ML20083F200

Forwards Substantive Pleadings in Case Concerning Util Application to Suspend Antitrust License Conditions. W/Svc List

ML20083F200
Person / Time
Site:	Perry
Issue date:	09/20/1991
From:	Mary Spencer SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	Bechhoefer C, Bollwerk G, Mark Miller Atomic Safety and Licensing Board Panel
References
CON-#491-12227 A, NUDOCS 9110040126
Download: ML20083F200 (203)

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• IOi (23 '4 4 0 L C 3 J'6 MahGAR(tg $ptN;(H September 20, 1991 VIA FEDERAL EXPRESS Marshall E. Miller, Chairman Atomic Safety and Licensing Board Panel 1920 South Creek Boulevard Spruce Creek Fly-In Daytona Beach, Florida 32124 VIA MESSENGER Charles Bechhoefer, Administrative Judge Atomic Safety and Licensing Board Panel U ,. S . Nuclear Regulatory Commission 4350 East West !!ighway Room E-413 Bethesda, Maryland 20834 G. Paul Bollwerk, III, Administrative Judge Atomic Safety and Licensing Board Pan <el U.S. Nuclear Regulatory Commission 4350 East West liighway Room E-522 Bethesda, Maryland 20814 Ret Application of Ohio Edison Company to Suspend Antitrust License Conditions (Perry Nuclear Power Plant, Unit 1),

NRC Docket No. 50-440A '

Gentlemer, As the Licensing Board requested at yesterday's Prehearing Conference, enclosed are the substantive pleadings in Ohio Edison

v. Zech (D.D.C. No. 88-1695; D.C. Cir. No. 89-1014) as indicated on the enclosed index. The statements Ms. Charnoff quoted yes-terday regarding the NRC's position that Ohio Edison is entitled to reise the congressional taint issue before the Licensing Board are att (1) Pages 7-8 of the NRC's Memorandum of Points and Author-ities in Support of Motion to Dismiss (Aug. 22, 1988):

If the NRC staff determines initially to deny the requested amendment, plaintiff will have -

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I.etter to Messrs. Miller, Bechhoefer and Bollwerk September 20, 1991 Page Two an opportunity for an adjudicatory hearing before an Atomic Safety and Licensing Board.

That Board's on the record decision will in turn be reviewable by the Atomic Safety and Licensing Appeal Board and the Commission.

It is through this agency process that Ohio Edison must first present its claims of improper congressional interference in the administrative process. Afterwards, if nec-essary, plaintiff can requcst judicial review of the agency's final decision.

(emphasis added); and (2) Page 4 of the NRC's Reply to OE's Opposition to Motion to Dismiss (Oct. 18, 1988):

Subject matter jurisdiction over this claim rests with the NRC in the first instance, and, on appeal, exclusively in the Court of Appeals. Plaintiff will have ample opportu-nity to raise a charge of improper influence or bias in that forum.

(Emphasis added.)

I would also note that the Congressional Record pages upon which Ohio Eoison bases its claim of congressional taint (copies of which the Board also requested yesterday) are included as the only exhibit to Ohio Edison's Interrogatories to the NRC Staff, which are included in this delivery.

Sincerely yours, ljfY/( INilk Margaret S. Spencer Enclosures cca Samuel J. Chilk (via messenger; w/ enclosures)

Service List (w/ enclosures)

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SERVICE LIST '91 STP 2~0 P :29 Joseph Rutberg, Esq. David R. Straus, Esq.

Sherwin E. Turk, Esq. Spiegel & McDiarmid Steven H. Hom, Esq. 1350 Now York Avenue, N.W.

Office of the General Counsel Suite 1100 U.S. Nuclear Regulatory Commission Washington, D.C. 20005-4790 Washington, D.C. 20555 Mark C. Schechter, Esq., Chief Kenneth L. Hegemann, P.E.

Roger W. Fonos, Esq., President Assistant Chief American Municipal Power-Ohio, Janet Urban, Esq. Inc.

Transportation, Energy and 601 Dempsey Road Agriculture Section Post Office Box 549 Antitrust Division Westerville, Ohio 43081 Department of Justice 555 Fourth Street, N.W.

Washington, D.C. 20001 James P. Murphy, Esq. Philip N. Overholt Squire, Sanders & Dempsey office of Nuclear Plant 1201 Pennsylvania Avenue, N.W. Performance Post Office Box 407 office of Nuclear Energy Washington, D.C. 20044 U.S. Department of Enorgy, NE-44 Washington, D.C. 20585 Craig S. Miller, Esq.,

Director of Law June W. Weiner, Esq.,

Chief Assistant Director of Law William M. Ondrey Gruber, Esq.,

Aseictant Director of Law City Hall, Room 106 601 Lskeside Avenue Cleveland, Ohio 44115 Reuben Goldberg, Esq.

Channing D. Strother, Jr., Esq.

Goldberg, Fieldman & Lotham, P.C.

1100 Fifteenth Streets:N.W 4

. Washington, D.C. 20005 D. Biard MacGuAnec.s, Eng.

Volpe, Poskey ond Lyons

, .918 Sixteenth Gtreet, N.W.

! Washington, D.C. 20006

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Substantive Pleadings in:

Ohio Edison v. Zech (No. 88-1695 in D.D.C.)

1. Verified Complaint for Declaratory Judgment (June 22, 1988)

2. Defendants' Motion for a Protective Order and Memorandum of Points and Authoritics in Support (Aug. 8, 1988)

3. Plaintiff's Memorandum of Points and Authorities in Opposi-tion to Defendants' Motion for a Pratective Order (Aug. 19, 1588)

4. Motion to Dismiss (Aug. 22, 1988)

5. Defendant's Reply to Plaintiff's Opposition to Motion for Protective Order (Aug. 29, 1988)

6. Plaintiff's Memorandum of Foints and Authorities in Opposi-tion to Defendants' Motion to Dismiss (Sept. 21, 1988)

7. De f endar,ts ' Reply to Plaintiff's Opposition to Motion to Dismiss (Oct. 18, 1988)

8. Opinion transferring case to Court of Appeals (Dec. 15, 1988)

Ohio Edison v. Zech (No. 89-1014 in D.C. Cir.)

9. Petition for Writ of Mandamus (Feb. 27 1989)

10. Motion to Dismiss (Feb. 27, 1989)

11. Petitioner's Opposition to Motion to Dismiss (Mar. 9, 1989)

12. Respondents' Reply to Petitioner's Opposition to Motion to Dismics (Mar. 24, 1989)

13. Order and memorandum dismissing case (Apr. 27, 1989) 0439/281 mss.91

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA CHIO ED:SCN COMPANY )

76 South Main Stree )

Akron, Ohio 443C8, )

)

Plaintiff, )

)

v. ) Civil Action NbS- S95

)

LANDO W. ZECH, JR. , THCMAS M. )

ROBERTS, KENNETH M. CARR, )

KENNETH C. ROGERS, COMMISSICNERS, )

UNITED STATES NUCLEAR REGULATORY )

COKMI SSION )

Washington, D.C. 2055s, s

)

Defendants. )

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lH:VJ'CRR

• 8 VERIFIED COMPLAINT FOR DECLARATORY JUDGMENT Nature of the Case

1. Plaintiff Ohio Edison Company see;;s a determination by this Court of an antitrust issue. That antitrust issue is the continued imposition by the Defendants, the Nu;1 ear Regulatory Commission (NRC), of eleven antitrust l' cense conditions cur-rently constraining Plaintiff's busiress activities.

2. This Court n'as jurisdiction over this case pursuant to its general federal jurisdiction (28 U.S.C. 5 1331), as well as its jurisdiction over proceedings arising under "any Act of Con-gress regulating commerce or protecting trade and commerce I

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1 against restraint and monopolies" (28 U.S.C. S 1337). This mat-ter is ripe for the Court's consideration because of the NRC's inability to fairly hear the case due to an extraordi nary situa-tion arising from the congressional threat to legislatively over-rule the NRC should it grant Ohio Edison's application.

Parties

3. Plaintiff, Ohio Edison Company, i s a public utility in-corporated under the laws of the State of Ohio. Its principal place of business is in Akron, Ohio. Ohio Edison is a partial owner of the Perry nuclear power plant (Perry), which is located approximately 37 miles east of Cleveland, Ohio, s

4. Defendants Lando W. Zech, Jr. , Thomas M. Roberts, Kenneth M. Carr, and Kenneth C. Rogers are Commissioners of the United States Nuclear Regulatory Commission (NRC). Each of the defendants is sued in his official capacity. As used herein, the NRC also refers to those individuals acting pursuant to the Com-missioners' authority.

Jurisdiction and Venue S. The action arises under the Atomic Energy Act, Section 105 (42 U.S.C. 5 2'35).

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6. This Court has subject matter jurisdiction over this action pursuans to 28 U.S.C. 55 1331, 1337, and 1361.

7. The Court is authorized to issue appropriate dec'arato- .

ry relief against Defendants under 28 U.S.C. SS 2201 and 2202.

An actual and substantial controversy exists between Chio Edison and the NRC. This matter should not be resolved by the NRC. And currently, the NRC continues to impose on Ohio Edison the re-strictive business conditions which Chio Edison believes are un-lawful. In short, the parties have adverse legal interests of sufficient immediacy and reality to warrant issuance of a declar-atory judgment.

8. Venue is proper under 28 U.S.C. SS 1391(b) and 1391(e).

Statement of Facts

9. In 1977, the NRC granted the construction permit for the Perry nuclear power plant. At that time, there was a universally-held anticipation that nuclear power would place the owner of a nuclear power plant in an economically advantageous position in the marketplace as a supplier of electricity. Sec-1 tion 105(c) of the Atomic Energy Act (42 U.S.C. S 2135(c)) autho-rizes the NRC to grant licenses subject to restrictive conditions in order to avoid the likelihood of activities under the license creating or maintaining a situation in' consistent with the antitrust laws.

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10. Consequently, pursuant to Section 105 of the Atomic En-ergy Act (42 U.S.C. 5 2135), the NRC held a hearing on the anti-trust aspects of licensing the Perry nuclear power plant. Fol-loving that hearing, the NRC imposed eleven conditions limiting tne business activities of Perry's owners, including Chio Edison, in order to prevent creating or maintaining a situation inconsts-tent with the antitrust laws.

11. The expectation regarding the competitive advantage of large nuclear power plants that would generate power at lower cost was a necessary precondition to the NRC's impos.. ton of the Perry antitrust license conditions.

12. During the 1980's, trends'in the general economy had a large and adverse impact on the costs of nuclear power plants, including Perry. These trends included high interest rates and high inflation.

13. In addition, during the 1980's, nuclear power plants, including Perry, were faced with unanticipated, extensive, frequently-changing and costly regulatory requirements imposed by the federal government.

14. Because the actual economics of nuclear power as re-lated to the Perry plant proved to be different from those antic-ipated, Ohio Edison did not achieve and does not possess the 4-l

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competitive advantage from its ownership interest in the Perry nuclear power plant which the restrictive license conditions were intended to mitigate.

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15. Because the Perry nuclear power plant is not the eto-nemically superior source of energy that it was expected to be, the suspension of the restrictive conditions vould not cause the i

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licensing of the Perry fa:ility to create or maintain a situation inconsistent with the antitrust laws.

16. Consequently, on September 18, 1987, Ohio Edison applied to the NRC to suspend the restrictive conditions.

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17. On March 29, 1988, while Ohio Edison's application was 1

pending before the NRC, Senator Howard M. Metzenbaum (D.-Ohio),

)

the Chairman of the Subcommittee on Energy Regulation and Conser-vation of'the Senate Committee on Energy and Natural Resources, proposed Amendment No. 1913 to Senate Bill No. 2097, the proposed Uranium Revitalization, Tailings Reclamation and Enrichment Act.

i Amendment No. 1913 provided in its entirety that "The_ Nuclear Regulatory Commission shall not suspend or modify the application of any antitrust provision contained in the Perry operating license No. NPF-58, as such provision applies to any licensee of the Perry Nuclear Pceerplant, Unit 1." 134 Cong. Rec. S 3257 (daily ed. March 29, 1988) (copy attached as Exhibit A; videotape of proceedings attached as Exhibit B).

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18. After introducing Amendment No. 1913, Senator Metzenbaum stated in part:

The costs of building and operating the Perry nuclear powerplant have risen far beyond anything its evners ever anticipated. Nuclear power has not turned out to be the lov :ost alternative that they thought it would be.

d. at S 3257

19. During the colloquy that followed Senator Met:enbaum's proposal of Amendment No. 1913, Senator Wendell H. Ford (D.-Ky.),

a member of the Senate Committee on Energy and Natural Resources, expressed his belief that the Senate should not consider the pro-posed amendment until after the NRC had concluded its considera-tion of Ohio Edison's application, sSenator Ford stated:

If the official result is not as the Senator from Chio wants under this amendment, then he can come back at some later date and say to his people "This is what I am going to do if the NRC does not rule as we want them to under this particular amendment." . . . .

But I think we have an opportunity here to not do this subject to NRC's making the kind of judgment with the pressures being applied by the distinguished Senator from Ohio. That pressure is out there. It can be done. If NRC does not do it, then he has a right to come back and say "They did not protect my people and I want to do some-thing about it."

4 Id. at S 3258,

20. Senator J. Bennett Johnston (D.-La.), the Chairman of the Senate Committee on Energy and Natural Resources, agreed that the Senate should delay action on the amendment until after the

'S

NRC had concluded its consideraticn of Ohio Edison's application.

Senator Johnston stated:

I think there is a real desire to acccmmodate the Senator from Ohio on this ccmmittee. He .s a good friend, and he is a valued menher of the :cm-mittee.

But two of my colleagues new have spoken rather strong;y on this, and the NRC has ;,dicated tnat they nave no intention of approving th:s ap-plication.

With this record having been nade and with our strong intention stated to help the Senator just in case the action of NRC is not successful, I wonder if the Senator would consider withholding the amendment on this bill with the understanding that the committee will help him later on in case the NRC does not.

Id.

21. At various points during ,the colloquy concerning Amend-ment No. 1913, several Senators indicated that while Plaintiff's application was pending before the NRC, Congressional and NRC staffs apparently comrunicated with one another regarding the NRC's intent to deny the application.

22. During the colloquy concerning Amendment No. 1913, Sen-ator Metzenbaum stated:

I have a hunch that somehow (the NRC is}

monitoring what is going on on the floor here since it is not a private meeting since it is a matter concerning them and certainly the Congressional Record will speak to the de-bate, and I am saying here and now that if we can get confirmation, whether it is a final decision or not, that they do not intend to approve the application, I will join with the managers of the bill in urging that 8

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(Amendment No. 1913} be deleted in confer-ence.

Id. a: S 3259,

23. Senator Metzenbaum later stated that he vould "v;thdraw the amendment with the understanding that (ne] r.ll be prote::ed to offer the amendment at a later point." id.

CLAIM

24. The allegations of paragraphs 1 through 23 are incorpo-rated herein and realleged by reference.

25. As a result of the congressional pressure related to the threat to legislatively overrule the NRC should it grant Ohio Idison's application, the NRC is unable to fairly adjudicate Ohio

. Edison's application. In fact, the appearance alone of the NRC's inability to impartially consider the application is a denial of Plaintiff's right to due process.

26. Accordingly, while this case ordinarily would be decid-ed in the first instance by the NRC, the extraordinary circum-stances that have occurred compel consideration of this matter by this-Court.

27. Because the anticipated economic advantages of nuclear power did not materialize, activities under chio Edison's

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I cvnership license for the Perry nuclear power plant could noc

" create or maintain a situation inconsistent with the antitrust laws," even if unrestricted by the eleven antitrust license con-ditions imposed by the NRC in 1977-

28. Consequently, Plaintiff Chio Edison is entitled to the suspension of the restrictive conditions imposed on its license to own the Perry nuclear power plant.

WHEREFORE, Plaintiff prays that this Court:

1. Issue an order suspending the restrictive conditions to the Perry license as the conditions apply to Plaintiff, or, alternatively, issue an order d tecting the NRC to suspend the restrictive conditions to the Perry license as the conditions apply to Plaintiff.

2. Provide such further relief as the Court deems reason-able, just, and proper.

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VERIFICATION UNDER PENALTY OF_ LAW I, P.ussell J. Spetrino, Plaintiff's Executive Vice President and General Counsel, verify under penalty of perjury that the foregoing is true and corre e. Executed on ._m  ;  ; .- ; .

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wi/V / 'l , [1. '; ,

Russell J. Spetrfno ' ~

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Respectfully submitted, SHAW, PITTHAN, POTTS & TROWBRIDGE

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Dated: wA b i s N$3  % @ ./ k Girald 'Charn'of f

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Bar Nol 51276

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i Gerald Charnoff (

Robert E. Zahler Deborah B. Bauser Margaret S. Spencer 2300 N Street, N.W.

Washington, D.C. 20037 1

(202) 663-8000 1

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1 March .'S, MM CONGRESSIONAL RECORD - SENATE ness for the Corporation. The amend. S 32 7 The PRESIDING O FTICER. !!

ment airo establishes e fund atthtn there is no further debate. the ques- agreed mg breraein order to obtaaD IMr opnat ? -

the - Corporatton trito t hich D&D tion is on agreeing to the amendment-costa, recovered in the Corporation s These conditions hat-prtces and charges, are to be depostted. agreed The to- amendment (No. 1912) us competition in the sale of At tnis potat, there la a great deal of Mr. MET 2ENBAUM, Mr. President, forcms Ohio Edis uncertainty concerrung the ultimate I move to recortsider the vote by s hach utilities a hich own Petr costs of D&D. the arnendrnent sas agreed to- los in orcer to reta Applicable environmental standards Mr. McCLURE. I move to lay that s> stems as tastomek are not entirely clear. motion on the table.

The timtng of D&D ls not certain. Ohio 3 Edison. Mos eier* has aDDil The proy.cted cett of particular de. agreed to. The motion to lay on the table saa am Cmuun to be rehened of these antitrust conce contamattation And decommisslorung Mr. METZENBAUM.

actions can be projected, but not with ! thamt the managers of the bt' . Mr. President- g3' gg it mere successful the other P prectston. M erry I 4At unanunous consent that the um&Oly follos suit-Pur%nermore, the process of recover. pending amendment be temporar ly e la Electric illuminst;rg ing D&D cosu ts not discrete. In the laid aside, in order that the Senator "

future. the Enrichment Corporation from Ohio may offer an amendment +a at s shy the city of C'eseland has will be resting capital investrnent in a htch I understartd mill be accepted, filed a motion opposinr the Ohio new planta. At the appropriate time. The PRESIDING O m CER. Is n appheation pending Defere tu NRC. Cleveland s munterpal paaer plartta wiu have to be considered ajong none, andoblection?

the D&D costa associated with these there The Chair hears it la so ordered. s) stem ts all too asare of the poten.

s'lth the D&D costa of property tru. m rwousm no.seis taally disastrous results shach sound tlally transferred to the Corporation.

In short, the process of funding the (Purpose To prohibit tne suspension or '$n E s requnt.

D&D costa of the Corporstion's prop. modificauon of the =coticsuon of ariu.

trust prons4ons appinesoie to any neen.,, Such a dectaton by the NRC sound erty stil necessarily be an iterstive of the PefTy Nucear Powerolant. OH) essentlany hold au ratepayers in one. The estimate of D&D costa that Mr. METZENBAUM. Mr. President, n rthern Ohio captive to the risant-the Corporation seets to recover wtu 1 send an amendment to the dest and rates of a few utilities that osm the have to be periodicany recalculated as est for its trnmediate considerrtion. Perry nuclear plant, snich has now provided in the amendment. At any The PRESIDING OF71CER. The turned out to be very expenaln, stven potnt. the estimated unfunded amendment stu be stated. The costs of building and operating cost of D&D win constitute a prospec. The otti ciert read as follows. the Perry nuclear powerplant has e tive cost of dolns bustness to be recov. The Senator froen Ohio Mr. usys. risen far beyond anything its osmers cred from customers-including the smal proposes an amenamen(t numoered ever antletpated. Nuclear powe Department of Enerry-Ln prices. 1sts, not turned out to be the low cost alter.

Nevertheleas. certain rules Mr. MI.TZE B AUM. Mr. President. native that they thought it would be.

apply. Section 1500 of S. 2097 provides wtu ! mast unanimous consent that reading Now thcae omTiers want to escape in effect that prtces to commercial cua. of the amendment be dispensed with. the consequences of an unfortuna:e tomers shan be set at market leveta, The PRESIDING OmCER. With, business dectston-a bad investr=ent.

with the goal of recovering casu. out objection, it is so ordered. They want to trsasfer their burdert whereas prices to the Departrnent of The arnendment ts as follows: from the shareholders to the ratepay.

EnerTy shall be set strtetty on the At the sopropr ate place, insert the foi. ers, by getting out from under tne basta of cost recovery. This distinction lowtne new secuon, ortgtnal terms of their license.

is preserved with respect to the recov. sec. G Punav Noct.sAa Powanuv AmT1 Il is Quite simply unfalt to deny mu.

ery of D&D costa in the Ct,rporation's "" #**'T"Me Nuclest h a. nicipal power systems the option of prtees.

tory Ceaumenton shall not euspend or supplying low cost. alternative poser in addition, the amendment provides - eonta e P ffy that, with respect to property used in cones No. NPP.ns. as suen orovtsionr7tns soones t ' .'Yd thettDI customers. And the fact u.

the production of low.aasay sepasstive to any tassesse of the Perry Nucleat Power. t .'m a'vera"g*e'd*

. Ohio'sChD" municipa D"**#'l pos e wortt. the Corporation may only recov. plant. Unst 1. systems provide power which is suo.

er D&D costa from commercial eus. Mr. METZENSAUM. Mr. President, stantially less expensive than that sold tomers and the D*partment in propor. I am offering an amendment which oy investor. owned uttities.

.tton that to the amount of separative wort prohibita the Nuclear Regulatory For example, pubite power custom.

has t,een produced for either ' Commimion from !!fting the antitrust ers in Cleneland pay approximately 20 during the life of the;roperty. In the conditions imposed on the uttisties percent less than utthty customers-case of property used solely in the pro- which are licensed to operate the those served by CE!.

duction of high.aasay separative work. Perry Nuclear Powerplant in Ohio. And that gap sill only grow as more D&D costs would only be recovered TW amendment will protect the of Perry s costa are incorporated into from the Department. This allocation electrtetty - consumers in northern rates.

aasigns cost responsibility trtwen the Ohio from unfatt rate inerenses due to In fact. on a stateside basts in Ohio.

- two customer classes according to his. the Perry nuclear powerplant. municipal power . systems scil power torical benellts received-measured in - Under the current terms of the that ts 20 to 30 percent enesper than-terms of work performed. Perry nuclear plattt license, the utill, power sold by intestor.osned utilities.

Ptnally. the amendment provides for ties which own Perry are required to Tsenty.one cities located in On40 the Corporstion to enter into contrset carry power for muntetpal power sys. Edison s sersice territory could face for the performance of actual decom. tems (Muntal located within their higher rates if the Ohio Edison re+

mtsaioning and decontarrunction and serytce territortes, quest ts approved. Includmg Amnerst, for the Corporstion to pay the D&D This (Alows these local power supply Beach Cit y, Brewster. Cotumniana.

costa for such property out of the fund systems to shop around for the cheap. Custar. Cuyahoga Falls. Galion. Graf.

Created for such purpose. After decon. est avulable power, provtdtng compets. ton. HucDard. Hudson. Lodt, t.uc u.

tamination and decommissioning la tion to the owners of the Perry plant. Milan. Monroesville. Neston Falls.

performed the Corporstion conveys thus helping to keep rates lower. Niles. Oberlin. Prooect. Ses ille. South the property to the Secretary. This requirement to carry power s n.s Vienna. Wadstorth and Wellington, Mr. President. I thAnk this la an tm. one of several antitrust condittens im. In sum. I believe that the osners of provement It. of the bill, and we support posed on Perry's owners in 1978. It was Perry must be held to tne original part of the deal which Perry's owners terms of their license, and snould not EXHIBIT A (Page 1 cf 3)

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S 2358 CONGRESSIONAL RECORD- SENATE

' be allowed to forte rtlepayere to Pirst. I to riot vtat any fmpDettfon .VareA a ;py >

thoulder the costJ of their mist 4&er Mr. President. Il ta my understand. thE1 I 6pprove the reeuft. because ! am thmg as it re!&ted to st..eting g nng thht Uus amwidtnent W hace9 table not at til certain thtt this Senator sp' cow ae are 58 ting to N!tC s to the managers ed the btl!. proves the result. Thts deals with some 3o128 to abatidaQ or reduce & hee Mr. JORNSTON. her. Presleant, we Questions th6t really ought to be litt. or thateter. and Lt is a problem t gated between parties some of whom tre willhag, witA 3Mme rinsentiens, to hate alteadY m6de an 6pgllcathm I rteld to my fetend and e Would not hate to be m accept this ameadament. It as one of before the NRC to have thett rtshta gVished rhairman ind uk s hat those haveusmessa wtsast the result is - protected in the NRC. We tre short* prefers tri ini.s particu:ar cue deedh good but the precedent Is est partJew circutting' that prottsu. in whktl the he has a let of se:ght Eth rua reEcn hrly stod Mr. pec;)le would have the opportunity. in sithl6ty and tf fu he a wm a'.

President, this amen *mant an open forum. to present their views. then g ne, woWd prohibst NRC from suspending pruent er case, and teet a revolu' But I th!nt se t.ase a?t ocportunity or thodtfymg harArust peeramns con. tion OI 11 Th&4 #e Err do6g. tnstead here to not do this suoiect to N7C a talmed a the operaung noense for the of snowing that process to be done in rntAlns the kmd of judgment su the Perry Nuclest plant. Tte EntJtrust the open procerses before the NRC, ts cressures bems apphed by the hun.

proela6ans

• reqWre investor owned 11 to st4's in by legtslation and me'iotte guished Senator from Otuo, That prea.

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• sure !A out there. It can be done. jf

' "' As saad.

One o' f the Perry %s=aes. Ohno unat NRC would ultantaely dec$de to r*ghtthas very weft might be NRC does not do it, then be haa a

^*% to come D&ck and say. 'They d.d ws.tve the Co., has - peuucced wheeung NRCastotoa(h recturemsat Dut tr EUy the parties wciuld have had not protect my people and ! sant t in court the w h do something about IV' LMf. The company as currectly pro. 3 Now. the procedure is golcg to be viding wheeling to Ita munachpal ctas- they toWd We hd their e e!!rninated. and I sin somed about toanars. Oblo Edneen anserts that tae porturuty to debate the h hey the procedure in the future.

4 &nht concem em based woWe nave had an oppaesunity to on W masumpucn that noclear power have a remannad resoluuon of the Senator from 14ulalana. N MMN OmN The would be "too eneap to meter." a pet. tasuas by the trtetsnal which we have Mr. JOHNTION. Mr. President. I estatsahed by he to headle these thmt there is a real destre to amota+

sumodon Ohlo Edlaonha sadhas not proven true'mu* kinds of teeues. There are sonne neues modate the affecaed nicasMtles ue currenMy in setuemment tavolved here. committee. He is a good triend. and ha negottaMons concerntas the ceae. So. to say that if we accept h k a valued member of the conusuttaa Th181s an ongelos contes &ed. mM" Emendrnent offered by the dist2n. Bltt two of my colleagues now hase catory preamung before a regulatory sutahed Sertator from Ohio, we can spoken rather strongly on ttda, sad agency. Congress occastonally directs wen say this la a preceden&--I wouM the NRC has indlested that they tme the result of agency detortgirant&oe in certainly stih to say that, but for the no intenuon of approving uus appuca-concontested mattars. Osdy rarvty Senator from Idaho il la not a prose. tion.

does it lagnalate the riariafan in a con- dent. As a mhr of fact. I do not une With this recort! havtns been made tested case. Generally, this would only the result, or at least l'am not sure !

occur as the result of a poucy inaus. Itka the result. I certaudy de not imetoand helpwiththe our Senatorstrong tatention just in case attled the tive that has had the fun benellta ofresult the proctes of trying to maMate a action of NRC ts not successful. I heartnss and comnutiee cons &deration. before the parties hee had wonder if the Senator sould conandar Here = with this amendament we cottrt. their coportunity and their day in a11.hholding the amendroent on t.tus would be gratuhusly inlerfaring tith bill with the understanding tttat the agency adjud'caUott Thla is a mattar I think Lt la bad for us to do that, commHtee wiu help tum tatar on in commtttad to the NRC Without et, and 1 &an more than a lutie bet can. case the NRC does not.

preentng any optalon as to the merita carned about the form of the final run. Mr. McITENBAUM. Might I make of the controversy why don't we let. otution, botanee I think there are a countertuggestion to my friend tho the NRC decide na they att suppose to eense goesuans with sispect to wheth. is a cht.trmatt of the cornnuttee and do? er er met this is the proper resolution. the rankjng member? I sould like to Prankty, The PRMLNO OF71CER (Mr. ast whether he would be S1111ng to NRC and they any the result is OK.we naety. hate spoten to the - Dancuttah - Thethe Kan. accept Senator arnendment- frombetseco now Where the result to OK and where (Jae ar'd the time the matter geta to the Senator from Ohio wants that readt, the Mr. FORD.

Ramose thatMr.

thlaPreetdent.

Senator wtliI not state ori conference committee < and I wu

' and the NRC does not object. I do not assume there will be a conference com-think et should kt the precedent of =mahdar this as a proevdent trt raaking mittee that ! perhaps may be in a 90-this anatter interfere. nts should not has dociaton as it relates to this sueject sition to octatri some confirTnsuon be a precedeset in ftarther cases. Thart. saatter in the future. from the NRC as to how they mtend fore. we will not o6Joet. I haev voey. very settous reservatJons to d:.spose of the pendmg maater, and Mr. McCLURE Mr. President.1 ftud - my disttngutshed friend. The dfst.tn.about the procedure here. I agr myself in kkad of an avtward peeftfon here. becaese, frankly. I do not Itke gutshed Senator from lautstana said ray aboutto the Senator highly escalaungI am rates concerned.

in the the amendament. I am not certain that we are coneversed about the prvendent. northern Ohio sector. I am concerned I dlalike it enough to take the time of !! would be my judgment that thia furt ? ar that taere ass a coaututment the Sens24 and emene the diffleuttJee amenement could be laid out there, mat 1gtn&Uy by t.he poserplant.

!! the offletal ftsuh is not as the and I> suggesung that he take the that would onene assendument. if wehace We sould contested to 30 the Senator from Ohio wanta under this amendment and let me see ti se thrweh the effort of tentanthw the matendment. then he can ecme Dact at cannot get some conftrmauon from some later date and say to hir people the NRC, sanswitamat and taktng the tasse to de '*Miss is what I am gotng to do if the The Senator just indicated that the S

so. Art I am troeMed shas hast w%h the - NRC does not rule as weNRC precedent. _

wtathas them to to tum thar. tney do stated I have team tam that IL la quite urwier this particular amendment."

That woun( .be one suggesttori ! not intend to approve the apphnrum ,

)

likely that this amerusment may ae- might ha M. but we are gett2ng into an s'.af Mr.f. JORNsTON. Not to me. but to comrm wttar.

tumw dame la the =m-ma, IgRC protaMy would area here that we have arToed a long Mr. Mr!TENB AUM. To staff. nat of the time and the etstinguisned Senator ts even better, and tbat being the casa.

enemmsessent.

asset ces Lt1mmen. aut I asa sumcerned from Ida?.o and I sent steeptse perhaps 1 can set them to confirm it nights here trytng to work ont some. to a Senator as well. that '> ems me.

EXHIBIT A (Page 2 of 3)

March .'S, Mii CONGRE5510NAL RECORD - 5EN ATE 3yg and under those etreamstances I sometime tomertos to perhaps run a sonder it se etnnot sort it out, c h ec a. tonight and sou;d start alrean en t if the Senator 3111 tecept it and see if I can get that confirmation. Mr. MEMENBAUM. That ts all Brseley rig ht.

