Vermont Yankee Nuclear Power Corp. v. United States

84 Fed. Cl. 339, 2008 U.S. Claims LEXIS 341
CourtUnited States Court of Federal Claims
DecidedOctober 22, 2008
DocketNos. 02-898C, 03-2663C
StatusPublished
Cited by5 cases

This text of 84 Fed. Cl. 339 (Vermont Yankee Nuclear Power 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
Vermont Yankee Nuclear Power Corp. v. United States, 84 Fed. Cl. 339, 2008 U.S. Claims LEXIS 341 (uscfc 2008).

Opinion

OPINION AND ORDER

WHEELER, Judge.

These cases arise from Defendant’s failure to begin accepting spent nuclear fuel and high-level radioactive waste (collectively, “SNF”) generated at the Vermont Yankee Nuclear Power Station (“Power Station”) in Vernon, Vermont. Plaintiff Vermont Yankee Nuclear Power Corporation (“Vermont Yankee”) owned and operated the Power Station until 2002 when it sold the facility to Plaintiff Entergy Nuclear Vermont Yankee, LLC, et al. (“ENVY”). Vermont Yankee and ENVY brought separate actions in this Court in 2002 and 2003 respectively seeking recovery of damages relating to the failure of the Department of Energy (“DOE”) to begin disposing of SNF at the Power Station not later than January 31, 1998, as agreed under DOE’s Standard Contract.

At issue in Vermont Yankee Nuclear Power Corporation v. United States, No. 02-898C, is a motion for partial summary judgment, or in the alternative, motion in limine, filed by Plaintiff ENVY on June 11, 2008. ENVY seeks partial summary judgment regarding ownership of, and right to, pursue SNF claims relating to the Power Station. In the alternative, ENVY seeks relief by a motion in limine to preclude Vermont Yankee from introducing evidence regarding SNF claims that were assigned to ENVY in the Power Station sales agreement. For the reasons stated below, ENVY’s motion for partial summary judgment regarding ownership of, and right to, pursue claims is GRANTED. Lacking any actionable claims that were not transferred to ENVY in the sale of the Power Station, Vermont Yankee’s Complaint and First Amended Complaint are dismissed with prejudice.

Factual Background

On June 10, 1983, pursuant to the Nuclear Waste Policy Act of 1982, as amended, 42 U.S.C. §§ 10101 et seq. (“NWPA”), Vermont Yankee and DOE signed a Standard Contract regarding DOE’s agreement to dispose of SNF generated at the Power Station. The Standard Contract obligated DOE to begin accepting SNF for disposal from nuclear waste producers not later than January [341]*34131, 1998 in exchange for the payment of substantial fees. DOE, however, did not commence performance by January 31, 1998 and, to date, still has not yet begun.

Contract holders such as Vermont Yankee, in accordance with the Standard Contract, are required to pay two sets of fees. One such fee, which is relevant to the motion presently before the Court, is a one-time fee relating to the SNF that the power station operators already had in possession at the time they signed Standard Contracts in 1983. Vermont Yankee, when it entered into its Standard Contract, elected to defer payment of the one-time fee until a date prior to first delivery of SNF to the Government, with interest accruing from April 7, 1983 to the date of payment. Vermont Yankee Nuclear Power Corp. v. United States, 73 Fed.Cl. 236, 238 (2006). To date, Vermont Yankee has not paid the one-time fee. Id.

On August 15, 2001, Vermont Yankee entered into a Purchase and Sale Agreement (“PSA”) with ENVY for the Power Station and completed the sale almost a year later, on July 31, 2002. In the PSA, at Section 2.1, Vermont Yankee agreed to “sell, assign, convey, transfer and deliver” to ENVY certain “Acquired Assets.” Among the Acquired Assets was “all Spent Nuclear Fuel and other Nuclear Materials located at the [Power Station] to which [Vermont Yankee] has title.” ENVY Mot. for Partial Summ. J. Ex. A at 18 (PSA § 2.1(b)). Also included as an Acquired Asset were the claims relating to DOE’s default under the Standard Contract:

(n) Subject to Section 6.11(b), any claims of [Vermont Yankee] related to the Department of Energy’s defaults under the DOE Standard Contract accrued as of the Closing, whether relating to periods prior to or following the Closing, excluding such claims as may relate to the one-time fee with respect to fuel used to generate electricity prior to April 7,1983[.]

