United States Court of Appeals, Third Circuit
In re TMI LITIGATION CASES CONSOLIDATED II.
BRANNON, James T., et al.,
v.
BABCOCK & WILCOX COMPANY, INC., et al., General Public
Utilities Corporation, Metropolitan Edison Company, New
Jersey Central Power & Light Company, Pennsylvania Electric
Company, Babcock & Wilcox Company, McDermott Incorporated,
U.E. & C.-Catalytic, and Burns & Roe Enterprises, Inc.,
Dresser Industries, Appellants in Nos. 90-5312 and 90-5672.
Andrea LEWINTER, Personal Representative of the Estate of
Mark Lewinter;
v.
GENERAL PUBLIC UTILITIES CORP.; Metropolitan Edison
Company; Jersey Central Power & Light Co.; Pennsylvania
Electric Company; Babcock & Wilcox Company; J. Ray
McDermott & Company; Catalytic, Inc.; and Burns & Roe,
Inc., General Public Utilities Corporation, Metropolitan
Edison Company, New Jersey Central Power & Light Company,
Pennsylvania Electric Company, Babcock & Wilcox Company,
McDermott Incorporated, Burns & Roe Enterprises, Inc., and
U.E. & C.-Catalytic, Appellants in No. 90-5313.
Perri C. KIICK; and Edward Kiick, husband and wife
v.
METROPOLITAN EDISON CO.; General Public Utilities Corp.;
and Babcock and Wilcox Company, General Public Utilities
Corp., Metropolitan Edison Company, and Babcock & Wilcox
Company, Appellants in No. 90-5314.
John W. GUMBY, Sr.
v.
GENERAL PUBLIC UTILITIES CORP.; Metropolitan Edison
Company; Jersey Central Power & Light Co.; Pennsylvania
Electric Company; Babcock & Wilcox Company; J. Ray
McDermott & Company; Catalytic, Inc.; Burns & Roe
Enterprises, Inc., General Public Utilities Corporation,
Metropolitan Edison Company, New Jersey Central Power &
Light Company, Pennsylvania Electric Company, Babcock &
Wilcox Company, McDermott Incorporated, Burns & Roe
Enterprises, Inc., and U.E. & C.-Catalytic, Appellants in
No. 90-5315.
Harry MONTVILLE; Virginia Montville, in their own right and
as parents and natural guardians of plaintiff;
Daniel Allen Montville
v.
GENERAL PUBLIC UTILITIES CORP.; Metropolitan Edison
Company; Jersey Central Power & Light Co.; Pennsylvania
Electric Company; Babcock & Wilcox Company; J. Ray
McDermott & Company; Catalytic, Inc.; Burns & Roe
Enterprises, Inc., General Public Utilities Corporation,
Metropolitan Edison Company, New Jersey Central Power &
Light Company, Pennsylvania Electric Company, Babcock &
Wilcox Company, McDermott Incorporated, Burns & Roe
Enterprises, Inc., and U.E. & C.-Catalytic, Appellants in
No. 90-5316.
John B. ROCHE, III; Nancy Elaine Roche; Erin Kathleen
Miller; Timothy Miller; Cathy Daugherty; Kim Daugherty;
Rachel L. Stauffer; Ned E. Grove, individually and as
personal representative of the Estate of Sylvia K. Grove,
deceased; Robert L. Cassell, Sr.; Patricia A. Cassell;
Paul D. Walterick; Linda D. Walterick, individually and on
behalf of their minor child, Paul D. Walterick, Jr.; Paul
M. Walterick; Helen G. Walterick; Jennifer M. Walterick
v.
GENERAL PUBLIC UTILITIES CORP.; U.E. & C. Catalytic
Corporation; Metropolitan Edison Company; Jersey Central
Power & Light Co.; Pennsylvania Electric Company; Babcock
& Wilcox Company; J. Ray McDermott & Company; Burns & Roe,
Inc., General Public Utilities Corporation, Metropolitan
Edison Company, New Jersey Central Power & Light Company,
Pennsylvania Electric Company, Babcock & Wilcox Company,
McDermott Incorporated, Burns & Roe Enterprises, Inc., and
U.E. & C.-Catalytic, Appellants in No. 90-5317.
Margaret KRAFFT
v.
GENERAL PUBLIC UTILITIES CORP.; Metropolitan Edison
Company; Jersey Central Power & Light Co.; Pennsylvania
Electric Company; Babcock & Wilcox Co.; J. Ray McDermott &
Company; Catalytic, Inc.; Burns & Roe Enterprises, Inc.,
General Public Utilities Corporation, Metropolitan Edison
Company, New Jersey Central Power & Light Company,
Pennsylvania Electric Company, Babcock & Wilcox Company,
McDermott Incorporated, Burns & Roe Enterprises, Inc., and
U.E. & C.-Catalytic, Appellants in No. 90-5318.
In re TMI LITIGATION CASES CONSOLIDATED II.
BRANNON, James T., et al.,
v.
BABCOCK & WILCOX COMPANY, INC., et al., General Public
Utilities Corp., Metropolitan Edison Company, New Jersey
Central Power & Light Company, Pennsylvania Electric
Company, Babcock & Wilcox Company, McDermott Incorporated,
U.E. & C.-Catalytic, and Burns & Roe Enterprises, Inc.,
Dresser Industries, Appellants in Nos. 90-5562.
In re TMI LITIGATION CASES CONSOLIDATED II.
BRANNON, James T., et al.,
v.
BABCOCK & WILCOX COMPANY, INC., et al., United States of
America, Defendant-Intervenor.
Nos. 90-5312 to 90-5318, 90-5562 and 90-5671 to 90-5673.
United States Court of Appeals,
Third Circuit.
Argued Feb. 7, 1991.
Decided July 26, 1991.
John R. O'Donnell, Zarwin & Baum, Philadelphia, Pa., for appellees, Estate Arthur Tilly, Gertrude Tilly, Vincent Denoncour, Nora Denoncour.
Joseph D. Shein, Philadelphia, Pa., for appellee, Perri C. Kiick.
Louis M. Tarasi, Jr., Tarasi & Johnson, Pittsburgh, Pa., for appellees, Group A. See Docket Entry in No. 90-5312 for List of Parties.
Arnold Levin (argued), Fred S. Longer, Levin, Fishbein, Sedran & Berman, Philadelphia, Pa., Lee C. Swartz, Sandra L. Meilton, Hepford, Swartz, Menaker & Morgan, Harrisburg, Pa., for appellees, Group B. See Docket Entry in No. 90-5312 for List of Parties.
James R. Adams, Barley, Snyder, Cooper & Barber, Lancaster, Pa., for appellees, Family Style Restaurant, Skiadas Bros., Thomas E. Strauss, Inc., Gettysburg Tours, Inc., Heritage Inns, Inc., Le Smith Wholesale, Lincoln Heritage Inc., Overview Ltd., SMG Investments.
Peter J. Neeson, LaBrum & Doak, Philadelphia, Pa., for appellees, Joan A. Kichman, Charles C. Kichman, Matthew C. Kichman, Kandice M. Kichman.
William E. Chillas, Joseph F. Roda, Lancaster, Pa., for appellees, Earl Realty, Inc., Amish Homestead, Inc., One Room Schoolhouse, Homestead Gift Shop, Two Twenty-Two Corp., James Cosgrove, Glass Kitchens, Cherry Lane Mtr. Inn, Richard M. Rutt, Noah N. Martin Co., Cont. Inns of America, Pentidatillo Corp.
John G. Harkins, Jr. (argued), A.H. Wilcox, Ellen Kittredge Scott, Pepper, Hamilton & Scheets, Philadelphia, Pa. (Paul J. Mishkin, Berkeley, Cal., of counsel), for appellants, General Public Utilities Corp., Metropolitan Edison Co., Jersey Central Power & Light Co., Pennsylvania Elec. Co., Babcock & Wilcox Co., McDermott Inc., UE & C-Catalytic, Inc., Burns & Roe Enterprises Inc., Dresser Industries, Inc.
Stuart M. Gerson, Asst. Atty. Gen., James J. West, U.S. Atty., William Kanter, Peter R. Maier (argued), Appellate Staff, Civ. Div., Dept. of Justice, Washington, D.C., for appellant, U.S.
Before MANSMANN, SCIRICA and HIGGINBOTHAM, Circuit Judges.
OPINION OF THE COURT
MANSMANN, Circuit Judge.
In this matter growing out of the 1979 incident at the Three Mile Island nuclear facility near Harrisburg, Pennsylvania, we are asked once again to resolve a confrontation between an assertion of federal jurisdiction over public liability actions by defendants and a challenge to that jurisdiction by plaintiffs who wish to be in the state court system. We previously visited a similar issue in Kiick v. Metropolitan Edison Co.,
Our focus here is on the constitutionality of the Price-Anderson Amendments Act of 1988,
Specifically, our review centers upon a district court order remanding certain public liability actions to the state courts in which they were originally filed or in which they might have been filed. The district court concluded that it lacked federal subject matter jurisdiction over these claims and that remand was appropriate under the terms of
The district court's determination with respect to subject matter jurisdiction rested not on any failure to satisfy the jurisdictional requirements of the Amendments Act but upon the court's conclusion that the Amendments Act itself was unconstitutional. Underlying the remand order was the district court's holding that Congress, in purporting to create a federal forum for public liability actions through the Amendments Act, exceeded the authority granted to it by Article III, Section 2 of the United States Constitution.
Because it believed that its order granting the plaintiffs' motion to remand involved a "controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from this order may materially advance the ultimate termination of the litigation," the district court stayed execution of the remand and certified for immediate appeal, pursuant to
Whether Congress exceeded the scope of Article III, Section 2 of the United States Constitution by granting federal courts subject matter jurisdiction over public liability actions through the Price-Anderson Amendments Act of 1988.
The defendants, in an abundance of caution, filed petitions for permission to appeal, notices of appeal pursuant to
The procedural posture of this case raises a serious threshold question concerning our jurisdiction, under any of the three bases asserted, to hear this appeal. The district court's remand order, although it was stayed pending the outcome of this appeal, arguably implicates a statutory bar to our consideration of any aspect of the remand order, including the constitutional determination upon which it was based.
Because we are convinced that the bar of
I.
The procedural history of many of the public liability actions before us in this appeal has followed the course of a pendulum as statutory and constitutional interpretation has operated to move these actions back and forth between the state and the federal courts. We recount this history in detail since it bears directly on the jurisdictional issues to be resolved.
These eleven consolidated appeals have their origin in suits filed in the Pennsylvania state courts and in the Mississippi state and federal courts as a result of radiation leaks alleged to have occurred on March 28, 1979 at the Three Mile Island nuclear energy electric generating plant in Dauphin County, Pennsylvania. In these suits, approximately two thousand plaintiffs who resided near the Three Mile Island facility at the time of the incident allege clinical and subclinical conditions resulting from exposure to radiation released from the facility; numerous plaintiffs assert claims based on fear of the effects of radiation. Other claims, based upon loss of trade, were filed by seventy-two tourist-related businesses operating in nearby counties.
