ML19329C458
| ML19329C458 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 09/12/1975 |
| From: | Charnoff G, Reynolds W CLEVELAND ELECTRIC ILLUMINATING CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, TOLEDO EDISON CO. |
| To: | NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP) |
| References | |
| NUDOCS 8002140837 | |
| Download: ML19329C458 (51) | |
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2 the Appeal Scard cn August 12, 1975 The appeal concerns questicn; relating to the Licensing Board's reference to a Special :' aster, lith the consent of all parties hereto, oic u y ,. c..- d _i oo c o ". a ".", + ..", n_ _".".U. .q ."u ' ^ r. a- .
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client and actorney-t:crh product priv11er e asserted 'cy two of the five Applicants involved in this proceeding, na:r.e ly ,
The Cleve]and Electric Illuminating Ccmpany ("CEI") and Duquesne Light Company ("DL"), and by the Department of Justice ("DCJ").
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BACKGROUND STATEMENT The privileged document controversy has been one of the most time-consuming aspects of the prehearing discovery process in this antitrust proceeding. In ac-cordance with the Licensing Board's Order on Objections to Interrogatories and Document Requests, issued approxi-mately ont year ago cn October 15, 1974, CEI, DL and DOJ asserted timely claims of privilege with respect to certain dccunents which they believed were entitled to protection 1/ The claims by CEI -- which are, in part, from disclosure.1 being challenged by the City of Cleveland (" City") on this appeal -- were ultimately made with respect to some 735 documents (approximately 35 of CEI's total document pro-duction); these claims rested on both the attorney-client and the attorney-work product privilege.2/
On December 6, 1974, the then Chairman of the Li-censing Board, John B. Farmakides, initiated a conference 1/ The other three Applicants, the Intervenors and the NRC Staff either claimed no documents as privileged, or, in the case of The Toledo Edison Company, made an initial privilege claim.with respect to a handful of documents, but then subsequently withdrew it and produced the material.
2/ DL initially claimed protection as to 5 documents, and later added 6 more documents, all of which were said to be within the attorney-client privilege. The claims of DOJ originally dealt with 14 documents; however, by partial waiver of its claims in a letter dated April 1, 1975, a copy of which is on file with the Licensing Board, D0J re-duced this number to 11 documents, or parts thereof, being withheld from disclosure as attorney-client confidential communications and as attorneys' work product material.
telephone call involving counsel for all parties to dis-cuss how best to handle the privilege claims. It was agreed in that phone call that the matter should be re-ferred to a Special baster who would undertake an in camera examination of the dccuments and rule on the assertions of privilege. In a subsequent Order, issued on December 10, 1974, the Licensing Board appointed 'iarshall E. Miller, a lawyer and full-time member of the Atomic Safety and Li-censing Board Panel, as Special Master 2nd directed him "to determine wi2 ether or not such a claim of privilcge is sustained" and to make a report to the Licensing Board "as to the reasons and disposition therefor." The Order clearly stated that referral of the privilege claims:
- N is accomplished with the express acreement of the rarties to be bound by the determinations of the Master. This was discussed and agreed upon during a telephone conference call on December 6, 1974 with the Chairman of the Board.
[ Emphasis added.]
No party objected to the December 10, 1974 Order, eitlier with respect to the I,1 censing Board's authority to mal:e such an appointment or with respect to the Board's statement of the agreement reached among counsel regarding the binding effect of the Master's rulings.
On March 14, 1975, DCJ served upon CEI an exten-sive set of interrogatories relating to CEI's privilege o
-4 claims.3/ No such interrogatories were ever formulated by the City or the NF.C Staff. Pursuant to agreement by counsel, the DOJ interrogatories were answered in two seg-ments, on April 15 ar.d 18,1975, and copies cf CEI's re-sponses, together with the 735 documents referenced therein, were simultaneously celivered to the Special Master. DCJ's objections to the answers were thereafter resolved by written correspondence among counsel dated April 23 and May 5, 1975, copies of which were also furnished to the Special Master.
Pursuant to a prearranged schedule, all parties filed with the Special Master en April 25, 1975 extensive briefs discussing the legal principles applicable to a resolution of the privilege claims. Reply briefs were sub-mitted on May 2, 1975 Thereafter, by leave of the Li-censing Board, CEI submitted an affidavit prepared by its then Corporate Solicitor, Donald H. Hauser, clarifying j certain aspects of the earlier interrogatory responses I
("Hauser Affidavit"). Over objections by DOJ, the NRC
, Staff and the City, the Special Master was instructed by the Board to receive the Hauser Affidavit but not to accept as fact, on the basis of the affidavit alone, the conclusory 3/ Similar interrogatories were served by DCJ upon DL
, and answers thereto were timely filed. This appeal does not involve any challenge to DL's privilege claims, except j in the broadest cence of the Master's authority to issue a binding ruling thereon, which is discussed infra.
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assertions therein "as to whether individuals [ referenced in any of CEI's submitted documents] were members of the
[' corporate] ' control group' or were acting pursuant to l
direction of counsel." /
Due to the fr.ct that Mr. Miller. had, since his assignment herein, been appointed to two licensing boards involved in antitrust proceedings, it became necessary to relieve him of his responsibilities as Special Master. On May 2, 1975, the Licensing Board designated Frederic J.
Coufal, also a lawyer who is a full-time member of the Atomic Safety and Licensing Board Panel, "to assume the duties of Special Master." Order of the Board Designating Change in Special Master to Review Claims of Privilege, dated May 2, 1975 The new Special Master concleted his in camera review of the largest portion of the documents before him --
i.e., those submitted by CEI -- and issued his initial Report as to their privileged status on June 9, 1975.2/ Ee deter-mined that 573 of the CEI documents were entitled to pro-4/ Memorandum and Crder of the Board with Respect To Special Master's Receipt of Affidavit by Donald Hauser of May 22, 1975 Relating to Privileged Documents, dated June 3, 1975 (pp.3 4). See also Ruling of the Ecard 'dith Respect To Motion of City of Cleveland to Strike or Reply to Affi-davit of Donald H. Hauser, dated June 11, 1975 Thereafter, on July 3, 1975, two separate Reports 5/ issued were by the Special Master dealing with the privilege claims asserted by DL and DOJ, respectively. These two Reports were not challenced.
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tection from disclosure; another 162 of said documents were found to be non-privileged material which slauld be produced.6/
In a conference telephone call initiated by the present Chairman of the Licensing Board, Douglas V. Rigler, on June 24, 1975, the City and D0J objected to the Special Master's Report and indicated that they intended to seek review of the decision. Upon being reminded by the Appli-cants of the parties' prior agreement "to be bound" by the Master's ruling, as embodied in the Licensing Board's Order of December 10, 1971', a request was made and granted to have the matter returned to the Special Master for reconsider-ation. Additional briefs were then filed in support of the various objectiors to the Master's initial Report and, on June 30, 1975, the Special Master heard oral argument. He thereafter modified his original Report by reversing himself as to 5 documents.7/
Applicants, adhering to their agreement "to be bound" by the Special Master's decision, prcmptly delivered to the 6/ An additional 13 documents, which the Special Master had been unable to locate in the submitted material but which were subrequently delivered to him, were treated in a later Report dated July 29, 1975 Eleven of the 13 documents were considered privileged; the two others were to be produced as non-privileged.
7/ One document which had originally been accorded priv-ileged status was, on reconsideration, found to be subject to production. Four documents which had been ordered for l production were, on reconsideration, found to be privileged.
See Transcript of June 30, 1975 Hearing Before Special Master, at pp. 81-86.
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l Central Document Depository for inspection and copying the mat bial which the Special Master determined to be non-privileged. Thereafter, both the City and DOJ re-quested that the Licensing Board certify to the Atomic Safety and Licensing Appeal Board the rulings of the Specialklastersustainingaprivilege. These requests for certification were denied on July 21, 1975 and August 27, 1975, respectively.S/ The City noticed the present appeal on July 28, 1975 I STATEMENT OF ISSUES The issues raised on this appeal, as expanded sua sponte by the Appeal Board, are set forth in the Appeal Board'3 ' Order of August 14, 1975, to wit:
- 1. Whether the Appeal Board should direct cer-tification of the question of the validity of the role played by the Special Master in this proceeding.
I, 2. Whether that role was valid.
l 3 Assuming that role was not valid, whether the Appeal' Board should remand the matter to the Licensing Board with instructions to treat the Special Master's rulings as recommendations or reports and to entertain objections thereto.
j[/ See Ruling or The Board With Respect To The City of Cleveland's Motion For Certification Of Special Master's Decision On Claims of Privilege, dated July 21, 1975 and Rt. ling of The Board On Request For Certification By The De-partment of Justice Of An Appeal Of The Special Master's Findings Of Privilege, dated August 27, 1975 "M - - -
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' s II . Assuming that role was valid, whether the Appeal Board ought to direct certification of the merits of the Special Master's rulings.
5 If certification of the merits of the Special Master's rulings is appropriate, whether those rulings are correct.
ARGUMENT I
THE APPEAL E0ARD SHOULD NOT DIRECT THAT THE QUESTION OF THE VALIDITY OF THE SrZo!AL MASTER'S ROLE SE CERTIFIED FOR APPEAL E0ARD REVIEW The certification question raicad by the Appeal Board on its own motion -- as distinguished from the separate certification question to which a fleeting reference is made in the City's appeal brief (see discussion infra at pp. 28-37) --
l focuses in the first instance on the procedural aspects of the consensual referral below of all privilege claims to a f Special Master for a binding decision. Wi .in this frame- I work, the threshold consideration is whether Section 2.718(1) of the Commission's Rules of Practice should be in' toked in the present circumstances to precipitate immediate appellate review of the particular reference procedure agreed upon by the parties.
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Section 2.71B(1) provides for certification to the Appeal Board of Li:ensing Board de~cisions either (a) at the direction of the presiding officer of the Licensing Board, or (b) at the direction of the Appeal Board itself under the authority delegated to it pursuant to Section 2.785(b)(1) of the Conaission's Rules. The latter pro-cedure is our immediata concern here. To our knowledge, the Appeal Board has not heretofore exercised its certifi-cation prarogative under Section 2.713(1) in the absence of a specific request that it do so by a complaining party.
See Public Service Co. of New Hamnahire (Seabrook Station, Unita 1 and 2), ALAB-271, MRCI-75/5, 478, 481 (May 21, 1975).
But compare irl, at nn. 9 and 10, concerning Section 2.718(1) review by the Commicsion itself.
In the present situation, no such certification request has been made with respect to the question whether the Licensing Board acted properly in referring, with the !
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consent of all parties, the privilege claims to a Special ;
Master for a binding decision. Indeed, the City states un-equivocally in its appeal brief that it "does not herein question whether the presiding officer has the authority to delegate his responsibility to a Special Ma"ter * * *"
(p. 9 n'. 10). It acknowledges that the reference was pur-suant to an " agreement of all parties, which included [the l l
City of] Cleveland" (ibid.); that said agreement contemplated "that there was to be no review by the [ Licensing] Board of l 1
I the Special Manter's decision" (p. 17); and that it was "prec* coly revleu by the Board that the parties sought to avoid" by stipulating to the referral procedure in order "to isolate the Board from the cccuments" (p. 23).
We alert the Appeal Board to the City's position on this point, not to suggest that a direction by the Appeal Ecard under Section 2.718(1) for certification of this particular issue cannot be made in the circumstances (1 2., where there is no request therefor), but rather to highlight applicants' view that the Appeal Board should r. o t take auch action here. In this regard, we note the obser-vation of the Appeal Ecard in Public Service Co. of "ew Hampchire, suora URCI-75/5 at p. h32-483:
Unlike an appeal, a request for a Section 2.718(1) certification does not invoke our j urisdiction as a tatter of right but, instead, seeks simply the exercise by un of a discretionary power.
Obviously, that discretion is not unbridled. Ac the Appeal Board sta.ad in Public Service Co. of .'!ew Hampshire (id. at 483):
We believe, then, that al the very minimum, a party asking that we invoke our Section 2.713(i) certi-fication authority must establish that a referral would have been I proper; i.e., that failing a cer-tification, the public interent till cuffer or unusual delay or expence I will be encountered (emphasis added). I 1
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Significantly, in the present proceeding tnere has been no suggestion by any party that the Special Master re-ferral procedure has, in and of itself, had an adverse impact on the public interest or resulted in unusual delay or expense. To the contrary, the procedure was agreed upon to accommodate the parties' desire for a thorough in camera review of the privilege claims within the pre-scribed discovery period and without comprcaising the in-tegrity of the Licensing Board. It was embodied in an interlocutory order on December 10, 1974, which, to this day, has not been challenged -- either as being contrary to the public interest or as being otherwise invalid.
In these circumstances, the Appeal Board should, we believe, be even more guarded in exercising its dis-cretionary power under Section 2.718(1) than might be the case where a questionable procedure has actually been challenged. In analogous situations, the Appeal Board has been disinclined to review procedural rulings by the Li-censing Board which have been accepted by the parties without objection. See, e.g., Commonwealth Edisen Co.
(Zion Station, Units 1 & 2), ALAB-116, RAI-73-4, 258 (April 17, 1973) (failure to object to Licensing Board ruling on motion to quash subpoena); Northern Indiana Public Service Co. (Bailey Generating Station, Nuclear 1),
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ALAB-222, RAI-74-8, 229, 240 (August 6, 1974) (failure to object to Licensing Board's use of quorum rule). Similarly, the weight of judicial authority supports the proposition that appellate review of the appointment of a Special Master is unavailable where no timely objection has been made i
thereto. See De Costa v Columbia Broadcastine System, Inc.,
F.2d ,
No. 73-1391 (1st Cir., June 24, 1975); Avery Products Corn. v Morgan Adhesives Co., 496 F.2d 254, 256 (7th Cir. 1974); First Iowa Hydro Electric Coco. v Iowa-Illinois Gas & Electric Co., 245 F.2d 613 (8th Cir.),
certiorari denied 355 U.S. 871 (1955); Hart v Williams, 202 F.2d 190 (D.C. Cir. 1952); Allen Bradley Co. v Local No. 3, I.B. of E.W., 51 F. Supp. 36, 40 (3.D.N.Y.), reversed on other grounds, 145 F.2d 215 (2d Cir.), which was reversed on other grounds, 325 U.S. 797 (1943). But see Incram v Richardson, 471 F.2d 1268, 1270 (6th Cir. 1972).
Such a response seems particularly appropriate here, especially when weighed against the disruption that would likel;/ follcw if the agreed referral procedure utilised by the Licensing Beard were now to be set aside. In such event, the lengthy review process conducted below by the Special Master in camera, would have.to be undertaken all over again by the Licensing Board, essentially on a document-1 by-document basis. This would inevitably result in " unusual l
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delay," which could not help but postpone the ccmmencement of the hearing, currently set for October 30, 1975 Com-pletion of the antitrust inquiry by the time the Davic-Besse
- No. 1 unit is schedultd for fuel-1]ading (second quarter of 1976), or by the time maj or construction of Perry Units Nos.
1& 2 is presently anticipated to begin (March, 1976 if application for L.W. E is granted) -- which is, of course, a major "public interest" consideration in these consolidated proccadinga -- would become a highly questionable matter.
This is precisely the prospect that Congress feared moct in prescribing antitrust review under Section 105c of the Atomic Energy Act, and a possible result that Applicants have strived so hard in this proceeding to head off.
When certification is so perceived, ue submit that there is ample reason why the Appeal Board should not exercise its discretionary power under Section 2.718(1) to review the agreed referral procedure providing for resolution of the privilege claims by a Special Master. Not.insignificantly, the Licensing Board has made it plain that it does not con-sider the issue worthy of certification.9/ And, as the Appeal i Board specifically noted in Public Service Co. of New Hamo-shire, supra, NRCI-75/5 at 483, "there is even greater cause to be chary about reaching down for an issue * *
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9/ See Ruling of the Board On Request For Certification By The Department of Justice Of An Appeal Of The Special Master's Findings of Privilege, dated August 27, 1975 1 l
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the Licensing Board has affirmatively declined upon request to refer that issue."
Moreovec, Commission policy does not " favor the singling out of an issue for appellate examination during the continued pendency of the trial proceeding in which To be sure, inter-that issue came to the fore" (ibid.).
locutory review by the Appeal Board has occurred in " extra-ordinary circumstances" where there has obviously been a plain procedural error that substantially affects a party's rights. See Boston Edison Co. (Pilgrim Nuclear Power Sta-tion, Unit 1), ALAB-231, RAI-73-lo 633, 633-634 (October 2, 1974). However, as explained in the next section of this brief, we do not believe that the reference question raised here by the Appeal Board fits that mold.
