Appellees Brief — Silkwood v. Kerr-McGee Corp.

Ce Tere Tee Oe eS Nee ee ee

No. 81-2159 -_

WSS-Sabre re Court, UST

FILED

IN THE

JUN 29 Wer

Supreme Court of the United Stgtes ae

oa :

Octoper Term, 1982

BILL M. SILK WOOD, Administrator of the

Estate of Karen G. Silkwood, Deceased,

Appellant,

v.

KERR-McCGEE CORPORATION, a Delaware corporation,

and KERR-McGEE NUCLEAR CORPORATION, a Dela-

ware corporation,

7 Appellees.

ON APPEAL PROM THE UNITED STATES COURT

OF APPEALS POR THE TENTH CIRCUIT

BRIEF FOR APPELLEES

C. Ler Coox, Jr. Wittiam G. Pau* i

Wiuiam Van Hacey L. E. STRINGER ' £

4 Wituaé T. McGaatn Joun J. Gaarrin, Jn. :

t PAmeta J. Kemps Harvey D. Evus

ce. Chadwell & Kayser, Lid. Crows & DUNLEVY 3”

te _ 8500 Sears Tower 1800 Mid-America Tower =

(312) 876-2100

i

QUESTIONS PRESENTED

1. Whether this Court has jurisdiction of the appeal.

2. Whether an award of punitive damages with respect to

a claim based on radiation hazards resulting from the operation

of a federally licensed and regulated plutonium plant is pre-

empted by the Atomic Energy Act.

3. Even if not so preempted, can such an award stand

when its personal injury predicate is barred by the exclusive

Oklahoma workers’ compensation remedy.

i

TABLE OF CONTENTS

QUESTIONS PRESENTED ............:cssseserseseveesersenenseneeees

TABLE OF CORN TIENTS 22.ccccccsccscsccscscvsecscsssscscssnssessseseeces

TABLE OF AUTHORITIES ..........c:ccecesesesseserensenssevseees

FO RIO cocsencscescenssescssessesnsscscssqssnsssasanssnenesteneereene

PE AETEEIIOS cccncsssszscsscssssccssssnesccnscsesnsesscnssestscseenenssstesesne

B. The Tenth Circuit Opimion ..................ccccceceeceeeeees

C. Present Posture of the Case..............ccccccscseeseeeneees

SUMMARY OF ARGUMENT .0000.......:c-cccccessesseeseeeeenees

TG ccteecetenstninenittinmemenmne

I. This Case Is Not Properly Before This Court on

Il. The Atomic Energy Act of 1954, as Amended,

Preempts Imposition of Punitive Damages in This

B. Punitive Damages Fall Within the Occupied

Fieid of Regulation of Nuclear Safety Con-

cerns.. cessashitnaganenenistenncstnaittinstieintatinineia

C. Punitive Damages Are Preempted Because

They Are an Obstacle to the Accom-

plishment of the Purposes of the Federal

Nuclear Regulatory Scheme

1. Punitive Damages Frustrate Congress’

Intent to Promote and Develop Nucie-

ar Energy

2. Punitive Damages Conflict with Con-

gress’ Express intent to Preciude Dual

Regulation of Radiation Hazards...

12

17

17

24

31

PAGE

D. The Price-Anderson Act Does Not Sanction

State Imposition of Punitive Damages............ 34

Ill. The Final, Non-Reviewable Holding by the

Tenth Circuit That the District Court Had No

Jurisdiction to Hear Appellant’s Personal Injury

Claim Eliminates the Basis for the Punitive Dam-

iv

TABLE OF AUTHORITIES

Cases:

Arrington v. Michigan- Wisconsin Pipeline Co., 632

F.2d 867 ( 10th Cir. 1980) .............

Barnes v. McKinney, 589 P.2d 698 ( Okla. Ct. App.

Calero-Toledo v. Pearson Yacht Leasing Co., 416

oe Gaee © CFD sncohcennnstntepsinrnncctccnctnhsinectniiniatiances

California v. Grace Brethren Church, 102 S.Ct.

2498 (1982)...... senipidichiepasitiitaiicsineitiammnightaiinindie

Carroll v. Dist. Court of Cherokee County, 579

SE ey ea

Charleston Fed. Savs. & Loan Ass'n v. Alderson,

ye HD ccicntiientetiiereciietimniniestiintetatans

City of Burbank v. Lockheed Air Terminal, Inc.,

GEE CE G6 C ISTEP ccraicnrecsitnishettsamncnvn

City of Detroit v. Murray Corp., 355 US. 489

(1958). ietideptinninveaaibbibtmmnaneedies

City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S.

tk | ee

City of Newport v. Fact Concerts, Inc., 453 U.S.

247 (1980)...

Crowther v. Seaborg, 312 F. — 1205 (D.Colo.

1970). ae

Davidson v. First Bank & Trust Co., 609 P.2d 1259

( Okla. 1976)

Dickson v. Mountain State Mut. Cas. Co., 650 P.2d

1 (N.M. 1982).

Duke Power Co. v. Carolina Environmental Study

Group, Inc., 438 U.S. 59 (1978)

PAGE

43

42

13

16

43

13,14

43

36, 40

PAGE

Dutton v. Evans, 400 U.S. 74 (1970) .......:cccccccceeeeees 15

Ellis v. Rocky Mountain Empire Sports, Inc., 602

ee 43

Farmer v. Carpenters, 430 U.S. 290 (1977)............ 29

Fornaris v. Ridge Tool Co., 400 U.S. 41 (1970)...... 12

Fuller v. Neundorf, 278 P.2d 836 ( Okla. 1954)....... 42

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974)... 25, 32

Hines v. Davidowitz, 312 U.S. 52 (1941) .........:.c00 30

Hobbs v. Watkins, 481 P.2d 746 (Okla. 1971)........ 45

Illinois v. General Elec. Co., 683 F.2d 206 (7th Cir.

St iaatictaiicinratiibaline tiatdidutepesesipaniantindtensiainigaapeiassineetes 16

Illinois vy. Kerr-McGee Chemical Corp., 677 F.2d

571 (7th Cir.) cert. denied, __.. U.S.___, 193

SEES SSE ae eee 18

IBEW v. Foust, 442 U.S. 42 (1979) ...cccccccccccceesceeeees 26, 32

Jett Bros. Distilling Co. v. City of Carrollton, 252

Na ET chia citncerpcieaddanemtnnintetnanteenesetens 14

Johnson v. International Harvester Co., 487 F.

Sepp. 1176 (D.N.D. 1960) ...cccccoserocccecccesesececeseesee 40

Kelsay v. Motorola, Inc., 384 N.E.2d 353 (Il.

Sve insitisictindeananinshionapsidicdteistiiediieialadiimeicrensinness 28

Kulko v. California Superior Court, 436 U.S. 84

UIE Si cinseenssininsaunapeiiiintiiodannaidiaiddiennetiantsse 13

Liberty Mut. Ins. Co. v. Stevenson, 368 S.W.2¢d 760

STITT h i ticciceteninipencnmnasantnitienininiantentiitade 43

Linscott v. Rainier Nat. Life Ins. Co., 606 P.2d 958

CIID cccepetecnisinenenncesimnsins —

Mahoney v. United States, 220 F. Supp. 23 (E.D.

Tenn. 1963), aff'd, 339 F.2d 605 (6th Cir. 1964) 4

Malone v. White Motor Corp., 435 US. 497

TTI ioral ad centiaitalllidlandatasnsdinieanitennstilitinataiitias 15

Memphis Natural Gas Co. v. Beeler, 315 U.S. 649

Miller v. Board of County Commrs., 290 U.S. 586

(1933)

Nader v. Allegheny Airlines, & 426 U.S. 290 (1976)...

Nixon v. Oklahoma City, 555 P.2d 1283 (Okla.

1976)

North v. United States Steel Corp., 495 F.2d 810

Cs i aliiiciitrtasticcerseniastnesimntncctnnivetenieeeees

Northern States Power Co. v. Minnesota, 447 F.2d

1143 (8th Cir. 1971), aff'd mem., 405 U.S. 1035

(1972).

SORES EE EEE EEE EEE EEE EE EEE EEEEEEEEEEEEEEES

SESE E TEES EEE TEESE EERE EEE EEE TEESE EE®

Pacific Gas & Electric Co. v. State Energy Re-

sources Conservation & Dev. Comm’n, —___. U.S.

—_., 103 S.Ct. 1713 (1983) .

In re Paris Aircrash, 622 F.2d 1315 (9th Cir.),

cert. denied, 449 U.S. 976 (1980)

Perry Educ. Ass’n vy. Perry Local Educator’s Ass’n,

US. ——, 103 S.Ct. 948 ( 1983).................

Reeves v. Williamson, 317 U.S. 593 (1942).............

San Diego Unions v. Garmon, 359 US. 236

(1959)

Siegel v. AEC, 400 F.2d 778 (D.C. Cir. 1968)........

Silber v. United States, 370 U.S. 717 ( 1962)...........

Smith v. Wade, _. U.S. — _, 103 S.Ct. 1625

(1983)

Town of Jackson v. Shaw, 569 P.2d 1246 (Wyo.

1977)

PAGE

14, 16

14

24

25

43

16, 18, 19,

26, 34

24, 25, 28

28

PAGE

Train v. Colo. Pub. Interest Research Group, 426

i IIIT ccecceschnmegrecitiitapeamneatnniicaniiiliaaniiduees 18

United Automobile Workers v. Russell, 356 U.S.

Ee ee oes ane = 29

United Construction Workers v. Laburnum Con-

struction Corp., 347 U.S. 656 (1954) ........cccccesees 29

Washington State Bldg. & Construction Trades

Council v. Spellman, 684 F.2d 627 (9th Cir.

Ee eee Te 16, 18

Weber v. Armco, Inc., 54 Okla. B.J. 1267 (Okla.

ee aaa ED 43

Wilson v. Cook, 327 U.S. 474 (1946) ...cccccccccccecceceee 14

Constitution, Statutes,

Regulations and Rules:

Atomic Energy Act of 1954, 42 U.S.C. §§ 2011-

2296 (1976 & Supp. V 1981)

RS 37

eT 31

is Ie mrnnnctnsienesctennegestemnmitatinemn 20, 33

GB UBL. § TUB BC 4) anecececcrcoscecocesecccscsssccssess 20

Fe ee ONO csercntnicenccecestntemremnetgitpeeneniins 20

tL ) fy ) EE 20

ate 0 SN Dcslienninsscnensssnemnbencnseneseniniitiontn 20

gS | ee 18, 27

42 U.S.C. § 2201(b) _ 20

42 U.S.C. § 2201(1)(3) ....-ecccceceees , 20

42 US.C. § 2236 22

42 U.S.C. § 2271 22

: PAGE

| ees 22

4 ES Serene 22

|) ee 22

ictiicicsinnerienttenenppeenescontipenpestnnien 22

Clean Air Act Amendments of 1977, 42 U.S.C.

Bb ee 30

NRC Authorization Act for Fiscal Year 1980, Pub.

