F. CLARK HUFFMAN, ET AL., PETITIONERS V. WESTERN NUCLEAR, ET AL.

   No. 87-645

   In the Supreme Court of the United States

   October Term, 1987

   The Solicitor General, on behalf of the Department of Energy, the
Secretary of Energy, and officers and employees of the Department of
Energy sued in their official capacities, petitions for a writ of
certiorari to review the judgment of the United States Court of
Appeals for the Tenth Circuit in this case.

   Petition for a Writ of Certiorari to the United States Court of
Appeals for the Tenth Circuit

                       PARTIES TO THE PROCEEDING

   The petitioners are John S. Herrington, the Secretary of Energy,
and F. Clark Huffman, Sherry E. Peske, Philip G. Sewell, James W.
Vaughn and Joseph F. Salgado, all of whom are officers or employees of
the Department of Energy sued in their official capacities, and the
United States Department of Energy.

   The respondents are Western Nuclear, Inc., Energy Fuels, Inc., and
Uranium Resources, Inc.

            TABLE OF CONTENTS
   Question Presented
   Parties to the Proceeding
   Opinions below
   Jurisdiction
   Statutory provision involved
   Statement
   Reasons for granting the petition
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (App., infra, 1a-21a) is
reported at 825 F.2d 1430.  The order of the district court (App.,
infra, 22a-24a) is unreported.

                             JURISDICTION

   The decision of the court of appeals (App., infra, 1a) was entered
on July 20, 1987.  The jurisdiction of this Court is invoked under 28
U.S.C. 1254(l).

                     STATUTORY PROVISION INVOLVED

   Section 161(v) of the Atomic Energy Act of 1954 (42 U.S.C. 2201(v))
provides:

         Contracts for production or enrichment of special nuclear
      material;  domestic licensees;  other nations;  prices;
      materials of foreign origin;  criteria for availability of
      services under this subsection;  Congressional review

   (In the performance of its function the Commission is authorized
   to)

         (A) enter into contracts with persons licensed under Section
      2073, 2093, 2133 or 2134 of this title for such periods of time
      as the Commission may deem necessary or desirable to provide,
      after December 31, 1968, for the producing or enriching of
      special nuclear material in facilities owned by the Commission;
      and

         (B) enter into contracts to provide, after December 31, 1968,
      for the producing or enriching of special nuclear material in
      facilities owned by the Commission in accordance with and within
      the period of an agreement for cooperation arranged pursuant to
      Section 2153 of this title while comparable services are made
      available pursuant to paragraph (A) of this subsection:

         Provided, That (i) prices for services under paragraph (A) of
      this subsection shall be established on a nondiscriminatory
      basis;  (ii) prices for services under paragraph (B) of this
      subsection shall be no less than prices under paragraph (A) of
      this subsection;  and (iii) any prices established under this
      subsection shall be on a basis of recovery of the Government's
      costs over a reasonable period of time:  And provided further,
      That the Commission, to the extent necessary to assure the
      maintenance of a viable domestic uranium industry, shall not
      offer such services for source or special nuclear materials of
      foreign origin intended for use in a utilization facility within
      or under the jurisdiction of the United States.  The Commission
      shall establish criteria in writing setting forth the terms and
      conditions under which services provided under this subsection
      shall be made available including the extent to which such
      services will be made available for source or special nuclear
      material of foreign origin intended for use in a utilization
      facility within or under the jurisdiction of the United States:
      Provided, That before the Commission establishes such criteria,
      the proposed criteria shall be submitted to the Joint Committee,
      and a period of forty-five days shall elapse while Congress is
      in session (in computing the forty-five days there shall be
      excluded the days in which either House is not in session
      because of adjournment for more than three days) unless the
      Joint Committee by resolution in writing waives the conditions
      of, all or any portion of, such forty-five-day period.

                          QUESTION PRESENTED

   Under Section 161(v) of the Atomic Energy Act of 1954 (42 U.S.C.
2201(v)), the Department of Energy (DOE) sells uranium enrichment
services to electric utilities that need enriched uranium as reactor
fuel.  Section 2201(v) provides that DOE shall restrict its enrichment
of foreign-sources uranium for domestic uses "to the extent necessary
to assure the maintenance of a viable domestic uranium industry." The
Department of Energy has determined that the domestic uranium industry
is not viable and that the imposition of restrictions on the
enrichment of foreign uranium would not make it viable.

   The question is whether Section 2201(v) requires the Department of
Energy to restrict enrichment of foreign uranium whenever the domestic
uranium is not viable, whether or not the imposition of such
restrictions would make the domestic industry viable.

                               STATEMENT

   This case presents a question of statutory interpretation of great
practical importance.  Section 161v of the Atomic Energy Act of 1954,
42 U.S.C. 2201(v) (Section 2201(v)), requires the Department of Energy
(DOE) to restrict its provision of enrichment services for foreign
uranium "to the extent necessary to assure the maintenance of a viable
domestic uranium industry." The Secretary has determined that the
domestic uranium industry is not viable, and that there is no level of
reduced enrichment services for foreign uranium that would make it
viable.  Consequently, the Secretary has interpreted Section 2201(v)
as not requiring -- or authorizing -- any restriction on enrichment of
foreign uranium.  The lower courts disagreed, holding that once the
Secretary finds that the domestic uranium industry is not viable, he
must automatically terminate the provision of all enrichment services
to foreign uranium, even if this will do nothing to revive the
domestic industry.

   1. a. The principal civilian use of uranium is as fuel for nuclear
reactors operated by electric utilities.  Because natural uranium does
not contain enough of the highly fissionable isotope U-235 to serve as
reactor fuel, it must undergo a process known as enrichment.  The
enrichment process for commercial reactor fuel increases uranium's
U-235 content from approximately 1% to approximately 3%.  App., infra,
4a.

