ME Yankee Atomic Power Co v. U.S.

• Decision Date: 20 November 2001
• Citation: 271 F.3d 1357
• Parties: (Fed. Cir. 2001) MAINE YANKEE ATOMIC POWER COMPANY, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. SACRAMENTO MUNICIPAL UTILITY DISTRICT, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. OMAHA PUBLIC POWER DISTRICT, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. 99-5156, 99-5158, 99-5160 DECIDED:
• Court: U.S. Court of Appeals — Federal Circuit

Page 1357

271 F.3d 1357 (Fed. Cir. 2001)

MAINE YANKEE ATOMIC POWER COMPANY, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

SACRAMENTO MUNICIPAL UTILITY DISTRICT, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

OMAHA PUBLIC POWER DISTRICT, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

99-5156, 99-5158, 99-5160

United States Court of Appeals for the Federal Circuit

DECIDED: NOVEMBER 20, 2001

Appealed from: United States Court of Federal Claims, Judge John P. Wiese

Jerry Stouck, Spriggs & Hollingsworth, of Washington, DC, argued for plaintiff-appellant in 99-5159. With him on the brief were Rebecca A. Womeldorf, and Michael R. Miner.

Melvin C. Garbow, Arnold & Porter, of Washington, DC, argued for plaintiff-appellant in 99-5158. With him on the brief were Howard N. Cayne, Kent A. Yalowitz, and Edward H. Sisson.

Robert A. Mangrum, Winston & Strawn, of Washington, DC, argued for plaintiff-appellant in 99-5160. With him on the brief were Eric J. Marcotte, and Charles B. Klein.

James G. Bruen, Jr., Attorney, Commercial Litigation Branch, Civil Division, Department, of Washington, DC, argued for defendant-appellee in 99-5156, 99-5158, and 99-5160. On the briefs were J. Christopher Kohn, Director; Sandra P. Spooner, Deputy Director; Theodore R. Carter, III, and Margaret L. Baskette, Attorneys.

Before MAYER, Chief Judge, FRIEDMAN, Senior Circuit Judge, and GAJARSA, Circuit Judge.

PER CURIAM.

In the Energy Policy Act of 1992, Congress imposed liability upon nuclear electric power companies that had purchased enriched uranium from the United States -- the purchases having been made as far back as 1969 -- for a substantial portion of the government's costs of decontaminating the plants in which it had enriched the uranium. The three appellants -- electric utilities that had purchased enriched uranium from the government for their nuclear power plants and who were subject to, and had paid part of, the statutory liability -- sued the United States in the Court of Federal Claims, challenging the assessments as a taking of their property for which they sought just compensation and as an unconstitutional retroactive statutory application that denied them due process and equal protection. On the government's motion, the Court of Federal Claims dismissed the complaints, holding that they did not set forth valid constitutional claims.

In Commonwealth Edison Co. v. United States, No. 00-5069, also decided today, this court en banc has upheld the constitutionality of that statutory assessment against similar challenges, namely that it takes the property of another utility and denies that utility due process. That decision binds this panel, and requires us to reject the utilities' taking and due process arguments in the instant case.

Two of the utilities in this case, Maine Yankee Atomic Power Company and Sacramento Municipal Utility District, also argue that the statute denies them equal protection -- a contention not made in Commonwealth Edison. As the Court of Federal Claims stated, the utilities argued that "the fact that foreign utilities were exempted from the assessment impermissibly differentiates between similarly-situated entities -- i.e., all those that had consumed government-enriched uranium. In addition, plaintiffs contend, the Act draws an illegitimate distinction between purchasers who resold the uranium, and those who kept it for their own purposes, as well as between pre-1992 consumers (who are subject to the fee) and post-1992 consumers (who are exempt)." Maine Yankee Atomic Power Co. v. United States, 44 Fed. Cl. 372, 383 (1999).

The Court of Federal Claims correctly rejected those contentions. We rely upon and accept that court's reasoning:

With regard to Congress's decision to exempt foreign utilities from liability, we refer to the Supreme Court's observation in Barclay & Co. v. Edwards, 267 U.S. 442, 451 (1924) that "[c]onsiderations of policy toward foreign countries may very well justify an exemption of the foreign corporations from taxes that might legitimately be imposed on them, but which Congress does not think it wise to exact." In addition, we think it significant that, as defendant points out in its motion to dismiss, the exclusion of foreign utilities from the liability equation in no way increases or otherwise affects plaintiffs' portion of domestic utility usage.

Similarly, legislatures need not burden the most responsible party to survive rational basis review. Association of Bituminous Contractors, Inc. v. Apfel, 156 F.3d 1246, 1255-56 (D.C. Cir. 1998). While the original purchasers of uranium (those who resold it and were therefore exempt from assessment) may seem, to plaintiffs, equally to have benefited from the enrichment services, we cannot conclude that Congress's decision to target end-users was without rational basis. And although plaintiffs may have preferred a system under which USEC's post-1992 customers likewise picked up the tab, Congress's assignment of liability for a past problem to past consumers does not stretch the limits of the reasonable.

