       NOTE: This disposition is nonprecedential.


  United States Court of Appeals
      for the Federal Circuit
                ______________________

 SACRAMENTO MUNICIPAL UTILITY DISTRICT,
            Plaintiff-Appellant,

                           v.

                  UNITED STATES,
                  Defendant-Appellee.
                ______________________

                   2013-5086, -5087
                ______________________

    Appeals from the United States Court of Federal
Claims in Nos. 98-CV-0488 and 09-CV-0587, Judge Susan
G. Braden.
                ______________________

                Decided: June 20, 2014
                ______________________

   TIMOTHY R. MACDONALD, Arnold & Porter, LLP, of
Denver, Colorado, argued for plaintiff-appellant. With
him on the brief were L. JAMES LYMAN; and HOWARD
CAYNE, of Washington, DC.

    SCOTT R. DAMELIN, Trial Attorney, Commercial Liti-
gation Branch, Civil Division, United States Department
of Justice, of Washington, DC, argued for defendant-
appellee. With him on the brief were STUART F. DELERY,
Assistant Attorney General, JEANNE E. DAVIDSON, Direc-
2                       SACRAMENTO MUNICIPAL UTILITY    v. US



tor, BRYANT G. SNEE, Deputy Director, MARIAN E.
SULLIVAN, Assistant Director, and CHRISTOPHER J.
CARNEY, Trial Attorney. Of counsel on the brief was JANE
K. TAYLOR, Office of General Counsel, United States
Department of Energy, of Washington, DC.
                ______________________

    Before LOURIE, RADER, ∗ and MOORE, Circuit Judges.
RADER, Circuit Judge.
    Under the Nuclear Waste Policy Act of 1982 (NWPA),
42 U.S.C. §§ 10101–10270, Sacramento Municipal Utility
District (SMUD), a California public utility, entered into a
standard contract with the Department of Energy (De-
partment) in which SMUD agreed to pay $40 million into
the Nuclear Waste Fund (NWF) and, in return, the De-
partment promised to begin accepting and disposing of
SMUD’s spent nuclear fuel (SNF) and high-level radioac-
tive waste (HLW) in 1998. 10 C.F.R. § 961.11 (2010). To
date, the Department has yet to begin performance.
SMUD filed its first suit for damages in 1998 and, despite
prevailing in a complex series of adjudications, SMUD has
yet to recover any damages owed by the Department.
    Because the United States Court of Federal Claims
erred by reducing SMUD’s award in a first suit by inflat-
ed offsets improperly assessed in a second suit, this court
reverses the combined judgment of $38,845,398 for the
period of 1992–2009 and reinstates a prior $53,159,863
award for the period of 1992–2003. That prior judgment
shall be executed immediately. Further, the trial court
erred by barring SMUD’s exchange theory in the second
suit on the basis of collateral estoppel, and by re-assessing
a prior wet pool offset determination that is the law of the



    ∗
       Randall R. Rader vacated the position of Chief
Judge on May 30, 2014.
SACRAMENTO MUNICIPAL UTILITY      v. US                   3



case. Accordingly, this court vacates the award with
respect to 2004–2009 and remands for consideration of
the exchange theory and to determine a fuel-out date.
                             I.
    This appeal is one of many arising from a longstand-
ing series of contract disputes between the nuclear power
industry and the Government. These disputes arise from
damages owed to the nation’s nuclear utilities resulting
from the Government’s failure to fulfill contractual obliga-
tions to accept and dispose of radioactive waste under the
NWPA. Several decisions of this court address the broader
circumstances surrounding these cases. See, e.g., Dairy-
land Power Co-op v. United States, 645 F.3d 1363 (Fed.
Cir. 2011); Pac. Gas & Elec. v. United States, 536 F.3d
1282 (Fed. Cir. 2008); Yankee Atomic Elec. Co. v. United
States, 536 F.3d 1268 (Fed. Cir. 2008); Ind. Mich. Power
Co. v. United States, 422 F.3d 1369 (Fed. Cir. 2005).
    In 1983, like many nuclear utilities across the nation,
SMUD entered into a standard contract under which
SMUD paid tens of millions of dollars into the NWF in
exchange for the Department’s promise to begin ac-
ceptance and disposal of SNF and HLW beginning in
1998. J.A. 2455–88; see also Standard Contract, 10 C.F.R.
§ 961.11 (2010). On December 20, 1983, the Department
proposed a schedule for waste acceptance and removal
beginning by the statutorily-mandated date of January
31, 1998. See Pac. Gas, 536 F.3d at 1286.
     Instead of providing a firm rate for SNF and HLW ac-
ceptance and disposal, the standard contract required the
Department to issue a series of annual capacity reports
(ACRs) beginning no later than July 1, 1987. Id. at 1285.
These reports set forth projected annual receiving capaci-
ties for the Department’s facilities and annual acceptance
rankings. Id. In a later series of suits brought by affected
utilities, this court concluded that the 1987 Annual Ca-
pacity Report (1987 ACR) provided the best available pre-
4                      SACRAMENTO MUNICIPAL UTILITY    v. US



