Rochester Gas & Electric Corp. v. United States

65 Fed. Cl. 431, 2005 U.S. Claims LEXIS 137, 2005 WL 1125658
CourtUnited States Court of Federal Claims
DecidedMay 12, 2005
DocketNo. 04-118-C
StatusPublished
Cited by17 cases

This text of 65 Fed. Cl. 431 (Rochester Gas & Electric Corp. 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
Rochester Gas & Electric Corp. v. United States, 65 Fed. Cl. 431, 2005 U.S. Claims LEXIS 137, 2005 WL 1125658 (uscfc 2005).

Opinion

OPINION AND ORDER

LETTOW, Judge.

This case presents an apparent issue of first impression concerning the Assignment of Contracts Act, 41 U.S.C. § 15, and the Assignment of Claims Act, 31 U.S.C. § 3727. In its simplest terms, the question posed is whether a specific provision in the Nuclear Waste Policy Act of 1982 (“NWPA”), Pub.L. No. 97-425, 96 Stat. 2202 (Jan. 7, 1983) (codified as amended at 42 U.S.C. §§ 10101-10270), supersedes the proscriptions and limitations set out in the otherwise generally applicable Assignment of Contracts Act and Assignment of Claims Act. That question is answered affirmatively, for the reasons set out below.

BACKGROUND

Plaintiff, Rochester Gas & Electric Corporation (“Rochester Gas”), signed a “Standard Contract” that addressed disposal of spent nuclear fuel (“SNF”) and high-level radioactive waste (“HLW”) derived from the R.E. Ginna Nuclear Power Plant (“Ginna plant”). In exchange for payment of a one-time fee and continuing fees, the Department of Energy (“DOE”) would begin to dispose of SNF from the plant no later than January 31, 1998. As allowed under the Standard Contract, Rochester Gas elected to delay pay[433]*433ment of the one-time fee until a later date prior to the commencement of delivery of SNF. Rochester Gas paid in full all continuing fees it owed under the Contract. In this case, as in each of the more than 60 other indirectly-related cases brought in this court by utilities and others who are parties to a Standard Contract, DOE failed to begin disposing of SNF by January 31, 1998. Based upon that failure, on January 24, 2004, Rochester Gas sued the government, seeking monetary damages for a partial breach of contract, breach of the implied covenants of good faith and fair dealing, and an uncompensated taking.

After filing this suit, Rochester Gas sold the Ginna plant to R.E. Ginna Nuclear Power Plant, LLC (“Ginna LLC”), an indirect, wholly-owned subsidiary of Constellation Energy Group, Inc. (“Constellation”). As a result of the sale, Rochester Gas and Ginna LLC wanted Ginna LLC to take control of this suit. To that end, Rochester Gas and Ginna LLC filed a motion to substitute Ginna LLC for Rochester Gas as the plaintiff in the complaint, to amend the caption to reflect such substitution, and to substitute counsel of record for Ginna LLC for counsel of record for Rochester Gas. The government opposes this motion. According to the government, the asset purchase agreement between Rochester Gas and Ginna LLC assigned only a portion of the Standard Contract to Ginna LLC because Rochester Gas is still responsible for the one-time fee. As the government would have it, such a partial assignment is a nullity because the Assignment of Contracts Act, 41 U.S.C. § 15, and an assignment provision in the NWPA permit only a total and complete assignment of the contract at issue here. In addition, the government argues that the Assignment of Claims Act, 31 U.S.C. § 3727, remains applicable notwithstanding the provisions of the NWPA, and Ginna LLC cannot pursue claims accruing prior to its purchase of the Ginna plant without violating that Act. Ginna LLC responds that it is responsible to DOE for the one-time fee and that Rochester Gas’s liability to it for that fee should be of no concern to the government. Moreover, Ginna LLC argues that even if its purchase agreement with Rochester Gas includes a partial assignment of the contract, not a full assignment, such partial assignments are permissible under the NWPA. It also contends that the assignment provision in the NWPA supersedes the Assignment of Claims Act, and, in the alternative, that the government’s receipt and acceptance without objection of post-assignment continuing-fee payments from Ginna LLC constitutes a waiver of the Assignment of Claims Act.1

A. The NWPA

On January 7,1983, the NWPA was enacted, authorizing the Secretary of DOE to “enter into contracts with any person who generates or holds title to high-level radioactive waste, or spent nuclear fuel, of domestic origin for the acceptance of title, subsequent transportation, and disposal of such waste or spent fuel.” 42 U.S.C. § 10222(a)(1). Contracting utilities were required to pay a onetime fee based on electricity generated and sold prior to April 7, 1983, and continuing fees based on the electricity generated after that date. Id. § 10222(a)(2)-(3). Section 302(b)(3) of the NWPA also expressly permits assignments, providing that “[t]he rights and duties of a party to a contract entered into under this section may be assignable with transfer of title to the spent nuclear fuel or high-level radioactive waste involved.” Id. § 10222(b)(3).

B. The Standard Contract

After notice and a comment period, DOE promulgated a Standard Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste, codified at 10 C.F.R. § 961.11. See 48 Fed.Reg. 5,458 (Feb. 4, 1983). The Standard Contract permitted utilities to choose from three options for payment of the one-time fee, and utilities were required to make an election from among these options within two years of signing the Standard Contract. Standard [434]*434Contract, art. VIII.B.2. Utilities could opt (1) to prorate the fee evenly over forty quarters with interest accruing on the unpaid portion, (2) to defer the fee with interest, or (3) to pay the fee in full by June 30, 1985 without interest. The deferral option provided that:

(b) Option 2 — The [utility’s] financial obligation shall be paid in the form of a single payment anytime prior to the first delivery, as reflected in the DOE approved delivery commitment schedule, and shall consist of the fee plus interest on the outstanding fee balance. Interest is to be calculated from April 7,1983, to the date of the payment based upon the 13-week Treasury bill rate, as reported on the first such issuance following April 7, 1983, and compounded quarterly thereafter by the 13-week Treasury bill rates as reported on the first such issuance of each succeeding assigned three-month period until payment.

Id. In addition, the Standard Contract, in accord with Section 302(b)(3) of the NWPA, provided for assignment: “The rights and duties of the [utility] may be assignable with transfer of title to the SNF and/or HLW involved; provided, however, that notice of any such transfer shall be made to DOE within ninety (90) days of transfer.” Id., art. XIV.2

C. R.E. Ginna Nuclear Power Plant

Rochester Gas executed its Standard Contract with DOE for the Ginna plant on June 30, 1983. Def.’s App. 1 (Standard Contract for the Ginna plant). It elected to defer payment of the one-time fee.

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Bluebook (online)
65 Fed. Cl. 431, 2005 U.S. Claims LEXIS 137, 2005 WL 1125658, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rochester-gas-electric-corp-v-united-states-uscfc-2005.