Free Response to Motion - District Court of Federal Claims - federal

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 1 of 9

No. 00-697C (Senior Judge Merow)

IN THE UNITED STATES COURT OF FEDERAL CLAIMS WISCONSIN ELECTRIC POWER COMPANY, Plaintiff, v. UNITED STATES, Defendant. ______________________________________________________________________________ DEFENDANT'S RESPONSE TO PLAINTIFFS' MOTION FOR AN ORDER REGARDING SUBSEQUENT DAMAGES ACTIONS AND REQUEST FOR EXPEDITED CONSIDERATION AND CROSS-MOTION FOR SUMMARY JUDGMENT REGARDING PRE-BREACH AND FUTURE DAMAGES

OF COUNSEL: JANE K. TAYLOR Office of General Counsel U.S. Department of Energy 1000 Independence Ave., S.W. Washington, D.C. 20585

PETER D. KEISLER Assistant Attorney General DAVID M. COHEN Director HAROLD D. LESTER, JR. Assistant Director 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 Tele: (202) 305-9640 Fax: (202) 307-2503

March 11, 2005

Attorneys for Defendant

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 2 of 9

TABLE OF CONTENTS TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii INDEX TO THE APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii DEFENDANT'S RESPONSE TO PLAINTIFFS' MOTION FOR AN ORDER REGARDING SUBSEQUENT DAMAGES ACTION AND REQUEST FOR EXPEDITED CONSIDERATION AND CROSS-MOTION FOR SUMMARY JUDGMENT REGARDING PRE-BREACH AND FUTURE DAMAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SUMMARY OF THE ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 I. WEPCO SEEKS TO RECOVER DAMAGES FOR A PARTIAL, RATHER THAN TOTAL, BREACH OF CONTRACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 WEPCO CAN RECOVER ONLY FOR PARTIAL BREACHES THAT HAVE OCCURRED AS OF THE FILING OF ITS COMPLAINT . . . . . . . . . . . . . . . . . 4 A. DOE's Continuing Breaches Are Tied To The Failure To Accept SNF In Accordance With The Approved DCSs With Individual Utilities . . . . . . . 4 Performance In 2010 Has Not Been Established As An Independent Contractual Commitment Pursuant To The Standard Contract . . . . . . . . . 9

II.

B.

III.

BECAUSE WEPCO SEEKS CONTINUED PERFORMANCE OF THE STANDARD CONTRACT, WEPCO CANNOT RECOVER DAMAGES FOR COSTS THAT WERE INCURRED PRIOR TO DOE'S PARTIAL BREACHES OF CONTRACT OR AFTER THE DATE THAT ITS COMPLAINT WAS FILED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A. The Measure Of Damages For A Partial Breach Of Contract Differs From That For A Total Breach Of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Because WEPCO Has Elected To Pursue Damages For A Partial Breach Of Contract, Rather Than A Total Breach, It Cannot Recover Damages That Pre-Date The Actual Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 1. Under A Partial Breach Claim, A Plaintiff Cannot Rely Upon An Anticipatory Partial Repudiation Theory To Recover Damages That Precede The Actual Partial Breach . . . . . . . . . . . . . . . . . . . 16

B.

i

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 3 of 9

2.

WEPCO Cannot Circumvent The Legal Bar To Recovery Of Its Pre-Breach Damages By Formulating Them As Costs Incurred In The Exercise Of Its Duty Of Mitigation . . . . . . . . . . . . . . . . . . . 23

C.

WEPCO Also Cannot Recover As Damages Costs Incurred After The Date That Its Complaint Was Filed . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 BY REQUESTING THE ABILITY TO RETURN TO THE COURT WITH FUTURE CLAIMS, WEPCO RECOGNIZES THE LIMITATIONS UPON ITS ABILITY TO RECOVER FUTURE OR PROSPECTIVE DAMAGES . . . . . . . 33 A. WEPCO, In Seeking To "Split" Its Claims, Recognizes That It Cannot Now Litigate The Damages Arising From Future Partial Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 The Court Need Not Retain Jurisdiction Or Toll The Statute Of Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

IV.

B.

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

ii

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 4 of 9

TABLE OF AUTHORITIES FEDERAL CASES Alyeska Pipeline Service Co. v. United States, 688 F.2d 765 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Ammex, Inc. v. United States, 334 F.3d 1052 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Apex Pool Equipment Corp. v. Lee, 419 F.2d 556 (2d Cir. 1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Barron Bancshares, Inc. v. United States, 366 F.3d 1360 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Brown v. United States, 3 Cl. Ct. 409 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Brunswick Corp. v. Sheridan, 582 F.2d 175, 183 (2d Cir. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Cherokee Nation of Oklahoma v. United States, 23 Cl. Ct. 735 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Christopher Village, L.P. v. United States, 360 F.3d 1319 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Cities Service Helex, Inc. v. United States, 211 Ct. C 543 F.2d 1306 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 16, 19, 22 City of Fairfax, Va. v. Washington Metropolitan Area Transit Authority, 582 F.2d 1321 (4th Cir. 1978), cert. denied, 440 U.S. 914 (1979) . . . . . . . . . . . . . . 19, 28 Container Transportation International, Inc. v. United States, 468 F.2d 926, 199 Ct. 713 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Danzig v. AEC Corp., 224 F.3d 1333 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 19 Dittmore-Freimuth Corp. v. United States, 390 F.2d 664 (Ct. Cl. 1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

