790 F.3d 1088 (10th Cir. 2015), 14-1112, Cook v. Rockwell Int'l Corp.

Docket Nº:14-1112
Citation:790 F.3d 1088
Opinion Judge:GORSUCH, Circuit Judge.
Party Name:MERILYN COOK; WILLIAM SCHIERKOLK, JR.; DELORES SCHIERKOLK; RICHARD BARTLETT; SALLY BARTLETT; LORREN BABB; GERTRUDE BABB, Plaintiffs - Appellants, v. ROCKWELL INTERNATIONAL CORPORATION; DOW CHEMICAL COMPANY, Defendants - Appellees and MICHAEL DEAN RICE; BANK WESTERN; THOMAS L. DEIMER; RHONDA J. DEIMER; STEPHEN SANDOVAL; PEGGY J. SANDOVAL, Plaintiffs
Attorney:Merrill G. Davidoff of Berger & Montague, P.C., Philadelphia, Pennsylvania (David F. Sorensen, Jennifer MacNaughton, and Caitlin G. Coslett of Berger & Montague, P.C., Philadelphia, Pennsylvania, and Gary B. Blum and Steven W. Kelly of Silver & DeBoskey, P.C., Denver, Colorado, with him on the br...
Judge Panel:Before GORSUCH, PHILLIPS, and MORITZ, Circuit Judges. MORITZ, Circuit Judge, concurring in the judgment. MORITZ, Circuit Judge, concurring in the judgment.
Case Date:June 23, 2015
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
SUMMARY

In 1989, FBI agents raided the nuclear weapons production facility known as Rocky Flats, first operated by Dow Chemical Company, then Rockwell International Corporation. The agents discovered that plant workers had been mishandling radioactive waste for years. The waste found its way into the nearby soil and groundwater.The plant's neighbors followed the government's criminal action with a civil suit, citing the federal Price-Anderson Act and state nuisance law as grounds for relief. A jury found for... (see full summary)

 
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Page 1088

790 F.3d 1088 (10th Cir. 2015)

MERILYN COOK; WILLIAM SCHIERKOLK, JR.; DELORES SCHIERKOLK; RICHARD BARTLETT; SALLY BARTLETT; LORREN BABB; GERTRUDE BABB, Plaintiffs - Appellants,

and

MICHAEL DEAN RICE; BANK WESTERN; THOMAS L. DEIMER; RHONDA J. DEIMER; STEPHEN SANDOVAL; PEGGY J. SANDOVAL, Plaintiffs,

v.

ROCKWELL INTERNATIONAL CORPORATION; DOW CHEMICAL COMPANY, Defendants - Appellees

No. 14-1112

United States Court of Appeals, Tenth Circuit

June 23, 2015

Appeal from the United States District Court for the District of Colorado. (D.C. No. 1:90-CV-00181-JLK).

Merrill G. Davidoff of Berger & Montague, P.C., Philadelphia, Pennsylvania (David F. Sorensen, Jennifer MacNaughton, and Caitlin G. Coslett of Berger & Montague, P.C., Philadelphia, Pennsylvania, and Gary B. Blum and Steven W. Kelly of Silver & DeBoskey, P.C., Denver, Colorado, with him on the briefs), for Plaintiffs-Appellants.

Christopher Landau of Kirkland & Ellis LLP, Washington, D.C. (Rebecca Taibleson of Kirkland & Ellis LLP, Washington, D.C., and Kevin T. Van Wart and Bradley H. Weidenhammer of Kirkland & Ellis LLP, Chicago, Illinois, with him on the brief), for Defendants-Appellees.

Before GORSUCH, PHILLIPS, and MORITZ, Circuit Judges. MORITZ, Circuit Judge, concurring in the judgment.

OPINION

Page 1089

GORSUCH, Circuit Judge.

Harnessing nuclear energy is a delicate business. So is the statute before us. Originally passed in the 1950s in an era captivated by the promise of nuclear power and amended in the 1980s in the aftermath of the Three Mile Island meltdown when prevailing public sentiment was perhaps less sanguine, the Price-Anderson Act seeks both to promote the private nuclear energy industry and, simultaneously, to ensure relief for those injured by it. In this appeal, we consider how far Congress went in reshaping state tort claims involving what the Act delicately refers to as nuclear " incidents" and " occurrences" -- and what our own prior encounter with this case has to say on the subject.

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I

The beginnings of our dispute trace back generations. During the Cold War, the Rocky Flats plant served as home to a nuclear weapons production facility. Located just sixteen miles from downtown Denver, the plant was operated first by Dow, then by Rockwell, under contracts with the federal government. But everything ground to a halt in 1989. That's when FBI agents raided the plant and unearthed evidence of environmental crimes. It turns out plant workers had mishandled radioactive waste for years. Some had been poured into the ground and leached into nearby bodies of water. Some had been released into the air and filtered its way into the soil throughout the area. As news of all this emerged, the plant's neighbors saw their property values plummet. And soon enough they followed the government's criminal action with a civil suit of their own, citing both the federal Price-Anderson Act and state nuisance law as grounds for relief.

