Spent Nuclear Fuel; Reconsideration; RCFC 52(b); RCFC 59; Dam ages; Causation 

# In th e United States Court of Federal Cl aims

No. 03-2627C (Filed: March 17, 2016) NOT FOR PUBLICATION

* * * * * * * * * * * * * * * * * * * * * * * * * * * * ENTERGY NUCLEAR FITZPATRICK, LLC, ENTERGY NUCLEAR INDIAN POINT 3, LLC, and ENTERGY NUCLEAR OPERATIONS, INC.,

Plaintiffs
,

v.
THE UNITED STATES,

Defendant. * * * * * * * * * * * * * * * * * * * * * * * * * * * *

ORDER

On January 8, 2016, pursuant to Rules 52(b) and 59 of this court’s rules (“RCFC”), p laintif

f s f iled a m otion f

or reconsideration o f our bench ruling, which was conf

irm ed in a written order f

or judgm ent on Decem

ber 15, 2015. W e held that the United States is liable f or its breach of t he Standard Contract f or Disposal of S pent Nuclear Fuel and entered f inal judgm e nt f

or p laintif f s in the am ount of $80,876,013. As part of t hat decision, we denied p l a i n t i f f s’ claim f or the security costs f

o r ma n n i n g two additional Bullet Resistant Enclosures (“BREs”) at Indian Point Energy Center Unit 3 ( “Indian Point 3”). The m otion f

or r econsideration is f

ully b rief ed, and oral argum ent was held on March 1, 2016.

In our bench ruling, we f

ound that the estim ated security c osts a t Indian Point 3 were not recoverable:

A. In p rincipal, once again, I c an accept t he idea that h aving two m ore BREs to m an should lead to h igher staf f ing costs, but plaintif f s’ calculation of a d d i tional c osts based on f ull-tim e equivalents did n o t establish an increm ental in c r e a s e in actual security staf

f ing and thus actual costs incurred due to the breach. It was sim

ply assum ed; B. T h e r e was no evidence of either anuptick in secur i t y s t af f ing when the t wo addition BREs went online or evidence of actual 2 4/7 staf f i ng of those posts; C. The testim ony of Mr. Gagnon that this lack of an uptick i n s taf f ing

was due t o the natural ebb and f low of security staf

f ing at such

a large f acility d oes not explain the lack o f proof
, and plaintif

f s have n ot claim ed lost opportunity costs. The claim f ails f or lack of proof

. Entergy Nuclear Fitzpatrick, LLC v. U nited States
, 2015 U.S. Claim s LEXIS 1649, *9 (Fed. Cl. Dec. 15, 2015).

In their m o tion f

or reconsideration, plaintif f s argue that we a

pplied the
wrong l egal standard i n considering their claim f or the additional s e c urity
expenses at I ndian Point 3. Specif ically
, plaintif

f s contend that whether the security s taf

f ing costs were increm ental over costs absent the breach is not the relevant legal inquiry f

o r determ ining the recoverability of internal l abor costs that w ere deploy ed to m i tigate the g overnm ent’s b r each. Rather, the correct standard is wheth e r p l a i n t if f s were deprived o f the ability to use those personnel who were u n d e n i a b ly required to staf f the BREs in lieu of perf o r mi n g o t her a ctivities. As the F ederal Circuit expressed in E nergy Northwest v. United States
, 641 F.3d 1300 ( Fed. Cir. 2011)
, r e c o v e r y of

m itigation expenses should not turn on w h ether i ntern a l o r e xternal labor is used to perf

orm the m itigation task or whether the labor is increm ental or not; the appropriate test is sim

ply whether “the awarded costs were actually c aused by the breach.” Id. at 1309. Plaintif f s also argue that the testim ony o f the security m anager of Indian Point 3, Mr. Gagnon, is suf f icient evidence of actual 24/7 staf

f ing of two additional BREs.