The defendants in these suits were, at the time of the Three Mile Island incident, the owners and operators of the nuclear facility, companies which had provided design, engineering or maintenance services, and those vendors of equipment or systems installed in the facility. The defendants deny that the March 28, 1979 release of radiation caused any harm.
Some of the cases now pending were originally filed in the early 1980's in several Pennsylvania Courts of Common Pleas and state courts in Bergen County, New Jersey and Jackson County, Mississippi, and were removed by the defendants to the United States District Courts in Pennsylvania and in Mississippi. The defendants asserted as grounds for removal that the plaintiffs' claims arose under the Price-Anderson Act, Pub.L. No. 85-256, 71 Stat. 576 (1957) (codified as amended in various sections of 42 U.S.C.).2 Following our rulings in Stibitz v. General Pub. Util. Corp.,
In August of 1988, Congress enacted the Price-Anderson Amendments Act of 1988, Pub.L. No. 100-408, 102 Stat. 1066 (1988). By this Act, Congress expressly created a federal cause of action for "public liability actions" which were defined as "any suit asserting public liability."
Following enactment of the Amendments Act on August 20, 1988, the defendants removed the actions underlying these appeals to the United States District Court for the Middle District of Pennsylvania. On October 7, 1988, the plaintiffs filed a petition seeking to have the removed actions remanded to the state courts on the ground that Congress lacked authority to create a federal forum for public liability actions inasmuch as these actions, despite Congress' explicit statement to the contrary, did not "arise under" federal law. The defendants opposed this petition; the United States government intervened in the proceedings pursuant to
On March 16, 1990, the district court granted the petition for remand. Holding that Congress' grant of federal jurisdiction over public liability actions would require that the federal courts apply the same law which a state court would have applied in an action under state common law, the district court concluded that the Amendments Act accomplished only the creation of a federal forum for the public liability actions. In the district court's view, the Amendments Act did not change the fact that the plaintiffs' rights arose under state law rather than under the federal statute. Because it did not believe that the Amendments Act's grant of federal jurisdiction over public liability actions could withstand constitutional attack, the district court concluded that it lacked subject matter jurisdiction over the plaintiffs' claims and was required to remand the actions to the state courts pursuant to
The United States and the defendants filed timely petitions for permission to appeal. The plaintiffs and the United States filed motions for partial reconsideration and for reconsideration, respectively. The defendants also filed a notice and an amended notice of appeal.
By order entered June 14, 1990, the district court denied the plaintiffs' motion for partial reconsideration and the motion filed by the United States for reconsideration. All of the defendants filed timely notices of appeal from the district court orders filed June 14, 1990 and March 16, 1990. Petitions for a Writ of Mandamus were also filed. On July 12, 1990, we granted the petitions for permission to appeal, consolidating the permissive appeals with the direct appeals.
II.
A.
The threshold question before us is whether we have jurisdiction to consider any aspect of the district court order in view of the bar to appellate review of remand orders set forth in
The defendants argue that there are three separate bases upon which we might rely in order to review the district court order. The first involves the permissive appeal provisions of
The plaintiffs respond with a number of conclusions respecting our jurisdiction, all centering on
Although we have been invited to bypass direct consideration of the reach of the
B.
Whenever any cause shall be removed from any state court into any circuit court of the United States, and the circuit court shall decide that the cause was improperly removed, and order the same to be remanded to the State court from whence it came, such remand shall be immediately carried into execution, and no appeal or writ of error from the decision of the circuit court remanding such cause shall be allowed.
Section 2 was reenacted in the Judicial Code of 1911, 36 Stat. 1094 as
If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case, and may order the payment of just costs.6
As amended in 1949,
With the brief exception, then, of the period between 1875 and 1887, Congress, by adopting
C.
In 1976, the Supreme Court decided Thermtron Prod., Inc. v. Hermansdorfer,
Reversing, the Supreme Court clarified that the
There is no doubt that in order to prevent delay in the trial of remanded cases by protracted litigation of jurisdictional issues, ... Congress immunized from all forms of appellate review any remand order issued on the grounds specified in Sec. 1447(c), whether or not that order might be deemed erroneous by an appellate court. But we are not convinced that Congress ever intended to extend carte blanche authority to the district courts to revise the federal statutes governing removal by remanding cases on grounds that seem justifiable to them but which are not recognized by the controlling statute.... Because the District Judge remanded a properly removed case on grounds that he had no authority to consider, he exceeded his statutorily defined power; and issuance of the writ of mandamus was not barred by Sec. 1447(d).
Id. at 351,
Although the rule that most remand orders are not subject to review remains, Thermtron made clear that the seemingly unequivocal language of
Another detour around the absolute bar of
In Pelleport the plaintiff sued in a California state court for the recovery of rental fees. The case was removed to the federal court on diversity grounds. The defendant filed a motion to remand the case to the state court, relying on a contractual forum selection clause. Although it found that diversity existed and that the federal court, therefore, had subject matter jurisdiction over the actions, the district court granted the motion for remand on the ground that the forum selection clause was valid and enforceable. The plaintiff appealed from the remand order and filed a petition for mandamus. The court of appeals addressed the applicability of
Waco involved a Texas state court action which was removed to the federal court on diversity grounds by a third party defendant. When the district court dismissed the third party action, diversity was destroyed and the case was remanded to the state court. Holding that the dismissal of the third party action was not immune from review, the Supreme Court wrote:
True, no appeal lies from the order of remand; but in logic and in fact the decree of dismissal preceded that of remand and was made by the District Court while it had control of the cause. Indisputably this order is the subject of an appeal; and, if not reversed or set aside, is conclusive upon the petitioner.
Waco,
The court of appeals in Pelleport read Waco as "stand[ing] for the proposition that although the final determination that diversity is lacking is not reviewable, the earlier determination that a third party defendant must be dismissed from the action is." Pelleport,
Like the dismissal in Waco, the court's decision that the contract clause is enforceable, if not reversed or set aside, is conclusive upon [the defendant], and, therefore, must be reviewed. To hold otherwise would deprive [the defendant] of its right to appeal a substantive determination of contract law. We cannot believe that Congress intended to immunize such decisions from review.
Id.
The court also reviewed the strong policy underlying
Any delay caused by an appeal of the contract issue is a delay that must be countenanced. To apply
Id. Thus the district court's order was held to be reviewable as a collaterally final order within the meaning of
Again, in The Clorox Co. v. United States District Court,
When a district court's remand order is based on a resolution of the merits of some matter of substantive law "apart from any jurisdictional decision,"
Clorox,
What has come to be known as the Clorox/Pelleport doctrine has been invoked in other cases to support the reviewability of remand orders in cases where the decision to remand was based on a prior determination of substantive law. See Foster v. Chesapeake Insurance Co.,
D.
With the historical background of
The plaintiffs argue that the
The exception created in Thermtron permits review of those remand orders which do not rest upon the grounds specified in
The Pelleport/Clorox exception to the
While the district court's decision in this case that the Amendments Act was unconstitutional was a substantive decision preceding the remand order, the heart of this decision was jurisdictional; unless the statute were found to be constitutional, there could be no federal subject matter jurisdiction. Despite its magnitude, we cannot say that the district court's constitutionality ruling was a "substantive decision on the merits apart from any jurisdictional decision" within the meaning of Pelleport and its progeny. Pelleport,
We reiterate Thermtron's admonition that
The jurisdictional issues most often resolved by decisions to remand thus involve "the presence or absence of diversity of citizenship or a 'case arising' [and] are threshold questions that can generally be readily resolved by reference to a well-established body of law." Herrmann, supra, at 414. See also Hansen v. Blue Cross of California,
The Thermtron holding that
Id. at 415.
The district court's ruling holding the Amendments Act to be unconstitutional, despite its jurisdictional component, is not the type of determination routinely and regularly made pursuant to
The plaintiffs characterize this constitutional ruling and the resulting remand as purely jurisdictional in nature and argue that the bar of
While we recognize that the district court's ruling on the constitutionality of the Amendments Act has obvious consequences for federal jurisdiction and, unlike the rulings prior to remand in the Pelleport/Clorox cases, may be said to have a truly jurisdictional component, we cannot conclude that, in the situation presented here, Congress intended that
In analyzing the scope of the determinations to be made under
Reading the finding of subject matter jurisdiction required under
[T]he issue of removability is closed if the federal district court refuses to assume jurisdiction and remands the cause. Section 28 of the Judicial Code [now section 1447] precludes review of the remand order directly or indirectly after final judgment in the highest court of the state in which decision could be had....
... For the reasons already stated, we are not at liberty to review the remand order.
(Citations omitted.) In United States v. Rice,
Congress ... established the policy of not permitting interruption of the litigation of the merits of a removed cause by prolonged litigation of questions of jurisdiction of the district court to which the cause is removed. This was accomplished by denying any form of review of an order of remand, and, before final judgment, of an order denying remand.
(Emphasis added.) Those state cases addressing the reviewability of remand orders have reached a similar conclusion. See Ramahi v. Hobart Corp.,
To read sections 1447(c) and 1447(d) as applying to jurisdictional determinations based upon the constitutionality of a statute authorizing removal would vastly expand the holding in Thermtron. While the Court in Thermtron made it clear that "the district courts [are] the final arbiters of whether Congress intended that specific actions were to be tried in a federal court," the reading which the plaintiffs give to the sections in question would make district courts the final arbiters of the constitutionality of federal statutes. Thermtron,
If we interpret constitutionality rulings as falling within the subject matter jurisdictional determination to be made pursuant to section 1447(c), a district court order refusing remand and sustaining the constitutionality of the statute authorizing removal could be reviewed under
It is inconceivable to us that Congress intended that a party be entitled to review of a district court's order remanding a case to the state courts on the ground that its own docket is overcrowded, or on the ground that a contractual provision is valid and enforceable, but be unable to challenge a district court ruling that the statute which specifically provides for federal jurisdiction is unconstitutional. Reading sections 1447(c) and 1447(d) so broadly as to mandate this result assaults the orderly review process of the federal courts which Congress established so long ago.
In support of this broad reading of the subject matter jurisdiction inquiry under section 1447(c), the plaintiffs cite as authority a single sentence from the two paragraph per curiam opinion in Richards v. Federated Dep't Stores, Inc.,
The recognized exceptions to section 1447(d) and the policy underlying that section establish that the subject matter jurisdictional inquiry contemplated by section 1447(c) is limited to the question of whether Congress intended that the types of actions at issue be subject to removal. The question before us is not whether Congress intended that public liability actions be subject to removal but whether the Constitution requires that the clear removal provisions in the Amendments Act be invalidated. To hold that district court decisions with respect to such questions are unreviewable would have serious jurisprudential consequences.
Should we find, as the plaintiffs would have us do, that constitutional determinations of the type made here fall within the purview of sections 1447(c) and 1447(d), district courts facing difficult issues on which guidance might be critical could find themselves constrained to uphold the constitutionality of a federal statute in order to preserve the possibility of appellate review. Such extraneous considerations were never intended to influence judicial decisionmaking.
