System Fuels, Inc. v. United States

In the United States Court of Federal Claims

No. 11-511 C

Filed: April 13, 2015*

************************************* Nuclear Waste Policy Act, 42 U.S.C.

* §§ 10101 et seq.;

* 42 U.S.C. § 10131 (Findings and

* Purposes);

* 42 U.S.C. § 10222 (Nuclear Waste

* Fund);

* 10 C.F.R. § 71 (Packaging and

* Transportation of Radioactive

* Material);

SYSTEM FUELS, INC., * 10 C.F.R. § 73.55 (Requirements for

SYSTEM ENERGY RESOURCES, INC., * Physical Plant Protection);

and SOUTH MISSISSIPPI ELECTRIC * 10 C.F.R. § 171 (Annual Fees);

POWER ASSOCIATION, * 10 C.F.R. § 961.11 (Text of the

* Standard Contract);

Plaintiffs, * Federal Rules of Evidence,

* 201 (Judicial Notice),

v. * 602 (Need for Personal

* Knowledge),

THE UNITED STATES, * 702 (Testimony by Expert

* Witnesses),

Defendant. * 703 (Bases of an Expert’s

* Opinion Testimony),

* 803 (Exceptions to the Rule

* Against Hearsay);

* Rules of the United States Court of

* Federal Claims (“RCFC”) 54(b)

* (Judgment on Multiple Claims or

* Involving Multiple Parties).

*************************************

Alexander D. Tomaszczuk, Pillsbury Winthrop Shaw Pittman LLP, McLean, Virginia, Counsel

for Plaintiffs.

Christopher J. Carney, United States Department of Justice, Commercial Litigation Branch,

Civil Division, Washington, D.C., Counsel for Defendant.

*

On April 9, 2015, the court forwarded a sealed copy of this Memorandum Opinion, Final

Order, And Final Judgment to the parties to delete from the public version any confidential and/or

privileged information. Neither party requested any redactions.

MEMORANDUM OPINION, FINAL ORDER, AND FINAL JUDGMENT

This case arises from the Department of Energy’s (“DOE”) partial breach of the June 30,

1983 Standard Contract (“Standard Contract”) between DOE and generators and owners of spent

nuclear fuel (“SNF”) and high-level radioactive waste (“HLW”). Although the Standard Contract

required DOE to accept, transport, and dispose of SNF and HLW, DOE partially breached the

Standard Contract on January 31, 1998. See N. States Power Co. v. United States, 224 F.3d 1361,

1367 (Fed. Cir. 2000) (“In brief, we hold that the unavoidable delays provision deals with delays

arising after performance of the contract has begun, and does not bar a suit seeking damages for

the [G]overnment’s failure to begin performance at all by the statutory or contractual deadline of

January 31, 1998.”); see also Me. Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1343

(Fed. Cir. 2000) (affirming the United States Court of Federal Claims’ determination that, because

“DOE has not begun accepting, transporting, and disposing of [the plaintiff’s] SNF[,] . . . . DOE

has breached the [Standard C]ontract.”) (internal quotation marks omitted).

On November 5, 2005, Plaintiffs filed a Complaint in the United States Court of Federal

Claims alleging that, because of the Government’s breach of the Standard Contract, Plaintiffs

incurred damages between January 15, 1998 and August 31, 2005. On October 11, 2007, the

United States Court of Federal Claims awarded Plaintiffs $10,014,114 in damages. See Sys. Fuels,

Inc. v. United States, 78 Fed. Cl. 769 (2007).

On August 7, 2008, the United States Court of Appeals for the Federal Circuit issued three

decisions to correct the causation analysis employed by the United States Court of Federal Claims:

Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008); Pacific Gas and Elec.

Co. v. United States, 536 F.3d 1282 (Fed. Cir. 2008); and Sacramento Mun. Util. Dist. v. United

States, 293 F. App’x 766 (Fed. Cir. 2008). On March 10, 2009, SFI filed a Motion For Partial

Reconsideration (“Pls. 3/10/2009 Recon. Mot.”), because of this “intervening change in

controlling law.” Pls. 3/10/2009 Recon. Mot. at 1. On March 27, 2009, the Government filed a

Response. On April 3, 2009, SFI filed a Reply. On July 20, 2009, the court convened an

evidentiary hearing, and on September 16, 2009, the parties filed Final Post-Hearing Briefs. On

March 11, 2010, the court issued order that reduced damages to $9,735,634 and denied the costs

of borrowed funds. See Sys. Fuels, Inc. v. United States, 92 Fed. Cl. 101, 114 (2010).

On January 19, 2012, the United States Court of Appeals for the Federal Circuit

“affirm[ed] the denial of [SFI’s] claim for the cost of borrowed funds[,] . . . . reverse[d]

the . . . denial of overhead costs[, and] . . . . affirm[ed] the trial court’s causation analysis and

revised award of nominal damages.” Sys. Fuels, Inc. v. United States, 666 F.3d 1306, 1313–14

(Fed. Cir. 2012). On April 11, 2012, the United States Court of Federal Claims issued final

judgment in the amount of $10,233,253. See Order, Sys. Fuels, Inc. v. United States, Case No. 03-

2624 (Fed. Cl. April 11, 2012).

On August 10, 2011, Plaintiffs filed a new Complaint in the United States Court of Federal

Claims, seeking damages from September 1, 2005 to July 31, 2011, caused by DOE’s partial

breach of the Standard Contract.

2

To facilitate review of this Memorandum Opinion And Final Judgment, the court has

provided the following outline.

I. RELEVANT FACTUAL BACKGROUND.

A. Prior Proceedings Before The United States Court Of Federal Claims.

B. System Fuels, Inc., System Energy Resources, Inc. and South Mississippi

Electric Power Association v. United States, Case No. 11-511.

II. RELEVANT PROCEDURAL HISTORY.

A. Prior Proceedings Before The United States Court Of Federal Claims.

B. System Fuels, Inc., System Energy Resources, Inc. and South Mississippi

Electric Power Association v. United States, Case No. 11-511.

III. DISCUSSION.

A. Jurisdiction.

B. Standing.

C. Standard of Review.

D. The Parties Do Not Dispute That Plaintiffs Are Entitled To $38,839,591 In

Damages For Costs From September 1, 2005 To July 31, 2011.

E. Whether Collateral Estoppel Applies To Certain Categories Of Damages

Claimed In Plaintiffs’ August 10, 2011 Complaint.

1. Plaintiffs’ Argument.

2. The Government’s Response.

3. The Court’s Resolution.

F. Whether Plaintiffs Are Entitled To Costs Previously Addressed In System

Fuels, Inc. v. United States, 78 Fed. Cl. 769 (2007).

1. Whether Plaintiffs Are Entitled To $66,003 For Engineering Analyses

For The Auxiliary Building.

a. Plaintiffs’ Argument.

b. The Government’s Argument.

c. The Court’s Resolution.

3

2. Whether Plaintiffs Are Entitled To $468,903 To Analyze And Reinforce

The Haul Path Outside The Auxiliary Building.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

3. Whether Plaintiffs Are Entitled To $95,635 To Relocate The Horizontal

Fuel Transfer System Insert Storage Rack And To An Unidentified

Amount To Design, Fabricate, And Install A Lift Yoke Stand.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

4. Whether Plaintiffs Are Entitled To $490,559 For Electrical System

Modifications To The Auxiliary Building.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

5. Whether Plaintiffs Are Entitled To $4,706,387 To Prepare And

Package Spent Nuclear Fuel Into Dry Storage Casks.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

6. Whether Plaintiffs Are Entitled To $344,863 For Payroll Loaders.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

G. Whether Plaintiffs Are Entitled To Costs Not Previously Addressed In System

Fuels, Inc. v. United States, 78 Fed. Cl. 769 (2007).

4

1. Whether Plaintiffs Are Entitled To $4,218,911 For Increased Security

Guard Costs.

a. Plaintiffs’ Argument.

i. The $3,707,710 To Hire Additional Security Officers.

ii. The $511,201 To Hire The Wackenhut Corporation.

iii. The Reasonableness Of Plaintiffs’ Security Costs.

b. The Government’s Response.

i. The $3,707,710 To Hire Additional Security Officers.

ii. The $511,201 To Hire The Wackenhut Corporation.

iii. The Reasonableness Of Plaintiffs’ Security Costs.

c. The Court’s Resolution.

i. The $3,707,710 To Hire Additional Security Officers.

ii. The $511,201 To Hire The Wackenhut Corporation.

iii. The Reasonableness Of Plaintiffs’ Security Costs.

2. Whether Plaintiffs Are Entitled To $1,031,958 For Whiting Part 21

Crane Costs And For Costs To Analyze And Repair The Defective

Spent Nuclear Fuel Cask Handling Crane.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

3. Whether Plaintiffs Are Entitled To $185,399 To Design Radio Remote

Controls For The Crane.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

4. Whether Plaintiffs Are Entitled To $1,769,201 For An Operational

Sequence Design And For Dose Assessment Analyses.

5

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

5. Whether Plaintiffs Are Entitled To $550,166 To Modify A Work

Platform Used To Load Spent Nuclear Fuel Into Casks.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

6. Whether Plaintiffs Are Entitled To $111,000 To Analyze The Effects Of

Loading Non-Complaint Spent Nuclear Fuel To Dry Storage.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

7. Whether Plaintiffs Are Entitled To $901,125 For Nuclear Regulatory

Commission Fees.

a. Plaintiffs’ Argument.

b. The Government’s Response.

c. The Court’s Resolution.

8. Whether Plaintiffs Are Entitled To $272,008 In Miscellaneous Costs.

IV. CONCLUSION.

* * *

6

I. RELEVANT FACTUAL BACKGROUND.

A. Prior Proceedings Before The United States Court Of Federal Claims.1

In 1982, Congress enacted the Nuclear Waste Policy Act, 42 U.S.C. §§ 10101 et seq.

(“NWPA”), pursuant to which the federal government assumed the legal duty to “provide for the

permanent disposal” of spent nuclear fuel (“SNF”)2 and/or high-level radioactive waste (“HLW”)3

from domestic utilities. See 42 U.S.C. § 10131(a)(4) (“Congress finds that . . . the Federal

Government has the responsibility to provide for the permanent disposal of [HLW] and such [SNF]

as may be disposed of in order to protect the public health and safety and the environment[.]”); see

also 42 U.S.C. § 10131(b)(2) (establishing “the Federal responsibility, and a definite Federal

policy, for the disposal of such waste and spent fuel”).

Congress also required the Department of Energy (“DOE”) to enter into Standard Contracts

with the generators and owners of SNF and HLW by June 30, 1983, committing the DOE to accept,

transport, and dispose of SNF and HLW. See 42 U.S.C. § 10222(b)(2) (“No [SNF or HLW] may

be disposed of by the Secretary . . . unless the generator or owner of such [SNF or HLW] has

entered into a contract with the Secretary under this section by not later than . . . June 30, 1983[.]”);

see also 10 C.F.R. § 961.11 (setting forth “[t]he text of the [S]tandard [C]ontract for disposal of

[SNF] and/or [HLW.]”).

The Standard Contract provided that, in return for the payment of fees from a utility, DOE

would start disposing of the SNF and HLW covered by the contracts no later than January 31, 1998

and continue such services until disposal of all SNF and HLW was completed. See 42

U.S.C. § 10222(5)(B) (“[I]n return for payment of fees established by this section, the Secretary,

beginning not later than January 31, 1998, will dispose of the [HLW] or [SNF] involved as

provided in this subchapter.”); see also 10 C.F.R. § 961.11 at art. II (“The services to be provided

by DOE under this contract shall begin, after commencement of facility operations, not later than

January 31, 1998 and shall continue until such time as all SNF and/or HLW from the civilian

nuclear power reactors . . . has been disposed of.”).

1

See Sys. Fuels, Inc. v. United States, 66 Fed. Cl. 722, 735 (2005) (“System Fuels I”); Sys.

Fuels, Inc. v. United States, 78 Fed. Cl. 769 (2007) (“System Fuels II”).

2

Congress defined SNF as fuel that “has been withdrawn from a nuclear reactor following

irradiation, the constituent elements of which have not been separated by reprocessing.” 42

U.S.C. § 10101(23). SNF contains toxic uranium and toxic byproducts, such as plutonium, and

“remains radioactive after it is removed from a nuclear reactor and must be isolated in safe disposal

facilities for thousands of years.” Sacramento Mun. Util. Dist. v. United States, 63 Fed. Cl. 495,

496 (2005) (“SMUD II”).

3

Congress defined HLW as “highly radioactive material resulting from the reprocessing

of spent nuclear fuel, including liquid waste produced directly in reprocessing . . . and other highly

radioactive material that the [Nuclear Regulatory] Commission, consistent with existing law,

determines by rule requires permanent isolation.” 42 U.S.C. § 10101(12).

7

Between June 30, 1983 and July 22, 1986, System Fuels, Inc., System Energy Resources,

Inc., and South Mississippi Electric Power Association (collectively hereinafter “SFI”) entered

into a Standard Contract with DOE (“Standard Contract”). See System Fuels II, 78 Fed. Cl. 769,

777 (2007).

On January 31, 1998, DOE failed to perform its duties to dispose of SNF and HLW under

the Standard Contract. Id. at 779.

In 2002, Plaintiffs began construction of an Independent Spent Fuel Storage Installation

(“ISFSI”) to hold additional dry storage containers of SNF until DOE fulfilled its obligations under

the Standard Contract. Id. at 783–85.

B. System Fuels, Inc., System Energy Resources, Inc. and South Mississippi

Electric Power Association v. United States, Case No. 11-511.4

On an unspecified date, SFI constructed three bullet-resistant enclosures (“BREs”) to

expand the protected area at Grand Gulf to include the ISFSI. 3/6/15 Chron. at 1 (citing PX 1297,

1515 (Invoices)); see also 7/21/14 TR at 41 (Carney). When the ISFSI was expanded, Plaintiffs

hired additional security officers, and on April 14, 2006, the security officers began patrolling the

expanded protected area. 7/21/14 TR at 235 (Dorsey).

Approximately from March 1, 2005 to August 31, 2005, SFI contracted with Enercon

Services, Inc. (“Enercon”): to analyze the structural adequacy of the Grand Gulf auxiliary

building’s 208-foot elevation (3/6/15 Chron. at 2 (citing PX477 (Contract); PX1309 (Invoice)));

to modify the electrical system in the Grand Gulf auxiliary building, including providing power to

the Holtec equipment and welding equipment for the forced helium dehydration system, the pump-

down system, and the welding system (3/6/15 Chron. at 3 (citing PX477 (Contract); PX1309

(Invoice)); see also 7/21/14 TR at 98 (Warren)); to conduct general engineering analyses (3/6/15

Chron. at 2 (citing PX477 (Contract); PX1308–09 (Invoices))); and to remove the original

Horizontal Fuel Transfer System (“HFTS”)5 and to design, fabricate, and install new racks to store

4

The facts discussed herein were derived from the parties’ March 6, 2015 Joint Notice

(“3/6/15 Notice”) of a Chronology Of Disputed Costs (“3/6/15 Chron.”) and the exhibits cited

therein. In addition, SFI claims Part 171 NRC fees and payroll loader costs associated with

Plaintiffs’ labor incurred between September 2005 and present. 3/6/15 Chron. at 1, 3. SFI also

claims incurred costs labeled as “Undiscussed” from Citibank incurred from September 1, 2005 to

September 1, 2006, and from Holtec, incurred from January 1, 2007 to December 31, 2008. 3/6/15

Chron. at 3.

5

An HFTS is a conveyor belt system for transferring fuel assemblies and control blades

between the fuel pool and the reactor vessel. DX1128, at 26 (Brewer Written Direct); see also

7/21/14 TR at 101 (Warren). Inserts on the HFTS hold items during transfer, and when not in use,

they are stored in a storage rack in the cask storage pool. DX1128, at 26 (Brewer Written Direct);

see also 7/21/14 TR at 101 (Warren). The original HFTS storage rack was moved to enable cask

loading. DX1128, at 26–27 (Brewer Written Direct); see also 7/21/14 TR at 124 (Warren).

8

control rod inserts when they are not in use (3/6/15 Chron. at 2 (citing PX477 (Contract); PX1309

(Invoice)); see also 7/21/14 TR at 101–02 (Warren)).

Approximately from March 1, 2005 to December 1, 2005, SFI modified the low profile

transporter haul path outside of the Grand Gulf auxiliary building to protect safety-related piping.

3/6/15 Chron. at 2. To do so, SFI contracted with Enercon—approximately from March 1, 2005

to August 31, 2005—and with Stone & Webster Construction Inc. A Shaw Group Company

(“Stone & Webster”)—approximately from September 1, 2005 to December 1, 2005—and also

provided its own materials and rented materials. 3/6/15 Chron. at 2 (citing PX477 (Enercon

Contract); PX848 (Stone & Webster Contract); PX 1309 (Enercon Invoice)); see also 7/21/14 TR

at 99–100 (Warren).

Approximately from June 15, 2005 to August 31, 2005, SFI contracted with Enercon to

complete a seismic analysis of the Grand Gulf auxiliary building. 3/6/15 Chron. at 2 (citing PX485

(Contract); PX1391 (Invoice)).

Approximately from July 25, 2005 to February 26, 2006, SFI contracted with NISYS

Corporation (“NISYS”) to conduct a dose assessment to evaluate the radiological conditions

around the casks in the facility, at the pad, and at the site boundary. 3/6/15 Chron. at 1 (citing

PX713 (Contract); PX1312, 1354–55 (Invoices)); see also 7/21/14 TR at 92–93 (Warren).

Approximately from August 22, 2005 to October 1, 2006, SFI contracted with Stone &

Webster to modify the electrical system in the Grand Gulf auxiliary building, including providing

power to the Holtec equipment and welding equipment for the forced helium dehydration system,

the pump-down system, and the welding system. 3/6/15 Chron. at 3; see also 7/21/14 TR at 98

(Warren). SFI also provided materials, rented materials, and subcontracted with contractors.

3/6/15 Chron. at 3 (citing PX854 (Contract); PX1302, 1510 (Invoices)).

Approximately from September 1, 2005 to October 1, 2006, Plaintiff contracted with Stone

& Webster to remove the original HFTS and to design, fabricate, and install new racks to store

control rod inserts when they are not in use. 3/6/15 Chron. at 2.

Approximately from September 1, 2005 to August 1, 2009, Plaintiffs contracted with The

Wackenhut Corporation (“Wackenhut”) to provide site security. 7/21/14 TR at 612 (Brown).

Approximately from September 22, 2005 to June 5, 2006, Plaintiffs responded to a Part 21

notification6 from its crane manufacturer, Whiting Corporation (“Whiting”). 3/6/15 Chron. at 1

(citing DX1115 (Contract)); see also 7/21/14 TR at 132 (Warren).

Approximately from November 8, 2005 to November 18, 2015, SFI contracted with

Enercon to perform an evaluation of the crane and related structure to ensure that the spent fuel

6

Part 21 notifications inform customers that there is a design or material defect in a product.

