ML19344A267

Util Response to Intervenors 770627 Filings.Aslb Should Grant 770608 & 21 Motions to Introduce Exhibits & Strike Portions of Rj Timm Testimony & Deny Remaining Motions. Certificate of Svc Encl.Related Correspondence

ML19344A267
Person / Time
Site:	Midland
Issue date:	07/08/1977
From:	Renfrow R, Rosso D CONSUMERS ENERGY CO. (FORMERLY CONSUMERS POWER CO.), ISHAM, LINCOLN & BEALE
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19344A263	List: ML19344A262 ML19344A267
References
NUDOCS 8008070649
Download: ML19344A267 (50)

Text

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$.j UNITED STATES OF AMERICA ea. ) '

NUCLEAR REGULATORY COMMISSION 9

Before the Atomic Safety and Licensing Board

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In the Matter of

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CONSUMERS POWER COMPANY

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Docket Nos. 50-329

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50-330 Midland Plant Units 1 and 2

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PISPONSE OF CONSUMERS POhT.R COMPANY

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TO FILINGS OF INTERVENORS DATEL JUNE 27, 1977 1.

By letter dated June 27, 1977, the Intervenors in this proceeding filed:

(1)

An Answer to Motions of Consumers Power Company (Licensee) Objecting to the Introduction of Intervenors' Exhibits (dated June 8, 1977);

(2)

An Answer to Licensee's Request to Admit Interrogatory Answers (dated June 1, 1977);

(3)

An Answer to Licensee's Motion Requesting Admission of Certain Exhibits Previously Identified in the Regord (dated June 7, 1977);

(4)

A Motion to Admit Board Exhibits

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l and 2; and (5)

An Answer to Licensee's Motion to Strike the Testimony of Richard J. Timm (daLed June 13, 1977) and Motion to Strike the Rebuttal Affidavit of Richard J. Timm (dated June 21, 1977).

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f 2.1 By! previous motion dated June 16, 1977,

' Intervenors had7 requested'an extension of time until June.

24, 1977.to answer'all of these motions except'the June 21, 1977I Motion to ' Strike of certain-J. Portions of the Rebuttal Affidavitiof.-Richard J. Timm.

On June 29, 1977', the' Board granted 1Intervenors' motion for an extension.

It is clear

from the fac'e of the documents that they were filed on June 27, 1977.and as a result, are not timely.

Therefore, this l

Board should strike these: documents from the record of'this.

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proceeding.

In-an-effort-to expedite matters and bring this.

l proceeding to a close, Licensee will also respond substantively l

l to thosegfilings in thisLdocument, thus providing the Board I

with Lic,ensee's position.on the matters r.aised therein in the. event that'the Board ~should determine to_ accept the

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extsemely late.'filingLof.Intervenors' documents.

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Response to Intervenors' Answers-to. Licensee's Motions Objecting to the7 Admission of Exhibits-r i

3.

~ In'their answers:to' Licensee's objections'to l

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the.-introduct' ion of certain documents which Intervenors have movedlinto: evidence,fIntervenors have made the.following l

E ithree-l general arguments:

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That"the objections are'merel, aLdelaying tactic; i

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'That:all of the parties have. agreed that documents.provided pursuant,to a discovery request have a proper foundation and therefore the only remaining. objections must be based on relevancy and materiality;*

and C.

That if a document is produced-s pursuant to discovery, the parties producing the document, have an opportunity to rebut any.information contained therein and therefore there is no ground for a hearsay-objection.

j Licensee will address.each of these arguments separately I

then discuss the remaining objections to individual documents.

4.

The first argument raised by Intervendrs is l

l th'at Licensee's. motion is a delaying tactic.' However, Inter-l Venors conveniently disregard the fact that this Board L

l dir.ected the parties to obj,ect-to the introduction'of exhibits l

by written motion.. Sse e.g., T'r. 5190.

The fact that l

Licensee's objections are proper and,sh'ould be granted by

- this Boar'd is' established below.

l 5.

Intervenors' second argument, that the parties i

l have agreed'that documents provided. pursuant to discovery have a proper foundation and therefore the only remaining objections!are:to' relevancy and materiality,-is an example.

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-of.the extent to which counsel for Intervenors.is willing to t

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• In dombinatidn with.this argument, Intervenors c

claim that'the. hearsay. exception is-not applicablef o t

. administrative proceedings. -Whilt.this argument is; clearly

- incorrect,: (See paragraph 5-below) Licensee;would point out-

' that objections'to; hearsay by Intervenors have been upheld by this Board (See;e.g, Tr. : 3579-80).-

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v twist both the. facts and the' law in this proceeding in an p

' attempt?to pursuade thisl Board to suspend'the construction permits at Midland. -First, with regard to a stipulation by the parties, the only stipulation made'was that documents provided pursuant tx) discovery were authens!..: -

not that

-they all had a proper foundation-to be admitted as evidence.

Tr. 2398.

S,econd, to argue,'as'Intervenors.sessm to do at pp.

2-3.of their-. answer that the mere production of a document.

I pursuant to a-discovery. request establishes a foundation'for

.the admission of that document into evidence is absolutely contrary to the established principles of jurisprudence.

Rule'26 of-the Federal Rules of Civil Procedure, upon which

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10i C.F.R. 2.740 is based, requires documents to be produced, i

which, while not material.tx) the issues in a particular pro-l-

ceeding, mighE lead to relevant land material information -

which would be admissible at trial.

