private owners and operators "to purchase a specified amount of insurance, and damages awards over and above that amount are then indemnified by the government." Id. In 1988, Congress enacted the Price-Anderson Amendments Act of 1988, Pub.L. No. 100-408, 102 Stat. 1066 (1988), which explicitly created a federal cause of action for "public liability actions" that arise from nuclear incidents. See 42 U.S.C. § 2014(hh). Congress granted jurisdiction to the federal courts over these actions and provided that actions filed in state court were subject to removal. 42 U.S.C. § 2210(n)(2). However, "[t]he amendment was not intended to alter the state law nature of the underlying tort claims." Day, 3 F.3d at 154 n. 1 (citing § 2014(hh)).

Nieman alleges that a uranium leak occurred at the Fernald Plant on or about December 10,...