Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Imagine walking outside on a crisp November morning and noticing that your trash did not get picked up that week. Then imagine that it didn’t get picked up the next week either, or the next month, or even the next year. Now imagine that the trash happens to be radioactive. That scenario, on a larger scale, is what the nuclear power industry is dealing with when it comes to spent fuel. The federal government’s failure to collect and store the radioactive waste has spawned a slew of litigation against it, with potentially massive liability. The estimated price tag at the moment is hovering around $10 billion. But that number could go higher — much higher, because as the waste piles up, the damages pile up along with it. “We’d like nothing better than to have the government perform what they promised to do and what we paid a lot of money for,” says Jay Silberg, a partner in the D.C. office of Pillsbury Winthrop Shaw Pittman, which is representing about 20 utilities suing the government. Other D.C. firms handling similar actions include Morgan, Lewis & Bockius (which represents 11 utilities), Greenberg Traurig, Arnold & Porter, and Dickstein Shapiro. In all, 67 cases have been brought against the Energy Department over unclaimed nuclear waste. The majority of these cases were filed in the U.S. Court of Federal Claims. Some of the cases have settled, and several are on appeal, but the damages have begun to accumulate, with the court awarding $420 million in eight cases over the past two years. Fifty-six more cases are pending, and that number is likely to grow as utilities run out of storage room in their short-term facilities. “With respect to [the department's] obligations on used fuel, it’s clear that they’ve defaulted and there’s a very serious financial reality associated with that,” says John Keeley, a spokesman for the Nuclear Energy Institute, which represents the industry. When Congress passed the Nuclear Waste Policy Act in 1982, it required that every nuclear power plant in the country enter into a contract with the Energy Department in which the utilities would pay yearly fees into the Nuclear Waste Fund and the department would then dispose of the waste. The plan was to transport the waste to a secure permanent storage facility, such as the one proposed at Yucca Mountain in Nevada. But that facility, so far the only one designated to permanently house nuclear waste, has yet to open, and estimates on when it will be ready range from 2017 to “over my dead body.” The government was supposed to begin picking up spent fuel almost 10 years ago, so that leaves the Energy Department and nuclear power plant operators in a pickle. Utility companies such as Southern Nuclear Operating Co. and Entergy Corp. are forced to keep the spent fuel on reactor sites in 100-ton casks that look like giant concrete and steel beehives, an undertaking that is costing the utilities millions annually. “This is not the kind of stuff you put in a can and stick in your garage,” says Ronald Schechter, an attorney representing Southern Nuclear and a partner in Arnold & Porter’s D.C. office. “There are now 30-some-odd places in the United States where some of the most dangerous material known to humankind is stored.” In addition to these temporary storage costs, the utilities have paid around $15 billion in fees into the Nuclear Waste Fund since 1982. That’s a lot of money to put up for no service. So starting in the mid-1990s, the utilities began to sue. SHOOTING AT THE SUN The first lawyer to file an action was Pillsbury’s Silberg, who has been representing the nuclear power industry for 40 years and has grappled with the question of what to do with radioactive waste his entire career. “Some people ask, �Why don’t you just shoot it into the sun?’ We looked at that,” Silberg says. “There are very few things that we haven’t considered over the years.” Even his children got into the game. When they were teenagers, they sneaked into his office and reprogrammed his computer so that the words “Waste King” scrolled across the screen. When Silberg saw that the Energy Department wasn’t going to make its statutory deadline to begin collecting waste, he began gearing up for industry-wide litigation. He brought the first case in 1994, which was dismissed, and then he filed a second lawsuit in 1995 on behalf of Indiana Michigan Power Co. and other utilities in the U.S. Court of Appeals for the D.C. Circuit. During the oral arguments, Judge Douglas Ginsburg sharply questioned Justice Department attorney John Bryson about what utilities were getting for all the money they were paying into the system. Ginsburg, now chief judge on the court, noted that his grandmother had used an old Yiddish saying: “Here’s air. Give me money.” Ginsburg asked Bryson to distinguish the government’s position from his grandmother’s proverb. “He found no way to do so,” Judge David Sentelle wrote in the opinion for the court, “nor have we.” The court found that the Energy Department had an obligation to take the spent fuel. In a subsequent case, however, the court declined to order the department to do so. So the fight moved to the Court of Federal Claims, where utilities began suing the government for breaching waste removal contracts. The first of those cases, filed in 1998 by three utilities in the Northeast, resulted in a $142 million verdict last year for the plaintiffs. And in the past few months, two of Silberg’s utility clients, Entergy and Northern States Power, have won $175 million in damages in three separate cases. “One of the interesting things about this litigation is that the government can stop the damages from accruing just by performing,” says Jerry Stouck, a partner in Greenberg Traurig’s D.C. office who filed the first breach-of-contract suit and represents several utilities across the country. But stopping the lawsuits may be easier said than done. Because no one’s really sure when the department will be able to fulfill its obligation, the utilities keep on accruing damages, creating a kind of treadmill effect of liability for the government: By the time one case is settled, the utility is already filing another. SCALING YUCCA MOUNTAIN The only near-term hope for breaking the litigation cycle would seem to lie with opening Yucca Mountain, located in the Nevada desert about 90 miles north of Las Vegas. The government has considered a few other sites, but it settled on Yucca Mountain as the most promising — and so far only — location to safely store America’s 65,000 metric tons of radioactive waste. But, though the government spent more than 20 years and billions of dollars investigating it, the site turns out to have some problems. For starters, the rock is more porous than originally thought, meaning that water could seep into the storage area and possibly allow radioactive waste to escape into the environment. Also, it’s fair to say Nevada citizens aren’t keen on the idea of a giant nuclear dump in their state. “Like everyone else on the planet, no one trusts the Department of Energy, and everyone thinks they’re incompetent,” says Robert Loux, executive director of Nevada’s Agency for Nuclear Projects, adding that he thinks the future of Yucca Mountain is not bright, and that it will probably be gone within a year. According to the federal government, the department lacked adequate funding and faced changes in regulations that made it difficult to get the site ready on time. “We think we have a good site,” says Christopher Kouts, the principal deputy director for the Office of Civilian Radioactive Waste Management in the Energy Department. “We’ll have to make our case and withstand public scrutiny.” The Energy Department has yet to file its formal application with the Nuclear Regulatory Commission to open Yucca Mountain, though it says it plans to do so by next June. But Senate Majority Leader Harry Reid (D-Nev.) and Sen. John Ensign (R-Nev.) have already proposed legislation to keep the waste on the reactor sites indefinitely, and few politicians of any stripe have expressed any desire to champion Yucca Mountain. That means litigation over the disposal of nuclear waste is likely to have a long half-life. In testimony before the House Budget Committee on Oct. 4, Michael Hertz, deputy assistant attorney general of the Justice Department’s Civil Division, said the government has already spent $94 million litigating the utilities’ suits. In the same hearing, Edward Sproat III, the director of the Energy Department’s Office of Civilian Radioactive Waste Management, noted that “government liability will continue to grow with no apparent limit.” While that might be good for the utilities’ prospects in court, it still doesn’t give them a place to put their trash.
Attila Berry can be contacted at [email protected].

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.