ML19322C008
| ML19322C008 | |
| Person / Time | |
|---|---|
| Site: | Oconee, McGuire, Mcguire  |
| Issue date: | 10/25/1972 |
| From: | Brand W, Clabault W, Leckie D JUSTICE, DEPT. OF |
| To: | US ATOMIC ENERGY COMMISSION (AEC) |
| References | |
| NUDOCS 7912200726 | |
| Download: ML19322C008 (39) | |
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UNITED STATES OF AMERICA ,
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BEFORE THE ATOMIC ENERGY COMMISSION In the Matter )
- Duke Power Company Docket Nos. 50-269A, 50-270A, (Oconee Nuclear Station ) 50-287A, 50-369A, Units 1, 2 and 3 and ) And 50-370A McGuire Nuclear ) '
Station Units 1 and 2) )
ANSWER OF THE DEPARTMENT OF JUSTICE TO APPLICANT'S OBJECTIONS TO DOCUMENT REQUESTS AND MOTION FOR PROTECTIVE ORDERS i
The Department of Justice hereby answers Applicant Duhe Pcwcr Company's Objections to Dccument Requests and Motion for Protective Orders 4 filed in this proceeding on.
September. 12, 1972. The Department urges denial of 3
Applicant's motion for the reasons specified belcw with regard to each document request and asks the Atomic Safety l and Licensing Board to order Applicant to provide discovery j as sought, pursuant to the Board 's authority under Section 2.740(c) of the Commission's Rules of Practice, I i
10' C.F.R. Part 2, as amended, 37 F.R. 15127, 15133.
The Department further requests that the Board ,
deny Applicant's motion for oral argument. Sections 2.730(c) and (d)' of the Rules express _the policy that a motion and ;
an answer 'should ordinarily be sufficient to permit dis-position of a questica withcut further reply or oral argument.
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There is no need to depart from that policy here. All parties have had ample opportunity to set forth their positions, and postponing decision until oral argument can be scheduled and heard would only delay discovery that the Board has directed be accomplished with dispatch.
Counsel for the parties have~ held three meetings--
on Sept. ember 19, September 25, and October 10--concerning Applicant's objections to and purported difficulties in complying with the first joint request for documents'. As a result the joint discoverers agreed to curtail or modify many of the specific requests so as to substantially reduce the Applicant's burden, and Applicant agreed to comply accordingly. With regard to certain other requests ,
although similar agreement has not yet been reached ,
-' there appears to be a . good possibility of doing so.* The joint discoverers therefore agreed to await Applicant's responses to their latest proposals for modifying these requests prior to seeking a decision and relief from the Board.
The remaining requests are those on which agreement was not reached and.fbrther discussion was deemed unlikely
- These requests are Nos. 5, 6(a), 32, 38, and, with regard to outside directors , Definition No. 2.
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to produce any agreement. They are the subject of Applicant's present Motion for Protective Orders and will be discussed under numbered headings below.
The Department is troubled by Applicant's disclaimer of waiver in footnote 2 to its Objections and Motion. We believe that any claim that a specific document or cate-gory of, documents requested is irrelevant or privileged should be made at this time (except for the requests still under discussion listed above) and the Board's decision thereon must control fut :e production of that document or category of documents. We would certainly oppose relitigating the relevancy or privilege .of documents within the categories which Applicant has agreed to pro-vide or the Board orders to be provided, should Applicant's
' file search disclose particular documents it would prefer, for whatever reason, not to produce. The joint request does not seek any documents protected by the actorney-client privilege, and no objection would be necessary to prevent their. discov'ery.
A recurring contention in Applicant's Objections and Motion is opposition to discovery on grounds that a request improperly " constitutes no more than a fishing expedition," citing Section IV(a) of the Commission's
. Statement of Policy, as amended. 37 F.R.15139 (1972) . '
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I To properly dispose of Applicant's " fishing expedi-tion" accusation, we must consider it, and the Commission's ;
Policy Statement in the context of this proceeding.
Applicant has come before the Commission seeking licenses-- ,
and, more particularly, seeking a finding that the activi-ties under the projected licenses would not create or I maintain a situation inconsistent with the antitrust laws so as to require the imposition of approp.riate corrective license conditions. In this role as proponent of an unconditioned license, Applicant clearly bears the ulti-mate burden of proof.* The Department of Justice recog-nizes d.Tt a certain amount of difficulty inheres in establishing a proposition stated in the negative and, in cooperation with the Commission's Staff, therefore assumed, as its role in the antitrust review, the preliminary burden of making out a prima facie case of antitrust inconsistency. See Attorney General's letters of advice to AEC, 36 C.F.R. 17883, 36 C.F.R. 20256 (1971). The role of the Department is thus substantially inquisitorial in nature--and analogous to that of a grand jury, rather than
- Administrative Procedure Act, 5 U.S.C.A. 5556(d); Atemic 5181, 42 U.S.C.A. 52231; Section 2.732 of the Energy Act;s Rules of Practice ,10 C.F.R. Part 2; Sections Commission V(c)(1), V(d)(1) of the Commission's Statement of Policy, as amended, 37 F.R.15140; Joint Committee on Atomic Energy, Hearings on Prelicensing Antitrust Review, Part 1, p. 81
- (Statement of AEC General Counsel) . ___,.
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that of litigant in an adversary judicial proceeding.
This distinction was explained in United States v. Morton Salt Co., 338 U.S. 632, 640-643 (1950), dealing with powers of the Federal Trade Commission:
The only power that is involved here is the power to get information frem those who
. best can give it and who are m'ost interested in not doing so. Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues in litigation, it does not follow that an admin-istrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function.
It is more analogous to the Grand Jury, which does not depend on a case or co'neroversy for power to get evidence but can investigate merely on suspicion that the law is being vio-lated, or even just because it wants assurance that it is not. 338 U.S. 642-643.
The ultimate burden remains on Applicant and it necessarily includes p'roviding the information required by the Depart-ment (and the AEC Staff) in carrying out their duty of inquiry. Under these circumstances , a certain amount' of latitude in the conduct of discovery, exceeding even that khich might be allowed in a purely judicial context, is necessary and appropriate.
We trust Applicant is not seriously contending that the Department must have in its possession all evidence necessary to establish a prima facie case of antitrust inconsistency prior to rendering its advice to the.
Commission. A requirement that the Department's inquiry 5
be complete at that point in time would place the burden of full prehearing discovery on all license applicants, ;
rather than. merely those for which a hearing is deemed !
necessary. The Commission's Rules plainly envision that detailed discovery on particular matters in controversy will follow an initial, special prehearing conference.
- Section,s 2.740(b)(1), 2.751a.
- 1. Request for Description of Apolicant's Filing System Applicant objects to Request No.' 2 as a " fishing l expedition" to obtain additional issues or evidence. i The ordinary sense of the term is that of an attempt to discover original grounds for a proceeding, or to broaden its scope, by indiscriminately searching an opponent.
Request No. 2 is nothing of the sort. It seeks no new issues beyond those accepted by the Board for purposes of determining the relevancy of discovery in its order of September 20, nor does it even call for any production of evidentiary documents, assuming arguendo that this could somehow be imp' roper. The request is narrowly directed to obtain discovery of information " relevant . co the sub-ject matter involved in the proceeding, , . . including the exis tence , . . . cus tody, . . . and location of any
. . . documents . . . and the identity and location of persons having knowledge of any discoverable matter," as permitted by Section 2.740(b)(1) of the Rules.
