Report to the Congress from the Presidential Commission on Catastrophic Nuclear Accidents

CHAPTER THREE
Claim Priority

    The preceding chapter has described the procedures recommended by the Commission for payment of claims arising from a major nuclear accident. These procedures combine the efficiency and cost-containing features of administrative adjudication placed within a judicial framework. If the Commission's proposals are followed and Congress amends the Act to provide for a federal right of action, all issues arising out of the assertion of, or in defense against, this federal right of action would be governed by the provisions of the statute, supplemented by the authority of a judge to fashion a federal common law derived from the underlying policies of the statute, the direction in which the laws of the states are moving, and informed by the exercise of mason and experience in light of specific circumstances. The Commission now turns to the question of what standards of compensation should be provided in the statute.

    The Commission has been directed to make “recommendations for any standards or procedures that are necessary to establish priorities for the hearing, resolution, and payment of claims when awards are likely to exceed the amount of funds available within a specific time period.”1

    The Commission began its task by undertaking abroad analysis of the unique compensation issues that would arise following a major nuclear accident with a view to devising a prioritization system under which claims would be resolved and paid as fairly, promptly, and efficiently as possible. Looking to the goals that should be served by the Act and relying upon public policy considerations, the Commission has formulated and here recommends a prioritization plan addressed to these issues and concerns. In conjunction with the Commission's recommendations for procedural changes in the previous chapter, these proposals form the basis of a new system for compensating victims of a major nuclear accident and would require enactment by Congress. Also, drawing upon the considerations and concerns that have inspired these recommendations for change, the Commission has suggested a prioritization plan of more limited scope that could be implemented within the context of the current Price-Anderson compensation scheme if statutory changes are not made.

    Issues of claim priority are necessarily linked with issues of procedure. The nature of the compensation plan — administrative or judicial — as well as the procedural method of its implementation have a direct bearing on substantive decisions regarding the evaluation and prioritization of claims. Similarly, the treatment of claims involving cancer injury arising years and decades after exposure will directly affect initial claim recognition and compensation decisions. Because unique questions relating to latent injuries following a nuclear accident require detailed consideration, this is the subject of a separate chapter, which follows.

    A basic premise of the Commission's recommendations is that, as currently contemplated by the Act, the nuclear insurers will make emergency cash payments on the basis of immediate need to those affected by a major nuclear accident or precautionary evacuation, The Commission has assumed that emergency distributions will continue while the formal claim resolution process gets underway and, as also currently provided by statute, that receipt of emergency payment by a claimant in no way constitutes a waiver by the claimant of any right to assert claims under the Act. To the extent that a claimant has received emergency payments, those payments will be treated as an advance distribution of the claimant's final award, as is currently provided by the statute.2

  1. Goals of the Claim Priority Plan
  2. Congress has committed itself to ensuring that those injured by a nuclear accident receive full compensation for their losses. This Commission itself is a demonstration of that commitment. The Commission believes the proposed plan, with its various procedural and evidentiary recommendations, is true to this congressional goal because it will provide more claimants with generally greater recovery more promptly and more consistently than would be possible in a traditionally litigated tort action.

    The prioritization plan should seek to achieve other important goals as well. One such goal is that claimants and the public understand the plan to be one that operates as fairly and equitably as possible. Ultimately the success of the plan depends on its public acceptance, and if the plan is not recognized as a fair one, it will not be supported.

    Perceptions of fairness will be complicated, however, by the fact that public debate over the use of nuclear power is often a highly charged and emotional one. The Commission believes public support for the plan would be encouraged, and the fairness of the plan substantially increased, if some form of remedy were provided as widely as possible to those affected by a major nuclear accident, particularly to claimants for whom relief might not ordinarily be required under generally accepted legal principles.

    Thus, for example, the Commission has recommended medical monitoring in relatively low exposure situations where traditional burdens of proof and available scientific evidence would otherwise fail to support recovery. Similarly, the Commission has recommended that psychological counseling be available to those who have suffered emotional distress as a result of the dislocations and losses caused by a major nuclear accident. In addition, pecuniary losses, such as lost wages or medical expenses associated with emotional distress, should be compensated when claimants establish clear causal connections between distress and the nuclear accident.

    Related to public perceptions of fairness, a fundamental goal of the prioritization plan should be to ensure equity among claimants. To the greatest extent possible, similarly situated claimants should be compensated similarly. This is distinct from - and not always completely reconcilable with - notions of individual justice and the desire of every claimant to have a day in court. Because jury awards are so unpredictable and can vary so dramatically, individual jury trials will often result in the disparate treatment of like claimants. This can seriously erode public confidence in the fairness and equity of the claim resolution process. The Commission is of the view, therefore, that in the context of a system of compensation under the Act, the goal of promoting equity among claimants will sometimes require that claims be treated on a less individual basis. Thus, for some categories of claims, it will be preferable to construct a schedule or scale of payments that will operate to compensate individuals more equitably by ensuring that claimants similarly injured will recover similar amounts.

    These are the goals that should be served by the compensation plan of the Act. Losses should be compensated promptly and fairly, and the plan should be viewed by claimants, as well as by defendants, the public, and Congress, to be the most equitable possible under the circumstances.

    Compensation for loss, however, is only one of the goals of the traditional tort system. Tort law has historically been regarded as serving regulatory, deterrent and retributive ends as well.3 The merit of these historical goals, however, is less manifest in the context of the Price-Anderson plan than in the case of other industries, specifically those that have been the subject of mass torts. First, the nuclear industry is already one of the most closely regulated and highly monitored industries in the nation.4 Second, strong deterrence is provided by existing criminal and civil penalties that are specific to the nuclear enterprise,5 as well as simply by the enormous capital investment and source of income a nuclear power plant represents, the loss of which would certainly cause severe economic dislocation to the utility company that owned it.6 Lastly, the costs of retributive justice would not be borne by the actual wrongdoer. Because damage awards are satisfied through industry-wide contributions to the retrospective insurance Pool, these costs would be borne instead by the entire nuclear utility industry and, ultimately, its ratepayers.7

    The goal of the Price-Anderson plan is to provide compensation for loss, and, thus, regulatory, deterrence, and retributive concerns should be accorded little weight in determining recoveries under the Act. Because these noncompensatory goals serve as the basis for the full range of claims and recovery traditionally available in tort, the Commission has concluded that full compensation in the Price-Anderson context should not require providing recovery for all claims that might be recognized under present common-law principles of tort. Thus, for instance, the Commission believes historic justifications for certain common-law claims, such as punitive damages, are less relevant in the context of the Act, and such claims should not be available. For similar reasons, the Commission does not believe full compensation always necessarily requires the same measure of recovery that may be available at common law, as, for example, with regard to claims of intangible loss. Furthermore, because the proposed Price-Anderson compensation plan provides claimants with procedural and evidentiary advantages that produce a swifter, more easily obtained, and more certain recovery than would be possible in a traditionally litigated tort action, overall reductions in awards may be appropriate.8 For these reasons, given the offsetting benefits to claimants of the proposed system in general, recommendations that certain claims generally available in tort be compensated in lesser amounts or not at all are, in the Commission's view, consistent with the notion that claimants will be fully compensated.

    The Commission believes that, in view of the basically compensatory nature of recovery under Price-Anderson, the Act should be regarded not so much as a tort scheme but as a comprehensive insurance program, prospectively insuring all potential victims against losses that might be caused by a major nuclear accident. In the wake of natural disasters such as hurricanes or earthquakes, there is no compensation for emotional distress, loss of consortium, and similar claims because these are not insured losses. To the extent it is considered an insurance plan, it is appropriate under the Act to reduce or eliminate recovery for claims of this type. This approach is supported by the history of the Act, which clearly indicates that it was conceived as a substitute for insurers' inability to provide nuclear utilities and suppliers with sufficient protection.

    Lastly, the Commission recognizes that Congress' desire to provide full compensation must at some level be constrained by pragmatic considerations of fiscal policy. The steeply rising costs of programs such as the Black Lung Act have made Congress inherently wary of committing itself to federal injury compensation schemes when potential liabilities are ill-defined or highly speculative.9 Thus, because of the enormous potential liabilities involved in the Price-Anderson context,10 it is appropriate to recommend a prioritization plan that, consistent with basic notions of due process and fundamental fairness, attempts to place reasonable constraints on the costs of compensation, while at the same time remaining true to Congress' promise that claimants will be fully compensated.

  3. Summary of Recommendations
  4. As described in the previous chapter on civil procedures, the system proposed by the Commission is composed of a progression of settlement opportunities upon the filing, removal, and consolidation of claims in a federal court. Following generic determinations as outlined in the previous chapter, the court would encourage defendants to make settlement offers based on these determinations. In the event the parties reject the informal awards, they could demand binding arbitration, and claimants could demand plenary adjudication, including a jury trial. These proceedings would be governed by federal statutory and common law, and by generic determinations previously made by the federal court without a jury. However, rebuttable presumptions could be challenged in arbitration or Plenary adjudication.

    The Commission makes the following recommendations regarding compensation of claims arising from a nuclear accident. These recommendations would apply to every step of the claim resolution process, including binding arbitration and plenary adjudication, unless otherwise indicated.

    1. Pecuniary losses caused by a nuclear accident or evacuation should be compensated dollar-for-dollar.

    2. Claims for nonpecuniary losses caused by a nuclear accident or evacuation should be compensated as follows:

      1. Claims for wrongful death should be uniformly compensated at a predetermined amount.

      2. Claims for pain and suffering when arising in connection with acute radiation syndrome and other physical injury should be compensated on a scheduled basis.

      3. Claims that exposure has increased the risk of future injury should be compensated when coupled with a certain threshold level of exposure. Compensation should take the form of participation in a medical monitoring program. Subsequently diagnosed cancer would be compensated as described in Section III below.

      4. Claims that evacuation or exposure has caused emotional distress should be compensated. Compensation should take the form of emotional distress counseling. However, claims such as lost wages or medical expenses associated with emotional distress should be compensated as pecuniary losses, subject to claimants establishing clear causal connections between their distress and the nuclear accident.

