# Opposition Brief — Sacramento Municipal Utility District v. United States

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1035%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2002
- **Citation:** 535 U.S. 1095

## Text

\

SY i “uk ‘
| | 24 2002
Nos. 01-1020, 01-1155, 01-1398 and 1-1 444R

In the Supreme Court of the United States’

SACRAMENTO MUNICIPAL UTILITY DISTRICT,
PETITIONER
U.
UNITED STATES OF AMERICA

MAINE YANKEE ATOMIC POWER COMPANY,
PETITIONER
U.
UNITEDSTATES OF AMERICA

OMAHA PUBLIC POWER DISTRICT, PETITIONER
Uv.
UNITED STATES OF AMERICA

COMMONWEALTH EDISON COMPANY, PETITIONER
Uv.
UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI
TO THE UNITEDSTATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

THEODORE B. OLSON
Solicitor General
Counsel of Record
ROBERT D. MCCALLUM, JR.
Assistant Attorney General
DOUGLAS N. LETTER
MARK W. PENNAK
JAMES G. BRUEN, JR.
MATTHEW J. TROY
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTIONS PRESENTED

In order to provide some of the funds necessary to
decontaminate the Department of Energy’s uranium enrich-
ment facilities, Congress imposed a special assessment on
those domestic nuclear utilities that had purchased, either
from the Department of Energy directly or in the secondary
market, uranium that had been enriched at those facilities.
See 42 U.S.C. 2297; 42 U.S.C. 2297g-1 (1994 & Supp. V 1999).
The questions presented are:

1. Whether the special statutory decontamination assess-
‘ment constitutes an unlawful breach of the contracts for
uranium enrichment services between petitioners and the
Department of Energy.

2. Whether the special decontamination assessment
constitutes an impermissible taking of petitioners’ property
without just compensation.

3. Whether the special decontamination assessment is
unconstitutionally retroactive, in violation of petitioners’
substantive due process rights.

(I)

TABLE OF CONTENTS

Page
AEA 1
iia scnecnincceebendeionenbebiesiieesiniimesminens 2
TTT Acie idasidiabiebeccednchstipeeinsnemansehieduneteioiedneeesiroemmeins 3
Eaten Ee eee 10
I Saal ahead tcedsbehioveenbesactinmnteitsincubeete ema 27
TABLE OF AUTHORITIES
Cases:
Bowen v. Public Agencies Opposed to Soc. Sec. —
Entrapment, 477 U.S. 41 (1986) ...cccccsscssssesssessssessesseceeceses 13
Concrete Sales & Servs., Inc. v. Blue Bird Body Co.,
211 F.3d 1333 (11th Cir. 2000) ..........ceccessescssscessessessessecsecsess 23
Connolly v. Pension Benefit Guar. Corp., 475 U.S.
EES 18
Eastern Enters. v. Apfel, 524 U.S. 498 (1998) -.ccccccccce.. 8, 13, 14,

16, 17, 19, 25
First English Evangelical Lutheran Church v.

County of Los Angeles, 482 U.S. 304 (1987) cccccccccscsccssse. 14
John J. Kirlin, Inc. v. United States, 827 F.2d 1538

IS Le 1]
Keystone Bituminous Coal Ass’n v. DeBenedicitis,

ITT isc tialdacesceeociisinpmseeiiebtnteneinnmeiiesdeircenn 16
Kimberly Assocs. v. United States, 261 F.3d 864

Sta ta SNC 12
Loretto v. Teleprompter Manhattan CATV Corp.,

EE ee 16
Mississippi Power & Light Co. v. Mississippi, 487

i csauisbammsmiunnues 17
Mulholland v. United States, 361 U.S. 237 (Ct. Cl.

I aad iaaciaialnd tide stheentiniophtbenienes setittianaeillinicicotiliowenie 11
Penn Cent. Transp. Co. v. City of New York, 438

da iiesiaaibechinsabncintenshieeiniiosecs 16,17
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393

AEE EAL ee 16

(IIT)

IV

Cases—Continued: Page

Pension Benefit Guar. Corp. v. R.A. Gray & Co.,

I I i eneteenie acenes 20, 21
Phillips v. Washington Legal Found., 524 U.S. 156

1 REECE eer ae eR END Nc ney ON ED 15
RTC v. FSLIC, 25 F.3d 1493 (10th Cir. 1994) wu. 12
Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) ........ 22
Tahoe-Sierra Preservation Council, Inc. v. Tahoe

Reg’l Planning Agency, No. 00-1167 (Apr. 23, 2002) ..... 16
United States v. Carlson, 512 U.S. 26 (1994) wo. 20
United States v. Hercules, Inc., 247 F.3d 706

(8th Cir.), cert. denied, 122 S. Ct. 665 (2001) ........ 18

United States v. Monsanto Corp., 858 F.2d 160
(4th Cir. 1988), cert. denied, 490 U.S. 1106

COITEED <snsichnicssiiieeeutiieebcuatapeiteanssiduiiadidialiuninissteninieanadaniailednobesbesion 24
United States v. Sperry Corp., 493 U.S. 52 (19839) ....... 14, 15
16, 26

APA rae Rare ADRES AM SOA eal Ciena oe 6, 12, 13
United States Fid. & Guar. Co. v. McKeithen,
226 F.3d 412 (5th Cir. 2000), cert. denied, 532 U.S.

| ROPERS SIERO NOES On SAO BT EL a NORD 19
Usery v. Turner Elkhorn Mining Co., 428 U.S. 1

URE: coe RRO ee R ARN 20, 21, 24, 27
Webb’s Fabulous Pharmacies, Inc. v. Beckwith,

a ED chcuisesieucicshasinsininhieaiitcnineichinirtiniteaistinslieiiinias 15

Yankee Atomic Elec. Co. v. United States, 112
F.3d 1569 (Fed. Cir. 1997), cert. denied, 524 U.S.

gt ERRRERERES Tear ec eee Te PURE DE DENIC SE ern passim
Constitution and statutes:
U.S. Const. Amend. V:

FOE CTI COIIG ircecrctcsteresctncsicrinestiittvnsantatmnnnsitin 13, 14

SO ar 20. 26

Act of Apr. 26, 1966, Pub. L. No. 104-134, Tit. ITI,
ch. 1, subch. A, § 3116(a)(1), 110 Stat. 1321-349 oo... 25

