Public Watchdogs v. Southern California Edison Co. ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PUBLIC WATCHDOGS, a California No. 19-56531
501(c)(3) corporation,
Plaintiff-Appellant, D.C. No.
3:19-cv-01635-
v. JLS-MSB
SOUTHERN CALIFORNIA EDISON
COMPANY; SAN DIEGO GAS & OPINION
ELECTRIC COMPANY; SEMPRA
ENERGY; HOLTEC INTERNATIONAL;
U.S. NUCLEAR REGULATORY
COMMISSION,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of California
Janis L. Sammartino, District Judge, Presiding
Argued and Submitted June 3, 2020
Pasadena, California
Filed December 29, 2020
2 PUBLIC WATCHDOGS V. S. CAL. EDISON
Before: Johnnie B. Rawlinson and N. Randy Smith,
Circuit Judges, and Edward R. Korman,* District Judge.
Opinion by Judge N. Randy Smith
SUMMARY**
Hobbs Act
The panel affirmed the district court’s dismissal of a
complaint for lack of subject-matter jurisdiction under the
Administrative Orders Review Act, frequently referred to as
the Hobbs Act.
Under the Hobbs Act, courts of appeals have exclusive
jurisdiction to enjoin, set aside, suspend (in whole or in part),
or to determine the validity of all final orders of the United
States Nuclear Regulatory Commission made reviewable by
section 2239 of title 42. Section 2239 also provides for
Hobbs Act review of “[a]ny final order entered in any
proceeding,” 42 U.S.C. § 2239(b)(1), “for the granting,
suspending, revoking, or amending of any license . . . and in
any proceeding for the issuance or modification of rules and
regulations dealing with the activities of licensees,” id.§ 2239(a)(1)(A).
*
The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
PUBLIC WATCHDOGS V. S. CAL. EDISON 3
Plaintiff-Appellant Public Watchdogs, a non-profit
corporation advocating for public safety, brought an action
against the NRC and others alleging claims related to the
decommissioning of two nuclear generating units at San
Onofre Nuclear Generating Station (SONGS). In 2015, after
the units ceased operating, the NRC approved changes to the
Facility Operating Licenses by amending the licensing
agreements with Southern California Edison Company and
San Diego Gas & Electric Company. The 2015 License
Amendments required the utility defendants to take actions
necessary to decommission the plants and continue to
maintain the facility, including the storage, control and
maintenance of the spent nuclear fuel, in a safe condition. As
part of the decommissioning plan, the utility defendants
elected to use private defendant Holtec International’s HI-
STORM UMAX Canister Storage System (“Holtec System”),
a canister-based spent nuclear fuel storage system that had
been approved for the storage of spent nuclear fuel by the
NRC in a Certificate of Compliance. Public Watchdog
sought to enjoin the defendants’ allegedly negligent
decommissioning activities at SONGS and challenged,
among other things, the NRC’s selection of Holtec
International as the supplier of the spent nuclear fuel storage
system and the NRC’s grant of the 2015 License
Amendments.
The panel held that the Hobbs Act must be interpreted
broadly to encompass not only all final NRC actions in
licensing proceedings, but also all decisions that are
preliminary, ancillary, or incidental to those licensing
proceedings. Because Public Watchdogs’s complaint
challenged final orders of the NRC related to licensing, the
NRC’s enforcement decisions related to NRC licenses and
certifications, and conduct licensed or certified by the NRC,
4 PUBLIC WATCHDOGS V. S. CAL. EDISON
Public Watchdogs’s action fell squarely within the scope of
the Hobbs Act.
Specifically, the panel held that the district court correctly
determined that Public Watchdogs’s claim under the
Administrative Procedure Act (“APA”) directly challenged
the grant of the 2015 License Amendments and the
Certificate of Compliance for the Holtec System. The panel
held that the 2015 License Amendments and the Certificate
of Compliance were final orders of the NRC and related to
the grant or amendment of a license or the issuance or
modification of rules and regulations dealing with the
activities of licensees. Accordingly, under the Hobbs Act, the
court of appeals had exclusive jurisdiction to enjoin, set aside,
suspend or to determine the validity of those orders. The
district court therefore correctly found that it lacked subject-
matter jurisdiction over Public Watchdogs’s claim brought
under the APA against the NRC to the extent it challenged
the 2015 License Amendments and the Certificate of
Compliance for the Holtec System.
The panel rejected Public Watchdog’s argument that the
district court had subject-matter jurisdiction over its APA
claim because other agency actions, including a decision
exempting Holtec from certain pre-approval requirements for
canister design changes, fell outside the scope of the Hobbs
Act. The panel held that even assuming Public Watchdogs’s
APA claim did not challenge the grant of the 2015 License
Amendments or the Certificate of Compliance for the Holtec
System, Public Watchdogs’s APA claim related to other
agency actions still fell within the scope of the Hobbs Act
because it challenged the NRC’s enforcement “decisions not
to suspend” a license or licensed operations and sought relief
PUBLIC WATCHDOGS V. S. CAL. EDISON 5
that should have first been pursued before the NRC pursuant
to 10 C.F.R. § 2.206.
The panel held that Public Watchdogs’s claims against
private defendants, Holtec International and the utility
defendants, fell within the scope of the Hobbs Act. The panel
held that despite Public Watchdogs’s artful pleading, it was
clear its claims against these private defendants were an
attempt to challenge the 2015 License Amendments, the
Certificate of Compliance for the Holtec System, and actions
taken by the licensees under the authority of both of those
final NRC orders. Public Watchdogs, therefore, could not
avoid the Hobbs Act’s exclusive avenue of judicial review by
pleading its challenge to the 2015 License Amendments and
the Certificate of Compliance for the Holtec System as a
public liability action under the Price-Anderson Act, or as a
public nuisance claim or a strict products liability claim under
California law.
COUNSEL
Eric J. Beste (argued) and Charles G. La Bella, Barnes &
Thornburg LLP, San Diego, California, for Plaintiff-
Appellant.
Justin D. Heminger (argued), Senior Litigation Counsel; Eric
Grant, Deputy Assistant Attorney General; Jeffrey Bossert
Clark, Assistant Attorney General; Andrew P. Averbach,
Solicitor, and James E. Adler, Senior Attorney, U.S. Nuclear
Regulatory Commission; Environment & Natural Resources
Division, United States Department of Justice, Washington,
D.C.; for Defendant-Appellant U.S. Nuclear Regulatory
Commission.
6 PUBLIC WATCHDOGS V. S. CAL. EDISON
James R. Evans Jr. (argued), Edward J. Casey, and Alexander
Akerman, Alston & Bird LLP, Los Angeles, California, for
Defendants-Appellees Southern California Edison Company,
San Diego Gas & Electric Company, Sempra Energy, and
Holtec International.
OPINION
N.R. SMITH, Circuit Judge:
Under the Administrative Orders Review Act—frequently
referred to as the Hobbs Act—courts of appeals have
“exclusive jurisdiction to enjoin, set aside, suspend (in whole
or in part), or to determine the validity of . . . all final orders
of the [United States Nuclear Regulatory Commission
(“NRC”)] made reviewable by section 2239 of title 42.”
28 U.S.C. § 2342(4). Section 2239 also provides for Hobbs
Act review of “[a]ny final order entered in any proceeding,”
42 U.S.C. § 2239(b)(1), “for the granting, suspending,
revoking, or amending of any license . . . and in any
proceeding for the issuance or modification of rules and
regulations dealing with the activities of licensees,” id.§ 2239(a)(1)(A). Because the scope of the Hobbs Act must be
read broadly, the Hobbs Act thus encompasses not only all
final NRC orders in licensing proceedings, but all NRC
decisions that are preliminary, ancillary, or incidental to those
licensing proceedings. See Fla. Power & Light Co. v. Lorion,
470 U.S. 729, 737, 743 (1985); Gen. Atomics v. U.S. Nuclear
Regulatory Comm’n, 75 F.3d 536, 539 (9th Cir. 1996).
Plaintiff–Appellant Public Watchdogs, a non-profit
corporation advocating for public safety, appeals the district
court’s dismissal with prejudice of its first amended
PUBLIC WATCHDOGS V. S. CAL. EDISON 7
complaint for a lack of subject-matter jurisdiction under the
Hobbs Act. Because Public Watchdogs’s complaint
challenges final orders of the NRC related to licensing, NRC
enforcement decisions related to NRC licenses and
certifications, and conduct licensed or certified by the NRC,
Public Watchdogs’s action falls squarely within the scope of
the Hobbs Act. Therefore, we affirm the district court’s
dismissal of Public Watchdogs’s first amended complaint
with prejudice for a lack of subject-matter jurisdiction under
the Hobbs Act.
I. BACKGROUND
A. The NRC Regulates the Construction and Operation
of Nuclear Power Plants and Spent Fuel Storage
Facilities, and the Storage of Spent Nuclear Fuel
The NRC is an independent regulatory commission
established by Congress in the Energy Reorganization Act of
1974 (“ERA”). See 42 U.S.C. § 5841(a)(1). The ERA
transferred “all the licensing and related regulatory functions
of the Atomic Energy Commission” to the NRC. Id.§ 5841(f). Under the Atomic Energy Act of 1954 (“AEA”),
the NRC is tasked with licensing and regulating civilian
storage and use of radioactive material to promote the
common defense and security and public health and safety.
