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

   No. 87-645

   In the Supreme Court of the United States

   October Term, 1987

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

   Brief for the Petitioners

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statutory provision involved
   Statement
       A. Federal regulation of nuclear materials
       B. The collapse of the domestic uranium industry
       C. The Secretary's rulemaking
       D. This litigation
   Summary of argument
   Argument:
       The court of appeals erred in holding that Section 2201(v)
       requires DOE to restrict enrichment of foreign uranium
       whenever the domestic uranium industry is not viable,
       without regard to the effect restrictions might have on
       viability
       A. DOE's reading of the statutory language is correct
          1. DOE's interpretation
          2. The court of appeals' view
          3. Respondents' suggestion
       B. The legislative history of Section 2201(v) and subsequent
          congressional treatment of this issue demonstrate that
          Congress has not required that enrichment restrictions
          be imposed whenever the domestic uranium industry is not
          viable
       C. To the extent that the court of appeals' decision rests
          on implicit rejection of DOE's factual findings and legal
          premises, it is clearly incorrect
          1. Fact finding
          2. Viability
   Conclusion

                            OPINIONS BELOW

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

                             JURISDICTION

   The decision of the court of appeals was entered on July 20, 1987.
The petition for a writ of certiorari was filed on October 18, 1987
and was granted on January 11, 1988.  The jurisdiction of this Court
is invoked under 28 U.S.C. 1254(1).

                     STATUTORY PROVISION INVOLVED

   Section 161(v) of the Atomic Energy Act of 1954, as it appears
codified at 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 sections
      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, or 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 use enriched uranium as reactor
fuel.  Section 2201(v) provides that DOE shall restrict its enrichment
of foreign-source uranium intended for use in domestic facilities "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 the enrichment of foreign uranium whenever the
domestic uranium industry is not viable, whether or not the imposition
of such restrictions would make the domestic industry viable.

                               STATEMENT

   This case concerns the meaning of Section 161(v) of the Atomic
Energy Act of 1954, 42 U.S.C. 2201(v), which requires the Department
of Energy (DOE) to restrict its enrichment of foreign-source uranium
intended for use in domestic facilities "to the extent necessary to
assure the maintenance of a viable domestic uranium industry." /1/ The
Secretary of Energy has found that the domestic uranium mining and
milling industry is not viable, and that restrictions on the
enrichment of foreign uranium -- including even a total prohibition on
such enrichment -- would not make the domestic industry viable.
Because the Secretary interprets Section 2201(v) to authorize
restrictions on enrichment of foreign uranium only when this would
serve the statutory goal of assuring a viable domestic industry, he
has not imposed such restrictions.  The lower courts disagreed with
this construction of the statute, holding that once the Secretary
determines that the domestic industry is not viable, he must
automatically terminate the provision of enrichment services for
foreign uranium, and may not consider whether such termination would
have any effect on the viability of the domestic industry.

   A. Federal Regulation of Nuclear Materials

   Pervasive federal regulation of atomic energy, and in particular of
nuclear materials, began with the Atomic Energy Act of 1946, ch. 724,
60 Stat. 755 (1946 Act).  The 1946 Act created the Atomic Energy
Commission (AEC) and established a government monopoly over all
aspects of nuclear power and materials.  Private persons were
forbidden to own nuclear power plants, nuclear enrichment facilities,
or nuclear reactor fuel -- "special nuclear material." /2/ Instead the
1946 Act provided that "(a)ll right, title and interest * * * in or to
any fissionable material * * * shall be the property of the (Atomic
Energy) Commission * * *" (Section 5(a)(2), 60 Stat. 760).

   Congress thoroughly overhauled the 1946 Act in the Atomic Energy
Act of 1954, 42 U.S.C. (& Supp. III) 2011 et seq. (1954 Act), which
remains the principal statute governing atomic energy.  The 1954 Act
ended the government's monopoly on the generation of atomic power,
authorizing the AEC to license private persons to own and operate
nuclear reactors (Sections 102-104, 42 U.S.C. 2132-2134).  /3/ It did
not, however, end the government's monopoly on the ownership of
nuclear fuel;  all special nuclear material continued to be property
of the AEC, and was leased to private nuclear power generators
(Section 158, 42 U.S.C. 2188).  The 1954 Act thus created an expanded
domestic market for enriched uranium -- and, derivatively, for the raw
uranium produced by the domestic uranium mining and milling industry
-- but the 1954 Act retained the role of the AEC as the sole buyer
from the uranium industry and the sole source of leased fuel for the
nuclear power industry.  See Pet. App. 3a.

   In 1964, Congress enacted the Private Ownership of Special Nuclear
Materials Act, Pub. L. No. 88-489, 78 Stat. 602 (the Private Ownership
Act), and again substantially revised the federal role with respect to
nuclear fuel.  The Private Ownership Act eliminated the government's
monopoly on the ownership of special nuclear material and permitted
private persons -- principally, electric utilities operating nuclear
reactors -- to own enriched uranium.  But although the government's
legal monopoly on the ownership of nuclear fuel ended, its de facto
monopoly as a provider of commercial-scale enrichment services
continued.  See S. Rep. 1325, 88th Cong., 2d Sess. 2 (1964)
(hereinafter Private Ownership Act Report);  Pet. App. 4a.
Recognizing this fact, Congress authorized the AEC to offer "toll
enrichment" services, whereby utilities could obtain unenriched
uranium on the open market and have it enriched by the AEC for a fee.

   One purpose of permitting private ownership of special nuclear
materials was to put the relatively young domestic uranium industry on
a sounder economic footing.  By allowing the uranium industry and
nuclear fuel users to function in a more normal market relationship,
the Private Ownership Act hoped to encourage "the domestic uranium
mining and milling industry to develop normally without future
reliance on the U.S. Government for its market" (Private Ownership Act
Report 10).  Nevertheless, Congress was concerned about what might
happen to the uranium industry in the transition period from a
controlled to a more open market, and in particular about the possible
effects of competition from foreign sources of uranium.  After hearing
in considerable detail from the Atomic Energy Commission as well as
uranium producers and consumers (see Private Ownership of Special
Nuclear Materials:  Hearings Before the Subcomm. on Legislation of the
Joint Comm. on Atomic Energy, 88th Cong., 1st Sess. (1963)
(hereinafter 1963 Private Ownership Hearings);  Private Ownership of
Special Nuclear Materials:  Hearings Before the Subcomm. on
Legislation of the Joint Comm. on Atomic Energy, 88th Cong., 2d Sess.
(1964) (hereinafter 1964 Private Ownership Hearings)), the Joint
Committee on Atomic Energy decided that AEC enrichment of foreign
uranium for use in domestic facilities -- which at the time was the
only way foreign sources could effectively compete with domestic
producers -- was a question "of sufficient importance to be treated
specifically in the legislation" (Private Ownership Act Report 30).
Congress accordingly included in the authorization of toll enrichment
the proviso that the AEC must restrict enrichment of foreign-source
uranium for domestic use "to the extent necessary to assure the
maintenance of a viable domestic uranium industry" (Section 161(v), 42
U.S.C. 2201(v)).

