Compensation for Transboundary Claims in Nuclear Disasters

Introduction

The Fukushima meltdown is often described as a uniquely Japanese catastrophe, but its causes and consequences extend far beyond Japan's borders. As the incident unfolded, clouds of radioactive material moved over the Pacific while operators pumped contaminated water into the ocean. A US corporation, General Electric, supplied several of the reactors on a “turn-key” basis and developed aspects of the site's design. The fuel pellets that slumped and melted in the reactor cores, meanwhile, came from overseas where just six countries—Canada, Kazakhstan, Niger, Australia, Russia, and Namibia—furnish more than 85% of all nuclear fuel worldwide. The Fukushima plant itself may be local to Japan, but it is also one point on a broad, transnational web of commerce and contamination. Compensation for nuclear accidents is therefore not just a domestic problem but a transnational one.

From the advent of nuclear power, nation-states with nuclear ambitions bargained to create international legal regimes governing transboundary consequences of nuclear accidents. These regimes sought to buoy and bolster nuclear industries and the capacity of nation-states to develop nuclear power. While several distinct international legal regimes govern transboundary harm, a significant portion of nuclear energy production happens outside of their purview. In the gaps between international conventions and local action, national legal doctrines that are not specific to the nuclear context—ones such as jurisdiction and conflicts of laws—fill the gaps. The viability of claims for compensation arising out of transboundary, transnational harm often depends on fortuitous elements of an individual case.

The Fukushima incident has exposed not only the flaws, but also the unexpected and uncertain compensation possibilities of this confusing system. The nuclear meltdown at Fukushima Daichi generated two novel sets of claims within the US courts that deserve greater attention and analysis. As the Fukushima plant melted down in March of 2011, the USS Ronald Reagan, a US Navy aircraft carrier, approached the region from the sea to provide humanitarian assistance. Injured members of the vessel's crew (along with the crews of several other US Navy vessels) sued in the US courts against TEPCO and GE, seeking damages for injuries that they argued were related to their presence off of the coast at the time of the disaster. In a second case, a group of claimants from Japan, led by physicians from heavily affected regions, sued GE, the manufacturer of the reactor, in a US court, arguing that design flaws on GE's part caused the incident.

As we will explain, these transboundary claims would typically be precluded under most national laws, including Japan's, and under the international liability conventions. Indeed, they are precisely the kinds of actions that drafters of international liability conventions hoped to prevent. Ironically, the claims remained viable only in the context of transboundary harm because international regulatory regimes have failed to take root. Although, as we shall see, these claims failed in the US courts, they expose important, ongoing gaps and contingencies in regimes covering transnational harm from nuclear disasters.

While this state of affairs may impose heightened and uncertain costs on corporations, it might also afford a wider range of legal possibilities or political leverage to claimants seeking compensation. Such cases also provide new opportunities to think about nuclear power as neither purely domestic nor purely international. The structure of nuclear businesses and the itinerant character of nuclear harm makes these issues more than just a matter of state-to-state relations. They are trans-local issues that implicate economic, political, and social ties of ordinary citizens, consumers, and corporations.

In this chapter, we describe the patchwork of international agreements relating to cross-border harm from nuclear accidents and identify some of the most significant lacunae in the international legal regimes. We describe how cases and issues that are not covered by these conventions are handled as a matter of private international law. We then turn to claims brought in US courts and analyze their implications for cross-border compensation.

International Conventions

Transboundary harm is governed by a complicated patchwork of national laws, international conventions, and traditional sources of public and private international law. Where a claimant may sue, whom a claimant may sue, what she must prove, and what she may recover are largely contingent on where the plant was located and where the harm occurred. The three worst nuclear power incidents, meanwhile, occurred in states that produced a large proportion of the world's nuclear kilowatt hours, but which had, at the time of the incidents, declined to participate in these international legal regimes: the US, the USSR, and Japan. The US and Japan have since joined one of the international conventions, but many emerging producers of nuclear power, such as the People's Republic of China and the Republic of Korea (South Korea), have not.

Several distinct international legal regimes govern liability for a nuclear reactor incident: the Organization for Economic Cooperation and Development's (OECD) 1960 Paris Convention on Third-Party Liability in the Field of Nuclear Energy and several instruments that supplement or revise it (the Paris Regime); the United Nations International Atomic Energy Agency's (IAEA) 1963 Vienna Convention on Civil Liability for Nuclear Damages and instruments that revise it (the Vienna Regime); the IAEA Joint Protocol of 1988, that links the Paris and Vienna Regimes; and the IAEA's Convention on Supplementary Compensation for Nuclear Damage of 1997 (the CSC).

The Paris and Vienna Regimes are sui generis international legal regimes that grew out of early efforts to facilitate nuclear development and international trade in expertise, designs, and technologies by circumscribing the financial and legal risk to industry participants. Protecting the public against losses was, initially, a secondary concern.¹ Delegations of experts and state representatives negotiated the initial conventions during the 1950s and 1960s.²

After fallout from the Chernobyl meltdown spread across Europe, joint expert committees of the IAEA and OECD worked to improve the Conventions’ compensation schemes and to address existing regulatory gaps and ambiguities within them. The situation in Europe was particularly complex. Some member nations had signed on to one agreement, others had signed on to another, and still others had signed on to none at all, raising the possibility of vastly different compensation outcomes for accidents in different member states and raising thorny legal questions.³

In response to Chernobyl, the IAEA also developed a third, US-promoted regime, the CSC, to increase the amount of funding available in the case of a meltdown and to attract nation-states that had declined to join the Vienna or Paris Conventions. The US, for example, had declined to sign on to the Vienna or Paris Conventions because of legal differences in how US legislation treated nuclear liability domestically. The IAEA hoped that the CSC could overcome such differences and increase compensation globally.

Just as Chernobyl prompted new critique and efforts at reform, the incident at Fukushima has once again drawn attention to the international conventions and prompted calls within the IAEA for the promulgation of a truly global international liability regime. The EU and European Commission have begun consulting stakeholders, including the public, about revising these liability regimes. Management of the claims process has drawn particular scrutiny in the wake of the Japanese government's difficulties following Fukushima.⁴ Yet despite newfound interest in reform, the process has progressed very slowly.

