ML20045E218
| ML20045E218 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 02/11/1980 |
| From: | Malsch M NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | |
| Shared Package | |
| ML20038A409 | List:
|
| References | |
| FOIA-92-436 SECY-A-80-022, SECY-A-80-22, NUDOCS 9307010260 | |
| Download: ML20045E218 (28) | |
Text
UMTED STATES NUCLEAR REGULATORY COMMISSION p
February 11, 1980 ADJUDICATORY ITEM SECY-A-80-22_
COMMISSIONER ACTION l
1 For:
The Commissioners From:
, Martin G. Malsch Deputy General Counsel
Subject:
REVIEW OF ALAB-575 (ANTITRUST PROCEEDING) i Facility:
South Texas, Comanche Peak Purcose:
To inform the Commission of a recent Appeal f
Board decision of which review has not been sought, {~and which in ny view g g Review Tine Expires:
February 27, 1980 (as extended)
Discussion:
In ALA3-575 ( Attachment i f the Appeal Board
"~~
granted a directed certi,ficatio,n' f~rois the' ' '
g Licensing Board ' and? summar'ily'_af firmed - the Licensing Board's-decision on-the' merits.-
'=~
Since the Appeal Board decision does not
.S e address the merits, we attach the Licensing f[ E, l Board decision also ( Attachment 2).
.- F fi '$ i The Licensing Board was f aced with the application ihI l of the legal doctrines of "res judicata" and iA k;
" collateral estoppel" 1/ to this antitrust proceeding.
Th e issue was raised in motions g3 y/
- 6g filed by two of the applicants, Houston
- y Q[
Lighting and Power Company (HL&P) and Texas S tj $
Otilities Generating Company (TUGCO), seeking i; 5 E.
partial or full summary dispositions in their li N : 5
.5.G # 2 4
1/
Without going into unnecessary detail, these related l
doctrines have the common purpose of preventing re-
~"~
litigation of cases and issues already decided.
see the Licensing Board decision on 2-8 for further discussion.
tact:
William Shields, OGC 4
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The Commissioners 2
favor based upon a recent Federal district court decision 2/. In that case the district court found that these two applicants had not engaged in conduct violating Section 1 of the.
Sherman Act 3/ as to certain intervenors in the NRC antitrust proceeding, viz. Central Power and Light Company (CP&L) and West Texas Utility Company (WTU).
For reasons explained at some length, the Licensing Board found th a t, based upon previous NRC decisions applying these doctrines, HL&P and TUGCO were. not entitled to summary dispositions 4/.
The Board also refused to terminate or sharply limit the scope of the NRC antitrust proceeding. 5/
Neither HP&L nor TUGCO have sought Commission review of the Ap al Board 's sun firmance.
Our review k~dy Rf5ltN ~.h.,;,,
C
b I l0 v._
D We therefore recommend that
- 8. ')-
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4 4
Martin G. Malsch Deputy General Counsel 2/
West Texas Utilities v. Texas Electric Service Company, 470 F.Supp. 798 (N.D. Texas 1979).
3_/
The Sherman Act declares illegal " [E]very contract, combination
...or conspiracy, in restraint of trade or commerce...".
Among others, price-fixing, resale price naintenance, territorial allocations (horizontal), group boycotts, refusals to deal, and tying arrangements are violations of the Sherman Act, 4/
'Ihe Board found: (1) issues and legal standards for the two proceedings were not identical, (2) collateral estoppel would apply only as to some parties and not as to others, (3) the common issues alleged were not essential to the district court judgment, and (4) exceptions based on public policy did not j
apply in this case.
j 5_/
Applicants made several arguments in this regard based upon f
the Public Utility Regulatory Policies Act of 1978, an order issued by the Texas Public Utility Commission, and an injunction l issued by the Federal district court.
The Board found these l
l 3
Comissioners' coments should be provided directly to the Office of the Secretary by c.o.b. Monday, February 25, 1980.,
i i
Comission Staff Office coments, if any, should be submitted to the Commissioners NLT February 19, 1980, with an information copy to the Office of. the Secretary.
If the paper is of such a nature that it requires additional time for analytical review and comment, the Comissioners and the Secretariat should be apprised of when comments may be expected.
DISTRIBUTION Commissioners Comission Staff Offices Secretariat r
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UNITED STATES OF AMERICA NUCLEAR RIGULATORY COMMISSION ge
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.e ATOMIC SAFETY AND LICENSING APPEAL BOARD
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$$$9 h' Alan S. Rosenthal, Chairman OM ES#'
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Thomas S. Moore f
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In the Matter of
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HOUSTON LIGHTIN - & FOWER COMPANY,
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Docket Nos. 50-498A
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50-499A
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)
(South Texas Project, Units 1 and 2) )
)
TEXAS UTILITIES GENEFATING CO.FANY
)
Docket Nos. 50-445A
)
50-446A et _al.
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(Comanche Peak Steam Electric
)
Station, Units 1 and 2)
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Messrs. E. W. Barnett, Houston, Texas, and J.
A. Bouknight, Jr., Washington, D.
C.,
for the. Houston Lighting _and Power Company.
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r Messrs. Joseph B. Knotts,.Jr._,.and C. Dennis Ahearn, Washington, De C.,
for the Texas Utilities Generating Company.
Kessrs. Michael I. Miller and David M. Stahl Gibbs, Chicago, Illinois, and Ms. Martha E.
for the Central Power and Light Company and
~
the Central and South West Corporation, et al.
for Mr. Marc R. Poirier, Washington, D. C.,
the P.ublic Utilities Board of the City of Brownsville, Texas.
Ms. Susan Braden Cyphert, Mr. Frederick H.
Parmenter, Ms. Nancy Lucue and Mr. David A.
Dopsovic, for the United States Department
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of Justice.
Chanania and Ms. Ann Hodqdon Mr. Frederic D.
