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PUBLIC SERV. ENTERPRISE GROUP v. PHILADELPHIA ELEC

August 24, 1989

PUBLIC SERVICE ENTERPRISE GROUP, INCORPORATED, and PUBLIC SERVICE ELECTRIC AND GAS COMPANY, Plaintiffs,
v.
PHILADELPHIA ELECTRIC COMPANY, Defendant, and ATLANTIC CITY ELECTRIC COMPANY, and DELMARVA POWER & LIGHT COMPANY, Plaintiffs, v. PHILADELPHIA ELECTRIC COMPANY, Defendant



The opinion of the court was delivered by: GERRY

 I. INTRODUCTION

 This case involves a clash among powerful business interests. The four corporate parties have had a lengthy history of cooperation, but have now directed their energy to litigating claims against one another.

 This litigation was fueled by the Nuclear Regulatory Commission's ("NRC") suspension of power operations at the Peach Bottom Atomic Power Station ("Plant" or "Station") in Delta, Pennsylvania. These operations were suspended on March 31, 1987 after the NRC was informed that operators at the plant were sleeping on duty; the NRC did not authorize their resumption until April 17, 1989, some time after oral arguments on this motion were heard.

 This power outage darkened the demeanor of the plant's co-owners: Philadelphia Electric Company ("PECO"); Public Service Electric and Gas Company and its wholly-owned subsidiary Public Service Enterprise Group, Incorporated (collectively "PSE&G"); Atlantic City Electric Company ("Atlantic City"); and DelMarVa Power & Light Company ("Delmarva").

 The Peach Bottom Nuclear Plant was built and continues to operate pursuant to an agreement among these four companies. The plant commenced commercial operations in 1974, and consists of two 1,065 megawatt nuclear reactors. The companies' respective ownership shares are, as established by the Owners Agreement entered into on November 21, 1971, as follows: PSE&G (42.49%), PECO (42.49%), Atlantic City (7.51%), and Delmarva Power (7.51%). Agreement at Article 2.1 (Appended to PSE&G's Complaint as Exhibit C).

 The shutdown of the plant ignited the lawsuits sub judice. Under the agreements among the owners, PECO pledges to "operate and maintain the station" for the owners as if it were owned solely by PECO. Agreement Art. 12, § 12.1. In performing this role PECO is to "act as an independent contractor responsible for the result to be obtained, i.e., generation of power and energy at the Station, as economically and reliably as is practicable. . . ." Id. PECO is the licensed operator for the Peach Bottom plant, and therefore subject to all applicable statutes and regulations, especially those administered by the NRC. PECO's Answer to PSE&G's Complaint at paras. 13, 14, and 15.

 On July 27, 1988, PSE&G filed a lawsuit alleging, inter alia, that PECO's conduct of the operations at Peach Bottom was in breach of the Owners Agreement and was also tortious. That same day a similar complaint was filed by Atlantic City Electric and Delmarva Power. The cases have been consolidated for most pre-trial purposes.

 Jurisdiction over both complaints is founded on diversity of citizenship. 28 U.S.C. § 1332. Plaintiff Delmarva is a Delaware and Virginia corporation having its principal place of business in Wilmington, Delaware. Plaintiff Atlantic City Electric is a New Jersey corporation with its principal place of business in Pleasantville, New Jersey. Plaintiff PSE&G collectively consists of two New Jersey corporations having their principal places of business in Newark, New Jersey. Defendant PECO is a Pennsylvania corporation having its principal place of business in Philadelphia, Pennsylvania. Venue is proper because PECO is doing business and is licensed to do business in this district. 28 U.S.C. § 1391(2)(c).

 The essence of both complaints is as follows: (1) that the Owners' Agreement required PECO to efficiently maintain and operate the plant; (2) that PECO failed to do so and therefore the plant was shut down by the NRC for a lengthy period of time and suffered physical damage; (3) that PECO was aware of various problems at Peach Bottom, or should have been, and did not, as it was required to do, apprise the co-owners of the problems and, in fact, affirmatively misrepresented the status of the plant; and (4) as a result of PECO's actions the co-owners not only lost the power output they usually derive from Peach Bottom but incurred additional and substantial maintenance and repair costs, and fines from regulating authorities.