7/21/14 TR at 132 (Warren). Plaintiffs claim $6,009, including loaders, for this item. DX1129, at

Att. 5-c (Peterson Written Direct).

9

cask crane would not drop the Holtec casks. 3/6/15 Chron. at 1 (citing PX488 (Contract); PX1717–

19 (Invoices)); see also 7/21/14 TR 88–89 (Warren).

Approximately from November 14, 2005 to November 18, 2006, SFI performed cask

washdown pit modifications and also contracted with Stone & Webster and Enercon to conduct

cask washdown pit modifications. 3/6/15 Chron. at 1 (citing PX847 (Stone & Webster Contract);

PX 491 (Enercon Contract); PX 1372, 1510 (Stone & Webster Invoices); PX1352–53, 1512

(Enercon Invoices)). Specifically, SFI installed a work platform to provide a safe work area for

plant employees while they are welding the cask lids and performing other related tasks. 7/21/14

TR at 95–96 (Smith); see also PX2137, at 48, 68–69 (Supko Written Direct).

Approximately from December 12, 2005 to November 18, 2006, SFI contracted with

Enercon to conduct: an evaluation of the installation of remote controls for the spent fuel cask

crane for the stack-up operation in loading Holtec casks (3/6/15 Chron. at 1 (citing PX497

(Contract); PX1753 (Invoice)); see also 7/21/14 TR at 90–91 (Warren); 7/21/14 TR at 178–79

(Ellis); DX1128 (Brewer Written Direct)); and an operational sequence design analysis to evaluate

the movement of Holtec Cask System components (3/6/15 Chron. at 1 (citing PX497 (Contract);

PX1720–23 (Invoices)); see also 7/21/14 TR at 92–93 (Warren); PX2137, at 48–54 (Supko

Written Direct)).

Approximately from March 1, 2006 to August 3, 2011, SFI loaded SNF into dry storage

casks at Grand Gulf. 3/6/15 Chron. at 3. This included contracting with Welding Services Inc.

(“WSI”) and Westinghouse Electric Co. (“Westinghouse”). 3/6/15 Chron. at 3 (citing PX957,

960–63, 965, 990 (Contracts); PX1704, 1863, 1879 (Invoices)).

On an unspecified date in 2006, SFI mistakenly loaded SNF fuel assemblies that did not

meet the standard of the Certificate of Compliance into dry storage casks due to an error in

Plaintiffs’ SNF database. DX1128, at 17 (Brewer Written Direct); see also 7/24/14 TR at 982,

987 (stating that the database contained an error in burnup data for Grand Gulf fuel), 999 (Smith).

On an unspecified date in 2008, the parties discovered their mistake when the non-compliant SNF

was loaded into dry storage at Grand Gulf. DX1128, at 17 (Brewer Written Direct); see also

7/24/14 TR at 982, 987 (stating that the database contained an error in burnup data for Grand Gulf

fuel), 999 (Smith). On December 22, 2008, SFI requested an exemption, and on an unspecified

date, the NRC granted an exemption, so that SFI did not have to return the cask to the pool and

unload it. 7/24/14 TR at 1008–10 (Smith); see also DX1076 (Plaintiffs’ Exemption Request).

Approximately from July 16, 2008 to August 1, 2008, SFI contracted with Holtec to assist in

remedying this mistake. 3/6/15 Chron. at 1 (citing PX647 (Contract); PX1803 (Invoice)).

On August 1, 2009, SFI’s employees assumed the security duties of Wackenhut. 7/21/14

TR at 270–71 (Dorsey); see also 7/21/14 TR at 576 (Byrnes).

To date, DOE has not commenced performance under the Standard Contract. 7/21/14 TR

at 58 (Rives).

10

II. RELEVANT PROCEDURAL HISTORY.

A. Prior Proceedings Before The United States Court Of Federal Claims.

In 2000, the United States Court of Appeals for the Federal Circuit held that DOE had

partially breached the Standard Contract with the nuclear energy industry. See N. States Power

Co. v. United States, 224 F.3d 1361, 1367 (Fed. Cir. 2000) (“In brief, we hold that the unavoidable

delays provision deals with delays arising after performance of the contract has begun, and does

not bar a suit seeking damages for the [G]overnment’s failure to begin performance at all by the

statutory or contractual deadline of January 31, 1998.”); see also Me. Yankee Atomic Power

Co. v. United States, 225 F.3d 1336, 1343 (Fed. Cir. 2000) (affirming the United States Court of

Federal Claims’ holding that, because “DOE has not begun accepting, transporting, and disposing

of [the plaintiff’s] SNF[,] . . . . DOE has breached the contract.”) (internal quotation marks

omitted).

On November 5, 2003, SFI filed a Complaint in the United States Court of Federal Claims

alleging: Count I—partial breach of the June 30, 1983 Standard Contract; and Count II—breach

of the implied covenant of good faith and fair dealing. The November 5, 2003 Complaint asserted

that the January 31, 1998 partial breach of the Standard Contract caused SFI to incur $12,178,000

in costs during the period of January 15, 1998 through August 31, 2005. On November 5, 2003,

this case was assigned to the undersigned judge.

On July 29, 2005, the court issued a Memorandum Opinion And Order that: granted SFI’s

October 29, 2004 Motion For Summary Judgment On Liability; denied the Government’s

December 6, 2004 Cross-Motion For Summary Judgment as to Count I—liability for partial breach

of SFI’s June 30, 1983 Standard Contract; and granted the Government’s December 6, 2004 Cross-

Motion For Summary Judgment as to Count II—breach of implied covenant of good faith and fair

dealing. See System Fuels I, 66 Fed. Cl. 722, 735 (2005). Regarding damages, the court stated,

“Whether any specific damages were caused by the Government’s partial breach and the final

determination of damages due, if any, has not been adjudicated and can only be determined after

an evidentiary hearing.” Id.

On September 9, 2005, the United States Court of Appeals for the Federal Circuit ruled, in

a similar case involving the Government’s partial breach of the Standard Contract, that when “[the

utility’s] claim is premised upon the [G]overnment’s partial breach, its damages [are] limited to

those costs incurred prior to the date of its suit.” Ind. Mich. Power Co. v. United States, 422 F.3d

1369, 1376–77 (Fed. Cir. 2005).

On October 11, 2007, the court issued a Memorandum Opinion And Order that: held that

SFI established, by clear and convincing evidence, that a “substantial portion” of the $10,591,000

in costs SFI incurred from January 15, 1998 to August 31, 2005 should be awarded as mitigation

damages; awarded SFI $10,014,114; and held that SFI was entitled to recover the cost of borrowed

funds following clarification as to the “mitigation damages . . . [SFI] . . . incurred from January

15, 1998 to August 31, 2005.” System Fuels II, 78 Fed. Cl. at 809–10.

On August 7, 2008, the United States Court of Appeals for the Federal Circuit issued three

decisions to correct the causation analysis employed by the United States Court of Federal Claims:

11

Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268 (Fed. Cir. 2008); Pac. Gas and Elec.

Co. v. United States, 536 F.3d 1282 (Fed. Cir. 2008); and Sacramento Mun. Util. Dist. v. United

States, 293 F. App’x 766 (Fed. Cir. 2008) (“SMUD V”).

On March 11, 2010, the court issued a Memorandum Opinion On Reconsideration And

Final Order that: reduced damages to $9,735,634; and denied the costs of borrowed funds, pursuant

to England v. Contel Advanced Sys., Inc., 384 F.3d 1372, 1379 (Fed. Cir. 2004), although the court

stated that “England misconstrued the scope of the ‘no-interest rule’” and “conflicts with prior

precedent awarding interest as a component of breach of contract damages.” System Fuels,

Inc. v. United States, 92 Fed. Cl. 101, 114 (2010) (“System Fuels III”).

On May 10, 2010, SFI filed a Notice Of Appeal, and the Government filed a Notice Of

Cross-Appeal. On January 19, 2012, the United States Court of Appeals for the Federal Circuit

“affirm[ed] the denial of [SFI’s] claim for the cost of borrowed funds[,] . . . . reverse[d]

the . . . denial of overhead costs[, and] . . . . affirm[ed] the trial court’s causation analysis and

revised award of nominal damages.” System Fuels, Inc. v. United States, 666 F.3d 1306, 1313–14

(Fed. Cir. 2012) (“System Fuels IV”).

On March 12, 2012, the mandate from the United States Court of Appeals for the Federal

Circuit issued.

On March 21, 2012, SFI filed a Motion For Entry Of Final Judgment In Sum Certain,

requesting final judgment in the amount of $10,233,253, plus costs. On April 9, 2012, the

Government filed a Response, requesting final judgment in the amount of $10,233,253, but

excluding costs.

On April 11, 2012, the court issued a Final Order For Judgment in the amount of

$10,233,253, but denying certain costs. See Order, System Fuels, Inc. v. United States, Case No.

03-2624 (Fed. Cl. April 11, 2012) (“System Fuels V”).

B. System Fuels, Inc., System Energy Resources, Inc. and South Mississippi

Electric Power Association v. United States, Case No. 11-511.

On August 10, 2011, SFI (“Plaintiffs”) filed a Complaint in the United States Court of

Federal Claims (“Compl.”), seeking “damages incurred during the period between and including

September 1, 2005 and July 31, 2011 caused by the Government’s partial material breach of its

unconditional obligation to begin disposing of SNF[.]” Compl. ¶ 2. Plaintiffs’ August 10, 2011

Complaint seeks damages of $54,051,709 for: partial breach of the June 30, 1983 Standard

Contract (Count I); breach of the implied covenant of good faith and fair dealing (Count II); and a

taking without just compensation (Count III). Compl. ¶¶ 23–26, 27–31, 32–35; see also 7/18/14

Jt. Stip. ¶ 2. On that date, Plaintiffs also filed a Notice Of Directly Related Case, and this case was

assigned to the undersigned judge.

On October 8, 2011, the Government filed an Answer.

On November 29, 2011, the parties filed a Joint Preliminary Status Report. On December

5, 2011, the court held a telephonic status conference and entered a Discovery Scheduling Order.

On September 21, 2012, the court held another telephonic status conference.

12

On October 3, 2012 and February 25, 2013, the court entered Orders To Amend Schedule.

On April 16, 2013, Plaintiffs filed a Motion To Permit Designation Of An Additional

Expert And Fact Witness And To Amend Pre-Trial Schedule. On May 21, 2013, the court held a

telephonic status conference. On June 13, 2013, the court entered an Order denying Plaintiffs’

April 16, 2013 Motion.

On June 14, 2013 and July 24, 2014, the court entered Orders To Amend Schedule.

On September 5, 2013 and September 23, 2013, the court entered Orders Granting

Extension of Time To Complete Discovery.

On October 4, 2013, the Government filed a Motion To Stay In Light Of Lapse Of

Appropriations that the court granted that same day. On October 18, 2013, the court entered an

Order Lifting Stay And Scheduling Order.

On January 3, 2013, the court entered a Scheduling And Trial Management Order. On

January 10, 2014, the court held a telephonic status conference. On January 30, 2014, the parties

filed a Joint Status Report. On February 3, 2014, the court entered a revised Scheduling Order.

On May 16, 2014, the parties filed a Joint Status Report.

On May 23, 2014, Plaintiffs filed a Pretrial Memorandum Of Contentions Of Fact And

Law, a Witness List, an Exhibit List, and a Notice Of Deposition Testimony Designations. On

June 24, 2014, the Government filed a Pretrial Memorandum Of Contentions Of Fact And Law, a

Witness List, and an Exhibit List.

On July 16, 2014, Plaintiffs and the Government filed separate Objections To Exhibit Lists.

On July 18, 2014, Plaintiffs and the Government filed a Joint Stipulation Regarding Damages

(“7/18/14 Jt. Stip.”).7 On July 20, 2014, Plaintiffs filed the Expert Report Of Eileen M. Supko.

PX2137. On July 21, 2014, Plaintiffs filed the Export Report Of Kenneth P. Metcalfe. PX2138.

From July 21, 2014 to July 24, 2014, the court held a trial on damages at the United States

Court of Federal Claims in Washington, D.C. At the conclusion of the trial, the court asked the

Government whether it would oppose the court entering judgment for the undisputed $38,839,591.

7/24/14 TR at 1078; see also DX1129, at Att. 1-b (Peterson Written Direct).

On August 1, 2014, the Government filed a Notice (“Gov’t 8/1/14 Notice”), in response to

the court’s inquiry, stating that “the Government must respectfully oppose the entry of a judgment

that would only adjudicate a portion of [P]laintiffs’ claim for partial breach of contract damages”

and arguing that entry of partial final judgment, pursuant to the Rules of the United States Court

of Federal Claims (“RCFC”) 54(b), would be improper. Gov’t 8/1/14 Notice at 1–2; see also Gov’t

7

In addition to stipulating the parties’ agreement that certain costs were incurred and

supported by adequate contemporaneous documentation, the parties’ July 18, 2014 Joint

Stipulation also explains the Government’s contentions that certain costs would have been incurred

in the non-breach world or were not supported by adequate contemporaneous documentation.

13

8/1/14 Notice at 2–7. On August 8, 2014, Plaintiffs filed a Motion For Entry Of Partial Final

Judgment, Pursuant To RCFC 54(b), for entry of partial final judgment in the amount of

$38,839,591 (“Pls. 8/8/14 Mot.”).

On September 8, 2014, the Government filed a Response (“Gov’t 9/8/14 Resp.”). On

September 25, 2014, Plaintiffs filed a Reply (“Pls. 9/25/14 Reply”).

On October 3, 2014, Plaintiffs and the Government filed separate Post-Trial Briefs (“Pls.

10/3/14 Br.” and “Gov’t 10/3/14 Br.”).8 On November 13, 2014, Plaintiffs and the United States

filed separate Post-Trial Reply Briefs (“Pls. 11/13/14 Reply” and “Gov’t 11/13/14 Reply”).

On January 23, 2015, the Government filed a Notice Of Supplemental Authority (“Gov’t

1/23/15 Notice”) of the United States Court of Federal Claims’ decision in Alabama Power

Co. v. United States. See Ala. Power Co. v. United States, No. 08-237C, 2014 WL 7465683, at

*20–*21 (Fed. Cl. Dec. 29, 2014) (“Alabama Power”) (determining that a SNF plaintiff was not

entitled to cask loading costs, because it did not compare loading costs in the breach and non-

breach worlds). On February 5, 2015, Plaintiffs filed a Response (“Pls. 2/5/15 Resp.”). On

February 11, 2015, the Government filed a Reply (“Gov’t 2/11/15 Reply”).

On March 6, 2015, the parties filed a Joint Notice (“3/6/15 Notice”) to file a Chronology

Of Disputed Costs (“3/6/15 Chron.”).

III. DISCUSSION.

A. Jurisdiction.

The United States Court of Federal Claims has jurisdiction under the Tucker Act, 28

U.S.C. § 1491, “to render judgment upon any claim against the United States founded either upon

the Constitution, or any Act of Congress or any regulation of an executive department, or upon

any express or implied contract with the United States, or for liquidated or unliquidated damages

in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The Tucker Act, however, is “a

jurisdictional statute; it does not create any substantive right enforceable against the United States

for money damages . . . . [T]he Act merely confers jurisdiction upon [the United States Court of

Federal Claims] whenever the substantive right exists.” United States v. Testan, 424 U.S. 392,

398 (1976).

To pursue a substantive right under the Tucker Act, a plaintiff must identify and plead an

independent contractual relationship, Constitutional provision, federal statute, and/or executive

agency regulation that provides a substantive right to money damages. See Todd v. United States,

386 F.3d 1091, 1094 (Fed. Cir. 2004) (“[J]urisdiction under the Tucker Act requires the litigant to

identify a substantive right for money damages against the United States separate from the Tucker

8

The Government filed the October 3, 2014 Post-Trial Brief under seal “out of an

abundance of caution.” Gov’t 10/3/14 Br. at 1 n.1. On October 7, 2014, the Government re-filed

the same Post-Trial Brief on the record. Because the Government’s October 3, 2014 and October

7, 2014 Post-Trial Briefs are substantively identical, the court will refer only to the Government’s

October 3, 2014 Brief.

14

Act[.]”); see also Fisher v. United States, 402 F.3d 1167, 1172 (Fed. Cir. 2005) (en banc) (“The

Tucker Act . . . does not create a substantive cause of action; . . . a plaintiff must identify a separate

source of substantive law that creates the right to money damages. . . . [T]hat source must be

‘money-mandating.’”). Specifically, a plaintiff must demonstrate that the source of substantive

law upon which he relies “can fairly be interpreted as mandating compensation by the Federal

Government[.]” Testan, 424 U.S. at 400. And, the plaintiff bears the burden of establishing

jurisdiction by a preponderance of the evidence. See Reynolds v. Army & Air Force Exch. Serv.,

846 F.2d 746, 748 (Fed. Cir. 1988) (“[O]nce the [trial] court’s subject matter jurisdiction [is] put

in question . . . . [the plaintiff] bears the burden of establishing subject matter jurisdiction by a

preponderance of the evidence.”).

To establish jurisdiction in the United States Court of Federal Claims based on an

independent contractual relationship, “[Plaintiffs] must show that either an express or implied-in-

fact contract underlies [the] claim” at issue. See Trauma Serv. Group v. United States, 104 F.3d

1321, 1325 (Fed. Cir. 1997). A well-pleaded allegation in the complaint is sufficient to overcome

challenges to jurisdiction. See Spruill v. Merit Sys. Protection Bd., 978 F.2d 679, 686 (Fed. Cir.

1992) (“[J]urisdiction has been found to exist on the basis of well-pleaded allegations in the

complaint[.]”).

In this case, the court previously has determined that Plaintiffs properly pled a contractual

relationship with the Government and that the court has jurisdiction to adjudicate Plaintiffs’

claims. See System Fuels I, 66 Fed. Cl. at 727 (“In this case, [Plaintiffs] properly plead a

contractual relationship with the Government. . . . Therefore, the court has determined that it has

jurisdiction to adjudicate [Plaintiffs’] claims in this case.”) (internal citation omitted). Plaintiffs’

August 10, 2011 Complaint also alleges that an express contract is the basis for their claim. See

Compl. ¶ 2 (alleging that DOE breach the Standard Contract). Accordingly, the August 10, 2011

Complaint properly has pled a contractual relationship with the Government. See Trauma Serv.

Group, 104 F.3d at 1325 (“[Plaintiffs] must show that either an express or implied-in-fact contract

underlies [the] claim” at issue.).

B. Standing.

Federal trial courts should “decide standing questions at the outset of a case. That order of

decision (first jurisdiction then the merits) helps better to restrict the use of the federal courts to

those adversarial disputes that Article III defines as the federal judiciary’s business.” Steel

Co. v. Citizens for a Better Env’t, 523 U.S. 83, 111 (1998) (Breyer, J., concurring). The party

invoking federal jurisdiction, however, has the burden of proof and persuasion to satisfy the

constitutional requirements of Article III standing. See FEW/PBS, Inc. v. Dallas, 493 U.S. 215,

231 (1990) (holding that the burden is on the party seeking to exercise jurisdiction clearly to allege

facts sufficient to establish jurisdiction).

