Nebraska's $160 Million Liability?-entergy Arkansas, Inc. v. Nebraska, 241 F.3d 979 (8th Cir. 2001)

• Publication year: 2021

80 Nebraska L. Rev. 574. Nebraska's $160 Million Liability?-Entergy Arkansas, Inc. v. Nebraska, 241 F.3d 979 (8th Cir. 2001)

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Note*

Thomas O. Kelley

Nebraska's $160 Million Liability?-Entergy Arkansas, Inc. v. Nebraska, 241 F.3d 979 (8th Cir. 2001)

TABLE OF CONTENTS

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . 575 R
II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . 578 R
A. License Application Review Process Begins . . . . . . . . 578 R
B. New Administration Takes Office . . . . . . . . . . . . . 579 R
C. Rejection of License and Ensuing Litigation . . . . . . . 581 R
D. Eighth Circuit Holding and its Significance . . . . . . . 582 R
E. Eleventh Amendment Jurisprudence . . . . . . . . . . . . . 584 R
F. Recognized Exceptions to Eleventh Amendment
Immunity . . . . . . . . . . . . . . . . . . . . . . . . . 586 R
G. Consent to Suit and the Waiver Doctrine . . . . . . . . . 588 R
H. Congress's Abrogation of State Immunity . . . . . . . . . 590 R
III. ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . 592 R
A. An Interstate Compact Is a "Creature of Federal
Law" . . . . . . . . . . . . . . . . . . . . . . . . . . . 594 R
B. The Eighth Circuit's Waiver Analysis in Regard to
the Compact . . . . . . . . . . . . . . . . . . . . . . . 595 R
C. Nebraska's Criticism of the Eighth Circuit
Decision. . . . . . . . . . . . . . . . . . . . . . . . . . 597 R
D. Eighth Circuit Waiver Analysis On Point . . . . . . . . . . 598 R
E. Entergy Arkansas, Inc. v. Nebraska in the Context
of the Federalism Renaissance . . . . . . . . . . . . . . . 605 R
F. Retroactivity and Money Damages . . . . . . . . . . . . . . 607 R
G. Repercussions of the Eighth Circuit's Decision . . . . . . 609 R
IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . 609 R

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I. INTRODUCTION

America generates millions of cubic feet of low-level radioactive waste each year.(fn1) The radioactive waste can be extremely dangerous to humans and must be isolated for long periods of time, often hundreds of years.(fn2) In the late 1970s there were only three radioactive waste disposal facilities in operation in the United States,(fn3) all of which were nearing capacity. Recognizing the need to address this looming shortage of waste disposal facilities, in 1980 Congress enacted the Low-Level Radioactive Waste Policy Act ("Act").(fn4) In the Act, Congress declared a federal policy of holding each state "responsible for providing for the availability of capacity either within or outside the State for the disposal of low-level radioactive waste generated within its borders," and found that such waste could be disposed of "most safely and efficiently . . . on a regional basis."(fn5) Consequently, Congress authorized states to enter into regional compacts that, once ratified by Congress, would have the authority to restrict the use of their disposal facilities to waste generated by the regional compact-member states.(fn6)

In 1983, Nebraska formed an Interstate Compact ("Compact") with Kansas, Arkansas, Oklahoma and Louisiana (collectively, the "party states") to build a regional disposal site for the low-level radioactive waste they generated.(fn7) Authority for the Compact derived from the Act. Each of the five states enacted the Compact as legislation(fn8) and in 1986 Congress approved the Compact.(fn9) The Compact provided the framework for licensing a facility for the disposal of low-level radioactive waste generated in the five states.(fn10) Additionally, the Compact

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established the Central Interstate Low-Level Radioactive Waste Commission ("Commission") as the governing body to carry out the Compact's purposes.(fn11) Each party state was represented by one Commission member who was entitled to one vote.(fn12)

In December 1987, the Commission, in a four to one vote, chose Nebraska as the first member state to host a low-level radioactive waste disposal facility.(fn13) The Compact required the Commission to follow the host state's procedures for application of a license before construction of the waste disposal facility could begin.(fn14) Consequently, the Commission contracted with US Ecology, Inc.(fn15) ("USE") to file a license application for a disposal facility in Nebraska.(fn16) USE selected a site in Boyd County, Nebraska(fn17) for the waste disposal facility and in July 1990 USE submitted a disposal license application to the state.(fn18)