   Under the Atomic Energy Act of 1954 (ch. 1073, Section 158, 68
Stat. 948 (42 U.S.C. 2188)) as originally adopted, the Atomic Energy
Commission (AEC) was given a monopoly over the ownership of special
nuclear materials, including enriched uranium.  /1/ Utilities
operating commercial reactors thus were required to lease their fuel
from the AEC.  App., infra, 3a.  In 1964, Congress eliminated this
government monopoly on ownership of nuclear fuel.  The Private
Ownership of Special Nuclear Materials Act (the Private Ownership Act)
(Pub. L. No. 88-489, 78 Stat. 602) authorized non-governmental persons
to own reactor fuel, subject to strict licensing requirements and
regulatory controls.  The Private Ownership Act did not, however,
eliminate the government's de facto monopoly in the provision of
enrichment services (Section 16, 78 Stat. 606;  see S. Rep. 1325, 88th
Cong., 2d Sess. 2 (1966) (hereinafter Private Ownership Act Report)).
Within the United States, the provision of enrichment services remains
exclusively in the hands of the federal government (App., infra, 4a).

   When the Private Ownership Act was passed, imports of uranium were
insignificant.  But both the AEC and the Joint Committee on Atomic
Energy were concerned that imports might someday displace the domestic
uranium industry, and that this could have a detrimental effect on the
nation's energy and national security needs (Private Ownership Act
Report 30).  Accordingly, the Private Ownership Act included a proviso
requiring the AEC to restrict enrichment of foreign-source uranium "to
the extent necessary to assure the maintenance of a viable domestic
uranium industry" (42 U.S.C. 2201(v)).

   No foreign uranium was enriched for domestic use in the early years
of the AEC's enrichment services program (see 31 Fed. Reg. 16479
(1966) (initial criteria providing that foreign-source uranium would
not be enriched for domestic use)).  However, during the 1970's, the
AEC studied the advisibility of phasing out these restrictions.  In
1974, after soliciting comments on such a proposal (38 Fed. Reg. 32595
(1973)), the AEC amended its enrichment services criteria by
establishing a schedule under which by 1984 all restrictions on
enriching imported uranium would be eliminated (39 Fed. Reg. 38016
(1974)).  The criteria permitting the enrichment of foreign uranium
were reported to Congress pursuant to Section 2201(v) and Congress
took no adverse action.  The scheduled phase-out of restrictions took
place as planned, and DOE has not since reimposed any restrictions on
enrichment of foreign uranium.  /2/

   b. In the later 1970's and early 1980's, the position of the
domestic uranium industry deteriorated rapidly and dramatically (App.,
infra, 5a).  As one report put it, the industry suffered "a collapse
that by industrial standards occurred practically overnight"
(Blundell, U.S. Uranium Mines, Thriving 5 Years Ago, Are Nearing
Extinction, Wall St. J., June 12, 1985, at 1).  The main cause of this
development was "a classic oversupply situation," brought about by a
combination of excess capacity and reduced demand (Status of the
Domestic Uranium Mining and Milling Industry:  The Effects of Imports:
 Hearing Before the Subcomm. on Energy Research and Development of the
Senate Comm. on Energy and Natural Resources, 97th Cong., 1st Sess. 15
(1981) (statement of Shelby Brewer, Assistant Secretary of Energy for
Nuclear Energy) (hereinafter 1981 Hearing).  On the one hand,
exploration and other investment increased significantly in the
1970's, in response to optimistic projections of future demand (id. at
19-20 (charts 2, 3, 4, showing peak and decline of exploration,
employment, and capital expenditures)).  But just as supply was
increasing, developments threatening the economic feasibility of
nuclear power generation, followed by heightened concerns over reactor
safety triggered by the Three Mile Island incident, led to a wave of
"reactor delays and cancellations, and (a) lack of new reactor orders"
(id. at 12).

   The result was a precipitous decline in the price of uranium ore.
In 1981, the Edison Electric Institute, a utility trade association,
reported that the spot market price of uranium had declined from
$43.25 per pound in 1979 to 23.50 per pound (1981 Hearing 148
(statement of Edison Electric Institute)).  By 1984, the spot market
price had fallen to $15.50 per pound, which the industry informed DOE
was less than one-half the conventional United States producer's
average cost of production (51 Fed. Reg. 27132, 27136 n.12 (1986)).
The spot market price has not recovered appreciably since then.  /3/

   Two other important developments contributed to the decline of the
domestic uranium industry during this period.  First, the United
States lost its monopoly as the only provider of enrichment services
for commercial nuclear reactors.  Beginning in the mid-1970's, two
european consortia and the Soviet Union began to supply foreign
nuclear facilities with enriched uranium, produced largely from
foreign-source ore (51 Fed. Reg. 3624, 3625, 3627 (1986)).  By the
1980's, enriched uranium from foreign sources also was being imported
into the United States, reaching a level of 4.9% of total requirements
in 1984 (Energy Info. Admin., Dep't of Energy, Domestic Uranium Mining
and Milling Industry:  1985 Viability Assessment xii (1986)
(hereinafter 1985 Viability Assessment).  Indeed, DOE suddenly found
that it had become the highest priced supplier of enrichment services
for commercial reactors, charging $138 per separative work unit (SWU)
/4/ in 1984, whereas its foreign competitors were charging $105-$115
per SWU (51 Fed. Reg. 3625 & n.2 (1986)).  "As a result, DOE's foreign
competitors * * * captured about 60 percent of the total foreign
market and * * * made significant inroads into the domestic markets"
(id. at 3625).

   Second, as part of the same imbalance of supply and demand that
crippled the domestic uranium industry, many utilities found
themselves committed to long-term contracts to purchase enrichment
services that they no longer needed.  DOE has estimated that these
commitments gave rise to a surplus of enriched uranium amounting to
about 39 million SWU's by 1984.  This in turn "led to the emergence of
a secondary market in which utlities have been willing to sell their
surplus SWU's to other utilities at discounts of $30 per SWU and more"
(51 Fed. Reg. 3625 (1986)).

