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When time is money: State and medical isotope maker take case to judge

AUSTIN — Officials at the Texas Department of State Health Services have been patient, but they also told a judge Tuesday that six years was long enough to wait. 

In a special hearing Tuesday afternoon, state officials told the judge that their decision to deny a manufacturing license to U.S. Radiopharmaceuticals should stand. The Denton manufacturing plant, shuttered since 2009, hasn't been able to raise the money needed to reopen after all these years, they said. 

Denton attorney Adam Whitten, who represents USR, called the state's level of patience "saintly," but he also told the judge that there would be no harm in giving the company more time. 

He pointed to the company's nearly decade-long history of compliance with state rules in storing radioactive waste as evidence of its respect for Texas' rules and regulations. 

"There is no risk to the public and there is no harm in keeping the [license] application open," Whitten said. "We're just asking to keep it open." 

Whitten said denying the application now would hurt the company's efforts to secure the financing it needs to reopen the plant. 

The two sides presented their case to a state administrative law judge, a special kind of state judge who hears disagreements over the enforcement of state rules. After a 90-minute hearing, the judge, Fernando Rodriguez, said he would write a proposal for a decision as soon as possible, within 60 days. 

The proposed decision then goes to the head of the Texas Department of State Health Services for a final ruling. If the judge and the health commissioner agree to deny the license, a new deadline looms. USR would have one year to clean up the radioactive waste being stored at the two plant facilities, on Shady Oaks Drive and Jim Christal Road in Denton. 

Karl VanAhn, the sole witness for the hearing Tuesday, said none of the radioactive waste poses an immediate public health concern. State inspectors check the site, including the waste drums, periodically to make sure everything is secure and that there is no additional, measurable radiation off site from either facility.  

Both state officials and USR told the judge they believed it would cost between $2.2 million and $2.5 million to clean up the plant, which includes disposing of the waste in the drums, the equipment and the affected parts of the buildings. 

Trace Life Sciences, which used to manufacture medical radioisotopes for diagnosing disease and treating cancer, closed its Denton facilities in 2009 after its financial backing went into federal receivership. A Utah company, NuView Life Sciences, plucked the properties out of receivership, and U.S. Radiopharmaceuticals, a wholly owned subsidiary of NuView, formally applied for a license to reopen the plant in 2012. 

The company had permission from the Texas Department of State Health Services to continue to store the radioactive waste while it sought a new license. 

The state's attorney, Stacey McLarty, painstakingly outlined the communication between the state and the company over the past six years for the judge Tuesday afternoon. State officials first told USR they would be denying the application in mid-2015. USR wrote and asked for an extension, saying that it expected to close on its financing by December 2015. 

Then, in January 2016, USR wrote again asking state officials to hold the application until March. In September 2016, state officials issued the formal notice of violation, setting the wheels into motion that led to Tuesday's hearing. 

The state's case was simple, McLarty said. The company had six years to raise enough money to put up a bond or other financial instrument to guarantee that, even if the company went out of business, the radioactive waste could be cleaned up. 

Since it had not, "that was sufficient to deny the application," McLarty said. "And with denial comes responsibility to remediate." 

Whitten told the judge that USR has worked incredibly hard to raise the money it needs, including the funding needed to guarantee the cleanup. If the state keeps the license application open, that keeps other risks at bay, Whitten said. 

"You don't have to risk going into the decommissioning fund," Whitten said. 

The state has a special fund to clean up low-level radioactive waste. According to the state comptroller, that fund contained $28 million as of Aug. 31, 2017. 

McLarty told the judge that the state dips into that fund as a last resort, when no other responsible parties can be identified. In addition, there is another state process for paying for remediation, she said. 

"You won't be deciding that today," McLarty said.

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881.