Court Opinion

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Opinions of the United
2008 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

5-21-2008

New Jersey v. NRC
Precedential or Non-Precedential: Precedential

Docket No. 06-5140

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                                             PRECEDENTIAL

           UNITED STATES COURT OF APPEALS
                FOR THE THIRD CIRCUIT

                Nos. 06-5140, 07-1559, 07-1756

                 STATE OF NEW JERSEY,
                                  Petitioner
                          v.
                UNITED STATES NUCLEAR
               REGULATORY COMMISSION;
               UNITED STATES OF AMERICA,
                                  Respondents

                       On Appeal from the
          United States Nuclear Regulatory Commission
                     (NRC-1: NUREG-1757)

                     Argued April 16, 2008

       Before: SLOVITER, JORDAN and ALARCÓN*,
                     Circuit Judges

                     (Filed May 21, 2008)

Kenneth W. Elwell
Andrew D. Reese (Argued)
Office of Attorney General of New Jersey
Trenton, N.J. 08625-0000

      Attorneys for Petitioner

      *
         Hon. Arthur L. Alarcón, Senior Judge, United States
Court of Appeals for the Ninth Circuit, sitting by designation.
Joseph J. McGovern (Argued)
Elena B. Zuares
Parker McCay
Marlton, N.J. 08053-0000

       Attorneys for Intervenor Petitioner Gloucester County
       Board

Charles E. Mullins (Argued)
United States Nuclear Regulatory Commission
Rockville, M.D. 20852-2738

Kathryn Kovacs
United States Department of Justice
Environmental & Natural Resources Division
Washington, D.C. 20026-20000

       Attorneys for Respondents

Matias F. Travieso-Diaz (Argued)
Pillsbury, Winthrop, Shaw & Pitman
Washington, D.C. 20037-0000

       Attorney for Intervenor Respondents Shieldalloy
       Metallurgical Corporation

                              ____

                  OPINION OF THE COURT

SLOVITER, Circuit Judge.

       The state of New Jersey petitions this court for review of
a guidance document issued by the United States Nuclear
Regulatory Commission (“NRC”) which proposes a long-term
control license for facilities that decommission under restricted
release regulations but cannot find adequate institutional
controls. We will dismiss for lack of jurisdiction.

                                2
                                 I.

        A company that holds a license from the NRC approving
its use of materials subject to that agency’s control and
authorization must seek its permission to decommission. It must
submit a decommissioning plan to the NRC that describes how it
proposes to decommission the facility. The plan must include
cost estimates and must set forth the major technical actions
needed to safely carry out decommissioning. See 10 C.F.R. §§
40.42, 50.75. The NRC staff must notify and solicit comments
from the public on the adoption of the decommissioning plan
because such adoption would amend a license. See 10 C.F.R. §
20.1405.

        Once a licensee has satisfactorily demonstrated that it has
complied with its approved decommissioning plan, it must ask
the NRC to terminate its license either for unrestricted release of
the site or for restricted release whereby controls remain in
place. A license can be terminated for restricted release only
after the licensee has met certain conditions. See 10 C.F.R. §
20.1403(a)-(e). Among those conditions is the provision of
“legally enforceable institutional controls” that will protect the
public by restricting future land use. Id. § 20.1403(b).

       The NRC’s License Termination Rule (“LTR”), found in
10 C.F.R. § 20.1401 et seq., sets forth the requirements for
decommissioning the licensees’ facilities. See Radiological
Criteria for License Termination, 62 Fed. Reg. 39,058 (July 21,
1997). At issue in this case is NUREG-1757, an NRC document
that provides guidance on how licensees may satisfy those
requirements.

