Almost two decades after federal agents raided the now defunct Rocky Flats nuclear weapons plant, U.S. district court judge John Kane ordered the Dow Chemical Company and Rockwell International Corporation to pay nearly $1 billion to as many as 13,000 local residents to compensate them for deflated property values. The June 2 order marks the largest damages verdict ever entered in Colorado.
An appeal is already planned, and under indemnification agreements with both companies, the U.S. Department of Energy is liable for the damages. (Rockwell International no longer exists; its defense units were acquired by Boeing Co. in 1996.)
Although the federal government owns the plant, which once made plutonium triggers for nuclear warheads, the two companies long had contracts to operate it: Dow from the 1950s until 1975, and Rockwell from 1975 until 1989. In December 1989, the Federal Bureau of Investigation shut the plant down after its investigations revealed that environmental crimes may have been committed there. (In 1992 Rockwell, which was operating the plant at the time of the raid, entered into a plea bargain with the U.S. Department of Justice, pleading guilty to ten counts of environmental crimes and paying a $19 million fine. Dow was not part of that case.)
Within months of the shutdown, nearby residents filed a class action against both companies in federal district court in Denver, claiming that Dow and Rockwell's negligent disposal of plutonium and other nuclear waste damaged property values. The residents claimed that both companies were liable for trespass, by allowing pollutants to enter their property, and nuisance, by interfering with their enjoyment and use of their property.
Over the next decade and a half, the suit was reassigned to a series of judges. Discovery was prolonged.
Early on, lawyers for the residents struggled to force the Department of Energy to produce key documents through third-party subpoenas, including records on 2,600 pounds of missing plutonium. In 1995 the judge held the Department of Energy, as a third-party indemnitor, in contempt for failing to comply with attorneys' subpoenas. The case stalled for the next several years as both companies moved to strike the testimony of the residents' expert, arguing that it was inadmissible because of a lack of scientific grounding. But the residents prevailed in most of the Daubert motions, and a four-month jury trial began in October 2005.
The total damages ordered by the judge-$926 million-includes 18 years of prejudgment interest on the compensatory damages. The judge ordered Dow to pay compensatory damages of $653 million, and Rockwell $508 million, but capped the combined damages award at $726 million. Under the order, Dow is also liable for $111 million, and Rockwell for $89 million, in punitive damages.
But under indemnity agreements negotiated when the government contracted with each company, Energy will be paying for both. Following the judgment earlier this month, the government confirmed its obligation to indemnify Boeing Co. Boeing carries full liability for Rockwell since its acquisition of Rockwell's defense unit.
Dow and Rockwell filed notices of appeal June 19.
For plaintiffs Cook et al.
Berger & Montague: Merrill Davidoff, Peter Nordberg, David Sorensen, and associates Jenna MacNaughton-Wong and Ellen Noteware. (Davidoff, Nordberg, Noteware, and Sorensen are in Philadelphia; MacNaughton-Wong has since left the firm.) The firm was lead counsel. Local Colorado lawyers contacted the firm for its expertise in class action and environmental lawsuits.
Waite, Schneider, Bayless & Chesley: Stanley Chesley and associates Paul De Marco, Jean Geoppinger, and Louise Roselle. (All are in Cincinnati.) The firm was co-trial counsel. A Denver lawyer referred clients to the firm because of its experience representing workers and residents near another nuclear weapons plant.
Silver & DeBoskey: Gary Blum, Bruce DeBoskey, and Steven Kelly. (Blum and Kelly are in Denver; DeBoskey has since left the firm.) The firm was local counsel.
For defendants The Dow Chemical Company (Midland, Michigan) and Rockwell International Corporation (Milwaukee)
Kirkland & Ellis: Ellen Ahern, David Bernick, Doug Kurtenbach, Scott McMillin, Mark Nomellini, and Jane Park. (All are in Chicago.) The firm, lead counsel for Dow from the beginning and for Rockwell since 1996, is Dow's longtime litigation counsel and has represented Rockwell in other mass torts.
Goodwin Procter: John Aldock, Heather Anderson, Michael Giannotto, Patrick Hanlon, Michael Isenman, Mark Raffman, Valerie Ross, Joseph Yenouskas, and counsel David Beers. (All are in Washington, D.C.) The firm Shea & Gardner, which merged with Goodwin Procter in 2004, led negotiations with the federal government over the terms of indemnification of Rockwell. Shea & Gardner withdrew in 1996, when the Department of Energy directed Kirkland to provide a common defense for Dow and Rockwell.
Sherman & Howard: Joseph Bronesky. (He is in Denver.) The firm served as local counsel.
For indemnitor the United States of America
In-house: At the U.S. attorney's office in Denver: assistant U.S. attorney Stephen Taylor.
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