ML20127L208
| ML20127L208 | |
| Person / Time | |
|---|---|
| Issue date: | 01/15/1993 |
| From: | Robert Davis NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | Lesar M NRC OFFICE OF ADMINISTRATION (ADM) |
| Shared Package | |
| ML19341G050 | List: |
| References | |
| FRN-57FR61780, RULE-PR-19 AE11-2-002, AE11-2-2, NUDOCS 9301270045 | |
| Download: ML20127L208 (73) | |
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- 'o UMITED STATES
, - l ' ) w (f[,,g NUCLEAR REGULATORY COMMISSION
- - #A j WASHINGTON, D. C. 20555
.....f AE11-2 January 15, 1993 MEMORANDUM FOR: Michael T. Lesar, Chief Rules Review Section Rules Review and Directives Branch Division of Freedom of Information and Publications Services, ADM FROM: Roger.K. Davis, Senior Attorney Office of the General Counsel
SUBJECT:
INDEX OF DOCUMENTS COMPRISING REGULATORY HISTORY - EXCLUSION OF ATTORNEYS FROM INTERVIEWS UNDER SUBPOENA (10 CFR PART 19)
As requested in your December 30, 1992 memorandum, attached is an index of documents comprising the regulatory history of the subject final rule. The documents listed on the index have been forwarded to the Document Control Desk, P1-37, White Flint, for placement in either the PDR or Central Files as indicated on the list.
If you have any questions, please call Linda Lessler on 504-1612.
0 y /C. b A og K. Davis Office of the General Counsel
Attachment:
Index v
j f]D D Gy
&l2 045 930115 19 57FR61780 . ppg
AE1)-2 REGULATORY HISTORY INDEX FOR FINAL RULE EXCLUSION OF ATTORNEYS FROM INTERVIEWS UNDER BUBPOENA (57 FR 61780) 10 CFR PART 19 DOCUMENTS FOR PDR 3/29/66 Securities and Exchance Commission v. Hiaashi, 359 F.2d 550 (9th Cir. 1966) 4/5/76 Securities and Exchance Commission v. Csaco, 533 F.2d 7 (D.C. Cir. 1976) 12/23/80 Federal Trade Commission v. Exxon Coro., 636 F.2d 1336 (D.C. Cir. 1980) 9/13/83 Report of the Advisory Committee for Review of Investigation Policy on Rights of Licensee Employees Under Investigation 5/23/88 Wheat v. U.S., 486 U.S. 153, 108 S. Ct. 1692 (1988) 8/7/89 Memorandum from Ben B. Hayes, Director, OI, to James L.
Blaha, Assistant for Operations, EDO, re: Draft Final Rule on the Sequestration of Witnesses Interviewed Under Subpoena and the Exclusion of Attorneys 7/23/91 Professional Reactor Operator Society v. NRC, 939 F.2d 1047 (D.C. Cir. 1991) 12/19/91 Federal Register notice, 56 FR 65948, " Exclusion of Attorneys From Interviews Under Subpoena" (Final Rule) u 12/19/91 Federal Register notice, 56 FR 65949, " Exclusion of Attorneys From Interviews Under Subpoena" (Proposed Rule) 2/4/92 Federal Register notice, 57 FR 4166, " Elimination of Requirements Marginal to Safety" (Solicitation of public comments) 2/7/92 Letter from Marvin I. Lewis, Phila., PA, to Secretary, ,
NRC, re: Comments on Proposed Rule 56 FR 65949 j 2/10/92 Letter from Deborah B. Charnoff, Shaw Pittman, to Samuel J. Chilk, SECY, re: Comments on Proposed Attorney Exclusion Rule 2/14/92 Letter from Carl M. Gray, President, PROS, to Samuel J.
Chilk, SECY, re: Proposed Attorney Exclusion Rule
- 2/17/92 Letter from A.H. Domby, J. Lamberski, Troutman Sanders, to Samuel J. Chilk, SECY, re:-Proposed Attorney Exclusion Rule 2/18/92 Letter from Robert W. Bishop, NUMARC, to Samuel J.
Chilk, re: Proposed Attorney Exclusion Rule 2/18/92 Letter from Nicholas S. Reynolds, Winston-& Strawn, to Samuel J. Chilk, SECY, re: Proposed Attorney Exclusion Rule 2/18/92 Letter from C.K. McCoy, Georgia Power Co., to Samuel J.
Chilk, SECY, re: Proposed Attorney Exclusion Rule 2/18/92 Letter from J.D. Woodard, Southern Nuclear Operating Co., to Samuel J. Chilk, SECY, re: Proposed Attorney Exclusion Rule 2/18/92 Letter from W. H. Bohlke, Florida Power & Light,'to Samuel J. Chilk, SECY, re: Proposed Attorney Exclusion Rule 2/24/92 Federal Register notice, 57 FR 6299, " Issuance of Quarterly Report on the Regulatory Agenda" (Issuance of Regulatory Agenda) 1 6/18/92 Federal Register notice, 57 FR 27187, " Reducing the L Regulatory Burden on Nuclear Licensees" (Proposed rule) l l
6/19/92 Federal Register notice, 57 FR 27394, " Review.of Reactor Licensee Reporting Requirements" (Request for public comment) 8/31/92 Federal Register notice, 57 FR 39353, " Reducing the l Regulatory Burden on Nuclear Licensees" (Final rule) l 11/6/92 SECY-92-376, Memorandum to the Commissioners from
-William C. Parler, General Counsel, subject: Final Rule on Exclusion of' Attorneys from Interviews Under Subpoena 17/14/92 Menorandum from Samuel J. Chilk, Secretary, to the Commission, subject: Staff Requirements Memorandum-c 12/18/92 Federal Register notice (published 12/29/92 at 57 FR L .61780) signed by Samuel J. Chilk,' Secretary, re: Final Rule entitled " Exclusion of Attorneys.from Interviews-Under Subpoena" 12/29/92 Federal Register notice, 57 FR 61780, " Exclusion of Attorneys from Interviews Under Subpoena" .(Final-rule) l l
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p p.Ql Di E R T S F O R C J F T R A L F I L E R 10/13/92 Memorandum from Roger K. Davis, Senior Attorney, OGC, to Michael T. Lesar, Chief, Rules Review Section, RPB, subject: Draft Final Rule on Exclusion of Counsel (Request for Comments) 10/16/92 Memorandum from Michael T. Lesar, Chief, Rules Review Section, RPB, to Roger K. Davis, Senior Attorney, OGC, l
subject: Review of Draft Final Rule on Exclusion of Counsel 10/26/92 Memorandum from Brenda Jo Shelton, Chief, Information and Records Management Section, IRM, to Michael T.
Lesar, Chief, Rules Review Section, RPB, subject:
Request for Comment and Concurrence on the Final Rule, "10 CFR Part 19: Exclusion of Attorneys From Interviews l
Under Subpoena" 11/2/92 Concurrence copy of Commission paper on Final Rule on Exclusion of Attorneys From Interviews Under Subpoena 11/2/92 Fax Transmission of comments and concurrence from M.L.
Grodin, OIG, to Jim Fitzgerald, OGC, subject: Final Rule on Exclusion of Attorneys From Interviews Under Subpoena 11/18/92 Memorandum from Roger Davis, OGC, to Andy Bates, SECY, subject: Final Rule on Exclusion of Attorneys from Interviews Under Subpoena (SECY-92-376, Nov. 6, 1992) a
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&ll- b 550 359 TEDERAL REPORTER, 2d ST'RTES WA judge nor either of the parties considered the argument erroneous or prejudicial at of the nature of the defense interposed L '.h the time. at the trial, I cannot believe that the re-X ceipt of the newspaper men's testimony On the whole, and on balance, fairness was so prejudicial as to require reversal ment to all parties, Government and defendant here. Comn alike, is guaranteed by an adherence to of C<
standard rules of procedure. Surely it tratic is the duty of this court to respect the exami needs of an effective judicial system. o h~,. .m=9
, ~ -- 2.Ad Any chance ruling which reaches a dis-orderly result, one which is reached in 'I disregard of all standards of proper pro- provh g-cedure, is a disservice to our system, and peari to all litigants. resen*
If the plain error rule is to be resorted SECLRITIES AND EXCHANGE COE the r-311SSION, Appellant and Cross.
to in such non-vital cases na this, all rules Appellee. of his requiring objections Inay as well be V.
Act, {
thrown away. Just because the appellate Charles 7. HIGASIII, Appellee and Cross. 3, gg, court observes something in the trial to Appellant. 3 which, in its opinion, objection co.21d have right been made, no reason is furnished for D n JENES, Appellant, his el applying a rule of " plain error." V-The wording of the majority opinion SECURITIES AND EXCHANGE CO)f. @r leaves me in some doubt as to whether !! ION, AppeHee. Violat the result reached is based in any degree Nos. 20061, 20062. quest!
on the admission of the testimony of the attorr newspaper reporters. At one place the United States Court of Appeals in ths Ninth Ctreult, opinion states with respect to the inter- with 1 March 29.1966, view with the newspaper reporters: "Did held 1 the interview violate Evalt's constitution- and it al right ? We have reluctantly concluded famili -
Proceeding for an order to enforce tor's s that it did not." The opinion then notes Securities and Exchange Commission }
that Evalt willingly talked to reporters subpoenas. The United States District cedure and that he was told that he did not have Court for the District of Hawall, Martin Securi to talk to them. At another place in the Pence, Chief Judge, enforced subpoenas, C.A. [
j 1934, opinion it is stated: "We hold that the and the Commission appealed from court- I testimony of the reporters should not imposed condition. The Court of Ap-have been received. * *
- Our hold- peals, Merrill, Circuit Judge, held that ing is that the government may not use mining company director's statutory "888*8 evidence obtained in the way that this ing ec right to be represented by counsel of f evidence was obtained. It is urged that, his choice when he was subpoenaed in
- if inadmissible, the testimony was harm-less, in view of the other testimony in course of SEC investigation of company's andat the record, and particularly of the fact offer and sale of shares of stock was vio- n it
' that Evalt admitted what he did and 'sted by SEC's invocation of its seques- ,
.on based his whole defense upon insanity. tration rule to prevent the company's j thu attorney from representing the director, We do not pass upon this question, be- . Se" cause the judgment must be reversed for other reasons, as is shown hereafter."
in that director's interests were common with those of company and he might be i y held responsible for the company's acts i ga l
In view of the f;.ct that the appellant and in view of the company attorney's 2. Ru with apparent eagerness undertook to familiarity with the source of the di- '
make confessions of the events to every rector's va!nerability.
one in sight who would listen and in view Affirmed. A I who
BEOURITIES AND EXCHANGE COMMISSION v. HIGASHI 551 Cite as s50 F.2d 55o (190s) iterposed 1. Lleenses @l8%(54) of consideration in proceedings to secure st the re- Within permissible limits tb judg- enforcement of subpoenas of witnesses, estimony ment of the Securities and Exchange Securities Act of 1933, i 22(b), 15 reversal Commission must prevail in application U.S.C.A. I 77v(b); Securities Exchange of Commission rule permitting seques. Act of 1934, l 21(c),15 U.S.C.A. $
tration of counsel for witness during 78u(c).
examination of other witnesses.
- 2. Administrative Law and Procedure
@4'l4 Dan S Bushnell, Salt Lake City, Utah, The Administrative Procedure Act for appellants Higashi and Jenks, provision that person compelled to ap- Philip A. Loomis, Jr., Gen. Counsel, pear before agency has right to be rep- David Ferber, Sol., Martin D. Newman, resented by counsel gives such person Atty., Securities & Exchange Comm.,
E CO3I- the right to be represented by counsel Washington, D. C., Frank E. Kennsmer,
'055- of his choice. Administrative Procedure Jr., Asst. Gen. Counsel, Securities & Ex-Act, f 6(a), 5 U.S.C.A. i 1005(a). change Comm., San Francisco, Cal., for Securities and Exchange Commission.
- 3. Licenses >18% (54) nd h Mining company director's statutory Before BARNES, BASTIAN and right to be represented by counsel of MERRILL, Circuit Judges.
his choice when he was subpoenaed in course of SEC investigation of company's MERRILL, Circuit Judge.
" " " " "" Uf shares of s%ck was These two appeals have been consoll-
-E CO31 violated by SEC,s invocation of its sp dated. We shall deal separately with the que.tration rule to prevent the company a issues presented.
attorney from representing the director, e, in that director's interests were common R/GASHI CASE with those of company and he might be The Administrative Procedure Act !
held responsible for the company's acts 6(a).1 grants the right to counsel to and in view of the company attorney's any witness subpoenaed to appear before familiarity with the source of the direc- any Federal agency. _
o enforce tor's vulnerability. Administrative Pro- The Securities and Exchange Commis-mmission cedure Act,6 6(a),5 U.S.C.A. I 1005(a); sion, by rule,' has providei that unless District Securities Act of 1933, i 15,15 U.S. permitted no counsel for a witness "shau
.1, Martin C.A. $ 77ol Securities Exchange Act of be permitted to be present during the ubp nas, 1934, i 20(a),15 U.S.C.A. I 78t(a). examination of any other witness called during the proceeding."
t of Ap. 4. Licenses @l8%(56)
Any harassment was not of wit- The question presented is whether this held that nesses but of principal promotor and min- rule violates the statutory right to coun-statutory ing company whose stock selling activi- sel when, by its invocation, a witness is ounsel of ties were under investigation by SEC, precluded from choosing as his counsel enaed in and such an issue was not proper subject one who has already acted as counsel
- ompany's
- 1. **Any person compelled to appear in per- the Commission, in person at a formal f.5seques- son before any agency or representative investigative proceeding may be accom-
- ompany a thereof shall be accorded the right to be panied, represented and advised by cuan-director, accompanied, represented, and advised by sel, as defined in Rule 2(b) of the Com-counsel, or if permitted by the agency, by mission's Rules of Practice; provided, e common other qualified representative." 5 1.s.C.. however, that all witnesses shall be se-might be questered. and unless permitted in the dis-i 1005(a). cretion of the officer conducting the in.
my,8 acts attorney's 2. Rule 7(b) of the Commission's Rules Re- vestigation no witnesses or the counsel ae-lating to Investigation 17 C.F.R. 203.7 companying any such witnes, shall be pet.
f the di- I mitted to be present during the examina.
I (b), provides:
"Any person compelled to appear. or tion of any other witness called in such who appears by request or permission of proceeding."
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.- g 552 sse rEDERAL REPORTER, Ed SERIES for a witness called to testify earlier in addition to his duties as corporate at. [2,3) the proceeding. torney for Silver King Mines, Mr. Bush. lon fror =
This case arose in connection with the nell also serves as attorney for Kay L. ent,as; Commission's investigative proceeding Stoker, ing inv< '
In the Matter of Silver King Mines, Inc. The reason for and purpose of the position and Kay L. Stoker. The Commission Commission's sequestration rule are clear ness in served respondent Charles Higashi, a and there can be no question as to its carried -
director of Silver King Mines, with a necessity and general propriety. The present subpoena duces tecum and also informed Commission points out that violations of ing the --
him that it was invoking its sequestra. Federal securities laws are often diffi. rectors, tion rule so as to prevent Dan S. Bush- cult to detect and require extensive in- himself nell, corporate attorney for Silver King vestigation; that it may be necessary to of thati Mines, from representing him at the determine whether or not individuals ration hearing. Mr. Bushnell, who had previ. are acting in concert; that investigations that nu ously appeared as counsel for other wit. frequently are sought to be frustrated The cot nesses in this proceeding, immediately by non-cooperation and even subornation a*
notified the Commission that his client, of perjury; that the purpose of seques- direc Mr. Higashi, would not obey this sub. tration could be defeated by an attorney gashi poena. Securities and Exchange Com. advising witnesses as to the testimony inves mission subpoenas are only enforce- which had been given by others. The ceto:
able after the Commission has success- Commission regards its rule as a form of rate fully applied to a United States Court for regulation of the practice at its bar and he is an enforcement order. Securities Act of points to an earlier r'ile which recognized 1933, 9 22(b), 48 Stat. 87 (1933),15 that advice to a witness-client by an l the C c
andi U.S C. $ 77v(b) (1964), and Securities attorney whose primary representation is nell Exchange Act of 1934, ! 21(c), 48 Stat. of someone else may not be in the wit- ness < :
900 (1934),15 U.S.C. ! 78u(c) (1964). ness' best interests.8 from The Commission's request for an order rule
[1] The Commission insists that the
, enforcing the subpoena was granted by question here, as in Federal Communica. the iy the District Court, but on the condition tions Commission v. Schreiber, 381 U.S. Busi that Mr. Bushnell be permitted to repre- 279,85 S.Ct.1459,14 L.Ed.2d 383 (1965), Higt sent Mr. Higeshi at the hearing. The is "whether the exercise of discretion thet Commission has appealed from this by the Commission was within permis.. the court-imposed condition. sible limits, and not whether the Dis. not-On October 24, 1962, the Commission trict Judge's substituted judgment was miss ordered this investigation to determine, reasonable." wg inter alia, whether in the offer and sale We agree that within those "permis- Admin of shares of Silver King Mines, Inc., sible limits" the judgment of the Com-constr>
"Kay L. Stoker and others" had violated mission must prevail in the application of Backet or were about to violate the registration its rule. In our judgment, however, the and anti fraud provisions of the Securi. question here is whether the Commis. 4. Bot ties Act of 1933 and the Securities Ex- slon has exceeded those permissible limits 1933 change Act of 1934. Stoker is a director, by invocation of its rule in such a manner u$,
the principal promoter and a substantial as to violate respondent's statutory right troll stockholder of Silver King Mines. In to counsel. i defh -
dire.
- 3. This court has noted in Charles v. United probe 'so that others under investigation States,215 F2d 825. 827 (9th Cir.1954): and other prospective witnesses might not ; 5. Ind-
"* *
- witnesses may, and often do. the ,
be warned of what has teen asked and an-shape their testimony to match that given swered and so aided in thwarting the in. d'P' by other witnesses within their hear- quiry.' " In re Bonanno, 344 F.2d 830, 8'"'
in g. To prevent such matching of testi. 834 (2nd Cir.1965), quoting United States Of I many is the prime purpose of putting wit. v. Tramuoti,343 F2d 549,552 (2nd Cir. ***
nesses under the rule." It has been held 1965). P* "
that secrecy is "necessary in an ongoing P*
St
n BECURITIES AND EXCHANGE COMMISSION v. HIGASHI 553 Cite me 350 F.2d 550 M966) orate at- [2,3] The District Court in an opin- (5th Cir.1960). While this right may fr. Bush- ion from the bench ruled that respond- well be subject to Commission authority
- Kay I. ent, as a director of the corporation be- within permissible limits to disqualify ing investigated, " stands in a different counsel under its rule, cf. United States
? cf the position than that of the ordinary wit- v. Steel,238 F.Supp. 575 (S.D.N.Y.1965),
- are clear ness in the type of investigation being those limits must be held to have been as to its carried on by the SEC. Under the exceeded when the rule is invoked in
- y. The present thrust of the law of cases regard- such a case as this. Here the impact of ations of ing the obligations and liabilities of di- the rule is not limited to its effect as _
en diffi. rectors, a director of a corporation may sequestration upon the interests of those nsive in- himself be held responsibk for the acts under investigation. Here the act of essary to of that corporation 4 * *
- The corpo- sequestration has a second and impermis-dividuals ration and Mr. Higashi have interests sible effectl it bears directly and preju-tigatiors that may well be interests in common." dicially upon the interests of the witness ustrated The court concluded: himself. Since his interests are common with those of the corporation for whose
'ornation u. .
- I find, since Higashi is a acts he may be held responsible, to se-
! seques- director of the corporation, that Hi- quester corporation counsel is to deprive attorney gashi, as indicated, may well be under the witness of the services of the attor-estimon investigation himself as part and par- ney m st familiar with the source of his rs. The cel of the investigation into the corpo- vulnerability.8 This invocation of the
' ION Of rate activities in the sale of stock, that rule exceeds the bounds and purposes of bar and he is not the type of witness over whom sequestration. It strikes not only at oth-contized the Commission can exercise Rule 7(b) ers who would use the witness' right to an and simply say that because Mr. Bush- e unsel f r their own purposesI it strikes
. . is nell here has represented other wit- directly at the witness himself.
the wit- nesses that he, therefore, is barred from representing Mr. Higashi. And I We conclude that the Administrative that the rule that any attempt on the part of Procedure Act, & 6(a), 60 Stat. 241, 5 nmunica- the examining officer to exclude Mr. U.S.C. { 1005(a) (1964), prevents the _
381 U.S. Bushnell in the examination of Mr. SEC from invoking its rule of sequestra-3 (1965), Higashi-Higashi being a director of tion in this case.
liscretion the company-is beyond the power of Upon the appeal of the SEC the order -
permis- the Commission to determine. It is of the District Court is affirmed.
the Dis- not within the discretion of the Com-aent was mission in this case under these facts." JENES CASE We agree. The right granted by the [4] This appeal is from an order of "pemis- Administrative Procedure Act must be she District Court requiring appellant to
- he Com* construed to mean counsel of one's choice, appear in response to a Commission sub-cation of Backer v. Commissioner, 275 F.2d 141 poena issued in connection with the same ever,the Commis- 4. Both section 15 of the Securities Act of Independent counsel conid only acquire 1933,15 U.S.C. I 770, and section 20(a) such famillarity through the substantial ole limits expenditure of his time. The resulting of the Securities Exchange Act of 1934.15 a manner U.S.C. I 78t. establish liability of con. cost may render corporate counsel the 4
trolling person The Commission's only adequately qualified counsel many di.
definition cf a coutrolling person includes rectors can afford. On the other hand, directors, where the director or corporation is will-ing and able 40 bear ench additional costs.
tiration there la good reason to suppose that the ght not 5. Indeed under circumstances such as thle and an- the sequestering of corporate counsel may parties would be able to accomplish the in- deprive a director of all effective repre- through Independent counsel exactly what
.2d $30 sentatfor. hre, as here the interests the SEC's rule seeks to prevent. A rule l' of the witness and corporation are com. which, except for a wealthy few, denies I mon. familiarity with a complicated cor. effective counsel la not permitted by the porate background would appear to be a Administrative Procedure Act i 6(a), fo prerequisite for effective representation. Stat. 241,5 U.S.C.11005(a) (19N).
359 F.26-35%
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!' 554 359 rEDERAL REPORTER, 2d SERIES l l'
' investigative proceeding as concerned thority to determine whether state pris-Higashi. Appellant's defense in the Dis- oner was in fact insane at time of prose-trict Court was that there was no suffi- cution in state court, where state prison-
- cient basis for the Commission's investi- er prior to prosecution had been adjudg.
gation and that its insistence upon pro- ed insane, and lunacy adjudication had ceeding amounted to harassment. This never been vacated, and defense of in-defense vras rejected by the District sanity was not waived in prosecution, and Court. Higashi, in his case, had also de.
State did not introduce evidence show-fended upon this ground and has taken a ing sanity of state prisoner at any of the cross-appeal from the court's rejection of critical times.
it.
Reversed and remanded with direc-The court concluded that any harass- tions.
ment charged was not of the witnesses Tuttle, Chief Judge, dissented on but of Silver King Mines and Stoker, and motion to amend opinion, that such an issue was not a proper sub-ject of consideration in proceedings to secure enforcement of subpoenas of these 1. Mental Health #18 witnesses over opposition of the wit. Under Texas law, unvacated lunacy nesses themselves, adjudication gives rise to presumption of We 9 Free Upon the cross. appeal of continuing insanity, which in any subse.
Higashi and the appeal of Jenks the quent criminal proceeding has effect of order of the District Court is affirmed. shifting to State the burden of proof on issue of insanity.
- 2. Habeas Corpus @l Power of federal District Court to
,,,,,,,,,,,,,,,,y grant a writ of habeas corpus is restrict-
- ed to those instances designated in stat- '
ute. 28 U.S.C.A. I 2241,
- 3. Habeas Corpus @4 Defendant's alleged mental incompe-tency existing at time of offense and not Willie Earl CLARK, Appellant, raised during trial of defendant, who is
- v. sane at time of trial, may not be raised Dr. George J. BETO, Director, Texas De. collaterally, since issue could and should partment of Corrections, Appellee, have been presented at trial on direct No. 22722. appeal.
United States Court of Appeals 4. Habeas Corpus C=>92(1)
Fifth Cimult. Where state prisoner was adjudicat.
March 22,1966. ed insane in Texas, and lunacy adjudica-Rehearing Denied May 6,1966. tion was never vacated, and, in subse-quent prosecution in Texas state court for burglary, defense of insanity was not State prisoner brought habeas cor- raised, and State did not introduce evi-pus proceeding against the director of the dence showing sanity of prisoner, federal
/
- Texas Department of Corrections. The District Court in habeas corpus proceed- i United States District Court for the ing had authority to determme whether Southern District of Texas, Joe M. In. prisoner was in fact insane at time of 5-graham, J., 232 F.Supp. 255, entered state court trial. 28 U.S.C.A. I 2241; I judgment denying the habeas corpus peti- U.S.C.A.Const. Amends. 5,14. ,
tion, and the state prisoner appealed. 5. Criminal Law #625
- The Court of Appeals, Hutcheson, Circuit 1: sue of insanity, even at time of Judge, held that District Court had au- trial, is primarily a defensive one and i
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/} Ell 4 TBR SECURITIES & EXCH. COM'N v. CSAPO 7 Cite es s3s F.sd 1 (1976)
- 2. Securities Regulation e85 is Cable W Ca, Before Securities and Exchange Com-SECURITIES AND EXCHANGE (1974); Afonroe COMMISSION Appellant, mission may exclude attorney from its pro-Inc., 45 FCC2d ceedings, it must come forth with " concrete 7ee Electric Cable Y- evidence" that his presence would obstruct 1211 (1975). This Frank CSAPO. and impede its investigation. 5 U.S.C.A.
amvincing in the 6 555(a).
51 subscribers of 3. Securities Regulation =86 n to 700 subscrib. United States Court of Appeals- Where it was at least plausible that,'as
.ers' complaint, to District of Columbia Circuit. matters developed, best interests of one
"*
- who had been subpoenaed by Securities Ex-Argued Oct. 31, 1975.
titioners request, change Commission might prove to be an-subscribers today. Decided April 5,1976. tagonistic to those of other witnesses, Com-
' 6. Petitioners' mission properly fulfilled its duty by in-presumed grand- .
forming those who came before it whether than 18 months Enforcement of a subpoena by the Se- their lawyer had appeared on behalf cf geoned convinces curities Exchange Commission was condi- others and, if so, possible conflicts which exercised its dis- tiened, by the United States District Court might arise; choice was then to be '.nade by w cause order as for the District of Columbia, William B. witness after full and frank disclosure by terest. Although Bryant, J., upon the prospective witness' his attorney of attendant risks. 5 U.S.C.A.
ation suggested a right to be accompanied by attorneys of his 6 555(a).
choice. The Securities and Exchange Com. 4. Securities Regulation =86 reheration of the sts previously re_ mission appealed. The Court of Appeals,
, db
>t le petian. Lumbard. Semor Circuit Judge, held that g ggg requested. authority of the Commission to disqualify i mission might be frustrated if attorneys for attorneys under its rule was inconsistent ne W poenaed witness we pennitted ac-sed above, we af-orders before us-with that portion of the Administrative **** to testimony of any other witnesses Procedure Act providing for the right, of * * * ' " " ' ' ' * " . ,
' failed to present , . "##I M *
- any person summoned to appear before a sel selected by mch nnbmentioned hess.
ation since grand- federal agency, to assistance of counsel, and priate even if not f the Commission's authority was to be 5 Em. 6 Mal ere paying for the enforced,it was to be confined within "per. 5. Securities Regulation >86
.72. The sporadic missible limits." Before the Commission District court judge, in proceeding to
-Arco doctrine has may exclude an attorney from its proceed. enforce subpoena issued by Securities Ex-important guide- ings, it must come forth with " concrete change Commissica, acted well within his ive standards for evidence" that his presence would obstruct discretion in proposed evidentiary hearing subscribers," and- and impede its investigation. to resolve factual disputes bearing upon listinctions dr4wn ght of abpoenaed witness to be accompa-Order affirmed without prejudice.
med by attorneys of his choice and upon required later ex-ission. Even the Commission's contention that objective of the confusion en- its investigation might be frustrated if at-
- 1. Securities Regulation =86 pre-1972 rev,sion i torneys for one witness were permitted ac-
-r the 1972 grand- Authority of Securities and Exchange cess to test mony of other witnesses. 5 v Cablevision C>r- mmission to disqualify attorneys under U.S C.A. $ 555(a).
{ts i rule was mconsistent with that portion 990 (1975) (grand-of Adm,mis trative Procedure Act providing
- *# " *I*~
for the right, of any person suirmoned to Appeal from the United States District ertheless, that as Cours for the District of Columbia (D.C.
appear efore federal agency, to assistance
"****
- of counsel, and if Commission's authority Miscellaneous No. 74-22).
provides a . sound was to be enforced, it was to be confined David Ferber, Sol., Securities and Ex-me a show cause within " permissible limits." 5 U.S.C.A. change Commission, Washington, D. C.,
5 555(a, c). with whom Richard E. Nathan, Asst. Gen.
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J f.
M
_p O 8 533 FEDERAL REPORTER,2d SERIES n
Counsel, Securities and Exchange Commis- In 1970 the Stirling Homex Corporation b
sion, Washington, D. C., was on the brief, ("Homex") of Ro.:hester, New York made for appellant. its first public offering of stock after hav.
Peter Ko!ker, Washington, D. C., for ap. ing operated for some years as a privately
' pellee; Sidney Feldshuh, New York City, owned enterprise manufacturing modular
- was on the brief, housing units. Its success was both imme-
,[ diate and spectacular as the price of a share
- - Before LUMBARD,* Senior Circuit rose from the initial quotatio' of $16 to $52
( Judge, and WRIGHT and WILKEY, Circuit within a matter of weeks. Unfortunately -
y Judges.
for all concerned, however, its demise was i Opinion for the court filed by Senior Cir- "I" *t '9""IIY **ift In July 1972, barely cuit Judge LUMBARD. two years after its entry into the pubhc
[ LUMBARD, Senior Circuit Judge: market, the company filed for bankruptcy under Chapter X of the Bankruptcy Act.
The Securities and Exchange Commission Thousands of investors suffered losses y appeals from an order of the district court aggregating many millions of dollars.
6 conditioning enforcement of the SEC's sub-poena of respondent Frank Csapo upon Csa-On July 25, 1972, the SEC launched a po s right to be accompanied by the attor- formal investigation to determine whether neys of his choice--Sidney Feldshuh and any insiders "have in connection with the Q' Paul Chernis--while he was questioned by purchases and sales of the securities of (Ho-the Commission staff. At issue is the stan- mex) made use of material corporate infor.
- < dard by which a district court should evalu- mation concerning, among other things, the ,
ate the propriety of the Commission's appli- c mpany,a inancial e ndition, business op-cation of its duly enacted rule authorizing
- rations, and prospects Lfore that informa-i the sequestration of any lawyer appearing t. ion was generally made available to and on behalf of more than one witness called known by the public, The Comnussion to testify in an investigation I Judge *** particularly concerned that each of the Bryant found that the SEC had failed to Pubh.c releases issued by the corporation }
produce any " concrete evidence" of miscon.. during the Period 1970 to 1972 optinustical-duct, a threshold which he deemed to be the ly p rtrayed its current imancial position minimum required to override the right of and confidently projected its continued j the witness to be represented by a particu. Prosperity 8 Several mdividual sharehold-S lar counsel _ See Administrative Procedure us expressed similar complaints in private 1 Act 5 U.S C. 6 555(a). We agree. The class actions begun at this time. r
.i '
record falls short of disclosing any reason There is no dispute that Frank Csapo was for barring counsel selected by Csapo. Con- an important figure in the corporate life of sequently, the order of the district court is Homex. As vice president for manufactur-9 affirmed.
4 ing, he had supervisory responsibility for
,J.
- Of the Second Circuit, sitting by designation during the examination of any other witness pursuant to 2B U.SC i 294(d) (1970).
called in such proceedmg. 17 CFR 6 203..
- 1. 7(b).
T
" Rule 7(b) of the SEC's Rules Relating to in-vestigations provid s: In practice, the presumption of the rule is re-J Any person compelled to appear, or who ap* versed and few witnesses or their counsel are 3 pears by request or permission of the Com-ever sequestered.
5 mission, in person at a formal investigative 2. The SEC further claimed that each of the N
proceeding may be accompanied, represented earnings reports prepared by the company dur.
d and advised by counsel provided, ing this period misleadmgly indicated an in.
i however, that aD witnesses shall be seques. creasingly profitable business. Csapo how-1 tered, and unless permitted in the discretson ever, insists that in March 1972. months prior
, of the officer conductmg the investigation, no to bankruptcy, Homex announced a substantial witness or the counsel accompanytng any loss for the quarter ended January 31. 1972 j such witness shall be permitted to be present based on unaudited figures G
l f _ - _ _ - - - - - - - - - - - - - - - - - - - - - - - - -
13 ~, .-4 ..aam m *' ~ ;
- l. .
s s.
V SECURITIES & EXCH. COM'N v. CSAPO 9 Che as s&& F.2d 7 (t976) the operation of the plant and was a perma- him that it would not waive its sequestra-nex Corporation nent member of management's negotiating tion rule and that, accordingly, Feldshuh 9ew York made team. His compensation was, moreover, and Chernis, who had meanwhile represent-stock after hav-commensurate with his duties. He earned ed eight other witnesses in the investiga-rs as a privately an annual salary of $50,000 and received in tion, would be barred from the hearing eturing modular addition nearly 250,000 shares of Homex room during the examination. Osapo, after was both imme-common stock, approximately 34 of the first obtaining a short postponement of his a price of a share outstanding total. scheduled appearance, wrote the SEC on
- ion of $16 to $52 On August 18, 1972, a subpoena duces December 14, 1973 that he would not con-Unfortunately tecum was served on the respondec. direct. sent to testify unless accompanied by his
. its demise was ing him to produce, within one week, any chosen counsel. Csapo expressed his belief -
July 1972, barely documents in his possession or control relat- that his interests would be severely preju-into the public ing to the finances, accounting practices or diced were he forced to rely on counsel less i for bankruptcy business affairs of Homex, as well as all acquainted with the facts than Feldshuh Bankruptcy A1 records detailing his personal dealings in and Chernis.
suffered losses Homex securities. A covering letter to the s of dollars. The SEC freely admits that its sequestra-subpoena informed respondent that if the tion rule is only rarely applied. Neverthe-SEC launched a requested papers were forthcoming his per- less, it insists that its invocation is amply termine whether s nal appearance would likely be unneces- justified under the circumstances of this nection with the sary. Ten days later, Csapo retained Feld-shuh's firm to represent him in SEC mat.
case. Both in the district court and on securities of [Ho. appeal, the Commission has relied on' two I corporate infor. ters and paid an initial $5,000 fee. Csapo interrelated propositions to support its ac--
other things, the was Feldshuh's first Homex client.
tion in excluding respondent's lawyers.
tion, business op- Shortly thereafter,in response to the sub- The first is the presumption underlying the
-r st informa- poena. Csapo submitted to the Commission rule-that multiple representation increases ale to and seven items along with a statement that he the likelihood that subsequent evidence will b Commission had been unable to find any of the other be tailored, either consciously or uncon-I that each of the materials sought. The documents provided sciously, better to conform with or explain the corporation were significant primarily for what they what has come earlier. Of particular con-1972 optimistical- did not contain. Specifically, they made no cern to the SEC is the fact that three of the _
financial position mention of the fact that during the months other clients represented by Feldshuh ed its continued of July and August 1972, Csapo had dis- and/or Chernis are principal targets of its ividual sharehold, p sed of over 200,000 shares of Homex investigation. They are: David Stirling, mlaints in private st ek. This omission was revealed several Jr., former chairman of the board and chief 5s time. weeks later when the staff, m the course of executive officer; William Stirling, former
. Frank Csapo was resiewing the information so far amassed president, director and chief operating offi-regarding Homex and its officers, "uncov- cer; and Harold Yanowitch, former general e corporate life of
- t for manufactur- ered" official forms which respondent had counsel, director and executive vice presi-responsibility for filed in the immediate wake of the sales as dent. When called to testify, the Stirlings required by law. pleaded the Fifth Amendment. Yanowitch, af any other witness The SEC thereupon sent Csapo a second on the other hand, answered the Commis-4 17 CFR 6 203 - letter on October 25, 1972, asking him to sion's questions for some sixty hours but execute an affidavit clarifying the proce- only after twice unsuccessfully attacking
", [*[,C ,'r] dures which he had employed in complying the sequestration rule here at issue. Both with the subpoena. Instead, Csapo supplied challenges were rebuffed as premature
- d that each of the the Commission with two photostat copies sinet the SEC had not yet made any at-by the company dur. of relevant brokerage statements, tempt to exclude either Fe!dshuh or Cher-gly indscated an in- *8 -
Still dissatisfied, the SEC notified Csapo
[^{g['*nQh[ p on October 17, 1973 that he was to be Second, the Commission argues that evi-iounced a substantial questioned by its staff on November 7, dence already adduced suggests the possi-
.d unuary 31. 1972, 1973. The Commission further informed bility that the Stirlings and/or Yanowitch a
j ., .
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Nf,NNbk k ,.,
r Q
4, .
2
- o. 10
% 533 FEDERAL REPORTER,2d SERIES may have attempted to pressure other em-On the basis of the foregoing,8 the Com-YJf
^p ployees of Homex to accept the services of missien petitioned the district court for en.
sa Feldshuh and Chernis in order, the Commis. forcement of ita subpoena. Feldshuh, vehe.
~fl sion fears, to present a " common front." mently disputing the SEC's factual allega.
-N Thus, Rubel Phillips, former vice president tions, requested an evidentiary hearing and of Homex' Southern Division, told the SEC the opportunity to inspect in their entirety a that he had been approached by Yanowitch the documents and transcripts referred to who offered to provide him with an attor. in part by the Commission. The SEC, how.
% ney. Although the subject was not explicit- ever, insisted that the only question before ~
3 ly discussed Phillips stated that he had the Judge Bryant was whether it had acted S definite impression that his counsel fees arbitrarily in applying its regulation. The
-d would be taken care of. Commission argued that the actual truth or
] Carl Wren, former vice president for falsity of the evidence which it relied on a '
market research, similarly testified that Ya- was mmaterial to a determination of the nowitch had offered him the pre-paid legal reasonableness of its reliance. Judge Bryant disagreed.
{j services of Feldshuh and Chernis. To like effect, Edwin J. Schulz, another Homex Unwilling to sully the reputation of Feld-g officer, characterized as " essentially cor- shuh and Chernis upon untested charges, q rect" a statement by his attorney that "Mr. and finding no " concrete evidence" of q Schulz was led to Mr. Feldshuh by Mr. wrongdoing in the record as it stood before
,1 Yanowitch." Moreover, Schulz personally him, Judge Bryant conditioned Csapo's obli-stated that it was his " impression gation to testify upon his right to be accom-j that Mr. David Stirling was picking up the panied by counsel of his own choice. This 1 bill." appeal followed. Csapo has not yet ag>.
peared before the Commission.'
] Finally, Charles Marshall, a former di-rector of Homex and former president of its [1] The validity of any application of
)J wholly owned subsidiary, United States the SEC'e sequestration rule must be
~j Shelter Corp., recounted a phone conversa- judged in light of the controlling language -
of Section 6(a) of the Administrative Proce.
tion with Feldshuh in which he portrayed fure Act,5 U.S.C. % 555(a), which provides the attorney as "rather insistent that ho that any person summoned to appear before was representing me (as a defendant in a a federal s.gency is entitled to the assistance class action suit] and I was just as insistent of counsel. This guarantee, phrased by the that he was not."
.q
~'
legislature in unequivocal terms,8 has been
% 3. The SEC has also made muted reference on plated, is still possible. In any event, we be-appeal to the testimony of Wilham McCann, chauffeur of David Stirhng. who stated to the lieve that there are important public pohey
- reasons for resolving at the present time the staff that he turned over to Yanowitch, in the presence of Feldshuh, a cigar box containing apparent etenfhet between the Commission's u
the check stubs of illegal pohtical contribu. sequestration rule and the nr,,ht to counsel tions. Feldshuh has denied the charge and guarantee of the Administrativt /rocedure Act.
O furthermore, has secured the affidavits of three Most criticaJy, we redgnize that the delays a
individuals, all of whom claim to have heard inherent in appellate review, when juxtaposed J McCann state that he would be unable to rec. against the length of the average invesugat on, y ognize Feldshuh- will frequently " moot" the questien before it 3' 4. Just prtor to oral argument. Csapo moved to can be decided. See Roe v. Wade. 410 L 3.
113.125. 93 S.Ct. 705,713,3$ t Ed.2d 147,161 A damiss the SEC's appeal as moot on the (1973).
ground that the Commission's investigation ter.
Y ' minated on July 2,1975 with the entry of a 5. Compare the language of Section 6(c) of the
~' consent judgment and permanent injunction Administrative Procedure Act, 5
. gainst him. The SEC has advised us, how. U.S.C.
, 1555(c). which grants federal agencies the dis-
- ever, that its investigation remains technically open and the . further action, while not contem- cretion, for good cause, to hmit or condition the
-f availabihty of its official transcnpts.
e.
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I SECURITIES & EXCH. COM'N v. CSAPO 11 Che as sss F.sd 7 0976)
~ "egoing,8 the Com-construed to imply the concomitant right to tigation. Of equal importance to the wit.
strict court for en- the lawyer of one's choice. Backer v. CIR, ness, Csapo has confidence in them. Their
- t. Feldshuh, vehe' 275 F.2d 141 (5th Cir.1960); cf. Powell v. replacement at this point would require fur.
C's factual allega-Alabama,287 U.S. 45,53 S.Ct. 55,77 led. ther time and effort of new counsel at ntiary hearing and 158 (1932). The Commission's authority to added expense to Csapo.
p refe ed t '9 .ify attorneys under its rule is plainly [3] We do not minimize the dangers in-
- n. The SEC, how.
- "*'* t" t ith that latter pulege and herent in counsel representing multiple
. must, if it .is to be enforced, be conf,med clients in a single proceeding. It is at least within " permissible limits." SEC v. Higa-
];j5{" da h
shi, 359 F.2d 550 (9th Cir.1966). Those plausible that as matters develop the best interests of Csapo may prove to be antago.
lim ta have been uceeded m this case.
- he actual truth or nistic to those of the Stirlings or Yanow. -
vhich it relied on [2] We are of course mindful of the itch. That decision, however, belongs to ermination of the historical antecedents of the sequestration neither the district court nor the Commis-reliance. Judge rule and of the important purposes which it sion. The SEC properly fulfilled its duty is designed to serve. See Torras v. Strad- by informing those who came before it eputation of Feld- ley,103 F.Supp. 737 (N.D.Ga.1951); United whether their lawyer had appeared on be-untested charges States v. Smith, 87 F.Supp. 293 (D. Conn. half of others and, if so, the possible con -
ete evidence" of 1949). We do not question its utility in flicts which might arise. The choice must as it stood before pmserving the integrity of an investigation then be made by the witness after a full a ioned Csapo's obli- and recognize its practical necessity under and frank disclosure by his attorney of the right to be accom- certain circumstances. But we are not for attendant risks. See ABA Code of Profes-own choice. This that reason at liberty to ignore the clear sional Responsibility, Disciplinary Rule 5-has not yet ap- e ngressional mandate referred to above. 105(c). In a letter dated April 17, 1974, ission.4 hus, before the SEC may exclude an attor- Feldshuh and Chernis repeated to Csapo r
, ney from its proceedings, it must come their ' willingness to withdraw if he so de-Weatmn of must be forth, as it has not done here, with " con- sired, advised him that the staff "might crete evidence" that his presence would ob. look with some favor upon your appearance ntw.img language ninistrative Proce' struct and impede its investigation. Cf. with other counsel," and indiested to him a), which provides Grnt Labs Screw Corgration v. NLRB, their intent'to resolve any conflict of inter-
- 09 F Nor est in favor of the Stirlings and Yanowitch.
d to appear before
%o we.2d 375,38%381 (7th Cir.1969). find anyt@to the contrary in FCC lt was not th -
08, phad h Ge v. Schreiber,381 U.S. 279, 85 S.Ct.1459,14 warned the respondent. Nevertheless, Csa-
' * " " * ' ** *" led.2d 383 (1965), heavily relied on by the po replied, as he has throughout, that he Commission. Although the Court there wished to continue their services. Compare n env event, we be.
counseled judicial restraint in interfering In Re: Investigation Before the April 1975 rrtant pubhc poney m th with the broad procedural powers delegated Grand Jury,174 U.S. App.D.C. ,531 F.2d PM
. ,. by Congress to the federal ageraies, it 600 (Decided February 3,1976).
ie nght to counsei nevertheless reaffirmed the responsibility [4] The SEC would negate Csapo's in-auve Procedure Act. of the crurts to insure that administrative formed and voluntary decision on the
, I,*wh u action is consistent with governing statutes ground that "the objective of the investiga-verage invesugauon. and constitutional requirements,381 U.S. at tion micht be frustrated if Messrs. Feld-
~
e quesuon before it 291, 85 S.Ct. at 1468,14 led.2d at 392. shuh and Chernis . rmit-
- v. Wade. 410 U.5-
" ** Csapo's desire to be represented by Feld- ted access to the testimony o ther shuh and Chernis is both understandable witn s." (Emphnh nAd i We hold and reasonable. He had retained them as that speculation is insufficie'ih The f Section 6(c) of the his attorneys and paid them a $5,000 fee mere fact that a witne"75uN,repre-Act. 5 U.S.C.
before they were contacted by any of his sents othen uh hve been ne are to n iorYoId$tIo*ny e lleagues at Homex. In the intervening be quEioned, is no basis whatsoever for renscripts. years they have acquainted themselves with concluding that' nresence of such counsel the underlying facts and the complex corpo- would obstruct the investigation. On the rate background to the eventa under inves- contrary,in many cases it is likely that such
h n.
