Atlas Corp. v. United States

35 Cont. Cas. Fed. 75,578, 15 Cl. Ct. 681, 1988 U.S. Claims LEXIS 182, 1988 WL 114650
CourtUnited States Court of Claims
DecidedOctober 31, 1988
DocketNos. 281-83C, 143-84C, 144-84C, 565-84C, 576-84C, 579-84C, 580-84C and 581-84C
StatusPublished
Cited by11 cases

This text of 35 Cont. Cas. Fed. 75,578 (Atlas Corp. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Atlas Corp. v. United States, 35 Cont. Cas. Fed. 75,578, 15 Cl. Ct. 681, 1988 U.S. Claims LEXIS 182, 1988 WL 114650 (cc 1988).

Opinion

OPINION

MEROW, Judge:

Plaintiffs are corporations, or successors to corporations, which participated in the contractual uranium procurement program of the then Atomic Energy Commission (AEG). This program commenced in the 1940’s and ended in 1970. As a result of recent scientific understanding as to the hazards of low level radiation, waste residues of the uranium production process, known as mill tailings, must now be stabilized at considerable expense. In this litigation, plaintiffs seek to recover this expense from the United States.

In each case defendant moves, pursuant to RUSCC 12(c) and 12(h)(2), for judgment on the pleadings. It is asserted that plaintiffs failed to state a claim for relief. Each plaintiff has filed a brief in opposition to the government’s motion and defendant has responded. Consolidated oral argument has been held.

As this matter comes before the court on a motion for judgment on the pleadings, the allegations in the complaints are considered to be correct. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). These allegations must, however, be examined in the relevant historical context and, to this end, in resolving the issues raised, the court may also consider certain material outside the pleadings such as official documents, matters of general public record and historical publica[684]*684tions. Hohri v. United States, 586 F.Supp. 769, 773 (D.D.C.1984), aff'd, 847 F.2d 779 (Fed.Cir.1988). See McNamara Construction, Ltd. v. United States, 206 Ct.Cl. 1, 5, 509 F.2d 1166, 1168 (1975).

The AEC’s contractual uranium procurement program involved in the instant claims spawned considerable prior litigation in the United States Court of Claims and the resulting reported decisions and findings of fact set forth relevant official documents and historical context. See Gay v. United States, 174 Ct.Cl. 420, 356 F.2d 516, cert. denied, 385 U.S. 898, 87 S.Ct. 202, 17 L.Ed.2d 130 (1966); Industrial Uranium Co. v. United States, 180 Ct.Cl. 50, 376 F.2d 868 (1967).

Background

Starting in the late 1940’s and proceeding through the 1950’s, the United States government was involved in the development of the domestic uranium processing industry. The government entered into-contracts with various private companies for the production of uranium concentrate and thorium through the AEC. The AEC was succeeded by both the Nuclear Regulatory Commission (NRC) and the Department of Energy (DOE). The uranium production process produces waste residues known as mill tailings which emit a low level of radiation into the environment, mainly in the form of Radon 222, which is a radioactive gas. At most production facilities, i.e., “mills,” the producers have deposited the tailings in large “tailings piles” in areas near to the mills. The tailings are now recognized to pose other potential environmental hazards.

The plaintiffs in these cases were either awarded a production contract by the AEC or have acquired or merged with the original contractor and have succeeded to the interests and obligations under the original contracts and subsequent modifications. In the case of the Kerr-McGee Chemical Corporation, the plaintiff is the successor in interest to thorium nitrite production contracts, the performance of which also created mill tailings with radon emissions. No significant differences between thorium or uranium production has been raised in this matter.

As set forth in the pleadings and described in the above-cited decisions of the Court of Claims, it is undisputed that in the 1950’s the AEC conducted an aggressive uranium development program. The AEC policy is described in Findings 11, 13, 45 in Gay v. United States, 174 Ct.Cl. at 440-41, 468, 356 F.2d 516, which summarize the AEC’s Domestic Uranium Circulars, as then published in the Federal Register, as follows:

11. Beginning in 1948, the AEC formulated its program for development of domestic sources of uranium, and its announced policy was to stimulate private industry to engage in wide-spread prospecting, exploration and development of uranium ore reserves, and, since the United States was to be the sole purchaser of uranium, to give adequate guarantees as to the price and period of purchase in order that private industry could finance and operate uranium mines and mills.
In repeated public announcements, the AEC made plain its policy to limit its direct purchase of uranium ores, and to have uranium mills privately owned and operated, with raw material procurement by the AEC to be principally in the form of uranium concentrates sold by the mills to the AEC under negotiated written contracts.
sic s¡c * * *
13. The AEC considered and rejected early in the formulation of its domestic uranium program the establishment of a uniform price at which it would purchase uranium concentrate from the mills. It could not arrive at a uniform price because it was impossible to forecast operating costs and depreciation schedules for different milling operations.
Consequently, the AEC determined and announced publicly that all uranium concentrate purchases would involve individually negotiated contracts for the construction and operation of privately owned mills, with the contracts providing for purchase of the mill concentrates, the [685]*685price to be arrived at by taking into account the ore cost and the estimated milling cost, including plant amortization and profit.
* * * * * *
45. The terms of all uranium concentrate or mill contracts were individually negotiated between AEC and the various private companies who owned and operated the mills. It was necessary to investigate and establish that sufficient reserves of uranium ore of adequate grade were available to sustain miling operations for an adequate period of time, that such available ores were amenable to economical metallurgical processing, that adequate design had been prepared for the mill, that the proposed mill operator had management ability and financial capacity, and that an acceptable price to the AEC could be reached. The contract price for uranium concentrate varied from contract to contract and was negotiated on the basis of consideration of such factors as the “ore cost,” determined by application of the Circular 5 price schedule to both captive and custom ores, the estimated milling costs, which varied depending upon the size of the mill and the metallurgical process required for the particular ore, amortization of the cost of the mill in relation to the life of the uranium concentrate contract, and a reasonable profit to the mill owner, arrived at by consideration of capital investment and related factors.
* * * * * #

Accordingly, it is not disputed in this matter that the AEC uranium purchase contracts were individually negotiated with the producers with the fixed price per pound of uranium concentrate that the AEC would pay determined, for the contract periods involved, on the basis of the ore cost, the estimated milling costs, plant amortization over the contract period and a reasonable profit.

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Bluebook (online)
35 Cont. Cas. Fed. 75,578, 15 Cl. Ct. 681, 1988 U.S. Claims LEXIS 182, 1988 WL 114650, Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlas-corp-v-united-states-cc-1988.