   Section 2201(v) also directed the AEC to "establish criteria in
writing" which would include a provision governing "the extent to
which such (enrichment) services will be made available for source or
special nuclear material of foreign origin intended for use
(domestically) * * *." The initial criteria established by the
Commission (see 31 Fed. Reg. 16479 (1966)) provided that the AEC would
enrich no foreign-source uranium for domestic use.  In 1974, after
soliciting comments (38 Fed. Reg. 32595 (1973)), the AEC amended its
enrichment services criteria by establishing a schedule by which all
restrictions on enrichment of foreign uranium for use in domestic
facilities would be eliminated by 1984 (39 Fed. Reg. 38016 (1974)).
/4/ The scheduled phase-out of restrictions took place as planned, and
DOE has not since reimposed any restrictions on enrichment of foreign
uranium.  /5/

   B. The Collapse of the Domestic Uranium Industry

   1. In the late 1970's and early 1980's, the economic condition of
the domestic uranium industry deteriorated rapidly and dramatically
(Pet. App. 5a).  The main cause of this development was "a classic
oversupply situation" (Status of the Domestic Uranium Mining and
Milling Industry:  The Effects of Imports:  Hearing Before the
Subcomm. on Energy Reserach 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, domestic
exploration and other investment in the uranium industry had 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, and 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.
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).  In 1981, the Edison Electric Institute, a
utility trade association, reported that the spot market price of
uranium had plunged 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 producers' average cost of production (51 Fed. Reg. 27132,
27136 n.12 (1986)).  The spot market price has not recovered
appreciable since then.  /6/

   Other developments also contributed to the decline of the domestic
uranium industry during this period.  Beginning in the mid-1970's, DOE
lost its monopoly as the only provider of enrichment services for
commercial nuclear reactors.  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 1986, because of their lower prices, these
competitors of DOE had "captured about 60 percent of the total foreign
market and * * * made significant inroads into the domestic markets"
(id. at 3625).  Domestic utilities therefore had an incentive to
obtain enriched uranium (derived from foreign ore) abroad, bypassing
DOE and the domestic uranium industry entirely.  Moreover, as part of
the same imbalance of supply and demand that affected the domestic
uranium mining and milling industry, many utilities found themselves
committed to long-term contracts to purchase enrichment services that
they no longer needed;  this "led to the emergence of a secondary
market in which utilities have been willing to sell their surplus
SWU's (separative work units) to other utilities at discounts of $30
per SWU and more" (id. at 3625).  /7/ The emergence of this secondary
market in enriched uranium created another competitive alternative to
the purchase of domestic uranium ore.

   2. a. DOE sought to deal with this crisis in the domestic uranium
industry in serveral 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 had 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, were and are subject to the exclusive
oversight of the Nuclear Regulatory Commission (NRC).  /8/

   b. In 1982, Congress turned its attention to the plight of the
domestic uranium industry.  Although the Senate approved a bill that
would have imposed significant restrictions on uranium imports (see
128 Cong. Rec. 5751 (1982)) and a Conference Committee recommended a
less drastic but still potentially restrictive measure (see id. at
Cong. Rec. 26799-26801), the House rejected even the Conference
Committee proposal (see id. at 28543-28544).  Instead, Congress
responded to the industry's difficulties by adding Section 170B to the
Atomic Energy Act of 1954, 42 U.S.C. 2210b.  This statute sets forth a
series of reporting requirements to ensure that Congress can monitor
the condition of the domestic uranium industry;  requires the
Secretary of Energy to promulgate criteria for assessing the viability
of the domestic uranium industry, and sets forth eight statutory
criteria that the Secretary is to consider in making such a
determination;  /9/ and directs 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
criteria define "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 is one factor to be examined, the criteria make clear
that the focus is on whether the industry can supply all of the
nation's military and nuclear power needs at an acceptable cost in the
event of various future contingencies, such as an interruption of
imports.  See Energy Info. Admin., Dep't of Energy, Domestic Uranium
Mining and Milling Industry:  1985 Viability Assessment x, 55-62
(1986) (evaluation of likely effects of supply interruptions)
(hereinafter 1985 Viability Assessment).

   In December 1984, the Secretary made his first viability finding
pursuant to Section 2210b and the criteria.  He concluded that the
domestic industry had been viable in 1983.  In September 1985,
however, the Secretary determined that in 1984 the industry was not
viable.  See 1985 viability Assessment ix.  In December 1986, and
December 1987, the Secretary found that the domestic industry was not
viable in 1985 and 1986, respectively.  /10/

   C. The Secretary's Rulemaking

   Four months after the 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 again did not contemplate any restriction on enrichment
of foreign uranium (51 Fed. Reg. 27132 (1986)).  The explanation of
that decision addressed both the Secretary's understanding of the
meaning of Section 2201(v), which had been challenged 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" (51
Fed. Reg. 27134 (1986)).

   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 found that the
domestic industry's difficulties arose from "structual weaknesses,"
chiefly the collapse in damend 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.).  /11/
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.).  Due to the
availability of these competitive alternatives to DOE's enrichment
services, "DOE cannot force enrichment customers to use domestic
uranium when it is not in their economic self-interest to do so" (id.
at 27138).

   Having found that imposition of restrictions on enrichment would
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)).  This was because
restrictions on enrichment of foreign uranium would cause some of
DOE's current customers to look elsewhere for enrichment services.
This in turn would increase DOE's unit costs of production, which
would have to be passed on to its remaining customers (see 42 U.S.C.
2201(v)(B)(iii)).  The higher charges for DOE's enrichment services
would put the domestic uranium industry (which supplies feed for DOE
enrichment almost exclusively) at even greater competitive
disadvantage in what had become a world market for enriched uranium
(see 51 Fed. Reg. 27135-27136 (1986)).  Accordingly, the Secretary
adopted final enrichment criteria that do not restrict enrichment of
foreign uranium.  /12/

   D. This Litigation

   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 (see J.A. 8-10).  The
only allegation relevant here is set forth in Count I, /13/ which
claimed that DOE's failure to impose restrictions on the enrichment of
foreign uranium for use in domestic facilities is unlawful.  In their
summary judgment motion, respondents maintained 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.  J.A. 27-28;  36.  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 in which
they agreed that the domestic uranium industry was not currently
viable, within the meaning of Section 2210b and the Secretary's
criteria (J.A. at 49-50).  But petitioners maintained that this did
not mean that restrictions had to be imposed on enrichment of foreign
uranium, because in the Secretary's view such restrictions would not
assure a viable domestic uranium industry (id. at 46-47, 61-62;  66).
/14/

   On June 5, 1986, the district court at a hearing granted
respondents' motion for summary judgment as to Count I.  At the
hearing, the court expressed the view that Section 2201(v) requires
the imposition of restrictions on enrichment of foreign uranium
whenever the domestic industry is not viable, regardless of whether
such restrictions would restore viability:  "To me (the statute) says
that the agency * * * shall not offer (enrichment) services for source
or special nuclear materials of foreign origin -- period" (J.A. 66,
Pet. App. 25a).  The district court entered an order requiring DOE to
limit its enrichment of foreign uranium to 25% of all material
enriched between June 6, 1986 and December 31, 1986, and imposing a
total ban on enrichment of foreign uranium beginning January 1, 1987
(Pet. App. 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.).  /15/

   Petitioners appealed to the United States Court of Appeals for the
Tenth Circuit, /16/ which affirmed the district court's grant of
summary judgment on this issue (Pet. App. 1a-21a).  /17/ The court of
appeals began its analysis by noting that the parties agreed that the
domestic uranium industry is not now viable (id. at 14a).
Consequently, the court did not address the meaning of "viability."
Stating that the issue under Section 2201(v) involved a question of
statutory construction, the court rejected the Secretary's view 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 must become increasingly
aggressive, to the point of 100% restriction, until the domestic
industry is rejuvenated and becomes viable" (Pet. App. 17a).
According to the court, 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" (Pet. App. 17a-18a).  At petitioners' request, the Tenth
Circuit has issued a stay of its mandate that will continue until this
petition is disposed of.