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~ for the Nuclear Regulatory Commission staff.
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a.
9 MEMORANDUM AND ORDER t
January 14, 1980' (ALAB-575)
The Houston Lighting an'd Power Company' (Houston), sup-ported by the Texas Utilities Generating Company (TUGCO), has petitioned us to undertake an interlocutory review (by way of directed certification 1/) of the Licensing Board's' October 5, 1979 order. in these two. antitrust _ proceedings; LBP-79-27, 10 NRC In that order, the. Board denied motions filed by Houston and TUGCO seeking certain specified relief.
The mo-tiens were founded on the theory that other parties to the -
proceedings, Central Power and Light Company and its privies, are precluded by-the doctrines ~of res judi'ca~ta',and collateral.
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estoppel from now relitigating 'issuWs said~ to have' beenTre
- i scived against Central in West Texas ' Utilities v. Texas Electric Service Co., 470 F. Supp. 798 (N.D. Tex. 1979),
acceal rending, No. 79-2677 (5th Cir.).
For the reasons
]
stated in its opinion, the Board found neither doctrine to be applicable in,the circumstances of this case.
l 1/
See l'0 CFR 2. 718 (i) ; Public Service Co. of New Hampshire _
(Seabrook. Station', Units 1 and 2), ALAB-271, 1 NRC 478
~~
(1975).
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3-Based upon a full consideration of.the papers before i
us
/, we (1) grant directed certification; and (2) affirm summarily on the opinion below.-3/
It is so ORDERID.
FOR THE APPEAL BOARD
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Je(. Eishop.
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SecretMry to the Appeal Board All of the parties briefed not merely the question of 2/
whether interlocutory appellate review was warranted
~~
but, as well, the merits of the controversy.
See our unpublished orders of November 13 and December 18,
)
E 1979.
^
Although the Houston petition did not raise the point,
_3/
the TUGCO response asserted that the Licensing Board f' ailed to apply properly the summary disposition pro-l 10 CTR visions in the Commission's Rules of Practice, We regard that assertion as beine so insub-2.749.
stantial as to require no extended discu5sion.
It suf fices to note that, the Board having decided (and, as we have determined, correctly) the res judicata and l
collateral estoppel questions against TUGCO and Houston,
.there was no possible basis for awarding summary dis--
.i position to either of those parties.
In these circum-that stances, there is nothing to commend the argument Central was required to do more than it had done to counter TUGCO's statement of assertedly undisputed f acts -- which consisted of nothine more than a recita-tion of the district court findings and was accompanied by no independent support for the "f acts" contained therein.
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h LNITED STATES OF # ERICA g
4 NUCLEAR REGULATORY C2FlSSICd
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T In the Matter of
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HOUSTON LIGHTI'G AND PCf.ER C2CEiY, et al. )
)
Docket Nos. 50-498A i
(South Texas Project,
)
50-499A Units 1 and 2)
)
t
)
EXAS UiILITES GESERATING C2PANY, et al. )
)
Ibcke" Nos~ 50-445A (Ccx:anche Peak Steas Electric Station,
)
50-446A thits 1 and 2)
)
ORDER REGARDING IMICNS EA53_s t?DN DECISION OF LNITED STES DISTRICT COU;C (October 5, 19M)
On April 3,1979, Houston Lighting and Pc7. er Cccpany O{1AP) and Texas Utilities Generating Cocpany, el al. (TLGCD), filed separate rotions for partial or full strr.a_7 disposition of these two antitrust proceedings. These notions were essentially based upon the decision of the United States District Court in West Texas Utilities v. ie$is Electric ServEcd Comany, Ncif'CA 3-76;0633-Y ~~ ~ ~'
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(N. D. Tex. ).
In that Federal coct decision, h E and the Texas Electric Service Comany (ESCD) were fo=d net to have engaged i. concerted action against Central Power and Light Company (CF!Z ) and West Texas Utility Cccoany (kTU) in violation of Section 1 of the Shenan Act (15 U.S.C. 51).
MAP filed a cotion for strrary decision, ccntending (1) that collateral estoppel should be applied against CP&L (althcegh not against the Departa_nt of Justice, NRC Staff, Brcronsville, or South Texas Electric Cooperative (STEC) or Medina Electric Cooperative (MEC)) and (2) that BAP should be diessed frczn the entire proceeding.
/
/d c7. C a.mne
]
I nGC0 filed two notions.
In the Sotch Texas proceeding, it roved to bar -
CPE from seeking to obtain any relief inconsistent with the District Court decision, and for strrary disposition in RCCO's favor.
In the Ccoanche Peak proceeding, nGC0 noved to dismiss Central and South West Cooperative (CSW) as a party intenenor or, in the alternative, for strrary disposition, and for steps tcuard termination of the proceeding.
Tne City of Austin (Austin) filed its brief on the question of collateral estoppel to dispose of or lin:it the instr.: antitrust proceeding, e.ich in effect sought to asscciate Austin with the relief requested by IPJE and TWCO.
Responses in opposition to these notions were filed by the Department of Justice (Departrent), the Staff, the Public Utilities Board of the City of Bromsville, Texas (Eromsville), CPE and CSW, and TD:-1A Electric Cocperative (TE(-IA).
Aiprents of counsel were heard at a conference held on June 1,1979 (Tr. 217-321).
By cur Order entered oS June 25,1979, the ' p'arties'vefe' Advised ' "
that these retier.s were denied, and that a dispositive order would be issued at a later date. Tne following epinica and decision constitutes that dispositive crder '
I.
EES JL'DIC/CA /SD CO'.lAT:.?AL ESTOFr L A.
legal Princioles Tne r.ajor thrust of the instant notions is the termination or severe lir.ita-tion of the scope of this proceeding as a result of the decision rendered in the U. S. District Court case, under the doctrines of res judicata or collateral estoppel.