 The plaintiffs seek redress in tort and contract. The Atlantic City/Delmarva complaints consists of two counts: count one, a breach of contract count, and count two, a tort count which includes allegations of negligence, gross negligence, wilful and wanton misconduct, fraudulent misrepresentation and negligent misrepresentation. PSE&G's complaint contains five self-styled "claims for relief": breach of contract, tort, failure to disclose, fraudulent misrepresentation and negligent misrepresentation. Compensatory damages and interest thereon are sought with respect to each of these tort claims, punitive damages are sought on the gross negligence, wilful and wanton misconduct, and fraud claims. PECO now moves to dismiss the tort claims contained in the plaintiffs' complaints.

 II. MOTION TO DISMISS

 PECO's argument on this motion to dismiss is that tort remedies do not exist under the applicable law, either that of Pennsylvania or New Jersey, when misfeasance in the performance of a contract is the basis for plaintiffs' claims and the only damages suffered are economic in nature. PECO contends that the plaintiffs' complaints fail to allege facts upon which a claim for relief in tort may be granted. Fed. R. Civ. P. 12(b)(6).

 In ruling upon PECO's motion "we follow, of course, the accepted rule that a complaint should not be dismissed unless it appears beyond doubt that plaintiffs can prove no set of facts in support of [their] claims which would entitle [them] to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). The question before us becomes whether, after viewing the facts pleaded in the complaints in the light most favorable to the plaintiffs and resolving every doubt in their favor, their complaints state any valid claim for relief in tort. 5 C. Wright & A. Miller, Federal Practice and Procedure : § 1357, at 601 (1969). To the extent parties have presented factual evidence to support or oppose this motion to dismiss, we have excluded it from consideration and will not rely upon it, with the exception of the owners' agreement which was appended as an exhibit to the complaints. In any case, the exhibits submitted have primarily consisted of pleadings or opinions filed or produced for other cases the parties believe are analogous to this one.

 III. FACTUAL ALLEGATIONS

 A. The Agreement

 The agreement essentially apportions the benefits and burdens of building and operating the plan in accordance with the ownership shares. That is, expenses, such as operations and maintenance costs, are allocated on the basis of ownership shares, as is the "hourly energy generation"; i.e., the power produced. Atlantic City/Delmarva Complaint paras. 9, 15 ("ACE/DPL Complaint"), Agreement Art. 3, Art. 4. The agreement among the power companies leaves primary responsibility for the operation of Peach Bottom to PECO. However, Article 16 of the agreement establishes an owners' committee comprised of one representative from each company, the responsibilities of which include "coordinating the administration of all matters pertaining to the . . . operation and maintenance of Peach Bottom. . . ." Agreement Art. 16. The owners also established an "Operations and Maintenance Committee" ("O&M") to "review general performance and operations at Peach Bottom as well as proposed capital expenditures and expense budgets and to make recommendations on these matters to the Owners' Committee." PSE&G Complaint para. 11. These committees meet on a quarterly basis by telephone conference. Id.

 PECO provides them with a daily status report on the plant's operations. Id.; Agreement Art. 13, § 13.1 (PECO "shall keep ACE, DPL and PS fully informed of the status of the Station. Operations shall be scheduled so as to result in the maximum practicable benefit to the signatories from the utilization of the Station output.") In addition, PECO is required to assign "sufficient trained personnel to operate the Station in a reliable and economical manner, such personnel to be employees solely of PE[CO]." Agreement Art. 12, § 12.1.

 Moreover, under the agreement PECO is the NRC licensed operator of Peach Bottom and, as such, is responsible for the safe operation of the plant. ACE/DPL Complaint para. 16. As the licensed operator, PECO has a duty to the public and its co-owners to comply with the laws and regulations covering nuclear power facilities. ACE/DPL Complaint para. 17; PSE&G Complaint para. 13. Among its other legal duties PECO must comply with 10 C.F.R. §§ 55.54(k) by having a licensed or senior operator "present at the controls at all times during the operation of the facility." ACE/DPL Complaint para. 18; PSE&G Complaint para. 14, and with NRC Regulatory Guide 1.114 which provides:

 
In order for the operator at the controls of a nuclear power plant to be able to carry out these and other responsibilities in a timely fashion, he must give his attention to the condition of the plant at all times. He must be alert in order to ensure that the plant is operating safely and must be capable of taking action to prevent any progress toward a condition that might be unsafe.

 ACE/DPL Complaint para. 19; PSE&G Complaint para. 15.

