Text

Transcript of 760628 Prehearing Conference in Silver Spring, Md.Pp 1-67
	ML19326A653
Person / Time
Site:	Davis Besse, Perry
Issue date:	06/28/1976
From:	Lazo R; Atomic Safety and Licensing Board Panel
To:	;
References
	NUDOCS 8002260760
	Download: ML19326A653 (68)
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UNITED STATI:S OF A! ERICA 2

NUCLEAR REGULATORY ColeiISSION 3

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In the matter of:

Docket Mos.

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5 TOLEDO EDISON COMPANY and 50-346A CLEVELAND ELECTRIC ILLUMINATING Co.

50-550A 6

50-501A (Davis-Besse Nuclear Power 7

Stations, Units 1, 2 and 3)

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..r x-15 Monday, June 23, 1976

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16 Prahaaring conference in the above-entitled

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<.s 17 matter was convened-, pursuant to notice, at 1:00,p.m.

a 10 BEFORE:

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19 ROBERT M. LAZO, Esq., Chairman,

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Atomic Safety and Licensing Spec hl Honr_d_

20 ANDREW C. GOODHOPE,.Esq., b' amber.

21 DANIEL L. HEAD, Esq., Member.

S-APPEARANCES:-

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23 JAMES B. DAVIS, Esq., Rahn, Loesar, Freedheim, 24

. Dean & Wellman, National City E. 6th Building,,

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Cleveland, Ohio, 44114; on behalf of the

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MICHAEL R. GAILAGHER, Esq., Gallagher, Sharp,-

Fulton, Normal & Mollison, 630 Bulkley Building, 2

Cleveland, Ohio, 44115; on behalf of Squire, Sanders and Dempsey.

3 W. BRADFC3D REYNOLDS, 1cq., Shaw, Pitt:aan, Potts 4

and L e ridge, 1800 M Street, N.W.,

l Wa=hington, D.C.; on behalf of Applicants 5

l JACK R. GOLDBERG, Esq., Office of Executive 6

Legal Director, Nuclear Regulatory Conznission, Bethesda, Maryland; on behalf of the Nuclear 7

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y1 .x'. ~ 3 Q ~ s 4 cbl 1 PROCEEDINGS 2 CHAIRt1AN LAZO: This is an administrativo pro-3 caeding before an Atomic Safety and Licensing Special Board 4 established for a proceeding concerning the provisions of 5 Section 2.713 of the commission's Rules of Practice relating i i 6 to suspension of attorneys. The Special Board has been ~ f' established to rule on the motion of the City of Cleveland 7 m. 8 to disqualify the law firm of Squire, Sanders and Der.psey

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r 5 9 from further participation as Counsel for the Cleveland 10 Electric Illuminating Company in the on going antitrust ~ 11 proceeding identified as In the Matter of The Toledo Edison .Di 12 Company and the Cleveland Electric Illuminating Company s j ' 16 Q'.f QQ; -~ (Davis-Besse Nuclear Pqwer Stations, Units 1, 2 and 3), and.1 40 13 p. g,,..M.34 m f4 - the Cleveland Electric Illuminating Company et al. (Perry j. p ;' - '4 qQ .gs. 15 Nuclear Power Plant, Units 1 and 2). And those are Nuclear," 16 Regulatory Commission Docket Hos. 50-346A, 50-550A, 50-501A', .[ 17 50-440A and 50-441A. >L-

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18 Now we're meeting here today for a prehearing ^ ~;..vy 19 conference pursuant to the Notice iscued by the Special [; n 20 Board on June 21, 1976 ordering that Counsel for the parties s .t 21 meet here in this room at 1:00 p.m. for a prehearing con-1 C' ) e s 22 ference in this matter. ~ [e, 23 Could we now call, please, for appearances by -n 3 <2. 24 the parties? j4 Q:- - :v.sr4 For the City of Claveland? _ [ ',['jg' 7f m> =,a y: 25 .'/

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y );. n gI m w ,( ; y. ' f .t y . ;s.,. I cb2 1m. DAVIS: James B. Davis for Cleveland. w A { CHAIRMAN LAZO: Thank you, !!r. Davis. 3 And for the firm, Squire, Sanders and Dempsey? 4 ] MR. GALLAGHER: 111chael R. Gallagher, Cleveland, 5 Ohio. 6 CHAIRMAN LAZO: Thank you, sir. G. ~ t. ' 7 For the NRC Regulatory Staff? e. J g MR. GOLDBERG Jack R. Goldberg. is,:C A q 9 CHAIRMAN LAZO: And Counsel for all the Applicants r. 10 are you entering an appearance? A.- 11 ' Int. REYHOLDS: Yes, sir. William Brad' ford 2 DE Y 12 Reynolds, Shaw, Pittman, Potts and Trowbridge. ' /P f '1,. + 2*.c %, g L,p, 13 CHAIR!aN LAZO: ,Thank you, Mt. Reylolds. ..,, m. i N . JQ, min u w 11 / w Are there any other appenrances? 14 n u, n; N. ', "K mp ac 15 (No response.) ,e -.f -e 1 n i:.. 1: 16 To avoid confusion we will instruct the Reporrar. i 17 to begin the transcript of this proceeding with the pre-18 hearing conference today with page 1, and ask that the ~ ' ' 19 transcript and all pleadings which may be filed hereafter 20 specifically identify in their caption that this is the 7 ._7 ~ 21 Atomic Safety and Licensing Special Board. a.

Q 22 In order to begin -

',, 1 q. 3 23 MR. GOLDBERG Excuse me, Mr. Chairman. I've 4 p, i 1-l' 24 spoken with the Chairman of the antitrust proceeding,. '. M. m 'a A' ~25 Chairman Rigler, and he expressed an interest in having the2 k,m 1 x.. c c ~ - *4 -pg ~ sr-

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_ ~. _.. - f ;;M&..-.. x. r m .Qf' Q_ ~- $( ,.h ,i. y, ..y 7 I ~ pagination of this prehearing conference continue from the ] ab3 2 - pagination of the antitrust proceedinc. All prior proceed-3 ings regarding the disqualification issue have-been in-l. 4 corporated directly into the antitrust transcript, and I ( 5 just wanted to point out that that was the wish of Chairman y l 6 Rigler. ~' l e 7 CHAIRMAN LAZO As far as the ' papers, pleadings, ~.] .v 8 are concerned, it nonetheless appears to us that it would,a,. ;4,, w u '9 be advantageous to both Boards to have soca way of iden- ,3z ) ) ; to tifying the papers that specifically relate to this special

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11 proceeding. c: 'c w. .c s,w .3-12 Let us take your comments under advisement for ,c..A w SM ':,.f.l.;;g@ a .. m =~

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I don't believe that will cause the' Court..Cif.k E.n ~... w, g, w u ~ x I4 - Repork.er any-problem, at least un'til he is ready to start "

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./*/' .q.., s 15 typing. n.g 3,, y c y ~n 16 As a. first order of business, fir. Goldberg, a 17 perhaps.you could tell us the extent, if any, of the parti- ^ Y N:; 18 cipation in this special proceeding by the NRC Staff. ( a I'll ask the same question of it. Reynolds. 'And 19 20 I think this would be a first order of business. 4 n ~ ,a. 21 Could you give us an answer? 'y,,' [P ,w w. 22 ' 11R. ' GOLDBERG: Certainiy. ~ . N.,. ~2.. %,. ,. v i 1-h ' ,-.I%' 23 The Staff has attended every aspect of the dis- ~ ~ w ' ' gp 24 . f.: qualification proceeding and has participated in avary, s.a j?.a.L .y,;_ , 9;. r.g u yy c. ,..,.;~. .e l aspect of the disqualification proceeding.. Our purpose i's"J b 25 .A s m ~Y .,wl, '.h.lw** ~1Gf'$ &3 .....' " l.. 1, I 1%. kr ,' I, ,(* ). - - '.'.. i l- ^ \\ r 4 a mg l> ;,,* ' &, j W S', 4-: U d p.?;, W INN.f o h. y., % '.' x ; R ', s n-y j r.-- ,.9.g g y. . 4 ,., g {;y,. b. ,,,; ;., s

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r n .; g - ( ,f b eb4 1 to keep fully informed as to all aspects of the Perry / 1 7 -(, 2 Davis-Besse antitrust proceeding, to advise the Board in 3 whatever way we can to assure that the record is complete. Q 4 And we would continue to participate in that manner. 5 CHAIRMAN LAZO If this proceeding goes to a full .( 6 evidentiary hearing would it be thee intention of the Staff s ..a 7 to participate actively in the sense of offering evidenca 1 8 or seeking to cross-examine the testimony of others? hig 7 t, 9 MR. GOLDBERG: We would certainly reserve the 10 right to cross-examine whatever witnesses were presented, s 11 and to make objections if appropriate to documentary evi-x -- rn . /** 4 j. 12 dance that might be introduced. .. Q. g g ; y;: J.M 13' .ono again, our purpose would. be to 'ssure tha a j ~ (4 the record is complete, and to represdnt the public interest, x . - r., gg and to assist and advise the Board in every way we could.. "# %m n y 16 We would certainly want to reserve that right. I do not f (. ?,- .Y 37 anticipate the Str.ff presenting a full case, however, of ..l ? documents and witnaesses. That would be, I think, more gg 19 appropriate for the two min parties in this proceeding. [ 20 CHAIRMAN LAZO: Naturally the Board appreciates all the help it can get, and the participation of the Staff ( 5;. 21 . - v. + is most welcome. .~ -c. .7g 22 \\ .,g. ,,O Mr. ' Reynolds, the extent of the participation [ ~ ~

23 24 of your client in this phase of the proceeding would be " gpi f,

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.7 J ab5 I r-4, MR. REYNOLDS: I would anticipate that it would

(mg be minimal, Mr. Chairman.

It would seem to me that my role 2 L./ 3 in this proceeding, should it go to an evidentiary hearing, 4 would be confined to insuring that the interests of my 5 clients, to the extent that there is an overlap with this 6 particular evidentiary hearing and the antitrust hearing 7 that is on-going, would be fully protected. [ W 8 6 But I would not envision that that would require ~ 9 very active participation on my part. On the other hand, 10 to the extent I did feel it necessary to protect those ~?'. 11 interests, it may well be necessary for me to participate x 2 12 to a limited extent. 5 99,;-~.9.y .m w + n Mr., Davis, does tlie City'of. )[T[ yl 13 e . CHAIPMAN LAZO: -e, n Q' ,;g .7i D: 14 Cleveland have any objection to the participation of the w. vu 7,. 15 other two parties as has just been expressed by Mr. Beynolds ' rs 16 and Mr. ~ Goldberg? '~

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17 Of course it's your problem, but in terms of the ~ la obligation to file responsive pleadings and participate and 19 respond to motions of that sort, both of these parties have s 20 indicated a desire to participate in order to assist the 21 Board and assure that the record is complete. i 22 Does the City of Cleveland have any objection to u; U 23 that? .m t l 24 MR. DAVIS: I don't believe so, Mr. Chairman. M, i lh ... N ",, 'N' '., ye 25 The Staff h a been present throughout all of this. I~ don't; i ~ . a.., f O. Jilt m. .1, g n.: 4: ,p s-p".fg.: h. ; -];' .k s . ' - y n e ;g.W: ;. ;-g%; gp ; ' Cj., e @ c e . -,.......c. ., p , n ,.y., u m

e--;r-+py -gp:g g.y .1 ,ru-,,. i , :.ey:, m l-m. m g ~a, s eb6 1 think there is any particularly added burden for the City };) 2 of Cleveland about the presence of these parties.

