Free Motion in Limine - District Court of Federal Claims - federal

Case 1:00-cv-00697-JFM

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No. 00-697C (Judge Merow)

IN THE UNITED STATES COURT OF FEDERAL CLAIMS WISCONSIN ELECTRIC POWER COMPANY., Plaintiff, v. THE UNITED STATES, Defendant.

DEFENDANT'S MOTION IN LIMINE TO EXCLUDE THE TESTIMONY OF PLAINTIFF'S EXPERT WITNESS, MS. EILEEN M. SUPKO, REGARDING THE IMPACT OF THE RATE OF ACCEPTANCE UNDER THE STANDARD CONTRACT

Respectfully submitted, PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director HAROLD D. LESTER, JR. Assistant Director JANE K. TAYLOR Office of General Counsel U.S. Department of Energy 1000 Independence Ave., S.W. Washington, D.C. 20585 KEVIN B. CRAWFORD SONIA ORFIELD RUSSELL A. SHULTIS STEPHEN FINN Civil Division Department of Justice 1100 L Street, N.W. Washington, D.C. 20530

KEVIN B. CRAWFORD Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tel: (202) 305-9640 Fax: (202) 307-2503

January 31, 2007

Attorneys for Defendant

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TABLE OF CONTENTS PAGE(S) STATEMENT OF FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 I. THE COURT HAS THE POWER AND DUTY TO GRANT MOTIONS TO LIMIT THE SCOPE OF TRIAL IN APPROPRIATE CIRCUMSTANCES . . . . 5 A MOTION IN LIMINE IS APPROPRIATE IF THE TESTIMONY OF A PROPOSED EXPERT WITNESS FAILS TO SATISFY FEDERAL RULE OF EVIDENCE 702 OR THE STANDARDS SET BY THE SUPREME COURT IN DAUBERT AND KUMHO TIRE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 A. Federal Rule of Evidence 702 Requires That, To Be Admissible, Any Expert Witness Opinions Must Be Both Relevant and Reliable . . . . . . . . 6 The Court Must Determine Whether The Proposed Expert Testimony Is Relevant, Including Whether It Is Helpful To The Trier Of Fact . . . . . . . 8 The Proponent Must Also Establish That The Methodology Underlying The Expert's Conclusions Is Reliable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

II.

B.

C.

III.

THE COURT SHOULD EXCLUDE MS. SUPKO'S OPINIONS CONCERNING THE "REASONABLENESS" OF A PARTICULAR RATE OF ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A. The Court Should Exclude Ms. Supko's Opinions Because They Are Neither Relevant Nor Reliable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1. Ms. Supko's Opinions Are Not Relevant To Any Issue In This Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Ms. Supko's Opinions Should Be Excluded Because They Are Not Reliable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2.

B.

The Court Should Disregard Ms. Supko's Opinions Because Her Model Lacks Evidentiary Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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C.

Even If The Court Were To Accept Counsel's Assertions Concerning The Two Key Issues, Under Ms. Supko's Model, A 3,000 MTU Rate Of Acceptance Does Not Satisfy The Goals That WEPCO Claims Were Expectations Of The NWPA And Standard Contract . . . . . . . . . . . . . . . 27

IV.

THE COURT SHOULD EXCLUDE ANY TESTIMONY BY MS. SUPKO REGARDING THE REQUIREMENTS OF THE STANDARD CONTRACT BECAUSE MS. SUPKO WAS NOT INVOLVED IN ITS PROMULGATION AND HER PROFFERED TESTIMONY EXCEEDS THE OPINIONS AND BASES FOR THOSE OPINIONS DISCLOSED IN HER EXPERT REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

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TABLE OF AUTHORITIES CASES PAGE(S) Baskett v. United States, 2 Cl. Ct. 356 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Blake Constr. Co. v. United States, 987 F.2d 743 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Bluebonnet Sav. Bank, F.S.B. v. United States, 266 F.3d 1348 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Bluebonnet Sav. Bank v. United States, 339 F.3d 1341 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Boston Edison Co. v. United States, No. 99-447C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Bourjaily v. United States, 483 U.S. 171 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8, 9 Brown v. Wal-Mart Stores, Inc., 402 F. Supp. 2d 303 (D. Me. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Castle v. United States, 48 Fed. Cl. 187 (2000), aff'd in part, rev'd in part and remanded in part on other grounds, 301 F.3d 1328 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Commonwealth Edison Co. v. United States, No. 98-621C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 17 Consumers Energy Co. v. United States, No. 02-1894C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Dolphin Tours, Inc. v. Pacifico Creative Serv., Inc., 773 F.3d 1506 (9th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Domingo v. T.K., M.D., 289 F.3d 600 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Duke Power v. United States, No. 98-485C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 iv

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Dynamics Corp. of Am. v. United States, 17 Cl. Ct. 60 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Employers Reinsurance Corp. v. Mid-Continent Cas. Co., 202 F. Supp. 2d 1212 (D. Kan. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Ericsson, Inc. v. Harris Corp., 352 F.3d 1369 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Fifth Third Bank v. United States, 55 Fed. Cl. 223 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21 Franklin Fed. Sav. Bank v. United States, 55 Fed. Cl. 108 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Fuesting v. Zimmer, Inc., 421 F.3d 528 (7th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 16 General Elec. Co. v. Joiner, 522 U.S. 136 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Glendale Fed. Bank, FSB v. United States, 43 Fed. Cl. 390 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Glendale Fed. Bank FSB v. United States, 239 F.3d 1374 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 21 Greco v. Department of the Army, 852 F.2d 558 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Guillory v. Domtar Indus. Inc., 95 F.3d 1320 (5th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Home Sav. of Am. v. United States, 57 Fed. Cl. 694 (2003), aff'd in part, rev'd in part, 399 F.3d 1341 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Indiana Michigan Power Co. v. United States, 60 Fed. Cl. 639 (2004) aff'd, 422 F.3d 1369 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . 2, 17 Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549 (D.C. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 7 Kidder, Peabody & Co. v. IAG Int'l Acceptance Group N.V., 28 F. Supp. 2d 126 (S.D.N.Y. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim LaSalle Talman Bank, F.S.B. v. United States, 45 Fed. Cl. 64 (1999), aff'd in part, rev'd in part, 317 F.3d 1363 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Masters v. Hesston Corp., 291 F.3d 985 (7th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 8 McAbee Constr., Inc. v. United States, 97 F.3d 1431 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Microstrategy Inc. v. Business Objects, S.A., 429 F.3d 1344 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Needleman v. John Hancock Life Ins. Co., No. 03-1955, 2006 WL 842370 (N.D. Tex. Mar. 31, 2006) . . . . . . . . . . . . . . . . . . . . . 12 Northern States Power Co. v. United States, No. 98-484C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 21, 22 O'Conner v. Commonwealth Edison Co., 13 F.3d 1090 (7th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Oddi v. Ford Motor Co., 234 F.3d 136 (3d Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Omaha Public Power Co. v. United States, No. 01-115C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 PSEG Nuclear, L.L.C. v. United States, 465 F.3d 1343 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 13 Pacific Gas & Electric Co. v. United States, 73 Fed. Cl. 333 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Palmerin v. City of Riverside, 794 F.2d 1409 (9th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 PCL Constr. Services, Inc. v. United States, 47 Fed. Cl. 745 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Ralph Larsen & Son, Inc. v. United States, 17 Cl. Ct. 39 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Rink v. Cheminova, Inc., 400 F.3d 1286 (11th Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 12 vi

