ML20039C065
| ML20039C065 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 12/22/1981 |
| From: | Leeds J, Luebke E, Mark Miller Atomic Safety and Licensing Board Panel |
| To: | |
| References | |
| ISSUANCES-CP, NUDOCS 8112280369 | |
| Download: ML20039C065 (44) | |
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION E'12I 49:16 ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges:
f Marshall E. Hiller, Chairman Dr. J. Venn Leeds, Jr.
Dr. Emmeth A. Luebke MN W
)
In the Matter of
)
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Docket Nos. 50-329 CP CONSUMERS POWER COMPANY
)
50-330 CP
)
(Midland Plant,
)
Units 1 and 2)
)
December 22, 1981
)
A p
PARTIAL INITIAL DECISION N
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(Remand Proceeding)
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APPEARANCES OF COUNSEL I'R' L,-
Gerald Charnoff, Esq. of Shaw, Pittman, PotIs'i?j~TE'[,7 and Trowbridge, Washington, D. C.
.t Ronald G. Zamarin, Esq. of Isham, Lincoln and Beale, Chicago, Illinois For the Applicant, Consumers Power Company l
William C. Potter, Jr., Esq. of Fischer, Franklin, Ford, Simon and Hogg, Detroit, Michigan R. L. Davis, Esq., Michigan Division Legal Department, Midland, Michigan For the Intervenor, Dow Chemical Company l
William J. Olmstead, Esq., Richard Hoefling, Esq.,
William D. Paton, Esq. and Dennis Dambly, Esq. of the Office of the Executive Legal Director, U. S.
Nuclear Regulatory Commission, Washington, D. C.
For the Nuclear Regulatory Commission Staff D3o) 5 Myron M. Cherry, Esq., Chicago, Illinois For the Intervenors Other Than Dow j (
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TABLE OF CONTENTS Title Page f.o.
l I.
REMANDED ISSUES 1
A.
Radon Releases 2
B.
Charges Relating to Conduct of Parties 4
II.
LEGAL PRINCIPLES REGARDING DUTY OF DISCLOSURE 11 III.
ENVIRONMENTAL EFFECTS.0F. RADON EMISSIONS 20 IV.
LACK OF CANDOR IN EVIDENCE CONCERNING 00W'S INTENT 25 V.
CONCLUSION 39 e
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges:
Marshall E. Miller, Chairman-Or. J. Venn Leeds, Jr.
Dr. Emmeth A. Luebke
- 1
)
In the Matter of
)
)
Docket Nos. 50-329 CP CONSUMERS POWER COMPANY
)
50-330 CP
)
(Midland Plant,
)
Units 1 and 2)
)
December 22, 1981
)
4 PARTIAL INITIAL DECISION (Remand Proceeding)
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I.
REMANDED ISSUES This proceeding results from a Memorandum and Order concerning remanded issues, entered by the Commission November 6, 1978.
The Commission had previously (April 10, 1978) requested the parties to state their views as to what issues, if any, remained for consideration at a reopened Midland p'roceeding in light of the Supreme Court's decisions reversing the Court of Appeals in Vermont Yankee Nuclear Power Corp. v. NRDC and Consumer Power Co. v. Aeschliman, 435 U.S. 519 (1978).
The Commission stated in pertinent part:
"we conclude that in light of the Supreme Court's decision, current Commission practice, and the presently expected initiation of the operating license proceeding, the only issue identified above which remains as framed for consideration by the Licensing Board is the airing and resolution of the charges relating to Consumers' conduct.
1 However, the Licensing Board will also address the issue of the
, environmental effects /of radon as required by subsequent Commission actions."1.
A.
Radon Releases The environmental effects of radon are in issue only because this proceeding was pending when the Commission deleted the radon term from Table S-3, and provided for reopening the record to hear evidence on radon releases in all pendingproceedings.EI The Memorandum and Order of November 6, 1978 further provided:
However, the generic nature of this issue leads us to conclude that the interests of the parties will best be served by structuring the Licensing Board's review of this issue in accordance with the procedure set out by the Appeal Board in ALAB-480 [ Philadelphia Electric Company (Peach Bottom Atomic Power Station, Units 2 and 3),. TAB-480 (May 30,1978)].
The radon evidentiary record and decision in the Perkins [ Duke Power Company (Perkins Nuclear Station, Units 1, 2 andT Docket Nos. STN 50-488, 50-489, 50-490] proceeding will be served on the parties to this proceeding.
Within 21 days after service, the parties may request in writing that the Licensing Board (a) receive additional written evidence on the radon question; (b) call for a further hearing on the Pukins record; or (c) consider objections to any aspect of the Perkins radon proceeding.
The request shall set forth with specificity the respects in which the Perkins record is-deemed to be incumplete, inaccurate, or objectionable, as well as precisely how such defects should be remedied.
"Within the same 21 days a party may file a memorandum with the Licensing Board addressed to two questions:
(a) whether 1/ npublished Memorandum and Order, dated November 6, 1078, slip opinion U
- p. 2.
2/ 43 Fed. Reg. 15613, 15616 (1978).
, the Perkins evidentiary record supports the generic findings and conclusions of the Perkins Licensing Board respecting the amount of the radon emissions in the mining and milling process and resultant health effects; and (b) whether the radon emissions and resultant health effects are such as to tip the NEPA balance against continued construction of the Midland plant."
(Slip Opinion, pp. 3-4)
As directed by the Commission, the Perkins radon evidentiary record and decision were served on the parties to this proceeding on November 17, 1978.
Within 21 days, the Staff (December 8, 1978) filed its response.
The Staff took the view that this Licensing Board need not receive additional written evidence on the radon question and need not call for a further hearing on the Perkins record.
It considered that the Perkins evidentiary record supported the generic findings and conclusions of that licensing board respecting radon emissions in the mining and milling process and the resultant health effects.
The findings were deemed to be equally applicable to the effects of the fuel cycle supporting the Midland facility.
The Staff further stated that given a clear case of need for the Midland facility, the cost-benefit balance in this proceeding would not be tipped by the tiny increments associated with radon release from the uranium fuel cycle.1I The Applicant, Consumers Power Company (Consumers), also filed a memorandum l
in response to the Commission's Order on December 8,1978.
That response included an affidavit by G. Hoyt Whipple, Professor of Radiological Health at the University of Michigan.
Consumers did not request that additional evidence be received on the radon question, or that further hearings be held on the Perkins record.
It concluded that, radon releases and the resulting impacts were insignificant in striking the cost-benefit balance, and that the Perkins evidentiary record l
l SI NRC Staff Response, pp. 3-6.
, supported the generic findings and conclusions of the Board.
Consumers further urged that a consideration of the effects of radon in the Midland plant cost-benefit balance would not tip that balance against continued construction of the nuclear facility, and that the impacts associated with radon emissions are so d_e, minimis that the balance is altered imperceptibly at most.
e None of the Intervenors in this proceeding has responded to the Commission's Order, or to the Perkins evidentiary record and decision or the NEPA balance on continued construction of the Midland plant.
We find, for the reasons described in Section III, post, that the radon effects from uranium fuel supply are negligibly small compared to the effects of natural radon emissions, and are therefore not significant.
B.
Charges Relating to Conduct of Parties and Counsel In late 1972 the Licensing Board awarded Consumers construction permits for the two-unit Midland nuclear facility. -
That award was affirmed by the Appeal Board several months later. -
Construction of the facility had actually begun in 1970, under a special exemption Consumers had obtained from the
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Commission.
Certain Intervenors sought judicial review in the U.S. Court of Appeals for the District of Columbia Circuit, but did not ask for an interim stay of construction.
donsequently, construction of the plant went forward while appeals were pending in the Courts.
4/- LBP 72-34, 5 AEC 214 (1972).
EI ALAB-123, 6 AEC 331 (1973).
, In mid-1976 the Court of Appeals held that the administrative proceedings had been defective in certain respects.6_/ The Court of Appeals directed the Commission to consider certain specific issues not involved here, and then stated:
",As this matter requires remand and reopening of the issues of energy conservation alternatives as well as. recalculation of costs and benefits, we assume that the Commission will take into account the changed circumstances regarding Dow's need for process steam, and the intended continued operation of Dow's fossil-fueled generating facilities."7_/
The Commission thereupon reconvened a Licensing Board to consider whether the Midland construction perinits should be continued, modified, or suspended as a result of the Court of Appeals' mandate.8/ That suspension proceeding.
Licensing Board scheduled a hearing, opened discovery, and set November 5, 1976, as the date for all parties to file written direct testimony.A!
Although it intended to hold a prehearing conference, certain delays caused the Board to reschedule the hearing, which commenced on November 30, 1976 without a prehearing conference having been held. After taking evidence for some 30 hearing days from November 1976 to May 1977, the Licensing Board issued a decision on September 23, 1977, declining to suspend the construction permits pending its decision on the merits.E That decision was affirmed by the l
I 6_/ Aeschliman v. NRC, 547 F.2d 622 (D.C. Cir. 1976); rev'd and remanded
(
sub nom. Vermont Yankee Nuclear Power Corp. v. NROC, 435 U.S. 519 (1978).
7_/ 547 F.2d at 632.
8/ CLI-76-ll, 4 NRC 65 (1976).
1/ emorandum and Order dated October 21, 1976.