“The decision whether to grant reconsideration lies largely within the discretion of

the [ trial] court.” Pacific Gas & Elec. Co. v. United States , 114 Fed. Cl. 146, 149 (Fed. Cl. 2013) (quoting Y uba Natural Res., Inc. v

. U nited States
, 904 F.2d 1577, 1583 (Fed. Cir. 1990)). RCFC 52(b) provides that “[ o ]n

a party ’s m otion

. . . the court m ay am end its f indings” a n d R C FC 59(a)(1) provides that “[ a ]

. . . r econsideration m ay be granted

. . . f o r any of the reasons established by the rules o f com m on la w

. ” P a c i fic Gas & Elec. Co. v

. U

nited States
, 74 Fed. Cl. 779 (Fed. Cl. 2006)

. “ T h e three prim ary grounds t hat justif y reconsideration are: ‘(1) an intervening change in the controlling l aw; (2) the availability o f new evidence; and ( 3) the need to correct clear error or

2prevent m anif est injustice.’” Delaware Valley F loral Group. Inc

. v

. Shaw Rose Nets, LLC
, 597 F.3d 1 374, 1 383 (Fed. Cir. 2010) (quoting Degi r menci v. Sapphire-Fort La u d

e r d a le, LLLP , 642 F. S upp. 2d 1344, 1353 (S.D. Fla. 2009)). Such a m otion is not an opportunity
, h o w e v er, f or a disappointed litigant to reargue its case. See C ane Tenn., I

nc. v. United S

tates , 62 Fed. Cl. 703, 705 (2004).

Our e valuation of the claim l ef t room f or either of two m eans of proof : direct e vidence of labor c osts actually expended i n association w ith m a nning the B R E s , i r respective of whether it added to the total am ount of labor expended o n securit y ( “evidence of actual 24/7 staf f ing of those posts”), or indirect proof of a ctual labor expended, which could b e inf e rred in part f

rom an overall increase in labor costs or staf f ing.

The problem f

or p l a i ntif

f s was t hat they h ad no d irect proof of costs

a s s o c iated with m anning t he two new BREs. Such records were destroy e d. 1 W h at plaintif

f s had t o resort to was i n d i r e ct proof
, which was, of course, perm issible. Plaintif

f s’ logic c hain went som ething like this: two additional BREs w ere built because of the need to provide additional security f or the new dry storage f

a cility ; Mr. Gagnon testif

ied that those posts needed to b e m anned 24/7; he pr o v i ded e xcerpts f rom p ost a ssignm ents a f ter June 5 , 2011, indicating that g u ard s were scheduled f or those posts; Mr. Gagnon t hen estim ated how m any a dditional guards would have b een required t o m an those posts (ten or m ore); and Mr. Metcalf estim ated how m uch their salaries w ould have been, based on a m e dian of security staf f salaries, less an estim ate as to wasted tim e. I n o t h e r words, plaintif f s cobbled together a num ber of estim ates as indirect proof of what it actually cost to staf f the additional BREs. They chose to com

plete their p roof with the contention that the g uards were in addition to existing staf

f ing.

W hat troubled the court at trial, in addition to the inherent i m precision of t he estim a tes of tim e a nd wa ges, w as that the assertion of additional staf f

was m erely a n assum

ption, and o ne which turned out t o b e c o u nter to the

1 A litigation hold was not placed until 2 014, and Entergy h a d a t h r e e y ear docum ent r etention policy f or such r ecords. Thus no staf f r ecords exist prior to three y ears bef

ore the hold went in to ef f ect.

3actual evidence. The docum entary evidence showed no i ncrease i n staf f ing af ter the BREs went on l ine. The conclusion that plaintif f s wanted to use as support f o r t heir proof that they actually incurred costs was at odds with the evidence. T his p rom

pted the com m ent in the bench ruling that “the plaintif f s’ calculation of additional costs based o n f ull-tim e equivalents did n ot establish

an increm ental increase in actual security staf f
, and thus, actual c osts i ncurred. It was sim ply a ssum ed.” Tr. 13 (Oct. 28, 2015). C onsequently
, i n the absence of direct evidence of c osts associated w ith the additional BREs, whether o r not increm ental to overall costs, what the c ourt wa s l ooking f or w as p roof of an overall increase in m anning costs, because that was w hat the plaintif f s asserted happened. If there had been such evidence, the court m ight h ave accepted the indirect proof in o rder to establish both a causal link between the breach and
costs associated with the new BREs and as a m eans of i tem izing those costs. 2

