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

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No. 02-1894C (Chief Judge Damich) ______________________________________________________________________________ IN THE UNITED STATES COURT OF FEDERAL CLAIMS CONSUMERS ENERGY COMPANY, Plaintiff, v. THE UNITED STATES OF AMERICA, Defendant. ______________________________________________________________________________ DEFENDANT'S REPLY TO PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANT'S MOTION FOR JOINDER OF ENTERGY NUCLEAR PALISADES, LLC, OR, IN THE ALTERNATIVE, FOR ISSUANCE OF BINDING NOTICE PURSUANT TO RCFC 14(b) AND CONTRACT SETTLEMENT ACT, § 14(b), 41 U.S.C. § 114(b) ______________________________________________________________________________ GREGORY G. KATSAS Assistant Attorney General JEANNE E. DAVIDSON Director HAROLD D. LESTER, JR. Assistant Director SCOTT R. DAMELIN Commercial Litigation Branch U.S. Department of Justice Attn: Classification Unit, 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tele: (202) 305-2312 Fax: (202) 307-2503 Attorneys for Defendant

OF COUNSEL: JANE K. TAYLOR Office of General Counsel U.S. Department of Energy 1000 Independence Ave., S.W. Washington, D.C. 20585 MARIAN E. SULLIVAN Senior Trial Counsel JOSEPH E. ASHMAN STEPHEN FINN SHARON SNYDER Civil Division Department of Justice 1100 L Street, N.W. Washington, D.C. 20530 August 29, 2008

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TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii INDEX TO APPENDIX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv SUMMARY OF ARGUMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 I. CONSUMERS DID NOT DEFEAT THE GOVERNMENT'S ARGUMENT THAT ENP CLAIMS AN INTEREST IN THE PRESENT CASE AND THAT THE FAILURE TO JOIN ENP WOULD CAUSE SUBSTANTIAL RISK TO THE GOVERNMENT OF DUPLICATIVE DAMAGES OR INCONSISTENT OBLIGATIONS OR THAT, IN THE ALTERNATIVE, BINDING NOTICE IS APPROPRIATE IN THIS CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A. Pursuant To RCFC 19, ENP Claims An Interest Related To the Subject Matter Of This Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ENP's Interests Related To The Subject Matter Of This Case Meet The Requirement For Binding Notice. . . . . . . . . . . . . . . . . . . . 8 The Asset Sale Agreement Does Not Protect The Government From Duplicative Or Inconsistent Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . 9

B.

C.

II.

THE ACTIVITIES IN RELATED SNF CASES SUPPORTS THE GOVERNMENTS ARGUMENT FOR JOINDER IN THIS CASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 JOINDER OR BINDING NOTICE WOULD NOT CAUSE CONSUMERS TO BE "SEVERELY PREJUDICED".. . . . . . . . . . . . . . . . . . . . 12

III.

CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

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TABLE OF AUTHORITIES CASES PAGE(S)

Angst v. Royal Maccabees Life Ins. Co., 77 F.3d 701 (3d Cir. 1996)............................................................................................... 11 Boston Edison Co. v. United States, 67 Fed. Cl. 63 (2005). ............................................................................................... passim Consumers Energy Co. v. United States, 65 Fed. Cl. 364 (2005). ...................................................................................................... 4 Entergy Nuclear Indian Point 2, LLC v. United States, 64 Fed. Cl. 798 (2005). .................................................................................................... 11 Lowry Economic Redevolopment Authority v. United States, 71 Fed. Cl. 549 (2006). .................................................................................................... 12 Marrero Enterprises of Palm Beach Inc. v. Estefan Enterprises, Inc., 2007 WL 4218990 (S.D. Fla. 2007)................................................................................. 12 Martin v. Wilks, 490 U.S. 755 (1989)......................................................................................................... 10 Pacific Gas & Electric Co. v. United States, 2008 WL 3089272 (Fed. Cir. August 7, 2008). ............................................................... 10 Rochester Gas and Elec. Corp. v. United States, 65 Fed. Cl. 431 (2005). .................................................................................................. 4, 6 Sacramento Municipal Utility District v. United States, 2008 WL 3539880 (Fed. Cir. August 7, 2008). ............................................................... 11 Thunder Basin Coal Co. v. Southwestern Public Service Co., 104 F.3d 1205 (10th Cir. 1997). ........................................................................................ 9 United Keetoowah Band of Cherokee Indians of Okla. v. United States, 480 F.3d 1318 (Fed. Cir. 2007)...................................................................................... 3, 6 Vermont Yankee Nuclear Power Corp. v. United States, 73 Fed. Cl. 236 (2006). ...................................................................................................... 4 Yankee Atomic Elec. Co. v. United States, 2008 WL 3089032 (Fed. Cir. Aug. 7, 2008)...................................................................... 3 -ii-

