Dairyland Power Cooperative v. United States
106 Fed. Cl. 102
| Fed. Cl. | 2012Background
- Defendant moves to reconsider the court's reinstatement of the full mitigation-damages award related to Dairyland's PFS investment.
- This follows a Federal Circuit remand directing a more detailed causation inquiry into whether any portion of Dairyland's PFS costs were speculative.
- The court previously affirmed roughly $11.999 million in PFS mitigation costs incurred through 2005, finding them caused by the Government's breach and reasonably mitigatory.
- Dairyland invested about $12 million in PFS to obtain off-site dry storage, viewing it as a mitigation measure given site constraints and costs of alternatives.
- The Government argued the PFS investment was oversized and possibly speculative, potentially requiring offsetting disgorgement or valuation for profit.
- On remand, the court concluded the PFS costs through 2005 were necessary mitigatory expenditures and did not find any speculative component.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the remand required a detailed causation inquiry was properly conducted | Dairyland argues causation supported full mitigation costs. | Government contends some costs are speculative and should be offset. | No error; detailed causation upheld full damages. |
| Whether burden of proof shifted to Government on offset for speculation | Dairyland asserts proper burden allocation per remand. | Government claims burden shifted improperly, reducing evidence weight. | No improper burden-shift; court followed sequence directed by the Federal Circuit. |
| Whether residual value or unjust enrichment issues were required on remand | Dairyland argues residual value analysis was distinct and not required by remand. | Government argues residual value should have reduced damages. | Not required on remand; residual-value issues reserved for separate consideration. |
Key Cases Cited
- Dairyland Power Cooperative v. United States, 104 Fed.Cl. 400 (2012) (remand decision reinstating damages; context for causation and mitigation)
- Dairyland Power Cooperative v. United States, 645 F.3d 1363 (Fed.Cir.2011) (remand directing detailed causation inquiry)
- Pac. Gas & Elec. Co. v. United States, 668 F.3d 1346 (Fed.Cir.2012) (mitigation damages affirmed without offset for potential profitability)
- Dairyland Power Cooperative v. United States, 90 Fed.Cl. 615 (2009) (prior consideration of burden and proof in mitigation context)