IN RE: Westinghouse Electric Corp. Uranium Contracts Litigations

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JUDInIas Do
MUL TICS rion	SIs baTloy
BEFORE THE JUDICIAL PANEL =D N
ON OE
MULTIDISTRICT LITIGATION N Cg 975: TRICIA p te,
IN RE WESTINGHOUSE ELECTRIC CORP. ) [nooo so EBLE Ti paAkoURANIUM CONTRACTS LITIGATION ) : hel
OPINION AND ORDER
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDWARD
WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER ¥*,
JOSEPH S. LORD, III, STANLEY A. WEIGEL, AND
ANDREW A. CAFFREY, JUDGES OF THE PANEL
PER CURIAM
Westinghouse Electric Corp. is the sole
defendant bv, thirteen federal actions in as many	1
districts Yana by a number of its utility	2
customers. Each of these actions, to a large
extent,	involves an alleged contractual obligation
on Westinghouse's part for the present or future
delivery of uranium to fuel nuclear power plants
operated by the plaintiff-utilities or planned
for operation in the future.
* Judge Becker recused himself and took no part
in the consideration or decison of this matter.
Y See Schedule A following this opinion for a listing
of the actions involved and the districts
in which they are pending.
2/ An additional action brought by another of
Westindghouse's utility customers is presently pending
in Pennsylvania state court at Pittsburgh,
although no federal action is now before
the court in the Western District of Pennsylvania.

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These actions were spawned by a notice
sent by Westinghouse to its uranium customers
on September 8, 1975, in which Westinghouse stated
that full performance of any contractual obligations
which it may have had for the supply of uranium
had become "commercially impracticable" by reason of
unforeseen developments resulting from the worldwide
energy crisis and that Westinghouse was accordingly
excused from such performance by reason of §2-615
of the Uniform Commercial Code.
The September 8, 1975 notice further
stated that Westinghouse had established a program
pursuant to §2-615(b) of the Uniform Commercial Code
to allocate uranium in its inventory or on order
fairly and equitably among its customers. Under
the allocation plan, each eustomer would have
received slightly less than nineteen percent
of its anticipated uranium needs as those needs
were described in the aldocation plan.
On October 30, 1975, Westinghouse
filed a complaint styled as one in the nature of
interpleader in the Western District of Pennsylvania
for the purpose of securing resolution of what
it saw as the conflicting claims of the various
utility-plaintiffs to the limited quantities

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of uranium which it had in inventory or on order
3/
from its suppliers. On November 6, 1975,
Westinghouse's interpleader action was dismissed
by Chief Judge Herbert P. Sorg who concluded
that the requisite adversity of claims necessary
to sustain jurisdiction under 28 U.S.C. §1335
4/
was absent.
This matter is before the Panel on
Westinghouse's motion to transfer all actions
to the Western District of Pennsylvania for
coordinated or consolidated pretrial proceedings
pursuant to 28 U.S.C. S407. pt responding	5
parties, with one exception, oppose the motion.
3/ Two of the actions presently before the Panel,
Long Island Ljghting Company v. Westinghouse
Electric Corporation, E.D.N.Y., Civil Action
No. 75 Civ. 1878 and Northeast Utilities Service
Company, et al. v. Westinghouse Electric
Corporation, D.Conn, Civil Action No. H 75-373,
had not vet been instituted at the time
Westinghouse filed its interpleader action.
Accordingly, plaintiffs in those actions were not
4 named as adverse claimants by Westinghouse.
4/ Westinghouse has argued that Judge Sorg's dismissal
of its interpleader action was predicated, in large
measure, on the utilities' representation that
they would not oppose a motion by Westinghouse
to transfer all actions to a single district
under 28 U.S.C. §1407. Although it appears that
several of the utilities present during the pertinent
hearing did indeed state such lack of opposition,
at least one of the utilities was reluctant to make
that concession without time for further reflection.
In any event, the decision we reach herein is based
on our resqQlution of the merits of the transfer
request and not on any princip es of estoppel	applied against the utility-plaintiffs.
5/ Union Electric Company favors the request for
coordinated or consolidated pretrial proceedings ;
but suggests a transferee forum other than the
Western District of Pennsylvania.

