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December 10, 1979

The TOWNSHIP OF LOWER ALLOWAYS CREEK and Samuel E. Donelson, Mayor, Harry Coleman, Earl Pancoast, W. David Strong, and Robert A. Traae, Committeemen, Plaintiffs,
The UNITED STATES NUCLEAR REGULATORY COMMISSION, and Joseph M. Hendrie, Chairman of the United States Nuclear Regulatory Commission and The United States of America, Defendants

The opinion of the court was delivered by: BROTMAN

This is an action brought by the Township of Lower Alloways Creek, in Salem County, New Jersey, and by the mayor and committeemen of that Township, seeking assorted forms of declaratory and injunctive relief related to the proposal of Public Service Electric and Gas Company ("Public Service") to expand the waste storage capacity of Units # 1 and # 2 of its Salem Nuclear Generating Station. *fn1" Jurisdiction of this court is asserted to arise under the due process and legislative powers clauses of the Constitution, U.S.Const. amend. V and art. I, § 1, respectively, the National Environmental Policy Act, 42 U.S.C. § 4321, Et seq., the Atomic Energy Act, 42 U.S.C. § 2011, Et seq., the Energy Reorganization Act of 1974, 42 U.S.C. § 5801, Et seq., and the Council on Environment Quality Guidelines for Preparation of Environmental Statements, 40 C.F.R. Part 1,500 (1973). This case is now before this court upon the defendants' motion to dismiss the complaint. Before reaching the merits of the defendants' motion, the court will review the course of events which brought the litigants to their present positions.

I. Technical Background

 The production of nuclear waste material is a concomitant part of the process by which energy is derived from nuclear fission. The fuel with which nuclear reactors are operated is contained in fuel rods, which are placed in the core of the reactor. As the reactor is operated, these fuel rods gradually begin to accumulate radioactive byproducts of the nuclear fission process. When the accumulation of these byproducts reaches the point at which the fuel rods may no longer be utilized efficiently in the nuclear reactor, they are removed from the reactor and replaced by new fuel rods. These exhausted fuel rods, which are commonly referred to as "spent" fuel rods, are then placed in pools of water near the reactor, known as "spent fuel pools" or "SFP's." *fn2" During the initial period after the spent fuel rods are removed from the reactor, they lose their heat and radioactivity at a rapid rate. *fn3" The SFP's at the Salem Nuclear Generating Station, like the SFP's at most nuclear power plants, were designed to hold the spent fuel rods during this initial period after the removal of the rods from the reactor core. After this short period of storage, the spent fuel rods would then be removed from the reactor site, for possible reprocessing of the rods to extract some radioactive material which may be used in some activity involving nuclear power, and for the eventual permanent storage of the remaining nuclear waste material. *fn4" However, this scheme was dependent upon the availability of sufficient facilities for the treatment and disposal of nuclear waste material, *fn5" and the decision of the federal government to halt the commercial reprocessing of spent nuclear fuel as a result of the fear of plutonium proliferation has aggravated an already growing problem of securing adequate disposal facilities. *fn6" In response to these nuclear waste disposal difficulties, Public Service, as well as dozens of other operators of nuclear power plants, *fn7" decided to petition the Nuclear Regulatory Commission ("NRC") for approval of a plan to place new storage racks in its onsite SFP's, which would result in the storage of the spent fuel rods in closer proximity to each other than they are presently stored. This would increase the storage capacity in the existing SFP's and thereby delay the eventual date of reckoning when the nuclear industry must develop a long-term solution to the waste disposal problem which threatens to undermine the safe development of nuclear power.

 II. Procedural History

 Public Service initiated the proceedings involved in the expansion of its onsite storage facilities by filing an application with the NRC to amend its operating license for Salem Unit # 1 to permit it to use the new storage racks, or to "rerack" as the conversion is referred to in the nuclear industry. Notice of this application was filed in the Federal Register on February 8, 1978. 43 Fed.Reg. 5,443. In response to Public Service's application, the staff of the NRC performed studies of the safety and environmental effects of the proposed reracking, and the NRC invited any interested person to seek leave to intervene and to request a public hearing. The Township of Lower Alloways Creek exercised that option and filed the appropriate petition on March 9, 1978. *fn8" The Atomic Safety and Licensing Board of the NRC granted the township leave to intervene, 43 Fed.Reg. 18,803, and held evidentiary hearings on the proposed amendment to Unit # 1's operating license to permit the requested reracking from May 2 through May 4, 1978. The Atomic Safety and Licensing Board concluded its hearings on this subject on July 11, 1979, and the matter is now pending before the Board for its determination.

 Public Service has yet to receive an operating license for Unit # 2 of the Salem Nuclear Generating Station, so it submitted its proposed expansion of that unit's SFP's in the form of an amendment to its application for an operating license. None of the plaintiffs in this action have sought to participate in this licensing proceeding, and the application is now being considered within the scope of the administrative licensing procedure for that unit. 37 Fed.Reg. 22,637.