It took a titanic fifteen years for the case to reach a jury. No doubt a testament to contemporary civil litigation practices that ensure before any trial is held every stone will be overturned in discovery -- even if it means forcing everyone to endure the sort of staggering delay and (no doubt) equally staggering expense the parties endured here. Somehow, though, this case managed to survive the usually lethal gauntlet of pretrial proceedings and stagger its way to trial. There the jury found for the plaintiffs and the district court approved roughly $177 million in compensatory damages and $200 million in punitive damages -- as well as $549 million in prejudgment interest, thanks again to all the pretrial delay.

That, though, was hardly the end of it. Next the case found its way to appeal -- for the first time. On appeal, the defendants argued that the district court had failed to instruct the jury properly about the terms of the Price-Anderson Act. Under the Act, any lawsuit asserting liability for a " nuclear incident" is automatically considered a federal action that can be brought in (or removed to) federal court. See 42 U.S.C. § § 2014(w), 2014(hh), 2210(n)(2). And if that assertion is proven at trial -- if the jury finds that a nuclear incident actually occurred and harmed the plaintiffs -- a number of special rules kick in, including rules limiting the liability of certain defendants and requiring the government to pay any damages not covered by insurance. See id. § 2210(c)-(e). Unsurprisingly given these generous financial protections, defendants often have as much incentive as plaintiffs to accept that any harm they caused stemmed from a nuclear incident.

But in this particular case Dow and Rockwell made a curious tactical decision. They argued that the district court's jury instructions about what constitutes a nuclear incident were too permissive. To prove that a nuclear incident has damaged real property the Act requires a plaintiff to show the " loss of or damage to property, or loss of use of property." Id. § 2014(q). According to the defendants, this meant the district court should have required the plaintiffs to prove at trial physical damage to their property or the loss of a specific, particularized use of their property -- not mere contamination by radioactive materials or reduced property values. Of course, in the long run an argument along these lines promised to restrict the Act's application, including the benefits it affords defendants. But in the short run it offered a way to overturn the district court's judgment in this case. And Dow and Rockwell leapt at the chance.

The defendants' tactical decision seemed to pay off. This court agreed that the district court's jury instructions about what does and doesn't qualify as a nuclear

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incident were too permissive. On this basis, it vacated the district court's judgment and remanded the case for further proceedings in light of the Act's correct construction. Cook v. Rockwell Int'l Corp., 618 F.3d 1127, 1138-42, 1153 (10th Cir. 2010).

But that's when things took an interesting turn. Trying their hand at a little judicial jiu-jitsu, the plaintiffs sought to turn the defendants' victory against them. Back before the district court on remand the plaintiffs disclaimed any effort to prove a nuclear incident for purposes of the Price-Anderson Act. Forget the Act and the benefits it provides to both sides, they said, we renounce them. Accepting the premise that they couldn't prove a nuclear incident -- at least as the term was interpreted by this court -- the plaintiffs argued this meant only that the Act's liability limiting and indemnification protections fall away, leaving background state tort law to operate normally.1 What's more, the plaintiffs submitted, everything needed for a judgment on a state law nuisance claim already existed. The operative complaint expressly sought relief under Colorado nuisance law. At trial, the district court instructed the jury on Colorado nuisance law and the jury returned a state law nuisance verdict in accordance with those instructions. In the first appeal, this court held that " [t]he jury was properly instructed on the elements of a nuisance claim." Id. at 1145. And no one has ever challenged the sufficiency of the evidence in the record. The state law nuisance verdict, moreover, was untainted by any error identified in the first appeal: this court reversed only because of an instructional error concerning what's needed to prove a nuclear incident under the Act, not what's required to prove a nuisance under Colorado law. So, the plaintiffs argued, all the ingredients required for a state law nuisance judgment were present and accounted for and a judgment on that claim should issue forthwith. Perhaps the defendants' push in the first appeal for a narrow definition of what qualifies as a nuclear incident won them the battle, but it lost them the war -- failing to eliminate the plaintiffs' state law claim and serving only to narrow now and in the future both sides' ability to secure the benefits of the Price-Anderson Act.2

This put the defendants in a pickle. Having prevailed on the argument that this case doesn't involve a nuclear incident

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sufficient to implicate the federal statutory regime, now they had to conjure some reason why entering a judgment on the existing state law nuisance verdict would be legally impermissible. Ultimately the defendants settled on two arguments. First, they contended, the Price-Anderson Act prevents it. While everyone agrees that the Act provides a federal forum when a nuclear incident is asserted, and that it affords certain liability protections and guarantees if a nuclear incident is proven, Dow and Rockwell now suggested the Act does something more and entirely different. They argued to the district court that the Act also preempts and precludes any state law recovery where (as here) a nuclear incident is asserted but ultimately unproven. In this way, the defendants suggested, the Act embodies a sort of go-big-or-go-home rule of liability. If you allege and successfully prove a full-blown nuclear incident your recovery may be assured by the full faith and credit of the federal government. But if you allege and then fail to prove a nuclear incident you are barred from recovery of any kind -- even if you can establish a qualifying state law nuisance. Second, Dow and Rockwell argued that this court's mandate in the first appeal independently barred the plaintiffs from securing relief on their existing state law nuisance verdict. So even if the plaintiffs' state law claim isn't preempted any recovery is just as effectively foreclosed.

Ultimately, the district court sided with the defendants on both points and so here we are again. This time on the...

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