ML19323B567

Memorandum in Opposition to Petitioners' Memorandum of Addl Authorities Per Aslab 800328 Order Re Privilege Against Discovery of Settlement Documents.Immediate Production Should Be Compelled.Certificate of Svc Encl

ML19323B567
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	04/09/1980
From:	Dopsovic D, Luque N, Parmenter F JUSTICE, DEPT. OF
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
References
NUDOCS 8005130608
Download: ML19323B567 (9)

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A T/C 8 0 0 513 0.{,C77 UNITEP STATES OF AMERICA NUCLEAR f.EGULATORY COMMISSION t

Before the Atomic Safety and Licensing Appeal Board In the Matter of )

HOUSTON LIGHTING & POWER ) Docket Nos. 50-49BA COMPANY, et al. (South ) 50-499A Texas Project, Units 1 )

and 2) )

)

TEXAS UTILITIES GENERATING ) Docket Nos. 50-445A COMPANY, et al. (Comanche ) 50-446A Peak Steam Electric )

Station, Units 1 and 2) )

MEMORANDUM OF DEPARTMENT OF JUSTICE IN RESPONSE TO PETITIONERS' MEMORANDUM OF ADDITIONAL AUTHORITIES SUBMITTED PURSUANT TO THE APPEAL BOARD'S MARCH 28,1980 ORDER Pursuant to the March 28, 1980 Order of the Atomic Safety and Licensing Appeal Board (" Appeal Board"), the Department of Justice (" Department") submits this Memorandum in Response to Petitioner's Memorandum of Additional Authorities. On March 28, 1980, the Appeel. Board requested the parties to provide any:

" additional authority as to whether the courts do or ought to recognize the existence of a privilege against discovery of documents (containing otherwise discoverable information) because of a relationship of one kind or another between those documents and the settlement process." (emphasis in original)

The Order permitted the parties to file an initial brief by April 4, 1980, and a responsive brief by April 9, 1980. Department did not file an initial brief pursuant to this Order because the l -

Department's initial pleadings in this appeal discussed all of the authorities which the Department believed were relevant to the Appeal Board's Order of March 28. After reviewing the pleadings filed by Petitioners in response to the March 28 Order, the Depart-ment continues to believe that there is no judicial or statutory l precedent which recognizes a privilege against " discovery of

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• documents (containing otherwise discoverable information) because of a relationship of one kind or another between those clocuments and the settlement process." As demonstrated below, the I authorities cited by Petitioners simply confirm the exis:ence of a limited " settlement privilege" at the discovery stage which shields only those portions of documents that contain offers of settlement, i

i but does not bar disclosure of factual information contained in i any such documents. Accordingly, the Department urges the Appeal Board to affirm the Order of the Atomic Safety and Licensing Board

(" Licensing Board") which requires production of factual informa-tion contained in documents that may also contain settlement offers.1/

Petitioners' pleadings raise essentially three arguments:

(1) that a "settl'ement privilege" exists which shields from l

i 1/ The assertions contained in Houston Lighting and Power Company's

("HL&P) April 7, 1980 motion to preclude the Department from j filing a brief are unfounded and are nothing more than an attempt by HL&P to divert the Appeal Board's attention from the substantive issues that are the subject of this appeal. The initial conclusion reached by the Department, i.e., that no additional legal authority exists which was responsive to the Order of March 28, was also reached by the Staff in its Memorandum filed on Apri) 4, 1980.

The Department understands that the Staff's pleading was filed on i

that date only because of its perceived advisory role to the Appeal Board and not from any reading of the Appeal Board's Order of March 28, 1980, different from that of the Department. In any event, the instant Memorandum does not raise new arguments, it is limited to responding to arguments raised in Petitioners' pleadings filed pursuant to the March 28 Order.

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, a discovery all documents which in any way relate to settlement; (2) that documents generated in relation to settlement discussions are protected by the attorney " work product" privilege; and (3)

Rule 408 of the Federal Rules of Evidence does not require discovery of the documents sought by the Department and the NRC staff.