Darts smencment to Mr. EVANS Mr Presiden c a. e Mr. JOHNSTON. Mr. President. I t!nder those circumstances. I sin cer- Domenact amendment been la$d cos-i am adstsed that this has the stattu of tainly pletaed to be to accommodattng Mr. McCLURL Amendment N' a strong rumor and not an actual The Senator LS trytng acconvnodate1465Mhas r.

been lod dosm statement. me. I wtU withdraw the amendment EVANS The Senator from Mr. McCLURL Mr. President. Lf the with the understanding that I mill be Idaho sould lik e L . mue a bnef Senator will yield. I guess the major protected to offer the 4.mendment at & speecn on the opening of th.at reservation ! sould have s1th this sug. We etn lay dosn the ammem w.

gestion tne Senator from Ohio hu later Mr. potnt'LWL McC  ! thank the Senator-mght if you s tsn. We s ere sott.g to made ts tnat oftentimes s hen there is Mr. ME'T7.ENBAUM. I thant the s an until some of the debate had oc.

action penet m the Congreas par. Senator. curred on behalf of the Domeniet ticulart if a ts ptssed m a ecmtmtte, M r. President. I s1thdraw 'he amendment or amendment 1465 but :t

- w one body of the Congress En ad, ame am does not mate very much d2fference u mtmstratise agency sill suspend any PR !DINO OFTICER The f ulay u se tre cwemd as to a nen s e further proceedings sith respect to arnenament Ls withdrawn. it domn the applications that are before it. I do um an no s u s Mr. JOHNSTON. U the Senator not thint that ts that the Senator Mr JOHNSTON. Mr. President., the sould yield. I thmt that frtnaty a;l from Ohio ts suggestarts either, pendmg amendment s hich ts amend. of the debate could occur on the B' rad.

Mr. METZEN B AUM. No, just the ment 1465, puts bact into the bill that 1,y.Es tna amendment temorrow and oppostte. I am suggesting that they portion dealtng with chartes for the there a.re 3 hours3.472222e-5 days <br />8.333333e-4 hours <br />4.960317e-6 weeks <br />1.1415e-6 months <br /> proeided on that mos e f ors ard sith dr.spatch. use of foreign uramum shich were Mr. McCLURL Wit) the Senator Mr. McCLURE. I am not certain tasen out of the btll in order to sattafy yg, g now s e best get that accompitshed be, th o objections of the Pt. Mr. JOHNSTON h cane if se passed an amendment they *y(ur Mr. McCLURL l' am trymg to ucer.

may bety tell stop proceedmgi rather  %'htt it does is'it creates a schedule tam now whether the Serstor from than speeding up. of .arges for the use of foretsm uttru. g,, g,,3 g g ,

Mr. M1TE.ENB AUM. I have a hunch n m ' '

gg g g g that somehow they are momto-tn8 n tfor e of t for. Mr. EVANS. That would be perfectly til right' that ts going on on the floor here [the since it I.s not a prisate rneeting since of ore um Would the Senator from Iout.usna it ts a matter concermns them and cer- excess of 37% percent. In other wc *da, l!1e us to lay down our amendment at taArtly the CONctissioNu Recota stil the first 37% percent of enriched urt. this time or wtitt spent to the debate, and I am sartng nium may be used in reactors 31thout Mr. JOHNSTON. Perhape tf we here and now that tf se etn get confit. a charge, and aboet the 37% percent could ask that you lay it down at the mation, whether at is u (Lnal dectston there is a suding fee depending upon end of such debate as we would have or not, that they 00 not intend to ap. the percentage of foreign urtniurn to tonight. so we could start afresh on it prove the application. I stil lotn with be used. tomorrew, the managers of the billin urgmg that Most of the existing contrtets for Mr. EVANS. Assuming that the it be deleted in conference. the use of forelgu urttuum are grand, debate and action would not be exten, Mr. JOHNSTON. Mr. President. I f athered and the 37 % percent exemp. si n thtrtk I probably misspose myself ear. tion is valid until 1994 and it ts $0 per. Mr. JOHNSTON. Of course. there is lier by stating as a f act that we had cent theretiter. The charges captre in a time agreement anyway.

such confirmation trorn the NRC, 3001. It creates rules for what we caU Mr. BRADLEY. Wld the Senator nag.swapptng between different lota Field?

Staff advises me that it ts more in the nature of a judstnent and rumors of uranium and that is where urattlum Mr. JOHNSTON. Yes.

14 foreign owned but m.my not physical. Mr. BRADLET. So it sould be your rather than confirmation because ly move. So it is a cornplicated system intention to discuss the Dotneraci indeed will not in teua you pendmgshALcase they they are gotng simply that is dealt with under what we can amendment that is now periding. ttme to do. nag.ewapping, sould expire on that. and the amend.

It deletas section 161v of the ment of the Senator from Wuhtngton They have not told my staff, my Atomic EnerTy Act which limits en- and the Senator from New Jersey staff has now advtaed me, and they richment of foreign uranium. That ta sould be laad dosm and debate on that sould not tell even us. We can prett7 the proviston I referred te earlier that a ould occur tomorros*

sell figure out what they are goms to requires that we maantain a oble do.

do. I s ould not want to make the with, mestic urtnlum mtntrts indurtry. And ourMr. JOHNSTON. Yes. that sould be destre.

drat al of the amendment dependent that Drortston, of course. 1817 ts Mr. GR ADLEY. That ta fine.

on getting the NRC to say what they presently in Uttgation. Mr. EV ANS. That ts f tne.

are goms to do in a pending case be- So. Mr. President. I think that ade.

cause they will not teu us.

quately explains the n.rnendment.

Mr. JOHNSTON. We have sent for the majortty leader. If he blesses our Mr. MET 71NBAUM. Does the man- Mr. President, for the benefit of agreement, se can tell Senators there ager of the bill have u nen the NRC will be teting' any ides as to Senators. I third the fouowing ta a stu be no further votes torusht.

plan that the Senator from Idaho. Mr. Mr. McCLCRE. But f.e has not yet know.Mr. JOHNSTON. The sta!! does not McCLcraz. and I wou.ld Itte to follow. done so.

Senator McCLtnts would like to mate Mr. JOHNSTON. That is right. he Mr. MEPl.ENBAUM. In a matter of a brief speech, maybe 10 minutes, on has not yet done so.

thts Etnd would it be within a weet, a the pending amendment. Then we I yteld the floor, month. or a year?

would Itke to put the matter over until M r. McCLURE. Mr. President. I Mr. JOHNSTON. I do not know. tomorrow, subject. of course, to the s tnt to spent very brtefly stih respect Mr. McCLURE. I wonder if the Sen. majortty leader's concurrence. and to the pending amendtnent and recos.

ator from Ohio could accommodate us perhaps in the meantime lar down the ruze that thts La only the opening Seo to thts eatent and that would be to Brsdley Evans amendtnent ehich has in the longer debate thtch stU occur withdttw the amendment with the a 3.hout time agreement and start when the Evans-3radley amendment hght to offer it again before we con- that tn the morntng about 9 30. La offered.

clude the conalderation of this bill on If we could do that. that would mean We have in this Nation a uranium the nooc, ana that wiu stvo us untu we would hane not votes on this blu industry that is down for the final EXHIBIT A (Page 3 af 3) i 1

e

_ _ , _ _ _ _ _ _ _ - - - - - - - - - - - - - - ~ --~~

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OHIO EDISON COMPANY, )

)

Plaintiff, )

)

v. ) Civil Action No. 98-1695 CRR LANDO W. 2ECH, }R., et al.,  ! FlL E D

)

Defendants. )

AUG y

g yg-DEFENDANTS' U-% U.R Dim m o MOTION FOR A PROTECTIVE ORDERDCcr or %.[.[.

Pursuent to Rule 26(c)(1? of the Federal Rules of Civil Procedure, defendants move this Court for the entry of an Order staying all discovery, including the discovery sought in plaintiff's Interrogatories and Request for Production of Documents, until further Order of this Court.

In support of this motion, defendants refer the Court to tha accompanying memorandum of points and authorities. A proposed Order is also submitted herewith.

Respectfully submitted,

% 4f WWkA4 tl JAY / B ./ STEPHENS ; DC Bir ' # 17 7 84 0 United States Attorney kL W JOHN D. BATES, DC Bar #934927 Assistant Uni,ted States Attorney i V

h. U W)Db s )

WILMA A. LEWIS, DC Bar #358637 Assistnnt United States Attorney OF COUNSEL:

PETER CRAME l GERALDIllE FEH3T Office of the General Counsel l Nuclear Regulatory Commission

?

l

/3

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OHIO EDISON COMPANY, )

)

Plaintiff, )

)

v. )

Civil Action No. 88-1695 CRR LANDO W. "ECH, JR., et al., )

e. I L E D Defendants. l AUG g 1933

)

W 04 OtSTRcy q MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPOR W OF DEFENDANTS' MOTION FOR A PROTECTIVE ORDER Defendants hereby move this Court for a protective order staying all discovery, including the discovery sought in plaintiff's Interrogatories and Request for Production of Documents, until further Order of this Court. As discussed more fully below, defendants expect to respond to the complaint herein by filing a motion to dismiss this case on jurisdictional grounds.1/ Accordingly, all discovery should be stayed until defendants have had an opportunity to file their dispositive motion and to obtain a ruling thereon.

I. BACKGROUND On June 22. 1988, plaintiff filed this action seeking to have this Court adjudicate its application for the suspension of certain antitrust conditions imposed by the Nuclear Regulatory Commission ("NRC") on plair.tif f'r license to ope'cate 9 nuclear l power plant located near Cleveland, Ohio. While claintiff acknowledges that its a p p .I i ' '*'an O pte0ent1) if - 1ina !ofu -

l 1/ Defendants' response to the complaint is due to be filed on August 22, 1988.

the NRC without a final agency determination, plaintiff seeks this Court's immediate intervention on the grouno that congressional pressure has made it impossible for the NRC to fairly adjudicate the application. See Complaint at 11 16, 25-26.

Tooether with the complaint, plaintiff served its first set of Interrogatories and Request fcr Production of Documents. See Exhibit A attached hereto. Because discovery in the face cf defendants anticipated dispositive motion is inappropriate, defendant;' motion for a protective order should be granted.

II. ARGUMENT tnder Rule 26(c), Fed. R. Civ. P., courts have broad dis cretion, upon a showing of good cause, to deny, lirit or qualify discovery in order to control the discovery process and direct its conduct. See, e.g., Celanese Corp. v. Duplan Corp.,

502 F.2d 188, 190 (4th Cir. 1974), cert. denied, 420 U.S. 929 (1975); Gallell_a v. Onassis, 487 F.2d 986, 997 (2nd Cir. 1973);

General Dynamics v. Selb Manufacturing, 481 F.2d 1204, 1212 '8th Cir. 1973), cert. denied, 414 U.S. 1162 (1974). Based on this authority, courts have routinely deemed it appropriate to stay any discovery pending the outcome of preliminary issues which are potentially dispositive of the case and wnich may therefore render the discovery request moot. see.. e.a.. Marrase v.

6merican Academy of Orthopedic Surgycn_s. 706 F ;j 1499, 149a (7th Cir. 1993). Brennan i l 'o l m

• A "9to'ti+*i Brotherhood of Teamsters, 494 F.2d 1092. 1100 (D.C. Cir. 1974),

cert. denied, 429 U.S. 1123 (1977); Defensive Instruments, Inc.

l

! 2 i

v. RCA Corp., 385 F. Supp. 1053, 1054 (W.D. Pa. 1974), aff'd, 530 F.2d 963 (3rd Cir. 1976); 8 Wright & Miller, Federal Practice and Procedure, Civil 5 2040 at 288 (1970) As the Court noted in O'Brien v. Avco Corp, 309 F. Supp. 703 (S.D. N.Y.

1969)-

(W] hen, as here, the determination of a preliminary question may dispose of the entire suit, applications for discovery may properly be deferred until the determination of such questions.

Id. at 705; see also Allied Poultry Co. v. Polin, 134 F. Supp.

278, 279-80 (D. Del. 1955) ("[W) hen the jurisdiction of the Court is challenged or denied, it is the duty of the Court ..

to determine the question of jurisdiction before proceeding with other aspects of the case.").

Defendants submit that the authority exercised by the courts in the foregoing cases to control the discovery process should also be exercised under the circumstances here.

Defendants intena to respond to the complaint by filing a potentially dispositive motion that will challenge this Court's jurisdiction to entertain plaintiff's claim. Since a favorable ruling on defendants' motion would obviate the need for the discovery that plaintiffs seek, to allow discovery to proceed at this time may well place en unnecessary burden en the defendant and grant the plaintiff a useless remedy see sinclair Fefining C_o . v.

Jenkins Petroleum P re m- r+ 2A9 "~ .

6"' ^3 i 1" *

("'The principle of judicial parsimony' if nothing note condemns a useless remedy"). Accordingly, this Court should 3

exercise its authority to stay all discovery until defendants have filed their motion and this Court has had an opportunity to rule thereon.

For the foregoing reasons, defendants' motion for a protective order should be granted.

Respectfully submitted,

__._!r, eb $h Us?

JAY B/ STEPHENS, DC Bar #177840 United States Attorney i Y-JOHN D. BATES, DC Bar #934927 ~

Assistant United 'States Attorney

/h o ,Q b\- h. u

/g t; i WILMA A. LEWIS, AC Bar # 358637 Assistant United States Attorney OF COUNSEL:

PETER CRANE-GERALDINE FEKST Office of the General Counsel Nuclear' Regulatory Commission 1

4 l

g y , . - - - + . -.w _ _ , w , - y.s,.e y-- - . . A mi~q ,

p--

CERTIFICATE OF SERVICE I HERESY CERTIFY that a copy of the foregoing Defendants' Motion For A Protectivo Order, Memorandum of Points and Authorities In Support Thereof and proposed Order was mailed first clad =, postage prepaid this $4/1 day of August, 1989 to counsel for plaintiff:

Gerald Charnoff, Esquire 3 HAW, PITTMAN POTTS cnd TROWBRIDGE 2300 N Street, N.W.

Washington, D.C. 20037 1 -

/ h,ra U -56%

• WILMA A. LEWIS, D.C. Bar #358637 Assistant United States Attorney Judiciary Center Bldg. - Room 4116 555 Fourth Street, N.W.

Washington, D.C. 20001 (202) 272-9208 l

l 3 l .

i l

.4-JUN 22 898

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OHIO EDISON COMPANY )

76 South Main Street )

' Akron, Ohio 44308,- )

)

Plaintiff, )

) -

v. )

)

Civil Action No. SS-1895 L ANDO W. -- Z ECH , J R . , THOMAS M. )

ROBERTS, KENNETH M. CARR, - ).

KENNETH C. ROGERS,-COMMISSICNERS, )

UNITED STATES NUCLEAR REGULATORY )

COMMISSION

, Washington,-D.C. 20555,

. . ) EILED

)

> AUG De f e'nd a n t s .-- .9 1988

)

+

)

CumK,U.a camact OF m #

%q

~- .

PLAINTIFF'S INTERROGATORIES AND REQUEST FOR-j PRODUCTION OF DOCUMENTS Pursuant to Rules--33-and:34 of-.the F,ederal-. Rules of Civil Procedure, Plaintif f Ohio Edison Company: requests- that ~Def endants ll 1

.ansvar-in-.vriting,-and under oath-or affirmation, each of the following interrogatories separatelyLand-fully,.and produce and permit inspection and copying of the original or-best: copy of all

'documentsildentified in the responses to the interrogatories belov..

E.XHIBIT "A" m w-, - - s. .-,r.- n.,.. - __-,M

L

\'

i 1 s l

l DEFINITIONS As used herein,

'1) The term "or" means "and/or".

(2) The term "between" means "between or among".

(3) The term " document" shall include the original and every non-identical copy (wherever different from the original because of notes made or. such copy or othervise) of all notes, minutes of meetings, letters, telegrams, memoranda, reports, transcripts of telephone conversations, and all other documents or material of any nature whatsoever, together with any drafts thereof, attachments thereto or *nelosures therewith, and all other photographic and ret- .able data (whether encarded, taped, videotaped or coded electostatically, electro-magnetically or otherwise) in the possecsion, custody or control of Defendants.

(4) The term " communication" shall include (i) all docu-ments (as defined above) and (ii) all oral statements, comments, questions, conversations, colloquies, discuss. ions, announcements, lectures, and other oral communications of any nature whatsoever (whether conducted in person, by telephone, or otherwise).

(5) The term " person" means (i) any individual, corpora-tion, partnership, firm, association, trust, public or private institution, group, any State or any political subdivision of, or any political entity within a State, and any department or agency of the United States Government (including the United States

Senate, House of Representatives, or any subdivision, committee, or subcommittee thereof) or any other legal or business entity,

/

and (ii) any legal successor, representative, agent, staff member or agency of the foregoing.

(6) Wnen used in reference to a document, the word "identi-fy" means to (1) state the nature and title of the document, (ii) identify the author or preparer of the document, (iii) identify all persons who received, read, saw, reviewed, or commented on the document; (iv) state the date or dates of the preparation of the document; (v) state the substance of the contents of the document; (vi) state the present location and custodian of the document, together with a statement of its disposicion if it is no longer in the custody and control of the Defendants.

(7) Wher, used in reference to an oral communication, the word " identify" means to (i) state the time, date, location or locations, duration, method, and circumstances of the communica-tion, (ii) identify all persona involved with the communication; (iii) state the substance of the communication, including who communteated what to whom; (iv) state the purpose of the communi-cation; and (v) identify all documents referring or relating to the communication.

(8) When used in reference to an individual person, the vord " identify" means to state his or her full name, professional affiliation and title, and his or her last known business and home address and telephone number.

\

(9) The term "NRC" includes (i) the Nuclear Regulatory Com-i mission as an agency of the United States Government, (ii) all Commissioners of the Nuclear Regulatory Commission; and (iii) all persons employed by the Nuclear Regulatory Commission, including all members of the NRC staff.

(10) The term "Amendman: No. 1913" means the proposed legis-lation offered by Senator Howard M. Metzenbaum on March 29, 1988, and providing that "The Nuclear Regulatory Commission shall not suspend or modify the application of any antitrust provision contained in the Perry operating license No. NPR-58, as such pro-vision applies to any licensee of the Perry Nuclear Poverplant, Unit 1."

(11) The term " Ohio Edison's application" means the document entitled " Application to Amend the Perry Operating License To Suspend the Antitrust Conditions Insofar as They Apply to Ohio Edison Company" (Docket No. 50-440A) submitted by Ohio Edison Company to the NRC on September 18, 1987 INSTRUCTIONS (1) If any information or document requested is not fur-

nished because of a claim of privilege or attorney's work prod-uct, state with.' particularity the nature of and the complete fac-tual basis for such claim.

t l

l I l

N -

i

(2) If any interrogatory or document request is claimed to be otherwise objectionable, state with particularity the nature of and complete factual basis for the objection.

(3) These interregatories and this document request are deemed to be continuing and, accordingly, must be supplemented to the extent requ. red under Rule 26(e) of the Federal hules of Civil Procedure.

(4) The requested documents are to be produced in the same form and in the same order in which they existed prior to produc-tion. The documents are to be produced in the file folders, bindings, or other containers in which the documents are found.

The titles, labels, or other descriptions on the boxes, file folders, bindings, or other containers are to be left intact.

INTERROGATORIES (1) Identify all persons within the NRC who have reviewed or commented upon Ohio Edison's application.

(' Identify all persons not within the.NRC who, to your knowledge, have reviewed or commented upon Ohio Edison's applica-tion.

(3) Identify all persons within the NRC who conducted, pre-pared, particip ted in, received, or reviewed any conmunication relating to Amendment No. 1913.

_ _ _ _ - - - - - - - - - - - - - - - - - ~ ~ ^ ' ' ' ^ ^ ^^'~~~^^~~^' ' ~

\; i l

(4) Identify all persons not within the NRC who, to your knowledge, conducted, prepared, participated in, received, or re-

-viewed any communication relating to Amendment No, 1913.

(5) Identify all intra-NRC communications relating to Amendment No. 1913.

(6) Identify all intra-NRC communications relating to Ohio Edison's application.

(7) Identify all communications between the NRC and all persons not within the NRC relating to Amendment No. 1913.

(8) Identify all communications between the NRC and all persons not within the NRC relating to Ohio Edison's application.

(9) Identify all communications of which you are aware be-tween persons not within the NRC relating to Amendment No. 1913.

(10) Identify all communications of which you are aware be-tweer, persons not within the NRC relating to Ohio Edison's appli-cation REQUEST FOR PRODUCTION OF DOCUMENTS Plaintiff requests that Defendants respond in writing to this request for production of documents and produce the original-or best copy of each of the documents identified or described in-the ansvers to each of the above interrogatories, at a place mu-tually convenient to the parties.

4 Dated: \. M 1hN Respectfully submitted, SH W, PITTMAN, POTTS & TROWBRIDGE 1ea Tera'id"Charnoff Bar

4. 51276 Gerald Charnoff 'l Robert E. Zahler Deborah B. Bauser Margaret S. Spencer 2300 N Street, N.W.

, Washington, D.C. 20037 (202) 663-8000 e

e N .

_ __ _ _ _ _ . _ _ . _ _ _ _ _ _ - _ _ - - - ----^

7

\* t i

CERTIFICATE OF SERVICE I HERESY CERTIFY that a copy of the foregoing Defendants' First Notice of Filing has been mailed, firLt-class postage prepald. '

this hh'/ day of August, 1988 to:

Gerald Charnoff, Esquire SHAW, PITTMAN, POTTS and TROWBRIDGE 2300 N Street, N.W.

Washington, D.C. 20037 I  : & L,s~

./

[ hbh_ M4/A ~

WILMA A g EWIg( D.C. Bar #358637 Ass (3Aant United States Attorney United States Attorney's Office Judiciary Center - Room 4116 555 - 4th Street, N.W.

Washington, D.C. 20001 (202) 272-9208 i

l l

l

, ,_. ,- 4 - - + ,

IN THE UNITED STATES DISTRICT CCURT FOR THE DISTRICT OF COLUMBIA CH10 ED! SCN COMP ANY , )

)

Plaintiff, )

)

v. ) Civil Action No. 38-1695 (CRR)

)

LANDO W. ZECH , JR. , et al 2, ) E I L E [)

)

Defendant 4. )

7gy ggg utlifK, U.S ;FTRICT COURC Dit:MilCl UF @wMBLA PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS' MOTION FOR A PROTECT!VE ORDER Defendants have moved for a protective order, pursuant to Rule 26(c)(1) of the Federal Rules of Civil Procedure, staying all ciscovery in this case until the Court har ruled on their intended motion to dismiss. For the reasons stated below, the motion for a protective order should be denied.

. Rule 26 provides that, "for goed cause shown, the court t

. . . may make any order which justice requires to protect a party or person fror, annoyance, embarrassment, oppression, or undue burden or expense . . . .

The movant bears the burden of showing the existence of such good cause. Harris v. Amoco Production Co., 768 F.2d 669, 684 (5th Cir. 1985), cert, denied, 475 U.S. 1011 (1986); 4 J. Moore, J. Lucas & G. Grotheer, Moore's Federal Practice, 1 26.67 at 426 (1987); 8 Wright & Mill-er, Federal Practice & Procedure, Civil 5 2035 at 264-65 (1970). l

/

ri -

"To establish good cause under Rule 26(c), the courts have gener-ally required a 'particular end specific demonstration of fact, as distinguished from stereotyped and conclusory statements United Stales v._ pxor colp 2, 94 F.R.D. 250, 251 i (D.D.C. 1981) (quoting 8 Wright t. Miller, 5 2035 at 265); c_es '

also-General __Dyn_amics Coro, v. Selb_Manufacturino Co2, 451 F.2d -

l 1204, 1212 (8th Cir. 1973), _qirA denied, 414 U.S. 1162 (1974)

(s6me).

Defendants' Rule 26 motion is founded exclusively on their counsel's intention to filo a motion to dismiss the case because  !

i the HRC has not yet issued a final order.1/ As demonstrated belov, this rationale is insufficient to justify granting Defen-t dants' Rule 26 motion. I r

This Court has_ unequivocally affirmed the principle that "a protective order should not_ issue if it would result in denying one party in the case access to-proof necessary to withstand sum-mary judgment." NAACP, Western Reo;on v. Hodoso_q, 57 F.R.D. 81, 83 (D.D.C. 1972) (Richey, J.) In NAACP, migratory farm laborers brought suit against the Rural Manpower Service, alleging that

officials of that organization had condoned and perpetuated dis-crimination in staffing and operating i.ts-various offices. The ,

government-defendants moved, pursuant;to Rule 26(c), for a i

1/ _ Transcript of Status Call Hearing (July 25, 1988) at 4-6.

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_ . - - ~ - - . - - - - . ~ .. - - - - -

i l

protective order postponing all discovery until at least 20 days j after disposition by the Court of a motion to dismiss or, in the f i

, alternative, f or summary j udgment , which defendants claimed woulc [

be dispositive. The govarnment argued that to allow discovery to proceed prior to the disposition of the proposed Motion would be  ;

to place an undue burden upon defendants in terms of the time required for the governme"*

officials to prepare for the depositions, to  !

answer the interrogatories, to examine.docu- i ments to determine which would fall within l the requests of the plaintiffs, and ,o actu- i ally attend the depositions.

1d.-at 52. i The position of the government in the present case is sub- ,

i.

stantially_the same as its argument in NAACP. Specifically, De- j fendants maintain'that "to allov discovery to proceed at this time may well place an unnecessary burden on the defendant (s) and '

grant the plaintiff a useless remedy."2/

As in the NAACP case, the government's_ argument is not persuasiva. The standard.for -

-granting.the government's *.iotion_is very-high; and the government has not met: this standard.

This Court set forth in the NAACP case the-applicable stan- -

dard under which the government may avoid its routine discovery obligations:- $

1 t

h 2/ _ Memorandum of Points and-Authorities in Support of Defen-L I

'dants' Motion for a Protective Order at 3.

n l l

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i L~ - . J. _.__c.....--_,-a...~.-._.__. .___-_.,_..__,...-_.--,x,u,--..._..s..;....,- -,.-.~.,..-..,...--.m--.~ -........a, . - , -m.-

l Absent a compelling reason for nondis-closure, the United States is bound by the Federal Rules of Civil Procedure just as any litigant. As stated by the Court of Appeals in Freeman v. Sglioson. 132 U.S. App. D.C.

56, 405 F.2d 1326, 1337-1338 (1968):

"(T]he paramount interests of the Government in having justice done between litigants in the Federal j courts militates in favor of requiring great effort on its part ,

to produce any documents relevant  !

to a fair determination of this 1 tigation."

The defendants have demonstrated no compel-ling reasons for nondisclosure. Plaintiffs, on the other hand, have asserted several rea-sons:why discovery should and must proceed.

Plaintiffs claim that by moving for summary judgment and simultaneously seeking to stay discovery of matters peculiarly within the defendants' knowledge, the defendants seek to deny plaintiffs access to the very evidence '

needed to counter. fully the motion. There is ,

merit to this contention, for it is well set-tied that a protect hve order should not issue if it would result ,n denvino one party in  ;

the case accese to oroof necessary to with, stand summary iudoment. See 6 Moore's Fed- )

eral Practice,- S-56,15(5), -T}is alone i s '

sufficient reason to deny the defendants;'

motion for-a protective order.

NAACP, supra, at 82-83 (emphasis added; some citations omitted).

NAACP is directly on point. By Defendants' own admission, .

their anticipated motion to dismiss will be based, at least in part', on1the doctrine of exhaustion of administrative. remedies.E#

In-order:to determine-whether-it is appropriate in this casecto l

3/ Transcript of Status call Hearing at 4-6.

l

_4

- - . - . . , _ . . _ _ - . _ _ . . - - _ _ __.m ___..___.w_;._.._.~._,_.._i,___,_ -._._.__ _ ____._ _ _ . _._...____m_

__ _. ?

t F

require exhaustion, the Court will have to consider the validity .

f of the Plaintiff's assertion of prejudicial congresssional pres- I sure on the NRC.S# Consequently, Plaintiff must be provided with the opportunity to conduct discovery on the issue of congressio- I nal pressure.

Plaintiff has submitted to Defendants one set of ten inter-rogatories and one request for production of documents. The scope of these interrogatories and document request includes only

• the issue of congressional pressure on the NRC regarding Plain- i tiff's application to the NRC to suspend the antitrust conditions appended to the license for :he Perry nuclear power plant. For example, the first_four interrogatories request indentification  ;

of all persons who, lo the NRC's knowledqr, reviewed or commented upon Ohio Edison's application or who participated in a communi-cation relating to Senator Metzenbaum's proposed amendment. The fifth and sixth interrogatories request identification of intra-ME.q communications relating to Senator Metzenbaum's proposed amendment or to Ohio Edison's application. The seventh and eighth interrogatories request identification of communications-between.the NRC'and others relating to Senator Metzenbaum's-4/ See, ex q2, Peter Kievit Sons' Co. v. United States Army Corps-of Enaineers,-714 F.2d 163,-168-71-(D.C. Cir.- 1983);-

l D.C. Federation of Civic Associations v. Volog,-459 F.2d 1231, 1245-49 (D.C. Cir. 1971), cert, denied, 405 U.S. 1030 l

(1972); gillsbury Co. v. FTC, 354 F.2d 952 (5th Cir. 1966);

^

Amos Treat & Co. v. SEC, 306 F.2d 260, 267 (D.C. Cir. 1962).

,. 2 i, . - . . .-., . ,

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i l

proposed amendment or to Ohio Edison's application. Finally. the j l

ninth and tenth interrogatories request identification of commu-i nications of which the NRC 11 aware between persons not within ,

the NRC and which relate to senator Metzenbaum's proposed amend-  !

ment or to Ohio Edison's application. The request for production  :

of documents simply covers those documents identified in the an-svers to the interrogatories.

i The District of Columbia Circuit has clearly indicated that the propriety of a " district court's interruption of the adminis-trative process before remedies (are) exhausted and in the ab-sence of final agency action"E# depends upon the extent to which support (s) a finding of actual or apparent con-

^

"the record . . .

gressional interference."E# Therefor *. in order to provide this j

Court with the information that it must consider in ruling upon Defendants' exhaust' ion argument, Plaintiff.must be given the op-portunity to discover the extent-of congressional pressure in this case.

In short, to issue the protective order requested by the government in this case would deny Ohio Edison Company " discovery of matters peculiarly within the defendants' knowledge . . . ,

{and) the very evidence needed to counter _ fully the motion."

r

}/ _ Peter Kiewit Sons' Co.,_suora, 714 F.2d at 171.

• h l

s/ Id. at 170.

l l

l

, , _ _ _ _ _ ._ __.______._..._2.____.__._.__ ___

t d

• AJ Q , supra, at S3. Le_e also Surpitski v. Hughes-Keenan Cqrpa.

362 F.2d 254, 255-56 (1st Cir. 1966) (vacating trial court's grant of defendants' motion to dismiss on jurisdictional grounds i

where trial court had refused to allow plaintiff sufficient dis- i covery to prepare his case on jurisdiction); Posee v. Board _1f

?

Trade. 36-F.R.D. 684, 683 (N.D. Ill. 1965) ("the question of postponing discovery does not arise where the discovery sought ,

. relates to Jinformation which may bear on t:1e disposition of the pending motion"); River Plate Corp, v. Forestal Land. Timber t Railway Co., 185 F. Supp. 832, 834-36 (S.D.N.Y. 1960) (deoosi-tions permitted but confined to jurisdictional facts where defen-dants had moved.to dismiss for lack of in persona,m jurisdiction):

Bauer v. Servel.-Inc., 168 F. Supp. 478, 482 (S.D.N.Y. 1958)

(pending determination of potentially dispositive preliminary .

issue, scope of plaintiff's deposition limited to facts material to jurisdiction and standing--issues); Blair Holdinos Corp. v, Rubinstein, 159 F. Supp. 14, 15 (S.D.N.Y. 1954) ("the right of a party _to take depositions to secure l'nformation bearing on the i question of jurisdiction, where that issue is before-the' Court, t seems to be unquestioned at the present time"),

t Furthermore, the government has not shown any, much less sufficient " good cause" to overcome Plaintiff's need for discov-  ;

ery of information necessary to adequately counter Defendants' forthcoming motion to dismiss.- Defendants' memorandum in support' i- - ,

l o

of their etion addresses this point only by stating that " dis-l coveryLin the face of defendants (sic) anticipated dispositive l motion is inappropriate,"? / and that "to allow discovery to pro-ceed at this time may well place an unnecessary burden on the defendant " S

. . . . These assertions are no more than " stereo- {

typed and conclusory staterents," rather than the "particular and l

specific demonstration of fact" required by Rule 26(c). Seg l l

General Dynamics, supra; Exxon Coro,, supra. '

Significantly, Defendants have not alleged -- nor coulo they ]

-- that responding to the discovery which Plaintiff has requested )

would be unduly time-consuming or burdensome. Plaintiff's sub-mission of one set of ten very specific and narrow interrogato-ries and'one associated document request is set forth in five typewritten pages, including all definitions and instructions as vell as the actual interrogatories and document request. As dis- l cussed above, the interrogatories are limited in scope to the issue'of congressional pressure, and merely request identifica-tion of' persons and communications; the document request simply requires production of the documents identified in the responses -

to the interrogatories, th) depositions have yet_been requested. ,

in short, Defendants have failed to show that there is any -

2/ Memorandum of Points and Authorities in Support of Defen-dar*,s' Motion for a Protective Order at 2.