> 4 eggppk@gQ W
f s ~ . , *,
tj 12 533 FEDERAL REPORTER,2d SERIES
- represertation may facilitate and expedite j
the proceedings. essential lest information become stale and
- tat Our conclusion that the SEC has failed to useless or statutes of limitation expire its We
't find no rnerit in this contention for several sustain its burden is reinforced by the Com. reasons. for
& mission's concession that Csapo is apoten- gat >
tial target of its efforts and man _therefore The SEC's admission that its sequestra.
the y f be subject to future crimmal sanction. tion rule is only rarely invoked belies any E A b Since any statement made by Csapo during claim that the precedent established in N the course of his questioning may later be granting Csapo a hearing would seriously -
E referred to the Department of Justice for disrupt its investigative function. More-over, Csapo's right to representation under 4 future consideration by a grand jury, per- '
5 haps followed by an indictment and prose- the Administrative Procedure Act will per.
cution on criminal charges, Csapo's choice sist even if Feldshuh and Cherms were j of counsel to accompany and advise him barred from his interview. Indeed, the during his SEC interview is obviously a Commission so advised him. It is inconceiv-crucial one.' That choice should not need- able to us that a new attorney could become i
D lessly or lightly be disturbed. In SEC v. acquainted with the facts of the situation in Q Higashi, supra, the only other decision of a the short period of time which the SEC 3 court of appeals to consider the question, asserts would be sufficient. - Thus, delay WA' would likely be increased by the substitu-j the Ninth Circuit arrived at a similar ac- 'l
- commodation of the competing interests of tion of counsel while Csapo would be put to the Commission and its witnesses. the additional expense of retaining a new f% [5] C<rtainly, the evidence of alleged so-attorney, ,
l licitation presented to the SEC raugd.leri- We are timilarly unpersuaded by the
$ ous questio u of tweeihte profenionaljm_ pro- SEC's attempt to disparage the role of 3 priety which if prnwd rP wm warrant counsel at its prceeedings and thersby to disciplinary action. Nothing in our opinion suggest that its action in excluding Feld-today is tmnded w limit the right of the shuh and Chernis may have inconvenienced d Csapo but did not greatly disadvantage 5 SEC to institute itself such disciplinargpro- 1
~'
ceedingToFT5TcTer the matter to the ;;p- that him. The Commission's own rules' provide a witness' attorney may advise his Metr y propriatelar asMITIt is surely plau- brou; j sible, however, tLat the conduct of the Stir- client with tencalo the righ against t,cif-ands y lings and Yanowitch,let alone that of Feld- iteriminate 9tta mqmnes allegedly outside the sen~ nf ?he investication, and t6ct s shuh and Chernis, may be innocently ex. Jowg plained. ask clarifyine questions. Cf. Hannah v.
9 It is reither unnatural nor un- Judg.
usual to provide the name of an attorney tr, larche,363 U.S. 420,447 n.26,00 ti.Ct. E02, Q a 1517, 4 L.Ed.2d 1307,1324 (1960). These Auth u colleague in legal difficulty. Judge Tamr ,
Bryant acted well within his discretion in respons(bilitics are of critical impoitance f tion c '
d proposing an evidentiary hearing to resolve and their competent performance requires tract
- M 2aciuLsinpules. 'CL in Ket irvesti- adequate preparation. In particular,intelli-gent exercise of the Iifth Amendment priv- sougl M gution Before the April 1975 Grand Jury, publit supra. ilege demands both a knowledge of the k underlying facts and an appreciation of noter 4 in declining his invitation, the SEC ar- their legal significance. thatI E gued that such collateral inquiries would andtl delay and hinder its investigations. Analo- The order of the district court is accord, 3 ance ;
gizing its procedures to those of the ;;and ingly affirmed vi thout prejudice to the
$ R S
jury, the Commission insists that speed is right of the SEC to renew its application if
- 6. it is still of the view that Csapo's tvpresen-In fiscal 1974 the Commission referred 7.67 1. Ma cases to the Departmert of Justice for possMe See the SEC's Rules Relatmg to investiga-prosecution. As a result. a total of 169 persons tions.17 CFR $ 203J(c). g were named in 40 separate mdictments
- OI then i
_ _ _ _ _ _ _ _ _ _ _ - - - - - - - - - - - - - - - - ~ - - ~ ~ - ~~ ~
- n. .
V0 GEL v WASHINGTON METRO. AREA TRANSIT AUTil0RITY 13 Che es $33 F.2d 13 0974) ..
tation by Feldshuh and Chernis willimpede new agreement, they are presumed to have d its investigation and if it is willing to come renewed the origina) contract for another [
several forward with the requisite proof-of its alle- year.
gations. Cf. In Re: Investigation Before 2. District of Columbia o7 pl
- uestra. Die April 325 Grand Jury, supra. Presumption that original employment h des any Affirmed. contract has been renewed from year to y shed ir year if parties continue the employment eriouslY relatiorship without a new agreement was - ,
More- g properly applied to support conclusion that 4 under Vf--,ii,$rsn 9 contract of an employee of predecessor of pl dll per- the Washington Metropolitan Area Tr.nsit p
- s were Authority, which contained an inte2 ration (
ed, the
- enceiv-clause providing that contract co'nd not be modified, extended or varied except in writ-
[
)
- ** IIerman V0 GEL, Appellee, ing signed by both parties, was extended by ation in the Authority after acquiring predecessor's b Y'
ne SEC r.ssets. National Capital Area Transit Act !! '
5, delay WASHINGTON METROPOLITAN AREA of 1972, i 1 et seq., 86 Stat. 999; Wash- j ubstitu. TRANS~T AUT110R'TY, Appellant. ington Metropolitan Area Transit Regula- j e put t No. 74-2112. tion Compact, subd.1 et seq., D.C.C.E. i 1-
- a new 1431 note. I Uni.ed States Court of Appeals, 3 Officers *==99. ;
by the District of Columbia Circuit. '
It does not necessarily contravene pub-role of Argued Nov. 4,1975. lic policy for a public employee to receive a reby t Decided April 8,1976. bonus. 6 U.S.C.A. ll 4501-4506; 10 U.S.
T.Feld- C.A.$1124.
amenced (
v 'e Dismissed employee of the Washington
- 4. District of Columbia =7 B nus s ught under employment con- q
- Metropolitan Area Transit Authority vin nis brought action seking, inter alia, bonus tract by sales director for the Washington h nst self- and severance pay. The United States Dis- Metr p litan Area Transit Authority was ,
diegedly trict Court for the District of Columbia, not c ntrary to public policy on theory that j 1
ion, and Jeeph Charles McGarraghy, Senior District it contravenes public policy for public em-
- nnale v. Judge, entered judgment from which the ployee to receive c vnus, where legislature _
Authority appealed. The Court of Appeals, had mandated sMonus under section of i
Ct.1502, These Tamm. Circuit Judge, held that presump- the Authority's compact obligating it to portance requires tion of renewal of original employment con-tract was maintain all employee benefits so that no correctly applied; and bonus employee transferred from predecessor was 3 f
r,intelli- sought by. plaintiff was not contrary to put in a w rse p siti n than he was prior to 4 ent priv- his move. Washington Metropolitan Area' j public policy; that remarks by plaintiff did of the not meet standards for discharge for cause; Transit Regulation Compact, subd. 66(e), j .
ation of that bonus had been incorrectly computed; D.C.C.E. i 1-1431 note. q
' that plaintiff was not entitled to sever- 5. District of Columbia *=7 j 4 accord- ac pay. In the context of a move which disrupt- ,
to the - Reversed in part and remanded. ed the smooth functioning of employee's cation if department, employee of the Washington ,
epresen. Metropolitan Area Transit Authority was J
- 1. Master and Servant C=>9 not discharged for enuse so as to lose his 4""'N Where parties enter into a contract of right to a bonus under the terms of his employment for a term of one year and employment contract, either by advocating then continue the relationship without a a "sickout," which did not cause any em.
' pen ~ +
?M 1336 636 FEDERAL REPORTER,2d SERIES Commission administrative proceeding that Williar FEDERAL TRADE COMMISSION might result in divestiture of subsidiary with wh from corporation was proper exercise of Catherin-inherent equitable power of district court l were on EXXON CORPORATION et where corporation had been ordered to hold 1 Michat al., Appellants. separate subsidiary pending outcome of the Washing No. 80-2M3. administrative proceedings, in that even Sneed, A though corporation and its subsidiary gatA Ds United States Court of Appeals, District of Columbia Circuit. proval of55
- ST' 988 " of subsid.
theDacquisition iary, pos-"E
- ard b E t Chapma-Argued Nov. 17, 1930. sibility existed that divestiture would be : C., were Decided Dec. 23, 1980. rdered, which possibility gave rise to a ,
fundamenta! conflict between corporat,on i '
Befori
' j and subsidiary, and thus it was essential ! cuit Jud Corporation appealed from an order of that hold separate order be r gorously en- ! United the United States District Court for the forced, and prohibition order was necessary I trict of District of Columbia, John H. Pratt, J., to fully effectuate the order, prohibiting counsel for corporation from Opini
- 2. Trade Regulation *=751 having an attorney-client relationship with u ge I Federal Trade Commission was not en-a wholly-owned subsidiary of corporation. titled to access to documents and personnel I EDW and granting counsel for Federal Trade of subsidiary of corporation outside of ad- Exxo Commission access to documents and per- ministrative discovery process in connection . Order e sonnel of subsidiary outside of the admims- w th edministrative proceedings challeng- Pratt <
trative discovery process. The Court of Ap. ing acquisition of subsidiary by corporation, I Judge i
peals, Edwards, Circuit Judge, held that: in that administrative proceeding was an retaine.
(1) the order prohibiting either in-house or adjudicative proceedirig, and there was no attorne retained counsel for corporation from hav- reason why rules and procedares of Federal of a wt ing any attorney-client relationship with Trade Commission governing discovery in i as the subsidiary was proper where corporation adjudicative proce+ dings sho'ild not have an adn had been oniered to hold separate subsidi- been followed in interviewing personnel and sult in ary pending outcome of the administrative securing documentary evidence of subsidi- from E proceedings by Federal Trade Commission ary. Rules of Practice for Federal Trade selfor' challenging corporation's acquisition of sub- Commission, Pt. 3, 66 3.31-3.40,15 U.S.C.A. liberal sidiary, in that the order was reasonably foll.645. sonnel related to the hold separate requirement: ing thi
- 3. Attorney and Client *=20 (2) Federal Trade Commission was not enti- in-h use litigati n counsel f c rpora-admini tied to access to subsidiary information and ti n were properly excluded from access to personnel u.;2ide of the normal discovery e niidential e mpetitively sensitive 1-f r- For procesa established by Fedcal Trade Com-mission for use in adjudicat.ive proceedings;
. mation of corporation's wholly-owned ,ub- that r t sidiary in connection with administrative counse and (3) corporation s in house litigation proceedings by Federal Trade Commission torney counse! were properly excluded from access g ,3 acquisition of sub- Group to confidential competitively sensitive mfor- 4 sidiary, in that such exclasion from access of the mation of subsidiary.
was necessary to effectuate order requiring FTCe Affirmed as modified- corporation to hold separate subsidiary pending outcome of the administrative pro- ,
- I'[gj
- 1. Attorney and Client *=20 ceedings. j I 3 Order prohibiting in-house ed retained counsel for corporation from having p. tor- Appeal from the United States District Q[ni ar ney-client relationship with wholly-owned Court for the District of Columbia (D.C. paru subsidiary during course of Federal Trade Civil Action No. 79 4 1075). St**'
s
F. T. C. v. EXXON CORP. 1337 Cite as sse F.at l$ss (tase) ig that William H. Allen, Washington, D. C., the Drives Group outside of the administra-sidiary with whom Edwin M. Zimmerman and tive discovery prtress. We remand this cise of Catherine W. Brown, Washington, D. C., case to the District Court with instructions t court were on brief, for appellant, to modify the Order accordingly.
i to hold Michael A. Schlanger, Atty., F. T. C., ,,
of the Washington, D. C., with whom James H I. BACKGROUND
'* Sneed, Acting Gen. Counsel, Ernest A. Na- The issues presenttd in this appeal are edi n- gain, David W. Long, Damel S. Koch, Rich- novel. For this reason, we set forth the ard L Sippel and John R. Metz, haren L facts and procedural history of this action
,' Chapman, Attys., F. T. C., Washington, D. with wme detail.
iuld be C., were on brief, for appellee.
e to a In May of 197S, Exxon announced the oration Before EDW tRDS and GINSBURG, Cir< development of a new technology (called "
ssential cuit Judges, and JOYCE lirNS GREEN,' "alternsting current synthesis" or "ACS")
isly en- Umd States Distr;ct Judge for the Dis- for contmlling the speed of certain alter-m aary . tget d Columbia. nating current motors. At the same time, Exxon announced plans to acquire Reliance Op. .imon for the curt fi:ed by Ctreutt Flectric Company, a company that pos-Judge EDWARDS. sessed manufacturing and marketing capa-not en- bilities that Exxon lacked in the general rsonnel EDWARDS, Circuit Judge:
> of ad- Exxon Corporation here appeals from an area of controls (sometimes called " drives")
for electric motors. After negotiations be-meetion Order entered by District Court Judge John Talleng- Pratt on June 25, 1980. In that Order, tween officials at Exxon and Reliance, the e Judge Pratt prohibited bo'h in-house and Reliance Board of Directors announced that i retained counsel for Exxon from having an it would neither endorse nor oppose a was no attorney-client relationship with a segment tender offer by Evxon. Exxon made a kleral of a w' icily-owned Exxon subsidiary, known farmal offer to buy any and all outstanding
'very m as the Drives Group, during the course of shares of the common stock and the Series at have an administrative proceeding that may re- A preferred stock of Reliance tendered by mel and sult in the divestiture of t.he Drives Group July 11,1979 (later extended to July 13).
subsidi- from Exxon. The Order a'.so granted coun. Tendered shares could be withdrawn after il Trade sel for the Federal Trade C< rrmission (FTC) August 20, 1979, unless purchased by Exx-U.S.C.A. liberal access to certain doewents and per- on. On July 13, more than 95 percent of sonnel of the Drives Group, without requir- the common stock of Reliance and nearly 75 ing the FTC to resort to the established percent of its Series A preferred stock had corpora- administrative discovery proa is. Exxon been tendered.
iccess to contests both aspects of this Order. In compliance with the Hart Scott Rodino e infor- For the reasons stated below, we affirm Act,15 U.S.C. 6 18a (1976),8 the Depart-1ed sub- that portion of the Order that prohibits ment of Justice and the Federal Trade istrative counsel for Exxon from maintaining an at- Commission were notified on May 29, 1979 nmission torney client relationship with the Drivee of the imperding acquisition. On July 27, i of sub- Group. We reverse, however, that portion 1979, pursuant to the authority of Section n access of the District Court Order that grants the 13(b) of the Federal Trade Commission Act, equinng FTC access to documents and personnel of 15 U.S.C. 6 53(b) (1976),8 the FTC filed a ibeidiary 2. 15 U.S.C. 6 53(b) provides:
a sitting by designation pursuant to 28 U.S.C.
tive pro- Whenever the Commission has reason to be-
$ 292(a)(19*6).
heve--.
- 1. 15 U.S.C. $ IBa prohibits the consummation (1) that any person, partnership, or corpo.
of certain mergers and acquisitions until feder- tauon is violatmg. or is about to violate, any UI31"C1 al antitrust authorttles at the FTC and the De- provision of law enforced by the Federal na (D.C- partment of Justice have been notified and a Trade commission. and statutory waiting period has expired. -
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1338 636 FEDERAL REPORTER,2d SERIES complaint in District Court.8 The com- Exxon's acquisition of Reliance would ensure that, in plaint sought a temporary restraining order likely have anticompetitive effects in the succeeded in i and a preliminary injunction prohibiting United States EVSD market, including meaningful diw Exxon from buying the tendered Reliance but not limited to: Reliance strongl l
shares, pending resolution of an FTC pro- (a) increasing the level of concentra- p this third alteri ceeding in which the legality of the acquisi- tion in the market; financial loss n tion would be challenged under Section 7 of (b) elevating barriers to entry into the to the acquisitic the Clayton Act,15 U.S.C. s IS (1976), and market o',. and not by the Section 5 of the Federal Trade Commission . A fourth optiot Act,15 U.S C. % 45 (1976).
,c) ch. .m nating competition in the de-permi e acq velopment of EVSD technology and subject to a re<
In the corresponding administrative pro- produm }
ceeding, the FTC aHeged a violation of the i competitors nor antitrust laws based on a " potential compe- A 2345 { use of its AC tition" theory of antitrust liabihty! The A temporary restraining order blocking pressed some FTC contended that Exxon had been ac- the acquisition was issued by District Court i On August tively preparing to enter the "drises mar- Judge Harold H. Greene on July 28, 19793 a
ket" on its own, either de novo or by acquir- During the course of subsequent hearings ; cided ;
agains ;,
ing a smaller "tc,ehold" company. The FTC before District Court Judge John Pratt, .1e court dec administrative complaint thus alleged that four options were presented concerning the gf g;,
certain cnticompetitive effects would result possibility of further preliminary injunctive ;,
from the acquisition, as foHows: relief. One such option was that the court the pubb.e mte Exxon's acquisition of Reliance would cot.ld impose no further equitable relief; sought under ehminate Exxon as an actual potential this position was advocated by Exxon on i Trade Comm.is entrant into the United States EVSD the ground that the FTC had not estab- . ..
[ electronic variable speed industrial lished the prerequisites for a preliminary i h. .mg my i drives] market, thereby eliminating the injunction. A second option was that the ,
I likelihood that entry by Exxon would: court could enter a preliminary irijunction Exxon could 1 l ta) decrease concentration in the mar- prohibiting the purchase of the tendered tion of the ac(
i ket; Reliance shares by Exxon. A third option .
t l Exxon mainta l (b) increase competition in the market; was that the court could permit the acquisi- . dm. . .slons of 1 or tion to go forward, t.ut subject to a condi- and independt (c) increase competition in the dnelop- tion that Exxon maintain certain segments 17 Order was ment of EVSD technology and prod- of Reliance separate from Exxon. The the cou-t coul ucts. " hold separate" option was suggested to licensing alter (2) that the enjoming thereof pendmg the the order or injunction shall be dissolved by a Exxon did 1 issuance of a compiamt by the Commission the court and be of no further force and and until such complamt is dismissed by the ?ffect. Provided further. That in propar cases i chase the ter Comnussion or set aside by the court on the Comnussion may seek. and after proper ,
September 2C review or until the order of the Commission proof, the court may issue, a permanent in- enjoin Exxon made thereon has become fmal, would be in Junction. Any such suit shall be brought in the interest of the pubhc- the distnct in which such person. partner- 7. See note 27 the Commissen by any of its attorneys desig- ship, or corporauon resides or transacts busi-nated by it for such purpose may bnng suit ness. ,
- 8. A.180 and in a d2stnct court of the Umted States to , position, on enjoin any such act or practice. Upon a 3. Joint Appendix (" A?) 10. separation of proper showing that, weighmg the equities tions" would and considenn;; the Comnussion's hkehhood 4. See Uruted States v. Afanne Bancorporation.
of ulttrnate success, such acuan would be in inc,418 U S. 602. 62340. 94 S Ct 285& 2869- t W Augus the pubhc interest. and after notice to the 78. 41 led.2d 978 (1974), appears at A defendant, a temporary restratnmg order or a prehnunary injunction may be granted with-
- 5. Administrauve Complamt. paragraphs 15 and As W out bond Provided, how ever. That if a com. l. hold separa 16 plaint is not filed withm such penod (not tnet Court, exceedmg 20 days) as may be specified by much less a the court after issuance of the temporary 4. A. 176 See also supportmg Memorandom the h.igh pri restrammg order or prehmmary mjuncuan. Opmion. A.170 pellee. p.10 l
l I
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F. T. C v, EXXON CORP. 1339 Ctie as sse F.2d Isse (l980) would ensure that, in the event that the FTC tender offer 33 Reliance based its suit on in the succeeded in its administrative action, allegations that, in June 1979, in order to
- luding meaningful divestiture could be imposed 3 induce Reliance not to oppose Exxon's Paliance strongly urged the court to accept tender offer, Exxon assured Reliance that it .
xntra- this third alternative, so that the risk of would not withdraw from the transaction in financial loss resulting from the challenge the event that Exxon was required to hold sto the to the acquisition would be born by Exxon, Reliance separate during litigation seeking and not by the shareholders of Reliance.8 to prevent the acquisition. Four days later, he de. A fourth option was that the court could on September 24, Exxon consummated the y and permit the acquisition to go forward, but tender offer. Exxon is now the sole owner subject to a requirement that Exxon offer of Reliance, competitors non-exclusive " licenses" for the In the course of further proceedings be-use of its ACS technology. Exxon ex- fore the District Court, the court concluded C ."E pressed some interest in this alternative- that the licensing remedy advocated by On August 17, 1979, the District Court Exxon was not a reasonable alternative to a 3979 4 decided against the issuance of a prelimi- hold separate order. As a result, on Octo-2 rings pntt nary injunction blocking the acquisition? ber 26,1979, the court entered a final order The court decreed that, "in light of the that mirrored in most respects the interim ng the relief hereinafter granted, the Federal Order of August 17)2 The provisions of the mctive
,,,...g Trade Commission has failed to show that October 26 Order are important to this pro-the public interest entitles it to the relief ceeding, and need be described in some de-a sought under Section 13(b) of the Federal tail.
Trade Commission Act." In lieu of a pre. The District Court made the factual firJ-esu b-ninary liminary injunction, and "in the exercise of ing that the " Electrical Drives and Systems
.at the the inherent equitable powers of the Group" of Reliance (the " Drives Group")
mction Court," the District Court ordered that could be operated as a separate entity by ndered Exxon could proceed with the consumma- Exxon during the pendency of the Federal option ti n of the acquisition on the condition that Trade Commission administrative proceed.
sequisi. Exxon maintain the " drives" and " motors" ing 88 The court then entered a comprehen-condi. divisions of Reliance completely separate s ve hold separate order insulating the -
gmenu and independent from Exxon. The August Drives Group from Exxon. To do no, the The 17 Order was to remain in effect only until court relied upon its " authority either under ted to the court could more carefully consider the 613(b) of the Federal Trade Commission licensing alternative. Act,15 U.S.C. 5 53(b), or its inherent equi.
ce and Exxon did not immediately move to per- table p,wers to enter an order in such form er esses chase the tendered Reliance shares.8' On as it considers necessary to protect the abili-proper September 20, 1979, Reliance filed suit to ty of the Federal Trade Commission and the
","[ enjoin Exxon from withdrawing from the courts to order meaningful relief upon con-aartner. 7. See nere 27, infra. 11. Separate Appendix of Appellee, p 2300 ts busi- (Complaant).
- 8. A.180 and 243 The FTC acquiesced in this position, on the assumpuon that a " complete 12. A. 785. The court also entered detailed separation of the two companies' EVSD opera- Findings of Fact (F0F) and Conclusions of Law tions" would be imposed. A. 202. (COL). A. 788 Federal Trade Commission v.
ora tion. Exxon Corp.,1979-2 Trade Cas. (CCH) I 62.-
1,2869- 9. The August 17, 1979 Order of Judge Pratt 972 (D D.C.1979).
appears at A. 619-23.
- 13. FOF 88. A. 811. While the August 17 Order 515 and 10. As postulated by the FTC. as a result of the
" hold separate" hmitation imposed by the Dis- had opphed to both the dnves and motors oper.
ations of Rebance, the October 26 Order ap-tnet Court the acquisition of Rehance was much less attractive to Exxon, particularly at phed only to the drives operation. FOF 87 A.
ra the high pnce ongmally offered Bnef of Ap- 810 pellee p.10.
1340 636 FEDERAL REPORTER,2d SERIES clusion of proceedings now pending before Exxon proposed that 'ooth in-house and re-the Federal Trade Commission to determine tained counsel representing Exxon in the peals ik the legality of this acquisition."" sion was PTC proceeding have access to Drives conditions The October 26,1979 hold scparate order Group confidential information, solely for that litige applied to Exxon and its subsidiaries, and to purposes of that proceeding, subject to ap-
"all directors, officers, employees or agents" propriate restrictions prohibiting the disclo- side coum of the corperation. A. 786. The Order gen- sure of that information to other Exxon " equal og erally required that " Exxon shall cause the employees. Exxon efficials had assumed Group in-Drives Group to be maintained as a sepa- that its counsel would represent the Drives court thu:
! mission er rate entity such that the Drives Group will Group during the administrative litigation, t and perst be capable of being divested pursuant to and believed such to be permitted by the ! administn any subsequent order of the Federal Trade October 26 Order. Thus, Exxon simply Commission." Id. To effectuate that end, sought modification of the October 26 Or- l the court was to bt -
the Order prohibited Exxon from taking der to allow greater access to necessary k disclosed any action "which would cause any changes information.
or alterations to be made in the Drives , court helc Group's business or operations or organiza- The FTC acknowledged that Exxon need. Neither tion, except "as may be required m the ed access to the information for purposes of i side cot ordinary course of business. A. 78, Most the administrative litigation." The FTC counsel importantly for purposes of t.iis act(ion, the took the position, however, that such infor. client ri Order also provided that Exxon and the mation she 21d only be available to outside or Drivi Drives Group were not to seek or obtain retained consel, and that such counsel l the litis -
any of the other's customer lists, trade should have access to the information only I complia secrets, unpublished price lists, non-public through adm. . trative rules governing ims Court's financial and accounting books and records, third party discovery. In addition, the FTC l A.1569, or other confidential competitively sensitive argued that there should be no attorney- : To ensu information." Id. Exxor. did not appeal client relati nship between the Drives ; ordered E -
the October 26 Order. Gr up and counsel for Exxon. These posi- compliano in the course of preparing to defend the tions were advanced in an effort to ensure { .
the manns i
acquisition m the FTC admmistrative ac' that the Drives Group would indeed remain comply, is tron, Exven found that the pohibition separate from Exxon during the ensuing I the orders agamst the exchange of " confidential com- 1 tigation.
' The Dis petitively sensitive information" made At the time when Exxon's motion to findings c -
preparation for the litigation " impossible." modify the October 26 Order was pending, connection Brief of Appellant, p. 7. Since Exxon's an issue also arose as to whether Exxon was in the Jun lawyers were either " employees" (in-house adequately complying with the terms of the text of thi counsel) or " agents" (retained counsel) of October 26 hold separate order. fundament Exxon, the prohibition against the trans- "*
On June 25, 1980, the District Court en-mission of confidential information techni- tered an Orde that is the subject of this
'9"*"7 "'
cally included the transmission of such in- appeal.t8 In response to Exxon's request formation to lawyers for Exxon. Exxon's 19. As sta:
for access to information, the court held Compla lawyers were thus blocked from obtaining allegedly vital informatica needed to de- that "outside counsel of record for Exxon" Comnus fend the challenged acquisition- was entitled to seek and obtain from the Driven Group all relevant and nonprivileged accessi As a result, on December 4,1979. Exxon infortnation concerning the Drives Group sonnet moved to modify the October 26 Order.as for use in the Fi C litigation and any ap- b
- 14. COL 6. A. 813. 17. A. 831 (respondmg memorandum of the Fed. sonable
- 15. A. 816. eral Trade Commission). PMPa*
such n
- 18. A.1561. Federal Trade Commission v. Exx. * * **Y
- 16. Bnet of Appellant, p. 9. on Corp.,1980-2 Trsde Cas. (CCH) % 63,478 (D.D.C.1980). ($
by each -
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!- F. T. C. v. EXXON CORP. 1341 Che as $34 F.2d tsse (1980) i; -
peals the'refrom. A.1567-68. This provi- FTC during the litigation' determining the l 6n2 l_ a m, sion was made subject to three important propriety of the acquisition of the Drives I
, Drives conditions, hawever. First, the court held Group by Exxon. ;
lely for that litigation counsel for the MC and out. I
'ith these facts m. mmd, we turn to
! t to ap- - i side counsel for Exxon were to be afforded ,
l e disclo- " equal opportunity for secess" to Drives e nsider the objections raised by Exxon to Exxon Group information and personnel.8' The the June 25 Order. As stated at the outset,
, issumed court thus granted the Federal Trade Com- Exxon primarily objects to the provisions of a Drives mission access to Drives Group information the Order that prohibit counsel for Exxon
-igation, and personnel outside of the established from maintaining an attorney-elient rela-by the administrative discovery process.8' Second, tionship with the Drives Group, and that simply the court held that all information received grant the PTC " equal access" to Drives 26 Or- was to be treated as confidential and not Group information and personnel outside of scessary _ disclosed to any other party.88 Third, the the administrative discovery process. In
,- court held: addition, Exxon also takes issue with the m need- Neither complaint [FTC) counsel nor out- aspect of the Order that denies in-house l poses of side counsel for Exxon nor any in-house counsel for Exxon access to information le PTC counsel of Exxon may have an attorney- and personnel of the Drives Group.
h infor. client relationship with the Drives Group outside or Drises Group personnel for purposes of counsel the litigation or for purposes of ensuring II. PROHIBITION AGAINST on only compliance with this Order or with this ATTORNEY-CLIENT
, verning Court's Order of October 26,1979. RELATIONSHIPS i he FTC A.1569. .
, 1. Preh. ,rmnary Considerations .
! :torney- To ensure compliance, the District Court i Drives ordered Exxon to submit periodic verified Exxon most vigorously contests that as- j r compliance reports, " setting forth in detail pect of the June 25 Order that prohibits i the manner and form in which it intends to both in-house and retained counsel for Exx- l remain comply, is complying or has complied" with on from maintaining an attorney client re-ensuing the orders of the court. A.1569. lationship with the Drives Group during the l
The District Court did not submit any pendency of the FTC administrative pro-i tion to findings of fact or conclusions of law in ceeding. Essentially, Exxon objects to this ending, connection with the modifications contained provision on the ground that the Drives ton was in the June 25 Order. It is clear from the Group is a wholly owned segment of Exxon, s of the text of that Order, however, that the court and that this prohibition against represen-j fundamentally viewed the Drives Group as tation of the Drives Group interferes with surt en, a " neutral" body, to be separate from, but Exxon's statutory and constitutional right of this equally available to, both Exxon and the to be represented by counsel of its choice in request 19. As stated by the court in full: ing Mth respect to relevant and non privi-rt held Complaint counsel for the Federal Trad, leged subjects. Such requests of counsel
! Exxon" Comnussion in Docket No. 9130 (hereafter shall extend only to documents or interviews "c mpiam counsel") and outside counsel for that may reasonably be expected to yield um the information regarding the allegations of the a .. Exxon anall be afforded equal opportunity for mleged access to Drwes Group information and per. Commission's complaint or the defenses of
- Group sonnel The Drives Group shall make availa. the respondents in the htigation.
any ap. ble to outside counsel for Exxon or to the A.1568.
Commission's complaint counsel upon rea.
I the Fed. sonable request. solely for the purpose of 20. The FTC has promulgated rules of practice
- preparing for and conductiog the htigation. for use in adjudicative proceedings that govern such relevant and non-pnvileged documents - the mauer in which discovery is to be con-
- ., y, ny. as may be requested by each such counsel ducted. 16 C.F.R. il 3.31-3.40 (1980).
j ! 63.478 for inspection and copytng, and such person-l nelin the Drives Group as may be requested 21. Three exceptions were made to th:s prohibl.
by each such counsel for informal mterview- tion that are not relevant here. A.1568.
1 j- t i
, IM2 636 FEDERAL REPORTER,2d SERIES the administrative litigation.82 Exxon con. peal by Exxon; In the June 25 Order, the tends that this richt to counsel may be merger under impaired only for "the weightiest of justifi- District Court interpreted the- necessary 61651(a), an cations," and that no such justification ex- protective measures to include a prohibition' petition the a ists in this case. Brief of Appellant, p.17. against joint representatlon of Exxon and power. The-in resolving this claim, we note at the the Drives Group in both the FTC litigation join the mer outset two special circumstances in this case and in compliance proceedings. Exxon's al. thourb not er that we believe temper Exxon's "right to leged statutory and constitutional rights as had the power counsel" argument. First, we emphasize owner of the Drives Group must be viewed relief. In so that in the FTC proceeding challenging the with these facts in mind. recognid tk acquisition of Reliance, Exxon's interests 2.
injunctive rel will be r(presented by counsel of Exxon's The Legalify of the " Hold Separate" tnent of the s On!er ,
choice. Exxon has retained counsel for that ,
[W]ithout :
proceeding. Moreover, as a result of the We turn then to consider the prohibition i '*"
modification requested by Exxon and incor- mposed by the District Court. It has long ' '# ""
porated m the June 25 Order, that counsel km iM tht in d er fw W P'*E*'ti'**
has access to all information of the Drives G vernment to monitor and implement ef-would le fr Group that is necessary to defend the acqui. '** D u* antitrust laws, and thus p* tion of the sition. Exxon admits in its brief that "[t]he tect the pubh.c interest m the vigorous en. restoration only additional information that would f mment of hse laws, it is esseritial that an effectiv come to counsel as a result of there being some mechanism exist by which the i obviously t an ordinary attorney client relationship Government may prevent the consumma- final o-der -
would be irrelevant or privileged informa- ti n of a merger or acquisition that it be- usual. Adr tion!' Brief of Appellant, p. 25. Exxon .
r that the C has not claimed that it is in anytions way preju- lieves to be unlawful. Mergers are often folicwed by a commingling l and acquisi-acramble tr diced mation.ssby its inability to secure such infor- of assets and other substantial changes in vents entry the structures of the enterprises involved. - titure.
Second, we note that the only way that k"" *0*""***" *"
I 384 U.S. at Exxon was able to acquire Reliance, and sible for the Government to compel a return These conet thus make the Drives Group a wholly to the status quo, and the legality of the tM oned segment of Exxon, was through the chrilenged merger or acquisition may be-- express statu imposition of protective measures designed c me essentially a moot question. District Court to ensure that any divestiture later ordered A w preli in FTC v. Dean Foods Co.,384 U.S. 597, would not he a hollow remedy. These pro. Cong. Rec. 36f tective measures, embodied in the October 86 S.Ct.1738,16 led.2d 802 (1966), the -
Supreme Court considered the power of a this law, Cong 26 Order, were not challenged on any ap- Court concern that 22.
of Appeals to enjoin a proposed '
Exxon relies on S U.S C. % 55$(b). which available to t fees of the Drives Group, without any need to provides that a party to an admmistrative pro-ceeding "is entitled to appear in person or by or resort to the admmistrative discovery process.
unhw TM with counsel," and on the due process claust of To assert that Exxon is prejuchced by its inabil. U8 C 5 53(b)-
the Conststution. U.S.Const. Amend. V. ity to deal with the Drives Group "as lawyers gent, tradition
- 23. for the enterpnse of which it is part"is to beg junctive relief Rather, appellant asserts that Exxon's coun. the questi n of how Exxon is so prejudiced.
set ts hindered by the fact that counsel does not ference Repor Similarly. It is not clear how Exxon is depnved have *the abihty freely to deal with the person, under the Order from being " fully apprised of net and files of the Drives Group of Rehance as inf rmation provided to adversaries / the Or. j ,public m, te lawyers for the enterpnse of which it is part de r granted Exxon and the t TC " equal access,' I applicable, I and the assurance of bems fully apprised of information provided to adversaries." Bnef of to Drives Group information and personnet tinal "equ Aplsellant, p. 25 n.7. It is far from clear how, Exxon has sat presented any reason why it ever, how these facts prejudace Exxon. While cannot receive copies of any information pro- 24. 15 UAC. 5 Mded to the FTC; by definition, such informa- supra.
counsel may not deal with the personnel and files of the Drives Group "as lawyers for the tion would be relevant and unprivileged and enterpnse of which it is part." the June 25 thus available to Exxon. This observation is 25.~ Under 15 t Order broadly estabhshes the right of counsel strengthened by the modification of the Order be granted by for Exxon to " deal with" the personnel and imposed in part !!! of this opmion. infra' showing that, sidering the 4
F. T. C. v. EXXON CORP. IM3 cae sa sse r.u aus osso)
Order, the merger under the All Writs Act,28 U.S.C. damage, probability of success on the necessary $ 1651(a), and the ability of the FTC to merits, and that the balance of equities Prohibition petition the appellate court to exercise that favors the petitioner. This latter stan-Exxon and power. The Court held that power to en- dard derives from common law and is
} litigation join the merger did exist, and that, al- appropriate for litigation between private i c,xxon's al- though not conferred by statute, the FTC parties. It is not, however, appropriate d r ghts as had the power to petition the court for such for the implementation of a Federal stat-be viewed relief. In so holding, the Court exoressly ute by an independent regulatory agency recognized the importance of preliminary where the standards of the public interest -
injunctive relief to the effective enforce- measure the propriety and need for in-Separate" ment of the antitrust laws: junctive relief The conferees did (W]ithout standing to secure injunctive not intend, nor do they consider it appro-archibition relief, and thereby safeguard its ability t priate, to burden the Commission with t has long rder an effective divestiture of acquired the requirements imposed by the tradi-
- for the pr perties, the Commission's efforts tional equity standard which the common lement ef- w uld be frustrated if consumma-law applies to private litigants.
thus pro- tion of the merger is not restramed, the restoration of [the acquired company] as H.R. Rep.No.624, 93d Cong.,1st Sess. 31 an effective and viable cormtitor will (1973) U.S. Code Cong. & Admin. News 1973, h". obviously be impossible by the time a pp. 2417,2533. (emphasis in original).
t , final order is entered. This is not un- Courts thus possess broad authority to ha be-usual. Administrative experience shows enjoin the consummation of a contested ac-that ti,e Commission's inability to un- quisition or merger if such action would id huisi- scramble merged assets frequently pre- serve the public interest in the effective nmingling vents entry an ef ective rder of dives- enforcement of the antitrust laws. At the hanges in titure. same time, it is well recognized that the involved.
en impos- 3S4 U.S. at 606 n.5, 86 S.Ct.1744 n.5. issuance of a preliminary injunction prior to il a return These concerns later motivated Congress a full trial on the merits is "an extraordina-ity of the to grant the FTC, in 15 U.S.C. % 53(b), ry and drastic remedy." Afedica1 Society v.
may be. express statutory authority to petition in Tola,560 F.2d 535,538 (2d Cir.1977). This District Court for a temporary restraining is particularly true in the acquisition and rder or preliminary injunction.se See 119 merger context, because, as a result of the U.S' 59" Cong. Rec. 36595-619 (1973). In enacting short life-span of most tender offers, the 1966), the this law, Congress further demonstrated its issuance of a preliminary injunction block.
" I* concern that injunctive relief be broadly ing an acquisition or merger may prevent Proposed available to the FTC by incorporating a the transaction from ever being consum-ny need to unique "public interest" standard in 15 mated. United States v. Culbro Corp.,436 y procest U.S.C. 6 53(b), rather than the more strin- F.Supp. 746,757.-58 (S.D.N.Y.1977); United i ns inabu' gent, traditional " equity" standard for in- States v. Northwest Industries, Inc., 301 t*d]
xejudiced-junctive relief 88 As explained in the Con- F.Supp. 1066, 1095-97 (N.D.111.1969).
ference Report: Courta hav particularly expressed cc,cern s depnved The intent is to maintain the statutory or when the grant of a preliminary injunction
' P.pnsed O
"public interest" standnd which is now may cause shareholders of the acquired zal access applicable, and not to impose the tradi- company to bear any loss resulting from the personnet tional " equity" standard of irreparable antitrust litigation.88 See Carrier Corp. v.
an wb" it
,ation pro- 24. 15 U.S C. i 53(b)is set forth in full at note 2. mate success, such action would be in the pub-3 g,.e. ta, supra tw interest." See note 2, supra.
! 'd i is 25. Under 15 U.S.C. 6 53(b). an injunction may 29. If consummation of the transaction is ths der be granted by a District Court "upon a proper barred. shareholders of the to-be. acquired cor.
I 1/m. showing that, weighing the equities and con. poration w0l bear any subsequent decline in s4denng the Commission's likelihood of ulti. value of the stock from the acquisition price.
If the transaction is consummated but divesti-
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636 FEDERAL REPORTER,2d SERIES 1344 United Technologies Corp.,1978-2 Trade 34 (1971). The Third Circuit has expressly prelimir Cas (CCH) 5 62,393 at 76,378 (N.D.N.Y.), left open the question whether such relief the pub aff'd,1978-2 Trade Cas. (CCH) i 62,405 (2d may be issued pursuant to 15 U.S.C. ment of Cir.1978); United States v. CuMro Corp., 6 53(b),88 or whether that provision may time, cc supra. only be used to completely block a transac- ent equ remedi<
As a result of the tension between these tion believed to violate a statute enforced est wit conflicting interests, courts have often de. by the Federal Trade Commission. FTC v.
private nied requests for a preliminary injunction if British Oxygen Co., 529 F.2d 196,199 (3d t,t n. I some less extreme means exist to safeguard Cir.1976).
able to the public interest. Perhaps the most com- Exxon has never contested the entry of a terests mon of such means is an order that permits hold separate order in this case. Exxon did the a the transaction to go forw ard, but requires not appeal the October 26 Order of the the acquiring company to hold the acquired District Court, and does not here challenge Fort company as a separate entity during the the authority of the court to impose such an that th course of subsequent antitrust litigation.27 Order. Exxon contends, however, that the contain In many cases, such a " hold separate" order hold separate order entered here may not er exer is a fully effective means of ensuring that include a prohibition against the mainte- l of the divestiture, if ordered, will be a viable rem- nance of an attorney-client relationship be- probibi <
edy; at the same time, in permitting the tween counsel for Exxon and the held sepa. ate the l transaction to go forward, a hold separate rate entity. Distric order is "less drastic" than a preliminary In reae influer injunction. Indeed, one court has expressly 3. The Legality of the Prohibition Against '
stated that, as a condition for granting a Attorney-Client Relationships the Ju:
preliminary injunction, a court must first E** ^
[1] In resolving the primary issue in this I U consider whether there is "an effective but case, both parti s have recognized that we lese drastic preliminary remedy, such as a are standing on new territory in the law. As t hold separate order, which will prevent this The question of whether or not a presump- that t!
is inyt probable intcrim harm to the public." tively valid hold reparate order may include United States v. Cu! bro Corp. 436 F.Supp. a prohibition against the maintenance of an case t 746, 750 (S.D.N.Y.1977)- attorney client relationship with the held repres In cases where authority has been given, separate entity has rarely been addressed thatvl hold separate order has by the courts. It is for this reason that we Exxor '
the issuance et segme been based upon a court's " inherent equita- have set forth at length the relevant consid.
of pro r ble powers " 3ee United States v. United erations in det(rmining whethei or not pre, becam Technologies Cor;>., 466 F.Supp.196, 200 liminary injunctive relief should be issued istd f (N.D.N.Y.1979); United States v. Interna- prior to the consummation of a challenged upon <
tional Telephone & Telegraph Corp., 306 acquisition or merger. From that discus. tweet i F.Supp. 766, 797 (D. Conn.1969), appeal dis- sion, we believe that it is evident that Con- the D missed,404 U.S. 801,92 S Ct. 20,30 L.Ed.2d gress has expressed a strong concern that the er j ture is later ordered. any costs resulting from States v. Wachovia Corp., 313 F.Supp. 632 this a '
dnestiture will be borne by the acquinng com-- (W.D N C.1970). Umted States v. International Ex) j pany. which. as generally the instigator of the Telephone & Telegraph Corp,306 F.Supp. 766 transacuon. is often viewed as the more appro- (D Conn.1969) appe.al dismissed 404 U.S 801, tweer '
pnate party to bear any loss resuhing from an 92 S Ct. 20. 3J led.2d 34 (1971), Umred States the D ,
anutrust violauon. v. North w est Industnes. 301 F.Supp. 1066 gjon c i (N D lilD69) See also Carrner Corp v. Umted Technologies Corp,1978-2 Trade Cas- (CCH)
CO#
- 27. See. e g . FTC v. Peps >Co. Inc., 477 F.2d 24 (2d Cir.1973). Ohio-Scal) Mattress Mfg Co. v + 62.405 (2d Cir 1978), Umted States v. Black solely '.
Duncan,466 F.Supp 1047 (N.D 1111930). Umt. and Decker Mfg Co., 430 F.Supp. 729 (D.Md has r <
ed States v Umted Technologtes Co'p , 466 1976). Umted States v. Hughes Tool Co., 415 remgi l TSupp 196 (N D N Y.1979). Umted States v F.Supp 637 (C D Ca 1976) dives,,
i Cu! bro Corp , 436 F.Supp 746 (S D.N Y.1977):
ICM Pealty v Cabot. Cabct & Forbes Land 28. See note 2. supra gg.
Trust, 378 F.Supp 918 (S D N.Y.1974). Umted 5l cj l
i
I
, h 1
s 1
1 I l 1.
l I
F. T. C. v. EXXON CORP. 1345
' Che as Es4 F.2d Isse (isse)
! . expressly preliminary relief be available to protect gation. Apart from this " corporate identi-the public interest in the effective enforce- ty" between Exxon and the Drives Group, ch relief ment of the antitrust laws. At the same Exxon asserts that it is in the independent l i U.S.C.
ion may time, courts have wisely relied upon inher- interest of the Drives Group to have the l
ent equitable powers to fashion alternative acquisition validated and to be spared the i transac-enforced remedies that protect this vital public inter- umertainties and risks of divestiture. In i
est with as little damage as possible to short, Exxon argues that Exron and the t PTC v.