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TABLE OF AUTHORITIES (Cont'd) STATUTES/RULES PAGE(S)

41 U.S.C. § 114(b). ............................................................................................................... passim 10 C.F.R. § 961.11. .................................................................................................................... 3, 5 48 Fed. Reg. 5457. ......................................................................................................................... 5 Fed. R. Civ. P. 14............................................................................................................................ 9 Fed R. Civ. P. 19............................................................................................................................. 9 R. Ct. Fed. Cl. 14. ................................................................................................................. passim R. Ct. Fed. Cl. 19. ................................................................................................................. passim R. Ct. Fed. Cl. 20. ........................................................................................................................... 6 R. Ct. Fed. Cl. 25. ........................................................................................................................... 6 MISCELLANEOUS 22 A.L.R. Fed. 765 (1975). ............................................................................................................. 3

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

No. 02-1894C (Chief Judge Damich)

DEFENDANT'S REPLY TO PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANT'S MOTION FOR JOINDER OF ENTERGY NUCLEAR PALISADES, LLC, OR, IN THE ALTERNATIVE, FOR ISSUANCE OF BINDING NOTICE PURSUANT TO RCFC 14(b) AND CONTRACT SETTLEMENT ACT, § 14(b), 41 U.S.C. § 114(b) Defendant, the United States, respectfully submits this reply to the response submitted by plaintiff, Consumers Energy Company ("Consumers"), dated July 31, 2008, to the Government's motion to join Entergy Nuclear Palisades, LLC ("ENP"), as a party in this case or, in the alternative, to issue ENP binding notice pursuant to RCFC 14(b) and Contract Settlement Act § 14(b), 41 U.S.C. § 114(b). SUMMARY OF ARGUMENT In its response to the Government's motion for joinder or, in the alternative, binding notice pursuant to RCFC 14(b) and 41 U.S.C. § 114(b), Consumers did not overcome the Government's showing that ENP has an interest related to the subject matter of this case. ENP is the present holder of the Standard Contract at issue in this litigation, which has been partially assigned to ENP by Consumers. The Asset Sale Agreement distributed the rights and duties of the Standard Contract and this litigation between Consumers and ENP, including payment of the one-time fee and a $30 million payment to ENP for "post-Closing damages" that ENP claims as present damages in this litigation. Therefore, ENP has an interest in the subject matter of this

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litigation sufficient to meet the requirements of RCFC 19(a)(2) for joinder and RCFC 14(b) and 41 U.S.C. § 114(b) for issuance of binding notice. Consumers also failed to defeat the Government's argument that failure to join ENP would leave the Government at substantial risk of duplicative or inconsistent obligations. Although, Consumers argues that the Asset Sales Agreement protects the Government, it does not explain or demonstrate how the Government is protected and how ENP would be bound in future litigation if ENP is not joined to this case. Finally, Consumers' reliance on decisions regarding consolidation in other SNF cases fails because, in those cases, either the Court has since granted joinder, the cases were consolidated because of the same or similar concerns that the Government set forth in its motion for joinder here, and joinder is mandatory while consolidation is only discretionary. DISCUSSION I. CONSUMERS DID NOT DEFEAT THE GOVERNMENT'S ARGUMENT THAT ENP CLAIMS AN INTEREST IN THE PRESENT CASE AND THAT THE FAILURE TO JOIN ENP WOULD CAUSE SUBSTANTIAL RISK TO THE GOVERNMENT OF DUPLICATIVE DAMAGES OR INCONSISTENT OBLIGATIONS OR THAT, IN THE ALTERNATIVE, BINDING NOTICE IS APPROPRIATE IN THIS CASE A. Pursuant To RCFC 19, ENP Claims An Interest Related To the Subject Matter Of This Case

