United States Court of Appeals
for the Federal Circuit
__________________________
YANKEE ATOMIC ELECTRIC COMPANY,
Plaintiff-Cross Appellant,
v.
UNITED STATES,
Defendant-Appellant.
---------------------------------------------------------------------------------
MAINE YANKEE ATOMIC POWER COMPANY,
Plaintiff-Cross Appellant,
v.
UNITED STATES,
Defendant-Appellant.
---------------------------------------------------------------------------------
CONNECTICUT YANKEE ATOMIC POWER
COMPANY,
Plaintiff-Cross Appellant,
v.
UNITED STATES,
Defendant-Appellant.
__________________________
2011-5020, -5021, -5022, -5027, -5028, -5029
__________________________
YANKEE ATOMIC ELECTRIC CO v. US 2
Appeals from the United States Court of Federal
Claims in Case No. 98-CV-126, 98-CV-474, 98-CV-154,
Senior Judge James F. Merow.
_________________________
Decided: May 18, 2012
_________________________
CATHERINE E. STETSON, Hogan Lovells US LLP, of
Washington, DC, argued for plaintiffs-cross appellants.
With her on the brief was DOMINIC F. PERELLA. Of coun-
sel on the brief was JERRY STOUCK, Greenberg Traurig,
LLP, of Washington, DC.
HAROLD D. LESTER, JR., Assistant Director, Commer-
cial Litigation Branch, Civil Division, United States
Department of Justice, of Washington, DC, argued for
defendant-appellant. With him on the brief were TONY
WEST, Assistant Attorney General, JEANNE E. DAVIDSON,
Director, MARIAN E. SULLIVAN, Senior Trial Counsel,
ANDREW P. AVERBACH, Senior Trial Counsel, ANTHONY W.
MOSES, SETH W. GREENE and SCOTT D. SLATER, Trial
Attorneys. Of counsel on the brief was JANE K. TAYLOR,
Office of General Counsel, United States Department of
Energy, of Washington, DC.
__________________________
Before RADER, Chief Judge, LOURIE and MOORE, Circuit
Judges.
RADER, Chief Judge.
This consolidated appeal is the latest manifestation of
the numerous contract disputes arising from the Govern-
ment’s failure to accept and dispose of radioactive waste
from the nation’s nuclear utilities. Specifically, the ap-
peal flows from this court’s decision in Yankee Atomic
3 YANKEE ATOMIC ELECTRIC CO v. US
Electric Co. v. United States, 536 F.3d 1268 (Fed. Cir.
2008), which reversed the United States Court of Federal
Claims’ initial damages determination, and remanded for
a calculation of damages according to the rate at which
the Government was contractually obligated to accept the
utilities’ waste.
Yankee Atomic Electric Company (Yankee Atomic),
Maine Yankee Atomic Power Company (Maine Yankee),
and Connecticut Yankee Atomic Power Company (Con-
necticut Yankee) (collectively, the Yankees) originally
brought this action seeking damages to compensate for
the cost of storing spent nuclear fuel (SNF) and high-level
radioactive waste (HLW) beyond the time that the Gov-
ernment promised by contract to begin storing that waste
in a permanent and secure repository. On remand, the
trial court correctly calculated damages for dry storage
construction costs, deferred costs of loading waste to the
Department of Energy (DOE), and reracking costs. How-
ever, the trial court erred in denying Yankee Atomic’s
claim for a portion of its wet pool storage costs and Nu-
clear Regulatory Commission (NRC) fees. Unlike Con-
solidated Edison Co. of N.Y. v. United States, __ F.3d __,
2012 WL 1284402 (Fed. Cir. Apr. 16, 2012), this case does
not include a claim for NRC fees that allegedly increased
due to DOE’s breach. Rather, the plaintiff here claims
that no NRC fees would have been incurred by the inac-
tive plant if the SNF had been removed in a timely man-
ner pursuant to the Standard Contract. See Yankee
Atomic Power Co. v. United States, 94 Fed. Cl. 678, 725
(2010).
Therefore, this court affirms-in-part and reverses-in-
part the trial court’s damages award as recited below.