8/ Id, at 3.

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" burden" in responding to the very limited discovery at issue, much less that this burden outweighs Plaintiff's substantial need for the requested information.

The Defondants cite three cases and one treatise in support of the pro,cosition that " courts have routinely deemed it appro-priate to stay .any discovery pending the outcome of prelimiaary issues which are potentially dispositive of the case and which may therefore render the discovery request moot."9/ The govern-ments authorities do not support its position. In these cases, all discovery was not stayed; to the contrary, discovery related tp,the preliminary issue was permitted.

In Marrese v. American Academy of Orthopedic Surgepns, 706 F.2d 1488 (7th Cir. 1983), opinion vagated (July 19, 1993), en

_ryhearing en banc, 726 F.2d 1150 (7th Cir. 1984), reversed pn other arounds, 470 U.S. 373 (1985),1E# two orthopedic surgeons filed an antitrust action against a private association of ortho-pedic surgeons challenging the denials of their membership appli-cations. The trial court ordered the. defendant association to produce "all of its. correspondence and other documents relating to the denial of plaintiff's applications for membership and to I

'jb/ ' Defendants' Memorandum of Points and-Authorities-at 2 (em-phasis added),

10/ See Defendants' Memorandum at 2.

l

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all other denials of membership applications between 1970 and 1980." 706 F.2d at 1493. The Seventh Circuit disapproved of this order not because the discovery request would have been mooted upon disposition of a preliminary issue, but on the dual grounds that (1) the discovery sought sensit.ve material pro-tected oy a First Amendment ;nterest, and (2) tne tria; :Ourt did not provide for discove y of less sensitive material first. Fur-therrore, the appellate court indi:sted that even sensitive mate-rial would be di*.coverable if necessary to permit plaintiffs to withstand a motion for summary judgment:

-ithough disclosure of the files sought by the plaintiffs would . . . be costly, non-disclosure might make it impossible for them to prove their antitrust case or even to dis-cover whether they have a meritorious case.

. . . . If there is other discovery that the plaintiffs must complete in order to be able to resist a motion by the defendant for sum-mary judgment . . . the district judge should '

use his power under Rule 26(d) to require the plaintiffs to complete the other, nonsensi-tive discovery first.

~

706 F.2d at 1494; accord, 726 F.2d at 1161, 1162 (en banc). In sum, sequencing discovery pursuant to Rule 26(d) is a far cry from denying a litigant's entitlement to discovery.

In Brennan v. Local Union No. 639, International Brotherhood of Teamsters, 494 F.2d 1092 (D.C. Cir. 1974), cert. denied, 429 U.S. 1123 (1977), the Secretary of Labor brought suit against the union to set aside an allegedly illegal election. In Brennan, the District of Columbia Circuit panel approved the district

court's protective order prohibiting the union from deposing the Secretary of Labor until five days after disposition of the Sec-retary's summary judgment motion. But in that case, substantial dircovery on the merits had already been conducted.

S;milarly, the third case upon which Defendants rely, Defensive Instruments, Inc. v. RCA_Coro., 3 3 5 .'. Supp. 1053 (W.D.

Pa. 1974), aff'd without opini_on, 530 F.2d 963 (3rd Cir. 1976),

supports Plaintiff's pos4 tion that a party is entitled to discov-ery related to potentially dispositive, "preliminaty" isnues.

Before us is defendant's motion for Stm-mary Judgment based upon the contention that the California statute of limitations pre-ve.its bringing the action. Such a defense, if eatablished, would eliminate the need for scrutiny of the merits of the case. Hence discovery should be limited to the prelimi-nary question as to th_e validity of this defense . . . .

Id. at 1053 (emphasis added).

The defendants also cite 8 Wright & Miller, Federal Practice

& Procedure, Civil 5 2040 (1970), in support of their argument that discovery should be stayed until after disposition of their motion. However, although Defendants' motion was made pursuant to Rule 26(c)(1) ("that discovery not be had"), Section 2040 dis-cusses Rule 26(c)(4) ("that certain matters not be inquired into, or that the scope of discovery be limited to certain matters").

It is in this context that that treatise cites "'the principle of judicial parsimony,' by which, when one issue may be

t determinative of a case, the court has discretion to stay discov-ery on other issues until the critical issue had been decid-ed."11# Id. at 288 (emphases added). Defendants also cite Jus-tice Cardo:o's ' principle of judicial parsimony," Sinclair (

Refinino, 239 U.S. at 694, although they neglect to i r.dicate that this statement was used to illustrate that discovery as to "

danaces vill commonly be postponed till the right or 1: ability had been.establi wed or declared." id 2 (emphasis added).12/ [

Finally, Defendants cite O'Brien v. Avco Corp., 309 F. Supp.

703 (S.D. N.Y. 1969), and Allied Poultry Processors Co. v. Polin, 134 F. Supp. 278 (D. Del. 1955). In O'Brien, the discovery sought and denied' vent solely to the merits of the action, while the preliminary question' involved the court's jurisdiction. And in Allied Poultry, the court relied upon Smith v. Sperlino, 117 F. Supp. 781 (S.D. Cal. 1953), in urging the parties to agree upon a method by which to determine the question of jurisdiction.

The Smith-court permitted discovery on the jurisdictional issue: >

"As a general rule, the trial court may ... . try all issues of 11/f 1S i nc l a i r Re fj n i no Co. v. Jenkins Petroleum Process Co., 289 I

U.S. 689,:694 (1933).

I 12/ Significantly, current guidance-on-the effective trial of-federal cases rejects this principle and suggests that early discovery relating to damages may be appropriate in particu-

-lar cases. Manual-for complex Litication, Second, 5 21.41, .

n. 32 (1985) .t" conducting discovery on damages before dis-

~

covery on liability . . . has led to early settlement of some cases").

1

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fact as to jurisdiction by receiving oral testimony and other ev-idence, or by receiving and weighing affidavits . . . .

117 F.

Supp. at 787 (citations omitted).

In sum, Plaintiff seeks discovery regarding a 'pveliminary issue" upon which the governnect has stated that it intend.s to base its motion to dismiss. Even the authorities upon whi:h De-fendants rely support the specific principle at iset.a her0 which is that a party should net be denied discovery pending disposi-tion of a motion to dismiss where the discovery sotqht i nvolves evidence necessary to withstand the motion. The government has demonstrated no compelling reasons for staying such discovery,

- and consequently has failed to carry its burden of proof under -

Rule 26(c).

For the reasons stated above, Defendants' motion should be

. denied. Ohio Edison Company also respectfully requests, consis-tent with Plaintiff's stated purpose of avoiding delays in this case,13/- that tne Court enter an crder directing-Defendants to respond to the pending discovery .equests within 10 days.14/ De-fendants valted 45 days after they vere served with the Complaint before filing their motion for-a protective order. Defendants' motion to dismiss is due on August 22, 1988. Plaintiff's U/: Transcript of Status Call hearing at 9, i M/ A proposed Order is attacued.

' 3-a E

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opposition to Defendants' dispositive motion is due on '

l September 21, 1988. Thus in order for the limited discovery i Plaintiff seeks to be availsble for use in replying on a timely basis to Defendants' motion to dismiss, Plaintiff should be pro- {

3 vided promptly with the information it has requested. l Dated: August-19, 1983 P

Respectfully submitted, SHAW, PITTMAN, POTTS & TRCWBRIDGE  !

t

_ anh Robert E. Zahp4- (915165 ,

Gerald Charnoff Robert E. Zahler '

Deborah B. Charnuff  ;

Hargaret S. Spencer i 2300 N Street, N.W.

Washington, D.C. 20037 (202) 663-8000 Attorneys for Plaintiff ,

OH10 EDISON COMPANY ,

l i

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_ .._.m__. . . _. . _ _ _ _ . _ _ . _ _ . _ _ _ _ _ _ _ _ _ . _ _ . . _ - _ _ . . . _ _ _ _

4 l

l CERTIFICATE OF SERVICE  !

! HERESY CERTIFY that a copy of the foregoing Plaintiff's j Memorandu:n of Points and Authorities in Opposition to Def endants' '

Motion for a Protective Order and proposed Order was mailed first class, postage prepaid, this 19th day of August, 1988, to .ounsel for Defendants:

Wilma A. Lewis, Esquire Assistant United States Attorney Judiciarf Center Building -- Room 4116 555 Fourth Street, N.W. '

f washington, D.C. 20001 n i Robert E. Zahler N \#915165 Shaw, Pittman, P s & Trowbridge 2300 N Street, N.W.

Washington, D.C. 20037 (202) 663-8000 l

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IN T>iE UNITED STATES DISTRICT COURT POR THE DISTRICT Or 00LUMBIA

)

OHIO EDISON CCMPANY, )

)

Plaintiff, )

)

v. )

LANDO W. ZECH, JR., et al.

) Civil Action No. 88-1695

)

)

Defendants. )

)

MOTION TO DISMISS Defendants, the Nuclear Reculatory Commission and its Commissioners, hereby move the Court, pursuant to Rule 12(b) of the Federal Rules of Civil Proceedure, to dismiss this action.

As set forth in the attached memorandum, plaintiff's action is fatally flawed for two independent reasoni. First this court lacks subject matter jurisdictions this action properly lies, if anywhere, within the exclusive furisdiction of the Court of Appeals. Second, this action is clearly a premature attempt to involve the judiciary in an ongoing NRC licensing i

l e

i proceeding; as such, it does not state a claim upon which any Court can grant relief.

Respectfully submitted, OF cot lNSEL:

WILLIAH C. PAPLER JAY B. STEPHENS, D.C. Bar #175I40 General Cour4sel United States Attorney  !

WILLIAN H. BRIGGS, JR.

Solicitor JOHN D. 3ATES, D.C. Bar #934927 E. LEO SLAGGIE Assistant United States Attorney Deputy Solicitor

! JL >

PP.TER CRANE WILMA A.'LEr f, E.(ll

f. Bars

• td 3$Se37 Council for Special Projects Assistan nited states Attorney GERALDINE PEHST Attorney of fice of the Ger.eral Counsel U.S. Nuclear Regulatory Corr. mis sion Washingto:t, D.C. 20555 Dated: August 22, 1988 i

2

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUP.DIA OHIO EDISCt CCPPANY, )

)

Plaintiff, )

)

v. )

LANDO W. IECH, JR., et al.

) Civil Action No. 68-1655

)

)

Defendants. )

)

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDM:TS ' MOTION TO DISMISS INTRCDUCTION On June 22, 1988, plaintiff Ohio Edison Company, licensee for the Perry Nuclear Pcwer Plant (" Perry"), which is located about 37 miles cast of Cleveland, Ohio, filed this action against the Nuclear Regulatory Commission ( N RC " ) and its Commissioners. Chio Edison asks this Court to intervene in an ongoing NRC proceeding that is considering Ohio Edison's request for licenst amendments to eliminate eleven antitrust conditions presently included in the Perry operating .'.icense. Specifically, plaintiff would have this Court, without waiting for the agency to decide the matter, direct the NRC to issue the requested amendments. Ohio Edison argues that the decision to issue the amendments should be made by the Court rather than by the NRC because of "an extraordinary situation arising from the congressional threat to legislatively overrule the NRC should it grant Ohio Edison's application." As is explained further in this remorandum, subject matter jurisdiction over this claim lies l

l exclusively in the Court n* Appeals; moreover, even were plaintiff's claim properly before this Court, it would be fatally premature.

ARGUMENT I.

The Court Should Dismiss This Case Because Interlocutory Judicial Review Of NPC Licensing Proceedings, When Available At All, Lies Exclusively t!ith The Court of Appeals The Courts of Appeals have " exclusive jurisdiction" to review all final orders of the NRC entered in licensing proceedings. 42 U.S.C. S 2239(b); 28 U.S.C. 5 2342(4).

Interlocutory judicial review, if appropriate at all, is also within the exclusive jurisdiction of the Courts of Appeals.

Telecommunications Reseaveh & Action Center v. Federal Communications Commission, 750 F.2d 70 (D.C. Cir. 1984) ( "T RA C " )

(unreasonable agency delay); Air Line Pilots Association, International v. Civil Aeronautics Board, 750 T.2d 81 (D.C. Cir.

1964) ("ALPA") (claims of unreasonable agency delay,,and agency bias). In TRAC, the Court held

[W)here a statute commits review of agency action to the Court of Appeals, any suit seeking relief that might a f fect the Circuit Court's future jurisdiction is gubject to the exclusive review of the Court of Appeals.

750 P.2d at 75 (footnote omitted) (emphasis in original) . In support of this rule, the TRAC court noted that courts of Appeal have expertise in those areas of administrative law involving agencies whose actions they ordinarily review; that exclusive review is consistent with Congressional intent to vest sole jurisdiction in appellate courts over the ' class of claims" l covered by the statutory administrative review provision; and that

! . 2 t

exclusivo review eliminates duplicative and potentially ecnflicting judicial decisions. Id. at 77-78.  !

The foregoing principles govern the case here. i Plaintiff seeks a declaratory judgn.ent that the NRC should not l

conduct its own proceedings on Ohio Edison's application for license amendrents because of what plaintiff claims is a Congressional *hreat to overturn the NRC decisicn, should the agency grant plaintiff's application. Because ultimate review of a denial of plaintiff's license amendment application resides exclusive?, in the Court of Appeals, that Court has exclusive jurisdiction over any interlocutory review of the procedure leading to that decision. T P.A C , supra; ALPA, supra. See also International Union, UAW v. Donovan, 756 P.2d 162, 163 (D.C.

Cir. 1985) (Because federal statute vests jurisdiction in the court of appeals to review standards issued under the act, auch as regulation sought by petitioner, District Court had no subject matter jurisdiction). '

Plaintiff's verious efforts to invoke this Court's jurisdiction must fail. Contrary to the plaintiff's assertion, Conplaint at i 6, the mandamus statute, 28 U.S.C. S 1361, does not create District Court jurisdiction over this case. Indeed, this proposition was conclusively rejected by the Court of Appeals in ALPA, the companion case to TRAC and an action virtually identical to the instant case. In ALPA the Court of Appeals specifically recognized appellate jurisdiction over an interlocutory mandamus l action involving claims of improper bias, finding that the principle (s) " apply.just as squarely to a claim of bias on f

3 a - . - , -- n. - . - - , , n .,,.4

, , , , , , , 9 ,, , . , a - , ., ,wy

nandamus ... as they do to a claim of unreascnabic delay." E'IA, supra, 750 T.2d at 84. The ALPA Court noted:

The bias claim has equal power to effect our future jurisdiction over final agency action. In both instancer, the Court of Appeals is acting in aid of its future jurisdiction, and hos exclusive jurisdiction.

I,d . I In short, because review of the NRC licensing arendment decision is available in the Court of Appeals, action by the District Court under 28 U.S.C. S 1361 is not. Id.

Plaintiff also centends that 28 U.S.C. S 1331 gives this Court subject ratter jurisdiction over a claim that tne threat of congressional overruling of NRC action effectively denies plaintiff's constitutional right of due process. Complaint at S 6. This contention also fails. TFAC specifically rejected a prior case holding that federal district courts have general federal question jurisdiction over " constitutional claims of agency bias and prejudgecnt." T RAC , 750 F.2d at 75, n.23, 77, n.30 (citing Association of National Advertisers vi PTC, 627 F.2d 1151, 1157 (D.C. Cir. 1979), cert. denied, 447 U.S. 921 (1980)).

Indeed, this Court has followed TRAC in cases invoJVing constitutional claims. In Jan ison v.FTC, 628 F.Supp 1548, 1551 (D.D.C. 1985), this Court transferred to the Court of Appeals a complaint filed by anesthesiologists seeking preliminary injunctive relief.on constitutional and antitrust grounds against I

The bias claims in ALPA involved a-series of statements by the Chairman of the Civil Aeronautics Board about the caune of the Branif f International Airways' bankruptcy which allegedly biased the minds of the other Board members.

4 I

the Federal Trade Ccanission. The Jamison Court, in applying TRAC to constitutional claims, noted that acceptance of plaintiffs' argument (that District Courts have jurisdiction over interlocutory conctitutional claims rotwithstanding TRAC), would cripple the purpose of the TPAC deetrine, sInce plaintiffs could avoid application of TRAC simply by attaching a constitutional claim--such ac violation of due process or f reedom of speech--to their complaints.

Id. at 1551 (footnote cmitted). The Jamison court i.oted that applying the TRAC doctrine to cases involving constitutional claims neither deprived parties of a forum nor provided an inadequate ferum for those claims. Id. at 1551, n.3.2 2

The D. C. Circuit 's decision in TRAC, as interpreted by this court in Jamison, had the effect of eliminating any remaining vestiges in t'he law of the doctrine of Amos Treat & Co. v. SEC 306 T.2d 260 (D.C. Cir. 1962). That case held that the Distric,t Court had jurisdiction under some circumstances to entertain a constitutional challenge to an agency proceeding, notwithstanding that the Court of Appeals would ultimately have jurisdiction to review the agency's final order in that proceeding.

Even if Amos Treat were still good law, h5vever,it would have no applicability here, as is apparent when the facts pleaded in this case are conparwd with those which caused the Aros Treat court to find that the District Court had jurisdiction.

Amos Treat involved a decision by the Securities and Exchange Commission to accept the recommendation of one of its staff divisions that it initiate a proceeding against the plaintiff, where one of the voting Commissioners had formerly headed that di"tsion and had participated in the staff investigation of the plot itif f ' l conduct. In a similar case decided only a year after A m o s _T r e a t_ , the D.C. Circuit in SEC v. R. A. Holman & Co., 323 1.2d 284 'jD.C. Cir. 1963) cert, denied, 375 U.S. 943 (1973) derstibed Amos Treat as "the exceptional case," Id. at 286, and

?.clared that " administrative proceedings cannot be stopped to allow for excursions in the courts with prolonged evidentiary hearings," as the result could be a " breakdown in the administrative process." Id. at 287. Later cases with rare exceptions followed the lea 3~of R. A. Holman. Sen e.g., Sterling Drug, .nce v. FTC, 450 F.2d 698 (D.C. Cir. f971), where' the court descrioed emos Treat as standing for the principle that establ,she avenues for review within the agency can be bypassed l only whero there is a clear constitutional or statutory l

violation. Id. at 710.

l

. 5 l

1 .

Finally, Plaintiff also alleges sub]ect matter jurisdiction under 28 U.S.C. S 1337, the statute regulating ecnrerce or protecting trade and commerce against re.straints and menopolies. Ccmplaint at 1 6. This general jurir,dictional statute has no application to antitrust issues that arice in the course of NRC license amendment decisions. Section 105 (c) of the Atomic Energy Act of 1954, as revised in 1970 requiri1 the Ccmmission to "r.ake a finding as to whethus the act:.vities under the licente would create or maintain a situation inconsistent with the antitrust laws." 42 U.S.C. 5 2135(c). The statute requires the NRC to obtain the advice of the Attorney General and to allow 180 days for his review. 42 U.S.C. S 2135(c) (15 on the basis of the Attorney General's advice and on the basis of its findings after any hearing on the antitrust question, the Cenmission "shall have the authority to issue cr continue a license as applied for, to refuse to issue a license, to rescind a licensi or amend it, and to issue a license with such conditions as it deems appropriate." 42 U.S.C. S 213%(c) (6).

curisdiction over claims to review such NRC decisions lies exclusively in the Courts of Appeal. 42 U.S.C. S 2239(b); 28 U.S.C. S 2342(4). See Alabama Power Company v. Nuclear Regulatory Commission 692 F.2d 1362, 1367 n.3 (11th Cir. 1982),

cert. denied, 464 U.S. 816 (1983) (jurisdiction was in Court of Appeals pursuant to 28 U.S.C. $ 2239 and 28 U.S.C. S 2342 after a final order of NRC found Commission action proper that inposed antitrust conditions on a license).

I 6 l 1

fn sum, Ohio Edison's claim for judicial intervention in the NRC's ongoing license arendment proceeding, if it can be heard at all, can be heard enly in the Court of Appeals.

II. Even If The Court Finds Jurisdicticn, It Should Disniss This Care As Prerature.

Plaintiff claims that the " threat to legislatively overrule the NRC should it grant Ohio Edison's applicatien (for a license amendment)" has rendered the agency " unable to fairly adjudicate" that application and has " compelled" consideration of the matter by this Court. Complaint at 8. The interrelated doctrines of finality, ripeness, and exhaustion of administrative retedies all argue forcefully against review at this time. FTC

v. Standard Oil _ Company of California, 449 U.S. 232, 246 (1980);

USAA Federal Savings Bank v. McIcughlin, No. 87-5062, F.2d (D.C. Cir. June 24, 1988),

riainly, there has been no " final oiler" by the Ccmmission in this case.3 There has not even beenfan initial determination by the NRC staff that the requcsted license amendment should or should not be granted. If the N?C *tafi determines initially to deny the requested amendment, plaintiff will have an opportunity for an adjudicatory hearing before an Atomic Safety and Licensing Board. That Board's on the record decision will in turn be reviewable by the Atomic Safety and 3

It should be noted that Ohio Edison makes no claim that a final order has been unreasonably delayed. Plaintiff could hardly do so, having requested and received extensions of time totaling 75 days to respond to three cornents critical of plaintiff's request for a license amendment.

l

. 7

Licensing Appeal Board and the Commission. It is through this I

agency process that Ohio Edison must first present its claims of imprcper congressional interference in the administrative process.

Af terwards, if necessary, plaintif f can request judicial review

{

of the agency's final determination.

Plaintiffs, far from having exhausted their administrative remedies, appear to wish to spurn those remedies altogether in favor of immediate judicial action. Their improper attempt to by-pass the NRC should be rejected. In Peter Kiewit Sons ' Co. v. U.S. Army Corps of Engineers, 714 T.2d 163 (D.C. Cir.

1983), a case involving allegations of improper congressional interference, the Circuit Court stated:

Finality and exhauction requirements may be dispensed with only where the agency has very clearly violated an important constitutional or statutory right.

Id. at 169 (quoting Sterling Drug, Inc. v. FTC, 450 F.2d 698, 710 (D.C. Cir. 1971)). Nothing that Ohio Edison has alleged comes remotely close to meeting this test. The mere expr'ession of a congressman's opinion about a pending administrative proceeding hardly converta the continuation of that proceeding into a clear violation of anyone 's rights. In Kiewit, supra, the court rejected a claim that a Senator's communications had compromised the integrity of a pending administrative proceeding. Noting that there was no evidence that the Senator had actually contacted the ultimate decisionmaker, directly or indirectly, the court observed:

A court must consider the decisionmaker's input, not the legislator's output. The test is whether " extraneous l

I factors the individual decisionmaker, intruded into the calculus of consideration" of t 8 l

l

. - ._,__ .._ ,. ,. _...- ___ ..- -, _ . _ . _ _ . , . _ ~ _ _ . _ . . . _ . . . - . . . _ - . _ - . . . , _ . . . - - . - .

714 P.2d at 170 (footnote omitted) (emphasis in the original),

itere the plaintif f has of fered no basis beyond mere speculation for concluding that the " legislator's output," 1.c.

Senator l'.etzenbaum's proposed amendment and accompanying renarks, has intruded in any way into the Commission's eencideration of Ohio Edison's application.4 Even if some possibility of intrusion did exist, there is no cognizable harm to Ohio Edison from having the agency proceeding run its course.

It is well established that the burden on a party of having to defend its interests in an administrative proceeding does not amount to harm justifying immediate review.

_C f . FTC v. Standard Oij , supra, 449 U.S. at 242; USAA Federal Savings Bank v. McLaughlin, _ supra, slip op at 10. A fortiori, in the present case, where the edministrative process was initiated not by the agency but by the plaintiff, the burden of following established administrative procedures is one which plaintiff must bear. This case bears no relation to those in whic'h immediate review was permitted because the challenged agency action placed 4

Plaintiff dess assert that during the colloquy on Senator Metzenbaum's proposed amendment, "severn1 Senators indicated that while Plaintiff's application was pending before the NRC, Congressional and NRC staffs apparently communicated with one another regarding the NRC's intent to deny the application."

Complaint at 7. Examination of the Congressional Record pages attached to the complaint reveals, however, that only a' single Senator made such a suggestion, and that he almost immediately declared that he had misspoken, explaining that "in a pending case they [the NRC) simply will not tell you what they are goina to do." 134 Cong. Rec. S 3259 (daily ed. March 29, 1988). Moreover, even. vere _ plaintiff.'s allegation accepted at face value, statements by unnamed NRC staff members hardly reflect the views of the NRC Commissioners, who must ultimately decide the merita f plaintifi's proposed license amendment.

9 .

an ime.ediate, concrete burden on the pisintif f, ed.e iba-pein Corp. v. EPA, 801 F.2d 430 (D.C. Cir. 1986) (requirement to change labels en pesticide products irrediately or risk civil and 4

criminal proceedings).5 on the contrary, here it is the plaintiff which seeks to change the status quo, by removing license conditions which have been in place for a decade. -

For the above reasons, there is no justification for

bypassing the administrative process in this case. In seeking irr.ediate relief from this Court plaintiff may be con. pared to a runner who enters a marathon, runs part of the way, and then derands the prize, arauing that there is no point in going on to the finish line because there has been a boo from the stands and, therefore, the juur s will not select the winner feirly. In the present case, it is up to the plaintiff to go through the process of making its case before the NRC for the requested license amendment, even if this should prove long and arduous. Once the NRC issues its final order acting on the request, p'laintiff will have ample opportunity to raise any objections, inc4uding any accusations of bias or improper influence, before the Court of Appeala.

s S

Amos Treat v. SEC, 306 F.2d 260 (D.C. Cir. 1962), in which the Court did intervene in the administrative process, has no applicability to the present case. See note 2, supra.

10

, 1 l

CONCLUSION l I

In light of the foregoing, the Court should grant  ;

defendant's noction to dismiss.

Respectfully submitted, OF COUNSEL WILLIAM C. PARLER

~

JAY B. STEPHENS, D.C. Bar #177840 General Counsel United States Attorney WILLIA!! H. BRIGGS, JR. ~

Solicitor JOHN D. BATES, D.C. Bar #934927 E. LEO SLAGGIE Assistant Unite: States Attorney _

Deputy Soliciter

(

PETER CPANE f/ / $ . .l&D WILMA A.'Lf 7f, D.t. Bar #358637 Council for Special Projects Assistanti..ited States Attorney GERALDINE FEHST Attorney Office of the General Counsel U.S. Nuclear Regulatory Consission t?ashington, D.C. 20$55 '

f Dated: August 22, 1988 l

l i

I 1

1 11

. _ . . . . _ . _ _ _ _ _ _ __. _ _ _ _ . . _ _ . - . _._ _ . . . _ ~ _ _ .

i CERTIFICATE OF SERVICE I hereby certifv that en this 22nd day r>f August, 1988, copies of the foregoing "Memocandum of Points and Authorities In Support of Defendants' Motion To Dismiss",

" Motion to Dismiss" and " Order" were mailed, first class, postage prepaid, to the fcIlowing:

Cerald Charnoff, Esquire Shaw, Pittman, Potts & Trowbridge 300 N Street, N.W.

Washington, D.C. 20037

/$ ' w -

u WILMA"A. lEl3IS, f d.C. Ear #358637

Assishant United States Attorney United States Attorney's Office Judiciary Center - Room 4116 555 - 4th Street, N.Wi Washington, D.C. 20001 (202) 272-9208 -

I IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

)

OHIO EDISON COMPANY, )

)

Plaintiff, ) '

)

v. )

LANDO W. 7ECH, JR., et al.

) Civil Action No. 88-1695

)

)

Defendants. )

)

ORDER Upon consideration of defendants' motion to dismiss,

'aintiff's opposition, defendants' reply, and the entire record

h. rein, the Court being fully advised of the premises; it is this

..__,, day of , 1988, l

ORDERED that defendants' motion be, and it hereby is, 4

GRANTED; it _s FURT*iER ORDERED that plaintiff's action be, and it hereby is, DISMISSED.

I 1

UNITED STATES DISTRICT JUDGE

, Wilma A. Lewis l Assistant U.S. Attorney l Judiciary Center - Room 4116 555 - 4th Street, N.W. -

Washington, D.C. 20001 1

i Gerald Charnoff, Esquire SHAW, PITTMAli, POTTS & TROWBRIDGE 2300 N Stroet, N.W.

Washington, D.C. 20037

~

w n u ,- -, , - - = = - - - - - - - ,n,

. _ - - -- -- - , = - _ _ .

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA OHIO EDISON COMPANY, )

) ~

Plaintiff. )

) -

f)

v. ) Civil A + bn No. -16 RR

) 1 /" ,

LANDO W.  ::ECH , JR., et al., )

Defendants. ) ,/

l Ti s:.!'

/

i DEFENDANTS' REPLY TO PLAINTIFF'S OPPOSITION TO MOTION FOR A PROTECTIVE ORDER ,

u,/A .

c.- .

On August 8, 1988, defendants filed a motion for a protective order seeking to stay the discovery sought by plaintiff pending defendants' submission, and this Court's resolution, of a motion to dismiss this case on jurisdictional grounds. In response, the plaintiff claims that defendants' motion for a protective order "is founded exclusively on their counsel's intention to file a motion to dismiss the case because the NRC has not yet issued a final order." Memorandum of Points

-and Authorities in Opposition to Defendants' Motion for a Protective Order (" Plaintiff's Memorandum") at 1 (emphasis added). Plaintiff goes on to argue that since defendants' motion to dismise "will be based, at least in part, on the doctrine of exhaustion of administrative remedies," discovery is needed in order to determine "whether it is appropriate in this case to require exhaustion." Plaintiff's Memorandum at 4-5 (emphasis added).

/

_ - - _ ._ ~ . _ __ _ _ ,_ . _ _ _ _. . - . _- _ _- __

l l

l Plaintiff misses the mark in certain critical respects.

Most importantly, defendants' motien to dismiss is based--as this Court and plaintiff's counsel were advised at the status call'that it would be--not solely on the prematurity of plaintiff's action, but first and foremost on the exclusivity of jurisdiction in the Court of Appeals under 'he doctrine of Telecommunications Research & Action Center v. Federal Communications Commission, 750 F.2d 70 (D.C. Cir. 1984).

Indeed, plaintiff's selective citation to the transcript of the status call to support their misleading assertion that defendants' motion to dismiss wculd be based " exclusively" on the prematurity of plaintiff's complaint, together with their complete focus on that aspect of defendants' motion, is telling.

Plaintiff has not even mentioned the primary argument in support of defendant's motion to dismiss, let alene identified any bcsis for discovery on that issue. Since the question of whether this Court or the Court of Appeals has jurisdiction is, without doubt, a purely legal _ question that requires no factual development for its resolution, it would be appropriate to stay '

discovery pending the resolution of that-issue even if one were to accept the validity of plaintiff's argument onLthe exhrustion issue.

One cannot, however, accept the validity of-plaintiff's argument because, even if one were to focus, as plaintiff does, on the exhaustion issue, there would be no basis for launching into discovery at this time. In this regard, plaintiff's reliance on Peter Kiewit Sons' Co. v. U.S. Army Coros. of

. 2 i

Encineers, 714 F.2d 163 (D.C. Cir. 1983), is misplaced. Far from providing support for the notion that judicial intervention and accompanying discovery are appropriate in the instant case',

Kiewit makes clear that the facts alleged by plaintiff in this case do not even come close to what might warrant.the

" extraordinary interruption of the administrative process" that District Court review at this time would constitute. Kiewit, 714 F.2d at 170.

As described in defendants' Motion to Dismiss at 8-9, the i

e Kiewit court declared, in rejecting a claim that communications

.from a Senator had tainted a pending administrative proceeding, that-a. court "must consider the decisionmaker's input, not the legislator's output." Id. The Kiewit court found no evidence to suggest that the " ultimate decisionmaker" had been influenced by the Senator's communications in any way. To justify judicial interruption of the administrative process, the court held that there must be a showing that "the responsible official's

~

' calculus of consideration' or ' mental decisional processes' o ;were. clearly tainted by congressional pressure." Id.

