Consumers Energy Co. v. United States

84 Fed. Cl. 152, 2008 U.S. Claims LEXIS 287, 2008 WL 4447053
CourtUnited States Court of Federal Claims
DecidedSeptember 30, 2008
DocketNo. 02-1894 C
StatusPublished
Cited by6 cases

This text of 84 Fed. Cl. 152 (Consumers Energy Co. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Consumers Energy Co. v. United States, 84 Fed. Cl. 152, 2008 U.S. Claims LEXIS 287, 2008 WL 4447053 (uscfc 2008).

Opinion

OPINION

DAMICH, Chief Judge.

I. INTRODUCTION

This matter is one of several concerning a standardized contract (“the Standard Contract”) between nuclear utilities and the United States Department of Energy (“DOE”) for disposal of spent nuclear fuel (“SNF”) and/or high-level radioactive waste (“HLW”). Plaintiff, Consumers Energy Company (“Consumers Energy”), entered into the Standard Contract with DOE on June 3, 1983. Pursuant to the Standard Contract, DOE was to commence acceptance of SNF and HLW not later than January 31, 1998. As of today, DOE has not yet accepted any SNF or HLW.

On December 16, 2002, Consumers Energy filed a four-count complaint against Defendant, the United States (“the Government”). On July 1, 2003, Count IV, which alleged an illegal extraction of SNF storage costs, was dismissed. Of Consumers Energy’s remaining counts, Count I alleges a partial material breach by DOE, Count II asserts that DOE breached its implied covenant of good faith and fair dealing, and Count III claims a taking of its vested contract rights and real property without just compensation.

On April 29, 2005, this Court granted summary judgment in favor of Consumers Energy on the issue of contractual liability. All that remains before the Court is a determination of damages. Currently, before the Court is the Government’s renewed motion to dismiss Count III (takings claim) of Consumers Energy’s complaint. The Court, having previously held that the Government is liable for its breach of the Standard Contract, holds that Count III—taking without just compensation—does not state a claim upon which relief can be granted; therefore, the Government’s motion to dismiss is GRANTED.

II. BACKGROUND

On January 7, 1983, Congress enacted the Nuclear Waste Policy Act (“NWPA”), 42 U.S.C. §§ 10101-10270 (1982). The NWPA authorized DOE “to enter into contracts with any person who generates or holds title to [HLW] or [SNF] of domestic origin for the acceptance of title, subsequent transportation, and disposal of such waste or spent fuel.” Id. § 10222(a)(1). Pursuant to the NWPA, DOE drafted the Standard Con[154]*154tract1 providing for the Government’s acceptance, transportation, storage, and disposal of SNF and HLW, the costs of which would be borne by the “generators and owners” thereof. Id. § 10131(b)(4).

Consumers Energy is a utility company organized and incorporated in Michigan. Compl. 113. At the time its complaint was filed it owned the shut-down Big Rock Point Nuclear Plant (“Big Rock”) in Charlevoix, Michigan and the operating Palisades Nuclear Plant (“Palisades”) located near Covert, Michigan. Id. Big Rock’s SNF is held in on-site dry cask storage and Palisades stores its SNF in its spent fuel pool and in on-site dry storage. Id.

After Consumers Energy filed its four-count complaint, the Government then filed a motion to dismiss Consumers Energy’s takings (Count III) and illegal extraction (Count IV) claims. Mot. to Dismiss Counts III and IV (Jan. 3, 2003). Briefing on this motion was completed on March 24, 2003. The Court dismissed Consumers Energy’s illegal extraction claim (Count IV) on July 1, 2003. Consumers Energy Co. v. United States, 57 Fed.Cl. 278 (2003).2

Subsequently, the Court found that DOE was liable for partial breach of the Standard Contract and the parties began settlement negotiations. Consumers Energy Co. v. United States, 65 Fed.Cl. 364, 373-75 (2005). While the parties attempted to settle this matter the case was stayed. Order (June 9, 2005). At the parties’ request, the stay was lifted on June 9, 2006, and a schedule set for discovery on damages. Order (June 9, 2006). On August 9, 2007, the Government filed the instant renewed motion to dismiss Count III (takings). Initial briefing was complete on September 26, 2007; however, upon review the Court determined that supplemental briefing was required. Order for Supplemental Briefing (Feb. 8, 2008). Supplemental briefing was completed on March 7, 2008.

III. DISCUSSION

A. Standard of Review

The Rules of the United States Court of Federal Claims (“RCFC”) allow for dismissal upon a motion for “failure to state a claim upon which relief can be granted____” RCFC 12(b)(6). Here, the threshold issue under RCFC 12(b)(6) is whether Consumers Energy has alleged “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007) (applying Fed.R.Civ.P. 12(b)(6), which is identical to RCFC 12(b)(6)). When evaluating a motion to dismiss the “unchallenged allegations of the complaint should be construed favorably to the pleader.” Hamlet v. United States, 873 F.2d 1414, 1416 (Fed.Cir.1989) (citing Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974)). The Court must not dismiss a complaint unless it is beyond doubt that a plaintiff can prove no set of facts that would allow for relief. Davis v. Monroe County Bd. of Educ., 526 U.S. 629, 654, 119 S.Ct. 1661, 143 L.Ed.2d 839 (1999) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

B. Takings Law

Any analysis in a case that alleges a taking must begin with the Fifth Amendment, which provides that private property shall not “be taken for public use, without just compensation.” U.S. Const, amend. V. To allege a taking a plaintiff must possess a valid property right affected by government action that purportedly constitutes a taking. Karuk Tribe of Cal. v. Ammon, 209 F.3d 1366, 1374 (Fed.Cir.2000). Because there is no dispute regarding Consumers Energy’s ownership of Big Rock Point Nuclear Plant and Palisades Nuclear Plant, this Court is [155]*155left to determine if Consumers Energy’s property right has been affected by the government such that a taking has actually occurred.3 Id.

According to Consumers Energy’s two theories of recovery in Count III, DOE’s failure to begin acceptance of SNF not later than January 31, 1998, as required by the Standard Contract, constitutes a taking of Consumers Energy’s vested contract rights, on the one hand, and its real property, on the other. Compl. H 42. Based on a review of binding precedent, Consumers Energy’s allegations of a taking of its vested contract rights and real property must be dismissed. Strickland v. United States, 423 F.3d 1335, 1338 n. 3 (Fed.Cir.2005) (citing Crowley v. United States, 398 F.3d 1329, 1335 (Fed.Cir.

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84 Fed. Cl. 152, 2008 U.S. Claims LEXIS 287, 2008 WL 4447053, Counsel Stack Legal Research, https://law.counselstack.com/opinion/consumers-energy-co-v-united-states-uscfc-2008.