Supreme Court Overturns Ban on Importing Uranium Ore

In another blow to the sagging domestic uranium industry, the Supreme Court Wednesday overturned a ban on imports of low-cost foreign uranium to supply American nuclear reactors.

The unanimous ruling was a victory for the Reagan Administration’s free trade policy and for users of nuclear power, including Southern California Edison, which told the court that reliance on domestic producers would raise costs to its customers.

The losers include the uranium-producing Rocky Mountain states of Colorado, Arizona, New Mexico, Nevada, Utah and Wyoming, which joined in a court brief urging the high court to uphold the ban to protect the domestic mining and milling of uranium.

The case arose over a disputed interpretation of one line of the 1954 Atomic Energy Act, which gives the federal government a monopoly over some aspects of the nuclear industry, including the enriching of uranium. The Energy Department takes natural uranium--from both domestic and foreign sources--and enriches it for use in commercial nuclear reactors.

U.S. “Shall” Restrict

The law also says that the government “shall” restrict its use of foreign uranium “to the extent necessary to assure the maintenance of a viable domestic uranium industry.”

After the accident at Pennsylvania’s Three Mile Island nuclear plant in 1979, there were no new nuclear plants, some existing ones were shut for safety inspections, and the demand for newly mined uranium plummeted. At the same time, Canada, Australia and the Soviet Union began mining and exporting uranium at lower prices than American producers could offer.

The effect on domestic uranium miners was catastrophic. In 1979, 362 mines were in operation. By 1986, according to a Senate report, only three were still working.

The Energy Department declared as early as 1983 that the domestic uranium industry was no longer “viable” and that, therefore, the government could rely on foreign uranium. By 1986, about half the uranium used in U.S. reactors came from abroad.

But the domestic producers contended that this policy violated the 1954 law because it threatened the viability of the domestic uranium industry. Acting on a suit filed by three uranium producers, a federal judge in Denver ruled in 1986 that the Energy Department had indeed violated the law and he ordered a ban on uranium imports. The 10th U.S. Circuit Court of Appeal upheld this order last year, although the ban was stayed pending the appeal to the Supreme Court.

Court Lifts Ban

On Wednesday, the high court sided with the government and lifted the ban, concluding that the domestic uranium industry could not achieve “viability” even with federal protection. “Because we conclude that Congress did not intend to force (the Energy Department) to impose enrichment restrictions where such restrictions would not achieve the statutory goal (of assuring a viable domestic industry), the judgment of the Court of Appeals is reversed,” wrote Justice Harry A. Blackmun for the court in the case (Huffman vs. Western Nuclear, 87-645).

Lawyers for the domestic uranium producers said that they had not read the court opinion and would withhold comment on its significance for the industry. The government said that a ruling in favor of the producers would have cost consumers $300 million a year in higher energy costs.

In other rulings, the court:

- Said that an investor in a failed oil deal who also promoted the deal to his friends may share liability for their losses, even though he was not the seller of the oil securities.

Billy Pinter, head of Black Gold Oil, sold oil and gas rights in Texas and Oklahoma to a group of investors, in part through the aid of Maurice Dahl, a California real estate broker. The securities sold by Pinter were not registered, and when the deal went sour, Dahl and the other investors sued Pinter.

Pinter said that Dahl should share in the liability. Two lower courts ruled that Pinter was entirely responsible for the losses, but the Supreme Court overturned those rulings and said that Dahl could be liable if he received anything of monetary value in return for promoting the deal. The case (Pinter vs. Dahl, 86-805) was returned to a trial court for further proceedings.

- Said that a state court could apply its laws and procedures in handling a law suit involving oil companies that spilled over to several states (Sun Oil vs. Wortman, 87-352.).

Oil companies from Texas, Oklahoma and Louisiana complained that they were being discriminated against in this case because the Kansas courts forced them to abide by Kansas procedural rules. But the high court, in an opinion by Justice Antonin Scalia, said that the companies have no constitutional right to evade the Kansas law.