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Public Watchdogs v. Southern California Edison Co.

United States District Court, S.D. California

December 3, 2019

PUBLIC WATCHDOGS, a California 501c3 corporation, Plaintiff,
v.
SOUTHERN CALIFORNIA EDISON COMPANY; SAN DIEGO GAS & ELECTRIC COMPANY; SEMPRA ENERGY; HOLTEC INTERNATIONAL; UNITED STATES NUCLEAR REGULATORY COMMISSION; and DOES 1 through 100, Defendants.

          ORDER (1) GRANTING DEFENDANTS' MOTIONS TO DISMISS, (2) DISMISSING PLAINTIFF'S FIRST AMENDED COMPLAINT WITH PREJUDICE, AND (3) DENYING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION (ECF Nos. 2, 5, 41, 42, 47)

          Hon. Janis L. Sammartino United States District Judge

         Presently before the Court are Plaintiff Public Watchdogs' Amended Motion for Preliminary Injunction and Temporary Restraining Order (“Mot. for Prelim. Inj., ” ECF No. 5) and the Motions to Dismiss filed by Defendants Holtec International, Inc. (“Holtec”) (“Holtec MTD, ” ECF No. 41); Southern California Edison Company (“SCE”), San Diego Gas & Electric Company (“SDG&E”), and Sempra Energy (“Sempra”) (together, the “Utility Defendants”; with Holtec, the “Private Defendants”) (“Utility MTD, ” ECF No. 42); and the United States Nuclear Regulatory Commission (“NRC”) (“NRC MTD, ” ECF No. 47). The Court heard oral argument on November 25, 2019. See ECF Nos. 58, 59. Having considered the Parties' arguments and the law, the Court GRANTS Defendants' Motions to Dismiss, DISMISSES WITH PREJUDICE Plaintiff's First Amended Complaint, and DENIES Plaintiff's Motion for Preliminary Injunction, as follows.

         BACKGROUND[1]

         I. Plaintiff's Allegations

         Plaintiff “is a 501(c)(3) non-profit corporation that advocates for public safety by ensuring that government agencies and special interests comply with all applicable laws, including public-safety and environmental protection laws, especially in the public-utilities industry.” FAC ¶ 4. “Plaintiff has at least one member who lives within the zone of exposure to a catastrophic release of radioactive material from SONGS.” Id.

         SCE and SDG&E are public utilities doing business in California. Id. ¶¶ 5-6. Sempra is the parent company of SDG&E. Id. ¶ 7.

         In August 1963, Congress enacted Public Law 88-82, which authorized the “construct[ion], operate[ion], maintain[enance], and use” of a nuclear power plant on the Camp Pendleton military base. Id. ¶ 18. The Utility Defendants operated three nuclear electric generating units in that area-which is located within a tsunami inundation zone and between two active fault lines, see Id. ¶¶ 1, 48-at the San Onofre Nuclear Generating Station (“SONGS”). Id. ¶ 19. SCE owned 78.2% of SONGS, id. ¶ 5, while SDG&E owned approximately 20% of SONGS. Id. ¶ 6. The first nuclear generating unit at SONGS operated between 1968 and 1992, while the second and third units operated from 1983 and 1984, respectively, until June 12, 2013, when they were shut down. Id.

         Plaintiff alleges that, throughout this time, “SONGS has had numerous instances of poor safety and regulatory compliance.” Id. ¶ 20; see also Id. ¶¶ 21-28. These led to the announcement on June 7, 2013, that SONGS would be permanently shut down. Id. ¶ 29. The Utility Defendants permanently ceased operation of SONGS Units 2 and 3 on June 12, 2013. Id. ¶ 41. Plaintiff contends, however, that issues of mismanagement have continued to plague the decommissioning process, which has led to “a continuing liability and an ever-present existential threat.” See Id. ¶ 30.

         For example, the NRC-which is “federal government agency that is mandated by Congress to license and regulate the Nation's civilian use of radioactive materials to protect public health and safety, promote the common defense and security, and protect the environment, ” id. ¶ 10-“has repeatedly failed to exercise any meaningful oversight of SONGS and has abdicated its role to regulate [the Private Defendants].” Id. ¶ 32. The NRC has declined to perform an independent seismic hazard assessment of SONGS, see Id. ¶ 33, and has frequently allowed the Utility Defendants to violate NRC rules and regulations. See Id. ¶¶ 34-36. The NRC also has granted several exemptions to the Utility Defendants from the emergency response regulations, see Id. ¶¶ 37-38, and allowed the Utility Defendants to use the $4.7 billion decommissioning trust fund for purposes other than decommissioning activities. See Id. ¶ 39. Finally, the NRC granted the Utility Defendants a license amendment on July 17, 2015 (the “July 2015 License Amendment”), which permitted them to decommission the SONGS facility. See Id. ¶ 43. In granting the July 2015 License Amendment, however, the NRC “relied on the [Utility] Defendants' own analysis instead of objective criteria or independent analysis.” Id.

