     In the United States Court of Federal Claims
                                         No. 03-2625C
                                     (Filed: May 11, 2017)


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                                             *          Spent Nuclear Fuel; Fuel
ENTERGY GULF STATES, INC., and               *          Characterization Costs; Motion
ENTERGY GULF STATES                          *          for Reconsideration; Rule 59.
LOUISIANA, L.L.C.,                           *
                                             *
               Plaintiffs,                   *
                                             *
                      v.                     *
                                             *
THE UNITED STATES,                           *
                                             *
               Defendant.                    *
                                             *
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        Alexander D. Tomaszczuk, Pillsbury Winthrop Shaw Pittman LLP, 1650 Tysons
Boulevard, McLean, VA 22102, for Plaintiffs. Jay E. Silberg, and Clare Cavaliero Pincoski,
Pillsbury Winthrop Shaw Pittman LLP, 1200 17th Street NW, Washington, D.C. 20036, Of
Counsel. L. Jager Smith, Jr., Jager Smith, LLC, 1340 Echelon Parkway, Jackson, MS 39213, Of
Counsel. Sam O. Morris, IV, Entergy Services, Inc., 1340 Echelon Parkway, Jackson, MS 39213,
Of Counsel.

        Chad A. Readler, Robert E. Kirschman, Jr., Allison Kidd-Miller, and Eric P. Bruskin, U.S.
Department of Justice, Civil Division, Commercial Litigation Branch, P.O. Box 480, Ben Franklin
Station, Washington, D.C. 20044, for Defendant. Jane K. Taylor, U.S. Department of Energy,
Office of General Counsel, 1000 Independence Avenue, SW, Washington, DC 20585, Of Counsel.


   ________________________________________________________________________
                            OPINION AND ORDER
   ________________________________________________________________________


WILLIAMS, Judge.
       This matter comes before the Court on Plaintiffs’ motion for reconsideration of the Court’s
decision denying Plaintiffs’ claims for fuel characterization costs. Entergy Gulf States, Inc. v.
United States, 129 Fed. Cl. 135, 139 (2016) (“Entergy III”). At issue is the proper interpretation
of System Fuels, Inc. v. United States, 818 F.3d 1302 (Fed. Cir. 2016) (“System Fuels”). Plaintiffs
assert that this Court erred in finding that the Federal Circuit’s decision in System Fuels was
precedent for denying damages for fuel characterization. Defendant argues that System Fuels did
preclude an award of fuel characterization costs because the Federal Circuit only awarded cask
loading costs, not fuel characterization costs.
        Although Defendant is correct that the Federal Circuit in System Fuels only expressly
awarded “cask loading costs,” an in-depth review of the underlying trial court’s decisions in
System Fuels, Inc. v. United States, 120 Fed. Cl. 737, 748-50 (2015) (“ANO II”), rev’d and
remanded, 818 F.3d at 1307, demonstrates that both the parties, via stipulation, and the trial court,
in entering judgment on remand, interpreted System Fuels to require the award of all of the
plaintiffs’ claimed fuel characterization costs as a component of cask loading costs. While this
was not expressly stated in either the parties’ stipulation or the trial court’s judgment, the quantum
of damages awarded on remand and the trial court’s findings in its underlying decisions bear this
out. As such, this Court grants reconsideration and amends Plaintiffs’ judgment to award fuel
characterization costs.

                                            Background
        This Court previously entered opinions on April 14, 2016, Entergy Gulf States, Inc. v.
United States, 125 Fed. Cl. 678 (2016) (“Entergy I”), September 21, 2016, Entergy Gulf States,
Inc. v. United States, 128 Fed. Cl. 335 (2016) (“Entergy II”), and November 18, 2016, Entergy III.
The Court awarded Plaintiffs total damages of $47,539,368 for site modifications, payroll and
materials loaders, additional security, and cask loading costs at River Bend Nuclear Generating
Station (“River Bend”). Entergy II, 128 Fed. Cl. at 336; Entergy I, 125 Fed. Cl. at 718. At issue
here is Entergy III, in which this Court determined that Plaintiffs Entergy Gulf States, Inc. and
Entergy Gulf States Louisiana, L.L.C. were not entitled to recover $562,020 in claimed fuel
characterization costs.1
        Fuel characterization is “the process of documenting the physical and nuclear
characteristics of spent fuel assemblies.” Dairyland Power Coop. v. United States, 128 Fed. Cl.
499, 501 n.2 (2016) (internal citation and quotation marks omitted). Fuel characterization tests
individual fuel assemblies to determine whether the fuel assembly is damaged or is leaking
radioactive materials. Plaintiffs performed fuel characterization because the Holtec cask system’s
Certificate of Compliance, a Nuclear Regulatory Commission license governing the parameters,
design, and configurations for that cask loading system, required Plaintiffs to load only fuel
assemblies that were intact and did not pose a risk of leaking. Tr. 108, 150-52.
        Fuel sipping is one form of fuel characterization, which is used to test whether a fuel
assembly has a defect or breach. Id. at 1623. According to Jerrell Campbell, the senior project
manager for dry fuel storage at River Bend, to perform fuel sipping, Plaintiffs installed
Westinghouse equipment in the spent fuel pool, placed a spent fuel assembly into a device they
call a “can,” and ran water through the fuel assembly in the “can.” Id. at 151. If there was a crack
in the fuel assembly’s cladding and gas was emitted, there would be a failure in the fuel assembly.
Id. at 1623-24. Plaintiffs performed this fuel characterization process underwater in the spent fuel