 Plaintiffs filed this action on April 9, 1979, prior to the commencement of the administrative hearings on the proposed amendment to the operating license for Unit # 1 of the Salem station. The plaintiffs have made many assertions and requests in their complex, highly technical 50 page complaint for declaratory and injunctive relief. However, the heart of the requested relief may be summarized as follows: (1) order the NRC not to authorize Public Service to expand its facilities for the storage of spent fuel rods by constructing new SFP's and racks or by utilizing existing SFP's and racks beyond the current capacity of 264 spent fuel rods per pool; (2) order the NRC to prepare an Environmental Impact Statement on the proposed reracking of the storage facilities; (3) order the NRC to prepare a plan for the ultimate disposal of the spent fuel generated by Units # 1 and # 2 of the Salem Nuclear Generating Station; (4) declare that the NRC's licensing procedures for the expansion of SFP's exceed the NRC's statutory jurisdiction and violate the plaintiffs' first and fifth amendment rights; and (5) declare that the expansion of the SFP's at Units # 1 and # 2 would create an unreasonable risk to the public health and safety.

 The defendants have advanced two arguments in support of their motion to dismiss the plaintiffs' complaint. First, the complaint should be dismissed for failure to exhaust the available administrative remedies prior to the commencement of this action. Second, and in the alternative, if the exhaustion doctrine does not bar the plaintiffs from seeking judicial consideration of their challenge to the NRC's actions at this time, then any jurisdiction rests in the court of appeals, not the district court. The court will consider these arguments seriatim.

 III. The Exhaustion Doctrine

 The requirement of exhaustion of administrative remedies prior to the commencement of judicial actions was briefly summarized by the Supreme Court in the case of Myers v. Bethlehem Shipbuilding Corporation, 303 U.S. 41, 58 S. Ct. 459, 463, 82 L. Ed. 638 (1938). In Myers the Court referred to "the long-settled rule of judicial administration that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted." Id., at 50-51. However, this principle of exhaustion of administrative proceedings before resorting to judicial action is not an absolute, unqualified rule, and state and federal courts, including the Supreme Court, have exercised jurisdiction over cases in which the litigants have bypassed or not fully exhausted the available administrative remedies. 3 K. Davis, Administrative Law Treatise, §§ 20.01-20.10 (1958), and the cases cited therein. The Supreme Court explicitly recognized that the exhaustion doctrine is a rule of limited application in its opinion in McKart v. United States, 395 U.S. 185, 89 S. Ct. 1657, 23 L. Ed. 2d 194 (1969), in which it observed:

The doctrine (of exhaustion of administrative remedies) is applied in a number of different situations and is, like most judicial doctrines, subject to numerous exceptions. Application of the doctrine to specific cases requires an understanding of its purposes and of the particular administrative scheme involved.

 395 U.S., at 193, 89 S. Ct. at 1662 (footnote omitted).

 The issue presented to the court by the defendants' exhaustion argument is whether, in the light of the nature of the plaintiffs' claims and the available administrative procedures by which these claims may be heard and remedied, the policies implicated by the exhaustion doctrine would be better served by this court requiring the plaintiffs to pursue all of the existing administrative remedies which may be available or by permitting them to seek judicial consideration of their claims at this time. The consideration of this question should begin with a review of the purposes and functions of the exhaustion doctrine.

 The purposes and operation of the exhaustion doctrine were neatly summarized by the Court of Appeals for the Third Circuit in its recent opinion in First Jersey Securities, Inc. v. Bergen, 605 F.2d 690 (1979). The court said:

The primary purpose of this well-established doctrine (of exhaustion of administrative remedies) is "the avoidance of premature interruption of the administrative process," McKart v. United States, 395 U.S. 185, 193, 89 S. Ct. 1657, 1662, 23 L. Ed. 2d 194 (1969) . . . . Furthermore, the principle allows the administrative agency to utilize its discretion and apply its expertise; it gives the agency the opportunity to correct its own errors; and it minimizes piecemeal appeals of agency actions. Parisi v. Davidson, 405 U.S. 34, 37, 92 S. Ct. 815, 31 L. Ed. 2d 17 (1972). "Finally, it is possible that frequent and deliberate flouting of administrative processes could weaken the effectiveness of an agency by encouraging people to ignore its procedures." McKart v. United States, supra, 395 U.S. at 195, 89 S. Ct. at 1663; McGee v. United States, 402 U.S. 479, 484, 91 S. Ct. 1565, 29 L. Ed. 2d 47 (1971); K. Davis, Administrative Law of the Seventies §§ 20.01-20.08 (1976).

 605 F.2d, at 695 (footnote omitted). A related concern expressed by the Supreme Court in McKart is the judiciary's respect for the independent power and responsibility of the administrative agencies, pursuant to the current application of the constitutional principle of separation of powers. The Court cautioned:

The administrative agency is created as a separate entity and invested with certain powers and duties. The courts ordinarily should not interfere with an agency until it has completed its action, or else has clearly exceeded its jurisdiction. As Professor Jaffe puts it, "(the) exhaustion doctrine is, therefore, an expression of executive and administrative autonomy." This reason is particularly pertinent where the function of the agency and the particular decision sought to be ...

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