Nuclear Regulatory Commission v. Texas

LII note: The U.S Supreme Court has now decided Nuclear Regulatory Commission v. Texas

    Issues

    Under the Hobbs Act, can someone who wasn’t directly involved in a case challenge a government agency’s decision in court if they believe the agency went beyond its legal power? Second, do the Atomic Energy Act of 1954 and the Nuclear Waste Policy Act of 1982 allow the Nuclear Regulatory Commission to license private companies to temporarily store nuclear fuel away from nuclear-reactor sites? 

    Oral argument:
    March 05, 2025
    Court below:
    United States Court of Appeals for the Fifth Circuit

    This case asks the Supreme Court to determine whether parties like Texas can challenge an agency’s decision in court, despite not participating in the agency’s earlier hearing concerning the decision. Texas claims it has standing as an aggrieved party because it only needs to participate even slightly in the original decision-making process, while the Nuclear Regulatory Commission (“NRC”) argues Texas misinterprets the law because Texas was required to be a party in the decision-making process, not just a general participant, to be an aggrieved party. The case also asks the Supreme Court to decide if federal laws regulating nuclear energy production allow the NRC to license private companies to store nuclear waste away from the nuclear energy facilities, specifically in the Permian Basin in Texas. Texas argues that federal statutes only empower the NRC to license on-site or federal controlled off-site storage, while the NRC asserts that they have that power because the statutes do not explicitly limit its authority to license temporary, private off-site storage. The outcome of this case has future implications for both nuclear energy expansion, and oil and gas production in the Permian Basin region.

    Questions as Framed for the Court by the Parties

    Whether the Hobbs Act, which authorizes a “party aggrieved” by an agency’s “final order” to petition for review in a court of appeals, allows nonparties to obtain review of claims asserting that an agency order exceeds the agency’s statutory authority.

    Whether the Atomic Energy Act of 1954 and the Nuclear Waste Policy Act of 1982 permit the Nuclear Regulatory Commission to license private entities to temporarily store spent nuclear fuel away from the nuclear reactor sites where the spent fuel was generated.

    Facts

    In 1942, the first nuclear reactor was created in the United States.In 1946, Congress passed the Atomic Energy Act, which allowed civilian use of atomic power. The law originally gave the Atomic Energy Commission (“AEC”) the power to regulate nuclear use. However, the Energy Reorganization Act of 1974 abolished the AEC and transferred this responsibility to the Nuclear Regulatory Commission (“NRC”).

    One key area of regulation became spent nuclear fuel—nuclear fuel that has been used and can no longer produce energy. This material must be carefully stored, as it is highly radioactive and dangerous. In response to accumulating spent nuclear fuel, Congress enacted the Nuclear Waste Policy Act (“NWPA”) in 1982. In 2008, the Department of Energy submitted a license to create a storage space in the Yucca Mountains in Nevada for spent fuel. However, the Commission then shut down this review and consideration due to push back from businesses in Nevada. Due to these delays, spent nuclear fuel continued to accumulate.

    In response to the accumulation of spent fuel, Waste Control Specialists LLC (“WCS”) applied to the Commission for a license to operate an interim storage facility for spent nuclear fuel in Andrews County, Texas, in partnership with Interim Storage Partners, LLC (“ISP”). This storage site was not near a nuclear power plant nor a nuclear reactor.

    The NRC allows for any persons whose interest may be affected by a proceeding to file a request for a hearing and petition to intervene in the case. Fasken Land and Minerals, Ltd. (“Fasken”) sought to intervene as parties to WCS and ISP’s application to the NRC. The Commission denied this request for intervention. In response, Texas Governor Abbott and the Texas Commission on Environmental Quality (collectively “Texas”) sent a letter urging the Commission to deny the application due to the proposed facility’s location, without intervening in the Commission’s proceeding regarding the license.

    Despite this, the Commission ultimately issued the license. Texas and Fasken appealed the Commission's decision to the United States Court of Appeals for the Fifth Circuit.These parties appealed under the Hobbs Act, which grants the court of appeals the power to “enjoin, set aside, suspend (in whole or in part), or determine the validity of . . . final orders of the” Commission’s decisions. The Act states that “[a]ny party aggrieved” may petition for review. The Fifth Circuit determined it had jurisdiction under this provision, and reversed the Commission’s decision, holding that the Commission could not grant the license.

    The NRC and ISP separately appealed this decision.  The United States Supreme Court consolidated the NRC and ISP’s cases and granted their petitions for certiorari on October 4, 2024.

