## Facts

- Commonwealth Edison (ComEd) operated the Zion, Illinois nuclear plant and, as required, maintained a decommissioning trust funded largely through approximately $700 million in customer rate charges.
- Illinois law required that any unspent decommissioning funds ultimately be returned to ComEd’s customers.
- ComEd shut down the plant in 1998 and later transferred the plant and trust assets to its parent, Exelon; Bank of New York Mellon became trustee, and Exelon was the trust’s beneficiary.
- Exelon then transferred the plant and trust assets to ZionSolutions LLC under an agreement providing that (a) any unspent trust funds after decommissioning would be returned to Exelon (for eventual remittance through ComEd to customers), and (b) ZionSolutions would bear any costs exceeding trust assets and could not charge ComEd or customers for overruns.
- The Illinois Commerce Commission approved the initial transfer involving the public utility (ComEd), but subsequent transfers did not require commission approval because Exelon and ZionSolutions were not public utilities.
- The decommissioning plan shifted from a long-term SAFSTOR approach to a faster DECON approach involving removal and disposal of radioactive material.
- ComEd customers filed a putative class action alleging ZionSolutions and the trustee were misusing trust funds without adequate oversight, asserting violations of the Illinois Public Utilities Act and Illinois trust law, and seeking injunctive relief and changes in trust administration.
- The district court dismissed under Rule 12(b)(6), and the customers appealed.

## Issues

1. Whether ComEd customers were beneficiaries (or otherwise held an enforceable interest) in the decommissioning trust sufficient to sue the contractor and trustee for alleged mismanagement.
2. Whether the complaint stated a judicially cognizable claim under Illinois trust law or the Illinois Public Utilities Act to challenge decommissioning-trust expenditures.

## Decision

- The Seventh Circuit affirmed dismissal for failure to state a claim.
- The court held the customers were not beneficiaries of the trust and had no contractual relationship with ZionSolutions or the trustee.
- Any potential customer refund depended on a contingent, indirect chain (surplus to Exelon, then to ComEd, then to customers under regulation), not a present equitable interest enforceable in court.
- The court rejected the theory that ZionSolutions became liable as a “trustee de son tort” because its use of the assets flowed from lawful transfers and contractual authority, not wrongful intermeddling.
- The court concluded that oversight of nuclear decommissioning funding and spending is primarily a matter for regulators rather than private suits by ratepayers.

## Legal Principles

- Only a trust beneficiary (or another party with a legally enforceable interest recognized by trust law) may sue to enforce fiduciary duties regarding trust administration.
- Paying utility rates that finance a regulated decommissioning fund does not, without more, confer equitable beneficiary status in a trust established and administered under a regulatory framework.
- A contingent expectation that surplus funds may ultimately be returned through intermediaries does not create a direct, enforceable right against a trustee or third-party contractor.
- “Trustee de son tort” liability requires wrongful intermeddling with trust property; authorized conduct pursuant to lawful transfers and agreements does not suffice.
- Where a regulatory scheme assigns supervision and enforcement to agencies, courts are reluctant to infer a private right to supervise or second-guess regulated decommissioning expenditures absent a clear statutory cause of action.

## Conclusion

The Seventh Circuit held that ComEd customers who funded a nuclear decommissioning trust through utility rates were not trust beneficiaries and lacked any direct contractual or statutory right to sue the decommissioning contractor or trustee over trust expenditures; monitoring such spending is chiefly committed to federal and state regulators.


Pennington v. ZionSolutions LLC, 742 F.3d 715 (7th Cir. 2014)