HOLTEC INTERNATIONAL v. TOWNSHIP OF LACEY

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

HOLTEC INTERNATIONAL, et al.

Civil Action No. 20-12773 (MAS) (DEA)

MEMORANDUM OPINION

TOWNSHIP OF LACEY, et al.

Defendants.

SHIPP, District Judge

This matter comes before the Court upon Plaintiffs Holtec International (“Holtec”), Holtec

Decommissioning International, LLC (“HDI”), and Oyster Creek Environmental Protection,

LLC’s (“OCEP”) (collectively, “Plaintiffs”} Motion for a Temporary Restraining Order. (ECF No.

3.) Defendants Township of Lacey (the “Township”) and Lacey Township Planning Board (the

“Planning Board”) (collectively, “Defendants”) opposed (ECF Nos. 13, 15) and Plaintiffs replied

(ECF No. 18). The Court has carefully considered the parties’ submissions and decides the matter

without oral argument pursuant to Local Civil Rule 78.1. For the reasons set forth herein, Plaintiffs’

Motion is denied.

I. BACKGROUND

Plaintiffs own Oyster Creek Nuclear Power Station (“Oyster Creek”), a shutdown nuclear

power plant in Ocean County, New Jersey.' (Compl. J 1, ECF No. 1.) Oyster Creek is currently

1 OCEP and HDI are both wholly owned subsidiaries of Holtec, (Compl. 1 6.) OCEP is the licensed

owner of Oyster Creek and HDI serves as the plant’s decommissioning operator. (/d. { 7.)

undergoing decommissioning, a “process by which [a] plant is retired from service.” (/d.) The

decommissioning process is regulated by the Nuclear Regulatory Commission (“NRC”)? and

includes the transfer of all spent nuclear fuel from a spent fuel pool to an on-site storage facility

known as the Independent Spent Fuel Storage Installation (“ISFS!”). (/d. §f] 3-4.) In order to

perform the spent fuel campaign, Plaintiffs must first complete a mandatory dry run (i.e., practice

demonstrations). (/d. J 24.)

On July 9, 2020, Plaintiffs submitted a minor site application (the “Application”) to the

Planning Board, essentially seeking to expand the ISFSI area. (/d. {| 12.) The Planning Board,

however, denied the Application on August 24, 2020. (/d. { 18.) Plaintiffs assert that this denial

resulted in the suspension of a three-day dry run scheduled to begin on October 26, 2020.° (Dostal

Aff. 7 11, ECF No. 3-2.)

A. Oyster Creek Background

In January 2018, Exelon Generating Company, LLC (“Exelon”), the previous owner of

Oyster Creek, and the New Jersey Department of Environmental Protection entered into an

Administrative Consent Order (“ACO”) governing the decommissioning of Oyster Creek. (Compl.

2-3; ACO Doc., Ex. D to Compl., ECF No. 1-1.) Among other things, the ACO directed Exelon

to submit a Post-Shutdown Decommissioning Activities Report (“PSDAR”) to the NRC. (ACO

Doc. 1-2.) The ACO also provided that “Exelon will transfer all fuel to the ISFSI as soon as

technically and financially feasible and in accordance with the Facility’s PSDAR.” (/d. at 3.)

2 The NRC is an independent regulatory agency exercising all of the licensing and related

regulatory functions formerly assigned to the Atomic Energy Commission. 42 U.S.C. §§ 5841(f),

5842.

3 Plaintiffs indicate that a dry run related activity at their Camden Facility was scheduled for

September 28 through September 30, 2020. (Dostal Aff. { 11.)

On May 21, 2018, Exelon submitted the PSDAR, which included a “description of the

planned decommissioning activities [and] a schedule for their accomplishment.” (Exelon’s

PSDAR 3, Ex. E to Compl., ECF No. 1-1; Compl. 5.) The PSDAR indicates that Exelon selected

the SAFSTOR decommissioning method.* (/d. at 4-5.) Under SAFSTOR, Exelon intended to

commence the transfer of spent fuel to the ISFSI in March 2020 and expected to complete the

transfer in March 2024. (See id. at 8, 12.) According to the PSDAR, Exelon estimated the overall

decommissioning process would be completed by approximately 2078. (/d. at 8.) Exelon also

indicated in the PSDAR that no abnormal environmental issues were expected to result from use

of the SAFSTOR method. (See id. at 22-41.)

