Nebraska Public Power Dist. v. MidAmerican Energy Co

Decision Date16 October 2000
Docket NumberNo. 99-4067,99-4067
CourtU.S. Court of Appeals — Eighth Circuit

Appeal from the United States District Court for the District of Nebraska. [Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Before Wollman, Chief Judge, Beam and Morris Sheppard Arnold, Circuit Judges.

Beam, Circuit Judge.

MidAmerican Energy Company ("MEC") appeals the district court's ruling on summary judgment that MEC contractually owes appellee Nebraska Public Power District ("NPPD") current, non-refundable payments towards the estimated decommissioning costs for a nuclear facility. We reverse and remand.

In 1967, the parties' predecessors entered a "Power Sales Contract" ("PSC"). 1 The PSC obligated NPPD to construct and manage a nuclear power facility known as the Cooper Nuclear Station ("Cooper") and obligated MEC to purchase power therefrom until 2004. The parties originally contemplated a joint venture but, fearful that MEC's ownership would hinder NPPD's ability to obtain tax-exempt financing, structured the deal such that NPPD would own Cooper while MEC would pay its share through "Monthly Power Costs."

The PSC remains in effect until 2004. It requires NPPD to inform MEC by 2003 whether it will decommission or continue operating Cooper after 2004. In Section 5, the PSC distinguishes between two scenarios. If NPPD elects to shut Cooper down in 2004, the parties must share decommissioning costs equally. MEC does not dispute this liability. However, if NPPD continues operating Cooper after 2004, the PSC terminates both MEC's continuing obligations arising from Cooper and also its right to "any refund of excess payments for power and energy theretofore purchased."

The parties agree that at some point between the time they entered into the PSC and the start of the present litigation, it became apparent that the costs of decommissioning Cooper would greatly exceed those originally anticipated. In 1988, the Nuclear Regulatory Commission adopted a final rule requiring operators of nuclear facilities to file decommissioning plans, and to pre-fund decommissioning by placing money aside in an external sinking fund. See Nuclear Regulatory Commission Final Rule, General Requirements for Decommissioning Nuclear Facilities, 53 Fed. Reg. 24018-01 (June 27, 1988); 10 C.F.R. 50.82 (2000). Since 1984 the parties have done so. The PSC requires NPPD to submit to MEC a monthly statement reflecting the prior month's Monthly Power Costs. In 1984, NPPD added a line item for decommissioning costs to this bill. While the parties neither reached a separate agreement nor amended the PSC to address these costs, MEC paid these statements without objection. Final decommissioning costs are estimated to run as high as $600,000,000. After subtracting amounts recouped through salvage value, the parties' joint liability may reach $500,000,000. As of the commencement of this litigation, the parties had each paid in approximately $78,000,000. The parties now dispute the significance of MEC's payments.

NPPD initiated this litigation, seeking a declaratory judgment that the PSC requires MEC to make current, non-refundable payments towards estimated decommissioning costs. NPPD argues that such payments fall within the definition of Monthly Power Costs, obligating MEC to pay them. Moreover, NPPD argues that they constitute "payments for power and energy." If so, in the event of NPPD's continued operation of Cooper after 2004, the PSC cuts off MEC's right to any reimbursement. MEC counters that the PSC imposes no such obligation. It argues that estimated future decommissioning costs do not fit within the definition of Monthly Power Costs and as such are wholly outside the PSC. MEC has counterclaimed to establish its right to recover the amounts it has already paid if NPPD does continue operating Cooper after 2004. The district court found the PSC unambiguously supports NPPD's position.

On appeal, MEC argues that the district court did not have the power to hear the case, asserting that the dispute is not yet ripe. On the merits, MEC argues that the district court erred as the PSC does not require payments of estimated decomissioning costs and unambiguously exempts MEC from all decommissioning liability if NPPD continues operations after 2004. We take these issues up in turn.


NPPD brought this action under 28 U.S.C. 2201, which authorizes the federal courts to issue declaratory judgments in most cases within their jurisdiction. MEC urges us to dismiss this matter for lack of jurisdiction on ripeness grounds. The PSC requires NPPD to inform MEC no later than 2003 whether it plans to decommission or continue operating Cooper after 2004. NPPD has not yet made such an election. As MEC does not dispute its obligation to pay half of all decommissioning costs in the event NPPD does decommission Cooper in 2004, MEC argues that no actual dispute can arise between the parties until 2003.

The ripeness doctrine flows both from the Article III "cases" and "controversies" limitations and also from prudential considerations for refusing to exercise jurisdiction. Reno v. Catholic Soc. Servs., Inc., 509 U.S. 43, 57 n.18 (1993). Its "basic rationale is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements." Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967). It requires that before a federal court may address itself to a question, there must exist "'a real, substantial controversy between parties having adverse legal interests, a dispute definite and concrete, not hypothetical or abstract.'" Babbitt v. United Farm Workers Nat'l Union, 442 U.S. 289, 298 (1979) (quoting Railway Mail Ass'n v. Corsi, 326 U.S. 88, 93 (1945)). Parties may not simply submit questions of general interest or curiosity to the federal court. See, e.g., Public Serv. Comm'n v. Wycoff Co., 344 U.S. 237, 244 (1952).

While elegant-sounding in theory, judicial ripeness often proves something of a cantaloupe. "The difference between an abstract question and a 'case or controversy' is one of degree, of course, and is not discernible by any precise test." Babbitt, 442 U.S. at 297. The Supreme Court has directed that the ripeness inquiry requires examination of both the "fitness of the issues for judicial decision" and "the hardship to the parties of withholding court consideration." Abbott Labs. 387 U.S. at 149; Pacific Gas & Elec. Co. v. State Energy Res. Conservation & Dev. Comm'n, 461 U.S. 190, 201 (1983).