    Analysis

    ABILITY TO OBTAIN REVIEW OF CLAIMS FOR AGENCY DECISIONS 

    The NRC argues that Fasken and Texas should not be considered “parties aggrieved” under the Hobbs Act. The NRC contends that the Commission has repeatedly treated a “party” as a legal term of art meaning a person who participates as a litigant in a proceeding, not just a general participant in a case. As Texas and Fasken were not litigants in the case at hand, the NRC contends that they would not be considered “parties aggrieved.” In addition, the NRC reasons that interpreting a “party” any other way would undermine the typical norms in litigation outside of agency proceedings as the district courts have viewed parties as litigants to a case. ISP further adds that Congress specifically used the term “party” instead of “person” aggrieved to indicate that only litigants may appeal rather than any persons who have some interest in the case. 

    Additionally, the NRC argues that the Fifth Circuit erred in relying on ultra vires method of review, a judge-made principle that allows a nonparty to seek review in that agency’s court on the grounds that it exceeded its power. . The NRC contends that this method cannot override the limitation set by the Hobbs Act because the statute should be prioritized when these two principles conflict with each other. Moreover, the NRC argues that the exception itself has an unstable basis because it is derived from dicta and has not been utilized by any other courts of appeal.  The ISP adds that there is no support in the Hobbs Act or any other statute for implementing an ultra vires exception in this case. . Moreover, ISP alleges that this method would allow any person to cleverly frame an argument that an agency erred and exceeded its authority in order to appeal despite not having any true grounds for appeal. 

    Texas counters that the Fifth Circuit properly determined that they, along with Fasken, are considered “parties aggrieved” under the Hobbs Act. Texas argues that to be considered a “party aggrieved,” a person only needs to participate in the agency proceeding, not necessarily be a party to the proceeding. Here, Texas argues that they participated in the agency proceeding by filing comments against the proposed license with the Commission. Similarly, Fasken contends that it qualifies as a “party aggrieved” because it requested a hearing with the Commission and thereby participated in the proceeding. Fasken contends that the NRC is improperly applying the intervention standard from the AEA, which limits intervention to litigants, instead of following the Hobbs Act, which defines a party more broadly as anyone who participates in an agency proceeding. Furthermore, Texas contends that both the dictionary definition and a plain text reading of the statute align with this understanding of who is considered a party under the Hobbs Act. 

    Additionally, Fasken counters that even if the court finds that they are not “parties aggrieved” under this statute, the Commission can act ultra vires. . According to Fasken, the Hobbs Act does not bar an ultra vires method of review because it does not explicitly prohibit such review. Moreover, Fasken asserts that American courts have long recognized the ultra vires principle, allowing people to challenge agency actions despite not participating in agency proceedings. Additionally, Texas argues that ultra vires review has long been permitted without explicit statutory authorization in a wide range of cases and agency decisions, and therefore, it should be allowed in this case as well. 

    STORAGE OF SPENT NUCLEAR FUEL AWAY FROM NUCLEAR-REACTOR SITES

    The ISP argues that both the AEA and the NWPA allow for storage of spent nuclear fuel away from the nuclear-reactor sites where they were created. ISP argues that the AEA’s language clearly indicates Congress intended the ‘common defense and security’ provision to encompass the processing and utilization of spent fuel elements, thereby granting the Commission authority to regulate spent fuel, including at off-site locations. Moreover, the ISP maintains that Congress does not prohibit the off-site storage of this fuel anywhere in the statutory scheme of the AEA. In support, the NRC alleges that the Commission has consistently understood the AEA to authorize offsite storage and has handled its cases accordingly.

    Furthermore, the ISP asserts that the NWPA does not contain any text that prohibits the Commission from licensing spent fuel to private businesses away from these sites. ISP underscores that the NWPA only discusses the permanent disposal of spent nuclear fuel rather than the temporary possession of this fuel. ISP further argues that other courts have consistently interpreted the NWPA as not explicitly prohibiting private ownership of spent fuel, contrary to the Fifth Circuit’s decision. Contrary to the Fifth Circuit’s holding, ISP argues that the NWPA merely limits the scope of AEA but never changed the AEA’s text which permits the private storage away from reactor sites of spent fuel. Moreover, ISP states that the Fifth Circuit incorrectly inserted a geographic limitation on the AEA and NWPA and thereby rewrote the statute by inserting language that is not there. 