In this type of case, an elaborate multi-step-agency I ~

process exists for evaluating license amendments of the kind requested by the plaintiff.- That-process'begins with an initial determination by the Nuclear Regulatory Commission (NRC) staff, 1

after consideration of the views of the Department of Justice and of comments from-the public, and ends (in-contested cases) with the NRC Commissioners acting in their adjudicatory capacity.

., 3

In this case, the process has barely begun. Plaintiff's request for a license amendment, filed on September 18, 1987, was published by NRC in the Federal Register on December 22, 1987,-along with a request for public-comment. See 52 Fed. Reg. 48473. Comments opposing the request were filed by the Cities of Cleveland and Clyde, Ohio, the American Municipal Power-Ohio, Inc., and several other interested groups and individuals. Then, on July 5, 1988, after requesting and receiving extensions of time totaling 79 days, plaintiff filed its response to the comments.1/ On July 22,.1988, the NRC staff transmitted plaintiff's request. the opposing comments. and plaintiff's response to the Department of Justice for it? evaluation in accordance with 10 C.F.R. 5 2.101. The Department of Justice-has not yet provided its views to the NRC. Only after receiving and considering those views together with the underlying submissions will the NRC staff make its init111 determination of whether the request should be granted. Thus, the administrative process.is .o-far s from the point of actual decisionmaking that plaintiff's attempt-to launch into discovery on'the issue of l . taint is unjustified.

l.

i l 1/ In plaintiff's. initial filings with this Court,-which sought L Io shorten the period- of time for defendants' responses to the L complaint and to plaintiff's discovery, as well as at the status L call on July 25, 1988, and in its current memorandum, plaintiff-L appears obsessed with the idea of imposing short deadlines on

[ the defendants. See Plaintiff's Memorandum at 13. Plaintiff's intense concern with any " delay"'in this proceeding is surprising in view of the extremely nonchalant attitude that its 75-days worth of e:' tensions of time to respond at the administrative level exhibits.

4 4

y ., , , , . - ,yo,,y,- - , - , - , - - - -

Like the plaintiff in Kiewit, plaintiff is attempting to

" bypass an administrative proceeding capable of granting the desired relief." Kiewit, 714 F.2d at 168. Plaintiff has not even alleged that the " ultimate decisionmakers" have been affected by Congressional statements or communications. The only instance in which plaintiff goes beyond discussing

" legislator's output" and mentions "decisionmaker's input" is in its claim that Congressional and NRC staffs communicated with each other on the subject of plaintif f's request for a license amendment. See Complaint at 11 20-21.2/ But even if this claim were deemed to be proven, it would be light years away from constituting a showing that the " ultimate decisionmaker's" decisional processes had been " clearly tainted by congressional pressure", especially in view of the preliminary stage of the j administrative process. Id. at 170. Thus, discovery by the 1

l plaintiff would unnecessarily burden defendants without aavancing the issue before this Court.

This case is therefore wholly distinguishable from NAACP, Western Region v. Hodgson, 57 F.R.D. 81 (D.D.C. 1972), and the other similar cases on which plaintiff relies. In NAACP, this Court held that "a protective order should not issue if it would result in denying one party in the case access to proof necessary to withstand summary judgment." 57 F.R.D. 81, 83. As l

2/ As noted in defendants' Hotion to Dismiss, the referencas in l Ehe Complaint to communications from the NRC' staff regarding plaintiff's request for a license amendment are not only grossly exaggerated, but highly misleading as a result of plaintiff's selective quotations from the Congressional Record. See l Memorandum of Points and Authorities in Support of Defendants' Motion to Dismiss at 9, n. 4.

. 5

explained above, however, the discovery sought by the plaintiff in this case is unnecessary to the resolution of the issues before this Court. It is precisely for this reason that discovery should be sta'ed. The interests of justice would not be advanced by allowing discovery to proceed at a time at which a motion to dismiss that demonstrates multiple jurisdictional barriers to plaintiff's suit is pending before the Court, with plaintiff's response to that motion not yet filed.

CONCLUSION The Congressional pressure alleged by the plaintiff is insufficient to warrant judicial interruption of the administrative process, and therefore no useful purpose would be served by discovery aimed at illuminating in detail the alleged pressure. But even if this Court were disposed to permit discovery on that issue, it should defer any such discovery until plaintiff has responded to the first issue raised in defendants' motion to dismiss: 1.e., the purely legal issue of this Court's lack of jurisdiction to hear the case under the doctrine of Telecommunications Research and Action Center v.

Federal Communications Commission, 750 F.2d 70 (D.C. Cir. 1984).

Respectfully submitted, L s aw.a a QfN,% . STEPHENS ,' D .~C . Bar #177840 United States Attorney

• D. i%A JOHN D. BATES,p.C. Bar #934927 Assistant United States Attorney i

. 6 i

- -_ _ _- _ - . . - , m _ . _ . , _ , _ . . . . _ . . . _ _ , _ _ _ . . -

y W

/J] din bh6' WILMA A.-LEWIS, D/ C . Bar #358637 Assistant' United States Attorney OF COUNSEL:

PETER CRANE GERALDINE FEHST Office of the General Counsel U.S. Nuclear Regulatory Commission l

i l

• 7 E _ _ .__ . . _ _ _ _ ..

l l

CERTIFICATE OF SERVICE I HEREBY CERTIFY that service of the foregoing Defendants' Reply To Plaintiff's opposition To Motion For A Protective Order has been made upon plaintiff by mailing a copy, first class, postage prepaid, to plaintiff's counsel, Gerald Charnoff, Esquire, Shaw, Pittman, Potts & Trowbridge, 2300 !1 Street, t1 W.,

Washington, D.C. 20037, on this [h day of August, 1988.

1. /

~

Q.

.fL t'bllO 3 (l5 )

WILMA A. LEW1S, DC Bar #3586T7 Assistant ^ United' States Attorney Judiciary Center Building i-555 4th Street, NW.

Room 4116 Washington, D.C. 20001 (202) 272-9208

N THE UNITED STATES DISTRICT COURT FOR THE DISTRICT CF COLUMBIA CHIO EDISCN COMPANY, )

)

Plaint.ff, )

)

v. ) Civil Action No. 88-1695 (CRR)

)

LANDO W. 2ECH, .R., el a1., )

) _ _ _ .

Defendants. )

)

{l({ h SEP 2119E CEM..U EDSE 3 OLFJRf TXm?CT OF COUJMILA J

PLAINT!TF'S MEMCRANDUM OF PO!NTS AND AUTHORITIES IN CPPOSITICN TO DEFENDANTS' MOTION TO DISMISS SHAW, PITTMAN, POTTS & TROWBRIDGE Gerald Charnoff Robert E. Zahler Deborah B. Charnoff Margaret S. Spencer 2300 N Street, N.W.

Washington, D.C. 20037 (202) 663-8000 September 21, 1988 Attorneys for Plaintiff CHIO EDISCN COMPANY l .

t 4

Table of Contents Pace ,

. Introduction.............................................. 1 II. This Ccurt Has Original Jurisdiction Over This Case........ 4

....................................... 4 III. This Court Should Not Apply TRAC to This Case............. 7

'A. TRAC Does Not Apply When This Court Has original Jurisdiction Under 28 U.S.C.

i 1337............................................... 7 S. In Any Event, TRAC Does Not . Apply to Challenges to the Legitimacy of Agency Action Based on Factors Extrinsic to the Agency Process....................................... 9 C. Applying TRAC Here Would Run Counter to TRAC's Rationale.................. . . ............ 14 IV. Even If This Court Were to Determine That TRAC Should Apply, _the Appropriate Remedy is Transfer to the Court of Appeals, Not Dismissal................... 17 V. This Case is Not Premature and It Would Be

' Incorrect as a Matter of Law to Dismiss the Complaint............................................ 20 A.- Under District of Columbia Circuit l Precedent, This Case is Read l Judicial Consideration......y........................ Now for 20 L 1. The Purposes of the Exhaustion Doctrine Would Not Be Served By-Applying It in the Instant Case............................... 20

• 2 Cases Involving Allegations of Substantial Agency Disqualification Have Not Required l- Exhaustion-of Administrative Remedies.......... 25 l

I

-i-l l

l

- _ - . _ . _ _ _ _ . _ . _ _ _ . _ . . . _ _ _ . . . _ . _ _ . . . . _ , _ , . _ _ .. m._ _, _ . , . _ _ . . . - - - _._._.

. . _.r m___... _. . . . _ _ _.___. . . _ _ . . _ _ _ . _ . . _ _ . -

3. Undue-Congressional---Interference in An ongoing Agency Adjudication Compromises the Agency's Actual or Apparent Impartiality, Wnich Violates the Litigant's Due Process Rights ......... 2S .;

-t C. Since Plaintiff-Has Alleged Congressiona1 Pressure Sufficient to Compromise the Appearance of the NRC's Impartiality, Dismissal of Plaintiff's Ccmplaint Would

• be Incorrect as a Matter of Law..................... 32

1. Under Rule 12(b)(6), All Doubts Ccncerning the Factual Sufficiency of Plaintiff's Complaint Must De Resolved.'in Plaintiff's Favor.................. 32 ,

2 ~. The Allegations in Plaintiff's Complaint, When Taken as True.

Overcome Defendants' Rule-12(b)(6)

Mot 10n......................................... 34 VI.-

Conclusion............................................... 37 5

s. .

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,%..--r- .. . - . ,,.m..- . . - - . . , - . , . - - .

_r .. _ _ _.,.. . - -.- _ . _ -.

N THE UN:TED STATES D:STR:CT COURT FOR THE D! STRICT CF COLUMB:A OHIO EDISCN COMPANY, )

)

?!aintiff, )

)

v. ) Civil Action No. ES-1695 (CRR)

)

LANDO W. 2ECH, JR., el a'., ) F 1 L E E)

)

Defendants. )

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)

usa . u. A Dm -'T 00dVC C W R CT OF CG.U?:. %

PLAIST!FF'S MEMCRANDUM OF PO!NTS AND AUTHCPIT!ES

N OPPOSIT!CN TO DE?ENDANTS' MOTION TO D!SMISS I. Introduction This case involves a straightforward legal question pecu-liarly within the expertise of this Court. The subject of Plain-tiff's Complaint does not involve the special expertise of the NRC in radiological health, safety and environmental mat:ers.

Rather, it concerns the appropriateness of continued antitrust regulation of Plaintiff's business activities. Plaintiff submits that this Court has jurisdiction to hear this case, that the TRAC doctrine, relied on by the Defendants, is inapposite, and that the unique circumstances of this case should provoke this Court's l consideration of the merits of Plaintiff's claim now.

l Section 105(c) of the Atomic Energy Act authorizes the NRC to grant a license for a nuclear power plant subject to condi-tions which restrict the business activities of the plant owners when activities under the license are likely to create or main-I tain a situation inconsistent with the antitrust laws. 42 U.S.C.

1

. _ . . . _ . . _ .-- ._...._._.~._.___---.._.._._.__m __ _ _ . . _ _ _ _ . .

$ -- 213 51 c ) . The legislative history of Section 105tc) makes clear that the purpose of this statute is to ensure that an owner of a nuclear power plant does not cbtain a compet:tive advantage in the electric supply marketplace because of its ownership interest in the plant.A In 1977, pursuant to Section 105(c), the NRC im-posed l eleven restrictions on the business activities of the own-ers of the Perry. nuclear plant. Plaintiff Ohio Edison is one of

• those owners. The restrictions, limiting Plaintiff's competitive conduct in the marketplace, were based exclusivelv upon the then-universal expectation in this country that large nuclear power plants would generate power at a relatively low cost, and

-thus would place their owners, including Ohio Edison, in an eco-nomically advantageous position.

Unfortunately, the expectations of all concerned have not materialiced. As the Supreme Court recently observed in Mississiosi Power & Lt.cht Co. v.- Mississioni, 108 S. Ct. 2428 (1988), nuclear power did not turn out to be the low-cost energy source it was expected to be. One consequence of the indisputa-ble high cost of nuclear power plants, including the-Perry-plant, was that Ohio Edison did-not achieve the competitive advantage from.ito ownership interest in-Perry-that the restrictions placed-on_its business activities were intended to mitigate. ,

1/- .See, e.g., Prelicensing Antitrust Review of Nuclect Pov-L' erplants, Hearings Before the Joint Comm on Atomic Energy, Part-1, 91st Cong., 1st Sess.-(1970) at 9, 148.

(

- - - - - . -. ,, , - , . - -- - , ~ . . , . - - - , - . - -

l Consequently, there is no reason to continue to impose these re-strictions on Chio Editon.

Chio Edison initially brought its claim directly to the agency. Plaintiff doubts it was recu: red to do so, for, as de-scribed in Section II below, the federal courts have plenary

! jurisdiction over certain matters, including the meaning of fed-eral laws which affect interstate commerce. 28 U.S.C. 5 1337 Nevertheless, Plaintiff endeavored to obtain an NRC ruling on its legal question, as it normally would be expected to do. See Ticor *itle !ns. Co. v. FTC, 814 F.2d 731, 733-43 (Edwards, J.),

745-50 (Williams, J.), and '50-57 (Green, J.) (D.C. Cir. 1987)

(discussion of normal opplications of exhaustion, ripeness and finality doctrines, and balancing of " interests in agency autono-my and judicial economy," with the " burden (placed on) private parties"). Were it not for the congressional pressure that has occurred and its disqualifying effect on the NRC, Plaintiff would still be seeking relief in that administrative forum. Unfortu-nately, however, this is no longer a viable option. Instead, the 8 effects of congressional pressure have forced Plaintiff to seek relief in this Court rather than before the NRC. There is no question that this Court has jurisdiction to hear this case, and in light of the peculiar circumstances that have occurred here, it should do so.

_ _ _ _ _ _ _ _ _ _ _ . __ _ . _ _ _ . _ . - _ . _ _ _ _ _ _ _ - _ _ - - - - - - - - - - - - - - - - - - ----~ ----- --- '

II. This Court Has Original Jurisdiction Over This Case This Court has original jurisdiction over this case pursuant to its general federal jurisdiction, 28 U.S.C. 5 1331,1'/as well as its jurisdiction over proceedings arising under acts of Con-gress which regulate co.;cerce, 28 U.S.C. 5 1337.3/ This is not a case of agency inaction, flaws in agency procedure, or the review of agency decisionmaking. Cf. Memorandum of-Points and Author-ities in Support of Defendants' Motion to Dismiss (" Defendants' Memorandum"), Aug. 22, 1988, at 2-6. Rather, this case involves only tne resolution of one issue of law: whether, as a matter of lav, restrictions can continue to be placed by the federal gov-ernment on Plaintiffs' business activities. Defendants particu-larly argue that Section 1337 "has no application to antitrust issues that arise in the course of NRC license amendment deci-s;ons." Defendants' Memorandum at 6. But this characterization of the case begs the question; the antitrust issue'here did not 2/ 28 U.S.C. 5 1331 states:

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

3/ 28 U.S.C. 5 1337 states:

The district courts shall have original jurisdiction of any civil action or proceed-ing arising under any Act of Congress regu-lating commerce'. . .- .

1 I

4 L

l: =

- ~ .

arise "in the course of NRC license amendment decisions." The antitrust issue in this case is the issue -- and the only issue

-- :n controversy. As an issue of federal statutory interpreta-tion, this Court has tne jurisdictional authority to discern the federal statute's purpose and meaning. " Insofar as construction of (a statute] turns on a review of legislative history and case law, [the court) is as able as (the agency) to conduct that re-view." United Transo. Union v. Lewis, 711 F.2d 233, 242 (D.C.

Cir. '983). In short, district courts have jurisdiction over at least some NRC actions through Section 1337; this case represents one of those instances.

For example, in Drake v. Detroit Edison Co., 44e F. Supp.

533 (W.D. Mich. 1978), the plaintiffs sought to enjoin the sale of a twenty percent ownership interest in a nuc' ear power plant .

in federal district court pursuant to 28 U.S.C. 5 1337. The dis-trict court found jurisdiction under 28 U.S.C. 5 1337 It is very evident from plaintiff's Complaint tnat the action arises under a federal stat-ute and accompanying regulations. It is well established also that that statute, the Atom-ic Energy Act, was passed pursuant to Con-gress' power to regulate commerce, see 1964 U.S. Code Cono. & Admin. News, p. 3111. thus

• making 28 U.S.L. s 1337 tne applicaole juris-dictienal provision.

_!d. at 836.

Similarly, in United States Nv: lear Reculatorv Commission v.

Radiation Technoloov, Inc., 519 F. Supp. 1266 (D. N.J. 1981), the NRC itself filed suit under Section 1337 to impose civil

-_. _ _ _ - _ . - - - - - - - - - ' ^ ' ' ~

penalties against an NRC licensee for alleged violations of NaC regulations and license conditions. As the Court observed, i t was "the position of the plaintiff (the NRC) that jurisdiction in ,

this collection act:on rests with the district court under 28 U.S.C. (5) 1337 . . . ." 519 F.'Supp. at 1271. The dibtrict court agreed.

The court's analysis of this issue must begin with the plaintiff's asserted jurisdiction bases. Chapter 85 of Title 28 contains nu-merous statutory grants of jurisdiction to the distri:t court vnich are applicable to the i nstant matter. 28 U.S.C. 5 1337 states that "[t]he district courts shall have origi-nal-furisdiction of any civil action or pro-ceeding. arising under any Act of Congress regulating commerce . ., ." This jurisdic-tional grant was recognized in Drake v. "

Detroit Edison Co., 443 F. Supp. 333 (W.D.

Mich. 1978F, as the proper basis for the dis-

- trict court's exercise of jurisdiction in-certain actions commenced under the Atomic Energy Act.. In Drake, the district court i n-dicated "(i]t is well established . . . that that statute, the Atomic Energy Act, was pas-sed pursuant to Congress' power to regulate

- commerce, see 1964 U.S. Code Cong. & Admin.

Nevs, p. 3111,-thus making 28 U.S.C. S 1337 the. applicable jurisdictional provision."

443 F. Supp. at 836; see 13 C. Wright & A.

Miller, Federal Practice and Procedure

-5 3574.

519'F. Supp, at 1272.

. In short, this-case arises under an "Act of Congress regu-

- lating commerce"; in fact, i t is the commercial or business im-pact of one provision-of this Act which is the subject of Plain-tiff's~ challenge. Consequently, Section 1337 grants t'his Court

- original jurisdiction over Plaintiff's Complaint.

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III. This Court Should Not Apply TRAC to this case Defendants in this action have moved to dismiss this case, arguing primarily that this Court lacks subject matter jurisdic-tion pursuant to the principles enunciated in Telecommunicat ions Research & Action Center v. FTC, 750 F.2d 70 (D.C. Cir. 1984)

(" TRAC").4/ Defendants' motion should be denied. TRAC should not be applied to the instant case. However, even if this Court were to find that TRAC should be applied, the proper remedy is not dismissal, but transfer to the Court of Appeals pursuant to 28 U.S.C. 5 1631 (1982).

A. TRAC Does Not Apply When This Court Has Original Jurisdiction Under 28 U.S.C. 5 1337 The preponderance of Defendants' motion concerns the appli-cability of the TRAC doctrine to this case. Plaintiff submits that TRAC is inapplicable here.

TRAC concerned the district court's. intercession, under its general federal question statute, 28 U.S.C. 5 1331, in an agency process which ultimately would be the subject of review in the Court of Appeals. For a number of reasons, most particularly judicial economy, the Court of Appeals concluded that Section 1331 jurisdiction does not exist in those circumstances. In 1/ The Defendants also have asserted that the case is prema-ture. Defendants' Memorandum at 7. But this case i s not prema-ture, as explained in Section V, infra.

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1 4

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l contrast, in this case, original jurisdiction in :nis Court is  !

based not only on Section 1331, but on the Court's authority to reviev a claim that arises under 22 U.S.C. i 1337; consequently, TRAC is inapposite. For, cent;'ary to Def endants ' suggestion, this is not simply a claim of " improper bias," or " review of the NRC licensing amendment decision." Defendants' Memorandum at 3-4. Rather, this is a claim that concerns the meaning of a fed-eral statutory provision. The case happens also to involve im-proper congressional interference. which was the motivating fac-tor for bringing the case to this Court. But the claim at issue is not that interfere.ce; Plaintiff's Complaint concerns the meaning of a federal law. This latter cuestion is properly the subject of this Court's original jurisdiction under 28 U.S.C.

5 1337 B. In Any Event, TRAC Does Not Apply to Challenges to the Legitimacy of Agency Action Based on Factors Extrinsic to the Agency Process Even-if one focuses on the Government's argument, which es-sentially ignores the fundamental jurisdictional basis-for this case under 28 U.S.C. 5 1337, TRAC does not apply to challenges, such as_ours, to an agency's authority to conduct a proceeding.

This is evident from a reviev.of TRAC and its progeny, particu- ,

larly_those cases which focus on the purposes-served by the TRAC doctrine. The_ vast majority of TRAC cases deal with agency inac-tion or delay. See, e.c., In re Monroe Communications coro., 840

-- --._ -- - , - - - - , , . - , - - - - - - -- --,---w., ,-,----+,----,,w-- , a.w.,w,- ,

F.2d 942 (D.C. Cir. 1955); Eavne Enterprises, Inc. v. ';n:ted States, 837 F.2d 486 (D.C. Cir. ]9S8): Cutler v. Haves, 318 T.2d 379 (D.C. Cir. 1987): Bose v. Federal Ele. tion Comm'n., 806 F.2d 1081 (D.C. Cir. 1966); In re American Fed'n of_ Gov't Employees, 778 F 2d 850 (D.C. Cir. 1985); Oil, Chemical & Atomic Workers I n t ' l L'n i o n v . Zegeer, 763 F.2d 1480 (D.C. Cir. 1985) 5 But these cases are not dispositive; instead, it is necessary to focus on cases which challenge an agency's authority to consider a particular claim, for that is the situation here.

In Ticor Title Insurance Co. v, FTC, 625 F. S .ip1 747 (D.D.C. 1986), aff'd, 814 F.2d 731 (D.C. Cir. 1987), several title insurance companies sought a declaratory judgment in dis-trict court that Congress's delegation of law enforcement powers to the FTC was unconstitutional. The FTC had already initiated agency proceedings against the insurance companies, and a cil'e and desist order issued by the FTC as a result of that proceeding would have been subject to review in the Court of Appeals. 625 F.2d at 749. Thus, the companies' constitutional challenge would 5/ As Defendants pointed out, " Plaintiff makes no claim that a final order has been unreasonably delayed." Defendants' Memoran-dum at 7 n.3. It should be noted in this regard that, rather than " requesting and receiving extensions of time tota] ling 75 days," id., in fact Plaintiff requested 45 days simply to resoond to comments on its application. Plaintiff then requested a sin-gle extension of 30 days in light of the prolix nature of the comments submitted by the City of Cleveland, which encompassed approximately 100 pages of text and 200 pages of attachments. In sum, the Defendants' repeated suggestion that Plaintiff has ,

sought to delay the administrative proceeding is wholly unfounded.

_9_

have survived on appeal from the FTC proceeding. S '. 4 F.2d at 732. Relying on TRAC, the Tiror defendants moved to transfer the case to the Court of Appeals. 625 F. Supp, at 749. The distri:t court denied the motion.

n part;cular, the Court stated that " TRAC is limited to claims seeking review of agency process, and does not encompass constitutional challenges to the agency's enabling statute." 625 F. Supp. at 749, Tne court reasoned as follows:

The language :n TRAC admittedly is broad, but it must be read witnin the context of the Court's discuss:on of the nature of their exclusive jurisdiction. :n concluding that District Courts have no jurisdi: tion over requests to compel FCC action, the Court of Appealt emphcsized that Congress, in its statutory allocation of review, intended the

" class of claims covered by the statutcry grant of review power" to be solely in the appellate courts. A constitutional challenge to the FTC's enaoling statute would not ap-pear to be within the " class of claims" con-tenplated by (15 U.S.C.] 5 45(c), which only determines the foru:a in which FTC cease and desist orders shall be reviewed. Had Con-gress also allocated review of constitutional claims to the Court of Appeals, the holding of TRAC would compel transfer of this case.

Further, cases vnich have been trans-ferred to appellate courts under TRAC have only presented claims challenging the manner in which agency process was implemented.

• ** . This limitation is entirely consis-tent with the intended scope of ERAC: in an effort to clarify the law of this Circuit, the Court of Appeals catalogued a series of cases intended to fall within TRAC's holding.

750 F.2d at 75 n.23.2/ All of the cases 6/ .Mene of tne cases listed in this series included a challence to agency arcion based on congressional pressure, or on any basis (Continued Next Page)

1 I

involve challenges to agency process. It j vould strain credulity to deduce fron tne i

generalized terms of IRAC's holding that it was meant to preclude Distr:ct Court review in all circumstances of any case involving an agency which would have "an effect" on appel-late jurisdiction. Otherwise. because of the necessary overlap of federal claims and fed-eral agencies, TRAC would cut a swath through this Court's jurisdiction akin to Sherman's march through Georgia. TRAC accordingly does not apply to remove the present matter from this Court's jurisdiction. Defendant's mo-tion to transfer must be denied.

625 F. Supp. at 750 (fcotnote added).

In its plurality decision affirming the district court's disposition of the case, the appellate panel commented exten-sively on the issue of the district court's jurisdiction under TRAC. In Judge Edwards' view, TRAC itself did not raise the situation presented by the instant case. In TRAC, we dealt specifically with a mandamus action to compel agency action unlawfully withheld; we did not consider whether district courts could properly assert jurisdiction over con-stitutional challenges to agency authority brought under section 1331. In the course of our TRAC opinion, we did consider briefly a (Continued) extrinsic to the agency process. Rather, the bases were predomi-nantly unreasonable agency delay (Public Citizen Health Researcn Grouc v. Comm'r, Food & Druc Adnin., 740 F.2d 21 (D.C. Cir.

1984): Public Citizen Health Research Grouo v, Auchter, 702 F.2d 1150 (D.C. Cir. 1983); Potomac Electric Power Co, v. ICC, 702 F.2d 1026 (D.C. Cir. .983): 1C I Telecommunications Coro, v. FCC, 627 F.2d 332 (D.C. Cir. 2980); and Action for Children's Televi-sion v. FCC, 546 F. Supp. 872 (D.D.C. 1982)); as well as bias and prejudgment (Association of Nat:enal Advertisers v. FTC, 627 F.2d 1151 (D.C. Cir. 1979), cert. #enied, 447 U.S. 921 (1980)); and administrative inaction (Environmental Defense Fund, Inc, v.

Hardin, 428 F.2d 1093 (D.C. Cir. 1970)).

i

_ _ _ - _ _ _ _ - _ - - - - - - - - - - - - - - - ' - ~ - ~ ' ' ^ ~ ~ ~ ~ ^ ~ ~ ~ ~ >

- - - - - - -_ . ~.. - - . . ~..-. . . _ - _ . - - --

-snall class of cases in which a litigant orought a constitutional challenge under sec- '

-tion 1331, see, e.a.,

Association of National Advertisers, and we held that such cnal-

-lenges, like challenges to agency action un-lawfully withheld, were subject to the exclu-sive jurisdiction of the court of appeals.

However, that limited holdinc vas based on the fact that the challences to acency cias and creiudement vere of the sort that a - 5urt of acceals vould routinelv consider at an_ao-peal from final acency action. '

814 F.2d at 743-(opinion of J. Edwards) (citation omitted; empha-sis added).

Similarly, _ Judge Joyce Hens Green stated that she:

subscribe (d) to the view set forth by the District Court in this case, that TRAC is i n-applicaole_to cases involving challenges to the constitutionality of an_ agency's enabling ,

statute. Such cases present questions of constitutional law, which-require no special administrative-expertise to resolve and do

• not fall-within the " class of cases" covered Lby the typical statutory grant of cppellate review power. The TRAC court's concern for duplicative and potentially conflicting judi-cial review, while.pernapr -compelling in cases'that implicate the merits of ongoAng agency proceedings, is relatively

. insubstantial in a case such as this, which involves-a purely legal gusstion.

Id. at:757-58 (opinion of J. Green).

The Ticor-analysis of the TRAC doctrine applies to the in-stant case. As -in_Ticor, the issue which Plaintiff brings to this Court _-- the application of a statute restricting Plain-

-tiff's business activities -- requires-no_special agency exper-tise to resolve. It also involves a purely legal question: was the-statute restricting Plaintiff's business activities meant to

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be applicable;in the current circumstances? Similarly, the suo-ject of. Plaintiff's Complaint does not concern a matter which

-touches on the special administ- ive expertise of the NRC, which

-is radiological health, safety and environmental matters. Rath-er, the case-in-chief here concerns the appropriateness of con-tinued antitrust regulation of Plaintiff's business activities, a subject which the District Court is particularly well qualified to evaluate, and a subject about wh i ef. c,ie NRC has little, if any, special expertise.

Furthermore, Plaintiff's objection to relying on the agency process rather than resorting to the authority of this Court does not involve a challenge to "the manner in which agency process 1 was implemented." Ticot, 625 F. Supp, at 750 (emphasis added), j Instead, it involves a challenge to the agency's authority to continue the administrative process in light of the congressional

-pressure'to which the agency has been subjected. Unlike claims t-of unreasonable-delay, prejudgment, or bias -- and like Ticor's cnallenge to the agency's und'erlyirig authority --- Plaintif f's I

,< challenge is based on a factor extrinsic to the agency process. -

And Plaintiff's assertion of congressional pressure -like its claim on the merits and like the constitutional challenge in

[

1 Ticor, " require [s] no special administrative expertise to re-solve." 'Ticor,.814 F.2d at 758 (opinion of J. Green).

Furthermore, as illustrated in subsection III.C, infra, applying TRAC to the instant case-would likely exacerbate, not-l .

further_"[t}he iTRAC court's concern for (avoicing) duplicative and potentially conflict:ng judicial reviev . . . .

lj. And, as illustrated in the Section V, infra, claims of sufficiently strong congressional pressure are not " challenges . . . of the sort that a court of appeals vould routinely consider on an ap-peal _from final agency action." *icot, 813 F.2d at 743 (opinion of J. Edvards).

To paraphrase Ticor, a challenge such as the present one, which raises an issue of federal statutory lav ard which disputes the agency's authority to act based on the disqualifying effects of congressional pressure, "would not appear to be within the

' class of claims'" that a court of appeals vould routinely con-sider on appeal. Ticor, 625 F. Supp at 750. This i s not a challenge to the outcome of an NRC order based on the agency's error of fact or law. Rather, like Ticor, this 1se involves not-only a statutory interpretation question which'this Court is au-thorized to near in the first i nstance, but presents independent reasons why the agency is no longer _ authorized to act in this case. In sum, this case-is not one in which TRAC's " limited holding" should be applied.

C. Applying TRAC Here Would-Run Counter i-to TRAC's Rationale The policy reasons underlying TRAC also support considera-tion of Plaintiff's claim by the District Court. In TRAC, the Court of Appeals stated:

1 14-l i- .

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Appellate courts develop an expertise ron-cerning the agencies assigned to them for re-view. Exclusive iurisdiction cromotes 3 iudicial economy anc fairness to the liticants Dv takinc advantace of that excer:ise, :n addition, exclus:ve Surisdict:en el:minates duo;icattve and potentially :enflictine review and :he delav and expense ine: dental thereto.

TRAC, 750 F.2d at 78 teitation omitted; emphasis added). In the unusual circumstances presented in this case, applying TRAC would, ironically, cause the duplication, expense, and delay which the TRAC rule was designed to avoid. This is one more com-pelling reason why TRAC should not be applied. ,

!! this case were transferred to the Court of Appeals, the

• TRAC approach-vould embrace the rule set forth by the Supreme Court in-FCC v. ITT World Communiqations. Inci , 466 U.S. 463

-(1964) ("_ITT"). If factfinding is necessary in order for the op-pellate court to review the nonfinal agency action, that court "may either remand the record to the agency for further develop-ment or' appoint a special master under 28 U.S.-.. S 2347(b)(3)." ,

TRAC, 750 F.2d'at 78 (citing ITT, 466 U.S.-at 468).. Applying this rule to.this_ case produces an anomalous, anti-T. .C result.

