ML20054F599
| ML20054F599 | |
| Person / Time | |
|---|---|
| Site: | Perkins  |
| Issue date: | 06/14/1982 |
| From: | Sherwin Turk NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| NUDOCS 8206170144 | |
| Download: ML20054F599 (27) | |
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[ DESIGNATEID0RIGINAL 6/14/82 C= W i s sy V
un Q ha, UNITED STATES OF AMERICA NUCLEAR REGULATORY COPMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of Docket Nos. STN 50-488 DUKE POWER COMPANY 50-489 50-490 (Perkins Nuclear Station, Units 1, 2 and 3)
NRC STAFF'S RESPONSE TO MOTION OF DUKE POWER COMPANY TO WITHDRAW APPLICATION WITHOUT PREJUDICE. .
On April 19, 1982, Applicant Duke Power Company (" Applicant") filed its " Motion of Duke Power Company to Withdraw Application Without Preju-dice"(" Motion").1/ Ir. its Motion, the Applicant sets forth the reasons underlying its decision to withdraw the Perkins CP application, as follows: "the recent weakening of growth in demand for electric power,"
"an unprecedented level" of construction financing costs, and " increasing regulatory uncertainty and delay" (Motion at 2). The Applicant then sets forth its views as to why a dismissal without prejudice is appropriate and why costs and attorneys' fees should not be awarded to the Intervenors.
On April 29, 1982, the Intervenors filed their " Response to Appli-i cants' Motion to Withdraw" ("Intervenors' Response") in which they argued that a dismissal with prejudice should be entered and that, in any event,
-1/ An earlier " Motion to Withdraw Application and to Tenninate Proceed-ings" was filed by the Applicant on March 2, 1982, before both the Licensing Board and the Appeal Board. The Intervenors opposed that motion, and sought a dismissal with prejudice and an award of costs and attorneys fees. " Response to Motion to Withdraw," dated March 11, 1982. That motion led to the Appeal Board's decision to vacate the three partial initial decisions which had been issued in this proceeding, on the grounds of mootness, and to remand other issues to the Licensing Board. Duke Power Co. (Perkins Nuclear Station, Units 1, 2 and 3), ALAB-668, 15 NRC (March 24, 1982).
See discussion infra, at 7-8.
8206170144 820614 PDR ADOCK 05000488 G PDR J
e' they should be awarded costs and attorneys' fees. On May 28, 1982, pursuant to leave granted by the Licensing Board, the Applicant filed
" Duke Power Company's Reply to Intervenors' Response to Motion to With-draw" (" Applicant's Reply").
For the reasons set forth below, the NRC Staff (" Staff") supports the Applicant's Motion and recommends that this proceeding be dismissed without prejudice. Further, the Staff opposes the Intervenors' request that they be awarded costs and attorneys' fees, and reconinends that their request be denied. -
I. BACKGROUND The application for construction permits for three nuclear power reactors at the Perkins site was docketed before the Atomic Energy Com-mission on May 24, 1974, along with an application for construction pennits for the Cherokee Nuclear Station, Units 1, 2 and'3. The six Perkins and Cherokee units employ the concept of engineering standardi-zation, which is based on utilizing the same design for multiple sites.
The construction permits for the Cherokee units were issued in 1977; construction permits fnr the Perkins units were neither issued nor I
authorized at the time the Applicant filed its Motion.
Hearings were held on various issues related to the Perkins CP l application during the period of 1976-1979. Three partial initial 2
decisions were issued by the Licensing Board] -- all of which have l
--2/ See LBP-78-25, 8 NRC 87 (1978) (fuel cycle); LBP-78-34, 8 NRC 470 TIT /8)(environmentalandsafetyissues);LBP-80-9,11NRC310 (1980) (alternate sites). Intervenors' appeal of the alternate sites decision was dismissed by the Appeal Board's decision of March 24, 1982. See n.1., supra.
e . e _ _.m . .-- .e._
V now been vacated by the Appeal Board's decision of March 24, 1982 --
while certain other matters had not yet been resolved at the time the Applicant's Motion was filed.3_/
On January 9,1978, the Applicant announced that Perkins Units 1 and 3 will be delayed 3 years (to 1988 and 1993, respectively) and that PerkinsUnit2willbedelayed4 years (to1991).1/ On July 2, 1979, the Applicant informed the Licensing Board that financial comitment for Perkins had been withdrawn and that no final decision had been made as to construction of any of the Perkins units.1/ Also on July 2, 1979, the Applicant announced a two-year postponement in commencing operation of Cherokee Units 1 and 2, and stated that financial commitment for Cherokee Unit 3 had been withdrawn.6_/ On February 24, 1981, the Appli-cant announced an indefinite delay in completing construction of CherokeeUnits1and2.1/
Following the February 1981 announcement of a delay in the construction of Cherokee Units 1 and 2, the Appeal Board inquired as to the advisability of proceeding with the scheduled oral argument in Perkin_s_, of the Intervenors' appeal from the Licensing Board's PID on l
-3/ The Licensing Board had not yet resolved questions concerning TMI-related and generic safety issues.
l 4_/ LBP-78-34, 8 NRC at 509, n.19.
-5/ Letter from William L. Porter, Esq., Duke Power Company, to the Licensing Board, dated July 2, 1979.
6/ Id.
