ML21335A235

Respondents' Reply in Support of Motion to Dismiss (DC Cir.)(Case No. 21-60743)

ML21335A235
Person / Time
Site:	Consolidated Interim Storage Facility
Issue date:	11/22/2021
From:	Andrew Averbach, Heminger J, Kim T NRC/OGC, US Dept of Justice, Environment & Natural Resources Div, US Dept of Justice, Office of the Attorney General
To:	US Federal Judiciary, Court of Appeals, 5th Circuit
References
00516103916, 21-60743
Download: ML21335A235 (20)

Text

Case: 21-60743 Document: 00516103916 Page: 1 Date Filed: 11/22/2021 No. 21-60743 UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT STATE OF TEXAS; GREG ABBOTT, GOVERNOR OF TEXAS; TEXAS COMMISSION ON ENVIRONMENTAL QUALITY; FASKEN LAND AND MINERALS, LTD. and PERMIAN BASIN LAND AND ROYATY OWNERS, Petitioners, v.

NUCLEAR REGULATORY COMMISSION and UNITED STATES OF AMERICA, Respondents.

On Petition for Review of Action by the Nuclear Regulatory Commission RESPONDENTS REPLY IN SUPPORT OF MOTION TO DISMISS TODD KIM ANDREW P. AVERBACH Assistant Attorney General Solicitor JUSTIN D. HEMINGER Office of the General Counsel Attorney U.S. Nuclear Regulatory Environment and Natural Resources Commission Division 11555 Rockville Pike U.S. Department of Justice Rockville, MD 20852 Post Office Box 7415 andrew.averbach@nrc.gov Washington, D.C. 20044 (301) 415-1956 justin.heminger@usdoj.gov (202) 514-5442

Case: 21-60743 Document: 00516103916 Page: 2 Date Filed: 11/22/2021 TABLE OF CONTENTS TABLE OF AUTHORITIES .................................................................................... ii GLOSSARY...............................................................................................................v ARGUMENT .............................................................................................................2 I. Texas ignores the distinction between rulemaking and adjudication. ..........2 II. Texass arguments concerning non-jurisdictional exhaustion are unavailing. ..............................................................................................................8 III. Texas cannot take solace in any ultra vires exception...............................9 CONCLUSION ........................................................................................................11 CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 27(D)

CERTIFICATE OF SERVICE

Case: 21-60743 Document: 00516103916 Page: 3 Date Filed: 11/22/2021 TABLE OF AUTHORITIES Judicial Decisions ACA Intl v. FCC, 885 F.3d 687 (D.C. Cir. 2018) ....................................................................3, 6 Alabama Power Co. v. FCC, 311 F.3d 1357 (11th Cir. 2002) ....................................................................... 8 Alabama Power v. ICC, 852 F.2d 1361 (D.C. Cir. 1988)....................................................................... 2 Alaska v. FERC, 980 F.2d 761 (D.C. Cir. 1992)......................................................................... 5 Am. Trucking Assns, Inc. v. ICC, 673 F.2d 82 (5th Cir. 1982) ............................................................................. 7 Baros v. Texas Mexican R.R. Co.,

400 F.3d 228 (5th Cir. 2005) .....................................................................9, 10 BPI v. Atomic Energy Commn, 502 F.2d 424 (D.C. Cir. 1974).....................................................................3, 4 Bullcreek v. NRC, 359 F.3d 536 (D.C. Cir. 2004)......................................................................11 Citizens Awareness Network, Inc. v. United States, 391 F.3d 338 (1st Cir. 2004)............................................................................ 3 Clark & Reid Co. v. United States, 804 F.2d 3 (1st Cir. 1986)................................................................................ 5 Fleming v. USDA, 987 F.3d 1093 (D.C. Cir. 2021)....................................................................... 8 Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985)......................................................................................... 7 ii

