[00:00:01] Speaker 04:
Okay, this is our co-location number 19-23-24, state of South Carolina against the United States.

[00:00:10] Speaker 04:
Mr. Roberts.

[00:00:12] Speaker 03:
Thank you, Your Honor.

[00:00:12] Speaker 03:
Good morning and may it please the Court.

[00:00:15] Speaker 03:
This case centers on the question, what constitutes an available appropriation for the economic and impact assistance payments the Department of Energy was required by statutes to provide to the state?

[00:00:26] Speaker 03:
The Court of Federal Claims effectively concluded that a line item appropriation

[00:00:31] Speaker 03:
specifically for the assistance payments was required for there to be available appropriations.

[00:00:37] Speaker 03:
And because there was not one.

[00:00:38] Speaker 02:
In Maine community, the Supreme Court's decision recently, they've told us that the language subject to the availability of appropriations is limiting.

[00:00:48] Speaker 02:
What do you understand to be the limiting effect of that language?

[00:00:54] Speaker 03:
Yes, thank you, Your Honor.

[00:00:55] Speaker 03:
It limits it to just that available appropriations.

[00:00:58] Speaker 03:
It cuts off other sources of funds

[00:01:01] Speaker 03:
maybe collections, other specific funds that Congress has enacted.

[00:01:06] Speaker 03:
But the question remains, what is an available appropriation?

[00:01:09] Speaker 03:
And in fact, that's the second question that this court asked in Greenlee.

[00:01:14] Speaker 03:
The Supreme Court recently just basically confirmed the Greenlee County analysis.

[00:01:20] Speaker 03:
And so the question is, what is an available appropriation?

[00:01:23] Speaker 03:
And the simple and undisputed answer is that an available appropriation for a proposed expenditure

[00:01:29] Speaker 03:
is one that can be used for that expenditure in compliance with the purpose statute.

[00:01:34] Speaker 02:
And implying this purpose analysis, the staff... There was no appropriation for this purpose, right?

[00:01:44] Speaker 03:
There was.

[00:01:46] Speaker 03:
There were appropriations for the material disposition program.

[00:01:50] Speaker 03:
The law has never been that for there to be an available appropriation, there has to be a specific line on appropriation.

[00:01:59] Speaker 03:
Congress does not and could not reasonably fund all future expenditures of an agency through line item appropriations.

[00:02:07] Speaker 03:
The court of federal claims accepted that and so does the federal government.

[00:02:13] Speaker 03:
The general proposition that you do not need a line item appropriation.

[00:02:17] Speaker 03:
What you do is you look at the specific appropriations that were available and you determine according to the GAO, the government accountability,

[00:02:28] Speaker 03:
of its analysis where those appropriations had a logical or reasonable relationship to an authorized function or the expenditure of the federal agency.

[00:02:38] Speaker 02:
Is this the necessity doctrine that you're relying on?

[00:02:42] Speaker 03:
Yes, John.

[00:02:43] Speaker 03:
Well, it's a plain language interpretation of both relevant statutes here, Section 2566, as well as the relevant appropriations act.

[00:02:54] Speaker 02:
I'm trying to figure out what the contention is here.

[00:02:57] Speaker 02:
Is the contention that this fits within the necessity to offer?

[00:03:01] Speaker 03:
Yes, Your Honor.

[00:03:03] Speaker 03:
Yes.

[00:03:03] Speaker 03:
That the material disposition program appropriations, which are set forth in the explanatory tables of the relevant appropriation acts.

[00:03:12] Speaker 03:
There's a line there that says material disposition, and that's for the material disposition program.

[00:03:18] Speaker 03:
Those appropriations are available for the authorized function of the assistance payments.

[00:03:26] Speaker 03:
Congress, through Section 2566, made the assistance payments an authorized function and obligation of the Department of Energy's disposition program.

[00:03:39] Speaker 03:
If you look at Section 2566, you look at the title, it's, quote, disposition of weapons usable plutonium at the Savannah Riverside.

[00:03:48] Speaker 02:
You go through the body of Section... They can make the disposition of the materials without

[00:03:54] Speaker 02:
paying these amounts to the state of South Carolina, right?

[00:03:58] Speaker 02:
That doesn't assist them in making the material disposition.

[00:04:04] Speaker 03:
I can see that the payments themselves do not assist in the actual processing of the plutonium.

[00:04:11] Speaker 03:
But here we're looking at whether they assist the Department of Energy in their disposition program as a whole, whether they have a reasonable or logical relationship to the disposition program as a whole.

[00:04:23] Speaker 03:
And here Congress answered that question.

[00:04:26] Speaker 03:
It enacted Section 2566 and all of those obligations in furtherance of the nation's disposition policy.

[00:04:35] Speaker 03:
I mean, here what the government is saying is I think they essentially concede that statute was enacted as they must in furtherance of the disposition program.

[00:04:47] Speaker 03:
But now when the state comes to enforce those obligations, those obligations have nothing to do with

[00:04:53] Speaker 03:
the disposition program, and just respectfully, we think that's absurd.

[00:04:58] Speaker 01:
Congress... Councilman, this is Wallach.

