Text

Memorandum & Order Re Preliminary Confidentiality Issues. Westinghouse to File Nonproprietary Version of Suppl to RA Weismann Affidavit & Protective Agreement Applicable to Wi Environ Decade
	ML20039B609
Person / Time
Site:	Point Beach
Issue date:	12/21/1981
From:	Bloch P; Atomic Safety and Licensing Board Panel
To:	; WESTINGHOUSE ELECTRIC COMPANY, DIV OF CBS CORP., WISCONSIN'S ENVIRONMENTAL DECADE
References
	ISSUANCES-OL, NUDOCS 8112230304
	Download: ML20039B609 (27)
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Before Administrative Judges:

SEilvLo DEC M M Peter B. Bloch, Chairman Jerry R. Kline Hugh C. Paxton WISCONSIN ELECTRIC POWER COMPANY Docket Nos. 50-266-0LA 50-301-0LA (Point Beach Nuclear Plant, Units 1 and 2)

December 21, 1981 MEMORANDUM AND ORDER (Concerning Preliminary Confidentiality Issues)

This decision resolves some preliminary skirmishes in a dispute about whether all or part of a Westinghouse F.lectric Company (Westinghouse) docu-ment, " Sleeving Report for Wisconsin Electric Power Company," (Westinghouse Sleeving Report) should be released to the public.

The Westinghouse Sleeving Report was accorapanied by an affidavit of Robert A. Wiesemann, who provided reasons why many portions of the report should be considered trade secrets and should be withheld from public disclosure.

However, the Board raised some questions about the adequacy of.

these reasons, leading to the filing of a second supporting affidavit by Mr.

Wiesemann.

Westinghouse first claimed that tht en:.iee second Wiesemann affidavit was confidential.

It then released most of the document, withholding only a portion.

However, it argues -that 10 CFR 2.790(b)(ii) and 9.12 deprive the Board of jurisdiction over the possible release the remainder of this 9501 5

document.

It also argues that the intervenor, Wisconsin's Environmental I(

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Confidentiality:

2 Decade (Decade), should not obtain this affidavit even under a protective order, in part because the document is not relevant to any issue in this case.

In addition, Westinghouse claims that 2.790 authorizes the Com-mission to consider. confidentiality issues but does not delegate that authority to the Board.

This point was reemphasized by Westinghouse in its Reply Brief of December 17, in which it asserts that 2.790(e), which gives the hearing board jurisdiction over confidentiality issues, is inapplicable because the Sleeving Report is not an NRC document.

The regulatory staff of the Comnission (staff) supports the'confi-dentiality of all of the Westinahouse documents.

It agrees that the Board lacks jurisdiction over the confidentiality of affidavits that are filed in support of the confidentiality of other documents.

It also, at one time, took the position that the Board lacked all jurisdiction over confi-dentiality issues.

But it withdrew that position in a brief it filed on December 7.

Decade vehemently opposes Westinghouse's claims of confidentiality for the Sleeving Report, particularly with respect to safety tests completed for the purpose of complying with Commission safety regulations.

It i

supports the Board's jurisdiction over this issue.

Wisconsin Electric Company (WE) also is concerned because it fears j

that were the Westinghouse report considered to be releasable, Westinghouse i

might withdraw permission for its use, depriving the Board of a proper basis for granting WE's application for a license amendment. WE's principal arguments are that it would be improper under applicable regulatory standards for the Board to release (or return) information that was claimed to be proprietary and that the Board should restrict its attention to confidentiality issues properly raised by Decade. WE states that the a

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3' Staff's Safety Evaluation Report contains conclusions regarding the

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allegedly confidential tests and that the staff's conclusions are adequate i

record support for the Board's conclusions in this case.

In summary, we have before us the-arguments about the release, with or without a protective order, of the second Wiesemann affidavit. The scope of our jurisdiction, which is. relevant to the merits of the underlying claims concerning the confidentiality of the Westinghouse Sleeving Report, i

also -has been questioned.

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THE BACKGROUND j

Controversy about whether certain information should be kept confidential has so pervaded this proceeding that it has seemed at times to eclipse the underlying claim concerning the safety of Wisconsin Electric Company's (WE's) project to repair tubes in its steam generator by l

sleeving.