Although cocparable in rany respects, these related doctrines also have significant differences. Tne Suprece Court has thas described these principles :
m
..w,
"Under the doctrine of res judicata, a judpent on the rerits in a prior suit bars a second suit involving the sare parties or their privies based on the same cause of. action.
Under the doc-trine of collateral estoppel, on the other hand, the second action is upon a different cause of action and the j"5t in the prior suit precludes relitigation of issues acraally litigated and necessary to the outecce of the first action.
1B, J. Moore, Federal Practice 10.405[1], at 622-624 (2d ed.1974) ; e.g., Izalor v. National Screen Serv. Com.,
349 U.S. 322, 326 (1955) ; Cxndssicner v. Sunnen, 33 U.S.
591, 597 (1948);lCrone11 v. countv of Sac., 94 U.S. 351, 352-353 (1576)." /
Tne corts have funher refined the concent of collateral estoppel to require at least four ele ents which rust all be present before the doctrine can be given effect as to a prior action.
These four eierents are (1) the issue sought to be precluded rust be the sa e as that involved in the prior acticn; (2) that issue rust have been actually litigated; (3) it rust have been dete=ined by a valid and final judpent; and (4) the determination cust have been essential to.the prior judpent.2f Tn'e party p1'ea' ding co11' ate?al~est6p7sThas-~thh b6: den of prcving that all the requirments of the doctr.ne are present.3_,/
~~
d Tne Appeal Board, afte-an extensive review of judicial aut'Trities consid-edng res judicata and collateral estoppel, has held that in appropriate circtestances the doctrines may be given effect in NTC licensing proceedings.
- / arklane Hosierv, Inc. v. Shore, U.S.
99 S. Ct. 645, SSL. Ed. 2d P
552, 559, fn. 5. (1979).
2/
- Haire v. Hanover Ins. Co., 536 F. 2d 576, 579 (3d Cir.,1976); Gulf 011 Corp. v.
FPC, 563 F.2d 538, 602 (3d Cir.,1977); 13 > bore's Federal Practice 50.443[1]
et seq.
3_/13 Moore suora, 10.40S[1], at 954.
]
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'Ihus, in Alaba a Pcreer Ccroany (Joseph M. Farley Nuclear Plant, Units 1 and 2),
ALAB-182, 7 EC 210 (1974), reranded on other grounds, CLI 74-12, 7 EC 203 (1974), the doctrines precluded a participant in the litigation of an issue decided in the construction pe=it prc ceeding, frca raising the identical issue in an operating license proceeding involving the sare reactor. Hoaever, it w.s expressly pointed out in that case that there'kas no claim of either (1) signifi-cant supervenirs developents havire a possible caterial bearing upon any of the issues previously adjudicated in the ccnstruction pe=it proceeding or (2) the presence of scce unusual f actor having special public interest implications (7 EC at 216)." Tne Appeal Soard observed that exceptions to the application of res judicata and collateral estoppel,.hich are found in the judicial setting are equally applicable to atinistrative adjudication, such as co:peting public policy considerations involved in Sri 1ker v. Hankin,188 F.2d 35, 37-6 (D.C. Cir.
1951) or Tipler v. E. I. da Pont ;deNe2 curs and Co.3_443_ E.2d 125,128 (6th.Cir.
- -~
~ ~
1971). On this score -it was noted that " Professor Davis has suggested a particular need for clothing an a&5istrative agency with the discretion to decline to inmke these doctrines in the ccurse of ' feeling its way into an undeveloped frontier of lae and policy,' 2 Davis, Aidnistrative Ize Treatise,
- p. 566" (7 EC at 215).
The Cc cissioners reviceed the foregoing Alabara Pcreer Cccpany case and readed it for further developent of facts as folloes "The principal focus of both the Licensing Board and Appeal Board in the current proceedings was whether the instant petition involved an atte pt to relitigate precisely the sa:e contentions j
as those resolved in the construction pe=it proceedings; and, if so, shether the doctrines of res judicata and collateral estoppel should apply. Tnis is the first case in W'ch we have i
1
- 1 taken a close look at the applicability of these doctrines to our proceedings.
In our view, an operating license proceeding shotild not be utilized to rehash issues already ventilated and resolved at the construction per=it stage. Accordingly, we are in full agreement with the conclusion reached by the Appeal Board that
'res judicata and collateral estoppel shauld not be entirely ruled out of our proceedings, but rather applied with a sensitive regard for any stpported assertion of changed circunstances or the possible existence of some special public interest factors, in the particular case.... '
Dae regard for these considerations convinces us that a renand to the Licensing Board, established to rule on intervention petitions, is necessary in the circu:n-stances of this case. Upon such recand, petitioner shall be afforded an opportunity to rake a particularized showing of such changed circ = stances or public interest factors as right exist with respect to this particular proceeding."i/
in one of the Seabrook decisions, it was ccntended that the Appeal Board's refusal to grant a stay of the effect of the initial decision in an earlier phase of the proceeding was res judicata on a later stay ration. Tne so-called-doctrines of repose were held precluded from operation because the issues involved in the two proceedings, " irreparable-injury't o di enirironmentNersh's~#
t
_ ;_ - _n :e = =_. :. v any "signi.ficant adverse inpact" upon the enviroment, were deened to be~~
l dissidlar, and also because res judicata does ret apply when the parf seeking it had the benefit, when he obtained the prior ralire of a mere faverable standard with respect to burden of proof than is later available to hira.E#
In Tne Toledo Edison Carpany (Davis-Besse Naclear Powr Station, Units 1, 2 and 3), A1AB-376, 5 lac 557 (1977), the City of Cleveland sought to preclude a certain law fir frc: representing one of the Applicants in an NRC antitrust proceeding, because of the firm's prior representation of the city in connection with nunicipal bond ratters. The law firm roved to dismiss the disqualification j
S abana Power Co:pany (Farley Units 1 and 2), CLI-74-12, 7 AEC 203-204 (1974).
