ML19318C261
| ML19318C261 | |
| Person / Time | |
|---|---|
| Issue date: | 03/08/1979 |
| From: | Stoiber C NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | Kennedy R NRC COMMISSION (OCM) |
| References | |
| NUDOCS 8007010278 | |
| Download: ML19318C261 (5) | |
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March 8, 1979 A
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MEMORANDUM FOR:
Commissioner Kennedy FROM:
fj / Carlton R. Stoiber g
j i Assistant General Counsel
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SUBJECT:
RESPONSE TO YOUR QUESTIONS ABOUT THE REVISED CIVIL PENALTIES PROPOSAL 2.:.iiii.
In your memorandum of March 6, 1978 you asked several ques-s;;i=>
tions about the civil penalties proposal and noted your agreement with the Chairman's concerns.
We would note in
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general that the proposed change to an administrative imposi-q..'"-
tion system does not deprive penalized persons recourse to
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independent judicial review.
Both the Commission's deter-Of miriation that a violation has occurred and the Commission's s =-
choice of an appropriate penalty would be reviewable before
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a court of appeals.
If the amount of the fine was not reasonably related to the violations established, the court
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could set it aside.
This is essentially review for abuse of
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discretion (see answer to question 3, below), which is not different from the standard a district court judge would apply under the present de_ novo review provisions.
The agency's expert judgment regarding the seriousness of the L.
violation would be given considerable deference, which seems
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' entirely appropriate.
Thus the only real change in standard 55,.
of review applies to the Commission's factual determina-
=i=g-tions, which the court of appeals would uphold if supported
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by substantial evidence in the record as a whole.
Under
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present de novo review in the district court, the court
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would fiHd the facts for itself after an evidentiary hear-75 ing.
We do not view this change as one which significantly
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deprives violators of protection against arbitrary Com-
@l mission action.
gjp l Response to questions:
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1.
How many times in the past was the maximum fine asked.
gsg for by the Staff?
How often granted by the Commission?
[s2 The staff informs us that eight penalties in excess of.
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$25,000 (the maximum for violations within a 30-day period G.;.
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CONTACT:
E. Leo Slaggie, GC hMk:
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===r Commissioner Kennedy 2
March 8, 1979 i.E==
under the present statute) have been proposed.
The penalty imposed was reduced slightly in three of those cases.
It is kr;:=;
6; not immediately apparent from the available data whether these proposed penalties' were the maximum authorized by the j4?Fi=..
statute.
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2.
Why did Congress originally provide for de novo review I;=
in the District Court?
Does the removal of the penalty
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ceiling and the increase in the maximum penalty make such @t novo review more or less desirable now?
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EEE Regarding the source of the present de novo review provi-sions, I am attaching an early OGC memo on this subject which discussed the legislative history.
It has been our view that an increase in penalties makes an administrative seg imposition system more rather than less desirable, because the Commission is more likely to have to resort to collec-tions actions to maintain the deterrent effect of its civil cc:
penalties program.
This means that the problems with the E ""
E123 present system, as discussed in our draft legislative pro-posal to Congress, will become more of an interference with b
the effectiveness of civil penalties..
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Is the " substantial evidence" standard of review appli-l cable to the finding on the amount of penalty, as well m
as the factual determination?
Or is the standard b=m..
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" abuse of discretion"?
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, The. nature of the " substantial evidence" standard for judi-
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cial review makes it primarily applicable to an agency's Tl.:
factual determinations.
Once the agency has found as c fact
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that a violation occurred, the agency's choice of a suitable
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fine'is an act of discretion and is reviewable for abuse of J;;;
discretion.
Courts have uniformly held that an agency has EEr great latitude in choosing the proper sanction from among statutory alternatives.
The Supreme Court has noted that
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" t'
..lation of'ree iy to policy is peculiarly a matter for 555 Edminantrative compecence."
Butz v.
Glover Livestock EEE Cc.nmission Co., 411 U.S. 182, 165 (1973).
The Court qucted
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with approval a. court of appeals, holding that "so long as 555 the remedy selected does not exceed the agency's statutory
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power to impose and it bears a reasonable relation to the -
practice sought to be eliminated, a reviewing court may not interfere."' 454 F.2d 109, 114.
This " reasonable relation" Z~
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standard of review would appear to be as applicable to a district court review of a proposed penalty, once the fact I5?
of the violation had been established, as to a court of
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appeals review under an administrative imposition system.
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3.
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Commissioner Kennedy 3
March 8, 1979 Z.T.:
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Are more specific statutory guidelines as to the appro-GE priate amount of the fine (e g., past history of viola-tions, severity of violation, or size of licensee)
E5555 desirable or necessary?
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NRC presently provides its own guidelines for administering
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the civil penalty program.
Since the Commission might well
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find that changing circumstances, perceptions of risk, etc.,
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would call for a change of guidelines, it seems desirable that the statute not restrict flexibility to make such
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changes..
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jeE 5.'
Could you specify in uhat sense-the civil penalty p'ro-
.==3 ESEE ceeding is " equivalent" to the other named proceedings in section 234(c)?
