ML19329D095
| ML19329D095 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 03/01/1977 |
| From: | Du Flo M, Duflo M Atomic Safety and Licensing Board Panel |
| To: | |
| References | |
| ALAB-378, NUDOCS 8002240086 | |
| Download: ML19329D095 (16) | |
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UNITED STATES OF AMERICA 9
g NUCLEAR REGULATORY COMMISSION q
gly {0 ATOMIC SAFETY AND LICENSING APPEAL BOARD Alan S. Rosenthal, Chaiman t
Y M '
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Richard S. Salzman Jerome E. Sharfman S
N
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In the Matter of
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THE TOLEDO EDISON COMPANY and
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Docket Nos. 50-346A THE CLEVELAND ELECTRIC
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50-500A ILLUMINATING COMPANY
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50-501A
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(Davis-Besse Nuclear Power S tation,
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Units 1, 2& 3)
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THE CLEVELAUD ELECTRIC
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Docket Nos. 50-440A ILLUMINATING COMPANY, et al.
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50-441A
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(Perry Nuclear Power Plant,
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Units 1 and 2)
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Messrs. Malcolm C. Douglas, Acting Director of Law, and Robert D.
Hart, 1st Assistant Director of Law, Cleveland, Ohio, for the City of Cleveland.
Mr. Michael R.
Gallagher, Cleveland, Ohio, for Squi e, Sanders & Dempsey.
Messrs. Joseph Rutberg and Michael B.
Blume for the Nuclear Regulatory Commission staff.
DECISION March 1, 1977 (ALAB-378)
Opinion of the Board by Mr. Rosenthal, in wh'ich Messrs. Salzman and Sharfman join:
Coming before us for a second time is the attempt of the City of Cleveland, founded upon 10 CFR 2.713(c), to 8002 240 08b M
. disqualify the law firm of Squire, Sanders and Dempsey from representing the Cleveland Electric Illuminating Company in this antitrust proceeding.
On the previous occasion, we were confronted with an order by the Licensing Board con-ducting the antitrust proceeding (the " Antitrust Board")
which had directed the disqualification of the law firm.
This order had been entered notwithstanding the contrary conclusion on the disqualification question reached by a differently constituted special Licensing Board (the "Special Board"), convened under Section 2.713(c) for the express purpose of considering whether the charges preferred by the City against the law firm were meritorious and warranted the firm's suspension from the proceeding.
Following our review of the matter, we held that, in cases such as this, Section 2.713(c) requires the special board to decide the disqualification matter in its entirety, "the initial board's function thereafter (being] limited to the carrying out of the ministerial duty of promptly entering an order giving effect to the special board's decision."
ALAB-332, NRCI-76/6 785, 794 (June 11, 1976).
We went on to conclude, how-ever, that the determination of the Special Board in this
. instance was in'fected with errors of law and, further, that the law firm was entitled to an evidentiary hearing before i
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that Board.
Id. at 794-802. -Accordingly, we remanded the case to the Special Board for further proceedings consistent with the views expressed by us.
What is now at issue is an order by the Special Board on the remand, granting by a divided vote the motion of the law firm to dismiss the disqualification proceeding on the ground of collateral estoppel.
LBP-76-40, NRCI-76/ll 561 (November 5, 1976). bI For its basis, the motion had relied upon a district court decision, after an evidentiary hearing, rejecting Cleveland's endeavor to disqualify Sauire, Sanders and Dempsey from representing the Cleveland Electric Illuminating Company in a civil antitrust proceeding in that court which had'been instituted by the City against that utility and others in 1975.
City of Cleveland v. The Cleveland Electric Illuminating Co., Civil Action No. C75-560 (N. D. Ohio, August 3, 1976).
Agreeing with the law firm
-that a party in an administrative proceeding may be estopped from relitigating issues decided adversely to it in a judi-cial proceeding, the Special Board then determined that the decision of the district court addressed and resolved the
_1/ As required by ALAB-332, the Antitrust Board gave auto-matic effect to the Special Board's action in a brief unpublished order entered on November 23, 1976.
w,...
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. the same basic issue as was raised by the City in seeking the firm's disqualification from our antitrust proceeding.
On a full consideration of the papers submitted to us in support of and in opposition to the appeal taken by the s City from both the Special Board's order and the order of the Antitrust Board giving effect thereto, 2/ we affirm.
Because, however, we have been told that the district court's decision is now pending before the Court of Appeals for the Sixth Circuit on the City's appeal, we are retain-ing jurisdiction over the matter.