Fer example, the comments i

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.to the 1946 : amendments to Rule 26 state that "[r]ule 26 con-

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templates 'exEminations not merely for the' narrow purpose of I

~ adducing'. testimony -wnich may be offered into evidence but c

also for the-broad discovery of information which~may be.

useful'in preparationcfor. trial'..

. Thus',.. hearsay,

-while inadmissible itself,,may;suggest testimony which lp'roperly~may belproved." Byfdefinition, then, documents-Lwhich-are notJidnissible>as evid.ence because they contain i

i ih~ea say, Lor are immaterial must still be'prQduced pursuant

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to1a discovery request. ;Indeed, as has become their usual practice in this proceeding, Intervenors have not cited'a single ~ authority', other.than.a statement in the accompanying.

letter referring-to counsel for Intervenors' 15 years of practice before the Federal Courts, to support the startling proposition'that documents produced during discovery auto-matically:have a proper foundation to be admitted as evidence.

The reason, simply put, is that there is no such authority.

As stated at pp. 2-3 of Licensee's objections, the law governing the required' foundation for the admission of documents into evidence is as follows:

l All'of the parties to this proceeding L

have stipulated to the authenticity of i

the documents originating in'their files' and produced as part of the discovery l

process.

Tr. 2398,_4710-11.

Most of l

the exhibits offered originated from the parties' files and therefore Licensee makes no objection to their admission on this ground..However, this stipulation 1

only'goes to the fact that the documents

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provided are true copies of documents L

found in the files of the respective.

parties.- Federal Rules-of Evidence 901(a).

Authentification' represents only a particular aspectLof,the requirements-which must'be met before a' document is admitted into evidence.

11 Moores Federal Practice.S 901.0l[.3-1] at IX-7? Thus, it by no meansl assures admission of a document into' evidence since other bars,_such as l-

" hearsay and'the. additional foundation re-quirements, may remain. 'll Moore's Federal Practice S 901.0l[.3-2] at IX-8..

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~It:is generally accepted.that, although an

. administrative agency may not be strictly' bound by the rules of evidence'as applicable L

to judicia1' proceedings- (Appendix A to Rules of Practice S V(d) (7)), the applicable standards and principles of probityLand reliability of evidence must be the same as L

those for the courts.

2 K. DAVIS, Administrative Law, S 14.05 at p. 275-76 (1958).- Thus,.Elthough many of the documents would be classified as hearsay within the-Federal Rules of Evidence (Rule 801), Licensee

.does'not1 object.to'all documents which fall F

.within the definition of hearsay,- but only to those documents which run' afoul of the basic policy considerations underlying the hearsay rule;.i.e., they are not trustworthy or.

reliable, are not probative or there has been-no opportunity to'either attack or question-their meaning and significance by cross" examination or otherwise.

Id., Ch. 14 (including 1970 ' Supp. ).

Thus, Intervenors' second' argument is clearly. fallacious.

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The final general argument raised by In-tervenors is.daat since most, but not all, of the documents l --

sought to be~ introduced came from other parties' files, t

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there is noEground forfa hearsay objection since an' opportunity l

existed for the other par'tdes to rebut any'information j

contained'in tho'se documents.

This objection.is also groundless. ;Lic'enseeLhas produced thousands of documents in ll

- this Lpro'ceeding.. Many of these documents were produced, as requiredsby;10LC.F'.R.:2~.740, even though they contain' hearsay or immaterial information.

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For'Intervenors'~to suggest~thatl Licensee.has a

burden-to-ianticipateiwhich;of those documents,~ including I

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to Ethose'containing hearsay.or immaterial information, Intervenors

'may want.toluse'and.to'further suggest that Licensee then-has anfaffirmative duty to put them into evidence.and then

. rebut them isLnonsense.. Clearly,-once documents are produced in discovery', the; opposing party must' choose which ones he' proposes toluseLand take the necessary. steps to have them admitted into. evidence.

Only when:the. documents are properly.

admitted into evidence does the party producing the' documents I

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have an obligation to respond. ' If aul opposing attorney does not, for whatever reason, satisfy the requirements necessary-to have a' document admitted into evidence, there is no reason for' Licensee.to rebut such.a document merely.because it_was produced during-discovery and there can be no justification for placingLsuch a burden on Licensee.

Yet, it is precisely

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l-such a. burden that Intervenors would have this Board place on

' Licensee.

Intervenors' approach.to this~ entire proceeding L

has been to take.a. document produced.during discovery, mis-l characterize its contents, level charges against other parties r

i based on the mischaracterization, fail to call a witness to provide the necessary foundation'for the document, much less n

to verify or deny.the mischaracterization and then state that 1

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-a fact has been' proven which must-be rebutted by other parties.

-This.;is?not'theEway a 7 49 1 proceeding is conducted and the L

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only -way-to stop r;c t

'andish behavior is for the Board to enforce--the evice.ntiary rules, andidisallow the introduction.

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ofsdocuments which-dognot have prcper foundation.-

Indeed,

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ic can be presumedithat-Intervenors': failure to call a wit-

^ ness to establish.a proper foundation for a document was a

- deliberate; choice inspired by Intervenors knowledge that

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the necessary witness would refute the attempted character-

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ization of the document.

I Wiemore on Evidence S 286-289

.(3rd ed._1940)..

l 7.

The above argument. exposes Intervenors' three l

general answers as' fallacious...Since the. basis for Inter-venors' claim.that their proposed Exhibits 6, 7, 9, 21, 23, i

25, 27, 29, 41-45 and 59-77 are admissible, rests on these L

fallacious' arguments, Licensee respectfully requests that l

those documents be excluded.from the record of this: proceeding.