The confidentiality saga began in a letter of September 30, 1981, from Decade to WE.

In that letter, Decade rejected WE's offer to give it access to proprietary data contained in the Westinghouse Sleeving Report,

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pursuant to a protective agreement that would prohibit Decade from releasing j

the information to the public.

Decade stated that it had "a general policy against trade secrets in matters so directly affecting the public interest."

Decade reiterated its concerns about confidentiality in a letter to i

the Board of October 6.

In that letter, Decm agreed to accept the Board's 1

expedited schedule for a special snow cause proceeding; however, it stated that

[T]he licensee may not have informed the Board of a major impediment

[to the timely completion of this proceeding].... Tne Board i

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4 should be aware that' this impediment created by the Licensee, unless resolved, may make that time-line. impossible to meet.

Specifically, the Licensee has refused to provide us with a copy of the Westing-house Report which serves as the major basis for the application, because of an alleged trade secret claim.

3 For these reasons, we would urge the Board to resolve the trade secret issue in accordance with the Commission's rules prior to tolling the time for answers to-the motion for interim relief.

Decade stated two other reasons for its concern.

One reason, which apparently was an error, was that Westinghouse had not provided the required affidavit concerning the confidentiality of the informaticn.

See Tr.

88-91. The other reason was that in a previous proceeding before the Public Service Commission of Wisconsin, WE had claimed that certain information was confidential and then had released favorable portions of the protected information to the press.

At this stage of the proceeding, Wisconsin Electric Company (WE) was i

seeking permission to conduct a steam generator repair demonstration program j

during the planned Fall 1981 outage of its Point Beach Unit I.

Controversy over confidentiality issues threatened to delay the proceeding so that a timely decision would be impossible. Consequently, immediately upon receipt of the October 6 letter from Decade, the Board arranged for an on-the-record j

telephone conference that was held at 10 an on October 9.

At that conference, the Board sought to divorce the issue of public release of 4

information from the issue of whether or not Decade would review the i

materials involved so that the case could move forward expeditiously.

The Board outlined a procedure by which it would postpone its decision about confidentiality until after it decided whether a demonstra-tion program should be authorized. Tr. 90-91.

Decade stated it "would be willing to agree to an order.

requiring [it] to abide by a confiden-tiality requirement pending resolution of the sh'ared secret issue." [Empha-i i

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.5 sis added.] Tr. 91. The Board then issued. the following oral, on-the-record Order:

Unless you notify me and the other parties today, then I will expect that you will execute [the protective agreement drafted by WE]... today, and file it in this case, iou may, of course, include a cover letter explaining that it will not waive any rights to challenge the appropriate treatment of this document as confidential.

. Tr. 92. - Then, neither Decade nor WE--serving at that time as agent for Westinghouse with respect to this information--expressed any objection to this way of proceeding. Ibid.

Subsequently, Decade had second thoughts about signing the protective order.

Because of its concern that it might be disadvantaged in the state legislature or the press by selective release of the confidential informa-tion, Tr. 134-135, Decade. refused to review the disputed report--leading to another on-the-record telephone conference, this time on October 20.

In the course of that conference, the Board ruled that pending full consideration i

of the confidentiality issue, the disputed information would be considered the proprietary information of Westinghouse.

Consequently, the Board refused to restrict Westinghouse in the use of its own property. Tr.142-4 143.

At a hearing held in Milwaukee on October 29 and 30,1981, the issue l

of confidentiality arose once again.

This time Decade objected to the Board conducting in camera sessions to consider allegedly confidential issues. At that time, the Board ruled that Decade could attend the confidential sessions subject to the protective order that had been issued.

Tr. 437-442, 450-459.

The Board continued to postpone consideration of the confidentiality issue at that time, however.

As an expression of their concern for the public's right to know, Decade's representatives then intentionally refused to attend several in camera sessions, even after the j

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Board recessed for the purpose 'of letting them reconsider their decision to abstain-from those sessions. Tr. 462-463.

