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Commonwealth Edison Co. v. United States

Citation: 32 ELR 20322
No. No. 00-5069, 271 F.3d 1327/(Fed. Cir., 11/20/2001)

The court affirms the dismissal of a domestic utility company's allegation that the Energy Policy Act of 1992 (EPACT) unconstitutionally imposed monetary assessments on domestic utilities for the remediation of environmentally contaminated U.S. uranium processing facilities. Beginning in the 1960s, the utility company purchased uranium enrichment services from the United States under various agreements that charged the utility for services according to an established pricing policy and capped the maximum unit charge. In the 1980s, the U.S. government realized the extent to which its uranium processing facilities were contaminated, so in 1992, Congress enacted EPACT, which established a fund to accumulate the money necessary to remediate the facilities. Due to the contamination's discovery date, however, the government's past uranium enrichment contracts did not account for the problem. EPACT, therefore, provided that the government would pay 68% of the remediation costs and the remaining 32% of the costs would be paid by those domestic utilities that benefitted from uranium processing at government facilities. The utility company brought suit claiming that the special assessment breached the government's contracts with the company by retroactively increasing the cost of the uranium enrichment services and constituted an impermissible taking of those contracts in violation of the Fifth Amendment.

The court first holds that the lower court properly dismissed the company's claims. While a taking may occur when a specific fund of money is involved, the mere imposition of an obligation to pay money, as here, does not give rise to a claim under the Takings Clause. The court also holds that the imposition of the special assessment was a lawful exercise of Congress' taxing power and was not designed to retroactively increase the price of the government's earlier contracts with the company. The court next holds that the government did not make an unmistakable promise in the contracts that precluded it from later imposing an assessment. The court further holds that the retroactivity of the special assessment did not violate the company's due process rights. This case does not involve the imposition of liability on companies having no responsibility for creating the expectation of a future benefit; rather, it involves a congressional determination to impose liability in companies that received a benefit, the production of which contributed to a societal problem. Moreover, the company could not reasonably have been expected to be free from regulatory exaction. The company operates in a highly regulated industry, was aware of the hazardous nature of the materials, and could reasonably have anticipated the possibility of the assessments.

Counsel for Plaintiff
Robert A. Mangrum
Winston & Strawn
1400 L St. NW, Washington DC 20005
(202) 371-5700

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

Dyk, J. Joined by Michel, Lourie, Clevenger, Schall, Bryson, Gajarsa, and Linn, JJ.; Mayer, J., dissenting. Joined by Newman and Rader, JJ. *

* Circuit Judge Prost, who entered on duty on October 3, 2001, has not participated in the disposition of this case.