-7/ See letter from C. Jean Bishop, Secretary, Atomic Safety and Licensing Appeal Board, to J. Michael McGarry, Esq., dated February 25, 1981.
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alternate sites. The Appeal Board noted that the Cherokee facility had already received construction permits and had an " investment to date of
$400 million", but the Applicant had nonetheless stated that it had not yet gone "beyond the point of no return on Cherokee"; the Appeal Board observed that "this report raises a serious question as to Duke Power's present intentions with regard to its proposed Perkins facility. 8/
In response to the Appeal Board's inquiry, the Applicant stated that the Perkins facility had not yet been abandoned:
The Perkins facilities are at the present time unscheduled, although the need for generation capabilities in the 1990's is evident. The Company is comitted to continuing construction prograras as soon as sufficient funds can be reasonably obtained.9/
The Applicant urged that the oral argument be allowed to proceed as scheduled, and argued, inter alia, that such a course of action was in the interest of the public and parties, with no prejudice resulting to the pa. ies.EI The Intervenors or, posed the Applicant's position and urged that l the proceeding be dismissed--without prejudice--or, in the alternative, that the proceeding be suspended indefinitely.E/ The Staff responded l
l 8/ Id.
-9/ Letter from William L. Porter, Esq., Duke Power Company, to C. Jean Bishop, Atomic Safety and Licensing Appeal Board, dated March 10, 1981, at 1.
l 10/ Id., at 3.
-11/ Letter from William G. Pfefferkorn, Esq., to C. Jean Bishop, Atomic j Safety and Licensing Appeal Board, dated March 16, 1981, at 2-4.
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by noting that the Applicant's letter did not indicate "when or if it intends to construct the Perkins facility . . . . Rather, the Applicant
. . . implies that Perkins, or some other facility, might be required during[the1990sj."E Nonetheless, the Staff concluded that "there is some advantage in going forward with the appeal", although that required "some further expenditure of time and resources" by the parties, in order to " preserve the value of much of the expenditure of resources which has alreadybeeninvestedinthisproceeding.."E Following the submission of the parties' views, the Appeal Board decided to allow the oral argument to proceed as scheduled. Among the reasons given by the Appeal Board in support of its decision were the following:
. . . (2) should the intervenors' claims on their appeal prevail, future wasteful expenditures of the applicant's time and money might be obviated (see Douglas Point, 1 NRC at 546); [and] (3) compared to their investment to date in the adjudication of the alternate site issue, the further expense which will be incurred by the parties in preparing for and presenting oral argument is relatively small . . . 14]
Oral argument of the alternate site appeal was held on April 1,1981.
On April 28, 1981, the Licensing Board sin'ilarly inquired as to the Applicant's plans to proceed with the Perkins facility, following the
-12/ Letter from Sherwin E. Turk, Esq., Counsel for NRC Staff, to C. Jean Bishop, Atomic Safety and Licensing Appeal Board, dated March 17, 1981, at 2.
13/ Id., at 7.
_14] " Memorandum" issued by the Appeal Board on March 20, 1981, at 8.
publication of a report in Nucleonics Week which listed the facility as being"ripeforcancellation".E/ On May 14, 1981, following the receipt ofApplicant'sresponse,E/ the Licensing Board ordered a stay of the proceeding for a period of two years, except as to issues pending before theAppealBoarM/ -- and thereby granted, in part, the motion to dis-miss or stay which had been filed by the Intervenors two years earlier.El The proceeding remained virtually dormantEl from May 14, 1981 to February 3,1982, when the Applicant advised the Licensing Board that it
---15/ " Order Relative to Applicants' Future Plan for Perkins," dated April 28, 1981.
-16/ " Response to Licensing Board's Order Relative to Applicant's Future Plans for Perkins, dated May 5, 1981. Attached to the Applicant's response was a letter from L. C. Dail, Duke Power Company, to Darrell G. Eisenhut, Director, NRC Division of Licensing, dated March 12, 1981, which stated that " commercial operating dates for
. . . Perkins Units 1, 2 and 3 have not been determined", that those units "are still planned but are currently unscheduled," and that
" Duke does not consider it appropriate to expend Commission resources on the Perkins application during the next two years except for resolution of the pending licensing questions . . . on alternate sites and site suitability."
---17/ " Order Relative to Motion to Dismiss Proceedings or in the Alterna-tive to Stay Action," dated May 14, 1981. The Licensing Board stated that it "has no basis for dismissing the proceeding." I_dd . ,
at 2.
i 18/ " Motion to Dismiss Proceedings or in the Alternative to Stay Action,"
filed July 10, 1979. The Intervenors' motion was based on the Appli-cant's decision of June 18, 1979 to withdraw financial commitment for the Perkins facility, as reported to the Licensing Board by Applicant's letter of July 2,1979 (see n.5, supra).
I H/ The only activity in the proceeding during this period was generated by Intervenors' " Motion to Consider New Evidence and Reopen the Proceedings," filed on December 8, 1981.
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"isintheprocessofreevaluatingthestatusofthePerkinsproject."E The Applicant advised, further, as follows:
Duke's management intends to recomend to its Board of Directors that the pending application for a construction permit for Perkins be withdrawn. That recommendation will be made on February 23, 1982.
If the Board approves, Duke will seek to maintain the site for future development. One option which Duke is considering is applying for site approval under the Comission's Early Site Review regulations.