In our November 5, Memorandum and Order, in which we authorized WE to conduct its stean generator sleeving. demonstration program, we characterized Decade's position as a " strong, principled stand concerning the.right of the public to know about information which may be relevant to the decision of.

the Board...." LBP 81-55 at 10.

We also stated that "the public interest in open government can be resolved through the timely consideration of Decade's arguments about public release of information." Ibid.

II THE ISSUE BEFORE US The particular limb of the tree of confidentiality with which we are now concerned arose out of a directive issued by the Board during the i

.0ctober 9 telephone conference. At that time, the Board requested that WE i-submit an affidavit stating the extent to which the parts of the allegedly l

confidential process are " unusual and, therefore, specially valuable to Westinghouse" and "some representation as to the market which is affectM by the release of this information, that is how they would be harmed by the release of some of this information." Tr. 95.

The answer to this question

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arrived on November 13, in the form of a second affidavit from Mr. R. A.

Wiesemann of Westinghouse.

It is the second affidavit that created the instant problem.

The 1

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supplementary affidavit was attached to a brief cover affidavit.

The cover l

affidavit stated:

The supplement to this affidavit contains Westinghouse proprietary information, relating to why information already i

furnished is proprietary, and is hereby so claimed, pursuant to i

10 CFR 2.790(b)(1)(ii)(1981).

I have indicated the same on each l

sheet thereof....

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Confidentiality:

7 There was no further particularization of why the entire affidavit should be considered confidential.

Upon receipt of the supplementary affidavit, on November 16, the Board called Westinghouse and requested further particularization of why the affidavit should be considered confidential in its entirety.

We also suggested the principle that the reasons for alleging confidentiality should be sufficiently particular for the Board to be able to reach its own decision that the document was in f act confidential. Tr. 77-78.

Nevertheless, Westinghouse continued to " stand by [its]... conclusion that the clear reading of the last paragraph of Section 2.790(b)(1)(ii) clearly gives the discretion to state baldly that the information is propriet ry in its entirety, and we stand by that position." Tr. 784-785.

j P is stand of Westinghouse has been attenuated, however.

On November l

13, Westinghouse sent to all parties a non-proprietary version of the l

supplementary affidavit of Mr. Wiesemann.

We have compared the non-l proprietary version to the original version in order to characterize the remaining omissions for the record.

The only omissions are:

i (1)

Paragraphs (8) through (11), which contain the names of companies which W stinghouse believes to be its major competitors and some repair work which Westinghouse believes they have completed.

(2)

All paragraphs listed under "Effect of Release of Information on l

Westinghouse Compm aive Position." These paragraphs are withheld because tuvy " describe the Westinghouse judgment of the 1

altered nature of the market should the proprietary information at issue be released." liowever, the Board would characteriz" l

these paragraphs as cont aining two types of information: ( a)

Westinghouse's views concerning the effect on the public welfare i

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8 of releasing information it holds confidential, and (b)

Westinghouse's views concerning the effect on it of releasing

. such information.

Since Westinghouse chose to withhold this information, the issue of public release is live and we are forced to consider our jurisdiction over this issue.

Only then can we address the issue itself.

III APPLICABLE REGULATIONS The principal regulations governing the public release of information l

submitted to the Commission as confidential trade secrets or privileged commercial or financial information are % 2.790 and 9.12.

Also relevant is i

s2.'744(d) governing requests for the production of NRC records or documents.

See also Kansas Gas and Electric Company, et al. (Wolf Creek Nuclear Generating Station, Unit 1), ALAB-327, 3 NRC 408 (1976) at 415-416.

10 CFR @2.790(b)(1) and 9.12, in-which we have underlined words we find significant, state:

l 2.790(b)(1)-- A person who proposes that a document or a part be l

withheld in whole or part from public disclosure on the ground that i

it contains trade secrets or privileged or confidential commercial or financial information shall submit an application for withholding i

accompanied by an affidavit which:

(ii) Contains a full statement of the reasons on the basis of 1

t which it is claimed that the information should be withheld from public disclosure.

Such statement shall address with specific-ity the considerations listed in paragraph (b)(4) of this section.

The application and affidavit shall be submitted at the time of filing the information sought to be withheld. The information sought to be withheld shall be incorporated, as far as possible, into a separate paper.

