Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984)

JUSTICE POWELL, with whom THE CHIEF JUSTICE, JUSTICE MARSHALL, and JUSTICE BLACKMUN join, dissenting.

The Court’s decision, in effect, authorizes lay juries and judges in each of the States to make regulatory judgments as to whether a federally licensed nuclear facility is being operated safely. Such judgments then become the predicate to imposing heavy punitive damages. This authority is approved in this case even though the Nuclear Regulatory Commission (NRC) (then the Atomic Energy Commission) (AEC) -- the agency authorized by Congress to assure the safety of nuclear facilities -- found no relevant violation of its stringent safety requirements worthy of punishment. The decision today also comes less than a year after we explicitly held that federal law has "preempted" all "state safety regulation" except certain limited powers "expressly ceded to the States." Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Comm’n, 461 U.S. 190, 212 (1983).{1} There is no express authorization in federal law of the authority the Court today finds in a State’s common law of torts.

Punitive damages, unrelated to compensation for any injury or damage sustained by a plaintiff, are "regulatory" in nature, rather than compensatory. The Court of Appeals for the Tenth Circuit so found in this case -- prior even to our decision in Pacific Gas & Electric Co. 667 F.2d 908, 922 (1981). It also concluded that punitive damages are "no less intrusive than direct legislative acts of the state." Id. at 923; see San Diego Building Trades Council v. Garmon, 359 U.S. 236, 247 (1959). I agree with the Court of Appeals.

I

The facts are instructive. During a 3-day period in November, 1974, Karen Silkwood was contaminated by plutonium from one of respondent Kerr-McGee’s plants that had been built and was operated pursuant to federal law and subject to extensive regulation by the AEC. Silkwood was absent from her job for only a week -- from November 7 until she returned to work on November 13. That night, she was killed -- as the Court states -- "in an unrelated automobile accident." Ante at 242. There is no evidence that Silkwood suffered any specific injury,{2} temporary or permanent, other than mental distress for a short period. In a state law tort action against Kerr-McGee brought by Silkwood’s father, the jury awarded "actual damages" of $505,000 and "punitive damages" of $10 million. The District Court entered judgment on the verdict.

Where injury is sustained as a result of the operation of a nuclear facility, it is not contested that compensatory damages under state law properly may be awarded. Rather, in view of the purpose and effect of punitive damages, the question is whether such damages may be imposed not to compensate the injured citizen or her family but solely to punish and deter conduct at the nuclear facility.{3}

A

The purpose of a punitive damages award was made clear by the District Court’s instructions. The jury was authorized to impose such damages to "punish"

the offender for the general benefit of society, both as a restraint upon the transgressor and as a warning and example to deter the commission of like offenses in the future.

585 F.Supp. 566, 603 (WD Okla.1979).{4} The jury also was advised that punitive damages need not be proved by "direct evidence of fraud, malice or gross negligence." Ibid. Rather, these could be "inferred." Ibid. Although there was no evidence showing a direct causal connection between any Kerr-McGee neglect and Silkwood’s minor contamination, two witnesses -- testifying as experts -- found fault in general with operations at the plant such as inadequate employee training and lack of supervision.{5} The AEC, in the discharge of its regulatory responsibility, had cited the plant some 75 times over a period of years for various minor violations.{6} None of the violations, however, was shown to have caused the contamination, or deemed substantial enough to justify imposition of fines by the AEC.{7} Moreover, the Commission had investigated the physical security system at the plant only two months before Silkwood’s contamination, and found no significant deficiencies. After her contamination occurred, the AEC conducted an investigation of that incident. Again, no significant violation of AEC regulations was found. See ante at 244; AEC Directorate of Regulatory Operations, Investigation Report No. 7409, p. 5 (Dec. 16, 1974).

Nevertheless, the jury imposed $10 million of punitive damages, and, on a motion for judgment n.o.v., the District Court agreed with the jury’s award, based on its finding that the "escape of plutonium [was] caused by grossly negligent, reckless and willful conduct." 485 F.Supp. at 585. These serious conclusions simply were "inferred" -- in the absence of specific evidence -- from the fact that some plutonium contamination had occurred and from the testimony of petitioner’s experts as to overall operating conditions at the plant.

