Monday, March 14, 2011

Southern Nuclear Operating Co. AL, & GA v. U.S.

Mar 11: In the U.S. Court of Appeals, Federal Circuit, Case No. 2008-5020. Appealed from the United States Court of Federal Claims. Plaintiffs Southern Nuclear Operating Company, Alabama Power Company, and Georgia Power Company (collectively, plaintiffs) filed suit in the Court of Federal Claims (Claims Court) against the United States, alleging that the United States Department of Energy (Energy) had partially breached contracts by failing to accept spent nuclear fuel (SNF) for storage beginning on January 31, 1998. The Claims Court granted summary judgment for plaintiffs on liability. It then held a trial to determine damages for storage costs incurred that would not have been necessary if Energy had fulfilled its obligation to begin accepting SNF in 1998. S. Nuclear Operat-ing Co. v. United States, 77 Fed. Cl. 396, 460 (2007). The Claims Court also determined that the United States waived its defense that the "unavoidable delays" clause of its contracts precluded expectancy damages. Id. at 452–59. The Appeals Court vacated-in-part the damage award and remanded to the Claims Court for further consideration with respect to two of three power plants (Plant Hatch and Plant Vogtle, owned by GA). However, the Appeals Court affirmed the damage award for one plant (Plant Farley, owned by AL) and affirmed the Claims Court's conclusion that the United States waived its "unavoidable delays" defense.
    The United States argued that these storage costs at all three plants would also have been incurred in the non-breach world (i.e., if Energy had performed) and that, therefore, the government's breach did not cause the plaintiffs to make these expenditures. The Claims Court concluded that the plaintiffs' mitigation measures were incurred as a result of Energy's breach, and it awarded $2,716,000 for the rerack at Plant Vogtle; $17,278,000 for dry storage costs at Plant Farley; and $57,203,080 for dry storage costs at Plant Hatch. On appeal, both parties agree that the $3,186,000 award for Plant Hatch was made in error.
    Access the complete opinion (click here).