M EI LBP-77-57, 6 NRC 482 (1977).
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Appeal Board on February 14, 1978, subject to future hearings on certain issues by the Licensing Board. b The major issue which the Appeal Board directed to be considered by the instant Licensing Board was the " full airing and resolution" of certain charges relating to the conduct of Consumers and its counsel in the prior construction permit suspension proceeding.
Those allegations were described by the suspension proceeding Licensing Board in paragraph 10 of its September 23, 1977 decision as follows:
"There is evidence in this record that Licensee has considered con-ducting its share of this proceeding in such a way as to not disclose important facts to the Board.
Notes taken by a Dow attorney of meetings with Consumers' attorneys indicate the desire of the latter to ' finesse' the dispute with Dow if no Intervenors appeared (Inter-venors Ex. 25, page 2, paragraph B).
The same notes reflect the exploration by a Consumers' attorney of the possibility of using l
Dow witnesses unfamiliar with the facts relating to the Dow-Consumers dispute to testify at the hearing; they further disclose a proposed strategy by Consumers to ' drag feet' in the hearing process because as long as construction continues, Consumers 'has a lever' (page 3, paragraph 4).
Assuming that the proposals set out here were made and acted upon, none were successful.
Aggressive Intervenors did i 1 appear and the Dow-Consumers matter was aired; the Dow witnesses furnished were highly knowledgeable men (Mr. Temple headed the l
Michigan Division of Dow); and Licensee has not slowed the suspen-l sion hearing.
Of course there remains the suspicion raised by the disclosure of these instances, that there may have been similar ploys which were successful."
(6 NRC at 485-86) l
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In ruling upon a subsequent petition by Consumers to reconsider paragraphs 9, 10 and 11 of its Order of September 23, 1977, the suspension proceeding Licensing Board in its November 4, 1977 Order further stated:
1_1f ALAB-458, 7 NRC 155 (1978).
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, Licensee and Staff are fearful that *.he language we used in' the paragraphs. indicated might be considered to constitute findings of fact on some items which we had indicated would not be considered as part of the suspension decision. One of these is the preparation of
'I the testimony of the witness Joseph Temple which was the subject of controversy during the suspension hearing. Though we made no reference to the preparation of the Temple testimony in the paragraphs complained of, there is concern that they may be interpreted.to constitute find-ings against the Licensee on that controversy. No such findings were made nor intended. Nor have we' concluded that there was any-misconduct on the part of attorneys in this proceeuing in.the questioned paragraphs.
Like the Temple testimony, we have put aside the question of attorneys' conduct to be treated separately.
1
" Paragraph 9 is merely an attempt to summarize that part of Seabrook under consideration and we think it fairly does so.-
Paragraph-10 is a comment on Midland Intervenors' Exhibit 25.
It-begins by reciting that the exhibit relates that certain sugges-tions were made.
It seems to us beyond doubt that it relates what we have said that it relates. The Board followed that recital with a sentence which reads:
'None of these proposed stratagems were successful.' This may be understood to imply that we have finally concluded that the suggestions were made and, further, acted upon.
We did not mean to so imply and the sentence should be. amended to make that clear.
The next-to-last sentence in the paragraph is a recitation of events with which we assume Licensee does not quarrel and on which we stand.
The final sentence is to the effect that the disclosures of Exhibit 25 raise a suspicion of 'similar~ ploys.'
Of course they do.
That is not to say that we wili act on suspicion, or that it will not be dispelled, or: that rules relative to burden of proof and preponderance of evidence will be disregarded."
(Order of November 4,1977, pp. 2-3)
The suspension Licensing Board further provided by its Order of November 4, I
l 1977, that its prior Order of September 23, 1977, be amended so that the sentence l
which appeared in its entirety on line five of page eight, would now read:
" Assuming that the proposals set out here were made and acted upon, none were successful."
(Order, p. 5)
The Appeal Board further directed the present Hearing Board to make a full l
airing and resolution of such charges, "whether or not the parties are.themselves l
l otherwise interested in pursuing these matters."
(ALAB-458, 7 NRC 155, at 177, footnote 87) i y
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, Finally, the Commission in its Memorandum and Order of November 6,1978, removed many of the original remanded issues from our consideration.
This action was taken by it in light of the Supreme Ccurt's reversal of the Court of Appeals decision. However, the Commission left standing the Appeal Board's direction in ALAB-458, 7 NRC 155, 177, for this Licensing Board to explore further the party and attorney conduct issues, stating:
"The only other matter remaining for Commission consideration is the airing and resolution of charges arising from the alleged attempt by Consumers to prevent full disclosure of the facts relating to Dow's intentions with regard to its contract.
The Vermont Yankee decision had no effect on this matter because the charges arose from Consumers' alleged actions at the post-Aeschliman suspension proceed-ing before the Licensing Board.
Furthermore, nothing has happened since the Appeal Board's decision in ALAB-458 which would warrant our modifying its instructions to the Licensing Board to further explore the charges at a future hearing.
Thus, there is no reason for us to reverse our earlier decision not to review ALAB-458 on this matter."
(Slip Opinion, p. 6) (Footnote omitted).
In our Prehearing Conference Order issued May 3, 1979, the Board adopted the following ultimate issues to define the matters in controversy:
1.
Whether there was an attempt by parties or attorneys to prevent full disclosure of, or to withhold relevant factual information from the Licensing Board in the suspension hearings?
2.
Whether there was a failure to make affirmative full disclosure on the record of the material facts relating to Dow' intentions concerning performance of its contract with Consumers?
3.
Whether there was an attempt to present misleading testimony to the Licensing Board concerning Dow's intentions?
4.
Whether any of the parties or attorneys attempted to mislead the Licensing Board concerning the preparation or presentation of the Temple testimony?
5.
What sanctions, if any, should be imposed as a result of affirma-
-tive findings on any of the above issues.
, The Board allowed discovery prior to the commencement of hearings on the above issues, and pursuant to noticeE hearings were held from July 2 to July 31, 1979. All of the fourteen witnesses who appeared and testified were called as Board witnesses, subject to appropriate cross-examination by all counsel.
In addition, at the Board's request the NRC Staff reviewed the underlying record as to all contentions, charges or allegations which had been previously made by the Intervenors other than Dow. -The NRC Staff reported.the results of.its review in a letter to the Board dated June 1, 1979, which was admitted as Board Exhibit 4.
At the conclusion of the evidentiary hearings, the parties were requested to-file briefs and proposed findings of fact and conclusions of law.
These documents as well as' appropriate responses to the filings of other parties were served by Consumers, Dow, and the Staff.EI However, the Intervenors Other Than Dow did not file any brief or proposed findings.
These Intervenors had not participated in the. remand hearing in July, 1979, although the Ooard caused copies of all transcripts of testimony, exhibits, motions and other papers to be served contemporaneous 1y on their counsel, Myron M. Cherry, Esquire.
On January 11, 1980, Mr. Cherry wrote a detailed five-page letter to the Board setting forth his views.and arguments regarding the matters in controversy.
This letter described its purpose as being "in the nature of'ou'r post-trial memorandum" (Letter dated January 11,- 1980, p. 4).
The Board entered an Order Granting Intervenors Other Than Dow An Opportunity to. File Proposed Findings on November 14, 1980.
El 44 Fed. Reg. 35061 (June 18, 1979).
EI The. Staff filed a Brief on Issues Identified in Board's May 3,_1979 Order, but it did not elect to file reply briefs.
By this Order, these Intervenors and their counsel were "given to and including December 29, 1980, to file written briefs and proposed findings which cite the record with specificity in support of the conclusions and arguments set forth in their. letter dated January 11, 1980." However, no briefs or proposed findings were ever filed in this proceeding by the Intervenors Other Than Dow.
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L II.
LEGAL PRINCIPLES REGARDING DUTY-OF DISCLOSURE The principal issue in this remand proceeding concerns the questions involving full disclosure to the suspension proceeding Licensing Board of the facts relating to Dow's intentions regarding its contract with the Applicant.
TheAppealBoard'sinstructions,confirmedbytheCommission,E/ areas follows:
"We have eschewed any comment on the significance of the events which led the Board below to include in paragraphs 9-11 of its decision (6 NRC at 485-86,-as amended.by order of November 4, 1977) comments relating to an alleged, albeit unsuccessful, attempt Ly the applicant to prevent-full disclosure of the facts relating' to Dow's intentions with: regard to its contract.
That
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matter was not put to rest by the November 4th. order.
Nor was it dealt with--indeed it was specifically excluded from consid-eration--in another order the Board issued that same day, s.
referring.certain attorney misconduct charges to a special licensing-board pursuant to'10 CFR Section 2.713(c).
That Board has since been-told'by the Commission to attempt to settle those charges, failing which it will be dissolved (January 30, 1978, letter from the Chairman of the Commission to the Chairman of the Special Licensing Board). The reasons the' Commission g' ave for dissolving the special board do not apply'to the entirely different-type of charges involved here. And it is important that they be fully aired and resolved.
Consequently, we fully expect both e
that matter and the merits of the ACRS's ' unresolved safety issues' to be explored further at future hearings before the Licensing Board.
This must be done whether or not the pgies are themselves otherwise interested in pursuing these matters."
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'EI Commission's Memorandum and Order, dated November'6,1978, pp. 2 and 6.