The authorities relied upon by Petitioners do not support the proposition that factual information contained in settlement documents are shielded from discovery. For exampir., in Magna-leasing Inc. v. Staten Island Mall, 76 F.R.D. 559 (E.D.N.Y.

1977), the document sought was the actual settlement agreement itself. The court properly protected the settlement portions of that agreement but allowed discovery of factual information contained in the agreement in order to avail plaintiffs of "useful and necessary information." Id. at 561. Thus, Magnaleasing supports the Department's right to obtain factual documents which assess the technical feasibility and/or cost of certain interconnections even if those documents were generated in the settlement process. In City of Groton v. Connecticut Light &

Power Company, 84 F.R.D. 420 (D. Conn. 1979), the court denied discovery of documents that apparently contained only the actual settlement language agreed upon by the parties, and did not contain factual information.

For the first time in this proceeding, Petitioners belatedly raise the argument that attorney " work product" is the basis for immunizing the factual documents sought by the Department and NRC l

Staff. The strength of tr.is argument is severely undermined by the untimely manner in which it has been raised. However, assuming arguendo, that the documents are indeed "trork product",

the documents are not immunized from discovery if a showing of substantial need is established under Rule 26 (b) (3) of ti.e Federal Rules of Civil Procedure. The L guments and suppo.': ting transcript citations containe? in the Dep2r&mant's initial Mc, tion to Compel, filed on February 28, 1980, amply demonstrate a compelling need for thesc documents since all other attempts to discovery the information contained therein have been to no avail. Moreover, Petitioners are in a better position than the Department and the NRC Staff to produce the type of factual information which is contained in the documents that Petitioners seek to conceal.

Finally, the sougut after documents do not appear to constitute

" work product" because the information contained in those documents appears to have been the product of engineers, not lawyers. At the March 27, 1980, hearing, counsel for Texas Utilities Generating Co. ["TUGCO"] described the documents we seek as two and a half file drawers of comprter studies, apparently prepared by company engineers (Tr. pp. 19 -20). At the March 7, 1980, hearing before the Licensing Board, counsel for Houston Lighting and Power Co. ["HL&P"] alluded to the fact that HL&P's documents were also engineering studies done over a two month period of time. [Tr.

561, 563-565). There is, therefore, no indication tl'at these documents contain any attorney input, thereby obviating any claim to a privilege based in whole or part on attorney " work product."

Petitioners also argue that the documents sought by the Department and Staff are not admissible at trial under Rule 408 and, therefore, are not discoverable. [TUGCO Memorandum

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l at 2-6, HL&P Memorandum at 12-13]. Even assuming that the  ;

sought-after documents are inadmissible under Rule 408, this would not preclude discovery of those documents because discovery may be obtained against information which is not admissible as evidence. Moreover, Rule 408 only applies to admissibility and does not control discovery. In any event, the Department believes that the documents as to which the Licensing Board has compelled production may be admissible at trial because they appear to contain factual information that is relevant to issues that are central to this proceeding. Indeed, at the March 27, 1980, oral argument in front of the Appeal Board, Counsel for HL&P seems to have conceded that the documvents subject to the Licensing Board's Order contain a wealth of factual information and that these documents could be admissible at the hearing:

MR. MOORE: One final question under 408: if in a settlement discussion the plaintiff -- the defendant says to the plaintiff, "I ran over, Plaintiff; and here's a hundred thousand dollars and offer to settle this case," and the plaintiff refuses it. The defendant then takes the stand and says, "I didn't run over him."

What, what evidence, or what use, can the settlement be used for?