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CHAIRMAN LAZO: Very well.. 4 Mr. Gallagher, may I ask the same question of you, 5 sir? myx 6 MR. GALLAGHER: 'Yes, Mr. Chairman. k _ w 7 Our position with respect to the Staff would be .f .. m.. .,s. 8 that although the Board has indicated that it would welcome, %s + 9 '~ g its participation, we are sorcewhat concerned about it and .,a q 10 would like to register an objection to it at the outset. A w.. 11 We had understood when these proceedings first i T'b y 12 began that the Staff would assume essentially a neutral _ _R fhp' l ) g:-:ygg qg .!3 '. Positics,. advising the Board in an. objective manner. How-3_ %,. y o ny ~ c, l ever, a brief filed by the Staff before the. Appeal Board"g ;.Mh ~, 34 . EN

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w 15 denied what we believed to be the objectivity required of' [_~ %p" 16 the Staff in this matter. It took a strong position. It [T w 17 acted in fact as another fact-finding body. And for this b

,a 18 reason we would-at the outset register our objection to its\\

19 Participation in this matter. fi'e 20 We feel further that this is essentially n quas- ~

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21 tion between the City of Cleveland and the firm' of Squires, 7' g l 22 Sanders and Dempsey..We feel that Mr. Davis is a competent P g ,.. n 3<- 'v law ar and well capabla of aducating his clients' position ,i f 23 r-L.v... .n. : .5 24 in this matter without need of intervention by the Staff. 3.[' y[ Qy .~:, . -Would you object', ' sir, k;the [eps,..:7 M _^ [ l' CHAIRMAN LAZO ^ ~ 25

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- w f x.-, ., ; -;p ,#. g.. 4 '.t m ?,f, - *(4, ,,-6 ',_t, + l .m. s 9 - a I eb7 Staff simply being present during the proceeding and filing I an amicus brief or something of that sort? 3 MR. GALLAGHER: I would not object to its being 4 present. I 'would not object to an amicus brief that was of 5 a dispassionate character. 6 ^ a s 7 - 1 y x. 4 .y c.. 8 - f... 4.+. f. r 4. _ s. 9 t -,-s -s 10 11 2 12.

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,. s.: L _.. 10 I spbl CHAIRMAN LAZO: Mr. Goldberg? '3 1 MR GOLDBERG: I would submit that the Staff has 3 an obligation and indeed a right to particip' ate in this 1 h 4 disqualification aspect of the Perry / Davis-Besso antitrust 5 procee

Lng in the same way that it has participated in the 6

prior aspects of, disqualification proceeding. ~ 7 There is more involved in this proceeding than 8 simply the disqualification of a law firm. We're dealing ^ 9 with the Commission's rules of practice and we're dealing 10 with a c,,e whli:h will certainly have precedential valua and ,11 I think since the Staff is a party to the Davis-Besse/ Perry i i Js 12 antitrust proceeding and since the Staff was asked by the ' . b~ ~ Appeal Board to.' address al1 issues on appeal, that we certain-13 7 \\ -v s .;,e n 14 ly do have an obligation and a right to carry through with ~

.:. 3 15 our participation as we have in the past, and I woul'd urge 16 the Board to allow us to do that.

17 CHAIRMAN LAZO: Thank you, Mr. Goldberg. 18 We would note, Mr. Gallagher, that in its decision 19 of June lith the Appeal Board in referring to Section 2.713C, 2O' and that's at the top of page 29 of that decision..said that: 21 "An attorney charged with misconduct shall J i 22 be afforded an opportunity to be heard thereon." l ~~ 23 And then continuer by saying: '~ 3 24 "We hold this~ to mean that he's entitled to a s if. .k .f 25 full evidentiary hearing with all parties having f. N;N-ihr yL

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=***r==* 5 proceeding. 0; 7 6 But nonetheless, it appears that there is a ques-7 tion involved here regarding the participation of the parties a};,j - 8 We have heard from everyone on the point now. 9 Before going on to the first matters in our .s. 10 agenda I would briefly like to introduce the Doard members 11 to you. s ..s.. 12 Daniel M. Head who is seated at my right is a *E P z .y:3 - !]a. 13 full tima member of tiie Atomic Safety and, Lic~ensing. Board } s.a 4 14 panel and has been a member, since 1972. Mr. Head receivati .h 15' his law degree from Georgetown University, the sare school 16 in which he received his Bachelor's Degree. 4 17 From 1962 to 1963 Mr. Head was Trial Attcrney 18 Discriminatory Practices Division, Bureau of Restraint of 19 Trac'e at the Federal Trade Commiacion. For eight years 20 during the period 1963 to 1971 he was an associate and then A 21 1r.cer a partner in the law firm of Fletcher and Mahoney in 22 Washington,- D.C. ~ (;' 23 In 1971 and 1972 he was Trial Attorney with the, . s. 24 Pollution Control Section, Land and Natural Resources _ ' [i Pf &u -.q f: er;,:3e.yu Division of the Deparem-me of am eice. r. 2, e w a- ,,"*'kyy t i j'. -h l' ' s g y~,

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r ' '*- 5 received his law degree from Columbia University in New York. 6 From 1948 to 1962 he was a Trial Attorney for antitrust 7 cases with the Federal Trade Commission. From 1962 until b " 'l^ 8 1974 he was an Administrative Law Judge with the Federal M^ -? 9 Trade Commission. .9 10 ~ Mr. Goodhope is now a part time consultant member ~ l 11 with the panel and he is also a member of the District of T; ~ ". m i '+I. 12 Columbia Bar. ^ ge_ > 9.'~~ g ..My name,is Rober't M. Lazo..I reccihed my law' [.[ 13 v 'f4 - degree from Rutger's University. My law practice consists ['._ v., 15 of five years of corporate practice with Bell Telephone "~ 16 Laboratories and Standard Oil of New ' Jersey. Thereafter I .c 17 served in private practice for 13 years in Milwaukee and R Chh.cago and joined the Atomic Safety and Licensing Board pane: 18 19 as a part time member in 1970. I have served as a full time 20 member tince 1972. ~ 21 Now, we think the second order of business is to ^ -r 22 hear frca each of the parties regarding the need for discover r. c. 23 The need and extent of discovery and a proposed schedule for (+ y; 24 oiscovery. 4 s" 25 _ I wonder, Mr. Davis, are you prepared to give'us .%.-[ ~ p + 9 - ~.. w a.p, , k _$ y .+ ,e ? + .,,. ~

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.g 3 13 1 apb4 your ideas on that? '( 2 MR. DAVIS: Mr. Chairman, yes. I have submitted - 3 an application for a subpoena which I hope has reached the {; Board and that the Board has had some chance to ccan. 4 .5 I would go back to, briefly, to the proceedings, .i 6 before the special Board that was created previously and in 7-which, upon the demand of Squire, Sanders Sor a full' evidentiarl' ~ 8 hearing,was given an application for a subpoena by the city 9 and at that time allowed that subpoena. But tir.e was so to short when we had our hearing that there was no chance to ~ 11 really go forward with it and after reconsideration of that 12 hearing back in the spring, the Special Board decided hot to .,s m m.

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py 14 then finally dispensed with'all evidence anyway. , g' 41 1.- 7 4 7.. ~. .v-c. 15 Now what we have done is to take that subpoena ,u 16 and condense it and eliminate certain materials from it and 17 try to address the questions and tha opinion of the Appeal, 18 Board. We have tr1ed to limi.t it so that we are really 19 avoiding for the most part questions of privilege that 20 have been discussed in prior episodes of the full hearing 4 21 before the Board. , m 22 I think the City, if it were to have a full h ) 23 chance to explore everything that might bear upon the matter,

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3 the issue of those matters learned by Squire Sanders and O-maybe I can ' explain a little bit more what I'm t71ng to get 4 5 at there. s. 6 The position of the City is that by virtue of a 7 some 60 - I don't want to discuss the merits of the case, w +. .:p 8 but I think I can give you some background to explain what - q 8 I'm trying to do here, at least in ma-}or part. ~ e 10 It's the contention of the City that Squire, 11 Sanders and Dempsey, which has been the City's bond counsel, -g 12 virtually the only bond counsel. of the City of Cleveland I. J ~,,y... y ee . ; c:yy ~ n for some. 60 years. has. in the course of that lengthy period [a.: 3<7 l 13 w w .~ 14 ' of time and 'certain1', over that period of-time which. is NI 8 c.; va l 15 pertinant to this' case on the merits, which is 1965 to the ' 1 g. 16 present, done virtually all the City's financing and that a ,y 17 they have done the. financing foi-the city's general fund 18 operations and for the Municipal Electric Light Plant as well 19 Now, to get at what financial information SS and D ^ 20 really gleaned over all those years and from various City 21 officials we have asked them to produce those files that they 1 22 prepared for its client, the city of Cleveland so that we C y 23 may see exactly what they have. 2g ^ ~ + ..M ) .2 You might ask does the city not have such files + 24 s: it - s ~ :%u... -y v 25 itself and the answer is no, the City never did have such ,n@@ b + a:.:,W l ..v< d_ .e.,," .,,.-.r, f i 'f '., t 3 l '. 87 - .5 v 4 #F; l~ ? ,r % ? 1. '^., 4, = ~.,,... s 1 % v s. s.

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u....- +lqg?M fr ~ * - - 15 ~ , ' w. 9; 9 'j' apb6 - 1 files. We have the further problem that the City's filing uk' I system is,what exists of it in tha Cleveland Law Cepartment, / 3 quite inadequate. Much of it has beet dispersed. We've had 4 pJ many public officials come and go. We simply have no way 5 of knowing or reconstructing and in a collateral matter, ~' ~ d z 6 it's enormously burdensome to try to reconstruct what it is 1 7 our own lawyer generated for us in that period of representa- ~;,;.. ~ -- 8 tion from '65 to now. So what we're asking them to do is to 9-let us, the clients, see our own files, see what financial 10 information was obtained from the City over that period of 11 time as one of the essential matters that we would like to ' %p.Mi,.\\. 12 see. A

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m -- __________ _____- -___,_ -_ - __ --.,- _ ;- -- - ----- ~..-m - q 2.--q q e g:'Q', 5 2 _16-m '. ~, - IC eb1 L CHAIRMAN LAZO: We would say, Mr. Davis, that' Z we have received the application for a subpoena.. We have ../ 3 withheld issuing it because on its lace tihere is no clear ' 4

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showing of general relevance to the testimony or evidenca 5 sought. And part of the problem of course is that this [ .s-m Board does not at this time know preciself what issues are ~~ 6 1 7 in controversy in the on-going antitrust proceeding. [ r p~~ 8 I might say that on the face of it it does appear { p 9 to be unnecessarily broad. But nonetheless we would have a / 10 been prepared to issue it. The other party of course has 7l 11 all of its. rights to bring any motion regarding the quash- [' 12 ing of the subpoena. Qh$] j .. q 5 : .ug g 13. But the problem of relovance remains, 'and. I. think ,. ;.v .a.. 14 that may be a problem for us here in terms of discovery; s,p'y [- .. :.~ y 15 unless and until this Board has placed before it a clear e 16 identification of the issues in the antitrust prceeeding [ 17 I don't see how we're going to be able to rule on questions fa of relevance regarding discovery. ~~ u. 19 Is there, Mr. Davis, somewhere in the other proceeding, a clear category listing of the issues that 20 21 have been placed in controversy and which I understand I 22 have been pretty well tried? ~ 23 MR. DAVIS: Well, yes. I think you can say that ,,. -;r ,, m 24 the issues are pretty well defined by new. The City-says f. p 4, f;+ c' that by virtue of having done all its financial work forl'.1, 2 ~n 25 2 .f. s J, t y ..:._ g w.3; e '- M [p \\'g mt jfjg.[. hg &; j' > W;)?,$h sh y,m 1 y l. - [y}&y SUl;I L 5W

... : _.s am u. J ' % 4 7.,7 ' a, o e 17 s 'y 4 r, ab2 I this period of time and certainly all its financial work with one or two exmptions out of many, many dozens of 3 financings that SS&D had a total mastery of the City's Q financial position, a total mastery of the financial posi-5 tion of MELP at all relevant times during this entire history ^ ^ 6 ~ of controversy with CEI. 7 I don't know if this panel has had a chance to y read some of the briefs that have been filed,praviously by ~ .9 the City, but the City alleges actual misconduct of SS&D I going far beyond simply gleaning information. We cite I I-various instances of where this information was transmitted p; t 7.... . M'. .+f' I2 _ m f fg.9 to CEI and made of use to CEI. wv m 2.: ~ ~ ~ g g y ' 7" ^1In the precise issues, the City's financial' N' ;1 1 13 , - y..;s.,s o. ,'bility to pay for certain of the things that it has wanted ~ 14 . ',;g. 15 to have over the years has been put in contest in the mnftn 16 antitrust here on the merits. The financial pressures-17 At least the City's position is generally that the finan-, 18 cial pressures created by CEI in a host of ways were de- ~ E(^ 19 signed to force the City's. light plant into a position of 20 virtual bankruptcy and eliminate it as a competitor. 21 And I think a great deal of evidence has coma [ s., 22 along to substantiate that. _/ >: 23 Where one law firm is at one time privy to all. ]- ? 4 ;.9 24 the f4 nann-4 al information of the City

