ML20031F839
| ML20031F839 | |
| Person / Time | |
|---|---|
| Site: | West Valley Demonstration Project |
| Issue date: | 10/16/1981 |
| From: | NEW YORK, STATE OF |
| To: | NUCLEAR FUEL SERVICES, INC. |
| Shared Package | |
| ML20031F837 | List: |
| References | |
| CIV-81-18E, NUDOCS 8110200470 | |
| Download: ML20031F839 (11) | |
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UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK 00CKETED USNRC NEW YORK STATE ENERGY RESE!8h*H06T 19 Ali:27 CIv-sl-18E AND DEVELOPMENT AUTHORITY, Plaint d f2c'rcre=ru' a c---
-Ti MEMORANDUM
-vs-and NUCLEAR FUEL SERVICES, INC.;
GETTY OIL COMPANY, ORDER Defendants Plaintiff Nek York State Energy Research and Devel-
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opment Authority ("NYSERDA") has moved fo'r partial sunrnary judgment requiring defendant Nuclear Fuel Services, Inc.
'("NFS") to vacate the site of the Western New York Nuclear Service Center ("the Center"), which NYSERDA owns, and to turn the same over to the possession of the United States 1
Decartment of Energy ("the DOE").
1 Under the k'est Valley Demonstration Project Act
("the Project Act"), Pub.L.96-368, 94 Stat. 1347 (1980),
the DOE is authorized to carry out a high-level liquid nuclear vaste management demonstration project at the Center.
The public need for the Project Act is defined in H. R. Rep. No. 1100, Part 2, 92d Cong., 2d Sess. 13-14 (1980), which cites the Nuclear Regulatory Commission's determination that, because of the danger of leakage, storage of liquid high-level nuclear wastes in tanks pre-sents a hazard to the public health and safety.
Accord-ingly, the Proje'ct Act, in section 2(a) thereof, directs the Secretary of Energy, among other things, to solidify ther.e wcstes at the Center and to develop containers suitable for permanent disposal of the solidified wastes.
Section 2(b)(4) of the Project Act directs the Secretary to enter into a cooperative agreem'ent with New York State under which the State will make the relevant portions of the Center available to the Secretary for the accomplish-cent of the purposes of the Project Act.
Such a Coopera-tive Agreement has been executed between the DOE and NYSERDA, and the DOE stands ready to take over the Center from NFS.
Plaintift's Notice of Motion for Partial Sum-mary Judgment, Affidavit of Carmine J. Clemente.
7 8110200470 8 fDR ADDCK 0500 PDR
ig 2-t NYSERDA's Complaint in this diversity-jurisdiction action states 32 "causes of action" against NFS, alleging various breaches and defaults of NFS under the parties' h
Lease and Waste Storage Agreements relating to NFS's pos-session and use of the Center, and requests monetary dam-ages, declaratory and injunctive relief, and states also a general request for specific performance of the agreements and the usual request for "other, further and different relief as may be just and proper" (Complain t, p.52).
Al-2, though defendants have objected that the instant motion does not seek a judgment as to any of plaintiff's 32 specific "causes of action," there is no reason not to consider the-relief requested as within the latter-mentioned two prayers for relief.
Defendants' objections as to the asserted inconsistency of the instant request for relief and plain-tiff's other requests for relief are, of course, untenable-under Fed.R.Civ.P. rule 8 (a) which permits demands for alternative and i,nconsistent forms of relief.
The gravamen of NYSERDA's motion is that NFS has no right to resist NYSERDA's demand that NFS turn the Center 2
Defendant Getty 011 Company ("Getty"), full owner of NFS, was not moved against in the instant motion be-cause,-plaintiff says, Getty is not in possession of the Center.
Nonetheless, Getty, arguing that it is a proper party to this motion inasmuch as plaintiff's Complaint seeks to hold Getty jointly and severally liable for NTS's obligations, submitted a memorandum and presented arguments orally at the hearing of this matter.