         Although the Utility Defendants previously had stored spent nuclear fuel (“SNF”) at SONGS in wet storage pools, see Id. ¶ 45, the Utility Defendants' decommissioning plan allows for the burial of SNF in an onsite containment system called an Independent Spent Fuel Storage Installation (“ISFSI”). Id. ¶ 48. The ISFSI is located in a tsunami inundation zone located between two seismic fault lines and only 108 feet from the Pacific Ocean. See Id. ¶ 48. Consequently, the ISFSI “is only about 18 feet above the Pacific Ocean's median high tide, ” and “[t]he bottom of the structure is a mere three feet above the underground water table.” Id. ¶ 49. Accordingly, “[c]limate-change experts predict that the bottom of each silo located in the ISFSI will be inundated with salt water as early as 2035.” Id. ¶ 51.

         Designed by Holtec, id. ¶ 52, and guaranteed only for ten years, id. ¶ 55, the ISFSI calls for the burial of 73 canisters filled with 3.6 million pounds of SNF, see Id. ¶¶ 49, 54, approximately 20 feet underground. See Id. ¶ 48. Like the ISFSI itself, the canisters were designed and manufactured by Holtec, id. ¶ 54, who warrants them only for 25 years. See Id. ¶ 55. In contrast to the thick-walled dry casks used by many international nuclear decommissioning projects, see Id. ¶ 57, Holtec's “thin-wall” canisters have “only a 5/8-inch thick stainless[-]steel wall with an aluminum egg-crate structure designed to hold up to 37 spent fuel assemblies.” Id. ¶ 56. Holtec made design changes to its canisters without the authorization of the NRC, which rendered four canisters already loaded into the ISFSI at SONGS potentially defective. See Id. ¶¶ 60-62. The NRC declined to impose a civil fine for the failure to seek pre-authorization of the change in the design of the Holtec canisters. See Id. ¶ 62. Independent risk assessments of the decommissioning plan and the Holtec canisters, if performed, have not been made publicly available. See Id. ¶¶ 50, 52, 58.

         Despite the lack of independent analyses and NRC oversight, the Utility Defendants began burying the canisters at the SONGS ISFSI on January 31, 2018. See Id. ¶ 53. Workers discovered a defective Holtec canister on March 5, 2018, see Id. ¶ 63, and the Utility Defendants admitted that four potentially defective canisters had already been filled and buried at a Community Engagement Panel Meeting on March 22, 2018. See Id. ¶ 64. Because “Defendants have consistently used [fewer] personnel than necessary to ensure that the Holtec canisters are safely and effectively loaded into the ISFSI, ” id. ¶ 66, they have “negligently gouged and then buried twenty-nine (29) fully loaded canisters at SONGS.” Id. ¶ 67. “[T]his gouging may lead to deeper, through-the-wall cracks, ” which may “be exacerbated, inter alia, by the presence of salt air, fog, rain, and salt water-the precise weather conditions that the canisters will be exposed to at the current location just steps from the Pacific Ocean.” Id. Further, “many (if not all) of the canisters were negligently scratched during transportation to the ISFSI.” Id. ¶ 68.

         On July 22, 2018, the Utility Defendants “nearly dropped a 49-ton canister full of deadly radioactive nuclear waste more than 18 feed into the ISFSI when it was caught on a quarter inch thick steel guide ring.” Id. ¶ 69. They failed to report the incident to the NRC. See Id. ¶¶ 70-71. On August 3, 2018, the Utility Defendants “once again lost control of a 49-ton canister full of deadly radioactive nuclear waste while it was being lowered into a below-ground storage silo, ” id. ¶ 72, which resulted in a work stoppage. See Id. ¶ 74. The Utility Defendants informally informed the NRC on August 6, 2018, see Id. ¶ 76, and a whistleblower reported the event at a Community Engagement Panel Meeting on August 9, 2018. See Id. ¶ 73. As a result of the August 3, 2018 incident, “[o]n March 25, 2019, the NRC issued a ‘Notice of Violation' and ‘NRC Special Inspection Report' to Edison for two safety violations.” Id. ¶ 91. The first violation concerned “a failure to make certain that safety equipment was operating, ” while the second was for “failure to report the safety incident to the NRC.” Id. “[T]he NRC issued an Inspection Charter for SONGS, which found five violations that were ultimately penalized [by] the imposition of a . . . fee of $116, 000 on [SCE].” Id. ¶ 79; see also Id. ¶ 91.