[00:05:04] Speaker 01:
There's an alternative for the United States to paying those funds if they're required, and that is to move the radioactive material out of the state of South Carolina.

[00:05:20] Speaker 01:
Am I correct?

[00:05:22] Speaker 01:
Correct, yes.

[00:05:23] Speaker 01:
What funds would be used for that movement?

[00:05:27] Speaker 03:
Well, the department in later years used material disposition program funds to move the plutonium outside of South Carolina.

[00:05:37] Speaker 03:
So that relates to another litigation the state was forced to bring, and that was related to subsection C of section 2566.

[00:05:48] Speaker 03:
We obtained an order

[00:05:49] Speaker 03:
requiring the Department of Energy to move one ton, as required by that section, outside of the state.

[00:05:56] Speaker 03:
After the Fourth Circuit affirmed, the Department of Energy did in fact remove that plutonium.

[00:06:02] Speaker 03:
They shipped it out to Nevada, or the majority of it out to Nevada, and in their budget request, they said they were using material disposition program appropriations to do that.

[00:06:13] Speaker 03:
So the government, through its actions, has at least conceded that

[00:06:18] Speaker 03:
those appropriations have a logical or reasonable relationship to Section 2566 obligations.

[00:06:27] Speaker 01:
Council, that's Nevada, not Nevada.

[00:06:30] Speaker 03:
My apologies.

[00:06:33] Speaker 04:
My apologies.

[00:06:38] Speaker 04:
uh... with with the entire uh... deposit of the residual plutonium moved out of south carolina just that one time

[00:06:51] Speaker 03:
Just that one time, your honor.

[00:06:53] Speaker 03:
Um, that was what that lawsuit, uh, the previous lawsuit in what subsection C of 2566 required the plutonium that the department could either remove or pay the obligation.

[00:07:06] Speaker 03:
That plutonium is all remaining in the state of South Carolina.

[00:07:10] Speaker 03:
And so by making that decision to store the plutonium in South Carolina, the department of energy, knowing that,

[00:07:18] Speaker 03:
The effect of that decision was to obligate the assistance payments.

[00:07:23] Speaker 03:
The department made that decision obligated assistance payments and that plutonium is now stored.

[00:07:29] Speaker 03:
So as we say in our brief, the, the payments are in essence, the, the storage costs that the statually mandated storage costs or rent of the department of energy continuing to store that plutonium in South Carolina.

[00:07:42] Speaker 03:
And they did that for a reason that furthers their new distance.

[00:07:47] Speaker 02:
they're not renting any property from the state of South Carolina, right?

[00:07:52] Speaker 02:
South Carolina has no ability to prevent them from processing uranium in South Carolina, right?

[00:07:59] Speaker 03:
We do not have the ability to prevent them from doing so.

[00:08:02] Speaker 03:
When we use the term rent, it's more of an analogous way.

[00:08:06] Speaker 03:
We're saying that Congress gave them a choice.

[00:08:12] Speaker 03:
You either can store the plutonium in South Carolina and make the payments

[00:08:17] Speaker 03:
or you can remove it and you do not have to make the payments.

[00:08:21] Speaker 03:
And that's the choice.

[00:08:22] Speaker 03:
The Department of Energy decided to stay in the state of South Carolina and the cost of that decision are the assistance payments.

[00:08:33] Speaker 03:
And they made that decision, as I just mentioned, because it furthers their current disposition policy.

[00:08:41] Speaker 03:
And that is they want to what they call dilute and dispose and that initial process

[00:08:45] Speaker 03:
occurs in South Carolina.

[00:08:48] Speaker 03:
So not only was the statute enacted in furtherance of their prior preferred disposition policy and those obligations imposed in furtherance of their prior disposition policy, their current decision is now to store the plutonium in South Carolina is in furtherance of their current disposition policy after they fail to build the MAS facility.

[00:09:11] Speaker 01:
Counsel, this is Judge Waller.

[00:09:14] Speaker 01:
The specific language at issue here, subject to the availability of appropriations, was injected into the statute at the request of a senator from South Carolina.

[00:09:31] Speaker 01:
What does the record show was the reason for that change, that limiting change?

[00:09:37] Speaker 03:
Your Honor, frankly, there's not much in the record or that I have ever been able to find for the reason for that change.

[00:09:44] Speaker 03:
Some of the legislative history and what the Court of Federal Claims found that it was done as a technical correction.

[00:09:52] Speaker 03:
For purposes here, our position is it does not matter.

[00:09:56] Speaker 03:
We have always believed that we had to prove that we fit within the current language, and that is subject to availability appropriations.

[00:10:07] Speaker 01:
There must have been something there, but I couldn't find it.

[00:10:13] Speaker 03:
Your Honor, I've been dealing with this case for several years and have not been able to define it.

[00:10:20] Speaker 03:
But we really think that's somewhat of a non-issue here because the language, what is in the current statute and what we're attempting to enforce is clear and is used

[00:10:34] Speaker 03:
in many, many statutes as the main health decision, the Supreme Court recognized in that decision.

[00:10:39] Speaker 03:
That language is commonly used.