The affiant may designate with appropriate markings information submitted in the affidavit as a trada secret or confidential or privileged information within the meaning of %9.5(a)(4) of this f

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chapter and such information shall be subject to disclosure only in e

accordance with the provisions of %9.12 of this chapter.

9.12--(a)- Records of the kind specified in 59.5(a) [which provides j

specific exemptions from the general principle that information must be disclosed to the public] shall not be produced or disclosed by NRC ll personnel... except in accordance with this Part or %2.744 and i

2.790 of this chapter. -(b) NRC personnel... from whcn a record i

exempt from disclosure is sought shall follow the procedure specified i

below:

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(1) If an exempt record is sought from NRC personnel, tne request... shall promptly be forwarded to the Director, Office of Administration, who shall process the request provided in this Part or take such other action as may be appropriate, j

Thus begins our journey through the regulations.

Section 2.790(b)(1) l refers us to 9.12, which apparently sends us right back again.

To help us

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out, Westinghouse and Staff suggest we consider the following language from 1

the statement of considerations for 2.790(b)(1)(ii):

The Rule also has been amended to permit an owner to include trade secrets or confidential or privileged commercial information in the affidavit without subjecting such supporting information to the procedural requirements of the rule.

To do otherwise could result in i

an unnecessary number of affidavits.

41 Fed. Reg. 11808 at 11809.

i March 22, 1976.

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We conclude that this preamble resolves a possible ambiguity in the regul ations.

It persuades us that, solely with respect to information j

properly included in an affidavit and designated by an affiant "with appropriate markings", a part of 9.12(a) should be considered inoperable, j

That part is the language which preserves hearing board jurisdiction over j

confidentiality issues by permitting relcases under 52.744 and 2.790 in j

addition to releases under Part 9.

1 On the other hand, we interpret 2.790 as establishing the principle, for which there is an exception for properly qualif ted portions of certain 1

affidavits, that hearing boards have the authority to determine whether Commission documents should be released to the pubiic.

Section 2.790 is d

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10 contained in Subpart G, which establishes rules for 'all adjudications

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initiated by a notice of a hearing.

See s2.700. Although Westinghot.se correctly states trat 2.790 speaks of_"the Commission", subsection (e)-

explicitly authorizes this Board to issue orders pursuant.to that section.

2.790(b)(2) through (c) provides the standards for the exercise of that authority.

We are not persuaded by _ Westinghouse's argument that 2.790(e) applies only to Commission documents and that the Board does not have authority over its Sleeving Report, which is still a Westinghouse docum9r.t and not a Commission ' document.

This argument misapprehends the entire A

structure of 2.790, under whien a person submitting a document in a proceeding may propose that it be given confidential treatment. -That is i

precisely what has happened in this case.

The entire section is designed to provide standards for dealing with that proposal.

And subsection (e) authorizes the hearing board to apply the standards set forth in the section to documents submitted together with a " proposal".

A further Westinghouse argument., dealing with 2.790(b)(6), also has j

no' merit.

That subsection deals with the issuance of protective orders with 1

respect to documents whose proprietary nature is still contested.

It gi es i

hearing boards the authority to expedite their proceedings by issJir g f

protective orders pending final determinations on confidentiality.

f Furthermore, the use of the words " Commission" and " presiding officer" in that section does not lend weight to Westinghouse's interpretation. This l

subsection states that "the Commission" shall have the power to direct

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inspection of documents pursuant to a protective order.

Since tk. purpose of the subsection is to give the hearing board the authority to issue j

protective-orders prior to final determinations on the confidentiality of E.

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documents, we find that the subsection used "the Commission" as shorthand i

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11 for hearing board (or presiding officer). We therefore conclude that the selective use of the terms " Commission" and " presiding officer" has little meaning within subsection (b)(6) and that it certainly has no bearing on how subsection (e) should be interpreted.

Section 9.12(a) authorizes release of records pursuant to Part 9 or to 452.744 and 2.790.

That provision therefore negates the proposition that the hearing board lacks jurisdiction over confidentiality questions because they are to be handled exclusively under Part 9.

in sumnary, the general rule is that hearing boards have jurisdiction under @2.790 to determine, under applicable standards, whether to release information filed in their proceedings.

