United States v. Cotter Corp., N.S.L.

The Price-Anderson Act, Pub. L. No. 85-256, 71 Stat. 576, authorized the federal government to “enter into agreements of indemnification with its contractors” under “contracts for the benefit of the United States involving activities under the risk of public liability for a substantial nuclear incident,” in order to provide government indemnification against “public liability arising out of or in connection with the contractual activity.” § 4, 71 Stat. 577 (42 U.S.C. 2210(d) (1964)). In this case, respondent is not a government contractor. It is instead a private, downstream purchaser of nuclear material that was originally produced under a contract between the government and another party for the benefit of the United States’ atomic-weapons program, but the government then sold the material “as is” to yet another party, and the material passed through still more private hands before respondent purchased the material for its own benefit and then allegedly mishandled the material. The question presented is as follows: Whether a downstream purchaser’s liability for mishandling nuclear material that the purchaser obtained for private benefit, but that was originally produced more than a decade earlier under a government contract with another party, is subject to indemnification by the United States under the original government contract because it qualifies as “public liability arising out of or in connection with the contractual activity” under 42 U.S.C. 2210(d). (I)