Should the Sixth Circuit reverse, vacate or significantly modify the district court's ruling, within thirty days thereafter the City may file a motion with us requesting such relief as it may deem
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appropriate in light of that development.
Cf. Occidental Life Ins. Co. v. Nichols, 216 F.2d 839 (5th Cir. 1954);
Ray v. Hasley, 214 F.2d 366, 368-69 (5th Cir. 1954); Walz
- v. Agricultural Ins. Co. 282 Fed. 646, 649 (E.D. Mich. 1922).
A.
The essential ingredients of the doctrine of col-lateral estoppel are well-established and, having been 2/ We have also scrutinized with care the 41 page decision of the district court, which was appended to the law finn's August 6,1976 motion seeking a temporary stay of further discovery.
, accurately summarized by the Special Board (NRCI-76/ll at 565), need not be rehearsed at length here.
Suffice it to say that the doctrine precludes the relitigation of issues of law or fact which have been finally adjudicated by a tribunal of competent jurisdiction in a proceeding involving the same parties or their privies.
Alabama Power Co. (Joseph M.
Farley Nuclear Plant, Units 1 and 2),
ALAB-182, 7 AEC 210, 212-13, remanded on other grounds, CLI-74-12, 7 AEC 203 (1974). 3/
It is equally settled that collateral estoppel is as applicable in administrative adjudicatory proceedings as it is in the judicial arena.
Id. at 214, citing, inter alia, United States v. Utah Construction and Mining Co.,
384 U.S.
394, 421-22 (1966).
Further, as a general matter, a judicial decision is entitled to precisely the same col-lateral estoppel effect in a later administrative proceed-ing as it would be accorded in a subsequent judicial pro-ceeding.
2 Davis, Administrative: Law Treatise, E18.11 at p.
619 (1958), citing Lentin v. Commissioner, 226 F.2d 695 (7th Cir. 1955), certiorari denied, 350 U.S. 934 (1956).
_3/ In recent years, however, the courts have shown a tendency to retreat frcm the requirement of mutuality in certain circumstances.
See,e.g., Blonder-Tongue Laboratories
- v. University of Illinois Foundation, 402 U.S.
313 (1971).
_ It is quite true that "when the legislative intent is to vest primary power to make particular determinations concerning a subject matter in a particular agency, a court's decision concerning that subject matter may be without binding effect upon that agency."
2 Davis, supra, 518.12 at pp. 627-28.
Cf. United States v. Radio Corpora-tion of America, 358 U.S. 334, 347-52 (1959).
We agree, however, with the majority of the Special Board (NRCI-76/ll at 566) that that principle does not come into play in this case.
At bottom, the issue on the merits before the Special Board was whether, essentially by reason of its prior representation of the City in connection with muni-cipal bond matters, the law firm should be precluded from now representing the City's adversary in an antitrust pro-ceeding.
We discern no legislative purpose that this Commission resolve such an issue independently of a court's resolution of the same issue in an antitrust proceeding before it involving the same parties.
Nor do we subscribe to the belief of the dissenting member of the Special Board that the application of collat-eral estoppel in this case would constitute an unwarranted intrusion into the ability of the Commission to control its internal proceedings and, as such, would be contrary to
_ public policy.
NRCI-76/ll at 570.
That line of reasoninq might well have had force were the Special Board here con-cerned with the manner in which the law firm had conducted itself during the course of our antitrust proceeding.
Assuredly, the Commission's adjudicatory boards must be free to take appropriate measures -- including debarment from a proceeding -- against any counsel whose actions threaten the orderly and proper course of the proceeding, whether or not like conduct by the same counsel has been deemed cause for disciplinary action in a related judicial proceeding.
And, conceivably, there may be other types of situations in which it would be important for the Commis-sion to reserve to itself decision in a proceeding involving allegations of unethical conduct by attorneys practicing before it.
But it is difficult to fathom why the Commis-sion's ability "to control its internal proceedings" would be imperiled to any material extent were collateral estoppel effect accorded to a judicial determination respecting whether the Code of Professional Responsibility permits a law firm to represent a particular client in specified 4
circumstances.--/
_4/ The foregoing discussion should not be taken to mean that this Commission is authorized to disqualify an attorney only for unprofessional conduct directly (FOOTNOTE CONTINUED ON NEXT PAGE) l i
. B.
