United States Court of Appeals
for the Federal Circuit
__________________________
SOUTHERN NUCLEAR OPERATING COMPANY,
ALABAMA POWER COMPANY, AND
GEORGIA POWER COMANY,
Plaintiffs-Appellees,
v.
UNITED STATES,
Defendant-Appellant.
__________________________
2008-5020
__________________________
Appeal from the United States Court of Federal
Claims in 98-CV-614, Senior Judge James F. Merow.
__________________________
Decided: March 11, 2011
___________________________
M. STANFORD BLANTON, Balch & Bingham LLP, of
Birmingham, Alabama, argued for plaintiffs-appellees.
With him on the brief were ED. R. HADEN and K.C.
HAIRSTON. Of counsel on the brief were RONALD A.
SCHECHTER, JEFFREY L. HANDWERKER and MATTHEW M.
SHULTZ, Arnold & Porter LLP, of Washington, DC.
ANDREW P AVERBACH, Senior Trial Counsel, Commer-
cial Litigation Branch, Civil Division, United States
Department of Justice, Washington, DC, argued for the
SOUTHERN NUCLEAR v. US 2
defendant-appellant. With him on the brief were TONY
WEST, Assistant Attorney General, JEANNE E. DAVIDSON,
Director, and ALAN J. LO RE, Assistant Director. Of
counsel was HAROLD D. LESTER, JR., Attorney. Of counsel
on the brief were MARIAN E. SULLIVAN, Senior Trial
Counsel, JAMES P. CONNOR, LISA L. DONAHUE and SHARI
A. ROSE, Trial Attorneys; and JANE K. TAYLOR, Office of
the General Counsel, United States Department of En-
ergy, of Washington, DC.
__________________________
Before LINN, SCHALL, and DYK, Circuit Judges.
DYK, Circuit Judge.
Plaintiffs Southern Nuclear Operating Company, Ala-
bama Power Company, and Georgia Power Company
(collectively, “plaintiffs”) filed suit in the Court of Federal
Claims (“Claims Court”) against the United States, alleg-
ing that the United States Department of Energy (“En-
ergy”) had partially breached contracts by failing to
accept spent nuclear fuel (“SNF”) for storage beginning on
January 31, 1998. The Claims Court granted summary
judgment for plaintiffs on liability. It then held a trial to
determine damages for storage costs incurred that would
not have been necessary if Energy had fulfilled its obliga-
tion to begin accepting SNF in 1998. S. Nuclear Operat-
ing Co. v. United States, 77 Fed. Cl. 396, 460 (2007). The
Claims Court also determined that the United States
waived its defense that the “unavoidable delays” clause of
its contracts precluded expectancy damages. Id. at 452–
59. We vacate-in-part the damage award and remand to
the Claims Court for further consideration with respect to
two of three power plants. We affirm the damage award
as to one plant. We also affirm the Claims Court’s conclu-
sion that the United States waived its “unavoidable
delays” defense.
3 SOUTHERN NUCLEAR v. US
BACKGROUND
In January 1983, Congress passed the Nuclear Waste
Policy Act of 1982, Pub. L. No. 97-425, 96 Stat. 2201
(codified as amended at 42 U.S.C. §§ 10101–270 (1987))
[hereinafter NWPA], under which all nuclear utilities
entered into a Standard Contract with Energy. These
contracts obligated the utilities to pay fees into the Nu-
clear Waste Fund. In return, Energy was obligated to
pick up and store the utilities’ SNF and high-level radio-
active waste (“HLW”). The NWPA and Standard Contract
obligated Energy to begin pick up by January 31, 1998.
However, the contracts also contained an unavoidable
delays clause. In 1987, Congress amended the NWPA,
requiring Energy to develop only one permanent geologic
repository for nuclear waste and forbidding Energy from
constructing an interim storage facility until the Nuclear
Regulatory Commission authorized the permanent facil-
ity. In part because of these constraints, Energy was
unable to begin accepting SNF in 1998 as required by the
statute and by contract.