Consequently, depending on how one counts, there are currently eleven international instruments governing liability for a nuclear meltdown, summarized in Table 1. Although both the initial Paris Convention and Vienna Convention have been amended, signatory states choose whether and when to adopt and ratify each amendment. Some states still adhere only to the original Paris or Vienna Convention. And many states have declined to join any regime. This creates a confusing patchwork of coverage.⁵

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TABLE 1

PARIS REGIME

INSTRUMENT	ENTRY INTO FORCE
Paris Convention on Third Party Liability in the Field of Nuclear Energy (1960) (PC in table 2, below)	1968
Additional Protocol (1964)	1968
Protocol to Amend (1982)	1988
Protocol to Amend (2004) (RPC in table 2, below)	Not Yet in Force
Brussels Supplementary Convention (1963) (BSC in table 2, below)	1974
Additional Protocol (1964)	1974
Protocol to Amend (1982)	1991
Protocol to Amend (2004) (RBSC in table 2, below)	Not Yet in Force

VIENNA REGIME

INSTRUMENT	ENTRY INTO FORCE
Vienna Convention on Civil Liability for Nuclear Damages (1963) (VC in table 2, below)	1977
Protocol to Amend (1997) (RVC in table 2, below)	2003

LINKING INSTRUMENT

INSTRUMENT	ENTRY INTO FORCE
Joint Protocol Relating to the Application of the Vienna Convention and the Paris Convention (1988) (JP in table 2, below)	1992

SUPPLEMENTARY REGIME APPLYING TO EITHER OR STATES NOT SIGNATORY TO PARIS OR VIENNA

INSTRUMENT	ENTRY INTO FORCE
Convention on Supplementary Compensation for Nuclear Damage (1997) (CSC in table 2, below)	2015

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TABLE 2⁶

State	# Reactor	# Reactor Under Constr.	TWh Nuc. Pwr	Nuc. Pwr as % of state energy prod.	PC	VC	BSC	JP	RVC	CSC	RBSC	RPC
Argentina	3	1	7.9	5.9		VC			RVC	CSC
Armenia	1	0	2	27.8		VC
Bangladesh	0	2	0	0
Belarus	0	1	0	0		VC			RVC
Belgium	7	0	41.4	47.6	PC		BSC
Benin						VC		JP	RVC	CSC
Bolivia	0	0	0	0		VC
Bosnia & Herzegovina	0	0	0	0		VC			RVC
Brazil	2	1	15.2	2.7		VC
Bulgaria	2	0	15.9	37.5		VC		JP
Cameroon	0	0	0	0		VC		JP
Canada	19	0	94.9	14.9						CSC
Chile	0	0	0	0		VC		JP
China	49	16	330.1	4.9
Croatia	0	0	0	0		VC		JP
Cuba	0	0	0	0		VC
Czech Republic	6	0	28.6	35.2		VC		JP
Denmark	0	0	0	0	PC		BSC	JP
Egypt	0	0	0	0		VC		JP
Estonia	0	0	0	0		VC		JP
Finland	4	1	22.9	34.7	PC		BSC	JP
France	56	1	382.4	70.6	PC		BSC	JP
Germany	6	0	71.9	12.4	PC		BSC	JP
Ghana	0	0	0	0		VC		JP	RVC	CSC
Greece	0	0	0	0	PC			JP
Hungary	4	0	15.4	49.2		VC		JP
India	23	6	40.7	3.2						CSC
Iran	1	1	5.9	1.8
Italy	0	0	0	0	PC		BSC	JP
Japan	33	2	65.7	7.5						CSC
Jordan	0	0	0	0		VC			RVC
Kazakhstan	0	0	0	0		VC			RVC
Korea	24	4	138.8	26.2
Latvia	0	0	0	0		VC		JP	RVC
Lebanon	0	0	0	0		VC
Lithuania	0	0	0	0		VC		JP
Macedonia	0	0	0	0		VC
Mauritius	0	0	0	0		VC
Mexico	2	0	10.9	4.5		VC
Montenegro	0	0	0	0		VC		JP	RVC	CSC
Morocco	0	0	0	0					RVC	CSC
Netherlands	1	0	3.7	3.2	PC		BSC	JP
Niger	0	0	0	0		VC			RVC
Nigeria	0	0	0	0		VC
Norway	0	0	0	0	PC		BSC	JP			RBSC	RPC
Pakistan	5	2	9.1	6.6
Peru	0	0	0	0		VC
Philippines	0	0	0	0		VC
Poland	0	0	0	0		VC		JP	RVC
Portugal	0	0	0	0	PC
Republic of Moldova	0	0	0	0		VC
Romania	2	0	10.4	18.5		VC		JP	RVC	CSC
Russian Federation	38	2	195.5	19.7		VC
St. Vincent & Grenadines	0	0	0	0		VC		JP
Saudi Arabia	0	0	0	0		VC			RVC
Senegal	0	0	0	0		VC
Serbia	0	0	0	0		VC
Slovakia	4	2	14.2	53.9		VC		JP
Slovenia	1	0	5.5	37	PC		BSC	JP
South Africa	2	0	13.6	6.7
Spain	7	0	55.9	21.4	PC		BSC				RBSC
Sweden	6	0	64.4	34	PC		BSC	JP
Switzerland	4	0	25.4	23.9	PC						RBSC	RPC
Taiwan	4	0	22	8
Trinidad & Tobago	0	0	0	0		VC
Turkey	0	0	0	0	PC			JP
Ukraine	15	2	78.1	53.9		VC		JP
United Arab Emirates	1	3	0	0				JP	RVC	CSC
United Kingdom	15	0	65	20	PC		BSC
United States of America	94	2	809.4	19.7						CSC
Uruguay	0	0	0	0		VC		JP

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Foundational Principles

The Paris, Vienna, and CSC Regimes all focus on the private liability of the producers of nuclear power for harm to private victims rather than on the obligations of states to one another.⁷ In other words, they treat harm from nuclear incidents as a concern of private international law rather than one of public international law. Although the regimes differ in meaningful ways, it is widely recognized that all three are built on a handful of foundational principles of international nuclear liability.⁸

The regimes channel liability exclusively to the operators of nuclear installations.⁹ Operators alone bear legal responsibility for injuries to persons or businesses outside of the facility harmed by a meltdown. (In states where nuclear operators are state-owned, the state is liable up to the amounts for which any operator would be held responsible.) Corporations providing parts, expertise, designs, or even “turn-key” plants do not face liability for damage to the public caused by a defect in their product or design.