YANKEE ATOMIC ELECTRIC CO v. US 4
I.
This court has often addressed the Standard Contract
between the Government and nuclear utilities, and the
Government’s liability for a partial breach. See Me.
Yankee Atomic Power Co. v. United States, 225 F.3d 1336,
1337-40 (Fed. Cir. 2000); Yankee Atomic Elec. Co. v.
United States, 73 Fed. Cl. 249, 250-259 (2006) (Yankee I).
However, the history of this case is necessary on this
appeal from an earlier remand decision.
Starting in August 2004, the trial court held a seven-
week trial on damages. Yankee I, 73 Fed. Cl. at 251.
Yankee Atomic received as damages $32,863,366 to
compensate for the cost of building dry storage (i.e., an
independent spent fuel storage installation (ISFSI));
Connecticut Yankee received $8,350,893 for reracking its
wet pool to increase storage capacity and $25,803,986 for
ISFSI construction; and Maine Yankee received
$10,069,018 for reracking costs and $65,705,536 for ISFSI
construction expenses. Id. at 326. During the Yankee I
trial, the Government argued that Greater Than Class C
radioactive waste (GTCC) was not covered by the Stan-
dard Contract. According to the Government, the Yan-
kees would have been required to build dry storage for
GTCC in the non-breach world, thus incurring ISFSI costs
(in whole or in part). Id. at 312-15. The trial court re-
jected this argument. Id.
On appeal, this court accepted the trial court’s “find-
ings on foreseeability, reasonable certainty and the use of
the substantial causal factor standard” for causation
purposes, as well as the determination that an award of
Nuclear Waste Fund fees should be denied as premature.
Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268,
1272-4 (Fed. Cir. 2008) (Yankee II). However, this court
noted that the trial court made its causation analysis
5 YANKEE ATOMIC ELECTRIC CO v. US
“without formally interpreting the Standard Contract”
and did not fulfill its “obligation” to “apply [the 1987
annual capacity report] rate in determining the substan-
tial cause of the Yankees’ costs.” Id. at 1274. For that
reason, this court remanded for application of the 1987
annual capacity report (ACR) rate to the damages claimed
by the parties. The 1987 ACR set forth the projected
annual waste receiving capacity for DOE and the annual
acceptance ranking relating to DOE contracts for the
disposal of SNF and/or HLW. Pac. Gas & Elec. Co. v.
United States, 73 Fed. Cl. 333, 399-400 (2006).
On remand, the trial court accepted the fuel exchange
model presented by the Yankees’ expert, and concluded
that the Yankees would not have built dry storage; Maine
Yankee and Connecticut Yankee also, according to the
trial court, would not have reracked their storage pools
under the 1987 ACR rate. Yankee Atomic Power Co. v.
United States, 94 Fed. Cl. 678, 685-86 (2010) (Yankee III).
The trial court found that, using fuel exchanges, the
Yankees would have emptied their wet storage facilities
in the non-breach world within the first ten years of
DOE’s performance. Id. at 688-93.
The trial court also addressed certain “matters beyond
the remand and mandate.” Id. at 717-19. Each side
claimed the other presented issues beyond the scope of the
remand. Id. at 719-20. The Yankees claimed that the
Government’s argument to include GTCC pickup in the
1987 ACR queue was “of new cloth” and beyond the scope
of the mandate. Id. at 719, 721. The Government re-
sponded that the Yankees’ claims for the cost of transfer-
ring SNF from their wet pools to DOE (including crane
upgrades) were beyond the scope of the mandate. Id. at
720, 726. The Government also objected to Yankee
Atomic’s claim for the costs to operate and maintain (O &
M) its wet pool for 2000 and 2001, as well as its NRC fees.
YANKEE ATOMIC ELECTRIC CO v. US 6
The trial court found that the Government’s argument
to include GTCC into the 1987 ACR queue was not raised
during the Yankee I trial and was thus barred. Id. at 722.
However, the trial court noted that even if the issue was
not barred, “removal of GTCC by the date of at least the
last SNF removal” would likely have occurred. Id. at 723.