Throughout its response brief, Consumers argues that ENP does not claim an interest relating to the subject matter of this action. However, Article 6.14 of the Asset Sale Agreement, "Standard Spent Fuel Disposal Contract; Spent Nuclear Fuel Litigation" (emphasis added), and Consumers' claim evidence ENP's interest in the present litigation sufficient to meet the

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requirement of RCFC 19(a)(2). A. 6-7, 93-95.1 The requirement under RCFC 19 that a party must "claim an interest" is not limited, as Consumers argues, to affirmative pronouncements before this Court: The courts generally construe "claims an interest" as though it read "has an interest," without discussion of the difference, if any. Since an absentee obviously cannot make "claims" in the action itself, the word no doubt refers to the claims he might make on the basis of the actual interests he has, within the knowledge of the parties before the court, which suggests to them or to the court the possibility of prejudice to him or them. It thus appears that the absentee must be one who "has an interest," before he can be considered one who "claims and interest," which would require a determination as to the necessity of his joinder within the Rule. J. Rydstrom, Annotation, Who must be joined in action as person "needed for just adjudication" under Rule 19(a), Federal Rules of Civil Procedure, 22 A.L.R. Fed. 765, 794 (1975); see also United Keetoowah Band of Cherokee Indians of Okla. v. United States, 480 F.3d 1318, 1326 (Fed. Cir. 2007) ("Thus, the proper analysis to determine whether an absent party has an `interest' under Rule 19(a)(2) . . . must begin by correctly characterizing the pending action[.]") (emphasis added). ENP has three interests in the present litigation. First, ENP has an interest in the determinations of this Court related to assignment of the Standard Contract and the obligation under the Standard Contract to pay the one-time fee.2 10 C.F.R. § 961.11, Art. VIII.A.2; A. 93
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"A. " is a reference to the appendix attached to the Government's motion for joinder or, in the alternative, for issuance of binding notice dated June 25, 2008. The Government is aware that the United States Court of Appeals for the Federal Circuit recently addressed the related issue as to whether a utility must pay the one-time fee in light of the Government's delay in the acceptance of SNF. Yankee Atomic Elec. Co. v. United States, 2008 WL 3089032 (Fed. Cir. Aug. 7, 2008). Notwithstanding the fact that the Yankee Atomic decision is not final and is subject to resolution of any petitions for rehearing or other requests for 3
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(Asset Sale Agreement Art. 6.13). Second, ENP has an interest in Consumers' claim for the $30 million Big Rock ISFSI payment, described in the Asset Sale Agreement as "post-Closing damages." A. 94 (Asset Sale Agreement, Art. 6.14(d) (emphasis added)). Third, ENP has an interest in the Court's interpretation of the sole Standard Contract at issue in this case because, assuming the validity of the assignment, it is now in privity with the Government as the present holder of the same contract. The validity of the assignment of the Standard Contract from Consumers to ENP and the effect of that assignment on the obligation to pay the one-time fee are interests of ENP because ENP will "gain or lose" by the direct legal effect of the Court's determination on those issues. Unlike the assignments in Rochester Gas and Elec. Corp. v. United States, 65 Fed. Cl. 431 (2005), and Vermont Yankee Nuclear Power Corp. v. United States, 73 Fed. Cl. 236 (2006), DOE affirmatively objected to the assignment of the Standard Contract from Consumers to ENP. A. 103-04. DOE specifically objected that the assignment "must be an assignment of all outstanding rights and duties under the contract" and that the obligation to pay the one-time fee must be transferred. Id. (emphasis in the original). DOE's interpretation of the intent of the assignments provision of the Standard Contract is supported by documents produced by Consumers in this litigation from the time of contract formation. In internal correspondence dated February 23, 1983, related to the proposed Standard Contract, a Consumers employee

further review, the Federal Circuit did not address the one-time fee issue under the circumstances presented in this case where the one-time fee was retained by the seller when it assigned the Standard Contract, an assignment to which the Department of Energy objected. A. 105-04. Further, the Government is currently evaluating the effect of the decision in Yankee Atomic on this Court's April 29, 2005 opinion, Consumers Energy Co. v. United States, 65 Fed. Cl. 364, 373 (2005). 4

