ML19329C783
| ML19329C783 | |
| Person / Time | |
|---|---|
| Site: | Perry, Davis Besse  |
| Issue date: | 10/21/1975 |
| From: | Charnoff G, Reynolds W CLEVELAND ELECTRIC ILLUMINATING CO., SHAW, PITTMAN, POTTS & TROWBRIDGE, TOLEDO EDISON CO. |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8002190896 | |
| Download: ML19329C783 (18) | |
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October 21, 1975 UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMI3SION Before the Atomic Safety and Licensing Board In the Matter of
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1.
Under the guise of proceeding pursuant to Section 2.740(e) of the Commission's Rules of Practice --
which addresses the matter of amending responses to discovery requests -- the Department of Justice
(" Department") now seeks to expand its Septem'oer 5, 1975 statement of allegations to include at the eleventh hour yet another contention that Applicants generally, and Ohio Edison Company in particular, have had no reason to focus upon in preparing for the IIc-vember 20 hearing.
This effort is not only another de=cn-stration of the callous attitude.rhich the Department and the other parties have h-d toward Applicants' due process rights; 8 002190 PP(
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, it also flies in the face of the Commission's own rules; brazenly ignores this Board's inst"uctions regarding the framing of issues, and runs roughshod over the most basic pleading requirements for introducing new issues into a proceeding.
2.
The Department's so-called " amendment" should be forcefully rej ected.
This Board has a responsibility to control the upcoming evidentiary hearing in a manner that will insure a manageable and orderly preseata ien of relevant evidence only -- evidence which goes direc',1y to issues that are properly w'. thin the scope of this ? card's antitrust review responsibility and that concern matters with respect to which Applicants have had adequate advance notice for purposes of preparing for the hearing.
The present filing by the De-partment provides an appropriate occasion for the Board to advise all parties that it intends to assume this responsi-bility.
There are a number of strong reasons to support such a ruling.
3 The Department relies on Section 2.740(e) as the excuse for adding to its September 5 allegations the following separate contention:
Beginning at some time prior to March 1965, and continuing there-after, Ohio Edison and Ohio Power Company engaged in a territorial sllocation agreement, there'oy fo"e-closing competition in supplyin; electric power.
, Reference to the above provision of the Commission's Rules is in the circumstances not merely disingenuous, it is totally misleadir; and irresponsible.
The Department itself made a request at Prehearing Conference No.
4, held on April 21, 1975, for permission to use answers to pending interrogatories as the vehicle for setting forth its state-ment of specific allegations.
This accc=modation was granted by the Board in Prehearing Conference Order No. 4, dated April 29, 1975, and thd Repartment was even allcwed an ex-tension of time within which to answer certain interrogatories until the September 5 date for filius ne Department's rtate-ment of allegations.
4 The point need not be belabored.
All of the parties to this proceeding, as well as the Board, have under-stood and treated the Department's September 5 filing in the same manner as the similar filings by the NRC Staff and the City of Cleveland.
This is clearly an instance where the particular form chosen by the Department entitles it to no special dispensaticn.
The September 5 filings marked the cut-off date for specifying allegations.
Whatever style the parties elected to follcw to formulate the nature of the case to be presented, they must now proceed with that formu2ation.
Neither Section 2.740(e) of the Commission's Ru'es of Practice, nor any other Section to our knowledge, provides a basis for 1
l
recognizing the Department's effort to make a last-minute addition to its contentions.
5 The reason is manifest.
In every adversary proceeding there ccmes a time unen the door must be closed on attempts to remodel the pleadings.
The most basic con-cepts of due process require that defendants who are being charged with miseenduct be given adequate advance notice of the allegations against them so that they will have a reason-able opportunity to prepare their case.
Philadelnhia Electric Company, et al. (Peach Ecttc= Atomic Pcwer Station, Units 2 and 3), A1AB-216, RAI-74-7, 13, 20 (July 5, 1975).1/
In the present proceedings, such notions of fundamental fairness have all but been ignored.
Applicants have been forced by the other parties into a position which, to anyone even re-
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regards Applicants' rights to due process and sets a dangerous precedent.
6.
This accusation is not made lightly.