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I The joint discoverers desire a detailed description of Applicant's filing system in order to obtain a clear picture of the sources of documents provided in response j to their rnquests--and with it an ability to focus subse-1 quent discovery with the specificity the Board has indi-cated it will require. The information sought is patently
- " reasonably calculated to lead to the discovery of admissi-ble evidence." Jection 2.740(b)(1) . _
, We expressed willingness to accommodate Applicant in reducing any burden of complying with the request as originally written (such as suggesting that the minimum number of documents giving a complete description of the i
filing system would suffice, or that a response might be specially prepared in the form of an answer to an inter-rogatory). App icant, however, was and is adamant in .
denying the relevance of the request in whatever form. :
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- 2. Request for Documents Relating to Applicant's Efforts to Influence Legislative, Executive, Administrative and Judicial Action Applicant objects to producing any documents which 4
it characterizes as " relating to its constitutionally protected right to petition legisictive, axacutive, admin-istrative and judicial officials and tribunals." It thus apparently opposes any compliance whatsoever with
"[a]t least ten of the document requests" because they ~
" seek such d,ocuments on their face," and would undertake to comply only insofar as Applicant deems fit with the i "many other requests (which) will undoubthdly sweep such material into their broad ambit."
Applicant's objection on this point is, in all essential respects, identical to that recently made in f the United States District Court, Middle District of Louisiana, by another electric utility, Gulf States Utilities Company, in opposing discovery by the Depart-ment of Justice of govern'menh-influencing documents
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sought by under the civil investigative demand procedure.
Antitrust Civil Process Act, 15 U.S.C.A. $51311-1314.
The District Court, following submission of briefs and oral argument, rejected Gulf States' contentions and ordered it to comply with the Department's demand. A copy of the court's opinion is attached as Appendix A.
This is the only case directly in point of which we are aware.
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4d As with~ Gulf States, there is staply no merit to Applicant's present objection. The Commission's Rules permit " discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the
" The Rules proceeding. . . . Section 2.740(b)(1) .
certainly do not condition discovery on a prior showing that the requested documents will themselves prove some-thing (for example, that they will on their face demon-strate inconsistency with the antitrust laws). In fact, Section 2.740(b)(1) makes it a point to emphasize that discovery is not objectionable "'[even jgE] the information sought will be inadmissibic ac the hearing if the infor-mation sought appears reasonably calculated to lead to the discovery of admissible evidence." (Emphasis added)
- All that is required, then, is that the matter sought to be discovered be relevant and not privileged.
Both criteria are satisfied here.
Applicant itself has made a compelling case for .
relevancy. By previously raising substantial issucs -
concerning the degree of pervasiveness of Federal and state regulation of its business activities, the appre-priateness of rate schedules presently filed with regulatory bodies in providing its competitors access to the benefits of nuclear generation and high-voltage Ne e .
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transmis'sion, the degree to which regulation restricts its wholesale and retail competition, and the relevancy to the Board's decision of any advantages Government may have conferred upon its competitors -- to mention just a few -- it has brought its own dealings and relation-ships with Government irrevocably into the forefront of this proceeding.
Furthermore, in its present objection on this sub-ject, Applicant carefully points out that "[t]he very nature of Applicant's operations as a public utility in North and South Carolina serves to thrust Applictnt into the political process with great frequency" and goes on to assert that "t.hrough its frequent interaction with various executive, legislative, administrative and judicial forums and officials,. Applicant inevitably participates in a significant way in the political and icgal arena." It is this very fact of constant, intimate involvement with government in Applicant's day to day conduct of business that makes it essential to discover
. and consider its government-influencing activities in this proceeding. They are an inextricable part -- jus t as threads woven into a fabric -- of the total context of Applicant's business conduct which the Board must con-sider in making its antitrust finding. The failure to obtain part'icular desired action _from a legislature, 10 1
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. j executive' official, court or administrative agency could be an important part of the background explaining a decision to subsequently employ other, unlawful means of building a monopoly. Or attempts to influence govern- ,
- ment may shed new light on the purpose and character of 4
prior and contemporaneous conduct -- and perhaps even j give form to an overall plan of monopolization. See, e.g. , American Medical Association v. United States,130 l
j F.2d 233, 250-252 (D.C. Cir. 1942). Documents.concerning ,
1 Applicant's government-petitioning activities may, in
! the Board's discretion, be introduced as evidence of the antitrust inconsistency of other conduct, even though the political activities themselves could not be found illegal.
United Mine Workers v. Penninaton, 381 U.S. 657, 670n.3
.- (1965) .
- Finally, of course, activities ostensibiv
, directed toward influencing governmental action, but in reality a mere sham to interfere with competitors' business relationships may be held to violate the anti-1 trust laws -- or be found incensistent with those laws.
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- ' It would of course still be within the province of the trial judge to admit this evidence, if he deemed it probative and not unduly prejudicial, under the "estab-lished judicial rule of evidence that testimony of prior or subsequent transactions, which for some reason are barred from forming the basis for a suit, may neverthe-less be introduced if it tends reasonably to show the purpose and, character.of the particular transactions under scrutiny."
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Eastern Railroad Presidents' Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 (1961); California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 (1972) .
We cite this last possibility not as an allegation that Applicant's political activities were only a sham,
- but rather to highlight the absurdity of Applicant's claim that consideration of its political, administra-tive or adjudicatory activities is irrelevant to the Board's decision and that discovery thereof should not be permitted.
There remains the question of possible privilege from discovery, and we understand Applicant to contend that a privilege, or something akin thereto, operates in support of its objection here. The argument goes this way: (1) the Noerr and Pennington cases served to wholly immunize Applicant's political, administrative and legal activities from antitrust scrutiny; (2) given this immunity, to permit discovery.of such activities -- and -
particularly access t'o its internal discussions --
, would " chill" Applicant's exerc'ise of First Amendment rights; (3) lacking any compelling interest for discovery,
- Some may have been, e.g., threats to ensnare com-petitors in a web of regulItory and judicial proceedings should they attempt to enter the bulk power supply business. -
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. l the Department cannot require disclosure of Applicant's internal records or any other documents relating to its political, administrative, or litigating activities, i.n the face of this chilling effect.
On examination, Applicant's argument dissolves completely.
First, as our discussion of re2evancy has already indicated, to read Noerr and Pendington as unqualifiedly immunizing all of Applicant's government-related conduct from antitrust scrutiny at the command of the First
. Amendment is a gross overstatement. Noerr simply decided that no violation of the antitrust laws can be found in mere attempts to influence the passage or enforcement of laws and reversed a judgment en_ioining
., such conduct. The Court stated as one basis for its holding th t a contrary construction of the Sherman Act would raise important questions concerning invasion of the First Amendment right of petition. Pennington added tne rule that s.uch political conduct would not be illegal even as part of a broader ccheme of violation.
Neither case even suggested that First Amendment values might restrict or prohibit the mere discoverv of political conduct as sought here; the Penningten footnote cited earlier saw no problem in admitting evidence of such conduct. . ..