A meeting was held with the Staff at the Applicant's request on February 16, 1982, to discuss the procedures available for converting the Perkins CP application to a request for early site review; the meeting was attended by representatives of the Staff and Applicant, as well as by Counsel for Intervenors.b On February 23, 1982, the Applicant's Board of Directors voted to withdraw the Perkins construction permit applications; on March 2,1982,
-20/ Letter from Albert V. Carr, Jr., Esq., Assistant General Counsel, Duke Power Company, to the Licensing Board, dated February 3,1982.
Attached to the Applicant's letter was a corporate press release of the same date, which reported that the decision to withdraw the Perkins application was based on "a number of factors" including "high interest rates, inflation, regulatory uncertainties, finan-cial considerations and slower growth in power demand than when Perkins was initially planned." It reported, however, that the company remains "as committed to nuclear power and to the Perkins location as [it was] in 1974 when the construction permits were requested" and that "at some future date [it] will need to build a plant to meet electric demand in that part of the State."
-21/ On February 22, 1982, the Intervenors filed a " Point of Information" in which they asserted that conversion to an early site review would, in effect, constitute a withdrawal "with prejudice to the Intervenors,"
signalling their preference for an outright dismissal of the proceed-ing.
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the Applicant so advised the Staff and filed its first motion to with-drawwithoutprejudice.E On March 11, 1982, the Intervenors opposed that motion, and requested that dismissal be ordered "with prejudice" andthattheybeawardedcostsandattorneys' fees.E On March 24, 1982, the Appeal Board vacated the three partial initial decisions in this proceeding, on the ground of mootness, and referred to the Licensing Board the other issues raised in the motion and in Intervenors' response thereto.E On April 1, 1982, the Licensin9 Board ordered that the pleadings be refiled, taking into consideration the relief sought by the Intervenors, the Appeal Board's decision in ALAB-668, and in Philadelphia Electric Co. (Fulten Generating Station, Units 1 and 2), ALAB-657, 14 NRC 967 (1981), and Puerto Rico Electric Power Authority (North Coast Nuclear Plant, Unit 1), ALAB-662, 14 NRC 1125 (1981).2_5/ Pursuant to the Licensing Board's Order, the Applicant filed its Motion on April 19, 1982; Inter-venors' Response was filed on April 29, 1982, and Applicant's Reply was filed on May 28,1982.E
-22/ " Motion to Withdraw Application and to Terminate Proceeding," filed on March 2, 1982.
23/ " Response to Motion to Withdraw," dated March 11, 1982.
-24/ Duke Power Co. (Perkins Nuclear Station, Units 1, 2 and 3), ALAB-668, 15 NRC (March 24,1982).
2_5/
5 " Memorandum and Order," dated April 1, 1982.
26/ See discussion supra, at 1-2.
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II. ARGUMENT A. Dismissal Without Prejudice Should Be Ordered The terms upon which an application may be withdrawn are set forth in10C.F.R.52.107(a). That regulation provides as follows:
The Commission may permit an applicant to withdraw an application prior to the issuance of a notice of hearing on such terms and conditions as it may prescribe, or may, on receiving a request for withdrawal of an application, deny the application or dismiss it with prejudice. With-drawal of an application after the issuance of a notice of hearing shall be on such terms as the presiding officer may prescribe.
The Appeal Board recently considered the circumstances in 'which 9 2.107 permits a dismissal with prejudice, in Philadelphia Electric Co.
(Fulton Generating Station, Units 1 and 2), ALAB-657,14 NRC 967 (1981).
There, the Appeal Board held that the licensing board's "uaprecedented" dismissal with prejudice constituted "a particularly harsh and punitive term imposed upon withdrawal," which was not supported by a required showing of harm "of comparable magnitude" (14 NRC at 974).2_7/ While the Appeal Board observed that "[t]here is no doubt that a licensing board is vested with the power to dismiss an application with prejudice," it noted l that certain restraints apply to the exercise of this power (id.):
On its face, this provision [9 2.107(a)] gives the boards substantial leeway in defining the circum-stances in which an application may be voluntarily withdrawn. But as in all other areas, the boards may not abuse this discretion by exercising their power in an arbitrary manner [ citations omitted]
.... The terms prescribed at the time of with-drawal must bear a rational relationship to the conduct and legal harm at which they are aimed.
And, of course, the record must support any findings concerning the conduct and harm in question.
-27/ In Fulton, the construction permit application had been in a state of suspension from 1975 to 1978, followed by the applicant's filing (CONTINUED ON NEXT PAGE)
l Further, the Appeal Board held that a dismissal with prejudice requires a showing of " legal harm" to either a party or the public interest in general (id. at 978-79), and cited the decision in Boston Edison Co.
(Pilgrim Station, Units 2 and 3), LBP-74-62, 8 AEC 324, 327 (1974), for theviewthatashowingof" substantial"prejudiceisrequired.E After 27_/ (F0OTNOTE CONTINUED FROM PREVIOUS PAGE) of an early site review request without " firm plans" for the con-struction of its proposed reactor, and a further tv' year hiatus ensued prior to the filing of applicant's motion to withdraw its application without prejudice.
The Appeal Board remanded the proceeding to the licensing board for further evidentiary proceedings to determine the existence of facts which would support the licensing board's implied finding that the applicant's early site review request was "not in good faith."