Applicants, despite repeated attempts to obtain from all other parties a meaningful statement of allegations, were ordered to proceed with discovery on the strength of (1) the City of Cleveland's and AMP-Chio's petitions to intervene, which were di"ected pri :arily at The Cleveland Electric Illuminating Ccapany, (2) no statement ;f 1/
It is generally recognized that "[t]he key to pleading in the administrative process is nothing more than an opportunity to prepare."
1 K. Davis, Administrative Law Treatise 58.0h, at 525 n. 9, and 58.05, at 530 (195o>.
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$ allegations by the NRC Staff, and (3) very generalized recommendations for antitrust review contained in the De-2/
partment's Advice Letters in Perry and Davis -Besse 2 and 3.-
Applicants conducted discovery as best they could on the basis of the generalized charges made.
They attempted to obtain more specific information from the Department and the NRC Staff through written interrogatories, but the answers thereto were deferred, over Applicants' objection, to the end of the discovery period.
- le anwhile, the other parties were engaged f:r more than three full months in extensive deposition discovery of Applicants.
Finally, after the Board's designated period'of discovery had come to a close, Applicants' rec'eived for the first time the other parties' specific al-legations on September 5, 1975, barely two months before the evidentiary hearing is to commence.
7 As to all Applicants other than The Cleveland Electric Illuminating Company, these September 5 filings con-tained charges which had theretofore never been advanced, and, in light of the petitions to intervene and the Department's Advice Letters,could not have been reasonably anticipated.
These Applicants thus find themselves faced with the unfair prospect of being rushed into an antitrust inquiry without the benefit of any prehearing discovery on a large number of the 2/
The Department recommended against antitrust review in Davis-Besse No.
1, but an antitrust inquiry was instituted at the request of the City of Cleveland, pursuant to the City's petition to intervene.
~ allegations against them.
On top of this, the Department now comes along at the last minute with yet another allega-tion from out of nowhere which it seeks to " bundle" with the rest.
Even under the very minimal requirements of due process, this situation is intolerable, 8.
In the normal course, Applicants obviously would seek a stay of the hearing in order to afford an opportunity to conduct discovery on the recent September 5 claims -- dis-covery which they are entitled to have as a matter of due process of law.
Hc.tever, such a step at this particular time has been effectively discouraged by the carefully orchestrated delay cactics of the other parties.
Under present schedules, Applicants must obtain an operating license for Davis-Besse Unit 1 and a construction permit for Perry Units 1 and 2 in the Spring of 1976.
As the other parties know well, both energy needs and financial considerations dictate meeting these schedules.
The Department, the NRC Staff and the City, all operating on the assumption that antitrust review can hold up issuance of the permits, have inexcusably stalled these proceedings at eve ry possible stage.
In short, they have used the leverage of the imminent plant schedules to whipsaw Applicants into the untenable position of either rushing into a complex antitrust hearing (without regard to fundamental consideration of due process) in order to meet the start-up dates for construction and operation,
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or reluctantly accepting onerous license conditions (which would prove to be unwarranted if a hearing could be conducted in an orderly fashion) in order to settle the inquiry prior to the aforesaid critical dates.
9 Nor should this Board allow itself to be fooled by the posturing of the other parties on the matter of delay.
In the Davis-Besse Unit 1 antitrust proceeding, for example, the NRC waited a full two years after the filing of Applicants' respense to rule on the City of Cleveland's petition to inter-vene.
No good explanation has yet been provided for this action.
Other delay tactics have included (1) the use of vague and expansive interrogatories and document requests requiring production of well over 2 million documents (most of which were of 30 little relevance they were not even brcught to Washington, D.
C.), (2) intentionally conducting depositicns at a snail's pace so as to prolong unnecessarily the prehearing discovery period, and (3) repeatedly extending filing dates to obtain postpcnements of the hearing date.
10.
The net effect of this concerted effort by the Department, the NRC Staff and the City has been to push the hearing back to November 20, 1975, only a few months before the critical dates for commencing major construction er actual operation of the respective nuclear facilith 3.
By also suc-ceeding in withholding from most of the Applicants until September 5, 1975, the nature of the cases to be presented t
_ against them, the other parties have left Applicants with a Hobson's choice:
go to hearing with no opportunity for sean-ingful discovery on the newly-raised claims, or seek to delay the hearing in order to conduct such discovery and thus ef-fectively eliminate all possibility of meeting the schedule deadlines for Davis-Ber.e Unit 1 and Perry Units 1 and 2.
11.