Al E ublic Service Ccepany of New Ha oshire (Seabrook Station, Units 1 and 2), AIAB-P 349, 4 tac 235, 246, vacated on other grounds, CLI-76-17, 4 IEC 451 (1976).
1
proceeding on the grounds of collateral estoppel, based upon a federal district court decision which rejected the city's effort to disqualify the see law fira fro:n representirs the see electric utility in a pending civil antitrust proceed-ing in that court. The Appeal Mard sustained the application of collateral.
estoppel, holding that "as a general matter, a judicial decision is entitled to precisely the sa e collateral estoppel effect in a later ad:ninistrative proceed-ir; as it smid be accorded in a subsequent judicial proceeding" (5 tac at 561).
Tne cocron issue in the twa proceedings was 5 ether the Ccde of Professional Respc.sibility interdicted the law firm's representation of the public utility.
It was held to be irrelevant that the lac Sta#f and the Deparc ent of Justice were parties to the lac antitrust proceeding, but not to the district court proceeding.
Tne Staff, but not the Departrent, involved itself in the disquali-fication ratter.
Tne Appeal Board also stated:
"It is quite true test ; % Sed 'the le. -l.:..- -.-..-...._-...gis ative' intent is to vest
""~'""t prirary power to rake particular det~erminations coficerning a subject ratter in a particular agency, a court's decision concerning that subject ratter ray be without binding effect uoen that agency,' 2 Davis, suora, 518.12 at pp. 627-28.
cf. thited States v. Padio Corocration of A erica, 355 U.S.
3 %, 3 0 -52 (1959). We agree, hcuever, w tn the rajority cf the special Mard Crl-76/11 at 566) that that principle does not ccre into play in this case.... We discern no legislative purpose that this Coccission resolve such an issue independently of a court's resolution of the sane issue in an antitrust proceedire before it involving the sane pa.ies."
(5 hT<C at 561)
Tne Appeal Mard also rejected the Staff's position regarding discreticrary application of collateral estoppel, stating "nothing said by us in Farlev suggests that, absent overriding ecmpeting public policy considerations (and here none has been shom), an ad:ninistrative agency is free to withhold the application of collateral estoppel as a discretionary ratter."
(5 tac at 563-6/,
fn. 7) j
4.
The effect of a state court decision interpreting certain provisions of an operating license regarding required govermental approvals, was considered by the Appeal Board in Consolidated Edison Cocoanv of New York, Inc. (Indian Point Station, Unit No. 2), ALAB-399, 5 NPI 1156 (1977).
The licensing teard bad described the cou-t's ruling as "smee.at" the law of the case.
In reversing, it was stated that "[t]here is no collateral estoppel because the Caanission Staff was not a party to the New York litigation."
(5 NRC at 1167).
It was held that even if the parties had been identical, the Comission would not be bound by a court decision in a collateral litigation. Tne Appeal Board further stated:
"In discussing the problaa of conflicting decisions on the same cuestion by aininistrative agencies and courts, Professor Jaffe says:
'In cases where an order is directed to future relation-ships, the decision of that agenev shich has the rajor and continuing responsibility should ' revail. '
L. Jaffee, Judicial-p Control of Adninistrative Action 135 (1965).
In the case at
- ar, tnat woulc rean that tnis Cam
- ission would have the_prirary responsibility (5 NRC at 1168, fn. 44).for interoreting the terms of the licen it issued."
... u; _.
~
- he rost rece.: discussion of the principles of collateral estoppel appears in the antitrast decision on the merits in 'Ine Toled: Edison Cora.v (Davis-Besse Naclear Pcrar Station, Units 1, 2 and 3), AI.AE-560.10 !aC (Septe ber 6,1979).
In that case, it was contended that a decisio. of the Federal Pcwer Cor.ission favorable to an applicant on the issue of anticon:petitive practices, stould have been treated r.s a collateral estoppel.
Finding that the standard elch governed the FPC's decision on whether to order an !,nterconnection was differe,t frco NRC's duty under Section 105c of the Atonic Energy Act, tre Appeal Board said:
'Were the legal standards of tw statutes are significantly different, the decision of an issue under one statute does not give rise to collateral estoppel in a litigation of a sir:ilar issue under a different statute.
See thited Shoe
_g.
Machinerv Coro. v. thited States, 258 U.S. 451 (1922); In re Yarn Processing Patent Validitv Litiratica, 498 F. 2d 271, 278-279 (5th Cir.1974); Ticler v. E. I. duPont del;ercurs & Co.,
443 F. 2d 125,128-29 (6th Cir.1971); Facific Seafarers, Inc.
- v. Pacific Far East Line, 404 F. 2d 8(M (D. C. Cir.1965), cert.
denied, 393, U.S.1093 (1969)."
(Slip opinion, p. 209)
It also appeared that the Intervenor City obtained the prim 7 relief it scraght frce the FPC, and that if the findings on anticxpetitive conduct had gone the other way, it would not have made any difference in the relief granted.
It was therefcre stated:
'Tnus, the findings were not necessa y to the Federal Pcwr Ccccds-sion's decision and therefore do not ccustitute collate al estcpoel in later litigation. Norton v. Larnev, 266 U.S. 511, 517 (1925); Haize v. Hanover Ins. Co., 536 F. 2d 576 (3rd Cir.1976);_
ini;ard v. Board of Education of City of Nea York, 502 F.2d 631, 637 (2d Cir.1974) ; Eastern Foundation Co. v. C eswell, 475 F. 2d 351 (D.C. Cir.1973); Fi'creboard Pacer Pmducts Com. v. East Bay Union of Machinists, local 1304, 344 F. 2d 300, 306-07 (9th Cir.),
cert. denied, 362 U.S. 626 (1965); Restaterent (Second) of Judg-ments 568, Corrent h (Tent. Draft No.1,1973)."
(Slip opinion, pp.
