ML19224D687
| ML19224D687 | |
| Person / Time | |
|---|---|
| Issue date: | 06/15/1979 |
| From: | Mike Farrar, Rosenthal A, Salzman R NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| To: | |
| References | |
| PROJECT-564M NUDOCS 7907160097 | |
| Download: ML19224D687 (36) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION N
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p ATOMIC SAFETY AND LICENSING APPEAL BOARD
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Alan S.
Rosenthal, Chairman Michael C.
Farrar (E
UN15197B P 3 Richard S.
Salzman i
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In the Matter of
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PACIFIC GAS AND ELECTRIC COMPANY
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Docket No. P-564A
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(Stanislaus Nuclear Project,
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Unit 1)
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[ir. Arthur L.
Sherwood, Los Angeles, California (with whom Messrs. David N.
Barry, III, Thomas E.
Taber and Eugene Wagner, Rosemead, California, and Irwin F. Woodland and Robert A.
Rizzi, Los Angeles, California, were on the brief), for the appellant, Southern California Edison Corpany.
Mr. Michael J. Strumwasser, Deputy Attorney General of California, Sacramento, California (with whom Messrs.
George Deukmejian, Attorney General of California, Sanford N.
Gruskin and Robert H.
Connett, Assistant Attorneys General, and H.
Chester Horn, Jr.,
Deputy Attorney General, were cn the brief),for the appellee, State of California Department of Water Resources.
Mr. Jack R.
Goldberg (with whom Mr. Benjamin H.
Vogler was on the brief) for the Nuclear Regulatory Commission staff.
DECISION June 15, 1979 (ALAB-550)
Cpinion of the Board by Mr. Rosenthal, in which Messrs. Farrar anc Salzman join:
This is an antitrust proceeding instituted to deter".ine whether the construction and operation of Unit 1 of the
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. Stanislaus 'Juclear Project by the Pacific Gas and Electric Company (PG&E) would " create or maintain a situation incon-sistent with the antitrust laws" within the meaning of Section 105c. (5) of the Atomic Energy Act of 1954, as amended, 42 U.S.C.
213 5 (c) (5).
The proceeding was initiated by the granting of petitions for intervention and requests for hearing which had been filed by, inter alia, the State of California Department of Water Resources (DWR).
The DWR petition asserted generally that PG&E possessed monopoly power over generation, transnis-sion and distribution in the bulk electric power market in northern and central California and had used it in a manner inconsistel:t with Sections 1 and 2 of the Sherman Act.
In this connection, according to the petition, PG&E had enhanced its monopoly power through its membership in the California Power Pcol, one of the other members of which is the Southern California Edison Company (Edison).
The petition charged, inter alia, that the pool participants had acted in concert to divide the relevant market for wnolesale electric power (the " bulk power" market) and to restrict competition therein.
In the course of prehearing discovery, DWR sought and obtained from the Licensing Board a subpoena duces tecum directed to Edison.
The subpoena required the production of ten categories of documents.
These documents were said to ce relevant to DNR's claim that PG&E had ccabined with the
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. other members of the California Power Pool in anticompetitive activities.
Appearing special.ly, Edison moved to quash the subpoena on a number of grounds.
The Licensing Board was told that (1) it lacked the authority to issue a subpoena duces tecum for discovery purposes; (2) an insufficient foundation had been laid for the issuance of the subpoena in question; and (3) the subpoena was seeking the production of documents not relevant to the issues raised in the proceeding, was impermissibly vague and was so broad in reach as to impose an unconstitutional burden upon Edison, Edison further urged that, were the subpoena not to be quashed, the Licensing Board should direct DWR to compensate Edison for all costs incurred in complying with it.
Following a full day of argument on the motion to quash, the Licensing Board entered an order on January 25, 1979 in which it denied the motion subject to certain conditions, One of the ten categories of documents was deleted in its entirety from the subpoena.
Each of the other nine categories was reduced in scope, And DWR was ordered to compensate Edison for the expense of reproducing one copy of each docu-ment supplied to DWR (albeit not for search costs),
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. Dissatisfied with this outcome, Edison has appealed to es.- /
It essentially renews the assertions advanced below.
1 DWR and the NRC staff urge affirmance.-2/
On a full consider-ation of the arguments of each party, we conclude that the Board correctly disposed of the matter.
Because of a post-argument development, however, itr order is being modified in one limited respect.
I.
We begin with an examination of Ediscn's threshold asser-issuance of the subpoena duces tecum was unauthorized. 3/
tion that As we understand it, this assertion has two prongs.
- First, Edison maintains that this Commission's Rules of Practice do
_1/ A discovery order entered against a non-party has all the attributes of finality, It therefore is subject to appeal notwithstanding the proscription against appeals from interlocutory orders contained in 10 CFR 2.730(f).
See Consumers Power Co. (Midland Plant, Units 1 ar.a 2), ALAB-122, 6 AEC 322 (1973).
_2/ None of the other parties to the proceeding participated on the appeal.
_3/ The staff correctly notes that in Midland, ALAB-122, supra fn.
1, we upheld the issuance of a subpoena duces tecum which had been issued for discovery purposes to non-parties to that antitrust proceeding.
Assuming no relevant dis-tinction exists between that subpoena and the one at bar, we nonetheless cannot accept the staff's argument that we therefore should treat the Midland decision as disposi-tive on the authority question (Br.
p.
6).
Although the non-parties in Midland had insisted before the Licensing Board that our Rules of Practice did not permit " full-blown" discovery of documents in their possession (6 AEC at 323),
that claim was not renewed on appeal (id. at 324).
For that reason, we did not there address or decide the point which rdison presses on this appeal.
c;N 450 8 413 not allow resort to subpoenas in aid of discovery.
- Second, it contends that, even if the Rules mighu be read as permi -
ting the use of subpoenas for discovery purposes, they none-theless should not be so interpreted.
This is because, according to Edison, the requisite statutory authority for such use is wanting.-4/
A.
In issuing the subpoena, the Licensing Board made explicit reference to 10 CFR 2.720, which deals specifically with subpoenas.
Subsection (a) of that Section provides:
On application by any party, the designated pre-siding officer, or if he is not available, the Chainnan of the Atomic Safety and Licensing Board Panel, the Chief Administrative Law Judge or other designated officer will issue subpoenas requiring the attendance and testimony of wit-nesses or the production of evidence.
The officer to whom application is made may require a showing of general relevance of the testimony or evidence sought, and may withhold the subpoena if such a showing is not made, but he shall not attempt to determine the admissibility of evidence.
- [/ In light of the context in which Jdison has advanced its statutory argument, there is dubinus merit to the staff's insistence that that argument amounts to an impermissible attack upon the valid.i v of Commission regulations.
See 10 CFR 2.758.
Even ir, however, Edison had employed the statutory argument to mount a direct challenge to the validity of a Conmission rule, it does nat necessarily follow that we must close our eyes to it.
Certa.aly, Section 2.758 does :.at bar us from requesting the Commis-sion to reexamine a rule which appears to us to lack the requisite congressional authorization.
See 10 CFR 2.718(i).
And, in at least some circumstances, it may be our duty to du so.
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It urges that this language reflects an intention to sanction the use of subpoenas duces tecum only in connection with a hearing.
In Edison's apparent view, the term " evidence" is civersally understood to relate to what is admitted as such at trial; i.e.,
it does not encoa. pass "just discovery materials" (Pr. pp. 6-8).
1.
A virtually identical claim, put forth in an analogous context, was squarely rejected in NLRB v. Wyman-Gordon Co.,
394 U.S.
759 (1969).
That case involved a subpoena duces tecum which had been issued to Wyman-Gordon by the NLRB to compel the pro-duction of personnel and payroll records for use in connection with a union representation election.
One of the questions was whether the subpoena was authorized by a prov'sion of the National Labor Relations Act empowering the NLRB to issue sub-poenas " requiring the attendance and testimony of witnesses or the production of any evidence" in Board proceedings and investigations.
Wyman-Gordon took the position that the docu-ments being sought were not " evidence" within the meaning of that provision.
The Supreme Court disacreed, upholding the view of the District Court that, as used in the Labor Act,
"' evidence' means not only proof at a hearing but also books and records and other papers which will be of assistance to 1
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(N the Board in conducting a particular investigation".
394 768.-5/
U.S.
at Wyman-Gordon thus forecloses any claim that the term
" evidence" always must be taken to refer exclusively to what is presented at a hearing and thus perforce to exclude from its ambit " discovery materials".
It follows that Edison cannot prevail simply by pointing to the Commission's use of that term.
Rather, it is necessary to go beyond the four corners of Section 2.720(a) in order to ascertain whether the Commission intended " evidence" to have a more restrictive meaning than has been given it by the Supreme Court for the purposes of the Labor Act.
2.
Neither in its brief nor at oral argument did Edison 6
allude to any extrinsic indication of such an intent,- /
_5/ Although Mr. Justice Fortas' opinion was joined in by only three other justices, this conclusion was explicitly subccribed to by a total of seven members of the Court.
See concurring opinion of Mr. Justice Black (joined in by Mr. Justice Brennan and Mr. Justice Marshall), 394 U.S.
at 769.
It might be noted that the same conclusion had previously been reached by five courts of appeals.
See
_i d_. at 768-69.
We consider later in this opinion whather production of the documents covered by the subpoena at bar might assist the Ccratission in the discharge of its responsibilities.
See pp.13-16, infra.
_ / More specifically, our attention has not been directed by 6
Edison to any statement by the Ccamission which might suggest that the promulgators of Section 2.720(a) equated
" evidence" with introduction at a hearing.
Rather, Edison has confined itself to the claim that the Commission must have had this limitation in mind because it lacked the statutory authority to issue subpoenas for discovery (i.e.,
non-hearing) purposes.
But as will be later seen (pp. 11-19, infra), Edison is mistaken on the authority point.
4
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And our independent search has proved similiarly unavailing.
To the contrary, close examination of the history of the Commission's subpoena and discovery rules leads us to the quite opposite conclusion that Section 2.720(a) was intended to provide a mechanism for obtaining " discovery materials".
Insofar as we are aware, rules of practice to govern Commission adjudicatory proceedings were first promulgated in 1956.
21 Fed. Reg. 804 (February 4, 1956).
Among those early rules was one which authorized, " [u]pon application by any party to a hearing", the issuance of subpoenas " requiring the attendance and testimony of witnesses or the production of evidence in the hearing".
Section 2.744, 21 Fed. Reg. at 807 (emphasis supplied).
Although, because of its reference to a hearing, this rule may not have authorized the use of a subpoena for discovery purposes, another rule e:gressly did.
In Section 2.745, the Commission empowered the " presiding of ficer" 7/ to order the taking of the deposition of "any person, including a party".
The attendance of those sought to be deposed could be " compelled by the use of a subgena".
Ibid.
Six years later, tbn Rules of Practice underwent their first substantial revision.
27 Fed. Reg. 377 (January 13, 1962).
~~7/ In 1956, that officer was invariably a hearing examiner.
The employment of Licensing Boards was not authorized until the 1962 ena c tmen t of Section 191 of the Atcmic Energy Act, 42 U.S.C.
2241.
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9-The subpoena rule became Section 2.720 and assumed (insofar as here relevant) its present form; that is, both of the references to a " hearing" were deleted.
At the same time although retaining the substance of the earlier deposition rule (including the provision for enforcement by subpoena),-8/
the Commission added a specific provision allowing a party to obtain, on " motion * *
- showing good cause", an order calling for discovery of another party other than by deposi-tion.-9/
These alterations taken in combination strongly suggest to us that the Commission intended that inter-party discovery be initiated by motion and that subpoenas be utilized to obtain discovery of non-parties (who could not be reached other than by subpoena).
Indeed, this seems the only conclu-sion which might reasonably be drawn from the Ccmmission's deliberate choice to remove the " hearing" limitation frcm the subpcena rule.
The second, and most recent, major revision of the Rules of Practice occurred in 1972.
This was some two years after sweeping changes had been made in the discovery provisions of the Fedcral Rules of Civil Pr^^^ dure.
