Opinion ID: 215359
Heading Depth: 1
Heading Rank: 3

Heading: One-Time Fee

Text: Seeking to offset damages, the government also appeals the trial court's dismissal of certain counterclaims and defenses. Specifically, the government asserts that because Dominion's one-time fee is not yet payable because of the government's breach, Dominion may have profited by having use of that money in the meantime. Thus, the government reasons, it is entitled to discovery into any economic benefit obtained by Dominion by deferring payment of the one-time fee until the government finally performs. Within two years of execution of a Standard Contract, a contracting utility is required to select one of three options for the payment of a one-time fee for the disposal of SNF generated before April 7, 1983: (a) Option 1  The Purchaser's financial obligation for said fuel shall be prorated evenly over forty (40) quarters. . . . (b) Option 2  The Purchaser's financial obligation shall be paid in the form of a single payment anytime prior to the first delivery . . . and shall consist of the fee plus interest on the outstanding fee balance. Interest is to be calculated from April 7, 1983, to the date of the payment based upon the 13-week Treasury bill rate. . . . (c) Option 3  The Purchaser's financial obligation shall be paid prior to June 30, 1985, or prior to two (2) years after contract execution, whichever comes later. . . . Standard Contract, art. VIII.B.2. No one-time fee is payable for Millstone Unit Three because it did not generate any electricity prior to April 7, 1983. For Millstone Units One and Two, Northeast Utilities selected Option 2, and agreed to pay a total of $82.1 million prior to the DOE's acceptance of its first delivery of SNF. The parties do not dispute that this one-time fee is not yet due because of the government's breach. According to the government, Dominion (or its predecessor) would have paid the one-time fee by 1998 had the government timely performed under the Standard Contract. The government asserts that it should be allowed to investigate if Dominion has received any economic benefit from having the use of that money in the meantime by investing, financing other projects, or avoiding the need to obtain loans. The Court of Federal Claims disagreed, and noted that the one-time fee is simply not yet due under the Standard Contract, and the parties have contracted for how much interest accrues in the interim. 77 Fed. Cl. at 157. The court concluded that [u]ntil the one-time fee becomes due, the government does not have a claim for early payment. Id. Nonetheless, the government asserts on appeal that Dominion should not be put into a better position or receive a windfall because of the government's breach. The government previously argued a variant of this theory before us in another SNF case. See Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1280 (Fed. Cir.2008). In that case, we found that the utility had no obligation to pay the one-time fee that was not yet due according to the terms of Option 2. Id. Our holding in Yankee Atomic forecloses the government's arguments in this case. Because the injured utilities are not relieved by the government's partial breach from their obligation to pay the fee with interest when it comes due, the government is not entitled to an offset for any damages awarded. Id. Indeed, in our analysis Yankee Atomic, we quoted the case on appeal before us now. We stated that the Court of Federal Claims correctly note[d] that [The utilities] still have the SNF, the government still has the obligation to pick it up, and plaintiffs still have to pay the one-time fee when it becomes due. The only thing that is different from the contract scenario is that [the utilities'] claim to have been forced to absorb unnecessary interim storage costs. If the government reimburses such costs, it hardly puts plaintiffs in a better position. Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1281 (Fed.Cir.2008) (quoting 77 Fed.Cl. at 156). We see no merit whatsoever to the government's argument that Dominion may have benefited from the government's breach. Moreover the parties agreed ex ante, expressly in the contract that the utility would pay the onetime fee with interest accruing from April of 1983 at the thirteen-week Treasury bill rate. [2] Dominion cannot ask for increased damages should its investment of the one-time fee return less than the thirteen-week rate, and the government cannot ask for a reduction in damages should Dominion's investments return more. For either party, such gains or losses are too remote, too far removed from the breach, and the result of intervening investment risk. See LaSalle Talman Bank v. United States, 317 F.3d 1363, 1373 (Fed.Cir.2003); Hughes Commc'ns Galaxy, Inc. v. United States, 271 F.3d 1060, 1072 (Fed.Cir.2001). For the forgoing reasons, we affirm the Court of Federal Claims' award of damages to Dominion, including its dismissal of the government's defenses and counterclaims regarding the one-time fee. AFFIRMED.