These regimes concurrently place limits on an operator's financial liability for an incident.¹⁰ The operator, in turn, is required to take out financial protection (typically private insurance) up to the full amount of its stated liability. The amounts set by the regimes are quite low compared to the costs of a catastrophic incident. For ease of reference, the designated financial protection minimums and maximums, where applicable, are summarized in Table 3.

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TABLE 3

PARIS REGIME

CONVENTION	FINANCIAL PROTECTION
Paris Convention on Third Party Liability in the Field of Nuclear Energy (1960)	5,000,000-15,000,000 SDR
Protocol to Amend the Paris Convention (1982)	Minimum of 5,000,000-15,000,000 SDR
Protocol to Amend the Paris Convention (2004)	Minimum of 700,000,000 EUR

VIENNA REGIME

CONVENTION	FINANCIAL PROTECTION
Vienna Convention on Civil Liability for Nuclear Damages (1963)	Minimum of $5,000,000
Protocol to Amend the Vienna Convention (1997)	Minimum of 300,000,000 SDR

CSC REGIME

CONVENTION	FINANCIAL PROTECTION
Convention on Supplementary Compensation for Nuclear Damage (1997)	Minimum of 300,000,000 SDR

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The OECD's Paris Convention requires signatory states to set a minimum financial protection level of 5 million Special Drawing Rights (SDR) (about $7.2 million USD in 2021). No Paris state may set the level of an operator's financial protection below this level. The Convention permits signatory states to extend the financial protection level to a maximum of 15 million SDRs (about $21.6 million USD in 2021). A 1982 Protocol, which entered into force in 1985, established that signatory states are free to exceed the 15 million SDR cap with state-provided funds.¹¹ Although not yet in force, the 2004 Protocol to Amend the Paris Convention raises the minimum amount of financial protection to 700 million EUR.

The IAEA, in contrast, set the minimum level of financial protection at just $5 million in deference to states that felt higher caps would make nuclear capacity unattainable for cash-poor states.¹² A state may require operators to provide a higher or unlimited amount of financial protection, but not lower. The 1997 Protocol to Amend the Vienna Convention increases the financial protection level to a minimum of 300 million SDR (about $432 million USD in 2021). States may set the level lower so long as they provide state funds to cover the shortfall. ¹³ The IAEA's CSC requires that a signatory state either ratify one of the Vienna or Paris Conventions, or have national laws in force that require a minimum financial protection level of 300 million SDR.

Several other instruments and the CSC provide for additional compensation tiers that may be drawn upon once financial protection—i.e., the operator's insurance—is exhausted. They create additional layers of compensation for victims harmed by a major incident. The supplementary funding regimes are summarized in Table 4.

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TABLE 4

CONVENTION	ADDITIONAL COMPENSATION AFTER FINANCIAL PROTECTION EXHAUSTED	SOURCE OF FUNDS
Brussels Supplementary Convention (1963)	175,000,000 SDR less financial protection	Installation State
	125,000,000 SDR	Member-State Contributions
Protocol to Amend the Brussels Supplementary Convention (2004)	500,000,000 EUR	Installation State
	300,000,000 EUR	Member-State Contributions
Convention on Supplementary Compensation for Nuclear Damage (1997)	Determined by Formula	Member-State Contributions

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Within the Paris Regime, the 1963 Brussels Supplementary Convention adds two additional layers of compensation to be drawn upon if the costs of liability for an incident exceed the operator's financial protection. One is a fund provided by the installation state totaling up to the difference between 175 million SDRs (about $252 million USD in 2021) and the amount of financial protection. The third layer is a pooled fund of 125 million SDRs (about $180 million USD in 2021) comprised of member-state contributions. The total of the three layers of compensation in the Brussels Supplementary Convention is therefore 300 million SDRs (about $432 million USD in 2021). The 2004 Protocol to Amend the Brussels Supplementary Convention increases the second tier of installation-state-provided funds to 500 million EUR and the third tier of pooled public funds to 300 million EUR. These 2004 amendments have not yet entered into force. ¹⁴

The CSC Regime provides one additional layer of compensation above the financial protection requirement. This is a pooled, international fund to which signatory states are required to contribute after damages exceed the primary tier of coverage—e.g., after the operator's insurance or indemnity is exhausted. The amount of this fund depends on the number of signatory states and the number of reactors and installed nuclear capacity of each signatory state. A formula uses these factors to scale a signatory state's contribution to the size of its nuclear industry. ¹⁵

In addition to limiting operators’ liability in terms of the amount of compensation available, the regimes also impose time limits on an operator's liability.¹⁶ Initially, all three Conventions set the limit at ten years following an incident.¹⁷ The 1997 Protocol to Amend the Vienna Convention and the 2004 Protocol to Amend the Paris Convention raised the limitations period to thirty years.¹⁸ The CSC allows the period of limitation to extend beyond ten years, provided the financial protection policy—either insurance or government indemnification—is still in place. But in practice, most private nuclear insurance policies expire after only ten years.

Moreover, the regimes typically impose a form of strict or absolute liability on operators.¹⁹ This means that although claimants still need to prove that their injuries were caused by the actions of the party being sued (causation) and establish the financial extent of their injury (damages), they need not prove that an operator is at fault. These provisions relax some of the legal burdens that claimants face.

Finally, the regimes set jurisdiction over claims with the courts of the nation-state in which the incident occurs. With few exceptions, this is defined as the state in which installation is situated. ²⁰ In other words, nuclear nation-states typically hold the right to pass judgment on incidents occurring at facilities within their territory. The presiding court determines the law that applies to a case.

Problem Areas

All of the previously outlined provisions circumscribe liability and legal uncertainty for operators and suppliers, but the resulting regimes are far from comprehensive or robust. Some of the instruments conflict with each other and each instrument leaves regulatory silences. We summarize several key problems below.

Lack of Adherence by Nuclear Power States

Perhaps the greatest problem is that several major nuclear power states refuse to join a regime. Notably, China and South Korea have not signed on to any of the alternatives. Japan only joined the CSC in 2015, long after the devastating Fukushima catastrophe. As East Asia expands its nuclear power capacity, the risk of transboundary harm within the region will grow. Where nuclear facilities are state-owned, doctrines of sovereign immunity, which preclude claims against the state, may prevent any recovery against an operator.

