ML19319B871
| ML19319B871 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 08/12/1975 |
| From: | Goldberg R, Hjelmfelt D, Oldak M CLEVELAND, OH, GOLDBERG, FIELDMAN & HJELMFELT |
| To: | |
| References | |
| NUDOCS 8001280728 | |
| Download: ML19319B871 (63) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board
=4 e In the Matter of )
M )
,' The Toledo Edison Company and ) Docket No. 50-346A The Cleveland Electric Illuminating )
Company )
(Davis-Besse Nuclear Power Station, i Unit 1) )
)
The Cleveland Electric Illuminating ) Docket Nos. 50-440A Company, et al. ) and 50-441A (Perry Nuclear Power Plant )
Units 1 and 2) )
BRIEF OF APPELLANT CITY OF CLEVELAND, OHIO Reuben Goldberg,.
David C. Hjelmfelt Michael D. Oldak Goldberg, Fieldman & Hjelmfelt p- 1700 Pennsylvania Avenue, N. W.
f, Washington, D. C. 20006 i
T, James B. Dawis Director of Law Robert D. Hart First Assistant Director of Law City of Cleveland City Hall, Room 213 Cleveland, Ohio 44114 Attorneys for City of Cleveland, Ohio August 12, 1975 7M 8001 28
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TABLE OF CONTENTS STATEMENT OF THE 'ASE . . . . . . . . . . . . . . . 2 4 STATEMENT OF THE ISSUES . . . . . . . . . . . . . . 7
. ARGUMENT -
.* I THE ATOMIC SAFETY AND LICENSING APPEAL BOARD HAS JURISDICTION TO REVIEW A DECISION SUSTAINING CLAIMS OF PRIVILEGE AND DENYING DISCOVERY. . . . . . . . . . 8 II A POTENTIAL OF TRULY EXCEPTIONAL DELAY OR EXPENSE EXISTS IF INTERLOCUTORY REVIEW IS NOT GRANTED. . . . . . . . . . 12 III THE ATOMIC SAFETY AND LICENSING BOARD ERRED IN DENYING CLEVELAND'S MOTION TO CERTIFY. . . . . . . . . . . . . . . 15 IV THE SPECIAL MASTER ERRED IN FINDING DOCUMENTS PRIVILEGED AND NOT SUBJECT TO DISCOVERY ON GROUNDS OTHER THAN THOSE ASSERTED BY THE PARTY CLAIMING THE PRIVILEGE. . . . . . . . . . . . . . 26 V THE SPECIAL MASTER ERRED IN SUSTAINING
, CLAIMS OF PRIVILEGE FOR DOCUMENTS FOR WHICH CEI WAS UNABLE TO PROVE THE IDENTITY OF THE AUTHOR, THE RECIPIENT,
. THE DISTRIBUTEES OR THE ADDRESSEES. . . 35 CONCLUSION . . . . . . . . . . . . . . . . . . . . . 40 te w , e. 4 e e -- -r-- -
11 AUTHORITIES CITED .
Cases: Page Abbott v Superior Court, 78 Cal. App. 2d 19,177 P 2d 317 . . 26 Alabama Power Company, Docket No= 50-348A, 50-364A . . 12, 13
- Commonwealth Edison Co. , RAI-73-4 . . . . . . 9, 10, 15 Consumers Power Company, Docket Nos. 50-329A, 50-330A, decided July 18, 1975 . . . . . . . . . ., 12, 13 Ex porto Lipscomb,111 Tex. 409, 239 S.W. I101 . . . . 26 Falsone v United States, 205 F. 2d 734, cert. denied, 346 U.S. 864 . . . . . . . . . . . . 28, 36 Hickman v Taylor, 329 U.S. 495 . . . . . . . . 29, 31, 32 Hill v Hill,106 Colo. 492,107 P 2d 597 . . . . . . 26 In re Bonann6, 344 F. 2d 830 . . . . . . . . 29, 37 McNeice v Oil Carriers Joint Venture, 22 F.R. D.14 . . . 30 Mississippi Power and Light Co. , RAI-73-6 . . . . . 8 Natta v. Hogan, 392 F. 2d 686 . . . . . . . 37, 38, 39 Peterson v United States, 52 F.R.D. 317 . . . . . . 31 Philadelphia Electric Company, RAI-74-5 . . . . . 8 Potomac Electric Power Co. , R AI-74-2 . . . . . . 8 Republic Gear Co. v Borg-Warner Corp. , 381 F. 2d 551 . . 32 Russell v Second Nat'l Bank,136 NJL 270, 55 A. 2d 211 . . 26 Steen v First National Bank, 298 F 36 . . . . . . 26 Thomas Organ Co. v Jadranska Slobodna Polvidba, 54 F.R.D. 367 31 Tingley v State, 16 Okl. Cr. 639,184 P F49 . . . . . 27 United States v Johnson, 465 F. 2d 793 . . . . . 37 United States v United Shoe Machinery Co.poration, 89 F. Supp. 357 . . . . . . . . . . . 33 Statutes e.nd Regulations and Treatises:
Commissions Rules of Practice . . . . . . . . 8, 9, 10 c ,
Section 2. 718(i) . . . . . . . . . . . 11 Section 2. 730(f) . . . . . . . . . . . 11, 15 Section 2. 735(a) . . . . . . . . . . . 11
- 42 USC 2135 . . . . . . . . . . . 12 Federal Rules of Civil Procedure 26(b)(3) . . . . . . 31 McCormick on Evidence . . . . . . . . . . 26 Wigmore, Evidence,9 2191 . . . . . . . . . 29, 36 S'2192 . .. . . . . . . . 28, 36 8 Wright & Miller, Federal Practice and Procedure, $ 2016 . . 29, 30, 37 i
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UNITED ST TES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )
)
The Toledo Edison Company and ) Docket No. 50-346A The Cleveland Electric Illuminating )
Company )
(Davis-Besse Nuclear Power Station, )
Unit 1) )
)
The Cleveland Electric Illuminating ) Docket Nos. 50-440A Company, et al. ) and 50-441A (Perry Nuclear Fower Plant )
Units 1 and 2) )
BRIEF OF APPELLANT CITY OF CLEVELAND, OHIO This brief is filed by the City of Cleveland, Ohio, (Cleveland or City) in accordance with Sections 2. 762 and 2. 785 of the Commission's Rules of Practice and the direction of the Atomic Safety and Licensing Appeal Board.3./
Cleveland appeals from the Report of Special Master of June 19, 1975, the Special Master's Order on Reconsideration; I and the Board's Order of
- < . July 21, 1975, denying Cleveland's Motion for Certification.
J_/ Letter to Reuben Goldberg of August 4, 1975.
2/ Found at pages 81-86 of the transcript of June 30, 1975, in the above-entitled proceedings. Cleveland is filing an amended Notice of Appeal from the Special Master's Supplemental Decision of July 29, 1975.
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STATEMENT OF THE CASE Cleveland timely filed its petition to intervene in the Davis-Besse proceeding on July 6,1971, and subsequently filed its timely petition to intervene in the Perry proceeding. By Memorandum and Order docketed March 15, 1975, an Atomic Safety and Licensing Board granted Cleveland's
. petitions to intervene in Davis-Besse and Perry and ordered that the two cases be consolidated. M By its Prehearing Conference Order No. 2, docketed July 25, 1974, the Board formulated a statement of Issues and Matters in Controversy (numeo, pp. 8-14). Among the matters in contro-versy formulated by the Board for the purposes of discovery, number 7 provided
. . . has this ability to hinder or preclude competition been exercised for. the purpose or effect of eliminating one or more of the other electric entities in the [com-bined applicants service territory].
On October 15, 1974, the Board issued its Order on Objections to Interrogatories and Document Requests. At page 49 of its October 15, 1974, Order the Board provided that with respect to documents for which a e privilege was claimed:
The document shall be identified by date, person (s)
'- . preparing the document, recipient (s.), subject matter .
of the document, documentary request number by which the document would be produceable but for the assertion of privilege, and a brief statement of the basis for asserting privilege. A copy of privileged document designations should be supplied to the Board.
l 3_/. Cleveland's petition to intervene in the Beaver Valley proceeding was j denied.
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By Order of November 4, 1974, the Board established the date of j November 30, 1974, for completion of all documentary discovery and responses to interrogatories. On December 10, 1974, the Board, pursuant to agreement of the parties, appointed Marshall E. Miller, Esq. , Master
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to rule on claims of attorney-client or work-product privilege. Th'e Order also stated:
The above is accomplished with the express agree-ment of the parties to be bound by determinations of the Master.
Cleveland filed its Memorandum of Law for the Special Master for the Determination of Assertions of Privilege with Special Master Miller on April 25, 1975. On May 2,1975, Cleveland filed its Reply Brief on the Issues of Assertion of Privilege with Special Master Miller.
On May 2,1975, the Board by Order relieved Mr. Miller as Special Master and substituted Frederick J. Coufal as Special Master.
On May 16, 197 5, following the submission of briefs by all parties
- to the Special Master, the Board granted The Cleveland Electric Illuminating
- Company (CEI) leave to file an affidavit with the Special Master setting forth additional facts in support of its claims of privilege. II Cleveland l
<. and the Department of Justice opposed the filing of the affidavit on the grounds that it was untimely and Applicants had had an ample opportunity to present and support their claims by filings made pursuant to the previously established briefing schedule.
4_/ The vast majority of the claims of privilege were asserted by CEI.
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On May 30, 1975, Cleveland made an oral motion to strike the affi- i davit of Mr. Donald Hauser, Corporate Solicitor of CEI, which had been
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filed pursuant to the Board's Order of May 16. The Department of Justice .
l and the Nuclear Regulatory Commission Staff joined in Cleveland's motion. l l
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Cleveland contended that the affidavit contradicted earlier sworn responses of Applicants to interrogatories, contained conclusions and arguments, and went beyond the scope of the Board's Order granting leave to file the affi-1 davit. By Order of June 3, 1975, the Board granted Cleveland's motion in part and denied it in part and directed the Special Master to disregard conclusory statements and arguments made in the affidavit. Cleveland was granted leave to file a subsequent written motion.