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Sacramento Municipal Utility District v. United States, 70 Fed. Cl. 332 (2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 13 Seaboard Lumber Co. v. United States, 308 F.3d 1283 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Sherbert v. Alcan Aluminum Corp., 66 F.3d 965 (8th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 South Carolina Electric & Gas Co. v. United States, No. 04-101C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 18 Southern Nat'l Corp. v. United States, 57 Fed. Cl. 294 (2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Southern Nuclear Operating Co. v. United States, No. 98-614 (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Southern Pac. Commc'n Co. v. AT&T, 556 F. Supp. 2d 825 (D.D.C. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Suess v. United States, 52 Fed. Cl. 221 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Summers v. Missouri Pac. R.R. Sys., 132 F.3d 599 (10th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 System Fuels, Inc. (Arkansas) v. United States, No. 03-2623C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 12, 24, 32 System Fuels, Inc. (Mississippi) v. United States, No. 03-2624C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 13, 14 System Fuels, Inc. v. United States, No. 03-2623 (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim White Mountain Apache Tribe of Az. v. United States, 10 Cl. Ct. 115 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Willems Indus., Inc. v. United States, 155 Ct. Cl. 360, 295 F.2d 822 (1961) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

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Wisconsin Electric Power Co. v. United States, No. 00-697C (Fed. Cl.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 12, 14 Zaremba v. General Motors Corp., 360 F.3d 355 (2d Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Zenith Elecs. Corp. v. WH-TV Broad. Corp., 395 F.3d 416 (7th Cir. 2005), cert. denied, 125 S. Ct. 2978 (2005) . . . . . . . . . . . . . 10, 15 STATUTES AND RULES 10 C.F.R. 961.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 29, 30, 33 Fed. R. Civ. P. 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 5 Fed. R. Evid. 602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Fed. R. Evid. 701 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Fed. R. Evid. 702 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 MISCELLANEOUS Amendments, Fed. R. Evid. 702 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8, 9 Restatement (Second) of Contracts § 347(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 1 J. Strong, McCormick on Evidence § 12 (4th ed. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS WISCONSIN ELECTRIC POWER COMPANY Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 00-697C (Senior Judge Merow)

DEFENDANT'S MOTION IN LIMINE TO EXCLUDE THE TESTIMONY OF PLAINTIFF'S EXPERT WITNESS, MS. EILEEN M. SUPKO, REGARDING THE EFFECT OF THE RATE OF ACCEPTANCE UNDER THE STANDARD CONTRACT Pursuant to Rule 16 of the Rules of the Court of Federal Claims ("RCFC") and the Court's scheduling order dated December 20, 2005, as amended, defendant, the United States, respectfully requests that the Court enter an order to exclude the testimony of plaintiff's expert witness, Eileen M. Supko, at the forthcoming trial concerning her opinions regarding the effect of the rate at which the Department of Energy ("DOE") would have accepted spent nuclear fuel ("SNF") under the Standard Contract, including the reasonableness of a 3,000 metric tons of uranium ("MTU") per year steady-state acceptance rate. In addition, the Government requests that the Court enter an order excluding any testimony by Ms. Supko regarding the Government's obligations under the Standard Contract. STATEMENT OF FACTS In support of its damages claims, plaintiff, Wisconsin Electric Power Company ("WEPCO"), retained Ms. Supko to prepare a report pursuant to RCFC 26(a)(2)(B) regarding "the impact of the DOE's rate of acceptance of SNF assemblies from the nuclear industry as a whole" on two issues identified by counsel: (1) the aggregate amount of additional at-reactor storage capacity that nuclear utilities would need to provide to continue operations after January

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31, 1998; and (2) the ability of the utilities "timely" to decommission their nuclear power plants. A. 168 1 (Expert Report Regarding Determination of the U.S. Department of Energy's Overall Spent Nuclear Fuel Acceptance Rate at 1 ("Acceptance Rate Report"), submitted May 8, 2006).2 Ms. Supko opined in her Acceptance Rate Report that a 3,000 MTU per year steady-state acceptance rate, with a 400-600-1200-2000 MTU ramp up rate, is "reasonable." A. 191 (Acceptance Rate Report at 19). Ms. Supko explained that her methodology consisted of reviewing various program documents that DOE had published over the years and using her company's SPNTFUEL computer model to perform an analysis of a range of acceptance rates. A. 176 (Acceptance Rate Report at 4). Ms. Supko modeled four different rate "scenarios" assuming that, on January 31, 1998, DOE began to accept SNF from the industry. A. 179-186 (Acceptance Rate Report at 7-14 ). The rates that Ms. Supko modeled included: a 3,000 MTU steady-state rate after a five year ramp up (Scenario 1), a 900 MTU steady-state rate after a three

1

"A.

" refers to the attached appendix.

To date, Ms. Supko has submitted reports pursuant to RCFC 26(a)(2)(B) in the following spent nuclear fuel cases: Indiana Michigan Power Co. v. United States, 60 Fed. Cl. 639 (2004) aff'd, 422 F.3d 1369 (Fed. Cir. 2005); Sacramento Municipal Utility District v. United States, 70 Fed. Cl. 332 (2006) ("SMUD"); Southern Nuclear Operating Co. v. United States, No. 98-614C (Fed. Cl.); Commonwealth Edison Co. v. United States, No. 98-621C (Fed. Cl.); Wisconsin Electric Power Co. v. United States, No. 00-697C (Fed. Cl.); Omaha Public Power Co. v. United States, No. 01-115C (Fed. Cl.); South Carolina Electric & Gas Co. v. United States, No. 04-101C (Fed. Cl.); System Fuels, Inc. (Arkansas) v. United States, No. 032623C (Fed. Cl.); System Fuels, Inc. (Mississippi) v. United States, No. 03-2624C (Fed. Cl.); Northern States Power Co. v. United States, No. 98-484C (Fed. Cl.); Boston Edison Co. v. United States, No. 99-447C (Fed. Cl.); Duke Power v. United States, No. 98-485C (Fed. Cl.); and Consumers Energy Co. v. United States, No. 02-1894C (Fed. Cl.). In her deposition in this case, Ms. Supko testified that her testimony in other cases is applicable to her opinions in this case and that her deposition and trial testimony remains accurate. A. 33-38 ; Wisconsin Electric Power Co. v. United States, No. 00-697C (Fed. Cl.) (deposition testimony of Eileen Supko, June 27, 2006, 11-16). 2