Statutes

Continued: Page

Comprehensive Environmental Response,
Compensation, and Liability Act of 1980,

GR UEC. GEE 06 CM ccctecccceecenicensitneiesceteceniniarmeniicectnscniivinne 10
42 U.S.C. 2201(v)(B)(iii) (1988) .......0.\ecccscsccsrerssoscereroers 21
SS UA, Be ceeeeteeniertttinanennn 25
42 U.S.C. 2296a-2 (1994 & Supp. V 1999) ......cecscceeeeees 25
B® UB. BD ecccccteecerintisvinreeencncsninciniscieins 25
GB UBC. BIT IC. cccccnsnccnsicnctceninnnincensvcnsctevionmiionens 25
MO USE ice 4
42 U.S.C. 2297g-1 (1994 & Supp. V 1999) ......eeeeeees 4
42 U.S.C. 2297g-1(a) (1994 & Supp. V 1999) ......ceeeee 4
GU, FI cectesctrcecectercceesininevmninemistaninnies 4
GU Ba eetetciccisinrcntctenrnrnionernsenrnensenstaiinniin 4,5
GE UL, BD tesincesictstetcientercereenicnsienicentcnsnsenaitaiio 4
GTR, Fe sicsttecsecveitinvinincinsepennterveincrincsiie 5, 17, 24
Energy Policy Act, Pub. L. No. 102-486, 106
Da. GIG sccscsniscrsaisavisnsnninviessseiasianpineciiguaatiaminsieianannianesianiinn 3
GON, SOG Dhak. GOD ecstnccnsctcsscstttnestctnciivintemccineneneenistianniinn 25
Miscellaneous:

Comprehensive National Energy Policy Act:
Hearings on H.R. 776 Before the House Comm.

on Ways and Means, 102d Cong., 2d Sess. (1992) ........... 4
198 Cong. Ree. 32,078 (1GGZ) -.ccccsessceccccssonsevsosevesevsssvoversevesseees 4,21
H.R. Rep. No. 474, 102d Cong., 2d Sess. (1992):

FPR. 8 nccorsecoscessvensnnmeissoveserenettinnsmeeuimsemmannatantatntatses 3, 18, 21, 26

FP a. DD. sccssinenstecsetiannidcainaisniniasenionmnnsnaiimemainmmaiimmmeniaedal 4
Restatement (Second) of Torts (1965) .........c:ccccsesceesseeeeees 10, 23

Jn the Supreme Court of the Anited States

No. 01-1020
SACRAMENTO MUNICIPAL UTILITY DISTRICT,
PETITIONER
U.
UNITED STATES OF AMERICA

No. 01-1155
MAINE YANKEE ATOMIC POWER COMPANY,
PETITIONER.
UV.
UNITED STATES OF AMERICA

No. 01-1398
OMAHA PUBLIC POWER DISTRICT, PETITIONER
Vv.
UNITED STATES OF AMERICA

No. 01-1411
COMMONWEALTH EDISON COMPANY, PETITIONER
Vv.
UNITED STATES OF AMERICA

ON PETITIONS FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The decision of the en bane court of appeals in Com-
monwealth Edison (SMUD Pet. App. 17a-68a; Com Ed Pet.

(1)

App. la-52a)' is reported at 271 F.3d 1327. The decision of
the Court of Federal Claims in Commonwealth Edison (Com
Ed Pet. App. 85a-120a) is reported at 46 Fed. Cl. 29.

The consolidated decision of the panel of the court of
appeals in Sacramento Municipal, Maine Yankee, and
Omaha Power (SMUD Pet. App. la-16a) is reported at 271
F.3d 1357. The decision of the Court of Federal Claims in
Sacramento Municipal (SMUD Pet. App. 69a-9la) is
reported at 44 Fed. Cl. 395. The decision of the Court of
Federal Claims in Maine Yankee (MYAP Pet. App. 17a-39a)
is reported at 44 Fed. Cl. 372. The decision of the Court of
Federal Claims in Omaha Power (OPPD Pet. App. 17a-39a)
is reported at 44 Fed. Cl. 383.

JURISDICTION

The judgment of the en bane court of appeals in Com-
monwealth Edison was entered on November 20, 2001. On
February 12, 2002, the Chief Justice extended the time
within which to file a petition for a writ of certiorari in that
case to and including March 20, 2002, and the petition was
filed on that date.

The judgment of the panel of the court of appeals in
Sacramento Municipal, Maine Yankee, and Omaha Power
was entered on November 20, 2001. Sacramento Municipal
Utility District’s petition for a writ of certiorari in No. 01-
1020 was filed on January 10, 2002. Maine Yankee Atoniic
Power Company’s petition in No. 01-1155 was filed on
February 8, 2002. On February 13, 2002, the Chief Justice
extended the time for filing a certiorari petition for Omaha
Public Power District to and including March 20, 2002, and
the petition in No. 01-1398 was filed on that date.

1 References in this brief to “SMUD Pet.” are to the petition in No. 01-
1020; to “MYAP Pet.” are to the petition in No. 01-1155; to “OPPD Pet.”
are to the petition in No. 01-1398; and to “Com Ed Pet.” are to the petition
in No. 01-1411.

The jurisdiction of this Court in each case is invoked
under 28 U.S.C. 1254(1).

STATEMENT

1. In 1992, Congress enacted the Energy Policy Act
(EPACT), Pub. L. No. 102-486, 106 Stat. 2276, which was
intended to establish a “comprehensive national energy
policy” addressing, among other things, “solutions to our nu-
clear waste and uranium enrichment problems.” H.R. Rep.
No. 474, 102d Cong., 2d Sess. Pt. 1, at 132 (1992). Among
those problems was contamination at the Department of
Energy’s (DOF’s) uranium enrichment facilities. The gov-
ernment had conducted uranium enrichment at those facili-
ties since the 1940s, and since the 1960s had offered commer-
cial uranium enrichment services to utility companies for use
in power generation. See SMUD Pet. App. 20a.”

Typically, DOE offered uranium enrichment to utilities
under an arrangement by which the purchasers furnished
low-grade uranium to the Department, DOE processed the
uranium, and DOE then returned the enriched uranium to
the utilities. The enrichment services were measured in
terms of “separative work units” (SWUs). Utilities were
typically charged the product of the number of SWUs they
received, multiplied by the unit price in the contract. The
unit pricing varied somewhat from contract to contract, but
generally the unit price was established by reference to the
price in effect at the time the service was rendered, and in
some cases was also capped by contract at a maximum price.
SMUD Pet. App. 20a-21a.

2 Before the establishment of the Department of Energy, the govern-
ment’s uranium enrichment facilities were operated by the Atomic Energy
Commission and by the Energy Research and Development Admini-
stration. See SMUD Pet. App. 20a. For simplicity, we refer in this brief
to the governmental entity that conducted uranium enrichment as DOE or
the Department.

Before enacting EPACT, Congress extensively consid-
ered numerous options to finance the decontamination and
decommissioning of uranium enrichment facilities. Congress
considered past use of the plants, the causes of the con-
tamination, and estimates of clean-up costs. By 1992, esti-
mates of the cost of decontamination had risen to more than
$20 billion. During hearings, industry representatives, who
participated actively in the framing of EPACT, acknowl-
edged that the industry had benefited from the uranium
enrichment services, and expressed the industry’s willing-
ness to pay a fair share of the cost of decontaminating the
enrichment facilities. They urged Congress to adopt a
compromise that capped utilities’ contribution at $2.5 billion.
See Comprehensive National Energy Policy Act: Hearings
on H.R. 776 Before the House Comm. on Ways and Means,
102d Cong., 2d Sess. 171, 178-182 (1992); SMUD Pet. App.
26a-30a (reviewing legislative framing of EPACT).