Sometime thereafter, Plaintiffs and Exelon entered into an agreement for the sale of Oyster

Creek that was subject to the NRC’s approval. (See Compl. 4 6.) In anticipation of the acquisition,

Plaintiffs submitted a revised PSDAR to the NRC on September 28, 2018. (/d. J 9; Pls.” PSDAR

4, Ex. F to Compl., ECF No. 1-1.) Unlike Exelon, Plaintiffs selected the DECON decommissioning

method.? (Pls.’ PSDAR 4.) Plaintiffs’ PSDAR appears to indicate that they intended to commence

the spent fuel campaign around June 2019 and expected to complete the transfer around June 2023.

(See id. at 17.) According to the PSDAR, Plaintiffs sought to complete the decommissioning

process, except for activities related to the ISFSI, “within approximately eight years of license

4 SAFSTOR is “[a] method of decommissioning in which a nuclear facility is placed and

maintained in a condition that allows the facility to be safely stored and subsequently

decontaminated (deferred decontamination) to levels that permit release for unrestricted use.”

(Exelon’s PSDAR 10.)

5 Plaintiffs PSDAR describes the DECON decommissioning method as follows: “The equipment,

structures, and portions of the facility and site that contain radioactive contaminants are promptly

removed or decontaminated to a level that permits termination of the license shortly after cessation

of operations.” (Pls.” PSDAR 4.)

transfer.” (/d. at 10.) On June 20, 2019, the NRC approved the transfer and Plaintiffs acquired

Oyster Creek shortly thereafter. (Compl. [J 11-12.)

B. Plaintiffs’ Application to the Planning Board

In December 2019, Plaintiffs submitted an initial application to the Planning Board seeking

approval to, among other things, expand the ISFSI pad to accommodate additional storage casks.

(Compl. 7 61; Dec. 2019 Appl., Ex. Q to Compl., ECF No. 1-3.) Plaintiffs assert that they

ultimately withdrew this application after determining that the proposed project was no longer

necessary. (Compl. {9 62-63.) Plaintiffs, however, allegedly performed unauthorized construction

at the site. Consequently, in March 2020, the Township issued a stop construction order to

Plaintiffs for failing to obtain construction permits. (Stop Construction Order Doc. (“SCO”), Ex.

S to Compl., ECF No. 1-3; Compl. § 64.) The order also advised Plaintiffs that they may resume

construction after obtaining the proper permits. (See generally SCO.) By correspondence dated

May 14, 2020, the Township again advised Plaintiffs to obtain the proper permits before

continuing construction at Oyster Creek. (May 14, 2020 Correspondence, Ex. D to Def. Twp.’s

Opp’n Br., ECF No. 15-1.)

After Plaintiffs allegedly continued unauthorized construction, the Township filed a

lawsuit in the Superior Court of New Jersey, Ocean County, Chancery Division,*® seeking to enjoin

Plaintiffs from continuing to undertake such work until they obtained the necessary approvals and

permits. (May 27, 2020 Superior Ct. Compl., Ex. E to Def. Twp.’s Opp’n Br., ECF No. 15-1;

Compl. J 66.) The Superior Court entered an order granting the Township’s requested relief.

(Compl. J 67.) On July 17, 2020, following settlement discussions by the parties, the Superior

6 Twp. of Lacey v. Holtec Int'l, Docket No. OCN-C-76-20.

Court entered a consent order resolving the matter. (/d. | 69; Consent Order, Ex. V to Compl.,

ECF No. 1-3.) The consent order indicated that Plaintiffs would submit a site plan application for

any prior and planned construction at Oyster Creek. (Consent Order { 1.)