1
        The parties previously stipulated to the amount of fuel characterization costs. See Joint
Stip. ¶ 6j.
                                                  2
pool during the claim period to determine the integrity of fuel assemblies in the spent fuel pool
and to ensure that these assemblies were intact, met Holtec’s Certificate of Compliance, and were
suitable for loading into a Holtec Multi-Purpose Canister. Id. at 151-52, 1624-25; PX 64 at A-1.
       The disputed fuel characterization costs were captured in Operations & Maintenance Work
Order N09271, entitled “Vacuum Sipping.” Tr. 150. Mr. Campbell testified that River Bend
would not have performed the work covered by Work Order N09271 if it had not needed additional
spent fuel storage space. Id. at 152. In essence, fuel characterization is an early step in the
sequence of events that collectively comprise cask loading activities.

                                            Discussion
        A court may grant a motion for reconsideration when “there has been an intervening change
in the controlling law, newly discovered evidence, or a need to correct clear factual or legal error
or prevent manifest injustice.” Young v. United States, 94 Fed. Cl. 671, 674 (2010).
         This Court’s denial of fuel characterization costs was based on its reading of the Federal
Circuit’s opinion in System Fuels, where the Federal Circuit awarded “all of the costs of loading .
. . storage casks” because storage casks may not be used for transportation. 818 F.3d at 1306. The
appellate court stated that the expenses incurred for loading the storage casks were “expenses
incurred entirely for storage due to the government’s breach,” and that because the storage casks
cannot be used for transportation, “System Fuels will be required, if and when the government
begins to comply . . . , to unload the spent nuclear fuel from these storage casks and reload it into
suitable transportation casks provided by the government.” Id. at 1307.
        In System Fuels, the Federal Circuit did not separately analyze fuel characterization costs.2
The dispute underlying the motion for reconsideration is whether the Federal Circuit’s award of
“cask loading costs” encompassed any, some, or all of the claimed fuel characterization costs. This
dispute requires this Court to review the trial court’s ruling underlying System Fuels, the decision
in ANO II. In originally reviewing the ANO II trial court’s decision, this Court focused on the
distinction between fuel characterization costs attributable to high-burn-up fuel and those
attributable to non-high-burn-up fuel, and found:
       [i]n System Fuels, the Federal Circuit affirmed the trial court’s award of cask
       loading costs including fuel characterization costs, but the trial court had only
       awarded costs for characterizing high-burn-up fuel. System Fuels, Inc. v. United
       States, 120 Fed. Cl. 737, 748-50 (2015) (“ANO II”), rev’d and remanded, 818 F.3d
       at 1307. The ANO II trial court was precise in segregating the processes of loading
       high-burn-up fuel as opposed to non-high-burn-up fuel and found that damages for
       characterizing non-high-burn-up fuel were not warranted because the process of
       loading non-high-burn-up fuel into Holtec storage casks was similar to the process
       of loading that type of fuel into [Department of Energy (“DOE”)] transportation
       casks. Because Plaintiffs did not store high-burn-up fuel during the damages


