As week-long final arguments began drawing to a close yesterday, U.S. District Court Judge Robert R. Merhige Jr. continued to press Westinghouse Electric Corp. and eight major utilities to settle their disputes over uranium supply contracts before he has to rule on them.
"Once again, I urge you to settle this case," Merhige said at the close of one of the utilities' arguments. Only litigants can compromise a case; the court can't and I have no intention of doing so," the judge said. "I'm going to call it as I see it."
Judge Merhige hinted that his ruling could come in the complex case within two months. But first, he has warned, he has called a board of directors of all companies to Richmond for a meeting before ruling.
Sitting in the courtroom yesterday - presumbly to see how well the firm has spent millions of dollars in legal fees - was Robert E. Kirby, Westinghouse chairman.
All the utilities were ordered last November by the Judge to submit settlement proposals they would consider to a special court-appointed master, William B. Spong, dean of the William and Mary College Law School. Since then, however, only one utility to settle its claim with Westinghouse; it was the second utility to settle since the case began in September, but the claims represented only 4 percent of the total uranium in dispute.
The remaining eight utilities, whose cases were consolidated for trial here, claim they have valid and binding contracts with Westinghouse for the supply of a total of 53.4 million pounds of uranium at prices ranging from $8 to $12 a pound to fuel their nuclear power plants.
Westinghouse had notified each of them in September 1975 that, in its view, unforeseen contigencies had made its performance of the contracts "commercially impracticable" under section 2-615 of the Uniform Commercial Code. Westinghouse lawyers contend that a nationwide conspiracy among uranium producers, the repercussions of the energy crisis, and actions of the U.S. and foreign governments were unprecedented events that propelled the price of uranium to $26 a pound when Westinghouse announced it could not fill the contracts any more than $40 a pound today.
"At current uranium price levels, Westinghouse is faced with a multibillion dollar liaibility that could cripple the corporation for many years to come," Westinghouse lead counsel William R. Jentes told the court yesterday. "This is exactly the type of situation which the draftsmen of Section 2-645 invisioned . . ." he said, when he wrote that a seller should be excused from a contract if performance was made impracticale by the occurence of a contingency that was not contemplated by the parties to the contract when they signed it.
Lawyers for the utilities argued this week that Westinghouse gave a "novel and strained interpretation" to the commercial impracticability clause.
"If the uniform commercial code protects and encourages honestly . . . and reasonable standards of fair dealing in commercial relationships, the plaintiffs deserve to win, "Lewis T. Booker, liaison counsel for the utilities, including Virginia Electric and Power Company argued.
The utilities' lawyer contends that Westinghouse led them to believe it had supplied commitments for the uranium it was offering to supply, that it concealed from the utilities its abandonment of a policy ofoffering uranium for sale only when it had a backup supply, and that it declined to buy uranium to meet its obligations during this period when it was offered.
Booker also told the court that none of Westinghouse's competitors in the reactor manufacturing business was engaged in the same practices that resulted in a failure of supply uranium.