However, this jurisdiction is restricted by the last paragraph in s2.790(b)(1)(ii).

(It is further restricted by subsection (d), relating to certain narrow categories of information.)

TV APPLICABLE PRECEDENT Our interpretation of the regulations is buttressed by reliance on Kansas Gas and Electric Company, et al. (Wolf Creek Nuclear Generating Station, Unit 1), ALAB-327, 3 NRC 408 (1976).

In Wolf Creek intervenors requested from Westinghouse information that the company claimed to be proprietary.

The intervenors refused to sign the protective agreement offered to them by Westinghouse because they contested the proprietary nature of the information. The Licensing Board then ordered the information released.

Pending determination of the Appeal, the Appeal Board issued a protective order, which had the effect of letting the intervenor have the information on a confidential basis until the appeal was determined. Id.

at 411.

Confidentiality:

12 This case is, in one respect, on all fours with Wolf Creek.

See also Virginia Electric and Power Company (North Anna Nuclear Power Station, Units 1 and 2), ALAB-555,10 NRC 23 (1979l(in which the Appeal Board discusses the continuing applicability of the Wolf Creek standards but does not apply them only because of the absence of a live controversy).

Here, also, intervenors refused to sign a protective agreement. The Board then issued a protective L

order under which Decade could obtain the contested information pending a later determination on its confidential nature.

We expressly ruled that receipt of the information would not waive any rights to contest its proprietary nature.

In another respect, this case is different from Wolf Creek.

In that l

proceeding, intervenor requested an allegedly confidential document that had not been filed with the Commission.

Id. at 415-416.

Consequently,'the Appeal Board held inapplicable both 9.5(a)(4) and s2.790--which were interpreted to cover only agency records.

Nevertheless, the Appeal Board held that the document could be obtained directly from Westinghouse, pursuant to procedures approved by the Commission in the proceeding concerning the acceptance criteria for emergency core cooling systems (Docket No. RM-50-1).

The criteria established by Wolf Creek as applicable to requests to a party for allegedly confidential information are applicable here.

There is no reason to restrict Decade's rights because the informa-l tion it seeks from a party also could be sought from the staff.

Those l

criteria are:

1. "The applicants are to be afforded a reasonable opportunity to establish that there is a ' rational basis' for treating as confidential [the information it claims to be confidential]...."

Id. at 418.

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2. If 'the ' applicants make the requisite showing' the information should be kept confidential "unless the Board further finds there' to be countervailing considerations militating-in favor of public disclosure which clearly. outweigh the potential harm... which i

might inure from such disclosure." Ibid.

(See also ic. at 416-417 for a slightly different statement of applicable

~ standards.) In addition, since Wisconsin Electric. Power Company filed these f

documents with the Commission, they are agency documents subject to the j

regulatory provisions we discussed in 4'ne previous section of this decision.

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Westinghouse also has argued that Wolf Creek is inapplicable because i

2.790 was amended on January 9, 1981, 41 Fed. Reg.11808), and became I

effective af ter Wolf Creek was decided.

However, Westinghouse has not indicated why the change in the rules makes a difference; and we have read the Statement of Considerations for the modified rule and can not ourselves

. discern any reason for thinking that the new rule affects the continuing t

l vitality of Wolf Creek.

f V APPLYING THE STANDARDS Having adopted two independent reasons supporting our jurisdiction i

over confidentiality of documents, restricted by a specific provision relating 'to material contained in an affidavit and appropriately marked, we now consider Westinghouse's claim that we lack jurisdiction to release information tc the public because of the specific facts of this case and that we certainly should not release information in the supplemental I

Wiesemann affidavit which Westinghouse has marked as confidential, i

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'A. Is a ~ Confidentiality Issue Legitimately Raised in this Casei Apart from general questions concerning our jurisdiction, Westing-house has argued that th.e information which Decade seeks to release is not

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relevant to this case.

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We agree with Westinghouse that we have no business using our author-ity as a presiding officer to order the release of irrelevant information.

However, to consider relevance properly, we must back up a few steps and consider the state of the proceeding when Decade refused to sign a protective agreement. At that time, the allegedly confidential information contained in the Westinghouse Sleeving Report was sought by Decade and was relevant to the proceeding.