   DOE sought to deal with the crisis in the domestic uranium industry
in different ways.  In an effort to stimulate demand, the Department
continued to promote the expanded use of commercial nuclear energy
(see 1981 Hearing 12-13).  And in an attempt to minimize the market's
perception of oversupply, DOE stated that it would not draw down or
sell off the considerable stockpile of uranium under its control
(e.g., id. at 13).  But the Department has no statutory authority to
regulate either the importation of enriched uranium, or the secondary
market in enriched uranium.  Both of these sources, which offer direct
competitive substitutes for the product of the domestic uranium
industry, are subject to the exclusive oversight of the Nuclear
Regulatory Commission (NRC).  /5/ The only other regulatory tool
available to DOE is Section 2201(v), but the Department has
consistently concluded that any effort to restrict the provision of
enrichment services to foreign uranium would be at best futile, and at
worst counterproductive.  (See pages 8-12, infra.).

   c. In 1981 Congress conducted hearings on the problems of the
domestic uranium industry (see 1981 Hearing).  DOE's representative
testified that "(a)lthough there have been cutbacks in exploration and
production and thus in employment, foreign uranium, we feel, has not
been the central cause of this problem" (id. at 12).  Indeed, imports
at that time were not a major factor in the market, accounting for
only 10% of deliveries in 1980 (id. at 16).  /6/ Assistant Secretary
Brewer therefore testified that DOE did not believe there was any need
to change the planned phase-out of enrichment restrictions the AEC had
adopted in 1974 (id. at 18).

   In 1982, Congress again dealt with the issue of uranium imports,
this time while considering the reauthorization of the Nuclear
Regulatory Commission.  Significantly, Congress rejected a proposal
that would have required DOE, when uranium imports reached a level of
37.5%, to revise its enrichment criteria "so as to encourage the use
of domestic origin uranium in domestic nuclear powerplants" (128 Cong.
Rec. S13054 (daily ed. Oct. 1, 1982)).  Instead, Congress enacted a
new measure, codified at 42 U.S.C. 2210b, that set forth a series of
reporting requirements to ensure that Congress could monitor the
condition of the domestic industry, and that already-existing trade
and national security statutes would be enforced with respect to
uranium imports.  Specifically, Section 2210b required the Secretary
to promulgate criteria for assessing the viability of the domestic
uranium industry, set forth eight statutory criteria that the
Secretary was to consider in making such a determination, /7/ and
directed the Secretary to submit annual reports on the viability of
the domestic uranium industry to both the President and the Congress.

   Pursuant to Section 2210b, the Secretary issued criteria for
determining the viability of the domestic uranium industry (10 C.F.R.
Pt. 761).  Elaborating on the factors specified by Congress, the
Secretary defined viability primarily in terms of "the extent to which
the domestic mining and milling uranium industry will be capable, at
any particular time, of supplying the needs of the domestic nuclear
power industry under a variety of hypothetical conditions" (48 Fed.
Reg. 45747 (1983)).  Although the financial condition of the domestic
uranium industry was one criterion to be examined, the Secretary made
it clear that this was not the end of the inquiry.  Instead, the focus
was on the capacity of the domestic industry to supply domestic
generating facilities in the event of various future contingencies,
such as an interruption of imports.  See 1985 Viability Assessment at
x, 55-62 (evaluation of likely effects of supply interruptions).

   In December 1984, the Secretary made his first viability finding
pursuant to Section 2210b and the DOE criteria.  The Secretary
concluded that the domestic industry had been viable in 1983.  In
September 1985, however, he determined that in 1984 the industry was
not viable.  See 1985 Viability Assessment at ix.  In December 1986,
the Secretary found that the domestic industry was not viable in 1985.

   d. Four months after the Secretary's initial determination that the
domestic uranium industry was not viable, the Secretary initiated a
rulemaking to revise the criteria under which enrichment services are
offered (see 10 C.F.R. Pt. 762).  The notice of proposed rulemaking
specifically addressed the question whether the depressed condition of
the domestic industry required the Secretary to impose restrictions on
the enrichment of foreign-source uranium under Section 2201(v) (51
Fed. Reg. 3624 (1986) (initiation of rulemaking)).  The notice
indicated that the Secretary proposed not to restrict the enrichment
of foreign uranium, because he believed that "(i)mport restrictions on
foreign uranium would not assure the viability of the domestic mining
and milling industry" (id. at 3627).

   After extensive comment, the Secretary adopted final revised
criteria that did not restrict enrichment of foreign uranium (51 Fed.
Reg. 27132 (1986)).  The explanation of that decision addressed both
the legal issue in this case, which had been raised by comments from
the domestic uranium industry, and the question whether restrictions
on the enrichment of foreign uranium would in fact assure the
viability of the domestic uranium industry.  The Secretary adhered to
the legal view that "(t)he plain language of the statute makes clear
that restrictions are not to be imposed automatically if the domestic
industry is non-viable, but only if they are needed to, and in fact,
will assure the maintenance of a viable domestic uranium industry"
(id. at 27134).

   On the factual question, the Secretary concluded that "restrictions
would (not) assure the viability of the domestic mining and milling
industry" (51 Fed. Reg. 27135 (1986)).  The Secretary again found that
the domestic industry's difficulties arose from "structural
weaknesses," chiefly the collapse in demand that had led to a
situation in which "the market simply will not sustain a price for
(uranium) that enables the industry to recover its costs of
production" (ibid.).  Restrictions on enrichment would do nothing to
address those basic difficulties (ibid.).  Moreover, the Secretary
determined that restrictions on enrichment would not protect domestic
producers from foreign competition because of DOE's lack of market
power in the market for enrichment services:  "(w)hile DOE is the only
provider of uranium enrichment services in the United States, DOE
nonetheless lacks 'market power' because enrichment services are
available, at comparable or lower costs, from foreign sources" (ibid.)