       Initially, licensees had difficulty in meeting the
requirements set forth in the License Termination Rule for a
license with restricted conditions. Licensees had particular
difficulty in satisfying the institutional control requirement. In
June 2002, the NRC directed its staff to analyze these
difficulties. Thereafter, based on its analysis, the staff
recommended that “for any restricted release site that is unable
to establish acceptable institutional controls using other available

                                 3
options,” a licensee could satisfy this requirement through a
possession-only license for long-term control (“POL/LTC”).
App. at 515. The staff analysis explained that this “is the type of
institutional control, similar to EPA’s orders or permits, that
provide the necessary restrictions on access or future land use.
NRC would monitor, inspect, and enforce under the license
authority.” App. at 515.

       The NRC approved the staff’s recommendations in
November 2003, included them in its Draft Supplement 1 to
NUREG-1757 issued in September 2005, and sought public
comments on the restricted release/institutional controls issues.
See Updates to Implement the License Termination Rule
Analysis, 70 Fed. Reg. 56,940 (Sept. 29, 2005). It received
twelve public comments, including comments from New Jersey.
In September 2006, the NRC approved revising NUREG-1757
to include the POL/LTC option. The NRC posted the revised
version of NUREG-1757 on its website on October 27, 2006,
and formally announced its availability on December 28, 2006.
See Consolidated Decommissioning Guidance, 71 Fed. Reg.
78,234 (Dec. 28, 2006).

        Shieldalloy Metallurgical Corporation (“Shieldalloy”),
the licensee involved in this appeal, had filed two
decommissioning plans that were rejected by the NRC for lack
of sufficient information. Thereafter, it revised its
decommissioning plan which included the POL/LTC option.
The NRC staff accepted Shieldalloy’s revised plan in October
2006 “for the purpose of initiating the technical review of the
plan that will eventually produce both a safety evaluation report
(SER) and an environmental impact statement (EIS).” In re
Shieldalloy Metallurgical Corp., 65 N.R.C. 341, 344 (2007). On
November 17, 2006, the NRC issued a Notice of Opportunity for
a Hearing. See Notice of Consideration of Amendment Request
for Decommissioning for Shieldalloy, 71 Fed. Reg. 66,986 (Nov.
17, 2006). There were seven requests for hearings, including
those from New Jersey and Gloucester County, New Jersey. See
Shieldalloy, 65 N.R.C. at 343. The Atomic Safety and Licensing
Board (“ASLB”) granted only New Jersey’s request for a
hearing, although Gloucester County was entitled to participate
as a non-party. Id. at 343. New Jersey’s seventeen contentions

                                 4
before the ASLB challenge both the technical analyses in
Shieldalloy’s decommissioning plan and the legality of the
NRC’s decommissioning regulations, including the POL/LTC
proposed in NUREG-1757. Id. at 353-54.

        On December 22, 2006, New Jersey filed a petition for
review in this court.1 It also filed with the NRC a petition for
rulemaking and a request for a hearing on NUREG-1757. The
petition for rulemaking was adjourned by the NRC until rulings
by this court and the ASLB. The NRC denied the request for a
hearing on January 12, 2007. New Jersey has filed a second
petition for review of that ruling. On January 31, 2007, the NRC
filed a motion to dismiss New Jersey’s petitions for
jurisdictional reasons.

                                  II.

        The Administrative Orders Review Act, better known as
the Hobbs Act, 28 U.S.C. §§ 2341-2351, gives courts of appeals
“exclusive jurisdiction to enjoin, set aside, suspend (in whole or
in part), or to determine the validity of . . . all final orders of the
Atomic Energy Commission [now the NRC] made reviewable
by section 2239 of title 42.” 28 U.S.C. § 2342(4). The statutory
provision incorporated, which is in the Atomic Energy Act,
applies to any proceeding “for the granting, suspending,
revoking, or amending of any license . . . [and] for the issuance
or modification of rules and regulations dealing with the
activities of licensees . . . .” 42 U.S.C. § 2239(a)(1)(A). It
subjects to judicial review “[a]ny final order entered in any
[NRC] proceeding of the kind specified in subsection (a).” Id. §
2239(b)(1).
        The NRC argues that NUREG-1757 is a non-binding
guidance document, and not a “final order.” Generally, “two

       1
         New Jersey filed an identical petition for review on
February 23, 2007, in the event this court were to determine that
the time for appeal was triggered by the December 28, 2006
Federal Register notice formally announcing the availability of the
revised NUREG-1757, rather than the October 27, 2006 NRC
website publication of the revised NUREG-1757.