Cleveland filed its written motion to strike Mr. Hauser's affidavit of May 23,1975, on June 5, 1975. Cleveland asked in the alternative that 4 it be granted leave to file a reply to Mr. Hauser's affidavit which in effect asserted a new factual basis for CEI's claims of privilege and in some instances asserted additional claims of privilege.
On' June 11, 1975, the Board again denied Cleveland's motion to strike
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but permitted Cleveland to file a reply and treated Cleveland's motion as its
<. a ply.
The initial Report of Special Master ruling on claims of privilege '
_made by CEI was docketed June 20, 1975.
I l - By conference call of June 24, 1975, Cleveland, the Department of Justice and CEI requested review of certain rulings in the Special Master's 5/.
Report. - ' Cleveland noted that the Master had granted privilege to 30 5/ Minutes of Conference Call with Board Chairman on June 24, 1975.
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documents as to which CEI had previously waived privilege and had held privileged a document prepared not by CEI attorneys but by the City of Cleveland. The Department of Justice stated that the Special Master had found privileged more than 100 documents on grounds not asserted by CEI, and had both granted and denied claims of privilege with respect to some documents. Chairman Rigler then indicated that the Master may have made s
minor errors and that the Master and or the Licensing Board should review the Report to eliminate such possible errors. Chairman Rigler also indicated that the agreement cited in the December 10 Order obviously had to contemplate the presence of certain minor errors and that these would be reviewable.
Chairman Rigler then conferred with other members of the Board and in a conference call on June 25, 1975, informed the parties that the Board had decided that the parties should be held to their prior agreement 6/
to be bound by the decision of the Special Master. - However, the Special Master would reconsider his decision and accord the parties an opportunity to make oral argument.
Oral argument was held before the Special Master on June 30, 1975.
'- At the conclusion of the hearing, the Special Master modified his original report in a few minor matters.1/ nI modifying his original order the i
Special Master both upheld and rejected claims of privilege with respect to l Document No. 57.
6,/ Cleveland vigorously disagrees with the Board's interpretation of the agreement.
7/ Tianscript pages 81-86, June 30, 1975.
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. l By Motion of July 8, Cleveland moved the Board to certify to the Atomic Safety ano Licensing Appeal Board the decisions of the Special Master with respect to claims of privilege asserted by CEI. On July 21, 1975, the Board declined to certify the matter to the Appeal Board and on July 28, 1975, Cleveland filed its Notice of Appeal and Exceptions.'
o G
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o STATEMENT OF THE ISSUES
- 1. Whether the Atomic Safety and Licensing Ap;:eal Board has jurisdiction to review a decision of an Atomic Safety and Licensing Board acting through a Special Master which sustains claims of privilege thus denying the right to obtain copies of those documents in discovery. '
- 2. Whether the Atomic Safety and Licensing Board erred in denying Cleveland's Motion for Certification of Special Master's Decision on Claims of Privilege.
- 3. Whether the Atomic Safety and Licensing Board erred in finding that the decision of the Special Master was final and unrevie. Ible.
- 4. Whether the Special Master erred in finding documents privileged and not subject to discovery on grounds other than those assorted by the party claiming privilege.
- 6. Whether the Special Master erred in sustaining claims of privi-lege for documents even though the party claiming the privilege was unable to prove the identity of the author, the recipient, the distributees or the addressees.
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ARGUMENT I.
THE ATOMIC SAFETY AND LICENSING APPEAL BOARD HAS JURISDICTION TO REVIEW A DECISION SUSTAINING CLAIMS OF PRIVILEGE
- AND DENYING' DISCOVERY. -
. Section 2. 730(f) of the Commission's Rules of Practice states:
No interlocutory appeal may be taken to the Com-mission from a ruling of the presiding officer. When in the judgment of the presiding officer prompt deci-sion is necessary to prevent detriment to the public interest or unusual delay or expense, the presiding officer may refer the ruling promptly to the Commis-sion, and notify the parties either by annouacement on the record or by written notice if the hearing is -
not in session.
The Atomic Safety and Licensing Appeal Board has previously held that Section 2.730(f) precludes the taking of an interlocutory appeal from any Licensing Board ruling other than one directly concerned with the grant or denial of status as an intervenor.
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Section 2. 730(f) is itself internally contradictory in that it states that no interlocutory appeal may be taken and then provides for a method
'. by which such an appeal can be taken, i. e. , upon certification by the presiding officer.
Certification by the presiding officer does not guarantee that review may be had. The Appeal Board has dismissed certification as improvident
_8,/ Philadelphia Electric Company, RAI-74-5 p. 841; Potomac Electric Power Co. , RAI-74-2 p.151; Mississippi Power and Light Co. ,
RAI-73-6 p. 423.
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. when it found that there was no potential for truly exceptional delay or '
expense if an interlocutory review were not had.1/ This suggests that there is and can be interlocutory appeal and that such an appeal is tested by standards other chan mere certification.
It is also evident that Section 2. 730(f) applies only to interlocutory
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appeals from the presiding officer. No mention is made in Section 2. 730(f) of decisions by a Special Master. Indeed, no provision of the Rules of Practice specifically provides for the appointment of a Special Master. A' presiding officer derives his authority by grant of the Commission pursuant to specific rules promulgated by the Commission which state the manner of the appointment and the extent of his authority. No such provisions apply to a Special Master. The rules establish a separation of functions to l insulate a presiding officer from other. activities of the Commission.
On the other hand, the Special Master was appointed by the presiding officer, not by the Commission. There are no rules governing his conduct or authority. Such limits as exist arise only as imposed by the presiding office r. The orders appointing the Special Master give scant guidance or limit on the activities of the Special Master. 10/
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It is clear that in limiting interlocutory review of the rulings of a presiding officer very different considerations must be applied than when J/ _ Commonwealth Edison Co. , RAI-73-4 p. 258.
i 10/ Cleveland does not herein question whether the presiding officer has
[ the authority to delegate his responsibility to a Special Master although the authority is not clear from the Commission's Rules of Practice, since reference to a Special Master was the result of agreement of all parties which included Cleveland. '
1 the issue concerns rulings of a Special Master. The Special Master did not receive his authority from r.he Commission but upon re-delegation from
- l the presiding officer. The distinction is particularly sharply drawn when, as in this case, the presiding officer has declined to review the decision j of the Special Master so as to make it his own. Rather. the presiding
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officer has ruled that the Special Master's decision cannot be reviewed by anyone.
Since the decision of the Special Master .has never been reviewed by the presiding officer and has never been formally adopted in any order of the Board, it is not an order of the presiding officer from which no interlocutory appeal may be taken. Section 2. 730(f) is simply not applicable.
Even if Section 2. 730(f) were applicable this Appeal Board has jurts-diction to consider Cleveland's appeal. Assuming, arguendo, the Appeal Board's jurisdiction can only be triggered by certification, the Appeal Board's jurisdiction cannot be defeated by'an erroneous refusal to certify.
Under Section 2. 730(f) certification is discretionary with the presiding o fficer. In determining whether the Appeal Board has jurisdiction, the Appeal Board must consider whether the presiding officer properly exer-
. cised his distretion in refusing to certify the question. The Appeal Board did just that in Commonwealth Edison Co. , supra. Whether the presiding officer properly exercised his discretion in refusing to certify this matter is discussed subsequently in this brief.
Although Section 2. 730(f) speah in terms of certification in the discretion of the presiding officer, - ules of Practice provide also for certificction by the presiding officer at the direction of the Commission. El The Commission has authorized the Atomic Safety and Licensing Appeal Boards to exercise the authority and perform the review functions which would otherwise have been exercised and performed by the Commission.12/
Accordingly, this Appeal Board can direct the presiding officer to certify the matter for review. In this regard Cleveland's Notice of Appeal and Exceptions may be treated as a motion directed to the Appeal Board to direct certification.
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Jl/ Section 2,718(i).
J2/ Section 2. 735(a).
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l II A POTENTIAL OF TRULY CXCEPTIONAL DELAY OR EXPENSE EXISTS IF INTER-LOCUTORY REVIEW IS NOT GRANTED.
This case involves a prelicensing antitrust review pursuant to
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Section 105 of the Atomic Energy Act as amended on December 10,' 1970. 13/
Only one initial decision has been rendered under Section 105 since the 1970 14 / A second case is now in hearing < 15 / This case, presently amendment.
scheduled for hearing on October 30, 1975, will be the third such case to go to hearing. There have been no appellate decisions or court decisions reviewing a case decided under Section 105 as amended in 1970.
Antitrust proceedings are typically long and expensive. Experience under Section 105 has been no different. Trial of the Consumers case lasted from November 27, 1973, to Juae 12, 1974. The Department of 4
Justice presented 17 witnesses and offered ?.89 exhibits. Intervenors pre-
-sented 4 witnesses and a number of depositions and exhibits, and the Atomic s
Energy Commission Staff presented I witness. Applicant presented 7 witnesses and 93 exhibits. The initial decision was not rendered until
- July 18,1975, more than one year after the close of the record.
The Alabama Power case began hearings on Da.cember 4, 1975.
The Department of Justice and Inter enors have not yet completed the
- presentation of their case-in-chief. The transcript already runs more 1},/ 42 USC 2135.
14f Consumers Power Company, Docket Nos. 50-329A, 50-330A, decided July 18, 1975.
,l_5_/ Alabama Power Company, Docket Nos. 50-348A, 50-364A.
than 14,000 pages, not including hundreds of pages of prepared written direct testimony and exhibits. Applicant alone has introduced more than 200 exhibits during cross-examination. Applicant has filed thousands of pages of testimony and exhibits which it will offer as part of its case-in-
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chief. The Department of Justice is presenting 6 witnesses and Intervenors
. are presenting 5 witnesses. Applicant has filed testimony of 10 witnesses.
The Alabama Power case has been bifurcated -- that is, if a situa-tion inconsistent with the antitrust laws is found to exist, a separate addi-tional hearing will be had on the matter of remedies.
While it is hoped that this case will not be so lengthy as the Alabama Power case, there is no reason to believe that it will not be as long or longer than Consumers. The fact that there are five Applicants in this case and that evidence will probably be presented against each of the five individ-ually as well as against them as a group is a factor which wil? make !.his a lengthy and complex hearing. Moreover, the long history of anticompetitive conduct by CEI against the City of Cleveland will necessitate the introduction of many pages of testimony and exhibits.