See id. § 2201(b), (h), (i); see also id. §§ 2131–33.
“Consistent with its administrative mandate, the NRC is
empowered to promulgate rules and regulations governing the
construction and operation of nuclear power plants.” Cnty. of
Rockland v. U.S. Nuclear Regulatory Comm’n, 709 F.2d 766,
769 (2d Cir. 1983); see also U.S. Nuclear Regulatory
Comm’n, NUREG-1350, vol. 31, 2019–2020 Information
Digest 34 (2019) [hereinafter NRC Information Digest] (“The
8 PUBLIC WATCHDOGS V. S. CAL. EDISON
NRC establishes requirements for the design, construction,
operation, and security of U.S. commercial nuclear power
plants.”). Accordingly, the NRC has promulgated extensive
regulations governing the agency’s issuance of licenses to
construct and operate nuclear power plants and fuel storage
facilities and to possess spent nuclear fuel. See 10 C.F.R.
Parts 50, 52, 72.
If a person’s interests will be affected by an NRC
proceeding “for the granting, suspending, revoking, or
amending of any license or construction permit” or by a
“proceeding for the issuance or modification of rules and
regulations dealing with the activities of licensees,” then that
person may request a hearing before the NRC. 42 U.S.C.
§ 2239(a)(1)(A). However, the hearing request must state
“that one or more of the acceptance criteria in the . . . license
ha[s] not been, or will not be met, and the specific operational
consequences of nonconformance that would be contrary to
providing reasonable assurance of adequate protection of the
public health and safety.” See id. § 2239(a)(1)(B)(ii).
Regardless of whether a hearing is requested or actually held,
the NRC’s final order in these proceedings is subject to initial
judicial review in the courts of appeals under the Hobbs Act.
See id. § 2239(b)(1); 28 U.S.C. § 2342(4); see also Lorion,
470 U.S. at 737 (“Congress intended to provide for initial
court of appeals review of all final orders in licensing
proceedings whether or not a hearing before the [NRC]
occurred or could have occurred.”).
Aside from the NRC’s licensing and rule-making
responsibilities, the agency is also responsible for:
(1) “conducting criminal, civil, and administrative
investigations of alleged violations by NRC licensees”;
(2) “inspecting NRC licensees to ensure adequate
PUBLIC WATCHDOGS V. S. CAL. EDISON 9
performance of safety and security programs”; and
(3) “enforcing NRC regulations and the conditions of NRC
licenses and imposing, when necessary, civil sanctions and
penalties.” NRC Information Digest at 5; see also 42 U.S.C.
§ 2282 (authorizing the NRC to issue civil penalties for
licensing or certification violations). Relatedly, the NRC may
issue orders modifying, suspending, or revoking a license to
remedy license violations or other “potentially hazardous
conditions.” See 10 C.F.R. § 2.202. The NRC regulations also
provide a mechanism through which “[a]ny person” may file
a request with the NRC to “institute a proceeding pursuant to
§ 2.202 to modify, suspend, or revoke a license, or for any
other action as may be proper.” 10 C.F.R. § 2.206(a).
The NRC also regulates the storage of spent nuclear fuel
(“SNF”), which is the radioactive byproduct that results from
the “burning” of nuclear fuel (i.e., uranium fuel rods bundled
into fuel assemblies) in nuclear reactors. See U.S. Nuclear
Regulatory Comm’n, NUREG/BR-0528, Safety of Spent Fuel
Storage at 1 (April 2017) [hereinafter NRC Spent Fuel
Storage]; see generally 10 C.F.R. Part 72. After SNF is
removed from a nuclear reactor, it is first stored in deep pools
of continuously flowing water that cool the spent fuel. NRC
Information Digest at 70–71; NRC Spent Fuel Storage at 1.
Once the SNF has cooled sufficiently, it is often transferred
into dry casks. Information Digest 71–72; NRC Spent Fuel
Storage at 1–2. Dry casks are “typically made of leak-tight,
welded, and bolted steel and concrete surrounded by another
layer of steel or concrete.” NRC Information Digest at 68.
There are two basic designs of dry casks that are widely used
to store SNF: (1) a canister-based system that utilizes an inner
steel canister that contains the SNF that is then surrounded by
three feet or more of steel and concrete; and (2) a “bolted
cask system” that does not have an inner canister but instead
10 PUBLIC WATCHDOGS V. S. CAL. EDISON
encases the SNF in “thick steel shells, sometimes with several
inches of radiation shielding inside.” NRC Spent Fuel Storage
at 2. The dry casks are normally stored on site in facilities
called independent spent fuel storage installations (“ISFSI”).
NRC Information Digest at 68.
The NRC regulates the on-site storage of SNF in one of
two ways: (1) it grants a site-specific license based on a
safety review of the technical requirements and operating
conditions for the specific ISFSI; or (2) it issues a general
license that authorizes the licensee to store SNF in dry storage
casks certified by the NRC for the storage of SNF. See id.;
see also 10 C.F.R. § 72.210 (issuing a general license for the
storage of spent fuel in an ISFSI for individuals “authorized
to possess or operate nuclear power reactors under” 10 C.F.R.
Parts 50 or 52). The NRC regulations impose several
conditions on a general licensee, including requiring the
licensee to use only “casks approved under the provisions of
this part” and ensuring the cask used by the licensee
“conforms to the terms, conditions, and specifications of a
[Certificate of Compliance] or amended [Certificate of
Compliance] listed in § 72.214.” 10 C.F.R. § 72.212(a)(2),
(b)(3). Once the NRC approves a dry cask for the storage of
SNF under the specific conditions noted in the Certificate of
Compliance, it adds the approved cask system to a list of
approved storage systems. See id. § 72.214 (listing approved
casks for storage of SNF).
Prior to the NRC’s approval of a cask for storage of SNF
in a Certificate of Compliance, the agency subjects the
storage system to a rigorous review process, including public
scrutiny through notice-and-comment rule making. See, e.g.,
id. § 72.232 (requiring the applicant for a Certificate of
Compliance to: (1) allow the NRC “to inspect the premises
PUBLIC WATCHDOGS V. S. CAL. EDISON 11
and facilities where a spent fuel storage cask is designed,
fabricated, and tested”; (2) “make available to the NRC for
inspection . . . records kept by them pertaining to the design,
fabrication, and testing of spent fuel storage casks”; and
(3) “perform . . . tests that the [NRC] deems necessary or
appropriate”); id. § 72.236 (listing the specific requirements
for spent fuel storage casks). Ultimately, the NRC only
certifies for use those systems that meet certain requirements
for safely storing SNF. See id. § 72.238 (providing that a
Certificate of Compliance for a storage cask will be issued by
the NRC if the requirements in § 72.236(a) though (i) are
satisfied).
Thus, under the terms of its operating license and the
relevant Certificate of Compliance, an NRC nuclear power
reactor licensee may store SNF on site in an ISFSI in a dry
storage cask certified by the NRC. See id. §§ 72.210, 72.212.
B. The NRC’s Grant of a License Amendment to the
SONGS Licensees and Certification of Holtec
International’s HI-STORM UMAX Canister Storage
System for the Storage of Spent Nuclear Fuel at
SONGS
In August 1963, Congress enacted Public Law 88-82 that
authorized the “construction, operation, maintenance, and
use” of a nuclear power plant on the Camp Pendleton military
base in Southern California. Act of July 30, 1963, Pub. L. No.
88-83, 77 Stat. 115. Thereafter, three nuclear electric
generating units were constructed and operated at San Onofre
Nuclear Generating Station (“SONGS”) pursuant to permits
and licenses issued by the NRC. The NRC issued three
separate Facility Operating Licenses—one for each unit—to
Southern California Edison Company (“Edison”) and San
12 PUBLIC WATCHDOGS V. S. CAL. EDISON
Diego Gas & Electric Company (“SDG&E”), the co-licensees
of SONGS.1 All three licenses permitted the Utility
Defendants to possess and store spent fuel at SONGS.
The first nuclear generating unit operated from 1968 until
1992. The second and third units operated from 1983 and
1984, respectively, until both units ceased operation and
began the decommission process in 2013. In 2015, after the
Utility Defendants ceased operation of the second and third
nuclear generating units, the NRC approved changes to the
Facility Operating Licenses for Units 2 and 3 by amending
the license agreements (“2015 License Amendments”). The
2015 License Amendments require the Utility Defendants to
“[t]ake actions necessary to decommission the plant and
continue to maintain the facility, including . . . the storage,
control and maintenance of the spent fuel, in a safe
condition.”
The NRC’s review of the 2015 License Amendments was
open to public comment and intervention. See Biweekly
Notice, Applications and Amendments to Facility Operating
Licenses and Combined Licenses Involving No Significant
Hazards Considerations, 79 Fed. Reg. 55,507, 55,508,
55,513–14 (Sept. 16, 2014) (soliciting comments on the
NRC’s determination that the 2015 License Amendments
involved “no significant hazards consideration” and
informing the public they could request a hearing before the
NRC). However, the NRC received no comments. See
Biweekly Notice; Applications and Amendments to Facility
Operating Licenses and Combined Licenses Involving No
1
Edison, SDG&E, and SDG&E’s parent company, Sempra Energy
(“Sempra”), are collectively referred to as the “Utility Defendants.”