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Lacking the necessary-support in Noerr and Pennington, Applicant reaches for the cases that have denied requests ,
for disclosure of information on finding that First Amendment associational rights would be " chilled" by l requiring the disclosure. It boldly steps into 1:he shoes of the individual members of the National Association for the Advancement of Colored People who demonstrated that compelled disclosure of their identity as members would likely bring them irreparable injury in the form of economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility --
and that real fear of such injury effectively impaired their exercise of the First Amendment right of associa-tion for advocacy. See, e.g. , NA ACP v. Alabama , 357 U.S. 449 (1958). The analogy is bizarre, to say the least. Applicant -- a mighty electric utility, with over $2 billion in assets and annual operating revenues in excess of $450 million; member of an industry long feared for its exercise of political power
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- Sc.e 70th Congress ,1s t Sess . , sur-wry Report of the Federal Trade Commission to the Senate of the United States Pursuant to Senate Resolution No. 83, Part 71(a). Efforts by Associa-tions and Agencies of Electric and Gas Utilities to Influence Public Opinion and Report on Publicity and Propaganda Activi-ties by Utilities Groups and Companies (Part 81(a)) , pp. 229-230.
See also the results of the earlier Federal Trade Co= mission investigaticn reported in Federal Trade Commission, Electrical Equipment and Competive Conditions, Senate Doc. 46, 7Cth Cong.
~1st Sess . (1928) , xviii-xix. And see Lobbying and Lobbyists, Senate Report 43, 71st Cen;. 2nd 523s. Part 7.
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to some regulation of that power as a result;* and with, by its own admission, a record of frequent, significant participation in the political arena--now asserts that i it will suddenly be seized with fear to exercise its First Amendment rights if its files on political activity are opened to discovery of relevant matter in this proceeding.
How this could come to pass is not apparent to us.
Mere discovery would neither punish,. nor enjoin (as was sought in Noerr), nor indirectly restrain Applicant's free exercise of First Amendment rights. If discovery is granted, and political material produced is later sought to be introduced into evidence, Applicant would then have the opportunity to argue its inadmissibility as not proba-tive or unduly prejudicial. If the material is admitted as evidence, Applicant would have yet another opportunity to argue its lack of probative value when the Board prepares
,to make its antitrust finding. Any real punishment or other sanction ficwing from the discovery could come only after a Board determination (and probably one or more !
appeals) that what purported to be political activity was l
- Section 12(h) of the Public Utility Holding Company Act of 1935,15 U.S.C. S79.l_(h); see also Southwestern Electric Pcwcr Co. v. F. P. C. , 304 F.2d 29 (5 th Cir 1962), cert denied, 371 U.S. 924 (1962).
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l in fact an unprotected sham, or perhaps that the political activity tended to prove the antitrust-inconsistent purpose and character of other unprotected s-, duct. The only ;
1 possible chilling effect is thus very ren.oce--and would necessarily be the direct. result of applicant's having engaged in unprotceted, antitrust-inconsistent activities.
Applicant simply has not made a reasonable showing that his exercise of First Amendment rights would truly be chilled by its being called upon to make discovery here. All it really claims is the possible embarrass-ment of ' aving its political activities made known.
There is no immediate, irreparable injury of the sort found mrucial in the NAACp cases to justify preventing disclosure.
Even if Applicant's vague protestation of fear and possible embarrassment should its manner of exercise of First Amendment rights be revealed could somchow be deemed a chilling effect, that would not suffice to resolve this -
issue in its favor. ' Discovery may be compelled even in the face of a chilling effect if the Governmant has a legitimate, justifiable interest in making the discovery, and the incidental effect of inhibiting of First Amendment rights is minor in relation to the need for discovery, See Younger v. Harris, 401 U.S. 37, 51 (1971). In this '
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proceeding, the chilling effect on Applicant is negligible or nonexistent. On the other hand, the requested discovery has been shown abo a to be both relevant and necessary for accomplishment of the goals of this proceeding under .
the Atomic Energy Act. The Board shculd deny Applicant's objection and order it to comply with these discovery reques t,s .
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- 3. Request for Documents Relating to Understandings or Arrangements as to Allocation of Service Areas In a limited objection .to Request No. 6(e), Appli-cant contends that documents concerning " territorial assignments' which were undertaken following the enact-ment of specific legislation by the legislatures of North and South Carolina" are products of state action, cannot be violative of the antitrust laws , and therefore "are so clearly irrelevant to any appropriate antitrust inquiry that the Board can properly dispose of the issues raised in the co6 text of objections to discovery." We do not agree.
Even assuming that the territorial assignments themselves were valid state action so as to preclude a finding that they violated the antitrust laws , that is no reason to exclude them from discovery here. They are demo'nstrably " relevant to the subject matter involved in the proceeding"--the test of Section 2.740(b)(1) .
Most important, the Board must determine whether Applicant is responsible for a situation inconsistent ,
with the antitrust laws that may exist in its area. To properly do this, the Board should consider the total context of competitive relationships between Applicant
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and the smaller electric utilities in its area during the periodunderscrutiny._Territorialassignmentsarean l
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integral part of this total context and may therefore properly be considered in evidence by the Board. Whether they are lawful or unlawful in themselves , then, they are discoverable in this proceeding.
Beyond this plainly. sufficient general relevancy, three specific points will serve to emphasize our interest in discovery concerning these territorial assignments.
First, should either the state laws or the territo-rial assignments ostensibly made pursuant thereto purport to cover wholesale sales , they would not be immune from antitrust sanction.* Any such state regulation would be constitutionally invalid under the decisions in Public Utilities Commission v. Attleboro Steam & Electric Co.,
376 U.S. 205 (1964),c and there could be no " state action" justification for wholesale territorial assignments.
Second, it is not entirely clear whether the rele-vant statutes authorized the state commissions to permit private bargaining by the utilities concerned as a first' step in making the assignments directed by the legislatures.
If a state commission's direction to bargain privately 1
- A proviso of N.C. Gen. Stats. , C. 287, Art. 41, 562.110.2(10) seems clearly to exclude wholesale sales from that law's ambit.
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See Georgia v. Pennsylvania R. Co., 324 U.S.'439, 456-463 (1945') . -
Third, the Department's principal concern is not so much with state-approved territorial assignments them-selves , or with their routine Laplementation, 'but rather with the circumstances of private negotiation on the arrangements prior to seeking their approval. Examina-tien of the bargaining process documents might well reveal evidence of Applicant's misuse of its bulk supply or high-voltage transmission monopoly power as a lever to obtain favorable -territorial agreements for presentation to the state commissions. Similarly, applicant's post-approval private use of monopoly power to secure' favorable interpreta.tions of the agreements could also be significant.
As with other requests here objected to, we were and are willing to modify this request in any way practi-cal so as to reduce Applicant's burden of producing the '
"many file drawers" of documents it claims would be involved in complying.
- 4. Request for Documents Concerning Participation in Municipal and Scate Elections While relying primarily on its basic objection to producing " political activity" documents, Applicant also
! opposes Request No.- 16. on the ground that it seeks.'
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production of documents that would be irrelevant to this proceeding even if Applicant's other objection were to be denied. . Applicant would have the Beard limit produc-tion to documants which on their face reflect efforts to obtain a competitive advantage vis-a-vis other electric utilities. Clearly, our request is very much concerned with documents that may evidence such efforts. Not all anticompetitively motivated election activities are overt, however.* Support for friendly candidates may well be given under the guise of taking a position on " issues of more general concern." We therefore believe that granting Applicant's objection would inappropriately foreclose the possible discovery of relevant documents. Further, given the unquestioned fact that largo electric utilities such as Applicant have. traditionally possessed considerable political power--so much that Congress has imposed regu-lation in attempting to control its exercise--it ill behooves Applicant to attempt to characterize this request as yet another " fishing expedition." Finally, we would once again be pleased to cooperate with Applicant in minimizing its feared burden, but not to all-inclusive extent it has proposed here.