The district court in this case struggled with the section 1447(d) bar to appellate review and how the court might best position the issues to be decided in order to insure the availability of review. Noting that the Supreme Court had yet to address specifically the question of whether appellate review of remand orders issued pursuant to section 1447(c) could be obtained through certification under
[P]erhaps the most compelling [reason] for considering the issue at bar a controlling question of law is because the constitutionality of an Act of Congress is being challenged. The final determination on this issue will impact not only the parties in the instant cases but also the parties to any similar cases that may arise in the future. This jurisdictional issue requires more than a simple determination of whether public liability actions "arise under" the Act. See Herrmann, Thermtron Revisited: When and How Federal Trial Court Remand Orders are Reviewable. 19 Ariz.St.L.J., 395, 414 & n. 10 (1987-88). Rather, it involves a determination as to whether the grant of "arising under" jurisdiction itself is constitutional. Certainly, the issue is "serious to the conduct of the litigation, [both] practically [and] legally." Katz v. Carte Blanche Corp.,
In re TMI Coordinated Proceedings,
there is a substantial ground for difference of opinion as to the correctness of its decision. The defendants and the United States presented strong and logical arguments for upholding the Act's jurisdictional grant. This court is not so bold as to state that its opinion on the constitutionality of an Act of Congress not previously reviewed by the courts is so plainly correct that it should not be reviewed by the appellate court.
Id. at 648.
We do not believe that Congress, in enacting sections 1447(c) and 1447(d), intended to leave the district court and the litigants in the quandary created by the procedural posture of this case. We cannot read section 1447(d) to bar appellate review of a district court's decision that the statute which purports to confer federal jurisdiction is constitutional, where the district court, recognizing the complexity and magnitude of the constitutional question before it, certifies that question for immediate appeal pursuant to
We emphasize that our conclusion is a narrow one and should in no way frustrate the policy underlying section 1447(d). "[Our view] respects Congress' decision to avoid the delay that would be caused by review of the bulk of remand orders, but restricts that limitation to the category of cases where review is least necessary." Herrmann, supra at 415.
We are presented here with a situation where the delay and disruption of on-going state proceedings normally associated with orders of remand are not factors. Where the district court, in order to maximize the opportunity for appellate review, has stayed the order of remand, there is no interference with the expenditure of state judicial resources.9
The district court specifically addressed the policy underlying the section 1447(d) bar to review of remand orders and concluded that delay and disruption in the resolution of this matter might best be minimized by permitting rather than precluding appellate review:
If the court's determination that the Act's grant of jurisdiction exceeds the scope of article III is reviewed and found to be erroneous, the cases at bar will be tried in this court and the harm to defendants of denying them the right granted by Congress to be in federal court will be avoided. Review of this issue may also save the parties time and money. Although the decision reached by the court of appeals most likely will result in a petition for writ of certiorari to the Supreme Court, if the result of all review of this issue places the cases back in this court for trial, the termination of the litigation will be in sight. If this issue is not reviewed, however, given the history of these cases following the decisions in Stibitz v. General Pub. Utils. Corp.,
[I]n this regard ... review of the issue will not necessarily defeat the goal of Sec. 1447(d) to prevent delay in the trial of remanded cases.... [T]he history of these cases gives every indication that there will be further delay in the trial of these cases despite remand to state court.
Id. at n. 6.
In sum, we are convinced that Congress could not have intended that sections 1447(c) and 1447(d) be construed so broadly as to prevent our consideration of a
Having determined that we have jurisdiction to hear this appeal, we turn to the substance of the question certified. We believe that the constitutional issue of whether these cases "arise under" the laws of the United States is at the core of these proceedings and will thus focus upon the history and content of the comprehensive statutory scheme of which the Amendments Act is a part. We begin with the critical constitutional provision and the caselaw which defines it.
III.
Article III, Sec. 2, cl. 1 of the United States Constitution provides that:
The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority....12
"Congress cannot confer upon the lower federal courts a jurisdiction beyond the cases to which the judicial power of the United States extends under Art. III...." International Brotherhood of Teamsters v. W.L. Mead, Inc.,
The starting point of any discussion of the scope of Article III "arising under" jurisdiction must certainly be Osborn v. Bank of the United States, 22 U.S. (9 Wheat) 738,
If it be a sufficient foundation for jurisdiction, that the time or right set up by the party, may be defeated by one construction of the Constitution or law of the United States, and sustained by the opposite construction, provided the facts necessary to support the action be made out, then all the other questions must be decided as incidental to this, which gives that jurisdiction.
Id. at 822. The central teaching of Osborn, therefore, is that a case cannot be said to arise under a federal statute where that statute is nothing more than a jurisdictional grant. In order to confer "arising under" jurisdiction, "the act [may] not stop with incorporating the Bank;" it must do more. Id. at 826-27.
The broad holding of Osborn was clarified in Verlinden,
At the threshold of every action in a district court against a foreign state, ... the court must satisfy itself that one of the exceptions [to sovereign immunity] applies--and in doing so it must apply the detailed federal law standards set forth in the Act. Accordingly, an action against a foreign sovereign arises under federal law, for purposes of Art[icle] III jurisdiction.
Id. at 493-94,
In so holding, the Court reaffirmed the Osborn rule that a statute which merely confers federal jurisdiction cannot constitute the federal law under which an action arises. Id. at 496,
Congress, pursuant to its unquestioned Art[icle] I powers, has enacted a broad statutory framework governing assertions of foreign sovereign immunity. In so doing, Congress deliberately sought to channel cases against foreign sovereigns away from the state courts and into federal courts, thereby reducing the potential for a multiplicity of conflicting results among the courts of the 50 States.... [E]very action against a foreign sovereign necessarily involves application of a body of substantive federal law....
Id. at 497,
The fact that pure jurisdictional statutes cannot withstand scrutiny under Article III was reiterated recently in Mesa v. California,
raises serious doubts whether, in enacting Sec. 1442(a), Congress would not have "expand[ed] the jurisdiction of the federal courts beyond the bounds established by the Constitution." Verlinden B.V. v. Central Bank of Nigeria,
Id. at 136,
The district court carefully applied these precedents and concluded that Congress exceeded the scope of Article III in enacting the Amendments Act because the Amendments Act, like the federal officer removal statute, was purely jurisdictional, creating only a federal forum for the litigation of public liability actions.15
Critical to the district court's constitutionality determination was the fact that the rules of decision for public liability actions filed in or removed to a federal court are, according to the Amendments Act, to be "derived from the law of the State in which the nuclear incident ... occurs."
Recognizing that there was "a substantial ground for difference of opinion as to the correctness of the decision," the district court concluded that the grant of "arising under" jurisdiction set forth in the Amendments Act was unconstitutional. Our resolution of the question certified depends entirely upon the accuracy of the district court's characterization of the Amendments Act as purely jurisdictional. We turn, therefore, to the Act itself and begin with its history.
IV.
Congressional regulation of the nuclear power industry was initiated with the enactment of the Atomic Energy Act of 1946. While that statute reflected Congress' determination that the nuclear industry would be a government monopoly, see Act of Aug. 1, 1946, ch. 724, 60 Stat. 755, Congress later concluded that it would be in the national interest to permit private sector involvement in that industry under a system of federal licensing and regulation. This policy decision was implemented in the Atomic Energy Act of 1954, as amended,
In 1957, Congress enacted the Price-Anderson Act for the purpose of "protect[ing] the public and ... encourag[ing] the development of the atomic energy industry."
The second important feature of the Act involved the "channeling of liability." Under this provision, any entity exposed to potential liability for activity resulting in a nuclear incident, even if it were not a direct participant in the activity, was entitled to indemnification. Id.
Finally the Price-Anderson Act established that all public liability claims above the amount of required private insurance "protection would be indemnified by the Federal Government, up to the aggregate limit on liability." Id.
In 1966, prior to the scheduled expiration of the Price-Anderson Act, the liability limitation portions of the Act were extended for an additional ten years and a new provision was added which required that those indemnified waive the defenses of negligence, contributory negligence, charitable or governmental immunity, and assumption of the risk in the event of an action arising as the result of an extraordinary nuclear occurrence.
congressional concern that state tort law dealing with liability for nuclear incidents was generally unsettled and that some way of insuring a common standard of responsibility for all jurisdictions--strict liability--was needed. A waiver of defenses was thought to be the preferable approach since it entailed less interference with state tort law than would the enactment of a federal statute prescribing strict liability. See S.Rep. No. 1605, 84th Cong., 2d Sess., 6-10 (1966).
Duke Power,
In 1975, the Price-Anderson Act was amended a second time. These amendments extended the Act's coverage and made certain liability limitation adjustments. Provision was made to phase out the federal indemnity portion of the Price-Anderson scheme.
On August 29, 1988, Congress amended the Price-Anderson Act for a third time, enacting the Price-Anderson Amendments Act of 1988. The decision to amend and to extend the Price-Anderson Act grew out of the congressional conclusion that
The Price-Anderson System, including the waiver of defenses provisions, the omnibus coverage, and the predetermined sources of funding, provides persons seeking compensation for injuries as a result of a nuclear incident with significant advantages over the procedures and standards for recovery that might otherwise be applicable under State tort law. The Act also provides a mechanism whereby the federal government can continue to encourage private sector participation in the beneficial uses of nuclear materials.
S.Rep. No. 218, 100th Cong., 2d Sess. 4, reprinted in 1988 U.S.Code Cong. & Admin.News 1476, 1479. The Amendments Act extended the authority for the Price-Anderson indemnification system, increased the aggregate level of indemnification payments, established a mechanism for expedited congressional action relating to additional compensation, and altered the breadth of the compensation system to cover activity related to disposal of nuclear waste. See S.Rep. No. 70, 100th Cong., 2d Sess. 1, reprinted in 1988 U.S.Code Cong. & Admin.News 1424. The Amendments Act also contained provisions imposing criminal and civil penalties upon contractors who violate Department of Energy rules, regulations or orders respecting nuclear safety and creating an independent panel to advise Congress regarding the appropriate means of fully compensating nuclear accident victims was created. Two provisions of the Amendments Act are critical to the appeals now before us. In addition to the provisions already detailed, the Amendments Act included an expansion of the reach of
With respect to any public liability action arising out of or resulting from a nuclear incident, the United States district court in the district where the nuclear incident takes place, or in the case of a nuclear incident taking place outside the United States, the United States District Court for the District of Columbia, shall have original jurisdiction without regard to the citizenship of any party or the amount in controversy. Upon motion of the defendant or of the Commission, or the Secretary, as appropriate, any such action pending in any State court (including any such action pending on [the date of the enactment of the Price-Anderson Amendments Act of 1988] or United States district court shall be removed or transferred to the United States district court having venue under this subsection. Process of such district court shall be effective throughout the United States....
Also important to this appeal is the Amendments Act's addition of
A public liability action shall be deemed to be an action arising under
In addition, we note that following the 1988 Amendments, the Price-Anderson Act contained provisions which created a federal cause of action,
V.
