FILED
United States Court of Appeals
Tenth Circuit
September 3, 2010
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
MERILYN COOK; WILLIAM
SCHIERKOLK, JR.; DELORES
SCHIERKOLK; RICHARD BARTLETT;
LORREN BABB; GERTRUDE BABB;
MICHAEL DEAN RICE; BANK
WESTERN; THOMAS L. DEIMER;
RHONDA J. DEIMER; STEPHEN
SANDOVAL; PEGGY J. SANDOVAL;
SALLY BARTLETT,
Plaintiffs-Appellees –
Cross-Appellants,
v. Nos. 08-1224, 08-1226
and 08-1239
ROCKWELL INTERNATIONAL
CORPORATION and DOW CHEMICAL
COMPANY,
Defendants-Appellants –
Cross-Appellees,
___________________________
AMERICAN NUCLEAR INSURERS;
NUCLEAR ENERGY INSTITUTE, INC.,
Amici Curiae.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
(D.C. NO. 1:90-CV-00181-JLK)
Christopher Landau, P.C., Kirkland & Ellis LLP, Washington, DC (John K.
Crisham and Philippa Scarlett, Kirkland & Ellis LLP, Washington, DC; David M.
Bernick, P.C., Douglas J. Kurtenbach, P.C. and Steven C. Seeger, Kirkland &
Ellis LLP, Chicago, IL, with him on the briefs), Attorneys for Defendants-
Appellants/Cross-Appellees.
Merrill G. Davidoff, Berger & Montague, P.C., Philadelphia, PA (Peter Nordberg
and David F. Sorensen, Berger & Montague, P.C., Philadelphia, PA; Gary B.
Blum and Steven W. Kelly, Silver & DeBoskey, P.C., Denver, CO, with him on
the briefs), Attorneys for Plaintiffs-Appellees/Cross-Appellants.
Marjorie J. Berger, American Nuclear Insurers, Glastonbury, CT; Simon A. Steel,
Harkins Cunningham LLP, Washington, DC; and John G. Harkins, Jr., Harkins
Cunningham LLP, Philadelphia, PA, on the brief for American Nuclear Insurers,
Amicus Curiae.
Ellen C. Ginsberg, Esq, Michael A. Bauser, Esq., Anne W. Cottingham, Esq., and
Jerry Bonanno, Esq., Nuclear Energy Institute, Inc.; Donald E. Jose, Esq., Jose &
Associates, Malvern, PA; and Charles F. Rysavy, Esq., K&L Gates LLP, Newark,
NJ, on the brief for Nuclear Energy Institute, Inc., Amicus Curiae.
Before MURPHY, ANDERSON, and HOLMES, Circuit Judges.
MURPHY, Circuit Judge.
I. INTRODUCTION
The owners of property near the former Rocky Flats Nuclear Weapons
Plant (“Rocky Flats”) filed a class action against the facility’s operators under the
Price-Anderson Act (“PAA”), alleging trespass and nuisance claims arising from
the release of plutonium particles onto their properties. The district court
conducted a lengthy trial, resulting in a jury verdict in favor of the plaintiff class.
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After a series of post-trial motions, the district court entered judgment in favor of
Plaintiffs, awarding a total of just over $926 million, inclusive of compensatory
damages, punitive damages, and prejudgment interest. Defendants, Dow
Chemical Company (“Dow”) and Rockwell International Corporation
(“Rockwell”), timely appealed the judgment, and the class members filed a timely
cross-appeal.
Exercising appellate jurisdiction pursuant to 28 U.S.C. § 1291, this court
REVERSES and REMANDS the case to the district court. We DIRECT the
district court to vacate the judgment and conduct further proceedings not
inconsistent with this opinion.
II. BACKGROUND
Rocky Flats, located near Denver, Colorado, was established by the United
States Government in the 1950s to produce nuclear weapon components. The
government contracted with Dow to operate the facility from 1952 to 1975, and
then with Rockwell from 1975 to 1989. Operations at Rocky Flats ceased in June
1989 after the Federal Bureau of Investigation and the Environmental Protection
Agency searched the facility. Rockwell was subsequently charged with, and
ultimately pleaded guilty to, certain environmental crimes at the site. The facility
has since undergone remediation efforts and is now designated as a wildlife
refuge.
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Property owners, whose properties lie within a thirty square mile area east
of Rocky Flats, filed this class action on January 30, 1990, alleging a public
liability action under the PAA involving trespass and nuisance claims against
Dow and Rockwell. A public liability action is an action asserting legal liability
arising from a nuclear incident. 1 Plaintiffs’ most recent amended complaint
alleged the release of plutonium at Rocky Flats resulted in the contamination of
the class members’ properties. Plaintiffs sought compensatory damages,
measured by the diminution of property values, as well as punitive damages.
In October 1993, the district court certified a class consisting of “[a]ll
persons and entities owning an interest (including mortgagee and other security
interests) in real property situated within the Property Class Area, exclusive of
governmental entities, defendants, and defendants’ affiliates, parents, and
subsidiaries” as of June 7, 1989. In May 2005, the district court split the certified
class into two subclasses:
The first sub-class shall consist of all Class members who owned
property within the Class Area on the later of: (i) January 30, 1990,
the date this action was filed; or (ii) the date on which the jury, per
Restatement [(Second) of Torts] § 930(1), finds it appeared the
trespass and/or nuisance asserted by Plaintiffs would continue
1
Though the PAA provides a federal cause of action, Congress has not
eliminated considerations of state law in the PAA context. The PAA provides: “A
public liability action shall be deemed to be an action arising under section 2210
of this title, and the substantive rules for decision in such action shall be derived
from the law of the State in which the nuclear incident involved occurs, unless
such law is inconsistent with the provisions of such section.” 42 U.S.C. §
2014(hh).
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indefinitely. . . . The second sub-class consists of all other Class
members.
The district court generally referred to the first subclass as the “Prospective
Damages Subclass” and the second as the “Non-Prospective Damages Subclass.”
After over fifteen years of litigation, the district court conducted a four-
month jury trial between October 2005 and January 2006. In accordance with the
district court’s construction of Colorado law, 2 the jury instructions did not require
Plaintiffs to establish either an actual injury to their properties or a loss of use of
their properties. With respect to the nuisance claims, the district court instructed
the jury that Plaintiffs could establish Defendants’ conduct interfered with the use
and enjoyment of the class properties by proving Defendants’ conduct exposed
Plaintiffs to “some increased risk of health problems” or caused conditions “that
pose a demonstrable risk of future harm to the Class Area.” As to Plaintiffs’
trespass claims, the district court instructed the jury, “Plaintiffs are not required
to show that plutonium is present on the Class Properties at any particular level or
concentration, that they suffered any bodily harm because of the plutonium or that
the presence of plutonium on the Class Properties damaged these properties in
some other way.”
Plaintiffs’ evidence regarding the effects of plutonium on their properties
consisted of expert testimony indicating any plutonium exposure, no matter how
2
See supra n.1.
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small, increases the risk of cancer. Plaintiffs’ experts did not testify, however,
regarding the level of risk of developing cancer from exposure to plutonium
released at Rocky Flats. Rather, they suggested any increased risk was small and
unquantifiable.
The jury deliberated for three weeks and ultimately returned a verdict in
favor of the plaintiff class on each of the trespass and nuisance claims. The jury
awarded $176,850,340.00 in compensatory damages on the trespass claims and
awarded the same amount on the nuisance claims, based on the diminution of the
value of the properties. The jury also awarded punitive damages totaling
$110,800,000.00 against Dow and $89,400,000.00 against Rockwell.
After a long series of post-trial motions, the district court entered a final
judgment against Defendants on June 2, 2008, pursuant to Federal Rule of Civil
Procedure 54(b). Including prejudgment interest, the court ordered compensatory
damages against Dow in the amount of $653,313,678.05 and against Rockwell in
the amount of $508,132,861.39. The judgment further stated, however, the total
compensatory damages recovered by the plaintiff class shall not exceed
$725,904,087.00. Punitive damages were ordered in the same amounts the jury
awarded. Thus, the judgment awarded a total of just over $926 million to the
plaintiff class, including prejudgment interest. The district court’s judgment,
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however, did not allocate damages to individual class members. 3 Rather, the
district court attached a Plan of Allocation to the judgment, which provides for
the appointment of a claims administrator to make recommendations as to how the
lump sum identified in the judgment should be distributed. The Plan of
Allocation also provides a framework for calculating each class member’s share
and distributing any unclaimed funds. Dow and Rockwell timely appealed the
district court’s judgment and the class members filed a timely cross-appeal.