Pursuant to Wolf Creek and the applicable regulations, Decade had a right to a determination concerning the confidentiality of the information. However, Wisconsin Electric Power Company (WE) could not have afforded the adjudicatory dela; which would have been necessary to decide this issue.

Had we first pursued this issue, it could not have implemented its sleeving demonstration program on time.

Hence, in order to accommodate WE's scheduling needs, we issued a protective t

. order without prejudice to Decade's subsequent rights to determine the confidentiality of the disputed material.

Unless our "without prejudice" condition is effectuated, Decade will have been tricked into waiving its rights; and we are not willing to perpetuate such a deceit.

Therefore, we consider the confidentiality of the underlying technical documents to be a live issue. Compare WE's argument at Tr.

796-797.

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B. Availability to Decade of Marked Portions of the Affidavit l

Now we climb the next step.

Westinghouse has submitted a new

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document, a " supplementary affidavit", a portion of which it claims to be

-confidenti al.

On this occasion, however, Decade has expressed a willingness to receive the allegedly' confidential information under a protective order.

Tr. 810, 812-813.

Consequently, Decade's need to be informed can be fulfilled by providing it with information pursuant to a protective order and we need not release this information to the public in order to satisfy Decade's needs.

North Anna at 28.

We must, nevertheless, consider whether to release some of the withheld material to Decade pursuant to a protective order.

Decade seeks access to the material pursuant to such an order and Westinghouse seeks to deny Decade access altogether, on the grounds that it is not relevant and -

that Decade can not be trusted to fulfill its obligations under a protective order.

The standards governing issuance of a protective order are part of the general provisions governing discovery, found in 2.740.

Under those 4

provisions, the ordinary rule is that relevant material that is not privileged can be discovered.

Subsection (c) gives Westinghouse the right j

to request "any order which justice requires" to protect it. Although these procedures have not been followed in this case, we consider that this is the context in which Westinghouse's position must be considered.

(a) Relevance We have already characterized the information Westinghouse has withheld, and we will consider separately the relevance of parts of the withheld material.

Our rev ew of paragraphs (8) through (11), which were withheld, i

1 persuades us that this material would not provide relevant new information

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to Decade or the public.

It contains a statement of Westinghouse's views 4

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16 concerning potential competition for the repair of steam generators.

Most of what.is said is common knowledge.

Ordinarily it could not be withheld 'even from the public, but Westinghouse is concerned that its views about its competition are not known to the public and should not be released.

Regardless, this information is relevant to our determination about the confidentiality of the Westinghouse Sleeving Report.

Consequently, it j

must be released to Decade pursuant to a protective order.

We understand Westinghouse's sensitivity to release of the -information, but this argument is relevant to its public release and not to its release to Decade under

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protective order.

Our review of Westinghouse's deletions under the heading, "Effect of Release of Information on Westinghouse [ sic] Competitive Position", leads us i

to conclude the deleted information also must be released to Decade.

This section contains information which we believe should not even have been incorporated in an affidavit. Although a portion of the deleted information relates to Westinghouse's judgment of the potential effects of changed markets on its competitive position, a portion deals with a far-from-novel argument concerning the anticipated economic effects which could occur if government chose to release proprietary, technological information. We fail to see why this argument can be concealed either from Decade or from the public.

We find that Westinghouse has made a more persuasive case that it need not release to the public portions of its affidavit dealing with-potential impacts of competition on it.

This information could legitimately be considered confidential. On the other hand, Westinghouse considers this information relevant to our determination in this case or it would not have l'

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17 filed it with us.

Clearly, it is relevant.

Consequently,. it should be made.

available to Oecade, under an approoriate protective order.

We note that there is nothing in 2.790 or in 9.12 which in any way affects our responsibility to release relevant information to the parties to i

this proceeding pursuant to the rules governing discovery.

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(b) Trustworthiness Although Westinghouse has not presented any supporting evidence whatsoever, it has on three occasions questioned the integrity of Decade's represent atives. The first time was in a telephone conversation with the chairman of the hearing board, on November 16. Tr. 777, 783.

