Free Response - District Court of Federal Claims - federal

Case 1:01-cv-00116-FMA

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS NEBRASKA PUBLIC POWER DISTRICT, Plaintiff, v. UNITED STATES OF AMERICA Defendant. ) ) ) ) ) ) ) ) )

No.01-116C (Judge Allegra)

DEFENDANT'S RESPONSE TO THE COURT'S OCTOBER 5, 2005 ORDER Pursuant to the Court's October 5, 2005 order, defendant, the United States, respectfully submits the following statement of "the issues concerning liability that would be made in the present case were it not for the writ of mandamus" issued by the United States Court of Appeals for the District of Columbia Circuit in Northern States Power Co. v. Department of Energy, 128 F.3d 754 (D.C. Cir. 1997). Article IX.A of the Standard Contract between the Department of Energy ("DOE") and the nuclear utilities for the disposal of spent nuclear fuel ("SNF") and/or high-level radioactive waste expressly states that "neither the Government nor the Purchaser shall be liable" for failure to perform its obligations under the Standard Contract if "such failure arises out of causes beyond the control and without the fault or negligence of the party failing to perform."1 10 C.F.R. § 961.11, Art. IX.A. The D.C. Circuit's holding in Northern States precludes the Government from relying upon the Standard Contract's unavoidable delays clause to avoid liability for DOE's delay in contractual performance. Northern States, 128 F.3d at 760.

Article IX.A further states that events beyond the parties' control can include, among other things, "acts of Government in either its sovereign or contractual capacity." Id.

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Were it not for the D.C. Circuit's writ of mandamus, which the Government contends, with all due respect, exceeded the D.C. Circuit's jurisdiction, the Government would be entitled to argue that the delays which DOE has experienced in performing its obligations under the Standard Contract arise out of causes beyond DOE's control and thus fall squarely within the events contemplated as unavoidable delays by Article IX.A. Beth Tomasoni, the former contracting officer for the Standard Contract, informed utilities by letter dated June 3, 1997, of her preliminary determination that DOE's delay in SNF acceptance was excusable under the unavoidable delays provision because of technical problems, regulatory delays, roadblocks to implementation of a monitored retrievable storage system, funding restrictions, litigation delays, and consultation requirements with, among other entities, state and local governments. Appendix, at 1-29. Christopher Kouts, a director with DOE's Office of Civilian Radioactive Waste Management, offered similar testimony in the recent trials in Sacramento Municipal Utility District v. United States, No. 98-488C (Fed. Cl.) (Braden, J.), and Tennessee Valley Authority v. United States, No. 01-249 (Fed. Cl.) (Lettow, J.).2 Appendix, at 30-39.

In Maine Yankee Atomic Power Co. v United States, 225 F.3d 1336, 1341 (Fed. Cir. 2000), the Federal Circuit examined whether the Government could rely upon Article IX.B of the Standard Contract, the avoidable delays clause, to avoid liability for failing to begin acceptance of SNF in 1998. The Federal Circuit concluded that the avoidable delays clause only applied to delays that occurred after performance began, and thus could not excuse DOE from liability for delay in the commencement of SNF acceptance. Id. The same day, the Federal Circuit issued its decision in Northern States Power Co. v. United States, 224 F.3d 1361 (Fed. Cir. 2000), in which we had advanced precisely the same avoidable delay position as in Maine Yankee. In rejecting the Government's argument, the Federal Circuit expressly referred to its holding in Maine Yankee concerning the avoidable delays clause, but inadvertently used the words "unavoidable delays clause" rather than the avoidable delays clause when referencing the issue that Maine Yankee had decided. Id. at 1367 (emphasis added). Consequently, neither the decision in Maine Yankee nor in Northern States addresses the argument that, pursuant to Article IX.A of the Standard Contract, the Government is excused from liability for delays in meeting its contractual obligations because of events beyond the control of DOE. 2

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Respectfully submitted, PETER D. KEISLER Assistant Attorney General

DAVID M. COHEN Director

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

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

s/ Heide L. Herrmann HEIDE L. HERRMANN 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) 307-6289 Fax: (202) 307-2503 Attorneys for Defendant

October 13, 2005

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APPENDIX

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INDEX TO APPENDIX DOCUMENT PAGE

Letter from Beth A. Tomasoni, Contracting Officer, Department of Energy, to Nebraska Public Power District, dated June 3, 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Letter from Beth A. Tomasoni, Contracting Officer, Department of Energy, to Sacramento Municipal Utility District, dated June 3, 1997, including attachment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Excerpts of testimony of Christopher Kouts at the trial of Sacramento Municipal Utility District v. United States, No. 98-488C (Fed. Cl.), on March 29, 2005 . . . . . . . . . . . . . . 30 Excerpts of testimony of Christopher Kouts at the trial of Tennessee Valley Authority v. United States, No. 01-249C (Fed. Cl.), on July 11, 2005 . . . . . . . . . . . . . . . . . . . . . . 34