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major competitor. 3 To give you an idea of.the controversy that has Q 4 arisen around these files, SS&D said they learned nothing 5 from the City that was not already public information. I 6 think the Appeal Board has ruled on this particular'iss.ne' 7 confidentiality is not in issue; it is not a necessary 8 showing by the City. Any information given by the City is,' ~ I 9 going to be treated under the case law as coming within the - 1 10 protections of Cannon 4. ) y. 11 But basically SS&D has tried to claim - and we 12 think if we can see our own files we can prove to the. . m,_; 1 y.y ;; 13 contrary that they gleaned a great deal of information .;iM T ( . :Mr p m ) v .x j 14 about us that was highly relevant' to the financial pressures. ..;e +:: 15 brought by CEI upon the Cleveland Electric Light Plant. 16 We further think that we. can show with even v 17 greater detail than we~ already have that they learned a 18 great many things about us that were non-public even though 19 again confidentiality or the non-public nature of the infor-20 mation is not critical in any way. ~ 21 so what we're saying is we want to see our own 22 files, and I think it is a novel notion that a client has V 23 no such right to see its own files from its own lawyers. l 24 I would further say in generni -- and correct ma}, L p. . if I'm wrong -- that the general standard of discovery is ,~y..-

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..-.c. ._ ~ _= u. i ;- t> 19 I eb4 whatever might possibly lead to evidence that is relevant, 2 so I think it is a fairly broad and sweeping general standard 3 that we're normally entitled to in the federal courts. If O that is noe the standard before thie co==1 io= r cere 1=1r 5 would appreciate being told that. x 6 The basic relevance, however, is that thi is an .y 7 antitrust case which is almost by definition a study in P .c financial pressures. These pressures were exerted againMp = 8 4 9 the City's Light Plant over a period of years in a host 10 of ways. And the key to it all was on-going, constant, .e--*- 11 detailed information about the city's financial posture c 12 at any given time that was open totally to its own lawyers,., ,.' ' j?):: y 13 ', ssso,,w'ho. were th n at the, same. time the attorneys for the,,, s' s., y .., 3 m. f4 ~ Claveland Electric Light Plant. E. ' 4 -J . > ',y : y 15 Now if that helps a little bit? ~$;, E 16 CHAIRMAN LAZO: That does help, sir. 17-Let me ask, Mr. Davis: You alluded earlier k.: 10 to a recent experience in Federal Court in Cleveland. And 19 might I ask, was a similar subpoena issues in that pro- ~ 20 caeding which would permit you to sea your own filec? 21 MR. DAVIS: Well, we used a subpoena in that case r 22 that was considerably more sweeping.- The tima periods are .s .r 23 not identical. In that case we went back in eeriods of q, 24 time prior to the fairly linited period here. . C T f-14 ' 7.g { y n-s - 25; u' ^ .The Federal Judge in Cleveland rules two ways,{. ] ' - F % f,{ W]k p,

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_ = - _ - - - - -..-. .-. y p:y :.'.;g 20 I eb5 against the City's having any right to any single docume~nt G 2 which we are firmly convinced was an erroneous ruling. 3 But in any event, in an at.'tampt to get at and to g at 4 Q around the problems there, we have very substantis.11y res-5 tricted the subpoena that we are putting before this Board. 6 Thore we sought a host of documents that we were told 7 there weIn privileged and I believe are deemed privileged ' w^ f. 8 at this point in this proceeding, vc 5 t 9 I feel fairly strongly that we were entitled [ x.u 10 and should bs entitled to those documents because they are 11 a series of documents that were prepared by our own la'.clers y. . w; 12 concerning our affairs and were sent to CEI. But.in any j k yj on., 13 . c-M n event,. those have iteen stricken from.the subpoena, q fg.y g,., s.2 ; - x. 14 ~ind'as to he reste I have attempted to make it. .4 7.e, w 6.~1 a 15 as precise as I can without knowing actually the labels .J ~n

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V,, 16 that our own lawyers used for our own files, particularly "~ ^ 17 in Item 2. 10 CHAIRMAN LAZO: Mr. Gallagher, I believa Mr. Davis 19 did refer to the fact that he was considering issuing a.,.. 1 J. 20 subpoena during our telephone conference among all of you 21 on the 21st. Have you seen the subpoena? ). w ~~. [ 22 MR. GALLAGEER: I received it Saturday morning- .7, 11 4 ya< 23 and have ey==4 nad it. [ . c. y,. . 'u, 24 You asked that we address ourselves to the quesd Me" ,u W ~..

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~ .n 4 :: 21 o b s l' Addressing myself first if I may to the need -for =(7 2-discovery, while this Board hears for the first time what s 3 Mr. Davis has to say on the need to secure these records, p 4 this Board should be reminded that the original Licensing v 5 Board heard essentially the same thing, and the other 6 Special Board heard it. It has been heard at least on thrae 7 separate occasions in Federal Court. Imd on each of those 8 occacions the effort of the city to secure essentially the ~ s 9 records that are identified in his duces tecum feature hac, 10 been denied. 11 It's been denied on the ground of privilege; n 12 it's been denied on the ground of relevancy. The Licensing.' ~ -. yc9. Board has examined a host of these records and if it please -' 13 ja_;plI - 1 sy 14 ~this Board,. I intend to file a motion fo'r a protective ' 15' order, and I have many things which I will attach to it, + . A, g, 16 among which will be a reference to what the Special Board 1 17 said in its certifying opinion. 1, y 18 There will be reference to what the initial 19 SPecial Board said with respect to a subpoena essentially ~ 20 requiring many of the same documents at the tima of its } 21 hearing. I will submit to this Board a portion of the ~' 22 transcript consisting of some 12 pages from the District 23 Court whern, for the third time,. the City filed a similar .i e 24 subpoena. j f c, ?J@g a. -w~ 3 . Let me say this, that there h'as been discevery

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n - = - - - - ,.n .n_. -T .._....___-..e-..... e 22 ab7' 1 in this matter. Not only have we had the various other i 2. proceedings before this Board but depositions of those L 3 witnesses whom Squire, Sanders'and Dempsey indicated would 4 pJ testify and did in fact testify in Federal Court were taken. 5 A duces tecum feature was attached to the sub-6 poena with respect to those depositions. A motion was filed 7 and the duces tecum feature of it quashed by the Federal 8 District Court. a, ,~ t ~ 9 Subsequently the Court made a similar ruling on 10 a separate occasion. Most, if not all, these docm.ts have 11 been turned over to the Federal District Court and he has 12 in camera examined them himself. Most of them also have ~ ,yyjg 47 13 been evnmined by the, Licensing Board g camera in its. ;M (p: ~ - 3.,

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..e.: 7,: i ~ 14 determination of non-relevance.- M.,.%s c., ls 15 Finally, last week when we had the hearing befora u-16 Judge Krupansky there was served upon each of the Squire,,, 17 Sanders and Dempsey lawyers who were to testify a subpoena 18' duces tecum consisting of many, many pages,.again re-19 questing these same do e nts and again essentially the 20 argument you heard presented by Mr. Davis urged upon the 21 Court. And the Court again denied it. 22 And it is with respect to that, if yot will,. ~ 23 the fifth denial of essentially access to the same infor-- 24 mation, that we will provide this Board through the trans-i l 3.,., ,ga f l 11-25 cript so you will. have the full flavor of it. i JF 1 v._ g h-t' ' ' 1'/, '

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un- .n-. ...__.,n. .e... - = - - - - -. . ~ * ~' " * ' " ~ ~y j' ~$s +>- 1 s 23 ^ 4 s Y: ab8 I There has been discovery here; there has.been' a 4 2 y every opportunity on the part of the City through deposi-3 tions and otherwise to properly discomry in thic case. 4 ] It's been pending--- The motion has been pending for a good 5 deal of time as of now. We've gone through the Federal 6 Court matter. -a -t 7 I submit to this Board that we're beyond the ?. 8 discovery stage, far beyond the discovery stage in this $)~ i ~ 9 matter, and that we have reached the point where really any 7 10 further effort on the part of the City constitutes harrass- ~~ ; I 11 ment. I s r_ 12 MR. GOODHOPE: What is the issue in the District.

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13 Court case? What's the litigation about? ~ ,- - p. . O,., g m '.. 740 "It's an antitrus't case for treble' [s, I .w. 14: MR. GALLAGHER:

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15 da:aages, and it's the contention of the city in that case '.a. G. 16 that the CEI engaged in conduct, the purpose of which was ,m s 17 to do it in economically. ~ 18 So in a very broad sense, the issuas of that / 19 case encompass in many respects the issues of the antitrust ' hearing before the Nuclear Regulatory Commission 20 l. 21 MR. GOODHOPE2 Well, that's not an attempt to m. ( 22 get the Squire firm out? ,i U 23 MR. GALLAGHER2 Ch, yes. I'm sorry, I misunder-5-C 24 stood you. Yes, they filed a separate motion to disqualify i ~.; - 'J j f q 25 in the antitrust case in. Cleveland and it was on that motion -s \\.. h c.. \\ e ',l O 30,t' e _h, f: . ~~f,.",[. (p *, i 8 , 4,' .=. u l

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W 11, ese is==e there i= **e 5 District Court decision, then, in that regard is identical 6 with the issue here before this Board, is it not? ~ 7 MR. GALLAGHER: I hesitate to use the word y 8 " identical." certainly it's very similar. There may be a ;- p_.. ~ 9 time when I'll argue that it is identical. At least the 10 evidence presented there was the evidence.that will be presen :- I I-ed before you. We have files full of exhibits submitted by e e .r 12 us and by the City and in some respects culled from our.~ w w. ?. .... m . :r G. ,Nor the City,- now,.to. argue that it's' going' to make[ae.f;n 13-files'. g.~ .-g r r 1 3'v y

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15 the imagination after in excess of six months of preparation' w. ~16 for that hearing in that tribunal and I might add with 17 respect to that that there has been an indication that wa 10 can anticipate a ruling there on the outside,in perhaps ten, 19 days.. And I would thi* that when that ruling comes down. 20 that 'both sides ought to be afforded an opportunity by 21 filing or otherwise to indicate what each side thinks its w= 22 impact will have upon this hearing. / ^ It may be argued by ona I' ~L s. 23 or 'more of the piarties that it should be dispositive of the .f v 24 matter before this Board without further need for an evident-w., v.:, L. ... i 25 iary hearing. But without attempting to anticipate that for. ..g. J y - y(; g g,y );f. ,n 4 mts.v-fe u' .9..,, ,:. 4 ::+ -

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w ~ wt < c,, y-l26 = s. r. I epb2 a moment I think at least this Board should know it is 2 essentially the same matter. It requires essentially the samn: 3 evidence, that discovery has b'een had in that and that we i 4 will in a sense, in a very real sense be putting the same 5 show on the road here. e 6 MR. GOODEOPE: Excuse me. Mr. Davis, do you agree i li 7 with this? 8 . MR. DAVIS: No, I do in part but I taka strenuous 9 objection to some part of it. ' 5: + 10 MR. GOODEOPE: Let me hear what Mr. Davis has to 11~ say.. g g,% 12 MR. DA'VIS: Mr. ' Gallagher is correct that there..' 33 2 ,.e4 [q.k, {

. - are a number of similarities,between what is going on in

.13 s;f; -)) W. 14 Cleveland and what is going on here as to this co'11ateral. M ?