         “On August 24, 2018, the NRC issued an Inspection Report to the [Utility] Defendants, ” in which “the NRC determined that [SCE] had committed a Severity IV violation of the NRC's safety requirements between June 2017 and June 2018.” Id. ¶ 85. “The violation related to the design control of field changes made to the safety equipment the [Utility] Defendants used to loan SNF into storage canisters.” Id.

         “On November 29, 2018, the NRC issued an Inspection Report to Holtec, ” in which the NRC “informed Holtec that it was being considered for ‘Escalated Enforcement Action' for two apparent violations” related to the change in the design of the spent fuel storage casks. See Id. ¶ 87. Plaintiff believes that the first violation relates to Holtec's “failure to establish adequate design control measures, ” which resulted in the defect that may have rendered the first four canisters deployed at SONGS unsafe. See Id. ¶ 88.

         Plaintiff believes that the second violation relates to Holtec's failure to provide the NRC with prior authorization of its design changes. See Id. ¶ 89.

         On July 15, 2019, after voluntarily suspending the transfer of SNF following the August 3, 2018 incident, the Utility “Defendants notified the public that Defendant Holtec was again moving SNF from wet storage to canisters[] and burying canisters near San Onofre beach.” Id. ¶ 93. Additional canisters have continued to be buried during the pendency of this action. See Id. ¶¶ 95-97.

         II. Procedural Background

         On November 15, 2017, Plaintiff filed an action for declaratory and injunctive relief against the United States; the United States Department of Defense; James Mattis, Secretary of Defense; the United States Department of the Navy; Richard V. Spencer, Secretary of the Navy; SCE; and SDG&E, alleging a single cause of action for violation of Public Law 88-82. See generally Complaint, Pub. Watchdogs v. United States (“Pub. Watchdogs I”), No. 17-CV-2323 JLS (MSB) (S.D. Cal. filed Nov. 25, 2017), ECF No. 1. On August 30, 2018, the Court dismissed Public Watchdogs I on the grounds that Plaintiff had failed to establish Article III standing because “Plaintiff ha[d] not shown that the alleged future harm or diminishment of the area [wa]s ‘certainly impending' or even that there [wa]s a ‘substantial risk' or ‘credible threat' that immediate harm w[ould] occur.” Order Granting Defendants' Motions to Dismiss at 7-8, Pub. Watchdogs I (filed Aug. 30, 2018), ECF No. 24; see also 2018 WL 4153302, at *4. Although Plaintiff filed an amended complaint, see Amended Complaint, Pub. Watchdogs I (filed Sept. 28, 2018), ECF No. 25, it voluntarily dismissed Public Watchdogs I on July 3, 2019. See Notice of Voluntary Dismissal Without Prejudice, Public Watchdogs I (filed July 3, 2019), ECF No. 50.

         On August 29, 2019, Plaintiff filed the instant action against SCE, SDG&E, Sempra, Holtec, and the NRC, alleging three causes of action: (1) violation of the Administrative Procedures Act, 5 U.S.C. §§ 702 et seq., against the NRC; (2) public nuisance in violation of California Civil Code §§ 3479-3480 against the Private Defendants; and (3) strict products liability against Holtec. See generally ECF No. 1. Plaintiff also filed a motion for preliminary injunction and temporary restraining order seeking to restrain Defendants from transferring further SNF into the Holtec canisters or storing additional spent nuclear fuel in the ISFSI at SONGS pending a full hearing on the decommissioning plan. See generally ECF No. 2. Plaintiff amended its motion the following day, see ECF No. 5, and the case was reassigned to this Court based on its relation to Public Watchdogs I. See ECF No. 16.

         In response to Defendants' notification of their intent to oppose Plaintiff's request for a temporary restraining order, see ECF Nos. 6, 17, the Court set a briefing schedule. See ECF No. 18. Soon thereafter, Defendants filed motions to dismiss that raised, among other concerns, the Court's lack of subject-matter jurisdiction. See ECF Nos. 19, 28, 29. These concerns were echoed in Defendants' oppositions to Plaintiff's motion for a preliminary injunction. See ECF Nos. 36, 37.

         Seemingly in response to Defendants' jurisdictional arguments, Plaintiff filed the operative First Amended Complaint, which added an additional cause of action for a public liability action pursuant to the Price-Anderson Act, 42 U.S.C. § 2210(n)(2). See generally ECF No. 38. The Court therefore denied as moot and without prejudice the pending motions to dismiss. See ECF No. 39. The instant Motions to Dismiss followed. See ECF Nos. 41, 42, 47.

