ML19329D241
| ML19329D241 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 10/15/1976 |
| From: | Lazo R Atomic Safety and Licensing Board Panel |
| To: | |
| References | |
| NUDOCS 8002260817 | |
| Download: ML19329D241 (91) | |
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I 68 C 2 l'] G'l - 1 U iITED STATES OF A" ERICA
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. NUCLEAR REGULATORY CC"l:ISSION 3
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4 In the matter of:
5 TIIE TOLEDO EDISON COffPANY Docket Mos. 50-346A and 50-500A 6
THE CLEVELN!D ELECTRIC 50-501A h
, ILLUMINATING CO!iPANY I
7 (Davis-Desse !!uclear Pouer Station, :
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Units 1, 2 and 3) 9 TIIE CLEVELAND ELECTRIC Docket Nos. 50-440A ILLU!!INATING COI'PANY, et al.
50-441A 10
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(Perry Nuclear Pouer Plant, 11 Units 1 and 2) 12
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i3 rifth r1oor trearine Room, East-West Towers, 14 4350 East-Fest IIighway, Bethesda, Maryland.
15 Friday, 15 October 1976 16 Oral argur.ent in the above entitled matter 17 o.
was had, pursuant to notice, beginning at 11:00 a.m.
18 BEFORE:
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39 ROBERT M.
LAZO, Esq., Chairman 20 Atomic Safety and Licensing Special Board 21 DANIEL IIEAD, Esq., Member 22 ANDREU C'. GOODIIOPE, Esq., Member.
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23 APPEARANCES:
Q 'erel Reporters, Inc.
24 (As heretofore noted.)
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3 S, quire, Sanders and Dempsey, 4
by Michael R. Gallagher, Esq.
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City of Cleveland, o
6 by James B. Davis, Esq.
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7 Nuclear Regulatory Commission
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8 by Jack R. Goldberg, Esq.
114 9
Applicants, 10 by William Bradford Reynolds, Esq.
134 II Rebuttal Argument on Behalf of:
12 Squire, Sanders and Dempsey,
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14 City of Cleveland, x_
15 by James B. Davis, Esq.
152 16 Applicants, 17 by William Bradford Reynolds, Esq.
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P,R O,C_ E_ E_ D_ I_ N_ G,S h
2 CH,AIPliAN LAZO:
We will be hearing cral argument 3
today to aid this Special Licensing Board' consideration of 4
the motion filed by Squire, Sanders and Dempsey to dismiss 5
the proceeding.
This Special Board has been established 6
pursuant to the provisions of Section 2.713 of the Commission' s j
7 Rules of Practice to rule on the motion of the City of 8
Cleveland to disqualify the law firm of Squire, Sanders and 9
Dempsey from further participation as counsel for the 10 Cleveland Electric Illuminating Company in the on-goi'ng anti-11 trust proceeding, identified as in the matter of The Toledo 12 Edison Company, et al. (Davis-Besse Nuclear Power' Station',
13 Units 1, 2 and 3), and The Cleveland Electric Illuminating O.
14 Company, et al. (Perry Nuclear Power Station, Units 1 and 2).
15 Argument will address the motion of Squire,
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16 Sanders and Dempsey to dismiss the disqualification proceed-17 ing, as well as the answers which have been filed by the 18 other parties.
19 Now the Board's order calling for oral argument 20 did not establish a firm time schedule, but I believe it was 21 generally agreed during our conference call of October 5th 22 that 30 minutes would probably be adequate for both of the t
23 real parties in interest.
Accordingly the order and the time v
24 for argument will be as follows:
C deral Reporters. Inc.
L 25 The law firm, Squire, Sanders and Dempsey, 30 g
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71 theCit'yofCleveland,30 minutes;tdeNRC. Staff, eb2 I
minutes; 2
15 minutes; and,the Applicants, 15, minutes.
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'The Board may call for very brief rebuttal if we
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find it necessary, and should that be the case, the order S
will be the same as the original presentation.
6 Now as a first order of business, would the 7
attorneys arguing today plekse identify themselves and their 8
clients for the record?
9
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MR. GALLAGHER:
May it please the.: Board, I'm 10 Michael R. Gallagher and I represent the law firm of Squi're, II Sanders and Dempsey in this matter before the Board.
I2 CHAIR *4AN LAZO:
Thank you, Mr. Gallagher.-
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13 MR. DAVIS:
My name is James B. Davis.
14 the Cleveland firm of Hahn, Loeser, and I'm acting h
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15 Special Counsel'for the-City of Cleveland today.
16 MR. GOLDBERG:
My name is Jack R. Goldberg.
I'm I7 counsel for the NRC Staff.
-t I8 MR. REYNOLDS:
I am William Bradford Reynolds, l9
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with Shaw, Pittman, Potts and Trowbridge, and I'm appearing 20 today on behalf of the five Applicants who are involved in 2I the antitrust proceeding.
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22
. CHAIRMAN LAZO:
Thank you, Mr. Reynolds.
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23 Mr. Gallagher, following the receipt of answers
{ *wol Reporters, Inc.to your motion you filed a memorandum in response to the 24 l v g3 answers filed by two of the parties with a motion that it s
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be accepted instanter.
2 At'the time of our conference call I believe that 3
Mr. Davis had not yet received a copy of that memorandum and c.
4 we did not rule on whether or not the motion would be 5
accepted.
6 As you are aware, Section 2.730 of our Rule,s of N
7 Practice provide that such replies will not be accepted
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8 unless the Presidiitg Officer rules that they should be.
9 Are you still urging that the Board accept the 10 motion?
N II MR. GALLAGHER:
I am, Chairman Lazo; I believe it 12 compresses in rather short order our argument succinctly-13 with respect to new matters raised in the answers, and it
,p 14 will certainly permit me to' argue today well within the time 15 frame that the Board suggests.
16
. CHAIRMAN LAZO:
Do any of the other parties wish I7 to file a response to the reply memorandum?-
o Mr. Davis?
MR. DAVIS:
No, sir.
CHAIRMAN LAZO:
Well, we will accept it.
21 Mr. Davis, if the time for argument for the City 22 should be enlarged in order for you to address the reply 23 memorandum, we would be certainly willing to do that if you
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24 require additional. time.
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25 MR. DAVIS:
I appreciate that.
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CHAIR'4AN LAZO:
Very well.
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Would you proceed, please, Mr. Gallagher?
3 ORAL ARGUMENT ON BEHALF OF SQUAIRE, SANDERS 4
AND DEMPSEY 5
by Michael R. Gallagher, Esq.
6 MR. GALLAGHER:
May it please the Board, Mr. Davis, 7
Mr. Goldberg, Mr. Reynolds:
8 We are here this morning to consider the motion of
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9 Squire, Sanders and D'empsey to dismiss the, disqualification 10 proceedings based upon the principles of collateral estoppel II which preclude relitigation of issues already determined in I2 a prior action.
In this particular case the prior action was fi i
d' 13 that of an antitrust case before Judge Robert Krupansky in
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14 the United States District Court for the Northern District of 9
15 Ohio, Eastern Division, in Cleveland, Ohio.
16 There can be no serious dispute that the elements 17 of collateral estoppel have been met here.
There was prior 18 litigation; it was between the parties.
The City has argued I9 in its answer that Squire, Sanders and Dempsey is not in fact 20 a party.
This is denied by all the papers which have been 21 filed in this case and by treatment of the respective bodies.
22 The Licensing Board refers to Squire, Sanders and 23 Dempsey as a party in its original opinion; it is referred 24 to as a party by the Appeal Board.
Judge upansky in his Weral steporters, Inc.
opinion, devotes tWo or three pa'ges to describing the parties.
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Ee describes the Cit and then at great length describes 2
Squire, Sanders and Dempsey.
3 It has been suggested by the City that collateIcal r
4 estoppel does not apply to disqualification matters or to 5
disbarment matters, and cites a number of cases which so hold.
6 An examination of those cases disclosed quite clearly that z-7 they went off on the ground that there was not a mutuality 1.
8 of parties; the parties were not the same.
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9 And under the circumstances, the key element of 10 collateral estoppel' was not present.
In fact, any question II on that is set to rest in the case of ex parte McCu decided.
12 by the California Supreme Court and cited in our reply brief. -
h 13 In that case it was specifically held that the ruling of 14 the Montana Supreme Court disbarring an attorney did bind all 15 ofthe parties to that hearing.
16 The second element is that the prior matter be; II before a court of competent jurisdiction. We need' not dally IO on this point.
Certainly the District Court for the Northern 19 f
District of Ohio is a court of competent jurisdiction.
- Indeed, 20 many of the cases discussing disqualification address the 2I fact that the District Court is preeminently the tribunal 22 to consider'these questions.
l V 23 MR. HEAD:
Before you leave the first point on the 24 nature of the proceeding, is there any authority that you was n. port.rs. inc.
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l have uncovered that would indicate that the power to
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disqualify someone from practice, either before a court er 2
before an administrative body such as the NRC, is something 3
that is, you might say, personal to the ageticy or to the G
4 court?
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I would raise that question in the context of
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suppose the judge had ruled the other way in the lawsuit in 7
Cleveland, would we then be in the pos~ition of having to
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8 disqualify the law firm without giving it a hearing?
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9 MR. GALLAGHER:
I think :you would be f aced with 10 the same question and we would be down here arguing it.
I'm Il not prepared to say that collateral estoppel requires 12 complete mutuality..
Indeed, I suspect there are instances p: -
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13 where it does not.
- Ib 14 As respects the question of whether it may be.a
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15 matter personal tothe agency or to the District Court, on 16 that I suppose it might differ under certain circumstances.
17 For example, here the Licensing Board said that as respects 18 Squire, Sanders and Dempsey's conduct before it, it was 19 exemplary.
It's specifically stated in its initial opinion.,
20 The conduct here, however, is not before the 21 specific agency and was not their conduct immediately before 22 the court, but was as respects matters between clients out-U, 23 side of the presence of the court.
f{g 24 MR. HEAD:
Does the nature of the conduct then v jerti Reporters, Inc.
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have a bearing on whether or not, collateral estoppel would
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apply?
Is that the thrust of your argument?
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2 MR.. GALLAGHER:
No, it is not the thrust of my I
3 argument.
What I'm attempting to say is that I'm not pre-G 4
pared to give a total answer to it.
I say in this particular 5
case that collateral estoppel clearly would apply because o
6 the charrcter of the conduct was such that it required the' 4
7 adducing of evidence by witnesses before a tribunal and the 8
litigation of that precise issue and the determination by
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9 that court.
10 MR. HEADE But you do draw a distinction between Il conduct that actually occurred before a particular tribunal 12 as opposed to conduct that is outside of either tribunal?
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13 MR. GALLAGHER:
I can see where such a distinction s
I4 might be drawn under certain circumstances..
15 MR. HEAD:
But there is no authority that has dealt I0 with the situation?
I7 MR. GALLAGHER:
I find no authority.
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I8 MR. HEAD:
Thank you.
I9 MR. GALLAGHER:
The next element is that of a judg1 20 ment which is a final judgment and as respects it, the cases 21 are clear that finality there is the kind of finality that 22 is associated vith a judgment that makes it muenable to appeal.
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23 The fact that a judgment may be appealed does not lessen its
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25 judgment for the purposes of collateral estoppel.
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This is perfectly clear in all the federal cases
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we have found that relate to the subject, and also the state v
3 cases as well.
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4 Finally, the last element is that the prior judg-5 ment actually litigated and determined the issues in contro-
.,3 6
versy in the second judgment.
And as respects l'. I think, 7
without belaboring the point, a careful ~ examination of Judge 8
Krupansky's opinion and order clearly establishes that the 9
issues in both matters are the same.
10 The authorities, moreover, are clear that collatera.L II estoppel relates to administrative proceedings.
We have s
12 cited in our brief a number of cases which dealt with a
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variety of administrative bodies that so held.
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14 MR. HEAD:
Excuse me again, Mr. Gallagher, but 15 before you leave the finality point, I'd like to inquire 16 into, first of all, is the ruling with regard to disqualifi-I7 cation made by the Judge currently on appeal?
It is currently,on appeal; that's I9 g
correct.
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20 MR. HEAD:
All right. ~
21
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.Also, we of course have heard that there is a 22 proposed sale of MELP to CEI.
Is there a settlement of the s
V 23 lawsuit before Judge Krupansky pending because of that sale?
24 l(7),
MR. GALLAGHER:
It is my understanding that if b stol Reporters, Inc.
25 the sale is consummated that this will include a settlement m
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eb9 of all differences among the parties.
MR '. HEAD:
Would the fact of that settlement being 3
pending -- does that af fect the finality in any manner for O
4 our purposes, or at least maybe not legally but from 'a 5
practical standpoint should we act?
MR. GALLAGHER:
It does not affect the finality 7
from the point of view of collateral estoppel.
As respects 8
it, that is. final.
You are bound by it.
9 It does affect your judgment as respects the 10 suggestion of the Staff that af ter you grant the motion of 11 dismissal that you stay it, and I frankly intend to spend 12 most of my argument today addressing myself to'this question
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q of stay.
14 Now as to that particular point, it becomes 15
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critical because an essential element as to whether a stay 16 is granted is whether a reversal of the lower court is likely 17 or not.
18 Now here my argument will be, when I get, to it, 19 that it not only is unlikely, not only is it probable, 20 overwhelmingly probable that the case will not be reversed 21 but you have to add to that on the balance that,there is a 22 strong probability that the City will abandon that appeal in the event that the sale is consummated.
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MR. HEAD:
What is the timing on the.Possible 2$
s consummation of the sale?
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MR. GALLAGHER:
Well, the Board of directors of
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2 the CEI approved the sale as broadly outlined in the agree-3 ment on, I believe, October.8, 1976, just ti. s past week.
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4 is then to go to the Council of the City of Cleveland and 5
the agreement provides that the Council of the City of 6
Cleveland is to give its approval on or before Nmrember 30th.