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There are major similaritics,' ~ 16 The time frame here is different. There are some rather Y s 9 17 critical differences in the facts because of the nature of ...t 18 the pleadings in this Nuclear Regulatory Commission antitrust 19 review, differences between that and the City's private ~ W a 20 tribal damage antitrust case which was filed July 11, 1975 in ~ Cleveland for the first time. f b 21 m.; ( 22 Where I take exception with Mr. Gallagher is his~ ' ( n# 23 notion.that there has been sweeping and total preparatica gf3 l V y y..; h 24 .in the hearing there. That is, I'm afraid, quite misleading. ? I .u..a6-w:.n l /- 25-I would say~ that the case has been thoroughlyf-fG @r:,. =+ .... z zn _ q. ;- ,... y.,. l' +: -+ u. +

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M_ 27 .gb3 brieifed on the law. It's been heard three tdmes down here. 2 7g,,.been heard in Cleveland. I don't know that' there' are 'I going to be a great many cases that we're going to discover O 4 that haven'e a1 ready been cieed by one oe the peness o= by 5' the lawyers. But the City protests vigorously that it has 6 never yet had a chance to see it s own files. lihen. Mr. 2 7 nallagher talks about the documents that wora presented up 4 8 , f. in Cleveland for the city's part they consisted of those 8 very a,rh4 bits that are attached to our initial brief down 10 h'ere which are documents that came to the City and document 3 11 j that precipitated the City's motion. Those documents were z 12 discovered in discovery proceedings bafore the Nuc1 car s...: 1..' 2*k^3*l &c .'l * = 13' Regulatory Commission and the City was shocked and amazed. 4 14 and then angered at what it 1 earned from those documents. 'L.,. .g s 15 And those documents in many cases show SS&D 1awyers decling' .? 16 with the City's affairs behind its back and we feel that [. 17 never having had access to our files of SSsD regarding these 1 18 kinds. of things, we've never had a chance to shou 'what we y s 19 feet the evidence will show if we're allowed to get at it. 20 .The city has never had a chance to get at its own files l 21 dealing with its own affairs from its cwn lawyors, which I 22 consider shocking. 9 -# ( 23 MR. HEADt Night I ask, Mr. Davis, in response to 24 your request for a subpoena in District Court was any.g :A 25 portion of your subpoena granted? Were there any documents ( ~ ,.cyg ~ ~ _c c. ^ [' s : ~ ~~ ~ . {' 4 y A. n . J;;. ; ;f;._ -.:., m ' ~ ' ;' '~> ~. *, '

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r s s e 28 I mpb4 produced? 2 MR. DAVIS: Not a one. And we feel we have been substantially biased by many of the things that have happened 3 O many of the actions takeo by the federaz 3uege up ehere end 4 5 ,,,ve made our record and we're ready to appeal. 6 MR. HEAD: What was the specific legal basis that 7 he gave for denying your request for a subpoena? 8 MR. DAVIS: On many of the documents -- there was, 9 a list of docinnants. They are no honger a part of this 10 subpoena. I would like to have them but I don't consider II any of them totally critical. There were lists of work 12 papers prepared by SSED. They are in the Nuclear Regulatory 3:q: 'rK

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papers..There is page after page showing on a given date. ;j.. W ^ '. 13 ] .,.y 3 14 an SSED lawyer preparing a memorandum dealing with MELP in ( l \\,, 15 some fashion, sending it off to CEI. We submitted a list ~ irc 16 of those documents and it is true that the Licensing Sqard \\ did undertake to go through them and did come up with a 17 18 couple of them that it felt were quite critica1. It came up with a couple tbat it felt totally undercut some of the ~ ~ 19 20 assertions of SS&D lawyers and were part of its main thruct 21 in deciding ',or the suspension of SS&D. r; l 22 our position is the city has never seen any of,3 e7. . s .~ lV q l 23 those documents, was never given a chance to explain then.

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1 1 24 But, all right, I'm willing to simplify matters and we're ,, f. l not even raising the question of privilege documents in this 25 y ~ xx ~ ( yff3 -*[J 7- . [y ,j.. - a y, Q* m'i QPf, ;'if b,{ y. g '> < V. ' _1 ~

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1 ~.J.._, . L.. . _ __ _.. :. 1 - m 29 ^ 1 g apb5 point. a MR. HEAD: Are those the sama 50 doctments referred ) I 2 ') 3 to in the prior hearing? l Ma. DAv:s ught, the 3udge he1d those priv11eged O 4 5 up in Cleveland. I strongly disagree with that but again .p 6 it's moot now because I'm not asking for them any I: ore., 7 MR. BEAD: Privilege was the basis for his ruling, ~. 8 is that right? ~ . cf Q 2 <1 l J 9 MR. DAVIS: Right, one basis. The other basis was o 10 insufficient pazttictalarity which I think is a nonsense ruling r 11 to put. a kind word on it. How can we, without knowing the, 12 filing system of our own lawyers, identify by number the. J G.:::lC.y.p. . '.x 13 precise files?

We could have gone through, I suppose, had

_.3,,- 14 we treated this as a full scals federal t'. rial, the interroga-y .w 15 tories and the rest. But it has been treated as a colla 5ral.', ^ 16 proceeding. We were initially ready to go forward on motion i 17 on awhihits and the whole thing has escalated. We have 18 never gone through the phase of written interrogatorios to ' x i 19 identify documents which is the usual course. Now, we can do .\\ \\ g that but I have attempted to bypass that uith a written 20 ~~ n 21 subpoena here, a subpoena to one of the SS&D lawyers becausa \\ 22 of the indications in the Appeal Board's cpinion that tims' ~ 23 -is critical. This whole thing has dragged a half a year .' ?( g -\\. 's T 24 past where it should have. It has dragged in both cases to ( j' g (\\, , such a point that SS&D has in fact been in the proceedings .+ > :c';.';% p M '15 .; 5 c x, ~ j, c4 ~- \\ ..e e :vn: . ;. ~

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Mw-+@ehd 9$ h. 4e.- D=e=h-e e o m M P ,4F." 30 V -%r I apb6 all the way through, it's the notion of the City that the Q damage is done by their being there. So I have attempted 3 to simplify and expedite the thing. I have asked for certain .O rize= whica -til no if z'= correce ssan die =ei=e retner 5 critical financial information about the City's Municipal 6-Electric Light Plan't. a. 7 MR. HEAD: Are you indicating, Mr. Davis, and if., 8 your subpoena wars to be grantad that that would in offact

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.a 9 as far as you know now constitute the sum total-off the + 10 discovery that you would consider necessary for this proceed- ^ 11 ing? L. 12 MR. DAVIS: I think so, your Honor, yes. We hava .g 7_;-P[M;t g y 43 had.a change to do some discovery, what Mr. Gallagher 7. s. e "~ 14 referred to there was we took oral depositions of witnessea ' - : 5: :-;;. 15 pre 14=4=a n to this evidentiary proceeding at fedsral court .s 16 in Cleveland and they were unfortunately not alwayo prepared, 17 in a couple of cases they were but in most caset Y. hey were 18 not prepared to preserve evidenc's. They wefe"EHken by one 19 or the other of the lawyers to pin down the other witneas, m 20 so they aren't full cross and direct examination. 21 CHAIRMAN LABO: Now you say you have nevar dona' t 22 this subpoena cotepared to the subpoena bafore the other D-V 23 special board and we heard the talk of 50 documents that the 24 actual antitrust board looked at. Do you have any idea in 'k' s m . 3 ~ 25 connection with the subpoena now before this Board as to the f f. ,.,g. w ?. . j-- M;s ;g;L ~ , :, s, ; - a... .,, o *, : r. -a,s; ..,... i. 3;, v, e . v: n. .. +, I

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5 3L ~ apb7 1 volume or amount of the documents or files that you are ' talk- _A 2 ing about, physically? In other words you want to get into 3 the files. What are we talking about? 300, 50, 257 O 4 MR. DAVIS: I wou1d +s4nk over the period of eime we are talh:ing about here it might run 100, it might run 150. 5 6 MR. HEAD: But you are unable to identify what 7 _ proceedings those files might relate to, particular bond a 8 issues or other particular matters, is that right? ";J; 9 MR DAVIS: I have asked for all of them.

a MR. HEAD:

I know you have asked for all of them .10 11 but can you identify how many proceedings you have had or hou ,o 12 many cases you have had with Squire Sanders? ., t,... a. u. , a. .y. ~ -f, f ~I _ 4< _ MR. DAVIS We've'already.done that. In fact,. '.';( y 13 y ~ a t s. ~ 14 attached to the initial brief of the City we have set forth ' 4% 15 based on billing a great many of them, if not all of them. N 16 MR. HEAD: How many cases were involved?,About 17 1007 c. 18 MR. DAVIS: I think it's between 100 and 150, 19 something like that for the period in issue here. There 20 could be a good deal of duplication. I don't think it would 21 take forever to go through them and the kinds of things I w + \\ 22 think the City would be interested in could be determined g 23 fairly readily. m-4 et, 24' MR. HEAD If your subpoena were to be granted, '~ o , q zer 9 25 what about time? How much time do you think would'be needed a. :. /.

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- -. -, -.. - - ~. - - - - - -. - - - 4 32 apb8 I to go through the 100 to 150 cases or files that are currentl" 2' at issue in connection with yourJsubpoena? L 3 MR. DAVIS: 2 or 3 days maybe. 4 MR. HEAD: So if you were granted the diccovery, 5 you took your deposition, you would have access to the files, 6 vsre only talking about a week or maybe 10 days tin.e from 7 your standpoint? 7= .z 8 MR. DAVIS: I thinir that's really aboti all I woule! 9 need. 10 MR. HEAD: Of course, we ara going to have a i! motion that will come up which will reargue substantially 12 some of the points we're talking about here today'i, . ;n m ; gim yq~; ~ ' The.last question r *have, Mr. Davis, would be ;p.g.u + W..- c p 13 v,; p; ;} T4 .in connection with a specific rn14ng by the appeal board that,* ..: :.. p. 15 what we're supposed to be concerned with is whether there is ' 16 a substantial relationship between the issues in the antitrust. 17 proceeding and the prior work done by the firm. Are all ^ \\ 18 these documents acttally necessary to make that datarminatien c =, 19 the specific files or would not a description of the type 20 of work that was involved, would not that be cufficient for "3 21 the purposes of this hearing and if .so, why not? 22 MR. DAVIS: Well, I can argue-that one of several 23 ways. I falt and do feel that the Board has before it in (, ..s : 7,c g<,,.. documentary form sufficient evidence to decide the matter l 5 Wg 24

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33 I spb9 the City. I have always taken the position that there is 2 more than 'enough evidence but this has always been in dispute 3. and in what is now' apparently heading for a full evidentiary O n rine-r feet it it i= eoi=9 to de that war ese city 1 5 should be in a position to fully answer the position of l 6 SS&D that they 'never learned anything about us at all 7 doing all our financing for 60 years, which is essentially 3 ~i 8 the position they take. S 9-MR. BRAD: I guess my point is are the specifics to relevant and all we have to determine is the substantial 11 relationship between the work done and the issues in the 12 antitrust case? ~ ~ - g..y# 1 r; _ s 13 MR. DAVIS:. Well, they help.

y I adopt n number. of-14

. approaches trying to get before the Beard tihe essenca of ' ~T ~-e .15 what it is that SS&D knows about us and how it could help in 16 an antitrust case and I argue it several ways.. M2at we're 17 really +211 ring about now is my so-called shotgun approach ~ 18 which I do not for a second, however, concede any invalidity 19 to. I am saying ttiat somebody who has tLa volt:minsus datailed i l 20 information about a municipality s finances that SS&D necess-l t. 21 arily did from the massive amount of financial legal work ~ 22 they did in doing all our bonding is in a total position of C l 23 knowledge with regard to many, many things that bear en many l:.; 24 faces of the antitrust review and I can show that relevance. E. ~ - 7 n ~j. ii. p 7 25 One of the clearest, s4=nle listings was in the Wcaff's_ brief7 l . 7 .x

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p 34 .x eph 10 I when they set forth some 14 areas of financial concern in the 2 ..q antitrust review, where the kinds of information the City says that SssD got from its worht for the city would be highly 3 O 4 ~ reia ant. 5 MR. HEAD: Thank you, Mr. Davis. 6 Mr. Gallagher, let me try to complete the circuit 7 with you on similar type questions. We have heard counsel's 8 estimate of what he considers would be involved from a fila [ 9 standpoint in connection with the subpoena befors this Board. 10 Do you have any knowledge as to how many files might be 11 referred to in the subpoena that we're discuscing here? 12 MR. GALLAGHER: I really don't, Mr. Head. I g,.,, % x',y g ).. .13 geceived this on Saturday in my. office. I've not had-a chanca n.a ..x, 14 .to consult with my client. It relates to different kinds'o'f I p 15 files. I presume it would take scme time for them to view 16 their files to find out what there is, but I am in no position.'_ ~ 17 at this momaat to suggest a time element to the Board on this 18 matter. 19 MR. HEAD: When you file your motion would yotk be 20 in a position to provide that type of information about what ~ 21 we're *mning about physically and what your estimates might 22 be time-wise with regard to what it would take? 7, y

~

25 MR. GALIAGBER: I will confer with my client and .g ~.. i 24 attempt to get some reasonable estimate at that time. ' u s. 4m e 25 I would want to urge back, if _I may, upon the Bear 1,7 r w N'. t e , g ,a t-l'# 3 Y ,y_ y. a, ; =y m . w. c.y.-+_.-+$j w ,4',