Thus, the clear error of the Special Master's rulings provides a )
.. potential for reversal which would cause exceptional delay or expense in ro. 'hing a final decision on the issues presented. At stake is not merely the huge expense in time and money necessitated by rehearing, but also the i
need for a decisioc to permit the Applicants and Intervenors to plan for their future power supply.
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Among the remedies saught by Cleveland are access to participation in the Davis-Besse and Perry units, access to coordinated operations and planning, and third party wheeling. These factors are fundamental factors which must be considered in any planning for Cleveland's future power supply. Delay in reaching a final decision may result in forcing Cleveland to develop short term, uneconomic power supply arrangements pending a final decision.
The Perry units are not grandfathered. Construction may not begin on them until an initial decision is rendered. If an initial decision in this proceeding were subsequently reversed, Cleveland believes that any con-struction work on the Perry units would by law be halted. This would give rise to a needless escalation of costs and delay in making power available from the Perry units.
Rules against piecemeal review of a proceeding serve a commendable role-in the efficient administration of the law. Such a rule, however, is only a tool to be used so long as it promotes efficiency in administering the law. When, as here, a blind adherence to a rule against interlocutory
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review can be followed only at the risk of truly exceptional delay or expense, l -
the tool should be discarded.
i Later in this brief Cleveland will demonstrate the clear error of the l
Special Master's decision. In determining whether this case is one of a potential for truly exceptional delay or expense, this Appeal Board should l
consider the likelihood that Cleveland would prevail in a review on the merits of Cleveland's contentions.
III THE ATOMIC SAFETY AND LICENSING BOARD ERRED IN DENYING CLEVELAND'S MOTION TO CERTIFY.
- - By its Order of July 21, 1975, the Board denied Cleveland's Motion for Certification of Special Master's Decision on Claims of Privilege. In its Order the Board assigned the following reasons for its decision (mimeo.
pp. 6-9):
- 1. Cleveland had waived its right to review.
- 2. The reason for rasort to a Special Master, i. e. , to insulate the Board, had equal applicability to the Appeal Board.
- 3. If any review is to be had it should be by the Board and not the Appeal Board.
- 4. There is little likelihood of any substantial effect upon the parties' preparation for the hearing.
It is significant that in its Order the Board did not address the test set forth in Section 2. 730(f) and affirmed by the Appeal Board in Common-wealth Edison Co. , b hat t . . . prompt decision is necessary to prevent detriment to the public interest or unusual delay or expense . . . . The Board has thus failed to apply the test established by the Conunission for determining whether a matter should be certified for review.
16,/ R AI-73-4 p. 25 8.
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The reasons which the Board did assign for its decision do not stand up to analysis. The Board argues that the Order of December 10, 1974, memorializing an agreement of the parties to be bound by the decision of the Special Master, constitutes a waiver by Cleveland of its fundamental
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right to appeal (mimeo. p. 6). The Board argues that the language of the De cember 10, 1974, order is clear and unambiguous.
Cleveland believes the Board is in error in finding the language in the Board's order of December 10, 1974, to be unambiguous. The state-ment upon which the Board relies refers to the " express agreement of the parties to be bound by the determinations of the Master." Clearly there was no express agreeraent by the parties that the determinations of the Master would be " final and not subject to appeal." It is one thing to agree to be bound by a decision to the extent that the d. cision will be accepted in lieu of a decision by the Board which the parties had a right to have. It is quite another to surrender a right to appeal from a decision no matter how arbitrary and contrary to law that decision might be.
The Board appears to take comfort from the fact that no party other than Cleveland has asserted that the language was other than an express waiver of further review (mimeo 5). No party other than Applicant has agreed with the interpretation placed on the language by the Board. NRC Staff and AMP-O have remained silent. The Department of Justice on July 8,1975, filed with the Board a motion for certification of the Special
- Master's findings which at least by implication is an indication that the
Depar+ ment of Justice, like Cleveland, never agreed to waive its right to.
obtain review of a decision by the Special Master.
The City believed that since an appeal of the Special Master's report to the Board would require their review of the documents and thereby com-O promise the Board's position, they agreed only that there was to be no
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review by the Board of the Special Master's decision. There was never an i
agreement; and none was ever intended, to give up the right of review by an Appeals Board and ultimately by the courts. The City believed that such review would not jeopardize the intugrity nf the Board. The City would never have agreed to waive its right to review even if the Board itself had examined the documents. Indeed, it would be improper to have asked the parties to waive the right to appeal a decision of the Board.
The City, in attempting to maintain the integrity of the Board by insulating it from documents which might be privileged and provide a just resolution of the privilege question, assented to reference to a Special Mas te r. Nothing in Chairman Farmakides' statement of the agreement indicated any basis for believing that his view of the agreement was any different than Cleveland's. It now appears that this statement contained
. a latent ambiguity of which the City had no comprehension and to which it had no reason to agree and to which it never would have agreed. The Board interpreted the agreement made by the parties as a waiver of all review by the Appeals Board or otherwise. This interpretation goes far beyond the rationale under which the City had agreed to limit review.
It appears that on this issue there never was a meeting of the minds among the parties. A right of appeal, so fundamental to due pre .ess, cannot be held to be waived by an ambiguous statement. The law is clear on ambiguous s tateme nts. These statements are most strictly construed against the author, Chairman Farmakides, for the Board. While a waiver of a right to review by this Board could and should properly be construed from this ambiguous statement, a waiver of all rights of appeal is more than could reasonably be expected from the City in light of the facts and circumstances set forth above.
It is irrational to conclude that the City was to have review of any and all rulings in the case but agreed to forego the right of review on the matter of privileged documents which could be one of the most crucial matte rs in the case.
Irrespective of the question of review, it cannot be said that the City agreed to waive its rights to have the question of privilege considered in light of the law and evidence presented, and to be accorded due process of law by the Special Master.
The Special Master's disregard for the evidence and law presented i:
by the parties contributed significantly to the denial of due process to the City. One important example of the Special Master's disregard of the clear dictates of law was his finding of privilege under privileges which were l
l' never claimed.
L When the Applicants first claimed privEege as to specific documents, l
they were requested, pursuant to Interrogatory Nos. I and 2, to answer l
specific questions with regard to each document claimed under each privilege.
Based upon the responses to these interrogatories the City prepared briefs and specific arguments as to the documents in light of the answer given and the privilege claimed.
The Special Master found that certain of these documents did not come under the privilege claimod but were within the scope of privileges not claimed. He did so without availing the City of the opportunity to address the documents with respect tc the privilege found and denied the City the opportunity to present interrogatories to CEI, such as Interrogatory Nos.
I and 2, which would explore the documents in light of the specific privilege as se rted.
The errors of the Special Master which the _ City has pointed out are by no standards harmless. They represent errors which are so fundamental to 3 roper adjudication of the issues as to deny the City its rights under the law. The basic question in the hearing is whether the activities of the Applicants under the license would create or maintain a situation inconsistent with the antitrust laws. This question is best answered by a thorough review of the actions and policies of the Applicants to determine if they are using their enormous power in an attempt to restrict competition in violation of the antitrust laws. Such documents as No. 30, entitled " City of Cleveland's Participation in CAPCO"; No. 2108, entitled " Purchase of MELP by a Subsidiary of CEI or Some Other Corporation or Entity"; or No. 2110, l
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entitled "Can Company Subsidiaries Charge Lower Rates Than CEI", could be essential in determining the actual policies followed by the Applicants.17/
The City has been supplied precious little information by which to challenge the assertions of privilege by CEI and the subsequent determinations by the Special Master. From the evidence presented it appears that with respect to an extremely large percentage the analysis of the Special Master was less than that required to give the City its due process of law. The City is left with the feeling that the rules of law and burdens of proof may not have been followed with respect to the analysis given documents as to which the City had insufficient information to make specific challenges. Even though the City was granted an opportunity to point out the errors to the Special Master on June 30, 1975, and did so by brief filed June 27, 1975, the record is still confused with~ errors. The Special Master, atter another
" review" of the documents, again ruled that Document No. 57 was within J:
the privilege, stating:
The first of these is Document Number 57 which is a draft document prepared by Mr. Charnoff and I find as to that document that a work product and an attorney-client privilege should be sustained and this document should have been included in Attachment 3 of my report.
[Tr. 81] .
But then in response to a challenge by the Applicants, the Special Master ruled that Document No. 37 was not privileged. (Tr. 85) l t
l H/ Document Nos. 2108'and 2110 are among those documents to which the l -- Special Master inferred authorship and inferred confidentiality, thereby piling inference upon inference to substantiate his position which was
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not supported by the evidence presented by CEI.
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Cleveland is particularly amazed that the Board would find that the parties had waived all right to review of the Special Master's decision in light of Chairman Rigler's remarks during the June 24, 1975, conference call. M/ The minutes of that c.all state (p. 5):
Mr. Rigler indicated that the Master may have -
made a few minor errors, such as finding privilege to apply on documents for which A; plicants had waived any privilege. He also indicated that the Master and/
- or the Licensing Board should review the Report to eliminate such possible errors. He further indicated
- that the agreement cited in the December 10 Order obviously had to contemplate the presence of certain minor errors and that these wou1J be reviewable. J.9/ ,
. If the parties had obviously contemplated that minor errors would be reviewable, can it seriously be argued that the parties wanted review of minor errors but not of major errors which involve matters so serious as to deny Cleveland a fair hearing ? Obviously it can not. Indeed, Chairman Rigler indicated that review might be had of minor error: by the Board itself even though the entire purpose of referral to the' Special ~ Master was to insulate the Board.
The Board finds fault with Cleveland for not bringing the ambiguity
- of the Board's order of December 10, 1974, to the attention of the Board l B/ During an earlier conference call on June 20, 1975, Mr. Goldberg inquired as to the scope of appeal available and Chairman Rigler i indicated that something less than a blanket appeal of the apprc.ximately 1000 documents would be available. During the June 20, 1975 conference call neither the Chairman nor any party suggested that Cleveland had l waived its right to review. l J/._ By letter docketed June 30, 1975, Chairman Rigler corrected the immediately following sentence in the minutes. Apparently Chairman Rigler approved the minutes set out above as accurately reflecting his remarks.