III. DISCUSSION
A. Jurisdiction
Before addressing the merits of an appeal, this court’s first obligation is to
assure itself of jurisdiction to do so. 1mage Software, Inc. v. Reynolds &
Reynolds Co., 459 F.3d 1044, 1048 (10th Cir. 2006). This appeal involves two
jurisdictional issues: whether the district court properly exercised subject matter
jurisdiction over this action and whether the district court entered an appealable
final judgment.
3
The parties indicated a desire to appeal prior to determining how damages
should be distributed to individual class members. Plaintiffs sought a final
appealable judgment under Federal Rule of Civil Procedure 54(b), while
Defendants sought an interlocutory appeal as to certain orders only, pursuant to
28 U.S.C. § 1292. The district court opted to enter a final judgment under Rule
54(b). In doing so, it determined the total amount of compensatory and punitive
damages, as well as the amount of prejudgment interest due from each Defendant.
Execution of the judgment was stayed to permit Defendants to appeal. The
judgment also includes the district court’s Rule 54(b) certification that “there is
no just reason for delay[ing]” entry of judgment.
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1. Subject Matter Jurisdiction
This court sua sponte raised the issue of whether the district court properly
exercised subject matter jurisdiction over this action. 4 The court’s concern arose
from the language of 42 U.S.C. § 2210(n)(2), which provides: “With respect to
any public liability action arising out of or resulting from a nuclear incident, the
United States district court in the district where the nuclear incident takes place
. . . shall have original jurisdiction without regard to the citizenship of any party
or the amount in controversy.” At first glance, the statute appears to require
proof of a “nuclear incident” 5 to permit federal subject matter jurisdiction over a
PAA action. Even assuming it imposes a jurisdictional requirement, however,
4
This court ordered the parties to submit supplemental briefing directed to
the question of whether 42 U.S.C. § 2210(n)(2) imposes the jurisdictional
requirement of establishing a “nuclear incident.” See Fed. R. Civ. P. 12(h)(3) (“If
the court determines at any time that it lacks subject-matter jurisdiction, the court
must dismiss the action.”); Estate of Harshman v. Jackson Hole Mountain Resort
Corp., 379 F.3d 1161, 1164 (10th Cir. 2004) (“Because lack of federal
jurisdiction cannot be waived or be overcome by an agreement of the parties, we
must satisfy ourselves not only of our own jurisdiction, but also that of the lower
courts in the cause under review.” (quotations omitted)); Citizens Concerned for
Separation of Church & State v. City & County of Denver, 628 F.2d 1289, 1301
(10th Cir. 1980) (“A federal court must in every case, and at every stage of the
proceeding, satisfy itself as to its own jurisdiction, and the court is not bound by
the acts or pleadings of the parties.”). Supplemental briefing was also ordered on
the state of the record and whether remand is necessary, assuming § 2210(n)(2)
imposes a jurisdictional requirement.
5
“Nuclear incident” is defined as “any occurrence . . . causing . . . bodily
injury, sickness, disease, or death, or loss of or damage to property, or loss of use
of property, arising out of or resulting from the radioactive, toxic, explosive, or
other hazardous properties of source, special nuclear, or byproduct material.” 42
U.S.C. § 2014(q).
-8-
closer inspection indicates 42 U.S.C. § 2210(n)(2) is not the sole source of federal
jurisdiction over a PAA action.
Although the complete history of the PAA need not be repeated, a brief
overview of its evolution, which this court described more fully in Kerr-McGee
Corp. v. Farley, 115 F.3d 1498, 1503-04 (10th Cir. 1997), is helpful. See also In
re TMI Litig., 193 F.3d 613, 624 n.7 (3d Cir. 1999), amended by 199 F.3d 158 (3d
Cir. 2000); O’Connor v. Commonwealth Edison Co., 13 F.3d 1090, 1095-97 (7th
Cir. 1994). In 1954, Congress enacted the Atomic Energy Act (“AEA”) “to
facilitate a transition from a federal government monopoly over the production
and use of atomic materials to a regime in which private industry also would have
a role in their production and use.” Kerr-McGee Corp., 115 F.3d at 1503. To
further encourage private development in the nuclear energy field, Congress
amended the AEA in 1957 by enacting the PAA, which “creat[ed] specific
protections from tort liability for the nuclear industry.” Id. At that time,
however, Congress opted not to create a federal cause of action for nuclear torts,
but instead permitted tort recovery under traditional state causes of action. Id.
Accordingly, unless the diversity statute applied or the action resulted from an
“extraordinary nuclear occurrence,” 6 nuclear-related tort claims typically could
6
“Extraordinary nuclear occurrence” is defined as: any event
causing a discharge or dispersal of source, special nuclear, or
byproduct material from its intended place of confinement in
amounts offsite, or causing radiation levels offsite, which the
(continued...)
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not proceed in federal court. See In re TMI Litig. Cases Consol. II, 940 F.2d 832,
853 n.18 (3d Cir. 1991).
The PAA was amended several times in subsequent years, most notably in
1988 when Congress created a federal cause of action for nuclear torts, thereby
expanding federal jurisdiction over such claims. Kerr-McGee Corp., 115 F.3d at
1503. 42 U.S.C. § 2210(n)(2) now provides:
With respect to any public liability action arising out of or resulting
from a nuclear incident, the United States district court in the district
where the nuclear incident takes place . . . shall have original
jurisdiction without regard to the citizenship of any party or the
amount in controversy. Upon motion of the defendant or of the
[Nuclear Regulatory] Commission or the Secretary [of Energy], as
appropriate, any such action pending in any State court (including
any such action pending on August 20, 1988) or United States district
court shall be removed or transferred to the United States district
court having venue under this subsection.
Accordingly, the 1988 Amendments made it clear that any action asserting public
liability can be originally filed in or removed to the appropriate federal district
court. In doing so, Congress also designated the particular venue in which any
such action must be tried if it is to proceed in federal court; i.e., “the United
States district court in the district where the nuclear incident takes place.” These
6
(...continued)
Nuclear Regulatory Commission or the Secretary of Energy, as
appropriate, determines to be substantial, and which the Nuclear
Regulatory Commission or the Secretary of Energy, as appropriate,
determines has resulted or will probably result in substantial damages
to persons offsite or property offsite.
42 U.S.C. § 2014(j).
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Amendments, however, did not create exclusive federal jurisdiction over PAA
actions. Kerr-McGee, 115 F.3d at 1504-05. Indeed, the express language of 42
U.S.C. § 2210(n)(2) makes it clear state courts are free to resolve PAA actions
unless a defendant, the Nuclear Regulatory Commission, or the Secretary of
Energy opts to remove the action to federal court.
As indicated, this court was concerned that 42 U.S.C. § 2210(n)(2) could be
read as limiting federal jurisdiction to public liability actions “arising out of or
resulting from a nuclear incident,” thus requiring proof of a nuclear incident as a
jurisdictional element. We see no indication, however, that Congress intended 42
U.S.C. § 2210(n)(2) to be the sole source of federal jurisdiction over PAA actions.
Rather, Congress expanded federal jurisdiction to ensure that actions involving a
“nuclear incident” can proceed from their inception in federal court, even if the
parties cannot otherwise establish the requirements of 28 U.S.C. § 1332. Congress
did not, however, eliminate a party’s right to proceed in federal court when other
jurisdictional bases exist. Accordingly, a plaintiff need not establish a “nuclear
incident” under 42 U.S.C. § 2210(n)(2) in order to proceed in federal court with a
PAA action when another basis for federal jurisdiction is present. 7
7
Because any jurisdictional requirements in 42 U.S.C. § 2210(n)(2) only
apply to federal courts, a remarkable anomaly would arise if § 2210(n)(2) was the
sole source of federal jurisdiction, demanding proof of a nuclear incident as a
jurisdictional prerequisite. If a plaintiff was unable to establish a nuclear
incident, the federal district court would be compelled to dismiss for lack of
subject matter jurisdiction. The jurisdictional dismissal would not, however,
(continued...)
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Indeed, jurisdictional grounds will always exist for a plaintiff’s properly
pleaded PAA claim. As we previously explained, Congress’s 1988 Amendments
created a new federal cause of action, known as a “public liability action.” 42
U.S.C. § 2014(hh) provides:
The term ‘public liability action,’ as used in section 2210 of this title,
means any suit asserting public liability. A public liability action
shall be deemed to be an action arising under section 2210 of this
title, and the substantive rules for decision in such action shall be
derived from the law of the State in which the nuclear incident
involved occurs, unless such law is inconsistent with the provisions of
such section.
