3 Mile Island "consequential damages"
The (in)famous Three Mile Island site is scheduled to close on Friday, Sept 30th. Have you ever thought about what the corporate liability is for the consequential damages of that partial reactor melt down? Having had a close call myself with a TVA operated nuclear reactor, I can tell that thought very clearly crossed my mind and I learned several lessons to pass on to you.
As I drove home after work on my birthday, I received a call from a sales manager indicating that TVA had called and indicated that they believed due to network equipment newly installed from Cisco System that they could no longer see their control screens. If this was not corrected in the next hour they would have to shut down the reactor.
My first thought was, “An hour? They are OK with an hour? How long would I be OK with the pilot of the plane I am on not being able to see his instruments?”
My next thought was “I wonder what the cost to restart a reactor is?”
I finally got to the most relevant thought of “How can we solve the problem?"
Fortunately, in the wake of the 3 Mile Island “event” a sweeping set of safety controls and regulations were mandated throughout the industry. I felt we had a safe, albeit inadequate, amount of time to address the problem. The issue was we did not have any personnel living nearby the facility with which to respond. Customer support takes on a whole different level of concern when the systems you support are not accessible and can have what the military would call “high consequence outcomes”.
The rest of the story….
I was able to locate a field systems engineer who was within driving distance, but, unfortunately, running a 103 degree temperature. I explained the situation and he was willing to go in and see if he could resolve the issue. Thanking him profusely, I sat back and waited like I was sitting in a movie theater watching the M&M ad before the movie starts where the clock is counting down and they are trying to cut the right wire.
Fifty minutes later, the engineer called and indicated everything was back up and operational. It turned out that someone had brought a competitor’s network equipment into a lab which somehow had connectivity to the operational network. That competitor’s equipment had failed and was sending out a blinding amount of packets on the controls network effectively shutting it down. The engineer literally was able to find the bad equipment, convince security to let him into the locked lab, and pulled the plug in the nick of time.
1. High consequence environments require high levels of support; local support.
2. People need to be invested in the mission of the organization.
That engineer did not get up out of his sick bed and travel to the site because he was going to get paid any more or any less. There was no public health threat. The threat was to the company and its good name. A manager he trusted and respected was asking for him to go above and beyond what his job required. He decided to go. He was a corporate hero that day and it was because the value of the corporation mattered to him and the relationship he had with his management was trusted.
3. Always check your agreements for clauses having to do with “consequential” damages.
As I have learned since that day and as those lawyers reading this post will note, consequential damages clauses are not always clear or even necessary. It is more important to pay attention to clauses that limit liability for “direct damages” or “indirect damages”. “Consequential damages” as a term of art are those damages that “are so remote that they were beyond the contemplation of the parties at the time they entered into the contract”.
Now, can you tell me whether a nuclear reactor melt down or a nuclear reactor shut down due to communications equipment being impacted by a rogue device is “beyond the contemplation of the parties”?
The best answer is not a legal one. The best answer is give great customer support.