L. 96-295, 94 Stat. 780 (1980) ......eeceeececeeeeeeeeees 30

Nuclear Safety Research, Development and Dem-

onstration Act of 1980, 42 U.S.C. §§ 9701-9708:

GB TB BREE 8 ) ccctcnsecesccesencestescscesscesssss 31

Price-Anderson Act, 42 U.S.C. § 2210 et seq.:

eo encirciciirnteccmnitianieneens 30, 34

Keener ae 36

| Eee a 36

a sneccrenenraisersinieniptinatl 35

Pub. L. 89-210, 79 Stat. 855 ( 1965) .........ccceccceseeeeee 35

Pub. L. 94-197, 89 Stat. L111 (1975)... eee eeeeees 35

FE SS ae aT COT 24, 28

8 EE a OCT 16

ete TPE hitiidepnsetiestenncennsinarinctnedianitnnnieniins 9, 12, 13,

41

ae SEE eniccsesernsitinitiaagpnenctnitioninnnaiiiian 13, 14

ice: Me antetucsnitiinsagnitemmennstitismimtipenatiibliis 16, 42

NS 8 Se 12

Okla. Stat. Ann. tit. 85, § 12 a 43

10 C.F.R. § 2.202 ( 1983) ... 22

10 C.F.R. § 8.4 (1983) 39

10 C.F.R. § 19.12 (1983) 21

PAGE

bt ES OS ) a 21,22

ER 19, 21

2 2 Rb! UE) | 22

0 2 8 2

EE 22

SS BEET GPE DEED D cxcecescnccasssennsnenssonunestnnsnsevess 2,21

oo GS LG | 21

ee 21

I © IEEE cxcececptsssensereectsastensenpeenioans 21

Oe 21

OE 22

EB ee 22

a Oe FI PIED cactencntecunnpiseeenseveccccncaieseeseses 21

0) § be 39

10 C.F.R. § 140.91 Appendix A (1983) 00... 38

Be es EN GID ccneccsesccccesepscocewwenetnovenreqnnece 38

Co 39

RR RE en 42

8 eR VO | 42

Legislative Materials:

H. R. 15913, 89th Cong., 2d Sess. ( 1966) ............... 38

Hearings on S.3323 and H.R. 8862 Before the Joint

Comm. on Atomic Energy to Amend the Atomic

Energy Act of 1946, 83rd Cong., 2d Sess. (1954) 19

Hearings Before the Joint Comm. on Atomic

Energy on Governmental eo 85th Cong.,

ist Sess. ( 1957)......... 36

Hearings Before the Joint Comm. on Atomic

Energy on Federal-State Relationships, 86th

Cong., Ist Sess. (1959) .......... . 20, 33

Ter

PAGE

Hearings Before the Subcomm. on Legislation of

the Joint Comm. on Atomic Energy on Proposed

Extension of AEC Indemnity Legislation, 89th

Ms Re re eran 38

S. Rep. No . 296, 85th Cong., Ist Sess. ( 1957)........ 36

S. Rep. No. 870, 86th Cong., Ist Sess. ( 1959)......... 20, 33

S. Rep. No. 650, 89th Cong., Ist Sess. ( 1965)......... 36, 37

S. Rep. No. 1605, 89th Cong., 2d Sess. ( 1966) ....... 36, 37

S. Rep. No. 454, 94th Cong., Ist Sess. (1975)......... 36

Miscellaneous:

Comment, Implied Preemption of Punitive Dam-

ages for Nuclear Accidents, 29 Amer. U. L. Rev.

Pe 6 Bae cemnsnrenrencsaiiaivntiilitintitainsenatiiniitinns 35

Enforcement Actions: Significant Actions Re-

solved, U. S. Nuclear Regulatory Commission,

NUREG-0940, Vol. 1, Nos. 1-4 (1982)............... 22

Frampton, Radiation Exposure—The Need for a

National Policy, 10 Stan. L. Rev. 7 ( 1957) .......... 19

Ghiardi & Kircher, Punitive Damages ( 1983) ........ 28

2A Larson, The Law of Workmen’s Compensation

fe ee = ee 43

Murphy & LaPierre, Nuclear Moratorium Legisia-

tion in the States and the Supremecy Clause, 76

Colum. L. Rev. 392 ( 1976) ............:ccccssssesseceneeees 18

Taft, The Jurisdiction of the Supreme Court Under

the Act of February 13, 1925, 35 Yale L. J. 1

ee ; 15

Taylor, Standard for Protection Against Radiation,

12 Atom. Energy L_J. 139 (1970) a 19

Wall Street Journal, May 9, 1983, p. 18 .............0 22

— - ee

PAGE

Wheeler, The Constitutional Case for Reforming

Punitive Damage Procedures, 69 Va. L. Rev. 269

17 C. Wright, A. Miller, & E. Cooper, Federal

Practice and Procedure (1978) 0... .ccccccccccceeeeeeeeeees 13

Supreme Court of the United States

OctTosBer TERM, | 982

BILL M. SILK WOOD, Administrator of the

Estate of Karen G. Silkwood, Deceased,

Appellant,

v.

KERR-McGEE CORPORATION, a Delaware corporation,

and KERR-McGEE NUCLEAR CORPORATION, a Dela-

ware corporation,

Appellees.

CN APPEAL FROM THE UNITED STATES COURT

OF APPEALS FOR THE TENTH CIRCUIT

BRIEF FOR APPELLEES

JURISDICTION

The appellees urge that the Court is without jurisdiction to

hear this appeal. In its order of January 10, 1983, the Court

postponed consideration of that question until the hearing of

the case on the merits. Accordingly, the appellees’ discussion of

the jurisdiction issue is set forth in Section I of the Argument,

infra.

2

STATEMENT

The one-sided nature of appellant's Statement of the Case

requires some restatement of the facts.‘ Moreover, since the

appellant has chosen to argue a number of matters irrelevant to

the questions presented, the appellees are compelled to set forth

more facts than are strictly necessary to decide the narrow

issues presented.

A. The Facts

Karen Silkwood was a laboratory analyst employed by

Kerr-McGee at a federally licensed and regulated plutonium

fuel fabrication facility located in Oklahoma.? She was exposed

to plutonium at the plant on November Sth and 6th, 1974, and

on November 7th in her apartment in a job-related incident at

which time some of her personal property was also con-

taminated. Silkwood told both ax AEC investigator and the

head of Kerr-McGee’s health physics department that the

exposure at her apartment occurred when she spilled a urine

sample that she was collecting at the direction of her employer

(II J.A. 740, IV J.A. 1298-99, 1377-78). The appellant has

conceded throughout that there is no proof as to how the

plutonium got from Kerr-McGee’s plant to Silkwood’s apart-

' Record citations herein are as follows: “J.S.App.” refers to the

Appendix accompanying Appellant's Jurisdictional Statemer*; “J.A.”

refers to the five volume Joint Appendix in the Tenth Circuit and is

cited by “( Volume) J.A. (page)”; “Tr.” refers to the transcript of

proceedings in the trial court. A listing of the corporate affiliations of

Kerr-McGee Corporation and Kerr-McGee Nuclear Corporation is

contained at p. 22 of the Motion to Dismiss or Affirm.

2 The license to receive and process special nuclear materials was

granted to Kerr-McGee on April 2, 1970 by the Atomic Energy

Commission (“AEC”) pursuant to the Atomic Energy Act of 1954

and 10 C.F.R. Parts 40 and 70. The operations of the plant were

thereafter subject to pervasive AEC regulation (Def. Exh. 1, R. Vol.

15, Tr. 7864; Def. Exh. 2, R. Vol. 16, Tr. 7867; Tr. 7840-7872).

3

ment or how she became exposed.? It was also admitted at trial

that certain of the urine samples which Silkwood turned in for

analysis were “spiked” or “salted” with piutonium that was not

excreted in her urine (Tr. 543, II J.A. 784).

Kerr-McGee followed proper health physics procedures

and immediately decontaminated Silkwood after each ex-

posure. In addition, Kerr-McGee promptly made available to

Silkwood medical care and treatment, which was given as soon

as she would consent to receive it. Kerr-McGee made special

arrangements to send her to the medical facility at Los Alamos

Scientific Laboratories at Los Alamos, New Mexico for testing

and evaluation by specialists in radiation injury (Tr. 7043-

7044).

The AEC conducted a prompt and thorough investigation

of Silkwood’s exposure. The Commission’s report concluded

3In his opening statement, counsel for Silkwood told the jury:

“Well, I don’t know how Karen Silkwood got contaminated, and if I

were to stand here and speculate with you I would be guilty of the

same misconduct that you will soon hear from the defense” (III J.A.

902). See also Tr. 3443.

4On November 7th, Silkwood would not consent to examination

by Kerr-McGee’s specially trained plant physician (Tr. 4720-4722;

4766-4767; 7035). On November 8th, on the advice of a union

colleague who flew to Oklahoma City from Washington, D.C., she

isolated herself from Kerr-McGee. On November 9th, she did

consent to examination by Kerr-McGee’s medical consultant, and on

November 10th was flown to Los Alamos (Tr. 7043-7064; Pl. Exh.

188, Il J.A. 430-432, Tr. 3799). “he appellant refers to “an

unauthorized and dangerous drug” offered to Silkwood in the course

of treatment ( Appellant’s Br. 13, 1.22). The appellant's reference is

to DPTA, a chelating agent which could remove plutonium from the

body, which had been recommended by Kerr-McGee’s medical

consultant (II J.A. 430). The source of supply of the drug was the

AEC, which along with the International Commission on Radiation

Protection sanctioned its use (Tr. 5800-5801, 7080-7089).

5 The investigation report, which contains a detailed chronology

of events relating to Silkwood's contamination, is Def. Exh. 37 (II J.A.

729-790, Tz. 6154). The report shows that the amount of plutonium

involved in the incident was estimated to have been less than 0.0003

grams (II J.A. at 734).

4

that Silkwood’s exposure to plutonium was less than 25% of the

permissible occupational body burden recognized by the au-

thoritative national and international commissions and by the

AEC (IV J.A. 1586-1589; II J.A. 809-813). The testimony of

the two medical experts in the field of radiation medicine who

examined and tested Silkwood was that she had no cognizable

physical injury; that her exposure to plutonium was not signifi-

cant enough to cause a medically detectable injury; that based

on reasonable medical certainty, she would have no adverse

health effects from her exposure; and that long term studies of

persons having greater exposure than she had demonstrated

that there had been no significant health impact ( Voelz, Tr.

9091-9202; Sternhagen, Tr. 7077-7080; IV J.A. 1431-1440; IV

J.A. 1559-1605 ).7

After the job-related plutonium exposure in the apartment

on the morning of November 7th, decontamination became

* Silkwood’s body burden of plutonium was 8.8 nanocuries. The

permissible body burden for occupational exposure was 40 nano-

curies. Her lung burden was 5 nanocuries; the permissible lung

burden was 16 nanocuries (Tr. 7078; Def. Exh. 37 at Il J.A. 752,

783). The permissible body burden is the exposure level at which

there is a negligible probability of injury and at which effects likely to

occur are of such a minor nature as not to be considered unacceptable

by the exposed individual or by competent medical authorities (II J.A.

$44). Lower courts have recognized that the recommendations of the

International Committee on Radiation Protection (ICRP) and of the

National Council for Radiation Protection (NCRP) are set to provide

a safe margin between industrial practice and the level which would

produc. harmful effects. Mahoney v. United States, 220 F. Supp. 823,

838 (E.D. Tenn. 1963), aff'd, 339 F.2d 605 ( 6th Cir. 1964); Crowther

v. Seaborg, 312 F. Supp. 1205, 1230-35 (D. Colo. 1970).

? The trial testimony on which the appellant relies to support a

determination of personal injury is that of Dr. John W. Gofman.

Gofman challenged the recognized national and international com-

missions charged with the duty of recommending acceptable levels of

radiation exposure for employees at nuclear facilities. His views are

known to these commissions as well as to the AEC, but each continues

to adhere to existing standards (III J.A. 962-969).

ail

5

necessary and was required by the AEC (II J.A. 748-749; 757-

762). It was necessary to remove items of Silkwood’s furniture,

as well as a quantity of smaller articles. The parties stipulated

that the items removed had a total value of $5,000.

All aspects of plant safety and operations which the

appellant discusses (Appellant’s Br. 12-14) were subject to

extensive regulation by the AEC The AEC’s report of in-

vestigation of Silkwood’s exposure includes an analysis of Kerr-

McGee’s physical security program (II J.A. 742) and Kerr-

McGee's health physics records (II J.A. 745-746). The AEC

concluded that Kerr-McGee’s only violation .“ regulations

throughout the entire Silkwood incident was a failure to

maintain a record of the dates of two urine samples submitted

by Silkwood (II J.A. 734). This violation, which occurred

because Silkwood failed to supply Kerr-McGee with the dates,

was not causally related in any way to her exposure or the

exposure to her personal property. In all material matters,

Kerr-McGee was in compliance with federal regulations as they

pertained to the Silkwood incident.

