ML20082J445
| ML20082J445 | |
| Person / Time | |
|---|---|
| Site: | Catawba  |
| Issue date: | 12/01/1983 |
| From: | Cowan B, Wiggin E ATOMIC INDUSTRIAL FORUM |
| To: | NRC COMMISSION (OCM) |
| References | |
| NUDOCS 8312020155 | |
| Download: ML20082J445 (20) | |
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- USHRC UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION .
'83 DEC -1 A11 :23 BEFORE THE COMMISSION r y . 97 cc: ,,
In the Matter of :
DUKE POWER COMPANY, ET AL. : Docket Nos. 50-413
- 50-414 (Catawba Nuclear Station, :
Units 1 and 2) :
AMICUS CURIAE BRIEF OF THE i
ATOMIC INDUSTRIAL FORUM, INC.
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Edwin Wiggin Executive Vice Fresident Atomic Industrial Forum, Inc.
Of Counsel:
Barton Z. Cowan, Esquire
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8312O20155 831201 gDRADOCK 05000413 Ann McClure, Esq.
PDR Eckert, Seamans, Cherin & Mellott 42nd Floor, 600 Grant Street Pittsburgh, Pennsylvania 15219 Date: December 1, 1983 (412) 566-6000 p3 _-
UNITED STATES OF AMERICA NUCLEAR REGULATL,RY COMMISSION BEFORE THE COMMISSION In the Matter of :
DUKE POWER COMPANY, ET AL. : Docket Nos. 50-413
- 50-414 (Catawba Nuclear Station, :
Units 1 and 2) :
AMICUS CURIAE BRIEF OF THE ATOMIC INDUSTRIAL FORUM, INC.
The Atomic Industrial Forum, Inc. (" Amicus") files this brief as amicus curiae in connection with consideration by the Nuclear Regulatory Commission (" Commission") of a mo-tion of the applicant Duke Power Company (" Applicant") to stay the effectiveness of rulings issued in the above-captioned proceeding by the Atomic Safety and Licensing Board (" Licensing Board") and the Atomic Safety and Licensing Appeal Board
(" Appeal Board") dated November 10, 1983 and November 14, 1983, respectively. On November 17, 1983, the Commission issued an Order (" Order") deferring ruling on Applicant's stay motion and requesting response to four questions relating to consideration by the Commission of the motion. Although Amicus will briefly address each of the questions raised in the Commission Order,
Amicus in this brief is primarily concerned with addressing the far-reaching consequences if the olders of the Licensing ,
l Board and Appeal Board are not stayed and reversed. Amicus believes the orders of the Licensing Board and Appeal Board exhibit a fundamental misunderstanding of the nature of the attorney-client privilege and a serious misapplication of the Commission Rules of Practice. The board orders, if al-lowed to stand, would seriously and significantly interfere with the attorney-client privilege and would do substantial harm to the orderly conduct of Commission licensing proceed-ings. Because the orders represent an improper interference with the attorney-client relationship and are not in accord-ance with Commission regulations or sound administrative practica, they should be stayed and set acide.
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Interest of Amicus The Atomic Industrial Forum, Inc. (" Forum") is an association of over 500 domestic and overseas organizations interested in the development of peaceful uses of nuclear energy. Its members include electric utilities, manufacturers, l architect-engineers, consulting firms, law firms, mining and milling companies, and others who design, build and operate and service facilities for the production of nuclear fuel and i
! the generation of nuclear power. Duke Power Company is a mem-ber of the Forum.
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t A. Discussion The major question before the Commission at this time is whether it is permissible for a party to a licensing proceeding to contact, during the course of the proceeding, witnesses who are employees of another party to the proceeding and question them concerning their testimony and information they may possess without the permission or presence of such other party. The Licensing Board specifically ruled that such contacts were permissible with respect to any employee-witness other than executive level witnesses, and directed Applicant's counsel to withdraw any advice to Applicant's employees to the contrary. This order was left standing by the Appeal Board, although it modified the order so as to ban inquiry by counsel for intervenor Palmetto Alliance ("Intervenor") into communica-tions between such witnesses and counsel.
