ML14174B051
| ML14174B051 | |
| Person / Time | |
|---|---|
| Site: | Aerotest |
| Issue date: | 06/23/2014 |
| From: | Jeremy Wachutka NRC/OGC |
| To: | Atomic Safety and Licensing Board Panel |
| SECY RAS | |
| References | |
| 50-228-LT, ASLBP 14-931-01-LT-BD01, RAS 26111 | |
| Download: ML14174B051 (10) | |
Text
June 23, 2014 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE PRESIDING OFFICER ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
)
AEROTEST OPERATIONS, INC. ) Docket No. 50-228-LT
)
(Aerotest Radiography and )
Research Reactor) )
NRC STAFF MOTION IN LIMINE TO EXCLUDE PORTIONS OF THE COMPANIES INITIAL STATEMENT OF POSITION AND PRE-FILED DIRECT TESTIMONY INTRODUCTION Pursuant to 10 C.F.R. § 2.1325 and 10 C.F.R. § 2.319(d)-(e), the U.S. Nuclear Regulatory Commission (NRC) staff (Staff) requests that the Presiding Officer exclude, as irrelevant and immaterial, two out-of-scope arguments presented by Aerotest Operations, Inc.
(Aerotest) and Nuclear Labyrinth, LLC (Nuclear Labyrinth) (collectively the Companies) in their Initial Statement of Position and the pre-filed direct testimony of Michael S. Anderson.1 Specifically, the Staff requests the exclusion of particular lines from these filings as described below and as illustrated in the redline-strike-out excerpts of these filings attached to this motion.2 As certified below, counsel for the Staff attempted to resolve the issues raised in this 1
Aerotest Operations, Inc. and Nuclear Labyrinth, LLC Initial Statement of Position in the Hearing on the Denial of Indirect License Transfer Application (June 13, 2014) (The Companies Initial Statement of Position); Pre-Filed Direct Testimony of Michael S. Anderson Regarding the Operational Status and Historical Commercial Activities of the Aerotest Radiography and Research Reactor (ARRR) and Funding Agreement with Nuclear Labyrinth, LLC (June 13, 2014) [Exhibit AOI100].
2 Since these excerpts potentially contain proprietary information, they are being filed separately as part of a non-public submission. See NRC Staff Attachment 1 (Redline-Strike-Out Excerpts of the Companies Initial Statement of Position); NRC Staff Attachment 2 (Redline-Strike-Out Excerpts of the Pre-Filed Direct Testimony of Michael S. Anderson (Exhibit AOI100)).
motion with counsel for the Companies. Counsel for the Companies indicated that the Companies would oppose this motion and would respond to the motion when it is filed.
BACKGROUND On May 22, 2014, the Presiding Officer issued a Memorandum and Order Ruling on Admissibility of Areas of Controversy.3 This Memorandum and Order concluded, in part, that the following two areas of controversy alleged by the Companies were outside the scope of this proceeding: (1) whether it is inappropriate for the Staff to deny this license transfer application for insufficient funding when that determination is attributable to the Staffs own actions, which caused Aerotest to be left without either current revenue or current contracts or commitments and (2) whether the Staff improperly seeks to impose foreign ownership, control [or] domination (FOCD)-related conditions on financial support arrangements made by Nuclear Labyrinth.4 The Presiding Officer determined that these areas of controversy were outside the scope of the proceeding because [t]he former . . . is not relevant to the Staffs denial of the license transfer, and the latter . . . was not a basis for denying the license transfer application.5 On June 13, 2014, the Companies filed their Initial Statement of Position and the pre-filed direct testimony of Michael S. Anderson. These documents included information directly related to the two areas of controversy specifically excluded by the Presiding Officer as outside of the scope of this proceeding.
DISCUSSION While the strict rules of evidence do not apply to written submissions, the Presiding Office may on motion or on the presiding officers own initiative, strike any portion of a written presentation or a response to a written question that is irrelevant, immaterial, unreliable, 3
Memorandum and Order (Ruling on Admissibility of Areas of Controversy) (May 22, 2014)
(Agencywide Documents Access and Management System (ADAMS) Accession No. ML14142A237)
(Memorandum and Order).
