United States District Court, N.D. Alabama, Northeastern Division
MEMORANDUM OPINION AND ORDER
C. BURKE, UNITED STATES DISTRICT JUDGE.
Tennessee Valley Authority (“TVA”) has filed a
Motion to Dismiss (doc. 22). Plaintiff Nuclear Development
LLC (“ND”) has filed a response (doc. 28), and
TVA has filed a reply (doc. 31). The Court also held a
hearing on May 13, 2019. Therefore, the Motion to Dismiss is
ready for review. For the reasons stated below, the Court
denies the Motion to Dismiss.
Bellefonte Nuclear Plant Site is an unfinished nuclear power
plant site located in Jackson County, Alabama. (Doc. 1, p.
2). TVA currently owns the Bellefonte Nuclear Plant Site and
has custody and control of it. (Id.). The Bellefonte
Nuclear Plant Site is currently in deferred plant status
pursuant to regulations promulgated by the Nuclear Regulatory
Commission (“NRC”). (Id. at 3). In 2016,
TVA declared the Bellefonte Nuclear Plant Site to be surplus
property. (Id.). On November 14, 2016, TVA entered
into an agreement for the sale of most of the Bellefonte
Nuclear Plant Site, including the infrastructure and other
assets located thereon, to ND. (Id.). The Court will
refer to the portion of the Bellefonte Nuclear Plant Site
subject to the agreement as “Bellefonte.” The
purchase and sales agreement (otherwise referred to as the
“Agreement” or the “Contract”) is
attached as an exhibit to ND's complaint.
1 of the Agreement states, in part:
At the Closing (as defined in Section 5 below), TVA shall
sell, transfer, convey, assign and deliver title and
possession to [ND], and [ND] shall purchase and pay for, all
of TVA's right, title and interest in each of the
following . . .
(e) To the extent feasible and permitted by applicable law,
all permits, licenses or authorizations issued or required by
Governmental Authorities or third parties in connection with
the operation of the Site and listed on Schedule
1(e) (the “Permits”);
provided, however, that with regard to the
transfer of the two permits issued to TVA by the Nuclear
Regulatory Commission (“NRC”) to construct two
B&W pressurized water nuclear reactors, this Section
1(e) shall not require TVA to certify that [ND] is
qualified and fit to complete construction of and operate
those reactors and, if [ND] informs TVA that it does not seek
transfer of these NRC permits, TVA shall take whatever action
is necessary to terminate those permits. Further, if, an
applicable Governmental Authority has not accepted or
otherwise allowed the transfer of a permit, license or
authorization pursuant to this Section 1(e) by
Closing, TVA's obligations under this Section
1(e) shall cease.
(Doc. 1, p. 4). Listed in Schedule 1(e) to the Agreement are
certain facility permits, including the NRC Permits, CPPR-122
(Unit 1) and CPPR-123 (Unit 2) (the “NRC
Permits”), both issued on December 24, 1974, and listed
as “[r]einstated, currently deferred.” (Doc. 1-2,
p. 47; Do c. 23-2).
6(a)(v) addresses conditions to closing, stating that
[t]he obligations of TVA and [ND] to consummate the
transactions contemplated by this Agreement shall be subject
to the fulfillment, at or before Closing, of each of the
following conditions . . .
(v) There shall not be in effect at the Closing any law,
statute, rule, regulation, permit certificate or binding
order, decree or decision of any Governmental Authority (as
defined in Section 9(a)(ii) below) restraining, enjoining or
otherwise prohibiting or making illegal the consummation of
the transactions contemplated by this Agreement . . . .
(Doc. 1-1, p. 7).
7(a) of the Contract addresses TVA's representations and
warranties. In particular, Section 7(a)(vii) states
TVA has full right, power and authority to execute and
deliver this Agreement and to consummate the purchase and
sale transactions provided for herein, and no authorization,
consent or approval or other order or action of or filing
with any Governmental Authority is required for the execution
and delivery by the TVA of this Agreement or the consummation
by the TVA of the transactions contemplated hereby.
(Doc. 1-1, p. 9).
8(a) addresses ND's representations and warranties.
Section 8(a)(vi) states that, to induce TVA to enter into the
Agreement, ND represents and warrants to TVA, among other
things, that “[n]o authorization, consent or approval
or other order or action of or filing with any Governmental
Authority is required for the execution and delivery by [ND]
of this Agreement or the consummation by [ND] of the
transactions contemplated hereby.” (Id. at
10). Additionally, Section 15(c)(i) states that ND,
“either alone or together with its representatives and
agents, has knowledge and experience in transactions of this
type and is therefore capable of evaluating the risks and
merits of acquiring [Bellefonte].” (Id. at
11(a) addresses the termination of the Agreement. Section
11(a)(iv) states that the Agreement may be terminated
“[b]y either Party, upon written notice to the other
Party, if . . . the closing conditions set forth in Section
6(a)(i) or 6(a)(v) [stating that nothing makes the
consummation of the transactions illegal] are unfulfilled as
of the Closing Date . . . .” (Id. at 13).
Section 11(b) states, “Upon any termination of
expiration or [sic] this Agreement, TVA shall be entitled to
retain the Down Payment and any Compensated Costs paid by
Buyer on or before termination or expiration, unless
termination is under Section 11(a)(ii) or Section 11(a)(iv),
in which event TVA shall return the Down Payment and any
Compensated Costs paid by Buyer to Buyer within 30 days by
check or electronically as directed by Buyer.”
execution of the Agreement, ND paid TVA $22, 200, 000.00 as a
20% down payment toward the purchase price of 111 million,
with the $88, 800, 000.00 balance to be paid at closing.
(Doc. 1, p. 4; Doc. 1-1, p. 7). In addition, ND also paid TVA
an additional $750, 000 upon execution of the contract to
compensate TVA for certain sales and administrative costs.
(Id.). Pursuant to the Agreement, ND has paid TVA
$875, 000 every three months from the date of the Agreement
through November 30, 2018, for TVA's continued
maintenance of Bellefonte. (Doc. 1, p. 4).
Agreement originally provided for a November 14, 2018,
closing date. (Id.; Doc. 1-1, p. 6). According to
ND, it requested an extension of the closing date to May 14,
2019, “in order to complete certain activities for an
orderly closing.” (Doc. 1, p. 5). TVA did not agree to
this request. (Id.). ND alleges that on November 8,
2018, TVA raised, for the first time, a potential obstacle to
closing. (Id.). Specifically, TVA advised ND that it
would not, or could not, consummate the sale of Bellefonte
without approval from the NRC for the transfer of the NRC
Permits to ND. (Id. at 6). The parties agreed, in
the First Amendment to the Agreement, to an extension of the