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'Having disposed of Intervenors' general 7

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' arguments, Licensee will now respond, where necessary, to

'the additional arguments set forth by Intervenors-for each l'

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specific Exhibit:

l l-Intervenors' Exhibit 3:

Licensee first renews its objections set forth on

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June 8, 1977 on.the grounds of materiality to which Inter-L venors did not'rescond. 'Second, Intervenors contend that L

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'thesdocument is relevant to-the issues of quality assurance l

the:candorLofLLicensee, the Dow-Licensee: relationship and i

Dow's views on the load.. growth of Licensee's' system.

With regardcto the qualityfassurance point, Licensee has already l

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s established atepage 6 of its Brief' filed June 13, 1977 that

^ since qualityLassurance was'not remanded-by the District of Columbia Court ofl Appeals,~it'is not an issue in this' proceeding.

Therefore, thisidocument cannot be admitted as relevant to a subject matter.not before this Board. Licensee's candor is also not an issue in this proceeding.

Even if it were,;this: document could not be said to be relevant to such an issue, since'the document is. dated July 15, 1975, some 12 months'before'the decision by the Court of Appeals which required the commencement of this proceeding.

The next i

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point urged by'Intervenors is that the document is relevant to the Dow-Licensee relationship.

Once again, the fact that the document lis dated July 15, 1975, some 14 months before the ' corporate-decision reaffirming Dow's commitment to

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purchase process steam from Midland belies its relevancy to r

Dow's current: position.

Therefore, the document cannot be

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i admittedias relevant to-the current relationship between Dow-and Licensee.

The final' point raised by Intervenors is that.

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D'ow's opinion that a 5%: load growth "might" be too high is

~important'to this proceading._Since this Board must make a t

.s decision'on'a load growth projected in late 1976, an opinion l

l-lar,Dow given during the1 recession of 1975 is clearly. irrelevant I

.to'tha't decision.

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'At this point, Licensee would note.that many of

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.'Intervenors proposed; Exhibits are multi-page documents and

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only'a portion of the document is' claimed by Intervenors to be relevant or material toithis proceeding.

For example, the Dow referenceito load' growth discussed above is'a six-line1 paragraph contained within a 13~page document.

If the Board should overrule; Licensee's objections to-the admissi -

.bility of1 documents such as this, it should clearly indicate L

which~ portion of'the document itfis accepting as evidence.

This-will[ provide a clear record in case of appeal and will

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foreclose the adoption of subsequent arguments based on-i information in'the document not now claimed to be relevant.

This'requestfis applicable to Intervenors proposed Exhibits i

63, 64, 66,.67, 68,.70, 71, 3,

7, 9, 25, 27, 29,'41-45, 60, 72,-74 andE77.

Intervenors' Exhibit 5:

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Intervenors contend that.this document is relevant t

because.it:waslan alternative available to Licensee which Licensee rejected and.thus shows Licensee was not concerned about the contract with Dow'or with Dow's clean air' problems.

l l-Once again, :Intervenors. have. ignored the ' fact that Mr. Keeley's t

testimony: established-that this alternative, which would-I

. have provided process steam to Dow one year earlier, was- -

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rejected by Dow, not: Licensee.

Tr. 1321-22.

Based on this L

fact, as well'as the: objections set forth on June 8, 1977, t-L' this document should not be admitted.

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Intervenors' Exhibit 7:

In3 addition to its objections set forth earlier, Licensee.would-. note that.although the document is dated March.4, 1976, it clearly state's in the-first six words that it memorializes a meeting ~ held January 9,'1976.

It is also-

-clear fromLthe-documentithat'the " threats of litigation" were made by Dow not Licensee.

Intervenors' Exhibit 21:

This~ argument by Intervenors for the admissibility of the document is somewhat confused.

First, Intervenors admit that the document was a response by General Motors and

'then say it was prepared by Licensee.

The' facts are that-l l.

'the-document, on its face, states it was prepared by General Motors and'the testimony in this proceeding also so-states..

Tr. 1988.

The fact that:Intervenors' witness relied on this

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document is irrelevant-to its admissibility since.that L

witness did not prepare it.*

As such, this document has no l

1 foundation and should not be-admitted into evidence.

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~Intervenors' Exhibit 23:

Intervenors' argum'ent on thisLddcument is that it j

was prepared,by Dow pursuant to an' oral request;and has been used byLIntervenors' witness in his testimony.

However, this argument doesinot address Licensee's argument that the I-information:was provided p'ursuant' to'the caveat that it t

1 would later beiconfirmed under. oath.- Tr. 2'021.

When.the

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• Licensee can find no rcference in the Timm testimony

!to this particularnexhibit.

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answer was confirmed by Interrogatory Answer, the material contained in this exhibit was contradicted.

Thus, the exhibit consists of information never sworn to and identified only by an attorney for Dow, which was later contradicted by an answer provided under oath by a Dow witness.

The fact that Intervenors' witness used this information is irrelevant to its admissibility since that witness cannot vouch for its accuracy.

Thus, this proffered exhibit must be excluded.

Intervenors' Exhibit 24:

Intervenors' argument on this document is that a

" corporation only has views through its personalities who are its officers" and thus, it is relevant to Dow's corporate position.

Once again, there is not a single cite-to support such a proposition.

Licensee's argument on what is relevant and material to the Dow corporate position is set forth at pages 10-17 of its Brief filed June 13, 1977.

