ML19319C567

Motion for Protective Order.Certificate of Svc Encl

ML19319C567
Person / Time
Site:	Davis Besse, Perry
Issue date:	09/09/1974
From:	Berger M, Charno S JUSTICE, DEPT. OF
To:	Atomic Safety and Licensing Board Panel
References
NUDOCS 8002191004
Download: ML19319C567 (13)

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UNITED STATES OF AMERICA ATOMIC ENERGY COFDfISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )

The Toledo Edison Company The Cleveland Electric Illuminating ) Docket o. 50-346A Company )

(Davis-Besse Nuclear Power Station) )

The Cleveland Electric Illuminating Docket Nos. 50-440A Company, et al. ) and 50-t'1A (Perry Plant, Units 1 and 2) )

MOTION BY THE DEPARTMENT OF JUSTICE FOR A PROTECTIVE ORDER Pursuant to Section 2.740(c) of the Commission's Rules of Practice (10 C.F.R. $2.740(c)), the Department of Justice hereby moves the Atomic Safety and Licensing Board (" Licensing Board")

l for a protective order limiting the scope of discovery against l

the Department as to certain matters. On August 26, 1974, the Department was served with Applicants' Initial Interrogatories l and Request for Documents for the Department of Justice and the AEC Regulatory Staff (" Discovery Request"). The Department's objections to the Discovery Request are set out below.

The Department objects to the definition of the Department of Justice concained in Applicants' Discovery Request. This definition, which refers to "the Department of Justice, any department or subdivision thereof, and any person employed by, 8002191 Coy

or acting for or on behalf of, the Attorney General or the Depart-ment of Justice," is unduly burdensome in terms of the file search it would entail. A literal interpretation of this language would require a document search in every office and division of the

• Department of Justice in Washington and throughout the country.

Below-signed counsel for the Department believe in good faith that all documents relating to the competitive conduct of the Applicants are located within certain specific Departmental files.

Counsel,' after inquiry, are unaware of the existence of any docu-ment responsive to the Applicants' Discovery Request located in other than the files of the Public Counsel & Legislative Section of the Antitrust Division in Washington, D.C., the Cleveland Field Office of the Antitrust Division in Cleveland, Ohio, and the general files of the Department in '4ashington, D.C. , relating to the matters handled by these two offices.

The Department, therefore, requests that the Licensing Board issue a protective order which provides that the Department be required only to search the aforesaid Departmental files in order to fully comply with the Applicants' Discovery Request. The Department would, of course, agree that if, at any time during this proceeding, it becomes aware of documents responsive to the Applicants' Discovery Request which are not contained in the aforesaid files, such documents will be immediately made avail-able in response to the Discovery Request in conformity with the Commission's Rules of Practice and any orders relating to discovery in this proceeding.

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Those portions of the Discovery Request relating to documents are not limited by a statement of any chronological scope of production. While Items 2, 4, and 7 require only documents spe-cifically relating to the Davis-Besse and Perry advice letters, Items 8 and 9 could be argued to require the production of 2very document in the possession, custody or control of the Department of Justice relating to the Applicants' operations or activities, regardless of the date on which that document was prepared, sent or received. The sweeping nature of this request would require an extensive document search by the Department which would yield little, if anything,.of relevance in this proceeding. The Depart-ment, therefore, requests that the Licensing Board issue a pro-tective order specifying that the Applicants' documentary dis-covery against the Department requires only production of documents made, sent or received by the Department from the first day of the year in which the inquiry related to the Davis-Besse proucad-ing was begun until the date of request (i.e., January 1, 1971 to August 26, 1974)

III Item 5 of the Discovery Request asks the Department to "de-scribe in detail each activity engaged in by the Applicants . . .

which DOJ . . . allege [s], or will allege, to be inconcistent with the antitrust laws . . . " and requires the Department to specify in detail the nature and time period. of each activity and whether it was engaged in singly or in concert with others.

