PDF _ R40996 - The Yucca Mountain Litigation: Breach of Contract Under the Nuclear Waste Policy Act of 1982
22-Dec-2009; Todd Garvey; 21 p.

Abstract: Over 25 years ago, Congress addressed growing concerns regarding nuclear waste management by calling for federal collection of spent nuclear fuel (SNF) for safe, permanent disposal. To this end, the Department of Energy (DOE) was authorized by statute to enter into contracts with nuclear power providers that required the DOE to gather and dispose of spent nuclear fuel in exchange for payments by the providers into the newly established Nuclear Waste Fund (NWF). Congress subsequently named Yucca Mountain in the State of Nevada as the sole candidate site for the underground geological storage of collected SNF. Congress also mandated that federal disposal begin no later than January 31, 1998. Over 10 years ago, DOE breached these contracts by failing to begin the acceptance and disposal of SNF by the statutory deadline established in the Nuclear Waste Policy Act (NWPA). As a result, nuclear utilities have been forced to spend hundreds of millions of dollars for on-site temporary storage of toxic SNF that was expected to be transferred to the federal government for storage and disposal.

Seventy-one breach of contract claims have been filed against the DOE since 1998, resulting in approximately $1.2 billion in damages awarded thus far. Most of these awards, however, remain in appeals as the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of Appeals for the District of Columbia Circuit engage in a dispute over each other’s jurisdictional authority. Estimates for the total potential liability incurred by the DOE as a result of the Yucca Mountain litigation range as high as $50 billion. Moreover, after decades of political, legal, administrative, and environmental delays, the Obama Administration, with the support of Congress, defunded the Yucca Mountain project for FY2010, and announced an intention to pursue other alternatives for the disposal of SNF. Accordingly, contract damages will continue to build as there seems to be no prospect for a completed facility capable of storing SNF anywhere on the horizon.

DOE’s liability for breach of contract was first established in 1996 by the U.S. Court of Appeals for the District of Columbia in Indiana Michigan Power Co. v. U.S. After DOE hesitated to act on its legal obligations, citing the absence of a completed SNF storage facility, the court issued a writ of mandamus mandating that DOE “proceed with contractual remedies in a manner consistent with NWPA’s command that it undertake an unconditional obligation to begin disposal of SNF by January 31, 1998.” The mandamus, issued in Northern States Power Co. v. U.S., essentially prohibited the DOE from deflecting liability by arguing that the lack of an existing storage facility constituted an “unavoidable delay.”

In 2006, the U.S. Court of Federal Claims (CFC) held that the D.C. Circuit mandamus order in Northern States was void for lack of jurisdiction and could not preclude the DOE from raising the “unavoidable delay” defense in the former’s court. The case was appealed to the Federal Circuit, where the court recently granted an en banc hearing to resolve the jurisdictional question. If the Federal Circuit affirms the CFC, and voids the D.C. Circuit mandamus, DOE liability under the NWPA could be drastically reduced if the department can successfully show that the lack of an operational storage facility constitutes an “unavoidable delay.”

This report will present a brief overview of the NWPA and its subsequent amendments, provide a survey of key issues that have emerged from the protracted waste storage litigation, describe the ongoing jurisdictional conflict between the D.C. Circuit and the U.S. Court of Federal Claims, and consider the potential for future liability arising from delays relating to the storage and disposal of nuclear waste.

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Topics: Energy, Waste Management

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