Nuclear Dispute Fallout

Almost a decade after the U.S. Government was found to have breached its contracts with dozens of utility companies to dispose of their spent nuclear fuel, all 12 active judges of the U.S. Court of Appeals for the Federal Circuit, sitting en banc, will hear new arguments in Nebraska Public Power District v. U.S., as the Department of Energy seeks to excuse the billions of dollars in damages incurred by the utilities on the ground that its delay in performing was "unavoidable."

"We're now very far down the road and this would potentially open up everything," said Jay Silberg, an Energy partner with Pillsbury, who represents the Nebraska Public Power District, as well as other nuclear utilities who are suing the Government.

The Federal Circuit case on whether to allow DOE to raise the "unavoidable delay" argument is in response to a 2007 appeal by the utilities.  That appeal was filed after a Court of Federal Claims ruled that a 1997 D.C. Circuit order that precluded the DOE from using such a defense was void.

"We're revisiting this history at a time when the government said nothing about this from 1998 to 2005, and all these cases are proceeding forward and all the judges are operating under the assumption this is a valid decision by the DC Circuit," said Silberg.

Throughout this process, utility companies have continued to pay into the Nuclear Waste Fund, which was created to fund the waste disposal program and now holds more than $20 billion. On top of those costs, the companies are incurring billions of dollars to store the spent fuel that DOE was obligated to take.

"It's a lot of money, and even if we get a judgment, we haven't been able to collect it, and its value diminishes with time," said Silberg.

Silberg and a team of Pillsbury government contracts lawyers—led by Alex Tomaszczuk, and including Dan Herzfeld, Jack Chu, Evan Wesser, Esther Yeu, and Corrie Plant—have been litigating these spent fuel damages cases before the Court of Federal Claims and the Federal Circuit since 1998. Silberg also litigated the prior DC Circuit cases which established the statutory interpretations on which the Court of Federal Claims cases are based.