Among other things, FRCP 34 had been anended to allow discovery among the parties
__/ Section 2.740, 27 Fed. Reg. 385.
9
--9/ Section 2.~41, 27 Fed. Reg. 385.
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At the same time, in subsection (c) it was provided that " [ t] his rule does not preclude an independent action against a person not a party for production of documents and things (emphasis supplied).10/
The Statement of Consideration which accompanied the 1972 revision explicitly declared the Commission's objective to follow the lead of these amendments to the Federal Rules.
37 Fed. Reg. 15127, 15128 (July 28, 972).
To this end, in Sections 2.740, 2.740a, 2.740b and 2.741 the Commission pro-vided for (1) inter-party discovery in the form of requests for document production and the service of interrogatories and (2) the taking of the deposition "of any party or other person" -- all without the need to obtain an order from the Licensing Board.
And Section 2.740(f) -- which permits a motion to compel discovery in the event of a refusal to respond or comply -- contains the counter part of FRCP 34 (c) :
This section does not preclude an independent request for issuance of a subpena directed to a person not a party for production of docu-ments or things.
[Section 2.740 (f) (3) ; emphecis supplied.]
10/ This subsection was designed to counter the prior hold-ings of some courta that such an independent action was foreclosed by Rule 34.
See Notes of Advisory Committee on 1970 Amendment to the Rules, 28 U.S.C.
fol. FRCP 34.
't Edison has not explained to our satisfaction how this proviso can be squared with its insistence that a subpoenn is never available for discovery purposes.
And in our view, any such reconciliation is simply not possible.
- Rather, Section 2.740 (f) (3) has meaning only if taken as an integral part of the overall discovery scheme established by the 1970 amendments to the Federal Rules and then carried over by the Commission into its Rules of Practice.
To repeat, a party may seek discovery of another party without the necessity of licensing board intervention.
Where, however, discovery of a non-party is sought (other than by deposition), the party must request the issuance of a subpoena under Section 2.720 -- which, at least from the time of its amendment in 19F2, has contained no language tying subpoenas to hearings.
B.
Having thus concluded that Section 2.720 of the Rules of Practice authorized the issuarce of the subpoena in questaan, we turn to Edison's assertion that, so construed, the Section steps over the bounds of the Commission's statutory powers.
This claim brings immediately to the fore Section 161c, of the Atomic Energy Act of 1954, as amended, 42 U.S.C. 22 01 (c).
With no material change, Section 161c, reenacted Section 12 (a) (3) of the Atomic Energy Act of 1946.11/
It provides 11/ 60 Stat.
'55.
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450 M that, "[i]n the performance of its functions, the Commission is authorized to" --
make such studies and investigations, cbtain such information, and hold such neetings or hearings as the Comrission may deem necessary or proper to assist it in exercising any authority provided in this Act, or in the administration or enforcement of this Act, or any regulations or orders issued there-under.
For such purposes the Commission is authorized to administer oaths and affirma-tions, and by subgena to require any person to appear and testify, or to appear and pro-duce documents, or both, at any designated place.
The question is whether that authorization is broad enough to enable the Commission to exercise its subpoena power in aid of prehearing discovery.12/
The fact of Edison's non-party status is plainly irrel-evant to this inquiry; if nothing else, the use of the phrase "any person" in Section 161c. forecloses any possible distinction between parties and non-parties.
Rather, what must be addressed is Edison's insistence that, no matter who might be the recipient, Section 161c. " clearly limits the Commission te issuing subpoenas for its own purposes and for testimony or production at a hearing" (Er.
p.
6; emphasis in original).
l2/ The subpoena and discovery provisions of the Commission's Rules are expressly predicated upon the authority of Section 161.
See 10 CFR Part 2,
" Rules of Practice for Domestic Licensing Proceedings", statement preceding Section 2.1 (at p.
41 of 10 CFR, 1979 Rev.).
In the case of the subpoena rule, the intended reference was obviously to Section 161c. -- which, as just seen, is directly concerned with the issuance of subpoenas.
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W We can readily agree that Section 161c. does appear to contemplate that any subpoena issued ur. der its auspices will serve the purpose of, as Edison puts it (ibid.), " assisting the Commission in its duties".
But that acknowledgment scarcely assists Edison here.
Edison apparently assumes that any information which might be obtained by DWR as a result of the document production called for by the subpoena necessarily would assist that party alone.
That assumption is unwarranted.
This becomes manifest upon even cursory analysis.
By the enactment of the present Section 105c. of our Act in 1970, Congress imposed specific duties upon this Com-mission in the antitrust sphere.
Among other things, in certain circumstances the Commission must conduct adjudicatory hearings on the basis of which a finding must then be made respecting whether the licensing of the nuclear facility in question "would create or maintain a situation inconsistent with the antitrust laws" specified in the Section.
See Section 10 5 c. ( 5 ), 42 U.S.C.
213 5 (c) (5).
Those circumstances were out-lined in our decision in Kansas Gas and Electric Co. (Wolf Creek Generating Station, Unit No. 1), ALAB-279, 1 NRC 559, 565-66 (1975):
Two situations call for licensing board hearings under section 105c on antitrust issues.
The first is tied to the Commission's statutory obligation to seek the Attorney General's advice on the entitrust ramifice.tions of each license
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- Db dEd3 application.
Where that official advises that granting an application may involve adverse antitrust consequences and recommends that a hearing be held, the Commission is bound to follow his recommendation.
Section 105c (1)
'5) of the Atomic Energy Act of 1954, as amended, 42 U.S.C.
5213 5 (c) (1)- (5) ; Duke Power Coroany (Catawba Nuclear Station, Units 1 and 2)
CLI-74-14, 7 AEC 307 (1974). ***
The second situation which may necessitate a
- *
- is deccribed formal antitrust proceeding in the Joint Committee Report which accompanied the enactment of section 105c in 1970.
In the case where the Attorney General does not recom-mend a hearing "but antitrust issues are raised by another in a manner according with the Com-mission's rules or regulations, the Commission would [then] be obliged to give such considera-tion thereto as may be required by the Admin-istrative Procedure Act and the Commission's rules or regulations."13/
In this instance, the Antitrust Division of the Depart-ment of Justice obtained PG&E's agreement to the inclusion in the Stanislaus license of a number of conditior.s derived from a statement of ccmmitments made by the utility.
The Assistant Attorney General in charge of that Division there-upon notified the NRC staff of his conclusion that an anti-trust hearing would not be necessary were the Ccmmission to 13/ Accord, ilouston Lighting & Power Co. (South Texas Project, Unit Nos. 1 and 2), CLI-77-13, 5 NRC 1303, 1310 (.' 9 7 7 ) :
"Thus, the Act provides for in-depth cutitrust review, with the assistance and advice of the f.ttorney General and the possibility of a full scale aujtdicatory hearing at his request or the request of a private party, (Emphasis supplied).
.g'c issue a license so conditioned.
But this conclusion obviously was not shared by DWR and the other competitors of PG&E which filed petitions for intervention and requests for a hearing.
And once those petitions and requests were granted on a licensing board determination that petitioners were entitled to a formal adjudication of the issues raised by them, the Commission's obligation became plain: it must conduct a hear-ing enl, on the record there developed, make not merely the ultimate statutory finding but, as well, innumerable subsid-iary determinations of fact.
T'.iose who have had exposure to antitrust litigation appreciate the central role that prehearing discovery plays in the refinement of the issues and the development of a comprehensive and coherent record.
Indeed, were that t c o.'
not both routinely a'.ailable and commonly employed, the almost inevitable result would be not merely hearings of unacceptable duration but also the compilation of records which were diffuse in focus and, very likely, incomplete in significant respects.
This in turn perforce would adversely affect the ability of the Commission (acting initially through its boards) to discharge properly its legislative mandate to make an informed judgment on the issues before it.
In short, it would blink reality to decide, as Edison apparently wou'd have us do, that the issuance of the subpoena
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duces tecum sought here by a party could not prove ultimately to be of assistance to ".he Licensing Board in the execution of its decision-making responsibilities.
We expressly hold 14 that precisely the opposite is the case.- /
That leaves for consideration Edison's further insistence that, in any event, Section 161c. allows only subpoenas direct-ing testimony or document production at the hearing itself.
The short answer is that, to accept that line of argument, we would be compelled to engraft additional terms upon the Section.
As written, it authorizes the.ssuance of subpoenas returnable "at any designated place" (emphasis supplied). On its face, that language carries no implication that Congress intended to limit the use of the subpoena power in the manner suggested by Edison.
Nor have we been referred to (or found on our own) any legislative history which might lend support to the thesis that authority to issue a subpoena for discovery purposes was being withheld.
In these circumstances, Edison's reliance on Federal Maritime Commission v.
Anglo-Canadian Shipping Co.,
335 F.2d lj/ Although it is not necessary to rule definitively on the question in this case, we note in passing our belief that the same result would likely obtain in a proceeding con-vened to consider the safety and environmental aspects ot~
reactor construction and operation.
The proper discharge of the Ccamission's adjudicatory functions in such a pro-ceeding likewise might well be furthered by the informa-tion acquired through discovery mechanisms invoked in advance of hearing.
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450 C83 255 (9th Cir. 1964), is entirely misplaced.
In fact, if any-thing, that decision cuts against Edison's position.
At issue in Anglo-Canadian was an order of the Federal Maritime Commissien entered in a pending complaint proceeding.
The order directed the production of certain documents for inspection and copying by one of the parties.
It was issued under the aegis of an FMC rule of practice which related to the discovery and production of documents.
The single ques-tion before the Ninth Circuit was whether the FMC had the authority to promulgate that rule.
335 F.2d at 256.
For that authority, the FMC pointed to a provision of the Merchant Marine Act of 1936 which empowered it "to adopt all necessary rules and regulations to carry out the powers, duties, and functions vested in it" by the Act.
Id. at 258.
As the court of appeals observed, however, all other federal regulatory agencies had been vested with comparable general rule-making power and yet none had endeavored to predicate a discovery rule thereon.
Id. at 259.
As support for its con-clusion that such general authority could not be so employed, the NinLh Circuit noted that, even though the federal courts were thought to have broad inherent powers insofar as pro-cedure is concerned, they had not attempted to utilize pre-trial procedures in ordinary civil cases antil the Federal Rules of Civil Procedure were promulgated in 1937 pursuant to express congressional authority.
Ibid.
In this connection, 3d lt L0 w -
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m the court cited Miner v.
Atlass, 363 U.S.
641 (1960), in which the Supre ' Court had struck down a local dis..overy rule which had been promulgated by a district court sitting in admiralty under the general authority of such courts to regulate their practice "in such manner as they deem most expedient for the due administration of justice, provided the same are not inconsistent with these rules".
Ibid.
As we have seen, Section 2.720 of our Rules of Practice, under which the subpoena hereinvolved was issued, is not similarly founded upon this Commission's general rule-making powers; rather, it rests upon the specific aut._rity to issue subpcenas duces tecum contained in Section 161c. of 15 the Atomic Energy Act.- /
To be sure, the FMC also had been empowered by Congress to require the production of documents by means of such subpoenas.
Section 27 of the Shipping Act of 1916, 39 Stat. 737, 46 U.S.C.
826 (1958 ed.),
But that Section -- unlike Section 161c. -- in terms precluded resort to subpoenas for prehearing discovery purposes.
For it specifically provided that subpoenas issued thereunder were to be returnable "at any designated place of hearinc" (emphasis 1
supplied).
See 335 F.2d at 260.-6/
15/ See fn. 12, supra.
--16/ Because of this consideration, the FMC acknowledced that its rule of practice went beyond Section 27 of the Shipping Act to the extent that the ru2e permitted document pro-duction at a time and place other than that set for hear-ing.
See 335 F.2d at 260.
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Given the fact that pretrial disccvery was at best a novelty in 1916, it is not surprising that the subpoena power conferred by Section 27 of the 1916 Shipping Act was made exercisable only in connection with hearings themselves.
