ML19329C942
| ML19329C942 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 10/31/1975 |
| From: | Berger M, Charno S, Urban J JUSTICE, DEPT. OF |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8002200915 | |
| Download: ML19329C942 (13) | |
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UNITED GTATES OF AMERICA NUCLEAR REGULATORY COOIISSION'
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BEFOPT: T9E ATOMIC SAFETY M!D LICENSING BOARD In the Matter of )
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The Toledo Edison Company and )
The Cleveland Electric Illuminating ) Docket Nos. 50-346A Company ) 50-500A (Davis-Besse Nuclear Power Station, ) 50-501A Units 1, 2 and 3) )
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The Cleveland Electric Illuminating ) Docket Ncs. 50-440A 50-441A
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Company, et al. )
(Perry Nuclear Power Plant, )
Units 1 and 2) )
APPLICATION OF THE DEPARTiENT OF JUST!CE FOR A SULPOENA TO THE CLEVELAND ELECTRIC ILLU::INATING COMP.'d!Y Pursunnt to Section 2.720 of-the Commission's Rules of Practice (10 C.F.R. S 2.720), the Department of Justice hereby requests the issuance of the attached subpoena to the Cleve- j land Electric Illuminating Company ("CEI") requiring the
. production of certain documentary evidence on November 15, 1975.
On May 1, 1975, pursuant to the provicions of the Anti-trust Civil Prc ess Act (15 U.S.C..Ss 1311-14), the Assistant Attorney General in. charge of the Antitrusc D'. vision issued Civil Investigative. Demand No. 1629 to CEI in the course of a separate and independent inquiry to determine whether that 8002 200 9er
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company had. violated Section 2 of the Sherman Act (15 U.S.C.
S 2) by attempting to monopolize or monopolizing the genera-tion and transmission of electric power and energy and the sale of electric power-and energy at wholesale and retail in Northeast Ohio. On June 27, 1975, CEI completed production of the documents called for by the Demand.
In a letter from the Department to counsel for the Appli-cants dated October 10, 1975, the Department indicated its intention of using documents relevant to the instant proceed-ing which had been produced pursuant to the above-mentioned
. Demand and which had'thus come to the Depar'tment's knowledge.
On October 21, 1975, Applicants responded that they would resist any effort on the Department's part to utilize such evidence in this proceeding. In order to permit a prompt and orderly resolution of this issue, the Department is hereby seeking a subpoena to requira production of a limited number of specific documents, the existence and relevance of which are indisputable.
Applicants have resisted the Department's efforts to bring this evidence before the Licensing Board on the folicwing grounds:
That document production [ pursuant to the Demand]
was in response to a request having nothing to do with this proceeding; it went far beyond the dis-covery limitations imposed here by the Licensing Board, both as to the time period and subject matter involved.
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- As. indicated above, the Demand was part of an inquiry which, to a certain~ extent, parallels and overlapc the subject matter of this proceeding. As we will show below, certain selected documents prcduced by CEI pursuant to the Demand are of rele-vance and probative value in this proceeding. To the extent such documents fall outside the previously established scope of discovery in this proceeding, the Department believes that such relevance and probative value constitute good cause for expanding the scope of discovery in the extremely limited fashion which would ba required by this subpoena.
It should be noted that most of the " limitations" placed on the time pericd of the discovery in this proceedinc by the Licensing Board were effected in response to Applicants' alle-gations that broader discovery would be unduly burdensome.
However, the production of documents now sought by the Depart-ment cannot impose any burden on the Applicants. All such documents are identified with particularity. There will be no burden of searching and producing them since the Department is fully agreeable to using the identified documents which are already in its possession if Applicants will consent thereto.
If Applicants insist upon strict forma.lity, tile copies already in the Department's possession can be returned to co"nsel for the Applicants and then immediately re :.endered to the Depart-ment in ccmpliance with the Commission's subpoena.
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The specific documents sought by the Department are listed and described on Schedules A, B and C~which are annexed to the subpoena. All of these documents are relevant to the
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issues which will be before this Licensing Board at hearing.
Further, 'all of these documents constitute evidence relevant to allegations previously made by the Department. Thus, produc-tion under the instant subpoena would not widen the scope of the issues, the matters ia controversy, or the allegations pre-viously made in this prcceeding.
Schedule A - Documents listed in Schedule A deal with CEI's afforts to acquire the Painesville Municipal Electric Systen and .lence, as to subject matter, clearly fall within the scope'of document request 25 of the Joint Request of the AEC P- latory Staff and U. S. Department of Justice for Interrogatories and for Production of Documents by Applicants, filed August 23, 1974 (hereinafter " Joint Request"), which calls for documents relating to actual, possible and centemplated acquisitions.