To establish standing on a contract claim, a plaintiff is required to be in privity of contract

with the United States. See, e.g., Anderson v. United States, 344 F.3d 1343, 1351 (Fed. Cir. 2003)

(“To have standing to sue the sovereign on a contract claim, a plaintiff must be in privity of contract

with the United States.”); Castle v. United States, 301 F.3d 1328, 1339 (Fed. Cir. 2002) (holding

that only direct parties to the contract have standing to allege breach of contract claims based upon

the contract); Cienega Gardens v. United States, 194 F.3d 1231, 1239 (Fed. Cir. 1998) (“The effect

15

of finding privity of contract between a party and the United States is to find a waiver of sovereign

immunity.”); Erickson Air Crane Co. v. United States, 731 F.2d 810, 813 (Fed. Cir. 1987) (“The

[G]overnment consents to be sued only by those with whom it has privity of contract[.]”).

In this case, the court previously determined that Plaintiffs are in privity of contract with

the United States and satisfied standing requirements with respect to the breach of contract claims

alleged. See System Fuels I, 66 Fed. Cl. at 727 (“Since there is no evidence in the record that SFI

sold or assigned rights under the June 30, 1983 Standard Contract, the court has determined that

SFI has standing to bring this action.”).

C. Standard of Review.9

Plaintiffs may recover damages for partial breach of contract in the SNF context where:

“(1) the damages were reasonably foreseeable by the breaching party at the time of contracting;

(2) the breach is a substantial causal factor in the damages; and (3) the damages are shown with

reasonable certainty.” Ind. Mich. Power Co., 422 F.3d at 1373 (citing Energy Capital

Corp. v. United States, 302 F.3d 1314, 1320 (Fed. Cir. 2002)).

“The remedy for breach of contract is damages sufficient to place the injured party in as

good a position as it would have been had the breaching party fully performed.” Ind. Mich. Power

Co., 422 F.3d at 1373 (citing San Carlos Irrigation & Drainage Dist. v. United States, 111 F.3d

1557, 1562 (Fed. Cir. 1997)). “[T]he general principle is that all losses, however described, are

recoverable,” including mitigation damages. RESTATEMENT (SECOND) OF CONTRACTS § 347 cmt.

c (1981); see also Ind. Mich. Power Co., 422 F.3d at 1375 (“[M]itigation damages are available

for pre-breach costs should the obligee elect to treat the obligor’s breach as partial, while pre-

breach damages for anticipatory breach are available should a party elect to treat the obligor’s

breach as total.”).

Plaintiffs “bear the burden to establish the alleged mitigation costs were caused by the

breach.” System Fuels IV, 666 F.3d at 1312 (citing Energy Nw. v. United States, 641 F.3d 1300,

1307 (Fed. Cir. 2011)). “[P]laintiff[s] must prove the extent to which [their] incurred costs differ

from the costs [they] would have incurred in the non-breach world.” Energy Nw., 641 F.3d at

1306; see also S. Nuclear Operating Co. v. United States, 637 F.3d 1297, 1304 (Fed. Cir. 2011)

(“As we held in Yankee Atomic, [b]ecause plaintiffs . . . are seeking expectancy damages, it is

incumbent upon them to establish a plausible ‘but for’ world.”) (internal quotation omitted). But,

plaintiffs are “not precluded from recovery . . . to the extent that [they] ha[ve] made reasonable

but unsuccessful efforts to avoid loss.” Ind. Mich. Power Co., 422 F.3d at 1375 (internal quotation

omitted).

9

The parties extensively briefed the standard of review. Pls. 10/3/14 Br. at 24–30; Gov’t

10/3/14 Br. at 8–12; Pls. 11/13/14 Reply at 2–6; and Gov’t 11/13/14 Reply at 2–5. But, these

arguments are also articulated in the parties’ arguments as to particular costs alleged by Plaintiffs,

so the court will address the parties’ standard of review arguments therein.

16

D. The Parties Do Not Dispute That Plaintiffs Are Entitled To $38,839,591 In

Damages For Costs From September 1, 2005 To July 31, 2011.

The August 10, 2011 Complaint seeks $54,051,709 for damages for costs incurred from

September 1, 2005 to July 31, 2011, caused by the Government’s partial breach of the June 30,

1983 Standard Contract (Count I); breach of the implied covenant of good faith and fair dealing

(Count II); and a taking without just compensation (Count III). Compl. ¶¶ 23–26, 27–31, 32–35;10

see also 7/18/14 Jt. Stip. ¶ 1. Prior to trial, the parties stipulated as to the sufficiency of the

documentary support for the majority of the damages that Plaintiffs claim, including an undisputed

amount of $38,839,591. 7/18/14 Jt. Stip. ¶ 2; 7/24/14 TR at 1078–83 (Peterson); DX1129

(Peterson Written Direct).11 At trial, Plaintiffs provided sufficient evidentiary support of the

undisputed $38,839,591 through the testimony of eight fact witnesses and two expert witnesses.

PX2137 (Supko Written Direct); PX2138 (Metcalfe Expert Report); 7/21/14 TR at 50–65 (Rives);

7/21/14 TR at 65–112 (Warren); 7/21/14 TR at 150–83 (Ellis); 7/21/14 TR at 215–85 (Dorsey);

7/22/14 TR at 574–88 (Byrnes); 7/22/14 TR at 611–25 (Brown); 7/22/14 TR at 650–62 (Supko);

7/23/14 TR at 751–73 (Barras); 7/23/14 TR at 824–44 (Metcalfe); 7/24/14 TR at 978–1012

(Smith); 7/24/14 TR at 730, 1018–46 (Zabransky); 7/24/14 TR at 1060–75 (Peterson). The

Government did not present any evidence at trial challenging the $38,839,591, and the

Government does not dispute this amount today. 8/1/14 Notice at 1 (citing DX1129 (Peterson

Written Direct) (disputing $15,212,118 in costs)); see also Gov’t 10/3/14 Br. at 3–5 (stating that

the costs at issue are $14,934,102—including $8,761,751 in “new” costs and $6,172,351 in costs

previously addressed by the court, plus the cost of fabricating a lift yoke stand).

Because Plaintiffs have sufficiently demonstrated their entitlement to the $38,839,591 and

the Government does not dispute this amount, the court has determined that Plaintiffs are entitled

to the $38,839,591.

10

Because the parties did not discuss Counts II and III in their briefs, the court has not done

so either.

11

At trial, during the voir dire of Mr. Peterson, Plaintiffs challenged Mr. Peterson’s

qualifications as an expert witness on payroll loaders and on plant security costs. 7/24/14 TR at

1069–72 (Peterson). Regarding payroll loaders, Plaintiffs argued that Mr. Peterson is “not an

accountant” and that “no one at [Mr. Peterson’s] firm who is a [Certified Public Accountant]

worked on this report concerning the [payroll] loaders that are at issue.” 7/24/14 TR at 1070

(Peterson). Regarding plant security costs, Plaintiffs contended that Mr. Peterson has “never

worked in the security field.” 7/24/14 TR at 1071. But, Mr. Peterson has extensive experience

testifying in SNF cases, was previously qualified as an expert in this case, and testified about

payroll loaders and plant security instead of the minutiae of the fields. 7/24/14 TR at 1063–64,

1072–73 (Peterson). For these reasons, the court has determined that Mr. Peterson is qualified to

proffer expert testimony in this case. See FED. R. EVID. 702 (stating that an expert may testify if:

“(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to

understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient

facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert

has reliably applied the principles and methods to the facts of the case.”).

17

E. Whether Collateral Estoppel Applies To Certain Categories Of Damages

Claimed In Plaintiffs’ August 10, 2011 Complaint.

1. Plaintiffs’ Argument.

Plaintiffs argue that “the Government challenges certain categories of damages that

continued into the current claim period—operational sequence and dose assessment, [a]uxiliary

[b]uilding and plant modifications, and cask loading costs—that were decided by the [c]ourt in

Round I of this case.” Pls. 10/3/14 Br. at 31. These categories of damages include: $1,718,311

for the operational sequence and dose assessment; $1,025,949 for the cask crane and related

structural evaluation; $185,399 for cask crane remote control modifications; $550,166 for cask

washdown pit modifications; $353,896 for modifications to the electrical system at the auxiliary

building; $468,903 for the reinforcement of the low profile transporter haul path; $95,635 for

removing the HFTS storage rack and installing two new racks; $66,003 for seismic and structural

analyses of the auxiliary building; purchasing an installing the lift yoke stand; and $4,757,647 in

cask loading offsets. Pls. 10/3/14 Br. at 31–45.

Plaintiffs also contend that “[t]he [c]ourt need not and should not revisit issues and

arguments that were previously decided and collateral estoppel should apply to preclude such

duplication.” Pls. 10/3/14 Br. at 31 (citing Ammex, Inc. v. United States, 384 F.3d 1368, 1371

(Fed. Cir. 2004) (applying collateral estoppel to preclude re-litigation of issue decided in previous

case); see also Pls. 11/13/14 Reply at 20 (same). In addition, “[t]he Government all but concedes

that collateral estoppel applies.” Pls. 11/13/14 Br. at 21 (citing Gov’t 10/3/14 Br. at 47).

Therefore, the court should apply collateral estoppel and award Plaintiffs $8,136,189 in costs for

the operational sequence and dose assessment, auxiliary building and plant modifications, and cask

loading. Pls. 10/3/14 Br. at 31–32.

2. The Government’s Response.

The Government responds that Plaintiffs’ collateral estoppel arguments “are premised

upon a misunderstanding of the law, and disregard the change in legal atmosphere that has occurred

since the first round.” Gov’t 10/3/14 Br. at 3. Moreover, Plaintiffs’ “own reliance on inconsistent

arguments . . . militates against the application of the doctrine.” Gov’t 10/3/14 Br. at 4.

Collateral estoppel does not apply when “there has been a change in the legal landscape.”

Gov’t 10/3/14 Br. at 45 (citing Bingaman v. Dep’t of Treasury, 127 F.3d 1431, 1438 (Fed. Cir.

1997) (“[A] significant change in the ‘legal atmosphere’—whether in the form of new legislation,

a new court decision, or even a new administrative ruling—can justify a later court’s refusal to

give collateral estoppel effect to an earlier decision.”)). In this case, the change in legal landscape

since System Fuels II, “caused [Plaintiffs] to change the method by which [they] attempted to prove

damages in this case from the manner in which it did so in the first case.” Gov’t 10/3/14 Br. at

45–46 (citing System Fuels II, 78 Fed. Cl. at 800–02) (determining “what the Government would

have done in a non-breach world would entail speculation,” and the Government did not provide

“evidence of what type of cask DOE will require”)).

On April 7, 2011, the United States Court of Appeals for the Federal Circuit held “that an

SNF plaintiff ‘is entitled to recover the costs of those [plant] modifications only to the extent it

18

can prove, to a reasonable certainty, that but for the [G]overnment’s breach they would not have

been incurred.’” Gov’t 10/3/14 Br. at 46 (quoting Energy Nw., 641 F.3d at 1307). In addition, the

United States Court of Appeals for the Federal Circuit held that a SNF plaintiff bears the burden

of proving the costs of the non-breach world and whether any Government challenges as “offsets”

are proper. Gov’t 10/3/14 Br. at 46 (citing Energy Nw., 641 F.3d at 1308 & n.5 (stating that there

is “no reason why the burden of proving the non-breach world—as to the plant modifications—

should not lie with [the SNF plaintiff],” since the Government is not “seeking an offset due to

avoided costs, but [is] arguing that certain [incurred costs] were not caused by the breach in the

first place”)); see also Gov’t 11/13/14 Reply at 25 (stating that Plaintiffs’ “single conclusory

paragraph” on collateral estoppel did not satisfy Plaintiffs’ burden to satisfy each element of

collateral estoppel) (citing Boston Edison Co. v. United States, 64 Fed. Cl. 167, 185 (2005) (“The

party seeking preclusion by collateral estoppel bears the burden of establishing each of the

necessary elements.”)).

The Government acknowledges that the United States Court of Appeals for “the Federal

Circuit, post-Energy Northwest, affirmed this [c]ourt’s first round causation findings with respect

to, among other items, the auxiliary building modifications.” Gov’t 10/3/14 Br. at 47 (citing

System Fuels IV, 666 F.3d at 1312–13 (affirming the court’s causation findings but stating that the

court should not have placed the burden of proof on the Government)). But, Plaintiffs “recognized

that, under the altered legal landscape, it could not prove damages for what it has characterized as

the ‘new’ issues . . . without meeting its burden of proof under Energy Northwest to depict the ‘but

for’ world of DOE performance.” Gov’t 10/3/14 Br. at 47 (noting that Plaintiffs’ expert, Ms.

Supko, “declined to address the continuing costs for modifications upon which the [c]ourt had

already ruled in the first case,” but instead “described why [the ‘new’] modifications would not be

necessary for loading DOE casks”) (citing PX2137, at 15–17, 45–76 (Supko Written Direct))).

The Government further contends that Plaintiffs arguments are contradictory. Gov’t

10/3/14 Br. at 48. Plaintiffs rely on the court’s findings in System Fuels II that were based on the

fact that the parameters of the DOE casks were not known, but claim damages for “new” issues

since they “ha[ve] now identified the range of possible DOE ‘but for’ world casks, and ha[ve]

determined that certain modifications [they] seek[] would not have been needed for such casks.”

Gov’t 10/3/14 Br. at 48. Therefore, the court should decline to apply collateral estoppel in this

case, because of this “inherent inconsistency.” Gov’t 10/3/14 Br. at 48 (citing Technographs

Printed Circuits, Ltd. v. United States, 372 F.2d 969, 977 (Ct. Cl. 1967) (“Even if all preconditions

are met, collateral estoppel will not apply to a question of law[,] if injustice would result.”)).

In addition, Plaintiffs “ha[ve] changed essential facts by proffering expert testimony about

the parameters of DOE casks to justify its entitlement to costs for so-called ‘new’ modifications.”

Gov’t 10/3/14 Br. at 48–49 (citing PX2137, at 17 (Supko Written Direct) (stating “the general

features (cask weight, cask dimension, and cask loading operations) of a transportation cask design

that plausibly would have been suitable for use by DOE to accept SNF from Grand Gulf in the

non-breach world”)). Because “‘changes in facts essential to a judgment will render collateral

estoppel inapplicable in a subsequent action raising the same issues’” and the court determined

that the unknown parameters of the DOE cask were “essential” in System Fuels II, the court

“should decline to apply collateral estoppel.” Gov’t 10/3/14 Br. at 48–49 (quoting Baby Dolls

Topless Saloons, Inc. v. City of Dallas, 295 F.3d 471, 479 (5th Cir. 2002)).

19

In sum, the Government contends that collateral estoppel does not apply in this case,

because “[n]o casks were loaded during the first round claim period. . . . , [so] the issue of

[Plaintiffs’] actual incurred loading costs was not before the [c]ourt during the first round.” Gov’t

10/3/14 Br. at 49 (citing Arkla, Inc. v. United States, 37 F.3d 621, 624 (Fed. Cir. 1994) (“Collateral

estoppel is only appropriate if . . . the issue to be decided is identical to one decided in the first

action[.]”); Laguna Hermosa Corp. v. United States, 671 F.3d 1284, 1288 (Fed. Cir. 2012)

(holding that collateral estoppel does not apply when the issues are not identical)). In System Fuels

II, the Government sought an offset, but in this case, the Government challenges incurred costs.

Gov’t 10/3/14 Br. at 49–50. The Government’s challenge to these “incurred costs is not analyzed

under the avoided costs rubric of Carolina Power, but instead under the incurred cost analysis set-

forth in Energy Northwest.” Gov’t 10/3/14 Br. at 50 (citing Carolina Power & Light Co. v. United

States, 573 F.3d 1271, 1277 (Fed. Cir. 2009) (“Plaintiffs have not avoided the costs of loading.

Rather, they have merely deferred these costs.”); Energy Nw., 641 F.3d at 1306 (“Carolina Power

presents a separate, if superficially similar, issue.”)). For this reason, the United States Court of

Federal Claims recently distinguished between loading cost offsets from actual incurred loading

costs and determined that collateral estoppel did not apply. See Energy Nw. v. United States, 115

Fed. Cl. 69, 74–76 & n.7 (2014) (“Energy Nw II”). The Energy Nw II court also determined that

“there was no principled basis under the [United States Court of Appeals for the] Federal Circuit’s

holdings to distinguish between incurred loading costs sought by a[] SNF plaintiff, and incurred

plant modification and fuel characterization costs” that must be proven in a “but for” world. Gov’t

10/3/14 Br. at 51 (citing Energy Nw II, 115 Fed. Cl. at 76).

3. The Court’s Resolution.

Collateral estoppel applies when: (1) the issues are “identical” to those litigated in the prior

proceeding; (2) the issues were “actually litigated” in the prior proceeding; (3) the prior “resolution

of those issues was necessary to [the] resulting judgment”; and (4) the plaintiff “was afforded a

full and fair opportunity to litigate its position.” Ammex, Inc., 384 F.3d at 1371; see also

Dana v. E.S. Originals, Inc., 342 F.3d 1320, 1323 (Fed. Cir. 2003) (same).

In this case, the issues are neither “identical,” nor actually litigated in the prior proceeding.

See Energy Nw II, 115 Fed. Cl. at 76 n.7 (“Collateral estoppel does not apply here because the first

two elements—that the issues in the prior proceeding are identical to the issue in the present

proceeding and were litigated in the prior action—are not satisfied. Whereas the issue that was

litigated in [the prior proceeding] was whether [the plaintiff] avoided the costs of loading in the

future, the issue here is what costs [the plaintiff] would have incurred for loading in the non-breach

world, and, thus, whether the damages that [the plaintiff] requests for cask loading were caused by

the breach.”); see also Ammex, Inc., 384 at 1371 (holding that the previously litigated issues must

be “identical” and have been “actually litigated”); Sacramento Mun. Util. Dist. v. United States,

566 F. App’x 985, 993–94 (Fed. Cir. 2014) (“SMUD VIII”) (holding that collateral estoppel did

not apply in a second round SNF case, because there was an intervening change in the law and the

issues were not identical).

For these reasons, the court has determined that collateral estoppel does not apply in this

case, and Plaintiffs’ claims for an additional $15,212,118 must be addressed individually.

20

F. Whether Plaintiffs Are Entitled To Costs Previously Addressed In System

Fuels, Inc. v. United States, 78 Fed. Cl. 769 (2007).

1. Whether Plaintiffs Are Entitled To $66,003 For Engineering Analyses

For The Auxiliary Building.

a. Plaintiffs’ Argument.

