United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 02-3747

___________

Entergy Arkansas, Inc., an Arkansas *

corporation; Entergy Gulf States, Inc., *

a Texas corporation; Entergy Louisiana, * 

Inc., a Louisiana corporation; Wolf * 

Creek Nuclear Operating Corporation, *

a Delaware corporation; *

*

Plaintiffs-Appellees, *

*

Central Interstate Low-Level *

Radioactive Waste Commission; *

*

Plaintiff-Appellee, *

* Appeal from the United

U.S. Ecology, Inc., a California * States District Court for

corporation; * the District of Nebraska.

*

Intervenor Plaintiff-Appellee, *

*

v. *

*

State of Nebraska; Nebraska *

Department of Environmental Quality; *

Nebraska Department of Health and *

Human Services Regulation & *

Licensure; The Governor, of the *

State of Nebraska; The Director, of the *

Nebraska Department of Environmental *

Quality; The Director, of the Nebraska *

Department of Health and Human *

Services Regulation and Licensure, *

*

Defendants-Appellants. *
1

The defendants named in the Commission's complaint were the State of

Nebraska, the Governor of the State of Nebraska in his official capacity, the

Director of the Nebraska Department of Environmental Quality in his official

capacity, and the Director of the Nebraska Department of Health and Human

Services Regulation & Licensure in his official capacity.

-2-

___________

Submitted: June 12, 2003

Filed: February 18, 2004

___________

Before BOWMAN, MURPHY, and BYE, Circuit Judges.

___________

MURPHY, Circuit Judge.

The State of Nebraska and two of its departments (Nebraska)1

 appeal from a

final judgment involving the attempt to develop a radioactive waste disposal facility

under the Central Interstate Low-Level Radioactive Waste Compact (the Compact).

The Compact was created and entered into by five member states and was also

enacted into law by Congress. The Compact members agreed to build a disposal

facility in one of the member states, and they also agreed to create a commission to

carry out their program, the Central Interstate Low-Level Radioactive Waste

Commission (the Commission). Nebraska was selected as the site for the facility, and

the Commission is a plaintiff in this case.

This action was originally brought against Nebraska and the Commission by

utility companies from the five Compact states: Entergy Arkansas, Entergy Gulf

States, Entergy Louisiana, Wolf Creek Nuclear Operating Corporation, and the

Omaha Public Power District. The Commission brought crossclaims against U.S.
2

The Honorable Richard G. Kopf, Chief Judge, United States District Court

for the District of Nebraska.

3

See Entergy II, 241 F.3d 979 (8th Cir. 2001); Entergy I, 210 F.3d 887 (8th

Cir. 2000); Nebraska v. Central Interstate Low-Level Radioactive Waste Comm'n,

207 F.3d 1021 (8th Cir. 2000) (Nebraska did not have veto power over low level

radioactive waste export permits); Nebraska v. Central Interstate Low-Level

Radioactive Waste Comm'n, 187 F.3d 982 (8th Cir. 1999) (Commission has power

under the Compact to impose a deadline for state licensing determination); County

-3-

Ecology, Inc. and Nebraska, and the district court2 granted its motion to realign itself

as a plaintiff. After years of litigation and a number of appeals to this court, the case

was tried to the district court for two months. The court later issued extensive

findings and conclusions and ruled in favor of the Commission. It found that

Nebraska had not carried out its obligations under the Compact in good faith and that

the Commission was entitled to recover over $97 million for funds and work

expended in the thwarted attempt to construct the radioactive waste disposal facility.

Nebraska argues on appeal that the district court erred in denying it a jury trial,

in its findings of bad faith, in awarding monetary relief and interest, and in several

other points, some of which were decided against it on earlier appeals. See Entergy,

Arkansas, Inc. v. Nebraska, 241 F.3d 979, 987–88 (8th Cir. 2001) [Entergy II]

(affirming district court holding that waiver of sovereign immunity extended to suit

for monetary relief); Entergy Arkansas, Inc. v. Nebraska, 210 F.3d 887, 898 (8th Cir.

2000) [Entergy I] (Nebraska waived its sovereign immunity by entering into the

Compact). After carefully studying the voluminous record, we affirm.

I.

A.

We have already addressed the Compact and related issues in a series of earlier

appeals in this case, and those decisions provide additional background to that which

follows.3

 In 1980 Congress enacted the Low-Level Radioactive Waste Policy Act,
of Boyd v. US Ecology, Inc., 48 F.3d 359 (8th Cir. 1995) (rejecting Nebraska's

claim that community consent had not been properly obtained); Nebraska v.

Central Interstate Low-Level Radioactive Waste Comm'n, 26 F.3d 77 (8th Cir.

1994) (rejecting challenge to site selection process); Burton v. Central Interstate

Low-Level Radioactive Waste Comm'n, 23 F.3d 208 (8th Cir. 1994) (ratepayers

and electors for Nebraska power districts lacked standing to challenge

Commission actions); Concerned Citizens of Neb. v. United States Nuclear

Regulatory Comm'n, 970 F.2d 421 (8th Cir. 1992) (no fundamental right to be free

from nonnatural radiation); See also Thomas O. Kelly, Note, Nebraska's $160

Million Liability?—Entergy, Arkansas, Inc. v. Nebraska, 241 F.3d. 979 (8th Cir.

2001), 80 Neb. L. Rev. 574 (2001).

4

References to the Compact are cited by article number.

-4-

Pub. L. No. 96-573, 94 Stat. 3347 (1980), in order to "promote the development of

regional low-level radioactive waste disposal facilities" by the various states.

Concerned Citizens of Neb. v. United States Nuclear Regulatory Comm'n, 970 F.2d

421, 422 (8th Cir. 1992). Pursuant to the Act, Nebraska, Arkansas, Kansas,

Louisiana, and Oklahoma entered into the Compact to establish and operate one or

more facilities to process low level radioactive waste (LLRW) generated in the

member states. Art. III(a).4

 Congress consented to the Compact and enacted it as

original legislation, as did each of the five states. See Omnibus Low-Level

Radioactive Waste Interstate Compact Consent Act, Pub. L. No. 99-240, § 222, 99

Stat. 1859, 1863 (1986) (reprinting the Compact); Entergy II, 241 F.3d at 982. 

The Compact established the Commission as its governing body and created

a framework for it to select an applicant to develop disposal facilities in the member

states. Art. V. Each member state is represented on the Commission by one

representative and is entitled to a single vote. Art. IV(a), (b). No action of the

Commission is binding unless a majority of the member states casts its votes in the

affirmative. Id. Each state was to have an opportunity to volunteer to host a regional

facility. Art. V(a). If no state volunteered or if no volunteer state's proposal were

acceptable, then the Commission would publicly seek proposals from applicants to

develop and operate one or more regional facilities as necessary. Art. V(b). 
-5-

Proposals were to be considered on the basis of the following criteria: (1) the

applicant's ability to obtain necessary licenses from applicable governmental

authorities; (2) the economic efficiency of the proposed facility; (3) whether the

applicant had sufficient financial resources to fund and maintain the facility; (4) the

accessibility of the proposed facility to all the party states; and (5) any other criteria

the Commission might deem necessary to ensure the health, safety, and welfare of the

citizens of the region and party states. Art. V(c). The Compact provided that an

applicant selected by the Commission to construct a radioactive waste disposal

facility would have to obtain required licenses from the appropriate state licensing

agencies (or the United States Nuclear Regulatory Commission in some

circumstances). Art. V(e)(2).

The Compact also created specific rights and obligations in each of the member

states. A state selected as the site for a disposal facility must "process all applications

for permits and licenses required for the development and operation of any regional

facility or facilities within a reasonable period from the time that a completed

application is submitted." Art. V(e)(2). To the extent authorized by Federal and host

State law, the host state must regulate and license any regional facility within its

borders and ensure the extended care of such facility. Art. III(b). Each state has "the

right to rely on the good faith performance of each other party state," Art. III(f), and

the Commission "shall . . . [r]equire all party states . . . to perform their duties and

obligations arising under this compact." Art. IV(m)(8). A party state which is found

to have arbitrarily or capriciously denied or delayed the issuance of a license . . . or

which otherwise fails to live up to its obligations under the Compact may have its

membership revoked by a two thirds vote of member states. Art. V(g), VII(e). A

state may withdraw from the Compact at any time by enacting a statute announcing

its withdrawal, but the withdrawal will not be effective until five years after notice

is served on the other member states, unless they unanimously agree to allow

immediate withdrawal. Art. VII(d). Withdrawal or revocation does not affect any

liability incurred by a party state before its membership effectively expires. Art.

VII(d), (e). 
-6-

Since no state volunteered to host the LLRW disposal facility, the Commission

invited development proposals from outside applicants. In February 1987, U.S.

Ecology, Inc. (USE) submitted a proposal to site, license, develop, construct, and

operate a facility, and in December of that year the Commission selected Nebraska

to host the first disposal facility. After a number of Nebraska localities requested that

the facility be built in their community, the Commission selected Boyd County as the

most promising location. The Commission then entered into a formal contract with

USE in January 1988 to develop a facility in Boyd County. USE agreed to prepare

and file the necessary license applications with the state and federal governments and

to construct and maintain the facility if its applications were successful.

Nebraska officials showed hostility to the idea of an LLRW facility in their

state almost from the beginning. After the state was chosen over its negative vote to

be the first host, Governor Kay Orr stated publicly that Nebraska was not happy to

be the site for a disposal facility, but that it would honor its commitments under the

Compact. See Entergy II, 241 F.3d at 983. During her campaign for reelection, the

waste facility became an issue and Orr was attacked by candidate Ben Nelson "for

doing far too little to protect the interests and respond to the concerns" of local

residents. Entergy Arkansas, Inc., 226 F. Supp. 2d at 1061 (internal quotation marks

omitted). Nelson promised that if he were elected governor, "it is not likely that there

will be a nuclear dump in . . . Nebraska." Id. Nelson won the election and entered

into office in January 1991, and the district court found that the new administration

soon began to work actively to prevent construction of the LLRW facility.