PUBLIC WATCHDOGS V. S. CAL. EDISON 13
Significant Hazards Considerations, 80 Fed. Reg. 46,345,
46,354 (Aug. 4, 2015).
Although the SNF at SONGS had historically been stored
in wet-storage pools, the Utility Defendants’
decommissioning plan required the SNF to be buried in dry
casks in the SONGS ISFSI. The Utility Defendants elected to
use Holtec International’s (“Holtec”) HI-STORM UMAX
Canister Storage System (“Holtec System”), a canister-based
SNF storage system that had been approved for the storage of
SNF by the NRC in a Certificate of Compliance. The Holtec
System consists of three components: “(1) interchangeable
multi-purpose canisters . . . , which contain the fuel;
(2) underground Vertical Ventilated Modules . . . , which
contain[] the [canisters] during storage; and (3) a transfer
cask . . . , which contains the [canisters] during loading,
unloading and transfer operations.”
Like the 2015 License Amendments, the public had the
opportunity to provide comments concerning the NRC’s
evaluation and approval of the Holtec System. See List of
Approved Spent Fuel Storage Casks: Holtec International HI-
STORM Underground Maximum Capacity Canister Storage
System, Certificate of Compliance No. 1040, 80 Fed. Reg.
12,073, 12,074–76 (Mar. 6, 2015) (codified at 10 C.F.R.
§ 72.214) (responding to public comments related to the
addition of the Holtec System to the list of approved spent
fuel storage casks); see also List of Approved Spent Fuel
Storage Casks: Holtec International HI-STORM UMAX
Canister Storage System, Certificate of Compliance
No. 1040, Amendment No. 1, 80 Fed. Reg. 35,829,
35,829–30 (June 23, 2015) (codified at 10 C.F.R. § 72.214)
(soliciting public comments related to the direct final rule
amending the certificate of compliance to include the
14 PUBLIC WATCHDOGS V. S. CAL. EDISON
“seismically enhanced version of the HI-STORM UMAX
Canister Storage System”); List of Approved Spent Fuel
Storage Casts: Holtec International HI-STORM UMAX
Canister Storage System; Certificate of Compliance No.
1040, Amendment No. 2, 81 Fed. Reg. 73,335, 73,336 (Oct.
25, 2016) (codified at 10 C.F.R. § 72.214) (soliciting public
comments related to the direct final rule amending the
Certificate of Compliance to include new fuel types).
The Preliminary Safety Evaluation Report, issued in
connection with the Certificate of Compliance for the Holtec
System, documented the NRC’s review and evaluation of the
Holtec System. Therein, the NRC considered the Holtec
System’s shielding and radiation protection; its susceptibility
to chemical, galvanic, or other reactions; and its potential
performance in the event of an accident. Ultimately, the NRC
concluded that the activities authorized by the Holtec System
Certificate of Compliance could “be conducted without
endangering the health and safety of the public” and could
“be conducted in compliance with the applicable regulations
of [10 C.F.R. Part 72].”
In response to public comments, the NRC reiterated that
“the design [of the Holtec System] is robust, and contains
numbers of layers of acceptable confinement systems in
compliance with [10 C.F.R. Part 72] requirements.” 80 Fed.
Reg. at 12,074–75. The NRC also emphasized that it
“evaluated the susceptibility to and effects of stress corrosion
cracking and other corrosion mechanisms on safety
significant systems” and concluded that the Holtec System
“will safely store SNF and prevent radiation releases and
exposure consistent with regulatory requirements.” Id.
at 12,075.
PUBLIC WATCHDOGS V. S. CAL. EDISON 15
C. The Decommissioning of SONGS
On August 29, 2019, Public Watchdogs brought suit
against Edison, SDG&E, Sempra, Holtec, and the NRC
(collectively, “Defendants”), seeking to enjoin Defendants’
allegedly negligent decommissioning activities at SONGS. In
its First Amended Complaint (“FAC”), Public Watchdogs
challenges the NRC’s selection of Holtec as the supplier of
the SNF storage system and the NRC’s grant of the 2015
License Amendments. For example, Public Watchdogs
alleges that: (1) the NRC’s selection of Holtec as the supplier
of the SNF storage system was done recklessly or in
conscious disregard for the safety and competency issues that
have surrounded Holtec for years; and (2) the NRC’s grant of
the 2015 License Amendments was arbitrary, capricious, or
otherwise unlawful.
Public Watchdogs’s allegations also challenge the Holtec
SNF canisters that were certified for the storage of SNF by
the NRC in a Certificate of Compliance. In fact, Public
Watchdogs alleges that: (1) the design of the Holtec SNF
canisters “deviates from the acceptable minimum safety
thresholds required for the design and manufacture of nuclear
waste storage containers”; and (2) Holtec made changes to
the design of the Holtec SNF canisters after the NRC’s
certification of the Holtec System without the authorization
of the NRC and those design changes rendered several of the
Holtec SNF canisters defective.2 Despite the NRC learning of
the allegedly defective Holtec SNF canisters, Public
Watchdogs argues the NRC “failed to act” and permitted the
2
Public Watchdogs complains that the NRC declined to impose a
civil fine on Holtec for its failure to seek pre-authorization of the design
change that allegedly rendered several Holtec SNF canisters defective.
16 PUBLIC WATCHDOGS V. S. CAL. EDISON
Utility Defendants to continue loading the Holtec SNF
canisters.
Public Watchdogs’s FAC also complains of the Utility
Defendants’ allegedly negligent decommissioning conduct,
including allegations that: (1) the Utility Defendants
negligently “gouged” a number of Holtec SNF canisters as
they buried them in the SONGS ISFSI; and (2) many Holtec
SNF canisters were negligently scratched during
transportation to the SONGS ISFSI. Public Watchdogs’s
allegations related to decommissioning conduct also highlight
two instances (one in July 2018 and one in August 2018)
where the Utility Defendants mishandled loaded Holtec SNF
canisters as they were transferred into the SONGS ISFSI and
subsequently failed to report those incidents to the NRC.
In response to the August incident where the Utility
Defendants mishandled a loaded Holtec SNF canister, the
NRC issued an Inspection Charter for SONGS. The scope of
the special inspection sought to evaluate, inter alia, the
adequacy of the Utility Defendants’ loading procedures,
corrective actions, and reporting procedures. In the Inspection
Charter, the NRC noted that the Utility Defendants
voluntarily committed to not resuming their SNF transfer
operations until the NRC’s inspection and review was
complete. Public Watchdogs argues, however, that the NRC
should have ordered the Utility Defendants to cease SNF
transfer operations.
Public Watchdogs also points to a number of NRC issued
Inspection Reports that identified various violations related
to the Utility Defendants’ and Holtec’s decommissioning
conduct at SONGS. For example, in March 2019, the NRC
issued a Notice of Violation and NRC Special Inspection
PUBLIC WATCHDOGS V. S. CAL. EDISON 17
Report to Edison for two safety violations that occurred at
SONGS on August 3, 2018, the date of the second incident
where the Utility Defendants mishandled a loaded Holtec
SNF canister as it was loaded into the ISFSI. The two
violations allegedly related to the Utility Defendants “failure
to make certain that safety equipment was operating” and
their “failure to report the safety incident to the NRC.”
Ultimately, the NRC imposed on Edison a $116,000 fine.
Finally, on July 15, 2019, the Utility Defendants informed
the public that they were resuming the movement of SNF
from wet storage to the Holtec SNF canisters and were
resuming the burial of the canisters in the SONGS ISFSI.
D. Procedural History
Based on the above allegations, Public Watchdogs
asserted: (1) the NRC violated the Administrative Procedure
Act, 5 U.S.C. §§ 702 et seq.; (2) Edison, SDG&E, Sempra,
and Holtec (collectively, “the Private Defendants”) violated
the Price–Anderson Act, 42 U.S.C. § 2210(n)(2); (3) the
Private Defendants violated California’s public nuisance
laws, Cal. Civ. Code §§ 3479–80; and (4) Holtec was liable
under a strict products liability theory. Public Watchdogs also
filed a motion for preliminary injunction and a temporary
restraining order that sought to restrain Defendants from
transferring additional SNF into the Holtec SNF canisters
and, in turn, the SONGS ISFSI.
Defendants opposed Public Watchdogs’s request for a
temporary restraining order and moved to dismiss the FAC
for a lack of subject-matter jurisdiction and for failure to state
a claim pursuant to Federal Rules of Civil Procedure 12(b)(1)
and 12(b)(6).
18 PUBLIC WATCHDOGS V. S. CAL. EDISON
After commencing proceedings in the district court,
Public Watchdogs also filed a petition with the NRC pursuant
to 10 C.F.R. § 2.206, requesting the NRC suspend all
decommissioning operations at SONGS and require Edison
and SDG&E to submit an amended decommissioning plan
that accounted for the long term storage of SNF at SONGS.
In addition to arguing the requested relief was appropriate,
because the NRC permitted Edison and SDG&E “to
implement their decommissioning plan based on the
unreasonable assumption that spent nuclear fuel will be stored
at SONGS only temporarily,” Public Watchdogs also argued
it was entitled to the requested relief, because Edison and
SDG&E’s burial of SNF at SONGS posed “an imminent
threat to public safety.”