      5. An allowance for loss of community in a fixed amount should be provided to those who require permanent relocation. This allowance should be provided in addition to pecuniary losses.

    3. All claims arising from latent health effects, pecuniary as well as nonpecuniary, should be compensated in accordance with the recommendations of Chapter 4. Many of these claims would not be compensated at all under current common-law principles because of difficult issues of causation. At present, “probability of causation” appears to be the best available proxy for causation. (A detailed discussion appears in Chapter 4 and Appendix H.) In the future, a more appropriate methodology may be devised by employing the analytical techniques most widely accepted at the time of the accident.

    4. The costs of the claim resolution process, including the costs of plaintiffs, defendants, and the court itself in initiating, prosecuting, investigating, sealing, or defending claims, should be compensated, subject to review and limitation by the court or specially appointed cost master on a reasonableness standard and subject to exception for plenary adjudication of individual claims as discussed in the previous chapter.

    5. Payments from collateral sources should not be used to offset recovery except when a claimant has demanded plenary adjudication. In no case, however, should proceeds from life insurance policies be used to offset recovery.

    6. The nuclear insurance pools will make emergency payments for claims of immediate needs. Claims resolved under the proposed plan, therefore, should be heard in the order in which they are received. A hardship exception should exist, however, to permit the earlier resolution of claims where urgent needs require, the more immediate supplementation of emergency payments.

    7. Compensable pecuniary losses should be paid on a dollar-for-dollar basis and other compensable losses should be paid according to a schedule, as previously recommended. Awards would ordinarily be made on a lump-sum basis, but claimants should be permitted the choice of receiving either a lump sum, discounted to present value where future injury is a component of the loss, or an annuity that would provide a continuing series of periodic payments.

    8. Punitive damages should not be recoverable under the Price-Anderson compensation system.

  5. Discussion
  6. The Act presently provides that claims arising out of a nuclear accident are “public liability actions.”11 The cause of action is provided by federal law, but the substantive rules for decision are taken from the laws of the state in which the accident has occurred. Thus, under the present legislation, what claims will be recognized, and in what form and to what degree compensation will be available can vary considerably, depending on the site of the accident and the law of the particular state in which the accident has occurred.12

    As discussed in the previous chapter, the task of compensating victims of a nuclear accident fairly and promptly will be made immensely more difficult if substantive rules of decision are provided by state law. Moreover, in recommending that some claims be compensated and others not, the Commission has necessarily assumed individual state law will not control these issues and that, in accordance with the Commission's recommendations, federal law will be adopted13

      A.   Pecuniary Losses Caused by a Nuclear Accident or Evacuation

      Recommendation: Pecuniary losses caused by a nuclear accident or evacuation should be compensated dollar-for-dollar.

      The Commission recommends as a general rule that claims for pecuniary losses incurred as the result of an accident should be compensated. Economic damages are a fundamental component of loss, and basic notions; of fairness require that these damages be recognized and paid.

      In lieu of providing extensive proof for claims of economic loss, however, and as discussed in detail in the previous chapter, claimants should have the option of accepting a flat amount in full satisfaction of their claims through the presentation of a simple affidavit. One example of this compensation alternative would be with respect to the loss of personal possessions as a result of relocation. Claimants could receive a scheduled amount for this loss by producing a simple affidavit showing proof of residence.

      An enormous variety of pecuniary loss will be sustained by individuals, businesses, and state and local governmental entities in the wake of a major nuclear accident. Loss will occur as the result of evacuation, the radioactive contamination of property, and physical injuries and death caused by the exposure of individuals to radioactive material. The Commission has set forth below many of the types of claims that can be expected. The Commission recommends that most of these claims be compensated, with certain exceptions and qualifications discussed below.14

      1.   Individuals

      • Costs associated with a temporary evacuation, including food, shelter, additional clothing, transportation, lost wages, possible damage to homes, and loss of personal property due to vandalism or theft, and harm to pets and livestock that cannot be evacuated;

      • Decontamination costs and loss due to the diminution of value of real property in areas that receive levels of radioactive exposure too low to justify abandonment or long-term evacuation;

      • In areas requiring permanent evacuation, the loss of homes and personal property, interim relocation expenses, including food, shelter and transportation, costs of securing new homes, jobs and schooling, and lost wages;

      • Medical expenses and lost wages as the result of physical injuries and severe cases of anxiety and emotional distress, including costs of emotional distress counseling;

      • Costs associated with deaths, including funeral expenses, loss of companionship, and the loss of support to dependents.

      2.   Farms and Businesses

      • Temporary evacuation costs, including business interruption losses, such as lost profits and lost opportunity costs, damage to real property and inventory due to vandalism, theft, and spoilage, customer shunning because of stigma, and damage to forage, water, milk, crops, and livestock;

      • Where permanent abandonment is required, losses of real property, inventory, crops, livestock, and other business related property, such as vehicles, office equipment, and furnishings;

      • Decontamination costs and loss due to the diminution in value of real property in areas that receive lower levels of exposure;

      • Economic damage to businesses, schools, hospitals, doctors, lawyers, accountants, and other professionals and self-employed persons caused by the loss of records and documents in the event reentry to property is denied on a long-term basis-,

      • Relocation costs as businesses and professionals move to unaffected areas and reestablish themselves;

      • Claims of loss from distant businesses whose commercial dealings with businesses in the affected area have been disrupted.

      3.   Federal, State, and Local Governmental Entities

      • Costs incurred as a result of emergency response efforts,15 including overtime and other extra expenses associated with unusual levels of effort by law enforcement, fire fighting, and other government personnel, necessary emergency supplies and equipment, emergency medical care and housing costs, and other general expenses involved in the planning and coordination of evacuation and emergency relocation measures;

      • Damage to public land (including recreational facilities) and structures, roads and highways, schools, transit systems, public water supplies, and sewer systems, and natural resources;

      • Loss of revenues provided by income, sales, and other taxes;

      • Loss of revenues due to reduction of the property tax base in areas that require either long-term or permanent evacuation;

      • Costs of decontaminating public land (including recreational facilities) and natural resources in areas of lower exposure;

      • Costs of establishing and maintaining an effective mechanism for the quarantine of any areas where contamination levels pose significant longterm radiation dangers.

      For the most part, pecuniary loss can be readily demonstrated and easily measured. Problems will exist, of course, where business or other records are unavailable, as in areas of greater radiological contamination, or incomplete due to poor business management practices or for other reasons. Moreover, the immense variety of businesses and record-keeping practices among them can complicate the claim determination process.16 Additional complications can arise in determining the appropriate method of valuation.17 Nonetheless, standards for the measurement of economic loss are well-established, and courts, the legal and accounting professions, and the insurance industry have enormous experience in this area.

      Although the Commission recommends that, in general, claims of pecuniary loss be compensated, it does not recommend that every claim for pecuniary loss be considered a compensable one. As described below, this may be the case when the claimant's own conduct improperly caused or contributed to the loss, and, for some claims or categories of claims, where the nuclear accident should not be considered a sufficiently proximate cause of the loss to wan-ant compensation. Additionally, claims of governmental -entities may require somewhat different treatment than claims of individuals and businesses, and at least one type of loss sustained by states and municipalities - that of reduced tax revenues - should not be compensated at all.

      1. Conduct of the Claimant. Claims for loss should generally not be compensated when loss occurs because a claimant has acted unreasonably. The Act presently provides that the waivers of defenses provisions18 do not require a waiver of the “failure to take reasonable steps to mitigate damages.”19 Thus, if a claimant acted unreasonably and would otherwise not have been injured, there should generally be no recovery. The Commission recognizes, however, that, when determining whether there has been unreasonable conduct on the part of the claimant. public perceptions of fairness may militate in favor of permitting latitude in some circumstances.

      2. Causation. The validity of the claim will become more problematic as the causal connection between accident and loss becomes more attenuated. For instance, may a tourist business 80 miles from the danger zone recover losses if there is a general area-wide decline in tourism following a nuclear accident?20 May a temporary evacuee who suffers debilitating anxiety and emotional distress recover the costs of psychological counseling and lost wages?21 May distant vendors or suppliers who have contracts with businesses in an evacuated zone recover lost profits if those contracts go unfulfilled?22

        These are issues of causation that can be difficult to resolve in particular cases. The economic consequences of a major nuclear accident win surely ripple outward across the country, with resulting losses to individuals and businesses far removed from the site of the accident itself.23 But the Act's compensation plan cannot serve as the insurer of all losses that bear some causal connection, no matter how attenuated, to the accident. Recognizing that a tortfeasor should not be liable to the world, the common law has evolved rules of limitation that rely on notions of “proximate cause,” “foreseeable consequences,” “zone of danger” and “limited duty.”24

        The application of such rules in particular cases or categories of claims are legal decisions that will be made by the court. There is often variation from state to state in the interpretation and application of these rules, however, and, consequently, similar cases could yield different results depending on which state's law was relied upon.25 Therefore, it is important that the court responsible for administering the Act's compensation plan not be bound by the rules of any particular state but should instead, as a matter of federal law, be free to adopt rules of limitation that are guided by the policy concerns reflected in the Act, its amendments, and its legislative history, and that operate as equitably as possible under the circumstances.

        Several further observations are in order regarding causation issues. First, pecuniary losses caused solely as the result of evacuation should be compensated as quickly as possible by the nuclear insurance pools. This is consistent with the present statute, which explicitly provides that losses arising out of areal as well as a precautionary evacuation are compensable.26 There should be no further requirement for recovery such as that the loss or any portion of it be attributable to some actual exposure to radioactive material. Rules of causation will still operate, however, to bar or limit recovery where the loss bears only a very attenuated causal connection with evacuation.