Plaintiffs claim $45,768 for a seismic analysis of the auxiliary building at Grand Gulf and

$20,235 for an analysis of the structural adequacy of the 208-foot elevation of the auxiliary

building at Grand Gulf, for a total of $66,003. 7/18/14 Jt. Stip. ¶¶ 6(h), 6(i). These analyses were

“part of the larger civil analysis performed for use of the Holtec system that this [c]ourt previously

considered in Round I.” Pls. 10/3/14 Br. at 39. In addition, “[t]he evidence presented at trial fully

supports Plaintiffs’ position that, absent the need to analyze the specific parameters of the Holtec

casks, Plaintiffs would not have needed to conduct” these seismic and structural analyses. Pls.

10/3/14 Br. at 39; see also Pls. 11/13/14 Reply at 21 (“The seismic analysis was necessitated by

the Certificate of Compliance for storage for the Holtec HI-STORM system and Plaintiffs’ Part 50

facility license” and was “specifically based upon the parameters of the Holtec storage system.”)

(citing 7/21/14 TR at 104–05 (Warren); 7/23/14 TR at 688–89 (Supko)); Pls. 11/13/14 Reply at 22

(stating that the structural analysis was “unique to the Holtec [system]”). Instead, Plaintiffs would

have conducted analyses specific to the DOE casks, not the Holtec casks. Pls. 10/3/14 Br. at 39–

40. Moreover, when DOE performs, Plaintiffs will have to conduct analyses specific to the DOE

casks. Pls. 10/3/14 Br. at 40 (citing 7/21/14 TR at 146 (Warren); PX 489, at § 2.3).

b. The Government’s Argument.

The Government concedes that $66,003 was incurred and supported by adequate

contemporaneous documentation, but contends that these costs would have been incurred even if

DOE performed. 7/18/14 Jt. Stip. ¶¶ 6(h), 6(i); see also Gov’t 10/3/14 Br. at 51 (citing DX1128,

at 18–21 (Brewer Written Direct)); Gov’t 11/13/14 Reply at 26 (same). Plaintiffs’ expert, Ms.

Supko, mistakenly assumes that additional analyses would not have been needed for DOE casks,

because DOE casks are within the dimensions of the updated final safety analysis report

(“UFSAR”). Gov’t 10/3/14 Br. at 51–52 (citing PX2137, at 61–62 (Supko Written Direct); 7/22/14

TR at 668–69 (Supko); DX1128, at 19–20 (Brewer Written Direct)); see also Gov’t 11/13/14

Reply at 26 (same). “If simply falling within the dimensions specified by the USFAR were enough

to avoid the need for further analysis, then the analyses performed by [Plaintiffs] to use the Holtec

cask would, in many instances, have been unnecessary.” Gov’t 10/3/14 Br. at 52 & n.22

(explaining that the analyses did not separate “stack-up” operations and included areas where only

a 125-ton cask would need to be evaluated) (citing DX1128, at 20 (Brewer Written Direct)); see

also Gov’t 11/13/14 Reply at 27 (same).

In contrast, the Government expert’s calculations showed that “the use of the casks

identified by Ms. Supko as suitable for use by DOE would have required additional analysis as

was done to support the Grand Gulf dry storage project,” because it showed loading that exceeded

prior calculations. Gov’t 10/3/14 Br. at 52 (citing DX1128, at 19 (Brewer Written Direct)).

Therefore, these costs would have been incurred if DOE performed and are thus not recoverable.

Gov’t 10/3/14 Br. at 52–53 (citing Energy Nw., 641 F.3d at 1307 (“If a cost would have been

21

incurred even in the non-breach world, it is not recoverable.”)); see also Gov’t 11/13/14 Reply at

26 (same).

c. The Court’s Resolution.

The court previously awarded costs for analyses of the Holtec system, because “the

Government did not proffer any evidence of what type of cask DOE [would] require,” making it

impossible for the Government to establish that Plaintiffs’ costs were unreasonable. System Fuels

II, 78 Fed. Cl. at 802 (awarding $533,323).

In this case, the Certificate of Compliance for the Holtec HI-STORM system required

Plaintiffs to analyze the auxiliary building. 7/21/14 TR at 104 (Warren). Nevertheless, Plaintiffs

acknowledge that they would have had to conduct these same analyses for DOE casks. Pls. 10/3/14

Br. at 39 (“[I]f DOE had performed, Plaintiffs would have conducted a seismic response analysis

specific to the DOE casks (and not Holtec casks).”), 40 (“If DOE had performed, Plaintiffs would

have conducted a structural analysis specific to the loading requirements and weights of a DOE

cask.”). In addition, evidence presented at trial confirmed that Plaintiffs would have needed to

conduct such analyses for DOE casks. DX1128, at 18–20 (Brewer Written Direct).

Consequently, the court cannot award Plaintiffs $66,003 for these engineering analyses,

but only the additional costs of the analyses for the Holtec casks relative to the DOE casks. See

Energy Nw., 641 F.3d at 1306 (“[P]laintiff[s] must prove the extent to which [their] incurred costs

differ from the costs [they] would have incurred in the non-breach world.”). But, Plaintiffs did not

present evidence of the costs of these analyses for DOE casks, and thus did not meet their burden

of proving the costs incurred to analyze the auxiliary building. See System Fuels IV, 666 F.3d at

1312 (“Plaintiffs bear the burden to establish the alleged mitigation costs were caused by the

breach.”) (citing Energy Nw., 641 F.3d at 1307).

For these reasons, the court has determined that Plaintiffs are not entitled to $66,003 to

analyze the auxiliary building.

2. Whether Plaintiffs Are Entitled To $468,903 To Analyze And Reinforce

The Haul Path Outside The Auxiliary Building.

a. Plaintiffs’ Argument.

Plaintiffs claim $468,903 to reinforce of the low profile transporter haul path outside the

auxiliary building at Grand Gulf. 7/18/14 Jt. Stip. ¶ 6(f). This portion of the haul path is used to

transport safety equipment and it had to be analyzed and reinforced, before a Holtec cask is

transported over it. DX1128, at 22 (Brewer Written Direct); 7/21/14 TR at 100 (Warren).

Plaintiffs add that “the Low Profile Transporter is unique to the Holtec cask system and the

modifications to the Low Profile Transporter haul path were designed specifically for the Holtec

System.” Pls. 10/3/14 Br. at 37 (citing 7/21/14 TR at 101 (Warren); DX1128, at 22 (Brewer

Written Direct)). “If DOE had performed, Plaintiffs would not have needed to purchase or use the

Low Profile Transporter, and thus, reinforcement of the Low Profile Transporter haul path would

not have been required.” Pls. 10/3/14 Br. at 37; Pls. 11/13/14 Reply at 22 (same). Instead,

Plaintiffs would have “delivered its cask . . . on a vehicle capable of transport on public roads.”

Pls. 11/13/14 Reply at 22 (citing PX2137, at 70 (Supko Written Direct); 7/21/14 TR at 213–14

22

(Ellis)). Therefore, in a non-breach world, “no modifications to the plant site would have been

needed. . . . [and thus t]hese site improvement costs should be allowed.” Pls. 11/13/14 Reply at

22 (citing PX2137, at 72 (Supko Written Direct)).

b. The Government’s Response.

The Government concedes that $468,903 was incurred and supported by adequate

contemporaneous documentation, but contends that the costs to analyze and reinforce the auxiliary

building would have been incurred, if DOE performed. 7/18/14 Jt. Stip. ¶ 6(f); see also Gov’t

10/3/14 Br. at 53–54. This analysis would have included not only the weight of the rail

transportation cask, but also “the weight and axle loading of the vehicle used to transport such a

cask.” Gov’t 10/3/14 Br. at 53 (citing DX1128, at 22–24 (Brewer Written Direct)); see also Gov’t

11/13/14 Reply at 28–29 (same).

Plaintiffs’ “arguments about why this work would not have been necessary with DOE

performance are not based upon engineering analyses, but instead, conclusory statements by Ms.

Supko.” Gov’t 11/13/14 Reply at 28 (citing Pls. 10/3/14 Br. at 13–14)). Ms. Supko “did not

address the haul path issue in her testimony because . . . the [c]ourt addressed charges incurred in

the prior claim period related to analyzing the haul path” in System Fuels II, 78 Fed. Cl. at 803.

Gov’t 10/3/14 Br. at 53 (citing PX2137, at 75–76 (Supko Written Direct)). In fact, Ms. Supko

agreed that “[Plaintiffs] would have performed an analysis of the haul path prior to loading DOE

casks” and that “it would likely be [Plaintiffs’] responsibility to improve or modify the roads on

their site if necessary.” Gov’t 53, 54 (citing 7/22/14 TR at 694–96 (Supko)); see also Gov’t

11/13/14 Reply at 28 (same). Mr. Warren was not asked to evaluate whether haul path

modifications would be needed. Gov’t 10/3/14 Br. at 54 (citing 7/21/14 TR at 139–40 (Warren)).

In sum, “[b]ecause [Plaintiffs] cannot show that [they] would not have performed these same

analyses and the reinforcement to handle a DOE transportation cask, the costs for this work is

unrecoverable against the Government.” Gov’t 10/3/14 Br. at 54 (citing Energy Nw., 641 F.3d at

1307 (“If a cost would have been incurred even in the non-breach world, it is not recoverable.”)).

c. The Court’s Resolution.

The court previously awarded Plaintiffs costs to analyze and reinforce the haul path outside

the auxiliary building, because the Government failed to show that these costs were unreasonable.

See System Fuels II, 78 Fed. Cl. at 804–05 (awarding $2,670,203).

In this case, Plaintiffs acknowledge that they “would have performed an analysis of the

haul path prior to loading to DOE casks to ensure that the weight of th[e] transporter . . . could

traverse the site roads at Grand Gulf.” 7/22/14 TR at 695 (Supko). Therefore, the analysis would

have been conducted in the non-breach world. But, Plaintiffs also have demonstrated that they

would have delivered DOE casks using a vehicle on public roads, instead of modifying the haul

path. PX2137, at 71–72 (Supko Written Direct); see also 7/21/14 TR at 213–14 (Ellis). Although

the Government contends that transport by vehicle may have required modifications to the roads

at Plaintiffs’ expense, this was not clearly established at trial. 7/22/14 TR at 695–96 (Supko)

(stating that there was “some uncertainty” as to whether additional road work would be necessary

and whether Plaintiffs were responsible for such modifications). Nevertheless, Plaintiffs have

23

shown entitlement to the costs of the haul path modifications, which would not have been required

if DOE performed, but not to the costs of the analysis.

The haul path modifications cost $460,978. 3/6/15 Chron. at 2 ($160,503 for Stone &

Webster, $179,586 for Entergy Materials, and $120,889 for Rentals for the haul path

modification); see also DX1129, at Att. 7-c (Peterson Written Direct); PX848 (Stone & Webster

Contract) (describing Stone & Webster’s work as the “[c]onstruction of the haul path”) (emphasis

added). The haul path analysis cost $7,925. 3/6/15 Chron. at 2 (listing $7,925 in Enercon charges);

see also PX477 (Enercon Contract) (describing Enercon’s work as “Auxiliary Building Train Bay

Analysis & Design”) (emphasis added).

For these reasons, the court has determined that Plaintiffs are entitled to $460,978 for haul

path modifications, but not to $7,925 for the haul path analysis.

3. Whether Plaintiffs Are Entitled To $95,635 To Relocate The Horizontal

Fuel Transfer System Insert Storage Rack And To An Unidentified

Amount To Design, Fabricate, And Install A Lift Yoke Stand.

a. Plaintiffs’ Argument.

Plaintiffs claim $95,635 to remove the original HFTS insert storage rack and to install new

HFTS insert storage racks. 7/18/14 Jt. Stip. ¶ 6(g). In addition, Plaintiffs claim an unidentified

amount that is included with the other HFTS costs to design, fabricate, and install a lift yoke stand12

at Grand Gulf. Pls. 10/3/14 Br. at 16–17; see also Gov’t 10/3/14 Br. at 38 n.15.

As to the HFTS insert storage rack, “[t]he evidence presented at trial demonstrated that it

was necessary to remove the original HFTS storage rack and install two new HFTS insert storage

racks in the cask loading pit because of the specific diameter of the Holtec HI-TRAC cask.” Pls.

10/3/14 Br. at 38 (citing 7/21/14 TR at 103 (Warren)); see also Pls. 11/13/14 Reply at 23 (same).

Because a DOE cask would have a smaller diameter than the [Holtec] transfer cask, “removing

and replacing the HFTS racks would not have been necessary.” Pls. 10/3/14 Br. at 38; see also

Pls. 11/13/14 Reply at 23 (same) (citing 7/22/14 TR at 713 (Supko)). Although the Government’s

witness, Mr. Brewer, stated that such modifications would not have been necessary with DOE

performance, he “conceded that the HFTS work was reasonable. . . . [but it] would not have been

‘absolutely necessary’ to do this work with DOE performance.” Pls. 10/3/14 Br. at 38 (citing

7/21/14 TR at 964–67 (Brewer)); see also Pls. 11/13/14 Reply at 23 (same). Because Plaintiffs

used a Holtec system, they “needed to install new HFTS insert storage racks in the cask loading

pit.” Pls. 10/3/14 Br. at 38 (citing 7/21/14 TR at 964 (Brewer)).

12

A cask lift yoke stand enables a cask to be lifted and moved by crane by allowing the

hook on the SNF cask crane to connect with cast lifting trunnions built into the SNF cask. DX1128,

at 15 (Brewer Written Direct). A cask lift yoke stand orients the cask lift yoke when lifting and

holds that lift yoke when not in use. DX1128, at 15 (Brewer Written Direct). Lift yoke stands are

designed specifically for the lift yoke and the nuclear power plant. DX1128, 15–16 (Brewer

Written Direct).

24

As to the lift yoke stand, Plaintiffs add that “[t]he evidence presented at trial established

that the lift yoke stand was specifically designed for the dimensions and centers of gravity of the

Holtec lift yoke, and that the lift yoke stand will not necessarily work with another cask system.”

Pls. 10/3/14 Br. at 40 (citing 7/21/14 TR at 108 (Warren); 7/23/14 TR at 951 (Brewer)); see also

Pls. 11/13/14 Reply at 18 (same). Because DOE would have delivered and removed the lift yoke,

if it performed, Plaintiffs would not have purchased or stored a DOE cask lift yoke at Grand Gulf.

Pls. 10/3/14 Br. at 41 (citing PX2137, at 69 (Supko Written Direct)); see also Pls. 11/13/14 Reply

at 18 (same). But, “even if a lift yoke stand is required for the DOE system, a new stand will likely

be needed for the DOE lift yoke, as the stands are custom designed for the lift yokes.” Pls. 11/13/14

Reply at 18 (citing 7/23/14 TR at 951 (Brewer) (testifying that he did not know whether the lift

yoke stand used with Plaintiffs’ Holtec system will work with a DOE lift yoke)).

b. The Government’s Response.

The Government concedes that $95,635 to remove the original HFTS insert storage rack

and to install new HFTS insert storage racks was incurred and supported by adequate

contemporaneous documentation, but contends that this cost would have been incurred, if DOE

performed. 7/18/14 Jt. Stip. ¶ 6(g). In addition, the Government challenges Plaintiffs’ lift yoke

stand costs, because they would have been incurred, if DOE performed. Gov’t 10/3/14 Br. at 38–

40.

As to the HFTS insert storage rack, Plaintiffs “determined that loading the Holtec transfer

cask with the originally configured storage rack was not prudent . . . . even though, as a technical

matter, both the Holtec transfer cask and the rack would fit in the cask storage pool at the same

time.” Gov’t 10/3/14 Br. at 55 (citing DX1128, at 26–27 (Brewer Written Direct); 7/21/14 TR at

197–98 (Ellis)). This is so because utilizing “two separate storage racks was the safest option.”

Gov’t 10/3/14 Br. at 55 (citing DX1128, at 26–27 (Brewer Written Direct); 7/21/14 TR at 197–98

(Ellis)). But, “this same incentive to create additional safety margin for loading a DOE cask would

have existed in a ‘but for’ world,” and “there is no rational explanation why [Plaintiffs] would not

have performed the same HFTS modification and relocation to create a safety margin when

handling a DOE cask.” Gov’t 10/3/14 Br. at 55 (citing DX1128, at 28 (Brewer Written Direct));

see also Gov’t 11/13/14 Reply at 30 (same). Moreover, Plaintiffs’ witnesses, Ms. Supko and Mr.

Warren, did not demonstrate that these modifications would not have occurred in a “but for” world,

making these costs unrecoverable. Gov’t 10/3/14 Br. at 55–56 (citing 7/21/14 TR at 124–25

(Warren)); see also Gov’t 11/13/14 Reply at 29–30 (stating that Ms. Supko’s statements are “not

supported by any real analysis” and that the same safety incentives would have existed in the “but

for” world); Gov’t 11/13/14 Reply at 30 (“Because [Plaintiffs] did not show that the costs for this

HFTS relocation would not have been incurred with DOE performance, the costs are

unrecoverable.”); Energy Nw., 641 F.3d at 1307 (“If a cost would have been incurred even in a

non-breach world, it is not recoverable.”).13

13

The Government characterizes Plaintiffs’ arguments regarding $95,635 for HFTS

relocation costs as “a prime example of contradictory positions taken by [Plaintiffs] between the

two cases.” Gov’t 11/13/14 Reply at 29 (comparing System Fuels II, 78 Fed. Cl. at 803

(determining that Plaintiffs were entitled to HFTS costs, because the Government did not identify

25

As to the lift yoke stand, Plaintiffs “would have needed to install a lift yoke stand . . . to

handle and temporarily store a DOE-supplied lift yoke.” Gov’t 10/3/14 Br. at 38 (citing DX1128,

at 15–16 (Brewer Written Direct)). Ms. Supko “confuse[d] the issue,” because “[i]t is not a matter

of needing to store the lift yoke at the plant between loading campaigns, but rather, at various times

during the loading of a cask[,] a crane will be needed for other purposes and the lift yoke will

need[] to be removed and restrained during those intervals.” Gov’t 10/3/14 Br. at 38–39 (citing

7/23/14 TR at 949 (Brewer)); see also Gov’t 11/13/14 Reply at 21 (same). In addition, Mr. Warren

and Mr. Ellis did not evaluate whether the stand was required for a DOE-supplied lift yoke, nor

were they aware of alternative storage methods for the lift yoke. Gov’t 10/3/14 Br. at 39 (citing

7/21/14 TR at 126 (Warren); 7/21/14 TR at 201 (Ellis)); see also Gov’t 11/13/14 Reply at 21–22

(same). Although Plaintiffs argue that a different lift yoke stand likely would be necessary in the

future, “[s]peculation about future costs does not change the fact that [Plaintiffs] would have

incurred costs to procure a lift yoke stand had DOE timely performed.” Gov’t 10/3/14 Br. at 39

(citing Ind. Mich. Power Co., 422 F.3d at 1377 (“If the breach of an entire contract is only partial,

the plaintiff can recover only such damages as he or she has sustained, leaving prospective

damages to a later suit in the event of further breaches.”) (internal quotation and citation omitted)).

