ML19329D307
| ML19329D307 | |
| Person / Time | |
|---|---|
| Site: | Davis Besse, Perry  |
| Issue date: | 03/19/1976 |
| From: | Frysiak J, Rigler D Atomic Safety and Licensing Board Panel |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8002270897 | |
| Download: ML19329D307 (21) | |
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UNITED STATES OF AMERIC'A MAR 2 21976 > T NUCLEAR REGULATORY COMMISSION
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10 o ~~g Before the Atomic Safety and Licensing Board
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4 In the, Matter of
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THE TOLEDO EDISON COMPANY and
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Docket Nos. 50-346A THE CLEVELAND ELECTRIC ILLUMINATING )
50-500A COMPANY
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50-501A (Davis-Besse Nuclear Power Station, )
Unit 1)
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THE CLEVELAND ELECTRIC ILLUMINATING )
Docket Nos. 50-440A COMPANY, ET AL.
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50-441A (Perry Nuclear Power Plant,
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Units 1 and 2)
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ORDER CERTIFYING RULING IN SPECIAL SECTION 2.713 PROCEEDING By Order of Jaunary 19, 1976, this Board entered an
, order of suspension and disqualification in these proceedings of the firm of Squire, Sanders & Dempsey (the " Firm"), counsel for Applicant Cleveland Electric Illuminating Company.
This order was issued pursuant to a motion for disqualification fi'ed on November 20, 1975 by the City of Cleveland (City).
Board member Smith dissented on the merits to this action of the Board.
As required by the provisions of Rule 2.713, the order of suspension was stayed pending opportunity by the affected firm to be heard by another presiding officer.
By Order of February 24, 1976, a Special Atomic Safety and Licensing Board found no evidence of unethical conduct by the 8002 270[f 7 g
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. Firm, dismissed the charges preferred by this Board and vacated the order suspending counsel. The Special Board indicated that the City should be referred to the Bar Disciplinary Authorities in the State of Ohio in the event it wished to further plead and prove its claim of alleged unethical conduct.
See Board Ruling In Special
- 52. 713 Proceeding, p. 16.
Special Board member Luton filed a separate opinion stating:
that Section 2.713(c)(2) is not intended to embrace attorney conduct where Commission action with respect to that conduct would not reasonably further the agency's mission.
Separate opinion at 10.
The majority of the Special Board likewise concluded that:
If such an analysis and conclusion [ appearance of impropriety] had been rendered by a juris-dictionally-competent bar association grievance committee, we would have no procedural quarrel with it.
However, we seriously question a licensing board's jurisdiction to adjudicate
' appearance of impropriety' cases.
Special Board Order at 7.
It is apparent that an important and novel jurisdictional question has been raised.
Fairly construed, the two opinions of the Spe'cial Board lead to a conclusion that the Commission may lack jurisdiction to suspend attorneys for unethical actions occurring without the forum of Commiasion proceedings notwith-standing any irpact these occurrences may have on representation
, before the Commission.*
This jurisdictional basis for the decision of the Special Board, together with the holding that no evidence supports the finding of this Board of unethical conduct, present significant policy issues of first impression in this Commission.
Because of the importance of attorney representation to the conduct of the entire proceeding (now well into the hearing stage), we indicated at the time of oral argument that certification would be considered.
Both the Firm and the City indicated to the Board that in the event of an adverse determinacion, the losing party desired certification.
See Memorandum of Squire, Sanders & Dempsey Opposing Motion for Order of March 10, 1976, p. 2.
EVALUATION OF $2.730(f)
STANDARDS TO THE DISQUALIFICATION DECISION We recently have had occasion to consider the Memorandum and Order of the Appeal Board of February 26, 1976 in which Applicant's Nbtion for a direct certification under 10 C.F.R. 2.718(i) was denied summarily.
The Appeal Board eschewed the role To be sure, the majority opinion emphasizes that they are not holding that a conflict of interest case may never justify invocation of a Section 2.713 remedy.
Nonetheless, there is a significant difference between the criteria under which the separate board majority envisions invocation of the remedy and the standard applied by the initial Board.
