By Alan R. Malasky:

As reported recently in a variety of publications (e.g., Inside OSHA, Inside Green Business, and the Risk Policy Report), possible approaches to limit liability for accidental releases of nanomaterials are currently being reviewed by key members of the Senate Commerce Committee. According to sources, the review is being spearheaded by Senator Mark Pryor (D. AR), the chairman of the Senate subcommittee having jurisdiction over consumer affairs, product safety and insurance industry issues. 

This congressional interest is occurring precisely at the time that the nanotechnology industry stands poised at the threshold of significant technological advances. Some or all of those advances, however, could be stymied or substantially delayed by the possibility of major product liability litigation. At the same time, federal agencies, particularly the EPA, are looking into the potential risks associated with the unique properties found in nanomaterials, and are examining whether, and if so, what, regulatory changes may be necessary to address those risks. 

One possible model for limiting liability for the accidental release of nanomaterials was advanced by David Berube, a professor at the University of South Carolina and the communications director for the International Council of Nanotechnology, in an article in the December 2006 issue of the Nanotechnology Law & Business Journal. Professor Berube posits that Congress should consider legislation similar to the 1970 Price-Anderson Act, which protects the U.S. nuclear power industry by capping liability for nuclear accidents so long as industry members purchase all available insurance. Under, Professor Berube’s approach, the liability of individual producers of nanoscale particles and nanoproducts would be capped, but injured parties could, in some cases, be awarded compensation from a group fund. The liability cap would not be permanent, but would remain in place while the EPA and other agencies evaluate the risks posed by nanomaterials. Whether Congress adopts this approach or something similar to it remains to be seen, but pressure for Congress to enact some statutory protection to ensure that innovative uses of nanomaterials continue to be developed seems inevitable.