Free Joint Status Report - District Court of Federal Claims - federal

Case 1:02-cv-01894-EJD

Document 89

Filed 08/08/2005

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS CONSUMERS ENERGY COMPANY, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. ) ) ) ) ) ) ) ) ) ) )

COFC No. 02-1894-C (Chief Judge Damich)

JOINT STATUS REPORT PURSUANT TO ORDER DATED JUNE 9, 2005 Plaintiff Consumers Energy Company ("Plaintiff" or "Consumers Energy"), and Defendant United States of America ("Defendant" or the "government"), by and through their respective attorneys, submit this Joint Status Report in accordance with the Court's Order dated June 9, 2005, and state as follows: On June 9, 2005, this Court entered an Order staying the case until further notice at the request of the parties, and directing the parties to file a joint status report on or before August 8, 2005, addressing the prospects of settlement and/or the resumption of dispositive motions, discovery, and trial preparation. STATUS OF SETTLEMENT DISCUSSIONS The parties continue to believe that the settlement reached in another SNF case, Exelon v United States, may form the conceptual basis for settlement in this case. The format of the Exelon settlement was a compromise, and included lump sum and yearly reconciliation components. Consumers Energy's economic expert has produced a report strictly for purposes of settlement, which conforms as closely as possible to the format of the Exelon settlement, as a basis to begin discussions.

Case 1:02-cv-01894-EJD

Document 89

Filed 08/08/2005

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Consumers Energy originally expected to be in a position to submit a position paper in support of settlement in June. Based on discussions with counsel for Defendant, we anticipated that the parties would arrange a meeting shortly afterward to discuss the underlying economic assumptions and documentation. As a result, the parties previously requested in their Joint Status Report dated June 6, 2005 that further motions, discovery and trial preparation be suspended for 60 days. The parties respectfully request an additional stay of 60 days to complete settlement discussions in this case. Consumers Energy formulated its initial settlement position without accounting for any right of recoupment by the government of the one-time fee required under Article VIII.A.1 of the Standard Contract. On April 29, 2005, this Court entered an Opinion and Order granting Plaintiff's Motion for Summary Judgment on contract liability, denying Defendant's Motion for Summary Judgment on Counts I and II, but granting Defendant's Motion in the Alternative for Recoupment against any prospective award of damages. The Court's ruling on the recoupment issue was reaffirmed by Order dated June 28, 2005, denying Consumers Energy's Motion for Reconsideration. Accounting for the government's right of recoupment significantly altered Consumers Energy's approach to settlement. As a result, Consumers Energy's economic expert has reassessed some of the underlying assumptions contained in its report prepared in May and Consumers Energy's settlement position has again been thoroughly reviewed at the corporate level. Consumers Energy believes it is now in a position to engage in substantive settlement discussions, and the government continues to believe that settlement discussions may be productive based on the format of the Exelon settlement. Because the formal settlement process

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Case 1:02-cv-01894-EJD

Document 89

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will require preparation of a statement of position letter, followed by a formal written offer by Consumers Energy, and a formal settlement offer assessment procedure by the Department of Justice, the parties believe that a further stay of 60 days would allow the parties to determine whether the case can be settled or whether a trial will be necessary. CONCLUSION AND RELIEF REQUESTED The parties respectfully request that further activity in this case be temporarily suspended for a period of 60 days while the parties engage in settlement discussions. The parties further request that they be allowed to file a Joint Status Report in 60 days reporting the status of settlement negotiations and/or the need for further action in the case. Respectfully submitted, Peter D. Keisler Assistant Attorney General David M. Cohen Director s/ Harold D. Lester, Jr. Harold D. Lester, Jr. Assistant Director Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Tele: (202) 305-7562 Fax: (202) 307-2503 OF COUNSEL: Jane K. Taylor Office of General Counsel Department of Energy 3 s/ Thomas O Mason Thomas O. Mason Williams, Mullen, Clark & Dobbins 8270 Greensboro Drive, Suite 700 McLean, VA 22102 (703) 760-5200 Harvey J. Messing (P23309) Jeffrey S. Theuer (P44161) LOOMIS, EWERT, PARSLEY, DAVIS & GOTTING, P.C. 232 S. Capitol Avenue, Suite 1000 Lansing, MI 48933 (517) 482-2400 Attorneys for Plaintiff OF COUNSEL: James E. Brunner (P28051) Arunas T. Udrys (P21660) Consumers Energy Company 212 West Michigan Avenue Jackson, MI 49201

Case 1:02-cv-01894-EJD

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1000 Independence Avenue, S.W. Washington, D.C. 20585 Attorneys for Defendant Dated: August 8, 2005

(517) 788-2151 Attorneys for Plaintiff

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Case 1:02-cv-01894-EJD

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CERTIFICATE OF FILING I hereby certify that on this 8th day of August, 2005, a copy of the foregoing "JOINT STATUS REPORT PURSUANT TO ORDER DATED JUNE 9, 2005" 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/ Francis E. Purcell, Jr.

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