High Court Nuclear Waste Case May Shape Federal Agency Suits

The US Supreme Court’s dive Wednesday into the seemingly straightforward question of who can challenge an agency decision on storing highly radioactive nuclear waste could have significant implications for federal regulatory power.

The justices heard oral arguments in a case over whether Texas and companies that own land in the oil-rich Permian Basin had the right to challenge the license approval for nuclear waste storage. Their decision will directly apply to the Nuclear Regulatory Commission, but it will “apply equally” to other agencies covered by the Hobbs Act, such as the Federal Communications Commission, said Kevin King, a partner at Covington & Burling LLP.

The argument revolved around who can bring claims under the Hobbs Act, which requires that challengers to decisions by certain federal regulators participate in agency-level proceedings as a party.

Even if the high court goes with a “cautious and incremental approach” that it sometimes takes, its decision of who can challenge Hobbs Act-covered agency actions “will shape the approach that parties take in future agency proceedings,” King said.

And it may have other major repercussions.

“Although this case focuses on nuclear waste, the decision could have farther ranging impacts for what federal agencies can and can’t do,” including “whether or not a certain policy issue” constitutes “a major question” requiring a very clear Congressional delegation of power, said Brad Thompson, a partner at Duane Morris LLP.

Party Requirements

The justices expressed mixed views on what it means to be a “party” under the Hobbs Act.

“We would never have any ending to litigation if parties who want to intervene could come in at any point in time, even after judgment, raising new issues when they weren’t parties below,” Justice Sonia Sotomayor said during arguments.

Other justices expressed the view that “party” takes its meaning from context, according to King.

For example, Justice Neil M. Gorsuch suggested that the term “party” should be “understood in a more flexible and challenger-friendly way,” King said. In some circumstances, actions such as filing a comment letter during a rulemaking could be enough to sue, “but it might take more involvement to become a party in an adjudication like the NRC proceedings here,” he said.

Overall, however, the justices “seemed reluctant to allow the agencies to be gatekeepers for who can sue,” he said.

The Supreme Court’s decision will either close or open a path for nonparties, said Jack Jones, legal fellow at New York University’s Institute for Policy Integrity.

The US Court of Appeals for the Fifth Circuit, below, held that Texas and Fasken Land and Minerals Ltd. could sue here because they claimed the NRC exceeded its statutory authority by approving the nuclear waste storage.

If the high court agrees, “then it’s opening a pretty significant new door under the Hobbs Act for litigants that want to challenge” decisions by agencies that fall under the law, he said. The ultra vires exception is a “pretty significant exception.”

Major Questions Involved

“I didn’t hear much enthusiasm today for the ultra vires doctrine from the justices,” King said.

That being said, the high court could say they’re not adopting a categorical rule here and are leaving open how the ultra vires doctrine could work in the future, he added.

The scope of the NRC’s authority also invokes the major questions doctrine, which requires a clear Congressional authorization to regulate in areas of major national significance.

“This major question issue could present an opportunity for the Supreme Court to basically tell Congress it’s going to have to get much more meaningfully involved in these kind of bigger picture issues across the board,” Thompson said.

“If nothing else, this case has already shown us that invoking the major questions doctrine can get a litigant traction through the appellate courts and now a seat at the Supreme Court,” he added.

The case is NRC v. Texas, U.S., No. 23-1300, arguments held 3/5/25.