ML19331B217
| ML19331B217 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 12/31/1976 |
| From: | Cherry M CHERRY, M.M./CHERRY, FLYNN & KANTER |
| To: | Atomic Safety and Licensing Board Panel |
| Shared Package | |
| ML19331B207 | List: |
| References | |
| ISSUANCES-CP, NUDOCS 8007280807 | |
| Download: ML19331B217 (27) | |
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g N 4 b s4 4 1 UNITED STATES OF AMERICA ! 3 NUCLEAR REGULATORY COMMISSION 1 8 y
% ef> - t BEFORE THE ATOMIC SAFETY AND LICENSING BOARD /
A 03 In the Matter of )
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CONSUMERS POWER COMPANY ) Docket Nos. 50-392
) 50-330 (Midland Plant, Units 1 and 2) )
MEMORANDUM OF INTERVENORS, OTHER THAN DOW CHEMICAL COMPANY, CONCERNING PENDING ISSUES This memorandum is summitted by all of the Intervenors, other than Dow Chemical Company, in response to the Board's direction to the parties to brief questions concerning the production of documents and its invitation to the parties to
. address other pending issues. We deal herein with three issues, linked by the common thread of the uncompromising testimony of Joseph Temple: first, whether Consumers Power Company can validly assert the attorney-client privilege or the " work product" doctrine in connection with documents and testimony sought by Intervenors; second, whether as a matter of law the testimony of Mr. Temple (and the other facts which have been i
brought to light during these hearings, largely through Intervenors ' efforts) affirmatively requires immediate suspension of the Midland construction permits; and third, whether (and l
if so, what) sanctions should be imposed by the Board as a result of Consumers' persistent attempts to subvert the discovery process.
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4 THE PERTINENT FACTS All of the matters discussed in this Memorandum arise from, and must be seen in the light of, one salient fact comprised of several subsidiary facts. The salient fact is that--directly contrary to the impression Consumers has repeatedly sought to create--Dow Chemical Company is at best an extremely reluctant bride. Whatever Dow may have felt at the time of its " engage-ment" to Consumers (the 1967 contract)', it is now clear that we confront a shotgun wedding in which Consumers' threatened
$600 million lawsuit is the shotgun.
Contrary to Consumers' verbal acrobatics, that conclusion admits of no dispute. We know that on September' 8, 1976, Dow's
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Michigan Division (throughJoseph Temple, then head of the Division ,
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and now a member of the Operating ' Board of Dow-U.S. A.) strongly urged that Dow withdraw completely.from support of the. Midland nuclear facility (Board Ex. 1). We know that since September 8, 1976, Mr. Temple has not changed his mind in the least, nor has Dow's Michigan Division changed its official position as stated by Mr. Temple (Tr. 387, 409-10). We know that Mr. Temple, and indeed the entire " negotiating team" drawn from his Division to deal with Consumers, were not persuaded to alter their September 8 conclusions even after a lengthy meeting with Consumers, at which Consumers presented all of the information it had bearing on the alleged advantages of the Midland nuclear facility (Tr. 388).
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In fact, we know that, but for Consumers' threat of a lawsuit, Mr. Temple would recommend todcy that Don terminate its relation-ship with Consumers (Tr. 415-17), and we know that the tentative and temporary rejection of that recommendation by the Operating Board of Dow-U.S. A. was apparently based all but exclusively on that threatened lawsuit. (Tr. 432-35; see also Tr. 460, pointing out that the Operating Board has never disagreed with the Michigan Division's reasoning, or the facts on which the reasoning was based.)-
The only difference of opinion, so far as this record shows, concerns the weigbt to be given to Consumers' threat-, or, to put it another way, concerns whether the shotgun Consumers is
. brandishing is actually loaded. Even Consumers' threats, moreover, have produced at most only a highly tenuous and temporary Dow decision to acquiesce in Consumers' demand: as Mr. Temple repeatedly testified, "any significant change that might take place from the current conditions--that could include almost anything--would cause Dow to re-evaluate its position entirely."
(Tr. 323; emphasis added.) -
A number of the reasons for Dow's remarkable reluctance are already of record, even though Mr. Temple's testimony is not yet concluded. They reflect sound common sense. Mr. Temple, together with his negotiation team, decided (and specifically so informed
! . Consumers) that "there [is] neither a probability nor probably even a possibility that the Midland nuclear plant would be advantageous to the Midland plant of the.[Dow] Michigan Division."
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Mr. Temple identified eight separate reasons for his conclusion-- '
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reasons which, we repeat, Consumets' intensive sales efforts
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have not shaken in the least: . 1
- 1. . . . (I]f one looks at the record of the construc- ,
tion of the Midland plant, one can readily see the l initial cost was estimated to be about $256 million.
"The latest cost estimate, according to our records--
. that'.s about the eighth one--is that it will cost a billion 670 million dollars . . . [and] we've heard higher numbers." (Tr. 406-07'.)
l 2. "The plant was supposed to start up in 1974, 1975.