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Clearly, it is not possible at this time for the Department to specify each of the Applicant's activities which creates or has created an inconsistency with the antitrust laws. Pursuant to Section 105 of the Atomic Energy Act, as amended, the Depart-

, ment is required to furnish antitrust advice to the Commission concerning each application for a license under the Act. Prior to rendering such advice on the Davis-Besse and Perry applica-tions, the Department conducted inquiries in which, among other things, it corresponded with smaller utilities located in or adjacent to the service areas of the Applicants. The product of these inquiries was a number of allegations concerning the Applicants' competitive conduct vis-a-vis the smaller utilities.

These allegations were then discussed with the Applicants who did not, in the Department's ' view, refute them. The Department, therefore, advised the Commission that our inquiry had uncovered allegations which required that an antitrust hearing be held on the Perry application in order to determine whether a situation inconsistent with the antitrust laws would be created or main-tained by the unconditioned granting of the subject license.

The Department does not believe that prior to rendering its advice letter it must have conducted exhaustive investigations and secured complete evidentiary support for all of the allega-tions mentioned in the advice letter.which appear to raise anti-trust questions. Only after discovery has been completed will the Department be in a position to enumerate each of Applicants' activities which is an ele =ent of a situation inconsistent with the antitrust laws and to supply the requested details concerning 4 .

such activities. It is essential to the proper development of ,

evidence in this proceeding that the Department not be estopped from presenting later-obtained evidence concerning facts which it is not now in a position to specify in a detailed manner. The Department, therefore, requests that the Licensing Board issue a protective order which makes clear that the Department will be required to answer Item 5 with only such information as is in its possession on October 31, 1974. The D,epartment is agreeab'.e to being placed under a positive obligation to modify c e supplement its initial response to this interrogatory at the time s-:atements on ultimate issues are due to be heard on January 10, 1975.

This position is in accord with the generally recognized requirement that a party is required to answer interrogatories only with the information in its possession and that those answers should be updated as additional information becomes available.

4A Moore, Federal Practice 1 33.25, 33.26; 2A Barron & Holtzoff, Federal Practice and Procedure $$768 and 777.1. See also Sec-tion 2.740(e) of the Commission's Rules of Practice (10 C.F.R. 52.740(e)).

IV Item 6 of the Discovery Requests ask, the Department to specify its contentions concerning nexus with respect to each activity.the Department has listed in response to Item 5. Clearly, if it is premature to require a detailed statement of activities inconsistent with the antitrust laws prior to an assessment of the materials obtained through discovery, it is doubly pre-mature to require highly specific statements of nexus concerning 5

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those activities which have not yet been identified. Further, the, ,

Department has not yet undertaken the preparation of studies and expert testimony which would delineate and make specific our contentions concerning nexus. Such an analysis should be com-pleted by the date on which the Department is required to file its written testimony. Therefore, the Department requests that the Licensing Board include in the requested protective order a provision which allows.the Department.to make an initial tentative answer en October 31, 1974, concerning its contentions regarding nexus with respect to those activities preliminarily identified 1

The Department would assume a rositive in response to Item 5.

l obligation to modify or supplament this initial response by a i more detailed answer on February 20, 1975.

I V l The Department objects to Item 10 of the Discovery Request because ve have not yet formulated any conditions which we will seek to have imposed on the subject licenses. 1/ As previously indicated, the Department is not now in possession of all relevant evidentiary material relating to the Applicants' activ-ities and has not yet conducted studies which would define the impact of these activities on the competitive situation. Prior to the formulation of a specific position by the Department on 1/ Since, both prior and subsequent to the Perry advice letter,

.a Department has engaged in discussions witn the Applicants concerning the possible settlement of some of the issues raised in this proceeding, the above statement should not be taken to mean that the Department has given no consideration whatever to the question of the areas in which relief might be appropriate.