Although the licensing process had been initiated, it dragged on for over eight

years. In 1990 USE submitted its initial license application to the Low-Level

Radioactive Waste Program (LLRW Program). This program was operated by the

Nebraska Department of Environmental Quality (DEQ) and the Department of Health

and Human Services and Licensure (DOH), and these agencies required USE to

answer some 700 questions before they would even undertake a review of the

application. The process was made more difficult when Randolph Wood, the
5

Nebraska sued the Commission for access to federal funds which had been

disbursed to the Commission "for eventual payment to the host state." Entergy

Arkansas, Inc., 226 F. Supp. 2d at 1075. The Commission counterclaimed,

arguing that Nebraska had failed to demonstrate that rebate funds previously

distributed to the state had been used appropriately. Id. The action was settled

when the Commission agreed to pay Nebraska a portion of the rebate funds it

sought and Nebraska agreed to provide an accounting. Id. The rebate fund

payments are distinct from funds reimbursed to Nebraska by USE to cover the

state's expenditures in reviewing the license application.

-7-

governor's appointee to lead the DEQ, stopped exchanging information with USE and

refused to accept its responses to any questions until all 700 answers were submitted

together. The review process was further complicated by Nebraska's failure to budget

for it. The Nebraska Auditor of Public Accounts found in July 1992 that DEQ had

not adopted a budget to control the cost of the review process or a timetable to

complete the work. The auditor recommended that DEQ do so, but Wood did not

follow the recommendation.

After USE submitted answers to all the agency questions, DEQ issued a Notice

of Intent to Deny the license in January 1993. The reasons given by DEQ for denial

were that the site had wetlands and drainage problems. USE then initiated a

contested case administrative proceeding under state law to challenge DEQ's

decision. That proceeding was settled, and USE withdrew its administrative case and

amended its licensing application. The review process then continued with more

questions and technical review of the amended application.

The reinstituted review suffered a serious setback in 1995, when Nebraska told

its contractors doing technical review to cut back their work by twenty five percent

because of a dispute with the Commission over federal rebate funds.5

 Even after

Nebraska settled this dispute and promised to accelerate its review, the amount of

work done on the review continued to decline. After responding to four rounds of

questions from Nebraska's many consultants, USE advised Nebraska that its

application was finally complete on July 11, 1995. Nebraska responded two weeks
-8-

later, stating that it would accept no further materials related to the application unless

specifically requested by its reviewers. 

DEQ and DOH initially stated that their review of the completed application

would take approximately one year to complete, but DEQ later notified USE that the

review would take substantially longer. It reported that two technical documents

being prepared for the state would not be finished until October 1997, more than two

years after the submission of USE's completed application. Because of concern over

this delay, the Commission imposed a deadline of January 14, 1997 for Nebraska to

complete its review of USE's application. Nebraska sued to have the deadline

withdrawn, but we held on appeal that the Compact gave the Commission power to

set the deadline. Nebraska, 187 F.3d at 986.

The January deadline imposed by the Commission passed without a final

determination by Nebraska, but many months later in October 1997 the state released

two key reports. One was the Draft Safety Evaluation Report (DSER) which found

that "the facility met site suitability requirements." Entergy II, 241 F.3d at 984. The

DSER concluded that 

the LLRW Program [has] determined that the data and information

presented in U.S. Ecology's license application are acceptable. . . . [and

that] US Ecology has provided documentation that reasonably

demonstrates that [it] can obtain the necessary funds to cover the

estimated costs of conducting licensed activities over the planned

operating life of the facility, including the cost of construction and

disposal. 

Entergy Arkansas, Inc., 226 F. Supp. 2d at 1079 (internal quotation marks omitted).

The other was Nebraska's Independent Performance Assessment (IPA). The IPA

reported that even assuming the underlying soil was entirely saturated with water, the

long term performance of the structures after closure would easily satisfy regulatory

criteria regarding radioactive exposure for humans. Despite these favorable

assessments, the review process did not draw to a close.
-9-

Nebraska finally denied USE's amended license application in December 1998,

more than eight years after USE's initial application was submitted. The state did not

rely upon the favorable findings reached in 1997 by the DSER and the IPA. Instead,

the reasons given for denial were "that there was insufficient depth of the water table

at the site, that under the applicable regulations [DEQ] could not consider engineered

improvements to the site, and that USE had not shown financial ability to build and

run the facility." Entergy II, 241 F.3d at 984. The district court found after hearing

all the evidence that these reasons were pretextual and that the license had actually

been denied without regard to the technical merits of the application, but rather to

fulfill the governor's campaign promise to block development of the site. After its

application was denied, USE filed another contested case petition under Nebraska law

on January 15, 1999; this second administrative proceeding was enjoined by the

district court on the Commission's motion (affirmed in Entergy I, 210 F.3d at 890).

In August of the same year, the State of Nebraska announced its intention to withdraw

from the Compact, Neb. Rev. Stat. § 71-3522 (effective Aug. 28, 1999), but its

withdrawal will not become effective until August 28, 2004. Any obligations

incurred under the Compact prior to that date will still need to be fulfilled.

See Art.VII(d). 

It is undisputed that the Nebraska licensing process became very expensive.

Not only did the process extend for nearly a decade, but the technological issues

involved in the development of an LLRW disposal facility are extraordinarily

complex. To deal with all of the technical and regulatory issues involved, both the

state and USE had to hire many outside consultants—including sophisticated

engineering groups, scientific advisors, and law firms—and to retain them for much

of the process. The state also constructed a scientific laboratory near the proposed

site in order to conduct testing to evaluate the suitability of the site and the

application. In fact, the state was spending so much that the Nebraska Auditor of

Public Accounts recommended that it control costs by revising its agreement with its

primary contractor, HDR Engineering, Inc. The technical complexity of the process

and the demands placed on USE's application are reflected in the length of its final
-10-

submission. (The original application was approximately 4000 pages, but grew to

30,000 pages after four rounds of questions from some 100 state consultants.) 

The district court found that by the time the license was finally denied, over

$88 million had been spent directly on the application process. See Entergy

Arkansas, Inc. v. Nebraska, 226 F. Supp. 2d 1047, 1101 (D. Neb. 2002). Under

Nebraska law the applicant for an LLRW license is responsible for all costs of the

licensing process, including the costs incurred by the state. This meant that USE was

held responsible for whatever Nebraska chose to spend on the process, as well as for

its own expenditures in meeting the requirements set by the state. In return for USE's

undertaking to obtain a license and develop the radioactive waste disposal site and

for extending up to $6.26 million in work, the Commission agreed to advance it the

costs. The Commission was thus accountable for nearly the entire cost of the LLRW

licensing process, including the state's expenditures, while Nebraska controlled the

length and requirements of the process.

The Commission did not have resources to cover the high costs of the

application process. In order to carry out the decision of the member states to

construct an LLRW facility in Nebraska, it entered into an agreement with a group

of LLRW generators in the five Compact states. These included Entergy Arkansas,

Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., and Wolf Creek Nuclear

Operating Corp. (the Generators). Since the Generators produce radioactive waste

through their generation of electricity, they could be expected to benefit from the

construction of a waste disposal facility. 

The Generators' agreement with the Commission (and subsequent amendments

to it) provided that they would prepay for disposal services they expected to receive

in the future. By these prepayments, they advanced funds to the Commission which

it used to meet its commitment to USE. In this way the licensing expenses of all the

parties were paid by the Commission, using assets it had received in the form of

prepayments collected from the Generators and work performed by USE.
-11-

B.

This action was initiated by the Generators after they had advanced over $88

million during the long and futile licensing process, and USE intervened as a plaintiff.

Plaintiffs alleged that Nebraska had violated the good faith provision of the Compact,

as well as their constitutionally protected rights to procedural and substantive due

process, by deliberately delaying review of the license for eight years and by

intending that the process end in denial of the application. See Entergy II, 241 F.3d

at 984–85. USE alleged in addition that the Nebraska defendants had engaged in

tortious interference and conspiracy. The Commission was also named as a defendant

in the action, but the district court realigned it as a plaintiff after it filed a crossclaim

against Nebraska. 

The Commission sought declaratory and injunctive relief against Nebraska,

removal of the state from the licensing process and substitution of a neutral third

party so that a waste facility could be built, an accounting of all funds turned over to

the state, damages, and attorney fees. The damages sought in its amended complaint

included "all lost value of costs incurred and money therefore paid out by the

Commission" because of Nebraska's bad faith and delaying tactics. USE and the

Generators also sought legal and injunctive relief and asserted crossclaims against the

Commission for breach of contract and for a constructive trust on any funds it

recovered from Nebraska.

A number of motions were filed by the parties. The Commission and the

Generators moved for a preliminary injunction to enjoin the ongoing second

contested case proceeding in Nebraska, and that motion was granted. See Entergy,

Arkansas, Inc. v. Nebraska, 46 F. Supp. 2d 977, 992, 996 (D. Neb. 1999). Nebraska

made two motions to dismiss, arguing that the district court lacked subject matter

jurisdiction and that the plaintiffs had failed to state claims upon which relief could

be granted. The district court denied all but one part of Nebraska's motions. It ruled

that in respect to the claims of the Generators and USE, the Eleventh Amendment

protected the state and its officers in their official capacity against anything other than
-12-

declaratory and injunctive relief. See Entergy, Arkansas, Inc. v. Nebraska, 68 F.

Supp. 2d 1093, 1103–04 (D. Neb. 1999); Entergy, Arkansas, Inc. v. Nebraska, 68 F.

Supp. 2d 1104, 1110 (D. Neb. 1999).

Nebraska appealed from the preliminary injunction, arguing that "the district

court lacked jurisdiction over it, that the Commission had failed to make the

necessary showing for [an] . . . injunction, and that the injunction violated the AntiInjunction Act." Entergy I, 210 F.3d at 895–96. We affirmed after concluding that

there was jurisdiction because Nebraska had waived its sovereign immunity from suit

in federal court by entering into the Compact. See id. at 897. We also decided that

the plaintiffs had made a sufficient showing for preliminary injunctive relief and that

it was not barred by the Anti-Injunction Act.