On July 29, 1998, plaintiffs filed their complaint in
the Claims Court, alleging partial breach of contract. In
2004, the court granted summary judgment on liability,
finding that the government had partially breached the
Standard Contract by failing to begin accepting SNF in
January 1998. There is no issue on appeal as to liability;
liability in these SNF cases has been established. See
Neb. Pub. Power Dist. v. United States, 590 F.3d 1357
(Fed. Cir. 2010) (en banc). The facts revolve around two
main issues––the calculation of plaintiffs’ damage award
and the government’s alleged waiver of its “unavoidable
delays” defense with respect to expectancy damages.
SOUTHERN NUCLEAR v. US 4
I
In 2005, the Claims Court held a trial on damages.
The plaintiffs sought “reimbursement of their actual costs
spent mitigating [Energy’s] delays.” S. Nuclear, 77 Fed.
Cl. at 399. These costs were for construction of on-site
storage at their plants that would not have been neces-
sary had Energy performed its contractual obligations. In
essence, the parties agreed that damages were the costs
the plaintiffs actually incurred to store SNF in the real
world less the costs that the plaintiffs would have in-
curred to store SNF had Energy performed.
The plaintiffs alleged that they incurred additional
storage costs at three different power plants: Plant Hatch,
Plant Farley, and Plant Vogtle. 1 At Plant Hatch, they
sought damages for the cost of constructing an Independ-
ent Spent Fuel Storage Installation (“ISFSI”) as well as
the cost of dry storage casks for the ISFSI and the ex-
penses incurred in loading the casks onto the ISFSI.
ISFSIs are essentially concrete pads constructed to store
dry storage casks and located adjacent to (rather than
inside) reactor buildings. Dry storage casks are steel
containers designed to hold (and prevent leakage of) SNF
when it is removed from the reactor. At Plant Farley,
plaintiffs also sought reimbursement for an ISFSI as well
as for storage casks and loading costs. Lastly, at Plant
Vogtle, plaintiffs sought damages for the cost of “rerack-
ing.” Reracking is a method of increasing wet storage
(i.e., storage inside the reactor pool), as opposed to using
dry storage casks. It involves purchasing higher density
1 Plaintiffs Southern Nuclear Operating Co., Geor-
gia Power Co., and Alabama Power Co. are subsidiaries of
Southern Co., a holding company. Alabama Power owns
Plant Farley. Georgia Power holds a majority interest in
Plants Hatch and Vogtle. Southern Nuclear operates all
three plants.
5 SOUTHERN NUCLEAR v. US
storage racks so that more SNF can be stored in the wet
pools adjacent to the core rather than transferred to a dry
storage installation (like an ISFSI) outside of the reactor
building. The United States argued that these storage
costs at all three plants would also have been incurred in
the non-breach world (i.e., if Energy had performed) and
that, therefore, the government’s breach did not cause the
plaintiffs to make these expenditures.
However, determining what costs would have been in-
curred absent Energy’s breach proved difficult because
the Standard Contract itself did not specify a rate at
which Energy was obligated to pick up SNF. Instead, the
Standard Contract required Energy to issue annual
capacity reports (“ACRs”), stating which plants would be
granted pick-up allocations first and projecting how much
SNF would be accepted by Energy. The ACRs, issued
annually, included both an industry-wide pick-up rate
and projected pick-up allocations for each individual
plant. In 2008, we held in Pacific Gas & Electric Co. v.
United States, 536 F.3d 1282, 1292 (Fed. Cir. 2008), that
the Standard Contract required Energy to accept SNF at
the rates set forth in the 1987 ACR. However, the Claims
Court issued its opinions in this case in 2007 (and this
appeal was stayed). Therefore, at the time of the 2007
decision, neither the parties nor the Claims Court knew
that the 1987 ACR rates were contractually required.
At trial, the government argued that the court should
use the 1991 ACR acceptance rates, approximately 900
metric tons of uranium (“MTU”) per year, as the rates
required by the Standard Contract. The plaintiffs, con-
versely, urged the court to use a 3000 MTU per year
acceptance rate to determine how much SNF Energy
would have picked up in the non-breach world. Neither
party advocated for the 1987 ACR rates, which ramped up
to approximately 2650 MTU per year. The Claims Court
SOUTHERN NUCLEAR v. US 6
explicitly declined to determine a particular contractual
acceptance rate. Instead, the Claims Court concluded
that “the reracking at Plant Vogtle and the dry storage at
Plants Hatch and Farley would not have occurred if
[Energy] had been performing at any reasonable rate
[defined as between 2000 and 3000 MTU per year].” S.