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N the merits, let alone a determinaticn on the merits by the .,

Licensing Board, an interrogatory going to the specific and detailed relief which would be appropriate in this proceeding is clearly premature. The Department, therefore, requests that the Licensing Board include in the protective order a provision indicating that discovery may not be had on this issue at this time.

VI The Department also objects to Items 12 and 13 of the Dis-covery Request as premature. The Department informed the Commis-sion in its Perry advice letter (Part III, paragraph 3, page 4) that it had been informed by Painesville that unless the City "can secure either access or ' interconnection and coordination, it will be unable to remain a viable competitor." In the Perry advice letter (Part III, paragraph 5, page 4), we also noted that the City of Cleveland had alleged that "without coordination, including wheeling, reserve sharing, and joint planning of and participation in large-scale generating units, it cannot continue to compete with CEI."

In each case, the Department specifically identified the information as an allegation coming from a third party. In effect, although it did not have sufficient evidence to say with certainty that the allegations were meritorious, the Department advised the Commission that the allegations appeared to be serious, not frivolous, and that a hearing would be necessary to resolve the issues raised. The Department will not be in a position to 7

- r formally state its views on the merits until it has had the ,

opportunity to evaluate the materials received in response to our discovery requests of the Applicants, and to have the benefit of study of some of these materials by experts.

The Department, therefore, requests that the Licensing Board include in the requested protective order a provision allowing the Department to make initial, tentative answers to these inter-rogatories on October 31 and to modi 5y or supplement these initial responses with more detailed answers on February 20, 1975.

VII The Department objects to Item 15 for the same reasons set forth in relation to Item 6 and seeks a sLmilar order fram the Licensing Board.

VIII The Department objects to Item 16 fer the reasons set forth in relation to Item 10. In the Perry advice letter (Part III, paragraph 11, page 7), the Department noted ". . . the Department is not convinced that CEI is fully prepared to cammit itself to grant access to either coordination or large-scale nuclear genera-tion in a manner which would be free of anticompetitive effect."

(emphasis supplied). There, the Department evaluated a specific proposal and indicated that the Applicant was not willing to grant access in a manner free from anticompetitive effect. Such an evaluation is a far cry from the Applicants' present request that the Department specify a ' pro-cobpetitive method of providing access. Therefore, the Department seeks a protective order from 8 -

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the Licensing Board of the same nature as requested with respect N '

to Item 10.

IX Lastly, the Department objects to Items 3, 4, 7, 8 and 9 of the Discovery Request insofar as a response thereto would include production of (1) documents which have been supplied to the Department by Applicants, (2) correspondence between the Department and Applicants, and (3) materials that have been filed  !

with the Licensing Board in this proceeding. I Documents which have been supplied to the Department by -

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1 Applicants include (1) materials requested by the Department and submitted by the Applicants which relate to the Department's anti-trust review of the Davis-Besse, Beaver Valley and Perry applica-1 I

tions before this Commission, (2) materials produced by the Applicants pursuant to Civil Investigative Demand Numbers 1220,

1223 and 1225, (3) materials relating to Cleveland v. Cleveland Electric Illuminating Co. , Federal Power Commission Docket Numbers 1

7631, 7633, and 7713, (4) materials rel.ating to Cleveland v.

Federal Power Commission in the United States Court of Appeals 1

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- for the District of Columbia, Docket No. 73-1282, and (5) corre- l spondence between The Cleveland Electric Illuminating Company and )

I the City of Cleveland.

There would appear to be no sound reason for requesting pro-duction of the hereinbefore noted categories of materials since Applicants obviously already have these materials in their pos-session. The Department, therefore, requests that the Licensing 9 i l

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. e Board include in the requested protective order a directive that the Department need not supply copies of documents submitted to the Department by one or more of the Applicants.