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year ramp up (Scenario 2), a 900 MTU rate of acceptance that ramped up to 3,000 MTU by 2015 (Scenario 3), and a 6,000 MTU steady-state rate of acceptance with an eight-year ramp up (Scenario 4). Id. In determining the "reasonableness" of a particular rate of acceptance, Ms. Supko has explained that she measures different rates of acceptance based upon how they compare to the two criteria identified by counsel, as well as a third criteria identified by Ms. Supko ­ the extent to which the maximum annual steady state acceptance capacity would have been fully utilized over the life of the program. A. 181-82 (Acceptance Rate Report at 1, 9-10). Ms. Supko ultimately opined that it is "reasonable" to use the 3,000 MTU steady-state rate of acceptance (Scenario 1), after a brief ramp-up, because, if DOE had begun acceptance of SNF by January 31, 1998, an overall "steady-state" acceptance rate of 3,000 MTU per year would have limited the amount of additional storage capacity needed at nuclear plants after that date, would have kept up with the utilities' annual discharge rate of 2,000 MTU of SNF, would have worked off the 37,000 MTU backlog of SNF in storage at nuclear plants to allow timely decommissioning, and would have ensured that DOE's waste management system was fully utilized and not overbuilt or underutilized. A. 185-86 (Acceptance Rate Report 1, 13-14). However, Ms. Supko's calculations also demonstrate that, had DOE performed under the 3,000 MTU steady-state rate, with a brief ramp up (Scenario 1), 1,030 MTU of additional at-reactor storage would have been required at 14 nuclear plants after 1998. A. 182-83; 99 (Acceptance Rate Report at 10-11; System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1404:11-15).

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Ms. Supko also prepared a second report regarding the timing of DOE's acceptance of spent nuclear fuel from WEPCO's Point Beach Units 1 and 2 assuming DOE performance on an industry-wide basis at 3,000 MTU per year after a brief ramp-up. A. 138 (Expert Report Regarding Spent Fuel Acceptance Rates Wisconsin Electric Power Company's Point Beach Unites 1 and 2 ("Acceptance Rates Report for Point Beach")). With respect to the methodology that she used to reach the conclusions in her Acceptance Rates Report for Point Beach, Ms. Supko used DOE's historical and projected future discharges through 2002, contained in certain DOE forms called "RW-859s," and then reviewed future projected discharges that WEPCO provided to Ms. Supko in connection with this case. A. 145-46 (Acceptance Rates Report for Point Beach at 3-4). Plaintiff's damages experts, Ken Metcalfe and Richard Sieracki, use Ms. Supko's conclusions regarding the 3,000 MTU rate of acceptance as an input to their damages model, and the calculation of plaintiff's damages relies heavily upon Ms. Supko's rate opinion.3

3

As the Court recently explained in another spent nuclear fuel case, The higher DOE's acceptance rate, the earlier in time plaintiff's SNF and/or HLW would have been accepted by DOE under the schedule containing the acceptance queue, and the earlier DOE would have completed performance of the parties' contract had it performed beginning on January 31, 1998. The higher DOE's acceptance rate, the greater the amount of continued storage and related costs that would be the direct result of DOE's failure to begin performance of the standard contract by January 1, 1998, and therefore, the greater the award of damages to plaintiff.

Pacific Gas & Electric Co. v. United States, 73 Fed. Cl. 333, 339 (2006). In other words, plaintiff's use of a 3,000 MTU rate of acceptance has the effect of maximizing the quantification of alleged damages. 4

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Additionally, WEPCO indicated in its witness list that Ms. Supko would provide expert testimony at trial "concerning the impact of DOE's acceptance rate under the Standard Contract." Plaintiff's Witness List (emphasis added). SUMMARY OF ARGUMENT Ms. Supko's opinion regarding the "reasonableness" of a particular rate of acceptance is not relevant to any issue in this case, is not based upon a reliable or testable methodology, and is inconsistent with the plaintiff's theory of DOE's contractual obligations. Further, because Ms. Supko has expressly disclaimed in her previous depositions and trial testimony that she has any opinions regarding DOE's obligations under the Standard Contract, any testimony by Ms. Supko in this case regarding DOE's obligations under the Standard Contract should be excluded. ARGUMENT I. THE COURT HAS THE POWER AND DUTY TO GRANT MOTIONS TO LIMIT THE SCOPE OF TRIAL IN APPROPRIATE CIRCUMSTANCES

This Court has acknowledged that "[a] motion in limine is a recognized method under [RCFC 16] and Fed. R. Civ. P. 16 for obtaining a pretrial order simplifying issues for trial." White Mountain Apache Tribe of Az. v. United States, 10 Cl. Ct. 115, 116 (1986); see Baskett v. United States, 2 Cl. Ct. 356, 367-68 (1983); Palmerin v. City of Riverside, 794 F.2d 1409, 1413 (9th Cir. 1986). In fact, the Court has a duty to exercise its power to exclude testimony or evidence in appropriate cases: There is no question under [RCFC] 16, that this court, as a trial court, has the power to issue pretrial orders simplifying issues for trial. Not only does this court have such power, it has a duty to exercise it in appropriate cases. This power allows the court, inter alia, to define the issues, facts, and theories actually in contention and to weed out extraneous issues. Too, this court also has the 5

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authority to issue pretrial rulings concerning the admissibility at trial of proposed testimony and documentary evidence. Baskett, 2 Cl. Ct. at 359 (emphasis added). II. A MOTION IN LIMINE IS APPROPRIATE IF THE TESTIMONY OF A PROPOSED EXPERT WITNESS FAILS TO SATISFY FEDERAL RULE OF EVIDENCE 702 OR THE STANDARDS SET BY THE SUPREME COURT IN DAUBERT AND KUMHO TIRE A. Federal Rule of Evidence 702 Requires That, To Be Admissible, Any Expert Witness Opinions Must Be Both Relevant and Reliable