                                   5
conditions must be satisfied for agency action to be ‘final’:
First, the action must mark the ‘consummation’ of the agency’s
decisionmaking process–it must not be of a merely tentative or
interlocutory nature. And second, the action must be one by
which ‘rights or obligations have been determined,’ or from
which ‘legal consequences will flow.’” Bennett v. Spear, 520
U.S. 154, 177-78 (1997) (internal citations omitted). An action
does not constitute final agency action if it has “no direct
consequences’ and serve[s] ‘more like a tentative
recommendation than a final and binding determination.’” Id. at
178 (citation omitted).

      NUREG-1757 is not a final order because it is not binding
and does not determine any rights or obligations or have legal
consequences. It is not a rule or regulation. In fact,
NUREG-1757 explicitly disclaims any legal effect. It provides:

      Legally binding regulatory requirements are stated only in
      laws; NRC regulations; licenses, including technical
      specifications; or orders, not in NUREG-series
      publications.

App. at 66.
      ...

      This NUREG is not a substitute for NRC regulations, and
      compliance with it is not required. The NUREG
      describes approaches that are acceptable to NRC staff.
      However, methods and solutions different than those in
      this NUREG will be acceptable, if they provide a basis
      for concluding that the decommissioning acts are in
      compliance with NRC regulations.

App. at 73 (available at http://www.nrc.gov/reading-rm/doc-
collections/nuregs/staff/sr1757/v1/sr1757v1r2.pdf).

       Thus, a licensee is under no obligation to follow the
guidance, and the NRC is also not required to grant a proposed
license merely because a decommissioning plan follows the
guidance in NUREG-1757. Instead, as is happening in the
Shieldalloy administrative action, any interested party may argue

                                6
that a decommissioning plan in accordance with NUREG-1757
does not comply with the applicable regulatory requirements.
Moreover, as demonstrated by the NRC staff’s retraction of one
portion of NUREG-1757 based on experience applying it to
Shieldalloy’s decommissioning plan, NUREG-1757 can be
modified at any time. See Consolidated Decommissioning
Guidance, 72 Fed. Reg. 46,102 (Aug. 16, 2007) (describing
development of guidance as “an iterative process”).

        New Jersey argues that NUREG-1757 is a final order
based on this court’s decision in Limerick Ecology Action, Inc.
v. NRC, 869 F.2d 719, 734 (3d Cir. 1989), where we stated that
“[t]he agency’s label of an agency action, although one factor to
be considered, does not control whether the action is in fact a
rulemaking. Instead, ‘it is the substance of what the [agency]
has purported to do and has done which is decisive.’” (internal
citations omitted). In Limerick, we considered three factors to
determine whether an NRC action was a substantive rule or
policy statement: whether the action was intended to be (1)
finally determinative of the issues; (2) not subject to challenge in
individual licensing proceedings; and (3) subject to notice and
comment. Id. at 734-35. In reviewing the final order in that case
that issued an operating license, we held that a policy statement
upon which the NRC had relied “should not be accorded the
stature of a rule,” id. at 735, for even though it “more closely
approximates a substantive rule than a policy statement,” id., the
NRC had described it as a non-binding policy statement and “it
is contrary to the intent of the APA to force the public to divine
the obfuscated intention of the NRC,” id. at 736.