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noted that "Article XV appears to permit assignment of contract rights and duties only when title to all of the SNF and HLW covered by the agreement is transferred with notice to DOE. I suspect that it was intended to permit (require?) all of the Purchaser's rights and duties under the contract respecting any or all of the SNF and/or HLW covered by the contract to be transferred with title to the particular SNF and/or HLW in question."3 Supp. A. 18 4 (Internal Consumers Power Company corresponded from JLBacon to ERVanHoof dated February 23, 1983). Consumers also argues that, because its claim is temporally distinct from ENP's, the partial assignment and one-time fee are irrelevant. Pl. Resp. 8, 10-12. To the contrary, because of Consumers' partial assignment of the Standard Contract to ENP (and assuming its validity), the Government presently would be subject to suits by both Consumers and ENP. ENP's right to future performance by DOE is conditioned by Consumers' retention of the presently unfulfilled obligation to pay the one-time fee. Consumers' argument regarding a clean temporal break

The assignments provisions of the proposed Standard Contract and final Standard Contract are substantially the same. Article XV, Assignments, of the proposed Standard Contract reads: The rights and duties of a party to this contract may be assignable with transfer of title to the SNF and/or HLW involved; provided, however, that notice of any such transfer shall be made to DOE within ninety (90) days of transfer. Supp. A. 9 (Standard Contract for Disposal of Spent Nuclear Fuel and/or High Level Radioactive Waste, 48 Fed. Reg. 5457, 5465 (Feb. 4, 1983) (emphasis in the original)). The only modification in the final Standard Contract was the substitution of "the Purchaser" for "a party to this contract." 10 C.F.R. § 961.11, Art. XIV.
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"Supp. A.

" is a reference to the attached supplemental appendix. 5

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related to damages is at odds with how the Asset Sale Agreement interweaves the rights and obligations of the Standard Contract between Consumers and ENP. Consumers' reliance on Rochester Gas and Elec. Corp. to support its argument that the partial assignment is irrelevant is severely undermined by the fact that the Court joined the assignee, Ginna, LLC, and assignor, Rochester Gas and Electric, under RCFC 20(a) and 25(a).5 Rochester Gas and Elec. Corp., 65 Fed. Cl. at 442-43. Because the validity of the partial assignment of the Standard Contract and the obligation to pay the one-time fee are within the subject matter of this action, ENP has an interest because it will "gain or lose by the direct legal operation and effect" of this Court's decision on the validity of the assignment and its effect on damages claimed in this case. United Keetoowah Band, 480 F.3d at 1324. The $30 million payment is another interest of ENP's related to the subject matter of this action. Contrary to plaintiff's assertions that the $30 million payment is a claim for past damages and that its claim is, therefore, temporally distinct from ENP's, Pl. Resp. 9, 13, the Asset Sale Agreement states that the $30 million payment is for "post-Closing damages." A. 94 (Asset Sale Agreement, Art. 6.14(d) (emphasis added)). Therefore, Consumers' assertion is directly contradicted by the terms of the Asset Sale Agreement. Further, Mr. Stephen Wawro, Consumers' leader of the sale team for Palisades and Big Rock Point, admitted that the costs underlying the $30 million dollar payment were "for future costs that Entergy would be incurring . . . on a daily basis after closing." Supp. A. 25 (Deposition of Mr. Stephen Wawro at 104:5-

In addition, the Court has partially consolidated Vermont Yankee Nuclear Power Corp. and Entergy Nuclear Vermont Yankee. Supp. A. 55-56 (Vermont Yankee Nuclear Power Corp. v. United States, No. 02-898C (Fed. Cl.) and Entergy Nuclear Vermont Yankee, LLC, et at., v. United States, No. 03-2663 (Fed. Cl.) Consolidation Order dated 16, 2006). 6