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In the alternative, respondents suggest that in
the event the Panel does transfer these actions,
a district other than the Western District of
Pennsylvania should be selected as the transferee
forum. The most frequently mentioned alternative
transferee courts are the Eastern District of
Tennessee, the Southern District of Florida,
the District of South Carolina or the Eastern
District of Virginia. In addition, if any transfer
is ordered, two of the respondents have requested
that we exercise our powers under the proviso of
sub-section (8 of Section 1407 by separating
certain "claims" in their actions and remanding
&/
them to their respective transferor courts.
We find that these actions involve
common questions of fact and that their transfer
under Section 1407 to the Eastern District of Virginia
will best serve the convenience of the parties and
witnesses and promote the just and efficient conduct
of the litigation. Because we believe that the trans-
feree judge is in the best position to determine
&/ Respondent Florida Power & Light Company has
asked the Panel to separate the "claims"
in its action relating to irradiated fuel
and contract termination date and remand them
to the Southern District of Florida, while
respondent Tennessee Valley Authority has asked
us to separate Counts I, II and III of its complaint
relating to ostensibly unique claims arising from
TVA's status as a federal agency and remand them
to the Eastern District of Tennessee.

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the relationship between the "claims" that
respondents TVA and Florida Power & Light
Company seek to have separated and remanded
and the remainder of the litigation, we deny
their requests forusto exercise our powers under
74
Section 1407 (a).
The arguments in opposition to transfer
rest heavily on an asserted distinction between
~ 7 ‘See In re Midwest Milk Monopolization Litigation,
386 F. Supp. 1401, 1403 (J.P.M.L. 1975), where
the Panel made the following observation with
respect to a request for separation and remand:
"Although we are sensitive to the
arguments advanced by plaintiff,
we believe that they should properly be
addressed to the transferee judge.
He is in the best position to determine
whether Milk, Inc.'s claims are susceptible
to immediate remand or whether they are
inextricably related to Keystone's counter-
claim and the litigation pending in the
Western District of Missouri. See, e.d.,
In re Four Seasons Securities Litigation,
361 F. Supp. 636, 638 (Jud. Pan. Mult. Lit.
1973). Should the transferee judge deem
an immediate remand of Milk, Inc.'s claims
appropriate, procedures are available whereby
this may be accomplished with a minimum
of delay. [See Rule 11, R.P.J.P.M.L.,
65 F.R.D. 253, 260-63 (1975)]."

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the seeming legal commonality of the defense of
commercial impracticability under §2-615 of the
Uniform Commercial Code and the separate factual
inquiries necessary to sustain that defense in each
action. Since each contract was negotiated at
a different time by different individuals, repond-
~~ ents maintain,	a determination of whether	performance
has been rendered commercially impracticable by
the occurrence of intervening circumstances that
were not within the contemplation of the parties
at the time of contracting would entail an examination
of the different intervening factors as compared with
each separate party's contemplation of them at the
time of contracting. Hence, they insist, the factual
commonality between their actions is purely illusory.
Moreover, respondents argue, the contracts in question
differ in their essential terms. Some, they note,
were for the supply of uranium only while others
included enrichment contract administration, fabrica-
tion contracts, delivery of completed fuel assemblies
and/or the supply and servicing of an entire nuclear
steam supply system.
Although respondents' arguments have
a certain attractiveness, they fail, in our view,
to appreciate that there are some very significant
common questions of fact among these actions.

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For example, a determination of the commercial
impracticability of the present and future perform-
ance of Westinghouse's contractual obligations for
the supply of uranium depends, in part, on the
present and foreseeable supply of uranium on
the open market and its cost. And even assuming
that a large part of the §2-615 defenses rests
on the separate contemplation of the individual
parties negotiating each of the contracts,
it is nonetheless clear that common factual questions
will be raised concerning the effect of any alleged
unforeseen intervening circumstances on the price
and supply of uranium. Thus, while we recognize
that these actions involve some individual questions
of fact pertaining to each utility's contractual
relationship with Westinghouse, we are persuaded that
sufficient commonality of factual issues exists to warrant
transfer and that the most just and efficient conduct
of these actions can best be achieved through central-
ized management by a single judge. Specifically,
Section 1407 proceedings will prevent duplication
of discovery, eliminate the possibility	of colliding
pretrial rulings by courts of coordinate jurisdiction,
and avoid potentially conflicting preliminary injunctive

