United States Court of Appeals for the Federal Circuit 

2008-5010 

DELMARVA POWER & LIGHT COMPANY 

and ATLANTIC CITY ELECTRIC COMPANY, 

 

Plaintiffs-Appellants, 

v. 

UNITED STATES, 

 

 Defendant-Appellee, 

and 

PSEG NUCLEAR, LLC and PUBLIC SERVICE 

ELECTRIC AND GAS CO., 

 Defendants-Appellees. 

 

Frederick M. Lowther, Dickstein Shapiro LLP, of Washington, DC, argued for 

plaintiffs-appellants. With him on the brief were Richard J. Conway, Bradley D. Wine, 

and Joseph R. Berger. 

Harold D. Lester, Jr., Assistant Director, Commercial Litigation Branch, Civil 

Division, United States Department of Justice, of Washington, DC, argued for 

defendant-appellee United States. With him on the brief were Jeffrey S. Bucholtz, 

Acting Assistant Attorney General, Jeanne E. Davidson, Director, Alan J. Lo Re, Senior 

Trial Counsel, and Joshua E. Gardner, Trial Attorney. Of counsel was Jane K. Taylor, 

Attorney, United States Department of Energy, of Washington, DC. 

Alex D. Tomaszczuk, Pillsbury Winthrop Shaw Pittman LLP, of McLean, Virginia, 

argued for defendants-appellees PSEG Nuclear, LLC, et al. With him on the brief were 

Daniel S. Herzfeld, and Jay E. Silberg, of Washington, DC. 

Appealed from: United States Court of Federal Claims 

Judge Christine O.C. Miller 
United States Court of Appeals for the Federal Circuit 

2008-5010 

DELMARVA POWER & LIGHT COMPANY and ATLANTIC CITY ELECTRIC 

COMPANY, 

 Plaintiffs-Appellants, 

v. 

UNITED STATES, 

 Defendant-Appellee, 

and 

PSEG NUCLEAR, LLC and PUBLIC SERVICE ELECTRIC AND GAS CO., 

Defendant-Appellees. 

Appeal from the United States Court of Federal Claims in Cases No. 04-0034C and 04-

0036C, Judge Christine O.C. Miller. 

______________________________ 

 DECIDED: September 18, 2008 

______________________________ 

Before LINN, FRIEDMAN, and PROST, Circuit Judges. 

FRIEDMAN, Circuit Judge. 

The question in this appeal, which this court has not previously decided, is 

whether the United States may, in a particular case, waive the prohibition in the AntiAssignment Act, 31 U.S.C. § 3727 (2000), against the assignment of claims against the 
United States and thereby validate an assignment that that Act otherwise would prohibit. 

The Court of Federal Claims upheld the government’s authority to do so, and we affirm. 

I 

 A. This case arises out of the federal government’s program, thus far 

unsuccessful, to remove and dispose of spent nuclear waste resulting from the 

operation of this country’s nuclear electric generating facilities. The program is 

described in Maine Yankee Atomic Power Co. v. United States, 225 F.3d 1336, 1337-39 

(Fed. Cir. 2000). In brief, in 1983 the Department of Energy, pursuant to a statutory 

directive, entered into standard contracts with the country’s nuclear electric generating 

companies, under which (1) the government agreed to begin accepting and disposing of 

spent nuclear waste by January 1, 1998 and (2) the utilities agreed to pay the 

government substantial amounts for its service, including both a one-time fee based on 

past nuclear generation of electricity and on-going fees. 

 The government was unable to inaugurate its waste disposal program and the 

utilities filed suits challenging that default. In Maine Yankee, this court held that the 

government had breached the standard contract by failure to commence the waste 

disposal program by the specified date and that the utilities could maintain breach-ofcontract damage suits against the government for that default. 

B. The appellees PSEG Nuclear and Public Service Electric and Gas Co. 

(collectively “PSEG”) own and operate nuclear facilities. The appellants Delmarva 

Power & Light Co. (“Delmarva”) and Atlantic City Electric Co. (“Atlantic City”) 

(collectively “the Assignors”) are electric utilities that owned minority undivided interests 

in those nuclear plants. In September 1999, the Assignors by written contracts (the 

2008-5010 2
“Transfer Agreements”) agreed to transfer to PSEG, in return for approximately $30 

million, their interests in those nuclear plants. In the Transfer Agreements the 

Assignors also transferred to PSEG “[a]ll claims of Seller relating to or pertaining to the 

Department of Energy’s defaults . . . including all claims for failure by the Department of 

Energy to take Spent Nuclear Fuel . . . .” 

