A panel of federal appeals judges this week appeared split about whether the law allows the Department of Energy to pay South Carolina $200 million for warehousing tons of plutonium at the Savannah River Site since 2016.
The Energy Department does not deny that it would be on the hook for those fines — written into federal law in 2005 as “economic assistance payments” to the state — if Congress had specifically appropriated money to pay them. To date, that has not happened, according to the agency.
South Carolina says Congress has already provided the Energy Department with both permission and the money to pay the fines – via the Material Disposition budget line under DOE’s semiautonomous National Nuclear Security Administration’s (NNSA), which broadly funds efforts to remove plutonium from the state beginning late this decade.
“[W]hat South Carolina is asking the court to do is to wade into whether assistance payments further the nation’s nonproliferation strategy,” Tara Hogan, assistant director for the Justice Department’s Civil Division, argued Tuesday in the Court of Appeals for the Federal Circuit.
“No they’re not,” interrupted Judge Pauline Newman, the Reagan appointee who oversaw the three-judge panel hearing the parties’ oral arguments. “They’re just saying they had a deal, they have legislation and that they’re entitled to … have that statutory obligation fulfilled. That isn’t very different from many suits against the government in the Court of Federal Claims.”
The “fundamental question” in the case, Newman said, is exactly what the economic assistance payments are, and what they are not. The judges on Tuesday tested both Hogan’s argument that they were not storage fees, and South Carolina counsel John Roberts’ argument that they effectively were.
The lawsuit argued Wednesday is one of several the state has filed since 2016, some of which were split apart or combined, asking the courts to force DOE remove plutonium from the state, and pay fines for not doing so by the cuoff date of Jan. 1, 2016. The state maintains now, as it did then, that the economic assistance payments were intended to spur DOE into completing its disposal plan on time.
As for the fines, the trial Court of Federal Claims agreed with the federal governent’s argument last year, precipitating the appeal South Carolina pressed Tuesday in telephonic oral arguments. The higher court released a recording of the arguments on Wednesday, even as DOE and South Carolina continue to try to settle the case out of court.
Hogan said the economic assistance payments “simply were not” storage costs, as Roberts argued.
Then “what were they?” asked Judge Evan Wallach, a Barack Obama appointee on the panel.
A “political compromise,” Hogan said, that persuaded South Carolina to allow shipments of weapon-usable plutonium through the state in the early 2000s as part of the NNSA’s since-abandoned plan to turn the material into commercial nuclear reactor fuel at the Savannah River Site’s since-terminated Mixed Oxide Fuel Fabrication Facility. That program was supposed to start around 2016. Its replacement, the Surplus Plutonium Disposition Program, won’t be online until 2028, according to the NNSA.
Judge Timothy Dyk, a Bill Clinton appointee, asked Hogan to explain whether the NNSA’s Material Disposition budget covers economic assistance payments, and whether there was any formal definition of what the Material Disposition account was for.
Of the three judges, Dyk appeared to most closely follow the federal government’s argument that appropriations language is generally restrictive, and that DOE nonproliferation appropriations language is more restrictive still. The aim, Dyk said, is to limit the government’s liability.
Hogan said there was “no evidence” in any bill that Congress intended the Materials Disposition account to fund South Carolina’s economic assistance payments, that DOE’s description of Material Disposition in federal budget requests did not mention the payments, and that Congress did not in any event appropriate enough funding in that account for 2016 and 2017 to cover the $100 million in payments South Carolina seeks for each of those years.
Roberts hit back at all of that, in his closing rebuttal.
“There were more than enough each year … in that Material Disposition program, if you count carryovers,” Roberts said. He said the NNSA had $170 million in Material Disposition funds in 2016, and almost $155 million in the account for 2017, including carryover — unspent appropriations from an earlier year.
Roberts also said that the only available definition of the Material Disposition account, something the judges were fishing for Tuesday, came from the agency itself.
“That’s true,” Dyk said. “But that doesn’t mean that it’s not informative.”
Roberts agreed, but countered that “Congress made the assistance payments an authorized function of the disposition program. It’s evident from the title of the statute, the purposes, and the plain language.”
The court might take as long as six months to issue its ruling, according to its website.
None of the judges intimated in open court how they might decide, but Newman wondered aloud whether DOE was moving the goalposts on South Carolina.
[W]e now see what looks like a total disclaimer of a legislated obligation that at the time, I think, was considered to be quite significant,” she said. “[A]nd for the state to be told ‘we don’t owe you anything, go away,’ doesn’t seem to fit with any of the pattern of the public or private intent or understanding when this was begun,” Newman said.