iii

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 5 of 9

Dunkin Donuts of America, Inc. v. Minerva, Inc., 956 F.2d 1566 (11th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Everett Plywood Corp. v. United States, 206 Ct. Cl. 244, 512 F.2d 1082 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Fraas Surgical Mfg. Co. v. United States, 215 Ct. Cl. 820, 828-29, 571 F.2d 34, 39 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Franconia Associates v. United States, 536 U.S. 129 (2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18, 19, 22 Frazer v. United States, 288 F.3d 1347 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Hansen Bancorp, Inc. v. United States, 367 F.3d 1297 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Hansen Bancorp, Inc. v. United States, 53 Fed. Cl. 92 (2002), vacated and remanded on other grounds, 367 F.3d 1297 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Indiana Michigan Power Co. v. United States, 60 Fed. Cl. 639 (2004), appeal pending, No. 04-5122 (Fed. Cir. docketed July 24, 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Irwin v. Department of Veterans Affairs, 498 U.S. 89 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Juice Farms Inc. v. United States, 68 F.3d 1344 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Lovink v. Guilford Mills, Inc., 878 F.2d 584 (2d Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 15 Lucente v. IBM Corp., 310 F.3d 243 (2d Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21, 22 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Middleton v. United States, 175 Ct. Cl. 786 (1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

iv

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 6 of 9

Mobil Oil Exploration v. United States, 530 U.S. 604 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Nager Electric Co. v. United States, 177 Ct. Cl. 234, 368 F.2d 847 (1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 PVI, Inc. v. Ratiopharm, 253 F.3d 320 (8th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Pinewood Realty Ltd. P'ship v. United States, 223 Ct. Cl. 98, 617 F.2d 211 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15, 23 Quick v. American Steel & Pump Corp., 397 F.2d 561 (2d Cir. 1968) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Rapid City Indian Health Advisory Bd. of Directors, ASBCA No. 26641, 83-1 BCA ¶ 16,311, at 81,084 (1983) . . . . . . . . . . . . . . . . . . . . . . . 9 Reynolds v. United States, 141 Ct. Cl. 211, 158 F. Supp. 719 (1958) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Robinson v. United States, 305 F.3d 1330 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Roboserve, Inc. v. Kato Kagaku Co., 78 F.3d 266 (7th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Roehm v. Horst, 178 U.S. 1 (1900) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 S&R Corp. v. Jiffy Lube International, Inc., 968 F.2d 371 (3d Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 San Carlos Irrigation & Drainage District v. United States, 23 Cl. Ct. 276 (1991), aff'd, 111 F.3d 1557 (Fed. Cir. 1997) . . . . . . . . . . . . . . . 12, 29, 30 Tennessee Valley Authority v. United States, 60 Fed. Cl. 665 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Tretchick v. Department of Transportation, 109 F.3d 749 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 18 v

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 7 of 9

United States v. Dekonty Corp., 109 F.3d 749 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 United States Fidelity & Guaranty Co. v. United States, 230 Ct. Cl. 355, 365-70, 676 F.2d 622, 628-31 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Wisconsin Power & Light Co. v. Century Indemnity Co., 130 F.3d 787 (7th Cir.1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Yankee Atomic Electric Co. v. United States, No. 98-126C, 2004 WL 1535688 (Fed. Cl. June 28, 2004) . . . . . . . . . . . . . . 25, 26, 30, 32 Young Engineers, Inc. v. United States International Trade Commission, 721 F.2d 1305 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 STATE CASES Coughlin v. Blair, 41 Cal. 2d 587, 262 P.2d 305 (1953) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 31 Kaiser v. Northwest Shopping Ctr., Inc., 587 S.W.2d 454 (Tex. Civ. Ct. 1979)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28, 30

Keefe Co. v. Americable International, Inc., 755 A.2d 469 (D.C. Ct. App. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 May v. Morganelli-Heumann &Associates, 618 F.2d 1363 (9th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 FEDERAL STATUTES AND REGULATIONS 28 U.S.C. § 2501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 36 10 C.F.R. § 961.11 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim MISCELLANEOUS 4 A. Corbin, Corbin on Contracts § 972 (1951) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 28 9 A. Corbin, Corbin on Contracts § 946 (interim ed. 1979) . . . . . . . . . . . . . . . . . . . 12, 13, 14, 32 9 A. Corbin, Corbin on Contracts § 950 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 9 A. Corbin, Corbin on Contracts § 956 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14, 27 vi

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 8 of 9

Restatement (First) of Contracts § 313 (1932) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13, 30 Restatement (Second) of Contracts § 236 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 13, 19, 27 Restatement (Second) of Contracts § 253 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 19, 28 Restatement (Second) of Contracts § 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Restatement (Second) of Judgments § 26 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 28, 34

vii

Case 1:00-cv-00697-JFM

Document 181-2

Filed 03/11/2005

Page 9 of 9

INDEX TO THE APPENDIX Document Pages

Letter from M. Detmer, Contracting Officer, to Ronald G. Cocherell, Southern Nuclear Operating Company, dated March 4, 1992, attaching Instructions for Completing the Appendix C Delivery Commitment Schedule . . . . . . . . . . . . . . 1 Excerpt of Trial Testimony of Christopher Kouts in Yankee Atomic Electric Co. v. United States, No. 98-126C, August 2, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Excerpt of Civilian Radioactive Waste Management System Requirements Document, Rev. 05, January 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Excerpt of H.R. Rep. No. 108-212, "Energy and Water Development Appropriations Bill, 2004," July 16, 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Order, Tennessee Valley Authority v. United States, No. 01-249C, August 12, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Plaintiff's Supplemental Disclosures and Damages Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . 30

viii