                          SUMMARY OF ARGUMENT

   Section 2201(v) directs the Department of Energy to restrict the
enrichment of foreign-source uranium "to the extent necessary to
assure the maintenance of a viable domestic uranium industry." This
means that DOE must determine what level of restrictions will assure
viability, and impose it.  However, if no level of restrictions will
assure viability, the statute does not require DOE to engage in a
futile exercise.  Section 2201(v) authorizes restrictions on
enrichment of foreign uranium for one purpose and one purpose only:
to assure a viable domestic uranium industry.  It does not authorize
restrictions for any other purpose, even it this might confer a
transient economic benefit upon domestic producers.

   The district court and the court of appeals read the statute
differently.  In their view, Section 2201(v) requires the Secretary to
impose restrictions on enrichment of foreign uranium whenever the
domestic uranium industry is found not to be viable, whether or not
such restrictions would have any effect on the viability of the
domestic industry.  This reading does violence to the statuory
language by ignoring the fact that the purpose of restrictions, and of
the statute, is to maintain a viable domestic uranium industry.
According to the court of appeals, Section 2201(v) mindlessly directs
the Secretary to take measures that will not accomplish their explicit
purpose.

   Respondents in this Court have suggested a third possible reading
of the statute.  Respondents now suggest that Section 2201(v) may mean
that DOE must impose restrictions on enrichment of foreign uranium
whenever the agency determines that this is a "necessary condition" of
a viable domestic industry, even if such restrictions are not a
"sufficient condition" of viability.  But the statute does not speak
of necessary as opposed to sufficient conditions.  It says that
restrictions are to be imposed to the extent necessary to assure a
viable domestic industry.  A restriction which is "necessary to
assure" viability is, to use respondents' terms, one that is a
sufficient condition of viability.  Furthermore, respondents' reading
would require the Secretary to engage in an unbounded exercise in
speculative predictions about what might happen if restrictions are
imposed in conjuction with various other hypothetical changes in the
market or the regulatory climate.  There is no support for the motion
that Congress had any such exercise in mind when it enacted Section
2201(v).

   The history of congressional action on this subject reinforces
DOE's interpretation and offers no support for the contrary views.
When it enacted the Private Ownership Act in 1964, Congress foresaw a
future of continuous growth for the nuclear power industry, in which
the relatively young domestic uranium industry would eventually face
such a large market for its product that it could compete with foreign
suppliers without any threat to its basic survival.  The primary
purpose of Section 2201(v) was to allow the AEC to phase in
competition from foreign sources, so as to assure minimal disruption
in the growth of the domestic industry.

   What Congress clearly did not foresee is the present state of
affairs, where demand for domestic uranium has collapsed and
alternative sources of enriched uranium have emerged that render DOE
powerless to restore the domestic industry to viability by cutting off
enrichment of foreign uranium.  Nevertheless, Congress was acutely
aware "that many unforeseeable developments may arise in this field *
* *." Private Ownership Act Report 19 (quoting 60 Stat. 755).
Accordingly, it rejected any rigid approach to dealing with
competition from foreign uranium, and opted instead for a flexible
regulatory standard that would require the Secretary to determine
whether restrictions would have any effect on the viability of the
domestic industry.  The mechanical interpretation of Section 2201(v)
adopted by the court of appeals cannot be squared with this approach.

   Furthermore, the Joint Committee on Atomic Energy specifically
noted that because of future uncertainties, the state of the domestic
uranium industry was "a matter which the committee will follow closely
with a view to determining whether further legislation is required"
(Private Ownership Act Report 16).  In 1982, faced with the
precipitous decline of the domestic uranium industry, Congress made
good on this commitment, and revisited the question of the impact of
imported uranium on the viability of the domestic uranium industry.
In so doing, Congress specifically rejected a bill that would have
imposed mandatory restrictions on the enrichment of foreign uranium.
Instead, it directed the Secretary to issue an annual viability
determination and report.  See 42 U.S.C. 2210b.  In effect, the
congressional response to the decline of the domestic uranium industry
was to reject relief very similar to that imposed by the district
court in this case, casting further doubt on the lower courts'
interpretation of Section 2201(v).

   There are suggestions in the opinion below that the court of
appeals' decision may rest, at least in part, on disagreements with
DOE on questions that were not presented by respondents' motion for
summary judgment.  Some of the court of appeals' statements imply that
it simply disbelieved DOE's determination -- never challenged in this
litigation, let alone tested and refuted -- that restrictions on
enrichment of foreign uranium would not assure the viability of the
domestic industry.  Such extra-record fact-finding would of course be
improper.  It is also possible that the court of appeals may have
implicitly relied on a definition of viability that is at odds with
DOE's understanding.  The agency's criteria for making a viability
assessment, based on Section 2210b of the statute, focus on whether
the domestic industry is capable of meeting all of the nation's
military and energy needs at an acceptable cost.  The court of
appeals, in contrast, may have assumed that viability refers solely to
whether the domestic uranium industry is profitable.  Although a total
prohibition on enrichment of foreign uranium might possibly have some
impact on the short run profitability of the domestic uranium
industry, it does not follow that such a prohibition would give rise
to an industry that can fulfill the nation's long-run energy and
military needs.  To the extent the court of appeals' decision may have
rested in these implicit disagreements with the Secretary's
determinations, it was in error.

                               ARGUMENT

   THE COURT OF APPEALS ERRED IN HOLDING THAT SECTION 2201(V) REQUIRES
DOE TO RESTRICT ENRICHMENT OF FOREIGN URANIUM WHENEVER THE DOMESTIC
URANIUM INDUSTRY IS NOT VIABLE, WITHOUT REGARD TO THE EFFECT
RESTRICTIONS MIGHT HAVE ON VIABILITY

   A. DOE's Reading of the Statutory Language is Correct

   1. DOE's Interpretation

   Section 161(v) of the Atomic Energy Act of 1954, 42 U.S.C. 2201(v),
directs DOE to restrict its enrichment of foreign uranium "to the
extent necessary to assure the maintenance of a viable domestic
uranium industry." The question in this case is whether it matters, in
determining DOE's obligations under the statute, if restrictions in
fact would assure the maintenance of a viable domestic industry -- or
indeed, given the court of appeals' complete disregard for
consequences, if they even might produce viability.  DOE maintains
that its obligations under the statute depend upon the effects of
restrictions on the viability of the domestic uranium industry, and
that when it finds that restrictions would not assure viability there
is no obligation -- and hence no authority -- to impose them.

