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April 20, 2010 5:29 PM

Firms Look to Feed Global Nuclear Ambitions

Posted by Brian Baxter

The Obama administration's decision to cancel plans for a massive nuclear waste facility at Nevada's Yucca Mountain may have complicated hopes for a nuclear energy renaissance in the United States. But a handful of Am Law 100 firms with strong nuclear regulatory practices are betting that the search for clean energy sources and the debate over climate change will lead more countries to embrace the nuclear option.

Morgan, Lewis & Bockius sought to give its leading nuclear regulatory practice a boost last week with the addition in London of Susan Quint, a former general counsel and group legal director for British Nuclear Fuels Limited. Legal Week reports that the move by Morgan Lewis follows a shift by the firm to refocus its practice strengths abroad, especially in the energy sector.

London-based EDF Energy recently selected the Morgan Lewis to help it build 20 new nuclear reactors in the U.K., The Philadelphia Inquirer reports. (EDF is a subsidiary of Paris-based √Člectricit√© de France, the world's largest utility company following its $23 billion merger with British Energy in September 2008.) And Morgan Lewis isn't the only firm looking to other shores for nuclear business.

Pillsbury Winthrop Shaw Pittman energy partner Jay Silberg says his firm has had a partner in London specializing in international nuclear regulatory work for some time. He says the firm's biggest project over the past year has been representing Emirates Nuclear Energy Corporation in Abu Dhabi on its plan to build four new nuclear reactors as part of a contract with a Korean manufacturer valued at $40 billion.

"We had a lot of people over there last year working full time on that project," Silberg says. "And we're advising them on all phases of that work--be it licensing, working with utility companies, or [assisting] vendors with reactor designs--as well as working with other countries that are looking to do similar deals."

Pillsbury, Morgan Lewis, and Winston & Strawn are the top U.S. firms with nuclear regulatory practice groups, Silberg says. Both Pillsbury and Winston competed with Morgan Lewis for a $109 million government contract with the U.S. Department of Energy to advise it on matters related to its proposed nuclear waste disposal site at Yucca Mountain.

As previously reported by The American Lawyer, Morgan Lewis overcame potential conflicts and nabbed the five-year contract from the Energy Department in September 2007. Under the terms of the contract, Morgan Lewis would receive $47.7 million through 2011, with an additional $61.2 million over the next five years, if the government extended the lucrative engagement. 

But that was before the Obama administration unveiled its budget earlier this year, which included cutting funding for the Yucca Mountain project. The Inquirer reports that those cuts effectively ended Morgan Lewis's role representing the Energy Department in the ongoing regulatory process for the proposed facility.

Jay Gutierrez, the head of Morgan Lewis's energy practice and the lead lawyer on the Yucca Mountain work, told the Inquirer that the firm's practice was strong enough to withstand the loss of a contract that could have paid the firm nearly $50 million. "It was a nice assignment, but it hasn't materially affected our practice," said Gutierrez, a former regional counsel for the U.S. Nuclear Regulatory Commission. "We haven't laid anyone off."

Gutierrez, who did not respond to an Am Law Daily request for comment, told the Inquirer that due to conflicts the firm's ability to grow its nuclear regulatory group stateside "was not boundless." With Morgan Lewis having essentially cornered the U.S. market--a fact the firm confronted in its quest for the Yucca Mountain work--Gutierrez said that the new emphasis had to be on growing the practice abroad.

The Inquirer reports that Morgan Lewis built up its nuclear energy group during the lull in the industry brought about by accidents at Three Mile Island in 1979 and Chernobyl in 1986. In recent years, as the demand for energy increased and climate change enthusiasts began to embrace the clean energy promises of nuclear power, the firm was ideally placed to meet new client needs.

Gutierrez hopes that by recruiting Quint in the U.K., where plans for new reactors are in the works, Morgan Lewis will be well positioned to replicate its U.S. success overseas. But it's not only in Europe where nuclear energy is on the rebound. Several U.S. states are tapping federal funds promised by the Bush and Obama administrations to restart their own nuclear initiatives.

With concerns over energy costs and the environment rapidly rising, Pillsbury's Silberg is cautiously optimistic that the sector is poised for a rebound. He notes that his firm's practice group has seen head count increase by 50 percent in recent years, to nearly 30 lawyers.

And while Silberg says he doesn't believe nuclear energy is a "silver bullet" for climate change, he does think some of the deeply entrenched hostility to the industry is thawing. "Those against it will say that we can't possibly build enough nuclear reactors to make a difference," Silberg says. "But if we don't start, we won't build any. And had we been building them all along, we would be much better off today than we are."

The National Law Journal, a sibling publication, reported last month that the looming shutdown of Yucca Mountain has triggered a litigation explosion. Four civil suits have already been filed seeking to prevent the Obama administration from following through on scuttling the project.

The state of Washington became the latest plaintiff to file suit last week, joining the state of South Carolina, Aiken County, S.C., and a group of individuals living near the highly contaminated Hanford nuclear site near the Tri-Cities area of Washington, each of whom oppose the president's order pulling a license for the radioactive waste dump 100 miles northwest of Las Vegas.

Most of the plaintiffs are furious that nuclear waste stored in their respective regions--the Hanford facility in Washington contains nearly two-thirds of the nation's hazardous defense-related nuclear waste--will now remain where it lies.

Lawyers familiar with the dispute--and there are many padding their billables on Yucca Mountain-related litigation--say that a thicket of motions seeking preliminary injunctions in the various court cases and a pending ruling by the Nuclear Regulatory Commission are further clouding the future of the Yucca Mountain project. Sibling publication the Blog of Legal Times reported last week that the Energy Department has proposed postponing the Yucca Mountain shutdown for 21 days to deal with the litigation.

(Barry Hartman, an environmental litigation partner with K&L Gates in Washington, D.C., is advising the Hanford plaintiffs. Assistant attorneys general Andy Fits and Todd Bowers are representing the state of Washington in its suit. Kenneth Woodington, of counsel with Columbia, S.C., firm Davidson & Lindemann, is representing the state of South Carolina, while Thomas Gottshall of South Carolina's Haynsworth Sinkler Boyd is advising Aiken County. The Justice Department is handling matters for the federal government.)

Despite the uncertainty surrounding the Yucca site, Pillsbury's Silberg says the new nuclear energy race has just begun.

"Yucca won't derail the nuclear renaissance," he says. "We knew Yucca was coming, because [Obama] talked about it on the campaign. But he's said a lot which is favorable towards nuclear energy, [the administration] has helped with loan guarantees, and the new members they've nominated to the NRC are quite promising."

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