Roedler v. Dept. of Energy, PLAINTIFFS-APPELLANTS

• Decision Date: 06 July 2001
• Docket Number: PLAINTIFFS-APPELLANTS,DEFENDANTS-APPELLEES,DEFENDANT-APPELLEE,No. 00-1204,00-1204
• Citation: 255 F.3d 1347
• Parties: (Fed. Cir. 2001) PATRICK ROEDLER, THOMAS MCDONOUGH, JEANNIE STROBEL, RICHARD PALMER, NOREEN HOFT, AND HJ COMPANY,, v. DEPARTMENT OF ENERGY, SECRETARY OF THE TREASURY, AND UNITED STATES,, v. NORTHERN STATES POWER COMPANY, Decided:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1347

255 F.3d 1347 (Fed. Cir. 2001)

PATRICK ROEDLER, THOMAS MCDONOUGH, JEANNIE STROBEL, RICHARD PALMER, NOREEN HOFT, AND HJ COMPANY, PLAINTIFFS-APPELLANTS, v. DEPARTMENT OF ENERGY, SECRETARY OF THE TREASURY, AND UNITED STATES, DEFENDANTS-APPELLEES, v. NORTHERN STATES POWER COMPANY, DEFENDANT-APPELLEE.

No. 00-1204

United States Court of Appeals for the Federal Circuit

Decided: July 6, 2001

Appealed from: United States District Court for the District of Minnesota Judge Donovan W. Frank.

[Copyrighted Material Omitted]

John A. Cochrane, Cochrane & Bresnahan, P.A., of St. Paul, Minnesota, argued for plaintiffs-appellants. Of counsel on the brief were Brian B. O'Neill, Richard A. Duncan, Elizabeth H. Schmiesing, and Vanya S. Hogen, Faegre & Benson Llp, of Minneapolis, Minnesota. Of counsel was Rodney A. Wilson, Wilson Law Office, P.A., of Minneapolis, Minnesota.

Dana J. Martin, Attorney, Civil Division, Appellate Staff, Department of Justice, of Washington, Dc, argued for defendants- appellees, Department of Energy, Secretary of the Treasury, and the United States. On the brief were J. Christopher Kohn, Director; and Sandra P. Spooner, Deputy Director. Of counsel was Douglas N. Letter, Attorney.

Timothy R. Thornton, Briggs and Morgan, P.A., of Minneapolis, Minnesota, argued defendant-appellee, Northern States Power Company. With him on the brief was Michael C. Krikava. Of counsel on the brief was Michael C. Connelly, Deputy General Counsel, Northern States Power Company, of Minneapolis, Minnesota.

Thomas Erik Bailey, Assistant Attorney General, Public Utilities Commission; and Julia E. Anderson, Assistant Attorney General, Department of Commerce, State of Minnesota, of St. Paul, Minnesota, for amicus curiae State of Minnesota, Minnesota Department of Commerce. With them on the joint amici brief for Northern States Power Company, was Mike Hatch, Attorney General, State of Minnesota.

Before Newman, Michel, and Rader, Circuit Judges.

Newman, Circuit Judge.

The plaintiffs, Patrick Roedler et al., are rate paying customers for electric power produced from nuclear fuel by Northern States Power Company. The rates paid by these customers include charges that, according to the complaint, are intended to pay for the storage and disposal of spent nuclear fuel and other nuclear waste, pursuant to federal statute and implementing contracts between the United States Department of Energy (DOE) and Northern States Power. The plaintiffs, proposing class action certification, seek recovery from the United States of all or part of the amounts that they paid in accordance with the statute and contracts, based on the established breach of the contracts by the United States. The United States District Court for the District of Minnesota dismissed the complaint, ruling that none of the asserted grounds stated a claim upon which relief could be granted.¹

BACKGROUND

The Nuclear Waste Policy Act of 1982, 42 U.S.C. §§10101 et seq., was enacted "to establish the Federal responsibility, and a definite Federal policy, for the disposal of such waste and spent fuel." 42 U.S.C. §§10131(b)(2). The Act requires the producers of nuclear-generated power to enter into contractual arrangements with the Department of Energy in accordance with the terms of a Standard Contract, 10 C.F.R. §§961.11, whereby statutory fees are paid by the producers to the Nuclear Waste Fund of the United States Treasury, and the DOE will dispose of their accumulated and future nuclear waste. By statute, and as implemented by the Standard Contract, the DOE agreed to accept this nuclear waste for disposal within fifteen years, that is, by January 31, 1998.

In 1994 the DOE announced that it would not meet the statutory and contractual deadline of January 31, 1998. Notice of Inquiry, 59 Fed. Reg. 27,7007 (1994). This announcement, which has been followed by further delay, led to litigation wherein various power companies sought relief based on the government's non-performance of its contractual obligations. In Indiana Michigan Power Co. v. Department of Energy, 88 F.3d 1272, 1276 (D.C. Cir. 1996), and Northern States Power Co. v. Department of Energy, 128 F.3d 754, 759 (D.C. Cir. 1997), the District of Columbia Circuit held that the government's failure to meet this deadline was a breach of contract. This ruling led to further litigation in which the utility companies seek damages in the Court of Federal Claims. Appellate rulings on various threshold issues appear at Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336 (Fed. Cir. 2000) and Northern States Power Co. v. United States, 224 F.3d 1361 (Fed. Cir. 2000).

