NRC v. Texas: Supreme Court weighs challenge to NRC authority in spent fuel storage case

The State of Texas et al. v. U.S. Nuclear Regulatory Commission challenges the NRC’s ability to license small modular reactors and microreactors. It was just filed and has yet to play out, but the states involved have expanded and now include Utah, Louisiana, Florida, and Arizona in addition to Texas and three nuclear developers (Last Energy, Deep Fission, and Valar Atomics).

But the other case, U.S. Nuclear Regulatory Commission v. Texas—a case about spent nuclear fuel (SNF) storage—has woven its way up to the U.S. Supreme Court, with a decision expected from the justices by the end of June. In addition to the parties, ten states also filed amicus briefs in support of Texas and its co-respondent.

NRC v. Texas stems from a court challenge brought by Texas, among others, arguing the NRC does not have the legal authority to license an away-from-reactor SNF storage facility—a type of facility the NRC has licensed a number of times over the years under the NRC’s broad authority granted by Congress in the Atomic Energy Act of 1954 (AEA). The courts have affirmed the NRC’s authority to issue this type of license in both the D.C Circuit and Tenth Circuit. But in this current challenge, the Fifth Circuit—which includes Texas—took a different path and determined that the NRC does not in fact have this type of licensing authority. The decision immediately impacted two recently licensed SNF storage facilities—one in Texas and one just across the border in New Mexico.

The Fifth Circuit also significantly expanded the ability of third parties to challenge an NRC licensing action. In addition to affecting these specific issues, a Supreme Court decision in this case could have wider-ranging implications across the nuclear sector, including licensing in general. It is also likely to impact ongoing discussions about the long-term storage and disposal of SNF more broadly.

Those in the nuclear industry should watch carefully for the Supreme Court’s decision in the near term. We walk through the case in more detail below.

How did spent fuel get to the Supreme Court?

Under the AEA, as supported by decades of precedent both at the NRC and in federal courts, the NRC has wide-ranging licensing authority, including the ability to license a broad array of facilities that use or possess radioactive material, including SNF. The NRC’s licensing authority has been recognized to extend to licensing consolidated interim storage facilities (CISFs), which are away-from-reactor facilities where SNF is stored in casks on a concrete storage pad until a permanent repository opens.

In the past few years there has been an increased interest in CISFs, especially as more nuclear reactors faced decommissioning with no off-site storage or disposal path emerging for their SNF. The NRC recently licensed two CISFs: one in Texas and one in New Mexico. The origin of this case dates to September 2021, when the NRC issued a 40-year license to Interim Storage Partners, a joint venture between Orano USA and Waste Control Specialists, to “receive, possess, store, and transfer” up to 5,000 metric tons of SNF and 231.3 metric tons of Greater-than-Class-C waste at a proposed CISF adjacent to WCS’s existing low-level nuclear materials disposal facility in Andrews County, Texas.

During the original licensing proceeding, several groups tried to intervene, but the NRC denied those intervention requests. One attempted intervenor was Fasken Land and Minerals, one of the country’s largest private landowners, which grazes cattle, operates oil and gas wells, and has real estate developments near the proposed ISP facility. The state of Texas did not attempt to intervene or otherwise formally participate in the licensing proceeding, but it submitted comments on draft environmental documents and sent letters to the NRC and commission chair Chris Hanson.

Around the same time, Holtec International applied for a license for a proposed CISF facility in New Mexico, which the NRC issued in May 2023. Multiple court challenges were brought pertaining to the ISP and Holtec facilities, including two cases in the Fifth Circuit in Texas, one case in the Tenth Circuit in New Mexico, and one in the D.C. Circuit. The Tenth and D.C. circuits had held in the mid-2000s that the NRC could license CISFs—a precedent they both upheld, reaffirming that the NRC was authorized to license the ISP and Holtec facilities.

However, contrary to precedent, a three-judge panel of the Fifth Circuit found that although the AEA provides the NRC with authority over the construction and operation of nuclear power plants as well as special nuclear material, source material, and byproduct material, the NRC does not have the specific authority to license storage facilities for SNF. The court listed the enumerated purposes for which a license can be issued and determined that because storage of SNF is not enumerated, the NRC has no jurisdiction over it under the AEA.