Plaintiff has appar-
~ ently acquiesced in Getty's presentations which, in any case, do not differ materially from those of NFS.
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over to the DOE, NYSERDA having terminated NFS's Lease.
effective December 30, 1980 due to NFS's alleged breaches and defaults thereunder, and alternatively because the Lease terminated according to its terms on December 31, 19fl0 and was not renewed.
'efendants ohject (1) that there are material issues of fact as to whether NFS was in default under the Lease so as 2
to justify NYSERDA's affirmative termination of the Lease, precluding summary judgment; (2) that the Lease and Waste Storage Agreements require NFS to surrender the Center only to NYSERDA, so that there is lacking a legal basis for a
t Islaintiff's requested relief; (3) that compelling NFS to 3
surrender the relevant part of the Center to the DOE would 3
Not involved in the present motion is that portion of the Center wherein are buried low-level nuclear wastes, which is not affected by the Project Act and which is operated pur-suant to state, not federal, licenses.
Defendants' contention that nothing in the Lease authorizes NFS to turn over the rest of the Center while retaining the low-level waste storag'e area has little merit.
NFS is presently prevented from abando,ning the low-level facility by a su:raary abatement order of the New York State Department of Environmental Conservation.
To propose that this legal' stricture, while it exists, gives NFS' the right to retain possession of the entire Center is absurd.
Nor is a different result required by section 6.04(c)(iv) of the Waste Storage Agreemen't, which provides that NFS will sur-render the low-level facilities to NYSERDA on the effective date of a surrender of the high-level facilities pursuant to Article 3 of the Waste Storage Agreement.
Leaving aside the question of whether NFS's turning over the high-level area to DOE actually constitutes a surrender under Article 3, which is the subject of a pending motion in a co=panion_ action (CIV-81-683) and is not determined on this motion, the pro-vision in section 6.04(c)(iv) is clearly annulled by the sum-mary abatement order.and by section 12.05 of the Waste Stor-age Agreement, requiring NFS's ce=pliance with all legal require =ents.
Section 13.01 of the Waste Storage Agreement makes separable any provisions of the agree =ent to the ex-tent that they shall be unenforceable, as section 6.04(c)(iv) is in view of the summary abatement order.
4-prevent NFS from obtain'ing spec fic performance of the sur-render and acceptance clauses of the Lease and Waste Storage Agreements for the period of the DOE's occupancy (variously estimated at between 10 and 20 years); (4) that, if NFS has further obligations and liabilities respecting the Center as contended by NYSERDA in this litigation, NFS is entitled to a present determinatica of their nature and extent and an opportunity to satisfy them; and (5) that the September 30, 1981 amendment to the Nuclear Regulatory Commission ("the NRC") license, permkttingNFSandNYSERDAtotransferthe Center to the DOE, is invalid and NFS cannot for that reason act thereon.
The first of these objections is well-taken but has no effect on plaintiff's contention that the lease period has terminated.
Defendants do not deny that the Lease termi-nated by its own terms December 31, 1980 and was' not renewed.
Consequently, NYSERDA as owner of the Centericlearly has a e
present right as a matter of state property law te airect its disposition, absent countervailing legal requirements.
Liberty Ind. Park Corp. v. Protective Pkg. Corp., 71 Misc.2d 116, 335 NYS2d 333 (Kings Co. 1972), aff'd, AD2d 351 NYS2d 944 (2d Dep't 1974).
One apparent limitation on this right is that pursuant to the NRC license, under which NYSERDA and NFS are co-licensees, NYSERDA is authorized only to own and let out the Center for nuclear waste facility 4
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purposes, and not to actually possess the Center.
This by itself does not prevent NYSERDA from passing its inherent possessory interest directly from NFS into the hands of the DOE.
Defendants urge, however, that the provisions of the Lease and Waste Storage Agreements do prevent such an ex-change of possession of the Center.