Given tl
- _ternatives, Applicants have been forced by the exigenci.
situation to ec= promise dras-tically their prehearing discovery and proceed with the hearing, notwithstanding a distinct disadvantage; the due process argu-ment will have to be made, if at all, in the Court of Appeals.
The other parties could, of course, eliminate the unfairness inherent in the present situation by consenting to post-license antitrust review.
They have repeatedly turned aside Appli-cants' requests for such an accommodation, however.
Nor has the Board been willing to grant this relief to Applicants, either in connection with Davis-Besse Unit 1 operating license or the Perry Units 1 and 2 construction permit.
12.
We have taken the time to set forth our strong objection to the manner in which Applicants are being " rail-roaded" into the present antitrust hearing because it bears directly en the Department's October 14 proposed " amendment".
This late request to add yet another allegation is but a furtner manifestation of the total disregard that has been displayed
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in this proceeding for Applicants' fundamental rights.
At no time prior to the Department's October lh filing was there any suggestion that a charge would be made regarding some alleged territorial allocation agreement between Ohio Edison Company and Ohio Power Company.
Indeed, only one allegation of anticompetitive conduct on the part of Ohio Edison was contained in the Department's Davis-Eesse 2 and 3 Advice r etter; it related only to the rctter of establishing new delivery points.
The Perry Advice Letter found no fault with Ohio Edison.
In its September 5 filing the Department sur-prised Ohio Edison with a host of new allegations.
And it now comes in without any advance warning with another surprise contention.
Such a pleading practice is unconsaionable; as the Department has undoubtedly calculated, it significantly reduces Applicants' chance for meaningful discovery on the claims.
13 The Department's tactics are all the =cre of-fensive to traditional notions of due prccess when the pretext for advancing the " amendment" is examined.
The Department asserts that "at the time of its initial answer, it was wholly unaware of the facts underlying the amended answer" (p. 1).
It then suggests that those facts were " contained, in part, in documents sought from the Applicants during discovery" (p. 2; emphasis added), but not prcduced.
If there is any truth to this claim -- and it is both surprising and disappointing how
- little there appears to be -- the underscored "in part" reference should state "in very small part."
2n e letter to the undersigned counsel dated October 10, 19 5, the De-partment requested a total of 21 additional documents from Applicant., including 5 directly from Ohio Edison Company.
Our response to that request is filed herewith.
While it demonstrates generally that there is no legitimate basis for faulting Applicants on their document production of =cre than 2 million documents, it also reflects that only one of
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14.
If therefore the Department is depending on its mnfounded allegations of Applicants' sc-called ncncompliance with discovery requests as a basis for its amendment, it has
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Chio Edisen-Chio Power territorial allocation agreemen; is the Prentice letter of Fe'oruary 23, 1967, a copy of which is being provided to the Depart = eat under separate cover.
That letter does not, however, provide any support for the Department's allegation.
It is nothing more than a request by the Vice Presi-dent & General Manager of Chic Power for ccmments from a lumber of pecple, including Mr. White of Ohio Ediscn, on a draft pro-posal for a territory integrity law in the State of Ohio.
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In the latter event, the time has long since passed for using those known facts as a basis for now in-serting an independent allegation into this proceeding.
15 There is one other basic reason why the De-partment's " amendment" is not entitled to recognition in this proceeding.
Under the Commission pleading requirements in Section 2.713(a), it is not enough simply to set forth a o "m,vp - "*. o " a..v n' o.._a v. v...
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The Department has not even made 2 superficial effort to meet
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This is precisely what the Commission cautioned against in Water-ford II.
As there stated (CLI-73-25, 6 AEC at 620):
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[ Emphasis is original.]
17 Cnly if the Department's ill-conceived notion of the nexus standard is followed would it be even remotely possible -- assuming timeliness, !hich is obviously not the case here -- to include within the precent antitrust pro-
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The Waterford nexus standard thus requires the elimination of this allegation from Ccmmission scrutiny; it falls dholly outside the perm 4 sible scope Of Section 105c antitrust review.
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a s 18.
This is exactly the position which Applicants have consistently taken in this proceeding.
If nexus is to have ~ any role at all in connection with the Ccm.aission's antitrust review responsibility -- and both Congress and the Commission felt strongly that it should -- this Board muct determine as to each alleged anticompetitive practice whether it has a meaningful tie to the nuclear facility.
