Supreme Court decides interim storage case on procedural grounds in NRC v. Texas

“Away From Reactor” storage licensing

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 licensing of spent fuel storage facilities away from nuclear reactor sites, often called Consolidated Interim Storage Facility (“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. Both facilities have generated a bevy of litigation in the Fifth Circuit, Tenth Circuit, and D.C. Circuit. Holtec International’s license application to construct the New Mexico CISF facility was challenged in the Tenth Circuit and the D.C. Circuit. In 2023 and 2024, the Tenth Circuit and D.C. Circuit both affirmed their precedent and validated the NRC’s ability to license away-from-reactor storage of spent nuclear fuel in State of New Mexico ex rel. Balderas v. NRC and Beyond Nuclear v. NRC respectively. We previously wrote about these decisions here.

Fifth circuit decision in Texas v. NRC

Interim Storage Partners (“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. 

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 case law, 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.

In its August 2023 decision, Texas v. NRC, the Fifth Circuit sided with Texas and vacated the NRC license to ISP for its CISF in Texas. It asserted that the NRC lacked the requisite statutory authority to issue licenses for private parties to store spent nuclear fuel away from the reactor site. This decision deepened the circuit split with the D.C. Circuit’s ruling in Beyond Nuclear v. NRC, and the Tenth Circuit’s 2004 decision in Skull Valley Band of Goshute Indians v. Nielson. We previously wrote about the Fifth Circuit Texas v. NRC decision and its implications here.

The majority opinion in NRC v. Texas

The Supreme Court’s decision in NRC v. Texas on June 18, 2025, was not decided on the merits of the circuit split between the Fifth Circuit and the D.C. Circuit/Tenth Circuit about whether the NRC has the requisite statutory authority to license CISFs. Rather, it found that Texas and Fasken, the respondent parties who sought review of the Commission’s licensing decision in the Fifth Circuit in Texas v. NRC, were not entitled to judicial review because they were not parties to the NRC licensing proceeding.

First, Texas and Fasken argue they qualify as parties to the NRC licensing proceeding because they submitted comments on the draft Environmental Impact Statement (“EIS”) prepared by the Commission. The Court disagreed, citing the Hobbs Act specification that only a “party aggrieved” by a licensing order of the Commission may seek judicial review of that licensing order. Participation in the licensing process through comments on an EIS does not confer the rights of a “party aggrieved.” That status is limited under the AEA to license applicants or intervenors admitted by the NRC to the licensing proceeding. Neither Texas nor Fasken can rely upon their participation in the EIS process to give them party status under the AEA such that they can challenge the licensing decision.

Next, Fasken argues that it satisfied the statutory criteria for intervention under the AEA and should have been granted intervention by the Commission. Fasken states the Commission’s regulations for intervention set a higher bar than the AEA intended. The Court finds this is the wrong setting to be arguing about the Commission’s intervention standards. In Don’t Waste Mich. v. NRC, 2023 WL 395030 (Jan. 25, 2023), Fasken challenged the Commission’s denial of Fasken’s petition to intervene in the D.C. Circuit. During that proceeding Fasken did not question the legality of the Commission’s intervention regulations, just how the regulations were applied to them. The D.C. Circuit rejected Fasken’s argument, and Fasken did not appeal. Fasken had the opportunity to seek an en banc review or appeal to the Supreme Court and failed to do either. The Court held that Fasken cannot use the proceeding in the 5^th Circuit to collaterally attack the D.C. Circuit’s prior ruling against Fasken on intervention.

Texas and Fasken alternatively argue they have standing under a narrow exception to the Hobbs Act that allows nonstatutory judicial review when the party alleges the agency exceeded its statutory authority—also known as an ultra vires action. They contend that the Commission’s issuance of a license to ISP was ultra vires because the Commission’s licensing authority does not extend to private off-site facilities for the storage of spent nuclear fuel. The Court found that this claim falls short for two reasons.

First, this is not a true ultra vires claim under the narrow exception to the Hobbs Act, but rather a typical statutory authority argument. The Court clarified that successful use of the exception is exceedingly rare, as it does not apply if an agency simply reached a legally ambiguous conclusion. Rather, it only applies when an agency has taken action in excess of its delegated powers and contrary to a specific statutory prohibition. The Court noted that the D.C. Circuit’s rejection of this statutory argument in Bullcreek v. Nuclear Regulatory Commission, whether correct or incorrect, undermines respondents’ attempts to use this Hobbs Act exception.

Second, ultra vires review is unavailable where a statutory review scheme provides aggrieved persons with an adequate opportunity for judicial review. Here, entities like Texas and Fasken are guaranteed judicial review of the Commission’s intervention denial (which Fasken pursued and lost), or, if intervention is granted, judicial review of the Commission’s final licensing order. Because Fasken already exercised its right to judicial review as a denied potential intervenor and Texas never sought to intervene, neither party has the right to judicial review of the licensing proceeding.

The majority opinion also briefly responds to the dissent’s argument on the merits of the circuit split. The Court expressed that history and precedent provide “significant support” for the NRC’s interpretation of the AEA which authorizes them to license CISFs, and points out that the dissent’s theory that the AEA does not authorize storage of spent fuel anywhere would lead to the impossible conclusion that private off-site facilities do not need a license to store spent fuel in the first place. The majority asserted that “[t]he dissent’s description of an agency that is flagrantly violating its governing statutes seems to be in substantial tension with about 50 years of consistent congressional action, agency practice, and judicial interpretation.” The Court also endorses the D.C. Circuit court’s reasoning in Bullcreek v. Nuclear Regulatory Commission that the Nuclear Waste Policy Act of 1982 (“NWPA”) preserves pre-existing law on licensing of private off-site facilities, rather than withdraws the Commission’s ability to do so under the AEA.

Dissenting opinion in NRC v. Texas

Justice Gorsuch, joined by Justices Thomas and Alito, authored the dissenting opinion. The Dissent argues that Texas and Fasken qualify as “aggrieved” parties because they participated actively in aspects of the NRC licensing proceeding, specifically by providing extensive comments to the Commission’s EIS. The dissenting opinion points to the fact that lower courts have long held that participating in commenting qualifies an individual as a “party” for purposes of the Hobbs Act. The Dissent also points to the fact that allowing an agency to determine who can intervene and then only allowing intervenors to challenge the resulting agency action creates a “fox watching the henhouse” situation. As such, it argues that the Majority should have reached the merits of the case.

On the merits, the dissenting opinion sides with Texas and Fasken, arguing that the law does not permit the NRC to license CISFs. Justice Gorsuch discusses how the NRC’s licensing scheme runs afoul of the NWPA, which authorized the storage of spent nuclear fuel only at reactor sites or on federal property, and specifically prohibits authorizing storage at any other location. The Dissent claims that nothing in the AEA authorizes the NRC to license CISFs, or regulate spent fuel at all, which is why Congress had to enact the NWPA.

Conclusion

To conclude, the Court ruled on the issue of standing to deny review to Fasken and Texas, but expressed its strong support in dicta for the NRC having authority to license CISFs under the AEA. The Dissent argued that Fasken and Texas, as participants through commenting on the NRC licensing proceeding, had standing as parties to seek judicial review on the licensing decision. On the merits, the Dissent also sided with Fasken and Texas in its views that the NRC lacks the authority under the AEA and NWPA to license CISFs.

Authored by Daniel Stenger, Valerie Marshall, Amy Roma and Stewart Forbes.

The authors acknowledge the contribution of summer associate Emma Donahue to preparing this alert.