The Fifth Circuit next looked at the Nuclear Waste Policy Act (NWPA). That act tasked the Department of Energy with establishing a permanent storage repository while giving the NRC applicable licensing authority. The court found this authority is limited to storage of SNF “at the site” of the reactor—therefore, the court found no authority to issue a license for a private entity to store SNF away from a reactor site.

The Fifth Circuit decision also overturned long-standing precedent and case law about who could challenge an NRC license—a concept called “standing,” which refers to who can use the courts to bring a challenge in the first place. Under the Hobbs Act, which governs appeals from NRC licensing actions, a person has standing if they participated in the prior agency proceeding on the licensing action at issue. The Fifth Circuit found that Fasken and Texas’s attempts to participate—an attempt to intervene for Fasken and submittal of comments by Texas—were enough under this statute.

This difference between the recent Fifth Circuit decision and the prior decisions in the Tenth and D.C. circuits created what is known as a “circuit split”—when different U.S. circuit courts reach different conclusions on the same question of federal law—and prompted the Supreme Court to take up the case for review.

The case at SCOTUS—so far

Seated from left are Justices Sonia Sotomayor and Clarence Thomas, Chief Justice John G. Roberts Jr., and Justices Samuel A. Alito and Elena Kagan. Standing from left are Justices Amy Coney Barrett, Neil M. Gorsuch, Brett M. Kavanaugh, and Ketanji Brown Jackson. (Photo: Fred Schilling, Collection of the Supreme Court of the United States)

After the Fifth Circuit invalidated ISP’s license, the NRC and ISP appealed to the Supreme Court, which accepted the case in October 2024. In their appeal, the NRC and ISP broke down the Fifth Circuit’s decision into two questions: procedurally, whether Texas and Fasken could challenge ISP’s license under the Hobbs Act; and substantively, whether the NRC has the authority under the AEA and NWPA to license away-from-reactor private interim storage of SNF, such as a CISF.

On the procedure, the NRC and ISP argued that Texas and Fasken had no right to challenge the license in the Fifth Circuit because they were not “parties” to the license proceeding at the NRC. To be a “party,” they argued, one must actually be an intervenor in the licensing action—merely trying to intervene (Fasken) or submitting comments (Texas) is not enough. Texas and Fasken disagreed, arguing that the Hobbs Act requires only that a party participate or seek to participate in the agency proceeding in some way.

On the substance, the NRC and ISP asserted that the AEA’s plain text authorizes off-site storage of SNF by giving the NRC exclusive jurisdiction to license the transfer, delivery, receipt, acquisition, possession, and use of nuclear materials, including the three types of nuclear material in spent nuclear fuel (special nuclear, source, and byproduct materials). As the NRC pointed out, it regularly issues licenses for facilities that are not explicitly enumerated in the AEA but involve the possession of nuclear material that falls under the NRC’s broader licensing authority. Additionally, the NRC has long asserted authority to license off-site storage of spent nuclear fuel in other agency documents and its regulations.

With respect to the NWPA, the NRC and ISP argued that the law took as its starting point and preserved intact the NRC’s authority under the AEA to license private temporary off-site storage of spent nuclear fuel. It neither vested the NRC with new licensing authority nor took away prior authority under the AEA.

Texas and Fasken argued on the other hand that Congress never explicitly gave the NRC the authority to license CISFs, and therefore the NRC cannot do so. They pointed out that the AEA does not explicitly address private away-from-reactor storage of SNF. Moreover, they asserted that the NWPA is the controlling statute regarding storage of SNF and nuclear waste in the United States. Because the NWPA directs development of a federal permanent repository for SNF, a permanent repository is the only alternative to on-site spent fuel storage.

Notably, ten states also filed amicus briefs in support of Texas and Fasken. Amicus briefs are filed by nonparties who have an interest in a particular case. States that filed amicus briefs include Utah, which, as noted above, is currently suing the NRC (along with Texas and other states) in the Texas district court case over the NRC’s microreactor licensing authority, and Michigan, which is politically and financially encouraging the potential restart of Palisades nuclear plant. The states who filed amicus briefs were concerned generally about state consent to spent fuel storage—a long-standing issue in the nuclear waste discussion—and, for Utah and others, the NRC’s supposed overreach of its authority under the AEA.

