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January/February 2025

U.S. Nuclear Regulatory Commission et al. v. State of Texas, et al.; Interim Storage Partners, LLC v. State of Texas, et al.

Joseph Deandreis McManus

Summary

  • The Supreme Court has taken up a challenge by the State of Texas to a Nuclear Regulatory Commission decision to site a spent nuclear fuel storage facility in the State.
  • The Court will first address whether an entity that merely submitted comments in the agency proceeding is a “party aggrieved” under the Hobbs Act and has standing to sue.
  • If there is standing, the Court will then decide whether the Nuclear Regulatory Commission exceeds it statutory authority when it licenses spent fuel storage facilities other than where those fuels are used.
U.S. Nuclear Regulatory Commission et al. v. State of Texas, et al.; Interim Storage Partners, LLC v. State of Texas, et al.
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The U.S. Supreme Court has accepted review and consolidated two cases concerning a matter of national importance resulting from congressional inaction: the storage of spent nuclear fuel (SNF) from the nation’s commercial reactor power operations. The Court will answer whether the U.S. Nuclear Regulatory Commission (NRC, or Commission) has the authority under the Atomic Energy Act of 1954, as amended (AEA) to license away-from-reactor spent fuel storage facilities. Such facilities include independent spent fuel storage installations sited at former operating reactor sites that store SNF resulting from the site’s power reactor operations. Similarly, consolidated interim storage facilities, licensed by the NRC under the same regulatory scheme, propose to consolidate and temporarily store SNF from the nation’s current and former reactor sites and potentially SNF from other spent fuel storage installations. 

The road to the Supreme Court’s review of this matter has been six years in the making. In 2018, Interim Storage Partner LLC (ISP) requested that the NRC resume review of its license application to construct and operate an away-from-reactor consolidated interim storage facility in Andrews, Texas. ISP’s application to the NRC stated that it intends to store 5,000 metric tons of SNF in six canister storage systems for a 40-year license term in its first phase, with plans for additional storage of 5,000 tons of SNF in following phases. As ISP noted in its Supreme Court brief: “Obtaining that license is a monumental undertaking. There are reams of required environmental and safety analyses (including a 500-page draft and 700-page final environmental impact statement [EIS] in this case).” Under the AEA, the public is afforded hearing rights to licensing actions by the NRC, provided those public petitioners meet certain requirements. These requirements include meeting judicial standing, and that the contentions (i.e., claims) asserted comply with the Commission’s admission regulations to obtain a hearing stage before the NRC’s independent administrative court, the Atomic Safety and Licensing Board Panel (ASLBP). Accordingly, four organizations, including two oil and mineral firms and landowning firms (collectively, Fasken) from the Permian Basin region of Texas filed petitions to intervene. Notably, Texas did not file a petition to intervene at this stage but submitted comment letters on the NRC’s draft environmental impact statement (EIS) for ISP’s consolidated spent fuel storage facility, urging denial of the license application. After reviewing more than thirty-five contentions by the various organizations, the Atomic and Safety Licensing Board (Board) denied all the proffered contentions for hearing and terminated the proceeding. Reviewing various appeals from the petitioning organizations, the Commission affirmed the Board’s decisions to deny the hearing requests. On September 13, 2021, the NRC issued ISP a license to construct and operate the consolidated interim storage facility.

Texas and Fasken then appealed the NRC’s decision to the United States Court of Appeals for the Fifth Circuit. Specifically, Texas argued (among other things) that the NRC lacked the authority to issue a license under the AEA to grant ISP (or anyone else) an away-from-reactor spent fuel storage facility.

The Fifth Circuit agreed with Texas. It proceeded to analyze the appellants’ standing under the Administrative Orders Review Act, or “Hobbs Act,” and observed that the Hobbs Act gives a “party aggrieved” by an agency’s final order standing to file a petition to review the order in the court of appeals wherein the venue lies. The NRC argued that neither appellant had standing under the Hobbs Act because neither was a “party aggrieved”—Texas only submitted comments on the draft EIS and did not participate in any of the available administrative procedures (e.g., petition for hearing at the ASLBP). Further, the NRC asserted that Fasken may only challenge the order denying its intervention to the license proceeding as a party, not later being able to seek review of the NRC’s final judgment on the merits.

The Fifth Circuit was not persuaded by the NRC’s arguments, opining that “[t]he plain test of the Hobbs Act merely requires that a petitioner seeking review of an agency action be a “party aggrieved.” The Fifth Circuit explained that because Texas and Fasken participated in “some way” in the NRC’s administrative proceedings, they had met the Hobbs Act’s requirements. Although the Fifth Circuit realized that its interpretation of the Hobbs Act would likely conflict with other federal courts of appeal because other circuits have heightened participation requirements under their relevant caselaw, the Fifth Circuit wrote that it did not need to resolve that tension because it separately recognizes an ultra vires exception to the “party-aggrieved” status requirement. This exception applies in either of “two rare instances” where standing is given to a person “even if not a party to the original agency proceeding’ –(1) where ‘the agency action is attacked as exceeding [its] power’ and (2) where the person ‘challenges the constitutionality of the statute conferring authority on the agency.’” Under this standard, the Court observed that both Texas and Fasken had permissively challenged the NRC’s statutory authority under the AEA or the Nuclear Waste Policy Act (NWPA) for issuing ISP a license to store special nuclear material, i.e., spent fuel. The Court accordingly found that the petitioners had standing.

The Fifth Circuit then agreed with the Appellants that the NRC had no statutory authority to issue the license and that issuance of the license contradicted congressional policy under the NWPA. Under a textualist approach, the Fifth Circuit wrote that the AEA authorizes the Commission to issue licenses only for certain enumerated purposes — “none of which encompass storage or disposal of material as radioactive as spent nuclear fuel.” Notwithstanding the Commission’s argument that it had authority to issue ISP’s license because the AEA conferred upon the agency the enumerated authority to issue licenses for the possession of SNM, source material, and biproduct material—which are constituent material of SNM—the Fifth Circuit was not persuaded. Moreover, the Court wrote that the issued license could not be reconciled with the NWPA, because Congress created the NWPA as the comprehensive statutory scheme for addressing SNF accumulation in the country. Accordingly, the Court granted the appellants’ petition for review and vacated ISP’s license.

The NRC and ISP subsequently petitioned the Fifth Circuit for en banc review of the decision, but the petition was denied.

On June 12, 2024, the NRC and ISP submitted petitions for a writ of certiorari to the Supreme Court. One interesting amicus brief filed in support of the petition was filed by the Nuclear Energy Institute, with lead counsel Paul Clement. The Supreme Court granted the petitions and consolidated the cases on October 4, 2024. The cases before the Supreme Court are Docket Numbers 23-1300 and 23-1312, respectively. Accordingly, the Supreme Court will decide whether the NRC possesses the statutory authority to license away-from-reactor interim spent fuel storage facilities and whether the Fifth Circuit’s interpretation of the Hobbs Act’s “party aggrieved” and its ultra vires exception is permissible, notwithstanding that this judicial exception effectively overrides the express statutory jurisdiction limits in the Hobbs Act. The Supreme Court will hear oral argument on the consolidated cases on March 5, 2025.

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