DUKE POWER CO. v. CAROLINA ENV. STUDY GROUP
438 U.S. 59 (1978)
DUKE POWER CO.
CAROLINA ENVIRONMENTAL STUDY GROUP, INC., ET AL.
Supreme Court of United States.
Argued March 20, 1978.
Decided June 26, 1978.*
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA.
Steve C. Griffith, Jr., argued the cause for appellant in No. 77-262. With him on the briefs were Joseph B. Knotts, Jr., and William Larry Porter. Solicitor General McCree argued the cause for appellants in No. 77-375. With him on the briefs were Assistant Attorney General Babcock, Deputy Solicitor General Jones, Harriet S. Shapiro, Robert E. Kopp, Thomas G. Wilson, Jerome Nelson, and Stephen F. Eilperin.
William B. Schultz argued the cause for appellees in both cases. With him on the brief were Alan B. Morrison, George Daly, Norman B. Smith, and Jonathan R. Harkavy.†
William J. Brown, Attorney General, and E. Dennis Murchnicki, Assistant Attorney General, filed a brief for the State of Ohio as amicus curiae urging affirmance.
Briefs of amici curiae were filed by Bronson C. La Follette, Attorney General of Wisconsin, and Patrick Walsh, Assistant Attorney General, Eldon G. Kaul, Assistant Attorney General of Minnesota, and Carl Valore, Jr., for the State of Wisconsin et al.; and by Herbert H. Brown, Gilbert C. Miller, and Lawrence Coe Lanpher for the Resources Agency, State of California.
MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
These appeals present the question of whether Congress may, consistent with the Constitution, impose a limitation on IA
liability for nuclear accidents resulting from the operation of private nuclear power plants licensed by the Federal Government.
When Congress passed the Atomic Energy Act of 1946, it contemplated that the development of nuclear power would be a Government monopoly. See Act of Aug. 1, 1946, ch. 724, 60 Stat. 755. Within a decade, however, Congress concluded that the national interest would be best served if the Government encouraged the private sector to become involved in the development of atomic energy for peaceful purposes under a program of federal regulation and licensing. See H. R. Rep. No. 2181, 83d Cong., 2d Sess., 1-11 (1954). The Atomic Energy Act of 1954, Act of Aug. 30, 1954, ch. 1073, 68 Stat. 919, as amended, 42 U. S. C. §§ 2011-2281 (1970 ed. and Supp. V), implemented this policy decision, providing for licensing of private construction, ownership, and operation of commercial nuclear power reactors for energy production under strict supervision by the Atomic Energy Commission (AEC).1 See Power Reactor Development Co. v. Electrical Workers,367 U.S. 396 (1961), rev'g and remanding 108 U. S. App. D. C. 97, 280 F.2d 645 (1960). Private industry responded to the Atomic Energy Act of 1954 with the development of an experimental power plant constructed under the auspices of a consortium of interested companies. It soon became apparent that profits from the private exploitation of atomic energy were uncertain and the accompanying risks substantial. See Green, Nuclear Power:
Risk, Liability, and Indemnity, 71 Mich. L. Rev. 479-481 (1973) (Green). Although the AEC offered incentives to encourage investment, there remained in the path of the private nuclear power industry various problems—the risk of potentially vast liability in the event of a nuclear accident of a sizable magnitude being the major obstacle. Notwithstanding comprehensive testing and study, the uniqueness of this form of energy production made it impossible totally to rule out the risk of a major nuclear accident resulting in extensive damage. Private industry and the AEC were confident that such a disaster would not occur, but the very uniqueness of nuclear power meant that the possibility remained, and the potential liability dwarfed the ability of the industry and private insurance companies to absorb the risk. See Hearings before the Joint Committee on Atomic Energy on Government Indemnity for Private Licensees and AEC Contractors Against Reactor Hazards, 84th Cong., 2d Sess., 122-124 (1956). Thus, while repeatedly stressing that the risk of a major nuclear accident was extremely remote, spokesmen for the private sector informed Congress that they would be forced to withdraw from the field if their liability were not limited by appropriate legislation. Id., at 9, 109-110, 115, 120, 136-137, 148, 181, 195, and 240.
Congress responded in 1957 by passing the Price-Anderson Act, 71 Stat, 576, 42 U. S. C. § 2210 (1970 ed. and Supp. V). The Act had the dual purpose of "protect[ing] the public and . . . encourag[ing] the development of the atomic energy industry." 42 U. S. C. § 2012 (i). In its original form, the Act limited the aggregate liability for a single nuclear incident2 to $500 million plus the amount of liability insurance
available on the private market—some $60 million in 1957. The nuclear industry was required to purchase the maximum available amount of privately underwritten public liability insurance, and the Act provided that if damages from a nuclear disaster exceeded the amount of that private insurance coverage, the Federal Government would indemnify the licensee and other "persons indemnified"3 in an amount not to exceed $500 million. Thus, the actual ceiling on liability was the amount of private insurance coverage plus the Government's indemnification obligation which totaled $560 million.