210-11)
~~
__._7,__...
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B.
Identity of Issues and Standards In applying the foregoing legal principles, consideratica nust be given to the emparability of the issues involved in the tw proceedings sen the appli-cation of res judicata or collateral estoppel is invoked.
Issues are not identi-cal if the second action involves the application of a different legal standard, even though the factual setting of both proceedings may be the sare.b Tnus the sare historical facts may be involved in two actions, but the legal sig-d.fican:e of the facts may differ because different legal standards are applicable to then.U NPeterson v. Clark Leasing Corporation, 451 F. 2d 1291,1292 (9th Cir.1971);
13 Moore's Federal Practice 10.443[2].
7/ ames Talcott, Inc. v. Allahabad Bank, Ltd., 444 F.2d 451, 459, fn. 8 (5th Cir.
J 1971), cert. denied 404 U.S. 940 (1971).
s
_9 Here, the District Court suit involved a civil action for injunctive relief by CP6L based upon alleged concerted refusals to deal by HIA? and TESCO, in violation of Section 1 of the Shenan Act (15 U.S.C. $1). The plaintiffs clairned that the defendants violated the Sherran Act "by having unlawfully cachined, censpired or contracted between the:selves and with others" to preclude the interstate ficre of electricity (Pre-Trial Order, p.1). The final order in that case prohibits C?&L from pe=ittir6 electricity it receives from the South Texas Project to enter interstate cc:=erce "as long as CP6L remains a participant in the STP agreecent and as 1c.g as that agreecent rerains in force."
Tne instant proceeung involves a finding under $105c(5) sether the activities under the licerse wuld cre2te or reintain a situation inconsistent with the specified antit:ust laes (42 U.S.C. $2135(c)). Such an inquiry covers I
a broad range of activities considerably beyond the scope of the " violation','_
_ = _ =
standard of Section 1 of the Sheman Act.
It is well established that'in a Secton 105c proceeding, it is not necessary to show an actual violation of the antitrust less.S/ As the Joint Corrittee on Atomic Energy described it,
I*ne concept of certainty of contraventicn of the antitrust '.aws or the policies clearly underlying these laws is not intended to be i= licit in this standard; nor is the mere possibility of inecmsistency.
It is intended that the finding be based on reasa.able probability of contravention of the antitrust laws or the policies clearly underlying these 1res.
It is intended that, in effect, the Ccmnission will conclude 4 ether, in its judgrient, it is reasonably probable that the activities under the license would, den the license is issued or thereafter, be inconsistent with any of the antitrust Iras or the policies clearly under-lying these laws."
(Joint Cc:rittee Report at 14-15) bI
- Ccnstners Power Company (Midland Plant, Units 1 and 2), A1A3-452, 6 NRC 892, 908-912 (1977).
- 10'-
In Davis-Besse, suora, the Appeal Board noted that "Of course, any violation of the antitrust laws also mets the less rigorous standard of Section 105c of the Ato:nic Energy Act -- inconsistency with the antitrust laws" (Slip opinion at
- p. 207, fn. 277). It was also stated:
"If the hearing record deronstrates with ' reasonable probability' that an anticcupetitive situation within the mcming of section 105c would result frce the grant of an application, the Ca:cis-
.l sion my refuse to issue a license or issue one with remedial conditions. Findings of actual She=an or Clayton Act viola-ticms, hcuever, are not necessary. Under section 105c, proccncetitive license ccnditic s are also authorized to remedy situations inconsistent with the ' policies clearly underlying' the antitrust laws."
(Fcotnotes critted) (Slip opinion at p. 8)
The scope of Section 105c proceedings also includes consideration of 55 of the Federal Trade Corission Act, which permits prescription of unfair or deceptive business practices that infringe neither the letter nor the spirit of theShemanandC,1aytonActs.E The Appeal Board has described the sweep of
~w
....a.-
_ _ 3_:.~...
~
Section 105c antitrust review as follcr s:
"It is to be recalled that in Section 5 proceedings prccf of a full-b1cun violation of the She=en or Clavton Acts is not required; there need only be shun a 'cenflict with the basic policies of [those] Acts' (citirs FIC v. Srce Shoe _ Co._, 384 U.S. 316, 321 (1966); Atlantic Refini.c Co. v. FTC, 351 U.S.
357, 369-70 (1965); FIC v. Tey.aco, Inc., 392 U.S. 223 (1968);
L. G. Balfour Co. v. FTC, 442 F. 2d 1, 9 (7th Cir.1971)
~
because, as has been explained, 'the Federal Trade Corission Act was designed to suppleaent and bolster the Sheman Act and the Clayton Act...to stop in their incipiency acts and practices which, when full blown, would violate those Acts...as well as to condcnn as ' unfair athods of cccoetition' existing violaticns of them. ' FIC v. Erwn Shoe Co., 384 U.S. 316, 322 (1966), quoting FTC v. Fbtion Picture Adv. Co., 344 U.S. 392, 394-95 (1953).
Section 105c similarly applies to situations in conflict with the policies underlying the antitrust laws.
Like Section 5 of the FTC Act, Section 105c was also designed by Congress to ' nip in the bud any incipient antitrust situation,' albeit via the NRC prelicensing review process.
1 l
I E/FIC v. Sperry & Hutchinson Co., 405, U.S. 233, 239 (1972).
e
'Jalf Creek I, suora, AIA3-279,1 IGC at 572 (quoting the Joint Ccerittee Reoort, p. 14).
'Ihis sirilarity in purpose and standards leads us to agree with the staff that Section 5 precedents tsy be helpful guides to detencining dether a situation not violative of the antitrust laws is, nevertheless, inconsistent with their underlying policies."l_0_/
Tnere are substantial differences between the standards and issues inw1ved in the Shenan Act, Section 1 suit based on restraint of trade by concerted-action as alleged in the District Court litigation, sen contrasted with the issues involved in t.his proceeding arising fra: allegations of renopolization (She:can Act, Section 2), unf air trethods of ccupetition (TIC Act, Section 5), and inconsistency with tr.derlying policies of antitrust laws (Section 105c). Wnere, as here, the legal standards of tw statutes are significantly different, the decision of issues under one statute does not give rise to collateral estoppel 11 in the litigation of sin:ilar issues under a different statute.
