ML19326A717
| ML19326A717 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 09/24/1976 |
| From: | Goldberg J NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8002270886 | |
| Download: ML19326A717 (8) | |
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UNITED STATES OF Al' ERICA ggp 271976. > i NUCLEAR REGULATORY C0:GISSIO:1
,g7
,M.,.
BEFORE THE (SPECIAL) AT0t11C SAFETY AND LICENSittG BOARD 1,
g In the Matter of
)
flRC Docket Nos. h THE TOLEDO EDISON C0:4PANY and
' ov-buuA THE CLEVELAtl0 ELECTRIC ILLUMIflATING 50-501A COMPANY (Davis-Besse Nuclear Power Station, Units 1, 2 and 3)
THE CLEVELAND ELECTRIC ILLUMINATING
!!RC Docket Nos. 50-440A 50-441A COMPANY, ET AL.
(Perry Huclear Pcv:er Plant, Units 1 & 2)
)
NRC STAFF'S ANSWER TO THE MOTI0" 0F SQUIRE, SANDERS AND DEMPSEY TO DISMISS DISQUALIFICATION PROCEEDINGS I.
INTRODUCTION _
On llovember 20, 1975, the City,of Cleveland (" City") moved the Atomic Safety and Licensing Board presiding over the above-captioned antitrust proceeding to disqualify the law firm of Squire, Sanders & Dempsey ("SS&D")
from participating in this proceeding as counsel'for The Cleveland Electric Illuminating Company ("CEI") or any other Applicant.
That motion is based on an alleged conflict of interest arising from SS&D's prior dual repre-sentation of CEI and the City and its current representation of CEI in this proceeding. A similar motion to di.squalify SS&D was filed by the City in its private antitrust suit against CEI and others in the United States 1l District Court for the Northern District of Ohio.
On August 3, 1976, the District Court entered an order denying the latter motion..0n August 26, 1976, SS&D moved this Special Board to dismiss the disqualification proceeding tb[
1/ City of Cleveland v. The Cleveland Elictric Illuminating Co., Civ Action No. C75-560.
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. on the ground that the doctrine of collateral estoppel required dismissal as a matter of law.
For the reasons set forth below, the Staff believes that SS&D's motion to dismiss the disqualification proceeding should be granted.
II. SQUIRE, SAflDERS Afl0 DEMPSEY'S MOTI0fl TO DISMISS SHOULD BE GRAtiTED The ultimate issue to be resolved by this disqualification proceeding is whether this Commission should suspend the law firm of SS&D from further participation as counsel in this antitrust proceeding in order to preserve the integrity of its licensing process.
The Staff submits that only this Commission, exercising its own independent judgment, can make that determination. However, the Staff also believes that the concept of comity between this Commission and,the federal courts deserves great 2/
deference.
Accordingly, the Staff is of the view that based upon public policy grounds, the Special Board should adopt the findings and conclusions of the District Court's opinion, which is based on a full evidentiary hearing.
2/ Comity is especially appropriate in this disqualification proceeding since the City's motion to suspend SS&D frca ft'rther participation as counsel i'n this proceeding is premised on the City's belief that SS&D
"[h]as failed to conform to the standards of conduct required in the courts of-the United States." 10 C.F.R. 52.713(c)(2).
i
. l Based upon our reading of the District Court opinion, the Staff a
believes it appropriate for this Special Board to find and conclude that:
(1) SS&D's work for the City as bond counsel in 1968 was with i
respect to " general obligation bonds for street lighting rather than 14ELP mortgage revenue bonds. Ac such, their relationship to MELP is 3l so attenuated as to render them irrelevant to this proceeding."
(2) SS&D's work for the City as bond counsel with respect to the 1972 $9.8 million f4ELP bond issue was limited to drafting the bond ordinance.
This did not give rise to potentially differing interests W
between the City and CEI and was not adverse to SS&D's adversary 61 representation of CEI in this proceeding.
(3) There is no substantial, relationship between the antitrust 1
proceeding be. fore the flRC and SS&D's services to the City on an ad hoc
~
basis as special bond counsel.
