Government’s motion to dismiss contractor claim for lack of jurisdiction and failure to state a claim is denied. The government argued the contractor lacked standing because it had previously assigned the contract to another company. Although the assignment had reserved claims against the government, the government contended that the reservation did not include the type of claim the contractor was now asserting. The court rejected this argument, finding that the reservation was worded broadly to include any claim against government, even claims that had not yet accrued.
Boston Edison Company had a contract with the Department of Energy under which it agreed to pay the agency in exchange for the transport and disposal of spent nuclear fuel from the Pilgrim Nuclear Power Station in Massachusetts. Boston Edison paid DOE, but the agency never collected the spend nuclear fuel.
In 1999, Boston Edison sold the Pilgrim plant to another company, Entergy. As part of the sale, Boston Edison assigned its rights under the DOE contract to Entergy. Nevertheless, the assignment stated that it excepted any claim that Boston Edison had against DOE for breach of the agreement.
Boston Edison filed suit in the Court of Federal Claims against DOE alleging the agency breached the contract. The court found there was a breach and awarded Boston Edison $40 million in damages for diminution in value of the plant due to storage of spent fuel that DOE had not removed. DOE appealed to the Federal Circuit, which reversed in part, holding that Boston Edison could not recover for portions of its claims that sought damages for anticipated nonperformance. On remand, the COFC, held that Boston Edison still had a claim for decommissioning costs against the government that could mature when the Pilgrim plant was decommissioned. The COFC thus dismissed Boston Edison’s suit without prejudice.
Following decommission of the plant, Boston Edison filed suit against the government in 2020 alleging breach of contract and seeking $40 million in decommission costs arising from the storage of spent nuclear fuel. Boston Edison alleged that but for DOE’s breach of contract, it would not have incurred these costs. The government moved to dismiss Boston Edison’s suit for lack of jurisdiction and failure to state a claim.
The government argued that Boston Edison could not seek damages for breach because it was no longer in privity of contract with the government. While Boston Edison had attempted to retain claims against the government in its assignment, the government argued that the claim for decommission costs was not included in the reservation because it had not accrued at the time Boston Edison executed the assignment.
The court rejected this argument, reasoning that the assignment was worded broadly applying to any and all claims “whether relating to periods prior to or following” the plant decommission. Boston Edison effectively retained its rights against the government.
The government also argued that courts had previously found  that Boston Edison’s claims were too speculative to provide a concrete injury sufficient for standing. The court didn’t buy it, noting that the Federal Circuit’s ruling had foreclosed a future claim on diminution of value but had left outstanding claims for decommissioning costs. Now that decommissioning had begun, Boston Edison had standing to bring the claim
The government also contended that Boston Edison had failed to state a claim because the Federal Circuit had considered and rejected the company’s previous claim seeking damages for diminution in value. Again, however, the court noted, the Federal Circuit decision had only rejected the diminution of value claim but had not foreclosed Boston Edison from asserting a claim for decommission costs.
Boston Edison is represented by Richard J. Conway, Frederick M. Lowther, Adam Proujansky, and Nicholas W. Mattia of Blank Rome LLP as well as Neven Rabadjija of Eversource Energy. The government is represented by Eric J. Singley, Jeffrey Bossert Clark, Robert E. Kirschman, Jr., and Lisa L. Donahue of the Department of Justice as well as Brighton Springer of the Department of Energy.