[00:10:42] Speaker 03:
We don't believe the language in 2566 means anything different than how it's commonly used.

[00:10:49] Speaker 02:
And that's... And the way it's commonly used, it's restrictive.

[00:10:52] Speaker 02:
There has to be an appropriation for that item.

[00:10:58] Speaker 03:
And that's why I respectfully disagree, Your Honor.

[00:11:01] Speaker 03:
It says available appropriations.

[00:11:03] Speaker 03:
It does not say available appropriations specifically for the assistance payments.

[00:11:08] Speaker 03:
And the common understanding of what constitutes an available appropriation is that it can be extended without violating the purpose statute, whether there are sufficient appropriations that can be extended without buying the purpose statute.

[00:11:22] Speaker 03:
And here we have identified that specific appropriation.

[00:11:25] Speaker 03:
That is the material decision.

[00:11:27] Speaker 03:
Yes?

[00:11:28] Speaker 01:
Counsel, this is Judge Wallach.

[00:11:30] Speaker 01:
In the red brief at 2223,

[00:11:33] Speaker 01:
The United States argues that because of the text of 2566D1 and the appropriation statute answer the question of whether the funds were appropriated for the assistance payments, the inquiry ends there.

[00:11:48] Speaker 01:
And you argue that the necessary expense rule should be considered.

[00:11:51] Speaker 01:
You mentioned that previously.

[00:11:53] Speaker 01:
Has the necessary expense rule ever been used to justify the kind of high dollar expenses that you're now seeking?

[00:12:00] Speaker 03:
Yes, it has.

[00:12:02] Speaker 03:
It was used actually by the Government Accountability Office in the Moda case.

[00:12:08] Speaker 03:
So if you recall, what started that case was a GAO opinion saying that for the risk quarter payments, a more general appropriation was available to pay for those risk quarter payments, even though Congress did not give a specific appropriation for those payments.

[00:12:28] Speaker 03:
The risk order payments, I think, for that year at issue were in the number of billions.

[00:12:33] Speaker 03:
Of course, Congress has now approved a judgment of over 12.5 billion out of the Judgment Fund when there was no specific appropriation.

[00:12:43] Speaker 03:
So I think it's the issue of what is the amount.

[00:12:48] Speaker 02:
It wasn't in that statute a subject to availability of appropriations language.

[00:12:54] Speaker 03:
There was not, but what GAO was considering was the question of available appropriations.

[00:13:02] Speaker 03:
That was the question presented to GAO.

[00:13:04] Speaker 03:
That's the question commonly presented to GAO.

[00:13:08] Speaker 03:
And when they look to determine what is an available appropriation, they look at the plain language of the statute, and they look at the necessary expense doctrine.

[00:13:17] Speaker 03:
And here, both the plain language and the application of the necessary expense doctrine

[00:13:22] Speaker 03:
confirm that the material disposition appropriations were available for the assistance payments.

[00:13:29] Speaker 03:
And that's all that needs to be done.

[00:13:31] Speaker 03:
There does not need to be, and there's never been a law, there has to be a specific line item appropriation.

[00:13:38] Speaker 03:
And I believe the government can see that as did the core federal claims.

[00:13:45] Speaker 02:
What language of the statute covers this item as an appropriation?

[00:13:52] Speaker 03:
The appropriation, the most specific language that the Congress used was it gave appropriations for the material disposition program.

[00:14:01] Speaker 03:
Here, section 2566 was enacted as part of and imposed obligations upon the Department of Energy as part of their plutonium disposition program.

[00:14:13] Speaker 03:
So Congress has answered the question here through the operative statute, through section 2566.

[00:14:19] Speaker 03:
You know, the Department of Energy may disagree, but Congress has said these payments, along with all the other obligations, further our disposition program.

[00:14:30] Speaker 03:
We're going to enact them.

[00:14:31] Speaker 03:
And so when now South Carolina comes to enforce those obligations, those obligations still relate to the plutonium disposition program.

[00:14:41] Speaker 03:
I believe my time's up, but I'm happy to answer any other questions.

[00:14:46] Speaker 04:
I see any more questions at the moment?

[00:14:47] Speaker 04:
Mr. Roberts will have rebuttal time.

[00:14:50] Speaker 01:
Thank you.

[00:14:50] Speaker 01:
No, thank you.

[00:14:51] Speaker 04:
All right, then let's hear from the government.

[00:14:54] Speaker 04:
Ms.

[00:14:54] Speaker 04:
Hogan.

[00:14:57] Speaker 00:
Good morning, Your Honors.

[00:14:57] Speaker 00:
May it please the Court?

[00:15:00] Speaker 00:
In the event that the MOC's production objective was not met, Congress limited the Department of Energy's liability for economic and assistance payments by using a specific term of art with a specific meaning.

[00:15:12] Speaker 00:
Any payments were subject?

[00:15:14] Speaker 01:
Ms.

[00:15:15] Speaker 01:
Hogan, this is Judge Wallace.

[00:15:17] Speaker 01:
In the blue brief at 32, footnote 8,

[00:15:20] Speaker 01:
South Carolina says that it doesn't know if the DOE would remove the plutonium for each year.