The design of Kerr-McGee’s plant, the equipment, and the

processes utilized in the plant were “state of the art” and were

approved by the AEC (Tr. 5497). James Keppler, Regional

Director of the AEC with jurisdiction over the Kerr-McGee

plant, testified that there were no serious personnel exposures at

the plant; that Kerr-McGee did not exceed the regulatory

requirements with respect to exposure levels that would result in

significant health hazards; that the AEC viewed the plant as a

“safe operation”; and that he never at any time considered the

plant to be a hazard either to the workers or the public.®

®On September 27, 1974, Silkwood and two other local OCAW

union committee members made allegations to the AEC concerning

working conditions at the plant. Thirty-nine separate incidents or

situations referred to by the OCAW were investigated (Def. Exh. 38,

Il J.A. 791-808, Tr. 4251-4252). Three violations of the lowest order

of severity (Category III) were noted (II J.A. 793-794). None relates

to Silkwood’s exposures or to contamination of the apartment.

6

Although the AEC had the power to close the plant, that was

never considered, and operation of the plant never resulted in a

fine by the AEC or even a recommendation that a fine be levied

(Tr. 8157-58; 8254-58).9

Among the numerous misleading statements about plant

operations, the appellant implies that there was missing pluto-

nium (Appellant’s Br. 14). During operation of the plant,

problems which were common in the industry were encoun-

tered relating to the complex task of measurement of the

inventory of plutonium. When improved measurement tech-

niques were developed, Kerr-McGee’s accounting for pluto-

nium was found to be in substantial compliance with the

regulations, '° as the undisputed testimony shows (see Tr. 7890-

7919; 8531-8545). Kerr-McGee’s compliance was independ-

ently verified at the direction of the Nuclear Regulatory

Commission (“NRC”) (successor to the AEC) by two inde-

pendent laboratories engaged by the Department of Energy

(Pl. Exh. 83, R. Vol. 13, Tr. 8038; Tr. 7909-10; 8542-48).

The appellant's assertions about documents never located

after Silkwood’s auto accident, allegedly defective fuel rod

® Appellant relies almost exclusively on the testimony of Karl Z.

Morgan as authority for criticism of plant operations ( Appellant's Br.

12-14). Morgan had never been to the plant and had never

interviewed any of the health physics personnel or even anyone who

had ever worked at the plant. He was critical of the AEC and other

regulatory agencies and expressed the opinion that the current

radiation exposure levels accepted by the AEC for occupational

workers were too high by a magnitude of 480 (Tr. 1637-1720; 1749-

1760).

© The AEC requirement as to inventory is to account within a

tolerance of one-half of one percent of plutonium received, or not less

than 99.5 percent. Kerr-McGee accounted for 99.478 percent (Tr.

7905-7909).

-

welds,'' and claims of safety violations ( Appellant’s Br. 11, n.

18) are likewise without foundation. The appellant is his own

authority for these declarations, citing Addendum B to Appel-

lant’s Petition for Rehearing and Suggestion for Rehearing En

Banc (J.S.App. 132a-136a) consisting of twenty-seven sepa-

rately numbered and largely unsupported claims of the appel-

lant, substantially all of which are in dispute.

B. The Tenth Circuit Opinion

The Tenth Circuit held that: (a) the claim for personal

injuries to Karen Silkwood was subject to the Oklahoma

Workers’ Compensation Act, which constituted the exclusive

remedy, as the evidence supported only the conclusion that her

exposures to plutonium were all job-related (J.S.App. 13a-

18a); (b) the $5,000 property damage award should be

affirmed upon the application of Oklahoma law of strict

"1 As to the suggestion that Kerr-McGee was manufacturing

defective fuel rod welds, these matters were thoroughly investigated

by the AEC and the Energy Research and Development Adminis-

tration (“ERDA”). It was concluded that Kerr-McGee’s fuel pins

met all established contract requirements and that the quality assur-

ance program also met those requirements. See AEC Report of

Investigation (Def. Exh. 98, R. Vol. 19, Tr. 6721, 9731), and ERDA

Reports of Investigation (Def. Exh. 99, R. Vol. 19, Tr. 6723, 6729;

Def. Exh. 100, R. Vol. 19, Tr. 6754, 9731). The confusion on this

issue results from the actions of one laboratory analyst who “touched

up” anomalies of negatives of certain photomicrographs of certain test

welds with a felt tip pen, in order that the negatives would print a

clear photo. However, contrary to the appellant’s misstatement, none

of the markings was used to obscure weld defects (Tr. 6748). These

actions were without the knowledge of supervisory personnel and in

any event did not involve or affect the manufactured pins or the

quality assurance program (Tr. 6665-6764). The signed statement of

the laboratory analyst was obtained by the AEC and appears as

Exhibit G to Defendant’s Exhibit 98, in which it is stated that the

anomalies on the negatives were the result of defects in the film

emulsion and were not indicative of flaws in the test welds.

liability, plutonium having escaped from the Kerr-McGee plant

and being a toxic and dangerous substance, and the property

damage caused by plutonium contamination being foreseeable

(J.S.App. 18a-2la); and (c) no punitive damages may be

awarded in this case by reason of federal preemption (J.S.App.

2la-24a).'2

The Tenth Circuit reversed the punitive damage verdict

because exclusive regulatory authority over radiation hazards is

granted to the AEC by the Atomic Energy Act of 1954. The

court held that a judicial award of punitive damages under state

law to punish or deter alleged unsatisfactory practices involving

exposure to radiation has a regulatory effect and is no less

intrusive than direct legislative regulation of radiation hazards

by a state and is, therefore, preempted by federal law. In view

of its decision on federal preemption, the Tenth Circuit consid-

ered none of Kerr-McGee’s other arguments as to the impropri-

ety of punitive damages in this case (J.S.App. 21a).

C. Present Posture of the Case

It is important to note the posture in which the decision of

the Tenth Circuit leaves this case. Since the court held that the

Oklahoma Workers’ Compensation Law bars Silkwood’s per-

sonal injury award (a holding which is not under review here),

that award no longer provides a predicate or basis for the

$10,000,000 punitive damage award. The only compensatory

verdict remaining in this case is the property damage award of

$5,000—the stipulated value of Silkwood’s furnishings—from

which Kerr-McGee has not appealed. The Tenth Circuit’s

holding that the punitive damage award was preempted under

the Atomic Energy Act is therefore the only holding that has

been appealed. Thus, the preemption issue before this Court

can relate only to the punitive damage award insofar as it is

12 The Opinion was by a divided court. But even the dissenting

Judge would have reversed the trial court on the workers’ com-

pensation issue for not submitting the issue to the jury (J.S.App. 29a-

3a).

9

predicated upon the property damage award. If preempted,

the punitive award must fail. If there is not a proper predicate,

it must likewise fail. Only if both of these propositions are

rejected would the case be properly remanded for consideration

of the other issues not yet considered by the Tenth Circuit.

SUMMARY OF ARGUMENT

This case is not properly before the Court on appeal under

28 U.S.C. § 1254(2) because the court of appeals did not hold

the Oklahoma punitive damage statute invalid. The case

should therefore be dismissed (pp. 12-16, infra). If not

dismissed, the arguments which follow require affirmance of the

court of appeals’ decision.

This Court’s decision in Pacific Gas & Electric Co. v.

State Energy Resources Conservation & Dev. Comm'n,

—._ * U.S. — _, 103 S.Ct. 1713 (1983) firmly establishes that

the federal government has occupied the field of regulating

radiation safety in connection with the operation of nuclear

facilities and the handling of nuclear materials. Thus, any state

regulation of radiation hazards is preempted. The government

has exercised its authority in this field by way of a com-

prehensive regulatory and licensing scheme, through which the

Nuclear Regulatory Commission is able to monitor every aspect

of the production of nuclear energy (pp. 17-23, infra).

The judicial award of punitive damages in this case is an

attempt to regulate nuclear safety and falls squarely within the

field occupied by the federal government (pp. 24-30, infra).

The punitive damages were awarded in connection with Karen

Silkwood’s exposure to plutonium, a radioactive substance, at

the Kerr-McGee plant and in a job-related incident at her

apartment. The purpose of the award was to punish Kerr-

McGee for maintaining allegedly unsafe plant conditions and

for “permitting” the escape of plutonium. The punitive dam-

ages were intended to deter Kerr-McGee from continuing such

alleged practices and to prescribe the manner in which Kerr-

10

McGee was to conduct operations in its plant. Regulation of a

federal nuclear licensee’s conduct by imposition of punitive

damages is “no less intrusive than direct legislative acts of the

state,” as the court below held (J.S.App. 24a). Indeed, because

of the arbitrary and uncontrollable nature of such awards, they

can be a great deal more intrusive. Since the duties of

punishing and deterring the conduct of nuclear operators

relating to radiation hazards were never ceded to the states, this

assertion of authority by a state is preempted. Silkwood’s

attempt to circumvent this conclusion by claiming that the

award of punitive damages was for “purposes other than

regulation of radiation hazards” is without merit since all the

alleged conduct supposedly underlying the award concerned

radiation safety at Kerr-McGee’s federally licensed operation.

In addition, the imposition of punitive damages frustrates

the objectives of Congress in several important ways (pp. 30-

34, infra). The availability of huge punitive awards could

impede the stated purpose of the Atomic Energy Act to

promote the development of nuclear energy. Congress has also

made clear that it does not want a system of dual regulation of

radiation hazards—a problem which will necessarily occur if

punitive damages are permitted here.

Silkwood’s references to the legislative history of the Price-

Anderson Act do not alter this conclusion (pp. 34-39, infra).

Nothing in that Act or its legislative history authorizes the

imposition of punitive damages for radiation accidents, and

nothing therein grants to the states the authority to punish and

deter the conduct of nuclear licensees. The Act creates a

compensation system, and Congress’ references to non-

interference with state tort law must be read as referring to state

tort law for purposes of compensation only.

The court below found it unnecessary to consider any

ground other than preemption in reversing the award of

ports the court’s action ( pp. 41-46, infra). When the cour of

ll

appeals vacated Silkwood’s claim for personal injuries on the

ground that it was covered by the workers’ compensation act,

there was no longer any basis for the punitive damage award.

The award was clearly incident to the personal injury claim.

Since the trial court had no jurisdiction over the personal injury

claim, the punitive damages predicated on that claim cannot

stand. This constitutes an independent ground for affirming the

decision of the court of appeals without the necessity of

determining the preemption issue.

12

ARGUMENT

L

THIS CASE IS NOT PROPERLY

BEFORE THIS COURT ON APPEAL

This case does not fall within the narrow class of cases that

may be appealed under 28 U.S.C. § 1254(2), in which Con-

gress authorized review on appeal in only one instance—when

the court of appeals has held a state statute “to be invalid as

repugnant to the Constitution, treaties, or laws of the United

States.” This Court has emphasized its “practice of strict

construction of statutes authorizing appeals,” Fornaris v. Ridge

Tool Co., 400 U.S. 41, 42 n.1 (1970), and has closely scruti-

nized the decisions of the courts of appeals to determine

whether a state statute has been held invalid on federal

grounds.

The state statute asserted to provide the basis for jurisdic-

tion is the Oklahoma punitive damages statute, Okla. Stat. Ann.

tit 23 §9 (West 1955), which permits a jury to award

exemplary damages where a defendant has been guilty of

oppression, fraud or malice. However, the court of appeals did

not hold this statute invalid, either on its face or as applied.

The court was concerned only with interpreting the Atomic

Energy Act, 42 U.S.C. § 2011 ef seg., and with determining

whether an award of punitive damages fell within the federally-

occupied field of radiation hazards. It held that because they

competed with the NRC’s regulation of radiation hazards,

“punitive damages may not be awarded in this case” (J.S.App.

24a). The court never addressed, analyzed or ruled on the

validity of the pun.cive damages statute itself. In fact, nowhere

in the Tenth Circuit's opinion is the statute even mentioned. "?

'3 The dissenting opinion in the decision below suggests that the

award of punitive damages in this case rested on common law rather

than state statute: “The question here is whether the Atomic Energy

preempts part of the Oklahoma common law

remedy” (J.S.App. 32a).