        Second, difficult issues of causation and compensation could arise with respect to the degree of actual exposure. There are, of course, the complex problems of statistical and epidemiological proof presented by claims of latent injury, which are discussed in the next chapter. While causation questions related to exposure would not be anticipated with regard to any occurrences of acute radiation syndrome, such questions could be directly implicated in the compensation of other claims because of uncertainties surrounding both the extent to which low levels of ionizing radiation pose hazards to human health and the determination of acceptable levels of exposure.27 The court will be required to determine what levels of contamination wan-ant outright abandonment or such long-term quarantine as to reduce present property values to zero, what levels require only short term evacuation and therefore compensation at some amount less than the full value of the property, and what levels can be considered to pose no danger to human health, thus warranting no compensation except perhaps to the extent property values may be diminished as the result of a public perception of risk. 'Me court will also be required to determine what levels of exposure can reasonably be considered the cause of various acute physical injuries and health problems other than latent injury.28

        As discussed in the previous chapter, the Commission recommends that a federal court, in a bench proceeding, make generic determinations of these levels with the aid of a court-appointed panel of scientific/medical experts and a legally-trained master as a presiding officer. Factors that should be considered by the court and its experts would include distance from the site of the accident, wind direction, and other considerations, and the result would yield exposure criteria linked to geographic location. These criteria could then be employed as causation presumptions for resolving claims of pecuniary loss. Treating the causation problems presented by varying degrees of exposure in this manner would simplify the claim resolution process and provide more uniform measures of recovery.

      3. Governmental Claims. As a final caveat to the general rule that pecuniary losses should be compensated, the Commission believes that the claims of municipalities, states, and the federal government should, perhaps, be treated differently than the claims of individuals and businesses. Because governmental entities can better withstand the immediate consequences of pecuniary loss, it maybe preferable to postpone payment of governmental claims until after the claims of individuals and businesses have been compensated. However, the Commission recognizes that some claims of governmental entities, for instance the expense of restoring essential services, may need to be compensated promptly to avoid further adverse impact on the public caused by any inability of local governments to immediately provide sufficient funds. And, although in general the claims of governmental entities should be compensated, the Commission believes loss of tax revenues should not be a compensable claim. States and municipalities will be compensated for a vast array of other losses, and a claim of lost tax revenues is so open-ended and, ultimately, so speculative a potential liability that it should not be permitted.29 Moreover, other considerations of fairness support this result as well. For the most part, states and municipalities have been recipients of substantial sums paid by nuclear power facilities in the form of state and local taxes; it is equitable that, just as these governmental entities enjoy significant benefits from the presence of a nuclear power plant, to some extent they share potential losses.30

      B.   Claims of Nonpecuniary Loss.

      Recommendation: Claims for nonpecuniary losses caused by a nuclear accident or evacuation should be compensated as follows:

      • Claims for wrongful death should be uniformly compensated at a predetermined amount.

      • Claims for pain and suffering, when arising in connection with acute radiation syndrome and other physical injury, should be compensated on a scheduled basis.

      • Claims that exposure has increased the risk of future illness should be compensated when coupled with a certain threshold level of exposure. Compensation should take the form of participation in a medical monitoring program, and, should illness occur, payment should be made as recommended in Chapter 4.

      • Claims that evacuation or exposure has caused emotional distress should be compensated. Compensation should take the form of emotional distress counseling. However, claims such as lost wages or medical expenses associated with emotional distress should be compensated as pecuniary losses, subject to claimants establishing clear causal connections between their distress and the nuclear accident.

      • An allowance for loss of community in a fixed amount should be provided to those who require permanent relocation. This allowance should be provided in addition to pecuniary losses.

      As described above, claims for pecuniary losses associated with death, injury, or property damage would be paid in full. Whether, or to what extent, claims for nonpecuniary or intangible losses should be compensated is an extremely difficult question. A number of arguments can be advanced in support of the proposition that, in the special circumstances of compensation under the Act, claims of intangible loss should not be compensated at all

      A principal reason for not recognizing intangible losses is that they are inconsistent with the insurance approach upon which the compensation plan is based. The fact that these losses are not insurable but are vigorously pursued in tort actions suggests that they are not so much claims of actual loss as they are instruments for assigning blame and exacting retribution. While not denigrating these goals in a pure tort scheme, the Commission believes they are not usefully pursued in the Price-Anderson context, the goal of which, as noted above, is compensation for loss.

      A further reason that such claims should not be compensated is the difficulty of quantifying the loss. Awards for almost identical harms vary enormously depending on the identities of the parties, the sympathies of the jury, the culpability of the conduct, and a host of other factors, known and unknown.31 The difficulty of translating intangible losses into hard cash does not - and should not - stand as an obstacle to recovery for these losses in an individual tort action. In the context of compensating victims of single event mass torts, however, greater emphasis should be placed on ensuring that similarly injured claimants are similarly compensated.

      Claims of intangible loss may also serve to increase the level of recovery in order to offset attorneys' fees.32 Allowing such claims permits recoveries in excess of economic loss so that legal costs will not reduce recovery to an amount that is less than actual out-of-pocket damages. A cushion of this sort is unnecessary in the Price-Anderson plan, however, as legal costs are separately recoverable under the Act in some circumstances, and the Commission recommends that this feature be extended to include separate provision for the award of legal costs for all claims.33

      Lastly, the Commission recommends retaining the various provisions in the present Act that remove obstacles to recovery — namely the waivers of defenses to liability.34 Claimants would be accorded greater procedural and substantive advantages under the plan that are not available to Plaintiffs in the traditional tort action. The Commission's proposed procedures to further ease claimants' burdens were discussed and recommended in the previous chapter. It may, therefore, be appropriate to reduce avenues and levels of recovery by narrowing compensation for intangible loss. This exchange of a speculative right to a greater recovery for a more certain right to lesser recovery has long been recognized by the Supreme Court as the underpinning of the constitutionality of workers' compensation.35

      Nevertheless, for the reasons that follow, the Commission concludes that some claims for intangible loss should be compensated under the Price-Anderson plan. A number of considerations support this decision, not the least of which are the public policy considerations discussed earlier in this Report. Specifically, the Commission recommends compensation for claims of wrongful death and for claims of pain and suffering linked to physical injury or disease. The Commission further recommends that there be programs of medical monitoring and emotional distress counseling, which, although serving other goals as well, would also publicly acknowledge that people in surrounding areas have suffered to some degree, in some way, as a result of the nuclear accident - even though there may be no recovery available to them in a court of law. In the claim categories for which monetary compensation is recommended, a scale or schedule should be employed to ensure, as much as possible, an equality of recovery among similarly situated claimants. Medical monitoring and emotional distress counseling will also serve this end.

      1. Wrongful death

        The Commission recognizes that awards for certain intangible losses serve an important function by promoting a public sense of fairness in several ways. Such awards provide a measure of psychological validation by formally acknowledging an individual's emotional pain. They permit recovery even where economic injury is absent. And they can ameliorate the perceived unfairness of what would otherwise be disparate levels of recovery among claimants whose emotional losses are similar but whose economic losses are not.

        These considerations are especially strong where death is concerned. When the death causes economic harm, such as loss of support, damages would be available. But under a rule that strictly bars any recovery for intangible harm, little or no compensation would be available for the death of a young child, or the death of a spouse who is retired. Although recovery for wrongful death has traditionally been limited to pecuniary loss, there is a growing trend to permit compensation for loss of the solace, love, and companionship that result from the death of a family member, and recovery for mental distress and anguish in such cases.36 Moreover, at least one recent federal statute expressly permits recovery for a wrongful death.37

        For these reasons, the Commission recommends that recovery be permitted for wrongful death. The award is not in lieu of claims of pecuniary loss arising from death but would be payable in addition to any recovery for pecuniary loss. The Commission further recommends that the award be an identical scheduled amount for all deaths,38 payable to the immediate family of the decedent. However, the Commission would leave to the court - or preferably to Congress determinations concerning the appropriate dollar amount for recovery.

      2. Pain and suffering

        Recovery for pain and suffering is deeply ingrained in public perceptions of justice. Although the Price-Anderson plan is envisioned more as an insurance plan than a tort compensation plan, it must be remembered that, at bottom, a major nuclear accident is a tortious event and will be so considered by its victims. Therefore, the Commission has concluded that it is desirable as a matter of perceived fairness to compensate pain and suffering in at least some circumstances. Nevertheless, claims for pain and suffering are claims for intangible harm, and thus, as discussed above, serve noncompensatory goals as well. Retribution and deterrence are commonly conceded to play a role in the awarding of damages for pain and suffering, and the awards also serve as a fund out of which attorneys fees can be paid. For these reasons, it is the Commission's view that awards for pain and suffering may be appropriately limited to certain situations and the amounts strictly controlled. Specifically, the Commission recommends that recovery for pain and suffering be permitted only when caused by actual physical injury and that payment levels be set according to a generic scale linking the amount of compensation to the severity of the injury.39 This approach should be relatively easy to administer and could be applied fairly among similarly situated claimants.

        The Commission considered various methods that could be used to set payment levels and prevent excessive awards, including a cap, a scale, a strict schedule, or some system that borrows and combines aspects of each of these methods.40 A cap, the limitation generally employed today in jurisdictions that limit pain and suffering damages, merely imposes an upper limit upon the recovery that can be paid for pain and suffering. Caps, as the sole mechanism for limiting pain and suffering, are unfair for several reasons. First, unless indexed for inflation, the cap loses value over the years, reducing recovery. Second, a cap, by its very nature, affects only those claimants most grievously injured and who, therefore, would have otherwise been awarded pain and suffering damages in excess of the cap. All those whose pain and suffering recoveries are less than the cap are not affected in any way by its existence, and this would not promote equity among claimants.

        A second alternative is a payment scale. Under this system, an upper limit, or cap, would be set and would represent the maximum amount that a claimant could be paid. Those most seriously injured and disabled would recover this maximum amount. To the extent a particular claimant's injuries were less severe, that claimant's recovery for pain and suffering damages would be adjusted downwards from this upper limit. Although this system would operate more equitably than a simple cap, the extent of downward adjustment in a particular case would be an unguided and thus relatively subjective determination that could result in unfairness: among similarly situated claimants.

