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Federal appeals court dismisses case against GE over Fukushima nuclear disaster
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Federal appeals court dismisses case against GE over Fukushima nuclear disaster

The US Court of Appeals for the First Circuit affirmed the dismissal of a lawsuit by numerous Japanese individuals and business who hoped to sue General Electric (GE) over its role in building and maintaining the reactors that exploded in the 2011 disaster at the Fukushima nuclear power plant in Japan.

The Japanese plaintiffs had sued the company in federal court in Massachusetts, and they contended that this was the appropriate forum because Japanese laws that governed liability for the disaster precluded them from recovering damages from GE if they sued in Japan. The district court, however, dismissed the case last April on the grounds of “forum non conveniens,” holding that Japan, not US federal court, is the adequate forum for the plaintiffs to recover for their losses. The plaintiffs appealed and argued in the First Circuit that the district court incorrectly assessed the adequacy of their legal relief in Japan, but the appeals court disagreed, stating on Friday that they agreed with the lower court and, on a couple of points, that they “have little difficulty concluding that the district court did not abuse its discretion.”

Compensation for the Fukushima disaster in Japan is covered by a 1961 law addressing nuclear damages—the Compensation Act. The Compensation Act creates a complex scheme with several ways for injured parties to recover, and it ultimately places all liability for Fukushima in the Tokyo Electric Power Company (TEPCO) that operated the plant. The plaintiffs in the lawsuit against GE, as well as millions of others, had recovered money from TEPCO in Japan through lawsuits, claims directly to the company, and mediated processes. But the plaintiffs in this case also wanted to recover money from GE, which had built, designed or maintained all the reactors at Fukushima, and, according to the plaintiffs, were responsible for some of what went wrong there during the tsunami in 2011. The plaintiffs sued in Massachusetts because GE is headquartered there.

GE argued, however, that the case should be dismissed because an adequate forum exists in Japan and that practical considerations favor litigating there. GE noted that it was available to be served process in Japan and subject to jurisdiction there. The Massachusetts District Court held that GE met its burden of showing it an inappropriate forum when it dismissed the case in April 2019. When the plaintiffs appealed, the First Circuit noted, their “sole argument as to adequacy” was that “because the Compensation Act channels all liability for damages claims relating to the [] disaster to TEPCO, ‘there is no forum in Japan, judicial or otherwise’ which permits them ‘to pursue [their] claims against GE.'” Thus, the plaintiffs claimed, Japanese law “effectively extends to GE blanket immunity for its role in the FNPP disaster,” and GE’s offer of being served in Japan rung hollow.

But the First Circuit agreed with the lower court that “the fact that Plaintiffs could sue TEPCO—who by statute is strictly liable … indicated that Japan provided a sufficiently adequate remedy so as to render it an available forum.” “Plaintiffs offered no basis,” they noted, “for the district court to conclude that such compensation is so unsatisfactory that it is no remedy at all.”

“So long as Japanese courts continue to allow Plaintiffs their day in court, where they may obtain full and fair compensation—regardless of which entity ultimately foots the bill—there is no meaningful absence of jurisdiction,” the First Circuit said. Further, the court noted, even if they allowed the claims to go forward in federal court in Massachusetts, legal rules would likely mean that Japanese law applied to the case. Thus, even in US court, GE could probably invoke the Compensation Act to argue that only TEPCO was liable.