ML20040C701
| ML20040C701 | |
| Person / Time | |
|---|---|
| Site: | Bailly |
| Issue date: | 01/25/1982 |
| From: | Eichhorn W EICHHORN, EICHHORN & LINK, NORTHERN INDIANA PUBLIC SERVICE CO. |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8201290164 | |
| Download: ML20040C701 (16) | |
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, UNITED STATES OF AMERICA "
NUCLEAR REGULATORY COMMISSION
~
'82 JMl 27 P3:33-BEFORE THE ATOMIC. SAFETY AND LICENSING BOARD-y - -
, . ~~ -
In the Matter ~of ) Docket No. 50-367
)
NORTHERN INDIANA PUBLIC ) ' (Construction Permit '
SERVICE COMPANY ) Extension)
)
a illy Generating Station, (B~ ) January 25,.1982 Nuclear-1) ,) ( k-NORTHERN INDIANA PUBLIC SERVICE COMPANY'S 9 9
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RESPONSE IN OPPOSITION TO PORTER COUNTY CHAP".'tX
- 4NgO/88g g INTERVENORS' " MOTION FOR AN ORDER 9 .,
IMPOSING A CONDITION UPON WITHDRAWAL -
gC' OF NIPSCO'S APPLICATIONS"
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is 03 N On August 26, 1981, Northern Indiana Public Service Company - (NIPSCO) filed a " Motion to Terminate Proceeding,"
i ' requesting that the Licensing Board terminate all proceedings-I pending before.it regarding the Bailly. Generating Station, Nuclear-1 (Bailly) in light of NIPSCO's decision not to con-
- struct-the facility. At the same time,.NIPSCO advised the Director of NRC's Office of Nuclear Reactor Regulation, the *
- Board, and all parties of withdrawal of NIPSCO's application for an extension of the - latest date for completion of construc-L tion specified in the Bailly Construction Permit. On January.8,
! - 1982, Porter County Chapter Intervenors (PCCI) filed a " Motion for an Order Imposing a Condition upon Withdrawal of NIPSCO's Applications" (hereaf ter " Motion") which requests that the Licensing Board enter an order conditioning NIPSCO's withdrawal
)$C)3 of its application upon its payment of "PCCI's expenses and l- '
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attorneys (sic) fees in this proceeding, pursuant to 10 CFR
- S . 2.10 7 (a ) '. " ' (Motion, p.'l.) NIPSCO opposes this Motion and requests that it be denied.
NRC Is Not Authorized to Require'an Applicant to Pay Intervenors Fees and Expenses 2
The Motion was apparently prompted by an Appeal Board ;
statement last month in a. case involving withdrawal of'an applica-tion for a construction permit:
We leave open the question whether some- '
- thing short of a dismissal with prejudice, such as conditioning withdrawal of an appli-cation upon payment of the opposing parties' .
expenses, might.be within the Commission's powers and otherwise appropriate where the 4
expenses incurred were substantial and inter-venors developed information vhich cast doubt upon the merits of the application.
(Puerto Rico Electric Pcwer Authority (North Coast Nuclear
- Plant), ALAS-622,-slip op. at 17, n. 11 (December 7,_1981).)
PCCI-urge that the " question" referred to by the Appeal Board I be resolved in this case and the condition imposed. o i
l l Statutory Authority Cited by PCCI l
l PCCI first assert that the Commission's " power under the i
j Atomic Energy Act and its own regulations" to impose the requested 1
condition upon NIPSCO is "readily apparent." PCCI thus acknowl--
P l edge that statutory authority is a prerequisite for the agency l
action which they seek, but PCCI fail to demonstrate that the L authority exists. Their selection-of statutory authority upon which to rely appears whimsical; PCCI ask this Board to find such authority in the following statutory provisions:
7-42 U.S.C. S 2012 (e) : the Congressional finding that nuclear materials and facilities are affected with the public interest and that their regulation is necessary in the national interest to assure the common defense and security and to protect public health and safety.
42 U.S.C. S 2013 (f) : the statement that it is one of the purposes of the Atomic Energy Act to provide a program of administration which will enable the Congress to be currently informed so as to take fur-ther legislative action as may be appropriate.
42 U.S.C. S 2201(p) : the authorization for the Commission to make such rules and regulations as may be necessary to carry out the purposes of the statute.
42 U.S.C. S 5841: the statutory establishment of the Nuclear Regulatory Commission and trans-for to it of "the licensing and related regulatory functions of the Atomic Energy Commission."