That same month, Plaintiffs submitted the Application to the Planning Board in which they

described the project as “includ[ing] the filling of a hole where a concrete pad was originally

supposed to be constructed for spent fuel storage installation expansion.” (July 2020 Appl., Ex. G

to Compl., ECF No. 1-1.) The Planning Board held two hearings on the Application in August

2020 and, following the second hearing, denied the Application. (Compl. {J 74-75, 105.)

On September 14, 2020, the Planning Board adopted Resolution 20-SP-07 (the

“Resolution”) denying Plaintiff’s Application. (See generally Resolution Doc., Ex. Y to Compl.,

ECF No. 1-3.) In support of denying the Application, the Resolution provides in part that Plaintiffs

“mischaracterized the nature of the [A]pplication as a proposed temporary spent nuclear fuel

storage site” because Plaintiffs ‘provided absolutely no representation as to how many decades or

even centuries the ‘temporary’ storage will last.” (Resolution Doc. 163.) The Resolution also

provides that Plaintiffs “made numerous inconsistent, self-serving, misleading and non-credible

statements during [their] presentation.” (/d. at 164.) Consequently, the Township informed

Plaintiffs that they could not proceed with the dry run due to the Planning Board’s denial of the

Application.’ (Compl. J 79; Sept. 1, 2020 Correspondence, Ex. P to Compl., ECF No. 1-3.)

’ Plaintiffs and the Township direct the Court to a provision in the July 2020 consent order in

support of their respective positions regarding whether the dry run was contingent on Plaintiffs

obtaining the proper approvals and permits. The provision provides, in relevant part:

6. In the event the [Application] is approved by the Planning Board,

[Plaintiffs] shall apply for construction permits to use the Cask

Transfer Pit (“CTP’’) for its spent fuel transfer campaign. No new

construction may take place until a construction permit is issued,

and [Plaintiffs] have applied for permits and received the proper

C. Procedural History

On September 16, 2020, Plaintiffs filed a lawsuit against the Planning Board in the Superior

Court of New Jersey, challenging the Planning Board’s decision.*® (Sept. 2020 Superior Ct. Compl.,

Ex. 1 to Def. Planning Bd.’s Opp’n Br., ECF No. 13-1.) That same day, Plaintiffs filed the instant

two-count Complaint alleging: (1) federal preemption—specifically, that the Planning Board

improperly based its decision “solely on radiological safety concerns” because such concerns “are

within the exclusive province of the NRC” pursuant to the Atomic Energy Act, 42 U.S.C. § 2011

et seqg.—{Compl. ff 81-88); and (2) constitutional deprivation (id. fj 89-108).

On September 17, 2020, Plaintiffs filed the instant Motion, seeking to enjoin Defendants

from preventing the scheduled dry run and spent fuel campaign. (ECF No. 3.)

II. LEGAL STANDARD

“Preliminary injunctive relief is an extraordinary remedy and should be granted only in

limited circumstances.” Kos Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004)

(internal quotation marks and citation omitted), This remedy should be granted only if Plaintiffs

establish that: (1) “they are likely to succeed on the merits of their claims”; (2) “they are likely to

suffer irreparable harm without relief’; (3) “the balance of harm favors them”; and (4) “relief □□ in

inspection. . . . It is understood that the CTP will NOT be used to

execute the spent fuel program, until [Plaintiffs] receive site plan

approval and construction permits. The Township agrees that the

performance of the NRC regulated dry runs may begin as scheduled

in September 2020 even if permits and the Certificate of Approval

are not issued at that time, however the spent fuel campaign shall

not begin until permits are issued. The Township agrees to work

with [Plaintiffs] to not impact this schedule, and to ensure that any

approvals will not be unreasonably withheld or delayed.

(Consent Order J 6; Compl. J§ 71, 79; Def. Twp.’s Opp’n Br. 4-5.)

