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Pennington v. ZionSolutions LLC

742 F.3d 715 (2014)

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Pennington v. ZionSolutions LLC

United States Court of Appeals for the Seventh Circuit

742 F.3d 715 (2014)

Facts

Commonwealth Edison (ComEd) was a public utility that owned and operated a nuclear-power plant in Zion, Illinois. All nuclear-power-plant operators were required to create a decommissioning trust to finance the eventual decommissioning of the plant. ComEd set up one such trust funded by $700 million in charges levied on ComEd’s customers. Any money not spent on decommissioning was required by law to be returned to the customers. ComEd closed its Zion plant in 1998. In 2001, ComEd transferred the Zion plant and its decommissioning-trust assets to ComEd’s parent company, Exelon. BNY Mellon (defendant) was the trustee with Exelon as the beneficiary. Exelon then transferred the plant and trust assets to a company called ZionSolutions LLC (defendant) because ZionSolutions’ parent company, EnergySolutions, owned a nuclear-waste site. Because ComEd was a public utility, the Illinois Commerce Commission (the commission) had to approve the transfer of the plant and trust assets from ComEd to Exelon. However, because neither ZionSolutions nor Exelon were public utilities, the commission did not have to permit further transfer of the plant and trust assets. The transfer agreement between Exelon and ZionSolutions provided that any unspent money in the decommissioning trust would be returned to Exelon so that Exelon could remit the money to ComEd, which could then distribute the money to its customers. The transfer agreement further provided that if decommissioning costs exceeded trust assets, ZionSolutions was liable for any excess and could not seek reimbursement from ComEd or its customers. Several ComEd customers (plaintiffs) brought suit against ZionSolutions and BNY Mellon, claiming that the trust funds were being misused in violation of the Illinois Public Utilities Act and the common law of trusts. They sought several remedies including appointment of a new trustee and an order directing some of the funds in the trust to be disbursed to ComEd customers. The district court dismissed the complaint for failure to state a claim. The customers appealed.

Rule of Law

Issue

Holding and Reasoning (Posner, J.)

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