breach snapshot of the parties’ intended acceptance rate.
Id. at 1292; see also Yankee Atomic, 536 F.3d at 1274.
     Accordingly, the standard contract executed by SMUD
did not include a specific pickup schedule for its SNF and
HLW transfer. Rather, it provided that the utility would
submit delivery requests for the SNF/HLW that it wished
to deliver to the Department for a given year. J.A. 2465. If
the requests exceeded the Department’s capacity, poten-
tial acceptance slots would be allocated based on the date
fuel was discharged from the reactor—a scheme known as
“oldest fuel first” (OFF) ranking. Id. at 2468–69. Beyond
this, the standard contract included a provision prioritiz-
ing acceptance of fuel originating from decommissioned or
shutdown utilities, id. at 2469, as well as an “Exchanges”
provision giving utilities the option to exchange or swap
acceptance slots to adjust delivery schedules, albeit sub-
ject to approval by the Department. Id. at 2466–67.
    The Department’s inability to begin disposal services
became apparent many years before January 31, 1998. As
early as 1987, the Department began announcing delays
in the expected opening of its repository. Id. at 2821–22.
In a 1989 report to Congress, the Department announced
that the repository would not operate until “approximate-
ly 2010.” Id. at 2822 (quoting Dep’t of Energy, Report to
Congress by the Secretary of Energy on Reassessment of
the Civilian Radioactive Waste Management Program,
Nov. 29, 1989). In 2005, the Department announced
further delays in opening a repository, estimating a start
date of 2012, with more delay likely. Id.
    SMUD sued for costs incurred to mitigate from Janu-
ary 1, 1992 to December 31, 2003, and sued separately for
the period of January 1, 2004 to December 31, 2009.
                            II.
    SMUD operated the Rancho Seco nuclear power plant
throughout the 1980s until it was shut down in response
SACRAMENTO MUNICIPAL UTILITY   v. US                      5



to a voter referendum in 1989. See Sacramento Mun. Util.
Dist. v. United States, 70 Fed. Cl. 332, 339 (2006) (SMUD
I). At the time of its proposed decommissioning, SMUD
stored 493 SNF and HLW assemblies at Rancho Seco in
wet pool installations having an estimated annual operat-
ing cost of between $6–12 million. J.A. 2822–23.
     Knowing that the Department’s performance would be
many years late, SMUD decided to follow through with
construction of a dual-purpose, dry storage facility called
an Independent Spent Fuel Storage Installation (ISFSI).
Id. at 2823. Specifically, beginning in 1992, SMUD pur-
sued construction of an ISFSI for long term dry storage of
its spent fuel—one that would require fewer personnel
and carry a much lower estimated annual operating cost
of between $1.5–4.5 million. Id. at n.4. Between 1992 and
2001, SMUD encountered various regulatory and tech-
nical hurdles, causing it to reevaluate its storage strategy
many times. Id. at 2823. However, in view of the Depart-
ment’s then-announced, and seemingly inevitable, breach
SMUD decided to continue pursuing construction of an
ISFSI. Id. SMUD completed its ISFSI in 2001, transferred
all of its waste to dry storage by August of 2002, and shut
down its wet pool that year. SMUD I, 70 Fed. Cl. at 375.
SMUD incurred $78,558,212 in costs related to develop-
ment of its ISFSI from 1992–2003. J.A. 2824.

    In 1998, SMUD brought its first action against the
Department for breach of the standard contract, seeking
damages of $76,603,412 in mitigation costs to compensate
for constructing the ISFSI and storing SNF and HLW.
That action covered the period spanning January 1, 1992,
to December 31, 2003. Determining that the breach was a
substantial factor in SMUD’s decision to complete con-
struction of its ISFSI, the Court of Federal Claims award-
ed SMUD $39,796,234. Sacramento Mun. Util. Dist. v.
United States, 74 Fed. Cl. 727, 735 (2006). That award
included various offsets, among them a $4,146,360 offset
that SMUD realized in 2003 from decommissioning the
6                       SACRAMENTO MUNICIPAL UTILITY     v. US



wet pool and transferring all of its fuel to dry storage. See
SMUD I, 70 Fed. Cl. at 374–75 (explaining that SMUD
shut down systems and reduced its staff by 30 employees).
     SMUD disputed the wet pool offset on grounds that it
would have achieved a “fuel-out” date before 2003 in the
non-breach world, a fact that would preclude any wet pool
“savings.” Specifically, SMUD argued that if the Depart-
ment began accepting fuel by January 31, 1998, all of
Rancho Seco’s SNF and HLW would have been accepted
for disposal and transported off-site no later than 2006.
This assumed an acceptance rate of 3,000 metric tons of
uranium (MTUs) per year and OFF ranking. SMUD
further asserted that another utility in the queue may
have been willing to swap places with SMUD to enable all
of SMUD’s fuel to be removed prior to 2003. In this re-
gard, SMUD accepted that, if the Court of Federal Claims
were to conclude that SMUD would not have off-loaded all
its fuel before 2003, a deduction in its costs of $4.2 million
in wet pool offset for 2003 would be appropriate.
    The trial court rejected SMUD’s 2003 fuel-out date,
finding that “[t]o accept SMUD’s position, the court would
need to speculate about whether SMUD would have been
successful in trading SMUD’s acceptance priority with
another utility or convincing DOE to accept SMUD’s SNF
early.” Id. at 375. The trial court further explained, the
law simply did “not permit the court to do so.” Id. Thus,
the Court of Federal Claims reduced SMUD’s award for
the period of 1992–2003 by $4.2 million in wet pool offset,
in addition to various other offsets. For example, the trial
court granted the Department an offset for SMUD’s
internal expenses related to time and labor that 256
SMUD employees charged to the ISFSI project. SMUD, 74
Fed. Cl. at 735. The trial court also granted an offset to
the Department for costs arising from SMUD’s storage of
various nonfuel assembly components. Id. at 733.
SACRAMENTO MUNICIPAL UTILITY   v. US                       7



    On appeal, this court affirmed-in-part and reversed-
in-part. First, this court found that the trial court did not
use the required 1987 ACR rate, instructing the trial
court on remand to “apply the Standard Contract ac-
ceptance rate identified in [Pac. Gas, 536 F.3d at 1291–
92] to assess causation . . . in evaluating the Govern-
ment’s partial breach of contract as a substantial factor in
causing SMUD to pursue dual-purpose storage.” Sacra-
mento Mun. Util. Dist. v. United States, 293 F. App’x 766,
768, 771–72 (Fed. Cir. 2008). This court also found error
in the trial court’s damages calculation with respect to
certain offsets granted for labor and nonfuel component
storage, totaling $13.4 million. Id. at 771–74. This court
did not disturb the $4.2 million in wet pool offset.
    On remand, the Court of Federal Claims held an addi-
tional evidentiary hearing and recalculated SMUD’s
damages. Taking into account the correct acceptance rate,
and restoring certain offsets, the trial court arrived at an
award of $53,159,863 for 1992–2003. Sacramento Mun.
Util. Dist. v. United States, 91 Fed. Cl. 9, 18–19 (Fed. Cl.
2009). The Court of Federal Claims confirmed the $4.2
million offset for wet pool savings, explaining in its final
opinion and order of judgment “that [the wet pool offset]
ruling was not reversed on appeal.” Id. at 18.
    At this juncture, the Department sought to stay exe-
cution of judgment in SMUD I pending resolution of a
separate suit in which SMUD sought damages for the
period of 2004–2009. Id. Specifically, in 2009, SMUD filed
a second action for damages in accordance with precedent
dictating that a SNF plaintiff must seek recovery for post-
breach damages in successive suits that cover damages as
they are incurred over time. Ind. Mich., 422 F.3d at 1376–
78 (“[S]ubsequent claims . . . accrue . . . at the time such
damages are incurred.”); Yankee Atomic, 536 F.3d at 1281
(“[U]tilities cannot now collect damages not yet incurred
under the ongoing contract . . . . [T]he Government’s own
refusal to timely perform cannot serve as a basis for
8                          SACRAMENTO MUNICIPAL UTILITY   v. US



accelerating plaintiffs’ performance obligations. The
Yankees’ obligations under the contractual scheme have
not matured.” (citations omitted)).
    Initially, the Department argued that the trial court
should account for wet pool savings allegedly realized
from 2004 to 2008 in SMUD I. SMUD, 91 Fed. Cl. at 18.
And, at first, the Court of Federal Claims rejected this
request on grounds that the scope of SMUD I extended
only through December 31, 2003. Id. at 19 (“SMUD has
requested an unspecified amount of damages ‘from Janu-
ary 1, 2004 forward’ in a separate proceeding . . . . Accord-
ingly, the court has decided it is proper to account for any
2004–2008 SNF wet pool savings offset in that proceed-
ing.” (citations omitted)). But, the Court of Federal Claims
ultimately granted the Department’s request to stay
execution of judgment in SMUD I in order to determine
whether wet pool savings would apply to 2004–2009:
    The Government, however, legitimately is con-
    cerned that the amount of costs SMUD may seek
    in the next proceeding will not be sufficient to al-
    low the Government to recoup the amount of SNF
    wet pool savings realized from 2004–2008. There-
    fore, the court has decided that the interests of
    justice require a stay of the execution of this
    judgment, pending the court’s resolution of the
    damages to be asserted [in the second action].
Id. (citations omitted).
    In response, SMUD sought a writ of mandamus from
this court to compel the trial court to lift the stay and
allow for entry of the judgment for the period of 1992–
2003. In re Sacramento Mun. Util. Dist., 395 F. App’x 684,
685 (Fed. Cir. 2010). Because the stay would not last for a
protracted or indefinite amount of time, this court denied
SMUD’s mandamus petition, finding that the Court of
Federal Claims did not abuse its discretion. Id. at 688.
SACRAMENTO MUNICIPAL UTILITY    v. US                       9