It's now supposed to start up in 1982. I don't know whether it will or not." (Tr. 407. In this connection,
- it must be borne in mind that the Michigan Air Pollu-tion Control Commission has authorized continued operation of Dow's existing facilities only until 1980; that the MAPCC apparently would like to re-examine even that lLnited authorization; and that neither Dow nor anyone else has any reason for assuming that the MAPCC will look with favor on still a further extension of the 1980 cut'off date. See Mr. Temple's Direct Testi-mony (following Tr. 220 at 4-5; see also Tr. 363-65, 404-05.)
- 3. "The ability of Consumers Power to finance the ~
, . construction of the plant was a question in our minds, strictly on the basis that they once did not have the ability to maintain their construction schedule. . . And it was a high inflationary period where Consumers had particular difficulty in financing the plant back in '74 when it shut the job down--or drastically reduced the job." (Tr. 407. It should be noted that Consumers' financial condition seens now to be little, if at all, better than it was in 1974. Indeed, Consumers told Dow at the September 24, 1976 meeting, that collapse of the Midland proj ect might result ,in Consumers' bankruptcy.
Tr. 434-35.)
! 4. "I think another factor is what really is the cost of the nuclear fuel going to be in the future? I assume that . . . we'll probably end up with higher fuel costs."
(Tr. 407. In view of the recent decision of the Ford Administration concerning government participation in fuel reprocessing plants and the 5007. rise in the cost of nuclear fuel over the past two years, Mr. Temple's assumption seens highly probable. See Tr. 51-53.)
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- 5. "I would have to say that as I assessed my level of confidence in Consumers Power Company to meet their cammitments, I found that the level of confidence was quite low." (Tr. 408. It will be recalled that Con-sumers is now operating on its eighth coce estimate--
one some 400% higher than the estimate on which the EIS was based. Tr. 406; EIS at XI-6. It will also be re-called that Consumers' 1982 start-up date has already been pushed back yet another five or six months, as Mr.
Renfrow advised this Board in his December 27, 1976 letter.)
- 6. "I also have to say that we were concerned with regard to being totally dependent upon Consumers Power for process steam, particularly as we reflected on what had happened at Palisades." (Tr. 406.)
- 7. "In the event that the job continues on schedule, will further delays come about at the tail end because an operating license is required?" (Tr. 408. Given Consumers' history of shabby practices with regard to quality assurance and quality control matters, and its history of failing to provide proper information to the Commission, a contested operating license proceeding seems not unlikely. See, e.g., Consumers Power Co., ALAB-106, RAI-73-3, 182, 185, a'nd the November 26, 1973, letter from the Appeal Board to the Director of Regulation attached to the Commission's show cause order of Decem .
ber 3, 1973.)
- 8. "It must be emphasized that the tLmetable of the Midland nuclear plant is the critical factor . . . . Dow simply cannot rely on its antiquated, existing fossil-fired units for much longer, certainly not beyond 1984. Dow believes it is stretching the useful life of these units to their lLaits." (Temple Direct Testimony (following T~.
r 220), at 5.)
It will be noted that the Michigan Division's official conclusion that the Midland nuclear plant was no longer beneficial to Dow, and virtually all of the reasons for that conclusion, did not survive Consumers' ruthless censorship of Mr. Temple's pre-pared testimony--a censorship so drastic that on November 4, 1976, Dow expresse.d its concern that Consumers' redrafts of the Temple testimony "could be said to be misleading, or even
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. disingenuous", and insisted that the testimony be cast in a question and answer form for the specific purpose of making it clear that the testimony did not tell the whole truth (Ex. B):
"It now is clear that Mr. Temple is responding to specific questions asked by Consumers Power, rather '
than attempting to tell an all-inclusive story. Use
, of this form . . . also underscores the fact that those matters which were chosen to be covered by -
Mr. Temple on direct examination were chosen by Consumers Power and not by Dow."
In light of the facts set forth above, it is ineluctably clear that this Board's question "whether . . . any attempt was made to avoid a full disclosure of Dow's current position on che contract and of any other relevant facts" (Tr. 502-03) must be answered Igg. Dow does not contend otherwise.* Even Dow's initial draft of the Temple testimony (Ex. AA) is considerably less than candid, in light of Mr. Temple's testimony at the hearings. -
ARGUMENT I.
NEITHER THE ATTORNEY-CLIENT PRIVILEGE NOR THE QUALIFIED
" WORK PRODUCT" IMMUNITY FROM DISCLOSURE PROTECTS ANY OF THE DOCUMENTS REO.UESTED BY INTERVENORS.
At the outset, we had better define what we are talking about.
To begin with, the attorney-client privilege covers only communi-cations by a client to an attorney, not the reverse, and even
- Dow's brief regarding hearing preparation asserts (at p. 2) that the nature of the presentation of the Temple direct testimony was proper. Dow does not, however, assert that the nature of the preparation of that testimony was proper; instead Dow simply de- ,
clines to address that problem on the ground that Consumers called all the shots and Dow had "no responsibility" other than to assure
.that the testimony was accurate so far as it went. Li., p. 2.