Based on that argument and Licensee's objections filed June 8, 1977 con-tained on page 11, it is clear that this document is immaterial to the issues in this proceeding.

In addition,.the document is dated prior to the time Dow reached itsicorporate position and as such, was considered in and engrossed by that decision and is therefore irrelevant to Dow's current position.

Finally, the statement that lir. Orrefice approved "on behalf of Dow" everything that Temple had said is not supported by.

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~ the! record.*" As-stated in-Dows Answer-to interrogatories o' *he Staff filed:on' February 28,:1977,l subsequent to the:

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c.stimony of Mr.' Temple and Mr.-Orrefice:

- Dowjrequires a' dependable. supply'of steam

- and. electricity sufficient - to supply-the needsEof its. Midland-plant.-

Currently, Dcw

- obtains its steam and. electricity from!its own power: plants, but these plants are antiquated and alternative sources.must be'obtained in the near' future.. In September, 1976, Dow.

concluded,.as-part of-the corporate review of the Midland' Nuclear Project that, based

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upongthe-information then1provided, the Midland.

Nuclear.-plant retained an-economic advantage

- over the alternatives. considered.:Dow's official position as a company remains unchanged.

No person in Dow's employ has any authority or= power to change this position.

To date, Dow has not been 'dvised of changes j

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which it considers sufficient'to 1 squire that it-undertake.a new analysis.

Thus, this answer by Dow clearly establishes that neither Mr. Orrefice nor-Mr. Temple have the authority to change Dow's fofficial position.

It is Dow's offic'ial position that is

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relevant. an.d material to the issues before the Board, not.

-i the personal opinions of-Dow's employees.

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• Interestingly,: no. cite for this characterization Dis provided;by;Intervenors.- However, a review.of the i f

_ Transcript'at pp. 2715-17,.where'in Mr.-Orrefice discussed his view ^of thenTemple testimony, establishes that the words

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"on behalf:of Dow"'do;not appear.

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'Intervenors' Exhibit 27:

In' addition to its objections on-foundation set forth above, which are-particularly' appropriate to this document,-Licensee ~also' objects to.this' document'oi. the

ground that.Intervenors' issue of the " manipulation of the

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Dow/ Temple testimony" is not a fact which this Board must.

. decide in making-a determination.on whether to modify, suspend or continue the co~nstruction permits at Midland.

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-See pp. 14-15 infra. ' Licensee would also note that this l-l

. document could not.be used to test the " truth of statements made by Consumers' witnesses" since none of the individuals i

at.this meetingLtestified in this proceeding.

Intervenors' Exhibit 29:

Intervenors have not responded to either of Licensee's objections to_this document; i.'., that it is nct relevant.

e to " changed circumstances" in the Dow-Licensee relationship and thatLit-is not the best evidence.of the~ discussion by-Dow of'a claim against Licensee. Rather, Intervenors speak of the " evolution" of_ changed circumstances and do not

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_ address-at=allithe fact that this document,1 a paragraph from I:

aiLicensee prospectus and a. cover memo, refers to corres-pondence fromiDow setting forth.the claim.

The'Dow correspondence, E

not'a;pagelof: Licensee's prospectus,'would be the best L

evide'nce fof: the. claim. -Federal _ Rules of Evidence 1001 and

~1002.

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Intervenors' Exhibits 46-47:

Licensee reiterates its objections to the admission of newspaper articles :as exhibits in this proceeding.

See Illinois Power Company-(Clinton-Power Station, Units:l'and

2) LBP-75-57, NRCI-7519, pp. 579-630 (September 30, 1975).

-Licensee also_ renews its objections to Exhibit 46 and 46(R) on the - grounds set for th at Tr. 5589-90.

Intervenors' Exhibit 49:

' Licensee renews its objections to this document on

-the ground l-that the transmittal'of. documents to parties in this proceeding is not an issue before the Board.

Intervenors' statementEthat the~ document is relevant because it establishes

','that the Staff had; no,information,, but nonetheless had taken the'[ sic] public position in support of Consumers'

-license" is incorrect.

The document in question notes cnt '

its face that information was furnished to the Staff on or before October:1, 1977.. At that time, the_ Staff had not taken a position on whether the construction permit at

- Midland should be. continued, modified or suspended.

s' With~ regard to Intervenors' proposed Exhibits 59-

-77, Licensee, in addition to its foundation objections, renews'its objections based on the timeliness of the offer offthese1 documents.- Licensee-notes its additional objection:

Lto specific documents below.

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Intervenors Exhibit 59:

Licensee renews-its objection to this document on the. ground of relevancy.

Intervenors have not shown how the-cancellation:of a power. plant in 1974 is relevant to any of i

the ' issues now: cefore this Board.

Igtervenors'LExhibit 60:

In addition to'the-fact that Intervenors have not esttblished a foundation for any of the documents in this group exhibit, ' Licensee also objects on tdua ground that the preparation-ef the Temple testimony is not an issuenthe Board must decide in reaching a decision on whether to continue, modify or suspend the construction permits at Midland.

To the extent,that the Board must make findings.on this issue, it has.already indicated at Tr. 502-503, 516 and in its Memorandum of' June 15, 1977 that such findings will be issued. separately...Since-these documents are already before'the Board with regard-to that question, they should not be allowed as exhibits with regard to the question of whether~to continue, modify or suspend the construction permits'at Midland.. Finally, Intervenors'-Atatement that the Board.is~considering "on~its own. Motion, sanctions against Consumers and their lawyers for willful manipulation oft. testimony" is yet another-example of Intervenors-twistingj

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statements.made.in this proceeding. What this Board actually

' stated-was:.

