Silkwood v. Kerr-McGee Corp. - brief

Case brief: template

Case name:	Silkwood v. Kerr-McGee Corp.
Court:	UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
Citation; Date:	769 F.2d 1451; 1985

PROCEDURAL HISTORY
Trial court:		Appeal court (for appeal cases only):
Plaintiff:	Silkwood	Appellant:
Defendant:		Respondent:	Silkwood

Facts of the case:
This case is before our court on remand from the Supreme Court of the United States. Defendants Kerr-McGee Corporation and Kerr-McGee Nuclear Corporation (hereinafter collectively referred to as Kerr-McGee) appeal from judgments awarded against them in a suit brought by plaintiff Bill M. Silkwood as administrator of the estate of Karen Silkwood, deceased. The action, a diversity suit tried before a jury, was based upon common-law tort principles under Oklahoma law. Plaintiff sought recovery for personal injury (primarily fear and anxiety) and property damage suffered by Ms. Silkwood as a result of plutonium contamination. The contamination occurred November 5, 6, and 7, 1974. Ms. Silkwood's death in an unrelated automobile accident on November 13, 1974 marked the end of any damages she did suffer and precluded any damages she might have suffered had she lived beyond that date. The jury awarded $500,000 on plaintiff's personal injury claim and $5,000 on his property claim. It also awarded $10,000,000 in punitive damages. In our initial opinion we reversed the personal injury judgment, holding that recovery for those injuries was controlled exclusively by the Oklahoma Workers' Compensation Act, Okla. Stat. Ann. tit. 85 (West 1971 & Supp. 1980). We affirmed the property damage judgment, holding that the Oklahoma Act applied only to personal injuries. Finally, we reversed the punitive damages judgment, holding that the award of such damages constituted state action that competed substantially with the federal statutory regulation of the Kerr-McGee plant. Neither our affirmance of the property damages judgment nor our reversal of the personal injury judgment was appealed. Plaintiff did, however, appeal our reversal of the punitive damages judgment. Our decision in that regard was reversed by the Supreme Court, which concluded that the award of punitive damages in this case is not preempted by federal law. The Court remanded, with instructions that Kerr-McGee be free to assert any claims they made before our court that had yet to be addressed. Kerr-McGee now argues that they are entitled to judgment on the punitive damages claim because: (1) there is no evidence that malicious or wanton conduct on their part resulted in the plutonium contamination of Ms. Silkwood's apartment; and (2) they substantially complied with the federal regulatory scheme governing their conduct. Karen Silkwood was a laboratory analyst at an Oklahoma Kerr-McGee plant that fabricated fuel pins, containing plutonium, that were used for reactor fuel. Ms. Silkwood worked the afternoon of November 5, 1974. Over the course of that afternoon, she monitored herself for plutonium contamination five times. The first four times she detected no contamination. The fifth time, after withdrawing her hands from one of the glove boxes in which she had been polishing and cleaning plutonium, she found contamination. Further checks were made in the laboratory and other contaminations were found, particularly inside the gloves in the glove box in which Ms. Silkwood had been working. Ms. Silkwood was decontaminated, placed on a five-day voiding collection program, and furnished urine and fecal kits to take home for the purpose of obtaining samples that would be sent to the United States testing laboratory for analysis. On the morning of the next day, November 6, 1974, Ms. Silkwood arrived at work and did some paperwork for one hour. Upon leaving, she tested herself and again found herself to be contaminated. She was decontaminated and, at her request, her locker and auto were tested and found to be free of contamination. The next day, November 7, 1984, Ms. Silkwood went directly to the plant's health physics office upon reporting to work. She was again found to be contaminated. The parties stipulated that the urine samples brought to the plant had been spiked with plutonium; that is, they contained insoluble -- not naturally excreted -- plutonium. Ms. Silkwood's apartment was also found to have been contaminated. Ms. Silkwood's roommate, who had returned to the apartment from the plant sometime after 8:00 a.m. on November 7th, was contaminated as well. When she had left work, she had been found not to be contaminated. Ms. Silkwood's boyfriend, who spent the night of November 6th in her apartment and left at 7:00 a.m. on the 7th, was not contaminated. Ms. Silkwood's possessions were destroyed and she was sent to the Los Alamos Scientific Laboratory in New Mexico to undergo further tests concerning her contamination. On November 13th, after having reported back to work and being reassigned, she was killed in an automobile accident. A subsequent autopsy revealed that the amount of plutonium within her body at the time of her death was between 25 percent and 50 percent of the permissible lifetime body burden allowed by the Atomic Energy Commission for plutonium workers.

