Summit Texas Clean Energy, LLC v. United States


In the United States Court of Federal Claims No. 17-1138C (Filed: August 20, 2018) ************************* SUMMIT POWER GROUP, LLC, and Contracts; declaratory CCM TCEP, LLC, judgment; 28 U.S.C. § 1491(a)(1) (2012); Plaintiffs, guaranty agreement; debt cancellation; v. cooperative agreement. THE UNITED STATES, Defendant. ************************* Stanley R. Soya, Washington, DC, with whom was Ellen M. Lynch for plaintiffs. Adam E. Lyons, United States Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, for defendant. OPINION BRUGGINK, Judge. The United States, acting through the Department of Energy’s National Energy Technology Laboratory (“DOE”), entered into Cooperative Agreement DE-FE0002650 with Summit Texas Clean Energy, LLC (“STCE”) on January 29, 2010. Plaintiffs, Summit Power Group, LLC and CCM TCEP, LLC (“SPG” and “CCM,” collectively “the guarantors”) guaranteed $13.8 million that DOE paid to STCE under the cooperative agreement. After DOE terminated the cooperative agreement, plaintiffs sued, seeking a declaration that they have no obligation to pay DOE the guaranteed sum because either DOE has not met the conditions stated in their payment agreements or DOE materially breached the implied duty of good faith and fair dealing, precluding DOE from terminating for STCE’s failure to reach financial close. Pending is defendant’s motion to dismiss plaintiffs’ amended complaint for lack of subject-matter jurisdiction or failure to state a claim. The motion is fully briefed and we held oral argument on August 9, 2018. Because the remedy that plaintiffs seek is purely declaratory, lacking any claim for actual, presently due money damages from the United States, we grant defendant’s motion to dismiss for lack of subject-matter jurisdiction. BACKGROUND The United States, acting through DOE, established the Clean Coal Power Initiative in 2002 with the objective of promoting investment in efficient, environmentally-friendly coal power projects.1 In furtherance of this initiative, DOE entered into Cooperative Agreement DE-FE0002650 with STCE on January 29, 2010. By constructing and operating the Texas Clean Energy Project (“TCEP”), STCE hoped to integrate a commercial electric power plant with carbon dioxide capture and sequestration. DOE agreed to provide financial support as well as oversight and collaboration in the process of designing and constructing the TCEP. The project would proceed in four phases: project definition, design, construction, and demonstration. STCE and DOE were to share all costs incurred on an “‘as-expended’, dollar-for-dollar basis” by applying the cost share ratios in the cooperative agreement. Def.’s Mot. to Dismiss App. 14. DOE was not obligated to provide funding beyond its cost share and had sole discretion to decide the availability of funds, whether STCE had made substantial progress, and whether continuing the agreement was advantageous to DOE. At the conclusion of each phase, the cooperative agreement obligated STCE to submit to DOE a Decision Point Application that demonstrated progress, provided a budget for the next phase, and described next steps in the project. If DOE did not approve the Decision Point Application, DOE’s 1 The Energy Policy Act of 2005, Pub. L. No. 109–58 § 401–405, 119 Stat. 749–753 (2005) (codified at 42 U.S.C. § 15961–15965 (2012)), and ...

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