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She Bo'ardishould;also point outL that it l

nas-not made-any charges of professional-misconduct ~on the part of any'of th.e-attorneys here.

Its concern is with the

~ testimony.; That's what its remarks were directed to.-

If. counsel' feels'that questions of pro-l-

'fessional misconduct'areLappropriate,7they should brief.them.-

If they do not,- the Board should'makefit1 perfectly-clear'that at-thisl point in' time, certainly, it is not~

p maki'ng anyJcharges~of professional misconduct.

L If it-does, it will make them on the record.

Tr. 701'.

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Intervenors then made-such a charge of-misconduct and have thereafter1 treated that erroneous charge as if it were~the L

Board's.

Intervenors'-Exhibit 61:~

With. regard to this document,; Licensee would point out that the-Presidential Energy Program is_ not national policy, it_isimerely the President's program. submitted to L

Congress.

Congress;is now /ebating-that program and changing many. aspects.of it.

Thus, not until' Congress and-the Presi-g l

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dent have agreed-uponia program will'this country have "a l

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' national l energy. policy".

In any event, _ Licensee's load-

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L forecast ~already takes,into account energy 6onservation, and l

p as! such,11t; will not tbe.naterially affected by the inclusion l

2of energy conservation Lin such a : policy.

l Intervenors Exhibit 63:

E InLadditionito itsLobjections on foundation,

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Licensee cites-Intervenors' argument on this document as a' t

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prime exampleJof.the L distiortion of the ' contents of-documents that Intervenor's havetindulged in; There is nothing in this document which'even' implies that Licensee "is in ~so much-l trouble taat-it'is;asking Dow Chemical forfa loan of millions of Ldollars - to bail it out".

'Indeed, this misstatanent is in fdirectJcontradiction toitheftestimony of'Mr. Boris cn the t

financial condition:of Licensee.

Tr. 4912.

Intervenors' Exhibit 65:

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In addition to its foundation' objections and the J

fact that no_date for this proposal has been established, i-

. Licensee notes _-that again the document'is mischaracterized.

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'Throughout this proceeding,. Licensee has'Gtated that Dow is committedito take-2.4-million pounds of low-pressure steam-i

'and1.4 million--pouhds-'of high-pressure steam.

On its face, -

this' document proposes that:Dow would take 2.0 million pounds ofLlow-pressure steam,.89 million pounds of high-

-pressure steam and have Licensee convert :1.650 million poundscof~ steam to-electricity for Dow.

Thus, Dow would be

- increasing, -no't decreasing, their commitment to purchase 1.-

process. steam [from Midland.

i Intervenors' Exhibits 67-68:

In. addition to its' foundation objections, Licensee 6

(would'pointiout this discussion ~'by Intervenors as a blatant f e::anpleJofidistortion of material ~ contained in documents ' g g

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Eproducedcpursuant.tp! dis'covery. 'Intervenors' counsel cites, p

.as lan: example 1 of Licensee's legal arguments ' to the Board '

s being ". disingenuous"Lthe following pod ion of a sentence:

...o that/ conditions and_needs.ar?

.different.today and.all issues have 1

to be re~-re' solved in=that light.

Intervenors' counsel >then statis1that.this " admission by ll Consumers

.1 7.' totally undercutsithe' statements 'y Consumers' b

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> lawyers madeito-the Loard-t'ine and time'again."

Indeed, the full paragraph:from which that portion of a sentence is-taken readsias-follows:

Consumers replied that Cherry will ask F

the question -

are conditions between L

Dow andLConsumers different now?- If so,.

.theseEconditions need to be made pubite and examined by the Hearing Board.

He will also point out that the contract arrangemenus are different.

Cherry will also ask questions such'as -- does Dow want to have all its eggs i

--in oneibasket? 'Is Dow,still behind~the s

,~

project?

Does Dow still.want to deal'with an-

[

" incompetent utility"? ' Cherry.can_;go into l.

questioning 1in greatodetail and it could last L

for-weeks..-He will say that conditions and

-needs'are different today and:all issues have toebe re-resolved-in that light.

JThus, it could not be. clearer.that the statement'which Intervenors quote as.an admission by Licensee.in reality.

\\

refers! tobthe.Lbogus arguments.made by counsel'for Inte;rvenors.

inithisLproceeding'.

Such' manipulation of.the content of documentsuby/Intervenors'(counsel is " disingenuous" to say l-ithe.least. [Next,ELicensee-againrepeatsthat' quality ~ assurance L"

?is net _anlissue1beforeJthe Board,and as such, these-documents

!cannotibefAdmittedlas relevant to: quality assurance.

More-

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m

~

r over,.a. complete reading ofLthe' discussion referred to on

. quality; assurance.will destroy.the implication that Licensee

~

"doesn't':know what;it-is doing" on quality assurance.

Finally, with regard to'the discussion on plant costs, Licenseegpoints'out thatfthat discussion-involved the status

~

-of compliance with NRC Regulatory Guides as:of May 19,976.

f The Board now has information as of early 1977 which causes i

this: material to be outdated, and there is absolutely no 4

r

-discussion ~of ACRS items in the document.

Intervenors' Exhibit 70:

r e

Intervenors' argument on this document is another example of~ statements taken out of context, stating that the l

misstatements.are facts and-attempting to bootstrap U a admissibility of another : document based on such distortions.