Nuclear, 77 Fed. Cl. at 439. It then continued that,
“[e]ven at the [lower] rates under the December 1991
ACR, . . . storage shortages would likely have been ac-
commodated” in the non-breach world (i.e., the additional
storage facilities would not have been required). Id.
Therefore, the Claims Court concluded that the plaintiffs’
mitigation measures were incurred as a result of Energy’s
breach, and it awarded $2,716,000 for the rerack at Plant
Vogtle, $17,278,000 for dry storage costs at Plant Farley,
and $57,203,080 for dry storage costs at Plant Hatch. Id.
at 460.
With respect to Plant Hatch, the plaintiffs conceded
that two so-called “bathtub racks” (a type of wet storage
used within the reactor building for storing SNF), which
they purchased in the real world, would also have been
purchased for $3,186,000 in the non-breach world and
that during the period in question here they would have
saved the costs ($419,800) of installing one of the two
“bathtub racks.” The Claims Court offset the plaintiffs’
damage award by only $419,800, even though the Claims
Court recognized that the bathtub racks at Plant Hatch
would have been purchased absent Energy’s breach. The
court awarded plaintiffs $3,186,000 for the purchase of
these bathtub racks when totaling damages. On appeal,
both parties agree that the $3,186,000 award was made in
error.
After trial, the United States filed a motion for recon-
sideration, arguing that the Claims Court should have
determined a specific rate at which Energy was contrac-
7 SOUTHERN NUCLEAR v. US
tually obligated to accept SNF and that the court erred in
stating that at the 1991 ACR rates plaintiffs would not
have built additional storage. On November 1, 2007, the
Claims Court denied the motion, reiterating that even if it
had accepted the government’s proposed rate as set forth
in the 1991 ACR, “the dry storage expenditures awarded
would not have been incurred.” S. Nuclear Operating Co.
v. United States, 79 Fed. Cl. 135, 141 (2007) [hereinafter
Reconsideration Op.]. The Claims Court concluded that
at the 1987 ACR rates, “with the sufficient lead time in
the nonbreach world, and with fuel management, burnup
adjustments, swaps, increase in pickups etc, given the
enormous expense and effort to build an ISFSI . . . for a
relatively small amount of SNF, dry storage would not
have been built at Plant Hatch.” Id. at 142. The refer-
ences are all types of fuel management techniques that
can be used to avoid the need for dry storage. A “burnup
adjustment” refers to changing how much energy is
extracted from the nuclear fuel source. Increasing fuel
burnups would reduce the amount of SNF discharge
created by the process. A “swap” would involve the trad-
ing of acceptance allocations between different plants. An
“increase in pickups” refers to an option available under
the Standard Contract that would increase the plant’s
pick-up allocations.
II
With respect to the unavoidable delays issue, the
Claims Court held that the United States waived a de-
fense based on the unavoidable delays clause of the Stan-
dard Contract. It found that the government “did not
raise the unavoidable delays clause as an affirmative
defense, nor contend that but for the mandamus order
[issued by the District of Columbia Circuit], the unavoid-
able delays clause would be raised” in its pre-trial plead-
ings or at trial. 77 Fed. Cl. at 457. Furthermore, it noted
SOUTHERN NUCLEAR v. US 8
that the United States had raised the absence of a reposi-
tory as a defense or had raised challenges to the jurisdic-
tion of the District of Columbia Circuit in other cases. It
stated, “[q]uestions of the validity or applicability of the
D.C. Circuit’s mandamus in this court . . . could have been
raised but were not.” Id. at 456.
The United States timely appealed both the damage
award and the unavoidable delays decision in 2008. We
stayed the appeal until 2010 pending the outcomes of
Yankee Atomic Electric Co. v. United States, 536 F.3d
1268, 1272 (Fed. Cir. 2008), Nebraska Public Power, 590
F.3d at 1357, and Carolina Power & Light Co. v. United
States, 573 F.3d 1271 (Fed. Cir. 2009). This court has
jurisdiction under 28 U.S.C. § 1295(a)(3).
