As the nuclear energy sector enters a period of renewed growth, companies face a complex array of legal, regulatory, and operational challenges. From liability frameworks governing radiation exposure to evolving enforcement under the False Claims Act, organizations must account for heightened scrutiny and shifting risk landscapes. Concurrently, developments in employee benefits, IP protections, and AI integration add layers of regulatory and contractual complexity. For entities involved in nuclear development, innovation and compliance must go hand in hand—requiring vigilance not only in legal structuring but also in operational practices.
This article based on our webinar Legal Issues Beyond Regulation in the Nuclear Industry outlines key areas of legal exposure and emerging trends that companies should consider when navigating risk in today’s rapidly evolving nuclear industry.
Throughout the first half of 2025 the federal government has shown a renewed and resolute commitment to expanding nuclear energy across the United States. However, the risk of third-party claims for personal injury or property damage remains a top concern for companies in the sector. The Price-Anderson Act, initially enacted by the US Congress in 1957, helps address this risk by creating a federal liability framework that limits financial exposure while ensuring compensation for the public in the event of a nuclear incident.
A “nuclear incident” is defined under the act as any occurrence, including accidents, that results in bodily injury, sickness, disease, death, or property damage arising from the radioactive, toxic, or hazardous properties of nuclear material.
This definition has been the subject of significant litigation over the years as courts have examined what qualifies as a covered event under the statute. Still, when a nuclear incident occurs, the act centralizes jurisdiction in federal courts, preempts certain state law claims, and provides indemnification for NRC licensees and US Department of Energy contractors, either by statute or through contract.
Yet, federal preemption under the act is increasingly unsettled. In Cook v. Rockwell International Corp., the court allowed state tort claims for exposure that did not rise to the level of a nuclear incident. More recently, in Mazzocchio v. Cotter Corp., the court likewise held that certain state law claims were not preempted, though a petition for US Supreme Court review is currently pending.
Given the evolving legal landscape, it will be important to closely monitor developments in key cases and how the federal courts continue to interpret the scope of federal preemption under the Price-Anderson Act. With a growing split between the Eighth and Tenth Circuits and other jurisdictions, the outcomes of these cases may significantly influence liability exposure and the uniformity of legal protections for companies engaged in nuclear activities.
False Claims Act (FCA) enforcement continues to expand into the nuclear energy sector, with the US Department of Justice and agency inspectors general pursuing a growing number of investigations and settlements involving allegations of fraud, misrepresentation, and regulatory noncompliance.
The FCA imposes liability for knowingly submitting false claims to the government and can result in treble damages and civil penalties for violators. In many cases, enforcement is driven by whistleblowers, who may receive a share of any government recovery and are protected under the FCA’s anti-retaliation provisions.
Several recent cases highlight the types of conduct that commonly attract whistleblower complaints and government scrutiny, underscoring the broad scope of potential FCA exposure. In United States v. Pharmalogic Holdings, nine subsidiaries were alleged to have falsely certified small entity eligibility for reduced NRC licensing fees over an eight-year period.
In United States v. Consolidated Nuclear Security, the company paid $18.4 million following self-disclosure of employee timecard fraud involving a National Nuclear Security Administration site, with the damages significantly reduced due to the company’s prompt disclosure, cooperation with investigators, and remedial actions.
These matters often involve coordination across multiple investigative bodies, including agency inspectors general and military branches, and span several years. Notably, DOJ recently revised its voluntary self-disclosure policy to further incentivize self-reporting, offering full declinations to companies that timely disclose, cooperate fully, and undertake appropriate remediation. Even in cases where a full declination is unavailable, new guidance allows for significantly reduced penalties under non-prosecution agreements.
As scrutiny and broader FCA application continue to increase in the nuclear industry, companies should remain vigilant in monitoring internal compliance, conducting timely investigations, and evaluating the potential benefits of early disclosure when misconduct is identified.
While employee benefits are not unique to the nuclear industry, companies operating in this space (especially those engaged in government contracting) must navigate a layered and shifting regulatory environment. Benefits encompass more than executive compensation, extending to traditional offerings such as health insurance, retirement plans, and paid leave as well as nontraditional perks such as tuition reimbursement, student loan assistance, and wellness programs. Tax efficiency remains a key driver, with many benefits providing deferred or exempt treatment for employees and deductions for employers.
