Enewetak Decision Summary

 

In April 2000, the Tribunal issued a Memorandum of Decision and Order in the class action property damage claim of the People of Enewetak.  In deciding the first property damage claim, the Tribunal stated that “The goal of compensation, where there has been harm to property, should be to make the owner whole through the award of proper damages.  A general statement for determination of damages to land may be found at the Restatement (Second) Torts º929, Harm to Land from Past Invasions:

 

      “(1)  If one is entitled to a judgment for harm to land resulting from a past invasion and not amounting to a total destruction of value, the damages include compensation for (a) the difference between the value of the land before the harm and after the harm, or at his election in an appropriate case, the cost of restoration that has been or may be reasonably incurred, (b) the loss of use of the land, and (c) the discomfort and annoyance to him as an occupant.”

 

Restoration and Radiological Cleanup at Enewetak

In considering the various alternatives for radiological cleanup of Enewetak to the established standard that were presented, the Tribunal acknowledged that “Soil removal is a tested technology, and was utilized by the U.S. in Enewetak in past cleanup efforts.”  Based on the estimated volume of contaminated soil to be removed and replaced (from dredging the lagoon), the Tribunal awarded $22.5 million for this activity.  In addition, the Tribunal found that the most effective alternative for disposal of the contaminated soil was to use it to construct a causeway between two islands.  The Tribunal stated that such action “more fully protects the residents from risk of harm from exposure to radiation compared to other feasible local disposal options” and awarded $31.5 million for this activity.

 

Expert testimony presented to the Tribunal was in agreement that the major pathway of radiation exposure to residents of Enewetak would be ingestion of locally grown foods and that the primary radionuclide of concern was Cesium 137.  The Tribunal determined that application of potassium to the soil has been shown to block the uptake of Cs-137 in the atoll’s environment.  Such treatment, including ongoing monitoring, will be required for approximately 100 years and the Tribunal awarded $15.5 million for this activity.  It also awarded $33.8 million for soil rehabilitation and revegetation for a period of up to 50 years until the land is self sustaining.

 

The Tribunal also found that on Runit, the fifth largest island in the atoll, the residual Plutonium 239 from the tests exceeds the established limit and the island remains quarantined from use.  Stating that “Techniques now exist to clean up this plutonium, utilizing soil sorting methods applied at Johnston Atoll,” the Tribunal awarded $10 million for that activity.  The Tribunal also awarded $4.51 million for characterization surveys to provide information as to the exact location and nature of the contaminated soil to be removed and to ensure compliance with the prescribed cleanup standard.

 

The gross total awarded by the Tribunal for restoration and cleanup of Enewetak is $117,810,000.  In its Decision and Order, however, the Tribunal noted that “This total must be adjusted by the amount of the Enjebi Trust Fund, which the parties stipulated to be $10,000,000.”  The net total awarded for restoration and cleanup after this deduction is $107,810,000.

 

Loss of Use of Enewetak

 

For loss of use, the Tribunal decision acknowledged that “Both the United States and Marshall Islands Constitutions prohibit the taking of private property for public use without just compensation” and noted that “Representatives of the U.S. government committed that the relocated inhabitants of Enewetak would ‘be accorded all rights which are normal constitutional rights of citizens under the (U.S.) Constitution.’”

 

The Tribunal decision referred to a U.S. Supreme Court determination of damages for lost use [Kimball Laundry Co. v United States (1949) 338 US 1] in which it concluded that “the proper measure of such compensation is the rental that probably could have been obtained.”  In the Enewetak claim, the Tribunal calculated the value of the loss of use by multiplying the relevant annual rental value by the affected acreage and summing these values for the years the use of the land was lost to the owners.

 

To address that value, the Tribunal relied on a joint appraisal report offered by a team of experts consisting of two appraisal firms, one selected by the claimants and one by the Defender of the Fund.  While the appraisers acknowledged that there are circumstances in the Marshall Islands property ownership situation that create challenges to traditional appraisal methods, they also found that the transfer of land use rights for money has gained social acceptance and that from such transfers an analysis of comparables can be conducted on which relevant annual rental values can be based.

 

The Tribunal decision states that “The period of loss of use had two elements:  (1)  past loss, which began on December 12, 1947 (the date that the people were relocated from Enewetak to Ujelang) and ran until the date of valuation,  and (2)  future loss, which began on the date of valuation and continues until such time in the future as the affected property is returned to the people of Enewetak in usable condition, determined by the parties to be 30 years from the effective date of the valuation or May 17, 2026.”

 

Analysis of 174 transactions determined to be comparable to the property at issue resulted in annual rental values ranging from $41 per acre in 1947 to $4,105 per acre in 1996.  An adjustment for the deferred nature of the compensation for past loss of use was made by adding an interest component to the rental values, compounded using the average U.S. Treasury 30-year bond rate.  Based on the annual rental rates, the affected acreage, and number of years, the rental values for past lost use (including interest) amount to $304,000,000.

 

The Tribunal decision also noted, however, that “These values must be further adjusted for compensation already received by the People of Enewetak.”  Such compensation included payments made to the people of Enewetak in the amounts of $175,000 in 1956;  $1,020,000 in August 1969;  $750,000 in September 1976;  $750,000 in December 1978;  and annual payments of $3,250,000 from 1987 through 1999 pursuant to the Section 177 Agreement.  In addition, “In the case of Ujelang, the annualized use value for each year between 1947 and 1980 (when the people returned to Enewetak) is set off against the respective annual loss of use values for Enewetak.

 

“The value of past lost use, adjusted for prior compensation, is $149,000,000.”

 

To determine the compensation for future loss of use, the appraisers utilized an income capitalization approach.  This method is used to convert a single year’s income into an indication of present value by dividing the most current stabilized income by an appropriate rate of return, determined to be eight percent.  The calculated value was adjusted downward to reflect the annual $3,250,000 payments to the people of Enewetak under the Section 177 Agreement for 2000 and 2001.  The adjusted value of the award by the Tribunal for lost future use of Enewetak is $50,154,811.

 

Hardship Suffered by the People of Enewetak

 

Extensive and compelling evidence was presented regarding the hardships suffered by the people of Enewetak during their relocation to Ujelang.  Conditions there were characterized by famine, near starvation, and death from illness due to the severe limitations of the environment and resources on Ujelang.  There were also polio and measles epidemics, an uncontrollable infestation of rats, and infrequent and irregular field trip ship service.

 

In its decision, the Tribunal stated that “the conditions suffered by those relocated go far beyond simple annoyance.”  In determining the appropriate amount of compensation, the Tribunal adopted an approach based on an annual amount for each person on Ujelang for each of the 33 years between 1947 and 1980.  Recognizing that the period of greatest suffering was from 1956 to 1972, the Tribunal awarded an annual per person amount of $4,500 for each of those 16 years.  For the remaining 17 years, preceding and following that period, the annual amount is $3,000.  This means that an individual who was present on Ujelang for all 33 years will receive $123,000.

 

Based on the annual population figures for Ujelang during 1947 to 1980 and the per annum amounts, the damages for hardship amount to $34,084,500.

 

Summary of Enewetak Award Amounts

The net total of the Tribunal award in the Enewetak claim is $341,049,311.^[1]  This includes $199,154,811 for past and future loss of use of Enewetak Atoll, $107,810,000 to restore the atoll to a safe and productive state, and $34,084,500 for the hardships suffered by the people as a result of their relocation to Ujelang.

Full text of Enewetak decision