As a result, any suit “asserting public liability” under 42 U.S.C. § 2210 is a civil
action arising under the laws of the United States over which a federal court has
subject matter jurisdiction pursuant to 28 U.S.C. § 1331.
Accordingly, we need not decide whether the district court had subject
matter jurisdiction under 42 U.S.C. § 2210(n)(2), because the district court clearly
had subject matter jurisdiction under 28 U.S.C. §§ 1331. 8
7
(...continued)
necessarily prevent a plaintiff from proceeding with their PAA action in state
court, where any jurisdictional language in § 2210(n)(2) would be inapplicable
and proof of a nuclear incident would have no jurisdictional relevance. The
strange result would be that no federal court could exercise subject matter
jurisdiction; only state courts could reach the merits of the plaintiff’s federal
cause of action under the PAA. Such a result would make no sense given
Congress’s intent to permit plaintiffs to pursue public liability actions in federal
court. C.f. infra Section III(B) (holding a plaintiff must nonetheless always
establish a nuclear incident as a threshold element of a PAA claim).
8
Plaintiffs’ complaint alleged subject matter jurisdiction under the PAA, 42
(continued...)
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2. Finality of the Judgment
Having concluded the district court’s exercise of subject matter jurisdiction
was proper, we now turn to Defendants’ motion to dismiss this appeal for lack of
subject matter jurisdiction. Specifically, Defendants argue the district court’s
judgment is not sufficiently final to warrant certification under Federal Rule of
Civil Procedure 54(b). Rule 54(b) allows the district court to “direct entry of a
final judgment as to one or more, but fewer than all, claims or parties” so long as
“the district court expressly determines that there is no just reason for delay.” The
general rule, however, is that an order which “determines liability but leaves
damages to be calculated is not final.” Harbert v. Healthcare Servs. Group, Inc.,
391 F.3d 1140, 1145 (10th Cir. 2004). Nonetheless, in Strey v. Hunt International
Resources Corp., this court explained that when damages are not allocated to
specific class members, the resolution of class liability claims may warrant Rule
54(b) certification if “the district court establishes both the formula that will
determine the division of damages among class members and the principles that
will guide the disposition of any unclaimed funds.” 696 F.2d 87, 88 (10th Cir.
1982).
8
(...continued)
U.S.C. § 2210(n)(2), the federal question statute, 28 U.S.C. § 1331, and the
diversity jurisdiction statute, 28 U.S.C. § 1332. Plaintiffs’ complaint also alleged
jurisdiction under the Comprehensive Environmental Response, Compensation,
and Liability Act (“CERCLA”), 42 U.S.C. § 9613(b). Plaintiffs make no
argument on appeal that CERCLA is the source of federal jurisdiction, and they
only presented their PAA trespass and nuisance claims to the jury.
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Here, the district court purported to enter judgment under Rule 54(b),
stating the total damages against each Defendant and determining there is no just
reason for delaying entry of judgment. The judgment did not, however, distribute
the aggregate class award among individual members. Instead the district court
attached a Plan of Allocation to the judgment, which provides a thorough
framework for determining each individual class member’s damages. Having
thoroughly reviewed the Plan of Allocation, we conclude it complies with the
requirements of Strey.
The Plan of Allocation provides for the appointment of a claims
administrator, who is directed to determine the proper allocation of damages based
on specific data. The claims administrator must determine ownership of each class
property as of the relevant dates as well as each property’s assessed value based
on county property and tax records. This value is to be expressed as a fraction of
the total value of all properties within the same category, specifically residential,
commercial, or vacant property. The class administrator is directed to use this
fraction to determine the total damages to be allocated to each property and make
recommendations to the district court based on this calculation. The Plan of
Allocation also provides for the distribution of any unclaimed funds.
The Plan of Allocation simply requires the application of mathematical
principles to a formula involving identifiable property records and the jury’s
verdict. In doing so, the Plan of Allocation directs the method of allocating
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damages among the individual class members, while also explaining how
unclaimed funds shall be distributed. Contrary to Defendants’ argument, the Plan
of Allocation does not require resolution of complex issues or calculations. While
it is true that certain class members may wish to challenge the ultimate allocation
of damages to them, the guidelines provided by the Plan of Allocation are
straightforward and mechanical. Moreover, any such challenges would not affect
the total damages owed by Defendants, which are clearly identified in the
judgment. Consequently, this court concludes the Plan of Allocation’s basic
formula for determining individual damages sufficiently complies with Strey and
the Rule 54(b) judgment entered by the district court is final. Defendants’ motion
to dismiss for lack of appellate jurisdiction is therefore denied.
B. Threshold Elements of a PAA Claim
Turning to the merits of the appeal, Defendants argue the district court erred
by refusing to instruct the jury that in order for Plaintiffs to prevail on their PAA
claims, they must establish a “nuclear incident” occurred by showing “loss of or
damage to property, or loss of use of property.” As an initial matter, we note that
an issue was raised at oral argument as to whether or not Defendants forfeited this
argument. It is arguable Defendants failed to preserve the issue of whether a
“nuclear incident” must be established as a threshold element of a plaintiff’s PAA
claim. Nonetheless, Plaintiffs themselves failed to adequately present any such
forfeiture argument in their appellate brief. At oral argument, Plaintiffs admitted
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they did not expressly raise a forfeiture argument, but instead asserted that their
brief sufficiently presented the argument by generic references to Defendants’
“novel Price-Anderson argument” and Defendants’ failure to “identify with clarity
the specific rulings of which [they] seek review, or the locations in the record
where [their] points were raised.” We disagree. Plaintiffs’ brief only makes
reference to Defendants’ lack of citations to rulings below in explaining the
difficulty they had in responding to certain arguments. The brief does not raise a
forfeiture challenge. Accordingly, Plaintiffs have themselves forfeited any
forfeiture argument they may have on this issue, and this court will consider the
merits of Defendants’ argument. See United States v. Heckenliable, 446 F.3d
1048, 1049 n.3 (10th Cir. 2006) (explaining the government “waived the waiver”
by failing to argue defendant forfeited his challenge on appeal); see also Soo Line
R. Co. v. St. Louis Sw. Ry. Co., 125 F.3d 481, 483 n.2 (7th Cir. 1997) (holding
plaintiff “waived any waiver defense it might have had” by failing to argue
defendant forfeited its appellate argument due to a judicial admission).
This court “review[s] de novo whether, as a whole, the district court’s jury
instructions correctly stated the governing law and provided the jury with an
ample understanding of the issues and applicable standards.” Martinez v.
Caterpillar, Inc., 572 F.3d 1129, 1132 (10th Cir. 2009) (quotation omitted). As
we previously mentioned, the 1988 Amendments to the PAA created a federal
cause of action known as a “public liability action.” A “public liability action . . .
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means any suit asserting public liability.” 42 U.S.C. § 2014(hh). In turn, “public
liability” is defined as “any legal liability arising out of or resulting from a nuclear
incident.” 42 U.S.C. § 2014(w).
In keeping with these definitions, Defendants argue Plaintiffs must establish
that any liability does in fact arise out of or result from a nuclear incident. A
“nuclear incident” is defined as “any occurrence . . . causing . . . bodily injury,
sickness, disease, or death, or loss of or damage to property, or loss of use of
property, arising out of or resulting from the radioactive, toxic, explosive, or other
hazardous properties of source, special nuclear, or byproduct material.” 42 U.S.C.
§ 2014(q). Consequently, Defendants argue Plaintiffs must prove as a threshold
element of their PAA claims that they suffered one of the injuries enumerated in
42 U.S.C. § 2014(q).
This court analyzed a similar question in June v. Union Carbide Corp., 577
F.3d 1234 (10th Cir. 2009). There, defendants’ uranium mining and milling
operations exposed nearby residents to radiation to such an extent that the
community had to be evacuated and all structures were razed as part of the
remediation effort. Id. at 1236-37. One-hundred-fifty-two plaintiffs claimed the
mining and milling operations increased their risk of developing radiation-related
illnesses and pursued medical monitoring claims to help detect the onset of
disease. Id. at 1237. This court affirmed the dismissal of the medical monitoring
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claims because they did not implicate “bodily injury,” which was the only
potentially applicable injury under § 2014(q). Id. at 1248-52.