 PECO is also subject to several other regulations concerning the training of plant personnel and staffing at the plant. ACE/DPL Complaint para. 18; PSE&G Complaint para. 14. And pursuant to 10 C.F.R. § 50, Appendix B, PECO is responsible for establishing and maintaining a quality assurance program to ensure that the plant is run safely. ACE/DPL Complaint para. 20.

 B. PECO's Alleged Failures

 PECO's mismanagement of the Peach Bottom plant allegedly began as early as 1985. During that year, PECO received warnings from the NRC and the Institute of Nuclear Power Operations ("INPO") *fn1" that Peach Bottom's performance was not up to industry standards. PSE&G Complaint para. 16. These criticisms were not communicated to PSE&G. Nor were the most serious of these warnings conveyed to Atlantic City Electric and Delmarva Power. ACE/DPL Complaint paras. 23, 24. Instead, PECO told PSE&G that it had made significant improvements in conditions at Peach Bottom.

 In January of 1986, for example, INPO sent a letter to PECO's Chairman and CEO stating that "standards of performance at . . . [Peach Bottom] are unacceptably low," and rated Peach Bottom's overall performance "in the MARGINAL category of plant performance." ACE/DPL Complaint para. 24 (emphasis in original.) This letter and other INPO warnings were not disclosed to the other owners. Id.

 The crucial failure of PECO, however, supposedly lies in its failure to act on warnings by six General Electric Senior Reactor Operators ("GE SRO's") that PECO control room personnel were routinely sleeping on the job or otherwise being inattentive to their duties. These GE SRO's were working under contract with PECO to help in improving the plant's performance in response to INPO and NRC criticism. PSE&G Complaint paras. 17, 18.

 PECO did not report these incidents of sleeping on the job to the NRC or its co-owners. Id. Instead, PECO made presentations to the Owners' Committee in November and December 1986 indicating that there were no major problems at the plant and that all the concerns raised by the NRC and INPO were being addressed. These presentations involved an improvement program designed to rectify problems at the plant. However, the program "did not identify gross operator inattentiveness as a problem despite the reports of this behavior." Id. para. 19.

 Reports of inattentive behavior continued to be made to PECO in the period from December 1986 to February 1987. Despite this, PECO submitted a status report to the co-owners stating that there were no major problems at the plant. Id. at para. 20.

 On March 24, 1987, the NRC was informed, presumably by the GE SRO's, that Peach Bottom control room operators were sleeping on duty. The NRC initiated a 24 hour-a-day inspection coverage at the plant's control room. On March 31, 1987, the NRC issued a shut-down order, which stated in part:

 
(1) At times during various shifts, in particular the 11:00 p.m. to 7:00 a.m. shift, one or more of the Peach Bottom operations control room staff (including licensed operators, senior licensed operators and shift supervision) have for at least the past five months periodically slept or have been otherwise inattentive to licensed duties.
 
(2) Management at the Shift Supervisor and Shift Superintendent level have either known and condoned the facts set forth in Paragraph one, or should have known of these facts.
 
(3) Plant management above the shift superintendent position either knew or should have known the facts set forth in Paragraph one and either took no action or inadequate action to correct this situation.

 Id. para. 23 (Shut-down Order Appended as Exhibit A to PSE&G's Complaint); ACE/DPL Complaint para. 35. Based on these findings, the NRC found that there was not a reasonable assurance that the plant was being operated "in a manner to assure that the health and safety of the public [would] be protected" and ordered that power operations at the plant cease. Shutdown Order at 5, ACE/DPL Complaint para. 38.

 In the period following shut-down, PECO is alleged to have been uncooperative with INPO and NRC in responding to their suggestions about the need for management restructuring at PECO's nuclear operations division, and ineffective in redressing the problems leading to the shutdown. ACE/DPL Complaint paras. 39-44; PSE&G Complaint paras. 28-43. Aside from its delays in making the changes necessary to get Peach Bottom reauthorized for power operations, PECO is alleged to have continued to misrepresent the condition of the plant's operations and the status of the restart effort. Id.

 At oral argument there was some question as to whether either of the complaints contained allegations that physical damage to the plant resulted from PECO's failure to maintain the plant. Published newspaper reports indicate that earlier this year one-third of the surface area of the plant was contaminated with radiation, which had leaked from pipes PECO failed to maintain. Atlantic City Electric and Delmarva Power amended their complaint at our request, to add specific allegations of physical damage. PSE&G did not choose to do so, believing that its complaint, if broadly read, already encompassed such a claim. In any case, we will read both complaints as alleging such property damage.

