1983 United States Supreme Court case
In Pacific Gas &amp; Electric Co. v. State Energy Resources Conservation &amp; Development Commission, 461 U.S. 190 (1983), the United States Supreme Court held that a state statute regulating economic aspects of nuclear generating plants was not preempted by the federal Atomic Energy Act of 1954. The case provides a framework that has guided other cases involving preemption of federal authority.
Background.
The issue of nuclear waste: The radioactive waste fuel in a nuclear reactor must be periodically removed. Because nuclear power plant operators originally assumed that the fuel would be reprocessed, storage pools made to hold it were relatively limited in capacity and design. Over time, however, it became clear that the fuel would not be reprocessed. This resulted in large stores of radioactive waste. As a result, as Justice White noted, that "problems of how and whereto store nuclear wastes [have] engendered considerable scientific, political, and public debate."
California statute: Responding to these concerns, California in 1974 enacted the Warren-Alquist State Energy Resources Conservation and Development Act, Cal. Pub. Res. Code §§ 25000 et seq. Under the act, which was amended in 1976 to add new regulations, operators of nuclear and certain other power plants had to apply for certification by the new State Energy Resources Conservation and Development Commission, or "Energy Commission" for short. Two sections in particular became the subject of dispute:
Dispute: Two California public utilities, Pacific Gas and Electric and San Diego Gas &amp; Electric Companies, filed an action in federal district court seeking a declaratory judgment that these two provisions of the Warren-Alquist act (as well as various others) were invalid under the Supremacy Clause of the United States Constitution because they were preempted by (conflicted with) the Atomic Energy Act. The federal district court agreed.
Appeal: The Ninth Circuit held:
Explanation of case's title: The Supreme Court granted certiorari to this case. The Court of Appeals for the Ninth Circuit had also consolidated another federal district court case, "Pacific Legal Foundation v. State Energy Resources Conservation and Development Commission", which challenged other portions of the California statute into the "Pacific Gas" case. Although this second district court case gave the appellate court decision its name, the Supreme Court denied certiorari on that case's portion of the appellate decision.
Decision.
The Court affirmed in a unanimous decision.
Ripeness.
First, Justice White affirmed the appellate court's reasoning that Section 25524.1(b) (California's provision regarding spent fuel storage) was not ripe for review, while Section 25524.2 was ripe.
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We agree that the challenge to 25524.2 is ripe for judicial review, but that the questions concerning 25524.1(b) are not. The basic rationale of the ripeness doctrine "is to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." "Abbott Laboratories v. Gardner", [461 U.S. 190, 201] 387 U.S. 136, 148 -149 (1967). In Abbott Laboratories, which remains our leading discussion of the doctrine, we indicated that the question of ripeness turns on "the fitness of the issues for judicial decision" and "the hardship to the parties of withholding court consideration." Id., at 149.
Both of these factors counsel in favor of finding the challenge to the waste disposal regulations in 25524.2 ripe for adjudication. The question of pre-emption is predominantly legal, and although it would be useful to have the benefit of California's interpretation of what constitutes a demonstrated technology or means for the disposal of high-level nuclear waste, resolution of the pre-emption issue need not await that development. Moreover, postponement of decision would likely work substantial hardship on the utilities. As the Court of Appeals cogently reasoned, for the utilities to proceed in hopes that, when the time for certification came, either the required findings would be made or the law would be struck down, requires the expenditures of millions of dollars over a number of years, without any certainty of recovery if certification were denied. 13 The construction of new nuclear facilities requires considerable advance planning - on the order of 12 to 14 years. 14 Thus, as in the "Rail Reorganization Act Cases", 419 U.S. 102, 144 (1974), "decisions to be made now or in the short future may be affected" by whether we act. "`One does not have to await the consummation of threatened injury to obtain preventive relief. If the injury is certainly impending that is enough.'" Id., at 143, quoting "Pennsylvania v. West Virginia", 262 U.S. 553, 593 (1923). To require the industry to proceed without knowing whether the moratorium is valid would impose a palpable [461 U.S. 190, 202] and considerable hardship on the utilities, and may ultimately work harm on the citizens of California. Moreover, if petitioners are correct that 25524.2 is void because it hinders the commercial development of atomic energy, "delayed resolution would frustrate one of the key purposes of the [Atomic Energy] Act." "Duke Power Co. v. Carolina Environmental Study Group, Inc.", 438 U.S. 59, 82 (1978). For these reasons, the issue of whether 25524.2 is pre-empted by federal law should be decided now. 15 [461 U.S. 190, 203]
Questions concerning the constitutionality of the interim storage provision, 25524.1(b), however, are not ripe for review. While the waste disposal statute operates on a statewide basis, the Energy Commission is directed to make determinations under 25524.1(b) on a case-by-case basis. As the Court of Appeals explained, because "we cannot know whether the Energy Commission will ever find a nuclear plant's storage capacity to be inadequate," judicial consideration of this provision should await further developments. 16 Furthermore, because we hold today that 25524.2 is not pre-empted by federal law, there is little likelihood that industry behavior would be uniquely affected by whatever uncertainty surrounds the interim storage provisions. In these circumstances, a court should not stretch to reach an early, and perhaps premature, decision respecting 25524.1(b).
