438 U.S. 59 (1978), 77-262, Duke Power Co. v. Carolina Environmental Study Group, Inc.

Docket NºNo. 77-262
Citation438 U.S. 59, 98 S.Ct. 2620, 57 L.Ed.2d 595
Party NameDuke Power Co. v. Carolina Environmental Study Group, Inc.
Case DateJune 26, 1978
CourtUnited States Supreme Court

Page 59

438 U.S. 59 (1978)

98 S.Ct. 2620, 57 L.Ed.2d 595

Duke Power Co.

v.

Carolina Environmental Study Group, Inc.

No. 77-262

United States Supreme Court

June 26, 1978

Argued March 20, 1978

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

WESTERN DISTRICT OF NORTH CAROLINA

Syllabus

The Price-Anderson Act (Act), having the dual purpose of protecting the public and encouraging the development of the nuclear energy industry, imposes a $560 million limitation on liability for nuclear accidents resulting from the operation of federally licensed private nuclear power plants, requires those indemnified by the $560 million fund established under the Act to waive all legal defenses in the event of a substantial nuclear accident, and further provides that, in the event of a nuclear accident involving damages in excess of the amount of aggregate liability, Congress "will take whatever action is deemed necessary and appropriate to protect the public from the consequences of a disaster of such magnitude." Appellant Duke Power Co. (Duke), an investor-owned public utility which is constructing nuclear power plants in North and South Carolina, and appellant Nuclear Regulatory Commission (NRC), were sued by appellees (an environmental organization, a labor union, and a number of individuals who live near the plants in question) who sought a declaration that the Act is unconstitutional. After finding, inter alia, that the "immediate" adverse effects upon appellees resulting from the operation of the plants included thermal pollution of lakes in the vicinity, and emission of non-natural radiation into appellees' environment, and also that there was a "substantial likelihood" that Duke would not be able to complete construction and maintain operation of the plants "but for" the protection provided by the Act, the District Court held that appellees had standing to challenge the Act's constitutionality, and that their claim could be properly adjudicated. The court then went on to hold that the Act violated the Due Process Clause of the Fifth Amendment because the amount of recovery is not rationally related to the potential losses, the Act tends to encourage irresponsibility in matters of safety and environmental protection, and there is no quid pro quo for the liability limitation; and the Act also offended the equal

Page 60

protection component of the Fifth Amendment by forcing the victims of nuclear incidents to bear the burden of injury, whereas society as a whole benefits from the existence and development of nuclear power.

Held:

1. The District Court had jurisdiction over appellees' complaint against the NRC under 28 U.S.C. § 1331(a) (1976 ed.), rather than § 1337, the jurisdictional base pleaded. The complaint, fairly read, raised two basic challenges to the Act, both of which are derived from the Fifth Amendment. Appellees' cause of action against the NRC directly under the Constitution is sufficiently substantial to sustain jurisdiction; the further question of whether such a cause of [98 S.Ct. 2624] action is to be generally recognized need not be decided on this record. Pp. 68-72.

2. Appellees have standing to challenge the Act's constitutionality. That several of the "immediate" adverse effects of construction of the plants were found to harm appellees is sufficient to satisfy the "injury in fact" prong of the constitutional requirement for standing. And the finding as to the "but for" causal connection between the Act and the construction of the plants satisfies the second prong of the constitutional test for standing, that the exercise of the court's remedial powers would redress the claimed injuries. Pp. 72-81.

3. The constitutional challenges to the Act are ripe for adjudication, since all parties would be adversely affected by a decision to defer definitive resolution of the constitutional validity vel non of the Act. To the extent that "issues of ripeness involve, at least in part, the existence of a live `Case or Controversy,'" Regional Rail Reorganization Act Cases, 419 U.S. 102, 138 (1974), the fact that appellees will sustain immediate injury from the operation of the disputed power plants and that such injury would be redressed by the relief requested satisfies this requirement. Pp. 81-82.

4. The Act does not violate the Due Process Clause of the Fifth Amendment. Pp. 82-94.

(a) The record supports the need for the imposition of a statutory limit on liability to encourage private industry participation, and hence bears a rational relationship to Congress' concern for stimulating private industry's involvement in the production of nuclear electric energy. P. 84.

