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

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

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

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

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

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

In Mazzocchio, the plaintiffs claim that a group of defendants negligently disposed of and stored certain radioactive wastes, exposing them to tortious levels of radiation.¹⁰ Although the plaintiffs pleaded, among other things, a PAA claim, they did not plead that the defendants had violated federal permit standards, particularly the federal nuclear dosage limits.¹¹ The defendants moved to dismiss on those grounds, arguing that a PAA claim fails as a matter of law at the motion-to-dismiss stage unless it pleads a violation of applicable federal radiation standards.¹² The district court disagreed, concluding...