Having thus concluded that the doctrine of collateral estoppel is applicable in a Section 2.713(c) proceeding such as that at bar, we now turn to consider whether the Special Board was right in its determination that all of the preconditions to its application are present in this instance.
We answer this question in the affirm-ative.
Our reading of the district court's August 3, 1976 decision in City of Cleveland v. The Cleveland Electric Illuminating Co., supra, leaves us in no doubt that the issue there considered and decided (after the evidentiary hearing in which boththe City and Squire, Sanders and Dempsey participated) is precisely that which the Special Board had before it.
To repeat, that common issue is whether the Code of Professional Responsibility interdicts Squire, Sanders and Dempsey's representation of the Cleveland Electric Illuminating Company in now on-going antitrust proceedings 4/ (FOOTNOTE CONTINUED FROM PREVIOUS PAGE) interfering with the course of our own proceedings.
Indeed, in ALAB-332, supra, we considered and explicitly rejected an earlier holding to that effect by the Special Board (as then constituted).
See NRCI-76/6 at 794-96.
What we are concerned with here is not whether 10 CFR 2.713(c) reaches the violation of the Code of Professional Responsibility asserted by the City but, rather, with the entirely differer.t question whether the determination of the district court adverse to the City is to be given collateral estoppel effect.
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. by reason of the firm's prior representation of another and adverse party to those proceedings (the City) in con-nection with different matters.
It is, of course, of no present moment whether the court properly decided the issue; i.e., whether its find-ings of fact and conclusions of law were well-founded.
Nor is it pivotal whether, as the City maintains, the court erred in its rulings on discovery matters.
As the doctrine of collateral estoppel has been formulated, its applica-l tion does not hinge upon a demonstration that the decision of the first tribunal, as well as all of its interlocutory rulings, were correct; it is enough that that tribunal had jurisdiction to render the decision. 5/ 1B Moore's Federal
_5/ It might be noted that, although the City strenuously insists that the district court committed various errors, there is no claim that those errors amounted to a denial of due process.
Rather, the City's sole assertion of a deprivation of due process is advanced in the context of the dismissal of the proceeding before f
the Special Board on collateral est'oppel grounds.
The City apparently reasons that that dismissal stripped l
it of procedural rights (such as discovery and a full l
evidentiary hearing) guaranteed by our decision in i
ALAB-332.
The City is mistaken.
The portion of ALAB-332 relied upon was addressed to the procedures to be followed by the Special Board on the then-justified assumption that that Board would be called upon to decide the disqualification matter on the merits.
Nothing in our earlier opinion can be reasonably con-strued as conferring any vested right to an eviden-tiary hearing in the event that, because of the occurrence of new developments, Special Board consider-ation of the merits of the controversy should become inappropriate as a matter of law.
- Practice, Pars. 0.405[1] and [4.-1] at p.
629 and pp. 634-37 (2nd ed.'1974), and cases there cited.
In any event, as previously noted, the City has appealed the district court's decision to the Sixth Circuit; should that appeal prove successful, the City will be in a position to ask that it be relieved of the estoppel created by the district court's decision.
Finally, the City's contrary view notwithstanding, it is irrelevant that the NRC staff and the Department of Justice are parties to our antitrust proceeding but not to the district court proceeding.
With respect to res judicata,
"* *
- it is no objection that the former action included parties not joined in the present action, or vice versa, so long as the judgment was rendered on the merits, the cause of action was the same and the party against whom the doctrine is asserted was a party to the former litigation".
Dreyfus v. First National Bank of Chicago, 424 F.2d 1171, 1175 (7th Cir.), certiorari denied, 400 U.S.
832 (1970);
Hummel v. Equitable Assur. Soc., 151 F.2d 994, 996 (7th Cir.
1945).
There is no readily apparent reason why a different principle should obtain where collateral estoppel is involved.
Thus, irrespective of whether the staff and the Department of Justice might be deemed parties to the
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. disqualification matter because it arises out of the anti-trust proceeding, I! the district court's decision is fully binding upon the City.-7/
For the foregoing reasons, the November 5, 1976 deci-sion of the Special Board, and the November 23, 1976 order of the Antitrust Board entered on the basis of that decision,
--6/ The staff, but not the Department, has involved itself in the disqualification matter,
_7/ Although the NRC staff joins the law firm in urging af firmance of the result reached by the Special Board, it does not agree with the totality of that Board's reasoning.