.. - _.. - - - - . - . - - l
l 4
immediately. In fact, Cleveland had no reason to suppose the Board or anyone else would put su ' a construction on the language until the Special l
Master's decision, which ignored the clear dictates of law, raised the question of review. Cleveland knew it had made no such agreement waiving
~
right of review from the Special Master's Decision. It was only th'en that Cleveland learned that the Board was taking the position that the parties had waived such right of review.
When even the Chairman believed that some review was available under the parties' agreement, how can Cleveland be faulted for the same belief ? Cleveland here is denied review merely because it was injured by big serious errors instead of small ones. It is a strange jurisprudence which permits review of minor errors but precludes review of major errors.
Indeed, it is the flip side of the harmless error doctrine. Here we have a rule that harmless error is the only error that will give rise to review.
With respect to the argument that the same reasons for insulating l
the Board from the documents mandates insulation of the Appeal Board, f
Cleveland submits that the reasons are not the same. Indeed, in following this rationale there could never be review of the Special Master's decision
~.
regardless of any waiver issue. The Board is the initial fact finding body.
l As such there is far more danger of the decision of the Board being colored by viewing documents which may be privileged than there is of the Appeal Board. An Appeal Board is removed from the initial arena of fact finding. i Moreover, the personnel of the Appeal Board may be entirely different by the time this matter ever reaches the Appeal Board on the merits.
The Board's argument that if any review is to be had it should be by the Board and not the Appeal Boa.rd is a Catch-22 argument. Review should be by the Board and therefore one cannot go to the Appeal Board, but the Board will not review. It is precisely review by the Board that the parties sought to avoid. Reference to a Special Master was not simply to relieve the Board of performing one of its functions. It was to isolate the Board from the documents. To that purpose, the parties agreed that recourse should not be had to the Board. C1'eveland is left with the feeling that it will have euchred out of a fundamental right on sheer sophistry.
The Board's final argument that there is little likelihood of any substantial effect on any party's preparation for hearing is nothing more than wishful thinking.
One of the issues formulated by the Board in its Prehearing Conference Order No. 2 is:
. . . has this ability to hinder or preclude competi-tion been exercised for the purpose or effect of elim-inating one or more of the other electric utilities . . . .
Among the documents which Cleveland believes to have been erroneously held privileged are documents dealing with the following subjects:
. , , The submission of the issue of the sale of the Cleveland City Light System to a vote of the people.
Study of the necessity of obtaining Federal Power Com-
- l. mission approval of the acquisition by CEI of the Cleveland City Light system l
l
Study of SEC regulations or statutes with regard to the acquisition by CEI of the Cleveland City Light system.
Study of the Cleveland City Light public employees' retirement system.
Study of a lease-purchase arrangement with respect to acquisition by CEI of the Cleveland City Light System. -
Study of the remedies available to bondholders under the
. Cleveland City Light system first mortgage indenture.
The effect on CEI's mortgage of having a CEI subsidiary buy the Cleveland City Light system.
The above listing is not intended to be complete. It does, however, illus-trate that many of the documents are central to an important issue in this proceeding. These documents represent studies which any utility would make in furtherance of a plan or scheme to acquire another utility. The above-mentioned documents are not simply evidence of an intent to eliminate a competing utility but are a part of the necessary activities in accomplishing the elimination by acquisition of the Cleveland Light system. As such they I
- are not simply evidence but are operative facts.E/ Thus the denial of dis-l covery yith respect to these documents does not merely require Cleveland )
to use other less dramatic evidence of CEI's anticompetitive behavior, it
- precludes Cleveland from offering evidenci of operative facts relevant to ,
1 l
the matters in controversy in these proceedings. l i
- . l M/ The protection of privilege does not apply to operative facts, l
Nor has the taking of depositions been a reasonable substitute for obtaining the documents erroneously held to be privileged. Appendix A to this brief contains pages from the trr.nscript of the deposition of Mr. Donald
~
Hauser, General Attorney of CEI, in which he refused to answer questions relating to the privileged documents, claiming again the privilege erroneously
- sustained by the Special Master. -
It is inconceivable that a party coming before a regulatory agency to seek a license to operate a nuclear reactor would be permitted to conceal evidence of operative facts germaine to the very issues Congress has required the agency to consider prior to granting a license.
The very nature of the documents and their extreme relevance going to the very heart of the proceedings demonstrates the potential for truly exceptional delay or expense that exists if this Appeal Board does not exercise its jurisdiction and review the decisions of the Special Master.
A decision by this Appeal Board now would insure that the documents erroneously found privileged would be available for use by the parties and consideration by the Board at the hearing now scheduled to begin on ,
i
. October 30, 1975.
t I
IV THE SPECIAL MASTER ERRED IN FINDING DOCUMENTS PRIVILEGED AND NOT SUBJECT TO DISCOVERY ON GROUNDS OTHER THAN THOSE ASSERTED BY THE PARTY CLAIMING THE PRIVILEGE.
In approximately 110 cases CEI, in its answers to Interrogatories 1
, and 2, had specifically claimed the attorney-client privilege as to some of the documents and the work product privilege as to other documents.
The Special Master erred in ruling that the documents are privi-leged on privilege grounds not asserted by CEI. Numerous cases hold that if the client does not assert the privilege it is waived. 21/ CEI having waived the attorney-client privilege or work product privilege,
.as the case may be, and the Special Master having found against the particular privilege asserted by CEI, the Special Master could not grant privilege on a ground not asserted, but in fact waived, by CEI.
This result clearly follows from the fact that the claim of privilege must be ' asserted and is only CEI's to assert.b Only in a few jurisdictions may a court of its own motion protect the privilege and then only if the person entitled to assert the privilege is I 21/ Steen v First National Bank, 298 F 36 (8th Cir 1924); Hill v Hill,106 l Colo 492,107 P 2d 597 (1940).
g/ Dean McCormick in his Treatise on Evidence makes this clear by his statement that "[i]t is now generally agreed that the privilege is the l ' client's and his alone. " McCormick on Evidence, $92, p. 192. See
- also Abbott v Superior Court, 78 Cal. App. 2d 19,177 P 2d 317 (1947);
Russell v Second Nat'l Bk, 136 N. J. L. 270, 55A. 2d 211 (1947);
Ex porto Lipscomb, 111 Tex. 409, 239 S. W.1101 (1922).
not present or is not a party to the proceeding.E None of these circum-stances is applicable heie.
With respect to the following numbered documents, CEI claimed attorney-client privilege and waived the work product privilege. The Special Master held the work product privilege to be applicable, although not claimed, and ruled against disclosure of the documents.
109, 110, 151, 171, 599, 603, 608, 611, 613, 614, 617, 714, 890, 891, 2053, 2147, 2161-2166, 3008, 3013, 3014 With respect to the following numbered documents, CEI claimed the work product privilege and waived the attorney-client privilege. The Special Master held the documents to be privileged under the attorney-client privilege.
4, 8, 14-19, 21, 22, 24, 26, 29, 31, 36, 38, 42, 51-55, 57-59, 62, 63, 67-70, 72, 74-77, 81, 83, 84, 89-93, 98, 106, 175, 178, 508, 512, 516, 519, 527, 532, 537, 541-544, 546-555, 558, 574, 577, 585, 588, 620, 635, 650, 722, 7?,4, 727, 3047, 3054, 3055, 3060-3063, 3068, 3072, 3078, 3079 The fundamental principle behind the attorney-client privilege, full and adequate representation, is basic to our judicial system. The privilege is meant to remove any subjective fear or chilling effect that possible dis-closure of the contents of a communication would have upon attorney-client communications, because there can only be adequate representation when j the attorney is fully informed by his client of all of the pertinent facts, both beneficial and detrimental. The privilege thus aids the client by creating the situation where the best representation can be obtained without fear of M/ Tingley v State, 16 Okl. Cr. 639,184 P 599 (1919).
L
repercussion. But the privilege as a catalyst for the free flow of informa-tion from client to attorney for the purpose of obtaining legal advice is not an end in itself, but is for the purpose of enabling the counsel co act in his legal capacity as advo.: ate for the client.
On the other hand, a reasoned and proper disposition of litigation requires that all pertinent information be made available to the trier of fact and all parties. There is presented then the difficult situation of balancing the need for informed counsel against the need for an informed c ourt. Dean Wigmore commented on this problem and stated that:
(T]he investigation of truth and the enforcemen' af testimonial duty demand the restriction, not the
- . expansion, of these privileges. 2,4_/
Dean Wigmore concluded:
Nevertheless, the privilege remains an exception to the general duty to disclose. Its benefits are all indirect and speculative; its obstruction is plain and concrete.
. . . It is worth preserving for the sake of a general policy, but is nonetheless an obstacle to the investigation of the truth. It ought to be strictly confined within the narrowest possible limits consistent with its principle. 2_j/
[ emphasis added)
While case law recognizes that this privilege is applicable to corp-orations, where the requirements of the privilege are met, the fundamental principle behind the privilege -- the removal of the subjective fear in the i
l
( client to permit full disclosure of the facts to his attorney -- seems to lose 24/ 8 Wigmore,- Evidence, $ 2192, at 73 (McNaughton rev. 1961); cited with approval in Falsone v United States, 205 F.2d 734 (5th Cir.), cert. denici 346 U.S. 864 (1953).
25/ Wigmore, $2291, at 554.
/
considerable force when it is applied to a large corporation and is balanced against the need for justice provided by an informed court.
In accordance with Dean Wigmore's suggestion that the privilege be
" strictly confined within the narrowest possible limits," it has b'een well settled that :he burden of proof rests heavily upon the party objecting to the discovery. The cost of depriving a court of pertinent information must not be a mere peppercorn. The party claiming the privilege has been held to 26 the burden of " establishing the existence of the privilege" / and of meeting this burden by a preponderance of the evidence, not by " mere conclusory 4
or ipse dixit assertiens, for any such rule would foreclose meaningful inquiry into the existence of the [ attorney-client] relationship, and any 27 /
spurious claims could never be exposed. "
The rules governing the applicability of the attorney-client privilege and the work product rule are not the same.