DISCUSSION
We review legal conclusions of the Claims Court, in-
cluding contract interpretation, de novo. Yankee Atomic,
536 F.3d at 1272. Factual findings are reviewed for “clear
error.” Ind. Mich. Power Co. v. United States, 422 F.3d
1369, 1373 (Fed. Cir. 2005).
I
As recognized by plaintiffs, “damages amounted to the
costs Southern actually incurred to store SNF less the
costs that Southern would have incurred to store SNF had
[Energy] performed its contracts.” Appellee’s Br. 5. The
United States argues on appeal that the Claims Court
failed to apply the contractually mandated 1987 ACR
rates to “determine precisely which costs that [plaintiffs]
incurred [in the real world] would have been avoided in
the non-breach world.” Appellants’ Br. 21. According to
the government, remand is required as to Plant Hatch
and Plant Vogtle under Yankee Atomic and Carolina
Power & Light to allow discovery and expert testimony
9 SOUTHERN NUCLEAR v. US
about plaintiffs’ hypothetical expenditures at the 1987
ACR rates. The United States concedes that remand is
unnecessary to calculate damages at Plant Farley because
the damage award would not be any different under the
1987 ACR rates.
The plaintiffs contend that remand is unnecessary be-
cause the damage award as to Plant Hatch and Plant
Vogtle would not differ using the 1987 ACR rates. They
argue that the Claims Court, in its reconsideration opin-
ion, applied the 1987 ACR rates to determine damages at
Plant Hatch and, in its initial opinion, concluded that the
plaintiffs’ storage measures at all three plants would not
have been necessary even at the 1991 ACR rates, which
were more favorable to the government than the 1987
rates.
A
With respect to Plant Hatch, the government on ap-
peal no longer challenges the Claims Court’s conclusion
that the plaintiffs would not have constructed dry storage
absent Energy’s breach. However, the government argues
that the award should be reduced because of saved costs.
These saved costs resulted from the fact that plaintiffs
allegedly would have been required to employ certain
alternative fuel management techniques at the 1987 ACR
rates in the non-breach world to avoid building dry stor-
age. In fact, the government asserts that the Claims
Court itself recognized the necessity of alternative fuel
management techniques when it stated that “with fuel
management, burnup adjustments, sawps, increase in
pickups etc, . . . dry storage would not have been built at
Plant Hatch” in the non-breach world. Reconsideration
Op. at 142 (emphasis added). Hence, it argues that the
cost of these fuel management techniques was avoided in
the real world and urges that remand is necessary for the
SOUTHERN NUCLEAR v. US 10
Claims Court to calculate the costs of these techniques
and deduct them from the final damage award.
The United States admits that it did not present any
evidence to the Claims Court about what costs would have
been avoided at Plant Hatch in the non-breach world (and
hence should be offset from the damage award) at the
1987 ACR rates or any other rate. It explains that it did
not do so because its position was that all of the costs
allegedly incurred by plaintiffs at Plant Hatch (i.e., the
ISFSI, dry storage casks, and the cost of loading the
casks) would also have been incurred if Energy had
performed at the 1991 rates, but that other avoided costs
(i.e., fuel management techniques, burnup adjustments,
etc.) would not have been incurred. The government
claims that, had it known the 1987 rates were controlling,
it would instead have agreed that dry storage would not
have been necessary in the non-breach world but that the
damage award should be offset by avoided costs. Al-
though the government does not state precisely what
these avoided costs would have been, it suggests that they
would include, inter alia, the “fuel management [tech-
niques], burnup adjustments, swaps, increase in pickups,
etc.” mentioned by the Claims Court in its reconsideration
opinion. Reconsideration Op., at 142.