Nebraska also appealed the denial of its motions to dismiss on the grounds of

Eleventh Amendment immunity. Entergy II, 241 F.3d at 986. We ruled that

Nebraska had waived its sovereign immunity to an action brought by the Commission

by "entering into a compact in which the party states delegated to the Commission

their authority to sue for breach and required the Commission to enforce contractual

obligations." Id. at 988. We affirmed the district court's determination that the state's

waiver of immunity extended to the Commission's claim for damages and its denial

of Nebraska's motion to dismiss the Commission's claims. 

As to the claims asserted under the Compact by USE and the Generators, we

reversed, holding that the good faith provision of the Compact did not create an

enforceable federal right for these parties. Their claims based on the Compact should

therefore have been dismissed. Their due process claims were remanded for further

analysis and then dismissed on remand. See Entergy Arkansas, Inc. v. Nebraska, 161

F. Supp. 2d 1001, 1002 (D. Neb. 2001).

Our decision in Entergy II allowed the Commission's suit against Nebraska to

proceed. Before trial the Commission moved to strike Nebraska's jury demand. The

district court granted the motion after concluding that the state had no Seventh
-13-

Amendment right to a jury trial in the circumstances of this case. See Entergy

Arkansas, Inc. v. Nebraska, 186 F. Supp. 2d 1036, 1041 (D. Neb. 2002). There

followed an eight week bench trial, after which the court issued findings and

conclusions in favor of the Commission in a lengthy memorandum and order. See

Entergy Arkansas, Inc., 226 F. Supp. 2d at 1047–1174. The detailed findings of the

district court relevant to bad faith alone took up almost 40 printed pages. See id. at

1102–40.

The district court found that Nebraska had breached its duty of good faith

under the Compact. Its subsidiary findings included the following: 

(1) Governor Nelson, either directly or through his subordinates,

influenced the process in order to fulfill a campaign promise which

required that the license be denied without regard to the technical

merits; (2) [the state] administration did not work diligently to ensure

that the application was considered fairly and reasonably; and (3) DEQ

and DOH did not act fairly or reasonably.

Id. at 1143. 

The district court also found that all the funds expended in the licensing

process and the work credits obtained from USE were assets of the Commission. It

had acquired them in consideration for agreements allowing USE to develop the

waste site and the Generators to receive future radioactive waste disposal services,

and the Commission drew on them to fund the licensing process. The district court

found that the entire value of the funds and credits had been lost as a direct result of

Nebraska's bad faith. 

Based on these findings, the district court granted declaratory relief but

concluded that the equitable relief originally requested by the Commission could no

longer be granted. The Commission had sought sweeping injunctive relief against
6

The Commission's request that the court "create a just and equitable

remedy, including injunction and mandamus as required" also suggested that this

might require removing the application process from Nebraska's control and

substituting an "appropriate means of completing the licensing," such as through a

special master, some "scientifically qualified" group, or an impartial governmental

agency, "all at defendant Nebraska's cost."

7

The district court also denied the Commission's request for an accounting

of the federal rebate funds paid out to Nebraska and rejected crossclaims by the

Generators for breach of contract and for a constructive trust. Id. at 1141, 1162. 

No appeal was taken from these rulings.

8

Such payments were required under Commission Rule 9 which was

adopted by the Commission at its December 8, 1987 meeting at the request of

-14-

Nebraska including completion of the licensing process under court supervision,6

 but

the court found that a "long-standing lack of professionalism and independence" in

the state departments gave it "no confidence that the staff . . . could be restored to an

objective state of mind by a mere court order." Id. at 1160. The court also found that

"many of the key consultants . . . [had] been put in the position of having to defend

Nebraska" and that it was not realistic to "suggest that [they] could fairly be expected

to drop their defensive duties and resume the role of independent consultants." Id.

The court also found that Nebraska's withdrawal from the Compact could limit the

future enforcement of injunctive relief and that establishment of any new oversight

entity should not be attempted by judicial action. For these reasons and because

granting "[n]o affirmative equitable relief is better than problematic equitable relief,"

injunctive relief was deemed impractical.7

 Id. 

The district court instead fashioned monetary relief, declaring that the

Commission was entitled to recover damages for the entire principal value of the

expended funds and for the work performed by and credited to USE. In addition to

the over $88 million spent on the application process, it found the Commission was

entitled to recover $3 million in community improvement funds it had paid to

Nebraska towns in the vicinity of the proposed waste facility because the value of

these funds was entirely lost due to Nebraska's bad faith.8

 The district court also
Nebraska Governor Kay Orr. The funds had been advanced to the Commission by

the nonhost states. 

-15-

found that the entire value of the "sweat equity" from USE had been lost as a result

of Nebraska's noncompliance, and the Commission could therefore recover

approximately $6.26 million for work credited to it. The amount the district court

found owing to the Commission thus totaled over $97 million, to which it added

prejudgment interest of approximately $53 million, as well as postjudgment interest.

Judgment was entered in favor of the Commission against Nebraska for a total of

$151,408,240.37. 

On appeal, Nebraska raises a number of issues. First, it contends that the

district court erred by striking its jury demand, arguing that the Commission's suit is

like a contract action tried to a jury at common law. It asserts that the court erred by

not applying an arbitrary and capricious standard in its consideration of Nebraska's

obligations under the Compact and that the only remedy available for the Commission

was injunctive relief. Nebraska further contends that the Commission suffered no

losses itself but is only seeking to recover for others and that the district court

overstated the amount of the losses. Finally, the state attacks the award of interest,

arguing that it retained its sovereign immunity as to an award of interest, that there

was no legal basis for an award of prejudgment interest, and that the amount was

miscalculated. The Commission counters that Nebraska was not entitled to a jury trial

in a case such as this, that the district court's findings were well supported by the

evidence and the law, that the damages awarded were appropriate and accurately

reflected the actual costs caused by Nebraska's bad faith, and that interest was

properly granted to make it whole.
-16-

II.

A.

Nebraska first argues that the district court erred by striking its jury trial

demand. Whether a party is "entitled to a jury trial under the Seventh Amendment is

a question of law" which we review de novo. Kampa v. White Consol. Indus., 115

F.3d 585, 586 (8th Cir. 1997).

The Seventh Amendment guarantees that "[i]n Suits at common law, where the

value in controversy shall exceed twenty dollars, the right of trial by jury shall be

preserved." U.S. Const. amend. VII. Over the years, the Supreme Court has

consistently explained that the "'right of trial by jury thus preserved is the right which

existed under the English common law when the amendment was adopted.'"

Markman v. Westview Instruments, Inc., 517 U.S. 370, 376 (1996) (quoting Balt. &

Carolina Line, Inc. v. Redman, 295 U.S. 654, 657 (1935)). Since the common law at

the time of the amendment provided for "a jury trial . . . in suits brought in the English

law courts," Tull v. United States, 481 U.S. 412, 417 (1987) (emphasis in original),

the Seventh Amendment guarantee extends to any cause of action "'that either was

tried at law at the time of the founding or is at least analogous to one that was.'" City

of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 708 (1999)

(quoting Markman, 517 U.S. at 376). 

Deciding whether an action fits the historical test employed by the Supreme

Court involves two inquiries. See Feltner v. Columbia Pictures Television, Inc., 523

U.S. 340, 348 (1998); see also Charles W. Wolfram, The Constitutional History of the

Seventh Amendment, 57 Minn. L. Rev. 639, 639-42 (1973) (describing development

of historical test). First, the action in question should be compared "to 18th-century

actions brought in the courts of England prior to the merger of the courts of law and

equity" to determine whether it is more analogous to an action that would have been

tried in a court of law or in equity. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33,

42 (1989). Second, the remedy sought should be examined to "determine whether it
-17-

is legal or equitable in nature." Id. See also Chauffeurs, Teamsters & Helpers, Local

No. 391 v. Terry, 494 U.S. 558, 564 (1990) (plurality opinion) (discussing two part

test). 

Nebraska urges that the best Eighteenth Century analog to the present case is

a simple contract action which would have been tried to a jury at common law. The

Commission argues that this analogy does not fit in this case which involves an

agreement among sovereign states enacted into law by Congress. 

This action arises out of the Compact which is a congressionally sanctioned

interstate compact specifically authorized under the United States Constitution. The

Compact Clause permits states with "the Consent of Congress . . . [to] enter into an[]

Agreement or Compact with another State." U.S. Const. art. I, § 10, cl. 3. The

impetus for the Compact grew out of an act of Congress in 1980, the Low-Level

Radioactive Waste Policy Act, Pub. L. No. 96-573, 94 Stat. 3347 (1980). The states

of Nebraska, Arkansas, Kansas, Louisiana, and Oklahoma entered into the Compact

after the statute was passed in order "to cooperate in the protection of the health,

safety and welfare of their citizens and the environment" by providing for the

"management of low-level radioactive wastes." Art. I. The Compact went into effect

in 1986 after it was approved by Congress. See Omnibus Low-Level Radioactive

Waste Compact Consent Act, Pub. L. No. 99-240, § 222, 99 Stat. 1859, 1863 (1986).

Although the Supreme Court has acknowledged that an interstate compact is

like a contract to the extent that it is "a legal document that must be construed and

applied in accordance with its terms," Texas v. New Mexico, 482 U.S. 124, 128

(1987), the Court has also recognized the unique features and functions of such a

compact. An interstate compact is one "of two methods under our Constitution of

settling controversies between States," Petty v. Tennessee-Missouri Bridge Comm'n,

359 U.S. 275, 279 n.5 (1959), and it "performs high functions in our federalism," id.
9

Invocation of the Supreme Court's original jurisdiction is the other means

of interstate dispute resolution explicitly mentioned in the Constitution. See U.S.

Const. art. III, § 2, cl. 2; Petty, 359 U.S. at 279 n.5.

-18-

at 279.9

 See also Felix Frankfurter & James M. Landis, The Compact Clause of the

Constitution—A Study in Interstate Adjustments, 34 Yale L.J. 685, 691-95 (1925)

(discussing history of Compact Clause). An interstate compact represents a political

compromise between "constituent elements of the Union," as opposed to a

commercial transaction. Hess v. Port Auth. Trans-Hudson Corp., 513 U.S. 30, 40

(1994). Such an agreement is made to "address interests and problems that do not

coincide nicely either with the national boundaries or with State lines—interests that

may be badly served or not served at all by the ordinary channels of National or State

political action." Id. (internal quotation marks omitted). 