The basic philosoply behind the modern discovery rules is that they 28/
should be " accorded a broad and liberal treatment."- This represents the expression of the public policy to provide a just resolution of alllitigation based upon analysis of all relevant facts. This policy requires, as in the case of the attorney-client privilege, that any infringement on the access to information be narrowly applied with the burden of establishing the existence 2j/ 8 Wright 8e Miller, Federal Practice and Procedure, S 2016 at 126 (1970); United States v Johnson, 465 F. 2d 793 (5th Cir. 1972).
E/ In re Bonanno,- 344 F. 2d 830, 833 (2d Cir.1965).
g/ Hickman v Taylor, 329 U.S. 495, 507 (1947).
I of the privilege upon the claimant of that privilege.2 9/ Accordingly the claimant of the privilege must establish, by the preponderance of the evidence, all the elements and facts to show that the particular document 30 /
claimed to be privileged falls within the scope of the rule.
The Nuclear Regulatory Commission has promulgated regulations governing discovery in their administrative hearings. Section 2. 740 General provisions governing discovery, in Title 10 of the Code of Federal Regulations i
specifically sets for the provisions govercing the discovery of " work product."
2 This section is almost a verbatim copy of the Rule 26(b)(3) of the Federal Rules of Civil Procedure except that the Federal Rules require that the documents be " prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative," while Title 10 states " prepared in anticipation of or for the hearing by or for another party's representative. "
9ecause of the similarity of the two sections it can reasonably be assumed that the Nuclear Regulatory Commission did intend and continues to intend'that these rules be given the same import and effect. Accordingly, as there has developed substantial case law under the Federal Rules and the
- rules are essentially identical, we submit that all analysis and case law applicable to the Federal Rules are also applicable to Title 10 of the Code of Federal Regulations.
2j/ 8 Wright se Miller, Federal Practice and Procedure, S 2016, at 126 (1970).
30/ McNeice v Oil Carriers Joint Venture, 22 F.R. D.14 (E. D. Pa. 1958).
r
FRCP 26(b)(3) enunciates two specific requirements which must be met in order to extend the court's protection over documents or materials.
The first is that these items must have been " prepared in anticipafion of litigation or for trial. " Secondly, they must have been prepared "by or for another party or by or for that party's representative." Those documents which do not meet these criteria have been considered " routinely discover-31/
able . " - Those which do meet the requirements are protected from dis-covery unless the party seeking discovery shows a -
substantial need of the materials in the preparation of his case and that he is unable without undue hardship to obtain the substa other means. 32,/ntial equivalent of the materials by A limitation is placed upon documents which may be discovered under this latest provision. This restricts discovery of' any portion of a document which discloses the " mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the 33 /
litigation. "
The predecessor of Rule 26(b)(3) was the qualified immunity set out
. 34 in the leading case of Hickman v Taylor. / In that case the Supreme Court set out a qualified immunity for " interviews, mental impressions, personal l
I 31/ _ Peterson v United States, 52 F.R.D. 317, 320 (S.D. Ill.1971);
Thomas Organ Co. v Jadranska Slobodna Plovidba. 54 F.R.D. 367,
[ (N. D. Ill. 1972).
l 32,/ FRCP 26(b)(3).
3 3 / Id.
i 34/ 329 U.S. 495.
briefs and countless other tangible and intangible"-35/ reflections of the work of an attorney in preparing a case for trial. Under this rule the burden was placed upon the party seeking production of the documents "to establish 36/
adequate reasons to justify [their] production . . ."- presumptively after the claimant of the immunity had shown that the document fell within the protected area.
The basic philosophy behind this qualified immunity and the attorney-client privilege is very similar. The immunity from discovery is meant to remove any subjective fear that "his thoughts and information will be invaded 37/
by his adversary if he records them[. ]"-
As with the attorney-client privilege the court in the Hickman case did not confer a blanket immunity from discovery. In that case the court stated:
Where relevant and non-privileged facts remain hidden in an attorney's file and where production of those facts is essential to the preg / ration of one's case, discovery may properly be had._
While the two rules are not mutually exclusive the actual limits of
-. the privileges are very different. Hickman v Tavlor gave work product protection to the thoughts and mental impressions of an attorney while the attorney-client privilege is for confidential communications from clients and legal advice based on those confidential communications. The party 35 / Id. at 511.
36 / . Id. at 512.
E/ Republic Gear Co. v Borg-Warner Corn. , 381 F. 2d 551, 557 (2d Cir. 1967).
38/ 329 U.S. at 511.
'Ui L #-
claiming a privilege has the burden of proof in meeting all the requirements of the elements of the privilege claimed. The evidence offered in support of one claim may not support the other.
At stake is a question of fundamental fairness to the parties seeking discove ry. Applicants represented by numerous attorneys after many months filed answers to interrogatories asserting certain specific claims of privilege.
The parties seeking discovery then filed extensive briefs applying the law with respect to the privilege's asserted to the facts sworn to by Applicants in support of those claims of privilege.
i Unwittingly the parties seeking discovery were engaged in a futile exercise, for the Special Master in the numerous instances cited herein ignored the claims of the Appli: ants and granted the protection of another privilege not claimed by Applicants. Cleveland and the other parties seeking discovery were never given an opportunity to make argument with respect to privileges not claimed by Applicant. In effect Cleveland has been denied a i
hearing with respect to the privilege applied by the Special Master. Certainly Cleveland cannot be held bound without a review to a decision rendered when Cleveland was denied a hearing. Such a procedure offends fundamental notions of fair play and substantial justice.* . Cleveland has been denied procedural due process.
l As Judge Wyzanski held in the classic statement of the attorney-client 1
I-l privilege, the privilege claimed applies only if it is claimed and not waived.3 9/
L . H/ _ Unite-d State s v United Shoe Machinery Corporation, 89 F. Supp. 357 l (D. Mass.1950).
or -
Even the limited instances in which a judge may assert a privilege not claimed do not admit of denying a hearing to the party seeking discovery.
The law is clear that the Special Master erred in according the docu-ments a protection from discovery on grounds not claimed by CEI.
The Board ordered that the attempt to expand the claim of privilege through Mr. Hauser's affidavit filed after the briefs had been submitted to the Special Master was improper and ordered the Special Master not to consider these expanded claims. Thus the Board recognized that CEI was limited to its original claims, and if the documents were not shown to be privileged as claimed by CEI, they were not privileged at all. Thus the Special Master exceeded the scope of any authority he may have had and his decision with respect to those documents is without any force or effect.
d I
l l
I i
l l
1
)
V .
i THE SPF .L MASTER ERRED IN SUSTAINING l
CLAIMS OF PRIVILEGE FOR DOCUMENTS FOR WHICH CEI WAS UNABLE TO PROVE THE IDENTITY OF THE AUTHOR, THE RECIPIENT, ;
THE DISTRIB UTEES OR THE ADDRESSEES. !
l Cleveland has discussed in Part IV of this brief the burden of proof which must be met by the party claiming a privilege.
In response to Interrogatory Nos. I and 2, the Applicants in various instances were unable to ascertain the name of either the author, assistant, addressee or distributee. These cases were pointed out in Category II of the City's brief entitled List of Documents, By Number, With Respect To Which Report of Special Master is Challenged. -40/ Despite the Applicants' responses that one or more of tb parties to particular documents were unknown, the Special Master erroneously found that these documents were still -
. . . communications among attorneys employed by CEI or between CEI attorneys and their consultants or between ,
CEI officers and employees and CEI attorneys which were made for the purpose of obtaining or giving legal advice
., and which were intended to be confidential and were not distributed outside the CEI ' control group' . ...
[ Emphasis added. ]
The Special Master disregarded the evidence and law and stated that:
While there are too many documents to consider one by one, I drew inferences that if a legal memorandum or a memorandum that appeared on its face to be a legal memorandum was taken from Mr. Hauser's file I inferred that some lawyer associated with him prepared it.
[Empk gis added. ]
4_0) These documents were previously listed in the City's reply brief of May 2, - 1975, and the City's Motion To Strike The Affidavit Of Mr. Hauser, June 5,1975.
I inferred that legal opinions on the letterhead of a particular law firm were prepared by some member of that firm.
I inferred that son e memorandum on which the carbon copy list was in doubt were distributed to persons who were usually distributees in similar documents, that CEI was responsible for. [Tr. 84-87)
The Special Master erred im making these inferences unsupported by and in most cases contrary to the evidence supplied by the Applicants. The Special Master further erred in granting privileged status based upon these inferences rather than finding that the Applicants had failed in their burden of proof.
The use of privilege has always presented the difficult situation of balancing the need for an informed court with the desire to remove any subjective fears which would hinder attorney-client relations or trial preparation. Dean Wigmore has stated that:
[T]he investigation of truth and the enforcement of testimonial duty demand the restriction, not the expansion of these privileges. 4l /
Accordingly he concluded:
Nevertheless, the privilege remains .an exception to the duty to disclose. Its benefita are all indirect and speculative; its obstruction is plain and concrete. . . . It is worth pre serving for the sake of a general policy but is nonetheless an obstacle to the investigation of the truth. It ought to be strictly con-fined within the narrowest possible limits consistent with
- its principle. 42,/ [ Emphasis added. ]
For these reasons it has been held that the party hindering discovery has a heavy burden of proof. The courts have held that the party claiming the 41/ 8 Wigmore, Evidence, $ 2192 at 73 (McNaughton rev. 1961); cited with l approval in Falsone v United States, 205 F. 2d 734 (5th Cir. ), cert. denied, 346 U.S. 364 (1953).
J/ Wigmore, S 2291, at 554.
l 1
l privilege has the burden of " establishing the existence of the privilege"El and of meeting this burden by a preponderance of the evidence, not by " mere conclusory or ipse dixit assertions, for any such rule would foreclose mean-ingful inquiry into the existence of the [ attorney-client] relationship, and 44 /
~
any spurious claims could never be exposed."
In response to Interrogatory No- 1, CEI stated as to numerous docu-ments that the particular author could not be ascertained. Natta v Hogan 45/
is precisely in point and discloses the error of the Special Master's ruling.
In that case a claim of work product was made as to " materials prepared by an attorney during his consideration of a legal problem. "4.5./ The court held that such materials might be within the work product rule but were not entitled to protection because "they were not identified as having been written by any particular attorney. The author [was] not specified"E/(emphasis added). The court specifically distinguished one document within that group as being the notes of a " named attorney." It then concluded privilege should be granted to that document a,s "[i]ts disclosure would invade the mental processes of an attorney working on a legal problem"48/ but as to the other documents the claim of privilege was denied.
