ELR Citation: ELR 20499
No(s). s. 93-1646 et al (6th Cir. Jan 11, 1995)

The court holds that the Nuclear Regulatory Commission's (NRC's) addition of a spent-fuel storage cask to its list of approved storage systems via a generic rulemaking did not violate the Atomic Energy Act (AEA), the National Environmental Policy Act (NEPA), or the Nuclear Waste Policy Act (NWPA), and that those challenging the NRC's actions were not entitled to an adjudicatory hearing concerning use of the casks at the Palisades nuclear power plant on the eastern shore of Lake Michigan. The court first holds that petitioner neighboring landowners have standing to sue. Language in their brief suggesting that the court need not reverse the district court's dismissal of their action does not evidence abandonment of their claim, but indicates that they believe they have alternate grounds on which this court could rule. The court next holds that the landowners' actions seeking injunctions to prevent the generic rule from becoming final and to prohibit the plant owner from loading spent fuel into the casks until the NRC performs a site-specific environmental analysis are not moot, even though the generic rule is already final and the plant owner has already loaded two casks. Petitioners allege violation of their procedural rights, and passage of the final rule does not eliminate the issue of whether the NRC improperly took steps to promulgate and implement it. Moreover, the likely remedy would include exactly the injunctive relief the landowners seek, the landowners' claims may be conceived of as continuing harms, and it is not absolutely clear there is no reasonable expectation that the wrong will be repeated. The court holds that the landowners have alleged sufficient injury to establish standing. They are clearly asserting a threatened injury to their aesthetic interests, physical health, and property value from storage of spent nuclear fuel in the casks, and this injury can be fairly traced to the NRC's actions. Also, a decision in the landowners' favor could redress the threatened harm by reversing the effectiveness of the generic rule. The court holds that because the landowners have standing, it need not address whether the remaining petitioners have standing.

The court next holds that the NRC's denial of petitioners' request for an adjudicatory hearing on the storage of nuclear waste in the casks at the plant was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law. Although AEA §189 and NWPA §134 both provide for hearings regarding changes to licensees' activities, they do not prescribe the hearings' content or how they are to be conducted. Courts have recognized that where an agency's enabling statute expressly requires it to hold a hearing, the agency may rely on its rulemaking authority to determine issues that do not require case-by-case consideration. Furthermore, courts are obliged to defer to the operating procedures an agency employs when the governing statute requires only that the agency hold a hearing. And although NEPA requires the NRC to undertake careful consideration of environmental consequences, the NRC may issue a rulemaking to address and evaluate environmental impacts that are generic—that is, not plant-specific or site-specific. The court holds that petitioners' assertion that the NRC attempted to shut them out of meaningful participation regarding use of the casks is meritless. The public had an extensive opportunity to comment on the proposed amendment of the list and the casks' suitability for dry storage of spent nuclear fuels, including two public comment periods and a three-hour public meeting. The court holds that nothing in the applicable statutes or relevant case law compels the NRC to hold a formal adjudicatory hearing. The court further holds that NRC's approval of the design of containers for the dry storage of spent nuclear fuel is exactly the type of NRC decision that may be the subject of generic rulemaking, because it does not require case-by-case consideration. The certificate of compliance for the casks contains an extensive list of conditions for its use, which will virtually eliminate the need for site-specific consideration. The court holds that the NRC's grant of an exemption to allow the casks' manufacturer to begin constructing them before the NRC issued the certificate of compliance does not trigger a right to an adjudicatory hearing. The plant operator did not begin to load or use the casks until after the NRC issued the certificate, and petitioners have pointed to no facts indicating that the casks currently in use do not comply with the certificate's conditions for use.

The court next turns to petitioners' assertion that the NRC and the plant operator worked together to make several site-specific decisions regarding use of the cask at the plant without granting the public the right to express concerns about the issues involved. The court holds that AEA §189(a) does not automatically entitle petitioners to a hearing regarding these decisions. The right to automatic participation applies only when the agency acts on matters generally concerned with the licensing process, and no licensing decision was involved here. The court holds that the record does not support the petitioners' suggestion that the NRC blindly listens to the "self-serving" assertions of licensees through its policy of requiring licensees to review their own operations to determine whether their licenses need amending. The court holds that the NRC did not improperly accept in the generic rule and comments the plant operator's evaluation of references to practices and conditions at the plant. The public had an opportunity to be heard on those issues when the NRC first considered the proposed rule and was aware of the factors the NRC would be taking into consideration in issuing the certificate of compliance for the cask. The court holds that the NRC did not shirk its responsibility under the AEA to assure that no actions detrimental to public health and safety are taken when it accepted the plant owner's technical and safety reviews without making site-specific determinations. The court also holds that no grounds exist for petitioners' claim that unreviewed issues persist as to which members of the public were denied the right to be heard. The court also holds that petitioners failed to demonstrate that the NRC would not have granted the cask manufacturer the exemption to begin construction if another utility been first in line to use the casks. The court further holds that the NRC's approval of revised security and emergency plans for the plant does not require public participation, because the NRC did not amend the plant's operating license.

The court next addresses petitioners' claims that the NRC violated its obligations under NEPA by failing to conduct a site-specific environmental analysis concerning the use and operation of the casks at the plant. The court holds that the NRC's reliance on the environmental assessment (EA) for the generic rule, as well as its finding that an environmental impact statement was not required for the list addition, was not arbitrary, capricious, or an abuse of discretion. The NRC considered numerous effects in its EA and noted that any alternative would have similar environmental impacts. The NRC also previously evaluated the impacts of storing spent fuel onsite in a regulatory waste confidence decision, and tiered the EA to the numerous prior environmental reviews it had conducted regarding the issue of on-site storage of spent nuclear fuel. Further, the NRC's predecessor agency fully considered the environmental impacts of the construction and operation of the plant when it licensed the plant for operation. Thus, the court holds that it was appropriate for the NRC to tier its environmental analysis at the time it added the cask to the list of approved casks. The court holds that petitioners have not identified any factor unique to the plant that required a site-specific analysis before the NRC could add the cask to the list of approved casks. The court also holds that the NRC adequately considered alternatives to the dry storage of spent fuel in the casks at the plant, and defers to the agency's finding that alternative storage technologies have been neither sufficiently demonstrated nor practicable for use under a general license provision. Thus, the court holds that in its EA for the generic rule, the NRC took a hard look at the environmental consequences of its action, as NEPA requires. Therefore, the NRC's failure to prepare a site-specific environmental analysis concerning the use and operation of the casks at the plant did not violate NEPA.

Counsel for Petitioners
Frank J. Kelley, Attorney General
Attorney General's Office
1890 Michigan Plaza
1200 6th St., Detroit MI 48226
(313) 256-2557

Counsel for Respondents
Robert L. Graham
Jenner & Block
One IBM Plaza, Chicago IL 60611
(312) 222-9350

Before: MILBURN, BOGGS, and NORRIS, Circuit Judges.