8 Holtec Decommissioning Int'l v. Twp. of Lacey Planning Bd., Docket No. OCN-L-2165-20.

the public interest.” /ssa v. Sch. Dist. of Lancaster, 847 F.3d 121, 131 (3d Cir. 2017) (citation

omitted). Plaintiffs “must meet the threshold for the first two ‘most critical’ factors”—likely to

succeed on the merits and likely to suffer irreparable harm. Reilly v. City of Harrisburg, 858 F.3d

173, 179 (3d Cir. 2017), as amended (June 26, 2017). “If these gateway factors are met, a court

then considers the remaining two factors and determines in its sound discretion if all four factors,

taken together, balance in favor of granting the requested preliminary relief.” /d.

Ill. DISCUSSION

A. Irreparable Harm

1. Parties’ Positions

In support of their Motion, Plaintiffs submit the Affidavit of Jeffrey P. Dostal (“Dostal”),

HDI’s Site Vice President. (Dostal Aff., ECF No. 3-2.) There, Dostal recounts much of the facts

and allegations set forth above. (See id. {| 3-15.) Dostal asserts that the dry run “is essential to the

decommissioning process and essential to the safety of the community.” (/d. 4 16.) Dostal notes

that the “dry run procedure and subsequent spent fuel campaign include a tremendous commitment

of time, equipment, and personnel.” (/d. J 17.) Finally, Dostal contends that Defendants’ actions

carry a “potential” to adversely “impact and delay” the spent fuel campaign, which “severely

jeopardizes ([Plaintiffs’] agreement and obligations concerning the Oyster Creek

decommissioning.” (/d. 18.)

In their Moving Brief, Plaintiffs present two arguments in support of irreparable harm: (1)

“they cannot advance decommissioning Oyster Creek and/or the spent nuclear fuel transfer

campaign” in accordance with their revised PSDAR (Pls.’ Moving Br. 33); and (2) they are

“CunjJable to comply with the ACO” provision providing for the transfer of all nuclear fuel to the

ISFSI “as soon as technically and financially feasible and in accordance with the Facility’s

PSDAR” (id. at 34). Such noncompliance, Plaintiffs argue, “may . . . expose[] [them] to

assessments under the ACO that are tied to timely performance.” (/d.) In opposition, Defendants

contend that Plaintiffs’ alleged injury is financial in nature and, therefore, ultimately compensable.

(Def. Planning Bd.’s Opp’n Br. 16, ECF No. 13; Def. Twp.’s Opp’n Br. 16-18, ECF No. 15.)

Moreover, Defendants assert that Plaintiffs created the alleged injury by, among other things,

prematurely scheduling the dry run without first obtaining the proper permits and approvals. (Def.

Planning Bd.’s Opp’n Br. 3-4, 16; Def. Twp.’s Opp’n Br. 17.)

In reply, Plaintiffs seem to argue that delaying the dry run could result in irreparable harm

to the public’s safety. (See Pls.’ Reply Br. 8-9, ECF No. 18; Dostal Suppl. Aff. 4, ECF No. 18-

2.) In support, Plaintiffs rely on a Supplemental Affidavit from Dostal, who asserts that the spent

fuel pool at Oyster Creek has a “structural safety concern in that a crack could propagate due to

the external temperature,” which “could cause leaking” and “result[] in contamination spreading.”

(Dostal Suppl. Aff. | 7.) Dostal also asserts that “[a]n impact accident or terrorist attack that

damages a spent fuel pool could result in a partial or complete loss of water coolant,” which can

result in “the release of radioactive constituents to the environment.” (/d. { 8.) As an example,

Dostal points to the Fukushima Plant nuclear accident of 2011 where the plant’s spent fuel pool

lost water coolant “[a]s a result of an earthquake and tsunami.” (/d. 11; Pls.’ Moving Br. 9.)