   Having found that imposition of restrictions on enrichment would
not assure the viability of the domestic uranium industry, the
Secretary went on to examine the likely effects of such restrictions.
He concluded that "restricting DOE's ability to enrich foreign uranium
is likely to be counterproductive and to further damage the U.S.
mining industry" (51 Fed. Reg. 27136 (1986)).  Accordingly, the
Secretary adopted final revisions to the enrichment criteria that do
not restrict enrichment of foreign uranium.

   2. a. Respondents, three domestic uranium mining and milling
companies, brought this lawsuit in the United States District Court
for the District of Colorado on December 7, 1984.  The complaint
challenged a number of DOE policies and alleged practices.  At issue
in this petition is Count I, /8/ which claimed that DOE's failure to
impose restrictions on the enrichment of foreign uranium is unlawful.
In their summary judgment motion, respondents alleged that the only
material facts were that the domestic industry is not viable and that
DOE had not imposed restrictions on enrichment of foreign uranium.  On
those facts, respondents claimed that they were entitled to judgment
as a matter of law.  Respondents' Motion for Summary Judgment as to
Count I.  Initially, respondents asked the district court to order DOE
to undertake a rulemaking to determine the appropriate level of
restrictions.  Later, however, they asked the district court to issue
an order imposing its own restriction levels.  Petitioners submitted a
cross-motion for summary judgment.  /9/

   On June 5, 1986, the district court granted respondents' motion for
summary judgment.  In an oral explanation of its decision to grant
respondents summary judgment on Count I, the court offered the view
that Section 2201(v) requires the imposition of restrictions whenever
the domestic industry is not viable, regardless of whether such
restrictions would restore the viability of the industry:  "To me (the
statute) says that the agency * * * shall not offer (enrichment)
services for source or special nuclear materials of foreign origin --
period" (App., infra, 25a).  The district court entered an order
requiring DOE to limit its enrichment of foreign uranium to 25% of all
materials enriched between June 6, 1986 and December 31, 1986, and
imposing a total ban on enrichment of foreign uranium beginning
January 1, 1987 (id. at 23a).  The court further ordered DOE to
commence a rulemaking to establish criteria for providing enrichment
services that would "assure the maintenance of a viable domestic
uranium industry" (ibid.).  /10/

   b. Petitioners appealed to the United States Court of Appeals for
the Tenth Circuit, and at the same time asked the district court for a
stay of its order.  When the district court did not act on that
request, petitioners moved for a stay from the court of appeals, which
was granted on July 21, 1986.  /11/

   On July 20, 1987, the court of appeals issued its decision,
affirming the district court's grant of summary judgment on this issue
(App., infra, 1a-21a).  /12/ The court of appeals noted that the
parties agreed that the domestic uranium industry is not now viable
(id. at 14a).  Treating the issue under Section 2201(v) as one of
statutory construction, the court rejected the Secretary's argument
that the phrase "to the extent necessary to assure the maintenance of
a viable domestic uranium industry" means that restrictions need not
be imposed when they will not assure the maintenance of a viable
domestic industry.  Instead, the court found that the statute
"instructs that when domestic nonviability is determined, restrictions
on enrichment of foreign-source uranium must be imposed and become
increasingly aggressive, to the point of 100% restriction, until the
domestic industry is rejuvenated and becomes viable" (App., infra,
17a).  According to the Tenth Circuit, Section 2201(v) "does not
provide that increasingly stiffer restrictions are required only to
the point that DOE determines that such restrictions will not
resuscitate the industry" (App., infra, 17a-18a).  At petitioners'
request, the Tenth Circuit has issued a stay of its mandate that will
continue until this petition is disposed of.

                   REASONS FOR GRANTING THE PETITION

   The decision below is seriously flawed.  It violates the clear
meaning of Section 2201(v), conflicts with controlling authority of
this Court concerning agency interpretations of statutes, rests on
factual premises which directly contradict the findings of the
Secretary of Energy, and threatens grave injury to the interests of
the United States.  Although the decision below is not in conflict
with any other decision, it is highly unlikely that a conflict will
develop, given that the district court's order in effect subjects DOE
to a nationwide injunction prohibiting it from enriching
foreign-source uranium for use in domestic commercial reactors.  /13/
Petitioners therefore submit that review by this Court is warranted.

   1. a. Section 2201(v) directs DOE to restrict enrichment of foreign
uranium in one circumstance and one circumstance only:  when it is
"necessary to assure the maintenance of a viable domestic uranium
industry." The statute does not command, or indeed permit, the
imposition of restrictions under any other set of circumstances.

   The statute thus prescribes different responses on the part of the
Secretary, depending on the underlying conditions in the uranium
market.  If the domestic industry is viable, but enrichment of
foreign-source uranium might threaten its continued viability, then
the Secretary is directed to impose restrictions on the enrichment of
foreign uranium.  Or, if the domestic industry is not viable, but
restrictions on the enrichment of foreign uranium would restore it to
viability, then the Secretary is also required to impose such
restrictions.  On the other hand, if the domestic industry is viable,
and no restrictions on enrichment of foreign-source uranium are
necessary to assure its continued viability, then the statute does not
authorize the Secretary to restrict enrichment of foreign-source
uranium.  Similarly, if the industry is not viable, and no degree of
restrictions on enrichment of foreign uranium would make it viable,
then the statute again does not authorize the Secretary to impose
restrictions on the enrichment of foreign uranium.

   The Secretary has determined that the domestic uranium industry is
not viable, and that no degree of restriction of enrichment services
will render it viable (51 Fed. Reg. 27135 (1986)).  Consequently, the
condition precedent for imposing restrictions on the enrichment of
foreign-source uranium -- a finding that such restrictions are
"necessary to assure the maintenance of a viable domestic industry" --
is not satisfied, and the statute, by its own terms, simply does not
apply.