.o g/ 8 Wright and Miller, Federal Practice and Procedure, $ 2016 at 126 (1970);
United States v Johnson, 465 F. 2d 793 (5th Cir. 1972).
44/ In re Bonanno, _344 F. 2d 830, 833 (2d Cir, 1965). l 45,/
5 392 F. 2d 686 (10th Cir.1968). ;
46 /- Id. at 693. 'I 47/ Id. at 694. l 48/ Id. at 694.
J 1
l
In the Natta case the documents were claimed to be the work product of the claiming party's attorneys. The identical factual circumstance is presented in this case where CEI refers to "CEI legal staff" or names a law firm but not a "particular" attorney. Without regard for the law as
~.
exemplified by a case with an identical factual situation, the Special Master refused to grant discovery.
The statements made by the Special Master show that his decisions were based upon inferences rather than evidence which CEI had the burden of providing. They also show that the Special Master ignored the law and its principles which required the claimant to specify the "particular attorney" who wrote the document. Additionally, the Special Master found that many of these documents of which the authorship was unknown were not distributed by this unknown author to persons outside the CEI " control group". A deter-mination as to the physical distribution and authorship cf documents of unknown origin and control from its inception is clearly unsupportable and error., These inferences and determinations are equally questionable when they are applied to docurnents to which CEI has stated that the assistant to the author was unknown, and most certainly error when CEI states that either the distributees or addressees were unknown.
The question of distribution is one of the most important elements in the privileges because it goes to the very essence of the concept of confiden-l- tiality. The Applicants have been given the burden of showing that only those i
. entitled under the privileges *. vere allowed to view the documents and that
this confidentiality was maintained. The Special Master's unsupported inferences undercut the essential elements of the privileges and the burden of proof required by the law.
In making inferences for the purpose of developing his own set of facts, many times in direct opposition to the statements and inferences of CEI, the Special Master transcended the role of judge in evaluating the
~
e vidence. His determinations based solely on his unfounded inferences had the effect of shifting the burden of proof to the City. This is clear error of law. Accordingly, the Special Master erred in finding that, as to documents to which the addressees and/or the distributees were unknown, they were distributed "among attorneys" or "between CEI attorneys and their con-sultants or between CEI officers and employees and attorneys" or were "not distributed outside the ' control group'" (Tr. 84-85). By infe rring that the inferred distributees maintained confidentiality, the Special Master piled inference upon inference to reach a finding of privilege. Natta teaches beyond cavil that a privilege may not be predicated upon inferences but must be predicated upon facts which must be proved by the party claiming the privile ge.
S
-, w -
CONCLUSION In these proceedings Applicants are seeking licenses to construct and operate nuclear power facilities. Through the hearing process the Commission will be informed of the facts necessary to the carrying out of its statutory duty to determine whether a grant of a license will create t
or maintain a situation inconsistent with the ratitrust laws. One matter 4
of controversy before the Board is whether Applicants have used their monopoly power to eliminate a competing electric system. Through the discovery process, Cleveland has attempted to discoverwhat the facts are so that the Board and Commission might be fully informed. Applicants have resisted discovery and are attempting to prevent the Board and Commission from obtaining all of the facts. -
The Board delegated a portionof its authority to determine whether certain documents were discoverable to a Special Master. The only legitimacy for the actions of the Special Master arises by virtue of the authority delegated to him by the Board. The Special Master's decision
.. was contrary to law to the extent of demonstrating a disregard for the law.
The Special Master unlawfully granted privilege on bases not claimed by C EI. The Special Master unix + fully found documents privileged for which there was no evidence of authorship, addressees, recipients or distributees.
l l For such documents, the Special Master based his decision on unsupported t-l inferences. The Special Master disregarded rules of law requiring a i
showing that the confidentiality of a document be maintained prior to granting a privilege. The Special Master denied Cleveland a right to a hearing on privileges granted on grounds not claimed by Applicant.
Cleveland attempted to obtain certification of the Special Master's unlawful and arbitrary action. The Board despite the plain error of the Special Master's decision has refused to certify that decision. The reasons stated for the Board's refusal to certify do not support its denial of Cleveland's Motion For Certification. The Board erred in refusing -
to certify the matter.
Failure to obtain correction of the plain error of the Special Master has the potential for causing truly exceptional delay or expense.
The subject matter of many of the documents, many of which are opera-tive facts, is ao central to the issues involved in these proceedings as to deny Cleveland a fair hearing if it does not have access to them.
This Appeal Board has jurisdiction to decide the issues raised by Cleveland in this appeal. Section 2. 730(f) limiting the right to obtain interlocutory appeals applies only to appeals from rulings of the pre-siding officer. It has no applicability to rulings of a Special Master.
.. The only ruling of a presiding officer involved in this appeal is the refusal of the Board to certify. This Appeal Board has inherent jurisdiction to i
review a Board's decision with respect to certification. Assuming, arguendo, th'at Section 2.-730(f) is applicable and would preclude review absent certification. this Appeal Board should exercise its authority to direct the Board to certify the issues raised by Cleveland.
This Appeal Board should not allow the manifest injustice of the Special Master's arbitrary and unreasonable decision to go unrighted.
Wherefore, Cleveland prays that the Appeal Board exercise its
. jurisdiction and review the issues and issue an order setting aside the findings of the Special Master insofar as they accord a privilege not claimed by Applicant, a privilege based on groundless inferences, and a privilege for documents for which there is no evidence of the author, the addres3ee, the distributee, or the recipients.
R ect ully mitted
@ Met ' w N-
.l79 vU g i eu en Goldberg David C. Hjelmfelt Michael D. Oldak Goldberg, Fieldman & Hjelmfelt 1700 Pennsylvania Avenue, N. W. -
Washington, D. C. 20006 Telephone (202) 659-2333 Robert D. Hart 1st Assistant Director of Law City of Cleveland Room 213 City Hall Cleveland, Ohio 44114 Attorneys for City of Cleveland, Ohio August 12, 1975
CERTIFICATE OF SERVICE I hereby certify that service of the foregoing Brief of Appellant, City of Cleveland, Ohio, has been made on the following parties listed
~
- on the attachment hereto this 12th day of August, 1975, by depositing copies thereof in the United States mail, first class or air mail, postage prepaid.
- i v 0- G A David C. Hjelm)dit /
Attachment O
i 1
i i-I.
ATTACHMENT Atomic Safety and Licensing Board Jon T. Brown, Esq.
' U. S. Nuclear Regulatory Commission Duncan, Brown, Weinberg & Palmer Washington, D. C. 20555 Suite 777 1700 Pennsylvania Avenue, N. W.
Mr. Frank W. Karas, Chief Washington, D. C. 20006 Public Proceedings Branch Office of the .5ecretary John C. Engle, President
~
. U. S. Nuclear Regulatory Commission ' AMP-0, Inc.
Municipal Building Washington, D. C. 20555 20 High Street Douglas V. Rigler, Esq. Chairman Hamilton, Ohio 45012 Atomic Safety and Licensing Board Foley , Lardner, Hollabaugh Melvin C. Berger, Esq.
and Jacobs Joseph J. Saunders, Esq.
Schanin Building Steven Charno, Esq.
815 Connecticut Avenue, N. W. Antitrust Division Washington, D. C. 20006 Department of Justice
. Post Office Box 7513 John H. Brebbia, Esq.- Washington, D. C. 20044 Atomic Safety and Licensing Board Alston, Miller & Gaines William T. Clabault, Esq.
1800 M Street, N. W. , Suite 1000 David A. Leckie, Esq.
Washington, D. C. 20036 Department of Justice Post Office Box 7513 John M. Frysiak, Esq. Washington, D. C. 20044 Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Gerald Charnoff, Esq.
Washington, D. C. 20555 Shaw, Pittman, Potts & Trowbridge
> 910 17th Street, N. W.
Benjamin H. Vogler, Esq. Washington, D. C. 20006 Joseph Rutberg, Esq.
Office of the General Counsel Frank R. C1okey, Esq.
Regulation Special Assistant Attorney General U. S. Nuclear Regulatory Commission Room 219 - Towne House Apartments Washington, D. C. 20555 Harrisburg, Pennsylvania 17105
-- Roi ert J. Verdisco, Esq. Thomas J. Muns ch, Jr. , Esq.
Roy P. Lessy,. Jr. , Esq. General Attorney Office of the General Counsel Duquesne Light Company l
Regulation '
435 Sixth Avenue U. S. Nucimar Regulatory Commission Pittsburgh, Pennsylvania 15219 Washingtom D. C. 20555 David McNeil Olds, Esq.
Abraham Braitman, Esq. John McN. Cramer, Esq.
. Office of Antitrust and Indemnity Reed, Smith, Shaw & luClay U. S. Nuclear Regulatory Commission Post Office Box 2009
. Washington, D. C. 20555 Pittsburgh, Pennsylvania 15230
Page2 ATTACHMENT (Continued)
John R. White, Esq. Leslie Henry, Esq.
Thomas A. Kayuha, Esq. Fuller, Henry, Hodge & Snyder Ohio Edison Company 300 Madison Avenue 47 North Main Street Toledo, Ohio 43604 Akron, Ohio 44308
. John Lansdale, Jr. , Esq.
Pennsylvania Power Company Cox, Langford & Brown
- 1 East Washington Street 21 Dupont Circle, N. W.
New C.astle, Pennsylvania 16103 Washington, D. C. 20036 Lee C. Howley, Esq. Donald H. Hauser, Esq.
Vice President and General Counsel Corporate Solicitor The Cleveland Electric Illuminating Co. The Cleveland Electric Illuminating Co.
Post Office Box 5000 Post Office Box 5000 Cleveland, Ohio 44101 Cleveland, Ohio 44101 Alan S. Rosenthal, Chairman Richard S. Salzman, Chairman Atomic Safety and Licensing Appeals Board Atomic Safety and Licensing Appeals Bdc U. S. Nuclear Regulatory Comrnission U.S. Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20$55 Dr. John H. Buck Wi111am C. Parler Atomic Safety and Licensing Appeals Board Atomic Safety and Licensing Appeals Bd<
U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D. C. 20555 washington, D. C. 20555 Dr. Lawrence K. Quarles D r. W. Reed Johnson Atomic Safety and Licensing Appeals Board Atomic Safety and Licensing Appeals' Bdc U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Washington, D. C. 20555 Edward A. Matto Karen H. Ada as -
Assistant Attorney General Richard M. Firestone Chief, Antitrust Section Assistant Attorneys General
. 30 East Broad Street, 15th floor Antitrust Section Columbus, Ohio 43215 30 East Broad Street, 15th floor
~*
Columbus, Ohio 43215
- Christopher R.- Schr'aff, E sq.