[00:15:26] Speaker 01:
I asked a question and the response was, well, they have removed it rather than pay us for one year.

[00:15:37] Speaker 01:
Are you going to keep removing it?

[00:15:41] Speaker 00:
Your Honor, I don't have, I'm not able to answer that on behalf of the Department of Energy.

[00:15:49] Speaker 00:
I think maybe what I could do though is clarify what the statute actually requires because I think it maybe hasn't been fully explained.

[00:15:59] Speaker 00:
In subsection B1, the obligation to pay the economic and impact assistance payments subject to the ability of appropriations continues until, quote, the later of the date on which the MOCS production objective is achieved

[00:16:18] Speaker 00:
in such a year or the date on which the secretary has removed from the state of South Carolina in such a year at least one metric ton of defense plutonium.

[00:16:28] Speaker 00:
So the obligation, which again is contingent on the availability of appropriations, would only cut off once the later of those two events are met.

[00:16:40] Speaker 00:
And since there's no question that the MOCS production objective hasn't been met, will not be met in light

[00:16:48] Speaker 00:
the discontinuation of the construction of the facility.

[00:16:52] Speaker 00:
That is really the issue here.

[00:16:55] Speaker 00:
The issue is not, you know, does DOE have a choice to just remove or to pay.

[00:17:04] Speaker 00:
It's really the statute is written in a way in which the obligations continue until the later of the two events are met.

[00:17:13] Speaker 01:
I got it.

[00:17:15] Speaker 01:
Thank you.

[00:17:18] Speaker 00:
As we have explained and as this Court has explained, subject to the availability of appropriations is, quote, commonly used to restrict the government's liability to the amounts appropriated by Congress for this purpose.

[00:17:34] Speaker 00:
This Court has said that in Prairie County and Greenlee and the Supreme Court's recent decision in Maine Community Health only confirms that those obligations are limited either

[00:17:47] Speaker 00:
by an appropriation that's provided by Congress or often with respect to a specific amount.

[00:17:53] Speaker 02:
They argue that the material disposition appropriation covers this.

[00:17:59] Speaker 02:
Could you address that question please?

[00:18:02] Speaker 00:
Sure.

[00:18:03] Speaker 00:
Let me answer that directly and then I'd like to back up and provide more of an overview of the statute.

[00:18:10] Speaker 00:
But essentially there's no evidence in any of the appropriations legislation

[00:18:16] Speaker 00:
that Congress intended any of the material disposition control line appropriations to be used for making assistance payments.

[00:18:26] Speaker 02:
Isn't there a definition of what material disposition is?

[00:18:33] Speaker 00:
Well material, right, material disposition as what the DOE explained that it would be using the money for and what Congress understood it was appropriating money for.

[00:18:46] Speaker 00:
As we explain in our brief on page 25 is disposing of weapons-grade plutonium and uranium, working with Russia to dispose of surplus weapons-grade plutonium under the US-Russia plutonium disposition agreements, and directing international plutonium management.

[00:19:14] Speaker 00:
Nothing in there is

[00:19:15] Speaker 00:
says anything about assistance payments to South Carolina.

[00:19:19] Speaker 00:
And that's relevant in light of the fact that as we've observed, and there's really no dispute, Congress exercises unusually specific control and direction over the nation's nonproliferation activities.

[00:19:37] Speaker 00:
And so the appropriations that are made to the Department of Energy are very specific.

[00:19:42] Speaker 00:
They are not the sort of

[00:19:45] Speaker 00:
what you may often see with unrestricted funds, you know, in furtherance of the purposes of the agency language like that.

[00:19:55] Speaker 00:
Through the use of these explanatory statements on the tables, Congress has told DOE how it may use its funds and what amounts it may use its funds.

[00:20:08] Speaker 00:
And that fact combined with, you know,

[00:20:12] Speaker 00:
The fact that there's no specific appropriation for economic and assistance payments really demonstrates that Congress did not intend, did not make any appropriations available for this purpose, given the specificity with which Congress restricts DOE's use of funds, and in particular with respect to

[00:20:33] Speaker 04:
But weren't they actually sufficiently specific to say that we're going to build this plant that's going to convert plutonium into something for peaceful uses?

[00:20:50] Speaker 04:
Or alternatively, it's still South Carolina's problem and this is how we're going to compensate the state for

[00:20:59] Speaker 04:
filling the gap unless or until we proceed and succeed in this construction, which has now been abandoned.

[00:21:09] Speaker 04:
So it's trying to get a fix on what this is really all about.

[00:21:16] Speaker 04:
in terms of the obligations, undoubtedly there must be heavy continuing costs to preserve the remaining large amounts of radioactive plutonium in the state.

[00:21:31] Speaker 04:
And isn't the fundamental question that of absorbing those expenses?

[00:21:41] Speaker 00:
Those, the expenses of storage, the overhead that is involved in, you know, securing this material and on the federal facility are costs that are borne entirely by the federal government and the taxpayer.

[00:22:00] Speaker 00:
I think, again, it's important to go back to, and I want to strongly disagree with the characterization of the assistance payments as any kind of storage costs or rental costs.