A l t hough counsel f

or plaintif

f s suggested at o ral argum ent that wha t they were seeking with r e spect to the two new BREs am ounted to a claim f or lost o pportunity costs, we think the record is c lea r t h a t p laintif f s’ only claim
at trial was f

or the increm ental increase in direct labor charges associated with

m anning the t wo additional security post s

. 3 Their witnesses repeatedly contended that the costs f or staf f ing the BREs were i n addition to p re-breach staf f ing c osts. Plaintif

f s’ po s i t i on throughout was that the overall ef f o rt increased. On that a rgum ent, the proof f ailed; the a l ternative explanation was never attem

pted. 4

2 The calculation of those costs using the prof f ered m ethod o f estim ation m ay not have been r easonably certain, but we did not reach that issue in our ruling because we f

ound the claim

f ailed f or lack of proof of causation.

3 I n their pretrial brief

, f or exam ple, plaintif

f s have a category “4. A dditional Security Costs,” which they explain in the text a s the “increased s e curity cost to protect t he Indian Point I SFSI. The portion of the additional security costs allocated to Indian Point 3 totals approxim ately $2,539,000.” P ls.’ Pretrial Contentions of Fact and Law 18.

4 That is not to say that a claim f or lost o pportunity would have been s uccessf u l. It likely would have f

ailed f or the sam e reason: lack of proof of actual costs.

4This case is unlike Sacramento M unicipal U

tility Distrist v. U

nited States
, 293 Fed. Appx. 766 (Fed. Cir. 2008), where t he Federa l C i r c uit reversed the trial court’s d ecision deny ing certain breach-related internal labor
expenses. The utility i n that case presented evidence “detailing the percentage of hours each [ ] em

ploy ee charged to [ the] ‘dual-purpose’ dry storage project relative to the total hours that each em p loy ee worked f

o r [ the plaintif

f ].” Id.
at 773. The t r i a l c o u rt required the utility to also have p ut on evidence of what it would have done with those em ploy ees absent t he breach. The circuit rejected t hat additional requirem ent and held that plaintif f needed only to prove that it used “its own em ploy e e s i n its m itigation ef f orts, a nd t he num

ber of hours t hose em

ploy ees spent on m itigation related projects.” I d. The plaintif f u t ilized a num

ber of work orders against which it charged hours f or the dry storage project, i.e., it had actual evidence of costs incurred. 70 Fed. Cl. 332, 366 ( 2006); see also W is. Elec. Power Co. v. United States
, 90 Fed. Cl. 714, 7 8 8 (2009) ( we f ound that plaintif

f m et its burden of establishing internal labor costs to a reasonable c e rtainty b ecause those costs were subject
to l ay and expert testim ony at trial and were adequately supp o r t e d by books and records, such as “tim e sheets reviewed and si g n e d o f f by a supervisor,” internal accounting and pay roll records); Sys. Fuels, Inc. v. United States, 79 Fed. Cl

. 37, 66-67 ( 2007) (awarding internal labor costs because they were supported by

contem poraneous records of h ours expended on breach-related activities).

Plaintif f s argue that Mr. G agnon’s testim ony is suf f icient evidence of actual 24/7 staf

f i n g at the two additional BREs, but that is sim ply a disagreem ent with our w e i g h i n g o f the evidence and not a reason to grant a

m otion f or reconsideration. W hen the c o urts have awarded internal labor costs, t h ey have d one so based on a r ecord c ontaining actual evidence of the hours worked, not post hoc estim ates created solely f or trial. Because there is

no apparent or o bvious error of law or a m istake of f a ct, we d e n y p l a i ntif

f s’

m otion f o r reconsideration.

s/Eric G. Bruggink ERIC G. BRUGGINK Judge

56