13

Jurisdiction under § 1254(2) may not be invoked merely

by challenging the validity of an action taken under a statute;

the statute itself must be specifically challenged and held to be

invalid, and not merely inapplicable. In Perry Educ. Ass’n v.

Perry Local Educators’ Ass’n, ___. U.S. ~~, 103 S.Ct. 948

(1983), the court of appeals had held that certain provisions of

a collective-bargaining agreement, but not the state statute

authorizing such agreements, were constitutionally invalid.

This Court denied the appeal under § 1254(2) stating that:

No state statute or other legislative action has been

invalidated by the Court of Appeals. The Court of

Appeals has held only that certain sections of the collective

bargaining agreement entered into by the school district

and PEA are constitutionally invalid; the Indiana statute

authorizing such agreements is left untouched.

103 S.Ct. at 953. Similarly here, the court of appeals left the

Oklahoma statute untouched. Only the judicial award of

punitive damages was held to be erroneous, because that type

of regulation was preempted by the Atomic Energy Act. There

was not, and is not, any attack on the Oklahoma statute

properly before this Court.

Cases interpreting the analogous jurisdictional statute, 28

U.S.C. § 1257(2), also recognize the necessity of showing that

the validity of the statute was drawn into question and actually

decided by the court.'* Charleston Fed. Savs. & Loan Ass’n v.

Alderson, 324 U.S. 182, 187 (1945); Kulko v. California

Superior Court, 436 U.S. 84 (1978).'5

4 In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663,

675-77 n.11 (1974), this Court noted “the history of the close

relationship between” § 1254(2) and § 1257. Decisions under

§ 1257(2) may be looked to for guidance in interpreting § 1254( 2).

17 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure

§ 4037, at 36 ( 1978).

'S In Kulko, this Court said: “Appeilant did not argue below that

[the state] statute was unconstitutional, but instead argued that the

( Fostnete continued on nex! page )

14

In the present case it was the assessment of punitive

damages that was challenged, not the validity of the statute. As

this Court has noted, “[t}he mere objection to an exercise of

authority under a statute, whose validity is not attacked, cannot

be made the basis” of an appeal. Jett Bros. Distilling Co. v.

City of Carrollton, 252 U.S. 1, 6 (1920). For this reason, this

Court has often held that an appeal will not be sustained where

a tax assessment is challenged on constitutional grounds but not

the validity of the tax statute. '®

The formulation of the punitive damage issue and the

explicit statement of the holding of the court below confirm that

the Oklahoma statute was not held to be invalid. When the

court of appeals first framed the issue of punitive damages, it

did not cite or mention the Oklahoma statute, but spoke only of

the punitive damage award: “Kerr-McGee makes several argu-

( Footnote continued from preceding page )

Due Process Clause of the Fourteenth Amendment precluded the

exercise of in personam jurisdiction over him. The opinion below does

not purport to determine the constitutionality of the California

jurisdictional statute.” 436 U.S. at 90 n.4. Similarly here, no

contention was made that the Oklahoma statute is unconstitutional or

otherwise invalid but rather that the provisions of the Atomic Energy

Act precluded the district court from granting punitive damages.

Under 28 U.S.C. § 1257(2) it has long been settled that it is

not sufficient to attack a tax assessment levied under a state statute as

being unconstitutional or to show that the state court has passed upon

the validity of the tax. The court must consider and sustain the

validity of the tax statute itself in order to invoke this Court's

appellate jurisdiction. Jett Bros. Co. v. City of Carrollton, 252 U.S. |

(1920); Miller v. Board of County Comm'rs., 290 U.S. 586 ( 1933);

Memphis Natural Gas Co. v. Beeler, 315 U.S. 649, 650 (1942);

Charleston Fed. Savs. & Loan Ass'n v. Alderson, 324 U.S. 182, 185-

86 (1945); Wilson v. Cook, 327 U.S. 474, 480-82 (1946). See also

Reeves v. Williamson, 317 U.S. 593 (1942) (appeal dismissed for

want of jurisdiction under predecessor statute to 28 U.S.C. § 1254

(2)).

15

ments that the award of punitive damages is improper. We

need consider only one, the claim of federal preemption”

(J.S.App. 21a). In addition, the court clearly identified the

narrow ground upon which it denied puuitive damages:

A judicial award of exemplary damages under state law as

punishment for bad practices or to deter future practices

involving exposure to radiation is no less intrusive than

direct legislative acts of the state. Thus we hold punitive

damages may not be awarded in this case.

J.S.App. 24a (emphasis added). Thus, the Tenth Circuit's

holding pertains to the judicial award of punitive damages in

this case, and does not draw into question or decide the validity

of a statute authorizing such damages generally, or as applied

to areas of the law within the state’s authority to control.

Exercising appellate jurisdiction in this case would make

virtually any action authorized by state law and held to be

invalid by a federal court of appeals reviewable on appeal even

though the underlying statute is not placed under attack.

Construing § 1254(2) in such a broad way would invite appeals

to the detriment of this Court’s ability to respond to the many

cases brought under discretionary review, and would defeat the

purpose of the statute. See, Taft, The Jurisdiction of the

Supreme Court Under the Act of February 13, 1925, 35 Yale LJ.

1 (1925).

The appellant cites several cases in which jurisdiction was

invoked under § 1254(2) where a state statute was held invalid

as applied (Appellant's Br. 3).'? Those cases are readily dis-

tinguishable. In each, a specifically identified statute is ex-

pressly held by the court of appeals to be invalid as applied. In

each, the challenged statute is fully analyzed and is the focus of

the court’s holding. In direct contrast to the cases cited by the

appellant, here the challenged statute is neither construed nor

identified as being the subject of the court’s holding. The court

'? Malone v. White Motor Corp., 435 U.S. 497 ( 1978); Dutton v.

Evans, 400 U.S. 74 (1970); City of Detroit v. Murray Corp., 355 U.S.

489 (1958).

never analyzed the statute’s validity or applicability to the

unique facts of this case. This is particularly germane since the

compensatory award for alleged personal injuries upon which

the punitive damage claim was premised has itself been

reversed on state grounds. '®

As the Court stated in Memphis Natural Gas v. Beeler, 315

U.S. 649. 651 (1942), the Judicial Code was intended “to

foreclose an appeal as of right whenever the prescribed condi-

tions have not been rigorously fulfilled” (emphasis added).

Here those conditions have not been fulfilled at all and the

appeal should be dismissed.

Finally, the Court should not accept this case on certiorari

under 28 U.S.C. § 2103. There is no conflict among the circuits

on the preemptive effect of the Atomic Energy Act; indeed, they

are unanimous in following Northern States Power Co. v.

Minnesota, 447 F.2d 1143, aff'd mem., 405 U.S. 1035 (1972).

Moreover, the appellant concedes that this is the “first case

involving nuclear power in which punitive damages have been

awarded by a jury” (J.S. 13), demonstrating that it is not a

question that arises frequently. Surely the unique facts of this

case would have only slight precedential value. Additionally,

since the court of appeals held that compensatory damages are

available for nuclear accidents, there is no fear that a legitimate

claimant would be deprived of compensation for any injuries

actually sustained.

8 Appellants also rely on California v. Grace Brethren Church,

102 S.Ct. 2498 (1982) to support jurisdiction even where the lower

court has not expressly held a statute unconstitutional as applied

(Appellant's Br. 4). However, the appeal there is based on 28 U.S.C.

§ 1252, which the Court distinguished from other jurisdictional stat-

utes noting that it stood as “an unambiguous exception to the policy of

minimizing the mandatory docket of this Court.” Jd. at 2506. Further,

unlike this case, the invalidity of the statute was a necessary predicate

to the court of appeals decision in that case.

® See Washington States Bldg. & Const. Trades Council v.

Spellman, 684 F.2d 627 ( 9th Cir. 1982); Illinois v. General Elec. Co.,

683 F.2d 206 {7th Cir. 1982).

17

IL.

THE ATOMIC ENERGY ACT OF 1954, AS AMENDED,

PREEMPTS IMPOSITION OF PUNITIVE DAMAGES

IN THIS CASE

A. Congress Intended to Occupy Entirely

the Field of Nuclear Safety

This Court recently decided a case which controls the

disposition of this action. In Pacific Gas & Electric Co. v. State

Energy Resources Conservation & Dev. Comm'n, —_.. US.

——, 103 S.Ct. 1713 (1983), Justice White, writing for the __

majority, set forth a comprehensive analysis of the preemptive

scope of the Atomic Energy Act of 1954, 42 U.S.C. § 2011 er

seq., and firmly established that the federal government's

authority over radiation safety is absolute, completely dis-

placing any authority of the states. The Court held that “the

federal government has occupied the entire field of nuclear

safety concerns, except the limited powers expressly ceded to

the states.” 103 S.Ct. at 1726. The Court stated:

from the passage of the Atomic Energy Act in 1954,

through several revisions, and to the present day ... the

federal government maintains complete control of the

safety and “nuclear” aspects of energy generation. ...

Id. The Court also noted that “Congress .. . intended that the

federal government regulate the radiological safety aspects

involved ... in the construction and operation of a nuclear

plant.” Jd. at 1723.20 The Court based its analysis on several

20 The Court recognized the dichotomy between the economic

concerns involved in the generation, sale and transmission of nuclear

power, which Congress explicitly recognized as a state responsibility,

and the safety concerns of nuclear power, which Congress intended to

be exclusively within the federal province. Regulation of the posses-

sion and use of special nuclear materials, because it is safety regu-

lation, is a subject as to which “no role was left for the states.” 103

S.Ct. at 1724.

provisions of the Atomic Energy Act, including § 274(k), 42

U.S.C. § 2021(k), which authorizes state regulation “for pur-

poses other than protection against radiation hazards.””?'

The Court’s analysis of Congress’ intent to assert exclusive

federal control in the area of radiation hazards is consistent

with previous pronouncements by this Court and with the

holdings of every court of appeals that has considered the issue,

beginning with the watershed Northern States case.22 Indeed,

the exclusive authority of the federal government in this area

has never been seriously disputed. The Tenth Circuit, in its

decision below, adhered to these principles in holding that the

award of punitive damages intrudes upon the exclusive federal

authority to regulate radiation hazards and is preempted.

There are several reasons why Congress decided to assume

exclusive control of radiation hazards. First, Congress’ dual

2" Congress’ intent to occupy entirely the field of nuclear safety is

manifested unambiguously in the language of the 1954 Act and

subsequent amendments and in the related legislative history. See

Northern States Power Co. v. Minnesota, 447 F.2d at 1147-54. Fora

detailed analysis of the legislative history of the Atomic Energy Act

and amendments, see Murphy & LaPierre, Nuclear Moratorium

Legislation in the States and the Supremacy Clause, 76 Colum. L. Rev.

392, 394-414 (1976).

2 See Train v. Colorado Pub. Interest Research Group, 426 U.S.

1, 16 (1976) (court recognized the “absence of any room for a state

role” in the regulation of radiation hazards); Northern States Power

Co. v. Minnesota, 447 F.2d 1143, 1149 (8th Cir. 1971), aff'd mem.,

405 U.S. 1035 (1972) (court recognized “Congressional . . . intention

that the states possess no authority to regulate radiation hazards”);

Illinois v. Kerr-McGee Chemical Corp., 677 F.2d 571, 581 (7th Cir.),

cert. denied, _.. US. —._., 103 S.Ct. 469 (1982) (court found

“Congress intended ...to preempt state regulation of radiological

hazards”); Washington States Bidg. & Const. Trades Council v.

Spellman, 684 F.2d 627 (9th Cir. 1982) (court stated that Congress

had “not waived or delegated its authority” over radioactive waste

disposal! ).

19

purpose of protecting the public safety while at the same time

encouraging private sector participation in the development of

nuclear energy requires a delicate balancing of interests which

can only be accomplished by exclusive federal control. The

balance is achieved through the pervasive federal regulatory

scheme created by the Atomic Energy Act. See Pacific Gas &

Electric, 103 S.Ct. at 4717.2 The regulations promulgated

pursuant to the Atomic Energy Act have been described as a

“scheme which is virtually unique in the degree to which broad

responsibility is reposed in the administering agency.” Siegel v.