After debating options and weighing facts surrounding
the use and contamination of the plarts, Congress concluded
that it was equitable for domestic utilities that had benefited _
from DOE’s uranium enrichment services to contribute a
portion of the cost of decontaminating the facilities where
that enrichment was conducted. See H.R. Rep. No. 474,
supra, Pt. 8, at 77-78; 188 Cong. Rec. 32,073 (1992) (remarks
of Rep. Sharp). Congress established the Uranium Enrich-
ment Decontamination and Decommissioning Fund (Fund)
to accumulate and disburse the funds necessary to decon-
taminate those facilities. See 42 U.S.C. 2297g; 42 U.S.C.
2297g-1 (1994 & Supp. V 1999). Congress provided that the
federal government would absorb the majority of the decon-
tamination costs through annual appropriations to the Fund
totaling $330 million (adjusted annually for inflation), or 68%
of the total amount to be deposited into the Fund over 15
years. See 42 U.S.C. 2297g-1(b)(2), (c) and (d); 42 U.S.C.
2297g-1(a) (1994 & Supp. V 1999).

a |

The remaining 32% (not to exceed $2.25 billion over 15
years) of the Fund’s financial base is collected in annual
installments (not to exceed $150 million per year, adjusted
annually for inflation) from domestic utilities that obtained
government-enriched uranium for the purpose of generating
electricity. See 42 U.S.C. 2297g-1(c). Whether a utility is
required to contribute to the Fund turns not on whether the
utility had entered into a contract to purchase uranium from
DOE, but whether the utility actually obtained the enriched
uranium, and thus had benefited from DOE’s enrichment
services. In particular, a utility that purchased enriched
uranium from DOE bvt resold that uranium to another
utility on the secondary market is not responsible to contri-
bute to the Fund for the amount of uranium that it resold
and did not use, whereas a utility that purchased uranium
from another utility but not from DOE for its own use in
power generation is responsible for contributing to the Fund
in an amount proportionate to the amount of uranium that it
used. See 42 U.S.C. 2297g-1(c); see also SMUD Pet. App.
25a. Utilities that are required to pay an assessment to the
Fund may in turn treat that assessment as a “necessary and
_ reasonable current cost of fuel” that is “fully recoverable in
rates * * * in the same manner as the utility’s other fuel
cost.” 42 U.S.C. 2297g-1(g).

2. After the enactment of EPACT, petitioners, as well as
several other utility companies, each filed suit in the Court of
Federal Claims challenging the EPACT assessments on
constitutional and contract-law grounds. In 1997, a panel of
the Federal Circuit, in a separate case, rejected the_utilities’
principal arguments based on contract law. Yankee Atomic
Elec. Co. v. United States, 112 F.3d 1569 (Fed. Cir. 1997),
cert. denied, 524 U.S. 951 (1998). The Yankee Atomic panel
first noted that the disputes did not even “appear to be
[cases] involving a breach of contract[,]” because,
“{tlypically, a contract breach occurs while the contract is

being performed, whereas the contracts in the present case
have been fully performed by both parties.” /d. at 1573 n.2.
The court also concluded, however, that the government was
not liable for breach of contract in any event based on
EPACT because of the sovereign-acts and unmistakability
doctrines. Jd. at 1574. In so concluding, the court carefully
examined and applied this Court’s decision in United States
v. Winstar Corp., 518 U.S. 839 (1996).

Applying the sovereign-acts doctrine, the Yankee Atomic
court ruled that passage of the EPACT assessment pro-
vision did not constitute a breach of the government’s con-
tract with the utilities because that provision was enacted
not “for the purpose of retroactively increasing the price of
its earlier contracts with [the utilities],” but rather “for the
purpose of solving the problem of decontamination and
decommissioning of uranium enrichment facilities (7.e., the
legislation was passed for the benefit of the public).” 112
F.3d at 1575. The court stressed that the EPACT assess-
ments fall not on the entities that contracted with DOE for
enrichment services, but rather on the utilities that eventu-
ally used the enriched uranium for power generation, even if
they purchased that uranium in the secondary market. Jd. at
1574-1575.

The Yankee Atomic court further concluded that, under
the unmistakability doctrine (under which “[{a] contract with
a sovereign government will not be read to include an
unstated term exempting the other contracting party from
the application of a subsequent sovereign act,” EPACT also
furnished no basis for government liability to the utilities.
See 112 F.3d at 1578 (quoting Winstar, 518 U.S. at 878
(opinion of Souter, J.)). The court noted that “application of
the unmistakability doctrine turns on whether enforcement
of the contractual obligation would effectively block the
exercise of a sovereign power of the Government,” and that
the utilities’ contracts with the government, although typi-

cally fixed-price contracts, contained no promise that “un-
mistakably precluded the Government from subsequently
exercising its sovereign power to assess a tax.” Jd. at 1579.”
The utility sought certiorari in Yankee Atomic, arguing that
EPACT breached its contract with DOE, but this Court
denied review, 524 U.S. 951 (1998).

3. Thereafter, these cases proceeded in the Court of
Federal Claims. Each case was dismissed by that court for
failure to state a claim. See SMUD Pet. App. 69a-91a;
MYAP Pet. App. 17a-39a; OPPD Pet. App. 17a-39a; Com Ed
Pet. App. 85a-124a.

Each petitioner appealed to the Federal Circuit. Oral
arguments in Sacramento Municipal, Maine Yankee, and
Omaha Power were separately conducted on the same day
before the same panel of the Federal Circuit. The separate
and later appeal in Commonwealth Edison proceeded before
a different panel of the Federal Circuit; after that panel
argument, the Federal Circuit swa sponte ordered that
Commonwealth Edison be heard en banc. SMUD Pet. App.
17a.

4. The en banc court affirmed the dismissal in Common-
wealth Edison. SMUD Pet. App. 17a-68a. On the basis of
the en banc court’s decision in Commonwealth Edison, the
panel hearing the appeals in the other three cases also
affirmed the dismissal of those cases. /d. at la-16a.

3 Judge Mayer dissented from the panel's decision in Yankee Atomic,
but he would not have ruled that EPACT constituted a breach of contract.
To the contrary, he agreed with the panel majority that “[o|nce a contract
is completed, the contractual relationship ends and there is no privity
between the parties,” and thus the utilities “cannot prevail on [the] claim
that the government breached the contracts at issue years after they were
finished.” 112 F.3d at 1582; see also id. at 1584 (“But this is not a breach of
contract case.”). Rather, Judge Mayer argued that the EPACT assess-

~ ments contravened substantive due process. See id. at 1585.

o2)

a. The en banc court first rejected the utilities’ argument
that the EPACT assessments constitute a taking of their
property without just compensation. The court noted that,
in Eastern Enterprises v. Apfel, 524 U.S. 498 (1998), five
Justices (Justice Kennedy concurring in the judgment, and
four dissenting Justices) concluded that “regulatory actions
requiring the payment of money are not takings” (SMUD
Pet. App. 36a)—a result in accord with the Federal Circuit’s
own pre-Eastern Enterprises precedent (id. at 36a-37a) as
well as decisions of other circuits rendered after Hastern
Enterprises (id. at 36a n.10). The court thus concluded that,
“while a taking may occur when a specific fund of money is
involved, the mere imposition of an obligation to pay money,
as here, does not give rise to a claim under the Takings
Clause of the Fifth Amendment.” Jd. at 37a.

b. The court also rejected the utilities’ breach of contract
claims, in reliance on its previous decision in Yankee Atomic,
supra. As in Yankee Atomic, the court ruled here that “the
imposition of the special assessments [under EPACT] was a
lawful exercise of Congress’s taxing power under the sover-
eign acts doctrine,” and that DOE’s contracts with the
utilities “did not include an unmistakable promise that pre-
cluded the Government from later imposing an assessment
upon all domestic utilities that employed the DOE’s uranium
enrichment services.” SMUD Pet. App. 38a.