The Court defends the awarding -- even on the basis of inferences -- of punitive damages judgments by lay juries with no competency to understand the highly sophisticated technology of nuclear facilities. In doing so, it states:

Congress assumed that traditional principles of state tort law would apply with full force unless they were expressly supplanted. . . . [T]he company is unable to point to anything in the legislative history or in the regulations that indicates that punitive damages were not to be allowed.

Ante at 255. In my view, this conclusion is irreconcilable with Pacific Gas & Electric Co.’s preemption holding.

B

We stated in Pacific Gas & Electric Co. that "the Federal Government has occupied entirely the field of nuclear safety concerns." 461 U.S. at 212. On its face, this is a holding that state action of any kind in this area is preempted, whether or not Congress has been silent on specific issues that may arise. See Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141, 153 (1982); United States v. Shimer, 367 U.S. 374, 381-383 (1961). We reiterated this principle of preemption in Pacific Gas & Electric Co. when we held that only those "powers expressly ceded to the States" are not preempted. 461 U.S. at 212 (emphasis added).

Petitioner concedes that Congress did not refer to punitive damages in the text or legislative history of the 1954 Act or its subsequent amendments. The absence of an express reference appears plainly to bring state law of punitive damages within the sweeping preemption we found that Congress intended in Pacific Gas & Electric Co. Nevertheless, the Court today makes an exception to the rule announced only last Term by refusing to find preemption unless the party arguing for preemption can find direct support in the statute, legislative history, or regulations. Where broad federal preemption has been found, the burden of proving an exception always should be on the party who wishes to rely on state law. The Court’s decision today inexplicably shifts this burden to allow state law to prevail in the absence of a showing that Congress expressly had intended to preempt it.

The Court does purport to find some indirect evidence of congressional intent not to preempt state punitive damages law in the legislative history of the Price-Anderson Act, enacted in 1957. In considering the relevance of this Act, it is important to bear in mind that it did not apply at all to the Kerr-McGee plant at the time of this incident, and that its purpose was not regulatory in any relevant sense whatever. Price-Anderson was the result of concern, particularly prevalent when experience with nuclear energy had been limited, that extraordinary nuclear disasters could occur. In anticipating such an occurrence, the primary concern -- of course -- was to assure compensation for persons who suffered loss or injury. Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 93 (1978). A secondary, but nonetheless important, concern was that private enterprise be encouraged to build and operate nuclear powerplants to meet the anticipated energy needs of our Nation. With the then uncertain prospect of a nuclear plant disaster that would bankrupt the utility, some sort of federally backed insurance plan was desirable in the overall public interest, as well as that of the primary victims who suffered injury. Id. at 63-65. Accordingly, in summary, Price-Anderson provided that the aggregate liability for a single nuclear accident may not exceed $560 million. Licensees were required to purchase the maximum amount of insurance available in the commercial insurance industry (approximately $60 million), and the Government agreed to indemnify licensees for the remainder. In addition, Price-Anderson required that licensees must waive all legal defenses and must agree to be subject to strict liability in the event of an extraordinary nuclear occurrence. Id. at 65.

Thus, neither the Price-Anderson Act itself nor its purposes are relevant to this case. Petitioner and the Court, finding nothing whatever in the legislative history of the Atomic Energy Act, cite several statements in the legislative history of Price-Anderson that there was no intention to change state tort law.{8} There is no mention in this history of state punitive damages law. The argument, however, is that "tort law" includes both compensatory and punitive awards. This may be true generally, but certainly not necessarily true in the context in which the term "tort law" was used in Price-Anderson. When considering legislation addressing the possibility of a catastrophic nuclear accident, it was natural for Congress to make clear that the availability of compensatory damages in ordinary personal injury and property damages cases was not at issue. Such damages were to be imposed without fault. Congress was not concerned in that Act with the "punishment" of nuclear plants through jury imposition of punitive damages.

However one may view the bits and pieces of the Price-Anderson Act’s legislative history, for present purposes, the regulatory plan would appear to be clear. The regulation of nuclear safety then, as now, had been entrusted by a different Act to an expert body with full authority to issue comprehensive regulations and assess penalties, and with the obligation to oversee the safety of nuclear operations.

II

Even if Pacific Gas & Electric Co. had not been decided, I would find preemption of punitive damages awards because they conflict with the fundamental concept of comprehensive federal regulation of nuclear safety.{9} See Hines v. Davidowitz, 312 U.S. 52, 67 (1941).