Regarding Section 25524.1(b), White wrote that "a court should not stretch to reach an early, and perhaps a premature, decision regarding [it]." Section 25524.2 was ripe, for if power plants went ahead with their operations without knowing whether the moratorium imposed by the statute was valid, this "would impose a palpable and considerable hardship on the utilities, and may ultimately work harm on the citizens of California."
Preemption.
The court briefly set out the legal framework for preemption.
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It is well established that within constitutional limits Congress may pre-empt state authority by so stating in express terms. "Jones v. Rath Packing Co.", 430 U.S. 519, 525 (1977). Absent explicit pre-emptive language, Congress' intent [461 U.S. 190, 204] to supersede state law altogether may be found from a "`scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,' because `the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject,' or because `the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose.'" "Fidelity Federal Savings &amp; Loan Assn. v. De la Cuesta", 458 U.S. 141, 153 (1982), quoting "Rice v. Santa Fe Elevator Corp.", 331 U.S. 218, 230 (1947). Even where Congress has not entirely displaced state regulation in a specific area, state law is pre-empted to the extent that it actually conflicts with federal law. Such a conflict arises when "compliance with both federal and state regulations is a physical impossibility," "Florida Lime &amp; Avocado Growers, Inc. v. Paul", 373 U.S. 132, 142 -143 (1963), or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." "Hines v. Davidowitz", 312 U.S. 52, 67 (1941). 
The court then concluded that 25524.2 was not preempted by the Atomic Energy Act.
The court responded to each of petitioner's three arguments.
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Even a brief perusal of the Atomic Energy Act reveals that, despite its comprehensiveness, it does not at any point expressly require the States to construct or authorize nuclear powerplants or prohibit the States from deciding, as an absolute or conditional matter, not to permit the construction of any further reactors. Instead, petitioners argue that the Act is intended to preserve the Federal Government as the sole regulator of all matters nuclear, and that 25524.2 falls within the scope of this impliedly pre-empted field. But as we view the issue, Congress, in passing the 1954 Act and in subsequently amending it, intended that the Federal Government should regulate the radiological safety aspects involved in the construction and operation of a nuclear plant, but that the States retain their traditional responsibility in the field of regulating electrical utilities for determining questions of need, reliability, cost, and other related state concerns.
Need for new power facilities, their economic feasibility, and rates and services, are areas that have been characteristically governed by the States. Justice Brandeis once observed that the "franchise to operate a public utility . . . is a special privilege which . . . may be granted or withheld at the pleasure of the State." "Frost v. Corporation Comm'n", 278 U.S. 515, 534 (1929) (dissenting opinion). "The nature of government regulation of private utilities is such that a utility may frequently be required by the state regulatory scheme to obtain approval for practices a business regulated in less detail would be free to institute without any approval from a regulatory body." "Jackson v. Metropolitan Edison Co.", 419 U.S. 345, 357 (1974). See "Central Hudson Gas &amp; Electric Corp. v. Public Service Comm'n of New York", 447 U.S. 557, 569 (1980) ("The State's concern that rates be fair and efficient represents a clear and substantial governmental interest"). With the exception of the broad authority of the [461 U.S. 190, 206] Federal Power Commission, now the Federal Energy Regulatory Commission, over the need for and pricing of electrical power transmitted in interstate commerce, see Federal Power Act, 16 U.S.C. 824 (1976 ed. and Supp. V), these economic aspects of electrical generation have been regulated for many years and in great detail by the States. 17 As we noted in "Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc.", 435 U.S. 519, 550 (1978): "There is little doubt that under the Atomic Energy Act of 1954, state public utility commissions or similar bodies are empowered to make the initial decision regarding the need for power." Thus, "Congress legislated here in a field which the States have traditionally occupied. . . . So we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." "Rice v. Santa Fe Elevator Corp.", supra, at 230.
The Atomic Energy Act must be read, however, against another background. Enrico Fermi demonstrated the first nuclear reactor in 1942, and Congress authorized civilian application of atomic power in 1946, Atomic Energy Act of 1946, see Act of Aug. 1, 1946, 60 Stat. 755, at which time the Atomic Energy Commission (AEC) was created. Until 1954, however, the use, control, and ownership of nuclear technology remained a federal monopoly. The Atomic Energy Act of 1954, Act of Aug. 30, 1954, 68 Stat. 919, as [461 U.S. 190, 207] amended, 42 U.S.C. 2011 et seq. (1976 ed. and Supp. V), grew out of Congress' determination that the national interest would be best served if the Government encouraged the private sector to become involved in the development of atomic energy for peaceful purposes under a program of federal regulation and licensing. See H. R. Rep. No. 2181, 83d Cong., 2d Sess., 1-11 (1954). The Act implemented this policy decision by providing for licensing of private construction, ownership, and operation of commercial nuclear power reactors. "Duke Power Co. v. Carolina Environmental Study Group, Inc.", 438 U.S., at 63 . The AEC, however, was given exclusive jurisdiction to license the transfer, delivery, receipt, acquisition, possession, and use of nuclear materials. 42 U.S.C. 2014(e), (z), (aa), 2061-2064, 2071-2078, 2091-2099, 2111–2114 (1976 ed. and Supp. V). Upon these subjects, no role was left for the