To be admissible, the testimony and opinions of an expert witness must satisfy the requirements of FRE 702: If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case. Fed. R. Evid. 702. FRE 702 imposes upon the Court a special "gatekeeping obligation" to prevent the introduction of certain expert testimony that is irrelevant or unreliable. See, e.g., Kumho Tire Co. v. Carmichael, 526 U.S. 137, 141 (1999); Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549, 569 (D.C. Cir. 1993). Specifically, the Supreme Court's decisions in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Kumho Tire, 526 U.S. 137, require "judges to determine that scientific testimony," as well as technical or other specialized expert testimony, "offered under FRE 702 is both relevant and reliable." Masters v. Hesston Corp., 291 F.3d 985, 991 (7th Cir. 2002). Further, the party proposing to introduce expert opinion testimony "has the 6

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burden of establishing that the pertinent admissibility requirements are met by a preponderance of the evidence." Advisory Committee Notes, 2000 Amendments, Fed. R. Evid. 702 (citing Bourjaily v. United States, 483 U.S. 171 (1987)). The United States Supreme Court has rejected the familiar refrain that it has sufficient safeguards against irrelevant or unreliable expert testimony in the opponent's ability to present its own expert testimony or to cross-examine each other's experts at trial. Daubert, 509 U.S. at 596; see Joy, 999 F.2d at 569 (rejecting "`let it all in' philosophy" of expert testimony). The Supreme Court requires Federal courts to exercise greater care to prevent the admission of unreliable or irrelevant expert opinion because "Federal Rules of Evidence 702 and 703 grant expert witnesses testimonial latitude unavailable to other witnesses upon the `assumption that the expert's opinion will have a reliable basis in the knowledge and experience of his discipline.'" Kumho Tire, 526 U.S. at 138 (quoting Daubert, 509 U.S. at 592). Further, the United States Court of Appeals for the Federal Circuit has explained that, under the Supreme Court's decision in Daubert, the Court has an obligation to screen expert testimony for both relevance and reliability. Seaboard Lumber Co. v. United States, 308 F.3d 1283, 1301 (Fed. Cir. 2002). The standard articulated by the Supreme Court in Daubert must be met even in non-jury cases such as this one. Seaboard Lumber Co., 308 F.3d at 1302. The burden of demonstrating Ms. Supko's satisfaction of the Daubert standards lies squarely upon SFI-Arkansas. Daubert, 509 U.S. at 592 n.10 (citation omitted); Rink v. Cheminova, Inc., 400 F.3d 1286, 1292 (11th Cir. 2005).

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B.

The Court Must Determine Whether The Proposed Expert Testimony Is Relevant, Including Whether It Is Helpful To The Trier Of Fact

An expert's testimony is not admissible unless it is relevant: Rule 702 further requires that the evidence or testimony "assist the trier of fact to understand the evidence or to determine a fact in issue." This condition goes primarily to relevance. "Expert testimony which does not relate to any issue in the case is not relevant and, ergo, non-helpful." The consideration has been aptly described by Judge Becker as one of "fit." "Fit" is not always obvious, and scientific validity for one purpose is not necessarily scientific validity for other, unrelated purposes. Daubert, 509 U.S. at 590-91 (citations omitted). Thus, whenever expert testimony is offered, the Daubert inquiry must be conducted, including an inquiry into whether the opinion is relevant and "tied to the facts" of a particular case. As part of this relevance inquiry, the Court must determine whether the proffered expert testimony is helpful to the trier of fact. See, e.g., Daubert, 509 U.S. at 591 (helpfulness goes primarily to relevance); Summers v. Missouri Pac. R.R. Sys., 132 F.3d 599, 603 (10th Cir. 1997); Employers Reinsurance Corp. v. Mid-Continent Cas. Co., 202 F. Supp. 2d 1212, 1215 (D. Kan. 2002). The opinion of an expert is not "helpful" to the Court, and therefore is not admissible, if it answers a question that the fact-finder could answer without the purported expert opinion. See Sherbert v. Alcan Aluminum Corp., 66 F.3d 965, 967-68 (8th Cir. 1995).

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C.

The Proponent Must Also Establish That The Methodology Underlying The Expert's Conclusions Is Reliable

"To gauge reliability, the [trial] judge must" not only determine whether the expert is qualified in the relevant field, but must also determine "whether the methodology underlying the expert's conclusions is reliable." Masters, 291 F.3d at 991. FRE 702 expressly incorporates the requirements for admission of expert testimony established by the United States Supreme Court in Daubert and Kumho Tire. Pursuant to those decisions, "[p]roposed testimony must be supported by appropriate validation ­ i.e., `good grounds', based on what is known." Daubert, 509 U.S. at 590, 593-94; see Advisory Committee Notes, 2000 Amendments, Fed. R. Evid. 702; Kumho Tire, 526 U.S. at 149-50. As the Supreme Court explained in Daubert, 509 U.S. at 590, expert "`knowledge' connotes more than subjective belief or unsupported speculation." Accord O'Conner v. Commonwealth Edison Co., 13 F.3d 1090, 1106 (7th Cir. 1994). "[N]othing in either Daubert or the FRE requires a district court to admit opinion evidence which is connected to existing data only by the ipse dixit of the expert." General Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997). "The reasoning between steps in a theory must be based on objective, verifiable evidence and scientific" or other "methodology of the kind traditionally used by experts in the field." Domingo v. T.K., M.D., 289 F.3d 600, 607 (9th Cir. 2002). In some cases, reliability will depend upon the "scientific foundations" of the opinion testimony, while, in other cases "the relevant reliability concerns may focus upon personal knowledge or experience." Kumho Tire, 526 U.S. at 150. However, "it will at times be useful to ask even of a witness whose expertise is

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based purely on experience, say, a perfume tester able to distinguish among 140 odors at a sniff, whether his preparation is of a kind that others in the field would recognize as acceptable." Id. The Court in Daubert set forth the following, non-exclusive list of factors for lower courts to consider in determining whether an expert's opinion is reliable: (1) whether the scientific theory can be and has been tested; (2) whether the theory has been subjected to peer review and publication; (3) the theory's known or potential rate of error when applied; and (4) whether the theory has been "generally accepted" in the scientific community. Daubert, 509 U.S. at 593-94. At bottom, "[a]n expert must offer good reason to think that his approach produces an accurate estimate using professional methods, and this estimate must be testable. Someone else using the same data and methods must be able to replicate the result." Zenith Elecs. Corp. v. WH-TV Broad. Corp., 395 F.3d 416, 419 (7th Cir. 2005), cert. denied, 125 S. Ct. 2978 (2005). In a recent decision, the United States Court of Appeals for the Seventh Circuit concluded that the district court properly excluded proffered expert testimony concerning lost profits because the expert lacked a sufficient methodology. In Zenith Electronics, 395 F.3d at 419, plaintiff, an electronics manufacturer, sued WH-TV, a digital television broadcaster, to recover payments for converter boxes that WH-TV had ordered. WH-TV filed breach of contract and fraud counterclaims alleging defective merchandise and seeking lost profits. WH-TV proposed to rely upon an expert's opinion that its business would have grown rapidly, and its profits greatly increased, had the plaintiff's product been delivered as promised. Id. at 417-418. However, rather than basing his opinions on the actual sales numbers and shares of digital broadcasting business in other markets, the expert "proposed to testify that [the San Juan market] is `unique' and that all experience in other markets is irrelevant." Id. at 418. When asked to 10