AEC, 400 F.2d 778, 783 (D.C. Cir. 1968). See also, Northern

States Power Co. v. Minnesota, 447 F.2d at 1153.

Second, exceptional scientific and technical expertise is

required to regulate the complexities of radiation hazards and

plant operations.24 Congress felt that the states lacked the

23 The balance between safety and progress was recognized by

the AEC in its report to the Joint Committee on Atomic Energy in the

hearings on the 1954 Act:

The tialities of atomic energy continue to be attended by

of control which call for an unusual degree of Federal

pabte sesuetiogn ond caliguaste whieh sotiety muos impace

esca restrictions w must im

ep th Cilieaden of etomie cotuay enn be made consumes ti

allowing freedom of initiative to power producers; that the

special problems of atomic energy can, without risk to security or

safety and without unfair advantage to any group be reconciled

with the proper roles of industry and Government as conceived in

this country.

Hearings on S.3323 and H.R. 8862 Before the Joint Comm. on Atomic

Energy to Amend the Atomic Energy Act of 1946, 83d Cong., 2d Sess.

$75 (1954) (testimony of Commissioner Murray).

24 For example, the “Standards for Protection Against Radi-

ation,” 10 C.F.R. Part 20, adopted by the AEC in 1957, were the

result of several decades of research on the biomedical effects of

radiation conducted by the leading scientists in the field for the

National Committee on Radiation Protection and the International

Commission on Radiological Protection. See Taylor, Standards For

Protection Against Radiation, 12 Atom. Energy LJ. 139 (1970);

Frampton, Radiation Exposure—The Need For A National Policy, \0

Stan. L. Rev. 7 (1957).

20

technical expertise necessary to deal with these matters. Even

when the 1959 Amendment to the Atomic Energy Act?5 was

enacted giving certain authority to the states, the AEC indicated

that “certain areas would be excluded [from state regulation]

because the technical safety considerations are of such com-

plexity that it is unlikely that any state would be prepared to

deal with them. .. .” Hearings Before the Joint Comm. on

Atomic Energy on Federal-State Relationships, 86th Cong., Ist

Sess. 294 (1959). See also, id. at 291-92; S. Rep. No. 870, 86th

Cong., Ist Sess. 8 (1959).2¢

Congress’ total occupation of the nuclear safety field is

evidenced by the comprehensive regulatory and licensing

scheme administered by the NRC, successor to the AEC.

Congress vested in the Commission the power to license special

nuclear material, 42 U.S.C. § 2073, to establish regulations “to

govern the possession and use of special nuclear material,” 42

U.S.C. §2201(b), and to govern the “design, location, and

operation of facilities” which use such material, 42 U.S.C.

§ 2201(i)(3).

2 .°2 U.S.C. § 2021.

Though the 1959 Amendment provided some role for the

states, Congress intended that state participation be carefully circum-

scribed. The turnover of authority to regulate nuclear materials can

only occur when the Commission is satisfied that the state program is

compatible with the federal program and is adequate to protect the

public health and safety, 42 U.S.C. §2021(d)(2). The state

standards for protection against radiation hazards must be the same

as federal standards. S. Rep. No. 870, 86th Cong., Ist Sess. 9, 11

(1959). The Commission has the power to terminate its agreement

with a state if necessary to protect the public health and safety. 42

U.S.C. §2021(j). Finally, the more hazardous aspects of nuclear

power cannot even be turned over to the states. 42 U.S.C.

$$ 2021(b)(4), 2021(c). Oklahoma has not entered an agreement

with the NRC under 42 U.S.C. § 2021, but even if it had it would not

be able to assert any regulatory authority here because Kerr-McGee

was licensed to possess special nuclear material in a quantity sufficient

to form a critical mass. 42 U.S.C. § 2021(b)(4).

21

Through its regulations and license conditions, the Com-

mission is able to monitor and maintain strict control over its

licensees, regulating every aspect of nuclear fuel processing,

including Kerr-McGee’s plant. As mentioned above, the

Commission maintains standards for protection against radi-

ation which sets forth permissible radiation exposure levels. 10

C.F.R. Part 20. In 10 C.F.R. Part 70 the Commission sets forth

the terms and conditions upon which special nuclear material

will be licensed. No license will be issued unless the Commis-

sion determines that the applicant has qualified personnel,

equipment and procedures adequate to protect health and

safety. 10 C.F.R. § 70.23. Other safety aspects which the

Commission regulates include the radiation monitoring system

of the plant, the physical security of the plant and nuclear

materials, and protection against theft or sabotage of nuclear

materials. 10 C.F.R. §§ 70.23, 70.24, 73.1. The Commission

has detailed regulations covering material balance, inventory,

and record keeping for special nuclear materials. 10 C.F.R.

§§ 70.51, 70.53. The Commission also regulates the instructions

which must be given to workers, including such topics as health

protection problems associated with exposure to radiation,

precautions to minimize exposure, and the functions of protec-

tive devices. 10 C.F.R. § 19.12. All the alleged conduct cited

by the appellant (Appellant’s Br. 12-16) purporting to support

the award of punitive damages, in addition to being unrelated

to Silkwood’s exposure,?’ is already regulated by the Commis-

sion regulations.

Congress has also provided an array of enforcement

mechanisms, some of which deal with willful conduct. The Act

provides for investigation, injunctive relief, civil and criminal

penalties, and suspension or revocation of a license for conduct

27 The plaintiff proffered no evidence whatever of the conduct

that caused or permitted Silkwood’s contamination (III J.A. 902; Tr.

3443).

22

in violation of the Act or regulations. 42 U.S.C. §$ 2271, 2280,

2282, 2272-73, 2236. Civil penalties can be assessed in

amounts up to $100,000 per violation. If the violation is a

continuing one, each day constitutes a separate violation. 42

U.S.C. § 2282.28 Willful conduct can lead to a criminal con-

viction resulting in substantial fines and imprisonment. 42

U.S.C. §§ 2272-73. Where a violation is willful, the Commis-

sion may summarily revoke the violator’s license without prior

notice or opportunity to demonstrate compliance. lv C.F.R.

§§ 2.202, 70.61.29

In the face of such explicit evidence of congressional intent

to assert a wide-ranging governance over the safety aspects of

nuclear power, the appellant suggests that the 1954 Atomic

Energy Act and the 1959 Amendment relate only to licensing

and administrative regulation and their preemptive scope does

not extend to regulation by way of punitive damages ( Appel-

28 The NRC has frequently exercised its power to impose civil

fines. In 1982 alone it imposed the following fines on reactor

licensees: Boston Edison ($550,000); Carolina Power & Light

($40,000 ); Cincinnati Gas & Electric ($200,000); Consolidated Edi-

son ($185,000); Consolidated Edison ($40,000); Consumers Power

($16,000); Dairyland Power ($25,000); Georgia Power ($50,000);

Maine Yankee ($30,000); PSE&G ($40,000); TVA ($50,000);

VEPCO ($50,000); Carolina Power & Light ($120,000); Com-

monwealth Edison ($100,000); Georgia Power ($20,000); Portland

General Electric ($50,000); Southern California Edison ($60,000);

Duke Power ($44,000); Illinois Power Co. ($90,000); Indiana &

Michigan Electric ($52,000); PSE&G ($40,000); Vermont Yankee

($40,000). See Enforcement Actions: Significant Actions Resolved,

U.S. Nuclear Regulatory Commission, NUREG-0940, Vol. 1, Nos.

1-4 (1982). Recently, the NRC proposed a fine of $850,000 against

PSE&G. See Wall Street Journal, May 9, 1983, p. 18.

29 Numerous sections of the regulations recognize that “[a]ny

person who willfully violates any provision of the Act or any

regulation or order issued thereunder may be guilty of a crime and,

upon conviction, may be punished by fine or imprisonment or both.”

See, e.g., 10 C.F.R. §§ 19.30, 20.601, 40.81, 70.71 (1983).

23

lant’s Br. 23, 27, 29). This is an impermissibly narrow reading

of the legislation and is contrary to this Court’s holding in

Pacific Gas & Electric that the Atomic Energy Act preempts ail

radiation safety matters except those expressly ceded to the

states. To limit the preemptive scope of the Act and the 1959

Amendment only to administrative-type regulation, as the

appellant suggests, would elevate form over substance and

defeat Congress’ intention to exercise total control over safety

matters. The language of the statute and statements in the

legislative history are broad and unconditional in their assertion

of authority. Nowhere in the Act or legislative history does

Congress indicate that federal control over safety matters

should be limited to specified modes of regulation. The

absence of any express reference to punitive damages cannot be

construed as giving that mode of regulatory authority to the

states. On the contrary, only those roles which Congress clearly

intended to leave to the states are outside the scope of the

preemption, and it has never indicated such an intent with

respect to punitive damages.

24

B. Punitive Damages Fall Within the Occupied Field of

Regulation of Nuclear Safety Concerns

When the federal government completely occupies a given

field or an identifiable portion of it, “the test of preemption is

whether ‘the matter on which the state asserts the right to act is

in any way regulated by the federal government.’ ” Pacific Gas

& Electric, 103 S.Ct. at 1726.% In this case, punitive damages

were awarded for the sole purpose of punishing an NRC

licensee for the general operating conditions of its plant rather

than for specific conduct causing injury to Silkwood (of which

there was no proof). This type of regulation of plant operating

conditions falls squarely within the field occupied by the federal

government.

This Court set forth the dual purposes underlying an award

of punitive damages in Smith v. Wade, ___. US. 103

S.Ct. 1625 (1983): “punitive damages are awarded in the jury’s

discretion ‘to punish [the defendant] for his outrageous con-

duct and to deter him and others like him from similar conduct

in the future.”” Jd. at 1639.3’ Any suggestion that exemplary

% The appellant argues that Nader v. Allegheny Airlines, Inc.,

426 U.S. 290 (1976) requires a showing of irreconcilable conflict

between the federal scheme and a state common law remedy before

the latter is preempted (Appellant’s Br. 22). Since the Pacific Gas &

Electric case has already addressed the subject matter at issue in this

case (regulation of radiation hazards) and found that Congress

completely occupied the field, the Nader case, which involves a

completely different statutory scheme ( regulation of aviation), is not

controlling.

31 Although in Smith v. Wade this Court was divided on the

question of the proper standard for an award of damages under

§ 1983, the majority and dissent agreed that punitive damages are

awarded to punish and deter wrongful conduct.

25

damages have additional functions, such as compensation, is

contradicted by this Court’s explicit statement in City of New-

port v. Fact Concerts, Inc., 453 U.S. 247, 266 (1981):

“[p]unitive damages, by definition are not intended to com-

pensate the injured party.”°2 Under Oklahoma law, a com-

plaining party is allowed to recover exemplary damages not

because his position is meritorious, but because society is

benefited by deterring wrongful conduct. Thus, if a punitive

award will neither punish nor have a deterrent effect, the award

will be disallowed. Nixon v. Oklahoma City, 555 P.2d 1283,

1285 (Okla. 1976). Moreover, punitive damages cannot be

awarded unless actual damages are awarded. Davidson v. First

Bank & Trust Co., 609 P.2d 1259 (Okla. 1976).

The very nature of punitive damages is regulatory. They

are “private fines levied by civil juries to punish reprehensible

conduct and to deter its future occurrence.” Gertz v. Robert

Welch, Inc., 418 U.S. 323, 350 (1974). The power to award

punitive damages elevates a jury, untrained in the complexities

of nuclear technology, to a position where it can usurp the

regulatory judgment of the NRC in determining what radiation

exposure levels are permissible and what safety measures must

be taken. Further. the punishment and deterrent purposes of

punitive damages serve a regulatory function in that they

directly affect the standard of care exercised by a defendant.

The impact of a punitive damages award is no less substantial

than a statute enacted by a state legislature or a regulation

32 The fundamental distinction between punitive damages and

compensatory damages was articulated by Justice Brennan in Smith v.