Tne resolution of the substantive issue central to this case requiren-no factfinding: it is beyond dispute that nuclear power is-not an economically superior alternative; the question,_then, is whether_ antitrust restrictions should continue to be imposed on nuclear power plant owners, such as Ohio Edison. But the

= question offwhether the congressional pressure in this case is

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sufficient to disqualify tne agency frcm furthe considerat.on cf P.aintiff's application is an issue of fact. If this case snca.d go to the Court of Appeals, inat Court vill either send the :sse to the agency, vn;;h would seem inappropriate in view of the ;on-gressional interference in th;s case, or exercise the latter s

option suggested by TRAC, and appoint a special master pursuant to Section 23A7(bs(3). That section provides that (b) When the agency has not held a hearing before ta<ing the action of which re-view is sought by the petition (to rev.ew),

the court of appeals snal determine vnether a hearing is required by lav. After that de-terminatien, the court shall --

(3) transfer the proceedings to a district court for the district in which the petitioner resides or has its prin-cipal office for 6 hearing and determi-nation as if the proceedinas were orici_:

nallv initiated in :ne district court, vnen a hearing is not required by lav and e genuine issue of material fact is presented. The procedure in these cases in the district cear t is coverned by the Federal Rules of Civil Procedure.

20 U.S.C. 5 2317(b)(3) (1962) (emphasis added). Thus, under the guidance provided by TRAC, it is reasonable to expect that if this Court applies TRAC end transfers this case to the Court of Appeals, the Court of Appeals would likely transfer the case back to a district court on the issue of congressional interference.

n summary, 13AG is limited to "the ' class of cases' covered by the typical statutory grant of appellate review power," Ticor, B14 F.2d at 758 (opinion of J. Green), for example, challenges to

- _ . _ - . - _ _ _ _ . - _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ - ~ - ^ - - - - -

- '^^

1 "the ramer in which agency process was ;rp'ener.ted," T m r, eJf .

F. St.pp, at 750 (emphasis added). In contrast, the anstant case trvolves a matter of statutory interpretatton whicn :s a sub;ect of the original jurisdi: tion of this Court. Furthermore, Plain-tiff's assertion of improper Congressional it..erference is a li_c_qr-li ke challenge t o t he agenc y's aut hor i t y to conduct a pro-ceeding. Consequently as in Tjcor, it would be inappropriate to apply TRAG. Moreover, the posture of this case is such thct applying IPAC would not further TRAC's policy of ;udicial econ-emy should this Court transfer this case to the Court of Ap-peals, that Court in all likelihood -- in accordance witn IEA['s directive -- would " transfer the proceedings to a district court

. . . ." :n short, applying IRAC here would actually frustrate IRAC's primary purpose of " promoting judicial economy and fair-ness to the litigants," and "eliminat[ing) duplicative and poten-tially conflicting review and the delay and expense incidental thereto." 13A.q, 750 7.?d at 78.

IV. Even If This Court Were to Determine That TRAC Should Apply, the Appropriate Remedy is Transfer to the Court of Appeals, Not Dismissal TRAC and its progeny clearly indicate that the appropriate response to a determination that this Court lacks jurisdiction under TRAC is a transfer to the Court of Appeals pursuant to 28

~i U.S.C. 5 1631 (1982). The TRAC Court itself stated, "We assume 7/ Section 1631 provides that:

(Continued Next Page)

that, ratner tnan dismiss [sults to whlen TRAC 3pp;1es) for vant of :urisdiction, the District Court will transfer them to this court under 26 U.S.C. 5 1631 (1962)." '50 F.2d at '9. Sini-larly, tne same ponel in Air Line Pilots Ass'n, Int'l v. CAB. ';l F.2d 6; (D.C. Cir. 1964) ("ALPA") cured the flaw in its own jurisdiction over the case by applying Section 1631 and " pro-ceed(ing) on the merits of this case as though it originally had been brought in this Court," since "(nlo useful purpose would be served by forcing ALPA to start over." ALPA, 750 F.2d at 64 E5.

Virtually all of the cases applying TRAC's jurisdictional principles involved a district court's transfer of the case to the Court of Appeals pursuant to Section 1631. See Electronic Data _Svstems Fed. Corp. v. General Servs. Admin. Bd. of Contract Acceals, 792 F.2d 1569, 1572 (Fed. Cir. 1986) ("the district (Continued)

(v]henever a civil action is filed in a r.ourt as defined in (28 U.S.C. 5 610) or an appeal, including a petition for review of adminis-trative action, is noticed for or filed with such a court and that court finds that there is a vant of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could nave been brought at the time it was filed or noticed, and the actiori or apper) shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from vnich it was transferred.

2B U.S.C. 5 1631 (1982).

]

1 I

ourt transferred the case to this court pursuant to 28 l

".S.C. l 1

5 1631," citing TRAC); oil, Chemical, and Atomic Workers : nt',

Union v. Zeecer, 763 F.2d 14BC, 1483 (D.C. Cir. 1965) ("Following TRAC's direction, see 750 F.2d at 79 n.37, the district court transferred the case here, pursuant to 2B U.S.C. S 1631"); United Automcbile Werkers v. Donovan, 756 F.2d 162, 163 (D.C. Cir. 1985)

(same); First Ccmmodity Corp. v. Commodity Futures Trading Comm'n, 644 F. Supp. 597, 600, 602 (D. Mass. 1986) (same):

1 Jamicon, suora, 628 F.2d at 1652 (D.D.C. 1986) ("When a district s court lacks jurisdiction by virtue of TRAC, the correct response is to transfer the case to the court of appeals under 28 U.S.C.

I 5 1631 (1982). See TRAC, 750 F.2d at 79 n.37"); Eantop Int'l Airlinesa .13 c . _ v . Encen, 601 F. Supp. 667 (D.D.C. 1985) (same).E' Thus, even if this Court concluded that it i s prect ded by TRAC, ,

and hence does not have original jurisdiction of this case, the case should be transferred to the Court of Appeals.

1 I

E 3/ Research revealed only two cases in which'a district court dismissed a complaint for lack of jurisdiction. Analysis of these cases suggests that it is likely that neither was based on

, TRAC's jurisdictional principles. In in re Global int'l Airways I

. Coro., 48 Bankr. 849 (W.D. Mo. 1985), it is unclear whether the dismissal was based on true TRAC grounds or on the grounds that the-agency action challenged was a final action subject to exclu-sive statutory review in the court of appeals. Similarly, in United Transo. Union v. Norfolk & W. Rv. Co., 627 F. Supp. 1008,

1015 n.15 (D.D.C. 1985), aff'd,-322 F.2d 1114 (D.C. Cir. 1987),- '

cert, denied, 108 S. Ct. 700 (1988), the dismissal was not based on TRAC grounds, but.on the appellate court's determination that the agency action challenged was in fact an agency order subject to exclusive appellate review.

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l V. This Case is Not Premature and It Would Be Incorrect as a Matter of Law to Dismiss the Complaint Having estab'.1shed that this Court has :urisdiction to hear this case, consideration must be given to the sur. mary argumer.: .,

Defendants' Memorandum in support of its motion to dismiss, that this action is premature. For the reasons stated below, tnis case is ripe for this Court's consideration, and it would be error to dismiss P'aintiff's claim.

A. Under Distr;ct of Columbia Circuit Precedent, This Case is Ready Now for Judicial Consideration

1. The Purposes of the Exhaustion Doctrine Would Not Be Served By Applying It in the Instant Case Plaintiff did first file this case before the agency. Be-cause of that fact, Defendants argue that this case is premature on "[t]he interrelated grounds of finality, ripeness, and exhaus-o tion of administrative remedies."'f Defendants' argument is based primarily on an oversimplification of the doctrine of ex-haustion.

In Cutler v._, Hayes, 818 F.2d 879, (D.C. Cir. 1987) the Dis-trict of Columbia Circuit recently articulated the proper const-derations in a court's application of the doctrine of exhaustion:

The exhaustion requirement . . . should be applied " flexibly, with an eye toward its underlying purposes." These purposes include (1) discouraging the "' frequent and 9/ Defendants' Memorandum at 7

- - _ _ _ _ _ - . . - - . _ - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - " ^ ' " ' " ^ ^ - ^ ^ ~ ^ ^ ~ ~ ' ' ~ ~ ~ ~ ~ " ~ ~ ~ ^

l l

l deliberate flouting of administrative pro-l  : esses;'" (2) protect;ng agency autencry ty allowing an agency the first opportunity to apply its expertise, exer:ise its discretion.

and corre:t : s errers; (3) aiding udic:a1 review by promoting the development of facts dur;ng the administrative proceeding; and (4) prenoting judicial economy by reducing dupli-cation, and perhaps even obv ating Judi::a1 involvement. Since the doctrine is not linked to the power of the court to entertain actions. but ;nstead ireplicates prudent ial considerations, the exnaustion requirement may be waived by the agency, or disregarded by the cour v?(n application of the doctrine would be fvtt to.

918 F.2d at 590-91 (fcotnotes omitted). See als_o Andrade v.

Lauer, 729 F.2d 1475, 1481 (D.C. Cir. 1984) (listing same four purposes). Requir:ng exhaustion vould be futile in this case, since none of the purposes underlying the exhaustion doctrine would be served by requirit.g Plaintiff to avait a final NRC order.

First, avalting a final NRC order would not constitute an opportunity for the agency to " apply its expertise, exercise its discretion, and correct its errors." Cutlet, 818 F.2d at 891.

The issue in controversy -- the meaning of a statutory provision that, under specified circumstances, permits the imposition of business restrictions on an owner of a nuclear power plant -- is not within the area of the NRC's specialized expertise. The im-position of these restrictions was based ur an the then-universal expectation that large nuclear power plants would generate power at a relatively lov cost, and thus would place their owners in an economically advantageous position. However, it is common

_ - _ _ _ . _ . _ . _ _ _ _ _ _ - _ _ - - - - - - - - - - - - - - - - - - - - - - - - - ~ ^ ~ ^ ~ ~ ~ ~ ~ ~ ~ ~~^^

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kncviedge that inis expectat ion has nct rtater:a'1:ed. . "(N)o one anticipa*ed the 2normous cost that vould be associated . . . vatn

.;rtually e/ery nuclear power fac:lity being constructed ;n the United Siates." til_ssiEinliu_ PS v qdjaghilo .Sli;. s sns um ,

106 5. Ct. 2426, 2436 n.9 (1986). Eee also id. at 2432 n.3

("regu.latory delays, addit:onal construction requirements and se-vere inflation led to serious problems in the construction of (the Grand Gulf nuclear power plant) units").

In short, nuclear power did not turn out to be the low-:ost energy source it was expected to be. Consequently. Ohio Edison did not achieve the ccnpetitive advantage from :ts ownership interest in the Perry plant which the restrictive antitrust license conditions were intended to mitigate, ar'd the basis for imposition of the restrictions on Plaintiff do not exist. Nor is the legal effect of congressional pressure on the agency a matter of which deference to agency expertise is necessary, or in which agency discretion can be exercised. Furthermore, the NRC has ccmmitted no error -- the error was that of certain Senators --

and as such, the Ni<C nas no power to correct it.

In sunnacy, a decision to consider the merits of Plaintiff's application voulo involve the interpretation and application of laws that are unt9 lated to any technical " nuclear" issues. For there can be little dispute that nuclear power has not turned out.

to be the relatively lov-cost energy source that it was expected to be. See Mississippi Power t Licht Co. v. Mississippj, 108 S.

.___m.._.___m.-___----

Ct. at 1436 n.9. This fact, plus this Court's familiarity vitn antitrust lav and statutory interpretation, render this forum an i t

extremely appropriate one in which to determine the substantive r

merits of Plaintiff's application to the NRC.

~

Second, Congress rarely threatens to legislatively reverse the outcome of a contested agency adjudication, so refraining from requirino exhaustion in this case vould not encourage the i

" frequent and deliberate flouting of administrative processes."

Cutler, suora, 813 F.2d at 890. Certainly, the Plaintiff i n this case dig not endeavor to flout the agency process. To the con- i trary, Plaintiff filed its action with the agency only after Congress' intervention did it become necessary to resort to this Court, in short, chis is not an instance of a litigant deliber-ately frequenting the court in lieu of the agency.

Nor would the third purpose underlying the exhaustion requirement be served by avalting final agency action in this ,

caset judicial review would not be aided by the development of facts during the administrative proceeding. The case-in-chief involves an issue of law, not an issue of fact, And, as explained above, this is not a case in vbich the prior applica-tion of the agency's specialized knowledge vould aid the Court in determining the substantive merits of the underlying agency adju-dication, since that adjudication vould_ involve the statutory in-I terpretation of-an antitrust lav rather than technical nuclear I

questions. Moreover, as to the threshold question of

. .*-,.+a... . . , ~ . . - - - - - . - _ - - , - , - - - , , , , . . . - , . m,-,.%r..,,.,,,-.--.~-,y-,.,,.-,,7.w, ,._,,,c.,y. -m,m.,.- ,+,~.-..,,.....,,n., - - - - - - -

k congressional interference., the NRC is not i n a position oo:ec-  !

i tively, much less in a better position than the Court, to deter-mine the actual or apparent effects of congressional pressure on its own decision making process.

Fourth, judicial economy would not necessarily be promoted by requiring Plaintiff te avait a final NRC order. This is not an-instance where the agency can " correct its errors." Cutler, 819 F.2d at 891. If this Court entertains Plaintiff's claim, it will be deciding a purely legal question, which is presumptively suitable for judicial review 1E# and on which deference to the agency will do little, if anything, to promote judicial economy. I in both instances, review of the issue of law vill be in the Court of Appeals. The question, here, is the proper court of original Jurisdiction in this case -- there is no issue of .

duplicative decisionmaking. Because the NRC may-vell be '

disqualified after it renders its final decision, efficiency '

i vould dictate that this. Court hear Plaintiff's claim now. I In summary, none of the purposes underlying the exhaustion i

requirement vould be served by requiring Plaintiff to avait the '

l NRC's tinal determination on the issue of law presented by Plain-tiff's antitrust application.

P 10/ See-Ticor, 814 F.2d at-751 (Green, J.),

1 6

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2.

Cases Involving Allegations of Substantial Agency Disqualification Have Not Required Exhaustion of Administrative Remedies in cases involving a' legations of administrative disqualift-cation, the District of Columbia Circuit has generally required exhaustion only when the allegation of administrative disqualifi-cation "vas rather unconvincing on its face." 4 K. Davis, Administrative Lav Treatise S 26:3 (1983). For example, i n Amos T r e.3 ; t Co. v. SEC, 306 F.2d 260 (D.C. Cir. 1962), the court did not require Amos Treat, a corporate litigant before the SEC, to exhaust its administrative remedies prior to seeking judicial resolution regarding the disqualification of one of the SEC Com-missioners. Relying on the fact that the allegations of disqual-ification were contained in a verified complaint and were not controverted by the agency, the Court of Appeals concluded that Amos Treat had made a " substantial showing" that the participa-tion of the allegedly disqualified Commissioner "had rendered the

-(agency) proceedings void and so irrevocably tainted that any final determination which might flow from such proceedings vill be jnvalid." Id. at 263. The court did not require exhaustion off administrative re medies prior to entertaining Amos Treat's claim of-disqualification because the asserted infirmity in the-administrative proceeding was fundamental. Id. at 264. As the court explained:

Enough has been said to demonstrate the basis for.our conclusion that an administra-tive hearing of such importance and vast potential consequences must be attended, not

~25-

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i l

enly with every element of fairness but v:th the very appearance of comp'ete fa:rness. .

i Only thus can the tricunal conducting a quasi-adjudicatory proceeding meet tne bas:c requirement of due process. Ac:Lrdingly, solely en due process grounds. We :enclude the District Court had ;urisdiction to enter-tain appellants' :laim . . . .

id 1 at 267 (footnote omitted).

In F_Liraerald v. Hatpton, 467 F.2d 755 (D.C. Cir. 1972), the Court of Appeals applied the principles elucidate; in Amos Trep*

to excuse an agency litigant from exhausting his administrative remedies where the litigant alleged that the fact that the agency hearing was not open to the public " created an infirmity .n :ne hearing which is a fundamental requirement of due process." i.

at 769. The court described Amos Treat as a case in which "we found ourselves confronted, not with ' procedural irregularities' at the hearing level which could ultimately be the sub;ect of ad-ministrative review, but with a situation where the asserted in-firmity was fundamental." Id. (emphasis in original).

Nor was exhaustion required in Association of National Advertisers, Inc. v. FTC, 627 F.2d 1151 (D.C. Cir. 1979), :ert, denied, 447 U.S. 921 (1980). In that case, litigants before the FTC sought to prohibit the Chairman of the Commission from par- i ticipating in a pending rulemaking proceeding on the grounds that certain of his public statements demonstrated prejudgment con-cerning the central issue in the case, and therefore that he was unable to serve as an impartial arbiter. The court found that resolution of the disqualification issue was appropriate prior to

-2C-

_ _ _ _ _ _ _ _ - _ _ . _ _ . _ - - - - - - - - - - - - - - ~ - - - - - - ^ ~ ~ ' - ~ ^ ~ ~

final agency action, inasmuch as "the challenge to Chairman Pertschuk's further participation involves no disputed factua; issues that demand tne creation of a better administrative record." 1d. at 1156. "Second, the issue involved in this case i l

-- the prejudgment standard required by due process for . . . I rulemaking { proceedings) -- is a pure question of law. The Com-mission can bring no particular experience to bear on its deter- '

mination." id, at 1157.11#

in summary, applicable precedent leads to the conclusion that this Court should consider Plaintiff's claim now. The sta:-

utory interpretation question at issue here is not an issue of which deference to the agency is necessary.

And because of the congressional-interference that has occurred, the infirmity in the administrative proceeding is fundamental; consequently, under the principles enunciated in Amos Treat and National Advertisers, plaintiff need not first participate in an administrative proceeding of questionable due process validity.

11/- Moreover, the instant case is readily distinguishable from cases in which the-District of Columbia Circuit did require com-pletion of the cdministrative process prior to considering the issue of disqualification of agency personnel. For example,'in SEC v. R.A. Holman & Co.. 323 F.2d 284 (D.C. Cir.), Egrt, denied, 375 U.S. 943 (4963), resolution of the disqualification issue re-quired prolonged evidentiary hearings. Similarly, in Associated Press v. FCC, 448 F.2d 1095 (D.C. Cir. 1971), the disqualifica- ,

tion claim was " insubstantial" and involved conflicting factual contentions. The case at bar neither requires extensive eviden-tiary hearings nor :nvolves an insubstantial claim. Indeed, this Court can view for itself the videotape of.the Senate floor de- t i

I bate, attached to the Complaint as Exhibit B, and determine that '

plaintiff's claims of-congressional pressure are botn substantial L and very disturbing.

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_ . . - _ _ _ .__.___m . . _ _ _ _ _ _ _ _ _ _ . _ _ . _ _ _ _ . . _ _ _ _ _ _ . .

D. Undue _ Congressional Interference in An Ongoing Agency Adjudication Compromises the Agency's Actual or Appar-ent impartiality, Which Violates the Litigant's Due Process Rights The semina] case involving the effect of Congressional pres-sure on administrative adjudicatory action is Pillsburv Co. v.

FTC, 354 F.2d 952 (5th Cir. 19661 In Pillsbury, the Antitrust ,

and Monopoly Subcommittee of the Senate Judiciary Committee held a hearing at which several of its members expressed their opin-ions regarding a key issue in the Pillsburv case, then pending before the FTC. The then Chairman of the FTC, Mr. Hovrey, testified at the hearing, and in attendance were several merters  :

of his staff, including the individual who later became Chairman and who wrote the final Pi.lsburv opinion for the FTC, During Chairman Hovrey's testimony, "a number of the members of the com-mittee challenged the correctness of his and the Commission's po-sition" in.the case, and criticized him by means of " questions and comments . . . in which they forcefully expressed their own op'inions." 354<F.2d at 956. The FTC subsequently ruled in accordance with the Senators' opinions. The Fifth Circuit va-ca*.ed the TTC's order on the grounds that when [a_ congressional)-investigation focuses directly and substantially upon the mental decisional processes of a Commission in a case which is pending before it, Congress is no longer intervening-in the agency's legis-lative function, but rather, in_its judicial function. At this latter coint, we become concerned with the richt of private litiaants to a fair trial, and ecually important, with their richt to the apoearance-of impartial-Jty, which cannot be maintained unless thosg o

L V

l

\

1 1

vno exercise the "udicial function are free frcm coverfu. external .r;muences.

d. at 964 (original erphases cnitted; present empnas:s added).

The Court reasoned that administrative agencies, uni:Re Art;:le 1:: judges, are inevitably vulnerable to pressure by tre legis;a-tive branch, since "the federal judicial function, to the extent that it is exercised by administrative bodies, has not been able to make a clean break with the inplicit influence inherent in Congressional control over tenure and salary." lit at 963.

Thus, " con. mon justice to a litigant requires that we invalidate the order entered by a quasi-judicial tribunal that was impor-tuned by members of the Un:ted States Senate, however innocent they intended their condu:t to be, to arrive at the ultimate con-clusion which they did reach." id.

The Oistrict of Co)umbia Circuit has followed the P_ ills 1gry principle that undue congressional interference in an ongoing agency adjudication sacrifices at least the appearance (and per-haps also the actuality) of the agency's impartiality at the ex-pense of the litigant's due process rights. See, 12, News Am.

Publishinc inc. v. FCC, 844 F.2d 800 (D.C. Cir. 988) (citing Pillsburv for the proposition that an " adjudicative deciston made under intense corgressional pressure ' sacrifices the appearance of impartiality'"); consumer Enercy Council of America v. FERC, 673 F.2d 425, 470 n. 185 (D.C. Cir. 1982), aff'd, 463 U.S. 1216 (1988) (citing Pillsburv for the proposition that " congressional interference with { agency) adjudication violates due process");

_ _ _ _ . _ _ _ _ _ _ _ __ _ _ _ _ _ _ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~ " ~ -^ '- ~

and Kor:ao, :nc u_v . Andrgs, 550 F.2d (01 (D.C. Cir.), ter .

! denied, 439 U.S. 1952 (1976) (discussed below). See a:so D.C.

Federation of Civi Ass'ns v. Volpe. 459 F.2d 1231 (D.C. Cir.),

ert. 1enied, 405 U.S. 1030 (1972).

The Congressional pressure at issue in D _C. 2 Federation in-volved an administrative rulemaking proceeding rather than an ad-judication; therefore, the court held that the Pill _sbury doctrine was inapposite. How?ver, had the Secretary been acting in a judicial or quasi-judici61 capacity, his actions would have been disqualifying.

Plaintiffs could have forcefully argued that the decision was invalid because of the deci-sionmaker's bias, or because he had received e3 parte communications. Well-established principles could have been invoked to support these arguments, and plaintiffs might have prevailed even without showing that the pres-sure had actually influenced the Secretary's decision. With reoard to iudicial deci-sionmakinc, whether ov court or agency, the appearance of bias or pressure may be no less ooiectionable than the reality.

Id. at 1246-7 (footnotes omitted; emphasis added). The Court of Appeals reached a similar conclusion in the Koniaq case, holding that regardless of the validity of the congressman's criticism, his letter to the Secretary express:ng that criticism "compro-mised the appearance of the Secretary's impartiality," citing D.C. Federation and Pillsbury. Koniaq, 580 F.2d at 610-611 (em-phasis added).

Thus Defendants are incorrect in concluding that, in order to prevail on its claim of congressional _ pressure, Plaintiff must

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ - - - - - - - - - - ' - - -~ ------ '

necessarily snow that the " legislator's output" nas " actual;y" affected the NRC decisionma<ers. S_ee Defendants' Memorandum at 3-9. In discussing D.C. Federat:on, the Circu2t Court nas stat-ed:

Since the Secretary's action in that case was not Judicial or quasi-;udicial, the court noted that the test for improper interference was whether the congressional action a;; gall;g affected the decision. The court ind tlaird that iL_the quast decision had ceen iudicLal or ud!cial, :t could be :nvalidated bv "the arrearance of clas or pressure." 'Jnder this standard, cressure on the dec:s onna<.er alone, sitneut proof of effect on tne out-22me, :s sufticient to vstate a dec:s:en, Peter Kievit Sons' Co. v, U.S, Army Corps of Engineers, 714 F.2d 163. 169 (D.C. Cir. 1983) (empnasis added; footnotes omitted).^i' The Court of Appea2s thus indicated that proof of "effect on the outcome" is not necessary to invalidate judicial or quasi-judicial decisions, since "the appearance of impartiality (is) the sine cua non of American iudicial justice.'" Peter Kievit, 714 F.2d at 170 (quoting Pillsbury, 354 F.2d at 964). This prin-ciple applies to the NRC adjudication at issue here.1'3/ Thus 12/ The instant case is distinguishable from Peter Kievit since the congressional pressure alleged therein was substantia.'ly less than that alleged in the instant case. In Peter Kievit e al-leged pressure involved tne issuar.ce of letters and inqu. ries from Senator Levin of the Armed Services Committee to Secretary of Defense Weinberger asking for information concerning debarment and suspension proceedings against certain defense contractors.

The Senator also attended an agency meeting on the matter. 714 F.2d at 165-66. Plaintiff's Complaint here alleges substantially more pressure than in Peter Kievit, and the videotape of the Sen-ate proceedings provides demons *.rative evidence of that pressure.

13/ According to NRC procedural rules, all proceedings other than rulemakings constitute adjudications. See 10 C.F.R.

(Continued Next Page) i

. _ _ _ _ _ _ . - - _ _ _ . - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ' ' ^ ^ ^ ^ ^ - ' ^ - ^ ^ ' ^ ^ ~ ~ ' ' ' ' ^ ~

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l Defendants' argument that "pla:ntiff has offered no nas.,s rey:na mere spe:ulation for con:1uding tnat the ' legislator's output'

. . . has intruded :n any way into the Cone.ission's considerat ;o, of Onio Edison's application"ES relies upon a mis:nt erpret at ion of the applicable law.

C. Since Plaintiff Has Alleged Congressional Pressure Suf-ficient to Compromise the Appearance of the NRC's Im-partiality, Dismissal of Plaintiff's Complaint Would be incorrect as a Matter of Law

1. Under Rule 12(b)(6), All Doubts Concerning the Factual Sulficiency of Plaintiff's Complaint Must Be Resolved in Plaintiff's Favor For purposes of a motion to dismiss for failure to state a clain, the material allegations of Plaintiff's complaint must be taken as true ^5/ Jenkins v. McKeithen, 395 U.S. 411, 421. reh'q denied, 396 U.S. 869 (1969); Eamirer de Arellano v_. . Weinberaer, (Continued) 5 2.4(c) (1987) ("' Adjudication' means the process for the formu-lation of an order for the final disposition of the *Tle or any part of any proceeding subject to [the NRC Rules et ..;ctice for Domestic Licensing Proceedings), other than rule making.") See also 5 U.S.C. 5 551(6) & (7) (Administrative Procedure Act def:-

nations of " order" and "ad]udication").

14/ It is ironic for Defendants to attack Plaintiff's inability to offer evidence of an actual intrusion, given Defendants' re-fusal to respond to Plaint:ff's outstanding discovery requests.

,15/ Section 11 of Defendants' Memorandum is a motion under 12(b)(6) for " failure to state a claim upon which relief can be granted."

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745 F.2d 1500, 1506 (D.C. Cir. 1984) (en banc), cert, qran ed and iudament vacated on other grounds, 471 U.S. 1113 (1985), en renand, 788 F.2d 762 (1986). Moreover, the Complaint must te liberally construed in favor of Ohio Edison. Jenkins, supra, 395 U.S. at 421; Sinclair'v. Kleindienst, 711 F. 2d 291, 293 (D.C. '

Cir. 1983) ("the rule that the allegations of the complaint must be construed liberally and most favorably to the pleader is so well recognized that no authority need be cited"). All factual doubts must be resolved and all inferences made in favor of Ohio Edison. Doe v. U.S. Dep't of Justice, 753 F.2d 1092, 1102 (D.C.

Cir. 1985) ("For the purposes of such c. motion, the factual alle-gations of the complaint must be taken as true, and any ambiguities or doubts concerning the sufficiency of the claim must be resolved in favor of the pleader" (emphasis in origi-nal)); Ramirer'de Arellano, supra, 745 F.2d at 1506; Shear v t National Rifle Ass'n, 606 F.2d 1251, 1253 (D.C. Cir. 1979).

Moreover, the Court of Appeals has repeatedly advised that mo-tions to dismiss must be treated skeptically:

-Motions [to dismiss] that would summarily ex-tinguish litigation at the threshold and foreclose the opportunity for discovery and factual presentation, should be treated with the greatest of care. A motion to-dismiss '

should be'cranted only when it appears beyond doubt that, under any reasonable readina of  ;

the comolaint, the claintiff will be unable to prove any set of facts that would sustify ,

relief. _ _

Haynesworth v. Miller, 820 F.2d 1245, 1254 (D.C. Cir. 1987) (em-I phasis added). See also conlev v. Gibson, 355 U.S. 41, 45-46 i

i a l

1.

= --. -~ __ _ . , . . . . . - . . . _ . _ _ - , . . - , . _ . _ _ . . . . - _ , . . . . _ , , -

(1957); Srhu'er ". Un:ted Statep. 617 F.2d 615. 6CB iD.C. C.r.

1979). :n sum, "(a) motien for tailure to state a cla:m upor whicn relief can be granted is generally viewed with d:sfavor ard rarely granted." Doe v. U.S. Dec't of Justice, suora. 753 F.2d at 1102.

2, The Allegations in Plaintiff's Complaint, When Taken as True, Overcome Defendants' Rule 12(b)(6) Motion As summarized abcVe, the District of C;1umtia Circu:t has made it clear that administrative hearings "must be attended, not only with every element of fairness but with *he verv arpearance of comolete fairness. Only thus can the tribunal conducting a quasi-adjudicatory proceeding meet the basic requirement of due process." Amos Treat & Co. v. SEC, 306 F.2d 260, 267 (D.C. Cir.

1962) (emphasis added). According to the facts as alleged in Plaintiff's Complaint, the existence of a continuing threat to legislatively overrule the NRC casts a cloud of unfairness over the NRC's consideration of the merits of Ohio Edison's applica-tion. Thus, whether or not the NRC intends to allow its impartiality to be affected, an unavoidable consequence of the Senate's heavy-handed tactics in this case is that the accearance of NRC impartiality has been critically compromised.

Furthermore, the appearance of partiality in this case is compounded by the fact that it appears that the NRC and Congres-sional staffs communicated with one another regarding the NRC's intent to deny Ohio Edison's application. See 134 Cong. Rec.

S 3258-59.15' Regardless of the substantiality of these references, tbo fact that they were made during on-the-record public debate on the floor of the United States Senate points to the :onclusion that the NRC can no longer opptir impartial regarding the merits of Plaintiff's application.

Defendants argue that the :ongressional pressure at issue involves only "(t]he mere expression of a congressman's opinion about a pending administrative proceeding." Defendants' Memoran-dum at B.

Plaintiff is astounded at Defendants' cavalier mis-characterization of the congressional pressure involved in this esse. Simply viewing the videotape of the official Senate pro-ceedings shows that the pr'estWre involved here consists of far more than "{t}he mere expreerton of a congressman's opinion."

Bather, the congresr. ion 81 pcvasu*e in this case goes beyond even the vehement exprer sion of opinion, and involves instead the threat that certain members of Congress are ready, villing, and ostensibly abla to take action to force the agency to do their bidding.in this particular instance. The Congressmen in question here are r t random, disinterested observers of the NRC regula-tcry scene -- they are senior members of an oversight committee L

1s/ It.vas the Defendant's filing of a motion for a protective order regarding Plaintiff's discovery requests that served to deny Plaintiff an opportunity to obtain factual su; port for its a] legations. Defendants can hardly now hide behind their unwillingness to proceed with discovery by challenging the factu-L al strength of Plaintiff's assertion of congressional interfer-ence.- In any event, as discussed above, such arguments are inap-propriate in a motion to dismiss.

l l

, rv -w _

i with continuing legislative responsto111ty for and control over NRC activities. As illustrated in the videotape, a powerful mer- '

ber of Congress with overstght responsibility for the NRC pub 1;c-ly announced that he is prepared to reintroduce the legislat:on that vou'

a t' o1 the NRC from granting the specific applica-tion. Mt p ,6 0 't p) 'ossesses the on-the-record assurances of at least two of t.t janitors "to help the Senator just i n case the action of the NRC is not successful." 134 Cong. Rec. S 3258 ,

(daily ed. March 29, 1988; statement of Sen. Johnston).