We submit that the cited provisions do not authorize the NRC to require that an applicant for a license (or amendment thereto) pay the litigation expenses, including attorney's fees, of another party in an agency proceeding; nor do any other statutory provisions from which the Commission derives its authority.
The "American Rule" Under the "American Rulo" attorney's fees "are not ordi-narily recoverable in the absence of a statute or enforceable contract providing therefor." (F.D. Rich Co. v. United States, 417 U.S. 116, 126 (1974), quoting Fleischmann Distilling Corp.
- v. Maier Brewing Co., 386 U.S. 714, 717 (1967).) Although it
. ,t has been criticized, the Rule has long endured and has been re-affirmed--as in Alyeska Pipeline Service Co. v. Wilderness
, Society,-421 U.S. 240 (1975), where the Supreme Court noted that
- i. In 1796, this Court appears to have ruled that the Judiciary itself would not create a general rule, independent of any statute, allowing
- awards of attorneys '- fees . ful federal courts. . . .
This Court has consistently adhered.to that early holding.
4
([].
j at 249-250 (citations omitted) . )
Congress has never changed this general rule; rather, it has provided.for certain exceptions in cases where it felt thtt " fee shifting" is warranted:
i What Congress has done, however, while fully ,
- recognizing and accepting the general rule, is to make specific and explicit provisions for the allowance of! attorneys' fees under selected statutes granting or protecting various federal rights.
([cl. at 260 (footnote omitted).) No such " specific and explicit provisions" are applicable to the present request.
The Federal judiciary has also recognized certain limited exceptions to.the general rule that each party should bear the costs of its own litigation; however,-the basis of this judi-
- cial power is "the original authority of the chancellor to do equity in a particular situation." (Sprague v. Ticonic National Bank, 307 U.S. 161, 166 (1939) (footnote omitted).) In the f
exercise of their equitable powers, courts may therefore award
,- ._~_. - , , _ , .-._, , . _ . , . . ~ . ___ _ _ . - - _ _ _ . . . _ . .
l litigation costs when the " equity" of the situation so demands.~*/
An administrative agency such as the NRC, on the other hand, has no general equitable power. It is the creature of its enabling statute and possesses only the powers granted expressly to it by Congress or included by necessary implication from the Congres-sional grant.~-**/
Its Application to Administrative Agencies The U.S. Court of Appeals for the D.C. Circuit has con-firmed that the "American Rule" is applicable to administrative agencies and proceedings. In Turner v. FCC, 514 F.2d 1354 (D.C. Cir. 1975), intervenors appealed from an order of the FCC denying their request that the licensee be ordered to re-imburse them for legal expenses incurred in prosecuting a peti-tion to deny the renewal of the licensee's operating license.
The court of appeals said:
We affirm the Commission's order. Congress, and not the Commission, can authorize an exception to the "American Rule" that litigants bear the expense of their litigation. The reasoning of the Supreme Court in Alyeska Pipe-line Co. v. Wilderness Society is fully applicable to litigation before the Federal Communications Commission. Congress has no more extended a
" roving commission" to the FCC than it has to the Judiciary "to allow counsel fees as costs
- / Itall v. Cole, 412 U.S. 1, 4-5 (1973).
- / See CAB v. Delta Air Lines, Inc., 367 U.S. 316 (1961).
4 or otherwise whenever the . . . [ Commission]
might deem them warranted." The Commission in its opinion noted that " Congress has not hesitated in other circumstances to authorize fee awards explicitly when it has determined such authorizations to be warranted."
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(Id. at 1356 (footnotes omitted).) In sum, before an agency.
may " order a litigant to bear his adversary's expenses . . .
it must be granted clear statutory power by Congress." Id.-*/
The same result was reached in Greene County Planning Board
- v. FPC, 455 F.2d 412 (2d Cir.), cert. denied, 409 U.S. 849 c
(1972). Intervenors sought to have the utility PASNY:or the i
FPC pay their expenses, intluding legal fees, incurred in challenging.FPC action on a license application. The FPC i
- / In an apparent deviation from-this principle, authority for the National Labor Relations Board to award attorney's fees and other litigation expenses to the " charging party" and to the Board itself has been found in the less-than-explicit Section 10 (c) of the National Labor Relations Act (29 U.S.C.
