City of West Chicago v. Nuclear Regulatory Commission

United States Court of Appeals for the Seventh Circuit · Administrative Law

Administrative LawAtomic Energy ActNEPAAgency ProcedureJudicial ReviewRipenessExhaustioninformal adjudication

Facts

Kerr-McGee had operated a thorium milling facility in West Chicago and, after the plant closed, contaminated waste remained on site. While the NRC was still studying Kerr-McGee's broader decommissioning plan and preparing a draft EIS for that overall plan, Kerr-McGee sought Amendment No. 3 to demolish additional buildings and temporarily store contaminated soil returned from offsite locations. After the district court required notice to the City, the City submitted written objections and requested a formal hearing, but the NRC denied a trial-type hearing, considered the written submissions, and issued the amendment. The City argued the NRC violated its regulations, the AEA, due process, and NEPA, and that the amendment was unsupported and improperly segmented from the broader decommissioning plan.

Issue

Whether the NRC was required to provide a formal, trial-type hearing before issuing a materials license amendment under AEA § 189(a), and whether the NRC acted unlawfully or arbitrarily in issuing Amendment No. 3 without an EIS. Also, whether the district court had jurisdiction to review the City's related claims or properly dismissed them.

Rule

For an NRC materials license amendment, AEA § 189(a) requires a hearing upon request, but not necessarily a formal APA on-the-record hearing unless Congress clearly indicated that intent. Where no on-the-record hearing is statutorily required, the agency may proceed through informal adjudication so long as due process is satisfied, and judicial review is under the arbitrary-and-capricious standard rather than substantial evidence. Under NEPA, the agency may decline to prepare an EIS for a component action if it reasonably determines, on an adequate record and after taking the requisite hard look, that the action is not a major federal action significantly affecting the environment. Final NRC licensing orders are reviewable exclusively in the court of appeals, and challenges to agency delay may require exhaustion of available administrative remedies before judicial intervention.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Cleveland, a federal nuclear regulator considers an amendment to Ridgeview Minerals LLC's source-material license allowing temporary relocation of contaminated drums within the same site. A neighborhood association requests a hearing, but the governing statute says only that the agency must grant a hearing on request and does not say the matter must be decided "on the record." The agency allows written submissions but denies cross-examination and live testimony.

If the association petitions for review, which argument is strongest under the majority rule?

Explanation. The majority held that a statutory requirement of a hearing does not itself trigger formal APA adjudication. Formal procedures under APA §§ 556-557 apply only when Congress clearly indicated an on-the-record hearing requirement. Because the statute here requires a hearing on request but contains no clear indication of formal, on-the-record process, the agency may proceed by informal adjudication so long as due process is satisfied.