No Provision for State Liability

The Conventions do not address the liability of states to one another or to individual citizens. Although IAEA has considered promulgating a separate instrument to govern state liability, every attempt has met opposition. Under customary international law, it remains unclear whether a state can be held liable for damage caused by lawful activities, such as the generation of nuclear power. Partly for this reason, European states affected by Chernobyl's fallout compensated their own citizens for harm rather than suing the USSR. If an incident like Chernobyl happens again in a state-owned facility of a non-signatory state, the same legal problems will follow. For example, it might be difficult for a state to recover damages on behalf of its citizens for transboundary harm from a meltdown in China.

Level of Compensation

Fundamental differences remain between the Paris and Vienna Regimes’ requirements for financial protection. The Joint Protocol resolved that any claimant from a state that had ratified either the Vienna or Paris Convention as well as the Joint Protocol could claim the benefits of the Convention in force in the installation state. Not all Paris and Vienna states signed the Joint Protocol, however. The Paris Regime provides for higher levels of financial protection than Vienna. It remains unclear which financial provisions would apply if an installation in a state signatory to one Convention irradiated victims in a state covered by the other.

In addition, supplemental compensation pools provided by the Brussels Convention on Supplementary Compensation and the Protocol to Amend the Brussels Convention are limited to member states. If an incident in a Brussels state harms victims in a non-Brussels state, for example, less compensation would be available to remedy the injuries of claimants from the non-Brussels state.²¹ Brussels states insisted on this limitation since the supplementary pools are comprised of public funds. The limitation, however, could result in a particularly unjust allocation of resources were a Brussels state to cause extensive damages in a non-nuclear, non-signatory state such as Austria, Ireland, or Luxembourg. The CSC addresses this tension by setting aside half of the pooled, supplemental compensation exclusively to address transboundary damage.²²

Even in regions where many nuclear power states participate in the same regime, as in much of Western Europe, the cost of a catastrophic incident would dramatically outstrip the levels of compensation that most national legislation and international conventions provide. By way of comparison, in 2019, the think tank Japan Center for Economic Research suggested that costs of the Fukushima disaster may run as high as $315-$728 billion US dollars.²³ No international convention comes close to requiring this level of funding and most nation-states’ domestic laws similarly cap damages at far lower levels. Some signatory states, moreover, may struggle to find the cash reserves necessary to meet their obligations, let alone to cover the costs of a catastrophic meltdown. Armenia's sole reactor, for example, does not have a containment unit and sits in a seismically active region. A catastrophic incident at a facility with no containment unit would cause a tremendous amount of damage and potentially a significant amount of transboundary harm that could outstrip the operator and the state's resources.

Suppliers’ Immunity

Imposition of liability for faulty products or design is one means of promoting safety in a variety of industries. If suppliers know they will face liability should their products or designs cause harm, then they may invest in safety a priori. Under all three regimes, however, nuclear technology suppliers are shielded from liability even if an incident is caused by their negligence or a defect in product or design. This initially induced technology suppliers to participate in developing the fledgling industry. It is unclear, however, why suppliers should still be entitled to such protections after nearly seven decades of experience and profit in the nuclear field.

Supply of nuclear technologies also raises issues of state participation and immunity from liability. Increasingly, aspiring nuclear power states are contracting to purchase nuclear reactor facilities fully designed, built, and installed by a handful of corporations—so-called “turn-key” plants. Previously, privately-owned US and Japanese technology suppliers dominated this business. In more recent years, a number of wholly or partly state-owned corporations have moved into this field. Russia, China, South Korea, and France have supported these ventures. Although, as we discuss below, the lack of coverage by a Convention may open up suppliers to liability, many of these state-run corporations, such as Russia's Rusatom and France's Areva, claim protections of sovereign immunity.²⁴ As state-run entities, moreover, these corporations are able to benefit from diplomatic negotiations between states. The Russian government, for example, has negotiated bilateral agreements governing nuclear liability with states in which Rusatom is operating.²⁵

Lack of Claims Process

The Conventions dictate which courts will have jurisdiction over claims arising from an incident, but say little else about the administration of claims. Granting jurisdiction and choice of law to installation states may tilt the playing field towards nuclear industry interests as against foreign claimants. Difficulties crafting a fair and easy-to-use claims system compound such problems. As Suami et. al. discuss in this report, the Japanese government had to craft an ad hoc claims procedure in the wake of Fukushima, and Japanese claimants have faced difficulties in navigating this system. Issues surrounding the administration of claims and compensation would be magnified in the case of major transboundary harm. Even assuming foreign claimants would be treated fairly, they would still face a difficult process of navigating a foreign legal system to make damage claims. Despite periodic references to the burden that victims would bear in navigating a claims process in a foreign installation state, the international community has not addressed these problems prospectively.

Conflicts Between Instruments

The CSC was designed to mesh with the Paris and Vienna Regimes. The 1988 Joint Protocol, moreover, reconciles differences between them. Among other things, it enables sufferers in a signatory state to claim the benefits of whichever Convention is in force in the installation state. Policymakers hoped the Joint Protocol could entice newly post-socialist states to join the Conventions, creating more uniform coverage within Europe but, as shown in Table 2, its adoption by Paris and Vienna states has been far from uniform.²⁶ Consequently, conflicts between the Vienna and Paris Conventions remain relevant today. Important differences center on the Conventions’ territorial application, to which we now turn.

Territorial Scope & the Question of Non-Signatory States

The Vienna and Paris Conventions only apply to damage suffered in a contracting state. With minor exceptions, the 1997 Protocol to Amend the Vienna Convention expands the reach of the Convention to all damage, wherever suffered.²⁷ The 2004 Protocol to Amend the Paris Convention expands the reach of the Convention to non-contracting states that have no nuclear installations or that provide equivalent protections under national law.²⁸ Because few signatory states have ratified amendments to the Paris or Vienna Conventions, however, there is still the possibility that victims in a non-nuclear, non-contracting state, such as Austria, Ireland, or Luxembourg, could receive different treatment than other victims.