Public Watchdogs’s allegations supporting its petition
with the NRC pursuant to 10 C.F.R. § 2.206 closely mirror
those allegations in the FAC. For example, Public Watchdogs
alleges in the § 2.206 petition that the “Holtec dry storage
canisters . . . are defective and unfit for the indefinite storage
of [SNF]” and that Holtec “secretly modified the design and
manufacture of the canisters” so that they are no longer
“design[ed], manufacture[d], [or] supplie[d]” in conformity
with the Certificate of Compliance approving their use.
Public Watchdogs’s petition also complains that, due in part
to the defective design of the Holtec System, “extensive
gouging [of the canisters] occur[ed] during routine loading
into the storage system” and there is no way to monitor,
inspect, or fix the canisters once they are in the ground. As
with the FAC, Public Watchdogs alleges in the petition that
Edison and SDG&E “negligently gouged and then buried . . .
fully loaded [Holtec] canisters at SONGS” and “many (if not
all) of the canisters were negligently scratched during
transportation to the ISFSI.” Also similar to the FAC, Public
PUBLIC WATCHDOGS V. S. CAL. EDISON 19
Watchdogs’s petition complains of Edison and SDG&E’s
failure to disclose the two mishandling incidents discussed
above and the NRC’s inadequate response thereto.
While Defendants’ motions to dismiss in the instant suit
and the § 2.206 petition before the NRC were still pending,
Public Watchdogs filed an emergency petition for writ of
mandamus with the Ninth Circuit Court of Appeals that
sought to immediately suspend decommissioning operations
at SONGS until the NRC resolved Public Watchdogs’s
pending § 2.206 petition. We denied the writ of mandamus,
reasoning that “the petition requesting suspension ha[d] only
been before the NRC for a short period of time, and the NRC
ha[d] represented to the Court in its response that it [was]
processing the petition and ha[d] not engaged in delay.” In re
Public Watchdogs, No. 19-72670, Dkt. No. 19, at 4.
On December 3, 2019, the district court granted
Defendants’ motions to dismiss, denied Public Watchdogs’s
motion for preliminary injunction, and dismissed Public
Watchdogs’s FAC with prejudice. The district court held
Public Watchdogs had standing to pursue injunctive relief
against the Private Defendants, reasoning the allegations in
the FAC were sufficient to allege Article III standing and
satisfy the injury-in-fact requirement, because the allegations
tended to show “there is a ‘credible threat’ that a probabilistic
harm will materialize.”3 Pub. Watchdogs v. S. Cal. Edison
Co., No. 19-CV-1635 JLS (MSB), 2019 WL 6497886, at *7
(S.D. Cal. Dec. 3, 2019) (unpublished) (quoting Nat. Res.
3
The district court also concluded that Public Watchdogs did not have
standing to contest the NRC’s grant of two exemptions related to the use
of decommissioning trust funds and certain insurance requirements. Public
Watchdogs does not challenge these conclusions on appeal.
20 PUBLIC WATCHDOGS V. S. CAL. EDISON
Def. Council v. U.S. Envtl. Prot. Agency, 735 F.3d 873, 878
(9th Cir. 2013)).
The district court next concluded that all of Public
Watchdogs’s claims challenged NRC decisions that fell
within the scope of the Hobbs Act, thereby depriving it of
subject-matter jurisdiction over the action. See id. at *8–12.
With respect to Public Watchdogs’s claim against the NRC,
the district court found it lacked subject-matter jurisdiction:
(1) because the claim challenged the grant or amendment of
2015 License Amendments and the Certificate of Compliance
for the Holtec System (both final orders of the NRC relating
to the grant or amendment of a license for the purpose of the
Hobbs Act); and (2) because the claim’s challenge to “the
Other Agency Actions” touched upon “issues preliminary or
ancillary to” the 2015 License Amendments and the
Certificate of Compliance for the Holtec System. Id.at *9–10.
Similarly, with respect to Public Watchdogs’s various
claims against the Private Defendants, the district court
determined it lacked subject-matter jurisdiction, because all
of Public Watchdogs’s claims “trace[d] back to actions that
were taken pursuant to or that were incidental to the NRC’s
issuance of the . . . 2015 License Amendment or the
[C]ertificate of [C]ompliance for the Holtec canisters, actions
that must be challenged before the Ninth Circuit pursuant to
the Hobbs Act.” Id. at *11.
After concluding it lacked subject-matter jurisdiction over
the action, the district court proceeded to grant the Private
Defendants’ motions to dismiss for failure to state a claim,
finding all of Public Watchdogs’s claims against the Private
Defendants were preempted or failed to allege facts sufficient
PUBLIC WATCHDOGS V. S. CAL. EDISON 21
to state a claim for relief. See id. at *13–18. Finally, the
district court denied Public Watchdogs’s motion for a
preliminary injunction, because it was unlikely to succeed on
the merits considering the district court lacked subject-matter
jurisdiction over the action, and Public Watchdogs failed to
state a plausible claim for relief. See id. at *19. Public
Watchdogs appealed the district court’s decision to us.
After Public Watchdogs appealed the district court’s order
dismissing the instant action, the NRC denied Public
Watchdogs’s § 2.206 petition, and Public Watchdogs filed a
Petition for Judicial Review directly with us challenging the
NRC’s denial of its § 2.206 petition.4 See Pub. Watchdogs v.
Nuclear Regulatory Comm’n, No. 20-70899 (9th Cir. Mar.
30, 2020).5
II. STANDARD OF REVIEW
“We review de novo the district court’s determination that
it lacked subject matter jurisdiction because of the Hobbs
Act.” Carpenter v. Dep’t of Transp., 13 F.3d 313, 314 (9th
Cir. 1994).
4
While Public Watchdogs’s initial § 2.206 petition was pending,
Public Watchdogs filed another § 2.206 petition that sought to
“immediately suspend decommissioning operations at [SONGS] Units 2
and 3 on the grounds that the present ISFSI is operating in an unanalyzed
condition,” i.e., a potential flooding threat.
5
This petition is pending review.
22 PUBLIC WATCHDOGS V. S. CAL. EDISON
III. DISCUSSION
We must first determine whether the district court
correctly held that it lacked subject-matter jurisdiction over
Public Watchdogs’s suit against Defendants. To answer this
question, we must determine the appropriate scope of the
Hobbs Act and then consider whether Public Watchdogs’s
claims challenged decisions that fall within the scope of the
Hobbs Act.
A. The Scope of the Hobbs Act Encompasses All Final
Orders of the NRC Related to Licensing and All
Decisions of the NRC Preliminary, Ancillary, or
Incidental Thereto
“[T]he Administrative Orders Review Act, 28 U.S.C.
§ 2342, commonly referred to as the Hobbs Act,” Gen.
Atomics, 75 F.3d at 538, provides courts of appeals with
“exclusive jurisdiction to enjoin, set aside, suspend (in whole
or in part), or to determine the validity of . . . all final orders
of the [NRC] made reviewable by section 2239 of title 42,”
28 U.S.C. § 2342(4).6 Section 2239, in turn, provides for
Hobbs Act review of “[a]ny final order entered in any
proceeding,” 42 U.S.C. § 2239(b)(1), “for the granting,
suspending, revoking, or amending of any license . . . , and in
any proceeding for the issuance or modification of rules and
6
The language of the statute “actually refers to final orders of the
Atomic Energy Commission . . . , which has been abolished and whose
functions have been transferred in large part to the NRC.” Gen. Atomics,
75 F.3d at 538 n.2. However, “final orders entered by the NRC in the
performance of functions transferred from the [Atomic Energy
Commission] are reviewable as if they had been made by the [Atomic
Energy Commission].” Id.PUBLIC WATCHDOGS V. S. CAL. EDISON 23
regulations dealing with the activities of licensees,” id. § 2239(a)(1)(A).
The district court held that the Hobbs Act must be read
broadly to encompass issues preliminary or ancillary to
licensing proceedings. Public Watchdogs, however, argues
that the Hobbs Act should be construed narrowly to exclude
from district court review only actions where the NRC is
called upon to grant, suspend, revoke, or amend a license. We
disagree; the Hobbs Act must not be construed so narrowly.
In Lorion, the Supreme Court addressed whether the
NRC’s denial of a § 2.206 petition “should be considered a
final order initially reviewable exclusively in the court of
appeals” under the Hobbs Act. 470 U.S. at 734–35. After
determining that the language of § 2239 was ambiguous, id.
at 736, the Court examined certain “indicia of congressional
intent” and concluded that “Congress intended to provide for
initial court of appeals review of all final orders in licensing
proceedings,” regardless of whether a formal hearing
occurred, id. at 737. Looking to the relevant legislative
history, the Court found that the evolution of the judicial
review provision, which evolved independently of the hearing
provision, supported its conclusion that Congress intended “to
provide for initial court of appeals review of all final orders
in licensing proceedings,” including “Commission decisions
not to suspend, revoke, or amend” a license. Id. at 738–39
(first emphasis added). The Court explained that, “[w]hen
Congress decided on the scope of judicial review, it did so
solely by reference to the subject matter of the Commission
action and not by reference to the procedural particulars of
the Commission action.” Id. at 739. Thus, after also crediting
the “basic congressional choice of Hobbs Act review” in
§ 2239, id. at 740, the Supreme Court held that § 2239 vests
in the federal courts of appeals initial subject-matter
24 PUBLIC WATCHDOGS V. S. CAL. EDISON
jurisdiction over NRC orders denying § 2.206 petitions, id.
at 746.
