Barsebäck Kraft AB v. US, 97-5012.

• Citation: 121 F.3d 1475
• Decision Date: 31 July 1997
• Docket Number: No. 97-5012.,97-5012.
• Parties: BARSEBÄCK KRAFT AB and Empresa Nacional Del Uranio, S.A., Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

121 F.3d 1475

BARSEBÄCK KRAFT AB and Empresa Nacional Del Uranio, S.A., Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.

No. 97-5012.

United States Court of Appeals, Federal Circuit.

July 31, 1997.

COPYRIGHT MATERIAL OMITTED

John H. O'Neill, Jr., Shaw, Pittman, Potts & Trowbridge, Washington, DC, argued, for plaintiffs-appellants. With him on the brief were Alex D. Tomaszczuk, McLean, VA, and Jay E. Silberg, James B. Hamlin, and John E. Jensen, Washington, DC.

Mitchell J. Matorin, Trial Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, Washington, DC, argued, for defendant-appellee. With him on the brief were Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, and Sandra P. Spooner, Deputy Director. Of counsel on the brief were Robert J. Moore, Vice President and General Counsel, Timothy B. Hansen, Assistant General Counsel, and Allen L. Lear, Assistant General Counsel, United States Enrichment Corporation, Bethesda, MD.

Before MAYER, RADER, and SCHALL, Circuit Judges.

MAYER, Circuit Judge.

Barsebäck Kraft AB and Empresa Nacional del Uranio, S.A. appeal the summary judgment of the United States Court of Federal Claims, 36 Fed. Cl. 691 (1996), dismissing their complaint that the United States Enrichment Corporation had overcharged them for uranium enrichment services. Because (1) the contracts at issue permit the government to charge any price below the ceiling, (2) the government has not violated any alleged treaty rights, and (3) the government is not recovering its decommissioning and decontamination costs twice, we affirm.

Background

Empresa Nacional del Uranio, S.A. (ENUSA) is a nuclear fuel cycle company owned by Spain that purchases fuel for nuclear power plants there. On March 20, 1974, the United States and Spain entered a treaty styled "Atomic Energy: Cooperation for Civil Uses" (Spanish Treaty). Pursuant to this treaty, if Spain, or authorized persons, want to obtain uranium enrichment services from the United States, they will "have access on an equitable basis with other purchasers of such services to uranium enrichment capacity then available in Atomic Energy Commission facilities and not already allocated." The Spanish Treaty also states that "the agreed delivery schedules and other terms and conditions of supply" will be set forth in "firm contracts."

Barsebäck Kraft AB (Barsebäck) is a Swedish energy company that owns and operates a commercial nuclear power plant. In December 1983, the United States and Sweden executed an "Agreement for Cooperation Between Sweden and the United States of America Concerning Peaceful Uses of Nuclear Energy" (Swedish Treaty). This treaty did not specifically mention uranium enrichment services. A subsequent letter from the American Ambassador to Sweden to the Swedish Minister for Foreign Affairs, however, states: "With respect to any contract executed between the United States Atomic Energy Commission and the Government of Sweden or authorized persons under its jurisdiction ... charges for enrichment services ... will be those in effect for users in the United States of America at the time of delivery."

In 1984, Barsebäck and ENUSA entered contracts with the United States to purchase fixed percentages of their enriched uranium needs from the Department of Energy (DOE). The duration of the contracts is thirty years or the life of the longest operating nuclear power facility included under the contracts, whichever is shorter. Barsebäck and ENUSA may terminate their contracts upon ten years' notice.

Of particular importance to this case is the pricing provision of the contracts, article IV(1).¹ It states that "the charges to be paid to DOE for enrichment services provided to the Customer hereunder will be determined in accordance with the established DOE pricing policy for such services." Article I(8) defines "established DOE pricing policy" as "any policy established by DOE that is applicable to prices or charges in effect at the time of performance of any services under this contract." Additionally, the price cannot exceed a "ceiling charge," which fluctuates under the contracts' formula, accounting for changes in electrical rates and the purchasing power of the dollar. Article IV(1).

