ML19305B755

Motion to Compel Further Production of Documents by NRC & Nd Lerner of Transcomm,Inc.Responds to NRC 800225 Motion to Modify Houston Lighting & Power Subpoena.Urges Availability of Documents by 800315 Prior to Lerner Deposition.W/Exerpts

ML19305B755
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	03/05/1980
From:	Green D BAKER & BOTTS, HOUSTON LIGHTING & POWER CO., LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19305B756	List: ML19305B755 ML19305B770 ML19305B773
References
NUDOCS 8003200256
Download: ML19305B755 (13)

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UNITED STATES OF AMERICA m 5 1920 3 7/

NUCLEAR REGULATORY COMMISSION OfcCO cf the Secreta DCcketiM & Scrri:e f!

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BEFORE THE ATOMIC SAFETY AND LICENSING BOARD 4 cV f

Q) ms s' In the Matter of )

)

HOUSTON LIGHTING & POWER ) Docket Nos. 50-498A COMPANY, et al. ) 50-499A

)

(South Texas Project, )

Units 1 and 2) )

)

TEXAS UTILITIES GENERATING ) Docket Nos. 50-445A COMPANY, et al. ) 50-446A

)

(Comanche Peak Steam Electric )

Station, Units 1 and 2) )

MOTION OF HOUSTON LIGHTING & POWER COMPANY TO COMPEL FULLER PRODUCTION BY THE NRC STAFF AND ITS EXPERT ECONOMIC WITNESS AND RESPONSE TO STAFF'S MOTION TO MODIFY SUBPOENA Pursuant to 10 C.F.R. S2. 74 0 (f) , Houston Lighting & Power Company hereby moves to compel fuller production of documents by the NRC Staff and its designated expert economic witness Dr. Norman D. Lerner, President of Transcomm, Inc. The Staff and Dr. Lerner have declined fully to produce the documents sought by Houston in connection with Dr. Lerner's impending deposition, now scheduled for March 17-18, 1980. 1/ Additionally, Houston responds herein to the Staff's motion to modify Houston's subpoena to Transcomm. 2/

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These documents were requested of the Staff in the First Set of Requests for Production of Documents from Houston Lighting

& Power Company to NRC Staff dated February 1, 1980), and were requested of Dr. Lerner in Houston's subpoena duces tecum to the Keener of the Records of Transcomm, Inc.

(application granted February 1, 1980).

2/ NRC Staff's Motion to Modify Subnoena (February 25, 1980).

B0033 00 .

A

, .o Factual' Background s This Motion arises out of difficulties Houston has had in obtaining documents from Staff expert economist Dr. Lerner con-cerning work he and his assistants have performed in connection i with this case. These difficulties first arose'in July of 1979 at Dr. Lerner's initial deposition. Houston had by subpoena and interrogatory requested all documents prepared by or under the supervision of Dr. Lerner in connection with his analysis in this case. Only one document was produced. During his deposition

-t Dr. Lerner revealed, only after considerable probing, that he had also reviewed various memoranda prepared under his supervision by his associate, Mr. Frame. 3/ At the same time Dr. Lerner identified other Transcomm employees working with him in this matter. Staff counsel, in accordance with prior orders of the Board, agreed to produce these Transcomm memoranda. A[

However, several months went by and no production ensued.

Houston informally again requested production from the Staff. 5/

When the documents still were not produced, Houston called this dispute to the Board's attention in its December monthly discovery 3/- Dr. Lerner first testified that he and his staff had generated no other " piece of paper" (Dep. 65). Only.later, after further questioning, it was revealed that Dr. Lerner, under more questioning, disclosed the existence of the Frame memos.

(Dep. 90). All of the Lerner deposition pages cited herein l are annexed hereto as Exhibit A.

1

-i/, Dep. 98.

5/ . Letter from Peter G. Flynn, Counsel for Houston, to Roy P. Lessy, Jr., Counsel for the Staff, dated December 7, 1979 l . )

. (attached as Exhibit B to this motion).