Moreover “the GTCC generated from shut-down reactors
was statistically insignificant and would not have had an
appreciable affect [sic] on the SNF queue.” Id. at 724.
Finally “costs associated with dry storage and reracking
would not have been incurred due to the presence of
GTCC.” Id. at 725.
Another remand issue involved the costs of future
loading to DOE and crane upgrades. The Yankees had
voluntarily deducted these costs from the damages in
Yankee I under the belief these costs were avoided costs
and thus not recoverable. On remand, the trial court
concluded that intervening Federal Circuit precedent
indicated these were actually deferred costs, not avoided
costs, and thus should not be deducted from the Yankees’
damages. Yankee III, 94 Fed. Cl. at 729-30.
Lastly, the trial court rejected Yankee Atomic’s at-
tempt to resurrect its claims for costs relating to wet
storage and NRC fees for the years 2000 and 2001. Yan-
kee Atomic unsuccessfully sought these costs during
Yankee I, but did not appeal the costs in Yankee II.
Yankee III, 94 Fed. Cl. at 725. The trial court found that
Yankee Atomic could not “attack the original trial deci-
sion” during the remand because it had not appealed the
issue. Id. The trial court found in the alternative that
Yankee Atomic was entitled to an additional $16,709,742
for wet pool O & M costs and $312,000 in NRC fees. Id. at
726.
7 YANKEE ATOMIC ELECTRIC CO v. US
On appeal, the Government complains that the trial
court erroneously based its damages calculations upon
estimates and speculation. Specifically, the Government
claims that the trial court errantly relied on an exchanges
model which was not grounded in fact and did not account
for DOE’s discretion to reject fuel exchange requests. The
Government likewise appeals the trial court’s interpreta-
tion of the Yankee II remand as allowing the Yankees to
claim damages conceded in the original trial yet preclud-
ing the Government from asserting that the Yankees
must establish how GTCC would impact the SNF accep-
tance queue. The Government also appealed this court’s
prior rulings regarding the appropriate rate of SNF and
HLW acceptance under the Standard Contract and the
status of GTCC as HWL under the Standard Contract.
See Carolina Power & Light Co. v. United States, 573 F.3d
1271 (Fed. Cir. 2009); Yankee II, 536 F.3d at 1278-79.
The Government recognizes that its arguments conflict
with binding precedent and appealed the issues solely to
preserve its right to seek en banc review. In the counter
appeal, the Yankees raise just one issue, requesting that
this court reverse the trial court’s exclusion of Yankee
Atomic’s wet pool O & M costs and NRC fees.
II.
This court reviews the trial court’s legal conclusions
without deference, Yankee II, 536 F.3d at 1272, and its
factual findings for clear error, Indiana Michigan Power
Co. v. United States, 422 F.3d 1369, 1373 (Fed. Cir. 2005).
Factual findings include “the general type of damages to
be awarded . . . , their appropriateness . . . , and rates
used to calculate them . . . .” Home Sav. of Am. v. United
States, 399 F.3d 1341, 1347 (Fed. Cir. 2005). The trial
court is given broad discretion, “subject to certain control-
ling principles,” in determining an appropriate quantum
of damages. Hi-Shear Tech. Corp. v. United States, 356
YANKEE ATOMIC ELECTRIC CO v. US 8
F.3d 1372, 1382 (Fed. Cir. 2004) (citing Ferguson Beaure-
gard v. Mega Sys. LLC, 350 F.3d 1327, 1345 (Fed. Cir.
2003)). This court reviews an interpretation of its own
mandate without deference. Laitram Corp. v. NEC Corp.,
115 F.3d 947, 950-51 (Fed. Cir. 1997).
III.
This court recently affirmed a trial court’s use of an
exchanges model when calculating damages for the stor-
age of SNF in Dairyland Power Cooperative v. United
States, 645 F.3d 1363, 1369 (Fed. Cir. 2011). In Dairy-
land, the trial court reviewed legal arguments and testi-
mony (both fact and expert) and awarded damages based
on an exchanges model because it determined that the
utility “was entitled to damages for its storage of SNF.”