Definitions of Damage

The Paris and Vienna Regimes initially limited claimants to recovery of damages for bodily injury, death, and harm to property. Damage to the environment and costs of environmental remediation were left out of the Conventions as were other kinds of damages, such as emotional harm or harm to reputation. Although the Revised Vienna and Paris Conventions and the CSC now permit signatory states to enact laws that would allow recovery of a wider array of environmental harms and injuries, they neither cover such damage under their own terms no require states to legislate in this area. Thus, recovery for environmental harm and for injuries beyond the narrow categories of embodied harm, death, and property damage varies depending on both the controlling convention and the underlying laws of the installation state.

Contingency and Unpredictability of Transboundary Harm

Decades of research have shown that the environmental pathways of radiation are complicated. Radioactive materials collect in hotspots and move in unpredictable ways. Human activity, similarly, brings unexpected populations into proximity of harm from a meltdown. Fukushima offers a case in point. No transboundary claims were expected, yet ship crews faced possible exposures. The unpredictability of exposures, coupled with the difficulties that lay-communities face in detecting exposure and linking it to harm, add further burdens to claims-making in the transboundary context.

The Case of Fukushima

As we have seen, international nuclear liability regimes attempt to limit the consequences of a meltdown for corporations and states. They are not principally oriented towards protecting members of the public. Yet, paradoxically, a number of major nuclear nation-states have not joined any of these conventions. Prior to the Fukushima meltdown, Japan had elected not to join one of the international conventions. In the wake of Fukushima, claimants brought lawsuits over the meltdown in both the Japanese and the US courts. Litigation over Fukushima exposes the strange and imperfect patchwork of reactor liability that endures in the gaps between international treaties. It also highlights claimants’ concerns with the bargains struck by international liability regimes.

Japanese law presents foreign claimants with several means of obtaining compensation for damage suffered within Japan.²⁹ First, foreign claimants may make claims under Japan's administrative compensation scheme on the same terms as compensation to Japanese citizens, subject to the condition of reciprocity.³⁰ In addition, some foreign claimants may also sue for compensation within the Japanese courts. The Fukushima District Court has ruled that, as concerns claims against the Japanese government, foreign citizens can sue the Japanese government as long as a Japanese citizen could bring a similar lawsuit in the foreign citizen's home state.³¹

The situation is far less clear for injuries suffered by foreign claimants located outside of Japan, however. There has been no legal decision explicitly permitting such claimants to bring lawsuits.³² Similarly, it is not clear whether the Japanese compensation scheme extends to harms from the Fukushima accident suffered outside of Japan.³³ As an added concern for potential claimants, TEPCO itself has been a key player in developing and administering compensation regimes. As a result, claimants seeking redress for harms suffered outside of Japan and others seeking new avenues for recovery have sued abroad in the US federal courts.

The first set of claims implicated the transboundary nature of nuclear harm. In the immediate wake of the triple disaster, US Navy vessels approached the coast of Japan on a humanitarian relief mission known as Operation Tomadachi. Fallout from Fukushima, the US plaintiffs alleged, irradiated their ships as they moved through international waters and into Japanese waters. Thus, a double transboundary movement—of the fallout and of the ship—was in issue.

Crew members of the USS Ronald Reagan and other ships participating in the mission brought claims in US federal court in California across several cases, Cooper, Bartel I, and Bartel II.³⁴ The plaintiffs in these suits sought compensation from TEPCO and General Electric (GE), the designer and manufacturer of the plaint, for negligence, strict liability for manufacturing and design defects, and strict liability for ultrahazardous activities. The movement of fallout over US vessels and US citizens, they argued, entitled them to the protection of US laws and courts as against TEPCO, the Japanese plant operator, and GE, the US designer.

A second set of claims, in contrast, targeted the trans-boundary nature of nuclear production—the movements of parts, designs, expertise, and capital.³⁵ In the Imamura case, it was not the movement of fallout that theoretically opened US law and courts to plaintiffs, but rather the participation of US corporations in the allegedly harm-causing incident. Nine Japanese plaintiffs, mainly medical doctors from Fukushima Prefecture, filed a class action suit against GE in US federal district court in Massachusetts, home of GE's international headquarters. They alleged many of the same claims as the Cooper and Bartel plaintiffs—negligence, strict liability for manufacturing and design defects, strict liability for ultrahazardous activities—and also included claims for damage to real property. In essence, the Imamura plaintiffs argued that the participation of a US corporation in the design of an allegedly faulty facility enabled them to call on US laws and courts for redress against GE, the US designer.

Together, these US court cases exposed tensions between the bounded territorial configurations of law and courts, on the one hand, and the itinerant nature of both nuclear harm and global capitalism, on the other. They raised important issues surrounding the status quo ante in global liability regimes. Namely, they renewed questions of whether it is just and fair to leave many aspects of decision-making over nuclear liability claims with interested parties such as nuclear operators. Moreover, these cases raised questions about whether claims should be resolved and governed by the legal institutions and laws of nation-states where incidents occur, many of which have vested interests in perpetuating nuclear power and limiting public liability. The US litigations refracted these issues through complicated legal questions of jurisdiction, forum, and choice of law. We discuss each in turn.

Jurisdiction

How is it that TEPCO, a Japanese nuclear plant operator, found itself defending a claim for compensation in a US federal court? Personal jurisdiction doctrines arising under US state and Constitutional laws determine when a foreign party may be sued in the US courts. The Bartel II claims raised the issue of whether doctrines of general jurisdiction—which require a defendant to have a strong connection to the US state where litigation is brought—support US court jurisdiction over damage from Fukushima.

The plaintiffs argued that TEPCO's business ties to the state of California were sufficient to support court jurisdiction there—that TEPCO “purposefully availed” itself of California. The plaintiffs contended that TEPCO's registration in 2003 to do business in California as well as its relationship with GE, which designed the Fukushima plant and had headquarters in California until 2005, supported general jurisdiction.³⁶

TEPCO's business relations within California, however, had little specific connection to the Fukushima meltdown, the court surmised. Although the District Court found that TEPCO had contact with California, it ultimately held that TEPCO's actions in the state did not relate sufficiently to the operation or meltdown of the Fukushima power plant in Japan. The court dismissed these claims for lack of personal jurisdiction.³⁷

The plaintiffs appealed this ruling to the US Court of Appeals for the Ninth Circuit, but the appeal turned solely on whether the plaintiffs filed their notice of appeal in a timely manner. The circuit court dismissed the case, reasoning that the plaintiffs had missed the filing deadline.³⁸ The Bartel dismissals stand.