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then is limited to cocmunications by the client to his own attorney, in the context of an actual request for legal adv' ice, and where the client expects that the communication will in fact be kept confidential. In particular, the attorney-client privilege does not extend to information obtained by an attorney from someone other than his client; it does not extend to " memoranda, briefs, communications and other writings prepared by counsel for his own use . . . [or] which reflect [his] mental impressions, conclusions, opinions or legal theories;" and it does not extend to "communi-cations between different parties or a party and counsel for another party." Hickman v. Taylor, 392 U.S. 495, 508 (1947);
8 WRIGHT & MILLER, FEDERAL PRACTICE & PROCEDURE (1970), S2017; see also United States v. United Shoe Machinery Corp., 89 F.Supp.
357, 358 (D. Mass.1950); Duplan Corp. v. Deering Milliken, Inc.,
397 F.Supp. 1146, 1159-60 (D.S.C. 1975); 8 WIGMORE, EVIDENCE (McNaughton Rev. 1961) 52292. It is well settled, furthermore, that the attorney-client privilege is to be " strictly confined within the narrowest possible limits." N.L.R.B. v. Harvey, 349 F.2d 900, 907 (4th Cir. 1965), quoting Wigmore, Supra, S2292.
The attorney-client privilege disappears completely, of course, whenever the allegedly privileged information is disclosed to a third party, even another corporate employee. See United States v.
Aluminum Co. of America, 193 F.Supp. 251 (S.D.N.Y.'1960); Duplan Corp. v. Deering Milliken. Inc., 397 F.Supp. 1146, 1172-74 (D.S.C. 1975).* .
- For privilege purposes, the only employees to whom disclosure can be made without destroying the privilege are those "in a position to control or . . . take a substantial part in a decision about any action "which the corporation may take upon the advice of the attorney
. . City of Philadelpia v. Westinghouse Elec. Corp., 210 F.Supp.
id3, 485 (E.D.Pa. 1902); see also Burlington Industries v. Exxon Corp.,
65 F.R.D. 26, 43 (D. Md. 1974).
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1 The " work product" doctrine, by contrast, is a judicially-created immunity from discovery designed to prevent lawyers from
. trying cases "on wits borrowed from the adversary." Hickman v.
Taylor, supra, 329 U.S. at 516 (opinion of Jackson, J.) . The sweep of the doctrine is quite narrow: It covers only documents and other tangible things; it does not cover facts contained in a document; and the docun M: covered must have been prepared by the party or his lawyer in actdal anticip'ation of litigation or for trial. Thus, "there is no work product immunity for documents prepared in the regular course of business rather than for pur-poses of litigation," and " litigation" means actual pending or about-to-be-filed litigation rather than merely possible future lawsuits. 8 WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE (1970) .
$2024; Garfinkle v. Arcata Nat'l. Corp., 64 F.R.D. 688, 690 (S.D.N.Y. 1974); Burlington Industries v. Exxon Corp., 65 F.R.D.
26, 43 (D.Md. 1974).
Even where the " work product" doctrine applies, moreover, both case law and (since 1970) F.R. Civ. P. Rule 26(b)(3) make it plain that discovery can and should be allowed where the need for truth or considerations of public policy so warrant.
That is true, in fact, even where the facts which are sought are useful only "for purposes of impeachment or corroboration," let alone where the information sought is " essential to the prepara-tion of one's case" or where public policy mandates full candor.
Hickman v. Taylor, supra, 329 U.S. at 511; Duplan Corp. v. Dpering Milliken, Inc., supra, 397 F.Supp. at 1168. F.R.Civ.P. Rule 26(b)(3) authorizes discovery on a similar showing: "that the party seeking 8
-s discovery has substantial need of the materials is the prepara-tion of his case and that he is unable without undue hardship to obtain the substantial equivalent.of the materials by other means."
As we will show, neither the " work product" doctrine nor the attorney-client privilege applies here.
A. The Attorney-Client Privilege Does Not Apply To The Doc.uments Inter-venors have Re-quested.
A moment's thought will show that none of the documents Intervenors have requested falls within the narrow ambit of the attorney-client privilege. To begin with, the documents are not communications by a client to- his own lawyer. Rather, the great bulk of communications run between non-lawyet personnel of Consumers or Dow, between lawyers themselves, or between employees of one of the two corporations and counsel for the other corporation.
As we have shown, the privilege simply does not apply to communi-cations of that sort. Furthermore, we know of no instance in which the requisite confidentiality of communication, in the attorney-client context, has been maintained with regard to the documents we seek. Indeed, Dow has explicity disavowed any such claim of confidentiality regarding any information it has disclosed to )
l Consumers; the same reason which prompted Dow to take that stand-- '
the adversary nature of the Consumers-Dow relationship--applies equally to information Consumers has disclosed to Dow or Dow's counsel. Dou Memorandum Regarding Hearing Preparation, pp. 13-16.