4 Id. at 3.
5 Id. at 3-4.
duplicative or cumulative, and may [r]estrict irrelevant, immaterial, unreliable, duplicative or cumulative evidence and/or arguments. 10 C.F.R. § 2.319(d)-(e). In their Initial Statement of Position and the pre-filed direct testimony of Michael S. Anderson, the Companies presented two arguments that fall within the areas of controversy that the Presiding Officer had previously determined were outside of the scope of this proceeding. Therefore, the Staff requests that the Presiding Officer exercise his powers to exclude these arguments and the information relating to them on the grounds that this information is not relevant or material to the findings that the Commission must make because it is not within the scope of this proceeding.6 First, the Staff requests that the Presiding Officer exclude the portions of the Companies Initial Statement of Position in which they argue that their insufficient showing of funds to cover the total annual operating costs for each of the first five years of operation of the Aerotest Radiography and Research Reactor (ARRR) was in part due to the fact that the NRC Staff . . . compelled Aerotest to shut down the ARRR . . . .7 This argument is irrelevant and immaterial because, as previously explained by the Presiding Officer in the Memorandum and Order, it is outside of the scope of this proceeding. Specifically, the areas of litigable controversy in this proceeding are those conclusions and supporting reasons relied upon by the Staff for denying the Companies indirect license transfer application.8 In other words, the issue in this proceeding is whether the Staff properly applied the Atomic Energy Act of 1954, as amended (AEA), and the Commissions regulations, guidance, and case law to the facts and circumstances as they existed at the time of the Staffs denial of the indirect license transfer 6
See, e.g., Louisiana Energy Services, L.P. (National Enrichment Facility), LBP-05-13, 61 NRC 385, 400-01 (2005) (striking certain portions of pre-filed testimony that were found to be outside of the scope of the proceeding in response to motions in limine).
7 The Companies Initial Statement of Position, at 31. See NRC Staff Attachment 1.
8 Memorandum and Order, at 3.
application.9 How these facts and circumstances came to be is not relevant to the Staffs denial of the application. Therefore, the Companies argument to the effect that their insufficient demonstration of financial assurance is excusable because it was allegedly due to Staff action is irrelevant and immaterial and should be excluded from the record.
Moreover, as recognized by the Presiding Officer, this argument is essentially an argument that the financial qualifications regulations should not apply to the Companies because of the Staffs prior actions.10 However, Commission regulations are not subject to attack in adjudicatory proceedings absent a waiver,11 for which the Companies have not petitioned. For these reasons, the language supporting this argument found at the first three sentences of the first full paragraph on page 31 of the Companies Initial Statement of Position should be excluded from evidence in this proceeding. This requested exclusion is also illustrated in the attached redline-strike-out excerpts of the Companies Initial Statement of Position.12 Second,Section II.A., Foreign Ownership Issue, of the Companies Initial Statement of Position and portions of the pre-filed direct testimony of Michael S. Anderson should be excluded from the record because they supply irrelevant and immaterial details of the Staffs initial response to the 2000 indirect acquisition of Aerotest by Autoliv, Inc. (Autoliv).13 In these portions of the Companies filings, the Companies assert that the Staff initially considered the acquisition to be acceptable, but then proceeded to question it and express concerns regarding 9
See Aerotest Operations, Inc. (Aerotest Radiography and Research Reactor), CLI-14-05, 79 NRC __, __ (Apr. 10, 2014) (slip op. at 10) (stating that the license transfer case focusses on whether the Staff appropriately interpreted our regulations and applied them correctly to the undisputed facts).
10 Memorandum and Order, at 4 n.7.
11 10 C.F.R. § 2.335.
12 NRC Staff Attachment 1, at 31.
13 The Companies Initial Statement of Position, at 2-4; Exhibit AOI100, at 2, 4, 5, 7. See also NRC Staff Attachment 1; NRC Staff Attachment 2.
FOCD.14 However, in its ruling establishing this proceeding (CLI-14-05), the Commission stated that the basis for this proceeding is the Staffs financial assurance determination and it held in abeyance a separate proceeding regarding FOCD issues related to Aerotest.15 Consistent with the Commissions separation of the financial assurance and FOCD issues, the Presiding Officer held that FOCD was outside of the scope of this proceeding because it was not a basis for the Staffs denial of the Companies indirect license transfer application.16 Based on these rulings effectively separating FOCD issues from the issue in this proceeding, which is financial assurance, the FOCD information provided by the Companies is irrelevant and immaterial to the findings that have to be made in this proceeding. Therefore, to the extent that the Companies statements relate to the foreign ownership, control, or domination of Aerotest, these statements should be excluded from the instant proceeding.
Accordingly, the following portions of the Companies filings related to FOCD should be excluded: (1) the entirety of Section II.A. of the Companies Initial Statement of Position spanning pages 2-4; (2) sentence 4 of Mr. Andersons answer #5;17 (3) the language due to its FOCD concerns. Additionally, as a result of these FOCD concerns, from sentences 1-2 of Mr.
Andersons answer #6;18 (4) all of the language between and inclusive of the clauses Prior to the commencement of and Based on these concerns, from Mr. Andersons answer #11;19 (5) the language as a result of its FOCD concerns with its parent company Autoliv, Inc. from sentence 1 of Mr. Andersons answer #14;20 and (6) sentence 1 and the language Because of 14 Id.
15 Aerotest, CLI-14-05, 79 NRC at __ (slip op. at 11-12).
16 Memorandum and Order, at 3-4.
17 Exhibit AOI100, at 2 (I have been involved with the NRC Staffs foreign, ownership, control and domination (FOCD) concerns, which, as described below, led to the need to divest the ARRR since these issues were first raised with Autoliv in 2000.). See also NRC Staff Attachment 2, at 2.
