ML19316A079
| ML19316A079 | |
| Person / Time | |
|---|---|
| Site: | Oconee  |
| Issue date: | 09/21/1967 |
| From: | Conner T US ATOMIC ENERGY COMMISSION (AEC) |
| To: | Schur US ATOMIC ENERGY COMMISSION (AEC) |
| References | |
| NUDOCS 7911210803 | |
| Download: ML19316A079 (7) | |
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/ }.'(4 Septecher 21, 1967 NOTE TO MR. SCliUR SU2 JECT: TEE CCD'ISSICN'S ALTEGRITY TO DISMISS THE APPIICATION FILED 3Y PIEOMOET CI"IES KER SUPPLY, INC. WITHOUT A
?U3LIC ICARING On September 12, 1967, Pied =cnt Citics Power Supply, Inc., tendered to the Com=ission an applicaticn for licenses under 5 103 of the Atomic Energy Act of 1954, as acended 'Act), to acquire, own, and use a fcur percent undivided interest in the Duke Power Company's proposed Oconce Nucicar Station, Units 1, 2 and 3.
Two questicns are raised by this application:
(1) must the Ccamiscica accept the application for filing, and (2) if not, must the applicants be granted a.hearin3 pursuant to 5 189a.of the Act.
With respect to the first question, we hcia concluded for the reasons set forth below that the Cc=icsien is not required to cecept the application for filing since (1) it uns improperly filed under 5 103 of the Act, (2) is :terially inec=picte, and (3) the Cc= mission iscks authority to grcnt to ?icdmont rights in the property of Duke without its consent.
The Co==ission's authority to grant licenses for fccilitics is set forth in the Act and does not transcend the Act.
Sections 103 and 104 defino and delimit the types of licenscs which the Co mission ccy grant to an applicant. Secticn 103 licenses, " con =cretal licenses", may not be granted by the Cecaission until a " finding of practical value" under ; 102 is made. Therefore, Piedcont's application is i= properly submitted under 5 103 and shculd be submitted, if at all, under g 104 l
The Cecnissica's regulations, 10 CFR Part 50, set forth the necas-sary contents of an application for a facility license. No Occhni-cal or engineering infor=atica, as required by Part 50, has been submitted by Picdcont, and other requirements have been only partially complied with.
In this respcet, the application is caterially
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Mr. Schur September 21, 1967 Xothin; in the Act authorizes the Concission to issue licenses which grant rights to an applicant in the pr6perty of another applicant or licensee. Since Pied:ca;'s application essentially requasts the Cc ission to grant a right to Pied:cnt in property belonging to the Duke Power Ccepany, the Ccamission is without leScl authority to act. A regulatory license grant ;.arcissicn or authority to do a particular act otherwise prohibited but cannot confer or vest in the licensee any interest in property.
With respect to the questien of whether a hearing is required, we have concluded that the Concission may reject the application withcut holding a hearing pursuant to 5139 a. of the Act.1 Section 189 a. of the Act provides in pertinent part:
The Commission shall hold a hearing after thirty days' notice and publication once in the Federal Register, en each application under section 103 cr 104 b. for a construction permit for a facility, and on any a.c.clication under section 104 c. for a construction.
permit for a testing facility.
While there is no case law interpreting this provision of the Act, the courts have, on occasion, concidered the propriety of other agencies' denials of hearings where statutes have grcnted the right to such hearings. The validity of an agency's proceeding without first affording a hearing has been upheld where the relief requested was beycnd the agency's authority to grant and in cases where an appli-cation for a license contravened a specific agency regulation.
In Dyestuffs and Chemicals, Inc. v. Flemming, 271 F.2d 281 (6th Cir.
1959), a cace arising under the Federal Fcod, Drug and Cosmetic Act, the Secretary of the Department of Health, Education and Welfare (HZW) had published a proposed rule in the Federal Register which would recove certain coal-tar colors from an approved list of colors suitable for use in foods. Cc :ent: were received and the rule was again published to beccme effective ninety days frc: the date of publication unless stayed by the filing of proper objec-tions. Cbjections were filed by the Certified Color Industry
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Co==ittee, and a hearing was requested pursuant to 21 USCA 5 371(e)
(2,3). These secticns provided for the filing of objections and 2
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j eThe same censlusien is equally applicsble to the provieicnc in Part 2 i
for denials of applications inasmuch as the dccurent sub=itted by Piedrent is not an " application" under the regulations.
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Mr. Schur September 21, 1967 fer a request for a hearing by any person who wculd be adversely affccced by the order if placed in effect, and that the Secretary of iiri, after notice, chall hold a hearing for the purpose of rocciving evidence relevant and material to the issues raised by the objcetions. Action on the objections was required to be based upcn substantial evidence of record at the hearing.