Remedy sought:

Court opinion (including key issues and arguments):
We first address Kerr-McGee's contention that they are entitled to a judgment notwithstanding the verdict on plaintiff's punitive damages claim because there is no evidence that the contamination of Ms. Silkwood's apartment was caused by any malicious or wanton conduct on their part. In support of his punitive damages claim, plaintiff presented evidence relating to plant security, worker training, management, radiation detection, medical evaluation, and contamination incidents. Dr. Karl Morgan, who for 29 years directed the government's health physics program at Oak Ridge, Tennessee, described defendant's operations as one of the worst, from the standpoint of safety, that he had ever reviewed. He testified that he "could not imagine such a lackadaisical attitude could be developed in an organization in reference to the health and safety of the people," and concluded that defendants' practices reflected a "callous" and "wanton" disregard for the health and safety of employees. Plaintiff offered considerable documentary and statistical evidence on this issue as well, the most notable of which was evidence indicating that during the period from 1972-1976 Kerr-McGee was unable to account for as much as 10.4 kilograms of plutonium. It is true, as defendants contend, that plaintiff offered no direct evidence that the general pattern of gross negligence it sought to establish by the above evidence was the specific cause of the escape of plutonium in this particular instance. However, a jury may permissibly infer from a pattern of negligence likely to cause a particular kind of injury that such negligence did indeed cause the injury. ... Plaintiff presented sufficient evidence of gross negligence and of causation to preclude a judgment notwithstanding the verdict for Kerr-McGee on the ground of insufficiency of the evidence. Kerr-McGee further argues for a judgment notwithstanding the verdict on the theory that its substantial compliance with the federal regulatory scheme governing its conduct precluded the award of punitive damages. Kerr-McGee's argument in this regard appears to be two-pronged, although it is not clearly explicated as such. First, Kerr-McGee contends that substantial compliance with the federal regulatory scheme precludes the award of punitive damages as a matter of federal preemption. Second, Kerr-McGee apparently argues that even if this is not the case, such compliance is a bar to punitives as a matter of Oklahoma state law. In reversing our decision striking down the district court's punitive damages judgment, the Supreme Court held that the existence of a federal scheme regulating Kerr-McGee did not preempt the award of punitive damages under state tort law principles. The Supreme Court was well aware of the "circumstances of this case" regarding the substantial compliance issue. The Court noted that Kerr-McGee offered evidence that it had complied with most federal regulations. 104 S. Ct. at 619. The Court made specific note of a Nuclear Regulatory Commission official's testimony that there were no serious personnel exposures at the plant and that Kerr-McGee did not exceed the regulatory requirements with respect to exposure levels that would result in significant health hazards. id. The Court also noted the Nuclear Regulatory Commission's report on the investigation of the incident involving Ms. Silkwood, in which the Commission determined that Kerr-McGee's only violation of federal regulations throughout the incident was its failure to maintain a record of the dates of two urine samples submitted by Ms. Silkwood.... Kerr-McGee asks us, in effect, to read the Supreme Court's opinion as holding that the existence of the federal regulatory scheme does not preclude the award of punitive damages -- unless that scheme is substantially complied with. In other words, the state may impose, in addition to the federal standard, its own stricter safety standard on a nuclear plant -- unless the plant complies with the less stringent federal standard. We do not believe that this non sequitur can be reasonably inferred from the Supreme Court's opinion. Our own analysis of Oklahoma law convinces us, however, that the district court's conclusion was correct. Although the Oklahoma Supreme Court has yet to address the question of whether substantial compliance with a regulatory scheme bars the award of punitive damages, that court has embraced the general proposition that "mere compliance with statutory requirements does not relieve a party from responsibility for negligence as a matter of