Amicus submits that the Licensing Board order, even as modified by the Appeal Board, is erroneous and must be stayed and reversed. There are two fundamental reasons why this is so. First, the orders improperly interfere with the attorney-client privilege. Second, the orders constitute and sanction violations of Commission Rules of Practice and raise serious ethical questions under the American Bar Association Code of Professional Responsibility.
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- l. Attorney-Client Privilege An order allowing one party-to a proceeding to discuss and consult with the employee-witness of another party violates the attorney-client privilege. The attorney-client privilege, which_is the oldest of all privileges for i
confidential communications known to the common law, is designed to protect the confidentiality of communications between counsel and client. As expressed by the United States Supreme Court, its purpose in doing so is to " promote broader l
public interest in the observance of law and administration of justice." Upjohn Co. v. United States, 449 U.S. 383, 389 It exists to enable an attorney to.obtain full dis-(1981).
l closure of all information so as to be in a position properly to represent the client. In the present case, the Applicant is a corporation, and it is clear that the privilege applies to the Applicant. Upjohn Co. v. United States, supra. As a corporation, however, the Applicant only communicates through its employees. Therefore, the Applicant may demand the protec-tion of confidentiality of those communications of its employees, acting on its behalf, with its counsel.
In the present case, the Licensing Board recognized this proposition, but improperly limited its-application to ,
" executive level witnesses", thereby adopting the so-called
" control group test" for determining when contact with employees
of a corporation are to be prohibited as an invasion of the attorney-client privilege. Simply stated, the control group test held that in applying the attorney-client privi-lege in a corporate context, only senior management possessed an identity sufficiently analogous to the corporation as a whole, and therefore, communications between counsel and em-ployees not in the senior management control group were not privileged and could not be protected. The Supreme Court repudiated the " control group" test in the Upjohn case. In so doing, it noted that frequently middle and lower level employees "can, by actions within the scope of their employ-ment, embroil the corporation in serious legal difficulties, and it is only natural that these employees would have the relevant information needed by corporate counsel if he is adequately to advise the client with respect to such actual or potential difficulties." 449 U.S. at 391. The control group test was found by the Supreme Court to discourage the communication of relevant information.
The lower board's rulings in this case are directly contrary to the Supreme Court's teachings in Upjohn. The result of allowing those rulings to stand would be to allow counsel of another party to come between or interfere in the relationship between Applicant's counsel and employees of Applicant who possess the relevant information. This is especially unfortunate in the regulatory context here, where one aspect of counsel's legal advice is to ensure compli-ance with Commission regulations. Indeed, this very subject was raised by the Supreme Court in the Upjohn case as one reason'for rejecting the limited " control group test" which the Licensing Board and Appeal Board now would apply. In Upjohn, the Supreme Court said:
i "The narrow scope given the attorney-client privilege by the court below [in ,
using the control group test] not only makes it difficult for corporate attorneys to formu-late sound advice when their client is faced with a specific legal problem but also threatens to limit the valuable efforts of corporate counsel to ensure their client's compliance with the law. In light of the 4 vast and complicated array of regulatory legis-lation confronting the modern corporation, corporations, unlike most individuals, ' con-stantly go to lawyers to find out how to obey a the law, . . .
" (Citations omitted; emphasis added). 449 U.S. at 392.
In the present case, by allowing unfettered access to Applicant's employee-witnesses without permission or pres-ence of Applicant's counsel, the Licensing Board and Appeal Board have effectively interfered with the ability of counsel to obtain information from his client through its employees.
The Appeal Board's attempt to minimize this interference by i
directing that Intervenor's counsel refrain from inquiring into the existence of communication between Applicant's counsel and its employees is insufficient, for the interfer-ence is created by the very act of interviewing the employees.
