“Damages and Injury: Smith v. Carbide and Chemicals Corporation and the Application of Kentucky Law Under the Price-Anderson Act”

Appearing in JNREL Vol. 22. No.2 this comment was written by former Articles Editor Cole Adams. The abstract was written by staff member John Hendricks.

The Price-Anderson Act was enacted in 1957 to encourage private sector development of nuclear power and provide insurance to private corporations in the event of a nuclear accident. The act also created a federal cause of action for accidents and injuries arising from the actions of nuclear power plants. While the federal courts have jurisdiction for actions under the Price-Anderson Act, these courts are required to adhere to state substantive law. In Smith v. Carbide and Chemicals Corporation, the Kentucky Supreme Court provides guidance on the applicable rules of intentional trespass and damages for an action under the Price-Anderson Act.

In 1988, the containments trichloroethylene and technetium-99 were found to be flowing from the groundwater of the Paducah Gaseous Diffusion Plant ("PDGP"). PDGP is located ten miles west of the town of Paducah, Kentucky and while contamination did not exceed regulatory levels, residents of the area were provided with new water sources. Contaminated groundwater was detected to be originating from PDGP again in 1990. Finally, in 1997 a lawsuit was filed in federal court seeking recovery for diminution in property values as a result of the contaminated ground water. On appeal of summary judgment for the defendant the Kentucky Supreme Court granted certification to answer questions of Kentucky law.

The Court first examined whether proof of actual harm was required to state a claim for intentional trespass. Relying on Ellison v. R & B Contracting, Inc. it was held that actual harm was not a required element to maintain a claim of intentional trespass. Secondly, the Court addressed whether proof of diminution in property values due to an intentional trespass gave rise to a right to recover. Acknowledging the common law principal that any encroachment on to the property of another was sufficient to support a finding of actual injury, the Court acknowledged more than nominal damages could be awarded. Finally, it was stated that the measure of damages should be the diminution in the fair market value of the property.

Smith, could have potential long term implications for environmental litigation in the state of Kentucky. The majority's opinion provides the possibility of increased litigation of environmental trespass cases. It appears that intentional trespass cases now have a stronger chance of surviving motions for summary judgment and reaching a jury. The author of the comment provides a more in-depth analysis of the case, as well as an excellent summary of the dissent in Smith and the case's potential impact on the Commonwealth.