After the objections were filed, the Supreme Court in another case, Ficnning v. Florida Citrus Exchance, 353 U.S.153G933), held that the Secretary of HZW 1acked the power to per=it the use of harmful ccal-tar colors in specific foods by setting up a system of maxi =u tolerances for these colors.
Relying on this decision the Deputy Concissioner of Food cnd Drugs published the final order delisting the coal-ter colors here in question without a hearing on the theory that there was no authority to list these colors in the first instance because they werc, thc=-
selves, toxic, and there was no authority to catablish tolerances for them.
The Court characterized the partics' positions as follows:
Fetitiener contends that the foregoing (21 USCA 3 371(c)
(2, 3) constitute an unconditional statutory requirement for a hearing upon the filing of objections and that they were wholly disregarded by the order deleting the colors from the harmless list, with the result that no chance was afforded petitioner and others to raise any objections that might be available or to questien or refute the pharmacological evidence referred to in the Secretary's order.
Respondent counters by claiming that the grounds cet forth in petitioner's objections ware wholly insuffi-cient to warrant a hearing in that they scught the prc=ulgation of regulations that ucre beyond the j
Ocpartment's authority.
271 F.2d 281, 234 4
f The Court analy:cd the petitioner's objections - which
..n to the point that if proper tolcr nces were established, the coal-::: colors being considered would not be tonic. Citing the Suprece Ccurr's decisien in the Florida Citrus Ench: ce case, the Ccurt hcid that ZT3 had no authority to set up a systen of toicrences for coal-tar c:lors which were thcesc1ves toxic. The Court held, therefore, that pccitiener's objections were insufficient in law to w:rrant relief frc= the order.
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Mr. Schur September 21, 1967 The Court then went on to answer the question of whether, under the statuta, a hearing was nevertheless necessary on the objections.
The Court held:
The hearing is solely for the purpose of rocciving evidcnce "rclevant and catarial to the issues raised by such objections". Certainly, then, the objections, in order to be effective and necessitate the hearing requested, must bc Icgally adequate so that, if true,
the crder complained of could not prevail. The objec-tions must raise " issues". The issues must be catarial to the question involved; that is, the icgality of the i
order attached. They may not be frivolous or incense-i qucntial. Where the objections stated and the issue I
raised therebv are, even if true. Icqc11v insufficiant, thair effect is a nullity and n c objections have ' econ stated. Con 2ress did not intend the novernmental atencies created bv it to cerfor= ucclass or unfruit-ful ssks.
If it is perfectly cicar that petitiencr's appeal for a hearing contains nothing material and the ohjastions stated do not abregate the legality of the order attached, no hearing is required by lau.
(Zaphasis added.) 271 7.2d 281, 286 As this case stands for the proposition that no hearing need be held where the relief requested is beyond the agency's authority to grant (even when a statute requires a hearing), it is directly applicable to the present situatien. That the Lvestuffs case involved rule-taking and the present situation involves licensing does not warrant a contrary result in the present situation.
Other cases, too, have held that an agency =ay refuse to grant a licanse without first holding a hearing where the statute appears to recuire such hearing.
Thus, in United States v. Storer 3roadcastine Co., 351 U.S.192 (1956), the FCC had pro =ulgated a regulction which prohibited the i
grantin; of a further broadcasting license if th9 applicant therefor already had an interest in other stations bcycnd a limited number. An application filed by Storer, which had an intercs in the maximu= nu=bar of stations per=itted by the FCC rc;ulatica, was dis =issed withcut hearing en the basis of the
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Nr. Schur September 21, 1967 47 U.S.C. 5 309 requires the FCC to hold a hearing before rejecting an application for a broadcast station. Relying on this section Storer argued that the FCC could not validly reject Storcr's applicatica without first granting it a haaring. The Suprece Court, houcver, rejected this contention, saying:
U2 do not raad the hearing require ent, however, as withdrawing from the power of the Co==ission the ule-making authority necessary for the orderly conduct of its business. As concedad by Storer, "Section 309(b) does not rec 2 ire the Cem=issica to hold a hearine before danving a license to cocrate
~3 a station in ways contrary to those that Congress has detcenined are in the nublic interest."
(Emphasis added.) 351 U.S. 192 202 The question of whether an applicant for a certificate of public convcnience and necessity under the Natural Gas Act is always entitled to a hearing was decided in FPC v. Texaco, Inc., 377 U.S.
