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Supreme Court Decides Virginia Uranium, Inc. v. Warren: Rejects Preemption Challenge to Virginia’s Moratorium on Mining Uranium Ore on Nonfederal Land

July 15, 2019

On June 17, the U.S. Supreme Court decided Virginia Uranium, Inc. v. Warren, a case that, while focused on federal preemption, could have cascading impacts relating to states’ sovereign rights to regulate environmental matters.

The Supreme Court case originated in a lawsuit brought against officials of the Commonwealth of Virginia by mining companies and owners of private land containing uranium deposits.  The suit sought declaratory and injunctive relief against the Commonwealth of Virginia state officials, asserting that a Virginia law preventing state agencies from accepting uranium mining permit applications is preempted by the federal Atomic Energy Act (“AEA”). The petitioners before the Supreme Court – and the plaintiffs in the suit – were Virginia Uranium, Inc., Coles Hill, LLC Bowen Minerals, LLC, and Virginia Energy Resources, Inc. The respondents were the Commonwealth of Virginia’s Governor, two cabinet secretaries, and Commonwealth of Virginia officials affiliated with the Department of Environmental Quality and the Department of Mines, Minerals, and Energy.[1]

I. Background on the Atomic Energy Act

Understanding the case requires some background on the AEA. The AEA was enacted in 1946 in response to Congress’s post-WWII desire to extend the use of atomic energy to civilian purposes. Congress sought, among other goals, to “assur[e] the common defense and security” and “improv[e] the public welfare.”[2] Initially, under the AEA, the “use, control and ownership of nuclear technology” was held under “federal monopoly.”[3] The monopoly didn’t last. Congress realized that “the national interest would be best served if the Government encouraged the private sector to become involved in the development of atomic energy for peaceful purposes under a program of federal regulation and licensing.”[4] Congress delegated its authority over the “‘processing and utilization’ of source materials,”—which it premised such authority “on its powers respecting ‘interstate and foreign commerce,’ ‘common defense and security,’ and public ‘health and safety’”— to the Nuclear Regulatory Commission (“NRC”) to promulgate licensing rules on said source materials.[5] Today, three federal agencies implement the AEA: the NRC, the Department of Energy, and the Environmental Protection Agency. The NRC serves as the primary licensing and regulatory authority under the AEA. The Department of Energy exercises responsibility for research and development programs and the Environmental Protection Agency establishes environmental standards for radiation hazards.

The NRC, pursuant to its authority under the AEA, regulates atomic “source material” and its byproducts through the Commission’s licensing authority.[6] The AEA defines source material as “(1) uranium, thorium, or any other material which is determined by the [NRC] pursuant to the provisions of Section 2091 of [the AEA] to be source material; or (2) ores containing one or more of the foregoing materials, in such concentration as the [NRC] may by regulation determine from time to time.”[7] The AEA grants authority to the Commission to issue “rules, regulations, or orders requiring reports of ownership, possession, extraction, refining, shipment, or other handling of source material …, except that such reports shall not be required with respect to (a) any source material prior to removal from its place of deposit in nature, or (b) quantities of source material which in the opinion of [NRC] are unimportant or the reporting of which will discourage independent prospecting for new deposits.”[8] The AEA does not extend federal regulatory or licensing authority to uranium deposits on private land or the conventional mining of those deposits.[9] The AEA also provides “Nothing in this section shall be construed to affect the authority of any state or local agency to regulate activities for purposes other than protection against radiation hazards.[10] “Activities” is not defined in the AEA.

II. Factual Background

Petitioners Coles Hill and Bowen Minerals own land that holds a subsurface deposit of approximately 119 million pounds of uranium ore, the largest natural deposit of uranium in the United States and one of the largest in the world.[11] The deposit was discovered in the early 1980s.[12] In reaction to the discovery, the Virginia General Assembly asked the Virginia Coal and Energy Commission to “evaluate the environmental effects … and any possible detriments to the health, safety, and welfare of Virginia citizens which may result from uranium exploration, mining or milling.”[13] Before the Commission published its report, the Virginia General Assembly imposed a moratorium on uranium mining until a program “for permitting uranium mining is established by statute.”[14] To this day, the envisioned program has not been established by statute and the moratorium remains in effect.[15] The law that remains in place directly prohibits Virginia from accepting any application for a permit to mine uranium deposits and therefore prevents conventional mining of such deposits on nonfederal land throughout the Commonwealth of Virginia.[16]

