## Facts

- AmerGen Energy Co., LLC purchased and operated three nuclear power plants in 1999–2000 and assumed substantial future obligations related to decommissioning and related activities.
- In a TEFRA partnership readjustment case involving partnership items for tax years 2001–2003, AmerGen disputed the federal income tax treatment of assumed “decommissioning liabilities.”
- AmerGen used “decommissioning liabilities” broadly, including spent fuel storage/management and certain site restoration costs beyond the federal regulator’s decommissioning definition.
- AmerGen sought to prove that the assumed liabilities were fixed and reasonably determinable at purchase (i.e., not contingent) and relevant to tax treatment under provisions including the economic performance rule.
- During discovery, AmerGen served requests for admission and other discovery aimed at private letter rulings (PLRs) issued to the plant sellers and to AmerGen concerning assumed decommissioning liabilities.
- AmerGen moved to compel the government to answer the requests for admission and, in its reply, also sought compelled responses to interrogatories and document requests tied to the PLRs.

## Issues

1. Whether the government could be compelled to provide admissions and discovery responses concerning PLRs issued to the sellers and AmerGen about assumed decommissioning liabilities.
2. Whether requests for admission could be used to force the government to admit AmerGen’s characterizations of the legal significance of those PLRs, including that the liabilities were fixed and reasonably determinable.

## Decision

- The Court of Federal Claims denied AmerGen’s motion to compel.
- The court also denied the additional request, raised in the reply brief, to compel answers to certain interrogatories and a document production request.

## Legal Principles

- In TEFRA partnership-item readjustment litigation, discovery is limited to matters relevant to the partnership-level determinations at issue, and the court has broad discretion to manage and restrict discovery.
- Requests for admission are not a proper vehicle to compel an opposing party to concede contested legal conclusions or to accept another party’s legal interpretation of materials such as PLRs.
- PLRs, particularly those issued to other taxpayers, do not control the court’s resolution of the statutory questions in dispute and may have limited probative value for compelling admissions about liability status under federal tax law.

## Conclusion

The Court of Federal Claims refused to compel admissions and related discovery about private letter rulings in a TEFRA partnership dispute over assumed nuclear decommissioning liabilities, holding that AmerGen’s requests improperly sought concessions about the legal effect of the rulings and did not justify compelled responses.


AmerGen Energy Co. v. United States, 94 Fed. Cl. 413 (2010)