Opinion ID: 2477
Heading Depth: 2
Heading Rank: 2

Heading: Whether the NRC's Order is an Exemption

Text: Whether the challenged order is an exemption, as the NRC has labeled it and thus beyond our jurisdiction, or is properly regarded as an amendment and within our Hobbs Act jurisdiction, is itself an issue that is within our jurisdiction. See Estate of Pew v. Cardarelli, 527 F.3d 25, 28 (2d Cir.2008) (As always, we have jurisdiction to determine our jurisdiction.). The particular label placed upon [an order] by [an agency] is not necessarily conclusive, for it is the substance of what the [agency] has purported to do and has done which is decisive. Columbia Broad. Sys., Inc. v. United States, 316 U.S. 407, 416, 62 S.Ct. 1194, 86 L.Ed. 1563 (1942). Still, the NRC's labels, though not dispositive, deserve deference when those labels are reasonable. The NRC, in deciding whether to treat an order as an exemption, applies its regulations governing when exemptions can be granted. See 10 C.F.R. § 50.12. An agency's application of its own regulations is controlling unless plainly erroneous or inconsistent with the regulation[s]. Auer v. Robbins, 519 U.S. 452, 461, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997) (internal quotation marks omitted); see also Fed. Express Corp. v. Holowecki, ___ U.S. ___, 128 S.Ct. 1147, 1155, 170 L.Ed.2d 10 (2008) ([T]he agency is entitled to ... deference when it adopts a reasonable interpretation of regulations it has put in force.). We serve as an important check on the agency's decisionmaking process, but ultimately the agency's judgment, if reasonable, must prevail. Here, we think the NRC reasonably applied its regulations when it classified the relief granted to Indian Point as an exemption. [4] Consistent with 10 C.F.R. § 50.12, the agency concluded that treating the challenged order as an exemption was authorized by law, presented no undue risk to public health and safety, and was consistent with the common defense and security. As required by 10 C.F.R. § 50.12, the NRC also found that special circumstances justified this exemption: specifically, that the underlying purpose of the fire safety rule would still be satisfied after the modification. See 10 C.F.R. § 50.12(a)(2)(ii). Although it appears that the NRC could have alternatively treated the order as an amendment to Indian Point's license, the Commission applied its regulations reasonably in opting instead to grant Indian Point an exemption. Neither Petitioners nor amicus curiae New York State have persuaded us otherwise. Petitioners argue that this exemption should be deemed an amendment because it is permanent, noting that the First Circuit found that the exemption at issue in Commonwealth of Massachusetts did not amount to a license amendment because it had only temporarily exempted the licensee from a rule. 878 F.2d at 1521. But the NRC had granted that exemption pursuant to 10 C.F.R. § 50.12(a)(2)(v), which allows exemptions providing temporary relief from the applicable regulation. 878 F.2d at 1521 & n. 7. In citing the temporary nature of the exemption before it, the First Circuit confirmed that the NRC had applied its regulations reasonably, but did not announce a general standard for distinguishing exemptions from amendments. Nor would such a standard comport with the NRC regulations: a requirement that exemptions must be temporary would conflict with the five special circumstances that allow for exemptions even if the relief is permanent. See 10 C.F.R. § 50.12(a)(2)(i)-(iv), (vi); supra note 1. We also reject New York State's position that a modification, purported to be an exemption, should be treated as an amendment if it relaxes a safety standard. The State's position may or may not be sound policy, but it lacks a basis in law. [5] Petitioners' claim that the NRC requires hearings for exemptions involving material questions directly related to an agency's licensing action is also unavailing. Pet'rs' Reply Br. at 19. Petitioners rely solely on In re Private Fuel Storage, L.L.C., 53 N.R.C. 459 (2001), to demonstrate this alleged NRC practice, but Private Fuel Storage concerned the unrelated issue of whether claims normally appropriate for an exemption, and thus not warranting a hearing, nonetheless can be included in an ongoing licensing hearing. Id. at 461, 466. Here, there is no such hearing. In sum, none of the standards offered by Petitioners and the State for deciding when to treat exemptions as amendments withstand scrutiny. More importantly, none of their proffered distinctions between exemptions and amendments establish that the NRC acted unreasonably in considering the modification at issue in this case to be an exemption. We recognize that, under the NRC regulations, little appears to distinguish an exemption from an amendment. But as long as the NRC has applied its regulations reasonably, we will not displace the agency's judgment with our own as to whether an exemption or amendment is warranted. Accordingly, we defer to the NRC's classification in this case and hold that the modification order that the Commission granted to Entergy and labeled an exemption is indeed an exemption. Petitioners challenge only that exemption in this appeal. Because we lack jurisdiction under the Hobbs Act over exemptions, we must dismiss the petition. Finally, because we lack jurisdiction, we also express no opinion as to whether the NRC's hearing denial was proper, whether the exemption at issue is arbitrary and capricious, or the other issues raised by Petitioners. We hold only that Petitioners are indeed challenging an exemption, and that exemptions cannot be reviewed under the Hobbs Act. [6]