II THE ROLE OF THE SPECIAL MASTER IN THIS PROCEEDING SHOULD NOT BE DECLARED INVALID The Licensing Board, in its Ruling of August 27, 1975, has provided an excellent account of the basis for its appointment of a Special Master. As it explained (Ruling,
- p. 5), the regulatory authority for taking such action can That be found in Section 2.753 of the Commission's Rules.
section states that, in addition to entering into stipula-tions as to relevant facts:
The parties may also stipulate as to the procedure to be followed
in the proceeding. Such stip-ulations may, on motion of all parties, be recognised by the presiding officer to govern the conduct of the proceeding.
It is undisputed that the partiec here entered the very into such a procedural ctipulation, which at least contemplated in ctmera examination of submitted documents by a Special Master who was te make rulings on their privileged status, which rulings would be binding on the Licensing Board.20/ We do not believe that a con-1 sensual reference of this nature should be condemned under Chapter 0106, Section 034, of the AEC (NRC) Manual as an improper delegation of authority.
There is scant precedent in NRC proceedings to guide a consideration of the proper use of a Special Master to assist in discovery matters. In antitrust hearings, only four other proceedings have, to our knowledge, progressed 11/ In three of these, Alabama, to the discovery stage.--
Consumers and Waterford, the possible use of a Special Mas-In the other one, the Duke Power ter was not considered.
10/ The City's appeal relates only to the question whether the Special Master's rulings were reviewable by28-37 the Appea.1 Board. That issue is discussed infra at np.
Alabama Power 11/ These four antitrust proceedings are:
. Company (Joseph M. Parley Nuclear Plan:, Units 1 and 2), j Docaat Nos. 50-348A and SC-364A; Consumers Power Comoany (Midland Plant, Units 1 and 2), Docket Nos. 50-329A and 50-330L; Duke Power Comnany (McGuire Nuclear Station, Units 1 and 2, Docket Nos.
i and Oconce Nuclear Station, Units 1, 2 and 3), l 50-369A, 50-370A, 50-269A, 50-270A and 50-287A; Louisiana Power and Light Comnany (Waterford Steam Electric Generating Station, Units 3 and 4), Docket Nos. 50-382A and 50-333A.
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-16 antitruct inquiry, a Special Master was appointed, with the concent of all parties, to recolve claims of attorney-client and attorney-wcrk product privilege.
Such a referral procedure seems permissible for disccvery purpocec under the great weight of judicial authority. Thus, many trial courts, relying upon Rule 53 of the Federal Rules c f Civil Procedure,12/ have appointed Special Masters to supervise the discovery process, in-cluding making determinations with regard to claims of privilege. See, e.g., Fisher v Harris, Upham & Co., Inc.,
61 F.R.D. 447 (S.D.N.Y. 1973); Collins & Aikman Corp. v J. P. Stevens & Co., Inc.,51 F.R.D. 219, 221 (0.S.C. 1971);
Tirch Realty, Inc. v Paramount Pictures, Inc., 10 F.R.D.
201, 203 (D. Del. 1950); Pathe Laboratories, Inc. v DuPcnt Film Mfq. Co., 3 E.R.D. 11, 14 (S.D.M.Y. 1943); Stentor Elec. Mfc. Co. v Klaxon Co., 28 Fed. Supp. 665 (D. Del. 1939).
In other instances, the same referral precedure has been followed pursuant to the authority of the Federal 13 See Vickers Motors, Inc. v Wallford, Magistrates Act. "
12/ Rule 53, Fed. R. Civ. P., provides for the appointment of masters by federal district courts and specifies that the order of reference may specify or limit the powers and re-sponsibilities of the master in the particular case.
13/ The Federal Magistraten Act provides that district courts may establish rules purcuant to which U.S. Magistrates may be assigned di ;ies "not inconsistent with the Constitution and laws of the United States," including "cervice as a special
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master in an appropriate civil action, pursuant to the applicable provisions of this title [ Title 28, U.S. Code] and the Federal (Cont'd next page) l
502 F.2d 967 (6th Cir. 1974). And, the use of special masters to supervise discovery has also been sustained as a legitimate exercise of the court's inherent power to appoint a master fo." the administration of justice when the court deems such action essential. See First Iowa Hydro Electric Coop. v Iowa-Illinois Gas & Electric Co., supra; Schwimmer v United States, 232 F.2d 355 (8th Cir.), certiorari denied, 352 U.S. 833 (1956). See also Kaufman, Masters in the Federal Courts: Rule 53, 53 Col.
1 L. Rev. 452, 462 (1968).24/
These latter cases seem particularly relevant to the present situation. The Licensing Board, after con-cultation with the parties, was satisfi3d that all par-ticipants believed the administration of justice in one particular area of discovery, namely, the rulings an "priv-ileged" documents, could best be acccmplished by a Special Master. Indeed, the consensus was that such a referral would be fairer than if the matter were left to the Licensing Board, since the Board's examination of the material could
_1_3/ cont'd Rules of Civil Procedure for the United States District Courts" and " assistance to a district judge in the conduct of pretrial discovery proceedings in civil or criminal actions." 28 U.S.C.
5 63G(b).
14/ Other cases involve references to a Special Master for discovery purposes without any discussion as to the j uris-dictional basis for the reference. See Burlincton InO2stries~
v Exxon Corp., 65 F.R.D. 26 (D.'d. 1974) (determination c:
privilegeu documents); Shapiro y Freeman, 33 F.R.D. 308, 312 (S.D.N.Y. 1965); olson Transpcrt co. v secony-vacuum 011 co.,
7 F.R.D. 134, 136 (E.D. wise. 19Th) (materiality and relevancy of documents).
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. perhaps have the undesirabic effect of compromising the integrity of the ultimate trier of fact. As an accommoda-tion to the parties, therefore, the Licensing Board ac-copted the stipulated procedure pursuant to its authority under Section 2.753 or the Commission's Rules.
In this regard, we think that an analogy to the resolution of discovery matters by settlement discussions, as articulated by the Licensing Board in its Ruling of August 27, 1975 (Slip op. 6-7), is well tt2<en. Just as an agreement among adversaries regarding their disputes about interrogatory or document requests is entitled to enforce-ment without Board scrutiny into the legal correctness of negotiated concessions, so too is an agreement of the parties to a procedure requiring submission of a discovery matter to a Special Master for binding resolution.15/
As a prac-tical matter, such a referral procedure is akin to an agree-ment to submit a controversy to arbitration. The First Circuit recognised this similarity in its recent De Costa decision, supra, No. 74-1391, wherein it stated (Slip Op. at p. 8):
From a constitutional viewpoint, we can see no significant dif-ference between arbitration and consensual reference for decision lj Section 2.759 of the Commission's Rules encourages the cettlement of "particular issues in a proceeding" and the taking of appropriate steps to implement that purpose.
Although "particular issues" could be read a referring only
.to contested, substantive issues, it might also apply to procedural issues such as those involved herein.
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! by magistrates. In both situa-tions, the parties have freely, and knowlir:;;1y [p le ] agreed to waive their access to an Article
- III judge in the first instance.
l Or put another way, they have
', chosen another forum.
. While the Court of Appeals in De Costa ordered 1
l limited review of the Special Master's decision for "mani-
' fest error" of fact and law, notwithstanding that the parties had concented to the referral procedure, its de-cision was largely guided by the reference involved in that case, which
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- was not clear enough by its own ter.ms to support the conclusion tnat the parties con-sented to a grant of pcwer to the magistrate greater than that outlined in Rule 53, F 94. R. Civ.
Pro. [ Slip op. p. 14]i2/
By contrast, the consensual referral in the present proceeding was, as the Licensing Board stated (Ruling of August 27, 1975, at p. 8), " unequivocal and unambiguous."
The parties explicitly agreed "to be bound by the determi-nations of the Master" (Order of December 10, 1974). Not even the City disputes the fact that this reference was, at the very least, intended by all to insulate the " privileged" 16/ The De Costa referral agreement assigned to the Special Master all issues for " hearing and determination." In the Court of Appeals' opinion (Slip op. at p. 14), the Special Master's role was thus " fully compatible with [that of] the magistrate as trier of fact whose rulings on the facts are final under Rule 53(c)(4), but whose legal rulings have no binding force."