It is clear that "cases in which federal and state law elements are mixed present very difficult subject matter jurisdiction problems for the federal court." Hirshman, Whose Law Is It, Anyway? A Reconsideration of Federal Question Jurisdiction Over Cases of Mixed State and Federal Law, 60 Ind.L.J. 17 (1984). The same is no less true of the "arising under" determination to be made in construing Article III. See Amar, A Neo-Federalist View of Article III: Separating the Two Tiers of Federal Jurisdiction and the Revision of the Judicial Code, 65 B.U.L.Rev. 205, 265 n. 195 (1985) (the scope of federal question jurisdiction granted by Article III "has long perplexed even the most eminent of jurists and scholars"). These difficulties arise because "Congress rarely enacts a complete and self-sufficient body of federal law. The federal statutes are full of references, both explicit and implicit, to the law of some state. As a result, legal problems repeatedly fail to come wrapped up in neat packages marked 'all federal' or 'all state.' " Hirshman, supra at 18.
The Amendments Act is no exception. It, too, contains both federal and state elements. While the public liability cause of action itself and certain elements of the recovery scheme are federal, the underlying rules of decision are to be derived from state law. This is not fatal to "arising under" jurisdiction because we find that Congress intended to--and did--create a federal cause of action which will implicate substantive aspects of federal law.
Under the terms of the Amendments Act, the "public liability action" encompasses "any legal liability" of any "person who may be liable" on account of a nuclear incident.
The district court's narrow interpretation of the Amendments Act was founded, not upon an analysis of congressional intent, but upon its concern that because Congress directed that the rules of decision governing public liability actions were to be derived from state law, Congress had failed to rule substantively and thus had exceeded the established boundaries of Article III. We do not find any support in the caselaw for the proposition that Congress may not constitutionally rely upon state rules of decision as a foundation for a particular statutory scheme. Congress has, at various times and in various contexts, enacted statutes authorizing federal courts to decide nondiversity cases turning on state law rules of decision. Note, Over-Protective Jurisdiction?: A State Sovereignty Theory of Federal Questions, 102 Harv.L.Rev. 1948, 1950 (1989) (footnote omitted). Examples of statutory schemes adopting state rules of decision include the Federal Deposit Insurance Act,
At other times Congress has not been explicit as to the role which state law is to play in a particular statutory scheme. Courts, in that circumstance, have been required to determine whether state law was intended to operate as state law or whether state law should be read to form the content of new federal law, filling interstitial statutory gaps. Courts evaluating these mixed state/federal schemes have focused primarily upon congressional intent and have formulated decisions accordingly. See, e.g., Reconstruction Finance Corp. v. Beaver County,
In this case, congressional intent is not an issue. In explicitly providing that the "substantive rules for decision" in public liability actions "shall be derived from" the law of the state in which the nuclear incident occurred, we believe that Congress expressed its intention that state law provides the content of and operates as federal law. The legislative history of the Amendments Act supports this view by clarifying that Congress adopted the approach to state law embodied in the Outer Continental Shelf Lands Act. Reporting on H.R. 1414, the House version of the Amendments Act, the Committee on Interior and Insular Affairs made specific reference to the Lands Act:
The Committee recognizes, of course, that Article III of the Constitution limits the type of cases that federal courts created under the Article may hear. For this reason, H.R. 1414 expressly states that any suit asserting public liability shall be deemed to be an action arising under the Price-Anderson Act, thereby making suits asserting public liability "Cases ... arising under ... the laws of United States" within the meaning of Article III. Rather than designing a new body of substantive law to govern such cases, however, the bill provides that the substantive rules for decision in such actions shall be derived from the law of the state in which the nuclear incident involved occurs, unless such law is inconsistent with the Price-Anderson Act. The Committee believes that conferring on the Federal courts jurisdiction over claims arising out of all nuclear incidents in this manner is within the constitutional authority of Congress and notes that the Congress has used this approach in the Outer Continental Shelf Lands Act.
H.R.Rep. No. 104, 100th Cong., 1st Sess., Pt. 1, at 18 (1987).
In the Lands Act, Congress declared "the civil and criminal laws of each adjacent state to be the law of the United States" on the Outer Continental Shelf "[t]o the extent that they are applicable and not inconsistent with" the Lands Act.
While the Lands Act has been the subject of frequent litigation, the power of Congress to confer federal jurisdiction in these cases and to give content to the federal law by adopting state rules of decision has never been questioned. See Rodrigue v. Aetna Casualty & Surety Co.,
We recognize that the language respecting state law in the Amendments Act is not identical to that of the Lands Act. While the Lands Act provides that the laws of adjacent states are "to be the law of the United States" on the outer continental shelf, the Amendments Act refers to substantive rules for decision as "derived from state law." We believe that the language adopted in the Amendments Act supports our view that Congress intended that the rules of decision constitute federal law.
Even if we were to find that it is state law itself, rather than state law operating as federal law, which forms the basis for decision in public liability actions, our conclusion regarding congressional authority to confer federal jurisdiction over these public liability actions would be unaffected. In Verlinden, the very issue to be decided was whether Congress had authority to grant jurisdiction to the federal courts over causes of action when those actions were governed by pure state law rules of decision. The Foreign Sovereign Immunities Act did not, as does the Amendments Act, affect substantive state tort law. The sole objective of the Immunities Act was to specify those instances in which sovereign immunity would and would not apply. This federal element was sufficient to allow the Foreign Sovereign Immunities Act to withstand an Article III challenge in spite of the fact that all substantive issues were to be resolved in accordance with state law.
The federal elements involved in the Price-Anderson scheme are similarly sufficient. The federal ingredients here are as substantial as those in Verlinden and are more substantial than those found sufficient in Osborn. The Amendments Act creates a federal cause of action which did not exist prior to the Act, establishes federal jurisdiction for that cause of action, and channels all legal liability to the federal courts through that cause of action. By creating this federal program which requires the application of federal law, Congress sought to effect uniformity, equity, and efficiency in the disposition of public liability claims. With the federal jurisdiction and removal provisions set forth in the Amendments Act, Congress ensured that all claims resulting from a given nuclear incident would be governed by the same law, provided for the coordination of all phases of litigation and the orderly distribution of funds, and assured the preservation of sufficient funds for victims whose injuries may not become manifest until long after the incident. See H.R.Rep. No. 104, 100th Cong., 1st Sess., pt. 3, at 18 (1987). Thus, Congress clearly intended to supplant all possible state causes of action when the factual prerequisite of the statute are met.
Examining the Price-Anderson scheme as completed by the Amendments Act, we are convinced that the Act, while relying for definition upon state law elements, contains the federal components necessary to survive the constitutional challenge mounted here. Our conclusion is unaffected by those pre-Amendments Act cases in which we determined that the Price-Anderson Act did not create a federal cause of action. Those cases, which evaluated the statutory rather than the constitutional "arising under" requirement, rested principally on the finding that Congress had not specifically created a federal tort and did not intend to create a federal cause of action. See, e.g., Kiick v. Metropolitan Edison Co.,
With the Amendments Act, however, the entire Price-Anderson landscape was transformed. Congress clearly considered the decisions of our court holding that Congress had not intended to create a federal cause of action for cases not based upon an extraordinary nuclear occurrence, that federal question jurisdiction would attach to actions resulting from an extraordinary nuclear occurrence, that federal questions would arise in the defense of nuclear accident claims but would not appear in the plaintiff's case, and that Congress had not directed that a body of federal common law be created. Congress then provided, in the Amendments Act, the clearest expression of intent that there be a federal cause of action arising directly under the Act. Despite the plaintiffs' arguments to the contrary, Kiick, Stibitz, and the other pre-Amendments Act cases provide no support for the Article III challenge made here.20
We are also not persuaded by the plaintiffs' argument that the Amendments Act exceeds the scope of Article III because the public liability action, now a federal tort, was previously actionable under state law. Where Congress creates a right of action, and formulates substantive federal provision applicable to that action, the action arises under federal law despite the fact that the same wrong may previously have been actionable under state law. Were the rule otherwise, actions which today may be brought under the Federal Tort Claims Act, the Outer Continental Shelf Lands Act and other federal statutes would not arise under federal law because, prior to enactment of the federal statute, actions based on the identical occurrence could have been brought in a state court. The federal nature of the right to be established is decisive. Here, the right to control the safety aspects of nuclear power is exclusively federal. Congress, therefore, is authorized to create a federal tort which may have had its origins in state law. The basis of the public liability action no longer stems from state law. See Silkwood v. Kerr-McGee Corp.,
Through the Amendments Act, Congress has placed an overlay of federal law upon the rights and remedies previously available under state law. Once a federal court is satisfied that a particular suit is a public liability action, additional questions under the Amendments Act may need to be addressed. Under certain circumstances licensees may be required to waive defenses which would have been viable under state law. Punitive damage awards available under state law also may be precluded. Furthermore, in every case alleging public liability, courts will be required to determine whether state law principles conflict with other parts of the Price-Anderson scheme.
Two Supreme Court cases indicate that the duty the defendants owe the plaintiffs in tort is dictated by federal law.21 In Pacific Gas & Electric Co. v. State Energy Conservation and Development Commission,
With regard to nuclear energy, the Court found that "Congress ... intended that the Federal Government should regulate the radiological safety aspects involved in the construction and operation of a nuclear plant, but that the States retain their traditional responsibility in the field of regulating ... for determining questions of need, reliability, cost, and other related state concerns." Id. at 205,
the Federal Government maintains complete control of the safety and "nuclear" aspects of energy generation....
State safety regulation is not pre-empted only when it conflicts with federal law. Rather, the Federal Government has occupied the entire field of nuclear safety concerns, except the limited powers expressly ceded to the States. When the Federal Government completely occupies a given field ... as it has done here, the test of pre-emption is whether the "matter on which the State asserts the right to act is in any way regulated by the Federal Act."
Id. at 212-13,
The holding in Pacific Gas & Electric was reaffirmed one term later in Silkwood: "states are precluded from regulating the safety aspects of nuclear energy."
If there were nothing more, this concern over the state's inability to formulate effective standards and the foreclosure of the States from conditioning the operation of nuclear power plants on compliance with state-imposed safety standards arguably would disallow resort to state-law remedies....
Id. at 250-51,
In sum, it is clear that in enacting and amending the Price-Anderson Act, Congress assumed that state-law remedies ... were available.... This was so even though it was well aware of the NRC's exclusive authority to regulate safety matters. No doubt there is some tension between the conclusion that safety regulation is the exclusive concern of the federal law and the conclusion that a State may nevertheless award damages based on its own law of liability.... It may be that the award of damages based on the state law of negligence ... is regulatory in the sense that a nuclear plant will be threatened if it does not conform to state standards, but that regulatory consequence was something that Congress was quite willing to accept.
We do not suggest that there could never be an instance in which the federal law would pre-empt the recovery of damages based on state law.... preemption should ... [be judged] on whether there is an irreconcilable conflict between the federal and state standards or whether the imposition of a state standard in a damages action would frustrate the objectives of the federal law.
Id. at 256,
Indeed, one court, when construing the source of the duty to be applied in a tort case arising under the Price-Anderson Act, concluded that the NRC had extensively regulated the dose of radiation a worker could receive. See O'Conner v. Commonwealth Edison Co.,
Similarly, in Hennessy v. Commonwealth Edison Company,
Under Pacific Gas & Electric Co., states are preempted from imposing a non-federal duty in tort, because any state duty would infringe upon pervasive federal regulation in the field of nuclear safety, and thus would conflict with federal law. See
VI.