MR. BOUKNIGHT: it ?n be used, and it should be able to be used. And the distinction between that and this is that there aren't any underlying facts that are available in these documents that aren't available elsewhere. [ Emphasis added] [Tr. 122, 123]

Thus, counsel's description of the requested documents clearly shows that these documents do not contain settlement language or offers of settlement that might be excluded from admissibility

by Rule 408, but instead contain factual information. 1/ Petitioners continue to fail to specify the exact nature and circumstances surrounding the genesis of the documents belie Petitioners' argument that this factual information is somehow inseparable from settlement language contained in the documents. Accordingly, this information is "otherwise discoverable" and ultimately admissible at trial.

Therefore, for the foregoing reasons, the Department respect-fully requests that the Appeal Board deny Petitioners' Motions to reverse the Licensing Board's Order of March 7, 1980, and compel immediate production of those documents responsive to the Joint Motion of the Department and Staff, dated February 28, 1980.

Respectfully submit ed, VN Fr erick H. Parmenter p h

M David A. Dopfovic'

'[ h ukm

%6 NancyLuque)

Attorneys, Energy Section Antitrust Division j

Department of Justice (202) 724-6667 Washington, D.C.

April 9, 1980 1/ In its initial Petition to this Board (at p.3), HL&P characterized i Ehe documents as ones which " concern analyses made in the context of settlement discussions", (emphasis added). Likewise, CSW's l initial Petition (at p. 4) states the documents were merely

" settlement related appraisals" or " documents prepared in connection with settlement discussions."

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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Appeal Board In the Matter of )

HOUS106 LIGHTING AND PCWER ) Docket Nos. 50-498A CO., et al.(South Texas ) 50-499A Project, Units 1 and 2) )

)

TEXAS UTILITIES GENERATING ) Docket Nos. 50-445A COMPANY (Comanche Peak Steam ) 50-446A Electric Station, Units 1 )

and 2) )

CERTIFICATE OF SERVICE I hereby certify that service of the foregoing Memorandum of Department of Justice in Response to Petitioners' Memorandum of Additional Authorities Submitted Pursuant to the Appeal Board's March 28, 1980 Order has been made on the following parties listed hereto this 9th day of April, 1980, by depositing copies thereof in the United States mail, first class, postage prepaid.

Alan S. Rosenthal, Esquire Samuel J. Chilk, Secretary Chairman Office of the Secretary of the Michael C. Farrar, Esquire Commission Thomas S. Moore, Esquire U.S. Nuclear Regulatory Atomic Safety & Licensing Appeal Commission Board Panel Washington, D. C. 20555 U.S. Nuclear Regulatory Commission Jerome E. Sharfman, Esquire Washington, D. C. 20555 U.S. Nuclear Regulatory Commission Marshall E. Miller, Esquire Washington, D.- C. 20555 Chairman Atomic Safety & Licensing Board Chase R. Stephens, Secretary Panel Docketing and Service Branch U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D. C. 20555 Washington, D. C. 20555 Michael L. Glaser, Esquire Jerome Saltzman 1150 17th Street, N.W. Chief, Antitrust and Washington, D. C. 20036 Indemnity Group U.S. Nuclear Regulatory Sheldon J. Wolfe, Esquire Commission Atomic Safety & Licensing Board Washington, D. C. 20555 Panel U.S. Nuclear' Regulatory Mr. William C. Price

! Commission Central Power & Light Co.

Washington, D. C. 20555 P. O. Box 2121 Corpus Christi, Texas 78403

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4 G. K. Spruce, General Manager Roy P. Lessy, Esquire City Public Service Board Michael Blume, Esquire P.O. Box 1771 U.S. Nuclear Regulatory San Antonio, Texas 78203 Commission Washington, D. C. 20555 Perry G. Brittain President Jerry L. Harris, Esquire Texas Utilities Generating City Attorney, Company Richard C. Balough, Esquire 2001 Bryan Tower Assistant City Attorney Dallas, Texas 75201 City of Austin P.O. Box 1088 R.L. Hancock, Directo'; Austin, Texas 78767 City of Austin Electr ic Utility Department Robert C. McDiarmid, Esquire P. O. Box 1088 Robert A. Jablon, Esquire Austin, Texas 7876/ Spiegel and McDiarmid 2600 Virginia Avenue, N.W.

