ML20032B209
| ML20032B209 | |
| Person / Time | |
|---|---|
| Site: | Saint Lucie  |
| Issue date: | 10/30/1981 |
| From: | Bouknight J FLORIDA POWER & LIGHT CO., LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL |
| To: | |
| References | |
| ISSUANCES-A, NUDOCS 8111050292 | |
| Download: ML20032B209 (12) | |
Text
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FPL:
10/30/81 BEFORE THE UNITED STATES f[CEO j
NUCLEAR REGULATORY COMMISSION BEFORE THE' ATOMIC SAFETY AND LICENSING BOARD 11 NW P4:17 In the Matter of
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50-389A[gh;h[ghC))
Florida Power & Light Company-)
Docket No.
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egA:cr{
(St. Lucie Plant, Unit No. 2) )
October _30, 1981 l'
a SUPPLEMENTAL MEMORANDUM OF FLORIDA POWER & LIGHT COMPANY
-.. e This Supplemental Memorandum is submitted pursuant to-the 3oard's Memorandum and Order of October 22, 1981.
We first discuss the impact on this proceeding of the Order entered on October 9, 1981, in the antitrust action brought by many of the Cities in the United States District Court for the Southern Dis-trict of Florida.2 In that Order, Judge King granted summary judgment for FPL on plaint'iff Tallahassee's claim that FPL unlaw-fully denied it access to EPL's nuclear facilities.
Thereafter, we will address the relevance of GAF Corp. v. Eastman Kodak Co.,
1981 Trade Cas. 1 64,205 (S.D.N.Y. Aug. 3, 1981).
I.
EPL submits that Judge King's decision should-have a decisive impact on this proceeding in two respects.
- First, based on that decision, the Board should determine that the Cities are collaterally estopped from asserting that any 47;),q of access to FPL's nuclear facilities evidences a "si 1
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I 0
- 4 Lake Worth Utilities Authority, et al. v. FPL, N< !J d
1 79-5101-Civ-JLK.
S-o.
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A copy of Judge King's decision is Appendix T to fg h a jfh/
2 Reply Memorandum of Florida Power & Light Company in thi p
ceeding, dated October 13, 1981.
)SC) 8111050292 811030 f[
PDR ADOCK 05000389 M
4 inconsistent with the antitrust laws."
Alternatively, the Board
' should determine that the Gainesville decision and FERC Opinion No. 57 are entitled to no collateral estoppel effect insofar as they address antitrust issues that have now been resolved in FPL's favor by Judge King.
A.
The Cities Are Collaterally Estopped From Arguing That Any Lack of Access to FPL's Nuclear Units Is " Inconsistent With the Antitrust Laws" In deciding F'PL's summary judgment motion, Judge King was faced with a record virtually identical to the record now before the Board.1 After examining that record, Judge King concluded that it wss insufficient to create a triable issue of fact under Sections 1 and 2 of the Sherman Act.
As he stated,
"[t]here has been ne showing of a contract, combination or con-spiracy in restraint of trade, that defendant possessed monopoly power, or, even assuming that defendant had monopoly power, that defendant acquired or maintained its nuclear facilities through other than business acumen."
Decision, at 12.
Underlying this conclusion was a full analysis of the shortcomings in the Cities' factual and legal contentions.
As Judge King determined:
- 1. By selling nuclear-generated power to certain Cities under the settlement license conditions approved in this proceeding, FPL has not entered into a combination or con-spiracy in restraint of trade.
Id.,
6-7.
The Cities filed with the district court a 136 page " Answer" 1
which contains a lengthy Statement of Facts.
The Cities the -
selves have acknowledged that this Statement is virtually identical to the factual presentation in their Motion in this proceeding.
See Motion, at 24 n.l.
Accompanying the Cities' Answer was an Appendix containing the vast majority of the docu-mentary materials that the Cities have submitted to this Board.
j
2.
The relevant market for purposes of analyzing the Cities' antitrust claims con-sists not of nuclear-generated electricity, but electricity generated from all sources.
Id,
7-8.
3.
FPL does not possess monopoly power in the relevant market As thus defined, Id.,
8.
4.
FPL's acquisition of its nuclear units was the result of unilateral accion, not joint s
effort.
Id.,
8-9.
5.
EPL nlone assumed the risks inherent in the cotetruction and operation of its nuclear facilities and those risks were substantial.
Ibid.
6.
FPL's decision to invest in nuclear power reflected "s'und business judgment" on FPL's part.
Id.,
C.
7.
Under judicial decisions construing Section 2 of the Sherman Act, a firm does not violate the antitrust laws merely by realizing the advantages ai-tributable to its large size or business acumen.
This principle applies to the construction of nuclear facilities; the Atomic Energy Act does not foreclose indi-idual electric utilities from building and operating nuclear facilities for the sole purpose of serving their own customers.