199 (3d private interests involved in the transac- Drives Group share a common i terest in tion. In so doing, courts have often been the successful defense of the acquisition able to protect both public and private in- before the FTC, and that there is thus no i
ntry of a terests pending an expedited resolution of reason to interfere with Exxon's ordinary
.xxon did the underlying substantive controversy. right to maintain an attorney-client rela-l r of the For the reasons set forth below, we hold tienship with all segments of the corpora-chaUenge that the prohibition against representation tion.
e such an contained in the June 25 Order was a prop- We agree that Exxon, Reliarce, and the that the may not er exercise of the inherent equitable power Drives Group share a common interest in j
mainte-of the District Court. We believe that this obtaining approval of the acquisition. Now
.nship be- prohibition was necessary to fully effectu- owned by Exxon, neither Reliance as a teld sepa-ate the hold separate order imposed by the whole, nor the Drives Group segment, have District Court to protect the pubhe interest. any discernible interest in being divested In reaching this conclusion, we are heavily from Exxon and reestablished as indepen-l n st influenced by the fact that this aspect of dent entities. There is thus no conflict the June 25 0rder imposes no hardship upon concerning the primary issue that will be Exxon m its defense of the acquisition be- litigated before the Federal Trade Commis-I me in this f re the FTC. sion. We believe that another significant 1 that we l As stated at tb outset, Exxon asserts conflict does exist, however, that is suffi-l the law.
presump.
that the prohibition against representation ciently related to that proceeding to war-l
' is invalid because no reason exists in this rant the prohibition against joint represen-ay include case to interfere with Exxon's right to b* tation.
ance of an represented by counsel of its choice, a right the held Central to the existence of this conflict it addressed I that would normally entitle attorneys for the fact that while Exxon and the Drives I
4 in that we Exxon to deal freely as counsel with all Group now share a corporate identity, that ,
segments of the corporation. In the course identity might be shattered as a result of j int consid.
)r not pre- of proceedings before the District Court,it the challenge mounted by the FTC to the be issued became evident that whether a reason ex. acquisition of Reliance by Exxon. Should ,
, challenged isted for the interference depended largely divestiture be ordered by the FTC, Exxon j i sat discus. upon whether or not conflicts existed be- and the Drives Group will become competi-j twee't the interests of Exxon and those of ton. This possibility, which would result ;
that Con- the Drives Group.8' We agree that this is . '
! neern that the critical issue that must be addressed in dimetly from the proceeding at which Exx-i on seeks joint representation, gives rise to a
- Supp. 632 this appeal.
fundaments' conflict between Exxon and Sp'pN[ Exxon argues that no conflict exists, be- the Mves Gmup.
< 04 (J.S. 801, tween the interests of Exxon and those of It is inevitable that, due to the possibility
'"d'd S*'8 the Drives Group, that warrants the reten-tion of separate counsel. Exxon primarily that divestiture may be ordered and Exxon 4 - ,,$,$6, 5
contends that since the Drives Group is now forced to compete with the Drins Group, Cas. (CCH) stes v. Black solely owned by Exxon, the Drives Group the interests of Exxon differ from those of 729 (D.Md- has no independent corporate interest in the Drives Group. On the one hand, the >
- " # remai. ting a separate entity as a result of Drives Group has a strong interest in re-i divestiture obtained thmugh the FTC liti- maining a competitively independent and l
13 See A 1362-438 su w-te '
f
^
i IM6 636 FEDERAL REPORTER,2d SERIES fully viable enterprise during the yndency broad capital foundation from which to not repra of ihe administrative proceeding challeng- compete; how ever, Exxon may benefit potentially ing the legality of the acquisition so that it from divaliture of as small a unit sa pcssi- on is prol may survive in the marketplace in the event ble. June 25 C of divestiture. On the other hand, Exxon Most critically, the conflict described effectuate has an interest in ensuring that the compet- above clearly requires that separate counsel Order esta itive strength of Exxon will te at a maxi' appear n proceedings conducted to ensure tentially a mum in the esent that divestiture is or* compliance with the October 26 and June 25 For th(
dered. It is axiomatic that Exxon has little Orders.88 As a result of the possibility of public int, or no intert;st in preserving the Drives divestiture, it is essential to the Drives preventin; Group as a viable entity capable of compet- Group that the October 26 hold separate senting 11 ing with E xon m the marketplace. There order be rigorously enforced. Since Exxon of the F.
is thus a fear, expressed by the District would be better served in the event of ance proc Court below, that Exxon may allow the divestiture by severance of a " withered" ture rerr Drius Group to " wither on the vine." A. D-ives Group, Exxon does not share this remedy b ,
139338 concern, and may instead te better served tial that We note that this conflict is neither in- by " loose" compliance with the hold upa. healthy a tangible nor unrelated to the current pro- rate order. stances <
ceeding. Rather, we believe that this con. Although somewhat anomalous, we are prohibiti<
flict could manifest itself in several ways constrained to uphold the Order of the Dis- sonable e during the coune of the litigation. trict Court for the very reason asserted by imposed '
Several examples have been cited by the Exxon in support of its petition opposing for the e F"C. For instance, the Drives Group has the Order. As asserted by appellant, the we wi an interest in minimizing the risk of inad- Drives Group is now part of Exxon. It has see no ::
urtent disclosure of competitively sensitive no independent corporate existence. Exxon result of information to employees of Exxon by lim- thus argues that its counsel have no ethical of the D iting access to information that is relevant obligation to do anything other than to sel for to the litigation. Exxon does not share this serve the interests of its client, Exxon 88 Drives G interest. Similarly, the Drises Group has Howeser, since the Drives Group is now purposes an interest in having the litigation resobed sutsumed by Exxon, there is no nq, to Exxona as quickly as possible. It may te in Exx- represent the sigcificant ichsts of the in its al on's interest, on the other hand, to delay the Drives Group the es s. Gue to the possibili- forethe .
proceeding The longer the Drives Group is ty that the Drnes Group may at some point On th. -
bdd in its current "limtwa" status, the less be separated from Exxon. The possible f nd am~
likely it will be able to offer effectise com- future owner of the Drives Group does not tional ri petition to Exxon in the event of divesti- now exist to protect certain interests that of the J t ure. The interests of the parties also dif- are very much involved in the current pro- for En fer in terms of settlement negotiation. In ceedings. While that future potential own- client r the event that divestiture is accepted er cannot here protect those interests, it is 33- W' through settlement, a question will remain possible to prevent Exxon, a future poten-as to "how muth" to divest. The Drives tial competitor, from representing those in- Q*[",
Group has an interest in divesting as large terests. In other words,it is not the Drives that r, an entity as possible in order to establish a Group as part of Euon that Exxon may separa entity
- 30. There is evidence in the record to substanti. ship for purposes of ensunne compliance as for (CCH:
ate this fear. Euon has estabhshed a separate purposes of the FTC hugauon See Bnef of it is n "dnver group" withm Rehance to design and Appellant, p.15 n 4 couns manufacture vanable speed motor dnves using ty in t Enon's ACS technolcgy See Wall Street 32. The ITC argued that representation of the is eqt Journal, April 24.1980, at 3. col 2. Unef of Dnves Group by counsel for Exxon would vio- acqui:
Appellant, p. 6 n 2- late cenam ethical canons. In hght of our tors" decision here, we find it unnecessary to address such
- 31. Euon advances the same legal objections to this pomt- Ptlfsb the restneuons on an attorneghent relauon- separ i
F. T. C. v. EXXON CORP. 1347 ca. a.us r.u inn osui vhich to not npresent; it is the Drives Group as for purposes of the MC litigation and for k"'I31 .
potentially separate from Exxon that Exx- purposes of ensuring compliance with the asgoss" on is prohibital from representing. The Orders of the District Court.
June 25 Order is thus plainly designed to lescribed effectuate the provisions of the October 26 e 3 munsel Order establishing the Drives Group as "po- 111. THE LEGALITY OF TiiE " EQUAL o ensure tentially separate" from Exxon. ACCESS" PROVISION June 25 For these reasons, we believe that the [2] Exxon also objects to that aspect of bility of public interest is served by the prohibition the June 25 Order that grants complaint Drives preventing counsel for Exxon from repre, e unsel for the Federal Trade Commission separate senting the Drives Group during the course " equal opportunity for access to Drives e Exxon of the l'aC litigation and related compli. Group information and personnel,"88 out- ~
'. vent of ance proceedings. To ensure that divesti, side of the normal discovery process estab-ithered" ture remains as a meaningful potential lished by the MC for use in adjudicative are this remedy in the FTC proceeding, it is essen. pmceedings.88 Since we agree with the
' ** " *d tial that the Drives Group remains a contention made by Exxon that the FTC ld sepa- healthy and strong entity. In the circum. should be required to follow its own estab-stances of this case, we believe that the lished rules in this case, we remand this we are prohibition against representation is a rea. action to the District Court with instruc-the Dis- sonable extension of the hold separate order tions to modify the Order accordingly.
2rted by imposed by the District Court as a condition The Federal Trade Commission has estab- '
pposing for the acquisition of Reliance by Exxon ** lished rules of practice to govern the man.
3*
- We wish to emphasize again that we fore- ner in which the Commission may secure 8
see no significant prejudice to Exxon as a information from outside parties. Essen.
L..on result of this ruling 84 The June 25 Order tially, two sets of procedures hsve tan
> ethical of the District Court granta retained coun- adopted by the Commission. The first set, than to nel for Exxon nearly complete access to codified at 16 C.F.R. 65 2.1-2.15 (1980),
,xxon.
Drives Group information and personnel for establishes the procedures in which the FTC is now purposes of the FTC litigation. As a result, may secure information in nonadjudicative
> arty to Exxon should not be hampered in any way proceedings. These regulations govern the of the in its abili*y to defend the acquisition be- methods by which the Commission may mn-nossibih- fore the Federal Trade Commission. duct informal inquiries and investigations. -
ne point On the facts of this case, we are unable to The second set, codified at 16 0.F.R.
E **
- find any violation of statutory or constitu- 66 8.81-3A0 (1980), establishes the proce-loes not tional rights. We thus affirm that portion dures in which the FTC may secure infor-sta that of the June 25 Order that prohibits counsel matica in adjudicative pro-eedings.87 An
- E* for Exxon from maintaining an attorney- adjudicative proceeding is a formal pmceed-
- client relationship with the Drives Group ing required by statute to be detamined on t poten- 33. We note that in one of the casts cited by pose necessary restrictions on toe vetention of hose in. Exxon. the Distnet Court approved a stipulated counsel for the held separate entity.
hold separate order agreed to by the parties t Drives that req atred the acquinng company to retain 30 See rote 23. supra and surroundmg text.
on may separate legal counsel for the held separate entity. FTC L allsbury Co.,1976-2 Trade Cas. 35. See note 19. supra _
ce as for (CCH) f 61.200 at 70.471 (N.D 111.1976). While Bnef of it is not clear from the Order that this separate 36. 16 Cf.R. ll 3.31-3 40 (1980).
counsel would represent the held separate enti-ty in the subsequent administrative htigation, it 37. These regulations apply to all "parues" in-n of the is equaDy unclear whether the acquired and volved in adjudicative proceedings. 16 CJ.R.
iuld vio- acquirmg companies were " potential competi- $ 3.31(a). Although the regulations do not ex.
of our tors" giving rise to the existence of confhets pheitly defme the term " party," it is clear that od** s auch as those present in this case. We note complaint counsel for the FTC is a " party"in Allsbury simply for the proposition that a hold an adjudicative proceedmg. See, e. g., 16 separate order in an appropriate case may im- C F.R. l 3.21(a).
i m e , -i_ . \ f 7 . - _ _. _ _ . . u . & .. ...m
.2 s
- _ _ . _ _ . _ _ _ -__---______.-__.__m_.m._m.-.mmm ___ _ _ . _ . _
}Mg 636 FEDERAL REPORTER,2d SERIFS
')
the record after an opportunity for an de[ose or testify and to produce specified Sio shall te made in writing to agency hearing,88 initiated by the filing of a documents in complaint by the Commission,8' and oon- the Admiristrative Law Judge "). See Co ducted before an administrative law also MC v. Gilson Products, Inc.,6@ F.2d en judge.** The administrative action here ini- 900,904 (5th Cir.1978), Iil tinted by the FTC against Exxon is of in this case, neither the District Court "I counc an adjudicatise proceedmg. nor the Federal Trade Commission have "
The rules gourning discovery in adjudi- advanced any reason why these established P' cative proceedings are comprehensive and procedures should not be followed by the N elaborate *' In general, the regulations PTC in interviewing personnel and muring '
provide that: documentary evidence of the Drives Parties may obtain dis.covery by one or Group.88 No public interest has been cited h' more of the following methods: De[osi* to support the broad liberalitation of the tions upon oral examination or written discovery rights of the MC contained in questions; written interrogaton,es; pro- the June 25 Order. Both the Octot+r 26 3 duction of documents or things for in- and the June ?4 Orders were designed to spection and other purposes; and re- protect the public interest in maintaining )
quests for admission the Drives Group as a separate, competi- 1 10 C.F.lt 6 3.31(a). Unlike the Federal tively viable entity during the course of the Rules of Civil procedure, which provide for FTC administrative litigation. That inter-judicial intervention only when a party re* est s not in any way furthered by affording sista discovery, the regulations provide that the Federal Trade Commission access to a party seeking discovery must obtain the information and personnel of the Drives approval of the administrative law judge Group outside of the administrative dis-for every deposition requested and subpoe* covery process.
na issued See id. 6 3.31(b)(1)("The Admin- In addition, the equal access provision of istrative Law Judge may authorize dis- the June 25 Order divesta the administra-cour3 upon a satisfactory showing that the tive law judge of much of the authority requested discovery may reasonably be ex, delegated to him by the regulations cited pected to vield information relevant to the above. Absent some compelling justifica-allegation $ of the complaint, to the pro.
tion, we refuse to upset the careful scheme posed relief, or to the defenses of any re-established by the Commission to govern ita _
spondent"); 6 333(a) ("Any party may re-quest the Administrative Law Judge to or- own proceedings. We hold, therefore, that der the taking of a deposition or depositions the PTC is not entitled to equal acecas" to of a named penon or of a person or persons Drives Group information and personnel.
described with reasonable particularity"); fiather, the FTC must follow its own estat*
% 3St(b) (" Application for issuance of a lished rules governing discovery in adjudi-subpoena requiring a person to ap; mar and cative proceedings.
the TTC stand in very different positions with
- 34. 16 C I' R- 6 3 2. respect to the Dnves Group. Although held
- 39. 16 CJ.R. 6 3 ll(s) separate from Exxon, the Drives Group is fully ,
owned by that corporation. The only reason
- 40. 16 Cf.R. 6 3 42(at why Exxon would be forced to resort to the
- 41. For an early entical evaluation of these pro- administrative discovsry process to secure an.
cedures. see bennett, Post Complamt Dis. formation from the Drives Group would be that such a condition was necessary to effectuate covery in Admmistrative Proceedmgs- The ITC as a Case Study,1975 Duke L.J. 329. the hold separate order imposed by the court Unhke the other proteettve measures dtwussed
- 42. The ITC has not challenged here the fact in this appeal, the Distnet Court did not con.
that the June 25 Order grants Exxon access to ciude that such a severe restriction was neces.
the Dnves Group outside of the administrative sary irt this case-discovery process While we therefore need not address that issue, we note that Exxon and
F, T, C. v. EXXON C05tP. 1349 ca.a.us m nu ons, This ruling is cuisistem with other deci. ant to the Federal Itules of Civil Fruce-rified dure rather than as part of a motion for a ng to sions of the courts and the Commiuion in -
in re Exxon Corp., h5 T.T.C. 404 0975), the lloid Separate Order.
See Commission denied a request of the PTC 1d, at 205.
P.2d complaint munsel to substitute the more We agree that the FTC's requests for e liberal discovery rules of the Federal Rules information in this cue should be governed hrt of Civil Prxedure for the Comminion's dis- by applicable rules of discovery and not have e very rules in a complex admimstrative intermingled as part of a hold separate inhed proceeding, in denying this request for order. No reason hu leen given why es.
e the s;wial prueedures and maintaining the es- tablished discovery procedures should not uring tablished discovery regulations, the Com' be followed. Accordingly, we remand this
, rives m ss n stated that "as a general principle action to the District Court for modification cited the Commission does not favor tailor;ng of this aspect of the June 25 Order, -
f the s;wial rules f r individual cases." Id. at
.d in M in M e. W>s n Pmfucts. Inc., 509 IV. EXCLUSION OF IN-110USE r 26 yg F.31900 (5th Cir.1978), the Fifth Cireuit e ns derai a challenge to a District Court COUNSEL (3) One final issue remains for our mn.
ining order enforcing an PTC subpoena. Appel- sideration. Exxon contends that the Dis-lant argued that enforcement was improper trict Court " abused its discretion" in ex-fg becauw ihe FTC had violated its own di$- cluding Exxon's in-house litigation counsel nter covery rules. Although it was held that the from access to confidential competitively gE PTC had not deviated from its own procc- sensitive information of the Drives Group.'8 dures, the court noted: The June 25 Order granted such access only j This Coun, of couise, will not aid in to "outside counsel" for Exxon.** On the enforcing a subpoena if the Comminion baas of the facts of this cue, we do not did not adhere to its rules governing the beheve that this exclusion of in house coun-
'm of use of such disco $ery tools. When the sel for Exxon constituted an abuse of dis-istra- PTC publishes rules, the FTC is tound by cretion by the District Court.
- rity the m. As developed fully in part 11 of this opin.
cited Id. at 904 ion, supra, it is essentis.1 in this case that a
'b*** We also note United States v. United complete separation be maintainM between heme Technologies Cor;>.,466 T.Supp,196 (N.D.N.
Exxon and the Drives Group. For justifia-rn ha Y.1979), a cue in many ways similar to the ble renon, the District Court wu concerned preent. In United Technologies the that Exxon might let the Drives Group
k,*hat Government sought a comprehensive hold " wither on the vine"'8 To protect the onet separate order during the course of litiga. public interest in maintaining effective re-
- t" tion in District Court challenging the legali- lief for a potential violatiori of the antitrust tjudi- ty of a rnently consummated acquisition. laws, the court fashioned a series of protec.
As part of its proposed hold separate ortier, tive meuures designed to preserve the com-the Government requested that the defend- petitive viability of the Drives Group. We
. with i held ant corporation provide the Government have already concluded that it was proper
' fuD with ongoing discovery in certain areas, for the District Court to include within The District Court granted the motion for a those measures a provision prohibiting toth re in. hold separate order, but denied the request in-house and retained counsel for Exxon e that for ongoing discovery as part of that order, from maintaining an attorney client rela-tionship with the Drives Group.
tuate As stated by the ecurt:
court, (T}he Court believes that a request for it cannot be disputed that the most crit.
ussed such information should be made pur5u- ical of all protective measures is that which t con.
- 43. Bnef of Appellant, p. xL 45. A.1393. see note 30. supra
- 44. A.1567. See also note 19. supra.
MBRM 135()
636 FEDEllAL ltEP0ltTElt,2d SEltlES Long the corporation on day to-day matters, dern prevents the disclosure of competitively wholly apart from this litigation.
unsitive information of the Drives Group prom to other gwruonnel of Exxon. Should such Id. at 3 (A. 998) Similarly, Judge Snyder will '
information be daelosed, all other protec- stated in in re Westinghouse Electrie Corp effor tive measures would be virtually rneaning- Urplum Contracts Litigation,76 F.R.D. 47, thet len. If Exxon is able to secure competi- 57 n.6 (W.D.Pa.1977),"[t}here is much to be shou tively sensitive information of the Drives said for the srgument that in house counsel, conf Group, cither intentionally or inadvertently, part of the ongoing business activity of a Grot the ability of the Drives Group to compete corporation, are never consulted in a nor- beli<
effectively with Exxon in the event of di- business atmosphere " See alw Chas In- side vestiture would be seriously impaired. ternational, Ltd. v. Fashion Associates, Inc.,
wit)
Exxon does not dispute that if the hold 425 F.Supp 234,237 (S.D.N.Y.), aff'd mem., Dris 573 F.2d 1288 (2d Cir.1977); FTC v. United separate order is to have any effect, Drives States Pipe and Foundry Co int F,Supp. ty.
Group information must remain confiden. ION,1261 (D.D.C.1969) (in-house counsel 25 (
tial. In requesting greater accen to neces. not included among those with acecas to sary information, Exxon's proposed order protected information).
included appropriate restrictions prohibiting This concern over the very close relation-dMosure of the acquired information to others." Exxon simply contends here that ship between in house and other personnel thor.e "others" need not include all in-house of the corporation is wellillustrated in this case. Exxon requested access for only two litigation counsel for Exxon.
members of the Exxon legal department:
It has been noted that in house counsel Itichard Kerency and Donald Farley." As stand in a unique rdationship to the corpo noted by the FTC, at the time Exxon made ration in which they are employed. A). this request, Mr. Keresey sat on the teard though in-house counsel serve as legal advo. of directors of Exxon Enterprises, Inc.,
cates and advisors for their client, their which then held Exxon's ACS o;wrations."
continuing employment often intimately in. The relationship of Mr. Farley to Exxon's volves them in the management and opera, drives operation has been disputed by the tion of the corporation of which they are a parties." In any event, the District Court part. In SCM v. Xerox Cory, Civil No. was faced with a possibility that both men 15,807 (D, Conn. May 25,1977) (PrwTrial had been closely involved with mattm con.
Ituling No. 44)(A. 996-1000), aff'd sub nom, cerning Exxon's entrance as a competitor in In re Xerox Corp,573 F.2d 1300 (2d Cir, the drives market, and could continue to be 1977), then District Judge Newman denied 50 involved in the future.
in house counsel access to the confid ntial On the f acts of this case, we are unable to information of a competitor. In so ruling, find any abuse of discretion in the District the court stated:
The Court does not in any way doubt the Court's refusal to allow these two members faithfulnen of house counselin endeavor- of Exxon's in house legal department access ing to abide by the terms of any protee- to competitively sensitive Drives Group p in-tive order. The issue concerns not good formation. As argued by the FTC, it is faith but risk of inadsertent disclosure. very difficult for the human mind to com- ;
llouse counsel are employed full-time to partmentaliu and selectively suppreu in-advance the interests of their employer, formation once learned, no matter how They regularly meet with personnel of well-intentioned the effort n.ay be to do so.
dnves market pnor to the acquisttJon of Re-
- 46. A. 618-20 hence. Bnef of Appellee,p. 58 n.l; sef sfso A 1483 For the first time in its reply bnef Exx-
- 47. A 1449 on asserts that Mr. Farley had no such role.
- 48. Bnef of Appellee. p $8 n 1; A 1483 Reply Bnef of Aopeliant, p B n.3
- 49. The f'TC contends that Mr. Farley had a role in planrung Exxon's independent entry mio the 1 ,
F. T C. v. EXXON ConP. 1351 ca. su r.uisu osui l*ng after divestiture may have ten or- V. CONCLUSION atters, dend in this case, it is posible that these We remand this action to the District
- nyder prominent members of Exxon's legal staff Court with instructions to modify the June
. Corp.
will help manage and advise Exxon's ACS 25 Order in a manner consistent with part ,
.D. 47, effort. We find no abuse of discretion in !!! of this opinion. All other aspects of the ito be the decision of the District Court that they Order are affirmed.
>unsel, should do So without ever having access to g, og,g
,* of a confidential information of the Drives a non. Group, a possible major competitor, We
- sa In. believe that the limitation of access to out-
- s. Inc., side counsel for Exxon is fully consistent , { ,g ,,,,, , ,,,,, ,y mem., with the public interest in safeguarding the f - - -
Unitaf Drives Group as a competitively viable enti-
'.S upp. ty. We thus affirm this aspect of the June vunnel J Order.
ess to lation-wnnel in this ly two tment:
" As s
, Inc.,
Lions.'8 1xxon's by the
. Court th man _
- rs con.
titor in e to le table to District embers t acceu oup in-0, it in
- o com.
l *esa in*
a how o do so.
1 of Re-e the A.
nef. Exx-2ch role.
.h
[ti
+
.t 1692 los strnEME count nEPourEn 4ss tw t'*
es t's lu the scope of the relitigation exception t Had the District Court made such a fu 5"C' DI the Anti-Injunction Act. Accordingly, in-sofar as the District Court enjoined the ing here when it dismissed tauo ' 'I' "'E#I i
case-holding that federal marit ,e la Pands f manjuana .
state courts from considering pegoner,s m ge and possessmg r claim under the substantive law of Texas' quired that this case be heard in se.t apare-then I tievem that the r,u to datribute, and dei the mjunction was permissible.
igstion exception found in 28 U.S C. i t.N C"'I 'I ^# o Because the injunction actually entered would permit the injunction that the D. ID9'"Ib#*
by the District Court, id., at !!S-119, was the Supreme Court, trict Court later issued. Contra, liA!,
broader than the limited injunction we find Halliburton Co.,822 F.2d 1477,lasco acceptable, we must reverse the judgment 198Sh cert. pending sub nom. Crvrh USL # snowed sMf, approving a broad injunction and remand Nantime Corp. r. 2 pfel, No g;.11:; **i"f' fl ets for entry of a more narrowly tailored or- This is true whether or not a findu c, OI ',s"refy, -
datnet court der. Of course, the fact that an tajunction such pre-emption would have been eerw. to substitute h'ta co may issue under the Anti-Injunction Act petitioner's remedy for an erroneous & (mdant wa8 does not mean that it must issue. On emption decision would have been ar s;. og wolate de enda remand the District Court should decide peal of the District Court's dismissst srs nghts.
whether it is appropriate to enter an injune. not relitigation of the issue in state roe. Affirmed.
Lion. However, the District Court's terse dna -
Justice Marsha' Accordingly, the judgment of the Court sal order in this case lacks any erpreu inn in which Justic' of Appeals is reversed, and the case is ruhng on uniformity or pre-empbon f*
Justice Stevens remanded for further proceedmgs consist. App. 34-35. Absent such a hold:rg th in which Justice B' ,
ent with this opinion- District Court had no " judgment" on O#
It is so ordered. 9""U "
- hich it needed to " protect o, effectuate , by enjoining the subsequer-Justice WHITE, concurring. state court litigation. Cf. 25 U.S C i 2.N 1 Criminal Law <
1 agree with the Court that, as a general Consequently, I agree with the Coe. Sixth Amendm
- g. .g matter, "[f}ederal forum non conteniens that the relitigation excepuon to l 2.N principles simply cannot determine whether cannot be invoked here, ante, at if 91. st :
[ state] courts, which operate under a broad the judgment of the Court of Appesh s. {'t* dWbg
'open courts' mandate, [will] consider them. firming the District Court's injuncuen mW selves an appropriate forum" for a federal be reversed m pertinent part.
litigant's lawsuit. A nte, at 1690. Conse- gg quently, in diversity cases-for example--a dechnes to repres district court s dismissal on forum non , } ..,,.,, ,,, mn .y dsnt insist on cou conteniens grounds cannot serve as a ba- vious or ongo:
sis for a later injunction if the plaintiff sing party, eve:
subsequently brings the same action in a 486 UA 153,100 led.2d 140 genrnment. g+c stati court. g.3 Mark Erick WilEAT, Petitioner But, as the Court recognises, this case v, 2. Criminal 1A*
involves the special area of federal mari- nue distn time law. Antr, at 1691. In this field, the UNITED STATES.
actual conflict of federal interest in uniformity is so substan- N" 87 of codefendanta, tial that a determination that federal law Argued March 2,1988. s aiver of confl>
requires that a case be heard in a foreign dants be separat Decided May 23, 1955.
forum could possibly pre-empt any contra. Const. Amend. 6 ry determination by a state court applying Rehearing Dem.ed June 30,1958 State forum non conteniens law. The See 487 U.S.1243.108 S.Ct. 2915
- gly *g Court acknowledges that our precedents ponu of Decisk may ultimately support such it conclusion in this case. A nte, at 1691. Defendant was convicted in the l'er.ed g,ates District Court for the Soud,ern Da i
f i- - -A *- --'t
a WilEAT v. U.s. 1693
,a c.s. 53 m, u nos a.ca. im umai tnet of California, J. Lawrence Irving, J., 3. Criminal law e641.5(7) a fig of conspiracy to possess in excess of 1,000 District court han substantiaUntitwle
- ,n,,,,
wy pounds of marijuana with intent to distrib- in refusing waiverGf conflicts of interests ste and possessing marijuana with intent not only_Tn' cases where actua5EfliKrisiiy.l stng.
reht. ,/ to distribute, and defendant appealed. The ,be demcastrated before trial. but la_Inore
/ Court of Appeals, Ninth Circuit, 813 F.2d ~ common cases where potential conflict.ex.
g gg3 1399, affirmed. On petition for certiorari, is'tashich may burgeon into actual conflict the Supreme Court, Chief Justice Rehn _as trial progresses. U.S.CLConst. -
,e Da.
pfd , (x quist, held that: (1) district court must be Amend. 6. C I
1(CA9 w;,y snowed substantial latitude 4. inCriminal refusing lsaivers of conflicts of interests, and (2){
_j jn f Law #641.5(2. 7), 641,12(1)
' N datrict couni's refusal to permit defendant District court's refual to permit de-ing of -
orrect. to substitute his counsel for that of code.
is pre.
~)fendant was within its discretion and did / fendant to substitute his counsel with coun-set an s , not violate defendant's Sixth Amendment' t within its discretion and did not violate nghts. defendant's Sixth Amendment rights, de-al and court. Affirmed. spite willingness by defendant and code-iistnis-fendants to waive conflict; if plea agree-xprest ion Justice n which JusticeMarshall Brennan jomed. filed dissenting opin h ment with codefendant was rejected, de Justice Stevens filed dissenting opinion' dant's probable testimony at resulting trial g[ ,
in which Justice Blackmun joined- of codefendant would create ethical dilem-
,' ma for counsel from which one or both of his clients would suffer. U.S.C.A. Const.
Amend. 6.
' M3 1. Criminal law #641.10(1)
Sixth Amendment right to choose one's Couri 6na own counsel is circumscribed in several im-portant respects; advocate who is not Syllabus '
0,and member of bar may not represent clients Petitioner, along with numerous code-als af.
other then himself in court, defendant may fendants including Gomet-Barajas and a must not insist on representation by attorney he Bravo, was charged with participating in a -
cannot afford or who for other reasons far. flung drug distribution conspiracy. At ~
dechnes to represent him, nor may defen- the time of petitioner's trial, the District dsnt insist on counsel of attorney who has Court was considering Gomez-Barajas' of-previous or ongoing relationship with op- fer to plead guilty to certain charges stem-posing party, even when opposing party is ming from the conspiracy, and had already government. U.S.C.A. Const. Amend. 6. accepted Bravo's guilty plea to one count.
Both Gomez-Barajas and Bravo were rep-
,ner resented by attorney Iredale. Two coart
- 2. Criminal Law e641.5(2. 7) days before his trial was to commence.
Where district court justifiably finds petitioner moved for the substitution of 2 'ual conflict of interest in representation Iredale as his counsel as well. Despite of codefendants, it may decline proffer of petitioner's masertion of his Sixth Amend-s'siver of conflict and insist that defen' ment right to the counsel of his choice, and dants be separately represented. U.S.C.A. his willingness, as well as that of Gomez-g Const. Amend. 6. Barajas and Bravo, to waive the right to reader. See Whed Srain v. Detroir hmber Co.,
'18. Mhe syttsbus connututes no part of the opinion 200 til 321, 337, 26 S.Ct. 282. 287. 50 LLi.
of the Court but has been prepared by the Re.
poner of Decisions for the convenience of the 499.
e
=
e 1694 108 SUPREME COURT REPORTER tse t'A tu 88 #
conflict. free counsel, the court denied the sutatitution motion on the basis of irrecon- likely to engender conflicts ofM iDterut attorney b Eugt cilable and unwaiveable conniets of inter- Iredale if he was permitted to npru 8#~ " as was tried II drug charges a est for Iredale created by the likelihood 1696-1700, both petitioner and his codefendan'.s ("it**d kst(e-. petitIOD 1 that petitioner would be called to testify at tbost Sg" any subsequent trial of Gomez-Barajas, 813 F.2d 1899, affirmed. other charges, h and that Bravo would testify at petitioner's l REHNQUIST, CJ., delivered the Bars)as offered to P ead I trial. Petitioner therefore proceeded to tri- an andillega importatio' al with his original counsel and was con. opinion of the Court, in which W}i!TE. At the commee d
victed.
The Court of Appeals affirmed. O'CONNOR, JJ., joined. SCALIA, and KENNEDY, the pistrict Co h,f i MARSHALL, J., filed a pies; Gomez.Bara)
Held: The District Court did not err in dissenting opinion, in which BRENNAN J draw his guilty P declining petit,oner's waiver of his right to joined, post, p.1700. STEVENS, J.,IN conflict free counsel and m refusing to per- dissenting opinion, in which BLACKMUS' I'*"' 'vidently a les mit his proposed substitubon of attorneys.J., jo ned, post, p.1704. N#*# ' decided to fm in multiple-representation cases, district guilty to one count of tra courts have a duty to take such measures ~
mately 2J00 panda d n as are appropriate to protect criminal de- Angeles to a nsidece fendants against counsel's conflicts of in- %dal. At the conclus t terest, including the issuance of separate b,oner. John J. Cleary, San Diego, Cal., for pete plea proceedings o representation orders. Moreover, they of- dsle notified th p ten must do so at the pretrial stage, where Michael K. Kellogg, Washington, DC' ben c@
relationships between parties are unclear, for respondent. asked 2 Ft tio er*
and the likelihood and dimensions of nas- response, e Governmi cent conflicts of interest are hard to pre.
diet.
The provision of waivers by all af- opiniaChief of Justice the Court. REHNQUIST delivered thestantial concern a conflict ir, the represent fected parties will not necessarily cure any taining some initial discs problems, since the courts have an indepen- The issue in this case is whether the tution of counsel, the dent interest in assuring compliance with District Court erred in declining pet 2 tion.
structed the P8ftI' ethical standards and the appearance of er's waiver of his right to conDict fra tailed argumsta e fairness, and since several Courts of Ap-counsel and by refusing to permit petition- just one day befon 6 peals have demonstrated an apparent will- er's proposed substitution of attorneys.
petitioner's tdal. -
ingness to entertam meffective-assistance claims by defendants who have specifically At the Monday heari waived the right to conflict. free counsel. objected to Petitioner's Thus, the district courts must be allowed ticc e the Fa ha substantial latitude to evaluate in the light I tstin of Gomez@ ,
of their informed judgment the facts and Pet tioner Mark Wheat, along with nw {
circumstances of each case, meluding any merous codefendants, was charged with "#" pr attempt by the Government to "manufac- P"ticipating in a far flung drug distribu.
ture" a conflict to prevent a defendant tion conspiracy. Over a period of severs!
- '"."['
b3e cta. '$o First, ti
- N "e epted the from obtaining particularly able counsel. years, many thousands of pounds of mari- *"*"E**ent negoti*l 3Although the courts must recognize the juana were transported from Mexico and E*#"I'* "nd the Go" Sixth Amendment presumpuon in favor of other locations to southern California. Pe- n ement
- counsel of choice, that presumpton may be titioner acted primarily as an intermediary ** n ez-Baraja overcome not only by a demonstration of in the distribution dng; he received and draw the ples a actual conflict but also by a showing of a stored large shipments of marijuans at his * "id then be faced serious potential for conflict. Here, where home, then distributed the marijuana to MPresentation by lre(
the substitution motion was made so close customers in the region. ** uld have acte <
to trial, it cannot be said that the District DeY-etitioner, thn Court abused its discretion, since it was glso charged in the conspirsey were g d aduti inthg presented with complex litigation that was Juvenal Gomez-Barajas and Javier Brsvo, ar w, g,ee$j who were represented in their criminal pro- Barajas' ineome, and I
/
1695 WHEAT v. U.S.
. 3 m t'A m esta es lW a.ct. lHz (1985) called as a witness for the Government :.t dings by attorney Eugene d wasIredale.
ac-any Go-subsequent trial of Gomez-Barajas.
erat fo, pez-Barajas was tried first an This scenario would pose a conflict of inter-eprea,nt pitted on drug charges overlapping d with est for Iredale, who would be prevented nts, pp~ t,ose s against petitioner. To avoid a secon from cross examining petitioner and there-trial on other charges, however, Gomer- by from effectively representing Gomez-Barsjas offered to plead guilty to tax eva- Barajas.
the sien and illegalimportation of merchandise. .
Second, and of more immediate concern,
,HITE. At the commencement of petitioner's trial, Iredale's representation of Bravo would di-the District Court had not accepted the TEDY. rectly affect his ability to act as counsel for da pica; Gomez Barajas was thus free to with.
N AN,1. draw his guilty plea and proceed toPetitioner, trial. The Government believed that a portion of the marijuana delivered by J., filed a Bravo, evidently a lesser player in the Bravo to Vidal's residence OKMUN, In this eventually regard, was conspiracy, decided to forgo trial and plead transferred to petitioner. and pilty to one count of transporting approxi- the Government contacted Iredale mately 2,400 pounds of marijuana from askedlos that Bravo be made available as a Angeles to a residence controlled by Victor witness to testify against petitioner, and Vidal. At the conclusion of Bravo's guilty 22,1985, Ire-agreed in exchange to modify its position at the time of Bravo's sentencing. In the
' # P'E ples proceedings on Augustdale notified the District Court that he had likely eve been contacted by petitioner and had been fy, Iredale's position in representing both t on, D C., asked to try petitioner's case as well. men In would become unte .able, for ethical response, the Government registered sub-s:antial concern about the possibility proscriptions of would forbid him to cross-examine vered th, conflict in the representation. After enter- failing to do so, he would also fail to pro-taining some initial discussion of the substi- vide petitioner with effective assis,ance of
- ' tution of counsel, the District Court in- counsel. Thus, because of Iredale's prior I"E
- structed the parties to present more de-Monday, representation of Gomez-Barajas and Bra-I'" tailed arguments the followint vo and the potential for serious conflict of P"'*E
- just one day before the scheduled start interest, of the Government urged the District
'P petitioner's trial. Court to reject the substitution of attor-M
neys.
At the Monday hearing, the Government i
ebjected to petitioner's proposed substitu- In response, petitioner emphasized his tion on the ground that Iredale's represen- right to have counsel of his own choosing ~
tation of Gomez-Barajas and Bravo created and the willingness of Gomez-Barajas, Bra-a serious conflict of interest. The Govern- vo, and petitioner to waive the right to with nu- ment's position was premised on two possi- conflict free counsel. Petitioner argued ged 5th ;
ble conflieta. First, the District Court had that the circumstances posited by the ,
distnbu- not yet accepted the plea and sentencing
)f several Government that would create a conflict arrangement negotiated between Gomez-for Iredale were highly speculative and 4 i of mark Barajas and the Government; in the event bore no connection to the true relationship exico and that arrangement were rejected by the between the exonspirators. If called to i rnia. Pe- court, Gomez-Baraj-= would be He free to testify, Bravo would simply any that he did .
armediary withdraw the plea and stand trial. not know petitioner and had no dealings eived and would then be faced with the prospect of with him; no attempt by Iredale to impeach ma at his representation by Iredale, who in the mean- Bravo would be necessary. Further,in the guana to time would have acted as petitioner's attor- unlikely event that Gomez-Barajas went to ney. Petitioner, through his participation trial on the charges of tax evasion and in the drug distribution scheme, was famil- illegal importation, petitioner's lack of in-
'*#7 ",
Bravo iar with the sourcespand size of Gomez- volvementyin those alleged crimes made ni E Barajas' income, and was thus likely to be
~
I.y
. . ;.d 1696 108 SUPREME COURT REPORTER 434111 m ass U.S.160 his appearance as a witness highly improb.
able. Fmally, and most importantly, all limits prescribed by the Sixth Amenh,entthis right was three defendants agreed to allow Iredale to the District Court has coraiderable decr,- in the advers:
represent petitioner and to waive any fu- tion in allowing substitution of couwl jeg that an un ture claims of conflict of interest. In peti- The Court of Appeals found that the Ig nillin argumi tioner s view, the Government was manu- trict Court had correctly balanced tn intricate proce facturing impiausible conflicts in an at- Sixth Amendment rights: (1) the quahfW boms, 281 UJ tempt to disquahfy Iredale, who had al- right to be represented by counsel of on,, led.158 093.
ready proved extremely effective in repre- choice, and (2) the right to a defense eos U.S. 300, 307, sentmg Gomer-Barajas and Bravo. ducted by an attorney who is free of co> led.2d 63 0 flicts of nterest. Denial of either of thew Stxth Amendn After hearing argument from each side, rights threatentd the District Court wrl assistance the District Court noted that it was unfor, an appeal assigning the ruli g u rmraMe tunate that petitioner had not suggested error, and the Court of Appeals concluded D'C'"S"'I' Gideon t'.
g,' ~
the substitution sooner, rather than two that the District Court did not abuse na S.Ct. 792, 9 L court days before the commencement of dgi retions in declining to allow the sutst, further neogr trial. The court then ruled: riding assista tution or addition of Iredale as trial couw!
"[Blased upon the representation of for petitioner.t ensun that c the Government in (its] memorandum Because the Courts of Appeals have es-fair trial," Stt U.S. 668, 681 that the Court really has no choice at this pressed substantial disagreement stat point other than to find that an irrecon- when a district court may override a defe> led.2d 674 C cilable conflict of interest exista. I don't dant's waiver of his attorney's conflict of Sixth Amendo think it can be waived, and accordingly, interest,8 we granted certiorari, 454 US inquiry focust Mr. Wheat's request to substitute Mr. not on the at 814,108 S.Ct. 66, 98 led.2d 30 (19D Iredale in as attorney of record is de- lawyer as suel nied " App. 100-101. 466 U.S. 648, 2046 n. 21. Bt i
Petitioner proceeded to trial with his origi- shile the righ nal counsel and was convicted of conspir- by one a preh acy to possess more than 1,000 pounds of gg marijuana with intent to distribute,in viola-ed by h Su tion of 21 U.S.C. ( 846, and five counts of The Sixth Amendment to the Constm possessing marijuana with intent to distrib- tion guarantees that "[i)n all criminal er" ute, in violation of 6 841(a)(1). eeutions, the accused shall enjoy the nght '[d he th --
to have the Assistance of Counsel for 'll rabl' The Court of Appeals for the Ninth Cir-his defence." In United States r Nom ~ er who hei cuit affirmed petitioner's convictions, 813 son, 449 U.S. 361, 364,101 S.Ct. 665,6C" 461 U.S.1 F.2d 1899 (1987), finding that, within the 66 L.Ed.2d 564 0981), we observed that 1618,15 L.E
- l. The Court of Appeals also found that petition. Barne4 463 '
Doe. 781 F.2d 238,250-251 (CA2) cert derd er was not prejudiced by a conference the Dis- led.2d 981 (
trict Court held with counsel in petitioner's ab- sub nom. Roe v. United Sintes. 475 t'S 1108 sence, and that petitioner had no right to insist 10e S.Ct.1515,89 led.2d 914 (1986)("lC)=ru (1) The S upon a les bargain from the Government. Our have the power and duty to disqualdy emrud where the public interest in maintaining the choose one's t grant o certiorari, however, was litrJted to the issue addressed in the text of this opinion, and iro egrity of the judicial system ourwoghs tk in seve:al imi we do not reach the other rulings made by the .ds constitutional right"); Unitsd swe, . ?g 8 pemas Court of Appeals. 499 F.2d 803. 805 (CA61983) (a tr.a ts not a meml sould override a defendant's knowu4
- 2. See, e.g.. In rr Parodyw Corp., 803 F.2d 604 .* only in "compellins circums anceG Sent clients ((
611. n.16 (Call 1986) (the right of counsel u.med States v.174nagan. 679 F.2d 1072,10*f Similatly, a ('
"does not oserride the broader societalinterests (CA31982). (a trial court may refuse a wad g in the effective administration of justice ... or when an actual conflict is "very hiel>*). re d in the maintenance of 'public confidence in the on other grour.ds. 465 (JA 259.104 SCL 104 3. Our bolding integrity of our legal symem'") (citation omit. 806. 95 S.Ct. 2 ted); in re Grand Jury Subpoena Sernd Upon 79 led.2d 288 (1954).
criminal defe right to repres
WilEAT r, U.S. 1697 s o.a. m ens U.S. 18' ca. su a.cs. i m tiensi adret, this right was designed to assure fairness afford or who for other reasons declines to in the adversary criminal procees. Realiz- represent the defendant. Nor may a de-
)le discre-ing that an unaided layman may have little fendant insist on the counsel of an attorney
' counsel skillin arguing the law or in coping with an who has a previous or ongoing relationship 1theD$ intricate procedural system, Powell r. Ala- with an opposing party, even when the need too 6ama, 287 U.S. 45, 69, 53 S.Ct. 55, 64, 77 opposing party is the Government. The quahfied LFd.158 (1932); United States v. Ash,413 question raised in this case is the extent to 1 of one s (lS. 300, 807, 93 S.Ct 2568, 2572-73, 87 which a criminal defendant's right under ense con.
led 2d 619 (1973), we have held that the the Sixth Amendment to his chosen attor-
.e of con.
Sath Amendment secures the right to the ney is qualified by the fact that the attor-r of these ,
assistance of counsel, by appointment if ney has represented other defendants aurt crith r,ecessary,in a trial for any serious crime, charged in the same criminal conspiracy.
reversible In previous cases, we have recognized 6tdron r. WainwrightdP372 U.S. 335,83
- oncluded ebuse it, S.Ct. 792,9 led.2d 799 (1963). We have that multiple representation of criminal de-further recognized that the purpose of pro- fendants engenders special dangers of he subs 0 viding assistance of counsel "is simply to which a court must be aware. While "per-al counsel ensure that criminal defendants receive a mitting a single aj,orneyieo to represent fair trial," Strickland v. Washington, 466 codefendants ... is not per se violative of hm n. g,S. 668, 689,104 S.Ct. 2052, 2005, 80 constitutional guarantees of effective as-9t about led.2d 674 (1964), and that in evaluating sistanet of counsel," Holloucy v. Arkan-1 a defen. Sath Amendment claims, "the appropriate sas, 435 U.S. 475, 482, 98 S.Ct.1173,1178, - '
0".b# OI Imquiry focuseLon.the Adversarial process, SS led.2d 426 (1978), a court confronted 3 not ortthe accused'a_relationshipyith his with and alerted to possible conflicts of d 1 swyer as such." United States v. Cronie, interest must take adequate steps to ascer-466 U.S. 648, 657, n. 21,104 S.Ct. 2039, tain whether the conflicts warrant separate 546 n. 21, 60 led.2d 657 (1984). Thus, counsel. See also Cuyter v. Sullivan,446 bhile the rightto sslect and be npresented U.S. 335,100 S.Ct.1708, 64 led.2d 333
! by one's preferred attarneyJs comprehand- (19a;0). As we said in Hollorcy:
ed by the Sixth Amen,dment,d the essential " Joint representation of conflicting in-sim of the Amendment is to guarantee an terests is suspect because of what it Conotitu. tends to prevent the attorney from do-effective advocatNJsMrfmVal_defen-mlpros, ing. . . . [ A] conflict may . . prevent an the right dant rather than _to ensure that a defendant
' willinexorably be representedVUFe law- attorney from challenging the admission -
unsd for of evidence prejudicial to one client but i., yo,.n . t yer whorfOe pefersrSee MorrisTSlap-perhaps favorable to another, or from 665. 667. j py,461 U.S.1,13-14,103 S.Ct.1610,1617- arguing at the sentencing hearing the
- 1618, 75 led.2d 610 (1983); Jones r.
ved that relative involvement and culpability of d (< led.2d 987 (1983).Barnes, 463 U.S. 745,103 his clients in orderS.Ct. 3308, to minimize the 77culpa-
- h. [of lll The Sixth Amendment right to bility of one by emphasizing that of sn-( ic)ou"' other." 435 U.S., at 489-490,98 S.Ct. at choose one's own counsel is circums'c ribed .