©. Finally, the court addressed at length and rejected the
argument that the EPACT assessments violate substantive
due process. SMUD Pet. App. 39a-67a. The court initially
ebserved that, although the EPACT assessments are retro-
active, that point by itself does not render them unconstitu-
tional, for, as this Court has made clear, due process is
satisfied “simply by showing that the retroactive application
of the legislation is itself justified by a rational legislative
purpose.” Jd. at 40a (citation omitted). The court found that
standard satisfied in the case of EPACT, because the

assessments are based on “a congressional determination to
impose liability on companies that received a benefit [the
uranium enrichment services], the production of which bene-
fit contributed to a societal problem.” Jd. at 43a.

Summarizing this Court’s decisions (including Eastern
Enterprises), the court concluded that retroactive obliga-
tions to pay money satisfy substantive due process as long as
“(1) Congress reasonably concluded that the party subjected
to retroactive obligations benefited from activity that contri-
buted to a societal problem, and liability is not disproportion-
ately imposed on that party; and (2) the imposition of
retroactive liability would not be contrary to that party’s
reasonable expectations.” SMUD Pet. App. 47a. The court
found the first condition “easily” satisfied, as the utilities
“certainly benefited from the government’s provision of
enrichment services.” Jbid. As the court noted, the utilities
“could hardly have operated nuclear reactors without the
benefit of uranium enrichment services from the United
States government or some other approved source.” Jd. at
48a. Moreover, the processing of uranium for the utilities
contributed to a_societal problem by contributing “to in-
creased costs associated with” decontamination. Jbid. Nor,
the court ruled, were the remediation costs imposed on the
utilities severely disproportionate to the benefit they
received from the enrichment services; EPACT made the
utilities responsible for only a third of those costs (and each
utility was assessed only for the proportion of enriched
uranium that it actually used), even though Congress re-
ceived evidence that enriched uranium production at the
DOE facilities had been divided equally between the govern-
mental and commercial sectors. /d. at 49a.

The court further concluded that the EPACT assessments
do not violate any reasonable expectation on the part of the
utilities that, as a result of their contracts with DOE, they
were entitled-to immunity from any future liability for the

10

cost of decontamination of the DOE facilities. SMUD Pet.
App. 50a-67a. The court observed that the utilities operated
in a highly regulated industry where it was reasonable to
“expect liability for remediation costs” (id. at 52a), and that
the utilities were fully “aware of the hazardous nature of the
materials” and that there would be a need to decontaminate
the DOF facilities (¢d. at 53a).

The court also stressed that the regulatory environment
at the time that utilities submitted uranium to DOE for
processing placed the utilities on notice of the possible
imposition of retroactive remediation liability. The Compre-
hensive Environmental Response, Compensation, and Liabil-
ity Act of 1980 (CERCLA), 42 U.S.C. 9601 et seqg., made clear
that a party that arranges for the treatment or disposal of a
hazardous substance may be liable for environmental dam-
age caused by that substance, even if that party itself did not
perform that treatment or disposal. See SMUD Pet. App.
56a-57a. CERCLA, in turn, is consistent with principles of
common law nuisance liability and strict liability for handling
of ultrahazardous materials, id. at 60a-62a, especially the
principles set forth in the Restatement (Second) of Torts
§ 472b (1965), which made clear that “those arranging for
processing of hazardous materials could potentially have
been liable under the common law for environmental dam-
ages arising from the processing.” SMUD Pet. App. 6la.
Thus, the court concluded, the utilities “could not have rea-
sonably expected that Congress would not enact legislation
imposing remediation costs on the utilities submitting
uranium for processing.” Jd. at 62a.

ARGUMENT

The court of appeals correctly rejected petitioners’
contract-law and constitutional challenges to the special
decontamination assessments imposed by EPACT. That
decision also does not conflict with any decision of this Court

11

or any other court of appeals. Further review is therefore
not warranted.

1. Petitioners renew the argument rejected by the
Federal Circuit in Yankee Atomic, supra, that the EPACT
assessments breached their uranium enrichment contracts
with DOE by retroactively increasing the price of enrich-
ment services. This Court-denied review of the same conten-
tion in Yankee Atomic, see pp. 5-7, supra, and there is no
basis in this case for a different result. Moreover, the lower
courts properly rejected that contract claim.

a. First, as all members of the Yankee Atomic panel
observed, no claim for breach of contract may be brought
based on contracts that have already been fully performed.
See 112 F.3d at 1573 n.2; id. at 1582 (Mayer, J., dissenting);
see also John J. Kirlin, Inc. v. United States, 827 F.2d 1538,
1541 (Fed. Cir. 1987); Mulholland v. United States, 361 F.2d
237, 239-240 (Ct. Cl. 1966). Petitioners’ complaints allege
that, with the exception of one outstanding contract between
DOE and Commonwealth Edison, the contractual relation
between petitioners and the government had already ter-
minated.*

Because (with the one exception) the contractual relations
between the utilities and the government terminated before
these actions were brought, this case does not present an
appropriate occasion for the Court to examine further the
sovereign-acts and unmistakability doctrines. The bulk of
petitioners’ contract claims could have been rejected without
recourse to those doctrines, which are defenses available to
the government against attempts to require the government
to perform its contractual obligations, or to recover for the
government’s alleged breach of contractual obligations. See

4 See SMUD C.A. App. 24 (4 1); MYAP C.A. App. 35 (4 47), 36 (44 50-
51); OPPD C.A. App. 16 (4 44); Com Ed C.A. App. 521 (¥ 13), 534 (¥ 45),
535 (¥ 49).

12

Winstar, 518 U.S. at 870-871 (opinion of Souter, J.); id. at
920-921 (Scalia, J., concurring in the judgment).

