All three of the cases below highlight the rapidly evolving landscape of the nuclear regulatory framework and could have vast consequences on the industry. As investment interest in nuclear power increases worldwide, a volatile regulatory environment could hinder the United States’ ability to keep up with international markets.
At the Supreme Court: Interim fuel storage
In Nuclear Regulatory Commission et al., Petitioners v. Texas et al., the Supreme Court may rule on whether the NRC has authority under the Atomic Energy Act of 1954 (AEA) or Nuclear Waste Policy Act of 1982 (NWPA) to license private facilities to store spent nuclear fuel away from the reactor sites where the waste was generated. Additionally, the Court will rule on whether the Hobbs Act allows for a nonparty to the administrative process to petition for judicial review. Texas argues that the NRC lacks authority to license privately owned, away-from-reactor facility storage of spent nuclear fuel. The state bases this argument on a reading of both the AEA and the NWPA that Congress expressly withholds authorization for these types of privately owned facilities. The NRC counters that the plain text of the AEA authorizes their licensing authority of offsite storage, and that the subsequent adoption of the NWPA did not change their licensing authority of these types of facilities. Joseph McManus’ January 2025 Trends article has a more detailed review of the procedural path this case took to get to the Supreme Court.
The amici curiae briefs provide an intriguing snapshot of the broader implications that could present depending on which interpretation prevails. Advocates against these types of privately owned waste facilities––which includes senators, cities, and state attorneys general—seem to be motivated by NIMBY-related interests including a lack of trust in the safety and security of interim storage solutions. Interestingly, Utah’s brief is the only one to make an explicit state’s right argument in relation to spent nuclear fuel storage. In contrast, advocates for the nuclear industry worry that a decision in favor of Texas could undermine the nuclear industry’s reliance on predictable administrative licensing proceedings at the NRC and disrupt settled expectations on the legality of the facilities in question.
The Supreme Court heard oral argument on this case on March 5, 2025, and a decision is expected before the end of the Court’s 2024 Term.
A recent circuit split: Standard of care for radiation exposure
Moving to the circuit level, in Mazzocchio v. Cotter Corp, 120 F.4th 565 (8th Cir. 2024) the Eighth Circuit recently split from five other circuits by holding that federal law does not preempt state standards of care in public liability actions under the Price-Anderson Act (PAA). The PAA was passed by Congress in 1957 to encourage investment within the nuclear power industry by setting accident liability limits for the industry. The PAA provides an exclusive federal cause of action for injuries that arise from nuclear incidents. Five other circuits––including the Third, Sixth, Seventh, Ninth, and Eleventh Circuits—have concluded that federal law provides the exclusive standard of care in nuclear safety cases. See In re TMI, 89 F.3d 1106 (3d Cir. 1996); Nieman v. NLO, Inc., 108 F.3d 1546 (6th Cir. 1997); O'Conner v. Commonwealth Edison Co., 13 F.3d 1090 (7th Cir. 1994); In re Hanford Nuclear Reservation Litig., 534 F.3d 986 (9th Cir. 2008); Roberts v. Fla. Power & Light Co., 146 F.3d 1305 (11th Cir. 1998). In those circuits, the standard of care for issues such as permissible radiation dosage levels would entirely be determined based on federal regulations.
In Mazzocchio, however, the Eighth Circuit held that state standards of care can and do apply. Thus, in the Eighth Circuit, compliance with the applicable federal regulations on radiation dose or other applicable safety standards would not insulate companies in the nuclear industry from potential liability. This decision seems to subvert the long-held viewpoint that “the field of nuclear safety has been occupied [completely] by federal regulation.” See O'Conner, 13 F.3d at 1105. It is a worrisome development for the industry, as it undercuts the perceived protections of the PPA and could have a chilling effect on new investment. Cotter Corporation and Commonwealth Edison Co. have filed a petition for certiorari and the Supreme Court has requested a response to that petition be filed before the end of May 2025. (Cotter Corp. v. Mazzochino et al. Doc. No. 24-1001).
A new complaint: Licensing authority over small reactors
On December 30, 2024, in the Eastern District of Texas, a new complaint was filed against the NRC. Texas, Utah, Louisiana, Florida, and the Arizona Legislature and Last Energy, Deep Fission, Inc., and Valpar Atomics, Inc.— private developers of small-modular reactor (SMR) designs—claim that the NRC does not have authority under the AEA to license the design and construction of small-modular reactors. The case is entitled State of Texas v. U.S. Nuclear Regulatory Commission, No. Case 6:24-cv-00507-JDK. Their argument claims that SMR, and potentially other lower-capacity research reactor designs, fall into a narrow exception to the NRC’s licensing authority. Their argument rests on a claim that SMRs do not meet either of two specific nuclear facility categories that Congress gave the NRC licensing authority over. The two categories delineated in the complaint are facilities “capable of making use of special nuclear material in such quantity as to be of significance to the common defense and security, or in such manner as to affect the health and safety of the public.” 42 U.S.C. § 2014.
The parties allege in their amended complaint that the NRC’s licensing requirements are significantly hindering the development of SMRs, and that a ruling in their favor is necessary to allow the deployment of this technology to move forward. However, it is not clear that a win in this case would necessarily speed up the development of these facilities, as there are not established nuclear energy regulatory frameworks at the state level. Indeed, a win for Texas and Utah in this area could be a loss for the industry in both public opinion of the technology’s safety and industry confidence in the regulatory process.
