The decline of the Court of Federal Claims in Nebraska Public Power District v. United States, 590 F.3d 1357 (Fed. Cir. 2010).

• Author: Thies, Daniel

The Tucker Act assigns to the Court of Federal Claims (CFC) jurisdiction over claims for money damages against the federal government. (1) As a result, the CFC traditionally had exclusive jurisdiction to hear contract claims against the government seeking more than $10,000. (2) The Supreme Court began eroding that exclusivity, however, in its 1988 decision Bowen v. Massachusetts. (3) The Court in Bowen authorized the district courts to hear any claim against the government for monetary relief so long as the pleadings characterized the claim as seeking "declaratory or injunctive relief" rather than "money damages." (4) Consequently, any plaintiff seeking past due sums from the government may avoid the CFC's jurisdiction by casting his claim as one for an injunction ordering the government to pay, rather than as one for damages. (5) Two plaintiffs with substantively identical claims may thus end up in different courts, merely because the form of their pleadings differs. Bowen has received significant criticism for its unnecessary formalism, which diminishes the CFC's exclusive jurisdiction. (6) Consequently, some lower courts have construed it narrowly, (7) but the Supreme Court has not overturned it.

Recently, the Federal Circuit again addressed the extent of the CFC's jurisdiction in Nebraska Public Power District v. United States (NPPD H). (8) Rather than continuing to limit the reach of Bowen, however, the court once more elevated form over substance to open a new front in the assault on the jurisdiction of the CFC. The court's decision allows courts other than the CFC to interpret contractual provisions whenever the construction of a statute influences the outcome of the contractual issues. Consequently, NPPD II enhances the ability of plaintiffs to forum shop while further diminishing the exclusive jurisdiction of the CFC.

The dispute in NPPD II arose out of the unique structure of the Nuclear Waste Policy Act of 1982 (NWPA), (9) which provides for the development of a repository to store the nation's spent nuclear fuel. (10) To that end, the NWPA established a series of deadlines for the Department of Energy (DOE) to complete intermediate steps toward the construction of a repository. (11) Congress did not, however, mandate a final deadline for the opening of the repository. Instead, it required the DOE to sign a standard contract with all utilities operating a nuclear power plant. (12) The NWPA only specified a final deadline for the program within the directions about the terms of contract, requiring that the standard contract provide for the removal of spent nuclear fuel "beginning not later than January 31, 1998" (13) in return for the utilities' obligation to pay fees into the Nuclear Waste Fund. (14) Following a period of notice and comment rulemaking, the DOE promulgated a standard contract with the required provisions, (15) signed the contract with seventy-six nuclear utilities, (16) and began to implement the statutory program.

But all did not go as planned. Complex environmental regulations, fierce litigation from communities near the proposed repository sites, and congressional apathy slowed progress to a crawl. (17) By the mid-1990s, the DOE had given up hope of meeting the January 31, 1998 deadline. (18) In an attempt to mitigate its potential liability to the utilities for breach of contract, the DOE issued an interpretation of the NWPA concluding that it had no statutory or contractual obligation to accept nuclear fuel so long as the repository was not in existence. (19) Facing the prospect of receiving nothing for the billions of dollars they had paid to the fund, (20) several utilities immediately challenged the DOE's interpretation in the D.C. Circuit (21) under the NWPA's jurisdictional provision, which provides for expedited review of the DOE's actions directly in the courts of appeals. (22)

The litigation resulted in two significant victories for the utilities. First, the D.C. Circuit ruled in Indiana Michigan Power Co. v. Department of Energy that the NWPA imposed on the DOE an unconditional obligation to accept spent nuclear fuel by January 31, 1998. (23) The D.C. Circuit then enforced Indiana Michigan in Northern States Power Co. v. U.S. Department of Energy by issuing a writ of mandamus ordering the DOE "to proceed with contractual remedies in a manner consistent with NWPA's command that it undertake an unconditional obligation." (24) More specifically, the D.C. Circuit ordered the DOE not to invoke the standard contract's Unavoidable Delays clause, (25) which absolved a party of paying damages for breaches arising "out of causes beyond the control and without the fault or negligence of the party failing to perform." (26)

Seventy-one utilities, including NPPD, subsequently filed separate damage claims for breach of the standard contract in the CFC. (27) The D.C. Circuit's mandamus order in Northern States initially removed the Unavoidable Delays defense and forced DOE to admit liability. (28) Litigation over the amount of damages has continued since 1998. (29) During pretrial oral argument in Nebraska Public Power District v. United States (NPPD I), however, CFC Judge Francis Allegra questioned the validity of the D.C. Circuit's mandamus order in Northern States. (30) After additional briefing, he issued an opinion concluding that the D.C. Circuit's writ of mandamus was void and allowing the DOE for the first time to invoke the Unavoidable Delays defense. (31)

The court's decision to alter the course of the litigation after eight years rested on two grounds. First, the court held that the NWPA's jurisdictional grant to the courts of appeals did not extend to disputes about the standard contract, (32) particularly those requiring interpretation of contractual provisions--an activity solely within the jurisdiction of the CFC. (33) Second, even if the D.C. Circuit did have jurisdiction, neither the NWPA nor the Administrative Procedure Act (APA) provided a waiver of sovereign immunity allowing a suit against the government to proceed in the courts of appeals. (34)

The Federal Circuit accepted an interlocutory appeal, (35) decided to hear the case en banc, (36) and reversed in an 11-1 decision. (37) Writing for the majority, Judge Bryson rejected both grounds for the trial court's decision. (38) First, the court rejected the contention that the NWPA's jurisdictional grant did not extend to disputes about the standard contract. (39) Section 119 of the NWPA states that the courts of appeals shall have original jurisdiction to review "any final decision or action of [the DOE] under [Subtitle A of Title I]" (40)--the subtitle regulating the development of a repository. The provisions relevant to the dispute in Northern States--those dealing with the formation and content of the standard contract--are in Section 302 of Title III, not Subtitle A of Title I. (41) Nonetheless, the court cited legislative history to show that the contractual provisions were located outside Subtitle A of Title I only because of "pure happenstance." (42) To "correct" this mistake, the court invoked a recent case concluding that any matters in Title III "which relate to the creation of repositories" would be included in the jurisdictional grant under Subtitle A of Title I, as Congress surely intended them to be. (43) Here, these related matters included the formation of the standard contract, for Section 111(b) stated that a purpose of Subtitle A of Title I is "to establish a Nuclear Waste Fund" (44) and the contractual provisions in Section 302 "fill[] in the details" for the administration of the fund. (45) The court thus concluded that all of Section 302, including the January 31, 1998 deadline, had a...