Such arguments'should be dismissed out-of-hand by this Board.-

L Intervenors' Exhibit 71:

Intervenors state that this document is admissible because -it' is an admission by: Licensee prepared by one of i

its lawyers.- In fact, this document was produced by Dow and prepared by one of Dow's;.-employees.

Intervenors' Exhibit 73:

First,:as noted'in its. comments at pages 15-16,

.suora,;the issue of the preparation of the Temple testimony

~ J-

~

. is not.to'be deci/ d by the Board in its_ decision on whether t

to continue,-mot.-yfor suspend the. construction perm.ts for

Midland. ^ Second, it is clear from this document that counsel for

Licensee ~was sending copies of-testimony and other

-evidence from an. earlier. proceeding to Dow..The relevancy of this ministerial act to the issue of the-preparation of

-the Temple testimony is no't clear.

g Intervenors' Exhibit 74:

The issue.of a possible antitrust violation is not before the Board and, thus, the document cannot be admitted as evidence on'that issue.

It is also interesting to note l

that Intervenors do not refer to a possible violation but to a violation of antitrust-law as if that issue was already tried and proven..

l-Intervenors' Exhibit 76:

l.

.s' set forth in Licensee's comments on page 8, i

suora, quality assurance is not an issue in this proceeding l.

and therefore, this document cannot be admitted into evidence.

I as relevant to a subject matter which is not an issue which s

i this-Board'must decide.

!p.

t Intervenors' Exhibit 77:

As previously'noted,-this group of documents does not~havexa= proper foundation to be admitted into evidence.

i

Additionally, Lthe characterization of-the first four pages 1.

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-ofihhis.idocument'asLmeeting notestby"Mr.lAymond is:t'otally

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' inaccurate. : As-setNforth in Licensee's., Response'to-the Board's'OrderJof' November'30',:these-inotes'were prepared by Licensee's in-house 1 counsel"and Lwere used byg Mr. : Aymond at the-JSeptember: meeting'between Dow and. Licensee.

3 9.

Based on theJabove,.andLits previous. objections 1 filed'on-JuneL8,'1977',: Licensee' respectfully rquests'that.

Intervenors'Lproposed' Exhibits ~3-7, 9,

21, 23, 24, 25, 27',.

~ 28, : 2 9,.: 41-4 5,. 4 6 (A),.4 6 (B) ', 4 6 (R), 47, 48,-49 and '

77'not'be admitted ~as evidence in this proceeding. Licensee E

will-Irespond to Intervenors' proposed Exhibits 60 (A) and 78-82 which were-offered contemporaneous 1y with Intervenors' Findings of; Fact.-when' Licensee;respon~ds to those. Findings.

II.. Licensee's Response to Intervenors'-

- Answer to the Motion to Admit

~

Iriterrogatories.

10. - Intervenors st' ate.they have no objection to p

(the admission of interrogatory answers.by Dow.but do cLjece

-to the admission of~interrogstory answers-of. Licensee.

~

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Since'_ Licensee did'not offer any of its own interrogatory

^

answers,-Lit: assumes Intervenors'have no' objection _to the

- admissiontof;both Dow and' Staff answers to interrogatorieu which1 Licensee did request be-admitted into evidence.

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Licensee Response to Intervenors' Objections.to the Admission of

' Licensee' Exhibit 33.

11..

Intervenors state that they have no objection to :any of the exhibits offered by Licensee, except for

~

Exhibit 33.-

Intervenors' only argument is. thatL the docwnent is-"self-serving and inaccurate".

This is not an objection to the admission of a document into evidence.

This document-was sponsored by.its author, who prepar~ed it at Intervenors' request, and thus has proper fc undation. Tr. 3653-3655. The sponsoring witness was also available for cross-examination by-the parties.and indeed,. answered a number of questions on the document.: Tr. 3656-3660;.3724-3730; and 3899-3906.

The.

Board should therefore rule-that this document meets the requirements to be-admitted into evidence.

~

IV.

Licensee's Answer to Intervenors' Motion to Admit Board Exhibits 1 and 2.

~

12.

Intervenors have requested that Board-Exhibits 1 and~2 be admitted into evidence.

Board Exhibit 1 is a three-page letter dated June 8, 1976 from Mr. Temple to'Mr.

Orrefice which. sets forth the Michigan Division's interim position and' recommends.a corporate review of'that interim position..~ Board Exhibit 12 is-a three-page1 document dated

' September 15, 1976 from Mr. Temple to Mr. Orrefice which sets:forth Mr.--Temple's recommendation for conducting a

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.A corporate. review of.the-Michigan Division position.

It-has

'beenLand continues t'o-be Licensee's position that'the Michi-

.gan. Division's; interim position in September of11976 is immaterial to ' the -issues in. this ~ proceeding.

Stated simply,-

(Licensee's position is thhc this : Board must determine whether LDow has-a need'for the process steam lto be produced by Midland.

The' contract'between the parties is irrelevant to the. initial question of:need for the process steam.

If the Board determines that a need exists, it must then determine whether Midland or-some other alternative should supply that_need.

Cf., Public Service Companv of New-Hamoshire (Seabrook. Station Units 1 & 2), CLI-77-8, 5 NRC 503, 522-530-(1977).

As.part-of this question, the-contract between the

~

parties'becomes relevant as to their present intent.

The Michigan. Division interim position:was referred to the y

appropriate decision making authority within.the Dow Chemical Company.an'd it was_ determined that the Division's-interim position would'not be adopted.