"ld' in severalimportant respects. Regardless 1181-chhsthe of his persuasive powers, an advocate who Petitioner insists that the provision of 4 3saiu .
U (' in*1 is not a member of the bar may not repre- waiver- by all affected defendants cures c sent clients (other than himself) in court.8 any problems created by the multiple repre- l
[,y Similarly, a defendant may not insist on sentation. But no such flat rule can be j 1072. 1076 t a er representation by an attorney he cannot deduced from the Sixth Amendment prew ly"), reid to do so. does not encompass the rishi to choose 5 Ca.105). 3. Our holdins in farerra v. Cah/omia. 422 U.S. any advocate if the defendant wishes to be tre so6,95 S.Ct. 2525. 45 led.2d 562 (1975). that a enminal defendant has a Sixth Amendment resented by ec-maci.
risht to represent Ainsieffif he voluntarily elects
1698 108 SUPREME COURT REPORTER ma, , t,g,164 sumption in favor of counsel of choice.
Federal courta have an independent inter- led. 680 0942), that the trial courts,4 gqhen a trial cour est in ensuring that criminal trials are con- alerted by objection from one of the gr conflict of interest w ducted within the ethical standards of the ties, have an independent duty to easm ability of a M 0' profession and that legal proceedings ap- that criminal defendanta receive a tnal hcounsel to conform w,ti pear fair to all who observe them. Both is fair and does not contravene the Sx2 of Professional ResPot Amendment.
the American Bar Association's Model should not be nqd" Code of Professional Responsibility and its **' .'" 2 innsy.s'a p Sadequate Mpnsata Model Rules of Professional Conduct, as * # " " * * . 1 ant. Such represents E* I"5 0*
well as the rules of the California Bar legitimate wish of district courts that th"' stitutes a breach of I Association (which governed the atwrneys p nts nmain intact on appeat As o, and invites disrespect i
' in this case), impose limitations on multiple APP'8 s 8CC pointed m the court, but it is aho representation of clients. See ABA Model al e urts e nft nted with naultiple rep
- independent interest of Code of Professional Responsibility DRS- ",entat ns face the prospect of ber e free from future 105(C)O960); ABA Model Rules of Profes- whip 4 awed' by assertions of error n" .3,quacy of the walve:
sional Conduct, Rule 1.7 (1984); Rules of matter which way they rule. If a de.ne he proceedings in his Professional Conduct of the State Bar of e urt arms k h mWpk npensa subtle problems impi California, Rules 5 and 7, CalBus. & Prof. and the advocacy of counsel is theresfar dant's comprehension Code Ann. 6 6076 (West 1974). Not only impaired as a result, the defendant rr43 Unfort g ,gj the interest of a criminal defendant but the well claim that he Jid not receive effecun trict co g institutional interest in the rendition of just anistance. Sw, ep., Burpn n Aeng a or W 2 verdicts in criminal cases may be jeopar- S. U6,107 SA SW, M N W dized by unregulated multiple representa. (1937). On the other hand. a dare Wb the 515 adom criminal a of hindsight court's refusal to accede to the mulu;1, taken place, n th yFor this reason, the Federal Rules of representation may result in a chailert, context when relationsh Cnminal Procedure direct trial judges t such as petitioner's in this case. Nor dw are seen through a ghs investigate specially cases involving joint a waiver by the defendantynecessar6 hhood and dimensions e representation. In pertinent part, Rule solve the problem, for we note. withcE. of interest are notoris 44(c) provides: paning judgment on, the apparent withr.r- ly"n for %se h
"[T]he court shall promptly inquire ness of Courts of Appeals to entertain inef. enminal trials. It is a with respect to such joint representation fective-assistance claims from defendar.9 and shall personally advise each defen' who have specifically waived the right jo sill be formnste noK truth from his own ca -
dant of his right to the effective assist- conflict free counsel. See, e.g., Unked fully apprised befon D anee of counsel, including separate repre' States e.r rel Tonaldi e Elrod. 716 T.2d the Government's witne sentation. Unless it appears that there 431, 436-437 (CA71983); United States r stand. A few bits of u is good cause to believe no conflict of porteras, 500 F.2d 1210,1211 (CA2L cers or a single pnviously interest is likely to arise, the court shall denied, 419 U.S.1069, 95 S.Ct. 656, 4: ticed doevment may a,l take such measurea as may be appropri' led.2d 665 (1974); see also Classer. er relationship between 1 ate te protect each defendant's right to pra, 815 U.S. at 70, 62 S.Ct., at 465 r% These imponderables counsel." preserve the protection of the Bill of for a lawyer e asst Altnough Rule 44(e) does not specify what R ghts for hard-pressed defendants we in difficult to convey by dulge every reasonable presumpton a crimtral defendant t.
particular measures may be taken by a district court, one option suggested by the against the waiver of fundamentalrigh. f 3 ties of legal eWea.
Notes of the Advisory Committee is an n 5 observe that the willir (2) Thus, where a court justifiably finds to obtain such waivers order by the court that the defendants be an actual conflict of interest, there can te bear an inverse reht separately represented in subsequent pro- no doubt that it may decline a proffer of which he conveys all ceedings in the case. 18 U.S.C. App., p. waiver, and insist that defendants be sete ,
nation w them.
650. This suggestion comporta with our rately represented. As the Court of AP .
instructions in Holloicay and in Glasser n peals for the Third Circuit stated in United 4. stevo was in tact c*
United States, 315 U.S. 60,62 S.Ct. 457,56 States n Dolan, 570 F.2d 1177,1154 (19% men trial. see Tr. 7
' 58 'h'id '* d***"
t h
i WHEAT v. Us. 1699 !
u614 m W rs.164 Che as los a.ca.1692 (itss) j I
wts, w hen [3] For these reasonsyeDink the dis-a[W) hen a trial court finds an actual of the par- conflict of interest which impairs the trict court musthtallowed substantial lati-to en5ure abihty of a criminal defendant's chmen tude in refusing waivers of conflicts of a trial that counsel to conform with the ABA Code interest not only in those rare EEs~where e the sixth of Professional Responsibility, the court an actual confliet marte demonstrtted be-should not be required to tolerate an fore trial, but in the more common cases inadequate representation of a defen- where a potential for Enflict existiIwhich sur st, p dant. Such representation not only con- may or may not burgeon into an actual from the sdtutes a breach of professional ethics conflict as the trtal_p,rogresks- Tn7e
+ that ther and invites disrespect for the integrity of c cumstances of this case, with N motion al. As the
>inted og the court, but it is also detrimental to the for substitutionsts9unsel'IEik ,'. close to '-
Sple rept,.
independent interest of the trial jadge to the tirr- of trial,_the District Court relied be free from future attacks oser the on instinct and judgment based on experi-of beirr adequacy of the waiver or the fairness of enee innsin} ite_.decish We do'not error no ,
the proceedmgs it 9 own court and the think it can be said that the court exceeded '
- a datnet subtle problems implicating the defen- the broad latitude which must be accorded esentaum it in making this decision. Petitioner of f thereabr dant's comprehension of the waiver."
l
, dant ma.i l'nfortunately for all concerned, a dis- course rightly points out that the Govern-inct court must pass on the issue whether ment may seek to " manufacture' a conflict i e effectne #
Wrv. 4k3 or not to allow a waiver of a conflict of in order to prevent a defendant from hav- !
' 03- interest by a criminal defendant not with ing a particularly able defense counsel at l net the wisdom of hindsight after the trial has his side; but trial courts are undoubtedly I aware of this possibility, and must take it
~ldple jkencovert place, but in the murkier pre-trial chs!!erre when relationships between parties into consideration along with all of the i Nor d*s are seen through a glass, darkly. The like. other factors which inform this sort of a ecessanh 11ood and dimensions of nascent conflieta decision. *
, withat of interest are notoriously hard to predict, (4) Here the District Court was con-it wi!hr r- vven for those thoroughly familiar with fmnted not simply with an attorney who riain inef- Tnminal trials. It is a rare attorney who wished to represent two coequal defen-efendants will be fortunate enough to learn the entire dant., in a straightforward criminal pmse- }
right ta trath from his own client, much less be cution; rather, Iredale proposed to defend Umfed fully apprised before trial of what each of three conspirators of varying stature in 716 F.2d the Government's witnesses will say on the '
a complex drug distribution scheme _. -
Stain r stand A few bits of unforeseen testimony hu The Government intended to call Bravo as Ah c"t or a single previously unknown or unno- a witness for the prosecution at petitioner's 656, 42 ticed document may significantly shift the trial.' The Government might weadily have 288 " . ' O relationship between multiple defendants. tied certain deliveries of marijuana by Bra-465 No These imponderables are difficult enough vo to petitioner, necessitating vigorous Bill of for a lawyer to 'asksGn~d'Hin more er ss-examination of Bravo by petitioner's
- e in' difficult to convey hyvsy of explanation to e umi. Iredale, because of his prior rep-
"*PU " a criminal defendantAntufAred in the nice- resentadon of Bravo, would have been un-rights") bes of legal ethics. Nor is it amiss to able ethically to provide that cross-exami ,
observe that the willingness of an attorney 1
- nadon.
to obtain such waivers fro ~m his'elienta may
- " bear an inverse relatiQrtto_the care with Iredale had also represented Gomez-Ba-
" which he conveys all the necessary infor- rajas, one of the alleged kingpins of the Insti n to themy ' distribution ring, and had succeeded in ob-t f
- 4. Bravo was in fact called as a witness at peti- of drugs that the prosecution hoped to link to ited tiener's trial. See Tr. 728 et sq Es testimony peutioner.
,m was ebened to demonstrate the transportation V..
- - - - - - ~ - - - - - - - - - - - - - - - - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ ___ _
1700 108 SUPREME COURT REPORTER 466 a n4 ed U3' I'*
taining a verdict of acquittal for him. Go-mes-Barajas had agreed with the Govern- ticulated these principles, however, tk D ment to plead guilty to other charges, but Court unaceountably grants broad de castF*!'lcou tral a tna n the Distnet Court had not yet accepted the tion to the trial court to decide w aced W N
- ee plea arrangement. If the agreement were presumption has been overcome.hether the msy in As a con m situs rejected, petitioner's probable testimony at sequence of this unwarranted deference to d'"I 'h cf count the resulting trial of Gomes-Barajas would a trial court's decision respecting a cons, i*\'"U' flict of ir create an ethical dilemma for Iredale from tutional right, the Court countenances 5 ous con t may inde which one or the other of ha clients would ruhng that is patently incorrect. Because i II e trial pro likely suffer. believe that the potential for a conflict of however, the 1 Viewing the situation as it did before interest in this case did not overcome m # s presumption tioner's right to choose his own cousel,I ng.: counsel of cho trial, we hold that the District Court's re-dissent. mons that a trial c. '~
fusal to permit the substitution of counsel defendant's chosen c m this case was withm its dacretion and This Court long has recognized, and to did not violate petiuoner: Sixth Amend' day reaffirms, that the Stxth Amendment of a ictential conk ment rights. Other district courts might p showing that W t da protect on for a criminal defen. dimens ons of the fe have reached differing or opposite conclu- dant's choice of counsel. More than 50stan sions with equal justification, but that does yean ag , we stated that "[ijt is hard) u n as not mean that one conclusion was "right" neensary to say that, the n,ght to couse: ,,
and the other " wrong", The District Court being conceded, a defendant should be af." ' for the kind must recognize a presumption in favor of forded a fatr opportunity to secure couuel nd rmine the fairne peutivrar'sTounsel of choice,Tuithat pre. of his own choice. in these respecta, I (
Powell r. Alabame-s'umption may be overe6irie not only by a 287 U.S. 45, 53, 53 S.Ct. 55, 58, 77 en ledUfen significal
/ demonstration ormutTanflRrbut by a 158 (1932). This Court has reiterated tha exprosed in the opi!
' showing of Tiiierious potentiaTfor conflict. pnneiple on frequent occasions. odt, at 169&-1699, Sae, et, ThrTraintiali~5f'the facts anMreum. Chandler r. Fretag, 348 U.S. 3,9,75 S Ct I do dis how stances of each case under this standard1. 4-5,99 led. 4 (1954); Glasser t. United must be left primarily to the informed sugge j'idgment of the trial court. States, 316 U.S. 60, 70, 62 S.Ct. 457, 4f,4- to a po ent 65, S6 L.Ed. 680 (1942h Our statements on ton of a defenda The judgment of the Court of Appeals is this score stem largely from an appreca utled to some kin accordingly tbn that a primary purpose of the Stxth on appeal. The Col Affirmed. Amendment a to grant a criminal defen- " broad latitude" ove:
~
dant effective control over the conduct of # defendi imJustice MARSHALL, with whom his defense. As this Court previously has '((f'#[t 1699; altl Stice BRENNAS joins, dissentmg. stated, the Sixth Amendment " grants to endorsing a standar This Court today concludes that the Dis. .
the accused personally the right to make th Court appears t trict Court did not commit reversible error his defense," becausey"it is he who suf- determining whether by denying the motion of petitioner Mark fers the consequences if the defense fa!!s? has occurred, see
% heat to add or substitute counsel of his foretta r. Cal (fornia, 422 U.S. 506, Sl!L a roach which the choice. bI noting the diffie In the course of discussing the 820, 95 S.Ct. 2525, 2533, 45 led.2d M2 District Court's ruhng, the Court sets forth (1975). An obvionsly critical aspect of
- t. In stanns #
several principles with which I agree. The Wg a &fe is ch ng a person to h Court acknowledges, as it must, that the serve as an assistant and representative "hN s'd a their right to e afbei Sixth Amendment's guarantee of assist- in addition, lodging th election of cousel anca of counsel comprehends the right to with the defendant gecerally will promote undisputed i
(,
selett one a own attorney. The Court also the fairness and integrity of criminal trals. ha eed to ****
states that, although this constitutional 1. It is true that a tria The right to counsel of choice, as the right is not absolute, it mandates a pre- Court notes, is not absolute. Wher a de m nr n8,{
m sumption in favor of accepting a criminal e,ents, which frequer defendant's choice of counsel. Having ar- fendant's selection of counsel. under the upect of the dectdc particular facts and circumstances of a wo , _ -
WilEAT v. U.S. 1701 4 m m W t .s. m ca. u ice a.cs.inesit**s) ,
likelihood and magnitude of a confhet, ae-ever, the me, gravely imperils the prospect of a f air cords neither with the nature of the trial ad dsere. tr,s!. a trial court may justifiably refuse to court's decision nor with the importance of geede to the choice. Thus, a trial court 2 ether this c.sy in certain situations reject a defen- the interest at stake, As a com The trial court,a decision as to whether ant's choice of counsel on the ground of a ference to pc,tential conflict of interest, because a seri. the einumstances of a dnn case cons 6 e a en l ous confhet may indeed destroy the integri. tute grounds for rejecting a defendant's nane
- As the Court chosen counsel-that is, as to whether ty of the trial process.
Beca sates, however, the trial court must recog. these circumstances present a substantial
.on0h nite a presumption in favor of a defen. potential for a serious conflict of interest-we dant's counsel of choice. This presumption is a mixed determination of law and fact.
couns ,
naans that a trial court may not reject a The decision is properly described in this defendant's chosen counsel on the ground i, and to of a potential conflict of interest absent a way because it requires and results from -
nendment showing that both the likelihood and the the application of a legal standard to the al defen-6mensions of the feared confuct t re sub- established facts of a case. See, c.p.,
than 50 santial.' Unsupported or dubious specula- Tou nsend v. Sain, 372 U.S. 293, 309, n. 6, .
con a to a conflict will not suffice. The 83 8.Ct. 745,755 n. 6,9 led.2d 770 (1963).
is hardh Government must show a substantial p+ Appellate courts traditionally do not defer o counsel tenual for the kind of conflict that would to such determinations. See, e.g., ibid.;
ald be af.
udermine the fairness of the trial process. Sumner t. Mafa, 455 U.S. 591,597, and n.
e counsel In these respects,I do not believe my posi- 10,102 S.Ct.1303,1807, and n.10, 71 l (labama. con ddfers significantly,if at all, from that led.2d 480 (1982h Fer this retaon, de 71 1..Ed bg egressed in the opinion of the Court. See Court in Cuptcy r. Sullivan, 446 U.S. 835, entr, at 1698-1699, 1700. 100 S.Ct.1708,64 led.2d 333 (1980), held fp, I do disagree, however, with the Court's that a trial court's determination as to
. 75 S.Ct.
- r. United suggestion that the trial court's decision as whether an attorney had represented con- i to whether a potential conflict justifie*
- flicting interesta at trial was not entitled to '
157, 4c4 ments on Jeetion of a defendant's chosen counsel is any deference. The determination at issue entitled to some kind of special deference here, which focuses on the potential for s -
apprecia. '
ori appeal. The Court grants trial courta conflict of intereat, is not different in any he Shth 4 toad latitude" over the decision to accept relevant respect.:
al defen. ,
mduct of or riectm a defendant's choice of counsel, yThe inappropriateness of deferring to -
iusly ha, ante, at 1699; although never explicitly this determination becomes even more t.i>
rants to endorsing a standard of appellate review, parent when its constitutional significance the Court appears to limit such review to is taken into account. Cf. Rose Corp. v.
to make determining whether an abuse of discretion who suf. has occurred, see ante, at 1699. This Consumers Union of United States, Inc.,
se fait 3y 466 U.S. 4S5,502-503,104 S.Ct.1949,1960-approach, which the Court supports solely M, 819 by noting the difficulty of evaluating the 1961, 80 led 2d 502 (1954) (stating that d.2d 562 for a las standard of review. The question on spect of 1. In stating this principle, I mean to address
- only cases in which all parties to the potential review is whether the trial coun was correct in
.erson to c nfhct have made a fully informed walver of alding that the facts and circumstances apnar.
entative. their nght to conflicofree representation. It is ent er the nme of lu ddrioet demonstr.ted a undisputed in this case that petit.oner, as well substantial potential for a serious conflict of 7 counsel Appellate courts are fully capable of u henal Gomes-Barajas and Javier Bravo. interest.
promote had agreed to waive this right. posing and resolving this question. A defer.
.al trials. ential standard of review therefore is not neces-
- 1. It is true that a trial court, in making a deter, sary to generate appellate decisions that take
'"3 g' mination regarding the potential for a confhet into account and appropriately reflect the un-er a de- of interest, must make a prediction as to future certainties existing at the time of the trial events, which frequently is a difficult task. This court's ruhng 9 der the aspect of the decision, however, does not call
. of a
170g Itc stPRIME CotTRT REPORTER asstg m
'tw] hen the sts.ndard governing the deel- y alon of a particatar case is provided by the posed any threat of causing a laterest.
Constitution," clore appellate scrutiny l$ / g particularly important).
The interest at At the time of petitioner's trial g stake in this kind of doeiston is nothing less repreentation of Gomes-Barajas, Barni than a criminal defer.at.t's ment right to counsel of his choice.
Sitth feet Amend-vely completed. As was et.
the Court notes,onfti trhl court shnply does not hare " broad She Iredale had obtained an acquittal for cdSim mes-Barajas latitude," ante, at 1699, to vitiate thisspiracy to distribute on charges relating to a conof Bn marijusta g,g right. In my view, a trial court that rejects also had negotiated an agreemen.est tredale t with the a criminal defendant's chosen counsel on Government the ground of a potential conflict should under which gi Gome would plead guilty to che.rges of tu en uld make findings on the record to facilitate nview, and an appellate court should although alon scru- andthe illegalimportation of merchandy' ga tinize closely the basis for the trial court's trial court had not yet accept-decision. ,d this ples arrangement. Gomes-Barajas Only in this way can a criminal was not scheduled to appear as a witness bebei \
timom' -
defendant's right to counsel of his choice at petitioner's trial; thus,Iredale's condd'j gas, be appropriately prvtected.
of that trial would not require him to ques-Bravo The Courfs resolution of the tion instanthis former caseclient- The only possMe tiener' flows from its deferential approach to the rechflict this Court can divine from Iredale' s u dit representation of both petitioner and c. yen tion to add or substitutemes-Barajas counsel; absentDistrict resta onjhe premise.thst the
(- Court's bowi den deference, a decision upholding thetrial District court would reject the negotiated ples deed,1 s
q i Court's ruling would be inconceivable. In.
igreement and that Gomes-Barajas.then pme,,
deed, I believe that even under the Court's wodid decide to go to trial-Js this mat,- ,t .el -
deferential standard, reversal is in order. he CourLtells_ug ";4titipner's pmbsbl' s at pti The mere fact of multiple representation, estimony at the resultmg trial'RCome __ ' i mariju as the Court concedes, will not supportlarajas an woiid create an ethical dJemu t eohed order preventing a criminal defendant or from Iridali."~AFde,~at 1M ~ ~
e~~ gg ,,
retaining counsel of his choice. is argument rests on'sheculstion of couwe As this Court has stated on prior occasions, such the most dubious kind. The- Court offm neither representation will not invariably pose a no reason to thinitthat the trial court
~
cutor :
substantirI risk of a serious conflict of would.have_ rejected _Go'mti!FsjalJ* es
( interest and thus will not invariablyagreement; the prospect of a fair trial. See Cuyler imperil neither did the Govercmet v.
positmyanchIreWaTILibrgument or Q decish Sullison, supra. 446 U.S., at 84ti-848,100 brief before this Court. The most likely wriou -
S.Ct., at 1717-1718; * "*
Hollousy r. Arkan- occurrence at tIie%ie petiti6sr%5ved to
<7 sas, 435 U.S. 475, 482-4B3, 98 S.Ct.1178, retain tredakaa-hia.defeme cou'nTeTwa 7.
[ 1177-1178,55 led.2d 426 (1978). The pro- that the triabcourtwoultsecept_Gomes- & co
\
priety depends of the District Court's order thus Barajas' plea ggreement u
on whether the Government fact later did. Moreover, ev_en lf Gomes-as the court in Q
showed that the particular facts and cir- Barajas had gone to trial, petitMmtrett Curt
) cumstances of the multiple representation bly woyldSoDEe%tifieCThfrecord pnec
/
proposed in this case were such as to over- 'ontains no indication that petitioner had j" come the presumption in favor of petition- any involvemerit-invinfornitionTNt decide er's choice of counsel I believe it is clear crimes for vrhich Gomn-Barajaa mightyet immim that the Government failed tcymake this have stood triar.-"The only allged conne showing.
Neither Eugene tredale's repre- tion between petitioner and Gomes-Baraps g'
,,i, sentation of Juvenal Gomes-Barajas nor sprang from the conspirsefto distraste ,my ,
/ tredak'; representation of Javier Bravo marijuanagandgrf tirtadrhed so 1 11e quitted Gomes-Barajas of thiisharp It
( % s,ti
l
- "8 anst'.s.171 WilEAT v. U.S. 1703 cua = see a.co tan steas) et of a therefore disingenuous to say that repre- ing argument. All of these developments ser.tauon of both petitioner and Gomer- were predictable when the District Court ial Iredale's js as was ef. f.araju posed a serious potential for a ruled on petidoner's request that Iredale cor.fhet of interest. serve as trial counsel; the contours of Bra-
" l- similarly, Iredale'sJrior_ representation vo's testimony were clear at that time.
3 f#b et Bravg ns not A faust for concern?The Given the insignificance of this testimony a' ! Court notes that the proseedtionlintended to any matter that petitioner's counsel nt wi b to call Jrava te the stand.st petitioner's would dispute, the proposed joint represen.
eg.3,7, tnal and asserts that Bravo's testimony tation of petitioner and Bravo did not
,fgg, '
could well have "necessitatled) vigorous threaten a conflict of interest.8
.rchad cron<xamination ... by petitioner's coun- yMoreover, even assuming that Bravo's vet accept' n Mg at M. %e facts, however, testimony might have "necessitat{ed] vigor-
,,p, "' tehe the claim that Bravo's anticipated tes- ous cross. examination," the District Court -
umony created a serious potential for con- could have insured against the pmsibility
's condue thet Contrary to the Couri's inference, of any conflict of interest without wholly Bravo could not have testified about peti- depriving petitioner of his constiiutjonal
, po, g 9M tv.,ner's involvement in the alleged marijua- right to the counsel of his choice. Petition-Iredak's r.a datribution erheme. As all parties er's motion requested that Iredale either be and Go. acre aware at the time, Bravo did not substituted for petitioner's current counsel that the how and could,not identify petitioner; in- or be added to petitioner's defense team, sted pka deed. prior to the commencement of legal Had the District Court allowed the addition
- a then metedingsrthetwoinen never had heard of Iredale and then ordered that he take no m nt' of each other. Bravo's eventual testimony part in the cross-examination of Bravo, any y st petitiorier's trial related to a shipment of possibility of a conflict would have been
,,, rnaripana in which petitioner was not in- removed. Especially in light of the avail-filemma vehed; the testimony contained not a sin- ability of this precautionary measure, the gie reference to petitioner. Petitloher's notion that Iredale's prior representation of counsel did not cross +xamine Bravo, and Bravo might well have caused a conflict of neither petitioner's counsel nor the prose. interest at petitioner's trial is nothing short cutor mentioned Bravo's testimony in clos- of ludicrous.'
t' plea 3. The sery insigraficance of Ilravo's testimony, tion scheme. As the District Court stated in nment c mbined with the timing LTUfprowcutor's considering petitioner's motion: *Were 1 in be
,nt
. or decmon to call Braio as a witneu, raneFA titioner'el position I'm sure I would want Mr. _
senous concern that the prEEGibrytem Iredale repreunting me, too. lie did a fantastic likely to manufactusTMhTliffrT'iliis' caE pled The job in that [Gomes-Barsdu) trial...
- App.
edto proseculee'e11eetstonio use Bravo as s wltness 124-125. The prosecutor's decision to call Bro.
) gg, mas an lith-hour deselopment. Throughout vo as a witneu may well have stemmed from a mn- the course nftTerhirgonati5iWTdth Dravo, the concern that tredale would do an equally fan-prosecutor naer had suggested that Dravo testi- twic job at petitioner's trial As the Court rt in fy at petEMrTTrial? At~Bravc'rguUtfples meg. notes, goWrnmental maneuvering of this kind i:
proceedings, when tredale notified the District televant to a trial court's decision as to whether
.oba- Court of peudoner's substitution motion, the to accept a criminal defendant's chosen c.iunset 00Pd prosecutor conceded that he had made no plans The signJicant poss!bility that the proiscutor to tall Bravo u a witneu. Only aber the arose, was engaging la such tod-faith condut t pro-had rutor learned of the substitution motion and vides yet another reason to dispute the Ucurt's sout decided to oppow it did he arvange for Bravo's resolution of this case, Iet tesumony by agreeing to recommend to the trial
- e- court i reduction in Dravo's untence. Espe. 4. The Court somewhat obliquely suggests thai cially in hght of the scarce value of Bravo's the timing of the monon to substitute or add
.jas testimony, this prosecutorial behasior very plau- Iredale as trial coun.el helps to justify the Dis-a g, sibly may be viewed as a maneuver to prevent trict Court's ruling. See a'sta, at 1695. 1696 tredale from representing petluoner at trial. 1699. I cannot agree. Iredale enade clear to tredale had prosed to be a formidable advet, It sary, he previously had galned an acquittal for the District Court that notwithstanding the prox.
imity of the scheduled trial date, he would nei-the alleged kingpin of the martjuana distribu. ther need nor request a continuance of the trial
% ;Paf,.
1704 108 SUPREME COURT REPOttTER use UA 17:
AnThe Court gives short shdit to the actual circumstances of this esse in uphold- in the defense. Thus, this is not a case in ing the decision below. These circum- which W' uiatrict Judge faced the questL,a stances show that the District Court erred whether one cannael should be in denying petitjoner's motion to substitute for anotherj reAhcr the question before or add Iredale as defense counsel. The lam 3nwas wbther ptitioner a; eld be proposed representation did not pose a aut* permitted to have oddanr'uf conset dhis stantial risk of a serious conflict of in% choloc. I agree with Mike MDielt, est.
The District Court therefore had no that the answer to that queadon h4 WM ly clear, authority to deny petidoner's Sixth Amend.
ment right to retain counsel of his choice- Accordingly, although I agrae with the This constitutional error demands that peti- Court's premise that tiistrict judges must -
- ingly Lioner's conviction be reversed.
dissent. I accord- be afforded wide latJtude in passing on motions of this kind,* in this case it is abundantly clear to me that the District Justice STEVENS, with whom Justice Judge abused his d%-tjon and deprived I!LACKMUN joins, dissenting. this petitionu uf a ohstitutional right of This is not the first case in which the such fundamental character that reversal required.
Court has demonstrated "its apparent un-awareness of the function of the indepen-dent lawyer as a guardian of our freedom."
Walters 1. Nafional Assn. of Radiation FY Surriwrs, 473 U.S. 305, 871,105 S.Ct.
3180, 8216, 87 L.Ed.2d 220 (19S5) (STE-VENS, J., dissenting) (footnote omittedi' But even under the Court's paternalistic 486 UA 174,100 led.2d 158 view of the citizen's right to select his or her own lawyer,its analysis of this case is GOODYEAR ATOMIC CORPORATION, seriously flawed. As Justice MARSHALL AppeDant demonstrates, the Court exaggerates the significinee of the potential conflict. V.
See ante, at 1701-1704. Of greater impor- Esto MILLER and Industrial trace, the Court gives inadequate weight to Commission of Ohio, the mformed and voluntary character of No. B6-1172, the clients' waiver of their right to conflict-free representation. Argued Jan. 19, 1988.
Particularly, the Court virtually ignores the fact that addi- Decided May 23, 1968.
tional counsel representing petitioner had provided him with sound advice concerning injured worker filed complaint for writ the wisdor of a waiver and would have remained available during the trial to nWst of mandamus to direct Ohio Industrial Commission te consider application for ad-were he substituted or added as defense coun.
sel. The timing of petoner's monon 1: there-
- In my view, deference to the trialjudge is appr*
fore relevant only insofar as it affected the priate in light of his or her greater familarity ability of the District Court to consider the is- with such factors as the abihty of the defendant ,
sues that the motic,a raised. The Datrict Court knowingly and voluntarily to waM s potenual its-1f tactieved that it had sufficient time sider these issues- l'ar from denying the m* to con" confhet (including the possibility that a ces fendant may be exerting undue influence mer i tion because of its timing. the District Cours the defendant), the character of the lawyertA t issued Ing a argument.
and oral dccisiva on the merits aher parucular full brief.ia:ts of the case, and the sysJlabile :
of thernauve counsel of a hke caliber. I i 1 i
p -__-____-__-------------------_
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- PRorESSIONAL REACTOR OPERATOR SOC. v. U.S. NRC 1047 y]
este se Hs had is47 (D C. Car.1991) pL settlem nt in .or an~ tensibly limited to pendent state claims, or
.. he expected liabity-by dropping its own potentiL1 counter' IV. CONC 1,t!SloN
\ ' '
ire settlements claims. In each of these situations, the For the reasons ritted, we grant the m '
petition and vacate C a orders.
- would obvi' Ay of the ng* Commission's rules will cause an increase .I"i in the costr to be borne by ratepayers. U setivity resultmg m
, d .
Lenefit of the carri. The rules may also create perverse incen. au. -'... .-~1m y 1 j -
1 of the ratepayers, tives for the conduct of litigation. In its !
tNuiring ratepayers Order on Reconsideration, the FCC decideJ <
et0ement, evei if it .
than the es--iefs that a carrier would be allowed to record a N; prejudgment settlement above the line to
3
't'ecause both jtdg.
the extent that the amount of the settle.
ment does not exceed the nuisance value of PROFESSIONAL REACTOR OPERATOR SOCIE1 Y, et
- M -
settleme' 4, t, the the suit. It declined, however, to apply this "I ' P'IIII8"'"'
iaanee % Jr, 'oma L' rule to a settlement entered after en initial v.
ket, the carrier will ttle ik suit at any severse judgment. Src 4 FCC Red at 4037 98. Yet the etonomics of the two The UNITED STATES NUCLEAR REGU. d]yj
'xceed its ext +cted LATVRY COMMISSION tad the Unit. g situations are identical. As the agency ree- ed States of Amerlen, Respondents.
under the FCC's egnized in the prejudgment context, if the 3 ve an excessive in- No' 141120' *
' judgment so that carrier cannot recover what it pays out in a i <
uttlement, then it has an incentive to cow United States Court of Appeals, penses (setuai and 2 led above the ame.
>mt out, howeser, tinue htigating-in the post judgment con.
text, to punue an appeal-even if the cost District of Columbia Circuit. ()
of doing so exceeds the amount for which it Argued Jan. 4,1991. *
~
skewed under the eeuld settle the case. Again, the effect is Decided July 23, 1991.
te (as yet urdutt" q j ules to all IW.ral to increase the amount recoverable frorn d /
reepayers. The agency's attempt to dih i
,'" Judicial review was sougnt of Nuclear
'{5 *j' tinguish between the pre and post judg-
' ment situations-that "[t]he issuance of an Regulatory Commission (NRC) rule calling h. .
gg'p], for sequestration of subpeonaed witnesses adverse judgment by a court should place a knd their attorneys and authorizing exclu-u .esulting feon Msviei burden on a carrier to show why sion of witncases' counsel if there was "
.cd h b t ratepayers should bear any cost of a subse- .,,
" reasonable basis" for believing that coun-in order to rtbat quent settlement," 4 FCC Red 4098-does r sel's presence would impair investigation. ;
recovery ef
- hat n t address the incentive it creates by re- The Court of Appeals, Ruth Bader Gins-n its revenue ra. fusing to exter.d the nuisance value excep- burg, Circuit Judge, laid thst: (1) seques-ieurs in order to tion to settlements entered while an appeal tration portion of rule did not violate First violation, then it is per. ding, j Amendment and was not arbitrary, but (2) '
onservative in its attorney exclusion portion of rule ran afoul ities that are verv 111) We recognize that the FCC's or-of Administrative Procedure Act's rightto-rs but might cof. ders do attempt to deal with some of the counsel provision. "
late federal law. incentive effects of its rules, that no sys'
- hoice of a costly tem of regulation will be perfect in this Ordered accordingly. m y that climmates regara, and that any perverse incentive 7 bility for having effect may be mitigated to the extent that t te. The carrier 1. Administrative Law and Procedure d a carrier may, as a practical matter, rebut *=668' 4
aggressive tm. the presumption against recovery. Never- Electricity *=8.5(2) 1 n initiative or it. thelva, because the FCC's rules may have ngs of the Reve Organization representing reactor op- N carrier might b2 very significar.t effecta (lndeed, even if erators employed at nuclear power plant ;
heate a pa-ty they are ultimately re-adopted only with sites did not qualify as " party aggrieved" '
eral lawsuit, fo* respect to antitrust htigation), we believe under Administrative,-Orders Review Act '
that the ag ney should expheitly address where it did not participate in challenged a settlement os- the incentive problems discussed above, rulemaking proceedi. before Nuclear g
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.[, 104S 939 FEDERAL REPORTER,2d SERIES pgoj Regulatory Commission (NRC) by submit- Petition for Review of an Order of the ting comments. 28 U.S.C.A. 6 2344. licensed by the $
Nuclear Regulatory Commission.
nuclear pwer h
- d fo otbr cial onstruction dj Deborah B. Charnoff, Washington, D.C., company that pros 3 defmitwns. for petitioners, nuclear power fac Carolyn F. Evans, Attorney, Nuclear "'9"D I'"E' O'.th the fr
- 2. Constitutional Law *>90.1(1) Regulatory Com'n, with whom William C. patible wi J Electricity p8.5(2) Parler, General Counsel, John F. Cordes, """#*"**** 'I II" t
Nuclear Regulatory Commission Jr., Sol. and E. Leo Slaggie, Sp. Counsel, (NRC) rule calling for sequestration of sub. Nuclear Regu!atory Com'n, Richard B.
,, k'r dure Act(APA)ri; poensed witnesses and their attorneys dur. Stewart, Asst. Atty. Gen., Evelyn S. Ying ing interviews did not violate First Amend. and Martin W. Matzen, Attorneys, Dept. of 5 U.S.C. I 555(b ment. U.S.C.A. Const. Amend.1. JustJee, were on the brief. Washington, clause of the Fift}
D.C., for respondents. assert that the N1
- 3. Electricity #8.5(2) violated the APA' ~
qu enants.
Nuclear Regulatory Commission Before RUTH BADER GINSBURG*
(NRC) rule calling for sequestration of sub. SILBERMAN and THOMAS, Circuit We reject as ir poenaed witnesses and their attorneys dur' Judges. ers' challenge to t ing interviews was not rendered arbitrary of the rule. Petit Opinion for the Court filed by Circuit the attorney exch.
or illusory simply because it purportedly Judge RUTH BADER GINSBURG. however, rests on merely confirmed NRC pohey of individual-ly interviewing witnesses. terpreting the AP RUTH BADER GINSBURG, Circuit antee; this court }
Judge:
agency may exclu-
- 4. Administrathe Law and Procedure This case concerns a rule adopted by the
- resenting a subpo Nuclear Regulatory Commission (NRC or interview, the age Electricity p8.5(2)
Commission) for the conduct of witness with " concrete e Nuclear Regulatory Commission interviews in connection with NRC investi- presence would i:
(NRC) rule authorizing exclusion of sub gations and inspections of licensed facili- SEC r. Caopo, 5 poenaed witness' counsel during interview ties. The rule, titled " Sequestration of 1976). Because th was not subject to deferential review since Witnesses Under Subpoena / Exclusion of standard is less :
Administrative Procedure Act, as control. Attorneys," permits: (1) sequestration of crete evidence" re ling statute, was outside NRC's particular subpoenaed witnesses during an interview; Po, we vacate the ,
expertise and special charge to administer. and (2) exclusion, as counsel accompanying tion of the rule. _
5 U.S.C.A. 6 555(b). the interviewee, of an attorney represent-ing " multiple interests," if the agency offi- Bac
- 5. Administrathe Law and Procedure cial conducting the inquiry has "a reason- The Commission p361 able basis" for believing that the attorney's ducts periodic revi Electricity p8.5(2) presence would impair the investigation. facilities to determ-Nuclear Regulatory Commission 55 Fed Reg. 243,247-48 (1990). Prompting legal requirements (NRC) rule authorizing exclusion of sub. A ruk, Ge Commission stated, were in- ty standards. Wh poenaed witness' counsel from interview if stances in which the "h,eensee's counsel or discovers rcason t
" reasonable basis" existed to believe that consel utamed by the licensee has also wrongdoing, or w NRC investigation would be impaired by represented [durm, g nierviews] witnesses otherwise so appr counsel's representation of multiple inter- who are employees of the licensee." Id. at within the NRC, t esta ran afoul of Administrative Procedure 243. Employee witnesses, the NRC ob. tions (01), condue,t:
Act's right.to. counsel provision by not re- served, "have been hesit4nt to divulge in- primary investigat4 quiring " concrete evidence" that presence rmadon agamst the mterest of their em-I
- 1. Professional React of counsel would obstruct and impede P yer m Se pnsenu of the,ri employer's an organization of i NRC's investigation, notwithstanding con- ' '**'I or counsel retam.ed by the employ. n I ar er
, ' , 1d tention that importance of protecting publie petitioners concede, health and safety warranted less stringent (1) Petitioning for judicial review of the rulemaking prxec.
standard. 5 U.S.C.A. 6 555(b). rule are several publie utility companies .y"[ [
+
'i i
, an Order of the PROFESSIONAL REALTOR OPERATOR SOC. v. U S. NRC ca. m r.u im m c ca. mn 1049 aI nussion. licensed by the NRC to own or operate view employees who might have informa-nuclear power plants, and an engineering tion concerning the apparent wrongdoing. d noff, Washington, D.C., f4 as, Attorney, Nuclear company that provides technical support to Sometimes these employees come forth vol-nuclear power facilities.8 Peutioners chal- untarily; frequently, however,01 must se-pf ,
lenge the sequestration provision as incom- cure their attendance at an interview by el with whom William C patible with the free speech and association administrative subpoena.
2nsel, John F. Cordes; guarantees of the First Amendment, and l Oe attorney exclusion provision, as imper- Persons whom the 01 interviews under !
- Slaggie, Sp. Counsel; mas smdn W & as h h d m " entitled to be accompanied, 4 Com'n. Richard B Gen., Evelyn S. Ying dure Act (APA) right to counsel guarantee, represented, and advised by counsel or, if I en, Attorneys, Dept. of 5 U.S.C. 6 555(b), and the due erocess permitted by the agency, by other qualified l ae brief, % ashington, clause of the Fifth Amendment They also Ftpresentative.,' 5 U.S.C. i $55(b). Be-
- ' assert that the NRC, in adopting the rule, cause an 01 finding of wrongdoing could ,
violated the APA's notice-and<omment re. lead t admm, ,strative i sanctions agamst the DER GINSBURG, 9 " I" *# nuclear facility, or even enmmal prosecu- ;
HOMAS, Circuit We reject as insubstantial the petition- tion by the Department of Justice, compa-ers' challenge to the sequestrabon portion nies operating nucicar facilities have often fl of the rule. Petitioners' APA challenge t provided counsel for their employees who I
.urt filed by Circuit i the attorney exclusion portion of the rule, are interviewed. On at least some occa-R GINSBURG. however, rests on a secure foundat2on. In- sions, the Commission has found, company i NSBURG, Ctreuit ep g the APA right to counsel guar- attorneys have taken the position that they i antee, this court has ruled that, before an "would relate to the company all that took agency may exclude an attorney from rep- place in the interviews." According to the .
a rule adopted by the resentmg a subpoenaed witness during an Commission, the presence of such attor- ;
- ommission (NRC or interview, the agency must come fo ward "'I' ' " **""E' # P ' ' " .ves conduct of witness with " concrete evidence" that counsel's at inte Mews has speded W,"s a- inwesg. i on 'sith NRC investi- presence would impede its investigation. tions, by "produe(ing] an mherent coercion licensed facili. ;
SEC n Csapo, 533 F.2d 7,11 (D.C.Cir. ?n the mteniewn not to reveal to the NRC questration of 1976). Because the NRC's " rational basis" inf nnatwn that is potentially detnmental poena/ Exclusion of ;
standard is less rigorous than the " con- to his employer." 53 Fed. Reg. 45769 (11 sequestration of ,
crete evidence" requirement stated in Csa. II688h '
during an interview; po, we vacate the attorney exclusion por- The NRC decided in November 1988 to
>unsel accompanying tion of the rule. address this perceived problem by propos-attorney represent- I ing a rule ensuring that interviews "be -
"if the agency offi. Background
- uiry has "a reason. conducted in an atmosphere free of outside The Commission's inspections staff con. influences." Id. at 45768. After receiving i g that the attorney's ducts periodic reviews of licensed nuclear comments, the Commission published its r the investigation. !
facilides to determine their compliance with final rule in January 1990. Under the 3(1990). Prompting legal requirements, notably, relevant safe- rule's " sequestration" provision, witnesses
,on stated, were in-icensee's counsel or e licensee has also ty standards. When the inspections staff and their attorneys are to be separated discovers reason to suspect safety related from other witnesses and attorneys during {g wrongdoing, or when the Commission is interviews. Under the " attorney exclu- I terviews] witnesses otherwise so apprised, a separate group sion" provision, where "a reasonable basis 7e licensee." Id. at N ses, the NRC ob- within the NRC, the Office of Investiga- exists to believe that an investigation or j tions (01), condue,ta an investigation. Ol's inspection will be obstructed, impeded, or itant to divulge in- .-
primary investigatory technique is to inter- impaired, either directly or indirectly, by an Iterest of their em- 6
- 1. Professiorv 1 Reactor Operator Society (PROS).
3f thetr employer s ders Review Act,28 td.C. $ 2344 (Hobbs Act).
an organization of reactor operators employed which governs direct redew of NRC orders.
ned by the employ- at nuclear power plant sites, was improperly u
See Simmons v. Kr. 716 F.2d 40, 42-43 (D.C.
included in the line up of petitioners. PROS. Cir.1983). While PROS does not quahfy as a M
34 petitioners concede. did not participate in the petitioner, the nine other parties joining in the dicial review of the rulemaking proceeding by submitting com- petition did file comments with the NRC and h ut.ility companies ments PROS therefore does not quahfy as a are in all resp cts qualified to maintain this 4;
- pany aggneved" under the Administrative Dr. ih review proceeding.