                             III.
     SMUD’s second suit, concerning mitigation costs owed
for the period from January 1, 2004 to December 31, 2009,
proceeded to trial on October 24, 2011. Sacramento Mun.
Util. Dist. v. United States, 109 Fed. Cl. 660, 669 (2013)
(SMUD II). Relevant to this appeal, SMUD contended
that, in light of certain economic incentives, the standard
contract’s “Exchanges” provision would have been utilized
such that SMUD’s fuel would have been removed before
January 1, 2004 in the non-breach world.
     SMUD offered testimony from various Department of-
ficials and government experts explaining that exchanges
would readily have occurred. Id. at 671–72. For example,
SMUD’s economic expert, Mr. Frank Graves, confirmed
that using OFF ranking would have imposed an addition-
al $1.6 billion in storage costs on the nuclear power utility
industry that could have been avoided if exchanges were
utilized. Id. Mr. Graves noted that the utilities do not act
as competitors and, historically, have engaged in mutual-
ly beneficial exchanges of personnel, material, and even
contract rights based on collective self-interest. Id. at 671.
Moreover, since the Department stood to benefit from
these cost-saving exchanges, it would have been reasona-
ble to assume that the Department would approve them.
Id. Under Mr. Graves’ analysis, the last of Rancho Seco’s
SNF and HLW would have been removed in 1999. Id. Mr.
Graves further estimated that the exchange costs would
total $8.4 million—an amount dramatically less than the
$20 million in wet pool operating costs incurred during
the same period in the breach world. Id. at 673.
    In addition to these economic incentives, SMUD es-
tablished that fuel removal absent a breach would not
likely have proceeded under a strict OFF schedule. SMUD
offered testimony by experts and Department officials
explaining that the OFF schedule would have been both
inefficient and inconsistent with historical practices of
10                     SACRAMENTO MUNICIPAL UTILITY    v. US



shipping and managing spent fuel. Id. For example, Mr.
Graves testified that dozens of utilities would have had
OFF allocation rights in excess of their needs in the early
years of spent fuel removal. Id. at 671. And those utilities
would have been able to exchange allocation rights with-
out disrupting their own fuel storage needs. Id. To verify
these assumptions, Mr. Graves analyzed discharge and
capacity data, variations in spent fuel storage costs,
exercise of market power by utilities possessing early
acceptance allocations, relevant transaction costs, barri-
ers to trade, and factors introduced by greater-than-Class-
C waste. Id. at 672. Ultimately, Mr. Graves testified that
“Rancho Seco’s fuel would have been removed by 2003,
and in fact likely well before then, even under unduly
pessimistic assumptions about the non-breach world.” Id.
at 671–72. Mr. Graves’ analysis concluded that, based on
the acceptance rate of the 1987 ACR, within a few years
after the Department’s removal of SNF commenced in
1998, the Department’s total acceptance capacity would
have exceeded the total amount of must move fuel held by
other utilities. Id. These circumstances would have al-
lowed for a fuel-out date anywhere from 1999 to 2003,
depending on the inputs. Thus, absent evidence SMUD
would have been somehow prevented from exchanging a
2008 allocation for an earlier one, OFF scheduling and
projected 2008 fuel-out date did not reflect “a plausible
view of the non-breach world for SMUD[.]” Id.
    While the Department contested Mr. Graves’ testimo-
ny, it declined to take a position on what it considered the
proper model inputs or to offer an alternative model of the
non-breach world. Id. Rather, the Department argued
that the law of the case and collateral estoppel precluded
SMUD from claiming that its spent fuel would have been
removed earlier than 2008. The Department argued that
SMUD did not appeal the earlier ruling rejecting use of its
exchanges theory in SMUD I before the introduction of
Mr. Graves’ testimony in SMUD II. Id. (citing SMUD I, 70
SACRAMENTO MUNICIPAL UTILITY   v. US                     11



Fed. Cl. at 375 (rejecting the acceptance rate and possibil-
ity of exchange as too speculative)). Thus, the Department
sought to bar any fuel-out theory premised on accelerated
removal through the use of exchanges.
    SMUD responded that nothing barred the Court of
Federal Claims from determining a fuel-out date based on
what would have occurred in the non-breach world from
2004–2009. Id. at 674. Given its mandatory separation
from the 1992–2003 damages period, all issues regarding
the 2004–2009 period should have been preserved for
subsequent adjudication. Id. (citing SMUD, 91 Fed. Cl. at
19 (“SMUD has requested an unspecified amount of
damages ‘from January 1, 2004 forward’ in a separate
proceeding. Accordingly the court has decided it is proper
to account for any 2004–2008 SNF wet pool savings offset
in that proceeding.” (citations omitted))). Thus, the trial
court’s rejection of exchange evidence should only work to
offset damages through December 31, 2003. Id. at 674–75.
    While rejecting a proposed fuel-out date before 2003
as speculative, the trial court had yet to determine a fuel-
out date. Indeed, in SMUD I, the Court of Federal Claims
specifically declined to establish one, because any deter-
mination on that issue depended on whether SMUD could
have exchanged one or more of its 2004, 2005, or 2008
allocations. As such, the trial court expressly deferred
issues falling within the scope of this later time period to
SMUD II. Id. at 675 (citing SMUD, 91 Fed. Cl. at 18–19).
    Moreover, SMUD argued that applying collateral es-
toppel would be improper given an intervening change in
the law that altered the legal framework for evaluating
Mr. Graves’ exchange model. Id. (citing Yankee Atomic,
679 F.3d at 1359 (upholding application of an exchange
model); Dairyland, 645 F.3d at 1369–71 (affirming use of
an exchange model offered by the same Mr. Graves); Pac.
Gas, 536 F.3d at 1292 (establishing the 1987 ACR as the
acceptance rate and applying an exchange model)).
12                     SACRAMENTO MUNICIPAL UTILITY    v. US



