The cases, U.S. Nuclear Regulatory Commission et al. v. State of Texas et al. and Interim Storage Partners LLC v. Texas et al., (collectively, NRC v. Texas), are both appeals from an August 2023 Fifth Circuit decision.  In that decision, the Fifth Circuit vacated a license the NRC granted to Interim Storage Partners, LLC (“ISP”) for its temporary spent nuclear fuel storage facility in Texas—known as a Consolidated Interim Storage Facility (“CISF”)—asserting that the NRC did not have the requisite statutory authority under federal law to issue licenses for private parties to store spent nuclear fuel away from the reactor site.  We previously wrote about that decision here.

In issuing its decision last year, the Fifth Circuit upended long-standing precedent and created a circuit split—which occurs when two different federal circuit courts issue contrary decisions on the same legal issue. The Supreme Court will resolve this circuit split in the upcoming term, as reflected in a grant of certiorari list published this morning.

Background on “Away from Reactor” Storage Licensing Cases

Under the Atomic Energy Act (“AEA”), supported by decades of regulatory precedent and case law, the NRC has wide ranging authority to license a broad array of facilities that use or possess radioactive material, including spent fuel.  This authority has been recognized to extend to CISF licensing, as affirmed by the D.C. Circuit in Bullcreek v. Nuclear Regulatory Commission, 359 F.3d 536 (D.C. Cir. 2004) and the Tenth Circuit in Skull Valley Band of Goshute Indians v. Nielson, 376 F.3d 1223 (10th Cir. 2004), when the NRC licensed an away-from-reactor CISF in the early 2000s.

In recent years, there has been an increased interest in CISFs, with the NRC licensing two facilities: one in Texas and one in New Mexico.  ISP—a joint venture between Orano USA and Waste Control Specialists—applied for a license for a proposed CISF adjacent to Waste Control Specialist’s existing low-level nuclear materials disposal facility in Andrews County, Texas.  In September 2021, the NRC issued a 40-year license to ISP to “receive, possess, store, and transfer” up to 5,000 metric tons of spent fuel and 231.3 metric tons of Greater than Class C waste at the CISF site. 

Around the same time, Holtec International applied for a license for a proposed CISF facility across the border in Lea County, New Mexico.  In May 2023, the NRC issued Holtec International a 40-year license to store up to 8,680 metric tons of commercial spent fuel.

Multiple court challenges were brought pertaining to these facilities, including two cases in the Fifth Circuit in Texas, one case in the Tenth Circuit in New Mexico, and one in the D.C. Circuit. In both Fifth Circuit cases (one against the ISP facility and one against the Holtec facility), the court invalidated the licenses, finding that the NRC did not have the authority to issue them, while the Tenth and D.C. Circuits upheld precedent, finding that the NRC did have such authority.  We explored these recent cases here.

Summary of Fifth Circuit Decision in Texas v. NRC

In Texas v. NRC—the case now before the Supreme Court as NRC v. Texas (as the NRC is now appealing)—the Fifth Circuit addressed three major issues: (1) the NRC’s statutory licensing authority for CISFs, (2) the major questions doctrine, and (3) standing and the Hobbs Act.  All three of these issues will now be before the Supreme Court.  This is the case that the Supreme Court will review, consolidating petitioners from both the NRC and ISP.

• Procedural History

Orano USA, the U.S. subsidiary of the French global nuclear fuel cycle company, and Waste Control Specialists (“WCS”) formed a joint venture, ISP, to construct and operate a CISF for spent nuclear fuel at an existing WCS site in Andrews County, Texas.  In April 2016, ISP applied to the NRC for a license for its proposed CISF, and the NRC issued the facility license in September 2021.

Although it was not an intervenor in the NRC licensing proceeding, the State of Texas appealed the license to the Fifth Circuit. 

The Fifth Circuit granted Texas standing using an ultra vires exception to the Hobbs Act, allowing Texas to appeal the license even though it was not party to NRC adjudication on the license.  As a general matter, under the Hobbs Act and caselaw, intervenors who have not participated in the NRC hearing process cannot then avail themselves of the courts to challenge an NRC licensing decision. In this case, the Fifth Circuit permitted Texas to bring its suit under an exception to the Hobbs Act articulated in a Fifth Circuit footnote from 1993 that suggests an unaffected party may appeal an agency’s action when the party alleges the agency exceeded its statutory authority.

