ML19326D441
| ML19326D441 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 08/12/1975 |
| From: | Mark Miller, Renfrow R CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.), ISHAM, LINCOLN & BEALE |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8006110463 | |
| Download: ML19326D441 (19) | |
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C h *uTEE UNITED STATES OF,AP. ERICA g AUG ! 3 375 > ;9
. NUCLEAR REGULATORY CO:*ITISOIGN c.7, . .. , 6-n "y, i BEFOPE TIIE ATOMIC ST.FET'l AND LICE!; SIN '"' ud,"" -
APPEAL BOARD t .
I ;G
'In the Matter of )
) Construction Permits COI: SUI 1ERS POWER COI'PANY -)
(Midland Plant, Units 1 ) Nos. 81 and 82 and 2)p3 24i - )
PETITION OF COUSt"*ERS POWER COI'PANY FOR RECONSIDERATIOM OF ALAB-283 OR FOR CERTIFICATION TO THE CC:':IISSICN Consumers Power Company (Consumers) , pursuant to 10 C .F.F .
52.771, respectfully requests that the Atobic Safety and ,
Licensing Appeal Beard (Appeal Board) reconsider its decision
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in ALAB-283 that a holder of a license to construct a nuclear facility has the burden of proof in a show cause proceeding instituted by the Nuclear Reculatory Commission (Commission) .
Due to the major policy ,and legal questions raised by ALAB-283, Consumers also requests, pursuant to 10 C.F.R. S2.785, that the Appeal Board certify its decision en the burden of proof to the Commission. -
THIS DOCUMENT CONTAINS INTRODUCTION I l
1 On December 3, 1974, Consumers was ordered, by the Dir-ector of Regulation, to show cause why all activities under Construction Permits 81 and 82 for the Fidland Plant, tinits 1 l 8006yn fS;3 g ,
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(2) and 2 (Midland) should not be' suspended pending a showing by the licensee that it was in compliance with the Commission's regulaticns pertaining to quality. asst ance, and that ther6 was reasonable assurance that such compliance would continue through-out the construction process.- The order was entered pursuant to the Atomic Energy Act of 1954, 68 Stat. 919, as amende,d, 42 U.S.C.fS2011 et sec. and 10 C.F.R. Parts 2 and 50. The show cause order alleged three instances of non-conformance with quality assurance program requirements involving. placement of concrete, violation of record keeping procedures, and deficiencies associated with cadweld splicing of concrete reinforcing bars. ,
- Consumers answered the shou cause order, urging that the Construction Permits not be modified. The Saginaw Intervenors (parties to the proceeding pursuant to the notice of hearing ac-companying the shou cause order) responded to the order by asking that the Construction Permits be revoked. Bechtel Professional Corporation and Bechtel Power Corporation (Bechtel) , Consumers '
architect-constructor for the Midland plant, intervened in op-position to the entry of an order modifying the construction permits. At a pre-hearing conference on March 23, 1974, the Commission's Pegulatory Staff announced that it no longer sup-1 ported the entry of an order modifying the construction perrits,^
- 1. - Tr. pp. 32-33, 48-49. ,
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-leaving only one party, the Sagina'w Interven' ors, supporting-any alteration in the construction permits. Phile the Atomic Safety and Licensing Board (Board) expressed its intention to explore the facts surrounding the two ultimate issues s,et forth in the show cause order,2 it a' Iso asserted its view that the holder of a construction permit bears the burden of proof in a show cause proceeding and must, therefore, dcronstrate why the construction permits, should not be suspended, revoked or' otherwise modified.3 On June 10, 1974 Consuners filed a Fotion to Inpoce the Burden of. Proof on'the Proponent of an Order Suspending, Pevoking .
Or Otherwise Modifying Construction Permit ros. 81 and 82. Fcth the Regulatory Staff and Bechtel filed pleadi'ngs supporting Consumers' motion. - No pleading was filed by the Saginaw Inter-venors. On July 12, 1975 the Board issued a Pemorandum and order granting Consumers' motion and imposing the burden of proof on the Saginaw Intervenors and the Regulatory Staff.4 After Consumers, Bechtel and the Regulatory staff had filed written testimony, exhibits and trial briefs, the evidentiary
- 2. Tr . p . 51-52.