The "fitness for judicial decision" inquiry goes to a court's ability to visit an issue. In appeals from administrative regulation, the fitness prong questions finality and exhaustion. See, e.g., Lane v. USDA, 187 F.3d 793, 795 (8th Cir. 1999). More generally, however, it safeguards against judicial review of hypothetical or speculative disagreements. Babbitt, 442 U.S. at 297; State of Missouri ex rel. Missouri Highway & Transp. Comm'n v. Cuffley, 112 F.3d 1332, 1337 (8th Cir. 1997). While courts shy from settling disputes contingent in part on future possibilities, certain cases may warrant review based on their particular disposition. Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 120 S. Ct. 1084, 1093 (2000). Exception may be had where an issue is largely legal in nature, Abbott Labs., 387 U.S. at 149, may be resolved without further factual development, Pacific Gas, 461 U.S. at 203, or where judicial resolution will largely settle the parties' dispute, Ernst & Young v. Depositors Econ. Prot. Corp., 45 F.3d 530, 539-40 (1st Cir. 1995). See also Cuffley, 112 F.3d at 1333-34, 1337-38 (refusing to address a First Amendment challenge to the Ku Klux Klan's proposed participation in a state highway sponsorship program where the state sought judicial review prior to actually rejecting the Klan's application).

In addition to being fit for judicial resolution, an issue must be such that delayed review will result in significant harm. "Harm" includes both the traditional concept of actual damages-pecuniary or otherwise-and also the heightened uncertainty and resulting behavior modification that may result from delayed resolution. Ohio Forestry Ass'n, Inc. v. Sierra Club, 523 U.S. 726, 733-34 (1998). For example, in Pacific Gas, the Court stressed the financial impact that delayed adjudication would have on the petitioning utilities and the rate-paying public by forcing them to gamble millions of dollars on an uncertain state of law. 461 U.S. at 201-02; accord Ernst & Young, 45 F.3d at 537 ("[C]courts should not become mired in the frequently sophistic distinction as to whether refusing declaratory relief will actually impose a hardship or merely fail to confer a benefit."). A party need not wait for actual harm to occur. South Dakota Mining Ass'n v. Lawrence County, 155 F.3d 1005, 1008-09 (8th Cir. 1998). However, both the immediacy and the size of the threatened harm impact the ripeness calculus-they must be significant.

As ripeness combines the constitutional and the prudential, it is unclear whether "fitness" and "significant harm" constitute a two-part test or two independent bases for ripeness. Some circuits have held that both prongs must be satisfied in order for an issue to be ripe. See, e.g., Ernst & Young, 45 F.3d at 535; Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d 1573, 1581 (Fed. Cir. 1993); Western Oil & Gas Ass'n v. Sonoma County, 905 F.2d 1287, 1291 (9th Cir. 1990). Other circuits have noted the dispute. See, e.g., Philadelphia Fed'n of Teachers v. Ridge, 150 F.3d 319, 325 n.7 (3d Cir. 1998); Nutritional Health Alliance v. Shalala, 144 F.3d 220, 226 n.12 (2d Cir. 1998). We have not previously addressed the question.

A party seeking...

To continue reading

Request your trial
151 cases
  • North Dakota Family Alliance, Inc. v. Bader, No. A3-04-115.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of North Dakota
    • March 21, 2005
    ...Dist. No. 10 of Cass County Mo. v. City of Peculiar, Mo., 345 F.3d 570 (8th Cir.2003)(quoting Nebraska Public Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 1037 (8th Cir.2000)). The "basic rationale is to prevent the courts, through avoidance of premature adjudication, from entangli......
  • Fourth Corner Credit Union v. Fed. Reserve Bank of Kan. City
    • United States
    • United States Courts of Appeals. United States Court of Appeals (10th Circuit)
    • June 27, 2017
    ...any business, even with members of social groups supporting the legalization of marijuana. See Neb. Pub. Power Dist. v. MidAmerican Energy Co. , 234 F.3d 1032, 1039 (8th Cir. 2000) (indicating that in analyzing hardship, courts may examine the impact of delayed judicial resolution on the pa......
  • Dolls, Inc. v. City of Coralville, Iowa
    • United States
    • United States District Courts. 8th Circuit. United States State District Court of Southern District of Iowa
    • March 24, 2006
    ...320 (1974); Pub. Water Supply Dist. No. 8 v. City of Kearney, 401 F.3d 930, 932 (8th Cir.2005); Nebraska Pub. Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 1039-40 (8th Cir.2000). The City correctly notes that the ripeness inquiry presents a blend of Article III and prudential consi......
  • Lakes & Parks Alliance of Minneapolis v. Fed. Transit Admin.
    • United States
    • United States District Courts. 8th Circuit. United States District Court of Minnesota
    • March 6, 2015
    ...suffer, both damages and as a result of behavior modification in the absence of judicial review. Nebraska Pub. Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 1038 (8th Cir.2000). Both of these factors must be satisfied “to at least a minimum degree.” Id. at 1039.In assessing a NEPA c......
  • Request a trial to view additional results
1 books & journal articles
  • "The sword has not yet fallen": Is Administrative Guidance Jeopardizing Constitutional Rights?
    • United States
    • Missouri Law Review Vol. 88 No. 2, March 2023
    • March 22, 2023
    ...(87) A.C.L.U. v. Nat'l Sec. Agency, 493 F.3d 644, 662-64 (6th Cir. 2007). (88) Nebraska Pub. Power Dist. v. MidAmerican Energy Co., 234 F.3d 1032, 1037 (8th Cir. (89) Abbott Lab'ys v. Gardner, 387 U.S. 136, 148 (1967) abrogated by Califano v. Sanders, 430 U.S. 99 (1977). (90) Id. at 148-49.......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT