Entergy Arkansas, Inc. v. Nebraska

• Citation: 46 F.Supp.2d 977
• Decision Date: 16 April 1999
• Docket Number: No. 4:98CV3411.,4:98CV3411.
• Court: U.S. District Court — District of Nebraska
• Parties: ENTERGY ARKANSAS, INC., an Arkansas corporation; Entergy Gulf States, Inc., a Texas corporation; Entergy Louisiana, Inc., a Louisiana corporation; Wolf Creek Nuclear Operating Corporation, a Delaware corporation; Omaha Public Power District, a public corporation and political subdivision of the State of Nebraska, Plaintiffs, Central Interstate Low-Level Radioactive Waste Commission, Realigned Plaintiff, US Ecology, Inc., a California corporation, Intervenor-Plaintiff, v. STATE OF NEBRASKA; Nebraska Department of Environmental Quality; Randolph Wood, individually and in his official capacity; Jay Ringenberg, individually and in his official capacity; Nebraska Department of Health and Human Services Regulation & Licensure; David P. Schor, individually and in his official capacity; Cheryl Rogers, individually and in her official capacity; and John Doe, Jane Doe and Doe Companies 1 through 20, individually and in their official capacities, Defendants.

Page 977

46 F.Supp.2d 977

ENTERGY ARKANSAS, INC., an Arkansas corporation; Entergy Gulf States, Inc., a Texas corporation; Entergy Louisiana, Inc., a Louisiana corporation; Wolf Creek Nuclear Operating Corporation, a Delaware corporation; Omaha Public Power District, a public corporation and political subdivision of the State of Nebraska, Plaintiffs, Central Interstate Low-Level Radioactive Waste Commission, Realigned Plaintiff, US Ecology, Inc., a California corporation, Intervenor-Plaintiff, v. STATE OF NEBRASKA; Nebraska Department of Environmental Quality; Randolph Wood, individually and in his official capacity; Jay Ringenberg, individually and in his official capacity; Nebraska Department of Health and Human Services Regulation & Licensure; David P. Schor, individually and in his official capacity; Cheryl Rogers, individually and in her official capacity; and John Doe, Jane Doe and Doe Companies 1 through 20, individually and in their official capacities, Defendants.

No. 4:98CV3411.

United States District Court, D. Nebraska.

April 16, 1999.

John P. Heil, Thomas E. Johnson, Patrick J. Ickes, Baird, Holm Law Firm, Omaha, NE, Stephen M. Bruckner, Joseph E. Jones, Fraser, Stryker Law Firm, Omaha, NE, for plaintiffs.

Alan E. Peterson, Shawn D. Renner, Cline, Williams Law Firm, Lincoln, NE, for realigned plaintiffs.

Steven G. Seglin, Rocky C. Weber, Crosby, Guenzel Law Firm, Lincoln, NE, Leonard B. Levine, Los Angeles, CA, Rene M. Devlin, Laurence H. Levine, Latham, Watkins Law Firm, Chicago, IL, for intervenor-plaintiffs.

Linda L. Willard, Attorney General's Office, Lincoln, NE, Annette M. Kovar, Nebraska Dept. Of Environmental, Quality, Lincoln, NE, John L. Wittenborn, William Bradford Reynolds, Collier, Shannon Law Firm, Washington, DC, for defendants.

Memorandum and Order

KOPF, District Judge.

The defendants took eight years to say "no" to an application to construct a low-level radioactive waste disposal site. In the process, they required the plaintiffs to spend more than $74 million. A large portion of that huge sum went directly to Nebraska. There is good reason to think that the license denial was politically preordained.

In what may be the ultimate expression of "chutzpah," the defendants want millions more from the plaintiffs to defend this lawsuit. They also seek to force some of the plaintiffs to participate in and fund an administrative hearing. The defendants make this demand though those plaintiffs, as the parties entitled to the review, do not wish to go on with or pay for that hearing. The plaintiffs assert that I should maintain the status quo until deciding the fundamental question of whether Nebraska has violated its federal obligation under an interstate compact to exercise good faith when dealing with the waste disposal application.

Agreeing with the plaintiffs, I now issue a preliminary injunction against the defendants. In short, the defendants will have to pay for their own defense, and the administrative hearing will be stayed, until the much broader and more fundamental question of good faith can be answered.

I. Background

This case is not about the parochial interests of the State of Nebraska or its politicians. On the contrary, this matter presents serious questions regarding the supremacy of federal law and the national problem of low-level radioactive waste. In particular, and in addition to the legitimate concerns of Nebraska, the vital interests of at least four other states are at stake. As one reads on, this point should be remembered.

Pursuant to the United States Constitution,¹ and with the consent of Congress,² the States of Nebraska, Louisiana, Arkansas Oklahoma, and Kansas signed the Central Interstate Low-Level Radioactive Waste Compact ("Compact") to deal with low-level radioactive waste disposal concerns.³ In so doing, Nebraska, which was chosen to be the host for the disposal site, agreed that "[e]ach party state has the right to rely on the good faith performance of each other party state." Compact, Art. III(f).

