NUCLEAR POWER:

Endgame close in legal tussles over Vermont Yankee

NEW YORK -- Attorneys representing Entergy Nuclear Operations Inc. and the state of Vermont had a busy week.

Lawyers squared off in two venues over the future of the company's Vermont Yankee Nuclear Power Station in Vernon, Vt. A three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan heard arguments Monday on Vermont's attempts to shut down the plant, then the Entergy attorneys were back at it later in the week in Vermont's Supreme Court.

The cases hinge on the reality that many in Vermont want to see the plant, which supplies about one-third of the state's electricity and ships the rest to nearby states, closed for good, as evidenced by a 2010 vote in the state Legislature to deny state permits in the wake of the Fukushima nuclear meltdown in Japan. But New Orleans-based Entergy is fighting tooth and nail to keep the plant running and won the first round of the federal legal fight last year when a judge said Vermont couldn't close the plant.

Entergy has been successful so far behind a squad of legal heavy hitters brought in to save the 1,900-megawatt facility, which was relicensed by federal regulators in 2011 through 2032. Most prominent on its star-studded team is Kathleen Sullivan of Quinn Emanuel Urquhart & Sullivan LLP, a former dean of Stanford Law School who in 2009 made President Obama's short list for Supreme Court nominees.

Sullivan, a constitutional expert, was brought in to fend off an appeal by the state in federal court that could determine how far a state is able to go to regulate a nuclear power plant within its borders. She is also working to kill a lawsuit at the state level that alleges the station is currently operating outside the law because its permit to store spent fuel on site expired last year.

According to several accounts by those at the court proceedings this week, Sullivan forcefully made the case for Entergy's continued operation on both fronts. Constitutional law expert Cheryl Hanna, a professor at Vermont Law School, called Sullivan a "legal superstar" who has so far outmanuevered Attorney General Bill Sorrell on the question of whether the state is attempting to close down Vermont Yankee for safety reasons.

Hanna says it was Sullivan who "outlawyered" Vermont at trial in a lower federal court run by Judge J. Garvan Murtha. Last January, Murtha agreed with Sullivan that the Vermont Legislature had tried to close Vermont Yankee on safety fears, rather than economic. And because the Nuclear Regulatory Commission has exclusive authority over radiological safety, he ordered the plant to keep running.

This week, Sullivan was at it again, but this time the state hired David Frederick, a Washington-based constitutional expert, to counter the high-profile Entergy team. Hanna and Sandy Levine, of the Conservation Law Foundation, said it worked, though it may have been too little, too late for the state.

"The clarity of the state's argument was much weaker at trial," Hanna said. "I was impressed by David Frederick. This was the first time since the case has been going on that the state was able to articulate a theory on why it acted the way it did not based on safety."

"With clarity and nimbleness, Vermont proved it was up to the task," Levine added in a blog post. "Its lawyer, Attorney David Frederick ... explained that Vermont has every right to determine Vermont Yankee's fate. And doing so does not impinge on the federal government's oversight of radiological issues."

Frederick, according to sources, insisted that Vermont lawmakers had acted to close the plant because they were worried about having to foot the bill for decommissioning, making it a financial matter. Frederick also claimed Murtha had overstepped his own authority, arguing that the Supreme Court has made it clear that states can decide for themselves whether a nuclear power plant is welcome within their borders.

Frederick's points were these: that the Supreme Court in 1983 let stand a California moratorium against nuclear power, meaning it had spoken on the question of state authority; that Vermont has the basic right that any landlord has of not renewing a tenant's lease; and that Vermont shouldn't have to go bankrupt to decommission the plant.

"Frederick had to clearly reframe that it's in the state's long-term economic interest to have Vermont Yankee shut down now," Hanna said. "I was impressed that the state was able to salvage an argument."

Still, Sullivan was able to counter that a simple reading of the Legislature's debates leading up to legislation meant to ax Vermont Yankee shows the lawmakers were acting out of safety fears. Hanna said Sullivan effectively reiterated the same points made in Murtha's court, but the issue of whether a judge can go back to legislative records to determine "motive" behind a law is very much in play as the case moves forward.

Frederick argued that judges are bound by precedent to read the letter of the law itself, not the intent as documented in legislative journals. Sullivan countered that the vote happened after a "cherry orchard" of statements indicating it was about safety.