(b) Assuming, arguendo, that the $560 million fund would not insure full recovery in all conceivable circumstances, it does not follow that the liability limitation is therefore irrational and violative of due process. When appraised in light of the extremely remote possibility of an accident in which liability would exceed the statutory limit and Congress' commitment to "take whatever action is deemed necessary and appropriate

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to protect the, public from the consequences of" a disaster of such proportions, the congressional decision to fix a $560 million ceiling is within permissible limits, and not violative of due process. Pp. 84-87.

(c) The District Court's finding that the Act tends to encourage irresponsibility in matters of safety and environmental protection cannot withstand careful scrutiny, since nothing in the liability limitation provision undermines or alters the rigor and integrity of the process involved in the review of applications for a license to construct or operate a nuclear power plant, and since, in the event of a nuclear accident, the utility itself would probably suffer the largest damages. P. 87.

(d) The Act provides a reasonably just substitute for the common law or state tort law remedies it replaces, and nothing more is required by the Due Process Clause. The congressional assurance of a $560 million fund for recovery, accompanied by the statutory commitment to "take whatever action is deemed necessary and appropriate to protect the public from the consequences of" a nuclear accident, is a fair and reasonable substitute for the uncertain recovery of damages of this magnitude from a utility or component manufacturer whose resources might well be exhausted at an early stage. And, at the minimum, the statutorily mandated waiver of defenses establishes at the threshold the right of injured parties to compensation without proof of fault, and eliminates the burden of delay and uncertainty that would follow from the need to litigate the question of liability after an accident. Pp. 87-93.

(e) There is no equal protection violation, since the general rationality of the Act's liability limitation, particularly with reference to the congressional purpose of encouraging private participation in the exploitation of nuclear energy, is ample justification for the difference in treatment between those injured in nuclear accidents and those whose injuries are derived from other causes. Pp. 93-94.

5. The Act does not withdraw the Tucker Act remedy, 28 U.S.C. § 1491, and thus appellees' challenge under the Just Compensation Clause must fail. The further question of whether a taking claim could be established under the Fifth Amendment is a matter appropriately left for another day. P. 94 n. 39.

431 F.Supp. 203, reversed and remanded.

BURGER, C.J., delivered the opinion of the Court, in which BRENNAN, WHITE, MARSHALL, BLACKMUN, and POWELL, JJ., joined. STEWART, J., filed an opinion concurring in the result, post, p. 94. REHNQUIST, J., filed an opinion concurring in the judgment, in which STEVENS, J., joined, post, p. 95. STEVENS, J., filed an opinion concurring in the judgment, post, p. 102.

Page 62

BURGER, J., lead opinion

MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

These appeals present the question of whether Congress may, consistent with the Constitution, impose a limitation on

Page 63

liability for nuclear accidents resulting from the operation of private nuclear power plants licensed by the Federal Government.

When Congress passed the Atomic Energy Act of 1946, it contemplated that the development of nuclear power would be a Government monopoly. See Act of Aug. 1, 1946, ch. 724, 60 Stat. 755. Within a decade, however, Congress concluded that the national interest would be best served if the Government encouraged the private sector to become involved in the development of atomic energy for peaceful purposes under a program of federal regulation and licensing. See H.R.Rep. No. 2181, 83d Cong., 2d Sess., 1-11 (1954). The Atomic Energy Act of 1954, Act of Aug. 30, 1954, ch. 1073, 68 Stat. 919, as amended, 42 U.S.C. §§ 2011-2281 (1970 ed. and Supp. V), implemented this policy decision, providing for licensing of private construction, ownership, and operation of commercial nuclear power reactors for energy production under strict supervision by the Atomic Energy Commission (AEC).1 See Power Reactor Development Co. v. Electrical Workers, 367 U.S. 396 (1961), rev'g and remanding 108 U.S.App.D.C. 97, 280 F.2d 645 (1960).

Private industry responded to the Atomic Energy Act of 1954 with the development of an experimental power plant constructed under the auspices of a consortium of interested companies. It soon became apparent that profits from the private exploitation of atomic energy were uncertain, and the accompanying risks substantial. See Green, Nuclear Power:

Page 64

Risk, Liability,.and Indemnity, 71 Mich.L.Rev. 479-481 (1973) (Green). Although the AEC offered incentives to encourage investment, there remained in the path of the private nuclear power industry various problems -- the risk of potentially vast liability in the event of a nuclear accident of a sizable magnitude being the major obstacle. Notwithstanding comprehensive...

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