2
        Indeed the term “fuel characterization costs” does not appear in the Federal Circuit’s
System Fuels opinion. See Dairyland Power Coop. v. United States, 128 Fed. Cl. 499, 503 n.3
(2016).
                                                 3
       period, Plaintiffs have not established entitlement to damages for fuel
       characterization. See ANO II, 120 Fed. Cl. at 748-50.
Entergy III, 129 Fed. Cl. at 136. Upon reconsideration and a more probing examination of the
ANO II trial court’s opinions pre- and post-remand, this Court finds that it interpreted the
parameters of the Federal Circuit’s award of cask loading costs in System Fuels differently than
the ANO II trial court and the parties on remand.
        The ANO II court divided the plaintiffs’ claim for characterization and loading costs into
three categories: characterization and loading of high-burn-up fuel, the loading of Holtec storage
casks and their subsequent storage on ANO’s Independent Spent Fuel Storage Installation
(“ISFSI”), and the loading of non-high-burn-up spent fuel. ANO II, 120 Fed. Cl. at 751. The
ANO II court concluded that the plaintiffs’ costs for characterization and loading of the high-burn-
up fuel were allowable, because the high-burn-up fuel would have to be re-characterized, but that
costs for the non-high-burn-up fuel were not recoverable due to the similarities in loading non-
high-burn-up fuel into Holtec casks and DOE transportation casks. Id. at 750-51.
       In ANO II, the trial court reduced the award of fuel characterization costs, employing the
following computational analysis:
       [p]utting obstruction aside, as the factual record now stands, the court could
       calculate disallowed characterization and loading damages of mitigation by: (1)
       starting with the overall amount claimed by System Fuels and disputed by the
       government ($6,475,497); (2) removing one-third of the costs to account for high-
       burn-up spent fuel ($2,158,499), leaving $4,316,998; (3) removing one-half of that
       remaining amount ($2,158,499) to account for the cost of loading canisters
       containing non-high-burn-up spent fuel into Holtec HI-STORM storage modules
       and moving those modules to the [ISFSI] at ANO; and (4) removing one-tenth of
       that remaining amount to account for the fact that DOE-supplied transportation
       casks would be bolted rather than welded shut ($215,850), leaving $1,942,649 as
       the amount of imputed, incurred characterization and loading costs that should be
       disallowed. With those adjustments, ANO’s claim for characterization and loading
       costs would be reduced from $6,475,497 to $4,532,848, and the government would
       have succeeded in eliminating $1,942,649 from System Fuels’ claimed damages.
Id. at 751 (second emphasis added).
        When ANO II was remanded by the Federal Circuit after the System Fuels decision, the
parties stipulated that the trial court should enter judgment in the amount that it had previously
disallowed, $1,942,649, with no deductions for any type of fuel characterization costs. See Joint
Status Report and Stip., ANO II, 120 Fed. Cl. 737. The final judgment the trial court entered in
ANO II includes the exact amount of the judgment requested by the parties, and states: “[t]he court
accepts and adopts the stipulation as a basis for entry of an amended final judgment in this action.”
See Order for Am. Final J., ANO II, 120 Fed. Cl. 737.
       The ANO II trial court had denied fuel characterization costs to the extent that those claims
were tied to non-high-burn-up fuel, but the Federal Circuit reversed this disallowance of fuel
characterization costs on appeal. On remand, as reflected in the final judgment entered by the

                                                 4
ANO II trial court, all fuel characterization costs were allowed. As such, System Fuels is precedent
for a full award of fuel characterization costs whether such costs were incurred with respect to
high-burn-up fuel or non-high-burn-up fuel.
         The Government has lodged three arguments against granting reconsideration. First, the
Government posits that because the Federal Circuit’s opinion in System Fuels and the post-remand
stipulation in ANO II referred only to cask loading costs and did not specifically mention fuel
characterization costs, fuel characterization costs were not encompassed in the appellate court’s
ruling or the parties’ stipulation and the trial court’s judgment on remand.3 The procedural history
outlined above squarely refutes this argument. The Federal Circuit reversed the disallowance of
all fuel characterization costs as they were a component of cask loading costs, and, on remand in
ANO II, the trial court awarded the full amount of cask loading costs - - including fuel
characterization costs - - that it had disallowed. Although the stipulation in ANO II did not recite
the components of the award, it included the exact figure the ANO II court had previously
disallowed and encompassed all fuel characterization costs - - both high-burn-up and non-high-
burn-up fuel. See ANO II, 120 Fed. Cl. at 751-52. As such, System Fuels is precedent for
awarding fuel characterization costs as a component of cask loading costs.
       Second, the Government contends that Plaintiffs must establish that the disputed fuel
characterization costs would not have been incurred in a plausible non-breach world. In the
Government’s view, Plaintiffs failed to meet this burden because their expert did not model fuel
characterization costs. However, the Federal Circuit in System Fuels held that a plaintiff need not
model the non-breach world for loading storage casks. Indeed, the Federal Circuit dismissed the
lack of a model comparing costs of loading hypothetical DOE transportation casks to costs of
loading Holtec storage casks as “irrelevant.” 818 F.3d at 1307 (stating “the costs of loading future
transportation casks, or the difference between the costs of loading these storage casks and loading
transportation casks, are irrelevant to System Fuels’ entitlement to the expenses it incurred for
loading these storage casks”) (emphasis in original). This analysis by the Federal Circuit in System
Fuels governs this case, as the claimed fuel characterization costs here were also incurred for