Though June did not expressly determine the circumstances in which a
plaintiff must establish injury, 9 we now confirm that the occurrence of a nuclear
incident, and thus a sufficient injury under § 2014(q), constitutes a threshold
element of any PAA claim. Consequently, we reject Plaintiffs’ suggestion that
they need only assert liability arising out of a nuclear incident. The presence of a
nuclear incident is the hallmark of a public liability action. Were a plaintiff only
required to plead the presence of a nuclear incident, but never establish one, a
“public liability action” would be completely indistinguishable from whichever
state tort claim a particular PAA action incorporates. In creating a federal cause
of action under the PAA, however, Congress made clear its intention to limit
recovery to the discrete group of injuries enumerated in § 2014(q) while
9
In June, the district court dismissed the medical monitoring claims without
prejudice for lack of subject matter jurisdiction under 42 U.S.C. § 2210(n)(2).
See June v. Union Carbide Corp., 577 F.3d 1234, 1248 (10th Cir. 2009). On
appeal, defendants argued dismissal should have been with prejudice because
“bodily injury” is an element of a PAA claim rather than a jurisdictional
requirement. Id. at 1248 n.8. This court, however, did not resolve whether
“bodily injury” is a jurisdictional requirement because defendants had not cross-
appealed with respect to that issue. Id. Additionally, this court noted the
standard of appellate review is the same regardless of whether “bodily injury” is
treated as a jurisdictional requirement or an element of a plaintiff’s PAA claim.
Id.
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simultaneously utilizing state law to frame the “substantive rules for decision.” 10
42 U.S.C. § 2210(hh). Plaintiffs provide no reason why we should render the
statute’s nuclear incident requirement superfluous outside of the pleading stage.
See 42 U.S.C. § 2014(w). Accordingly, we conclude a plaintiff must establish an
injury sufficient to constitute a nuclear incident as a threshold, substantive element
of any PAA claim.
The only injuries listed in § 2014(q) which can establish a nuclear incident
in the case at hand are “loss of or damage to property” and “loss of use of
property.” 11 This court has never defined these terms either individually or in a
manner that would differentiate one from the other. Our recent decision in June,
however, provides significant guidance. As we previously noted, the plaintiffs in
June claimed the defendants’ uranium operations increased their risk of
developing health problems and thus pursued medical monitoring claims. 577
F.3d at 1237. The district court determined medical monitoring claims do not
involve a “bodily injury” and dismissed the action. Id. at 1248. This court
10
Indeed, 42 U.S.C. § 2014(hh) provides that state law provides the
substantive rules for decision, “unless such law is inconsistent with the provisions
of [42 U.S.C. § 2210].” A “public liability action” arising under § 2210,
however, incorporates definitions provided by § 2014, including § 2014(q) which
defines “nuclear incident.”
11
Plaintiffs have never argued their claims involve “bodily injury.” Indeed,
their decision to pursue classic property tort claims, trespass and nuisance, makes
it clear they seek recovery for injuries to a property interest rather than “bodily
injury.”
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affirmed and held “DNA damage and cell death” do not constitute a bodily injury
in the absence of the manifestation of an actual disease or injury, despite the
increased risk of developing disease in the future. Id. at 1248-49. In short, June
makes clear that only an existing physical injury constitutes “bodily injury” under
the PAA; the mere subclinical effects of radiation exposure are insufficient. Id. at
1249.
Our characterization of “damage to property” is informed by the analysis in
June, as the logic applies equally to the issue before us in this appeal. Just as an
existing physical injury to one’s body is necessary to establish “bodily injury,” so
too is an existing physical injury to property necessary to establish “damage to
property.” Without a demonstrable manifestation of injury, the presence of
plutonium can, at best, only establish a risk of future damage to property. As this
court indicated in June, however, mere risk of future damage is insufficient. Id. at
1249. Rather, the physical damage must actually be manifest at the time the PAA
claim is asserted. This requirement does not heighten a plaintiff’s burden of
proof, but simply provides that a plaintiff wishing to sue under the PAA for a
nuclear-related property injury involving “damage to property” must first establish
actual damage to the property in question.
Here, Plaintiffs argue the mere presence of radioactive plutonium particles
on their property establishes the requisite damage. In their supplemental brief,
Plaintiffs point out a “nuclear incident” is defined as any enumerated injury
-20-
“arising out of or resulting from the radioactive, toxic, explosive, or other
hazardous properties of . . . special nuclear . . . material.” 42 U.S.C. § 2014(q).
Without question, “special nuclear material” includes plutonium. 42 U.S.C.
§ 2014(aa). According to Plaintiffs, this compels the conclusion that plutonium
contamination itself is enough to establish “damage to property.” This argument
misses the point. The statute does not indicate that the mere presence of
plutonium is per se injurious to property. If mere contamination without actual
damage were enough, Congress could have easily listed “contamination” as an
injury falling within 42 U.S.C. § 2014(q)’s definition of “nuclear incident.”
Instead, Congress required a showing of “damage to property.”
In order to prove plutonium-related “damage to property,” Plaintiffs must
necessarily establish that plutonium particles released from Rocky Flats caused a
detectable level of actual damage to the class properties. 12 Jury Instruction No. 3.3
12
In their supplemental brief, Plaintiffs also suggest that diminution of their
property values establishes “damage to property” or “loss of use of property.”
Diminution of value, however, cannot establish the fact of injury or damage.
Otherwise, reduced value stemming from factors unrelated to any actual property
injury, such as unfounded public fear regarding the effects of minor radiation
exposure, could establish “damage to property” and “loss of use of property.”
Public perception and the stigma it may attach to the property in question can
drastically affect property values, regardless of the presence or absence of any
actual injury or health risk. Instead, courts have traditionally utilized diminution
of value as a measurement of damages rather than proof of the fact of damage.
See, e.g., Restatement (Second) of Torts § 929(1)(a); Smith v. Kan. Gas Serv. Co.,
169 P.3d 1052, 1061-62 (Kan. 2007) (collecting cases in the nuisance context).
Plaintiffs have cited no cases from any jurisdiction suggesting a different
approach should apply here. We conclude the PAA requires a showing of actual
(continued...)
-21-
confirmed that Plaintiffs must prove the presence of plutonium on class properties
to prevail on their trespass claim. The language of Instruction No. 3.3, however,
underscored the limited nature of that proof: “Plaintiffs are not required to show
that plutonium is present on the Class Properties at any particular level or
concentration, that they suffered any bodily harm because of the plutonium or that
the presence of plutonium on the Class Properties damaged these properties in
some other way.” Accordingly, Plaintiffs were never required to, and did not,
present evidence of actual physical damage to the property.
“Damage to property” is not, however, the only property injury that a
plaintiff can prove to establish the PAA threshold element of a nuclear incident; a
plaintiff who establishes a “loss of use of property” may also recover under the
PAA. The express statutory language indicates that more than a mere interference
with an owner’s use is necessary; a particular use of the property must actually be
lost.
Plaintiffs did present evidence relevant to a loss of use. Specifically, they
tried their nuisance claims under the theory that the presence of plutonium
particles on their properties places them at an increased risk of health problems.
We agree that when the presence of radioactive materials creates a sufficiently
high risk to health, a loss of use may in fact occur. For instance, a residential or
12
(...continued)
physical injury to the properties themselves rather than a mere decline in the
properties’ value.
-22-
business use may be lost due to an increased risk to health so high that no
reasonable person would freely choose to live on or work at the property.
Similarly, agricultural use may be lost where the soil can no longer produce crops
that are safe for consumption due to the presence of the radioactive substance. In
short, where the evidence indicates the property has been affected by the
radioactive material to such an extent that an otherwise appropriate use of the
property is lost, a plaintiff has established the threshold injury element of his PAA
claim. 13
Here, Plaintiffs were never required to establish a “loss of use of property.”
Instead, Jury Instruction No. 3.6 only required the jury to find that Defendants
“interfered with Class members’ use and enjoyment of their properties” in one of
two ways: (1) “[b]y causing Class members to be exposed to plutonium and
placing them at some increased risk of health problems” or (2) “[b]y causing
objective conditions that pose a demonstrable risk of future harm to the Class
Area.” Plaintiffs’ experts merely testified that any exposure to plutonium
whatsoever increases the risk of health problems to some degree. Without an
accompanying estimate or calculation of the increased risk, however, this evidence
is insufficient to establish a loss of use under 42 U.S.C. § 2014(q). Plaintiffs must
13
We note the instant case does not require, and the examples provided do
not necessarily represent, development of a complete list of circumstances in
which a plaintiff can establish a “loss of use.”
-23-
instead prove that the particular level of risk created by Defendants’ conduct had
the effect of actually depriving them of a specific use.