   This is the most plausible reading of the statutory language.  As
the Court has observed, "(t)here is, of course, no more persuasive
evidence of the purpose of a statute than the words by which the
legislature undertook to give expression to its wishes." United States
v. American Trucking Ass'n, 310 U.S. 534, 543 (1940).  Here, the
statute states its purpose on its face -- maintenance of a viable
uranium industry -- and instructs DOE to employ a specified means --
enrichment restrictions -- "to the extent necessary to assure" that
this purpose is accomplished.  /18/ The Secretary of Energy, in
implementing Section 2201(v), therefore must look first to conditions
prevailing in the domestic uranium industry and then to the effects of
enrichment restrictions on those conditions.  If the domestic industry
is viable but enrichment of foreign uranium threatens its viability,
then restrictions are to be imposed to the extent necessary to
eliminate the threat.  Similarly, if the domestic industry is not
viable but some level of restrictions would make it viable, then that
level of restrictions must be imposed.  On the other hand, if the
domestic industry is viable and the imposition of restrictions is not
needed to keep it viable, then the statute does not require, or even
authorize, the Secretary to restrict enrichment.  For the same reason,
if the industry is not viable, and no level of restrictions on
enrichment would make it viable, then the statute again neither
directs nor authorizes the Secretary to impose restrictions.  In
short, the statute tells the Secretary when and how to employ a
particular causal mechanism to achieve a specified end;  when the
mechanism cannot achieve the end, the statute requires no action.

   This is the intuitive, natural reading of the language;  it rests
on a purpose that is plain on the face of the provision.  Moreover,
this Court has held that if there are several reasonable
interpretations of the text, the agency may follow its own reading as
long as that is a permissible construction.  Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984)
(agency view will be upheld if it is "a permissible construction" of
the agency's statutory mandate).  Here, DOE's reading is the most
plausible;  it is therefore "sufficiently rational to preclude a court
from substituting its judgment for that of (the agency)." Young v.
Community Nutrition Inst., 476 U.S. 974, 981 (1986).

   In this respect, the case is controlled by Young v. Community
Nutrition Institute, supra.  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 substance) 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 level, but not in
deciding whether to set a tolerance level at all" (476 U.S. at 980).
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.).  The agency construction, the
Court held, was "sufficiently rational to preclude a court from
substituting its judgment for that of the FDA" (id. at 981).

   The decision below cannot be squared with the 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" (476
U.S. at 981).  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 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.
476 U.S. at 981.  Accordingly, this Court's disposition of the much
closer question in Young necessarily requires deference to DOE's
construction of Section 2201(v).

   2. The court of appeals' view

   The court of appeals' reading, by contrast, is ill-considered.
According to the court of appeals, DOE must impose enrichment
restrictions whenever the domestic industry is not viable, without
regard to the effect of restrictions on viability.  As that court put
it, Section 2201(v) "does not provide a scenario in which the DOE is
excused from restricting foreign enrichment notwithstanding a
nonviable domestic industry" (Pet. App. 17a).  This approach treats
non-viability as a triggering event, and ignores the fact that
viability is the provision's -- and the restrictions' -- purpose.
According to the court of appeals, Section 2201(v), which states its
purpose on its face, commands DOE to engage in pointless action.

   The court of appeals appears to have been led astray by the fact
that the statute is obviously mandatory in one sense, and by the
mistaken impression that DOE was claiming unfettered discretion to
decide whether or not to impose restrictions.  The court of appeals
correctly noted that "'shall' is usually mandatory language" (Pet.
App. 17a), and correctly reasoned that Section 2201(v) imposes a
non-discretionary duty on the agency.  See Escondido Mutual Water Co.
v. La Jolla Band of Mission Indians, 466 U.S. 765, 772-775 (1984).
But starting from those sound premises, it was error to conclude that,
because the agency has a mandatory duty to take certain measures when
they will achieve a stated goal, it has a similar duty to take those
measures whether or not they will achieve the goal.  Moreover, DOE has
never maintained that it has the discretion to "abondon the statutory
goal" (Pet. App. 18a).  DOE's position has always been that it must
exercise its judgment and expertise in deciding whether restrictions
would meet that goal and, if they would not, that it is not compelled
to impose pointless restrictions.  DOE's position rests, not on a
claim of inherent agency discretion, but on the language of Section
2201(v).

   An examination of the possible consequences of the court of
appeals' construction confirms its error.  If the court of appeals is
correct, then the statute forbids any inquiry into the reason the
domestic industry is not viable, even if that reason is something that
restrictions cannot possible redress.  Thus, if domestic uranium has
become prohibitively expensive or (in the extreme case) if domestic
reserves have been completely exhausted, the court of appeals' reading
would nevertheless force DOE to impose a total restriction on
enrichment of foreign uranium -- even though the only consequence of
such a restriction would be to put DOE out of the enrichment business.
 /19/ Contradictions of this sort arise inevitably when an explicitly
goal-directed statute is interpreted without regard to the goal.

   3. Respondents' suggestion

   In this Court, respondents have suggested for the first time (Br.
in Opp. 13-14) that Section 2201(v) uses the word "necessary" in the
technical, logical sense in which it contrasts with "sufficient." Read
in this fashion, the statute requires that restrictions be imposed if
they are a necessary condition of viability -- that is, if viability
cannot be achieved in the absence of restrictions.  But, on this
reading, the statute does not require that the restrictions be a
sufficient condition of viability;  other developments in the uranium
market, or other policy initiatives, may also be required before the
domestic industry is actually restored to viability.

   Respondents' suggested interpretation, however, is no more
consistent with the statute than that of the court of appeals.  /20/
The statute does not speak in terms of "necessary conditions" and
"sufficient conditions." It provides that restrictions must be imposed
to the extent necessary to assure the maintenance of a viable domestic
uranium industry.  A restriction which is "necessary to assure" the
realization of a particular goal is different from one that is a
"necessary condition" of that goal.  To "assure" is "to make safe" or
"to make sure or certain";  "to make certain the coming or attainment
of" something.  Webster's Third New International Dictionary 133
(1976).  In terms of respondents' logical categories, that which
assures is more akin to a sufficient condition than a necessary
condition.  Thus, the actual language of the statute is more
appropriately construed to mean that restrictions must be imposed when
they are a sufficient condition of viability, than to mean that
restrictions must be imposed when they are a necessary (but not a
sufficient) condition of viability.

   Furthermore, respondents' proposed interpretation would require DOE
to engage in an unbounded exercise in hypothetical decisionmaking.  It
would not be enough to conclude that the imposition of restrictions,
by itself, would not restore the viability of the domestic industry.
In addition, the Secretary would also have to ask whether the
imposition of restrictions, in conjunction with other hypothetical
changes in the uranium market, or other hypothetical policy measures,
would make the industry viable.  Moreover, in undertaking this
exercise in speculation, the Secretary would apparently have to
exclude from consideration hypothetical market changes or policy
measures that would by themselves restore the industry to viability,
because with respect to these events the restriction on enrichment
services would not be a "necessary condition" of viability.  For
example, with respect to the specific suggestion made by respondents
(Br. in Opp. 14), the Secretary would have to ask whether restrictions
on enrichment of foreign uranium, in conjunction with a hypothetical
prohibition on imports of special nuclear material by the Nuclear
Regulatory Commission, would make the industry viable.  If DOE
concluded that the two actions together would make the domestic
industry viable, it would have to impose restrictions, even though DOE
has no power to ban imports of special nuclear material, /21/ and even
though its restriction of enrichment services, standing alone, would
do nothing to restore the domestic uranium industry to viability.  On
the other hand, if DOE concluded that a prohibition on imports of
special nuclear material would itself restore the viability of the
domestic industry, then it would not have the authority to impose
restrictions on enrichment of foreign uranium, because on this assumed
state of affairs a restriction on enrichment would not be a necessary
condition of viability.