2. Plaintiffs Fail to Establish They are Likely to Suffer Irreparable

Harm Absent Relief

To demonstrate irreparable harm, “a plaintiff has the burden of proving a clear showing of

immediate irreparable injury.” ECRI v. McGraw-Hill, Inc., 809 F.2d 223, 226 (3d Cir. 1987)

(internal quotation marks and citation omitted). Merely “[{ejstablishing a risk of irreparable harm

is not enough [to warrant a preliminary injunction].” /d.; see also Laidlaw, Inc. v. Student Transp.

of Am., 20 F. Supp. 2d 727, 766 (D.N.J. 1998) (“[T]he claimed injury cannot merely be possible,

speculative[,] or remote.”). “[T]he injury created by a failure to issue the requested injunction must

be of a peculiar nature, so that compensation in money cannot atone for it.” Acierno v. New Castle

Cnty., 40 F.3d 645, 653 (3d Cir. 1994) (internal quotation marks and citation omitted),

Here, the Court finds that Plaintiffs fall short of establishing a clear showing of immediate

irreparable harm. As Defendants note, Plaintiffs’ alleged injury appears to be self-created and

strictly financial in nature. That is, Plaintiffs seem to have prematurely scheduled the dry run

without first obtaining the proper permits and now, as Plaintiffs acknowledge, they potentially face

assessments under the ACO. (Pis.’ Moving Br. 34.) Moreover, the ACO itself sets no definite

schedule but rather merely provides that the spent fuel campaign should be completed “as soon as

technically and financially feasible.” (ACO Doc. 4.) Plaintiffs’ allegations, therefore, present no

more than a mere speculation of financial harm. Even if Plaintiffs had alleged a sufficiently

concrete financial injury, however, their argument would still fail because a “purely economic”

injury is ultimately compensable and therefore generally does not constitute irreparable harm.

Morton v. Beyer, 822 F.2d 364, 372 (3d Cir. 1987).

Plaintiffs also make an unavailing conclusory assertion that, because the “emergent

concerns related to radiological safety are certainly of a peculiar nature,” the harm is not

compensable. (Pls. Reply Br. 9.) While it is true that an environmental injury can constitute

irreparable harm, Amoco Production Company v. Village of Gambell, 480 U.S. 531, 545 (1987),

there are no facts set forth from which the Court could conclude that such injury is sufficiently

“likely” or “imminent.” Plaintiffs’ only evidence comes from Dostal’s Supplemental Affidavit in

which he “expand[s]” on his previous submission and posits that the spent fuel pool has structural

safety concems that may cause a leak and that radioactive constituents may be released if an

incident causes sufficient loss of water coolant. (Dostal Suppl. Aff. ff 3, 7-9.) This self-serving

statement, based primarily on the Fukushima incident that resulted from natural phenomena

unheard of in this state, and submitted for the first time in reply does not establish a sufficient

likelihood of environmental harm. Notably, Plaintiffs elected to change the decommissioning

method from SAFSTOR—in which Exelon reported that no abnormal environmental issues were

expected to result from the approximately sixty-year decommissioning process—to DECON.

(Compl. { 9.) Plaintiffs, therefore, cannot persuasively claim that postposing the dry run would

likely result in irreparable harm. The Court, accordingly, finds that Plaintiffs fail to establish a

likelihood of imminent irreparable harm.’

B. Younger Abstention

The Planning Board also argues that, due to the ongoing state court proceeding, this Court

should abstain from adjudicating this matter under Younger v. Harris, 401 U.S, 37 (1971). (See

Def, Planning Bd.’s Opp’n Br. 15 (citing Addiction Specialists, Inc. v. Twp. af Hampton, 411 F.3d

399, 408 (3d Cir. 2005) (discussing Younger abstention))}.) In response, Plaintiffs assert that they

are not seeking to overturn the Planning Board’s decision as in the pending state court action. (Pls.’

Reply Br. 16.) Rather, Plaintiffs assert they “are requesting that this Court, on the basis of federal

preemption, find that” Defendants are “frustrating the operation of a federally regulated facility

and the spent fuel transfer process with no jurisdiction to do so.” (/d.)