- 3. Tr. p. 48. -
- 4. LBP-74-54 reported at RAI-74-7, p. 112.
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(4) hearing comrenced in 21idland, Pichigan on July 16, 1974 and con- <
1 tinued through July 18, 1974. Since no party, including Saginaw,5 l offered any evidence that the construction permits should be suspended, modified or revoked, Consumers twice moved that the proceeding be dismissed on the ground that the burden of proof had not been net.6 The Board denied these motions stdting in its Initial Decision that "in the circumstances here present, a ,
determination is warrant'ed on the' record respecting Consumers' compliance with Ccmmission quality assurance progran".7 The Board concluded in,its' initial decision that "{clonstruction Permits I!os. 81 and 82 issued to Consumers Power Company for the Midland Plant, Cnits 1 and 2, should not be suspended, modified ,
or revoked". .
On July 30, 1975 the Atomic Sa'fet and Licensing Appeal Board issued ALAB-283, in which'it concluded that:
(1) The Licensing hoard erred in not placing the burden of proof on Consurers in the show cause proceeding,
- 5. Saginaw did not file either written testimony, exhibits,
. trial briefs or participate in,any fashion in the evidentiary hearing.
- 6. .Tr. pp. 429-438 and 705.
- 7. LBP-74-71, RAI-74-9, 584 at p. 592.
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- 8. Id. at 610.
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(2) The error was ren6.ored' harm 1 css by the nanner in which the Board conducted the evidentiary hearing, and (3) The initial decision was warranted on the re-cord. .
Accordingly, the Appeal Board affirmed the initial decision'.
Although the Appeal Board's ruling placing the burden of proof in a show cause hearing on the holder of a construction permit was unnecessary to its decision, such a view, as is shcwn below, is erroneous in that it cic rly misinterprets both the Atomic Energy Act of 1954, as acended, and the Commission's en-forcement precedurcs as set forth in Chapter 10 of the cede of Federal Pegulations.
QUESTION PRESENTED
-Whether Section 7 of the Administrative Procedure Act (APA) ,
80 Stat. 378, 5 U.S..C. 5500 et,sec., when read in conjunction with the Atomic Energy Act of 1954,.as amended, places the bur-den of proof on a party licensed to construct a nuclear facility in a show cause proceeding initiated by the Commission to de-termine if that license should be modified, suspended or revoked.
1 ARGUMEET Section 181 of the Atomic Energy Act of 1954, as amended,10
- 9. 5 U.S.C. - S556 (d) .
10, 42 U.S.C. S2231. I l
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-provides that the provisions of the BPA "shall apply to all agency _ action t.: ken under this chapter, and the terms ' agency' and ' agency action' shall hav the meaning specified in the Administrative Procedure Act ...."
The'APA defines " agency actio'"n to include "the whole or a part of any acency .... sanction".12 An agency " sanction" is defined as "requirenent, revocation or suspension of a license."13 Thus, the suspenaica or other nodification of Consumers' con.-
struction permits would clearly be " agency action" since " license" 14 is defined to include "the whole or a part of an agency permit", '
and Section 185 of.the Atomic Encrgy Act provides that a con-struction permit is -deemed to be a. license for the purposes of the Act.15 The show cause order was entered, pursuant to the Atomic Energy Act of 1954 and the hearing was conducted pursuant to S189 (a) of the Atonic Energy Act. Hence, it is apparent that the provisions of the APA were applicable to this proceeding.
In part, the APA provides that "(e]xcept as otherwisa pro-vided by statute, the proponent of a rule or order has the
- 11. See also: Siecel v. Atomic Enercy Corm'n, 400 F.2d 778, 785 (D .g. Cir. 196 8) .
- 12. 5 U.S.C. 5551(13).
- 13. 5 U.S.C. 5551(10) (F) .
- 14. 5 U.S.C. 5551(3).
- 15. 42 U.S.C. S2235.