Some of these documents (for example, 3-105, 1-5, 1-123, 1-310, 1-416, 1-417, and 3-186) were clearly prod cible under document request 25, since they fall within the time frame
._ set by the Licensing Board for document production. Other
~docur. cats, which deal with the formation of various alternate :
plans for the acquisition of the Painesville system, reports of meetings held with Painesville officials to discuss I
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acquisition, and various studies to determine the effect on CEI of such an acquisition would be producible under the Joint Request but for the cut-off date on discovery. In view of the obvious relevance of these specific documents and the fact that there will be no additional burden on Applicants if production is required, we believe the discovery cut-off date should be disregarded with respect to the documents listed in all three schedules. .
All of these documents constitute evidence in support of the allegations made.by the Department in the sccend p ;sgraph of Interrogatory Number 2, part A, of the September 5, 1975 !
filing.
Schedule B - Documents listed in Schedule B deal with CEI's plans, efforts and progress in acquiring the Cleveland Municipal Light Plant and also fall within the scope of docu-ment request 25 of the Joint Request. Some of these documents (for example, 3-130, 1-66, 1-69, 1-90, 1-95, 1-126, 1-127, 1-253, 1-239, 1-292, 1-342, 1-392, 1-393, 1-430, 1-452, 1-492, 1-493, and 1-494) fall within the time frame for discovery set by the Licensing Board and hence were clearly producible. Other documents 'redate p the September 1, 1965 cut-off date but, as previously noted, the cut-off date was established to minimize the burden on Applicants; since the Department has these documents in its possession, no such burden exists.
Some of these documents provide evidence of reasons, other than those publicly state'd by CEI, for cpposing MELP's expansion 5
l and for CEI's statements that the existence of MELP creates a tax subsidy for 20% of the citizens of Clevel'and (MELP customers) by the other 80% (CEI customers) . These reasons also appear to conflict with the statements of some deponents.
All of these documents constitute evidence in support of the allegation made by the Department in the seventh paragraph of Interrogatory Number 2, part A, in the September 5, 1975 i
filing.
Schede ..crents listed in Schedule C deal with CEI's efforts to ucquire all the isolated generation within the CEI retail service area. Included therein are documents uhich scell out a detailed plan for such acquisitions and evalua-tions'of isolated generating facilities in the CEI service area in preparation for proposals to acquire such facilities. Some of these documents also include evidence of CEI's knowledge that isolated generation constitutes competition to the sale of CEI power and that, in some cases, municipal electric systems were also competitors for~the accounts of isolated generating industrier. Lastly, some of these documents clearly show how CEI has gone about acquiring isolated generating facilities, e.g. recommended :o private isolated generating entities that they install electrical equipment which would disrupt the favorable heat balance they used to generate power, so that self-generation would become less economical.
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Had the definition of electric utility used by the Depart-ment in the Jcint Request not been changed by the Licensing-Board, these documents vould have been producible thereunder in compliance with document request 25. At the time the definition was changed the Department was unaware of this program to eliminate all isolated generation in the CEI area and its importance in tne overall CEI plan to acquire the Cleveland and Painesville municipal systems. Now, as has been made clear by Dr. Wein's testimony, the acquisition of industrial genera-tiqn is merely another means of depriving municipal systems of potential cuctomers, as well as potential entities with which to entar into operational coordination. Even under the restricted definitior. of " electric utility" established by the Licensing Board, these documents are relevant as part of the CEI's plan to acquire the Cleveland and Painesville municipal systems. ,
The documents listed in Schedule C constitute evidence in support.of'the allegations made by the Department in the second, seventh and last paragraphs of Interrogatory Number 2, part A, in the September 5, 1975 filing.
It is anticipated that the Applicants will object to the Department's utilization of documents. which originally came to our attention through an investigation under the Antitrust Civil Process Act. That Act-provides that no materials ob-tained.under a Demand shall be available for examination 7
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without consent of the party producing such material. 15 U.S.C. S 1313 (c) . The statute does provide, however, for the use of such materials in subsequent litigation involving anti-trust violations before the federal cour+ . '5 U.S.C.
_ S 1313(d). It is the Department's position that, when it secures evidence in the course of a Civil Inves tigative Demand investi-gation which has relevance to a proceeding outside the federal courts, the Department is under an obligation to utilize this evidence in a manner consistent with the public interest.
