Court Dismisses Case Challenging Exemptions for Company to Restart Nuclear Power Plant in Michigan

Last week, the U.S. District Court for the Western District of Michigan dismissed a lawsuit challenging an exemption decision by the Nuclear Regulatory Commission (NRC) concerning the Palisades Nuclear Power Plant in Covert Township, Michigan. The court found that the Atomic Energy Act and the Hobbs Act channel review of an exemption decision related to a licensing proceeding to the U.S. Courts of Appeals.

Congress created the NRC to license and regulate commercial nuclear power plants and other uses of nuclear material. Consistent with Congress's broad grant of authority under the Atomic Energy Act, the NRC has promulgated regulations under which an individual or entity may receive, renew, amend, or terminate a license concerning a nuclear power plant. As concerns this lawsuit, the NRC may, in certain situations, grant exemptions from regulatory requirements.

In March 2023, Holtec Decommissioning International LLC (Holtec) alerted the NRC that it sought to restart Palisades, a shutdown and defueled nuclear power plant. Holtec submitted to the NRC a request to be exempted from certain provisions, alongside requests to amend the Palisades operating license, and to transfer reactor-operating authority under the license. In July 2025, the NRC issued Holtec the requested exemption, alongside the requested license amendments, and the application to transfer operating authority for Palisades.

Plaintiffs challenged NRC's actions. The court's dismissal reaffirmed that Congress charted a specific path for lawsuits challenging final orders by the NRC. Specifically, the Hobbs Act vests the U.S. Courts of Appeals with exclusive jurisdiction to review all final orders of the NRC concerning nuclear licensing, including, as is the case here, the July 2025 exemption decision.

"We are pleased that the court left in place the NRC's exemption decision, which will allow the Palisades plant to move forward toward restart," said Principal Deputy Assistant Attorney General Adam Gustafson of the Justice Department's Energy and Natural Resources Division (ENRD). "By clearing the way for this project, the court's decision advances domestic energy production and allows American communities to benefit from reliable nuclear power."

Attorneys with ENRD's Natural Resources Section handled this matter.