A Look at Ongoing Nuclear Litigation

As part of an ongoing spate of litigation, the U.S. Nuclear Regulatory Commission (NRC) filed a motion to dismiss, on procedural grounds, in a case that challenges its authority to require construction and operating licenses for small reactors. The NRC is hoping for dismissal before a court can hear the case's merits. Separately, a company that previously managed nuclear waste appealed a U.S. Court of Appeals for the Eighth Circuit decision to the U.S. Supreme Court dealing with the standard of care spelled out in the Price-Anderson Act. The Eighth Circuit held that state tort law and not federal dosage regulations provides the standard of care for injuries caused by radiation under the Price-Anderson Act. This Holland & Knight alert reviews these cases and other litigation surrounding nuclear energy.

State of Texas, et al. v. U.S. Nuclear Regulatory Commission

In State of Texas, et al. v. U.S. Nuclear Regulatory Commission (not to be confused with NRC v. Texas, currently pending at the Supreme Court), the states of Texas and Utah joined with a private microreactor manufacturer to sue the NRC under the Administrative Procedure Act (APA) claiming that the NRC does not have statutory authority to include small reactors, for which there are fewer safety concerns than for large reactors, within the definition of "utilization facility" under the Atomic Energy Act. Exclusion of small reactors from this definition would exempt such reactors from the NRC's rules requiring construction and operating licenses for utilization facilities but would not exempt such facilities from the NRC's material licensing requirements. Such an outcome would dramatically reduce the time and expense to construct small reactors while also reducing regulatory oversight of such facilities.

On March 17, 2025, the NRC responded by filing a motion to dismiss based on two separate procedural grounds. First, the NRC argues that the Hobbs Act is the exclusive means of review for NRC decisions and that the Hobbs Act mandates that review occur at a U.S. circuit court of appeals, not the U.S. district court where the present action was filed. Specifically, the Hobbs Act states that the court of appeals "has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of … all final orders of the [NRC] made reviewable by section 2239 of title 42." Section 2239 in turn makes reviewable any final order "in any proceeding for the issuance or modification of rules and regulations dealing with the activities of licensees." The NRC argues that the utilization facility rule is within this category of reviewable rules and regulations.

It is noteworthy that the scope of the Hobbs Act's applicability to NRC decisions is currently at issue in the Supreme Court case of NRC v. Texas, expected to be decided this summer. Though the question at issue in that case is not directly applicable to the present case, at oral argument in NRC v. Texas, some justices seemed to suggest an openness to allowing certain APA claims at district court notwithstanding the general rule of the Hobbs Act that final orders are reviewable only at courts of appeal. If the Supreme Court rules that some APA challenges may be brought at district court notwithstanding the Hobbs Act, depending on the breadth of such a holding, it could be used as evidence that district court challenges should be allowed under the present circumstances.

Next, the NRC argues that even if the district court otherwise could hear challenges to its rules, the statute of limitations under the APA is six years, and the NRC's utilization facility rule is decades old. The Supreme Court recently held in Corner Post that the six-year clock begins when a claim arises, meaning newly formed companies can challenge decades-old rules. However, the NRC argued that the challengers' claims to jurisdiction in district court in Texas, rather than in some other location, are entirely reliant on the state of Texas as a party, as the other two parties are not Texas residents. The state of Texas, the NRC argues, cannot rely on Corner Post because it existed long before the NRC's issuance of the utilization facility rule and, thus, its statute of limitations clock began running immediately upon issuance of the rule.

If the case is ultimately allowed to move forward to the merits, it will likely face a tough road to success as Congress has recently enacted provisions in the Nuclear Energy Innovation and Modernization Act of 2019 and ADVANCE Act of 2024 that direct the NRC to develop utilization facility licensing procedures specific to small reactors.

Mazzocchio v. Cotter Corp.

In Mazzocchio v. Cotter Corp., two sisters allege that they developed cancer due to exposure to radioactive material that could ultimately be traced to a failure to properly decontaminate a former holding site for nuclear waste from weapons production. The owner of the site is defending itself by arguing, among other things, that it complied with federal dosage regulations and that Congress intended for federal regulations to provide the standard of care under the nuclear liability regime of the Price-Anderson Act. The plaintiffs argue that the Price-Anderson Act does not specifically establish a standard of care and that Supreme Court precedent and other congressional actions demonstrate that state tort law provides the appropriate standard of care for nuclear injuries.

In a brief opinion, a panel of the Eighth Circuit determined that, indeed, state tort law, not federal regulations, provides the appropriate standard of care for nuclear injuries. This decision splits from every other circuit that has decided this question, including the U.S. Court of Appeal for the Third, Sixth, Seventh, Ninth and Eleventh Circuits.

On March 18, 2025, Cotter filed a petition for cert at the Supreme Court. The next step is for the Supreme Court to decide whether it will hear the case, which seems likely given the circuit split. If the Court hears the case, it will likely be heard during the next term beginning in October 2025 and be decided by summer 2026. If the Eighth Circuit opinion is upheld, it could encourage new lawsuits alleging that nuclear facilities, including commercial reactors, have caused cancer even where the facility complied with federal dosage regulations.

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