United Nuclear Corp. v. General Atomic Co., Nos. 11988

Docket NºNos. 11988
Citation629 P.2d 231, 96 N.M. 155, 1980 NMSC 94
Case DateAugust 29, 1980
CourtSupreme Court of New Mexico

Page 231

629 P.2d 231
96 N.M. 155, 26 A.L.R.4th 705, 1980-81 Trade Cases P
63,639
UNITED NUCLEAR CORPORATION, Plaintiff-Appellee,
v.
GENERAL ATOMIC COMPANY, Defendant-Appellant,
and
Indiana & Michigan Electric Co., Defendant-Appellee.
UNITED NUCLEAR CORPORATION, Plaintiff-Appellee,
v.
GENERAL ATOMIC COMPANY, Defendant-Appellant,
and
Indiana & Michigan Electric Company, Defendant-Appellee.
Nos. 11988, 12052.
1
Supreme Court of New Mexico.
Aug. 29, 1980.
Rehearing Denied Oct. 23, 1980.

[96 NM 161]

Page 237

Rodey, Dickason, Sloan, Akin & Robb, John D. Robb, Jack Eastham, Albuquerque, Montgomery, Andrews & Hannahs, Seth D. Montgomery, Santa Fe, Howrey & Simon, Washington, D.C., for defendant-appellant.

Bigbee, Stephenson, Carpenter & Crout, Donnan Stephenson; Harry L. Bigbee, Santa Fe, James T. Paulantis, Albuquerque, Charles D. Olmsted, Santa Fe, Simpson, Thacher & Bartlett, Rogers M. Doering, New York City, for plaintiff-appellee United Nuclear.

Jones, Gallegos, Snead & Wertherim, James E. Snead, Santa Fe, for defendant-appellee Indiana & Michigan Elec. Co.

OPINION

PAYNE, Justice.

This is an appeal from a default judgment entered against General Atomic Company (GAC) in Santa Fe District Court for its alleged willful and bad faith failure to comply with the court's discovery orders. 1

This case is by far the single largest litigation in the history of New Mexico, both in terms of the dollar value of the judgment, which approaches one billion dollars, and the sheer volume of the record, which contains more than 28,000 pages in the record proper, 13,000 pages of transcripts, thousands of documents, and over 100 depositions containing approximately 16,000 pages of testimony and 2,700 exhibits. The facts are largely disputed and are extremely complex. Although we begin with a general factual background and summary of the proceedings below, additional factual details are contained in the separate discussions of the issues raised on appeal.

This action was instituted by United Nuclear Corporation (United) against GAC, a partnership made up of Gulf Oil Corporation (Gulf) and Scallop Nuclear Corporation (Scallop). 2 Scallop is a wholly-owned subsidiary of Dutch-Shell Oil Company. As amended, United's complaint sought a declaratory judgment that two contracts under which United was to supply approximately[96 NM 162]

Page 238

twenty-seven million pounds of uranium to GAC were void and unenforceable. The complaint alleged that GAC and Gulf committed fraud and economic coercion, breached their fiduciary duties to United, and violated the New Mexico Antitrust Act. United also contended that its performance under the contracts had been rendered commercially impracticable. GAC counterclaimed for actual and punitive damages for United's alleged violations of the New Mexico Antitrust Act, and for specific performance of the two contracts, or alternatively, for damages of almost eight hundred million dollars.

GAC impleaded Indiana and Michigan Electric Company (I&M), a public utility company which provides electrical service to customers in the states of Indiana and Michigan. GAC contended that if United's obligations to supply uranium to GAC were excused, GAC's obligations to supply uranium to I&M from the supplies United was to deliver should also be excused. 3 I&M counterclaimed against GAC for specific performance and for other relief.