Id.

The judgments of the Court of Federal Claims dismissing the complaints are

AFFIRMED.

* * * * *

Concurring opinion of FRIEDMAN, Senior Circuit Judge, in which MAYER, Chief Judge, joins.

Since I agree that we are bound by Commonwealth Edison and also agree with the court's rejection of the equal protection contention, I join in the opinion and judgment of the court. If I were not bound by Commonwealth Edison, however, I would hold that the retroactive assessment denies the appellants due process. My reasons for that conclusion follow.

I

A. During World War II, the United States began enriching uranium, first for military purposes and, starting in the mid-1960s, as nuclear fuel for commercial generation of electricity, which it sold to domestic and foreign utilities. Maine Yankee Atomic Power Co. v. United States, 44 Fed. Cl. 372, 374 (1999). The government sold the enriched uranium under fixed price contracts, which did not authorize the government to collect any additional amounts. Id. The decontamination and decommissioning of these polluted facilities is expected to take 40 years and to cost up to $20 billion. Yankee Atomic Elec. Co. v. United States, 112 F.3d 1569, 1572 (Fed. Cir. 1997).

Congress dealt with this problem in the Energy Policy Act of 1992 ("the Act" or "the Energy Act"). See generally id. That was comprehensive legislation designed to implement a "national energy policy," a reaction, at least in part, to the adverse economic effects of an oil embargo associated with the military conflict in the Persian Gulf. H.R. Rep. No. 102-474(I), at 132 (1992), reprinted in 1992 U.S.C.C.A.N. 1954, 1955.

In this legislation, Congress sought to "reform the current uranium enrichment program of the [government] so that it will be operated in a more business-like fashion." H.R. Rep. No. 102-474(I), at 142 (1992), reprinted in 1992 U.S.C.C.A.N. 1954, 1965. The Act established the United States Enrichment Corporation ("Enrichment Corporation") as a government corporation to assume the operation of the government's uranium enrichment services, 42 U.S.C. 2297, and "which eventually could be sold to the private sector." H.R. Rep. No. 102-474(I), at 142-43 (1992), reprinted in 1992 U.S.C.C.A.N. 1954, 1965-66. The Act required that the Enrichment Corporation "[w]ithin 2 years prepare a strategic plan for transferring ownership of the Corporation to private investors." 42 U.S.C. 2297d(a). The "key purposes of the Corporation includ[ed] providing enrichment services in a business-like fashion, maximizing the economic return to the [government]." H.R. Rep. No. 102-474(I), at 198 (1992), reprinted in 1992 U.S.C.C.A.N. 1954, 2021.

The Act provided that the Enrichment Corporation would not be liable for the costs of cleaning up and closing the government's uranium enrichment facilities. 42 U.S.C. 2297c-2(d). Instead, the Act established the Uranium Enrichment Decontamination and Decommissioning Fund ("Fund") for that purpose. 2297g. The Fund is financed through both Congressional appropriations and an assessment on those domestic utilities that purchased and used government enriched uranium. 2297g-1(b).

The Fund is instructed to obtain up to $480 million per year (to be adjusted annually for inflation), with at most $150 million from a special assessment on the domestic utilities. 2297g-1(a), (c). That assessment is based on each utility's share of the government's enriched uranium sales (whether purchased directly from the government or from another source), which were made prior to October 24, 1992 and that it did not resell. 2297g-1(c). The special assessment terminates after 15 years or after $2.25 billion has been collected. 2297g-1(e).

The Act also provided that the special assessments "shall be deemed a necessary and reasonable current cost of fuel and shall be fully recoverable in rates in all jurisdictions in the same manner as the utility's other fuel cost." 42 U.S.C. 2297(g)-1(g).

B. The three appellants filed separate complaints in the Court of Federal Claims, as did a number of other similarly-situated electric utilities. They contend that the special assessment constituted a breach of the fixed-price contract under which they had purchased enriched uranium from the government. The complaints included the following factual allegations, which we accept for purposes of the government's motions to dismiss. Highland Falls-Fort Montgomery Cent. Sch. Dist. v. United States, 48 F.3d 1166, 1169-70 (Fed. Cir. 1995) ("[W]e assume that all well-pled factual allegations are true and indulge in all reasonable inferences in favor of the movant.").

The appellants -- Maine Yankee Atomic Power Company ("Maine Yankee"), Sacramento Municipal Utility District ("Sacramento District"), and Omaha Public Power District ("Omaha District") (collectively "the Utilities") -- all operated nuclear...