As such, Plaintiffs can recover costs in the future, only if they establish that they were required to

modify the existing stand or purchase a new one. Gov’t 10/3/14 Br. at 40.14

c. The Court’s Resolution.

The court previously awarded costs for the relocation of the HFTS insert storage rack,

because the Government could not identify the dimensions of the casks that DOE would have

provided. See System Fuels II, 78 Fed. Cl. at 803 (awarding $353,396). In this case, however,

both parties proffered evidence that the Holtec casks are significantly larger than DOE casks:

the dimensions of a DOE cask) and Pls. 10/3/14 Br. at 14 (stating that the DOE cask would have

a smaller diameter)).

14

The Government adds that Plaintiffs “mistakenly include[] this new activity . . . with

work addressed by the [c]ourt in the first round case.” Gov’t 11/13/14 Reply at 21.

26

PX2137, at 62 (Supko Written Direct); see also DX1024, at SERI-0000132223 (showing the DOE

cask diameter as eight feet, eight inches); DX1128, at 12 (Brewer Written Direct) (referring to the

“approximately [eight]-foot diameter Holtec transfer cask”); 7/23/14 TR at 966 (Brewer).

As such, Plaintiffs needed to reconfigure the HFTS insert storage rack for safety reasons.

7/23/14 TR at 964 (Brewer); see also 7/21/14 TR at 197–98 (Ellis). Although the Government

contends that these safety reasons would have existed even with DOE casks, the evidence

established that the larger Holtec casks presented a greater safety risk. 7/21/14 TR at 197–98

(Ellis); see also 7/23/14 TR at 964–67 (Brewer); 7/22/14 TR at 713–14 (Supko).

As to the lift yoke stand, Plaintiffs contend that the costs incurred to fabricate the lift yoke

stand were specific to the Holtec casks, but this is not the relevant inquiry. Instead, the court must

determine whether Plaintiffs would have fabricated the stand, if DOE performed, and, if so,

compare the relative costs of the fabrication for Holtec versus DOE casks. See Energy Nw., 641

F.3d at 1306 (“[P]laintiff[s] must prove the extent to which [their] incurred costs differ from the

costs [they] would have incurred in the non-breach world.”). In this case, the parties proffered

conflicting evidence concerning whether Plaintiffs would have constructed the stand, if DOE

performed. PX2137, at 69 (Supko Written Direct); DX1128, at 15–16 (Brewer Written Direct);

7/21/14 TR at 107–108, 126 (Warren); 7/23/14 TR at 951 (Brewer). Because this evidence was in

equipoise, Plaintiffs did not meet their burden of establishing these costs. PX2137, at 69 (Supko

Written Direct); DX1128, at 15–16 (Brewer Written Direct); see also System Fuels IV, 666 F.3d

at 1312 (“Plaintiffs bear the burden to establish the alleged mitigation costs were caused by the

breach.”) (citing Energy Nw., 641 F.3d at 1307). Plaintiffs also did not present evidence of the

costs of the lift yoke stand construction, if DOE performed.

In addition, Plaintiffs did not separately identify the costs incurred to design, fabricate, and

install the lift yoke stand, but instead, aggregated the lift yoke stand costs with the HFTS insert

storage rack costs. Because Plaintiffs did not meet their burden of proving the lift yoke stand costs

or separately identify the amount of these costs, Plaintiffs cannot recover $95,635 to relocate the

HFTS insert storage rack, which included unspecified lift yoke stand costs. See Energy Nw., 641

F.3d at 1306 (“[P]laintiff[s] must prove the extent to which [their] incurred costs differ from the

costs [they] would have incurred in the non-breach world.”).

27

For these reasons, the court has determined that Plaintiffs are not entitled to $95,635 to

relocate the HFTS insert storage rack, nor to the unidentified amount to design, fabricate, and

install a lift yoke stand.

4. Whether Plaintiffs Are Entitled To $490,559 For Electrical System

Modifications To The Auxiliary Building.

a. Plaintiffs’ Argument.

Plaintiffs claim $161,383 in Enercon charges, materials charges, rentals, and subcontracts,

and $192,513 in associated Stone & Webster charges, totaling $353,896, for electrical system

modifications for the auxiliary building at Grand Gulf. 7/18/14 Jt. Stip. ¶ 6(e). Plaintiffs state

they “provided adequate documentation to support that Plaintiffs incurred $192,513 in Stone &

Webster’s work on the electrical systems modifications.” Pls. 10/3/14 Br. at 36 (citing PX1627–

33, 1636–38, 1641, 1643–46, 1652–55, 1657–65, 1668–72 (Summary And Accounting Report on

Stone & Webster Charges)). The evidence at trial demonstrated that the additional electrical

systems were customized to the Holtec equipment. Pls. 10/3/14 Br. at 36 (citing 7/21/14 TR at

98–99 (Warren)); see also Pls. 11/13/14 Reply at 23 (same). Plaintiffs would not have needed to

add electrical systems if DOE provided casks with bolted closures, so “the electrical systems

modifications would not have been necessary” if DOE performed. Pls. 10/3/14 Br. at 36 (citing

PX2137, at 68–69 (Supko Written Direct); PX2135, at 8); see also Pls. 11/13/14 Reply at 23–24

(same).

b. The Government’s Response.

The Government concedes that Plaintiffs incurred $24,655 in Enercon charges, $127,229

in materials charges, and $9,499 in charges for rentals and subcontracts, totaling $161,383, and

that these costs are supported by adequate contemporaneous documentation. 7/18/14 Jt. Stip.

¶ 6(e). But, the $161,383 for electrical system modifications, as well as associated Stone &

Webster charges of $329,176, would have been incurred, if DOE performed. 7/18/14 Jt. Stip.

¶ 6(e); see also DX1129, at Att. 7-b (Peterson Written Direct).

The Government argues that “[e]lectrical power was added throughout the auxiliary

building for a variety of purposes,” many of which are “common to all SNF casks.” Gov’t 10/3/14

Br. at 56 (citing DX1128, at 28 (Brewer Written Direct); 7/21/14 TR at 98 (Warren); 7/21/14 TR

at 192–94 (Ellis)); see also Gov’t 11/13/14 Reply at 31 (same). Even DOE-supplied bolted casks

“require[] power for draining, drying, decontaminating, and bolting purposes,” and Plaintiffs “did

not show that [they] would not have needed to add additional electrical power to load a DOE-

supplied cask.” Gov’t 10/3/14 Br. at 56–57 (citing DX1128, at 28–29 (Brewer Written Direct));

see also Gov’t 11/13/14 Reply at 31 (same).

In addition, Plaintiffs’ witnesses, Mr. Warren and Mr. Ellis, did not “analyze whether

electrical modifications similar to those performed in the actual world would have been needed to

load SNF to DOE.” Gov’t 10/3/14 Br. at 57 (citing 7/21/14 TR at 120–22 (Warren), 195 (Ellis)).

Mr. Warren did not testify that the modifications were required if DOE performed, but instead,

“stated the truism that power for a welding system would not be needed if [Plaintiffs were] not

welding casks.” Gov’t 11/13/14 Reply at 31 (citing 7/21/14 TR at 98–99 (Warren)). Moreover,

28

Mr. Warren also was not asked whether these modifications would have been required in a “but

for” world and “did not believe anyone [working for Plaintiffs] knows whether similar

modifications would have been made to load DOE.” Gov’t 11/13/14 Br. at 31 (citing 7/21/14 TR

at 122 (Warren)).

Therefore, Plaintiffs are not entitled to recover any costs incurred for electrical

modifications to the auxiliary building. Gov’t 10/3/14 Br. at 57 (citing Energy Nw., 641 F.3d at

1307 (holding that SNF plaintiffs must show that the same costs would not have been incurred in

a “but for” world)); see also Gov’t 11/13/14 Reply at 32 (same).

c. The Court’s Resolution.

The court previously awarded costs for the evaluation and implementation of electrical

service at the auxiliary building, because the Government failed to show that the costs were

unreasonable. See System Fuels II, 78 Fed. Cl. at 802–03 (awarding $381,401).

In this case, additional electrical system modifications were required to perform work

irrespective of whether Plaintiffs used Holtec or DOE casks. DX1128, at 28 (Brewer Written

Direct); see also 7/21/14 TR at 192–94 (Ellis). Plaintiffs’ witnesses did not address whether the

additional electrical system modifications were required to load DOE casks. 7/21/14 TR at 120

(Warren); see also 7/21/14 TR at 195 (Ellis). Although Plaintiffs claim that the additional

electrical system modifications were required to use the Holtec cask system, this is not the relevant

inquiry. Instead, the court must determine whether Plaintiffs would have required additional

electrical system modifications if DOE performed, and if so, compare the relative costs between

Holtec versus DOE casks. See Energy Nw., 641 F.3d at 1306 (“[P]laintiff[s] must prove the extent

to which [their] incurred costs differ from the costs [they] would have incurred in the non-breach

world.”). But, Plaintiffs did not proffer any evidence of the costs of the additional electrical system

modifications specific to DOE casks, and did not meet their burden of proving these costs would

have been incurred, but for the breach. See System Fuels IV, 666 F.3d at 1312 (“Plaintiffs bear the

burden to establish the alleged mitigation costs were caused by the breach.”) (citing Energy Nw.,

641 F.3d at 1307).15

In Alabama Power, the United States Court of Federal Claims determined that DOE’s

breach required certain electrical modifications, but the plaintiff could not recover for them,

because the plaintiff “did not submit enough evidence for the court to assign a reasonable value.”

2014 WL 7465683, at *20–*21. In this case, based on the evidence presented at trial, the court

has determined that Plaintiffs did not demonstrate that they would have incurred these electrical

costs in the non-breach world. See Energy Nw., 641 F.3d at 1306 (“[P]laintiff[s] must prove the

extent to which [their] incurred costs differ from the costs [they] would have incurred in the non-

breach world.”).

15

Plaintiffs contend that the associated Stone & Webster charges total $192,513, but the

Government contends that they total $329,176. 7/18/14 Jt. Stip. ¶ 6(e). At trial, the evidence

supported Stone & Webster charges of $329,176. DX1129, at Att. 7-b-1 n.2. But, as discussed

herein, Plaintiffs failed to establish these costs would have been incurred in the non-breach world.

29

For these reasons, the court has determined that Plaintiffs are not entitled to $161,383 for

Enercon charges, materials charges, rentals, and subcontracts, nor to $329,176 for associated Stone

& Webster charges.

5. Whether Plaintiffs Are Entitled To $4,706,387 To Prepare And

Package Spent Nuclear Fuel Into Dry Storage Casks.

a. Plaintiffs’ Argument.

Plaintiffs claim $4,706,38716 to prepare and package SNF to dry storage casks at Grand

Gulf. DX1129, at 26 & n.76 (Peterson Written Direct); see also DX1129, at Att. 11 (Peterson

Written Direct).

Part 71 governs the “Packaging and Transportation of Radioactive Material.” 10 C.F.R.

Part 71. Although the Holtec canisters are licensed for transport under Part 71, they are not

licensed for transportation of “high burnup fuel.” Pls. 10/3/14 Br. at 43–44 (citing 7/22/14 TR at

723 (Supko); 7/23/14 TR at 932–33 (Brewer)). Therefore, “that fuel, which [Plaintiffs] ha[ve]

loaded or will load into Holtec casks, is not even transportable under the Holtec transportation

cask’s Certificate of Compliance.” Pls. 10/3/14 Br. at 44 (citing 7/22/14 TR at 723–24 (Supko)).

That will require Plaintiffs to prepare and package SNF, if and when DOE performs, unless the

NRC regulations are changed. Pls. 10/3/14 Br. at 44. In addition, “there is no guarantee that the

NRC will continue to renew the Certificates of Compliance through the time that DOE commences

performance.” Pls. 10/3/14 Br. at 45 (citing 7/23/14 TR at 933 (Brewer)); see also Pls. 11/13/14

Reply at 25 (same). For these reasons, Plaintiffs may be required to prepare and repackage the

canistered fuel in the future. Pls. 10/3/14 Br. at 45.

Although the Government’s expert indicates that DOE will accept the loaded dual-use

canisters, “DOE’s position is that it will not accept canistered SNF, such as the SNF that is in dry

storage at Grand Gulf, under the Standard Contract unless there is an amendment to the Standard

Contract, the terms of which DOE has not defined.” Pls. 10/3/14 Br. at 43 (citing DX1128, at 40;

7/22/14 TR at 731, 738 (Zabransky); 7/23/14 TR at 933–36 (Brewer); PX2136, at 14); see also

Pls. 11/13/14 Reply at 24 (same). Plaintiffs argue they established that the canistered SNF does

not meet the requirements in Part 71, and the Government has admitted that the canistered SNF

may not be transportable. Pls. 10/3/14 Br. at 43 (citing PX2136, at 14). Therefore, the

Government’s proposed $4,706,387 offsets “are, at best, highly speculative” and should be

rejected. Pls. 10/3/14 Br. at 45.

In addition, Plaintiffs argue that the Government expert’s challenge to these costs is

“unsupportable for several reasons.” Pls. 10/3/14 Br. at 41. First, the United States Court of

Federal Claims and United States Court of Appeals for the Federal Circuit have “rejected the

principle that cask loading costs may be treated as an offset in SNF damages cases, finding that

such costs are speculative, and ‘deferred costs rather than avoided costs.’” Pls. 10/3/14 Br. at 41

16

This $4,706,387 amount does not include associated payroll loader costs recorded to

Resource Codes 19 and 60, in the amount of $51,260. DX 1129, at Att. 11 (Peterson Written

Direct). If these payroll loader costs were included, the total amount for cask loading would be

$4,757,647. DX1129, at Att. 11 (Peterson Written Direct).

30

(quoting System Fuels II, 78 Fed. Cl. at 797); see also Pls. 10/3/14 Br. at 41–42 (same) (citing

SMUD VIII, 566 F. App’x 985, 997 (Fed. Cir. 2014) (holding that there can be no cask loading

offsets in partial breach cases); Carolina Power & Light Co., 573 F.3d at 1277 (considering and

rejecting the Government’s claim for cask loading offsets); Sacramento Mun. Util. Dist. v. United

States, 70 Fed. Cl. 332, 372 (2006) (“SMUD III”), affirmed in part, rev’d in part, 283 F. App’x

766 (Fed. Cir. 2008) (holding that, because “DOE and [the plaintiff] both contemplate that DOE

will still perform under the Standard Contract at some future date, any benefit to [the plaintiff],

because of delayed loading costs, would be entirely speculative”); Ind. Mich. Power Co., 422 F.3d

at 1373 (“[R]ecovery for speculative damages is precluded.”)); see also Pls. 11/13/14 Reply at 24

(same).

Second, “the Government’s experts fail to follow their own stated methodology of properly

identifying and calculating but-for costs and netting them against actual costs,” but “simply

propose to disallow the actual costs for loading Holtec containers on the completely unsupported

premise that these costs are equivalent to the costs for loading an unidentified DOE container.”

Pls. 10/3/14 Br. at 42 (citing S. Nuclear Operating Co. v. United States, 637 F.3d 1297, 1304 (Fed.

Cir. 2011) (“Plaintiffs cannot be expected to brainstorm every possible cost they would have saved

in the non-breach world. Hence a defendant must move forward by pointing out the costs it

believes the plaintiff avoided because of its breach.”)). Loading and storing the welded Holtec

casks is more expensive than the bolted DOE casks. 7/23/14 TR at 905–18 (Brewer); see also Pls.

10/3/14 Br. at 42 (citing PX2135, at 8); Pls. 11/13/14 Reply at 25 (explaining the increased costs

of welded versus bolted casks).

b. The Government’s Response.17

The Government responds that $4,706,387 would have been incurred by Plaintiffs, even if

DOE performed. DX1129, at Att. 11 (Peterson Written Direct). At trial, the “evidence showed

that [Plaintiffs] procured a dual-purpose cask system that included transportable canisters so that

the canisters containing the SNF could be delivered directly to DOE without any repackaging or

reloading of individual spent fuel assemblies.” Gov’t 10/3/14 Br. at 57 (citing DX1128, at 32–38

(Brewer Written Direct); DX1006, at KRG-GGII004361 (2000 investment proposal); DX1077, at

EGS-0000046279 (2009 investment proposal)); see also Gov’t 11/13/14 Reply at 32 (same).

Therefore, these costs are not recoverable. Gov’t 10/3/14 Br. at 59 (citing Energy Nw., 641 F.3d

at 1306) (stating that costs incurred must be compared to the non-breach world); see also Gov’t

17

On January 23, 2015, the Government filed a Notice, arguing that Alabama Power

precludes Plaintiffs from recovering the costs to prepare and package SNF. Gov’t 1/23/15 Notice

at 1; see also Ala. Power Co., 2014 WL 7465683, at *12. Plaintiffs respond that “the factual basis

for the [c]ourt’s determination differs from the facts in the instant case,” because Plaintiffs

“demonstrated that there would be a cost difference in loading the DOE-supplied transportation

cask as compared to the Holtec storage cask.” Pls. 2/5/15 Resp. at 1, 2. In addition, “[i]t would

be unfair and improper” to deny Plaintiffs damages, as Plaintiffs later will be required to repackage

the fuel for transport. Pls. 2/5/15 Resp. at 2. The Government replies that Plaintiffs’ response

regarding the factual dissimilarities is “demonstrably wrong” and that Plaintiffs “cannot simply

argue that they would have incurred zero loading costs with DOE performance.” Gov’t 2/11/15

Reply at 3 (emphasis in original).

31

11/13/14 Reply at 33 (same) (citing Yankee Atomic, 536 F.3d at 1273 (“Without record evidence

about the [plaintiffs’] condition with full Government performance, the Court of Federal Claims

could not accurately assess the [plaintiffs’] damages.”)).

The Government adds that DOE has offered to discuss a proposed amendment to Part 71

and has acted in good faith to find a solution. Gov’t 10/3/14 Br. at 58 (citing 7/24/14 TR at 1047–

49 (Zabransky)); see also 7/24/14 TR at 1044–45 (Zabransky) (“It makes no sense to open up the

canisters and reload the SNF into another cask if you do not need to do so, because of the risk

involved in such an activity.”). Finally, the Government also argues that Plaintiffs mischaracterize

the Government’s challenge as seeking an offset, when it actually challenges whether the costs

would have been occurred in the non-breach world. Gov’t 10/3/14 Br. at 59; see also Gov’t

11/13/14 Reply at 33.

c. The Court’s Resolution.

The court previously addressed the costs to prepare and package SNF in dry storage casks.

See System Fuels II, 78 Fed. Cl. at 797 (“[C]ask loading costs are more accurately characterized

as deferred costs rather than avoided costs. Therefore, if and when DOE performs, these costs will

be incurred, and may be offset later with ‘reasonable certainty.’”).