For the same reason, there is no merit to petitioner
Omaha Power’s argument (OPPD Pet. 21-22) that the deci-
sion below conflicts with the courts’ application of the
sovereign-acts doctrine in Kimberly Associates v. United
States, 261 F.3d 864 (9th Cir. 2001), and RTC v. FSLIC, 25
F.3d 1493 (10th Cir. 1994). In each of those decisions, the
court made clear that the sovereign-acts doctrine “operates
to insulate the government from liability for certain inabil-
ities to perform contractual obligations.” See RTC, 25 F.3d
at 1501; see also Kimberly Assocs., 261 F.3d at 870 (char-
acterizing statute under consideration as “a partial repudia-
tion by Congress of its contractual obligation to perform”).
Here, however, there is no question of the government’s
failure to perform under its contracts with petitioners; DOE
has already performed its obligations to provide enrichment
services.

b. In any event, the court of appeals’ application of the
sovereign-acts and unmistakability doctrines was correct.
The EPACT special assessment legislation is a “sovereign
act.” The assessments fall on the utilities that actually used
the enriched uranium and thereby benefited from DOE’s
enrichment services, not the entities that directly purchased
the uranium from DOE. Thus, EPACT cannot be viewed as
a retroactive price increase of the contracts between DOE
and the purchasing utilities. Rather, it is legislation
designed to spread the costs of decontamination and decom-
missioning among the utilities that benefited from the pro-
gram that caused those problems. See SMUD Pet. App. 61a;
Yankee Atomic, 112 F.3d at 1580-1581.

Furthermore, because petitioners seek damages in the
entire amount of the assessments that they are required to
pay under EPACT, they effectively seek an exemption from,
or an injunction against, the operation of EPACT as applied

13

to them. Petitioners must therefore overcome the unmis-
takability doctrine in its strongest form. See Winstar, 518
U.S. at 881-882 (opinion of Souter, J.); id. at 916-917 (Breyer,
J., concurring); id. at 921 (Scalia, J., concurring in the judg-
ment). As the Federal Circuit explained in Yankee Atomic,
the contracts simply did not provide that the government
would forego any assessments in the future on the nuclear
power industry to address the cost of decontamination. See
112 F.3d at 1569. The contracts were therefore subject to
subsequent legislation passed by Congress. See Bowen v.
Public Agencies Opposed to Soc. Sec. Entrapment, 477 U.S.
41, 52 (1986).

Nor did the government agree to indemnify the utilities
against the costs of regulatory changes or legislative enact-
ments. In Winstar, by contrast, this Court ruled that the
United States, through guarantee clauses in contracts, had
undertaken to assume the risk of, and to indemnify the
acquiring thrifts for, future changes in regulatory policy.
See 518 U.S. at 868-869, 871, 881-883 (opinion of Souter, J.);
id. at 911, 918 (Breyer, J., concurring); cf. id. at 919-920, 923
(Scalia, J., concurring in the judgment). No such guarantee
clauses existed in petitioners’ contracts with DOE.

2. a. Petitioners argue that the financial impact of the
EPACT assessments on them constitutes a taking of their
property without just compensation. Petitioners’ taking
claim, however, must fail at threshold, for as five Justices of
| this Court made clear in Eastern Enterprises, a mere obli-
gation to pay an undifferentiated amount of money, not
| drawn from a specific identifiable fund, is not properly
analyzed as a taking at all. See Eastern Enterprises, 524
U.S. at 539-547 (Kennedy, J., concurring in the judgment and
dissenting in part); id. at 554-557 (Breyer, J., dissenting).
That point follows from the fact that, “[a]s its language
indicates, * * * [the Just Compensation Clause] does not
prohibit the taking of private property, but instead places a

———eEOw

14

condition on the exercise of that power.” First English
Evangelical Lutheran Church v. County of Los Angeles, 482
U.S. 304, 314 (1987).’

The concern of the Just Compensation Clause is therefore
not in preventing government action, but rather ensuring
that compensation is paid when the government appropri-
ates private property interests to serve the public good.
First English, 482 U.S. at 314. Petitioners, however, chal-
lenge the constitutional validity of Congress’s decision to
enact the EPACT special assessments. To make a taking
claim, petitioners would have to raise the highly contrived
contention that Congress had impermissibly failed to offer
them monetary compensation in the precise amount of the
special assessment that Congress had ordered them to pay.
The Court rejected a very similar contention in United
States v. Sperry Corp., 493 U.S. 52 (1989), where it concluded
that the government’s imposition of a service fee for use of
services in the U.S.-Lran Claims Tribunal, in the form of a
percentage deduction from monetary awards made by the

* The taking issue in this case is not distinguishable from Eastern
Enterprises (in which five Justices found a taking analysis inapplicable) on
the basis that Eastern Enterprises involved an obligation that one private
party pay money to another private party, whereas this case involves an
obligation to pay money to the government. Justice Kennedy expressly
rejected the relevance of that point in Eastern Enterprises: “The cireum-
stance that the statute does not take money for the Government but
instead makes it payable to third persons is not a factor I rely upon to
show the lack of a taking.” 524 U.S. at 543 (Kennedy, J., concurring in the
judgment and dissenting in part). The four other Justices who agreed that
no valid taking claim was raised in Eastern Enterprises did remark that
the case involved an obligation to pay money to a private party. See id. at
555 (Breyer, J., dissenting). They also observed, however, that one of the
reasons that it was wrong to conceptualize the monetary obligation in
Eastern Enterprises as a taking was that such a characterization might
well lead to the conclusion that all taxes could potentially be considered
takings. See id. at 556 (Breyer, J., dissenting).

15

Tribunal, was not a taking of property that required just
compensation. As the Court explained:

It is artificial to view deductions of a percentage of a
monetary award as physical appropriations of property.
Unlike real or personal property, money is fungible.
* * * If the deduction in this case were a physical
occupation requiring just compensation, so would be any
fee for services, including a filing fee that must be paid in
advance.

Id. at 62 n.9. The Court in Sperry also distinguished (id. at
62) cases such as Webb’s Fabulous Pharmacies, Inc. v. Beck-
with, 449 U.S. 155, 164-165 (1980), where the Court applied 4
taking analysis to interest generated from a specific res, a
separately identifiable fund of money.”

Perhaps recognizing the force of that point, petitioner
Commonwealth Edison stretches to find a specific property
interest that may have been taken, suggesting (Com Ed Pet.
13) that the requisite “property” is the “stream of income”
supposedly created by the passing on of the cost of the
assessments to consumers of electrical power. EPACT,
however, does not require the payment of the assessments
out of any such “stream of income” or indeed from any
particular identifiable source or fund of money. Rather, the
utilities are generally liable for EPACT assessments without
regard to whether the assessments are passed on to

6 Petitioner MYAP argues (MYAP Pet. 21) that cases such as Webb's
are not distinguishable from this case because Webb's involved a taking of
interest earned on a specific fund of money, not the fund itself. The Court
made clear in Webb's, however, that it decided that case based on the
common law rule that “any interest * * * follows the principal” and
becomes part of the fund itself. See Webb's, 449 U.S. at 162; see also — se
Phillips v. Washington Legal Found., 524 U.S. 156, 165-168 (1998) (using
same rule to analyze alleged taking of interest earned on attorney trust
accounts).

16

consumers and without reference to the source of the funds
used to pay the assessments. See Sperry, 493 U.S. at 62 n.9.

b. Even if a taking analysis were applicable to the
EPACT assessments, they would not be invalid. A taking by
regulation or legislation may occur if the government goes
“too far” in interfering with rights of property ownership.
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415 (1922).
Regulatory taking claims are generally subject to the three-
part analysis set forth in Penn Central Transportation Co.
v. City of New York, 438 U.S. 104, 124 (1978), which takes
into account (1) “the character of the governmental action,”
(2) “[t]he economic impact of the regulation on the claimant,”
and (3) “the extent to which the regulation has interfered
with distinct investment-backed expectations.” Those fac-
tors make clear that the EPACT assessments are not
takings.’