14 NRC at 976.
-28/ In Pilgrim, the licensing board held that the public interest is of paramount importance and must be protected, absent a showing of
" substantial" prejudice to one of the litigants other than the mere prospect of future litigation (8 AEC at 327). The licensing board concluded as follows (id.):
It must be presumed that it is the public's need for power which is one of the underlying reasons for con-struction of a power plant. This statutory principle --
"public convenience and necessity" -- is the basis which underlies the authorization granted by other concerned federal and state regulatory agencies before any con-struction can be comenced by the utility, and requires a finding of public need. If such finding is made, based upon a proper showing by the utility, it would be unreasonable in the extreme to deprive the public of a needed utility service because of alleged " inconvenience or burden" to potential intervenors. (See Jones v.
Securities and Exchange Comission, 298 U.S.1 (1936) . . .)
reviewing the allegations of hann asserted by the Fulton intervenors, the Appeal Board held (14 NRC at 979):
Mere allegatitns, of course, cannot serve as a basis for a finding of hardship or legal harm.
We note also that it is well settled that the prospect of a second lawsuit -- or in this case, another application to construct a nuclear reactor at Fulton -- does not provide the requisite quantum of legal harm to warrant dismissal with prejudice.
Jones v. Securities and Exchange Commission, 298 U.S. 1, 19 (1936). In the absence of a demonstrated injury to a private or public interest, we cannot affirm the Board's dismissa) of [the] application withprejudice.g/
In puerto Rico Electric power Authority (North Coast Nuclear Plant, Unit 1), ALAB-662, 14 NRC 1125 (1981), the Appeal Board reaffirmed the principles it had enunciated in Fulton, stating that "the severe sanction of a withdrawr' .ath prejudice should be reserved for those unusual situations which involve substantial prejudice to the opposing party or to the public interest in general" (id., at 1133). The Appeal Board found no basis "for departing from the usual rule that a dismissal should be without prejudice" (id. at 1135), where there had been a 4
five-year period of delay and indecision by the applicant as to whether 29/ In Jones v. Securities and Exchange Commission, 298 U.S.1,19 (1936),
the Supreme Court stated:
The general rule is settled for the federal tribunals that a plaintiff possesses the unqualified right to dismiss his complaint at law or his bill in equity unless some plain legal prejudice will result to the defenuant other than the mere prospect of a second litigation upon the subject matter.
This principle is now embodied in Rule 41(a)(2), Fed. R. Civ.
upon which the Comission's regulation,10 C.F.R. 5 2.107(a), is modeled. See Fulton, 14 NRC at 974 n.7.
it would construct its proposed nuclear plant. The Appeal Board found that the Applicant had kept the parties and licensing board apprised of its lack of progress in deciding whether to proceed with its application and had not concealed an intention to abandon the facility (id.). E The Appeal Board found evidence only of "a nuclear power plant proposal slowly being scrapped" and no evidence that there had been an " abuse of process" by the Applicant (id., at 1138). The Appeal Board con-cluded (jd_.):
While there may well be no occasion for the Authority to alter its decision in the future, that decision can best be left to the governmental applicant, taking into account the full range of energy options available to it without the artificial exclusion of the . . . site that a withdrawal with prejudice would entail.31]
When these principles are applied to the Perkins proceeding, the Staff believes that a dismissal with prejudice would be contrary to applicable Supreme Court, Appeal Board and Licensing Board precedent. An examination of the Intervenors' request for dismissal with prejudice reveals that their only allegations of harm involve the time, effort and expense of their participation in this proceeding, which is alleged to have required "strenous [ sic] and extensive imput [ sic]," and "eight
-30/ The Appeal Board held that the intervenors must make a " threshold" showing to require an evidentiary hearing on whether dismissal should be entered with prejudice; that " threshold" would involve "a more stringent standard" than that utilized in connection with the filing of contentions, and would require " serious" allegations of substantial prejudice as well as " affidavits or unrebutted pleadings, of sufficient weight and moment to cause reasonable minds to inquire further" (14 NRC at 1133-34).
-31/ The Staff notes that in another context, it has been held that there is "no legal requirement for an Applicant to proceed with the pro-cessing of its [ construction permit] application in accordance with any set time scale." Detroit Edison Co. (Greenwood Energy Center,
, Units 2 and 3), LBP-75-56, 2 NRC 565, 567 (1975).
yearsofworry,expenditureandanticipation."E These allegations are substantially similar to the allegations raised by the Fulton intervenors, who complained of a seven-year litigation effort involving " time, effort, research, and money" as well as health impainnent and property damage.E The Staff submits that here, as in Fulton, these allegations fail to demonstrate substantial prejudice to any party or the public interest. E The time, effort, anxiety and expense alleged to have been incurred by the Intervenors cannot now be dispelled, regardless of whether the appli-cation is dismissed with or without prejudice. A dismissal with prejudice would serve only to protect the Intervenors from having to litigate a second application, if one should be filed -- and that is an improper basis upon which to order dismissal with prejudice.
While the Appeal Board in North Coast appears to have suggested that dismissal with prejudice might be appropriate where there was lengthy dis-covery or completion of trial, the federal rule pertaining to voluntary dismissals makes no such distinction. Indeed, voluntary dismissal with-out prejudice may be obtained at any point in the proceeding, within the court's discretion, as long as no other party would suffer prejudice M Intervenors' Response, at 8-10.
