Opinion ID: 705085
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: 2 The plaintiffs--Duquesne Light Company, The Cleveland Electric Illuminating Company, The Toledo Edison Company, Ohio Edison Company, and the Pennsylvania Power Company--together constructed and own the Beaver Valley Nuclear Power Station, a two-unit nuclear energy generating facility located near Pittsburgh, Pennsylvania. Duquesne points out that it had primary responsibility for supervising the construction of the plant, and it now operates the plant on behalf of the co-owners. Br. at 5 n. 2. We therefore will refer to the plaintiffs singularly as Duquesne. 3 In the 1960's, Duquesne issued a request for proposals and bid specifications for equipment to be used at the plant. Westinghouse submitted a proposal, and, after negotiations, entered into a contract with Duquesne under which it agreed to supply Nuclear Steam Supply Systems (NSSS) for the Beaver Valley units. It is beyond doubt that during these negotiations the parties had sophisticated technical, commercial, and legal advice. The parties executed the contracts for the units respectively on October 3, 1967, and January 5, 1972. Each NSSS contains a nuclear reactor, three steam generators, and a number of other components that together convert heat from nuclear fission into steam. The steam generators for the first unit were installed in 1972; those for the second unit were installed in 1981. The units began commercial operations in, respectively, April 1977 and November 1987. Duquesne contends that when it negotiated the contracts, it sought steam generators that would last approximately 40 years and it points to facts that tend to support that contention. For instance the method of installing the NSSS equipment makes removing or replacing the steam generators extremely difficult. 4 In the 1980s, Duquesne discovered corrosion and cracking in the generators' U-shaped Inconel-made tubes through which radioactive water is pumped from the reactor vessel to the steam generators. Such corrosion and cracking affect both the plant's power output and safety. Duquesne engaged experts to examine the rapid deterioration who concluded, among other things, that the tube material--Inconel 600--made the equipment unusually susceptible to corrosion. Duquesne ultimately determined that it would have to replace the steam generators. 5 On April 30, 1991, Duquesne filed this action against Westinghouse alleging breach of contract, breach of warranty, breach of the Uniform Commercial Code duty of good faith, fraud, negligent misrepresentation, and violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sec. 1962(b) and (c). On December 1, 1993, Westinghouse filed a motion for summary judgment on all counts of the complaint. The district court referred the motion to a magistrate judge who issued a thorough and detailed report and recommendation on July 18, 1994. In an order dated August 29, 1994, the district court adopted (with modifications) the magistrate judge's report and recommendation, and granted Westinghouse summary judgment on Duquesne's negligent misrepresentation claim and on its claim under 18 U.S.C. Sec. 1962(b). The court denied the motion in all other respects, 1 and rejected Westinghouse's argument that the various statutes of limitations and repose precluded Duquesne's claims. 6 The case proceeded to trial on September 12, 1994. At the close of Duquesne's case Westinghouse moved for judgment as a matter of law, and on October 24 the district court in a bench opinion granted that motion in most respects. It dismissed Duquesne's claims of breach of contract, breach of warranty, breach of the duty of good faith and fair dealing, and violations of RICO. It also dismissed Duquesne's claim for punitive damages. The court permitted Duquesne's fraud claim, however, to go to the jury. On December 6, 1994, the jury returned a verdict in favor of Westinghouse on that claim. The court entered judgment on December 7, and Duquesne timely filed a notice of appeal. 2 We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. Because of the RICO claim, the district court exercised subject matter jurisdiction under 18 U.S.C. Sec. 1964(c) and 28 U.S.C. Sec. 1331, and supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. Sec. 1367(a). 3