In essence, the staff's position is that (1) we held in Parley, ALAB-182, supra, that the appli-cation of collateral estoppel is a matter of discretion insofar as an administrative agency is concerned; (2) in the circumstances here, collateral estoppel should not be applied with respect to the " ultimate question of disqualification" but, rather, only with respect to the crucial findings of fact made by the district court; and (3) on the facts as found by that court, the legal conclusion perforce follows that the law firm should not be disqualified.
We cannot accept this analysis.
In the first place, nothing said by us in Farley suggests that, absent overriding competing public policy considerations (and here none has been shown), an administrative agency is-free to withhold the application of collateral estoppel as a discretionary matter.
Secondly, the staff cites no authority for its seeming belief that, for collateral estoppel purposes, a distinction is to be drawn between issues of fact and issues of law.
The prevailing view would appear to be otherwise: if the doctrine comes into play at all in the particular case, it reaches previously adjudicated factual and legal questions alike.
See,e.g.,Safir v. Gibson, 432 F.2d 137, 142-43 (2nd Cir., Friendly J.),
certiorari denied, 400 U.S. 850 and 942 (1970).
1
. are affirmed.
This Board shall, however, retain jurisdic-tion over the disqualification matter pending the decision of the Court of Appeals for the Sixth Circuit on the appeal taken by the City of Cleveland from the August 3, 1976 decision of the District Court for the Northern District of Ohio in City of Cleveland v. The Cleveland Electric Illuminating.Co., supra.
Within thirty days of its rendi-tion, the City may bring the Sixth Circuit's decision to our attention and, in connection therewith, apply for such relief as may seem appropriate in light of that decision.
In the absence of such an application within the prescribed period, this Board's jurisdiction over the disqualification proceeding shall terminate automatically without our further order.
It is so ORDERED.
FOR THE ATOMIC SAFETY AND LICENSING APPEAL BOARD s', _s a i y Y f N(.
-]( ',
Margaret E.
Du Flo Secretary to the l
Appeal Board l
(-
i m
4
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I UNITED STATES OF A> ERICA
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NUCLEAR REGULATORY COSC11SSION l
In the Matter of
)
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THE TOLEDO EDISON COMPANY, ET AL.)
Docket No.(s) 50-346A CLEVELAND ELECTRIC ILLLTMINATING )
50-440A COMPANY
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50-441A
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50-500A (Davis-Besse Nuclear Power
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50-501A
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Station, Unit No. 1; Perry
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Nuclear Power Plant, Units 1&2))
CERTIFICATE OF SERVICE I
I hereby certify that I have this day served the foregoing document (s),
upon each person designated on the official service' list compiled by the Of fice of the Secretary of the Commission in this proceeding in accordance uith the requirements of Section 2.712 of 10 CFR Parc 2 -
Rules of Practice, of the Nuclear Regulatory Commission's Rules and Regulations.
I C. this l
Date!6d at Washington,f/l ///h 197 Y,
day of OfficeoftheSecretaryoftheCymmission fl-dj
'h $4fAM & d 2f 77 s
s-J,&& dht 3 //77 Okd6 -376 6
ON
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i UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION In the Matter of
)
)-
{
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Docket No.(s) 50-346A 1
(Davis;Besse Unit 1)
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CLEVELAND ELECTRIC ILLUMINATING
)
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50-441A (Perry Units 1 and 2)
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50-500A (Davis-Besse Units 2 and 3)
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50-501A SERVICE LIST Douglas Rigler, Esq., Chairman Joseph Rutberg, Esq.
i Foley, Lardner, Hollabaugh & Jacobs Antitrust Counsel 815 Connecticut Avenue, N. W.
Counsel for NRC Staff Washington, D. C.
20006 U. S. Nuclear Regulatory Commission Washington', D. C.
20555 Ivan W. Smith, Esq.
. Office of Antitrust & Indemnity Atomic Safety and Licensing Beard Office of Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission U. S. Nuclear Regulatory Commission Washington, D.
C.
20555 Washington, D. C.
20555 John M. Frysiak, Esq.
Benjamin H. Vogler, Esq.
Atomic Safety and Licensing Board Roy P. Lessy, Jr., Esq.
U. S. Nuclear Regulatory Commission Antitrust Counsel Washington, D. C.
20555 counsel for NRC Staff U. S. Nuclear Regulatory Commission Alan S. Rosenthal, Esq., Chairman Washington, D. C.
20555 Atomic Safety and Licensing Appeal Board Donald H. Hauser, Esq.
U. S. Nuclear Regulatory Commission Victor F. Greenslade, Jr., Esq.
Washington, D. C.