While a common law contract directly affects only the rights and obligations

of the individual parties to it, an interstate compact may directly impact the

population, the economy, and the physical environment in the whole of the compact

area. A suit alleging that a state has breached an obligation owed to its sister states

under a congressionally approved interstate compact also raises delicate questions

bearing upon the relationship among separate sovereign polities with respect to

matters of both regional and national import. 

The source of the Commission's right to sue for breach of the Compact differs

from a right created by a contract. The Commission's right to bring this action arises

not from state common law, but from federal law since congressional approval was

required to make the Compact law. See U.S. Const. art. I, § 10, cl. 3. The terms of

the Compact became federal law when it was approved by Congress. See Entergy I,

210 F.3d at 897 ("The rights that the Commission seeks to enforce are federal rights

. . . ."). It was Congress, through its approval of the Compact, which established a

regulatory scheme to govern the mutual rights and obligations of the party states.

Within this framework the Commission is to "hear and negotiate disputes which may

arise between the party states regarding this Compact." Art. IV(m)(3). 
-19-

By means of the Compact, the member states "delegate[d] authority to the

Commission to initiate" proceedings to enforce their compact obligations. Entergy

II, 241 F.3d at 987–88 (citing Art. IV(e), (m)(8)). Indeed, the Compact commands

that the "Commission shall . . . require all party states . . . to perform their duties and

obligations arising under this compact." Art. IV(m)(8). The Commission was given

the power to carry out that responsibility when the five states agreed to give it

authority to enforce the Compact by "initiat[ing] any proceedings . . . before any court

of law, or any Federal, state or local agency, board or Commission that has

jurisdiction." Art. IV(e). When the Commission acts as the enforcement agency

created by the Compact, its rights arise from the federal statutory scheme adopted by

Congress through its approval of the Compact, rather than from the common law of

contract.

Nebraska argues that since the claims here are brought by the Commission, this

is not an action between sovereign states and a jury trial is therefore appropriate.

While at common law a sovereign likely had a right to a jury in a contract action with

a private party, see Standard Oil Co. of Cal. v. Arizona, 738 F.2d 1021, 1028 (9th Cir.

1984), the Commission cannot be equated with a private litigant. Even though the

Commission cannot itself be termed sovereign, see Hess, 513 U.S. at 52, it is a

creation of the Compact and represents the sovereign states which made it. Its role

within the congressionally approved framework created by the Compact differentiates

it from a private litigant enforcing individual rights or obligations. Through the

Compact, the member states have "delegate[d] authority to the Commission to

initiate" proceedings to enforce their compact obligations, Entergy II, 241 F.3d at

987–88 (citing Art. IV(e), (m)(8)), and they have commanded the Commission to

enforce performance by the party states, Art. IV(m)(8). The member states control

the actions of the Commission, and it is made up of one voting member from each

state and may only take action upon a majority vote of the total membership. See Art.

IV(a). 
-20-

The Commission is acting here within its delegated enforcement role and with

the sanction of a majority vote of the state representatives. This action is brought in

the interests of the nonhost member states to give effect to the political agreements

embodied in their Compact. In order to deal with the growing problem of radioactive

waste and its potential threat to both human health and the environment, the

sovereign states of Kansas, Oklahoma, Arkansas, and Louisiana entered into this

Compact with Nebraska. By entering into the Compact all five sovereign states

recognized that cooperation was necessary for "the protection of the health, safety and

welfare of their citizens and the environment." Art. I. Through joint action the states

hoped "to limit the number of facilities needed to effectively and efficiently manage

low-level radioactive wastes and to encourage the reduction of the generation thereof;

and to distribute the costs, benefits and obligations among the party states." Art. I.

They agreed that all five states have the right to expect good faith performance by

each of the member states, Art. III(f), and they created the Commission as the entity

to enforce their interests in performance of its terms.

The Commission urges that the closest Eighteenth Century analogy to this

action may be seen in disputes between the colonies. Resolution of such disputes was

within the province of the king, who normally referred them to a royal commission

in the first instance. See Frankfurter & Landis, supra, at 693. An appeal from a royal

commission's decision could be taken to the king in council, id. at 692 n.29, 693, but

was "usually delegated to the Privy Council," id. at 692 n.29. See also Virginia v.

West Virginia, 246 U.S. 565, 597 (1918) ("[D]ifferences between the colonies were

taken to the Privy Council for settlement."). A dispute between the colonies was thus

not decided by a court and could not be considered a "common-law cause[] of action

ordinarily decided in English law courts," Granfinanciera, 492 U.S. at 42; cf.

Markman, 517 U.S. at 381 (specific patent issue was not for a jury even in an action

at law, for "patent litigation had remained within the jurisdiction of the Privy Council

until 1752 and hence without the option of a jury trial").

The colonial jurisdiction once exercised by the Privy Council has been viewed

as akin to the Supreme Court's original jurisdiction over controversies between the
10In discussing the importance of submitting actions between the states to

federal jurisdiction, Alexander Hamilton explained that "[n]o man ought to be a

judge in his own cause, or in any cause in respect to which he has the least interest

or bias." The Federalist No. 80, at 478 (Alexander Hamilton) (Clinton Rossiter ed.

1961). And in explaining the reasonableness of excluding juries from admiralty

prize cases, which often raised issues touching upon the relations of sovereign

states, see 2 George L. Haskins & Herbert A. Johnson, History of the Supreme

Court of the United States 437–38 (Paul A. Freund ed., 1981), Hamilton cited both

the possibility that a jury would be unable "to pay sufficient regard to those

considerations of public policy which ought to guide their enquiries" and the

"danger that the rights of other nations might be infringed by their decisions." The

Federalist No. 83, supra, at 504 (Hamilton).

-21-

states. See Virginia, 246 U.S. at 598–99; Frankfurter & Landis, supra, at 694. Even

where monetary relief is sought in original actions between the states, issues of fact

are resolved by a special master rather than a jury. See, e.g., Kansas v. Colorado, 533

U.S. 1, 4–5 (2001); Richard H. Fallon, Jr. et al., Hart & Wechsler's The Federal

Courts and the Federal System 273 (5th ed. 2003). Our research has uncovered no

original action between sovereigns in which a jury has been empaneled. Cf. United

States v. Barnett, 330 F.2d 369, 429 n.85/11 (5th Cir. 1963) (opinion of Gewin, J.)

(describing the three known instances of trial by jury in the Supreme Court).

Nebraska's contract analogy might have more force if English common law

juries had been permitted to determine whether sovereigns had satisfied the rights and

obligations owed one another, but they were not. A search for a precise common law

analogy to our case would seek a multistate dispute in which a jury composed of

citizens and taxpayers of one of the states was asked to decide issues in which the

jurors had a direct interest. There is no indication that the Framers had such a sense

of the common law.10

Upon close examination of the Compact itself and the parties and interests

which created it, we cannot conclude that "the nature of the issues involved [in this
-22-

case]," Terry, 494 U.S. at 564 (plurality opinion), is similar to an Eighteenth Century

common law contract action. The Compact directly affects the interests of five

individual sovereign states and their citizens. It represents a collective effort of these

states to create facilities for the disposal of radioactive waste so that it does not

endanger their population or environment. In seeking to hold Nebraska to its

obligations under the Compact, the Commission acts pursuant to the power delegated

to it by the member states to enforce their mutual agreements. While contract

principles may inform the interpretation of an interstate compact and the remedies

available thereunder, see Texas, 482 U.S. at 128, this action is not like a contract

action at common law as heard in the English law courts of the late Eighteenth

Century. It is better understood by considering the nature of the interstate Compact

and the analogies advanced by the Commission. Cf. Terry, 494 U.S. at 568 (plurality

opinion) ("The nature of an action is in large part controlled by the nature of the

underlying relationship between the parties.").

The second inquiry in the Seventh Amendment historical test requires

examination of "the remedy sought and . . . whether it is legal or equitable in nature."

Granfinanciera, 492 U.S. at 42. The Commission originally sought sweeping

equitable and declaratory relief designed to obtain a fair process and completion of

the license application review, as well as damages for the "lost value" of what it had

already paid out. The district court decided after hearing the evidence, however, that

injunctive relief was no longer practical and instead granted the Commission's

interrelated request for money damages to compensate for the funds lost in the failed

licensing process.

Nebraska argues that the historical test must be decided in its favor because

damages are "'the traditional form of relief offered in the courts of law,'" Terry, 494

U.S. at 570 (quoting Curtis v. Loether, 415 U.S. 189, 196 (1974)). It points out that

"the relief sought is '[m]ore important' than finding a precisely analogous commonlaw cause of action," citing Tull, 481 U.S. at 421.
11The Commission had also sought "reasonably certain consequential

damages" for any further losses continuing into the future, including the cost of

finishing the licensing process and developing either the Boyd County site or the

next disposal site. The district court did not award any such damages.

-23-

Nebraska overlooks the fact that the historical test looks to the remedy which

was "sought" by the plaintiff, see Granfinanciera, 492 U.S. at 42, and that the major

relief sought by the Commission was equitable in nature. Although its prayer for

relief also requested damages, that request was intertwined with the other relief

requested. The compensatory damages sought were for "all lost value of costs

incurred and money therefore paid out by the Commission" in the futile licensing

process.11 If the interrelated request for injunctive relief had been granted at an early

stage of the application process, the lost value would have been relatively low. By

the end of trial when the district court decided injunctive relief was no longer

practical, many years of Nebraska's bad faith tactics had caused the lost value to grow

astronomically. 

The district court found that the injunctive relief originally sought would have

better protected the interests represented by the Commission than its award of

compensatory damages for the failed licensing process. One reason was because

traditional damages compensate established loss, and the court found that the loss in

value to the Commission from Nebraska's failure to perform in good faith "is

unknown and incapable of measurement to any reasonable degree of certainty."

