Entergy Arkansas, Inc. v. Nebraska
| Decision Date | 30 September 2002 |
| Docket Number | No. 4:98CV3411.,4:98CV3411. |
| Parties | ENTERGY ARKANSAS, INC., an Arkansas corporation; Entergy Gulf States, Inc., a Texas corporation; Entergy Louisiana, Inc., a Louisiana corporation; Wolf Creek Nuclear Operating Corporation, a Delaware corporation, ["Entergy & Wolf Creek"] Plaintiffs, Central Interstate Low-Level Radioactive Waste Commission, ["Commission"] Realigned Plaintiff, US Ecology, Inc., a California corporation, ["USE"] Intervenor-Plaintiff, v. State of NEBRASKA; Nebraska Department of Environmental Quality; Nebraska Department of Health and Human Services Regulation & Licensure. ["Nebraska"] Defendants. |
| Court | U.S. District Court — District of Nebraska |
Stephen M. Bruckner, Joseph E. Jones, Fraser, Stryker Law Firm, Omaha, NE, for Omaha Power District.
Rene M. Devlin, Laurence H. Levine, Latham, Watkins Law Firm, Chicago, IL, for US Ecology, Inc.
Lynne R. Fritz, Attorney Genral's Office, Lincoln, NE, for Central Interstate Low-Level Radioactive Wast Com'n, Dept. of Environ. Quality, Jay Ringenberg, Randolph Wood, Nebraska Dept. of Health, State of Nebraska, Cherly Rogers, David P. Schor,
Lisa Goldblatt, Michael R. McCarthy, Collier, Shannon Law Firm, Washington, DC, for State of Nebraska.
John P. Heil, Patrick J. Ickes, Thomas E. Johnson, Baird, Holm Law Firm, Omaha, NE, for Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Wolf Creek Operating.
Patricia A. Knapp, University of Nebraska-College of LAw, Lincoln, NE, for Boyd County Monitoring Committee.
Annette M. Kovar, Nebraska Dept. of Environ. Quality, Lincoln, NE, for Dept. of Environ. Quality.
Leonard B. Levine, Los Angeles, CA, for US Ecology, Inc.
Patrick O'Brien, Butler, Galter Law Firm, Lincoln, NE, for Central Interstate Low-Level Radioactive Waste Com'n, Dept. of Environ. Quality.
Alan E. Peterson, Alan E. Peterson, Cline, Williams Law Firm, Lincoln, NE, Shawn D. Renner, Lincoln, NE, for Central Interstate Low-Level Radioactive Waste Com'n.
William B. Reynolds, Howrey, Simon Law Firm, Washington, DC, for David P. Schor, Jay Ringenberg, Randolph Wood.
Steven G. Seglin, Rocky C. Weber, Crosby, Guenzel LAw Firm, Lincoln, NE, for US Ecology.
Linda L. Willard, Atty. General's Office, Lincoln, NE, for Nebraska Dept. of Health.
This opinion deals with the claims of Entergy & Wolf Creek and USE against the Commission. In another opinion issued today, I resolve the claims of the Commission against Nebraska.
In this decision, I find and conclude that the claims of Entergy & Wolf Creek and USE against the Commission should be denied. Pursuant to Federal Rule of Civil Procedure 52, I now set forth the findings of fact and conclusions of law which inform my opinion.
To avoid another very long opinion, I assume a thorough understanding of this complex matter. Moreover, and because they are relevant to these issues, I now incorporate by reference in this decision the facts as I found them regarding the Commission's claims against Nebraska.
Pursuant to the Central Interstate Low-Level Radioactive Waste Compact1 (Compact), the Commission contracted with USE to find, design, license, construct, and operate a low-level nuclear waste disposal facility. (Ex. 13.) The contract was very long, and quite complex. As a part of the agreement, USE was obligated to contribute "sweat equity" to the Commission. USE did so by discounting its bills to the Commission by the sum of $6,247,920.07. (Tr. 995; Ex. 1083 (spreadsheet).)
In order to fund most of the project, the Commission contracted with certain major generators of waste in the five-state compact area to provide the necessary funds. (Exs. 14, 15, 16 (amendments 1-7).) As with the USE contract, these contracts (which referred to the USE contract) were complex as well.
These generators were willing to provide the money because in return they would be able to use the waste disposal facility to dispose of low-level nuclear waste generated in their plants assuming the facility was licensed. Although they were not the only large generators to do so, Entergy & Wolf Creek were signatories to the contracts with the Commission. Each of the signatories to the contract agreed to pay the Commission a certain percentage of the funds necessary to complete the project for which the Commission had hired USE. The Entergy plaintiffs' share was slightly less than 54 percent (53.71%), and the Wolf Creek share was slightly more than 16 percent (16.23%). (Filing 463, Final Pretrial Order, at 5 ¶ 19.)
