Supreme Court Hears Oral Argument in Nuclear Waste Storage Cases

The U.S. Supreme Court on March 5, 2025, heard oral argument in two cases related to the U.S. Nuclear Regulatory Commission's (NRC) authority to license temporary spent fuel storage facilities that are not co-located with a licensed reactor. The cases, which the Supreme Court has consolidated into a single case, are appeals from a U.S. Court of Appeals for the Fifth Circuit decision holding that the NRC exceeded its statutory authority by licensing a temporary away-from-reactor spent fuel storage facility to be operated by Interim Storage Partners LLC (ISP) in Andrews County, Texas. The decision breaks from rulings by the U.S. Courts of Appeals for the District of Columbia Circuit and Tenth Circuit, each of which previously held that the NRC has authority to license such facilities under the Atomic Energy Act (AEA), notwithstanding the lack of any express authority in the Nuclear Waste Policy Act (NWPA).

Further, prior to reaching the merits of the case, the Fifth Circuit held that the parties challenging the license had authority to do so under an ultra vires exception (or judicially created exception) to the Hobbs Act. Two of the parties – private parties with interests in land near the proposed storage facility – attempted to intervene in the licensing proceeding but were denied by the NRC, and the denial was held up on judicial appeal. The third party, the state of Texas, submitted letters to the NRC registering its objections to the facility but never attempted to intervene in the proceeding. The Fifth Circuit, again breaking from four other circuits, held that failure to become a party to the licensing proceeding is not a barrier to a judicial challenge where the agency action is attacked as exceeding its power. As described further below, in oral argument, the Supreme Court indicated it may also be considering whether the NRC has statutory authority to implement its current regulations determining the circumstances under which parties may intervene in licensing proceedings.

Hobbs Act

The exclusive statutory basis for jurisdiction for courts to review challenges to licenses issued under the AEA is the Hobbs Act, which limits judicial review to a "party aggrieved" by the agency proceeding. At oral argument, ISP and the NRC (petitioners) argued that "party" has a specific meaning in this context and refers only to an actual party to the NRC licensing proceeding. The private party challengers and Texas (respondents) argue instead that a plain language meaning of "party aggrieved" is any person who is injured by the agency's decision or, alternatively, at most requires the party to have participated in the proceeding in some fashion, such as submitting comments during public comment periods. The Supreme Court spent little time on this argument at oral argument, opting to probe deeper on the aspects of the question discussed below.

Although the arguments above were addressed to some extent by concurring opinions to the Fifth Circuit's denial of en banc rehearing, the controlling Fifth Circuit decision expressly declined to address these arguments. Instead, the Fifth Circuit relied on an ultra vires exception to the Hobbs Act that allows nonparties to an agency proceeding to challenge an action on the basis that it exceeds the agency's statutory authority or is unconstitutional. Four other circuit courts – the Second, Seventh, Tenth and Eleventh – have declined to recognize the Fifth Circuit's ultra vires exception, including a Tenth Circuit decision resulting from the ISP licensing proceeding that denied a challenge by the state of New Mexico. At oral argument, the Supreme Court directly asked respondents about their view on the Fifth Circuit's ultra vires exception. Respondents did not directly speak to the Fifth Circuit's ultra vires reasoning but repeated that they would be a party under the Hobbs Act's requirements. The Court seemed to question both sides on this issue exhaustively, and it is not entirely clear how the justices intend to rule. It is possible that this could end in a split decision.

Lastly, at oral argument, the Court raised an additional question that could allow it to grant respondents standing in the current case without deciding the Hobbs Act question. That question is whether the NRC has statutory authority to impose "contention admissibility" requirements on would-be intervenors to licensing proceedings. Under its current rules, the NRC requires parties that seek to intervene to show not only that they may be injured by the proposed agency action but also demonstrate that the claims they raise meet several criteria, such as identifying specific evidence of the validity of the claims and a demonstration that the claim is material to the findings the NRC must make to support its licensing decision. Notably, Justice Clarence Thomas voiced skepticism of NRC's ability to limit parties that can intervene using its contention admissibility rules when there is no apparent express statutory authorization to limit access beyond traditional notions of standing.