In January 2004, Delmarva and Atlantic City each filed a complaint in the Court 

of Federal Claims seeking damages from the United States for the Department of 

Energy’s breach of its contracts to begin removal of the waste from PSEG’s nuclear 

plants in which each had a minority interest. Although the original complaints alleged 

various theories of liability, in this appeal they rely only on their claim that the 

government’s breach of contract constituted a taking of their former property interests in 

the nuclear plants, for which they are entitled to just compensation. The takings theory 

is that the government’s breach of the removal contracts diminished the value of the 

nuclear plants, and as a result, they received less on the sale of their interest in those 

plants. The two cases have been consolidated. 

When PSEG became aware of the claims the Assignors had asserted in this 

lawsuit, it invoked the arbitration clause of the Transfer Agreements to argue that the 

claims the Assignors had assigned in the Transfer Agreements included the taking 

claims. In proceedings to which the government was not a party, the arbitrators 

sustained PSEG’s contention. The Assignors challenged the arbitration decision in a 

New Jersey state court, which upheld the award. 

The Assignors moved the Court of Federal Claims to vacate the arbitration 

award. The court then stated that the government should indicate whether it waived its 

2008-5010 3
rights under the Assignment-of-Claims Act. In response, the government filed a 

document which included the following statement: 

[T]he Government is exercising its sole discretion to accept 

the assignments of those claims that the plaintiffs purported 

to make to PSEG Nuclear, to the extent that we have been 

made aware of those claims through the plaintiffs’ complaint 

in this action and through the assignment provisions in the 

purchase and sale agreements that have been included in 

the appendices to some of the briefing in this case.

 The Court of Federal Claims granted summary judgment for the government and 

dismissed the case. The court held that the government properly waived its right, under 

the Assignment of Claims Act, to invalidate the assignments; that the assignments 

included the takings claims; and that having assigned those claims to PSEG, the 

Assignors had no basis for asserting those claims in this case. 

II 

 A. The language of the assignment clause of the Transfer Agreements on its 

face covers the takings claims, and the Assignors apparently do not contend otherwise. 

The Transfer Agreements included among the “Purchased Assets”: 

 All claims of Seller relating to or pertaining to the 

Department of Energy’s defaults under the Department of 

Energy Standard Contract (including all claims for failure by 

the Department of Energy to take Spent Nuclear Fuel) 

accrued prior to, on or after the Closing Date, whether 

relating to periods prior to, on or after the Closing Date, and 

all other claims of Seller against the Department of Energy 

with respect to, arising out of or in connection with the 

Purchased Assets, other than the claims described in 

Section 2.2(1) . . . . 

 This provision was followed by 13 separate “Excluded Assets” that were “hereby 

specifically excluded from the definition of Purchased Assets.” 

2008-5010 4
The takings claims were “claims . . . relating to or pertaining to the Department of 

Energy’s defaults under the Department of Energy Standard Contract” and “claims for 

failure by the Department of Energy to take Spent Nuclear Fuel.” None of the 

exceptions in the “Excluded Assets” covered the takings claims. Since the assigned 

claims include the takings claims, the remaining issue is whether the Anti-Assignment 

Act barred those assignments, as the Assignors contend. In deciding that issue, we 

assume arguendo, but do not decide, (1) that parties other than the United States may 

challenge under the Anti-Assignment Act an assignment of claims against the 

government and (2) that the Assignors are not estopped from challenging their voluntary 

assignment of such claims. 

 B. As this court has noted, “[w]hat is commonly called the Anti-Assignment Act 

consists of two statutory provisions.” Fireman’s Fund Ins. Co. v. England, 313 F.3d 

1344, 1349 (Fed. Cir. 2002). Under 41 U.S.C. § 15(a), which is not directly at issue in 

this case, “[n]o contract . . . or any interest therein, shall be transferred by the party to 

whom such contract . . . is given to any other party, and any such transfer shall cause 

the annulment of the contract or order transferred, so far as the United States is 

concerned.” This prohibition is inapplicable when the monies due from the United 

States are assigned to a “financing institution.” The other provision, here at issue, 31 

U.S.C. § 3727(a)(1), (b), provides that an 

assignment of any part of a claim against the United States 

Government or of an interest in the claim . . . may be made 

only after a claim is allowed, the amount of the claim is 

decided, and a warrant for payment of the claim has been 

issued. 

2008-5010 5
This provision contains a similar exception for assignment to a “financing institution” of 

money due under a contract. 31 U.S.C. § 3727(c). 

 “These two provisions together broadly prohibit . . . transfers of contracts 

involving the United States or interests therein, and assignment of claims against the 

United States.” Fireman’s Fund, 313 F.3d at 1349. 

 On its face, this language covers the assignments of the takings claims. The 

claims had not been allowed (indeed, the government contested them), their amount 

was undecided, and no warrant for their payment had been issued. The assignee of the 

claims was not a “financing institution,” but a power company. The only basis upon 

which the assignments could be validated under the Act is if the government validly 

waived the application of the Act. 