    Texas counters that the AEA and NWPA do not permit storage of spent fuel away from the sites where they were created. . First, Texas argues that the AEA does not explicitly authorize the Commission to regulate radioactive waste facilities. Accordingly, Texas maintains that agencies do not have the power to extend beyond Congress’s delegated authority within a statute.  Therefore, Texas contends that the Commission does not have the power under the AEA to regulate interim storage facilities. Second, Texas asserts that that the NWPA restricts the Commission’s authority to provide facilities for the permanent disposal of spent fuel.  Texas further insists that the Commission cannot grant additional licenses until the Department of Energy’s previous license to create a storage space for spent fuel in the Yucca Mountains is fulfilled.

    Additionally, Fasken argues that Congress addressed, when necessary, where to store spent fuel in the part of the U.S. Code titled “Interim Storage Program.” Fasken maintains that Congress specified in this part of the Code that overflow spent fuel away from the reactor site is only appropriate when storage at the site is insufficient and there is no foreseeable expansion of onsite storage.Furthermore, Fasken contends that in this section of the Code, Congress indicated that any excess spent fuel should be stored at federally owned storage facilities only until more space is ready. As this statute is explicit about where to store fuel, Fasken asserts that Congress has only authorized storage of spent fuel via the Interim Storage Program provision and not under any other provisions of law. Moreover, according to Fasken, Congress repeatedly directed the NRC to maximize the use of onsite storage capacity and did not authorize private, offsite storage unless necessary. 

    Discussion

    IMPACT ON DOMESTIC ENERGY PRODUCTION 

    In support of the NRC, the Nuclear Energy Institute (“NEI”) argues that the Fifth Circuit’s current ruling threatens the nuclear energy industry which is vital to meeting the demand of energy in the United States. The NEI asserts that away-from-reactor storage facilities are larger and more cost-effective. Therefore, the NEI contends forcing nuclear plants to rely solely on smaller, on-site storage would divert millions of dollars away from nuclear energy production and modernization. The NEI emphasizes that nuclear energy becomes increasingly important as time goes on, because unlike fossil-fuel power plants, nuclear power plants do not emit carbon dioxide and other air pollutants into the air. Therefore, NEI claims that the Supreme Court ruling for the NRC would save nuclear plants over $600 million, encouraging the growth of this more environmentally-friendly energy industry by increasing profits and reinvesting savings into further nuclear development.

    In support of Texas, U.S. Senators Ted Crus and John Cornyn, as well as other Representatives (collectively “the Senators”), argue that ruling for the NRC would permit nuclear waste storage in the Permian Basin, endangering one of the world’s most productive energy hubs. The Senators stress that the Permian Basin accounts for nearly half of U.S. crude oil production and has more active rigs than the rest of the lower 48 states combined, making its protection vital. The Senators contend that energy security is national security, and that the Permian Basin shields the U.S. from foreign oil crises. Additionally, New Mexico and Michigan, in support of Texas, warn that placing highly radioactive waste in the world’s largest oilfield creates a prime target for terrorist attacks, which could disrupt the nation’s energy supply. 

    ECONOMIC CONSEQUENCES

    In support of the NRC, the NEI argues that ruling for Texas would undermine predictability in nuclear storage licensing, potentially rendering substantial investments worthless. The NEI contends that the Fifth Circuit’s reading of the Hobbs Act enables belated legal challenges, injecting costly uncertainty into the nuclear industry. The NEI further emphasizes that private actors have invested heavily in away-from-reactor storage facilities for years, and that the Fifth Circuit’s holding would turn all those investments into losses. Similarly, in support of the NRC, Holtec International adds that this holding would encourage more duplicative litigation across multiple states, dragging out legal battles for years and imposing exorbitant costs on both the government and nuclear industry. Holtec also highlights that the risk of conflicting rulings could paralyze the regulatory process and deter future investment in nuclear energy.
    In support of Texas, the Senators focus less on private nuclear industry investments and more on the economic stakes for oil and natural gas companies operating in the Permian Basin. The Senators emphasize the billions of dollars invested in the region’s oil and gas infrastructure, highlighting how these operations provide secondary jobs that sustain local communities. The Senators warn that a single accident at either of the proposed nuclear storage facilities could cripple the Permian Basin, a region crucial not only to Texas’s economy but also to the whole nation’s. Moreover, Fort Worth raises concerns about its economic stability, as major parts of Fort Worth would fall within a potential radiation danger zone, which could harm local industries and drive down property values. 

    Conclusion


        Abigail Breneisen and Sarah Chang

          Sean Lee

    Additional Resources