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MDonsumers Power Companf (Midland Plant [ Units 1 and 2), ALAB-458, 7 NRC
.155,177, fn. 87 (1978).
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. The nature and extent of the duty concerning affirmative disclosure of facts to NRC licensing boards must be analyzed in exploring the conduct of parties and counsel in this proceeding.
In describing the standards expected to be followed in the instant case, the Appeal Board further said:
" Insofar as the integrity of the proceedings or 'the good faith of the ' parties is concerned, there is no parallel between zealous advocacy in support of an arguable legal position and, e.g., the withholding of relevant factual information.
We note that in the latter regard we fully expect both clients and lawyers to adhere to the highest standards.
See, eg., Vermont Yankee Nuclear Power Coro. (Vermont Yankee Station), ALAB-138, 6 AEC 520, 533 (1973)." M (Emphasis supplied)
In the Vermont Yankee case alluded to above, the calculated peak cladding temperature to be attained by a certain nuclear reactor in the event of a loss-of-coolant accident was incorrectly described in an Appeal Board decision.
Counsel for the Applicant immediately nocified the Appeal Board of the correct information.
In commending counsel's forthrightness, even though it might have cut against his client's position, the Appeal Board said:
"Before discussing the 2298* figure, we should mention that Mr. Dignan displayed highly commendable candor in calling the Board's attention to the existence of a fact which could detract from the validity of the position he was advocating.
While we would expect no less from any member of the bar appearing before us, Mr. Dignan's conduct nevertheless is worthy of acknowledgement, for it reflected his full adherence to the principles which should govern thgse who by their advocacy participate in the adjudicatory process."_7_/
$ Id., at 172, fn. 64.
E ermont Yankee Nuclear Power Corp. (Vermont Yankee Nuclear Power V
Station), ALAB-138, 6 6 AEC 520, 533 (1973).
See also Sacramento Municipal Utility District (Rancho Seco Nuclear Generating Station), ALAB-655,14 tRC (October 7,1981), slip. op., p.17, fn.14; Hamlin Testing Laboratories, Inc.,-2 AEC 423, 428 (1964). Cf. Duke Power Company (0conee Nuclear Station and McGuire Nuclear Station), TLAB-651,14 NRC (August 10,1981), slip op., p. 9, rev'g. LBP-80-28,12 NRC-459, 469-71T1980).
. Virginia Electric and Power Compang (North Anna Power Station, Units 1 and 2), CLI-76-22, 4 NRC 480 (1976), was the first case in which a licensee was charged with making material false statements in connection with a license application.
The Commission was therefore called upon to resolve basic policy questions concerning an applicant's obligation to provide information to the Commission.
The question involved allegedly inaccurate information concerning seismic conditions furnished by the Applicant in the course of seeking its construction permits.
The allegations involved both affirmative representations concerning geologic faults, and omissions including failures to present evidence about suspected faulting at the licensing board construction permit hearings (M., at 481-83, 491-92).
The Commission carefully considered the proper definition of a " material" statement in NRC proceedings.
It held that " materiality is judged by whether a statement is capable of influencing a decision-maker, not whether the statement would, in fact, have been relied on.
The weight to be accorded relevant information is, in the end, the job of the independent regulatory commission, not the applicant" (Id., at 487).
Materiality was also deemed to be dependent in part on the stage of the proceeding involved.
It was held that at the hearing stage "where agency decisionmaking is imminent, arguably relevant data must be promptly furnished if the agency is to perform its function" (Id., at 488).
On the issue of " omissions" constituting material false statements, the Commission disagreed with both the applicant and the Appeal Board. El It held that "fuil disclosure by applicants and licensees of all relevant data is vital" to the Commission fulfilling its duties (4 NRC at 488).
It was further stated:
E Virginia Electric and Power Company (North Anna Power Station, Units 1 and 2), ALAB-324, 3 NRC 347, 360-63 (1976).
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, "We think rather that ' material false statement' may appro-priately be read to insure that the Commission has access to true and full _ information so that it can perform its job.
Nor is ' material false statement' such an unlikely choice of lan-guage for reaching acts of omission as well as commission...
The point of a statement is to express something.-
Silence can be remarkably expressive, a fact recognized in literature, in the law of evidence and in ordinary usage" (Id., at 489; emphasis ~ in original; footnote omitted).
The courts likewise have viewed the nondisclosure of material facts or data as= constituting false and misleading statements where affirmative disclosure is necessarytoeffectuatethepurposeofparticularstatutes.EI It is generally accepted that "the failure of a person to include material information in a necessary document can just as surely result in a false and misleading statement as would +he inclusion of incorrect information." EI Materiality as defined by the courts generally refers to the probative i
weight of evidence in the decisionmaking process, as judged by the facts and circumstances in-the particular case.
It has been stated:
"The term ' material' is used in many fields of law; for example, insurance law, bankruptcy, agency, motions-for new trial upon the ground of newly discovered evidence,.and in respect to perjury...The meaning of the word appears to be consistent in these various fields.
The test is whether the false statement i
has a natural tendency to influence, or was capable'of influ-i encing,' the decision the tribunal in making a determination required to be made."
19/- SEC v. Capital Gains Research Bureau, 375 U.S.180,186,'198-99 (1963);
Securities and Exchange Commission v. Texas Gulf Sulphur Co., 401 F.2d 833, 849 (2nd Cir. 1968).
20/
In re Caesar's Palace Securities Litigation, 360 F. Supp. 366, 386, fn.
19 (SONY 1973).
2_1/ einstock v. United States 231 F.2d 699, 701-02 (D.C. Cir. 1956), citing W
numerous decisions at fn. 6.
See also United States v. Krause, 507 F.2d 113, 118 (5th Cir.1975); Poulos v. United States, 387 F.2d 4, 6 (10th Cir.
1968).
i
, Under this formulation it need not be shown that there was actual reliance upon the false statement.
The test is whether the statement has a natural tendency or capability to influence, not whether it does so in fact.E The basic question is whether the representation could conceivably or was potentially capable of influencing or affecting a decision-maker.23/
The Commission's Rules of Practice provide that "[o]nly relevant, material,and reliable evidence which is not unduly repetitious will be admitted.
Immaterial or irrelevant parts of an admissible document will be segregated and-excluded so far as is practicable" (10 CFR @2.743(c)).
The courts have had occasion to analyze the distinctions involved in defining these concepts.
Thus it has been stated:
"' Material' when used in respect to evidence is often confused with ' relevant', but the two terms have wholly different mean-ings.
To be ' relevant' means to relate to the issue.
To be
' material' means to have probative weight, i.e., reasonably likely to influence the tribraal in making a determination required to be made. A statement may be relevant but not material.
Professor Wigmore depicts with some acerbity the difference between relevancy and materiality, 'the inaccuracy of our usage' of the terms, and 'the harmfulness of this inveterate error.'
Materiality, he maintains, is a matter I
of substantive law and does not involve the law of evidence.
He does not include 'mateglity' in the topics treated in his volumes on Evidence."-
(Footnotes omitted).
The Federal Rules of Evidence, enacted January,1975, contain the following definition of relevant evidence:
"' Relevant evidence' means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be with-out the evidence" (Rule 401).
EI Blake v. United States, 323 F.2d 245, 247 (8th Cir.1963); Gonzales v.
United States, 286 F.2d 118,121 (10th Cir.1960), cert, denied, 365 U.S. 878 (1961); Robley v. United States, 279 F.2d 401, 404 (9th Cir.1960).
El United States v. McGough, 510 F.2d 598, 602 (5th Cir.1975).
2_i/ Weinstock v. United States, supra, 231 F.2d at 701.
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The concept of materiality is not defined or used in the Federal Rules of Evi denc'e.
The Aavisory Committee's note to Rule 401,. supra, states the reason:
"The rule uses the phrase ' fact that is of consequence to the determination of the action' to describe the kind of fact to which proof may properly be directed.
The language is that of California Evidence Code 210; it has the advantage of avoiding the loosely used and ambiguous word ' material'." (Fed. R. Evid.
401, 28 USCA.
See also United States v. Madera, 574 F.2d 1320, 1322 (5th Cir.1978) and cases cited therein; 10 Moore's Federal Practice,' 401.01 el seg.)
The Appeal Board has recognized the mandatory duty of prompt and affinnative disclosure to licensing boards of either new information, or of changes in factual matters during the course of adjudication.
Where an applicant had modified its QA organization (which actually constituted an improvement over the old one), but a board was not promptly notified, it was stated:
"In all future proceedings, parties must inform the presiding 3
board and other parties of new information which is relevant and material to the matters being adjudicated.
To avoid any misunderstanding, we do not mean that necessary administrative actions by the regulatory staff should not go on while a pro-ceeding is being adjudicated (see 10 CFR 2.717(b)).
But this does not mean that the staff or applicant can be permitted to leave the presiding body and the other parties to the proceeding in the dark about gny change which is relevant and material to the adjudication._l_D/ Changes may take place but they must be disclosed.
If the presiding board and other parties are not informed 'in a timely manner of such changes, the inescapable result will be that reasoned decis_f on-making would suffer.