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939 FEDERAL REPORTER,2d SERIES PROFI 1050 attorney's representation of multiple inter- "[T]he provision in no way regulates or viewed witnesses,,
a ests, the agency official may prohibit that restricts witnesses' communications before no more than dat
- attorney from being present during the or after their interviews." Final Brief for remains 9 illusory, 1 interview." Various procedural protections Respondenta at 13. " "##
t apply to the attorney exclusion provision: Recognizing a point on which the seques- ' " " "
i first, the interviewing official, within five tration rule, as written, indeed left room however,in the Co ,
working days after the exclusion, must for doubt, the court asked counsel for the by rule, that its i give to the witness and her attorney "a Commission at oral argument: " , ***"
written statement of the reasons support- IAt's assume that you don't prevail on #' '
"' " E ing the decision to exclude"; second, the the attorney disqualification rule, but witness may appeal the exclusion decision you do prevail on the sequestration rule, to the full Commission; and third, the wit-Aff0"" -'
Would that sequestration rule cover the ness may delay the interview "for a reason- following situation: Attorney A is repre- The "atterney e able period of time to permit the retention senting witness X. (After) witness X NRC's rule reads of new counsel." 10 C.F.R. 6 19.18, re- concludes her testimony, witness Y (b) Any witnt ported of 55 Fed. Reg. 243, 247-48 (1990). comes in and attorney A is representing na to appear s' witness Y as well. [D)o you inter- agency inquiry :
Witness Sequestration pret [the sequestration) rule to say ya resented, and could exclude attorney A because attor' or her choice; l'
[2,31 The " sequestration" portion of ney A has already been in an interview official conduc the NRC's rule reads:
situation with a witness? mines, after co-(a) Ali witnesses compelled by subpoe-na to submit to agency interviews shall Counsel responded: of the General (
be sequestered unless the official con. Although the rule as written presently '
basis exists to lends itself to that interpretation, your tion or inspecti ducting the interviews permits otherwise, Honor, we would not exclude attorney A peded or impai-s 10 C.F.R. 619.1Ra), reported at 55 Fei from representing the subsequent wit- rectly, by an at Reg. 247 (1990). " Sequestration" is de. ness simply because he represented an multiple interi fmed as "the separation or isolation of wit. earlier witness m that same [investiga* may prohibit
- nesses and their attorneys from other wit-d "1 present during nesses and their attorneys during an inter-The court, to conclude the colloquy, asked: 10 C.F.R. I 19.1 view conducted as part of an investigation, inspection, or other inquiry." 10 C.F.R. So you simply interpret it as, in that Reg. 247-48 (19i -
619.3, reported at 55 Fed. Reg. 247 (1990), very interview, you can isolate the wit' struction agains Petitioners challenge this part of the rule ness? NRC's rule, sect as either too sweeping to survive First Counsel replied: A person et Amendment scrutiny, or too inconsequen- Exactly. aon before at tial to survive review for rationahty. Nei- In sum, we take it to be beyond genuine thereof is er.
ther argument is tenable. debate, based on the regulatory text and represented, 5 Despite the rule's defining language-- the Commission's repts entations to this 5 U.S.C. 6 5550 that sequestration means separation "dur- court, that the rule on witness sequestra- [4] As an h ing an interview conducted as part of an tion covers only the isolation of the witness NRC's contenti investigation"-petitioners maintain that, during an interview. It does not extend to rule against the in context, the rule could be construed to pre- or post interview communications by don, we must impose a vow of silence on every witness or with the witness, and it does not apply ential standard throughout the course of an entire investi- to multiple representation of witnesses by ' Respondents at gation. But the Commission, in its Final the same counsel. VI'*i"E "" "E Rule comments on " Sequestration," e x- A rule that simply limits the contempora- statute Congre:
pressly stated that the rule, "neither by its neous participants in the NRC interview to ister, we acem terms nor in its intended application, ef- NRC investigators, the witness, and his or ennee. Sn G fects a prohibition on the communications her chosen counsel, petitioners apparently
- I N'8"""##
or associational rights of witnesses either concede, does not encounter any First U.S. 837, 842; before or after an interview." 55 Fed. Reg. Amendment shoal. Instead, petitioners I'Ed.2d 694 (.
at 244. Again, on brief, the NRC affirmed: say, the NRC has always individually inter- has mdicated.
' . _ . ~~7
1 .
i PROFESSIONAL REACTOR OPERATOR SOC. v. U.S. NRC 1051 regulates or che na 939 F.2d 8047 (D.C.Ctr. I990 f'
" ations before ,iewed witnesses, so the rule, if it rneans courts do not owe the same deference to an no more than that, accomplishes nothing, agency's interpretation of statutes that,
]
Final Brief for 1 remains " illusory," and should be vacated like the APA, are outside the agency's par- , j which the seques. on that account. See Petitioners' Reply at ticular expertise and special charge to ad- '
l indeed left room 6. We see nothing arbitrary or illusory, minister. See Adams fruit Co. v. Barrett, A hewever, in the Commission's confirmation, - U.S. ,110 S.Ct.1884,1390-91,108 4 counsel for the 13 ment: by rule, that its investigators may inter- led.2d 585 (1990) (stating that Chevron d a don't prevail on view witnesses seprately, and out of the deference to agency interpretation of stat-
- cation rule, but hearing of other witnesses. ute would be inappropriate, because agency f y
>questration rule. did not administer that statute); Crandon !- ;
'n rule cover the Attorney E. refusion v. United States, 494 U.S.152, ,110
.[ ,,
3rney A is repr .
S.Ct. 997,1010,108 led.2d 132 (1990)(Sca- .
} .
The " attorney exclusion,, port. ion of the f lia, J., concurring) (rejecting Chevron def- -
N C s ruk nads:
.. witness y erence, because statute in question "is not %
. is representing
[Db you inter-(b) Any witness compelled by subpoe- administered by any agency but by the na t appear at an mterview during an courts"); Air North Am. v. Department of 5 h ~
rule to say you i because attor-agency inquiry may be accompanied, rep. Transp.,937 F.2d 1427,1436-1437 (9th Cir.
resented, and adused by counsel of his 1991)(no Chevron deference to agency in-
%k
.,tt in an interview r her choice; however, when the agency terpretation of APA, because agency not official conducting the inquiry deter- assigned special role by Congress in con- Y mines. after consultation with the Office struing that statute).
of the General Counsel, that a reasonable ritten presently basis exists to believe that the investiga. [5] Turning to the merits of the peti-E" * *'
- I " tion or inspection will be obstructed, im. tioners' challenge, the path we follow in 'a u e attomy A peded or impaired, either directly or indi. this case is marked out for us by SEC r. [
. equent wit- rectly, by an attorney's representation of Csapo, 533 F.2d 7 (D.C.Cir.1976). The Se- .p eted an multiple interests, the agency official curities and Exchange Commission in that ,N.
wesQa' may prohibit tLit attorney from being case sought to enforce a rule similar to the g present during the interview, one at issue here. The SEC's rule allowed P I "' en c n ue g an st gadon to as,'m Gat 10 C.F.R. i 19.18(b), reported at 55 Fed.
ex lude as e unsel r a subpoenaed wit-Reg. 247-48 (1990). The congressional in-
- ness lawyers who had already appeared -
struction against which we evaluate the before the officer as counsel for another
- NRC's rule, section 6(a) of the APA, reads,'
witness. Measuring the SEC s rule against A person compelled to appear m. per- the APA right to counsel guarantee, this s n befon an agmey or npresentative court found the congressional mandate yond g nu.ne
. therect is entitled to be accompanied, " clear," and the SEC's assertion of authori-represented, and advised by counsel.
4 g ty to disqualify attorneys under its rule, ss sequestra- 5 U.S.C. 6 555(b). " plainly inconsistent" with the privilege of @f' h
f the witness (4) As an initial matter, we reject the the witness " phrased by the legislature in lot extend to NRC's contention that, in measuring its unequivocal terms." 533 F.2d at 10-11. 4 :
nications by rule against the controlling APA prescrip. To adjust the SEC's investigatory proce. @j es not apply tion, we must apply a " narrow and defer. dure to the governing APA provision, the vitnesses by ential standard of review." Final Brief for Csapo court directed: "[B}efore the SEC Respondents at 14. It is true that, in re. may exclude an attorney from its proceed-contempora. Viewing an agency's interpretation of a ings, it must come forth . . with ' concrete interview to statute Congress has entrusted it to admin. evidence' that his riresence would obstruct -
- and his or ister, we accord the agency substantisl def. and impede its invecFgation." Id. at 10. 2]
apparently erence. See Chevron U.S.A. Inc. v. Natu- The%ECTits Final Rule comments on .L any First rol Resources Defense Couneit, Inc., 467 " Exclusion of Counsel" candidly acknowl- .
i petitioners U.S. %7, 842,104 S.Ct. 2778, 2781, 81 edged that its " reasonable basis" standard k lually inter. led.2d 694 (1984). The Supreme Court was "less exacting" than the " concrete evi- :
has indicated, however, that reviewing dence" standard of Csapo. 55 Fed. Reg at -
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1052 939 FEDERAL REPORTER,2d SERIES .
g k.i 245. Toforjustify claimed the greater its investigators, theauthority NRC it Fed. Reg. at 244, 246, 248; Final Brief for a
pointed to the different statutory responsi- Respondents at 20-22. The procedural pr*
bilities of the two agencies. The NRC stat- tections, while commendably augmented by UNITED .
/A ed: the NRC in response to comments, do not Impeding an SEC investigation, while change the character of the standard that Bernardo
- 1 serious, does not have substartial,imme- the Commission has aet. By the Commis-diate public health and ssfety implica- sion's own forthright admission, that stan- +
tions. In contrast, undetected violations dard does not measure up to the one we United Stat 1
of [NRC) regulations or the Atomic En- have held to be the APA. guaranteed per- District c v
ergy Act could have far reaching public sonal right of the witness. Argue (
health and safety implications. We note finally that, although the Com.
Decide Id. The importance of protecting the pub- mission vigorously defends its less confm.
lie health and safety, the NRC concluded, ng " reasonable basis" test, the NRC also-warrants "use of a less stringent stan- predicts: "[ljn virtually all cases where the ' "I
- dard." Id. See also Final Brief for Re- Commission may find it necessary to ex- States District (
spondents at 19 (contrasting "the financial emde a Medar ansel m. Columbia, George p is nM losses that might occur if an SEC investi- unlikely that the reasonable basis for s session of over fit gation is impeded," with "the frightening doing d in faM amount 2 tonerete m a iMed 2 distri consequences of an NRC failure to uncover dence, that otherwisc the investigation will ng and in relatic nuclear safety hazards"). be impatred." Final Brief for Respondents fense, and posses The NRC invites a comparison Congress at 19. This NRC forecast suggests that juana. Defendant has not commissioned us to make. The the Commission has no strongly compelling Appeak 3h APA establishes a " simple and standard need for a str.r.dard less protective of indi. I" plan of administrative procedure, viW righ b th m stated m Cap buckle in paper S. Rep.No. 752, 79th Cong., let Sess. I pocket of raincoat (1945), one " meant to be operative 'across not "used" in te Conclusion the board' in secordance with its terms." drugs with intent '
H.R. Rep. No. 1980,79th Cong.,2d Sess.16 For the reasons stated, the petition for fendant was not <
(1946). If the right to counsel at investiga- review is denied in part and granted in fense reduction for tory mterviews is to expand or contract part. We uphold the sequestration portion bility.
depending on the mission of the agency, of the Commission's rule, vacate the por.
Affirmed in pa Congress must say so " express 1y." See 5 tion on attorney exclusion, and remand the U.S.C. 6 559. Our current instruction, matter to the Commission for further con-however, is to apply the APA prescription sideration consistent with this opinion.8 .' #""'
" equally to agencies and persons." Id. Derringer that It is so ordered.
The NRC stresses that it has brigaded ita buckle in paper b; rule with " pro *ective procedures" notably, Pocket of raincoat
- the official conducting the inquiry must not "used" in rela consult with the Office of General Counsel drugs with intent t and provide a written statement of reasons ,ky,,,,,,,9
~^'ur hensive Drug Abus-for exclusion to both witness and counsel; trol Act of 1970, ((
furthermore, the witness may challenge 4N, 21 U.S.C.A. ((
the exclusion decision before the full Com. 844, 18 U.S.C.A. ( :
mission (and thereafter in court). Sce 55 blication I
2.
Beause we have vacated the attorney exclu-sion provision, we need not reach the petition- been NRC's uncontroversial " routine practice" dfsee io {Q"di'i ers' notice-and-comment challenge to that part and that it is fully consistent with the APA right 2. Weapons M of the rule. Nor need we reach the petitioners' to counsel. See Petitioners' Reply at 64. Thus.
parallel challenge to the sequestration provt.
When predieste even if the NRC had violated the APNs notice sion. We understand Bat portion of the rule to and comment provisions, a point we do not fenae is 001 session i mean only that the NRC may exclude from decide. remand for comment on an inue not ute, Government fail interviews persons other than the witness and genuinely in dispute would be a pointless exer.
her atterney; petitioners concede that this has etic' of demonstratm. g uus tion to crime of vi>1en-if evidence shows no i
m ~rm -r
_ _ __ 1 j;I l ll l ,
,. j f f
65948 Ftd:r:1 R: gist:r / Vol. 50. No. 244 / Thursday December 19, 1991 / Rules cnd Regulations i for publication of this final rule without Ust of Subjects in 10 CFR Part 19 NUCLEAR REGULATORY a general notice of proposed revocation Criminal penalties. Environmental
- COMM!SSION for comment. See 5 U.S C. 553(b). protection. Nuclear materials. Nucleat Ilowever, the NRC is concurrently power plants and reactors. Occupational
+
10 CFR Part 19 publishing for comment a proposed rule safet) and health Radiation protection.
g that would replace the sacated attorney Reporting and recordkeeping excluabn provisions with a rule that requirements. Sex discrimination.
Exclut.lon of Attorneys From c nforrns to the guidance of the court.
Interviews Under Subpoena For the reasons set out in the Environmental !mpact: Categorical preamble and under the authority of the AGENCY: Nuclear Regulatory Atomic Energy Act of 1954, as amended.
Exclusion the Energy Reorganization Act of1974.
Commission.
The NRC has determined that this as amended, and 5 U.S C. 552 and 553, AcTeoN: Final rule.
final rule is the type of action described the NRC is adopting the fol(wing SUM M ARY:The Nuclear Regulatory in categorical exclusion to CFR amendments to 10 CFR Part 19.
Commission (NRC) is rev oking its 51.22(c)(1). There fore, neither an regulations pertaining to exclusion of environmental impact statement nor an PART 19-NOTICES,INSTTIUCTIONS attornt ys from interuews under environmental assessment has been AND REPORTS TO WORMERS:
subpoena. These regulations were prepared for this final rule. INSPECT 60N AND INVESTIG ATIONS Sacated upon judicial review by the 1.The authority citation for part 19 Un ted States Court m Appeals for the Paperwork Reduction Act Statement c niinues to read as follows:
District of Columbia Circuit. This final ule does not contain a new Authority: Seca 53. El 81.103.104.161.186.
EFFECTIVE DATE: January 21,1992- or amended information collection 68 Stat. 930,933. 935. 936. 937. 948. 955 as requirement subject to the Paperwork FOR FURTHER thFORM ATION CONTACT:
Roger K Dasis. Office of the General Reduction Act of 1980 (44 U.S C. 3501 et y'[g $2 ta,to44(a'
, ji, 21 Counsch U.S Nuclear Regulatory seq ). Existing requirements were 2236. 2282) sec. 201. es Stat.1242. as Commission. Washington DC 20555, approsed by the Office of Management a mended (42 U.S C. S841). Fu L 95401. sec.
and Budget approval number 3t50-0044 10. 92 Stat. 2951 (42 U S C. 5851).
telephone (301) 492-tm pu m an m .6 ta a. u SUPPLEMENTARY thrCRM ATION: Upon Regu1at ry Analysis a mended (42 U S C. 2273)- 151911 tal. (cl.
judicial reuew. the Un ted States Court ' '
of Appeals for the District of Columbia This regulatory action.is taken in (dd*"[a($]e :aEe(d 2 S$ '
Circutt vacated the attorney exclusion response to the decision of the United 2201(b)). and il to 13 and 1914'al are issued States Court of Appeals for the District under sec. telo. 68 Stat 950. as amended (42 portion of the rule. titled " Sequestration U S C. 2201(ol).
of Witnesses Under Subpoena / of Columbia in Professiono/ Reortor Operctor Society v. United States Exdusion of Attorneys." which was Nuclear Regu/ctory Commission. 939 I 18 3 IA*'"d'dl pubbshed by the Commission or Fad 1047 (D C. Cir.1991). The appeals 2. In i 19 3. the definition of January 4.1990 (55 FR 243). Prer essional
- Exclusion" is removed.
court vacated the attorney exclusion Reactor 0;'erator Society v. United Stoles N.;clect Re.culc!ary Commission. portion of 10 CFR part 19. Consequently' l 19.16 (Amended]
the NRC is revoking the attorney P 8 phs (b)-(e) are 939 Fad 104* (DC Cir.1991). "I Consegurntly. the NRC is tes oking and exclusion provisions reported in 10 CFR d aEd bs ved.
remosing the defimtion of ' exclusion , part 19. Dated at Rockville. Maryland this 13th day appearing in 10 CFR 19 3. and the Backfit Analys.is of December 1991.
standard and procedures for attorney for the Nuclear Regulatory Commission.
exclusion appearmg in 10 CFR 19.18;b}- Yhe NRC has determined that a Samuelj Chilk.
backfit analysis is not required because le) these amendments do not involve any Secretor 3 of the Commission.
S.nce this action implements the (FR Doc. 91-30313 Filed 12-16-91. 8 45 amj ruhng of the appeals court, the NRC has provisions which would impose backfits a s defined in 10 CFR 50109(a)(1). s w .o oc4 r w ei-v determmed that there is " good cause" m
, . ~ .. ., .
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rederal Register / Vol. 56. No. 244 [Thursda.y December 19'irh / Propo, sed'h'" S&G48 NUOLEAR REGUt.ATORY# % inspectio s. These amendments also i COMMISSION eddence" standard' The Commisaion pnnided for the exclusion of counsePfar notes that a nuraber of the comrnente.rs a subpoenard witness when that 10 CFR Part 19 on the NRC's earlier proposed rule (5.1 counsel represented multiple interests FR 45768) expressed the view that the Cm also-AE1I snd there was reasonable basis to proper standard for exdusion af. counsel believe that euch reprnentation would by the NRC was the Csopo " concrete.
Exclusion of Attorneys From prejudice. impede. or impair the integrity evidence" standard.
Int:rviews Under Subpoena. of the inquiry. }n addition- the It is dear that one important means A amendrnents specifled responsibilities of y ll uciear Regu!ator}, the NRC and r ghts ofindividual by which the Commission implernenta its responsibility for ensurms public Actiow Proposed rule. witnewes. llcanseco and attorneys when health and safety is by investigation of esclusion suthontywas to beewercieed' unsafe practices and potential violations suuMAny: The Nuclear Regulatory Both the sequestration pronsion and of the Atomic Energy Act and NRC.
Commission (NRC)is p uposing to the attorney exclusion portton of the regulatlans. See 10 CFR Part19.10 CFR amend its regulations to provide for the rule were challenged in s. petition to the 1.36. NRC investigators inust often.
exclusion of counsel from interviews of United Stetes Court of appeals for the.
a subpoenard witness when that District af Columbia Circuit for judicial interview lleensees, their employees, ew. On July 23. M1. the courtmf and other individuals having possible coun.cl tepresents multiple interests knowledge of matters under, cnd there is concrete eudence that such 8ppeals upheld the sequestration portin investigation. Effective identification representation wculd obstruct and of the Commission's rule. uacated the p rtion on att mey exclusion.and and correction orunsafe practices or impede the WeWation. The proposed regulatory violations through.an.
amendments are designed to ensure tbc remanded the matter to the Commission integrity and efficacy of the f r further considera tion oonaistent with investigative or inspection process may imestigative and inspection process. the court s. opinion. Profemona/ Reactor depend upon the willmgness of individuals having possible knowledge The proposed amendments are not espected to have any economic impact h7 [OT ,,f,793, . M h pch e Mah y s#
F.2d ItM? (D.C. Cir.19911 The provisions openly.and candidly to Comnussion on the NRC or its hcesees
- fficials. In many cases. Investigating Concurrently, the NRC is publishing a
- 8 I
fmal rule revoking its preuously- were the dehnisn of " f"'I'N "
nelusion oofficials must also conduct extensive and difficult inquiries to determine pubbshed attorney exclusion N, 8 "dp "
regulatmns Those regulauons were d r s fo e nq whether violations were willful and/or vacated upon judidal reuew, nclusion appearing in 10 CFR 19.18(b)- whether licensee a management engaged g in wrongdoing.
EATts: Comment penod upire6 The court of appeals found that the As specified in 10 CFR 19 2. the rnle February 18.19n Comments received w uld apply to allinterviews under
" reasonable basis" part of the standard '
after this date will be considered if it is for exclusion of counsel infringed to an subpoena within the lunsdiction of the practical to do so, but the Commission Nuclear Regulatory Commission.other-c n only assure consideration of those impermissible degree on the nght to. .
counselguarantee of the Administrative than those which focus on NRC comments receis ed on or before that Procedure Act (APA),5.U.S.C. 55s(bl.
emp! yees or its contractors.The rule date.
The court reasoned that it was not free. does.not apply, however, to subpoenas t.ooxtssts: Mail a ranen comments to without enpresa Congressional issued pursuant to 10 CFR 2.720.
Secretary. U S. Nuclear Resulatory direction. to expand or contract the right Although in the discussion that follows Commission. Washmgton. DC 20555. to counsel at investigatory interviews we use the terms
- licen'see or Attention. Docketmg and Senicing depending on the mission of a particular hensee a c unsel,, the rule and Ita.
Branc.h. agency. In a prior interpretation of the rationale apply as well to "non.
Dalner comments ta 2C0 L htreet. APA right to counsel guarantee, the licensers" whose activities fall within NW.. Washington. DC. between No am court had ruled that the Securities and ge jurisdicuon of the Commission 2 hFride Eschange Commission could not Simdarly. while much of the discussion and 415 pm.
Commente Monde recen ed maythroube examm.
ed c=clude an attorney from representing a most directly concerns interviews at the NRC Pubhc Document Roc,m. a. subpoenaed witness during an interview conducted under subpoena by the NRC,s-2120 L Sticet NW. (Lower Level). unless the agency came forward with Ofhce of Inves1igations, the proposed Washington' DC. " concrete evidence" that the counsel's rule would also appl) to NRC.
Fon ruarHtm twronuation cowfAct, ' presence would obstruct and impede its inspections and linestigations Roger K. Davis. Ofhee of the General investigation. SEC v. Csapo. 533 F.2d 7, conducted under subpoena by other Counsel. U.S. Nuclear Regula tory 11 (D.C. Cir.1976). Since the NRC's NRC officials.
Comtrussion, Washmgton. DC 20555. " rational besis" standard was less The Commission's principal concerns telephone: (301) 492-1806.
rigorous than the " concrete evidence- relate to cases in which hcensee's (
requirement stated in Csopo, the court. counsel or counsel retained by the sueetutNTAny tw$omunTiosc On vacated the attorney exclusion portion licensee represent both the hcensee or january 4,1990 (55 FR 243 the Nuclear of the NRC rule _
Re2ulstory Commission (NRC) licensee's officials under 'mestigation These proposed amendments are. in and other employees who are to be published in the Federal Register essence, a logical outgrowth of the witnesses. In these contexts, the amendments to its regulations found at court's guidance in Pro.fessiono/ Reactor Commission believes that there is 10 CFR Part 19 The NRC pubbshed the Opemtor Society v. NhC. supro. Irr potential for inhibiting the candor or !
proposed rule on November 14.19S8 (53 response to the appeals court decision, witnesses who rnay be hesitant or FR 45768).These amendments provided for the sequestration of witnesses the Commission has determined that its unwilling to dnulge information against statutory responsibilities would be the interests of the licensee orits i compelled by subpoena to appear in served by adoption of an attorney officials in the presence of the licensee's connection with NRC imestigatmm oe exclusion rule containing a " concrete counsel or counsel retained by the i
-,,, .. n. . . . . . . .
. ,. ad. . M -
k '
. i 65950
.h . r;dertl Regisiez / Vol. 56. No. 244 / Thursday. December 19. 1991 / Proposed Ru{es r- , .
1 licensee.The concern about potential transmittal ofinformation from the Regulatory Analysis .
inhibition may be heightened when the interview to the licensee would surely counsel miends to tell the employer be relevant. It would also be relevant if The APA affords individuals everything that was said during an there were evidence that the multiple compelled to submit to agencyinquiry 4 interview. !t also may be heightened representation would lead to disclosure under subpoena the right to be where the matter under investigation of the substance of an interview to e accompanied by counsel or other concerns whether licensee s employees future interviewee or subject in the representative of choice. 5 U.S.C. 555(b).
have been, or are being, harassed or inv2stigation and that this disclosure Alth ugh the right to counsel guarantee intirnidated for raising safety issues. would have an adverse impact on the f section 555(b)is not to be lightly Multiple represectotion can also raise investigation. disturbed. it is not absolute and may be the concern that a sub;ect of the While there have been particular circumscribed within permissible limits investigation may learn facts. theories or cases raising questions about means of when Nsuce reqms as den Gere is strategies that are reveafed in an c ncrete evidence that the presence of addressing the perceived impairment of interview and then act in ways that investigations as a result of multtple e unselduring an investigative would obstruct further steps in the
~
representation 8 this rulemaking does intenw w uld impede and obstruct investiga tion. Consequently, the not require, or rest upon, a the agency s investigation.
Commission has had a long standing determination of whether past cases Questions concerning the scope of the concern i that, in some instances of right to counsel have arisen in the have involvec' concrete evidence of multiple representation. the obstruction.The principal bases of this context of NRC mvestigative interviews Commission's abthry to identify and rule are the Commission's pohcy of licensee employecs when the correct unsafe ptactices and regulatory judgments that:(1) Cases may arise employee is represented by counsel who violations may be seriously impaired. also represents the licensee or other where there will be concrete evidence The Commission recognizes that that the presence of counsel witnesses or parties in the investigation.
neither mere multiple representation nor representing multiple interests during an Although this arrangement is not speculation about a potential for NRC interview would seriously obstruct improper on its face the Commission obstruction of an investigation is a the NRC investigation: (2) The remedy of beheses that auch multiple i sufficient basis to exclude counsel.The exclus:on of the counsel from that representation has the potentialin some s Commission does not presume that a cases ofinhioiting the candor of the interview should be available; and (3) I witness's retentwn of counsel who also The ru!c should fa cilitate expeditious witnesses und seriously impairing the a represents the licensee or other and satisfactory consideration of many integrity or efficacy of the NRC employees necessarily willinhibit that questions concerning multiple l investigation. The proposed rule, which witness from providing information to representation during the course of NRC delineates NRC responsibilities an NRC inspector or investigator during ins estigations. The Commission notes concerning the availability of the an interview. It also does not view that the propriety and utility of such a remedy of exclusion of counsel, as well vigorous advocacy by competent rule. however rarely invoked and as rights of witness and counsel e
counsel as improper. e applied, was recognized in both Csepo concerning the presence of counsel s Rather, the proposed rule provides and a previous circult court decision during the conduct ofinteniews, is 2 direction for handhr.g cases in which involving the SEC's 6equestration rule. intended to further expeditious and there is concrete evidence that the although the facts of those cases did not presence of counsel for multiple satisfactory resolution of NRC's inquiry wartant exclusion. SEC v. Csopo 533 into public health and safety matters.
interests at a witness's interview would F.2d 7:SEC. v. Higashi. 359 F.2d 550,552 obstruct and impede the investigation. Cuidan:e in this area should reduce (9th Cir.1966). delay and uncertairty in the completion The Commission cannot predict in detail what manner of circumstances will arise Ensironmental Impact: Categorical of an investigation when certain in particular insestigations that willlead Exclusion questions of multiple representation arise. The foregoing discussion to consideration of application of the exclusion ruir. llow es er, mvocation of The NRC has determined that this constitutes the regulatory analysis for proposed rule is the type of action this proposed rule.
the ru!e would obsiously be supported described in categorical exclusion 10 by concrete evidence that the witness CFR 51.22(c)(1). Therefore, neither an Regulatory Flexibility Cernfication would be rnore forthcoming or candid environmentalimpact statement nor an danng the mierview if the waness were In accordance with the Regulatory environmental assessment has been Flexibility Act of 19N 5 U.S.C. 605(b).
not represented by counsel who also represents the licensee or other prepared for this proposed rule. the Commission hereby certifies that em;!o3 ces This rmght invohe evidence IdPerwork Reduct,on Act Statement this rule,if promulgated would not have that the w;tness would answerin a significant impact on a substantial This proposed rule does not contain a number of small entities.The proposed greater cetailif there were not an understandmp that the counsel would. rew or amended information collection rule, which sets forth rights and or might. report the substance of the requirement subject to the paperwork limitations on the choice of counsel of Reduction Act of 1980 (44 U.S C. 3501 et licensee employees and other interview to the bcensee or other seg ). Existing requirements were individuals who are compe!!ed to witness. For instance evidence that the appros ed by the Office of Management employee had a concern that his appear before NRC representatnes and Ibdget approval number 3150-OM4. under subpoena, would have no employment would be jeopardized by significant economic impact on a iSee eg Repon of the Adosyy Commmee for 8 Sec. e s. Memorand.m dered Augus' f.1M substantial number of small entities.
f*om Den B. Hay es. Director. Off ce of Review of the linesyat.on Pohcy on R,gMs of InvesSantions to James L B:aha. Ass.stant for Backfit AnalIsis bcensee Er p c>ees Under Inses" satan Sept 1s. Opersuons. OSce of the becutne Director for beo Es Repcrt is a6 edatde far irnrettan at the Operations Ra memorandum is avaJabie for The NRC has de!ctmined that a FOC Putac Document Rocrr. 21:01. ;treet SW. . .
1,specton et the NRC Pubbe Documeni Room. 212o backfit analysis is not required becauw (bet (Ave!}. W anNnsma DC. t Street. NW. (Lower teve!). W a sNngton. DC.
these amendments do not involve any
s . .
._ . _. ,.g .;
Federal Regis!cr / Vol. 56. No. 244 / Thursday. December 19, 1991 / proposed Rules 65951 -
provisions which would impose backfits 2.1n i 19.3 the definition of (c) The interviewing officialis to as defined in to CFR 50100(a)(1). 'T.xclusion"is added to read as follows:
provide a witness whose counsel has Liu of Subjects in to CFR Part 19 t>een excluded under paragraph (b) of I 33.3 p.m
+
Criminal penahies, Ens ironmental * * * *
- this section and the witness's counsel a protection, Nuclear materials, Nuclear wniten statement of the reasons Exclusion means the removal of supporting the decision to exclude. This power plants and rtactors, Occupational ' counsel from an interview whenever the stfety and health. Radiation protection- statement, which must be provided no Reporting and recordkeeping NRC official conducting the interview later than five working days after requirements. Ses discriminations ~ has concrete evidence that counsel's exclusion, must explain the basis for the representation of multiple interests will counsel's exclusion.
For the reasons set out in the obstruct and impede the particular preamble and under the authority of the (d) Within five days after receipt of Atomic Energy Act of 1934, as arnended.
investigation. inspection or inquiry, the written notification required in the Energy Reorganization Act of1974,
. . . . paragraph (c) of this section a witness en amended, and 5 U.S C. 553, the NRC 1 In i 1918. paragraphs (bHe) are whose counsel has been exJuded may is proposing to adopt the followmg added to read as follows: appeal the exclusion decision by filing a amendments to 10 CFR part 19. motion to quash the subpoena with the
$ 19.18 Sequestration of witnesses and Commission.The filing of the motion to PART 19-NOTICES, INSTRUCTIONS anclusions of counselininteMews quash will stay the effectiveness of the conducted under subpoena, subpoena pendmg the Commission's AND REPORTS TO WORKERS: . . . . .
INSPECTION AND INVESTIGATlONS decision on the motion.
(b) Any witness compelled by (e)If a witness's counselis excluded t The authority cita tion for part 19 subpoena to appear at an inte view under paragraph (b) of this section the contmues to read as follows. during an agency inquiry may be interview may, at the witness's request, Au4ority: Secs 53. 63 et 103.104.16L too, accompanied, represented, and advised either proceed without counsel or be 68 Stat. 930. 933 9.15,936. 93*. 94&. 955 e, by counsel of his or her choice. debyed for a reasonable period of time emended see n4 83 stat en as amended flowever, when the agency cfficial to permit the reMntion of new counsel.
1,42 t1S C :c 3. ml :111, :133. 2134, 2:01, conducting the inquiry determines, after The interview may also be rescheduled
- 38. 2:an sec 001. as sut.1:4:. as to a subsequent date established by the amended l4:U.S C 5641) Pub. l 95-601. sec.
censuhation with the office of the General Counsel. that the agency has NRC.
10.9: Stat 2951 (4: U S C. 5851)
For the purposes of sec 223. 68 Stat. 9'A as concrete evidence that the investigation Dated at RockviDe. Maryland this 13th day or inspection will be obstructed and of December,1W1, emende d '4: U.5 C ..'J) l} 1911[a). (c). (d),
cnd (e) and 191: a re iswed under sec.161b. impeded, direct}Y or intlitectly, bY an For the Nuclear Regulatory Commission-68 Stat. 948. as amer.ded 14: U S C 2 01(b)t aMomey's representation of multiple Sainue1 ). Chitk, p.
end l{ 1913 and 1914f a} are issued under interests, the agency official may Secretary of tbe Commissim sec.161o. 68 S:at BM a$ amended (42 U.S C prohibit that attomey from being present (FR Doc. 91-30312 Filed 12-1tt-91, a 45 am' 2 011o))- daring the interview.
memo coor rsima 1
i f
1
kl ll t ll - 4 n
Fed:rd Regist:r / Vol. 57, No. 23 / Tuesday, February 4,1992 / Proposed Rules 7 9'
'~
} 4166 l
- NUCLEAR REGULATORY eliminated. In accordance with the PPG only). While streamlining fuel design COMMISSION document, the staff initiated a program safety reviews would have marginal to make regulatory requirements more impact on safety, there appeared to be 10 CFR Chapter i efficient by eliminating those with no significant cost savings in modifying marginal impact on safety.~ them based on subsequent discussions Olmination of Requirements Marginal At the start of the 1984 prog *am, the with a number of utilities and industry to Safety NRC solicited comments from industry groups, including fuel vendors.
AGEHcy: Nuclear Regulatory a specific regulatory requirements and The NRC has or proposes to take associated regulatory positions that action in the areas of containment Commission.
Action: Solicitation of public comments. nudyd neva!uation. In nsponse to leakage rates, MSIV leakage control f hRC s reque,st, a survey was conducted systems, and combustible gas control in
SUMMARY
- The Nuclear Regulatory by the AtomicIndustrialIorum f providing most of industry e input. The inerted BWR containments (see i Commission (NRC) seeks public Conclusions). The NRC is not proposing cornment on the results, conclusions, industry survey results, which were
! any action for the revision of and planned actions of its program to published for the NRC in NUREG)CR-requirements related to turbine missile eliminate requirements marginal to 4330 Review of Light Water Reactor a '^p protection and postaccident sampling 2 safety. Two issues involving license ~
systems at this time, since the effort nc! d a st f 45 con idat s g ,
conditions or commitments have been '
now is focused on benefits for operating potential regulation modification. A identified for elimination.The NRC has reactors, and the elimination of these also concluded that decreasing the Program Advisory Group, composed of requirements would not result in prescriptiveness of some ofits current members from the maMr NRC offices was formed to review these candidates, significant savings for gperating regulations may improve their reactors. Turbine missile protection effectiveness by providing flexibility to The group selected 7 areas from the 45 candidates for analysis based on the reviews have already been completed, licensees without reducing safety.The and the costs of installing postaccident NRC la seeking comments on this p tential benefit for licensees and the conclusion and the benefits of modifying number of plants that would be affected: sampling systems have already been (1) Containment leak rate testing. (2) expended by licensees of operating some of its p*esent regulations consistent with this conclusion.The DWR main steam isolation valve (MSIV) reactors. 3 leakage control systems, (3) fuel design The survey that was initially ;
NRC will consider a performance-oriented, non-prescriptive, approach in safety rnfew,(4) postaccident samnling conducied provided industry's input to I future regulatory initiatives. The NRC systems. (5) turbine missiles, (0) develop a list of potential candidates for ,
t encourages the submittal of a petition combustible gas control systems, and (7) modification or elimination. In order to -
- for rulemaking whenever there is a brief charcoal filters.The results of the complement this earlier work and that NRC regulatory requirements analyses of the selected candidates ensure a complete search, a survey was -
impose a significant economic burden have been published for the NRC in conducted to collect suggestions based without commensurate safety NUREG/CR-4330, Review of Light on the accumulated knowledge of NRC significance. Water Reactor Regulatory staff members, many of whom have 6 oATES: Comment period expires on May Requirements," Vols. 2 and 3, dated June spent years developing and applying ,
1986 and May 1987. The effects of plant regulations. A structured interview 4.1992, for comments on the results, conclusions, and planned actions for s ed egnahs or mo&auons m process utilizing each section of the the regulations were evaluated in terms this program. Standard Review Plan (SRP) was of such factors as public risk and costs d""I F d'Th* ded
- ADDRESSES: Submit written comments to industry and NRC. The results to: Chief Regulatory Publications syskmak and compensw.e indicated that potential modifications of C mpilation of regulatory positions that Dranch Division of Freedom of the regulatory requirements in all the Information and Publications Service- served as the structure on which to areas except charcoal filters would have U.S. Nuclear Regulatory Commission, organize the interview. Interviewees little impact on risk. Impregnated ,
Washington. DC 20555. Copies of the charcoal filters in building ventilation w re selected so as to ensure SECY paper, staff requirements systems did appear to limit risks to the reasonably comprehensive and i memorandum, and NUREG and public and plant staff. The cost analyses insightful coverage of all areas of I
contractor reports may be examined at: indicated that substantial savings in reactor regulation.They were to draw +
the NRC Public Document Room. 2120 L operating costs may be realized in the upon their expertise in their particular Street. NW, (Lower Level) Washington, areas of containment leakage rates, area. tlair experience in regulation, their DC. MSIV leakage control systems, knowledge of regulatory requirements, FOR FURTHER INFORMATION CONTACT combustible gas control in inerted BWR and ar.y other information at their Moni Dey, Office of Nuclear Regulatory containments, inspections for turbine dispesal.The survey identified 54 Research, U.S. Nuclear Regulatory missile protection, and postaccident cendidates *, a number of which were Commission Washington, DC 20555 sampling systems (for future plants previously identified in the earlier ,
(301) 492-3730, suryey.
SUPPLEMENT ARY INFORM ATION: s Copies of NUREG senes reports may be A method 8 was developed to purchased through the U.S. Government Fnntms evaluate the potential candidates NRC Initiatives for the Elimination of omce by cathns (20:1 st2-:::49 or by writmg to the Requirements Marginal to Safety U & Govemment Prmtmsatfice. P.O Box 3'os:L Washington. DC 20o13-7002. Copies may also be 8 'Tffectiveness of LWR Regdations in 12miting In 1984, the NRC's Annual Planning purchased from the National Technical information Risk." Prepared for the NRC by Battelle Columbus Service. U S. Department of Ccmmerce, sca5 Port Labo May 19a9.
and Program Guidance (PPG) document * "Ehmmation of Requirements Margmal to R Y"I" *d. sonngfield, vA 2:1m. A copy is stated that " Existing regu!atory avadable for mapection or copymg for a fee in the Safey?' Prvpared for the NRC by Scientech. Inc..
requirements that have marginal NRC Pubhc Document Room. 21::o L Street. NW Task 1: Methodobgy Development. Dec.1940; Task tmportance to safety should be (Lower inel). Washmston. DC. 2; Apphcation of Me:hodobgy. March twt.
3 1
, Federal Register / Vol. 57, No. 23 / Tuesday, February 4,1992 / Proposed Rules 4167 identified in the surveys to select those appendix A," Requirements for merits of establishing criteria on that have a marginalimpact on safety Protection Against Dynamic Effects of containment performance (including a end yet would reduce the regulatory Postulated pipe Ruptures") that had leakage rate) as a replacement for the burden on industry. An assessment of marginalimportance to safety. In other part 100 dose calculation currently the short- and long-term NRC and instances licensees have been exempted employed. This rulemaking is expected licensee benefit and burden was from some regulations (e p., hydrogen to be completed by the end of Fiscal conducted together with an evaluation recombiners in Mark I and Mark 11 Year 1993 O of the safety importance of the potential inerted containments). As noted C Decreesing the prescriptiveness of regulatory candidates. This assessment previously the NRC staff has also been some regulations may improve their was based on a qualitative analysis and working with industry to clarify some effectiveness by providing flexibility to engineering judgment. Eight candidate regulations, e g.,10 CFR 50.59," Changes, licensees without reducing safety.
Items were identified 8 as having the Tests and Experiments." These efforts The surveys and interviews of the highest potential for naving resources have resulted in the Guidelines for 10 CFR 50.59 safety evaluations (NSAC- industry and NRC staff conducted as [
while not significantly affecting safety margins: (1) Replace 10 CFR 50.44 125). At the time the above noted studies part of this program yieided a genera 1 q' indication that some of NRC,e y (hydrogen rule) with a performance, were completed in March 1991,it was difficult to identify a regulation that ngulanons need not be as prescriptive based rule accompanied by a regulatory guide, (2) clarify 10 CFR 50.59 " Changes' warranted complete elimination because as they presently are. By decreasing the j it was so burdensome on operating . pns@eness of some ngulaUons ad a Tests and Experiments." (3) replace fire ore flexibility e r protection requirements in appendix R reactors and so marginal to safety.
with a performance-based rule
{vidi Conclusions safety features, the regulatory process accompanied by a regulatory guide, (4)
The NRC has reviewed each of these may be made more effective. l k gf'Contro items and has reached the following Specifically, the following three p t ( upda regulations could be made less Regulatory Guide 1.76, " Design Basis c nelusions: ,
3 A. No additional 10 CFR part 50 prescriptive: (1) 10 CFR 50.44, a d" I cla fy I'm r an o afe . [1 regulations were identif;ed that are so " Standards for Combustible Gas Control burdensome on operating reactors and Systems in Light Water-Cooled Power regulations, (7) replace containment so marginal to safety to warrant the Reactors :(2) appendix ] of 10 CFR 50, testing requirements in appendix J with expenditure of additional NRC "Frimary Reactor Containment leakage a performance-based rule accompanied i by a regulatory guide, and (8) transfer res urces t eliminate at this time. Some Testing for Water-Cooled Power regulations have been lder.tified that Reactors"; and (3) appendix R of 10 CFR {
ECCS evaluation models in appendix K could potentially be rectified (See 50," Fire Protection Program for Nuclear j to a regulatory guide.
Conclusion C); Power Facilities Operating Prior to i The NRC has made specific B. The following two candidates January 1,1979." I conclusions on the results related to the involving license conditions or hydrogen rule, and fire protection and The detailed and prescriptive I commitments in many licenses may be technical requirements contained in i ection u der onc5us o ""8"'"""*" *"" ""
eYc ideratIons' replaced with performance-based part 50.4B was amended in 1988 to allow (1) Main steam isolation valve leak q a best-estimate and non prescriptive requirements and supporting regulatory ;
control system per Reg. Guide 1.90, guides.The regulatory guides could (compared to ECCS evaluation models " Design of Main Steam Isolation Valve q contained in appendix K) calculational specifically allow alternative 1.eakage Control Systems for Boiling _
approach for demonstrating that the approaches, although the cunent Water Reactor Plants." The NRC staff detailed technical requirements now in performance criteria in i 50A0 would has already initiated a review to g s
not be exceeded. The NRC has in the eliminate the MSIV leak control syste'ms the regulations could be reflected to 4 past already initiated actions for indicate their continued acceptability. g in UWRs.The completion of this review clarifying to CFR 50.59 and eliminating is pending submittal of a topical report There is considerable uncertainty g-the requirement for MSIV Leakage from the BWRs Owners Group to whether licensees would take advantage Control Systems (see Conclusion B). confirm the fission product hold up and of the flexibility offered by non.
Since the current effort is focused on trapping capability of the main prescriptive regulations, and develop for _
modifications of 10 CFR part 50, the condenser system,if justified, the NRC NRC approval alternative approacher to NRC does not plan any efforts now for anticipates it will eliminate this meet the performance objectives revising Regulatory Guide 1.76. " Design requirement shortly after the submission contained in the revised regulations.
Basis Tornado." The NRC has for the of the topical report. Licensees or industry groups are in a ,
past several years expended resources (2) The allowable containment better position than the NRC to a for clarifying "Important to Safety" in leakage rate utilized in containment determine whether the reduction in 1 the regulations smd a considerable amount of dialogue has occurred testing per appendix ] of to CFR part 50 burdens from such approaches would be '.
may be increased. The NRC has sufficient that this effort would be cost between the NRC, and the industry and initiated a program to update the source beneficial overall. Therefore, prior to q public.The NRC has concluded that term and to decouple siting from design. Initiatin8 a resource-intensive program additional efforts at this time are not As part of this effort, amendments will to modify these regulations, the NRC is j necessary given the history of past be made to 10 CFR parts 50 and 100. The soliciting comments and assurances that ;
efforts. Independent of the studies noted basis for the requirements for the the results of these ef forts will be (
above for eliminating regulatory allowable containment leakage rate is utilized and beneficial The NRC will ( '
requirements that have marginal related to the source term and the also evaluate the feasibility of def'ming importance to safety, the NRC had been radiation dose guidelines conteined in performance-based requirements in taking action to eliminate or relax 10 CFR part 100. Therefore, as part of proposing regulatory initiatives and new ['
regulations (e.g.,10 CFR part 50, this action, the NRC plans to explore the regulations.
6299 r d- * *** /k N
' Prcposed Rules Vol 57. No. 38 g{ '
' Monday, February 24. 1992 For the Nuclear Regulatory Commission. Acoassass: Mall comments to: David L Tres section of the FEDERAL REGISTER Donnie H. Grimsley, Meyer, Chief, Regulatory Publications contsans notices to the putAc of the Dranch Division ot Freedom ot prop and issuance d ruses and Dinctor. Division of freedom of fnformation Information and Publications Services.
regulatona. The purpose of these nobces and Publications Services. Offsce of Office of Administration, U.S. Nnclear b to 9svo interested persons an Administration.
- Regulatory Commission. Washington, y [FR Doc. 92-4174 Filed 2-21-92,8:ss am) DC 20555. Comments may be band.
g g sa . sea coot resoei as delivered to: Room P-223,7920 Norfolk njet Avenue, Bethesda, Maryland, between 10 CFR Chaptof l 7:30 am. and 4:15 pm., Federal NUCLEAR REGULATORY workdays.