- 5. Recuest for Documents Located in Files Designated as Pertaining to Wholesale Customers of Apolicant Applicant h'as objected to producing documents sought by P. cuect ros.13 end 17, claiming a 2 ilure to cdequataly
- See , e . g. , the newspaper report attached as Appendix B..
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designate, describe, or particularize the documents requested. The requests, as modified during discussion by the parties , ask for " designated documents" as required by Section 2.741(a) of the Rules , and " set forth the-documents to be inspected . . . by category, and describe each . . . category with reasonable particularity," as permitted by Section 2.741(c). They call fcr particular .
categories of documents: "[All] documents located iyt the Company's individual files pertaining t:ljeach wholesale
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electric customer of.the Company . . . . " and "[A11] docu-ments located in, the Company's individual files Eartain-ing t:ct Electricities of North Carolina (or its predecessor, North Carolina Municica11v Owned Electric Systems Asscciation); EPIC, Inc.; and Piedmont Electricial Cities
." This is not a " fishing expedition"
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attempting to search indiscrininately and without founda-tien all of Applicant's files , as implied by Applicant's citation of Schwimmer v. United States , in which an "all files" subpoena was quashed.
The designation of documents by their location in the scecific individual files maintained on each of Applicant's wholesale customers ar< patantial conpetitors is most appropriate in this proceeding. The main thrust of the inquiry concerns the various means and techniques by which Applicant is believed to have retained and expanded 22 -
its monopoly of bulk power supply and to have abused that monopoly power in retail competition, at the expense of these very wholesale customers and potential competitors.
Some of these means and techniques are known to the Department prior to discovery; others may not be and we are not at all certain that our other requests will bring dhem all to light. We believe that the surest path to fully discovering the anticompetitive means and techni-ques employed by Applicant over the years in dealing with this ong very limited, class of customers is to obtain the entire record of their day to day relationships, as maintained in the designated individual files.
We recognize that these files could possibly be voluminous; how~ voluminous, we have not been advised.
t Routine billing data 'were originally excluded from Request No. 13 (and are not included in Request No. 17), and we would be quite willing to sample and exclude other repeti-tivg routine documents should their existence be made kn wn to us. Finally, it must be pointed out that all that these requests seek is production of dccuments for inspection. Applicant certainly need not make copies for us , and , in fact, may permit the desired inspecticn without even removing the files from their present location. '
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- 6. Requdst for Documents Asserting or Denying Regulatorv Jurisdiction Applicant has objected to portions of Request No.
30 asking for documents in which it has asserted that Applicant's activities are subject to Federal or state regulatory jurisdiction and pre-1965 documents reflecting its position on Federal jurisdiction.
This request was intended to obtain information with which to flesh out and prepare to respond to Applicant's contentions that pervasive Federal and state ,
regulation of its coordination and pricing policies pre-cludes or limits the Board's consideration of those matters. These contentions make it incumbent upon Applicant to show in this proceeding exactly which of
.- its activities are subject to regulation and by whom.
Documents reflecting the positions Applicant has pre-viously taken en these points, asserting as well as disclaiming jurisdiction, are thus relevant and dis-coverable.
. We agree that production of every dccument routinely
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asserting jurisdiction would be quite voluminous and not particularly useful. It is Laportant, however, that we correctly ascertain Applicant's position with regard to each separate type of activity for which the fact or extent of regulation may be at issue. We therefore 24
request that Applicant be ordered to produce a sample of each differently worded statement it has filed asserting Federal or state jurisdiction, indicating to what specific activities each form of statement pertains.
We also recognize that Applicant may have changed its position on the basic issue of Federal jurisdiction over interstate wholesales of electric energy as a result o'f the Supreme Court's decision of March 2, 1964, ,
in Federal Power Commission v. Southern California d
Edison Co. , ' 376 U.S. 205 (City of Colton) . Colton, how-ever, merely resolved that fundamental,iss,ue. It did not purport to settle all questions concerning the applicability of Federal regulation to all activities and practices of Applicant which may be relevant here.
That being the case, any pre-Colton statements Applicant may have made opposing Federal regulation of particular activities were not necessarily mooted by the decision and could be relevant evidenep in this proceeding. _
Accordingly, we ask that such documents be ordered to be prod 6ced in cc=plicnce with Recuest "o. 30.
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- 7. Request for Duplicate Tax Returns Applicant has contended in this proceeding that Government subsidies and tax and financing advantages enjoyed by municipal and cooperative electric systems are relevant in determining whether Applicant is responsible for a situation inconsistent with the antitrust laws.
See iss,ue I-15 of the Joint Recital. Although we believe such matters are wholly irrelevant to a determination of antitrust violation or inconsistency, we nevertheless recognize that Applicant may persuade the Board to consider ,
them in this proceeding. If so, fair consideration would require the Board to ascertain what sinilar benefits-- ,
including tax advantages--Applicant itself may enjoy,*
and to compare them with those of the municipals and Request.No. 31, to which Applicant now cooperatives. ,
objects , seeks information to enable the Department to respond to this issue Applicant has raised.
- Congressional awareness of and concern with these advantages is evident in the legislative history of the 1970 Amand-ments to the Atemic Energy Act, as 'well as that of the 1954 Act itself. e.g., Joint Committee on Atomic Energy, Hear-ings on Participation by Small Electrical Utilities in Nuclear Power, pp. Rep. Holifield);
100 C.R.11828-11828 1219-1225 (Remarks(1968) of Sen.(Romarks Morse) . by(1954) . i i
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We were and are willing to limit this request sub-stantially so as reduce any burden on Applicant. Federal and state income tax returns are still desired for all years since 1960. For all other returns, we would request that only a list thereof be initially provided, with the opportunity to obtain particular returns or a sampling of returns subsequently. ' Applicant, however, has chosen to object to any production of tax returns whatsoever.
As Applicant admits, despite some judicial reserva-tiens, there 10 no privilege against discovery of retained copies of tax returns. St. Regis Paper Co. v. United States , 368 U.S. 208, 218-219 (1961); 4 Moore, Federal Practice Y26.61 [5.---2] (1971). This is an appropriate case for their production. Applicant itself has tendered ,
the issue of tax advantages , and courts have often seized upon that circumstance to justify ordering the production of returns , Kingsley v. Delaware L. & W. Ry. Co., 20 F.R.D.
156,158 (S.D.U.Y.1957); its absence was noted in the Wiesenbercer and Richland cases cited by Applicant. The i l
tax returns themselves are the best evidence of exactly l
what tax benefits Applicant may enjoy. They show not j only what taxes were paid, but also why other taxes were !
not paid: by specifying the exclusions , exemptions or
- i
\
I 27 l
1 1
l
deductions Applicant has claimed. This evidence is "not readily obtainable otherwise"--the test Applicant would apply, citing Richland. Form No. l's filed with the Federal Power Commission merely state the taxes actually paid; and , unlike the tax returns themselves , do not reveal'how much tax was not paid. ' Regulatory accounting under dhe Tederal Power Act and tax accounting as reflected in the returns are two different animals , and our require-ments deal with the latter. Some regulatory accounts do reconcile differences between the two systems, h, Uniform System of Accounts Nos. 281-283, but they do not purport to show all of them and, .particularly, the vital underlying details of how they arose.
Applicant suggests that Section 2.740(b) of the Rules provides other means of obtaining the desired data.
