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Yankee Atomic Elec. Co. v. United States

Citation: 27 ELR 21260
No. 96-5021, -5025, 112 F.3d 1569/(Fed. Cir., 05/06/1997)

The court upholds the U.S. government's imposition, under the Energy Policy Act of 1992, of a special assessment on domestic utilities to help fund the cleanup of governmental facilities that provided uranium enrichment services to the assessed utilities. The court first holds that the provisions of the Energy Policy Act that impose the special assessment constitute a sovereign act. The court concludes that the government enacted the legislation for the purpose of solving the problem of decontaminating and decommissioning uranium enrichment facilities—that is, for the benefit of the public. The court notes that the Act's scope is not directed at those domestic utilities that had previously entered into contracts with the government for uranium enrichment services; rather, the key is who ultimately benefited from the government's services. The Act's reach, therefore, makes clear that Congress was not focused on a retroactive increase in the price of prior government contracts. Congress' main purpose was to spread the costs of a problem that it realized only after the contracts had been performed. Any impact its chosen approach may have had on those utilities with which the government had prior contracts is merely incidental to the accomplishment of a broader governmental objective. The court notes that the Claims Court's opinion is apparently mistaken insofar as it concludes that the special assessment reaches only those utility companies that had previously contracted with the government. The court also notes that the broad reach of the Energy Policy Act distinguishes this case from two cases on which the Claims Court relied. Those cases involved situations where the congressional act made clear that its purpose was, at least in part, to abrogate past public contracts.

The court next considers whether the government has nevertheless surrendered the right to exercise its sovereign power to tax in this instance. The court holds that the "unmistakability" doctrine—a canon of construction that allows the government to make agreements that bind future Congresses only if those contracts contain an unmistakable promise—applies in this case. If the company were to prevail in its suit for money damages, the result would effectively block the exercise of the government's sovereign power to tax, because the government would have to refund the entire amount assessed. The court then holds that the contracts between the company and the government did not include an unmistakable promise that precluded the government from later imposing an assessment on all domestic utilities that used the government's uranium enrichment services. None of the contracts expressly states that the company will be immune from any future assessments the government makes on the industry as a whole. Nor do the contracts' fixed-price terms constitute an unmistakable promise. This language is directed at the prices charged for providing enriched uranium and not to any decontamination or decommissioning costs that may subsequently arise. The court holds that the Claims Court erred to the extent that it implied an unmistakable promise from legislative acts concerning price-setting, because a specific promise implied from general legislative acts is not an unmistakable one. In a footnote, the court notes that this conclusion resolves the company's takings claim as well. Because the contracts did not contain an unmistakable promise against a future assessment, the company had no vested property right that was subsequently taken by the assessment.

Finally, the court holds that the company was not exempt from the assessment by virtue of the fact that it had ceased operations eight months before enactment of the Energy Policy Act. Because the company purchased uranium enrichment services from the government, both directly and indirectly, it falls within the Act's scope.

A dissenting judge would hold that an illegal exaction occurred and that the company is entitled to repayment under the Fifth Amendment.

Counsel for Plaintiff
Jerry Stouck
Spriggs & Hollingsworth
1350 I St. NW, 9th Fl., Washington DC 20005
(202) 898-5800

Counsel for Defendant
Douglas Letter
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before MAYER, LOURIE, and CLEVENGER, Circuit Judges.