The trial of this case began on October 31, 1977. It was terminated on March 2, 1978, when the trial judge entered a sanctions order and default judgment against GAC. The court found that GAC had exercised "the utmost bad faith in all stages of the discovery process." The court entered forty-eight recitals relating to GAC's discovery failures, twelve findings of fact as sanctions pursuant to N.M.R. Civ. P. 37 (b)(2)(i), N.M.S.A. 1978, and a default judgment under N.M.R. Civ. P. 37(b)(2)(iii), N.M.S.A. 1978. 4 The judgment invalidated United's uranium supply contracts with GAC, declared that United had no other obligations to deliver uranium to GAC, and struck GAC's defenses, counterclaims and cross-claims.

A hearing on damages followed, after which the court entered a final judgment, amended final judgment, and second amended final judgment. In addition to invalidating the United-GAC contracts, the court awarded damages to United of $8,264,723 (reduced by an offset for prepayments that had been made) and to I&M of $15,950,752. The court also granted specific performance of I&M's contract for the supply of five million pounds of uranium from GAC.

GAC appeals from the default judgment, arguing ten main grounds for reversal. We have consolidated these points in this opinion into the following five sections: (1) The propriety of the court's discovery orders; (2) GAC's non-compliance with those orders and the propriety of the sanctions entered for noncompliance; (3) the court's failure to disqualify United's counsel; (4) the trial judge's refusal to disqualify himself; and (5) the propriety of the remedies.

Before turning to the examination of the issues on appeal, we think it appropriate to comment on the conduct of all parties in these appellate proceedings. We have been faced with the difficult task of wading through an avalanche of motions and papers, much of which has done little to add to our understanding of this case or to expedite the ultimate resolution of it. Perhaps because of the longevity of this litigation, the acrimony which marked the proceedings in the trial court, or the monetary value of the judgment at stake, the over six hundred pages of appellate briefs filed, as well as the arguments of the attorneys in the hearings in this Court, have been filled with unnecessary "invectives, maledictions, and denunciations which we ignore." State of Ohio v. Arthur Andersen & Co., 570 F.2d 1370, 1372 (10th Cir. 1978), cert. denied, 439 U.S. 833, 99 S.Ct. 114, 58 L.Ed.2d 129 (1978).

[96 NM 163]

Page 239

After having received the permission of this Court to file briefs which exceed by several times the length generally permitted by the Rules of Appellate Procedure, N.M.R. Civ. App. 9(k)(4), N.M.S.A. 1978, GAC and United resorted to the practice of adding additional argumentative material in a device called an appendix, without requesting or receiving permission from this Court. N.M.R. Civ. App. 9(b) and (k)(4). In addition to argument, the parties inserted other material from outside the record in these appendices, including a newspaper article and correspondence, contrary to the rules, N.M.R. Civ. App. 9(b), and to prior decisions of the Court. General Services Corp. v. Board of Com'rs, 75 N.M. 550, 552, 408 P.2d 51, 53 (1965); Porter v. Robert Porter & Sons, Inc., 68 N.M. 97, 101, 359 P.2d 134, 137 (1961). These we have also ignored.

Although the briefs of all three parties are articulate forensic efforts, each, in one form or another, has failed to fully comply with the rules of this Court. Neither the significance of the issues involved nor the magnitude of the dollars at stake excuses noncompliance with those rules. We take this opportunity to serve warning on the bar that this Court fully expects compliance with its rules of procedure in general and its specific orders in particular, and will not hesitate to impose the sanctions provided for in N.M.R. Civ. App. 31, N.M.S.A. 1978, in order to secure adherence to the rules and to our orders.

I.

FACTUAL BACKGROUND

To understand the issues in this appeal we must begin with a more detailed factual summary than is usual. Many entities have interacted to create the conditions from which this case arose.

A.

THE GULF URANIUM ORGANIZATION

The principal contract at issue here was entered into by Gulf and United. GAC's predecessor was at one time a wholly-owned subsidiary of Gulf. Most of United's allegations against GAC involve alleged wrongdoing by Gulf. Therefore, an understanding of the issues on appeal must begin with a background of Gulf's activities in the uranium market.