Section 26.01 of the Lease provides that "[1]essee, upon any expiration or earlier termination of.this Lease, will peaceably vacate, yield up and surrender to the Authority the Leased Premises."
(Emphasis added. )
Section 3.04 of the Waste Storage Agree-ment provides that:
"[UJpon any cancellation or termination of i
the Lease, *** NFS will surrender, and the l
Authority will assume, full responsibility for perpetual operation, surveillance, main-tenance, replacement and insurance of the then existing High Level Storage Facilities provided that such surrender and assumption shall not be or become effective until such time as all licenses, permits, consents and approvals of [the NRC) and all other govern-mental instrumentalities having jurisdiction required in connection with such surrender and assumption of responsibility shall have been obtained.
Such assumption of respon-sibility by the Authority, the primary pur-cose of which will be to provide adecuatelv for the protection of the health and safety of the public, shall not relieve NFS of its obligation to pay ***." '(Emphasis added.)
on defendants' view of these provisions, they create a right in NFS to have NYSERDA and only NYSERDA take physical possession of the Center from NFS upon termination of the
' Lease.
There can be no question that the plain language of these provisions recognizes NYSERDA's right to receive physical possession from NFS.
Except for the bare language of these, provisions, defendants have indicated nothing in either the words or underlying intention of the parties' agreements which invits.s the conclusion that this possessory right of NYSERDA cannot be s
' sod by directing that possession be passed to ano'
- entity otherwise legally authorized to physically possess the Center, such,as the DOE.
The cuestion of the "resconsibilitv for perpetual' opera-tion," etc., of the Center, which is the' focus of section 3.04 of the Waste Storage Agreement, is not in issue on the present motion.
In any casc, NFS's interest as protected by section 3.04 cannot reasonably be construed as having only NYSERDA assume responsibility.
It is more reasonable to conclude that NFS's interest is in passing responsibility from itse'lf to some other entity.
Without adjudicating th.cs issue of the locus of responsibility, it is to be noted that by section 3.02 (b) (ii) of the Cooperative Agreement between NYSERDA and the DOE, the 3 cuter assumes responsibility for protecting the pus 1ic health and safety in regard to the project premises for the duration of the project.
No reason has been suggested why :1YSERDA, having obtained the necessary governmental permisrion, cannot delegate its responsibility
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to this extent.
A decision whetner NFS retains residual
7-responsibilities or will, upon completion of the project, reassume responsibility as the word is used.in section 3.04 of the Waste Storage. Agreement is not required at this time, the issue of right to physical possession being entirely severable from responsibility issues.
Any possible argument that the parties intended that the language of section 26.01 of the Lease create an un-assignable or non-transferable right in NYSERDA to take physical possession of the premises is greatly undermined by section 31.01 of the Lease, which empowers NYSERDA "at any time" and without NFS's consent to " convey or otherwise d'ispose of [the Center) to any government or political subdivision thereof or to any governmental agency, authority or other instrumenta'lity or to any other public body," such transferee thereafter to be the substituted lessor, "with the same force and effect as the Authority."
This preserva-tion of NYSERDA's right of alienation suggests that the parties intended that as much as possible within the con-straints of governmental regulation and consistent with considerations of the public health and safety, ordinary principles of property law would govern their relationship.
It is clear that under common law principles a proprietor ordinarily has the right to direct a tenant whose lease has expired to surrender his or her property to whomever the proprietor may choose to appoint and, if it is impossible to peaceably effect such a transfer, to vindicate that right in m
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-g-the courts.
See, Liberty Ind. Park v. Protective Pkg. Corp.,
suora.
Therefore it must be concluded that the words of Lease section 26.01 -
"[llessee *** will *** surrender to the Authority" -- were not intended to bind the parties by th ir e
precise terms.
The obvious purposes of section 26.01 are to (1) place constraints upon NFS as to the condition that the premises must be in for a valid surrender to be made and (2) guarantee to NFS that it would not be forever responsible for the' hazardous wastes at the Center by giving NFS a right to require NYSERDA to resume possession when a proper sur-render is made.