Moreover, it is impossible to expect employees to adhere to j i
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- the line' implicit in the Appeal Board decision between dis-closure of communication with counsel " bearing on the licens-ing proceeding and issues being litigated therein" (which is not authorized) and discussion of underlying facts relat-ing to the issues as to which such employee may have knowledge (which is permitted) . Indeed, as a prectical matter it will be difficult for Intervenor's counsel to remain within the scope of the questioning allowed by the Appeal Board, and no representative of Applicant or other trained counsel will be present to determine when that scope has been exceeded. Appli-cant's attorney must, of necessity, meet with employee-witnesses regarding their testimony. Such meetings involve communica-tions which, under Upjohn, clearly are privileged. The Appeal
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Board ruling would attempt to draw a line between these privi-leged portions of the communication and the facts known by the j
employee-witnesses -- a line we submit is impossible to draw or enforce.
In summary, in order for counsel to prepare a case effectively and to plan strategy, there is.a necessity for full and frank communication between attorney and client.
Such communication in the case of a corporation extends to the communication with all corporate employees. The process by.which lawyers become fully informed and prepared includes discussions with employees far beyond executive level
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employees. That process would be seriously interfered with by the rulings of the Licensing Board and Appeal Board.
- 2. Violation of Commission Rules
- The rulings of the Licensing Board and Appeal Board constitute and sanction a violation of the Commission Rules of Practice contained in 10 C.F.R. Part 2. Indeed, the rulings so affect the philosophy underlying the adjudicatory hearing procedures embodied in the rules that they threaten to under-mine those procedures.
The rules of practice constitute an orderly approach to the hearing process. They proceed from issue formulation through discovery to hearings. The rules contemplate that par-ties will determine the facts which are in the possession of i
another. party or known to such other party through the discov-ery process. See 10 C.F.R. S 2.740 et seg.
A corporate applicant possesses knowledge of facts through its files and its employees. It generally is not the executive level employees who possess the type of detailed technical information required to respond to contentions.
Rather, such knowledge normally resides in middle level and 1 The Licensing Board ruling also may constitute an invasion of the attorney work product privilege which protects against discovery and production of materials which constitute the work of an attorney in the preparation of a case for hearing.
Hickman v. Taylor, 329 U.S. 495 (1947).
l lower level employees. As noted by the Supreme Court in Upjohn, "it is only natural that these [ middle and lower level]
employees would have the relevant information needed." 449 U.S. at 391.
- The time for this knowledge to be discovered is dur-ing the discovery phase of the proceeding, and the procedures for discovering such information are clearly spelled out in
- Commission regulations. In effect, the Licensing Board has grafted onto those procedures a new discovery rule. Under the Commission Rules of Practice the permitted discovery must be completed by the second prehearing conference, except upon leave for good cause shown. The Licensing Board order now would reopen discovery at a much later time -- during the course of the hearing itself. Moreover, contrary to the dis-covery rules, it would allow discovery without presence of other counsel once witnesses have taken the stand. At that l
l time, a type of " contact" discovery with witnesses could take i
' place, with counsel for a party able to ask questions of em-ployee-witnesses of another party outside the hearing process.
l Not only is such a procedure unauthorized by Commission regu-lation, it seriously calls into question the entire discovery If counsel during the process contained in those regulations.
hearing may talk with employees of another party without pres -
ence or permission of such party's counsel, why isn't this to be e
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r allowed at any time? What is the need for discovery rules with respect to anyone (other than executive level employees) if the contact authorized by the Orders here under review is to be allowed?
The fundamental premise on which our adjudicatory.
1 system is based is that each party is to be governed by dis-covery rules which spell out how and when discovery may take place. That premise is breached under the lower boards' rulings in this case, leaving a free-for-all situation in
- which no rules govern. If, indeed, it is necessary in any case for a party to have the extraordinary privilege of dis-covery while a hearing is in progress, such discovery should be obtained within the framework of Commission regulations
-and for good cause shown, and should not be allowed by an 4 end-run around the Rules of Practice.