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(7) burden of proof".16 Liket ise, 10 C.P.R. 52.732 provides that
"(u]nless otherwise ordered by the presiding officer, the ap-plicant or the proponent of an order,has the burden of proof".
In the instant proceeding, the Director of negulation, pursuant to 10 C.P.R. Part 2, Subpart B which provides the procedures in casos initiated by the regulatory staff, cn upon the request of any person to impose requiren.ents on a licensee, issued an order to Consurers to shcu cause why the. construct permit for "idland should not be raodificd, .eucranded 6r revoked. The hearing was initiated at the request of the Saginaw Intervenors.18 ,
Under these circunstances, it is clear that consurers was not the proponent of the show cause order or the hearing.
While the Appeai Ecard achnculedged in its decision that the APA, including 5556 (6) , applied to Cornicsien adjudicatory proceedings and that Consuncrs was not a proponent of the show cause order, it concluded, nonetheless, that a show cause hearing on the suspension or revocation of a construction per-mit, as opposed to an operating license, falls within the "otherwise provided by statute" qualification to the normal
. allocation of the burden of proof contained in 555G (d) .19
- 16. 5 U.S.C. 555 6 (d) .
18.- 7 AEC 7.
- 19. ALAB-283, p. 12.
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According to the Appeal Board, the e.4.ception is not explicitly stated in the Atomic Energy Act; rather it flows from the tuo-step licensing process established under Section 185 of th'at Act.'O Consurcrs respectfully submits that Section 185 of the Atonic Energy Act neither explicitly nor implicitly provides for a shifting of the burden of proof from the proponent of an order for the suspension or revocation of construction permit to the opponent of the order.
It is true that section 185 provides for a step-by-step licensing procedure for a nuclear facility.21 Under that section, a construction permit, which for all other purpose cf the J.ct is deemed to.be license, authori cs only construction of the facility. In order to operate the facility, the applicant must show, inter alia, "that the facility' authorized had been con-structed and will operate in conformity with the application as amended and in conformity with the provisions of this Act, and of th'e rules and regulations of the Commission".
The Commission's regulations implementing Section 185 of-the Act further clarify the dichotomy between the. construction permit and the operating license. 10 CFR 550.35 (b) states that:
- 20. 42 U.S.C. S2235.
- 21. Power Reactor Dev. Co. v. International Union of Plec.,
Radio & f4acnine EcrXcrs, 367 U.S. 396 (1961).
- 22. 42 U.S.C. 52235.
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" [a] construction permit will constitup.e an authorization to the applicant to proceed with the construction" of the facility, but 10 C.F.R. 550.35(c) warns the applicant that:
Any construction permit will be subject to the limitation that a license authorizing operation of the facility will not'be issued by the Commission until (1) the applicant has submitted to the ccmmission, by amendment to the application, the corplete safety analysis report, portions of which may be submitted and evaluated frem time to time, and (2) the Cem-mission has found that the final design provides
. reasonable assurance that the health and safety of the public will not be endangered by operation of the facility in accordanca uith the require-ments of the license and the regulations of this
. chapter.
Thus, while authorization to operate a nuclear power plant may be acquired only after a two-s'c age licensing procedure, authorization to construct a nuclear power plant is complete upon the granting of a constructi'on permit. In order to preserve this separation be't ween the construction permit and operating license, the Commission is absolutely denied any authority to consider the investment nade by the licensee under'the construc-tion permit when acting upon an application for an operating license.23 Even though a construction permit constitutes final authori-zation to construct the facility,24 the applicant is required to conform to the Atomic Energy Act, the Commission's rules and
- 23. Power Reactor Dev. Co. v. International Union of ricc.,
Radio & Liacnine Workers , 367 U.S. 396, 411 (1961).
- 24. 10 C.F.R. S50.35(b). .
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(10) regulations and'the construction permit. Failure to so conforn will subject the applicant to civil penaltien and the ponsibic revocation of his construction permit -- but only in accordance with the procedurcs of the APA.26 The Commission's regulatiens provido at 10 C.F.F. 550. 54 (e) that:
The license (including construction permits pursuant to 10 C.F.R. 550.55 (c) ] shall be sub-ject to revocation, suspension, modification, or amendnent for cause as provided in the act and regulations in accordance with the pro-cedures provided by the'act and regulations.