Entergy Arkansas, Inc., 226 F. Supp. 2d at 1151. Although damages could not "serve

as a complete or adequate substitute for Nebraska's breach," id. at 1160, the process

had become so badly tainted that it could never be made to operate fairly so the court

settled on providing only monetary and declaratory relief. Id. at 1160–61. 

The decision on whether a jury trial is required must necessarily be made

before trial on the then existing record. In reviewing the district court's decision to

try this case without a jury, we must focus on the record as it existed before trial and

on the remedies sought by the Commission, rather than the remedy fashioned after
12Unlike the present case, the damages sought in Tull were clearly legal in

nature and substantially outweighed the nature of the injunctive relief sought. Tull

-24-

trial. See Granfinanciera, 492 U.S. at 42 (court must examine "remedy sought")

(emphasis added); Tull, 481 U.S. at 421 (examining "relief sought") (emphasis

added). The Commission originally requested a sweeping injunction asking for

restructuring of the licensing process for the low level radioactive waste disposal

facility under the supervision of the court or another entity of the court's choosing.

The Commission also sought declaratory relief, an accounting, and compensation for

its expenditures and losses incurred during the licensing process as a result of

Nebraska's bad faith. Entergy Arkansas, Inc., 226 F. Supp. 2d at 1150. The request

for damages was intertwined with the request for injunctive relief in that the

Commission's prayer for relief asked for compensatory damages for losses already

incurred in the absence of an injunction. Such damages are appropriately awarded

by a court of equity when a party has not performed within the time required. See

Restatement (Second) of Contracts, § 358 cmt. c (1981). 

The relief ultimately awarded by the district court cannot fairly be classified

as legal in nature. The Restatement (Second) of Contracts explains that "[a] claimant

who sues for specific performance or an injunction and who is denied that relief, may

be awarded damages or restitution in the same proceeding." Id. The Supreme Court

"has not . . . held that 'any award of monetary relief must necessarily be "legal"

relief.'" Terry, 494 U.S. at 570 (quoting Curtis, 415 U.S. at 196) (emphasis in

original). A "monetary award 'incidental to or intertwined with injunctive relief' may

be equitable." Id. at 571 (quoting Tull, 481 U.S. at 424). Damages awarded for

losses not fully cured by equitable relief are "exactly the type of monetary relief that

courts, and the [Restatement(Second) of Contracts], envision as equitable relief; they

are incidental to the grant of equitable relief, yet are necessary to afford complete

relief." Golden v. Hersey, 73 F.3d 648, 661 (6th Cir. 1996).

Although the second part of the historical test may in some circumstances

outweigh the first in significance, see Tull, 481 U.S. at 421,12 we believe that in this
involved a $22 million civil penalty under the Clean Water Act; such a punitive

remedy would have been available only in a court of law. Here, the court's grant

of money damages was not disproportionate to the nature of the powerful

injunction sought by the Commission. 

13It is also interesting to note that the Supreme Court has awarded monetary

damages without a jury in original actions between states arising from interstate

compacts. See, e.g., Kansas, 533 U.S. at 4-5.

-25-

case both parts of the test lead to the conclusion that the district court did not err in

striking Nebraska's jury demand. An action between sovereigns, as this case is in

substance, directly affecting the rights and interests of each of the five party states is

far in nature from a typical action at law in the English courts of the late Eighteenth

Century.13 As the Supreme Court noted in Tull, a court in equity may grant monetary

relief incidental to or intertwined with injunctive relief, 481 U.S. at 424, and the

second part of the test focuses on the relief which was sought by the plaintiff. Id. at

421. Here the Commission sought intertwined equitable and monetary relief. 

In sum, we conclude that the district court did not err by striking Nebraska's

jury demand. The Commission's action is not analogous to one tried at law in the

English courts of the Eighteenth Century. It involves a dispute growing out of an

interstate compact, sanctioned by the Constitution and Congress, and entered into by

five sovereign states. It is unlike disputes tried to a jury in the Eighteenth Century.

The chief remedy sought by the Commission was sweeping injunctive relief to move

the application process forward and construct a radioactive waste disposal facility in

Nebraska. It was only after the district court had heard all of the evidence that the

extent of Nebraska's bad faith was established and a suitable remedy had to be

fashioned. When the court found injunctive relief no longer practical, it turned to the

Commission's interrelated request for compensatory damages to provide an

appropriate remedy. We conclude that the district court did not commit legal error

or abuse its discretion in fashioning this monetary relief and that it did not violate the

Seventh Amendment by striking Nebraska's demand for a jury trial in the

circumstances of this case. 
-26-

B.

Nebraska also argues that the district court erred by finding that it breached its

good faith obligation under the Compact. Whether Nebraska failed to act in good

faith is a question of fact, which we review for clear error. See In re Armstrong, 285

F.3d 1092, 1096 (8th Cir. 2002). Conclusions of law are reviewed de novo. Walker

v. Maschner, 270 F.3d 573, 576 (8th Cir. 2001). 

Because this case arises under federal law and there is no federal common law

on the meaning of good faith under an interstate compact, the district court turned to

the Restatement (Second) of Contracts for guidance. Neither side has directly

challenged the district court's consideration of the Restatement, and we believe that

it is an appropriate reference. See Texas, 482 U.S. at 129 (citing the Restatement in

interstate compact case). 

The Restatement defines good faith in this way:

honesty in fact in the conduct or transaction concerned. . . . Good faith

performance . . . of a contract emphasizes faithfulness to an agreed

common purpose and consistency with the justified expectations of the

other party; it excludes a variety of types of conduct characterized as

involving "bad faith" because they violate community standards of

decency, fairness or reasonableness. 

Restatement (Second) of Contracts § 205 cmt. a (internal quotation marks omitted).

It discusses bad faith by giving examples:

 [B]ad faith may be overt or may consist of inaction . . . . A complete

catalogue of types of bad faith is impossible, but the following types are

among those which have been recognized in judicial decisions: evasion

of the spirit of the bargain, lack of diligence and slacking off, willful

rendering of imperfect performance, abuse of a power to specify terms,

and interference with or failure to cooperate in the other party's

performance.
-27-

Id. § 205 cmt. d.

Nebraska takes the position that the district court should have used an arbitrary

and capricious standard of review. To support its contention, Nebraska cites Art.

V(g) of the Compact, which provides that the membership of a state in the Compact

may be revoked if it is found to have "arbitrarily and capriciously denied or delayed

the issuance of a license." It does not follow that the standard for revocation of

membership should control other issues under the Compact, for "nothing in the

Compact states that [Art. V(g)] . . . is the exclusive enforcement mechanism."

Entergy I, 210 F.3d at 897. Indeed, the Compact elsewhere provides that "each party

state has the right to rely on the good faith performance of each other party state,"

Art. III(f), and that the Commission "may initiate any proceedings . . . relating to the

terms or provisions of [the] Compact," Art. IV(e). The district court properly focused

on whether Nebraska had carried out its Compact obligations in good faith during the

licensing process, rather than on conducting a traditional agency review. 

Nebraska also argues that giving full effect to the requirement of good faith

would impose nonnegotiated limits on its licensing discretion, citing United States

v. Basin Elec. Power Co., 248 F.3d 781, 796 (8th Cir. 2001) ("[I]mplied covenant [of

good faith] has nothing to do with the enforcement of terms actually negotiated and

cannot block [the] use of terms that actually appear in the contract.") (internal

quotation marks omitted and alteration in original) and Taylor Equip., Inc. v. John

Deere Co., 98 F.3d 1028, 1031–33 (8th Cir. 1996) (similar). These cases are not on

point, for there is no issue here of an implied promise of good faith modifying or

limiting an otherwise discretionary term in the Compact. Rather, the Commission

seeks to enforce the good faith covenant within the Compact, an explicit provision

which it was given the authority to enforce and which is separately enforceable. See

Entergy I, 210 F.3d at 897. To limit bad faith to arbitrary and capricious behavior

would undermine the structure of the multistate agreement. We thus agree with the

district court that the question before it was whether a preponderance of the evidence
-28-

proved that the State of Nebraska failed to act in good faith in respect to its

obligations under the Compact. 

The voluminous record supports the district court's factual findings of bad

faith. The district court dedicated almost 40 pages of its published opinion to these

findings and to cataloguing the evidence of Nebraska's bad faith. See Entergy

Arkansas, Inc., 226 F. Supp. 2d at 1102–40. The district court found that the license

was denied for political reasons without regard to the technical merits of the

application. 

Nebraska had denied the license application in December 1998, giving as

reasons "that there was insufficient depth of the water table at the site . . . and that

USE had not shown financial ability to build and run the facility." Entergy II, 241

F.3d at 984. The district court found that these reasons were simply pretext, and the

evidence supports its finding. Nebraska's final decision was completely at odds with

the findings and conclusions in the technical reports it had prepared. Both the IPA

and the DSER had concluded that groundwater did not pose a problem that would

prevent licensing. 

The IPA, a report commissioned by the state, was based on a study conducted

by Richard Arnold, a Ph.D. in mechanical engineering. Dr. Arnold used very

sophisticated computer and mathematical models to determine whether over a 10,000

year period the facility might expose the public to radiation in excess of regulatory

limits. His study employed very conservative assumptions, assuming for example

that the land under the concrete base of the facility would be "completely saturated

as a result of a high water table." He concluded that the "maximally exposed member

of the public will be subject to a Total Combined Total Effective Dose Equivalent of

5.0 mrem." Since the regulatory limit was 25 mrem, the IPA showed that the facility

was well within regulatory performance criteria for radiation exposure. 

The DSER had also reached favorable conclusions. The DSER was prepared

by over 100 technical consultants employed by Nebraska. They had been asked to
-29-

provide the "technical review of the license application" in order "to determine if the

facility meets applicable State laws and regulations, and if the facility's design,

physical features, and safety systems are technically acceptable." Among the analyses

underlying the DSER was a special computer study conducted by Dr. Stewart Taylor,

a Ph.D. in hydrology from Princeton University. The DSER concluded that "the data,

analysis, and information presented in [USE's] license application are acceptable"

with respect to "the [facility's] location, natural and demographic features, geologic

features, surface and groundwater conditions, and preoperational environmental

monitoring." The district court found that the DSER had actually rejected all of the

hydrologic grounds upon which Nebraska later relied to deny the license, and

Nebraska has not argued that this finding was erroneous.