18 Id.
19 Id. at 4.
20 Id. at 5.
this finding, from sentence 2 of Mr. Andersons answer #23.21 These requested exclusions are also illustrated in the attached redline-strike-out excerpts of the Companies filings.22 Excluding these portions of the Companies filings will leave in the evidentiary record only those allusions to the FOCD issue that are necessary for background in this proceeding.
For instance, even after the requested exclusions, Mr. Andersons testimony at answer #11 will still retain information regarding the chain of ownership of the ARRR license and the fact that the NRC directed Autoliv to divest itself, in full or part, of the ARRR license.23 Information analogous to this is also presented in the Staffs Initial Statement of Position.24 Therefore, the exclusion of the identified portions of the Companies filings will remove irrelevant and immaterial evidence from the record, while retaining sufficient evidence to explain the background of the proceeding.
CONCLUSION For the foregoing reasons, the Staff respectfully requests that the Presiding Officer exclude from evidence in this proceeding the identified portions of the Companies filings.
Respectfully submitted,
/Signed (electronically) by/
Jeremy L. Wachutka Counsel for the NRC Staff U.S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop O15-D21 Washington, DC 20555 Telephone: (301) 415-1571 E-mail: Jeremy.Wachutka@nrc.gov 21 Id. at 7.
22 See NRC Staff Attachment 1; NRC Staff Attachment 2.
23 Exhibit AOI100, at 4.
24 See NRC Staff Initial Written Statement of Position Regarding Denial of the Indirect License Transfer of the Aerotest Radiography and Research Reactor (June 13, 2014), at 2-3.
Executed in Accord with 10 CFR 2.304(d)
Susan L. Uttal Counsel for the NRC Staff U.S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop O15-D21 Washington, DC 20555 Telephone: (301) 415-1582 E-mail: Susan.Uttal@nrc.gov Dated at Rockville, Maryland this 23rd day of June, 2014
CERTIFICATION OF COUNSEL Pursuant to 10 C.F.R. § 2.323(b), the undersigned attorney hereby certifies that she has made a sincere effort to contact counsel for the Companies and resolve the issues raised in this motion, and that her efforts to resolve the issues have been unsuccessful. Counsel for the Companies indicated that the Companies would oppose this motion and would respond to the motion when it is filed.
Respectfully submitted,
/Signed (electronically) by/
Susan L. Uttal Counsel for the NRC Staff U.S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop O15-D21 Washington, DC 20555 Telephone: (301) 415-1582 E-mail: Susan.Uttal@nrc.gov Dated at Rockville, Maryland this 23rd day of June, 2014
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE PRESIDING OFFICER ATOMIC SAFETY AND LICENSING BOARD In the Matter of )
)
AEROTEST OPERATIONS, INC. ) Docket No. 50-228-LT
)
(Aerotest Radiography and )
Research Reactor) )
CERTIFICATE OF SERVICE Pursuant to 10 C.F.R. § 2.305, I hereby certify that copies of the foregoing NRC STAFF MOTION IN LIMINE TO EXCLUDE PORTIONS OF THE COMPANIES INITIAL STATEMENT OF POSITION AND PRE-FILED DIRECT TESTIMONY, dated June 23, 2014, have been served upon the Electronic Information Exchange, the NRCs E-Filing System, in the above-captioned proceeding, this 23rd day of June, 2014.
Copies of NRC Staff Attachments 1 and 2, which are redline-strike-out excerpts of the Companies proprietary Initial Statement of Position and proprietary pre-filed direct testimony of Michael S. Anderson, respectively, have been served separately in a non-public submission upon the following persons through the Electronic Information Exchange, this 23rd day of June, 2014:
E. Roy Hawkens, Presiding Officer Office of Commission Appellate Chief Administrative Judge Adjudication Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Mail Stop - T-3 F23 Mail Stop: O-16G4 U.S. Nuclear Regulatory Commission Washington, DC 20555-0001 Washington, D.C. 20555-0001 E-mail: OCAAMAIL@nrc.gov E-mail: Roy.Hawkens@nrc.gov Kathleen Schroeder Office of the Secretary Law Clerk Mail Stop: O-16G4 Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Mail Stop - T-3 F23 Washington, DC 20555-0001 U.S. Nuclear Regulatory Commission E-mail: HEARINGDOCKET@nrc.gov Washington, DC 20555-0001 E-mail: Kathleen.Schroeder@nrc.gov
Jay E. Silberg Kimberly A. Harshaw Maria Webb Pillsbury Winthrop Shaw Pittman LLP 2300 N Street, N.W.
Washington, DC 20037-1128 E-Mail:
Jay.Silberg@pillsburylaw.com Kimberly.Harshaw@pillsburylaw.com Maria.Webb@pillsurylaw.com
/Signed (electronically) by/
Jeremy L. Wachutka Counsel for the NRC Staff U.S. Nuclear Regulatory Commission Office of the General Counsel Mail Stop O15-D21 Washington, DC 20555 Telephone: (301) 415-1571 E-mail: Jeremy.Wachutka@nrc.gov Dated at Rockville, Maryland this 23rd day of June, 2014