Then, Westinghouse repeated these charges during the on-the-record telephone conference the following day. Tr. 783. Then, in its November 25 brief on the

" ISSUE OF DECADE ACCESS TO -PROPRIETARY ORDER" it repeated its unsupported i

charges in footnote 4 on page 6.

i When the Board saw that footnote, which stated that " Westinghouse is prepared to show... that Decade previously has disclosed proprietary 1

information in an unauthorized manner", it immediately telephoned j

Westinghouse on November 31, 1981 for the purpose of informing Westinghouse that if it had proof it should already have submitted it.

However, we were j

informed that Westinghouse does not have such proof and cannot give us a i

deadline by which it may be expected.

We consequently find these charges to be utterly without basis.

Furthermore, we consider it highly improper for a party to rut aspersions

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on the integrity of anoti.er party without any supportive evidence. We expect that counsel for Westinghouse will refrain from making any further j

disparaging comments unless they can be proved.

Hearsay from anonymous,

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18 supposedly " reliable" sources, is not a proper basis for publicly impugning any person's integrity.

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8. Public Release Now we come to an issue that Decade has not raised; hence,' we are 4

a reluctant to reach it.

However, despite the contrary precedent set when the Appeal Board in North Anna sidestepped a confidentiality issue that was not i

squarely presented, we conclude that the rules require us to determine the I

validity of Mestinghouse's proposal that its documents be withheld.

There is no requirement that Decade have any interest in this matter (though we j

are grateful to it for alerting us to our responsibilities).

We cite the relevant subsections of 2.790(b), with significant words i

italicized:

(2) A person who submits commercial or financial information believed to be privileged or confidential or a trade secret shall be on notice that that it is the policy of the Commission to achieve an j

effective balance between legitimate concerns for protection of j

competit1/e positions and tne right of the public to be fully 1

apprised as to the basis for and effects of licensing or rule i

making actions, and that it is within the discretion of the

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j Commission to withhold such information from public disclosure.

1 (3) The Commission shall dete mine whether information sought to be withheld from public disclosure pursuant to this paragraph: (i) is a trade secret or confidential or privileged commercial or financial information; and (ii) if so, should be withheld from public disclosure.

We note also that 42.790(c) establishes the procedure to be followed should a proposal for withholding information be denied.

Since the regulatory language, "shall determine", is mandatory, we l

generally must decide issues of confidentiality. We may, however, still be 4

barred from considering the confidentiality of the portions of the Westinghouse supplementary affidavit that are in question.

With respect to j

Co r. f i d en t i al i t y :

19 those withheld sections, we restate the relevant language from 2.790(D)(1)(11):

The affiant may designate with appropriate markings information submitted in the affidavit as a trade secret or confidential or privileged commercial or financial information within the meaning of 9.5(a)(4) of this chapter and such information shall be subject to disclosure only in accordance with the provisions of 9.12 of-this chapter.

4 To1 fall within this exception from our jurisdiction the information must have ~" appropriate markings." ' Furthermore, since the markings must be made by the affiant, we infer that they must be made in good faith. We al so 1

infer that there is an implicit limitation on the extent to which a litigant can shelter what may be basically legal arguments merely by incorporating them in the accompanying affidavit.

In this case, we have the added wrinkle that the rules require that the affidavit covered by this exemption must be filed simultaneously with the information which is allegedly confidential.

This affidavit was not so filed, but was submitted to us in a subsequent filing which we requested t

because we considered the original affidavit insufficient.

Nevertheless, we consider that this supplementary affidavit should be accorded the same treatment as if it were earlier filed because it is of the same general nature as the filing provided for in the regulations.

4 (a) Appropriate Markings The meaning of " appropriate markings" appears to be one of first impression.

Ac find that the markings in this case were not appropriate.

They consisted of a general statement on each page, without any attempt to assign particular reasons for confidentiality to particular portions of the text.

That is not enough to fulfill the " appropriate markings" requirement, even i

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Confidentiality:

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.g though the preamble to this regulation indicated that a redundant affidavit need not be filed in order to support confidentiality.

1' The markings should have been-of the nature included in the Westing-house Sleeving Report.