G. W. Oprea, Jr. Washington, D. C. 20036 Executive Vice President Houston Lighting & Power Dan H. Davidson Company City Manager

- P. O. Box 1700 City of Austin Houston, Texas 77001 P. O. Box 1088 Austin, Texas 78767 Jon C. Wood, Esquire W. Roger Wilson, Esquire Don R. Butler, Esquire Matthews, Nowlin, Macfarlane 1225 Southwest Tower

& Barrett Austin, Texas 78701 1500 Alamo National Building San Antonio, Texas 78205 Joseph Irion Worsham, Esquire Merlyn D. Sampels, Esquire David M. Stahl, Esquire Spencer C. Relyea, Esquire Isham, Lincoln & Beale Worsham, Forsythe & Sampels Suite 325 2001 Bryan Tower, Suite 2500 1120 Connecti' cut Avenue, N.W. Dallas, Texas 75201 Washington, D. C. 20036 Joseph Knotts, Esquire Michael I. Miller, Esquire Nicholas S. Reynolds, Esquire James A. Carney, Esquire Debevoise & Liberman Sarah N. Welling, Esquire 1200 17th Street, N.W.

Isham, Lincoln & Beale Washington, D. C. 20036 4200 One First National Plaza Chicago, Illinois 60603 Douglas F. John, Esquire Akin, Gump, Hauer & Feld 1333 New Hampshire Avenue, N.W.

Suite 400 Washington, D.-C. 20036 l

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e Morgan Hunter, Esquire Robert Lowenstein, Esquire McGinnis, Lochridge & Kilgore J. A. Bouknight, Esquire 5th Floor, Texas State Bank William J. Franklin, Esquire Building Lowenstein, Newman, Reis, 900 Congress Avenue Axelrad & Toll Austin, Texas 78701 1025 Connecticut Avenue, N.W.

Washington, D. C. 20036 Jay M. Galt, Esquire Looney, Nichols, Johnson E. W. Barnett, Esquire

& Hayes Charles G. Thrash, Jr., Esquire 219 Couch Drive J. Gregory Copeland, Esquire Oklahoma City, Oklahoma 73101 Theodore F. Weiss, Jr., Esquire Baker & Botts Knoland J. Plucknett 3000 One Shell Plaza Executive Director Houston, Texas 77002 Committee on Power for the Southwest, Inc. Kevin B. Pratt, Esquire 5541 East Skelly Drive Assistant Attorney General Tulsa, Oklahoma 74135 P.O. Box 12548 apital Station John W. Davidson, Esquire Austin, Texas 78711 Sawtelle, Goode, Davidson

& Tioilo Frederick H. Ritts, Esquire 1100 San Antonio Savings Law Offices of Northcutt Ely Buil G '.ng Watergate 600 Building San nntanio, Texas 78205 Washington, D.C. 20037 W. S. Robson Donald M. Clements, Esq.

General Manager Gulf States Utilities Company South Texas Electric P.O. Box 2951 Cooperative, Inc. Beaumont, Texas 77704 Route 6, Building 102 Victoria Regional Airport Mr. G. Holman King Victoria, Texas 77901 West Texas Utilities Co.

P. O. Box 841 Robert M. Rader, Esquire Abilene, Texas 79604 Conner, Moore & Corber 1747 Pennsylvania Ave., N.W. W. N. Woolsey, Esquire Washington, D.C. 20006 Kleberg, Dyer, Redford & Weil 1030 Petroleum Tower i R. Gordon Gooch, Esquire Corpus Christi, Texas 784'/4 !

John P. Mathis, Esquire  !

Steven R. Hunsicker Baker & Botta 1701 Pennsylvania Avenue, N.W.

do//g?4fv/_ C # 7c /

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Washington, D. C. 20006 Nancy Lug g, Attoh ey '

. Energy SeMion U Antitrust Division Department of J'stice l

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