Although there was a dissent on the merits, no member of the initial Board questioned the Commission's jurisdiction to require suspension in the event a conflict situation as alleged to exist by the City is established.
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. i of day-to-day monitor and indicated that neither an incorrect ruling nor potential prejudice resulting from that ruling require the intervention of the Appeal Board except in unusual circum-stances.
Neither does the mere possibility of reversal on appeal justify constant supervision by the Appeal Board over Licensing Board rulings.
Further, in Commonwealth Edison Co. (Zion Station, Units 1 and 2), 6 AEC 258, the Appeal Board set forth the criteria that an issue worthy of certification involve an important or overriding issue of law or policy.
With respect to the Zion j
opinion, we note the Appeal Board's observation of useful precedent arising out of federal judicial proceedings pursuant to 28 U.S.C.
Section 1292(b).
Accordingly, in deciding whether to certify the matter of attorney disqualification, we have been mindful of the
. standards enunciated by the Appeal Board and, in addition, have measured the applicability of Commission standards against attorney I
disqualification appeals brought pursuant to Section 1292(b).
Turning first to $1292(b) considerations, we find that notwithstanding earlier disagreements among the various circuits relating to the extent to which interlocutory appeal to review a disqualification order is appropriate, there is increasing agree-ment that because disqualification involves separable and final adjudication of rights independent of the cause of action itself, interlocutory appeal is proper.
The principles underlying this rationale were articulated in Cohen v. Beneficial Industrial Loan l
. Corp., 337 U.S. 541, 546 (1949).
The Cohen rule has been adopted with respect to disqualification orders by the Second Circuit *, the Third Circuit **, the Tenth Circuit *** and the Fifth Circuit.****
Each of these opinions recognizes the " finality" of the disquali-fication order as a collateral determination independent from the actual subject matter of the proceedings.
These cases also concen-trate upon the practical considerations singled out by the Court in Cohen relating to a certain small class of decisions which are of sufficient importance to require immediate appellate considera-tion.
337 U.S. at 546-547.
In the instant proceeding, we are confronted with an issue of law and policy important to Commission policy and not dependent upon the outcome of the central proceedings before final resolution.
At the same time, resolution of the disqualification question may prevent relitigation of the issues in controversy for factors unrelated to the Board's consideration of the issues them-selves.
The ruling of the Special Board has called into question Silver Chrysler Plymouth, Inc. v. Chrysler Motors Corp., 496 F.2d 800 (2nd Cir. 1974).
Green v. Singer Co., 509 F.2d 750 (3rd Cir. 1971).
Fullmer v. Harper, 517 F.2d 20 (10th Cir. 1975).
United States v. Garcia, 517 F.2d 272 (5th Cir. 1975).
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. the jurisdiction of this Commission to entertain certain disquali-fication motions and involves the intended scope of Rule 2.713.
The jurisdictional question alone suggests a greater need for immediate appellate review.
ULTIMATE DISQUALIFICATION AUTHORITY Assuming that the conduct in question is within the Commission's jurisdiction, the question then arises as to how disqualification pursuant to that jurisdiction may be put into effect.
Two boards must become involved before any disciplinary order can become final.
However, Rule 2.713 is not entirely clear with respect to the status of an order of suspension in the event the Special Board finds that charges preferred under 2.713(c) should not be sustained.
The Special Board construed its authority to include the dismissal of the charges and the vacation of the sus-pension and entered an order to that effect.
Special Board Ruling at 18.
By Motion of March 1, 1976, the City of Cleveland moved for enforcement by this Board of the order of suspension, construing.
the role of the Special Board as merely advisory.
The Firm and the Staff contest the City's reading of the rule.
Thus, we are called upon to decide yet another issue of first impression; namely, the extent of our authority to order a Rule 2.713 sus-pension notwithstanding an adverse recommendation from the Special Board.
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7-The Rule itself offers no guidance nor do we find any other indication by the Commission as to what the intended effect of the rule is to be.
?n balance, we conclude that final authority must vest with the initial Board, for it is that board which is charged with the ongoing conduct of the proceedings.