In spite of these reports and the strong scientific evidence on which they were

based, Nebraska adopted a completely contrary position on the effect of groundwater

at the site. Nebraska argues there is scientific evidence to support this reversal. It

points to a study conducted after the completion of the DSER and IPA by its review

manager for site characteristics, Dr. Marvin Carlson. He concluded that groundwater

could pose a problem at the site, and the district court examined whether Nebraska's

decision to rely on Carlson's conclusion in the face of the strong scientific evidence

to the contrary was made in good faith.

The district court found that Carlson's study was not as scientifically persuasive

as the earlier research, and the record supports this determination. Carlson himself

was a geologist, not a hyrdrologist, and there was evidence that he had not consulted

with any of the hydrologists on Nebraska's review team. His report was based only

on visual inspection of hydrographs, rather than on any quantitative or statistical

analysis. Nebraska counters that Carlson's study incorporated data unavailable to the

earlier studies, but the Commission's experts provided evidence that these data were

not statistically different from those in the earlier studies. That evidence was not

disputed at trial by Nebraska's experts. Also undermining the reliability of Carlson's

study was the fact that on June 27, 1998, just one month before he concluded that 
14Documents had been prepared by the state as early as 1992 which

appeared to anticipate a disposition based on political concerns rather than the

technical merits of the license application. One memorandum recommended that

the governor order Wood to deny the license on site suitability grounds even if he

thought it was suitable since an appeal of his decision would be "strictly an

administrative appeal on the record. . . . [so the] [w]orse case scenario if the court

finds against the state, is that the Court will order the state to finish the license

review."

-30-

groundwater posed a problem, he had submitted an evaluation directly to the contrary

in which he indicated that it did not.

Randolph Wood, head of DEQ, testified at trial that his decision to deviate

from the DSER and IPA on groundwater issues was based on a simple cross section

drawing which showed the building plans and elevations of the land and groundwater

at the site. The district court questioned why Wood would rely on such an elementary

analysis after Nebraska had required USE to pay for much more complex and

sophisticated studies, such as those relied on by the DSER and IPA. It is also of note

that Nebraska has not relied on that cross section drawing in its argument that the

district court erred in finding that the decision denying USE's application was not

made in good faith.

Not only is Nebraska's failure to adopt the conclusions of its own consultants

in the DSER and IPA strong evidence of bad faith, there was evidence that the

groundwater issue was raised to support a political decision made by Wood in July

1998 or earlier to deny the license.14 For example, a July 18, 1998 email from one of

Nebraska's engineering consultants to other consultants stated that DEQ employees

were "trying to figure out how to spin responses, evaluations, and the [final decision

documents] . . . so that they would support [Wood's] no go decision. Their

conclusion was that first they must compose the decision document and then find the

technical support or lack thereof for the decisions." (emphasis added). Barry

Butterfield, the environmental review manager, told Wood in a meeting on July 24

that the denial decision was inconsistent with the IPA and was "technically
15The state reviewers included a CPA, an attorney from the law firm

consulting on the licensing process, and an environmental engineer with an

advanced business degree. 

16Nebraska argues that the DSER was not legally binding on the agency

decisionmakers and that its conclusions were not evidence of bad faith. The issue

is not whether the decisionmakers could reach a decision different from the DSER,

however, but whether they did so in good faith.

-31-

unsupportable." Butterfield later testified that Wood had replied, "this decision is not

about health and safety, it's about regulatory interpretation." Based on this and other

evidence in the record, we conclude that the district court did not err in finding that

"the 1998 decision to deny the license ostensibly because of concerns about water

was pretextual, unreasonable, and unfair." Entergy Arkansas, Inc., 226 F. Supp. 2d

at 1138.

The record also supports the district court's finding that the decision to deny

the license based on USE's financial condition was not made in good faith. There was

evidence that Nebraska attempted to manipulate the review of USE's financial

condition so as to support a decision denying the license. The state's regular financial

reviewers15 had all concluded that USE had provided sufficient written financial

assurances, and they had recommended that the state issue the license, conditioned

on USE's acquisition of adequate financing within 120 days. One of the review

managers reported to his superiors that conditional licenses were standard practice in

the construction world and "once you had a license in hand . . . people would be

standing in line to finance it because of the nature of the business, being a Compact

site as well as some form of a monopoly business." In addition, the DSER issued in

October 1997 concluded that USE "has demonstrated that it meets the financial

criteria established by the State of Nebraska."

Despite the favorable conclusions about USE's financial ability reached by the

state's own reviewers and the DSER,16 Wood decided to hire a brokerage and

investment firm for a further review. The firm had been recommended by a friend of

the governor, and Wood substantially limited the scope of its analysis. It was
17The financial analyst who prepared the report primarily studied the income

statements and balance sheets of USE's parent company. He testified that his

"focus was not to determine where they could find the money, but instead, if they

had a balance sheet and the operational history to support financing the project." 

He did not contact possible third party sources of funding, including banks,

insurance companies, or investors. He also testified that he had understood the

scope of his work to exclude consideration of possible financing by the

Commission or the Generators. 

18The state argues that the district court should not have admitted evidence

of bad faith executive conduct that occurred prior to 1993 because the case was

not filed until 1998 and a five year statute of limitations was applied. Federal law

determines the accrual date of a federal claim, see Union Pac. R.R. Co. v.

Beckham, 138 F.3d 325, 330 (8th Cir. 1998), however, and under federal common

-32-

instructed to ignore many common sources of financing, including financing from the

Generators.17 The analysis made no effort to capitalize the facility's anticipated future

income stream, even though USE was guaranteed a 20% rate of return under the

Compact and its contract with the Commission, and even though it would have had

a virtual monopoly for the five state area. The firm's final report asserted that "the

Company still does not appear to have the ability to finance a major project such as

the low-level radioactive waste disposal site . . . without major assistance and/or

guarantees from the largest members of the . . . Compact." Based on this limited

report, Nebraska's final decision document concluded that USE and its parent

company were not financially qualified to build the disposal facility.

After examining such evidence in the record, we conclude that the district court

did not err in finding that "the 1998 decision predicated upon a lack of financial

assurance was pretextual and covered up the real and bad faith reason that drove the

decision." 

The district court's finding that the decision to deny the license was based on

political rather than technical considerations was also supported by extensive

evidence stretching back to the very beginning of the Nelson administration that

suggests it was biased against the disposal facility and intended to undermine it.18
law "'there is no accrual [of a cause of action] until all facts exist so that the

plaintiff can allege a complete cause of action.'" Gustafson v. Cornelius Co., 724

F.2d 75, 79 n.9 (quoting Butler v. Local Union 823, Int'l Bhd. Teamsters, 514

F.2d 442, 450 (8th Cir. 1975) (per curiam), overruled on other grounds by United

Parcel Serv., Inc. v. Mitchell, 451 U.S. 56 (1981)). Here, the final denial of the

license did not occur until December 1998. There was in any event more than

enough evidence after 1993 to support the court's bad faith finding, and earlier

actions would have been admissible as background. 

Since the Commission's claim did not accrue until 1998, Nebraska's

argument that the district court should have applied a two year statute of

limitations need not be discussed, particularly since there was sufficient

supporting evidence within that two year period (including the final denial of the

application).

-33-

The governor had campaigned on a pledge to block construction of the disposal

facility, and an inference of bias against the facility may be drawn from his early

hiring decisions for several important positions related to the disposal facility. The

governor hired Kate Allen, a known site opponent, to be his chief LLRW policy

advisor, and a high ranking state official testified that she was "very biased on the

issue [of the disposal facility]." After the governor indicated that it was "important

to get [a] director [without] an agenda who we can trust" to head the DEQ, a friend

recommended Randolph Wood. Wood was hired even though he had informed the

administration that his philosophy was to "make no effort whatsoever to work with

an applicant to work out a way to use a piece of property that would be suitable."

There was also evidence that the governor's office informed Wood of "where the

governor is going on [the disposal facility] and what expectations for [Wood] will

be."

The record shows that the administration began to develop and implement a

plan to undermine the licensing process. Shortly before the governor took office,

Allen prepared an "Action Plan on [Low Level Radioactive Waste]." The first item

in the plan stated that "Upon taking office [the Governor] will order a moratorium on

further development of the facility . . . ." Allen's notes from meetings with the
-34-

governor show him formulating ideas to prevent construction of the facility. Her

notes reflect the governor saying: "[we must] create[] noise & difficulties[;] think we

can win it; expensive"; "[o]ur best bet is to be the under dog who has been taken

advantage of by the bad power companies"'; and "[I] want [USE] to think that [I am]

deranged."

In her position as chief LLRW policy advisor, Allen continued to act as she had

in her former role of outside site opponent. At one point she sent sensitive internal

documents describing the DEQ's legal analysis of the viability of the site to an

attorney representing a group opposing the facility. There was also evidence showing

that Allen tried to influence DEQ and DOH technical staff working on the license

application. Allen attended nonpublic DEQ and DOH meetings and asked questions

of review managers and even offered opinions on technical issues. The review

managers were upset by this interference and complained, and the LLRW Program

manager for DEQ testified at trial that Allen's participation in these meetings was

improper.

The plan to undermine the disposal facility was evidenced by the support and

encouragement the administration gave Allen, even though it knew that her negative

activities could be problematic. In an email to senior administration officials,

including the chief of staff and the governor's legal counsel, Allen acknowledged that

she knew of the possibility of "a 'bad faith' case against Nebraska." She was therefore

"being very careful in what I say." Instead of causing concern, Allen's actions

received support and praise from the administration. Allen's supervisor, for example,

sent her an email stating that he had "a good chat with the Governor." "First and

foremost," the email continued, "you still have the Governor's . . . unequivocal

support. The governor commented that you are bearing the brunt of the Compact's

[sic] disgust with him (and with your ability to 'blow their skirts up.'). . . . Bottom

line: Everybody here still loves ya, kid." Moreover, even though Allen was fired in

late 1992—for becoming a "legal liability" for the governor her notes report—the

evidence shows that members of his administration conferred with her at least 50

times after her firing while she was working as a part time lawyer for site opponents.
19Nebraska argues that the Noerr-Pennington doctrine prohibits

consideration of lawsuits as evidence of bad faith because they are protected by

the First Amendment, citing Razorback Ready Mix Concrete Co. v. Waever, 761

F.2d 484, 486 (8th Cir. 1985). Nebraska has not cited any authority which would

extend the Noerr-Pennington doctrine from antitrust law to this type of action. 

