March 03, 2010

In a victory for Firm client Energy Northwest, the U.S. Court of Federal Claims on February 26 entered judgment awarding the utility $56.859 million – all of the damages sought – for the failure of the Department of Energy (DOE) to accept and dispose of spent nuclear fuel (SNF). 

Energy Northwest is a municipal corporation and joint operating agency of the State of Washington which generates electricity for its member public utility districts and municipalities.  Among other power generating assets, Energy Northwest owns and operates the Columbia Generating Station, a 1,150 megawatt nuclear reactor located in southeast Washington State.  As required by the Nuclear Waste Policy Act, in 1983 Energy Northwest and DOE signed a contract which required the DOE to accept and dispose of SNF generated by commercial nuclear power plants beginning in 1998 in exchange for ongoing payment of fees.  DOE failed to meet the 1998 deadline, and is not anticipated to meet its obligation to dispose of SNF for a significant period into the future.  As a result, Energy Northwest has spent millions to build additional SNF storage facilities to store SNF that the DOE would have otherwise removed from the Columbia facility.

After the Firm successfully obtained a summary judgment ruling in 2006 that the Government breached the contract, the Government raised a number of defenses to Energy Northwest’s damages claim, including an argument that Energy Northwest acted unreasonably in mitigating its damages, several causation arguments, and other challenges to individual elements of the damages claim. 

The Firm tried the damages issues at a three-week trial in February 2009.  At the trial, the Jenner & Block team presented 12 witnesses, including Energy Northwest’s CEO, its former Chief Nuclear Officer, and three expert witnesses.  The Firm’s team also cross-examined five Government witnesses, including three Government experts, and completed post-trial briefing in June 2009.

The court’s opinion rejected the Government’s arguments and defenses to Energy Northwest’s claimed damages.  Relying on the testimony of the Energy Northwest fact and expert witnesses, the Judge concluded that Energy Northwest had acted reasonably in mitigating its damages, and that the Government’s causation arguments were without merit.  The court also did not accept the Government’s challenges to individual portions of Energy Northwest’s damages claim.

The Firm’s team on this matter was led by Partner Norman M. Hirsch, and included Partners David Jiménez-Ekman and Christopher Tompkins and Associates April A. Otterberg and Anne P. Ray.  Partner William D. Heinz provided valuable advice and counsel.  In addition, Of Counsel Lisa M. Eddington and Associate Joshua Rafsky made significant contributions at various stages of the case.  Current Associates Christine P. Benavente, David E. Hutchinson, Michael H. Margolis and Jacob P. Zipfel conducted valuable research projects when they were summer associates at the Firm.