It is just as understandable why Section 161c. of the Atomic Energy Act is devoid of a like limitation.
By the time of the enactment of the Atomic Energy Act of 1946 (see p.
11, supra),
discovery had become well-rcated in at least judicial practice, having been authorized by the Federal Rules of Civil Procedure almost a decade earlier.
In sum, the teaching of Anglo-Canadian -- that agency discovery rules cannot be founded on general rule-making powers- /
17
-- does not come into play where, as here, there is legislatively-granted authority to issue subpoenas return-able at "any designated place".
Finding that authority wide enough to support the validity of Section 2.720 of the Rules of Practice, as interpreted by us, we must and do hold that t:.e Licensing Board correctly concluded that it was empowered to issue a subpoena duces tecum to Edison for discovery purposes.
ll/ Although not crucial to the result here, it is worthy of passing ne'e that in 1967, three years after Anglo-Canadian was decided, Congress amende(
cion 27 of the 1916 Shipping Act to authorize the Federal Ma: time Commission to adopt dis-covery rules.
P.L.90-177, 81 Stat. 5 4 4, 4 6 U. S. C. L27 (1970).
Thus, irrespective of how it may have viewed the precise holding of Anglo-Canadian, Congress manifestly did not wish to leave standing the consequence of that holding; viz., that the FMC was powerless to invoke discovery pro-cedures.
c II.
Our determination on the authority question brings us to Edison's second major point: that, even if authorized, the subpocna should have been quashed on grounds of both relevancy and burdensomeness.
A.
We need not prolong this opinion with an extended canvass of the jurisprudence in this area; fortunately, this has been done for us in Chief Judge Bazelon's decision in Fmleral Trade Commission v.
?" 7co, Inc., 555 F.2d 862 (D.C.
Cir. (en banc)), certi.
enied, 431 U.S.
974 (1977),
As ' hare noted, the iniarmation sought by an administrative subpoena need only be "reaconably relevant" to the inquiry at hand.
United States v. Morton_ Salt Co.,
338 U.S.
- 632, (1950).18/
And, on the matter of burden, 632
[t]he question is whether the demand is unduly burdensome or unreasonably broad.
Scme burden on subpoenaed parties is to be expected and is l8 / In an earlier case, the Supreme Court had characterized the sought material as not being " plainly incc.mpetent or irrelevant".
Endicott Johnson Corp.
v.
Perkins, 317 U.S.
501, 509 (1943).
Another Supreme Court decision preceding Morton Salt had spoken of information " relevant" to the inquiry.
Oklahoma Press Publishing Co.
v.
Walling, 327 U.S.
186, '209 (1946).
The Tcxaco decision Indicat'es that most courts of appeals have employed the " reasonably relevant" standard in administrative subpoena enforcement proceedings.
555 F.2d at 873-74, fn. 23.
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405 necessary in furtherance of the agency's legiti-mate inquiry and the public interest.
The burden of shcwing that the request is unreason-able is on the subpoenaed party.
Further, that burden is not easily met where, as here, the agency inquiry is pursuant to a lawful purpose and the requested documents are relevant to that purpose.
Broadness alone is not sufficient justification to refuse enforcement of a sub-poena.
Thus courts have refused to modify investigative subpoenas unless compliance threatens to unduly disrupt or seriously hinder normal operations of a business.
Texaco, 555 F.2d at 882 (emphasis in original; footnotes omitted).
Texaco, in common with most (if not all) of the decisions cited therein, was concerned with a subpoena issued in the furtherance of an agency investigation.
The same standards are applicable, however, to subpoenas issued in connection with adjudicatory proceedings.
This is illustrated by, e.g.,
Federal Trade Commission ex rel. Kaiser Aluminum v. Dresse; Industries Inc., 41 Ad.L. 2d 517 (D.
D.C. 1977).
In Dresser, an FTC administrative law judge had issued a subpoena duces tecum in aid of discovery on the application of a party to the adjudicatory proceeding pending before him.
As here, the subpoena was addressed to a corporation not a party to the proceeding (Dresser), which moved to quash it.
The administrative law judge denied the notion but (as the Board below did here) modified the_ subpoena in some respects to lessen the burden of compliance.
On appeal from that denial, the FTC ruled that the administrative law judge had
(
not abused his discretion in upholding the subpoena.
Upon Dresser's continued refusal to comply with it, the FTC filed a petition for enforcement of the subpoena in the district court.
At the outset of its opinion grc.nting enforcement,the court ruled, quoting Federal Trade Ccamission v.
- Texaco, supra, that its role was "a strictly imited one" and that "the scope of issues which may be litigated in ;a subpoena]
enforccment proceeding must be narrow, because of the impor-tant governmental interest in the expeditious investigation of possible unlawful activity".
41 Ad.L. 2d at 519.
The court went on to hold that, in view of that consideration and the " reasonably relevant" standard laid down in Morton Salt, supra, "one who opposes an agency's subpena necessarily must bear a heavy burden".
Id. at 521.
It added that " [t] hat burden is essent_ ally the same even if the subgena is directed to a third party not involved in the adjudicative or other proceedings out of which the subpena arose".
Ibid.19 /
Proceeding further, the court concluded that, "in oppos-ing the subpena on the ground that it impcses too great a burden, Dresser acain faces a verv difficult task".
Id. at 19/ For this proposition, the court cited Federal Trade Ccm-mission v.
Tuttle, 244 F.2d 605 (2nd Cir.), certiorari denied, 354 U.S.
925 (1957); Federal Trade Commission v.
United States Pipe and Foundry Co.,
304 F.
Supp. 1254 (D.
D.C.
1969).
,(
c N -/
L
' 2 j
522.
Support for this conclusion likewise was derived from Texaco, the court quoting the same passages from that deci-sion as we have set forth above.
Ibid.
And, notwithstanding Dresser's uncontroverted averment that the cost of compliance with the subpoena would be $400,000, that burden was found not to have been satisfied.
Among other things, Dresser had failed to establish, in the words of Texaco,20/ that com-9 pliance would threaten "to unduly disrupt or seriously threaten normal operations" of its business.
Id. at 523.
