Southern California Edison Co. v. United States
655 F.3d 1319
| Fed. Cir. | 2011Background
- NWPA authorized DOE to contract with utilities for SNF and HLW disposal and to collect fees into a Nuclear Waste Fund.
- DOE entered the Standard Contract with Southern California Edison (SCE) for SNF/HLW disposal from SONGS.
- DOE breached by not accepting SNF, with disposal anticipated far in the future; damages theories developed against the breach.
- SCE constructed and staffed ISFSI facilities on-site to store SNF, with overheads allocated to the project.
- Trial court awarded damages including indirect overhead costs; Government appealed on recoverability of those overheads.
- Court of Federal Claims and subsequent appeal addressed whether overhead costs tied to the breach are recoverable and properly allocated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are indirect overhead costs recoverable damages for Government breach? | SCE incurred overheads due to breach; costs were causally linked to breach. | Overhead costs are improper, should exclude unrecoverable normal operating costs. | Overhead costs linked to breach are recoverable. |
| Must overheads be separated from preexisting costs to show breach causation? | Allocation by percentage shows breach-caused portion without undue distortion. | Separate out breach-specific costs; otherwise cannot measure breach impact. | Allocation is permissible; costs tied to breach are causally linked. |
| Does reliance on Precision Pine limit recoverable overheads in this context? | Precision Pine does not control here because ISFSI costs are breach-caused. | Precision Pine precludes recovery of fixed, preexisting operating costs not altered by breach. | Distinction; this case supports recoverability of breach-caused overheads. |
Key Cases Cited
- Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008) (requires causation basis for breach damages)
- Carolina Power & Light Co. v. United States, 573 F.3d 1271 (Fed. Cir. 2009) (allocation method for overhead in breach damages)
- Precision Pine & Timber, Inc. v. United States, 596 F.3d 817 (Fed. Cir. 2010) (distinguishes fixed preexisting costs from breach-caused costs)
- Energy Northwest v. United States, 641 F.3d 1300 (Fed. Cir. 2011) (upholds overhead damages if causation shown; defer to trial findings absent clear error)