During supplemental briefing, this court directed Plaintiffs to identify any
evidence presented at trial that could establish a loss of use of property. 14
Plaintiffs’ supplemental brief confirms they attempted to make out their PAA
claims solely by establishing an increased health risk. Plaintiffs’ submissions,
however, do not reveal evidence of an increased health risk that would be
sufficient to permit a reasonable fact-finder to find a loss of use. Indeed,
Plaintiffs’ experts testified only that the actual dosage of radiation to which
Plaintiffs have been exposed creates a small and unquantifiable increased risk of
health problems. Nonetheless, we need not review the sufficiency of the evidence,
as the jury was never properly instructed on the threshold elements of Plaintiffs’
PAA claims. On remand, Plaintiffs will be tasked with producing additional
evidence that could support a jury’s finding that a nuclear incident occurred, in the
form of “loss of or damage to property, or loss of use of property” under 42 U.S.C.
§ 2014(q).
Because the jury was not properly instructed on an essential element of
Plaintiffs’ PAA claims, the verdict must be set aside and the case remanded for
further proceedings not inconsistent with this opinion.
14
Though the purpose of this inquiry pertained to the related jurisdictional
issue, see supra n.4, the ultimate question of whether Plaintiffs suffered a loss of
use is the same.
-24-
C. Federal Preemption
Defendants also challenge the district court’s ruling that federal nuclear
safety standards do not preempt state tort standards of care under the PAA. 15
Essentially, Defendants argue they are exempt from liability if their conduct
complied with federal nuclear safety standards, even if they could be held liable
under a more restrictive state tort standard of care. Whether federal law preempts
state tort law is a question of law which this court reviews de novo. Dobbs v.
Anthem Blue Cross & Blue Shield, 475 F.3d 1176, 1177 (10th Cir. 2007).
Plaintiffs argue the language of § 2014(hh) makes it clear state tort
standards of care apply to a PAA action. Defendants argue, on the other hand, that
because state tort standards of care conflict with the PAA scheme, they are
preempted by federal nuclear safety regulations.
42 U.S.C. § 2014(hh) provides:
A public liability action shall be deemed to be an action arising under
section 2210 of this title, and the substantive rules for decision in
such action shall be derived from the law of the State in which the
nuclear incident involved occurs, unless such law is inconsistent with
the provisions of such section.
15
While this court’s ruling that Plaintiffs must establish the existence of a
nuclear incident as a threshold element of their claims independently warrants
remand, it is proper to nonetheless decide questions of law raised in this appeal
that are certain to arise again in the event of a re-trial in order to guide the district
court on remand. See Colo. Visionary Acad. v. Medtronic, Inc., 397 F.3d 867,
876 (10th Cir. 2005).
-25-
We agree with the district court that § 2014(hh) does not expressly preempt state
law. The clear meaning of this section is that state law is only expressly
preempted when it is inconsistent with the provisions of § 2210. See June, 577
F.3d at 1237; Lujan v. Regents of Univ. of Cal., 69 F.3d 1511, 1518 (10th Cir.
1995). The parties agree § 2210 itself contains no federal safety standards that
could provide the standard of care in a PAA action. Instead, § 2210 primarily
addresses the indemnification and limitation of liability components of the PAA.
Accordingly, § 2014(hh) does not expressly preempt state tort law.
Defendants’ remaining preemption arguments focus on conflict
preemption. 16 State law is preempted due to its conflict with federal law “where it
is impossible for a private party to comply with both state and federal
requirements, or where state law stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.” English v. Gen. Elec.
Co., 496 U.S. 72, 79 (1990) (citation and quotations omitted). Defendants argue
the federal government’s regulation of nuclear safety conflicts with the application
of state tort law in a public liability action. While the Supreme Court has
indicated only the federal government can directly regulate nuclear safety, neither
this court nor the Supreme Court has analyzed whether state tort standards of care,
16
Defendants allude to field preemption in their brief, but never develop the
issue. At oral argument, counsel was given an opportunity to clarify the nature of
Defendants’ argument and expressly stated their argument is premised on conflict
preemption only. Accordingly, this court does not address field preemption.
-26-
which may have some indirect effect on nuclear safety, are preempted by federal
law. See Pac. Gas & Elec. Co. v. State Energy Res. Conservation & Dev.
Comm’n, 461 U.S. 190, 208 (1983).
Because Defendants advocate preemption, they bear the burden of showing
that federal and state law conflict. See Silkwood v. Kerr-McGee Corp., 464 U.S.
238, 255 (1984). The court is sympathetic to Defendants’ generic argument that
directing a nuclear facility to comply with federal safety regulations, while also
permitting tort recovery under a generic state tort standard of care, may lead to
confusion regarding the levels at which the facility must operate to avoid
liability. 17 The existence of such a conflict could defeat one of the PAA’s primary
purposes, the encouragement of private nuclear development. The record,
however, is not clear as to the particular federal regulations or statutes Defendants
believe actually conflict with any applicable state tort standards of care during the
relevant periods. Nor do Defendants pinpoint any state tort standards of care in
the trespass and nuisance context they believe have been displaced by federal
nuclear safety regulations.
The district court’s orders shed no additional light on this issue. The district
court never fully conducted this analysis because it believed the Supreme Court’s
17
We note, however, Silkwood recognized Congress’s willingness to accept
the tension between the federal government’s exclusive regulation of nuclear
safety and the pre-1988 PAA’s incorporation of state-law remedies. Silkwood v.
Kerr-McGee Corp., 464 U.S. 238, 255-56 (1984).
-27-
decision in Silkwood established Congress’s intent that state tort law broadly
govern public liability actions. In Silkwood, the Supreme Court concluded
punitive damages could be awarded against the operator of a nuclear facility
because under the then-existing statutory scheme, including the pre-1988 PAA,
Congress intended to permit any tort remedies available under the applicable state
law. Id. at 256. Applying that principle here, the district court determined the
1988 Amendments did not alter this regime, but rather expressly maintained the
applicability of state tort law in PAA actions. See 42 U.S.C. § 2014(hh).
But the PAA’s requirement that “the substantive rules for decision in . . . [a
public liability action] shall be derived from the law of the State in which the
nuclear incident involved occurs” does not displace otherwise applicable federal
law. 42 U.S.C. § 2014(hh). It merely provides that the PAA itself does not
displace state law, unless there is a conflict with § 2210. There are other possible
sources of federal law that might preempt state law, and the PAA does not
expressly make these standards irrelevant to resolving a plaintiff’s PAA action. If
Defendants are able to identify federal statutes, regulations, or other binding safety
standards that controlled their conduct with respect to the class properties during
the relevant time period, the district court must determine whether those particular
standards are in conflict with any applicable state tort standard of care. 18
18
Plaintiffs’ brief describes the documents which Defendants presented to
the district court. These documents appear to reference the applicable safety
(continued...)
-28-
On remand, the district court shall permit Defendants to identify the
particular federal regulations or statutes they believe preempt state law.
Specifically, the district court shall consider whether the federal standards
Defendants identify carry the force of law or controlled Defendants’ conduct with
respect to the off-site contamination that occurred here. Defendants must also
indicate the particular standards of care applicable to a state law trespass or
nuisance claim they believe are in conflict with any such regulations. Finally, the
district court must determine whether any such federal standards actually conflict
with the relevant state tort standards of care. 19
18
(...continued)
standards Defendants believe control. The documents include various letters,
handbooks, manuals, memos, and Department of Energy Orders. Although it is
not clear that any of the standards mentioned in these documents have the force of
law or would have controlled the sort of off-site contamination that occurred here,
these issues have not been adequately presented to this court. Without a thorough
analysis of the statutes or regulations Defendants believe governed their conduct,
this court cannot determine whether any conflict exists.
19
This court is aware that at least five other circuits have concluded federal
nuclear safety standards control in a PAA action, rather than traditional state tort
standards of care. See In re Hanford Nuclear Reservation Litig., 534 F.3d 986,
1003 (9th Cir. 2008); Roberts v. Fla. Power & Light Co., 146 F.3d 1305, 1308
(11th Cir. 1998); Nieman v. NLO, Inc., 108 F.3d 1546, 1552-53 (6th Cir. 1997);
O’Connor v. Commonwealth Edison Co., 13 F.3d 1090, 1100 (7th Cir. 1994); In
re TMI Litig. Cases Consol. II, 940 F.2d 832, 859-60 (3d Cir. 1991). In these
cases, however, it appears the courts’ holdings were responsive to arguments
involving field preemption. As previously mentioned, supra n.16, Defendants
have not presented a field preemption argument in this appeal. Rather, they have
presented only a conflict preemption argument. This court is unable to find any
circuit decision based on the conflict preemption argument Defendants present in
this appeal.