Assistant Attorney General Howard K. Shapar, Esq.
Environmental Law Section Executive Legal Director 361 East Broad Street, 8th Floor U. S. Nuclear Regulatory Commission Columbus,_ Ohio 43215 Washington, D. C. 20555 Andrew F. Popper, E sq.
Office of the Executive Legal Director U.S. Nuclear Regulatory Commission ,
Washington, D. C. 20555 l
, _ ~ - - - , - - . g , #
APPENDIX 125 1
. Council or other officials of the City of Cleveland.
2 (Off the record.)
3 0 Did CEI make a study of the logal precedures for 4
r.he sale by the City of Cleveland of its light systen?
5 A ifould you read that question?
6 (Question read.)
7 A Isn't that what we already talked about?
8 0 I am not entirely sure vhother your ansvar : ny hava 9
also gone to that.
10 My question last time was with regard to sub::iissica 11 of the issue to a vote of tha pecple of Cleveland.
12 4
A ch,'I see. I reada auch a study or had such a study 1 -
ma-te .
I4
% tias that study made by sencona working under your 15 supervision?
16 tiR. REYZZOLDG: tTait junt a minute.
II (The witness and Mr. Reynolds conferred.)"
IS 3g, ggfliOLDS:
Let the record chrr 19 '
that at ny request there was a conference but':roca 20 counr:cl and the witness. Thr2 request was i
21 initinted by na becauca I believe wa era g hting l
i 22 into cn crea that involvoz o.tterney-cl/.cnt privile.ca, 8 i
23 .
and I was trying to ancartain fron the witnes 24 -
whe^hc- the pn ticular question ached uc. cr.2 that 25 was entitled to the protection of that privilege .
l ~.
L or not. .
126 1
2 I believe that we are satisfied that tho anmier 3
can be given to the last quostion, but I would like to have it rcread before he answers just to 4
~
5 double-check that.
6 M u stion read.)
- 112. REY 1: OLDS: You r::ay anster that 7
g qucGtion.
9 A Yes.
g w was G a purpo u of dat s M y?
10 MR. REYMOLDS: I'l object to that
. question as being trithin the area of privileged information.
13
- MR. E N FELT: Are you directing 14 ,
him not to ant.wcr?
MR. REYNCLDS: I an directing him not to c 2.cr.
17 ,
G Was any use tr.do of that study? !
IS
- A Yes.
19 O t; hat uso was randa of that studv?
- l 20 ,
!!R. REYROLD3: I'm not clear 21 what you mean by use, l'r. Hjoicfolt. In 22 your qucchien concerned uith the circulatica 23 or distribution of the study, or is ycur qu:stica 21 '
~
concerned with what int:rnal analy:is cay hav'o 25 followed as a rceult cf the studv? -
l 1
127 1
If it goes to the former, I will allow the o
~
. witness to answer. If you are acking him for 3
the information in the latter area, then the claiza 4
of attorney-client privilege is applicable and
. I will instruct his not to answer. .
6 MR. !TJELI7ELT: I am asking una 7
in the sense was any action taken based en the 8
information developed by that study.
9 MR. RE71; OLDS: I will direct the
^
10 witness not to answer that.
11 O Was the information developad by that study, or a la~ copy of that study - that is two questions. I will ask 13 it separate.
14 Was that stud-f ever co runicated to anyone outsido 15 of CEI?
16 Are you including 11R. REY!ioLDS:
17 -
outsido councol in your question or cy.cluding it?
18
!!R. HJEL iFELT: '
I;o, I cm including 19 it.
20 MR. REYITOLDS: That is included.in 21 your question? .
22 !!?.. HJEI2: FELT: Right.
23 !Ut. REY:: OLDS : You rr.y answar that.
l 24 A- It was ccr acnicated to cutcide cOur,cci retained by _
25 CLT but no one olco.
139 1
status of the Cleveland City Light Syste:2 cvor discussed?
2 A No.
3 4 Was that subject ever discussed with respect to the 4
temporary 69 KV interconnection rate?
5 MR. REY:;0LDS: That subject?
6 What subject?
~
7 MR. !!JEL:! FELT: That subject being
. the offect of that rate on the financial status 9
of the Cleveland City Electric Light System.
10 MR. REYNOLDS: That is where we are 11
'having confusion. The effect of what rate?
I2 Are we talking -- you asked eno question in contor.t 13 to the 11 KV transfer and then you referred back I4 to that and then talked about a rate for the 69 15 transfors, and I just want --
/ 16 HR. IIJELIEELT: - I am aching the sar.s 17 question only relating it to the 69 KV fato rather 18 than the 11.W rato.
19 g go, 20 0 Was that same subject discusced vrith respect to the 21 rctos to be charged under the 133 KV interconucction?
l 22 ?. And, again, the question ic?
23 G Tho effect of the rates to be chcr;cd on the fincncici 24 ctatus of the Cleveland Cloctric Light Systen. .
I 25l A. At the time the ratos were being proposed?
l 140 1
2 4 Yes.
3 A IIO
- 4 g uns that subject boon discussed at any tima?
5
& tio, n t really. There have been discussions as to g de oHect of de amounts Mned for mMm on de 7
133 IN line since it was oncrgized in May, and particularly 3
with regard to the er.ount to be billed for cervica provided g over that interconnection in June.
G ng w a did' dose dis assions oc ar?
10 A Between Mr. Howley and cyself and Mr. Moore and myself.
O What was the nature of theco discussions?
(The witness and Mr. Reynolds conferred.)
14 ,
15 MR. ErY2; OLDS: IEt the record chou 16 that I initiated a conferenca with Mr. Hauser und the purpoce of that discuccion was to icquiro whether the que tion uns getting into en arca of attorney-client privilogo..
Mr. Hausar has advised me that we are getting into that arca, and not only in ter=s of the pro-21 sent suit but alco in terrs of other actions that 22 aro pending betwsen the City and The C1cveland 23
- nicctric Illu=inating company
- end in view of that, l 24 L I an instructing the witnacs not to answer the 1 25 questien bccance to do so would invada the atterney-ll
I 141 1
client privilege and we do not wish at this tina 2
to waive that privilege.
8 G Did CEI take ~ or its ccployacs take any action
- 4 as a result of those discussions?
5 MR. REYHOLDS I will instruct 6
the witness not to answer that question on the
~
7 saco ground.
8 G Was the amount of the bill charged for services in 9 June changed as a result of those discussions?
10 MR. REYNOLDS: I will instruct 11 the witnoss not' to answer that question.
12 (The witness and Mr. Reynolds conferred.)
13 !!R. REYNOLDS: I'll instruct him 14 not to answer ethat question. I think that you 15 could reformulate that question so that I would 4 16 not find it objectionable or intruding in the area 17 of privilege. But as formulated I still censider 18 it to be a question that wculd invado the arca of
~
19 privilege.
20 0 Was the bill for June servico ever the 138 KV intar-21 cennoction calculated in a manns: any different than the 22 bills for servica over the 138 107 interconnection in any 23 other month?
24 A. I'm not so sure that it has actual 5.y boon calculated 25 as yet, .but it would be calculated in' the sanc tenner as
153 1
2 fr a the study communicated to anyone outsido of CEI 3
other than outsido counsel?
4 L Not that I rucall.
5 4 Was any use made of the study?
g
.t M mse, h m mdW W me W one dWn my office and possibly tir. Tiouley.
7 4 Wan this study made with r2spect to a =tudy of various alternatives that might be utilized for am.uisi-tion of the Cleveland Electric Light Systen?
A, I can't recall.
11 ,
4 Did CLT :saka a study of the need to obtain the approval of the Federal Power Cc= mission of an acquisition by CEI of the Cleveland City Light Syston?
14 ,
MR. RET:: OLDS: Ju'st a minutc.
15 (Tha witnecs and Mr. Roynolds conferred. )
MR. RETI! OLDS: Let the record shou 17 that I initiated a discuccion with the ui'a^cs IS
, becauso it ic n:y underctanding that the question 19 ,
improves on an arca of cinined privilege, and 20 even m;ro particularly on ctudica which w2re sub-21 mitted to the Special I-: cater ac b2ing privileged, 22 l_ and the privilegcd cini:2 was upheld; and in vicu l 23 l of that, I will instruct the witness not to ro p,nd.
24 HR. !?EL?TELT: Are you new accorting 25 a pr'ivilogo as to whether or not such study v..s ::cdo?
154 1
1
!!R. RCYl; OLDS: I don't believe 2
3 that was the question.
4 MR. HJELMPELT: The question was:
5 id CEI or its e=ployees make a study for the need a 6 to obtain Federal Power Connission approval of
.. acquisition by CEI of the City Electric Light Syctem, or at lonst that is the quantion now.
HR. EnnioLDS: If the question is whether - le+. me havo the question one more time.
11 -
(Question read.)
12 MR. RCYr: OLDS: To the ortant you are 13 ,
asking whether a study was made in this area, I 14 ,
will permit the witness to'anmfe'r that question.
15 A Yes. Such a study was r. 22 cither by attorneys in 16 r.y office or outcido councel retained by CEI.
17 G ttho requested that the study be cado?
18
., MR. REYNOLDSr I will instruct 19
~
the witness not to antnlor that. ~
1 20 l G Was the study shown to any perrons or ec=: mica' cd to i any persons outsido of CEI other than outsido counc :.?
! 22 l
A It was .iot shown or cc:=unicated to anyone cutside 23 l of attorneys in ny office; and, of course, if cne of 24 .
these was prepared by ou tride counsel, they would he.ve 25 seen it. But if it was prepared internally, I don',t
i 4
155 1
believe it was even shown to outsido counsel.
2
% was any use made of that . study?
3 MR. REYNOLDS: I will instruct the witness not to answer that.
S Was any action taken based upon that study?