 C. Damages

 The plaintiffs allege that the shutdown of the plant and the physical deterioration of the plant which resulted from PECO's failures has caused them hundreds of millions of dollars in damages. These consist of: (1) the cost of replacing power usually generated by the plant; (2) lost profits; (3) increased operations and maintenance costs; (4) expenditures to clean up and repair portions of the plant not adequately maintained by PECO; and (5) additional capital expenditures and other costs associated with the shutdown. Estimates of the cost of the shutdown to PECO and its co-owners have been placed in the $ 735 million range; $ 235 million of which PECO has described as "the tremendous cost of the fix", that is, the cost of maintenance, repairs and new operational procedures. ACE/DPL Complaint para. 48.

 IV. LEGAL ANALYSIS

 Thanks to the diligent and capable efforts of counsel, our analysis is informed by numerous opinions written by the courts of this Circuit and the States of New Jersey and Pennsylvania, among others.

 There can be no reconciliation of all that we have seen on our journey to the region of the tort-contract border. We cannot explain or make consistent the decisions of all these courts; no one can. What we must do is isolate the fundamental, basic principles which underlie those decisions and attempt to apply them to the dispute before us. This is no easy task, as root principles have not been universally agreed upon, and, because of shifting policy concerns, slight contextual differences can result in drastically different exposure to tort liability. But we have done our best, mindful that any uncertainty counsels against granting PECO's motion. With these initial thoughts in mind, we turn to the issues before us.

 A. Choice of Law

 As our jurisdiction is based on diversity of citizenship, it is state law which must provide the substantive law to govern this dispute. But which state's law?

 The contestants in the Atlantic City/Delmarva-PECO bout both believe their fight should be determined by Pennsylvania law. However, PSE&G argues that New Jersey should supply the substantive law governing its action. PECO argues that we need not engage in a premature choice-of-law analysis, since it is entitled to dismissal of all the plaintiffs' tort claims under either Pennsylvania or New Jersey law. Atlantic City/Delmarva insist that dismissal would be improper under either of these states' laws. PSE&G urges us to apply New Jersey law to its claim and deny PECO's motion.

 To make a choice of law in a diversity case, a federal court must apply the conflicts of law principles of its forum state. Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 496-97, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941). Therefore, if we are to make a choice, we must look to New Jersey's conflicts doctrine. New Jersey applies a governmental interest approach to conflicts questions, which requires:

 
a two-step analysis. The court determines first the governmental policies evidenced by the laws of each related jurisdiction and second the factual contacts between the parties and each related jurisdiction. A state is deemed interested only where application of its laws to the facts in issue will foster that state's policy.

 Henry v. Richardson-Merrell, Inc., 508 F.2d 28, 32 (3d Cir. 1975). This second step requires a qualitative rather than a quantitative weighing in which "only contacts which are likely to promote valued state policies are considered relevant." Id.

 PSE&G has made a spirited argument that New Jersey would apply its own law to PSE&G's dispute with PECO. It points out that two of the parties to these two complaints are from New Jersey, one is from Pennsylvania, and the other from Delaware and Virginia. Thus, PSE&G says, "the factor of the parties' citizenship is for all practical purposes neutralized inasmuch as the . . . interests which are identified effectively cancel each other out. . . ." Blakesley v. Wolford, 789 F.2d 236, 241 (3d Cir. 1986). Moreover, the fact that Peach Bottom is in Pennsylvania is, in itself, deceiving since these same parties are co-owners of the Salem nuclear facility in Salem, New Jersey.

 Further, while PECO's alleged misconduct took place in Pennsylvania, its misrepresentations were transmitted into New Jersey. Most importantly, the injuries suffered by PSE&G because of PECO's failures occurred in New Jersey and "New Jersey cases have almost uniformly applied New Jersey law in instances in which the state had a significant compensation interest, viz., where the plaintiff was a New Jersey domiciliary." Schum v. Bailey, 578 F.2d 493, 496 (3d Cir. 1978). This policy interest, along with New Jersey's interest in deterring tortious behavior by persons whose behavior affects New Jersey residents, is overriding and would lead New Jersey courts to choose their own law.