~ . - - - . - _ _ -
.A documents from Licensing Board review (see pp. 9-10, supra),
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and for very legitimate reasons.--
In these circumstances, it'is our belief that the role played by the Special Master in this proceeding should not be declared invalid. If the reference had in-volved ultimate questions of fact and law on the case in chief, the Licensing Board's use of a Special Master, even with the consent of all parties, could perhaps be con-18/ But where, as here, consensual referral sidered suspect.--
17/ As accurately set forth in the Licensing Board's Ruling of August 27, 1975 (pp. U-5; footnote omitted).
At the time referral of ' privileged' documents to a Special Master was proposed, the advantages acre conceived to be (1) an opportunity for prompt and independent revieu of a consider-able volume of documents, (2) the ,
assurance that members of the Eonrd would not be exposed to documents which ultimately were rejected from discovery through application of privilege, and (3) finality. All of these advantacca were evident to the parties at the time of the December 1974 agreement.
_1_3/ There appears to be some difference of opinion in judicial circles concerning the extent to which parties can co".sent to a referral to a Special Master of the entire case for a binding decision on both the facts and the law. Compare Allen Bradley Co. v Local No. 3. I.B. of E.W., sunra, 51 F. Supp, at 39 ("I consider that I am tholly withous power to nullify or to deprive either party of the effect of the stip-ulation or of the order") with Cademartori y Marine Midland Trust Co. of New York, 18 F.R.D. 277 (3.D.N.Y. 1955) (con-sensual referral to Special Master of entire case disapproved as inconsistent with the purposes of Rule 53, Fed. R. Civ. P.).
In De Costa, supra, which involved a consensual reference of the issues, the First Circuit observed in dictum (Slip op.
at p. 14): "5 *
- in the present state of. the law we would (Cont'd next page)
relates only to a narrow discovery question, the procedure agreed upon should be upheld. See Vickers Motors. Inc.
v Wallford, sunra. This is especially so when the parties' procedural stipulation has been entered into so as to insure (rather than conpromise) the integrity of the fact-finding process. The Licensing Board's adherence to an agreed procedure in such circumstances hardly can be con-sidered a clear abuse of discretion; nor, in view of the affirmative commitment to Special Master review by all par-ties, can it reasonably be argued that the referral process used here has intruded upon anyone's substantial rights.
Accordingly, there is, we submit, no legitimate reason to fault the Licensing Board's sensible approach to resolving the privilege claims or invalidate the procedure agreed upon as being an impermissible delegation of authority.
_1_8/ Cont'd be reluctant to approve even a clearly worded consensual reference to a magistrate which purports to finally bind the parties to his rulings of law." See also Rule 53(e)(4),
Fed. R. Civ. Pro.; and see SA Moore's Federal ?ractice 553.32[5]. Other federal court decisions expressing a similar reluctance have often based their conclusion, at least in part, on the Supreme Court decision in LaBur v Howes Leather Co., 352 U.S. 249 (1957). That case, however, has limited application to the present inquiry, since it not only involved the reference to a Special Master of the entire case (as distinguished from a narrow discovery ques-tion), but also involved a reference made by the trial court over the objections of all parties (i.e., a non-consensual referral).
l l
l
III EVEN IF TIIE SPECIAL I1 ASTER'S ROLE WAS INVALID, A REMA!ID TO TliE LICE!!SI:N BOARD WOULD SEEM INAPPROPRIATE; BUT IF ORDERED, SUCII A REMAND SHOULD AFFORD O!!LY LIMITED REVIEW Even if the Appeal Board disagrees with our con-clusions in the first two sections of this brief, we seri-ously question the appropriateness of remanding this matter to the Licensing Ecard with instructions that it entertain objections to the Special Master's Reports. There are, we believe, three fundamental considerations sustaining this position: (1) the parties' agreement; (2) the impact en the hearing schedule; and (3) the concept of fairness.
We have already discussed at length the nature of the procedural stipulation which is the subj ect of this appeal. Whatever other differences the parties may have regarding the proper interpretation of their agreement "to be bound," no one disputes that it was intended as a waiver of all rights to Licensing Board review of the privilege claims (see pp. 9-10 , supra). This considered agreement to forego such scrutiny of the Special Master's rulings --
whether ill-advised or not -- should, in our view . weigh heavily against the issuance now of a remand order to the Licensing Board.
Also not to be overlooked in this connection is the fact that, but for the parties' agreement regarding this
3
- matter, Licensing Board review of the Special Ma' ster's f
l Reports would undoubtedly have been completed by now with-i out any significant interruption to the hearing schedule.
l l A remand at this late date, however -- even if narrowly
?
4 confined (see discussion in fra , at pp. 25-27) -- would
! necessarily require a revision in that schedule in order t
} to acccrmadate the additional review function with regard to the privilege claims. As our earlier discussion points j
) out (pp . 12-13 , s up ra ) , a lengthy postponement of f
1i the hearing date will plainly jeopardice the chance --
already remote -- of completing this antitrust proceeding g
prior to the critical dates for ccamencing operation of Davis-Besse No. 1 on schedule and launching major construc-tion of Perry Mos. 1 and 2 on schedule.19/ -
Thus, there is a strong public-interest factor involved here which argues forcefully against a remar.d of this matter to the Licensing Board, especially in view of the fact that no party is l
l claiming that such a remand is necessary to protect its ,
1 I
private interests.
Indeed, as the Licensing Board accurately observed- !
l
' in its August 27, 1975 Ruling (pp. 7-8), when one evaluates l the parties' private interests in this context, there is yet another reason for rejecting the remand alternative in i
12/ Applicants tend to agree with the observation made ,
, by the City in its appeal brief (pp. 12-13) that the hearing l before the Licensing Board in this consolidated proceeding will be every bit as long as the Consumers hearing, if not longer.
the present circumstances. Applicants' claims of priv-ilege were denied by the Special Master with respect to some 162 documents. Notwithstanding their disagreement with these rulings -~ first registered with the Licensing Board in the conference telephone call of June 24, 1975 --
Applicants promptly produced the material in question pur-suant to their agreement "to be bound" by the Master's determinations, an agreement which the Licensing Board had earlier confirmed "the parties should be held to" (Minutes of June 24, 1975 confernce call, p. 6). As noted in the August 27 Ruling (p. 7; footnote cmitted):
Prior to turnover, [ Applicants]
indicated that they felt bound by the decision of the Master and that they were aware that their agreement to be bound re-linquished voluntarily any rights for further appeal.
In view of this document production, Applicants are now no longer in a position to contest the Special Master's decisions that were adverse to them; the arguably privileged material has already been fully disclosed. Fun-damental fairness would suggest in these circumstances that Licensing Board review of only the material still being withheld should not be allowed. Review of the Special Mas-ter's Reports, if available at all, should properly apply as the Licensing Board stated in its August 27 Ruling (p. 8),
l "to all challenged decisions of the Manter." To provide further review to certain parties in abregation of their express agreement to the contrary, after such revieu has been precluded for other parties who felt compelled to
~
adhere to that agreement as a matter of professional re-sponsibility, runs contrary to the most basic concepts of fairness and due process.
For the foregoing reasons, it is our opinion that a romand by the Appeal Board of thic matter as an exercise of its discretionary power under Section 2.718(1) of the Commission's Rules would be inappropriate -- even if it should conclude that the Special Master's role here was suspect. On the other hand, if (contrary to our view) the renand procedure is ultimately decced to be appropriate, we would urge the Appeal Board to confine Licensing Board review of the Special Master's Reports to the specific doc-uments challenged in the City's oojections to the rulings (see n. 23, infra), and, as to those documents, to permit review cf alleged errors of law only, but not allow any reevalt ition of the Special Macter's fact determinations.
Such an approach is not without authoritative support. Under Rule 53(c)(4) of the Federal Rules, fact de-terminations of a Special Master, at least when the parties 20/
agree that they shall be binding, are usually not reviewable.--
20/ Where there la no stipulation regarding the binding effect of a Special Macter's fact findings,.cuch determinations (Cont'd next page)
-2G-As the Rule succinctly states:
The effect of a master's re-port is the same whether or not the parties have consented to the reference; but when the parties stipulate that a master's findings of fact shall be final, only. questions of law arising upon the report shall thereafter be considered.