33 (1964). Section 7 of the Natural Gas Act (15 U.S.C. 5 717f) prcvides that a natural gas ccmpany may not engage in the trans-portation or sale of natural gas subject to FPC jurisdiction or ccnstruct, entend, acquire, or operate any facilitics therefor
- uniass there is in force with respect to such natural gas ccmpany a certificate of public convenience and necessity issued by the F?O. Section.7 further prevides that upon application by a qualified applicant the Co==ission shall set the catter for hearing.
In the Texaco case respondents had filed applications for certificates of public convenience and necessity to supply 4
natural gas to pipelino cc panics. Eccause the applications contained certain pricing provisions which were not permissibic u:ler existing FFC reguistions, the applications were rejected witicut a hearing notwithstanding the provisions of $ 7 of the Natural Gas Act.
The Court of Appeals (317 F.2d 796) set aside the FPC orders and hold that the regulations which defined per=issible and invalid pricing provisions could not be used to deprive applicants of their statutory hearing rights. The Suprc c Court reversed the Court of Appeals and hcid that, as in Sterer, the agency could 1
particul:rize " statutory standards through the ruic-making process and bar(ring) at the threshold those who neither sessure up to them nor shcu reascna why in the public interest the rule should be waived". 377 U.S. 33, 39 Thus, in spite of the mandatory hearing requirament of the Natural Gas Act, the F2C validly rejected these applicaticas without first granting a hearing.
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Mr. Schur September 21, 1967 4
The Storer and Texaco cases appear to be directly applicable to Picdecnt's application. The Ccaniscien, in two rule-making proceedings, found that it could not make a " finding of practical.
value" uncer $ 102 of the Act, as a result of which proceedings no license for a facility may be issued under s 103 of the Act.
Pied: cat's application, submitted under i 103, contravenes the ccnclusien reached in both rule-making proceedings. Furthermore, lOCIE Part 50 sets forth the required centents of an application for a facility license.
In failing to supply the technicsl inf;rmation required by those regulations and La enly partially cc plying with the other requirements of that part, Pied: cat has failed to "reasure up" to the standards for applicatiens parti-cularized by the Cecrissicn in its rule-making proceedings.
The Storer and Texaco cases are also authority for the pro-i position that an agency need not hold a hearing before reject-ing a request for relief beycnd its statutory purpose and authority. Those cases involved regulations prc=ulgated by j
the agencies which implemented and defined their responsibilitie:
under the applicable statutes. The Pied: cat matter differs only in that the Commission has not prcrulgated a regulation to dis-clai: authority to license one person to have an interest in the property of another without his consent. No interpretative regulation is necessary for so obvious a prepositicn.
Another instance in which action in centraventien of a statute was properly rejected without a hearing is provided La Denver Unicn Stcck Yard Comcany v. Producers Livestock L5rketing As cciaticn, 35o U.S. 202 (1956). Sectica 310 of the Packers and Stoc% yards Act of 1921 (7 U.S.C. $ 211) grants a full hearing upcn a complaint filed with the Secretary of Agriculture.
In that case the Denver Union Stock Yard Cc pany had issued a regulatien which the Producers Livestcck 3brketin; A:seciatien centended was illegal in that it centravened 5 3C4 of the Packers and Stockyards Act. The Associaticn filed a ec: plaint with e.
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7-Septe=bor 21, 1967 Mr. Schur the Secretary of Agriculture, and the Stech Yard Co=pany ancwcred, i
requesting a hearing and the di mi;3:1 of the co= plaint. The Suptc=c Ccurt held that the regulation issued by the Stcci Yard Co=pcny was in clear conflict with s 304 of the Packers and Stockyarda Act, and thct under the circumstances no hearing was neccccary doenite tha statutory requirc=cnt that a full hearing be held on a complaint filed with the Secretary. The Ccurt cited Secrer, supra, to the cffcc: that:
We never presu=c that Congrc:s intended an agency "to waste ti=c on applicctions that do not state a valid basis for hearing." (351 U.S. 192, 205) 356 U.S. 232, 237
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Thu; where private action (hcrc, the Stock Yard Cc=pany's regulation) contravenes a specific provisica of a statute, no hearing is necescary despite.the statutory prevision for hearing.
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Conclucion On the basis of the foregoing cases, I have concluded that the Co==ission need not hold a hearing before dismicsing the application submitted by Pied =cnt because Piedmont's application requests relief which is beycnd the authority of the Ccc=ission to grcnt; because 2ied=cnt's applic:tien was wren 3 ully sub=itted under 5 103 of the f
I Act aftar the Cc =ission announced in its rulo-=cking proceedings that a 3 102 " practical value" finding could not yet be mada; and because the application, on its fcco, is materially ince=plete cnd dcas not =casure up to the requirements of the Cc==ission'a r
regulations.
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