 PECO admits that the parties' citizenship is a neutral factor but insists that the relevant relationship between the parties is centered firmly in Pennsylvania. Pennsylvania is the site of Peach Bottom, and PSE&G voluntarily contracted with PECO, a Pennsylvania corporation, to build and operate the plant there. The joint efforts with respect to the plant were pursued under the Peach Bottom Owners Agreement, which contains a clause indicating it "shall be construed, interpreted and controlled by the laws of the Commonwealth of Pennsylvania." Agreement para. 26.1.

 Not only did the conduct which PSE&G complains of take place in Pennsylvania, but so did, PECO claims, the injury to PSE&G's ownership interest in the Pennsylvania plant. More significantly, Pennsylvania's governmental interest is superior to New Jersey's because this case involves a complaint against a Pennsylvania public utility brought by a plaintiff which "expressly availed itself of Pennsylvania law in making the contract." PECO Reply Brief at 32. In such a circumstance, New Jersey will defer to Pennsylvania's "interest in effectuating its policy of disallowing recovery in tort for economic loss stemming from commercial disputes with its resident corporations." Id. at 33.

 Luckily for the court, PECO has agreed to bear its burden on this motion by fighting under both New Jersey and Pennsylvania law. For if under both sets of law PECO is entitled to dismissal of the plaintiffs' tort claims, we need not make a choice of law. Rohm & Haas Co. v. Adco Chemical Co., 689 F.2d 424, 429 (3d Cir. 1982) ("When . . . a 'false conflict' exists, New Jersey conflicts of law rules permit the resolution of the case without a choice between the laws of the two states.")

 Given this posture, we decline PSE&G's invitation to engage in a choice of law analysis at this time. The parties have devoted very little of their attention to the oft-times complicated factual and legal considerations relevant to such an analysis. If we must, we will at an appropriate time, address these issues. *fn2" For now we will consider the sufficiently complex question of whether plaintiffs' complaints state a claim for tort relief under Pennsylvania or New Jersey law. Though the parties have discussed the two states' laws concurrently, we will try, for the sake of clarity, to discuss them separately.

 Our task is complicated by the fact that neither the Pennsylvania nor the New Jersey Supreme Court has addressed the precise question raised by this motion. Thus, our duty is to predict how these courts would decide this motion. In engaging in this exercise in prediction "we must consider relevant state precedents, analogous decisions, considered dicta, scholarly works, and any other reliable data tending convincingly to show how the highest court in the state would decide the issue at hand." Aloe Coal Co. v. Clark Equipment Co., 816 F.2d 110, 117 (3d Cir. 1987), quoting McGowan v. Univ. of Scranton, 759 F.2d 287, 291 (3d Cir. 1985); see also, Pennsylvania Glass Sand v. Caterpillar Tractor Co., 652 F.2d 1165, 1167 (3d Cir. 1981); Jones & Laughlin Steel v. Johns-Manville Sales, 626 F.2d 280, 285 (3d Cir. 1980). We are admonished not to disregard a ruling of a Pennsylvania or New Jersey intermediate appellate court unless we are convinced that the decision would have been decided otherwise by the relevant State Supreme Court. Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S. Ct. 1776, 18 L. Ed. 2d 886 (1967), cited in Jones v. Laughlin Steel, 626 F.2d at 285, n.10. With this in mind, we proceed.

 B. Contending Viewpoints

 This motion presents us with a choice initially between competing visions of Pennsylvania law. Setting forth these contending viewpoints as argued by the parties seems of value, so we do so. We start with the movant's argument. *fn3"

 1. PECO's Argument

 It is this bargain plaintiffs seek to evade. By pleading these tort claims, plaintiffs seek to foist hundreds of millions of dollars of damages upon PECO for breach of an obligation to its co-owners it never undertook -- something which they cannot do consistent with Pennsylvania law.

 a. The Economic Loss Doctrine

 PECO's motion to dismiss is based on its view of both the definition of and the appropriate application of the so-called "economic loss doctrine." This doctrine bars a plaintiff from recovering purely economic losses suffered as a result of a defendant's negligent or otherwise tortious behavior, absent proof that the defendant's conduct caused actual physical harm to a plaintiff or his property. *fn4" As PECO sees it, this doctrine serves not only as a check on the imposition of limitless liability on negligent actors with respect to unforeseen or unlikely plaintiffs, but also as a boundary between tort and contract liability for parties in privity. That is, when a plaintiff alleges that a defendant's improper performance of a contract resulted in merely economic losses such as power replacement costs and lost profits, and not physical harm to property other than property which is the subject of the maintenance contract between the parties, the economic loss doctrine bars a tort recovery and leaves the plaintiff to his contractual remedies. Indeed, when only economic losses are at stake, the existence of a contract or the validity of an exculpatory clause therein are not really relevant, since such losses are simply not redressable in tort.