At Plant Vogtle, the government argues that plaintiffs
would have needed to perform a rerack in 2007 even if
Energy had performed because the 1987 ACR rates did
not grant any SNF pick-up allocations to Plant Vogtle
until 2007, 2 and the plaintiffs therefore would have
2 The ACRs only projected pickup allocations for in-
dividual plants for the first ten years of the program
(though 2007). Under the 1987 ACR, Plant Vogtle’s first
pickup allocation was in 2007. The 1991 ACR did not
grant Plant Vogtle any pickup allocations for the first ten
years. Therefore, under both the 1991 and 1987 rates,
11 SOUTHERN NUCLEAR v. US
exceeded their storage capacity before Energy began
accepting SNF. Therefore, it claims, remand is necessary
for the Claims Court to determine whether the cost of the
rerack should have been included in the damage award or
whether plaintiffs would have incurred that cost anyway
in the non-breach world (albeit at a later date). 3
The government asserts that Yankee Atomic and
Carolina Power require use of the 1987 rate and require
remand for the Claims Court to permit discovery, hear
expert testimony, and thoroughly compare the expendi-
tures in the breach and non-breach worlds at the 1987
ACR rates. In Yankee Atomic, we remanded because the
Claims Court did not select any contractual rate and
hence “did not acknowledge that . . . causation . . . de-
pended on some comparison of the contractually-defined
hypothetical world to the expenses actually incurred.”
536 F.3d at 1274. Similarly, in Carolina Power, we re-
manded the case when the government challenged the
Claims Court’s use of a rate more favorable to the plain-
tiffs than the 1987 ACR rates to construct the hypotheti-
cal non-breach world. 573 F.3d at 1275–77. Although the
plaintiffs failed to introduce evidence concerning damages
under the 1987 rates at trial, we excused the failure
because they could not “be expected to have forecasted the
outcome of [our] intervening decision” in Pacific Gas.
Carolina Power, 573 F.3d at 1275. Also, we noted that
while the 1987 and 2004 rates might be “immaterially
different,” the case required remand because equivalency
between the two had “never been tested during discovery
or subject[ed] to cross-examination at trial.” Id. at 1276.
Energy would not have picked up any SNF from Plant
Vogtle through 2006.
3 Presumably, the government argues that some
savings would have occurred as a result of any delay in
construction.
SOUTHERN NUCLEAR v. US 12
Such a determination, we said, was “a profoundly factual
endeavor.” Id.
As in Carolina Power, the Claims Court opinion here
pre-dated the Pacific Gas decision. The government could
not have been expected to predict our adoption of the 1987
rates. Whatever the merits of allowing the record to be
reopened for the submission of evidence as to what would
have occurred at the 1987 rates, we are bound by the
Carolina Power decision. The latitude we have given to
plaintiffs to reopen the record under Carolina Power must
also be afforded to the government. However, we think
that question should be addressed in the first instance by
the Claims Court. Remand is appropriate so that the
Claims Court, in the first instance, may consider the
impact of Pacific Gas, Yankee Atomic, and Carolina Power
on this particular case, and to determine whether the
government should be allowed to reopen the record and
engage in additional discovery or introduce new evidence
(like expert reports and expert testimony) with respect to
the costs that would have been incurred by plaintiffs at
Plant Hatch and Plant Vogtle at the 1987 ACR rates. In
this connection, we note the government’s remarkable
silence about the nature and amount of the costs it alleges
the plaintiffs avoided by constructing their storage facili-
ties at Plant Hatch. In order for the Claims Court to
determine whether to reopen the record in this case, it
will be necessary for the government to be precise about
the nature and amount of the avoided costs it claims were
involved.
In requiring the government to identify such costs
with particularity, we recognize that with respect to both
claimed costs and avoided costs, plaintiffs bear the burden
of persuasion. As we held in Yankee Atomic, “[b]ecause
plaintiffs . . . are seeking expectancy damages, it is in-
cumbent upon them to establish a plausible ‘but-for’
13 SOUTHERN NUCLEAR v. US
world.” 536 F.3d at 1273 (quoting Bluebonnet Sav. Bank
FSB v. United States, 67 Fed. Cl. 231, 238 (2005)). Con-
trary to the Claims Court, this burden extends to avoided
costs, as we concluded in Yankee Atomic. Without the
application of the correct acceptance rate in the but-for
world, “the [plaintiffs] cannot show the expenses they
might have avoided.” Id. (emphasis added). 4
The reason is that the “party incurring the relevant
costs is in the best position to adduce and establish such
proof.” 11 Arthur L. Corbin & Joseph M. Perillo, Corbin
on Contracts § 57.10 n.15 (rev. ed. 2005). Here, the plain-
tiffs are in the best position to determine both the costs
they would have incurred and the costs they would have
avoided. However, this does not mean the defendant is
without any obligation. Plaintiffs cannot be expected to
brainstorm every possible cost they would have saved in
the non-breach world. Hence, a defendant must move
forward by pointing out the costs it believes the plaintiff
avoided because of its breach. See Mech-Con Corp. v.