In 1967, Gulf entered the uranium business by purchasing a subsidiary of General Dynamics known as General Atomic. General Atomic, which was a manufacturer of nuclear reactors, was renamed Gulf General Atomic and was operated as a subsidiary of Gulf located in San Diego, California.

In 1970, Gulf formed a new division, called Gulf Energy and Environmental Systems (Gulf Energy). Gulf General Atomic became a part of Gulf Energy. Gulf Energy was the Gulf entity involved in the marketing of uranium and the manufacture of nuclear reactors. Gulf was the only manufacturer in the United States of high temperature gas cooled reactors.

Beginning in 1967, Gulf undertook the exploration and development of uranium ore bearing properties. A Gulf division located in Denver, Gulf Minerals Resources Company (Gulf Minerals), was charged with this, the production end, of Gulf's uranium business. One of Gulf's first substantial uranium discoveries was made in 1967 in the Rabbit Lake area of Canada. Another wholly-owned Gulf subsidiary, Gulf Minerals Canada Limited (Gulf Canada), was responsible for the development of the Rabbit Lake uranium project. Gulf Minerals had administrative responsibility in the Gulf organization for Gulf Canada's operations.

The following chart outlines the organization, as of 1971, of those aspects of Gulf's uranium business operations which are essential to an understanding of this case.

NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE

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Page 240

In addition to its Canadian uranium reserves, Gulf, through Gulf Minerals, began to acquire substantial uranium reserves in the United States. By 1971, it had acquired the Mt. Taylor reserves in New Mexico, which contain the largest body of uranium ore in the United States. Through Gulf Energy, Gulf also began to purchase substantial quantities of uranium on the open market from other uranium producers. Two of such purchase agreements, those Gulf and GAC...

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    ...preemption and conflict preemption. Gade, 505 U.S. at 98, 112 S.Ct. 2374;United Nuclear Corp. v. Gen. Atomic Co., 1980–NMSC–094, ¶ 186, 96 N.M. 155, 629 P.2d 231. Field preemption occurs when “federal law so occupies the field that state courts are prevented from asserting jurisdiction.” St......
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146 cases
  • Partee v. San Diego Chargers Football Co.
    • United States
    • United States State Supreme Court (California)
    • August 29, 1983
    ...and in light of this Court's holdings in Federal Baseball [and] Toolson....' " (United Nuclear Corp. v. General Atomic Co. (N.M.1980) 629 P.2d 231, 273, quoting Flood, supra, 407 U.S. at p. 284, 92 S.Ct. at p. The Chargers argue that we can infer from the citation to Radovich, a football ca......
  • In re New Motor Vehicles Canadian Export Antitrust, No. MDL DOCKET NO. 1532.
    • United States
    • United States District Courts. 1st Circuit. United States District Court (Maine)
    • December 8, 2004
    ...fifty states to pay artificially inflated prices for new automobiles." Pls.' Opp'n at 1. 9. United Nuclear Corp. v. General Atomic Co., 96 N.M. 155, 629 P.2d 231, 270 (1980), does not support the defendants' contention that the reach of the New Mexico antitrust statute is limited to intrast......
  • Tyler Grp. Partners v. Madera, CIV 19-0777 JB/SMV
    • United States
    • United States District Courts. 10th Circuit. District of New Mexico
    • September 30, 2021
    ...bears the burden to prove that all the privilege's elements exist. Cf. United Nuclear Corp. v. Gen. Atomic Co., 1980-NMSC-094, ¶ 267, 96 N.M. 155, 217, 629 P.2d 231, 293 (“The bald assertion that production of the requested information would violate a privilege (provided by law) is not enou......
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    • New Mexico Court of Appeals of New Mexico
    • November 18, 2013
    ...preemption and conflict preemption. Gade, 505 U.S. at 98, 112 S.Ct. 2374;United Nuclear Corp. v. Gen. Atomic Co., 1980–NMSC–094, ¶ 186, 96 N.M. 155, 629 P.2d 231. Field preemption occurs when “federal law so occupies the field that state courts are prevented from asserting jurisdiction.” St......
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