-29-
D. Plaintiffs’ Nuisance Claims
Defendants next argue the district court’s instructions on Plaintiffs’
nuisance claims were legally incorrect. Specifically, Defendants argue Colorado
law does not permit a risk-based theory of nuisance which lacks scientific
foundation. Defendants also argue that in order to prove they substantially and
unreasonably interfered with Plaintiffs’ use and enjoyment of their property,
Colorado law requires Plaintiffs to show Defendants’ emissions exceeded any
relevant federal or state safety standards. The court reviews these questions of law
de novo. Martinez, 572 F.3d at 1132.
1. Irrational Fear as a “Substantial” and “Unreasonable” Interference
Under Colorado law, a plaintiff asserting a nuisance claim must establish an
interference with the use and enjoyment of his property that is both “substantial”
and “unreasonable.” 20 Public Serv. Co. of Colo. v. Van Wyk, 27 P.3d 377, 391
(Colo. 2001). The district court instructed the jury that Plaintiffs could meet their
burden of establishing an interference with the use and enjoyment of their
properties if they proved plutonium contamination from the activities at Rocky
Flats exposed them to either “some increased risk of health problems” or “a
20
On its face, the state-law “interference with use” standard presents a
lower threshold than the PAA’s “loss of use” standard. Accordingly, if a plaintiff
establishes a “loss of use” under the PAA, he necessarily establishes an
“interference with use” under Colorado law. This does not, however, relieve a
plaintiff of his burden of establishing the additional nuisance requirements under
Colorado law that any interference must also be “substantial” and “unreasonable.”
-30-
demonstrable risk of future harm.” We agree with the district court that a jury
may find the presence of radioactive contamination creates an actual risk to health
and thereby interferes with a plaintiff’s use or enjoyment of his land if the
contamination disturbs the plaintiff’s comfort and convenience, including his
peace of mind, with respect to his continued use of the land. See Cook v. Rockwell
Int’l Corp., 273 F. Supp. 2d 1175, 1203-04 (D. Colo. 2003). But that is not the
end of the inquiry. Any interference with a plaintiff’s use and enjoyment of his
property must be both “substantial” and “unreasonable.” Under Colorado law, an
interference is deemed “substantial” if “it would have been offensive or caused
inconvenience or annoyance to a reasonable person in the community.” Saint
John’s Church in Wilderness v. Scott, 194 P.3d 475, 479 (Colo. App. 2008). In
determining whether an interference is “unreasonable,” the jury “must weigh the
gravity of the harm and the utility of the conduct causing that harm.” Van Wyk, 27
P.3d at 391.
The jury was properly instructed on the elements of a nuisance claim as well
as the definitions of “substantial” and “unreasonable.” While the resolution of
these issues typically involves questions of fact, a scientifically unfounded risk
cannot rise to the level of an unreasonable and substantial interference. To the
extent Plaintiffs rely on anxiety from an increased risk to their health as an
interference with the use and enjoyment of their properties, that anxiety must arise
from scientifically verifiable evidence regarding the risk and cannot be wholly
-31-
irrational. The district court concluded otherwise in light of its review of
Restatement (Second) of Torts § 821F, cmt. f, which states:
In determining whether the harm would be suffered by a normal
member of the community, fears and other mental reactions common
to the community are to be taken into account, even though they may
be without scientific foundation or other support in fact. Thus the
presence of a leprosy sanatarium in the vicinity of a group of private
residences may seriously interfere with the use and enjoyment of land
because of the normal fear that it creates of possible contagion, even
though leprosy is in fact so rarely transmitted through normal contacts
that there is no practical possibility of communication of the disease.
This court previously cast doubt on whether Colorado would follow this rule,
given the potential for anachronistic results. Boughton v. Cotter Corp., 65 F.3d
823, 832 n.13 (10th Cir. 1995). Instead, we suggested in Boughton that Colorado
courts would “require[] some evidence to substantiate the fears.” Id. Otherwise, a
plaintiff could state a viable nuisance claim any time neighboring property owners
contracted a misunderstood disease, whether contagious or not. Such a result
would be absurd.
Plaintiffs are unable to point to any Colorado case in the fifteen years since
Boughton that has endorsed the Restatement’s position. More importantly, the
Restatement conflicts with Colorado’s “unreasonableness” requirement, which
expressly requires the trier of fact to “weigh the gravity of the harm and the utility
of the conduct causing that harm.” Van Wyk, 27 P.3d at 391. No reasonable jury
could find that irrational anxiety about a risk that cannot be scientifically verified
tips this balance so as to render the interference unreasonable. Accordingly, we
-32-
now confirm what we previously suggested in Boughton and predict that the
Colorado Supreme Court would not permit recovery premised on a finding that an
interference, in the form of anxiety or fear of health risks, is “substantial” and
“unreasonable” unless that anxiety is supported by some scientific evidence. The
district court erred in concluding otherwise.
2. The Role of Federal and State Safety Standards
Defendants also argue the district court erred in trying the nuisance claims
without reference to applicable federal and state safety regulations. Specifically,
Defendants argue the jury should have been instructed that if plutonium
contamination in the property class area falls within the applicable federal or state
safety levels, it cannot be deemed “unreasonable.” The Defendants point to the
Colorado Supreme Court’s decision in Van Wyk, where the plaintiffs claimed the
defendant’s upgrades to electrical lines created an intentional nuisance due to
increased noise, electromagnetic fields, and radiation particles invading the
property. Id. at 382. The defendant argued the relevant agency’s approval of the
voltage involved in the upgrades rendered any interference per se reasonable. Id.
at 393. The Colorado Supreme Court indicated that to the extent an agency’s
regulations actually quantify the standard of reasonableness for the particular
conduct involved, this determination controls in the nuisance context. Id. Under
the facts of Van Wyk, however, the court concluded the agency’s determination of
reasonableness “lacked any specificity with respect to electromagnetic fields and
-33-
noise” such that the complaint stated a viable nuisance claim because it alleged the
defendant’s conduct was unreasonable to the extent it exceeded the noise and
electromagnetic fields the agency anticipated might occur. Id. at 393-94. Under
the circumstances, the court concluded the plaintiffs sufficiently pleaded a
nuisance claim.
In light of Van Wyk, Defendants proposed jury instructions stating
Defendants’ release of plutonium could only be found unreasonable if the release
did not comply with controlling state and federal standards. The district court
rejected this instruction, concluding Van Wyk dealt with quasi-judicial
determinations that differ in nature from the federal and state regulations
identified in Defendants’ proposed jury instructions. The district court believed
the safety regulations offered by Defendants were more akin to zoning regulations
and ordinances and, under Colorado case law, compliance with zoning statutes
does not insulate a defendant from nuisance liability. Hobbs v. Smith, 493 P.2d
1352, 1354-55 (Colo. 1972).
This court need not decide whether Van Wyk applies here because we agree
with the district court’s alternative ruling that none of the regulations referenced in
Defendants’ proposed jury instructions are on point. For instance, Defendants rely
on a regulation issued by the Colorado State Board of Health which states,
“Contamination of the soil in excess of 2.0 disintegrations per minute (0.03 Bq) of
plutonium per gram of dry soil . . . presents a sufficient hazard to the public health
-34-
to require the utilization of special techniques of construction upon property so
contaminated.” 6 Colo. Code Regs. 1007-1:4.60. This regulation says nothing
about the minimum level at which such contamination becomes unreasonable. It
merely indicates special care must be taken for construction on property
contaminated at the particular level indicated. Similarly, Defendants point to
documents issued by the Atomic Energy Commission and the Department of
Energy. It is not clear whether any of these documents have the force of law or
apply to safety levels outside a nuclear facility, and the issue is inadequately
briefed for resolution here. 21
Accordingly, Defendants have failed to establish that any of the state or
federal standards referenced in their proposed jury instructions overcome the
general rule that the jury must determine whether a given interference is
“unreasonable” by weighing the harm against the utility of the interference.
E. Plaintiffs’ Trespass Claims
Defendants next argue the district court erred in failing to require Plaintiffs
to prove physical damage to the property as part of their trespass claims.
According to Defendants, this is because Plaintiffs can only pursue intangible
21
As we previously noted, it is unclear whether Defendants seek to rely on
these particular documents as preempting state law. As the issue has not been
briefed, the court declines to address the question of whether these documents
create a conflict between federal and state law.
-35-
trespass claims, given the nature of the contamination at issue. The court reviews
this question of law de novo. Martinez, 572 F.3d at 1132.
