Rocky Flats Suit Back to Square One in 22-Year Dispute

Property owners seeking damages for radioactive contamination from Colorado’s Rocky Flats nuclear weapons plant have to start over, after the U.S. Supreme Court refused to consider reinstating a $926 million judgment in their 22-year-old lawsuit.

The high court today, without comment, rejected the landowners’ challenge to a federal appeals court ruling, which threw out a jury’s verdict and sent the case back for a new trial.

The Denver-based 10th U.S. Circuit Court of Appeals said the trial judge mistakenly ruled that owners of more than 15,000 nearby parcels only had to show that plutonium from the plant was found on their land and hurt property values. A federal law governing liability from nuclear incidents requires additional proof that leaks of radioactive material actually damaged property, hindered its use or caused bodily injuries, the appeals court ruled.

“A landowner whose property is devalued because of plutonium contamination has suffered both an invasion of his property and genuine, immediate economic harm,” the property holders said in their unsuccessful request for Supreme Court review.

The class-action lawsuit was filed in January 1990 against Rockwell International Corp. and Dow Chemical Co. (DOW), which operated the facility at different times under contracts with the federal government. Under federal law, the government indemnifies operators of nuclear facilities like Rocky Flats for damages exceeding the limits of liability insurance policies.

Single Atom

Rockwell and Dow said the landowners are pushing for legal rules that would allow damages for “the mere presence of a single radioactive atom,” without proving any actual damage beyond concern about potential risks and the effect of “alarmist rhetoric” on property values. Testing showed “very, very small” plutonium exposures, “indistinguishable” from amounts found worldwide as a result of nuclear weapons tests, they said.

The Obama administration backed the companies, saying federal law permits suits for nuclear-related damages only if contamination is serious enough to at least keep owners from typical uses of their property.

The law requires “something more than de minimis contamination that lowers property values,” the Justice Department brief said. “Had Congress meant to make contamination of property -- without accompanying physical damage or loss of use -- a sufficient basis” for a lawsuit “it would have included contamination in the list of actionable harms.”

Federal Law

A trial judge had ruled that Colorado laws governed the jury’s consideration of harm from radioactive contamination and didn’t require proof of damage. The appeals court, agreeing with the companies, said, while standards under state law may be considered, they come into play only after the landowners satisfy minimum thresholds specified in a federal law governing lawsuits about nuclear incidents.

The lawsuit has dragged on for two decades after the facility northwest of Denver was closed in 1992. Manufacturing work was halted in 1989 after federal agents raided the plant in an investigation of Rockwell’s hazardous-waste storage and disposal practices. After a cleanup, the area is now a wildlife refuge.

In 1992, Rockwell pleaded guilty to criminal environmental violations and agreed to pay an $18.5 million fine. Rockwell sold its aerospace and defense businesses to Boeing Co. (BA) in 1996.

The lawsuit by owners of properties east of Rocky Flats alleges that plutonium was illegally released into the air and water and contaminated their land. After 16 years of legal preliminaries, a jury sided with the landowners in January 2006.

The group was awarded $177 million of compensatory damages and $200 million of punitive damages. With interest calculated back to 1990, the total came to more than $926 million.

The case is Cook v. Rockwell International Corp., 10-1377.

To contact the reporter on this story: Bob Drummond in Washington at bdrummond@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.