The Atomic Energy Act Preempts Vermont’s Efforts To Close Vermont Yankee: Sometimes, Legislative Intent Is Just Too Clear To Ignore

Last week, in Entergy v. Shumlin, the 2nd Circuit Court of Appeals largely struck down Vermont’s efforts to close Vermont Yankee.  Although three separate Vermont statutes were at issue, and Entergy made both preemption and dormant Commerce Clause arguments, the essence of the case was simply that Vermont sought to require explicit legislative approval for Vermont Yankee’s continued operation.  Dismissing various proffered rationales for Vermont’s scheme, the Court concluded that the legislation was a poorly veiled attempt to end nuclear power generation in Vermont in response to public concerns about reactor safety and environmental issues.

At some level, the impact of the decision is probably limited to cases involving nuclear power, because the controlling Supreme Court decision, Pacific Gas & Electric v. State Energy Resources Conservation & Development Commission, so emphasized the sui generis nature of nuclear power development and regulation in the United States.  Nonetheless, the Supreme Court’s preemption discussion in Pacific Gas & Electric is worth careful analysis.  Pacific Gas & Electric makes clear that, while the Atomic Energy Act preempts state regulation of the “safety aspects of nuclear development,” it does not preempt all regulation of nuclear power.  In fact, the Supreme Court held that, because states have authority to determine whether nuclear power projects are economically justified, a California statute imposing a moratorium on nuclear development until the state found that a long-term solution to handling of spent nuclear fuel existed was also justified.  The Court concluded that the statute was “concerned not with the adequacy of the method [of spent nuclear fuel storage], but rather its existence.”

Vermont tried to hew to that line, and justified the effective closure of Vermont Yankee on factors that would seem to pass muster under Pacific Gas & Electric.  However, the paper trail was too long.  The Court noted that:

We do not blindly accept the articulated purpose of [a state statute] for preemption purposes. If that were the rule, legislatures could “nullify nearly all unwanted federal legislation by simply publishing a legislative committee report articulating some state interest or policy – other than frustration of the federal objective – that would be tangentially furthered by the proposed state law.

The Court then reviewed the legislative history and agreed with the District Court that:

the legislative record contained “references, almost too numerous to count, [that] reveal legislators’ radiological safety motivations and reflect their wish to empower the legislature to address their constituents’ fear of radiological risk, and [the legislators’] beliefs that the plant was too unsafe to operate, in deciding a petition for continued operation.

To the extent that there is a broader lesson in Entergy, it is precisely that a Court  will look to the “motivation behind the state law” in determining whether the statute regulates in a preempted area.  State legislatures have been warned.

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