645 F.3d at 1371. This court reviewed the trial court’s
determination and affirmed the trial court’s damages
award based on an exchanges model because “[t]he ques-
tion of whether Dairyland's model is or is not too specula-
tive to be reliable is, again, a fact issue on which we owe
deference to the Court of Federal Claims.” Id. In Dairy-
land, this court found no error in the trial court’s deter-
mination because “it appear[ed] to have been grounded in
proper weighing of the evidence.” Id. at 1370.
Similar deference must be given in this case. The
Government has recycled the arguments already rejected
in Dairyland. In Dairyland, the Government asserted
that the utility “did not identify the specific [other] utili-
ties it would have obtained year-one delivery commitment
schedules from,” that local communities might have
opposed the exchanges, and that the DOE had discretion
to reject proposed fuel exchanges. 645 F.3d at 1369. The
Government has raised the same arguments in the in-
stant case. See Appellant’s Brief 28-35. Just as this court
found in Dairyland, the Government did not identify any
9 YANKEE ATOMIC ELECTRIC CO v. US
record evidence to support a finding that the trial court
committed clear error in adopting an exchanges model.
The trial court previously determined that in the non-
breach world, DOE would not have adopted an oldest fuel
first (“OFF”) procedure. Rather, fuel exchanges would
have occurred. Yankee III, 94 Fed. Cl. at 690. The Gov-
ernment also admitted that exchanges would have oc-
curred “at some point, and in some fashion.” Id. The trial
court made the following conclusion concerning the ex-
changes model:
Compelling financial incentives, coupled with con-
tractual provision for exchanges, which under full
government performance, must be assumed to be
used, and the history of utilities creating vigorous
markets in analogous circumstances, all lead the
court to conclude that it is plausible, and more
likely than not, the market [the damages expert]
presented would have developed, and to the extent
he opined.
Id. at 692. The trial court noted that “[t]he government
did not suggest that [the damages expert] was selective in
his data, that he failed to gather appropriate data, or that
his analysis was other than robust.” Id. As such, the trial
court “[c]redit[ed] preponderant evidence” and concluded
that the Yankees would not have built dry fuel storage in
the non-breach world. Id. at 693.
DOE’s discretion to approve exchanges does not alter
this analysis. “While considerations such as DOE's dis-
cretion to approve such transactions and worries about
the presence of failed fuel are certainly relevant, they are
not overriding concerns sufficient to make the court's
finding clearly erroneous.” Dairyland, 645 F.3d at 1371.
The trial court dedicated over twenty pages of analysis to
the exchanges model, including detailed review of the
YANKEE ATOMIC ELECTRIC CO v. US 10
model, the damages expert, and other relevant testimony.
Yankee III, 94 Fed. Cl. at 687-708. The trial court con-
cluded that DOE’s discretion “would not have been exer-
cised arbitrarily and capriciously but consistent with the
obligation of good faith and fair dealing,” and thus DOE
discretion would not have invalidated the Yankees’ fuel-
out dates determined under the exchanges model. Id. at
700. As such, this court affirms the trial court’s factual
determination and award of damages based on an ex-
changes model.
IV.
This court next turns to the issue of whether the trial
court erred in interpreting the remand ordered in Yankee
II. As this court has previously stated, “[u]pon return of
its mandate, the district court cannot give relief beyond
the scope of that mandate, but it may act on matters left
open by the mandate.” Laitram Corp., 115 F.3d at 951
(citing Caldwell v. Puget Sound Elec. Apprenticeship &
Training Trust, 824 F.2d 765, 767 (9th Cir. 1987)). How-
ever, the trial court should consider “both the letter and
the spirit of the mandate . . . .” Engel Indus., Inc. v.
Lockformer Co., 166 F.3d 1379, 1383 (Fed. Cir. 1999).
Thus, “it may be appropriate in some circumstances for a
court to revisit an issue that would otherwise be deemed
waived and beyond the scope of an appellate mandate.”
Tronzo v. Biomet, Inc., 236 F.3d 1342, 1349 (Fed. Cir.