A principal source of error in this case appears to stem from a failure to focus on the essential issue with respect to testimony in any licensing proceeding, to-wit:
the substance of the testimony being presented by the wit-nesses. Thus, Intervenor here raised the . issue now before
' the Commission in the context of an attempt to flush out what Intervenor's counsel called "the nature of the consultation" between Applicant's counsel and its witnesses. Apparently,
- Intervenor's counsel sought to find improper instructions to Although
. witnesses or improper conduct of counsel or witnesses.
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the Appeal Board at least barred inquiry into the existence of communication between Applicant's counsel and Applicant's employee-witnesses, the rulings of the lower boards nonethe-less threaten excursions into this area. Amicus submits that the Commission should bring the focus back to the testimony itself. The proper focus at the hearing must be on the sub-stance of a witness's testimony, and the time for factual dis-covery with regard to such testimony is during the discovery phase of the hearing process. Any other ruling is violative of Commission regulations and threatens the integrity of the Commission's licensing process.
The Commission Rules of Practice are a subset of American jurisprudence. One of the basic tenets of our judi-cial and administrative system is that no party may be com-pelled to provide information to another party other than through authorized and appropriate discovery or during the course of examination at trial. There are fundamental due process rights involved in thi's concept, including the right of a party adequately to prepare for a hearing, and the con-comitant right to obtain legal advice based on sound and informed knowledge. A corporation only can speak and provide the information in its possession through its employees, who are agents of the corporation. In Upjohn, the Supreme Court made it clear that such agents include not only senior manage-ment but all corporate employees. What the Licensing Board
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and Appeal Board rulings nave done, therefore, is to set aside a basic tenet of American jurisprudence and invade the due process rights of Applicant.
Further, the order of the lower board raises serious ethical questions under the American Bar Association Code of Professional Responsibility. Under Disciplinary Rule 7-104, communication is forbidden between a lawyer and another party, absent prior consent of such other party's counsel or other legal authorization. Since a corporation only speaks through its employees, if this rule is to be meaningful, it must of necessity extend to bar unauthorized contacts between the attorney for one party and the employees of another (corporate) party, especially where such employees, in the performance of their responsibilities which are the subject matter of their testimony, have the authority to commit the corporation. See ABA Committee on Ethics and Professional Responsibility, Informal Opinion 1410 (February 14, 1978). It would not be ,
effective to interpret the rule to forbid such contacts only with executive level employees, since, as noted elsewhere in this brief, frequently middle and lower level employees pos-sess knowledge on the " subject of the-representation" which is at the heart of Disciplinary Rule 7-104. Any employee who, during the performance of his job responsibilities, is in a position of authority or apparent authority to commit the cor-poration is the alter ego of the corporation, and hence, under
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i Disciplinary Rule 7-104 is an opposing party with whom communications are proscribed by the Disciplinary Rule.
See ABA Committee on Ethics and Professional Responsibility,
- Informal Opinion 1498 (April 11,1983) . The employee-witnesses of Applicant in the present proceeding fit this exemption, since they were in a position during the perform-ance of their jobs to commit the corporation within the scope of their responsibilities. Thus, for purposes of Disciplinary Rule 7-104 (A) (1) , they are the alter ego of the Applicant, and hence, an " opposing party". Accordingly, the Licensing Board and Appeal Board rulings, if allowed to stand, would sanction a violation of the Disciplinary Rules which are binding on all attorneys.
B. Responses to Commission Questions With the above discussion in mind, Amicus briefly addresses below each of the four questions raised in the Com-mission Order dated November 17, 1983.
- 1. Is there an attorney-client relationship be-tween Applicant's attorneys and its witnesses, and, if so, why?
Amicus believes that the attorney-client privi-lege protects the confidentiality of communications between Applicant's attorneys and the employee-witnesses of Applicant.
As discussed above, this privilege protects contacts beyond l
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those with executive level employees, and includes middle and lower level employees. Hence, in the view of Amicus, i
it is not necessary to' establish a separate attorney-client !
relationship between Applicant's attorneys and Applicant's employees. However, based on the Upjohn case, Amicus agrees with Applicant that an attorney-client relationship does exist between Applicant's counsel and its employee-witnesses for purposes of protecting confidentiality of communications and requiring consent of Applicant's counsel and Applicant for contact by Intervenor's counsel with such employees.