We note Defendants’ position that Plaintiffs must establish physical damage
to the property as an element of their trespass claims overlaps with the PAA’s
“damage to property” standard. A plaintiff, however, is not limited to proving
damage to property in order to proceed with a PAA claim. Rather, a plaintiff may
establish any of the injuries listed in 42 U.S.C. § 2014(q) to meet the PAA’s
threshold requirement of proving a nuclear incident occurred. For instance, a
plaintiff who establishes a loss of use of their property has met his threshold
requirement under § 2014(q), but must still prove physical damage to the property
in order to prevail on a Colorado intangible trespass claim. Accordingly, we
proceed to the issue of whether Plaintiffs’ trespass claims must be tried under an
intangible trespass theory.
The parties agree that to prevail under a traditional Colorado trespass claim,
a plaintiff must establish only “a physical intrusion upon the property of another
without the proper permission from the person legally entitled to possession.” Van
Wyk, 27 P.3d at 389. A plaintiff need not establish any injury to his legally
protected interest in the land or damage to the land itself. Id. In Van Wyk, the
Colorado Supreme Court recognized the viability of trespass claims involving
invasions that are intangible, such as noise, radiation, or electromagnetic fields.
Id. at 390. Unlike a traditional trespass claim, however, the court made it clear an
-36-
intangible trespass claim requires “an aggrieved party . . . to prove physical
damage to the property [was] caused by such intangible intrusion.” Id.
Defendants argue the instant case can only proceed as an intangible trespass claim,
requiring the plaintiff class to establish the existence of physical damage to their
properties in order to prevail. Consequently, we must determine whether the
Colorado Supreme Court would require a trespass claim involving the invasion of
plutonium particles onto real property to proceed as a traditional or intangible
trespass claim.
In Van Wyk, the Colorado Supreme Court defined “intangible invasion” in
the context of the plaintiffs’ inverse condemnation claim, and the court held that
invasions in the forms of noise, electromagnetic fields, and radiation waves are
intangible invasions. Id. at 387. The court explained:
The meaning of the term “intangible” is something that is
impalpable, or incapable of being felt by touch. . . . We conclude that
noise, despite being perceptible through hearing, is impalpable, and
thus, intangible.
Similarly, we also conclude that electromagnetic fields and
radiation waves emitted by powerlines are intangible. Neither
electromagnetic fields nor radiation waves produced by electric lines
can be perceived by any of the senses. Instead, they are both similar
to television and radio waves, which surround us at all times but
which are completely imperceptible. . . . While such waves and fields
might have some sort of physical effect upon the body,
electromagnetic fields and radiation waves of the type at issue here
are ubiquitous and our senses are incapable of perceiving them. As
such, we agree . . . that electromagnetic fields and radiation waves
emitted by powerlines are intangible intrusions upon land.
-37-
Id. at 387-88 (citations omitted).
In recognizing that other jurisdictions permitted trespass claims involving
intangible intrusions to proceed, the Colorado Supreme Court did more than
examine cases involving non-physical intrusions such as noise, electromagnetic
fields, and radiation waves. The court also examined cases involving the deposit
of particulate not visible to the human eye, as well as the deposit of radioactive
materials. Id. at 390. At no time did the court in Van Wyk draw a distinction
excepting these impalpable intrusions from its general analysis.
It is clear from the Colorado Supreme Court’s discussion of this issue in
Van Wyk that, under Colorado law, whether a trespass claim falls under the
traditional rubric or must be pursued as an intangible trespass is determined by
whether the intrusion is palpable. Plaintiffs do not dispute that the plutonium
particles present on their properties are impalpable and imperceptible by the
senses. Although we recognize the particles in question have mass and are
physically present on the land, our interpretation of Colorado law compels us to
conclude that because the particles are impalpable, the trespass alleged here must
be tried as an intangible trespass. Consequently, Plaintiffs are required to prove
actual physical damage to their properties in order to prevail on their trespass
claims.
Plaintiffs argue the discussion of intangible invasions in Van Wyk should not
control because a more recent case, Hoary v. United States (In re Hoary), 64 P.3d
-38-
214 (Colo. 2003), recognized that contamination physically present within
property supports a traditional trespass claim. In Hoary, the Colorado Supreme
Court’s decision addressed only the two narrow questions certified by the Tenth
Circuit pertaining to whether the contamination of the property constituted a
continuing trespass or nuisance. We agree with Defendants that, in Hoary, the
Colorado Supreme Court treated the presence of contaminants as if it were not in
dispute. Indeed, the decision explains, “For purposes of answering the certified
questions before us, no dispute exists about whether the United States released
TCE into the ground and by doing so, invaded Hoary’s property.” Id. at 222.
Because no dispute existed, the Hoary court only examined whether the facts in
question could support a claim that the trespass or nuisance was continuing. The
case does not stand for the proposition that impalpable contamination of property
constitutes a tangible invasion that can be tried as a traditional trespass claim. In
fact, it is not clear from Hoary whether the contamination in question was
impalpable. The Colorado Supreme Court never discussed the issue because it was
not presented.
Jury Instruction No. 3.3 directed that to prove their trespass claims,
Plaintiffs are not required to show that plutonium is present on the
Class Properties at any particular level or concentration, that they
suffered any bodily harm because of the plutonium or that the
presence of plutonium on the Class Properties damaged these
properties in some other way.
-39-
This was erroneous as a matter of Colorado law and on remand, Plaintiffs shall be
required to prove the plutonium contamination caused “physical damage to the
property” in order to prevail on their trespass claims. Van Wyk, 27 P.3d at 390.
F. Class Certification
As the district court’s class certification analysis failed to consider whether
Plaintiffs could establish various elements of their PAA claims, supplied both by
federal and state law, this court must reverse the district court’s class certification
ruling. Upon remand, the district court shall revisit the class certification question
to determine whether Plaintiffs can establish the elements of their claims,
including the PAA threshold requirements, on a class-wide basis. Because we now
reverse the district court’s class certification ruling, we need not reach the
question of whether the district court’s subdivision of the class for damages
purposes was proper.
G. Punitive Damages
Defendants also argue the district court erred in instructing the jury that it
could award punitive damages in the instant action. Defendants argue the PAA
precludes punitive damages against them because their agreement with the federal
government requires the government to indemnify them for any such damages.
The court reviews this question of law de novo. Martinez, 572 F.3d at 1132.
-40-
In 1988, the PAA was amended to preclude awards of punitive damages
when a defendant in a PAA action will be indemnified by the federal government
for damages. 22 It states:
No court may award punitive damages in any action with respect to a
nuclear incident . . . against a person on behalf of whom the United
States is obligated to make payments under an agreement of
indemnification covering such incident . . . .
42 U.S.C. § 2210(s). The district court concluded this provision applied only as to
nuclear incidents occurring on or after August 20, 1988, the date the amendments
took effect, and permitted Plaintiffs to pursue punitive damages with respect to
nuclear incidents on or after that date.
This court agrees that § 2210(s) is only applicable to nuclear incidents
occurring on or after August 20, 1988. Defendants do not dispute that Congress
opted not to make § 2210(s) retroactive. Consequently, the bar against punitive
damages in this section does not apply to any conduct occurring before the 1988
Amendments took effect. The Supreme Court’s decision in Silkwood recognized
the availability of punitive damages under the PAA, prior to the 1988
Amendments, without reference to an exception in the presence of an indemnity
agreement. 464 U.S. at 255-56. Rather, the Court recognized that “in enacting
and amending the [PAA], Congress assumed that state-law remedies, in whatever
form they might take, were available to those injured by nuclear incidents.” Id. at
22
There is no dispute that Defendants have entered into indemnification
agreements with the government.
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256. The Silkwood decision made it clear that prior to the enactment of the 1988
Amendments, federal law included no prohibition whatsoever on the availability of
punitive damages.
Defendants argue, however, that § 2210(s) merely codified the law as it
already existed prior to the 1988 Amendments. But Defendants cite to no binding
legal authority suggesting punitive damages were always barred when an
indemnification agreement was in place. Nor do Defendants point to any pre-1988
Amendments case prohibiting punitive damages in such an instance. Additionally,
the Defendants never explain why the federal government is not entitled to enter
into a binding agreement to indemnify a party for punitive damages.