(emphasis supplied)
The Cormission regulations, enacted pursuant to the Atemic Energy Act, require that a construction permit be modified, sus- ,
pended or revoked only for cause;27 they impose the burden of proof on the proponent of the order;28 they s'pecifically make this allocation of the burden of proof. applicable to proceeding to show cause,29 and even more specifically to proceedings to suspend or revoke a cons,truction permit.30 Thus, these regula-tions do not support the construction of Section 185 of the Atocic S2235 and 10 C.F.R. 550.54 (h) .
- 25. 42 U.S.C.
- 26. 42 U.S.C. S2236,
- 27. 10 C.F.R. S50.54 (e) .
- 28. 10 C.F.R. S2.732.
- 29. 10 C.F.R. S2.700.
3 0.. 10 C.F.R. 52.1. .
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Energy Act that the Appeal noard set forth in AI.An-283; i.e., that Congress intended to impose the burden of proof on the opponent of an order to suspend or revoke a construction pcrnit.
It is true that in both Stearns Electric Paste Co. v.
Environrental Protection Acency, 461 F.2d 293, (7th ,Cir . , 19 7 2 ?
and Environmental Defense Fund, Inc. v. Ruckelshaus, 439 F.2d 584 (D.C. Cir. , 1971) the Court concluded'that under 7 U.S.C.
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S135(b) the applicant for the registration of an economic poiscn had the burden of proving his comp'iance with the Federal In-secticide, Fungicide and F.cdenticide Act (FIFRA) in the event .
that the Administrator served notice of his intent to cancel the registration. In both of.the cases the Court reached that cen-clusion only after a review of the iegislative history of certain amendments to PIFRA which were enacted by Congress in 1964.
. Citing Rep. Sullivan's comments that the purpose of these arend-ments was to " place (s] the burden of proof on industry" and that "the burden of proof of safety-should always be on the manufacturer" , the Court concluded that proceedings conducted ,
pursuant to FIFRA fell under the "except as otherwise provided by statute" qualification of 5556 (d) of the APA. As a re'sult, the Court imposed the burden of proving the safety of his product on the manufacturcr rather than the Administrator. Powever, in-sofar as the legislative history and the language of the Atcmic' 31._ 7 U.S.C. SS135-135k.
- 32. 110 Cong. Rec. 2948-2949. .
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Encrgy Act are concerned, chere is no indication that congress intendcc. to impose the burden of proof on the holder of a con-struction permit in a show cause proceeding initiated by the Commission. Indeed, as is shown in the preceding paragraphs, the Atomic Energy Act, its icgislative history and the regula-tions implementing it all indicate that the burden of proof rests with the propenant of the show cause order.
In its decision, the Appeal D. card also suggests that its allocaticn of the burden of proof would be different if the shew cause proceeding involved a licence to operate a nuclear facility rather than a license to construct a nucicar facility. Ecuever, ,
neither Section 186 of the Atomic E'nergy Act, which incorporaten by reference the allocation of the burden of proof contained in the APA, nor the Cce. mission's reguiation relating to the allocation of the burden of proof suggest that a different standard is applicable to the suspension or revocation of an
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operating license. On the contrary, 10 C.F.R. S2.700 speci-fically states that the general rules contained in 10 C.F.R. Part 2 Subpart G (including 10 C.F.R. 52.732) " govern pr'ocedure in all adjudications initiated by the issuance of an order to show cause". (emphasis supplied) Similarly, 10 C.F.R. S2.1 states that "[t]his part (including 10 C.F.R. S2.732) governs the conduct of all proceedings under the Atomic Energy Act of 1954, as
- 33. 10 C.F.R. 52.732.
s (13) amended, for (a) granting, suspendin'g, revoking, amending, or taking other action with respect to any license, authori=ation, construction permit ...", 10 C.F.R. S2.2 states that: " [ s'] ubpa r t G (including 10 C.F.R. S2.732) sets forth general rules applicable to all types of proceedings except rule making, and should be read in conjunction with the subpart governing a particular pro-ceeding."