/
Tne same rule applies to attempts to5vokeWd' dtrisf5f res judicata, sere the question is o
dether the second suit is based on the sare cause of action as that involved in the first suit.12/ The causes of action here, if that term is to be used, are significantly differe.: in the District Court suit and this Section 105c proceeding.
E/ Midland, supra, 6 NRC at 911-12.
11/
- Davis-Besse, suora, Slip opinion at p. 209. See United Shoe Machinery Corp.
- v. United States, 258 U.S. 451 (1922); In re Yarn Processing Patent Validity Litigation, 498 F. 2d 271, 278-79 (5th Cir.1974): Tipler v. E. I. duPont de Ne::ours & Co., 443 F. 2d 125,128-29 (6th Cir.1971); Pacific Scafarers, Inc.
- v. Pacific Far East Line, 404 F. 2d 8% (D. C. Cir.1968), cert. denied, 393 U. S.1093 (1969).
12/ ublic Service Ccc:cany of New Harashire (Seabrook Station, thits 1 and 2),
- P ATA3-349, 4 NP.C 235, 247 (1976); The Toledo Edison Ccccany (Davis-Besse Nuclear Pcwcr Station, Lhits 1, 2 and 3), A1A3-378, 5 NRC 557, 563 (1977).
m.
1 i j C.
Parties It would be a violation of due process for a judgmat to be binding on a litigant sto was not a party nor privy to the prior litigation, and who therefore never had an opportunity to be heard.13/ In recognition of this principle, HIAP has stated in its notion that no atte pt is being made to apply collateral estoppel against the Departrent of Justice, the Staff, Brownsville, or STFC/ME However, H112 also coves that as a matter of discretion, "this proceeding be dis.issed as to HEP for all purposes."15/
Tnere are strong public policy reasons why the Departmnt and the Staff, as statutory parties to this proceeding, should not be collaterally estopped or hindered in conducting the full antitrast review under Section 105c which they have sought.
Tne Cccrission has described the public interest implications of IGC antitrust review as follows:
-_=
==.
"Ihe NBC's role is, in our view,jsocething_more than a.. neutral.
fonzn for economic' disputes between private parties. One evidence we have of this flows frcxn the role of the Attorney General and the express requirement that his views be obtained.
If a hearing is convened, we think it should eneccpass all significant antitrust inplications of the license, not cerely the cacplaints of intervening private parties.
If no one else perfo:=s this function, NRC staff should assure that a corolete picture is presented to licensing boards."M/
EIParklane Hosierf, Inc. v. Shore, _ U.S. _, 99 S. Ct. 645, 653-58 L. Ed. 2d 552 (1979); Blonder-Tongue Laboratories, Inc. v. University of Illinois Fcrmdation, 402 U.S. 313, 329 (1971); Hansbe.rry v. Ime, 311 U.S. 32, 40 (1940).
I'Ihu ? Motion, p. 10, fn. 10.
S/
., p. 32 ; Reply of HL5cP, pp. 4-7, 20-27.
M 16_/- Flcrida Pcwer & Light Co. (St. Lucie Plant, Unit No. 2), CLI-78-12, 7 NRC 939, 949 (197S).
See also Scenic Hudson Prese:vation Conference v. F.P.C., 354 F. 2d 608, 62D-21 (2nd Cir.1965), cert. denied, 384 U.S. 941 (1966); tiichigan Consolidated Gas Co. v. F.P.C., 283 F.2d 204, 226 (D.C. Cir.1960), cert. denied 364 U.S. 913.
,,i
\\.
We agree with the Staff's position that a selective invocatien of collatra' estoppel to apply to CP6L and CSW would have cnly a procedural effect in this proceeding, because neither the Staff nor the Departrent was in privity with the parties in the District Court suit. Hence, either or both govern: ental parties could, and probably would, include in their presentaticn here a She:ran Act, Section 1 case against EL6? and TLUC0 (ktswer of Staff in Opposition to Fbtions,
- p. 6).
Other Intervenors such as Ertmsville are likedse not in privity with the parties in the court suit, and intend to assert a wide range of antirrat issues in this proceeding (Response of Eramsville, pp. 3-6).
Inasruch as there will be an antitrust evidentiary hearir.g in this proceedir.g covering a wide range of corplex issues a ens caltiple parties, we see no advantage in applying collateral estoppel or res judicata to HL&P alone.
On the contrary, a good ' deal of confusion 'a5d 'los~t tizfe would probably result frdFsi
'1"
~
~
=
effort to identify evidence %ich could be adnitted as to sore parties but not......
others.
The activities under the license of all of the licensees w-111 be analyced in scre detail to dete=ine she-her they will create or raintain a sircation inecasistent with the antitrast laws.
If the Departrent and the Staff are net collaterally estopped by the cotrt action, as we hold, they ray be assisted in presenting their evidence by having CP6L present an affi:r.ative case.
It is not unlikely that scre witnesses wuld be used in cccron.
Since there will be an evidentiary hearing in any event, there would be no "ccnsiderations of economy of judicial tire"17/ in applyi:g collateral estoppel, but rather rare tire wculd probably be expended in atterpting its selective application.
E laba:na Pcur Coc:pany (Joseph M. Farley Nuclear Plant, Units 1 and 2), AIAB-A 182, 7 AEC 210, 212 (1974).
9 14 -
D.