3
       Defendant argues:
       Entergy’s primary assertion of legal error resulting in manifest injustice is that this
       Court erred when it rejected River Bend’s fuel characterization claim because the
       trial court in ANO II supposedly awarded costs for characterizing non-high-burn-
       up fuel on remand following the System Fuels decision. Pl. Mot. at 4-6. This
       remand judgment, Entergy argues, demonstrates that the Federal Circuit’s decision
       in System Fuels dictates the recoverability of fuel characterization costs, even for
       non-high-burn-up fuel. Id. Yet, the Order For Amended Final Judgment in ANO
       II, attached as Exhibit 1 to Entergy’s motion, does not award the utility its fuel
       characterization costs, but instead discusses only an award of “$1,942,649, which
       is the portion of cask loading costs that was disputed by the parties at trial[.]” Pl.
       Mot. Exhibit 1 (emphasis added).
Def.’s Resp. 3-4.
                                                 5
loading Holtec storage casks, precluding this Court from imposing an expert opinion/modeling
requirement the appellate court deemed unnecessary.4
        Third, the Government raises a causation argument, asserting that “the decision in System
Fuels does not require the Court to award [Plaintiffs’] fuel characterization costs absent a showing
that such costs were caused by DOE’s breach of the Standard Contract, would not have been
incurred in a plausible non-breach world, and will be incurred again in the future.” Def.’s Resp.
3. Plaintiffs have made the requisite causation showing. This Court has previously determined
that Plaintiffs would not have had to store their spent fuel on site in dry storage had DOE
performed. Entergy I, 125 Fed. Cl. at 717. The Court has also specifically found that, had DOE
performed, “Plaintiffs would not have been required to store spent fuel on an ISFSI in Holtec
canisters.” Id.; see, e.g., System Fuels, 818 F.3d at 1306; Tr. 152, 1102; PX 960 at 13.
       Nor is Vermont Yankee precedent for denying fuel characterization costs here. As this
Court observed in Entergy III:
       The Federal Circuit’s denial of fuel characterization costs in Vermont Yankee was
       predicated on the plaintiffs’ failure to meet their burden of proving that fuel
       characterization would be required again upon DOE’s performance. . . . The
       Vermont Yankee Court relied upon the plaintiffs’ own belief that DOE would
       accept the earlier characterized fuel without re-characterization. Id. Based on that
       record, the Vermont Yankee Court concluded that it was “possible that another
       review of the spent fuel condition [would] be required” if DOE performs. Id.
       (internal citation and quotation marks omitted). As such, Vermont Yankee’s denial
       of fuel characterization costs, based upon the plaintiffs’ arguments and the record
       in that case, does not mandate a blanket denial of such costs here.
Entergy III, 129 Fed. Cl. at 139.
         In this case, there is no evidence suggesting that Plaintiffs believe (unlike the plaintiffs in
Vermont Yankee) that DOE would have accepted or will accept the previously performed
characterization for loading fuel into DOE transportation casks. Rather, here, as in System Fuels,
the utility “will be required, if and when the government begins to comply . . . to unload the spent
nuclear fuel from these storage casks and reload it into suitable transportation casks provided by
the government.” Sys. Fuels, 818 F.3d at 1307. Although Plaintiffs here are not storing high-
burn-up fuel, the record demonstrates that fuel characterization will likely need to be redone in
reloading transportation casks if and when DOE performs. Plaintiffs here have established, as did
the plaintiffs in System Fuels, that DOE will likely not accept the fuel as it is currently stored,



4
       In any event, Defendant prevented the construct of such a model here as the Government
provided no information in discovery or at trial as to the non-breach world with respect to DOE
transportation casks or the Certificate of Compliance that DOE was required to provide for such
casks under the Standard Contract. See PX 960 at 7 (“[D]efendant admits that it does not know
the requirements of the certificates of compliance . . . .”). The Government also admitted that “a
DOE-supplied cask’s certificate of compliance may have contained different selection criteria than
the Holtec system.” Def.’s Post-Trial Br. 36.
                                                   6
requiring Plaintiffs to re-characterize and repackage the fuel prior to performance. The Court finds
that the disputed $562,020 in fuel characterization costs were caused by DOE’s breach.

                                           Conclusion
       Plaintiffs’ motion for reconsideration is GRANTED.
        The Clerk is directed to enter an amended judgment granting Plaintiffs additional damages
in the amount of $562,020 for Plaintiffs’ incurred fuel characterization costs.


                                                     s/Mary Ellen Coster Williams
                                                     MARY ELLEN COSTER WILLIAMS
                                                     Judge




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