        A third alternative is a strict schedule of awards. As in workers' compensation schedules, particular dollar amounts would be assigned to compensate for the pain and suffering caused by specific types of enumerated injuries. The advantage of such an approach is that in-depth, individualized scrutiny of each claim is avoided, thus promoting efficient and speedy administration of the claim resolution process. Nonetheless, the inflexible scheduling of awards cannot take into account individual variation from standardized injury profiles, and its relatively mechanistic nature thus gives rise to a significant perception of unfairness.

        The Commission recommends a system that combines features of these different alternatives to create a scheduled payment scale. Under this system, a minimum threshold of physical injury would be required before any recovery for pain and suffering would be permitted. A maximum figure would be fixed as compensation for pain and suffering associated with the most severely disabling injuries. Then various standardized injury profiles would be assigned particular dollar values.41 These profiles would then be used as models for determining an appropriate level of payment in particular cases of lesser injury or disability. The profiles would provide a range of recovery but would not mandate payment of specific predetermined amounts. There would be some room for discretion on the part of the Claim Master in proposing particular awards, which, in the Commission's view, should be limited to an upward or downward adjustment of no more than 20 percent. This would ameliorate to some extent the impersonal nature of a more strictly scheduled system. The reliance upon injury profiles and linked recovery values, however, would permit more efficient and prompt payment of claims than would be possible in an unguided and more individualized claim resolution process.

        A scheduled recovery has other advantages as well. As noted earlier in this chapter, it eliminates problems of inconsistent recovery that often arise when claims are individually litigated before juries. Inconsistency is especially unfair when claims of pain and suffering involve similar injuries caused by the same event- such as a single major nuclear accident - and thus where issues of liability and causation are identical. In such circumstances, inconsistent awards cannot be justified by assuming that one claimant's award was discounted because differing degrees of doubt existed with respect to proof of these issues, nor should it be supposed that one person's suffering is simply worth less than another's when both have sustained similar injuries.

        Additionally, although the scheduling of awards will prevent some individuals from receiving above average recoveries, scheduling will also ensure that no claimant will recover a less than average amount of historic recoveries. Scheduling will not reduce overall levels of recovery for claimants but serves instead to eliminate unjustifiable inconsistencies in recovery among particular individuals; claimants as a class will receive as much under a scheduled payment system as would be received in individually litigated actions. Thus it is the Commission's view that the scheduling of awards substantially increases fairness and does so without compromising recovery.

      3. Increased risk of disease and emotional distress

        The problem of whether - or how - to compensate individuals who have been exposed to increased levels of radiation but who suffer no present discernable harm is an extremely complex one. For the most part, these claims present difficult issues relating to the delayed onset of cancer that are addressed in detail in the following chapter. To the extent they should be considered claims that require immediate compensation, however, they also implicate issues of claim priority.

        As a general matter, claims predicated on an increased risk of disease from exposure to radiation have not been recognized at common law. They have been typically described by courts as too speculative to warrant compensation.42 Nonetheless, the Commission is concerned that the compensation plan acknowledge in some fashion the claims of those who, while not suffering economic loss, perceive themselves to be victims of the accident. For the most part, these will be people who have been exposed to relatively low doses of ionizing radiation. They will not have suffered present physical injury as the result of exposure, and the possible occurrence of future injury will be so highly speculative that epidemiologic and statistical proofs would not permit recovery in a traditional tort action at common law. Their anxiety and concerns will be substantial, however, and without some acknowledgement of their claims there could well be little public support for the compensation plan.43 Therefore, it is the Commission's view that, issues of latency aside, considerations of public policy and fundamental fairness require that some present remedy be provided to those who have been exposed to increased levels of radiation due to the accident.

        Various approaches to this problem have been proposed or adopted in the context of mass tort litigation. One course is outright compensation for the mere fact of exposure. The settlement of a DDT exposure class action litigation in Alabama,44 for example, compensated class members who suffered from none of the designated specific harms linked to DDT exposure, but whose tissues exhibited exposure to amounts of DDT that were measurably greater than typically occurring levels of background exposure. Individuals received $500 for each additional multiple of the baseline background exposure. Thus, a claimant whose exposure to DDT was three times greater than normal received $1,000 for the two additional exposure levels. A similar mechanism, although addressed to manifest minor injuries rather than latent injuries, has been utilized with great effectiveness in the claim settlement process of the Dalkon Shield litigation.45 The first tier settlement level of the Dalkon Shield Claimants Trust provides a lump sum payment of up to $725 solely upon the plaintiff's affidavit that injury was suffered through use of a Dalkon Shield. As of May 30, 1990, some 92,000 claims — about 48 percent of all those still active — had been disposed of through first tier settlements.

        The unique characteristics of the consequences of a major nuclear accident, however, make outright payment to all exposed individuals an impractical alternative. Exposed individuals may number in the hundreds of thousands. Although this, by itself, is not different from the numbers of claimants in the largest mass ton litigations, by far the major component of harm following a nuclear catastrophe will be damage to property and businesses, expenses associated with evacuation and relocation, and other costs unrelated to physical injury.46 These losses will occur immediately, rather than developing slowly over a long period of time. In these respects, the damage caused by a major nuclear accident differs dramatically from other mass tort situations. Significant financial burdens would be imposed upon the compensation plan if, in addition to immediate compensation for pecuniary losses, there were a further immediate cash distribution to all those exposed to radiation. Moreover, and perhaps most importantly, it is doubtful that a relatively de minimis cash payment will effectively address the concern over future disease that will certainly be experienced by most exposure victims.

        Another possibility would be to provide those exposed to radiation with some form of insurance protection. Medical expenses and, perhaps, other losses could be recovered should disease or illness develop in the future.47 This possibility is discussed in more detail in the next chapter in the context of latent injuries.

        A third approach to the problem has been the establishment of medical monitoring programs to ensure the early detection and treatment of future disease. Medical monitoring was a feature of the settlement of radiation exposure claims brought by residents surrounding the nuclear weapons plant in Fernald, Ohio.48 An award for medical monitoring expenses was upheld by the New Jersey Supreme Court as a legal remedy in a class action suit alleging exposure to toxic waste,49 and was also awarded as an equitable remedy by a Pennsylvania trial court in another toxic waste litigation.50 Other courts, however, have ruled that medical surveillance damages cannot be recovered unless the injury is “reasonably certain” to develop.51 The principal stumbling block to recovery, as for other forms of recovery when increased risk of disease is alleged, has been the absence of “present injury,” which is a prerequisite of recovery under general ton formulations.

        In the view of the Commission, a prepaid medical monitoring program represents the most sensible approach to compensating those who have been exposed to predetermined levels of radiation52 (see Chapter4). These remedies do not require the immediate expenditure of large sums, and will directly address the fears and concerns of the victims. Moreover, because less harm will be sustained when disease is detected through medical monitoring and treated at an early stage, such a program will likely reduce the future losses suffered by individuals as the result of latent injury.

        Similarly, emotional distress might best be handled by providing for stress counseling at no cost to all claimants when stress bears a direct causal connection with the nuclear accident. While emotional distress can occur and can be debilitating, it does represent an area where considerations of “moral hazard” — an incentive to cause a covered loss — can be especially strong. Offering treatment rather than cash should serve as an effective self-screening device and at the same time directly responds to the problem of emotional distress itself. While it is important that to be most effective stress counseling be made immediately available as an element of the earliest relief provided to claimants, some outer time limit for counseling — perhaps 18 months — might be reasonable in order to foreclose the possibility of abuse. Pecuniary losses incurred as a result of emotional distress, such as lost wages and other medical expenses, should be compensated when claimants establish a clear causal connection between the distress and the nuclear accident.

      C.   Latent Illnesses.

      Recommendation: All claims arising from latent health effects, pecuniary as well as non-pecuniary, should be compensated in accordance with the recommendations of Chapter 4.

      Because of the importance of this category of claims in the event of a major nuclear accident, and in view of the specific direction by Congress to address this subject, it is discussed in more detail in the following chapter.

      D.   Legal Costs.

      Recommendation: The costs of the claim resolution process, including the costs of plaintiffs, defendants, and the court itself in initiating, prosecuting, investigating, settling or defending claims, should be compensated, subject to review and limitation by the court or specially appointed cost master on a reasonableness standard and subject to exception for plenary adjudication of individual claims as discussed in the previous chapter.

      As presently structured, the Act imposes no limitation on the payment of legal costs unless a court determines that liability from a nuclear accident may exceed liability limits.53 Unless that determination is made, legal costs of the claimants are presumably paid by the claimants from their recoveries, and legal costs of the defendants are included within the definition of “financial protection .”54 If, however, a court does determine that liability limits may be exceeded, separate provision is made for the award of legal costs. In such cases, therefore, the statute operates to permit an additional award for legal costs, thereby preserving to the claimants the full amount of their recoveries. These awards are paid from the retrospective insurance pool; if liability limits are exceeded, the Act permits a further 5 percent assessment against contributors to the pool.55 It should be noted, however, that while this last provision speaks in terms of “legal costs,” the legislative history appears to indicate an intent that this provision of the statute be limited to attorneys' fees alone rather than all legal costs.

      The Commission recommends the law be amended to make clear that all costs of the claim resolution process, including fees of attorneys and expert witnesses, be a separate recovery awarded in addition to any recovery for other compensable losses. The Commission further recommends that separate recovery for legal costs be available in connection with all claims resolved under the Commission's proposed compensation plan except, as described in Chapter 2, when a claimant sought plenary adjudication and failed to better the informal offers. Several important goals will be served by expanding the statute in this manner.

      First, it will ensure that claimants receive full payment for compensable losses. Because no portion of a claimant's recovery will be used to cover attorneys' fees and other legal costs, it is no longer necessary to rely on awards for intangible harm to ensure that a claimant's recovery compensates for economic losses. This makes more equitable the prioritization plan's restrictions on recovery for intangible losses.