In spite of these regulations, the. Appeal Board's decision
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would require a licensee, if he happens to hold a construction permit, to prove by competent evidence that he is constructing hi's facility'in accordance with the Atomic Fnergy Act, the rules and regulations of the Commission and'the requirements of his license prior to the time the proponent of the order had es-tablished a prima facie case that a violatien had occurred. If, on the other hand, the licensee is the holder of an operating license, the Appeal Board decision would not require him to prove compliance with the Atomic Energy Act, the rules and regulations and the conditions of his license until after the proponent of an order revoking, modifying or suspending his license, had es-tablished a prima facie case that the violation occurred.34
- 34. It should be noted that the issuance of a show cause order containing factual allegations does not constitute a prima facie case sufficient to bear the burden of proof if the licensee has filed an answer to that order. cf.
In.the Matter of Mistrot M. Sullivan, D/n/A Southwestern Radioloaical Service Co., 2 AEC 1 (1962). l e
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In view of the more irmediato potential for harm that r'ay arise frca the violaticn of an operating license as opposed to a construction permit, the above result cannet be justified on the grounds of public health and saf'ety. That the holder of a construction permit is recuired to comply with the gccmissicn's regulations provides no basis for distinction since the holder of'an operating license is equally bound by the regulations.
Nothing in the Atomic Energy h.ct, the APA or the Commission's regulations suggests that the burden of prcof in a show cause hearing might be dependent on the nature of a license held by ,
the licensee. Nor does there appear to be any sound policy reason why'a holder of a. license to construct a nuclear facility should be required to disprove unsubstantiated allegations, while an operating licensee need only rebut suostantiated charges.
. Even at a construction or operating license hearing, where the. applicant admittedly has the ultimate burden of proving his compliance with the Atomic Energy Act and the Cormission's regulations, any party contending that there is a specific reason why the granting of the license would not be in conformity with the provisions of the Act has the. burden of showing at le'ast a prima facio case for such contentions. This ruling has been
- 35. Power Peactor rev. Co. v. International tinion of Plec. ,
Ranio & Macnine Ucrr.crs, 367 I.' . S . - 3 9 6 , 411 (1961); anc Consumer Pover Co. (Cidland Plant, Units 1 and 2), ALAB-123, RAl-73-5, 331 at 345.
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I extended to cover the situation where,,as here, a party attempt:
to have a licensing board impose specific affirmative conditionc on a license.36 g.Thile these decisions we're issued in the conte::t of construction and operating license proceedings, their under-lying rationale in equally applicable to a show cause proceeding where one party is seeking to modify, suspend or revoke a pre-viously granted license.
The Appeal Ecard has distinguished several cases cited by the hearing bo.:rd to support the decision belcw that the burden of proof should properly be on the proponent of an order to revoke or suspend a construction permit, on the grounds-that the cited c,ases were decided under different statutes administered by other agencies, and which turned on economic rather than public health and safety considerations. It is certainly appropriate for an
- 36. Maine Yankee Atomic Power Co. (Maine Yankee Atomic Power Station) ALAB-161,.RAI-73-11,.1003 at p. 1018,
- 37. The Appeal Board, in ALAB-283, appears to accept the general proposition that the proponent of a show cause order has the burden of proof under both the APA and the' Atomic Energy Act. As a result, Consumers has not atterpted in this petition to address that question. However, the legal authority supporting that proposition is set forth in the Motion of Consumers Power Company to Irpose the Burden of Proof on the Proponent of an Order Suspending, Revoking or Otherwise Modifying Construction Permit Mos.
81 and 82 filed June 10, 1974.
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(16) agency. entrusted with the protection ,of the public health and safety to apply more rigid standards in enforcing its rec /1ations than might be applied by an agency enforcing purely econcric regulations. It does not folicw, hoeever, that this factor alene justifies shifting the burden of proving a negative to the hcider of a construction permit. The allegations against the t:cw Ycrk Shipbuilding Corporation in the order to show cause in New Ycrk 8
Shipbuilders, also raised issues of public health and safety.