• his public-threat of legislative intervention and veto, which oc-  :

curred as part of the Senate's official business, constitutes for l more than "(t]he mere expression of a congresaman's opinion." i I

In sum, when the Court accepts Plaintiff's allegations as ,

true, as it must in considering Defendants' motion to dismiss, this case raises a single issue of law concerning restrictions placed by government on a business -- something that this Court is especially qualified to resolve. This case also-falls squarely within a narrow but well-established exception to tne exhaustion requirement, namely,-agency disqualification based on undue congressional pressure, i.e., "a situation where the as-serted infirmity is fundamental." Fit:cerald, gupra, 467 F.2d at i '/69 (emphasis in original). Thus, Defendants' challenge to the 1 ,

merits of Plaintiffs' assertions of congressional pressure is ir-l relevant _for purposes of its 12(b)(6) motion. See Defendants' Memorandum at'8-9. Plainly, it would be premature for this Court '

to dismiss Plaintiff's Complaint on such grounds.

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VI. Conclusion I 1

n sum. mary, this Court has original jurisdiction to hear I

! I this case under its federal statutory authority over natters af- i fecting commerce. 2B U.S.C. 5 1337 TRAC is therefore inappli-  !

cable in the present circumstances. In any event, 13AC does not l

properly apply to situations such as the present one, where an ,

agency's authority.to conduct certain proceedings is being chal-lenged in the first instance.

It should be noted, however, _that even if this Court determines that TRAC should be applied, this  ;

case should not be dismissed, but should be transferred to the court of Appeals pursuant to 28 U.S.C. 5 1631.  !

t Furthermore, contrary to Defendants' argument, this case is-not prenature.

None of the purposes of the " prudential" require-ment of exhaustion, Ett Cutler, vould be served in this case by a remand to the. agency. This is particularly true given the sub- ,

stantive' merits of plaintiff's Complaint, which involves an issue of antitrust law- not nuclear technicalities. Similarly, the issue of congressional interference is not a matter within NRC's area of expertice, Furthermore, both the appearance and-the ac- '

tuality of congressional interference make this case ripe for this-court's determination. Finally, because Plaintiff's factual L

allegations must be accepted as true in ruling on Defendants'

-12(b)(6) motion, it vould be error for the Court to_ dismiss;this Complaint.  :

L l '.

t

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l for the reasons stated aoove, Defendants' motion to dismiss should be denied.

Dated: September 21, 1983 Respectfully subnitted, SHAW. P!TTMAN, POTTS & TROWBRIDJE Deborah B. Charnoff f % L w) 8 24 M /5 Gerald Charnoff Robert E. Zahler Margaret S. Spencer 2300 N Street, N.W.

Washington, D.C. 20037 (202) ti6 3- 8 000 Attorneys for Plaintiff OH!O EDISCN COMPANY

_ . . _ . . _ - . . - . . - = . . . . - ~ - - - - - - - - " - - - ' - - -

^ " ^ ~ ~ ~ ' ^ ^ ^

l CERT!FICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing Plaintiff's Memorandum of Points and Authorities in Opposition to Defendants' Motion to Dismiss and Entry of Appearance was mailed first class, postage prepaid, this 21st day of September, 1988, to counsel for Defendants:

Wilma A. Lewis, Esquire Assistant United States Attorney Judiciary Center Building -- Room 4116 555 Fourth Street, N.W.

Washinoton w D.C. 20001 fLE Deborah B. Charnoff lh N6wff ' '

Shav, Pittman, Potts & Trowbridge 2300 N Street, N.W.

Washington, D.C. 20037 (202) 663-8000 -

~ --- -

.- , ~ . , ----,.4,. - . - . - - - rr--,--- -,v----.-.-,-,,r ,,

I IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

)

OHIO EDlSON COMPANY, )

)

Plaintiff, )

)

v. ) Civil Action No. 98-1695 CRP.

)

LANDO W. OECH, JR., et al. )

Defendants. EILED

)

)

OCT 181988 am o.a Dismer Doug DEFENDANTS' REPLY TO PLAINTIFF ' S OPPOSITION TGMBmCT OF 00WWaA MOTION TO DISMISS Introduction Ohio Edison is the holder of an NRC license to operate the Perry Nuclear Power Plant. That licence contains several anti-trust restrictions which Ohio Edison has asked the NRC to remove by the issuance of a license amendment. This lawsuit alleges that the NRC's consideration of Ohio Edison's request for a license amendment has been fatally tainted by Conaressional pressure. Defendants' Hotion to Dismiss explained that plaintiff's claim belonged in the Ccurt of Appeals, if anywhere, but was in any case premature, since the administrative process set in motion by plaintiff's request to the NRC is still in its early stages.

Neither plaintiff's original complaint nor its verbone revamping of the case can obscure the facts that by law (1) the NRC has the statutory authority to impose and to remove antitrust

L license conditions and (2) those NRC decisions are reviewable only

, in the Courts of Appeal. This case is a premature effort to end-run this Congressionally mandated process.

ARGUMENT I.

The District Court Lacks Jurisdiction Over This Case Plaintiff has presented no convincing araument or legal authority to support its view that, despite the administrative process established by Congress, the District Court nevertheless has original jurisdiction over this matter under 28 U.S.C. 5 1337 To the contrary, the Atomic Energy Act sets forth clear and spacific administrative procedures for the Ccmmission to adhere to regarding antitrust questions in license amendment proceedings, with judicial review exclusively in the Court of Appeals.

Congress specifically empowered the NRC to "make a finding as to whether the activities under the license would create or maintain a situation inconsistent with the antitrust laws." 42 U.S.C. S- 2135 (c) (5) . Prior-to doing so, the NRC must obtain the-advice of the Attorr,*5 caneral, allowing 180 days for his review. 42 U.S.C. S' 213 5 (c) (1) . Upon receipt of the Attorney General's advice, the NRC must pub 1xsh that advice in the Federal Register. 42 U.S.C. S 2135 (c) (5) . If the Attorney General advises thst there may be adverse antitrust aspects, he may also recommend that a hearing be held. Ibid. On the basis of the Attorney General's advice and on-the basis of its findings after any y .

hearina on the antitrust question, the Commission "shall hase the authority to issue or continue a license as applied for, to refuce to issue a license, to rescind a license or amend it, and to issue a license with such conditions as it allows appropriate." 42 U.S.C. S 2135 (c) (6) (emphasis added). Jurisdiction over clains to review such NRC decisions lies clearly and exclusively in the Courts of Appeals. 42 U.S.C. 5 2239(b); 28 U.S.C. S 2342(4).

Nothing in the law suggests that 28 U.S.C. S l.'37 supplants this statutory scheme. To the contrary, specific statutory provisions giving the NRC jurisdiction in the first instance and, on appeal to the Court of Appeals take priority over general jurisdictional statutes such as Section 1337. For example, in Simmons v. nrkar.sas Power & Licht Co., 655 ?.2d 131 (8th Cir. 1981), the Eighth Circuit held that where a specific statutory provision of the Atomic Energy Act provides jurisdiction, more general jurisdictional statutes such as 28 U.S.C. S 1331 (federal question), 28 U.S.C. 5 1337 (regul,tior of commerce), and 28 U.S.C. S 1361 (mandamus) are supplanted by 42 U.S.C. S 2239(b),.which provides for jurisdiction in the NRC with appeal exclusively in the Court of Appeals. Id. at 133.

.Moreover, Ohio Edison's own admission and ace. ion in initiating the proceeding before the NRC, in effect, acknowledges thnt the NRC has original jurisdiction in license amendment proceedings on antitrust questions. Plaintiff makes it clear that but for its allegations of congressional. pressure, " plaintiff would still be seeking relief in that administrative forum." See Plaintiff's Memorandum of Points and Authorities in opposition To 3 ,

_ , . ~ _ _ _ . - - _ , - _ ._ . ~ ... - . _ . _ _ _ _ _ . _ . _ _ _ . ~ . _ . _ - . _ . . _ _ _ _ . _ - . _

Defendants' Moti;? To Dismiss

(" Plaintiff's Memorandum") at 3.

Thus, plallt!"f's contention that it was never required to brine its claim directly to the agency because 29 U.S.C. 5 1337, the commerce statute, gave this court oricinal jurisdiction, (see Plaintiff's Memorandum at 3), is both incorrect as a matter of law and inconsistent with its own actions and assertions.

Despite plaintiff's inconni. stent posturino, the fact remains that the Atomic Energy A t clearly establishes the procedural scheme governing the NRC, the Courts, and plaintiff.

Subject matter jurisdiction over this claim rests with the NRC in the first instance and, on appeal, exclusively in the Court cf Appeals. Plaintiff will have ample opportunity to raise a charae of improper influence or bias in that forum.I I

Plaintiff's reliance for jurisdiction on Drake v. Detroit

_ Edison Co., 443 P. Supp. 833 (W.D. Mich, 1978),and United States Nuclear Reculatory CommisFion v. Radiation Technoloov Inc., 519 F. Supp. 1266 (D.N.J. 13 flit), is totally misplaced 7, Drake did not involve a question of jurisdiction regarding the antitrust sections of the Atomic Energy Act ("The Act") versus 28 U.S.C.

S 1337. Rather, it dealt with tho issue -of whether plaintif f's complaint was fatally flawed for i~ allure to state the grounds on which federal jurisdiction was baand as required by Rule a of the Federal Rules of Civil Procedure. The Drake court found no need for plaintiff to even amend its complaint since it was evident that the action challenged -- the transfer of 20% ownership interest from a utility to two co-ops -- arose under a federal statute (28-U.S.C. S 1337), and that statute has no jurisdictional amount provision. Id. at 836. Furthermore, the Court stayed the proceeding pending final agen',y action under NRC regulations that expressly provided for administrative enforcement procedures involving violations of the Act. The Court reasoned that the MPC was best suited for resolving in the first instance whether any provision or regulations of the Act had been violated. The Drake Court found "to proceed further at this point would be duplicative and create the potential for inconsistent results." Drake, 443 F. Supp. at 841.

(FOOTNOTE CONTINUED ON NEXT PAGE) 4

l l

Nothinc else argued by plaintiff cives this court jurisdiction over this case, plaintiff has inaccurately characiarized this case as a challence tc the acency's very authority to conduct the license amendment proceedinc on the entitrust questions. _S_ee Plaintiff's Memorandum at 8, 15. It further seeks to dispose of Telecommunications Research Action Center v. FTC, 750 F.2d 70 (D.C. Cir. 1984) (" TRAC") by arcuine that TRAC is limited to cases asserting jurisdiction under 28 U.S.C. S 17?' instead of both that statute and 28 U.S.C. S 1337.

Sea Plain t's Memorandum at 8. Both of these arguments are red herrings.

First, this case does not involve a challence to the constitutionality of the antitrust provisions of the Atomic Energy Act, 42 U.S.C. SS 2135 et seg. Nor does it -- or indeed could it

-- involve a challenge to NRC's authority in the first instance to amend operating licenses to remove antitrust restrictions,in view of the explicit provisions in 42 U.S.C. 5 2135. Instead, this case involves the plaintiff's charge of agency bias because of alleged congressional pressure. This is enti.eiy different from (FOOTNOTE CONTINUED FROM PREVIOUS PAGE)

In Radiation Technolocy, the Court found the NRC properly filed its collection action in District Court instead of the Court of Appeals pursuant to specific statutory authority to do so under Section 234 of the Atomic Energy Act, as amended, 42 U.S.C.

S 2282. Radiation Technolocy, 519 F. Supp. at 1268, 1271.

Section 234 is not~at issue in this cace.

5

en assertion that the acency lacks authority to conduct the license amendment proceeding in question.'

Second, the argument that TRAC applief 11y to cases asserting jurisdiction under 28 U.S.C. S 1331 is spec lous. It lanores the basic and well established principle of TRAC.namely, that if exclusive jurisdiction of a final agency order lies in the I

Court of Appeals, then any suit seeking to raise an interlocutory challenge to agency action is subject to exclusive review there.

TRAC, 750 F.2d at 75; see also Airline Pilots Assocjation International v. Civil Aeronautics Board, 75u P.2d 81 (D.C. Cir 1984) ("ALPA") (claims of unreasonable agency delai and agency bias). See discussion cf TRAC and ALPA in Memorandum of Points and Authorities in Support of Defendants' Hotion To Dismiss

(" Defendant's Memorandum") at 2-5.

Although plaintif f admits that TRAC applies to cases involving agency bias (see Plaintiff's Memorandum at 11, n. 6, 12), it argues that because this case involves questions of commerce and not nuclear safety, TRAC's purposes would not be 2

Because this case does not challenge the constitutionality of the antitrust provisions of the Atomic Energy Act or the NRC's authority to conduct license amendment proceedinas, plaintiff's reliance on Ticor Title Insurance Co. v. FTC, 625 F. Supp. 747 (D.D.C. 1986), aff'd, 814 F.2d 731 (D.C. Cir. 1987' is misplaced.

See Plaintiff's Memorandum at 9-14. Ticor involved a e nstitutional challence to the Federal Trade Commission's ("FTC")

basic authority ta initiate and prosecute complaints against those suspected of violatina the FTC's enabling statute. In any event, because an administrative preceeding was'already underway involving other defenses, 731 F.2d at 732, the Ticor court ruled that the available administrative remedies should be exhausted first before judicia] review of the constitutional question. Id.

at 'i41-42.

6

served here. See Plaintiff's Memorandum at 12-15. Despite plaintiff's bare assertionc, TRAC's purposes most definitely are served. This case falls squarely within the " class of claims" which Conaress intended to be adjudicated administrative 1y by the NRC and judicially reviewed in the Court of Appeals. See Plaintiff's Memorandum at 10 (quoting Ticor Title Insurance Co.

v. P.T.C., 625 T. Supp. 747, 750 (D.D.C. 1980), aff'd, 814 F.2d 731 (D.C. Cir. 1987)). .

Indeed, Congress could not have been more explicit in its indication in the Atomic Energy Act that license amendment proceedinas, including any antitrust issues associated therewith, are within the specific province of the NhC,and judiciul review is

-in the exclusive jurisdiction of the Court of Appeals. See 42 U.S.C. SS-2135, 2239; 28 U,S.C. S 2342. Plaintiff's contentions notwithstanding, the NRC and Court of Appeals are therefore ideally suited by statute and by practice to consider antitrust questions in an NRC license amendment proceeding.

Plaintiff also asserts that "this case  ; iires no fact-finding" and that "it is beyond dispute" t,r melear power is not an economically superior energy alternative. See Plaintiff's Memorandum at 15. Apparently these assertions are offered-to support'a claim that this Court should exercise jurisdiction over this case because no special agency expertise is allegedly required to determine whether to lift the antitrust restrictions on the license in view of the current state of nuclear power economics. Even this argument, however, does not escape plaintiff's inconsistent posturing.

7

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Ohio Edison tacitly admits that the issues in this case are more complex than asserted by acknowledaina that it needed a total of 75 days to respond to both the number and "the prolix nature" of comments filed in opposition to its request to eliminate the antitrust conditions on its operatino license. See Plaintiff's Memorandum at 9, n. 5. Indeed, plaintiff'a need for 75 days to respond simply confirms what defendant has been arcuing all alona: special agency expertise is required on the antitrust questions and an adequate agency record should be created in this already ongoing license amendment proceeding.

Further, plaintiff's assertion that the antitrust conditions placed on plaintiff "were based exclusively upon the then universal e::pectation in this country that large nuclear power plants would generate power at a relatively low cost, and thus would place their owners, including Ohio Edison, in an economically advantaged position," (see Plaintiff's Memorandum at 2), ignores: (1) the need to develop the facts upon which the antitrust license conditions should be either retained or eliminated by looking at the current economic conditions and future economic projections regarding nuclear power, and (2) the Licensing Board's extensive findings against Ohio Edison in its 1977 licensing decision for a wide range of anticompetitive behavior. See LBP-77-1, 5 NRC 133, 188, 190, 195, 197, 202, 204, 205, 208. Those factors indicate stroncly that more is involved in the antitrust license conditions at issue than plaintiff asserts.

8

In any event, even assumino that thin case is as easv and straightforward as plaintiff suaaests, such factors have no bearing on the jurisdictional question. The Court of Appeals is uniquely qualified to resolve cases without factual disputes; moreover, it can decide easy cases as well as hard ones.

It is thus clear that, under TRAC , this Court lacks jurisdiction over this matter. Plaintiff's arauments to the contrary must be rejected.

II. This Case should Not Be Transferred To The Court of Appeals, But Should Be Dismissed As Premature This Court should dismiss this case as premature rather than transferring it to the Court of Appeals undec 28 U.S.C.

S 1631 because the plaintiff has provided no prrsuasive reasons why it should r.ot be required to exhaust its administrative remedies. The Commission has not yet rendered a decision on whether plaintiff's request for a license amendment should be granted or denied. If plaintiff's license amendment request is cranted, no court intervention whatsoever would be necessary. On the other hand, if the license amendment is denied by the NRC staff, under the statutory scheme that Concress has established Ohio Edison can request a hearing on the issue by the NRC's Atomic Plaintiff's contention that the Court of Appeals would transfer the matter back to the District Court is not only highly speculative, but ignores the fact, discussed below, that this case is premature.

9

_-_- - _ ___ __--_ _- _ - - _ - - - -- -- ~

Safety & Licensing Board. That decision, in turn, would be reviewable by the NRC's Atomic & Safety Licensina Appeal Board and then by the Commission. If necessary, the plaintif f can then seek review before the Court of Appeals. This review process provides ample opportunity for plaintiff's arguments to be heard before forums with special expertise to hear such matters. Plaintiff provides no sound argument to support its view that this case is so unique that the Congressionally established administrative process should be bypassed in favor of judicial interference in an agency proceeding already underway. Indeed, the court of Appeals has recently dismissed a case closely analogous to this action -- another interlocutory appeal allecing bias by an agency.

In strong language, fully applicable to this case, the Court observed :

Although we have exercised our jurisdiction to review claims prior to final agency action in the past, we have only done so sparingly and hesitantly. ... As we have made clear in many varied contexts, includino cases presenting claims of agency bias, " judicial intervention in uncompleted administrative proceedings, as distinguished from judicial checking by statutorily -

established method of review, must remain very much the exception rather than the rule."

Eastern Central Motor Carriers Ass'n v. United States, No. 88-1170 (D.C. Cir. June 2, 1988), slip op at 3 (citations omitted).4 This 4

Cases relied on by Ohio Edison to support its argument for administrative disqualification prior to a final agency order are inapposite since the facts here do not in any way mirror the e::ceptional circumstances outlined by these cases. See Plaintiff's Memorandum at 25-27. For example, plaintiff cites Amos Treat and Company v. SEC, 306 F.2d 260 (D.C. Cir. 1962) for support but fails to note that Amos Treat is no longer good law following the D.C. Circuit's decision in TRAC. See discussion of (FOOTNOTE CONTINUED ON NEXT PAGE) l 10 -

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is not the' rare case requiring judicial intervention prior to -

final agencyLorder.5

-When all is said and'dono, plaintiff's arguments boil down to an assertion that Ohio Edison will not get a fair hearina '

before the NRC. Plaintiff's request for immediate judicial intervention based on this contention, however, must fail.-

(FOOTNOTE CONTINUED FROM PREVIOUS PAGE)

Amos Treat and Jamison v. FTC, 628 F. Supp. 1548 (D.D.C. 1986).-

Defendant's Memorandum at 4-5 and n.2. Plaintiff also cites for

. support Fitzoerald v. Hampton,-467 F.2d 755 (D.D.C. 1972) where the court correctly found Distiict Court-jurisdiction because the administrative procedure there was fundamentally flawed by the agency's. denial of plaintiff's constitutional due process right to an open: hearing,.despite plaintiff's repeated requests for-one.

• Id. at 769. Moreover, in both Amos Treat and Fitzoerald, each-agency had the-first opportunity to decide about the matters involved. Id.

In Association of National Advertisers, Inc. v. FTC, 627 F.2d 1151 (D.D.C. 1979), the court found the rare circumstance for judicial review prior to final acency action. There, the case

-involved a claim-.of bias by the- FTC Chairman; there were no disputed factual' issues that required the creation of a better-administrative: record; _the agency had had an adequate opportunity-

-toiexplain-why the chairman need:not: recuse himself; and only a

= question of law was involved regarding a prejudgment; standard in an agency rulemaking' proceeding. Id. at 1156-57 Here, by plaintiff's own admission the NRC has made no error, (See Plaintiff's Memorandum-at 22), and-the only NRC_ individuals even_

remotely charged with bias ~are unidentified NRC staff members-mentioned in the Senata discussion.

0 Pillsbury Co.'v. FTC, 354 F.2d 952 (5th Cir. 1966), cited.by plaintiff, see Plaintiff's Memorandum, p. 28, is inapplicable.

The colloquy on the Senate floor here in no wayErises to the level of searching Concressional . inquiry occurring in Pillsbury,where 18 months after=the'FTC issued an interlocutory order, but prior to the examiner's initial decision on the merits and before'the

-Commission's final decisicn, the FTC Chairman-and some staff, including the General Counsel, who was later named FTC Chairman whenithe proceeding was still pending before the -PTC,- appeared before~ extensive Senate and House committee _hearines. Id. at 953, 955. See Defendants' discussion of facts below.

k' 11

First, the facts upon which plaintiff bases its charce of congressional interference and resulting agency bias are considerably blown out of proportion by plaintiff's characterizations. The facts alleged in plaintiff's ecmplaint (ac opposed to plaintiff's characterization of those facts) are that Senator Metzenbaum proposed an amendment against Ohio Edison's request for a license amendment. 134 Cong. Rec. S3257-58 (daily ad. March 29, 1988). During the colloquy on Senator Metzenbaum's proposal, Senator Johnston stated that his staff had received communications from unidentified NRC staff members which indicated that plaintiff's requested license amendment was going to be denied. Id. at 3258. No one succested that either the NRC Commissionert or the Licensing Board or Appeal Board judges responsible for deciding the outcome of plaintiff's proposed license amendment had formed such an opinion. Moreover, almost i

immediately after making the statement concerning the alleged NRC staff communications, Senator Johnston corrected himself, stating "in a pending case they (the NRC) simply will not tell you what j they are going to do." Id. at 3259. Ultimately, Senator Metzenbaum's colleagues convinced him to wait until the NRC L -decided the matter before he took any-further action regarding the

[ proposed legislation. Id.

Plaintiff's Ittack on Congress' alleged intervention in the-onooing NRC consideration of the requested license amendment is' ironic given the congressional decision to let the NRC process run its course. It is even more ironic that the plaintiff is seeking to obtain immediate judicial review when, by its own 12 -

admission, "the MRC has committed no error." See Plaintiff's Memorandum, at 22. No harm would ensue to Ohio Edison by following established administrative procedures that were in fact initiated by Ohio Edison and that Ohio Edison itself acknowledoes are error free.

Second, plaintiff's request for immediate judicial review ignores the clear lesson from ALPA, that the usual presumption in favor of withholding judicial review until after __

final agency action " applies with even greater force in the context of a bias claim than it does with a claim of unreasonable delay." ALPA, 750 P.2d at 88 (emphasis added). As the Court in ALPA noted:

Unlike unreasonable delay, bias does not pose the threat of totally defeating the Court of Appeals' power of review. Also, claims of bias do not have a congressional mandate analocous to 5 U.S.C. S 706, instructing courts to compel agency action unreasonably delayed. Therefore, the arguments for deferring review merit increased attention.

Id.; Eastern Central Motor Carriers Ass'n, suora; see also Ticor, 814 F.2d at 743 (opinion by J. Edwards), upon which Ohio Edison relies. See Plaintiff's Memorandum, at 12.

In short, plaintiff maxes no cogent arguments to support its view that there should be judicial interference in the NRC's licensing process before it has run its course. Contrary to plaintiff's contention, the purposes which underlie the exhaustion doctrine would be well served in this case by allowing the administrative process to continue because the NRC would have an opportunity to apply its expertise in an area which has been entrusted to it by Congress; an administrative record, includino I

13

the necessary fact-findings, would be created by the agency, thus aiding any subsequent judicial review; and the necessity for judicial review might be obviated depending on the decision rendored by the NRC. Moreover, while the foregoing benefits would be lost if immediate judicial review were afforded, the plaintiff has identified no harm that it would suffer if the administrative u cess were to proceed. Indeed, the plaintiff would be able to raise any and all of its arguments, includino agency bias, in the Court of Appeals, if necessary, efter thu administrative process is completed. Accordingly, this case should be dismissed.

14 .

I CONCLUSION For all of the forecoing reasons as well as the reasons stated in defendants' openino memorandum, defendants' motion to dismiss should be granted.

7tfully submitted, OF COUNSEL:

WILLIAM C. PARLER

,, $WL d]u n. i/

WE SNS', D.7.'" bay No. 177840 General Counsel i _. . reN torn WILLIAM 11. BRIGGS, JR.

Solicitor _

e __

t

{N D. BATES, D.C. Bdr No. 9.54927 n.;sistant United Stataq Attorney S. LEO SLAGGIE /j/// /

Deputy Solicitor ///lS/) .

~

af WILMA A. EWI S , A) . C . Bar No. 358637 Assis United States Attorney PETER CRANE Counsel for Special Projects GERALDINE FE!!ST Attorney office of the General Counsel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Dated: October 18, 1988 i

e 15

/

CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing Defendants' Reply To Plaintiff's Opposition To Motion To Dismiss has been mailed,.

postaga prepaid, this 18th day of October, 1988 to:

Gerald Charnoff, Esquire SHAW, PITTMAN, POTTS & TROWBRIDGE 2300 N Street, N.W.

Washington, D.C. 20037 bb$

WILMA A. LEWI'

'n Assistant' ited D.C./ Bar #358637 Sthtes-Attorney United States Attorney's Office Judiciary Center - Room 4116 I

555 - 4th Street, N.W.

Washington, D.C. 20001 l

l l

l.

l 9

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA Ohio Edison Company, Plaintiff,

v. Civil Action No. 88-1695 Lando W. Zech, et al., f Defendants. ,,

OPINION OF CHARLES R. AICHEY ,

'L UNITED STATES DISTRICT JUDGE INTRODUCTION Plaintiff, a public utility in northern Ohio, claims that the Nuclear Regulatory Commission ("NRC") cannot impartially consider its application to amend and remove certain restrictive conditions imposed pursuant to the anti-trust laws on its license to own and operate the Derry nuclear power plant because of alleged threats by at least one Senator to overrule by legislation any amendments the NRC makes to plaintif f's license.

Plaintiff asserts that these threats make it impossible for the NRC to evaluate its application impartially and, therefore, will result in a denial of due process. As such, plaintiff is asking the Court to issue an order suspending the restrictive conditions of its license or, in the alternative, to order the NRC to suspend the restrictive conditions.

Now before the Court is defendants' motion to dismiss this suit for lack of jurisdiction pursuant to Fed. R. Civ. P.

12 (b) (1) or, in the alternative, to transfer this case to the court- of Appeals. Defendants contend that this Court lacks

l 2 l jurisdiction because the Atomic Energy Act vests the court of l Appeals with exclusive jurisdiction to review final orders of the NRC and the relief requectc*i by plaintiff might affect that jurisdiction. Sag Telecommuni.mtions Research & Action Center v.

f.C.C., 750 F.2d 70 (D.C. Cir. 1984). Defendants also contend that this suit should be dismissed as it is premature because plaintiff has failed to exhaust its administrative remedies.

Upon careful consideration of defendants' motion, the supporting and opposing legal memoranda, oral arguments by the parties, and the underlying law, the Court finds that it has no authority to determine whether plaintiff's suit is premature because the Court of Appeals has exclusive jurisdiction over requests for interlocutory review of NRC proceedings. The Court will, therefore, transfer this case to the Court of Appeals where l

jurisdiction properly lies.

BACFGROUND l

In 1977, the NRC granted the construction permit for the Perry Nuclear Power Plant. At that time, the NRC held a hearing on the antitrust implications of licensing the Perry plant pursuant to its statutory authority. e S_en 42 U.S.C. $ 2135.

Based on those hearings, the NRC imposed eleven conditions restricting the business activities of Perry's owners, one of which is plaintiff.

Plaintiff contends that " [t]he expectation regarding the competitive advantage of large nuclear power plants that would e . - - .- , ,

l 3

generate power at lower cost was a necessary precondition to the NRC's imposition of the Perry antitrust conditions." Camphini at 1 11. This expectation did not, however, come to fruition.

As such, plaintiff applied to the NRC for a suspension of the restrictive conditions on its license on Septembcr 18, 1987.

On March 29, 1988, while plaintiff's application was still pending before the NRC, but not decided which is still the case today, Ohio junior Senator Howard M. Metzenbaum, the Chairman of the Senate's Subcommittee on Energy and Natural Resources, proposed an amendment to the proposed Uranium Revitalization, Tailings and Enrichment Act. This amendment provided that "[t]he Nuclear Regulatory Commission shall not suspend or modify the application of any antitrust provision contained in the Perry operating license No. NPF-58, as such provision applies to any license of the Perry Nuclear Powerplant, Unit 1." 134 Cong. Rec.

S. 3257 (daily ed. March 29, 1988).

Debate on Senator Metzenbaum's proposed amendment ne'!er got underway because it was agreed that the Senate would defer any consideration of the amendment until after the NRC had comp 1Sted its consideration of plaintif f's application for removal of the restrictions on its license. Despite Senator Metzenbaum's withdrawal of the amendment until the NRC has acted upon plaintiff's application, plaintiff claims that the NRC cannot give plaintiff's application fair consideration because of the threat of being legislatively overruled. Legally, this is speculation and conjecture at this point.

I l

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I.

11115 COURT DOES NOT HAVE JURISDICTION TO DETERMINE WHETHER THE NRC SHOULD SUSPEND THE RESJRICTIVE CONDITIONS ON PLAINTIFF'S LICENSE BECAUSE THE COURT OF APPEALS IS VESTED WITH EXCLUSIVE JURISDICTION TO MAKE THIS DETERMINATION.

The law of this Circuit is that "where a statute commits review of agency actica to the Court of Appeals, any suit seeking relief that might affect the Circuit Court's future jurisdiction is subject to the exclusive review o: the Court of Appeals."

Telecommunications Research & Action v. F.C.C_ ( "TPAC" ) , 750 F.2d 70, 72 (D.C. Cir. 1984).

P The first prong of the test set forth in IIMC requires this court to determine at the outset whether any " statute commits review of (NRC] action to the Court of Appeals." The NRC proceeding in which plaintiff wishes the Court to intervene was commenced under 42 U.S.C. $ 2239. The Court of Appeals has exclusive jurisdiction to review final orders of such proceedings. Sja.g 28 U.S.C. 5 2342(4). Accordingly, the first prong of the test required by TRAC has been satisfied.

The other prong of the test set forth in TRAC requires the Court to determine- whether the relief requested by. plaintif f might have an effect on the Court of Appeal's future jurisdiction. TRAC, 750 F.2d at 75. This prong has also been satisfied because if this Court were to order, as requested by plaintiff, the removal of the ..:ntrictions here involved itself

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or to order the agency to remove them, such action would deprive the Court of Appeals of the opportunity to review a final order issued by the NRC, As uuch, this Court lacks jurisdiction over this case because exclusive jurisdiction lies in the Court of Appeals.

Plaintiff, however, tries to distinguish its case from other cases to which the analysin of TlaC has been applied. In particular, plaintiff argues that its complaint " involves a challenge to the agency's authority to continue the administrative process in light of the congressional pressure to which the agency has been subjected." Elainti f f 's OrDa:Li.tign to Defendant's Motion to Dismiss (" Plaintiff's onnonition") at 13.

As support for its argument that Il%Q does not divest this Court of jurisdiction, plaintiff cites to Ticor Title _Innurance Co. v.

EIC, 625 F. Supp. 747 (D.D.C. 1986), aff'd, 814 F.2d 731 (D.C.

Cir. 1987). In Ilgsr, the district court held that it had jurisdiction to consider a constitutional challenge to the Federal Trade Commission's enabling statute. San Ticar, 62 5 F.

Supp, at 749.

The holding of lie 2r is inapposite and uncontrolling because plaintiff's claim, at bottom, is not a challenge to the NRC's authority as was the case in Ticor. Rather, plaintiff's claim is one of alleged agency bias or prejudgment arising from Senator Metzenbaum's previously proposed legislation that might, if passed by Congress, overrule any suspension by the NRC of the antitrust restrictions on plaintiff's licen=se. Allegations of l

6 bias do not confer jurisdiction upon this Court; it is now well recognized that TPAC applies to cases in which there are allegations of bias within an agency or that the agency is improperly motivated. sfag Ticor Title Insurance Co. V. F.T.C.,

814 F.2d 731, 743 (D.C. Cir. 1987)(explaining that agency bias challenges "like challenges to agency action unlawfully withheld, (are) subject to exclusive jurisdiction of the court of appeals."); se e DipA IBAQ , 7 50 F . 2 d a t 7 5 n . 2 3, 77 n.30; Air Line Pilots Ass'n v. Civil Aeronautics Board, 750 F.2d 81, 88 (D.C.