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identify the methods that he had used to generate his projections that defendant's business would have grown rapidly, the expert repeatedly answered "my expertise" or "my industry experience" or made other similar statements. Id. The court concluded that this "is to say that [the proffered expert] either had no method or could not describe one. He was relying on intuition, which we won't do." Id. (citations omitted). The court stated that, if a witness "could or would not explain how his conclusions met [FRE 702] requirements, he was not entitled to give expert testimony." Id. III. THE COURT SHOULD EXCLUDE MS. SUPKO'S OPINIONS CONCERNING THE "REASONABLENESS" OF A PARTICULAR RATE OF ACCEPTANCE A. The Court Should Exclude Ms. Supko's Opinions Because They Are Neither Relevant Nor Reliable 1. Ms. Supko's Opinions Are Not Relevant To Any Issue In This Case

With respect to the first prong of the Daubert inquiry, Ms. Supko's testimony concerning the "reasonableness" of a particular rate of acceptance is not relevant to any issue in this case. Whether a particular rate of acceptance is "reasonable" is simply not at issue in this case. Rather, the only issue in this case is the damages, if any, that flow from the Government's delay in performing its contractual obligations. As the United States Court of Appeals for the Federal Circuit recently noted in another spent nuclear fuel case, "[a]ny issues related to the types of damages permitted under the contract, if any, and the extent of those damages permitted under the contract, if any, and the extent of those damages can be resolved by solely resolving the DOE's contractual obligations." PSEG Nuclear, L.L.C. v. United States, 465 F.3d 1343, 1351 (Fed. Cir. 2006) (emphasis added).

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As this Court recently explained in another spent nuclear fuel case, "[t]he impact of DOE's breach is dependent upon . . . the scope of DOE's performance obligation under the standard contract generally, and the parties' contract specifically . . . ." PG&E, 73 Fed. Cl. at 339 (emphasis added). The Court explained in PG&E that "[o]nly by determining the scope of defendant's performance obligation can the court adequately determine which losses claimed by plaintiff are `the natural and proximate result' of defendant's failure to begin accepting spent fuel from utilities by January 31, 1998." Id. at 375 n.38. Indeed, in rejecting the identical theory concerning the imposition of a 3,000 MTU rate of acceptance upon the Government that the plaintiff advances in this case, the Court in PG&E explained that "[i]nserting a `reasonable rate' of 3,000 MTU/year into the Standard Contract would impose an obligation on DOE to which the parties never agreed and which plaintiff did not bargain for. The Court declines to do so." Id. at 381. It is axiomatic that, under FRE 702, as well as Daubert and its progeny, the Court may only admit expert testimony that is relevant to determine a fact in issue. See Rink, 400 F.3d at 1291; Needleman v. John Hancock Life Ins. Co., No. 03-1955, 2006 WL 842370, at *10 (N.D. Tex. Mar. 31, 2006) (holding that expert testimony was not relevant to resolution of issues in case). Ms. Supko admits that she is not offering any opinions concerning DOE's obligations under the Standard Contract. A. 46-47, 64 (System Fuels, Inc. v. United States, No. 03-2623C, deposition testimony of Eileen Supko, July 19, 2006, 18-19, 142). Indeed, Ms. Supko has no basis for offering such opinions, as she has conceded that she had no involvement in the formation of the Standard Contract or the Nuclear Waste Policy Act ("NWPA") and, moreover, did not speak to any DOE employees prior to 1990 regarding issues related to the Standard 12

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Contract ­ seven years after WEPCO and DOE entered into the Standard Contracts at issue in this case. A. 92 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1355:1-7, 12-16). Ms. Supko has also conceded she is not offering an opinion that DOE would have performed at a 3,000 MTU steady-state rate of acceptance in the "but for" world. A. 91 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1348:3-8); A. 80 (Wisconsin Electric Power Company v. United States, No. 00697C (Fed. Cl.) deposition testimony of Eileen Supko, 228). Simply put, Ms. Supko is offering an opinion as to what she believes is "reasonable," without reference to the Government's contractual obligations. Yet, by ignoring the actual contract requirements, such as DOE's obligation to issue an annual acceptance priority ranking beginning on April 1, 1991 (see 10 C.F.R. 961.11, Art. IV.B.5.(a)), in conjunction with the issuance of the annual capacity report beginning in 1987 (see 10 C.F.R. 961.11, Art. IV.B.5.(b)), which form the only basis for evaluating the Government's contract liability (see PSEG Nuclear, 465 F.3d at 1351; PG&E, 73 Fed. Cl. at 387 (holding that insertion of a 3,000 MTU rate into the Standard Contract would render the ACR process `inexplicable, inoperative . . ., insignificant, meaningless, [or] superfluous")), Ms. Supko's analysis lacks foundation for any issue properly presented in this case. Because Ms. Supko's opinions fail to address any relevant issue in this case, Ms. Supko's opinions are of no assistance to the Court in determining the Government's contractual obligations concerning the SNF acceptance rate and schedule. Consequently, Ms. Supko's opinions fail to satisfy the first prong of the Daubert test.4
4

In SMUD, Ms. Supko offered the same opinions related to the "reasonableness" of the 3,000 MTU steady-state rate of acceptance that she offers in this case. As in this case, the Government moved to exclude Ms. Supko's opinions in SMUD. At trial, the Court admitted into 13

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2.

Ms. Supko's Opinions Should Be Excluded Because They Are Not Reliable

Because Ms. Supko has not employed any scientific or readily testable methodology in determining what would be a "reasonable" rate of acceptance under the Standard Contract, her opinions lack any indicia of reliability. Possessing requisite credentials is insufficient to render expert testimony admissible. See Kumho Tire, 526 U.S. at 153 (affirming trial court's exclusion of expert and noting that, despite the trial court's acceptance of expert's qualifications, the expert lacked a reliable methodology); Fuesting v. Zimmer, Inc., 421 F.3d 528, 535 (7th Cir. 2005). Rather, the Federal Circuit has explained that the trial court must ensure that the expert testimony is reliable. Microstrategy Inc. v. Business Objects, S.A., 429 F.3d 1344, 1355 (Fed. Cir. 2005) (affirming trial court's exclusion of expert witness that used flawed methodology in reaching conclusions).

