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GENERAL PUB. UTILS. CORP. JERSEY CENT. POWER & LIG

November 24, 1982

GENERAL PUBLIC UTILITIES CORPORATION, JERSEY CENTRAL POWER & LIGHT COMPANY, METROPOLITAN EDISON COMPANY, PENNSYLVANIA ELECTRIC COMPANY
v.
UNITED STATES OF AMERICA



The opinion of the court was delivered by: TROUTMAN

 TROUTMAN, J.

 Background

 In the early morning hours of March 28, 1979, a turbine generator at plaintiffs' *fn1" Three Mile Island Unit 2 nuclear facility (TMI), designed by Babcock & Wilcox (B&W), experienced a shutdown "trip" due to a loss of feedwater. Subsequently, a rapid heat buildup raised the pressure in the reactor coolant system and caused a pilot-operated relief value to open, thereby relieving excess pressure. Shortly thereafter, the reactor shut down and pressure in its coolant system dropped to within the normal range; the pilot-operated relief valve should have closed. It failed to do so. Worse, the instrumentation designed to indicate the true position of the relief valve also failed; it incorrectly indicated that the valve was closed when, in fact, it was open.

 Thereafter, a "loss-of-coolant accident" occurred; significant quantities of coolant water and steam were lost through the malfunctioning valve. As a result thereof, pressure in the reactor coolant system continued to drop and coolant water and steam escaped. Within a few minutes of the original "trip", the engineered safety system began high-pressure injection of water into the reactor coolant system.

 Continued monitoring by plant operators incorrectly lead them to believe that the facility was "going solid"; i.e., that the pressurizer was dangerously close to filling with water. Following B&W generated and Nuclear Regulatory Commission (NRC) approved procedures, and attempting to guard against this eventuality, TMI operators reduced the high pressure injection of water into the coolant system and initiated maximum let-down of coolant. The reduction of high-pressure coolant injection exasperated the developing problem; i.e., coolant which escaped through the malfunctioning valve was not replaced.

 Within one or two hours of the original "trip", TMI operators, again acting pursuant to B&W established and NRC approved procedures, shut down the plant's four reactor coolant pumps which normally circulate coolant through the reactor vessel. Once this occurred, the reactor vessel was deprived of the coolant water and steam which had previously circulated through it, the nuclear core began to uncover and it, along with the protective cladding, was severely damaged. Radioactive material from the damaged core spread throughout the building and adjacent structures. As a result, the public was exposed to catastrophic dangers. The resulting damage to plaintiffs is allegedly in excess of four billion dollars.

 The complaint further alleges that eighteen months earlier, on September 24, 1977, a "loss-of-coolant" accident occurred at the Davis-Besse nuclear power plant designed by B&W and operated by Toledo Edison Company. Importantly, the accident at Davis-Besse closely paralleled the events which later occurred at TMI. The ultimate consequences of terminating high pressure injection at Davis-Besse were, however, severely mitigated by the fact that the Ohio plant was only operating at 9% capacity at the time of its accident. TMI, by contrast, was operating at 97% capacity.

 Plaintiffs assert that the NRC failed to properly disseminate information to them regarding the cause of the Davis-Besse accident and also the corrective measures subsequently developed to prevent similar accidents. Moreover, plaintiffs complain that the NRC negligently approved the TMI construction plans, containing the faulty pilot-operated relief valve at a time when it knew, or should have known, that the valve could stick and cause a "loss-of-coolant" accident.

 The two-count complaint seeks recompense in Count I for the purported failure of defendant, United States, acting through its agent, the NRC to properly warn and advise plaintiffs of existing hazards and defects in their plant. Count II inveighs against the NRC's purported negligent approval of B&W's emergency procedures. Specifically, the complaint asserts three grounds for relief: breach of the Good Samaritan duty, *fn2" negligence, and negligence per se.