Id. at 19 (PSA § 2.1(n)). As noted, the transfer of the claims was subject to the terms of PSA Section 6.11(b). Id. Section 6.11, entitled “Spent Nuclear Fuel Fees,” provides in subparagraph (b) that Vermont Yankee’s obligation to pay the one-time fee was subject to any rights of set-off relating to DOE’s default of the Standard Contract to which Vermont Yankee was entitled:

(b) [Vermont Yankee] agrees, upon receipt of at least 30 days advance written notice from [ENVY] of the date on which the onetime fee for fuel burned prior to April 7, 1983 under the DOE Standard Contract will become due and payable in accordance with the terms of the DOE Standard Contract, to cause such fee to be duly paid when due, subject to any rights of set-off to which [Vermont Yankee] may be entitled by reason of the Department of Energy’s defaults under said DOE Standard Contract.

Id. at 63 (PSA § 6.11(b)).

The PSA also contained a list of “Excluded Assets,” which included the “claims of [Vermont Yankee] related or pertaining to the Department of Energy’s defaults under the DOE Standard Contract to the extent applicable to the one-time fee with respect to fuel used to generate electricity prior to April 7, 1983.” Id. at 20 (PSA § 2.2(i)). Further, Vermont Yankee and ENVY agreed that Vermont Yankee would retain “[a]ny Liability ... under the DOE Standard Contract with respect to the one-time fee for fuel burned prior to April 7, 1983.” Id. at 24 (PSA § 2.4(m)).

Both the Power Station’s former owner, Vermont Yankee, and the current owner, ENVY, have brought suit in this Court seeking damages from DOE’s pre-sale default. One day prior to the completion of the sale of the Power Station to ENVY, Vermont Yankee filed suit against the United States “to recover significant damages caused by [DOE’s] material partial breach of its unconditional obligation to begin disposing of [SNF]____” Vermont Yankee Compl. H1. In its First Amended Complaint, Vermont Yankee sought “claims for damages in accordance with the claims [Vermont Yankee] reserved the rights to pursue in its purchase and sale agreement with [ENVY], including pursuit of damages for the diminished selling value of the Power Station.” Vermont Yankee First Am. Compl. 113. Vermont Yankee asserted that “[a]s a direct consequence of DOE’s disregard of its contractual obligations,” it has suffered damages including [342]*342“substantial additional costs to provide for extended on-site storage of the Power Station’s SNF prior to the sale of the Power Station,” “regulatory costs associated with efforts to ensure sufficient on-site storage capacity or alternative off-site storage capacity to permit continued operation of [Vermont Yankee’s] nuclear plants,” as well as “diminished ... value of the Power Station, such that Vermont Yankee would have received a higher price for selling the Power Station.” Id. at Hlf 22, 26.

On November 13, 2003, ENVY also filed suit against the United States to recover “significant damages caused by [DOE’s] material partial breach of its unconditional obligation to begin disposing of [SNF] generated by the commercial nuclear power plant owned by ENVY.” ENVY Compl. 111. ENVY seeks relief based upon theories of partial breach of contract, breach of the implied covenant of good faith and fair dealing, and taking without just compensation. Id. at HIT 25, 30, 34. ENVY seeks both pre-sale and post-sale damages. ENVY Mot. for Partial Summ. J. at 5.

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Bluebook (online)
84 Fed. Cl. 339, 2008 U.S. Claims LEXIS 341, Counsel Stack Legal Research, https://law.counselstack.com/opinion/vermont-yankee-nuclear-power-corp-v-united-states-uscfc-2008.