Interestingly, Rule 53 does not address the situation where the parties st$pulate to be bound by the Special Master's rulings of law, as well as to his fact de-terminations -- which is, of course, what occurred in the It is fairly well established that, present proceeding.
in the absence of such a stipulation, conclusions of law by a Special Master are generally not entitled to a par-ticular deference except as they are correct propositions of Canton, Ltd.,
of Jaw. Carpenter v Union Insurance Society 284 F.2d 255, 159 (4th Cir. 1960); United States v Inter-national Business Machines Corp. 66 F.R.D. 154, 159 (S.D.N.Y.
1974); Clark v Atlanta ?!ewspacers , Inc., 366 F. Supp. 886, 890 (N.D. Ga. 1973); McGraw Edison Co. v Central Transformer Co., 196 F. Supp. 664, 667 (E.D. Ark. 1961), affirmed, 308 F.2d 70 (8th Cir. 1962). Moreover, at least one federal appellate court (the First Circuit) seems inclined to reach 20/ Cons'd EFc subject to review by the trial court under the " clearly P.
erroneous" review standard. Rule 53(e)(2), Fed.'R. Civ.
This standard obviously has no application in the present cir-cumstances, however, since the parties agreed "to be bound" by all determinations of the Special Master, both fact and law.
i
w a similar result - at least where the whole case has been accigned to the Special 1: aster -- even where there has been a consensual reference which acntemplates that See the Special Master's rulings of law will be bincing.
De Costa v Columbia Brotdca.itine, Syster.s. Inc., suora, flo . 74-1391 (Slip op, at p. 13).
We have, of course, already explained why we believe that the aforesaid judicial precedents tending to support review of a Special Master's decisions of law, notwithstanding a consensual referral to the contrary, should have no real application in the discovery context presented here (see pp. 19-21, supra). However, in the event that the Appeal Board should decide to remand this matter to the Licensing Ecard, it is our view that this authority does offer sopropriate guidelines for defining the scope of review, if such review is indeed warranted. And for this reason, we urge that, if a remand order is forthccming, it be formulated within the narrow confines outlined above.
9
IV i THE APPEAL BOARD SHOULD NOT DIRECT THAT i THE HERITS OF THE SPECIAL IIASTER'S i RULINGS BE CERTIFIED FOR APPEAL BOARD REVIEW Turnin6 nexa to the separate certification ques-tion mentioned briefly in the City's appeal brief (p. 11),
Applicants believe that it would be inappropriate in the present circumstances for the Appeal Board to direct, under Section 2.718(1} of the Commission's Rules, that objections on the merits of the Special Master's rulings be certified to it for review. In addressing this issue, we presume that the interlocutory nature of the Special Master's de-terminations is already established to the satisfaction of the Appeal Board in light of its announcement of the unavailability at this time under 10 C.F.R. $2.730(f) of ,
a review of the merits by way of an appeal (Appeal Board Order of August 14, 1975, n. 3).
! Recognising that the operation of Section 2.718(1)
I depends in this context upon ar exercisc by the Appeal Board of its " discretionary power" (Public Service Co. of New Hamp-shire, supra, NRC -75/5 at 483), the inquiry once again (see pp. 9-10, supra) is, "at the very minimum," whether "the public interest will suffer or unusual delay or expense will be encountered" if the Appeal Board, in its discretion,
. +
. should decline to direct certification of the merits of the Special Master's rulings. Public Service Co. of Neu Hamoshire, supra. A negative response to this question in terms of Section 2.718(1) review would, we submit, similarly dispose of the City's request (City's Brief,
- p. 10) that the Appeal Board review, as a separate matter, For, the the Licensing Board's denial of certification.
same standard applies in connection with the question of the availability of interlocutory review of a referral de-21/
termination by the Licensing Board. Ibid. -
Focusing first on the "public interest" evalua-tion, it is important to assess that element of the present inquiry in a prcper context. As we have expressed in earlier ;ctions of this brief, a maj or concern from a "public interest" standpoint is that this antitruct pro- ,
ceeding not be prolonged unduly so as to result in an un-necessary delay in the operation of Davis-Besse No. 1 or ,
'dith energy needs i the construction of Perry Nos. 1 and 2.
today being so acute, it would decidedly be inconsistent with the public interest, and the interests of all private participants in this proceeding, if, for example, the 1
21/ The Appeal Board stated in Public Service Co. of New Hamisihire, sunra, '!FCI-75/5 at 483 that "at the very minimum, a party asking that we invoke our Section 2.718(1) certifi-cation authority must establish that a referral would have been proper i M * ".
It also made clear in the same opinion, that review of "the refusal of & licensing board to refer an interlocutory ruling" would not be available by way of an appeal in view of the prohibition in Section 2.730(f). Id.
at 481, n. 8.
1
Davis-Besse plant, which has already been built but is involved here by virtue of the " grandfather" clause in the statute (42 U.S.C. $2135c(8)), should have to sit idle for a period of t$me awaiting the conclusion of the 22/
' antitrust inquiry.--
It was, in part, the very real prospect of being faced with just such a situation that prcmpted an agreement among the parties to submit their " privileged" docuraents to the Special Master for a binding ruling. At the time, the antitrust proceeding was well over a year old; interrogatories and document requests had produced a mass of material -- in excess of some 2,378,000 document pages from Applicants' files alene - which still had to be in-spected and analysed; and a deposition discovery program, which all parties recognised would be extensive, had yet to be launched. In an effort to expedite the discovery pro-cess, as well as for other good reasons (see n. 17, supra),
the parties thus agreed "to be bound by the determinations of the Master" (Board Order of December 10, 1974). As the 22/ The safety and environmental reviews held in connec-tion with the Davis-Besse No. 1 application for an operating permit are ccmpleted and fuel-loading is presently scheduled to take place in the second quarter of 1976. However, Section 105c of the Atomic Energy Act (42 U.S.C. 52135e) plainly con-templates pre-licensing antitrust review, and the Commission has indicated that it is disinclined to issue a license prior to completion of an antitrust hearing in the absence of concent of all parties. See In the Matter of Louiriana ?cwer & Licht Company ('elaterford Steam Electric Generating Plant , Unit 3),
CLI 73-25, RAI-73-9-619, 622 (September 23, 1973).
2 Licensing Board accurately pointed out,-3/ in the circum-stance: the aCreement can only be read:
- *
- as an unequivocal waiver by all parties of possibic ap-peals in order to obtain the specific benefit of prompt and final review of the privileged documents. Since these parties repeatedly have impressed upon the Board their desire for ex-peditious resolution of the issues in these proceedinC3, the December 6 agreement is consistent with this cbjective.
We would submit that, in the face of such an explicit and unambiguous agreement not to seek review in this area, the Appeal Board should exe$cise its discretionary certification pcwer under Section 2.713(1) in a manner which is consistent with the stipulated reference. If any of the parties had truly harbored any notions of an interlocutory review of the Special Master's determinations, it should .
have alerted the Licensing Board -- and all other partici-pants who thought an agreement had been entered into fore-stalling such a possibility -- by disputing the December 10, 1974 Order in a timely fashion. Having failed to do so, it is difficult for us to see any legitimate justification now to ignore the express waiver of appeal ri$ hts. Plainly, there are no overriding public policy considerations under-23/ See Ruling of the Board With Respect to City of Cleve-land's Motion For Certification of Special Master's cecision On Claims of Privilege, dated July 21, 1975, at p. 6.
r mining such waivero. f>ce Jersey Contral Pouer & Light Co.
(Porhed River Nuclear Cencrating Station, Unit 1), ALAB-139, 6 AEC 535 (July 31, 1973).24/ -
In thic connection, it chould not be overlooked i
that, even now, the City places a construction on the agree-ment which reflectc thcir appreciation of the fact that the parties intended tc eliminate a piecemeal review of the Special Master'c rulings. In accordance with what the City now professes to be its understanding of the parties' agreement, immediate review by the Licensing Board was elim-1r7ted; but not ultimate review by the' Appeal Board. Even if we were able to tubscribe to this reformulation of the consensual reference -- uhich we believe is untenable -- it leavec no room for seeking interlocutory appellate review..