Coles Hill and Bowen Minerals leased the mineral estate to Virginia Uranium, Inc. for a term to last until 2045. Under the lease, Coles Hill and Bowen Minerals maintain a royalty interest in the mineral estate.[17]

Virginia Uranium planned to extract the resource from the uranium deposit through a conventional underground mine. Developing the ore deposit into usable uranium would have involved mining, milling and tailings management. Specifically, following the extraction, the uranium ore would be milled, meaning it would be processed into a usable form by separating the pure uranium from the tailings, which are a waste byproduct of the milling process.[18] The pure uranium is then dried into a powder called “yellowcake”— the product that can be commercially distributed for enrichment into fuel for nuclear reactors, or for production of nuclear weapons.[19] Mill tailings contain heavy metals and radium. Tailings produce a radioactive gas that must be contained securely.

Virginia Uranium sought a permit from the Commonwealth of Virginia to mine the uranium ore. In accordance with the statutory moratorium, the Commonwealth of Virginia refused to accept the permit application.

III. Proceedings in the Lower Federal Courts

a. Trial Court

The Petitioners sued, asserting that the Virginia General Assembly improperly based the mining moratorium on radiological safety hazards. The Petitioners contended that the moratorium was preempted by the AEA, which states, “Nothing in this section shall be construed to affect the authority of any state or local agency to regulate activities for purposes other than protection against radiation hazards.[20]

There are three types of federal preemption. The first exists when there is an express statement by Congress within the statute that the law shall preempt state laws.[21] The second and third types of preemption impliedly exist in the absence of any express statutory statement by Congress where the state law actually conflicts with the federal law or where the federal law “occupies” a legislative field such that any state law within that reach is preempted.[22]

The Petitioners argued that Virginia’s moratorium implicated the third type of preemption, called “field” preemption. The Petitioners moved for summary judgment on grounds that the moratorium was preempted by the AEA. In Petitioners’ view, the AEA occupied the field of nuclear power, and the moratorium conflicted with and obstructed that purpose of the AEA: By “obviating potential on-site milling and mill-tailings management, [the Virginia law] conflicts with Congress’ judgment that those activities may proceed.”[23]

In response, the Respondents moved to dismiss the action. The District Court granted the motion to dismiss. The District Court held that the Virginia law did not intrude into any field occupied by the AEA and that the law did not “obstruct [any] realization of Congress’ purposes and objectives behind the AEA.”[24] Specifically, the District Court found the AEA does not regulate any of the activities or materials subject to Virginia’s moratorium because the AEA does not regulate uranium deposits or their conventional mining on nonfederal land. Thus, there could be no field preemption. The District Court also disagreed with the Petitioners’ contention that the law conflicts with, and obstructs, a “primary purpose of the [AEA] … the promotion of nuclear power.”[25] The District Court explained:

Congress has broadly stated a policy promoting atomic energy, see 42 U.S.C. §2011, but it has evinced no purpose or objective that nonfederal uranium deposits be conventionally mined. Congress has provided for the regulation of milling and mill tailings, see id. §§ 2014(e)(2), 2111-14; id. § 7901 et seq., but it has evinced no purpose or objective that nonfederal uranium deposits should be conventionally mined for milling’s and mill-tailings management’s on-site accompaniment. Va. Code Ann. § 45.1-283 does not, in any meaningful way, obstruct the realization of Congress’ purposes and objectives behind the AEA.[26]

b. Appellate Review

The Petitioners appealed the District Court’s ruling on preemption. On appeal, Petitioners presented three arguments: (1) conventional uranium mining is an “activity” under Section 2021(k) of the AEA and, therefore, Virginia may not regulate it based on concern for radiological safety; (2) even if conventional uranium mining is not a regulated “activity” under the AEA, uranium-ore milling and tailings storage are regulated activities under the AEA, and because the Virginia legislature intended to and does regulate those activities via the moratorium, the moratorium is preempted; and (3) the moratorium is an obstacle to the full implementation of the AEA’s objectives.[27]

The United States Court of Appeals for the Fourth Circuit affirmed the District Court’s decision, rejecting all three arguments proffered by Petitioners. First, the Court of Appeals held that uranium mining on nonfederal land is not an “activity” that 42 U.S.C. § 2021(k) allows states to “regulate [] for purposes other than protection against radiation hazards.”[28] Thus, Virginia could regulate uranium mining on nonfederal land outside the ambit of Section 2021(k).