   The court of appeals rejected the Secretary's interpretation of the
statute, purporting to find it inconsistent with the "unambiguous"
language of Congress (App., infra, 17a).  According to that court, the
statute's use of the mandatory word "shall" indicates that the
Secretary must impose restrictions on enrichment of foreign uranium
whenever the domestic industry is not viable.  In the court's view,
the qualifying phrase, "to the extent necessary to assure the
maintenance of a viable domestic uranium industry," simply "informs
the DOE of the amount of restriction require;  it does not provide a
scenario in which the DOE is excused from restricting foreign
enrichment notwithstanding a nonviable domestic industry" (ibid.
(emphasis in original)).

   The court of appeals did not enforce the unambiguous language of
Section 2201(v).  It rewrote the statute.  The statute sets forth one
and only one condition triggering the Secretary's duty to restrict
enrichment of foreign uranium:  a finding that such a restriction is
necessary to "assure the maintenance of a viable domestic uranium
industry." Under the court of appeals' interpretation, however, the
statute contains in effect two conditions triggering the requirement
to restrict enrichment services.  As the lower court construed the
statute, the Secretary must impose restrictions on the enrichment of
foreign uranium either when it is necessary to assure the maintenance
of a viable domestic uranium industry, or when the domestic uranium
industry is not viable.  The statute, however, contains only one
condition;  to construe the statute as imposing some other condition
is to engage not in interpretation but in judicial amendment.

   The legislative history supports this conclusion.  There is no
suggestion in that history that Congress thought it was creating a
mechanical rule that would require the Secretary to impose a "100%
restriction" under certain circumstances.  The statute directs the
Secretary to limit the enrichment of foreign uranium "to the extent
necessary" to assure the viability of domestic producers -- language
that suggests the exercise of discretion.  The Joint Committee, in
explaining the new provision, described it as a "flexible restriction"
that would allow the agency "to survey periodically the condition of
the domestic and world uranium market and to offer * * * enrichment
services on a basis which will assure, in its opinion, the maintenance
of a viable domestic uranium industry" (Private Ownership Act Report
31 (emphasis supplied)).  This clearly suggests that Section 2201(v)
was thought of as a standard calling for the exercise of judgment by
the Secretary, not as an automatic cutoff that would apply regardless
of the Secretary's findings about underlying market conditions.

   Under the court of appeals' construction, however, once the
Secretary finds the domestic industry is not viable, "restrictions on
enrichment of foreign-source uranium must be imposed and must become
increasingly aggressive, to the point of 100% restriction" (App.,
infra, 17a).  This mechanical rule finds no support in the legislative
history, and ignores the usual relationship between Congress and the
Executive, in which expert agencies apply congressional policy to
changing facts (see, e.g., United States v. Shimer, 367 U.S. 374, 382
(1961)).

   Indeed, the construction imposed by the court of appeals leads to
absurd results.  If, for example, the Secretary had found that the
domestic uranium industry was not viable because all American uranium
reserves had been exhausted, the interpretation adopted by the court
of appeals would nevertheless require DOE to cease all enrichment of
foreign uranium.  But if there were no domestic uranium to enrich, and
DOE was barred from enriching foreign uranium, then DOE would have no
choice but to close its doors.  Presumably, the fuel needs of American
nuclear power plants would then have to be satisfied by importing
foreign uranium enriched elsewhere -- in Europe or the Soviet Union --
while DOE's enrichment facilities stood idle.

   b. The text and legislative history of Section 2201(v) compel the
conclusion reached by DOE:  restrictions are required only when they
would assure the maintenance of a viable domestic uranium industry.
If there were any difficulty in the interpretation of Section 2201(v),
however, the court of appeals should have deferred to the considered
views of the Secretary rather than simply imposing its own preferred
reading.  As this Court has explained, "if the statute is silent or
ambiguous with respect to the specific issue, the question for the
court is whether the agency's answer is based on a permissible
construction of the statute" (Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837, 843 (1984) (footnote omitted)).

   In this respect, the case is controlled by Young v. Community
Nutrition Institute, No. 85-664 (June 17, 1986).  There, the FDA's
decision not to promulgate regulations limiting the quantity of a
certain carcinogen present in foods was challenged.  The FDA's
statutory mandate, drawn in words that parallel the language of
Section 2201(v), stated that the Administrator "shall promulgate
regulations limiting the quantity (of such substances) to such extent
as he finds necessary for the protection of public health." Like the
lower courts here, the respondents in Young "view(ed) the word 'shall'
as unqualified," and argued that the phrase "to such extent as he
finds necessary" gave the agency "discretion in setting the particular
tolerance level, but not in deciding whether to set a tolerance level
at all" (slip on. 5).  Rejecting that argument, this Court deferred to
the FDA's interpretation of the statute, which was "that the phrase
'to such extent as he finds necessary for the protection of public
health' * * * modifies the word 'shall'" (ibid.).  This agency
construction, the Court held, was "sufficiently rational to preclude a
court from substituting its judgment for that of the FDA" (id. at 7).

   The decision below cannot be squared with this Court's holding in
Young.  In Young, the Court found that "the phrasing" of the statute
at issue was "ambiguous" because the decisive "appositive phrase" --
"to such extent as he finds necessary" -- was "free-floating" (slip
op. 6).  In Section 2201(v), however, the phrase "to the extent
necessary to assure the maintenance of a viable domestic uranium
industry" appears as a prefix to the word "shall," and is clearly the
condition precedent of the statutory obligation.  Moreover, in Young
either of the two competing constructions could have been adopted
without "endors(ing) an absurd result" whereas, here, the operation of
Section 2201(v) would only be "sensible" if DOE's interpretation is
upheld (slip op. 7).  Finally, the legislative history of the statute
at issue in Young "provide(d) no single view" about the nature of the
decision that was delegated to the agency (ibid.).  In contrast, the
legislative history of Section 2201(v) strongly supports the
construction that DOE has given to the statutory provision.
Accordingly, this Court's disposition of the much closer question in
Young necessarily requires deference to DOE's construction of Section
2201(v).  /14/