We cannot believe, in view of the clear prohibition in Section 2.730(f), that the City thought auch an avenue was open to it as a matter of course. Nor do we think that the clear termc of the agreement "to be bound," in the absence of some express qualification, leaves rocm for possible resort to the unucual review procedure preccribed in Section 2.718(1). Possible interruptions of thic sort in the hear-ing schedule were precicely what the parties sought to avoid, 23/ In ALAD-lig, the Licencing Board admitted coveral intervencrs to the proceeding, notwithstanding their untimely petition to intervene for the limited purpoce of precenting testimony and croca-examining witnocccc on a sjngle, cpecified incue and without any rightc of discovery or apneal. The Appeal Board held that the waiver of appeal rightc wac enforceable, implying that the appeal rightc were given up becauce the in-terveners aculd have been unable to chew good cauce for their untimely petition.
i l
, 1 l
l
consistent with the overriding "public interest" not to delay through lengthy antitrust proceedings bringing the nuclear plants on line as scheduled -- even assuming arguendo that the City understood the agreement as not eliminating altogether the possibility of eventually seeking review by the Appeal Board of the Special Master's rulings.
This "public interest" consideration is, of course, to be weighed against the "public interest" highlighted by the City in having a comprehensive NRC antitrust inquiry prior to issuance of any license. We do not discount the It is not likely to be importance of the latter objective.
compromised in any material respect, however, by the Appeal Board's refusal here to exercise its certification authority.
As peinted out by the Licensing Board in its July 21, 1975.
Ruling (pp. 8-9):
[The parties] have had the benefit of substantial disccrery which has resulted in the prsduction of tens of thousands of document pages.
They have had the benefit of a deposition program involving scores of potential ,titnesses. We con-clude that even if there .rere errors with respect to certain of the Master's classficationa, there is little likelihcod of any substantial ffect upcn the parties' preparation *
' for the hearings.23/
i 25/andWe note in passing that on September 5, 1975, the City, i
l DOJ the NRC Staff filed with the Licensing Board lengthy i
statements containing their allegations and outlining the nature of the evidence they intend to introduce.
I
The City's conclusory assertions to the contrary are unpersuasive. They rest largely upon cheer speculation as to the possible probative value of a handful of docu-monts which the Special Master, upon careful examination, has determined to be entitled to protection from disclosure (City Appeal Brief, pp. 19-20, 23-24). Such a focus is misdirected. Presumably, the speculative argument can always be made in this context that the material withheld is likely to be helpful to the development of the adversary's case. Confidential communications between attorney and client, and an attorney's work product, can, almost by definition,.be presumed to have some significant probative value; even so, strong policy considerations have long sus-tained the protection of such privileged material from disclosure. See S Wigmore, Evidence S2292, at p. 554 (McNaughcen Rev. Ed. 1961).
Thus, the City's conjectural argument provides an insufficient basis "to depart from the usual practice, recognised by this agency and the courts alike, of allowing a trial proceeding to run its course before entertaining I complaints on the appellate level." Public Service Co. of New Hamnshire, suora, NtCI 75/5, at 486. If the potential probative weight of the withheld material were determinative in this context, interlocutory "eview of a ruling sustaining I ~~_
l
l l
I claims of privilege would be commonplace. Thic, however, is clearly not the case. Indeed, in most instances, im-mediate review of a discovery order in this area ic afforded only where there has been a direction to produce documents over a claim of attorney-client privilege. Interlocutory review is then deemed nececonry to protect the canctity of the attorney-client relationship. See Pficer y Lord, ,
h56 F.2d 545 (Sth Cir. 1972); Harpor & Row Publishers, InSc v Decker, 423 F.2d 487 (7th Cir. 1970), affirmed by an equally divided court, 400 U. S. 384 (1971).
Here, by contrast, we are concerned with rel-atively feu documents which the Special Master is satisfied, both on the basis of his initial review and a reconsider-ation thereof, are entitled to privileged status. For the reasona set forth in the next section of this brief (see discussion infra, at pp. 38-46), we believe the Special Master's rulingc on the merits are correct. However, even in the unlikely event that they should be considered suc-pect, we agree with the Licensing Ecard's conclusion that the "public interect" in having a full and complete anti-trust inquiry will not suffer by proceeding to hearing without first obtaining prompt Appeal Board review of the questioned material. The macsive document production by Applicants, together with their comprehensive responses to r
_____. _ . _ . _ _.- . ~ .
several sets of extensive interrogstories, and their volu-minous deposition testimony involving the questioning of more than 40 uitnesses, provides ample assurance that the integrity of the hearing process will not be undermined by a refusal of the Appeal Scard to exercisc its certifi-cation authority here.
In terms of the "public interest" consideration, therefore, the balance leans heavily toward a denial of the City's request for a direction of certification. Nor has a convincing argument been made that an exercise by the Appeal Board of its Section 2.71S('.) authority is necessary to provent unusual delay or expense. The argument is made that without interlocutory review, there exists the prospect of a possible reversal when the issue ultimately comes before ae Appeal Board, "which would cause exceptional delay or expense in reaching a final decision on the issues presented" (City's Appeal Erief, p. 13).
We explain below (pp. 33-46, infra) why we feel that such a pros:ect is not very real. Even more to the point, however, is that this argument proves too much; it can be advanced as a reason for entertaining piecemeal review of every interlocutory ruling er discovery order in an extended NRC proceeding. Such a license for wholesale interruption of the hearing process would plainly undermine the general
policy of the Commission to view precipitous appellate action of this sort with disfavor. Commonwealth Edison Co. (Zion Station, Unita 1 and 2), ALAB-ll6, RAI-73 4, 258, 259 (April 7, 1973). It is to avoid just such a result that the applicable standard looks only to " unusual delay or expense" as a basis for the Appeal Board's ex-ercise of discretionary auuhority in this area. Public Service Co. of New Hampshi re , MRCI 75/5 at 483 (emphasis added).
The City has failed to satisfy this strict standard. Indeed, with the commencemen't of the antitrust hearing "almost at hand [, a] certification would * * * ,
if anything, cause rather than prevent delay" (id. at 486).
In these circumstances, there is every reason for the Appeal Board to stay its hand. Moreover, the fact that the Licensing Board reached just such a conclusion on the f basis of a careful and thoughtful analysis of the partic-ular factors involved here is, as we noted earlier, not without significance. See Public Service Co. of New Hanp-shire, supra, NRCI-75/5 at 483 I
- -~ .- _ . .
1
V THE RULINCO OF THE CPECIAL MACTER ON THE MERITS WERE CCRRECT On the basis of the prior discussion, we believe no legitimate purpose is to be served by arguing the merits of the Special Master's ruling before the Appeal Board at this time. Since the City's app'al brief addresses specific objections to the Mast 2r's Rep ;s, however, which, if left unanswered, tend to color the fundamental issues under con-cideration, we feel compelled to respond to the contentions set forth in Sectibns IV and V thereof.
The City first asserts that as to 110 documents, CEI advanced a claim of privilege -- either attorney-client or attorney-work product -- which differed from the privilege which the Special Master found to exist.26/ The argument made is that CEI's failure to specify the privilege which v/as deemed to be applicable by the Special Master constitutes a waiver of that privilege.
We have been unable to find any authority to support such a naiver concept. The so-called " numerous cases" cited by thc City to sustain this proposition consist only of Steen v [irst National Bank, 298 F.36 (8th Cir. 1924) and Hill v Hill, 106 Colo.492, 107 P.2d 597 (1940). Steen, how- ;
1 1
1 l
, :6/ For the record, we would simply point out that, coriFary to the City's listing in p. 27 of its brief, CEI diu in fact specifically identify documents 110, 2147 and 2151-2166 as atterneys-work product in the Hauser Affidavit or the interrogatory responses.
I 1
m
i over, involved a waiver of the attorney-client privileco due to the client's testimony at a preliminary hearing about his confidential conversations with counsel. Hill consisted of a waiver of the attorney-client privilege based upon the actual production of a document at a hearing for purposes of refreshing the client's memory. In both t
cases -- which are, so far as we can determine, consistent with the general state of the law in this area -- the result was based on the fact that the failure to assert the priv-ilege in timely fashion has resulted in public disclosure of the privileged communication.
