In the United States Court of Federal Claims

No. 14-168 C

(February 25, 2015)

ALABAMA POWER COMPANY, 

GEORGIA POWER COMPANY, 

and SOUTHERN NUCLEAR 

OPERATING COMPANY, INC.

Plaintiffs,

v.

THE UNITED STATES,

 Defendant.

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Plaintiff as Proper Party; Future 

Damages.

Eric B. Langley, Balch & Bingham, LLP, Birmingham, AL, for plaintiffs. 

M. Stanford Blanton, K.C. Hairston, Jason B. Tompkins, and Adam K. Israel, of 

counsel.

Melissa L. Baker, Commercial Litigation Branch, Civil Division, United 

States Department of Justice, Washington, D.C., with whom appeared Joyce R. 

Branda, Acting Assistant Attorney General, Robert E. Kirschman, Jr., Director, 

and Allison Kidd-Miller, Assistant Director, for defendant. Jane K. Taylor, Office 

of the General Counsel, United States Department of Energy, Washington, D.C., of 

counsel.

ORDER

Merow, Senior Judge

This case is the third round of litigation between the parties with regard to 

the government’s breach of its obligation to dispose of plaintiffs’ spent nuclear 

fuel. See Doc. 1 (filed Mar. 4, 2014); Alabama Power Co., et al. v. United States, 

No. 1:08-237 (Fed. Cl. filed Apr. 3, 2008); S. Nuclear Operating Co., et al. v. 

United States, No. 1:98-cv-614 (Fed. Cl. filed July 29, 1998).

On April 18, 2014, the government moved to dismiss three portions of the 

case, claiming that: (1) Southern Nuclear Operating Company, Inc. (“Southern”)

is not a proper party to the suit; (2) plaintiffs’ claim for prejudgment interest is 
improper; and (3) plaintiffs’ claim for damages between the time the lawsuit was 

filed and the time of trial is improper. See Doc. 7. The issues have now been fully 

briefed, and the court finds as follows. 

I. SOUTHERN AS A PLAINTIFF

Southern has been a party to both the first and second rounds of this 

litigation. The government objected to its presence in the first round case, see 

Southern, No. 1:98-cv-614, Doc. 109, but the court deferred ruling, see id., Doc. 

234 at 4, and ultimately determined there was no need to dismiss Southern when 

the government renewed its request after the trial, see Doc. 362 at 74. The court 

did not make an affirmative determination that Southern was a proper party.

The government has again raised the issue, and insists that because Southern

is not in privity with the government, it cannot participate in the litigation as a 

plaintiff. See Doc. 7 at 6-9. 

As the Federal Circuit recently noted, “[t]o have standing to sue the United 

States on a contract claim, a plaintiff must be in privity with it.” Lea v. United 

States, No. 2014-5100, 2014 WL 5786662, at *3 (Fed. Cir. Nov. 7, 2014) (citing 

Sullivan v. United States, 625 F.3d 1378, 1379-80 (Fed. Cir. 2010)). “This means 

that the plaintiff must either be a party to the contract or ‘stand[ ] in the shoes of a 

party within privity’ as a third party beneficiary.” Id. (quoting First Hartford 

Corp. Pension Plan & Trust v. United States, 194 F.3d 1279, 1289 (Fed. Cir. 

1999)).

It is undisputed that Southern is not a party to the contract at issue here. See 

Doc. 1 at 1-2 (complaint naming Alabama Power and Georgia Power as the entities 

with which the government made contracts for the disposal of nuclear waste); Doc. 

13 at 2 (Southern admitting it “is not a party to the Standard Contract”). Rather, 

Southern alleges that it is the “operating agent and attorney-in-fact for Alabama 

Power and Georgia Power,” see Doc. 1 at 2, and that it asserts claims in its 

“representational capacity,” see id at 3.

Because Southern is not a party to the contract, in order to sue, it must do so 

as a third-party beneficiary. As the Federal Circuit recently explained, the 

appropriate test for determining whether a party is a third-party beneficiary such 

that it has the right to sue the government, is as follows:

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In order to prove third-party beneficiary status, a party must 

demonstrate that the contract not only reflects the express or implied 

intention to benefit the party, but that it reflects an intention to benefit 

the party directly. . . . Third-party beneficiary status is an “exceptional 

privilege” and the contracting parties’ intent to create that status can 

generally be inferred if “the beneficiary would be reasonable in 

relying on the promise as manifesting an intention to confer a right on 

him.”

Lea, at *4 (citations omitted). 

Southern claims that the operational and administrative functions it performs 

for Plants Farley and Hatch amount to a “sufficient interest in the administration of 

the Standard Contract to give it the right to join this lawsuit in a representative 

capacity.” See Doc. 13 at 3. “As the licensed operator, Southern Nuclear 

administers the Standard Contract,” and is allegedly responsible for “possession, 

management, control, operation, maintenance, shutdown and decommissioning 

activities” at the power plants. See Doc. 13 at 3. 

Performance of these functions, however essential, simply does not speak to 

the intent of the contracting parties with respect to Southern. Because Southern 

has presented no evidence that the Standard Contract was executed for its benefit, 

the court has no basis on which to find that it was an intended third party 

beneficiary. 