Moreover, the court found, "though the subgena is admittedly a sweeping one, iu is not illegal or overbroad, for the breadth of the request is dictated by the scope of the adjudi-cative proceeding".
Ibid.
Accord: Adams v.
Federal Trade Ccmmission, 296 F.2d 861, 867 (8th Cir. 1961), certiorari denied, 3'9 U.S.
864 (1962).
Finally, in announcing its ultimate determination "that the subpena, as modified by order of the ada.inistrative law judge, should be enforced", the court had this to say:
The court is not unmindful of the tremendous impact which compliance with such subpenas can have upon companies which appear to be innocent bystanders.
The cost of effective economic regulation, however, is one which must be shared by a'.1 industry, indeed by the entire society.
The expeditious enforcement of such subgenas, usually without the civil discovery and the protective order which were requested of the court in this case, is an integral part of the regulatory scheme, and c
+
kbb hh 10/ See p.
21, supra.
only in the most egregious of circumstances should a court intervene to delay or hinder the enforcc.nent process.
_d.
at 523-24.
I B.
With the foregoing principles in mind, we have closely examined Edison's objections to the subpoena in the light of the record before us.
That examination persuades us that the Licensing Board did not abuse its discretion in denying the motion to quash the subpoena (as it had been modified by the Board).
To the contrary, the transcript of the all-day prehearing conference on January 24 (which was devoted exclusively to the subpoena) reflects that the Board arrived at its result on the various categories of documents after a careful and thoughtful analysis fully consistent with governing doctrine.
In this connection, it is worthy of note that, for many years, the Board Chairman (who had assamed a leading role in that analysis) was an active anti-trust litigator at the private bar.
The short of t'3 matter is that we perceive no pertinent distinction between this case and Dresser which might enure Edison's benefit.
As the Dresser subpoena, the one at
~
bar is quite broad in scope; but not unreasonably so given the wide reach of the antitrust issues which are being liti-gated in this proceeding.
(We note in passing that Edison is -- allegedly -- involved in the monopolization charges r;U t
e E:"
, is J LI bb) being explored.)
So too, although the cost of compliance by Edison with the subpoena (as modified) is not precisely revealed by the record, it does not affirmatively appear that it likely would exceed the $400,000 figure presented to the Dresser court. In any event, just as the subpoenaed non-party in Dresser, Edison has not established that compliance would
" unduly disrupt or seriously hinder [its] normal operations".
No doubt, as claimed in the affidavit of one of its attorneys which was submitted to the Licensing Board, Edison employees might have to expend a significant amount of tir.e and effort requisite document search.21/
But that is a in makinn the possible aonsequence whenever a company is called upon to respond to a subpoena duces tecum in proceedings of this stripe and, of itself, c.oes not justify quashing the subpoena as unduly burdensome.
- See, e.g.,
United States v.
Inter-national Eusiness Machines Coro., 71 F.R.D.
88, 92 (S.D.
N.Y.
1976).
For these reasons, we are confident that, in the exercise of the role assigned to them in pascing upon objections to admi nistrative subpoenas, the courts would enforce this one.
Taere is no apparent cause why we should be any more prcne to substitute our judgment for that of the Licensing Board 21/ As will be seen, infra, pp. 35-36, by reason of a recent developmen' Edison's burden in this regard may not be as great as nitially thought.
4 b'
on relevancy and burdensomeness questions arising during the course of discovery.22/
III.
The final question is whether the Licensing Board erred in not directing DWR to reimburse Edison for all of the expense which might be incurred by the latter in complying with the subpoena.
The January 25 order does contain (at page 3) a condition requiring DWR to " compensate Edison for its actual costs of duplicating one copy of each document copied for production to DWR".
Edison insists, however, that it also should be compensated for the labor and other costs involved in searching its files to locate the docu-ments covered by the subpoena.
23/ We need not pause long over Edison's further assertion that the subpoena should have been quashed because it was originally issued without a proper foundation first having been laid by DWR.
It is a sufficient response that 10 CFR 2.720(a) contemplates ex parte applications for the issuance of subpoenas. Although the Chairman of the Licensing Board "may require a showing of general relevance of the testimony or evidence sought", he ic not obligated to do so.
Rather, the matter of relevance can be entirely deferred until such time as a motion to quash or modify the subpoena is filed; one of the grounds for such a motion being that the subpoena " requires evi-dence not relevant to any matter in issue".
Section 2.720 (f).
This practice accords with that widely employed by administrative agencies.
Administrative Conference of the United States, Manual for Administrative Law Judges (1974),
p.
12.
It also is ir line with judicial practice.
Upon request of a party, the clerk of the district court will issue a subpoena duces tecum "as a matter of course".
The court thereafter can be asked c7 ) q to modify or quash it.
See FRCP 45; Moore's Federal
,/Q(
Practice (2nd ed. 1977), Vol. 5A, 2 45.05.
4 g
Both DWR and the NRC staff urge that the Licensing Board lacked the requisite authority to grant that relief and that, in any event, Edison had not established an entitlement to it on the merits.
We examine these assertions seriatim.
A.
Section 2.7 20 ( f) of the Rules of Practice specifi-cally provides _aat a licensing board may condition the denial of a motion to quash or modify a subpoena duces tecum "on just and reasonable terms".
The staff contrasts this provision with Rule 4 5 (b) of the Federal Rules of Civil Pro-cedure, which authorizes a court to ccndition the denial of such a motion "upon the advancement by the person in whose behalf the subpoena is issued of the reasonable cost of pro-ducing the books, papers, documents or tangible things".
We are told that the difference in language is significant.
More particularly, according to the staff, the Commission did not follow the lead ot Rule 45(b) and explicitly empower its boards to order reimbursement of document production costs because it recognized that it lacked the requisite statutory authority to do so.
We cannot accept this line of reasoning.
To begin with, if the staff is right, the choice of the unqualified phrase "cn just and reasonable terms" was most infelicitous.
On its face, that phrase is certainly e>.pansive enough in reach to allow the imposition of a condition that the subpoenaed 3,
6 o 4 450
. sL33, person or company be reimbursed for document production costs (assuming s.ch imposition were deemed "just and reasonable" in the circumstances of the particular case).