The Court bolstered its conclusion by examining the
irrational consequences that would flow from the adoption of
the contrary rule announced by the lower court—i.e., that
§ 2239 vested the courts of appeals with initial subject-matter
jurisdiction only over proceedings where a hearing took place
or over proceedings where a hearing could have taken place.
Id. at 741. If initial review in the courts of appeals depended
on whether a hearing actually occurred before the agency,
then some licensing proceedings would be reviewed in the
courts of appeals while others would not based solely on “the
‘fortuitous circumstance’ of whether an interested person
requested a hearing.” Id. at 741–42 (quoting Crown Simpson
Pulp Co. v. Costle, 445 U.S. 193, 196–97 (1980) (per
curiam)). “Absent a far clearer expression of congressional
intent,” however, the Court was unwilling to sanction “such
a seemingly irrational bifurcated system.” Id. at 742 (quoting
Crown Simpson Pulp Co., 445 U.S. at 197). The Court further
explained that, “[i]f initial review in the court of appeals
hinged on whether a hearing could have taken place had an
interested person requested one,” this could “cause
bifurcation of review of orders issued in the same
proceeding.” Id. at 742–43. Again, absent specific evidence
of a contrary congressional intent, the Court “held that review
of orders resolving issues preliminary or ancillary to the core
issue in a proceeding should be reviewed in the same forum
as the final order resolving the core issue.” Id. at 743
(emphasis added). Ultimately, recognizing there was no “firm
indication that Congress intended to locate initial
[Administrative Procedure Act (“APA”)] review of agency
action in the district courts,” the Court refused to “presume
that Congress intended to depart from the sound policy of
PUBLIC WATCHDOGS V. S. CAL. EDISON 25
placing initial APA review in the courts of appeals.” Id
at 745.
Relying on Lorion, we held in General Atomics that “the
Hobbs Act is to be read broadly to encompass all final [NRC]
decisions that are preliminary or incidental to licensing.”
75 F.3d at 539 (emphasis added). We further explained that
§ 2239 should be “read liberally.” Id. Thus, reading the
Hobbs Act broadly and interpreting § 2239 liberally, we
concluded that a district court action challenging an NRC
order that a parent company must “assure the cleanup costs”
of its subsidiary (the actual NRC licensee) fell within the
auspices of the Hobbs Act. Id. at 537, 539. We explained that
the goal of the NRC hearing (which had been initiated but not
yet completed at the time the appellant filed the district court
action) was to determine whether the parent company was, in
fact, a licensee. Id. at 539. Such a hearing, we determined,
fell squarely within the Hobbs Act, because it “directly
involve[d] the granting and possible amending of the
license.” Id.7
7
Public Watchdogs points to no caselaw of our circuit or of the
Supreme Court that calls into question General Atomic’s
conclusion—which is anchored by the Supreme Court’s Lorion
decision—that the Hobbs Act must be construed broadly to encompass
decisions that are preliminary or incidental to licensing. Our circuit
precedent remains binding until the Supreme Court “undercut[s] the
theory or reasoning underlying the prior circuit precedent in such a way
that the cases are clearly irreconcilable.” Miller v. Gammie, 335 F.3d 889,
900 (9th Cir. 2003) (en banc). Public Watchdogs principally relies on
Justice Kavanaugh’s concurring opinion in PDR Network, LLC v. Carlton
& Harris Chiropractic, Inc., 139 S. Ct. 2051, 2057–67 (2019), to argue
that the district court’s “sweeping interpretation of the Hobbs Act” is
incorrect. However, aside from the fact that concurring opinions have no
binding precedential value, see Maryland v. Wilson, 519 U.S. 408, 412–13
(1997), nothing in Justice Kavanaugh’s concurrence undercuts the
26 PUBLIC WATCHDOGS V. S. CAL. EDISON
Thus, in view of Lorion and General Atomics, it is clear
we must read the Hobbs Act broadly to encompass not only
all final NRC actions in licensing proceedings, but also all
decisions that are preliminary, ancillary, or incidental to those
licensing proceedings. See Lorion, 470 U.S. at 737, 743; Gen.
Atomics, 75 F.3d at 539.8
B. Public Watchdogs’s Claim Challenged Decisions that
Fall Within the Scope of the Hobbs Act
Having determined the appropriate scope of the Hobbs
Act, we must now determine whether Public Watchdogs’s
reasoning of General Atomics such that the cases are “clearly
irreconcilable,” Miller, 335 F.3d at 900. In fact, Justice Kavanaugh’s
concurrence addressed a question wholly irrelevant to the case at
hand—whether the Hobbs Act required a district court to accept the
Federal Communication Commission’s legal interpretation of the
Telephone Consumer Protection Act in a subsequent private enforcement
action. See PDR Network, LLC, 139 S. Ct. at 2058 (Kavanaugh, J.,
concurring).
8
Our sister circuits have reached similar conclusions. See, e.g.,
Citizens Awareness Network, Inc. v. United States, 391 F.3d 338, 346–47
(1st Cir. 2004) (recognizing that Lorion requires courts to interpret the
Hobbs Act “broadly” to “maximize the availability of initial circuit court
review of licensing proceedings” and holding that “original jurisdiction in
the courts of appeals is proper to review any NRC action that could be
cognizable in a petition for review from a proceeding under [§] 2239”);
N.J., Dep’t of Envtl. Prot. & Energy v. Long Island Power Auth., 30 F.3d
403, 410 (3d Cir. 1994) (recognizing the Hobbs Act is to be “liberally
construed to allow exclusive jurisdiction in the court of appeals” (quoting
Conoco, Inc. v. Skinner, 970 F.2d 1206, 1214 (3d Cir. 1992)));
Commonwealth Edison Co. v. U.S. Nuclear Regulatory Comm’n, 830 F.2d
610, 612 (7th Cir. 1987) (recognizing that “issues preliminary or ancillary
to the core issue” in a licensing proceeding should be reviewed in the
same forum as the final order resolving the core licensing issue).
PUBLIC WATCHDOGS V. S. CAL. EDISON 27
causes of action against the NRC and the Private Defendants
challenge final NRC actions in licensing proceedings or
challenge decisions preliminary, ancillary, or incidental
thereto.
i. Public Watchdogs’s Claim Against the NRC
Challenges NRC Licensing Decisions or Decisions
Ancillary or Incidental to Licensing Decisions
Public Watchdogs asserted a single cause of action
against the NRC for the violation of the APA, 5 U.S.C. § 702et seq. The district court held it lacked subject-matter
jurisdiction over this claim, because the claim directly
challenged the grant of the 2015 License Amendments and
the Certificate of Compliance for the Holtec System and the
complained-of “Other Agency Actions”9 raised issues
preliminary or ancillary to those orders. Public Watchdogs
first argues the district court “misconstrued” its APA claim as
a challenge to the 2015 License Amendments, because “any
fair reading” of the FAC reveals that the APA claim
challenged the NRC’s failure to halt Holtec and the Utility
Defendants allegedly dangerous transfer of SNF. We
disagree.
On its face, Public Watchdogs’s FAC challenges the grant
of the 2015 License Amendments and the Certificate of
Compliance for the Holtec System—both final orders of the
NRC for the purposes of the Hobbs Act. See 10 C.F.R.
9
In the FAC, Public Watchdogs alleged that a category of other “final
action[s]” of the NRC violated the APA and vaguely defined these “Other
Agency Actions” to include “accepting amendments to certificates of
compliance and granting exemptions from other statutory and regulatory
requirements.”
28 PUBLIC WATCHDOGS V. S. CAL. EDISON
§ 72.210 (granting “[a] general license . . . for the storage of
spent fuel in an independent spent fuel storage installation at
power reactor sites to persons authorized to possess or
operate nuclear power reactors”); id. § 72.212(a)(2) (limiting
the general license in § 72.210 “to storage of spent fuel in
[approved] casks”); id. § 72.214 (listing casks “approved for
storage of spent fuel,” including the Holtec System at issue in
this case). For example, Public Watchdogs alleges in its FAC
that “[t]he NRC’s grant of the [Utility] Defendants’
application for a License Amendment [in July 2015] was in
violation of the [APA].” Public Watchdogs further alleges
that the NRC issued the 2015 License Amendments without
complying with the adjudicative rule-making requirements of
5 U.S.C. §§ 554, 556, 557, and the NRC’s grant of the 2015
License Amendments was arbitrary, capricious, and an abuse
of discretion. Ultimately, Public Watchdogs seeks to enjoin
“the NRC from allowing the [Utility] Defendants to proceed
with the decommissioning as provided for in the License
Amendment.” Public Watchdogs’s FAC also challenges the
Certificate of Compliance for the Holtec System, alleging
that, inter alia, the Holtec SNF canisters “deviate[ ] from the
acceptable minimum safety thresholds required for the design
and manufacture of waste storage containers,” and the NRC
has accepted amendments to the Certificate of Compliance
for the Holtec System without satisfying the above-referenced
adjudicative rule-making requirements. Thus, the district
court correctly determined that Public Watchdogs’s APA
claim directly challenged the grant of the 2015 License
Amendments and the Certificate of Compliance for the
Holtec System.