Nebraska also makes several other evidentiary arguments which we have carefully

considered and find without merit or dispositive impact.

20There was evidence that showed that the administration viewed the LMC

as a useful cover for its own agenda. For example, Kate Allen reminded her

superiors that the "LMC can still be used by the Governor to do things he cannot

do directly." 

-35-

There was also evidence that a further element of the plan to undermine the

project was to use litigation as a weapon against the Commission.19 Allen's notes

show that the governor told site opponents, "Let's talk about litigation [without]

giving our plan to the other side—We want to keep them off balance." He added,

according to Allen, "[l]itigation, will continue to look at every angle."

Nebraska filed six cases against the Commission during the period 1993 to

1997, losing five and settling the other. Several of these suits were duplicative, and

a similar action brought by Boyd County—represented by counsel for a group of site

opponents (the Local Monitoring Committee or LMC)—caused the district court to

express concern that the state was conducting "hit-and-run guerilla warfare by filing

multiple lawsuits on the same claim in order to frustrate performance of the

Compact."20 County of Boyd v. U.S. Ecology, 858 F. Supp. 960, 974 (D. Neb. 1994).

In affirming the district court, Judge Wollman characterized the case as "just the latest

in a series of actions attempting to block the [facility]." County of Boyd v. U.S.

Ecology, 48 F.3d 359, 360 (8th Cir. 1995). In a later action by Nebraska contending

that the Commission lacked the power to set a deadline, Judge Urbom found that the

state had declined even to attend a meeting to discuss a deadline and had failed to

provide answers to specific questions asked by the Commission about its progress in

processing the license application. See Nebraska v. Central Interstate Low-Level

Radioactive Waste Commission, No. 4:96CV3438 (D. Neb. Oct. 15, 1998). In
21The state argues that the district court failed to accord its decisionmakers a

presumption of both past and future honesty and impartiality as required by

Hortonville Joint Sch. Dist. No. 1 v. Hortonville Educ. Assoc., 426 U.S. 482, 497

(1976); Withrow v. Larkin, 421 U.S. 35, 47 (1975); Gordon v. Hansen, 168 F.3d

1109, 1114 (8th Cir. 1999); and Ikpeazu v. Univ. of Neb., 775 F.2d 250, 254 (8th

Cir. 1985). Even assuming that such a presumption extends beyond the issues of

procedural due process raised in those cases, the record here contains more than

enough evidence of bias to rebut it, even considering the turnover in state

-36-

affirming the district court, Judge Beam observed that the state's argument was

contrary to the "plain language" of the Compact. Nebraska, 187 F.3d at 987 (8th Cir.

1999). Another suit brought by Nebraska claimed, in spite of clear Compact language

to the contrary, that the state had a right to seat two voting members and one

nonvoting member on the Commission. See Nebraska ex rel. Nelson v. Central

Interstate Low-Level Radioactive Waste Comm'n, 902 F. Supp. 1046 (D. Neb. 1995).

That action was dismissed, and no appeal was taken.

The evidence of Nebraska's continuing efforts to thwart and delay the facility

strongly supports the district court's finding that USE was denied a license without

regard to the technical merits of its application. Indeed, the evidence shows that

Nebraska was prepared to do whatever was necessary to avoid hosting an LLRW

disposal facility—even if that meant ignoring its own consultants and denying the

license on pretextual grounds.

For the reasons discussed and based upon review of the entire record, we

conclude that the district court did not clearly err in finding that Nebraska ultimately

denied the license application for reasons not related to the merits of the application.

Such a denial in the context of Nebraska's commitments in the Compact is the essence

of bad faith, a calculated "evasion of the spirit of the bargain." Restatement (Second)

of Contracts § 205 cmt. d. Throughout the course of the licensing process, Nebraska

exhibited a lack of diligence or cooperative effort and willfully rendered imperfect

performance. See id. We conclude that the district court did not err by finding that

Nebraska breached the duty of good faith imposed by the Compact.21
personnel.

22In an earlier decision we rejected Nebraska's argument that the

Commission may not recover for its losses because it is not a party to the

Compact. See Entergy II, 241 F.3d at 988. The Commission was explicitly

empowered by the Compact to "initiate any proceedings . . . before any court of

law" in order to carry out its delegated duty to enforce the obligations imposed by

the Compact on the party states. Art. IV(e), (m)(8). To prevent the Commission

from seeking such relief would gravely undermine its ability to carry out its

enforcement duties.

23Nebraska also renews its argument that it did not waive its sovereign

immunity to monetary relief, but that issue was resolved against it earlier in this

case based on its commitments in the Compact. See Entergy II, 241 F.3d at 987

(affirming district court's ruling that waiver of sovereign immunity extended to

suits for money damages). 

-37-

C.

Nebraska also challenges the monetary relief awarded by the district court. It

first argues that even if the district court was correct that it acted in bad faith, the

court erred by awarding damages. It contends that the proper remedy for a flawed

administrative decision is a remand to the agency with instructions to correct the flaw.

Whether a particular remedy is available and appropriate is a question of law which

we review de novo. Cummings v. Connell, 316 F.3d 886, 893 (9th Cir. 2003). 

The gravamen of the Commission's suit is Nebraska's breach of the duty of

good faith imposed by this interstate Compact, rather than a challenge to a particular

agency action. Nebraska has not shown that any provision of the Compact limits the

remedies for breach to a remand or that our earlier ruling, that the Commission had

the right to sue for damages under the Compact, is wrong.22 Entergy II, 241 F.3d at

988; see also Kansas, 533 U.S. at 7 (awarding monetary relief for violations of

interstate compact). The district court did not err by declining to remand for further

action by the state agencies which administered the licensing process.23
24The cases cited by Nebraska in support of its argument that comity

requires another opportunity to process the license application differ from the

situation here. Some turn on whether an injunction overreached or excessively

limited the discretion of state officials, rather than on whether monetary relief was

appropriate in lieu of an injunction. See, e.g., Board of Regents of Univ. of Wisc.

v. Southworth, 529 U.S. 217 (2000); Missouri v. Jenkins, 515 U.S. 70, 85–86

-38-

An additional point raised by Nebraska is whether the court properly awarded

monetary relief in lieu of enjoining it to act in good faith. Nebraska argues that the

district court's failure to order the Commission to continue the licensing process is

contrary to "the well-established rule that the government has traditionally been

granted the widest latitude in the dispatch of its own internal affairs," Angela R. ex

rel. Hasselbein v. Clinton, 999 F.2d 320, 326 (8th Cir. 1993). We review a decision

not to impose a particular equitable remedy for an abuse of discretion. See Thorson

v. Gemini, Inc., 205 F.3d 370, 385 (8th Cir. 2000).

The record reveals that the district court considered, but ultimately rejected

injunctive relief. It found that the state agencies had demonstrated an inability to

review the license application fairly and that Nebraska's withdrawal from the

Compact made it unlikely an injunction could be effectively enforced. Earlier, in

affirming the preliminary injunction halting the second contested case proceeding, we

referred to evidence "that Nebraska did not provide, or intend to provide, impartial

consideration of [the license application] . . . . [and that] Nebraska has used its

administrative process wrongfully to delay and deny the license." Entergy I, 210 F.3d

at 899. Because of this record "the deference generally due a state's administrative

proceeding does not apply." Id.; cf. Coit Independence Joint Venture v. L. Ins. Corp.,

489 U.S. 561, 587 (1989) ("Administrative remedies that are inadequate need not be

exhausted."). Nebraska had over ten years before this case was even filed to comply

with the Compact, and it has not shown that its licensing proceedings would be any

fairer now were it given more time. Given the record of Nebraska's bad faith and

antagonism to the disposal facility since the state was chosen as the first site, the

district court did not abuse its discretion by awarding monetary relief when injunctive

relief was no longer feasible.24 See Lemon v. Kurtzman, 411 U.S. 192, 200 (1973)
(1995); Knox v. Salinas, 193 F.3d 123, 129–30 (2d Cir. 1999); Southworth v.

Grebe, 151 F.3d 717, 734 (7th Cir. 1998), rev'd on other grounds, Schwartz v.

Dolan, 86 F.3d 315, 319 (2d Cir. 1996); Clarke v. Coye, 60 F.3d 600, 604 (9th Cir.

1995); Schuldt v. Mankato Indep. Sch. Dist. No. 77, 937 F.2d 1357, 1360 (8th Cir.

1992). 

Others simply illustrate that in some situations it is appropriate to allow

agency proceedings to continue. See Yamaha Motor Corp. U.S.A. v. Stroud, 179

F.3d 598, 602 (8th Cir. 1999); Melendez v. U.S. Dep't of Justice, 926 F.2d 211,

219 (2d Cir. 1991); Jen Hung Ng v. INS, 804 F.2d 534, 539 (9th Cir. 1995). We

do not disagree with this principle, but the facts of this case call for a different

remedy. 

In First Nat'l Bank of Albuquerque v. Albright, 208 U.S. 548, 553 (1908),

there were no findings of bias or bad faith, but only a fear that an officer would

"perform [his statutory duty] wrongly." 

-39-

(plurality opinion) ("[E]quitable remedies are a special blend of what is necessary,

what is fair, and what is workable.") (emphasis added).

Nebraska next argues that even if damages were a permissible form of relief,

the Commission suffered no losses on which such a remedy could be based because

it sought to recover for funds received from the Generators and for USE's work. It

asserts that the Commission was at best the mere trustee of assets belonging to others

and that neither it nor the member states suffered any compensable harm. 