Having concluded that the Amendments Act does not transgress the limits of Article III, we turn, finally, to the plaintiffs' collateral constitutional challenges to the Amendments Act. The plaintiffs urge, as alternate grounds for affirming the district court's order of remand, that application of the Amendments Act to cases already pending in a state court violates constitutional principles of federalism, state sovereignty, due process, and equal protection. "Our scope of review is generally governed by the controlling question of law set forth in the district court's certification order under
The plaintiffs' sovereignty and federalism claims are based upon the proposition that a state court may not be ousted of its jurisdiction once that jurisdiction has been properly established. This simply is not an accurate statement of the law. In Tennessee v. Davis,
The removal of cases arising under [the laws of the United States] from State into Federal courts is, therefore, no invasion of State domain. On the contrary, a denial of the right of the general government to remove them, to take charge of and try any case arising under the Constitution or laws of the United States, is a denial of the conceded sovereignty of that government over a subject expressly committed to it.
See also, Railway Co. v. Whitton's Administrator,
Provided that the retroactive application of a statute is supported by a legitimate legislative purpose furthered by rational means, judgments about the wisdom of such legislation remain within the exclusive province of the legislative and executive branches[.]
Id. at 729,
The plaintiff's remaining constitutional claims, those resting on due process and equal protection, also depend upon the legitimacy of Congress' purpose in structuring the Amendments Act to apply retroactively. We therefore focus once more upon the purposes underlying the Amendments Act and the Price-Anderson scheme.
The retroactivity feature of the Amendments Act was included to modify the previously limited reach of the Price-Anderson Act. See S.Rep. No. 218, 100th Cong., 1st Sess., at 13, 1988 U.S.Code Cong. & Admin.News 1488 (1988). Retroactivity guaranteed that all cases arising out of the same nuclear incident could be consolidated in one forum. This consolidation provision was designed to promote "equitable and uniform treatment of victims," H.R.Rep. No. 104, 100th Cong., 1st Sess., pt. 1, at 18, 29 (1987); "the orderly distribution of funds," H.R.Rep. No. 104, 100th Cong., 1st Sess., pt. 3, at 30 (1987); and "the avoidance of similar issues in multiple jurisdictions that may occur in the absence of consideration." S.Rep. No. 218, 100th Cong., 1st Sess. at 13, 1988 U.S.Code Cong. & Admin.News 1488 (1988). These purposes are not undermined by the congressional grant of concurrent jurisdiction. The Amendments Act ensures that every claim originating in a single nuclear incident may be considered with other similar claims. Where, as here, an incident results in multiple claims with cases filed in several counties in several states, consolidation in federal court serves to reduce uncertainty, expenditure of resources in dealing with duplicative issues, and the possibility of inconsistent outcomes. Where, however, only one person is affected by the nuclear incident, as in O'Conner,
Given the goals underlying the Amendments Act, we believe that its provision for retroactivity was rationally directed to a legitimate federal concern. As the plaintiffs have failed to meet the burden of showing that the Amendments Act was arbitrary and irrational in purpose and effect, we find no ground for holding the Amendments Act unconstitutional on any of the collateral grounds asserted. Usery v. Turner Elkhorn Mining Co.,
Our decision in this regard is consistent with precedent established in other courts of appeals. See Arbour v. Jenkins,
VII.
Having concluded that we have a valid jurisdictional basis to hear this appeal and finding no constitutional infirmity in the Price-Anderson Amendments Act of 1988, we will vacate the order of the district court and remand this matter for further proceedings in the federal forum.
SCIRICA, Circuit Judge, concurring.
I join in the judgment of the court, and join Parts I, II and VI of the majority opinion. I write separately because I would approach this constitutional issue in a somewhat different manner.
I.
Every grant of federal jurisdiction must fall within one of the nine categories of cases and controversies enumerated in Article III. See, e.g., Hodgson v. Bowerbank, 5 Cranch (9 U.S.) 303,
As does the majority, I would sustain Sec. 2210(n)(2) under the traditional interpretation. I believe that public liability actions, as a class, contain sufficient substantive federal issues to bring the jurisdictional grant within the limits of Article III. As I see it, the difficulty here is that these issues may not arise in every public liability action. The Price-Anderson Act and other federal statutes contain safety regulations, waivers of defenses, insurance and indemnification provisions, and liability limitations that will affect many, but not necessarily all, state law claims arising out of nuclear incidents. This case, therefore, raises the question of the extent to which Congress may confer federal jurisdiction over state law cases that will not necessarily implicate substantive federal questions.
II.
As a preliminary matter, I note certain factors that I would not rely upon to sustain the constitutionality of Sec. 2210(n)(2). I would not place any emphasis on the definitional questions involved in deciding whether an action falls within the scope of the Amendments' jurisdictional grant. Nor would I rely on the fact that the public liability action "replaces" most state law causes of action arising out of nuclear incidents. In my opinion, Congress intended for state law to provide the substantive rules of decision for all public liability actions. Consequently, I believe Sec. 2210(n)(2) grants federal jurisdiction over state law causes of action. Although federal statutes and regulations are likely to play a role in many public liability actions, I do not perceive substantive federal questions present at the outset of every such case.
The constitutionality of Sec. 2210(n)(2) is unaffected by the fact that a court must decide various issues of federal law before determining that a particular claim qualifies as a public liability action. At the outset of every case brought under Sec. 2210(n)(2), a court must decide whether a "nuclear incident" has occurred. See
Under Osborn, the federal ingredients necessary to satisfy Article III must be substantive in the sense that "the title or right set up by the party, may be defeated by one construction of the constitution or law of the United States, and sustained by the opposite construction." Osborn v. Bank of the United States,
The choice of law provision is not strictly jurisdictional in the same sense. However, whenever Congress provides original federal jurisdiction over state law claims, a federal court must decide the choice of law question. If such provisions could sustain arising under jurisdiction, there would be no constitutional limits on Congress' powers. Because jurisdiction under Sec. 2210(n)(2) is concurrent, Sec. 2014(hh) goes somewhat further than an ordinary choice of law rule. If a public liability action proceeds in state court, federal law requires that court to apply the law of the state where the nuclear incident occurred, even if state law would otherwise look to the law of some other state. Therefore, federal law might alter the substantive law applied in some state court actions. Nevertheless, I would not sustain a grant of federal jurisdiction based on the effect of federal law on state court actions.
The inquiry is unchanged by the fact that Congress chose to create a "new" federal cause of action, rather than simply provide for federal jurisdiction over state law claims. If Congress had truly pre-empted state law causes of action and replaced them with federal claims governed by federal rules of decision, the Amendments would clearly be constitutional. For example, Article III would not be contravened if Congress had intended for courts to apply federal common law in public liability actions. In Textile Workers Union v. Lincoln Mills,
I believe Congress intended for state law, acting of its own force, to provide the rules of decision in public liability actions. In Pennsylvania v. General Public Utilities Corp.,
Rather than designing a new body of substantive law to govern such cases, however, the bill provides that the substantive rules for decision in such actions shall be derived from the law of the State in which the nuclear incident involved occurs, unless such law is inconsistent with the Price-Anderson Act.
H.R.Rep. No. 104, Part 1, 100th Cong., 1st Sess. at 18 (1987) (emphasis added) [hereinafter "House Report"]. See also id. at 5 ("Liability is determined under applicable state tort law."). Consequently, unlike under Sec. 301 of the LMRA, I believe state law remains "an independent source of private rights." Lincoln Mills,
Defendants stress that Sec. 2014(hh) provides that the rules of decision in public liability actions are to be "derived from" state law. However, I would not read these words as authorizing the application of federal common law, or the selective application of state law. Such a reading is not supported by the structure of the Amendments. For example, Sec. 2210(n)(2) provides for concurrent jurisdiction. If a public liability action is not removed, it may proceed in state court. Are these state courts to apply federal law which is "derived from" the law of their own state, but which is somehow different from that state law? Similarly, Sec. 2014(hh) requires courts to apply the law of the state in which a particular accident occurred. Thus, unlike under Sec. 301 of the LMRA, courts could not fashion a uniform body of federal law applicable to public liability actions. Cf. Silkwood v. Kerr-McGee Corp.,
Having determined that state law remains an independent source of private rights, I would not place any emphasis on the fact that state law may have been "incorporated" into federal law. Mere incorporation of state law cannot by itself satisfy Article III. If it could, every purely jurisdictional grant would become constitutional if Congress simply added language declaring that state law operates as federal law. See, e.g., Goldberg-Ambrose, The Protective Jurisdiction of the Federal Courts, 30 UCLA L.Rev. 542, 558 (1983) (Incorporation alone cannot satisfy Article III because it "does not generate any new independent federal rights or obligations."). The mere presence of some state law issues in an otherwise federal cause of action will not invalidate a jurisdictional grant. See, e.g., Osborn,
III.
In Verlinden, the Supreme Court held that the scope of the constitutional grant of "arising under" jurisdiction is broader than the scope of the statutory federal question grant under
In Stibitz and Kiick, we held that the actions before us now do not satisfy the well-pleaded complaint rule, because they are founded entirely in state law. The Amendments specifically provide for federal jurisdiction over the same cases. Therefore, we are squarely presented with the question of defining the "gap" between the scope of the statutory grant and the limits of Article III. As the majority notes, these limits remain largely unexplored. The Amendments create a "new" federal cause of action encompassing most claims arising out of any "nuclear incident." However, instead of prescribing new federal rules of decision, or authorizing the application of federal common law, Congress directed that the rules of decision are to be "derived from the law of the State where the nuclear incident involved occurs, except where such law is inconsistent with the provisions of [the Price-Anderson Act]."
The Supreme Court has not had occasion to explore fully the extent to which Congress may confer federal jurisdiction over cases in which the application of federal law is speculative. In Verlinden, the Court recognized that Osborn can be read broadly to validate all such jurisdictional grants, but noted that some have questioned a principle that would permit " 'assertion of original federal jurisdiction on the remote possibility of presentation of a federal question.' "
We need not resolve that issue or decide the precise boundaries of Art. III jurisdiction ... since the present case does not involve a mere speculative possibility that a federal question may arise at some point in the proceeding. Rather, a suit against a foreign state under [the FSIA] necessarily raises questions of substantive federal law at the very outset, and hence clearly "arises under" federal law, as that term is used in Art. III.
Id. at 493,
I believe this case raises that question. As I note below, I do not believe the holding in Verlinden ultimately rests on the fact that substantive federal questions are present at the outset of every case brought under the FSIA. In any event, the Amendments do not mandate a similar application of federal law at the outset of every public liability action. Rather, we must determine whether various federal statutes and regulations affecting nuclear power, although not necessarily implicated in every public liability action, are sufficient to bring the jurisdictional grant within the confines of Article III.