Case: 21-60743 Document: 00516103916 Page: 4 Date Filed: 11/22/2021 Gage v. AEC, 479 F.2d 1214 (D.C. Cir. 1973).......................................................1, 4, 6, 8, 9 Massachusetts v. NRC, 522 F.3d 115 (1st Cir. 2008)........................................................................5, 6 Merchants Fast Motor Lines, Inc. v. ICC, 5 F.3d 911 (5th Cir. 1993) .............................................................................10 NRDC v. NRC, 823 F.3d 641 (D.C. Cir. 2016)......................................................................... 2 Reytblatt v. NRC, 105 F.3d 715 (D.C. Cir. 1997)......................................................................... 2 Simmons v. ICC, 716 F.2d 40 (D.C. Cir. 1983)........................................................................... 2 Wales Transp., Inc. v. ICC, 728 F.2d 774 (5th Cir. 1984) ...................................................................... 8, 9 Water Transport Assn v. ICC, 819 F.2d 1189 (D.C. Cir. 1987)................................................................... 1, 2 Woodford v. Ngo, 548 U.S. 81 (2006)........................................................................................... 4 Statutes 28 U.S.C. § 2344 ............................................................................................1, 5, 7, 8 28 U.S.C. § 2348 ........................................................................................................ 8 42 U.S.C. § 2201 ........................................................................................................ 3 42 U.S.C. § 2239 ........................................................................................................ 8 iii

Case: 21-60743 Document: 00516103916 Page: 5 Date Filed: 11/22/2021 Adjudicatory Decision of Nuclear Regulatory Commission Interim Storage Partners LLC, CLI-20-14, 92 N.R.C. 463 (Dec. 4, 2020) ......................................................10 iv

Case: 21-60743 Document: 00516103916 Page: 6 Date Filed: 11/22/2021 GLOSSARY AEA Atomic Energy Act of 1954 ICC Interstate Commerce Commission ISP Interim Storage Partners, L.L.C.

NEPA National Environmental Policy Act NRC Nuclear Regulatory Commission NWPA Nuclear Waste Policy Act v

Case: 21-60743 Document: 00516103916 Page: 7 Date Filed: 11/22/2021 INTRODUCTION In our motion to dismiss, we demonstrated that Texas is not a party aggrieved within the meaning of the Hobbs Act, 28 U.S.C. § 2344, and is thus not permitted to seek judicial review in this Court, because it did not seek to intervene in the NRC adjudicatory proceedings related to ISPs application for a license. In response, Texas ignores the principle that participation in adjudicatory proceedings presented the appropriate and available opportunity constituting a statutory prerequisite to judicial review. Gage v. AEC, 479 F.2d 1214, 1217-18 (D.C. Cir.

1973). It likewise fails to confront the fact that [t]he degree of participation necessary to achieve party status varies according to the formality with which the proceeding [is] conducted. Water Transport Assn v. ICC, 819 F.2d 1189, 1192 (D.C. Cir. 1987). Instead, Texas asserts that it obtained party status simply by commenting on the Environmental Impact Statement for the ISP facility. That assertion conflicts with governing statutes and case law from this Court and other circuit courts. Moreover, Texass position would render completely optional the adjudicatory framework that the NRC, at Congresss direction in AEA Section 189, has established to resolve contentions raised by interested persons about highly technical issues related to nuclear safety. This Court should reject Texass effort to evade the administrative exhaustion requirements set by Congress.

Case: 21-60743 Document: 00516103916 Page: 8 Date Filed: 11/22/2021 ARGUMENT I. Texas ignores the distinction between rulemaking and adjudication.

Texass response hinges on its assertion that involvement in agency proceedings in any form is enough to confer party status upon it. Response at 5-9.

This is incorrect.

Undoubtedly, as Texas asserts (Response at 6), taking part in the notice-and-comment process is sufficient to confer party status with respect to informal rulemaking proceedings. Indeed, we cited Reytblatt v. NRC, 105 F.3d 715, 720 (D.C. Cir. 1997), for this proposition. Motion at 17 n.10. However, a greater degree of participation is required when an agency has (1) issued rules for intervening in an adjudication, such as those set forth at 10 C.F.R. Part 2; and (2) communicated those requirements to the public, as the NRC did when it provided notice of the hearing opportunity associated with ISPs application in the Federal Register. Motion at 4, 6-7; Water Transport, 819 F.2d at 1192; Alabama Power v.