Issues Essential to Prior Ju+ ment One of the required elecents for applydrg collateral estoppel is that the dete=ination of the issues cade in the first action was necessarf and essential to the outecce of that prior action.18/ The District Court in effect found that the so-called intrastate-only policy allegedly followed by the defendants neither
" creates or raintains a situation inconsistent with the antitrust laws" (Section 105c), nor canstitutes "an tr. fair tuthod of cccpetition" (55, FTC Act).
Tne Cou:: had before it only one aspect of these proscriptions, that revolving around the issue of unreasonable restraint of trade under Section 1 of the Sherran Act.
Tnere were no allegations or issues concerning renopolization under 52 of the Sherran Act, or unfair cethods of ccx: petition under Section 5.
Tne Court's
" additional findi:q;s" regardi 6 Section SE/andSection105cEl were unnecessary and irraterial to the detemination of the Section 1, Shbrran Act cause of3E _ ~ '
action. Such findings riy' be regarded as dicta,-to-which collateral estoppel does not attach.21/
Cnly the Federal Trade Co rission is empxred te rd-te an initial finding sether a pra:tice is an infair rethod of competition under Section 5.
Tne Suprete Court has stated:
18/
- Parklane Hosiery, Inc. v. S'wre,
U.S. -, 99 S. Ct. 645, 55 L. Ed. 2d 552, 559, fn. 5 (1979) ; Alaba:ra Pcr.ar Ccc:cany, suora, 7 AEC at 213.
19/
- Conclusion of Iza #20.
20/
- Conclusion of Isa #22.
2,1_/ onsurer Product Saferv Cccrission v. Anaconda Co.,
F. 2d (D. C. Cir.,
C Jan. 31, 1979).
"A court cannot label a practice ' unfair trder Section 5.
It can
~
only affits or vacate an agency's judgment to that effect. '
'If an order is valid only as a determination of policy or judgment which the agency alone is authorired to rAe and stich it has not made, a judicial judgment cannot be rade to cb service for an administrat ve judgment. '
SEC v. Chenery Corp., 318 U.S. 80, 92 (1943)." l/
Sinilarly, only the NRC is empcraered to rAe the initial determination under Section 105c whether activities under the license would create or mintain a situation inconsistent with the antitrust, and if so what license conditicas should be required as a remedy.
Tne Ccccission has thus described the statutory policy regarding tac antitrust review:
"But other policies are also reflected in Section 105c, viz, that a goverment-developed, renopoly-like nuclear pow: electricity generation not be utilized in ways which centravene the policies contained in the various antitrust acts.
Section 105c is a mecFs nism to allow the smaller utilities, cr:icipals, and cooperatives access to the licensing,. process to pursue their interests:in the
~
~
3 event that larger utility applicants might use a goverment '
license to create or maintain an;anticccpetitive rarket position.'.'23/ 2 Since the IEC and not the ccrrt has been given the responsibility of rakir,;;
the "incensiste.t with" findings and possible lice.se conditions under Section 105c, the District Court findings in this regard tre not binding here.
It is ret necessary for us to decide stether the District Cort exceeded its jurisdic-tion in taking such findings, as argued by the Staff,24/ the Departar.,25/
Broansville,26/ and C?it and CSW.2 / It is sufficient to hold that the doctrines 97 of collateral estoppel and res judicata do not apply to them findings.
EFTC v. Sperry & Hutchinson Co., 405 U.S. 233, 249 (1972).
23/
- Florida ?craer & Light Co. (St. Lucie Plant, Unit No. 2), CL1-78-12, 7 IGC 939, 946 (1978).
24/
- Answer of the NRC Staff, pp. 5, 9.
E/ esponse by the Department of Justice, p. 26.
R 26/
- Response of the Public Utilities Board, po.10, 27.
. E.
Exceptions Based on Public Policv It has been recognized by both the Appeal Board and the Ccx:rission that exceptions to the application of res judicata and collateral estoppel which are found in the judicial setting, are equally present where ad-inistrative adjudica-tion is involved.
One such exception is the existence of broad public policy considerations or special public interest factors which would ou weigh the reasons underlyira the doctrines.28/ The u-dque natee of IRC antitrust review as linked to licensir; car.siderations, constirates su-h a special public interest factor in this context.
In South Texas, the Cocrission held that Congress intended that it should review antitrust allegations "pri.srily, if not exclusively, in the context of licensing..."2_2/
Although holdire that in the field of antitrust h'.RC's expertise is not unique and that it was not given broad antitmst policing pcr.ers independent r?
. 2 ~:. 2. =:=:.-
of licensing, its special role in this arsa wa.. -s thus de... scribed:
'Tnrough the licensirs process, we can effecraate the special concem of Co gress that anticoroetitive irfluences be identified and corrected in their incipien g.
No nuclear puer can be generated without an tac license and the licensing process thereby allcus us to act in a u-lque way to fashion re.edies, if we find that an aoplicant 's olans nav be in;oasistent with the antitrust laws or their underlyire policies."!.0/
Tnis unique functicn of the lac licensirs process also involves uking a i
judgrent or estirate as to the future, in considering what effect activities 28
- Alaba a Power Cccpany, supra, 7 AEC at 203-04, 213-16.
29/
- Houston Lighting & Pcuer Ccx pany, et al. (South Texas Project, LYit Nos.1 and 2), CLI-77-13, -5 NRC 1303,1316 (1977).
i i
30/
- Id., at 1316.
See also Davis-Besse, surra, slip opinion at p. 35.
]
i
17 -
under the license would have on the ccn:petitive situation. The regulatory scheme established by Congress in Section 105c proceedings was designed to "n.ip in the bud any incipient antitrust situation", albeit via the NRC licensing review pmcess.3_1/ As Professor Davis has observed, "when the legislative intent is to vest prirary pcuer to rake particular deteminations concerning a subject ratter in a particular agency, a court's decision conceming that subject ratter cay be withcut binding effect upon that agency."