Richard Watts, author of "Public Meltdown: The Story of the Vermont Yankee Nuclear Power Plant," was also in attendance in New York. He noted one legislator's line during the debate leading up to votes ("Let's find another word for safety") that is effectively the basis of Entergy's arguments for denying Vermont. That leads Hanna to believe the case is leaning toward Entergy.

"My own gut tells me Vermont might not win," said Hanna, who predicted the case will end up in the Supreme Court if Entergy fails at the 2nd District level but would probably terminate in Manhattan if Vermont loses a second straight decision.

"A federal court is going to be very hesitant to order Vermont Yankee shut based on what's before them," Hanna said.

Watts came away with the impression that the state had done well, though Sullivan was as strong as ever. To Watts, the judges in the panel primarily focused on the question of safety versus financial concerns, not on interstate commerce or the Constitution's dormant Commerce Clause.

"As an independent researcher, I felt the state did well," he said in an interview, adding that he was impressed by the level of interest in the crowd. "It was clear there was a lot at stake. A whole bunch of people were there."

In a later blog post, Watts explained that Entergy still feels there is a "cherry orchard" of evidence that the state was trying to regulate safety to shut down Vermont Yankee. Watts also believes Entergy got into this legal mess because of mismanagement at the plant, which the company bought in 2002 with promises that it would follow state law and achieve a "certificate of public good" to keep operating after state permits ended in March 2012.

"Along the way, the company lost all that public and policy-maker good will," he said. "And now the company is fighting on numerous fronts in Vermont."

A spokesman at Entergy said the federal case has become less about the facts at this point than "what are the proper legal standards and did Judge Murtha correctly apply them."

He also released this statement on the federal court proceedings: "We sincerely believe continued operation of Vermont Yankee would serve the public good in Vermont and the New England region. What we are seeking is for the judge to uphold Judge Murtha's decision in federal district court and to extend that judgment in a way that provides a clear path forward for the continued operation of the Vermont Yankee facility. We remain fully focused on safely operating our power plant today and into the future."

To Hanna, Entergy can probably bank on being able to run the plant. The appeals court has room to wiggle out and not make a broad ruling, she said.

"Sullivan ... made the extremely important point that the court could rule 'as applied' just on the narrow issues without having to make a broad ruling," Hanna wrote in a blog post. "She gave the court a modest way out, and one that might ultimately persuade the court when faced with a decision that could otherwise have wide-reaching implications."

State Supreme Court case

At the state Supreme Court, meanwhile, an environmental group called the New England Coalition on Nuclear Pollution argued this week that Vermont Yankee's ability to store spent fuel on site had ended when permits expired in March 2012. The group asked judges to shut down Vermont Yankee as a result.

But Sullivan went before the court to say Entergy had been permitted to act without its certificate of public good because it applied to renew the permit and the state had not yet acted on the request. She cited a state law that says any licensee submitting an application for the renewal of a license can pursue that activity under a current license until the given governmental body determines the outcome of that application.

Sullivan also argued that the state was seeing undue harm done on Vermont Yankee workers.

"Every day that the [state] tells Entergy that it's in violation of the board's order, that's a negative for the workers of the plant and the continued operation of the plant," she said, according to the news website Vermont Digger. "We think if you can clarify that we're not in violation of any board order ... that is a very material gain."

Attorneys on the other end, representing the New England Coalition, countered that the federal appeals process has confused matters at the state level, which had essentially paralyzed action at the Public Service Board. The PSB is responsible for issuing spent fuel permits.

"I don't think that the Public Service Board at this time would issue or could issue the order that we're asking for, in part, because there is still confusion about the U.S. District Court's injunction against the Public Service Board," a NEC attorney said, according to VT Digger.

Entergy dismissed the claims.

"Our basic point before the court is that the NEC complaint is groundless," the company said in a statement to Greenwire. "Vermont Yankee remains in service today consistent with the favorable federal district court decision and the timely filing with the PSB for a renewed certificate of public good. Our focus is, as always, on the safe operation of the plant."

The consensus appears to be that the state challenge will be thrown out. As for the federal appeals process, Hanna guessed that the 2nd District in Manhattan will side with Entergy.

"The state still bears the burden, and the facts and (in my opinion) the law still favor Entergy," she wrote in her blog. "If the state loses, it won't be because it was out-lawyered. It will be because, in the end, a federal court was reluctant to shutter a federally licensed nuclear power plant on the basis of this particular legislative history. That has as much as do with judicial conservatism as it does with nuclear power."