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105:17). Mr. John Reed, the financial advisor and auction manger for the Palisades and Big Rock Point sale, testified that the $30 million payment was for "the costs the new owner of Big Rock Point would get­would incur to maintain and operate the ISFSI." He also testified that the calculation of the $30 million amount for purposes of ENP's damages was not resolved by the Asset Sale Agreement: Q. And how is that amount in excess of the Big Rock amount to be determined? I think that's a question of how one calculates damages going down the road, whether you use a present value determination or whether you use a nominal dollar determination. And we didn't want to constrain Entergy and their approach to quantifying and pressing for damages ­ so we left that issue just as drafted.

A.

Supp. A. 35-36 (Deposition of Mr. John Reed at 78:12-19; 175:22-8). Therefore, not only does the Asset Sale Agreement and testimony of Consumers' witnesses demonstrate that ENP has an interest in the subject matter of this action, Mr. Reed admitted that the point at which the $30 million payment ends and ENP's claim begins was left intentionally undefined at the time of sale. As a result, ENP stands to gain by legal operation of a judgment in this case that may award Consumers $30 million in "post-Closing damages," yet does not define when ENP's right to damages begins, creating a substantial risk of duplicative or inconsistent obligations for the Government. Finally, ENP also has an interest in this Court's interpretation and determinations related to the Standard Contract for Palisades and Big Rock Point and the partial assignment in the Asset Sale Agreement. ENP is presently in privity with the Government on the Palisades and Big Rock

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Point Standard Contract at issue in this case. Because future damages claims by ENP will share some mixed questions of law and fact in common with Consumers' present claim, ENP has an interest in the subject matter of this case. Boston Edison Co. v. United States, 67 Fed. Cl. 63, 66 (2005) (cases likely for consolidation because they share mixed questions of law and fact). Further, Consumers' unsupported representation that ENP opposes the Government's motion (Pl. Resp. 7) and argument that ENP's failure to intervene (id.) demonstrates that ENP does not claim an interest related to this litigation are irrelevant to the determination of whether ENP has an interest in this case. ENP's absence from this litigation and the fact that it has not yet filed a claim before the Court demonstrate not ENP's lack of interest but, rather, that ENP is electing to protect its own interest by staying absent from this litigation so that it will not be bound by this Court's decision in the present matter, an election that puts the Government at substantial risk of duplicative or inconsistent obligations. B. ENP's Interests Related To The Subject Matter Of This Case Meet The Requirement For Binding Notice

Consumers repeats its argument that ENP lacks an interest in the subject matter of this action in its argument against binding notice under RCFC 14(b) and 41 U.S.C. § 114(b). However, the interest requirements under RCFC 14 and 41 U.S.C. § 114(b) are comparatively less stringent than RCFC 19(a). RCFC merely requires that a party "appear" to have an interest, and 41 U.S.C. § 114(b) requires that a third party have a "possible interest" in "any suit or proceeding." For the reasons set forth above, the Government has established not only that ENP "claims" an interest under RCFC 19(a)(2), but that ENP also "appears" to have, or "possibly" has, an interest related to the subject matter of this case. Further, the Government's pursuit of its

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right to have binding notice issued to ENP does not circumvent joinder, but, rather, supports the Government's argument that ENP is a necessary party. See Thunder Basin Coal Co. v. Southwestern Public Service Co., 104 F.3d 1205, 1212 (10th Cir. 1997) (party that foregoes its right to implead third party under Fed. R. Civ. P. 14 belies its claim of indispensability under Fed. R. Civ. P. 19(a)). C. The Asset Sale Agreement Does Not Protect The Government From Duplicative Or Inconsistent Obligations