   2. The court of appeals appears to have disagreed with the
Secretary's interpretation of Section 2201(v) in part because it
implicitly disagreed with -- or simply ignored -- the Secretary's
findings about the state of the domestic uranium industry.  The court
found that Section 2201(v) "instructs that when domestic nonviability
is determined, restrictions on enrichment of foreign-source uranium
must be imposed * * * until the domestic industry is rejuvenated and
becomes viable" (App., infra, 17a (emphasis supplied)).  This clearly
implies that restrictions on the enrichment of foreign uranium under
present market conditions would revive the domestic industry -- which
is exactly contrary to what the Secretary found.  Later, the court
opined that "DOE cannot accomplish its statutory purpose -- the
maintenance of a viable domestic uranium industry -- without imposing
restrictions on enrichment of foreign uranium" (id. at 18a).  This too
suggests, contrary to the Secretary, that restrictions on enrichment
of foreign-source uranium would somehow further the statutory purpose.
 In a similar vein, the court asserted that "DOE may determine how
much restriction is required to ensure viability, but it cannot decide
not to impose restrictions when the industry is not viable.  It must
continue to increase restrictions until the domestic industry becomes
viable" (ibid. (emphasis supplied)).  Again, this suggests a vision of
the facts which is exactly the opposite of what the Secretary found.

   Perhaps if the domestic uranium industry did not have enormous
excess capacity, if DOE had a complete monopoly on enrichment services
and if there were no secondary market for enriched uranium, then the
court of appeals might have been warranted in assuming that a "100%
restriction" on the enrichment of foreign uranium could revive the
domestic industry.  But that is not the current state of the domestic
uranium market, as determined by the Secretary.  On the contrary, the
Secretary found that because of excess capacity and severely depressed
prices, competition from foreign sources of enriched uranium, and an
active secondary market in enriched uranium, any restriction on the
provision of enrichment services to foreign uranium would provide at
best only transitory relief.  51 Fed. Reg. 27135-27138 (1986).  /15/

   It is of course elementary that "'(o)n summary judgment the
inferences to be drawn from the underlying facts * * * must be viewed
in the light most favorable to the party opposing the motion.'"
Matsushita Elec. Ind. Co. v. Zenith Radio, No. 83-2004 (Mar. 26,
1986), slip op. 12 (quoting United States v. Deibold, Inc., 369 U.S.
654, 655 (1962)).  This principle applies with equal force to issues
of disputed fact about market structures or other economic conditions
(see, e.g., United States v. Diebold, supra).  If the court of appeals
was not convinced by the Secretary's analysis of conditions in the
domestic uranium industry, the proper course, at most, would have been
to reverse the district court's decision granting summary judgment and
either to remand for further proceedings to determine whether the
Secretary's findings were arbitrary, capricious or an abuse of
discretion, or to remand with instructions to direct the Secretary to
conduct a further investigation into the conditions of the domestic
uranium industry.  /16/ It was manifestly improper, however, for the
court of appeals silently to substitute its views of the domestic
uranium market for the findings of the Secretary, and then to use
those views, which have no support in the record, as part of the
justification for a mechanical imposition of restrictions under
Section 2201(v).

   3. The court of appeals' decision affirms an injunction which
prohibits DOE from providing any enrichment services to foreign
uranium.  This order, if left unreviewed, will have very serious
adverse consequences for electric utilities, DOE's enrichment program,
and United States trade, nuclear cooperation and nonproliferation
policies.

   a. The district court's injunction confronts utilities who have
agreed to purchase foreign uranium feed stock /17/ and have contracted
with DOE for enrichment services with a dilemma. DOE's enrichment
contracts impose cancellation penalties for failure to use
contracted-for services (see 10 C.F.R. 762.10).  Thus, unless these
utilities can break their contracts with DOE, they will either have to
obtain domestic uranium for DOE to enrich, or pay the cancellation
penalties and obtain enrichment services elsewhere.  If the utilities
go forward with DOE enrichment, they either will have to dispose of
the foreign uranium they have purchased or break their purchase
agreement.  /18/

   b. The district court's order also poses a grave danger to DOE's
commercial enrichment operation.  Enrichment fees from domestic
utilities amount to hundreds of millions of dollars a year.  In the
1986 rulemaking, DOE stated that "(l)ost sales resulting from
(customer) terminations could reach at least $300 million annually by
1988" (51 Fed. Reg. 3627 (1986)).  Indeed, current customers, in
response to the district court's order, have suggested that they would
attempt to rescind their contracts entirely if DOE is unable to enrich
foreign uranium.  Successful legal action would mean the loss of
termination fees and possibly even the award of substantial damages
against DOE for breach of its enrichment contracts.  51 Fed. Reg.
27136 n.10 (1986).  The immediate threat to DOE, and hence to the
treasury, thus runs well into the hundreds of millions of dollars and
may amount to more than a billion.  Moreover, because Section 2201(v)
requires DOE to price its enrichment services so as to cover its
costs, a substantial contraction of DOE's customer base would "force
DOE to further curtail operations at its enrichment plants, increasing
the unit cost of production, and thus drive more of DOE's customers
overseas" (51 Fed. Reg. 27137 (1986)).  This could produce a spiral of
increasing costs and decreasing volume that eventually could eliminate
DOE's commercial enrichment operations.  /19/

   c. The least readily quantified but perhaps the most important
consequences of the district court's order would be felt by United
States foreign policy, specifically trade and international nuclear
policy.  Most of the uranium imported into this country comes from
Canada, our largest trading partner, and Australia, a close ally with
which we have a trade surplus.  Both Canada and Australia have
presented Diplomatic Notes to the Department of State, setting forth
in the strongest terms their objection to the injunction imposed by
the district court (51 Fed. Reg. 27137 n.17 (1986) (quoting Notes)).
The Notes suggest that the imposition of restrictions under Section
2201(v) would be inconsistent with the United States' obligations
under the General Agreement on Tariffs and Trade (GATT).  51 Fed. Reg.
27137 n.17 (1986).  /20/ No matter how the GATT issue might be
resolved, the restrictions would have, in the words of the United
States Trade Representative in a letter to the Secretary of Energy,
"'an adverse impact on our trade and other relationships with
important trading partners without resolving the long-term problems of
the industry'" (id. at 27137 (citation omitted)).