    On collateral estoppel, the trial court decided that it
had already rejected SMUD’s argument with respect to
the use of “exchanges” in SMUD I. Specifically, that
“[SMUD] might have been able to convince another utility
in the queue to switch places to enable SMUD’s SNF to be
removed in 2003.” Id. at 676 (quoting SMUD I, 70 Fed. Cl.
at 375). The Court of Federal Claims noted that SMUD
did not appeal that ruling. Rather, it “chose to live with
this 2003 wet pool deduction.” Id. at 677.
    Moreover, the trial court concluded that SMUD pre-
sented an “exchanges” argument in SMUD II identical to
the one decided in SMUD I, i.e., whether SMUD could
have used exchanges to have its SNF removed earlier
than 2008, as estimated by the OFF schedule. Id. Thus,
although the two suits involved mutually exclusive time
periods for purposes of damages, the Court of Federal
Claims saw no significant change in the evidence or the
circumstances affecting SMUD’s proposed use of exchang-
es in SMUD II that would distinguish the period of 2004–
2009 from 1992–2003. Id. With respect to establishing a
2003 fuel-out date, the trial court concluded that the
additional proffer of Mr. Graves’ testimony in SMUD II
was at best cumulative to evidence asserted in SMUD I.
    The Court of Federal Claims also rejected SMUD’s
contention that issue preclusion cannot apply because of a
significant change in the legal atmosphere governing
exchange models. Id. at 679. In this regard, the trial court
distinguished Yankee Atomic, Dairyland, and Pacific Gas
as all limited to situations where this court merely af-
firmed the trial court’s fact findings based on the stand-
ard of review. Id. (citing Dairyland, 645 F.3d at 1370 (“We
find no error in [the trial court’s conclusion regarding
exchanges], as it appears to have been grounded in proper
weighing of the evidence.”); Yankee Atomic, 679 F.3d at
1359 (“The Government did not identify any record evi-
dence to support a finding that the trial court committed
clear error in adopting an exchanges model.”); Pac. Gas,
SACRAMENTO MUNICIPAL UTILITY   v. US                       13



668 F.3d at 1355 (“The record supports the trial court’s
award of damages [based on use of the exchanges model]
and this court discerns no error.”)). In sum, the trial court
concluded that none of these cases affected the legal
landscape on exchange models, which may at one time
have been considered speculative. See SMUD II, 109 Fed.
Cl. at 679. Accordingly, it imposed collateral estoppel.
    But, at the same time, the trial court acknowledged:
“Of course, in [SMUD I] no fuel-out date for SMUD was
established.” Id. Rather, by barring SMUD from litigating
an earlier fuel-out date based on an exchange theory, the
Court of Federal Claims determined that the fuel-out date
must be 2008. Id. The trial court emphasized:
    [T]he application of collateral estoppel is particu-
    larly important given the ongoing nature of the
    damage claims in the SNF cases. To date, the
    Government has been in breach of the Standard
    Contract for fourteen years. Barring some other
    resolution, the United States Court of Federal
    Claims faces decades of determining ongoing
    damages in six-year intervals. Therefore, these
    cases must be managed and adjudicated with fi-
    nality. . . . [Thus,] SMUD is precluded from reliti-
    gating whether SNF would have been removed
    from Rancho Seco earlier than under the OFF
    schedule, [i.e., 2008,] by exchanges or otherwise.
Id. at 679–80.
                            IV.
    In the non-breach world, SMUD would have contin-
ued to operate a wet pool until the Department removed
SMUD’s fuel. However, SMUD I established that SMUD
actually did not operate the wet pool during the period of
2004–2009, having transferred all its fuel to dry storage
in 2002. Thus, assuming a fuel-out date of 2008, the Court
of Federal Claims considered whether the Department
14                       SACRAMENTO MUNICIPAL UTILITY     v. US



was entitled to wet pool offset for costs SMUD saved from
2004 to 2008 by transferring all of its fuel to dry storage.
    In SMUD I, the Court of Federal Claims held that
“the Government, not SMUD, is responsible for operation
and maintenance costs associated with storage of SNF.”
SMUD I, 70 Fed. Cl. at 371. However, in SMUD II, the
Department sought a deduction not only for SMUD’s wet
pool savings of $4.2 million per year, but additionally for
costs associated with dry storage. These dry storage costs
contributed an additional $14.2 million to the Depart-
ment’s offset spanning 2004–2008. SMUD II, 109 Fed. Cl.
at 704–05. Specifically, the Department wanted to start
with an annual $4.2 million in savings, then add $50,000
to cover spare parts and other materials as well as $2.84
million for the transition to, and cost of, dry storage. Id. at
707. This resulted in SMUD’s achieving annual savings,
or avoided costs, of approximately $8 million per year, $38
million in total, to be deducted from its award of mitiga-
tion costs. The Department’s offset theory, as advanced in
SMUD II, imposed a “double deduction,” Appellant’s Br.
40, by combining SMUD’s wet and dry storage expenses.
    SMUD responded that, even if SMUD’s fuel would not
have been removed prior to 2004 (as SMUD still main-
tained), $4.2 million and not $8 million represented a
reasonable estimate of any avoided costs. SMUD argued
that the Department’s proposed $8 million annual offset
lacked evidentiary support and ran counter to analysis
supporting the original $4.2 million annual offset deter-
mined in SMUD I. See SMUD II, 109 Fed. Cl. at 704–05.