Id.,
at 9-10.
8.
Insofar as FPL has been unwilling to share its nuclear facilities with the Cities, it is because of its desire to use those facilities to meet the needs of its own customers; there is no evidence that FPL has sought to prevent the Cities from generating their own nuclear power or from obtaining such power from other sources.
Id.,
10-11.
9.
There is no evidence that the Cities have been unable to obtain adequate alterna-tive energy sources or to enter into nuclear generation activities of their own.
Id.,
11.
10.
There is no evidence that FPL's nuclear facilities constitute " bottleneck resources", to which the Cities must have access in order to continue operating their electric systems.
Id.,
11.
In Toledo Edison Comoany (Davis-Besse Nuclear Power Station, Units 1, 2 and 3), ALAB-378, 5 NRC 557, 561 (1977), the
4 Appeal Board held that "as a general' matter, a judicial decision is entitled to precisely the same collateral estoppel effect in a later administrative proceeding as it would be accorded-in a subsequent judicial proceeding."
Applied here, this principle bars the Cities from relitigating before this Board the antitrust issues that were resolved against them by Judge King.
The courts have recognized five preconditions for the application of collateral estoppel:
(1) the party against whom collateral estoppel is asserted must have been
- a party, or in privity with a party, to the prior action; (2) there must have been a final determination of the issues on which collateral estoppel is sought; (3) those issues must have been essential to the prior outcome; (4) the party against whom estoppel is asserted must have had a full and fair opportunity to litigate the issues in question; and 5) the issues decided in the prior litigation must be identical to those sought to be estopped in the later proceeding.
Each of these criteria has been satisfied here.
1 Identity of Earties.
While nominally limited to plain-tiff Tallahassee, the analysis underlying Judge King's decision applies equally to all of the plaintiffs in the Miami litigation; for this reason, FPL's summary judgment motion was opposed by plaintiffs as a group.
Moreover, plaintiffs in the Miami liti-gation have been represented by the same counsel who represents the Cities here.
Accordingly, any collateral estoppel effect attributable to Judge King's decision can properly be applied to all of the Cities.
4 m.
Finality.
To qualify as " final" for collateral estoppel purposes,~a decision need not constitute a final-judgment under 28 U.S.C.
6 1231.
Rather, it is merely neces-f sary that the decision be " adequately deliberated and firm" rather than "pr(visional and subject to change."
Restatement (Second) of Judgments (Tent. Draft No.
1, March 28, 1073) 5 41, Comment g.
See also Lummus Co. v. Commonwealth oil Refining Co.,
297-F.2d 80, 87-90 (2d. Cir. 1961); Sherman v.
Jacobson, 247 F.
Supp. 261, 270 (S.D.N.Y. 1965).
By entering summary judgment for FPL, Judge King's decision constitutes a definitive ruling on the Cities' nuclear access claim.
Accordingly, the decision finally puts to rest the factual and legal issues which that claim presents.
4 The Necessary and Essential Requirement.
In determin-ing whether the Cities' nuclear access claim could withstand sum-mary judgment, Judge King was required to review the evidence filed by the Cities in light of the legal' standards applicable under Sec-tions 1 and 2 of the Sherman Act.
Judge King's conclusions on the factual and legal issues raised by the Cities and FPL were there-fore "necessary and essential" to the entry of summary judgment.
The Requirement of a Full and Fair Opportunity to l
l Litigate.
In opposing FPL's summary judgment motion, the Cities filed memoranda totaling over 200 pages in length.
These memo-randa included a detailed recitation of the facts tnat, in the Cities' view, supported their nuclear access claim.
They also described fully the findings of the ilfth Circuit in Gainesville
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and FERC in Opinion No. 57.
Voluminous evidentiary materials --
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virtually identical to those included in the Cities' submission to this Board -- were filed with the Court to support the Cities' factual assertions.
At the conclusion of briefing, Judge King heard oral argument by counsel.
It is thus clear that summary judgment was entered in favor of EPL only after all relevant legal and factual issues had been fully aired and the Cities had received every opportunity to present their position.
Identity of Issues.
In proceedings under Section 105c of the Atomic Energy Act, the central issue is whether, under the proposed license conditions, a situation would be created or maintained that is inconsistent with the "' policies clearly underlying' the antitrust laws."
Toledo Edison Company (Davis-Besse Nuclear Power Station, Units 1, 2 and 3), ALAB-560, 10 NRC 265, 273 (1979) (Citation omitted).
Although the Appeal Board has stated that this standard does not require a finding that an actual 1olation of the antitrust laws has occurred, the NRC has recognized that it has no indepandent authority to declare antitrust policy, but is bound by aatftrust prin-ciples established by the courts:
.. [I]n the field of antitrust, our exper-tiso is not unique.
