November 05, 2014

In its decade-long efforts for firm client Energy Northwest, Jenner & Block secured a settlement requiring the Department of Energy (DOE) to pay almost $23.6 million in damages for its continued failure to accept used nuclear fuel from the company.  The settlement also includes an annual claims process for Energy Northwest to submit additional cost claims to the government through 2016.

DOE contractually agreed in 1983 to dispose of used nuclear fuel from Energy Northwest and other nuclear utilities, beginning January 31, 1998, in exchange for the utilities’ payment of fees based on the amount of electricity generated.  To date, DOE has failed to do so.  In 2004, Jenner & Block filed a lawsuit against the DOE on behalf of Energy Northwest, seeking damages for the company’s construction and operation of interim used fuel storage facilities as a result of DOE’s failure to accept used nuclear fuel from Energy Northwest’s Columbia Generating Station in Richland, Washington.  In 2006, the U.S. Court of Federal Claims ruled on summary judgment that DOE breached its contract with Energy Northwest, and in 2010, after a three-week bench trial held in 2009, the court awarded Energy Northwest $56.859 million in damages.  Following an appeal of a portion of the award, the award was  reduced in 2011 to a $48.7 million judgment—an amount paid by the Government in 2011.

Energy Northwest’s 2011 judgment addressed its interim used fuel storage costs through August 2006.  The current $23.6 million settlement from DOE stems from a second action filed in July 2011 for DOE’s continuing breach of contract and concerns the costs that Energy Northwest incurred to store used fuel on an interim basis from September 2006 through June 2012. The settlement followed a March 2014 ruling in which the U.S. Court of Federal Claims granted summary judgment to Energy Northwest, awarding it $19.3 million of its damages claim and setting the remainder of the claim for trial.  The August 2014 settlement adds $4.3 million to the March 2014 ruling, and will help Energy Northwest avoid filing another lawsuit to obtain its damages incurred between July 2012 and December 2016.

The firm’s team was led by Partner Norman M. Hirsch, and included Partners David Jiménez-Ekman and Christopher Tompkins, all of whom represented Energy Northwest from the inception of the case in 2004, as well as Partner April A. Otterberg, who joined the team in 2008.  All four were part of Energy Northwest’s successful trial team in 2009.  Partner William D. Heinz also provided advice and counsel on the matter since the filing of Energy Northwest’s original lawsuit in 2004.