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The purpose of the " equivalence" language in Section 234(c)
E is to make clear that the Commission may ecploye the authority F5 in Section 191 of the Atomic Energy Act to delegate to a licensing board the job' of conducting hearings on proposed ig.g j
civil penalties and making initial decisions, followed by iM;-
administrative review procedures equivalent to those employed R
in licensing decisions.
6.
Is not the proposed addition in section 234(b)(3) fully and more appropriately covered by section 234(e)?
No.
The addition to 234(b)(3) states that the notice to a MEE-person subject to a penalty shall in effect contain a warn-l.5l) ing-that no judicial review will be available at the collec-
[gf tion action.
Thus persons who may choose not to take advan-tage of the proffered agency hearing will be on notice that i:j.{j i they.have no other opportunity for review.
This notice EE2 requirement is an addition not contained in 234(e).
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7 Should there be limitations as to the District in which
((M a civil action may be brought?
Under 28 U.S.C. 1355 the district courts have original i;i jurisdiction of any action for the recovery of a fine in-curred under an Act of Congress.-
Under 28 U.S.C. 1395 this
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proceeding "may be prosecuted in the district where it isf.
accrues or the defendant is found."
We see no need to make civil penalties collection actions an exception to this established statutory pattern.
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Commissioner Kennedy 4
March 8, 1979 8.
Should section 234(c) specify who may request a hearing?
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This may depend on whether the Commission wishes to afford i---
hearings only to the person subject to the penalty or wants
- T to leave open the possibility that persons arguably affected E=E=
by the size or adequacy of the penalty (e.g., ratepayers, p.==
citizens concerned about prospective regulatory non-
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compliance at a nearby facility) should be allowed to inter-C vene in a civil penalty proceeding, even though the violator i:;;
may be wil' ling to pay up without a fight.
Leaving the F
language as it is affords the Commission an opportunity to
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interpret the statute flexibly regarding possible requests as-for hearings by persons other than the violator but also 5?:f_
leaves the door ajar to nuisance requests.
The simplest g
door-closing change would be:
"The Commission shall afford
[;=gll=s to the person notified pursuant to subsection (b) an oppor-giLi==
tunity for hearing..." etc.
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Re comment on the first full sentence on page 10 --
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Our present civil penalties statute, Section 234,-
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does not provide a right to an agency hearing.
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Attachment:
Excerpts OGC 6/15/76 mem b
cc:
Chairman Hendrie j@
Commissioner G111nsky L;?!Ei.
Commissioner Bradford E~5 Commissioner Ahearne
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L. V.
Gossick, EDO
.::-ff.1 C. Kammerer, OCA
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A.
Kenneke, Acting Dir., OPE
- .:;:.J.
S. J.
Chilk, SECY
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J. Fouchard, Dir., OPA EE J. Davis, Acting D$r., I&E E-~
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EXCEitPTS FROM AN OGC MEMO OF June 15, 1976 DISCUSSIE THE HISTORI
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OF THE PRESENT IE NOVO m:.v.u:M PROVISIONS:
..- The language of 234 (c) is the name as unac proposed by.the AEC, which stressed at'the hear-
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ings (Hearings before the Joint Committee on Atomic Energy, pel:
91st Congress,1st Sess., on AEC Omnibus Legislation, Sept. 12, Z::-
1969, hereinafter " Hearings") that " civil action would be 15 t
instituted by 2he Department of Justice in Federal district
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charges would exist."
Remarks of AEC General Counsel Joseph 6=
Hennessey, Hearings. at 29.
Hennessey observed that the AEC had considered the approach of having the entire civil pro-t
=r ceeding before the agency, with judicial review in the Court
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of Appeals but had rejected this approach on the (apparently
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mistaken) belief that judicial trial de novo was necessary in
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a " penalty" action.
Hennessey stressed that although the pro-55 posed legislation did not recuire an agency hearing, neverthe-
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less the AEC intended to provide in its regulations an opportun-01:2.:.:_
ity for a full administrative hearing in. addition to the ~
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statutory right to de novo judicial review.
In a letter to the
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JCAE, Hennessey observed that the proposed legislation was based
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hearings because "an alleged violator's guarantee of hearing'is
. :.. m provided in Federal district courts."
Hearings at 38.
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s The Senate report accompanying the amendments (Senate Report No.
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91-553, 91st Congress,1st Sess., Amendments to the Atomic Energy Act of 1954, as amended, Nov. 24, 1969) is silent on the scope of E.i:.
the district court collection action but otherwise echoes the #
===i agency position at the hearings.
The report states:
"Substan -rlT -
4S55 tially the same remedial authority has been conferred by statute upon other regulatory agencies, such as the Federal Communications gEi l Commission, the Federal Aviation Agency, and the Federal Trade
- EE I Commission."
Id. at 9.
The report notes th'ati the AEC had assured i
the Joint CommEtee that a full administrative hearing would be
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,made available.
It is not entirely clear why, if Congress thought that the availability of this hearing was important, a requirement
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As it is, the primary
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procedural safeguard "specifically spelled out" in the legislation s==
is the alleged violator's right to make a written response.
t Congress may have shared with Hennessey the notion that a civil.
i penalty could not be imposed without a de novo judicial action
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an additional full-scale proceeding.
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