We are aware, of course, that Consumars attempts to pitch its entire " privilege" tent on the ground that it and Dow have a 9-
.m "mutusi interest" in this proceeding. Unfortunately, that will not do. It is well settled that to preserve a claim of privilege in such situations, the two parties must share precisely identical !
legal interests, not merely similar interests, and that the interests must be legally rather than economically or commercially I identical. See Duplan Corp. v. Deering Milliken,.Inc., supra, 397 F.Supp. at 1172-74; In Re Grand Jury Subpoena, 406 F.Supp. 381, 392-93 (S.D.N.Y.1975); Smale v. United States, 3F.2d 101,102 (7th Cir. 1924), cert. denied, 267 U.S. 602 (1925). Here just as in Smale, "the necessity as well as the wisdom" of Consumers and Dow maintcining separate legal counsel "is apparent throughout the record;" here as there, no " mutual interest" claim of privilege--
whether asserted by Dow or by Consumers--can possible succeed.
B. No"" Work Produ'ct" Immunity Covers'Any of the Documents Requested by Intervenors.
Just as with the attorney-client privilege, the. documents ,
Intervenors seek do not fall within the ambit of the " work product" limited disclos2re immunity. After all, we do not seek the mental impressions or legal theories of counsel for Dow or Consumers concerning this proceeding. To the contrary, we seek only facts (and,so far as they exist, Dow's and Consumers ' opinions and grout.3s therefor) concerning the Consumers-Dow contract and whether or not it has any continuing force; the likelihood that Consumers will be able to live up to its current cost and timing estimates for the Midland proj ect; and the validity or otherwise of Consumers' th$ eats to sue Dow.
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. None of those things fits the " work product" definition. The mere fact that some of the information Intervenors need may be
" hidden in an attorney's file" does not immuni=e it from dis-closure, any more than any fact can be Lamunized by the handy expedient of telling it to one's lawyer. As the Court of Appeals put it in the ruling affirmed by the Supreme Court in Hickman v.
Taylor, 153 F.2d 212, 223 (3d Cir. 1945), aff'd, 329 U.S. 495 (1947),
"...one is tempted to say that the lawyer's files are impregnable against any inquiry . . . . But that depends upon what the lawyer puts in them. A piece .
of a machine which has hurt someone, a document needed to show a fact, many things required in a lawsuit find their way from client's hands to lawyer's file and aie not to be concealed until the day of trial for that reason ~." [ Emphasis added.] '-
It is well settled that " documents prepared in the ordinary course of business"--a category which includes all or virtually all of the intraoffice Consumers and Dow documents which Intervenors seek--
i are not immune from discovery on " work product" grounds; it is also settled, even in the context of lawyers' opinions concerning litigation, that those opinions are not immune from discovery unless they relate to some current litigation. Garfinkle v. Arcata Nat'l. Corp., 64 F.R.D. 688, 690 (S.D.N.Y. 1974); Burlington Industries v. Exxon Corp., 65 F.R.D. 26, 43 (D.Md. 1974). Further-i more, disclosure of " work product" information removes the immunity, just as it destroys any attorney-client privilege. D'Ippolito v.
Cities Service 011 Co., 39 F.R.D. 610 ft.D.N.Y. 1965). Most if not all of the " opinions" concerning which Intervenors seek discovery, however, have been disclosed here, either by Dow to Consumers or by Consumers to Dow. Indeed, that was the very purpose of generating the opinion in the first place, particularly in the context of ,
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m Consumers' threatened . lawsuit For that additional reason, then, no " work product" immunity exists. .
C. Even if the Attorney-Client Privilege Or The " Work Product" Doctrine Applied Here, The Demands of Public Policy As Well As Intervenors' (And This Board's) Need For The Requested Information Compel Disclosure.
It must be kept in mind that this proceeding directly involves the public interest, and poses extraordinarily important questions concerning the public health and safety. It must also be kept in mind that Consumers stands before this Board not in the position of one who demands what belongs to him of right, but rather as a licensee which bears the burden of showing that it is entitled to get, and to keep, a privilege. Manifestly, a correct decision on whether the privilege should or should not be granted depends at the very least upon complete candor concerning all of the facts.
Both the public interest involved here and Consumers' ' status as a licensee compel that conclusion.
These things also compel the conclusion that neither Consumers nor Dow can be permitted to use the attorney-client privilege or the " work product" doctrine as a means of preventing Intervenors and this Board from learning the whole truth. We have pointed out before that these privileges are to be kept within the narrowest possible compass. N.L.R.B. v. Harvey, 349 F. 2d 900, 907 (4th Cir.
1965). We must also point out that neither privilege can override the demands of public policy. Duplan Corp. v. Deering Milliken,Inc.,
397 F. Supp. 1146, 1168 (D.S.C. 1975); Garner v. Wolfinbarger, 430 F. 2d 1093 (5th Cir. 1970), cert. denied, 401 U.S. 974 (1971);
see also Bailey v. Meister Brau, Inc., 55 F.R.D.211 (N.D. Ill. 1972).