The hearing e::aminor therein was fully cognizant of his respcn-sibilities in that area. Nonetheless, pursuant to the 7.tomic ,
Energy Act, the APA and the Commissicn's regulatiens, he imposed the burden of proving the alleged violations on the Commission's staff as proponents of the order.. As all of the regulations enforced by the' Commission are endowed with considerations of public health and safety, 10 C.F.R. S2.732 would be meaningle'ss if the Appeal Board's distinction were consistently followed.
A nore appropriate ceans of adequately providing for the public health and safety would be to set a high burden of persuasion -
on the opponent of an order to revoke or suspend a construction permit once the proponent of the order has shown a prima facie case.39 j
- 38. In the Matter of Few York Shipbuildina, 1 AEC 707 (1961).
- 39. See Vircinia Electric and Pcver concany (North Anna Power Station, Units 1, 2, 3 and 4) ALA11-2 5 6 , MRC-75/1, 10 at l
- p. 17, fn. 18. j d
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CONCLUSION Based on the foregoing, Consumers respectfully recuects that the Appeal Board take the following action:
(1) Reconsider its decision in ALAD-283 on the allocation of the burden of proof in a show cause proceeding .#avolving a license to construct.a nuc1 car facility and impose that burden on the proponent of an order to modify, suspend or revoke such a license; and (2) Certify to the Ce=.ission, the major questions of law and policy which are inherent in its decision allocating -the burden of proof in a show cause pro-ceeding according to the type of licence under review.
Respectfully submitted, Dated: August 12, 1975 [ ,. / h /../N#
Michael I. Miller-F/YyWW
'R. Rex Renfrow, III
! Isham, Lincoln & Beale Attorneys for Consumers Power Ccepany One First National Plaza Suite 4200 Chicago, Illinois 60603 (312) 786-7500 e
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. K s :
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION if In the Matter of )
) Construction Permits CONSUMERS POWER COMPANY )
) Nos. 81 and 82 (Midland Plant, Units 1 ) #I "\
and 2) ) 8 -
' s;z p *0'EIf [\
NOTICE OF FILING AND l{ AUG1gg73y --l I' -
PROOF OF SERVICE pd cw.c. c' ** yl,73' !~
c=""i.%,... ,'/
% .p' TO: Mr. Richard S,. Salzman . i;u Chairman
. Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory Ccamission Washington, D. C. 20545 Mr. Mich'ael C. Farrar '
Member Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory Comnission Washington, D. C. 20545 Dr. Lawrence R. Quarles Member Atomic Safety and Licensing Appeal Board U.S. Nuclear Regulatory Ccmmission Washington, D. C. 20545 Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory Commission Washington, D. C. 20545
. Docketing and Service Section Office of the Secretary of the Commission U.S. Nuclear Regulatory Commission j; Washington, D. C. 20545'
'fg Mr. James P. Murray, Jr.
Chief Rulemaking & Enforcenent Counsel U.S. Nuclear Regulatory Commission l Washington, D. C. 20545 l
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JohnG.Gleeson,bsq.
3y .The Dow Chemical Company 2030 Dow Center Midland, Michigan 48640 Laurence M. Scoville , Jr. , Esq.-
Clark, Klein, Winter, Par'ons s
& Prewitt 1600'First Federal Building 1001 Woodward Avenue Detroit, Michigan 48226 PLEASE TAKE NOTICE that I have this day filed with the Nuclear Regulatory Commission the Petition of Consumers Power Company For Reconsideration'of ALAB-283 Or For Certi-fication to the Commission, a copy of which is hereto attached '
and herewith served on you.
/ ,/
n b l R. Rex Epfrow, III One of the Attorneys for Con-sumers Power Company DATED: August 12, 1975 ISHAM, LINCOLN & BEALE One First National Plaza Suite 4200
- Chicago, Illinois 60603 '
(312) 786-7500 0
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