  Jurisdiction is predicated upon the Federal Tort Claims Act, 28 U.S.C. § 1346(b) *fn3" (FTCA), which generally imposes governmental liability, inter alia, "under circumstances where the United States, if a private person, would be liable". Resolution of the Government's motion to dismiss *fn4" requires construction of two important exceptions to the general abrogation of sovereign immunity contained in the FTCA. The "misrepresentation exception", 28 U.S.C. § 2680(h), prevents the imposition of governmental liability on any claim arising out of, inter alia, a "misrepresentation". The "discretionary function" exemption, 28 U.S.C. § 2680(a), shields governmental conduct from liability where the claim is grounded in "the failure to exercise or perform a discretionary function or duty". It applies even where there is an abuse of discretion. Dalehite v. United States, 346 U.S. 15, 33-36, 97 L. Ed. 1427, 73 S. Ct. 956 (1955).

 The Government's Duty

 Plaintiffs asseverate that the NRC breached its duty to warn of design hazards when it failed to employ either of the two primary methods which it uses to provide licensees with safety information. The first is the issuance of an "IE Bulletin". When the NRC determines that a specified event may have "generic" applicability, it issues an IE Bulletin in order to "achieve appropriate precautionary or corrective action" by nuclear licensees and operators. 10 CFR § 1.64. The NRC also requires that all IE Bulletins be responded to so that it, the NRC, may "assess [] the situation". See, U.S. Nuclear Regulatory Commission, Office of Inspection and Enforcement, Inspection and Enforcement Manual (Manual), Chapter 1100, MC 1125-031. The second mode of NRC licensee notification is the distribution of "Circulars". These are designed simply to "inform the licensee or permit holder" of issues regarding "safety, safeguards, or environmental interest". Id. at MC1125-032. Importantly, Circulars do not require a licensee's response to the NRC; they generally signify a lesser degree of "danger" than does an IE Bulletin.

 The final information gathering and dissemination function which the NRC performs is the compilation and submission of "abnormal occurrence" reports to the Congress. An "abnormal occurrence" is defined as, inter alia, a "major deficiency in design, construction, use of, or management" of a licensed nuclear facility. See, Energy Reorganization Act of 1974, (Energy Act) § 208, 42 U.S.C. § 5848. Importantly, plaintiff asserts that it is among the intended beneficiaries of the NRC's statutory obligation.

 In any event, after the Davis-Besse accident, the NRC neither distributed an IE Bulletin, Circular, nor issued an abnormal occurrence report to the Congress. (Plaintiffs do not, however, contest defendants' assertion that they received a Licensee Event Report, issued by the Office of Resource Management, NRC, regarding the Davis-Besse accident.) Rather than issue any warning, the Government approved plaintiffs' construction plans; this notwithstanding the fact that they called for inclusion of the faulty pilot-operated relief valve. Plaintiffs contend that their license issuance, which authorized them to operate an incorrectly designed plant, and the failure to widely disseminate corrective measures designed after Davis-Besse, violated defendant's duty to monitor the nuclear power industry and to warn licensees of dangerous practices and conditions.

 Before turning to issues raised by the misrepresentation and discretionary function exceptions, the Government argues a very basic tort concept: that the NRC owes no duty to plaintiffs or the nuclear power industry. Defendant asserts that the myriad of regulatory activities and standards promulgated by the NRC simply describe minimal safety standards to which the industry must adhere. Moreover, defendant argues that all of these regulations are designed to and, in fact, inure only to the benefit of the public. An evaluation of the relevant statutes, regulations and legislative history establishes, however, that the relationship between the NRC and the nuclear industry contains elements of symbiosis, which may form the predicate for imposing liability.

 Specifically, the Government's statutory and regulatory obligations imposed by §§ 206 and 208 of the Energy Act, 42 U.S.C. §§ 5846 and 5848, and the regulations promulgated thereunder, create a duty on behalf of the Government to properly and carefully regulate, monitor and warn the nuclear power industry of existing dangers.

 For example, § 206 of the Energy Act, 42 U.S.C. § 5846(a) (2), requires nuclear plant operators to notify the NRC of any plant "defect" which rises to the level of a "substantial safety hazard". Moreover, § 208 of the Energy Act, 42 U.S.C. § 5848, directs the NRC to prepare quarterly Congressional reports listing "abnormal occurrences" at nuclear facilities. ...


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