   The intellectual gymnastics required by respondents' interpretation
of the statute would be unproductive, unsound, and unreviewable.
Moreover, there is absolutely no suggestion in the statute or
legislative history that Congress contemplated such an exercise.
Section 2201(v), in directing DOE to assure viability, authorizes it
to employ enrichment restrictions and enrichment restrictions alone;
Congress chose a specific means to achieve a specific end and gave no
directive concerning any other means.  If Congress had wanted the
agency to engage in a wide-ranging analysis of enrichment restrictions
in conjunction with other possible actions by other actors if would
have spoken in far different words than those which were chosen.

   B. The Legislative History of Section 2201(v) and Subsequent
Congressional Treatment of This Issue Demonstrate That Congress Has
not Required That Enrichment Restrictions be Imposed Whenever the
Domestic Uranium Industry is not Viable

   1. The private Ownership Act was enacted during a time of
considerable optimism about the future of the nuclear industry in the
United States.  The Joint Committee on Atomic Energy reported that
"great strides" had been made in the development of civilian nuclear
power since 1954 (Private Ownership Act Report 8):  "Spurred on by
Government encouragement and assistance, significant progress has been
made in reducing the cost of nuclear power during this period."
(ibid.).  Noting estimates provided by the AEC in 1962 of steadily
mounting nuclear power capacity through 1980, the Joint Committee
reported that these estimates had recently been revised upward by
"some 70 to 150 percent" (ibid.).  In this context, the Joint
Committee recommended that private ownership of special nuclear
material be authorized in order to facilitate private planning for the
future and to eliminate the burden on the government of maintaining
and leasing large quantities of special nuclear material to the
private sector.

   The prospects for the domestic uranium mining and milling industry
were also viewed in largely optimistic terms.  As the Joint Committee
stated (Private Ownership Act Report 10):

      Only a decade age, the United States was a have-not Nation in
      terms of discovered and developed uranium reserves.  The Atomic
      energy Commission by extending substantial incentives to
      American industry, embarked upon an ambitious program of
      exploration for uranium -- the raw material essential to both
      the nuclear weapons program and the development of peacetime
      applications of atomic energy.  As a result of this effort, the
      United States has, today, among the largest uranium reserves in
      the world, and, also, we have created a substantial uranium
      mining and milling industry.

   Nevertheless, the Joint Committee expressed some concern about the
viability of this new industry in the near-term.  The government had
recently announced cutbacks in the purchase of special nuclear
material for military purposes (ibid.), and the projected increases in
demand for uranium for private nuclear power purposes might not
materialize as soon as predicted.  For this reason, in preparing for
the 1964 private ownership hearings, the Joint Committee had asked
participants to address the question whether restrictions should be
imposed on either "the importation of foreign uranium concentrates for
enrichment and ultimate sale on the domestic market" or the "the
importation of foreign-enriched uranium" (1964 Private Ownership
Hearings 360).

   In response to that inquiry, the AEC stated its "intent not to toll
enrich uranium of foreign origin (for domestic use) * * *.  This
restriction would be removed July 1, 1975, when the civilian
requirements are expected to be sufficiently high that the viability
of the domestic industry would no longer be at stake." 1964 Private
Ownership Hearings 5 (statement of AEC Chairman Seaborg).  In response
to further questions, Chairman Seaborg expressed the Commission's
preference for enrichment restrictions over import tariffs, because
the latter would be "a complicated field to enter for such a short
period" (id. at 23).

   One major uranium mining and milling concern, the Kerr-McGee
Company, opposed the AEC's proposed moratorium on enrichment of
foreign uranium.  See 1964 Private Ownership Hearings 196-198.  /22/
Instead of a fixed period of restriction, Kerr-McGee suggested that
the AEC "not extend its services to (foreign uranium) intended for
domestic use to the extent necessary to assure the development of a
viable domestic uranium mining and milling industry" (id. at 198).
This alternative, the company argued, would give the AEC "the
flexibility to adjust protection to the actual situation" as it
developed, rather than being bound by a rigid timetable (id. at 197).
In effect, a flexible standard would allow the AEC to determine
"whether protection is to be afforded and the extent and precise
nature of such protection" (ibid.) and would enable the AEC to provide
"such protection as may become necessary but only to the extent that
it is necessary" (ibid.).

   The Joint Committee accepted this aspect of the Kerr-McGee
proposal.  /23/ The committee report explained that it preferred this
approach to the fixed deadline proposed by the AEC because it imposed
"a flexible restriction" that would allow the AEC "to review
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 mining and
milling industry" (Private Ownership Act Report 16).  The Committee
elaborated (id. at 31):

      The direction to the Commission not to offer services under this
      subsection for uranium of foreign origin is flexible both as to
      duration and degree of the restriction.  While it is possible
      that by 1975 substantial amounts of uranium could be freely
      imported into the United States for enrichment and sale on the
      domestic market, one cannot at this time predict, with any
      degree of certainty, the condition of the domestic uranium
      industry a decade hence.

         Accordingly, the language of the bill will permit the
      Commission to survey periodically the condition of the domestic
      and world uranium markets and to offer or refuse to offer its
      enrichment services on a basis which will assure, in its
      opinion, the maintenance of a viable domestic uranium industry.

   As this history suggests, Congress never considered the precise
problem presented by this litigation.  Section 2201(v) was enacted in
order to maintain the viability of the domestic uranium industry as it
passed from infancy to maturity;  not to revive an industry caught in
the throes of a sudden and precipitous decline.  Nevertheless, the
history strongly suggests that Congress would have rejected the court
of appeals' construction of the statute.  The Joint Committee clearly
had a very distinct objective in mind:  the maintenance of a viable
domestic industry.  In order to achieve this objective, it expressly
rejected the rigid approach proposed by the AEC:  a complete
moratorium on enrichment of foreign uranium until 1975.  Instead,
Congress adopted a flexible approach that requires the agency
continuously to monitor market conditions and to formulate an opinion
as to what level of restrictions, if any, would at any given time make
the domestic industry viable.  /24/ In contrast, the court of appeals'
construction ignores the purpose of the statute, and treats the
imposition of restrictions as if it were an end in itself.  The lower
court's rigid and mechanical rule -- "that when domestic nonviability
is determined, restrictions on enrichment of foreign-source uranium
must be imposed and must become increasingly aggressive, to the point
of 100% restriction" (Pet. App. 17a) -- is exactly the opposite of the
approach chosen by Congress.