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7 There is a further provision tilat the transaction 8
will not then ultimately be concluded until January 10th, l
9 1977, so we look toward that time frame generally.
10 Now, I don't think this is engraved in stone and II certainly if counsel needs another week or two, why, I'm 12 certain the parties may work out some sort of an extension, g 13 to accommodate to that problem.
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L I4 MR. HEAD:
Of course, would, in.your opinion,,the 15 sale as far as oar disqualification proceeding go, would 16 that in effect have basically the same effect?
17 MR. GALLAGHER:
It would moot the qu,estion.
18 MR. HEAD:
it would moot the question, in your 19 opinion?
e 20 MR. gab
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Yes.
I 2I MR. HEAD:
All right.
Thank you.
22 MR. GOODHOPE:
Had the Judge found a conflict, \\
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i 23 Mr._Gallagher, and put you out of the case or put the law firm 24 O.-
out of the case, that would have been a final, appealable derd Reporters, Inc.
25 ruling.
It would not be interlocutory, would it not?
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80 cbil MR. GALLAGH2R:
The City would argue that, and they would be in a strong arguable position.
On the other hand, 3
I don't want this Board to believe that I would not argue 9
4 the contrary; I necessarily would as an advocate, and I would point to the fcct that the Federal District Court had before 6
it an unlimited time frame.
It could e.G aine the facts and circumstances and the evidence back into the early part of-8 the century but that the Nuclear Regulatory Commission limited 9
itself under its remoteness rule to 1965, 10 And so my argument might go something like this, 11 that even though the District Court may have found a conflict, that that conflict might arise from facts and circumstances
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pre-1965 and not post-1965, and under the circumstances, it 14
,2 was a different kind of picture.
15 So what I'm saying is I don't want to say at this 16 s
time I would not make that argument but I do indicate I have -
17 problems.
18 MR. GOODHOPE:
Thank you, Mr. Gallagher.,
19 0
Now with regard to what I asked you some months 20 ago when we were all here, I asked you if the issues in the 21 antitrust suit in the Federal District-Court were, identical 22 with the issues before the Board in the antitrust suit in the NRC.
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. ' 3,,,,,,,,,,,,,, inc, You stated you didn't want to say they were iden-25 tical.
Are you going to go into this in your argument?
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MR. GALLAGHER:
I'll respond right now if I may.
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2i MR. GOODHOPE:
All right.
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MR. GALLAGHER:
The issues are pre.isely identical
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4 and it's basically one issue.
There are a number of subsi-5 diary issues, but the issue as stated by the Licensing Board --
6 and I can quote from its opinion -- and the issue es stated 7 by the Appeal Board here is whether Squire, Sanders and 8! Dempsey conducted itself in accordance with the rules of the 9 United States courts.
That's the ultimate issue.
10 MR. GOODHOPE:
All right.
But I'm talking' about the 11 issue in the antitrust proceedings.
12 MR. GALLAGHER:
As to whether the underlying law-i
{i 13 suits are identical in all respects?
14 MR. GOODHOPE:
Yes.
15 MR. GALLAGHER:. I don't think I can say they're 16 identical in all respects.
I think the underlying issue is 17 one where licenses will be granted as contrasted with seeking 18 damages.
But when it comes to a determination by the Nuclear 19 Regulatory Commission as.to the antitrust impact and a deter-
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20 nination by the District Court as to whether the antitrust 21 laws have been violdted so as to warrant --
22 MR. GOODHOPE:
That's what I'm getting at.
k-23 MR. GALLAGHER:
-- to warrant the aware of damages 24 ri ind injunctive relief, then I think they're identical.
Aq > 'wol Reporters, Inc.
20 MR. GOODHOPE:
All right.
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MR. GALLAGHER:
But may I hasten to " add that I dont 2
think necessa.rily the underlying issues are entirely disposi-3 tive of this.
4 Now there was a full evidentiary hearing given.
5 Judge Krupansky made certain specific determinations.
These 6
included the fact that. the city waived any right to assert
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7 disqualification based upon conflict.
Independently he deter--
8 mined that the City was: estopped from asserting it; and finally 9'
he found that there was no substantial relationship between 10 the ad hoc representati.on of the City by Squire, Sanders and 11 Dempsey and its bond counsel representation on.the one hand 12 and the antitrust controversies involved in that litigation.,
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.h 13 Now the critical thing there I think is -- and [
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.-s 14 before we move on to other determinations he made -- each one 15 of those is individually and independently and totally dispos-16 itive of the question before the Court, so that if any one of 17 them fall or if any of the other subsequent determinations '
18 are unsupported by evidence or based on erroneous law, any 19 ona of those is entirely dispositive of the question and suffic i
20 ient to support the ruling of Judge Krupansk'y on appeal and I
21 sufficient to' support any ruling of this body.
22 But, in addition to:.that he went on to find that 23 there was in fact, or by operation of law, no disclosure of 24 confidential information, that the relationship was not an
. ' 'eral Reporters, Inc.
25 adverse relationship and finally that Mr. O'Laughlin's N;
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employment by the City and subsecuent employment by Squire,
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2 Sanders and Dempsey presented no basis for disqualification 3
and that there was no substantial relationship between those, A
4 U
the MELP transactions and the antitrust cc,atroversies.
5 Now let me move on quickly to what I think is the 6
crdcial matter I want to address to this Board.
7 After advising the Board that SS&D's motion to 8
dismiss these proceedings should be granted and stated uneauive 9
cally, the Staff then. suggested that the Order of Dismissal 10 should be stayed until after all appeals from the United States 11 District Court's order have been exhausted.
It argued this 12 because of the NRC rule which allows ten days for a petition
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I3 for reconsideration.
n bh Id We believe that the Staff's suggestion to this 1
i 15 Board is ill-advised.
We say as an aside that preliminarily I0 that-this Board is required to act as it must on our motion 17 for dismissal not out of deference, not through comity, but 18 as a matter of law.-
It is bound by the principles of collatera 1 l9 estoppel, and it must make its finding.
20 If this Board follows the suggestion of the Staff i
21 what it will effectively do is require the licensing board to 22 forfeit its control over its own proceedings.
As we have V
23 pointed out the City has already sought an extension before h'.
24 the District Court, which was denied.
It then filed a motion feral Reporters, Inc.
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25 for enlargement of time before the Court of Appeals to 4
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December first, which was granted, so that it's' now an enlarge-0 2
mene to dooxee. eheir eggea1 to Decemeer f1=s=.
3 Now, just following that appellate procedure through,
4 the record then must be filed.
After the record is filed there 5
is time for briefing by the City.
One that is accompli'shed 6
there will be time for briefing by the appellee.
After that, s
7 it will be finally set down for oral argument.
And believe me, 8l the courts do not work with the same dispatch that this Board 9
works.
And after it is set down for oral argument there will 10 be that time require for the court of appeals to come to its 11 decision.
12 Now Judge Krupansky himself took very close to
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,7 14 So it is entirely conceivable that the appellate 15 procedure in the Circuit Court of Appeals will extend over a 16 period of a year and there is still always the possibility 17 that a petition for certiorari will be filed.
18 Now, the granting of a stay adds to this matter a 19 tail which extends'out into the future of indefinit'e duration 20 outside of the control of the licensing board and in the contro l 21 of the City taking what extensions have been made, and in the 22 control of the Federal Court in the sense that they set up O
23 their own docket and they set up their own time schedule, and p
24 I submit to this Board that this is a very serious obstacle in d i.rol Reporters, tae.
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25 the way of the licensing board coming to a final decision in s
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I this casc.on the underlying question and that the special board apb4 2
should not place that obstacle in the licensing board's way.
3 We understand that the licensing _3oard's ruling is (m
4 imminent and to interject uncertainty I think is to pernicious-5 ly undermine it.
w 6
MR. HEAD:
Excuse me, Mr. Gallagher, might not the 7
- s licensing board's opinion go a long way t'owards mooting this 8I controversy also?
y 9
MR. GALLAGHER:
Well, yes, the licensing board has j
10 requested prompt action.
The' appeal board has requested prompt II action.
The Department of Justice, in its comments filed on 12 October 12, just the other day, asked the licensin'g board to,
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immediatelyinformthepartiesofitsrulingontheantitru'st[{
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7 14 aspects of this case even before it filed'its formal opinion, 15 apparently concious that prompt action by the licensing board 16 is important both in hthe public interest and in the interests 17 of all the cities.
And presumably the City sould like prompt 18 action too.
The antitrust department said the City should 19 have athe benefit of kn, wing whether there will be conditions
=
20 imposed upon the license.
And heading the questions that 21 would be inherent if there is a stay of the order I think will 22 bring about interminable delay.
(
23 MR. HEAD-Well, Mr. Gallagher, I guess my point 24 i
was if the City prevails in the basic licensing board action ~
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.a will that not-go a long way toward mooting this particular. f 25
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l disquall'fication proceeding and the decision of the licensing mpb5 1-2 board comes ou,t within the next -- I don't know when it will 3
come out but within a short period of time -- if when' the
.h 4
decision comes out the City prevaiIs in the basic licensing 5
board action,isn't there scme sense in this Board even if we 6
-- we wouldn't have to rule, we could take the entire motion 7
under advisement and await developments that would make either 8
further proceedings or ruling in fact unnecessary in this
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9 disqualification proceeding.
10 For example, we could await the proposed sale which 11 would apparently moot this case or an imminent decision by the 12 licensing board, which may well moot it.
I don't know which,'
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13 way they'll go, of course.
Why should we act?
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.m-i-~ p 14 MR. GALLAGHER:
I'll attempt to tell you and I 15 think each point you raised pounds a further nail in the con-16 clusion that you must act under the law which applies to this 17 kind of situation.
18 Now there are guidlines which are established by 19 the Federal Courts in the consideration of stays of judgments 20 and we have cited one case and footnoted a number of other i
21 cases which state what these guidelines are and they are beyond 22 dispute.
There is no question about them.
The case we scite'
(/
23 is illustrative only.
It's the North Central Truck Lines case.
24 But the rule is that the moving party for a stay ~
deral Reporters. Inc.
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25 must make a strong showing, not just a showing but a strong lv.
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mpb6 showing, and I submit there is no showing m'ade at all here,
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2' but a strong showing of four separate elements.
First of all, 3
that the reversal on merits on appeal is likely.
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4 Well, we submit to this Court that it is very unlike 5
ly.
First of all, the cases are clear that disqualification 6
is addatssed to the sound discretion of the trial court, that 7
his discretion and judgment will not be set aside lightly, f
8 will not be set aside in the ab' ence of abusive discretion.
s 9
And as I mentioned before there are multiple independent ground s 10 which would support it in the event,there is some merit on 11 any point.
An examination of his opinion I am certain would.
12 make clear to all of us that it wasra scholarly one and care-
?l:s fully considered.
I3 f4 The chances of reversal range from improbable to 15 extremely remote, so that that' initial matter :: simply can not I0 be satisfied.
And then we add to that the mooting that you I7 address yourself to, Mr. Head, namely that the City -- that -:
18 if the sale goes through it will moot it.
If the licensing I
board found in favor of the City it would moot it, so you put 20 all those things together and the chance of a different' result 21 obtaining is so extraordinarily remote that that simply can't be met as an element to justify a stay.
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\\i 33 MR. HEAD:
Well, Mr. Gallagher, I think perhaps TT-24 we're talking abou,t two different situations.
If we take the
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25 Staff'" case where they say enter in what in effect would be,
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a judgment of this Board which would be dispositive:. of the 2i proceeding but then stay.its effectiveness I would agree 3
that the Virginia Petroleum Jobbers line of cases would
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control whether or not we should grant a stay in that. instance.
5 What I was talking about, since we have two actions 6
which are outside of our control but either one of which may 7
occur in the relatively near future now, our licensing board's 8
decision, the other is a possible settlement and action of 9
sale that would. moot this particular proceeding, why shouldn't 10 we stay our hand on acting on the motion or the proceeding it-11 self, which would not require us to use the same standard as.
12 the Virginia Petroleum Jobbers but would strictly be a matter
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13 of our discretion as to whether or not we should proceed witti ~
14 this particular proceeding, either with the evidence or with 15 ruling on the motion?
That would appear to be a matter of 16 discretion by the Board rather than having a more rigid standar1.
17 That is in effect what we're considering stayed, a judgment ~.~
18 MR. GALLAGHER:
Well, I would think there would be 19 more discretion in staying a judgment than there would be in ~
20 staying your hand to act here because here all of the issues 21 wh'ich are before this Board have been litigated, they have been 22 concluded.
There is nothing before this Board to decide, and aD 23 all it is required to do is dismiss the proceedings before it.
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Q 24 And I submit there is just nothing to justify it not doing so.
M' arol Reporters. Inc.
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25 I don't think that's a matter of discretion.
I think if there e
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I mpb8 is nothing before this Board, then it.has all been determined O'
2 that this Boar'd should grant the motion as requested.
3 MR.
HEAD:
It isn't sufficient re'ason to stay our O'
hand the fact that there is what appears to be a good likeli-5 hood that the issue will be mooted and would not require a 6
ruling by the Board?
MR. GALLAGHER:
The more reason that you should not 0
stay your hand, as'I view it, because the City has an opportuni-9 ty if there is -- say-there is a reversal, and that's the only 10 thing that could possibly cause a problem here, a reversal.
11 If there is a reversal, Rule 60-BA of the Federal Rules of 12 Civil Procedure provide exactly for this kind of' contingency.
3 13 Rule 60 is entitled " Relief From Judgment or Order" and it I4 provides:
I0 "On motion and upon terms that are just the 16 Court may relieve a party or his legal representa-17 tive from a final judgment order or a proceeding 9
18 for the following reasons 5"
--and skipping down to Subsection 5:
~~
"The judgment has been satisfied, released
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21 or discharged or a prior judgment upon which it 22 is based has been reversed or otherwise vacated
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3 or it is no longer equitable that that judgment h,g should have prospective application."
