SCOTUS Affirms Rules for Challenging Nuclear Regulatory Commission Licenses

The Supreme Court’s majority opinion did not reach the underlying statutory question, though it made clear its disagreement with the Fifth Circuit’s conclusion. Instead, it held that Texas and Fasken Land and Minerals Ltd., the challengers, could not sue under the Hobbs Act because they were not formally admitted as parties in the NRC’s licensing proceeding.^[1]

Background
In 2018, ISP applied for a license from the NRC to build and operate a private, away-from-reactor facility for storing spent nuclear fuel in Andrews County, West Texas. The Atomic Energy Act (AEA) of 1954 requires NRC licensing for the private possession of such material.

As part of the licensing review, the NRC conducted comprehensive safety and environmental reviews. While ISP’s application moved forward, the State of Texas and Fasken Land and Minerals Ltd., a West Texas company engaged in oil, gas and cattle operations, opposed the project:

• Texas submitted comments on the NRC’s draft Environmental Impact Statement (EIS) for the ISP facility but did not seek to participate in the NRC public hearing process.
• Fasken filed comments on the EIS and, unlike Texas, petitioned to intervene in the NRC’s adjudicatory proceeding. The NRC denied the petition, finding that it failed to raise a material legal or factual dispute.
• The denial of the Fasken petition was upheld by the D.C. Circuit, and Fasken did not seek further review.

Despite not having party status before the NRC, both Texas and Fasken filed suit in the Fifth Circuit, arguing that the NRC’s licensing of a private, away-from-reactor facility was beyond its statutory authority (ultra vires). The Fifth Circuit agreed, vacating ISP’s license.^[2]

Supreme Court Ruling: Who Can Sue Under the Hobbs Act
On review, the Supreme Court reversed. It held that under the Hobbs Act, only a “party aggrieved” by an agency’s final order may seek judicial review. The AEA defines “party” as either the license applicant or a person who has been granted intervention in the licensing proceeding.

Because the NRC denied Fasken’s intervention petition (and that denial was affirmed by the D.C. Circuit), and Texas never attempted to intervene at all, neither qualified as a “party.” Thus, neither could challenge the NRC’s licensing decision in federal court.

This holding confirms that only parties formally admitted to the agency’s licensing proceeding may seek judicial review of an NRC licensing decision under the Hobbs Act. By excluding non-intervenors from judicial review, the decision significantly reduces the risk of late-stage legal challenges by outside groups that only participated peripherally, such as through public comments. This enhances predictability for licensees, investors and project developers by reinforcing the finality of NRC-approved licenses. It also serves as a deterrent to strategic objections by parties unwilling to engage fully in the administrative process, ultimately strengthening the stability and reliability of the NRC’s licensing framework.

Ultra Vires Arguments Cannot Bypass Statutory Review Paths
Texas and Fasken argued that they could challenge the NRC’s license as ultra vires, even without party status, because the agency exceeded its statutory authority. The Court rejected this argument and reaffirmed that ultra vires claims are narrowly limited to situations where no meaningful opportunity for judicial review exists.

In this case, Fasken had an opportunity to seek review of its denied intervention and did. Further, Texas could have sought to intervene in the NRC proceeding but elected not to. Because both had access to judicial review through the statutory process, they could not bypass the Hobbs Act’s “party aggrieved” requirement by framing their claims as extraordinary legal violations. The Court reasoned that allowing otherwise would permit parties to circumvent statutory limits through a mere relabeling of routine challenges as ultra vires.

Court Signals Approval of NRC’s Statutory Interpretation
Since the majority concluded that Texas and Fasken were not “parties aggrieved,” they lacked standing to raise the statutory authority argument before the Fifth Circuit. Accordingly, the Court stated that it “need not and do[es] not decide” whether the NRC has the statutory authority to license private away-from-reactor storage facilities. The majority did, however, state that “history and precedent offer significant support for the Commission’s longstanding interpretation.” In responding to the dissent’s arguments on the merits, the majority emphasized several points reinforcing the legal foundation for the NRC’s licensing approach:

• For nearly 50 years, the NRC has interpreted the AEA as authorizing licenses for private away-from-reactor spent nuclear fuel storage, and this interpretation has been supported by both the Supreme Court and the D.C. Circuit.
• The Court explicitly referenced the NRC’s 1980 regulations, which specifically allowed for licensing of private away-from-reactor storage, and emphasized that Congress was aware of these regulations when it enacted the Nuclear Waste Policy Act (NWPA) in 1982 but did not repeal or displace them.
• The majority highlighted Bullcreek v. NRC, a D.C. Circuit decision that upheld the licensing of another private away-from-reactor interim storage facility, recognizing the Commission’s preexisting authority under the AEA and concluding that the NWPA did not revoke that authority.
• The opinion rejected the dissent’s interpretation that the AEA did not authorize storage of spent nuclear fuel, observing that this view would imply that no license is required at all for private away-from-reactor storage.
• Further, the Court disputed the dissent’s view that the NWPA bars private away-from-reactor storage, asserting instead that the Act merely added authority for federal storage without eliminating the NRC’s licensing authority under the AEA.

Although the Court nominally sidestepped the merits, its language clearly indicated how a majority of the Court would rule were this issue to be raised again.

Dissenting Opinion: A Path for Future Challenges
Justice Neil Gorsuch, joined by Justices Thomas and Alito, dissented. He argued that Texas and Fasken were “parties aggrieved” because they meaningfully participated in the NRC’s environmental review, which was a critical component of the licensing process. The dissent criticized the majority for deferring to NRC’s intervention rules, which in practice give the agency broad control over who may later sue.

On the merits, the dissent agreed with the Fifth Circuit that the NRC lacks statutory authority under either the AEA or the NWPA to license private away-from-reactor facilities.

• The dissent argued that under the NWPA, interim storage is permitted only at nuclear reactor sites or federally owned facilities.

-  But this overlooks the fact that the NWPA did not repeal the NRC’s pre-existing authority under the AEA.

• The dissent argued that the NWPA explicitly said that “nothing” in that statute shall be construed to authorize or encourage private away-from-reactor storage.

-  However, the AEA’s licensing authority predated the NWPA, and the NWPA did not eliminate the authority that already existed.

• The dissent claimed that the AEA does not mention spent nuclear fuel or authorize its storage at private away-from-reactor locations.

-  But this ignores that the NWPA’s legislative history acknowledges the AEA’s authority to license such storage.

The dissent rejected the NRC’s claim of implied authority under the AEA, arguing that spent nuclear fuel is fundamentally different from “special nuclear material,” “source material” and “byproduct material,” and cannot be regulated simply as a combination of those categories. In the dissent’s view, even if the AEA once allowed such licensing, the subsequently enacted NWPA imposes clear and specific limitations that, under settled principles of statutory interpretation, take precedence. The dissent warned that accepting the NRC’s interpretation would effectively nullify those limits and allow the very type of private interim storage Congress intended to prohibit. However, the dissent fails to acknowledge that the NWPA’s restrictions apply to federal storage projects, not to private initiatives.

Although the Court’s decision bars challenges from non-intervenors, it technically leaves unresolved the core question of whether the NRC has statutory authority to license private away-from-reactor storage facilities. That issue could still be litigated in a future case brought by a properly “aggrieved party.” However, the majority’s discussion, read alongside prior circuit court decisions, provides a convincing roadmap to the outcome of such a challenge.

^{[1]   A parallel case, Fasken Land and Minerals Ltd. v. NRC, No. 23-60377 (5th Cir.), involved a challenge to the NRC’s license for a similar project, Holtec’s Interim Storage Facility in New Mexico. As in NRC v. Texas, the Fifth Circuit vacated Holtec’s the license on the grounds that the NRC lacked statutory authority to approve private away-from-reactor. Considering the Supreme Court’s holding in NRC v. Texas, this case will likely be remanded and dismissed, as the petitioners were not granted party status before the NRC.}

^{[2]  The NRC petitioned for rehearing en banc, arguing that the panel's decision conflicted with other circuit precedent and misread the relevant statutes. The Fifth Circuit denied rehearing by a 9–7 vote. The dissenting judges argued that the panel’s ruling disrupted longstanding regulatory practice and merited full court review. See Federal Respondents’ Petition for Rehearing En Banc, State of Texas v. NRC, No. 21-60743 (5thCir. Oct. 24, 2023).}