Second, although the Fourth Circuit agreed with Petitioners that milling and tailings storage are regulated activities under Section 2021(k), the Court noted that because the ban does not mention milling or tailings storage, it is not clearly attempting to impermissibly regulate such activities. The Court of Appeals concluded, therefore, that there can be no preemption.[29] In reaching that conclusion, the Fourth Circuit quoted the U.S. Supreme Court’s observation that it is “‘pointless for courts to invalidate statues that may then be reenacted with a different motive [...] it should be up to Congress to determine whether a state has misused the authority left in its hands.”[30]

Finally, the Fourth Circuit held that the Commonwealth of Virginia’s ban on conventional mining would not materially affect the objective of the AEA, which is to safely develop and use atomic energy. The Fourth Circuit based its conclusion on three facts: (1) most of the nation’s uranium is imported, (2) current mining of most deposits occurs on federal land, and (3) the NRC ultimately has the power to purchase, condemn or otherwise acquire real property containing deposits of source material.

IV. U.S. Supreme Court Review

The Petitioners petitioned the U.S. Supreme Court for review of the Fourth Circuit decision, maintaining that while Virginia’s ban on uranium mining was framed to fall within the state’s regulatory jurisdiction, the ban was motivated by environmental and safety concerns surrounding the activities that necessarily follow mining— namely, the milling of the ore and storage of the tailings. The U.S. Supreme Court granted certiorari on the following question: whether “the AEA preempt[s] a state law that on its face regulates an activity within its jurisdiction …, but has the purpose and effect of regulating the radiological safety hazards of activities entrusted to the NRC.”[31]

a. Briefing

Petitioners argued that the text and structure of the AEA define the field preempted by the AEA and that the Virginia law’s stated purpose – which Petitioners maintained was to address safety concerns – clearly enters into that field. Petitioners also maintained that the Fourth Circuit erred in its decision that the ban is not an obstacle to the full implementation of the AEA objectives. Petitioners contended that the moratorium stifles a primary goal of the AEA – to promote use of nuclear power. The Petitioners also urged the U.S. Supreme Court to do what they claimed the Fourth Circuit refused to do, which was to “‘look past the [state] statute’s plain meaning to decipher whether the legislature was motivated’ by radiological safety concerns relating to uranium milling and tailings storage.”[32]

The Respondents, by contrast, maintained that “we have never conceded that […] the Virginia legislature’s sole purpose in imposing a moratorium on conventional uranium mining was based on radiological safety concerns associated with uranium milling and tailings.”[33] Regardless, the Respondents underscored that the AEA can’t preempt the state moratorium because the AEA only regulates uranium after its removal from its place of deposit in nature, whereas the moratorium regulates mining of uranium ore, i.e. removal of the ore from its place of deposit in nature.[34]

Amicus curiae briefs were filed in support of Petitioners by:

  • The Nuclear Energy Institute,
  • The United States’ Trump Administration,
  • U.S. Senators Tom Cotton (AR), Jim Inhofe (OK), and Ted Cruz (TX),
  • Entergy Operations Inc. and Entergy Nuclear Operations Inc.,
  • U.S. Chamber of Commerce, and
  •  Fourteen former senior nuclear regulatory officials for the NRC.