However, the petitioners emphasized that the question of whether the private party challengers are parties themselves may not be a question properly before the Court, since they chose not to utilize proper avenues for relief after the D.C. Circuit upheld the NRC's denial of their status as a party. The petitioners argued that this question has not been appropriately raised in the current case and, thus, it would be improper for the Supreme Court to decide it at this time. The respondents agreed there is no statutory authority for the NRC's rules but argued that deciding that question was not necessary because they nonetheless have standing to bring the present case.

As of now, it is unclear how the Court intends to rule on this question, but it is important to note that a ruling invalidating the NRC's admissible contention rules would significantly broaden the pool of people who can be entered as parties during the licensing process, adding time and expense to licensing proceedings.

The NRC's Licensing Authority

Assuming the Supreme Court holds that the respondents are allowed to challenge the license, the Court will then need to decide if the NRC actually has authority to issue temporary away-from-reactor spent fuel storage licenses. Somewhat unexpectedly, the Court focused a significant portion of its questioning on this aspect of the case, perhaps indicating that the Court believes it is likely to reach the merits.

The respondents argued that the NWPA specifically prohibited the NRC from licensing private parties to license interim storage of off-site spent nuclear waste. NRC's argument relied heavily on the legislative history of the AEA and the NWPA, asserting that the NWPA's provisions on federal storage of nuclear waste were meant as an incentive and do not explicitly bar the NRC from licensing away-from-reactor storage sites. The Court probed the NRC on whether its current licensing proposals could be considered "interim," absent a clear plan from Congress or the federal government to create a permanent storage facility in the future. The NRC asserted that under its current structure, these would still be considered interim facilities. Ultimately, the NRC argued that nothing in the AEA or the NWPA explicitly prohibits the NRC from licensing private interim storage of spent nuclear fuel. The Court inquired heavily into the reasoning of both parties' arguments, so it is not entirely clear how it intends to rule.

Resolving these questions will not be easy for the Court. This case presents a difficult question of statutory interpretation, whether the NWPA establishes a storage scheme to the exclusion of AEA authority and/or whether the text of the AEA can be interpreted to allow this type of licensing. These questions are not directly answered by the text and will require application of canons of interpretation that cut in different directions and, potentially, some evaluation of the intent of Congress when passing the NWPA. The current iteration of the Court has been reluctant to look to sources such as legislative history to resolve questions of congressional intent, making the task that much more difficult.

Implications and Next Steps

The Court will render its decision by the end of the current term, which will likely be the end of June 2025 but may extend into early July.

The Court's decision could have significant implications for the NRC's authority, as well as future interpretation of the NWPA and the AEA. First, if the Court determines that the NRC's contention admissibility rules are extra-statutory, this would likely lower the barriers to entry for parties seeking to intervene in licensing proceedings at the agency, adding time and expense for license applicants to defend their applications. Alternatively, or perhaps in addition to the forgoing, if the Court determines that the Hobbs Act does not bar non-parties to the licensing proceeding from challenging the final agency licensing decision, additional parties could bring judicial suit after conclusion of the agency licensing proceeding, adding additional uncertainty and expense for license applicants at the back end of the process.

If the Court reaches the merits and determines that the NRC does not have authority to license temporary away-from-reactor waste storage, the decision would have significant implications for both existing and future reactors and storage facilities. Most immediately, it would call into question the existing licenses of storage facilities located where a reactor once stood but has since been dismantled. Although Justice Thomas suggested that these facilities could be carved out of any decision, it is difficult to identify statutory authority for such a result. Further down the road, the decision would present problems for existing reactors that have limited storage space available and for proposed reactors at sites such as industrial facilities and data centers that may not have space or desire to host nuclear waste. Such a result would perhaps demand congressional intervention.

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