Opinion ID: 526733
Heading Depth: 2
Heading Rank: 1

Heading: Compliance with the Act and with UCS I

Text: 15 Petitioner's primary challenge to the Commission's revised backfit rule is that, notwithstanding the added provisions, the rule fails to constrain the Commission from injecting cost considerations in determining whether a backfit is necessary to provide adequate protection to the public. Petitioner urges that the revised rule, to pass muster under the Act and UCS I, must include a set of objective criteria to distinguish safety improvements that are necessary for adequate protection of the public (cost-independent standards) and those that go beyond adequate protection (cost-dependent standards). 16 As a threshold matter, the parties dispute the proper standard for reviewing the Commission's interpretation of the Act. We need not decide this question, however, because this case does not involve a question of statutory construction; any distinction would accordingly not make a difference in this case. This court in UCS I found that, regardless of the standard of review, the Act's meaning was clear. See 824 F.2d at 113-14. Because this court's UCS I interpretation of the Act now governs this case, the only question is whether the rule at issue violates that interpretation or is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law, 5 U.S.C. Sec. 706(2)(A). 17 On the merits of petitioner's facial challenge, we find the Commission's revised backfit rule in full accord with the Act and with UCS I. In UCS I, this court construed the Act to establish a two-tiered approach to backfitting: the Commission may consider costs when imposing backfits that go beyond the provision of adequate protection, but may not consider costs when backfits are required to ensure adequate protection or in determining what constitutes adequate protection. See 824 F.2d at 118. The Commission's revised rule explicitly states that backfit decisions will be cost-independent where regulatory action is necessary to ensure that the facility provides adequate protection to the health and safety of the public and is in accord with the common defense and security, 10 C.F.R. Sec. 50.109(a)(4)(ii), and where the regulatory action involves defining or redefining what level of protection to the public health and safety or common defense and security should be regarded as adequate, id. Sec. 50.109(a)(4)(iii); see also id. Sec. 50.109(a)(5). These changes make clear that economic costs may not be considered when action is necessary to restore a plant to the requisite level of adequate protection or when the level of protection must be increased to be considered adequate. Consequently, we hold that these provisions, on their face, are sufficient to implement the two-tiered regulatory structure mandated by this court's interpretation of the Act in UCS I. See 824 F.2d at 114-18. 18 Petitioner takes comfort in our remark in UCS I that the 1985 rule is an exemplar of ambiguity and vagueness and does not speak in terms that constrain the Commission from operating outside the bounds of the statutory scheme, 824 F.2d at 119. Petitioner essentially argues that, because the 1988 rule is substantially the same as the 1985 rule, it suffers from the same flaws and must therefore also be vacated. 19 This argument must fail, however, not only because it is based on the false premise that the 1988 rule is legally identical to the 1985 rule, but also because it misreads our opinion in UCS I. The remainder of the paragraph containing the remark quoted above directs the Commission only to adopt a rule that tracks the requirements of the Atomic Energy Act, 824 F.2d at 119. We then reiterated the two-tiered regulatory structure and concluded that [a]ny future rule adopted by the Commission should explicitly recognize and comply with this statutory scheme, id. at 120. Because the Commission's revised rule tracks the requirements and the two-tiered regulatory scheme identified by this court in UCS I, the Commission has fully complied with our instructions on remand. Moreover, the specific defect with the 1985 rule was its vulnerability to impermissible interpretations, such as the one found in the Commission's Statement of Considerations accompanying the 1985 rule. See id. at 119; id. at 122 (Williams, J., concurring). In revising the rule to preclude the impermissible interpretation and remove the ambiguities identified in UCS I, see 53 Fed.Reg. at 20,608-09 (discussing the scope and meaning of the exceptions to the rule), the Commission has done precisely what this court asked it to do. 20 Petitioner's claim that the revised rule must contain a set of objective standards for determining what constitutes adequate protection finds no support in this court's opinion in UCS I. Indeed, the court narrowly instructed the Commission merely to be more faithful to the statutory provisions it has the responsibility to apply and to track[ ] the requirements of the Atomic Energy Act. 824 F.2d at 119. Because the relevant provisions of the Act itself do not define adequate protection, we cannot say that the Commission, by declining to define by rulemaking when a given level of safety is adequate, has violated our instruction in UCS I to track the requirements of the Act. 21 In addition, we note that the regulatory requirements for reactor licensing, see 10 C.F.R. Part 50, implicitly constitute a significant body of background standards for the imposition of backfit requirements, since backfits necessary to ensure license compliance are specifically exempted from the cost-benefit test of the rule, see 10 C.F.R. Sec. 50.109(a)(4)(i). As the Commission explained when issuing the rule: 22 The threshold decision in considering a proposed backfit, and very often the only decision that need be made, is not whether adequate protection is at stake but rather whether the facility is in compliance with the Commission's requirements and the licensee's written commitments. 