While there is no authority going directly to the question of such utilization of documents obtained under a Civil In-vestigative Demand, cases concerning the analogous situation of the utilization of documents obtained pursuant to antitrust Grand Jury subpoenas duces tecum shed sone light on the govern-cent's obligation. 1/ The standard of confidentiality con-cerning documents produced before an antitrust Grand Jury (Federal Rule of Criminal Procedura 6 (e)) is comparable to that imposed by the Antitrust Civil Process Act. Notwithstanding such limitations, the courts have held that the government may use documents obtained puisuant to antitrust Grand Jury subpoenas duces tecum in subsequent civil or criminal act. ions filed under the antitrust laws and other federal statutes. In Re Grand Jury Investigation (General Motors Corporation), 32 F.R.D. 175, 1/ Prir.ciples developed concerning the reasonableness of Grand Jury subpoenas duces tecum are applicable to Civil Investigative Demands. 13 U.S.C. S 1312 (c) (1) .
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182 (S . D . N.Y. 1963); Unit &d States v. General Electric Co.,
i 209 F. lupp. 197, 198-202 (E.D. Pa. 1962); see also, United j' States v. Procter & Gamble Co., 356 U.S. 677, 683-84 (1958).
The Court in Tn Re Petroleum Investigation, 152 F. Supp.
646, 647 (E.D. Va. 1957), rejected arguments that government counsel should not be allowed to utilise records obtained pursuant to a Grand Jury subpoena duces tecum in other than a criminal antitrust action, and held:
Without reflection, the possibility of the Government's devotion of the documents to another use affronts the sense of fair play. It implies an abuse of process. But, studied, the diversion proves to be altogether correct, legally and ethically.
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- w The present motion is unsound because it ignores realities. Suppose inspection of the documents in a given case should expose the commission of a criminal offense; or suppose the revelation should unearth a criminal scheme; and suppose the committed or the planned offense to be wholly foreign to the object for which the records have-been requisitioned. Is the Govern-ment attorney to clost his eyes to the disclosure or forswear his duty to enforce the law? To ob-tain the consent of the court before acting would, by delay or signal, thwart apprehension or prosecution of the accused.
The Court went on to observe that: <
1 The attorneys would know the papers' content; their right and their duty would enjoin them to use that knowledge in the public interest.
United States v. Wallace & Tierman Co., 1949, 336 U.S. 793, 799, 69 S.Ct. 824, 93 L.Ed. 1042.
To hold that the Government may avail itself of j l the memory of its attorneys, but it cannot i retain the same information in the form of copies of the papers, would be an absurdity.
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l These princi,.es apply with equal force to the instant situ-ation of documents obtained in a Civil Investigative Demand
, investigation which have direct relevance and probative value with recpect to allegations of anticompetitive conduct in a proceeding before the Nuclear Regulatory Commission. Indeed, here the Department does not seek to directly use documents obtain'ed pursuant to a Civil Investigative Demand. We seek i
merely to have documents produced pursuant to a Commission
! subpoena after we have demenstrated that such documents are relevant and that their production will not result in a l -burden on Applicants.
For the foregoing reascns, the Department requests 1
that the attached subpcena he issued and that the Licensing Board refuse to quash or =cdify the subpoena shculd Applicants i request the Board to do so.
Respectfully submitted,
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n.__ s/. ~(_ . </. . . . . . _
STEVEN M. CHARNO
'^,y-<'< /
/ lt u: 8 MELVIN G. SERGER
?y? Y- f. lh bu :,-
URBAN gANETR.
October 31,.1975 9
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i UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION-BEFORE THE ATOMIC SAFETY ALD LICENSING BOARD In the Matter of )
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The Toledo Edison Company )
The Cleveland Electric Illuminating ) Docket No. 50-346A Company .
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(David-Besse Nuclear. Power Station) )
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The Cleveland Electric Illuminating ) Dccket Mos. 50-440A Conpany, et al. ) and 50-441A (Perry Plant, Units 1 and 2) )
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The Toledo Edison Company, et al. ) Docket Nos. 50-500A
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(Davis-Sesse Nuclear Power Station, ) and 50-501A Units 2 and 3) )
CERTIIICATE OF SERVICE I hereby certify that copies of APPLICATION OF TFE DCPART-MENT CF JUSTICE FOR A SUBPOENA TO THE CLEVELAND ELECTRIC ILLUMINATING COMPhNY have been served upon all of the parties listed on the attachment hereto by deposit in the United States mail, first class, airmail or bp hand delivery, this 31st day.
cf.Cctober, 1975.