It is difficult to formulate a bright-line test for this inquiry. As with the federal question statute, "determinations about federal jurisdiction require sensitive judgments about congressional intent, judicial power, and the federal system." Merrell Dow Pharmaceuticals Inc. v. Thompson,
A. THE PRECEDENTS
In my opinion, the prior case law does not dictate the applicable standards when Congress has granted federal jurisdiction over cases in which the existence of federal questions is speculative. Although Osborn and Verlinden do not require the invalidation of the jurisdictional grant at issue here, I do not believe they provide a complete framework for deciding the precise issue confronting us.
1. Osborn
As noted in Verlinden, the breadth of Osborn 's holding has been debated. Osborn certainly could have been decided on narrower grounds. The case involved a frontal attack on federal authority by the State of Ohio. Despite the Supreme Court's earlier holding in McCulloch v. Maryland,
This reasoning formed the basis for the holding in Osborn 's companion case, Bank of the United States v. Planters' Bank,
[t]he question forms an original ingredient in every cause. Whether it be, in fact, relied on or not, in the defence, it is still a part of the cause, and may be relied on. The right of the plaintiff to sue, cannot depend on the defence which the defendant may choose to set up. His right to sue is anterior to that defence, and must depend on the state of things when the action is brought.
This reasoning implies a broad scope for the Arising Under clause, under which Congress may confer federal jurisdiction "whenever there exists in the background some federal proposition that might be challenged, despite the remoteness of the likelihood of actual presentation of such a federal question." Textile Workers Union v. Lincoln Mills,
But even if the reasoning in Osborn is extended beyond cases involving federal charters, it does not necessarily require us to sustain Sec. 2210(n)(2). In Osborn, the court emphasized that the Bank's federal charter formed an "original ingredient in every cause" involving the Bank.
2. Verlinden
In Verlinden, the Court likewise stressed the fact that substantive federal issues are present at the outset of every FSIA case. Although such cases will generally proceed entirely on state law grounds, a court must determine that the defendant is not immune before assuming jurisdiction. Unlike in Osborn, these issues are not merely hypothetical, but must be addressed in every case. Therefore, because the existence of substantive federal questions was not merely speculative, the Court found no occasion to examine the breadth of Osborn.
However, this reasoning rests to a large degree on the peculiar way in which Congress chose to draft the FSIA. In non-FSIA cases, sovereign immunity ordinarily is raised as a defense to a plaintiff's cause of action. Unless a defendant chooses to litigate the issue, it will not be raised. There will be numerous cases against sovereign defendants in which immunity is clearly unavailable. Under the FSIA, however, a court must ascertain at the outset whether immunity exists, regardless of whether the parties choose to litigate the issue. See Verlinden,
I do not believe the constitutionality of a jurisdictional statute should depend on such drafting peculiarities. In the FSIA, Congress could have permitted defendants to raise sovereign immunity as a federal defense, rather than requiring the issue to be decided as a jurisdictional prerequisite. If Congress had done so, the federal ingredient would have been no less substantial. Similarly, in cases that would otherwise involve only state law, Congress could always require that some substantive federal defense be addressed at the outset. For example, in public liability actions, it could have required the court to determine that the defendant has no Eleventh Amendment immunity, even if the Eleventh Amendment is implicated in only a small fraction of cases. Article III would have few practical limits if the constitutional inquiry turns solely on whether Congress requires that some federal defense be addressed in every case.
I believe Verlinden must ultimately rest upon more than the statutory requirement that immunity be confronted at the outset of every case. If the immunity issues were of little federal concern, or would be implicated in only a small number of cases, the fact that they must necessarily be addressed should not affect the Article III inquiry. Rather, the Court stressed that "[a]ctions against foreign sovereigns in our courts raise sensitive issues concerning the foreign relations of the United States, and the primacy of federal concerns is evident." Id. at 493,
But even if Verlinden rests upon the particular way in which Congress drafted the FSIA, it would not control here. As I have noted, there are no substantive federal questions present at the outset of every public liability action. Congress has not chosen to require courts to address substantive federal defenses in every case. Rather, we must rely upon the existence of substantive federal issues that will likely, but not necessarily, arise in every case.
B. DISCUSSION
Because the scope of the Arising Under clause is broader than its statutory counterpart, a jurisdictional grant is not unconstitutional merely because a federal question is not apparent from the plaintiff's complaint. Because of the complex involvement of federal law in the wide range of state law cases, it is difficult to determine when Congress has exceeded its authority in providing original federal jurisdiction when federal issues are only speculative. Nevertheless, I believe it is possible to identify factors that should guide the inquiry.
One important factor is the likelihood that substantive federal issues will arise in a particular class of cases. Article III strikes a balance between the legitimate domains of state and federal courts. If a particular jurisdictional grant encompasses only a small proportion of cases in which a federal question will ever be raised, the incursion on state court authority might be considered too large. I would therefore determine whether Congress' grant of jurisdiction bears a substantial relationship to the federal interest in ensuring that a federal court be available to enforce federal law. Although it will not be possible to estimate with mathematical certainty the likelihood that federal questions will arise in a particular class of cases, we can examine the relationship between the scope of the jurisdictional grant and the ultimate rationale for providing original federal jurisdiction.
In this vein, Congress has alternatives to providing original federal jurisdiction when federal questions are not directly implicated in the plaintiff's cause of action. In addition to federal appellate review, Congress may provide for federal removal jurisdiction upon the raising of a federal question. The dissent in Osborn felt that these were the only permissible methods of conferring federal jurisdiction when the existence of federal questions is speculative. See
Osborn establishes that Congress is not necessarily relegated to providing appellate or removal jurisdiction when the existence of federal questions may be speculative. Nevertheless, if there are any limits on the ability of Congress to confer original jurisdiction over such cases, the availability of this option is a factor to be considered. In Osborn, the Court rejected appellate jurisdiction as an alternative, because a claimant under federal law should not be relegated to "the insecure remedy of an appeal, upon an insulated point, after it has received that shape which may be given to it by another tribunal, into which he is forced against his will."
But Congress may have other valid reasons for desiring that federal courts assume original, rather than appellate or removal, jurisdiction. For example, if potential federal issues are intertwined with the merits of the case and cannot be discerned at an early stage of litigation, appellate or removal jurisdiction might not adequately ensure that a federal court could fully adjudicate all aspects of federal law. Conversely, if federal issues are collateral to the merits, or easily discerned at the outset of the case, the need for original jurisdiction would be lessened. The existence or lack of a valid preference for original jurisdiction should be an important factor when Congress has granted such jurisdiction over cases that do not satisfy the well-pleaded complaint rule.
Guided by these principles, I would examine the ways in which federal law could be implicated in public liability actions. The Amendments provide the options of original federal jurisdiction and immediate removal for almost all claims asserting "any legal liability" on account of a nuclear incident. This definition apparently encompasses any state law cause of action, but the vast majority would presumably sound in tort. In general, there are three important ways in which federal issues could be implicated in these actions. First, a federal statute or regulation might be relevant in determining the applicable standard of care. Second, in the event of an extraordinary nuclear occurrence, federally indemnified defendants may be required to waive certain defenses. Third, various federal statutes or regulations affect a plaintiff's amount of recovery in certain cases, as well as the allocation of costs among defendants and the federal government.
1. Federal Standard of Care
The majority relies primarily on the pre-emption of state tort law duties by federal regulations. In the cases before us, at least some plaintiffs have alleged negligence per se predicated on defendants' failure to follow applicable federal safety regulations. Similar claims will doubtless arise in many public liability actions. Nuclear power is subject to pervasive federal regulation, and it is likely that a tort suit arising out of a nuclear incident will touch on some issue governed by federal standards. Absent an express federal cause of action for the violation of federal safety standards, incorporation of those standards into state tort claims would probably not satisfy the well-pleaded complaint rule. See Merrell Dow Pharmaceuticals Inc. v. Thompson,
As I see it, the difficulty here is that Sec. 2210(n)(2) encompasses more than just actions incorporating federal standards of care. Public liability actions include virtually all claims based upon any legal liability arising out of a nuclear incident. Conceivably, some actions might not sound in tort at all, and others could implicate areas of activity not explicitly governed by federal standards. See Silkwood v. Kerr-McGee Corp.,
Moreover, it is not clear to me that Congress has precluded state law tort suits predicated on standards of care that do not conform to federal regulation. As the majority notes, in Pacific Gas & Electric Co. v. State Energy Resources Conservation and Development Commission,
If state tort law may hold a nuclear plant operator strictly liable, or establish some other standard of care that does not conform to federal regulation, the federal law quotient in public liability actions would be decreased. As noted in the majority opinion, notwithstanding Silkwood, at least two district courts have found that the Price-Anderson Act pre-empts state tort suits that do not adopt federal regulations as the standard of care. See Hennessy v. Commonwealth Edison Co.,
Unlike the majority, I would not decide these issues here. Regardless of whether state tort law may impose a standard of care that differs from federal norms, that law will often incorporate federal standards, and therefore a large number of public liability actions will rest upon alleged violations of federal regulations. In other cases, defendants will raise these issues in defense. Because federal safety regulations will play an integral role in a large proportion of such actions, Congress could validly desire that a federal court be open to interpret these regulations when they become an issue.
But I would not predicate the constitutionality of Sec. 2210(n)(2) solely on the likelihood that federal safety regulations will play a role in public liability actions. If Congress wishes to ensure that federal courts decide these important issues, it need not grant broad original jurisdiction over all state law claims. Congress could have provided original jurisdiction where the plaintiff's cause of action directly incorporates a violation of federal law, and removal jurisdiction where the defendant raises a federal regulatory issue in defense. Although there might be some disruption of the proceedings in the latter instance, it is likely that such federal defenses could be raised early enough to avoid undue hardship. As I note below, though, I believe Congress had other valid reasons for providing original jurisdiction here.
2. Waivers of Defenses
Under Sec. 2210(n)(1), Congress provided that in the event of certain extraordinary nuclear occurrences ("ENOs"), the Nuclear Regulatory Commission or the Secretary of Energy may require potential defendants to waive various state law defenses. The effect of these waivers would be to create a uniform federal strict liability standard for covered accidents. See Duke Power Co. v. Carolina Environmental Study Group, Inc.,
It appears likely that Congress could provide original federal jurisdiction over those nuclear incidents to which the Sec. 2210(n)(1) waivers would apply. The waivers essentially define a federal cause of action for certain covered accidents. But there are problems with relying on these provisions alone to sustain Sec. 2210(n)(2). First, Sec. 2210(n)(1) applies only to ENOs, while Sec. 2210(n)(2) applies to all nuclear incidents. The Nuclear Regulatory Commission has conclusively determined that the TMI incident was not an ENO, and that decision is not subject to judicial review. See id. Sec. 2014(j). Consequently, Sec. 2210(n)(1) has no application to the cases before us. Although we are met with a facial challenge, and need not rely solely on factors applicable to this case, I would not place much emphasis on Sec. 2210(n)(1) in sustaining Sec. 2210(n)(2). Not only does Sec. 2210(n)(1) apply only to a limited class of public liability actions, but that class of cases can be ascertained by reference to a single administrative pronouncement. See 10 C.F.R. Sec. 140.83 (1991) (ENO determination ordinarily made within 90 days of incident). Thus, if Sec. 2210(n)(1) were the sole predicate for federal jurisdiction, Congress could have easily narrowed the scope of the grant to include only cases in which it might be implicated.