    The trial court agreed with the Department, reason-
ing that, at a minimum, SMUD’s claimed mitigation costs
must be reduced by $4.2 million for each year that SMUD
would have stored its own fuel (i.e., $20,981,800 for 2004,
2005, 2006, 2007 and 2008) because SMUD “chose to live
with this 2003 wet pool deduction.” Id. at 677, 703–04.
But, despite having previously concluded that the De-
SACRAMENTO MUNICIPAL UTILITY     v. US                   15



partment would bear the costs of storage, SMUD I, 70
Fed. Cl. at 371, the trial court revisited the $4.2 million
wet pool offset and concluded that SMUD incurred costs
associated with both wet storage and dry storage. SMUD
II, 109 Fed. Cl. at 706. This resulted in additional offset
for the Department totaling $34,987,913 for 2004 to 2008.
     Ultimately, the trial court concluded that SMUD was
entitled to $20,703,595 in mitigation costs resulting from
the Department’s partial breach for the period of 2004–
2009. Id. And the Department received the offset of
$34,987,913, which the trial court deducted from SMUD’s
award. However, instead of stopping at zero, the trial
court decided to carry over a negative value, -$14,284,318,
reducing SMUD’s award of $53,139,863 in SMUD I (for
1992–2003) by that amount. On March 18, 2013, the trial
court entered combined judgment for SMUD I and SMUD
II, awarding SMUD a net $38,845,39 for the period span-
ning January 1, 1992, to December 31, 2009. Id. at 708.
    SMUD timely appealed the combined judgment. This
court has jurisdiction under 28 U.S.C. § 1295(a)(3).
                            V.
    This court reviews the trial court’s application of col-
lateral estoppel without deference. See Dureiko v. United
States, 209 F.3d 1345, 1355 (Fed. Cir. 2000). This court
reviews the trial court’s choice of a damages theory for an
abuse of discretion and its factual findings concerning
damages for clear error. See Golden Blount, Inc. v. Robert
H. Peterson Co., 438 F.3d 1354, 1371 (Fed. Cir. 2006).
This court may reverse a damages award that rests upon
“an erroneous conclusion of law, clearly erroneous factual
findings, or a clear error of judgment.” Juicy Whip, Inc. v.
Orange Bang, Inc., 382 F.3d 1367, 1370 (Fed. Cir. 2004).
    At the outset, this court finds that the Court of Feder-
al Claims erred in applying the doctrine of collateral
estoppel to bar consideration of SMUD’s exchange theory.
16                      SACRAMENTO MUNICIPAL UTILITY     v. US



     A party seeking to invoke collateral estoppel must es-
tablish four preconditions: (1) identity of the issues in a
prior proceeding; (2) actual litigation of those issues; (3)
necessity of the prior determination to the resulting
judgment; and (4) full and fair opportunities to litigate
issues for the party defending against preclusion. See Levi
Strauss & Co. v. Abercrombie & Fitch Trading Co., 719
F.3d 1367, 1371 (Fed. Cir. 2013); see also Stephen Slesing-
er, Inc. v. Disney Enters., Inc., 702 F.3d 640, 646 (Fed. Cir.
2012). And even if all these conditions are met, applica-
tion of collateral estoppel “must be confined to situations
where the matter raised in the second suit is identical in
all respects with that decided in the first proceeding and
where the controlling facts and applicable legal rules
remain unchanged.” Comm’r of Internal Revenue v. Sun-
nen, 333 U.S. 591, 599–600 (1948). Specifically, it should
not be applied to foreclose full consideration of an issue
“when there ha[s] been a significant change in decisional
law between the first case and the second.” Bingaman v.
Dep’t of Treasury, 127 F.3d 1431, 1438 (Fed. Cir. 1997).
     In light of this court’s intervening adoption of the
1987 ACR rate as the required acceptance rate in SNF
cases, Pac. Gas, 536 F.3d at 1292, and its acceptance of
damages theories relying on the use of exchange models,
e.g., Dairyland, 645 F.3d at 1370, the trial court should
have allowed the parties to litigate the fuel-out date in
SMUD II. Moreover, the trial court should have deter-
mined a specific fuel-out date in SMUD II, particularly
given its decision in SMUD I to reserve that precise issue
for later adjudication. SMUD, 91 Fed. Cl. at 18–19.
    With respect to the acceptance rate deemed “specula-
tive” by the trial court in SMUD I, this court’s holding in
Pacific Gas represented a significant development in the
law. In fact, this development in the law directly contrib-
uted to reversal of the trial court’s damages calculation in
SMUD I on appeal. SMUD, 293 F. App’x at 771–72.
SACRAMENTO MUNICIPAL UTILITY   v. US                    17