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1 report. b[ Only after repeated entreaties on January 23, 1980, t

i did the Staff provide Houston with the Transcomm memos, as well

? as a theretofore unrevealed relevant NRC memo -- after a delay of six months.

4 These Transcomm memos, at least in Houston's view, make it apparent that Dr. Lerner and his Staff have not been com-l fortable with the economic position the Staff has asked them to support. For example, in a memorandum by Mr. Frame dated June 26, 1979, he set forth his analysis of the impact of intra-

[ state operations upon competition in Texas. The memo discusses

in 20 pages the reasons why "the [ alleged] intrastate restric-4 tion is likely to have relatively little impact in an anti-

'i competitive sense." 1/ This conclusion, of course, is anti-f' thetical to the position the Staff has asserted in this pro-4 cceding. The other Transcomm memos reflect similar difficulties Transcomm has encountered in conforming its analysis to the 4

Staff's position.

, Argument Because there apparent'ly was some misunderstanding which caused these memoranda not to be produced prior to Dr. Lerner's I

6/ Letter from Peter G. Flynn, counsel for Houston, to the Board, dated January 8, 1980, at 2 (attached as Exhibit C to this motion).

7/ . Memorandum from Norman Lerner, Transcomm, from William Lambe, NRR-AIG,' entitled "Our Recent Discussions with Roy Lessy Re

The South Texas Case (Prepared in Anticipation of a Hearing)" dated April 6, 1979 (attached as Exhibit D to this motion).

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4-first deposition, and because of the long delay in producing them thereafter, Houston sought to make it clear beyond dispute that prior to Dr. Lerner's upcoming final deposition, Houston desires production of all documents he has reviewed in connec-tion with his work on this case, particularly all documents and memoranda similar to those authored by Mr. Frame and containing economic analyses of the issues herein. Accordingly, Houston l

j filed a set of interrogatories and document requests, and a

! subpoena duces tecum, designed to leave no room for doubt that 4

these documents were requested. 8/ Houston plainly requires such documents to exploro fully the evolution of Dr. Lerner's I

l economic analysis, and the factors which have influenced it.

l i The Staff implies that Dr. Lerner and/or his staff l

have prepared additional documents analyzing the economic l issues in this case and that Dr. Lerner has indeed reviewed i

these documents in the course of his work in this case. But the btaff objects to producing such documents on the grounds i

that Dr. Lerner, now that he has reviewed them, will not rely on them in his testimony. For these documents the Staff asserts 8/

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The Staff complains that some of Houston's Interrogatories

and subpoena requests are overlapping. NRC Staff's Motion to Modify Subpoena at 7ff. Houston deliberately tried to state its key requests in several different ways so as to 1 eliminate all possibility of misunderstanding. That requests

! may be redundant is no reason to decline to comply with them.

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., *1 a non-testifying expert privilege. Staff explains this con-tention as follows: "Transcomm has been hired by the NRC Staff to provide economic assistance of varlous kinds; only Dr.

Lerner, however is designated as the Staff's expert witness."

(NRC Staff's Motion to Modify Stapoena [" Staff Motion"] at 3.)

Staff's argument, while not altogether clear, evidently pro-coeds as follows: because Dr. Lerner's assistants have not been designated as testifying experts, their work for him is the work of non-testifying experts and is immune from discovery unless he relies on it. This argument is totally without merit.

Ilouston plainly has a cogent interest in the evolution of Dr. Lerner's economic analysis in this proceeding. As the Board explained in its Order of October 23, 1979 Various steps in the analyses and thinking prccesses of expert witnesses in arriving at their conclusions are discoverable . . . .

[A]ll factors which could condition or affect these opinions are properly the subject of discovery in advance of trial . . . .