      Second, making a separate award for costs, particularly attorneys' fees, makes it much easier to supervise and control these costs. It gives the court an opportunity to review the costs to ensure that they are reasonable, and a lawyer's knowledge that court review will be undertaken will likely serve a self-policing function of its own.

      Lastly, legal costs should be lower because, provided the claim was brought in good faith and the other statutory prerequisites are met, attorneys' fees for all claims resolved under the proposed compensation plan, except as provided in Chapter 2, will no longer be contingent upon successful prosecution of the claim.56 This, as well as the fact that the lawyer will not have to wait years for a fee recovery as is often the case in mass tort litigations, will make unnecessary the large fee percentages — typically one-third of the client's recovery — that are customary when cases are litigated on a contingent basis.57

      An important component of the Commission's recommendation is that claims for legal costs, including attorneys' fees, be subject to strict review by the court or specially appointed cost master. The Act presently provides that when legal costs are separately awarded, these costs be “reasonable and equitable,” and that the party have “litigated in good faith, avoided unnecessary duplication of effort with that of other parties similarly situated, not made frivolous claims or defenses, and not attempted to unreasonably delay the prompt settlement or adjudication of such claims.”58 'Me Commission recommends that these requirements be rigorously applied and believes that significant limits on fees would, thereby, result. Moreover, while compensation for attorneys' fees without regard to success helps ensure that those claimants who need legal representation will be able to obtain it, the strict review of these fees will ensure that claimants are represented in a responsible and professional manner.

      As indicated in the preceding chapter on civil procedures, the Commission recommends that parties who pursue their claims beyond the administrative system to the courts shoulder their own counsel fees and other costs if they do not better the informal award previously offered.

      E.   Payments from Collateral Sources.

      Recommendation: Payments from collateral sources should not be used to offset recovery except when a claimant has demanded plenary adjudication. In no case, however, should proceeds from fife insurance policies be used to offset recovery.

      The collateral source rule bars a defendant from introducing evidence that a claimant has received or will receive compensation for losses from collateral sources such as insurers or governmental benefit programs. Because a defendant is thus prohibited from offsetting an award of damages by the amount of any collateral payments that may be received by the claimant, the effect of the rule is to permit a plaintiff to receive a double recovery to the extent the losses are also reimbursed through insurance coverage or from other sources. The rule's underlying rationale is that a tortfeasor should be required to pay for the full extent of the damages his conduct has caused, and therefore should not benefit, through a reduced award, as a result of any compensatory payments received by a plaintiff from third parties. Although double recovery arguably produces a windfall for the plaintiff. the rule reflects the value judgment that it is preferable to overcompensate a victim than to inadequately penalize a wrongdoer.

      In recent years, as calls for tort reform have intensified, the collateral source rule has been increasingly the subject of debate. The excess recovery that the rule permits is perceived by its critics to be a significant contributor to rising insurance costs.59 As a result, some 25 states have now abolished or modified the rule's application in at least certain circumstances, particularly in the context of medical malpractice actions and no-fault automobile insurance schemes.60 Additionally, at least two federal statutes, the Teton Dam Damages Act of 1976 and the National Childhood Vaccine Injury Act of 1986, restrict application of the rule with respect to claims brought under these Acts.61 Thus, although the rule has been a widely accepted feature of American tort law for well over one hundred years, it is by no means an immutable one.

      The logic behind the Commission's approach to the Act, namely that it should provide a system that compensates loss, would seem to suggest that claimants' awards should be reduced to the extent there has been recovery from such sources as health and disability insurance policies, unemployment benefits, workers' compensation, or other private or governmental schemes.62 Under this approach, the principal justifications for the collateral source rule appear to have little force in the special circumstances of a Price-Anderson compensation plan. First, although the rule may serve the general deterrent goals of tort law by ensuring that tortfeasors pay the full amount of the damages they cause, compensation rather than deterrence is the principal goal of the Act. That goal is realized whether compensation comes from a collateral source or from the Act's retrospective insurance pool. Second, the retributive function of the collateral source rule — namely that fairness demands that a tortfeasor shoulder the full amount of the victim's losses — is also not relevant in the Price-Anderson context, where losses are borne not only by the tortfeasor, but by the entire nuclear utility industry and ultimately the ratepayers as well. Lastly, to the extent double recovery is regarded as a necessary buffer to offset attorneys' fees,63 the fact that attorneys' fees are separately recoverable under the Act makes the rule unnecessary.64

      Nonetheless, reducing awards by the full amount of collateral recovery can raise substantial considerations of fairness. Often collateral protection will have been obtained by claimants at personal expense, through premiums paid for individual or employer-shared insurance coverage. In such cases, reducing awards by the fall collateral recovery would result in a net economic loss to claimants. Moreover, potentially significant areas of medical expense will be absorbed within the Price-Anderson system through payment for medical monitoring and for emotional distress counseling. Thus, it is not altogether clear that the “double recovery” problem will necessarily be a significant one in the context of the system the Commission is proposing. Additionally, issues of the scope and extent of possible collateral payments, and the degree to which costs of securing collateral protection should be attributed to individual claimants, will complicate and slow down the claim resolution process.

      For these reasons, the Commission recommends that the collateral source rule be applied at the informal hearing and arbitration stages of the claim resolution process. The Commission further recommends, however, that the rule be disregarded, except with respect to life insurance policies, should a claimant choose to proceed to trial. At trial, where proof of all elements of the claim will be necessary, collateral source issues will not unduly complicate further the adjudication process. Moreover, disregarding the collateral source rule at trial will provide a further incentive to claimants to avail themselves of the alternative claim resolution options provided by the Commission's proposed plan.

      F.   Punitive Damages.

      Recommendation: Punitive damages should not be recoverable under the Price-Anderson compensation system.

      Punitive damages, as the name implies, are intended to punish rather than to compensate for pecuniary loss. The focus is on the conduct of the tortfeasor rather than the loss sustained by the plaintiff.65 Historically they are justified with reference to regulatory, deterrent, and retributive goals.

      In the Commission's view and as discussed in Part I above, these justifications are less supportable in the context of a nuclear accident than they might be with respect to other mass torts. Moreover, the question of punitive damages is a “wild card” issue, which is generally determined by juries, and has the potential to exhaust Price-Anderson funds even as supplemented by Congress. This would defeat the Act's primary goal of providing compensation for loss. The possibility of a rich recovery on punitive damage issues could also easily lead an unmanageable number of litigants to request jury trials. Thus the Commission recommends that punitive damages not be available. The Act as it now exists clearly prohibits the recovery of punitive damages to the extent that a punitive award would be paid by the federal government pursuant to an agreement of indemnification.66 It is unclear whether the current Act permits recovery of punitive damages when the award would be paid using nongovernment funds, although there is authority from which it can be argued that such an award would not be prohibited.67

  7. Claim Ordering and Related Administrative Issues
    • A.   Ordering Claim.

      Recommendation: The nuclear insurance pools will make emergency payments for claims of immediate needs. Claims resolved under the proposed plan, therefore, should be heard in the order in which they are received. A hardship exception should exist, however, to permit the earlier resolution of claims where urgent needs require the more immediate supplementation of emergency payments.

      The Commission recommends that claims be considered and resolved in the order in which they are received. The Agent Orange distribution scheme employs this method for assigning priority to the consideration and resolution of claims. Its virtues are simplicity, ease of application, and general fairness. 'Mere is no reason to believe it would operate otherwise in the context of hearing and resolving nuclear accident claims. Resolution of claims in the order in which they are received is an administrative ordering concern that will have no effect on the ultimate ability of a claimant to recover. This is because a fundamental premise of the plan is that sufficient funds will be available to satisfy all claims and that emergency payments will be sufficient to meet claimants' immediate needs. Several considerations, however, suggest modifications to a strict first-in, first-out approach.

      Unlike mass torts involving Agent Orange, the Dalkon Shield, and asbestos, a major nuclear accident will cause a great deal of immediate loss that will need to be compensated as quickly as possible. Evacuation from contaminated areas will cause large-scale social and economic dislocation. In these respects, the immediate consequences of a nuclear accident will more closely resemble the aftermath of natural disasters, such as hurricanes or earthquakes. The Commission assumes that, as in the case of natural disasters, the efforts of the various federal, state, and local emergency response organizations will be directed to caring for the immediate needs of accident victims. Private organizations such as the American Red Cross and Salvation Army will undoubtedly participate as well.

      Additionally, the Act provides for the immediate distribution of funds for the emergency needs of victims.68 As occurred at Three Mile Island, it is anticipated that emergency distributions — which the statute treats as advances against final recoveries — will be handled by the nuclear insurers, and will be available within a very short time after an accident. Since the Act permits the distribution of up to 15 percent of the liability limit without court approval,69 it would seem that at least $1 billion could be distributed in this manner. Although the amount far exceeds the $200 million provided by private insurers, it is slightly less than the potential maximum first-year contributions owed by nuclear licensees to the retrospective insurance pool. In addition, the statute provides a mechanism whereby the entire $7.3 billion provided by the retrospective insurance pool can be promptly advanced out of public funds70 and presumably this mechanism would be invoked. Thus it would seem likely that at least $1 billion should be available relatively quickly to meet the emergency financial requirements of victims, and that the immediate needs of nuclear accident victims will be met as much as possible through the emergency distribution scheme.

      As the formal claim resolution process gets under way, the enormous number of claims that will have been filed in a short period of time will inevitably create delays. Although most urgent needs will have been met to at least some degree by the emergency distribution plan, there may be claimants who, because of the type of claim, the amount sought or for other reasons, did not receive adequate emergency compensation. For claims such as these, a strict ordering approach would work unfairly. Thus the Commission recommends that a “hardship” exception be created that would permit certain claims to receive a higher priority in the claim resolution process.

      The hardship exception should not be limited to claims arising from personal injury, but should also operate for property damage and business loss claims and for claims of governmental entities. The dislocations following a nuclear accident will create significant economic difficulties, and claims of pecuniary loss will often be complex and less easily treated under emergency distribution procedures. Additionally, while governmental claims could ordinarily be expected to be deferrable until after other claims are resolved, them may be situations where limited funds could impair the functioning of a governmental service and raise the possibility of exacerbating the effects of the accident on the individual victims (e.g., the radioactive contamination of a municipal water supply and the resulting need for the municipality to procure water from alternative sources).