Indeed, the adjudication could become meaningless, for adjudi-catory boards would be passing upon evidence which would not accurately reflect existing' facts. The disclosure reouirement we impose is not the oroduct of any overly orocedural formalism l
on our Dart--it goes to the very heart of the adjudicatory process.
Its sacrifice for the sake of_excediency cannot be justified and will not be tolerated."43/
Footnote 15:
"Any-uncertainty regarding the relevancy and materiality of new infonnation should be decided by the ore-siding board."
(Emphasis supplied) b uke Power Company (William B. McGuire Nuclear Station, Units 1 and 2),
D ALAB-143, _6 AEC 623, 625-6 (1973).
See also Georgia Power Company (Alvin W.
Vogtle Nuclear Plant, Units 1 and 2), ALAB-291, 2 NRC 404, 408-12 (1975),
wherein the interpretation of th above-quoted McGuire disclosure requirement was discussed at length, b
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. In a later Duke Power Company case,2_6/ it was again stressed that prompt disclosures to' boards of changing circumstances are mandatory.
In Catawba the applicant had represented that it needed a nuclear facility on line by a certain date in order to satisfy its power requirements.
A supplemental ~ partial initial decision was then issued, authorizing a' limited work authorization (LWA).
An intervenor then called the licensing board's attention to public announcements by the applicant's president, outside the NRC hearing process, that a slowdown in the growth of power demand led it to defer completion of that plant by two years.
This was a possibility that had existed, but which the applicant's witnesses had not mentioned, during the evidentiary hearing.
The Appeal Board held that the I
licensing board's decision to reopen the record was fully justified under these circumstances because "it cannot be overemphasized that it is of utmost importance for parties.to keep the board abreast of changing circumstances-bearing on their cases" (4 NRC at 406 n.26).
The McGuire disclosure requirement statement set forth suora was quoted approvingly, and it was then stated:
"In Commission proceedings as in judicial ones, the tribunal
'must rely on counsel to present issues fully and fairly, and counsel have a continuing duty to inform the Court of any development which may conceivably affect an outcome,' Fusari v.
Steinberg, 419 U.S. 379, 391 (1975) (concurring opinion of Ch. J. Burger). We find it disconcerting that this is not tne l
first time this applicant and counsel have had to be reminded of this obligation.
See McGuire, supra, 6 AEC at 625. We trust that it will be the last."
(J d.. )
E uke Power Company (Catawba Nuclear Station, Units 1 and 2), ALAB-355, 4 D
l NRC 397, 401, 406 (1976).
i 1
i l
_ ~ _ _ - -.,,.
. b nvolved a request to reopen the record because of Seabrook i
alleged inconsistencies between statements made by a company official before a licensing board and before the Federal Power Commission and a-State legislature.
The Appeal Board held that the statements did not undercut the conclusions it I
reached based on the NRC record.
In these circumstances, a reopening of the record to consider the claimed testimonial discrepancies would not effect a 1
different result on the issue of financial qualifications. However, it was l
further stated:
"That is not to say that we are insensitive to the vice inherent in different stories being told to different legislative or regulatory bodies. At least in the absence of changed circumstances or other substartial cause, such a practice is worthy of condemnation even if, as secms to be the case here, perjury is not involved."
(6 NRC at 82,
- n. 53).
In Black Fox,2_8/ intervenors filed a motion with the Appeal Board seeking a stay of the effectiveness of a partial initial decision that permitted the issuance of a limited work authorization (LWA).
The Applicants told the Appeal Board that "the intervenors not merely waited 80 days after the rendition of the July 24 partial initial decision before filing their stay papers but, in addition, did not first seek stay relief from the Licensing Board.
According to the applicants, these considerations warrant cur sumary rejection of the motion."
(Id. at 531). However, the record showed a somewhat different state of facts.
On September 5 one of the intervenors, by a letter to the Licensing Board, requested it to revoke the LWA on the precise ground later assigned in support of the stay motion.
The Licensing Board treated the letter.
as a motion for reconsideration of the July 24 decision, and it entered an order E ublic Service Company of New Hampshire (Seabrook Station, Units 1 and P
2), ALAB-422, 6 NRC 33, 80-82 (1977).
E ublic Service Company of Oklahoma (Black Fox Station, Units 1 and 2),
P ALAB-505, 8 NRC 527 (1978).
See also Tennessee Valley Authority (Hartsville Nuclear Plant, Units lA, 2A, la and 28), ALAB-409, 5 NRC 1391,1395-96 (1977).
r
, on September 29 denying such relief.
That order was served on October 2, and the stay motion was filed less than 15 days thereafter.
The Appeal Board castigated this conduct as follows:
"In short, contrary to the implication left by the applicants' papers, it turns out that one of the intervenorsl3/ had sought what was tantamounttostayrelieffromtheLicensingBoardand,further,{4/hqt the intervenors came to us promptly once that relief had been denied. _
Without pausing to consider whether the request to the Licensing Board was timely (and if not, what sigi..ficance that m; ght have respecting the timeliness of the stay motion now in hand),
_/ this much can be said:
the failure of the applicants to have referred to these developments was inexcusable. Counsel appearing before this Board (as well as other NRC adjudicatory tribunals) have a manife'st and iron-clad obligation of candor.
That obligation is hardly fulfilled when, as here, there is a failure to call attention to facts of record which, at the very least, cast a quite l
different light upon the substance of arguments being advanced by counsel.16_/ We shall expect that, in the future, applicants' counsel will take pains to avoid this kind of conduct."
Footnote 13:
"It appears from the Licensing Board's September 29 crder that the September 5 letter was deemed by the Board to have been submitted on behalf of all of the intervenors."
Footnote 14:
"Although the word ' stay' may not have been employed in the September 5 letter, what was being sought (i.e., a lifting of the limited work authorization) was in essence the same relief which a formal stay motion would have requested.
Further, as should have been perfectly obvious to the applicants, given the Licensing Board's September 29 order any further attempt to obtain lifting of the limited work authorization by l
that Board would have been futile. Thus, even if the September 5 letter l
were not regarded the equivalent of a stay motion, the applicants still l
could not have fairly argued (without reference to the letter) that the l
intervenors should have formally moved for a stay from the Licensing Board before filing their motion with us."
Footnote 15:
"As we have seen, the stay motion is being denied on grounds other than its purported tardiness."
Footnote 16:
"Indeed, in this instance there might well be more involved than simply a failure to mention relevant facts.
In their stay motion (at
- p. 2), the intervenors stated, without elaboration, that the Licensing Board had refused 'to grant the relief requested.'
The applicants' response to this assertion (at p. 3) was that the intervenors 'are simply wrong.
Intervenors provide no citation in support of their assertion and, based on [their] review of the pleadings filed in this case, Applicants can find none.'
Even giving the applicants the benefit of all doubt with respect to the import of the intervenors' September 5 letter, we nonetheless find that statement misleading in the extreme." (Id., at 531-32.)
, III.
ENVIRONMENTAL EFFECTS OF RAD 0N EMISSIONS On April 14, 1978, the Commission determined that the radon value in Table S-3 of 10 CFR Part 51 relating to uranium fuel cycle environmental data was incorrect and deleted it from the Table.
The Commission deferred any decision on a new rulemaking-until the completion of the generic environmental impact statement on uranium milling.
The radon question was to be litigated in individual licensing proceedings.
The Licensing and Appeal Boards were to reopen the records in pending cases to receive new evidence on radon releases and on health effects resulting from radon. E In an Order Concerning Remanded Issues in the instant proceeding, dated January 4, 1979 (Order), the Board discussed the remaining issue of environmental effects of radon as directed by the Commtssion.
The Board offered the parties an opportunity to file a memorandum with the Licensing Board as to 'whether the PerkinsE! evidentiary record supports the generic findings and conclusions or the Perkins Licensing Board regarding (1) the amount of radon emissions from the uranium mining and milling process and the resultant health effects; and (2)
~
whether the radon emissions and resultant health effects are such as to tip the NEPANI balance against continued construction of the Midland plant.
tc was the Staff's position in its December 8, 1978 filing, that the Board i
need not (a) receive additional written evidence on the radon question; and (b)
El 43 Fed. Reg. 15613 (April 14, 1978).
EI Duke Power Company (Perkins Nuclear Station, Units 1, 2 and 3), LBP-78-25, 8 NRC 87 (1978).
El National Environmental Policy Act, 42 s.C.
4321 et seg.
_. ~,
i
. ~
need not call for a further hearing on the Perkins record, in the absence of an appropriate showing that the instant record is incomplete in some significant way. The Staff took the view that the cost-benefit balance in this proceeding would not be tipped by the very small increments associated with radon release from the uranium fuel cycle.
In its filing of December 8, 1978, Consumers did not request that additional evidence be received on the radon question or that additional hearings be held on the Perkins record. This Applicant did not have any objections to any aspect of the Perkins radon proceeding.
None of the Intervenors in this proceeding responded to the Commission's Order, or to the Perkins evidentiary record.
The Appeal Board on May 30, 1978, established a procedure to use the Perkins Licensing Board record and decision for the parties in seventeen other separate licensing proceedings, in order to frame a position regarding the radon issue.3_2/ The instant Board concluded that the radon question should be taken under advisement, and the decision on that issue was deferred until the Appeal Board acted in its -pending Perkins-related reviews (Order at 6).
