Pacific Gas & Electric Co. v. United States

70 Fed. Cl. 758, 2006 U.S. Claims LEXIS 82, 2006 WL 950207
United States Court of Federal Claims·Decided March 30, 2006·No. No. 04-74C·Published·Cited by 9 cases

Opinion

OPINION AND ORDER

HEWITT, Judge.

The court has before it Defendant’s Motion to Strike Portions of the Expert Report of Brad Cornell Related to Future Damages (Def.’s Str. Mot. or Motion to Strike), PG & E’s Opposition to Motion to Strike Cornell Expert Witness Report Related to Future Damages (Pl.’s Str. Resp.), and Defendant’s Reply in Support of Motion to Strike Portions of the Expert Report of Brad Cornell Related to Future Damages (Def.’s Str. Reply). Defendant moves the court to “strike those portions of the expert report of Dr. Bradford Cornell, served by plaintiff ..., that reflect PG & E’s attempts to recover damages that post-date the filing of its amended complaint on January 28, 2004.” Def.’s Str. Mot. at 1.

Subsequent to the filing of defendant’s Motion to Strike and plaintiffs response, plaintiff filed with the court PG & E’s Motion to Establish Time Frame for Consideration of Future Damages (Pl.’s TF Mot. or Time Frame Motion), a related motion requesting the court “to establish a time frame for consideration of future damages.” Pl.’s TF Mot. at 1. Also before the court is responsive briefing to plaintiffs Time Frame Motion, including Defendant’s Response to PG & E’s Motion to Establish Time Frame for Consideration of Future Damages (Def.’s TF Resp. or Time Frame Response) and PG & E’s Reply on Motion to Establish Time Frame for Consideration of Future Damages (Pl.’s TF Reply or Time Frame Reply).1 Because the issues in the Motion to Strike and the Time Frame Motion are closely related, the court addresses both defendant’s Motion to Strike and plaintiffs Time Frame Motion in this Opinion.

I. Background

Plaintiff, Pacific Gas & Electric Company (PG & E), filed its complaints (collectively, Compl.)2 in this court on January 22, 2004, seeking damages arising from a partial breach of the Department of Energy’s (DOE)’s contractual obligation under the Nuclear Waste Policy Act of 1982 (NWPA) “to implement and operate a program for the removal and ultimate disposal of spent nuclear fuel and high-level nuclear waste ... from commercial nuclear power plants.” Compl. H l.3 Plaintiff subsequently filed amended complaints (collectively, Am.Compl.) seeking the same relief on January 28, 2004. The parties have since completed discovery in this case with the exception of any outstanding discovery to be completed pursuant to previous orders of the court or any outstanding motions regarding discovery issues. See Order of February 18, 2005 (ordering fact discovery to conclude on or before October 21, 2005); Order of March 1, 2006 (ordering depositions of expert witnesses to be completed on or before April 14, 2006).

This case is one of 59 cases that are currently pending before this court involving plaintiffs who seek damages arising from a breach of DOE’s contractual obligations under the NWPA. Def.’s Mot. at 1. Recently, in Indiana Michigan Power Co. v. United States, 422 F.3d 1369 (Fed.Cir.2005) (Indiana Michigan ID, the United States Court of Appeals for the Federal Circuit affirmed this court’s ruling in the first of these cases to reach the Circuit after trial. Def.’s Mot. at 2; Indiana Michigan II, 422 F.3d at 1371 (affirming Indiana Michigan Power Co. v. United States, 60 Fed.Cl. 639 (2004) (Indiana Michigan I)) The Federal

[760]*760Circuit “agree[d] with the trial court that Indiana Michigan’s claim is for damages for partial breach.” Indiana Michigan II, 422 F.3d at 1374; see also id. (“ ‘[I]f the injured party elects to or is required to await the balance of the other party’s performance under the contract, [its] claim is said ... to be one for damages for partial breach.’ ”) (quoting Restatement (Second) of Contracts § 236 cmt. b (1981)).4 The court also found that “[t]he trial court did not err in concluding that a claim for partial breach precludes an award of future damages.” Id. at 1376. The court explained the rationale for this conclusion: “Because of its highly speculative nature, a claimant may not recover, at the time of the first suit for partial breach, prospective damages for anticipated future nonperformance resulting from the same partial breach.” Id. (citing San Carlos Irrigation & Drainage Dist. v. United States, 111 F.3d 1557, 1563 (Fed.Cir.1997)) (“[Contract law precludes recovery for speculative damages.”) and 9 Arthur L. Corbin, Corbin on Contracts § 956 (Interim ed. 1993) (“It has been thought that where there has been no repudiation [e.g., no total breach], the plaintiff can recover damages for his injury only to the date of the wrii-that he must treat the breach as only ‘partial’[.]”) (emphasis and alterations in Indiana Michigan II). The court noted that “future damages could have been awarded had Indiana Michigan claimed total breach.” Id. (citing Restatement (Second) of Judgments § 26 cmt. g (1982) (“[W]here a plaintiff commences an action for total breach, ‘he is obliged in order to avoid “splitting,” to claim all his damages with respect to the contract, prospective as well as past, and judgment in the action precludes any further action by the plaintiff for damages arising from the contraet[.]’ ”) (emphasis and alteration in Indiana Michigan ID). However, “[bjecause its claim is premised upon the government’s partial breach, [the plaintiffs] damages were limited to those costs incurred prior to the date of its suit.” Id. at 1376-77.

While Indiana Michigan argued that, because it was known that DOE would not perform until at least 2010, it should be awarded its future damages immediately because they are not speculative, the Federal Circuit instead “agree[d] with the government, and concurred] in the proposition that ‘if the breach of an entire contract is only partial, the plaintiff can recover only such damages as he or she has sustained, leaving prospective damages to a later suit in the event of further breaches.’” Id. at 1377 (quoting 22 Am.Jur.2d Damages § 488 (2003)). The court went on to quote comment g to the Restatement (Second) of Judgments § 26 which states, in relevant part:

A judgment in an action for breach of contract does not normally preclude the plaintiff from thereafter maintaining an action for breaches of the same contract that consist of failure to render performance due after commencement of the first action.
[Although the breach is material, the plaintiff may elect to treat it as being merely a partial breach. If he so elects, he is entitled to maintain an action for damages sustained from breaches up to the time of the institution of the action, and the judgment does not preclude a further action by him for a breach occurring after that date.

Id. (quoting Restatement (Second) of Judgments § 26 cmt. g) (emphasis omitted). Accordingly, the Federal Circuit concluded that Indiana Michigan “retains its right to sue for damages for its remaining rights to performance,” id., and that it “may bring suits for [such] damages in the future,” id. at 1378.

With the guidance provided by Indiana Michigan II

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Pacific Gas & Electric Co. v. United States, 70 Fed. Cl. 758, 2006 U.S. Claims LEXIS 82, 2006 WL 950207 (uscfc 2006).

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