      A final issue of priority involves the emergency distributions to be made by the nuclear insurance pools. The Commission recommends that, even for accidents that have not yet exceeded the first layer of insurance ($200 million) but which, in the view of the nuclear insurance pools, are expected to exceed this amount, the Pools limit payments to those associated with actual or precautionary evacuations until the court can assume supervisory control of distribution of funds. This would provide assurance that immediate needs will be compensated first and preserve for the court the flexibility to plan, establish priorities, and provide for all claims.

      B.   Form and Extent of Payment.

      Recommendation: Compensable pecuniary losses should be paid on a dollar-for-dollar basis and other compensable losses should be paid according to a schedule, as previously recommended. Awards would ordinarily be made on a lump-sum basis, but claimants should be permitted the choice of receiving either a lump-sum, discounted to present value where future injury is a component of the loss, or an annuity that would provide a continuing series of periodic payments.

      Claims for future earnings or support, continuing medical care, and similar items represent losses that have not yet occurred. Awards for such losses can be — and generally are — reduced to a lump sum figure in present dollars and paid in the entirety. The defendant's responsibilities to the plaintiff are complete, and the plaintiff receives a significant sum that can be immediately used for substantial benefits. An alternative approach, however, would structure compensation as an ongoing stream of periodic payments that would continue to compensate as loss is incurred. A payment scheme of this type offers certain advantages .71 It would guarantee the beneficiary a continuing source of support that would operate to compensate into the future as loss occurs. Furthermore, if payment levels could be adjusted to reflect inflationary changes as well as changes in the needs and circumstances of the beneficiary, compensation would more accurately reflect loss. This would benefit severely disabled plaintiffs who, because of the uncertainties of predicting the long-term consequences of injury, often end up being significantly undercompensated by lump-sum awards.72 A long term payout would seem advantageous to the payor as well, because it avoids the necessity of large and immediate cash distributions.73 The Commission recommends, however, that, except perhaps for minors, where it may be appropriate to provide an annuity with a possible lump-sum payout at the age of majority, the choice of lump sum or annuity be one left solely to the claimant.

      The Commission does not recommend that prejudgment interest be available as part of the compensation program. First, if prejudgment interest were available in a trial context, this could act as an incentive to refuse administrative settlements and pursue claims to the courts. Second, and more importantly, emergency payments under the proposed system should assure timely relief, and thus there is no need to provide a device that has typically been employed when claimants are forced to wait prolonged periods for compensation.

      Finally, the Commission can foresee the possibility of a situation where awards of compensation could outpace the accumulation of funds. It believes that it is reasonable for any compensation system to provide for partial payment of claims on a periodic basis until possible cash flow problems are overcome. In view of the statutory provisions already in place in the Act, however, the Commission would expect such cash flow problems to be infrequent.

  8. Claim Priority Plan Under the Existing Act
    • Many of the Commission's claim priority recommendations would require enactment by Congress in order to be fully implemented following a major nuclear accident. Nonetheless, under the Act in its present form, the considerations and concerns that have guided the Commission in formulating its recommendations can similarly inform the insurance pools in paying emergency funds from their $200 million in reserves and guide the claim priority criteria of a court in the claim resolution process. Because, under the Act as it now stands, state law would supply the rule of decision, a court would not have the power to refuse to recognize otherwise legally sufficient claims such as the fun panoply of damages under the general categories of emotional distress and pain and suffering, nor could it generally impose limits on the extent of recovery. The current statute, however, permits the court substantial equitable power to assign priorities of payment to various categories of claims and to allocate the payment of available funds accordingly.74

      The Commission recommends that nuclear insurance pools (operating prior to court control) and the court, exercising its equitable power, rank claims in the order of payment given below. The Commission assumes that the nuclear insurance pools will employ claim practices that are traditionally relied upon following natural disasters. Note again that the Commission recommends in all cases that the overriding criteria of any prioritization system be that immediate needs, regardless of category, come first.

      A.   Claim Priority.

      1. Claims in the first priority class should be the direct pecuniary losses of individuals and businesses. These would include such claims as medical expenses, loss of property, business losses, lost wages, costs of food, shelter, and other necessities in connection with evacuation or relocation, and other similar economic losses. Claims for essential governmental and public services restoration should also be included. Legal costs, including attorneys' fees, should also be included in the first priority class, but claims for attorneys' fees should be rigorously scrutinized and subject to downward adjustment according to the criteria currently provided by the statute. The costs of medical monitoring and emotional distress counseling programs should also be a part of the first payment tier.

      2. Claims in the second priority class should be those for pain and suffering and for wrongful death.

      3. Claims in the third priority class should be those for the economic losses of states and municipalities, including damage to natural resources.

      4. Claims in the fourth priority class should be those for the economic losses of the federal government including damage to natural resources.

      5. Claims in the fifth priority class should be those for all other compensable, intangible losses of a compensatory nature beyond those specified in the first and second priority classes.

      6. Claims in the sixth priority class should be those for the utility's offsite losses other than the restoration of essential public services.75

      7. The last claims to be compensated should be those for punitive damages. Moreover, to the extent permitted by the state's law, these claims should be consolidated and tried in a single proceeding in order to allow a final one-time assessment.


    Footnotes

    1. Atomic Energy Act of 1954, as amended, 170(l)(3)(B) [hereinafter Act), 42 U.S.C. 2210(1)(3)(B).

    2. Act 170(m), 42 U.S.C. 2210(m).

    3. The tort system can also be viewed as functioning in the areas of information disclosure and citizen empowerment. See Pamela Gilbert, Legislative Director. Public Citizen's Congress Watch, Meeting Transcript. Jan. 11, 1990. pp. 218-223.

    4. The NRC administers a complex and comprehensive system of binding rules and regulations that control every aspect of the construction and operation of nuclear power plants. See 10 Code of Federal Regulations, Chapter 1. See also U.S. Nuclear Regulatory Commission. The Price-Anderson Act - The Third Decade NUREG-0957 (1983). p. II-1 (hereinafter The Third Decade Report.)

    5. See, e.g., Act 186.42 U.S.C. 2236 (revocation of license); Act 222, 42 U.S.C. 2272 (fine up to $10,000 and 10 years imprisonment for certain enumerated violations of the Act), Act 223, 42 U.S.C. 2273 (fine up to $25,000 per day for a continuing violation and up to 2 years imprisonment) and Act, 234, 42 U.S.C. 2282 (civil penalties up to $100,000 per day for a continuing violation). See also the civil penalties, enacted as part of the 1988 amendments to the Act. which may be assessed against DOE contractors. Act, 234A, 42 U.S.C. 2282a (civil fine up to $100,000 per day for a continuing violation). The Commission learned that the NRC has imposed changes of management where plants have run into severe regulatory problems with the agency. “Loss of one's career would seem to be a fairly significant deterrent; a much more significant deterrent than an economic penalty directed against the pocketbook of the company.” See Jay Silberg, Attorney, Shaw, Pittman, Fox and Trowbridge, Meeting Transcript, March 15. 1990, P. 357.

    6. The financial repercussions of the accident at Three Mile Island on the ability of the owner to avoid bankruptcy and to complete the cleanup of the damaged reactor were of major concern for years after the accident. See NRC, Potential Impact of Licensee Default on Cleanup of TMI-2, NUREG-0689 (1980). Nuclear power plans represent major assets for their owners. The Catawba Nuclear Station, which began operations in 1985. cost $3.5 billion. while the Seabrook nuclear plant. which received its operating license March 1. 1990, is reported to have cost $6.5 billion.

    7. Taxpayers also might well end up footing the bill for punitive damage awards should the federal government be the source of funds for payment of claims in excess of present liability limitations. The statutory provision that bars payment of punitive damages by the United States applies only when payment is pursuant to an agreement of indemnification. Act 170(s), 42 U.S.C. 2210(s). It is unclear whether the current Act permits recovery of punitive damages when the award would be paid using nongovernment funds, although there is authority from which it can be argued that such an award would not be prohibited. See infra, n. 67.

    8. The Supreme Court relied upon this theory in upholding workers' compensation plans. See New York Central Railroad v. White. 243 U.S. 188 (1917). Speaking of workers' compensation law, the court said: “If the employee is no longer able to recover as much as before in case of being injured through the employer's negligence, he is entitled to moderate compensation in all cases of injury, and has a certain and speedy remedy without the difficulty and expense of establishing negligence or proving the amount of the damages.” 243 U.S. at 201.

    9. Congress has established a federal compensation system for miners who have contracted pneumonoconiosis (“black lung disease”) in the course of their employment. See Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. 901-941, 951, 958, as amended by The Black Lung Benefits Act of 1972. The Black Lung Benefits Reform Act of 1977, and The Black Lung Benefits Revenue Act of 1977. Before the statute was amended in 1977, costs to the federal government had risen to over $1 billion per year, far beyond original estimates and its 1970 cost of $110 million. See Taubman, “Compensating Victims of Toxic Substances Pollution: An Analysis of Existing Federal Statutes,” 5 Harv. Envtl. L. Rev. 1, 24-25 (1981); Abraham, “The Insurance Implications of Administrative Compensation Schemes,” 25 Hous. L. Rev. 817, 819 (1988).

      Congressional experience with the black lung program has been widely cited as the source of congressional reluctance to compensate victims of atomic testing. Ball, Justice Dowmvind (1986), pp. 173-174 and sources cited therein.

      While this congressional reluctance was ultimately overcome and the Radiation-Exposed Veterans Compensation Act of 1988 (P.L. 100-321) became law, as indicated in Chapter 4. the enactment of the legislation was motivated, in the President's view, to give “due recognition for the unusual service rendered by Americans who participated in military activities involving exposure to radiation generated by the detonation of atomic explosions.”