These purposes.do not conflict with and hence do not abrogate NYSERDA's common law right to pos-session and to dire ~c,t the transfer of the premises to the DOE.
l NFS complains, however, that if the requested order is granted NFS will be injured and prejudiced by being unable.
for the period 'of DOE's occupancy to correct, alleged defi--
ciencies in the premises so as to make a valid surrender to 4
NYSERDA and be relieved of its affirmative duties under the-Lease and Waste Storage Agreements.
NFS has cited no auth-ority for the proposition that a tenant has a right to hold over until it cures defaults under its lease agreement, and 4
NFS has offered to agree to NYSERDA's acceptance of the subject premises with a reservation of any claims for mane-tary damages against NFS.
While NYSERDA's rejection of this offer in favor of the continuance of NFS's contractual com-mitment to surrender all facilities in good order may seem inflexible, NYSERDA's legal proprietary rights are not affected thereby.
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i the law of New York is~apparently to the contrary.
- See, First Nat. Stores v. Yellowstone Shop. Ctr., 21 N.Y.2d 630,
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637-38, 290 NYS2d 72.1,.725 (1968) (courts may not grant lessee a grace period in which to cure default under lease).
Defendants have not established that the survival of NFS's affirmative duties under the Lease for 10 - 20 years was so far beyond the contemplation of the parties at the making of 4
the Lease that it should not be countenanced, and in any P
case the question'is not squarely presented at this time.
The only question here is as to NYSERDA's right to assert its possessory interest in the manner chosen, against which NFS's interest in being clear of affirmative duties cannot prevail.
4 Similarly, NFS pas not established that it has a legal right to a present determination of its duties under.the
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Lease, and an opportunity to perform them.
Finally, although this court may be required to defer
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to the primary jurisdiction of the NRC and the Unitdd States Court of Appeals where the validity of a regulation of the NRC is challenged and is directly in issue, the validity of such regulations must in other cases be presumed Defend-ants point to no authority for the novel proposition that district courts must act as if an administrative regulation I
is invalid during the pendency of a collateral challenge to l
such regulation, for the probable reason that none exists.
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1 As.it appears that there exist no unresolved issues of i
fact materini to plaintiff's request for partial summary judgment with an accompanying order directing defendant NFS to vacate the portion of the Center subject to the West Valley. Demonstration Project Act and to turn.the same over to the Department of Energy, plaintiff's motion for partial summary judgment is hereby ORDERED granted, and defendant
- s Nuclear Fuel Services, Inc. is hereby ORDERED to vacate the subject premises and to yield the same, forthwith to the l
Department of Energy.
Dated:
Buffalo, N. Y.
October /
1981 i
t U.S.D.J.
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DOCKETED USNh; UNITED STATES NUCLEAR REGULATORY COMMISSION..
11 RI 1921:21 DOCKET NO. 50-201 NUCLEAR FUEL SERVICES, INC. AND ((g{Ck]g EUNCH NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY (WESTERN NEW YORK NUCLEAR SERVICE CENTER),
ORDER POSTPONING EFFECTIVENESS OF AMENDMENT TO FACILITY LICENSE NO. CSF-1 On October 13, 1981, Nuclear Fuel Services, Inc., ("NFS"),
filed with the Commission a Request for Hearing and a Motion for Order Postponing the Effectiveness of License Amendment.
Because of the complexity of the issues raised by NFS's Requcst for Hearing, the Commission believes it is in the public interest to postpone the effectiveness of the License Amendment (Change No. 31 to License No. CSF-1) for a period of two weeks while the Commission considers NFS's Request for Hearing as well as the pleadings filed by other interested parties.
Accordingly, the effectiveness of the License Amendment to Facility License No. CSF-1 is hereby postponed for a period of fourteen days to and including November 3, 1981.
FOR THE NUCLEAR REGULATORY COMMISSION 1
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