25 So the City is not bereft of~a remedy under the
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circumstances and for this Board not to act continues to dangle h
2 a Damocles sword that makes it difficult for everybcdy includin;r 3
the Applicants, the other Applicants in this case.
'R r
4 Now I think the considerations that ; relate to stay-5 ing the effectiveness of the final order may Apply here and s
6 the second one as you will recall is that there will be irrep-7 arable harm to the movant--t unless a stay is granted.
Now s
8 that just isn't the. case here.
There is no indication of any 9
harm at all to the city either economic or procedural.
As I 10 just pointed out they do have a procedural way in which to 11 act.
12 The City, in addition, can not avoid the fact that
()
13 substantial harm will result to other interested parties,which 14 is a requirement, and I refer to now the other Applicants.
N 15 They are interested in having this matter moved and this matter 16 moved promptly, and as long as this question mark is handing 17 on in the air they are uncertain of what the, circumstance is.
18 But finally, and most particularly, and I do want 19 this to come to the attention of the Board, it is 'necessary in 20 order to secure a stay that the movant established thatt the 21 granting of a' stay will cause no harm to the public interest.
22 Now in this connection I would like to address the 23 Board's attention to test.imony in the record, and I refer to
,Q 24 pages 10,526, 10,527, which encompasses -testimony of Mr.
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mpb10 engineering, and he testified as follows, and it's very short 2
but I would ifke to read it directly:
3
" Question:
What is the reason way you are in A
a hurry to get the operating license for Davis-Besse 5
17 r
6 6
" Answer:
There is very substantial e onomic
~
7 benefit of having that unit on the 1ine.
Tuclear 8
fuel costs are less than coal fuel costs.
As soon
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9 as the nuclear unit is on we will back down the 10 coal fired units.
That difference alone, in the 11 cheaper nuclear energy rather than-the coal, will
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12 save the companies and the customers about $400,000
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a day.
It will save the company and their customers.
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16 the construction dollars already invested.
That 17 interest runs something like $88,000 a day.
So c
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these two factors added together give,you total 1
19
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costs of delay of the Davis-Besse Unit that runs
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20 over $400,000 a day, a large part of which will
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21 accrue direc'tly to the customers because of the
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-- which is how savings or additional costs are taken into 24 n) wi n.pon.n. inc.
account in establishing the rates to be. charged.
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25 If my judgment that the appeal may last as long as
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a year is accurate, and if we multiply 365 days times $400,000 gC 2
a day you come' up to something in the neighborhood of $146 3
million, which is a substantial amount of money by any standard.
'O 4
I see that my time is up.
I would like to reserve 5
a few minutes because there may be r,me questions raised.
6 CHAIRMAN LAZO:
Mr. Gallagher, the Board has used 7
some of your time with our questionincf.
I 8
MR. GOODHOPE:
May I use some more?
I'll try to be 9
brief on this.
7-10 The appeal board in its remand emphasized candn II Nine on the theory that there should be no even appearance of 12 impropriety, and they also made the point that if information 13 were transmitted to an attorney in the law firm without any 14 qualification at all, it's assumed that it was transmitted to' 15 all attorneys in the law firm.
Did I make an accurate state-16 ment?
17 MR. GALLAGHER:
Yes.
18 MR. GOODHOPE:
Did Judge Krupansky in his opinion 19 4
meet this point : raised by the board?
20 MR. GALLAGHER:
Yes, he addressed himself precisely 21 to both points.
22 With respect to Canon Nine, he said that Canon Nine C
23 should not be used in effect as an excuse for disqualifying ps 4.m when you can't find support under Canons Four and Five. -
1 24 He 25 addressed himself specifically to that Canon as respects e
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mpbl2 Mr. O'Laughlin saying that his conduct was not a violation of
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2 j it and he addr'essed it I believe on page 24 with respect to I
3 the other Canons and the general representation by the firm
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4 of the City of Cleveland.
5 7,m sorry, the second point was --
0 MR. GOODHOPE:. Well, that answers it substantially as far as I'm concerned.
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8 MR. GALLAGHER:
But I missed your second point.
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9 MR. GOODHOPE:
If it is given ito one lawyer it is given to all.
11 MR. GALLAGHER:
He very clearly went into that and, 12
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as a matter of fact, this is where the term " scholarly" by.,
f me I think has precise application.
He dealt with' treatises, 14 with texts, he analyzed decisions, he pointed cut that we have 15 an evolving practice of great complexity, larger firms, larger 16 businesses and that the operation of a firm..is beccming mor,e 17 nearly c. akin, for example', to the operation of government.
He 18 referred to the vertical transmission and horizontal, the t -
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separation of departments.
He very carefully addressed that a
20 particular point.
21 MR.
GOODHOPE:. Hadn't he already verified that 22 actually there had been no information passed in the first 23 place?
A 24 MR. GALLAGHER:
Yes.
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25
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Why did he go into this long
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discertation?,I agree with you, it's cuite learned and well Ov 2
done, but why.did he feel it necessary, or do you know?
Can 3
you ccmment?
4 MR. GALLAGHER:
This matter is'a cause celebre.
It 5
has taken an awful : lot of time of various boards of th'e NRC 6
and it took an' awful lot of time before the District Court,!
7 and he felt that if this much time were to be devoted to it 8
he ;ought to demonstrate to everybody involved, including the 9
Court of Appeals, that he had done his homework carefully.
10 MR. GOOD!IOPE:
All right, thank you, sir.
11 CHAIRMAN LAZO:
Thank you, Mr. Gallagher.
12 Mr. Davis?
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ORAL ARGir!ENT ON BEHALF OF THE CITi OF CLEVELAND n
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2 by James B.
Davis, Esq.
3 MR. DAVIS:
I can understand th-; the Board is
^
4 concerned about what appropriate action to take under the 5
rather unusual circumstances we now face might be.
I would 6
like to make the preliminary observation that what we're
~
7 talking about is not essentially what Mr'. Gallagher attempts 8
to have it, that is, resolution of facts between litigants 9
in a prior proceeding that now should be taken through 10 collateral estoppel to control a subsequent proceeding.
11 What we're really talking about is lawyer conduct 12 before a tribunal and more precisely, what we're talking
- A 2 n.2
{s about is what should be the standard of lawyer' conduct before 13 I4 the Nuclear Regulatory Commission after it has spent the 15 better part of a year evolving careful standards in an unusual 16 case.
17 Now the City urged disqualification in this matter 18 starting before any trial on the merits of the antitrust 19 review began and here we are in October, and the question has
~
20 not yet.been finally resolved.
21 But I 'suggest to you that a great deal has been 22 resolved before the Nuclear Regulatory Commission.
The 23 first Licensing Board fully considered the matter on a small 24 slice of the evidence that is now available and was satisfied
/ ieral Reporters, Inc.
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misconduct and should be suspended.
)
2 The contrary findings of the subsequent Special 3
Board were summarily overruled by the Appeal Board and from 4
every indication of the opinion of the Appeal Board of June 5
lith, standards we're set that, by implication, pretty clearly 6
indicate that if the matter were really heard and the evi-7 dence really presented to this'Sp cial Board, there could be 8
but one result and.that would be that Squire, Sanders would 9
be disqualified.
10 There'are many reasons to argue that further and 11 I will come to them, but let's set this in context.
12 The whole point of everything we have been doing.
(]
13 for this last year in this special proceeding is to determine 14 what are the standards of conduct before the Nuclear Regula-15 tory Commission.
Now what is going to be mooted and what is 16 going to happen?
17 I agree with most of what Mr. Gallagher said about 18 what is going on in Cleveland.
I am not currently actively 19 involved in the negotiations; they have evolved quite a ways.
s 20 There is a preliminary memorandum.
Mr. O'Laughlin of the 21 firm of SS&D'could probably tell us a good deal more.
22 believe he has been actively participating.
It is.a tentative
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23 agreement.
lr; g 24 I might preface that by saying that no small reason U
<.r s n.p.nm. inc.
25 for there being any agreement at all was that the same Judge
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1 cb3 who rendered this opinion at the same time that he found no
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l misconduct by'SS&D rendered summary judgment in favor of 3
The Cleveland Electric Illuminating Ccmpany for in excess of (7
4 nine million dollars which put the City of Cleveland in a very substantial financial crisis because they had not 6
budgeted or did not have funds available, and this had no
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small part in precipitating the settlement negotiations.
~
81 Whatever the reasons for the negotiations they must 9
be passed upon by the City Council.
It isn't clear at all 10 what is going to happen.
I would agree with Mr. Gallagher 11 that the City plans to hold in abeyance its appeal to the Sixth Circuit and what I am urging today of course is that a
13
'U-(j~)
this panel continue to find and cet.for the Nuclear Regulatory 14 Commission its own standards of conduct, not wuit for what is 15 to happen in Cleveland because I would agree with Mr. Gallagher 16 it is not sure that the City is going to go ahead and finally 17 determine to go ahead with that appeal.
18 My basic position of course is that the opinion 19 of Judge Krupansky was egregiously wrong.
It was egregiously.
20 wrong in a way that this Board already can appreciate and 21 understand on what is before the Nuclear Regulatory Commission, 22 and could not be acceptable to the Court of Appeals of the w
23
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Sixth Circuit.
Ow:n. pen.n.24
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It certainly cannot be acceptable as a standard of inc.
25
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conduct before the Nuclear Regulatory Commission and to l
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accept that erroneous and outrageously unjust opinion as the
{)
2 standard before this Commission I would think would be a 5
most unfortunate outcome af ter the tremendous amount of time em 4
and effort that this Commission has gone into to 'take this 5
special case, this unusual case, as the vehicle to frame r
6 for'the first time, apparently, what the standards of conduct
(
7 before this Commission are going to be.
8 Now an additional reason w'hy I don't believe that g.
9 the final outcome of the Licensing Board will really moot
- I 10 this is as follows
11 Let's assume on.the one hand the Licensing Board
't 12 finds substantially in ~ favor of the City and the Justice 2.
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And by the way, the Justice Department, I am iy('
v 14 told, is certainly going to pursue its remedies before the 15
. Nuclear Regulatory Commission, whatever the City does, so 16 this case is not going to be mooted no matter what the City 17 of Cleveland does, is my understanding.
r 18 MR. HEAD:
That of course would not apply to this 19 proceeding.
20 MR. DAVIS:
Not to this special proceeding; I 21 understand that.
I agree.
22
.But the main case here will go on in one fashion
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23 or another.
24 On the one band, the Licensing Board and the.
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That leaves unanswered all these questions about conduct.
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2 Nould the City simply drop the matter?
I can't really say.
3 I've never talked to the current law director and I don't 4
r know what his position might be.
I'm not even sure that he 5
knows at this point.
6 But what you would have would be a vc.'d.
- The thing 7
would be dropped.
It would be lef t J.ri abeyance and all the 8
uncertainties --
6-9 MR. HEAD:
It would be mooted, would it not?
O MR. DAVIS:
Well, mooted--
11 MR. READ:
You were really asking that they be -,
12 MR. DAVIS:
They would be dropped, Isuppose, nob.'
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13 mooted in the sense that it would be completely rendered
'u beside the point, because what I'm really saying is that the 15 J
Nuclear Regulatory Commission itself has some interest in 16 the outcome of this.
17 MR. HEAD:
We would not want to issue an advisory 18 opinion, however.
MR. DAVIS:
Well, it would not-be advisory because 20 it would certainly relate back to a proceeding that would have gone its full route and is going to go its full route as certainly as we can predict.
23 On the other hand, suppose the Licensing Board (ET provides less or no relief, less relief than the' City seeks
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or the Justice Department seeks, or perhaps no relief.
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can assure you that certainly at that point the failure to 2
disqualify lavfers who should never have been in the proceed-3 ing would be certainly a point open for raising on appeal.
o 4
I believe that quite apart from thoce considera-5 tions, the matter having gone as far as it has, it is appro-6 priate and in an accelerated way for this panel to complete 7
the hearing, and I submit it can be done in far less time s
8 and with far less effort than you may fear may be necessary. ~
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9 What I'm prepared to suggest is that we take the 10 record that was developed in Cleveland as supplemented by II the discovery thatthis very panel has found the City is en-12 titled to, and with that, subject the case for final decision k...)
13
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here.
I4 The reason I suggest that is two-fold, one,for the 15 savings in time, effort and the rest, and two, because that 16 is apparently the way that most courts treat'the findings of I7 ot.her courts.
Most federal courts treat the findings of IO State Bar Commissions, most federal courts treat the findings I9 of lower federal courts in similar situations where a sus-f 20 pension or a disbarment of an attorney is at stake.
21 In the first part of my brief I submit what law i
22 I was able tio find on how these things are handled, and there s
V_
23 is no immediate or total application or acceptance by one p
24 court, be it federal to federal, federal to state, higher
- '.cos n.p.n.n. inc.
25 i
federal to lower federal, federal to agency; there is no
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l automatic or immediate acceptance by one judicial tribunal of the findings of ancther on such a question as we are
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What they do do and what they say, and this comes 6
right from the-Selling versus Radford case that I cite, in the United States Supreme Court they pay careful attention 8
to the findings of another court.
In many cases they simply 9
take the record produced in the other court and review it, 10 but they don't simply give it a hundred percent credence.
11 Now I would say that that would provide a mechanism 12 "x.
that, within a matter of perhaps less time than it will take A
13
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for the Licensing Board to complete its decision, would
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provide a means for finally resolving this issue and coming 15
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down with the decision that if everything had gone the way 16 perhaps it should have gone, we would have had back in early.
17 spring.