Having been subsumed by the later. decision,-the' interim position of the Mich;gan-DivisionL l

becomes immaterial'to:Dow's current > intent to purchase i

process steam'from Midland. Pages 10-17 of Licensee's Brief s

r-L filedLJune 13, 1977-contain a complete discussion of this

-point.

Therefore, Licensee objects to the admission of.

Board : Exhibits 11a'nd 2 _in this proceedhg. * ~

• Licensee-would add, however, that-Board Exhibit 2 1might-be_ interpreted as relevant to the formulation of-the

'Dow: corporate' position.' - If the Board so rules, it should Llimit the j docume'nti's. use : to:- that-point.

24-i t

P T'"

V.

Licensee's Response to Intervenors' Answers ~to Motions to Strike Portions of the' Direct-and Rebuttal Testimony of Richard'J. Timm.

13.

Intervenors claim that Dr. Timm did not testify to.anyylegal conclusions and that he merely repeated facts _ established by Licensee in other areas; i.e. Licensee's-

financial position, the Dow-Licensee relationship, the pro'er handling.of Licensee's proposed sale of a portion-of p

Midland'to certain municipals and cooperatives, and Licensee's projected derating.and repair of Pali'sades'due to-the degradation-of steam generatur tubes.

With regard to both legal and factual. matters, Licensee,_ contrary to Intervenors' allegations, does dispute that Dr. Timm has " accurately reported" data either tak'en from' Appellate cases or given by Licensee's witnesses.

Indeed, what Dr. Timm has done is to take data, characterize it and then draw conclusions from his' characterization.

As previously established.in Licensee's motions to strike,

.an. individual must be qualified as.an expert before he can characterize data and give opinion' evidence as'to the conclusions to be-drawn therefrom.

As will be_shown bplow, there are a number of areas -in which Dr. Timm -is.not qualified: as an.

o exper.t and-thereforeihis testimony in those areas must be stricken..

The-first area addressed by Intervenors is finan-cial qualifications.

Intervenors rely on conditions in 1974

.to-project'that Licensee is now in financial difficulty.

~

Thus, Intervenors'switness-necessarily made projections with

-regard to Licensee's. financial position for the period 1977-

'1984, based.on his conclusions as to conditions existing in 1974.

Dr. Timm.islnot qualified-to perform such projections.

Tr. 5364-67.

'In addition, many of the statements quoted by.

Intervenors to support Dr. Timm's " accurate reporting".of the facts are! based-on the same tactics of mischaracteriza-tion of documents which. Licensee pointed out in the'first section of this pleading.

'While Licensee does no-intend to recitelagain.each of these mischaracterizations, the first section of this pleading establishes that the Board should be wary of treating Intervenors' characterizations of docu-ments as accurate.

The second area addressed by Interv'enors is the l

'Dow-Licensee relationship.

As-pointed out above, Inter-i venors'. witness begins with characterizations of the content of documents and testimony and then draws conclusions there-I from.

~To draw such conclusions requires that a witness have expertise.in the area in which the conclusions are drawn.

c Since no expertise has been shown.by Dr. Timm in the area of i

(

Lthe. relationships of large corporations, his. testimony on

that subject.should be stricken.

l The third area-involves the appropriate way to q

itreat:the. proposed sale of a portion of the Midland plant to i

the.municipals and the cooperatives in a load for'ecast.

It i

l.

o-p is clear.from Intervenors' argument ~that their witness has taken.the fact that there is no current legal contract

-between Licensee and these entities and' concluded that they

~

should be; excluded from the' demand which Licensee would have toimeet if Midland was delayed or cancelled.

Such a con-e clusion requires expertise from'a witness on the obligations, responsibilities andLintricacies of the interconnected

. utility systems in Michigan.

Intervenors' witness does not have this expertise for the interconnected system in Michi-gan.

The final factual area concerns the dercting and repair of Palisades due to degradation of steam. generator

~

tubing..Once again, it.is clea,r from their argument that Intervenors have characterized documents and testimony and then drawn conclusions from those characterizations.

It is equally clear that Dr. Timm has absolutely no qualifications in the area of degradation of steam generator tubes.

R Tr. 5359-62.*

L

'Intervenors' -final arguments are. (1) that Dr. Timm

\\

is qualified to make-judgments in all of these areas because j

.he.is a regulator of.public utilities and (2) that-the Board-

.is also not an expert in1these areas and, since it must make 1

• Licensee-asked'Dr. Timm at these pages,the same voir-dire;questi'ons~ posed byfthe. Board ~and Intervenors' Jcounselito: Mr. Noble. 'The: Board would not allow Mr. Noble to testifyfon'this issue,nand hisEanswers were'much more

' complete.:than the answers of Intervenors ' witness. Compare Tri13034-3049.,

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~judgmentsiincthese areas,1so can-Dr. Timm.

The'first of-these' arguments 11s rebutted by the fact that Dr. Timm was

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not called asianLobjectiveiexpert regalator, but as an expert inEspecific' areas for afparty in interest.

To state

.that1Dr.ETimmLcan advise this Board'on'the-decisions it.must

~f

~

F make'because he is:a regulator is akin to a party in aEcivil' l

. proceeding' called.a JudgeLas:its witness to tell the presid-ing Judge'hownhe should-rule in a. case.. Moreover, the fact that~an individual 11s~willing to make judgments.in almost any: area does not makeLhim an expert in almost any area.

-The second argument is also easily rebutted. The Board is 1,

'certainly'not. expert in each and-every area in which.it must.

2 make.' decisions.

