Supreme Court Hints Nuclear Regulatory Body Can Issue Licenses

The US Supreme Court released an important decision on June 18 in Nuclear Regulatory Commission v. Texas. The case challenged the commission’s authority to issue a 40-year renewable license for storing nuclear waste away from reactor sites that could have ripple effects across the country.

The US Court of Appeals for the Fifth Circuit found the commission lacked the statutory authority to issue the license. The Supreme Court reversed and held that the parties challenging the license didn’t have the right to appeal the NRC’s decision in the first place.

While the court purported to limit its holding to questions about the proper parties involved, it also signaled its support for the NRC’s authority to grant licenses in the future. That suggests the court’s cognizance of how important that authority is—threatening it could endanger the nation’s continued use of nuclear power; endorsing it (as the court seemed to) could encourage growth in the industry.

Addressing the Right to Appeal

The decision primarily clarifies who has the right to challenge agency actions—and, specifically, actions by the Nuclear Regulatory Commission—in federal court.

The Supreme Court examined two federal statutes, the Hobbs Act and the Atomic Energy Act.

Under the Hobbs Act, the court explained, only a “party” aggrieved by an agency action may seek judicial review of that action. Under the Atomic Energy Act, an entity counts as a “party” only if it’s the applicant before the NRC or successfully intervenes in the proceeding.

Applying those principles, the court held the State of Texas and Fasken Land and Minerals Ltd. weren’t proper “parties” because neither had successfully intervened. Texas had only submitted comments, and Fasken had sought to intervene, but the NRC denied the request.

Fasken had challenged that intervention denial in a different appeal before the DC Circuit and lost. Fasken attempted to challenge its intervention denial again before the Fifth Circuit and Supreme Court, but the Supreme Court rejected the argument as too little too late.

The Supreme Court also rejected Texas and Fasken’s alternative theory that they were permitted to seek review of the NRC’s licensing decision because that decision was “ultra vires”—legal Latin for an action unauthorized by law and in violation of individual rights.

The Supreme Court explained that it’s theoretically possible for someone without the statutory right to sue to challenge agency action as ultra vires. But the court, quoting a 2009 DC Circuit opinion by then-Judge Brett Kavanaugh, called the argument a “Hail Mary pass.” And it found Texas’ and Fasken’s throw fell short. They didn’t have an exceptional case in which an agency acted “in excess of its delegated powers and contrary to a specific [statutory] prohibition”; their claims raised run-of-the-mill statutory-authority disputes.

Addressing the Merits

The Supreme Court repeatedly stated that it wasn’t deciding the underlying statutory dispute over whether the NRC had the statutory authority to license private off-site storage facilities. In most cases, that would have been that. But in a somewhat unusual move, the majority also spent nearly five pages to “briefly note” why history and precedent support the NRC’s statutory interpretation.

The majority said it was wading into the merits to address the “dissent’s narrative” and arguments, but that might not have been its only reason. The court might have also hoped to give some comfort to companies interested in building off-site storage facilities for nuclear waste.

Twenty percent of electricity in the US is generated using nuclear power, and there is no current plan to build a permanent repository for the nation’s more than 90,000 metric tons of radioactive nuclear waste. Temporary, off-site solutions are critical, but they require years of planning and millions of dollars in investment.

The majority’s apparent (if tentative) view that the NRC has the authority to issue licenses for such solutions could have a positive effect on investment. Parties seeking to defend the validity of their NRC licenses can cite this opinion to show the court has at least signaled that the NRC does possess off-site licensing authority.

The cases are Nuclear Regulatory Commission v. Texas, 23-1300, and Interim Storage Partners v. Texas, 23-1312.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Jennifer Fischell is partner at MoloLamken with a practice focusing on energy and administrative law, complex civil litigation, and appeals.

Christian Bale is an attorney at MoloLamken with a practice focusing on complex civil litigation at both the trial and appellate levels.

Elizabeth Clarke is partner at MoloLamken, where her practice focuses on appeals and complex civil litigation.

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