    10. The General Accounting Office in 1987 reported estimates of the offsite financial consequences of a major nuclear accident for all 119 nuclear power plants then operating or under active construction. The estimates ranged from a low of $67 million for the Big Rock facility to a high of $15.536 billion for the Indian Point 3 facility. These figures include damages for personal injury and death, and pecuniary losses, such as lost wages. relocation expenses of the evacuated population, decontamination costs, lost public and private property costs, and land and farm crop values. Not included are costs associated with investigating, defending, and sealing liability claims, or economic losses indirectly associated with the accident, such as lost production, jobs, or wages for vendors or suppliers located outside the area directly affected by the accident. See General Accounting Office, Nuclear Regulation, A Perspective on Liability Protection for a Nuclear Plant Accident, GAO/RCED-87-124 (1987), p. 20 and Appendix II [hereinafter Perspective on Liability]. The minimum near-term costs of the May 1986 nuclear accident at Chernobyl have been estimated to be in the neighborhood of $15 billion, including onsite costs of $6.4 billion, with long-term costs of 5 to 10 times this amount Dr. Marvin Goldman, University of California, Davis, Meeting Transcript, Oct. 25, 1989, p. 29. On April 25, 1990, the Supreme Soviet approved $26 billion of additional aid. Barringer. “Four Years Later, Kremlin Speaks Candidly of Chernobyl's Horrors,” The New York Times, April 28, 1990.

      In Appendix B. Commission member Dr. Norman Rasmussen estimates that the probability of a catastrophic nuclear accident occurring in this country is once in 3,000,000 reactor years.

    11. Act 11(hh), 42 U.S.C. 2014(hh).

    12. Compare, e.g., Benneff v. Mallinckrodt, Inc., 698 S.W.2d 854 (Mo. Ct. App. 1985), cert. denied, 476 U.S. 1176 (1986) (Missouri law permits the recovery in strict liability — although not in this case in negligence — of damages for “psychic trauma” caused by exposure to radioactive material) with Westrom v. Kerr-McGee Chemical Corp., No. 82 C 2034 (N.D.Ill. October 4, 1983) (LEXIS, Genfed library, Dist file) (no recovery allowed under Illinois law for emotional distress caused by radiation exposure absent physical injury or illness).

    13. Should state law be retained as the rule of decision, through congressional inaction or for other reasons, the Commission's prioritizing criteria can nevertheless be a useful guide to a court in establishing priorities for payment of claims arising out of a nuclear accident. See infra, Section V.

    14. As noted previously. the Commission recommends that emergency payments by the nuclear insurance pools from the first level of Price-Anderson coverage, and indeed all payments distributed before the court is able to approve a payment plan, be governed by the claimants' immediacy of need (e.g., costs of temporary housing and lost wages).

    15. The Act provides that states and municipalities may recover costs incurred “in the course of responding to a nuclear incident or a precautionary evacuation.” Act 11(w), 42 U.S.C. 2014(w).

    16. This was the experience encountered in the administration of the Economic Loss Fund established in settlement of business loss claims arising from the Three Mile Island nuclear incident. Daniel Berger. Attorney, Berger, Montague, Meeting Transcript, Jan. 11, 1990, p. 209.

    17. For instance, income producing real property can be valued according to replacement cost, depreciated value, income stream, or sale prices of comparable properties.

    18. Act 170(n), 42. U.S.C. 2210(n). Appendix C provides a list of the defenses that are waived by defendants in actions governed by the Act

    19. Ibid

    20. Such claim were brought following the Three Mile Island nuclear incident. They were ultimately dismissed on the grounds that under Pennsylvania law “economic losses may not be recovered in tort absent any physical injury or property damage.” General Public Utilities v. Glass Kitchens of Lancaster et al., 374 Pa. Super. 203, 542 A.2d 567 (Pa. Super. Ct. 1988). The court was clearly concerned about problems of foreseeability and unlimited liability, 542 A.2d at 570.

    21. Although the requirement that a claimant must suffer some physical impact in order to recover for emotional distress has been generally repudiated, the majority rule requires that the emotional distress must give rise to physical injury or illness. See Dobbs, Keeton and Owen. Prosser and Keeton on Torts (5th ed.), p. 364 [hereinafter Prosser]; compare cases cited infra, n. 42. The Commission recommends that funded programs of psychological counseling be provided to those claimants in need of it.

    22. Most states would deny recovery for this type of interference with contractual relations in the absence of physical injury or property damage to the claimant personally. See Prosser, p. 997. But see, J'Aire Corp. v. Gregory, 24 Cal. 3d 799, 598 P.2d 60, 157 Cal. Rptr. 407 (Cal. 1979) (permitting recovery under a six factor test for “negligent interface with prospective economic advantage.”)

    23. In testimony before the Commission, Kenneth Adams, a plaintiffs' attorney in the Exxon Valdez litigation, cited an example of a business in Chicago that supplied herring boxes for Alaska fish processors. Because the oil spill shut down the herring fishery, the box maker. though far removed from the site of the spill, experienced lost profits. See Kenneth Adams, Attorney. Dickstein. Shapiro and Morin, Meeting Transcript. March 15,1990, p. 378.

    24. See Prosser, Chapters 7 and 9; a seminal case treating these issues is PaIsgraf v. Long Island R.R. Co., 248 N.Y. 339.162 N.E. 99(1928).

    25. See infra, n. 42.

    26. Act 170(m), 42. U.S.C. 2210(m); Act 170(w). 42. U.S.C. 2014(w).

    27. The National Research Council's Committee on the Biological Effects of Ionizing Radiation has recently released a comprehensive report on the health effects of exposure to low levels of ionizing radiation. See Committee on the Biological Effects of Ionizing Radiations, Health Effects of Exposure to Low Levels of Ionizing Radiation — BEIR V (Washington, DC: National Academy Press, 1990). The BEIR reports are the nation's most authoritative assessment of risks associated with radiation exposure, and previous BEIR reports have been used by federal agencies to set regulatory standards. Nonetheless, substantial uncertainties remain. as the Report itself acknowledged. Ibid., pp. 7-8.

    28. Many of the symptoms of high-level radiation exposure are also produced as the result of severe anxiety and stress in what has been termed “general adaption syndrome.” An NRC telephone survey of residents in the Three Mile Island area following the nuclear incident recorded frequent complaints of loss of appetite, difficulty in sleeping, irritability, and anger. A small percentage of the population also suffered from various physiological symptoms such as rash. headache, stomach trouble, diarrhea, and cramps. However, because of the extremely low-level release that occurred at Three Mile Island, it is clear that the symptoms experienced by area residents were not related to actual exposure. See The Third Decade Report, p. D-3.

    29. Several local municipalities sought recovery for alleged loss of tax revenues following the Three Mile Island nuclear incident. The claims were dismissed on the basis of uncontested defense affidavits that tax revenues had increased since the accident. In re TMI Litigation Governmental Entities Claims, 544 F. Supp. 853 (M.D.Pa. 1982), aff'd. sub nom., Pennsylvania v. General Public Utilities Corp., 710 F.2d 117 (3d Cir. 1983).

    30. The fiscal benefits provided by operators of nuclear power plants do not necessarily go to all of the plants' neighbors. See Melvin Peters, member of the public. Meeting Transcript March 15, 1990, p. 367.

    31. See, e.g., Bovbjerg, Sloan and Blumstein, “Valuing Life and Limb in Tort: Scheduling 'Pain and Suffering',” 83 Nw. Univ. L. Rev. 908, 909-917 (1989) [hereinafter “Valuing Life and Limb”].

    32. Ibid., P. 936.

    33. Act 170(o), 42 U.S.C. 2210(o). See infra, Part III, D.

    34. Act 170(n), 42 U.S.C. 2210(n).

    35. See New York Central Railroad v. White, 243 U.S. 188 (1917).

    36. See, e.g., Mass. Gen. Laws Ann. ch. 229 2 (West 1988) (permitting recovery for “services, protection, care, assistance, society, companionship, comfort, guidance, counsel and advice.”). See also Prosser, pp. 951-53 and cases cited therein.

    37. The National Childhood Vaccine Injury Act of 1986.42 U.S.C. 300aa-15(a)(2), effective Oct. 1. 1988, provides an award of $250,000 to the estate of a person whose death is vaccine-related.

    38. The $250,000 wrongful death award provided by the National Childhood Vaccine Injury Act of 1986 is a uniform amount for all deaths. See supra, n. 37. No additional recovery for pain and suffering or loss of earnings is permitted for deaths compensated under the Act. See Sheehan v. Dept. of Health and Human Services, 19 Cl. Ct. 320 (1990).

      The Agent Orange Veteran Payment Program similarly pays a uniform scheduled amount for all deaths. See Berman, “The Agent Orange Veteran Payment Program.” paper presented before the Conference an Mass Settlement of Mass Torts, Duke University School of Law, 1989 [hereinafter “Agent Orange”].

    39. At least one federal tort compensation plan provides recovery for pain and suffering incurred in connection with specific physical injuries. See The National Childhood Vaccine Injury Act of 1986, 42 U.S.C. I 300aa-15(a)(4) (permitting an award of up to $250,000 for pain and suffering and emotional distress from vaccine-related injury).

      A similar treatment of pain and suffering damages was an element of a proposed, but never enacted, nofault scheme for the compensation of commercial aviation accident victims. Under the plan, pain and suffering awards would have been limited to cases of “permanent disfigurement or disability.” See Kennedy, “Accidents in Commercial Air Transportation,” 41 J. of Air Law & Comm. 247 (1975).

    40. These and similar methods of scheduling pain and suffering awards are addressed generally in Bovbjerg, Sloan and Blumstein, “Valuing Life and Limb,” supra, n. 31.

    41. Injury profiles could be derived from sources such as the detailed schedule of physical impairments produced by the American Medical Association (AMA). See Stone, The Disabled State (Philadelphia: Temple University Press, 1984), pp. 107-117 (describing and evaluating the AMA schedule). Dollar values could be fixed by reference to the average amounts awarded in the past by juries in the district.