-33/ Response of Intervenors York Committee for a Safe Environment and Central Pennsylvania Committee on Nuclear Power to Applicant's Request of December 5, 1980, to Withdraw Application Without Prejudice and to Terminate Construction Permit Proceedings,"
filed December 17, 1980, at 1-2. As noted by the Appeal Board, the Fulton intervenors' assertions constituted no more than mere allegations. Fulton, ALAB-657, 14 NRC at 979 and n.15.
B The Staff fails to perceive that " damage to our legal process" may be occasioned by a dismissal without prejudice, contrary to Inter-venors' allegations (Intervenors' Response, at 10).
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l thereby. Intervenors' reliance upon Cherry v. Brown-Frazier-Whitney, 548 F.2d 965 (D.C. Cir.1976), is misplaced, in that there, the trial court found that the plaintiffs had failed to prosecute their claims with reasonable diligence and had been " inexcusably dilatory" (i_d. at 970); there is no evidence that the Applicant in this proceeding has engaged in such conduct. Rather, as in North Coast, there is evidence only of "a nuclear power plant proposal slowly being scrapped." North Coast, supra, 14 NRC at 1138.
On the other hand, dismissal with prejudice may result in clear and substantial prejudice to the public interest. As recognized by the Licensing Board in Pilgrim, supra at 14, tiie public's need for power is of paramount importance, and the public should not be deprived of a needed utility service because of an alleged " inconvenience or burden" to an intervenor, unless that inconvenience or burden is substantial.
Accordingly, the Staff believes that the public interest requires that this proceeding be dismissed "without prejudice".
Furthermore, the Staff believes that the Intervenors have not made a " threshold" showing of any " bad faith" or improper motive on the part of the Applicant in pursuing its application. The Intervenors assert that their intervention put the Applicant "on full and complete notice that the plant would not be necessary as far back as seven years ago." (Intervenors' Response, at 11). They then assert that "the Applicant knew in 1980 that its [ demand] projections were out of line and that the proposed plant was unnecessary," but nonetheless " continued
- for almost two years in its efforts which required Intervenors to respond l
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and to carry out an appeal in 1981" (id., at 9). The Intervenors then argue (id., at 11):
If the Applicant had filed the Motion to Withdraw after the original showing by the Intervenors or even as late as 1979, or 1980, when all of the relevant evidence was available, then an argument for a without prejudice dismissal could be seriously made. However, by proceeding for the last two years in the face of this information, the Applicants have gambled that their estimates would evidentially [ sic]
be redeemed and they lost.
The Staff submits that these arguments fail to show any bad faith l or improper motive on the part of the Applicant, nor do they show any legal harm to the Intervenors. The Applicant appears to have kept the parties and Licensing Board informed of the status of its plans for the Perkins facility all along. As early as January 1978, the Applicant announced delays in the construction of Perkins; in July 1979, the Appli-cant announced that financial comitnent for the facility had been with-drawn. In March 1981, the Applicant indicated that the facility was still planned although unscheduled, and suggested a partial stay of licensing proceedings apart from the resolution of Intervenors' appeal e
on alternate site issues. The Appeal Board, itself, questioned whether that appeal should go fomard, and concluded that it should.
In light of these facts, the Staff believes that there can be no serious claim that the Applicant concealed its intentions or perpetrated an abuse of Connission procedures.El Further, the only " prejudice" which may have been incurred by Intervenors is that they were required M/ A similar conclusion was reached in North Coast concerning allega-tions of concealed intent. See Puerto Rico Electric Power Authority (North Coast Nuclear Plant, Unit 1), ALAB-662, 14 NRC 1125, 1131-32 i
(1981).
to argue an appeal which they, themselves, had filed, and which was ,
expressly mandated by the Appeal Board after it considered the status of the Perkins application. It is important to note that even at the time the appeal was scheduled to be argued -- six years after the proceeding had commenced and just one year ago -- the Intervenors argued that the proceeding should be dismissed without prejudice, and that the Applicant should be free to refile its aoplication later, should it choose to do so.b In these circumstances, the Staff believes that a dismissal with prejudice would constitute an abuse of discretion.
B. Intervenors' Request for Costs and Attorneys' Fees Should Be Denied.
The Intervenors have requested that, regardless of whether the dismissal is with prejudice or without prejudice, an award of costs and attorneys' fees should be entered in their favor. If dismissal is ordered with prejudice, it is argued, such an award could be chsracterized ,
"as an award to a prevailing party" (Intervenors' Response, at 12); if, on the other hand, dismissal is ordered without prejudice, such an award would be a condition attached to voluntary dismissal ( M., at 14). The Intervenorsassertthatthis"distinctioniscrucial"(M.,at12).
- 1. Award Upon Dismissal With Prejudice l
It is well settled, under the general "American rule," that prevailing litigants bear the expenses of their litigation, absent statutory authorization to the centrary. Alyeska Pipeline Service Co.
l
- v. Wilderness Society, 421 U.S. 240, 247 (1975). E The American rule l
36/ See n.11, supra.
-37/ In Alyeska, the Supreme Court expressly rejected the " private attorney general" exception to the American rule which had been carved out by several Courts of Appeal under their general equity powers. 421 U.S. at nn. 39 and 46; but see Opinion of Marshall, J.,.
dissenting, 421 U.S. at 272.