It would be absurd, for instance, to contend that Dow or Consumers can use claims of " privilege" to hide from this Board -
evidence (or even their own opinions) that the Midland nuclear plant is unsafe. Given the extraordinary importance of the Consumer,s-Dow relationship in this proceeding -- a relationship, as we have pointed out, on which virtually'the entire present design and location of the Midland Plant are based -- it is equally absurd to claim that any " privilege" prevents this Board from learning what Consumers and Dow actually believe about the current validity of their con-tract, the prospects of Consumers' successful performance under it,-
or whether Consumers' litigation threats (almost the only thread still holding the two companies together, so far as appears) are anything more than bluster. These issues, and the information Intervenors seek concerning them, go to the very heart of the Dow-Consumers relationship and thus to the core of the cost-benefit analysis in this case.
Obviously, Consumers and Dow are the best, if not the only, sources for information concerning the various statements each has made about that relationship. Indeed, Consumers itself raised the entire subject in this proceeding -- and thereby waived any " privilege" claims concerning it -- through its demand for and repeated re-drafting and manipulation of the Temple testimony. Consumers cer-tainly cannot now be heard to claim that " privilege" precludes dis-closure of the truth about that testimony or the matters contained in i 13-
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In short,' the attorney-client privilege and the " work product" doctrine are not applicable here, because the documents Intervenors seek do not fall within the narrow scope of those principles. Even were thsc not true, moreover, neither doctrine can properly be i
i nvoked here. That information concerning the Consumers-Dow relationship (as well as other matters raised by Intervenors) is essential, and that it cannot be obtained otherwise than from Dow and/or Consumers, is obvious. That both public policy and Inter-venors' (as well as this Board's) need for that information compel full disclosure concerning it is, we submit, equally obvious.
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II.
UNDER THE CIRCUMSTANCES OF THIS CASE, AS DISCLOSED IN THE HEARINGS SO FAR CONDUCTED, THE MIDLAND CONSTRUCTION PERMITS MUST BE SUSPENDED IMMEDIATELY.
It is plain that no construction license may be issued-or kept in force in the absence of a valid and accurate Environmental Impact Statement. Calvert Cliffs' Coord. Comm., Inc. v. A.E.C.,
449 F. 2d 1109 (D.C. Cir. 1971) . It is equally plain that -- as -
the Commission itself has repeatedly held --
...it is not proper to resolve a major environmental question on the basis of a set of facts existing in the past if there is good reason to believe that there may have been an appreciable, and material, change in the factual situation. "
Commonwealth Edison Co., ALAB-153, RAI-73-10, 821, 823-24; see also 40 C.F.R., Part 1500, 51500.13, Sierra Club v. Froehlke, 359 F. Supp. 1289, 1339-41 (S . D. Tex 1943) , and Environmental Defense Fund v. T.V.A., 468 F. 2d 1164, 1176 (6th Cir. 1972),
all pointing out that NEPA requires a continuing reevaluation and updating of environmental costs and benefits in the light of ,
changed circumstances and additional information.
Those principles apply doubly here. Even as to the " fuel ~
cycle" issues (which are only one aspect of this case) , the Commission's November 5, 1976 Supplemental General Statement of Policy specifically authorized license suspensions if application of the proposed interim rule "would tilt the cost-benefit balance against issuance of the license." 41 F.R. 49898 (Nov. 11,- 1976) .
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Further= ore, the Court of Appeals has made it plain that the drastic changes in the Dow-Consu=ers relationship are to be con-sidered in restriking the cost-benefit analysis here (Aeschli=an
- v. N.R.C., D. C. Cir., July 21, 1976, Slip Op.) :
"As this matter requires re~and and re-opening of the issues of energy conserva-tion alternatives as well as recalculation of costs and benefits, we asst =e that the Commission will take into account the changed circumstances regarding Dov's need for process steam, and the intended con-tinued operation of Dow's fossil-fuel generating facilities."
The Commission has itself twice instructed this Board to consider those very issues. Consu=ers Power Co., Dkts. Nos. 50-329, 50-330, Memorandum and Order, Nov. 5, 1976, pp. 1-2.
Thus the falling-out between Dow and Const=ers is as much a part of these hearings as the huge increase in :he projected cost of the Midland nuclear plant and the likelihood (made even stronger by Consumers' history of unfulfilled promises, as Mr. Temple testi-
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fled) of still further delays and cost increases over and above the several years and $1.5 billion by which Consumers' initial prc=ises have fallen short of the facts. All of these problems are also ;
highly (and vitally) relevant to the Board's decision whether or f not to suspend the Midland construction per=its: regardless of the way one frames the test ("public policy" or " equity", as Consumers says, or " likelihood of success on the merits", as the staff says (Tr. 146, 158]), it is obvious that a tilt in the cost-benefit balance or a showing that the full Midland plant is no longer needed warrants prc=pt halting of further construction. That folicws fer
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the same reasons underlying the Commission's authorization of case-by-case suspensions in its Supple = ental General Statement of Policy.