Accordingly, because the 2015 License Amendments and
the Certificate of Compliance for the Holtec System are final
orders of the NRC and relate to the grant or amendment of a
PUBLIC WATCHDOGS V. S. CAL. EDISON 29
license or the “issuance or modification of rules and
regulations dealing with the activities of licensees,” 42 U.S.C.
§ 2239(a)(1)(A), “[t]he court of appeals . . . ha[d] exclusive
jurisdiction to enjoin, set aside, suspend . . . , or to determine
the validity of” those orders, 28 U.S.C. § 2342(4). Therefore,
the district court correctly found that it lacked subject-matter
jurisdiction over Public Watchdogs’s APA claim against the
NRC to the extent it challenged the 2015 License
Amendments and the Certificate of Compliance for the
Holtec System. See Gen. Atomics, 75 F.3d at 539; see also
N.J., Dep’t of Envtl. Prot. & Energy, 30 F.3d at 410, 412–13
(affirming the district court’s dismissal of a plaintiff’s
National Environmental Policy Act claim against the NRC for
lack of subject-matter jurisdiction under the Hobbs Act where
the claim challenged a license amendment and a Certificate
of Compliance for radioactive material canisters and therefore
could not “be maintained in the district court”).
Next, Public Watchdogs argues that the district court had
subject-matter jurisdiction over its APA claim, because the
following five “Other Agency Actions” fall outside of the
scope of the Hobbs Act: (1) the NRC’s exemption of Holtec
from the requirement it receive pre-approval of its design
change to the Holtec SNF canisters; (2) the NRC’s decision
to relieve Holtec from the responsibility of complying with
the Certificate of Compliance for the Holtec SNF canisters;
(3) the NRC’s exemption of the Utility Defendants from the
requirement they file an event report after the mishandling
incident in July 2018; (4) the NRC’s decision permitting
Holtec to continue moving SNF from wet to dry storage in
2019; and (5) the NRC’s decision permitting the Utility
Defendants to resume transferring SNF from wet to dry
storage, despite the two safety violations that occurred in
2018.
30 PUBLIC WATCHDOGS V. S. CAL. EDISON
Public Watchdogs implies that three of the five
complained-of NRC actions fall outside the scope of the
Hobbs Act, because the actions relate to the issuance of an
“exemption”—a type of NRC action that the Second Circuit
in Brodsky v. U.S. Nuclear Regulatory Commission, 578 F.3d
175, 182 (2d Cir. 2009) held escapes the reach of the Hobbs
Act. We need not decide whether Brodsky was correctly
decided, however, because none of the identified actions
involve the actual grant of an exemption by the NRC.
An “exemption” is a formal NRC action that relieves an
NRC licensee of the duty to comply with a certain regulatory
requirement. See id. at 177–78 (explaining “NRC regulations
also permit the agency to grant ‘exemptions from the
requirements of regulations,’ as long as” certain requirements
are met (quoting 10 C.F.R. § 50.12(a)). Exemptions are
granted by the NRC pursuant to specific regulations if certain
requirements contained therein are met. For example, the
regulations addressing licensing requirements for the
independent storage of spent nuclear fuel allow the NRC to
“grant such exemptions from the requirements of the
regulations” if it determines the exemption is “authorized by
law and will not endanger life or property or the common
defense and security and are otherwise in the public interest.”
10 C.F.R. § 72.7; see also id. § 50.12 (authorizing the NRC
to grant exemptions to regulations related to the licensing of
production and utilization facilities).
Here, none of the NRC actions identified by Public
Watchdogs involve the grant of an “exemption” under an
NRC regulation. For instance, although Public Watchdogs
argues the NRC “exempted” Holtec from the requirement that
it obtain pre-approval from the NRC for its purported design
change to the Holtec SNF canisters, the identified allegations
PUBLIC WATCHDOGS V. S. CAL. EDISON 31
do not detail the NRC’s grant of an exemption to Holtec.
Instead, the allegations complain of the NRC’s reluctance “to
censure the [Utility] Defendants for their repeated disregard
of NRC regulations” and the NRC’s decision not to impose
a fine for the alleged violation.
Similarly, despite arguing that the NRC exempted Holtec
from complying with the Certificate of Compliance for the
Holtec System, Public Watchdogs fails to identify any
“exemption” granted by the NRC that excused Holtec from
complying with the Certificate of Compliance. Public
Watchdogs’s complaint at best contains a generic and
conclusory allegation that the NRC has periodically
“accept[ed] amendments to certificates of compliance and
grant[ed] exemptions from other statutory and regulatory
requirements.” Even this allegation does not take issue with
an alleged exemption related to a Certificate of Compliance,
but instead challenges the NRC’s alleged grant of exemptions
from “other statutory and regulatory requirements.” In
response, Public Watchdogs points to allegations that, after
learning the Holtec SNF canisters had been scratched,
gouged, or dented, the NRC failed to “independently
evaluate[ ] the increased risks posed by this damage to the
canisters.” But, again, these allegations do not describe the
NRC’s grant of an exemption.
Public Watchdogs finally implies that the NRC
“exempted” the Utility Defendants from the requirement that
they file an “Event Notification Report” after the Utility
Defendants mishandled a fully-loaded Holtec SNF canister in
July of 2018. Again, however, these allegations do not
describe the NRC’s grant of an exemption relieving the
Utility Defendants of the requirement to file an “Event
Notification Report.” Instead, Public Watchdogs appears to
32 PUBLIC WATCHDOGS V. S. CAL. EDISON
object either to the NRC’s decision not to take enforcement
action against the Utility Defendants for their failure to file
the appropriate reports after the mishandling incidents in July
and August of 2018 or the sufficiency of the penalty imposed
for such violations.10
In sum, none of the complained-of “Other Agency
Actions” involve the issuance of an exemption by the NRC,
but instead focus on either the NRC’s decisions not to take
enforcement action against Holtec and the Utility Defendants
or the sufficiency of the NRC’s selected enforcement action.
Thus, Brodsky is not implicated here.
Public Watchdogs also argues the five “Other Agency
Actions” fall outside of the scope of the Hobbs Act, because
they are not actions for the “granting, suspending, revoking,
or amending of any license” and were taken after the grant of
the 2015 License Amendments and after the issuance of the
Certificate of Compliance for the Holtec System. This
argument is not persuasive, because the Hobbs Act not only
encompasses all final NRC actions in licensing proceedings
but also all issues that are preliminary, ancillary, or incidental
to those licensing proceedings. See Lorion, 470 U.S. at 737,
743; Gen. Atomics, 75 F.3d at 539. As discussed above,
Public Watchdogs’s APA claim is properly viewed as a
challenge to the grant of the 2015 License Amendments and
the Certificate of Compliance for the Holtec System over
10
The final two NRC “actions” Public Watchdogs contends fall
outside the scope of the Hobbs Act also do not involve the grant of an
exemption. Rather, these “actions” relate to the NRC’s alleged decisions
to permit Holtec and the Utility Defendants to continue the movement of
SNF from wet to dry storage, despite safety violations or potential safety
violations at SONGS.
PUBLIC WATCHDOGS V. S. CAL. EDISON 33
which the court of appeals had exclusive jurisdiction. Those
final orders permitted the Utility Defendants to remove SNF
from wet storage at SONGS and transfer it into the Holtec
System as part of the decommissioning process. Public
Watchdogs’s challenge to the “Other Agency Actions”
addresses the propriety of the NRC’s subsequent decisions
that permitted Holtec and the Utility Defendants to continue
the transfer of SNF to the Holtec System at SONGS under the
authority of the 2015 License Amendments and the
Certificate of Compliance for the Holtec System. Thus,
because the “Other Agency Actions” raise issues related to
NRC actions that permitted Holtec and the Utility Defendants
to continue transferring SNF to the Holtec System under the
authority of the 2015 License Amendments and Certificate of
Compliance, we agree with the district court that Public
Watchdogs’s challenge to the “Other Agency Actions”
presents issues incidental or ancillary to its challenge to the
grant of 2015 License Amendments and the Certificate of
Compliance for the Holtec System. Cf. Commonwealth
Edison Co., 830 F.2d at 612–13 (finding, in an action where
the “core issue” presented was “whether to grant operating
licenses in a section 2239(a) proceeding,” the court of appeal
had jurisdiction over “[t]he ‘ancillary or preliminary’ issue
[of] whether to uphold the NRC’s bill for review costs
incurred during the section 2239(a) proceeding considering
[the licensee’s] license application”).
ii. Even if Public Watchdogs’s APA Claim Did Not
Challenge the 2015 License Amendments or the
Certificate of Compliance for the Holtec System,
the Claim Still Falls Within the Scope of the Hobbs
Act, Because It Seeks Relief that Should Have
First Been (and Later Was) Pursued Before the
NRC in a § 2.206 Petition
34 PUBLIC WATCHDOGS V. S. CAL. EDISON
Further, even assuming Public Watchdogs’s APA claim
did not challenge the grant of the 2015 License Amendments
or the Certificate of Compliance for the Holtec System,
Public Watchdogs’s APA claim related to the “Other Agency
Actions” still falls within the scope of the Hobbs Act, because
it challenges NRC enforcement “decisions not to suspend” a
license or licensed operations and seeks relief that should
have first been pursued before the NRC in a § 2.206 petition.
See Lorion, 470 U.S. at 738.
In Lorion, the Supreme Court held that § 2239 “vests in
the courts of appeals initial subject-matter jurisdiction over
[NRC] orders denying § 2.206 citizen petitions.” Id. at 746.