   Trade is not the only aspect of foreign policy implicated by the
decision below.  Congress has determined that "the proliferation of
nuclear explosive devices or of the direct capability to manufacture
or otherwise acquire such devices poses a grave threat to the security
interests of the United States" (Nuclear Non-Proliferation Act of
1978, Pub. L. No. 95-242, Section 2, 92 Stat. 120).  The decision
below threatens American non-proliferation efforts in two ways.
First, the damage to the competitive position of DOE's enrichment
program discussed above threatens a loss of DOE's foreign enrichment
customers.  Nuclear fuel exported from the United States is subject to
stringent conditions designed to ensure that it is used in a manner
consistent with United States non-proliferation policy (Sections
304-307, 92 Stat. 131-138 (codified at 42 U.S.C. 2155-2158)).  As the
Department of State noted in commenting on the issue presented in this
litigation, a shift away from DOE enrichment by foreign customers
would replace those strict controls with "the controls of foreign
enrichers, none of whom follows as stringent non-proliferation
conditions as those required by U.S. law" (51 Fed. Reg. 27137 n.15
(1986) (declaration of Deputy Assistant Secretary of State for Nuclear
Energy and Energy Technology Affairs James Devine)).  Moreover, "(a)
decline in DOE's position in the enrichment market would also create
an increased commercial incentive for the spread of nuclear enrichment
technology, which has potential nuclear weapons application" (ibid.).

   More subtle but no less real is the impact of this decision on the
general perception of the United States as a partner in nuclear
cooperation.  United States nuclear cooperation is accompanied by a
number of very strict controls and limitations, designed to ensure
that cooperating countries use American expertise in a manner
consistent with United States non-proliferation policy (42 U.S.C. (&
Supp. III) 2153).  Nuclear cooperation, however, is available from
sources other than the United States, some of which do not apply the
same strict non-proliferation controls.  Third countries will choose
to obtain assistance and cooperation from the United States, and
thereby accept the limits on their use of nuclear technology imposed
by Congress, only if they perceive the United States to be an
absolutely reliable partner.

   The decision below threatens that perception.  As Deputy Assistant
Secretary of State Devine explained, "(u)nless the 'rules of the game'
for nuclear cooperation are consistent and clear, there is a risk that
such cooperation will be diminished and that the credibility and
influence of the United States on nuclear non-proliferation matters in
both bilateral and multilateral contexts will be undermined" (51 Fed.
Reg. 27137 n.15 (1986)).

   If the lower courts were correct in finding that Congress has
chosen a policy that threatens international perceptions of American
reliability, then of course that policy must be followed until
Congress changes it, whatever the consequences.  We suggest, however,
that a decision touching concerns of such delicacy and importance is
best reviewed in this Court.

                              CONCLUSION

   The petition for a writ of certiorari should be granted.

   Respectfully submitted.

   CHARLES FRIED

      Solicitor General

   RICHARD K. WILLARD

      Assistant Attorney General

   THOMAS W. MERRILL

      Deputy Solicitor General

   JOHN HARRISON

      Assistant to the Solicitor General

   LEONARD SCHAITMAN

   RICHARD A. OLDERMAN

      Attorneys

   OCTOBER 1987

   /1/ "Special nuclear material" is defined in 42 U.S.C. 2014(aa) and
includes plutonium and enriched uranium.  The term "source material"
includes unenriched uranium or thorium (42 U.S.C. 2014(z)).

   /2/ The AEC was abolished in 1974 (Energy Reorganization Act of
1974, Pub. L. No. 93-438, Section 104(a), 88 Stat. 1237).  Its
"licensing and related regulatory functions" were transferred to the
Nuclear Regulatory Commission (NRC) (Section 201(f), 88 Stat. 1243).
All other AEC functions were transferred to the Energy Research and
Development agency, the predecessor of the Department of Energy (DOE)
(Section 104(c), 88 Stat. 1237).

   /3/ The current spot market price was $16.65 per pound on August
31, 1987 (NUEXCO Monthly Report No. 229, at 34 (Sept. 1987)).

   /4/ A SWU is a measure of the production capacity of uranium
enrichment plants and hence a unit in which enrichment services can be
measured (51 Fed. Reg. 3625 & n.1 (1986)).  SWU's "measure the amount
of effort expended to separate a given amount of natural uranium into
two components -- one having a higher concentration of fissionable
uranium-235" (id. at 3625 n.1).

   /5/ The AEC's authority to license the domestic sale or the
importation of special nuclear material (see 42 U.S.C. 2073(a)) is now
vested in the NRC.  The NRC is required to deny any such license that
"would be inimical to the common defense and security or the health
and safety of the public" (42 U.S.C. 2099).  Any authority under the
Atomic Energy Act to restrict sales of enriched uranium on the
secondary market or uranium imports would have to derive from that
provision.

   /6/ Imports have been at higher levels in succeeding years.
"Natural (unenriched) uranium imports in 1982, 1983, 1984, and 1985
represented, respectively, 51.7, 25.9, 39.2 and 34.4 percent of U.S.
requirements" (1985 Viability Assessment at xii).

   /7/ The statute (42 U.S.C. 2210b(c)) provides:

         Criteria for monitoring and reporting requirements

         The criteria referred to in subsection (a) of this section
      shall also include, but not be limited to --

         (1) an assessment of whether executed contracts or options
      for source material or special nuclear material will result in
      greater than 37 1/2 percent of actual or projected domestic
      uranium requirements for any two-consecutive-year period being
      supplied by source material or special nuclear material from
      foreign sources;

         (2) projections of uranium requirements and inventories of
      domestic utilities for a 10 year period;

         (3) present and probable future use of the domestic market by
      foreign imports;

         (4) whether domestic economic reserves can supply all future
      needs for a future 10 year period;

         (5) present and projected domestic uranium exploration
      expenditures and plans;

         (6) present and projected employment and capital investment
      in the uranium industry;

         (7) the level of domestic uranium production capacity
      sufficient to meet projected domestic nuclear power needs for a
      10 year period;  and

         (8) a projection of domestic uranium production and uranium
      price levels which will be in effect under various assumptions
      with respect to imports.