Section 2.740(b) says only that we may have diccovery of any relevant matter. Perhaps Applicant meant to refer us to Section 2.740b, which deals with interrogatories to parties. Interrogat'ories, however, are not nearly as satisfactory for our purpose as the requested tax returns.
The returns necessarily speak for themselves , while answers to interrogatories would merely be Applicant's conclusions as to tax benefits enjoyed. We wish to argua the tax benefits question from the objective a M 23 e
evidence itself, rather than relying on Applicant's reading ~ of that evidence.
We therefore ask the Board to order compliance uith Request No. 31, modified as suggested above to reduce the burden of production.
- 8. Request for Documents Relatine to Federal Power Commission Proceedings I
Applicant objects to Request. Nos. 6(p) and 37, which ask for documents relating to particular Federal
- . Power Commission proceedings, as attempts "to import into 3 this proceeding the issues and facts which are subjec
- of pending litigation before a sister Federal agency." It professes concern that the documents are sought to j "relitigate" or "cimultaneoucly litigate" the FPC pro-coedings before this Board. .
Wo submit that nothing of the hind is contempla:ed.
] This Board is simply not sitting to decide upon EPIC's j hydroelectric facility application, nor will it approve d
or disapprove Applicant's filing with respect to the wholksale fuel adjustment clause, and we are not aware that any party is here ~ secking to litigate those matters.
The Board does, however, have the jurisdiction and -
duty to find "whether the activities under the license [s]
[ sought by Applicant] would create or maintain a situation ;
inconsiste,lntwiththeantitrust. laws." One issue' pertinent
~
l to the ::ard's d2cicica ic ::hather femlic. nt h n procer cd and micused its monopoly power over hyd cc1cceric 29-
_- ._ f .' . _ _ _ ,,. y -
production by thwarting in various ways potential competing water power projects. Applicant's activities in connection with* EPIC's.FPC Green River application would be relevant evidence on this issue. They might even prove to fall within the " sham" exception of Noerr and California Motor Transport.
- Another pertinent issue for the Board's considera-tion is whether Applicant has imposed a price squeeze upon its wholesale customers / retail competitors; and if so, is that inconsistent with the antitrust laws notwith-standing FPC jurisdiction to determine whether Applicant's filed wholesale rates are "just and reasonable." Appli-cant's rate design studies and documents relating to the decision to file and FPC filing on the wholesale fuel adjustment clause are . relevant evidence on that issue.
They could show, for example , that an anticompetitive purpose and character underlie Applicant's wholesale-retail rate design.
Hydroelectric ' generation and purchase of power at wholesale are two of the avenues normally open to electric utilities seeking respectively to compete in the business of bulk power supply and the retail distribution business. Applicant's efforts in FPC proceedings to deny or unreasonably restrict their availability to ccmpetitors s %w 30 i
orpotentialcompetitorsareclearb.yrelevantinthis proceeding because applicant's fence around the wholesale market would not be complete if hydroelectric power were an available alternative for potential bulk power suppliers; and its fence around the retail market would be incomplete if the wholesale purchase of power on terms permitting retail. competition were an available alternative. The Board should order production of documents called for by Request Nos 6(p) and 37. t
, Respectfully submitted ,
,- - , , , / .
,r (.. c :.->.w..
. . ./ .: - l.
DAVID A. LECKIE WALLACE E. BRAND WILLIAM T. CLABAULT Attorneys , Antitrust Division Department of Justice Dated: October 25, 1972 a
- G g 9 i -g T
n e
a 4
4 .
1
. %.* l APPEl: DIX A trdITED STATT.S DIST2ICI C0iRT l'cp.t.d IdbtLE DIST'.!CT 0." I4fJISIM;A a
Mit:UTE CERY:
Septt ber 1, 1972 WEST, J.
GULF STATES UTILITIE3 CQiPANY versus CIVIL !.CIIS:3 RICWJ.D V. McIA?IN, ASSISTANT ATTO?l:EY CINERAI., ANTI-TRUST W.71-102 DIVI"IOS, C3ITED STATES D::PART-ME!E OF JUSTICE This cause case en for hearing this day en the Goverrceent's petition for ~
caforce. ant of Civil Investigative Oe:and No.1299 of the De;2 rtment of Justice, motion for productica of documents in camera, and nation for costs.
PP.EST.NI: Tes F. Phillips, Esq.
Attorney for plaintiff Wallace E. Brand, Esq.
D**D "
D '9" i
~cw, ;y David A. Leckie, Esq. ,
a Douglas M. Cenzales, Esq.
Hearing was had on the motion of Thc as E. Ia* uper, Assistant Atterney General, Antitrust Division, United States Departant of Justice, te ordcr enforcemsnt of Civil Investi;;ative DmniNo. 1299 vith respect to two categories of docunanta, Lhe production of which was objected to by Gulf States Utilities Company in its Petition for Order to Set Aside or Modify said Civil Investiga -
tive Demsnd, and the Court, after hearing crpsent t.nd considerin ths brief.;
.of counsel, orders the production by Gulf States Ctilities Cc~pany within I,5 days of all documents withhcid by it pursuant to the objections recited in paragraphs 5 (b) and (c) in its Petition fer Crder to Set Aside or Modify said demand; further, the Cvurt accepts fer in-czecra exa.sinaticn. certain docueents furnished by Gulf States Utilities Co pany, the production of which was withheld upon the claim of thm I cttorney-elient prizilege and ths Court's deter-ination of
& c9 r r n t u n i::1 7 c: c; a;. ' ; .; I:::e; L:nic- nr;a * .nc M .;c
=aintaincJ. cr whethar t. print facie case for the exclusion of the privilege t.s centended by the Cwcr:r:e .
Fas been establi hed vill ne deferred until the t .-
WMJt*:.!5*'..of Drq'.ta fi."Nj .p'IttMCD Oncel 20; Gulf States Utilitias
=
O o
, . . . ~
.- e T,
- HI!:UTE C.TRY:
september 15, 1972 CIVIL ACTIO:t kT.ST. J. E0 71-102
. i 2
Company vill be given an opportunity to autmit additional trgu:sent with re-spect to the privile;ed nature of any of tha documents which the Coart, after review, may consider not protected by the attorney-client privilege or subject to an enception to the privilege es c1cized by the United States.
e*thir******
1;ote : .
Paragraphs 5(b) cnd (c) of Gulf States' Petitien, to which the Court makes reference, raad as fo11cus : -
- 5. '
Alternatively, the Damand, each part and paragraph thereof, and the pertinent portiene of each part and paragrcph should be modified and limited to m:clude therefrem the folle. ing:
?
(b) Docu: cats involving .ctivities of and negotiations and dealinzs with governnantel authorities and Netrea.etlities, rhich activities are enempt frem the application of tha antitrust Icus '
and therefere are not p: eper natters for investigation to support the dendnd; ar.d (c) htters rel .tG; to litic ti n. 12;is'atiec snd rqul. nary agency activitics of Petitiener, and actions of Petitioner to influence govern =:ni cetion, which arc activities noe violative of_the antitruct laws and which are protected'under the First Amendment to the ' United Staras Const: .ation and are therefore not proper ente rs for. investi ction to sucport the de cy.,
I d e
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6 0
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to advise the util!!y of his
.S-O3 h .-h , charges in person, said that cven if such a proposal had v b*"C .
been made by the Bozell and Jacobs firm, Florida Power's e.xecutives wculd not neces-
~ vA so-called " Citizens, sarily have ic: lowed the plans Committee" .muid be set up. to the letter. -
By PAUL SCIINITT and -
at Icast one enember cf which g. 7 33 rald*
LAURENCE JOLIDON II would be a secret utility rep- ..g.y, g g p., g of TH pm sM resentative whe wou!d feed for five years and I have yet
- Merida Power Corp. cf St. the commitice informalfoa t see a situation in which a Petersburg, & c e o r d I n g to frcm the company but act as c nt did exactly as his con-documents fr m its own files ther;'h it were hiu onm. s ants suped.