ICC, 852 F.2d 1361, 1368 (D.C. Cir. 1988) (Hobbs Act review not available where petitioner failed to comply with rules created by agency for participation);

Simmons v. ICC, 716 F.2d 40, 43 (D.C. Cir. 1983) (observing that, in structured proceedings, relevant inquiry is whether petitioner in court attained, or sought to attain, party status before agency); see also NRDC v. NRC, 823 F.3d 641, 643 (D.C. Cir. 2016) (To challenge the Commission's grant of a license renewal, then, 2

Case: 21-60743 Document: 00516103916 Page: 9 Date Filed: 11/22/2021 a party must have successfully intervened in the proceeding by submitting adequate contentions under 10 C.F.R. § 2.309. (emphasis added)).

Texas does not acknowledge the case law recognizing that a greater degree of participation before the agency is required to seek judicial review of adjudicatory decisions. It relies (Response at 6) instead on ACA Intl v. FCC, 885 F.3d 687, 711-12 (D.C. Cir. 2018), for the proposition that a party may be aggrieved under the Hobbs Act by commenting on a petition in agency proceedings that resulted in a declaratory ruling. But ACA International clarifies that rule applies only [f]or agency proceedings that do not require intervention as a prerequisite to participation. 885 F.3d at 711 (emphasis added). And this caveat is squarely applicable here. The NRCs rules for adjudications do require intervention; the NRC issued rules decades ago creating contention admissibility requirements as a precondition to intervention to implement Congress direction in AEA Section 189 to provide for adjudicatory hearings in licensing proceedings and pursuant its general rulemaking authority in AEA Section 161(p), id. § 2201(p),

and courts have enforced them ever since. See, e.g., BPI v. Atomic Energy Commn, 502 F.2d 424, 426-29 (D.C. Cir. 1974) (upholding intervention requirements as consistent with AEA and reasonable); Citizens Awareness Network, Inc. v. United States, 391 F.3d 338 (1st Cir. 2004) (upholding revisions to 10 C.F.R. Part 2).

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Case: 21-60743 Document: 00516103916 Page: 10 Date Filed: 11/22/2021 Texas also retreats twice to its assertion, Response at 7, 8, that requiring it to participate in the agencys adjudicatory proceedings strips federal courts of the power of judicial review. Its arguments are unpersuasive. Agencies have the right to define the procedures applicable to requests to intervene brought by third parties to proceedings. See BPI, 502 F.2d at 426-29. Indeed, [p]roper exhaustion demands compliance with an agencys deadlines and other critical procedural rules because no adjudicative system can function effectively without imposing some orderly structure on the course of its proceedings. Woodford v. Ngo, 548 U.S. 81, 90-91 (2006). But the agencys authority to create procedures does not restrict the power of federal courts; it enables agencies to specify the avenues that are appropriate and available to intervenors who may seek to challenge agency decisions and to insist upon participation in accordance with these procedures as a precondition to judicial review. Gage, 479 F.2d at 1217-18. Any curtailment of Texass ability to obtain judicial review is not the result of an alleged attempt by the NRC to strip the federal courts of power; it is the result of Texass unilateral decision not to participate in adjudicatory proceedings in the manner that was 4

Case: 21-60743 Document: 00516103916 Page: 11 Date Filed: 11/22/2021 offered and that other entities, who are now before the D.C. Circuit,1 took advantage of.