   2. Although Congress made a number of firm decisions in the Private
Ownership Act -- such as the decision to permit private ownership of
enriched uranium -- it was acutely aware of the unpredictable nature
of the future, and of the inevitable need for periodic review and
revision in the legislation.  As the Joint Committee expressed it
(Private Ownership Act Report 19):

      The future holds many uncertainties.  The Congress and the
      executive branch will have to be continually alert to the effect
      of this legislation on the competitive structure of the atomic
      energy industry.  * * * In short, and in the words of the
      framers of the Atomic Energy Act of 1946, 'It is recognized that
      many unforeseeable developments may arise in this field
      requiring changes in the legislation from time to time.'

   In light of this commitment to revisit the statute in the event of
"unforeseeable developments," it is significant that Congress has
legislated on the question of the viability of the domestic uranium
industry since the calamitous events of the late 1970's and early
1980's.  Moreover, it is significant that Congress essentially
rejected the solution to the problems of that industry imposed by the
court of appeals in the decision below.

   In March 1982, in direct response to the difficulties of the
domestic uranium industry, the Senate approved a Nuclear Regulatory
Commission authorization bill that would have limited imports of both
natural and enriched uranium to no more than 20% of domestic nuclear
fuel needs.  See 128 Cong. Rec. 5751 (1982).  When the authorization
bill went to the Conference Committee, however, the Senate's approach
was rejected in favor of a more moderate measure.  The Conference
proposal would have required DOE to modify its enrichment criteria so
as to encourage greater consumption of natural uranium (but not to
restrict enrichment of imported uranium) if imported uranium exceeded
37.5% of domestic requirements in any consecutive two-year period.
Id. at 26799-26801.  The Conference Committee further proposed that
DOE be required to report annually on the viability of the domestic
uranium industry, that DOE findings be made the trigger for
investigations under the trade laws by the United States Trade
Representative and the Secretary of Commerce, and that, during the
pendency of an investigation by the Secretary of Commerce, and new
contracts for uranium imports would be unlawful.  Ibid.

   Yet even this compromise measure endorsed by the Conference
Committee met with vehement opposition on the House floor.  See 128
Cong. Rec. 28537-28544 (1982).  Leading the debate, Congressman
Frenzel denounced restrictions on foreign uranium as an "unfair()
trade barrier" (id. at 28537) that would "bypass() the injury test
required in our (trade) law" despite the fact that "(t)he domestic
uranium industry's problem is not imports, but a low demand" (ibid.).
Any provision that might lead to mechanical imposition of restrictions
was specifically criticized as "bad economic policy, * * * bad
politics, * * * bad government" (id. at 28539 (remarks of Rep.
Gibbons)).

   The opponents of the Conference Committee proposal recognized that
"we have a problem" in the uranium industry, but argued that
restricting imports "not only misanalyze(s) the cause of the problem
but * * * will exacerbate other problems that we have not just with
trade, but also in terms of nonproliferation" (128 Cong. Rec. 28540
(1982) (remarks of Rep. Markey)).  "(L)imiting competition for foreign
uranium imports," they concluded, would "not * * * accomplish" the
rejuvenation of the domestic industry and would be "both inequitable
and shortsighted" (id. at 28543 (remarks of Rep. Gore)).  This view
prevailed and, by a vote of 241 to 148, the House of Representatives
rejected the Conference Committee report.  Id. at 28543-28544.

   Accordingly, the legislation that ultimately became Section 2210b
was rewritten.  See 128 Cong. Rec. S15136-S15317 (daily ed. Dec. 16,
1982).  As enacted, Section 2210b "simply provides for the study of
the viability of the domestic uranium mining and milling industry"
(128 Cong. Rec. H10462 (daily ed. Dec. 20, 1982) (remarks of Rep.
Frenzel)).  Congress specifically repudiated the suggestion that "any
specific level of imports should govern * * * import restrictions or
relief," and reaffirmed that the Executive Branch "should be able to
act as (it) sees fit, and not be bound by the import percentage which
generated the study" (id. at H10463 (remarks by Rep. Frenzel)).

   The 1982 legislative history takes on new meaning when considered
in light of Congress's express commitment in 1964 to respond to
unforeseen developments with new legislation.  In enacting Section
2210b in 1982, Congress directly confronted a problem that was not
foreseen in 1964 -- the sudden collapse of a mature domestic uranium
industry -- and expressly rejected a solution that would have imposed
a mandatory restriction on uranium imports.  Significantly, the reason
Congress rejected a mandatory cutoff was, at least in part, because of
a recognition that such a measure would "not accomplish" its intended
result (see p. 36, supra).  The court of appeals, by construing
Section 2201(v) to require an automatic cutoff of all enrichment
services to foreign uranium, even though the Secretary has concluded
that this would not accomplish the statutory goal, has essentially
awarded respondents the relief they were denied by Congress.  Such a
result would of course be required if it were compelled by Section
2201(v), but it is manifestly improper when the language of the
statute in facts supports the opposite conclusion.

   C. To The Extent That The Court Of Appeals' Decision Rests On
Implicit Rejection Of DOE's Factual Findings and Legal Premises, It Is
Clearly Incorrect

   1. Fact Finding

   The court of appeals may have disagreed with the Secretary's
interpretation of Section 2201(v) in part because it assumed certain
facts -- not on the basis of any record below and contrary to the
Secretary's view -- about the effects of restrictions on 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" (Pet. App. 17a
(emphasis added)).  Similarly, the court of appeals stated that "DOE
cannot accomplish its statutory purpose -- the maintenance of a viable
domestic uranium industry -- without imposing restrictions" (id. at
18a (emphasis added)), and that when the domestic industry is not
viable, DOE must impose "and continue to increase restrictions until
the domestic industry becomes viable" (ibid. (emphasis added)).

   Underlying all these statements is the unstated premise that
restrictions would lead to viability.  But the court of appeals had no
warrant for assuming or relying on any such finding.  The district
court did not find that restrictions on enrichment of foreign uranium
would lead to viability;  it had made no factual record at all,
because it held that the only fact that mattered was one as to which
the parties agreed -- that the domestic industry was not viable.  The
court of appeals ostensibly adopted the same approach, while
nevertheless apparently assuming (contrary to DOE's uncontradicted
assertion) that restrictions would produce viability.

   There are, of course, circumstances in which restrictions on
enrichment of foreign uranium would raise the price of uranium enough
to revive the domestic industry -- Section 2201(v) assumes as much.
But the Secretary concluded that in the present circumstances -- where
the world uranium market suffers from chronic oversupply, where DOE
has lost its monopoly on enrichment services, and where there is an
active secondary market in enriched uranium -- the exact opposite is
true.  On respondents' motion for summary judgment, the court of
appeals was required to accept the Secretary's factual assertions as
true.  See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S.
574, 587-588 (1986), citing United States v. Diebold, Inc., 369 U.S.
654, 655 (1962).  If the court of appeals was unwilling to accept the
Secretary's unchallenged assertions, the proper course, at most, would
have been to reverse the grant of summary judgment for respondents and
remand for further appropriate proceedings.  What was manifestly
improper, however, was in effect to try to have it both ways -- to
assert that the effect of restrictions on viability is legally
irrelevant, and yet to draw comfort from an unstated assumption that
restrictions would in fact serve the statutory goal.  To the extent
that the court of appeals may have adopted this line of reasoning, its
decision should be reversed.  /25/

   2. Viability

   The court of appeals' apparent view of the facts may also have been
influenced by an unstated assumption about the meaning of viability
under Section 2201(v).  The definition of this crucial statutory term
has never been considered in this litigation.  All parties agreed,
before the district court ruled, that the domestic uranium industry is
not viable.  Since then, respondents have maintained, and the lower
courts have held, that this stipulation, by itself, is enough to
trigger an obligation to impose restrictions.  For that reason, the
courts in this case have conducted no inquiry into the meaning of
viability.

