Free Motion for Partial Summary Judgment - District Court of Federal Claims - federal

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 1 of 7

IN THE UNITED STATES COURT OF FEDERAL CLAIMS _______________________________________

WISCONSIN ELECTRIC POWER COMPANY, Plaintiff, v. THE UNITED STATES, Defendant.

No. 00-697C Senior Judge Merow

WE'S MOTION FOR PARTIAL SUMMARY JUDGMENT ON LIABILITY Pursuant to RCFC 56, plaintiff Wisconsin Electric Power Company ("WE") respectfully requests that the Court enter summary judgment establishing Defendant's liability for partial breach of its Standard Contract with WE. I. STATEMENT OF THE ISSUE

Whether the Defendant is liable for breach of contract as a matter of law when there is no genuine issue of material fact as to the Defendant's failure to perform a fundamental obligation by the date explicitly set forth in the Standard Contract. II. A. WE's Standard Contract In 1983, WE entered into the U.S. Department of Energy Contract for the Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste ("Standard Contract") with the Department of Energy ("DOE"). See WE PFUF ¶ 1. Under the Standard Contract, DOE promised to begin removal of WE's spent nuclear fuel ("SNF") no later than January 31, 1998. See Id. ¶¶ 2-3. In 1995, DOE announced that it would be unable to begin accepting SNF until 2010, and subsequently admitted that it did not begin disposing of SNF under any Standard Contract by the contractually required date. See Id. ¶¶ 4-5. DOE's failure to begin accepting, transporting, and disposing of SNF under the Standard Contract was a "breach [that] involved all STATEMENT OF THE CASE

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 2 of 7

the utilities that had signed the contract ­ the entire nuclear electric industry." Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1343 (Fed. Cir. 2000); WE PFUF ¶ 6. B. WE's Request For A Liability Order and the Government's Acknowledgement of Its Partial Breach of the Standard Contract in WE's Case In November 2000 WE brought the instant suit under the Standard Contract, alleging that it suffered substantial damages as a result of DOE's breach of WE's Standard Contract. See WE PFUF ¶¶ 7-8. On June 14, 2001, Judge Wiese conducted a hearing to review the utility plaintiffs' requests for coordinated discovery in the SNF cases and the Government's motion to reassign the SNF cases to a single judge. During that hearing, Judge Wiese recognized the importance of having "determinations of liability entered in all of th[e] cases," in light of the governing decisions of the United States Court of Appeals of the Federal Circuit in Maine Yankee and Northern States Power Co. v. United States, 224 F.3d 1361 (Fed. Cir. 2000). Judge Wiese instructed the parties to file requests for an order of liability in each of the individual cases. See June 14, 2001, Transcript of Proceedings, at 140:5-22.1 In response to Judge Wiese's instruction, the Government indicated that it would not contest the entry of an order establishing its liability for partial breach of contract in the SNF cases, except for the case filed by the Tennessee Valley Authority. Id. at 141:16-25. Subsequently, this Court issued an Order on July 24, 2001, directing the parties to file briefs regarding whether an order shall be issued establishing breach of contract liability in this case. In accordance with that Order, WE requested that summary judgment be entered against the Government on liability for partial breach of contract consistent with the governing decisions of the Federal Circuit in Maine Yankee and Northern States Power, and consistent with the Government's admissions that it breached WE's contract. See Plaintiff's Response to the Court's July 24, 2001 Order (August 16, 2001). The Government did not directly oppose or otherwise specifically address WE's request for entry of summary judgment. Instead, the Government

1

Citations to the transcript of proceedings are to page and line numbers. 2

DA041190028.DOC

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 3 of 7

conceded "that DOE's inability to begin the services to be provided by the Standard Contract by January 31, 1998 constituted a partial breach of the Standard Contract." Defendant's Response to the Court's July 24, 2001 Order (Aug. 15, 2001) at 3 (emphasis added); WE PFUF ¶ 9. Despite the Government's acknowledgement that it breached WE's Standard Contract, the Court has not yet entered an order establishing that the Government is liable for its breach. Accordingly, and for the reasons set forth more fully below, WE requests that the Court enter summary judgment of liability for partial breach of contract in favor of WE. III. A. Summary Judgment Standard Summary judgment may be granted on "any part" of a plaintiff's claim, when, as here, "there is no genuine issue of material fact . . . and the moving party is entitled to a judgment as a matter of law." RCFC 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Summary judgment may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages. RCFC 56(c); see also Maine Yankee, 225 F.3d 1336 (Fed. Cir. 2000) (granting partial summary judgment of liability for partial breach of contract). Partial summary judgment on liability for breach of contract is appropriate when there is no genuine issue of material fact that the non-moving party defaulted on its unqualified contractual obligations, and where it is undisputed that the moving party has paid all contract fees. See e.g., Maine Yankee, at 1339, 1341-42 (Government liable for breach of contract where plaintiff utility paid all contract fees, but Government failed to begin disposing of waste as required by the time set forth in the contract). A party opposing summary judgment must show that there is a genuine issue of material fact that, if decided in its favor, would entitle a jury to rule in its favor. Celotex Corp., 477 U.S. at 324. The opposing party cannot rely upon mere denials. Id. at 323. ARGUMENT

DA041190028.DOC

3

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 4 of 7

B.