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has recently been applied to NRC licensing proceedings, and has been cited as the basis for denying costs and attorneys' fees to intervenors.
Northern Indiana Public Service Co. (Bailly Generating Station, Nuclear 1)
(" Memorandum and Order (Issuing Proposed Order Terminating Proceeding)")
(April 12, 1982). In Bailly, citing the "American rule" and the Alyeska decision, the Licensing Board held that "[a]bsent a statutory exception, the American Rule is not only binding upon courts but upon administrative agencies as well. Turner v. F.C.C. , 514 F.2d 1354 (D.C. Cir.1975)."
(Id.,at6-7).E The Perkins Intervenors appear to recognize the applicability of this rule to their request, noting that they " candidly admit that the basis for attorneys fees is much stronger ... if the dismissal be without prejudice" (Intervenors' Response, at 12). Nonetheless, they argue that since Comission rules require applicants to bear the expense of Staff work, a similar requirement as to intervenors' expenses should be imposed (i_d.,
d at 12-13), although they cite no statutory authority in support of this argument.
The Staff believes -- as was held by the Licensing Board in Bailly
-- that no statutory authority exists which would support an award of costs and attorneys' fees to the Intervenors. While the Intervenors cite the Comission's rules in 10 C.F.R. Part 170 concerning payment by applicants of Staff expenses, those rules are founded upon statutory authority contained in Title V of the Independent Offices Appropriation
-38/ Intervenors' reliance upon Office of Comunication of United Church of Christ v. F.C.C., 465 F.2d 519 (D.C. Cir. 1972) is misplaced.
That case involved a settlement by the parties in which one litigant voluntarily agreed to reimburse his adversary's legal fees and I expenses -- and the Court of Appeals expressly distinguished it on this ground in Turner v. F.C.C., supra, 514 F.2d at 1356. -
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Actof1952,31U.S.C.483.b That statute does not pemit the award of costs and fees requested by the Intervenors.
Further, the Atomic Energy Act's general rulemaking provisions do not authorize an award of attorney fees.b In similar circumstances, the U.S. Court of Appeals for the Second Circuit has upheld the Federal Power Comission's denial of intervenors' request that an applicant be ordered to pay their costs and attorneys' fees, on the ground, inter alia, that statutory authorization for such an award was not provided by the FPC's general rulemaking authority -- which is substantially identical to the general rulemaking authority of the NRC.b Greene County Planning Board v.
F.P.C. , 455 F.2d 412, 426 (2d Cir.), cert. denied, 409 U.S. 849 (1972).
The Court of Appeals held that absent a clearer Congressional mandate, it could not order the applicant to pay the intervenors' costs (i_d.) In addition, the Court noted that where Congress considered the recovery by intervenors of their costs and attorneys' fees to be in the public interest, express statutory authority for such recovery has been provided (id.).
-39/ See, e.g., Statement of Consideration, " License Fees for Facility Licenses and Materials Licenses," 33 Fed. Reg. 10923 (Aug. 1, 1968). The Comission's revised licensing fee schedule, as set forth in 10 C.F.R. Part 170, was upheld in Mississippi Power &
Light Co. v. NRC, 601 F.2d 223 (5th Cir.1979), cert. denied, 444 U.S.1101 (19EUT.
40/ 5161 (p) of the Atomic Energy Act of 1954 confers upon the Comission the authority to "make, promulgate, issue, rescind, and amend such rules and regulations as may be necessary to carry out the purposes of this Act".
-41/ The intervenors before the Federal Power Comission relied largely upon 5 309 of the Federal Power Act, 16 U.S.C. 5 825h, which authorized the FPC (now the Federal Energy Regulatory Comission) "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]."
For all the above reasons, the Staff believes that costs and attorneys' fees may not be awarded to the Intervenors upon a. dismissal of this procceding with prejudice.
- 2. Award Upon Dismissal Without Prejudice In the event that a dismissal without prejudice is ordered by the Licensing Board, the Intervenors assert that attorneys' fees and expenses should be ordered as " conditions upon a voluntary dismissal" (Intervenors' Response,at12). Such an award is proper, it is asserted, because "the Intervenors are obviously faced with the real possibility of a second proceeding with all of its attendant fees and costs" (jd. , at 14). In support of this position, the Intervenors cite various federal court cases where voluntary dismissals have been coupled with such awards, under Rule 41(a)(2), Fed. R. Civ. P. (jd., at 14-20).
The Staff submits that even where a construction permit proceeding is dismissed without prejudice, an award of costs and attorneys' fees is improper. As noted above, there is no statutory authority which specifically empowers the Licensing Board to award such expenses. 10 C.F.R. 5 2.107(a), while empowering the licensing boards to prescribe such terms upon dismissal as they deem proper, does not specifically authorize the l
l assessment of costs and attorneys' fees -- and no licensing board to date has ever awarded costs and attorneys fees to an intervenor. Cf. Turner
- v. F.C.C., 514 F.2d 1354, 1355 (D.C. Cir. 1975) (FCC's refusal to find implied statutory authority to order reimbursement of legal expenses affirmed by Court of Appeals).