COMMISSION Special Review of HRC Regulationa PoA FURTHER INFOMMADON CONTACn FR WW 1 James Conran or Dennis Allison, Office Aotwcy: Nuclear Regulatory for Analysis and Evaluation of lasuance of Quarterty Report on the Commission. " * * " ' **#
Flegulatory Agende Acnoec Request for comments. Regulatory Commission, Washington, DC 20555, (301) 492-9855 or (301) 492-AGENcv: Nuclear Regulatory suuuAny: ne Nuclear Regulatory 4348-Comnission. Commission (NRC)is seeking public commentin connection with a special SUPPLEMENTARY IMPORMAnOsc The AcnotcIssuance of regulatory agenda. Nuclear Regulatory Commission (NRC) review of NRC regulations to determine has directed that existing NRC sUuMARY:The Nuclear Regulatory whether regulatory burdens can be teduced withoutin'an way reducing regulations be reviewed to determine Commission (NRC) has issued the NRC whether regulatory burdens can be Regulatory Agenda for the fourth the protection for pub c health and reduced without in any way reducing quzrter October through December, of safety and the common defense and the protection for public health and 1991.The agenda is issued to provide security.The special review was safety and the common defense and the public with information about NRC's directed by the Commission in a security, Guidance on how the NRC rul: making activilles.The Regulatory memorandum issued to the NRC staff on staff is to proceed in undertaking this Agenda is a quarterly compilation of all February 7,1992.The revPW will be '
effort was provided in a memorandum rules on which the NRC has recently conducted by the NRC Committee to to the staff issued by the Commission on completed action, or has proposed Review Generic Requirements (CRGR).
February 7.1992. The Commission's sction, or is considering action, and of %e CRCR review effort is to be all petitions for rulemaking thet the NRC completedby April 10,1992. memorandum noted:
- on january 28,1992. President Bush issted
- P'" _This request for comments is related to an earlier request Ior comments (wo memoranda relating to regulatory toviews. In the first memorandurn, the Anonesses:A copy of this report. Mpublished in the Federal Register on President requested the Commission and designated NRCRegulatory Agenda i February 4.1992 (57 FR 4166), on the (NUREC-0936) Vol.10, No. 4,18 I results of NRC's continuing,long term g/other work together energy and to streamline environmental duplicative or age available for inspection, and copying for j prograni to identify and eliminate ~ / nconalsant i ngu!= tory nquirements. In the i regulatory requidmentsbf marginal "
a fee, at the Nuclear Regulatory Commission's Public Document Room- saf ety importance. Interested parties , het dkuhe r$ gen s as aside a 2120 L Street NW. (Lower Level), ; may wish to conalder the information in ( 90 day period to evaluate existing regulations Washington, DC. ! the February 4,1992 notice in developing g and programs and to identify and accelerste i action on initiathes that will eliminate any in addition, the U.S. Govemment j a response to this request.The 'special! unnecessary regulatory burden or otherwise Printing Office (GPO) sells the NRC , review by CRCR will draw upon the promote economic growth. New regulations Regulatory Agenda.To purchase it, a [ results of that programland any other are not to tw issued in proposed or final form customer may call (202) 512-2303 or ; relevant prior reviews;identifie_d). during this review period unless certain (202) 512-2249 or write to the DAns: Comment period expires March specified criteria are met:
Superintendent of Documents U.S. 8,1992. To assure timely consideration - While it is not clear that a response by an Government Printing Office. Post Office in the context of the special review of independent regulatory agency is mandatory, Box 37082. Washington DC 20013-7082. the Commission nevertheless believes that it regulations by CRGR. comments' can addnas many aspects and the spirit of FOR FURTHER INFOaM ATION CONTACT: - submilled in response 10 this notice the memoranda without violatma our basic MichaelT.Lesar Chicf. Rules Review must be received by close-of-business statutory naponsibilities.This memorandum Section, Regulatory Pubucations Branch, (COB), on March 6,1992,(Because of the provides guidance on how this will be done.
Division of Freedom of Information and short response time. comments -
Publications Services, Office of submitted in response to this notice that ne Commission's memorandum Administration, U.S. Nuclear Regulatory are received after COB on March 8, directed the NRC Committee on Review 1992, will receive consideration as of Generic Requirements (CRGR) to Commission, Washington, DC 20555, conduct a review of existing NRC Telephone: (301) 492-7758, toll-free comments in response to the February 4 notice,if applicable, and if received regulations to determine whsther number (800) 368-5642.
Dated at Dethesda, Maryland. this 13th day
. before expiration of the comment period regulatory burdens can be reduced without in any way reducing the of February 1991 specified in the February 4 notice.)
l s
6300 Fed:ral Regist:r / Vol. 57, No. 30 / Monday, Febru:ry 24, 1992 / Propos:d Rules protectica of public health and safety 3. Are there likely cand.idates for early PART 1301--PROCEDURES and the common defense and security. reduction or elimination Qat were not identified in the earlier NRC staff study 1.The authwHy chauon for pad m.
The NRC Committee to Review Generic Requirements (CRGR) was referred to in the February 4,1992 subpart A, continues to read as follows:
r.reated in 1981 by the Commission to nouce? Authority: to U AC. an-831dd. 5 U AC.
examine proposed new generic 5s2.
- 4. Have adequate evaluations of requirements and proposed changes to safety importance and regulatory 2. Section 10tyt.3 is added to read as ex.isting requirements for operating burden been completed for any follows:
power reactors, to help assure that NRC identified potential candidates, actions do not impose unnecessary including those identified by the NRC IN3 "8*'"***"0""
ragulatory burdens, Because the CRGR staff in the February 4,1992 notice, or (a) Records responsive to a request and the Commission have carefully any new or different candidates under 5 U.S.C. 552 shall be furnished scrutinized generic regulatory identified by commenters in response to without charge or at a charge reduced requirements promulgated since that this notice 7 below that established under section Urne, the primary focus of the special 1301.2 where TVA determines, based review to be conducted by CRGR will be Dated at Bethesda, Marytand. this rath day upon information provided by a on those NRC regulations promulgated of Februsry,1092. requester in support of a fee waiver prior to the creation of the CRGR, For ne Nuclear Regulatory Commission. request or otherwise made known to particularly those nei forth in 10 CFR Edward L lordan, TVA, that disclosure of the requested 0N information is in the public interest
' P"in conducting this special review, the Durctor. CWice for Analysis and Evaluation because it is likely to contribute ofoperationalDom.
CRGR will use appropriate input from significantly to public understanding of (FR Doc. 92-4248 Fikd 2-21-42, eA5 am]
the public (including the industry and the operations or activities of the environmental groups), the NRC staff, see coon rem government and is not primarily in the and other Federal agencies. This special - commercialinterest of the requester.
review by CRGr vill also draw upon Requests for a waiver or reduction of any relevant p reviews, e g., the NRC TENNESSEE VALLEY AlfmORITY fees, which shall be made at the same program to idenuty and eliminate time as the requests for records, shall be requirements magp,nal to safety.The 18 CFR Part 1301 considered on a case-by. case basis.
results of the NAC progam to identify and eliminate requirements marginal to (b)In order to determine whether the Freedom of Information Act first fee walver requirement is met-l.e.,
safety were described in an earlier cl i th d notice published on February 4.1992. AGENCY: Tennessee VaUey Authority b p mt Individuals who mtend to submit (TVA). because it is hkely to contribute AN Pr posed rule. significantly to public undentanding of o re ulat o b GR shou be a re 6e operati ns w acMbes of the of the information in the February 4
SUMMARY
- The Tennessee Valley notice, and should take into account that government-TVA ahall consider the Authority is proposing to amend its following four factors in sequence:
information in developing commeats for regulations to provide procedures for (1) The sub}ect of the request:
the special review, requesting a waiver or reduction of fees Whether the subject of the requested As a part of the special review by CRCR, a public meeting will be held in f r rec rds requested through the records concerns "the operations or the Washington, DC area; that meeting Rudom oMnfmaWn Act acmes of de govermnende is tentatively scheduled for March 27, DATES: Comments must be received by subject natter of the requested records, 1992. Further details regarding this March 25,1W2. In the context of the request, must ocatio a ndaelc) ill e ub!ise[1 in a subsequent notice prior to the 8 A s s: Commts shmdd be set t Linda F. BWns Tennesm VaUey h o'ns or a Government-with a connection that is v es te ederal AuthwHy. M Market Street (EB 4B), direct and clear, not remote or meeting, as those details become Chattanooga,TN 37402-M. As a attenuated. Furthermore, the records available cnnmdmce to commuters. TVA wiU Interested parties are requested to must be sought for their informative accept public comments transmitted by value with respect to those government I provide comment on any consideration that bears significantly on the stated f8C8 ( N 158C , '3' operations or activities; a request for objectives of the special CRCR review. telephone number of the FAX receiver is access to records for their intrinsic
. (615) 751-3010. Receipt of FAA informational content alone will not l In doing so, commenters are requested to address the foMowing questions (in trhaamittals will not be acknowledged. satisfy this threshold consideration.
I addition to the specific questions posed roR ruRTHe>i twovtu ATiow cowtAcT: p) The informational value of the i for comment in the February 4,1992, Linda E. Blevins, (015) 751-2524. information to be disclosed: Whether l
notice, as appropriate, and to the extend sVPPWENTARY INFORMATIOsc osun is %eh M condM M possibk at this time): an understanding of government l
1,Is it feasible far the NRC to 1Jst of Subjects in 18 CFR Part 1301 operations or activities. The disclosable l consider early reduction or elimination , portions of the requested records must Admm. istrative practice and be meaningfuUy informative on specific I of any existing requirements?
l 2. Are there likely candidates for early procedure, Freedom of information government operations or activitics in l
reduction or elimination identified in the Privacy Act, Sunshine Art order to hold potential for contributicg l earlier NRC staff study referred to in the For the reasons set forth in the to increased public understanding of February 4.1992 notice? If so, what preamble, title 18, chapter X111 of the those operations and activities. The l should be the priority (sequence and Code of Federal Regulations is proposed disclosure of information that already is l schedule) for their treatment? to be amended as follows: in the public domain, in either a l
au
, #m/W e VM 27187 Proposed Rules ~ a+'-
Vnt. 57. No.118 Thursday,. june 18.199'.
Tres secton of the FEDERAL REGISTER Attention: Docketing and Service contains notces to the putAc of the Branch. their review, the CRGR drew upon proposed rasuance of rules and previous studies and solicited comments regulations. The purpose of these notsces Deliver comments to One White Flint from the public, other Federal agencies, es to gue enterested persons an North.11555 Rockville Pike. Rockville, and the Commission's staff. A Federal 5 MD. between the hours of 7:30 a.m. and Register Notice was published on 4.15 p.m. on weekdays.
ng pnor to the ft final ru e February 24.1992 (
Copies of the comments received, as public comments m, 57 FR 6299) seeking
.__ _'_ _ _ _ _ well as other documents referenced in connection with the review, and a second Federal Register th a package may be examined at the NUCLEAR REGULATORY Notice on March 23,1992 (57 FR 9985)
COMMISSION NRC Public Document Room. 2120 L discussed likely or possible candidates Street NW. (Lower Level), Washington, for action, based on CRGR's preliminary 10 CFR parts 20 and 50 ***"" * * * * " ^" *** "
FOR FURTHER INFORMATION CONTACT: pubile meeting was held on March u.
RIN 3150-AE30 Mr. C.W. Nilsen, telephone (301) 492- 1992, in Bethesda. M.aryland.
3834 or Mr. Joseph I. Mate, telephone After completing their special review, Reducing the Regulatory Burden on (301) 492-3795. Office of Nuclear Nuclear Licensees the CRGR recommended revising the Regulatory Research, U.S. Nuclear regulations in eight areas. The suggested Regulatory Commission, Washington. revisions met the criteria for reducing ACENcY: Nuclear Regulatory DC 20555.
Commission. the burden without in any way reducing SUPPt.EMENTARY INFORM ATION: the protection for public health and Action: Proposed rule.
Background
u ty suuuanv: The Nuclear Regulatory On January 28,1992. the President of Commission (NRC)is proposing to T)e Chairman of the NRC sent a amend its regulations to reduce the the United States signed a memorandum report to the President of the United addressed to selected Federal Agency States on April 27,1992. which _
regulatory burden on nuclear licensees. Ifeads who are concerned with energy This proposal reflects an initiative production and protection of the summarized NRC's activities conceming undertaken by the Commission in order environment. The memorandum the President's directive and advised the to respond to a Presidential President that NRC would pursue the requested the addressees work together memorando requesting that selected to streamline the regulatory process and CRGR's recommendations expeditiously Federal agencies review and modify ensure that the regulatory community is within the framework of the procedures regulations that will reduce the burden not subject to duplicative or inconsistent and practices for rulemaking.
of governmectal regulation to ensure regulation. On June 1,1992, in response to a that the regulated community is not On lanuary 28.1992, the President memorandum from the President of the subiect to duphcative or inconsistent United States. dated April 29,1992, the signed a second memorandum entitled regulation. In that spirit the NRC's " Reducing the Burden of Government Commission directed the staff to strive Committee to Review Generic Regula tion." This memorandum. which to publish the proposed rule changes in Requirements (CRGR) identified was sent to all Federal agencies set the eight areas previously identified by regulations in eight areas that could be a special review group in the Federal aside a 9& day period to review and Register for comment as soon as amended to reduce the regulatory evaluate existing regulations and burden on hcensees without in any way programs and to identify and accelerate possible, but not later than June 15.1992, reduci:ig the protection for the public with a view to issuing the sinei rules in action on initiatives that will eliminate the Federal Register no later than health and safety or the common any unnecessary regulatory burden. At August 2% 1992.
defense and security. The proposed the end of the review period, agencies -
amendments address the frequency of were to submit a written report reporting information and emergency indacating the regulatory changes core cooling system analysis for The Nuclear Regulatory Commission recommended or made during the is proposing amendments to 10 CFR operating power reactors, clarify and update regulations affecting certain review period and the potential savings parts 20 and 50 to implement the eight as a result of the changes.
matenal bcensees, and remove In response to the Presidential proposed actions identified in the report unnecessary regulatory requirements, memoranda, the Commission decided on "Special Review of Existing NRC Regulations" that was completed by the CATit:The comment period expires on that it would be consistent with its CRGR and that was attached to July 20.1992. Comments received after policy to monitor the impact of Chairman Selin's letter to the White this date will be considered if it is complying with NRC regulations by its House dated April 27,1992. The actions practicable to do so, but the NRC is able hcensees to instruct the Committee to proposed to be amended would not to ensure consideration only for , Review Generic Requirements (CRGR) reduce the NRC's protection of the comments received on or before this to review existing NRC regulations to public health and safety or the common da te. determine whether regulatory burdens defense and security.
can be reduced without in any way ADOMESSES: Mail written comments to: During the special review of existing .
reducing the protection for the public NRC regulations, some comments were Secretary, U.S. Nuclear Regulatory health and safety and the common Commission. Washington, DC 20555 received which indicated that adequate defense and security. In accomplishing time should be allowed for public
, 27188 FedIr:1 Registar / Vol. 57. No.118 / Thursday, June 18. 1992 / Proposed Rules comment or. any proposed rule changes ( Use of fuel With Zirconium.Bosed administered radioactive saaterials who A thirty-day comment period is being _ (Other Than Zircoloy) Clodding (10 CFR might otherwise be released from provided. 50.44 Sa4& ond Appendix K to Port 50) confinement under the provisions of10
- 1. Frequency of fina/ Sofety Analysis This proposed action would revise the CFR 35.75. '.
Report (FSAR) Updates (10 CFR ba71) acceptance critaria Ln 10 CW 5044 and h enumated sa%s to Mnun is 50.46. Part 50, relating to evaluations of $300.000 for elimination of the need for This proposed action would provide emergency core mohng systems and Posting.
licensees with an option from the combustible gas control applicable to EnvironmentalImpe Cateprical current requirements for the annual aircaloy clad fuel to include ZIR1D clad n ,4,,a updating of the Fiaal Safety Analysis fuel This mvision to include ZIRID as Report (FSAR). In ben of an annual an acceptable drconium based chddmg The NRC determined that the submission, licenaces awy choose to m'aterial with drceloy will reduce the proposed regulation is the type of action provide the requimd Wiformation once licensee burden but will not reduce the described in categorical exclusions 10 per each refuelmg outege. According to protection of the pubhc health or safety. CFR 51.22(c( (2) and (3). brefore, the proposed revision. epdates to the The NRC will addrus, thronph an neither an environmentalimpact PSAR can be submitted 6 months after appropriate separate rulemaking, the statement nor en ennronmental ,
each refuehng outage. pn ~ided the use of other similar F.irconium based assessment has been prepared for this interval between esecessive updates to cladding materials when all of the proposed r. gulation.
the PSAR doeg not exceed 24 months. neoneary sakty evaluates ice thm Paperwork Reduction Act Statement This proposed action does not affect the matenah have been completed.
substana of FSAR updates. The estimated sevmgs for ensninsting This proposed rule amends the need to process recurrmg informatim nn!!eian mquimmenta that ne estimated savmgs for this action. exemptions to the regulations is based are subject to the Paperwork Reduction assuming an average remaining plant on six plants per year requesting the see Act of 1980 (44 U.S.C. 3501 et, seq). This life of 28 years. is $11.100.000 for of ZIRI,0 clad fuel over the next 8 years. rule has been submitted to the OfSce of heensees and $91a000 for the NRC. W estimated savings to the bcensees la Management and Budget for review and
- 2. Annua / Design Gange Reports (10 $2,000.000 per year and the savings to approval of the paperwork the NRC is $50.000 per year. requireman's CFR 50.59)
.. 5. Fwquency of Radiologi & reductka d the pobhc winmani This proposed action would revise the Reports (10 CIR 50.xo', calEH1uentburden for this collection of informata requirements for the annual submissim is estimaled to average 208 hours0.00241 days <br />0.0578 hours <br />3.439153e-4 weeks <br />7.9144e-5 months <br /> per of reports for facihty changes under his proposed action would reduce response for operatlag power reectors i 50.59 (Chacges, testa, and the requirements for the submission of and 1 hoar per response for certain expenments) to conform with the nports cecerning the qmtity of materials bcensees,incladmg the time proposed change for updating the PSAR principal nuclides released to for reviewing instructans. searching (see item 1). This proposed action does unrestricted areas m liquid and gaseous existing data sources, gathering and not affect the substance of the eInuents Imm semiannuaDy to annuaDy. maintaining the data needed, and e estimated savings for this action, evaluation or the documentanon compleug and revieMng h couecum reqmred for i 50.59 type changes, it only assumbg an amage remaining plant of informarim. Send comments affects the interval for submissmn of the e ad 000 e C.
"8" * *" ' ""Y informaten to NRC. lastead of othee aspect of this collectma of submittmg the mformation annually, the & Receipt Bock ofProcessedIow Level informaten including suggestions on information could be submitted on a IVcste f10 CTR 50,54/ this reduced burden to the Informauon refuelma cycle, provided the interval This action is addressed in a separate and Records Management Branch between successive reports does not rulemaking. For additional information (MNBB-7714). U.S. Nuclear Regulatory exceed 24 months. on this action, see the proposed rule Commisa4an. Washington, DC 20555;
& estimated savings for this actmn, entitled " Receipt of Byproduct and and to the Desk OfScer. Mce of assuming en average remaining plant Special Nuclear Material" pubhshed in Inf raation and Regulatory Affairs, life of 20 years,is $1.500.000 for the Federal Register on April 24,19% (57 NEOB-3019 (315M011. 3150-0014).
hcensees and $400.000 for the NRC. FR 15034). OfLce d Management and Budget.
Washington. DC 20503,
- 3. Elimination ofl!nnecessory Event 7. Contaminokon Manitorim of Reports (10 CFR 5012 and5023) Packcses (10 CFR 20.19x(b)) R*%*I*'or7 AanITsis This proposed action would clarify the The Nuclear Regulatory Commission The proposed revis.wn concerning regulatwns and reduce the monitoring is propoemg to amend its regulations to event reporting is covered in a separate reduce the regulatory burden on nuclear rulemaking action For additional details burden fcr packages containing on this action, please see the radioact:ye materialin the form of a gas licensees.This action reDects an or in a special form as defined in 10 CFR initiative on the part of the NRC and Commission Paper. SECW92-148, dated responds to the spirit of President Bush's 71.4.
April 22,1902, entitled " Proposed Mmor The estunated savings to licensees is memoranda of January 28,1992, which Rulemaking to Modify Operating Power $tE4 milhon. requested that selected Federal agencies -
Reactors Event ReportmE review and modify regulations that will Requtrements? This proposed rule wiH a Postm.g of Room Occupe.e d by reduce the burden of governmental be announced separately and details Diagnostic Nuclect Medicine Podents l regulation to ensure that the regulated will be available in the NRC Pahuc (10 CFR 20J9tu/b)) community is not subject to duplicative Document Room. 2120 L Street. NW. The propoeed rmsion wouki nduce or frmonistent regulation. ne Nuclear (Lower levelt Washmgton. DC 20555, in the posting requirements for rooms in Regulatory Commission has identirmi late June 19G2. hospitals occupeed by patents eight proposed rulemaking actions that l
l
Feden1 R: gist:r / Vol. S7. No.1181 Thursday. June 18, 1992 ] Proposed Rtiles -
27189
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would eliminate duplicative or " Acceptance For Referencing OTTopical Beckfit Analysis inconsistent regulatory requirements. Report WCAp-1281D " Vantage + Fuel The WRC has determined that the Six of the proposed actions are includer' Assembly Reference Core Report"(TAC backfit rule 10 CFR 50:109, does not in this package.Two of the eight action. NO. 7725a)."
are being processed as separate apply to this proposed regulation and, The cost savings to both the licensee therefore, that a backfit analysis is not rulemalngs and are not discussed here-population and the NRC appear below. required for this proposed rule, because The actions are as follows:
- 1. Frequency of Fmal Safety Analysis Dollst impacts are expressed on a 1992 these amendments do not involve any Report Updatee--to change the present worth basis in 1992 dollars. The provisions that would impose backfits frequency of safety analysis report basis for these cost estimates is as defined in 10 CFR 50.109(a)(1).
updates from one per year to once per available in a report entided " Analyses Ust of Subjects i refueling cycle (10 CFR 50.71h f Potendal Cost Sad. ngs for Selected 2< Annual Design Change Reporte---to NRC Reforms dated June 10c1992." 10 CFR Port 20 change the frequency of reportmg Byproduct material, Cnminal penalty, changes at power reactors from once per TOTAL Discounted W Cost sam.Gs As- Ucensed material. Nuclear materials.
year to once per refueling cycle (10 CFR socrATED WTTH PROPOSED REGuLA- Nuclear power plants and reactors.
Sa59(b)l: Tony REvtstons (1992 8 sN MILuons) Occupational safety and health.
- 3. Elimination of urmecessary event Packaging and containers. Radiation report >-separate rulemaking: negutatory rwson lLcensees l NRc protectwn, Reportmg and recordkeeping
- 4. Use of fuel and Zirconium-Based -
Cladd2ng-to ehminate the need to ;
requirements Source matenal.Speciel ne t obtain exemptions m order m use ne 2- _ . _d it t l o sto nuclear material. Waste treatment and 15- o Co disposal certain fuel claddmg matenals not ne a . a WA ! " NrA presently addressed in the regulations "" 4 - 2o o eso 70 CFR Port 50 (10 CFR 50.44,10 CFR 50 46 and 10 CFR part 50. appenda K);
N w _. . .._
2,8 ce i u _ o u
too Cnminal Antitrust, dassified informa tion, penalty. Fire protect on. i
- 5. Frequency of Radiological Efnaent nm a .
Reports--to change the frequency of _.$ c 3 l a -o too incorporation by reference.
Intergovernmentalrelations Nuclear reports on power reactor radmlogical Nm " **w* * *nd '*as c.munt rm os power plants and reactors. Radiation effluents from twice per year to once per a year (10 CFR 50.36a): not .3 cat-m .wns protection. Reactor siting enteria,
" news cost sacrys roomet a cost m** Reporting and recordkeepirm
- 6. Receipt Back of Processed Low '"
requirements.
Level Waste-separate rulemaking
' The NRC concludes that each of these For reasons set out in thmteamb!e P el mt c proposed regulatory revisions is justified and under the authority of t!e Aton:ic provistons for contamination morutonng due to the net cost saviangs that would Energy Act of 1954. as amended. the of packages containing certain types of accrue without compromisirs pubhc Energy Reorganization Act (,f19"t as radioactive material (to CFR 20.1906)b)l: health and safety. amended, and 5 U.S C. 553, the NRC is D agno ti uc ear dc Pat nt s Regulatory Flexibility Certification end ents o 10 p rt 0 and 50.
to include exceptions for posting Based on the information available at requirements for rooms in hospitals for PART 20-- STANDARDS FOli this stage of the rulemaking proceeding patients admmsitered and in accordance with the Ri gulatory PROTECTION AGAINST RADIATION radiopharmaceutcals for diagnostic Flexibility Act. 5 U.S.C. 605(b). the NRC 1. The authority citation for part 20 tests (10 CFR 00.1903(b)). certifies that,if promulgated. these rules continues to tsad as follows:
Each of these proposed. actions . will not have a significant adverse considers the elimiantion or relaratton Authonty: Secs. 53. 63. es. 81.103.104.1m.
economic impact on a. substantial 181 186. tia S tat. 930, 933. 935. 936. 937. 948 of regulatory requirements currently imposed on NRC licenwes. Actions L 1. number of small entities. The NRC has us. Ess. as amended (42 U.S.C. 20~3. 20a3.
adoptad size standards that classify a 2095.211L 2133,2134. 2201. =32. 236) secs
- 4. and 5 would affect power reactor hcensees, whereas Actions " and 8 a s 11 b s s 20t as amended. 202. re 88 Stat.1242 as amended /1244.1240 (42 U.S C. 564L 5842, would affect instenels licensees For 9 a 58481 each regulatory action the staff has receipts do not exceed 53,5 milhon, or as Section m40s also issued under secs 135, evaluated the health and eafety a small governmental,unsdiction l whose 141. Pub. L 9N25,90 Stat. 032. 2241 (42 implications and the cost impacts strpportmg population is 50.000 or less. LLS C.10155.10181).
relative to a status quo alternative.The The first six issues effect 112 power For the purposos cfg 233. 66 Stat. 958. as staff imda that each would result m e reac. tor licensees. The cornpanies that amended (42 U.S ._, 3 Ii 20.101 mina reduction in burden without reducing protection of the public health and own these plants do not fall within the scope of the definition of "small gg *@gh2[g{', 2 205.
safety. The public health and safety entities" set forth in the Regulatery - m2a7 mum mmnd m306.
m1102, 201201-m120s. 20a206. 20a20".
determination appears in a document Flextbihty Act or the NRC Size m12m. 20 tact m1302. 20a$c1.20.1501 entitled. " Report on Special Review of Standards. The remaining two issues 201ect tal and (dl. 201002, m1ec120.171.
Existing NRC Regulations by the involve the relaxation of requirements mim. 201801. 201802, m19et(al. m1901 Committee to Ravtew Genenc which will affect apprmtmately 10.000 2 alm m1906,2a2mt m2 col m2m1 Requirements" issued on Apn113,1992. matenalIrcensees. Although many of 20
- ga )m ut-Additionally, an analysis of the safety these hcenees may be small entities, smphcations of Action 3 is available in a there should be no adverse impact on issued under eec. imlb). se Stat. Na as U.S NRC Letter-to Westinghouse amended f42 UAC. 2201(b))- I m2106(d) is thew emellIreensee because the issued under the Pnvacy Att of 19 4. Pub L Corporation dated July 1.1991, entitled regulations are being relaxed.
4 93-579. 5 U.S C 552a. and I( 20.102. M103(e). l
pi . ..
27190 Federal Register / Vol. 57. No.118 / Thursday. June 18. 1992 / Proposed Rules
__a to 40920 40" 20 408[b) 20 409,201)O2(a)(2) 954. 955. 956. as amended. sec. 234,63 Stat these reports and any additional rnd 14L 201204:c) 201206 fr) and (ht 1244 es amended 142 U.S C. 2132. 2133. nR information the Commission may obMn mm4(c)t4L 201905 (cl and dt 20.20nsic t a n ro1. r32. 2233. r36. 22J9. 2282L srcs from the hcensee or others. the 20.200t> lbHdi 2n ac1-207.103. 20 nw bi- 2e1, en amended. 202,2n6 M Stat.1242. as (dL 20 mosm 2ma and 7n201-20 ra7 a+c ammded. 1244 1246.(42 U S C SMi SM2.
Commission may require the hcensee to issued imder sec.1Clo,4 S:st 95o es SM0) take action as the Commission deems amtrde d !42 LJ b C. 2 :01[og Settwn 50 7 also issued under FN.b L 99 appmpnate.
001. sec 10. 92 Stat. 2951 (42 U S C. Sv 1).
- 2. Section 20.1903 is amended b) hn 5010 also issued under secs.101.1e5, revising paragraph (b) to read es 6. Section 50 44 is amended by 6e Stat. 9m 955, as amended (42 U S C. n31.
foHow5: revising the introductory text of 22351 sec.102. Pub. L 91-190. 83 Stat. 853 (42 parugtaphs (a) (b), and ic)(1) to read as i 20 1903 Enceptions to posting U.S C. 4332} Sections 50.13. 50 54tdd) and 50103 also issued under sec.108. 66 Stat. 939. o ows:
W"""t ** as ar7 ended (42 U.S C. 213a). Sect;oc.s m21
- * * *
- l 50.44 Standards for combustitue gas 50 35. 50 55. and 50.56 also issued under sec.
(b) Rooms or other areas in hospitats control system bght-water cooled power 185. ce Stat. 955 (42 U S.C. 2235) Sections reactors.
that are occupied by patients are not 5c 33a So.55a and Appenda Q also issued required to be posted with caution signs under sec.102. Pub. L 91-190,83 Stat. 853 (42 (a) Each boiling or pressurizeg hgh1 pursuant to i 20.1902 pmvided that the U.S C 43r). Sections 50.34 and 50 54 also water nuclear power reactor fueled with patient could be released from issued under sec. 204. 88 Stat 1245 (42 U.S C oxide pellets within cylindrical zircaloy confmement pursuant to i 35 75 of th!s W Secdons 50.m 50 91. and m92 also or ZIRLO cladding, shall, as provided m chapter. issued under Pub. L 97-415. 90 Stat 20 3 (42 paragraphs (b) through (d) of this U S C 2239L Section 50.78 also issued under section, include means for control of a . * *
- sec.122. M Stat 939 (42 U.S C. n52) Sections
- 3. Section 20.19n6 is amended by su d un rsec ea hydrogen gas that may be generated.
revising paragraph (b) to read as w]>{w al a , followmg a postulated loss of. coolant I"U *' Appendb F also issued under sec.187,68 accident (LOCA). by-Stat 955 (42 U S.C. 2237) * * * *
- I 20.1906 Procedure s for receiving and F or the purposes of sec. 223,68 Stat. 9m as (b) Each boiling or pressurized light.
openwg packages. amended (42 0.S C 2273) Il 50 5. 50 46(a) water nuclear power r ctor fueled with and (bt and 50.54(c) are issued under net.
161b. 6A Stat. 948, as amended (42 U.S C. oxide pellets within cylindrical zircaloy (b) Each hcensee shall- 2mL 1150 5, m7ta) 5010(aHc) 50 M (a) ' ZlRLO claddmg must be provided (1) Momtor the external surfaces of a and let 50 44(aHc). 50 46 (al and (bl. with the capability for-labeled 8* package for radioactn e 50 47tb). 50 4a ta), (c). td). a nd le). 50 49ial. * * * *
- contamination unless the packaFe mMial OL OH11. (1Hnt (p). Iqt (it (v). and contains only radioactive materia!in the t> L So S5(It 50 55atat (cHe). (gt and (h.
(c)(1) Each boihng or pressurized hght-form of a gas or in special form as mS9(c). 50 emat 50mtbh 50 64(bt 50 61 and water nuclear power reactor fueled with oxide pellets within cylindrical zircalcy defmed m to CFR 714.
(2) Momtor the external surfaces of a
{%',",
- n ed U5C" d"b) nY or ZlRLO cladding,it must be shown labeled package for radiation lesels il 50 49 (dL (h) and OL 50 M (*). Ir) Ibb). that during the time period followmg a unless the package contams quantities acc). and (ddh so 55ie). 50 59f bL 50 ettbl. postulated LOCA, but prior to effective of radioactive matenal that are less than 50Mb) m70tal. 50.71(*Hc) and (e). so 72(at operation of the combustible gas control son (a) and (bl. 50 74. 278. and 50 90 are system, either; or equal to the Type A quantity. as issued under sec telo, sa Stat. 950 as . . . .
- defmed m i 714 and Appendix A to part arnended (42 U S C. 22011oD 71 of this chapter, and the radioactne 7. Section 50.46 is amended by
- 5. Section 50 36a is amended by revising para 61aph (a)(1)(i) to read as materialis in tbc form of a pas or in special form as defmed m to CFR 714; revising paragraph (a)(2) to read as follows; goggwy and I 50.46 Acceptance criteria for emergency (3) Monitor all packaFes known to i 50.36a TecfWest specmcatw>ns on core cooling systems for hgnt water contain radioactive matenal for effluents from nuciesr power reactors. nuclear power reactors.
radioactive contammation and radiation (a) * * * (a)(1)(i) Each bolhng or pressurized levels if the package has evidence of potennal contammation. such as (2) Each hcensee shall submit a report light-water nuclear power reactor fueled to the Commission annually that with uranium oxide pellets within packages that are crushed. wet. cr specif,es the quantity of each of the damaged. cylindrical Zircaloy or ZlRLO claddmg pnncipal radionuchdes released to must be provided with an emergency unrestncted areas in hquid and in core cochng system (ECCS) that must be gaseous effluents dunng the previous 12 designed so that its calculated cochng PART 50-DOMESTIC LICENSING OF months of operation. includmg any other performance following postulated loso PRODUCTION AND LTTILIZATION information as may be required by the FACILITIES of-coolant accidents conforms to the Commission to estimate maximum criteria set forth in paragraph (b) of this 4.The authonty citat on for part 50 potential amiual radiation doses to the section. ECCS coohng performance must contmues to read as follows: pubhc resultmg from einuent releases. be calculated in accordance with an The report must be submitted as acceptable evaluation model and must Authority seca 102.103 in los act.1a2.
183.186.189. 6e siat 936. 9r. 9m t.48,951 specthed in i 50.4, and the time between be calculated for a number of postulated Submission of the reports must be no loss-of coolant accidents of different longer than 12 months. If quantities of sizes. locations. and other properties radioactive matenals released dunng sufficient to provide assurance that the
%w mih . p.e.o.cnv. wha. i ),now it the reportmg period are significantly most servere postulated loss.of-coolant ErNsh$.IInI$1 a 9 l . abobe design ob ectives, the report must 8CCidents are calculated. Except as m sw cover this specihcally. On the b. sis of provided in paragraph (a)(1)(ii) of this
i ,.
Federal Register / Vol. 57. No.118 / Thursday,roposed June Ruloein 1992 / P
{~
. - . - - - '2N 91
) section. the evaluation model must I Include suff cient supportmg -
justification to show that the analytical DEPARTMENT OF TRANSPORTATION specified above. All communications technique reahstically describes the Fedenal Aviation Administration received on or before the closin behavtor of the reactor system during 14 CFR Part 39 for comments. epecified above, will gbedate loss.of-coolant accident. Comparisons to considered before taktng action on the apphcable expenmental data must be IDocht No.12-NM-tot-AD) proposed rule. The proposals contained n ade and uncertamties in the analysi. in this notice may be changed in hght of
- method and input must be identified end Airworthiness Directives; AirDvsthe comments receiv ed.
assessed so that the uncertainty in the industite ntodel A310 Series Airplanes Comments are specifically invited on the overall tegulatory, economic, calculated results can be estimated. This ActNCv: Federal Aviation '"*I' uncertamty must be accounted for, so Adminmration DOT- "*'"t"I' ""d '"'#EY "'E##t' f the proposed rule. All commer.ts that, when the calculated ECCS cooling Acm N t ce f pr pwd rulemakm8 submitted will be available, both before performance is compared to the critena (NPRMI-set forth in paragraph (b) ut this section, and after the closing date for comments.
there is high level of probabihty that the suseuaRv: This document proposes the in the Rules Docket for cumination by adoption of a new cirworthmesa interusted pers ns. A report criteria would not be exceeded. summarizing each FAA pubhc contact Appenda K. part IL Required direttive ( Atl) that is applicable to Documentation. sets forth the Airbus Industrie Model A310 senes concerned with the substance of this documentation requiremenu for each airplanes. This proposal would require { p sat will be filed in the Rules esaluation model. conducting an integnty test to detect
. . . , , corrosma in the wmg tip brake , Commenters wishing the FAA to solenoids. and replacement. if acknowledge receipt of their comments
- 8. Section 50.59 is amended by submitted in response to this notice revisin necessary. This proposal is prompted by must submit a self addressed. stamped fouow g: paragraph (b)(2) to read as severalincidents in which wing tip brake sohmmde faned as a resultpof stcard on which the following g 50.59 corrosion in the solenoid cons. The statement is made:"Lommenta to chansu, tests, and expertments, actions specified by the propu*ed AD D cket Number 92-NM-101-AD." The are intended to prevent wing tip brake postcard will be date stamped and (b) * *
- valve failure, which could lead to returned to the commenter.
reduced controllabihty of the artplane. Availability of NPRMa (2) The licenace shall subm!t. as oAves specified in 150 4. a report containing a August 4.1W2. Commenu must be received by bnef description of any changes, tests. Np i py his a t est t und expenments. mcludmg a summsty Aooatsses: Submit comments m FAA. Transport Airplane Directorate, of the safety evaluation of each. The triphcate to the Federal Aviatmn report may be submitted annually or Administra tmn (FAA). Transport ANM-103. AttentionnRules Docket No.
along with the PSAR updates as 92-NM-101-AD 1001 Lind Avenue SW.,
Airplane Directorate. ANM-103, Renton. Washington 98055-4050.
required by 150?t(e). or at such shorter Attention: Rules Docket No. 92-NM. Discussion mtervals as may be specified in the 101-AD.1001 Lind Avenue SWs Renton-license, Washmgton 98055-4056. Corgments may The Directmn Gnn6 al de TAviation
. . . be inspected at this locatwn between 9 Cwile (DGAC)~which la the
- 9. Section 50J1 ts amended by a.m. and 2 p.m., Monday through Friday. airworthinees authority for France.
esceptfederal hohdays recently notified the FAA that an unsafe evising paragraph (ell 4) to rend as 0g *8 -
The service mformation referenced in conditmn may eMat on Airbus Industne the proposed rule may be obtemed from Model A310 series airplanes. The DCAC 50.71 Airbus Industne Airbus Support g 40etntvoence ci recortis. meMng o1 Dwision Avenue Didaer Daurat. advisee3W00, that there have been several incidense in which wmg ttp breke
, , , , Blagnac. F rance. This information may solenoids failed as a result of corrosion (e) , , , be exammed at the FAA. Transport in the solenoid. cods, Sulmequent Airplane Direct 6. rate.1001 Lind Avenueinspections detected corrosion in the (4) Subsequent revisions must be fdedSW., Renton, Washmaton 98055-4058- coils leading to open circuit or high
.nuaBy or 8 months after each FOR FUMTHER tNFOas4 ATION CO*rrACY;restatance fuehng outage provided the intervel value. The corrosion was Mr. Creg Holt. Standardization Branch, apparently caused by an electrolytic tween successive updates to the ANM-113 FAA. Transport Airplane phenomenon brought about by ingress of AR does not exceeed 24 months.Directorate.1001 The Lmd Avenue SW.. hydrauhc fluid conung in contact with isions must reflect au changes up to a Renton, Washington 98055-4050. the coil which is under continuous simum of 8 monthe pnar to the date telephone (200) 22M104. fax (2001227- monitonng current. Reduced 1320.
fihng. controBability of the airplane could SUPPLEMINTARY MWOAs#A7FON: occur if both solenoida fitted on one ated at Rockvd6e. Ma*yl.md. thts tith day wing tip bruke are inoperative and if ang 2ng this failure is combmed with a flap or Interested persons are mvited to slat anymmetry occtrrnna due to a n the Leiear Repletory Commswm
.e R Tsyor, participate m the makmg of the transmissian dulconnection.
proposed rule by submntmg such Airbus industrie hus issued Service ura, p.waar re og, rat ** wntien data, views, or argumenu na flulletin A310-07-2042. Revision L dated Suc. 9244r0 Ned 6-t &-9.:. tH5 arn! they may desire. Communicationa shall December 1L 19A6. which describes com vese ous identify the Rutus Docket number and procedures for conducting repetitive be submitted in trtphcete to the address integrtty teets of the solenoids to detect corrosion, and replacemertt, if w '.
Mll+
27394 Federcl Register / Vol. 57. No.119 / Friday, lung 19, 1992 / Proposed Rules I
!. all ap$licants.This trade. item cost carts: Cynment period expires August analysis of reported events. no NRC breakdown must be updated just prior to loan 18,1992. revised 10 CFR 50.72 to clarify reporting P.* . . .
Apossesses: Mail comments to: Devid L criteria and require early reports on only
- 8. lf more than 12 months have transpired Meyer. Chief, Rules and Directives those matters that are relevant to the since the applicant submitted the market Review Branch, Division of Freedom of exercise fo the Commission's analysis, the State Director may require a information and Publications Services, responsibilities. nc redslon to 10 CFR new one if he/she determines it necessary- Office of Administration, U.S. Nuclear 60.72 also made it consistent with to
- * * * *
- CFR 50.73. .md, therefore, most events Regidatory Commission. Washington, LaVame Ausman, DC 20555. Comments may be hand promptly reported under to CFR 50.72 Administrotor, farmen Home delivered to room P-223,7920 Norfolk also require a detailed followup report Adinnustration. Avenue, Bethedsa, Maryland, between under 10 CFR 50.73.
Dated: April 28,1992. h30 a.m. and 4:15 p.m., Federal The folloving activities of the NRC (FR Doc. 92-14277 Filed 6-16-e:; a 45 am) workdays. also pertain h reporting requirements in sees coot uvoan-= Poft PUftTHER INFoRW ADON C0sfrACT: the rules or to the interpretation of these James Shapaker, Division of Operational rules:
NUCLEAR REGULATORY Events Assessment Office of Nuclear in the fall of 1989, the h7C staff COMMISSION Reactor Regulation. U.S. Nuclear surveyed personnel from 13 nuclear 10 CFR Chapter i Regulatory Commission. Washington, power utilities to obtain their views on DC 20555, (301) 5061151. the effect of NRC regulatory activities Rsview of Reactor Uconsee Reporting SUPPLEMENTARY pfPOftssADOsc on the safe operation of nuclear plants.
- The NRC has recently revised or De staff documented this survey in AoENcv: Nuclear Regulatory initially promulgated a number of the NUREG-1395," Industry perceptions of Commission. regulations that contain reporting the Impact of the U.S. Nuclear ACDost Request for public comment. requirements for power reactor Regulatory Commissioin on Nuclear Power Plant Activities," issued in draft sumuARY:The U.S. Nuclear Regulatory licensees. In the process of conducting these rulemaking activities, the b Mad two. Mon & %pating Commission (NRC) staffis seekin Events," of draft NUREG-1395 included public comment in connection wit a regulations were ublished in the review of the reporting requirements for Federal Register r public comment and the industry's comments on reporting reviewed by the Committee to Review required by 10 CFR 50.72 and to CFR power reactor licensees appearing in Generic Requirements (CRGR). Sa73.
Title 10 of the Code of Federal Specifically, the NRC recently in 1990, the NRC sponsored four Regulations (10 CFR). Chapter I-.
completed the following rulemaking regional workshops to discuss the Nuclear Regulatory Commission, NRC guidance docuraents (NUREGS, activities:
industry's concerns on the reportmg of Regulatory Guides, or generic letters) 1. Revised 10 CFR part 20, " Standards events.%e NRC staff determined that it that interpret the reporting requirements for Protection Against Radiation,"(56 should clarify 10 CFR 50.72 and 10 CFR contained in the regulations, and FR 23360; May 21.1991). Shortly 50.73 to further improve their usefulness reporting requirements for power thereafter, the NRC revised 10 CFR part and quality, and to improve the reactor hcensees contained in license 20, in part, to delete certain event threshold of reporting. On October 7, documents such as Technical reporting requirements dealing with the 1991, the NRC staff issued a Federal Specifications.This review is being loss of facility operation and the cost of Register notice (56 FR 50598) requesting conducted in response to a request from incurred damage for events involving public comments on a draft of Revision the Chairman that was forwarded to the byproduct, source, or special nuclear 1 to NUREG-1022. " Event Reporting NRC staff on january 16,1992.The NRC meterial (50 FR 40757; August 16,1991). Systems (10 CFR 50.72 and 50.73),
staffis reviewing these requirements 2. Revised 10 CFR part 21. " Reporting Clarification of NRC Systems and and associated guidance to determine if of Defects and Noncompliance," and to Cuidelines for Reporting." The proposed some reporting requirements can be CFR 50.55(e). " Domestic Licensing of revision to NUREG-1022 is intended to reduced or ehtinated to relieve Production and Utilization Facilities," to clarify and consolidate in one document unnecessary budens placed on power reduce duplicate reporting requirements existing guidance on the reporting of reactor licensees without reducing the (50 FR 36081; July 31.1991). events and conditioins that could be protection for pubbc health and safety. 3. Promulgated 10 CFR part 26, asfety significant pursuant to to CFR The NRC staff expects to complete its " Fitness for Duty Programs,"(54 FR 50 72 and 10 CFR 50.73, without review and issue a report containing 24468; June 7,1989). changing the reporting requirements of recommendations on the need to modify Two rules which contain significant the regulations. On May 7,1992, the ongoing activities related to reporting reporting requirements for reactor NRC staff beld a public meeting to requirements, initiate additienal licensees were issued earlier but were discuss the comments that have been rulemaking, or prepare or revise reviewed by the CRFR. They are 10 CFR received, and expects to complete its guidance documents by December 1; 50.73, " Licensee Event Report System," effort on NUREG-1022 in 1992.