In this case, Plaintiffs have demonstrated that preparing and packaging SNF in the welded

Holtec casks is more expensive than the bolted DOE casks. 7/23/14 TR at 905–18 (Brewer); see

also PX2135, at 8. But, Plaintiffs failed to establish the projected costs of preparing and packaging

SNF for dry storage in DOE casks. As such, they did not meet their burden of proof. See System

Fuels IV, 666 F.3d at 1312 (“Plaintiffs bear the burden to establish the alleged mitigation costs

were caused by the breach.”) (citing Energy Nw., 641 F.3d at 1307). Moreover, Plaintiffs

acknowledged that it would have incurred these costs, if DOE performed. Pls. 2/5/15 Resp. at 2

(stating that Plaintiffs would have incurred costs while loading DOE casks, but at a “lesser

expense”). In addition, the court may not consider the possible future costs Plaintiffs may incur

to repackage the SNF in DOE casks, if and when DOE performs. See Ind. Mich. Power Co., 422

F.3d at 1377 (“If the breach of an entire contract is only partial, the plaintiff can recover only such

damages as he or she has sustained, leaving prospective damages to a later suit in the event of

further breaches.”) (internal quotation, citation, and emphasis omitted).

For these reasons, the court has determined that Plaintiffs are not entitled to $4,706,387 to

prepare and package SNF for dry storage.

6. Whether Plaintiffs Are Entitled To $344,863 For Payroll Loaders.

a. Plaintiffs’ Argument.

The parties’ July 18, 2014 Joint Stipulation states: “The parties stipulate that if a claimed

damages item is recoverable then the materials loader and capital suspense loader, if any,

applicable to that item is recoverable as well. Likewise, the parties stipulate that if a claimed

damages item is unrecoverable then the applicable materials loader and capital suspense loader, if

any, is also unrecoverable.” 7/18/14 Jt. Stip. ¶ 5. Therefore, Plaintiffs argue that “[t]he evidence

presented at trial demonstrated that there is a sufficient nexus between the $344,863 in payroll

loaders that the Government now challenges and the internal labor costs incurred to mitigate the

32

Government’s breach.” Pls. 10/3/14 Br. at 49; see also Pls. 11/13/14 Reply at 26—27 (same)

(citing 7/23/14 TR at 770 (Barras)).

At trial, Ms. Barras, a licensed Certified Public Accountant, testified that Plaintiffs’ payroll

loaders conceptually are “the same as the materials and capital suspense loaders that the [United

States Court of Appeals for the] Federal Circuit has determined are recoverable as a matter of law.”

Pls. 10/3/14 Br. at 49 (citing System Fuels IV, 666 F.3d at 1312 (holding that Plaintiffs may recover

“capital suspense loader” overheard costs incurred for mitigation-related work consistent with

Generally Accepted Account Principles (“GAAP”)); see also Pls. 11/13/14 Reply at 26 (“[T]he

payroll loaders costs captured by Resource Code 19 may reflect prior period costs, but that is fully

consistent with GAAP and rules promulgated by the Federal Energy Regulatory Commission

(‘FERC’) and the Financial Accounting Standards Board (‘FASB’).”) (citing PX2138, at 22

(Metcalfe Written Direct); 7/23/14 TR at 763 (Barras)).

In sum, Plaintiffs contend that the Government is not entitled “to be treated more favorably

as regards payroll loaders than the other capital projects to which such loaders are allocated on a

pro rata basis in accordance with GAAP,” so that Plaintiffs’ “claim for mitigation costs are proper

components of economic damage that should be awarded to Plaintiffs in their entirety.” Pls.

10/3/14 Br. at 49, 50 (citing PX 2138, at 22).

b. The Government’s Response.

The Government responds the $336,040 in costs allocated to Resource Code 19 and $8,823

in costs allocated to Resource Code 60 may not be recovered by Plaintiffs. 7/18/14 Jt. Stip. ¶ 6(l)–

(m); see also Gov’t 10/3/14 Br. at 60.

As to Resource Code 19, the court previously found that “an unknown portion of those

costs are attributable to retired employees” and “include[] costs that were incurred prior to any dry

storage activities at Grand Gulf, including costs associated with personnel who retired from Grand

Gulf prior to dry storage activities.” Gov’t 10/3/14 Br. at 60 (citing System Fuels II, 78 Fed. Cl.

at 799 (stating that “Plaintiffs did not present any evidence as to what portion of the $71,959 relates

to the costs associated with retired employees” and reducing the damage award in that amount));

Gov’t 10/3/14 Br. at 61 (citing DX1129, at 14–16 (Peterson Written Direct); 7/23/14 TR at 800–

02 (Barras)); see also Gov’t 11/13/14 Reply at 36, 38 (same). Likewise, in this case, the cost of

retired employees “cannot be segregated from the costs recorded to active employees” and can

“fluctuate based upon factors unrelated to DOE’s performance.” Gov’t 10/3/14 Br. at 61 (citing

DX1129, at 15 (Peterson Written Direct); 7/23/14 TR at 800–02 (Barras)); see also Gov’t 11/13/14

Reply at 36–38 (citing Energy Nw., 641 F.3d at 1312–13). Moreover, “[b]ecause these transition

obligation costs will no longer be incurred in the future, the types of costs allocated in the future

will not be the same as they are now.” Gov’t 11/13/14 Reply at 37 (rebutting 7/23/14 TR at 765,

821–822 (Barras) (testifying that the Resource Code 19 costs may be the same as those allocated

in twenty years)). Therefore, the court should find the costs associated with Resource Code 19

unrecoverable. Gov’t 10/3/14 Br. at 61.

As to Resource Code 60, this includes stock option costs that are only awarded to highly

compensated employees. Gov’t 10/3/14 Br. at 61 (citing DX1129, at 15–16 (Peterson Written

Direct); 7/23/14 TR at 761, 809–11 (Barras)); see also Gov’t 11/13/14 Reply at 38 (same). When

33

the stock options are issued, “[t]he costs associated with the previously issued and potentially

unexercised stock options are included within the loader allocation.” Gov’t 10/3/14 Br. at 62

(citing 7/23/14 TR at 809 (Barras)). Consequently, Plaintiffs “did not show that it would not have

incurred these same stock option costs with DOE performance, [and] it should not be permitted to

recover Resource Code 60 charges as damages.” Gov’t 10/3/14 Br. at 62.

c. The Court’s Resolution.

The court previously awarded damages for loader costs. See System Fuels II, 78 Fed. Cl.

at 798–800 (awarding $362,000 for materials loaders, but deducting $71,959 for payroll loaders

and $408,000 for capital suspense loaders).

In this case, the parties stipulated that loader costs are recoverable, if an individual claimed

item is recoverable. 7/18/14 Jt. Stip. ¶ 5. The United States Court of Appeals for the Federal

Circuit has held that SNF plaintiffs may recover payroll loader costs. See System Fuels IV, 666

F.3d at 1312 (reversing the trial court’s findings that Plaintiffs did not establish their “capital

suspense loader” overheard costs for mitigation-related work with reasonable particularity, even

though they were consistent with GAAP, and that the award must be reduced by the amount

associated with retired employees)). Again, the burden rests with Plaintiffs to prove their damages.

Id. at 1312 (“Plaintiffs bear the burden to establish the alleged mitigation costs were caused by the

breach.”) (citing Energy Nw., 641 F.3d at 1307). In this case, Plaintiffs have established that their

claimed payroll loaders comply with GAAP. PX2138 (Metcalfe Written Direct), at 22; see also

7/23/14 TR at 763 (Barras). Plaintiffs did not segregate costs associated with retired employees

and stock options, but our appellate court has held that SNF plaintiffs need not show their damages

with “absolute exactness or mathematical precision.” Ind. Mich. Power Co., 422 F.3d at 1373

(internal quotation omitted). Therefore, Plaintiffs are entitled to payroll loaders associated with

Resource Codes 19 and 60.

The parties, however, “stipulate[d] that if a claimed damages item is unrecoverable then

the applicable materials loader and capital suspense loader, if any, is also unrecoverable.” 7/18/14

Jt. Stip. ¶ 5. Because the court previously determined that Plaintiffs are not entitled to $4,706,387

to prepare and package SNF for dry storage, the court thus must deduct the associated $51,260 for

Resource Codes 19 and 60 payroll loaders associated with preparing and packaging SNF for dry

storage. DX1129, at Att. 3 & 11 (Peterson Written Direct).

For these reasons, the court has determined that Plaintiffs are entitled to $293,603 for

payroll loaders associated with Resource Codes 19 and 60.18

18

In the court’s judgment, SNF plaintiffs should not be awarded damages for stock option

bonuses for highly-compensated employees, but precedent compels the award of payroll loaders

under Resource Code 60. See System Fuels IV, 666 F.3d at 1312.

34

G. Whether Plaintiffs Are Entitled To Costs Not Previously Addressed In System

Fuels, Inc. v. United States, 78 Fed. Cl. 769 (2007).

1. Whether Plaintiffs Are Entitled To $4,218,911 For Increased Security

Guard Costs.

a. Plaintiffs’ Argument.

Plaintiffs’ claim $3,707,710 to hire security officers and $511,201 to contract with

Wackenhut, totaling $4,218,911. 3/6/15 Chron. at 1; see also 7/18/14 Jt. Stip. ¶ 3; Pls. 10/3/14 Br.

at 46. Plaintiffs separately address the evidentiary support for the hiring of additional security

officers and the Wackenhut contract, respectively, and then discuss the reasonableness of the cost

estimates.

i. The $3,707,710 To Hire Additional Security Officers.

Plaintiffs were required to expand the protected area at Grand Gulf to include the ISFSI

and to construct three BREs, which required additional security officers. Pls. 10/3/14 Br. at 47.

Plaintiffs contend that they presented sufficient evidence to show the need to hire additional

security officers to comply with NRC regulations mandating that the ISFSI be within the protected

area and guarded. Pls. 10/3/14 Br. at 47; see also Pls. 11/13/14 Reply at 10 (citing 7/21/14 TR at

41 (Carney)). In addition, the NRC requires19 that each BRE be continuously manned,

necessitating five guard shifts for each BRE. Pls. 10/3/14 Br. at 47; see also Pls. 11/13/14 Reply

at 10–11 (citing 7/21/14 TR at 256–57, 264 (Dorsey); DX1058; DX1061; DX1062; DX1098

(explaining the location of security posts for the three news BREs)); see also PDX34 (Grand Gulf

Security Shift Chart). The Government’s expert, Mr. Peterson, was “only vaguely familiar with

the NRC regulations concerning plant security” and thus “lack[ed] any qualifications to review

Plaintiffs’ security costs and to opine as to their validity.” Pls. 11/13/14 Reply at 12 (citing 7/24/14

TR at 1070 (Peterson); FED. R. EVID. 702 (requiring an expert to be qualified by “knowledge, skill,

experience, training or education” to offer opinion testimony)). And, the Government’s argument

that the overall number of security posts decreased is irrelevant, because Plaintiffs established the

costs associated with the fifteen additional security officers hired “were solely attributable to

Plaintiffs’ mitigation of DOE’s breach.” Pls. 11/13/14 Reply at 11.

Therefore, Plaintiffs argue they have established entitlement to $3,707,710 for additional

security officers. Pls. 11/13/14 Reply at 12.

ii. The $511,201 To Hire The Wackenhut Corporation.

Plaintiffs also argue that the evidence satisfies entitlement to $511,201 for the Wackenhut

security contract. Pls. 10/3/14 Br. at 46–47; see also Pls. 11/13/14 Reply at 8–9. First, the NRC

19

See 10 C.F.R. § 73.55 (outlining the requirements for physical plant protection at SNF

plants and requiring continuous surveillance of the site); see also 10 C.F.R. § 73.55(i)(5)(ii) (“The

licensee shall provide continuous surveillance, observation, and monitoring of the owner

controlled area as described in the security plan.”).

35

regulations require that dry fuel storage at the ISFSI must be provided on an ongoing basis, and

Plaintiffs were permitted to hire Wackenhut for this purpose. Pls. 11/13/14 Reply at 9. The

Wackenhut invoices were subject to two levels of review. Pls. 11/13/14 Reply at 9 (citing 7/22/14

TR at 613–14, 618–19 (Brown)). In support, Plaintiffs cite the testimony of Mr. Gregory Brown,

Plaintiffs’ Contract Manager for the Wackenhut security contract, and Ms. Alice “Dena” Byrnes,

the Manager, Finance Business Partners. Pls. 10/3/14 Br. at 46–47 (citing 7/22/14 TR at 613–25

(Brown)); see also Pls. 11/13/14 Reply at 8–9 (citing 7/22/14 TR at 613–25 (Brown); 7/22/14 TR

at 586–90 (Byrnes)).

For example, Ms. Byrnes “testified that it was [Plaintiffs’] general practice to allocate costs

to specific project codes, and that [Plaintiffs] followed this same practice for security costs,

including the Wackenhut invoices.” Pls. 11/13/14 Reply at 8 (citing 7/22/14 TR at 587 (Brynes)).

Ms. Byrnes also explained that these allocations were first done by a financial analyst and “that

the handwritten allocations on the Wackenhut invoices were done by Ms. Johnnie Rockingham, a

financial analyst in Ms. Byrnes’s department,” so the invoices were “properly authenticated.” Pls.

11/13/14 Reply at 8 (citing 7/22/14 TR at 586–87 (Byrnes)).

Mr. Brown added that he would review, approve, and sign Wackenhut invoices before

submitting the invoices for follow-on approval and payment. Pls. 10/3/14 Br. at 46 (citing 7/22/14

TR at 613–14, 618–19 (Brown)); see also Pls. 11/13/14 Reply at 8 (same). Mr. Brown also

reviewed the cost allocations for the Wackenhut security invoices and verified their accuracy,

including the allocation of compensatory measures to the dry fuel storage project. Pls. 10/3/14 Br.

at 46–47 (citing 7/22/14 TR at 623–25 (Brown)); see also Pls. 11/13/14 Reply at 8–9 (same).

iii. The Reasonableness Of Plaintiffs’ Security Costs.

Plaintiffs also contend that they satisfied the requirement for showing the $4,218,911 in

increased security costs “with reasonable certainty, not mathematical exactitude,” as required by

the United States Court of Appeals for the Federal Circuit. Pls. 10/3/14 Br. at 48 (citing Ind. Mich.

Power Co., 422 F.3d at 1373 (holding that damages “need not be ascertainable with absolute

exactness or mathematical precision”) (internal quotation omitted)).

Mr. Dorsey, Plaintiffs’ employee, determined the hours worked by the additional security

personnel by multiplying the number of security shifts required for the three BREs, fifteen, by the

standard hours in a workweek, forty, and extrapolated that over the January 1, 2007 to July 31,

2009 time period. Pls. 10/3/14 Br. at 48 (citing 7/21/14 TR at 276 (Dorsey)). Mr. Metcalfe utilized

Mr. Dorsey’s work product and an hourly rate within the range of estimated hourly rates paid to

BRE security personnel. PX2138, at 28–29 (Metcalfe Written Direct); see also 7/21/14 TR at

276–78 (Dorsey). These calculations were incorporated into Mr. Metcalfe’s report. 10/3/14 Br.

at 48. Plaintiffs contend this is a conservative estimate, because it “understates the number of

manhours per year because Plaintiffs used only a forty-hour workweek as a basis even though

officers work eighty-seven and a half hours per two-week pay period.” Pls. 10/3/14 Br. at 48

(citing 7/21/14 TR at 277–78, 295–96 (Dorsey)); see also Pls. 11/13/14 Reply at 12 (same). This

estimate also underestimated overtime hours, “because, on a regular shift, the officers work seven

and a half hours of overtime per pay period, and the estimate includes only three and a half hours

of overtime per pay period.” Pls. 10/3/14 Br. at 48 (citing 7/21/14 TR at 277–78 (Dorsey)); see

also Pls. 11/13/14 Reply at 12 (same). Finally, the hourly costs of $21.23 “understates the average

36

hourly cost of the security personnel required to staff the three additional BREs.” Pls. 11/13/14

Reply at 13 (citing PX2139 (estimating an hourly rate of $21.24); PX2124 (estimating an hourly

rate of $22.53); PX2143 (estimating an hourly rate of $23.06)).

In contrast, the Government’s estimate “accounts only for the time that security officers

are actually posted on the BREs and does not account for the training that every security officer

must undergo or the briefings that every security officer is required to attend prior to his shift.”

Pls. 11/13/14 Reply at 13 (citing 7/21/14 TR at 277–78 (Dorsey)).

b. The Government’s Response.

The Government responds that Plaintiffs’ increased security costs are “unsupported by

adequate contemporaneous documentation to establish that the costs were incurred for the

activities to which [Plaintiffs have] attributed them.” 7/18/14 Jt. Stip. ¶ 3; see also 7/18/14 Jt. Stip.

Att. A. The Government also separately challenges the evidentiary support for the hiring of

additional security officers and the Wackenhut contract, respectively, and then the reasonableness

of the cost estimates.

i. The $3,707,710 To Hire Additional Security Officers.

The Government argues that Mr. Metcalfe’s $3,707,710 estimate for hiring additional

security officers is based on information provided by Mr. Dorsey, but that “Mr. Dorsey did not

work at the Grand Gulf plant and had no involvement in its security between February 2003 and

February 2009.” Gov’t 10/3/14 Br. at 21 (citing 7/21/14 TR at 286 (Dorsey)); see also Gov’t

11/13/14 Reply at 9 (same). Instead, Mr. Dorsey’s assumptions about the hiring of fifteen

additional officers to guard the three new BREs “was based upon after-the-fact talks with security

staff at the plant and a review of the site security plan, which was not introduced into evidence.”

Gov’t 10/3/14 Br. at 21 (citing 7/21 TR at 251 (Dorsey)); see also Gov’t 11/13/14 Reply at 9

(same). In fact, Mr. Dorsey originally believed ten guards had been hired, instead of the fifteen he

later claimed. Gov’t 10/3/14 Br. at 21–22 (citing 7/21/14 TR at 293 (Dorsey)).

The assumptions made by Mr. Dorsey and Mr. Metcalfe also are “contradicted by the actual

evidence regarding the size of Grand Gulf’s security staff,” that only increased from 130 in 2003

to 134 in 2011. Gov’t 10/3/14 Br. at 22 (citing 7/21/14 TR at 288–89 (Dorsey)). Mr. Dorsey

admitted that “there may have be[en] increases to the security staff for reasons unrelated to dry

storage.” Gov’t 10/3/14 Br. at 22 (citing 7/21/14 TR at 289–91 (Dorsey)). In addition, “[s]ecurity

posting charts for dates after the dry storage facility was incorporated into the protected area

demonstrate that over time the number of security posts stayed the same and then eventually

decreased.” Gov’t 10/3/14 Br. at 23 (emphasis omitted) (citing 7/21/14 TR at 549–59 (Dorsey));

see also DX1058 (Dec. 31, 2006 security posting chart); DX1061 (June 30, 2007 security posting

chart); DX1062 (Dec. 31, 2007 security posting chart)).