A citizen petition under § 2.206 “is but the first step in a
process that will, if not terminated for any reason, culminate
in a full formal proceeding under 42 U.S.C. § 2239(a)(1).” Id.at 745 n.11. This mechanism allows “[a]ny person” to file a
request with the NRC to “institute a proceeding pursuant to
[10 C.F.R.] § 2.202 to modify, suspend, or revoke a license,
or for any other action as may be proper.” 10 C.F.R.
§ 2.206(a). Therein, a petitioner can allege “a license
violation or ‘potentially hazardous conditions or other facts
deemed to be sufficient ground for the proposed action.’”
N.J., Dep’t of Envtl. Prot. & Energy, 30 F.3d at 413 (quoting
10 C.F.R. § 2.202(a)(1)). The Lorion Court—recognizing that
Congress defined the scope of review for § 2239 “solely by
reference to the subject matter of the [NRC] action and not by
reference to the procedural particulars of the [NRC]
action”—determined that the courts of appeals had initial
subject-matter jurisdiction over the denial of a § 2.206
petition, because Congress intended “to provide for initial
court of appeals review of all final orders in licensing
proceedings,” including “[NRC] decisions not to suspend,
PUBLIC WATCHDOGS V. S. CAL. EDISON 35
revoke, or amend” a license. 470 U.S. at 738–39, 746 (first
emphasis added).
The five “Other Agency Actions” identified by Public
Watchdogs all focus on either the NRC’s decisions not to take
enforcement action based on the alleged misconduct related
to the 2015 License Amendments and Certificate of
Compliance for the Holtec System or the NRC’s failure to
take (in Public Watchdogs’s opinion) the appropriate
enforcement action related to those orders. In briefing, Public
Watchdogs makes plain the appropriate enforcement action
that it believes the NRC failed to take was the suspension of
the Private Defendants’ decommissioning activities carried
out under the 2015 License Amendments and the Certificate
of Compliance for the Holtec System. Indeed, Public
Watchdogs states that “any fair reading” of its APA claim
shows it was a challenge to the NRC’s failure to “halt” the
Private Defendants’ decommissioning activities. In that
sense, like the denial of a § 2.206 petition, Public
Watchdogs’s APA claim challenged “[NRC] decisions not to
suspend” the 2015 License Amendments or licensed
operations over which the court or appeals had exclusive
jurisdiction. See id. at 738, 746. Ultimately, to remedy these
alleged failures, Public Watchdogs asked the district court to
do, in effect, what the NRC declined to do with its
enforcement actions—suspend the Private Defendants’
licensed and certified operations at SONGS conducted under
the authority of the 2015 License Amendments and the
Certificate of Compliance for the Holtec System. In other
words, Public Watchdogs’s FAC sought relief identical to
that which could have been requested in a § 2.206 petition.
Indeed, if Public Watchdogs wanted the NRC to take
additional enforcement action related to the alleged
36 PUBLIC WATCHDOGS V. S. CAL. EDISON
decommissioning misconduct at SONGS or to suspend the
Private Defendants’ decommissioning activities under the
2015 License Amendments, the proper course under NRC
regulations was to first file a citizen petition pursuant to 10
C.F.R. § 2.206. See Cnty. of Rockland, 709 F.2d at 773–74
(recognizing a county’s petition for review of an NRC order
declining to shut down or take additional enforcement action
at a nuclear plant must be dismissed, because the county
failed to exhaust its administrative remedies by failing to,
inter alia, file a § 2.206 petition). If the agency denied the
petition, then Public Watchdogs could have appealed directly
to this court. See Lorion, 470 U.S. at 746.
In fact, after Public Watchdogs filed its FAC, it chose to
follow the path outlined above by submitting a § 2.206
petition to the NRC that addressed the same conduct and
sought the same remedy from the NRC that it sought before
the district court—a temporary suspension of
decommissioning activities at SONGS. The NRC declined to
take the requested action, and Public Watchdogs filed a
petition for review of the denial of the § 2.206 petition
directly with us.
Public Watchdogs’s decision to file a § 2.206 petition that
addressed the same conduct and sought the same remedy that
it sought before the district court and its decision to appeal
that action directly to us reinforces our conclusion that the
district court did not have subject-matter jurisdiction over
Public Watchdogs’s APA claim. Public Watchdogs’s APA
claim challenged NRC “decisions not to suspend” a license
or licensed conduct based on alleged decommissioning
misconduct that also formed the basis of its § 2.206 petition.
See id. at 738. If Public Watchdogs could divert review of
this type of challenge to the district court from the court of
PUBLIC WATCHDOGS V. S. CAL. EDISON 37
appeals simply by choosing not to file (or belatedly filing) a
§ 2.206 petition, we would be endorsing a “seemingly
irrational bifurcated system” where the court of review would
be predicated on the “procedural particulars of the [NRC]
action” rather than the “subject matter of the [NRC] action.”
See id. at 739, 741–42. Moreover, this “seemingly irrational
bifurcated system” would result in some NRC decisions
related to licensing receiving two layers of judicial review
while others received one. See id. at 742. “One crucial
purpose of the Hobbs Act and other jurisdictional provisions
that place initial review in the courts of appeals is to avoid the
waste attendant upon this duplication of effort.” Id. at 744.
Like Lorion, we decline to endorse such an irrational
approach that is at odds with this “crucial purpose of the
Hobbs Act.” See id. at 741–42, 744–45.
Finally, basic principles of administrative law also
support our decision to allow the NRC to first address Public
Watchdogs’s § 2.206 petition that raises concerns related to
the safety of NRC licensees’ nuclear decommissioning
activities—an area that is unquestionably within the NRC’s
special competence. See Parisi v. Davidson, 405 U.S. 34, 37
(1972) (“The basic purpose of the exhaustion doctrine is to
allow an administrative agency to perform functions within
its special competence—to make a factual record, to apply its
expertise, and to correct its own errors so as to moot judicial
controversies.”); McKart v. United States, 395 U.S. 185, 194
(1969) (“[I]t is normally desirable to let the agency develop
the necessary factual background upon which decisions
should be based. And since agency decisions are frequently
of a discretionary nature or frequently require expertise, the
agency should be given the first chance to exercise that
discretion or to apply that expertise.”).
38 PUBLIC WATCHDOGS V. S. CAL. EDISON
For the foregoing reasons, we hold the district court
correctly determined it lacked subject-matter jurisdiction
under the Hobbs Act, because Public Watchdogs’s APA
claim challenged final orders of the NRC related to licensing
or challenged decisions incidental or ancillary thereto. 11
iii. Public Watchdogs’s Claims Against Holtec and the
Utility Defendants Challenge NRC Licensing
Decisions or Decisions Ancillary or Incidental
Thereto, and Challenge Conduct That Also Forms
the Basis of Its § 2.206 Petition to the NRC
We must also determine whether Public Watchdogs’s
claims against the Private Defendants12 fall within the scope
of the Hobbs Act. To do this, we must once again ascertain
whether Public Watchdogs’s claims challenge final NRC
orders in licensing proceedings or challenge decisions that are
preliminary, ancillary, or incidental to those licensing
proceedings. See Lorion, 470 U.S. at 737, 743; Gen. Atomics,
75 F.3d at 539.
Public Watchdogs asserted three causes of action against
the Private Defendants: (1) a public liability action under the
Price–Anderson Act; (2) a public nuisance claim under
11
Because we conclude Public Watchdogs’s challenge to the “Other
Agency Actions” falls within the scope of the Hobbs Act, we do not reach
the district court’s alternative holding that it lacked jurisdiction to review
those actions under 5 U.S.C. § 701(a)(2), because those actions constituted
“presumptively unreviewable” enforcement decisions. See Heckler v.
Chaney, 470 U.S. 821, 832 (1985) (recognizing that an “agency’s decision
not to take enforcement action” is “presumptively unreviewable”).
12
We previously defined “Private Defendants” to include the Utility
Defendants and Holtec.
PUBLIC WATCHDOGS V. S. CAL. EDISON 39
California law; and (3) a strict product liability claim under
California law. The district court held that all three causes of
action fell within the Hobbs Act’s scope, because they “trace
back to actions that were taken pursuant to or that were
incidental to the NRC’s issuance of the July 2015 License
Amendment or the [C]ertificate of [C]ompliance for the
Holtec canisters.” However, Public Watchdogs argues the
district court’s holding cannot be squared with the narrow
scope of the Hobbs Act that only grants the court of appeals
“exclusive jurisdiction” over actions against the NRC
challenging its orders “granting, suspending, revoking, or
amending” a license. See 28 U.S.C. 2342(4); 42 U.S.C.
§ 2239(a)(1)(A).
In the FAC, Public Watchdogs alleges the NRC
improperly granted the Utility Defendants’ request for a
license amendment that permitted them to decommission
SONGS. Public Watchdogs further alleges that the NRC
selected Holtec as the supplier of the SNF containment
system with reckless disregard for the safety and competence
issues surrounding Holtec. Public Watchdogs’s FAC also
takes aim at the Holtec SNF canisters, alleging: (1) they do
not comply with acceptable minimum safety requirements for
the design and manufacture of SNF storage containers; and
(2) they are defective as a result of a design change made by
Holtec without the NRC’s approval. Additionally, Public
Watchdogs complains of the Utility Defendants’ allegedly
negligent decommissioning conduct, including using less
personnel than necessary to ensure that Holtec SNF canisters
are safely loaded into the SONGS ISFSI, scratching or
gouging several Holtec SNF canisters prior to burying them
at SONGS, and mishandling two loaded Holtec SNF canisters
as they were loaded into the SONGS ISFSI.