First, the nature of the government’s action is “critical” in
determining whether a taking occurred. Keystone Bitumi-
nous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 488 (1987).
EPACT assessments are “very similar to * * * a general
tax that falls proportionately on all utilities that benefited
from the DOEF’s uranium enrichment services.” Yankee
Atomic, 112 F.3d at 1576. This Court has stressed, however,
that taxes are exactly the kind of governmental action that

7 The EPACT assessments cannot properly be viewed as a physical
appropriation or occupation of property that this Court has characterized
as a per se taking. Cf. Loretto v. Teleprompter Manhattan CATV Corp.,
458 U.S. 419, 441 (1982). Even the four Justices who applied a taking
analysis to the legislatively imposed monetary obligation at issue in
Eastern Enterprises declined to characterize that liability as a per se
taking. See Eastern Enterprises, 524 U.S. at 522, 530 (opinion of
O'Connor, J.); see also Tahoe-Sierra Preservation Council, Inc. v. Tahoe
Reg'l Planning Agency, No. 00-1167 (Apr. 23, 2002), slip op. 17-28
(reaffirming limited reach of per se taking analysis to physical occupations
and appropriations of property). :

17

are least likely to be considered takings: “Government
hardly could go on if to some extent values incident to
property could not be diminished without paying for every
such change in the general law, and this Court has accord-
ingly recognized, in a wide variety of contexts, that govern-
ment may execute laws or programs that adversely affect
recognized economic values. Exercises of the taxing power
are one obvious example.” Penn Central, 438 U.S. at 124
(emphasis added; citations omitted).

Second, the economic impact of the assessments on
petitioners is proportionate to their prior experience with
the uranium enrichment services that are the object of the
legislation. EPACT specifically allocates liability in direct
proportion to the utilities’ previous use of enriched uranium.
See p. 5, supra. In addition, EPACT moderates the impact
of the assessments on petitioners by mandating that a utility
“shall” be allowed to fully recover the special assessments
from its ratepayers as a “necessary and reasonable current
cost of fuel.” 42 U.S.C. 2297g-1(g). Because the pass-
through mechanism is established by federal law, state
regulators are preempted from disregarding it. See, e.g.,
Mississippi Power & Light Co. v. Mississippi, 487 U.S. 354,
369-372 (1988). Thus, petitioners have a federal right to pass
through the impact of the EPACT assessments to their
customer base. Cf. Eastern Enterprises, 524 U.S. at 527, 531
(opinion of O’Connor, J.) (noting that regulated entity’s
ability to moderate impact of liability by passing on obliga-
tion is relevant to taking analysis, but finding no “right of
reimbursement” in that case).

Finally, the assessments do not contravene any reason-
able expectation on the part of petitioners that they would
be immune from future governmental assessments requiring
contributions to meet the costs of decontamination of the
enrichment facilities. As the court of appeals explained,
enriched uranium has long been known to be extremely

18

hazardous; it has long been understood that the enrichment
process would leave a need for decontamination; and the
nuclear power industry has always been strictly regulated.
See SMUD Pet. App. 52a-54a. EPACT was designed “to
implement solutions to our nuclear waste and uranium
enrichment problems,” H.R. Rep. No. 474, supra, Pt. 1, at
132, and a nuclear utility using enriched uranium could
hardly expect to be immune from contributing to such solu-
tions. “Those who do business in [a highly regulated field]
cannot object if the legislative scheme is buttressed by sub-
sequent amendments to achieve the legislative end.” Con-
nolly v. Pension Benefit Guar. Corp., 475 U.S. 211, 227
(1986).

Nothing in the legislation or regulations governing the
nuclear power program could have created a reasonable
expectation that nuclear power companies would be exempt
from future assessments for decontamination of uranium
enrichment plants. To the contrary, the strict regulation of
the industry put them on notice that they could be liable in
the future for assessments like those at issue here. And as
the court of appeals also explained in Yankee Atomic, 112
F.3d at 1580-1581, petitioners’ contracts with DOE for
uranium enrichment services also created no contract-based
expectation that they would be immune from sharing in the
future cost of decontamination. |

ce. Petitioners erroneously suggest (Com Ed Pet. 16) that
the decision below, finding a taking analysis inapplicable, is
contrary to decisions of other circuits that have analyzed
monetary obligations to the government under the regula-
tory taking doctrine. In United States v. Hercules, Inc., 247
F.3d 706 (8th Cir.), cert. denied, 122 S. Ct. 665 (2001), the
court expressly declined to address the taking claim on the
ground that the extent of the challenged monetary liability
was uncertain. Although the court remarked that any taking
analysis would likely be “ad hoc and fact intensive,” id. at 722

19

(citing Eastern Enterprises, 524 U.S. at 523 (opinion of
O’Connor, J.)), it did not address the logically anterior
question whether the liability should be analyzed as a taking
at all. In United States Fidelity & Guaranty Co. v.
McKeithen, 226 F.3d 412 (5th Cir. 2000), cert. denied, 532
U.S. 922 (2001), the court ruled that a retroactive adjust-
ment to Louisiana’s workers’ compensation scheme was an
invalid taking, but the court stressed (after considering the
significance of Justice Kennedy’s separate opinion in Eastern
Enterprises) that the case before it involved the taking of
“an identifiable property interest or fund,” namely, a “spe-
cific fund of benefits.” Jd. at 420. That important point dis-
tinguishes that case from this one, which involves a general
liability that petitioners may and must meet out of any of
their assets.®

8. Petitioners contend that the EPACT assessment obli-
gation violates substantive due process because of its retro-
active effect. Petitioners make essentially three arguments
in support of that contention. First, they argue that they
had a reasonable expectation, based in their fixed-price con-
tracts with DOE, that the costs of decontaminating the
enrichment facilities would be entirely absorbed by the
government. Second, they contend that the extent of the
retroactivity, by itself, renders the assessments invalid.
Third, they argue that they cannot be deemed responsible
for the contamination because the facilities were already
contaminated by the government’s enrichment of uranium

8 In addition, the Louisiana scheme invalidated in United States
Fidelity & Guaranty is crucially different from the EPACT assessments
in that many of the workers’ compensation insurance companies affected
by the retroactive change in the law effectively had no way to pass on the
increased assessments to any customer base in the State, for they had left
the business of writing insurance in Louisiana. See 226 F.3d at 418. By
contrast, petitioners have a federal right to pass on the EPACT assess-
ments to their utility customers. See p. 17, supra.