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e t 33 upb 11 that there has been discovery in this case, that the deposi-G 2 A tions of all the witnesses and anyone else that the City (C 3 wanted has been taken ay the city, and while the City contends Q apparently at this time that those depositions were not taken 5 on direct e-4= tion, that is trua. He took them on cross-G examination and had ample opportunity to cy.plore cvory facet 7 of this matter. So there has been thorough discove.'.y already 8 ~ in this case by both . sides. 4 8 MR. HEAD: There was cne more question I had for [ ~' ~ 10 you, Mr. Davis, if I could - thank you, Mr. Gallagher. II-Is the information sought in this subpoenc exactly 12 ~ the same or broader than the 50 documents that the antitrust.:. y,., 1 .a h. 13. board. has reviewed in camera, or, in other words, ar'e you..gj %s. Q -~ ... ;.y p 14 broadenizig those 50 documents or is it the s, me material? (. t. 15 MR. DAVISt I have eliminated them, sir. fg ic 16 MR. HEAD: Those are not involved at all? ? .E n 17 MR. DAVIS: No. [~ n.u: 18 MR. HEAD: All right, thank you. \\ ~ 19 MR. DAVIS: I would like to rajoin Mr. Gallagher 20 on one thing. I want to give you an example of the kind of 21 thing I am looking for. i 22 In 1972 the City asked Squira, Sanders and Dempsey ] 23 to prepare a revenue bond issue for the Cleveland Electric 7g 24 Light Plant. Now, this particular episode is of great

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S; p 25 interest to them for certain reasons. They attempt to argue' - Y l.:

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..; b 6, 36 9 .aph 12 1 that the city waived certain things b'ecause of the way the ( 2 matter was handici. The SS&D partner who is' handling this r Y 3 bond issue was _ Mr. John Bruechal. Tuo City does not 4 consider thd* particular episede critical in any particular 5 way, but as a sample of a specific kind of an issue it serves 3: 6 to illustrate my point. I did take Mr. Brucchel's deposition. ~ '7 s 3tr. Brueckel asserted generally that he didn't learn anything s 8 in particular about the City in the course of all his dealings 9 with it in preparing the revenue bond issue beyond what was ]n m 10 publicly available. Fine. Let's sac your file. Presumably 11 in the file of SS&D there would be work papers, notes, g ^ f memorandum to' the file, his conversations with other SSED _,, [g 12 .n 1,. .p :, ' lawyers', memoranda of his convarsations with the variety off y' 13 ~ ,.L 14 City officials that he dealt with. Lp:p;. fW s..- g 15 Now it would be very interesting for a lawyer to ~ ..c b'. 16 have something like that to see whether his own lawyer is ) .g , elling the truth and I have asked for similar' files wi'th t 17

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T8 regard to a variety of other financings. We have never saan' 19 those files. I am cross-a-ining my own lawyers blind 20 about an area of high technical expertise, that is chio ' 3 i m 21 bond finane law which is an esoteric specialty and I've had f, j to do it without one document to see whether they are telling [' 1 22 O,, the truth or not and that's why I would like tTs 5nefit of. ' I 23 ,, ~ .-ve. u. 24 our own files prepared at our expense by our.own imiyers., s .ct-a F' 2. 7 y.4,.y 4 s - Y,.... ~ : sr c .7 - 4 j }, '.*.g Ej"' 0 1 'y,.11,*,:g", -P

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... -.. g .,_ j s 37 T .n y. u. 3 IE ebl 1 MR. GALIAGHER: May I respond to that? I think (3 2 it is important that I do so in the context in which it is U.A v 3' stated. 4' We 1972 bond ordinance matter has been held 5 by Mr. Rigler and the Licensing Board not to be relevant 6'. to the proceedings be ";; it. He pointed out that there was no issue made with respect to it by the City and has 9; 7 8 stricken all of the evidence from the record of this matter ~ .( 2; 9 that relates to that issue. So that we have precisely hora to the kind of situation to which the Board has addressed T 11 itself, to wit., relevance. ~; ? s 12 And in our f 6:. motion for a protactive order we, W:y,,.

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&g- ,h-will point out to this Board that that is. not part of the Q;.:u, 13 i $y 14 original proceedings and therefore there is no norus bet:f55n m[+. is. D 15 the evidence which is sought by Mr. Davis and the matte" 16 before the Licensing Board. y:. 17 CHAIRMAN LAZO Mr. Gallagher, perhapa you can .x 18 explain. Is it not unusual for a lawyer to deny the right td s to his client to inspect his own files? It's not a quaction' Q 1 20 of Privilege. o 21 MR..GALIAGEER: Well, of course what they sought b 22 all along was an inspection of C3I's files. 7 W., O Z. L' CHAIRMAN LAZO Well, Mr. Davis is tn44 ng about - 23 L y 24 their own files. Presumably there's a file in the SG&D,v. g_- Z.~, 1, p ,s

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25 law firm that says " City of Cleveland" and it may say MEI2.. i .g.. w t.t ', - p 'f.f) k ..}{$ lQL% ;&&c~ '** K. Q.; .a ./ ., ;.e[. .x ') A' ~~1' ~ [

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..:+ -,i,.7 -. J. 7 ,g c, p. s.y 38 "~ E;:. w ab2 1 or " City of Cleveland Bond Issue." Presumably they ha ],' ( 2 paid their fees. There is no lien on those files. Why is ~ 3 the client not entitled to inspect their own files? D 4 MR. GALLAGEER: Well, relevancy for on3 thing; 5 two, the characterization of the file is not quite as f: e. s 6 simplistic as Mr. Davis would suggest it is. s 7 All I can say to you at this particular junctura %y,; w. 8 is that these are not City files as he suggests. He suggests ] 9 perhaps that some papers had cette over to 3S&D frcm the City'. 10 There are some papers in SssDrs possessien that were self-i 4 11 generated essentia11y'in connection with soms of the catters ,1 ~ n 12 for which it worked on the City. These were called for in .y. h., . w. g n-the prior subpoenaes and these are.the very matiters thr. oug50 2f, 13 i ..v. x q.3 ':,:.- ya ff relevance or other grounds both the District Court and ?Q fi

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2 y,, 15 the prior Boards that have passed upon this matter have .. g S. ,y 16 held that we were not required to produce. ?s % R. 17 MR. HEAD: Mr. Gallagher, I know you're going V~ ~ ' ".".) e: 18 to have your motion coming up, and I won't hold you to this n S. 19 if You want to change your mind in your motion, but are you 20 relying on privilege at all as an opposition to the sub- .l 21 Poena? 1 22 MR. GALLAMER: Yes, I'm relying on privilega - p f ',. ";g ' V 23 but more specifically I think that Mr. Roynolds would 24 address himself to that point. I think he strongly feels that privilege protects against the disclosure of the files.l X ~ ~ l 25 ,.n s m g,:....w: _g A. f, ( No 7 f' A b*) ' ? +, j J~2,*,' N .=s ~ i .?., y, c,, .s .g, j%7 n

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39 eb3 I MR. HEAD: Of the City filos. / A Mr. Reynolds. 3 MR. REYNOLDS: Yes, sir. As I read the request 4 for documents it seems to me that a request for all files 5 referring to, and then the list of a number of items, would 8' clearly require the production of material in Squire, 7 Sanders and Dempsey's possession which CEI would concider - 8 that's Claveland Electric Illuminating Company - would [ ..a 9 consider to be privileged matter. 10 And I would oppose, and intend to file a motion II' opposing the disclosure of any information which would be 12 entitled to the protection of privilego by the claveland < ;. !:n y - 4. I3 Electric Illuminating Company. , p 7 c .7., %j a-c , f, W - - ; ;. 3 '. ;3 ( -[ 14_ MR. GOODHOPE: What specificati.on in the subi O 15' poena are you referring to now, Mr. Reynolds? 1.6 MR. REYHOLDS: I'm looking at the schedule of 17 documents to be produced. and under Paragraph 2, for exanplo, I ~ 18 "all files referring to...

and the first item, for

~ 19 example, is " City of Cleveland Municipal Electric Light 20 Plant, MELP." 21 To the extent there are files that would maka 22 reference to that that would be entitled to a claim of y.

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V 23 privilege by CEI I would cartainly want to assert that claim 24 of privilege. ~ h s g N '25 And I would point out to this Board that a request ^2 g o#* % i . < Q :. w 2. ~ m,.. < $+ .=e .s ,.m. r. [ ..( .?- - r., - ^ . ; J'.a y 7* $ y %Mn ., ;g T Q." : G ?l.' y '^l 3 - l. ff k jlh_h. w

, sfif: .gn ...:-.. w 40 eb4 1 in ahnaat identical ter:ns was made of CEI, not of Squire, h 2 Sanders and Dempsey, by the City in the NRC antitrust 3 proceeding and pursuant to that raquest, some 500 docents 4 were c1=4==d to be privileged and that privilega claim has 5 been upheld. It is now on appeal in the United Statea 6 District Court for the District of Columbia, but it has been-7 upheld by a Special Master and then on a procedural question p 8 went up to the Licensing Board and the Appeal Board and.Q 9 the privilege has been sustained. ~ i . 4^ 1G To the extent that that clain of privilege which 11 was sustained to thoce 500 document would under this recuect ,i...%,iw 12 also embrace the same 500 documents I would certainly cot.;.. 1n. ,v. cc:a.u #, gar i s v. .want the City to inv de the privilege indirectily yhen LitM;ge @ 13 ,7R.%. g 3' . o..a ;. 14 had been precluded from doing it directly. .a .m

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.c 15 So I would intend to cppose this sebpoena or 'k v. o 16 move to quash the subpoena, at least to the entent that it'n' w 17 necessary to protect the claim of privilege by the clavaland s 18 Blactric Il3n=4aating Company. e I also would add that as to Item No.1, for C 19 20 exaeple, which does ask for all files pertaining to the 21 issuance of notes, bonds, or other dabt instrucents for i.-. : the Clir of Cleveland, I believe that the Licensing Board [< l 22 v 23 has specifically ruled that the matter of bcnd ordinances j and debt financing is not a matter at issue in the anti ,n+l,. 24 F. 7& s.

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,e.g 41 eb5 1 And it seems to me that to the extent we're going 2 to open the door at this late date to discovery of the City a for this kind of information which, I might add, parallels O

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5 filed just last week by the City, a request to reopen y 6 discove..y to get the same information as ashed for here in 7 connection with bond ordinance and bond indebtedness, I 4-7 8 would also feel compelled to resist that because I believa ' yE ~ 9 we're at the and of the antitrust hearing. The door has 10 been closed on that issue by the Chairman. It really is not v 11 relevant or could lead to anything that is relevant in that

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.V 15 hour in this whole area. [ y 16 MR. HEAD: Mr. Reynolds, let me ask you sacething 7 in connection with, for example, looking at the schedule ~ 17 18 of documents in Paragraph No. 2, just for my own clarifica-g 19 tica, are you indicating that, for example, soma of the 20 CEI files might refer to the Municipal Electric Light Plant m.. and that therefore they would be within the contert of this,. ?.l.. 21 ~ v. u-22 subponna and you would claim privilege as to them? .[' ' f~',.

.i 23 In other words, I presume there are CEI files

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.~... 3. 42 eb6 1 as to filas in the possession of the Cleveland Elcctric 2 (. y Illuminating Campany we've gone that round and it's behind 3 us. Q 4 To the extent there are files in Squire, Sanders 5 and De,mpsey's possession which are either internal to ?,,- 6 Squire, Sanders and Dempsey or are in a file taarked for 7 CEI or maybe in a file marked for the City that are files 8 that would be entitled to a claim of privilege by my client, t 9 I would want to assert that claim of privilege and maintain 10 the protection. 11 I don't know how Squire, Sanders and Dempsey 12 maintain their files so I don't know what dccuments we're Jip.@..6. x 13 talking about hers. But I would not trant a document.which m 14 I < 1=4=ad as privileged, because iti was in the possessicE. - .~ e.

w 15 of CEI, for example, I would not want another copy of that ~

'I 16 document then to be turned over in this discovery without 17 having an opportunity to claim the same privilege for the to identical copy. 19 And it seems to me that I would be entitled to a 20 claim of privilege as to all copies of that docunant that 21 are in the possession of my client or in the possession of }, 22 co-counsel for the client. e' c, c-23-So I -}ust don't know how they maintain their ,~ , :r 24 files.