40 PUBLIC WATCHDOGS V. S. CAL. EDISON
Based on these allegations, Public Watchdogs claims the
Private Defendants violated the Price–Anderson Act by
“burying SNF in defective canisters that are destined to fail.”
Public Watchdogs’s public nuisance claim, in turn, is
predicated on the Private Defendants’ reckless handling of the
SNF, their failure to investigate and replace the defective
Holtec SNF canisters, and their intent to continue to store
additional SNF in the Holtec SNF canisters despite the known
defects of the canisters. Finally, Public Watchdogs’s strict
products liability claim against Holtec is predicated on the
allegedly defective design of the Holtec SNF canisters. To
remedy these alleged violations, Public Watchdogs sought to
enjoin any further decommissioning efforts by the Private
Defendants.
Although Public Watchdogs frames its claims against the
Private Defendants as a challenge to private entities’ alleged
mishandling of nuclear waste, it alleges the 2015 License
Amendments (which permits the storage of SNF at SONGS
in the storage systems certified by the NRC) were improperly
granted and the Holtec SNF canisters (which were certified
for the storage of SNF at SONGS by the NRC in a Certificate
of Compliance) do not comply with minimum safety
requirements for SNF storage containers and are defective.
Thus, it is clear from the allegations in the FAC that Public
Watchdogs’s claims against the Private Defendants are
properly viewed, in part, as a veiled challenge to the 2015
License Amendments and the Certificate of Compliance for
the Holtec System.
We have previously rejected litigants’ attempts to
disguise their claims to avoid an exclusive avenue of judicial
review selected by Congress. For example, in American Bird
Conservancy v. FCC, 545 F.3d 1190, 1195 (9th Cir. 2008),
PUBLIC WATCHDOGS V. S. CAL. EDISON 41
we held that a plaintiff could not avoid the Communications
Act’s and the Hobbs Act’s exclusive avenue of judicial
review in the courts of appeals by “characterizing its suit as
a challenge to the agency’s compliance with federal
environmental laws rather than to the agency’s ultimate
order.” There, to avoid Hobbs Act review in the court of
appeals, the plaintiff attempted to use the Endangered Species
Act’s citizen-suit provision—which grants district courts
subject-matter jurisdiction over suits by a person to enjoin
any person that is violating the Endangered Species Act—to
challenge the Federal Communication Commission’s
(“FCC”) grant of registration applications for seven
communication towers. Id. at 1191–92. The plaintiff
“carefully disclaim[ed] any intent to challenge the tower
registrations themselves” and instead framed its challenge “as
an objection solely to the FCC’s failure to consult with the
Secretary [of the Interior] before granting the tower
registrations.” Id. at 1193. We rejected this attempt, however,
and agreed with the FCC that, “despite [the plaintiff]’s artful
pleading, [the plaintiff’s] core objections [were] to the tower
registrations themselves and to the FCC’s policy of
delegating to applicants its responsibilities under the
[Endangered Species Act].” Id. Therefore, recognizing that,
“[i]n analogous contexts, we ha[d] concluded that a plaintiff
may not escape an exclusive avenue of judicial review
through artful pleading,” id. at 1194, we declined to let the
plaintiff “avoid the strict jurisdictional limits imposed by
Congress,” id. at 1195 (quoting Cal. Save Our Streams
Council, Inc. v. Yeutter, 887 F.2d 908, 911 (9th Cir. 1989)).
In reaching this decision, we relied on our earlier decision
in California Save Our Streams Council, Inc., where the
Federal Energy Regulatory Commission (“FERC”) granted
Alternative Energy Resources a license to construct and
42 PUBLIC WATCHDOGS V. S. CAL. EDISON
operate a hydroelectric power facility in the Sierra National
Forest. 887 F.2d at 909. The Federal Power Act required
FERC to solicit and accept conditions for the license
determined by the Forest Service (the agency responsible for
the protection and use of the Sierra National Forest). Id.
at 910. The plaintiffs proceeded to challenge the FERC
license conditions in administrative proceedings held before
the Forest Service and in district court. Id. In the district
court, the plaintiffs argued FERC’s grant of the license
violated the National Environmental Policy Act (“NEPA”)
and the American Indian Religious Freedom Act (“AIRFA”);
thus, it argued the district court had subject-matter
jurisdiction over the dispute under 28 U.S.C. §§ 1331, 1343,
and 1362. Id. The district court disagreed, finding the
language of the Federal Power Act vested exclusive
jurisdiction over the plaintiffs’ action in the courts of appeals.
See id.On appeal, we held that the Federal Power Act “vest[ed]
sole jurisdiction over questions arising under the FERC
licenses in the [c]ourts of [a]ppeals.” Id. at 911. Undeterred,
the plaintiffs argued that the Federal Power Act’s exclusive
judicial review provisions were simply not applicable,
because: (1) “their suit was filed against the Forest Service
and arose under the provisions of NEPA and AIRFA”; and
(2) “they [were] not attacking the licensing decision made by
FERC but instead [were] seeking review only of the Forest
Service’s failure to follow the procedural and substantive
steps outlined in statutes outside the purview of power and
energy regulation.” Id. We rejected this argument, reasoning
that,
although [the plaintiffs] seek to characterize
the proceedings as an attack on the Forest
PUBLIC WATCHDOGS V. S. CAL. EDISON 43
Service’s actions, it is clear that the suit is an
attempt to restrain the licensing procedures
authorized by FERC. The . . . conditions
imposed by the [Forest] Service have no
significance outside the licensing process, and
we do not believe that the jurisdictional
remedy prescribed by Congress hangs on the
ingenuity of the complaint. . . . Thus, even if
they attempt to style [their complaint] as an
independent claim against the Forest Service,
the practical effect of the action in district
court is an assault on an important ingredient
of the FERC license.
Id. at 912. Ultimately, we agreed with the district court that
it lacked subject-matter jurisdiction over the dispute. Id.Despite Public Watchdogs’s artful pleading, it is clear its
claims against the Private Defendants are an attempt to
challenge the 2015 License Amendments, the Certificate of
Compliance for the Holtec System, and actions taken by the
licensees under the authority of both of those final NRC
orders. See id.; Am. Bird Conservancy, 545 F.3d at 1193–95.
Thus, like the plaintiffs in American Bird Conservancy and
California Save Our Streams Council, Inc., Public Watchdogs
cannot avoid the Hobbs Act’s exclusive avenue of judicial
review by artfully pleading its challenge to the 2015 License
Amendments and the Certificate of Compliance for the
Holtec System as a Price–Anderson, public nuisance, or strict
products liability claim.
Moreover, to the extent Public Watchdogs’s claims
against the Private Defendants also challenge the Private
Defendants’ conduct that is expressly licensed, certified, and
44 PUBLIC WATCHDOGS V. S. CAL. EDISON
regulated by the NRC, any such challenge falls within the
scope of the Hobbs Act. Put differently, the 2015 License
Amendments and the Certificate of Compliance are
“inextricably intertwined” with the NRC’s regulatory and
enforcement decisions that are in turn related to the
challenged conduct of the Private Defendants. See Am. Bird
Conservancy, 545 F.3d at 1193. Thus, reading § 2239
“liberally” and the Hobbs Act “broadly” to encompass not
only all final NRC actions in licensing proceedings, but all
issues that are preliminary, ancillary, or incidental to those
licensing proceedings, we agree with the district court that
Public Watchdogs’s claims against the Private Defendants
fall within the scope of the Hobbs Act. See Gen. Atomics,
75 F.3d at 539.
Our conclusion that Public Watchdogs’s claims against
the Private Defendants fall within the scope of the Hobbs Act
is, again, bolstered by Public Watchdogs’s decisions to file a
§ 2.206 petition that addressed the same conduct of the
Private Defendants and sought the same remedy as the district
court action and its decision to appeal that order directly to
us. See Lorion, 470 U.S. at 746 (holding that § 2239 places
initial subject-matter jurisdiction over NRC orders denying
§ 2.206 petitions in the courts of appeals).
Therefore, we hold that the district court correctly found
it lacked jurisdiction over Public Watchdogs’s claims against
the Private Defendants, because they challenged NRC
licensing orders or NRC decisions that were ancillary or
incidental to NRC licensing decisions.
PUBLIC WATCHDOGS V. S. CAL. EDISON 45
IV. CONCLUSION
Because Public Watchdogs’s FAC challenged NRC
licensing orders or NRC decisions that were ancillary or
incidental to NRC licensing decisions, the district court
correctly determined that it did not have subject-matter
jurisdiction under the Hobbs Act.13 Accordingly, the district
court’s dismissal of Public Watchdogs’s FAC with prejudice
is AFFIRMED.
13
Because we conclude that the district court correctly determined it
lacked subject-matter jurisdiction over Public Watchdogs’s complaint, we
do not reach the district court’s alternative holding that Public Watchdogs
failed to allege facts sufficient to state a claim for relief under the
Price–Anderson Act, California public nuisance law, or California strict
products liability law.