The dencribed " situation" or " situations" must be defined only in teras of such "related" practices.
We repeat once again that it may well be appropriate to introduce evidence at the hearin~ as to "related" oractices which are not alone s
violative of the antitrust laws -- in an effort, for example, to establish scme pattern of " inconsistent" conduct.
But in " bundling" suspect practices for purpcses of determining whether the described " situation" runs afoul of the anti-trust laws, the Waterford II decision makes it clear that each such practice so " bundled" must have an independent nexus with the licensed activities in order for thi; Ecard to take cognizance of it.
This point was undarscored in unmistakable terms by the one licensing board that has to date issued an Initial Decision following a full antitrust inquiry.
As stated in Consumers ?cuer Comnany (Midland Plant, Units 1 and 2), Docket Nos. 50-329A and 50-330A, p.
42
- (July 13, 1975):
"The question of nexus remains a primary and predominant matter which must be resolved as to each alleged anticcmnetitive practice." [ Emphasis added.]
19 The Department's newest allegation does not even come close to satisfying this nexus standard.
If it is allowed to stand, there is nothing left to differentiate the Cc= mission role under Section 105c from a full-blcwn antitrust inquiry in the ccurts.
Indeed, to allow this last-minute amendment to the pleadings at a time.: hen Ap-plicants no longer have an opportunity to conduct discovery on the claim, and only a few shcrt weeks before the hearing is to commence, would deprive Applicants of the basic due proc 3ss protecticns that they could at least count on if this were a judicial proceeding.
20.
~his Board should take every precautien not to allow Applicants' fundamental rights to be trenched upon any more than has occurred already.
The September 5 filings al-ready contain too many new allegaticns which Applicants are hard pressed to explore in advance of the hearing because of the inexcusable delay tactics by the Department, the NRC Staff and the City.
At some point, the peppering of this record with new, surprise charges that have nothing whatsoever to do with the antitrust review responsibility of the Occmission
_ must be stopped.
We urge that the Board take this occasion to so advise the other parties by forcefully rejecting the Department's proposed amendment.
Respectfully submitted, SHAW, ?!TTMAN, POTTS & TROWERIDGE e
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Gerald Charnoff Counsel for Applicants Dated:
October 21, 1975
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Board
-In the Matter of
)
)
THE TOLEDO EDISON COMPANY and
)
THE CLEVELAND ELECTRIC ILLUMINATING )
NRC Docket No. 50-346A r.0,..
C d I'l e M. 4.f s)
(Davis-Besse Nuclear Power Station, )
Unit 1)
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Tu..r C
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7 "u. i. 7.v. n' m. ~ 1' ' G-
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NRC Docket Nos. 50 h20A (Perry Nuclear ? ver Plant,
)
50-441A Units 1 and 2)
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t e.
a' m.
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(Davis-Besse Nuc'an"
^wer Station, )
NRC Docket Nos. 50-50CA Units 2 and 3)
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50-501A c :_ d m. r v. r. e n,. :_
m u :. 2 :+r_c:
m_.
I hereby certify that copies of the foregoing
" Applicants' Respcnse To Request By The Department Of Justice For Leave To Amend Pleadings" were served upon each of the persons listed en the attached Service List, by hand delivering a copy to those perscns in the Washington, D.
C.
area and by mailing a copy, postage prepaid, to all others, all on this 21st day of October, 19'5 SHAW, PITTMAN, POTTS & TROWBRIDGE
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s By:
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. u Wm. Bradford'Reynolds\\
Counsel for Applicants 1
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atcmic Safety and Licensing Board In the Matter of
)
)
THE TOLEDO EDISON COMPANY and
)
THE CLE'lELAND ELECTRIC ILLUMINATING
)
NRC Docket No. 50-346A COMPANY
)
(Davis-Besse Nuclear Power Station,
)
Unit 1)
)
)
T.u.c Con-'s eca'.ilD c~L aw. n v r
a Am a b n J' n* T1J' r-r7
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NRC Docket Nos. 50 440A (Perry Nuclear Pcwer Plant,
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50-441A Units 1 and 2)
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(Davis-Besse Nucloo" Ocwer Station,
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NRC Docket Nos. 50-500A Units 2 and 3)
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50-5 CIA S em.. i rC- : Te a -.
Douglas V. Rigler, Esq.