Consumers argues that the Government is not in danger of duplicative or inconsistent obligations, RCFC 19(a)(2)(ii), because the $30 million payment is for past damages and the Asset Sale Agreement protects the Government. Pl. Resp. 12-14. Consumers also asserts, without any support, that the Government may be a third party beneficiary of the Asset Sale Agreement. Pl. Resp. 13 n.3. Consumers further argues against the Government's concerns that the Standard Contract and assignment be construed consistently, citing to Boston Edison Co. v. United States, 67 Fed. Cl. 63, 66 (2005). As discussed above, Consumers' temporal distinction related to the $30 million payment fails because the Asset Sale Agreement specifically states that the $30 million payment is for "post-Closing damages." Therefore, Consumers' claim includes costs for SNF storage that, by definition, have been, and will be, incurred after the sale of Palisades and Big Rock Point in April 2007. Regarding the argument that the Government is protected by the Asset Sale Agreement, the Government is not a party to the Asset Sale Agreement. Further, regarding the Asset Sale Agreement as a defense in any future actions brought by ENP, the Government's assertion of a

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defense under the Asset Sale Agreement in any future claim brought by ENP would be futile because the decision on damages in the present case would be final and not binding on ENP. Martin v. Wilks, 490 U.S. 755, 762 (1989) ("A judgment . . . to a lawsuit . . . does not conclude rights of strangers to the proceedings"). Indeed, counsel for Entergy Nuclear Indian Point, LLC, recently argued on a similar motion in Consolidated Edison Co. of New York, Inc. v. United States, No. 04-0033C (Fed. Cl.) that "[t]here's another problem . . . and that is absent full joinder, I would respectfully submit that we would not be bound by any appeal that's taken in the ConEd case." Supp. A. 48 (Hearing transcript in Consolidated Edison Co. of New York v. United States dated August 22, 2008 at 36:5-8). Entergy's assertions of not being bound by a final judgment in a case to which it has not been joined underscores the hollowness of Consumers' argument on this point. Finally, Consumers' argument against the need for consistent interpretation of the Standard Contract and its citation to Boston Edison Co. (Pl. Resp. 13-14) ignores the Court's determination in that case to consolidate two SNF cases because it "offers the best prospect of avoiding inconsistent judgments." Boston Edison Co., 67 Fed. Cl. at 67. II. THE ACTIVITIES IN RELATED SNF CASES SUPPORT THE GOVERNMENTS ARGUMENT FOR JOINDER IN THIS CASE Consumers argues that this Court's decisions on the Government's previous motions to coordinate the SNF litigation or consolidate certain SNF cases supports its opposition to the Government's motion for joinder or binding notice in this case.6 Pl. Resp. 15-17. However, the On August 21, 2008, pursuant to RCFC 40.2, the Government filed a copy in this case of its motion in Florida Power and Light Co. v. United States, No. 98-483C (Fed. Cl.), for coordinated discovery and development of a litigation plan in light of the United States Court of Appeals for the Federal Circuit's decisions Yankee Atomic Elec. Co., Pacific Gas & Electric Co. 10
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present motion is quite different from the Government's prior motions because, in this case, the Government requests joinder of ENP because of the substantial risk of duplicative or inconsistent obligations if ENP is not bound by the Court's decision in this case. Joinder is distinct from the Government's past requests for coordination and consolidation in that joinder is mandatory if the requirements of RCFC 19 are met, as the Government has demonstrated they are in this case. See Angst v. Royal Maccabees Life Ins. Co., 77 F.3d 701, 706 (3d Cir. 1996). Additionally, the individual SNF cases upon which Consumers relies do not support its argument. Consumers primarily relies upon this Court's decision in Entergy Nuclear Indian Point 2, LLC v. United States, 62 Fed. Cl. 798 (2004), regarding consolidation. However, on August 22, 2008, this Court joined Entergy Nuclear Indian Point 2, LLC with Consolidated Edison Co. of New York, Inc. v. United States, No. 04-0033C (Fed. Cl.). In granting the Government's motion, the Court stated: I do conclude based upon a plain reading of Rule 19 that there is a substantial risk to the Defendant from these claims and possibly being found liable for double or multiple amounts of damages, that would not be proper . . . What makes the current status different from what we've had before in this case is that motions to consolidate, of course are discretionary to the Court, and I believe Rule 19 is mandatory. And having found that there is a substantial risk, I think I have no choice but to join the matters for further proceedings.