The following groups filed amicus curiae briefs in support of Respondents:

  • Law professors from Georgetown University Law Center, Lewis & Clark Law School, University of Texas at Austin School of Law, Wake Forest University School of Law, specializing in preemption law, constitutional law, and/or administrative law,
  • An assembly of states including Indiana, Washington, Hawaii, Maryland, Massachusetts, New Jersey, Oregon, Pennsylvania, Rhode Island and Texas (the “States”),
  • Members of the Southern Virginia Delegation to the Virginia General Assembly, Local Chambers of Commerce, Civic, Trade, and Economic Development Associations, and Municipalities, and
  • Three nonprofit environmental interest organizations dedicated to preserving two rivers that flow through the Coles Hill land in Virginia where Petitioners had proposed to conduct their mining operations.

b. Oral Argument

Oral argument was heard by the Court on November 5, 2018. The Justices asked counsel for Petitioners, and Solicitor General Francisco on behalf of the United States as amicus curiae, primarily questions relating to legislative purpose. The Justices inquired of the Solicitor General whether such a legislative motive analysis should always be employed to evaluate whether a state law actually conflicts with the AEA, and whether the activity prohibited by Virginia is a regulated activity under the AEA.[35] The Justices asked counsel for Respondents whether the moratorium would be preempted by the AEA if the Respondents conceded that the moratorium was motivated safety concerns. Respondents maintained that the moratorium wouldn’t be preempted under such a hypothetical because the moratorium applies only to material that has not yet left the ground and therefore does not apply to an AEA-regulated activity.[36]

c. Supreme Court Decision

On June 17, 2019, the U.S. Supreme Court affirmed the District Court and Fourth Circuit decisions in an unusual three-way split. The majority opinion was delivered by Justice Gorsuch, joined by fellow conservatives Justice Thomas and Justice Kavanaugh. Justice Ginsburg wrote a concurring opinion in which she was joined by fellow liberals Justice Sotomayor and Justice Kagan.  Chief Justice Roberts wrote a dissenting opinion, in which Justice Breyer and Justice Alito joined. In other words, six Justices spanning the Court’s ideological spectrum agreed in the outcome, but divided equally on the rationale for the decision. Under Supreme Court practice, when the Chief Justice dissents, the most senior Associate Justice in the majority – in this case, Justice Thomas – decides who will write the majority opinion for the Court. In reality, however, the majority opinion garnered no more support than the concurring opinion.

d. Majority Opinion

The majority opinion rested on three primary points: statutory interpretation, field preemption, and that the state law was not an “obstacle” to the full implementation of the AEA. First, the majority opinion explained that, in the case of non-federal land, the regulatory powers granted to the NRC by the AEA only arise after the mining has technically occurred. In other words, NRC’s regulatory powers come into play only after the uranium is removed from “its place of deposit in nature.”[37] The AEA’s Section 2021(k) does nothing to extend the NRC’s power to include mining on non-federal land. Rather, Section 2021(k) clarifies that nothing in the AEA limits a state’s ability to regulate activities also subject to NRC control for purposes other than protection against radiation hazards.[38]

Second, the majority opinion declined to evaluate under Section 2021(k) why the Virginia legislature chose to enact the moratorium on mining.[39] The majority held that field preemption requires an examination of what a state did, not why it did it (and what Virginia did was permissible).[40] The majority opinion also alluded to the difficulty of having a court evaluate state legislative intent in this situation.

Third, the majority opinion declined to accept Petitioners’ argument that Virginia’s law stands as an “impermissible ‘obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’”[41] Instead, the majority observed that judicial evaluation of the purpose for which Congress enacted the AEA encounters similar difficulties as judicial evaluation of the purpose behind a state legislature’s enactment of a state statute.[42] The majority concluded that a court can only be certain of what is actually written into the statutory language, and the AEA’s language indicates both that the states retain control over mining regulation on private land and that the NRC holds regulatory authority only after the uranium is removed from its deposit in nature.[43] Additionally, the Court observed that it is also unclear whether state laws like Virginia’s would have a meaningful impact on the development of nuclear power in the United States given it currently imports 90 percent of the uranium used domestically.[44]