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.. ~.-. 43 eb7 1 there is any such overlap or privileged document, though, r 1 do you? -(.(.- 3 MR. REYNOLDS: No, sir, I don't. I guess my O-problem is that-The claim of privilege is CEI's to :nke 4 3 and not Squire, Sanders and Dempsey's to maka, as I under- .e 4 6 stand it, under the law of privileged comunications and y 7 therefore it would have to be asserted by me on behalf of, T.. 8 CEI, and that's all I'm suggesting. ' c(le. + a. 9 I think because of the unique posture of Squire, +.. 10 Sanders and Dempsey in this proceeding that's all I'm say-11 .ing, that to the extent the request is -made of Squi$ e, 12 Sanders and it's a claim of privilege and =uct be asserted' ~ > jy ;. d_ by a 13 by the client, I want to indica.te at.this juncture on the P:: fC .,.. q e.. ,r, + .. m.. record that' the client intends to clah the privilege and /'w;'.; +.o .w. ~ f4 15 to maintain the claim of privilege that it has assertad '.M.,%I?. ,s 4

4 16 throughout this proceeding.

x e 97 CHAIRMAN LAZOz This would appear to be an ~ ~ 18 appropriate tima to take a brief recess. Lat's recess for. H_ 19 15 minutes, please. C 20 (RecessJ >g 4 . x me 22 ? f ~ (Q 13 r e; c r :s t p 4 ~~, . :...y P r* 1. .t w r,

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4 44 i IF wbl 1 i CHRIRMAN LAZO: Mr. Davis, in the schedule of h 2 documents to be produced which you attached to your subpoena 3 form you refer in paragraph 2 to "All filos referring to...." Q 4 And then there's a list of specific subjects. 5 Do you mean by that all City files, all of your i.t 8 files, the files of the city of Cleveland; or in that as 7 broad as it is written? It could be anybody's files, sor.e 8 other clients of the Squire law firm; is t: hat correct? ' 1 9 MR. DAVIS: Yes, it could. .J 'to But I would say if they deal with our affairs' 11 and the information submitted by the City is being used by 12 its lawyers for somebody else's benefit, that gets into gjg.. th another area.of ethical conduct. There is something. called [?.! O,' + x.s pp ~ 14 the lawyer-client prs.vilege, and I don't think information NI w, ' Y y\\ ~ 15 supplied by the City of Cleveland about its own affairs is i 16 something that its lawyers may freely transfer to other fl 17 clients without the city's written censent; which was never 18 given. ~ 1 'y CHAIRMAN LAZO: But is that relevant to on tg..s ~ ~ ~. 20 .detem4'Mation here? 21 MR. DAVIS: I think it' may turn cut to be vert \\ ,.v 22 highly relevant. I th b k it itay get us into the va.".1 araa 1 . (.V 23 of conduct the city alleges that has bean going on all theso .w y years behind its back. We have a few samples of 't in the )..y i y. . A.%;.. apwhibits to our first brief. 'c* .e. 25 i i O.?.- i ?' ,,. w .k - , L ' d '.' ' ,4, ~ - 14 ; .'i s. 54[ , ;i. .,. h, _ ;

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c 7 wb2 1 CHAIRMAN LAZO In sustaining the City's burden l

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2. in this proceeding, is not all the City has to do is to show 3 that matters were co - n4cated that had a substantial re-Q 4' lationship to the issues in the antitrust proceeding? It 5 doesn't matter, does it, what the law firm with those con- .+. 6 munications? a y MR. DAVIS: Mr. Ch=4 mmn, you're quite correct. a. B - 1,, I 8 I *hi"k that accurately statas the City's understanding of. p g the law e .s i ~ to We have gone somewhat beyond our burden of prcof, [ ., z I 11 but here we are in June and they're still in tho cacc. I'm ~ s 12 not c 'aite clear what it does take to get them off. g.3:, - = y.,y, n> I,D.'7-3' 13 CHAIRMAN LAZ.O: Well, we're near 'ths.,cnd of~ . ;.,,a t" s c,........ s..w.n. .+ 4 14 Junes W-n.., M. 8 'Ah -tm If your application for a subpoena was to be '^ 15 ' ;, 3 16 . denied, Mr. Davis, when would the city be ready to go to, s y. 37 h== & g on this case? The middla of July? ..;[. w 18 MR. DAVIS: Yes. We're essentially ready. This 2 we gg would be the hat major piece in our preparation. My only .1

1' 20 Problem at that point would be the availability of witnessen.

21 MY 98Deral problem on that, without getting 7', 22 into it in any great detail, is that from the City's stand-b' y point we used, if I recall, four rather critical City high ,4 x y officials, the handa of four major departments, as our main g. W '0., ci, e-w- .e.. C witnesses. And it's their availability that is of ,; U,W,', ,7T 25 ,.x,. 'f .w ~ 'W ~' l 4., f } l.M.'f *- 3, j ,_1 4 ? ' [ h' E'Whh j .v. t. ,f

~ 4G s wb3 1 considerable interest to me. And I would have to check that 2 pursuant to a determination by this panel when it wants to go 3 forward. 4 CHAIRMAN LAZO: Thank you, sir. 5 MR. (DODHOPE: Let me ask a' question. Is it 6 your contention that any statenent that the law firm, 7 the Squire firm, to any of its clients, not only C2Ie which 8 referred in any way to the City of Cleveland must have , e } 9 necessarily come to their knowledge as representatives of the i 1 10 City of Cleveland? I t 11 MR. DAVIS: No, I would not contend that. / W l 12 MR. GOODHOPE: I wouldn'.t think so either. i .f Q p j 13 MR. DAVIS: I would say thfs-- - ~ ';.$ ". p[ ^ l h l y ~'v 34 MR. GOODHOPE: How are we going to separate j' 15 this out, now? How is the Board going to do that if it (( r ~ ~ ; 16 decides to--- Supposing they made a reference to.th'e City 17 of Cleveland: how are we going to determine whether or not 18 this information.was obtained b$ the Squire firm ah legal ~ jg representatives of the City of Cleveland? 20 MR. DAVIS: Well this is the dilemma they find-0 21 themselves in, Mr. C W hope. ,y . z. 22 MR. GOODHOPE: It's a dilemma you find yourself T ,O in. - And D-o s. ~ y 24 MR. DAVIS: Well, I would say that without insist-f L,p 3 ing that that be the case, any practicing lawyer who is dis-c ~, ,o.t n 9.. s s ,,p. I 5 g , / . + (" h k ~ e s s s.#. 4 s g_ .n., _3=a N' "[ 4 ,,,'V s.

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. _.. ~. - - -. 4 wb4 1 cussing one client's affairs with another client oe7es i h-(., 2 duty of disclosure that is a part of all this. And if un C 3 discover episodes where this was going on through t'ho 4 2+2 - a tary discovery that I'm requesting, and fe then dio-5 cover there was no disclosure of that, I think that has a -1 6 tremendously direct bearing on what we're about hera. i 7 In any event, I tried to, in this Ite::t 2, bc 3 8 as precise as I could with, again, not having any notion j ' ;'. 22 of exactly' how they k' ep. their files any more than Mr.Raynolds e g 10. does. I'm using certain subject mattors that are directly 11 pertinent. 7 f2 And I would say that, without getting into thaco'~ ... m% ~-q, ; ,, @AM., 13 files, there no,.really no real way of knowing. *'.) A 4'u mx.o. v 14 It seems to me at that point where wo have _, 3Q 7v' ' y . 15 looked at the files and they feel certain documents ara @$[ .l. 16 privileged, they then have the right to object to their 'g. i 17 king intzuduced in evidence. s MR. GOODHCPE: On the basis of rolsvancy? 18 u MR. DAVIS: Relevancy, privilege or whatever else 19 20 they have. f But it seems to me the City ought to have the 21 , e. ~ I 22 rightinthefirstanalysistoseewhatisinitsennfiles,[ V or in files dealing with its own affairs. 91 23 .~m t .m CHAIRMAN LAZO: Mr. Davis, if f e Board does y c".* ;; W '(M issue your sWaa, when w uld y u than be ready to ga to [:gr.g' 25 .n 7 3 .y, 7g

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48 t. wb5 1 hearing? Can you estimate? e ih 2 s MR. DAVIS: I was trying to indicate earlior, I G 3 would think that a week.after actual access. Q 4 CHAIRMAN LAZO: Mr. Gallagher, I wendor if you 5 could elucidate, please: You referrad to un application 6 for a protective order. Precisely what is the nature of 7 the protective order that you would propose asking 'the Board 8 to grant?

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g MR. GALLAGHBR: Yes. It would be in the nature s to of asking the Board in the first instance to quash the deces 11 tacun feature of the subpoena. Our contention in that s s, i 12 respect would be that the City has already engaged in dis-m:G:4 13' covery,,it has already taken the daposition of Danic1.J. ,'] q, -.. v.: s 14 O'Laughlin, it has already listened to him testify in this .,.n> r p. ~ 7".; ,J 15 very room before the Special Board, it has had an opportunity '.' to cross-= = 4na him in the Federal District Court in 16 37 connection with this same precoeding conducted therh. It has 18 had an opportunity to cross-examine, both in court and en ~ jg deposition, all of the other lawyers associated with SGOD. 20 It has sought, f.naddition,asthesecondground,[ to quash the duces tecum feature, these vary records, in con, 21 i: ' ; 22 nection with other subpoenas which it has served on - 2 rO Mr. O'Laughlin and ther members of the firm. [ 23 TheDistrictCourthaspassedonit,theotherj.. 24 yy - o' B ards have passed on it. We feel that this is a redundant J. ;' 25 <r~4- . 4 'y... 4 p c .,4_ '$- [, s ,e,, x,. ~,'.x G..;, ;. + x ". ' EpY 3.0f $&,h.k %g::. . h j'. j % \\ 5.; j " $ h'! - ",k,'-!?[{p % ' ll _. ',, e.k 4 . J 5. ( 4 ' %' K hk.l .,3> g -4 3 - e t, e v m..

3,3. J. r. s 49. q; wb6 1 effort, that it is harrassmant, and we thinic that to be ~an ?" i indep= + at ground to quash it. '[, 2 y V 3 We think, further, that although it ic limited 4 to fewer items, the generality of the kinds of records it k 5 seeks is really not limited beyond what the other depositions-- 6 what the other subpoenas called for. 7 We would propose, in connection with our motion, ~ 8 for example, to attach copies of the other subpo'enas served, El i 9 .the duces tecum features. We would propose to submit to you to the rulings of the prior boards that have considered it v i . y 11 here. We would have the transcript of Judge m upcEsky's 1 ... ~; ~ 12 remarkswith respect to it for your examinatilon. , _4 w m,, 13 T.his matter has bee.n befor.e this ccamissica md ,,"w w s, i .v y .+, ~, 14 it has been before the District Court for an extended period ..,.T .1 1.c a D 15' of time. There has been ample opportunity to discover. ,.iv. t 9 ,.g 16 I submit the time for discovery is 1,ong past:. 17 We azu at the eleventh hour and we ought to proceed with \\ 18 this matter. And that's basically our position. 19 I do have one additional problem which I should-20 draw to the Board's attention. I did not receive a copy 1 \\ 21 of the application. The subpoena itself came to my atten- }[p' 22 tion on Saturday. It calls for tha deposhion of Mr.O'Laughlin _'- r-., V the day after tomorrow, on Wednesday. And I will be in 23 24 Philadelphia on that day in any event. ~. -' :, r,y3 x _.y j - v,- 25 x.. And we do.wish to file this motion for a protective

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4 M m ~ - - -. -.-- - - -- -,.;,-..>- w 50 wh7 1 order. + a 2 So that under the circumstancca we would ask 3 leave of the Board to a date certain on which to file it, Q 4 or, conconnaitant with that, an extention of the return date 5 on the subpoena itself. 4 G CHAIRMAN LA20: How much Hrm would you necd, 7 Mr. Gallagher, to prepara - to file your application for a 8 protective order? Jg 9 MR. GALLAGEER: I think if we havo to July 6th \\ 10 that we can have it filed by that time. That would give no

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. I.. 15 would file a -- 16 MR. REYNOLDS: I would ask a similar extension ',*.g~. 17 until July 6th. I have not receivedany of the papors yet. 18 And I would request, if we're not on the service list, that 19 I be added to the service list so that we do got a copy of 20 all filings. 21 MR. DAVIS: You are. -1s' p-4 22 MR. REYNCLDS: I guess I just haven't received 'l A ^! ,.~.t any thing; j 23 t CHAIRMAN LAZO: Well then we wM' direct you,. p:x j y p.g - 12( : -.. g, u Mr. Gallagher and Mr. Reynolds, to file your moticns 'so that.