The government’s motion to dismiss Southern as a party to this lawsuit is 

GRANTED.

II. PLAINTIFFS’ CLAIM FOR PREJUDGMENT INTEREST

The government next moves to dismiss plaintiffs’ request for prejudgment 

interest pursuant to Court of Federal Claims Rule 12(b)(6). See Doc. 7 at 1.

Plaintiffs argue that their request for prejudgment interest is not technically a 

claim, and therefore, is not a proper subject of a motion to dismiss. See Doc. 9 at 

4-6. The government counters that Federal Circuit precedent weighs so heavily 

against plaintiffs’ position that the court should foreclose recovery of prejudgment 

interest at the outset of the lawsuit. See Doc. 10 at 6-9.

The court does not see any particular benefit to deciding the legal merits of 

plaintiffs’ request for prejudgment interest at this time. It appears unlikely that the 

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parties will need to conduct discovery or present evidence on this issue. 

Consequently, the court considers it appropriate to address any arguments the 

parties wish to make in the final briefs. 

Should the parties find it necessary to conduct discovery or present evidence 

relating to prejudgment interest that would require material resources, the 

government may move the court to resolve the question at that time.

The government’s motion to dismiss the request for prejudgment interest is 

DENIED.

III. DATE RANGE FOR PLAINTIFFS’ DAMAGES CLAIM

Finally, the government argues that the court should prohibit plaintiffs from 

seeking to recover what it calls “future damages,” by which it seems to mean any 

damages incurred after the date the complaint was filed. See Doc. 7 at 10-11. In 

response, plaintiffs claim that such a complete bar does not exist, pointing to the 

earlier round of this litigation in which plaintiffs filed the complaint in 2008, but 

recovered damages incurred into 2010. See Doc. 9 at 6-7. According to the 

government, the Federal Circuit’s decision in Indiana Michigan Power Co. v. 

United States, 422 F.3d 1369 (Fed. Cir. 2005), should be read to prohibit this 

strategy. See Doc. 10 at 9-10.

It is clear from a careful read of the Indiana Michigan decision that what the 

Federal Circuit meant to prohibit was not necessarily the recovery any amount of 

damage incurred after the complaint was filed, but rather, damages that require 

speculation. As the Circuit explained: “Because of its highly speculative nature, a 

claimant may not recover, at the time of the first suit for partial breach, prospective 

damages for anticipated future nonperformance resulting from the same partial 

breach.” Indiana Michigan, 422 F.3d at 1376. The court then noted that the 

plaintiff was allowed to “obtain recovery for post-breach damages as they are 

incurred.” See id. at 1377. So long as the damages have actually been incurred 

prior to recovery, they are not absolutely barred in an action for partial breach. 

Indeed, as plaintiffs noted, this court has previously permitted plaintiffs to recover

damages that were incurred after the relevant complaint was filed. See, e.g., 

Alabama Power Co., et al. v. United States, No. 1:08-237 (although the complaint 

was filed in 2008, the court awarded damages through 2010).

It is equally true, however, that it would be impractical to allow an openended recovery of all damages incurred up to the date of trial, particularly in cases 

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as complex and detail-oriented as spent nuclear fuel cases. In order to avoid the 

presentation of unnecessarily voluminous accounting data at the time of trial, for 

example, the court has ordered the parties to cooperate in an audit process in each 

of the first two rounds of this litigation. It intends to the do the same in this third 

round. In order for that audit process to work, there must be a definite range of 

damages to be evaluated.

The parties are encouraged to make every effort to agree upon a sensible 

date range for the damages alleged in this case. On or before April 1, 2015, the

parties shall file a joint report notifying the court of the date range. In the event 

that the parties are unable to agree, plaintiffs may file a motion for leave to 

supplement the complaint pursuant to RCFC 15(d), and explain to the court the

additional damages they wish to recover and why the inclusion of those damages in 

this suit makes sense. 

As this court has explained: “Supplementation should be allowed where 

post-commencement events are material to the action, consideration of those 

events could be accommodated with the orderly progression of the case to trial or 

other disposition, and supplementation would not prejudice any party. 

Supplementation may be limited or curtailed to avoid prejudice.” Sys. Fuels, Inc. 

v. United States, 73 Fed. Cl. 206 (2006) (citing Pac. Gas and Elec. Co. v. United 

States, 70 Fed. Cl. 758, 764-65 (2006), and discussing additional spent nuclear fuel 

cases in which the court permitted plaintiffs to supplement the damages claim by 

expanding the time period for which damages were sought). See also Boston 

Edison Co. v. United States, 658 F.3d 1361, 1365-66 (Fed. Cir. 2011) (explaining 

that although plaintiff Entergy Nuclear Generation Company originally filed a 

complaint seeking damages incurred between 1999 and 2005, it later amended the 

complaint to seek damages through 2008).

Once a date has been selected, the court will enter an order that will govern 

the audit process. If either party wishes to change the date range at a later time, a 

motion for leave to do so shall be filed with the court.

The government’s motion to dismiss plaintiffs’ claims that relate to damages 

incurred after the complaint was filed is GRANTED, but the issue may be revisited 

upon agreement of the parties or a motion for leave to amend filed by plaintiffs.

SO ORDERED.

s/ James F. Merow 

James F. Merow

Senior Judge

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