1992. ! which was issued in 1983 (48 FR 33850; he NRC staff is also promulgating This request is similar to an earlier July 26,1983), and 10 CFR 50.72, revisions to 10 CFR 50.72 and to CFR request for comments published in the : "Immediate Notification Requirements 50.73 to delete the reporting Federal Register on February 24,1992 , for Operating Nuclear Power Reactors." requirements for invalid actuations of (57 FR 6299).The earlier request which was revised in 1983 (48 FR 39039; certain engineered safety features, pertained to a special. bigh priority August 29,1983). The NRC lasued to which it has found to be of no safety review of 10 CFR Chapter I to determine CFR 50.73 to standardize written significance.The staff has found that whether regulatory burdens can be reporting requirements, eliminate reports of these events do not improve reduced. This request focuses more requirements to report events oflow the staffs understanding of operating narrowly on the reporting requirements individual significance, and require reactor safety.The rule changes are of power reactor licensees. - j more thorough documentation and expected to reduce t>y about 5-10
Federal Register / Vol. 57, No.119 / Friday, June 19. 1992 / Proposed Rules 27395 percent the number c,(bcensee event CRGR. to determine whether or not regulations. Industry commeats were or reports (URs) that li . to ehminste regulatory burdens can be reduced are being considered in all of 'hese about 150 lERs each par. A smular without in any way reducing the reduction is eywcted in 'he number of activities. liowever. to ensure that the protection for pubbc health and safety potenhal for reducing reporting immediate event notifica.fons pursuent snd the comnen defense and security. requirements is considered tn an l
to 10 CFR 50.72. This will re uce the On March 27,1W2. the NFC held a !ntegrated manner. the NRC staff is industry's reporttna burden ..nd the pubhc awting to discuss tha comments sohciting the triews of the nuc! car power NRC's burden in processmg. rettewtng, rec.'ived and to allow additional industry and other interested parties on and cssessing events. De staff currently comments from the pubbc. De CHGR reducmg reporting requirements.
expocts to pubbsh the proposed rule that issued its report on the special review of Interest-d part!cs are asked to comment would remose the unnecessary repertmg NRC regulations on Apnl 13.1W2. and on specific reporting requirements that requiremoots. In the Federal Register in fmwarded it to the Commission on April the NRC may not be considering in June 1992. 17.1992 (SFJCY-G2-141). %e CRCH ongoing activities and that can be On March n.1%1. the NRC issued recommended talmg the followmg four chminated or reduced in scope.
Generic 1.etter (GL) 91-03. "Reportmg of rulemakmg actma pertaming to Comments are requested on power S.tfeguards Events." to provide reporting requirements that met the immediate rehef frum certam aspects of objectives of its review: reactor licensee reporting requirements that are contained in the regulations.
the NRC's pobey for promptly reportmg 1. Change the frequency of safety safeguards esents under to CFR 73.71. analysis mport updates from onct each bcense documents (such as Technical Specificational or guidance documents The staff inaued GL 91-03 as an interim yect to once each refueling cycle (10 measure pendmg the revision of (NURMC documents. Regulatory Culdes.
CFR 5G.7th of generic letters interpreting the Regulatory Guide (RG) 5 62. ' Reporting 2. Chenge the frequency of reporttrW of Safeguards Events? In RC 5 62 the regulations). % ora submitting changes at power reactors from once staff danfies and describes the procesa each year to once each refueluy c>de comments are asked to provide. for each for wportmg safeguards events imder 10 (10 CFR 50.59 (b)); item addressed specihc changes to the regulations, guidance, or Technical CFR Lt.71.The staff taaued Reviamn 1 of 3 Ehminate certain power reactor T,pecifications that will climinate RC 5 fu m 1987 followmg CRGR renew event repo.1s (10 CFR 50 72 and 10 CFR and unticipates issumg the next revtsson M1.73) (See above discussiont and duphcntion. eliminato reportmg of RC 5 62 for comment in im! 4. Change the frequency of reports ou perceived to be unnecessary for the In 19M. the NRC staff renewed power reactor rathohigital effluents NRC to perform its mission, or reduce (u. sting requirements apphcable to fmm twice cach year to once cach n ear the burden of reporting Specific power reactors in order to find and proposed changes may indude (10 CFR kl.3oa).
ebmmate any regulatory requirements Although the CRCR receised chminatmg a reportmg requirement.
that provide only a marymal comments conceming reportmg revising its scope. frequency, or contribution to safety while impming a requirements from sesecul sources. the addressee hat; or convertmg a reportmg substantial burden. On February 4,1W2. Nudcar Management and Resourus MWo km tha NRC issued a Federal Register Council (NUMARC) broadly commented mumment.
notice (57 FR 41M) requesting pubile that the NRC should reuew its aptem Deted at Rockvice. Maryland. thie 17th day comment on the need for revisions to the of report ng requirements m the ofI"a* N i
regulations. Indudmg a move toward awegate (which indudes the For the Nudear Regulatory Commission.
less prescnptive and more performanc e. regulanons, hcense documents sudi as T h asE Martsy.
oriented regulations %e comment the Technical Specifications. and omix owe of %chur ametsr penod for this request dosed on May 4, gmdance documents such as NUREC Revulatmn 1992.De staff ts analyzing the pubhc reports, genenc letters and Regulatory Ira Doc. 92-14sc Filed 6-ts-4r:. a.4s amj comments and will take approprtate Gmdes). and umsider ehmmatmg suam com r m a action. duphcate reports. reports du not The NRC staff is developing new contribute to safety. and reports that are -
Standard Technical Spedficatmns (STS) not reviewed by the NRC.
in accordance with the 157 Comminmn NUMARC Identified over 100 DEPARTMENT OF ENERGY policy Statement on Technical reportma requirements, with an equal l
5pecification Improvements. In the past number bemg taken from 10 CFR Office of Fossil Er>ergy i sever:1 years the industry has Chapter I and the Standard Techical 10 CFM Parts 220,300 and 320 l
contributed sigmficantly to this effort. Specification.s, to illustrate the The staff is traxiafymg the reportmg magmtude of the reportmg burden.
requirements in the STS in response to ExistMg fleputations and Programs; l NUMARC stated that many of the n,gulatory ReV.ena the industry's comments Where reymrements are duplicates or do not appmpriate, changes to reporting contnbute to safety. NUMARC did not Aosacy:OtTice of Fossil Faergy. DOE.
i tvguirements in the new STS will b._
discuss specific exmcerns regardmg each Acnoot Notice of proposed rulemaking.
I offered as ime hem techrical reporting requirement. As previously specif cation improvements. making discussed, many of the reporting sussasAw. On March 2.1992. the them evullable to each licensee through requirements !!sted either have recently Depar* ment of Fergy [ DOE) lesued a l a heense amendment. Independent of been, or are currently being. considered notica of loquiry (57 FR 7327) to request l whether a heensee plans to adopt the in a rulenwsing action. ard as noted pubhc coc> ment on en! sting regulations new STS above, several hAve been recommended and programs thet DOE had identified On February 24.1902. the NRC isam d for rulemaking action. as mortting conshieration for revision or
[ a Federal Register not ce (57 FM few) to Many rweently completed and regoing chminathm in compliance with the solicit pubhc cocunents in connection NRC actwitics pertain to reportmg President's January 23. Un2, with a speaal review of NRC requirements. Indudmg the guidance foe Memorandum for Certain Department regulatums bemg conductmi by the rerneting requirements in se and Agency Heads on the suNect of i
i E __ -
[TG ll 0 6 Jederal Register / Vol. 57. No.109 / Monday, August 31, 1992 / Rules and Regulations 39353_ M Afiniature swine. Swine bred and and clarification and update of 3 j transporting the miniature swine to John F. Kennedy Airport is a small portion of raised as pets or for laboratory testing regulations affecting certain material the overall cost of exporting them, purposes that do not weigh more than licensees.
ellowing use of Logan International 100 pounds at maturity' EFFECTIVE DATE: October 1,1992.
Airport in Massachusetts will have FOR FURTHER INFORMATION CONTACT:
minimal economic effect on the 3. In i 91.14. paragraph (a) is amended Mr. CM. Msm, telephou (3M) &
exporters. Further, since this action by redesignating paragraphs (a)(7) 3834 or Mr. Joseph J. Mate, telephone involves one type of animal. It is through (al(16) as paragraphs (a)(8) (3M) 492-3795, Mce oWuclear unlikely to have any significant effect on through (a)(17), respectively, and by Regulatory Research, U.S. Nuclear any entity involved in bandling or adding a new paragraph (a)(7) to read as Regulatory Commission, Washington.
transportmg livestock. follows: DC 20555.
Under these circumstances, the 19t.14 Ports of embarkation and asport SUPPLEMENT ARY INFORM AYl0N:
Adm'mistrator of the Animal and Plant inspectonfac m es.
liealth inspection Service has (a) * *
- Background determined that this action will not have a significant economic impact on a (7) Afassachusetts. (i) Boston-airport substantial number of small entities, o the United States signed a memorandum
)LoganInternational Airport addressed to selected Federal Agency Paperwork Reduction Act (miniature swine only). East Boston, Ileads who are concerned with energy This rule contains no new information hf assachusetts 02128, (617) 565-4N9. production and protection of the collection or recordkeeping environment.The memorandum requirements under the Paperwork Done in Washington. DC. this :8th day of requested the addressees work together Reduction Act of 1980 (44 U.S.C. 3501 et August m. - to streatnline the regulatory process and Robert Melland, scq ). ensure that the regulatory community is Administrutor. AnimalandPlantlleal:h not subject to duplicative or inconsistent Execueve Order 12372 Inspection service.
regulation.
This praram/ activity is listed in the (FR Doc. 90-: owl Filed 6-08-R B.45 am] On the same day, the President signed Catalog of federal Domestic Assistance aw o com mm under No.10.025 and is subject to a second memorandum entitled Executive Order 12372, which requires " Reducing the Burden of Government intergovernmental consultation with NUCLEAR REGULATORY R egulation." This memorandum, which State and local officials. (See 7 CFR part COMMISSION was sent to all Federal agencies. set 3015 subpart V.) aside a 90-day period to review and 10 CFR Parts 20 end 50 evaluate existing regulations and g, programs and to identify and accelerate RIN 3150-AE30 Th.is rule has been reviewed under action on initiatives that will eliminate Executive Order 12778, Civil Justice Reducing the Regulatory Burden on any unnecessary regulatory burden. At Reform. This rule: (1) Preempts all State Nuclear Ucensees the end of the review period, agencies and locallaws and regulations that are were to submit a written report AGENCY: Nuclear Regulatory nd;cating the regulatory changes inconsistent with this rule:(2) has no retroactive effect; and (3) does not Commission. recomnunded or made during the require admmistrative proceedings ACTION: Final rule. review period and the potential savings p ay le in cod suuuAny:The Nuclear Regulatory as a result of the changes.
h I ng uy , o Commission (NRC)is amendmg its in response to the Presidential memoranda, the Commission decided List of Subjects in 9 CFR Part 91 regulations to reduce the regulatory Animal diseases. Animal welfare, burden on nuclear licensees.This action that it would be consistent with its reflects an initiative undertaken by the policy to monitor the impact of Exports. Livestock, Reporting and complying with NRC regulations by its Commission in response to a recordkeeping requirements. licensees to instruct its Committee to Presidential memoraridum requesting Transportation. Review Generic Requirements (CRCR) that selected Federal agencies review Accordingly. 9 CFR part 91 is and modify regulations that would to review existing NRC regulations to amended as follows: eliminate any unnecessary burden of determine whether regulatory burdens PART 91-INSPECTION AND governmental regulation and ensure that can be reduced without in any way the regulated community is noll subject reducing the protection for the public HANDLING OF LIVESTOCK FOR EXPORTATION to duplicative or inconsisien[ regulation. health and safety and the common
~
in that spirit /the NRC's Committee to defense and security. In accomplishing their review, the CRCR drew upon
~
1.ne authority citation for part 91 T~' Review Generic Requirements (CRCR) continues to read as follows: identified eight areas where regulations previous studies and solicited comments could be revtsed to reduce thef - from the public, other Federal agencies, Authority- 21 UAC. tos.112.113.114a.120, 121.1345.134!. 612. 613. 614, 618. 40 U SC. ; regulatory.burdeii on licerisees without and the Commission's staff. A Federal 4eoa. 40eb. 49 U.S.C.15cG{ d) 7 CFR 2.17,2.51.f in any way reducing the protection for Register Notice was published on and 371.2(d) the public health and safety or the February 24,1992 (57 FR 6299) seeking common defense and' security.The final public comment in connection with the
- 2. Irt l 91.1 a definition for " miniature review, and a second Federal Register swine" is added in alphabetical order to amendments address unnecessary Notice on March 23,1992 (57 FR 9985) read as follows: regulatory requirements related~to the frequency of reporting information. discussed likely or possible candidates analysis of emergency core fooling - for action based on CRGR's preliminary I e1.1 Dennations-
- * * *
- systems for operating power reactors, evaluation of comments. An associated
i
- - - - ~ . .
I
)
39354 rederal Register / Vol. 57, No.169 / Monday, August 31, 1992 / Rules and Regulations j i subject contamination monitoring 5. Comment One commenter pubbe meeting was held on March 27, ouestioned whether the monitoring i 1%2. in Bethesda Maryland. requirements of the new part 20 i requirements were applicable for Af ter completmg their special review. essentially the same as those contained in the existing part 20 (120 20Mb)(1)(iii) packages that show evidence of damage.
the CRGR recommended revismg the Response. The wording of to CFR regulatwns in eight areas The proposed and (c)(t)).
rensions met the cnteria for reducing 2. Comment One commenter opposed 201906(b}(3) has been revised to the burden without in any way reducing the rule on the basis that sealed sources indicate more clearly that packages with the protection for pubhc health and routmely leak and. therefore, should not evidence of damage are to be monitored be excluded from monitarmg for both radioactive contamination and safety and common defense and The commenter cited an example for radiabon levels.
secunty-where a driver and a truck were 6 Comment. Several commenters The Chairman of the NRC sent a report to the President cf the United contammated because of a failure to requested that the proposed wordmg to 10 CFR 50 71(c)(4) concerning FSAR States on Apnl 27 m2. which conduct a proper radiation sweep.
Response The fmal rule does not updates be revised to decouple the summanzed NRC's actmties concermn8
~ the President's directive and advised the exempt hcensees from monitonng or FSAR updates from the refuehng cycle President that NRC would pursue the and that the 24 month requirement for sur e3 ing any packages with evidence updates is an unnecessar) restriction.
CRG,R s recommendations expeditiously of degradation of package integrity, withm the framework of the procedures includmg esidence of potential Response The proposed changes and practices for ru!emding contammahon 1.ikewise, this revision were not occepted. The majority of On June 1, tw2. m response to a does not relax the preshipment facihty design changes reflected in an memorandum from the President of th" requirements for momionng of packages updated FSAR are effected dunng the United States. dated Apnl 29. m2, the contained in 10 CFR part 71. The NRC refuehng outage.The use of the refuehng' Commtssion directed the staff to stnse does not have any cudence that cycle interval provides for a current to pubbsh the proposed rule changes in supports the commenter's assertion that plant status document that is the eight areas identified by the CRGR paled sources routmely leak and, thus, coordmated with plant changes The in the Federal Register for comment as the NRC beheves that the requirements wordmg of i 50.71(e)(4) is not restrictn e soon as possible, but not later than June in place are sufficient to detect potential to plants that wdl eventually increase 15.19'i2. with a view to issuing the hnal their refuehng cycle to 24 mtmths.
abnormal situations. No amount of ;
nWahon can. a priori. preclude all 7. Comment Three electric utihties
] ne r requested that the proposed wordmg m a st 71 2 mm nu m mgpa mg sources.
h ,
(57 FR 27t87], the NRC published the 10 CFR 50.36(a)(2) concerning l 11 wes cr. these incidents can be dealt pro;iosed rulemakmg in the Federal with through followup inspection and radiological effluent reportmg be resised ,
Register for comment. The comment enfmement under the present ta specify a particular date. One j penod e aptred on July 20, m2 regulatory scheme. commenter suggested: "The report must be submitted as specified in i 50 4 prior Summary and Analysis of Public 3. Comment Sescral commenters to March 31 of each year /
Comments riddressed in Feneral terms the need for Response. The wordmg of 10 CFR nirty comment letters were receised the NRC to continue its efforts to redute Hn) unnecessary regulatory burden on 50 36(a)(2) gives the hcensee maximum on the proposed rule und are avai!able hcensees through amendments to 10 flexibihty for scheduhng submission of (i for pubhc mspecten, and copymg for a radiological effluent reports with the CFR chapter I fee. at the Commission's Pubbc only restnction being that the interval l Response The NRC will continue its Docurnent Room located at zu0 L street. efforts to identify additional between reports must not exceed 12 g NW. (Lower Level). Washington. DC. amendmenta that will provide for a months The reporting requirements The comments on the proposed rule remain as proposed.
came from a Sariety of sources These reduction in regulatory burden while still assuring adequate protection of the 8 Comment. Two commenters meluded pnvate cituens. pubhcly held suggested that the amendments indicate corporations, cit tens' groups the armed pubhc heahh and safety. that the changes in reporting forces, industry representatives, electric 4 Comment One commenter questmned the basis for exemptmg from requirements of the new regulations power compames or their take precedence over the existing representatnes, and legal firms Eleven exterrial monitoring for radiation levels I only nuclear matenal that was either in hcense technical specihcations or sigmficant points were raised by the hcense conditions where there may be a commenters. Of the 30 comment letters the form of a gas or in a special form cefhct
{
received. 281etters were favorable and 2 since the external radiation levels are Response. The proposed amendments letters were partially opposed to the dependent upon radionuchdes, quantity.
shieldmg. and distance between are genenc and hcensees may request ;
regulation changes. The comments and admmistrative amendments to any .
radmactwe material and the point of their resolutions are discussed below. confheting hcense condition or technical 1
- 1. Comment. One commenter interest rather than rnaterial fonn.
suggested that the Commission not only Response. The NRC agrees with the specification as needed. j commenter that the requirement to 9 Comment Two commenters g amend i 201900(b) conceming contamination monitoring, but also issue survey. upon receipt. the radiation levels suggested that NRC reconsider -l th on the package exterior should be based for h;ensees to submit 10 CFR 50 36-(2) a statement that those hcensees still effluent release reports and to CFR 50.59 ,
operating under the old part 20 not be on the potendal radiation hazard. !
Therefore. the requirement specified in reports concerning annual design required to monitor packages for changes.De commenters noted the i
10 CFR 20EG(b)(2) that monitoring of contamination that meet the conditmns radiation levels be performed on labeled requirement for these reports was issued of i 20.M6(b). before the Final Safety Analysis Reports Response. The NRC does not believe packages is being revised to delete the exemption that the radioactive material were required to be updated periodically that the suggested change by the commenter is necessary because the be in the form of a gas or in special form and before resident inspectors were assiFned to aff reactor sites The amendment of i 20.1906(b) will make the as def ned in 10 CFR 71.4
i- c u.
- - - ~ ~ - - -
- 2. Confornination Motutoring of maximurn of 6 months prior to the date commenters also oboerved that these Packages (10 CTR mJSc8(b))
reports are now avallable on alte for of filing."
During the comment period on this This action clarifies the regulations review by inspectors at any time and and reduces the monitoring burden for that most design changes are reflected proposed rule, Yankee Atomic Electric Co. stated that the period between packages containing radioactive ' '
.in the FSARs. Further, the commenters materialin the form of a gas or in a '
did not believe that these reports are successive PSAR updates should not be limited to 24 months as proposed.Their special form as defined in to CFR 71.4.
routinely reviewed by the NRC staff, The estimated savings to licensees is The commenters beheved that if the rationale was that the restriction of 24 requirements to submit such a report months was unnecessary. $10.1 mi!! ion' were elimmated, there would be n Response. Upon receipt of the Yankee a F,wuency of Rodiologico/ Effluent ,
impact on safety, the required Atomic Electric Co. comment letter of N'P d* l## #A #0 /
evaluations could continue to be July 20,1992, the NRC again reviewed This' action reduces the requirements the petition (PRM 50-55] submitted by for the aubmission of reports concerning
- co t n e e a all b or e ew The Yanku Atomic Electric Co. and the the qua*.tity of principal nuclides ,
, commenters believed that the deletion e mments submitted in response to the rewe=e J to unrestricted areas m 1 qu,d i ,
of these requirements would contribute Notice of Receipt. Based on this review, i to significant increased savings by the NRC believes that the current action and gewous efDuents stom semiannually to annually. ,
licensees. being taken to reduce the burden on The estimated savings for this action, 4 Response. ne consequence of nuclear licensees is substantially similar assuming an average remaining plant a chminatmg the requirements for these to the relief requested in the petition. life of 26 years,is $1620.000 for I
reports requires significant additional The 24-month interval for successive assessment. Thus, the proposed licensees and $360.000 for the NRC.
, FSAR updates is addressed in comment revisions have not been modified in number 6 above.it should be noted tl at 4 Use of fuel with Zirconium-Based
' order not to delay the benefit of burden the petition did not contain a specific (Other than Zarcoloy) Clodding (10 CFR reduction. Although this proposal will Sa44. Sa46 and Appendix K to Part 50/
reference to a number of months not be addressed in the current regarding successive FSAR updates. This action revises the acceptance rulemaking, these suggested revisions With respect to the petitioner's concern
' willbe evaluated as part of an ongoing criteria in 10 CFR 50.44 and 50,48, about multiple facilities sharing a relating to evaluations of emergency NRC effort. common PSAR, licensees t ill have core cooling systems and combustible l 10. Comment. One commenter maximum flexibility for scheduling questioned whether the changes in gas control applicable to zircaloy clad l updates on a case-by-case basis.This fuel to include ZIRLO clad fuel. This i reporting frequeacy of facility changes final rule does not address multiple under 10 CFR 50.59. FSAR updates, and revision to include ZlRI.O as an radiological efDuent reports would facilities. acceptable zirconium based cladding l "This final rule is considered by the matenal along with zircaloy will reduce impair the ability of the NRC to review the information in a timely taanner. NRC to grant the petition submitted by the licensee burden but will not reduce Response. The resident inspector the Yankee Atomic Electric Co. This the protection of the public health or program along with regional regulatory final rule constitutes final NRC action safety. The NRC will address, through programs prodde timely and in some on the petition. an appropriate separate rulemaking. the cases day-by-day review of facility use of other similar zirconium based Discussion cladding materials when all of the operations.ne changes being made will ,
not impair NRC's ability to review the The Nuclear Regulatory Commission * *#
"* ** * * *#Y * * #***""
information. is amendin810 CFR parts 20 and 50 to matenals have been completed.
- 11. Comment. One commenter implement the e.ight proposed actions The estimated savings for eliminating '
(Yankee Atomic Electric Co.) stated that identified below and alsowidentified in the need to process recurring the FSAR update changes discussed in tb mpod on Special R of exemptions to the regulations to Action item l in the proposed rule and Existing NRC Regulations that was licensees is $2 million and the savings to in Action item 7 of this document c mpleted by the CRCR and that was the NRC is $50.000.This estimate is emanated from a petition for rulemaking attached to Chairman Selin a letter t based on six plants per year requestiag that they submitted to the NRC on e e use a pI the use of ZIRLO clad fuel over the next February 9,1990 (PRM,50-55). The .g. , 8 years.
notice of receipt for this petition was protection of the public health and 5. Receipt Back of Processed Low Level published in the Federal Register on safety or the common defense and May 3.1990 (55 FR 18608). The petitioner secunty. Each of tl e eight actions is Waste (10 CFR Sa54) origmally requested that nuclear power discussed below' This action is addressed in a separate plant licensees be allowed to file FSAR rulemaking. For additionalinformation.
reports at periods greater than annually. f. Posting ofRooms Occupied by see the proposed rule entitled " Receipt They suggested that i 50.71(c)(4) be Diognostic Nuclear Medicine Patients of Byproduct and Special Nuclear revised to read as follows:" Subsequent (10 CTR fa1903(b]) Material" published in the Federal revisions shall be filed no later than 8 The revision reduces the postin8 Register on April 24.1992 (57 FR 15034).
months after completion of each requirements for rooms in hospitals 6. Annuo/ Design Change Reports (10 planned refueling outage for a licensee's occupied by patients administered facility. If two or more facilities share a CFR Sa59) radioactive materials who might common FSAR, the hcensees shall This action revises the requirements i designate the refuehng outage schedule otherwise be released from confinement for the annual submission of reports for under the provisions of to CFR 35.75 on one of the multiple facilities to The estimated savings to licensees is facility changes under i 50.59 (Changes, establish the schedule for revisions of testa and experiments) to conform with -
$300.000 for elimination of the need for the proposed change for updating the the common FSAR.The FSAR revisions shall reflect all changes up to a posting. ,
I s
e .
-39356' Federal Register / Vol. 57, No.169- / Monday August 31, 1992 / Rules and Regulations
.: ~
response for operating power reactors 6. Annual Design Change Reports-to FSAR (see item 7). This action does not change the frequency of reporting affect the substance of the evaluation or and t hour per response for certain the documentation required for i 50.59 materials licensees. including the time - changes at power reactors from once per year to once per refueling cycle (to CFR type changes. It only affects the interval for reviewing instructions. searching
. for submission of the information to the existing data sources, gathering and 50.59(b)).
NRC. Instead of submitting the maintaming the data needed, and 7. Frequency of Final Safety Analysis information annually, the information completing and reviewing the collection Report Updates ~to change the can be submitted on a refuehng cycle ofinformation. Send comments frequency of safety analysis report basis. provided the interval between regardmg this burden reduction or any updates from once per year to once per
' successise reports does not exceed 24 other aspect of this decrease in the refueling cycle (10 CFR 5011).
collection of information includmg 8 Ehmination of unnecessary event months.
The estimated savings for this action, suggestions on this redaced burden to reports-separate rulemaking (10 CFR -
assuming an average remaimng plant the Information and Records 50.72 and 50.73).
life of 26 years is $1.500.000 for hianagement Branch (MNBD-7714) U.S' Each of these actions considers the hcensees and $400,000 for the NRC. Nuclear Regulatory Commission, ehmination or relaxation of regulatory
\ 8 "' trquirements currently imposed on NRC '
- 7. Frequency of fino! Safety Analysis Of c f e of on an nsees. Action items 1 and 2 would Report (TS.4R/ Updates (10 CFR Sa71/ Regulatory Aff airs. NEOD-3019 (3150- affect materiallicensees while Action This action provides licensees with an 00u 3150@l4). Office of hianagement Items 3 through 8 would affect power .
option from the current requirements for and Budget. Washington, DC 20503. reactor hcensees. For each regulatory the annual updating of the Final Safety Regulatory Analysis action, the NRC has evaluated the Analysis Report (FSAR). In lieu of an health and safety implications and the annual submission. licensees may The NRC is amending its regulations ,
cost impacts relative to a status quo choose to provide the required to redace the regulatory burden on alternative. The NRC fmds that each information once per each refueling nuclear licensees. This action reflects an w uld result in a reduction in burden outage. Updates to the FSAR can be initiative on the part of the NRC and submitted 6 months after each refuehng responds to the spirit of President Bush's without reducmg protection of the public health and safety. The public health and memoranda of lancary 2a.1992, which outage, provided the interval between t successive updates to the FSAR does requested that selected Federal agencies safety determination appears in a -
document entit!cd " Report on Special -
resiew and modif3 regulations that will Review of Existing NRC Regulations by not exceed 24 months. This action does reduce unnecessary burden of not affect the substance of FSAR updates, governmental regulation and ensure that the Committee to Review Generic the regulated community is not subject Requirements" issued on April 13.1992.
The estimated savings for this action, to duphcative or inconsistent regulation. Additionally, an analysis of the safety i' assuming an average remaining plant The NRC has identified eight rulemaking imphcations of Action item 4 is life of 2G years,is $t1.100.000 for acticns that would eliminate duphcathe available in a U.S. NRC letter to hcensees and $910.000 for the NRC. or inconsistent regulatory requirements. Westinghouse Corporation dated July 1.
a Elimination of Unnecessory Erent 1991. entitled " Acceptance For Six of the actions are included in this Reports (to CFR 50.72 and 50 731 Referencing of Topical Report WCAP-package,Two of the eight actions are 12610 " Vantage + Fuel Assembly This action is addressed in a separate being processed as separate Reference Core Report"(TAC NO rulemaking. For additional information, rulemakmgs and are not discussed here The eight actions are as follows: 7705817 see the proposed rule entitled "htmor The cost savings to both the licensee htodtfications to Nuclear Power Reactor 1. Posting of Rooms Occupied by Event Reporting Requirements" Diagnostic Nuclear hiedicine Patients- population and the NRC appear below.
to include exceptions for posting Dollar impacts are expressed on a 1992 pubbshed in the Federal Register on requirements for rooms in hospitals for present worth basis in 1992 dollars, The june 26,1992 (57 FR 28642) patients administered basis for these cost estimates is EnsironmentalimPact: Categorical radiopharmaceuticals for diagnostic avail *ble in a report entitled " Analyses E*'I"'I " tests (10 CFE 201903(b)). of Potential Cost Savings for Selected
- 2. Contamination hionitoring of NRC Ref rms" dated June 10,1992-The NRC determined that the final regulation is the type of action described Packages-to eliminate certain in categorical exclusions 10 CFR 51.22(c) provisions for contamination monitoring TOTAL DisCOUNTEtr' Cost SAvlNGs As-of packages containing certain types of SOCIATED WITH PROPOSEO REGULA-(2) and (3). Therefore. neither a'n .
environmentalimpact statement nor an radioactive material (10 CFR 20.1906(b. TORY REvislONS environmental assessment has been 3. Frequency of Radiological Effluent Reports-to change the frequency of Da maoas o' 1992 aows) prepared for this final regulation.
" "' NRC A*@ia m a m on Lcenues g
Paperwork Reduction Act Statement [uen e mt ie year o ce per This final rule amends information year (10 CFR 50.36a). 03 t
'4 " ' * ' - 70'0 I
collection requirements that are subject 4. Use of Fuel with Zirconium-Based to the Paperwork Reduction Act of 1980 Cladding-to eliminate the need to - $*,[I~Z n m d.
$20 Ncoso
[44 U.S.C. 3501 et seq ). %ese ol-tain exemptions in order to use -
- N'A
- N/A certain fuel cladding material not hem 5.-
requirements were approved by the i Office of hianagement and Budget presently addressed in the regulations 7- M
'N/A
@o sN/A approval numbers. 315&OO14 and 3150- (10 CFR 50.44.10 CFR 50.46 and 10 CFR nem a 00114 part 50, appendix K).
- 5. Receipt Back of Processed Low
- Assumes sa anava8 **' 8*c""' '** o' 5%
The reduction of the public reporting "*** burden for this collection of information level Waste-separate rulemaking (to j *"** * "" *te ru*a*as Not assaus-woais is estimated to average 208 hours per CFR 5f154). d y y .e, ,~-r. , ,,_.-. - - ., , _ . , - - - , - - . . , ..--.v , o,--- ,,
u... ... ~ ^ Federal Rexhter / Vol. 57. No.169 / Monday. Augat t at, um i wa-. antaminadon unless the padnge The NRC cor.cludes that euch of these 11ergy Reorganiution Act of 19N. as e ontams only radmathve material 6n the i amended, and $ thS C. 552 and 551 the i proposed regulatory revisions is jushfied NHC is adopnng the following form of a gas or in spedal form as due to the net cost snings th.11 will !
, amendments to 10 CPR parts 2n and M defmed in m Cl H 714 accrue without reducing pubhc health W Momte r the nternal surfat es of a and safety. PAR T 20-- STAND ARDS I OR ga. E"'* # g"' i t "
Regulatory thibility Certfation PROTECllON AGAINST HADI ATION levels unless the put k age umtains quantities of radmnrose material that As required by the Regulatory 1 The authonty dtation for part 20 are trin than or qu.d to the hpe A l'Iruhihty Act. 5 U S C. fm(bi, the rene w md n NHon quantity, as deimed in i 71.4 and Comnunion certifies that. this rule w di ^" "
- 1 0 4 sippendit A to pot 71 of this chaptrr; not heve a significant adverse ewnomic #Md impact on a substantial nurnber of small 9',3,14W as amended l4: USC :P 1 hilj entibes The NRC has adopted sue 3,g, gi a gy 3 gag gg 2. M sn i W Wm'm J p knya k now n to standards that clusify a small entity as 201 u ernended. m . 2te, u Stat 1:4L m' umtam radmactne matenal for erncrJrd,1:41 1:4rt[4;p $ C g41,r,Mt d d mMhWn ad phtmn a small bustness or organuation, one b nMme of @dahon whose groas annual ret eipts do riot 5W4 in d D oceed $15 nulhon, or as a small M tum :0 inn aho mard unan c n in d pady inteAy, sm h as M g Ws 141. pub 1. r-4S m htat 2:'12. 25 r 14: that are crushed wet, or datWed.
govenimented junsdiction whme l' S C 10155 totM) * * * *
- su,)pottmg po;iulat on is MJNO or les.s I or the puqwies of are : H M St.at im as lhe hrst two mues mvohr the amendnf 14:if S C :n y tehuahon of reymrements a hu h a di il 20 Ua 20 to/ 20 m u ad and d) :o 104 PART f>0-DOMESTIC LICENSING Of athx1 apptnunndrly sm nute rial m and pq m w, aq :o pu, m to cut ,'o 202 PRODUCTION AND UTILIZ ATION !
b< ensin Ahhough many of thne 1,a m art zu zu12a iot m m ca ni et F # ClLITIE S ht enu es may Im nnndl entines, there 20105 .'o l m to imi-/n ian Ja 13r, 20 120' 2" UuR 2" 15"1 20 UDI 201M 4 The authonty unau. for part 50 should be no ods erse m.pa: t ari these I ;
.,]U f" e ontuiuct to trad on follaws small hcensees im ause the regulahons g g ,
are bemg related. lhe remammg sin ., ;,g g m pwt un m Sur 9 m un fan Nn m issues of frct 112 pnwer reat tor E'W :n pH N W,) and ltt 20 sunt la ensera.1he rompames that own thew m am-m Jim ;'d not-m:x and m LKM W 9'd u n mmdd m 234 n3 SM m as m.n,w H: u s C na: ein zu4 plants do not f all wchm the tope of the are umed umter set teing w.Sna ma us anmn&d H2 U S C. 22mp a i 20 n n.id) d a a not. :231;D t 22 n, n N l'm } seu drhmhon of "small entities" set forth m imed under the prwar3 At t of Ir41%b L an o amended. 20: Awi M Mat 1241 as the Regulator) Ehubdiry Att or the 9 W9 5 U S C 55:4 and { { 2010: Jo lu krI amended 1:441:4h {42 U $ C W1 W1 NR(3 har Standards 20 4a1-20 4#. 2n 40mbl 20 40u 201to:M :) sw,)
% non so 7 asc maca una,r h.h L w llackfit Analysie and H1 mi ma) :n 1:onie and th) 2" *4 * *
- M ""d MI # 2* I M **' M W h*1 N 1I42 U $ C 2511 The NRC has detenmned that the Sn han M u) ohn issued under an a tm 18?. _
b.H kfit rule 10 C'fR 50 UN does not m novzu non.and 20 2201 20 220' a r' M W1 um 9ss. as amend ~d H U S C tut. mued under arc ltato, r4 hiat uvt as ;,In) arc. tot pub L 91-t<at M Sut W H2 apply to this Imal rule und. therclure-that a bad fit analysis a not reqmrrd nmrnded H: U S C ;ssubdl USCWMmWu2WMM
- 2. Sethon 20 Dan is unmnded by w in? ahu issued under see inn e SIM 9fi because these amendments do not as arnended H: U S C nu) M nons 50 a mohe any promions that wooli rnnong paragraph (b) to trad as r,o n w n and 50 so ahn issued under m impow be kfus as deimed in 10 Cf.R y m 68 %t oss aJ U S C. 2ml bntmos 50 llN(a)(1) So J ia,50 m and appenda Q n!*o murd iM N L W pNntt Post ng under set 101l%b 1. up1% O Stat nil H2 I.ist of Sub'e<'ta *equirements.
I U S C 4112) becnons O M and M M uhn M CFR fart x issard under are :M M S!at 1245 (42 U $ C M RNna or dn4 ureas in hosphab n ni M M M 91. and M 42 Ao il) product material Crmunal penairy, that uw muped by ri.to ots are not a 4)WnpeLr e wS' Mew'1H: ?' Utensed matenal. Nudear matenals. reqmred to be pourd weh cauhon afgns U s C nm Sen m m a6 tawd under ' Nudear power plants and reactors, pursuar t to 120 MW12 provided that the en cl M ?;ut 9ra H: U S C :ts ) Sernons i l Orcupational safety and health. patient rould be retraned from so m W el eko murd oder set tru M St.a Pad uging and containern. Rudmuon %4 n amended H2 U S C ny Appenda F conhnement pursuant to i rJ5 of tha nha murd under m W, t.n Stat m H: I protectwn Reporung and rec ordkrepmg < hapter. requirements. Soort c matenal. Special b f * * * * *
"' N#"
nudear matetti., Westr treatment und I'bI"W"* 1 Section 2019an is omended by amended H2 U S C M73L ll So i % 4Wa) ( i disIiosal~ . and (bL and % Mh I are murd under arc M CFR Fart 50 I"I;" * " pub uSui m us enended H2 U S C Umpa il M 5 50 ?>L M UMal-h L 50 wel g and M w 4pahM w Na) and 94 9 47tbt Antitrust. Classfied informahon Crtminal penalty. bre protechon. ' y pocg,g,,_ m 4ntal b) (dL and (et 50 499) W Mlal 01-lncorporaton by referrnce. D1010)-int (pk 14). OL bl. and bl so syfL Intergournmental relatmns, Nudrar M L.a ennec shub W sbial. kHet M and (hl M W power phtnts and reactors. Radiatmn W mt r We audansd n wqat wo; w eg wu aM e ga protection. Reactor niting criterin. labe
- pa e or radioactne und (b) are imed under sec.1 tat e Stat n Reportmg and recordk ecpmg N9 as amended H2 U.S C 2:mb)L and il 50 9 50 41d) (h) and (p, W M(w) (s). (bb) requirementa For trasons se.1 out in the preamble (*,tg*d {
5
'gy M* W and N4 Wel m S9M %ntM so rabl, so 7oul so 711aHt) and f el 50 72ial and under the authonty of the Atomic tw.m.,riu a w.nio.i.on r.pm. u en so me) .nd M so 74 w 7a and 50 m are Energy Act of 10M. as amended, the in un .mt m w uo .k
f . I 1
' 39358 I'eder:1 Register / Vol. 57. No.109 / Mor> day. August 31, 1992 / Rules and Regulations l
issued umler ser.16ta tir Stat psn as e
- 7. Seditm 50 46 is amended by 9 Sertmn $01] is amended by amended (4211 S C L'mloll i revising paragenph (e)(1)(i) to reed as revising parngrnph (el(4) to lead as 5 Fet tion 50 3na is antended by Iollows- follows- '
tenriing paregraph (n)(2) to read as IUUU
- C i 50 46 Acceptance criteria for emergency ) 50 71 Maintenance of recordo.maAAng of core coonng systems for bght water reports.
! $0.36e Technicet spectfacettoris o,, nuclear power reactors. . . . . .
efftuents trom nuclear power tsactors [a)(1)(i) Each bothng and pressurited {cj* * * (a) * *
- bght water nuclear power reactor fueled (4) bubsequent revisions muni be fded p) Each beerwee shall subnut a report wtth uramum oude pellets withm annually or 6 months after each to the Comnussion annually that cylmancal zirculoy or ZlR! O claddmg n fuchng outage provided the mierval specifies the quantity of coch id the rnust be provided with an emergency pnncipal radionuchdes n leased to between sucassive updates to the core unohng system (ECCS) that must be FSAR does not exceed 24 months. The unrestricted areas in bquid and in der.rgned so that its calculated coohng revismns must renect alli hanges up to a gaseous einuents dunng the previous 12 perfonnance following postulated loss. maumum of 6 months pnor to the date months of opesation. indudmg any other of.wolant accidents confonns to the of fihng.
Infortnatmn as may be required by the cnteria set forth in paragraph (b) of this * * * *
- Commission to estimate maximutu section. ECCS coohng perfortnance must potential annual radultwn do+es to the 1)ated at Rm.ht!1e. Wryland tlns 19:b day be calculated in accordance with an of Auguns 194.
pubhc resultmg from einuent releaser acceptable es aluation model and must The report must be subrmtted as f or the Nudear Retrulatory Commwon. be calculated for a number of postulated lamco H snierek. specified in i VL4, and the tune betmto lon,f. coolant arridents of different submission of the reports must ta no Aeg Euruf re Dnwer/ve D iremwm sires, locations, and other properties longer than 12 months IIquantities of sufficient to provide assurance that the lra pou oms ytted n#92. it u aml
,u,,o cong 7,m raduuttive materials rtleased durin8 most severe postulated loss-of coolant the reportmg period are signthcantly abus e design objectivea. the report must accidents are calculated. Euept as provided in paragraph (a)(1)(n) of this cover this specihcally. On the basis of in.ction, the evaluation model must SECURITIES AND EXCHANGE these reports and any additmaal COMMISS6ON infonnation the Canmimon may obtam include sufhcient supporting from the hcensee or others, the justification to show that the analytical 17 CFR Part 202 Commission may require the hcensee to technique reahstically describes the belmmr of the reactor system dunng a take action as the Co.amission deems lona.oI-coolant accident. Comparisons to 39 (Re6 eau Nos 3F6952; appropria te' 2789. IC-18905; lA-1325;34+3 r071.
File No, 35-25612,
$7 * * * *
- apphcabic expenmental data must be 841 made and uncxrtainties in the armlysta o Sectmo 50 44 is ametuted by methmi and inputs must be identified Temporary Lockbox Rule revtsmg the introduuor) test of and assessed so that the uncertainty in paragraphs (a). (b). and paragraph (c)ti) the calculated results cnn be estimated Actwcy: Secunties and F.schange to read as follows: Comrnissun This uncertainty must be accounted for.