We merely apply principles, developed by the Antitrust Division, the Federal Trade Commission, and the Federal courts, to a particular industry."
Houston Lighting & Power Company (Scuth Texas Project, Unit Nos. 1 and 2),
CLI-77-13, 5 NRC 1303, 1316 (1977).
Judge King's entry of summary judgment for FPL was not based on a narrow holding that the Cities had failed to present evidence of an " actual violation" of the antitrust laws.
Rather, Judge King affirmatively found that, in con-structing and operating its nuclear facilities, FPL had engaged
+
l in conduct that-the antitrust laws condone-and even encourage.
~
As he statedi Ndefendant's acquisition of nuclear generating facilities was' simply the result of sound business' judgment" i
and, by demanding access to those facilities' the Cities were 4
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" seeking the fruits of another's labors without justification. "
l
- Decision,'at 11.
Under these' circumstances, the Judge concluded, l
"[f]airness and the law dictate that defendant should be able i
to reap what it has sown."
Ibid.
4 Judge King thus determined that the Citses' nuclear J.
access claim was incompatible not merely_with the letter of the Sherman Act but with
. Act's basic policies.
This is the precise issue now before.tdlis Board under Section 105c.
It 4
would be both irrational and inequitable to allow the Cities to relitigate this issue here after a United States District'. Court
)'
has reviewed substantially the same record and concluded that FPL's conduct has been fully compatible with antitrust policy.1 4
i 4
i 2
These factors differentiate the present case from Houston Lighting & Power Co. (South Texas Project, Units 1 and 2)
LBP-79-27, 10 NRC 563 '1979), where a Licensing Board declined to give collateral estoppel effect to certain findings made by
)
a district court in an action brought under Section 1 of the Sherman Act.
The Board there stressed its view that the district court had found only that no violation of Section 1 had been proven, a finding that could not be equated with a determination that the defendant's conduct was consistent with basic antitrust policy within the meaning of Section 105c.
In addition, the South Texas Board noted that it would be unproductive to apply collateral estoppel against ce tain
$ntervenors who had participated in the district cou-
- case, i
but not against the NRC staff and the Justice Departm O,
who were not parties to the district court litigation.
T..s pro-blem does not exist here, because the staff and the Department are not seeking additional antitrust relief.
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, ~ ~. _. _,.....,. -.,... - - - -, _. - _ _. -,..,
-B.
Judge King's Decision in Any Event Precludes the Board From Giving Collateral Estoppel Effect to the Gainesville Decision and to Opinion No. 57 It is well-established that collateral estoppel is.in-appropriate if "[t]he determination relied on as preclusive was itself inconsistent with another determination of the same issue."
Restatement (Second) of Judgments (Tent. Draft No. 2, April 15, 1975) $ 88(4).
See also Parklane Hosiery Co. v. Shore, 439 U.S.
322, 330 (1979).
This principle establishes that, even if Judge King's decision is not entitled to collateral estoppel effect, summary disposition of this proceeding against FPL would not be permissible.
The Bosrc would resolve this proceeding on a summary basis against.1.'PL only by deciding that the Fifth Circuit's Gainesville de:ision and FERC Opinion No. 57 conc sively establish the existence of a " situation inconsistent with the 1
antitrust laws."
Yet, faced with these " precedents" as'well as with extensive other 'vidence of FPL's conduct, Judge King reached precisely the opposite conclusion -- that FPL's actions in building and operating its nuclear units have not been anti-competitive in any respect.
In prior memoranda, FPL has demonstrated that neither the Gainesville decision nor Opinion No. 57 qualifies for col-lateral estoppel effect under well-established principles.
however, the con-Even if the Board were to decide otherwise, flict between these decisions and Judge King's opinion would l
make the application of collateral estoppel impermissible.
l i
I..--..
_9 II.
In'its Order of October 22, 1981, the Board suggested that the parties may wish to address the possible relevance of GAF Corp. v.
Eastman Kodak Co.,
1981 Trade Cas. 1:64,205 (S.D.
N.Y. Aug. 3, 1981).
Presumably the Board directed the parties' attentian'to this case because it discusses the requirements f'r cpplying offensive collsteral estoppel, and applies that doctrine in favor of GAF with respect to findings made by the jury and affirmed by the recond Circuit in another case brought against Kodak by another plaintiff, Berkey.
Berkey Photo, Inc.
y Eastman Kodak Co.,
603 F.2d 263 (2d Cir. 1979), cert. denied, 44.4 U,S. 1093 (1980).
The Court in GAF recognized that, under Parklane Hosiery Co. v. Shore, 439 U'.S. 322 (1979), application of of-fensive collateral estoppel would be impermissible if GAF could easily have joined in the Berkey case.
