Given this blog’s history of reporting on the status of the Convention on Supplementary Compensation (CSC), you would be forgiven for expecting this post to be about new countries joining the CSC (Japan, Canada, others). Or the impact of the CSC on nuclear liability in India. Or DOE’s CSC rulemaking, which is currently underway. This post is about none of those developments. Instead, I wanted to highlight what is, to the best of my knowledge, the first instance of the CSC being used as a defense in a U.S. court.
U.S. Navy personnel, their families, and a proposed class of more than 70,000 persons filed a tort claim in U.S. District Court for the Southern District of California alleging exposures to radiation from releases at the Fukushima nuclear power plant in Japan. The plaintiffs allege that they were exposed in Japanese territorial waters while carrying out an aid mission following the March 2011 earthquake and tsunami. Although plaintiffs initially brought the suit against Tokyo Electric Power Company (TEPCO), the operator of the Fukushima reactors, they recently alleged for the first time that General Electric (GE) also is liable on the theory that GE defectively designed and manufactured the reactors at Fukushima.
In its response, GE relied, in part, on the fact that the CSC becomes effective on April 15, 2015 (90 days after its ratification by Japan). GE argues that the CSC governs the plaintiffs’ claims and that the CSC confers exclusive jurisdiction on the courts of Japan for claims arising from a nuclear incident in Japan. According to GE, the district court loses jurisdiction on the CSC’s effective date.
GE also argues that Japan’s Act on Compensation for Nuclear Damage applies under California choice-of-law principles and that the Act requires plaintiffs’ claims to be brought only against TEPCO, which is exclusively liable for damages from a nuclear incident in Japan. This highlights an interesting feature of the CSC. Consistent with the principles in the U.S.’s Price-Anderson Act and Japan’s Act on Compensation for Nuclear Damage (and, for that matter, other international nuclear liability regimes), the CSC channels the responsibility for public damages to the operator of the facility. Under Price-Anderson this is accomplished by “economic channeling” — meaning that, while legal claims may be brought against vendors, the operator carries insurance that covers vendors. However, under Japan’s Act on Compensation for Nuclear Damage, the operator is exclusively liable and claims for damages may only be brought against it (“legal channeling”). If the court agrees, GE would be dismissed from the case entirely — an outcome that would turn on the provisions of the CSC.
Cooper v. TEPCO may therefore turn out to be an important test case for the CSC and its goal of creating a comprehensive and integrated global nuclear liability regime with clear expectations for allocation of liability and jurisdiction over claims.