2001). This may occur when “there has been a substan-
tial change in the evidence,” id., or where an intervening
decision has changed the law, Amado v. Microsoft Corp.,
517 F.3d 1353, 1359 (Fed. Cir. 2008) (“An appellate man-
date does not turn a district judge into a robot, mechani-
cally carrying out orders that become inappropriate in
light of subsequent factual discoveries or changes in the
law.” (quoting Barrof v. Falck, 11 F.3d 729, 731 (7th Cir.
1993))). Cf. Gould, Inc. v. United States, 67 F.3d 925, 930
11 YANKEE ATOMIC ELECTRIC CO v. US
(Fed. Cir. 1995) (law-of-the-case doctrine does not apply
where “controlling authority has since made a contrary
decision of the law applicable to the issues”).
With respect to the Yankees’ claims for future loading
costs and the costs of crane upgrades, the trial court
correctly noted that the intervening precedent of Carolina
Power, Indiana Michigan, and Yankee II changed the
legal landscape for the calculation of damages on these
issues. When the Yankee I trial occurred, future loading
costs or costs associated with the transfer of fuel to DOE
were considered avoided costs, and thus not recoverable
by SNF plaintiffs. The Yankees agreed to reduce their
breach world ISFSI costs by the estimated future cost of
transferring SNF from their wet pools to DOE in the non-
breach world, on the ground these expenses were avoided
because of the breach. Yankee I, 73 Fed. Cl. at 322-23.
The subsequent change in case law allowed plaintiffs to
recover these costs. See Carolina Power, 573 F.3d at
1277.
When the trial court received this consolidated appeal
on remand, it correctly allowed the Yankees to retract
their initial voluntary deductions for these costs and
reinstate these amounts as damages. The Government
should not be allowed the unwarranted benefit of the
Yankees’ voluntary deductions when those deductions
would not have been necessary under subsequent prece-
dent. As such, this court affirms the trial court’s deter-
mination regarding the deferred costs for loading waste to
DOE.
This court also affirms the trial court’s finding that
the Government could not assert that GTCC must be
included in the SNF acceptance queue calculations. In
Yankee II, this court held that DOE’s obligations under
the Standard Contract apply to SNF and HLW, and
YANKEE ATOMIC ELECTRIC CO v. US 12
placed GTCC within the definition of HLW. 536 F.3d at
1277. On remand, the Government argued that accep-
tance of GTCC would affect DOE’s waste acceptance
queue, potentially changing the Yankees’ fuel-out dates.
Id. at 721-22. The trial court correctly concluded that the
Government was barred from asserting this position
because it was not presented at trial. See Cardiac Pace-
makers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348 (Fed.
Cir. 2009) (applying mandate principles to defenses,
holding that the mandate rule barred the trial court from
considering a newly raised anticipation defense on re-
mand, and finding error when the trial court went beyond
the mandate).
During the Yankee I trial, the Government’s only ar-
gument relating to GTCC was that it had no obligation to
remove GTCC under the Standard Contract because
GTCC was not HLW. During the Yankee I trial, the
Government could have argued in the alternative that
removal of GTCC, if required, would have changed DOE’s
waste acceptance queue. Without this alternative argu-
ment, the trial court need not now rewind the clock to
pursue a new litigation approach. Unlike the Yankees’
costs for loading to DOE discussed above, the Government
has not identified an exception to the mandate rule such
as a change in the law or manifest injustice which would
justify the requested departure from the norm. As such,
this court affirms the trial court’s determination on this
point.
In holding that the Government could not raise its
GTCC argument during the remand, this court does not
address the trial court’s alternative finding that “the
GTCC generated from shut-down reactors was statisti-
cally insignificant,” and that “costs associated with dry
storage and reracking would not have been incurred due
to the presence of GTCC.” Yankee III, 94 Fed. Cl. 724-25.
13 YANKEE ATOMIC ELECTRIC CO v. US
As the Government was precluded from raising this
argument, judicial restraint counsels against making any
binding findings on this point. Thus, as stated in Yankee
II, “the proper valuation of GTCC waste disposal remains
open for adjudication in future proceedings once the costs
of this operation are fully realized and understood.” 536
F.3d at 1278.