The "established DOE pricing policy" at the time the parties contracted was that DOE's prices would recover only the government's costs over a reasonable period of time. This policy was mandated by section 161(v) of the Atomic Energy Act of 1954, which provided that "any prices established under this subsection shall be on a basis of recovery of the Government's costs over a reasonable period of time." 42 U.S.C. § 2201(v) (1988). Section 161(v), as amended, also directed DOE² to "establish criteria in writing setting forth the terms and conditions under which services provided under this subsection shall be made available." Id. Pursuant to this directive, see 10 C.F.R. § 762.1(a) (1987) ("these criteria are established pursuant to section 161(v)"), DOE published its Uranium Enrichment Services Criteria (Enrichment Criteria). The final Enrichment Criteria were published in 1986 and echoed section 161(v)'s cost-recovery based pricing policy. See id. § 762.5. The Enrichment Criteria also listed the costs included in DOE's charge, which included, inter alia, certain decontamination and decommissioning (D & D) costs.

Subsequently, Congress enacted the Energy Policy Act of 1992 (Energy Policy Act), which made three significant changes in the government's uranium enrichment services program. First, it transferred responsibility for administering the program from DOE to the newly-created United States Enrichment Corporation (USEC). See 42 U.S.C. § 2297c(a) (1994). USEC is wholly owned by the government, with the United States Treasury as the sole shareholder, and ultimately it is to be privatized. Importantly, all of DOE's existing uranium enrichment contracts, including Barsebäck's and ENUSA's, were transferred to USEC. See id. § 2297c(b)(1).

Second, the Energy Policy Act eliminated section 161(v)'s cost-recovery based pricing policy. Instead, Congress directed USEC to "establish prices for its products, materials, and services provided to customers other than DOE on a basis that will allow it to attain the normal business objectives of a profitmaking corporation." Id. § 2297c-1(a). Stated otherwise, Congress changed the government's pricing strategy from one based on recovering just its costs to one aimed at "profit maximization." H.R.Rep. No. 102-474(I), at 200 (1992), reprinted in 1992 U.S.C.C.A.N. 1954, 2023.

Third, this act created the Uranium Enrichment Decontamination and Decommissioning Fund (D & D Fund). 42 U.S.C. § 2297g. It was designed to "accumulate the monies required to clean up the old uranium enrichment plants," over fifteen years. Yankee Atomic Elec. Co. v. United States, 112 F.3d 1569, 1572 (Fed.Cir.1997). The D & D Fund is financed by deposits of $480 million per year, adjusted annually for inflation, from two sources: (1) a "special assessment" of up to $150 million collected from domestic utilities, and (2) congressional appropriations. Id.

On June 28, 1993, USEC informed Barsebäck and ENUSA (and other uranium enrichment customers) that effective July 1, 1993, their contracts would transfer to it, and their contract price of $125 per separative work unit (SWU), the common measure by which uranium enrichment services are sold, would remain the same on an interim basis. In further implementing the Energy Policy Act, USEC notified all uranium enrichment customers on June 24, 1994, that it was adopting a new pricing policy to replace the interim policy. The new policy provided that:

USEC prices will ensure that (i) the Corporation generates sufficient revenues to remain a viable, long-term supplier of uranium enrichment services, (ii) the United States Treasury, as the Corporation's sole stockholder, receives a reasonable return on its investment in the uranium enrichment services business, and (iii) the price a customer pays for additional incremental uranium enrichment services purchased from USEC is competitive in the marketplace. USEC will retain the flexibility to respond to the circumstances of all customers by negotiating prices and other contract terms on an individual basis.

USEC also told its customers that the price of $125 per SWU would remain in force. Although Barsebäck and ENUSA have continued to pay $125 per SWU, USEC has given lower prices to purchasers who have renegotiated their contracts.

Barsebäck and ENUSA submitted certified claims³ to the contracting officer in accordance with the Disputes clause of their contracts, seeking damages caused by USEC: (1) failing to set prices in accordance with the cost-recovery methodology; (2) pricing its services uncompetitively and discriminatorily, in violation of the Swedish and Spanish Treaties and the government's duty of good faith and fair dealing; and (3) double-charging for D & D costs by purportedly including charges for these expenses in its uranium enrichment prices, while simultaneously collecting these costs from domestic utilities via the special assessment. The contracting officer denied the claims. Barsebäck and ENUSA then filed suit in the Court of Federal Claims, which granted the government's motion for summary judgment. Barsebäck and ENUSA appeal.

Discussion

Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. RCFC 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). We review the Court of Federal Claims' grant of summary judgment de novo, drawing all justifiable factual inferences in favor of Barsebäck and ENUSA. Winstar Corp. v. United States, 64 F.3d 1531, 1539 (Fed.Cir.1995) (in banc), aff'd, ___ U.S. ___, 116 S.Ct. 2432, 135 L.Ed.2d 964 (1996). The...