~
18 I would say that what we're talking about here is 19 justice, too.
And I think it is apparent and should be 2d apparent to anybody with even the preliminary understanding and knowledge about this matter that this panel now has, i
22 it should be pretty clear that Judge Krupansky rendered a
's 23 decision that can be most charitably described as an aberra-
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25 In item after item and as a matter of law on item
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after item he took positions that were totally at odds to
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2 certainly the great majority of case decisions that have come 3
down from the higher federal courts and the decisions that
[^
4 were certainly indicated and in some cases, specifically laid 5
down by the Appeal Board of the Nuclear Regulatory Commission.
6 How can.this panel accept a decision by a federal 7
judge on a body of evidence when this very panel, in a pre-i 8
cisely similar way, was asked by Mr. Gallagher to accept his 9
ruling that the City was not entitled to one single bit of 10 documentary evidence'?
I remember your expressions when that 11 came forward.
I think you were all a little bit surprised.
12 Dnagine, a federal judge says the City cannot get
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13 from its own lawyers one bit of documentary evidence in a ca'se
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- e the City would have no 16 other possible way of finding out what SS&D knew about its 17 muni light operation without documentary discovery.
And not 18 surprisingly, this panel allowed the City documentary discovery.
~
19 Now the failure to give the City even that minimal 20 procedural right infected everything he'did.
It infected 21 many of his findings, 22 MR. HEAD:
Mr. Davis, though, isn't there a consider-23 able difference between a ruling evidentiary in nature made 24 by the Judge as opposed to a decision of his that apparently~
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appeal?
Aren't we talking apples and oranges when we're
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and judgment based on evidence that he heatu and where the O
4 9 reies are the e me?
5 MR. DAVIS:
Well, what I'm really saying is under 6
the law this body owes no total deference to whe+ that Judge 7
in Cleveland did.
Under the law, as best I can find it, it 8
would pay attention to what he did, it would look at the 9
record that was created, and I would beg you to look at that 10 record b2cause that record, in my judgment, is overwhelming 11 in favor of the. City.
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13 complete confession by SS&D that they never once told the '.
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14 City anything.
There was no disclosure they admitted on the '
15 record.
There are all kinds of amazing things in that 16 record that were never alluded to in that opinion of his.
17 In my entire practice of law I have never been 18 more shocked or dismayed at a decision by any judge than I
~
19 was at this one.
And.I hav'e to severely restrain myself 20 from characterizing what'.he did.
I know a little too much 21 about what happen'ed in Cleveland.
22 But in any event, you know of your own knowledge G
23 that things that he'did are unacceptable by the standards 24 of the Nuclear Regulatory Commission.
The Nuclear Regulatory
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of discovery, and I'm saying that that infected the very 0
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foundation of*his hearing.
That wasn't the only mistake that 3
he made.
I'm saying that right on the f ace of his opinion, em 4
if you read it, he takes positions totally contrary to the 5
Appeal Board and totally contrary to federal law.
He comes 6
up with these notions that we must show that one lawyer at 7
SS&D was in a position adverse to another lawyer.
That's 8
ridiculous.
9 He talks about the need to show tha't information 10 from one lawyer was conveyed to another lawycr at SS&D.
II Every federal decision that has come down on that question s
12 has dismissed that kind of a need for a client to demonstrate.
(,)
13 It's impossible.
Lawyers talk to each other in the halls 5
I4 of their law firms.
How can a person ever demonstrate that' 15 and why should a client be put in the position of trying to 16 demonstrate that?
It's presumed that lawyers communicate 17 with each-other in law firms.
But not by Judge Krupansky.
18 In manner after manner he flaunts federal law l9 to come down where he wants to come down.
And I'm saying that 20 the Nuclear Regulatory Commission should not be stuck with 21 that kind of law.
22
'MR. HEAD:
Yes, but aren't your arguments here b
23 going to the merits of the Judge's decision as opposed to--
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24 These may be points you may want to make on app ~al up before e
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l 25 the Circuit Court, but we're really talking about whether
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l Gr' anted, it may be subject to any number of legal 3l attacks on appeal, but we can' t use that standard in deter-
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.j mining this motion, can we?
MR. DAVIS:
I think you can, and that was my 6
reference to Sunnen which, unhappily, my secreta _y miscited a little bit.
It's certainly 330 Supreme Court, not 30.
8 Basically.I cite Sunnen for the proposition that 9
you don't apply collateral estoppel unless the legal prln-10 ciples involved in the two proceedings are the same.
And 11 I'm submitting--
When I'm arguing these points I'm trying not to so much argue evidence as I'm trying to submit to you
()
that you can see, right on the face of the opinion and on the face of the Appeal Board decision of June llth, major 15 differences.
16 Judge Krupansky is" going off on a fancy of his 17 own, and I'm saying that where the legal principles to judge 18 attorney conduct are so widely divergent the results are 19 going to be divergent.
But is that a reason that the Nuclear 20 Regulatory Commission should surrender to a set of principles 21 that its Appeal Board has already declared unacceptable?
I'm 22 saying No, s/
23 Now I realize this is a burden.
I'm asking you to 1
24 deral Reporters, Inc.
undertake a Work that will be difficult.
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things that are not necessary is a-serious consideration.
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2 But what I am saying is that you are not volun-3 teers in this effort.
These arguments, this whole dis-()
4 qualification proceeding has been pending since the very 5
first part of this year.
It has gone through an extensive 6
course through the Nuclear Regulatory Commissicn.
I think 7
- the Commission and certainly the City 'have a high interest 8
in a thoroughly considered and final and proper result,.a 9
just result.
10 I think that to accept Judge Krupansky's outcome 11 is, it should be clear on the fact of what is already knok, 12 an outrageous result, aresulttotallyatvariancewiththe\\
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13 kind of standards that the Nuclear Regulatory Commission
.a-14 should be content with.
J' 15 It's one thing for there people to be ten feet u
16 tall in Cleveland.
I should think that they ought to be 17 about the same height as everybody else in Washington.
And 18 the only way to do that, I submit, is to take that record, 19 and I am perfectly wil. ling to stipulate that on the basis 20 of that record as supplemented by the discovery that we're
~
entitled to, this matter could be presented for final 21 1
decision without live witnesses, and in a very short space 22 23 of time.
And this body could render the final decision that f#D 24 is now long overdue.
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25 MR. HEAD:
Mr. Davis, do you have any tiine frame.,
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within which the City Council may meet to discuss and possi-
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2 b1y epgrove ehae sa1e of met, eo cEz2 3
MR. DAVIS:
Yes, sir, I've been given the date and q
4 it is November 30th.
This is the date that I've heard, a
5 MR. HEAD:
Okay.
November 30th is when the City 9
6 Council meets then and--
^
7 MR. GALLAGHER:
It's the last' day on which they 8
are to give their approval.
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9 MR. DAVIS:
That's not to say that perhaps by
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10 mutual agreement that could not be extended, but the interest II of CEI is to get. action by the City,and that's understandable.
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12 MR. HEAD:
And it's contemplated that January 10th, c..
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14 Is that right?
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. ;z, 15 MR. DAVIS:
AGain I can't speak to that.
16 MR. GALLAGHER:
I suppose one could call that the I7 closing date.
I see.
And after that date, if every-19 thing goes well, no further action will be required by either, O
party then.
Is that correct?
Well, I think that simplifies it.
22 MR. GALLAGHER:
That may be, but the Council of 23 Cleveland is presumably very different from council in other 24 municipalities and there is just no telling what things may
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come up which will prompt political intrigue, if you will, l
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2 MR-DAVIS:
Let me add on additional factor that 3
I confronted when I W Law Director of Cleveland and I O.
4 think tihis factor -- and I'm subject to correction by Mr. O'Laughlin.
ButcertainlythepositionoftheJusk. ice 5
9 6
Department, when I was talking about a different kind of a 7
settlement with CEI back in the spring of this year, was O
that they were very, very concerned about any agreement 9
between the City and CEI.
O We were talking about a continuation of the City's 11 electric light operations but giving the City its own 12 distribution area and getting rh.d of the overlap.
s:
At the y.
13 present, both systems overlap and interlace all throughout u
4
- f f3 the City of Cleveland.
We were going to carve out an area t
15 and give it in exclusivity to the City and the rest to CEI.
16 And such a territorial breakout, even under the very special I7 conditions that then existed, was something that the Depart-18 ment of Justice had great reservations about.
My understanding is that they are or will literally 20 oppose the outright sale of the light plant initially and 21 where they're finally going to come down I don't think any-22 body knows'at this point.
,v 23 So that's another ingredient that might affect the (A
outright sale by the City to CEI.
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25
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MR. HEAD:
Is the appeal of Judge Krupansky's 1
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ruling on disqualification, is that now being held in abey-n 2
ance or stayed by agreement of the parties?
3 MR. DAVIS:
That's my understanding.
A 4
MR. HEAD:
And is the basis of that agreement to 5
await the outcome of the sale?
O MR. DAVIS: Well, I can't really speak to that
~
'7 because other counsel are' handling that, but that's basically 8.
my understanding.
I wculd not disagree v:ith Mr. Gallagher.
9 I would think that that suit would be settled if that entire 10 sale of the system to CEI goes fcward.
II MR. HEAD:
And you mentioned there was a nine 12 million dollar judgment against the City in the suit?
.;i i 13 MR. DAVIS:
Right.
This was for past electricity I4 delivered by CEI to the City, and that is, I think, part 15 of the appeal.
The settlement provides for the handling of 16 that amount due in other means, or by other means.
7 MR. HEAD:
Is that judgment being stayed pending
- ~
18 settlement, too?
MR. DAVIS:
I think it is.
At least it's not
'20 being acted upon.
21 MR. O'LAUGHLIN:
There is no attempt,at collection being made.'
3 23 MR. HEAD:
But there is no formal stay before 24
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No, I don't believe they've asked t
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for a stay.
2 gn, DAVIS:
I would agree with whatever 3
Mr. O'Laughlin says on that one, n
'I can go through my brief., I don't know how much 5
time I have already used up.
The points that I make in my 6
brief --
7 MR. HEAD:
We'11 give you t$he two-minute warning 8
when appropriate.
9 MR. DAVIS:
I would like to reserve a little time 10 for response to Mr. Goldberg and Mr.Reynolds who are taking Il positions at least in variance with what I'm arguing to the 12 Board here.
I view them as. sort of adversaries this morning, 13 so perhaps I could reserve-- 'If there is time due' me, I I4
^
O would reserve it at this point to comment on anything they 15 might choose to say.
16 But my basic points' simply are the law does not t
17 require this panel to simply accept the findings of another 18 court.
Collateral estoppel for attorney conduct proceedings I9 is an inappropriate concept.
The more applicable standard 20 is that'used by various courts, state courts, federal courts!
21 when state.bar associations or other bodies have suspended s
22 or disbarre'd lawyers, they give deference, they give atten-23 l
tion, but they are free, as in Selling versus Radford, to lh 'eral Reporters, Inc.
inspect what has happened for unjust results, lack of due e
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25 process or other things that would infect that decision, and A
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are free to make their own decision.
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2 I say to you that you are free to make your own 3
decision, that the NRC should go foward and set its own
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standards of conduct, that this case is a unique vehicle to 5
do that, that~everything so far inplies that the final out-6 come is going to be dire.ctly contrary to that of Judge 7
Krupansky, and that this body already has overruled Judge 8l Krupansky on a very fundamental point, the basic evidentiary 9
point that the City should have some discovery which under-10 lies everything that comes after.
II And I pointed out in my brief, and I won't go 12 through again, at least some of the ways in which the Appe 1
?
(['h Board has declared the law to be, and in consonance with
^I I3
,'i.r-I4 higher federal court, to be directly contrary to the standards 15 that Judge Krupansky applied to the City.
16 So I'm saying that it is entirely appropriate for I7 this Board to go foward and act, to take the case, to do it 18 in a summary fashion, and I will stipulate we can use the 19 record in Cleveland, which is about a 500-page c.>.
600-page 20 record, if I'm not mistaken.
It's not a terribly long 1
21 record.
It was a two and a half day hearing.
22
.But it would be a matter that could be very' l
l Ks 23 quickly handled and it would be for the great convenience I
24
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112 eb17 I
would be a great problem to try to get them live before this j
2 body.
So it would be a quick, summary way, as supplemented 3
by the discovery that the City has yet to come.
^
4 MR. GOODHOPE:
Mr. Davis, you have asked for a 5
whole lot of discovery.
You've gotten some of it and a 6
whole lot of it you haven't gotten.
And there have been 7
objections raised to it-- Isn't this correct - before this 8
panel or this Board?
o 9
MR. DAVIS:_ Well, this panel has gone pretty far 10 to resolving those differences.
I think the main thing now II is we're waiting on~a stay.
Mr. Gallagher has asked that 12 all the discovery proceedings be stayed pending a ruling on this issue of collateral estoppel.
I think that's reallf.. [n-t Q) 13 I4 what we're waiting for..
15 MR. GOODHOPE:
I thought there were quite a few 16 objections.
I didn't go into it in detail.
17 MR. DAVIS:
I think those object, ions --
18 MR. GOODHOPE:
Certainly the privilege question
~
I9 is still very much alive.
20 MR. DAVIS:
I would even say this ~~
21 MR. GOODHOPE:
That was the basis for Judge 22 Krupansky refusing to issue the subpoenas-in Cleveland, was 23 it not?
.O 24 MR. DAVIS:
I will make you a bold stipulation,
. U <eral Reporters. Inc.
25 I feel this strongly.
I would present the record without
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. discovery.
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MR. GCODHOPE:
Then we would corne to a different 3
conclusion than Judge Krupansky?
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MR. DAVIS:
You would have to.