[00:22:10] Speaker 00:
They simply are not.

[00:22:12] Speaker 01:
What were they?

[00:22:14] Speaker 01:
This is Judge Wallach.

[00:22:16] Speaker 01:
What was the purpose of those payments?

[00:22:20] Speaker 00:
The purpose of the payments, and this is from the 2005, some of the 2005 legislative history that's referenced on page six of the trial court's opinion, but essentially it was reassurance.

[00:22:40] Speaker 00:
It was reassurance to the state that it would not become a, what it considered, what it feared to be a permanent dumping ground for the nation's plutonium material.

[00:22:55] Speaker 00:
And so the inclusion of the assistance payments in the statute was a political compromise to the state of South Carolina to ensure that there was congressional oversight and a mechanism to,

[00:23:11] Speaker 00:
You know, keep DOE on the right path.

[00:23:15] Speaker 00:
There was nothing.

[00:23:16] Speaker 01:
Ms.

[00:23:17] Speaker 01:
Hogan, that brings up what I asked your opposing counsel.

[00:23:23] Speaker 01:
Why did the South Carolina delegation make that change?

[00:23:27] Speaker 01:
It must have been something to benefit them.

[00:23:32] Speaker 00:
Your Honor, I think, again, as best as we can see,

[00:23:37] Speaker 00:
What Senator Graham said was that it was intended as a technical correction.

[00:23:43] Speaker 02:
And given... Was there a proposal to repeal the provision entirely at that time?

[00:24:01] Speaker 00:
Not to my understanding, I think some of what happened in 2005 and subsequently was that the statutory deadlines for meeting the certain milestones were revised into the future.

[00:24:15] Speaker 00:
So there was this technical correction that was made to subsection D1.

[00:24:21] Speaker 00:
That technical correction was not made to subsection D2, which refers to the secretary's obligations post 2022.

[00:24:31] Speaker 00:
That portion of the statute continues to use what the trial court characterized as broader language from funds available to the secretary.

[00:24:43] Speaker 00:
Given the, you know, to answer the court's question, we don't have any more insight into why that change was made.

[00:24:52] Speaker 00:
What we can say is that given Congress's use of very well understood language, language that is

[00:24:59] Speaker 00:
I don't think anyone is arguing, it is language that is more restrictive than the language that was previously used in the statute.

[00:25:10] Speaker 00:
And that should mean something.

[00:25:21] Speaker 04:
Well, it's troubling just to try and think about the events here and how they were reflected in the legislation.

[00:25:31] Speaker 04:
It looks as if nothing has changed in that South Carolina is still the repository for substantial amounts.

[00:25:41] Speaker 04:
of radioactive material that an extremely ambitious and expensive project to reprocess that material has been abandoned and that nothing really has changed from the initial situation which led to this legislation in the first place.

[00:26:04] Speaker 04:
And yet, on the one hand, we now see what looks like a total disclaimer of a legislative obligation that, at the time, I think was considered to be quite significant.

[00:26:22] Speaker 04:
for the state to be told, we don't owe you anything, go away, doesn't seem to fit with any of the pattern of the public or private intent or understanding when this was begun.

[00:26:36] Speaker 04:
So what do we make of all that?

[00:26:39] Speaker 00:
Well, Your Honor, the federal government and the Secretary of Energy have never told South Carolina to go away.

[00:26:45] Speaker 00:
What we have said is that their solution to their problem lies with Congress.

[00:26:50] Speaker 00:
which has not made appropriations available.

[00:26:53] Speaker 00:
We are not disputing that had Congress made appropriations available for this purpose, that the United States would be liable in the amount of that appropriations.

[00:27:04] Speaker 00:
The problem is that Congress, through both a lack of a specific appropriation for this purpose and the purpose restrictions it's placed on DOE's appropriations, has demonstrated that it is not intent

[00:27:18] Speaker 00:
to have the secretary make these appropriations.

[00:27:21] Speaker 00:
And unless and until Congress does so, the United States doesn't have liability under the statute and under our understanding of the subject to the availability appropriations conditioning language.

[00:27:34] Speaker 04:
Well, why wasn't there ratification of the state's understanding of the arrangement of the legislation when the government did move one ton from South Carolina to Nevada?

[00:27:57] Speaker 00:
Well, I think if I understand your question, the removal of the one ton was

[00:28:03] Speaker 00:
in order to enforce the Secretary's obligations under subsection C of the statute, which refer to different timelines and different obligations than the obligations in subsection D, which reference the impact and assistance payments.

[00:28:27] Speaker 04:
not deeply intertwined all of these conditions in the document and the arrangement that was made, the arrangement that didn't work because the facility for reprocessing failed for whatever reason.

[00:28:45] Speaker 04:
It was all one contract, settlement of all one situation, and that is now however many years this is after the atomic energy product started, where we restore these radioactive materials.

[00:29:08] Speaker 00:
Well, both subsection C and subsection D, the obligations there again relate to,

[00:29:15] Speaker 00:
the MOCS production objective.

[00:29:18] Speaker 02:
You're not saying that the statute didn't create an obligation to pay.

[00:29:23] Speaker 02:
You're just saying the statute, by its own terms, had an obligation to pay only if there was available appropriations.

