§ 8.2 - Interpretation of Price-Anderson Act, section 170 of the Atomic Energy Act of 1954.

(a) It is my opinion that an indemnity agreement entered into by the Atomic Energy Commission under the authority of the Atomic Energy Act of 1954 (42 U.S.C. 2011, et seq.), hereafter cited as “the Act,” as amended by Pub. L. 85-256 (the “Price-Anderson Act”) 42 U.S.C. 2210 indemnifies persons indemnified against public liability for bodily injury, sickness, disease or death, or loss of or damage to property, or for loss of use of property caused outside the United States by a nuclear incident occurring within the United States.

(b) Section 170 authorizes the Commission to indemnify against “public liability” as defined in section 11(u) of the Act. 1Coverage under the Act therefore is predicated upon “public liability,” and requires (1) “legal liability” for (2) a “nuclear incident.” Determination of the Act's coverage, therefore, necessitates a finding that these two elements are present.

(c) In the case of damage outside of the United States caused by a nuclear facility based in the United States there would be a “nuclear incident” as defined in section 11(o) since there would be an “occurrence within the United States causing * * * damage.” 2 The “occurrence” would be “within the United States” since “occurrence” is intended by the Act to be “that event at the site of the licensed activity * * * which may cause damage rather than the site where the damage may perhaps be caused.” (S. Rep. 296, 85th Cong., 1st Sess., p. 16 1957) (hereafter cited as Report). In section 11(o) an “occurrence” is that which causes damage. It would be, therefore, an event taking place at the site. This definition of “occurrence” is referred to in the Report at page 22 and is crucial to the Act's placing of venue under section 170(e).3 027 In its definition of “nuclear incident.” The Act makes no limitation upon the place where the damage is received but states only that the “occurrence” must be within the United States.

(d) Similarly, the requirement of “legal liability” would be met. The words of the Act impose no limitation that the liability be one for damage caused in the United States but, on the contrary, are exceedingly broad permitting indemnification for “any legal liability.” In the most exhaustive study of the subject, it is stated that the phrase “any legal liability” indicates that liability for damage outside the United States is covered by the Act. Atomic Industrial Forum, Financial Protection Against Atomic Hazards 61 n. 355 (1957).

(e) Thus the precise language of the Act provides coverage for damage ensuing both within and without the United States arising out of an occurrence within the United States. There would be no occasion for doubt were it not for a single statement contained in the Report of the Joint Committee on Atomic Energy on the Price-Anderson Act. The Report states, at p. 16 that “[i]f there is anything from a nuclear incident at the licensed activity which causes injury abroad, or if there is any activity abroad which causes further injury in the United States the situation will require further investigation at that time.” This sentence follows an explicit and lengthy statement that the “occurrence” is an event at the site of the activity:

Read literally, the last sentence would seem inconsistent with the preceding statement. It is, however, possible to read the sentence as consistent with the preceding statement if it is taken as indicating a recognition by Congress of the fact that the statutory limitation of liability to $500,000,000 would probably not limit claims by foreign residents to that amount in foreign courts and that therefore the persons indemnified were not fully protected against bankrupting claims, one of the primary purposes of the bill. 4

(f) The point in question received scant consideration during the hearings preceding adoption of the bill held by the Joint Committee on Atomic Energy. A summary of the study of the Atomic Industrial Forum, cited above, was introduced into the record of the hearing and included a conclusion that the provisions of the bill seemed to cover the situation. 5That conclusion would seem entitled to more than ordinary weight since the Forum study received the careful consideration of the Joint Committee. 6and the study referenced a statement from the 1956 Report very similar to the confusing statement in the 1957 Report noted above. 7

(g) There was also a rather ambiguous colloquy in the hearings between Representative Cole and Mr. Charles Haugh in which Representative Cole indicated that the Joint Committee

(h) Congress, in enacting the Price-Anderson Indemnity Act added to section 2 of the Atomic Energy Act of 1954, a new subsection which stated, inter alia:

This statutory purpose is frustrated if the atomic energy industry is not protected from bankrupting liabilities for damages caused abroad by an accident occurring in the United States. 9In the Report, the Joint Committee on Atomic Energy made explicit mention of the fact that the private insurance to be provided for reactor operators included coverage for damage in Canada and Mexico and, at another point, noted the Committee's hope that the insurance contract in its final form would cover the same scope as the bill. 10

(i) It is my opinion that since the language of the Act draws no distinction between damage received in the United States and that received abroad, none can properly be drawn. To read the Act as imposing such a limitation in the absence of statutory direction and in the light of an avowed Congressional intention to encourage the development of the atomic energy industry would be unwarranted. The confusing sentence cited in the Report must, therefore, be read consistently with the language of the Act in the manner suggested above, i.e., as recognizing Congressional inability to limit foreign liability, or must be ignored as inconsistent with the broad coverage of the statutory language.