~
5 CHAIRMAli LAZO:
Thank you, Mr. Davis, e
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_lD mpbl ORAL ARGUMENT ON BEHALF OF THE NUCLEAR REGULATORY l6 2
CON. MISSION 3
by Jack R. Goldberg, Esq.
m MR. GOLDBERG:
Mr. Chairman, members of the Board, 5
I would like to first summarize the Staff's position and then 6
explain in detail the reasons for our taking the position 7
~
~
that we have.
o 8
The staff's posit. ion is. that the elements of 9
collateral estoppel are not satisfied 1 There is no identity 10 of parties between the two proceedi,ngs, there is no identity II of issues and there has been no final adjudication of the ulti-l 12 mate issue which appears before this Special Board.
Even if'
~
13 the elements of cellsteral estoppel were satisfied, however, I4 this Commission and this Special Board has the discretion as 15 to the extent it wishes to apply or not apply the doctrine of 16 collateral estoppel.
II In this case the Staff's position is that even if 18 the conditions of collateral estoppel were satisfied this I9 Board should exercize its discretion to not apply the doctrine.
~
20 However, the Staff also believes that the concept 21 of comity between this Commission and the Federal Courts 22 deserves great deference.
Accordingly the Staff is of the a
s 23 view that this Special Board should make certain findings 24 and conclusions based on the District Court's opinion.
Based' [
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Special Board come to its own independent decision as to whet.'Nec i.)
2 or not Squire,. Sanders and Dempsey should be disqualified from 3
this antitrust proceeding.
Based on the fi;..ings and conclu-
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4 sions that we have suggested we would recommend that the dis-
~ 5 qualification proceeding be dismissed.
~
6 Finally, the Staff believes that the finality of 7
the order dismissing the disqualification' issues should be 8
stayed until all appeals from the District Court's decision 9
have been exhausted.
10 I would like to now explain in detail the reasons 11 why the Staff has taken this position.
12 MR. HEAD:
Before you go into that, Mr.'Goldberg,
(')
13 do you have any authority that would indicate we have discre-14 tion to ignore collater,al estoppel?
15 MR. GOLDBERG:
I certainly do, Mr. Head, and I will 16 discuss that in my presentation.
17 MR. HEAD:
Thank you.
18 MR. GOLDBERG:
^It's well established that there 19 are three prerequisites to the application of the doctrine of 20 collateral estoppel, identity of parties between two proceed-
.21 ings, identity of ' issues and a final adjudication of those 22 issues by a. court of competent jurisdiction.
It's the Staff's k-23 position that none of these three prerequisites are satisfied V(?)
24 in this case.
bros h pon e. Inc.
25 Furthermore, I would like to note that in order for 4
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116'
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I mpb3 a motion to succeed which is based on collateral estoppel the
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2 tribunal must be convinced that all three of those prerequisites 3
are satisfied.
However, for a motion based on collateral estopp-d el to fait it is.only necessary to show that just one of those 5
prerequisites has not been satisfied.
6 It's out opinion that none of the thr: 2: have been 7
~
satisfied.
8l First of all -- and I think most important -- we take 9
the position that there is no identity of parties between this 10 proceeding and the proceeding that occurred before the District 11 Court.
The Staff was not a party to the proceeding before the 12 District Court.
The Staff is a party to the proceeding before 13 i0, this Special Board and before this Commission to find an 14 identity of par. ties between this proceeding and the proceeding
'15 that occurred before t'he District Court and then to decide 16 issues before this proceeding based solely on the basis of I7 collateral estoppel, assuming now that the other conditions 8
are satisfied,.would necessarily preclude this Commission from basing its decision on issues with the benefit of the Staff's, 20 position on those issues.
21 Such a ruling by this Special Board, in the Staff's 22 opinion, would create a precedent which would be dangerous to
(_/
23 further proceedings before this Commission.
It would do in-(D%
24 h;),,,oi n,po,,,,,, inc, hsdce M ne d @e very reason 1e M ahMsdade 25 agencies and that is to base its decisions in its area of its l
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jurisdiction on the expertise of its Staff.
Now this is most
.)
2 applicable, of. course, to the health, safety and environmental 3
mission of this Commission, but it illustra s that when you 4
dispose of issues based on a proceeding where the Staff was 5
not a party you are precluding yourself frem considering the 6
position of your own Staff.
3 7
MR. HEAD:
Well, Mr. Goldberg, though, the Staff has 8
no real interest in the situation between the two parties, does 9
it?
You are here more as an amicus than a person who is 10 actually involved in the controversy, are you not?
11 MR. GOLDBERG:
I would disagree, Mr. Head, that we 12 have no interest because our interest is very much - concerned
(
13, with preserving the integrity of our licensing process and ou 14 hearings and therefore we are"certainly concerned with the,
15 attorneys who practice before the Commission in our hearings.
16 We certainly want to represent.the public interest as to 17 whether or not particular attorneys should be participating in 18 our proceedings and whether or not they have violated our 19 Rules of Practice.
~
~
20 MR. HEAD:
Well, is that not the job for the Bo'ard 21 to sort out?
Aren't we acting for the agency in that regard?
22 The Staff has not raised this.
If you had raised it as a 23 particular matter on your - own motion I would say that you s-
^J 3 24 have an interest in the proceeding as such, in this disqualifica-Y deral Reporters. Inc.
25 tion proceeding, and while mwe are interested in hearing the s
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3 MR. GOLDBERG:
I would agree that it is for the Board to ultimately decide the issue, but I think that it 5
certaihly is proper and indeed the duty,of the Staff to air 6
its views on those issues.
And this Board has so ruled in I
its preconference order number 2.
The Board said, and I.
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9 "In the Board's view the Staff should be 10 permitted to participate because of its duty to protect the public interest in.' the Commission's v
11 12 lichnsing proceedings."
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13 And indeed our appeal board in remanding this
=.
14 proceeding has said that all. parties have a right.to partici-15 pate in the disqualification issue and the important point'is 16 because the Staff is one of the parties to this proceeding 17 and because the Staff has a right to participate in this 18 proceeding there can be no identity of parties between this proceeding and the proceeding in the District Court.
Although 20
~
they the primary parties are the City of Cleveland and SS&D, are not the only parties.
The Staff undeniably has a right 22 to participate in this proceeding and therefore there can be no identity of parties.
3 MR. GOODHOPE:
Which side are you on2 g
23
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MR,.' GOLDBERGi We believe the motion to dismiss e
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this proceeding should be granted, but we disagree very strongly
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with the reasons advanced by Mr. Gallagher.
We have our own 3
reasons as to why it should be dismissed and we think those
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4 reasons are very important.
5 MR. GOODHOPE:
Did you plan on having discovery and a
6 calling witnesses and participating in this proceeding?
I indicated at the prehearing con-8 ference that while we would not present our own case, that is.
9 we would not call witnesses ourselves and present documentary
~
10 evidence ourselves, we certainly reserved our right to object 11 to documentary evidence that was attempted to be introduced 12 into the proceeding.
We certainly reserved our right to conduc t
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13 cross-examination of witnesses.
And, once again, our interest 14 is to preserve the integrity of our licensing process.
15 MR. HEAD:
Mr. Goldberg, though, isn't that just 16 a general interest as opposed to having an interest in the 17 actual controversy which is between Squire, Sanders and Der.tpsey 18 and the City of Cleveland?
This is where the real issue lies 19 and while' it may be helpful and certainly this Board is inter-20 ested in.the Staff's position, when we're. talking about the 21 principles of collateral estoppel we're talking about a legal 22 interest, an actual interest that a person has to have and ther a 23 might have been ten parties out in the lawsuit in Cleveland 24 O~ ' a.41 n.pon.n. inc.that might have had their say before Judge Krupansky, or there 25 might be, like the Justice Department isn't even participating
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2 basic proceedi'ng.
3 What we're talking about from the collateral estoppel er L
standpoint, aren't we, is the actual interest in the controvers g 5
itself?
The Staff does not have an interest in the controversy o
6 itself, does it; other than general interest in T/.ie conduct of 7
~
the proceeding?
0 MR. GOLDBERG:
I think it's the phrase "other than
~
9 the general interest."
If,you want to call our interest a 10 general interest then'I would agree with you that our interest II i's a general interest of preserving and protecting our Rules 7
12 of Practice and voicing our. opinion as to whether or not our,l
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However, I would add, you mentioned the Department 15 of Justice..
Once again, they do have the right to participate 16 in this disqualification procesding, and although they have I7 not excercized that right to date, I have been informed that 18 if certain of the issues were interjected into this proceeding that Mr. Gallagher has indicated in the past he might want 20 to do, the Department of Justice would exercize its right to 21 participate in this disqualification proceeding.
22 MR. HEAD:
Hell, the point I'm trying to get at, (V
23 though, is when we're tialking about the identity of parties, 24
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two parties contesting as far as collateral estoppel goes, l
25 aren't we talking about the real parties in the interest from
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121 mpb8 1
the collateral estoppel standpoint as opposed to other parties al i)-
2 that may be : involved in the proceeding?
3' MR. GOLDBERG:
I think that we~are a real party.
{}
4 in interest with respect to disqualification.
I don't see how 5
it can be said that the Staff is not a real party in interest o
6 with respect to disqualification.
l-7 Beyond the fact that in our view there is clearly 8
no identity of parties between these proceedings, there. is 9
no identity of issues when you consider the ultimate issue 10 before this Commission, before the appeal board and before this 11 Special Board.
The ultimate issue is whether or not the 3
12 law firm of Squire, ' Sanders and Dempsey should be disqualified
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13 from participating in the antitrust proceeding before the, []
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14 Nuclear Regulatory Commission because of a violation of this 15 Commission's Rules of Practice.
That is the ultimate issue 16 and the only tribunal who can determine that ultimate issue 17 is this Special Board and the appeal board a,nd the Commission" 18 and ultimately then can be appealed to the courts.
But the 19 District Court in Cleveland did not have that issue before 20 it.
The. District Court in Cleveland had the following issue 21 before it:
s'hould the lawfirm of Squire, Sanders and Dempsey 22 be disqualified from participating in the antitrust litigation k'
23 before the District Court in Cleveland.
Those are two different 24 issues and in this Commission's view of the law of the standard s
' Nerol Reporters. Inc.
25 and the ultimate conclusion as"to whether or not there should i
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judgment in Cl*eveland.
With respect to that ultimate issue we suggest that r.
4
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there is no identity of issues and therefore there was no 5
final adjudication of the ultimate issue which'is before this 6
Commission.
CHAIR 3GR LAZO:
Mr. Goldberg, don't.'our rules
~
8 provide that in suspension matters that we adopt the same rules 9
as are applied in Federal District Court?
10 MR. GOLDBERG:
Our rules say that the standard of 11 conduct here is the standard of conduct required in courts in L
12 the United States.
Putting aside'.the fact that various E
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federal courts differ as to what their own standards of con,
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14 duct are I think because that is our standard it is appropriate to look at the concept of comity and look at particular issues 16 that were litigated before the District Court in Cleveland 17 and determine whether or not we can adopt those, or whether or 18 not collateral estoppel applies to those.
If there is an id, entity of issues and if there'is an identity of parties and 20 if there was a final adjudication with respect to those 21 particular facts and issues I think then you can talk about 22 whether collateral estoppel can be applied.
s.-
23 But with respect.to the ultimate issue, I. don't 24 f,,,,ti g.po,,,,,, ine, M nk you can ta h,about collateral estoppel.
Now, the Staff's position that we,should exercize I
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our discretion and, based on the doctiine of comity, adopt
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2 certain findings and conclusions,and not all of them but certain 3
findings and conclusions of the district court is equivalent 4
in its result to saying that we believe that with respect to s
5 some of the issues that were litigated before the District
.o 6
Court in Cleveland. they are the same as appear before this 7
tribunal. although there is no identity of parties because we 8
were not a party to.that procee, ding. We could waive our right 9
to insist on an identity of parties with respect to those issues,,
10 and then you have a final adjudication of some of the identical 11 issues which appear before this tribunal.
And because we can 12 waive our right to insist on identity of parties then you can_
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13 apply collateral estoppel to some of those facts that were ---[
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15 clusion that because of collateral estoppel applied to them 16 we now have, and go down the list of things that we have in-17 cluded in our motion.
18 Then, based on that application of collateral 19 estoppel, ultimately conclude that this disqualification pro-
~
20 ceeding should be dismissed.
I suggest that that's precisely 21 the way that" collateral estoppel applies in all cases, it's 22 with respect to particular factual issues that have been liti-23 gated in a prior proceeding.
24 MR. GOODHOPE:
We can't hunt and pick through those
' deral Reporters, Inc.
25 and pick the ones we like and...scard the ones we don't like, ts
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Aren't we stuck with them all once we sbart talking I
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3 MR. GOLDBERG:
I think we're not. stuck with all the
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issues that were litigated in District Court because there t
0 perhaps were some litigated there that are not before this 6
Commission or not necessarily crucial to this Commission's 7
decision.
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MR. GOCUt!OFE:
Give me an example.
9 MR. GOLDBERG:
Okay.
O The appeal board, in remanding this proceeding, 11 said we find the record sparse on certain questions and it 12 went ahead and listed about six different questions that tit,,;
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15 Board.
16 Now, I believe it's possible to answer those ques-17 tions based upon an application'of the doctrine of collateral estoppel to certain of the issues that were litigated before the district court, but not necessarily all of them.
It's 20 not necessary to look at all of them to answer the questions which the appeal board wanted answered and I suggest that the ' findings and conclusions that the Staff has suggested in 23 its answer to the motion go to answer the appeal board's questions.
J ral Reporters, nc.
e 25 MR. GOODHOPE:
I guess Y see your point.
I don't
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agree with it but I see it.
I still don't think we can pick
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estoppel and say, We'll, I'll pick this one u t and I'll agree
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4 that was decided out in that district court and I'll buy it
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5 here but the next one I won't buy.
I can't see -- once you a
6 start down that road you've got to go all the way, and take the
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- 7 good with the bad.
81 MR. COLDBERG:
If there are five issues before this 9
Special Board and there were ten issues before the district 10 court that were litigated there clearly can only be. an identit ?