(4) When the City retained SS&D as bond counsel in 1968 and 1970, it was aware of the potential for conflict implicit in SS&D's simultaneous representation of CEI and the City and the subject was openly discussed between the Law Director and the Director of Utilities.
The City's insis-tence that SS&D act as bond counsel was with a full understanding of the impact tha't such insistence could have upon the ethical issues evolving 3/ City of Cleveland v. The Cleveland Electric Illuminating Co., Civil Action flo. C75-550, Order, August 3,1976, at 12.
j4 Id. at 17.
5/ Td. at 29.
T/ Td. at 40.
_7] H. at 31, 40.
from the undertaking.
(5) The City consented to SS&D's role as bond counsel for it with a full knowledge of the potential for conflict and thus waived any rights to assert an alleged conflict of interest against SS&D.
In the Staff's view these findings sufficiently resolve the issues upon which the City's motion is based so that any further evidentiary hearings here for the most part would be duplicative and would add little to our knowledge of the facts.
Based on the above findings, the Staff recommends that the Special Beard dismiss the instant disqualification proceeding.
III.
THE FINALITY OF THE ORDER DISMISSING THE DISQUALFICATION PROCEEDING SHOULD BE STXYED Uj;TIL ALL APPEALS FROM THE U.S. DISTRICT COURT'S ORDER DENYING DISQUALIFICATION HAVE FEEN EXHAUSTED In order _to avoid the possibility of this Special Board, the Appeal Board, and eventually the Commission, basing its resolution of the ultimate disqualification issue on a district court opinion which subsequently is reversed on appeal, the Staff suggests that the Special Board. order dis-missal, but stay the finality of that order until all appeals from the District Court's order are exhausted. Because the NRC Rules of Practice allow only 10 days from the date of a final order for the filing of a 10/
petition for reconsideration, staying the finality of the dismissal order 8/ Id. at 16-17.
7/ H. at 16-17, 21-24, 40.
B TO C.F.R. 52.771(a).
w
~. would allow the timely filing of a petition for reconsideration if the District Court is reversed on appeal.
IV.
CONCLUSION For the reasons discussed above, the Staff believes tf at SS&D's motion to dismiss should be granted, but that the finality of the order disdissing the disqualification proceeding should be stayed until all appeals from the U.S. District Court's order denying disqualification have been exhausted.
Respectfully submitted, L& f
'y J,S.
' Jack R. Goldberg
, Counsel for IIRC Staff Dated at Bethesda, Maryland this 24th day of September 1976.
r
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE (SPECIAL) ATOMIC SAFETY AND LI_C_NSING BOARD In the Matter of
)
THE TOLED0 EDIS0N COMPANY and NRC Docket Nos. 50-346A THE CLEVELAND ELECTRIC ILLUMINATING )
50-500A COMPANY
)
50-501A (Davis-Besse Nuclear Power Station,
)
Units 1,2&3)
THE CLEVELAND ELECTRIC ILLUMINATING NRC Docket Nos. 50-440A COMPANY, ET AL.
50-441A (Perry Nuclear Power Plant, Units 1 & 2)
)
CERTIFICATE OF SERVICE I hereby certiff that copies of NRC STAFF"S ANSWER TO THE MOTION OF SQUIRE, SANDERS AND DEMPSEY TO DISMISS DISQUALIFICATION PROCEEDINGS in the above-captioned proceeding have been served on the following'by deposit in the United States mail, first class or airmail, or, as indicated by an asterisk, through deposit in the Nuclear Regulatory Commission's internal mail system, this 24th day of September 1976:
Douglas V. Rigler, Esq.
Atomic Safety and Licensing Chairman, Atomic Safety and Board Panel Licensing Board U.S. Nuclear Regulatory Commission Foley, Lardner, Hollabaugh Washington, D.C.
20555
- and Jacobs 815 Connecticut Avenue, N.W.
Docketing and Service Section Washington, D.C.
20006 Office of the Secretary U.S. Nuclear Regulatory Commission Ivan W. Smith, Esq.
Washington, D.C.
20555
- Atomic Safety and Licensing Board Joseph J. Saunders, Esq.
U.S. Nuclear Regulatory Commission Antitrust Division Department of Justice Washington, D.C.