To hold that final authority vested in the Special Board would undermine the ability of the initial Board to maintain control and to protect the integrity of its proceedings.*
Although we conclude that ultimate authority with respect to enforcement of a suspension order must vest with the Board before which the hearing is proceeding, there is a sufficient lack of clarity and the issue is of such importance that we believe this question must be certified.
Obviously, the initial Board would have to give great deference to the decision of the Special Board prior to taking any action on an order of suspension in order to give any rational effect to Rule 2.713 as presently written.
If the initial Board were free to disregard the findings of the Special Board, there would be little purpose in the requirement that a separate hearing on the charges be held.
In those instances in which the initial Board does not accept the conclusions of the Special Board in a disqualification contest, it seems almost inevitable that the issue be certified for immediate resolution.
The need for certification would be lessened where the two boards are in agreement, but, as discussed earlier in this memorandum, the collateral nature and finality of disqualifica-tion decisions may place them in a special class of rulings deserving certification in almost every instance.
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- PROCEDURES BEFORE THE SPECIAL BOARD Having decided that the initial Board should be the ultimate arbiter of disqualification, we then must decide the motion for the City of Cleveland that we enter an order of sus-pension notwithstanding the ruling of the Special Board.
During the course of the proceedings before the Special Board, additional first impression questions as to the nature of that hearing and the scope of evidence to be received were raised into question.
Basically, there was disagreement between the Special Board and the parties with respect to whether additional evidence relating to the charges preferred by the initial Board should or could be received.
At the hearing before this Board on December 31, the City of Cleveland took the position that it would be entitled to intro-duce new evidence before the Special Board in the event the initial Board failed to prefer charges.*
The Firm, at the hearing before the Special Board, not only attempted to present evidence but made a proffer of evidence to preserve its objection to the refusal of the Special Board to admit that evidence.
It should be noted, however, that this asserted right was grounded upon a contention that the initial Board would be in error in failing to consider certain of the Firm's documents which had been withheld from production to the City under claim of privilege.
Parenthetically we note that the initial Board reviewed all privileged documents alleged to be connected with the Firm's representation of CEI and determined that they were in fact of a privileged nature and, further, that the content of those documents offered no evidence supporting the City's motion for disqualification.
Tr. p. s.*
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e We are of the opinion that the decision of the Special Board not to permit the parties to introduce additional evidence was correct.
Were it otherwise, the initial Board would be forced to prefer its charges based upon an incomplete record, and in circumstances where the initial Board is not the charging party, there is no logical basis for placing the Board on this posture.
Such a procedure would lead to inefficiencies in the administra-tive process.
The parties would have an inducement to hold back evidence until they had an opportunity to examine the decision of the initial Board, and the Special Board would be ruling upon matters not even called to the attention of the Board charged with the proper conduct of the proceedings.
THE DECISION OF THE SPECIAL BOARD We now examine the question of whether we should vacate our order of suspension in light of the findings and conclusions of the Special Board.
Those findings and conclusions not only represent the. unanimous opinion of the Special Board that the charges drawn by this Board lack merit (Board member Luton filed a separate opinion setting forth the basis of his reasoning), but we must also consider the articulate dissent of Board member Smith to our initial order.
Thus, we begin by considering whether the f'.o ung that our order cannot be supported does not require us o va Ata that order.
We have already stated our di.sagreemcat with the Special Board with regard to at least one primary basis for its order, the
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. jurisdiction of the Commission to order suspension based upon allegations such as those now before us.
The Commission's decision in Northern Indiana Public Service Comnanv. ALAB-204, 7 AEC 835, 838 and Louisiana Power & Lizht Ccmpany, ALAB-121, 6 AEC 319 cited in the March 1 Motion of the City of Cleveland, at least suggest a wider jurisdiction than that contemplated by the Ruling of the Special Board.
More importantly, the jurisdictional limitation seems inconsistent with the Commission's Rule 2.713(b) which requires an attorney to conform to the standards of conduct required in the courts of the United States.
To the extent that a court would order disqualification upon a finding that the City's allegations were supported by the evidence, the Commission by its own rule should do no less.