   Nevertheless, the court of appeals may have been operating under an
implicit understanding of viability that differs from that of DOE.  In
DOE's view, a "viable" domestic uranium industry is one that can
fulfill, at an acceptable cost, the nation's needs for special nuclear
material used in both military and civilian applications.  This is
consistent with the purpose of Section 2201(v):  Congress believed
that a viable domestic uranium industry was important, not for its own
sake, but because of its contributions to national security and energy
goals (Private Ownership Act Report 30).  But whatever viability was
thought to mean in 1964, the 1982 amendments have eliminated any doubt
about the meaning of this term.  The statutory criteria adopted by
Congress in Section 2210b clearly define viability primarily in terms
of the industry's size, strength and costs.  See 42 U.S.C.
2210b(c)(2), (4), (5), (6), (7) and (8).  Similarly, the Secretary's
criteria focus on "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" (48 Fed. Reg. 45747
(1983)).  Accordingly, in making viability assessments under Section
2210b, DOE has consistently focused on the industry's ability to
fulfill the nation's nuclear energy requirements.  See, e.g., Energy
Info. Admin., Dep't of Energy, Domestic Uranium Mining and Milling
Industry:  1985 Viability Assessment 49-59 (1986);  10 C.F.R. Pt. 761
(viability criteria).

   It is possible that the court of appeals may have understood
viability differently -- not in terms of the capability of the
domestic uranium industry to serve the nation's needs, but in terms of
its profitability.  The two concepts are obviously related, because an
industry that is economically unprofitable will eventually lack the
strength and capacity to serve the nation.  But the converse is not
true:  an industry may be very small and profitable, and yet lack the
ability to satisfy the nation's nuclear requirements.  /26/ The
distinction is important because a court that assumes that viability
involves nothing but profitability would be much more likely to
assume, as the court of appeals apparently did in this case, that a
complete restriction on enrichment of foreign uranium would restore
the domestic industry to "viability." On the other hand, a court that
shares DOE's and Congress's understanding -- that the industry's
viability depends heavily on its ability to fulfill the nation's
nuclear requirements at an acceptable cost -- would be much less ready
to assume that a complete restriction on enrichment of foreign uranium
would eventually yield a "viable" domestic industry.

   Again, if there were any question about the proper meaning of
viability, the correct course would have been to reverse and remand
for further consideration of this issue.  Of course, under the court
of appeals' professed theory of Section 2201(v) the meaning of
viability is irrelevant.  Once the domestic uranium industry is found
not to be viable -- whatever that might mean -- then restrictions on
enrichment of foreign uranium "must be imposed and must become
increasingly aggessive, to the point of 100% restriction" (Pet. App.
17a).  It is on that conclusion that the Tenth Circuit's judgment must
stand or fall, and that conclusion was error.

                              CONCLUSION

   The judgment of the court of appeals should be reversed.

   Respectfully submitted.

   CHARLES FRIED

      Solicitor General

   JAMES M. SPEARS

      Acting Assistant Attorney General

   THOMAS W. MERRILL

      Deputy Solicitor General

   JOHN HARRISON

      Assistant to the Solicitor General

   LEONARD SCHAITMAN

   RICHARD A. OLDERMAN

      Attorneys

   ERIC J. FYGI

      Acting General Counsel

   HENRY A. GILL

      Deputy General Counsel for Litigation

   MARC JOHNSTON

      Assistant General Counsel for General Litigation Department of
      Energy

   FEBRUARY 1988

   /1/ The primary civilian use of uranium is as a fuel for nuclear
reactors that produce commercial electric power.  Because natural
uranium does not contain enough of the fissionable isotope U-235 to
serve as a reactor fuel, it must undergo a process known as
enrichment.  The enrichment process for commercial reactor fuel
increases natural uranium's U-235 content from approximately one
percent to approximately three percent.  See Pet. App. 4a.

   /2/ "Special nuclear material" is defined in 42 U.S.C. 2014(aa) and
includes plutonium and enriched uranium.  The term "source material"
refers to unenriched uranium or thorium (42 U.S.C. 2014(z)).

   /3/ Besides restricting ownership of "utilization facilities" such
as nuclear reactors, the 1946 Act prohibited private ownership of
"production facilities," including enrichment plants (Section 4, 60
Stat. 759).  The provisions of the 1954 Act which permit private
ownership of utilization facilities also apply to licensed production
facilities.  There are, however, currently no privately-owned
enrichment facilities in the United States.

   /4/ The criteria permitting the enrichment of foreign uranium were
reported to Congress pursuant to Section 2201(v)'s 45-day
report-and-wait provision;  Congress took no adverse action.

   /5/ The AEC was abolished in 1974 by the 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, including the enrichment services program,
were transferred to the Energy Research and Development
Administration, a predecessor of the Department of Energy (DOE)
(Section 104(c), 88 Stat. 1237).

   /6/ The spot market price was $16.30 per pound on February 17, 1988
(see Financial Times, Feb. 17, 1988, at 30).

   /7/ 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).  Trade in the secondary market
generally takes place in enriched uranium, with quantities measured in
SWU's.

   /8/ 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.  While a license from the NRC is needed to import
or transfer enriched uranium (42 U.S.C. 2073(a);  see also 42 U.S.C.
2201(b)), no provision of the Atomic Energy Act requires the NRC to
exercise its authority to protect the domestic industry or suggests
that this authority is directed to economic regulation rather than
regulation to prevent radiological hazards or in the interests of
national defense and security.  Our suggestion in the petition (at 8
n.5) that the NRC's licensing authority with respect to special
nuclear material is governed by 42 U.S.C. 2099 was in error;  Section
2099 applies to source material, not special nuclear material.

   /9/ 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 of
      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.

   /10/ The Secretary's annual determination of viability is made in a
memorandum from the Secretary to the President (see, e.g., J.A.
49-50);  the Secretary also informs the President of the Senate and
the Speaker of the House of his determination.  The Secretary bases
his determination on the viability assessment prepared by DOE's Energy
Information Administration (see, e.g., 1985 viability Assessment).

   /11/ "(H)igher grade ore and lower production costs make it
possible to buy foreign uranium for less than what it costs to produce
domestic uranium." 51 Fed. Reg. 27135 (1986).

   /12/ In the continuing resolution that funded DOE for the fiscal
year ending September 30, 1987 (Act of Oct. 18, 1986, Pub. L. No.
99-500, Section 305, 100 Stat. 1783-209), Congress provided that "no
provision of this joint resolution or the July 24, 1986, criteria
shall effect the merits of the legal position of any of the parties
concerning the question() whether section 161(v) of the Atomic Energy
Act requires restriction of enrichment of foreign-origin source
material destined for use in domestic utilization facilities * * *."
We do not rely on any provision of the joint resolution as having
ratified the Secretary's interpretation of Section 2201(v) as
expressed in the preamble to the criteria.  We have referred to the
explanation accompanying the 1986 rulemaking because it is the most
extensive and authoritative expression of the Secretary's assessment
of the likely effects of enrichment restrictions on the domestic
uranium industry.