20

for its own military needs before the government began
offering commercial enrichment services to nuclear utilities.
Each of those arguments is without merit.”

a. As this Court has made clear on numerous occasions,
retroactive economic legislation enjoys a presumption of
validity. See, e.g., Pension Benefit Guar. Corp. v. R.A. Gray
& Co., 467 U.S. 717, 729 (1984); Usery v. Turner Elkhorn
Mining Co., 428 U.S. 1, 15-16 (1976). That presumption of
validity is not overcome merely because the law upsets
“otherwise settled expectations” or imposes new liability
based on past acts. Jd. at 16. Of course, “[i]t does not follow
* * * that what Congress can legislate prospectively it can
legislate retrospectively,” and “(t]he retro[active] aspects of
legislation * * * [also] must meet the test of due process.”
Id. at 16-17. But “[pJrovided that the retroactive application
of a statute is supported by a legitimate legislative purpose

9 Petitioners also argue (SMUD Pet. 23-24; MYAP Pet. 17-19) that the
EPACT assessments require special scrutiny under the Due Process
Clause because (petitioners maintain) they operate as taxing provisions.
But as this Court explained in United States v. Carlton, 512 U.S. 26 (1994),
and as the court of appeals in this case observed (SMUD Pet. App. 41a),
the cases on which petitioners rely, subjecting retroactive taxes to
heightened scrutiny, “were decided during an era characterized by
exacting review of economic legislation under an approach that has long
since been discarded.” Carlton, 512 U.S. at 34 (internal quotation marks
omitted). Carlton made clear that the rational-basis due process test for
retroactive application of taxing statutes “is the same as that generally
applicable to retroactive economic legislation.” Jd. at 30. Moreover, the
tax cases on which petitioners rely all involved taxes for the purposes of
raising general revenues for the support of government. This case
involves an assessment for a dedicated purpose, namely, the decontamina-
tion and decommissioning of enrichment facilities from which petitioners
benefited. Thus, even if, as petitioners contend, a “wholly new tax” for the
purpose of raising general revenues could not be applied retroactively, see
MYAP Pet. 18, that point would not apply to an assessment, such as the
EPACT assessment, that is intended and necessary to implement a
specific regulatory scheme.

21

furthered by rational means, judgments about the wisdom of
such legislation remain within the exclusive province of the
legislative and executive branches.” R.A. Gray, 467 U.S. at
729.

It was legitimate and rational for Congress to require
utilities that obtained their enriched uranium ffom govern-
ment-vperated facilities to contribute to the cost of decon-
taminating those facilities. The substantial cost of deconta-
mination was not anticipated at the time the government
provided those enrichment services, and Congress was not
precluded from acting to spread the “actual, measurable cost
of [a] business” that the utilities were able to avoid in the
past. Turner Elkhorn, 428 U.S. at 19. “(T]he costs of large,
unrecognized sccietal problems are frequently spread among
those who benefited from the source of the problem,”
Yankee Atomic, 112 F.3d at 1576 n.6, and the EPACT
assessment is “the Government’s way of spreading the costs

of the later discovered decontamination and decommission-

ing problem on all utilities that benefited from the Govern-
ment’s service, whether or not those services were acquired
by contract from the Government,” id. at 1580.

Moreover, Congress understood that the utilities had
received two substantial benefits (beyond just receiving the
uranium itself) from the government’s enrichment services.
First, DOE was required to price the enrichment services on
a cost-recovery basis; the program was not intended as a
profit-making enterprise. See 42 U.S.C. 2201(v)(B)(iii)
(1988). Thus, the utilities received below-market pricing for
the services. Second, by obtaining the use of the govern-
ment’s enrichment facilities, utilities were able to avoid the
even greater costs of building enrichment plants of their own
and meeting their own decontamination costs. See 138 Cong.
Rec. at 32,073 (remarks of Rep. Sharp); H.R. Rep. No. 474,
supra, Pt. 1, at 144-145.

22

Petitioners in any event did not have a reasonable
expectation that they would be immune from legislation
requiring them to contribute to the cost of decontaminating
the facilities from which they obtained their enriched ura-
nium. Petitioners’ contracts with DOE set a price for ura-
nium enrichment services, but the contracts did not address
future assessments for decontamination and decommission-
ing at all—much less purport to foreclose any future liability
that might prove to be necessary to protect the public
health and safety. There accordingly was no settled expec-
tation to upset. See Yankee Atomic, 112 F.3d at 1575-1582;
ef. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005-1006,
1008-1010 (1984).

Nor did the legislative and regulatory environment at the
time the enrichment services were provided suggest that
petitioners could escape liability for decontamination costs.
To the contrary, as the court of appeals explained, based on
its comprehensive review of the law of liability for hazardous
substances (SMUD Pet. App. 54a-67a), it was entirely fore-
seeable, well before the enactment of EPACT, that the
utilities would have to contribute to the decontamination of
the enrichment facilities. First, CERCLA, which was en-
acted in 1980, and which itself operates retroactively as well
as prospectively, contains a principle that one who arranges
for the treatment or disposal of a hazardous substance may
be liable for remediation costs, even if that party did not
conduct the processing or disposal itself. See id. at 56a-57a."°

10 Petitioner Commonwealth Edison argues (Com Ed Pet. 21-22) that
CERCLA would not support arranger liability for one in its position. It
argues, for example (id. at 21), that only one who maintains ownership or
control over the hazardous substance may be subject to arranger liability.
But the arranger liability cases cited by the court of appeals (SMUD Pet.
App. 56a-57a) do not turn on which party maintained technical title to the
processed and disposed materials, and such an inquiry would make espe-
cially little sense in a situation like this one, where many of the customers

23

Second, even before CERCLA, principles of common law
liability, as summarized in the Restatement (Second) of
Torts § 427b (1965), made clear that “those arranging for
processing of hazardous materials could potentially have
been liable under the common law for environmental dam-
ages arising from the processing.” See SMUD Pet. App. 61a.
b. Petitioners lay great stress on the fact that EPACT
has a retroactive reach of up to 33 years, as the government
began offering commercial enrichment services in 1969. See
Com Ed Pet. 1-2, 8, 23-24. This Court’s due process decisions
make clear, however, that a statute’s retroactive reach is
less significant than the justification for imposing retroactive
liability. Indeed, the Court has upheld the retroactive
application of a statute that reached back much longer than
the EPACT assessments. In Turner Elkhorn, the Court
upheld the retroactive application of the black lung benefit
program, which, for benefit claims filed after July 1, 1973,

furnished the unenriched uranium to DOE for processing and then
received the enriched uranium afterwards. See Com Ed Pet. 2. The
enrichment services were plainly performed with the intent that the
utilities would receive the enriched uranium, even if DOE heid technical
title to the uranium during the enrichment process Com Ed also argues
(id. at 21 n.17) that recent cases have rejected CERCLA liability for
“mere purchases of products.” However, the case cited by Com Ed for
that proposition, Concrete Sales & Servs., Inc. v. Blue Bird Body Co., 211
F.3d 1333 (11th Cir. 2000), is quite different from this case. In that case,
the purchaser of services (electroplating services) furnished and received
a product that was not, either before or after the electroplating, a hazard-
ous substance. See id. at 1339. This case, however, involves processing of
uranium, which is the quintessential ultrahazardous substance. See
SMUD Pet. App. 62a. In any event, our point is not that EPACT follows
every aspect of CERCLA liability, but rather that CERCLA’s provision
for arranger liability for processing of hazardous substances put nuclear
utilities on notice that they could be required to contribute to the costs of
remedying contamination caused by enrichment services that they had
ordered.