A second principal reason for rejecting the findings and conclusions of the Special Board is our disagreement with respect to the standard it employed in deciding whether there had been attorney misconduct.
In our opinion, we stated at nages 18, 19:
We hold as a matter of law that it does not matter whether the information exchanged can be proved or a2monstrated to have originated from confidential materials supplied by the client.
The Firm's answer in part turns upon the fact that materials relating to the operation and financing of the City's electrical system which the Firm utilized in rendering advice to CEI were available fron public sources as well as through data supplied by the City.
This does not resolve the problem.
As a practical matter, there is no way of i
t
t Douglas
. Riglet, C irman Dated at Eethesda, Maryland
'c this arth day of March 1976.
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SEPARATE OPINION I have not joined in the order certifying the disquali-fication matter primarily because I continue to disagree with the majority's conclusions regarding the merits of the controversy.
My opinion, as set forth in the memorandum dissenting from the Board's initial order of suspension, remains essentially unchanged.
However, with some reservation I concur with the Board's action certifying questions of NRC jurisdiction, special board's authority, applicable standards of attorney conduct, and whether the order of suspension on its merits may be upheld.
Certified question Number 1 relates to the Commission's jurisdiction to promulgate rules controlling attorney conduct.
Member Luton of the special board has accurately described our jurisdictional reach (thus the scope of 52.713) as
"...not intended to embrace attorney conduct where Commission action with respect to that conduct,would not reasonably further the i
agency's mission."
He states also that some conduct reached by 52.713 could occur out of the presence of the board l
provided it "... bears substantially and directly on a matter which is before that Board."*
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- Mr. Luton's separate opinion, p. 10.
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MAR 2 21976 > I 40 g
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. All members of both boards seem to accept this standard and agree that the conduct questioned in this case occurred beyond the perimeter of this forum.
Differences arise in evaluating whether the challenged conduct substantially and directly relates to the proceeding before this board.
My opinion, as stated earlier, is that there was insufficient proximity between the 1966 incident and this proceeding to invoke NRC jurisdiction.
The majority of this board applied the correct standard of jurisdiction (but to incorrect findings of fact and to impermissibly narrow ethical considerations) in relation to the 1972-73 incident of dual representation.
Certified question No. 2 pertains to the authority of the special board to put into effect or to vacate an order of suspension.
I continue to agree with the majority of this board that the responsibility and authority rests with the initial board and that this authority is an important part of a hearing board's power to regulate he conduct of proceedings before it.
In addition, placing the, responsibility upon the initial board is preferable because it is that board which better perceives the factual background against which the matter should be resolved.
Moreover, while the language of $2.713
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. is confusing in some respects, this confusion does not extend to the question of which board has the final authority to suspend attorneys.
A hearing by "another presiding officer" upon charges preferred by the first presiding officer is a condition precedent to ordering the suspension of an attorney by the first presiding officer.
While I believe that the special board did not intend its ruling to be more than advisory, there is enough confusion and disagreement among the parties and between the two boards to justify certification of the issue.
Certified question No. 3 relates to injury and to confidential or public information shared with a client.
It is an appropriate consideration for certification, but it is too narrow to play the role assigned to it.
Certified question No. 4 suggests that the validity of the Board's order of disqualification depends upon the answers to questions 2 and 3.
This is not the whole situation.
i For example, it is true that Marketti v. Fitzsimmons, 373 F. Supp 637 (W.D. Wisc. 1974) is correctly cited by the i
majority for the proposition that a conflict of interest or a breach of duty can arise even where the client's affairs l
are not confidential.
But a conflict or breach of duty is
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,. - not inevitable in every dual representation of contending parties.
Our case cannot be decided upon a theoretical ideal in a void of other factors.
Also to be weighed are questions of motive, reasonableness, harm, injury to an innocent party, counterbalancing ethical considerations and the clean hands of the accuser.
Finally, we must also determine whether the relief sought by Cleveland is necessary and would be effective in regulating our proceeding.
Board action exceeding this purpose and result is beyond the jurisdiction of this Commission.
h (s'Ivan W. Smith Dated at Bethesda, Maryland this 19th day of March 1976.
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