While the Intervenors rely upon Rule 41(a)(2), Fed. R. Civ. P., it is important to note that the Federal Rules are not controlling in NRC l
l 1
proceedings. Thus, the Appeal Board has stated that it is " guided by the rules and practices of the Federal Courts," although it does not follow the Federal Rules in toto. Consumers Power Co. (Midland Plant, Units 1 and 2), ALAB-379, 5 NRC 565, 568 n.13 (1977); Duke Power Co.
(Catawba Nuclear Station, Units 1 and 2), ALAB-355, 4 NRC 397, 411-12 (1976). As stated by the Appeal Board, " judicial procedures should not be imported into the administrative arena uncritically"; before guidance is taken from judicial proceedings, "there must be inquiry into whether the situations are truly similar." Midland, supra, 5 NRC at 568 and n.13.
The Staff submits that, with respect to an award of costs and attorneys' fees upon a voluntary dismissal, the situations in federal court and NRC licensing proceedings are not "truly similar." Litiga-tion in the federal courts ordinarily involves the institution of an action by one party against another. The defendant in such actions does not voluntarily enter the fray but, instead, is required to defend or suffer a forfeiture. Rule 41(a)(2) is designed to protect against instances where "a defendant is damaged by being dragged into court and put to expense with no chance whatever (if there is a dismissal without prejudice) of having the suit determined in his favor." McCann v.
Bentley Stores Corp. 34 F.Supp. 234 (W.D. Mo.1940). The rule also reflects a concern for defendants being subjected to a second action after having been put to the expense of preparing for trial in an original action only to have it dismissed prior to judgment at the I plaintiff's request. Smoot v. Fox, 353 F.2d 830, 833 (6th Cir.1965),
l cert. denied, 384 U.S. 909 (1966). In the context of such civil actions, requiring a plaintiff to pay a defendant's litigation costs l
provides an equitable means to protect a defendant against unnecessary expense while preserving the plaintiff's right to institute a subsequent suit on the same cause of action. 2/
In contrast, an applicant in an NRC proceeding does not seek out intervenors and compel them to defend or forfeit. Rather, an applicant submits its application for review and action by the Comission, and is '
bound to pay the expenses incurred by the agency whether it proceeds with its application or later withdraws it. If an individual or group decides to intervene in the proceeding, it does so voluntarily, and only"to the extent that it deems necessary or feasible. It has no equitable claim to an award of costs and attorneys' fees, nor does it have any reasonable expectation that those expenses will be reimbursed, as no precedent exists which would support such a belief.
In North Coast, supra, the Appeal Board stated:
We leave open the question whether something short of a dis-missal with prejudice, such as conditioning withdrawal of an application upon payment of the opposing parties' expenses might be within the Comission's powers and otherwise appro-priate where the expenses incurred were substantial and intervenors developed infomation which cast doubt upon the merits of the application. 14 NRC at 1135 n.11.
The Staff believes that even if such authority were found to exist, the facts in this case do not merit an award of costs and attorneys' fees.
In this proceeding, the Licensing Board has issued three partial initial 42] The Staff does not agree with Applicant's argument that Rule 41(a)(2) has been construed to permit the award of attorneys' fees only where a plaintiff has been guilty of bad faith or an abuse of process.
Motion, at 16-17; Applicant's Reply, at 31-32. However, we do not believe that this issue requires consideration by the Licensing Board.
decisions, all of which were adverse to Intervenors' positions; no issue to date has been resolved in favor of Intervenors. While the Intervenors assert that their intervention brought to light such matters as reduced demand for electricity, the benefit of peak-load pricing, the need to hire an economist, and the need to reduce river flow drawdown, the Appli-cant asserts that its positions were not affected by the Intervenors.$
The Staff believes that these arguments miss the point: Regardless of whether or not the Intervenors' participation affected the Applicant's planning, they'have not " cast doubt upon the merits of the application."
Accordingly, the North Coast dictum is inapplicable.
Finally, the Staff believes that the Intervenors have failed to provide adequate support for an award of costs and attorneys' fees. The Intervenors have attached to their Response an Affidavit signed by their attorney, William G. Pfefferkorn, Esq. In his Affidavit, Mr. Pfefferkorn states that he has been paid "approximately" $21,000 in attorneys' fees, of which "approximately" $15,000 is "directly attributable to work in these proceedings"; that he has received no payment for $15,000 of addi-tional work " attributable to these proceedings"; that "approximately"
$4,500 was paid to an expert witness "for his testimony in this matter";
and that "approximately" $5,000 was paid to another attorney. These expensestotal"approximately"$39,500.$
43/ See Applicant's Reply, at 4-11.
44/ In addition, Mr. Pfefferkorn seeks payment of "at least" an additional $25,000 for what he estimates is the value of services contributed by Intervenors' other " expert" witnesses, all of whom testified voluntarily and at no expense to the Intervenors. Even assuming that this estimate is accurate and supported by the Inter-venors -- which it is not -- there can be no basis for taxing the free services of these persons as an expense incurred by the Intervenors.
It is well established in federal court cases that the starting point of every award of attorneys' fees "must be a calculation of the attorney's services in terms of the time he has expended on the case."