 There is no gain-saying the fact that Pennsylvania law is hostile to the recovery of economic losses in tort, at least with respect to parties not in contractual privity. Margolis v. Jackson, 375 Pa. Super. 182, 543 A.2d 1238, 1240 (1988) (Pennsylvania "cases clearly limit the extent that a negligent tortfeasor will be made legally liable for an economic loss caused directly or indirectly by the tortfeasor's negligent act or conduct. Purely economic loss, when not accompanied with or occasioned by physical injury, is considered beyond the scope of recovery even if a direct result of the negligent act."); accord Moore v. Pavex, 356 Pa. Super. 50, 514 A.2d 137 (1986); Aikens v. Baltimore & Ohio R. Co., 348 Pa. Super. 17, 501 A.2d 277, 279 (1985) ("To allow a cause of action for negligent cause of purely economic loss would be to open the door to every person in the economic chain of the negligent person or business to bring a cause of action. Such an outstanding burden is clearly inappropriate and a danger to our economic system.")

 Pennsylvania courts have refused to relax this doctrine even when the plaintiff's allegations of economic loss stemmed from the serious and well-known nuclear incident at Three Mile Island. In Com. of Pa. v. General Public Utilities Corp., 710 F.2d 117 (3d Cir. 1983), the Court of Appeals for the Third Circuit, inter alia, reviewed a summary judgment order entered against plaintiffs, who were a group of governmental entities who sought to recover damages, e.g. increased civil defense costs, they allegedly suffered as a result of the TMI incident. The district court had granted summary judgment for the defendants on the grounds that the plaintiff pled only purely economic loss and "courts have consistently refused to recognize a cause of action in negligence or strict liability for economic injury unattended by physical injury or damage to real or personal property." In re TMI Litigation Governmental Entities Claim, 544 F. Supp. 853, 857 (M.D. Pa. 1982) vacated and remanded, sub nom 710 F.2d 117 (3d Cir. 1983).

 The Court of Appeals held that though plaintiff's complaint did not contain any claim for direct physical damage to property, such as public buildings, "there was the contention by plaintiffs that increased radioactivity . . . emitted during the nuclear incident . . . rendered the public building unsafe for a temporary period of time and constituted a physical intrusion upon the plaintiff's properties." 710 F.2d at 122-23. Though the court refused to speculate on whether such a showing would suffice to establish physical harm and serve as a basis for recovery, the court indicated that the "plaintiffs should be permitted to develop the facts upon which these contentions may be tested ". *fn5" Id. at 123.

 Just last year the Pennsylvania Superior Court considered another case arising out of Three Mile Island and confronted the question of whether there was a nuclear accident exception to the economic loss rule. The court held that there was no such exception. Gen. Publ. Util. v. Glass Kitchens of Lancaster, Inc., 374 Pa. Super. 203, 542 A.2d 567 (1988).

 The plaintiffs in Glass Kitchens were associated with the tourist industry in Lancaster County, Pennsylvania. They sought to recover damages for economic loss allegedly suffered because of a diminution of tourists caused by the Three Mile Island nuclear incident. The case reached the Superior Court on this certified question of law:

 
Where plaintiffs waive the right to seek damages their properties might have suffered from contamination after a nuclear accident, are such accidents at nuclear power plants an exception to the general tort rule that a plaintiff must sustain personal injury or property damage as a prerequisite for recovery of economic loss?

 Id. at 570.

 The court answered in the negative, holding that there is no nuclear accident exception to the economic loss rule. Id. at 571. While Pennsylvania courts recognize that persons or property who have come into contact with radiation or nuclear fall-out "will suffer a direct and predictable actual injury," this did not relieve the plaintiffs of proving that the TMI incident "resulted in actual physical injury or property damage." Id. at 571. Only by making such a showing could a plaintiff recover for economic loss in tort. Id. Likewise, the Second Circuit, while acknowledging that nuclear power plants may in the case of an accident cause injury on a grand scale, held that if the only harm plaintiff suffered was economic then the economic loss rule operated to bar ...


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