205,55
. Cleveland Electric Illuminating Company P. O. Box 5000 Atomic Safety and Licensing Appeal Cleveland, Ohio 44101 Board U. S. Nuclear Regulatory Commission Joseph J. Saunders, Esq., Chief Washington, D. C.
20555 Public Counsel and Legislative Section Richard R. Salzman, Esq.
Antitrust Division Atomic Safety and Licensing Appdal U. S. Department of Justice Board Washington, D. C.
20530 U. S. Nuclear Regulatory Commission l
Washington, D. C.
20555 l
a
l 50-346A, -440A, -441A, -500A, -501A p gs 2 e
-s Gerald Charnoff, Esq.
Honorable Edward A. Matto Shaw, Pittman, Potts, Trowbridge Assistant Attorney General and Madden Chief, Antitrust Section 910 -17th Street, N. W.
30 East Broad Street, 15th Floor Washington, D. C.
20006 Columbus, Ohio 43215 Lee C. Howley, Esq., Vice President Honorable Deborah P. Highsmith and General Counsel Assistant Attorney General Cleveland Electric Illuminating Antitrust Section Company 30 East Broad Street, 15th Floor P. O. Box 5000 Columbus,Chio 43215 Cleveland, Ohio 44101
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Michael R. Gallagher, Esq.
David C. Hjelmfelt, Esq.
Gallagher, Sharp, Fulton, j
M!itaal 01dak, Esq.
I Norman and Mollison l
i?t0 Pennsylvania AJanue, N. W.
630 Bulkley Building Washington, D. C.
20006 Cleveland, Ohio 44115 Reuben Coldberg, Esq.
Duncan, Brown, Weinberg & Palace Arnold Fieldman, Esq.
1700 Pennsylvania Avenue, N W.
1700 Pennsylvania Avenue, N. W.
Washington, D. C.
20006 Washington, D. C.
20006 John Lansdale. Jr., Esq.
Steven M. Charno, Esq.
Cox, Langford & Brown Melvin G. Berger, Esq.
21 Dupont Circle. N. W.
Antitrust Division Washington, D. C.
20036 U. S. Department of Justice
{
Washington, D. C.
20530 Leslie Henry, Esq.
W. Snyder, Esq.
Honorable Thomas E. Kauper Fuller, Henry, Hodge & Snyder Assistant Attorney General 300 Madison Avenue Antitrust Division Toledo, Ohio 43604 U. S. Department of Justice Washington, D. C.
20530 Mr. George B. Crosby Director of Utilities John C. Engle, President Piqua, Ohio 45350 AMP-0, Inc.
Municipal Building William M. Lewis, Jr.
20 High Street W. M. Lewis & Associates Hamilton, Ohio 45012 P. O. Box 1383 Portsmouth, Ohio 45662 Honorable Richard M. Firestone Assistant Attorney General Robert D. Hart, Esq.
Antitrust Section Assistant Law Director 30 East Broad Street, 15th Floor City Hall Columbus, Ohio 43215 Cleveland, Ohio 44114 Honorable William J. Brown Anthony G. Aiuvalasit, Jr., Esq.
Attorney General Antitrust Division State of Ohio Department of Justice Columbus, Ohio 43215 P. O. Box 7513 Washington, D. C.
20044
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50-346A, -440A, -441A, -500A, -501A Pcg2 3 Susan B. Cyphert, Esq.
Joseph A. Rieser, Jr., Esq.
Antitrust Division Lee A. Rau, Esq.
Department of Justice Reed, Smith, Shaw & McClay i
727 New Federal Building Madison Building, Suite 404 2140 East Ninth Street Washington, D. C.
20005 l
Cleveland, Ohio 44199 i
i Terence H. Benbow, Esq.
l David M. Olds, Esq.
A. Edward Grashof, Esq.
Reed, Smith, Shaw and McClay Winthrop, Stimson, Putnam P. O. Box 2009 and Roberts l
Pittsburgh, Pennsylvania 15230 40 Wall Street New York, New York 10005 Thomas A. Kayuha, Esq.
47 North Main Street Akron, Ohio 44308 Janet R. Urban, $sq.
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Antitrust Division Perry Public Library Department of Justice 3753 Main Street Washington, D. C.
20530 Perry, Ohio 44081 Director Ida Rupp Public Library 301 Madison Street Port Clinton, Ohio 43452 f
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