   /8/ The court of appeals mistakenly refers to the issue in this
case as Count IV (App., infra, 14a).

   /9/ The Secretary commenced the 1986 rulemaking described in this
petition while the suit was proceeding in the district court.  The
final rule was adopted after the district court issued its order,
while that order was stayed by the court of appeals.  51 Fed. Reg.
27134 n.4 (1986).  This petition does not involve a direct challenge
to the revised criteria adopted in the rulemaking.

   /10/ The court stated that "(i)f the Department believes that
criteria less restrictive than those imposed by this order would
assure the maintenance of a viable domestic uranium industry, then the
Department shall clearly articulate its reasons for such a position"
(App., infra, 23a).  The court thus recognized that Section 2201(v)
affords the Secretary discretion in setting the appropriate
limitations in the circumstances when the statute applies.  But the
court's order does not permit the Secretary to do what he believes is
clearly contemplated by the statutory language -- impose no
restrictions when it is impossible, by limiting enrichment services,
to assure the viability of the domestic uranium industry.

   /11/ While this case was pending in the court of appeals Congress
adopted a continuing resolution funding DOE and other agencies for the
fiscal year that ended on September 30, 1987.  That statute contained
a provision expressly authorizing DOE to continue to enrich foreign
uranium until this lawsuit comes to "final judgment." Pub. L. No.
99-500, Section 305, 100 Stat. 1783-209.

   /12/ The court of appeals also reviewed the district court's
decision on another count of the complaint attacking aspects of DOE's
enrichment services contracts not directly concerned with enrichment
of foreign uranium.  The court of appeals remanded that issue for
further fact-finding to determine whether respondents had standing to
maintain their claim.  App., infra, 6a-14a.  This part of the court of
appeals' judgment is not challenged by this petition.

   /13/ The district court's order requires DOE to refuse to enrich
all foreign uranium intended for domestic use (App., infra, 23a).  It
thus has the effect of a nationwide injunction.  DOE therefore cannot
litigate the issue in the other courts of appeals and "gain the
benefit of adjudication by different courts in different factual
contexts" (Califano v. Yamasaki, 442 U.S. 682, 702 (1979) (discussing
difficulties posed by nationwide class actions)).  Petitioners' only
option is to seek review in this Court.

   /14/ The court of appeals appears to have misunderstood DOE's
argument based on Young, suggesting that the Secretary was asserting
that he had discretion to "abandon the statutory goal" (App., infra,
18a).  But DOE has never maintained that it has discretion to ignore
Section 2201(v).  On the contrary, in response to comments on the 1986
rulemaking, the Secretary found that "(t)he plain language of the
statute makes clear that restrictions are not to be imposed
automatically if the domestic mining industry is non-viable, but only
if they are needed to, and in fact, will assure the maintenance of a
viable domestic industry" (51 Fed. Reg. 27134 (1986)).  Thus, the
Secretary does not argue, as the court of appeals seems to have
believed, that DOE need not comply with Section 2201(v) because "this
policy is not wise in the present uranium market" (App., infra, 18a).
The question in this case is not whether the statute is wise but
rather what it means.

   /15/ It is possible (though by no means certain) that in the short
term the imposition of restrictions would lead to increased
consumption of domestic uranium, although DOE believes that any such
benefit would not be enough to make the industry viable (51 Fed. Reg.
27136 (1986)).  This possibility, which would lead to temporarily
increased income for respondent, is sufficient, we believe, to satisfy
the "distinct and palpable injury" requirement of Article III (Warth
v. Seldin, 422 U.S. 490, 501 (1975)).

   /16/ Respondents have never challenged the Secretary's
determination that restrictions would not assure the maintenance of a
viable domestic uranium industry.  Rather, they have argued that as a
matter of law the Secretary is required to impose restrictions
whenever the industry is not viable, whether or not those restrictions
would accomplish (or even further) the statutory goal.  In the absence
of any such challenge to the Secretary's findings, it would in fact
have been appropriate to grant petitioners' motion for summary
judgment.

   /17/ For the period between 1985 and 1990, United States utilities
are estimated to have contracted for some $780 million worth of
foreign uranium (Petitioners' C.A. Mot. for Stay Pending Appeal, App.
58, 73).

   /18/ The utilities' decision will depend on the comparison between
(i) the termination charge and other expenses associated with breaking
their enrichment contracts and (ii) the additional expense that would
be involved in obtaining domestic uranium (see 51 Fed. Reg. 27136
(1986)).  As DOE noted in its 1986 rulemaking, any incentive to buy
domestic uranium will be concentrated in the early years of the
contracts, when termination charges are highest (ibid.).  DOE
determined in that rulemaking that this incentive would not be
sufficient to make the domestic uranium industry viable even in the
short term (ibid.).

   /19/ The damage done by the district court's order, if it is
allowed to stand, will be shared between the utilities and DOE (and
other parties, including possibly the domestic uranium industry, see
51 Fed. Reg. 27136 (1986) (explaining that restrictions probably would
lead consumers simply to obtain both uranium and enrichment abroad))
in a manner that cannot be predicted.

   /20/ The Diplomatic Notes presented to the Department of State by
Canada and Australia in response to the district court's decision were
attached to petitioners' June 1986 motion to the Tenth Circuit for a
stay pending appeal.  After the court of appeals delivered its
decision in July 1987, Canada and Australia once again presented Notes
reiterating their position.  Diplomatic Note No. 194 from the Embassy
of Canada (July 22, 1987);  Diplomatic Note No. 237/87 from the
Embassy of Australia (July 24, 1987).

   APPENDIX