So far, our only glimpse of how the Supreme Court might decide comes from oral arguments, which were held on March 5. Oral arguments allow the justices to ask the parties questions—some of which can indicate how a justice is thinking about an issue.

One takeaway from the oral arguments is that there was no apparent clear majority in favor of either set of parties. Justices Clarence Thomas and Samuel Alito, who tend to be the most skeptical of federal agencies, seemed sympathetic to Texas and Fasken, as was Justice Neil Gorsuch. Thomas thought it “strange” that the NRC could decide who intervenes against it, a sentiment Gorsuch echoed. Alito and Gorsuch questioned why the AEA authorized only the licensing of source, special, and byproduct materials if Congress meant the NRC to license off-site spent fuel storage.

Justices Ketanji Jackson, Sonia Sotomayor, and Elena Kagan, on the other hand, appeared generally supportive of the NRC and ISP. These three justices typically support a broad theory of agency authority, although even Kagan suggested the NRC’s own rules about intervention might be too strict. Jackson in particular interrogated Texas and Fasken about why they were “parties” under the Hobbs Act, sounding skeptical that anything except intervention in a licensing action would be enough to grant standing to appeal.

Where the remaining three justices—John Roberts, Amy Barrett, and Brett Kavanaugh—fall is unclear and may well depend on the particular legal holding of the court. Kavanaugh asked questions suggesting sympathy to both parties’ positions and demonstrated a sophisticated understanding of the history of the AEA. Chief Justice Roberts asked very few questions, and Barrett asked none at all. These three justices tend to weigh the role of the court itself more heavily, considering how any decision might affect the predictability and practicality of the law. The long-standing precedent behind the NRC’s authority to license SNF may be more important for these justices, as could any effects of their decision on the nuclear industry.

What comes next

The Supreme Court typically issues decisions in May and June, with many decisions coming out at the end of June prior to the court adjourning for summer recess, leaving licensees to speculate in the meantime about possible outcomes and impacts.

One consideration is recent Supreme Court decisions in other cases. This case comes on the heels of several decisions breaking down the power of federal agencies like the NRC. In 2024 alone, the Supreme Court decided that agencies lacked deference when interpreting their own statutes, could not impose certain civil penalties in enforcement actions, and can have their rules challenged in court at effectively any time.

Also in the background is the wider political context in the United States. The Trump administration is trying to break down the broad authority federal agencies have typically wielded. Executive orders issued since January 2025 restrict agencies’ abilities to issue regulations, and Trump is testing his authority to replace the heads of independent agencies—of which the NRC is one. While the Supreme Court is supposed to decide its cases on an independent legal basis separate from political winds, any decision will almost certainly be interpreted within this broader antiagency atmosphere.

The wider impacts of NRC v. Texas on NRC licensing depend on the basis of the Supreme Court’s holding. Oftentimes, a case will contain several separate grounds for the court to decide on, of which the court might rule on only one or two. Roberts in particular is known for his incremental approach, trying to decide cases on narrow, specific bases where possible.

Here, the Supreme Court may well decide the procedural question—whether Texas and ISP had standing to sue under the Hobbs Act—without even touching the NRC’s ability to license CISFs. A Hobbs Act holding on appeals from licensing actions would complement last year’s case expanding who could appeal an agency rule. However, the Hobbs Act applies to only a few agencies, such as the NRC and Federal Communications Commission, so the impact on federal agencies as a whole would be limited.

The court could also decide whether the AEA gives the NRC authority to license CISFs, although it would likely do this only if it first decided that Texas and Fasken had standing. A holding that the NRC could not license away-from-reactor private storage would limit the U.S. nuclear industry’s SNF storage options, putting the burden back on reactor licensees to manage their SNF until a permanent repository opens. Removing the option of CISF could feasibly have a chilling effect on new reactor projects at a time when the domestic nuclear industry seeks to grow.

In any case, the Supreme Court’s decision in NRC v. Texas could play an important role in the NRC’s licensing abilities—or at least the time it spends defending its licenses in court. Only time will tell how this case might impact the nuclear industry as a whole, but anyone with an interest in NRC licensing or spent fuel storage should watch carefully for the Supreme Court’s decision.

Amy Roma is a partner and global energy practice leader at the law firm of Hogan Lovells. Cameron Hughes is an associate at Hogan Lovells. They are both based in Washington, D.C.