• NRC’s Statutory Licensing Authority

In its decision, a three-judge panel of the Fifth Circuit found that although the Atomic Energy Act provides the NRC with authority over the construction and operation of nuclear power plants, as well as special nuclear material, source material, and byproduct material, the NRC does not have the specific authority to license storage facilities for spent nuclear fuel.  The court listed the enumerated purposes for which a license can be issued (e.g. for research, medical uses, industrial uses, etc.), and determined that because storage of spent fuel is not enumerated, then the NRC has no jurisdiction over it pursuant to the Atomic Energy Act.  The court then turned to the Nuclear Waste Policy Act—or NWPA—to further conclude that the NRC does not have the authority to license the CISF.

Judge James Ho, writing for the Court, stated that the NWPA provides a “comprehensive statutory scheme for dealing with nuclear waste generated from commercial nuclear power generation,” foreclosing the NRC’s claimed authority.  Although the Court conceded that under the NWPA the Department of Energy (DOE) was tasked with establishing a permanent storage repository (e.g., Yucca Mountain) while the NRC has the licensing authority, the Court chose to focus on the text specifying that this authority is limited to onsite storage of spent fuel “at the site” of the reactor.  See 42 USC § 10152. The Court stated that there is in turn no authority for the NRC to issue a license for a private entity to store spent fuel away from a reactor site, such as at the ISP CISF in Texas.

• Major Questions Doctrine

The Fifth Circuit asserted that the AEA and NWPA, when read together, are “unambiguous” on the issue.  The Court further stated, however, that “even if the statutes were ambiguous, the [NRC]’s interpretation wouldn’t be entitled to deference,” citing the 2022 Supreme Court decision West Virginia v. Environmental Protection Agency ("EPA”), which we previously wrote about after it was released, noting the impact it may have on this proceeding. 

In West Virginia v. EPA, the Court relied on the "major questions" doctrine, which was invoked by a majority of justices for the first time, to overturn a major EPA rulemaking.  As the Fifth Circuit decision stated, the “major questions” doctrine provides that courts should not defer to agencies on matters of "vast economic or political significance" unless the U.S. Congress has explicitly given the agencies the authority to act in those situations.  Furthermore, the Court stated that the doctrine “refers to an identifiable body of law that has developed over a series of significant cases all addressing a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”

The Fifth Circuit further noted that the issue of nuclear waste disposal constitutes a major question, so the Court would not have afforded the NRC deference on the issue—if reaching this decision had been necessary.

• Procedural Holding – Standing and the Hobbs Act

The Fifth Circuit decision also rejected long-standing precedent and case law pertaining to standing to challenge an NRC licensing action.  One form of standing that petitioners need to demonstrate to challenge a final NRC order in court is standing under the Hobbs Act, under which petitioners can demonstrate standing through having participated in the prior agency proceeding on the licensing action at issue. This has been interpreted to mean that the petitioner would have standing under the Hobbs Act if they had been an intervenor in a proceeding before the NRC pursuant to its regulations at 10 CFR 2.309—which the State of Texas and other petitioner in this case were not, and therefore the NRC argued they did not have standing. 

In its decision, the Fifth Circuit found to the contrary, stating that “the plain text of the Hobbs Act requires only that a petitioner have participated—in some way—in the agency proceedings, which Texas did through comments.”  The mere fact that Texas commented on the issuance of the license was sufficient for the Court to find standing under the Hobbs Act.

What Comes Next

The Supreme Court need not rule on all the issues the Fifth Circuit decided Texas v. NRC on.  However, it now has the ability to issue potentially far-reaching rulings on the NRC’s statutory licensing authority, the major questions doctrine, and the Hobbs Act.  In addition to nuclear industry stakeholders, attorneys with an interest in both nuclear law and broader administrative law should watch this case closely as the Supreme Court term progresses.

For more information, please contact Amy Roma, Partner, Stephanie Fishman, Senior Associate, or Cameron Tarry Hughes, Associate.