S 160 (c) (1970)). That provision authorizes the Board to require one who has engaged in an unfair labor practice "to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this subchapter . . . . Cases involving unfair labor practices are clearly distinguishable from cases in-volving applications for-Federally-required licenses. In i any event, the authority has been used to require payment of litigation expenses-by employers who burdened the processes of the Board and.the courts by raising " frivolous" (as opposed to " debatable") defenses to charges brought against them. Very recently, that standard appears to have been slightly relaxed. Even so, "[o]nly in cases of flagrant, aggravated, persistent and pervasive employer misconduct will the employer's meritless but arguably non-frivolous litigation justify an award of litigation and organization-expenses." J.P. Stevens & Co. v. NLRB, No. 80-1126, slip j op. at 21 (4th Cir.,'Jan. 8, 1982). I i
l
refused,-*/ first, on the ground that it had no authority to grant the motion and, later, on the basis that only a present grant was foreclosed. The court affirmed, stating:
[W]e find ourselves in agreement with the Commission's position that at this posture of the proceedings and under current circumstances, without a clearer congressional mandate we should not order the Commission or PASNY to pay the expenses and fees of petitioners, either as they are incurred or at the close of the proceedings.
(Ij} . at 4 2 6. ) In particular, the court rejected the argument that authority might be implied from a general rulemaking provision contained in the Federal Power Act.-~**/ The court could ft.nd
[N]o basis in the terms of the provision to extend the Commission's power to include paying or awarding the expenses or fees of intervenors.
, We would need a far clearer congressional man-date to afford the relief requested, especially in dealing with counsel fees, when Congress has not hesitated in other circumstances explicitly to provide for them when to do so was in the public interest.
- / Power Authority of the State of New' York, 46 FPC 1101, 1107 (1971).
, **/ The provision of Section 309 of the Federal Power Act (16 U.S.C. S 825h (1976)) empowered the FPC "to perform any and all acts and to prescribe, issue, make, amend, and rescind such orders, rules, and regulations as it may find necessary or appropriate to carry out the provisions of" the Federal Power Act. PCCI rely upon a similar provi-sion in the Atomic Energy Act, i.e., 42 U.S.C. S 2201(p)
(1976).
(Id.) Years later (and after the FPC's actions on the license had been affirmed), the court of appeals, sitting en banc, denied a petition to review that portion of the FPC order which denied intervenors' request for payment of litigation expenses,-*/
thus affirming the FPC's conclusion that it had no authority to grant such requests. (Greene County Planning Board v. FPC, 559 F.2d 1227, 1238 (2d Cir. 1977).)
Federal Rule 41(a)
PCCI note that 10 C.F.R. S 2.107 (a) states that Withdrawal of an application after the issuance of a notice of hearing shall be on such terms as the presiding offi-cor may prescribe.
This regulation is " based on and similar to Rule 41(a) of the Federal Rules of Civil Procedure . . . ." (Motion, p. 2.)
That Rule states in part that dismissal of an action shall be made "upon such terms and conlitions as the court deems proper."
Since there are cases in which Federal courts have conditioned dismissal upon plaintiff's payment of expenses and fees, PCCI contend that the NRC must have authority to do the same. The argument ignores the fact that the authority of a court to impose such conditions derives from its equity jurisdiction--
- / In the Greene County litigation, as in the instant pro-ceeding, intervenors sought reimbursement for both legal fees and other costs of litigation. Both were denied on the same grounds.
l
which the NRC, an administrative agency created by Congress, does not have.
Under FRCP 41 (a) (2) , " Allowing thu court to attach condi-tions to the order of dismissal prevents defendants from being unfairly affected by such dismissal." (LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 (5th Cir. 1976).) Specifically, this
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rule is designed "to compensate the defendant for expenses in preparing for trial in the light of the fact that a new action may be brought in another forum." (Smoot v. Fox, 353 F.2d 830 833 (6th Cir. 1965).)
It is clear that Rule 41 (a) (2) can provide a mechanism for achieving equity with respect to defendants against whom actions have been brought, who have been forced to pay for legal representation, and who face the prospect of having to do so again as the plaintiff withdraws his claim and then re-institutes the lawsuit. Requiring the plaintiff to pay the defendant's expenses and legal fees under such circumstances provides an equitable means of protecting the defendant against this unnecessary expense while allowing plaintiff to retain the right to bring a later suit on the same cause of action. However, the requirement to pay expenses and fees in the event of a dis-missal is not automatic. The type of relief--if any--afforded the defendant when a claim is dismissed under FRCP 41 (a) (2) is left to the discretion of the court, and no " terms and condi-
tions" will be imposed in the absence of a showing as to their propriety. (5 Moore's Federal Practice, H 41.06, at 41-86 (2d ed. 1981).)
Use of Rule 41(a)'(2) to impose attorney's fees is, in effect, an exception to the "American Rule" that each party to a lawsuit must bear its own legal expenses. It can be so used by courts only in unusual circumstances. (International video '
Corp. v. Ampex Corp., 484 F.2d 634, 637 (9th Cir. 1973).)