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11 of issues on the five that are before this proceeding, and 12 if those five iss;.res were litigated in the prior proceeding z-(^;
13 it doesn't matter whether there were 200 or only five out y
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14 there.
We say there's an identity of issues between fiv7 1
15 issues here and five issues that rwere litigated before the 16 district court and with respect to those five if the other 17 elements of collateral estoppel is applied we will not re-18 litigate those five issues.
19 MR. GOODHOPE:
You didn't put that in your memorandwa, 20 did you?.
21 MR. ' 0OLDBERG:
No, I did not.
I'm saying that 22 this is equivalent to our concept of comity and that is apply-m()
23 ing the doctrine of collateral estoppel to particular issues 24 fn3 that were litigated before the district court, and which is Ls.rel Reporters. Inc.
25 before this proceeding is the same as saying the concept of 4
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mpbl3 comity requires that this Special Board and the public interest m
2 requires that this Special Board adopt certain findings and 3
conclusions of the district court.
There is no difference p) 4
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and I'm 'willing to state now with respect to those particular 5
issues there is an identity and we will waive our right to 6
insist on identity-of parties.
MR. HEAD; Well, Mr. Goldberg, you indicate you
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would waive your ri'ght.
It would appear if there is not an Oc t.
identity of parties and one of the essential elements of, collateral estoppel would be missing as you argued, could i
11 you say since I'm that party I waive my right, would that, j'[
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--t in fact be fair to the City, who is opposing the motion? 'Can
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because we would then presumably grant the motion?
Vd MR. GOLDBERG:
As between the City of Cleveland 17 and Squire, Sanders and Dempsey, as between those two, there 18 certainly is an identity of parties.
The only added wrinkle 19 to it) and I think it's an important wrinkle from the Staff's 20 point of view, is the; we too are a party to this proceeding 21 and we -- and I think perhaps only we can insist on an identity of parties before the application of the doctrine of collateral
~U 23 estoppel is applied and therefore we, and only we, can waive 24 h*alRepenm.inc.
the right to insist that our point of view with respect to 25 certain things that were litigated in the district court, but-f--
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not the ultimate issue which was not before that district
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2 court, with respect to those certain things we can waive our 3
right because of the fact that our participation would have
~4 been limited, not nonexistent, but' would have been limited.
/
5 MR. HEAD:
Do you. have any authority for that pro-a 6
position, any cases that involve this split identity of parties ?
7 MR. GOLDBERG:
No, I' don't.
I've not been able to 8
uncover a case where there has been multiple parties with one 9
of them waiving their right to insist on it.
10
' MR. HEADi I might also ask while we're on the
_t 11 subject of comity, are there any cases where the theory of n
~
12 comity has been applied such as you wouldrask the Board to
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13 apply it here?
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14 MR. GOLDBERG:
I think with respect to disqualif ca-15 tion, some of the cases cited by the City of Cleveland in its 16 response are in line with that in that they talk about paying 17 respect to another tribunal's decision with respect to dis.
18 qualification of attorneys appearing before it, but not being bound in the collateral estoppel sense by that prio$ adjudica-19 20 tion of the disqualification.
It's something which, Mr. Head, 21 you brought up before.
Is it peculiar to this Agency?
I 22 think so.
When we're talking about practice before this Agency
- s' 23 I think this Agency and only this Agency until it is. appealed n
24 can deal with that issue.
And I think on that basis we have Q /'ferol Reporters, Inc.
25 to take a look at what went on in the district court, but we O
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mpbl5 can't blindly apply the doctrine of collateral estoppel and 2
say we won't g'ive it our own independent attention and we'll 3
just dispose of it without the view of the Staff, and without f.
U out own' independent conclusion.
5 MR. HEAD:
Well, is your theory, -then, one really 6
~
of comity or would you have us take the issues t!.2t were 7
presented to the court out in Clevelan'd and reassess-them and 81 make our own decision on them, is that what you would have us 9
do?
.:That's not really a comity position, is it?
10 MR. GOLDBERG:
Yes, that's what I would have you to do.
That's what I've suggested, that based on comity you 12
-look at what went on in the district court and you look at
+
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court found, this Board come to its own conclusion as to.
-f 15 whether or not those findings and conclusions warrent the sus-6 pension or disqualification of* Squire, Sanders and Dempsey 17 before this tribunal.
And we 're saying that. based upon what 18 we have read that we would recommend dismissal of this proceed-19
,Ing.
20 MR. HEAD:
Is that any different, then, than Mr.
Davis 's suggestion at the end of his presentation that you submit the record without discovery and let us utake our own n -
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24 cedainly &Har.
Na m any
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25 his goes further to give this Board its independent decision
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rather than adopting findings and conclusions based on that
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record, and th.en basing your ultimate conclusion of disqualific a-3 tion or no disqualification on the findings that we suggest you 4
adopt in.the district court.
Mr. Davis suggests, well, go back j
5 one step further and just take the entire record and lo'ok at 6
that and come to your own sp6cific findings and conclusions 7
and to'.f.he ultimate conclusion as to whether or no.t there o
8 should be disqualification.
I think they're very similar, he1,i 9
goes back one step further than we have.
10 MR. HEAD L Does the Staff have any objection to
.+
11 that procedure?
12 MR. GOLDBERG:
I do not object to it, I don't think.
- Q'g 13 it 's necessary but I do not obj ect to it.
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14 CHAIR N LAZO:
Mr. Goldberg, can you conclude your e
15 remarks in two or three minutes?
~
16 MR. GOLDBERG:
Yes.
m 17 One of the things that the Staff is very concerned o'
18 about is this Special Board and eventually the appeal board 19 and the Commission ' basing its decision on this disqualification 20 issue :en a decision in district court in Cleveland which 21 ultimately may be reversed on appeal.
22 The law is, and this is from the Supr ee Court,
'3
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23 that if you do that you're stuck with that decision even 24 though it's subsequently reversed on appeal.
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25 We want to avoid this Special Board and eventually s
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and if ultimat'ely Judge Krupansky's decision is reversed on 3
appeal and nothing is done here except adopted by collateral
_[
estoppel' or comity, we'll have the very unfortunate situation 4
5 of this cCommission basing its opinion on disqualification on 6
an erroneous decision and so the Staff wants to avoid that' 7
undesireable resu...
That's why we've suggested that the Board 8
stay the finality so that within our rules there can be a i
~
9 petition for reconsideration if ultimately the Sixth Circuit 10 reverses the district court in Cleveb.and.
11 Now there's an alternative to that.
An alternative 12 is to dismits the City's motion without prejudice to it refil-13 ing the motion.if ultimately the Sixth Circuit reverses th'e ~
).
district court in Cleveland.
The important thing, however, 15 is for this Special Board to guard against basing its decisio 16 on an erroneous decision and not having any relief available 17 to the party who is aggrieved.Under our rules because of the l
18 very short limitation of the time for filing petitions for 19
~
~
reconsideration there are two ways the Staff sees of accomplish 20 ing the result of avoiding the undesireable result of basing 21 your opinion on an erroneous decision, and that is to stay the finality so that within our rules there can be a petition 23 for reconsideration, or alternatively, dismissing without prejudice to refile if ultimately the Sixth Circuit reverses deed Reporters, nc.
25 on appeal.
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mpb18 1
MR. EEAD:
Mr. Goldberg, why don't we just stay I( )
2 the proceeding.as such and await the developments that may 3
well moot the disqualification issue?
Why take the step of
('
4 making a judgment when one may not be necessary by subsequent 5
developments?
6 MR. GOLDBERG:
I think the difference is, and the 7
key is.that it may not be necessary but there is no guarantee 8
of that.
If this Board refrains from acting until the possible 9
sale of MELP or until we get an initial decision from the ant 1 l
_}
10 trust board then in'the event the sale falls through or the 11 initial decision on the antitrust issues is a long way off 12 we will have accomplished nothing but delay and keeping in
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13 mind the appeal board 's instruction to expedite this matter I '
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14 think there is a danger there that ultimately there could be 15 more delay.
I agree that if things went "t'he right way" we 16 could dispose of this without the necessity for the Board ruling 17 on this difficult issue.
However, dismissing without prejudice 18 gives a finality to the disqualification proceeding, but yet 19 allows the City of Cleveland to come back in if ultimately-
~.
20 Judge Krupansky is reversed on appeal.
3.3 21 MR. GOODHOPE:
Couldn't they do that without the 22 hooker on the end of it, without making it '. final?
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23 MR. GOLDBERG:
Then we come to the difference (T
24 between dismissing without prejudice and with prejudice.
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25 E. GOODHOPE:
Or just dismissing, period.
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.:58 132 mpbl9 I
Can't they come back to the Commission and ask to 2
have it reopened at any time in the future?
The Commission 3
can do just about whatever it wants to.
(:8 4
MR. GOLDBERG:
They certainly could come back.
I 5
think it would make it easier on them if this Board gave some 6
indication that it.too was concerned with basing its op$nion l-7 on an erroneous district court opinion, and I can'E see any 8
reason why this Board would not want this Commission ultimately 9
to resolve this in the correct way according to the law. if 10 the Sixth Circuit Court of Appeals or eventually the D.C.
11 Court of Appeals, if this disqualification issue here is 12 appealed there ultimately in accordance with what the courts,
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14 about.
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15 MR. HEAD:
Mr. Goldberg, though, aren't there a 16 considerable number of cases in the res judicata collateral 17 estoppel area that indicate that a judgment is final even if 18 it's on appeal, and since we have that line of cases they 19 certainly don't indicate or the rule would be otherwise if they 20 said a judgment was not final and you should stay your hand on 2I a res judicata or a collateral
- estoppel case just because th'e 22 first case is on' appeal, isn't that correct?
~'
7.3 MR. GOLDBERG:
You're certainly correct.
I h.
24 MR. HEAD:
Aren't you adding an element, then, in G woi n.po,ws, Inc t-25 collateral estoppel that is not there?
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mpb20 MR. GOLDBERG:
No, sir, I'm doing precisely what
-w the federal co'urts do.
The federal courts according to a reference, by s
the way,that is contained in Mr. Gallagher's original motion says because the law is that the first testimony is final 6
even though it is on appeal and even though subsequently it is 7
reversed on appeal, because first result remains the law, the courts have grantei stays in the second forum when the first judgment is on appeal.
Alternatively, they have. dismissed without prejudice 11 the refile.
This is precisely what the di~ strict courts do 12 and this is precisely what I suggest it's proper for this Commission to do to avoid the result that that decision out 14 there is final even though it is on appeal and even though it' 15 may ultimately be reversed on appeal.
Right now we cru base 16 a decision,.if the elements of collateral estoppel were satis-17 fied, on Judge Krupansky's order and if it later is reversed 18 on appeal there is no relief here and that's what I'm concerned 19 about.
The courts say the only relief you have from a judgment 20 in a par' icular forum is a direct attack, not a collateral t
21 attack.
22 Thank you very much.
CHAIRMAN LAZO:
Thank you, Mr. Goldberg.
24 ferol Reporters. Inc.
Mr. Reynolds?
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ORAL ARGUI'II!T 0:I BEIIALP OF TIIE APPLICANTS 2
By Hillian Bradford Reynolds, Esq.
3 MR. REY!! OLDS :
fir. Chairman, mertbers of the
('
4 Board:~
5 I don' t really have too much to add to what
~
6 Mr. Gallagher has said.
He stated -
"ve" being the
~
7 applicants -- have stated our position in writing.
We do 8
believe the doctrine of collateral estoppel is applicable.
9 I would.merely make the observation with respect 10 to the oral argument that I have heard this morning by 11 Mr. Davis and Mr. Goldberg that they sound very much as
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12 though perhaps they are first drafts of arguments that, jys Y.;;:i*
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are ultimately to be presented in appeal contesting the" j:[
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a 15 Court.
C-4 16 I don't think that that, as Mr. IIead recognized 17 at one point, that that is the proper standard for col-18 lateral estoppel.
I9 We have an identity of parties, and I think that 20 we have an identify of issues.
We have a final judgment 21 in every sense of the collateral estoppel doctrine.
And 22 it seems to me that to tmf to sidestep an application of 23 that doctrine by attacking at this time that final judgment U%i n. pore.n, fx.
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24 misses the mark.
3
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25 I would like to focus just for a few short 7e ff
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'mcments on two of the questions from the Panel that seemed h'
2 to re-occurt One concerns Mr. Head's inquiry as to the 3
mootness problem that might be lurking, and uhat impact y) 4 that should have on action or inaction by this Special 5
Board with respect to the controversy -- or the motion 6
that is now before it.
7 The proposed or tentative settlement that is 8
now in the works in the District Court in Cleveland is
]
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9 one that requires approval by the Board of Directors of 10 the Cleveland Electric Illuminating Company.
And, as has 11 been indicated by Mr. Gallagher, that approval was given 12 on October 8th, 1976.
It requires legislative action by
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13 the City Council.
My understanding is that a bill has kk t'.~
hv-14 baen submitted but not acted upon.
And it's contem'pla,ted ~
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- 9 15 the City Council will approve by November 30th.
r, 16 In addition to that it also contemplates ap-17 proval by Judge Krupansky in the District Court following 18 a hearing to insdre that the settlement is one that is 19 consistent with the antitrust laws. --or not inconsistent 20
- with the antitrust laws.
And the time table for th'at parti-21 cular hearing has not been set.
And, indeed, if there is f
22 not approval by Judge Krupansky of the settlement, then
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23 obviously we're back to stage 1 in that litigation and it-24
@h will heat up again, I presume, unless a new settlement is
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25 restructured.
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So in terms if a time table it's a little mis-2 le ading, I think, to think in terms of that litigation 3
out there settling uith any finality on November 30th.
4 There's a January 10th target date for closing,
([ '
5 but it does require the court approval.