Are Applicant's witnesses "a party" in the e
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context of ABA Disciplinary Rule 7-104?
Applicant's employee-witnesses are agents of j
Applicant, and hence, agents of a party. Therefore, ABA Disciplinary Rule 7-104 is applicable and would bar Inter-venor's counsel from communicating with those employee-witnesses without the prior consent of Applicant's counsel.
In other words, within tha context of Disciplinary Rule 7-104 J
l and for purposes of determining whether Applicant's employee-witnesses may be contacted without prior consent of-Applicent's counsel, each witness is the alter ego of Applicant, and hence, is "a party". See discussion, supra, pp. 11-13.2 Any literal i
2The test to be used in determining when an employee is a
" party" under Disciplinary RuleThese 7-104range has been subject to from the ABA test various Bar interpretations.
discussed above and at 11-13 of this brief, with its refer-ences to authority or apparent authority to commit the cor-poration, to the view of.the Committee of the Association of
' the Bar of the City of New York in opinion 830, which holds that all agents and employees of a corporation are covered.
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L interpretation of a party as only one who is a named liti-gant in a_ proceeding is far too narrou for purposes of apply-ing Disciplinary Rule 7-104, and any requirement that the witness-employees be named litigants to be " parties" in such
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a narrow sense would be improper.
> 3. Does the validity of the Board's Orders depend on whether the witnesses are " clients" or
" parties"?
Amicus submits that Applicant,'both as a client of Applicant's counsel and as a party, has the right to pre-vent Intervenor's counsel from interviewing or otherwise approaching its employee-witnesses (except, of course, in the ,
scope of proper discovery or while undertaking cross-examina-tion during the hearing). Moreover, once the attorney-client relationship exists, as discussed above, the employee-witnesses are " clients" and " parties" for purposes of application of the 4
attorney-client privilege.
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- 4. Are there any circumstances under which Appli-cant's witnesses, who are also its employees, simulatenously can be Intervenor's witnesses?
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' If so, are these circumstances present in this case, and what effect does this have on the validity of the Board's Order?
4 Amicus believes that Applicant's employees, 4
j insofar as they are authorized and acting as agents of Appli-cant, cannot simultaneously be Intervenor's witnesses, except r
- as they may be called as adverse witnesses as on cross-examination. In the latter circumstances, the witnesses con-4 tinue to be adverse to Intervenor, although they are called i
A by him. No relationship is created between Intervenor and the employee-witnesses of Applicant which would entitle counsel for Intervenor to talk with such witnesses without permission or presence of counsel for Applicant. Applicant must be permitted to exercise its right to instruct such employee-witnesses (who, as discussed above, are Applicant's agents) not to communicate with Intervenor or Intervenor's counsel except on the record during cross-examination. To the extent the Licensing Board and Appeal Board Orders are to the contrary, they are invalid.
Conclusion Amicus believes that the issues before the Commis-sion in its review of the Licensing Board and Appeal Board Orders raise fundamental questions concerning the attorney-client relationship and the integrity of the Commission Rules of Practice. Amicus is alarmed at the violence these Orders do to the adjudicatory system used by the Commission in con-ducting its licensing and safety hearings, as well as the implication which arises from these Orders that an Applicant is entitled .o less than full and effective representation by counsel in Commission proceedings. Failure to resolve this matter properly will seriously compromise the ability of the bar in representation of clients before the Commission and its boards, will violate the due process rights of Applicant, and
9 will do substantial, and perhaps irreparable, damage to Com-mission procedures under the Rules of Practice. In view of the fact that the evidentiary hearing in this case is on-going and that the orders of the Licensing and Appeal Boards have a continuing adverse impact on Applicant, we urge the Commission to resolve this matter promptly. Accordingly, Amicus urges the Commission to stay and reverse the orders of the Licensing Board and Appeal Board.