Courts look' at the facts to see whether the " suit was brought to harass, embarrass or abuse either the named defendants or the civil process" or whether "the plaintiff deliberately sought to increase the defendants' costs by unduly protracting the litigation." (Blackburn v. City of Columbus, Ohio, 60 F.R.D. 197,
)
198 (S.D. Ohio, 1973).). In Nazzaro v. Weiner, 38 F.R.D. 430' (D.N.J. 1965), aff'd, 353 F.2d 537 (3d Cir. 1965), cited by PCCI,~*/ partial attorncy's fees were awarded to defendant because the court found that the plaintiff had been deliberately unrespon- >
sive to defendant's discovery efforts, thereby increasing the latter's legal costs. (Iji. at 433-434.) Absent the showing of those exceptional circumstances,-a court will not~ require payment of those fees and expenses in connection with a dismissal.
- / In another case cited by PCCI, Smoot v. Fox, 353 F.2d 830 (6th Cir. 1965), cert. denied, 384 U.S. 909 (1966),
the court of appeals prohibited the district court from awarding attorney's fees and expenses on the grounds that there is no authority for such an award in an action at law and that- FRCP' 41(a) (2) permits such an award only in the . event of dismissal withouu prejudice.
No Factual Justification for Assessing Fees and Expenses Thus, in our view, even if Rule 41(a) (2) and the line of cases discussed above had been adopted by the Commission (and
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they have not been so adopted), this would not.be an appropriate-case for assessment of fees and expenses. PCCI's role in this proceeding is not analogous to that of a defendant who has been
-compelled by process of law to participate in a' lawsuit and to pay for his defense. NIPSCO is not responsible for PCCI's being-a-party tcr this proceeding. On the contrary, PCCI volunteered and chose to intervene and, subsequently, to remain a party to the Bailly proceeding. The equities of this situation are therefore completely different from those the Federal rule and cases were designed to alleviate.
Furthermore, PCCI have f ailed to demonstrate 'bnusual circum-stances" or'any of the equitable factors necessary to support such an award. For example, the Bailly licensing proceedings were not brought in bad faith or to harass PCCI, and there'is no evidence that NIPSCO attempted.to increase PCCI's expenses by unduly protracting the litigation.
In North Coast, the Appeal Board-left open the question of whether payment of an intervenors' expenses might be appropriate where "the expenses incurred were substantial and intervenors.
developed information which cast doubt upon the merits of the application." The Appeal Board did not identify the legal bases for any belief that such circumstances might support a require-
1 ment to pay-an intervenor's expenses in an NRC proceeding; 1
and the foregoing discussion shows that the NRC.is not authorized
- to require such payment. In any event, PCCI have not demonstrated that the cited circumstances exist and, certainly, the naked
- assertions of counsel set out at pages 2-3 of the Motion cannot suffice to raise a serious question. Obviously, NIPSCO has no
' basis upon which to dispute or confirm the unspecified amount of expenses incurred by PCCI. We do deny PCCI's frivolous statement that the record makes clear that the litigative
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- efforts and information developed by PCCI therein cast serious doubt upon the merits of the applications" (Motion, p. 4) ;
i the proceedings--had not come to hearing and PCCI had yet to present any information to the NRC.
" ~
The rationale for conditioning a voluntary' dismissal without ,
prejudice upon payment of defendants' costs and expenses is to
' prevent defendants from being unfairly affected by such dismissal.'"
1 (Yoffe v. Keller Industries, Inc., 582 F.2d 982, 984 -(Sth Cir.
! 1978), quoting LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604 l (5th Cir. 1976).) Since the end results here--expiration of
! the Bailly. construction permit and, termination of this proceeding--
i
! are synonomous with the result sought to be achieved by PCCI's intervention, there can be no claim that they are unfairly affected
, by the termination or have been " forced" to incur expenses to no i:
! end. Moreover, it bears emphasis that a major equity consideration prompting'a requirement for " plaintiff" to pay fees and expenses J
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is.the possibility that " defendant" will be forced to pay again-for legal representation in a duplicate action by the same 4
plaintiff.. That could not occur here since no application to extend the latest date for completion of construction of Bailly can again be made.
PCCI's argument that its position warrants the award of 4
expenses and attorney's fees under a regulatory provision which has never before been so interpreted by the Commission is untenable.