     Moreover, the Court of Federal Claims appears to
have relegated this court’s holding in Dairyland to merely
affirming the trial court’s factual findings based on the
standard of review. See SMUD II, 109 Fed. Cl. at 679.
But, in Dairyland, this court substantially addressed the
viability of exchange models to prove what would have
happened in the non-breach world in SNF cases. 645 F.3d
at 1370. Specifically, in Dairyland, this court approved a
damages theory relying on evidence and expert testimony
that a market would have existed in the non-breach world
for exchanging acceptance slots to adjust delivery sched-
ules, and that such exchanges were foreseeable in view of
the standard contract’s “Exchanges” provision. Id.
    Turning to the doctrine of collateral estoppel, this
court disagrees that the issues between SMUD I and
SMUD II were so clearly identical. Under SMUD’s fuel-
out theory in SMUD I, SMUD argued that it could have
unloaded all of its fuel prior to 2003. SMUD I, 70 Fed. Cl.
at 375. SMUD focused on the period before 2003 because
the trial court properly limited the scope of SMUD I to
damages and offset available between 1992 and 2003. In
SMUD II, SMUD argued that it would have achieved a
fuel-out date before 2004 and, in any event, before 2008.
This second contention relied on analysis of likely behav-
ior by utilities, keyed to determine the amount of excess
capacity in the system in every year through 2008—i.e.,
comparing excess capacity to amounts of SNF that SMUD
would need to exchange. J.A. 1836–37. Therefore, whether
SMUD would have been out of fuel prior to 2003 is not
identical to the question of whether SMUD would have
been out of fuel in 2003, 2004, 2005, 2006, 2007, or 2008.
Also, in contrast to SMUD I, where the trial court rejected
the exchange model as “speculative” based on SMUD’s
estimated acceptance rate, SMUD’s later exchange model
establishing a fuel-out date prior to 2008 distinctly ap-
plied the 1987 ACR rate dictated by Pacific Gas.
18                       SACRAMENTO MUNICIPAL UTILITY      v. US



     This court also disagrees that the parties actually liti-
gated a fuel-out date in SMUD I. First, the trial court
expressly declined to determine a fuel-out date in SMUD
I, preserving that issue for SMUD II. SMUD, 91 Fed. Cl.
at 18–19. Second, while SMUD ultimately decided to
accept the $4.2 million offset for 2003 in SMUD I, that
acquiescence does not make the fuel-out itself date actual-
ly litigated with respect to the period of 2004–2009. This
court’s mandate to apply the 1987 ACR displaced the trial
court’s underlying determination that the exchange
theory requires improper speculation. Therefore, the trial
court should have permitted litigation of these issues and
determined a specific fuel-out date in SMUD II.
                              VI.
    The trial court’s determination of a $4.2 million an-
nual wet pool offset, as upheld by this court on appeal,
became the law of the case. Thus, it should not have been
supplanted by the Department’s inconsistent offset theory
in SMUD II.
    The law of the case doctrine “posits that when a court
decides upon a rule of law, that decision should continue
to govern the same issues in subsequent stages in the
same case.” Christianson v. Colt Indus. Operating Corp.,
486 U.S. 800, 815–816 (1988) (citations omitted). Also, the
mandate rule, encompassed by the broader law of the case
doctrine, furthermore dictates that “an inferior court has
no power or authority to deviate from the mandate issued
by an appellate court.” Briggs v. Pa. R. Co., 334 U.S. 304,
306 (1948). Thus, once an issue has been decided by an
appellate court, that question may not be reconsidered at
any subsequent stage of the litigation, save on appeal. See
In re Sanford Fork & Tool Co., 160 U.S. 247, 255 (1895)
(“Whatever was before [the Supreme Court], and disposed
of by its decree, is considered as finally settled . . . . If the
circuit court mistakes or misconstrues the decree of this
SACRAMENTO MUNICIPAL UTILITY   v. US                     19



court, and does not give full effect to the mandate, its
action may be controlled . . . upon a new appeal.”).
    Under the mandate rule, a court below must adhere to
issues settled in a prior appeal unless one of three “excep-
tional circumstances” exist: (1) evidence presented later is
substantially different from the original evidence; (2)
controlling authority has made a contrary and applicable
decision of the law; or (3) the prior decision was clearly
erroneous “and would work a manifest injustice.” Gindes
v. United States, 740 F.2d 947, 950 (Fed. Cir. 1984) (cita-
tions omitted). The mandate rule, however, is limited to
issues “actually decided, either explicitly or by necessary
implication” in the prior litigation. See Toro Co. v. White
Consol. Indus., Inc., 383 F.3d 1326, 1335 (Fed. Cir. 2004).
    The Court of Federal Claims erred in abandoning the
prior determination of wet pool offset as $4.2 million:
   [T]he Government, not SMUD, is responsible for
   operation and maintenance of costs associated
   with storage of SNF, until DOE accepts the last of
   SMUD’s SNF. Accordingly, the court has deter-
   mined not to offset SMUD’s damage award by the
   costs incurred to operate and maintain the ISFSI
   in 2003.
SMUD I, 70 Fed. Cl. at 371.
    On remand, following this court’s reversal-in-part on
the 1987 ACR rate, the trial court recalculated SMUD’s
damages and arrived at an award of $53,159,863 for the
period of 1992–2003. SMUD, 91 Fed. Cl. at 18–19. It also
confirmed the $4.2 million offset for wet pool savings. Id.
at 18. Thus, by necessary implication, this court’s man-
date affirmed the trial court’s decision to exclude costs
incurred to operate and maintain the ISFSI. Thus, a later
offset theory adding back ISFSI storage costs to the base
of $4.2 million—a theory the trial court correctly rejected
20                      SACRAMENTO MUNICIPAL UTILITY     v. US