Respectfully submitted, QA at w

Rf. _

Steven M. Chdrno Jd* d / M%'

Melvin G. Berger" Attorneys, Antitrust Division Department of Justice Dated: September 9, 1974 e

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- UNITED STATES OF AMERICA ATOMIC ENERGY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of )

The Toledo Edison Company The Cleveland Electric Illuminating ) Docket No. 50-346A Company )

(Davis-Besse Nuclear Power Station) )

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The Cleveland Electric Illuminating ) Docket Nos. 50-440A Company, et al. ) and 50-441A (Perry Plant, Units 1 and 2) ) 1 CERTIFICATE OF SERVICE I hereby certify that copies of MOTION 13Y THE DEPARTMENT OF JUSTICE FOR A PROTECTIVE ORDER have been served upon all of the  ;

parties listed on the attachment hereto by deposit in the United States mail, first class or airmail, this 9th day,o' '9ptember 1974.

delvin G. Berger Attorney, Department of Justice Antitrust Division l

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ATTACHMENT

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N John B. Farmakides', Esq. \ Benj amin H. Vogler, Esq.

Chairman Robert J. Verdisco, Esq.

Atomic Safety and Licensing Andrew F. Popper, Esq.

Board Office of the General Counsel U.S. Atomic Energy Commission U.S. Atomic Energy Commission

, Washington, D.C. 20545 Washington, D.C. 20545 John H. Brebbia, Esq. Gerald Charnoff, Esq.

Atomic Safety and Licensing William Bradford Reynolds, Esq.

' Board Shaw, Pittman, Potts &

Alston, Miller & Gcines Trowbridge 1776 K Street, N.W. 910 Seventeenth Street, N.W.

Washington, D.C. 20006 Washington, D.C. 20006 Dr. George R. Hall Lee C. Howley, Esc.

Atomic Safety and Licensing Vice President & General Counsel Board The Cleveland Electric U.S. Atomic Energy Commission ___ Illuminating Company Washington, D.C. 20545 Post Office Box 5000 .

Cleveland, Ohio 44101 Atomic Safety and Licensing Board Panel Donald H. Hauser, Esq.

U.S. Atomic Energy Co= mission. Corporate Solicitor Washington, D.C. 20545 The Cleveland Electric Illuminating Company Frank W. Karas Post Office Box 5000 Chief, Public Proceedings Cleveland, Ohio 44101 Staff Office of the Secretary John Lansdale, Jr. , Esq.

U.S. Atomic Energy Commission Cox, Langford & Brown Washington, D.C. 20545 21 Dupont Circle, N.W.

Washington, D.C. 20036 Abraham Braitman Office of Antitrust and Chris Schraff, Esq.

Indemnity Office of Attorney General U.S. Atomic Energy Commission State of Ohio Washington, D.C. 20545 State House Herbert R. Whitting, Esq.

Robert D. Hart, Esq. C. Raymord Marvin, Esq.

Law Department Deborah M. Powell, Esq.

City Hall Antitrust Section Cleveland, Ohio 44114 8 East Long Street Columbus, Ohio 43215 Reuben Goldberg , Esq.

David C. Hjelmfelt, Esq. Leslie Henry, Es.1 1700 Pennsylvania Avenue, N.W. Fuller, Henry, Hodge &

Suite 550 -

Snyder Washington, D.C. 20006 300 Madison Avenue Toledo, Ohio 43604

- , . . . r John R. White, Esq. ,

Executive Vice President Ohio Edison Company 47 North Main Street Akron, Ohio 44308 Dcvid M. Olds, Esq.

Reed, Smith, Shaw & McClay 747 Union Trust Building Pittsburgh, Pennsylvania 15219 Mr. Raymond Kudukis Director of Utilities '

City of Cleveland __.

1201 Lakeside Avenue Cleveland, Ohio 44114 Wallace L. Duncan, Esq.

Jon T. Brown, Esq.

Duncan, Brown, Weinberg

& Palmer 1700 Pennsylvania Avenue, N.W.

Washington, D.C. 20006 John Lansdale, Esquire

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Cox, Langford & Brown 21 Dupont Circle, N.W.

Washington, D.C. 20036 f bl 1

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