Given those basic principles, there can be no doubt that suspension must be ordered here. We already know that the Midland EIS is, to put it mildly, woefully out of date. We already know that the official position of the Dow personnel most intimately familiar with the Midland situation is that there is neither a probability "nor probably even a possibility" that the Midland nuclear plant will be advantageous to Dow -- and we also know that that conclusion was reached, and is now maintained, in light of an exhaustive reivew of all of the available facts. Tr. 388, 406-410, 418. Finally, we know that Consumers' approach to this proceeding has been at best " misleading, or even disingenuous" (the phrase is Dow's, not ours); that forcefully suggests that Intervenors' digging -- just as it produced much of the truth about Dow's position
-- will also lead to substantial information in other areas con-tradicting Consumers' pious pronouncements.
Accordingly, we have here, at a bare minimum, a firm showing of
'hn appreciable, and material, change in the factual situation" on which the entire EIS and cost-benefit analysis were based --
a change which totally vitiates both, because it cuts out the very core of the discredited conclusion that the benefits of the Midland project outweigh its (now quadrupled) costs. As the EIS itself admits (at XI-3) :
i "If the applicant were not to supply process steam to...Dow..., one unit of the Midland Nuclear Power Plant would be cancelled and consideration would be given to transferring the other unit to a different site, probably the existing Palisades site." [ Emphasis added.]
Under those circumstances, immediate suspension of construction <
1 is required. At present, the very raison d'etre of the Midland '
project is in doubt; before making a decision to continue with ,
the project, a thorough overhaul and updating of the EIS is i mandatory. 40 C.F.R., Part 1500, 51500.13. As the court held in
- Calvert Cliffs' Coord. Comm., Inc. v. A.E.C., 449 F. 2d 1109, 1118-19, 1128 (D.C. Cir.1971) , refusing to undertake that task "may effect-ively foreclose the environmental protection desired by Congress"
, l and turn these hearings, as well as Intervenors' participation,- into "a hollow exercise." See also Environmental Defense Fund v. T.V.A.,
468 F. 2d 1164,1176 (6th Cir.1973) :
" Congress' intent concerning the applicability of the NEPA to ongoing federal projects is most clearly stated in Section 101(b) , by the terms of which it is apparent that Cengress envisaged on-going agency attempts to minimize harm caused by the implementation of agency programs. This would accomplish not only constant reevaluations of projects already begun to determine whether alterations can be made in existing features or whether alterations to preceeding with the pro-jects as initially planned, but also the con-sideration of the environmental impact of the proposed agency action." [ Emphases added.]
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s Accord: Society for Animal Rights, Inc. v. Schlesinger, 512 F. 2d 915 (D.C. Cir. 1975).*
In short, Consumers neither can nor should be permitted to
. pour more and more money into the Midland project in the hope that, by the time these hearings are fully concluded, it can gleefully point to the near-completion of the project (already some 16% com-plete: Tr. 132) as a fait accompli, and to the amounts it has al-ready spent -- with singular imprudence, considering its dire mutterings of " bankruptcy" -- as " irretrievable commitments of resources." That sort of tactic is both illegal, see Union of Concerned Scientists v. A.E.C., 499 F. 2d 1069, 1084 n. 37 (D.C.
Cir. 1974), and prodigiously unwise if Consumers is really as financially shaky as it claims. In fact, in this very case the e
CourtofAppealswentoutofitswaytowarnConsumersandt.}e Commission against just those tactics. Aeschliban v.'N.R.C.,
D.C. Cir., July 21, 1976, Slip Op.
That warning must be heeded -- even more so in light of Consumers' egregiously " misleading" and " disingenuous" attempts i
After allj'at is part to cover up the truth in this proceeding.
of the " common lore" of regulatory proceedings that evidence withheld Indeed, the agency's obligation continuously to up-date and re- i evaluate environmental costs and benefits is now so well-settled that at least one federal agency, the Federal Highway Administration, '
has already adopted regulations formally incorporating these obliga-tions. Under these regulations, environmental impact statements are to be re-evaluated prior to proceeding with major project activities and are to be supplemented or revised in their entirety where there has been significant change in the social, economic, or environmental impact of any proposed action. See 23 C.F.R. 55771.14, 771.15.
J
by a utility is presumed to be adverse to it; and that presumption is even stronger where, as here, the utility has actually tried to tamper with the facts. Alabama Power Co. v. F.P.C., 511 F. 2d 383, 391 (D.C. Cir. 1974); United States for use of C. H. Benton, Inc. v. Roelof Constr. Co., 418 F. 2d 1328, 1331-32 (9th Cir. 1969);
McCormick, Evidence (2d Ed. 1972), 937.. As Learned Hand put it, "When a party is once found to be fabricating, or suppressing,
[ evidence), the natural, indeed the inevitable, conclusion is that he has something to conceal. . . " Warner Barnes & Co. v. Kokosai Kisen Kabushiki Kaisha, 102 F. 2d 450, 453 (2d Cir. 1939). In this case, that presumption compels the inference that the prospects for the success ~of the Midland project are even worse than we have al-ready found out -- and that a prompt halt to continued construction is all the more essential.