Wade, 103 S.Ct. at 1638:

itive damages ... are never awarded as of right, no matter

egregious the defendant's conduct. ... Compensatory dam-

ages, by contrast, are mandatory; once liability is found, the jury

is required to award com tory damages in an amount

appropriate to compensate plaintiff for his loss.

26

promulgated by a state administrative agency.*° Indeed, regu-

lation by an award of punitive damages is more powerful than

a statute or formal administrative regulation because the

amount of the award is often arbitrary and generally uncon-

trollable, JBEW v. Foust, 442 U.S. 42, 50-51 n.14 (1979), and

the regulatory standard is vague, amorphous, and pronounced

after the fact. The conclusion that exemplary damages are

regulatory in nature is so compelling that the appellant has

abandoned its earlier argument and admits that “regulation can

be as effectively asserted through an award of damages as

through some form of preventive relief.” Appellant’s Br. 43,

quoting, San Diego Unions v. Garmon, 359 U.S. 236, 247

(1959).

Punishment and deterrence of nuclear licensees are not

powers that Congress has expressly ceded to the states. There is

no indication, express or implied, that Congress ever intended

these functions to be controlled by the states. Therefore, the

state effort to punish and deter conduct related to radiation

hazards, as exercised in the form of punitive damage awards, is

preempted by federal occupation of the field.

The appellant attempts to circumvent a finding of preemp-

tion by arguing that punitive damages were awarded in this

case merely to regulate Kerr-McGee’s “state of mind” ( Appel-

lant’s Br. 44-48). Thus, according to the appellant, the

regulation effected by the award was for “purposes other than

protection against radiation hazards.” 42 U.S.C. 2021(k). This

sophistic argument ignores the fact that the supposed “out-

rageous conduct” in this case involves the allegedly unsafe

%3 Thus, the Tenth Circuit properly relied on Northern States

Power Co. v. Minnesota, 447 F.2d 1143 (8th Cir. 1971), aff'd mem.,

405 U.S. 1035 (1972) in finding preemption of punitive damages.

Prohibiting the emission of radioactive effluents by administrative

regulation, as occurred in Northern States, is no different than

permitting a private plaintiff to recover punitive damages against an

NRC licensee who has emitted such effluents to punish the licensee

and deter him from doing it again.

27

manner in which Kerr-McGee conducted its operations at its

plutonium processing facility. The district court noted that

“punitive damages in this case were awarded for conduct that

caused or permitted the escape of plutonium and led to the

contamination of Silkwood in her apartment” (J.S.App. 72a).

Thus, in imposing punitive damages in this case, the jury was

not merely punishing a state of mind, they were prescribing the

manner in which Kerr-McGee must conduct the operations in

its plutonium plant. This Court stated in Pacific Gas & Electric

that state regulation of the operation of a nuclear power plant is

impermissible because “such regulation, even if enacted out of

non-safety concerns, would nevertheless directly conflict with

the NRC’s exclusive authority over plant construction and

operation.” 103 S.Ct. at 1726.

Although the purposes underlying the award of punitive

damages in matters of state concern may serve a societal

interest, the appellant’s characterization of such damages as a

“state tort right” that is “deeply rooted in local feeling and

responsibility” (Appellant’s Br. 46) exaggerates the historical

importance of punitive damages as well as a state court’s role in

awarding them. Because punitive damages are not a part of the

compensatory scheme and are actually windfalls to a successful

plaintiff, they have been the subject of vigorous criticism for

many years. In his dissent in Smith v. Wade, Justice

%* Many courts have noted that punitive damages are not a

“favorite in the law.” See, e.g., Linscott v. Rainier Nat. Life Ins. Co.,

606 P.2d 958 (Idaho 1980); Town of Jackson v. Shaw, 569 P.2d 1246

(Wyo. 1977); Kelsay v. Motorola, Inc., 384 N.E.2d 353 (Ill. 1978).

Moreover, the doctrine of exemplary damages has been subjected to a

variety of constitutional attacks including violation of due process,

equal protection and the prohibition against double jeopardy. See

Ghiardi & Kircher, Punitive Damages $§$3.01-07 (1983); Wheeler,

The Constitutional Case for Reforming Punitive Damage Procedures,

69 Va. L. Rev. 269 (1983).

28

Rehnquist summarized this Court’s prior holdings concerning

punitive damages:

[P]unitive damages are frequently based upon the caprice

and prejudice of jurors. (Citation omitted). We observed

in Electrical Workers v. Foust, 442 U.S. 42, 50-51 n.14

(1979), that “punitive damages may be employed to

punish unpopular defendants,” and noted elsewhere that

“juries assess punitive damages in wholly unpredictable

amounts bearing no necessary relation to the harm

caused.” Gertz v. Robert Weich, Inc., 418 U.S. 323, 350

(1974). Fimally, the alleged deterrence achieved by

punitive damage awards is likely outweighed by the

costs—such as the encouragement of unnecessary litigation

and the chilling of desirable conduct—flowing from the

rule, at least when the standards on which the awards are

based are ill-defined.

103 S.Ct. 1641-42. Justice Rehnquist~also noted that “a

significant number of American jurisdictions refuse to condone

punitive damage awards.” Jd. at 1642.

The appellant’s statement that punitive damages serve an

interest which “belongs peculiarly to the states” ( Appellant's

Br. 44) finds no support in legal experience or in the circum-

stances of this case. The functions of punishment and deter-

rence ..« hardly within the exclusive province of a state court.

For example, this Court has held that an award of punitive

damages is available in a federal action brought under 42

U.S.C. § 1983. Smith v. Wade, 103 S.Ct. 1625. Moreover,

punishment in the form of civil and criminal penalties is

commonly levied by federal regulatory agencies, including the

Nuclear Regulatory Commission (see footnote 28, supra).

When a deterrent mechanism is already provided by a regu-

latory agency, a state has no compelling reason to provide a

private plaintiff a forum in which to receive punitive damages.

The imposition of a punitive sanction upon a nuclear

licensee, in particular, is a matter of federal rather than local

control. The nuclear industry is a field in which the government

at one time held a monopoly and in which it has continued to

maintain a controlling position. Because the hazards of nuclear

29

materials must be carefully balanced with the nation’s energy

and defense needs, the interest of the federal government in

exercising complete control over the operations of licensed

facilities overshadows any local interest in accomplishing an

objective that may be performed by the NRC.%

The appellant argues that if punitive damage awards are

preempted, compensatory damage awards must also be pre-

empted since all damage awards regulate a defendant’s stan-

dard of conduct (Appellant’s Br. 43). Since the Tenth Cirmit

affirmed the property damage award, the appellant conteuds

that there exists a basic inconsistency in the Tenth Circuit's

analysis. This argument overlooks the fact that certain powers

have been ceded to the states either through specific legislative

enactments or through congressional intent as evidenced by the

legislative history of the Atomic Energy Act and its amend-

ments. For example, Congress has specifically authorized the

states to regulate radioactive air pollutants from nuclear plants

in the Clean Air Act Amendments of 1977, 42 U.S.C. § 7422,

and to impose certain siting and land use requirements for

nuclear plants in the NRC Authorization Act for Fiscal Year

1980, Pub. L. 96-295, 94 Stat. 780 (1980). Another area

specifically ceded to the states is the compensation of tort

victims of a nuclear incident that does not rise to the level of an

%8 The labor law cases cited by the appellant do not concern

conduct which the federal government has an overriding interest in

controlling. See, e.g. Farmer v. Carpenters, 430 U.S. 290 (1977)

(plaintiff complained of public ridicule, verbal abuse, and other

methods of harassment); United Automobile Workers v. Russell, 356

U.S. 634 (1958) ( plaintiff threatened with bodily harm and generally

intimidated ); United Construction Workers v. Laburnum Construc-

tion Corp., 347 U.S. 656 (1954) (plaintiff threatened and in-

timidated). Moreover, those cases involve an entirely different

regulatory scheme than the one under analysis in this case. As the

Court stated in City of Burbank v. Lockheed Air Terminal, Inc., 411

U.S. 624, 638 (1973): “Our prior cases on preemption are not precise

guidelines in the present controversy, for each case turns on the

particularities and special features of the federal regulatory scheme in

question.”

30

extraordinary nuclear occurrence. This delegation is made clear

in the legislative history of the Price-Anderson Act, 42 U.S.C.

§ 2210. See discussion p. 34-39, infra. Thus, the appellant's

claim that the Tenth Circuit was inconsistent in finding no

preemption of compensatory damages while holding punitive

damages preempted has no merit.. Even if compensatory

damages do have some regulatory effect on radiation safety

concerns, they fall in an area specifically delegated to the states.

The appellant has advanced no new argument which

would prevent this Court from adhering to the preemption

analysis set forth in Pacific Gas & Electric.%* Because punitive

damages serve a regulatory function that falls within a field

occupied by the federal government, such awards are preemp-

ted.

C. Punitive Damages Are Preempted Because They Are an

Obstacle to the Accomplishment of the Purposes of the

Federal Nuclear Regulatory Scheme

In addition to being preempted when Congress has occu-

pied the field, state law is preempted if it “stands as an obstacle

to the accomplishment and execution of the full purposes and

objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52, 67

(1941).

% The appellant’s suggestion that an NRC licensee could in-

tentionally injure someone and be immune from punishment is untrue

as well as inapplicable here. There is no evidence that Kerr-McGee

intentionally caused the plutonium to be in Silkwood’s apartment. In

refusing to give an instruction on intentional contamination, the trial

judge stated: “I don’t think there's any evidence to sustain that...”

(Tr. 9984). The Tenth Circuit agreed (J.S. App. 8a). In any event,

there could never be an “intentional contamination” which would not

constitute a flagrant and manifold violation of NRC regulations and

the operator's license conditions, as well ~» the criminal laws. See,

e.g., 10 C.F.R. §§ 70.3, 70.71.

31

1. Punitive Damages Frustrate Congress’ Intent to Pro-

mote and Develop Nuclear Energy

The purposes and objectives of Congress concerning the

nuclear energy industry are expressed in the Atomic Energy Act

which sets forth a program “to encourage widespread participa-

tion in the developmerit and utilization of atomic energy for

peaceful purposes.” 42 U.S.C. § 2013(b). The promotion of

nuclear power continues to be a primary purpose of the Act

today. Indeed, in Pacific Gas & Electric, this Court dismissed

the argument that legislation enacted in recent years indicates a

congressional intent to abandon the objective of promoting

nuclear power.

[A] suggestion that legislation since 1974 has indicated a

“change in Congressional outlook” is unconvincing.

The continuing commitment to nuclear power is reflected

in the extension of the Price-Anderson Act's coverage until

1987, Pub. L. No. 94-197, § 2-14, 89 Stat. 1111-1115, as

well as in Congress’ express preclusion of reliance on

natural gas and petroleum as primary energy sources in

new power plants.

103 S.Ct. at 1731.97

37 In the Nuclear Safety Research, Development and Demonstra-

tion Act of 1980, 42 U.S.C. §§ 9701-08, Congress expressly accepted

the importance of nuclear power in its finding that “nuclear energy is

one of the two major energy sources available for electric energy

production in the United States during the balance of the twentieth

Century.” 42 U.S.C. § 9701(a)(1). Both the Act and its legislative

history reaffirm Congress’ commitment to promote nuclear power.

The Act establishes a detailed system of studies and research pro-

grams to assure the continued safety and viability of nuclear energy.

Congress would not enact such a comprehensive research and devel-

opment program if nuclear power were not to be promoted as a

32

The availability of punitive damages would conflict with

Congress’ continuing desire to promote and develop nuclear

energy. Because exposure to unlimited exemplary liability

would necessarily inhibit participation in the nuclear industry,

the development of nuclear power would be impeded. This is

particularly true here where there is no evidence of conduct by

Kerr-McGee causing the personal injury, but only general

allegations of unsafe plant operations. This conclusion is

supported by this Court’s holding in JBEW v. Foust, 442 US. at

52, that punitive damages may not be awarded against unions

for breach of the duty of fair representation because the

arbitrary nature of such damages creates a “chilling effect”

which would impair the effectiveness of unions. See also, Gertz

v. Robert Weich, Inc., 418 U.S. 323 (1974) (punitive damages

are precluded where they might impair First Amendment

rights ).