[00:29:30] Speaker 02:
And you say Congress didn't appropriate the money, right?

[00:29:35] Speaker 00:
That's exactly it.

[00:29:36] Speaker 00:
We are not disputing.

[00:29:37] Speaker 00:
We've never disputed that the first condition that the MOCS production objective was not met by January 1, 2016.

[00:29:45] Speaker 00:
and still has not been met.

[00:29:46] Speaker 00:
We've never disputed that.

[00:29:49] Speaker 00:
The question is really looking at the appropriations that Congress has made and whether any of them are available for the purpose.

[00:30:01] Speaker 04:
What's your answer to the argument of the state that this is just a line item and when you look at the magnitude of the defense budget, not a very big line item,

[00:30:13] Speaker 04:
and that appropriations aren't made item by item, that this was an obligation undertaken by the government, by statute, and the money is there within the department.

[00:30:30] Speaker 04:
It's a matter of allocating it to meet this contractual obligation with the state.

[00:30:39] Speaker 00:
This is not a contractual obligation, Your Honor.

[00:30:42] Speaker 00:
It's a statutory one.

[00:30:43] Speaker 00:
But to more specifically answer your question, again, the problem that we have here is that Congress has restricted, Congress has not given DOE a lump sum amount that is unrestricted.

[00:31:06] Speaker 00:
and may be used at DOE's discretion to meet its various obligations.

[00:31:11] Speaker 00:
It is very specifically limited, both the purpose and the amount that may be used for any specific purpose.

[00:31:18] Speaker 00:
And the closest that South Carolina gives is to the material disposition control line, which again, so for example, in 2016, Congress appropriated only $86 million for that entire program

[00:31:35] Speaker 00:
And that would clearly be insufficient to meet the $100 million that South Carolina would otherwise be entitled to.

[00:31:45] Speaker 00:
That further demonstrates why it's not reasonable to read that control line as encompassing economic and assistance payments because it would completely swallow that control line.

[00:31:59] Speaker 00:
And given that DOE has to make,

[00:32:01] Speaker 00:
yearly reports to Congress specifically about the MOCS program, whether the production objective is met.

[00:32:08] Speaker 00:
Congress is probably unusually aware and its oversight is unusually close in this particular program and in the nation's non-proliferation activities more generally.

[00:32:24] Speaker 00:
It's not reasonable to read that control line as covering these assistance payments in light

[00:32:32] Speaker 00:
that unusual restrictions that Congress has placed on DOE's appropriations.

[00:32:38] Speaker 02:
Where does that control line appear in the record?

[00:32:42] Speaker 00:
So for the two, the actual tables are found on pages 613 and 669 of the appendix.

[00:32:53] Speaker 00:
That's the 2016 and the 2017 appropriation acts.

[00:33:05] Speaker 02:
Where, take 613, where's the control line here?

[00:33:09] Speaker 00:
So on page 613.

[00:33:22] Speaker 02:
Material management and minimization.

[00:33:26] Speaker 00:
Right.

[00:33:26] Speaker 00:
And then you further go down until, so that's the control line, and then each of the programs

[00:33:35] Speaker 00:
projects or activities that are underneath that include, I'm sorry, I'm still trying to find the page, but I think it includes, you know, the highly enriched uranium is the first line, and then there's nuclear material.

[00:33:53] Speaker 00:
I'm sorry, let me just find the page and then I can more specifically answer the court's question.

[00:34:14] Speaker 00:
Okay, so right, if the court looks at page 613.

[00:34:21] Speaker 02:
It's the material disposition line.

[00:34:35] Speaker 00:
Right, so you have material management and minimization is the, and then underneath those are the three,

[00:34:42] Speaker 00:
And then the third one is material disposition and for that year you can see that the amount that was appropriated for that program was $86.5 million for material disposition.

[00:34:56] Speaker 04:
So the government's position is that this really is a political question that requires a political legislative remedy to that the correct interpretation of that subject to appropriations is that the purported obligation need not be met if

[00:35:22] Speaker 04:
Appropriations are not made, which takes us into acts of Congress in the political arena?

[00:35:29] Speaker 00:
I think what we're saying is two things.

[00:35:32] Speaker 00:
One is that the ultimate relief that South Carolina is seeking is one that, in light of the appropriations that have been made, it's a remedy that it needs to seek directly from Congress.

[00:35:46] Speaker 02:
I would have thought the answer to that question was yes.

[00:35:48] Speaker 00:
Well, I think the second answer is that to the extent that what South Carolina is asking the court to do is to wade into whether assistance payments further the nation's

[00:36:04] Speaker 00:
non-proliferation strategy or would help accomplish?

[00:36:07] Speaker 04:
No, they're not.

[00:36:08] Speaker 04:
They're just saying they had a deal, they have legislation, and that they're entitled to have that statutory obligation fulfilled.

[00:36:19] Speaker 04:
That isn't very different from many suits against the government in the court of federal claims, an obligation that may or may not have been met.

[00:36:32] Speaker 04:
not for the court to undertake the underlying policy determination.

[00:36:40] Speaker 00:
Right.

