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Since 1992, over 200 civilian residential and school buildings in Taiwan have been identified to have contained 60Co contaminated steel rebar emitting excessive gamma-radioactivity in living environments. These buildings were mostly constructed in early 1983 and 1984 by employing steels from one steel mill, which had recycled unknown 60Co orphan sources in northern Taiwan. In 1994, a group of residents who once stayed for a protracted period up to 10 y in the contaminated Ming-Sheng Villa filed a civil action against Taiwan's nuclear regulatory office, the Atomic Energy Council, for state tort compensation of 3.4 M U.S. dollars in equivalent. After three years of court processes, the Taipei District Court handed down a decision in partial favor of the exposed residents. Both parties soon appealed against this judgment to the Taiwan Appellate Court. This article analyzes the main legal issues involved, including government's obligations to prevent and eliminate contamination, to take preventive measures, and to take necessary remedial measures; and plaintiffs' assertion on any legal right against governmental offices. Moreover, discussion issues contain the scope of damage and compensation, causation analysis, absence of effective and efficient regulation over radioactive contamination, limit of tort compensation law and compensation amount, weight of medical evidence as well as role of expert witnesses, and related comparative legal studies.