Texass reliance upon Massachusetts v. NRC, 522 F.3d 115 (1st Cir. 2008),

and Clark & Reid Co. v. United States., 804 F.2d 3 (1st Cir. 1986), in this regard is likewise unavailing. Response at 8-9. Respondents do not dispute that this Court is the ultimate determinant of its own jurisdiction. But these decisions are consistent with Respondents positionthat seeking an otherwise available administrative hearing before the NRC is a mandatory prerequisite to obtaining judicial review of an NRC licensing decision. See Clark & Reid, 804 F.2d at 5 (recognizing that party aggrieved requirement means that a petitioner must have been a party to the agency proceedings); Massachusetts, 522 F.3d at 130-31 (observing that Massachusetts, which had previously sought but was denied party status in a licensing proceeding, could nonetheless seek judicial review of a 1

In a footnote, Texas suggests that the petitions for review challenging the Commissions adjudicatory decisions were jurisdictionally premature because the license had not issued in those cases. Response at 3 n.1. That is incorrect.

Persons who seek and are denied party status before the agency can (and, indeed, must, if they seek to be heard) seek judicial review of the decision denying their request for admission to the proceeding within sixty days. See 28 U.S.C. § 2344; Alaska v. FERC, 980 F.2d 761, 763 (D.C. Cir. 1992) (Having failed to achieve the status of a party to the litigation, the putative intervenor could not later seek review of the final judgment on the merits.). Thus, the NRC has not contested the D.C.

Circuits jurisdiction over those petitions for review by parties that properly sought intervention in the licensing proceeding.

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Case: 21-60743 Document: 00516103916 Page: 12 Date Filed: 11/22/2021 related rulemaking petition, or of a hypothetical denial of a stay request as an interested governmental entity, regardless of whether the state was considered a party). And unlike Massachusetts, Texas did not participate directly and substantially in the adjudicatory proceedings before the agency, id.; it did not participate at all.

Nor does Gage support Texass position (Response at 7-8). While the court in Gage stated that the AEA and Hobbs Act make no distinction between orders which promulgate rules and orders in adjudicative proceedings, it did so only in considering whether to extend the exhaustion requirement applicable to adjudicatory decisions to rulemaking orders, and it ruled that those challenging rulemaking orders also were required to participate before the agency, albeit through the notice-and-comment process. Id. at 1218. Gage did not relax the baseline assumptionwhich the D.C. Circuit never challengedthat those seeking judicial review of a decision in which a hearing is appropriate and available must seek party status in the adjudication before seeking judicial review.

Further, Texas appears to contend that it is an aggrieved party under the Hobbs Act because it purportedly has Article III standing. Response at 9. But as the D.C. Circuit observed, [T]he phrase party aggrieved requires that petitioners have been parties to the underlying agency proceedings, not simply parties to the present suit who are aggrieved in a constitutional (Article III) sense. ACA Intl, 6

Case: 21-60743 Document: 00516103916 Page: 13 Date Filed: 11/22/2021 885 F.3d at 711; see also Am. Trucking Assns, Inc. v. ICC, 673 F.2d 82, 85 (5th Cir. 1982) (Nothing in this opinion is meant to equate administrative standing with judicial standing. We recognize that the two concepts of standing are governed by different standards.).

Finally, Texass reliance upon Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985), for the proposition that Congress intended for court of appeals review of all final orders in licensing proceedings regardless of whether a hearing occurred or could have occurred, Response at 7, does not advance its position. The statement that Texas seizes upon referred to the question of whether judicial review was available in the court of appeals, as opposed to district court, for a petitioner who filed a request, pursuant to 10 C.F.R. § 2.206, that the NRC initiate a proceeding to modify, revoke, or suspend a license, and whose request had been denied without a hearing. The petitioner in that case had availed itself of the procedures available to itrequesting that the Commission take action against the licenseand the Court held that the agencys decision was judicially reviewable under the Hobbs Act. 470 U.S. at 746. The Court did not interpret or apply the party aggrieved language in 28 U.S.C. § 2344; it did not even cite the provision.

Nor did the Court suggest, as Texas asserts here, that a party could choose to avoid the necessary step of agency adjudication and instead proceed directly to judicial review.

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Case: 21-60743 Document: 00516103916 Page: 14 Date Filed: 11/22/2021 II. Texass arguments concerning non-jurisdictional exhaustion are unavailing.

