N.C. Can’t Be Fined for Leaving Nuclear Compact

(CN) - A nuclear waste disposal commission can't impose a $90 million sanction on North Carolina for refusing to repay $80 million of financial assistance after it withdrew from an eight-state compact, the Supreme Court ruled Tuesday.

North Carolina was one of eight states to agree to the Southeast Interstate Low-Level Radioactive Waste Management Compact, approved by Congress in 1986. The compact was administered by a commission tasked with identifying a host state where nuclear waste storage and disposal facilities could be built.

When it designated North Carolina as a host state, North Carolina asked for help with building and licensing costs.

The commission declared it "appropriate and necessary" to provide financial assistance and paid the state nearly $80 million from 1988 to 1997. North Carolina spent about $37 million of its own money, but by the mid-1990s, it was nowhere close to obtaining the required license.

In 1997 the commission withdrew funding until North Carolina could explain how it planned to fund the rest of the licensing process. North Carolina said it could do nothing without additional funding and dropped out of the compact.

The commission responded by sanctioning the state $90 million for breaching the compact, a fine North Carolina refused to pay.

By 2003 only four states remained in the compact -- Alabama, Florida, Tennessee and Virginia. They joined the commission in asking the Supreme Court to file a bill of complaint against North Carolina. The high court agreed and assigned the case to Special Master Bradford Clark, who urged the justices to dismiss the complaint.

Clark said the commission had no power to sanction North Carolina, and even if it did, North Carolina had withdrawn from the compact before sanctions were imposed.

In a highly splintered opinion, the Supreme Court adopted the special master's recommendations and overruled seven alleged exceptions to his reports.

Though the justices largely ruled for North Carolina, they refused to dismiss the commission's claims against the state on the basis of sovereign immunity.

Chief Justice John Roberts objected to this last part of the ruling, a jurisdictional issue that had been raised during oral arguments. He pointed out that the parties to the case are five states and the commission. "One of these is not like the others: The commission is not a sovereign state," he wrote.

He said the court's decision to let the commission "piggyback" on the states' complaint teeters precariously on the Supreme Court's ruling in Arizona v. California, which is "itself build on sand."

"It is the fact that a private party is allowed to sue a sovereign state -- not the burden of litigation or the relief sought -- that infringes the immunity of the state," Roberts wrote.

Justice Clarence Thomas joined his partial dissent.

Writing separately, Justice Stephen Breyer took issue with a different part of the ruling. "I believe that North Carolina breached the compact when it suspended its efforts toward building a waste disposal facility," he wrote.

Chief Justice Roberts joined Breyer's partial dissent.

Justice Anthony Kennedy wrote a concurring opinion, joined by Justice Sonia Sotomayor.

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