Respectfully submitted,
/s/ Edwin Wiggin Edwin Wiggin Executive Vice President Atomic Industrial Forum, Inc.
Of Counsel:
/s/ Barton Z. Cowan Barton Z. Cowan, Esquire Chairman, AIF Lawyers Committee Ann McClure, Esquire Eckert, Seamans, Cherin & Mellott 42nd Floor, 600 Grant Street Pittsburgh, Pennsylvania 15219 (412) 566-6000 l
l Date: December 1, 1983 l
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. UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION i
In the Matter of' :
DUKE POWER COMPANY, ET AL. h Docket Nos. 50-413
- 50-414 (Catawba Nuclear Station, :
-Units 1 and 2) :
CERTIFICATE OF SERVICE I hereby certify that copies of " Amicus Curiae Brief j of'the Atomic Industrial Forum, Inc." in the above-captioned matter have been served upon the following by deposit in the (
United States mail this 1st day of December,1983.
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- Nunzio J. Palladino Alan S. Rosenthal Chairman Chairman U.S. Nuclear Regulatory Atomic Safety and Licensing Commission Appeal Board Washington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C. 20555
- Frederick M. Bernthal Commissioner U.S. Nuclear Regulatory Thomas S. Moore Commission Atomic Safety and Licensing Washington, D.C. 20555 Appeal Board U.S. Nuclear Regulatory
- James K. Asselstine Commission Washington, D.C. 20555 Commissioner U.S. Nuclear Regulatory Commission Howard A. Wilber Washington, D.C. 20555 Atomic Safety and Licensing j
Appeal Board
- Victor Gilinsky U.S. Nuclear Regulatory Commissioner Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission James L. Kelley Washington, D.C. 20555 Chairman Atomic Safety and Licensing
- Thomas M. Roberts Board Panel Commissioner U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission 20555 Washington, D.C. 20555 Washington, D.C.
Dr. Paul W. Purdom Jesse L. Riley 235 Columbia Drive 854 Henley Place Decatur, Georgia 30030 Charlotte, Nc th Carolina 28207 Dr. Richard F. Foster Carole F. Kagan, Attorney P. O. Box 4263 Atomic Safety and Licensing Sunriver, Oregon 97702 Board Panel U.S. Nuclear Regulatory Chairman Commission Atomic Safety and Licensing Washington, D.C. 20555 r Board Panel Karen E. Long U.S.~ Nuclear Regulatory Commission Assistant Attorney General Washington, D.C. 20555 N.C. Department of Justice P. O. Box 629 Chairman Raleigh, North Carolina 27602 Atomic Safety and Licensing Appeal Board
- Scott Stucky U.S. Nuclear Regulatory Docketing and Service Section Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission Washington, D.C. 20555 George E. Johnson, Esq.
Office of the Executive Legal Don R. Willard Mecklenburg County Director U.S. Nuclear Regulatory Department of Environmental Commission Health Washington, D.C. 20555 1200 Blythe Boulevard Charlotte, North Caroline 28203 Albert V. Carr, Jr., Esq.
Duke-Power Company
- Martin G. Malsch, Esq.
P. O. Box 33189 Deputy General Counsel and :
Charlotte, North Carolina 28242 Acting General Counsel U.S. Nuclear Regulatory Richard P. Wilson, Esq. Commission Assistant Attorney General Wanhington, D.C. 20555 State of South Carolina J. Michael McGarry, Esq.
P. O. Box 11549 Debevoise & Liberman Columbia, South Carolina 29211 1200 Seventeenth Street, N.W.
Robert Guild, Esq. Washington, D.C. 20036 Attorney-at-Law P. O. Box 12097 Charleston, South Carolina 29412 Palmetto Alliance 2135-1/2 Devine Street 29205 /s/ Barton Z. Cowan Columbia, South Carolina Barton Z. Cowan, Esq.
Chairman, AIF Lawyers Committee
- Designates those hand delivered
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