Wayne v. Tennessee Valley Authority

• Decision Date: 23 April 1984
• Docket Number: No. 83-4043,83-4043
• Parties: Mark WAYNE, et al., Plaintiffs-Appellants, v. TENNESSEE VALLEY AUTHORITY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 392

730 F.2d 392

Mark WAYNE, et al., Plaintiffs-Appellants, v. TENNESSEE VALLEY AUTHORITY, et al., Defendants-Appellees.

No. 83-4043.

United States Court of Appeals Fifth Circuit.

April 23, 1984.

Thomas W. Reese, St. Petersburg, Fla., for plaintiffs-appellants.

Herbert S. Sanger, Jr., Gen. Counsel, James E. Fox, Associate Gen. Counsel, Brent R. Marquand, Richard B. Campbell, Donna L. Pierce, Tenn. Valley Auth., Knoxville, Tenn., for T.V.A.

Mitchell, McNutt, Bush, Lagrone & Sams, L.F. Sams, Jr., Michael D. Greer, Tupelo, Miss., for defendants-appellees.

Appeal from the United States District Court for the Northern District of Mississippi.

Before BROWN, GEE and WILLIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Plaintiffs appeal from a summary judgment entered in the Northern District of Mississippi holding that their claims are barred by the Tennessee statute of limitations applicable to product liability actions, Tenn. Code Ann. Secs. 29-28-103 et seq. (1980). The Tennessee statute is a statute of repose which imposes an absolute bar to actions brought more than ten years after the allegedly defective product was purchased. Appellants seek to have a federal statute of limitations, 28 U.S.C. Sec. 2401(b), or a Mississippi statute of limitations, either Miss. Code Ann. Sec. 15-1-49 or Sec. 75-2-725, applied instead. Those statutes start the period of limitations running at the time the injury was, or should have been, discovered; under those statutes the Waynes' action would be timely.

I. FACTS

In 1968, Mark and Phoebe Wayne began construction of a house on their 247-acre cattle farm in Hardin County, Tennessee. To save money, they acted as their own general contractor. On the advice of their block mason, in October 1968, the Waynes purchased concrete blocks filled with phosphate slag to use in the construction of the basement. The Waynes purchased the blocks from W & W Builders of Counce, Tennessee, but the blocks were manufactured by appellee Tupelo Concrete Products Company of Tupelo, Mississippi (Tupelo), using phosphate slag produced and sold as a by-product of appellee Tennessee Valley Authority's (TVA) Muscle Shoals fertilizer plant.

In 1969, the Waynes and their two minor children moved into the completed house and lived there without knowledge of any possible structural hazard until January 24, 1979. On that date an article in a Memphis, Tennessee, newspaper alerted them to the fact that phosphate slag contains uranium and its various decay products, such as radon gas, which give off potentially harmful radiation. ¹ The Waynes then contacted the Intergovernmental Phosphate Slag Task Force (the Task Force), an interagency task force composed of TVA, the Environmental Protection Agency, the State of Tennessee, and several other states, which was conducting tests on houses in the area. The Waynes asked the Task Force to test monitor the radiation levels in their house. The Task Force tested their house and recorded an average radiation level higher than any of the twenty-nine other houses tested in a multi-state area. In September 1979, the Waynes followed the advice of Tennessee Public Health Department and United States Environmental Protection Agency (EPA) officials and moved out of their house. The value of the Wayne's house dropped from approximately $95,000 to virtually nothing.

Relying on implied warranty, negligence, and strict liability theories, the Waynes filed suit against Tupelo and TVA in federal court in the Northern District of Mississippi, Eastern Division. The suit was filed in January 1981, over eleven years after the concrete blocks were purchased. The Waynes requested over fourteen million dollars in damages to compensate them for past, present, and future physical pain and suffering, mental anguish, medical expenses, and loss of the use and enjoyment of their house. The Wayne's minor children were originally named as plaintiffs, but at their own request their claims were dismissed without prejudice. ² In December 1982, the district court granted defendants' motions for summary judgment and dismissed Mr. and Mrs. Wayne's claims as barred by Tennessee's ten year statute of repose for product liability actions. The Waynes appeal from that judgment.