Forum Non Conveniens

US plaintiffs have faced obstacles to suing TEPCO, a Japanese corporation, in the US. But in the Imamura case, the facts were reversed: the defendant was a US corporation, and the plaintiffs were Japanese. This time, the US court located in Massachusetts accepted jurisdiction because it is a long-accepted doctrine that corporations can be sued at their principal place of business. Yet it is also well-established that plaintiffs may sue in their home states, and hence that Japanese courts could also exercise jurisdiction. The Imamura litigation therefore raised questions about which forum was the most appropriate one for a trial. While the plaintiffs argued that the US courts would be the fairest and most logical forum, GE successfully sought removal of the claims to Japan under doctrines known as forum non conveniens.³⁹

The Imamura litigation showed how plaintiff claimants attempted to work the gaps in the international system to their favor. The clever theory of the Imamura litigation was this: while both US and Japanese statutory law protect manufacturers from liability, neither legal system regulates fully cross-border claims for compensation. Where there is no statutory law, ordinary tort law fills the gap, and ordinary tort law allows the plaintiffs to recover against manufacturers if certain thresholds of liability can be proven. Hence, the plaintiffs brought ordinary tort claims against GE. The cross-border movement of parts, expertise, and capital opened up the possibility that GE could face liability in the US courts.

Since jurisdiction was not in question, GE argued that Japan would be a better forum for the litigation than US courts in Massachusetts. The District Court's analysis of GE's claim turned on whether Japan offered an “alternative adequate forum”—on whether the balance of public and private factors in the case favored resolving the claims there.⁴⁰ In this case, the alternative forum was not the Japanese courts, but the Alternative Dispute Resolution Center (ADRC) created through the Japanese Nuclear Compensation Act. The plaintiffs argued that the ADRC would not be an alternative adequate forum because, among other things, the sizes of its awards are not comparable to tort awards in the US courts and its mechanisms channel all liability to TEPCO, relieving GE of any potential liability.⁴¹ In other words, they argued that the claimants would not be made whole. They also identified TEPCO's potential conflict of interest as both the alleged tortfeasor and a party having a role in making awards.

The District Court disagreed with the plaintiffs and held that the ADRC was an alternative adequate forum. It reasoned that the ADRC had awarded other claimants with compensation, even though GE was not the payor. It noted, moreover, that claimants still retained the right to sue TEPCO in the Japanese courts.⁴² Japan, in sum, provided some compensation, however incomplete. This, according to the court, was enough to render Japan an alternative adequate forum.

The court next turned to the balance of public and private factors. Noting the curious nature of the case, the District court expressed its belief that the Japanese plaintiffs’ preference for a US court was not entitled to deference because it seemed like impermissible forum shopping. It also assumed that Japanese law would apply in the case under Massachusetts conflict of laws precedents. Pointing to administrative difficulties of running such a trial in the United States, the court ruled in favor of GE and dismissed the case.⁴³

The US Court of Appeals for the First Circuit affirmed this decision on April 24, 2020, approving of the District Court's reasoning.⁴⁴ The theory of the litigation—the fact that navigating the interstices of treaty law potentially opened GE to liability—was ultimately held against the claimants.

For a time, the Imamura case raised the tantalizing possibility that producers of parts and expertise might be held liable for defects in their products. Though the plaintiffs’ efforts were unsuccessful in this case, the pathway remains open. A future meltdown, perhaps one with a more patently inadequate compensation or no compensation scheme at all, could yield a different result.

Conflict of Laws

Determining where a case will be heard is only a threshold question. Courts exercising jurisdiction must also determine which nation-state's laws will apply. As the Imamura court noted, a case litigated in the United States might involve the application of Japanese laws. The doctrines governing these questions are known as conflict of laws, or private international law.

Conflict of laws doctrines are understood as analogs to the public international law of treaties, discussed above. In the absence of applicable treaty law, they provide the doctrinal fabric that knits together different legal regimes across jurisdictions. Because these legal doctrines are domestic and vary between jurisdictions, the availability of compensation may turn on where the case is brought.

The Cooper litigation against GE, TEPCO, and several other suppliers showcased the operation of these doctrines and the stakes for the claimants.⁴⁵ For the Cooper plaintiffs, the choice of law question was outcome determinative, since TEPCO waived its jurisdictional defenses.⁴⁶ Under Japanese law, as explained above, the Japanese Nuclear Compensation Act would bar a lawsuit against GE and would establish limits on TEPCO's liability to each plaintiff. California laws, in contrast, opened up possibilities for recovery under tort (personal injury) laws since the US Federal law governing nuclear accidents, the Price-Anderson Act, only covers US-licensed facilities. While the plaintiffs urged the application of California law, GE and TEPCO argued the court should apply Japanese law to the dispute.⁴⁷

The Cooper trial court applied California's three step “governmental interest” analysis to determine which jurisdiction's laws should apply. This entailed assessing: 1) whether the laws of the jurisdictions differ, 2) whether both jurisdictions have a legitimate interest in the decision, and 3) assuming the prior two questions are answered in the affirmative, which state's interests would be most impaired if its laws were not applied—an analysis called “comparative impairment."⁴⁸

The Cooper court held that the first two elements of the analysis were satisfied. California state law might provide remedies that Japanese law would not. The court further held that both California and Japan have legitimate interests in the decision. While California has a strong interest in promoting product safety and preventing nuclear disaster, Japan has an interest as the place where the incident occurred as well as in the policy-aims of its compensation scheme.⁴⁹ The District Court's analysis therefore hinged on the question of comparative impairment.