West, 61 F.3d 883, 886 (Fed. Cir. 1995) (shifting the
burden of production, in context of determining overhead
damages when the government delays indefinitely but
requires the contractor to remain on stand-by, to the
government to “present . . . argument showing that the
contractor did not suffer . . . any loss because it was able
to . . . take on other work during the delay”); 11 Corbin on
Contracts § 57.10 (noting that although the burden to
4 The rule with respect to claims for reliance and
restitution damages is different. In that context, the
defendant has the burden to establish offsets for saved
costs. See, e.g., Am. Capital Corp. v. Fed. Deposit Ins.
Corp., 472 F.3d 859, 869 (Fed. Cir. 2006) (involving reli-
ance damages); Caroline Hunt Trust Estate v. United
States, 470 F.3d 1044, 1052 (Fed. Cir. 2006) (involving
restitution damages).
SOUTHERN NUCLEAR v. US 14
prove lost profits is generally on the plaintiff, in some
instances where it would be unfair to the plaintiff, “the
burden of going forward with the evidence should be
thrust on the defendant”). Only then does the burden
shift to the plaintiff to incorporate those saved costs into
its formulation of a plausible but-for world. Here, there-
fore, the government must identify the nature of the
avoided costs in question on remand. Should the govern-
ment fail to timely point out specific shortcomings in the
plaintiff’s causation proof on the issue of saved costs and,
in appropriate circumstances, produce supporting evi-
dence, the court is entitled to treat the issue as waived.
II
The Standard Contract includes a clause titled “Un-
avoidable Delays by Purchaser or [Energy],” which states,
in pertinent part:
Neither the Government nor the Purchaser
shall be liable under this contract for damages
caused by failure to perform its obligations here-
under, if such failure arises out of causes beyond
the control and without the fault or negligence of
the party failing to perform. In the event circum-
stances beyond the reasonable control of the Pur-
chaser or [Energy]––such as acts of God, or of the
public enemy, acts of Government in either its
sovereign or contractual capacity [etc] . . . cause
delay in the scheduled delivery, acceptance or
transport of SNF and/or HLW . . . the parties will
readjust their schedules, as appropriate, to ac-
commodate such delay.
J.A. 1047. Once it became clear to Energy that it would
be unable to begin accepting SNF by January 1998 be-
cause of its inability to construct a permanent repository
or interim storage facility, the agency issued its Final
15 SOUTHERN NUCLEAR v. US
Interpretation of Nuclear Waste Acceptance Issues, 60 Fed.
Reg. 21,793 (May 3, 1995). Energy concluded that it “did
not have an unconditional statutory or contractual obliga-
tion to accept [HLW and SNF] beginning January 31,
1998 in the absence of a repository or interim storage
facility.” Id. at 21,793–94; see also Ind. Mich. Power Co.
v. Dep’t of Energy, 88 F.3d 1272, 1274 (D.C. Cir. 1996).
However, in Indiana Michigan, the District of Colum-
bia Circuit held that Energy’s interpretation was contrary
to the NWPA and found that the agency had an uncondi-
tional statutory obligation to begin accepting SNF by
January 31, 1998. 88 F.3d at 1277. Subsequently, En-
ergy’s Contracting Officer reached a preliminary conclu-
sion that excused Energy’s failure to begin accepting SNF
on the grounds that it was an “unavoidable delay” under
the Standard Contract. In Northern States Power Co. v.
Department of Energy, 128 F.3d 754, 760 (D.C. Cir. 1997),
the District of Columbia Circuit found that the agency
was attempting to avoid the statutory obligation imposed
by the NWPA. Therefore, it issued a mandamus order
“precluding [Energy] from excusing its own delay on the
grounds that it has not yet prepared a permanent reposi-
tory or interim storage facility.” Id. at 761.