         On October 21, 2019, shortly before filing its oppositions to Defendants' Motions to Dismiss, see ECF Nos. 51, 52, Plaintiff filed with the NRC a 10 C.F.R. § 2.206 Petition to Immediately Suspend Decommissioning Operations at San Onofre Nuclear Generating Station Unites 2 and 3. Pub. Watchdogs v. S. Cal. Edison Co., No. 19-72670 (N.R.C. filed Oct. 21, 2019), DE 1; see also ECF No. 54 Ex. 47. The same day, Plaintiff also filed an Emergency Petition for Writ of Mandamus with the United States Court of Appeals for the Ninth Circuit. Pub. Watchdogs v. U.S. Nuclear Regulatory Comm'n, No. 19-72670 (9th Cir. filed Oct. 21, 2019), DE 1; see also ECF No. 55 Ex. 48.

         DEFENDANTS' MOTIONS TO DISMISS

         I. Federal Rule of Civil Procedure 12(b)(1)

         A. Legal Standard

         Federal courts are courts of limited jurisdiction, and as such have an obligation to dismiss claims for which they lack subject-matter jurisdiction. Demarest v. United States, 718 F.2d 964, 965 (9th Cir. 1983). Because the issue of standing pertains to the subject matter jurisdiction of a federal court, motions raising lack of standing are properly brought under Federal Rule of Civil Procedure 12(b)(1). White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). “The party asserting jurisdiction bears the burden of establishing subject matter jurisdiction on a motion to dismiss for lack of subject matter jurisdiction.” In re Dynamic Random Access Memory (DRAM) Antitrust Litig., 546 F.3d 981, 984 (9th Cir. 2008) (citing Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Stock W., Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989)). “Dismissal for lack of subject matter jurisdiction is appropriate if the complaint, considered in its entirety, on its face fails to allege facts sufficient to establish subject matter jurisdiction.” Id. (citing Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 1990)).

         Rule 12(b)(1) motions may challenge jurisdiction facially or factually. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). A facial attack is one where “the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.” Id. In evaluating such a challenge, the court accepts the factual allegations in the complaint as true. See Miranda v. Reno, 238 F.3d 1156, 1157 n.1 (9th Cir. 2001). In contrast, where the defendant challenges the factual basis underlying the allegations, the court need not accept the allegations as true and may instead make factual determinations. White, 227 F.3d at 1242. “In ruling on a challenge to subject matter jurisdiction, the district court is ordinarily free to hear evidence regarding jurisdiction and to rule on that issue prior to trial, resolving factual disputes where necessary.” Augustine v. United States, 704 F.2d 1074, 1077 (9th Cir. 1983) (citing Thornhill Publ'g Co. v. Gen. Tel. Corp., 594 F.2d 730, 733 (9th Cir. 1979)). When making such a ruling, the district court may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment. Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003) (citing White, 227 F.3d at 1242).

         The decision whether to grant leave to amend rests in the discretion of the trial court. See Pink v. Modoc Indian Health Project, Inc., 157 F.3d 1185, 1189 (9th Cir. 1998) (citing DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 185-86 (9th Cir.1987)). Leave to amend is properly denied where leave would be futile, id. (citing DCD Programs, 833 F.3d at 185-86), such as where “the alleged facts, even if true, provide[] no basis for subject matter jurisdiction.” Id. (citing DVD Programs, 833 F.3d at 185-86).

         B. Analysis

         1. Plaintiff's Standing

         “[B]efore a federal court can consider the merits of a legal claim, the person seeking to invoke the jurisdiction of the court must establish the requisite standing to sue.” Whitmore v. Arkansas, 495 U.S. 149, 154 (1990). The Private Defendants challenge Plaintiff's standing to seek injunctive relief because “Plaintiff does not have Article III standing to bring any claim because it has not suffered an injury in fact.”[2] Holtec MTD at 21; see also Id. at 21-23; Utility MTD at 19-22. The NRC also disputes Plaintiff's standing to challenge “two exemptions concerning the use of the decommissioning trust fund and insurance requirements” on the grounds that Plaintiff has failed to allege any injury-in-fact or redressability. ECF No. 53 at 9-10.

         “Article III of the Constitution limits the jurisdiction of federal courts to ‘Cases' and ‘Controversies.' One component of the case-or-controversy requirement is standing, which requires a plaintiff to demonstrate the now-familiar elements of injury in fact, causation, and redressability.” Lance v. Coffman, 549 U.S. 437, 439 (2007) (per curiam) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 573-74 (1992)). To satisfy the requirements of “injury in fact, ” a plaintiff must show that she suffered “an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” Lujan, 504 U.S. at 560 (internal quotation marks and citations omitted).

         “[A]n association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Hunt v. Wash. State Apple Advert. Comm'n, 432 U.S. 333, 343 (1977). Claims for ...


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