Comparative impairment doctrines seek to tip the balance toward the laws of the state with the greatest interest in a conflict. The comparative impairment test asks which state's interests would face greater harm and then applies the laws of that state.⁵⁰ The Cooper plaintiffs argued at trial that California's interests would be more impaired because Japanese law would totally absolve GE—the supplier of parts and designs—from liability. This, they reasoned, would strip any incentive for GE or other companies to build safe reactors. The plaintiffs also contended that recovery from TEPCO under the Nuclear Compensation Act was impermissibly limited.⁵¹

The Cooper court held that Japan's interest in applying its Compensation Act uniformly and fairly to businesses outweighed California's interest in product safety. It concluded that Japanese laws should apply to the dispute. Since the Compensation Act channels all liability to the operator, the court dismissed the claims against GE. Noting the “overwhelmingly strong” interest of Japan in preserving its compensation scheme, the court also dismissed the claims against TEPCO.⁵² The US Court of Appeals for the Ninth Circuit affirmed the District Court's decision and reasoning almost ten years after the Fukushima meltdown, ending the claimants’ search for redress in the US courts.⁵³

Like Bartel and Imamura, however, Cooper nonetheless demonstrates the dramatic contingency of litigation in the interstices of the international conventions. The courts gave substantial weight, in the end, to the bilateral international relations between the US and Japan and to Japan's compensation system and policies. But the United States does not enjoy such close relations with all nuclear power states, and it remains an open question how rising nuclear-power states might handle compensation. The pathways exposed by the Fukushima cases remain open.

US Claimants in Japan?

The above cases involved lawsuits brought in the US concerning harms suffered in Japan. These cases highlighted the possibilities for interested parties to control compensation at the expense of those harmed by a meltdown. Yet the US courts have remained skeptical of plaintiffs’ motives and generally have deferred to defendants’ arguments for dismissal on a variety of grounds. But what of the reverse possibility—what if plaintiffs chose to sue in Japan seeking compensation for harms suffered outside of Japan?

A leading expert in Japanese private international law, Professor Masato Dogauchi, has argued that if any party sustained injuries from the Fukushima accident outside of Japan—for example if an American fisherperson claimed that his or her livelihood was impeded due to concerns about the effects of radiation on US fisheries—a Japanese court would hear the claim but would apply foreign law⁵⁴ (in this case, the law of the US state in which the fishing occurs) to the dispute to the extent that a claim could be maintained under Japanese law.⁵⁵

The implication is that a claim against TEPCO, which is allowable under Japanese law, would proceed according to the law of the US state to determine liability and compensation, but a claim against a US or foreign manufacturer of the nuclear power plant could not proceed, even if it were allowed under US state law, because a Japanese statute protects manufacturers of nuclear power plants from liability.

In the aggregate, these questions—especially those surrounding conflict of laws—will be an important dimension of any future cross-border claims for compensation for nuclear accidents. One can imagine, for example, an accident in Korea or China, neither of which are parties to any of the international conventions, leading to claims in Japan, based on the pollution of the environment in Japan. According to Professor Dogauchi, if any person suffered damage in Japan due to a nuclear accident outside of Japan—if for example a Japanese fisherperson sustained economic damages due to contamination of Japanese waters from a nuclear accident in Korea—the Japanese citizen could bring a lawsuit before Japanese courts and Japanese law would apply. In such a case, however, the Compensation Act would not apply, since that Act concerns only incidents occurring in Japan, so general principles of Japanese tort law in the Civil Code would determine the extent of liability and damages.⁵⁶

Conclusion

At one time, during the heart of the Cold War, the promotion of the nuclear power industry seemed an unqualified good to national and international lawmakers. But three disasters later, as victims attempt to rebuild and new states seek nuclear technologies it is time to reconsider the basis of the bargain.

Claimants’ attempts to recover in the interstices between treaty regimes have so far failed. Yet the challenges expose the ways in which the system as a whole favors pro-nuclear interests. Concerns of promoting safety in the supply of parts and designs fall to the wayside. Those affected by meltdowns, meanwhile, pay the price in the form of diminished financial recovery through administrative compensation regimes. The public at large may accept this state of affairs where, as here, the disputes involve two closely allied nation-states. But dynamics in global markets for nuclear energy suggest that the states’ interests will not always be so aligned.

Today, the nuclear power ecosystem is shifting toward emerging markets. While nuclear power faces economic and political woes in jurisdictions like the United States and Germany, other nation-states are pressing forward with nuclear development. The World Nuclear Association reports that twenty countries have plans to become nuclear-power states. Existing nuclear power states such as China, Korea, and India are pursuing plans to expand nuclear capacity. As more states build more nuclear reactors, the risk of a transboundary incident grows along with the possibility that nuclear nation-states might not have the political wherewithal or adequate resources to handle the transboundary aftermaths of a catastrophe. As we have seen throughout the report, the existing, imperfect system suffers from important defects in coverage. It also has substantial room for play at the joints, in the places where the uneven patchwork comes together in transboundary disputes.

Victims have driven these novel litigations as a means of having a voice in questions of compensation. Their recourse to the courts is unsurprising. Throughout the long history of international discussions of transboundary aspects of nuclear meltdowns, at-risk and harmed communities have been left out of serious conversations about legal standards and reforms. While Fukushima has prompted a new wave of discussions over third party liability within the IAEA, OECD, and similar organizations, it seems that claimants’ experiences in seeking compensation have remained less of a concern. Work remains to be done to understand their experiences of diverse compensation systems, their understandings of the complicated legal situation, and their preferences for addressing nuclear risk moving forward.

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1. See Pelzer 2007 ↩︎

2. For a detailed overview of the procedural histories of drafting at the IAEA see Szasz 1970, 703-709; and at the OECD see Schwartz 2007; Pelzer 2007 ↩︎

3. Borrás 2008, 31-42 ↩︎

4. Heffron, Ashley, and Nuttall 2016, 8-9 ↩︎

5. See Currie 2006, 85; Adisianya n.d. ↩︎

6. Source for Columns 2-5: World Nuclear Association, Table & Country Profiles (last visited 01/15/2021). Data vary by country as to year collected. Columns 6-13 include only states that have both signed and ratified or acceded to a convention. Data drawn from up-to-date lists available from OECD, and IAEA, (last visited 01/15/2021). ↩︎

7. One IAEA regulator proposed a convention on state liability, but this was widely dismissed as a “gimmick” to increase IAEA influence in comparison to OECD in the nuclear field. See TFC/PC/435, 1957, Folder: 201498441, OECD Archive. ↩︎

8. Detailed elaboration of these complicated conventions is beyond the scope of this chapter and has been covered in depth by legal commentators who, like Schwartz and Pelzer, have served in various capacities within these international organizations. For a detailed overview, see Schwartz 2010, 307-354; Pelzer 2010, 355-386 For extensive commentary on the IAEA regimes (the Vienna Convention and the Convention on Supplementary Compensation) see International Atomic Energy Agency, 2007 On the Paris regime see OECD, Revised Exposé des Motifs (Paris: OECD, 1982). ↩︎