Federal district courts have a “virtually unflagging obligation” to adjudicate claims within

its jurisdiction. Deakins v. Monaghan, 484 U.S. 193, 203 (1988). “Although the general rule is that

the pendency of a state court proceeding is not a reason for a federal court to decline to exercise

Because the Court concludes that Plaintiffs fail to demonstrate irreparable harm, it does not

address the likelihood of Plaintiffs’ success on the merits of their claim. See Morton, 822 F.2d at

367 (“To obtain a preliminary injunction, the moving party must demonstrate both a likelihood of

success on the merits and the probability of irreparable harm if relief is not granted.”).

10

jurisdiction established by Congress, an exception to that rule is Younger abstention.” Yang v. Tsui,

416 F.3d 199, 201 (3d Cir. 2005) (citation omitted). Under the Younger abstention doctrine, “[a]

federal district court has discretion to abstain from exercising jurisdiction over a particular claim

where resolution of that claim in federal court would offend principles of comity by interfering

with an ongoing state proceeding.” Kendall v. Russell, 572 F.3d 126, 131 (3d Cir. 2009) (citing

Addiction Specialists, 441 F.3d at 408).

In Sprint Communications, Inc. v. Jacobs, the Supreme Court held that Younger abstention

is limited to “three exceptional categories[:]” (1) “state criminal prosecutions”; (2) “civil

enforcement proceedings”; and (3) “civil proceedings involving certain orders that are uniquely in

furtherance of the state courts’ ability to perform their judicial functions.” 571 U.S. 69, 73, 79

(2013) (citation omitted). In doing so, the Supreme Court rejected the Eighth Circuit’s

interpretation of Younger that was based on its previous decision in Middlesex County Ethics

Committee v. Garden State Bar Ass'n, 457 U.S. 423 (1982). Sprint Comme'ns, 571 U.S. at 81.

Specifically, the Supreme Court rejected the notion that Younger abstention is warranted

“whenever [the following] three conditions are met: [t]here is (1) an ongoing state judicial

proceeding; which (2) implicates important state interests, and (3) . . . provide[s] an adequate

opportunity to raise [federal] challenges.” /d. (third and fourth alterations in original) {internal

quotation marks and citation omitted). The Supreme Court stated that these conditions were “not

dispositive” but “were, instead, additional factors appropriately considered by the federal court

before invoking Younger.” Jd. (emphasis in original). The Supreme Court warned that “{dJivorced

from their quasi-criminal context, the three Middlesex conditions would extend Younger to

virtually all parallel state and federal proceedings, at least where a party could identify a plausibly

important state interest.” /d. This result, the Supreme Court noted, “is irreconcilable with □□□□□

Il

dominant instruction that, even in the presence of parallel state proceedings, abstention from the

exercise of federal jurisdiction is the exception, not the rule.” /d. at 81-82 (internal quotation marks

and citation omitted).

Here, the pending state court proceeding does not fall under any of the three categories

delineated by the Supreme Court in Sprint. That is, the state court action is neither a criminal

proceeding nor a civil enforcement proceeding. See id. at 79-80 (noting that civil enforcement

actions are “akin to a criminal prosecution” where “a state actor is routinely a party to the state

proceeding and often initiates the action”; the proceedings “are characteristically initiated to

sanction” a party “for some wrongful act”; and “[i]nvestigations are commonly involved, often

culminating in the filing of a formal complaint or charges.”). Moreover, the state court action does

not fall under the third category relating to the “state courts’ ability to perform their judicial

functions,” which has been applied to proceedings for “civil contempt order[s]” and “posting

bond{s] pending appeal.” /d. at 79. The Court, therefore, finds that Younger abstention is

inappropriate.

IV. CONCLUSION

For the reasons set forth above, Plaintiffs’ Motion for a Temporary Restraining Order is

denied. In addition, the Planning Board’s abstention request is denied. The Court will enter an

Order consistent with this Memorandum Opinion.

ftALef

MICHAEL A. SHIPP

UNITED STATES DISTRICT JUDGE

12