In the final analysis, we are baing asked to give a more limited reach to Section 2.720(f) than that which must be given to Rule 45(b) even though the former appears to be cast in broader terms.
We should be very hesitant to accept that invitation in the absence of compelling evidence that the Commission intended that inverse result.
As the staff implicitly acknowledges, there is no evi-dence of that sort.
Consequently, it must fall back upon its premise that the Commission promulgated Section 2.720 (f) with full awareness that it lacked the statutory authority to condition the grant of a subpoena duces tecum upon the requesting party's bearing the production costs.
That faulty subsidiary assumption; premise rests, however, upo a
zig., that a federal administrative agency must have an express legislative authorization in hand before it can take that step.
We have uncovered no judicial decision which furnishes support for that thesis.
The staff points to Turner v.
Federal Communleations Commission, 514 F.2d 1354 (D.C. Cir.
1975).23
?
But that case is quite beside the point here.
33/ Apart from Turner, the staff has referred us only to a recent decision of the Supreme Court of Maine applying Maine law.
Central Maine Power Co.
v.
jaine Public
,.~}
g.
Utilities Commission, 395 A.
2d 414 (1978).
We ao not iEI?
federal r) find that decision persuasive in the context of a "s D
~
3 ". t' agency abpoena whic" is governed by federal law.
Ir Turner, a party to an FCC license renewal proceeding sought an award of attorney's fees against another party to the proceeding.
The FCC denied the request an the ground that, although its powers under the Communications Act were broad, the authority ta order reimbursement of legal expenses should not be implied ' absent specific statutory authority".
The Dist.rict of Columbia Circuit agreed with, this conclusion:
Congress, and not the Commission, can authorize an exception to the "American Rule" that litigants bear the expense of their litigation.
The reason-ing of the Supreme Court in Alyeska Pipeline Co.
v.
Wildernes Society [421 U.S.
240 (1975)] is fully applivaole to litigation before the Federal Communications Commission.
Congress has no more
, extended a " roving commission" to the FCC than it has to the Judiciary "to allow counsel fees as costs or otherwise whenever the [ Commission]
might deem them warranted."
[421 U.S.
at 260.]
The Commission in its opinion noted that " Congress has not hesitated in other circumacances to authorize fee award, explicitly when it has determined such authorizations to be warranted."
In fact, two provisions of the Communications Act specifically provide for the award of attorney's fees in court litigation.
514 F.2d at 1356 (footnotes omitted).
Insofar as agency authority is concerned, a manifest difference exists between (1) awarding attorney's fees in favor of one litigant against another and (2) requiring a party who requests the issuance of a subpoena duces tecum to assume the cost of compliance with it.
Beyond that, there is no existing general principle, akin to the "'American
/
h
'I J b
Rule' that litigants bear the expense of their litigation",
that reimbursement of document production costs may not be requircd where an administrative subpoena is involved.
It is quite true that, as DWR points cut, FRCP 45(b) does not apply directly to administrative subpoenas.
Ur.ited States v.
Frjedman, 532 F.2d 928, 9.16 (3rd Cir. 1976).
Nonetheless, in an action brought to obtain enforcement of such a subpcena, the district court has the authority to condicion the grant of that relief upon reimbursement of production costs.
pl.
at 937; Securities & Exchange Commission v.
Arthur Young & Co.,
584 F.2d
'.018, 1033 (D.C. Cir. 1978), certiora'i denied, U.S.
59 L.Ed. 2d 37 (1979).
The position of DWR and the staff thus lacks foundation in the case law.
And there is nothing else to commend it.
In light of the fact that judicial enforcement of an admin-istrative subpoena may be conditioned upon production cost reimbursement, it would make littic sense to conclude tie t the agency itself is powerless to impose a like condition in connection with its action on a motion to quash or modify the subpoena.
To the contrary, it would seen highly appro-riate for the agency to J.ake at least the initial determina-tion respecting whether it is just and reasonable to require reimbursement of production costs.
For, after all, it likely will be especially familiar with eac' of the circumstances 1
,) J'ri
' t J LI bl in the particular case which need be taken into account in making an informed judgment on that score.
There is yet another consideration.
If, no matter how meritorious nav be its claim of entitlement to reimbursement, the subpoenaed person cannot press that claim before the agency but instead can be heard only by opposing the agency's attempt to enforce the subpoena in court, the virtually cer-tain consequence will be that many administrative subpcenas will be resisted, not on their merits,but to take advantage of the remedy available in court.
The result will be more enforcement actions, adding to the existilg judicial burden as well as inevitably postponing the day when the information sought by the subpoena is acquired. Thus, both court and agency will suffer-There is every reason to avoid constru-ing a Cc= mission regulation in a manner which virtually (and unnecessarily) invites delay.
We need add only that the Federal Trade Commission --
which likewise has antitrust responsibilities -- sees the matter no differently.
Although the subpoena provisions of Section 9 of the FTC Act 14 similarly do not expressly author-9 ice the imposition of a condition requiring reimbursement of production costs, that Commission held almost nine years ago that not as a general rule but in a particular instance where justice and fairness so
~j t
7?
f wf
_24/ 15 U.S.C.
49.
3 > Lj demands, the examiner's powers are sufficiently broad to require the payment by a respondent of appropriate and determinable expenses con-nected with compliance by a third person with a suhpena issued at the instance of respondent.
Additionally, if fairness so demands, it is further within the examiner's authority to require that such payment be made in advance.
Ash Grove Cement Co.,
77 FTC 1660, 27 Ad.L. 2d 1038, 1040 (1970) (footnote omitted).
It is our understanding that Ash Grove is still followed by the FTC today.
B.
Our reading of the January 24 prehearing conference transcript suggests that the Board's refusal to condition the denial of the motion to quash the subpoena on DWR's assumption of Edison's search costs may have rested upon the Board's belief that it lacked the authority to impose the condition.
Be that as it may, we think that Edison has not estal?lished its entitlement, in the circumstances of this case, to reimbursement of those costs.
The governing test was discussed and applied in a very recent decision of the Second Circuit.