1 City of Detroit v. Grinnell Corp., 495 F.2d 448, 470 (2d Cir.1974).
Indeed, the court in Lindy Bros. Builders, Inc. v. American Radiator &
Standard Sanitary Corp., 487 F.2d 161,167-68 (3d Cir.1973), explained the importance of knowing exactly what counsel has done:
Before the value of the attorney's services can be determined, the district court must ascertain just what were those services. To this end the first inquiry of the court should be into the hours spent by the attorneys -- how reny hours were spent in what manner by which attorneys. (Emphasisadded.)
This crucial determination of "how many hours" and "in what manner" cannot be made without competent supporting records and a detailed explanation by counsel as to the basis for his fees.
Here, the Intervenors have not supplied the factual records which are necessary to support an award of attorneys' fees. Rather, Counsel for Intervenors has simply estimated- "approximately"--that he spent a certain amount of time working on matters relating to the proposed Perkins plant, part of which was spent in this proceeding and the balance, presumably, in some other proceeding. These ballpark estimates do not provide the precision demanded of attorneys in the federal courts, nor are they sufficient here.
In addition, as stated above, the Intervenors elected voluntarily to participate in this proceeding. The extent of their participation-- ,
starting with the number and nature of contentions they filed--was wholly of their own election. Thus, in effect, the Intervenors may be considered to be similar to plaintiffs; any expenses which may have been
.r y ,,-- ...- - , -
,.,-------2
incurred by them resulted from their own actions and should not be taxed to the Applicant.
Further, it is unclear which, if any, expenses incurred by the Intervenors were proper. As noted above, the Licensing Board has issued three partial initial decisions, all of which were adverse to Intervenors' positions. Thus, there is reason to believe that the Intervenors incurred their expenses, at least in large part, unnecessarily, and it would be patently unfair to tax the Applicant with those expenses. Indeed, in federal court cases, even the award of fees to a prevailing party has excluded fees for time spent on unsuccessful claims.SE/ For the same reasons, the Staff believes that expert w.tness fees, related to conten-tions in which the Intervenors were unsuccessful, should not be allowed.
CONCLUSION For all the above reasons, the Staff supports the Applicant's Motion and recommends that this proceeding be dismissed without
---45/ Thus, fees were denied, in part, in Vandervelde v. Put and Call Brokers and Dealers Ass'n., 344 F.Supp. 157, 160-61 (5.D.N.Y. 1972):
[A] major portion of that time was spent in the prosecution of claims which were overextended, baseless, ultimately held to be without merit, or against parties defendant who were not liable...
The fee awarded should not include compensation for time expended upon theories of liability or overdrawn items of damage ultimately rejected by the trier of fact.
This result has been adopted in numerous other cases.
prejudice. Further, the Staff opposes t'he Intervenors' request that they be awarded costs and attorneys' fees, and recomends that their request be denied.
Respectfully submitted, is)
Sherwin E. Turk Counsel for NRC Staff Dated at Bethesda, Maryland this 14th day of June,1982
^
UNITED STATES OF AMERICA
, NUCLEAR REGULATORY . COMMISSION BEFORE 'THE ATOMIC SAFETY AND i_ICENSING' BOARD In the Matter of ll
) Docket Nos. STN 50-488 DUKE POWER COMPANY , STN 50-489 l)l STN 50-490 (Perkins Nuclear Station h Units 1, 2 and 3) ) .
CERTIFICATE'0F' SERVICE I hereby certify that copies of "NRC STAFF'S RESPONSE TO MOTION OF DUKE POWER COMPANY TO WITilDRAW APPLICATION WITHOUT PREJUDICE" in the above-captioned proceeding have been served on the following by deposit in the United States mail, first class, or as indi-cated by an asterisk, through deposit in the Nuclear Regulatory Commission's' internal
- mail system, this 14th day of June,1982. ,
- Ivan W. Smith, Esq., Chairman Administrative Judge Atomic Safety and Licensing Board i William A. Raney, Jr., Esq.
U.S. Nuclear Regulatory Commission Special Deputy Attorney General Washington, DC 20555 P.O. Box 629 Raleigh, North Carolina 27602 Dr. Donald P. deSylva Administrative Judge William L. Porter, Esq.
Associate Professor of Marine Science Associate General Counsel Rosenstiel School of Marine Duke Power Company and Atmospheric Science 422 South Church Street University of Miami Charlotte, North Carolina 28242 .
Miami, Florida 33149 William G. Pfefferkorn, Esq.
Dr. Walter H. Jordan P.O. Box 43 Administrative Judge .Winston-Salem, North Carolina 27102 881 W. Outer Drive Oak Ridge, Tennessee 37830 Mrs. Mary Davis Route 4 J. Michael McGarry, III, Esq. Box 261 Debevoise and Liberman Mocksville, North Carolina 27028 1200 Seventeenth Street, N.W.
Washington, D.C. 20036 Quinten Lawson, Esq.
Federal Energy Regulatory Coninission Room F611 885 North Capitol, N.E.
Washington, D.C. 20426
- Atomic Safety and Licensing Board Panel '
U.S. Nuclear Regulatory Commission . .
Washington, D.C. 20555 *
- Atomic Safety and Licensing Appeal Board Panel U.S. Nuclear Regulatory Commission
,. Washington, D.C. 20555
- Docketing and Service Section Office of the Secretary U.S. Nuclear Regulatory Commission Washington, D.C. 20555
-l J
t
/ .
Jhoo,L C/A l
' Sherwin E. Turk Counsel for NRC Staff
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