A memo that Dr. Lerner has had prepared under his supervision, but has chosen not to rely upon, is equally significant in tracing the evolution of his analysis as a memo on which he ultimately relics.

Under this Board's Orders, moreover, an expert economic witness who prepares his own memoranda and decides to rely on only those which are consistent with his client's position, cannot successfully avoid discovery of those memoranda which are inconsistent with that

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. position. E.g. , Order of Octon . - 9 3, 1979. There is no reason why the result should be different when the expert assigns his immediate i

4 staff to perform the analyscs and then chooses those on which l

he will rely. Indeed, the primary thrust of the Board's prior  ;

i Orders on expert witness discovery has been that where an expert picks and chooses among various positions, discovery should reveal it.

Documents produced to date paint a clear picture of an expert witness who, along with the assistants working with him i and under his supervision, finds it difficult to reconcile his analysis with the Staff's economic theory of the case. If Dr.

i Lernor's testimony at hearing is indeed more closely reconciled with h

j the Staf f's position than are his assistants' carlier objective analy-l ses, then it is of utmost importance to trace the path of that '

4 reconciliation:

i The objectivity of expert opinions might be subject to question if witnesses are indeed expected by counsel to be " attempting to reconcile [new] information with his earlier conclusions," or to " defend and explain conclusions which even when recorded

- he may not have endorsed."

i Order, October 23, 1979, at 2-3 (footnotes omitted). It is against those principles, and in the context of prior discovery from the Staff and Transcomm, that Houston files this motion to compel.

Houston has no desire to invade legitimately privileged documents. But the Staff has not identified any such docu-1 w =- v-- r w- m,+. ~ --- - n ,-me .- > - - - - - , - - - - - ---r-- - . - - - , - ~ ~ , , m e ->w,-m, .,n.- , , - e - -+ w e ---- e---

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7-i 9/ Evidently the only documents involved here are those ments. - ,

l which have been prepared for Dr. Lerner under his supervision and ,

which have been reviewed by him in the course of his economic analy-sin of the issues in this case. Such documents should be produced. .

i The Staff places heavy reliance (Staff Motion at 2-5) on 4~

the Board's Orders of May 7, 1979 and October 25, 1979 which I concerned communications which Houston attorneys or non-testifying f experts provided to a corporate officer, (Mr. D. E. Simmons),

who was both directly responsible for the direction of this ,

litigation, and who had also been designated as a testifying J

expert witness in this proceeding. (October 25, 1979 Order at 1.)

The Board held that documents reviewed by a corporate officer 4

! in his capacity as director of litigation for the company, need not be produced unless he is planning to rely on them in his 1

testimony. These rulings are inapposite here. l j The Board's rulings as to discovery from corporate officers a

! did not narrow the scope of discovery permitted for expert wit- .

nesses and the work they or their assistants have done. The Board l simply held that the question of whether or not a document is privileged is not determined merely by disclosure to a corporate officer directing the litigation. No documents prepared by Mr.

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Simmons' assistants in the course of their work on this case 4

9/ Indeed, the Staff goes to far as to refuse to produce addi-tional documents which relate to the four Transcomm memos

. produced previously, and in so refusing, inexplicably states that such documents "may or may not exist." (Staff Motion at 3.)

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were involved. Nothing in any of the Board's Orders remotely suggests that work on this caso done for an expert witness by assistants working under his supervision is someho'w privileged. That argument is particularly without merit here, as Dr. Lerner has testified that he assigned Mr. Frame and others at Transcomm to work with him on this case and that their work 10/

is being done under his direct supervision. (Dep. 92). --

Conclusion For the foregoing reasons, the Staff and Transcomm should be compelled to provide full responses to paragraphs 1, 3, 6-8, and 10-15 of Houston's February 1 subpoena duces tecum to Trans-comm, to Houston's Fourth Set of Interrogatories to the Staff, and to Houston's First Set of Requests for Production to the Staff. Such responses should include:

(a) all documents prepared, seen, reviewed, or relied  :

upon by Dr. Lerner or any Transcomm employee In connec-tion with this proceeding; and (b) identification of all documents as to which privilege is claimed.