- cf a decade ago, waged a e Prominent citizens in 'He said none of the execu-grandly crehestrated and sue. Winter Gardtn would unwit. !!ves now in contre! at Florida cessful campaign in the early tinc!y be wen ever to act as Power was in a positten to unoffiefai backers of the uti;j. hr.ve handled any such mat.
1%0s to retain an exclusive franchise in a small Flcrida ty and. In some cases. terr at the time c! the Winter city. "prtwned** rpecifica!!y to nm Garden episode.
The papers, released Tees. for effice so as to more efft.
ciently car v cut pubhe po! icy Internal F: r:da P o w e r
- day by State Sen. Gera!d documents, however, ind:cate Lc.vis, a D:rae:tetic cand!. that would favor Dorida that executives of the tulity Power.
date fer the st:tc Public Sets The p!ans were conceived by at thc time v.tre et the Icast viec Commb:ca, who did not gcrking ver'y c!csely with%. -
the New York I:ublic relatier,s reveal his ^ cree fer the docu. te:1 and Jacobs rcecmmenda-mer.ts, utline a p!an under firm cf Borell & Jacobs. hirt4 by Pbrida Pourt in hnd wa;.t ticris. Netes cf a meetin:: httd-whicht cf defeating the charter and in the c!fice cf J. Shir:ey v Tlorida Power stufd panrg e.o cemmt ity term Gracy, then Flor!da Power's ucrk to defeat a prepcMd city in Wi.nter Garden opposed to ser. lor viet president, included
- c. ter in Winter Carde i. 00 I'#PC * - ** I6U *IM P"S^ 05 -+
west of Orlar.6, that weu!d "lT WAS definitely acread T!!E CH Antr.11 was narmw-permit the ccmmunfty to ep. !y apprcred, but the effici:A to ehtain the hefp of Bore!!
crate !!s own (Icctric system ard Jacobs in the formation rather than t;uy p3wer from nho closed Finrida Power's franch!'c were trrnated, s-1 cf the Citizens Committee as
. it.e utility; rt!cred to in their Recem-the S. PeM.ureved utill- mendden. No. H. .'.fr. Gncy v Fo!:ewin:t the approval cf . car ne o.
the charter 1y a narrow mar.
17 *n a '"d
- U#*' * 'O C
- CI gin. F:c-ida l'crer then wnut! in m at an had expirc1 Ba: ell & Jacot s for their as-c.mpaign fer the defeat cf . an year ance in e Nan !w forming the<e city effirials cppeed to v ters cf the ecmmunfty had the Citizens Committee to t% private uti!!!y ine.intainir.,,
a cecul+1 to lave % inter Gir- first eppose t':e propnsed new
,g g nc S Mn cIce char cr at the ecinmg charter v The :$ws in the Winter # -
"I'#'I "* ""d '* * ** I#
Garden area tr.edia would ba I ridi I,curr ykesman the election et favorable can-cartfu!!y mm..ipd to coinci$ .illiarn J hewn, asvrtir: dWtes in the 0:tober c!cc-with an e! .terate advert:siru: that Lewis has made no cffert tie.n. third, to _wntk fer a pos-pitch si.owin: the Flo:ida frandw ctHon and a.
Power frar.thise proposal in franclii<e raitheation.
the best !!ght. ._
' Ww w .
r=
J. Shir'!L racy. who cas with c public comm9r b o previous !ctter d;. red then Floric.a Power's renior a:ainst the Incumbent t.u y - April 18,1961. Gunn. Berell &
vice president enef is nnw re. Comrrission.) Jacobs' representative for the tired in St. Petersburr. could aff we decide la proceed on Winter Garden campalpri, ,
tiot be reached for comment. this premise then Curtis Rib- wrote Crzey that:
cris should draw hack and re- "I judt:e frorn your letter Birther in the notes of the .
that John Partee's resignation meeting, which was hcid May main in the harkctuund from this point on, that is to say and replacement by Lew War.
5.1Mt. Just prior to B,: ell & the organitation of the Cit- den on what is apparently an Jacobs' "Cenlidential Plan of Izens Committee should be interim basis means that the Action" dated May 22. IN1. handled by someone other Mayor plus three of the five appears the passa;:c:
Ihan a Company representa- Commissioners all will be "4. (An A!! Out effort Abould .tive. ciceted this year. If that is so.
be made to present the re* "They feel that the June 13 the enmpany has a once-election of Ma>cr .Clements election is riot critical because in.a lifetime opportunity to re-
. and City Ccmmissincers l'ar- if the City should be taken to verse the city's official atti-tee ar.d Pctris in the O teber court en a contest of the va- tude in a single day - to
. IMI c!cetinn and to replac* lidity of the revenue certifi- change the present lineup of them with randHates favor
- cates based on the present six unanimously hostile offi-able to the Company - but charter. the court would de- cials to a 4 3 rnajority favorl replace them res ir<th a.) cide in favor of the va!idation ahP.- dispesed toward Florida "Mr. Echerts has t<cn unik* any vay. They feel that the Power."
Ing on this remmmcodation only thing to be gained by T gr g lilGit. POWERED cmnstantl) and udl centin"" such court action would be New York puhUc relations in do so. Favnra'da ran II- time, which of course may be firm hired by Florida Power dates nnw In stex in,mac Mr. necessary."
Judson. Monrc. m,nacer of to draw up the Winter Garden LATER fn the May 16 tele- battle stratcry called it "A the Pnue:Is Cond> car . stoic. phone memot Mr. Monte beat Mr. Enter for Confidential Plan of Action:
mayor In IM !.ast year Mr. "They (Boza!! & ,facobs)
, Moore lost in h.is race (cr feel that It is only necessa6 1]e carnpaign would in-valve, according to the secret commissiccer by only fn3:r t 9 to have one man on the Cl-vn es. Another pomhhty is domments:
tizens Commit:ce with whom 7 "A nreparatory stace
, Mr. Incr Mr. . a i t* r'i' we could deal !n . complete g,i::hHnhfed liv a newspaper r'r.ner. Pi:1 arn 'er is ,r ..
con!!denca. This man could be
- n. T. If,nnna - vda everuel' mtvertistne se'rles intended to furnished publicity material inthience the renern! pubhc the Carnera Shep m m er and other assistance if rf.cd Carden. Is w as de ide 1 19 and by Intensive personal-
.bc. which he la turn -would contar-t sotk Amna:: city offi-hyvc P-r!! u Jacobs d att a pass on to the Citizens Com- cim and opin!nn leaders of carrpu:n fer thejomin: c-mittee without their actual the commtmity; inter city c!ct "on howlejce cf its source. This IN A May 16.191 memo- v "Scturing the defeat of particular man. or rarn, could ik i.e.u, ciev charter prcpred randum describet ss con s of te groomed. for candidacy m a telephor e converntic' ha' ,g.,.h 'er Mc i **
- $ e Oc:cher election and his tween John O. Gunn e' IPre'! ;}me or names broucht be- # NU D **
ar..! Jacobs an.1 W. W. Saaw fore the putile as outstandim, y aad mn nf N pet of Florida Power on the sarae -members cf the C:ti: ens C:m- * ' " F # "' w rs p t
- da!c: mi:tcT. civic Icaders, etc." ~ "ubcketed puO.: om,ad "Thev (nerell & Jacobs) fweraHy d,sp::cd i toward.