Almost fifteen years have passed since Nebraska was chosen to host the waste facility, and not a single ton of radioactive waste from the other four party states has been disposed in Nebraska. In fact, there has yet to be a ground breaking for the construction of the proposed Boyd County facility. The delay is attributable to a torturously slow licensing process (administered by Nebraska agencies) and the veritable slew of litigation that resulted from it.(fn19) The delays have

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cost those involved with securing the proposed license tens of millions of dollars.(fn20) Consequently, the Commission, USE, and the generators of low-level radioactive waste within the party states whose waste will predominately occupy the new facility (collectively, the "Generators"), (fn21) are now looking to recover from Nebraska(fn22) those tens of millions of dollars spent during the licensing process. They have filed their claims in the United States federal district court in Nebraska and allege that Nebraska has acted in bad faith by delaying the processing of (and eventually denying) the application for the Boyd County waste disposal facility license that the Commission is required to secure in order to construct and operate the proposed facility.

In its defense, Nebraska claimed Eleventh Amendment immunity from suit. The claim was summarily rejected by the United States District Court.(fn23) The district court determined that Nebraska was not immune from the suits of the Commission, Generators and USE.(fn24)

The Eighth Circuit, in Entergy Arkansas, Inc. v. Nebraska,(fn25) upheld the ruling in regard to the Commission's suit and determined that Nebraska, by assenting to the Compact's consent to suit and venue provisions, waived its Eleventh Amendment immunity from the Commission. However, the Eighth Circuit reversed the district court's order as it pertained to the claims of USE and the Generators, reasoning that USE and the Generators were neither a party to, nor a thirdparty beneficiary of, the Compact. Consequently, the Eighth Circuit held that Nebraska did not waive its immunity from the claims of USE and the Generators.

The Eighth Circuit's decision that Nebraska is not immune from the Commission's suit could have enormous implications, as Nebraska's potential liability, including interest and attorneys' fees,

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could exceed $160 million.(fn26) A damages award of this kind would be crippling to a state's budget anytime, however, its effect would be exacerbated in these tight fiscal times when Nebraska's budget is already stretched thin.(fn27)

This Note will compare Nebraska's Compact to other disputes involving interstate compacts where state sovereign immunity has been claimed to see whether the Eighth Circuit's decision that Nebraska waived its immunity to suit from the Commission is consistent with United States Supreme Court precedent. The Background section will lay out the history and current state of Eleventh Amendment jurisprudence, as well as document the history of the controversy surrounding the proposed Boyd County waste facility. The Analysis section will focus on the Eighth Circuit's holding in Entergy Arkansas, Inc. v. Nebraska, as it pertains to Nebraska's waiver of immunity to the Commission's claims. Special attention will be paid to the consent to suit and venue provisions within the Compact, as it is from this language that a state's waiver of immunity is most often derived. The Analysis section will also opine that the overwhelming implication of the Compact's text left no room for the Eighth Circuit to make any other reasonable interpretation but that the party states, including Nebraska, had waived their immunity to suits from the Commission in federal court. While the Eighth Circuit applied the constitutionally required stringent analysis to the Compact's language, thereby giving every presumption to non-waiver of sovereign immunity, it was unable to give the Compact's consent to suit provision any meaningful effect without concluding that the provision subjected Nebraska to suit.

II. BACKGROUND

A. License Application Review Process Begins

Shortly after the selection of Nebraska as host of the waste disposal facility, the Commission contracted with USE to prepare and submit a waste disposal license application to Nebraska. Nebraska law required that USE pay all costs associated with licensing,(fn28) but pursuant to a separate agreement between the Commission and USE the Commission was to reimburse USE for the licensing costs at a later date. The Commission subsequently entered into agreements with

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the Generators(fn29) whereby they would fund the Commission for its reimbursement costs to USE.(fn30)

USE submitted its license application for the waste disposal facility in July 1990 to two Nebraska agencies, the Department of Environmental Quality ("DEQ") and the Department of Health and Human Services and Licensure ("HHS"). As part of the application process, DEQ and HHS required USE to answer 700 questions before it would review the application.

B. New Administration Takes Office

In January 1991, newly elected Nebraska Governor E. Benjamin Nelson took office. During the election, Nelson promised that if he were elected, "it is not likely that there will be a nuclear dump in Boyd County or in Nebraska."(fn31) Nelson made this statement despite Nebraska's contractual obligation...