Therefore, the total number of security personnel, not the number required to protect the

BREs, is relevant. Gov’t 11/13/14 Reply at 10–11 (“Whether the posts that were eliminated

following the addition of dry storage were hardened (like a BRE) or not, does not change the fact

that the total number of security posts required to be staffed decreased following dry storage, a

fact that completely undermines [Plaintiffs’] claim[] for increased security staffing costs.”

37

(emphasis omitted)). In addition, Plaintiffs “stopped staffing one of those BREs for a significant

period of time during the claim period.” Gov’t 11/13/14 Reply at 11 (citing DX1129, at 22 & Att.

8-e-1 (Peterson Written Direct); 7/21/14 TR at 255–56 (Dorsey)). Moreover, Plaintiffs proffered

“no evidence to counter the fact that the number of security posts actually decreased” and

acknowledged “that an analysis would need to be conducted before” determining whether

removing the three BREs would allow Plaintiffs to further decrease security staff. Gov’t 10/3/14

Br. at 23 (citing 7/22/14 TR at 570–72 (Dorsey)); see also Gov’t 11/13/14 Reply at 10 (same).

In contrast, Mr. Peterson’s report shows that Plaintiffs “could have relied upon its actual

security costs and accounting records, and used its security posting charts to determine the actual

costs attributable to the three BREs added during dry storage.” Gov’t 10/3/14 Br. at 24 (citing

DX1129, at 16–17 (Peterson Written Direct)); see also Gov’t 11/13/14 Reply at 11 (same).

Therefore, the court should reject Plaintiffs’ claim for the $3,707,710 to hire additional security

officers. Gov’t 10/3/14 Br. at 24; see also Gov’t 11/13/14 Reply at 12.

ii. The $511,201 To Hire The Wackenhut Corporation.

The Government also contends that Plaintiffs “provided insufficient information and

documentation to explain the bases for” the $511,201 to hire Wackenhut. Gov’t 10/3/14 Br. at 18.

Plaintiffs “did not call as a witness anyone who actually allocated the half-million dollars at issue

to the dry fuel storage project, much less have that individual explain the basis for the allocations.”

Gov’t 10/3/14 Br. at 18. Plaintiffs’ witnesses, Ms. Byrnes and Mr. Brown, were not qualified to

testify about these costs. Gov’t 10/3/14 Br. at 18–19. Ms. Byrnes stated that “she did not know

whose handwriting was on the [Wackenhut] invoices” and “confirmed that she had no knowledge

as to how Wackenhut invoice costs were broken-out to different work orders.” Gov’t 10/3/14 Br.

at 18 (citing 7/22/14 TR at 590–91 (Byrnes)). These responsibilities belonged to the contract

manager. Gov’t 10/3/14 Br. at 18 (citing 7/22/14 TR at 590 (Byrnes)). Likewise, Mr. Brown

“acknowledged that he did not know who had handwritten the allocations,” and “[s]ome of the

Wackenhut invoices with handwritten allocations post-dated Mr. Brown’s time as security

superintendent.” Gov’t 10/3/14 Br. at 18, 19 (citing 7/22/14 TR at 627–28, 632–33 (Brown);

PX1319; PX1458); see also Gov’t 11/13/14 Reply at 6 (same). Mr. Brown also testified that he

“did not know the process by which Wackenhut invoices had been allocated . . . and that his

testimony . . . was based upon conversations since his deposition with people who work at the

plant.” Gov’t 10/3/14 Br. at 19 (citing 7/22/14 TR at 630 (Brown)); see also Gov’t 11/13/14 Reply

at 6–7 (same). Of course, Wackenhut could have generated documents that itemized charges to

different project codes, but no such records were produced. Gov’t 10/3/14 at 19 (citing 7/22/14

TR at 629, 635–36, 646–47 (Brown)); see also Gov’t 11/13/14 Reply at 7 (same). “At the very

least[, Plaintiffs] could have called a Wackenhut employee to testify to the allocation process to

justify [their] entitlement to the [$511,201] in dispute.” Gov’t 11/13/14 Reply at 7.

In short, Plaintiffs failed to provide adequate support to justify the security costs allocated

to Wackenhut. Gov’t 10/3/14 Br. at 19–20 (citing Roseburg Lumber Co. v. Hadigan, 978 F.2d

660, 667 (Fed. Cir. 1992) (“Absent tangible proof of damages, appellant may not recover for an

alleged injury.”)); see also Gov’t 11/13/14 Reply at 8 (same).

38

iii. The Reasonableness Of Plaintiffs’ Security Costs.

The Government adds that, even if Plaintiffs have shown an increase in security staffing at

Grand Gulf due to dry storage, “Mr. Metcalfe’s estimate is overstated because both the number of

hours and the hourly rate he assumes are overstated.” Gov’t 10/3/14 Br. at 24.

First, Mr. Metcalfe’s estimate assumed security staff worked 32,565 hours per year,

including 1,365 hours overtime; but, continuously staffing the three BREs only required 26,280

hours per year. Gov’t 10/3/14 Br. at 24–25 & n.12 (citing 7/21/14 TR at 301–302 (Dorsey); PX186

(Metcalfe security estimate)). As a result, Plaintiffs overestimated by 6,000 hours from “the

shift . . . structure requir[ing] five full-time shifts for each position,” and this “does not obviate the

need to prove the number of hours employees spent on mitigation related projects.” Gov’t 10/3/14

Br. at 25 (citing 7/22/14 TR at 569–70 (Dorsey); see also SMUD V, 293 F. App’x at 773 (“[T]o

recover internal labor costs incurred in mitigation of the Government’s breach, [Plaintiffs] must

prove that [they] did in fact use [their] own employees in its mitigation efforts, and the number of

hours those employees spent on mitigation related projects.”)). Mr. Metcalfe’s estimate also

includes hours spent at locations other than the BREs. Gov’t 10/3/14 Br. at 25.

Second, Mr. Metcalfe overestimated the hourly rate by utilizing the SO-10SD14 billing

rate—the second highest billing rate reserved for security officers with at least six years of

experience. Gov’t 10/3/14 Br. at 25–26 (citing 7/21/14 TR at 303–06 (Dorsey); PX186; PX187,

at A43; PX188, at A45; PX189, at A47). Moreover, Mr. Metcalfe did not know the difference

between Plaintiffs’ billing rates, nor their origin. Gov’t 10/3/14 Br. at 26 (citing 7/21/14 TR at

307–08 (Dorsey)). In fact, “[a] comparison of an example of a Wackenhut invoice with a

corresponding security posting chart prepared during the same time period showed that security

officers at lower position levels were guarding the BREs added during the dry fuel storage project.”

Gov’t 10/3/14 Br. at 26 (citing 7/22/14 TR at 560–65 (Dorsey); DX1058; DX1059, at 17, 19, 25–

26, 45–46).

In contrast, the Government’s expert, Mr. Peterson, testified that “the estimate using the

single selected rate was more than $400,000 in excess of the same calculation using the average

Wackenhut rate.” Gov’t 10/3/14 Br. at 27 (citing DX1129, at Att. 8-c (Peterson Written Direct)).

Although Mr. Metcalfe attempted to rebut Mr. Peterson’s conclusion by introducing new exhibits

(PX2139–42), he “never relied upon these documents . . . , never testified about them at trial, [nor]

looked at the documents.” Gov’t 10/3/14 Br. at 27 (citing 7/24/14 TR at 1135 (Peterson)).

The Government also challenged the reliability of Plaintiffs’ calculation of the security

costs incurred. Gov’t 10/3/14 Br. at 27–29. For example, Ms. Byrnes “could not recall if she had

created or even contributed information in PX190, and could not stand behind the document as

being accurate or reliable.” Gov’t 10/3/14 Br. at 28 (citing 7/22/14 TR at 593 (Byrnes)). In

addition, “[c]ertain of the data included within PX190 is inconsistent with other contemporaneous

accounting documentation and inconsistent with the way in which the accounting information is

used.” Gov’t 10/3/14 Br. at 28 (arguing that the 6.47% overhead rate associated with Resource

Code 005 was used, instead of the 2.41% rate associated with Resource Code 002).

39

c. The Court’s Resolution.

i. The $3,707,710 To Hire Additional Security Officers.

The court must first determine whether it was appropriate for Mr. Metcalfe’s report to

utilize Mr. Dorsey’s work product. Mr. Dorsey worked in the SNF plant security field for over

thirty years, primarily at Grand Gulf. 7/21/14 TR at 216–17 (Dorsey).20 Mr. Dorsey did not work

at Grand Gulf from February 2003 to February 2009, but when he returned to Grand Gulf in

February of 2009, he acquainted himself with new security requirements. 7/21/14 TR at 237–40

(Dorsey). Therefore, the court has determined Mr. Metcalfe could utilize Mr. Dorsey’s work

product. See FED. R. EVID. 702 (stating that an expert may testify if: “(a) the expert’s scientific,

technical, or other specialized knowledge will help the trier of fact to understand the evidence or

to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony

is the product of reliable principles and methods; and (d) the expert has reliably applied the

principles and methods to the facts of the case.”) (emphasis added); see also FED. R. EVID. 703

(“An expert may base an opinion on facts or data in the case that the expert has been made aware

of or personally observed. If experts in the particularly field would reasonably rely on those kinds

of facts or data in forming an opinion on the subject, they need not be admissible for the opinion

to be admitted.”) (emphasis added).

At trial, Plaintiffs presented evidence that NRC regulations required Plaintiffs to construct

three BREs and continuously staff these stations. 7/21/14 TR at 41 (Carney). As such, Plaintiffs

were required to hire a total of fifteen security officers to staff the five guard shifts for each BRE.

7/21/14 TR at 256–57, 264 (Dorsey); PDX34 (Grand Gulf Security Shift Chart); see also 10 C.F.R.

§ 73.55 (outlining the requirements for physical plant protection at SNF plants and requiring

continuous surveillance of the site).

Mr. Dorsey testified that fifteen additional security officers were required to staff the BREs.

7/21/14 TR at 256–57 (Dorsey); see also 10 C.F.R. § 73.55 (outlining the requirements for physical

plant protection at SNF plants and requiring continuous surveillance of the site); 7/21/14 TR at

218–20, 227, 571–72 (Dorsey). The Government contends that the total number of security

personnel, not the number required to protect the BREs, is the relevant inquiry. Gov’t 11/13/14

Reply at 10–11. But, whether Plaintiffs could have reduced security in other positions at Grand

Gulf is not relevant. What is important is the number required to provide continuous surveillance

at the BREs.

The Government adds that Plaintiffs “could have relied upon its actual security costs and

accounting records, and used its security posting charts to determine the actual costs attributable

to the three BREs added during dry storage.” Gov’t 10/3/14 Br. at 24 (citing DX1129, at 16–17

(Peterson Written Direct)); see also Gov’t 11/13/14 Reply at 11–12 (same). Although that did not

20

From 1981 to 2003, Mr. Dorsey worked at Grand Gulf in positions ranging from armed

security officer to senior security supervisor. 7/21/14 TR at 217 (Dorsey). From 2003 to 2009,

Mr. Dorsey worked for Entergy Operations in a senior supervisor position at Waterford 3 Nuclear

station. 7/21/14 TR at 217 (Dorsey). From February 2009 through the date of trial, Mr. Dorsey

worked as manager of security at Grand Gulf. 7/21/14 TR at 217 (Dorsey).

40

happen in this case, the United States Court of Appeals for the Federal Circuit has endorsed the

use of expert testimony and models to approximate costs. See SMUD VIII, 566 F. App’x at 994

(holding that the United States Court of Federal Claims incorrectly “relegated” the United States

Court of Appeals for the Federal Circuit’s approval of exchange models “relying on evidence and

expert testimony”); see also Dairyland Power Coop. v. United States, 645 F.3d 1363, 1369–71

(affirming use of an exchange model designed by a SNF plaintiff’s expert).

Therefore, it would appear that Plaintiff should be entitled to be awarded costs incurred to

hire additional officers. But, the Government’s expert proffered convincing evidence that there

were significant absences in certain BRE security posts, shifting the burden of proof back to

Plaintiffs, who did not provide an adequate explanation for these gaps. DX1129, at 22 & Att. 8-

e-1 (Peterson Written Direct). The court, however, has taken judicial notice of the fact that the

NRC required the additional security guards, and Plaintiffs did not lose their nuclear license. See

FED. R. EVID. 201(b) (“The court may judicially notice a fact that is not subject to reasonable

dispute because it: . . . . (b) can be accurately and readily determined from sources whose accuracy

cannot reasonably be questioned.”). Therefore, the court finds that, although Mr. Peterson’s

exhibit indicates that there may have been some BRE staffing lapses, Plaintiffs were required to

and did hire additional security officers.

ii. The $511,201 To Hire The Wackenhut Corporation.

The Government also challenges the $511,201 to hire Wackenhut, because Plaintiffs’

witnesses were unqualified to testify about this issue. See FED. R. EVID. 602 (“A witness may

testify to a matter only if evidence is introduced sufficient to support a find that the witness had

personal knowledge of the matter.”). But, Mr. Brown and Ms. Byrnes had significant personal

knowledge about the allocation of the Wackenhut security costs and the management of the

Wackenhut security staff. 7/22/14 TR at 586–87 (Byrnes); 7/22/14 TR at 613–14 (Brown). In

addition, the Wackenhut invoices are admissible under the business records exclusion to the

hearsay rule. See FED. R. EVID. 803(6) (stating that business records are admissible if: “(A) the

record was made at or near the time by—or from information transmitted by—someone with

knowledge; (B) the record was kept in the course of a regularly conducted activity of a

business . . . ; (C) making the record was a regular practice of that activity; (D) all of these

conditions are shown by the testimony of the custodian or another qualified witness; and (E) the

opponent does not show that the source of information or the method or circumstances of

preparation indicate a lack of trustworthiness.”). The Wackenhut invoices were prepared in the

regular course of business and reviewed by a financial analyst and by Mr. Brown. 7/22/14 TR at

586–87 (Byrnes); 7/22/14 TR at 613–614 (Brown).

iii. The Reasonableness Of Plaintiffs’ Security Costs.

When evaluating a SNF plaintiff’s damages calculations, the court must determine whether

“the damages are shown with reasonable certainty.” Ind. Mich. Power Co., 422 F.3d at 1373

(citing Energy Capital Corp. v. United States, 302 F.3d 1314, 1320 (Fed. Cir. 2002)). The damages

“need not be ascertainable with absolute exactness or mathematical precision.” Id. (internal

quotation omitted).

41

The Government contends that Plaintiffs’ estimate overstates the hours worked and the

hourly rate of the BRE security officers. Gov’t 10/3/14 Br. at 24. Regarding the hours worked,

Mr. Dorsey calculated that each security officer worked forty hours per week for an individual

total of 2,080 hours per year, multiplied by the fifteen security officers, i.e., 31,200. 7/21/14 TR

at 276 (Dorsey); see also PX186. In addition, Mr. Dorsey added three-and-a-half hours of overtime

per pay period for a total of 1,365. PX186. These estimates were incorporated into Mr. Metcalfe’s

expert report. PX186. Although the Government contends that the more accurate annual measure

is 26,280—twenty-four hours per day, multiplied by 365 days in a year for the three security

officers to monitor the expanded area—this would exclude other mandatory job duties like

briefings and trainings. 7/21/14 TR at 277–78 (Dorsey). Therefore, the 31,200 estimate provided

by Plaintiffs was shown “with reasonably certainty.” Ind. Mich. Power Co., 422 F.3d at 1373.

Several hourly wage rates were applicable for the BREs at Grand Gulf, requiring an

estimate rate. 7/21/14 TR at 38 (stating that Plaintiffs do not have complete records for the security

costs); see also PX2138, at 28 (Metcalfe Written Direct) (stating that “[i]n [his] opinion, estimates

of this nature developed here for [Plaintiffs’] incremental security personnel meet the standard of

reasonable certainty required for economic damages”). Mr. Metcalfe elected to use the SO-10SD

14 rate, because “60–70 percent of the employees who worked at the claimed BREs had [six] or

more years experience.” DX1129, at Att. 8-c (Peterson Written Direct). Some evidence adduced

at trial shows that the average hourly rate was lower, but other shows a higher hourly rate.

Compare 7/22/14 TR at 560–65 (Dorsey); DX1058; DX1059, at 17, 19, 25–26, 45–46 with

PX2139; PX2124; PX2143. Having weighed the evidence, the court finds that Plaintiffs have

estimated the hourly rate for the BRE security costs “with reasonable certainty.” Ind. Mich. Power

Co., 422 F.3d at 1373; see also id. (stating that the damages “need not be ascertainable with

absolute exactness or mathematical precision”) (internal quotation omitted). In addition, since the

Wackenhut costs were documented by actual invoices, they were established with “reasonable

certainty.” Id; see also PX1297; PX1515.

For these reasons, the court has determined that Plaintiffs are entitled to $3,707,710 for

additional security officers and $511,201 for Wackenhut security services.

2. Whether Plaintiffs Are Entitled To $1,031,958 For Whiting Part 21

Crane Costs And For Costs To Analyze And Repair The Defective

Spent Nuclear Fuel Cask Handling Crane.

a. Plaintiffs’ Argument.

Plaintiffs claim $6,009 for Whiting Part 21 crane costs and $1,025,949 to evaluate the cask

crane and related structure for loading Holtec casks at Grand Gulf, totaling $1,031,958. 7/18/14

Jt. Stip. ¶ 6(a); see also 7/18/14 Jt. Stip. at 1. Plaintiffs contend that “they performed an evaluation

of the cask crane and related structure specifically for use with the Holtec system and that, if DOE

had timely performed, Plaintiffs would have instead conducted the evaluation of the cask crane

specifically for use with the DOE casks.” Pls. 10/3/14 Br. at 33–34; see also Pls. 11/13/14 Reply

at 15 (citing 7/21/14 TR at 88–89 (Warren)). When DOE performs, however, Plaintiffs will need

to conduct another evaluation. Pls. 10/3/14 Br. at 34; see also Pls. 11/13/14 at 15 (citing 7/23/14

TR at 957 (Brewer) (stating that “an engineering analysis and evaluation will have to be done to

say that the calculations that were performed bound that new device”)).

42

b. The Government’s Response.

The Government responds that these costs were incurred and are supported by adequate

contemporaneous documentation, but contends that they would have been incurred, if DOE

performed. 7/18/14 Jt. Stip. ¶ 6(a); Gov’t 10/3/14 Br. at 29 (stating that “cask crane was defective

and would have required repairs prior to the loading of SNF into any cask—whether for loading

to dry storage, as was done in the actual world, or loading to DOE in the ‘but for’ world”); see also

Gov’t 11/13/14 Reply at 12 (same).

In addition, Plaintiffs’ witnesses failed to establish that these costs can be considered as

damages. Plaintiffs’ technical expert, Ms. Supko, “simply ignored these cask crane evaluation

costs in her report with no explanation.” Gov’t 10/3/14 Br. at 29 (citing PX2137 (Supko Written

Direct)). Two other witnesses, Mr. Warren and Mr. Ellis, “were not asked to analyze what claimed

activities would not have been necessary with timely DOE performance,” but Mr. Warren

confirmed that the cask crane would have been analyzed for compatibility if DOE performed.