The plaintiffs herein seek to recover from the United States the fees that Northern States Power paid into the Nuclear Waste Fund in accordance with the statute and the contracts between DOE and Northern States Power. The plaintiffs contend that these fee payments should be restored directly to them, lest any recovery by Northern States Power be diverted to benefit the utility's shareholders instead of the ratepayers. The plaintiffs state that with the adjudication by the D.C. Circuit that DOE breached the contracts "the only issue that remains with respect to this breach is who (Northern States Power's shareholders or its customers) is entitled to recover the customers' money."

The fee was set at the rate of 1.0 mil per kilowatt-hour of nuclear-generated power produced starting in 1983, plus a fee for accumulated pre-1983 waste. Northern States Power has paid and apparently continues to pay the fee, as a condition of the continuing operation of its nuclear-fueled electricity generating facilities. The plaintiffs also seek relief from this continuing charge, in view of the government's breach of contract.

The district court held that the plaintiffs do not have an implied- in-fact contract-based claim against the United States, and that they are not third party beneficiaries of the contracts between the Department of Energy and Northern States Power. The court also held that the facts of this case do not support a takings claim under the Fifth Amendment of the Constitution, and that none of plaintiffs' other theories states a claim upon which relief may be granted. The court dismissed the complaint, and this appeal followed.

JURISDICTION

The government and Northern States Power challenge the jurisdiction of both the district court and this court. We conclude that both courts have the requisite jurisdiction.

The plaintiffs' suit was brought in the district court on grounds that included claims under 28 U.S.C. §§1346(a)(2), the "Little Tucker Act," which assigns concurrent jurisdiction to the district courts and the Court of Federal Claims for Tucker Act claims that do not exceed $10,000. The plaintiffs represented to the district court that their individual recoveries would be limited to the jurisdictional amount, and on this basis the case proceeded. The district court did not reach how the $10,000 cap would be calculated should the plaintiffs prevail, although this aspect was not free of dispute.

We discern no flaw in this procedure, which accords with precedent. A district court may permit multi-plaintiff Little Tucker Act cases to proceed when each plaintiff waives recovery in excess of $10,000, even when potential liability exceeds $10,000. Saraco v. United States, 61 F.3d 863, 864 (Fed. Cir. 1995). See also, e.g., Smith v. Orr, 855 F.2d 1544, 1552 (Fed. Cir. 1988) (a Little Tucker Act case may proceed in the district court if recovery is limited to $10,000). Thus the district court had jurisdiction of these claims.

The appeal of cases based in whole or in part on the Little Tucker Act, together with any related claims, is assigned exclusively to the Federal Circuit; bifurcation of the appeal, whether based on issues or applicable law, is improper. See United States v. Hohri, 482 U.S. 64, 73-74 (1987) (appeal of a district court decision on claims under the Little Tucker Act and the Federal Tort Claims Act is consigned to the Federal Circuit as to all issues). Thus this appeal is properly before the Federal Circuit.

THE CONTRACT-DERIVED CLAIMS

The plaintiffs argue that they are third party beneficiaries of the contracts between DOE and Northern States Power, and that the district court erred in its contrary ruling.

Third party beneficiaries of a contract to which the United States is a party may assert a claim against the United States, in accordance with the law governing third party claims. Applying the federal common law that governs the contracts of the United States, see United States v. County of Allegheny, 322 U.S. 174, 183 (1944); Fomby-Denson v. Dep't of the Army, 247 F.3d 1366, 1373-74 (Fed. Cir. 2001), and taking note that a contract with the United States is to be construed and the rights and duties of the parties determined by application of the same principles of law as if the contract were between private individuals, see Mobil Oil Exploration & Production Southeast, Inc. v. United States, 530 U.S. 604, 608 (2000), we apply the principles of third party beneficiary law as developed in the common law and explained by precedent, see Montana v United States, 124 F.3d 1269, 1273 (Fed. Cir. 1997) (applying general law of third party beneficiary claims to the United States as a contracting party).

To establish a right of action by a third person who is not a party to or identified in the contract as a beneficiary of its performance, the contract must show the intention of the contracting parties to provide a benefit to that person. See German Alliance Insurance Co. v. Home Water Supply Co., 226 U.S. 220, 230 (1912) (the benefit to the third party under the contract must be direct); Caguas Central Federal Savings Bank v. United States, 215 F.3d 1304, 1309 (Fed. Cir. 2000) (the benefit to the third party must be intended by the contract, whether expressly stated or implicit); Montana, 124 F.3d at 1273 (the intended...