24

made mine operators responsible for miners’ black-lung
benefits regardless of the date the miner left employment,
see 428 U.S. at 8-10—and indeed, benefits had been awarded
to miners who had left mine work as much as 50 years
earlier. See id. at 40 n.4 (Powell, J., concurring in part and
concurring in the judgment in part). Similarly, CERCLA
has an unlimited retrospective reach, but no court of appeals
has invalidated that statute on retroactivity grounds. See
United States v. Monsanto Co., 858 F.2d 160, 173-174 (4th
Cir. 1988), cert. denied, 490 U.S. 1106 (1989).

Rather than cut off the retroactive effect of EPACT at an
arbitrary date, Congress determined that each nuclear util-
ity’s liability for the special assessments should be propor-
tionate to the amount of enriched uranium it had actually
received and retained. That approach was a fair and rational
means of allocating the utilities’ responsibility to contribute
to decontamination costs, by which each utility’s liability is
correlated to the extent that it derived a benefit from the
enrichment services that caused the contamination problem.
The utilities are assessed only for decontamination and
decommissioning costs related to the uranium enrichment
program, from which they benefited, in direct proportion to
their use of enrichment services. They are not assessed for
unrelated costs, such as the cost of remedying general pollu-
tion."’ Moreover, contrary to petitioners’ assertion that

1! Petitioners argue (Com Ed Pet. 4, 17-18, 27 n.20) that Congress
improperly required them to contribute to the cost of cleaning up thorium
and uranium processing sites unrelated to the uranium enrichment ser-
vices that they purchased from DOE. That contention is incorrect. The
overall statutory scheme makes clear that Congress intended petitioners’
contributions to the Fund to be applied only to cleaning up DOE’s uranium
enrichment facilities. EPACT provides that the utilities’ special assess-
ments were intended for “decontamination and decommissioning of the
Department’s gaseous diffusion [uranium] enrichment facilities,” see 42
U.S.C. 2297g-1(g) (referring to utilities’ right to pass-through to con-

25

EPACT’s retroactive assessments are inconsistent with
Eastern Enterprises, the plurality opinion in that case
expressed no doubt that receipt of a benefit is a rational
basis for the imposition of retroactive liability to address a
societal problem associated with that benefit. See 524 U.S.
at 536 (opinion of O’Connor, J.) (noting that Congress could
legitimately have made miners’ former employers liable for
the miners’ employment-related health-care costs, given that
employers benefited from miners’ labor; citing Turner
Elkhorn).

c. At bottom, petitioners’ substantive due process chal-
lenge to the EPACT assessments can be reduced to their
contention that, because the DOE enrichment plants were
already contaminated from prior military uses before the
government began offering commercial enrichment services,
the government must bear all the cost of remediation—even
though petitioners also concede that enriching the utilities’
uranium caused the same kind of contamination as did
enrichment for military purposes (or would have caused the
same kind of contamination, had the facilities not already
been contaminated). See SMUD Pet. 22a & n.2. That
argument is unavailing.

sumers “{a]ny special assessment levied under this section * * * for
decontamination and decommissioning”), and the subchapter of EPACT
containing the special-assessment provision also defined the term
“decontamination and decommissioning” to mean activities “undertaken to
decontaminate and decommission inactive uranium enrichment facilities.”
See EPACT § 901, 106 Stat. 2923 (adding 42 U.S.C. 2297(6) (1994),
repealed by Act of Apr. 26, 1996, Pub. L. No. 104-134, Tit. III, ch. 1, subch.
A, § 3116(a)(1), 110 Stat. 1321-349). Although the Fund established by
EPACT is also the source of monies used to clean up thorium and uranium
processing sites, see 42 U.S.C. 2296a-2(b), the monies for cleaning up
thorium and uranium processing sites are to be drawn from the gov-
ernment’s contributions to the Fund, see 42 U.S.C. 2296a-1; 42 U.S.C.
2296a-2 (1994 & Supp. V 1999), and the utilities have not been assessed for
that purpose.

26

Nothing in the Due Process Clause required Congress to
assign financial responsibility for clean-up costs only to the
first user whose services contributed to the contamination of
an enrichment facility, when all subsequent users of the
facility received the same services that cause that kind of
contamination. Congress could perhaps have adopted a rule
that the first user of DOE’s enrichment services should pay
for the entire cost of decontamination, but it determined
instead that the costs should be borne collectively by all of
those entities whose uses of the enrichment services would
have contributed to the contamination of the enrichment
facilities, in proportion to the benefit the entity received
from those enrichment services. “It is surely proper for
Congress to legislate retrospectively to ensure that costs of
a program are borne by the entire class of persons that
Congress rationally believes should bear them.” Sperry, 493
U.S. at 65 (emphasis added).

Indeed, petitioners are arguably required to pay consid-
erably less than their fair share of the decontamination costs,
for responsibility for 68 percent of those costs is assigned by
EPACT to the government. As the court of appeals noted,
“these utilities are obligated to pay only about a third of the
remediation costs, even though evidence was presented [to
Congress] that the ‘production from these plants ha[d] been
divided almost evenly between the government and com-
mercial sectors.’” SMUD Pet. App. 49a (quoting H.R. Rep.
No. 474, supra, Pt. 1, at 144).”

12 Petitioner MYAP argues (MYAP Pet. 25 n.17) that the government
has not in fact contributed its allocated share to EPACT, since annual
appropriations to the Fund in some years have been somewhat less than
the amounts authorized by EPACT. In fact, we have been informed by
DOE that the government’s total contributions to the Fund through Fiscal
Year 2001 amount to approximately $2.684 billion, whereas amounts con-
tributed by the utilities pursuant to the EPACT assessments amount to
approximately $1.482 billion. Thus, the government has contributed

27

Where the cost allocation scheme chosen by Congress is
rational, courts are not empowered to engage in an eviden-
tiary fact-finding inquiry, as demanded by petitioners, to
determine whether the allocation of costs should or could be
different. Whether some other approach would have been
wiser is not a question of constitutional dimension, but is
rather a policy question for Congress, not the courts. See
Turner Elkhorn, 428 U.S. at 19 (“It is enough to say that the
Act approaches the problem of cost spreading rationally;
whether a broader cost-spreading scheme would have been
wiser or more practical under the circumstances is not a
question of constitutional dimension.”).

CONCLUSION
The petitions for a writ of certiorari should be denied.

Respectfully submitted.

THEODORE B. OLSON
Solicitor General

ROBERT D. MCCALLUM, JR.
Assistant Attorney General

DOUGLAS N. LETTER

MARK W. PENNAK

JAMES G. BRUEN, JR.

MATTHEW J. TROY
Attorneys

APRIL 2002

considerably more than half of the amount in the Fund, even though Con-
gress understood that about half of DOE’s enrichment services were
attributable to the commercial sector.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1035%3A2. Public record. Not legal advice.