SRS Sign, Federal Appeals

An entrance to the Savannah River Site, a 310-square-mile nuclear complex near Aiken and New Ellenton.

Oral arguments in a case concerning $200 million of plutonium fines sought by South Carolina were heard by a panel of federal judges Tuesday, another step forward in an escalating legal battle entangling the Palmetto State, the U.S. Department of Energy and its Savannah River Site.

The roughly 47-minute hearing before the U.S. Court of Appeals for the Federal Circuit was held remotely, by telephone, court documents show. Restrictions are in place in light of the novel coronavirus crisis, or, as the court describes the circumstances on its website, "extraordinary public health emergencies."

No decision or ruling had been made as of Thursday morning.

The Tuesday back-and-forth closely mirrored points made in prior arguments and briefs filed in lower courts: South Carolina contends it is owed the multimillion-dollar sum, and that money is available for disbursement now, while the federal government disagrees, arguing there is no appropriation for the fines, meaning they can't be paid out.

The Palmetto State first sued the U.S. – namely the Department of Energy, the Savannah River Site steward – in January 2018 seeking $100 million. Months later, the state amended its complaint. It sought $200 million total: $100 million in fines from 2016, and $100 million in fines from 2017.

Federal law mandated beginning in 2016 that the Energy Department pay South Carolina $1 million for each day, up to a maximum 100 days per year, the department did not process plutonium at the Mixed Oxide Fuel Fabrication Facility or get 1 metric ton of the material out of the state.

Metric tons of plutonium are kept at the Savannah River Site's K-Area, a retrofitted reactor complex.

The DOE's National Nuclear Security Administration nixed MOX in October 2018, before it was finished and after billions of dollars had been sunk into the hamstrung project. Separately, 1 metric ton of plutonium – half of which went to the Nevada National Security Site near Las Vegas – was moved out of the Savannah River Site and the state, more broadly, prior to 2020.

Federal Claims Judge Margaret M. Sweeney tossed South Carolina's case in late August 2019. The state appealed, culminating in Tuesday's hearing.

Sweeney last year ruled the courts were not the correct path to pursue the $200 million in plutonium fines, favoring the federal government's position.

On Tuesday, South Carolina's counsel, John William Roberts, likened the millions of dollars to unpaid rent, though one judge quickly questioned the comparison.

"When we use the term rent, it's more in an analogous way," Roberts said. "We're saying that Congress gave them a choice: you either can store the plutonium in South Carolina and make the payments, or you can remove it and you do not have to make the payments. And that's the choice."

"They, the Department of Energy, decided to stay in the state of South Carolina," he said, "and the cost of that decision are the assistance payments."

The federal government's counsel, Tara K. Hogan, "strongly" disagreed with that characterization. The purpose of the payments – not yet made – was "reassurance to the state that it would not become what it feared to be a permanent dumping ground for the nation's plutonium material," she said.

"The question is really looking at the appropriations that Congress has made," Hogan later said, "and whether any of them are available for the purpose."

The oral arguments Tuesday come more than a year after South Carolina and the U.S. tried to settle its dispute sans judge. Those talks unraveled last year.

Colin Demarest covers the Savannah River Site, the U.S. Department of Energy, the National Nuclear Security Administration and government in general. Follow him on Twitter: @demarest_colin