[00:36:40] Speaker 00:
And we agree that this court can decide a question by looking at the appropriations that have been made available and seeing if any of them are available for the purpose.

[00:36:51] Speaker 00:
And we believe that on the face that the lack of a specific appropriation and the unique structure of the restrictions placed on the appropriations answers that question.

[00:37:04] Speaker 00:
I think our concern is to the extent that South Carolina is asking the court to look at a particular control line and see, you know, how much of that can be given to South Carolina

[00:37:19] Speaker 00:
of this statutory obligation as opposed to other statutory and international obligations that the Department of Energy has to manage and dispose of weapons-grade material that really would get very close to wading into the waters that are reserved for Congress and for the executives.

[00:37:43] Speaker 01:
Ms.

[00:37:43] Speaker 01:
Hogan, this is Judge Wallach.

[00:37:46] Speaker 01:
Speaking of political questions,

[00:37:48] Speaker 01:
I'm curious whether there's any example of an agreement with which the Department of Energy or the United States has made with a state in order to get it to accept highly enriched uranium in which the program has been successful, the underlying disposal program.

[00:38:15] Speaker 00:
I do not know the answer to that question, Your Honor.

[00:38:19] Speaker 00:
Again, I think I'm not sure that the United States was required to have an agreement with South Carolina in order to store these materials at a federal facility.

[00:38:36] Speaker 00:
Again, I think that what was reached in the statute was a political assurance to the states.

[00:38:46] Speaker 00:
But to answer your Honor's question directly, I don't have the answer to that.

[00:38:54] Speaker 04:
Okay.

[00:38:54] Speaker 04:
Any other questions for Ms.

[00:38:56] Speaker 04:
Hogan?

[00:38:58] Speaker 04:
From the panel?

[00:38:59] Speaker 01:
Judge Wallach, no.

[00:39:01] Speaker 04:
All right.

[00:39:02] Speaker 04:
Thank you.

[00:39:03] Speaker 04:
Mr. Roberts, you have your rebuttal time.

[00:39:07] Speaker 03:
Thank you, Your Honor.

[00:39:08] Speaker 03:
I want to hit on that last point from opposing counsel.

[00:39:12] Speaker 03:
I mean, they acknowledge that

[00:39:14] Speaker 03:
The reason these obligations were put in to the statute was to reassure or assure South Carolina that the plutonium we moved out, it was, it was done to obtain the state's acquiescence to this at the time preferred disposition policy.

[00:39:30] Speaker 03:
The record is undisputed on that.

[00:39:33] Speaker 03:
Um, now they're saying, even though the obligations were put in place to further the disposition policy, when we come to enforce those obligations,

[00:39:44] Speaker 03:
They have absolutely no relationship to disposition.

[00:39:49] Speaker 01:
That's their... Counsel, this is Judge Walling.

[00:39:52] Speaker 01:
Yeah, I don't think your statement is actually correct.

[00:39:56] Speaker 01:
My understanding of what was done is that an agreement was made to build a facility which would in effect dilute

[00:40:11] Speaker 01:
the high-enriched uranium and making it into something more palatable.

[00:40:17] Speaker 01:
And the state of South Carolina accepted that in part because it was a benefit to the state to have a high-tech facility located in South Carolina.

[00:40:28] Speaker 01:
Is that not correct?

[00:40:29] Speaker 01:
It wasn't about bringing it in and moving it out.

[00:40:34] Speaker 03:
I agree partially with that, Your Honor.

[00:40:37] Speaker 03:
There were two purposes.

[00:40:39] Speaker 03:
with respect to South Carolina.

[00:40:41] Speaker 03:
One, you are correct.

[00:40:43] Speaker 03:
It was to get the benefit of the notch facility, which if you look at, um, the 2003 national authorization act, a defense authorization ad that enacted what ultimately became section 25, uh, 66 count Congress outlines in section 31 81, the purposes of the statute and there it recognizes for South South Carolina,

[00:41:05] Speaker 03:
uh... it wants the benefit of the mosque facility if it was built but then there is an also there's another purpose and it's protect south carolina and compensate south carolina uh... for having to store this plutonium within the state especially if the deadlines of the statute are not met that's why the the the assistance payment is put in there it was the you know

[00:41:30] Speaker 03:
debate to get South Carolina to agree to all this.

[00:41:33] Speaker 03:
It's economic and impact assistance.

[00:41:37] Speaker 03:
And now we come to enforce the statute and they say there's no relationship to disposition.

[00:41:44] Speaker 03:
And to be clear, the government agrees that you have to look to see whether any of the appropriations available, that those purposes align with the economic assistance payments.

[00:41:53] Speaker 03:
So it cannot just stop

[00:41:54] Speaker 03:
because Congress appropriated only at a program level, which they've done here and they often do.

[00:42:00] Speaker 03:
You have to drill down and look at an appropriation.

[00:42:04] Speaker 03:
And we have done that.

[00:42:05] Speaker 03:
We have pointed to the material disposition appropriation.

[00:42:10] Speaker 02:
And the description of the material disposition appropriation doesn't seem to include this.