6 Mn. REYNOLDS: I will instruct the witness not to answer that.
8 g Did CEI or any of its creT<yfaes : aha a study of SEC 8
regulations or statutes with ryard to acquisition of 10 the Cleveland City Electric System by CEI?
11 A Such a study was mado, I believe, by an attorney 12 or attorneys in my office -- or in our offica I should say.
13 At whose request was the study made?
14 MR. RI:Y1DLDS: I trill inn *a-ct the 15 witness not to answer that.
16 Was the study cocetunicated or shown to any persons S
17 outsido of CEI other thztn outside counsel?
1 18 4 no, 19 What was tha occasion for making such a study?
G l '
l 20 MR. REY DLDS: Are you asking when 21' tee study was made or are you asking what circur.-
22 stances precipitated? If it is the former I l 23 krill permit him to answer. If it is the latter 24 I will ask him not to answer. ,
l 25 , I'R. HJELtiFELT: I Eu. asking the lattar:
What were the circu:sstances that precipitsted the
156' 9:4 2 study?
3 11R. REYNOLDS: I will instruct the 4
vitness not to answer that.
5 G. Were any actions t:aken by CEI or its employoos as a
- 08 0 8 I 6 -
7 MR. REY 70LDS: IWL11 instruct the 8
witness not to answer that.
g G Did CEI make a study or -
. : m, just so h 10 record is clear, when I am instructing the witness not to answer, it is based on a claim of privilego, just so it is clear on the record.
I didn't want to go through t!vt whole routine 14 ,
every time. ,
MR. HJEL -TELT ; I understand.
16 MR..REYUOLDS: Ohav.
~
17 G Did CEI or its employecc nahe a ctudy of the Cleveland
, City Light public employees' retirc=ent system?
. A. I recall cuch a study being mada by anettorney in 20 .
an outside law firm retained by CEI.
G Was that study or the recults of that study 23 connunicated to any person or group outsit.a of CEI other 23 than outcidf.: 23unsel?
24 .
A. It was not co==unicated to anyone outside of CEI 25 or anycne within CEI except in our office.
157 1
0 What wero the circumstancos which occasioned 2
.that study to be made? ,
3 MP, REYNOLDS: I will instruct the witness not to answer that.
5
, 4 Was any action taken as amsult of that study by 6
employees of CEI?
MR. REY!! OLDS : I will instruct the 8
witness not to answer that.
8 4 Was any use made of the information obtained in that 10 study by employees of CE7?
11 MR. REYNOLDS: I will instruct the 12 witness not to answer that question.
13 4 Was more than one such study made?
14 A I can only specifically recall the one that I have o 15 referred to.
16 4 Did CEI or its employees make a study of a leaso 17 purchase agreement of the City Electric Light SyGtem?
18 MR. REY ' OLDS : -
Arrangemont you said?
's 19 ggt, trygLp: FELT: Arrange'aOn t.
to A such a study was made by myself anEl attorneys in an 21 outsida law firm retained by CEI.
22 G Was that study or the results of that study
. 23 co:municated to any persons outsido of CEI othcr than 21 outside councol? . .
25 A No . ,
l f
I
158 1
G What were the circumstances which occasioned that 2
study to be made?
3 MR. REYNOLDS: I will direct the witness not to answer that.
. O. Was any use made of the information obtained in that 6
ctudy?
~
7 MR. REYNOLDS: Same instruction.
8 G Were any actions taken by employees of CEI based 9
upon the information obtained in t.h t study?
MR. REYNOLDS: Same instruction.
11 (Off the record.)
12 G Did CEI or its employees make a study of the legality 13 of transisrring City Light Plant debt obligations to the 14 sinking fund and the legality of reimbursing the sinking 15 fund from the City Light operating revenues?
16 MR. R5'.YNOLDS: Let me have that 17 again.
18 (Question read.)'
19 A. I can' t recall that.
20 Q. Did CEI or its employees make a study of the re?,edics 21 available to bondholders under the Cleveland City Light 22 Systcm first nortgage indenturc?
23 MR. REYNOLDS: Does your question I- 24 relato to a possible study between the period. -
l 5 '65 to '757 l
+-
l 159 1
2 MR. HJEL:TELT: My quastion is 3-broader Dan Gat. I assume p u are going M restrict the witness to answer as to that paried?
, 4 MR. REYNOLDS I am so instructing l 5
6
- Y relates to the 1943 bond issue, is that right or 7
8 g
MR. HJELt-FI:LT: No. My question relates to any bond issue. His answer might relate to the '48.
11 MR. REYNOLDSt I thought you said that first.
13 MR. HART: We are still operating 14 7 under that indenturo agree =cnt.
ZIR. RCYliOLDS: I appreciate that, but the reason I asked the questic,a was, the tico i 17 period is -- if we are going back that far, there 18 might have been studies in an earlier timo frane, 10 .
. . that is all.
20 Iet ma have the question so I kno,r .that he is 21 talking about.
22 (Question read.)
23 11R. Rn~ MOLDS: You may respond but 21 . .
confining your roepense fron '65 to the present.
25 A' Yes; such a study was acdc in our office.
l-
160 1
4 What were the circumstances which led to that study 2
being made?
3 (The witness and Mr. Reynolds conferred.)
4 MR. REYNOLDS: Let the record 5
show that I initiated a discussion with the 6
witness and, again, concerning the matter of 7 .
attorney-client work product, privilege, and on 8
the basis of thati disc,2ssion I will instruct the 9
witness not to answer the question because it 10 invadas the area that it is entitled to protection 11 under our clain of privilege.
12 -i -
G Was the inforrcation obtained as a result of that 13 , -
study ever comunicated to Mr. James Nolan?
14 , ,
L No. -
15 0 IIas the information obtained as acasult of that 16 i
study or copy of that study evor bcon nado availabic
! 17 te or discussed with any persons outside of CEI or its 18
., outside counsel?
19 '
A !*o .
. ,,0 O Was any uso made of that study by CEI cr its 21 c=ployecc? -
i 22
!!R. RE* COLD 3 : I will direct the 23 witnass not to answer that question on the grounds
~ 34 of privilogo. -
.>3 G tias any. action taken by c=ployees of CEI based
1 l
l 1
161 2 UPon the information obtained from that study?
3 MR. REYNOLDS: Same instruction.
4 G What was the CEI-MELP Lease Project?
5 A I don't know.
'e 6 4 I am referring to the title or the subject' matter 7
listing of Document No. 2008, for which a claim of ;
8 privilege was made, and that is CEI's document number.
9 Does that refresh your recollection?
10 MR. REYNOLDS: Off the record.
(Discussion off the record.)
G Did CEI make a study or its employcos make a study j regarding the effect on the CEI cortgage of having a CEI subsidiary acquire the Cleveland Electric Light System? -
A Tes. Such a study ucc rrM2 in our office.
And when I refer to "our off3,ce," it was cithcr tho office of Corporate Solicitor, IL.naging Attorncy, or 19 ,
, Manager. .
MR. GREENSLADE: General Attorney.
A General Attorney, right, or Managing Attorney of 22 the Legal Department. And that han been true when I
- . 23 l referred to "our offico. "
24 j l .
G And that would maan under your cupervicion or by ycu?
25 A Yes.
i 1
162 4 What were the circumstances occasioning such
- I
- 3 MR. REYNOLDS: Just for clarifica-tion, since you interjected "under your super-5 6
dire?
7 Do you, when you say "under your supervision,*
you mean by lawyers who were on your staff within the offices that you have described?
TIIE WITNESS: Yes.
11 MR. RLTHOLDS: Go ahead.
12 G Did CEI or its employees study the effect of the 13 . -
CEI mortgage of having
- a CEI subsidiary buy the Cleveland 14 City Light?
15 Oh, that one was answered.
16 A Yes, I believe that was covered.
17 G What were the circunstances which occasioned cuch 18 o study to be made?
19
.. MR. RCYHOLDS: I will direct the 20 witnocs not to answar.
21 G T.'cre the results of that study, the infor=aticn frc t 22 that study, cc=municated t,o any per:cas outside of CEI 23 other than outsido counsel?
l 24 '
l A 17 0 .
25 G Wan any use made of the information developed ,by
163 1
j study?.
2 i E. R- OWs I w M & ect d.3 3
w.ss not to an w .
4 S Were any aedons Wn W GI employees pmucated 5
uPon We results of that s Wdy?
G MR. REYliOLDS: I will direct the 7
witnesa not to answer.
3 4 Who requested that that study be made?
9 MR. REYNOLDS: Same direction.
10 G Did that study have any effect on the corporate policies of CEI?
MR. REYNOLDS: Fnat was that question 13
- again? .
14 ,
(Question read.)
15 HR. P G ; OLDS. . Let's go off the 16 record for a clinute.
17 (Discussion off the record.)
18
- MR. P M IOLDS: I will inctruct 19
.- the witness'not to answer that question.
20 Maybe, for the record, I ought to c:cplain 21 that the instruction is based on the clain of 22 l
privilego that has been ascerted heretoforo.
23 And, as I understand the question, it inevitably 24 .. ~
intrudas into an area which would roe;uire a 25 waiver of the privilogo to ans.rer that questica
-n.- -- -. , - - - . - - - - . , , . , .
1G4 1
responsively and any following questions that 2
might result from thosa answers.
3 MR. HJELMFELT: Hight I incuire
- whether, if I asked the same question with respe et to other studies I have asked about this morning,.
6 on which various occasions privilege has been 7
asserted, that privilege would also be asserted? ,
MR. REYNOLLS: It would. '"ha t was the reason that I tock time to consider the 10 mattei'. It seems to me that if we are going to 11 clainthe privilege, to be consistent and to claim 12 it fully we would have to clain it with respect 13 to that question as to each of the prior studies i 14 as well as to'this study. , ,
15
'l So I would direct the witness not to respond 16 to that same question were it addrecced to each 17 of the prior studiac we havo mentioned as well is as this one.
s 19 MR. HJEIF. FELT: Thank you.
20 0 Did CEI or its employces study the possibic reaction:
21 of City Light employees to a leasing of the City Light 22 System by CEI?
23 A Could I have that question again, please?
I 24 '
(Question road.) -
25 A I can't roca:.,1 such a study.