The D.C. Circuit Court of Appeals has ruled that the Nuclear Regulatory Commission (NRC) cannot transfer authority over nuclear materials to New Jersey state regulators. Shieldalloy Metallurgical Corp. v. NRC, No. 09-1268 (D.C. Cir. 11/9/10). Under the Atomic Energy Act of 1954, as amended, NRC is authorized to transfer regulatory authority over various categories of nuclear materials within a state to the state government, provided that the state’s regulatory program is “compatible with the [NRC’s] program” and is “adequate to protect the public health and safety.” 42 U.S.C. § 2021(d)(2).

Petitioner, a manufacturer of metal alloys, whose process generated radioactive by-products in the form of slag and baghouse dust, held these materials on site under an NRC license. In the 1990s, petitioner took steps to decommission the facility and, over the next 14 years, negotiated with NRC a decommissioning plan, which the agency commented on but never approved. Instead, NRC forwarded the draft decommissioning plan to New Jersey and, in 2008, published a notice in the Federal Register proposing to transfer authority over the plan to New Jersey regulators. The transfer took effect September 2009, and less than two weeks later New Jersey notified petitioner that its plan did not meet the state’s remediation requirements. The company then filed a petition for review in the appellate court challenging NRC’s transfer.

The appellate court noted that petitioner and NRC had been discussing on-site disposal of radioactive waste for nearly 15 years and the company had submitted four plans to NRC since 2002. The court found NRC’s responses to the company’s plans and arguments “inappropriate and woefully incomplete.” Ruling that NRC had not followed its own policies and guidance on transfers of authority to states, the court found NRC’s actions “arbitrary and capricious” and vacated the transfer of authority to New Jersey.