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^ ...v _. _. - _ a. m .4 ^ s 51 a. wb8 1 they are served on or before July 6th, and provida until A 2 July 12th for any' answers. \\. ~.- i 3 Mr. Davis, is that convenient? Or does that l 4 Press you? 5 MR. DAVIS: That will be quite satisfactory, 4 q. 6 MY ** i "*" - 7 CHAIRMAN LAZO: And we would erpect any anstrer j 3 8 to be filed by you, Mr. Davis and Mr. Goldberg, by ths 12th. g MR. GOLDBERG: That's acceptabic. 10 CHAIBMAN LAZO: Thank you. 7 s-MR. HEAD: Mr. Gallagher, it would *e helpful to 11 12 the Board if in your motion for a protective ordar, if you 'l a;V..Pc : m.. kI. would. indicate some idea to the Board of what volums of . (: c 13 g; 1 ~' files you might k concernM with. ,y pA, ; 14 1 . e MR. GALLAGBER: I've made a note of that, sir.'}l 9 g

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E. M Inthat regard, Since the Subpoena x appears on its face to be broader than just city of clavalend-s, e pu d ghe us sema ma ] 18 of which are actual city files and which might be other "t~ f j, clients' files. We don't need a lot of specificity, but 20 just so we would have some idea of what actually ve are _ f.

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,g w, 1., deallag with from the standpoint of papers and t %. A 3 9"' L, CHAIRMAN LAZO: We had said earlier that it 23 -u would be very helpful, and I think necessary, ct an early U r.'f,r 24 .y y date for the Bosrd to have before it a listing of the issuh;r V 25 .4 -m , O.j 7'.h. Q - k

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---2.----- --....:. = -. x - -..... - - l 52 3T .t-wb9 I in controversy in the principal antitrust case. I note that 2 (.. in its Pre-hearing Conference Order No. 2 back in July of 3 '74 the Antitrust Board did attempt to set forth the issues Q 4 in controversy in some detail. We, of coursa, do not know 5 to what extent those have been amended or augmented or I 1 6 withdrawn or added to. ~ 1 7 Who could tell us what is availabic here at .,e 8 this stage? 9 MR. GALLAGHER: I'm not certain that'my answer' c., t, to is responsive, but I had contemplated if it pleased the. g 11 Board to add an additional witness to the four I had called .a 12 in Federal court for this very purpose. And that witness V >.,V

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16 understands, and is prepared to advise the Court as to what~~ i x .,.I 17 issues - or the Board, rather - as to what issues arc or i., 18 are not before the Antitrust Board. ~ e.j It occurred to me that he probably is best p W; 19 y 20 prepared to do that and to aid the Board in this connection. j I ]* 21 I conceived of him as a witness in this matter before this ~ + 22 Board. 4 ~ 23 ,a, -t e .$ p, -- $ s ry.' g 24 ,m ..e , ~. x .. i

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... - a.. u u.g m- .e,... > 53 ' m s 1G ebl I CHAIRMAN LAZO: Mr. Goldberg? j 2 MR. GOLDBERG The Staff would preserva the right 3-to object to Mr. Reynold's testifying as 'to what the issues 4 and matters in controversy are in the antitrust prccseding. 5 To answer. the Board's inquiry a little more y .a 6 directly, issues and matters in controversy that trare set 7 forth in the prehearing conference Order No. 2 have sur-( 8 vived and are viable issues in the proceeding. n 9 In addition to that, the parties opposed to the s to Applicants for an unconditioned license on September 5th m 11 filed more specific allegations of the charges againct ,s-s 12 Applicants with respect to the antitrust procseding. But. I:s. ~ .sy. .- y{.g)

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..;.Mfp ^ generally speaking those issues and matters irr controver=y.,., 13 .r - ny m gg' 14 which were set forth in the prehearing conference Order No.- 7, e 0 i 15 2 are the general broad issues that we 8re dealing with '? (vw.

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19 that again, please? ^ n.- 20 MR. GOLDBERG The parties were requested by ~ ~ the Applicants for more specific information uith respect [s 21 22 to their contentions in the antitrust proceeding and on.

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.m r, .e a 54 1 Cb2 forth specifically their allegations rugarding the. Applicants' h, 2 application for a license for the nuclear facilities. L 3 Those have been amended to certain cincr c= tents C throughout the course of the proceeding but generally speak-4 5 ing, the broad issues we're dan 14 ng with in the antitrust 6 proceeding were the very ones set forth in prehearing cen-7' ference Order No. 2 8 CHAIRMAN LAZOs Was that 1974 or '757 9 MR. GOLDBERG: July '75 I believe. 10 MR. GALLAGEER: September. 11 MR. GOLDEERG: September 5th,1975. I'm sorry; 12 yes. [ ...s - ' \\g S g p 13 CHAIRMAN LAZO Thank you. 7-q c. t 7, - U~. W* '" 1 14 MR. GALLAGHER: I'm troubled by Mr. Goldberg's 'I T 2,. ,g f, S' ,u. 15 statement for the pimple reason that in the brief which the [ s. '16 Staff filed before the Appeal Board it purported to.3et 17 forth issuns itself, and to take a pretty strong positien 18 with respect to those isstus. 4 5 19 I would submit if the Staff feels it can stata ~ 20 what the issues are for a Board that certainly we ought to 21 be entitled to give this Board what assistance wa can with s I 22 respect to what those issues are. I'm not suggasting that 23 any other party be bound with respect to its testi: tony but 24 certainly we should be entitled to present our view. p[,, k .,w fs t.., 4 lv 25 CHAIRMAN LAZOs You're suggesting the answer to my- ~ .. N j_

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. ~. 55 ab3 next question, Mr. Gallagher. I was about to wonder whether .( 2 or not it might be possible to obtain a stipulation by the 3 parties as to what the issuits are in the antitrust case. 4 MR. GALLAGHER: My answer is No. 5 MR. DAVIS: I would certainly object, Mr. Chairman, 6 to the type of proceeding suggested by Mr. Gallagher, to 7 have Mr. Reynolds, who is a highly partisan Icwyer for [ ag;.e 8 the CAPCO defendants, tall this panel of lcwyers what tho' 'A' 3: 9 issues are I think is a little bit superficous. ~.-a w 10 Mr. Goldberg pointed out that they e:xist in . s. 11 writing. I think the panel.is entirely adequate to daternine .c ,z 12 what they are. If we were to get into the kind of a situa 3,%.. . *j@ & tion where a litwyer is telling othei-lawyers what tha, issuns - 13

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14 are I suppose that I am then forced to tha resort of bring-. x 15 ing in special counsel of the City of Cleveland or the local a 16 Washington law firm of Goldberg, Fieldman and Hjel=falt, 4 n.: 17 who are familiar with the issues, to testify in recpense. 18 I thi nic that whole line of proceeding is in- ' ~ k - n a 19 appropriate and I would object to it. I think the pcusi ~2 can look at the prehearing list of issues and the other-20 21 documents they need to determine what the issues are. 1..# m 4 22 CEAIRMAN LAZO: Well, I think principally WG vere O { 23 simply looking for identification in the record as to where. < Q, k' *.:.T[')p p(-, + 24 we might find these statements. L ~,' ,t (. s ~ ,; y

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.: 9 56 A I eb4 I won't comment on anything else. ~- 2 The prehearing order No. 2 which contains the 3 broad-issues I think is probably the starting point. I 4 would submit that the September 5th,1975 filing by the 5 City of Cleveland would be the most appropriate fi'4"g for 1 8 purposes of this Board's determination insofar as the motion ~ 7 before it. 8 There was also a September 5th filing by the NRC 9 Staff and there was an answer to interrogatories filed by s to the Department of Justice, both on September 5th,1975. ,.3 1 11 The Department of Justice as recently as last'w. 1,.. ?: 12 week w w/ its filing and added sosie additional allagn~_94 dj jf f ' 13 tions.. And my recollection is that they do.not concern " j h ~e:t d ..; q Jg,,. f4 that part of the' case that directly relates to' CEI and the ;,' - 2f

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~ 15 City of Cleveland but, rather, relate to other issuas in N' ~ ci. 16 the case involving some of the other Applicants. But that +y. 17 filing was last week, and I can provide the exact dats :'or 1.8 the Board. 19 I think in addition to that, in terms of trying 4 20 to determine what the issues aze, the Licensing Board has 21 ruled and we can give you the transcript reference because w t 22 the ruling was made by the Board on the transcript. It ] Q y' 23 was not a separata written order. 4, 24 The Licensing Board has ruled ca Applicants'.,:, 'E P ,x. ,., ? y.Qt S./ 25 . motions to dismiss certain allegations as well as its motion ff 3 c,, f.: - s [j?, 3.$.k 4 ^h i. ~[,Q = p 'Y = ~ j~ U' 7,*l[g} [< '= ,y ),2;3:,.;);$f ihr?p 'D-a , L ^ ~',am D W]Eb. i !$%A' i s'i Q D i' 6.- -:e %,4.vt. o ' ' fu ~ p ~ .A;_ -' -Q . ; ; ;; - : W _ : y_ ^ Ti _v_ 'J l. V' l ..a,

.- g -...... .....+ g.me . c.- 57' eb5 1 to dismiss the case generally. It denied the lattar. As 2 to the formar, it granted certain of the requests by the 3 Applicants to dismiss various allegations. Again ::rf recol-4 lection is that that part of the Licensing Board's ruling 5 relates to issues that would not be terribl'I germa:s to tha .s. 6 particular matter that's before this Board. ..~. 7 I believe that completes the paper record, if 8 you will, of the allegations, but for the ruling bv j{ f..C, l 9 Chairman Rigler that appears at 7499 of the trsnscript in n,.' c. s. s 10 the antitrust hearing, and that is the ruling that has ,,;r~ 11 been referred to earlier to this Special Board relating to 3.. 12 testimony dealing with the bond ordinance, and the Chair $an's . Q:W $? 13 determination to strike all evidence conoarning that matter.h ' #'" ,.jid Mr . His ruling there was based specifically on the ',; 96 14 .a;~ r W 15-City's September 5th filing. /g ~ ;.L p. 16 CHAIRMAN LAZO: Thank you, Mr. Reynolds. i. 17 MR. HEAD: Just one other brief iten, gantieren. [ w 18 Referring back to the conference call we held 19 on June 21st, 1976, the Memorandum for the File that I %~ t , 2 g 20 indicated I would prepare I have prepared. It's a memo ~ l '~ 21 dated June 21st,1976. It will not be in the Public Docu-a - 1 I 22 mant Room; it will be in the panel's document rocs at the -7~ j 3 v 23 East-West Towers Building. It will be available for ~.- 1 y 24 inspection by any of the parties at any time. ~ ,:,.i.A tr

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' I just wanted to note that on the record, that I 25 .g: 'ay c 4:cu<.n i..,:4" V, h ,1 ~ .g.C.. n-rc ' N.. ,s }, ,j.. -i -[.~* O., r1 g, l ;' *,,,[. . ' -'I, ~ ' Z.. ^ ^., :- ; .. m.. s -f. ); _,.. 9

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n 58 - eb6 1 the memorandum regarding possible withdrawal was made and 2' is available to the parties. 3 MR GALLAGEER: I would have the record show at 4 this time that this was ccusidered by Squire, Sanders and 5 Dempsey and we have no objection to the presence of Mr. Head 6 on this panel. 7 CHAIRMAN LAZO: Thank you, Mr. Gallagher. ~ 8 MR. DAVIS: I would also add for the record that 9 the City has no objection to the presence of Mr. Head. 10 MR. HEAD: Thank you,.Mr. Davis. ~ !1 MR. REYNOLDS: The other Applicants have no 12 objection. - y MR. GOLDBERG: The Staff has no objection. - 4.i. Q~ .f ^

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-~ .. y x . a y a 14 MR. HEAD: Thank you, gentlemen. ' + yJ. I;.3 y 15 CHAIRMAN LAZO: Well, it would appear that it j N o 16 might be appropriate to adjourn this prehearing conference 37 now. I would ask whether there are any other matters that 18 any of you believe we could profitably attend to. I don't 19 know whether we should attempt to schedule another pre-20 hearing conference at this time. We'll await the filing of

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the motions and the responses thereto, and endaavor to act [ 21 22 on those promptly. J(' ~ 0-2 22 '.7.' y y 2s .y_ x 1 a. m. ~ .= . f: .g. N _q ( 9 ',* m : '. ~

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1 4 -y 59 1 spbl MR. GOLDBERG: Mr. Chaizman, in the event there is [ 1 not another prehearing conference here in Nashington, one of 3 the items you mentioned during the conference call that O 4 ro= we= tea o= tae ese=ae for toaar we= the 1ocetien oe the 5 evidentiary hearing and I was just wondering whether or not. O you wished to discuss that at this time? 7 CHAIRMAN LAZO: I think that might well be an ? 8 appropriate thing to do. $5 M,. \\ 9 During our prehearing confaronca -- at least our s .c 10 conference with counsel by telephone, there was soma discussion 11 I believe by you, Mr. Davis, regarding tha number of members m .12 of the Department who would have to ccm3 to Washington. In L g.

