A three-judge panel of the 9th U.S. Circuit Court of Appeals in San Francisco said a lower court erred in its ruling because plaintiff Gloria Wise's case fell outside the statute of limitations.
However, the appeals court remanded the case to U.S. District Court to determine whether Wise had the information necessary to file a claim within the required three years of being found to have the disease.
The ruling was significant because it could mean the claims of hundreds of other plaintiffs would be barred by time, said Kevin Van Wart, an attorney for defendants General Electric Co., DuPont Co. and UNC Nuclear Inc.
Richard Eymann, a plaintiffs attorney, said he did not yet know how many other clients could have their cases against the contractors dismissed as a result of the statute of limitations. Since 1990, more than 2,300 people have sued over health problems they believe were caused by exposure to radioactive emissions from the site.
Wise was among six plaintiffs who claimed that they were exposed to radiation during the 1940s when they were children living downwind from Hanford, near Richland.
The cases were largely based on the release of iodine-131, a radioactive byproduct of nuclear weapons production. Iodine-131 concentrates in the thyroid gland, which regulates the body's metabolism.
In 2005, a federal jury awarded $317,251 to Wise and $227,508 to Steve Stanton. The same jury in the three-week trial was deadlocked for Shannon Rhodes and ruled against the autoimmune disease claims of three other women.
But on Tuesday, the appeals court granted new trials for Wanda Buckner, Shirley Carlisle and Kathryn Goldbloom, who have hypothyroidism, a condition that slows the body's metabolism.
The district court erred in ruling that the plaintiff's doctor could not testify that he wrote articles on I-131's effect on thyroid cells, which allowed the doctor's testimony to be inadmissible.
"We thus have no choice but to reverse the verdicts against plaintiffs Goldbloom, Carlisle, and Buckner and remand for a new trial," Chief Circuit Judge Mary M. Schroeder wrote for the panel.
The panel denied an appeal by Rhodes but upheld the $227,508 award for Stanton.
Under law, the government pays the damages and the costs of defending the contractors.
The government created Hanford in the 1940s as part of the top-secret Manhattan Project to build the atomic bomb. Contractors operated reactors and other facilities that historical documents say resulted in intentional and accidental releases of toxic chemicals and radiation.
Residents learned of the emissions only when the government declassified thousands of documents in 1986.
People in Arizona, Nevada, Utah and the Marshall Islands have received compensation for being exposed to radiation during the atomic buildup.
Those who simply lived downwind from Hanford site have had a more difficult time because health studies have offered differing opinions on whether they have suffered substantial or chronic exposures that threatened their health.
It is difficult to prove, in part because thyroid disorders are not caused only by exposure to radiation.
The appeals court also rejected the plaintiffs' request to expand the test for causation when there are potentially multiple causes, such as radiation, smoking, genetics or pregnancy.