The Undisputed Facts Demonstrate The Government's Liability For Its Partial Breach of WE's Standard Contract Here, the undisputed facts demonstrate that as a matter of law the Government is liable to

WE for partial breach of contract, because (1) the Government had an unqualified contractual obligation to begin disposing of WE's SNF by January 31, 1998; (2) WE has paid all contract fees for the disposal of its SNF according to the terms of its contract; (3) the Government failed to begin disposing of WE's SNF as required, and has stated that it will not begin to do so until 2010, at the earliest; and (4) the only issue remaining in this case is the determination of the amount of damages to be assessed against the Government. A valid contract exists between WE and the DOE that obligated DOE to begin taking WE's SNF by January 31, 1998. See Indiana Michigan Power Co. v. United States, 88 F.3d 1272, 1276 (D.C. Cir. 1996) (DOE's obligation to begin to dispose of SNF by January 31, 1998, is "without qualification or condition."); Northern States Power Co. v. Dep't. of Energy, 128 F.3d 754, 760 (D.C. Cir. 1997) (DOE has duty to begin taking the SNF by January 31, 1998, whether or not it has a repository or interim storage facility). As of April 26, 2004, WE had paid over $194 million in contract fees into the Nuclear Waste Fund as required by the Standard Contract. Declaration of Paul R. Farron, (Apr. 26, 2004) ¶ 3, WE PFUF ¶ 10. DOE failed to honor its contractual obligations to accept WE's SNF pursuant to the terms of the Standard Contract. Indeed, DOE has stated that it missed the January 31, 1998 deadline and that it may not commence such disposal until 2010, at the earliest. See Final Interpretation, 60 Fed. Reg. 21,793, 21,794 (May 3, 1995), Defendant's Rate Motion PFUF, ¶ 132, WE PFUF ¶¶ 4-5. The Federal Circuit conclusively determined that DOE's acknowledged failure to begin disposal of SNF on January 31, 1998, constitutes a partial breach of the Standard Contract at issue in this case for which the Government is liable. Maine Yankee 225 F.3d at 1343; Northern States, 224 F.3d at 1367. In granting Maine Yankee's motion for partial summary judgment of liability for breach of contract, the Federal Circuit stated that "[t]he breach involved all the utilities that had signed the contract ­ the entire nuclear industry." 225 F.3d at 1342 (emphasis added). Moreover, the Government has expressly admitted that its inability to provide services
DA041190028.DOC

4

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 5 of 7

under the Standard Contract by January 31, 1998 constituted a partial breach of contract. See Defendant's Response to the Court's July 24, 2001 Order (Aug. 15, 2001) at 3, WE PFUF ¶ 9. In Southern Nuclear Operating Company, et al. v. United States, No. 98-614C, this Court recently ruled that the Government partially breach the Standard Contracts, concluding: "the United States, operating through DOE, failed to meet the contractual requirement to begin disposition of the nuclear waste covered by the Standard Contracts by no later than January 31, 1998." April 7, 2004 Order at 5 (See Attachment 1). Accordingly, WE's motion for summary judgment on contract liability should be granted. Whether the Government's breach caused any injury to the plaintiff and the amount of that injury "[are] matter[s] that should properly be heard during the damages phase of the case." Hometown Financial, Inc. v. United States, 53 Fed. Cl. 326, 338 (2002).2 Resolution of the damages issues in WE's case need not be reached prior to entry of partial summary judgment on breach of contract liability. See Id. (granting partial summary judgment on liability for breach, rejecting Government's position that it cannot be found liable because plaintiff failed to establish that the breach of contract caused any injury); Globe Savings Bank, F.S.B., v. United States, 55 Fed. Cl. 247, 263 (2003) (granting partial summary judgment on breach of contract liability and deferring any rulings regarding damages because Government clearly breached its contract and therefore, is liable for any damages resulting from its breach). In sum, the outcome on the Government's liability for partial breach of contract in this case is controlled by the Court's decisions in Maine Yankee and Northern Power. WE is entitled to summary judgment on the issue of liability.

WE previously identified in its Complaint at least $35 million in damages directly resulting from the Government's breach of the Standard Contract. WE PFUF ¶¶ 7-8.
DA041190028.DOC

2

5

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 6 of 7

IV.

CONCLUSION

For the foregoing reasons, WE respectfully requests that the Court enter an Order granting WE partial summary judgment on the issue of liability. Dated: April 28, 2004 Respectfully submitted,

Of Counsel: Martin P. Willard Donald J. Carney Perkins Coie LLP 607 Fourteenth Street, N.W. Washington, D.C. 20005 (202) 434-1635

s/Richard W. Oehler by s/Donald J. Carney Richard W. Oehler Perkins Coie LLP 1201 Third Avenue, 40th Floor Seattle, Washington 98101-3099 (206) 583-8419

Attorneys for Plaintiff WISCONSIN ELECTRIC POWER COMPANY

DA041190028.DOC

6

Case 1:00-cv-00697-JFM

Document 165

Filed 04/28/2004

Page 7 of 7

Certificate of Filing I hereby certify that on this 28th day of April 2004, a copy of the foregoing "WE's Motion for Partial Summary Judgment on Liability" was filed electronically. I understand that notice of this filing will be sent to all parties by operation of the Court's electronic filing system. Parties may access this filing through the Court's system.

s/Donald J. Carney Donald J. Carney

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 1 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 2 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 3 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 4 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 5 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 6 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 7 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 8 of 9

Case 1:00-cv-00697-JFM

Document 165-2

Filed 04/28/2004

Page 9 of 9