Houston respectfully requests that the Board order these responses to be provided no later than March 15, 1980, so as to permit use of the documents during Dr. Lerner's deposition. ,

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I-10/- Under Transcomm.'s contracts with the NRC, Mr. Frame is classified as " key personnel" considered to be essential to the work being performed hereunder." Article IV of

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Contracts NRC-03-79-131 (February 23, 1979), NRC-03-79-165 ,

(August 8, 1979), and NRC-03-80-129 (January 14, 1980).

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Respectfully submitted, hi- V

/

Douglas G. Green Attorney for Houston Lighting

& Power Company OF COUNSEL:

Baker & Botts 3000 One Shell Plaza

!!ouston, Texas 77002 Lowenstein, Newman, Reis Axelrad & Toll 1025 Connecticut Avenue, N.W.

Washington, D. C. 20036 Dated: March 5, 1980

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J EXIIIBIT A n

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• 65

-- 1 were some comments on John Wenders' testimony, 2 I don't think so.

3 Q Now, you said a while ago that you took N some notes as you were reading through the 5 documents?

) 6 A I don't believe I said that.

7 Q Did you t ake notes at any time while reading 0 through the documents?

9 A Sometimes I do. I don't believe I have taken --

10 I would say most of any kindof notes I had 11 are probably marginal notes in the documents 12 that you have.

13 Q. And you and your staff have not prepared any 14 memoranda, any written analysis or any work 15 papers in the course of your work on this 16 proceeding, is that correct?

17 A You mean, other than this?

10 Q Other than in this one piece of paper?

19 A No.

20 Q Now, you returned in April from this meeting 21 with staff and I believe you said at that 22 time that you began once again reviewing 23 documents?

24 MR. LESSY: Would you repeat the

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25 question?

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90 1 Did you tell me this morning that ,

2 aside from this paper " Comments on John 3 Wenders' Testimony" that neither you nor any 4 member of your staff has created any piece 5 of paper of any kind, including notes, hand-6 written notes or anything in connection with 7 this case?

] 8 No, I don't believe that was the question that A

3 9 was asked.

10 0 Well, let me ask that one now. ,

11 A Yes, I am sure there were notes.ar.d perhaps --

12 what categories did you use again?

13 o All pieces of paper.

14 A All pieces of paper?

15 o By whatever description.

16 A Yes, there were memos prepared, internal memos.

17 Q Where are those internal memos?

18 A The internal memos were not prepared by me 19 but prepared by my associate.

20  !!R . BOUKNIGIIT : Mr. Lessy, why 21 have' those not been produced?

22 MR. LESSY: Why don't you ask 23 the witness?

2N There is the individual working

) -- 25 on the case.who wrote some memoranda for his 3 I .

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1 MR. LESSY: We have discussed 2 this and there are four memoranda, internal 3

memoranda, maybe five, I am not sure, I haven't

'. 4 seen them, that we will have to have a supple-to the subpoena 5 mental production with respect l

6 on, in compliance with interrogatories. Therc 5

7 are notes to the file prepared by Mr. Frame,

! 8 as I understand it.

9 o now, Dr. Lerner, tell me about Mr. Frame's role 10 in this case, 11 Why is Mr. Frame writing memoranda?

Why is he 12 Tell me about his role in the case.

M 13 writing memoranda?

14 A Given the level of effort expended and available 15 so far, that has been the most efficient way 16 of getting the work done on the program.

17 0 What is he going to do when he gets through

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18 writing his memoranda?

19 A On this project?

20 0 Yes, sir, on this project.

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- 21 What is he going to do with the fruits of this 22 labor?

It's difficult to say at this point. I don't 23 A 24 know how useful the material is that he has 25 prepared to this point because I haven't gone i.

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