      A similar use of matrices for the scheduling of pain and suffering awards linked to severity of injury has been proposed in Bovbjerg, Sloan and Blumstein. “Valuing Life and Limb.” p.953.

    42. See, e.g., Silkwood v. Kerr-McGee Corp., 667 F.2d 908 (10th Cir. 1981), rev'd on other grounds, 464 U.S. 615 (1984) (applying Oklahoma law); Bennett v. Mallinckrodt, Inc., 698 S.W.2d 854 (Mo. Ct. App. 1985), cert. denied, 476 U.S. 1176 (1986) (Missouri law); and Westrom v. Kerr-McGee Chemical Corp., No. 82 C 2034 (N.D.Ill. October 4, 1983) (LEXIS, Genfed library, Dist file) (Illinois law). The general rule bars recovery unless there is present injury or at least damage that is reasonably certain to occur.

      At least one court, however. has recognized a claim predicated on increased risk of cancer as the result of exposure to radiation. See Brafford v. Susquehanna Corp. 586 F.Supp. 14 (D.C.Colo. 1984). Claimants alleged present physical harm to their cellular and subcellular structures as the result of radiation exposure, causing permanent and irreparable genetic and chromosomal damage.

      The increased risk of future disease has also been recognized, to the extent that the claim would support recovery for medical monitoring, in several cases involving exposure to toxic wastes. See infra, nn. 44-46 and accompanying text. These cases are the exception, however, to the general rule that denies recovery.

    43. Consider in this regard the results of the 1989 summary jury trial that was employed during settlement negotiations involving radiation exposure claims brought by residents surrounding the nuclear weapons plant in Fernald, Ohio. The jury rendered a non-binding verdict finding no damages for emotional distress or diminution of property values. The relatively low sum of $1 million was recommended for nuisance. but the jury further recommended $55 million for punitive damages and $80 million to establish a medical monitoring and scientific risk assessment program.

      According to participants, the jury believed that although no present injury existed, there was a possibility of future injury and, thus, fairness required that defendants, as the culpable parties, bear the costs of assessing potential long term health consequences. Henry Gill, Esq., Deputy General Counsel. Department of Energy, Meeting Transcript. Jan. 11, 1990, p. 245.

    44. A detailed description of the litigation and settlement terms appears in McGovern. “DDT Settlement Fund.” paper presented before the Conference on Mass Settlement of Mass Torts. Duke University School of Law, 1989.

    45. See Feinberg, “The Dalkon Shield Claimants Trust Claims Resolution Facility.” paper presented before the Conference on Mass Settlement of Mass Torts, Duke University School of Law, 1989, for a history of the litigation and a description of the claim resolution process. See also In re A. H. Robbins Co., No. 85-01307-R (Bankr.E.D. Va.). Sixth Amended and Restated Disclosure Statement (March 28,1985).

    46. It is estimated that physical injury and death will represent only 10 percent of all damages caused by a major nuclear accident. See General Accounting Office, Perspective on Liability, p. 20.

    47. See Cross, Environntentally Induced Cancer and the Law (Westport, CT: Greenwood Press, 1989), pp. 208-213, for a proposal that recommends an insurance plan of this type.

    48. Gill, Meeting Transcript, Jan. 11, 1990, p. 246. See further Mr. Gill's remarks supra, n. 43.

    49. Ayers v. Jackson Township, 106 N.J. 557, 525 A.2d 287 (1987). Plaintiffs had shown a “significant” but unquantified risk of serious disease. The court upheld the award of medical monitoring on policy grounds involving concerns for public health and safety.

    50. HALT v. City of York, No. 84-S-3820 (C.P.York County, Pa. November 29,1985), as described in Gara, “Medical Surveillance Damages: Using Common Sense and the Common Law to Mitigate the Dangers Posed by Environmental Hazard ” 12 Harv. Envtl. L. Rev. 265, 284-285 (1988) [hereinafter “Medical Surveillance Damages”].

    51. Gara, “Medial Surveillance Damages,” supra, n. 50, pp. 285-286, and cases cited therein.

      Arguably, however, a claimant in such circumstances does suffer present injury in that there has been an exposure to toxic substances that requires the present expenditure of funds to protect future health

    52. Medical monitoring would involve the registration of all those exposed to at least a minimum threshold dose of radioactivity. A small stipend and travel allowance, comparable to what is paid in the federal district courts for jury duty, could be paid to ensure and facilitate participation.

      Registration would include a blood sample taken to help estimate dose received. While most of the samples would be stared for analysis at a later date if the claimant develops cancer, there should be, for those who request it, an opportunity to have the blood sample analyzed immediately and a dose estimation provided. The registration would be followed by the periodic examination and testing of those individuals who may have received significant doses, as recommended by a court-appointed science panel.

    53. Act 170(o)(1), 42 U.S.C. 2210(o)(1).

    54. Act 11(k), 42 U.S.C. 2014 (k). (The term “financial protection” means the ability to respond in damages for public liability and to meet the costs of investigating and defending claims and sealing suits for such damages.)

    55. Act 170(o)(1) and (o)(2), 42 U.S.C. 2210(o)(l)(D) and (o)(2).

    56. Act 170(o)(2), 42 U.S.C. 2210(o)(2).

    57. See In re Agent Orange Product Liab. Litig.. 611 F.Supp. 1296, 1310 (E.D.N.Y. 1985). aff'd in part and rev'd in part, 818 F.2d 226 (2d Cir. 1987). cert. denied sub nom., Schwartz v. Dean, 108 S.Ct. 289 (1987) (comparing compensation on a contingent basis with compensation at an hourly rate).

    58. Act I 170(o)(2), 42 U.S.C. 2210(o)(2).

    59. McDowell, “The Collateral Source Rule - The American Medical Association and Tort Reform,” 24 Washburn L.J. 205, 215 (1985) (discussing opposition to the collateral source rule by numbers of the medical profession and their insurers); O'Kane, “The Collateral Source Rule,” presented before the FICC Annual Meeting. 1988, p. 3 [hereinafter “Collateral Source Rule”] (same).

    60. See O'Kane, “Collateral Source Rule,” pp.3-6. O'Kane does not include Kentucky, which has also abrogated the collateral source rule. Ky. Rev. Stat. Ann. 411.188(3) (Baldwin 1988).

    61. The Teton Dam Damages Act of 1976, Public Law 94-100 (91 Stat. 1211). Section 3(b), requires the Secretary of the Interior to reduce any award under the Act by the total amount of insurance benefits (other than life insurance benefits), or other payments or settlements of any nature, previously paid with respect to death claims, personal injury, or property loss. See also the National Childhood Vaccine Injury Act of 1986.42 U.S.C. 300 99-15(g).

    62. Where nuclear accidents are concemed, collateral source issues arise only with respect to personal injury and death. This is because property casualty insurance policies almost always specifically exclude any recovery under the policy for damage caused by a nuclear accident.

    63. See Branton, “The Collateral Source Rule,” 18 St. Mary's L.J. 883, 885 (1981).

    64. The Commission was in agreement, however, that even though strong arguments exist for the abolition of the collateral source rule with regard to personal injury and disability insurance, significant additional considerations support the view that the collateral source rule should not be disregarded with respect to life insurance proceeds.

    65. Some commentators have suggested that punitive damages can also be regarded as compensation for “dignitary” losses that are sustained when a plaintiff has been wronged by malicious, outrageous, or vindictive conduct. See, e.g.. Chapman and Trebilcock, “Punitive Damages: Divergence in Search of a Rationale,” 40 Ala. L. Rev. 741. 768-69 (1989).

    66. Act 170(s), 42 U.S.C. 2210(s).

    67. In an action brought under state law, the Supreme Court upheld a claim of punitive damages for exposure to radioactive material, ruling that the claim was not preempted by the Act. Silkwood v. Kerr-McGee Corp.. 464 U.S. 238 (1983). A claim for punitive damages under the Act survived a motion for summary judgment and was later settled in connection with the Three Mile Island nuclear incident. In re ThreeMile Island-Litigation, 605 F.Supp. 778 M.D.Pa 1985).

    68. Act 170(m). 42 U.S.C. I 2210(m).

    69. Act 170(o). 42 U.S.C. I 2210(o).

    70. Act I 170(b)(4)(A), 42 U.S.C. 2210(b)(4)(A).

    71. See Marianna Smith, Executive Director, Manville Trust, Meeting Transcript, Oct 25, 1989, pp. 86-87.

    72. Gilbert, Meeting Transcript, Jan. 11. 1990, pp. 251-252.

    73. An extended payment scheme was adopted in the Agent Orange Payment Program to preserve the solvency of a limited fund for an unknown number of future claimants, with awards to be distributed over 10 years in equal annual installments. See Berman, “Agent Orange.”

    74. Act 170(o)(1)(C), 42 U.S.C. 2210(o)(1)(C). The legislative history of the 1975 amendments to the Act suggests a possible ordering for the payment of claims. The Joint Committee on Atomic Energy wrote that “claims for actual losses to property. for actual and reasonable medical expenses, for loss of wages, and other such losses may merit higher priority than such claims as those for alleged pain and suffering, emotional harm and loss of consortium.... The court is authorized to establish such additional priorities as are deemed desirable and equitable to further the principles described above.” Senate Joint Committee on Atomic Energy, Amendments to the Price-Anderson Provisions of the Atomic Energy Act of I954, as Amended, to Provide for the Phaseout of Governmental Indemnity, and Related Matters, S. Rep. 94-454, 94th Cong.. 1st sess., 1975, pp. 14-15 [hereinafter S. Rep. 94-454]. The claim ordering plan suggested here by the Commission is consistent with these congressional recommendations.

    75. The recommendation that the utility's offsite losses be accorded a lower priority is consistent with the suggestion of the Joint Committee on Atomic Energy in the legislative history to accompany the 1975 amendments to the Act. See Senate Joint Committee on Atomic Energy, S. Rep. 94-454.


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