V.
Lastly, this court considers whether the trial court
erred by excluding some of the costs Yankee Atomic
incurred to operate its wet storage pool. In Pacific Gas &
Electric Co. v. United States, this court affirmed a trial
court’s interpretation of a similar mandate to that ordered
in Yankee II: reconsideration of the damages presented
during the initial trial in view of the 1987 ACR. 668 F.3d
1346, 1351 (Fed. Cir. 2012). This court found that the
trial court was allowed to “revisit and reconsider” an issue
that was before the trial court during the original trial,
noting that “while a mandate is controlling as to matters
within its compass, on the remand a lower court is free as
to other issues.” Id. (quoting Engel Indus. Inc., 166 F.3d
at 1382). A contrary holding would “run the risk of not
properly allowing for reconsideration of the mitigation
damages sought, and deemed proven by the trial court,”
and thus plaintiffs would not be made whole. Id.
In like fashion, Yankee Atomic claimed its wet storage
pool costs initially during the Yankee I trial. The trial
court denied these costs on the ground that Yankee
Atomic’s wet pool would not have been emptied by the
1999 fuel-out date. Yankee I, 73 Fed. Cl. at 306-07. On
remand, the trial court found as a matter of fact that “in
the hypothetical world of full government performance at
the 1987 ACR rates . . . all SNF [would be] removed from
Yankee Atomic’s wet pool by the end of 1999.” Id. at 694.
YANKEE ATOMIC ELECTRIC CO v. US 14
Since its pool would have been empty in the non-breach
world by 1999 under this new calculation, Yankee Atomic
reasserted its claim for O & M costs for 2000 and 2001 as
well as its NRC fees. Id. at 725.
The trial court erroneously stated that the scope of
the remand in Yankee II was to reexamine the causation
for “discrete costs previously awarded,” and not to open
the door for to additional costs. Id. at 726. This interpre-
tation is too narrow. The remand was ordered “[b]ecause
the Court of Federal Claims did not assess damages
according to the rate at which the Government was con-
tractually obligated to accept the utilities’ waste.” Yankee
II, 536 F.3d at 1271. The remand was not limited to a
reexamination of costs previously awarded, and the trial
court must consider both the letter and the spirit of this
court’s remand order. Engel Indus., Inc., 166 F.3d at
1383.
Regardless of whether the trial court originally
granted or denied Yankee Atomic’s damages claims, once
the trial court determined on remand that all SNF would
have been removed from Yankee Atomic’s wet storage
pool by the end of 1999 under the 1987 ACR rates in the
hypothetical world, the court was required to apply that
finding to its prior damages calculations. Under the
Yankee II remand, the trial court was free to “revisit and
reconsider” issues raised at trial, particularly as its
application of this court’s mandate changed the factual
predicate for its prior decision to deny Yankee Atomic’s
costs. Indeed this record demanded such attention to the
implications of applying the 1987 ACR rates.
Unlike the Government’s argument regarding GTCC,
Yankee Atomic’s claim for these costs was initially raised
at trial. As such, this court reverses the trial court’s
denial of Yankee Atomic’s wet storage pool costs and NRC
15 YANKEE ATOMIC ELECTRIC CO v. US
fees. The trial court wisely foresaw that this court could
reverse its refusal to consider these costs. For this rea-
son, the Court of Federal Claims found that Yankee
Atomic had established these costs with reasonable
certainty. Thus, this court need not remand for further
damages calculations, but only for entry of judgment in an
additional amount of $17,021,742.
VI.
Yankee Atomic’s claims for wet storage pool costs and
NRC fees were within this court‘s mandate in Yankee II.
As such, the trial court’s denial of these costs is reversed.
The remainder of the trial court’s decision is affirmed.
Judgment should be entered to award Yankee Atomic
Electric Co. an additional $17,021,742.
AFFIRMED-IN-PART AND REVERSED-IN-PART
COSTS
Costs to Plaintiffs-Cross Appellants.