The arbitrary and capricious nature of exemplary damages

distinguishes such awards from fines levied pursuant to the civil

penalties provisions of the NRC regulations. While the penal-

ties imposed by the NRC may be severe, they are not subject to

the whims of a jury and thus do not create the same “chilling

effect.” To achieve and maintain active participation in the

nuclear energy industry, it is imperative that licensees not be

subjected to after-the-fact standards that are nothing more than

a “moving target.”

The conflict created by an award of punitive damages is

magnified when a licensee is subjected to extreme awards even

though it is in compliance with the federal regulatory scheme.

One need not speculate as to the potential for mischief; in this

case, the AEC found that Kerr-McGee was in compliance with

AEC regulations as they related to Silkwood’s alleged injury

and property damage ( Def. Exh. 37, II J.A. 729-790, Tr. 6154),

yet a civil jury apparently concluded that those regulations did

not impose a high enough standard. Such second-guessing by a

jury clearly frustrates the objectives which the Commission

sought to accomplish in creating and administering its regu-

lations.

33

2. Punitive Damages Conflict With Congress’ Express

Intent to Preclude Dual Regulation of Radiation Haz-

ards

Congress has recognized the need for expertise and

uniformity in the regulation of radiological hazards. In 1959,

Congress amended the Atomic Energy Act of 1954 to add

Section 274, 42 U.S.C. § 2021, which recognized and defined

the role of the states in connection with nuclear energy regu-

lation. The Senate Report accompanying the amendment states

that “[section 274] is not intended to leave any room for the

exercise of dual or concurrent jurisdiction by States to control

radiation hazards. . . . The intent is to have the material

regulated and licensed either by the Commission, or by the

State and local governments, but not by both.” S. Rep. No. 870,

86th Cong., Ist Sess. 9 (1959). AEC Chairman Graham

testified that after carefully examining the entire problem of

federal-state relations, “we have decided that it would be

undesirable to provide for the exercise of dual or concurrent

jurisdiction.” Hearings Before the Joint Comm. on Atomic

Energy on Federal-State Relationships, 86th Cong., |st Sess. 290

(1959). Mr. Lowenstein, Office of the General Counsel, AEC,

explained that concurrent jurisdiction would be a waste of

manpower and funds, and that it would lead to divided

responsibilities and bad safety controls. Jd. at 315.

After recognizing the undesirability of concurrent state and

federal regulation of radiation hazards, Congress determined

which regulatory functions could be delegated to the states.

Congress’ refusal to delegate the functions of punishment and

deterrence indicates its desire and intent that those responsi-

bilities be maintained exclusively by the federal government. If

a state were allowed to perform those functions simultaneously,

Congress’ intent to preclude concurrent regulation would be

frustrated.

34

Moreover, Congress’ intent to achieve uniformity of regu-

lation would be obstructed. When the state and federal

governments attempt to perform identical regulatory functions,

the potential for conflict is obvious. This Court in San Diego

Unions v. Garmon, 359 U.S. 236 (1959) stated:

Nor has it mattered whether the States have acted through

laws of broad general application rather than laws specifi-

cally directed towards the governance of industrial rela-

tions. Regardless of the mode adopted, to allow the States

to control conduct which is the subject of national regu-

lation would create potential frustration of national pur-

poses.

Id. at 244. Here, the trial court’s instructions invited the jury to

award punitive damages irrespective of Kerr-McGee’s com-

pliance with AEC regulations.** If uniformity is to be main-

tained and conflict avoided, the establishment of operational

standards for NRC licensees cannot be placed in the hands of

judges and jurors. The NRC must be the sole regulator in this

area. Only through the application and enforcement of uniform

health and safety standards promulgated by a national agency

will the objectives of Congress be realized. Northern States

Power Co. v. Minnesota, 447 F.2d at 1153-54.

D. The Price-Anderson Act Does Not Sanction State Imposi-

tion of Punitive Damages

The Price-Anderson Act, 42 U.S.C. § 2210, was enacted in

1957 as an amendment to the Atomic Energy Act of 1954.

Because of the risk of extensive liability in the event of an

accident, private industry had been reluctant to enter the

nuclear energy field. The Price-Anderson Act was intended to

reduce this hesitancy by putting a ceiling on the liability of

38 See Instructions 10, 12, and 27 (J.S.App. 10a, 103a, 118a).

Instruction 12 states that a finding of compliance “would not neces-

sarily preclude a finding of blameworthy conduct” meriting an award

of punitive damages (J.S.App. 103a).

35

nuclear licensees and by providing government indemnification

for additional amounts of liability. In 1965 the Act, which was

to expire in 1967, was extended for another ten year period.

Pub. L. 89-210, 79 Stat. 855 (1965). In 1966 Congress

amended the Act to set up a “waiver of defenses” system

whereby nuclear licensees waive certain traditional defenses in

situations involving a major nuclear catastrophe. 4? U.S.C.

§2210(n). This system eliminated the vagaries of diferent

state laws on the issues of strict liability and the statute of

limitations without the necessity of enacting a substantive

federal tort law. In 1975 the Act was again extended for

another ten years. Pub. L. 94-197, 89 Stat. 1111 (1975).

The appellant places heavy reliance on the Price-Anderson

Act in an attempt to fashion a congressional intent to sanction

state awards of punitive damages against federal licensees in

suits involving radiation hazards. The appellant cites numerous

references in the legislative history indicating a congressional

intent that the provisions of Price-Anderson would cause only

“minimal interference” with state tort law (Appellant’s Br. 30-

35). However, to strain these references to authorize or

approve punitive damages would distort the purpose of the Act

and conflict with Congress’ manifest intent to keep safety

regulation in the federal realm. Consequently, the references to

State tort law must be read as referring to state tort law for

purposes of compensation only.3%

The references to state tort law also must be read in the full

context of the Price-Anderson Act. The thrust of the original

Act in 1957 and the “waiver of defenses” amendments in 1966

was to compensate the public, not punish nuclear licensees.

The “clear intent” of Congress was to assure “that the public

would receive prompt and adequate financial compensation”

for any damage resulting from potential nuclear incidents. S.

38 See Comment, Implied Preemption of Punitive Damages for

Nuclear Accidents, 29 Am. U. L. Rev. 741, 765-68 ( 1980).

36

Rep. No. 650, 89th Cong., Ist Sess. 5 (1965).4 At the same

time, Congress wanted to moderate the deterrents to private

industrial participation in the nuclear industry. S. Rep. No.

296, 85th Cong., Ist Sess. 1 (1957). In all its consideration of

the Price-Anderson Act and its amendments, Congress made no

indication, express or implied, that it intended to authorize or

approve punitive damages.

Clearly, the intent of Price-Anderson was not to grant the

general public or the states means to punish or regulate the

conduct of nuclear operators.’ Rather, Congress’ sole intent

was to provide compensation to those injured from radiation

accidents. This intent was carried out in several ways. In the

1957 Act, insurance (or “financial protection”) requirements

were imposed on licensees. 42 U.S.C. § 2210(a). Indemnity by

the government was provided for incidents involving damages

in excess of available insurance coverage. 42 U.S.C. § 2210(c).

In the 1966 Amendment concerning waiver of defenses, Con-

gress acted to remove any uncertainty about the compensation

“© There are numerous other references in the legislative history

to the compensatory purpose of the Act. See, e.g., Hearings Before the

Joint Comm. on Atomic Energy on Government Indemnity, 85th Cong.,

Ist Sess. 9 (1957) (the bill eliminates possible gaps in the availability

of compensation to the public); id. at 169 (the government must

assure the public that it will be compensated for losses); S. Rep. No.

454, 94th Cong., Ist Sess. 14-17 (1975) (references to compensation

of claimants); S. Rep. No. 1605, 89th Cong., 2d Sess. 9-10 ( 1966)

(concern that inability to prove negligence may cause victims to go

without compensation). See also Duke Power Co. v. Carolina

Environmental Study Group, Inc., 438 U.S. 59, 93 (1978) ( Price-

Anderson is a mechanism for compensating victims).

41 In fact, a statement in S. Rep. No. 296, 85th Cong., Ist Sess.

(1957), indicates that willful misconduct should be dealt with through

administrative action. In noting that losses resulting from willful

misconduct would be covered by the insurance and indemnity pro-

37

of legitimate victims of a major nuclear accident by removing

the potential legal obstacles of negligence and contributory

negligence from any suit. Because of the uncertainty of whether

strict liability would be available, Congress feared that legiti-

mate claims might be left uncompensated. S. Rep. No. 1605,

89th Cong., 2d Sess. 3-4 (1966). To prevent this, a no-fault

compensation system was created for extraordinary nuclear

occurrences.

These were the principal concerns of Congress and the

legislative history must be read in that light. Congress was

concerned with providing compensatory financial protection

and assuring no-fault recovery without changing the substantive

laws of the states. This intent should not be transformed into a

congressional authorization of state intrusion into the exclusive

federal field of punishing licensees and regulating the way in

which they conduct the safety operations of their plant.

Further, punitive damage awards would defeat the main

purposes of Price-Anderson. The two basic goals of the Act are

to assure the availability of funds to compensate victims of

nuclear accidents and to encourage private industrial participa-

tion in the nuclear energy field. 42 U.S.C. § 2012(i); S. Rep.

No. 650, 89th Cong., Ist Sess. 4 (1965). In the event of a

major nuclear accident, windfall punitive awards to some

claimants could reduce the insurance and indemnity fund

available to compensate other victims. Moreover, the appel-

38

The appellant’s argument that Congress considered and

rejected a proposed amendment expressly forbidding punitive

damages (Appellant’s Br. 19, 36-37) is contrived. The appel-

lant’s treatment of the views of Professor Cavers is misleading

in that it inflates a single paragraph of a law review article into

a “proposed ... amendment” to the Price-Anderson Act

(Appellant’s Br. 37). The appellant’s implication is that the

Joint Committee on Atomic Energy (JCAE) and even Congress

as a whole gave this single paragraph of the article (which was

buried among the 41 appendices to the 1965 Hearings) detailed

consideration and made a reasoned rejection of the “proposal.”

In Professor Cavers’ testimony (which was given in 1965,

before the Committee was even considering the waiver of

defenses amendment) punitive damages are never even men-

tioned.*? The bill actually submitted to the JCAE in 1966 and

eventually enacted by Congress was silent on the issue of

punitive damages. H.R. 15913, 89th Cong., 2d Sess. (1966).

Equally meritless is the appellant’s claim that the AEC has

implemented the 1966 Amendments in a manner which shows

that punitive damages are not preempted (Appellant’s Br. 38-

39). The appellant cites language from a nuclear energy

liability insurance form which states that the waiver of defenses

does not apply to a claim for punitive damages. 10 C.F.R.

§$ 140.91, Appendix A. The cited language does not constitute a

recognition by the NRC that punitive damages are not preemp-

ted, but rather highlights the compensatory nature of the Price-

Anderson scheme. The AEC’s explanation for making the

waivers inapplicable to punitive damage claims was that “the

intent of the legislation is to assure compensation for injury... .”

33 Fed. Reg. 6962 (1968) (emphasis added). Thus, the

“2 Hearings Before the Subcomm. on Legislation af the Joint

Comm. on Atomic Energy on Proposed Extension af AEC Indemnity

Legisiation, 89th Cong., \st Sess. 21 1-223 ( 1965).

39

language in the insurance form shows no more than the fact

that the Commission did not want to foster or facilitate claims

for punitive damages in cases of extraordinary nuclear occur-

rences and made the waivers inapplicable to such claims.“

Further, the language in the insurance form does not address

the question of preemption and cannot be taken as an official

interpretation by the Commission on that question. On the

contrary, the only official interpretation the Commission has

issued on preemption emphasizes the broad scope of preemp-

tion under the Act. See, 10 C.F.R. § 8.4(i) (Congress intended

to preempt the “total responsibility and authority” over radi-

ation hazards).