As a result, the Entergy plaintiffs claim they paid $47,576,000 to the Commission and Wolf Creek claims it paid $14,539,000 to the Commission.2 The evidence reveals that $88,554,291.77 (Tr. 1017; Exs. 1083 (spreadsheet), 1533 (checks and wire transfers)) was paid to Nebraska or USE by the Commission in direct pursuit of a license. In any event, it is undisputed that most of those funds came to the Commission from the signatories to the funding agreements, specifically including Entergy & Wolf Creek. (Br. of Comm'n in Opp'n to Cross Claims, at 5 ("[T]he Commission recognizes that the money expended on this project has come mainly from the crossclaimants.").)
USE claims that the Commission breached two related provisions of the contract with USE. The first provision is as follows:
10.03 Good Faith and Cooperation. The Parties shall in good faith undertake to perform their respective duties and obligations under this Agreement promptly in accordance with the terms of this Agreement. Acknowledging that the nature of the development of the Facility is such that continued cooperation between the Parties will be required, each of the Parties hereby agrees to cooperate with the other to the extent reasonably necessary to enable the other to take such actions as are required of it. The Parties agree that at any reasonable time or place they shall meet and consult in good faith concerning their rights and obligations, and the terms and conditions of this Agreement.
The second provision reads like this:
10.04 Further Assurances. Each Party agrees to, and shall use all reasonable efforts to, provide such information, execute and deliver any instruments and documents and take such actions as may be necessary or reasonably requested or required by the other Party which are not inconsistent with the provisions of this Agreement, and which do not involve the assumption of obligations other than those provided for in this Agreement in order to give full effect to this Agreement and to carry out the intent of this Agreement.
(Id.)
As for Entergy & Wolf Creek, they rely upon one provision of their contract with the Commission. That provision reads as follows:
5. Facility Development. The Commission agrees to use its best efforts to carry out its obligations under the USE/Commission Contract and diligently to pursue implementation of the terms of such contract for siting, licensing, development, construction and operation of a Facility in accordance with the Compact and the Federal Act.
The testimony purporting to show a breach of these provisions came exclusively from John Etheridge. He was an Entergy employee. Mr. Etheridge gave the following reasons to support the breach-of-contract claims of Entergy & Wolf Creek and USE:
Q. Okay. And what I would like you to tell the Court and us is, essentially, what's the basis for your complaints against the Commission?
A. We have a contractual agreement with the Compact Commission. We entered into that contractual agreement in good faith. We held the Compact Commission responsible for the development of this project. We were relying on the Compact Commission's management and oversight on this project. I think we feel the Compact Commission basically did an adequate job, but there were a number of areas where they could have performed much more responsibly. One, I believe was in establishing a reasonable schedule and a reasonable budget, early on in the process. That schedule and budget to apply not only to the developer, but also to the State, a lot of money was going to the State as well, and in actuality, the state basically dictated the process. So we felt that the Commission should have been much more proactive in establishing the budget and schedule early on. Also we feel that the Compact Commission should have taken a much more aggressive stance resolving the conflicts with the Department of Health's involvement on this project. I believe that cost us a lot of time and money with the conflicts that arose through the Department of Health. And finally, in our mind, the Compact Commission is a partnership among five states. They are all members, they all agreed to it, it was established by Congress, and we feel that Nebraska operated in bad faith, and as a partner to the Compact Commission, we feel that is reflective on the entire Compact and the entire Compact shares the blame for that.
(Tr. 3047-48.)
On cross examination, Mr. Etheridge admitted that the claimants' breach-of-contract case was not very strong. For example, he stated that: (1) a committee3 including a representative from the generators approved the actions and expenditures of the Commission on a quarterly basis (Tr. 3054); (2) a committee including a representative of the generators reviewed USE's plans for development on a quarterly basis (Tr. 3054-55); (3) when the committee recommended that the Commission set a deadline for Nebraska to complete the project, the Commission agreed and acted to implement that deadline (Tr. 3056); (4) he recognized that USE challenged the jurisdiction of DOH in state court, but he did not know whether the Commission had approved that suit (Tr. 3059-60); and (5) there was no claim that Arkansas, Kansas, Louisiana, or Oklahoma had acted in bad faith (Tr. 3062).
In the opinion I issued today regarding the Commission's claim against Nebraska, I...
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