(2 Davis, Ad'ainistrative Izs Treatise, 118.12 at 627-28 (1958))
Tne Appeal Lord has quoted with approval the above observation of Professor Davis, althcogh it was held not applicable to a claim by the City of Cleveland that a law finn which had fonrerly represented it in bond matters, should be precluded frca representing an opposing applicant in an NRC antitrust n
proceeding.:2j In that case, there was no discernible legislative purpose tFat
~ ri a 4.e.m tr;*.,,= w -
AM h,.
. cOlms - 3
~
NFC only should resolve such a coccon issue, involving the. co6struction of:the Code of Professional Responsibility as interdicting the law firm's representation ofanctherclient.E Tne facts in that case are cuite di.fferent fr:c the instant situation.
Tnat issue concerned a rather peripheral ratter stich did net essentially imolve the unique EC role in a Sectica 105: proceeding.
- here, i
the very nature of the NRC antitrust revice ard the significant responsiblities Scrne by the Depament and the Staff, evcke special public interest factors which preclude the application of collateral estoppel or res judicata.
31/
- Midland, suora, 6 KRC at 912.
See also Kansas Gas and Electric Co. (Wolf Creek Generating Station, Unit No.1). A1AE-279,1 NRC 559, 571-72 (1965).
32/
- The Toledo Edison Cccpany, suora at p. 5, 5 NRC at 561.
33/
- Id., at 562.
+
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a
II.
OrrIR ST).TLTES, CER FRCCEZDI GS Tne noving parties additionally argue that the enact:nent of PURPAb and its vesting of FGE with the pcuer to order steeling ard intercornection, eliminates the need for a Section 105c antitrust review involving allegations of anticcra-petitive conduct and regaests for interconnection and wheeling. Ecuever, the legislative history 35/ and the language of PURPA36/ clerly establish that it was not intended to divest NRC or any other antitrust tribunal of jurisdiction, nor to regaire de#erral of such ratters to FERC.
Dring Senate co. sideration of the Conference Report, Senator Meteenbaum, a tranager of the bill and a menber of the corference cccnittee, stated:
"It was not the intent of the conferees to rodify in any way the rights of parties in presenting and prosecuting allegations of anticacpetitive conduct before the Federal and State ccurts, or before administrative agencies, including the FERC and the Nuclear Regulatory Ccrmission Both havedssil'oli14adion5:tF5lx 6 EiCal i
consider antitrust issues. Wnere any of these agencies,
presently have the" authority to order trans:nission, coordination or other relief pursuant to a finding of anticcrpetitive' conduct, undue discrirdnation or unjust and u.reasorable rates, te:ms, conditions or the like, this authority wrx1d not be disturbed.
Tne act does not limit the present authori y cf these agencies in this regard.
'Trras, a party which has been denied wheeling se: vices for anti-cc:petitive reasons will not be hindered by this legislation frcm proceeding in the Federal courts or elsewhere. Likewise, the authority of the NRC in conducting an antitrust review under the provisions of the Atcmic Energy Act of 1954, as a rended, would not be affected by this extrenely limited steel-ing authority granted to FERC under this new legislation.
Tnese two agencies are charged with different responsibilities with respect to wheeling. FERC's new authority is conditioned on conservation, efficiency, reliability, ard public interest.
NRC's authority relates to correcting"or preventing a situation inconsistent with the antitrust laws.
(124 Cong. Rec. 517, 802 (daily ed., October 9,1978))
b/ ublic Utility Regulatory Policies Act of 1978, Pub. L. No.95-617, 92 Stat.
P 3117 (1978).
NIHouse Rep. No. 95-1750, 95th Cong., 2d Sess. at 68, 92.
36/
_ -..., ~.
4 Accordir6 y, it cannot be held that proceedings by BC based upon this stat're 1
in any way supersede the instant NRC proceedirg.
Tne roving parties next cite the order issued by the Texas Public Utility Co:Inission (TPUC) in its Ibcket No.14, to support their contention that this IEC pmceeding should be terminated. The TPUC order required CP&L to disconnect its radial tie into Oklahra, which had put it and other interconnected utilities into interstate ccamrce. This order is presently under vigorous attack in state and federal cocts, based on the constitutional considerations of a state placing an undue bu-den on interstate ccrrerce.37/ We do not need to decide grave constitu-ional issues, but we hold that our statrorv responsibilities under Secticr.105c cannot be irpaired or li=ited by a state agency. We do not assure that TFUC would ta'w any action resulting in unnecessa.y confrontation.
m Tne novants have also cited the injunction issued by the District Ccun as another reason to tenanate or sharply limit the instant proceeding. That order pmvides in pertinent part that "CP&L is hereby peranently enjoined from pe=.ittir; pour it receives from STP to enter interstate ccxrerce as lcr6 as CF&L re ains a participant in the EP Agreenent and as long as $8.2 of that agree ent rerains in force." Since it is contended that $8.2 of the participa-r tion agreenent is inconsistent with the antitrust law by its intrastate cc:rerce limitation, this Board could, if the evidence required it, approve a license condition excisirs or refcming that section of the agreerent. 'Ihe District Court's injunction cbes not bar NRC renedies, nor require the dismissal of this proceeding.
3.1/ n addition to proceedings in the state district court of Texas, the State of I
New Mexico has petitioned the thited States Supreme Court to hear this case under its original jurisdiction (New Mexico v. Texas, Original Action 16. 82).
20 -
For the foregoing reascas, the t:etions of FHx? and TUGC0 are denied. We are not persuaded that inte-locutory revie,,' is necessa./ or appropriate and hence decline the requests to certify the questiens raised in these motions to the.
Cocmission or the Appeal Board (10 CFR 552.718(i), 2.730(f)).
It is so ordered.
FOR T.E ATOCC S/ETf AND LICENSEC BOARD Yphp k{ $!
bL &
Parshall E. Miller, Cnain:nn Dated at Bethesda, Y2ryland this 5th day of October 1979.
4
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