In that report, Westinghouse used code letters 5"

' defined in the basic affidavit to supply reasons for withholding portions i

'of its documents. Thus, each portion of a document that Westinghouse 7

.c'onsidered confidential had one.or more appropriate markings attached, supplying particular reasons for withholding particular sections.

Using the same system on the supplemental affidavit would 'not have been burdensome.

,, That is all we -believe was meant by this " appropriate markings" requirement.

By fulfilling that requirement, Westinghouse would have avoided the necessity for redundant affidavits.

However, we find that Westinghouse did 4

not satisfy the " appropriate markings" requirement,_ even after we advised it z

that more explanation of its reasons was needed for us to determine whether it had properly treated portions of the affidavit as confidential.

(b) Appropriateness of the Certificate by the Affiant

]

The regulation requires that the affiant make the appropriate i

mirkings on his affidavit.

That apparently occurred in this case.

Along with the markings, the affiant apparently must certify that they are Torrect.

That also has occurred in this case.

However; our review of-the document that was claimed to be confident-tal in its totality persuades us-that the certification that the entire document was confidential was not. affixed with sufficient care to amount to l

good faith. A person certifying that an entire document is confidential

'must review the entire document and be convinced that each section is in f act confidential.

We do not believe that such a careful review could have Deen completed, in good faith, here.

Confidentiality:

21 There are several sections originally marked confidential which call the certification of its confidentiality into serious question.

Even a cursory examination of the "WHAT WESTINGHOUSE SEEKS TO PROTECT" section discloses that there is nothing there of 'a confidential nature.

It is a general description of what Westinghouse is trying to protect through claims of confidentiality.

For example, it is trying to protect " test methods and basic data" and " processes."

Furthermore, most of the sections labeled "THE NATURE OF THE COMPETITION" contain information that is generally known and can even be found in the opinion of this Board concerning authorization of the tube sleeving demonstration program.

(c) Legal Arguments In this case, Westinghouse has chosen to treat as confidential what may be one of its best legal arguments concerning the confidentiality of its Slee'ving Report.

Yet our examination of that argument persuades us that it consists of a frequently made assertion concerning the effect of government disclosure of proprietary information on the development of technology.

It is the kind of statement one might expect to find in the series of editorial advertisements that Mobil Oil Corporat. ion has run in newspapers and magazines.

The claim of confidentiality for this argument places this Board in an unnecesarily uncomfortable position. We could refuse to consider the argument in this proceeding.

Howev9r, we do not think that such a narrow position is appropriate.

We reject ine notion that the regulations gave an unqualified invitation to include legal argumentation in an affidavit; and we do not recognize the exemption from our jurisdiction as extending to this

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f argument.

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Confidentiality:

22 (d) Action of the Staff We are aware that our determination is inconsistent with that of staff in its November 20, 1981, letter from Robert A. Clark to Robert A.

Wiesemann, Manager of Regulatory and Legislative Affairs for Westinghouse.

The staff agreed with Westinghouse that the entire Wiesemann affidavit.

including large portions subsequently voluntarily released by Westinghouse, were entitled to confidential treatment.

I However, the staff did not even address the question of whether specific portions of the Wiesemann affidavit should be considered confidenti al.

It found that portions of the affidavit were appropriately treated as confidential and then neglected to examine other sections of the affidavit separately. Had it done so, we are confident that it would have i

discovered that substantial portions of the affidavit were not exempt from disclosure and could be released because they have no colorable relationship I

to confidential interests of Westinghouse.

Some of those sections have since been voluntarily released by Westinghouse, and we have already discussed why we question Westinghouse's good f aith in originally certifying these sections as confidential in their entirety.

The staff did not provide any reascn for believing that Westinghouse's arguments on the economics of technology should not be released.

We see no reason for that information, considered separately, to be considered exempt from disclosure.

A possible reason for the difference in approach of the Board and of staff is that staff does not seem to consider 10 CFR 2.790(b)(1) to be relevant.

That section requires that a proposal that a document be withheld in whole or part must be accompanied by a full statement of reasons.

In our

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proceedings, this requires us to consider whether reasons have been given about whether each part of a document may be withheld.

ML20039B609

Text

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