Finally, the fact that the existing EIS is manifestly inadequate, coupled with the fact that continued construction ipso facto renders the data on which a revised EIS must be based impossibly fluid (and, C< ? ..
we repeat, tends to skew the environmental analysis by moving toward an " irretrievable commitment of resources" in violation of Calvert ,
Cliffs', supra), affords still another reason for halting construc-tion. If construction is allowed to continue, then for that reason alone the cos,t-benefit analysis may change. A proper environmental "hard look" at that prospect, therefore, is mandatory before any decision to continue construction can be made. As we have noted previously, the environmental judgments NEPA requires -- and the
careful EIS-type analysis on which they must be based -- are not
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made once and for all at the onset of a major project such as the Midland nuclear plant. Rather, those judgments must be considered afresh at each distinct stage of the proceedings, before the green light to go ahead is given. To allow continued construction here before completing an up-to-date EIS would be to violate that settled principle. For this reason alone, not to mention the others dis-cussed above, prompt suspension of construction pending further environmental analysis and updating is required.
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e e
0
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III.
CONSUMERS' MANIPULATION OF THE TEMPLE TESTIMONY, ACQUIESCED IN BY DOW, REQUIRES THE IMPOSI-TION OF SANCTIONS BY THIS BOARD.
The damning evidence of Consumers' repeated a2 tempts to re-write the Tample prepared testLnony, and to suppress the full truth concerning the Dow-Consumers relationship--attempts which would very'probably have succeeded but for Intervenors' insistence on documentary discovery, 'and which even Dow describes 'as " mis-leading" and " disingenuous"--require.s no repetition. It is sufficient to say, as we have pointed out before, that there is sLmply no alternative to the conclusion that Consumers deliberately suppressed highly relevant and critically important evidence in preparing and " revising" the Temple testimony. Dow's acquiesence in Consumers' suppression efforts likewise requires no discussion, since Dow concedes it. Dow Memorandum Regarding Hearing Preparation, pp. 4-6, 7-8.
The real question concerns whac to do in light of that sordid picture. Some action is essential, since otherwise there is no reason to believe that Consumers, having once embarked upon its tactics of misinformation, will not do so in other areas as well:
we need not repeat the remark of Judge Learned Hand, quoted at p. 20, supra.
Nor can we have much faith in Dow. To be suru, Dow tells us that it was not actively dishonest. In a Pontius-Pilate-like apologia for its inaction, it poines to threatened lawsuits and contractual obligations and claims that " Consumers made us do it."
-as
=_ - .
s That hardly requires comment. Even in criminal law, acquiescence in a crime is itself criminal, and F.R.Civ.P. Rule 37 (to which we 95 look by analogy for appropriate discovery sanctions, jus.t as 10 C.F.R.,
Part 2, 52.7M)et seq. parallel the Federal Rules' discovery pro-visions) pointedly does not distinguish between a wilful failure to provide full discovery and a failure occasioned by some other circumstance. As the Advisory Committee Comment to the 1970 amend-ments to Rule 37 (see 48 F.'R.D. at 538-39) points out:
" Rule 37 sometimes refers to a ' failure' to afford discovery and at other times to a ' refusal' to do '
so. . . . In Societe Internationale v. Rogers, 357 U.S.
197 (1959), the Supreme Court concluded that the rather random use of these two terms in Rule 37 showed no design -
to use them with ccnsistently distinctive meanings, that
' refused'. . . meant simply a failure to comply, and that wilfulness was relevant only to the selection of sanctions, if any, to be imposed."
See also Note, 68 Colum. L. Rev. 271, 291-93 (1968).
Thus we confront two guilty parties, neither of whom can be trusted in the future, and both of whom have put Intervenors to great trouble and expense in an attempt to Obtaic the discovery to which Intervenors are clearly entitled u % u j0 C.F.R., Part 2, S2.740 et seq. In view of Consumers' active tappering with the truth in this proceeding, this Board would be perfectly justified in revoking Consumers' construction licenses out of hand; 3t the very least, further construction under those licenses should be immediately suspended until such time as the Board can truly be assured that Consumers and Dow have made available all of the '
relevant facts needed in this proceeding. Such a sanction is explicitly provided under F.R.Civ.P. Rule 37 (b) (2) , and is well within the power (as well as the duty) of this Board to control its
.. _ . _ , _ _ _ . . __. __ _ , _ . _ . . . - _ _ _ . . - ~ ._ .
l l
own proceedings. See 10 C.F.R., Part 2, S2.718. As the Supreme Court pointed out in Hammond Packing Co. v. Arkansas, 212 U.S.
322, 350-51 (1909): .
"This case presents a failure by the defendant to produce what we must assume was material-evidence in its possession, and a resulting striking out of an answer and a default.
' The proceeding here taken may therefore find its sanction in the' undoubted right of the lawmaking power [in that case~
a state statute was involved] to create a presumption of fact as to the bad faith and untruth of an answer to be gotten from the' suppression or failure to produce the proof ordered, when such proof concerned the rightful decision of the cause."