in SMUD I—should have been foreclosed. Through SMUD
I, the $4.2 million calculation became the law of the case.
    Only true exceptions to the mandate rule warrant de-
viation from an appellate court’s determination on issues
within, or subsumed by, its mandate. Throughout SMUD
I the parties litigated the wet pool offset and further offset
based on ISFSI transition and storage. As between SMUD
I and SMUD II, the facts did not differ substantially and
no intervening authority contradicts the outcome. Indeed,
the Department never challenged the $4.2 million offset.
SMUD, 91 Fed. Cl. at 18–19 (“[T]he Government did not
argue entitlement to this offset at trial, on appeal, nor did
the Federal Circuit’s remand direct the court to do so.”).
Thus, no exception to the mandate rule applies that would
permit reassessment of this prior determination.
     Finally, the trial court erred in combining the awards
in the two cases for purposes of reducing SMUD’s damag-
es from 1992–2003 with a negative value determined with
respect to SMUD’s damages-minus-offset for the period of
2004–2009. Here, the Court of Federal Claims applied the
$34,987,913 offset against the damages proven in SMUD
II, i.e., $20,703,595, resulting in a negative dollar amount,
i.e., -$14,284,388. And, instead of merely awarding SMUD
zero dollars in SMUD II, it erroneously carried over the
negative amount to reduce damages awarded on remand
in SMUD I, i.e., $53,139,863, for 1992–2003.
     According to the procedure set forth in Indiana Mich-
igan Power, 422 F.3d at 1376–78, SMUD litigated damag-
es in successive suits, as it incurred mitigation costs over
time. This court dictated this litigation structure to limit
a SNF plaintiff’s ability to collect future damages. By that
same token, this precedent also limits the Department’s
ability to obtain future offsets. Id. at 1377; Yankee Atom-
ic, 536 F.3d at 1281. By staying execution of judgment in
SMUD I pending an offset determination in SMUD II, the
SACRAMENTO MUNICIPAL UTILITY   v. US                      21



trial court constructively awarded the Department future
offsets in a manner prohibited by this court’s precedent.
      Because the trial court erred in SMUD II by barring
SMUD’s exchange theory and by declining to determine a
specific fuel-out date, this court vacates the amount
calculated as the Department’s offset from 2004–2008,
i.e., $34,987,913, and remands that set of issues for fur-
ther consideration consistent with this opinion. As for
arriving at negative mitigation costs, this outcome vio-
lates the general principle that a breaching party’s offset
cannot exceed a non-breaching party’s damages. In other
words, SMUD cannot avoid more damages than it claims.
Thus, even if the trial court had not erred with respect to
the offset determination, the award should have stopped
at zero for the period covered by SMUD II. See generally
Myers v. Hurley Motor Co., 273 U.S. 18, 27 (1927) (“[T]he
amount allowed defendant shall not exceed the amount of
plaintiff’s claim.”). Thus, the trial court erred by awarding
any resulting difference to the Department.
     As for combining a negative value for a later damages
period with an earlier final judgment covering a separate
and distinct damages period, the $53,139,863 awarded for
mitigation costs incurred by SMUD from 1992 to 2003
should have remained untouched. In the end, the trial
court’s decision to combine the judgments in SMUD I and
SMUD II netted the Department $14.3 million in this
series of cases. At best, this result violates the settled
principle that a breaching party should never be placed in
a better position as a result of its breach. Cf. LaSalle
Talman Bank, F.S.B. v. United States, 317 F.3d 1363,
1371 (Fed. Cir. 2003). At worst, the decision to stay execu-
tion of a prior award pending a determination of any
offset available in the future creates a perverse incentive
for the Department to stall pending SNF actions with the
hope of eviscerating past claims with future offsets.
22                      SACRAMENTO MUNICIPAL UTILITY    v. US



    As the trial court correctly noted, the Department has
been in continuous breach of the standard contract for
decades. And, barring some other resolution, the Court of
Federal Claims likely “faces decades of determining
ongoing damages.” SMUD II, 109 Fed. Cl. at 679–80.
However, this alone does not compel a resolution such as
the one reversed and remanded today. This court appreci-
ates the trial court’s imperative to adjudicate this class of
cases with finality, but this must be taken on balance
with the burden imposed on SNF plaintiffs, like SMUD,
who have prevailed at trial, appeal, and remand, but have
yet to recover any damages. SMUD has done so while
paying out over $110 million for building, operating, and
maintaining an ISFSI. Appellant’s Br. 2.
    Accordingly, this court further reinstates the award to
SMUD of $53,139,863 for costs incurred to mitigate from
January 1, 1992 to December 31, 2003, and directs the
trial court to execute that prior judgment immediately.
     REVERSED, VACATED, REMANDED, and
                REINSTATED