Radon emissions during active mining and milling are expressed as a finite release in terms of curies per AFR (Ci/AFR). An AFR is the amount of fuel I
required to operate a 1,000 MWe model light water reactor at 80 pe_rcent capacity for one year.
Long term, continuing releases after the mines and mills have shut down are expressed as an annual release rate for each AFR produced during active l
mining or milling; that is, in terms of curies per AFR per year (Ci/AFR/yr),
i E Philadelphia Electric Company (Peach Bottom Atomic Power Station, Units l
2 and 3), ALAB-480, 7 NRC 796, 804-06 (1978).
l t
, 1
- )
In its decision on the environmental consequences of the uranium fuel cycle, the Perkins Licensing Board adopted a figure of 4060 Ci/AFR calculated from an estimate of the concentration of radon in the ventilating air from an underground mine. El The total amount of radon from open-pit mining depends upon the period of time that the walls and floor of the pit remain open to the atmosphere and the concentratior, of uranium in the soil of the mined-out pit.
That Licensing Board assumed that the amount of radon released from mining could be as high as 200 Ci/yr/AFR and that half of the. uranium for the Perkins plant would be from open-pit mines.
This resulted in a figure of 100 Ci/yr/AFR from unreclaimed open-pit mines.
If an open-pit mine produces enough ore to supply one nuclear plant and the pit is-refilled or otherwise stablized at the end of 20 years of operation, then some 4,000 Ci of radon would be released per AFR.
This is the same as that estimated for underground mining, so it would not matter whether the uranium came from underground or open-pit mines.
The uranium ore is delivered to a mill after the mining operation for 0
The radon emission from milling was estimated separation of the U38 at 30 Ci/AFR.
The residual material remains in tailings piles which continue to give off radon. The amount depends largely on how well the tailings piles are covered to reduce future radon emission.
Licensing activities provide increased regulation and protection.
The Perkins Licensing Board was of the opinion that tailings piles stablized to NRC criteria will emit only 1 Ci/yr/AFR, so that the amount of radon from tailings piles associated with the fueling of the Perkins i
plant would be about 110 Ci/yr.
The Appeal Board subsequently issued a decision on the radon issue in tre other Perkins-related cases on May 13,1981.E/ The radon release values 33/ 8 NRC at 90.
EI Philadelphia Electric Company (Peach Bottom Atomic Power Station, Units 2 and 3), ALAB-640, 13 NRC 487 (1981).
See also ALAB-654, 14 NRC (September 11, 1981).
, adopted by the Appeal Board for a model 1,000 MWe plant and three nuclear stations are summarized in that decision on pp. 586-42 of the Opinion in ALAB-640.
It leaves open, for future ruling, the question of health effects of those emissions.
Representative radon release rates for the uranium fuel cycle are shown in Table 3 of ALAB-640 for a model 1,000 MWe nuclear plant (Id.).
Total emissions consist of a finite release of 6,600 Ci/AFR from active mining and milling.
The continuing, long term release rate after the mines and mills have been shut down were considered for three cases.
Case 1 assumed that the mines are sealed and reclaimed and the tailings are covered.
This resulted in a release rate of 21 Ci/AFR/yr. Case 2 involved unsealed and unreclaimed mines, and tailings stablized in accordance with Commission regulations.
It resulted,in a release rateof91Ci/AFR/hr. Case 3 included unsealed and unreclaimed mines together with uncovered tailings, giving a higher release rate of 230 Cf/AFR/yr (Id.).
The above-described values for radon release adopted by the Appeal Board are somewhat higher than the Perkins Licensing Board findings of 1978. However, they may be considered to be in the same ball park, the order of 10,000 C'/yr, when compared to the natural emission of radon from the soil, some 100,000,000 Ci/yr.
The Perkins Licensing Board decision devoted several pages to a discussion of cancer effects due to a low concentration of radioactivity in the air.
The radon releases from mining and milling uranium, the order of 10,000 Ci/yr, are very small compared to the natural background emission of radon from the soil in the U.S. of some 100,000,000 Ci/yr. E# People live in this environment.
Indeed, people who live in houses with concrete floors, block walls or stone fireplaces are exposed to much higher radon concentrations than people in the open air, r
El 8 NRC at 95-100.
, 1 In essentially agreeing with the Perkins Licensing Board's above-described discussion of cancer effects, two of the five Appeal Board Judges (Dr. Buck and Dr. Johnson) in a dissenting ooinion to ALAB-640 wrote:
"In circumstances such as this, in which the addition to a natural environmental substance (i.e., radon) caused by human activities is extremely small compared with the existing natural concentration (it is small even compared to fluctuations in that concentration),
we believe that any assignment of environmental impact to the incre-mental addition could only be characterized as remote and speculative.
We conclude that this impact may properly be ignored in the asssess ment of the overall environmental impact of a nuclear power plant."36/
(Footnotes omitted.)
In the instant proceeding, as noted above, the Applicant and the Staff accepted the Perkins Licensing Board result and did not request additional hearings on the radon issue. The Intervenors did not request any additional hearings.
Bis Board can find no reason to disagree with the conclusion that the radon effects from uranium fuel supply to nuclear plants are negligibly small compared to the effects of natural radon emissions, and are therefore not significant. Accordingly, we adopt the finding of the Perkins Licensing Board, that:
" Based on the record available to this Board, we find that the best mechanism available to characterize the significance of the radon releases associated with the mining and milling of the nuclear fuel for the Perkins facility is to compare such releases with those associated with natural background.
The increase in background associated with Perkins is so small compared with back-ground and so small in comparison with the fluctuations in background, as to be completely undetectable.
Under such a circumstance, the impact cannot be significant."
(8 NRC at 100) 3_6/ ALAB-640, supra, 13 NRC 546-49.
Subsequently, in ALAB-654, supra, the Intervenors were given an opportunity to prove the contrary.
However, they were placed under a heavy burden of making "a concrete threshold showing that there is a difference in competent expert opinion on the health effects issue" in order to obtain a further. hearing on those questions (Slip Opinion, pp. 4-7).
- IV.
LACK-0F CANDOR IN EVIDENCE CONCERNING 00W'S INTENT When the Court of Appeals remanded the orders granting construction permits to the Commission, it " assumed" that the Commission would consider in its proceedings the " changed circumstances" relating to Dow's need for process steamfromthenuclearfacility.E At the suspension hearing, which commenced November 30, 1976, written direct testimony was presented by Joseph G.
Temple, the General Manager of the Michigan Division of Dow which had a contract with C3nsumers Power to buy process steam.
In the final version of his prepared testimony, the witness stated that Dow's intention at the time of the testimony was "to purchase process steam from Consumers beginning the first year of operation (1982)."E The testimony mentioned a review of the-contracts which Consumers conducted between August and September of 1976 which concluded that:
"Although the difference in cost between the nuclear-alternative and the coal-fired alternative has narrowed appreciably due to the numerous delays already incurred and the consequent cost increase of the nuclear plant, Dow's latest analyses show that the nuclear alternative still retains some cost advantage, l
assuming that Dow would require a return on investment of l
greater than 15% before taxes."_3_9./
E The Court stated that since a remand and reopening of the issues of energy conservation alternatives and a recalculation of costs and benefits was required, it " assume [d] that the Commission will take into account the changed circumstances regarding Dow's need for process steam..." Aeschifman
(
- v. NRC, 547 F.2d 622, 632 (D.C. Cir. 1976); rev'd and remanded sub nom.
l Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978).
E emple Test. at 8, following p. 220 of Suspension Transcript.
T E
- d. at 5.
I l
, While this witness was on the stand in the suspension heari g, counsel for Intervenors Other Than Dow presented evidence by cross-examination that the Michigan Division of Dow had recommended to a corporate group (Dow USA) parforming a requested review, that it find that the Consumers contracts and the use of nuclear steam from the Midland plant were no longer advantageous to Dow.S Notes of meetings indicating that Consumers had threatened Dow that it would bring a substantial lawsuit against Dow if Consumers felt Dow had breached its con. tract through lack of adequate support for Consumers, and that Consumers had suggested " finessing" its disputes with Dow at the hearing, were alsoproduced.S These disclosures led to the hearings in July,1979 to investigate the preparation and presentation of the Temple testimony relating to the Dow-Consumers relationship and to determine whether all significant information had been presented at the earlier suspension hearing.
Events occurred in the preparation of written testimony concerning Dow's intention to buy process steam which demonstrate an incorrect view of a party's duty of affirmative disclosure to the Licensing Boa.rd. As the Appeal Board stated, the Licensing Board had to probe "to determine what [Dow's] intention truly is" with respect to purchasing steam from Consumers.S/ Dow and S/
- r. 250, 406-10; Board Ex. 1.
The Michigan Division of Dow reports to T
Dow USA.
Dow USA is treated as a corporation in internal structure although it is not, in fact, incorporated.
Above Dow USA on the corporate ladder. is Dow Chemical Company, the only actual corporation in the Dow structure.
The Michigan Division made its recommendation to the Chairman of the so-called Operating Board of Dow USA.
Tr. 50,574-77; Dow Ex. 2.
SI Tr. 2,396-99; Staff Ex. 3 Doc. No. 26.
SI See ALAB-458, 7 NRC 155, 167 n. 45.
. Consumers argue that the only information necessary for the Board to make such a
. determination was the testimonial conclusion of Dow USA that Dow intended to purchase steam from Consumers if Consumers were able to sell steam from the Midland plant on schedule.
This argument overlooks the fact that intentions may be more complicated and more qualified than would be expressed through a simple statement, "Yes, we intend to purchase steam." The evidence developed in this hearing and in the suspension hearing makes it apparent that Dow's intentions in this situation were, indeed, a great deal more qualified than that.E In fact, Dow stated that its real position with respect to the contiract would not be known, even to Dow, until modifications to the contract had been negotiated and signed, and that until there were such modifications, Dow's position was subject to change.
Failure to include the recommendation of the Michigan Division of Dow in Temple's direct testimony could have created an unwarranted impression on the part of the Licensing Board that there was very substantial, perhaps even unanimous, satisfaction within Dow with the purchase arrangement.
In fact, the Michigan Division recommendation that there was "no longer the possibility or probability that the nuclear plant would be good for Dow's Midland plant"EI would have disclosed deepseated unhappiness with the arrangement.
Evidence that
~
Dow had seriously considered bringing suit against Consumers for breach of the contract and had drafted complaints for declaratory judgment emphasized the extent of this unhappiness.45/ The strength of Dow's commitment to buy 43/ See Tr. 50,994-95; Staff Ex. 5 Doc. No. 17 (September 29, 1976 draft of Temple Testimony) at No. 4.
El Staff Ex. 3 Doc. No. 4 at 9; Staff Ex. 3 Doc. No. 5 at 5; Staff Ex. 3 Doc. No. 6 at 2; Dow Ex. 3 (notes of October 12, 1976 meeting) at 10.
45/
Staff Ex. 4 Doc. No. 11 See also Staff Ex. 3 Doc. No. 12; Staff Ex.
15; Tr. 2,524, 52,457, 52,475 and 50,772.
. steam under its contract with Consumers could te accurately evaluated only with knowledge of this substantial internal disagreement.
Since Dow continued to consider suing Consumers as an option available.to it,S Dow's intent to take steam from Consumers could appear to be questionable.EI Consumers and Dow recognized the potential impact that knowledge of the disagreement might have on the Licensing Board, but they carefully constructed rationalizations for r.ot iiicluding it.
Specifically, one counsel for Consumers explained to Dow that he had not included in a draft of Temple's direct testimony information that Dow was concerned about Consumer's reliability, or that Dow was seeking a date after which it would be relieved of all contractual obligations if steam was not forth:oming, because such information would cause Consumers to
" lose the case."S/ ow expressed concern that if information relating to D
ongoing negotiations and the Michigan Division review were provided to the Board, the Board could find that Dow and Consumers had a " tenuous" relationship.SI SI Tr. 2,730, 50,985 and 52,511.
EI. See LBP-77-57, 6 NRC 482, 488.
SI Dow Ex. 3 (Notes of November 1,1976 meeting) at 3.
See also Tr.
50,762.
EI Dow Ex. 3 (notes of September 29, 1976 meeting) at 7-8; (:1otes of November 1,1976 meeting) at 2 and 7.
Contrary to the fears of Consumers' counsel, Dow Ex. 3 (notes of November 1,1976 meeting) at 7, inclusion of Dow's intention to review its position and keep its options open did not alert the Board to the tenuousness of the relationship.
There is no significance, in terms of the duty of disclosure to the Board, to the fact
.that certain counsel later felt this information would not have affected the Board's decision.
See Tr. 50,763. The obligation to disclose turns on the possible or potential signif_icance of information at the time disclosure must be mada.
See pages 13-15, suora.
, Willingness to keep this information from the Board evinces a disturbing tendency on the part of the two companies to keep from the Licensing Board any -
information which they felt could be argued should not be relied upon by the Board.
Indeed, one attorney testified that he had a duty not to present the Board with information on which it might erroneously rely.5,0/ Clearly such a determination should be made by the Board and not arrogated to itself by any party or its counsel (pages 13 and 16, supra).
The position taken by Dow and Consumers completely misstates the duty of parties and their attorneys before the Board.
It is not the function of I
attorneys to decide on what information the Board may properly rely.
If there is i
any question as to whether disclosure of a particular piece of information might be required, that information must be disclosed.
The attorney may then argue that the information is irrelevant or immaterial,S but.he cannot foreclose the Board from receiving the evidence.
Other incidents which occurred during preparation for the suspension hearing reinforce our finding that. Dow and Consumers contemplated as little disclosure as possible.
Notes from one meeting between attorneys for Dow and Consumer show that a Consumer's attorney suggested that if Intervenors Other Than Dow were not present at the suspension hearing, it would be possible "to finesse Dow-Consumers continuing dispute." S/ Two witnesses who attended the meeting agreed that this either was or could have been said.S The same 50/ Tr. 53,170.
El Carolina Dower & Light Co. (Shearon Harris Nuclear Power Plant, Units 1, 2, 3 and 4), LBP-78-2, 7 NRC 83, 88 (1978).
SI Staff Ex. 3 Doc. No. 26 at 2.
53/
- Tr. 50,757 and 52,009-10.
Since this testimony confirms notes which' were recorded contemporaneously with the meeting, we find that the statement was made.
See Tr. 52,267 and 53,622.
s,
notes indicate that Consumers suggested that the testimony relating to Dow's intentions be presented by someone who was not knowledgeable about the Michigan Divisionposition.EI Even after disclosure of the Michigan Division position, Consumers sought to assert claims of privilege with respect to various drafts of testimony on the issueofDow'sintent.SI While such items as outlines of evidence prepared by attorneys might have a qualified work product privilege, there is no basis for claiming that testimony, ostensibly the work of a witness rather than an attorney, is privileged.
Yet, even in the face of disclosures raising serious questions about the testimony's preparation,NI the attorneys sought not to disclose these materials.
5_4/ Staff Ex. 5 Doc. No. 26 at 3.
The individual involved denied ha' ring made such a statement (Tr. 51,423), but the individual who made ?.he notes quite clearly recalled the comment (Tr. 50,678).
One other witness also recalled the statement (Tr. 52,349).
In any case, even Dow officials not present at the meeting had heard of such a statement (Tr. 53,443), and Consumers was informed that Dow believed an unknowledgeable witness had been requested (Tr. 52,655; Dow Ex. 3 (notes of November 1, 1976 meeting) at 6).
Consumers did not deny making such a request, as it would be expected to do if no such request had been made.
The same notes containing the " finesse" and unknowledgeable witness remarks also mention a remark by Consumers that if the licenses were not suspended, they would " drag feet in hearing on merits."
Staff Ex. 5 Doc. 26 at 3.
We do not determine if such a remark was, indeed, made because it does not bear on the disclosure questions at issue here.
We merely note in passing that we do not approve of stalling tactics by any party.
El Tr. 388-96.
S/ Id.
_ The work product privilege was delineated by the Supreme Court in Hickman Taylor.EI The Supreme Court, recognizing that lawyers require a v.
certain degree of privacy to seek relevant facts, develop legal theories and plan strategy, held that materials such as interviews, statements, memoranda, correspondence, briefs,mentalimpressions\\ndpersonalbeliefswerenot discoverable unless denial of such discovery would unduly prejudice the case of the party seeking discovery or cause him unreasonable hardship. S No credible argument can be made that the privilege applies here.
Drafts of testimony, if they are properly prepared, reveal mental impressions of the witness rather than those of the attorney.
The testimony, after all, is to be the sworn statement of the witness, not the attorney.SI Material is not privileged simply because it is in an attorney's posse'ssion. SI Moreover, both work product and attorney-client privilege are waived as to material-disclosed to a third party unless the third party's interests are substantially the same as those of the party claiming the privilege.bI Dow, a third party, had seen, even helped to prepare these materials.
Yet Consumers pursued its claim of privilege for materials disclosed to a third party it had r
l
$ 329 U.S. 495 (1947).
EI M. at 510-11.
El This serves to distinguish cases such as In re Grand Jury Subpoena Dated November 8,1979, 622 F.2d 933 (6th Cir.1980), which hold that draf ts of submissions to an agency are covered by the work product privilege. Most submissions, unlike testimony, are not the sworn statement of a witness.
They are more likely to be briefs or argument.
S See Hickman v. Taylor, 329 U.S. at 511; Zucker v. Sable, 72 F.R.D.
1, 3 ( S. D. N.Y. 1975 ).
SI See Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp 1146, 1172-75 (0.S.C. 1974); Burlington Indus. v. Exxon Corp., 65 FRD. 26, 37 (D. Md.
1974); Stix Prods. Inc. v. United Merchants & Mfrs., Inc. 47 F.R.D. 334, 338 (S.D.N.Y.1969); D'Ippolito v. Cities Servs. Co, 39 F.R.D. 610, 610 (S.D.N.Y.
1965); Stanley Works v. Haeger Potteries, Inc., 35 F.R.D. 551, 554-55 (N.D.Ill. 1964); Transmirra Prods. Corp. v. Monsanto Chemical Co., 26 F.R.D.
572, 576-78 (S.D.N.Y. 1960).
, threatened to sue and who had threatened to sue it. 'This Board does not under-stand how Consumers could genuinely believe the materials were privileged.