Such is not the case here. Indeed, CEI has made it abundantly clear that it does not intend to waive any privilege in this proceeding. Its submission of the ques-tioned documents to the Special Master in confidence and solely for purposes of an in camera examination, together with its assertion of privilege with respect to all deposi-tion interrogation directed at the submitted material (City 1
Appeal Brief, Appendix), leaves no room for doubt in this I
regard.
l The controlling legal principle in such circum-1 stances was articulated in precise terms in United States 1
v Jacobs, 322 F. Supp. 1299, 1303 (c.D. cal. 1971):
A person does not waive the attorney-client privilege merely by failure to assert l
l
11 0 -
it. L'alver occurs only when the privileCed matter is dis-closed without accertion of the privilege. It is the disclosure of the privilem d matter *:hich gives rise to tha .! a l v e r , net the failure to accert he nriv '
ilege. For example, il the client testifies to the confi- .
dential communication or remains silent while the attorney tes-tifies, there is a wa.'.ver by the client's voluntary disclosure or by permitting the attorney to voluntarily disclose. Steen v First I!ational Danl:, 298 F 36 (8th Cir. 1924). Eut mere failure to assert the priv11ere without a disclocu"' 4o not a waiver.
If a w$tness refuses to testify on some oth?r nrcund, such as self-incriminatiar. anc that ground is held lirta lid , he: rm'I then assert the attorno7-client triv-ilege tho'!To he uid not assert it when first called to testify.
[ Emphasis acced.]
See also Tilletson v Boughner, 350 F.2d 663 (7th Cir.), re ,
versing 238 F. Supp. 621 (N."D. Ill. 1965).
1 Consistent with this principle, CEI can appropri- l ately assert even now -- and it specifically does so -- a I claim of attorney-work product privilege with respect to each of those documents within the first listing on pace 27 of the City's appeal brief which the Special Master has found to be entitled to protection on that basis. Similarly, a claim of attorney-client privilece can -- and will -- now be made by CEI with respect to each of those documents within l
lil-the second listing cn page 27 of the City's appeal brief which the Cpecial Master has found to be entitled to pro-tection on that basis. In this connection, it is important not to loco sight of the fact that no challenge.is being made here to the Special Master's determinations per se, based on his in camera examination of the documents. In short, b '.t t for the strained " waiver" argument, no one is disputing that the documents are in fact of a privileged nature. Production of this heretofore undisclosed material should, therefore, not be required.
While the City tries to raise a due process ques-tion regarding its ability to argue effectively before the Special Master "with respect to privileges not claimed by Applicants" (City Appeal Brief, p. 33), this is a specious contention. The initial brief which the City submitted to the Special Master discussed at length both the attorney-client and the attorney-work product privileges; the approach there taken was to treat in summary fashion the legal standards which the City thought the Special Master generally should apply. In a second brief submitted on May 2, 1975, the City expanded some on its legal arguments and made reference to specific documents identified in the interrogatory responses.
Following issuance of the Master's original Report, the City filed with the Special Master a third brief addressing the
identical substantive issues it raises here, again with reference to specific documents. It also presented oral argument on its obj ections. Thus, the City's complaint that it did not have a full and fair opportunity to be heard is no more than empty rhetoric.
The Special Master, who alone had access to the challenged documents, on reconsideration adhered in most respects to his initial decision that the contested corres-pondence and memoranda before him 1ere by nature confidentfal communications within the attorney-client privilege, or were work product of the attorneys involved in this proceeding; as such, they were entitled to protection from scrutiny by the other parties unless voluntarily disclosed by CEI.27/ -
CEI has plainly resisted disclosure on every possible occa-sion. It would, therefore, be contrary to the basic phi-losophy underlying the " privilege" concept to direct that material which is concededly of a privileged nature be sur-rendered.
The City's second basic qaarrel with the Special Master's rulings is similarly unfounded. Essentially, the claim is that CEI failed to meet its burden of proof in cer-tain specified areas, and, therefore, some or the documents 22/ we note in passing that as to a number of environ-mental documents requested by the City, DOJ and the NRC Staff, i and a few other documents, CEI did voluntarily waive its l l
attorney-client or attorney-work product privilege by pro-ducing the material for examination 2nd copying.
b
43-should not have been clothed with the mantle of privilege.28/ -
For reasons we have already articulatcd in earlier pcrtions of this brief, this argument takes exception with precisely the sort of fact determinations by the Special Master that should not be open to rcview -- especially interlocutory review -- in light of the parties' explicit agreement "to be bound" by the Special Master's determinations.
In any event, the several obj ections of the City In meeting its burden of in this area are not well taken.
evidence proof, CEI submitted to the Special Master the best available in this context, i.e., the documents themselves, plus cxtensive interrogatory answers, and the Hauser Affi-davit. During the cource of his review, the Special Master stated that, with respect to some documents, he drew certain inferences from the material before him.(June 30, 1075 Trans-cript, pp. 84-87). 'de disagree with the City that this pro-vides sufficient reason to fault the Spe;ial Master's rulings, for :t is plain from the face of the documents under
)
attack here and the sworn interrogatory and affidavit state- l l
ments by Mr. Hauser, that the inferences drawn were compelling.
1
~~ 28/ 'dhile the City makes a footnote reference to docu-ments listed in filings prior to the Master's rulings (City Appeal Brief, p. 34, n. 40), we do not understand the present l
appeal to relate to any documents other than those sp'cifi-cally identified on page 27 of the City's appeal brief and those enumerated in the City's filings objecting to the Master's Reports and seeking certification by the Licensing Board.
l l
[
L it it-For example, the Special Master drew the in-Terence in some instances that documents which cn their face requented legal advice of a confidential nature and wnich had limited distribution outside CEI to co-counsel or to CEI consultants only were not circulated to other unknown persons by the recipients thereof. This inference is fully supported by CEI's answers to interrogatories, as elplained in the letter of clarification to counsel for i
DOJ dated April 23, 1975:
Where a copy of a " privileged"
- document was distributed to someone in addition to the ad-dressee, the identity of the recipient thereof is contained in column 6 on page one of CEI's chart-response to Interrogatory One. CEI has no direct knowledge whether the person (s) receiving a copy of the document distributed it in any fashion, but it is CEI's belief that no such dis-tribution occurred.
As for the inference drawn by the Special Master with regard to who prepared legal memcranda taken from Mr. Hauser's files, it also was fully warranted in view of the nature of the submitted material. As reflected in the Hauser Affidavit and the interrogatory '.swers, where such
, l legal memoranda did not bear the name of the author, they l hai been prepared by Mr. Hauser himself or a member of his staff at his direction. Moreover, as explicitly stated in 1
l ww- m
e I
\
the interrccatory answers (pp. 2-3), the documents in l
2 question had at all timas been kept "in the files of CEI's
. Corporate Solicitor, and are and have been available for viewing only by CEI's lagal personnel or those persons specifically so authorised by CEI's legal personnel."
Mor do we think the Special Master can be faulted i
for inferring "that legal opinions on the letterhead of a particular law firm were prepared by some member of that firm." ?he practice of providing legal opinions en firm letterhead is widespread in private practice Indeed, as a matter of professional ethics, such legal opinions cannot
+
l properly be prepared by anyone but a member of the firm.
4 i In this regard, the City's reliance on Natta v Hogan, 392 1
! F.2d 686 (10th Cir. 1968), is entirely misplaced. The materials at issue in that case could not on their face 4
be readily identified as a lawyer's work product because there was nothing in the documents themselves to indicate that they had been prepared by an attorney. By contrast,
! there can be no real question that legal opinions involved here are the mental processes of a member of the firm iden-tified on the letterhead and thus entitled to protection as an attorney's work product.
Of course, the most effective way to sustain the l Special Master's fact determinations is on the basis of a t
. _ _ _ _ . . . _ _ _ _ _ . = . _ _ _ , , _ _ . . - , , _ _ _ _ . _ . . _ , . , , _ . , . , . . _ . , _ . _ . . . _ - . _ _ _ _ _ . - . _ _ . _
_ _ _ . - - _ . =. . . . - - __ _. _ _ _ _ _ _ _ . - _ _ _ _ _ _ _ _ _ _
l, ,
1
- -4G-i dccument-by-document g camera examination of the challenged I
i material. Such an exercise would, we cubmit, fully support i the rulings on privilege. The appropriatenecc of under-taking cuch a time-concuming task on appeal 13, an earlier i
- stated, highly questior.able in this cacc; it is even lecc l appropriate to engage in the effort by way of an interloc-1 j utory appeal.
i d
i CONCLUSION i
The Special Master is a lawyer and full-time '
.i member of the Atomic Safety and Licencing Board Panel. No
]
)
i good reason exista to accume he did not accept hic assignment
~
in thic proceeding in a careful and responsible manner.