A

Congress has been committed to the policy of encouraging private development of nuclear energy from 1954 to the present.{10} We explicitly recognized this commitment in Pacific Gas & Electric Co., 461 U.S. at 206-207. The economy particularly of the Western Democracies -- perhaps, indeed, democracy itself -- depends upon the energy that is now primarily derived from fossil sources. No informed person suggests that these sources are inexhaustible. We had a brief but shattering experience in 1973 during the embargo on Middle East oil. The effect of this experience confirmed the wisdom -- indeed necessity -- of identifying and exploiting alternative energy sources -- particularly for the long-term. The most promising new source identified to date is nuclear-generated energy.

Public safety always has been an overriding concern both in Government regulation and the industry. Striking the balance between the need to promote nuclear development and the responsibility to insure public safety is a task that requires a unique level of professional expertise. Congress has enacted detailed legislation and created a highly qualified administrative agency to promulgate and enforce regulations.{11} Those regulations constitute a uniform body of law carefully designed to balance safety and efficiency in nuclear facilities across the country. Northern States Power Co. v. Minnesota, 447 F.2d 1143, 1153-1154 (CA8 1971), summarily aff’d, 405 U.S. 1035 (1972).

The effectiveness of the overall program requires that nuclear policy and regulation be insulated from ad hoc, uninformed and perhaps biased decisionmaking.{12} It is reasonable for a nuclear facility to be held liable, even without fault on its part, to compensate for injury or loss occasioned by the operation of the facility. It is not reasonable to infer that Congress intended to allow juries of lay persons, selected essentially at random, to impose unfocused penalties solely for the purpose of punishment and some undefined deterrence. These purposes wisely have been left within the regulatory authority and discretion of the NRC.{13}

B

This case is a disquieting example of how the jury system can function as an unauthorized regulatory medium. Under accepted principles of tort law, punitive damages may not properly be awarded on the basis of negligent conduct. A jury therefore must find malicious, wanton, or grossly negligent conduct. As noted above, the evidence presented by plaintiff at the trial, for the most part, was wide-ranging "expert" testimony as to the overall operation of the defendant plant. There was little evidence related in any causal way to the plutonium leak that contaminated Ms. Silkwood. Nor was there any evidence whatever of the "oppression," "fraud," "malice," or "wanton reckless[ness]" mentioned in the trial court’s inflammatory instructions to the jury. See supra at 278.

More importantly, the trial court did not instruct the jury, as would have been proper, that, if it found that Kerr-McGee had complied with the regulations there could be no finding of fraud, malice, or wanton or reckless conduct. Rather, in effect, the jury was told that it could decide that the regulations were invalid:

[S]uch regulations do not have to be accepted by you as right or accurate if they defy human credence, are questionable under best scientific knowledge, or can be shown not to accomplish their intended purpose.

485 F.Supp. at 606 (emphasis added). Until today, I had not understood that a jury lawfully could be instructed on the basis of its own determination of "human credence" to conclude that a presumptively valid federal regulation simply could be ignored. This Court nevertheless -- without knowing which of the jumble of instructions the jury actually followed{14} -- concluded that the award of punitive damages does not conflict with the regulation program established by Congress and the AEC. On the record, it is at least more likely than not that the jury totally ignored federal regulations as authorized by the trial court. Moreover, the Court attaches no importance to the fact that the AEC -- the agency that adopted the regulations and was responsible for their enforcement -- investigated the Silkwood incident and found no significant violation of its regulations. See supra at 277.

C

As support for its conclusion that punitive damages and federal nuclear safety regulation do not conflict, the Court states that Congress did not intend to promote private development of nuclear power "by means that fail to provide adequate remedies for those who are injured by exposure to hazardous nuclear materials." Ante at 257. The Court cites no authority -- in the statute, its history, or the regulations -- for its view that Congress intended that "adequate remedies" for persons injured should include "award[s] of punitive damages." Nor was this case tried on the theory that punitive damages could be awarded as a remedy for injuries suffered by Silkwood. The instructions to the jury were precisely to the contrary, and were explicit that the purpose of punitive damages was to "punish" the "offender for the general benefit of society." Supra at 276. And petitioner has not argued in this Court that the $505,000 of "actual damages" awarded were inadequate for the injury suffered in this case. The $10 million of punitive damages were simply a windfall for petitioner.