law." We therefore reject Kerr-McGee's argument that substantial compliance with federal nuclear regulations rendered it immune to tort liability, including the possibility of punitive damages. We must nevertheless remand for a new trial for the reasons we will now set forth. Kerr-McGee contends that a new trial should be ordered because evidence of Ms. Silkwood's personal injury was introduced in the trial below, and the Oklahoma Worker's Compensation Act, Okla. Stat. Ann. tit. 85 (West 1971 & Supp. 1980), functions as a bar to any evidence relating to a covered personal injury. If, as defendants contend, the Oklahoma Act functions as a complete evidentiary bar, it would work a substantial hardship on potential plaintiffs whose rights were not intended to be affected by the Act. For example, an evidentiary bar would preclude a non-employee who was injured by a defendant employer's negligent act from introducing evidence of past similar injuries to employees, which would be otherwise admissible under Oklahoma law in order to demonstrate the knowledge and malice of the defendant for purposes of a punitive damages determination. Evidence of an injury covered by the Act, however, may not be the basis for damages of any kind -- actual or punitive. The Act is exclusive of "all other liability of the employer." ... Therefore, evidence of an injury covered by the Act that is admissible to prove an element of a claim for a non-covered injury must be properly restricted to that purpose by a limiting instruction. We are aware that in allowing evidence of a covered injury to prove an element of a non-covered claim we leave open the possibility that a covered injury may indirectly give rise to employer liability for that non-covered claim where none would have existed otherwise. However, our position is mandated by the fact that a complete evidentiary bar would expand the reach of the Oklahoma Act well beyond its framers' intent. Having found that a personal injury covered by the Act may not be the basis of a punitive damages award, we must next address the question of whether Ms. Silkwood's personal injury was, in fact, the basis of any portion of the punitive damages awarded below. Plaintiff argues that the nature of punitive damages is such that the award would have been the same even if the trial below had been properly restricted to the property damage claim. This is so, plaintiff contends, because punitive damages analysis focuses not so much on the nature and extent of a plaintiff's injury as upon the endangerment to society created by the negligent conduct of the defendant and the punishment necessary to deter such conduct in the future. Plaintiff notes that our ruling on workers' compensation did not diminish Kerr-McGee's size and wealth, nor did it diminish the risk created by the escape of plutonium. In further support of his position, plaintiff offers Oklahoma cases holding that a punitive damages award need bear no relation to the actual damages awarded. Thus, if Ms. Silkwood's personal injury were a permissible basis for a punitive damages claim, our striking down plaintiff's actual damages award would not necessarily require a reduction in the amount of the punitive damages award. The Oklahoma Workers' Compensation Act precludes all liability for a covered injury, however. Accordingly, our inquiry must be whether Ms. Silkwood's personal injury was indeed the basis for a portion of the punitive damages award. We must conclude that it was. While under Oklahoma law punitive damages need bear no relation to the amount of actual damages awarded, they must bear some relation to the "cause and extent of one's injuries." ... The court also looked to the wealth of the defendant and to the deterrent effect of the award, but did not purport to overrule prior cases by enunciating an exclusive list of material factors. Thus, under Oklahoma law, although such factors as risk created and deterrent effect may be considered in determining a punitive damages award and the amount of punitive damages need bear no relation to the amount of actual damages awarded, the analysis is not open-ended. Rather, it must be disciplined by reference to injuries actually caused by the defendant, both to the plaintiff and to society generally. Thus, by instructing the jury to consider "the injuries inflicted" without restricting their consideration to the property damage claim, the district court explicitly invited the jury to increase the size of the punitive damages award on the basis of Ms. Silkwood's personal injury. As we have held, although evidence of an injury covered by the Oklahoma