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General Atomics v. United States Nuclear Regulatory Comm'n



General Atomics, the third-tier corporate parent of licensee Sequoyah Fuels Corporation, filed an action in district court, seeking declaratory and injunctive relief against the Nuclear Regulatory Commission (NRC). General Atomics alleged that the NRC acted in excess of its statutory jurisdiction when it held that General Atomics was jointly and severally liable for cleanup of Sequoyah Fuel’s facility when it ceased to operate. The district court dismissed the action for lack of subject matter jurisdiction, and alternatively, that the suit was premature because the NRC had not entered a final appealable order. The Ninth Circuit affirmed the district court’s dismissal for lack of subject matter jurisdiction, and held that the Court of Appeals would not provide review until General Atomics exhausted its administrative remedies.

Sequoyah Fuels held a Source Materials License issued by the NRC for its facility in Gore, Oklahoma. General Atomics was the third-tier parent of Sequoyah, but held no license for the facility. General Atomics was a NRC licensee for other unrelated facilities. General Atomics acquired Sequoyah Fuels from Kerr-McGee, who was obligated under a prior license to guarantee the proper decommissioning and reclamation of the facility. General Atomics had no similar obligation. The facility ceased operation in 1992, and in 1993 NRC issued an order holding General Atomics and Sequoyah Fuels jointly and severally liable for the cleanup of the facility. In addition, NRC required General Atomics to post bond assurances in the amount of $86 million.

NRC denied General Atomic’s motion for summary disposition, reasoning that material issues of fact remained with respect to the NRC’s jurisdiction. The bond assurance order was stayed pending the conclusion of hearings to determine whether NRC could exercise jurisdiction over General Atomics. General Atomics filed suit in district court seeking judgment that NRC acted in excess of the jurisdiction granted in the Atomic Energy Act. The district court dismissed for lack of subject matter jurisdiction because initial jurisdiction of the claim was vested in the courts of appeal under the Hobbs Act,[1] and alternatively, that there was no appealable order issued by NRC.

The Ninth Circuit agreed that it had initial jurisdiction of the claim pursuant to the Hobbs Act and the Supreme Court’s holding in Florida Power & Light Co. v. Lorion.[2] In Lorion, the Supreme Court held that the Hobbs Act is to be read broadly to encompass all final NRC decisions that are preliminary or incidental to licensing.[3] The Ninth Circuit rejected General Atomics’ argument that the Hobbs Act did not apply because General Atomics did not have a license. The goal of the NRC hearing was to determine whether General Atomics, in exercising control over Sequoyah Fuels, was a de facto licensee.

General Atomics also argued that if the district court did not have jurisdiction, it still had the obligation to transfer the action to the court of appeals for adjudication. The federal transfer statute states that “the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action could have been brought.”[4] Because General Atomics had failed to exhaust its administrative remedies, the transferee court, the court of appeals, also lacked jurisdiction to hear the claim. The Ninth Circuit held that a transfer was not appropriate because the court must be able to hear the transferred suit for a transfer to be “in the interest of justice.”

[1]Administrative Orders Review Act, 28 U.S.C. § 2342 (1994).

[2]470 U.S. 729 (1985).

[3] Id. at 737.

[4]28 U.S.C. § 1631 (1994) (emphasis added).

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