III

In sum, the Court’s decision will leave this area of the law in disarray. No longer can the operators of nuclear facilities rely on the regulations and oversight of the NRC. Juries unfamiliar with nuclear technology may be competent to determine and assess compensatory damages on the basis of liability without fault. They are unlikely, however, to have even the most rudimentary comprehension of what reasonably must be done to assure the safety of employees and the public.{15} The District Court in this case, by instructing the jury that it could infer malice, fraud, or gross negligence (see ibid.), in effect authorized the jury to impose punitive damages without fault. And, to make sure that the jury understood its standardless freedom in this respect, the Court also instructed the jury that it could ignore the regulations prescribed by the AEC if in its opinion they defied "human credence" or "can be shown not to accomplish their intended purpose." Supra at 284.

We hardly could have spoken more clearly in Pacific Gas & Electric Co. on April 20, 1983, on the issue of preemption.

State safety regulation is not preempted only when it conflicts with federal law. Rather, the Federal Government has occupied the entire field of nuclear safety concerns. . . .

461 U.S. at 212. This left no doubt whatever as to the sole responsibility for nuclear safety regulation under the governance of the NRC and its large staff -- experts in the technology and safety controls of nuclear energy. This case makes clear the correctness of the Court’s holding in Pacific Gas & Electric. Co. Today, the Court opens a wide and inviting door to indirect regulation by juries authorized to impose damages to punish and deter on the basis of inferences even when a plant has taken the utmost precautions provided by law. Not only is this unfair, it also could discourage investment needed to further the acknowledged national need for this alternative source of energy. I would affirm the judgment of the Court of Appeals.

1. In Pacific Gas & Electric Co., we held:

State safety regulation is not preempted only when it conflicts with federal law. Rather, the Federal Government has occupied the entire field of nuclear safety concerns, except the limited powers expressly ceded to the States. When the Federal Government completely occupies a given field or an identifiable portion of it, as it has done here, 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 Act."

461 U.S. at 212-213.

2. The autopsy after Ms. Silkwood’s death indicated that her body contained 8.8 nanocuries of plutonium. AEC regulations specified that the permissible body burden of plutonium for employees of nuclear facilities was 40 nanocuries. Disagreeing with the AEC, an expert witness for petitioner speculated at trial that the amount of plutonium contamination Ms. Silkwood experienced might have manifested itself in the form of lung cancer and chromosome damage at some future date.

3. The distinction in this case between the two types of damages is of major importance. There is no element of regulation when compensatory damages are awarded, especially when liability is imposed without fault as authorized by state law. Moreover, personal injuries are finite. To be sure, as the compensatory award in this case illustrates, these can result in large compensatory judgments. But juries do have guidance from physicians, medical records, lost wages, and -- where permanent disability or death occurs -- actuarial testimony as to lost earnings and life expectancy. None of these is present when punitive damages are awarded. The contrast also is illustrated by this case. A jury with neither pretrial knowledge of nuclear plant operations nor evidence to guide or limit its discretion chose $10 million. It could, as well, have been almost any other amount.

4. The trial court also instructed the jury that the size of any punitive damages award should be

consistent with the general purpose of such an award in deterring the defendant, and others like it, from committing similar acts in the future, and for punishment of the defendant for such acts.

585 F.Supp. at 603.

5. Silkwood also proffered reports of AEC investigations of incidents occurring in 1971, 1972, and 1973. The incidents of most concern were a fire on March 5, 1973, and radioactive seepage from a waste container discovered on September 25, 1973. Neither incident resulted in any contamination outside the Kerr-McGee plant or in any injury from contamination of Kerr-McGee employees. The AEC did not fine the company in either instance. Other testimony on behalf of Silkwood criticized generally the training of new personnel, the use of respirators in contaminated areas, the design of glove boxes in the plant, and a perceived lack of awareness of Kerr-McGee employees that exposure to plutonium may cause cancer.

6. It is evident from these facts that the AEC was diligent and thorough in overseeing the safety of the Kerr-McGee plant.

7. In fact, except for the contamination of Silkwood that caused her to lose seven days of work, there was no evidence that anyone else had ever been injured by contamination from the Kerr-McGee plant. There was evidence of one incident involving minor contamination outside the plant that occurred on April 17, 1972. In that instance, three maintenance personnel at the plant violated company regulations by leaving for breakfast without checking themselves for signs of contamination. Upon their return, it was discovered that they had received low level contamination prior to leaving for breakfast. None of these employees was shown to have suffered any injury. The amount of contamination involved in this incident was so minimal that an AEC official testified that there was no need for Kerr-McGee to report it to the AEC.