Even as it recognized the parallel between Section 2.107 (a) and FRCP 41(a) (2) , the Appeal Board cautioned that Licensing Boards should not exercise' indiscriminately their power to impose terms and conditions upon the withdrawal of an application:
The terms prescribed at the time of withdrawal must bear a rational relationship to the conduct and legal harm at which they are aimed. 'And, i of course, the record must support any findings
- concerning the conduct and. harm in question.
See [LeCompte v. Mr. Chip, Inc., 528 F.2d 601, 604-05 (5th Cir. 1976)].
i (Philadelphia Electric Co. (Fulton Generating Station), ALAB-657, slip op. at 9, (November 17, 1981).)
If. the Commission believed that it has the authority to -
require payments of intervenors' expenses, surely it would have done so in a regulation much more explicit than Section 2.107(a) 4 and, in view of the virtually unprecedented nature of such a requirement in administrative jurisprudence, it would have l
~
provided specific guidance to licensing boards in making such
{ decisions.
I
l
(
Moreover, it is a well-recognized tenet of-NRC practice that, while adjudicatory. boards may be guided by;the rules.and practiceslof the federal courts, " judicial procedures should not be imported into the administrative arena uncritically . . . .
(Consumers Power Co. (Midland Plant),.ALAB-379, 5 NRC 565, 568 (1977).) Rather, there must first be a. careful inquiry into whether or not the situations are truly similar. In this case, such inquiry shows that they are not.
Conclusion We urge the Board to deny promptly PCCI's present-Motion
- for the reasons above stated. We respectfully remind the Board.
that it has been almost five months since NIPSCO requested termination of this proceeding; we again urge the Board ltoJgrant l that request.
i Respectfully submitted,
- . EICIlllORN , EICIlllORN & LINK 5243 Ilohman Avenue llammond , Indiana 46320 By
- _ William 11._ _ _ . .Eichhorn Attorneys for Northern Indiana Public Service Company LOWENSTEIN, NEWMAN, REIS
& : AXELRAD 1025 Connecticut Avenue, N.W.
Washington, D.C. 20036 i
~; . . -. - -
UNITED STATES OF AMERICA [f" NUCLEAR REGULATORY COMMISSION 1 '82 Jm 27 3;33 BEFORE-THE ATOMIC SAFETY AND LICENSING BOAR 5
-In the Matter'of ) Docket No.g h50g[h (pfni
/ UV ' ,
)
NORTHERN INDIANA PUBLIC ) (Construction' Permit Extension)
~
SERVICE COMPANY )
I )
(Bailly Generating Station, ) January 25, 1982 Nuclear-1) )
CERTIFICATE OF SERVICE I hereby certify that copies of. Northern Indiana Public Service Company's Response in Opposition to Porter. County-Chapter Intervonors' " Motion for an Order Imposing a Condition Upon Withdrawal of NIPSCO's Applications" dated January 25,.1982, 4
were served on the following by. deposit in the United. States ,
i mail, postage prepaid, on this 25th day of January, 1982:
Herbert Grossman, Esquire, Chairman Administrative Judge U.S.. Nuclear Regulatory Commission Washington, D.C. 20555 Dr. Robert L~. Holton Administrative Judge School of Oceanography Oregon State University Corvallis, Oregon 97331-Dr. J. Venn Leeds Administrative Judge 10807 Atwell Houston, Texas 77096
[ Docketing and Service Section Office of the Secretary i U.S. Nuclear Regulatory Commission ,
l Washington, D.C. 20555 i Howard K. Shapar, Esquire Executive Legal Director U.S. Nuclear Regulatory, Commission Washington, D.C. 20555 i
i h
g
,,-~
Stephen H. Lewis, Esquire Office of the Executive Legal Director U.S. Nuclear Regulatory Commission Washin gton, D.C. 20555 Susan Sekuler, Esquire Environmental Control Division 188 West Randolph Street Suite 2315 Chicago, Illinois 60601 Robert J. Vollen,. Esquire c/o BPI 109 North Dearborn Street Suite 1300 Chicago, Illinois 60602 Edward W..Osann, Jr., Esquire One IBM Plaza Suite 4600 Chicago, Illinois 60611 Robert L. Graham, Esquire One IBM Plaza 44th Floor
- Chicago, Illinois 60611 Mr. Mike Olszanski Mr. Clifford Mezo United Steelworkers of America Local 1010 3703 Euclid Avenue East Chicago, Indiana 46312 Mr. George Grabowski Ms. Anna Grabowski 3820 Ridge Road liighland, Indiana 46322 WILLIAM'l COHORN Eichhorn, Eichhorn & Link 5243 Ilohman Avenue llammond , Indiana 46320 Attorneys for Northern Indiana Public Service Company