Federal Trade Commis-sion v. Rockefeller, 591 F.2d 182 (January 18, 1979).25/
In th.t case, the FTC sought enforcement of subpoenas duces tecum directed to seven bank holding companies and a prin-cipal officer of each.
The subpoenas were issued in the course of a congressionally-authorized study of the energy industry and sought information regardirg the connections between energy companies and the financial institutions and cf
'~
4
~23/ The standard emcloved by the courts in enforcement act ons (FOOTNOTE CONTIbUd ON SIEXT PAGE)
O
[/h of the business" of the company [ Edison] to whon it is addressed.
There might nonetheless be cause to impose a reimburser.ent condition if it appeared "that the cost involved in complying with the [ subpoena] exceeds that which [ Edison 1 may reasonaoly be expected to bear as a cost of doing busi-ness".
United States v.
Friedman, supra, 532 F 2d at 938 Accord: Securities & Exchange Commission v. Arthur Young & Co.
supra, 584 F.2d at 1033.
But it does not se appear.
Although the record is devoid of detail respecting the gross annual revenues of Edison, its counsel acknowledged that those revenues are "large" { App. Tr. 39).
It well may be (as counsel further maintained) that " [t]he annual revenues of DWR are extremely large also" (id. at 40).
Rockefeller teaches, however, that that factor is insufficient j u s ti-fication for shifting the burden of compliance from Edison to DWR.
(The United States obviously was just as able to assume the cost of compliance with the FTC subpcenas as were the bank holding companies.)
In a nutshell, it is enough for present purposes that we are not dealing with an enter-prise so small that it would be either unjust or unreasonable to require it to bear the expense of ferreting out the informa-tion related to its business activities sought by the sub-car.- /
26 poena at 26/ We are not unmindful that, as Edison stresses, one disrrict court ordered the Jnited States to reimburse a bank for the approximately S2,500 which it had expended (FOOTNOTE CONTINUED ON NEXT PAGE)
'Y V 'ij
~
,q their affiliates.
The district court ordered enforcement and tl._ banks appealed.
After rejecting a aumber of their arguments, including the clain that compliance with the sub-poenas would be unduly burdensome, the court of appeals turned to the appellants' assertion that, "if they must com-ply with the subpoenas, they are entitled to reimbursement of their costs of compliance from the government".
591 F.2d at 191.
The court's response was:
While the district court has the power to require the government ultimately to pay the costs of compliance, United States v.
- Friedman, 532 F.2d 928, 936-38 (3d Cir. 1976); United States v.
Davey, 426 F.2d 842, 845 (2d Cir.
1970), it is a matter of discretion, cf. Fed.R.
Civ.P. 45(b), 81 (a) ( 3) ; United States 1.
Friedman, supra, 532 P.2d at 937.
Generally, such costs will not be awarded unless they are found to be "not
... reasonably incident to the conduct of [a respondent's] business."
United States v.
Davey, 543 F.2d 996, 1001 (2d Cir. 1976); United States v.
- Friedman, supra, 532 F.2d at 938.
Cf. United States v.
Farmers & Merchants Bank, 397 F.Supp. 4187 420-21 (C.D. Cal. 1975).
Here, it is obvious that the subpoenas are directly related to the conduct of appellants' businesses They are not mere repositories of informat. n per-forming a service for the government
.n com-
- Thus, plying with the subpoenas.
Judge Lasker committed no abuse of discretion in refusing to order reimbursement of the costs of compliance.
Ibid.
Precisely the same may be said with regard to the sub-poena before us: it too is "directly related to the conduct 15/ (FOOT:;OTE CONTI!!UED FROM PREVIOUS PAGE)
(U involving administrative subpoenas may be oroperly invoked 7
in the application of the "just and reasonable" ntandard P
contained in Section 2.720(f) of our Rul( s of Practice.
- }q 4W eg IV.
At oral argument, we asked DWR counsel to explore the possibility that certain of the documents sought by the sub-poena might be readily obtainable from one of the other parties to the proceeding (App. Tr. 128-29).
By letter of June 7, 1979, counsel advised us that the Pacific Gas and Electric Company had agreed to make available to DWR for photocopying those documents which Edison had supplied to PG&E in the course of proceedings before the Federal Energy Regulatory Commission.27/
In light of this development, DWR "is prepared to obtain the documents in question from PG&E and to have them excluded from Edison's response to the subpoena".
26/ (FOOTNOTE CONTINUED FROM PREVIOUS PAGE) in comolying with an Internal Revenue Service summons calling for the production of the records of transactions by several of its customers over a five year period.
Unitea States v.
Farmers & Merchants Bank, 397 F.
Supp.
418 (C.D. Cal. 1975).
The essential basis of the order was the court's belief that the cost of such compliance "is not predictably part of the banking business" and that it would be " unreasonable to expect a party such as [the bank) to bear anything other than nominal costs in complying with a government summons".
Id. at 420, 421.
That belief has been rejected by other courts which have been called upon to enforce similar IRS sum-monses.
E.g.,
United States v.
Covington Trust & Banking Co.,
431 F.Supp. 352, 356 (E.D. Ky. 1977) and cases there cited.
However that divergence of opinion might be ulti-mately resolved, we are persuaded that the cost of com-pliance with the subpcena now in question is " predictably part of [ Edison's] business".
Indeed, we aFe unaware of any judicial holding suggesting otherwise in an analogous context.
27/ Attached to the DWR le ter was a May 30, 1979 letter from PGLE counsel which memorializes that agreement.
- t N J hn.j
,c
- It appears from a statement of Edison's tcuncel at the oral argument that these documents encompass in excess of 100,000 pages (App. Tr. 125-27).
Consequently, the arrange-ment between DWR and PG&E should materially lessen Edison's burden in complying with the subpoena.
The January 25, 1979 order of the Licensing Board is modified to reflect the content of the June 7, 1979 letter of DWR counsel discussed in Part IV, pupra; as thus modified, the order is affirmed.
It is so ORDERED.
FOR THE APPEAL BOARD Romayne M.
Skrutski Secretary to the Appeal Board 450
'ASd