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h.f~ V,./ u .*..' a.eca
- STEVEN M. CHARNO
.; Attorney, Antitrust Divison Department of Justice r
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ATTAC1*::EST Douglas Rigler, Esquire 7tndrew Popper, Esquire Chairman Benjamin H. Vogler, Esquire Atomic. Safety and Licensing Roy P. Lossy, Jr., Esquire Board- Office of the General Counsel-Foley, Lardner, Hollabaugh Nuclear Regulatory Commission
& Jacobs Washington, D.C. 20555 315 Connecticut Ave., N.W.
Washington,'D.C. 20006 Gerald Charnoff, Esquire Willian Bradford Raynolds, Esquire i
Ivan W Smith, Esquire Shaw, Pittman, Potts & Trowbridga
- Atomic Safety and Licensing 910 Seventeenth Street, N.W.
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Board Washington, D.C. 20006 Nuclear Regulatory Commission Washington, D.C. 20555 Lee C. Howley, Esquire j
Vice President & Concral Counsel The Cleveland Electric John M. Frysiak, Esquire Illuminating Company Atomic Safety and Licensing Post Of fico Bo>: 5000 Board Cleveland, Ohio 44101 Nuclear Regulatory Commission Washington, D.C. 20555 Donald H. Hauser, Esquire
' . Corporate Solicitor The Cleveland Electric Atomic Safety and Licensing Board Panel Illuminating Company Nuclear Regulatory Commission Post Office Box 50C0 Washington, D.C. 20555 Cleveland, Ohio 44101 i'
Frank W. Karas John Lansdale, Jr.., Esquirc
' Chicf, Public Proceedings Cox, Langford & Brcun Staff 21 Dupont Circle, N.W.
Office of the Secretary Washington, D.C. 20036 Nuclear Regulatory Commission 4 Washington, D.C. 20555 Chris Schraff, Esquire Gffice of Attorney General Abraham Braitman State'of Ohio t Office of Antitrust.and State House Columbus, Ohio 43215 Indomnity Nuclear Regulatory Commission Washington, D.C. 20555 Karen H. Adkins, Esquire Assistant Attorney General
. Herbert R..Whitting, Esquire Antitrust Section Robert D. Hart, Esquire 30 East Broad Street i Law Department 15th Ficor City Hall' Columbus, Ohio 43215 Cleveland, Ohio 44114
' Leslie Henry, Esquire Reuben Goldberg, Esquire Fuller, Henry, Hodge David-C. Hjelmfelt, Esquire & Snyder 1700 Pennsylvania Avenue, N.W. 300 Madison Avenue-Suite 550 Tclcdo, Ohio 43604 !
Washington, D.C. 20006 l l
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,o Therne A. Itayuha, Esquire Jacea B. Davis, Esquire 0:.io ;;di.sen Cc' Fny Rchart D. II r.-t , Psquiro 47 ::crtl. Main S Lrcot Director of La./
Akron, Ohio 44308 City of Cleveland 213 City Hall David M. Olds, Esquire Cleveland, Ohio 44114 Recd, Smith, Shaw & McClay 747 Union Trust Building Lee A.Rau, Esquire Fittsburgh, Pennsylvania 15219 Joseph A. Rieser, Jr., Esquire nted, Faith Shmt & McClay Mr. Raymond Euduhis Suite 404 Director of Utilities Madison Building City of Cleveland Washington, D.C. 20005 1201 Lakeside I. venue Cleveland, Ohio 44114 William S. Lerach, Esquire Reed, Smith Shau & McClay Wallace L. Duncan, Esquira 747 Union Trust Building Jon T. Brown, Esquire Post Of fice Ec:- 2009 Duncan, Brown, Kninberg Pittsburgh, Pennsylvania 15230
& Palmar 1700 Pennsylvania Avenue, !! . U . Michael M. Briley, Esquire Washington, D.C. 20006 geger p. Klee, Esquire Fuller, Henry, Hedge & Snydar Edward A. Matto, Esquire 300 Madison Avanue Assistant Attorney Gcneral Toledo, Ohio 43604 Chief,.%ntitrust Section 30 East Broad Street 15th Floor Columbus, Ohio 43215 Richard M. Firestone Assistant Attorney General Antitrust Section 30 East Broad Street 15th Floor Columbus. Ohio 43215 Victor F. Greenslade, Jr., Esquire Principal Staff Counsel The Cleveland Electric Illuminating Ccmpany Post Office Box 5000 Cleveland, Ohio 44101 Robert P. Mone, Esquire George, Greek, King, McMahon
& McConnaughey .
Columbus Center 100 East Broad Street Columbus, Ohio 43215
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