And to the extent 9
6 that other appro.vals may be necessary, for exanple by the 7
FPC or by the State Commission, Public Utilities Conmission, 8
those are also considerations that have to be cleared
,r _ ;
9 before thissettlement is going to be finalized or imple-10 mented.
11 MR. HEAD:
Mr. Reynolds, does the January 10th 12 date contenplate that Judge Krupansky will have his hear-A
)
13 ing on the settlement and approved it by that time, before 14 closing?
h;(
x 15 MR. REYNOLDS:
I believe that's the hope.
Al-16 though I don't think that--
Hell, the hearing by Judge 17 Krupansky has not been set.
And the hope is that that 18 will be the closing date.
19 I just want to add to the picture the other
~
20 approvals necessary, and indicate there has not been a 21
' precise ti$.e table set yet for those other approvals.
22
~
So in term.1 of staying your hand on this
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23 motion on the ground that the settlement might moot and j
24 therefore climinate a need for a ruling, I think that we iertl Reporters, Inc.
25 should keep in mind that the January 10th date is probably Q
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the earliest. And we are not yet in a position to say that
'h 2
this settler:ent is going to be approved by the court.
And 3
until there is that approval we don' t know at - this junc-4 ture whether the settlement will stick or will not.
5 It's a bit tentative, in other words, to' start 9
6 talking in terms of that as a critical date.
The Licensing 7
Board's decision, I do not have any feel for when we will 8
get that.
We have indicated to the Board that the plant t
~
9 schedules are such that the early part of next year is 10 uhen we anticipat'e Davis-Besse Unit 1 will be ready for 11 commercial operation, fuel loading for commercial operation.
12 MR. GOODHOPE:
Does it have an operating
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13 license yet?
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14 MR. PIYNOLDS :
The operating license-- It cannot 15 obtain the operating license until there is antitrust 2, - -
16 clearance.
And that is the clearance that we are awaiting.
17 In other words, until the Licensing Board 18
., sues its decision on the antitrust matters the license 19 cannot issue.
And all other clearances have beer $ given.
20
. And the commercial operation of the plant is nou scheduled 21 for the early part of ' 77.
So we would anticipate, or we 22 would hope -- and we have indicated to the Licensing
( ~#
23 Board, if at all possible, given that schedule, that an 24 antitrust decision issue prior to January 1st, '77.
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l 25 MR. GOODI! OPE :
Well there's no doubt the anti-u'
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trust Board could go ahead and issue its decEsion regardless h
2 of uhat we have done, whether we take action here or not, 3
this Board.
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4 MR. REYNOLDS :
I think that's correct.
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5 I was looking at the question from the other side.
If they e
6 issue their decision then what impact would that have on 7
the action that you might take.
And I was trying to first
~
8 indicate what dates we're talking about.
Because one of 9
the alternates was perhaps to sit on the motion for sone 10 period of time.
And obviously that decision by this Board 11 would have to depend first on what period of time we were 12 looking at.
And I was indicating that I think we are not--
v
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13 before we even reach the question of whether those two 1
r:m' 14 activities could moot the present motion on disqualification t
15 we have to program in.the fact that we're probably talking 4
16 about at least January '77 before the question of mootness 17
' arises.
The Licensing Board is aware of 19 the proposed operation of the plant?
20 MR. REYNOLDS:
Yes.
We advised them of that.
21 And we're keeping them advised as that schedule changes.
22 It has ' changed a couple of times.
i,M i
23 Now it's my own belief that this Board should 1
24 not' stay its hand on the motion on the possibility that deral Reporters, Inc.
U 25 any one or both of these actions might moot the controversy.
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I guess I really feel h uite strongly about that, primarily wb6 1l i
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because I think that thin Board has a responsibility to 3
Squire, Sanders and Dempsey -- since that law firm has been c'
4 charged with what I would consider in this profession as
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5 probably one of the most serious charges that any law a
6 firm can face--to treat the motion and to resolve the 7
issue and not to let it sit on th back burner, if you 8
will, in the hopes that perhaps it will go away.
9 I think that it's a little dif ferent posture --
10 and perhaps it's becacce I'm so close,to the fact that we're 11 talking about disqualification of attorneys and the kind y
12 of charges, it seems to me it's a little different posture
,:. 5
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13 than the one the Board might have with respect to some_ - it g e
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14 other type of issue.
And I personally feel that for that
+
15 reason the Board should cone to grips with the motion and
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16 should resolve it.
17 And ifindeed all the elements of collateral 18 estoppel are present, as I believe they are, and as I believe 19
- the papers demonstrate, then it seems to me that 'there is.
20 a responsibility for this Board to go ahead and rule on the 21 motion.
That's a reason that I would give for why I would 22 urge that,you take action.
23 f1R. HEAD: Well, fir. Reynolds, I understand that 24 to a certain extent. However if the ba$is 'for our dfsmissal p
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ruled as he did in Cleveland, that is not exactly removing
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2 a ' cloud of n:aking a decision on the meries by this Board 3
that there was no. unethical conduct, is it?
4 11R. REYNOLDS :
I believe it is.
And that
{.
5 goes to the identify of issues and a question that, earlier on, Mr. Goodhope raised.
And I think that's precisely 6
7 uhat that does do.
Because what you have determined by 8
dismissing on collateral estoppel is that the issues are 5
'N-9
~ identical here to the issues tliat were identical there.
10 And I'm now talkihg about the disqualification issues.
11
!!R. HEAD:
Yes.
But aren' t we in substance 12 merely accepting the Judge's resolut n
as opposed to
. g,4 13 naking our own independent decision, and therefore there
~
14 is no further removal of the cloud?
'" Y
'", M 15 riR. REYNOLDS :
Except that the whole philosophy-16 behind collateral estoppel, as I understand it, is that 17 there's no point in litigating and re-litigating and re-s-
18 litigating in any number of tribunals or forums the same 19 issue over and over again, especially in view of the fact 20 that y.ou have a tryer of fact, he has heard all the evi-21 dence, and the likelihood is that the outcome is going to
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22 be identical.
I mean that's the bedrock for collateral 23 estoppel.
24 It seems to me if this agency or another court Ml Repor*ws, Inc.
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same allegations against the same party, and it says that
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has already,been fully litigated by this tribunal over
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3 here and we' re going to accept its judgment, that it does 4
remove. the cloud; except to the extent, let's say, that 5
there is ultimately a reversal of the first tribunal, and when w6're in a much different situation, then collateral
(_
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7 estoppel.
8 But I really very definitely feel that it does-
,1 remove the cloud because of the identity of issues and of 9
10 the parties involved, j
11 As I understood your question,?tr. Goodhope,.
12 you were really asking whether the identity of the anti-
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14 controversy are the same.
And I would like to speak to s,;, 4 15 that, because I do think it is a relevant question in
.}.6 15 terms of Judge Krupansky's finding of a substantial relation-17 ship.
y 18
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MR. GOODHOPE:
That's what I was getting at.
19 I thought he answered: it.
He said Yes.
ftR. REYNOLDS:
You mean Mr. Gallagher answered?
20
- MR. GOODHOPE:
Yes.
He said they were identi--
21
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He said the -- I don' t want to put'words in his mouth....
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He'11 defend himself.
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MR. REYNOLDS :
Let me give you what my under-([
2 standing is, 3
Judge Krupansky that the conduct -- that there 4
was no. substantial relationship ~between the conduct of 5
SSD and the antitrust issues before him.
The antitrust 6
issues before him in one sense differ from the antitrust.
s 7
issues before this Board in that the issue before him is 8
whether there's a violation of the antitrust laws ultimately, 9
and before this. Board is whether there's an inconsistency.
10
. I dah't view that' as the kind of difference that would 11 impact at all on the substantial relationship question.
12 The point is, I think, that the allegatials flQ 13 by the City of misconduct by CEI are identical in this pro-0;
+
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And I say it that way '
15 because there are additional allegations that were aired by 16 the City out in Cleveland that were not before the Board 17 here.
3 18 So,-if anything, his finding of no substantial 19 relationship out there makes it crystal clear-there is not 20 one here.
21 And I would also note that -- and this does not 22 alter what I just said, but it is an additional observa-23
. tion: the antitrust board in the antitrust proceeding here 24 removed from this case.because of the City's pleadings an Moral Reporten, lec.
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.Dempsey,with respect to the performance of that firm for
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CEI in the bond activities of the City.
That was removed 3
from the NRC proceeding.
It was not removei.from the City
~
4 proceeding, and Judge Krupansky said there was no substan-S tial relationship even with that allegation in the proceed-6 ing.
7 I y point is, bas -; ally, --
8 I!R. GOODHCPE :
You're talking about the earlier'
+
9 time, the cut-off time.
~~
10 MR. REYUOLDS :
I'm saying that--
It really 11 involves after the cut-off time with respect to the '72 C;
12 bond matter., And what I'm saying is that this antitrust.[
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13 board in framing issues that were litigated in the antitrust
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14 proceeding removed from this whole antitrust proceeding
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15 that controversy and said "That is not an issue before
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16 this Board."
17 So in terms of finding a su'bstantial relation-18 ship, if you will, between what is the alleged misconduct 19 on the one hand of Squira, Sanders and Dempsey, and the 20 controversies before the Board on antitrust matters, there 21 is no possibility that the bond activity of Squire, Sanders 22 and Dempsey would have any substantial relationship to the 23 issues of anticompetitive behavior in this particular NRC 24 proceeding.
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. ;iR. IIEAD :
fir. Reynolds, wasn' t that I ng by
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the Antitrust Licensing Board, though, a procedural one
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2 as opposed to a substantive ruling that this was not an 3
antitrust issue before the Board?
I recall it just vaguely.
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4 But that's my recollection of it.
5 MR. REYUOLDS :
It was a procedural ruling
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6 which had substantive effect, because it precluded the 7
Ci';y from introducing evidence on the issue, on the basis 8
that the City had not included in its allegations that. N
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pleading, or that allegation. --not included in its 4.
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It had not included that in its September 5th
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~ It was a procedural ruling, but the substantive 15 effect of that procedural ruling was to remove that as an 16 issue in the ca.se.
r 17 The only point I'm really making in terms of 2
18 being clear on identity of issues: even if they were in 19 the case, Judge Krupansky came to grips with it and said 20 there's no substantial relationship.
There's even less of 21 a substantial relationship with respect to this particular 22 proceeding, because that was an issue, or an allegation 23 that was carved out and no evidence was introduced or 24 permitted to come in in the Antitrust proceeding on that 4 *rol hporte. Inc.
25 particular issue.
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So I just ennted to make that clear.
h 2
.I guess that the final thing to say -- and I'm
. 3 out of time, and I uon' t take much time with it.
If there 4
is an ultimate settlement out in Cleveland of the matters
{-
5 out there, I believe that does moot the matter here. '--in 6
direct response to your question.
7 I don' t believe that the decision of the 8
Licensing Board here is one that we can accurately say 9
would moot the controversy on disqualification.
I come m
'10 down differently ' n that than I do on settlement.
o 11
!!R. HEAD:
That might cause the City, though, 12 to withdraw the motion, is what I had in mind.
It really
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13 would not moot it.
Because there are appella'te procedures.
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,y 14 I should address myself to the City on that, I believe.
~f 15 MR. REYNOLDS:
Okay.
f 16 CIIAIRMAN LAZO:
Thank you. Mr.
Reynolds.
17 MR. IIEAD: !!r. Goldberg, I do have one point.
18
- This won't take very long, I hope.
19 There was one area that-- I realize we got into 20 a lot of discussion during your argument, and I don't 21 think you got to the point.
But you mentioned that even 22 if the elements of collateral estoppel were present in I
23 the action that the Commission -- this Board acting for 24 the Commission would have discretion to ignore the doctrine
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25 if it sau fit to do so.
And you indicated that you might 3
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have some authority for that proposition.
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.Could you, trithout elaborating too much, give 3
me' that authority whereby we would have the discretion to
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4 ignore the doctrine if we found the elements to be present?
5
!!R. GOLDBERG:
Yes, sir.
+
6 On page 5 of Squire, Sanders and Dempsey's 7
Motion to Dismiss the disqualificatioit proceeding 8
fir. Gallagher quotes a section from the 1953 edition of
, x.
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Davis' Administrative Law Treatise.
And let me read the 10 sentence that he has quoted, because it's significant.
11
" Ordinarily a court decision will be 12 res judicata in later administrative proceedings ~
?C.
(
13 in the same circumstances in which it will be i
14 binding in a later judicial proceeding."
Uc11 tbat sentence he chose to quote was the 15 16 first sentence of the first paragraph of Section 1811 of 17 Davis' Administrative Law Treatise.
The whole entire rest O~
18 of the section, some six and a half pages, discusses cases 19 which hold that an agency necd' not apply the doctrine of o
20 collateral estoppel even when all the elements are satisfied.
21 The very next sentence in that section, which 22 appears after the sentence which Mr. Gallagher quoted, was:
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23 "But this simple statement has some 24 exceptions which call for special comment."
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where administrative agencies refused to appiy the doctrine h
2 when. all the elements were satisfied and when they were 3
upheld on appeal.
(
So I would urge you to simply look at that F
4 5
section of Davis' Administrative Law Treatise, to look at 6
the 1970 supplement to Davis! Adbinistrative Law Treatise l-7 whe.re he discusses more cases and says that the trend of 8
the law is for agencies not to apply the doctrine of col-s.>
9 lateral estoppel even when all the elements are satisfied
,w 10 when there are reasons why it should not be applied.
And 11 he discusses the reasons why it should not be applied.
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13 right to relax or modify the doctrine in the appropriate 3 5-gg.
14 circumstances, and that the trend is for courts to apply ;.'[ g' 3 :,
15 collateral estoppel to administrative decisions more readily 16 than for administrative agencies to apply collateral estop 17 pel to court decisions.
7, 18
'So I would just urge the Board to read that
^
19 section in Davis and all the cases discussed and cited 20 therein.