We cited to Fleming v. USDA, 987 F.3d 1093, 1098-99 (D.C. Cir. 2021), in our motion to dismiss (at 12-14) to address the possibility that the Court might deem it appropriate to dismiss for non-jurisdictional, mandatory exhaustion as opposed to lack of subject-matter jurisdiction. Texas does not address the issue of which vehicle is the appropriate means for the Court to dismiss the case. Texas does, however, state that we have not identified any . . . statutory language in the Atomic Energy Act or the Hobbs Act that requires exhaustion. Response at 9-10.

This assertion is incorrect.

The AEA and the Hobbs Act together make clear that the Courts jurisdiction is only invoked when a party (or a person denied party status) challenges a final order in a proceeding conducted under Section 189 of the Atomic Energy Act. 28 U.S.C. § 2344; 42 U.S.C. § 2239(b).2 Indeed, it is precisely this language that led the D.C. Circuit in Gageand this Court in Wales 2

The Hobbs Act reinforces this understanding by providing, in setting forth who may appear in court to defend an agency decision, that [t]he agency, and any party in interest in the proceeding before the agency whose interests will be affected if an order of the agency is or is not enjoined, set aside, or suspend, may appear as parties thereto of their own motion and as of right, and be represented by counsel in any proceeding to review the order. 28 U.S.C. § 2348 (emphasis added); see Alabama Power Co. v. FCC, 311 F.3d 1357, 1366-67 (11th Cir. 2002).

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Case: 21-60743 Document: 00516103916 Page: 15 Date Filed: 11/22/2021 Transportationto conclude that participation before the agency is the statutorily prescribed prerequisite to Hobbs Act review. Gage, 479 F.2d at 1217; Wales Transp., Inc. v. ICC, 728 F.2d 774, 776 n.1 (5th Cir. 1984). Texas has no answer to these cases, other than to assert that the exhaustion requirement does not apply to them, yet somehow has also been met. And the requirement plainly has not been satisfied.

III. Texas cannot take solace in any ultra vires exception.

Finally, Texas contends that even if it is not a party aggrieved, this Court has recognized an exception to the exhaustion requirement for actions that are allegedly outside the scope of an agencys authority. Response at 10-11. This contention misapprehends the vitality of this theory and its applicability to this case.

First, Texas incorrectly states (Response at 11) that we fail[ed] to identify any Fifth Circuit decision cabining American Trucking. In fact, we specifically noted (Motion at 14-15) that the statement in American Truckingwhich is itself dictahas been roundly criticized and that its underpinnings have been eroded by subsequent decisions. And we highlighted this Courts recognition that the exception has been squarely rejected by other courts, Baros v. Texas Mexican R.R. Co., 400 F.3d 228, 238 n.24 (5th Cir. 2005), is exceedingly narrow, id., and is inapplicable where the agency has the authority to decide the scope of its own 9

Case: 21-60743 Document: 00516103916 Page: 16 Date Filed: 11/22/2021 authority, Merchants Fast Motor Lines, Inc. v. ICC, 5 F.3d 911, 922 (5th Cir.

1993). As in Baros, Texas had an affirmative duty to intervene before the agency in any of the proceedings involving the license, and [b]y failing affirmatively to act to protect [its] interests by intervening in the agency proceedings, Texas cannot now advance [its] claims in a collateral action that necessarily challenges several agency decisions and orders as being issued outside the NRCs authority.

400 F.3d at 238.

Texas does not grapple with these decisions. Nor does it make any effort to explain why, even assuming it exists, this exception should apply here. The Commission has the ability and the authority to determine whether licensing a facility for the storage of spent fuel is somehow inconsistent with the Nuclear Waste Policy Act and thus beyond its authority. Indeed, the Commission entertained arguments to precisely this effect when it dismissed various contentions of the parties who are now before the D.C. Circuit, including expressly rejecting the assertion that issuing the license would exceed [its] statutory authority. Interim Storage Partners LLC, CLI-20-14, 92 N.R.C. 463, 467-69 (Dec. 4, 2020).