23    [C]ompliance with such regulations and guidance may be presumed to assure adequate protection as a minimum. 24 53 Fed.Reg. at 20,605-06. The compliance exception, see 10 C.F.R. Sec. 50.109(a)(4)(i), will therefore typically provide a rational and circumscribed basis for precluding the Commission from considering costs in backfit decisions. Where the presumption of adequate protection due to regulatory compliance is overcome by, for instance, new information which indicates that improvements are needed to ensure adequate protection, 53 Fed.Reg. at 20,606, the other exceptions to the cost-benefit requirement, see 10 C.F.R. Sec. 50.109(a)(4)(ii), (iii), mandate a cost-independent assessment of the safety significance of the proposed backfit before the Commission introduces, if it does at all, cost considerations into the decisionmaking process. 25 We also agree with the Commission that the adequate protection standard may be given content through case-by-case applications of its technical judgment rather than by a mechanical verbal formula or set of objective standards, as urged by petitioner. See 53 Fed.Reg. at 20,605-06. Due to changes in technology and variations in circumstances, [t]here does not exist, and cannot exist, at least not yet, a generally applicable definition of 'adequate protection' which would guard against every possible misuse of the phrase.    Congress did not define 'adequate protection,' nor did it command the Commission to define it. 53 Fed.Reg. at 20,606. Indeed, petitioner concedes that [t]he concept of what constitutes adequate protection is an evolving standard that must keep pace with developing information and with improvements in nuclear power technology over time. Petitioner's Reply Brief at 3 (emphasis added). We elect not to second-guess the Commission's discretion in mak[ing] sound judgments about what 'adequate protection' requires, by relying on expert engineering and scientific judgment, acting in light of all relevant and material information. 53 Fed.Reg. at 20,606. As the Supreme Court has long recognized: 26 [P]roblems may arise in a case which the administrative agency could not reasonably foresee, problems which must be solved despite the absence of a relevant general rule.    Or the problem may be so specialized and varying in nature as to be impossible to capture within the boundaries of a general rule. In those situations, the agency must retain power to deal with the problems on a case-by-case basis if the administrative process is to be effective.    [T]he choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency. 27 SEC v. Chenery Corp., 332 U.S. 194, 202-03, 67 S.St. 1575, 1580, 91 L.Ed. 1995 (1947) (citation omitted); see also NLRB v. Bell Aerospace Co., 416 U.S. 267, 294-95, 94 S.Ct. 1757, 1771-72, 40 L.Ed.2d 134 (1974). The determination of what constitutes adequate protection under the Act, absent specific guidance from Congress, is just such a situation where the Commission should be permitted to have discretion to make case-by-case judgments based on its technical expertise and on all the relevant information. Cf. Siegel v. Atomic Energy Commission, 400 F.2d 778, 783 (D.C.Cir.1968) (the Act is virtually unique in the degree to which broad responsibility is reposed in the administrative agency, free of close prescription in its charter as to how it shall proceed in achieving the statutory objectives). 28 In short, in seeking a set of objective criteria for determining what level of protection is adequate, petitioner is asking the Commission to do something that neither the Act nor this court's prior decision in UCS I requires it to do. The Commission's reasoning supports the revised rule, and, given the deference accorded agency rulemaking under the APA and the presumption of administrative regularity, we conclude that the rule, on its face, complies with the Act and with UCS I. 29 Finally, in a last-ditch attempt to assail the Commission's revised rule, petitioner points to two recent applications of the rule that, we are told, demonstrate that the rule remains vulnerable to arbitrary applications and impermissible interpretations. Even assuming arguendo that we were to find that these instances were properly before this court and constitute specific misapplications of the rule, however, we find they suggest, at most, only that the rule might in the future be misapplied.. Such arguments are of course inappropriate here, where the rule is being challenged on its face. See, e.g., Massachusetts v. NRC, 856 F.2d 378, 384 (1st Cir.1988). 30