The j ob he was given was of mammoth proportienc. It was per-1 e
formed efficiently and expediticucly, with a full opportunity i for all parties to be heard, both in written and oral argu-1 ment. With comnencement of the hearing now upon uc, the parties chould direct their attention to the masa cf materials l
and testimony that have been uncovered on diccovery. It serves no legitimate purpose to go back at thic late date i
and tackle all over again the privileged documents. The par-tiec explicitly agreed at the outset not to provoke such in-i terruptions in the hearing prococs; the schedule cet by che i
1 Licencing Board has littic tolcrance at this ctage for picco-meal review of thic cort; and there ic no real likelihood 1 I,
I l
i J
l
- - - . . _ _ . . _ , . , , - - . - - - , _- . , , , , - -i
I7-t that the ultimate result will differ materially from the Special biaster'n determinations or have any substantial impact on the outccme of the antitrust inquiry.
For the foregoing reac ns, the City's inter-locutory appeal and request 'vr a direction of certifica-tion by the Appeal Board should be denied.
Respectfully cubmitted, SHAW, ?ITT:iAN , PCTTS & TROWBRIDGE By: ,) OO ,mfl R
~m1 Wm. Bradfqrd Reyncids Gerald Charnoff Counsel for Applicants
~
Dated: September 12, 1975 B
Urn TED STATEC 0F A!".I'ICA
!!UCLF'it RE':UI,ATOltY Cu;.AICCIO:!
Be for^ the A t o:a ' a .areL7 a:31 L i c e n i n ~_._A.,_: r:11 Ivard In the Iin.tter of )
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TIIE TOLELO !:DISO:1 CC!IPAI!Y and )
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CO;iPl.:!1 )
(Davic-!;ecco !!uclear Power Station, ) Docket !!oc . 50- 3 '; 6 A Unit 1) ) 50-440A
) 50-441A
, TiiE CLEVEL/:!D ELECTRIC ILLUB:I:!ATING )
(Perry Iluc 10;.r Pc.ler Plant , )
Unito 1 and 2) )
CERTIFICATE OF SFF7 ICE I hereby certify that copiec cf the foreccinc "Applicantc' Brief In Recponce To Thu August 14, 1975 Order Of The Appeal Ecard" were cerved upon each of the perconc licted on the attached Servico Lict, by har.d delivering a copy to thoce persons in the Washington, D. C.
area and by mailing a copy, pectage prepaid, to all others, all on thic 12th day of September, 1975 SIIAW, PITT:!A::, POTT 3 & TRC'.15 RIDGE By: ]t>.
- Q~5 \ . . .d ,- .'s W_ s . _1
- .__
Wm. 13radford h.'ynolds Councel for Applicants Dated: September 12, 1975
UNITED STATES OF A: ERICA NUCLEAR HCCULATORY COMMISSION i
Before the atomic Safety anri L3cencfnr* Apreal Board In the Matter of )
)
THE TOLED0 EDISCN CCMPANY and )
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- r u . .r a u, N u-1aus.
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COMPANY )
(Davia-Ecace Nuclear Power Station, ) Docket Nos. 50-346A Unit 1) ) 50-440A
^
THE CLE'.' ELAND ELECTRIC ILLUMINATING )
(Perry Nuclear Power Plant, )
Units 1 and 2) )
SERVICE LIST Alar S. Rocenthal, Ecc. Atomic Safety and Licensing Chairman, Atomic Safety and Board Panel Licensing Appeal Ecard U. S. Nuclear Regulatory Commissicn U. S. Nuclear Regulatory Comm'.ssion Wachington, D. C. 20555 Washington, D. C. 20555 Abraham uraitman, c sq.
Michael C. Farrar, Esq. Chief, Office of Antitrust Atomic Safety and Licensing and Indemnity Appeal Ecard U. S. Nuclear Regulatory Commis icn U. S. Nuclear Regulatory Commicsion Washington, D. C. 20555 Washington, D. C. 20555 Mr. Chase R. Stephens Richard S. Salzman, Esq. Docketing & Service Section Atomic Safety and Licensin, U. S. Nuclear Regulatory Cerr.icsion 1717 H Street, N.W.
Appeal Board U. S. Nuclear Roculatcry Ccmmicsion Washington, D. C. 20006 Washingten, D. C- 20555 Benj amin H. Vogler, Esq.
Douglas V. Rigler, Esq. Office of the Executive Legal Chairman, Atomic Safety and Director Licensing Board U. S. Nuclear Regulatory Commissicn Foley, Lardner, "ollabaugh Washington, D. C. 20555 and Jacobs Roy P. .essy, Chanin Buildinn - Suite 206 L g.r., _csq.
Office of the cxecutive Legal 815 Connecticus Avenue, N.W. Direccor Washington, D. C. 20006 U. S. Nuclear negulatory Commissicn Ivan W. Smith, Esq. Washington, D. C. 20555 Atcmic Safety and Licensihg Andrew ,.
r Popper, Esq.
Board Panel Office of the Executive Legal U. S. Nuclear Reculator,y Commission Washington, D. C. 2003o Director U. S. Nuclear Regulatcr~v Commissicn John M. Frysiak, Ecq. Washington, D. C. 20555 Atomic Safety and Licensing Board Panel U. 3. Nuclear Regulatory Commicsion Washington, D. C. 20555
Donald H. Hauser, Esq.
Joncph J. Saundcro, Ucq.
Steven M. Charno, Esq. General Attorney Anti trust Division The Cleveland Electric Illuminating Company Department of Juctico 55 Public Squarc Nachington, D. C. 20530 Cleveland, Ohio 44101 Melvin G. Berger, Esq. .
Leslic Henry, Esq.
Anthony G. Aiuvalacit, Esq. Fuller, Henry, Hodge & Snyder Antitruct Division 300 Madison Avenue Dcpartment of Justico Toledo, Ohio 43604 Washington, D. C. 20530 Thomas A. Kayuha, Esq.
Reuben Goldborg, Ecq. Ohio Edison Company David C. Hjelmfcit, Ecq. 47 North Main Strcot Goldberg, Fieldman & Hjelmfolt Akron, Ohio 44303 1700 Pennsylvania Ave., N.W.
Washington, D. C. 20006 Thomas J. Munsch, Esq.
General Attorney Wallace E. Brand, Esq. Duquecnc Light Company Pearce & Brand 435 Sixth Avenue Suita 1200 Pittsburgh, Pennsylvania 15219 1000 Connecticut Ave., N.W.
Wachington, D. C. 20036 David Olds, Esq.
Reed Smith Shau & McClay
- Wallace L. Duncan, Esq.
Union Trust Building Jon T. Brown, Esq. Do 2009 .-
Duncan, Brown & Palmer Pittsburgh, Pennsylvania 15230 1700 Pennsylvania Ave., U.W.
Washington, D. C. 20006 John Lansdale, Esq.
Cox, Langford & Brown Fran); R. Clokey, Ecq.
21 Dupont Circle, N.W.
Special Assistant Washington, D. C. 20036 Attorney General Room 219 Edward A. Matto, Esq.
Tovne House Apartments Assistant Attorney General Harrisburg, Penncylvania 17105 Chief, Antitrust Section 30 E. Broad Street, 15th Floor Mr. Raymond Kudukin Columbus, Ohio 43215 Director of Public Utilitics Richar' M. Firestone, Esq.
City of Cleveland Acciatant Attorney General 1201 Lakeside Avenue Antitrust Section Cleveland, Ohio 44114 30 E. Broad Street, 15th Floor Columbuc, Ohio 43215 IIcrbert R. Whiting, Director Robert D. Hart, Esq. Karen H. Adkins, Ecq.
Department of Law Accictant Attorney Concral 1201 Lakeside Avenue Antitruct Section Cleveland, Ohip 44114 30 E. Broad Strcot, 15th Flocr John C. Engle, President Columbuc, Ohio 43215 AMP-0, Inc. Christopher R. Schraff, Esq.
Muni.cipal Building Acci.qtant Attorney General 20 liiqh Street Environmental Law Section llamilton, Ohio 4 5012 361 E. Broad Strcet, 8th Floor Columbuc, Ohio 43215 i
Joce,ch A. Riecer, Jr., Ecq.
Roc <1 Smith Sha'.! & .:cClay Suite h ^ !4 ::adican Building Washincton, D. C. 20005 e
e