Moreover, framing the issue that Texas identifies as one going to the authority of the NRC expands this narrow exception far beyond Baros and Merchants Fast Motor Lines. While Texas asserts that the ISP license somehow 10

Case: 21-60743 Document: 00516103916 Page: 17 Date Filed: 11/22/2021 creates a de facto permanent nuclear waste repository, its assertion not only ignores that the facility is only licensed for 40 years of operation but flies in the face of applicable precedent. Indeed, it has long been recognized that the AEA confers on the NRC authority to license and regulate the storage and disposal of [spent]

fuel. Bullcreek v. NRC, 359 F.3d 536, 538-39 (D.C. Cir. 2004); id. at 543 (rejecting argument that passage of NWPA repealed NRCs authority under AEA to license spent fuel storage at private away-from-reactor facilities). If Texas were correct about the scope of the exception, then any person could avoid the statutory exhaustion requirement simply by asserting that the license is really, or effectively, or, as here, de facto, something that is beyond the agencys statutory authority. There is no basis in the Atomic Energy Act or the Hobbs Act for permitting such recharacterizations of agency action to evade the agencys procedures and to proceed directly to court without the benefit of the agencys considered judgment. At a minimum, if the Court permits Texas to invoke this exception, it should limit Texass arguments to its narrow and unfounded assertion that the NRC lacks authority to license the facility at issue.

CONCLUSION Respondents respectfully request that this Court dismiss Texass Petition for Review.

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Case: 21-60743 Document: 00516103916 Page: 18 Date Filed: 11/22/2021 Respectfully submitted,

/s/ Justin D. Heminger /s/ Andrew P. Averbach TODD KIM ANDREW P. AVERBACH Assistant Attorney General Solicitor JUSTIN D. HEMINGER Office of the General Counsel Attorney U.S. Nuclear Regulatory Commission Environment and Natural Resources 11555 Rockville Pike Division Rockville, MD 20852 U.S. Department of Justice andrew.averbach@nrc.gov Post Office Box 7415 (301) 415-1956 Washington, D.C. 20044 justin.heminger@usdoj.gov (202) 514-5442 November 22, 2021 12

Case: 21-60743 Document: 00516103916 Page: 19 Date Filed: 11/22/2021 CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 27(D)

I certify that this filing complies with the requirements of Fed. R. App. P.

27(d)(1)(E) because it has been prepared in 14-point Times New Roman, a proportionally spaced font.

I further certify that this filing complies with the type-volume limitation of Fed. R. App. P. 27(d)(2)(A) because it contains 2,597 words, excluding the parts of the of the filing exempted under Fed. R. App. P. 32(f), according to the count of Microsoft Word.

/s/ Andrew P. Averbach Andrew P. Averbach Counsel for Respondent U.S. Nuclear Regulatory Commission

Case: 21-60743 Document: 00516103916 Page: 20 Date Filed: 11/22/2021 CERTIFICATE OF SERVICE I certify that on November 22, 2021, I served a copy of RESPONDENTS REPLY IN SUPPORT OF MOTION TO DISMISS upon counsel for the parties in this action by filing the document electronically through the CM/ECF system.

This method of service is calculated to serve counsel at the following e-mail addresses:

Michael Abrams Michael.Abrams@oag.texas.gov, hollis.duncan@oag.texas.gov, katrina.shanks@oag.texas.gov Henry Carl Myers carl.myers@oag.texas.gov, david.laurent@oag.texas.gov, laura.courtney@oag.texas.gov Justin Heminger justin.heminger@usdoj.gov, efile_app.enrd@usdoj.gov Arnold Bradley Fagg brad.fagg@morganlewis.com Allan L. Kanner a.kanner@kanner-law.com; A.Tennis@kanner-law.com, k.crowell@kanner-law.com

/s/ Andrew P. Averbach Andrew P. Averbach Counsel for Respondent U.S. Nuclear Regulatory Commission