Gov’t 10/3/14 Br. at 30 (citing 7/21/14 TR at 115, 129–32 (Warren), 187–188 (Ellis); PX2137, at

62 (Supko Written Direct)); see also Gov’t 11/13/14 Reply at 13–14 (reiterating the same

arguments and stating that the “snippet of testimony” from Mr. Warren upon which Plaintiffs rely

“is the wrong standard under which incurred costs are evaluated”).

What happened is, Plaintiffs received a Part 21 notification from its crane manufacturer,

Whiting Corporation, advising that Plaintiffs “could no longer lift loads up to the original 150-ton

design capacity of the crane, but was instead ‘derated’ to 75 tons until the Part 21 notification was

addressed.” Gov’t 10/3/14 Br. at 30 (citing 7/21/14 TR at 132–33 (Warren), 205 (Ellis)); see also

Gov’t 11/13/14 Reply at 14 (same). This demonstrates that “the problems with [Plaintiffs’] spent

fuel cask crane arose independent of [Plaintiffs’] need for dry storage,” and “[a]ll the[se]

deficiencies . . . would have needed to have been addressed prior to cask loading operations,

whether the loading was to DOE or to dry storage.” Gov’t 10/3/14 Br. at 30–31 (citing DX1128,

at 5–8 (Brewer Written Direct); 7/21/14 TR at 205–06 (Ellis)); see also Gov’t 11/13/14 Reply at

14 (same). The United States Court of Federal Claims recently denied similar damages claims in

Carolina Power & Light Co. v. United States, 115 Fed. Cl. 57, 67 (2014). Id. (“The needed

modifications that Progress Energy made after the study suggest that the study had value beyond

the need for dry storage at Brunswick, and would have been performed independent of the

breach.”)); see also Gov’t 10/13/14 Br. at 31; Gov’t 11/13/14 Reply at 15 (same).

Moreover, Plaintiffs’ crane was “single-failure proof,” i.e., failure of a single component

would not cause the crane to drop a cask, but the crane would not have been certified, without an

evaluation. Gov’t 10/3/14 Br. at 31 (citing 7/21/14 TR at 88 (Warren); DX1128, at 5–6 (Brewer

Written Direct)). Likewise, Plaintiffs’ witness, “Ms. Supko, assumes for the purposes of her ‘but

for’ world analysis that the crane is single-failure proof, [but she failed] to recognize that some of

the costs that [Plaintiffs] seek[] to recover were for evaluations needed to establish it as so.” Gov’t

10/3/14 Br. at 31 (citing PX2137, at 47 (Supko Written Direct)).

The Government adds that Plaintiffs “mistakenly include[] these costs in the section of its

brief dealing with issues previously addressed by the [c]ourt. However, this crane evaluation is a

new issue for which [Plaintiffs] claim[] costs for the first time in this case.” Gov’t 11/13/14 Reply

at 12–13. If Plaintiffs believe they are “automatically entitled to recover any associated costs” to

43

constructing a dry storage facility, “then [Plaintiffs] are mistaken on the law.” Gov’t 11/13/14

Reply at 13 (citing Energy Nw., 641 F.3d at 1307 (holding that plaintiffs must show that the costs

would not have been incurred in a “but for” world)).

c. The Court’s Resolution.

Although Plaintiffs claim that the crane evaluation was specific to the Holtec cask system,

this is not the relevant inquiry. Instead, the court must determine whether Plaintiffs would have

conducted the crane evaluation, if DOE performed, and, if so, compare the relative costs of the

evaluation for Holtec versus DOE casks. See Energy Nw., 641 F.3d at 1306 (“[P]laintiff[s] must

prove the extent to which [their] incurred costs differ from the costs [they] would have incurred in

the non-breach world.”). In this case, Plaintiffs did not present evidence that the crane analysis

and repair was caused by DOE’s breach, since Plaintiffs would have been required to incur these

costs, if DOE performed. 7/21/14 TR at 132–33 (Warren), 205 (Ellis); DX1128, at 5–8 (Brewer

Written Direct); see also System Fuels IV, 666 F.3d at 1312 (“Plaintiffs bear the burden to establish

the alleged mitigation costs were caused by the breach.”) (citing Energy Nw., 641 F.3d at 1307).

For these reasons, the court has determined that Plaintiffs are not entitled to $6,009 for

Whiting Part 121 crane costs, nor to $1,025,949 to evaluate the cask crane and related structure

for loading Holtec casks at Grand Gulf.

3. Whether Plaintiffs Are Entitled To $185,399 To Design Radio Remote

Controls For The Crane.

a. Plaintiffs’ Argument.

Plaintiffs claim $185,399 to evaluate the potential installation of remote controls for the

spent fuel cask crane at Grand Gulf. 7/18/14 Jt. Stip. ¶ 6(b). Plaintiffs never implemented these

modifications due to cost considerations. 7/21/14 TR at 178 (Ellis). Nevertheless, Plaintiffs argue

that “[t]he evidence presented at trial demonstrated that the cask crane remote control evaluation

was conducted for reasons specific to [Plaintiffs’] use of the Holtec system for dry fuel storage.”

Pls. 10/3/14 Br. at 34 (citing 7/21/14 TR at 95 (Warren), 180 (Ellis)); see also Pls. 11/13/14 Reply

at 15 (same). “If DOE had timely performed, Plaintiffs would have conducted a different

evaluation of the cask crane for use with DOE-supplied transportation casks, not with Holtec

casks.” Pls. 11/13/14 Reply at 15 (citing 7/21/14 TR at 88 (Warren)). In addition, Plaintiffs cannot

determine “whether these activities will need to be repeated when DOE performs (or to what extent

and at what costs).” Pls. 11/13/14 Reply at 15 (citing 7/23/14 TR at 957 (Brewer) (“When DOE

performs . . . an engineering analysis and evaluation will have to be done to say that the calculations

that were performed bound that new device, because [the specifications of the cask could] create[]

a different loading situation . . . and may or may not be bounded by the old analysis.”)). In addition,

“the Government’s expert conceded that study of the remote controls was a reasonable thing to

do.” Pls. 10/3/14 Br. at 34 (citing 7/23/14 TR at 961 (Brewer)).

Although the remote controls were not installed, this cost should be allowed, because “[i]f

DOE had performed, and provided a DOE cask, the cask crane remote control evaluation would

not have been necessary or performed.” Pls. 10/3/14 Br. at 34 (citing Ind. Mich. Power Co., 422

44

F.3d at 1375 (holding that plaintiffs can recover for reasonable, but unsuccessful, mitigation

efforts)).

b. The Government’s Response.

Although the Government concedes that these costs were incurred and are supported by

adequate contemporaneous documentation, it argues that they would have been incurred even if

DOE performed. 7/18/14 Jt. Stip. ¶ 6(b).

The Government contends that the $185,399 “was not necessary to load casks, as

demonstrated by the fact that the Grand Gulf plant loaded [seventeen] SNF casks using the existing

pendant crane controls.” Gov’t 10/3/14 Br. at 32 (citing DX1128, at 26 (Brewer Written Direct));

see also Gov’t 11/13/14 Reply at 15 (same). “[T]here are no unique features to the Holtec cask

system at Grand Gulf that required [Plaintiffs] to explore this design modification,” and contrary

to Ms. Supko’s assumptions, “[t]he same perceived benefits to using such controls would have

applied equally to large rail-type DOE casks.” Gov’t 10/3/14 Br. at 32 (citing DX1128, at 26

(Brewer Written Direct)).

In addition, “loading to DOE in the ‘but for’ world would have commenced at Grand Gulf

in 2006, the same year that loading to dry storage began,” meaning that “the age, condition, and

performance of the existing spent fuel cask crane controls would have been the same in both

worlds, and [Plaintiffs] would have pursued the design for the remote control modification even

with DOE performance.” Gov’t 10/3/14 Br. at 32 (citing DX1128, at 26 (Brewer Written Direct));

see also Gov’t 11/13/14 Reply at 16 (same). Plaintiffs “rel[y] upon conclusory statements from

[their] witnesses backed by no analysis.” Gov’t 11/13/14 Reply at 15 (citing Pls. 10/3/14 Br. at

10; 7/21/14 TR at 114–15 (Warren), 187–88 (Ellis)). As such, these costs are unrecoverable.

Gov’t 10/3/14 Br. at 32 (citing Energy Nw., 641 F.3d at 1307 (“If a cost would have been incurred

even in the non-breach world, it is not recoverable.”)); see also Gov’t 11/13/14 Reply at 16 (same).

c. The Court’s Resolution.

Although Plaintiffs claim that the remote control design was specific to the Holtec cask

system, this is not the relevant inquiry. Instead, the court must determine whether Plaintiffs would

have conducted the remote control design, if DOE performed, and, if so, compare the relative costs

of the design for Holtec versus DOE casks. See Energy Nw., 641 F.3d at 1306 (“[P]laintiff[s] must

prove the extent to which [their] incurred costs differ from the costs [they] would have incurred in

the non-breach world.”). In this case, however, Plaintiffs did not present evidence of the costs of

the remote control design specific to DOE casks, and the Government showed that the benefits of

the remote control would have applied, if DOE performed. DX1128, at 26 (Brewer Written

Direct). As such, Plaintiffs did not meet their burden to establish that the costs incurred for the

remote control design were caused by DOE’s breach. See System Fuels IV, 666 F.3d at 1312

(“Plaintiffs bear the burden to establish the alleged mitigation costs were caused by the breach.”)

(citing Energy Nw., 641 F.3d at 1307).

For these reasons, the court has determined that Plaintiffs are not entitled to $185,399 for

the design of radio remote controls for the crane.

45

4. Whether Plaintiffs Are Entitled To $1,769,201 For An Operational

Sequence Design And For Dose Assessment Analyses.

a. Plaintiffs’ Argument.

Plaintiffs claim $1,718,311 for an operational sequence design and $50,890 for dose

assessment analyses, totaling $1,769,201, associated with loading casks at Grand Gulf. 7/18/14

Jt. Stip. ¶ 6(c); see also 3/6/15 Chron. at 1. Plaintiffs argue that “the operational sequence design

and analysis were performed specifically for the HI-TRAC/HI-STORM system” and that “when

DOE performs and provides casks, Plaintiffs will need to develop, and incur the costs of, another

operational sequence design and conduct another operational sequence analysis specific to the

DOE-provided casks.” Pls. 10/3/14 Br. at 32 (citing 7/21/14 TR at 93 (Warren)); see also Pls.

11/13/14 Reply at 16 (same).

Although it is impossible to determine what dose analysis would have been required had

DOE performed, “[a]t a minimum, . . . the dose assessment . . . would not have been necessary.”

Pls. 11/13/14 Reply at 17. Therefore, “absent DOE’s breach, these specific analyses would not

have been conducted.” Pls. 11/13/14 Reply at 17 (citing 7/23/14 TR at 938 (Brewer) (stating that

a new analysis is required for the Holtec system but not for the DOE system)). Plaintiffs

acknowledge that the costs of additional dose assessment analyses are “speculative,” but they

would not have needed to perform the dose assessment analyses, if DOE performed. Pls. 10/3/14

Br. at 33; see also Pls. 11/13/14 Reply at 17 (“Again, if required for a DOE system, the DOE

analyses are deferred costs, and the costs for the Holtec system should be allowed.”).

b. The Government’s Response.

The Government concedes that these costs were incurred and that they are supported by

adequate contemporaneous documentation, but contends that they would have been incurred even

if DOE performed. 7/18/14 Jt. Stip. ¶ 6(c). Prior to conducting the operational sequence design

and dose assessment analyses, Plaintiffs lacked information necessary “to load SNF either to DOE

or to dry storage.” Gov’t 10/3/14 Br. at 33 (citing DX1128, at 9 (Brewer Written Direct); 7/21/14

TR at 115–18 (Warren)). Therefore, “even with DOE performance, [Plaintiffs] would have had to

perform the evaluations necessary to ensure cask handling operations were consistent with the

plant design basis.” Gov’t 10/3/14 Br. at 33; see also Gov’t 11/13/14 Reply at 19 (“Mr. Warren

confirmed that an operational sequence and dose assessment would have been needed even with

DOE performance.”) (citing 7/21/14 TR at 115–18 (Warren)).

The Government rejects Plaintiffs’ claim that they will need to conduct another operational

sequence design when DOE performs, as premature. Gov’t 10/3/14 Br. at 33 n.13 (“[A]t that time

[Plaintiffs] can attempt to argue that it would not have incurred these costs a second time with

timely DOE performance.”) (citing Energy Nw., 641 F.3d at 1307 (“If a cost would have been

incurred even in the non-breach world, it is not recoverable.”)); see also Gov’t 11/13/14 Reply at

18 (“[T]he work that [Plaintiffs] tr[y] to recover costs for here established the baseline operational

sequence needed to load any cask at the plant and future casks will be analyzed against that

baseline to see what if any changes are needed.”) (citing 7/23/14 TR at 938–39 (Brewer)).

46

The Government adds that Plaintiffs took “the erroneous position . . . that the recoverability

of these evaluations has already been decided in [their] favor.” Gov’t 10/3/14 Br. at 34; see also

Gov’t 11/13/14 Reply at 17 (same). Instead, “the [c]ourt never found those costs to be recoverable,

but specifically left that determination for future trials.” Gov’t 10/3/14 Br. at 34 (citing System

Fuels II, 78 Fed. Cl. at 804 (“[P]laintiffs . . . are not foreclosed from attempting to recover this cost

in a future suit for damages.”)); see also Gov’t 11/13/14 Reply at 17 (same). Therefore, Ms. Supko

relied on the incorrect recommendation of counsel and did not address whether these costs would

have been incurred had DOE performed. Gov’t 10/3/14 Br. at 34 (citing PX2137 (Supko Written

Direct)); see also Gov’t 11/13/14 Reply at 17–18 (same).

c. The Court’s Resolution.

Plaintiffs contend that the costs for operational sequence design and dose assessment

analyses associated with loading casks at Grand Gulf were specific to the Holtec casks, but this is

not the relevant inquiry. Instead, the court must determine whether Plaintiffs would have incurred

these costs, if DOE performed, and, if so, compare the relative costs of the analyses for Holtec

casks versus DOE casks. See Energy Nw., 641 F.3d at 1306 (“[P]laintiff[s] must prove the extent

to which [their] incurred costs differ from the costs [they] would have incurred in the non-breach

world.”).

At trial, the evidence established that Plaintiffs would have conducted the operational

sequence design for DOE casks, if DOE performed. 7/21/14 TR at 118 (Warren) (“If DOE were

to pick up fuel, yes, we would do those same analyses.”). Nor did Plaintiffs present evidence of

the operational sequence design costs specific to DOE casks. Consequently, Plaintiffs did not

meet their burden to establish that the operational sequence design costs were incurred as a result

of DOE’s breach. See System Fuels IV, 666 F.3d at 1312 (“Plaintiffs bear the burden to establish

the alleged mitigation costs were caused by the breach.”) (citing Energy Nw., 641 F.3d at 1307).

But, Plaintiffs did present evidence establishing that the dose assessment analyses would not have

been necessary, if DOE performed. 7/21/14 TR at 94, 143 (Warren) (testifying that dose

assessment analyses would not have been necessary for DOE casks, because DOE casks would

not have been transported to the ISFSI); see also 7/23/14 TR at 940–41 (Brewer) (same).

For these reasons, the court has determined that Plaintiffs are entitled to $50,890 for dose

assessment analyses, but not to $1,718,311 for operational sequence design associated with loading

casks at Grand Gulf.

5. Whether Plaintiffs Are Entitled To $550,166 To Modify A Work

Platform Used To Load Spent Nuclear Fuel Into Casks.

a. Plaintiffs’ Argument.

Plaintiffs claim $550,166 to install a work platform in the cask washdown pit. 21 7/18/14

Jt. Stip. ¶ 6(d).

21

The cask washdown pit is a cavity where a SNF cask is staged, prepared, and cleaned

before being moved to the cask storage pit to load assemblies into the cask. DX1128, at 11 (Brewer

47

Plaintiffs argue that “[t]he evidence presented at trial established that the work platform

was custom designed for the specific dimensions of the Holtec HI-TRAC system and that its need

was a direct result of activities related to welding the Holtec MPC-68 canister lid.” Pls. 10/3/14

Br. 35 (citing 7/21/14 TR at 97–98 (Warren); 7/22/14 TR at 683–84 (Supko)); see also Pls.

11/13/14 Reply at 17 (same). The Government’s witness acknowledged that “it is ‘theoretically

possible’ to secure the bolts on the lid of a bolted cask system without a work platform” but could

not say whether the platform would work with a DOE-supplied cask. Pls. 11/13/14 Reply at 17

(quoting 7/23/14 TR at 944 (Brewer)), 18 (citing 7/23/14 TR at 947 (Brewer)). Because “[t]he

work platform would not have been required to load DOE casks with a bolted closure. . . . there

would have been no need to purchase the work platform,” if DOE performed. Pls. 10/3/14 Br. at

35 (citing 7/22/14 TR at 683 (Supko); PX2137, at 68–69 (Supko Written Direct)); see also Pls.

11/13/14 Reply at 17 (same).

b. The Government’s Response.

The Government concedes that these costs were incurred and that they are supported by

adequate contemporaneous documentation, but contends that they would have been incurred, if

DOE performed. 7/18/14 Jt. Stip. ¶ 6(d).

The Government, however, argues that washdown activities “would be required for loading

any spent fuel cask to be used for storage or transportation, including a cask supplied by DOE”

and that these activities would take place in the cask washdown pit and cask storage pit. Gov’t

10/3/14 Br. at 35 (citing PX2137, at 64–67 (Supko Written Direct)). Although Plaintiffs decided

to install a work platform, because “the original walkways and spray ringer header would have

presented an unacceptable safety risk . . . . , [t]he decision to replace this walkway with a safer,

adjustable work platform would have been made regardless of the SNF cask that was being used.”

Gov’t 10/3/14 Br. at 36 (citing DX1128, at 11 (Brewer Written Direct)); see also Gov’t 11/13/14

Reply at 20 (same). Similarly, the spray ringer header would have been removed before Plaintiffs

loaded the DOE casks. Gov’t 10/3/14 Br. at 36 (citing DX1128, at 14–15 (Brewer Written

Direct)); see also Gov’t 11/13/14 Reply at 20 (same).

The Government characterizes Ms. Supko’s testimony as “overly simplistic” and

“premised on a fundamental misunderstanding” of cask washdown activities. Gov’t 10/3/14 Br.

at 36 (citing DX1128, at 13–14 (Brewer Written Direct)); see also Gov’t 11/13/14 Reply at 19

(same). Plaintiffs’ other witnesses, Mr. Warren and Mr. Ellis, also did not analyze whether the

work platform would have been installed, if DOE performed. Gov’t 10/3/14 Br. at 36–37 (citing

7/21/14 TR at 120 (Warren); 7/21/14 TR at 195 (Ellis)); s

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