[00:42:16] Speaker 02:
If you look at page 598, which is the description of that,

[00:42:23] Speaker 03:
Well, there are two points to that.

[00:42:27] Speaker 03:
One is that description that's incorporated by Congress largely comes from the Department of Energy.

[00:42:34] Speaker 03:
Those specific items in the explanatory tables, the project programs and activities, the PPAs, that's largely derived from the budget request from the Department of Energy.

[00:42:48] Speaker 02:
So, what you have to prove, and that's at 776.

[00:42:52] Speaker 02:
But that doesn't mean that it's not informative as to what material management minimization is.

[00:43:00] Speaker 03:
I agree.

[00:43:01] Speaker 03:
But what it also is informative is operative statute and Congress enacting and making an authorized function of the assistance payments.

[00:43:12] Speaker 03:
And that's what gets a little lost in the necessary expense doctrine.

[00:43:15] Speaker 03:
There's one where you look to see if the specific expenditure fits within the purposes, but the related

[00:43:22] Speaker 03:
part of that analysis is whether there is an authorized function for which more general appropriations are available to meet.

[00:43:32] Speaker 03:
And here, through Section 2566, Congress made the assistance payments an authorized function of the disposition program.

[00:43:42] Speaker 03:
Congress decided that.

[00:43:43] Speaker 03:
It's evident from the title of the statute, the purposes, and the plain language that Congress made it

[00:43:53] Speaker 03:
an authorized function of that program.

[00:43:56] Speaker 03:
Now there are appropriations available for that program and the law has never been and it is not that there has to be a specific appropriation here for that expenditure.

[00:44:11] Speaker 03:
That is the reason the necessary expense doctrine exists for this common situation.

[00:44:17] Speaker 03:
when you have a statutory obligation or some other expenditure for which there is not a specific line item appropriation.

[00:44:25] Speaker 03:
You go and make the determination whether there are other appropriations that this expenditure could be paid with.

[00:44:32] Speaker 03:
And those available appropriations are ones that can be made if by making them you do not violate the purpose statute.

[00:44:41] Speaker 03:
And the GAO, which this court, the Supreme Court, relies on an expert opinion, who is the expert in appropriations law, has laid out the test for when you can tell if something violates the purpose statute.

[00:44:56] Speaker 03:
And that is a necessary expense doctrine.

[00:44:58] Speaker 03:
You determine whether that appropriation has a logical or reasonable relationship to the expenditure.

[00:45:06] Speaker 03:
And then you also look to see in the Appropriations Act, did Congress

[00:45:10] Speaker 03:
specifically restrict or prohibit the Department of Energy here from making those payments.

[00:45:16] Speaker 03:
And it did not.

[00:45:17] Speaker 03:
There is nothing in the appropriation that specifically says, Department of Energy, you are not able to make those payments.

[00:45:25] Speaker 03:
You are not able to meet your 2566 obligations.

[00:45:30] Speaker 03:
And because of that, the material disposition appropriations, and there were more than enough each year appropriations available

[00:45:39] Speaker 03:
In that material disposition program, if you count carryovers, which the government recognizes we can, for 2016 there was close to $170 million available in the material disposition program after you specifically take into account the specific congressional earmarks or other restrictions.

[00:46:00] Speaker 03:
And then for 2017 with the carryovers, there's close to $155 million available to the department.

[00:46:07] Speaker 03:
And that's the question.

[00:46:08] Speaker 03:
were the appropriations legally available to the department to meet this statutory obligation?

[00:46:18] Speaker 03:
That's all the section 2566 requires.

[00:46:23] Speaker 03:
And that has been met here.

[00:46:26] Speaker 03:
Um, you can now read in the section 2566 more language, um, than what it says.

[00:46:31] Speaker 03:
It just says,

[00:46:33] Speaker 03:
Department of Energy, you have to make this payment if you have appropriations legally available to it.

[00:46:39] Speaker 03:
The department here decided to ignore that.

[00:46:43] Speaker 03:
They decided not to tell Congress that they needed additional appropriations to make these payments, even knowing that obligation become due.

[00:46:50] Speaker 03:
And the undisputed record is they did not tell Congress that the plutonium would not be removed from the state in each of the years at issue.

[00:46:59] Speaker 03:
And that's what triggers the payments.

[00:47:01] Speaker 03:
So there's the clear reason here, based on the Unispeed record, why Congress did not give a specific appropriation.

[00:47:08] Speaker 03:
But that does not end the inquiry.

[00:47:10] Speaker 03:
You have to go further.

[00:47:12] Speaker 03:
And I believe my time's up.

[00:47:14] Speaker 04:
Is there any more questions for Mr. Roberts?

[00:47:16] Speaker 01:
No.

[00:47:17] Speaker 01:
Judge Wallach, no.

[00:47:19] Speaker 04:
Okay.

[00:47:19] Speaker 04:
Thank you.

[00:47:20] Speaker 04:
Thanks to both counsels.

[00:47:22] Speaker 04:
The case is taken under submission.

[00:47:24] Speaker 03:
Thank you.

[00:47:25] Speaker 03:
The Honorable Court is adjourned until tomorrow morning at 10 a.m.