“3 The insurance form referred to by appeliant is not a required

form but is merely one which would be acceptable to the Commission.

See 10 C.F.R. § 140.15(a)(3). For this reason, the NRC recently

issued a rule to remove this form insurance policy from the

40

The court below fully accommodated the interest of com-

pensating victims of nuclear accidents by recognizing that in

Oklahoma the law of strict liability is available in such situ-

ations. In holding that punitive damages are preempted in this

case, it also accommodated the interest of preserving exclusive

federal control over the safety aspects of nuclear power.“

“ The appellant has argued, in a cursory fashion, that the Tenth

Circuit’s decision violates the due process and equal protection

guarantees of the Constitution because it precludes the submission of

a punitive damages claim to a jury and fails to provide a substitute

remedy for punitive damages (Appellant’s Br. 49 0.48). These

contentions are without merit.

Under the circumstances presented in this case, the principles of

due process and equal protection require no more than that Congress’

decision to preclude punitive damages not be “demonstrably arbitrary

or irrational.” Duke Power Co. v. Carolina Environmental Study

Group, 438 U.S. 59, 84 (1978). Here, the legislative determination to

preclude awards of punitive damages is neither arbitrary nor irratio-

nal; rather, it is logically related to the goals of implementing a

uniform federal regulatory scheme for radiation hazards and encour-

aging private participation in the nuclear industry.

Indeed, the Court in Duke Power specifically noted that “in

general, limiting liability is an acceptable method for Congress to

utilize in encouraging the private development of electric energy by

atomic power...” 438 U.S. at 86. The Ninth Circuit in Jn Re Paris

Air Crash, 622 F.2d 1315 (9th Cir.), cert. denied, 449 US. 976

41

Il.

THE FINAL, NON-REVIEWABLE HOLDING BY THE

TENTH CIRCUIT THAT THE DISTRICT COURT HAD

NO JURISDICTION TO HFAR APPELLANT’S PER-

SONAL INJURY CLAIM ELIMINATES THE BASIS

FOR THE PUNITIVE DAMAGE AWARD

In stating the case, the appellant has wholly ignored the

plain fact that the punitive damages were awarded here based

on claims of personal injury to Silkwood. The court of appeals’

non-reviewable** ruling that the personal injury claim is pre-

cluded by the Workers’ Compensation Law niullifies the

$10,000,000 punitive damage award since that award was

incident to the personal injury claim. This is true without

regard to federal preemption.

The appellant has attempted to invoke this Court’s manda-

tory appellate jurisdiction under 28 U.S.C. § 1254(2), which

restricts review to the federal questions presented. Accordingly,

the appellant’s Jurisdictional Statement is confined to challeng-

ing the Tenth Circuit’s reversal of the award for punitive

damages on federal preemption grounds; it does not and cannot

seek review of the Tenth Circuit’s holding that the trial court

lacked juris¢‘ction over the personal injury claim because of the

exclusive remedy provided by Oklahoma’s Workers’ Com-

pensation Act.** Even were this Court to grant certiorari under

“This Court will not review on appeal under 28 U.S.C.

§ 1254(2), a lower court's interpretation of state law. City of

Mesquite v. Aladdin's Castle, Inc., 455 U.S. 283, 292 (1982).

“ The appellant intimates ( Appellant's Br. 8 1.13) his intention

42

28 U.S.C. § 2103, the Tenth Circuit’s holding that the trial court

lacked jurisdiction over Silkwood’s personal injury claim would

not be subject to review.*”

Since the trial court had no jurisdiction over the personal

injury claim, any award of punitive damages predicated upon

that claim cannot stand.4® The liability prescribed by the

( Footnote continued from preceding page.)

appellant such latitude. The district court stated that there was no

evidence of intentional injury by Kerr-McGee (Tr. 9984, 9989); the

Tenth Circuit agreed and specifically held that because there was a

lack of evidence of intentional contamination by Kerr-McGee the

evidence “required the Court to grant judgment n.o.v. holding that

workers’ compensation was the exclusive remedy for personal injuries

suffered by Silkwood” (J.S.App. 9a). Second, the appellant can make

no pretense of having withheld evidence relevant to intentional

contamination, since any such evidence would also have been relevant

to establish Kerr-McGee's purported malice —necessary to an award

of punitive damages. Finally, the applicability of the Workers’

Compensation Act was vigorously asserted at every stage of this

action.

47 Only the questions set forth in the jurisdictional statement will

be considered by the Court. Sup.Ct.R. 15.1(a), 34.1(a). There are

limited exceptions which the Court has made, none of which is

applicable here, such as the “plain error” rule usually invoked only in

criminal cases. Silber v. United States, 370 U.S. 717, 718 (1962).

4 In Oklahoma, exemplary damages cannot constitute an inde-

pendent basis for a cause of action, and are recoverable only as an

incident to the recovery of compensatory damages. Barnes v.

McKinney, 589 P.2d 698, 700 n.1 (Okla. Ct. App. 1978). Without a

claim for actual damages, a claim for punitive damages no longer

exists. Davidson v. First Bank and Trust Co., 609 P.2d 1259, 1262

(Okla. 1976); Fuller v. Neundorf, 278 P.2d 836, 839 (Okla. 1954).

43

Oklahoma Workers’ Compensation Act is “exclusive and in

place of all other liability of the employer and any of his

employees, at common law or otherwise, ...”*® and does not

include any provision for punitive damages. The Oklahoma

Act is characteristic of workers’ compensation laws throughout

the country. A respected commentator on these laws has

discussed the non-availability of punitive damages where work-

ers’ compensation applies. 2A Larson, The Law of Workman’s

Compensation § 65.37 (1982) states:

Although punitive damages are of course not recoverable

under a workers’ compensation act, it does not follow that

a suit for punitive damages escapes the exclusiveness bar.

On the contrary, at any point where compensatory dam-

ages would be barred, punitive damages are also barred.

There is no deviation in reported case law from the rule as

stated by Professor Larson.5’

“* Okla. Stat. Ann. tit. 85, § 12 (West Supp. 1982). The cases

have consistently implemented this clear directive. £.g., Carroll v.

Dist. Court of Cherokee County, 579 P.2d 828 (Okla. 1978). The

exclusivity provision represents a “trade-off,” whereby an employee

“relinquishes his/her right to sue for damages sustained in job-related

injuries” in exchange for the protections accorded under the Act.

Weber v. Armco, Inc., 54 Okla. BJ. 1267, 1268 (Okla. 1983).

$ Okla.Stat.Ann. tit. 85, § 12, reproduced at p. 62 of App. to

Kerr-McGee’s Motion to Dismiss or Affirm.

51 Cases in which it was held that the exclusivity provisions in

workers’ compensation laws preclude an award of punitive damages

include: North v. United States Steel Corp., 495 F.2d 810, 814 (7th

Cir. 1974); Dickson v. Mountain State Mut. Cas. Co., 650 P.2d |, 3

(N.M. 1982); Liberty Mut. Ins. Co. v. Stevenson, 368 S.W.2d 760,

762 (Tenn. 1963); and Ellis v. Rocky Mountain Empire Sports, Inc.,

602 P.2d 895, 898 (Colo. Ct. App. 1979).

The Tenth Circuit has held that the exclusivity provision of the

Oklahoma Workers’ Compensation Act precludes recovery of com-

pensatory and punitive damages for injuries covered by the Act, even

though plaintiff alleges “the highest possible degree of negligence.”

Arrington v. Michigan-Wisconsin Pipeline Co., 632 F.2d 867, 871

( 10th Cir. 1980).

as

The appellant’s statement of facts (Appellant’s Br. 8-14)

details Silkwood’s contamination and emphasizes that which is

no longer involved in this case—the personal contamination of ©

Karen Silkwood. Indeed, the loss of Silkwood’s personal

property—stipulated to be worth $5,000—is mentioned by the

appellant only in passing, as it was at trial. Thus, ignoring the

Tenth Circuit’s holding that the trial court had no jurisdiction

over the personal injury claim, the appellant continues to urge

assessment of the purported culpability of Kerr-McGee in the

context of the gravity of harm to Silkwood personally—not to

her property.

There can be no doubt that the jury awarded punitive

damages as incident to the personal injury claim. The trial

court’s instruction on punitive damages shows the basis of the

punitive award to be personal injury (Instruction No. 19,

J.S.App. 112a-113a). Further, the trial court refused to set

aside the punitive damage award as excessive on the express

ground that the court believed the award bore some relations-

hip to personal injury, and made no mention of property

damage (J.S. App. 83a-85a).

As to the property damage award, the jury was directed to

return its verdict for the appellant on the basis of /iabdility

without fault.52 This was acknowledged by the Tenth Circuit,

which affirmed that award not on the basis of negligence or on

the basis of evidence of any intentional act or omission of Kerr-

McGee, but simply because the source of the plutonium which

contaminated Silkwood’s personal property was stipulated to be

the Kerr-McGee plant and the damage which occurred was

foreseeable (J.S.App. 20a-21a).

Oklahoma law requires a causal relationship as a nexus

between the injury to be compensated and any punitive dam-

82 See Instruction No. 18 and No. 20 (J.S.App. 109a-11 1a; 113a-

116a).

45

ages which may be awarded. In Hobbs v. Watkins, 481 P.2d

746, 747-48, 753-54 (Okla. 1971), the court, while recognizing

that the amount of an award of exemplary damages is not

necessarily governed by the amount awarded as compensatory

damages, states the rule that “[e]xemplary damages must bear

some relation to the cause and extent of one’s injuries. . . .” Jd.

at 747-48 (emphasis added). Since the property damage

award was made and sustained on the basis of liability without

fault and since the plaintiff conceded it could not show how the

plutonium got into Silkwood’s apartment, the property dam-

ages here were not and could not be the predicate for any

punitive damage award in this case. The personal injury

claim—the only basis upon which the award for punitive

damages could have been made—has been entirely removed by

the Tenth Circuit’s non-reviewable holding that the workers’

compensation statute barred the personal injury claim. Thus,

without any proper predicate for punitive damages the award

cannot stand. On this ground alone the judgment below should

be affirmed.

$3 Other grounds for the reversal of the trial court’s punitive

damage judgment were urged on appeal to the Tenth Circuit by Kerr-

McGee, but were never considered because of the disposition below.

Among these are:

(1) Kerr-McGee’s substantial compliance with AEC regulations

negates any finding of malice required for punitive damages;

(2) there is no evidence of malice by Kerr-McGee;

(3) the trial court erred in certain of its instructions concerning

punitive damages;

(4) the misconduct of counsel and prejudicial publicity pre-

vented a fair trial; and

(5) the punitive damage verdict was excessive.

These grounds were extensively briefed below and relied on a detailed

review of the record in their analysis. In the event that the present

case is not dismissed or affirmed, this cause should be remanded to

that court for consideration of these other grounds.

46

CONCLUSION

For all of the foregoing reasons, this appeal should be

dismissed or, in the alternative, the judgment below should be

affirmed.

Respectfully submitted,

C. Let Cook, Jr. WruiaM G. PauL*

WILLIAM Van HaGEY L. E. STRINGER

Wriam T. McGraTH Joun J. Grirrin, Jr.

PaMELa J. KEMPIN Harvey D. ELis

Chadwell & Kayser, Lid. Crowe & DUNLEVY

8500 Sears Tower 1800 Mid-America Tower

Chicago, IL 60606 20 North Broadway

(312) 876-2100 Oklahoma City, OK 73102

(405) 235-7700

* Counsel of Record

RICHARD R. WILFONG E.tiott C. FENTON

Kerr-McGee Center Larry D. Ortaway

Oklahoma City, OK 73102 FENTON, FENTON, SMITH,

(405) 270-2847 RENEAU & MOON

405 Midland Center

Oklahoma City, OK 73102

(405) 235-4671

Counsel for llees, Kerr-McGee Corporation

— Kerr-McGee Nuclear Corporation