Cir. 1984).

Plaintiff also tries to distinguish this case from TP.AC and its progeny by asserting that this Court has jurisdiction pursuant to 28 U.S.C. 5 1337 (regulation of ccamerce). The problem with this contention is that it considers the jurisdictional questions posed by this case out of context. The Atomic Energy Act expressly confers authority upon the NRC to determine whether it should amend antitrust restrictions on a

-license when a licensee files an application seeking such amendments. Moreover, the Act also vests the Court of Appeals with exclusive jurisdiction to review the -NRC's decisions concerning whether to amend a license. Effq 42 U.S.C. 52239; 28 U.S.C. 5 2342(4). These specific jurisdictional provisions of the Atomic Energy Act " supplant" more general jurisdictional statutes such as 28 U.S.C. 5 1337. Sfdt Simmons va Arkansas Power i

& Licht Co., 655 F.2d 131, 133-34 (8th Cir. 1981) . Accordingly,

plaintiff's attempts to distinguish this case from others to

, - ~ -

1 7

which IBAC has been applied are unavailing and erroneous.

II.

BECAUSE TPAC VESTS TCMRT OF AEEEALS WITH EXCLUEIXE JURISDICTION OVER THIS SUIT. THIS COURT WILL_ TEAL! SEER THIS CASE TO THE COURT OF APPEAL 4 FOR A DETERMINATION OF WliETHER THIS Et)1T IS PREMATURE.

The IEAs decision makes it clear that this Court has no

'" general federal question jurisdiction" over interlocutory appeals from agency action or inaction when a statute vests review over final agency action in the court of appeals.'

J,3ni son v. F.T.C., 628 F. Supp. 1548, 1552 n.4 (D.D.C. 1986).

Because TRAC divests this Court of jurisdiction over interlocutory review of NRC proceedings, this Court, as a Court of limited jurisdiction " lack (w) the power to presume the existence of jurisdiction in order to dispose of [this) case on any other grounds." Tuck v. Pan American Health Orcanization, 668 F.2d 547, 549 (D.C. Cir. 1981) (citing Bors v. Preston, 111 U.S. 252 (1884); Turner v. President, Directors & Co. of the Bank of - North America, 4 U.S. (4 Dall.) 8, 11 (1799)). It- is, therefore, up to the Court or Appeals to determine whether this case is one of those rare and exceptional cases deserving of judicial review prior to the conclusion of agency proceedings.

Accordingly, the Court will transfer this case to the Court of Appeals pursuant to 28 U.S.C. 5 1631 for that Court's determination of whether plaintiff is entitled to any relief in the premises as the allegations in the papers before the Court,

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8

)

no matter how sugar-coated, fall exclusively within the jurSsdiction of the Court of Appeals.

The Court will issue an order of even date herewith memorializing these findings.

Decerter , 1988 A 7 i .

• /

CHARLES R. RICiiEY UNITED STATES DISTRICT DGE

f IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT OHIO EDISON COMPANY, )

)

.. Petitioner, )

)

v, ) No. 89-1014

)

LANDO W. ZECH, JR., et al., )

)

RECElVED Respondents. )

) FEB 271989 CLERK 0F THE UMTED STATES COURT OF APPEAts PETITION FOR WRIT OF MANDAMUS 1

I. Introduction Pet;;ioner Chio Edison Company ("0E") seeks a determinat:cn by this Court of an antitrust issue. This case involves a straightforward legal question particularly within the expertise of the federal courts. Resolution of this question does not require the special expertise of the Nuclear Regulatory Commis-s.cn ("NRC") . radiolog; cal health, safety, and env.ronmenta.

matters,

.or does it involve revisiting :ne NRC's prior factus.

determinations regarding OE's competitive conduct. Rather, it

,nvolves a legal question of statutory interpretation regarding the appropr';3:eness and permissibility of the continued impost-tion by the NRC of eleven antitrust license conditions currently

onstraining Petitioner's business activities. Imposed in .'977, these restrictive conditions are still in effect, and will 1/ This caption rc' acts the Court's directive in its Jan. 26, 1989 Order. However, as this pleading explains, Petitioner seeks from this Court primarily a substant;ve, dispositive order, and only secondarily an order directing the agency involved to grant the request.ed relief.

1

ontinue to improperly ;imit CE's business act;vities un ;; suen time as'they are suspended.

CE initially brough: :his claim dire::1y cefore :ne NRC, However, bse'ause of undue interference in this adjud4rst; n oy

ertain United States Senators, resolution of the case is no longer available before the NPC.

CE therefore sougnt relief from the U.S. District Court for the Distri::

of Columbia on the :urisdi::ional bases of 23 U.S.C.

55 1331, 1337 and 1361.

The distri:: : cur: transferred :he case to this Court under 28 U.S.C. 5 .'631 (:ransfer to cure vant of jurisdi::!on).

The distr::: :our: concluded that such a transfer was required by Tele:ommunications Research & Action Center v.

FCC, 750 F.2d 70 (D.C.'Cir. 1984) (" TRAC").*/ Accordingly, Peti-tioner .ov loo <s to this Court for the relief it previous;y sought in the district court, i.e., an order suspending the restri :ive antitrust license :enditions :ha: pntinue to be imposed on OE, or, alternatively, an order mandating tha: :he NRC suspend the conditions.

This Petition is' filed in compliance with this Court's January 26, 1989 Order directing Petitioner to " file a pleading stating its arguments . . . ." This Petition therefore sets

]/ "(W]here a statute commits review of agency action to the Court of Appeals, any suit seeking relief that might affe::

the Circuit Court's future jurisdiction is subject o the exclusive review of the Court of Appeals." TRAC, 750 F.2d at 72. 42 U.S C. 5 2239(b) and 28 U.S.C. 5 2342(4)-give :ne-Court of Appeals exclusive jurisdiction to review final NRC L erders.

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forth tne reasons vny the restrictive antitrust .;;ense ::nd -

tions must, by las, be suspended, and why the congressional pres-sure that has occurred in this case precludes the NRC fr:n Ta<;,;

that legal determination.3/

II. The Antitrust License Conditions Must Be Suspended CE is a co-cwner cf tne Perry Nuclear Power Plant t"Per y"i, which is located in northern Dhio, and was constructed and as been cperated pursuant to 1: censes :ssued by the NRC. Sect. n 105(c) of the Atomic Energy Act (42 U.S.C. 5 2135(c)) author;:es the NRC to issue nuclear .icenses suc:ect to conditions vni:h restrict tne business act;vities of nuclear plant owners, ;f the NRC determines that activities under the license would " create or maintain a si*.uation inconsistent with tne antitrust laws." Sec- -

s

on 105(c'(5).

Whe.: Section .05(c) was enacted in 19'0,5 there was a un:versally-held expectation that nuclear power would be a lev-cost energy alternative. The purpose of Section 105(c) was to prevent an owner of a nuclear plant from realizing an unfair com-petitive advantage in the electric supply marketplace. The .eg- '

!slative history of Section 105(c)E' and the judicialE# and 3/ Petitioner's position is set forth in greater detail in its Complaint (filed June 22, 1988) and in its Memorandum of Points and Authorities in Opposition to Defendants' Motion to Dismiss (filed Sept. 21, 1988), both of which are contained in the case file transmitted to this Court in accordance with Judge Richey's Dec. 15, 1988 transfer order.

i/ Pub. L. No.91-560, reprinted in 1970 U.S. Code Cong. &

Admin. News 4981.

5/ See, e.o., Prelicensing Antitrust Review of Nuclear Powerplants, Hearing Before the Joint Comm. on Atomic (Continued Next Page)

administrative decisions '/ involving Se:: ion .25(c) confirm :,a:

the expectation regarding the ant.:ipated econonic superior::y :f nuclear power ves :he ut; versal presumption of a Section 1:5(: 1 determination to impose business restrictions on an NRC licensee.

Before the Perry :enstruction permit was issued in 1977 :e NRC, pursuant to See :on .'05(c), held a hearing on Perry's poten-tial antitrust ramifications.8/ Based on that hearing. *he NRC .

(Continued)

Energy, Part 1, 91st Cong., .' s t Sess. (1970).

ing,.Roland W. At that near-Donnem, the Director of Policy the Antitrus Division of the Department of Justice, Planning in observed, "With regard to the establishment of a large-scale nuclear power plant, it i s___ n e c e s s a r v to first determine the extent to which such clants nicht afford the cart:cipants tnerein decistve :cmcetitive aavantace over their compet:-

tors.

The economies of scale asscciated with such large plants are truly substantial, and access to this icv-cos power may well be decisive in any ccmcetitive race cetween electric cover companies," 'd, at 9 tempnasts added).

l s/ See Alabama Power Co. v. NRC, 692 F.2d 1362, 1368-69 (11 h Cir. 1982), cert. denied,-464 U.S. 816 (1983) ("Those vno

' -had. worked vi:h the government were no: to be the uncridled beneficiaries of the windfall head start they would have when private parties were allowed.into nuclear power produc-tion.")

l 2/ See, e c., Consumers Power Co. (Midland Plant, Units 1 and 2), ALAB-452, 6 N.R.C. 892, 900, 1098 (1977); Houston Lichtino & Power Co. (South: Texas Project, Units 1 and 2),

CLI-77-13, 5 N.R.C. 1313, 1316 (1977); Kansas Gas & Electri:

c L Co. (Wolf Creek Generating Station, Unit No. 1), ALAB-279, i N.R.C. 559, 568, 569 (1975); Louisiana Power-L Lich: Co.

(Wacerford Steam Electric Generating Station, Unit 3 r, CLI-73-25, 6 A

..E.C. 619, 620 (1973).

}/ See Toledo Edison Co._ (Davis-Besse Nuclear Power Station, Una:s 1,-2 and 3), ALAB-560, 10 N.R.C. 265 (1979) (hereinaf-ter " ALAS-560"); Toledo Edison Co., (Davis-Besse Nuclear Power Station, Units 1, 2 and 3), LBP-77-1, 5 N.R.C. 133 (1977) (hereinafter "LBP-77-1").

issued the cons:ru:::on perm;: for the fa::lity sue:e : t o e l e v e, n I

conditions restricting the business activities of the Perry owners, including CE. The <ey assumptien underly:ng tne ;mpes:-

tion of thes'e :enditions was the expe::ation tha ?erry wou.d generate power at a relat:vely low cost, and :na: the 1: cense conditions would mit; gate or obviate the :ompe .:.ve advantage :f ownersnip of :nat low-cos; power.4/ There was absolutely no d;s-agreemen; among the part :: pants in that hearing 5at nuclear power from Perry vould be lov :n cost.

That expe :ation vent unfulf lled. During the 1970s and 1980s, general econem;c trends, :ncluding high interest rates and high inflat:on, had major and adverse impacts on the costs of nuclear plants. including Perry.'1/ '

In addition, nuclear plants 9/ Sge, e.o., ALAB-560, 10 N.R.C. at 274, 281; LSP-77-1, 5 N.R.C. at 141, 143. '55 and 237, .

22/ :n the late 1970s and early 1980s, th:s country excer:enced its longest and deepest recession since the Great Depres-sion. :n January 1980, the prime interest rate was over 15% by the end of that year, it exceeded 21%. Inflation in 1980 averaged 13.5%. Record prime rates continued througn mid-1982; by January 1983, the prime rate stabilized at tne "lov" rate of about 11%. This combination of high inflation and high interest rates caused dramatic increases in the cost of borrowed funds to capital-intensive industr:es, such as the utility industry. See OE's Application to Amend the Perry Operating License to Suspend the Antitrust Conditions Insofar As They Apply to Ohio Edison Company, Docket No. 50-440A (filed before the Director, Nuclear Reactor Reg-ulation, NRC, Sept. 18, 1987) (hereinafter "OE Appl.") at 68-69 and references cited therein.

Moreover, the 1973-74 Arab oil embargo and the result-ing energy crisis in this country stimulated intensive energy conservation efforts, which dramatically slowed the rate of growth of demand for electricity. See OE Appl. at 65-66, and authorities cited therein.

_ - - ~ ~ ~ ~ ~ ~ ~ - -

t were faced with er.:ensivt, unanticipated, f.equent;y-: hanging, and costly regulatory requirements imposed by the federal govern-11 ment.- /

As th4" Supreme Court recently recogni:ed *7 -"e :urrent reality is that nuclear power is nign cost, not 1 v cost.EE' il/ A 1985 study concluded that approximately ~1 :o 76 per:en; of- he increased costs :n constructing nuclear plants was caused by :ne evolving and expanding nuclear regulation.

Sooz, Allen and Hamilton. :nc., The Imoac cf Reculation en Nuclear Power Plants. Another study ind;cated that during

ne 1970s and 19803, the numcer of engineering manhours fer a typical plant grew at an average rate of 17.2 per year.

Budvant, Ramesh N. (Burns and Roe, Inc.), "The Data Base fcr U.S. Power Plants," Power Encineerino, Jan. 1985. Simi-larly, the effort expended by the NRC in a typical operating license review rose from about seven professional staff-years in the mid-1970s to about twenty in the early 1980s.

See CE Appl. at 63-64.-

n addition to the constantly-changing NRC technical i requirements, :ne enactment and stric: judicial interpreta-tion of :ne National Environmental P0licy Act of 1969 (NEPA) mandated extensive and costly environmental analyses, reviews, and hearings. See, e.a., vermon: Yankee Nuclear Power Coro, v. Natural Resources Defense Council, :nc., 435 U.S. 519, 532 n.10-(1978) (following Calver Cliffs' Coordinatinc Comm. v, A.E.C., 449 F.2d 1109 (1971), the Com-mission revised its NEPA regulations and " undertook exten-sive environmental review of the proposed nuclear power plants, requiring (the_ applicant) to file a lengthy environ-mental report"). Other federal environmental laws passed in this timeframe include the Clean Air Act Amendments of 1970 and 1977, the Federal Water Pollution Control Act Amendments of 1972, and the Endangered Species Act of 1973. -

12/ Mississiooi Power & Lichtoco, v. Mississicci, 108 S. Ct.

2(28 (1988). "(R]egulatory delays, additional construction requirements, and severe inflation led to serious problems in the construction of (the Grand Gulf nuclear power plant}

units." Id. at 2432 n.3. "(N]o one anticipated the enor--

mous cost- nat would be associated . . . vi:h virtually every nuclear' power facility being constructed in the United States." Id. a: 2436 n.9.

13/ In 1976, the anticipated 30-year levelized cost (including capital,. fuel, operations, and maintenance) for a nuclear (Continued Next Page) y- -. v , .w- , , , - . , . . , . . - - < - . - . , , -,o,___--.--.

Secause the actual e: ncmics of nuclear power proved :o ce dif-ferent from those anticipated perry did no: turn out to ce :he economically superior source of energy : hat i: vas expe::ed ::

be, and OE' failed to achieve the competitive advantage tha: the restrie::ve ;icense :endi: ions were intended to mitigate.*5'

n :hese circumstances, he statutory pur; ses of Se:::on 105(:) :an no longer be served by the continued impcsiti:n of :he restr::::ve conditions en CE, since the creation or maintenance of a situation inconsistent v::h the antitrus: laws cannot be attributacle to OE's ownership interest in Perry. However appro-pria:e the restrict:ve conditions may have been in 1977, given the expe::ations then prevailing, under current circumstances there can be no anticompetitive ramifications to OE's ownersnip interest in Perry. The continued restriction of OE's business activities is therefore no longer appropriate or legally permis-sible under the narrow scope of the NRC's ant:: rust review, vni:P is s:rictly limited to situations in which the licensing of a (Continued) power plant would have been about S27 per megawatt-hour (MWh). The actual 1987 30 year levelized cost for Perry was S184 per MWh. In contrast, the 1976 projec:cd 30-year

-levelized cost of a coal plant would have been 338 per MWh.

The 1987 levelized cost estimate of a coal plant was appr:x-

-imately 592 per MWh. Thus Perry power turned out to be almost seven times as expensive as anticipated, and about twice as expensive as power from a coal-fired plant. See OE

-Appl. at 70 and references cited therein.

11/ CE has no quarrel with the factual determinations regarding its competitive conduct made by the NRC prior to imposing the license conditions. Those determinations are irrelevan:

to resolution of the-legal question at issue in this case.

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nuclear facility creates or maintains an anticompet.::ve s;;ua.  !

l tion in the relevant ma.ketplace.23 ':/ '

It is unfair and inpermiss;ble for the NRC to continue to 4,mpose antirrust conoi' ions on OE vhen the NRC is V:thot a legal basis for concinuing to do so. C'early, OE cannot abuse pcVer not granted to :: cy its Ownership interest in :ne Perry plan:.

and it is beyond deba:e that OE does not possess market pcVer attributacle to that ownership.  :: :s s:mply not vi:nin w. e N3C's authority to oversee the business conduct of an owner-

'icensee when :ne ovner's interest in the nuclear facility does not centribute :o an ability :o engage :n anticompeti::ve con-duct.

The license conditions currently appended to the Perry

'icense require OE :o provide wheeling, in erconnections, and other ancillary services to various municipal electr:: systems in and around northern Ohio.26' Pa r ado x i c a l .' y . these mun:cipal sys-tems-do not use these conditions to obtain Perry power;^"' :ney 15/ Of course, the business conduct of CE, and all NRC licensees, remains within the realm of the Departmen: of Justice's continuing antitrust oversight. See Section

.105(a), 42 U.S.C. 5 2135(a) (providing that nothing in the Atomic Energy Act relieves any person from the operation of the Sherman Act, 15 U.S.C. 55 1-7; the Wilson Tariff Act, 15 U.S.C. 55 8-11; the Clayton Act, 15 U.S.C. 55 12-27; and the Ff:deral Trade Commission Act, 15 U.S.C. 55 41-49).

11/ Appendix C, Perry Nuclear Power Plant, Unit .Mo. 1, License No. NPF-56. Licensing Condition Nos. 2 (interconnections), 3 (wheeling), and 5-8 (sales of maintenance power, emergency power, and economy energy, and shar:ng of reserves).

17/ Licensing Condition No. 9 requi?2s Perry's owners to make Perry power available to local municipal electric systems (Continued Next Page)

_g.

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se

nem to :ir:umvent :ne higr. :vst Of power fr:m :he Per y plant, and to cbtain power from other. :heaper sources."ai To

ent:nue to preserve the license condit: ens in :nese :;r:;m-stan:es vetid sanction NRC :enduct that ;.= beyond the se:pe :f the agency's statutory authority, vould ccnst:tute a pervers:en of tne it.: ended purpose of Sett:on 135(:), and vou;d e unfatr.

!!I. The Congressional Interference A. The Facts The ::rcumstances of the Congressional pressure :n the NRC to deny CE's application to suspend tne restr:::ive antitras:

1;:ense conditinns are cescribed in paragraphs l' through 23 of OE's Compla.nt. The Congressi nal a:tions are also .l.'us: rated rsthand in the videotape appended to the Complaint as a; bit A, and :n the Congressional Record transcript appended to the Complain: as T.xhici: 3. The f:llowing summary Of : nose (Continued) '

and other wholesale power purchasers. :n 1978, tvanty-five such entities gave notice of a general intent to obtain access to nuclear power under this condition. Except for a

'.979 meeting between these entities and Perry's owners, and an abortive attempt to set up a financing venicle for such access, the requesting entities took no further steps to obtain access to Perry power. See OE Appl. et 54.

11/ For example, CE's service contract with American Municipal Power -- Ohio, Inc. ( " A!4P-O" ) , the power croker for OE's municipal customers, permits those municipalities to " shop around" for low-cost capacity (for which CE provides the necessary transmission services), while guaranteeing the municipalities sufficient capacity to meet their require-monts if lover cost alternatives are not available. See CE Appl. at 56-60 and references cited therein.

.g.

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events is intended to preface and augment the Complaint and t.e graphic exhibits atta:hed thereto.

On March 29, 1983, vnen OE's appli:ation was pend:ng ref:re the NRC, Se ator Howard M. Metzenbaun proposed a legislat;ve amendment designed expli:itly to preclude CE tand other Perry  :

cwners) fr0m obtaining relief from the NRC license : ndit: ens 11miting CE's business benavior notwithstanding the change ;n t.c economics of nuclear power. Senator Metzenbaum :s the Chairnan of'the-Subcommittee an Energy Regulation and Conservation of :he Senate Committee on Energy and Natural Resour:es. Others involved in the eciloquy that ensued regarding Senator Metzenbaum's ame.tdment were Senator Bennett Johnston, the Chair-man of the Senate Committee on Energy and Natural Resources, and Senator Wendell Ford, a member of the Senate Committee on Energy and Natural Resources. Senator Metzenbaum was not simply :riti-cal of the NRC; he c'early put the agency :n not:ce of the '

unacceptacility of an outtame in this particular adjudication other than the one which he personally thought was appropriate:-

denial of CE's' application. Senator Metzenbaum's legislation inter:eded in the middle of an ongoing agency adjudication, by .

proposing the following: "The Nuclear Regulatory Commission.

shall not suspend or modify the application of any antitrust- (

license provision contained in the Perry operating license No. NPF-58,Las-such provision applies to any licensee.of the Perry Nuclear Powerplant,' Unit '1."AA!

-19/ 114 Cong. Rec. S 3257 (daily ed. March 29, 1988) (attached l to Complaint as Exhibit A).

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.-, - . ~ . . - _ . . ~ , . , . .__....._,....i.-,_,_ , A m.,,,_ _,L,...,..,_,_...,_,.m._m,,v,.,,.., - , , , , , ,.,~.,.m ...r,.. .fr . , -

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l l 9uring tne :01;cquy regard:ng Senator Metzenraum's amend-ment, several Senators .ndicated that the congress;onal and NRc staffs apparently nad communt:ated w;th one anetner regard;nc t ,e NRC's intent to deny CE's applicat;on: tne suggestion under;y;,g the discuss; n was that be:ause Of this tac;t understanding among the :engressiona.' and NRC staffs, there magn ce 90 .eed f:r Se -

m ator Metzenbaum's amendrent.'"y Moreover, Senator Metzenca r Obviously expected that the NRC would receive tne unn:stakeac;e message ".e had just sent: ": have a hanch that somehow they are mon :: ring vnat s going on on the floor here since it is not a private meeting since it is a matter :oncerning tnem and cer-tainly the Congressional Record will speak to the debate n.

'.'pon h i s colleagues ' assurances that tney would

" help the Senator :':st ;n :ase the act;on Of the NRC is not successful,"22/ that is, Just in case OE's application were 9ct -

denied, Senator Metzenbaum withdrev his amendment. The Senator also expressed h;s intention to reintroduce nis proposal if tne NRC vere to grant OE's application.23/ -

20/ See id, at S 3259-59. OE attempted to determine the actual extent of such communications by filing a set of ten inter-rogatories and a request for production of documents (on June 22, 1988). This attempt was unavailing; the NRC filed a motion for a protective order rather than respond to those discovery requests. The district court never ruled on :ne motion for a protective order.

11/ Id. at S 3259 (statement of Sen. Metzenbaum). The NRC has not denied that Senator Metzenbaum's expectation was cor-rect.

22/ !d. at S 3258 (statement of Sen. Johnston).

13/ See id. at S 3259.

_ _ _ . _ . . - - . . . - _ - - _ - - - - - - - - - - - - - - - - - - ~ ~

This congressional pressure goes ceyond even the venement expression of eptnion, and involves instead the threat t,at :er-tain irmbers of Ccngress are ready, villing, and able to f:rce tne agency .o do their bidding. The Senators in question mere are not randen, dis:nterested observers of the NRC regulatory scent --

they are sento: memcers of an NRC overs;ght : mm:: tee with :entinuing legislative respons bil:ty for and control over NPC a:tivities. As :llustrated in the videotape, a powerf;; mem-Oet of Congress with oversight respons:bil! y for the NRC puo-licly aniiounced that he is prepared to reintroduce spe:!fi: leg-

!slation that would prevent the NRC frem granting CE's application.

Moreover, he possesses the on-the-record assurances of at least two other senators "to help the Senator :ast :n case the a: tion of the NRC is not successful." id. at S 3253 (state-ment of Sen. Johnston). This public threat of legislative :nter-vention and veto, vni:h occurred as part of tne Senate's offi:;a; business, constitutes undue congressional interference in an ongoing agency adjudication, s

B. The Congressional Pressure In This Case Has Fatally Compromised The NRC's Actual Or Apparent ImpartialLty Precedent in this Circuit clearly establishes that undue

engressional interference in an ongoing agency adjudication com-promises the agency's actual or apparent impartiality, which vio-lates the litigant's due p.ocess rights. The seminal case involving the effect of Congressional pressure on administrative adjudication is Pillsbury Co. v. FTC, 354 F.2d 952 (5th Cir.

.'966).

n pillsourv, a Senate succcmmittee held a naar;ng a:

which several of its members expressed their opinions regard;,g a

<ey issue in the P;11sburv case, then pending before :ne FTC.

Commission

• Chairman Hovrey testified at the hearing, which was attended oy several members of his staff, including the inc;vid-gal vno vas to write the final Pillssyry opinien. During :ne

hairman't testimony, "a nuncer of the members of the committee l

I

hallenged the corre:: ness of his and the Commission's posit;:n" '

in the case, and' criticized him by maans of " questions and )

t comments . . .

in whi:h they forcefully expressed their own :p;n-ions." 354 F.2d at 956. The FTC subsequently ruled in ac:or-dance with the Senators' opinions. The Fifth Circuit vacated the FTC's order on tne grounds that:

when (a Congressional) investigation focuses directly and substantially upon the mental decisional processes of a Commission in a case vnico is pending cefore it. Congress is no longer ;ntervening in tne agency's legis-lative function, but rather, i n its judicial function. At this latter point, we oecome concerned with the right of private litigants to a fair trial, and equally important, with their right to the appearance of impartial-ity, which cannot be maintained unless those who exercise the judicial function are free from powerful external influences.

Id. at $64. The Court reasoned that since administrative agen-

ies are inevitably vulnerable to pressure by the legislative l-t branch, " common justice to a litigant requires that we invalidate the order entered by a quasi-judicial tribunal that was impor-tuned by members of the United States. Senate, however innocent they-intended their conduct to be, to-arrive at the ultimate conclusion which they did reach." id.

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This Cir:u;t nar followed tne Pillsburv pr;. :ple .at und e Congressienal :nterference ;n an ongoing agency ad;udi at.cn sa:-

rif;:es the appearan:e land perhaps the actua;ity as vel;) cf .e agen:y's i.dp'rt:ality a at the expense of the 1;t;gant's due pr:-

cess rignts.';', :n the 22 C. Federation case, wht:h :.volved on administrative rulemak;ng proceeding ratner .an an ad:ud::at.:r, the :ourt he'd that tne Pillsbury doctrine was ;.appos;te.

Hev-ever, the :ourt stated that nad the Secratary ceen act.ng .n 3 judi ial or quasi-judicial capacity, Plaintiffs could have forcefully argued that tne de::s;on was invalid because of the dect-s;orma<er's bias, or because he had received 23 carte communications. Well-established princ ples could have oeen invoked to support these arguments, and plaintiffs might have prevailed even vitnout snoving that the pres-sure nad actually influenced the Secretary's decis;on. With regard to Judicial dect-stonma<ing, vnether oy court or agency, the appearance of bias or pressure may be no ;ess oo:ectionacle tnan tne reality.

c ld. at .246 ' (footnotes Omitted)."/

14/ See, e.c z, N e ws An . Publishinc inc. v. FCC, 344 F.2d SCO iD.C. C:r. 1988) (citing Pillsburv for the proposition that an adjudicative decision made under intense congressional pressure ' sacrifices the appearance of imoartiality'");

consumer Energy Council of America v. FERC, 673 F.2d 425, 470 n.185 (D.C. Cir. 1982), aff'd, 463 U.S. 1216 (1983)

(citing Pillsbury for the proposition that "congressicnal interference with [ agency) adjudication violates due pro-cess"); and Koniac. Inc. v. Andrus, 580 F.2d 501 (D.C.

Cir.), cert, denied, 439 U.S. 1052 (1978) (discussed belov).

See also D.C. Federation of Civic Ass'ns v. Voice, 459 F.2d 1231 (D.C. Cir.), cert, dented, 405 U.S. 1030 (1972) (dis-

ussed below).

25/ This Court reached a similar :onclusion in the Koniac case, holding that regardless of the validity of the Congressman's (Continued Next Pagei

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l

n discussing D.C. 7ederation, this Court nas stated:

Since the Secretary's action in that :ase was not ;udicial or quast-;udi::al, ne court noted that the test for improper interferen:e was whether the congressional action actuall /

affected tne decision. The court ;ndi:ated that :f the datision had bgen *udicial cI quas: ud;c:al, 1: :ould te invalicated by "the appearance of bias or pressure." ' fader this standard, pressure en tne dec:s:cr a<et alene, vitnout oroof cf effect :n .e :ut-

ore, .s suff;;;ent to vacate a de :s:er Peter Xievit Sons' Co. v. U.S. Army Corps of Eno;neers. ";4 F.ld 163, 169 (D.C. Cir. 1993) (emphasis added; footnotes omitted).$5' Thus proof of "effect on the outcome" is noi necessary to invali-date Judicial or quasi- udicial decisions, since "the appearance of impartiality (is) the sine cua non of American dudicial jus-9 tice.'"*7/ Peter Kievit. 714 F.2d at 170 (quoting Pillsbury, 354 (Continued) .

riticism, his letter to the Secretary expressing that critism " compromised the accearance cf the Secretary's impartiality," citing D.C. Federation and Pillsburv.

Moniac, 580 F.2d at 610-611 tempnasis added).

11/ The instant case is distinguishable from Peter Kievit, in which the Court required exhaustion of administrative reme-dies. In Kievit, the alleged pressure :nvolved the issuance of letters and inquiries from Senator Levin of the Armed Services Committee to Secretary of Defense Weinberger asking for information concerning debarment and suspension proceed-ings against certain defense contractors. The Senator also attended an agency meeting on the matter. 714 F.2d at 165-66. In this case, however, OE alleges substantially

-more pressure, and the videotape of the Senate proceedings provides demonstrative evidence of that pressure.

12/ :n support of its motion to dismiss before the district court, the NRC erronously suggested that OE vas required to show that the " legislator's output" had in fact intruded into the NRC's consideration of OE's application. See "Mem-orandum in Support of Defendants' Motion to Dismiss" at 9 (Aug. 22, 1988). As indicated in the text, this argument is clearly wrong.

F.2d at 964); see a:so Ames Treat s Co. v. SEC. 3:6 T.:d :63, ;6' l

(D.C. Cir. 1962).

In light of the NRC's .'ack of appa"ent impart;al;ty :aused oy ne ongress;0nal pressure in this case, the NRC cannot .aw-ful.'y continue to ad]udicate CE's application. The senate's tartat to legislat;vely cverrule an NRC de :sion favorse;e :: :E has :r;ti:al.'y mprom: sed at 'esst the appearance of *he NRC's impartial ty. Su n pressure alone is suffi:;ent te render invalid the NRC's ultimate decision.

n its motion to dism:ss f;1ed in the distric :ourt, tne NRC argued that this case should not be sub;ect to ;udicial :en-sideration before CE had exhausted its adminstrctive remedies.19/

As CE has already discussed at length,'9/ the purposes of ine doctrine of exhaust;on of adminis.rative remedies vould not ce served by avaiting a final NRC order in tnis case. To summar;:e:

(1) requ; ring OE to exhaust its administrat;ve remedies vould no:

const:tute an opportunity for the NRC to " apply its expert;se, exercise its discretion, and correct its errors,"1E since the issue in controversy is not within the area of the NRC's special-ized expertise; (2) Congress rarely threatens to legislatively ruverse the outcome of a contested agency adjudication, so 11/ See Defendants' Motion to Dismiss and Memorandum of Points and Authorities in Support (filed Aug. 22, 1988).

19/ See CE's Memorandum of Points and Authorities ;n Opposition to Defendants' Motion to Dismiss (filed Sept. 21, 1988) at pages 20-24, 30/ Cutler v. Hayes, 818 F.2d 879, B91 (D.C. Cir. 1987).

