Dairyland Power Cooperative v. United States
128 Fed. Cl. 499
| Fed. Cl. | 2016Background
- Dairyland seeks damages for breach-related interim storage costs of spent nuclear fuel (SNF) under a U.S. claims contract.
- Two motions in limine are before the court: (a) System Fuels implementation and (b) causation-based challenges to mitigation costs.
- System Fuels (Fed. Cir. 2016) analyzed damages when storage costs, not transportation, were determined by breach.
- Courts previously reduced damages for loading and storage costs by reference to nonbreach-world costs and potential reloading.
- Court harmonizes System Fuels with Carolina Power, Energy Northwest, and Vermont Yankee to determine recoverable costs.
- The government concedes $1,881,218 for preparation and packaging of SNF; other items are contestable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Impact of System Fuels on recoverable costs | Dairyland argues System Fuels immunizes all loading costs. | Government contends only labor loading costs are immune; other costs may be offset or deferred. | System Fuels limits recoverable costs; some items contested. |
| Whether costs must be broken into tasks for causation | Dairyland seeks task-based recovery aligned with nonbreach world tasks. | Government argues costs should be analyzed as breach vs nonbreach world costs, not by tasks. | Costs analyzed as breach vs nonbreach costs; not simply task-based. |
| Causation standard for mitigation costs | Dairyland claims mitigation costs are caused by breach and should be recoverable. | Government may challenge any mitigation costs not caused by breach and those that are unreasonable. | Plaintiff must prove costs differ from nonbreach world; defendant may challenge causation and reasonableness. |
| Concession and scope of nonbreach world costs | Dairyland seeks determination of nonbreach world costs relevant to damages. | Requests for broad nonbreach-world cost determinations are not ripe or advisory. | Nonbreach-world costs limited to relevant damages; broader determinations denied as ripe for review. |
Key Cases Cited
- System Fuels, Inc. v. United States, 818 F.3d 1302 (Fed. Cir. 2016) (reaffirms that storage costs incurred due to breach are recoverable; loading costs depend on nonbreach-world cask use)
- Carolina Power & Light Co. v. United States, 573 F.3d 1271 (Fed. Cir. 2009) (loading costs are deferred, not avoided; must be borne when DOE picks up SNF)
- Energy Northwest v. United States, 641 F.3d 1300 (Fed. Cir. 2011) (causation vs offset; need a model of breach vs nonbreach costs for recoverable damages)
- Vermont Yankee Nuclear Power Corp. v. United States, 683 F.3d 1330 (Fed. Cir. 2012) (mitigation costs require demonstrating costs would be incurred in nonbreach world; uncertainty limits recovery)