Workers' Compensation Act is admissible to prove an element of a claim not covered by the Act, it must be limited to that purpose. It may not be used by the jury as the basis for increased punitive damages in the jury's assessment of the appropriate relation between the injuries inflicted and the punitive damages award. Consequently, the trial court erred in using an instruction that invited the jury to consider a factor in setting the size of the punitive damages award that Oklahoma law forbids. Any jury award of punitive damages involves a "discretionary moral judgment," see Smith v. Wade, 461 U.S. 30, 52, 75 L. Ed. 2d 632, 103 S. Ct. 1625 (1983). Oklahoma law places very little limitation on the jury's discretion in making this moral judgment. Because a new trial is required to determine whether Kerr-McGee's conduct that caused plaintiff's property damage warrants imposition of punitive damages and, if so, the amount of those damages, we need not consider Kerr-McGee's other grounds for a new trial. Finally, we address plaintiff's claim that he is entitled to a new trial on his personal injury claim. In view of plaintiff's obvious incentive at the trial below to prove intentional contamination, we would be hard-pressed to hold that plaintiff has met this standard. Put simply, plaintiff has had his day in court on his compensatory damages claim. He is not entitled to another. DISSENT: DOYLE: Kerr-McGee now asserts that it is entitled to a judgment notwithstanding the verdict on the punitive damages claim. They persist in their contention that there was a dearth of evidence that the contamination of Ms. Silkwood's apartment resulted from malicious conduct on its part that would justify a punitive award. If they were not responsible, who was? It is important to remember that the Kerr-McGee employees were constantly looking over Silkwood's activity not only in the plant but also in her home. Both her apartment and her person were soaked with nuclear material at the time of the auto accident. The parties have stipulated that this very plutonium origin came from the Kerr-McGee plant. As a member of the Oil, Chemical and Atomic Workers Union (OCAW), Silkwood represented some of the workers in this Kerr-McGee plant. As an elected member of the union negotiating team, Silkwood was responsible for health and safety matters. In September 1974 she, together with her fellow committee members, met with OCAW leaders in Washington, D.C. There she presented charges to the Atomic Energy Commission (AEC) as to numerous health and safety violations by Kerr-McGee. The AEC requested documentation of the charges. Ms. Silkwood was assigned the job of collecting this documentation. She was engaged in collecting information and recording it in notebooks and on tapes from September 1974 and continuing until the time of her death. That night Silkwood was on her way to meet a New York Times reporter and an OCAW leader when she was killed in an automobile accident. Two things are clear: the plutonium did come from Kerr-McGee's plant, which has been stipulated by the parties; and, as the jury found, Karen Silkwood did not intentionally remove the plutonium from the plant. Because punitive damages are intended to punish a defendant for his past conduct, Oklahoma law requires that they are in proportion to the culpability of that conduct, and to the defendant's wealth, rather than to any actual damages awarded. In our first opinion, we held that Oklahoma would find plutonium processing to be an ultrahazardous activity, and that Kerr-McGee should be held strictly liable for any damages caused by the escape of its plutonium. 667 F.2d 908, 921 (10th Cir. 1981). Since strict liability applies, Oklahoma would hold Kerr-McGee to a standard of utmost due care and would require Kerr-McGee to take all possible precautions to safeguard against even the most minimal risk of harm from its operations. There is ample evidence not only to permit the punitive damages issue to be submitted to the jury, but also to support the punitive damages award that the jury returned. Kerr-McGee conceded that the plutonium found in Ms. Silkwood's apartment came from its plant, and the jury found that Ms. Silkwood had not intentionally removed the plutonium from the plant. Thus, Kerr-McGee was strictly liable for the harm caused by its plutonium, and the question becomes whether Kerr-McGee's course of conduct reflected a reckless disregard for public safety.

Disposition of case:
The punitive damages judgment is reversed, and the cause is remanded for a new trial on the punitive damages issue.

ECONOMIC ANALYSIS OF THE CASE