The record reveals that the funds from the Generators, the credits for USE's

work on the licensing process, and the funds from the nonhost states all became assets

of the Commission. The Commission's accountant testified that the expenditures on

which the district court's monetary relief was based were made with Commission

funds paid from its own accounts. The Commission acquired most of these funds as

part of negotiated exchanges for valuable rights it controlled. It obtained funds from

the Generators in exchange for future disposal services and work from USE in

exchange for allowing it to develop and operate the site. It also collected $3 million

from the other Compact states to distribute as community improvement grants in
25Nebraska also argues that the district court did not properly confine its

award to protecting traditional interests, such as expectation or reliance interests. 

We note that the Restatement makes clear that "in situations in which a court

grants such relief as justice requires, the relief may not correspond precisely to any

of these interests." Restatement (Second) of Contracts § 344 cmt. a. The

traditional interests "are not inflexible limits on relief." Id. In this case, the

district court concluded that the Commission's expectation interest was

incalculable and therefore sought to protect its reliance interest. By compensating

the Commission for its expenditures, the district court placed it "in as good a

position as [it] would have been in had the [Nebraska site venture] not been

[undertaken]." Id. § 344(b) (describing reliance damages). 

-40-

Boyd County. Whether any of these other entities seek adjustments in their accounts

in the future is not at issue here. 

The issue is whether the district court erred by requiring Nebraska to reimburse

the Commission for the costs of a license application process made futile by the

state's bad faith. At an earlier stage we held that the Commission could seek to

recover for the funds and work expended in pursuit of the license, see Entergy II, 241

F.3d at 988, and the more complete record now before us further supports that

conclusion. The district court did not clearly err in calculating the Commission's

losses.

Finally, Nebraska argues that the district court overstated the Commission's

losses by not reducing its award to account for the residual value of the license

application. The district court specifically found that the entire value of the expended

funds and effort had been wasted, but the state contends that the Commission, USE,

and the Generators received some value from the process. That value is said by

Nebraska to be a completed application. Given that the evidence supports the district

court's finding that the licensing process is irremediably broken and that Nebraska has

suggested no use for the application outside of this review process, the district court

did not clearly err in holding that the Commission received no value from the

licensing process.25
-41-

D.

Nebraska contends that the district court also erred by awarding interest. It

argues that it enjoys sovereign immunity from interest and that only a specific waiver

is effective in respect to interest, citing Library of Cong. v. Shaw, 478 U.S. 310,

314–15 (1986) ("In the absence of express congressional consent to the award of

interest separate from a general waiver of immunity to suit, the United States is

immune from an interest award."). Whether a state has waived its sovereign

immunity is a question of law which we review de novo. See Entergy II, 241 F.3d at

987.

We have previously declined to extend Shaw to a question of state sovereign

immunity. In Jenkins v. Missouri, we noted that Shaw involved a suit against the

federal government and was therefore not controlling "in a case involving eleventh

amendment, rather than federal sovereign immunity." 838 F.2d 260, 265 (8th Cir.

1988) (affirming enhanced award of attorney fees to account for delay in payment).

The Supreme Court later affirmed our court on the Eleventh Amendment issue, and

it also expressly limited Shaw to the issue of federal immunity. The Court saw no

"equivalent rule relating to state immunity that embodies the same ultrastrict rule of

construction for interest awards that has grown up around the federal no-interest

rule." Missouri v. Jenkins, 491 U.S. 274, 281 n.3 (1989); see also Reopell v.

Massachusetts, 936 F.2d 12, 15 (1st Cir. 1991) (noting the Court's limitation of Shaw

in Jenkins); Pegues v. Mississippi State Employment Serv., 899 F.2d 1449, 1454 &

nn.29–30 (5th Cir. 1990) (same). We agree with the First Circuit's conclusion in

Reopell that if a state's sovereign immunity does not bar the underlying monetary

award, it will not bar an award of interest. Reopell, 936 F.2d at 15. Because

Nebraska has waived its immunity from an award of damages, it also has no immunity

from the assessment of interest.

Nebraska also argues that even if it has no constitutional immunity to an

interest award, an award of prejudgment interest was not legally permissible in this

case. Whether a particular remedy is available is a question of law which we review
-42-

de novo. Cummings, 316 F.3d at 893. The state contends that prejudgment interest

may not be awarded since it was not specifically authorized by the Compact. 

A district court may award prejudgment interest if "federal law authorizes

[such] awards . . . [in the relevant action]," Monessen Southwestern R.R. Co. v.

Morgan, 486 U.S. 330, 336 (1988), and federal common law clearly permits

prejudgment interest to be awarded as a part of the remedy for breach of an interstate

compact. For example, in Kansas, the Supreme Court awarded Kansas prejudgment

interest over Colorado's objection even though the compact in question was silent on

the issue of remedies. 533 U.S. at 9–12; id. at 24 (O'Connor, J., dissenting) (noting

Compact's silence on remedies). 

Nebraska also argues that the district court should have applied a Nebraska

statute that prohibits imposition of prejudgment interest on the state. See Neb. Rev.

Stat. § 45-103.04. This argument overlooks the rule that "whether interest is to be

allowed . . . is a question of federal law where the cause of action arises from a

federal statute." Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1330 (8th Cir. 1995);

see also Morgan, 486 U.S. at 335 ("Pennsylvania courts erred in treating the

availability of prejudgment interest in FELA actions as a matter of state law rather

than federal law."). While it is true that the Supreme Court considered state law in

Board of Comm'rs of Jackson County v. United States, 308 U.S. 343 (1939), a case

about whether interest was due an Indian taxed in violation of federal law, the Court

specifically held that state law did not control the issue. See id. at 350-51 ("[T]he

federal courts [are not] restricted to the remedies available in state courts in enforcing

such federal rights."). The Court nevertheless "absorbed" the state law on interest as

the governing federal rule in deference to "considerations of fairness." Id. at 351-52.

Nebraska has not shown that fairness considerations require application of its interest

statute in the circumstances of this case, however. We conclude that the district court

did not err by not applying the state prejudgment interest statute. Cf. Kansas, 533

U.S. at 9–12 (awarding prejudgment interest without reference to state law).

Nebraska also takes issue with the amount of prejudgment interest awarded by
26Nebraska also cites Reyes-Mata v. IBP, Inc., 299 F.3d 504 (5th Cir. 2002),

and Castrignano v. E.R. Squibb & Sons, Inc., 900 F.2d 455 (1st Cir. 1990), in

support of its position, but those cases are not on point since they arose under state

law and involved state prejudgment interest statutes.

-43-

the district court. Interest was awarded on Commission payments starting in 1987,

but Nebraska argues that it should only have been calculated from the point at which

the Commission's claim accrued for statute of limitations purposes, which the district

court held to be 1998. A decision granting prejudgment interest is reviewed for abuse

of discretion. Frazier v. Iowa Beef Processors, Inc., 200 F.3d 1190, 1194 (8th Cir.

2000).

Nebraska cites cases such as West Virginia v. United States, 479 U.S. 305, 311

n.2 (1987),26 which have calculated prejudgment interest from the date of claim

accrual "for the loss of use of money," and contends that this is the rule that should

be followed here. Other decisions have considered "the equities" to set the starting

date. See, e.g., Kansas, 533 U.S. at 14; NYSA-ILA Med. & Clinical Servs. Fund v.

Salco Trucking Corp., No. 90 Civ. 5949, 1995 WL 404863, at *1-2 (S.D.N.Y. July

6, 1995) (claim accrual date "has no bearing on setting the appropriate date of accrual

of pre-judgment interest"). It makes sense to us that courts have not agreed on a

bright line rule because the "essential rationale for awarding prejudgment interest is

to ensure that an injured party is fully compensated." Milwaukee v. Cement Div.,

Nat'l Gypsum Corp., 515 U.S. 189, 195 & n.7 (1995). 

Since the goal of prejudgment interest is full compensation, the approach used

in West Virginia to fashion an award is not appropriate here because the

circumstances are very different. In West Virginia, the United States sued the state

to collect a contractual debt, 479 U.S. at 306, and it was awarded a judgment for the

full amount of the debt, plus prejudgment interest as of the date it had billed the state,

rather than the date it had performed the services. Id. at 307, 313, aff'g United States

v. West Virginia, 765 F.2d 1028, 1030 (4th Cir. 1985) (establishing accrual date of

prejudgment interest). This award put the United States in the same position it would
-44-

have been in if West Virginia had fulfilled its obligations, see Restatement (Second)

of Contracts § 347 (describing expectation interest), for it received the amount the

state had contracted to pay, plus compensation for the loss of the use of its money

during the time it was wrongfully withheld. Awarding prejudgment interest dating

back to the first performance by the United States would have overcompensated it

because West Virginia's debt was not due until the date of billing. In other words, the

United States' expectation interest was only to be paid on the contract date.

Here, the Commission made periodic payments in furtherance of the licensing

process beginning in 1987, and the evidence supports the district court's finding that

the entire value of these funds was wasted by Nebraska's breach. Full compensation

requires not just an award of the principal value of the funds, but also compensation

for the Commission's loss of their use. The court tried to put the Commission in the

position it would have been in had Nebraska not been selected to host the radioactive

waste disposal facility, for the Commission would never have given up the funds or

work credits in question without relying on Nebraska's performance. Full protection

of the Commission's reliance interest requires that it be compensated for the entire

period that it was without the use of its funds. See id. § 344(b) ("[Reliance interest]

is [the promissee's] interest in being reimbursed for loss caused by reliance on the

contract by being put in as good a position as he would have been in had the contract

not been made."). Awarding prejudgment interest from the date the Commission

made payments in reliance on Nebraska's performance achieves the goal of full

compensation. We conclude that the district court did not abuse its discretion in its

award.

III.

After lengthy proceedings in the district court and multiple appeals before

different panels of this court, the issues have been fully presented. We have carefully

examined the extensive record and the arguments of the parties, and for the reasons

cited we conclude that the district court did not err in striking Nebraska's demand for

a jury trial, in finding that Nebraska breached its good faith obligation under the
-45-

Compact, in exercising its discretion in fashioning monetary relief instead of an

injunction, in its awards of damages and interest, or in any other respect relevant to

this appeal. The judgment of the district court is therefore affirmed.

______________________________