In addition, in light of the disclosures which had already been made and the broad duty of disclosure to a Licensing Board, the Board believes that these materials should have been voluntarily and affirmatively disclosed by Consumers, even if they had not been the subject of a discovery request.6_2/
Apparently in an effort to discourage Dow from making negative statements about the project in the suspension hearing,03/ Consumers informed Dow several times that it had a contractual duty to support Consumers in the hearing, and further threatened that if it believed that that duty was arguably breached, Consumers would bring suit. EI A figure of S600 million was suggested as the magnitude of the suit.$
Although there was general agreement among those present that the statement was not intended to require perjury,$ it nevertheless was clearly intended to and did influence Dow.EI Dow representatives felt threatened by it,0 I although they 6_2/ g. Burlington Indus. v. Exxon Corp., 65 F.R.D. 26, 42 (0.Md. 1974)
(work product privilege cannot be used to shelter materials when partie have a legal duty to produce them to patent office).
- r. 2,399; 50,764; 50,864-65; 51,070; 51,144; 52,420 and 52,426-28.
EI See Staff Ex. 3 Doc. No. 26 at 3; Staff Ex. 3 Doc. No. 34 at 4;- Staff Ex. 4 Doc. No. 6 at 3; Staff Ex. 4 Doc. No. 10 at 3, Staff Ex. 4 Doc. No. 11 at 2, Staff Ex. 4 Doc. No. 17 at 2; Consumers Ex. 1 Doc. No. 7 at 2; Consumers Ex. 1 Doc. No. 8 at 3; Tr. 2,395; 51,140; 51,144; 51,447; 52,015; 52,049; 52,168; 52,185 and 52,347.
EI Tr. 359, 50,893; 52,275; 52,370 and 54,133.
SI Tr. 3,703; 51,239; 52,423 and 53,819.
6_7,/ Tr. 2,707; 50,764; 51,745, 52,017 and 52,271.
Those statements did, in fact, play a large part in the decision by the Dow USA Board.
Tr.
2,311; 2,699, 2,713 and 54,141.
S Tr. 2,394; 54,362; 52,987 and 54,191. Consumers' witnesses testified it was not intended as a threat.
Tr. 53,816 and 54,055.
The detail Consumers went into concerning the extent of Dow's liability and the conditions which would cause Consumers to bring suit did, however, go beyond the usual bounds for asserting that contractual rights will be pursued.
. were not certain what Consumers expected from them in the event Dow honestly concluded that the contract was not advantageous to it.EI Dow conducted itself through the remaining preparation and hearing with this perceived threat in mind.EI By forcing Consumers to decide what evidence would be presented, Cow sought to avoid charges that it had been the causeofalicensesuspensionorrevocation.EI Dow has argued to the Licensing Board that, in light of the danger of such a suit by Consumers, its actions were entirely understandable and proper.7_2/ However, an externality such as a threatened lawsuit does not relieve a party of its duties toward the Board.
The public interest in informed licensing decisions must take_ priority over private interests whether that private interest involves obtaining a license or avoiding a suit.
Dow's private interest' and pervasive concern about not providing Consumers with grounds for a suit in no way relieved it of its duty of affirmative disclosure to the Licensing Board.
The product of this attitude favoring limited disclosure to the Board was the written prepared testimony of Joseph G. Temple, General Manager of the Michigan Division of Dow. Mr. Temple on cross-examination admitted that:
EITr. 52,423 and 52,427.
E In this respect we agree with Intervenors Other Than Dow that Dow's intent to abide by the contracts was " highly tenuous and temporary",
motivated by desire to avoid Consumers suit.
See Memorandum of Intervenors Other Than Dow Chemical Company, Pending Issues (December 31, 1976) at 2-3.
EI Tr. 50,900-01; 52,504; 52,536-8; 52,548 and 52,579. This included taking such actions as not having a Dow employee write testimony, Tr. 51,018; allowing Consumers to choose the witness from Dow, Tr. 52,512-13; and requiring that all discovery requests go through Consumers, Staff Ex. 5 Doc.
No. 10.
El Brief of the Dow Chemical Company Incorporating Findings of Fact and Conclusions of Law at 44-88.
. "If the goal was to tell in complete detail, everything that was poing on at that point, that [my] testimony was, as judged l
by inat criteria, not open, not honest, and not consisting of l
all the relevant information."
(Tr. at 2,307)
He stated that he did feel he had given complete answers to the questions asked.EI No question, however, addressed the recommendation of the Michigan Division or the reasons why it was not adopted at that. time by Dow USA.
At no time did Dow want the Michigan Division position, the reasons for it, or the reasons for the Dow USA decision discussed. EI Eventually Consumers and Oow agreed not to. include these matters in testimony.EI They concluded after private consideration that these matters were either irrelevant or immaterial.EI We find it> significant, however, that Consumers' counsel found the ques' tion of materiality sufficiently close to hold a meeting specifically to address the issue.EI If counsel have any doubts whether disclosure of particular material is required, as they obviously had here, that information should be disclosed.
That Consumers' counsel found it necessary to hold this meeting sufficiently demonstrates that counsel had such doubts.
Moreover, counsel recognized that disclosure might affect the Board's decision.E Clearly, this is sufficient to require affirmative disclosure 7_3/ Tr. 2,306.
EI Dow Ex. 4 (notes of September 29, 1976 meeting) at 6, 8-9, (notes of October 12, 1976 meeting) at 8-10; Tr. 52,739 and 52,923-24 EI Tr. 51,907 and 53,384. The Dow attorneys referred to this as a Consumers decision, Tr. 51,341 and 53,005, but since it was the position they had advocated originally, they would clearly have agreed with it.
El Tr. 50,265; 50,411; 51,113; 51,511; 51,523; 51,787; 51,827 and 52,109.
77,/ Tr. 51,545; 51,597-98 and 53,164; Staff Ex. 3 Doc. Nos. 21 and 32.
EI Dow Ex. 4 (notes of September 29, 1976 meeting) at 7; Tr. 50,762 and 51,554.
under the standards set forth in Part II of this opinion, at page 11 etseq.
above.
As the Tegle testimony evolved through five drafts by the lawyers, even the conditions that the Dow USA Board had placed on its decision were phrased in a manner progressively less likely to alert the Licensing Board to the implications of Dow's complete official position.
The first draft, prepared by Dow on September 29, 1976 stated the decision of the Dow USA Board to be:
"[P]utting all the facts, circumstances and opinions together, the proposed nuclear project continues to be the best alternative.
But again, as I have stated, this is 'at the present time' and any changes of significance necessarily must result in another review of this position, and, quite possibly, even probably, a reversal of this position, depending of course upon how the myriad factors add up at this new point in time."
(Staff Ex. 5 Dog. No.
17 (September 29, 1976 draft of Temple testimony) at No. 5)L/
9 E There was no formal written motion or decision by the Dow USA Board (Tr.
52,518). Notes of the meeting by the President of Dow USA (who participated in the decision-making) say "Dow will say:
Still o.k., but any further delay makes it unattractive." Staff Ex. 12. A memorandum by a Dow attorney prepared the same day as the meeting, which he attended without participation in the decision, states:
"[A]1though there clearly were a great variety of opinions and pro-jections and that many differences had not yet been resolved, Dow had reached the positive conclusion that the circumstances have not changed sufficiently to call for any modification of its commitment to nuclear produced steam, and electricity....
[I]n view of this conclusion, it was my instruction to do whatever was proper and possible to support the Consumers' position in the pending proceed-ing....
I did not in this initial discussion outline the balance of the Dow Board's conclusion, to the effect that if there was any significant delay beyond the present projections furnished by Con-sumers, Dow was reserving its rights of recourse and intended fully to keep its options open."
Staff Ex. 4 Doc. No. 18 at 1.
The drafts of Temple testimony were the next statements of this decision.
- In the second (October 6,1976) draft, also by Dow, this had become:
"There are clearly a great variety of opinions and projections, with many of the differences as yet unresolved.
However, the Board reached the conclusion that at the present time, circum-stances have not changed sufficiently to call for any modifica-tion of Dow's commitment to the nuclear produced steam, and electricity to be supplied by Consumers Power in March of 1982, but in the event that there were to be any significant changes of any kind from the present projections furnished by Consumers Power, Dow was to reserve all of its rights of recourse and keep all of its options open."
(Staff Ex. 5 Doc. No. 17 (October 6, 1976 draft of Temple testimony) at IV-4.)
This draft added that the Michigan Division was to support Consumers in the hearing and make fully informed Dow personnel available as witnesses.
It included a statement that any significant change would lead to another review and quite possibly a change of position.
The next (October 22, 1976) draft was prepared by Consumers.
It stated that Dow's current position was that the Midland Nuclear Plant was Dow's best alternative if placed in service on schedule and that Dow had concluded that it could rely on Consumers to supply steam on schedule. E/ The only mention it made of any possible change was that:
" Suspension of construction would require Dow to review the question of whether a later availability date and higher capital costs and consequent higher costs to Dow, would so change the situation that Dow should make other arrangements-for its needed power and steam supplies."
(Staff Ex. 5 Doc.
No. 17 (October 22, 1976 draft of Temple testimony) at 6.)
An attached outline of material not planned for use in direct testimony indicated that Dow was reserving its rights of recourse and its options in the event of significant deviations from Consumers' projections.bI This material S/ Staff Ex. 5 Doc. No. 17 (October 22, 1976 draft of Temple te stimony) at 6.