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Q.. s 13 most instances of antitrust proceeding,. mostof#thc. attorneys c ~ 'I-f ~' .aq 14 ' reside in Washington. The staff is here and generally the ~ ' 15 . Board members are here. Simply adhereing to the reason-16 able rule of convenience of all the parties, a titrust n 17 proceedings generally are conducted in Washington. Tha 18 Commission's policy, of course, regard.i.ng nuclear 'facilitias e 19 has been to commence the proceeding in the. pro:rimity of 20 the facility. Very often those hearings are held in thair o 21 entirety in the field. ~.. ' 1 22 But the policy, again, is conveniance of the partias 23 and we certainly would be open to a suggestion if Cleveland t 24 is a more convenient location for the greater number of ~ ' [f- &( ib*.... Lv 25 people,that might be an appropriate location to conduct the Y. . (. yg-o ' m ~ y. ,s lg ~ ' s. , h Wr ,y

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-t a 15 , length with full direct and cross-amination. U c r c o r.e Y Ly 16 of this could be done by utilizing portions of the r2 cord h 17 that was created up there, and supplemented possibly.4 E. . iJ 18 My dilessna with regard to City officials is this u-19 'that the law director, the finance director, +M public 20 utilities director and the airport director, who are probably 21 the four most critical directors to the operation of the City, the directors in Cleveland being the erecc.tive heads 4, 22 V 23 of the various operating departments of the City, would all ~ ,3 . -A 24 he tied up in this thing over a space of two dcys and it would$ $ g' ts t :: ' 25 be pretty awkward for the City's operations to have that and N w I _m m w M~r*q,.Xf. TD![Ul , ag e. r;. _ <: y, gg'_ Y W \\ , Iggg,y ,,,w.. ^ ~r 1s ,e.19 ',. _. a g., _. ~4 y 'v' 2 -u~ \\~ .x c, n-

.v:< .~ e,,. w g; ^ 61* s 1 N mpb3 .actually have them all down in Washington waiting return.- 1 .({+} I'm not saying it cou1d not be done but it would be difficulte 3 There are a great many demands on the time of these gentle 1:en 7 O 4 Ther com. righe under the Mayor ce C1eveiend in euthoriez end l. 5 iu responsibility. 6 If it were held in Washington I would have to . c.- 1 7 very carefully consider presenting the testimony in soma x 8 written form ~ I'm not saying that could not be done either. , g. 9 We have had Mr. Kadukis down in Washington en occasion, we,, ..cs. u-i 10 could fly him in for one day, but it's taking' half of the N 11 \\ operating records in the city at one tima; to tie them up l 12 in this case that is a problem. - ib D ,..png k o 13 Ttiose wou1d be.the basic considerations I would ", W~ 3 n w .,. :Q;t. gg s a a 14 have without attempting to dictate to the F.oard hou it chould, ..xV + 15 be done. i ,' ~(l.'y VM 16 I do suggest we're going to proba)1y have to add lN 17 to the record created up in Cleveland in certain areas and ~ g.- ..z. e m 18 wou1d hope that we're going to have to ad'd sto it in terma 19 of. doew=ntary submissions. We did have.on'behc1f of the 20 City about 27 or 28 written exhibits, chout half of which 21 are already before this Board as attached to our first a. ~ Q 22 brief and SSaD presehtnd something en the order of 15 or 20 ' y N. s 2 23 written exhibits and documents. Those could be rather quich-p;, 24 ly gotten together. They exist and have been worked through.. '. .o ~ 4 ;. + 2, p.; .g y 25 by counsel. All of those pretty much were submitted by ~'~$,d M., - 1 x ~ ~ . ~ O, f '. L ' ~ lk,,f& l h-4 l _c' '.t Y i '. ] aL- [. 1 e ~* r l x< m_ ~ v _,;. Qn.. a*p g' ~, .b' I' ,.,. ~ ha Y l h h v *h *,. [y-' }'~ r .n.,,..' ,c -i 2

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.. ~. .,C,. - e 62 I spb4 stipulation up there. 2 CHAIRMAN IAZO: We're facing or anticipating a v 3 problem and I guess you referred to it, Mr. Davis, in terms 4 of what is in the record before us and what is not. As we 5 go along here I think it will be necessary that any portion 6 of this rather voluminous antitrust record that you ask us ^ ~ 7 to rely on will have to be very carefully identified. 8 I think you should not assume we have read all thoce 9 transcripts. \\ . a..

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) 10 (Laughter.) m ) 'l MR. HEAD: Only the Chairman need read all the i i% - s.. 12 transcripts. .;.. 1 *e 7,y,fg ps 13 (Laughter. ) 9.Q h-o, .y v, ~ 14-CHAIRMAN LA20: Mr..Gallagher, regarding location, 'l

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-.4 15 do you have any preference? l 2' $; 3. 16 MR. GALLAGHER: My preference,'Mr. Lar.o, would be 17 in Washington as with the other hearings for two -- there ara +, 18 two principal reasons for this: first of all,ve think it 19 important that the testimony be from live witnesses. We e s 20 think credibility will be an important consideration for this ~' 21 Board and therefore we think it important that you see 'the 22 witnesses live and hear their testimony live and be in a n i. D 23 position to judge credibility from that point of view. i l 24 Three witnesses of the five we would produca would Q c, b 25 be in the Cleveland area I suppose.Mr. Davis would question 3 s 2

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N!? ~-63 , f;; ^ a ~. 3 I upb5 Mr. Reynolds as an appropriate witness but nevertheless I. 1 include him in the five as of this area. Mr. Lansdale is 3 here and Mr. Hope, the assistant secretary of the sinking { 4 fund lives in Alexandria. He is, we think, quite critical 5 to our case and we prefer to have him testify live. 6 .The second reason for urging that the hearings be r-9 7 held in Washington is publicity. There has been considerable 7

publicity which has attended the disqualification proceedings.sy?;.

8 - _q 9 !,in Cleveland, considerable publicity which attended the = h. 4 to '. hearing before the District court last week. Thic publicity i 11 1s something that unfortunately I suppose is inherent in , ~4 l ..X $ 1 n. 12' something like,this. But in addition to that a nir.ber of, ' ' .jF xr= , n r :n v 13 g., the people involved are people who are politicly connected, jfg f. W 2y. ;g: a 14 dome of whom are running for office,without identifyin.g any - m,, - c c 15 body specifically, and it would be in their personal interest..,,.. nm 16 have wide publicity given to this matter. We would feel 17 f that that is not in the best interest of justice, it's .i 18 I cer+= inly not in the best interest of my client. And for ~ ,. -4 19 .this reason as well, we urge that the hearing' be held here ^)' 20 in the surroundings that we have here, in surroundings we are 21 familiar with. ~ 22 MR. DAVIS: Well, I would certainly take excepticn a ~p 23 to any suggestion by Mr. Gallagher that there was any s.~ 1 24 substantial amount of publicity given to any of this in i .; _ m -c

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C4 I apb6 barely mentioned the disqualification. I don't r.hink one-1 article appeared on the front page of either paper. I den't 3 think one article appeared that covered more than about the 4 space of my open hand and the notion that Mr. Campanella, who 5 is the law director of Cleveland, is running for count 1 - \\y 6 enemiasionership would have any bearing on publicity given 7 to this is totally without justification. One of the lawyers 8 in the case from the City of Cleveland is running for a' ^ -[p. .m 9 judicial position in Cleveland but I don't see what that has

q 10 to do with any of this.

I don't think publicity is any 11 serious factor and I would cer+ninly disputs that. ~ .T

m 12 CHAIRMAN LAZO Well, it's one of the factors and

- -_.m . %9 & 13 really that's all..we're looking for. J -"W..M E<' , f! g 14 I think, too, that one should realize that when * ~

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~ 15 the Licensing Board travels that also means that the Court', 16 Reporter travels and the reproduction stcff, it's a rather ~ 17 large number of people involved in any move and we genarally 18 try to a=---- 4=te the greater number of people taking into 19 account all the various interests. The ob+=ining of a 20 suitable hearing room is, of course, another consideration 21 and someti:aes the federal courts are available during the 22 summer months and many times they are not. ~ ~ 3 K; 23 nr. y

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x f 65 JM Pb 2A ebl 1 MR. REYNOLDS: I'd like to add just one addi ' o g (p tional fact here to plug into the equation and that is that I we are coming to a close in the antitrust hearing. It is h, 4 now anticipated that we will conclude that hearing if not 5 by July 2nd by the following Friday, which is July 9th, . y_.. 6 hopefully. 7 The Board has already indicated that the post 8' trial briefing schedule is going to be a very atringent cne. 8 It has not yet ruled exactly how stringent, but it does mean-10 that during the month of July and into August my time at 11 '~ least is going to be occupied fully, trying to get a handle 12 on the record that you have already recognized as being .!L d,rx voluminous, and completing a post-trial brief.: cNE/v ' 5b. 13 .4@

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ll1 C :' e gn 14 l'or that reason I would just like to add that ^' b ~y g 15 my own preference, since it would require of attendanca 16 at 'ths hearing irrespective of whether I do testify or dont 17 testify, my cwn preference would be to have it here in .e - 18 Wasliington so that I do not take too much time away from 19 whati is already going to be a very tight schedule in s ~ 20 conspleting the post trial briefs in the antitrust proceed-s

21

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22 CHAIRMAN LAZO Thank you. We appreciate your 't' 23 problem, and I'm glad you mentie= d it. 24 Mr. Goldberg, do you wish to add to this dis- ^'.' r .n r _^ .' 1 25 cussion? s' v: -j e.e y-- 8 k ,r ., - (3,s y QQ 4 :- ,- ".: / .y l ~. vz: m.. ( ', w,r ~ ~. \\_*YN [ sk' eq \\,' ; [n%, y ?* I [ &*, ~ {'.X./,'Q,Q ,s.

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66 .i eb2 1 -MR.'GOLDBERG: The Staff has no objeetion to the h.- 2 hearing taking place either in Cleveland or in Washington. s - 3 CHAIRMAN LAZO: Very well. Thank you. { 4 Mr. Gallagher? 5 MR. GALLAGEER: May I just add one more thing, m: 6 Mr. Lazo? . question does [ 7 A question occurs to me and the a not have to be resolved at this moment, but it ought to be g 4 9 one.I think that we as lawyers and perhaps the Board should p w. 10 consider, and that is whether it is appropriate to proceed n' 11 at all in this matter. And this I raise new in light of y, po J V. ' 12 what Mr. Reynolds said with respect to the conclusion of ? + ~..M5dy M 13 the hearing on July 2nd or I believe you said at the lat:est 7e O,c ', ..m:Q.T X u f 14 on July 9th. ~ ;e3;O ?;' - w, m 15 This would terminata essentially for all practic h ~ y. 16 purposes under the present fact situation as we understand l'[ j 17 it any active participation by Squire, Sanders and Dempsey e. 18 in the hearings themselves and thorofore the urgency which, 19 the Appeal Board reflected in its order, it would seem to 20 ma under the facts of the case as they now e::ist, simply 21 are no longer with us. 22 While not addressing oursetves to what I raise y 23 at this particular - nt, perhaps after the actica for ~ n: 24 protective order has been briefed and considered by the N . g.g y:- Court, the Federal District Court will have acted and at,% f> ' ' i v 25 ~ ,M !cq

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? eb3 I that Hma it might be worth this Board's attention and i 2 - q e.veryone's attention to take a fresh look at this in light 3 of that development. ':c N,, 4 CHAIRMAN LAZO: The motion filed by the City 5 of Cleveland requested the Board to suspend the law firm .[ .g 6 from further participation in the proceeding, and I guess .'?T 3-7 that clearly would include participating in any appellate 8 review that might follow a decision. ,f- ,y a 8 ~ But we agree there is that to be considsse'd, M d to simply the situation which we all find ourselve: in new [ ? 11 with the expected termination of the antitruIst proceeding [ t. v a 12 in the very near future. b-9Myf p 13 -Well, perhaps we may,want to address.ourselvea 'i' .ffx aw:; y Q tp~ 5 14 to that, too,. at a later'date. f,.S,p,.,> g.. 1

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15 Are there any other matters that we can profit, g 'A 4 16 ably attend to here this afternoon before adjourning".? { d' 17 (No response.) 18 Hearing no response, we'll adjourn this pre- - c 19 hearing conference and we thank you all very much for w 0 ? 20 attending. 1 0 21 (Whereupon, at 3:15 p.m., the prehearing 4 ,= j 22 conference was concluded.) ) 0 ~ 23 J

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