21 IIR. IIEAD:. Thank you.
^
22 CIIAIRI!AU LAZO:
Off the record.
23 (Di'scussion off the record)
.)
24 CIIAIRI!AN LAZO:
On the reco: d.
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' ' MR. GOLDBERG:
I would just like to point, ~h
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Mr. Head, to one of our Appeal Board decisions which dis-()
2 cussed-res judicata and collateral estoppel.
And in that 3
Appeal Board decia:.on the Appeal Board recognized, too,
(',
4 that along with the cases Stat are cited in Davis, that 5
administrative agencies can indeed refuse to apply the doc-6 trine of collateral estoppel or relax or modif,' it if there 7
are appropriate circumstances.
And ~that is--
Let me give a
8 you the cite for that.
9 That would be Alabama, Pcuer Company, Joseph M.
10 Farley Nuclear Plant Units 1 and 2, ALAB 182, appearing at 11 7 AEC 210, 197.4.
12 MR. GOODHOPE:
Can you comment on what some
. ? M ;-
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13 of those appropriate circumstances are?
Are those matte'rs
~-,
14 which are within the expertise of the administrative agency?
15 MR. GOLDDERG:
That's certainly one, Mr.
16 Goodhope, and one of the main reasons when you are dealing 17 with the area of jurisdiction of a particular administrative e
18 agency, dealing with the area of the expertise of its 19 staff, it's certainly most appropriate for an administrativ,e 20 agency to refuse to apply collateral estoppel with respect 21 to a prior court adjudication of issues which are properly 22
(,
before th'e administrative agency.
23 However that's not the only reason.
Some of 24 w(Ch the other factors are public policy factors that weigh '
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a full airing and consideration of the issues and the' views 2
before the administrative agency.
And the Staff's position 3
is that the public policy factor here is that we're dealing
(
4 with the integrity of our licensing process.
And I will 5
not reiterate my argument.
But it certainly is a public
+
6 policy factor uhich weighs heavily with this Board making 7
up its own mind on the ultimate issue, and in allowing 8
the staff to participate in the resolution of that issue.
t 9
MR. GOODIIOPE :
I'd hate to be the attorney
~
10 arguing a case in the Circuit Court of Appeals, trying to 11 explain that the Nuclear Regulatory Commission had some 12 expertise in conflict of interest cases that the Federal,
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V 13 District Court did not have.
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14 MR. GOLDBERG:
I agree, Mr. Goodhope.
I'm 15 suggesting that, although that's the main reason why ad-16 ministrative agencies need not apply collateral estoppel, 17 there are other reasons.
And I think we come within the 4
18 other reasons.
19 The other reason is public policy grounds.
20 And I think they weigh heavily here for not blindly applying 21 collateral estoppel when there is in fact no identity of parties, and when a reversal of that District Court opinion 22 23 would leave this Commission with a decision based on an Q
24 erroneous decision with no right, no means of eliminating L'
'emi %e lac-25 that very unfortunate result.,Because only an appeal here
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could be on a collateral estoppel basis and whether or A)
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2 not it was proper.
3 CHAIRMNT LAZO:
Mr. Gallagher, you did reserve 4
a few moments for rebuttal.
5 REBUTTAL ARGUMENT ON BEHALF OF SQUIRE, 6
SANDERS RID DEMPSEY 7'
By Michaer R.
Gallagher, Esq.
8 MR. GALLAGUER:
Very briefly.
I find the things 9
that I marked as we went along were really answered so far 10 as I'm concerned by questions from the Board.
Il Let me just conclude by saying this:
The
---4.ng Board in its January 20th order recognized thab[..
12 7-
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13 t.ne motion filed by the City to disqualify Squire, Sanders 1
14 and Dempsey was untimely filed.
Any inconvenience that R.
i 15 results from delay in that filing is an inconvenience 16 which should be inrne by the City and notbf the Applicants,
17 or by the participants in this proceeding.
4 18 Similarly, we have the District Court judgment l9 on appeal.
Now there's delay with respect to that appeal, 20 and that delay, again, is not of SS&D's making but is 21 specifically of the City's making.
22 Squire, Sanders and Dempsey is entitled under
- J 23 circumstances where it has been charged with an indiscretion 4
to have the niatter finally disposed of and finally AettlEd.
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25 The doctrine of collateral estoppel requires. this finality.
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This Board is estopped, is what it says, from
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2 relitigating those issues.
Those issues, therefore, have 3
been finally determined.
And it's a matt r of 'this Board
/
4 making. that j udgment.
5 Mou when we deal with -- when one brings up 6
novel ' things at the last coment ono is apt to make a mis-7 take.
In discussing condy, I think it has no application
~ '
8 here, it s some novel application that I think is unwarranter 9
Suggesting a stay I think is improper, because we cannot 10 see doun the road, as respects staying the judgment, what 11 complications may arise.
s.
12 I think that may be sinilariv true, 'may it y
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13 please the Board, with respect to st.aying its ruling on
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11c're entitled to it under' collatera2
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17 entitled here.
And I submit that t. e ought to do what
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4 18 traditionally we're entitled to, ar.d not something which is 19 a little bit different and which m:ty present problems we
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6 20 cannot now presently foresee.
.21 CHAIIUIAN LAZO:
Thank you.
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22 fir. Davis.
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REBUTTAL ARGUIICMT ON BEIIALF OF TIIE 2
. CITY OF CLEVELAND 3
By James B. Davis, Esq..
(.S 4
!!R. DAVIS:
I Uould try and summarize my last 5
few points as follows:
a 6
Mr. Gallagher presses for collateral estoppel 1
7 but has cited no single case to this panel where collateral 8
estoppel was used on an issue of attorney disqualification.
9 I know of no such case.
10 The c'ases that come close to this situation
- 11 as any we kncu of give no automatic effect.
We cited 12 those in our brief and I won' t take those eny further. 't
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13 In a sort of a tangential response to_a ques- ("
@D N 14 tion by Mr. Goodhope a moment or two ago, I think that w
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15 the Nuclear Regulatory Commission is here in a position to 16 have perhaps more expertise than a Federal court, or at 17 least one Federal court;, on the question of appropriate
~
18 conduct for attorneys. And not simply because of the 19 personal decicions of Judge Krupansky but for the additional
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20 interesting reason, cited. in our brief, that the Code
~
21 of Professional Responsibility of the American Bar 22 Association is the standard of the nuclear Regulatcry Com-23 mission and is not the standard necessarily of the. U.S.
24' District Court for the Northern District of Ohio, Eastern V a n penm, see.
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That court, as I set forth in my brief, has
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no standard.
And this is an anomaly that does exist in 3
the federal sys tem.
A certain number of the local district O
4 couree.heve emogeed no oeficiet seandard.
5 IIe did indeed refer to some of the cases, and 6
he was certainly auare of what we thought was the lau.
But 7
hc didn' t seem to foll' w 'us.
o z-8 on the question of mootness I would say that [
4 9
I followed !!r. Goldberg and uns cheering him on all the 10 way down to his conclusion where I'm someuhat puzzled even 11 yet.
4-12 I feel that Uhat he is basically urging is t
, od,
h inappropriate, because I think the probabilities are that ]
13
-t 14 there will never be any independent review of Judge 15 Krupansky's order by the Sixth Circuit.
I wish that that 16 would be something within my control and something that I 17 could accelerate.
But I'm not longer in a position to call 4'
18 those shots.
19 tfe know there has been 'a stay of any further 0
20 proceedings in the Court of Appeals in the. Sixth Circuit.
21 If the settlement in Cleveland goes forward I think we
~
s 22 can abandon any hope of seeing any independent review there 23 of what Judge Krupansky did.
24 So fir. Goldberg's suggestion of an adoption of oral Reporters, Inc.
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stay I think is impractical.
I just don' t think that that's 2
going to settle anything.
3 3
I think really, although I venemently disagree J
4 with Mr. Gallagher that collateral estoppel has any role 5
here, I think this Board really needs to act one way or 6
another.
And I. feel it's ihappropriate, "r.
I! ad, for the 7
Board to duck and avait the outcome of the Licensing Board 8
. proceeding, d E..;; -
9 In disagreement with :.ir.
Reynolds.I strongly" j
10 urge that no matter what Cleveland does, and I have no Il reason to believe that the City is going to withdraw its 12 motion for disqualification here or anything of the kind. 7-Quite apart from that, what happens out in Ohio has no-Q_
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.t bearing on the Ituclear Regulatory Cocmission.
That major '
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We're awaiting the ruling 16 of the Licensing Board.
I7 The Antitrust Division of the Department of 4
~ '
18 Justice has a major stake in the outcome, of that whole I9 hearing.
They've invested years in it.
They are most co,
20 cerned about the precedents that will come out of it.
It
.21 is going. to be one of the major rulings in the whole area,
22 of antitz' st review by the Ituelear Regulatory Commission.
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23 It has a life of its own.
24
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- That,this major ancillary matter is unresolved-M i n.pwem. Inc.
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I think would, in one instance, have a direct bearing on ',
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the whole validity of the decision.
I think"it should be 4
resolved, and, additionally, pursuant to the instructions 9
2 3
of the Appeal Board.
4 I submit that it should be pursued, resolved,
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and resolved correctly and in consonance with justice for i.
6 the good of the puclear Regulatory Commission and for the f
7 future, for the future guidance of att6rneys before this
~
8 Board.
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9 For all these reasons Ithink you should adopt s
10 the expedited procedure that I suggest. *You should make t
11
'your ruling.
The City would feel confident that on the.
.c 12 basis of the evidence, the testimony, and not the Judge's 3.,
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13 Person conclusions from it, there would be but one possiblei pgQ
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I outcome and that vould be that the original decision of %g3 14 a
15 the Licensing Board would finally be upheld.
The evidence i
16 was overuhelming as to what happened.
17 And whether these be deemed to be remarks I
18 appropriate for an appellate court or not, it seems to me n
19 they are portinent here because of what we're dealing with.
20 We're. dealing with an extraordinary decision that doesn't i
I 21 deal with comity beyond a look at the basic evidence that 22 was presented.
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23 This Daard is not bound under any law that I
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l, 24 know to simply follow it.
It should look at the evidence.
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own conclunion.. And it can do this and do it promptly Q>
2 within a matter of some weeks.
And this is the course that 3
I urge the final outcome be.
O 4
MR. iicAo=
rtr. Ge11esher, if the acerd were to 5
turn down the motion -- and I cbn't mean to imply any pre-6 judgment at all by that remark.
You've heard the offer by 7
!!r. Davis that he would submit the case on the recoril with-y
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8 out discovery, the record made out in Cleveland.
Would i
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- 9 that be acceptable to Squire, Sanders and Dempsey?
10 MR. G)ELAGIER.
We certainly would agree with 11 him there would be no further discovery.
I don't see how 12 we could agree to violate what the law is.
And the' law
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13 says that this Board cannot relitigate a matter that has 'f S) s_-
Ny 14 already been settled.
15 And so I don't think there is any way that:'I i
16 can accede to his suggestion that this matter be submitted 17 to this Board f;r what in effect is an appeal from Judge C.
18 Krupansky's ruling, 19 MR. IIEAD:
I take that as a.'"No. "
o 20 MR. GALLAGIER:
Yes.
21 MR. DAVIS:
If I may,I would like to be very
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22 clear that that is a desperation offer by the City.
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Q 24 thoroughly based result, we would like to have our discovery.
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25 But I feel that strongly that if time considerations or s..
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about the rqcord we made in Cleveland, that we made our case, 3
that I would do it that uay.
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4 CIIAIIU!AN LAZO:
fir. 'Goldberg, does the Staff 5
have rebuttal?
a 6
MR. GOLDBERG:
We have nothing further.
7 CHAIRMAN LAZO:
Thank you, sir.
8
!!r. Reynolds?
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9 REBUTTAL ARGUMENT ON BENALF OF THE APPLICANTS 10 By William Bradford Reynolds, Esq.
11
!!R. REYNOLDS:
If I may:
I just have a couple 12 of comments.
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13 My first one is that, until Mr. Davis qualified qg 14 it as a desperation offer I thought that we were ready to 15 walk out of here with an easy decision, because with this
- 16 stipulation and his concession that there is no practical 17 likelihood of an appeal ever taking place, it seems to me 6
18 that that disposes of the whole issue of collateral 19 estoppel about as.
absolutely as it can be done,'and leaves 20 only the open question, if it is an open question, of 21 whether this Board in its discretion, notwithstanding all 22 the elements of collateral estoppel being pres'ent, can find c.
23 some basis for avoiding it.
24 I guess I'm not too clear which side of the O'iocol Reporters, Inc.
25 fence the Staff is on now, whether they're urging you avoid
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it or don't avoid it as a matter of comity or your discre-()
2 tion.
But. putting that aside I would simply say that 3
to the extent there is a suggestion that as a matter of 4
public policy all the elements of collateral estoppel being
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5 present there would be some reason for this Board to ignore 0
6 those elements, I would ask the Board to look again at 7
our filing of September 24th,1976 where we put forth in 8
very surnary fashion our views on the dismissal motion.
9 And we do there address in the last two pages the question'.
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10 of what would be in the public interest if indeed the col-11 lateral ' estoppel elements are present, given the posture 12 of the fiRC' litigation and the question of ' going forward. if t i,.i u
with a proceeding or an evidentiary hearing on disqualifik,f
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14 cation of a law firm from participating in a hearing which.
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15 is already now fully completed after seven month of trial 16 and all the issues have been fully briefed and ' submitted to 17 the Board.
18 CHAIRMAN LAZO:
Thank you, sir.
e 19 Hell the Board has nothing further on the argu-20 ment this morning.
We do wish to thank you.
Your views 21 have been helpful and well prepared. - And we do thank you 22
' for them.-
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23 There being nothing more, then we will adjourn.
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