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demands on Westinghouse with respect to its delivery
of uranium.
Moreover, under the guidance of the
transferee judge, a pretrial program can be
develdped that would insure that the needs
of the respective parties for any unique discovery
or individual judicial attention can be accommo-
dated concurrently with the common pretrial matters.
See In re Republic National-Realty Equities Secur-
ities Litigation, 382 F. Supp. 1403, 1405-06
(F.P.M.L. 1974). Such a program will streamline
the entire litigation and thereby benefit all
parties, the witnesses and the judiciary.
We turn now to the selection of a trans-
feree district for this litigation. At the outset,
we note our reluctance to transfer these actions
to the Western District of Pennsylvania, movant's
preference, since no related federal action is
presently pending there. See In re Air Crash
Disaster Near Papeete, Tahiti, on July 22, 1973,
397 F. Supp. 886,887 (J.P.M.L. 1975). Although
several other districts were suggested in the briefs
submitted to the Panel, on balance, we believe
that the Eastern District of Virginia is the most
appropriate transferee forum. Indeed, this district

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was ‘apparently preferred by the greatest number of
utilities during oral argument before the Panel
and was also Westinghouse's second choice.
Furthermore, the record reveals that Judge Robert R.
Merhige, Jr., to whom the Virginia action is
assigned, has had an opportunity to gain a
familiarity with the complicated issues involved
here, which will enable him to supervise this
litigation toward its most just and expeditious
termination. See In re Griseofulvin Antitrust
Litigation, 395 F. Supp. 1402, 1403 (J.P.M.L. 1975).
IT IS THEREFORE ORDERED that the actions listed
on the following Schedule A and pending in districts
other than the Eastern District of Virginia be, and
the same hereby are, transferred to the Eastern
District of Virginia and, with the consent of
that court, assigned to the Honorable Robert R.
Merhige, Jr. for coordinated or consolidated
pretrial proceedings pursuant to 28 U.S.C. §1407
with the action pending in that district and listed
on Schedule A,

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SCHEDULE A DOCKET NO. 235
DISTRICT OF CONNECTICUT
Northeast Utilities Service Co.,
et al. v. Westinghouse Electric Civil Action
corp. No. H-75£373
SOUTHERN DISTRICT OF NEW YORK
Consolidated Edison Company of New York Civil Action
v. Westinghouse Electric Corp. No. 75Cv 5503-CHT
EASTERN DISTRICT OF NEW YORK
Long Island Lighting Co. Vv. Civil Action
Westinghouse Electric Corp. No. 75C1878
DISTRICT OF SOUTH CAROLINA
South Carolina Electric & Gas Co. Civil Action
v. Westinghouse Electric Corp. No. 75-1863
SOUTHERN DISTRICT OF FLORIDA
Florida Power & Light Co. v. Civil Action
Westinghouse Electric Corp. No. 75-2319
NORTHERN DISTRICT OF ALABAMA
Alabama Power Co. v. Westinghouse Civil Action
Electric Corp. No. 75-P1892sS
EASTERN DISTRICT OF VIRGINIA
Virginia Electric & Power Co. Vv. Civil Action :
Westinghouse Electric Corp. No. 75-0514-R
EASTERN DISTRICT OF TENNESSEE
Tennessee Valley Authority v. Civil Action
Westinghouse Electric Corp. No. 3-75-2298
NORTHERN DISTRICT OF TEXAS
Texas Utilities Services, Inc. v. Civil Action
Westinghouse Electric Corp. No. 3275-1241C
SOUTHERN DISTRICT OF TEXAS
Houston Lighting & Power Co. Vv. Civil Action
Westinghouse Electric Corp. No. 75-H-1729

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EASTERN DISTRICT OF MISSOURI
Union Electric Co. v. Westinghouse Civil Action
Electric Corp. No. 75-893C(3)
DISTRICT OF KANSAS
Kansas Gas & Electric Co., et al. Civil Action
v. Westinghouse Electric Corp. No. 75-250-C6
EASTERN DISTRICT OF WISCONSIN
Wisconsin Electric Power Co., et al. Civil Action
v. Westinghouse Electric Corp. No. 75-C-571