       We note that the first Limerick factor is not met here.
NUREG-1757 does not “determine” the rights of any party but
rather guides licensees regarding ways to obtain NRC approval
of certain actions with respect to decommissioning. Moreover,
the NRC has characterized NUREGs and other NRC guidance
documents as “routine agency policy pronouncements that do
not carry the binding effect of regulations. Such guidance
documents merely constitute NRC Staff advice on one or more
possible methods licensees may use to meet particular regulatory
requirements. These guides, however, do not themselves have
the force of regulations for they do not impose any additional

                                 7
legal requirements upon licensees. Licensees remain free to use
other means to accomplish the same regulatory objectives.” In
re Int’l Uranium Corp., 51 N.R.C. 9, 19 (2000) (internal citations
omitted). Although NUREG-1757 was submitted for public
notice and comment, that was done in this case as a matter of
agency discretion.

                               III.

       New Jersey also argues that the NRC’s failure to conduct
a required Environmental Impact Statement (“EIS”) for the
revised NUREG-1757 gives us jurisdiction pursuant to Lujan v.
Defenders of Wildlife, 504 U.S. 555, 572 n.7 (1992). Under the
National Environmental Policy Act (“NEPA”), all federal
agencies are required to prepare an EIS for any proposed major
federal action “significantly affecting the quality of the human
environment.” 42 U.S.C. § 4332(2)(C). One categorical
exclusion from the NEPA requirement covers “[i]ssuance or
amendment of guides for the implementation of regulations in
this chapter, and issuance or amendment of other informational
and procedural documents that do not impose any legal
requirements.” 10 C.F.R. § 51.22(c)(16). Because
NUREG-1757 is not a binding document but a guide without
legal obligations, it is covered by this exclusion.

        New Jersey acknowledges that the NRC will conduct
site-specific environmental analyses when licensees
decommission in accordance with NUREG-1757. Nonetheless,
it argues that the NRC was required to evaluate the cumulative
impact of all potential licensing facilities that may opt for the
POL/LTC proposed in NUREG-1757 rather than be permitted to
“segment[] the LTC license program into individual sites.” N.J.
Br. at 53. This is not the time to consider New Jersey’s concept
of “cumulative impact.” See Soc’y Hill Towers Owners’ Ass’n
v. Rendell, 210 F.3d 168, 180 (3d Cir. 2000). Only Shieldalloy
has applied for a POL/LTC, and NEPA does not require a
comprehensive impact statement covering merely contemplated
projects. Because New Jersey argues that the NRC should have
conducted an EIS in conjunction with its issuance of NUREG-
1757, and we have held that we have no jurisdiction over that
challenge at this time, we have no independent jurisdiction to

                                8
review its challenge to the failure to conduct an EIS.2

                                IV.

       For the above-stated reasons, we will dismiss New
Jersey’s petitions for review for lack of jurisdiction.

New Jersey v. NRC, Nos. 06-5140, 07-1559, 07-1756,
JORDAN, Circuit Judge, concurring

       I join Parts I, II, and IV of the majority opinion. I also
agree whole-heartedly with the conclusion in Part III that we
lack jurisdiction to consider New Jersey’s argument that the
Nuclear Regulatory Commission (“NRC”) was required under
the National Environmental Policy Act (“NEPA”) to issue an
Environmental Impact Statement with NUREG-1757. If Part III
were confined to an expression and explanation of that
conclusion, I would have no occasion to write separately.
Unfortunately, however, the majority goes on in Part III to
address the merits of New Jersey’s argument. It reviews a
NEPA exclusion in an NRC regulation and opines that,
“[b]ecause NUREG-1757 is not a binding document but a guide
without legal obligations, it is covered by [that] exclusion.”
Regardless of whether that is a sound interpretation and
application of the regulation, I feel compelled to concur, rather
than join Part III, since I am persuaded that we ought not opine
on the merits of a matter that we have no jurisdiction to consider.

       2
         We also lack jurisdiction over New Jersey’s petition for
review of the NRC’s denial of New Jersey’s request for a hearing
to rescind portions of NUREG-1757, because that NUREG was not
entered in a proceeding for the issuance of a license or rule, which
is a prerequisite for jurisdiction under the Hobbs Act. See 28
U.S.C. § 2342(4); 42 U.S.C. § 2239(a)(1)(A), (b)(1).

                                 9