Sacramento Municipal Utility District v. United States
130 Fed. Cl. 735
Fed. Cl.2017Background
- SMUD entered a Standard Contract with DOE on June 14, 1983, under the NWPA; DOE was required to begin accepting SMUD’s spent nuclear fuel (SNF) and high-level waste (HLW) by January 31, 1998, but never did.
- Prior litigation established DOE’s failure to begin acceptance by 1998 constituted a partial breach; multiple runs of litigation produced awards for mitigation costs covering successive time periods (1992–2003; 2004–2009).
- SMUD filed the present suit (No. 15-577C) seeking mitigation damages for costs incurred from January 1, 2010 through June 30, 2015 attributable to DOE’s continuing partial breach.
- At trial SMUD sought $29.55 million; the government contested about $7.04 million of that amount, raising issues of causation, allocation between nuclear and non‑nuclear functions, and offsets for insurance refunds.
- The court compared the actual (breach) world to a hypothetical non‑breach world (but‑for DOE performance) and awarded SMUD $28,867,161 for mitigation costs from 2010–June 30, 2015, after allowing a $682,397 offset for insurance refunds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Entitlement/jurisdiction and standing | SMUD is in privity under the Standard Contract and seeks contract damages for DOE’s ongoing breach | Government did not dispute privity or jurisdiction | Court has Tucker Act jurisdiction and SMUD has standing |
| Causation for site/building O&M (T&R and PAP) | Costs to maintain/operate T&R and PAP buildings are caused by presence of SNF and would not exist in non‑breach world | Buildings also serve non‑nuclear uses; SMUD failed to prove what costs would differ in non‑breach world | Court found credible testimony that buildings housed only nuclear staff/security and awarded $3,685,112 |
| Site consolidation, PAP water/septic upgrades, ISFSI generator planning | Consolidation and upgrades were done to reduce operating costs tied to onsite nuclear staff; would not have been done if SNF removed | These improvements support non‑nuclear infrastructure and SMUD didn’t isolate non‑breach costs | Court found consolidation and upgrades attributable to SNF and awarded $698,255 |
| HVAC/carpet for PAP building | Replacing failing HVAC and carpeting necessary for occupied nuclear staff and records vault; would not have been done in non‑breach world | Improvements benefit non‑nuclear uses; SMUD failed to prove non‑breach baseline | Court awarded $481,207 (HVAC + carpet) |
| ISFSI backup generator and electrical upgrades | NRC requires backup power for ISFSI; purchase and installation and related electrical work solely to support SNF storage | Some electrical work touches buildings with non‑nuclear functions; SMUD didn’t separate costs against non‑breach world | Court accepted that generator/switchgear and relevant electrical upgrades were SNF‑driven and awarded $573,214 |
| IOSB operation/repair and handling‑equipment refurbishment | IOSB and contaminated handling equipment must remain onsite while SNF is present; necessary for potential canister retrieval and relicensing | SMUD previously removed some wastes and moved equipment later; government argues prior award circumstances differ | Court found DOE breach was but‑for cause and mitigation was reasonable; awarded $980,500 |
| ANI insurance brokerage fees and premiums / offsets | Brokerage fees to obtain ANI insurance are consequential and recoverable; uncertainty in amount acceptable — imprecision falls on breaching party | Broker testimony lacked contemporaneous personal knowledge; government seeks offset for refunds received during claim period | Court allowed $86,010 for brokerage fees and applied a $682,397 offset for ANI refunds received 2010–2015 |
Key Cases Cited
- Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336 (Fed. Cir. 2000) (Standard Contract required DOE to begin disposal by Jan. 31, 1998; failure is breach)
- Indiana Michigan Power Co. v. United States, 422 F.3d 1369 (Fed. Cir. 2005) (successive damages suits structure and limits on future offsets)
- Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008) (comparison of breach and non‑breach worlds for causation/damages)
- Southern Nuclear Operating Co. v. United States, 637 F.3d 1297 (Fed. Cir. 2011) (plaintiff must present hypothetical model of but‑for costs and government may identify avoided costs)
- Energy Northwest v. United States, 641 F.3d 1300 (Fed. Cir. 2011) (costs incurred in non‑breach world are not recoverable; burden on plaintiff to model non‑breach costs)
- Bluebonnet Sav. Bank, F.S.B. v. United States, 339 F.3d 1341 (Fed. Cir. 2003) (damages should not put injured party in a better position than full performance; reasonable approximation standard)
- LaSalle Talman Bank v. United States, 317 F.3d 1363 (Fed. Cir. 2003) (where damages are hard to estimate, burden of imprecision does not fall on the innocent party)
- Winstar Corp. v. United States, 64 F.3d 1531 (Fed. Cir. 1995) (failure to perform when due is breach)