Mr. Chase R.
Stephens Chairnan, Atcmic Safety and Docketing & Service Section Licensing Beard U.S.
Nuclear Regulatory Ccmmission Foley, Lardner, Ec11abaugh 1717 H Street, N.W.
and Jacobs Washington, D.
C.
20006 Chanin Building - Suite 206 815 Connecticut Avenue, N.h.
Benjamin H.
Vcgler, Esq.
Washington, D.
C.
20006 Roy P.
Lessy, Jr.,
Esq.
Jack R. Gcldberg, Esq.
Ivan W. Smith, Esq.
Office of the Executive Legal Directcr Atomic Safety and Licensing U.S.
Nuclear Regulatory Commission 3 card Panel Washington, D.
C.
20555 U.S. Nuclear Regulatory Commission Washington, D.
C.
2C555 Joseph J.
Saunders, Esq.
Steven M.
Char.o, Esq.
John M. Frysiak, Esq.
Melvin G.
berger, Esq.
r Atomic Safety and Licensing Anthony G.
Aiuvalasit, Esq.
Board Panel Ruth Greenspan Bell, Esq.
U.S. Nuclear Regulatory Commission Janet R.
Urban, Esq.
Washington, D.
C.
20555 Antitrust Division Department of Justice Atomic Safety and Licensing Washington, D. C.
20530 Board Panel U.S. Nuclear Regulatory Commission Reuben Goldberg, Esq.
Washington, D. C.
20555 David C. Hjelmfelt, Esq.
Michael D. Oldak, Esq.
Goldberg, Fieldman & Hj91mfelt 1700 Pennsylvania Ave., N.h.
Washington, D.
C.
20006
_2_
Wallace E.
Brand, Esq.
Leslie Henry, Esq.
Pearce & Brand Michael M. Eriley, Esq.
Suite 1200 Roger P.
Klee, Esq.
1000 Connecticut Ave., N.W.
Fuller, Henry, Ecdge & Snyder Washington, D.
C.
20036 300 Madison Avenue Toledo, Ohio 43604 Wallace L. Duncan, Esq.
Jon T.
Brown, Esq.
Thomas J.
Munsch, Esq.
Duncan, Brown & Palmer General Attorney 1700 Pennsylvania Ave., N.W.
Duquesne Light Company Washington, D.
C.
20006 435 Sixth Avenue Pittsburgh, PA 15219 Frank R. Clckey, Esq.
Special Assistant David Olds, Esq.
Attorney General William S.
Lerach, Esq.
Roca 219 Reed Smith Shaw & McClay Towne House Apartments Union Trust Building Harrisburg, PA 17105 Box 2009 04
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-a-s0 v va v u. sa Mr. Raymond Kudukis Directer of Public Utilities Lee A.
Rau, Esq.
City of Cleveland Joseph A.
- Reiser, Jr., Esq.
1201 Lakeside Avenue Reed Smith Shaw & 'IcClay Cleveland, Ohio 24114 404 Madison Euilding 1155 15th Street, N.W.
Herbert R. Whiting, Director Washington, D.
C.
20005 Robert D.
Hart, Esq.
Department of Law John Lansdale, Esq.
1201 Lakeside Avenue Cox, Langford & Brown Cleveland, Ohio 44 14 21 Dupont Circle, N.W.
Washington, D.
C.
2003c John C.
Engle, President AMP-0, Inc.
Edward A. Matto, Esq.
Municipal Building Richard M. Firestone, Esq.
20 High Street Karen H.
Adkins, Esq.
Hamilton, Chio 45012 Antitrust Secticn 30 East Ercad S;reet, 15th Floor Donald H. Hauser, Esq.
Columbus, Chio 43215 General Attorney T.h.e.
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.ms 55 Public Scuare Environmental Law section Cleveland, Chio 44101 361 E.
Ercad Street, 8th Flec" Victor A.
Greenslade, Jr., Esq.
Principal Staff Ccunsel Terence H.
Eenbcw, Esq.
The Cleveland Electric A.
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Illuminating Ccapany Steven A.
Eerger, Esq.
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55 Puc'lic Square Winthrep, Sticscn, Putnam & Roberts Cleveland, Ohio 44101 40 Wall Street Thomas A.
Kayuha, Esq.
Chio Edison Company 47 North Main Street Akron, Chic 44303
.