v. United States, 2008 WL 3089272 (Fed. Cir. Aug. 7, 2008), and Sacramento Municipal Utility District v. United States, 2008 WL 3539880 (Fed. Cir. Aug. 7, 2008). This most recent motion is consistent with the Government's past good faith efforts for efficient and effective resolution of the SNF cases pending before this Court. Further, it should not affect our motion for joinder here given that it relates only to the coordination of discovery and because, since ENP does not presently have a case pending before the Court, the coordinated discovery motion would not affect ENP. 11

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Supp. A. 52 (Hearing transcript in Consolidated Edison Co. of New York v. United States, dated August 22, 2008, at 50:18-51:15). The distinction that joinder is mandatory made by the Court in Consolidated Edison also undermines Consumers' reliance on the Court's order regarding transfer in Constellation Generation Group, LLC, et al. v. United States, No. 04-0068C (Fed. Cl.), and decision regarding consolidation in Boston Edison, 67 Fed. Cl. at 63. III. JOINDER OR BINDING NOTICE WOULD NOT CAUSE CONSUMERS TO BE "SEVERELY PREJUDICED" Consumers failed to provide any substantive justification for its broad claim that it would be "severely prejudiced" by joinder of ENP or issuance of binding notice. Pl. Resp. 14. As an initial matter, there is no "prejudice to the plaintiff" element in evaluating requests under RCFC 19, RCFC 14, or Section 14(b) of the Contract Settlement Act, 41 U.S.C. § 114(b). To the contrary, where only one of the criteria in RCFC 19(a) exists, joinder is mandatory. Additionally, there is no requirement under RCFC 19 that ENP bring its claims if joined. Pl. Resp. 14. "RCFC 19 `does not mandate that all claims relating to an action be resolved in one proceeding.'" Lowry Economic Redevolopment Authority v. United States, 71 Fed. Cl. 549, 550 (2006) (citations omitted). Further, RCFC 19 does not contain a time limitation. Regardless of when a motion for joinder is filed, the Court is obligated under RCFC 19 to consider whether the party to be joined is a necessary party. Marrero Enterprises of Palm Beach Inc. v. Estefan Enterprises, Inc., 2007 WL 4218990 (S.D. Fla. Nov. 29 2007). Finally, Entergy is not a complete newcomer to this case. The Government has deposed six witnesses who are current Entergy employees, and who were represented by Entergy's counsel at the depositions,7 and the

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A seventh Entergy employee is currently scheduled to by deposed on September 9, 2008. 12

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Government has subpoenaed from Entergy documents related to the Asset Sale Agreement and sale of Palisades and Big Rock Point. Accordingly, Consumers' claim of prejudice is irrelevant and unsupported. CONCLUSION For the reasons outlined above and in our motion, the Government respectfully requests that the Court join ENP to this case or, in the alternative, issue ENP binding notice.

Respectfully submitted, GREGORY G. KATSAS Assistant Attorney General JEANNE E. DAVIDSON Director

OF COUNSEL JANE K. TAYLOR Office of General Counsel U.S. Department of Energy 1000 Independence Ave., S.W. Washington, D.C. 20585 MARIAN E. SULLIVAN Senior Trial Counsel JOSEPH E. ASHMAN STEPHEN FINN SHARON SNYDER Civil Division Department of Justice 1100 L Street, N.W. Washington, D.C. 20530

s/Harold D. Lester, Jr. HAROLD D. LESTER, JR. Assistant Director

s/Scott R. Damelin by Stephen Finn SCOTT R. DAMELIN Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20530 Tel: (202) 305-2312 Fax: (202) 307-2503 Attorneys for Defendant

August 29, 2008

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CERTIFICATE OF FILING I hereby certify that on the 29th of August, 2008, a copy of the foregoing "DEFENDANT'S REPLY TO PLAINTIFF'S RESPONSE IN OPPOSITION TO DEFENDANT'S MOTION FOR JOINDER OF ENTERGY NUCLEAR PALISADES, LLC, OR, IN THE ALTERNATIVE, FOR ISSUANCE OF BINDING NOTICE PURSUANT TO RCFC 14(b) AND CONTRACT SETTLEMENT ACT, § 14(b), 41 U.S.C. § 114(b)" 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/Stephen Finn