evidence Ms. Supko's written direct testimony, without formally qualifying Ms. Supko, but reserved ruling on the Government's motion in limine. Ultimately, the Court did not qualify Ms. Supko as an expert and concluded that "the evidence presented on the acceptance rate under the terms of the Standard Contract [is] highly speculative, therefore, the court declines to make any determination of the acceptance rate based on this record." SMUD, 70 Fed. Cl. at 375 n.40. Further, as the Court recently observed in the System Fuels-Mississippi trial after hearing Ms. Supko's identical testimony regarding the "reasonableness" of the 3,000 MTU rate of acceptance: To the extent I have to get into determining what the acceptance rate is . . . I don't intend to rely on Ms. Supko's opinion in that regard. There is a lot of documents that we have here and that's - I will make my decision based on those documents . . . [B]ut, I don't intend to rely on an expert for something like that. A. 93-94 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial transcript, 1373:181374:7 (emphasis added)). Judge Braden was the judge in both SMUD and System FuelsMississippi. 14

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First, Ms. Supko's methodology concerning the "reasonableness" of a rate of acceptance is simply a determination of whether a particular rate of acceptance satisfies the two "key issues" chosen by counsel, A. 173; 36-38 (Acceptance Rate Report at 1; Wisconsin Electric Power Co. v. United States, No. 00-697C (Fed. Cl.) deposition testimony of Eileen Supko, June 27, 2006, 1315), and, consequently, is not subject to any type of scientific testing. Whether any particular rate of acceptance is "reasonable" is a subjective judgment call made by Ms. Supko. It is not possible to test such a theory, because it is not science.5 Indeed, Ms. Supko concedes that rates of acceptance lower than the 3,000 MTU steady-state rate may be reasonable, but she has not endeavored to determine what the minimum reasonable rate of acceptance is. A. 95-96 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1400:241401:6). For example, although Ms. Supko utilizes the aggregate annual SNF discharge rate of all utilities, 2,000 MTU per year, as a benchmark for determining the reasonableness of the amount of additional at-reactor storage after 1998, Ms. Supko has not endeavored to determine how far above that annual discharge rate the amount of additional at-reactor storage number could be and still be deemed "reasonable." A. 60-62, 63; 108; 20 (System Fuels, Inc. v. United States, No. 03-2623 (Fed. Cl.), deposition testimony of Eileen Supko, July 19, 2006, 119-121, 139; System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1448:4-20);
5

Indeed, Ms. Supko admitted at trial in Southern Nuclear that, were the Court to reject the two "requirements" (which are essentially the same as the "key issues" in this case) upon which she modeled various acceptance rates, she would need to utilize new assumptions against which to measure various rates. A. 9 (Southern Nuclear Operating Co. v. United States, No. 98614 (Fed. Cl.) trial testimony of Eileen Supko, 739:5-9). However, Ms. Supko was unable to identify any alternative criteria that could be used to evaluate the "reasonableness" of various DOE acceptance rates. A. 9 (Id. at 739:10-21). 15

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Southern Nuclear Operating Co. v. United States, No. 98-614 (Fed. Cl.) trial testimony of Eileen Supko, 808:15-24). Indeed, any such determination would necessarily be based upon nothing more than a subjective judgment incapable of scientific testing. Courts have not hesitated to exclude proposed expert testimony based upon subjective judgments or "intuition" such as the testimony that Ms. Supko intends to offer in this case. See Zenith Electronics, 395 F.3d at 41819; Brown v. Wal-Mart Stores, Inc., 402 F. Supp. 2d 303, 309 (D. Me. 2005) (rejecting expert opinion that "merely places an expert sheen on common sense," without employing any testable methodology). Second, Ms. Supko has acknowledged that she has never subjected her methodology concerning the reasonableness of a particular rate of acceptance to peer review. A. 129-30 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1486:24-1487:3). Although "[p]ublication, which is an element of peer review, `is not a sine qua non of admissibility,'" it may suggest "good science." Oddi v. Ford Motor Co., 234 F.3d 136, 145 (3d Cir. 2000) (quoting Daubert, 509 U.S. at 593); see Zaremba v. General Motors Corp., 360 F.3d 355, 358 (2d Cir. 2004) (affirming trial court's exclusion of expert where expert had not subjected methodology to peer review or publication); Fuesting, 421 F.3d at 537 (affirming trial court's exclusion of expert witness based, in part, upon lack of peer review of opinion or methodology offered by expert). The lack of peer review or publication highlights the fact that Ms. Supko's opinion concerning the "reasonableness" of a particular rate of acceptance is nothing more than a subjective judgment that is incapable of testing. Third, there is no support that Ms. Supko's methodology is one that is "generally accepted" in the relevant scientific community. "Widespread acceptance can be an important 16

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factor in ruling particular evidence admissible, and a known technique which has been able to attract only minimal support with the community may properly be viewed with skepticism." Oddi, 234 F.3d at 145 (quoting Daubert, 509 U.S. at 594); see Zaremba, 360 F.3d at 358 (affirming trial court's exclusion of expert where party tendering expert failed to demonstrate that expert's opinion or methodology was generally accepted). In this case, Ms. Supko's expert reports fail to demonstrate or suggest that her methodology in determining the "reasonableness" of a particular rate of acceptance possesses widespread acceptance in the relevant community.6 Finally, and perhaps most significantly, with respect to the rate of error in Ms. Supko's methodology, Ms. Supko has continuously revised her analysis based upon previous significant errors in her model. Although Ms. Supko has, to date, authored expert reports on behalf of approximately 13 plaintiffs in spent nuclear fuel cases, the numbers, or outputs, from Ms. Supko's model in these reports have changed ­ and, in many instances, changed significantly. These changes, which were made after recognition that her model was producing flawed results, call into question the reliability of her overall conclusions in this case. Although Ms. Supko has offered the same opinion concerning the reasonableness of a 3,000 MTU steady-state rate (Scenario 1) in virtually every acceptance rate report that she has authored to date, the amount of additional at-reactor storage that she calculates has changed dramatically over the course of her reports. In Ms. Supko's expert report in Commonwealth Edison Co. v. United States, No. 98-621C (Fed. Cl.), Ms. Supko concluded that there would be

Similarly, the Court in Indiana Michigan Power Co. v. United States, 60 Fed. Cl. 639 (2004), aff'd, 422 F.3d 1369 (Fed. Cir. 2005), rejected Ms. Supko's opinions concerning a prediction as to when DOE would open a repository, concluding that "[s]he did not present a `methodology' that could be used by experts in such a field." Id. at 647. 17