Prior to the Amendments, Congress provided original jurisdiction only for ENOs. Given the effect of Sec. 2210(n)(1) on liability for such occurrences, this earlier version of Sec. 2210(n)(2) would certainly stand on stronger constitutional ground. But the application of Sec. 2210(n)(1) would be speculative even in those instances. The waivers apply only in certain enumerated cases. See
3. Financial Protection Scheme, Indemnification Provisions, and Liability Limitations
The central focus of the Price-Anderson Act is its comprehensive scheme for insuring and indemnifying nuclear power plant licensees and contractors, and for limiting and apportioning liability arising out of nuclear incidents. These provisions were enacted primarily in response to the nuclear power industry's concerns that potential liability would hinder the development of nuclear power. See generally Duke Power Co. v. Carolina Environmental Study Group, Inc.,
a. Statutory Scheme
The Nuclear Regulatory Commission is authorized to require power plant licensees and contractors to carry a certain amount of insurance or other forms of "financial protection."
The Act places limits on the aggregate liability for a single nuclear incident. Id. Sec. 2210(e). For larger facilities and licensees required to carry more than $560,000,000 in insurance, the limit is the amount of required insurance. For larger facilities, the limit also includes a surcharge to cover legal fees in certain instances. For other licensees, the limit is $560,000,000, except that it is somewhat lower when the required insurance is less than $60,000,000. Other limits are applicable to contractors specially covered under Sec. 2210(d), and incidents occurring outside the United States. For nuclear incidents occurring after August 20, 1988, the Amendments also prohibit the awarding of punitive damages, and immunize certain lessors. Id. Sec. 2210(s), (r) (for effective date, see Price-Anderson Amendments Act of 1988, Pub.L. 100-408, Sec. 20(a), 102 Stat. 1066, 1084). The Act ensures aggregate recovery by plaintiffs up to the limits set in Sec. 2210(e). A certain amount of liability will be covered by the required insurance, and the government must indemnify the defendant for the balance.
If the limits are exceeded, special provisions apply. Upon the motion of any interested party, the federal district court in the district where the nuclear incident occurred must determine whether the aggregate liability may exceed the limits provided in the Act. Id. Sec. 2210(o )(1). If the court determines that the limits may be exceeded, it must formulate a distribution plan to "insure the most equitable allocation of available funds." Id. Sec. 2210(o )(1)(C). This plan must include allocations for latent injury claims which may not be discovered until a later time. Id. No payment may exceed 15% of the liability limits without prior court approval. Id. Sec. 2210(o )(1)(A). Payment of legal fees is also subject to restrictions. Id. Sec. 2210(o )(2). If the liability limits are exceeded, Congress is directed to provide full and prompt compensation for the unsatisfied liability. Id. Sec. 2210(e)(2), Sec. 2210(i).
b. Financial Protection and Indemnification Provisions
An important feature of the Price-Anderson Act is its "omnibus coverage" scheme. See, e.g., House Report, Part 1 at 5. In return for limiting defendants' liability in certain instances, the Act ensures compensation up to those limits from either required insurance or government indemnification. See Duke Power,
But the financial protection and indemnification scheme does not affect the defendant's liability under state law. Rather, it ensures that any judgment can be satisfied once it has been entered. Thus, these provisions are probably not "original ingredients" of the plaintiffs' cause of action.5 Article III would likely permit Congress to provide original federal jurisdiction over actions requiring government indemnification, if only because the United States would become a party. When the government believes that it will be required to make indemnity payments in a particular action, it is authorized to take over that action and approve any settlement. Id. Sec. 2210(h).
But government indemnification will not be necessary in every public liability action, as it applies only to liability not covered by required insurance. As for the financial protection provisions, federal questions involving them may arise at various stages of a public liability action. All insurance policies must be approved by the Commission and conform to its regulations. See 10 C.F.R. Secs. 140.10-.91 (1991). Consequently, any questions regarding the conformity of a policy to federal regulations would involve substantive issues of federal law. The Commission must approve every policy, and has published detailed sample forms. See id. Secs. 140.15(d), 140.91. But every interpretation of the terms of individual policies would not necessarily involve federal questions.
The omnibus coverage scheme substantially increases the likelihood that federal questions will arise in public liability actions. No claim can be satisfied without reference to this comprehensive scheme. The remaining question is whether Congress had a valid reason for granting original federal jurisdiction over all cases that might implicate these issues, rather than creating some other scheme under which purely state law cases could remain in state court. Federal insurance and indemnification questions are largely collateral to the merits of the plaintiff's cause of action, affecting only the source of funds from which a judgment or settlement could be satisfied. Because of this fact, Congress could have authorized federal declaratory judgment suits in which defendants, insurance companies, and the government could resolve whatever federal law disputes might arise.
The prospect of federal indemnification might create a valid reason for conferring original federal jurisdiction, because it is not always possible to know at the outset of the case whether the government will be required to indemnify a claim. Factual development will often be necessary before it can be determined that a particular accident is not covered by insurance, or that the limits of financial protection will be exceeded. By this time, it may be somewhat onerous to remove a case to federal court. But this argument could be made of almost every grant that raises the possibility that a federal question might be implicated in some cases. The government is authorized to intervene in public liability actions as soon as it believes it will be required to indemnify a party. Congress could have authorized removal in those instances, as it has under the federal officer removal statute. With respect to that statute, the Court has indicated that any other scheme would be unconstitutional. See Mesa v. California,
c. Liability Limitations
The liability limitations, including the ban on punitive damages, arguably constitute "original ingredients" under Osborn, assuming its broad reasoning is extended past its specific domain.6 The right to recover damages is generally considered an element of any tort claim. As the Supreme Court has recognized, the Act's liability cap abrogates common law rights of recovery. See Duke Power,
I do not believe that the liability limitations are "original ingredients" because they are not necessarily implicated in every case. If the limits are not exceeded and the plaintiff would not otherwise have sought punitive damages, the federal limitations would not be implicated. The Price-Anderson Act does not replace state law remedies in all cases. Rather, it only limits them in certain instances. The application of the liability limitations is therefore speculative, and they do not form "original ingredients" in the Osborn sense. Unlike the factors noted in Osborn, they do not form "unexpressed" elements in every claim.
Nevertheless, Congress was clearly concerned with the prospect that the liability limits might be exceeded. The federal questions discussed above, although important considerations, do not completely explain why Congress amended Sec. 2210(n)(2) to provide for original federal jurisdiction over all nuclear incidents. A central concern was that "consolidation of claims in a single court would be essential for the orderly distribution of the limited funds available and to assure reservation of sufficient funds for victims whose injuries may not become manifest until long after the accident." House Report, Part 1 at 18. Congress felt that such concerns were present even when an incident was not serious enough to qualify as an ENO. Id.
When it appears that the liability limits may be exceeded in a particular case, a comprehensive federal distribution scheme is put in place. See
As with other substantive federal issues that might arise in public liability actions, the application of these provisions is speculative. The question remains, then, whether Congress had other options that would have allowed state courts to retain jurisdiction over cases involving only state law issues. Congress could have authorized removal of pending cases upon the determination that the liability limits may be exceeded. Similarly, Congress could have retained the pre-Amendments scheme, under which a federal court was authorized to formulate a distribution plan that would also apply to cases pending in state courts. The federal distribution plan is expressly made effective throughout the United States. Id. Sec. 2210(o )(1)(C). This provision was retained for those cases that remain in state court under current law. Consequently, Congress could have ensured that federal law issues be determined by a federal court without also authorizing federal jurisdiction over state law claims that will never involve those issues.
But I believe the prospect that the limits might be exceeded establishes a valid reason for providing the option of original federal jurisdiction. Unlike the ENO determination, the Sec. 2210(o )(1) determination cannot necessarily be made soon after the nuclear incident. The full scope of potential liability, including latent liability, may not be known until a later time. By this time, Congress' concern for the "equitable allocation of available funds" may have been compromised. Initial consolidation of cases would help avoid the premature dissipation of the insurance fund before a Sec. 2210(o )(1) determination can be made. Even before such a determination, the federal courts are authorized to create a "special caseload management" panel if cases arising out of the nuclear incident will have an unusual impact on the court's work. Id. Sec. 2210(n)(3). The panel is specifically authorized to establish priorities for the equitable distribution of claims. If all cases must remain in state court pending a Sec. 2210(o )(1) determination, the federal distribution scheme may be rendered less effective.
The case for original jurisdiction is strengthened by the fact unlike insurance and indemnification issues, federal issues regarding the distribution of limited funds are not completely collateral to the litigation over the merits of the plaintiffs' case. In addition to discerning the facts necessary to make the Sec. 2210(o )(1) determination, a court must examine the conduct of the litigants to determine whether legal costs may be awarded from the insurance fund.
Congress has admittedly decreased the effectiveness of its own scheme by providing for concurrent jurisdiction. If only some public liability actions are removed to federal court, a concurrent state court adjudication might compromise Congress' desire for the equitable distribution of limited funds. There is no provision for rescinding judgments that have already been satisfied, and a federal court cannot manage the conduct of ongoing state court litigation as it can for federal actions. In addition, a state court adjudication on a question of state or federal law would most likely be binding in a subsequent federal case involving the same defendant. See
IV.
In the current era, Article III imposes few practical limits on the ability of Congress to confer federal jurisdiction. Just as the Commerce Clause and the Tenth Amendment now provide only nominal checks on Congress' ability to legislate substantively, Article III is a relatively minor impediment in the face of pervasive federal regulation. It is not difficult for Congress to enact some substantive law that would support federal jurisdiction over a particular class of cases. Nevertheless, it is still important to recognize constitutional limits when Congress grants original federal jurisdiction over state law claims. Unless Article III is broad enough to encompass protective jurisdiction, a jurisdictional grant must rest on more than a belief that a federal forum would be fairer or more efficient. There must be a sufficient substantive federal law component, and a reason why original federal jurisdiction is important to ensure federal court determinations of federal laws that may be implicated at some point in the litigation.
I would sustain Sec. 2210(n)(2) based upon the substantial likelihood that public liability actions will involve federal questions regarding standards of care, insurance, and indemnification, combined with the need to protect a federal court's ability to formulate and administer a plan for distributing funds if the liability limits are exceeded. Although the application of federal law may be somewhat speculative, Congress had valid reasons for providing the option of original federal jurisdiction. The Price-Anderson Act is a comprehensive regulatory provision directed at ensuring a limited level of recovery for the victims of nuclear incidents, and equitably distributing compensation should those limits be exceeded. Verlinden holds that Article III is not contravened merely because federal questions are not apparent from the plaintiffs' complaint, and upheld a statute where immunity defenses constituted the only federal ingredient. I believe the rationale for permitting original federal jurisdiction is at least as strong here as it was in Verlinden.
Notes
This section provides, in pertinent part, that, "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."