8. See, e.g., S.Rep. No. 1605, 89th Cong., 2d Sess., 25 (1966); S.Rep. No. 296, 85th Cong., 1st Sess., 9, 22 (1957).

9. Silkwood argues that the regulation of Kerr-McGee’s conduct through punitive damages is an area of local, rather than federal, concern. Assuming, arguendo, that this assertion is correct, the degree of local concern is irrelevant. Federal preemption doctrine applies regardless of the importance of the issue to local authorities. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141, 153 (1982). As the Court stated in Free v. Bland, 369 U.S. 663 (1962):

The relative importance to the State of its own law is not material when there is a conflict with a valid federal law, for the Framers of our Constitution provided that the federal law must prevail.

Id. at 666.

10. As a result of advances in nuclear technology, the percentage of total electricity produced in the United States by nuclear means rose from zero in 1954 to 12% in 1981. See Statistical Abstract of the United States, 1982-1983, P. 581; 2 Historical Statistics of the United States 826 (1975). During that period, and to this day, I do not recall that any fatalities have occurred as a result of contamination from nuclear facilities. Much of the credit for the progress and safety record of the nuclear industry also must go to Congress for enacting appropriate safety regulatory authority, and to the action and oversight of the AEC and its successor, the NRC.

11. Congress gave the AEC several means of enforcing its regulations. The Act provides for injunctive remedies, civil penalties, and revocation of licenses for violation of the terms and conditions of the license. 42 U.S.C. §§ 2236, 2280, and 2282 (1976 ed. and Supp. V). The Act also provides criminal sanctions for willful violations of the Act and most AEC (NRC) regulations. 42 U.S.C. §§ 2272 and 2273 (1976 ed. and Supp. V).

12. In recent years, there has been a dramatic increase in public concern over all nuclear activities -- a concern that may well influence juries. No doubt this has been caused by the public’s new awareness of the potential for vast destruction through the use of nuclear weapons -- an awareness evidenced by the now commonplace demonstrations and antinuclear groups and movements that can exist, of course, only in the free world. Often little or no distinction is made between nuclear powerplants designed to help insure the future of our civilization and the proliferation of nuclear weapons that could destroy it. Those who fail to see this distinction seem to be unaware of the overall safety record of the nuclear power industry in the United States and other countries. See Cohen, Most Scientists Don’t Join in Radiation Phobia, Wall Street Journal, Nov. 30, 1983, P. 28, Col. 4 ("even well-educated segments of the American public are badly misinformed" as to the risks associated with the nuclear power industry).

13. The Atomic Energy Act currently provides that the NRC can levy civil penalties for violations of licensing provisions, rules, regulations, or orders. 42 U.S.C. § 2282(a) (1976 ed., Supp. V). The penalties may not exceed $100,000 for each violation, but where a violation is a continuing one, each day of the violation is considered a separate violation. Ibid. At the time of Ms. Silkwood’s contamination, the maximum limit on civil penalties was $25,000. 42 U.S.C. § 2282(a), amended by Pub.L. 96-295, 94 Stat. 787. By establishing maximum fines, Congress implicitly stated its views on the size of monetary penalties it deemed sufficient to achieve both punishment and deterrence. See H.R.Rep. No 96-1070, pp. 33-34 (1980); S.Rep. No. 96-176, pp. 23-24 (1979).

14. The instructions invited the jury to condemn the entire operation of the Kerr-McGee plant. The instructions, purporting to state "the law" that the jury was "bound to follow," were some 10,000 words long, requiring 30 pages in the printed appendix. They were repetitive, arguably conflicting, and would have confused a panel of experienced lawyers. It is unlikely that any lay juror had any idea what law he or she was called upon to apply.

15. The Court cites a House Report in which Congress expressed its misgivings about the ability of the States to deal with the complex and technical nature of the safety considerations in the nuclear industry. See H.R.Rep. No. 1125, 86th Cong., 1st Sess., 3 (1959). The Court, nevertheless, is willing to allow a jury, untrained in even the most rudimentary aspects of nuclear technology, to impose heavy penalties on the basis of its own perceptions or prejudices.