That the presumption to which the Supreme Court referred is alive'and healthy cannot be doubted: see pp.19-20, supra. That the presumption should be applied here, where Consumers mahifestly acted wilfully, also cannot be doubted. Otherwise, this Board will tacitly encourage utilities -- already well aware of the advantages they enjoy over public interest intervenors, who typically lack financial cicut and ready access to utility internal records --
further to abuse their position by wholesale suppression of evidence.
That not only disserves the public interest, but also makes a mockery of the proceedings before this Board -- just as Consumers' arrogant attempt at hoodwinking undertook to do. Such things ought not be permitted.
Whether or not this Board sees fit to revoke Consumers' construction permits or immediately halt further con'struction thereunder (the latter, we note, is necessary for other reasons as well, as shown in Part II above), moreover, Consumers can and should be required to compensate Intervenors for the time, effort, and expense Intervenors have incurred, both in. endeavoring to
~
unearth facts which should have been candidly disclosed in the first instance and in attempting to cope with Consumers' consistent failure to produce documents at agreed times. F.R.Civ.P. Rule 37 makes no bones about such matters. Even in the case of an in-advertent or unintentional failure to comply with discovery, Rule 37 (a) (4) and (b) require the assessment of costs and attorneys' fees incurred in obtaining the discovery. The only exceptions are those in which the failure to provide discovery is "substantially justified," which certainly cannot be said of Consumers' actions here, or those in which "other circumstances make an award of expenses unjustified." No such circumstances are present herei rather, given the enormous disparity in financial power between Consumers on the one hand and Intervenors on the other, and the wilfulness of Consumers' conduct, the circumstances are all the other way.
We stress that we do not seek sanctions against Consumers in 1
l a spirit of vindictiveness or simply as a tactical ploy. To the contrary, we do so because it is vital that this Board disabuse i Consumers and Dow of the notion that they can with impunity twist 1
the facts, smother the evidence, and ignore the Rules of the Commission. Enough has been brought to light already, in the brief period since these hearings began, to compel the most searching scrutiny of the facts concerning Consumers and Dow and the Midland project. Consumers' lengthy history of foot-dragging and reluctant compliance with the requests even of the Commission (let alone of
-s Intervenors) cannot give one much confidence in Consumers' candor.
See p. 5, supra. Indeed, even Dow has its doubts about Consumers' bona fides (see Tr. 408, and see pp. 5-6, supra), and Consumers' maneuverings as to the Temple testimony destroy whatever remnants of confidence one might otherwise have. Only prompt and stern action by.this Board can offer any guarantee at all that Consumers will not blithely pursue the improper tactics it has so far .
demonstrated.
CONCLUSION For the reasons set forth above, we respectfully submit that Intervenors' outstanding discovery requests should be honored forthwith, and that this Board should forthwith grant I'ntervenors' Motions (filed herewith, as the Board invited during the hearings) for an immediate suspension of the construction permits in this case and for the imposition of sactions. -
Respectfully submitted, Counsel for Intervenors (other than Dow Chemical Co.)
MYRON M. CHERRY One IBM Plaza, Suite 4501 Chicago, Illinois 60611 (312) 565-1177
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$ *(d ' Y y :
UNITED STATES OF AMERICA % 3\ -7 ;il bg$
NUCLEAR REGULATORY COMMISSION ';
"C) cQ.s '
Q =' ;i BEFORE THE ATOMIC SAFETY AND LICENSING BOARD w1 'N In the Matter of )
)
CONSUMERS POWER COMPANY ) Docket Nos. 50-392
) 50-330 (Midland Plant, Units 1 and 2) )
CERTIFICATE OF SERVICE Peter A. Flynn, an attorney, certifies that he mailed copies of Intervenors' Memorandum Concerning Pending Issues, Intervenors' Motion for Sanctions Against Consumers Power Company, and Intervenors' Motion for Immediate Suspension of Construction Licenses to the persons below at the addresses e listed below by first class mail, postage prepaid, by depositing the same in the U.S. Mail Chute at One IBM Plaza, Chicago, Illinois 60611 this 31st day of December, 1976.
.- 't.~ . .
Peter A. Flynn DAVID J. ROSSO, ESQ. and LAWRENCE BRENNER, ESQ.
R. REX RENFROW,,III, ESQ. U.S. Nuclear Regulatory Commissior Isham, Lincoln & Beal Washington, D. C. 20555 1 First Natl. Plaza, Suite 4200 I Chicago, Illinois 60670 LEE F. NUTE, ESQ.
General Counsel's Office FREDERIC J. COUFAL, ESO., Chairman Dow Chemical Company Atomic Safety and Licensing Board Midland, Michigan 48640 Panel
( U.S. Nuclear Regulatory Commission DR. J. VENN LEEDS Washington, D. C. 20555 Atomic Safety and Licensing Board Panel
.Dr. EMMETH A. LUEBKE 10807 7.twell Atomic Safety and Licensing Board Houston, Texas 77096 Panel Washington, D. C. 20555 MR. C. R. STEPHENS, Chief Docketing & Service Section Office of the Secretary of the Commission U.S. Nuclear Regulatory Commissior i