The regulatory landscape governing these plans is both broad and fragmented. Health and retirement benefits are subject to oversight by the Internal Revenue Service, the US Department of Labor under ERISA, and in some cases the Equal Employment Opportunity Commission, National Labor Relations Board, and Securities and Exchange Commission.
Frequent policy shifts tied to administration changes can also create regulatory whiplash. Recent developments include reversals of mental health parity enforcement and Affordable Care Act–related nondiscrimination rules as well as renewed regulatory focus on cybersecurity and evolving rules governing investment alternatives such as cryptocurrency and ESG-focused options.
Litigation risk is also rising. More than 500 ERISA lawsuits have been filed in the last decade, historically centered on 401(k) plan costs and fiduciary breaches. Recently, plaintiffs have expanded claims to include welfare benefit plans, targeting administrative processes, tobacco surcharges, and pharmacy benefits. A recent Supreme Court ruling in Cunningham v. Cornell further increases litigation exposure by lowering the pleading standard for allegations of prohibited transaction violations, making early dismissal more difficult.
For nuclear sector employers, staying ahead of benefit plan compliance—particularly in light of shifting fiduciary obligations and heightened litigation trends—is increasingly critical.
As innovation accelerates across the nuclear energy sector, including advancements in small modular reactors and Generation IV designs, having robust IP protections has become increasingly important. While the mechanics of securing patents, trademarks, and copyrights follow standard procedures, the sensitive nature of nuclear technologies introduces unique legal and procedural considerations.
IP in the nuclear industry largely falls into two main categories: registered (patents, trademarks) and unregistered protections (trade secrets, proprietary designs, confidential business information). Given the highly technical and competitive landscape, safeguarding both is essential.
Applicants must navigate several nuclear-specific protocols when filing patents. Under US export control laws, inventions made domestically must first be filed with the US Patent and Trademark Office before seeking protection abroad. Failure to obtain a foreign filing license can result in patent invalidation. In some cases, inventions are subject to a secrecy order by the USPTO’s Licensing and Review Division, which receives input from Department of Energy and Department of Defense stakeholders.
On the positive side, technologies related to energy, including nuclear, may qualify for accelerated examination under the USPTO’s “petition to make special” program, potentially reducing wait times to first examination from over 18 months to just 60 to 90 days.
As global filings increase (35,000 nuclear-related patents issued worldwide since 2013), companies should not only protect their own innovations but also remain vigilant about third-party IP. Innovation in nuclear technology can trigger litigation, as seen in the Westinghouse v. KEPCO and KHNP case, which centered on the alleged misuse of APR1400 reactor design during international technology transfers.
Perceptions of complex IP regulations can also pose hurdles to collaboration, particularly in cross-border R&D initiatives. Given the layers of domestic and international law, including export controls, foreign filing restrictions, and nuclear cooperation agreements, entities engaged in nuclear development must structure agreements carefully to avoid compliance risks and enable successful deployment.
The rapid expansion of generative AI is transforming industries, including the nuclear sector. Unlike traditional AI, which analyzes data to inform decisions, generative AI creates entirely new content based on the data it is trained on. While these capabilities offer efficiencies, they also introduce legal and operational risk.
Chief among these is confidentiality. Inputting sensitive data into publicly available AI tools can unintentionally expose proprietary or confidential information, which may then be reused to train public models. These tools are also typically cloud-hosted, raising additional concerns over data security and control. Organizations should ensure any platform they engage with has robust safeguards and clearly defined data-use policies to avoid inadvertent disclosure of sensitive information and unauthorized use of proprietary data for model training.
In addition, the intersection of AI and IP remains largely unresolved, presenting a range of legal and practical challenges. AI-generated content may not be eligible for copyright protection, and outputs can inadvertently infringe on existing copyrighted material, especially in marketing or visual content applications. This makes human oversight critical to validating the accuracy and IP compliance of AI-produced outputs.
To address these risks, companies are beginning to incorporate AI-specific provisions into their vendor contracts. Key measures include requiring disclosure of AI use, confirming human review of AI-generated work, and clarifying whether client data may be used to train vendor AI models. These practices help mitigate liability while maintaining transparency over how AI is integrated into services and deliverables.
As AI adoption accelerates, especially in highly regulated industries like nuclear energy, thoughtful governance and contractual clarity will be essential.