In perhaps the mest direct think thst there are three CN #
- hirla Power main ohPe*ives for the Coni. # " Replacing the remain-
- 'I'I I^IS Ihen i es ed in sal' pany in teor ! to the Juna !J in t'ece* Incumhent ecmmis-Eg
- t sicacts u-iln new men whn c cetion. nmesv. franchise and the,- co g-
"1. TO FPl.li ibe commuri- have privately shn An a con-ty to the deadvantace of 11e "r .i }l c liat ry attitude toward the City Comn#!cn. {' a !
"4 10 si;T OP or to baem. Fresident of Fb:ida Power. CM"U 7 Winnm:;. a franchise- **
csta51ishir- a hva front
- I' N"#M . "*
renewal election wh!ch will w hich c Mi b'es for II'c O' ro-pc . em d M & k W. provide Florbh twer with a on May 5.1%1:
ter City c!er'!nn ca9 cmerra. .T-year franchire in Winter "3. comilt certain pee;.ta "In ) cur recommendat. inn Garden and eni the threat of in foun. e nmmmuty leviers. No. 4. you stated that >na , n,y.ngg 4.tric ryecm."
aramst the im mntent city ur i!d be clad to draft a ite- AI,Tlict:(;II m!! WON said Commission frec;'e ti!.e Mr. tailed plan for a campa:gn to no current Florb!a Power ex-Movie Pomt.ls Inr etairp'c ciert favorabic public nM.nald enttites were involved in the wh$ may be sn bit:crfy op. tin Winter Gatden). We feci ' W n!cr Garden r.ituat;nn ree-posed to'the char:cr as in be th:.t you , should pir,cced p7,st of a meeting 1:c!l in Gra-out<f4cn
- d s' sad'dedt Fn'T? *'th the preparatmn cvs r.ffice Jare R. IX1 shew g7 n:y Pe a. ~i t: *: :9 of !! 14 ;ian." . t$at S .*,, Iharsmore as ret 111 ac41 le an cpen break ,
present. Drandimore t-as a 7 "TS use th; charter pro- cally states its (fficial posi-
- mernber1f Fbrida Power's posal to diwredit thi present' tion with reepcet ts the char-leg 11 department st that tirne city officials, thus making in+. ter proposa! - that the com-and currently is its chief Icgal cumbent 31ayor 1 C. C!c- pany feels this is a matter of officer. rnents and incumbent City internal munleipal adminis-A key part of the secret bat. Commissioners W. E. Petris tration which prcperly should tie plan. the papars show. and Iew C. Warden easier to be left to the citizens of Win-would be a " citizens commit. deicat on October 4, D61: ter Garden to decide)."
tee" makin; it appear as e "To use the charter cam- The confidential battle p!an thou:h there was a popuhr pal;;q to build popuIar included day-to-day activities uprising etainst the charter stren:tth for the three men ficading right up to the June pmposal. In fact the commit- who will run against the \l3 clectinn 11 years a::o.
Ice was to be uvd as a tool of Slapr and the two Commis- Stay 24. for example, was to Flori<ta Power, whose officiais sinn. rs in October; be the day for " announcement wnuld later refer to !! as the 7 To use the charter cam- ' cf the Committee's organiza ,
" poppet cliirens committee." paica to develop lasting ani. t!cn and ecmposition, by The ta.ik of the " citizens mositics 1,etween the six pres- means of a news release di-committee, arcerding to the ent city cificials and promi- rected to the Winter Garden Ab y 22. 1 %1 " Confidential nent Iceal opinion leaders who Times and the Orange Ccunty Tlan of Arrinn." weuld he to previously have been arrayed section of the Orlando Star defeat a new city charter that with the city adminl<tratten . . . It is not necessary that would have hel;>cd the city's against the Company; , the ori:inal comtesition of t!.e plans in c<tablish its own c!cc- "To make' the charter's Committee be lar;:e: as few trte system. De charter was de! cat appar privately as a as five . . . or perha;'s even basically.a vehicle of reform sign!!! cant reflection of popu- three ... initial members for an antiquated Iccal gw- lar sentiment that Florida will suffice fer a starter, with crnment s> stem. Power's Winter Garden fran- others to be announced as IIOZEl.I,4 Jacobs. Inc., the chise shculd be rer.cwed, and they are added . . ."
,- Park Avenue puh!ic retal;cus as an important indication ' ACColtIIING TO Ti!E Bo-firm, succeste1 the " citizens that the Company's behind- rell and Jacot,s timetab c. ca committee" as a front fur the-scenes political backing is June 2. there was to be pub:i-Florida iPower for two rea- a valuable uset, thus encour- cation "in the Winter Garden sons, acconfin: to the papers: agin:: potential eindidates for Times only of a series of e "That it wouhl be publi: effice not only to wel- small one colu nn advertise-unseemly and probably of came private nrurances of ments. (ach by-!!ned by a
. .doubtM leplity for FicrMa Company support but aim to tnember of the committee cr Power to interver.e openly in follow the Co:npany's strate;:- by a prominent citizen (c4 the June 13 charter election: le recommendatior.s thrcut;h City C:crk E. LT. " Doc" Tan-7 "That the violation of the their campai;:ns. r.cr. Police Chief 5taynard Comp ny interests whieh 7 To uce the charter cam- 31 ann) whose cceperation can would sc.<uit from adoptien of paign to give Florida Power's Le secured by the Comm:ttee the proposed char:er is tot Winter Garden D: strict em- Chairman and whcse partici-sufficiently major to juetify picyes so.ne preliminary ex- pation can detve a wed;:e la the Corapany's mounting a perience with basic p1.itical the ranks of prev!cus compa-public c! fort despite the risks tects ptori to the October 4 ny opponents in Winter Gar. _
of opinien anenation and le::11 municipal campai n and to den." .
challenge inherent in such a - test the political interest. rcil- "Each ad la this series - an tion;" ability and acumen n! the !!!ustrative examp:e of which
.The charter defeat was Com;sany's Wmter Garden is presented as A;Tendix "C" what " Phase Two" was ali crep?oyc.s, a:: tin prior to the -is devoted to en:suion of a
.abcut, but as the confided.at crmcal are:ts of Phase singic point in ep;witi:n to the report explained. It was to !.c .Th ree." charter prorcial?
trented " fund.. men' ally av a Porell and Jacchs, which - nere were su::csted ll.cmes incans to an cml ti c. accont* specializes in the well-being of, for the " testim:nial ads":
plishment el Phucs Three private c!cetric companics. - The City Commission's and Feur), rather than as a mentioned ene m a n e u v e r ri ht to fire the Pelice Cuci su!!!cient end in 1:scif." prior to setting up the citdens without cause.
PlIDEb '111 tit:n ani Fent. :: tup to defeat the rharter. - The
' hurry tp c!cctlen*
accatlin;; to the p an. in- Amt it had idready teen ac- sith inadequata time for chs-volved ous.ti.r: these Winter comp!!<he<!: cussion of the vsues . . . and Garden c!rcted ctficials not "Qt'!ET withdrawal of com- with the voters all owed enly
- favorab!y d!>;osed to Flcrida pany representatives from 43 haurs to renn:er after the
' Power. their Initial position of semi
- e:cetion prochmatica was is-
. It was a trand phn. And public partic:pation in the - sued. .