20555 Washington, D.C.
20530 John M. Frysiak, Esq.
Atomic Safety and Licensing Steven M. Charno, Esq.
l i
Board Melvin G. Berger, Esq.
U.S. Nuclear Regulatory Commission Janet R. Urban, Esq.
P. O. Box 7513 Washington, D.C.
20555 *
-Washington, D.C.
20044
/
Reuben Goldberg, Esq.
Terence H. Benbow, Esq.
David C. Hjelmfelt, Esq.
A. Edward Grashof, Esq.
Michael D. Oldak, Esq.
Steven A. Berger, Esq.
Goldberg, Fieldman & Hjelmfelt Steven B. Peri, Esq.
1700 Pennsylvania Avenue, N.W.
Winthrop, Stimson, Putnam & Roberts Suite 550 40 Wall Street Washington, D.C.
20006 New York New York 10005 Vincent C. Campanella, Esq.
Thomas J. Munsch, Esq.
Director of Law General Attorney Robert D. Hart, Esq.
Duquesne Light Company 1st Assistant Director of Law 435 Sixth Avenue City of Cleveland Pittsburgh, Pa.
15219 213 City Hall Cleveland, Ohio 44114 David Olds, Esq.
. Reed, Smith, Shaw & McClay Gerald Charnoff, Esq.
Union Trust Building Wm. Bradford Reynolds, Esq.
Box 2009 Robert E. Zahler, Esq.
Pittsburgh, Pa.
15230 Jay H. Bernstein, Esq.
Shaw, Pittman, Potts &
Lee A. Rau, Esq.
Trowbridge Joseph A. Rieser, Jr., Esq.
1800 M Street, N.W.
Reed, Smith, Shaw & McClay Madison Building - Rm. 404 Washington, D.C.
20036
- 115515th Street, N.W.
Frank R. Clokey, Esq.
Washington, D.C.
20005 Special Assistant Attorney General Edward A. Matto, Esq.
Room 219 Richard M. Firestone, Esq.
Towne House Apartments Karen H. Adkins, Esq.
Harrisburg, Pa.
17105 Antitrust Section 30 E. Broad Street,15th Floor Donald H. Hauser, Esq.
Columbus, Ohio 43215 Victor F. Greenslade,.Jr., Esq.
William J. Kerner, Esq.
Christopher R. Schraff, Esq.
The Cleveland Electric Assistant Attorney General Illuminating Company Environmental Law Section 55 Public Square
~ 361 E. Broad Street, 8th Floor Cleveland, Ohio 44101 Columbus, Ohio 43215 Michael M. Bri' ley, Esq.
James R. Edgerly, Esq.
Roger P. Klee, Esq.
Secretary and General Counsel Fuller, Henry, Hodge & Snyder Pennsylvania Power Company P. O. Box 2088 One East Washington Street Toledo, Ohio 43604 New Castle, Pa.
16103 Russell J. Spetrino, Esq.
P'aul M. Smart, Esq.
Thomas A. Kayuha, Esq.
Fuller, Henry, Hodge & Snyder Ohio Edison Company 300 Madison Avenue 47 North Main Street Toledo, Ohio 43604 Akron, Ohio 44308
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. ~.
John Lansdale, Esq.
Cox,.Langford & Brown 21 Dupont Circle, N.W.
Washington, D.C.
20036 Alan P. Buchmann, Esq.
Squire, Sanders & Dempsey 1800 Union Commerce Building Cleveland, Ohio 44115 Robert M. Lazo, Esq.
Chairman (Special) Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- 4, Andrew C. Goodhope, Esq.
(dackR.Goldberg s
(Special) Atomic Safety and Counsel for NRC Staff Licensing Board 3320 Estelle Terrace Wheaton, Maryland 20906 Daniel M. Head, Esq.
(Special) Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C.
20555
- Michael R. Gallagher, Esq.
630 Bulkley Building Cleveland, Ohio 44115 James B. Davis,-Esq.
Special Counsel Hahn, Loesser, Freedheim, Dean & Wellman National City - E. 6th Building Cleveland, Ohio 44114 i
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