In this case, purportedly out of fear that raising the
“unavoidable delays clause” as a defense in the Claims
Court would result in sanctions under the Northern States
order, the United States did not affirmatively assert such
a defense. The United States argues that it could not
have voluntarily or knowingly waived the defense because
it “reasonably believed that it was compelled by the
Northern States mandamus order, under threat of sanc-
tions for contempt, from raising the Unavoidable Delays
defense in this case.” Appellant’s Br. 30; see also id. at 2
(“[T]he United States was subject to a writ of mandamus
from the United States Court of Appeals for the District of
SOUTHERN NUCLEAR v. US 16
Columbia Circuit specifically enjoining it from raising an
argument based upon that contractual provision.”). 5 The
government misreads the scope and purpose of the North-
ern States order. The order did not foreclose the govern-
ment from making arguments in the Claims Court.
Rather, it was directed toward a situation in which the
agency itself issued a decision rejecting the premise of the
court’s Indiana Michigan decision. The court’s concern
was that the agency itself would “implement [an] inter-
pretation of the Standard Contract that excuse[d] its
failure to perform,” not that the agency might make
arguments in the Claims Court. See Northern States, 128
F.3d at 760. 6
Following these decisions by the District of Columbia
Circuit, the Claims Court held in Nebraska Public Power
that the District of Columbia Circuit did not have juris-
diction over disputes under the Standard Contract and
hence its mandamus order did “not preclude [the United
States] from arguing . . . that it did not breach the Stan-
dard Contract based on the unavoidable delays clause.”
5 To the extent the government also argues that it
preserved its defense through Christopher Kouts’ testi-
mony, this argument must be rejected. The government
lawyer at trial acknowledged that what arguments it
would make was “still a matter to be decided.” J.A. 860.
The United States did not actually raise the defense until
its post-trial brief.
6 See also N. States Power Co. v. United States,
1998 WL 276581 (D.C. Cir. May 5, 1998) (rejecting re-
hearing petition and stating that Energy “suggest[s] that
this Court has erroneously designated itself as the proper
forum for adjudication of disputes arising under the
Standard Contract . . . . [W]e did not; we merely prohib-
ited [Energy] from implementing an interpretation that
would place it in violation of its duty under the NWPA to
assume an unconditional obligation to begin disposal by
January 31, 1998.”).
17 SOUTHERN NUCLEAR v. US
Neb. Pub. Power Dist. v. United States, 73 Fed. Cl. 650,
674 (2006), reversed and remanded, 590 F.3d 1357 (Fed.
Cir. 2010) (en banc). In our en banc decision in Nebraska
Public Power, we did not suggest that the District of
Columbia Circuit’s decisions in any way foreclosed argu-
ing in favor of the defense in the Claims Court. Indeed,
we considered the government’s argument and held that
the District of Columbia Circuit had jurisdiction to enter
the mandamus order and that its decision in Northern
States was entitled to res judicata effect on the issue of
liability but that it did not “direct the implementation of
any remedy.” 590 F.3d at 1363–65, 1376.
Finally, we note that despite its purported concerns,
the government appeared to raise the unavoidable delays
clause as a defense in Nebraska Public Power and two
pre-Nebraska Public Power cases. See Boston Edison Co.
v. United States, 64 Fed. Cl. 167, 186–87 n.21 (2005); Fla.
Power & Light Co. v. United States, 64 Fed. Cl. 37, 39
(2005).
Because the government failed to raise the unavoid-
able delays clause here and because this failure was not
compelled by the District of Columbia Circuit’s manda-
mus in Northern States, it has waived the defense. We
need not reach the question posed by the Nebraska Public
Power concurrence as to whether the “unavoidable delays”
clause could provide a defense to expectancy damages.
See Nebraska Pub. Power, 590 F.3d at 1376–77 (Dyk, J.,
concurring, with whom Linn, J., joins).
III
As noted above, the parties agree that the Claims
Court mistakenly included $3,186,000 in damages for
bathtub racks at Plant Hatch that would also have been
purchased in the non-breach world. Therefore, its deci-
sion as to that damage award is vacated.
SOUTHERN NUCLEAR v. US 18
IV
For the foregoing reasons, we affirm the Claims
Court’s determination as to waiver of the unavoidable
delays defense, affirm its damage award as to Plant
Farley, and vacate and remand its damage award as to
Plant Hatch and Plant Vogtle for further proceedings
consistent with this opinion.
AFFIRMED-IN-PART, VACATED-IN-PART, and
REMANDED
COSTS
No costs.