The Price-Anderson Act was enacted in 1957 as an amendment to the Atomic Energy Act. Recognizing a substantial federal interest in regulating the safety aspects of the nuclear power industry, Congress sought to encourage the involvement of the private sector in the development of nuclear power by limiting the liability which might be associated with a nuclear incident. In order to encourage private participation in the nuclear energy industry and to ensure that those who might be injured would be adequately compensated, Congress established a system of private insurance and government indemnity
Under the Act, nuclear facilities operators were required to purchase a specified amount of insurance from private carriers. Provision was made for government indemnification above the insurance amounts to an established aggregate limit on liability. See
"Public liability" had been defined in the Price-Anderson Act prior to the Amendments as "any legal liability arising out of or resulting from a nuclear incident or precautionary evaluation."
The term "nuclear incident" means any occurrence, including an extraordinary nuclear occurrence, within the United States causing, within or outside the United States, bodily injury, sickness, disease, or death, or loss of or damage to property, or loss of use of property, arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of source, special nuclear, or byproduct material....
The defendants have argued that the
This argument appears to have its origins in our decision in Pacor, Inc. v. Higgins,
The narrow holding in Pacor was read broadly by the Court of Appeals for the Eleventh Circuit in In re Federal Sav. and Loan Ins. Corp.,
The defendants invite us to apply the rationale of In re FSLIC and to hold that
Citing Rice, at least one other court has declined to follow the ruling in In re FSLIC. See Federal Savings and Loan Ass'n v. Frumenti Dev. Corp.,
The history of what is now
This section was amended in 1988, Pub.L. No. 100-702, Title X, Sec. 1016(c), 102 Stat. 4670, to provide in pertinent part that, "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." It is the amended provision which controls here
For similar statements of the purpose underlying the
The Amendments Act was, at least in part, a response to our decisions in Stibitz and Kiick. See S.Rep. No. 218, 100th Cong., 2d Sess. 13, reprinted in 1988 U.S.Code Cong. & Admin.News 1424, 1476, 1488 (referencing Stibitz, the Committee on Environment and Public Works noted that "the bill expands existing law to allow for the consolidation of claims arising out of any nuclear incident in federal court"); and H.R.Rep. No. 104, 1st Sess. pt. 1, 18 (noting our holding that the district court did not have jurisdiction over claims arising from the Three Mile Island incident and referring to language in H.R. 1414 in which Congress expressly stated that any suit asserting public liability shall be deemed to be a cause of action arising under the Price-Anderson Act). Thus, in
In recognizing that the policy concerns underlying
We are not swayed from this view by the plaintiffs' argument that because Congress did not set forth a specific exception to
Thus we need not reach the question of whether appeal would have been proper under
The federal statute which authorizes district courts to hear cases involving federal questions also incorporates an "arising under" requirement. See
(a) A civil action or criminal prosecution commenced in a State court against any of the following persons may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending: (1) Any officer of the United States ... for any act under color of such office....
The Supreme Court has, in the past, "rejected congressional attempts to confer jurisdiction on federal courts simply by enacting jurisdictional statutes." Verlinden,
The district court found that the Amendments Act was deficient under the holdings of Verlinden and Osborn:
[T]he Act does not satisfy the standard set forth in Osborn; here, "the right ... set up by the party [will not] be defeated by one construction of the ... law ... and sustained by the opposite construction." Osborn, 22 U.S. (9 Wheat) at 822. In Osborn, ... [the federal Bank] chartering act ... provided the cause of action and that cause of action could be defeated depending upon construction of the federal law. Similarly, in Verlinden, ... [i]n cases brought pursuant to ... [the Foreign Sovereign Immunities Act], if a court determined that none of the exceptions to sovereign immunity embodied in the federal standard were applicable, "the plaintiff [would] be barred from raising his claim in any court in the United States." Verlinden,
Id. (citations and footnote omitted).
The background of the Price-Anderson Act, and consequently of the Amendments Act, is set forth in Duke Power,
An extraordinary nuclear occurrence was defined as "any event causing a discharge or dispersal of source, special nuclear, or byproduct material from its intended place of confinement in amounts offsite, or causing radiation levels offsite, which the ... Commission ... determines to be substantial, and which the ... Commission determines has resulted or probably will result in substantial damages to persons offsite or property offsite...."
Prior to the Amendments Act, the grant of federal jurisdiction and rights of removal were available only in actions resulting from an extraordinary nuclear occurrence. The decision to expand the jurisdictional grant was based upon the fact that "[t]he experience with claims following the TMI accident demonstrate[d] the advantages of the ability to consolidate claims after the nuclear incident. Attorneys representing both plaintiffs and defendants in the TMI litigation testified ... that the ability to consolidate claims in federal court would greatly benefit the process for determining compensation for claimants.... The availability of the provisions for consolidation of claims in the event of any nuclear incident ... would avoid the inefficiencies resulting from duplicative determinations of similar issues in multiple jurisdictions that may occur in the absence of consolidation." S.Rep. No. 218, 100th Cong., 2d Sess. 13, reprinted in 1988 U.S.Code Cong. & Admin.News 1476, 1488
Public liability, a concept unchanged by the Amendments Act, was defined in the Price Anderson Act as "any legal liability arising out of or resulting from a nuclear incident or precautionary evacuation...."
In fact, while the pre-Amendments Act cases conclude that Congress did not intend to create a federal cause of action, none of these cases so much as suggests that Congress lacked the power to do so. In Kiick, we concluded that had Congress intended to create a federal cause of action applicable to nuclear incidents, the statutory grant of jurisdiction for extraordinary nuclear occurrences would have been superfluous. "This statutory grant of jurisdiction [pursuant to pre-amendment act
The two district court cases on point hold that federal law does preempt state law. See O'Conner v. Commonwealth Edison Co.,
The result is the same regardless of whether the state adopts stricter or more lenient safety standards. If stricter safety standards are imposed, the state will create a disincentive to nuclear power that is in conflict with federal law. If more lenient standards are imposed, the state will undercut federal safety efforts
The defendants have proposed an alternative basis for Article III analysis premised on the theory of "protective jurisdiction." "Under this theory, Congress may grant federal courts the power to hear nondiversity cases turning on state law as long as those cases bear some relation to a federal interest or to Congress' substantive lawmaking authority under Article I." Over-Protective Jurisdiction supra, 102 Harv.L.Rev. at 1953. Because we believe that the issue regarding constitutionality of the Amendments Act can be resolved without resort to this theory, we do not address it here
Protective jurisdiction exists largely in the academic literature. See, e.g., Goldberg-Ambrose, The Protective Jurisdiction of the Federal Courts, 30 UCLA L.Rev. 542 (1983); Mishkin, The Federal "Question" in the District Courts, 53 Colum.L.Rev. 157 (1953); Wechsler, Federal Jurisdiction and the Revision of the Judicial Code, 13 Law & Contemp.Probs. 216 (1948); Note, Over-Protective Jurisdiction?: A State Sovereignty Theory of Federal Questions, 102 Harv.L.Rev.1948 (1989); Note, The Theory of Protective Jurisdiction, 57 N.Y.U.L.Rev. 933 (1982); Note, Protective Jurisdiction and Adoption as Alternative Techniques for Conferring Jurisdiction on Federal Courts in Consumer Class Actions, 69 Mich.L.Rev. 710 (1971). Although it has been argued that protective jurisdiction was the actual basis for several Supreme Court decisions, the Court recently remarked that "[w]e have, in the past, not found the need to adopt a theory of 'protective jurisdiction' to support Art. III 'arising under' jurisdiction...." Mesa v. California,
Given the strong federal interest in nuclear power, the pervasiveness of federal regulation in the area, and the efficiency gains of consolidating litigation, it is likely that Sec. 2210(n)(2) could be sustained under some or all protective jurisdiction theories. It appears that Congress enacted that provision in part because of the advantages of consolidating mass tort litigation in a single forum, regardless of the substantive federal issues involved. See, e.g., S.Rep. No. 218, 100th Cong., 2d Sess. 13, reprinted in 1988 U.S.Code Cong. & Admin.News 1476, 1488 ("[C]onsolidation ... would avoid the inefficiencies resulting from duplicative determinations of similar issues in multiple jurisdictions...."); H.R.Rep. No. 104, Part 1, 100th Cong., 1st Sess. 18 (1987) ("These measures stem from the desire of Congress for equitable and uniform treatment of victims of a nuclear accident and the need to coordinate all phases of litigation that could result from a large nuclear accident."). Protective jurisdiction is subject to criticism based on its lack of textual foundation, and the difficulty in developing limiting principles. See Textile Workers Union v. Lincoln Mills,
The constitutionality of these particular statutes have never been challenged, and they might be sustained without referring to their incorporational provisions. The Lands Act may fall within the Admiralty clause of Article III, which does not require an independent federal law component. See The Propeller Genesee Chief v. Fitzhugh, 12 How. (53 U.S.) 443, 451-53,
In this respect, it should be noted that Congress has established as a matter of federal law what amounts to strict liability for many "extraordinary nuclear occurrences." For those accidents,
The statutory definition of "persons indemnified" includes "any ... person who may be liable for public liability."
It appears that the omnibus coverage scheme was designed in part to lessen the plaintiff's burden to identify the defendant whose actions caused the injury. See House Report, Part 3 at 16 ("[R]egardless of whether a commercial power plant accident was caused by actions of the licensee, the plant manufacturer, or any other party, liability would be 'channelled' to the licensee and payment would be obtained from the compensation pool funded by utilities. This is another significant departure from normal tort law precepts, and is designed to ease the victim's legal burden by obviating the need to identify the exact party at fault in order to recover damages."); see also id., Part 1 at 5. On its face, the Act does not alter state law liability principles, but only assures compensation once liability has been established. However, because every victim is assured of compensation, Congress apparently intended to abrogate any requirement that the victim identify the actual tortfeasor. A court might still have to decide whether compensation will come from an insurance fund or from government indemnification, but the plaintiff would not have to identify a particular defendant. Lessening the plaintiff's burden in this manner would probably not create an original federal ingredient because this feature would not necessarily apply to every case
The ban on punitive damages applies only to nuclear incidents occurring after August 20, 1988, which does not include this case. As I have noted, however, plaintiffs have made a facial challenge to Sec. 2210(n)(2), and we are therefore not necessarily precluded from considering factors applicable only to future cases. But I would not consider the ban on punitive damages to be integral to the validity of Sec. 2210(n)(2). Consequently, even if I were to construe plaintiffs' challenge as limited to the retroactive removal provisions of Sec. 2210(n)(2), I would find the statute constitutional. It should also be noted that punitive damages remain available when the government is not obligated to make payments under an indemnification agreement. See
Compare Goldberg-Ambrose, The Protective Jurisdiction of the Federal Courts, 30 UCLA L.Rev. 542, 557-58 (1983) (When federal law controls the measure of damages, "the rights and obligations of the parties are defined at least in part by federal law, and a constitutional basis for federal jurisdiction exists without resort to an exotic theory of protective jurisdiction.") with Note, The Theory of Protective Jurisdiction, 57 N.Y.U.L.Rev. 933, 1012 (1982) (Limitation on punitive damages "is a regulation of the remedial power of the courts. All of the federal courts' remedial powers ... are creatures of federal law; they do not thereby raise federal questions."). In Ives v. W.T. Grant Co.,