9. Schwartz 2010, 310-311 ↩︎

10. Schwartz 2010, 312-313 ↩︎

11. Schwartz 2006, 42-44 As Schwartz explains, the SDR is unit of measure defined by the International Monetary Fund and tied to the value of the US Dollar, UK pound, the Euro, and the Japanese Yen. Her estimates, used in this text, were prepared according to the 2006 exchange rates. The exchange rate is about the same in 2021 as it was in 2006. ↩︎

12. Schwartz 2006 ↩︎

13. For summary of these change see Schwartz 2010, 21-61 ↩︎

14. See Schwartz 2010, 333 ↩︎

15. Schwartz 2010 ↩︎

16. On this principle, see Schwartz 2010, 320-321 ↩︎

17. Schwartz 2010, 320-321 ↩︎

18. For summary of these change see Schwartz 2010, 326-328 For a detailed recounting of all technical changes see International Atomic Energy Agency, 2007, 21-61. ↩︎

19. On this provision, see Pelzer 1988, 100-101 ↩︎

20. See Schwartz 2010, 321-322 ↩︎

21. See Schwartz 2006, 44 ↩︎

22. Schwartz 2010, 329-331 ↩︎

23. Kumori 2019 ↩︎

24. On the shifting supply market and participation of states within it see Kerr, Holt, and Nikitin 2014, 20-21 ↩︎

25. Heffron, Ashley, and Nuttall 2016, 9-10 ↩︎

26. See Schwartz 2010, 325 ↩︎

27. Schwartz 2006, 47; Schwartz 2010, 325 ↩︎

28. Schwartz 2006, 54 ↩︎

29. See Feldman 2015, 127; Lerner and Tanzman 2013, 543 ↩︎

30. Article 6 of the State Redress Act: “In cases where the victim is a foreign national, this Act shall apply only when a mutual guarantee exists.” ↩︎

31. See Fukushima District Court, Judgment, October 10, 2017, Hanrei Jihō Law Cases Reports, No. 2356, p. 3 (finding that the reciprocity requirement was satisfied with respect to Korea, China, the Philippines, and Ukraine). ↩︎

32. Cf. Tokyo High Court, Judgment, July 18, 2007, Hanrei Jihō, No. 1994, p. 36 (which rejected the claim on the ground of the injuries caused by the explosion of the hazardous gas thrown away in China by the Japanese army during the World War Two, but with the reason other than the place of the injury). However, recently, the Tokyo District Court held that the State Redress Act shall directly apply to a claim for damages in cases in which a Japanese civil servant has caused harm against a natural or legal person in the exercise of public authority in a foreign country. Tokyo District Court, Judgment, February 12, 2020 (Hei 30 (wa) No. 32649), unpublished (available at Westlaw Japan, 2020WLJPCA02128018). ↩︎

33. See Nomura, Hokugo, and Takenaka 2012, 21 ↩︎

34. See generally Bartel v. TEPCO, 2018 WL 312701 (S.D. Cal. Jan. 5, 2018) (hereinafter Bartel I); Bartel v. TEPCO, 371 F.Supp. 3d 769 (S.D. Cal. 2019) (hereinafter Bartel II); Cooper v. TEPCO, 2019 WL 1017266 (S.D. Cal. Mar. 14, 2019) (hereinafter Cooper). All three cases arise out of the same fact pattern, yet their procedural history is complicated due to a number of early deficiencies in the complaints. For the sake of simplicity, we supply citations to the most recent decisions in these cases. ↩︎

35. See Imamura v. GE, 371 F.Supp.3d 1 (D. Mass. 2019). ↩︎

36. See Bartel II, 371 F.Supp.3d at 785-789. ↩︎

37. Bartel II, 371 F.Supp.3d at 785-789. ↩︎

38. Bartel v. TEPCO, 2019 WL 5260743 (9th Cir. Jul. 30, 2019). ↩︎

39. Imamura, 371 F.Supp.3d at 5. ↩︎

40. Imamura, 371 F.Supp.3d at 7. ↩︎

41. Imamura, 371 F.Supp.3d at 7-10. ↩︎

42. Imamura, 371 F.Supp.3d at 7-10. ↩︎

43. Imamura, 371 F.Supp.3d at 10-14. ↩︎

44. Imamura, 371 F.Supp.3d at 15; Imamura v. GE, 2020 WL 1969460 (1st Cir. Apr. 24, 2020). ↩︎

45. See generally Cooper, 2019 WL 1017266. ↩︎

46. See Cooper, 2019 WL 1017266 at 10. ↩︎

47. See Cooper, 2019 WL 1017266. ↩︎

48. Cooper, 2019 WL 1017266 at 5-9. ↩︎

49. Memorandum of Points and Authorities in support of GE's Motion to Dismiss at 6, Bartel v. Tokyo Elec. Power Co., Inc., 17-CV-1671- JLS, 2018 WL 312701 (S.D. Cal. January 5, 2018). ↩︎

50. See Memorandum of Points and Authorities in support of GE's Motion to Dismiss at 7-9. ↩︎

51. Memorandum of Points and Authorities in support of GE's Motion to Dismiss at 7-9, 12-13. ↩︎

52. Memorandum of Points and Authorities in support of GE's Motion to Dismiss at 9-12. ↩︎

53. Cooper v. TEPCO, No. 19-55295 (9th Cir. May 22, 2020). ↩︎

54. Memorandum of Points and Authorities in Support of GE's Motion to Dismiss at 15, Imamura et al. v. General Electric Company et al, Docket No. 1:17-cv-12278 (D. Mass. November 17, 2017). ↩︎

55. Dōgauchi 2013, 131 However, Nomura, Hokugo, and Takenaka 2012, 21 argue that the application of California law would be problematic because it is unforeseeable from the point of view of the tortfeasor, although they give no reason for this argument. ↩︎

56. Article 22 (1) of the Hō no tekiyō ni kan suru tsūsoku-hō the Act on General Rules for Application of Laws: “If the obligations arising from a tort are governed by a foreign law, claims for damages or any other remedies under that law may not be claimed if the event does not constitute a tort under Japanese law.” ↩︎