 C. In Tuftco Corp. v. United States, 614 F.2d 740 (Ct. Cl. 1980), our predecessor 

court, the Court of Claims, whose decisions are binding precedent here, South Corp. v. 

United States 690 F.2d 1368, 1370 (Fed. Cir. 1982), held that the government validly 

waived the prohibitions against the assignment of government contracts in 41 U.S.C. § 

15, Tuftco, 614 F.2d at 744. Although the case involved quite different facts, its analysis 

and reasoning are instructive and helpful in deciding the present case. 

 In Tuftco, parties to two government contracts to sell goods to the government 

assigned the contracts to Tuftco and its affiliate to perform them. Prior to the 

assignments, the original contractors informed the contracting officer about the 

proposed action, and the latter agreed to and recognized the assignments. The 

assignee performed the contracts. The government, however, paid a portion of the 

contract price to the original contractor rather than to the assignee. When the assignee 

2008-5010 6
sued the government for the amount it had not been paid, the government contended 

that the Anti-Assignment Act barred the suit. 

 The Court of Claims rejected the contention. It explained: 

[T]he contracting officer was fully aware of the assignments, 

recognized them, and communicated such recognition to 

plaintiff. In this case the action of defendant constituted a 

waiver of the Act’s provisions, including the notice provision 

applicable to banks and financial institutions. Having chosen 

to recognize the assignments, defendant was bound to act in 

accordance with their terms. 

Tuftco, 614 F.2d at 743-44. 

 The court noted “the long-recognized principle that ‘Despite the bar of the AntiAssignment statute (41 U.S.C. § 15), the Government, if it chooses to do so, may 

recognize an assignment.’” Id. at 745 (citations omitted); see Maffia v. United States, 

163 F. Supp. 859, 862 (Ct. Cl. 1958) (“Despite the bar of the [Assignment of Claims 

Act], the Government, if it chooses to do so, may recognize an assignment.”). 

The primary dispute in Tuftco was not whether “the Government may recognize 

an assignment”—the parties had “agreed” it may do so—but over “what actions by the 

Government will constitute recognition.” Id. The Court of Claims held that “the 

Government was aware of, assented to, and recognized the assignments.” Id. In the 

present case there is no question that if the government may recognize an otherwise 

invalid assignment of claims against it, the government’s written “accept[ance]” of the 

claims filed in the Court of Federal Claims was a “recognition” of them. 

 We see no valid reason why the government should not also be able to waive the 

Anti-Assignment Act’s prohibition in section 3727(a) against the assignment of claims. 

Both provisions of that statute “are for the protection of the Government.” United States 

2008-5010 7
v. Aetna Cas. & Sur. Co., 338 U.S. 366, 371 (1949) (quoting Martin v. Nat’l Sur. Co., 

300 U.S. 588, 594 (1937)). Although the two provisions deal with different aspects of 

relationships and dealings with the government, they serve the common goal of 

protecting the government from similar problems that may arise from those 

relationships. “In general terms, however, the concerns of the two statutes and the 

legal concepts involved in their applicability are the same.” Tuftco, 614 F.2d at 744, n. 

4. As the Court of Federal Claims here stated, the two statutes “embody similar 

principles.” 

 If, as in this case, the government concludes that it is appropriate and in its best 

interest to accept the assignment, it may do so. As the Court of Federal Claims here 

properly concluded, the “Government’s recognition and acceptance of such an 

assignment makes it a valid assignment.” 

 The Assignors rely upon older Supreme Court cases that describe assignments 

within the scope of the Anti-Assignment Act as “null and void” unless they complied with 

all of the statutory requirements, e.g., National Bank of Commerce v. Downie, 218 U.S. 

345 (1910); Nutt v. Knut, 200 U.S. 13 (1906); and McKnight v. United States, 98 U.S. 

179 (1878). At that time, however, the statute itself stated that such assignments were 

“null and void.” The present statute does not so provide; instead, it merely specifies the 

conditions under which an assignment of a claim against the United States “may be 

made” and that “[a]n assignment under this subsection is valid for any purpose.” Even 

more significantly, none of those cases involved any question of, or decided whether the 

government could recognize as valid, an assignment of claims that otherwise would 

violate the statute. 

2008-5010 8
2008-5010 9

 The Assignors also contend that the government should be judicially estopped 

here from arguing that the Anti-Assignment Act does not preclude the assignment 

because in Rochester Gas & Electric Co. v. U.S., 65 Fed. Cl. 431 (2005), a parallel 

case, it argued that a similar claim assignment was invalid under that Act. In Rochester 

Gas, however (unlike the present case), the government had not waived the application 

of the Anti-Assignment Act to the particular claim assignment at issue. In the present 

case, as we have indicated, except for the waiver, the assignment of the takings claims 

would violate the Anti-Assignment Act. 

CONCLUSION 

 The judgment of the Court of Federal Claims granting summary judgment for the 

United States is 

AFFIRMED.