Eighth Circuit Creates Circuit Split Under Price-Anderson Act, the Statute Governing Tort Suits Against Nuclear Operators

Faced with mounting energy demands and decarbonization commitments, industry throughout the country is ramping up investments in nuclear energy. Microsoft, for instance, announced last month that it is financing the reopening of Three Mile Island, a mothballed nuclear power plant near Harrisburg, Pennsylvania. At the same time, and despite the relative safety of nuclear power, the plaintiffs’ bar has brought a number of toxic tort actions over the past several years against existing nuclear fuel cycle operators throughout the country.

These cases are governed by the Price-Anderson Act (PAA), enacted 50 years ago to spur private investment in nuclear energy.¹ Among other things, the PAA creates a federal “public liability action” for injury arising from a “nuclear incident.” In cases arising from nuclear incidents, the PAA “transforms” a state-law action into a federal public liability action.² Specifically, it provides original federal-question jurisdiction.³ And it has a “preemption provision” — 42 U.S.C. § 2014(hh).⁴ Accordingly, the PAA defines a “public liability action” as a federal action arising under the PAA, which borrows the substantive law of the forum state “unless such law is inconsistent with the provisions of” the PAA.⁵

Until October 30, 2024, the five federal courts of appeals that had confronted the question had all held that states’ standards of care in tort suits conflict with the PAA, such that “federal regulations must provide the sole measure of the defendants’ duty in a public liability cause of action.”⁶

With the Eighth Circuit’s decision in Mazzocchio v. Cotter Corporation, --- F.4th ---, 2024 WL 4612546 (8th Cir. Oct. 30, 2024), the court ruled that federal regulatory standards do not form the entire standard of care that governs tort cases brought under the PAA related to alleged radioactive exposures. States’ tort-law standards of care can and do apply. In so holding, Mazzocchio creates a stark circuit split. Whereas compliance with federal permitting limits should still protect most nuclear facilities from liability in a tort suit, facilities in the Eighth Circuit could now be subject to liability even when in full compliance with federally permitted radiation limits.

The question in these cases is one of federal preemption. As the near-unanimous view holds, “the field of nuclear safety has been occupied by federal regulation.”⁷ To incorporate a “state duty” into a public liability action would, therefore, infringe upon pervasive federal safety regulations in the field of nuclear safety.”⁸ These courts have also worried that a jury should not, in applying open-ended state-law standards governing negligence, decide “permissible levels of radiation exposure” or “the adequacy of safety procedures at nuclear plants” where the federal government has already brought ample scientific expertise to bear through notice-and-comment rulemaking.⁹ Applying a terse textualist approach to the PAA, the Eighth Circuit now disagrees.

In Mazzocchio, the plaintiffs claim that a group of defendants negligently disposed of and stored certain radioactive wastes, exposing them to tortious levels of radiation.¹⁰ Although the plaintiffs pleaded, among other things, a PAA claim, they did not plead that the defendants had violated federal permit standards, particularly the federal nuclear dosage limits.¹¹ The defendants moved to dismiss on those grounds, arguing that a PAA claim fails as a matter of law at the motion-to-dismiss stage unless it pleads a violation of applicable federal radiation standards.¹² The district court disagreed, concluding that, under certain (unarticulated) circumstances, state law could provide the standard of care in a PAA claim.¹³ Because the district court departed from the otherwise unanimous authority to the contrary, the district court agreed to certify the question for interlocutory appeal to the Eight Circuit.

In a brief opinion, the Eighth Circuit affirmed. Fundamentally, the Eighth Circuit reframes the question as one of statutory interpretation. In short, according to the court of appeals, because section 2210 contains no provision explicitly preempting state standards of care, federal regulations need not provide the exclusive standard of care in public liability actions.

The Eighth Circuit’s analysis rests on two main authorities: the text of 42 U.S.C. § 2014(ii) and the Supreme Court’s ruling in Silkwood v. Kerr-McGee, 464 U.S. 238 (1984).

In its analysis, the Eighth Circuit panel focused on section 2014(ii), which provides that the “substantive rules for decision in such [public liability] 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.” The court interpreted this provision of the PAA to mean that state law is preempted only where it conflicts with a specific and explicit provision of that statute, specifically 42 U.S.C. §2210. In so holding, the Eighth Circuit appeared to reject wholesale field preemption in the nuclear regulatory space and failed to explicitly preserve the possibility of conflict preemption where federal regulatory provisions conflict with state law.

The panel further analogized to Silkwood, a U.S. Supreme Court case from 1984 which held that the PAA did not preempt state-authorized punitive damages. In particular, the panel focused on the Supreme Court’s dicta surmising that, although “there is tension between the conclusion that safety regulation is the exclusive concern of the federal law and the conclusion that a State may nevertheless award damages based on its own law of liability[,] ... Congress intended to stand by both concepts and to tolerate whatever tension there was between them.”¹⁴ According to the Eighth Circuit, this language broadly explains “how exclusive federal regulatory power and state tort law can operate together.”¹⁵ The Eighth Circuit panel concluded that this statement supports the conclusion that “state law standards of negligence and strict liability would continue to play a role in compensating those injured in a nuclear accident, notwithstanding the federal government’s occupation of the field of nuclear safety.”¹⁶

It bears noting that four years after Silkwood, Congress reacted by amending the PAA to preclude state-authorized punitive damages and to create a “public liability action.” Since then, other courts have narrowed Silkwood’s application in subsequent PAA cases. For instance, as the Eleventh Circuit observed, Silkwood was brought not as a public liability action (i.e., a PAA action, subsequently created in the 1988 amendments), but “as a diversity tort action governed by Oklahoma law.”¹⁷ The Eighth Circuit’s Mazzocchio opinion acknowledges that the 1988 PAA amendments post-date Silkwood and argues that “the Court's understanding of the role that state tort law plays in a public liability action” stands.¹⁸ But as discussed by the Eleventh Circuit in Roberts, a PAA “public liability action” was a creation of the 1988 amendments that post-date Silkwood. Thus, counter to the language in the Eighth Circuit decision, the Supreme Court’s understanding of “the role that state tort law plays” as articulated in Silkwood could not have spoken (at least not directly) to public liability actions like the one at issue in Mazzocchio.

Despite the opinion’s brevity, the consequences of the Eighth Circuit’s decision in Mazzocchio are profound. In the Eighth Circuit, companies that handle nuclear fuel or waste can no longer rest easy when a federal regulator assures them of their compliance with federal regulations. Now, such companies may be exposed to substantial liability based on no more than a lay jury’s view of appropriate regulatory safeguards. With all signs pointing to certiorari, for now, different standards may apply to nuclear operations depending upon the circuit in which they operate.

We will continue to follow and report on other developments.

© Arnold & Porter Kaye Scholer LLP 2024 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.