El Staff Ex. 5 Doc. No. 17 (Outline of Detail of Last Review Conducted not currently planned as part of Direct Testimony) at 4.
, included the Michigan Division recommendation and indicated that the Dow USA Board had instructed the Division to support Consumers in the hearing and provide informed witnesses, while maintaining that any significant changes would call for a further review.
Although Dow complained that Consumers' draft was " misleading and disingenuous,"SI it provided the basis for the next Dow draft.E In this draft (October 28, 1976), the conclusion of the Dow USA Board was stated to be that "at the present time circumstances have not changed sufficiently to call for any modification of Dow's commitment to nuclear produced steam to be supplied by Consumers Power in March of 1982."8_4/ This draft noted that Dow was reserving its rights of recourse and keeping its ' options open.
Bringing suit against Consumers was not among the options listed.
Nor was any mention made of instructions to support Consumers, provide a knowledgeable witness, or conduct a further review if circumstances changed.
This draft was followed (November 1, 1976) by one prepared jointly by attorneys for Dow and Consumers which, with minor alterations, became the filed testimony.
The Dow position was then stated as follows:
"[A]t the present time circumstances have not changed sufficiently to call for a modification of Dow's commitment to nuclear produced steam to be supplied by Consumers Power in March of 1982.
lfnder the present circumstances as known to Dow, the nuclear alternative I
remains the most attractive one economically.
Further, the matter will be kept under continuous. review and Dow will keep all of its options open."
(Staff Ex. 5 Doc. No. 20 at 3) 8_2/ Staff Ex. 20; Staff Ex. 5 Doc. No. 26; Tr. 50,998; 51,002; 51,008-15 and 51,762-88.
El Staff Ex. 4 Doc. No. 34.
El Staff Ex. 5 Doc. No. 18 at 2.
38 -
Not only is no mention made of instructions to the Michigan Division to support Consumers and to provide knowledgeable witnesses, but there is no wording akin to that in earlier statements of the Dow USA position indicating that changes in circumstances might "possibly, even probably" lead to a reversal by Dow.
After counsels' repeated redrafting of the testimony, the Licensing Board was not provided with complete or candid direct written testimony concerning Dow's intent to enable it to achieve " sufficient probing to determine what that intention truly is," as contemplated by the Appeal Board.85/
The so-called Temple testimony was prepared and massaged primarily by the lawyers.8_6/ Although Temple reviewed the drafts and may have had a minor roleinphrasingsomeparts,E he felt his role to be editing and stylizing testimony written by the attorneys.88/ This is the reverse of the proper procedure for preparing written testimony.
The words should, at a minimum, be those of the witness although the attorney may suggest clarification of vague or confusing parts or may suggest omission of totally irrelevant materi al'.
Questions to be answered by the witness may, of course, be selected by his attorney as-they would be if he were examined orally at the hear %g, keeping in mind the duty of disclosure to the Licensing Board. However, the situation 85/
ALAB-458, 7 NRC 155, 167n. 45.
There was also an effort on the part of counsel to smooth over a disagreement between Dow and Consumers concerning the price of coal.
See Dow Ex. 4 (notes October 12, 1976 meeting) at 7, (notes on November 1, 1976 meeting) at 2, (notes cn November 8, 1976 meeting) at 4-5, (notes on November 15, 1976 meeting) at 4; Staff Ex. 5 Doc.
No. 33; Tr. 2,293-96.
-6 Counsel for Intervenors Other Than Dow characterizes the testimony as having been prepared by counsel for Consumers.
Letter from Myron M. Cherry to Marshall E. Miller, Esq., Dr. J. Venn Leeds, Jr. and Dr. Emmeth A. Luebke (January 11, 1980) at 2.
However, the authorship of the drafts clearly shows that counsel for both Dow and Consumers were invoived.
EI Dow Ex. 4 (notes on November 1,.1976 meeting) at 4; Tr. 306; 476-501; 51,285-86 and 51,299-51.
88/
Tr. ;2,281.
t
/
1
,s 4'
4
' should never arise, as it has here, where one could question whether in fact
~ the tsstimony s uttered by the witness or negotiated by the attorneys.b
'Factuafly, the circumstances in this case also differ significantly from the situation where direct testimony is the joint product of multiple input, such as
~
that prepared by a panel ^of technical witnesses.
This is also different from responies ho written interrogatories addressed to a party under the provisions of 10 CFR 2.740b,' where the party is expected to draw upon various sources of information available to it in order to make fuil and responsive answers. Here, the witnes: Joseph G. Temple was a high ranking executive of Dow.
His personal knowledge encompassed the original contract with Consumers, its problems and negotiations overihe years, the " changed circumstances" relating to Dow's need for process steam from the nuclear facility to which the Court,of Appeals had alluded, the review which his Michigan Division undertook after that Court of Appeals remand, the somewhat negative recommendations that the Michigan Division made, his own request for a separate corporate review by Dow USA, the nature and extent of that review, and whatever limitations there were on the continuing relationship between Dow and Consumers.
Under these circumstances, Mr. Temple was clearly qcalified to be primarily involved in the preparation of 'the entire spectrum of his own sworn testimony, and no script committee should_ have injected i
itself to the extent disclosed by the record.
s V.
CONCLUSION I' conclusion, we find-that in developing testimony on tie issue of Dow's n
intentions concerning the purchase of steam, the parties and their lawyers took b
. Geoers v. United States, 425 U.S. 80, 90, n.3 (1976) (an attorney must. distinyuish between discussing testimony and seeking to influence s
~
g it).
' ~
s s.
, an improperly narrow view of their duty affirmatively to disclose significant information to the Board.
This arose from an attitude which sought to justify and rationalize keeping certain information from the Board.
It also led to direct testimony being prepared largely by lawyers rather than the witness, which failed to convey the true nature and quality of Dow's intentions at the time.
The Temple prefiled direct testimony should have included the Dow Michigan Division's recoarnendation, as well as a fair and candid description of the true relations between Ocw and Consumers.
The Board should not have been subjected to gamesmanship between or among lawyers, and the parties had a nondelegable duty to adhere to the highest standards of disclosing relevant information.EI The final issue concerns the question of what sanctions, if any, should be imposed as a result of our findings.
The Board has given careful consideration to the entire record and it has concluded that under all the circumstances, sanctions are neither necessary nor ' appropriate.
In the first place, most of the deficiencies in disclosure identified above resulted from counsels' excessive preoccupation with the supposed interests of their respective clients, and insufficient sensitivity to the high level of voluntary disclosure required in NRC cases. However, there was no conspiracy to countenance perjury or to commit fraud upon the Board.
There is no evidence that any attorney deliberately intended to engage in unethical conduct, or to willfully deceive the Board.
Next, the high standards of testimony preparation and other. conduct which the Board has described herein, have not previously been specifically addressed by the NRC Appeal Board or the Commission.
Such standards of conduct may not E Consumers Power Company (Midland Plant, Units 1 and 2), ALAB-458, 7 NRC 155,177, fn. 87 (1978); Vermont Yankee Nuclear Power Corp. (Vermont Yankee (1973); Virginia Electric and Power Company (North Anna Power Station, Units 1 and 2), CLI-76-22, 4 NRC 480, 487-89 (1976).
See also Section II, supra.
. necessarily have been recognized or followed in other administrative proceedings.
Fairness to the parties and counsel would require some advance notice to them of the standards of conduct to be required in NRC proceedings. We ncte also that in the 1979 evidentiary hearing on remand, all counsel and witnesses scrupulously l
followed our request that there be no advance preparation of witnesses or discussions of their testimony.
All witnesses were called as Board witnesses, and they testified fairly and fully in developing a factual record in this inquiry.
Finally, we observe that all of the factual information described above was ultimately included in the record of the suspension proceedings.
That fact would not serve to condone deliberate misconduct,, but it is a mitigating factor since we have found no such deliberate intent in this case.
Accordingly, we conclude that the questions raised as to the conduct of parties and counsel in the original suspension proceedings have now been " fully aired and resolved", in compliance with the Appeal Board's mandate herein.NI It is further Ordered, in accordance with 10 CFR 2.70, 2.762, 2.764, 2,785 and 2.786, that this Partial Initial Decision shall be effective immediately and shall constitute the final action of the Commission thirty (30) days after the issuance thereof, subject to any review pursuant to the above-cited Rules of Practice.
Exceptions to this Partial Initial Decision may be filed within ten (10) days after service of this Partial Initial Decision. A brief in support of any such exceptions must be filed within thirty (30) days thereafter (forty (40)
NI ALAB-458, 7 NRC 155,177, fn. 87.
-=
t
, days in the case of the NRC Staff). Within thirty (30) days of the filing ano service of the brief of the Appellant (forty (40) days in the case of the NKC Staff), any otner party may file a brief in support of, or in opposition to, the exceptions.
THE ATOMIC SAFETY AND LICENSING BOARD
- >wd Dr. Emeth A. Luebke ADMINISTRATIVE JUDGE i
J~
y Dr. J. Venn Leeds, Jr.
ADMINISTRATIVE JUDGE Marshall E. Miller, Chairman ADMINISTRATIVE JUDGE Dated at Bethesda, Maryland this 22nd day of December, 1981.
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