II. MATERIAL ISSUES OF FACT?

In their initial complaint the Waynes alleged that TVA fraudulently withheld knowledge of the hazardous radioactive nature of phosphate slag and slag-filled concrete blocks. Appellants now contend that there is no record evidence disproving that TVA withheld the critical information. As a result it is urged that whether TVA withheld information is a genuinely disputed issue of material fact making summary judgment improper. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 158, 90 S.Ct. 1598, 1609, 26 L.Ed.2d 142 (1970). Although TVA had the burden of proving there was no genuine issue, see ibid., it met that burden as to fraudulent concealment of knowledge by submitting the affidavit of Ronald B. Maxwell, an employee of TVA's Office of Health and Safety who had been employed in the health physics area since 1965. The relevant portion of the affidavit reads as follows:

3. Early on the only potential hazard perceived by TVA and others in the health physics field from this type of material was direct radiation exposure. TVA conducted investigations from 1962 to 1965 on the amount of direct gamma external radiation from slag and found levels only slightly above natural background radiation. Based on those investigations direct radiation was not considered to be a significant hazard especially since concrete blocks contain only a small proportion of slag. At that time the state of the art had not identified radon gas as a potential health concern in connection with phosphate and phosphate by-product materials. Since there was no reason to suppose that there might be a health hazard from radon, no evaluation of the radiological implications of radon gas emitted by phosphate slag was performed.

4. Not until the latter half of the 1970s was more knowledge gained about potential radon hazards from uranium mine studies and research. In February 1979 EPA released a report on the radon levels in structures built over phosphate mined areas in Florida (EPA 520/4-78-013).

5. In reaction to draft versions of EPA's report, in December 1978, TVA no longer made slag available as a precautionary measure until further studies could be done.

In December 1978, TVA made public a news release stating that because phosphate slag was radioactive the sale of phosphate slag was being stopped until federal guidelines on the use of the slag were published. The news release indicated that the slag had been used by manufacturers of concrete blocks since the mid-1950's.

Appellants submitted no evidence to counter the Maxwell affidavit. Rather, they relied solely on the unsupported allegations in their complaint. Even considering the affidavit in the light most favorable to the Waynes, it indicates that TVA did not know or have reason to know of the danger of radon gas in 1969, when the blocks at issue were sold, and did not know or have reason to know of such a danger until near the end of the 1970's, when TVA stopped the sale of phosphate slag and told the public why it was doing so. There was thus no genuine fact question raised as to whether TVA had fraudulently withheld knowledge of the dangers of phosphate slag. A party may not prevail on the bare allegations of his complaint when there is a properly supported summary judgment motion made against him. First National Bank v. Cities Service Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968). The district court acted properly in granting the summary judgment as to the issue of fraudulent concealment by TVA because no genuine material fact issue was presented.

III. FEDERAL STATUTE OF LIMITATIONS

A. Review on Appeal of Matters Not Presented in the Trial Court.

As to the claims against Tupelo and TVA based upon product liability and negligence, the district court granted summary judgment based upon the Tennessee ten year statute of repose. Appellants argue that the applicable statute of limitations in its action against TVA is the federal statute set out in 28 U.S.C. Sec. 2401(b), and not the Tennessee statute. Appellees contend that we should not address this issue because the application of federal limitations was not raised in the trial court. Whether the ten year Tennessee statute of repose was the proper statute was, however, squarely before the court since appellees asserted the Tennessee statute as an affirmative defense. Since appellees had the burden of asserting the proper statute and there was an issue as to the proper statute, the fact that appellants at trial claimed only the applicability of the Mississippi statute and not the federal statute does not control. The issue of what statute of limitations applies was properly raised and is before us. Because this case was decided in the trial court on the issue of the proper statute of limitations, it is proper to consider whether the federal limitations statute should be applicable.

28 U.S.C. Sec. 2401(b) provides:

(b) A tort claim against the United States shall be forever barred unless it is presented in writing to the appropriate Federal agency within two years after such claim accrues or unless action is begun within six months after the date of mailing, by certified or registered mail, of notice of final denial of the claim by the agency to which it was presented.

(Emphasis added.)

Because TVA is a federally owned corporation which is an agency or instrumentality of the United States, Painter v. Tennessee Valley Authority, 476 F.2d 943, 944 (5th Cir.1973), appellants contend that their action is a tort claim against the United States and that they had two years from the date their claim "accrued" to file suit. They rely on Quinton v. United States, 304 F.2d 234, 240 (5th...