It relies on expert wi.tnesseskto-provide it tlie guidance neces'sary.to make those? decisions, and tofbe sure that-the guidance it receives is; good, expert witnesses-must have qualifications in the areasTin which they. advise the-Board.'

Thus, regardless of:whether a' witness-is a-regulator ~:when he~ appears as an: expert. witness on behalf of-

{

an interested party, be must be. qualified as an" expert in j

i the areas'.he' testifies to so~that this Board will-be'.in-a.

. position,toDcarry/outLits-duty of' deciding a. case objectively,

-basedfon reliable and competent evidence.

'Dr. Timm"does noti possess the necessary1 expertise in thefour' factual areas set 1forth-above.and therefore his testimony in those' areas

_ should be stricken.:

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14..

The remaining portion of the motion to strike involves Dr.-Timm'sftestimony on the legal standards this Board must.use in reaching its. conclusion. ~ Intervenors argue that Dr. Timm is once again merely reporting state-ments of fact.

It is crystal clear, however, from reading

'the. testimony, that Dr. Timm's " accurate statement of facts" is no more'than Intervenors' legal arguments presented by a witness,-rather than counsel.

The Board should-give short shrift to this charade and strike those portions of the testimony which include legal argument and conclusions.

Intervenors' final argument'is that these statements are not legal. conclusions but are-statements.about the " ultimate

. facts, in issue" which are proper under ' Rule -704 of the Federal Rules of Evidence.

Once again, Intervenors have conveniently left out a pertinent portion of a statement.

. Rule 704 states in full'that "[t]estimony in the form'of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the-trier of fact."

Since testimonial opinions of law are not admissible, this rule does-not allow such testimony by

- Intervenors' witness.'VII J._Wigmore, Evidence'51952 at 81-82 (3rd ed.1940); and 10fJ. Moore, Federal 1 Practice

~ 54 00. 0l[1], at IV-3 = (2d ed., - 1976).

15.. Based on the. foregoing, Licensee respectfully requests'that the Board:

, r.

a.

Deny Intervonors' Motion to in roduce their Exhibits 3-7, 9,

21, 23, 24, 25, 27, 28, 29, 41-45,-46(A), 46(B), 46(R), 47, 48, 49 and 58-77 into evidence in this proceeding;

.b.

Grant Licensee's Motion to Introduce as Exhibits the Interrogatory Answers of Dow and the Staff set forth in its Motion of June 8, 1977; c.

Deny Intervenors' objection to Licensee Exhibit 33 and order that Exhibit 33

.s well as the other exhibits set forth in Licensee's Motion of June 7, 1977 be admitted into evidence; d.-

Deny Intervenors' Motion to introduce Board Exhibits 1 and 2 into evidence in this proceeding; and e.

Grant Licensee's Motions of June 13 and June 21, 1977 to strike certain portions of i

,the testimony and rebuttal affidavit of Richard J. Timm.

i l

Respectfully submitted,p l

'..,g cz-wA - l David'.J/ Rossa

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' RV Rex Rentrow IIIT'

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One First National Plaza M' artha E. Gibbs Suite-4200 Chicago,. Illinois 60603 p

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'M UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Before the Atomic Safety and Licensing Board

)

In the Mttuer Of

)

)

CONSUMERS POWER COMPANY

)

Docket Nos. 50-329

)

50-330 (Midland Plant, Units 1 and 2)

)

)

)

CERTIFICATE OF SERVICE I hereby certify that copies of the attached

" MOTION FOR LEAVE TO FILE THE RESPONSE'OF CONSUMERS POWER COMPANY'TO FILINGS OF INTERVENORS DATED JUNE 27, 1977" and

" RESPONSE OF CONSUMERS POWER COMPANY TO FILINGS OF INTERVEN-ORS DATED JUNE 27, 1977" in the above-captioned proceeding, have been served on the-following by deposit in the United States Mail, first-class, postage prepaid, this 8th day of July, 1977:

Frederic J.

Coufal, Esquire AtomicgSafety and Licensing Chairman Appeal Board Atomic Safety and Licensing U.S. Nuclear-Regulatory Comm.

Board Panel Washington, D.C.

20555

.U.S. Nuclear Regulatory Comm.

Washington, D.C.

20555-Mr. C.

R.

Stephens Chief,-Docketing & Service Section Dr.

J. Venn Leeds, Jr., Esq.

Office of the Secretary 10807 Atwell of the Commission Houston,-Texas 77096 U.S. Nuclear Regulatory Comm.

Washington, D.C.

20555 gr'

o x::

4

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t-Dr. Emmeth A. Luebke,-Esq.-

Lawrence Brenner, Esquire-Atomic' Safety'and Lice ~nsing Counsel:-for NRC Staff

Board Panel U.S.. Nuclear ~ Regulatory Comm..

U.'S.. Nuclear. Regulatory L. Comm.,

' Washington, D.C.

20555 Washington,.D.C..

.20555

-L.

F. Nute, Esquire-iMyron M. Cherry,-Esquire, Legal Department-One IBM Plaza' DowJChemical-U.S.A.

Suitei4501' Chicago, Illinois' Michigan Division 60611

-Midland, Michigan

.48640-

-Atomic Safet'y~and--Licensing l

Board ~ Panel'

U.S.-; Nuclear Regulatory Comm.

Washington, D.C; 20555 i

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/

R.

Rex'Re frow III r

e Counsel for Consumers Power Company Ishnm,. Lincoln & BeAle

-One First National Plaza j-Chicago,' Illinois.

'60603 312/786-7500 i

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_ July 8, 1977l j

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