Justia Government Contracts Opinion Summaries

In 1983, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. 10101–10270, to provide for government collection and disposal of spent nuclear fuel and high-level radioactive waste. The NWPA authorized the Department of Energy to contract for disposal. In return for payment of fees into the Nuclear Waste Fund, the Standard Contract provided that the DOE would begin to dispose of SNF and HLW not later than January 31, 1998. Because collection and disposal did not begin, courts held that the DOE had breached the Standard Contract with the nuclear energy industry. The trial court found breach of plaintiff's contract, but granted summary judgment in favor of the government regarding the implied covenant of good faith and fair dealing and set damages for the breach at $10,014,114 plus the cost of borrowed funds for financing construction of a dry fuel storage project. On reconsideration, the trial court reduced damages to $9,735,634 and denied the cost of borrowed funds. The Federal Circuit affirmed with respect to borrowed fund, but and reversed denial of overhead costs. View "System Fuels, Inc. v. United States" on Justia Law

Plaintiff, which owned a nuclear power plant, entered into the standard U.S. Department of Energy contract, under which DOE agreed to collect spent nuclear fuel (SNF) no later than 1998. DOE never began collecting SNF and has breached contracts nationwide. Massachusetts restructured the electric utility industry and, in 1999, the plant sold for $80 million; buyer agreed to accept decommissioning responsibilities for $428 million. The district court awarded $40 million for the portion of the decommissioning fund corresponding to projected post-decommissioning SNF-related costs attributable to DOE’s continuing breach. The court awarded the buyer $4 million in mitigation damages, including direct and overhead costs for new spent fuel racks and fees paid to the NRC. The Federal Circuit reversed in part and remanded. Plaintiff cannot recover damages under a diminution-of-value theory in a partial breach setting. The sale of assets does not alter the principle that when the breaching party has not repudiated and is still expected to perform, anticipated damages are not recoverable until incurred. A non-breaching party may recover from the government indirect overhead costs associated with mitigation and the costs of financing those activities. View "Boston Edison Co. v. United States" on Justia Law

In 1983, Congress enacted the Nuclear Waste Policy Act, authorizing contracts with nuclear plant utilities, generators of spent nuclear fuel (SNF) and high-level radioactive waste (HWL) under which the gVovernment would accept and dispose of nuclear waste in return for the generators paying into a Nuclear Waste Fund, 42 U.S.C. 10131. In 1983, the Department of Energy entered into the standard contract with plaintiff to accept SNF and HLW. In 1987, Congress amended the NWPA to specify that the repository would be in Yucca Mountain, Nevada. The government has yet to accept spent fuel. The current estimate is that the government will not begin accepting waste until 2020, if at all. In 2001, plaintiff began constructing dry storage facilities to provide on-site storage for SNF rather than to continue using an outside company (ISFSI project). The Court of Federal Claims awarded $142,394,294 for expenses due to DOE’s breach; 23,657,791 was attributable to indirect overhead costs associated with the ISFSI project. The Federal Circuit affirmed. Breach of the standard contract caused plaintiff to build, staff, and maintain an entirely new facility; the ISFSI facilities had not existed prior to the breach and were necessitated by the breach. View "So. CA Edison Co. v. United States" on Justia Law

The City of Newkirk and Kay Electric Cooperative both provide electricity to Oklahoma consumers. "When a city acts as a market participant it generally has to play by the same rules as everyone else. It can't abuse its monopoly power or conspire to suppress competition. Except sometimes it can. If the city can show that its parent state authorized it to upend normal competition [. . . ] the city enjoys immunity from federal antitrust liability. The problem for the City of Newkirk in this case is that the state has done no such thing." Kay sued Newkirk alleging that the City engaged in unlawful tying and attempted monopolization in violation of the Sherman Act, 15 U.S.C. 1,2. The district court refused to allow the case to proceed, granting Newkirk's motion to dismiss after it found the City "immune" from liability as a matter of law. Upon review, the Tenth Circuit found that the state did not authorize Newkirk to enter the local electricity market as it did in this case. The Court reversed the district court and remanded the case for further proceedings. View "Kay Electric Cooperative v. City of Newkirk" on Justia Law

The U.S. Department of Energy breached its agreement to accept spent nuclear fuel from nuclear power utilities, including plaintiff, a Wisconsin power cooperative, no longer in operation. Plaintiff maintains 38 metric tons of spent uranium on its property. Had DOE not breached the agreement, the material would have been removed in 2006. Plaintiff joined a consortium of 11 utilities to develop a private repository. The district court awarded about $37.6 million: $16.6 million for maintaining the fuel on-site from 1998 to 2006, $12 million for investment in the consortium, and $6.1 million for various overhead costs associated with mitigation. The Federal Circuit vacated in part. The claims court properly determined that plaintiff was entitled to damages for the entire period, 1999-2006; properly awarded overhead; properly offset the consortium costs; but should have limited the award with respect to the consortium to expenses incurred for mitigation. View "Dairyland Power Coop. v. United States" on Justia Law

The Alcoa Power Generating Company ("Alcoa") petitioned for review of two orders of the Federal Energy Regulatory Commission ("Commission") with respect to the relicensing of its Yadkin Project facilities in North Carolina. At issue was whether the petition for review was ripe in light of on-going state administrative review and stay of certification and whether the certifying agency waived its authority by not issuing a certification that was effective and complete within one year under section 401 of the Clean Water Act ("Act"), 33 U.S.C. 1341(a)(1). The court held that the petition was ripe for review where the waiver issue was fit for review and the legally cognizable hardship that Alcoa would suffer from delay sufficed to outweigh the slight judicial interest in the unlikely possibility that the court may never need to decide the waiver issue. The court also held that there was no waiver issue where the "effective" clause would not operate to delay or block the federal licensing proceeding beyond section 401's one-year period.

The Pacific Regional Director of the Interior Department's Minerals Management Service ("Director") caused four oil and gas leases off the coast of California, for which appellants had originally paid the United States over $140 million, to expire. The Director later testified that he based his decision solely on political considerations and that absent such considerations, he would have extended the leases instead. At issue was whether the Interior Board of Land Appeals ("IBLA") should have adopted the decision the Director said he would have made absent political influence in order to cure the Director's original decision of political taint. The court affirmed the district court's decision and held that the IBLA fulfilled its role and appellants received all they were entitled to, i.e., an agency decision on the merits without regard to extrastatutory, political factors.