Instead, Defendants rely on two sentences from a Senate Report which
states, “The bill clarifies that an award of punitive damages is prohibited if the
award would result in any obligation of the United States to make any payments
for public liability. This reflects the longstanding policy that the Federal
government should not be liable for punitive damages.” S. Rep. No. 100-218, at
11 (1987), reprinted in 1988 U.S.C.C.A.N. 1476, 1487. The Senate Report cited
by the Defendants, however, could just as easily be read to conflict with
Defendants’ position, because after describing the provisions relating to punitive
damages, the Report states, “The bill does not otherwise affect current law
regarding punitive damages.” Id. This suggests those portions of the 1988
Amendments dealing with punitive damages did alter the law as it existed at that
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time, and the bar against punitive damages for post-1988 Amendments conduct is
the only alteration to the then-existing scheme. Absent any indication punitive
damages against an indemnified party were prohibited prior to the 1988
Amendments, we cannot agree with Defendants’ position. 23
Defendants also argue that even if punitive damages are recoverable under
the pre-1988 PAA, the district court’s instruction was erroneous as a matter of
law. Specifically, Defendants argue the district court erred by permitting the jury
to award punitive damages based on conduct occurring prior to August 20, 1988,
even if Plaintiffs sustained no injury prior to that date. In issuing its ruling, the
district court noted that the definition of “nuclear incident” refers to “any
occurrence within the United States causing . . . damage to property . . . arising out
of or resulting from the radioactive, toxic, explosive or other hazardous properties
of source, special nuclear, or byproduct material.” 42 U.S.C. § 2014(q). Focusing
on “occurrence,” the district court reasoned, “It is the date of such occurrences,
not the date on which the relevant occurrences caused property damage, that
determines application of the section’s bar on punitive damages awards.” Cook,
273 F. Supp. 2d at 1212. As a result, the court instructed the jury:
For Plaintiffs to recover punitive damages, they must prove beyond a
“reasonable doubt” that the conduct of the Defendant that committed
the trespass and/or nuisance was “wilful and wanton.” In deciding
23
The parties do not dispute that punitive damages have always been, and
continue to be, available against defendants who have no indemnification
agreement with the government. See Silkwood, 464 U.S. at 251 n.12 & 256.
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this question with respect to any conduct relating to plutonium or
other radioactive materials, you can only consider the Defendant’s
conduct up to August 20, 1988, including conduct occurring before
this date that resulted in harm on or after that date.
Defendants argue this instruction was error, because it is undisputed the
1988 Amendments bar punitive damages against indemnified parties with respect
to any “nuclear incident” occurring after August 20, 1988. Because any
occurrence deemed a nuclear incident must cause some injury, Defendants suggest
that no nuclear incident can exist until the date of the injury. In other words,
Defendants believe the jury should not have been permitted to consider any
conduct unless it actually caused a PAA injury under 42 U.S.C. § 2014(q) prior to
August 20, 1988. According to Defendants, by instructing the jury it could
consider conduct occurring prior to August 20, 1988, which did not result in a
PAA injury until after August 20, 1988, the district court equated “conduct” with
“nuclear incident” and allowed the jury to consider nuclear incidents for which
punitive damages are expressly barred by the PAA’s 1988 Amendments.
Defendants confuse the findings necessary to establish a compensable
injury, however, with the findings necessary to support a punitive damages award.
As explained earlier, a plaintiff cannot proceed with a PAA claim unless it first
establishes a nuclear incident occurred. 42 U.S.C. § 2210(n)(2). A plaintiff must
establish that the occurrence in question actually caused a PAA injury. 42 U.S.C.
§ 2014(q). All elements of the PAA claim must be proved to recover
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compensatory damages for the injury. With respect to punitive damages, however,
once a plaintiff establishes a nuclear incident, the jury’s focus must turn to the
conduct of the defendant rather than the injury sustained by the plaintiff. The
purpose of punitive damages is to punish the defendant’s willful and wanton
conduct and deter others from engaging in similar conduct. Lira v. Shelter Ins.
Co., 913 P.2d 514, 517 (Colo. 1996). The injury resulting from the conduct is
compensated separately.
As the district court ruled, the statutory definition makes it clear the
relevant date of any nuclear incident is the date of the “occurrence,” not the date
of the injury. Section 2014(q) defines a “nuclear incident” as “any occurrence . . .
causing . . . bodily injury, sickness, disease, or death, or loss of or damage to
property, or loss of use of property, arising out of or resulting from the
radioactive, toxic, explosive, or other hazardous properties of source, special
nuclear, or byproduct material.” In determining whether a particular occurrence is
a nuclear incident, the jury must simply determine whether that occurrence
ultimately caused one of the specified injuries. If so, the occurrence constitutes a
nuclear incident. Had Congress intended for the injury to control the timing of the
nuclear incident, it could have defined nuclear incident as “the infliction of an
injury upon person or property arising from the use of nuclear substances.”
Instead, Congress focused the definition on an “occurrence,” the event which sets
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the causal chain in motion. Therefore, the date of the occurrence controls when
determining whether the nuclear incident took place prior to August 20, 1988.
For instance, if a defendant’s release of plutonium in 1985 caused an injury
in 1990, a proper explanation of that event in light of the statutory definition
would be that the 1985 occurrence was a nuclear incident because it ultimately
caused a PAA injury. It would be nonsensical to say the 1990 injury constitutes
the nuclear incident even though the conduct occurred years before. The
definition directly ties the “occurrence” to the “nuclear incident.”
While the district court’s decision to focus on the date of the occurrence was
correct, its instruction failed to instruct the jury how to identify the date of the
occurrence. Here, the “occurrence” constituting a nuclear incident in a PAA
action must arise from Defendants’ release of plutonium onto Plaintiffs’
properties. The jury instruction ultimately given, however, permits consideration
of Defendants’ conduct prior to August 20, 1988, regardless of whether an
“occurrence” causing Plaintiffs’ injury took place prior to that date. This is an
important distinction, because certain conduct prior to August 20, 1988, might
contribute to a nuclear incident, even though the release of plutonium might not
have occurred until after August 20, 1988. For instance, if a defendant began
improperly storing drums containing nuclear waste in 1987 and consistently failed
to maintain them, but no waste leaked from the drums until after August 21, 1988,
a jury could not find the “occurrence” took place prior to August 20, 1988.
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The district court’s jury instruction should have required the jury to
determine whether any nuclear incident occurred prior to August 20, 1988. If so,
the jury could then consider whether the conduct causing any nuclear incident
occurring before August 20, 1988, was wilful and wanton beyond a reasonable
doubt. In the event this case is re-tried, the jury should be instructed that in
deciding whether to award punitive damages, it may consider Defendants’ conduct
that contributed to a release of plutonium only if the release of plutonium both
occurred prior to August 20, 1988, and ultimately caused Plaintiffs’ injury,
regardless of whether the injury manifested itself before or after that date. If the
jury finds beyond a reasonable doubt that such conduct was willful and wanton,
the jury is permitted to award punitive damages against Defendants.
H. Defendants’ Remaining Challenges
The court declines to reach Defendants’ evidentiary challenges to Plaintiffs’
trial references to the government’s indemnity obligations or the Department of
Energy’s failure to fully comply with discovery. Because the case must be
remanded on other grounds, the court need not address whether the district court
abused its discretion with respect to evidentiary issues that may not arise during a
new trial. Likewise, the court will not address Defendants’ challenge to the
district court’s post-trial award of prejudgment interest. This issue may not arise
on remand, and if it does, any error can easily be rectified in a future appeal
without necessitating a new trial.
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I. Plaintiffs’ Cross-Appeal
Plaintiffs have presented their cross-appeal on conditional issues to be
raised only if they lose related issues presented in Defendants’ primary appeal. As
to a number of these issues, Defendants argue Plaintiffs cannot present their cross-
appeal in a conditional manner. Defendants are incorrect. A party who prevails in
the district court is permitted to conditionally raise issues in a cross-appeal
because if the appellate court decides to vacate or modify the trial court’s
judgment, the judgment may become adverse to the cross-appellant’s interests.
United States ex rel. Burlbaw v. Orenduff, 548 F.3d 931, 942 (10th Cir. 2008).
Some, but not all, of Plaintiff’s cross-appeal issues are challenges this court
could address in order to guide the district court on remand. Nevertheless, any
issues raised on cross-appeal must be adequately presented. See Berna v. Chater,
101 F.3d 631, 632 (10th Cir. 1996). As Plaintiffs have failed to do so, we decline
to consider the cross-appeal.
IV. CONCLUSION
For the foregoing reasons, this court DENIES Defendants’ motion to
dismiss for lack of subject matter jurisdiction and DENIES all other motions
pending before this court as moot. Additionally, this court REVERSES and
REMANDS the case to the district court. We DIRECT the district court to vacate
the judgment and conduct further proceedings not inconsistent with this opinion.
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