1981 Trade Cas.
1 64,205 at p. 73,748.
In applying the Parklane standard, the GAF Court emphasized that GAF filed its own lawsuit against Kodak some three months after the Berkey suit had been filed and that the very issue of whether the GAF and Berkey cases should be tried together had been considered by the trial court, which had ordered a prior and separate trial of the Berkey case.
Id. at pp. 73,746, 73,751.
Accordingly, it was clear tht GAF could not easily have joined in the Berkey case.
Id. at p.
73,751.
In marked contrast is the situation presented by the Gainesville case.
The Cities which now seek to accord col-lateral estoppel affect to Gainesville did not file their own
s lateral estoppel affect to Gainesville did not file their own lawsuit against FPL alleging the antitrust violations charged by Gainesville and subsequently found by the Fifth Circuit.
Nor did they seek to participate in the Gainesville case.
In-stead, they sat back and let one of their then number, Gainesville, litigate for t:.'m.
As we have shown in prior memoranda, their e.fter-the-fact rationalizations for their inaction -- which were not present in GAF -- are unavailing,'and collateral estoppel may not be applief. with respect to the Gainesville decision.
Respectfully submitted,
/,!
3 ;u ';v'
[.
J. A.*Bouknight', Jr.
f Lowenstein, Newman, Reis & Axelrad i
1025 Connecticut Avenue, N.W.
\\
Washington, D.C. ~ 20036 (202) 862-8400 Herbert Dym Covington & Burling 1201 Pennsylvania Avenue, N.W.
P.O.
Box 7566 Washington, D.C.
20044 (202) 662-5520 Attorneys for Florida Power &
Light Company
-. - - - - -... ~. - -.
.~ -
4 4
UNITED STATES.OF AMERICA-I NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter,of,
)
)
FLORIDA POWER &' LIGHT COMPANY'
)
Docket No. 50-389A
')
. (St. Lucie Plant, Unit No. 2)
-)
CERTIFICATE OF SERVICE 4
I'hereby certify that copies of the foregoing " Supple-i-
mental Memorandum of Florida Power & Light Company" were served on:the following persons by hand delivery: (*) or by l
deposit in the U.S. Mail, first class, postage prepaid this
[
30th day of October, 1981.
l.
Peter B. Bloch, Chairman Atomic Safety ~and Licensing Atomic Safety and Licensing Board Appeal Board Panel U.S.. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission i;
Washington, D.C.
20555 Washington,-D.C.
20555 Robert _M.
Lazo, Esquire Argil L. Toalston
- ~
Atomic Safety and Licensing Board Acting Chief U.S. Nuclear Regulatory Commission Antitrust and Economic Analysis l
Washington, D.C.
20555-Section U.S. Nuclear Regulatory Commission Michael A. Duggan, Esquire Washington, D.C.
20555 College of Business Administration University of Texas Janet Urban, Esquire i
i-Austin, Texas 78712 U.b. Department of Justice P. O. Box 14141 f
Ivan W. Smith, Esquire Washington, D.C.
20044 i
Atomic. Safety and Licensing Board j
U.S. Nuclear Regulatory Commission Donald A. Kaplan, Esquire Washington, D.C.
20555 Robert Fabrikant, Esquire Antitrust Division i
Docketing and Service Section U.S. Department of Justice Office of the-Secretary Washington, D.C.
20530 U.S. Nuclear Regulatary Commission Washington, D.C.
20555 Thomas Gurney, Sr., Esquire 203 North Magnolia Avenue' lf Benjamin H. Vogler, Esquire Orlando, Florida 32802~
l Ann P. Hodgdon, Esquire ll Counsel for NRC Staff Robert E. Bathen
{
U.S. Nuclear Regulatory Commission Fred Saffer
_ ashington, D.C.
20555 R.W. Beck & Aacaciates W
P.O. Box 6817 Orlando, Florida 32803 i
L u
. Robert A. Jablon, Esquire Alan J. Roth, Esquire Spiegel & McDiarmid 2600 Virginia Avenue, N.W.
Washington, D.C.
20037 William C. Wise, Esquire Suite 500 1200 18th Street, N.W.
Washington, D.C.
20036 William H. Chandler, Esquire Chandler, O'Neal, Avera, Gray
& Stripling Post Office Drawer 0 Gainesville, Florida 32602 Charles R.P. Brown, Esquire Brown, Paxton and Williams 301 South 6th Street P.O. Box 1418 Fort Pierce, Florida 33450 e
! /'
7
' :,l -,
n,. m 1
J. ; A.
Bouknight, Jr.
Lowenstein, Newman, Reis & Axelrad 1025 Connecticut Avenue, N.W.
Washington, D.C.
20036 (202) 862-8400 DATED:
October 30, 1981 l
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