   /13/ The court of appeals mistakenly refers to this issue as Count
IV (Pet. App. 14a).

   /14/ The Secretary commenced the 1986 rulemaking (see pp. 13-15,
supra) while the suit was proceeding in the district court.  The final
rule was adopted after the district court issued its order, while the
order was stayed by the court of appeals.  51 Fed. Reg. 27134 n.4
(1986).  This litigation does not involve a direct challenge to the
revised criteria adopted in the rulemaking.

   /15/ 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"
(Pet. App. 23a).  Although this order recognizes that the Secretary
has discretion to set the level of restrictions when such restrictions
would, in the Secretary's view, maintain the viability of the domestic
industry, it does not permit the Secretary to do what he believes is
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, and when in his view,
imposition of restrictions would further damage the domestic uranium
industry.

   /16/ The court of appeals entered an order staying the district
court's injunction on July 21, 1986.  In addition, 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 which contained a provision expressly
authorizing DOE to continue to enrich foreign uranium until this
lawsuit comes to "final judgment." Section 305, 100 Stat. 1783-209.

   /17/ The court of appeals also reviewed the district court's
decision on another count of the complaint attacking aspects of DOE's
standard form enrichment services contract 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.  See Pet. App. 6a-14a.  This part of
the court of appeals' judgment is not challenged here.

   /18/ A means-end relationship is traditionally expressed through
the word "necessary." See U.S. Const., Art. I Section 8, Cl. 18;
M'Culloch v. Maryland, 17 U.S. (4 Wheat.) 316, 421 (1819).

   /19/ Respondents have characterized our use of the total exhaustion
hypothetical as "fanciful" (Br. in Opp. 13 n.17).  But it is not
necessary to posit total exhaustion to make the point:  any severe
impairment of the domestic industry caused by factors other than
imports -- such as prohibitively high prices or an industry-wide
strike -- would present the same dilemma.  The hypothetical is
embarrassing to the court of appeals' position, precisely because it
underlines Section 2201(v)'s structure:  the provision has a purpose
and relies on a particular causal mechanism in order to achieve that
purpose.  The court of appeals reasoned as if restrictions were an end
in themselves.

   /20/ Furthermore, respondents' interpretation does not support the
judgment below.  If respondents are correct in their assertion that
Section 2201(v) requires that restrictions be imposed whenever they
are a necessary (but not sufficient) condition of viability, then the
judgment below must be reversed, because the lower courts held that
there was no need to show that restrictions are necessary to assure
viability in any sense.

   /21/ Importation and distribution of enriched uranium requires a
license from the Nuclear Regulatory Commission (NRC) (42 U.S.C.
2077(a);  see 42 U.S.C. 2073(a) (authorization to issue licenses);  42
U.S.C. 2201(b) (authorization to regulate the "possession and use" of
special nuclear material "to promote the common defense and security
or to protect health or to minimize danger to life or property")).
Licensing authority was originally conferred on the AEC by the Private
Ownership Act, which for the first time allowed private persons to own
special nuclear material (Section 5, 78 Stat. 603).  In response to
questioning from the Joint Committee at the first set of hearings on
the Private Ownership Act, the AEC's General Counsel expressed the
view that the agency's licensing authority could be employed to
prevent the importation of enriched uranium that would compete with
domestic uranium enriched by the AEC (1963 Private Ownership Hearings
30).  The licensing provisions of the Private Ownership Act, however,
contained no requirement parallel to Section 2201(v) that licensing
authority be used to assure a viable domestic industry.  Indeed, a
proposal that would have required the criteria for the issuance of
licenses to include the maintenance of a viable domestic uranium
industry (see 1964 Private Ownership Hearings 198) was specifically
rejected (see p. 32 n.23, infra).  We know of no occasion on which the
AEC or the NRC has denied a license to import or resell uranium in
order to protect the domestic uranium industry.

   /22/ There was some debate over the desirability and proper scope
of protection for the domestic industry.  The Edison Electric
Institute, an electric utility trade association, favored "a free
market situation where electric utility systems will have access to
all sources of uranium ore" but agreed that "temporary restrictions on
foreign uranium ore importation may be necessary to assure the
maintenance of a sound domestic mining industry" (1964 Private
Ownership Hearings 47).  One witness from the uranium industry stated
that his company was "not concerned about 'low cost' foreign uranium
destroying our domestic industry" and, in response to the question
whether he had any fear of foreign competition, replied that his
company "would not have any fear based on that premise" (id. at 207,
212-213 (statement or Robert W. Adams, President and Chairman of the
Board, Western Nuclear, Inc.)).

   /23/ The Joint Committee did not embrace, and Congress did not
adopt, all that Kerr-McGee suggested.  Kerr-McGee had also proposed
that the maintenance of a viable domestic uranium mining and milling
industry be added to the statutory purposes of the AEC, and that the
same objective be added to the criteria for the granting of licenses
for importation and distribution of special nuclear material and
source material (1964 Private Ownership Hearings 198).  Neither of
these suggestions was adopted.  See also n.21, supra.

   /24/ This is not to say, of course, that the agency (now DOE) has
flexibility in deciding whether to comply with the statue (see pp.
25-26, supra).  Rather, the statutory command is flexible in that it
requires a level of restrictions that depends on DOE's expert judgment
of the condition of the domestic industry and the effect that
restrictions would have on that condition.  The court of appeals seems
not to have grasped this distinction;  it interpreted DOE's finding
that it could not acheive the statutory goal through the statutory
mechanism as a decision "to abandon the statutory goal" (Pet. App.
18a).  It is the court of appeals, however, and not DOE, that has lost
sight of the provision's purpose.

   /25/ Alternatively, the court of appeals may have attributed this
view of the facts to Congress, reading into Section 2201(v) a
conclusive presumption that total restrictions, if maintained long
enough, would bring about viability.  The statute itself, however,
nowhere suggests that Congress had such an attachment to a particular
factual hypothesis, and the history of the Atomic Energy Act contains
repeated expressions of Congress's realization that the factual
circumstances surrounding nuclear power change constantly (see, e.g.,
S. Rep. 1699, 83d Cong., 2d Sess. 1 (1954)).  Moreover, to view
Congress as permanantly binding an agency with a conclusive factual
presumption is to ignore 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)).

   /26/ In this regard, it is significant that domestic production of
uranium, although significantly curtailed, has not ceased.  See Energy
Info. Admin., Dep't of Energy, Uranium Industry Annual 1986 at 36-37
(1987) (production figures).  Moreover, although the Secretary found
that the domestic industry was not viable in 1986, there are
indications that the industry may be contracting to the point where
the surviving producers will be profitable (see Energy Info. Admin.,
Domestic Uranium Mining and Milling Industry:  1986 Viability
Assessment 54-55 (1987).  But because the Section 2210b viability
criteria focus on the industry's supply capacity and not just its
financial condition, it is entirely possible that a profitable
industry would nevertheless be too small to be viable in the statutory
sense prescribed by Section 2201(v).