Be: ell & .lacebs cxprerel charter ca rn;>a h- fit the - "!ntrode-tie s of a city M;x.'t w. ! " w :n 2 i G .: ne! tc..i % n, , ,p.'r in- 3 m3:.cc - :; p. re-:'e 12 D
!cwin:: 3un..ge ' .. s" ia t:.c q.nr:es,1.!crn*a Poce pnh-
. ti.c job whkh t!A Mr.);r and charter cam;'.c: the City Commio;eners %cre
. , elected to da.'"
D**]D ]D'T TfS' ad a m 11#L '
JONU S w!s to he set aside, "At one pcInt the frcort's M C' according t> the battia -)an. . show that a nine-year feastbil, for "rnattin;:, to every resi- lty study on the Winter Car- f 'f h
dent of Winter Carden, cf an den Plant was comptted by obviously inexpensive rews. W. W. Snow, !!. K. McKean ,
print booklet consi< ting al-
. most exclusively of the Com-and A. P. Perez, who is riow board chairman of Dorida $
V.pg{
rnittee's ads in the Winter Power.
Carden Times of June 2 and The study, based on the -
'T e years IfGO 1970, showed that l' r !;
Juric 9." _
And fins!!y. the confidential the plant and distribution sys- A M O U .A v A
plan called on the day after tem would Icse a total of the c!cetiei for "itsuance by $32.9';0 during that period, but Cop:es of the papers record.
the Committee Chairman of a (nat the trend of losing r.toney .ing Dorida Power's secret victory statement hailing the wculd be reversed to makin: plans, obtained by The Times.
result cf the election as a money in IN3. It predicted a were cffertd to the power etr-clear sf n that the peep:e of ' profit of 5SI,000 in 1970. 'poratien Tue.vlay ni:ht. in the Winter Garden intend to re. (There is no indication that interrst ci fairness. After read-tain control cf the p:veesses Peter, r.t the time an en;i- in; them, the power company of municipal government. neer, was aware of the com- Inued this statement:
But the wters, by 56 votes, pany's efforts to influerre the "The controversy over the approve:I the charter. c!cetions.) .
renewal cf a franchise to Her-And two days later six Flor- ida Power by the City of Ida Powee Corporatica execu- Winter Garden some 12 years tives hudd:cd in Vice Prc:!- ago was typical of the bitter dent Gracy's c!fice in St. Pe- : struggle which existed at that tersburg, already at work on time between the advoc:tes of
'an elabor:te plan to turn city , govemrnent ownership of clee-comm!reioners out of office in , trie utihtics and the invester-elections upcoming in Octo- owned companics. Socializa-ber. Internal documents cf the tion c! ine c!cctric uti!ity in-company ref!cet the meetin ' dustry has received new In-takin;; g,: ace. ,
- terest in recent months by MillLC Fhrida Power ! cst proponents cf the populist
. the chartte battle the minutes rn,ovemen t.
of that St. Petersburg meettn; "The Winter Carden fran-
' chie inue was extensively re-clearly refkct the next step:
"It was acreed that the pertevi in the state and local comptny should endeavor to press over a period of severa!
see to it that the commi:: e years.
(the puppet citizens' e mrdt - "De t.o called Dor!da Pow-tec) has gcod groundt, for er paters were removed fecm seeking invalidation for the the ecmpany's fi rs v;! hout charter c!ceti0n' cr at letst .
permissien by a dir; runt!cd ~
contc< tin: it for a receunt cmp?oye prier to his resigna.
. . . everyone a:rced th t the tien scme 10 years ago. The company shcuid do its part in company was later given an the tere:nin;; e!lcri and if opportunity. hut declined to necessaty to kc rp the i= Sues purchue there pycts frem alive, should ser.nar:y consid- the individual, liow the Dade er poin; .vea further than our County etnator came into pos-testion cf the pagrs is a share."
Donald D. lic:ver who was question that rema!ns unan-then pre <ide .: cf ihre!! and sutreJ. et probably will the Jacobs. retired several sea s recorsled actions c! the gev.
aco, arent.l.ra to Don Carh, ernment - ownership oppoal-the ecmpany's execut:ve v!ce tion."
president in Omaha.
John O. Cur:n. the vice Tres.
Ident who cosidtnated the Winter Gao!c's cam;uis;n. fs Dmm no longer with the comp?ny, D 3 ),
. : Carlos sai:1. .
g ]
UNITED STATES OF AMERICA BEFORE THE ATOMIC ENERGY COMMISSION In the Matter )
DUKE POWER COMPANY Docket Nos. 50-269A, 50-270A 50-287A (Oconee Units 1, 2 & 3, 1 50-369A, 50-370A McGuire Unita 1 & 2 ) ,
CERTIFICATE OF SERVICE I hereby certify that copies of ANSWER OF THE DEPARTMENT OF JUSTICE TO APPLICANT 'S GBJECTICNS TO DOCUMENT REQUESTS AND MOTICN FOR PROTECTIVE ORDERS, dated October 25, 1972, in the above captioned matter have been served on the following by deposit in che United St~ates mail, first class or air mail, this 25th day of October:
Walter W. K. Eennett, Esquire J. O. Tally, Jr., Esquire Chairman, Atomic Safety and J. A. Ecuknight, Jr. Esquire Licensing Board Tally, Tally & Bouknight Post Office Bo:: 185 Post Office Drawer 1660 Pinehurst, North Carolina 28374 Fayetteville, March Carolina 28302
' Joseph F. Tubridy, Esquire Troy B. Conner, Esquiro 41C0 Cathedral Avenue, N. W. Reid & Priest Washington, D. C. 20016 1701 K Street, N. W.
Washington, D. C. 20006 John B. Farmahides, Esquire Atcaic Safety and Licensing - Joseph Rutberg, Esquire Board Panel Benjamin H. Vogler, Esquire U. S. Atomic Energy'Com=icsion t- Antitrus.t Counsel for AEC -
Washington, D. C. 20545 Regulatory Staff U. S. Atcmic Energy Commission Carl Horn, Esquire Washington, D. C. 20545 Presidenc', Duke Pcwer Ccmpany Charlotte, North Carolina 28200 Mr. Abraham Braitaan, Chief Office of Antitrust and William H. Grigg, Esquire Indemnity Vice President and General Counsel U. S. Atomic Energy Ccmmission Duke Power Ccepany Washington, D. C. 20545 422 South Church Street Charlotte, North Carolina 28201 David Stover, Esquire Tally, Tally & Bouhnight William Warfield Ross, Esquire 429 N Street, S.W.
George A. Avery, Esquire Washington, D. C. 20024 Keith Watson, Esquire Toni K. Golden, Esquire Atomic Safety and Licensing Ucid, Harhrader t 7 :: 2c2rd ?rnel 1220 Min::2:ar; der:at, S . II . 'J. S. .t.:: :: En:.r:v Ccmaissica Washington, D. C. 20036 -
Sashington D. C. f0545
Mr. Frank W. Karas , Chief Chairman, Atomic Safety and Public Proceedings Branch Licensing Appeals Board Office of the Secretary of U. S. Atomic Energy Commission the Commission, Washington, D. C. 20545 U. S. Atomic Energy Catemission Washington, D. C. 20545
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. Davio A. Leci:2.e Attorney. Antitrus t Divisior'-
apartment of Justice
, dash 2.ngton, D. C. 20530 f
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