e. Concurring Opinion

The concurring Justices agreed with the majority’s plain reading of the AEA, finding that the AEA does not conflict with Virginia’s law on its face. However, they viewed the majority’s discussion of the “perils of inquiring into legislative motive” unnecessary to the outcome of the case. For the concurring Justices, evaluating whether the Virginia’s law was enacted for the purpose of protection against radiation hazards and thus entered into the regulated “field” of the AEA was an unnecessary exercise because the act of mining on private land is not regulated by the AEA.[45] Similarly, the concurring opinion expressed concern that Justice Gorsuch’s critical evaluation of Petitioners’ argument under the “obstacle” preemption doctrine was superfluous to the case. Because “federal regulation of certain activities does not mean that States must authorize activities antecedent to those federally regulated,” the concurrence found the Virginia law was not an “obstacle” to the AEA’s implementation.[46]

f. Dissenting Opinion

The dissent objected that the majority failed to answer the question on which the Court granted certiorari. The dissent maintained that the issue was whether a state can regulate an activity not preempted by the AEA if the state regulation has an indirect “purpose and effect” of regulating other fields that are preempted under the AEA. Addressing that issue head on, the dissent found the Virginia moratorium on mining of uranium had the purpose and effect of regulating uranium milling and tailings and, therefore, was preempted under the AEA.[47]

V. Conclusion

The U.S. Supreme Court’s decision in Virginia Uranium leaves unanswered significant questions regarding whether Justice Gorsuch’s views of preemption doctrine in the majority opinion represent the direction of the Court. Nonetheless, the decision is a victory for state regulatory authority, with substantial implications for the role of states in environmental regulation.

For example, the amicus curiae brief filed by the States raised concerns about the potential implications for overlapping regulation under the AEA and the Resource Conservation and Recovery Act (RCRA). RCRA “establishes ‘cradle to grave’ regulation of hazardous waste” and 48 states “administer RCRA-authorized state hazardous waste programs in lieu of RCRA” as a result of authority delegated by the Environmental Protection Agency to the states under RCRA.[48] These programs include permit terms and conditions for the operating a hazardous waste treatment, storage or disposal facility and define standards for closure and cleanup of any hazardous waste facility impacted by releases during its operational lifetime.[49]

Where RCRA and the AEA intersect is in the regulation of “mixed waste.” While RCRA specifically excludes AEA material from its definition of hazardous waste, when non-radioactive hazardous waste commingles with AEA material, the ensuing “mixed waste” becomes subject to RCRA due to the fact that RCRA maintains authority over the hazardous component of the mixed waste.[50] Simultaneously, the Department of Energy holds “exclusive authority to regulate the radioactive component of waste mixtures, whereas the Environmental Protection Agency – or states authorized by the Environmental Protection Agency under RCRA – retain the authority to regulate the hazardous portion [of mixed waste].”[51] The States’ regulation of storage, treatment, and disposal of hazardous waste within their RCRA-authorized jurisdiction can overlap with the AEA when (a) dealing with the closure of tanks containing an AEA material component, (b) ensuring performance standards for waste removal and decontamination treatment prior to disposal, and (c) issuing penalties to facilities that manage hazardous waste with an AEA material component.[52]

The Court’s decision in Virginia Uranium offers greater assurance that state environmental laws will not be preempted based on “intent” or the “obstacle” doctrine when states are regulating within the scope expressly afforded them by federal statute.  Rather, a state can have confidence in the validity of the environmental laws passed within its jurisdiction when Congress explicitly provides for states to fill that area— including where the subject state law inhibits or restricts activities antecedent to federally regulated activity.[53]

[1] Virginia Uranium, Inc. v. McAuliffe, et al., 147 F. Supp.3d 462, 466 (W.D. Va. 2015)(Warren I).

[2] Id. at 469 (quoting AEA of 1946, Pub. L. No. 585, ch. 724, 60 Stat. 755-56, §1(a))

[3] Brief of Petitioner, at *10, Virginia Uranium, Inc. v. Warren, et al., No. 16-1275, 2018 WL 3546327 (July 19, 2018)(citing Pacific Gas & Elec. Co. v. State Energy Resources Conservation & Dev. Commission, 461 U.S. 190, 206 (1983)).

[4] Id. (quoting Pacific Gas, 461 U.S. at 206).

[5] Warren I, 147 F.Supp.3d at 470 (citing 42 U.S.C. § 2012(c), (d); ch. 1073 §1(c), (d), 68 Stat. at 921.

[6] 42 U.S.C. § 2092, § 2111(a)).