A. The Parties and the Claims

Three categories of plaintiffs sue. The first category is the Central Interstate Low-Level Radioactive Waste Commission ("Commission"). The Commission, consisting of representatives from each state, was formed pursuant to the Compact. Compact, Art. IV. The Commission is charged with the responsibility of enforcing the terms of the Compact. It has the right to sue in federal court. Compact, Art. IV(e). More importantly, the Commission "shall ... [r]equire all party states and other persons to perform their duties and obligations arising under this compact by an appropriate action" in court. Compact, Art. IV(m)(8). The second category is U.S. Ecology, Inc. (USE). Pursuant to Art. V of the Compact, the Commission hired USE to select, develop, and operate the disposal site. The third category is generators of waste who want to use the proposed disposal site. They have paid much of the money to finance the application process. They include companies that operate nuclear plants producing electricity.

The defendants include the State of Nebraska, the state agencies that denied the application, the former directors of the state agencies that denied the application, and various other officials with those state agencies. The individual defendants are sued in their official and individual capacities.⁴

All the plaintiffs claim that Nebraska wrongly denied an application to construct a waste disposal site. The plaintiffs request damages, declaratory, and equitable relief. Among other things, the Commission seeks: (1) damages; (2) an accounting; (3) a declaration that Nebraska has violated the Compact, especially the "good faith" provision; (4) removal of Nebraska from the licensing process; and (5) the appointment of an impartial third party to complete the licensing process.

The Commission also joins with USE and the other plaintiffs in seeking a preliminary injunction prohibiting Nebraska from requiring them to pay Nebraska for defense of this suit. Like the other plaintiffs, the Commission also seeks to stop Nebraska from conducting an administrative hearing about the license denial and from billing the plaintiffs for related fees and costs.

B. The Facts

Before stating the facts, three things must be kept in mind. First, the underlying facts are voluminous and complex. Second, we are at the very early stages of this litigation.⁵ Third, a 13-hour evidentiary hearing on a motion for preliminary injunction is no substitute for a trial. With these caveats in mind, the facts pertinent to the question of injunctive relief appear as follows.

The Beginning—1983 through 1988

In 1983, the Nebraska Legislature passed LB 200, which authorized Nebraska to enter into the Compact with the states of Arkansas, Louisiana, Oklahoma and Kansas. Generators of low-level nuclear waste have supported the Compact as the most cost-effective method for the development of a safe, reliable disposal facility for waste within the Compact region.

In December 1987, the Commission selected the State of Nebraska as the host state for the low-level radioactive waste disposal facility. Shortly before this selection, Nebraska Governor Kay Orr had publicly announced ten conditions for Nebraska's selection as a host state. These conditions, which became part of Nebraska law, included a requirement that "the cost of disposal of low-level radioactive waste be borne by the generators of such waste." Neb.Rev.Stat. § 81-1579(2) (Reissue 1994).

Governor Orr made it clear that, while not thrilled with being the site of the facility, Nebraska would honor its commitment under the Compact. On December 24, 1987, she stated: "Although Nebraska's Commissioner voted against [locating the facility in Nebraska], the State of Nebraska recognizes its responsibility as a member of the Compact and accepts such designation as host state." (Ex. 254 at G.)

On January 29, 1988, the Commission entered into an agreement with USE, under which USE was to select a disposal site, submit a license application, and proceed with the development, construction, and operation of a facility in the State of Nebraska for the disposal of waste generated within the party states of the Compact. There have been five (5) amendments to the agreement between the Commission and USE.

1988 Cost Estimates & Funding Provisions

The initial estimate in the 1988 USE agreement of the cost for the completion of the prelicensing phase of the disposal facility was $13,650,000. The USE agreement authorized the Commission to establish a "Facility Review Committee" to regularly assess the feasibility of the disposal facility, reasonableness of schedules and costs, and other matters relating to the proposed disposal facility.

The USE agreement required the Commission to reimburse USE for costs necessarily incurred in the prelicensing phase of the disposal facility project, including license review and other regulatory costs charged to USE by the State of Nebraska. The Commission lacked the funds necessary to reimburse USE as required in the USE agreement. Therefore, on January 29, 1988, the Commission entered into an agreement with the waste generators to provide up to $10.1 million in the form of prepayments for future disposal services ("prepayments") so that the Commission could meet its pre-licensing financing commitments to USE. This agreement, as subsequently revised and amended, is referred to as the "Funding Agreement." Prepayments provided under the Funding Agreement were used by the Commission to meet its prelicensing payment commitments to USE under the USE agreement and to reimburse license review costs of the State of Nebraska and its contractors and consultants.

Costs Spiral Upward

In July 1990, the generators and the Commission entered into a revised agreement to provide additional prepayments for prelicensing costs of up to $25.5 million (which included the previously provided $10.1...