1

( refraining from requir:ng exnaustion :n tn;s :ase vou;d net encourage the " frequent and deliberate ficut ng of adm:nist at.ve processes," id. at 890: (3) :ud::ial rev;ev veuld not be 3;ded oy the develcpment of facts during the administrat.ve prcceed:ng, s:nce the case-;n-chief :nvolves primar;;y an :ssue of '. a v , not

,,i an .ssue c! fact, see id. at 691:'2' and (4) Judic:a; econcmy would not necessarily oe prcmoted, since any final NRC order -

this case vould involve a legal quest;on, whicn :s presumpt ;ve.;-

suitable for ;udicial review, and regarding vnicn deferen:e to the agency vill do little, .f anytning, to promote :udicial eten-omy, see lj.

Moreover, in cases involving allegations of adm:nistrative disqualification, this Court has generally required exhaust;on of administrattve remedies only when the allegation of administra-tive disqualification "vas rather unconvincing on :ts face." 4 K. Davis, Adm i n i s t ra t ive '_av Treat i se 5 26:3 (1983). See, e. ,,

Associatien of National Advertisers, *nc. v. FTC, 627 F.2d ..'51 (D.C. Cir. 1979), cert, denied, 447 U.S. 921 (1980) (exhaustion _

not required where resolution .f the disqualification issue vas appropriate prior to final agency action, inasmuch as (1) "the challenge to Chairman Pertschuk's further participation involves no disputed fcctual issues that demand the creation of a better 31/ As to the threshold question of congressional interference, the NRC obviously is not is a position objectively -- mucn less in a better position that this Court -- to determine the actual or apparent effects of congressional pressure on its own decision-making process.

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i admi n i s t r a t ive r e c o rd , " id.2 at 1156, and (2) "the :ssue :nvo.ved in this case -- tne pre;udgment standard required by due pr::ess for . . . rulemaking (proceedings) -- is a pure questien of .sv (en which th'el Commission can bring no particular expor:ence to l

bear en its determination"); Eil:cersid v. Hampton, 467 T.2d ~55 (D.C. Cir. '3/2) (exnaustien not required vnere .itigant ailitged that his non-public agen:y hearing :reated a fundamental due pr -

-l

ess infirmity); Anos Treat, 306 F.2d at 263 (exhaust:en .ct required vnere " substantial showing" that the participation of a Commissioner "had rendered the (agency) proceedings void and so irrevocably tainted snat any final determination which might fiev from such proceedings vill be invalid").

In summary, applicable precedent leads to the conclusion that this Court snould consider Petitioner's claim nov. The ,

statutory antitrust question at-issue here is not a health,  !

safety, or environmental issue regarding which deference to in:s I l

agency is particularly. appropriate, nor does it require .

I revisiting any factual determinations by the.NRC regarding CE's competitive behavior. Because of the occurrence of the very unusual-congressional interference in the engoing adjudication.

.the infirmity in the administrative proceeding is fundamer,tal.

'Jnder the principles enunciated in Amos Treat and National Advertisers, Petitioner need not participate in an administrative proceeding of questionable due process validity prior to this Court's resolution-of the due process':hallenge.

s

.- - . . + - . - * .s,. ,.y. - . . _,, , - . . . , . ,

. _ - , , . . , , - , ------.,n,- .w..- -

s IV. Conclusion Activities under CE's ownership license for tne Perry nuclear power plant do not ":reate or ma:ntain a situat:en :ncan.

sistent with the ant: trust lavs" because Perry power :urrent;y is not an economi: ally superaor energy alternat2ve. Consequent;y,  ;

the business conditions ;nposed on CE are not responding to any anticompetitive situation that is created or maintained by CE's ovnership in Perry.

Since the Perry licensing conditions can no longer serve their intended purpose, tney must, as a matter of lav and equity, be removed as unjustifiable restrictions on CE's business act:vi-ties. If they are not tne NRC vould be placed in the untenable position of regulating .tusiness activities of OE that are wholly unrelated to the economic impact of the nuclear facility sue:ect to its regulation, a function that neither the Atomic Energy Act nor any other statute authorizes the NRC to assume. Continued imposition on CE of the Perry antitrust license conditions would also be inconsistent with the clear mandate of Congress in pass-ing Section 105(c), and the understanding of the NRC. as evi-denced by decisions on the subject, that the NRC should be involved in antitrust matters if and oniv if a nuclear power L plant creates or maintains an anticompetitive situation, Perry does not do so.

As a result of the congressional threat to legislatively overrule the NRC should it grant CE's application, the NRC is l

i unable to fairly adjudicate that application. In fact, the

I appearance alone of ths NRC's ;.aoility to ;mpart; ally ::nsider the application is a deniti of CE's right to due process.IA' While this case ordinarily .ou;d oe decided ;n the first ;.stan:e by the NRCl'the extraordinary c:r:umstan:es tnat " ave .  ::grred compe; tne resolution of this matter by this Court.

A: dingly, Pet;;ioner respectfully suggests that in;s Court :onduct a prenearing :enference pursuant to 'ad. R. App. ?,

33, in order *.o :onsider how to preceed ;n determ:ni.g tne mer.t3 -

of Petitioner's request to suspend the conditions restrt:t;ng CE's business act;vities.

Dated: February 27, 1989 Respectfully submitted,

{' uw .w t [o 1

(

)awa.r 11 -

Gerald Charnoff .

Robert E. Zahler Decorah 3. Charncff Margaret S. Spencer SHAW, PITTMAN, POTTS AND TROWBRIDGE 2300 N Street, N.W. ~

Washington, D.C. 20037 (202) 663-8000 Counsel for Petitioner OHIO EDISON COMPANY 32/ OE submits that the existing record conclusively establisnes tnat at least the appearance of impartiality by the NRC has been compromised. This Court should certainly not decide to the contrary without directing the NRC to respond to the outstanding discovery requests on the issue of actual par-tiality (see n.20, supra), followed by parties' opportunity to brief :ne congressional pressure issue in light of those responses.

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CERT!T!CATE OF SERV'CE I HEREBY CERT:FY that a copy of the foregoing Petition f:r Writ of Mandsmus was mailed first class, postage prepaid, :nts 2'th day of February, 1989, to tounsel for Respondents:

Wilma A. Lewis, Esquire Assistant United States Attorney Judt:iary Center Suilding -- Boom 4116 555 Fourth Street, N.W.

Wasnington, D.C. 20001

$$'/6 (' h/&ff Hargarel/S, Spengfr l

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9- I i

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l UNITED STATES COURT OF APPEALS FOR THE D! STRICT OF COLUMBTA l

)

OHIO EDISON CCMPANY, )

)

Petitioner, )

)

v. ) No. 99-1014

)

LANDO W. 2ECH, JR., et al., )

)

Respondents. )

)

MOTION TO DISMISS INTRODUCTION _

On December 15, 1988, Federal District Court Judoe Charles R. Richey transferred this action to this Court.

Petitioner Ohio Edison holds a Nuclear Regulatory Commission

("NRC") license to operate the Perry Nuclear Power Plant <

(" Perry"), located about 37 miles east of Cleveland, Ohio.

Petitioner asks this Court to intervene in an ongoing NHC proceeding that is considering Ohio Edison's request for license amendments to eliminate eleven antitrust conditions presently included in the Perry operating license. Specifically, petitioner would have this Court, without waiting for the agency to decide the matter, direct the NRC to issue the requested amendments.

Ohio Edison aroues that the decision to issue the amendments should be made by the Court rather than by the NRC because of "the i

,n ., - - . , , ,- ,-w r--,- ---n,--- - , -,---,,,---,-,,w,--, .n,. . - - , - - , , - , , , , . ,, - ,

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extraordinary circumstance" arising from "the concressional pressure related to the threat to legislatively overrule the NRC should it grant Ohio Ecir:on's application." Petitioner's Complaint at 8. As is explained further in this memorandum, petitioner's claim is fatally premature. This Court should dismiss petitioner's attenpt to obtain judicial review prior to final agency action by the NRC.

ARGl' MENT This Court Should Dismiss This Case As Premature Petitirner seeks a declaratory judgment that the NRC Should not Conduct proceedings in connection with Chio Edison's application for an amendment to its NRC license to operate Perry.

Petitioner clains that the Congressional " threat to legislatively overrule the NRC should it grant Ohio Edison's application (for a license amendment)" has re ndered the agency " unable to f airly adjudicate" that application and has compelled judicial consideration of the matter. Complaint at 8. The interrelated doctrines of finality, ripeness, and exhaustion of administrative remedies all argue forcefully against review at this time.

FTC v. Standard Oil Comeany of California, 449 U.S. 232, 246 (1980): USAA rederal Savinos Bank v. McLaughlin, 849 T.2d 1505 (D.C. Cir., 1988).

Congress specifically empowered the NRC to "nake a finding as to whether the activities under the license would l

l 2

create or maintain a situation inconsistent with the antitrust laws.* 42 U.S.C. 5 2135fc)(5). Prior to doing so, the NPC must obtain the advice of the Attorney General, allowinc 190 days for his review. 42 U.S.C. S 2135 (c) (1) . Upon receipt of the Attorney Ceneral's advice, the NBC must publish that advice in the rederal Pecister, 42 U.S.C. S 2135 (c) (5) .

If the Attorney General advises that there may be adverse antitrust aspects, he may also recommend that a hearing be held. Id. On the basis of the Attorney General's advice and on the basis of its finding after any hearing on the antitrust question, the Commission "shall have the authority to issue or continue a license as applied for, to refuse to issue a license, to rescind a license or amend it, and to issue a licenst with such conditions as it allows appropriate." 42 U.S.C. 5 2135 (c) (6) (empnasis added). Exclusive jurisdiction over claims to review such NRC decisions is in the Courts of Appeals.

42 U.S.C. S 2239(b); 28 U.S.C. 5 2342(4).

Plainly, there has been no " final order" by the Commission in this case. There has not even been an initial determination by the NRC staff that the requested license

-amendment should or should not be aranted. If Ohio Edison's license amendment request is granted, no court intervention whatsoever would be necessary. On the other hand, if under the statutory I

It should be noted that Ohio Edison m6de no claim in Federal

-District Court that a final order had bean unreasonably delayed.

Ohio Edison could hardly do so, having requested and received extensions of time totaling 75 days to respond to three comments critical of Its request for a license amendment.

3

I scheme that Congress has established, the NBC staff denies the requested amendment, Ohio Edison can request an ad;udicatory hearing on the issue before the NRC's Atomic Safety and Licensing Board. That Board's on the record decision would, in turn, be reviewable by the the 11RC's Atomic Safety and Licensing Appeal Board and then the Commission. If necessary, Ohio Edison then seek review before this Court. This review process provides ample opportunity for petitioner's arguments to be heard before forums with special expertise to hear such matters.

Chio Edison provided no sound factual support or legal '

precedent in its lower court filings to support its view that this case is so unique that the Congressionally ectablished administrative process should be bypassed in favor of judicial interference in an agency proceeding already underway. In fact, this does not coma close to the rare case requiring judicial intervention prior to final agency order.

Petitioner's argument for immediate judicial intervention boils down to an assertion that Ohio Edisen will not get a fair hearing before the NRC. It bases this assertion on a charge that threatened Congressional interference has resulted in NRC bia* against allowing its requested license amendnent.

I Petitioner's request for immediate judicial intervention based on this argument must fall both as a fictual as well as a legal matter.

The facts upon which petitioner bares its charge of l Congrossional interference and resulting agency bias simply do not 4

support petitioner's characterizations. The facts alleged in the complaint filed below (as opposed to petitioner's characterization of those facts) are that Senator Metzenbaum proposed legislation to prohibit Ohio Edison's request for a license amendment. 134 Cong. Rec. 53257-58 (daily ed. March 29, 1988). During the colloquy on Senator Metzenbaum's propos&l, Senator Johnston stated that his staff had received communications from unidentified NRC staff members which indicated that Ohio Edison's requested license amendment was going to be denied. Id. at 3258. No one suggested that either the NRC Commissioners or the f.icensing Board or Appeal Board judges responsible for deciding the ultimate outceme cf Ohio Edison's proposed license amendment had forned such an opinion.

Moreover, almost immediately after making the statemant concerning the alleged NBC staff communications, Senator Johnston corrected himself, stating "in a pending case they (the NRC) simply will not tell you what they are going to do." Id. at 3259. Ultimately, Senator Metzenbaum's colleagues convinced him to wait until the NRC decided the matter before he took any further action regarding the proposed legislation. Id. Petitioner's premature judicial attack on a Congressman's suggestion to intervene in an ongoing NRC license amendment proceeding is ironic given the entirely proper Congressional decision to lot the NRC process run its course.

As a legal matter, the facts alleged cannot justify a finding of improper Congressional interference. In Peter Kiewit Sons' Co. v. U.S. Army Corps of Engineers, 714 F.2d 163 (D.C. Cir.

1983), a case involving allegations of improper congressional interferonce, this Court stated:

Finality and exhaustion requirements may be dispensed with only where the agency hea very clearly violated an important constitutional or statutory right.

Id. at 169 (quoting Sterling Drug, Inc. v. FTC, 450 F.2d 698, 710 (D.C. Cir. 1971)). Nothing that Ohio Edison has alleged ecmes remotely close to meeting this test. The mere expression of a congressman's opinion about a pending administrative proceeding hardly converts the continuation of that proceeding into a clear violation of anyone's rights. In Kiewit, supra, this Court rejected a claim that a Senator's communications had compromised the integrity of a pending administrative proceeding. Noting that there was no evidence that the Senator had actually contacted the ultimate decisionmaker, directly or indirectly, the Court observed:

A court must consider the decisionmaker's input, not the legislator's output. The test is whether " extraneous factors intruded into the calculus of consideration" of the individual decisionmaker.

714 T.2d at 170 (footnote onitted) (emphasis in the original).

Here, the petitioner has offered no basis beyond mere speculation for concluding that the " legislator's output," i.e. Senator Metzenbaum's proposed amendment and accompanying remarks, has intruded in any way into the Commission's consideration of Ohio Edison's application.

Moreover, even were the facts able to be twisted into some claim that there was one instance of improper Congressional i

6

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pressure, those facts would not justify immediate Judicial review prio; to final agency action.

This Court has made it clear that the usual presumption in favor of withholding Judicial review until after final agency action " applies with even greater force in the context of a bias claim than it does with a claim of unreasonable delay."

Airline Pilots Annocfation International v.

Ufvil Aernr.auties Doard, 750 P.2d 81, 88 (D.C. Cir. 1904) ("ALPA")

(emphasis added). As the Court in ALPA noted:

Unlike unreasonable delay, bias does not pose the threat of totally defeating the Court of Appeals' power of review. Also, claims of bias do not have a congressional mat;dato analogous to 5 U.S.C. S 706, instructing courts to compel agency action unreasonably delayed. Therefore, the arguments for deferring review merit increased attention.

Id.: see also Ticor Title Insurance Co. v. PTC, 814 F.2d 731, 743 (D.C. Cir. 1987).

Similarly, this Court recently dismissed a case closely analogous to this actinn--another interlocutory appeal alleging bias by an agency. In strong language, fully applicable to this case, this Court observed:

Although we have exercised our jurisdiction to review claims prior to final agency action in the past, we have only done so sparingly and hesitantly.... we have made clear in many varied contexts, includi,i cases presenting claims of agency bias, " judicial intervention

in uncompleted administrative proceedings, as I

distinguished from judicial checking by statutorily-t established methed of review, must remain very much the l exception rather than the rule."

Castern Central Motor Carriers Ass'n v. United States, 857 F.2d L '92, 793 (D.C. Cir. 1988) (Citations omitted).

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l There is no justification for bypassing the Congressionally established administrative process in this case.

To the contrary, the well known purposos underlying the exhaustion doctrine will be served by letting the established process proceed before the NRC. The NRC will have the opportunity to apply its expertise in an ares entrusted to it by Congress. An administrative record, including the necessary fact-findings, will be created by the agency. Indeed, the necessity for any judicial review at all might be obviated depending on the decision rendered by the NRC. Moreover, while the foregoing benefits will be lost if the NRC's process were curtailed by immediate judicial review, Ohio Edison identified in its lower court filings no harm that it will suffer if the administrative process were to proceed. It is well established that the burden on a party of having to defend its interests in an administrative proceeding does not amount to harm justifying immediate review. Cf. FTC v. Standard 011, supra, 449 U.S. at 242; USAA Federal Savings Bank v. Metaughlin, supra, 849 F.2d 1505. A fortiori, in the present case, where the administrative process was initiated not by the agency but by the petitioner, the burden of following established administrative procedures is one which petitioner must bear. Moreover, the petitioner will be able to raise any and all of it arguments, including agency bias, in this Court, if necessary, after the administrative process is completed.

8

CDNCLUSION In light of the foregoing, the Court should grant respondents' Motion to Dismiss.

Respectfully sabmitted, ffg/

/ 2/

~

v ef4M , }

M L I T@, 11. BRIGGS,g)f.(/

Solicitor v

') .

s-3% %

E. LEO SLAGGIE W Deputy Solicitor

/ -4 2

• WU GERALDINE R. FEllST Attorney Of fice of i.ae General Counsel U.S. Nuclear Regulatory Commission Washington, D.C. 20555 (301) 492-1634 Datedt February 27, 1989 I

4

i CERTIFICATE OF SERVICE I hereby certify that on this 27th day of February ,

1989 ccpies of the foregoing " Motion to Dismiss" were served on councol by placing a copy in the mail, postpaid, to the followino:

Deborah B. Charnoff, Esq.

2300 N Street, N.W.

Washington, D.C. 20037 v -Y -, f jj;-

GERALDINE R. FEHST '

Attorney office U.S. of the General Counsel Nuclear Regulatory Commission Washington, D.C. 20555

_ _ _ _ _ _ _ . __ _-- -- - - - - - - - - - ~' - ' - ~ ~

RECElVED i t An 01%9 Ulf!TED STATES COURT OF APPEALS CLERK OF THE UhllED STATES COURT OF APPEALSFC,R THE DISTRICT OF COLUMBIA C*RCU'T OHIO EDISCN COMP ANY , )

)

Petit.oner, )

) No. 3 9 '. T. 4

v. )

)

LANDO W. 2ECH, .'R., et al., ) --

)

Respondents. )

)

PETITIONER' S OPPOSITION TO Tite HOTION TO DISHISS On February 27, 1999, the Nuclear Regulatory Commission

("NRC") respondents filed a motion u 'smiss. Petitioner, the .

Ohio Edison Company ("OE" or "Chio Edison") cpposes the motion.

The NRC motion is little more than a transparent attempt to sti-fle Judicial review of improper congressional interference in an ongoing agency adjudication and, if granted, would deny OE the _

assurance of impartiality in the consideration and resolution of its case. As explained below, the NPC motion is based on an inappropriate analysis of the legal framework within whien this Court should consider the pencing proceeding, and an erroneous view of the law on congressional pressure, agency impartiality, and exhaustion of administrative remedies. For all these rea-sons, the motion to dismits should be rejected and OE's petition for writ of mandamus, filed on February 27, 1989, should be granted.

- ___._m. _ . _ _ _ _ _ . _ _

i

!. THE ANTITRUST MA'!*rER AT ISSUE IS ONE THAT PROPERLY CAN BE DECIDED IN THIS COURT The NRC begins its legal argument witn a description Of the statutory basis for NRC's involvement in antitrust matters that is surprising in tne degree to which it both misstates and obfus-cates the issue of statutory interpretation raised by CE. See Nk. Motion at 2-3. The NRC starts by referring the Court to the a.ititrust review process set forth in Section 105(c) of the Atcmic Energy Act of 1954, as amended ("the Act"), 42 U.S.C.

5 2135(c). Apparently, the NRC desires that the Court be .

impressed with the specificity and detail of the agency process to be followed when the NRC conducts an antitrust reviev, that in '

this case that process has not yet been completed, and therefore "there has been no ' final order' by the Commission in this case."

NRC Motion at 3.

The fundamental flaw in the NRC's argument about its al'eged .

" statutory scheme", NRC Motion at 3-4, is that the process to which the NRC refers addresses a totally different circumstance from the one at issue here. This case does not involve any anal-ysis of OE's competitive conduct or of the competitive conduct of anyone, and yet this type of analysis is the exclusive purpose of the review process to which the NRC mistakenly refers. Specifi-cally, the government refers the Court to such provisions as the 1BO-day review by the Attorney General of an NRC license applica-tion in order to make a recommendation as to whether the activi-ties under an NRC license would create'or maintain a situation inconsistent with the antitrust laws.1# The NRC also references 1/ NRC Motion at 2-3, citino Sections 105(c)(1) and (c)(5) of the Act, 42 U.S.C. 55 2135(c)(1), 2135(c)(5).

2-

the abi(ity of the agency to remedy an anticipated ant;:cmpet-itive situation by denying or amending an application for an NRC license.E#

What the government fails to recogni:e or chooses to obscure is that the statutory scheme set out in Section 105 of the Atomt:

Energy Act " appl [ies) to an application for a license to con-struct er operate a utilization or production facility under se:-

tion 133 (of the Act)." 42 U.S.C. 5 2135(c)(2); see also 42 U.S.C. 5 2135(c)(1), which cross-references subsec-tion (c)(2).2# The entire function of a section 105(c) antitrust reviev, and the lengthy factual proceeding sometimes associated with it, is for the NRC. vith the expertise of the Department of Justice, to evaluate the competitivo behavior of the owners of a new, economically advantageous nuclear power plant. The purpose of this review is to ensure that when the government licenses a new nuclear facility, it is not causing or exacerbating an extarit anticompetitive situation in the relevant marketplace.

2/ It may be that the NRC vent wrong in its' analysis because it read the relief provisions in Section 105(c)(6), 42 U.S.C.

5 21335(c)(6), as applying to license amendment applications.

See emphasized quotation in NRC Motion at 3. When the whole pro-vision is reviewed, however, it is clear that the NRC has misread Section 105(c)(6). This provision establishes that in a-proceed-ing'for which a construction or operating license is initially sought, one form of relief available to the NRC in order to obvi-ate or mitigate an anticompetitive situation as to " amend" a license. To read the provision as requiring that the Section 105(c) procedures apply when an application is filed to amend a-license because nuclear power is no longer economically superior is to turn the statute on its head.

1/ While the specified procedures are also applicable where a written request, as provided in paragraph (3), is filed, that provision applies only in a limited set of so-called "granifa-thered" plants and has no application here. See 42 U.S.C.

5 2135(c)(3).

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l Of course, as the goverr. ment vell knows. in this case tnere  !

is no pending application to construct or operate a nuclear power

, plant. Nor is OE challenging any issue related to competitive i behavior; rather, *he issae raised by CE's application is whether .

enditions imposed on OE's business ennduct as a result of a Se:-

tion 105(:) reviev :an continue to be imposed when nuclear power is no longer etonomically superior. OE's claim is that it ;s suffering a continuing in]ury from the daily imposition of unlav-ful restrictions on it. Thus, the elaborate statutory framework to which the government refers is wholly inapplicable to the legal question that has been raised.

Indeed, the procedures described by the NRC in its motion '

vere all followed and completed more than 10 years ago. The '

application to construct the Perry facility, which is the nuclear power plant co-owned by CE, was filed in March 1973. See 38 Fed.

Reg. 18052 (July 6, 1973). The Attorney General's advice on that i

application was issued on December 17, 1973. See 39 Fed. Reg. 2029 (January 16, 1974). Evidentiary hearings on the antitrust aspects of the construction permit application were held betvein December 1975 and July 1976. An Atomic Safety and Licensing Board rendered its initial decision in January 1977,d' and final Commission action occurred in September 1979 when an Atomic Safety and Licensing Appeal Board reviewed and approved the ini-tial decision.'5/ The key point is: those proceedings concluded 1 -

4/ See Toledo Edison Co. (Davis-Besse Nuclear. Power Station, Units 1, 2 and 3), LBP-77-1, 5 N.R.C. 133 (1977).

5/ See Toledo Edison Co. (Davis-Besse Nuclear Power Statlon, -

Units 1, 2 and 3), ALAB-560, 10 N.R.C. 265 (1979).

1 1 _

i long ago, and Ohio Edison is not now contesting any part of t9a:

process. It is disingenuous for the NRC to refer this Court to the Section 105(c) process as support for its motion to dismiss.

The proper analysis is as set forth 'n CE's petition for a writ of mandamus. On September 18. 1987, OE filed a request to amend its operating license to suspend the antitrust conditiens imposed in 1977 CE s request 4s based on the fact that CE's ownership interest in Perry does not provide CE with a source of economically superior energy; consequently the NRC has no statu-tory basis for continuing to oversee OE's business conduct. Pro-cessing of OE's applica'. .on is governed by the NRC's regulations at 10 C.F.R. 55 50.90 and 2.101, cancerning license amendments.

The NRC published notice of the application on December 22, 1987, and invited comments on the application frcm interested persons.

See 52 Fed. Reg. 48473-74.5#- While the application was pending before the NRC, Senator Howard M. Metzenbaum proposed legislation that vould have had the effect of precluding the NRC from granting the specific relief sought by CE. :nitially, OE sought relief from this improper congressional pressure in the district court. Following transfer of the matter pursuant to 28 U.S.C.

1/ The NRC's motion pejoratively mischaracterizes OE's request to the agency last summer for an extension of time to respond to comments filed on OE's application. NRC Motion at 3, n.1. As CE has already stated when the government made this mischaracteri-zation before the district court, OE initially simply sought time (45 days) to respond al all'to multiple comments filed on its application because the NRC's rules are silent on this procedure.

Subsequently, OE sought a single 30-day extension to reply because of the prolix nature of the comments filed by the City of Cleveland, which encompassed approximately 100 pages of text and 200 pages of attachments.

5 1631, Ohio Edison now see

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Mr. Cecil O. Thomas Chief, Policy Development and Technical Support Branch Programs Management Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Re: Ohio Edison Company Antitrust License Amendment Application-i i

Dear Mr. Thomas:

Enclosed is a copy of " Response of Ohio Edison Company to L Comments on its Antitrust License Amendment Application."

l l I would_ note that at pages 3 and 7, Ohio Edisen has re-l l quested:that the Cnmm4=minn held the'eresent proceeding on the law..se amendment aeolication in abeyance oending resolution or tne court action filea en-June 22, 1988. In accition, at page-77 o

note 11, Chio Edison has requested copius of all comments re-ceiv.ed'from the Attorney General on the license' amendment appli-

_ cation.

Sincer yours,

\ -

t Ro ert . h er l

Counsel for Ohio Edison Company Enclosure -

cc: Service List l

l 8907130434 880705 PDR ADOCK 05000440 -

P PDC

CERTIFICATE OF SERVICE l

I hereby. certify that on this L day of March 1989, g i copies.of the foregoing " Respondents' Reply To Petitioner's Oppositio_n'To Motion To Dismiss" were served on. counsel by placing

a. copy in the mail,' postpaid, to the following:

Deborah B. Charnoff, Esq.

2300 N Street, N.W.

Washington, DC 20037 i 1

L TRALDINE R.-FEHSTI R J-h  ?/ f .

l _. Attorney i

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Office of'the-General Counsel U.S. Nuclear--Regulatory. Commission l Washington, DC 20555

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I? I Knifeb $tates Gmtri of hpeals FOR THE OlsTRICT of CoLUMelA CIRCUlf No. 89-1014 September Term,19 88 C.A. No. 88-1695 UnitidStatesCourtofAppeals Fg94 Distrktof Columbia Cirewt In Ret  !

Ohio Edison Company, APK 27 1989 Petitioner N CEC.DUERS cumK BEFORE: Robinson, Ruth B.

Circuit Judges Ginsburg and D.H. Ginsburg, ORDER writ of mandamus,Upon consideration of the motion to dismiss the petition for motion for oral argument,the opposition-thereto it is and the reply, and the- i ORDERED that the action to dismiss be granted for the '

reasons stated in the accompanying memorandum. It is FURTHER ORDERED that the h.otion for oral argument be denied.

t Pa Nriam l

l k

. _ = _ _ . - - . . . _ - - - - _ - . . - -

No. 89-1014 i

i' KDLQPhNDUM Petitioner ohjo Edison Company, s licenses to operate the Perry Nuclear Power Plant in Ohio, has filed a petition for writ of mandamus, asKing the court to intervene and issue an order suspending current antitrust license conditions or, in the alternative, to issue an order requiring the Nuclear Regulatory Commission ("NRC") to suspend the conditions. The NRC moves to dismiss tt; yetition on grounds of finality and exhaustion of i ad'i t'.st ' et .ve remedies. Ohio Edison has also requested an oral arg,"'nt ra the motion to dismiss. For the reasons stat d below, '

we grant the motion to dismiss the petition for writ of mandamus, and deny the motion for oral argument.

The usual prerequisites to judicial review, exhaustion of administrative remedies and finality, may be dispensed with only "where the agency has very clearly violated an important const.'.tutional or statutory right." Peter Kiegit Sons' Co. v.

Q.S. Army Coros of Encing.gIs, 714 F.2d 163, 169 (D.C. Cir. 1983) fciting Sterlina Drua. Inc. v. PTC, 450 F.2d 698, 710 (D.C. Cir.

4571)). In cases involving alleged agency bias, this court han reiterated the principles of finality and exhaustion, observing that judicial intervention in ongoing agency proceedings is "very much the exception rather than the rule," and that courts are fully able to review bias claims on appeal. Eastern contral i

Kator Carriers Ass'n v. United States, 857 F.2d 792, 793 (D.C.

l Cir. 1988); Airling_ Pilots Ass'n v. CAD, 750'F.2d 81, 88 (D.C.

No. 89-1014 Cir. 1984). Only in " rare circumstances" may this court review 4 an agency disqualification claim before the agency action is concluded. Sie Ananq1tLtion oL NationALAdysrtisirs. Inc. w flg, 627 F.2d 1151, 1156 (D.C. Cir. 1979), str%2_dgnigd, 447 U.S.

921 (1980).

To succeed on its claim of a due process violation, Ohio Edison must show at least the appearance of alnar congressional pressure or bias in a judicial or quasi-judicial context. Enigt Kiewit Sons 1, 714 T.2d at 169 (emphasis added) (citing Eillakury Co. v. FTC, 354 F.2d 952 (5th Cir. 1966) and D.C. Fedtration_pf Civic Ass'n5_ y. Volpg, 459 F.2d 1231 (D.C. Cir.), agI O Difde 405 U.S. 1030 (1972)). The test is whether the congressional interference intruded into the "' calculus of consideration'" of the decisionmaker and affected the "' mental decisional processes'" of the agency. Id. at 170 (quoting Elllahury and D.C. FederatioD).

Applying this test here, Ohio Edison has not shown any clear congressional pressure o the NRC, either actual or apparent, to deny its application to amend the license conditions. The record contains insufficient evidence that the NRC's decisionmaking process has been or will be unduly influenced by Senator Metzenbaum's proposed, but withdrawn, amendment or the sentiment he expreseed regardir.g the license conditions. Ohio Edison argues vigorously that Senator Metzenbaum, a powerful member of Congress with oversight responsibility for the NRC, clearly put 2

No. 89-1014 the NRC on notice that an outcome other than denial of Ohio Edison's application would be unacceptable. This assertion alone, hovaver, does not establish even the appearance of congressional pressure. To conclude otherwise might hinder members of Congress from performing basic legislative functions i and expressing opinions on matters of concern to their constituencies. Therefore, we conclude that Ohio Edison has not shown any violation of its due process rights. Accordingly, there is no cause here to valve the exhaustion tnd finality requirements.

Furthermore, we cannot conclude that the purposes underlying -

the finality and exhaustion requiremente are not served in this case. In _1[Ltignal Advertis_ars, the purposes of exhaustion vore not thwarted by interlocutory review. First, no facts were in dispute; second, a legal question of first impression had been raised, upon which the TTC had no particular expertise; and third, because the question was one of first impression, further piecemeal attacks were unlikely.- Esa National Ady.ortisers, 627 F.2d at 1156-57; tan also Cutler v. Hay 33, 818 T.2d 879, 891 (D.C. Cir. 1987) (requiring exhaustion allows agency to apply expertise, exercise discretion and correct errors).

Here, the NRC points out that a factual record must be developed to determine whether the antitrust license conditions should be reta,ined or eliminated. Furthermore, tha NRC has the expertise to examine the Perry plant's current situation and 3

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No. 89-1014 evaluate how that relates to the original license conditions.

ohio Edison has not indicated that it will suffer any harm as a result of participating in the NRC proceedings, nor has it argued that it cannot effectively raise its congressional pressure claim on review, after the administrative process has been concluded.

Moreover, if the NRC amends the conditions, then review by this court may not be necessary.

For these reasons, we grant the motion to dismiss the petition for writ of mandamus and deny the motion for oral argument.

4

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