6

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1,600 MTUs of additional at-reactor storage under a 3,000 MTU steady-state rate. A. 125 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1481:13-24). In Ms. Supko's next expert report in SMUD, however, Ms. Supko concluded that there would be only 600 MTUs of additional at-reactor storage under a 3,000 MTU steady-state rate. Ms. Supko admitted that the reason for this 1,000 MTU decrease in her calculation of additional storage requirements was her failure to consider linking a utility that had dry storage in 1998 with that utility's wet pool in her SPNTFUEL model. A. 125-26 (Id. at 1481:25-1482:12). Significantly, Ms. Supko has admitted that she committed another error in her calculations in SMUD and underestimated the amount of additional at-reactor storage under a 3,000 MTU steady-state rate of acceptance by 430 MTUs. A. 125-28 (Id. at 1481:18-1484:3). Ms. Supko conceded that, in a report that she subsequently authored for another SNF client in South Carolina Electric & Gas Co. v. United States, No. 04-101C (Fed. Cl.), she calculated 1,030 MTUs of additional at-reactor storage under a 3,000 MTU steady-state rate (Scenario 1). A. 128 (Id. at 1484:4-9). Ms. Supko has explained that the reason that she has now increased her calculation of the amount of additional at-reactor storage by 430 MTUs was because she had "underestimated the requirements at the eight sites that had dry storage prior to 1998. I underestimated their requirements post-1998 because of the way that I linked things in the model." A.10-11; 128 (Southern Nuclear Operating Co. v. United States, No. 98-614 (Fed. Cl.) trial testimony of Eileen Supko, 746:2-747:7; System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1484:10-14). Tellingly, and despite these drastic changes in the amount of additional at-reactor storage that Ms. Supko has calculated, Ms. Supko has never modified her opinion concerning the reasonableness of a 3,000 MTU steady-state rate 18

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of acceptance. Indeed, Ms. Supko has conceded that the numbers which she has calculated regarding additional at-reactor storage may change yet again in the future as she receives updated information from utilities whom she represents as clients. A.14 (Southern Nuclear Operating Co. v. United States, No. 98-614 (Fed. Cl.) trial testimony of Eileen Supko, 756:3-9). Yet, this tremendous variance in at-reactor storage ­ from a high of 1,600 MTU to a low of 600 MTU to a number somewhere in-between ­ calls into serious question the reliability of the results of Ms. Supko's analysis in this case. B. The Court Should Disregard Ms. Supko's Opinions Because Her Model Lacks Evidentiary Support

In determining whether a hypothetical model such as the one that Ms. Supko offers provides a sufficient basis for an award of damages, plaintiff must, as we discussed in our pretrial brief, establish a realistic and complete "but for" world. See Ericsson, Inc. v. Harris Corp., 352 F.3d 1369, 1379-80 (Fed. Cir. 2003) (patentee seeking lost profits for infringement must account for the effects of "hypothetically increased price" in "but for" world); Bluebonnet Sav. Bank v. United States, 339 F.3d 1341, 1345-46 (Fed. Cir. 2003) (requiring trial court to determine costs that plaintiff would have incurred in absence of breach); Glendale Fed. Bank FSB v. United States, 239 F.3d 1374, 1380 (Fed. Cir. 2001) (plaintiffs bear the burden of proving "what might have been"); Dolphin Tours, Inc. v. Pacifico Creative Serv., Inc., 773 F.3d 1506, 1512 (9th Cir. 1985) ("[i]n projecting free market profits, antitrust plaintiffs are not entitled to assume favorable aspects of an anticompetitive market"); PG&E, 73 Fed. Cl. at 386 ("[p]laintiff bears the burden of `establishing what might have been' with reasonable certainty had the defendant performed the Standard Contract"); Restatement (Second) of Contracts § 347(c).

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Where, as here, WEPCO attempts to prove that it has suffered damages using a "computer [model] of the hypothetical `but for'" world premised upon a number of critical assumptions, the "failure to establish the reasonableness of these assumptions is fatal" to the damage claim. Southern Pac. Commc'n Co. v. AT&T, 556 F. Supp. 2d 825, 1076 (D.D.C. 1982); see Bluebonnet Sav. Bank, F.S.B. v. United States, 266 F.3d 1348, 1358 (Fed. Cir. 2001); LaSalle Talman Bank, F.S.B. v. United States, 45 Fed. Cl. 64, 93-95 (1999), aff'd in part, rev'd in part, 317 F.3d 1363 (Fed. Cir. 2003); Kidder, Peabody & Co. v. IAG Int'l Acceptance Group N.V., 28 F. Supp. 2d 126, 134 (S.D.N.Y. 1998). WEPCO's damages model may not be based upon mere speculation or hypotheticals. Home Sav. of Am. v. United States, 57 Fed. Cl. 694, 727 (2003), aff'd in part, rev'd in part, 399 F.3d 1341 (Fed. Cir. 2005) (citing Franklin Fed. Sav. Bank v. United States, 55 Fed. Cl. 108 (2003); Willems Indus., Inc. v. United States, 155 Ct. Cl. 360, 295 F.2d 822 (1961)). This Court has repeatedly rejected expert models that lack evidentiary foundation, on the grounds that such models are improperly speculative. In Castle v. United States, 48 Fed. Cl. 187 (2000), aff'd in part, rev'd in part, & remanded in part on other grounds, 301 F.3d 1328 (2002), this Court rejected the expert's model because it was based upon assumptions that were contrary to facts in the record. Id. at 206. Specifically, this Court held that "[a] claim whose basic structural components lack such factual foundation is simply speculation." Id. Likewise, in Fifth Third Bank v. United States, 55 Fed. Cl. 223 (2003), the Court rejected plaintiff's damages model, explaining that: Plaintiff's model ignores the presence of competitors similarly unfettered by the breaching provisions of FIRREA. But the most outstanding flaw is the assumption that the But-for-Bank would, 20

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even if it could, engage in the same type of activities without identifying any specific investments or opportunities, and that these activities would produce the same results (discounted to be conservative) as the actual business activities in which plaintiff engaged. The court agrees with defendant that this deficiency renders plaintiff's model speculative as a matter of fact and law. Id. at 241; accord Southern Nat'l Corp. v. United States, 57 Fed. Cl. 294, 305 (2003); see also Glendale Fed. Bank, FSB v. United States, 43 Fed. Cl. 390, 399 (1999), aff'd in part, vacated in part, remanded on other grounds, 239 F.3d 1374 (Fed. Cir. 2001) ("The court believes that plaintiff's lost profits model suffers from serious defects, which undercut the basis for using it as a credible model for ascertaining lost profits . . . ."); Suess v. United States, 52 Fed. Cl. 221, 228 (2002) (rejecting damages model as "premised on unrealistic assumptions"). In this case, Ms. Supko's model is significantly flawed because it does not represent either the "but for" or the actual world, but rather is a "hybrid" of both worlds. Ms. Supko endeavors to use her company's SPNTFUEL model to calculate the amount of additional storage requirements for utilities after 1998 in the "but for" world where DOE begins industry-wide spent fuel acceptance beginning on January 31, 1998. However, Ms. Supko admits that she includes in her "but for" world model dry storage from utilities such as Northern States Power Company, even though Northern States claimed it would not have needed dry storage had DOE performed in 1998. A. 135 (Northern States Power Co. v. United States, No. 98-484C (Fed. Cl.) trial testimony of Eileen Supko, 2582:5-11) ("[B]ecause [Northern States] had dry storage, maybe I should call this [model] a hybrid because I was trying to reflect the world as it existed in the real world as of 1998 . . ."). As Ms. Supko recently explained at trial in the Northern States case in response to the Court's questions concerning her "hybrid" model:

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Yes, you know, it's difficult to think about where to draw the line in terms of the actual world that the nuclear companies have been operating in and the imaginary but-for world. As I said, I suppose I could have assumed no dry storage into any plant and to see where that would lead into in the analysis. Or I could have hypothetically changed pool capacities, assuming companies would have reracked. I did not do that. I used information I had available. And, I will, again, remind you that this is a projection, these are projections. They're based on a set of inputs, and if you change the inputs, you make it a different calculation of additional storage requirements. A. 136 (Id. at 2583:4-20 (emphasis supplied)) Indeed, although Ms. Supko's SPNTFUEL model purports to model a "but for" world, Ms. Supko acknowledges that her model uses spent fuel pool capacities for plants that had added additional storage capacity to their pools after 1998. A. 110-11 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.), trial testimony of Eileen Supko, 1459:20-1460:3). For example, Ms. Supko's model assumes spaces for Southern Nuclear's Plant Hatch spent fuel pool that include not only a post-1998 rerack, but also a temporary rack that was never actually installed. A.111; 112 (Id. at 1460:4-16; 1461:17-22). Additionally, Ms. Supko utilized South Carolina Electric & Gas's 2002 rerack of its spent fuel pool in her model for purposes of modeling DOE performance beginning in 1998. A. 12-13 (Southern Nuclear Operating Co. v. United States, No. 98-614 (Fed. Cl.) trial testimony of Eileen Supko, 751:23-752:5). These differences in pool capacities decrease the post-1998 additional at-reactor storage calculations in her SPNTFUEL model. Consequently, as Ms. Supko concedes, if 1998 data were properly used, it would increase the number of plants requiring additional at-reactor storage after 1998. A. 114-15 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1465:5-1466:25).

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Ms. Supko admitted that she is using post-1998 pool capacity modifications for "about a dozen" plants. A.113-14 (Id. at 1464:14-1465:4). When asked why she used post-1998 actual additional storage for purposes of determining what the "but for" world would have looked like in 1998, Ms. Supko candidly admitted that she did not "go back and try to see what the world looked like for every pool in 1998. That would have required my going back into the Nuclear Regulatory Commission's docket for every nuclear power plant and looking at license amendments." A.13 (Southern Nuclear Operating Co. v. United States, No. 98-614 (Fed. Cl.) trial testimony of Eileen Supko, 752:21-25). Yet, that is precisely the type of analytical rigor expected from an expert. Ms. Supko's failure properly to model the "but for" world simply reflects a flaw in her overall analysis and seriously calls into question her overall opinions in this case. Ms. Supko's inability to "draw the line" between the "but for" and actual worlds in her model in terms of the spent fuel storage situation of the utilities results in her model providing no meaningful information to the Court in terms of the additional storage requirements needed post1998 in the "but for" world. Absent any reliable determination by Ms. Supko concerning what utility spent fuel storage needs would be had DOE performed beginning in 1998, Ms. Supko's calculation of utility storage needs after 1998 is entirely flawed. Because Ms. Supko's "hybrid" model does not provide any meaningful or reliable information about either the "but for" or actual worlds, her testimony concerning the outputs of this model ­ including her calculation of post-1998 spent fuel storage requirements in the "but for" world - should be excluded. Further, Ms. Supko's hypothetical model of the "but for" world is not based upon actual facts, but, rather, is based upon industry-wide assumptions which, in many instances, bear no 23

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relation to the actual or "but for" world. For example, despite Ms. Supko's concession that the determination of an operating reserve7 is utility-specific, Ms. Supko has not endeavored to apply individual utilities' operating reserve policies in her industry-wide acceptance rate model. A. 130 (System Fuels, Inc. v. United States, No. 03-2624 (Fed. Cl.) trial testimony of Eileen Supko, 1480:10-17). Rather, regardless of what an individual utility's operating reserve policy actually is, and despite the fact that Ms. Supko has endeavored to model what reasonable acceptance would have looked like in the "but for" world, Ms. Supko has simply made a uniform assumption of one full core reserve per pool for each utility, and has not endeavored to determine which individual utilities reserve more space than a full core reserve. A. 130 (Id. at 1480:10-17). Ms. Supko admitted that, had she increased her operating reserve assumption beyond one full core, it could potentially increase the amount of additional at-reactor storage that she has calculated. A. 130 (Id. at 1480:18-24). In addition, Ms. Supko uses the licensed capacity of the spent fuel pools, rather than 1998 actual usable capacity, in her model for those utilities that are not her clients.8 A. 119-20 (Id. at 1470:22-1471:4). However, as Ms. Supko has acknowledged, the number of spaces in spent fuel pools may differ between licensed and actual usable capacity. A. 116;117-18 (Southern Nuclear

A full core reserve refers to utilities reserving enough space in their spent fuel pools to offload all of the nuclear fuel in the reactor. A. 122 (System Fuels, Inc. v. United States, No. 032624 (Fed. Cl.) trial testimony of Eileen Supko, 1478:1-8). Some companies reserve more than a full core. The amount of space a utility actually reserves is referred to as a operating reserve. A. 123-124 (Id. at 1479:23-1480:17). For those utilities that are her clients, she uses the actual usable capacity in her model to the extent that her clients provide her with this information. A. 116; ; 119; 119-20 (System Fuels, Inc. v. United States, No. 03-2623C (Fed. Cl.), trial testimony of Eileen Supko, 1467:5-12; 1470:22-1471:4; 1471:23-1472:6 ). 24
8

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Operating Co. v. United States, No. 98-614 (Fed. Cl.) trial testimony of Eileen Supko, 1467:512; 1468:7-1469:4). Indeed, in WEPCO's case, the difference between licensed capacity and usable capacity in 1997 was 18 spaces. Ms. Supko has not calculated whether her use of licensed capacity over actual usable capacity affects additional at-reactor storage requirements under her model. A. 120-21 (Id. at 1471:23-1472:6). Consequently, Ms. Supko's model does not properly account for available at-reactor storage in the "but for" world. Ms. Supko has admitted that, despite the fact that she is endeavoring to model a "but for" acce