[7] Warren I, 147 F.Supp3d at 470 (citing 42 U.S.C. § 2014(z)).

[8] Id. [emphasis added] (citing 42 U.S.C. § 2095).

[9] Id.

[10] Id. at 471 [emphasis added] (citing 42 U.S.C. § 2021(k).

[11] Id. at 465.

[12] Virginia Uranium, Inc. v. Warren, et al., 848 F.3d 590, 593, Nuclear Reg. Rep. P. 20.779 (4th Cir. 2017)(Warren II).

[13] Id. at 593 (citing 1981 Va. Acts 1404).

[14] Id. (citing Va. Code Ann. §45.1-283).

[15] Id.

[16] Warren I, at 476.

[17] Id. at 465.

[18] Id.

[19] Id. at 465-66.

[20] Id. at 471 [emphasis added] (citing 42 U.S.C. § 2021(k).

[21] Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S. Ct. 2608, 2617 (1992).

[22] Id.

[23] Warren I, at 477.

[24] Id.

[25] Id.

[26] Id.

[27] Warren II, 848 F.3d at 594.

[28] Id. at 597.

[29] Id. at 599.

[30] Id. at 597 (quoting Pacific Gas, 461 U.S. at 216).

[31] Brief of Petitioner, at *26, Virginia Uranium, Inc. v. Warren, et al., No. 16-1275, 2018 WL 3546327 (July 19, 2018).

[32] Brief of Petitioner, at *3, Virginia Uranium, Inc. v. Warren, et al., No. 16-1275, 2018 WL 3546327 (July 19, 2018)(internal citations omitted); see also Warren II, 848 F.3d at 597.

[33] Brief of Respondent, at *18, Virginia Uranium, Inc. v. Warren, et al., No. 16-1275, 2018 WL 4105540 (August 27, 2018)(italics emphasis included in original text).

[34] Id. at *16.

[35] Oral Argument, at *8, *12, Virginia Uranium, Inc. v. Warren, et al., No. 16-1275, 2018 WL 5792148 (November 5, 2018).

[36] Id. at *33, 39.

[37] Virginia Uranium, Inc., et al. v. Warren et al., No. 16-1275, slip op., 587 U.S. __, *4-5 (U.S. June 17, 2019)(quoting 42 U.S.C. § 2092)(“Warren III”); see also 42 U.S.C. §§2092, 2097.

[38] Warren III, No. 16-1275 at *5-6 (“Indeed, if anything subsection (k) might be described as a non-preemption clause.”).

[39] Id. at *9.

[40] Id. at *11.

[41] Id. at *14 [bold emphasis added] (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).

[42] Id. at *16.

[43] Id.

[44] Id. at *17.

[45] Id. at *7 (Ginsburg, J., concurring).

[46] Id. at *13.

[47] Id. at *1 (Roberts, C.J., dissenting).

[48] Brief of States, at 21, No. 16-1275, 2018 WL 4348235, *21 (September 4, 2018)(citing 42 U.S.C. § 6901-6992(k); § 6926(b)(authorizing states to carry out a state program in lieu of the federal hazardous waste management program outlined under RCRA in order to issue and enforce permits for the storage, treatment, or disposal of hazardous waste).

[49] Id. at *22 (citing 40 C.F.R. § 270.32(b)(2); 40 C.F.R. § 264.111).

[50] Id. (citing Environmental Protection Agency Notice: State Authorization to Regulate the Hazardous Components of Radioactive mixed Wastes Under the Resource Conservation and Recovery Act, 51 Fed. Reg. 24, 504 (July 3, 1986)(“The EPA is today publishing a notice that in order to obtain and maintain authorization to administer and enforce a hazardous waste program pursuant to RCRA, States must have authority to regulate the hazardous components of “radioactive mixed waste” [… which …] are wastes that contain hazardous wastes subject to RCRA and radioactive wastes subject to the AEA”)(other internal citations omitted)).

[51] Id. (quoting United States v. Kentucky, 252 F.3d 816, 823 (6th Cir. 2001); also citing United States v. Manning, 527 F.3d 828, 833 (9th Cir. 2008)).

[52] Id. at 23-24.

[53] Id. at 24-25.

 

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