1 M 44 Standards for combustitAe gas so that, when the calcubited ECCS Actiom b. tension of kmpomry nh l contial e ntem in ughi.watecooieo powe, coohng perforrnance is compared to the re actors. cniena set forth in paragraph (b) of this suusiany: The Commission is estendmg for one year the effertneness oi e (n) Each boiling or pressunted I ght, section, there is a high level of water nuclear power n actor fueled with probabihty that the critenn would not temporary rule. odopted in June mM which penmts fihng fees to tw remitted oxide pcHets within c3 h ndncal ritculoy be esteeded. Appendr K, part !!. to a U.S Trresury designated locktm or ZlRLO claJdmg. must as provided in Rmuked Docunu nta4an, sets forth the documentadon rquinrnwnts fa cach depository located in httsburgh. paragraphs (b) through (d) of this pennehania Use of the lockbox is section include means for control of eWuabon mmid
*
- currently voluntary except for those t hydroren gas that may be generated. * *
- entities fibng on the Commission's '
lollowmg a pontulated loss of coolant 8 Section 50 59 is amended by 1:h ctrome Da'a Cathenng. Analms and accident a (l.OCA). b)-- revising paragraph (b)(2) to read as Retnes al (EDGAR) system. This action follows: will permit registrunts to continue to use (b) Each boihng or pressunzed hght. the lockbm pendmg adoptmn of a water nuclear power reactor fueled with 15459 Changes, tuts and nMants. permanent rule. oxide pellets within cyhndrical rirculoy *
- tr n ctivr Dart: September 1.1W or ZIRLO claddmg must be prosided (b) * *
- through September 1.11m.
with the capability for- p) The licensee shall submit, as
* * * *
- Fon rtsaracn turoRuaTKm cowf act:
specified in i 50 4, a report containing a Wilson flutter,(2a2) 272-7210, Director. (c)(1) For euch boihng or pressurized brief description of any changes, tests. Office of FilinFs Infortnation and hght-water nuclear power reactor fueled and experimente includmg a summary Consumer Services. Securities and with oxide pellets within cyhndrical of the safety evaluation of each Tbe Exchange Commission. 450 hfth Street rircaloy or 7JRLO cladding,it must be report may be submitted annu Ily or NW., Wa shington. DC 364a shown that during the time period j along with the PSAR updata as SUPPLE M E NT ARY INFORM AT)ost; In following a postulated LOCA, but prior required by i 50.71(c). or at such shorter to effective operation of the comhustible intervals as may be specified in the Securities Act Release No 1640. dated gas control system, either- June 27,1984 (49 FR 273nn). the license. } Comrnission adopted a temporary ; amendment to rule 3a.17 CFR 2n2.3a, to
41780 Tehrd Register / Vol 67. Ns. 250 / Tuusday, December 29, 3992 / Rul:s and Regul:tions Mg It is hzreby found end determined that (b) This suspen:lon does eot requin beginning December 1,1902, for an suiruART:N Nuciaar Regulatory
,~ of penons affected subatantial er indennite period, the following Commission (NRC)is amendits its exter sive nreparation prior to the regulations to provide for the esclusica
/ provisions of the orders do not tend to effact!ve dete; and of counsel from a subpoenaed interview effectuate the decland policy of the Act: (c) Notice of proposed ru'amaking when that counsel represents multiple in 1006.13. pangraph (b)!2). was glvan in' mated parties and they In 1012.13, paragraph (b)(2). interests in the investigadoo and them were afforded opportunity to file wrltten is mncrets evidenm that the counsal's In $ 1013.13, paragraph (b)(2). data, views or argumants conmrning pre *suce et the laterview would Statement of Conalderation this sus nalon. No tumments were obstruct and irnpede the lavesti stion. nts action sus nd; portions of the receiv . nose amendments are designe to Therefm gmd cause axists for ensure the int ty and effiucy of the roducer milk de nition of the Upper making this order efluctive Dommber 1 loride, Tampa Bay, and Southeastam 1992. Investigative an inspecticu pmceer, Florida milk orders. This action These amendments provide e standard suspends the requirement that 10 da s. List of Subjects in 7 CFR Parts 1006, d d to aki d production of a producer be receiv 1012,an 1013 fffe{t ng d 100 to uclude each month at a pool len in order to g Milk marketing orders. ualify milk produc on other days for The authority citation for 7 CR parts ErrtCTtyt DATE: March 1.1903 iversion to nonpool plants. 2006,1012, and 1013 mntinue to read y The suspension was requested by as follows: R 8'r K. Devie, Office of the General Florida Dairy Farmers' Association: Authority: Secs.1 19. 48 Stat. 31, as M a udd 7 U.Sc M4M. Co m s n, as gto 2 555, - As at o , e I c. d telephone: (301) 492-1606. Southern Milk Se es. The pro nents it is theref re ordered.That the $UPPLEMENT ART e4 FORMAT 100C have formed and work throug a f il wing pr vist ns of the orders (7 tents common marketing agency in order to P""' " P" d d I an d i
]' to Public Ctanments on the 11.
achieve maximum efficiencies in Proymed Rule balancing the needs of the fluid milk plants and in dis osing of reserve or !. Background excess milk sup; ins. When milk of PART 1006--MILK IN THE UPPER FLORIDA MARKETING AREA On Demmkr 19, N (56 R 65M, pmducers located in other states who the Nuclear Re latory Commission supply the Florida market is not needed, 6100s.13 (Suspended in Part) (NRC) publish proposed amendments it la ohen diverted to plants located in 1. In 61006.13, paragraph (b)(2) is to its regulations found at 10 CFR part other states that are regulated by othat suspended. 19. The pr posed amendments provided Federal milk orders, for the exc usion of counsel from Miik that is diverted to other order PART 1012. 4ttLK lN THE TAMPA BAY subp.oanaed interviews in connection manufacturing plants, but fails to MARKETING AREA with an NRCinvestigation when that qualify for divonion under the to-day counsel represents multiple interests in requirement, becomes producer milk i m213 puspeMe N on) the investigation and there is concrete under the other order and towan blend 1. In $ 1012.13, paragraph (b)(2) is suspended. evidence that such representation prices to producers under the other would obstruct and tropede the order.The suspension will enable cooperatives to realise efficancius in PART 1013-MILK LN THE investigati n.The proposed SOUTHEASTERN FLORIDA amendments also provided procedures divertin the most distant milk from to be followed by tbo NRC and
=
fluid mi k plants. The suspension will MARKETING AREA individual witnesses in connection with - not threaten the intepity of marketwide 31013.13 puspended in Part) the NRC's exercise ofits authority to pooling because all three orders limit exclude counsel,
- 1. In $ 1013.13, paragraph (b)(2)is the overall perantage of a handler's suspended. The Commission had published e
, milk sur ly that can be diverted each month. e suspension is needed Io be atd ecember 21, m2. final rule on the same sub}oct on January 4,1990 (55 FR 243). That rule effective for the holiday season because " ' W** "*
- provided, inter ofia, for the exclusion of of the need to move ancess milk *P"'Y ^ "#8""*C*"'T#"'*'U"8 8ad rounsel for a subpoenaed witness when supplies off those markets. I"' F 8" " 38' "
No comments were received in (G Duc. 92-m32 Faled 12-26-st a u aml that counsel represented multiple interests and there existed a rea.sanable response to the proposed suspensjon. =
- coes m u s-ai basis to believe that such representation Accordin ly,it la ap repriate to _
would pre udice, impede, c. am irthe suspend e aforesai provisions, integrity o he inqui . Upon I al 11is hereby found and determined HUCLEAR REGULATORY challenge, the Unite Stetes Court of that thirty sys' notice of the effective COMMISSION Appeals for the District of Columbia date hereo is impractical, unnecessary Circuit struck down the portion of the and contrary to the public loterest in 10 CFR Part 19 that: final rulu on attorney exclusion, RtN 3150-AL11 Professional Reactor Operator Society v. (a) The suspension is necessary to Nuclear Regufatory Commission,939 reDect current markGing conditions and Excluston of Attorneys Frern F.2d 1047,1052 (D.C. Cir.1991) to assure orderly marketing conditions interviews Under Subpoena in the marketing areas in that this action (bereafter " PROS"). ( Specifically, the Court of A peals should eneble cooperatives to realize ActNcy: Nuclear Regulatory Conunlulon' ruled that the NRC must opp the samo efficiancies in divertin the most distant standard for attomey axclusion that the milk from Duld milk pfants; ^"O* U"'I NI'- Court had previously required of the
Federal Register / Vol. 57. No. 250 / Tuesday December 29, 1992 / Rules and Regulations 81781 4. Securities & Exchange Cornmission by "directly or indirectly" from the question as to its necessity and general virtue of the Courfs interpretation of the standard for exclusion of counsel. The propriety"(359 F.2d 550,552 (9th Cir. right.t> counsel guarantee of the Commission has s!so revis,d the rule to 1966)). For reasons akin to those Administrative Procedun Act (ApA),5 pravide that the interview shall not be motivating the SEC rule, the NRC U.S C. 555(b). The Court stated that to rescheduled to a date that precedes the proposed and now finahzes its attorney exclude counsel"the agency must come expiration of'he Ome provided under exclusion rule. forward with ' concrete evidence
- that 10 CFR 19.18(d) for appeal of exclusion The NRC's investigation of unsahr the counsel's p'resence would impede its of counsel, unless the witness consents Practices and potenual violations of the investigation. TROS,939 F.2d at 1049 to an earlier dato, in addition, the final Atomic Energy Act and NRC regulations (cning SEC v. Csopo,533 F.2d 7.11 rule requires that the written nouce of is an important means of ensuring (D.C. Cir.1976)). Thus, the Court the grounds for counsel's exclusion also public bealth and safety in operauon of vacated the attorney exclusion pordon describe the right to appeal the nudear power plants and other uses of of the rule, since its " rational basis" exclusion to the Commission and nuclear material (see 10 CFR }urt 19; 10 standard was less rigorous than the thereby ebtain an automade stsy of the CFR 1.36). NRC invesugators often
concrete evidence" requirement. On effectiveness of the subpoene pending interview licensees, their officials and December 19,1991 (56 FR 65948), the the Commission's decision. employees, and other individuals Commission responded to the appeals Because these changes are logical having possible knowledge of matters court decision by publishing notice in outgrowths of the proposed under investigation. In many cases, the Feders1 Reguter of the amendments and no other modifications invesupating offWals conduct extensive Commission's revocadon ofits rule on are mede. the Commission concludes and dRcult inquiries to om<mine attorney exclusion, i e., the definition of that the Snal rule should become whether violations were wiuful and/or
" exclusion" appearing in to CFR 19.3 effective without further notice and whether licensee's management engaged and the standard and procedures for comment. The Commission's responses in wrongdoing. Yet, effective attorney exclusion appearmp in 10 CFR to the concems of the commenters an identification and correction of unsafe 19.18(b)-(e). On December 19,1991 (56 set forth below. Practices or regulatory violations FR 65949), the Commission also through an investigatlve or inspection published the proposed amendments in A. Needfor the Rule process can depend upon the the Federal Register that would One commenter argued that the willingness ofIndividuals having conform the NRC's attorney exclusion expec*ed rarity of application of the rule knowledge of the practices or violations requirements to the Court's ruling. demonstated the absence of a need for to disclose that informauon to I Responses o blic Comments '
' b re 8* NP*
- t e ew be in o d nly rare as bed in 10 CFR and compelling cases. However, the 19.2, the rule would apply to all The Commission received nm.e Commission continues to believe that interviews under subpoena within the comments on the proposed December the rule should further expeditious and jurisdiction of the Nuclear Regulatory 19,1991 rule. The commenters included Commission other than those which satisfactory resolution of some one individual, the Nuclear Utibty investigations and that this is important focus on NRC employees or its Management and Resources Council contractors. While the purposes of the to the Commission's fulfillment ofits (NUMARC), three utibties endorsmg rule relate primarily to interviews NUMARC's comments, the Professional statutory mission. By providing to : nducted under subpoena by the witnesses, counsel, and agency staff Reactor Operaton Society (PROS), a law both a general standard for determining NRCs Mce hMgadons, b fmn commentin on behalf of PROS as NRC's predominant user ofinvestigative well as seven uti iues and a major whether disqualification is appropriate and procedures for implementing and subpoenas, the final rule would also engineering firm, a law firm challenging these determinations, the apply to NRC inspections and commenung on behalf of six utilities, investigations conducted under and a law firm that represents utihties subpoens by other NRC officials. The and individuals holding NRC bcenses. final rule uncertainty andshould confusionreduce as delabh:iated rule does not apply, however, to All commenters o with consideration of the exclusion of subpoenas issued pursuant to 10 CFR the pro osed rule.pposed The comments adoption are of counsel' Althou gh several commenters 2.720, which applies to subpoenas availab e for inspection and copying in the agency s Public Document Room, emphasir.ed the circumstances in which ]ested in hearings.
* *I' * **"I'" '#8"*d "
2120 L Street NW, (Lower Levell' courts have found insufficient grounds for exclusion of counsel by the is n need i r the rule tucause of the Washin on.DC. availability of other meens for ensuring The mmission has considered the Securities and Exchange Commission (SEC)' the same courts have exp Dr Per conduct by counsel (e.g., comments received, but is not Y Investi ation and prosecution under recognized the propriety and lity ofuu.licitl persuaded that the proposed this type of rule. In Csopo, the United Federaferiminal statutes or amendments should be withdrawn or investigation and disciplinary action or modified in substantial ways as some States Court of Appeals for the District dis uahfication under standarde of commenters requested. However, the of Co umbia Circuit stated (533 F.2d at pro essional conduct for lawyers). In Commission has clarified its description 11) with regard to the SEC's some cases, the causes ofimpairment of of the standard for exclusion by stating sequestration rule that-the investigation may justify the threshold requirement as "concnte we do not question its utihty in prwerving consideration of criminal or other evidence that the presence of an the integrity of an inmtigauon and proceedings. However, the attorney representing multiple interests ac Sni28 it8 Practical nessity la cenain Commission's objectives, standard for would obstruct and impede the circumstances.
. action, burden of proof, and remedy, investigauon orinspection * * *" A 533 F.2d at 11. In SEC v. Higoshi, the f.e.. exc'usion of counsel from particular similar change was made in the Ninth Circuit said that "It}he r3ason for interviews, may differ widely from definition of "le]xclusion." The and purpose of the [SEC's] sequestration those associated with criminal statutes Commission has deleted the phrase rule are clear and there can be no or rules of conduct. Therefore, the
61782 Federal Register / Vol. 57 No. 350 / Tuesday. December 89,1993 / Rules Ond Regulations possibility of collateral or future actions licensing proceedings and issuance of preaance would obstruct and impede its f addressing misconduct in some cases orders. Investigation? Id. at it Therefore, the Commission does not interpret Csopo as bursuant suffidentto other basis to authority ignore the is an potential 8'AI'O#"'TMl8C*"dUCI limiting the grounds for exclusion of need for a direct determination of Most commenters indicated that the counsel to " misconduct." resentin Proposed standard for exclusion of whether the shou multiple interests counsel re$d be counsel excfuded was deficient because it did not CA PPlicadon of ge Rge fmrn an interview. require a showing of mismnduct or Most commenters expressed or As noted in the su plementary wrongdoing by the attorney representing endorsed the view that the information include in the notics of multiple parties Tlgse commenters supplementary information in b notice the proposed rule (56 FR 65949,65050- Benerally concede that unethical or of the proposed rule (56 FR 65949-December 19,1991), questions regarding illegal conduct by counsel, such as 65950; December 19,1991) shows that impairment ofinvestigation as a result encouraging or condoning perjury or the intended application of the rule is of multiple representation have adsen *D88SI DS i n
- Pattern of overt disruption inconsistent with Judicial direction.
in some cases in the ast. Sevem of the of the intbrview, would supply grounds They suggest that the Commiasjon's commenters argued t at the cited cases for exclusion. Concrete evidence that idenufication of concerns motiva did not involve any grounds for such c nduct is obstructing and the rule and of some of the poten y disqualification of counsel and that any impeding an investigation could lud to relevant evidence di,splaces the exclusion under the rule. However, the concrete evidence standard. concern about multiEle reEresentation Commission does not find as a matter of While ' concrete evidence was not - th I gic or law that there is no possibility defined expressly in the cases Commiss o be th e nal rule of a finding of concrete evidence of referenced above, the discussion and impairment on grounds other than application of that standard indicates estio en in th fut the courts require more than speculation misconduct e Commission has stated (56 FR . s n ce,6e essa h or wron doing by counsel. 65949,65950, December 19,1991), the w e nameW mm aW not find it necessary to rule out potential impairment. Rather, exclusion justification for this rule is not premised application of the rule to a case of counsel requires real of tangible on whether any pnorcase actually presenting concrete evidence of eviden:e demonstrating that the involved " concrete evidence that the nondisclosure of information by a investigation would be impeded as a investigation would be impeded. witness as a result of the presence of result of the multiple representation. NUMARC and another commenter counsel representing multiple interests Thus, the Commission recognizes that indicated that adoption of the proposed even though the counsel has not neither multiple representauon nor rule would be inconalstent with the engaged in misconduct. Moreover, speculation about a potential for Commission's efforts to eliminate whether or not an investigation will be obstruction of an investigation by, for unnecessary regulatory burdens (see. impeded could be irrelevant in a pure example, the mere sharing of e g ,57 FR 4166; February 4,1992 and misconduct case, informadon provided by an interviewee 57 FR 39353; August 31,1992).The The Commission also does not to a subsequent in'.erviewee,is a Commission disagrees with the interpret the legal precedent as sufficient basis to exclude counsel. suggestion that the rule fails to strike a permitting disqualification only for The Commission cannot predict in fair and reasonable balance between the misconduct, wrongdoing, or active any significant detail what set of right to counsel and the need for obstruction by counsel. Indeed,in circumstances will arise in particular information in investigations. In this stating the standard to which the investigadona that willlead to case, the Commission is expressly Commission must adhere, the court in application of the exclusion rule. In the adopting the judicial resolution of that Pros did not mandate "concate proposed rule, however, the
~
issue. That resolution does not involve evidence" of wrongdoing but rather Commission did endeavor to identify a highly prescriptive standard. Rather, it "
- concrete evidence' that counsel's some of the factual circumstances which involves a demanding general standard presence would impede [the agency's) would tend to support invocation of the that is expected to have very limited investigation? Pros,939 F.2d 1049 rule. For instance, it seems clear that the application in a fraction of NRC (citing SEC v. Csopo, 533 F.2d at it). Commission's interests in the integrity interviews under subpoena. The commenters insisting on the and effecuveness of its investigation NUMARC stated that the rule was necessity of misconduct or wrongdoing may outweigh a witnesses' choice of unnecessary because NRC rules as the essential substantive element for counsel for multiple interests where currently in effect (10 CFR part 2) disqualification point to Csopo,in there is reliable, factual evidence that a provide a mechanism for imporing which the Court of Appeals agreed with witness is withholding, or will sanctions for attomey misconduct in the lower court's finding that the SEC withhold,informadon criucal to the various contaxts. The existing had failed to produce any " concrete invesugation because the information provisions directly relating to standards evidenca" of misconduct (533 F.2d at B). will be shared with the witnesses' of practice (10 CFR 2.713) concern While that opinion clearly affirmed an employer or supervisor by virtue of appearance and practics in adjudicatory evidendary threshold of " concrete multiple representation.
proceedings. By this final rule, however, evidence"in relation to the alleged Thus, the Commission continues to the Commission intends to provide misconduct,the Court of Appeals also believe that evidence that the employee specific direction for expeditious found that the record failed to disclose had a concern that his employment resolution of decisions to exclude "any reason for barring counsel counsel because of obstruction or selected" by the witness (id.) (emphasis information wottld be jeo[nardized by transmittal rom the interview to the of impediment of investigative interviews added). And, the Court's specific 11censee would be relevant. The resulting from multiple representation, dirw. tion was that "before the SEC may Commission believes that evidence that Therefore, the final rule serves purposea exclude an attorney from its the multiple representadon would lead that are not met by the general to CFR proceedings,it must come forth * *
- to disclosure of the substance of an part 2-Rules of practice for domestic with ' concrete evidence' that (counsel's) interview to a future interviewee or
Federal Register / Vol,57. No. 250 / Tuesday, December 29, 1992 / Rules and Regulations 81783 ( subject in the investigetion would also notes that the same modifiers were h not sufficient of General Counsel. Another commenter be relevant ahhou6 present in the final rule published on recommended that the investigator be unless there was also cor. crete evidence January 4,1990 (55 FR 243), and that required to obtain a written opinion that the disclosure would obstruct and the cou21 of appeals did not comment on from the Office of the General Counsel impede the investigation. However, the their presence in that rule. Commission expects that it will be a that the standard of" concrete evidence" The itey requirement is " concrete has been met. The Commission ra e case in which there is actual proof evidence" of obstruction and that the multiple representation will disagrees because it has already added impediment. Whether the causation is numerous safeguards which it considers seriously obstruct and impede the described as direct or indirect, the to be sufficient,includirg the invesugation, e g., critical information is question in a particular case will be " consultation" requirement, to guide being or will be withheld. whether there is concrete evidence that agency officials and prevent arbitrary Some commenters misunderstood the the presence of counsel representing action in the exclusion process. The rule Commission's statement that concerns multiple interests would obstruct and arise about inhibiton of the candor of requires that the intemswing official impede the investigation. lt is the effects provide a written statement of reasons witnesses where the interviewee is of multiple representation, not multiple for the exclusion to the witness whose r-presented by counsel who is paid by representation standing alone, that may attorney has been excluded and to the the licensea and also represents the licensee or licensee's officials under in some cases impede the investigation. excluded attorney. The interviewing For instance,if there were concrete investigation, particularly where the official must consult with the Office of evidence that a present or future witness the General Counsel prior to invoking rr.atter at issue is w hether the licensee's will not answer questions or provide the exclusion rule. The witness whose employees have been, or are being, evidence because his attamey's he assed or intimidated for raising counsel has been excluded may appeal ufe*y issues (56 FR 65949; December representation of multiple interests will the decision to the Commission and necessarily result in the sharing of the automatically obtain a stay of the 19,1991). These commenters viewed witness' testimony or evidence with a effectiveness of that decision pending these statements as examples of cases in represented target, invocation of the rule decision by the Commission. which the Commission would deem could be warranted whether the cause of nclusion to be appropriate.The Of course, the Commission may also Cc.mmission recognizes that these the impairment is descnbed as direct or quash or modify the subpoena ifit finds indirect. Clearly, a mere chain of that the exclusion of counsel decision is cbcurr.stantes do not necessarily lead to inferences and speculation would not not based upon concrete evidence or if r'on. disclosure of cnticalinformation or constitute " concrete evidence." the subpoena is otherwise unreasonable, other serious impairment of the Nonetheless, the " concrete evidence" investigation. Exclusion of counsel or requires evidence not relevant to any requirement does not preclude a matter in issue. Moreover, the under the rule is warranted only when showing of obstruction and impediment Commission (like the SEC) must still there is also concrete evidence, not just through indirect effects, but rather rnere concern or speculation, that the prevailin court in a subpoena implicitly embraces the possibility of enforcement proceeding if the person ir vestigation willbe obstructed and such a showing. Therefore, the erpoded es a result of the presence of under subpoena declines to comply. A Commission has decided to delete the court in which the besis for the the counsel representmg multiple phrase "directly or indirectly" from the exclusion is litigated may also conduct mterests. rule as unnecessary. Several commenters expressed an evidentiary hearing if the factual For incrossed clarity, the Commission issues require it. SEC v. Csopo, 533 F.2d concem that the Commission would has also revised the standard for at 12. fmd obstruction and impediment to the exclusion by stating the threshold NUMARC recommended that in vestigation where minor requirement in $ 19.18(b) as " concrete $ 19.18(d) be revised to provide the-inconvenience results from such evidence that the presence of an witness and the witness' counsel an treditional activities of counsel as ettorney representing multiple interests opportunity to appest before the er:deavonng to learn more about the would obstruct and impede the in estigation or to advise clients to Commission in the course of the investigation or inspection. * * *"In Commission's evaluation of the appeal tesGfy tmthfully but cautiously. The the proposed $ 19.18(b), the requirement of an interviewing official's decision. Cammission recognizes that these types was descnbed as " concrete evidence The purpose would be to ensure that the cf activities do not establish real that the investigation orinspection will adversely affected parties had a right to tbcruction and impediment to the be obstructed and impeded, directly or im estigation. Indeed, these traditional be heard. The Commission believes that indirectly, by an attomey's the procedure in the final rule, tuvities of counsel are common to representation of multiple interests." A providing a statement of reasons for Iml representation of any witness, similarchange was made in the exclusion and permitting the Bling of a Some commenters fault the proposed rde's statement that disqualification definition of"le]xclusion"in 519.3. motion to quash, provides a reasonable The revised language tracks more mechanism for presentation of the views 3 r ey be based on concrete evidence that precisely the judicial articulation of the of affected parties. However, nothing in rnultiple reprosentation will"directly or threshold requirement. Thus the the rule prevents the witness moving to indirectly" tmpede the investigation. revisions further affirm and clarify the quash the subpoena from requesting an Several commenters state that the Commission's intent to follow the opportunity for an oral presentation in l Commission's use of these modifiers judicial guidance. connection with the tootion and statmg uniustifiably lessens and obscures the } D. Adequacy of the Procedures the reasons supporting the need for oral 1 "cor. crete evidence" standard. presentation. The Commission recognizes that the I NUMARC and another commenter The comments of PROS included the Court in Pros and Csopo did not use the stated that " consultation" by the ! suggestion that the rule, ifissued, be i modiners "directly or indirectly"in investigating official with the Office of amended to require that the witness be referring to the requirement of concrete the General Counsel before a decision to advised of the right to counsel at the evidence ofimpediment to the exclude counselis ineffedual without time of an exclusion of counsel and investiFation. However, the Commission the requirernant of consent by the Office prior to any subsequent interview.
-s I 61784 Fed:r:1 Regist:r / Vol. 57. No. 250 / Tuesday, December 29, 1992 / Rults end Regulations
, NUMARC recommended that internal would proceed with the interview of the approved by the Office of Management procedures to implement the rule witness until more than five days after and Budget approval number 3150-g should be amended to direct NRC the receipt by the witness and the 0044.
Investigators to advise witnesses of the counsel of the written statement of
.hgulat ry Analysis right to counsel, including a right to reasons for exclusion, unless the consent to rnultiple representation, and witness requests that the interview The APA affords individuals of the provisions of 519.18, including proceed without counsel or with new compelled to submit to agency inquiry the right to appeal any exclusion of counsel at an earlier date. Therefore, the under subpoena the right to be counsel. Commis':on has revised the text of the accompanied by counsel or other As a practical matter, a witness who proposA 10 CFR 19.18(e) to provide representative of choice (5 U.S.C.
is already represented by counsel can be that the interview shall not be 555(b)). This right to counsel guarantee expected to consult with counsel about rescheduled to . date that precedes the is not absolute and may be such issues as the right to counsel. expiration of the time provided under circumscribed within permissible limits consent to multiple representation and 10 CFR 19.18(d) for a when justice requires. An exception has witnesses' rights under this final rule. exclusioa of counsel,ppeal unless theof the been recognized for cases in which there witness Thus, while an investigator may consents to an earlier date. is concrete 6,vidence that the presence of reasonably inquire about issues of Aside from this minimum delay, counsel representing multiple interests consent to multiple representation in bwever, what constitutes a reasonable during an investigative interview would connection with an investigative priod of time for the continuation of an impede and obstruct the agency's interview,it does not seem necessary to interview after exclusion of counsel investigation. require that an investigator provide must be determined on a case-by-case Questions concerning the scope of the general direction or advice on rights and basis, with the interviewing official right ta counsel have arisen in the limitations regarding an attomey's taking into account the relevant context of NRC investigative interviews representation of multiple interests to a circumstances, including the of licensee employees when the witness already represented by counsel, availability of substitute counsel, the employee is represented by counsel who Moreover, the Commission was asked to complexity of the case and the grounds also represents the licensee or other require that investigators advise for exclusion, the date of actual notice witnesses or parties in the investigation. witnesses of the right to consent to to the witness and excluded counsel of This arrangement is not improper as a multiple representation, although even the grounds for exclusion and the general matter. This final rule provides, under standards of professional conduct Commission's need to complete the bowever, that counsel representing for lawyers such consent is subject to investigation promptly in order to multiple interests may be excluded from various conditions and excepdons. See, protect public health and safety. a subpoenaed interview if there is e g , Wheat v. United States. 486 U.S. PROS recommended that the witness concrete evidence that counsel's 153 (1988) (district court may refuse whose counsel has been excluded be Presence would obstruct and impede waiver of conflicts of interest in cases presented " concrete evidence" that the the investigation. This final rule also where a potential for conflict exists); new counsel has a previous record of delineates responsibilides of NRC f FTC v. Exxon. 636 F.2d 1336,1342 (D.C. accomplishment in, and knowledge of, officials and nghts olinterviewees in Cir.1980) (district court's order to retain the nuclear industry that is on the same connection with the exercise of the separate counsel because of potential level as the excluded counsel.The authority to exclude counsel. Thus, the conflict violated neither due process nor Commission disagues that it should rule is intended to further expeditious the APAL liowever, in order to ensure have the burden of initiating an and satisfactory resolution of NRC's that the witness is aware of the investigation and making a finding on inquiry into matters concerning public Commission's procedures for appeal of this question. The witness, not the health and safety. Guidance in this area the exclusion cecision, the Commission Commission, would choose new should reduce delay and uncertainty in has revised the text of the proposed counsel. Many counsel and law firms the completion of an investigation when --
$ 19.18(c) to require that the written appear in connection with Commission questions of multiple representation notice of the reasons for exclusion proceedings and investigations. arise. The fore > going discussion include a description of the rights Moreover, the Commission has already constitutes the regulatory analysis for provided in $ 19.18(d), regardmg the provided that a witness may either this final rule.
right to a peal the exclusion decision. proceed without counsel or request a Regulatory Flexibility Certification NUMA C recommended that delay for a reasonable period of time to proposed 10 CFR 19.18(e) be clarified to permit retention of new counsel. In accordance with the Regulatory assure that a witness' interview is Flexibility Act of 1980,5 U.S.C. 605(b), delayed automatically to at least the EnvironmentalImpact: Categorical the Commission hereby certifies that date of the receipt of the written Exclusion this final rule would not have a statement of basis far exclusion. An The NRC has determined that this significant impact on a substantial automatic delay is clearly unnecessary. final rule is the type of action described number of small entities. The final rule however,if the witness chooses to in categorical exclusion to CFR concerns an attorney's appearance at a proceed without counsel or with new 51.22(cl(1). Therefore, neither an subpoeused interview of a licensee's counsel at en earlier time. Moreover, the environmental impact statement nor an employee or other individual during an proposed provision already permits the environmental assessment has been NRC investigation or inspection in witness to request a reasonable period of prepared for this final rule, circumstances where there is concrete time to obtain new counsel, and the evidence that the attorney's witness may even obtain an automatic Paperwork Reduction Act Statement representation of multiple interests stay of the subp na during an appeal This final rule does not contain a new would obstruct and imp *de the of the exclusion decision to the or amended information collection investigstion or inspection. It provides Commission. requirement subject to the Paperwork procedures for exercise of the authority Nonetheless, the Commission would Reduction Act of 1980 (44 U.S.C. 3501 to exclude that attorney from the not expect that an interviewing official et seq.). Existing requirements were interview in these limited 4 h - - --. , , _ _
Federal Register / Vol. 57, No. 250 / Tuesday, December 89, 1992 / Rules and Regulations 61785 circumstances and for challenge of a concrete evidence that the presence of suvuARY:The Nuclear Regulatory 4 decision to exclude the attorney. an attomey representing multiple Commission is amending its regulations Backfit Analysia interests would obstruct and impede the to makn a needed clarification to investigation or inspection, the agency previously published requirements ne NRC has determined that a official may prohibit that counsel from governi the availability of material tackfit analysis is not required because being present during the intarview, approv for incorporation by reference these amendments do not involve any (c) The interviewing officialis to The amendment clarifies that copies of provisions which would impose backfits provide a witness whose counsel has rnatorial which have been incorporated as defined in 10 CFR 50.109(a)O). been excluded under paragraph (b) of by reference are maintained and List of Sub}ects in 10 CFR Part 19 this section and the witnests counsel a available for review at the NRC Library written statement of the reasons EDICTWE DATE: December 29,1992 Criminal penalties, Environmental supporting the decision to exclude. ' Itis protection, Nuclear materials, Nuclear FOR NRTHER INFORMATION CONTACT: statement, which must be provided no power plants and reat: tors Occupational later than five working days after Michael T. Lesar, Chief, Rules Review safety and health. Radiation protectim, exclusion, must ax lain the basis for the Section, Rules Review and Directives Reporting and recordkeeping Branch. Division of Freedom of requiremants, Sex discrimination. counsel's exclusion. This statement must also advise the witness of the information and Publications Services. For the reasons set out in the Office of Administration, U.S. Nuclear preamble and under the authority of the witness' right to appeal the exclusion Atomic Energy Act of 1954, as amended, decision and obtain an automatic DC stay20555, of Regulatory TelephoneCommission, (301) 492-7758Washington, the Energy Reo anization Act of 1974, the effectiveness of the subpoena by ss amended, an S U.S.C. 552 and 553, fil ng a motion to quash the subpoena $UPPLEMENTARY INFORaAATION, with the Commission within five days the NRC is adopting the followmg Backgmund of receipt of this written statement. amendments to 10 CFR part 19. (d) Within five days after receipt of The Nuclear Regulatory Commissior. P ART 19-NOTICES, INSTRi)CTIONS the writtu notificatim mquired in is revising those portions of to CFR AND REPORTS TO WORKERS: paragraph (c) of this section, a witness chapter I that teference the availability INSPECTION AND INVESTK1ATIONS whose counsel has been excluded may of materials that have been approved by appeal the exclusion decision by filing the Director of the Office of Federal 1 The authority citation for part 19 a motion to quash the subpoena with Register for incorporation by reference continues to read as follows: the Commission. The filing of the Current references within 10 CFR hthority: Secs. 53,63,81,103,104,161, motion to quash will stay the chapter Iindicate that copies of material 166 68 Stat. 930,933,935,936. 937,948, effectiveness of the subpoena pending which have been incorporated by in. es amended, sec. 234,83 Stat. 444, as the Commission's decision on the reference are available for inspection at a:nended (42 USC 2073,2093,2111,2133 motion. the Commission's Public Document 2134. 2201,2236,2282); sec. 201,88 Stat. (e)If a witness' counselis excluded Room.This amendment revises the text 1242, as amended 142 USC 5&41). Puh L M-601, sec 10 92 Stat 2951 (42 U.S C under paragraph (b) of this section, the of to CFR chapter I to indicate the interview may, at the witnesa' request, current location where this material is , either proceed without counsel or be available for inspection. The material
- 2. In $ 19.3,the definition of delayed for a reasonable period of time which has been approved for Exclusion" is added in alphabetical to permit the retention of new counsel, incorporation by reference is mder to read as follows: The interview may also be rescheduled maintained and available for inspection g ,,3 %% to a subsequent date established by the in the NRC Library, which is located at NRC, although the interview shall not 7920 Norfolk Avenue, Betheede
~
be rescheduled by the NRC to a date that Maryland 20814, b.clusion means the removal of precedes the expiration of the time Beause this la an amendmem daeling iom in e ew wh ne r RC Provided under $ 19.18(d) for appeal of with agency practice and procedures official conducting the interview has the exclusion of counscl unleas the the notice and comment provisions of concrete evidence that the presence of witness consents to an earlier dCa. the Administrative Procedure Act do tlie counsel would obstruct and impede Dated at Rockville. Maryland, this f ath day not apply pursuant to 5 U.S C. the particular investigation or of December,1992. 553(b)(A). The amendment is effective in9 ction, Fw the Nuclear Regulatory Commission upon publication in the Federal
. . . . . Samuel J. cink. Register. Good cause ensts to dispense
- 3. In $ 19.18, paragraphs (b}-(e) ar, Smerary of the Commission. with the usual 30-day delay in the edded to read as follows: IFR Doc. 92-31247 Filed 12-26-92: 8 45 aml
**" C * * * * ' of a minor and administrative ~naturv U91e sequestration of udtnessee and dealing with the location where esclusion of covnaet in interviews referenced documents are avallable for
* ***d""d*"D9 *** 10 CFR Parta 34,35,50,73, and 110 inspection.
(b) y tne compelled by RIN 3150-AD54 ro[mentallmpact Categorical subpoena to appear at an interview during an agency inquiry may be Material Approved for incorporation by The NRC has determined that this accompanied, represented, and advised Reference; Maintenance and final rule is the type of action descnboo ny counsel of his or her choice AvallabmtY in categorical exclusion 10 CFR However, when the agency official ACEHct Nuclear Regulater) 51,22(c)(2). Therefore neither an cunducting the inquiry determines, afiar Commission. environmentalimpact atsteman' nor an consultation with the Office of the enytronmental assesament bas been General Counsel, that the egency has Am Final rule. prepared for this final rule
w.:. () 2 )) @ . sj; ;, 3.. 93,( }:' REPORT-OF THE-ADVISORY. COMMITTEE
- FOR REVIEW OF INVESTIGATION POLICY ON RIGHTS ~.OF LICENSEE EMPLOYEES UNDER INVESTIGATION 4
t t Submitted to the 1 Nuclear Regulatory Commission September 13, 1983 e. s. 4 Earl J. Silbert,-Esq. Chairperson James A.-Fitzgerald,TEsq.
-Oscar M.ERuebbausen, Esq.
Joseph B. Scott, Esq.. Professor Ralph S. Spritzer, Esq. 334.g-lod
Report of The Advisory Committee For Review of Investigation Policy on Rights of Licensee Employees Under Investigation Introductiorj The Advisory Committee For Review of Investigation Policy on Rights of Licensee Employees Under Investigation (hereinaf ter
" Advisory Committee"), was created by the Nuclear Regulatory Commission (hereinafter "NRC" or the " Commission"). Its charter, attached as Exhibit 1, became effective on February 25, 1983. Subsequently, by letter dated April 31, 1983, attached as Exhibit 2, the Commission delineated " exactly what questions the Advisory Committee should address."
In addressing these questions, the Advisory Committee has sought and considered t. wide variety of documentary and testimonial input. It has held two full days of hearings open to the public. Notice of the meetings, pursuant to the Federal Advisory Committee Act, was published in the Federal Register. All witnesses who wished to be heard had an opportunity to present their views at the hearings. Others made submissions in writing. In nddition, the views of some individuals and organizations were actively solicited by the Advisory Committee. Thus the Committee heard from federal investigators and from representatives of industry, unions, and the "public interest." Included among these were the Director of the Commission's Offices of Investigations and his chief assistants, a number i l
]
~
of attorneys representing licensees or vendors who appeared individually and/or in behalf of the Atomic Industrial Forum, investigators of other federal agencies, representatives of the International Brotherhood of Tlectrical Workers and their counsel, a representative of the Professional Reactor Operators Society, and the Legal Director of the Government Accountability Project (GAP) of the Institute for Policy Studies. Among the written materials reviewed by the Committee were the following: letter dated August 13, 1982, from Gerald Charnoff, Esq. and J. Patrick Hickey, Esq. to the Chairman of the NRC; Inspection and Enforcement: Conflict or Cooperation, an address by Messrs. Charnoff and Hickey to the 1982 Annual Conference of the Atomic Industrial Forum; letters from Richard Littel, Esq. dated May 25, 1983 and June 3,1983; a letter from James B. Burns, Esq. dated June 3,1983; a proposed " Advice to Interviewees" presented by Gerald Charnoff, Esq. by letter dated June 3, 1983; a etatement of Paul Shoof, International Representative of the International Brotherhood of Electrical Workers; memorandum dated March 4, 1983, to Ben B. Hayes, Director of the NRC's Office of Investigations, from the Secretary of the NRC, pertaining to policies of the Office of Investigations; and a letter dated July 16, 1982 from the NRC , Chairman to the then Acting Director of the Office of Investigations, James A. Fitzgerald (a member of the Advisory Committee) delegating certain authority. i
E3_ _ Despite: - the large. volume of this testimonial' and I
- documentary- information _and pertinent - legal materials considered by_the Advisory Committee, the Advisory Committee has concluded that a comparatively brief report to the NRC which focuses solely on the specific questions the. Commission wished 9
addressed would be most consistent with the mandate of the
., Committee.
1 t T i i G 6 ' '
= -se97 ..%- v- , -s-reey wm>-y-- we - -- , - - - - - v--y + -- - - - - - ,-er- -
l 4 Question 1. Should the NRC as a matter of policy apprise all interviewees prior to an interview that they have a right to have an attorney presant? Initially, it is important to note that employees of licensees have no "right" to have counsel present during
, interviews conducted by NRC investigators when the employee hat not been subpoened. The Committee understands, however, that the Commission permits counsel to be present at such interviews upon request. The question before the Committee is whether, as a matter of policy, notico of this opportunity to be accompanied by counsel should routinely be given to a prospective interviewee before an interview is conducted.
The Committee has concluded that the NRC should not adopt such a policy. The Committee believes that there are no perWasive policy reasons for adopting such a notice requirement and that there are important policy considerations which support rejection of this proposal. Ths primary arguments presented to the Committee in support of routinely providing notice of an opportunity to be accompanied by counsel were that not providing such notice would (1) disadvantage those who are unsophisticated and ignorant of their rights and therefore moet in need of this advice, and (2) deter 1 i employees f rom willingly assisting in the investigative process. ! The Committee believes these arguments must be considered in two separate situations: (1) in the usual interview in which the purpose of the OI investigation is to discover and assemble information to determine whether safety regulations or
l . procedures have been violated and, if so, by whom; and (2) in the unusual case in which the investigation changes from information- gathering to a focused effort to establish the criminal liability of a particular witness. Most of the interviews conducted by NRC's Office of Investigations (01) involve persons who are not themselves suspected of wrongdoing, malfeasance or the like. They are being interviewed solely for the information they may have and 01 investigators do not have a reasoned basis for believing that their responses will expose them to potential criminal liability. Under these circumstances, the need for advice about counsel appears minimal. Moreover, rather than enhancing the willingness of employees to assist in the investigation, the Committee believes that there is a risk that adopting a mandatory notice policy could impede the investigative process. Regardless of how it is formulated, such notice may convey to interviewees a false impression of personal vulnerability and thereby cause them to resist providing assistance that might otherwise be forthcoming. In addition, providing such notice could unnecessarily formalize the investigator / interviewee relationship with a resulting adverse affect on the flow of information to NRC. Importantly, the Committee is unaware of any other federal agency with such a policy or practice, despite suggestions to the contrary by several of the Committee's witnesses. If the policy of giving interviewees this notice encouraged cooperation l
l
)
of witnesses, one would expect that other agencies would have adopted such a policy. That they have not indicates that they
)
are at least doubtful that providing the notice would be helpful. The importance of NRC's mission and the fact that the public interest is directly implicated in nost NRC investigations suggest that the NRC should not adopt a policy, apparently unique, that might impede its investigations. We therefore recommend against a policy for notice in the normal interview situation. The Committee has also considered whether notice with respect to counsel should be given when the investigator has reasonable grounds to believe that the interviewee has engaged in wrongdoing, malfeasance or some other dereliction of duty for which the individual could be personally, but not criminally, accountable. As a practical matter, it would f requently be very difficult for an NRC investigator to know whether or not the individual being questioned could be held civilly accountable for his or her conduct. The Committee believes that malfeasance .nnd dereliction of duty are so imprecise and that potential civil liability so varied that a notice rule linked to these concepts would be unworkable. Even in those situations in which the risk of a civil sanction is clear, i.e., loss of an operator's license, the Committee believes that OI's need to obtain information that concerns its safety-related functions
. outweighs any policy reasons for the OI investigator to give notice of the opportunity to consult with counsel.
There remains the situation where the important information-gathering function of 01 becomes secondary to the
, effort to establish criminal liability of an interviewee whom 01 already has reasonable grounds to believe has committed a crime. In this narrow instance, the Committee recommends that notions of fairness and decency which lie at the heart of all governmental conduct warrant the ' target" being advised of his opportunity to consult with counsel.
Although existing law does not require this notice in noncustodial situations, the Committee does not intend this nor consider it as a substantive departure from existing practice. For example, Special Agents of the Internal Revenue Service by internal rules routinely advise taxpayers under investigation of the so-called Miranda rights whether or not the person is in custody and even at a preliminary phase of their investigation j when the basis for the investigation is mere suspicion. Other investigative agents, from the testimony before the Committee, have given advice of Miranda rights in the past or presently as a matter of individual practice. That they are criminal investigators is relevant but not dispositive. OI investigators have overlapping responsibilities. They may, for instance, be considered criminal investigators under 18 U.S.C. 5 1510 for l purposes of persons obstructing a criminal investigation. L 1 l l
l s- . Information they obtain may be referred'to the Department of I e Justice and form the basis for a criminal prosecution. The Committee recognizes that the primary goal of OI I investigators is to get to the bottom of allegations of -
, violations of NRC requirements which may have a potential for - ;
causing great harm to the public. There is, accordingly, a
, strong public interest in the NRC's obtaining necessary information from all possible sources. The notice requirement recommended by the. Committee should not unduly interfere with '
this primary 01 function since it is applicable only when the - OI already has reasonable grounds to believe that the interviewee P has committed a criminal offense and its focus shifts to ; obtaining further evidence of that person's criminal liability. In this instance, because the witness may not realize he is a ; target for criminal referral and potential prosecution, the , limited notice should be given. The Committee believes that even -in this exceptional situation, the investigator should retain the discretion to ' determine whether to convey the notice orally or in writing, as well as its precise formulation. While the committee is mindf ul that this may result in some lack of uniformity, that is a consequence of preserving the flexibility that the office of Investigations, in the Committee's view, must-have. Finally, during the course of the Committee's hearings s several witnesses suggested that other affected parties, including the licensee and the collective bargaining
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9- . representative, should routinely be given notice of all interviews so that they could be present or offer to be present, either as participants or observers. The Committee is unaware of any precedent for such a policy and disfavors its adoption by the NRC. In the committee's view, the routine presence of-such additional persons at these interviews would so alter their investigative character as to deprive the NRC of the value of
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Separate Statement of Committee Member Professor Ralph S. Spritzer: In addressing Question 1, the Committee recommends that a prospective interviewee who is a target of the investigation in the sense that there is reason to believe that he has committed a crime be advised of his opportunity to consult with counsel "where the important information-gathering function of OI becomes secondary to the ef fort to establish criminal liability" of the interviewee. I agree that considerations of fairness call for advice in this situation. I would not restrict the giving of advice, however, to the case where the investigation of criminal liability is the primary purpose of the investigation. In my view, it is desirable that an effective warning (one that covers the opportunity to seek and be represented by counsel, and the Fifth Amendment privilege) be given whenever there is reasonable likelihood that the interviewee's responses to the investigator may be self-incriminatory, whether or not prosecution, at that stage, is the investigator's primary concern. In short, I believe that it is enlightened public policy to see to it that the interviewee or witness threatened with the danger of self-incrimination is aware of his prerogatives. The sophisticated witness has that awareness. The vitness who is uninformed to begin with should stand on equal footing.
puestion 2. May, and, if so, should the Coimaission limit an interviewee's choice of counsel by excluding from the interview any attorney who also represents the entity being investigated */ In responding to this question, we note at the outset that interviews conducted by the Of fice of Investigations or by the Office of Inspection and Enforcement have almost invariably been conducted without the aid of legal process. Doubtless this will continue to be the usual situation, although there may be occasional instances in which the Commission will resort to the issuance of compulsory process. Where legal process has not been issued, the prospective interviewee may always decline to appear or to cooperate. Also, of course, he or she may decline to participate unless permitted to appear with counsel of his or her choice. It follows that an investigator has one of two options if an interviewee not under subpoena insists that he or she be represented by a particular attorney: the investigator may permit the attorney to be present or forego the conduct of the interview. 1/ 1/ The investigator's decision on whether to forego the interview probably will be made by balancing the need for the interview against the potential prejudice to the investigation of having that particular attorney present at the interview. In this connection we note the apparently wide-spread belief of investigators that the presence of an attorney representing both the entity being investigated and the witness being interviewed may, in some circumstances, harm the investigation by inhibiting the f reedom with which employees comunicate to NRC investigators. This inhibition stems, investigators and others believe, from the concern that whatever the employee
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4 This right of an interviewee to decline to cooperate if unaccompanied by counsel of his or her choice or, for that matter, by another person such as a union representative, includes the right to be accompanied by counsel for the licensee or other company counsel. The Office of Investigations obviously has no authority to prohibit an interviewee from being represented by such counsel or from being accompanied by a union representative, fellow employee or friend. Moreover, prior to (cont.) states to investigators will be reported to the company, even if harmf ul to the employee or the company. The representatives of the industry who appeared before the Advisory Committee disputed this, stressing that having available company counsel may, to the contrary, provide reassurance to the witness, help ease whatever anxiety he or she may have, and thereby enhance the freedom of communication. Another point raised by investigators and other witnesses was the concern that if the NRC allows company counsel to be present at interviews of their employees, the latter will not be able to refuse the offer of company counsel to be present without adversely affecting their employment status with the company. The response of the industry representatives to this is that experience has shown that employees, when offered the assistance of company counsel, often do in fact reject the . offer. The empirical evidence presented to the Advisory l Committee on these matters was minimal. Although the Committee
- believes that the responses of the industry representatives may accurately reflect what occurs in some cases, common sense l
dictates that at least in other cases, employees will be reluctant to refuse the offer to be represented by company counsel and to communicate freely in the presence of company Counsel. l l One final point is the concern of the investigators that l company counsel, when reporting back to the company what transpired in the interview, will reveal the direction and scope of the investigation and thereby potentially prejudice the investigation by allowing the company to af fect the availability or content of testimony or documents subsequently sought by the investigators to the company's benefit. l l
, or during an investigation, a licensee, contractor, subcontractor, vendor, or union has the right to advise its employees or union or nonunion members of their right to have present counsel, including counsel for the company or a union
, representative. This procedure has been followed in prior NRC investigations and no basis exists of which this Committee is aware to preclude it from being done in the future. 2/
Although in informal interviews the NRC cannot prohibit interviewee-selected company counsel, union representative or specific friend from attending the interview, nothing would prevent the investigator from discussing with the company, its counsel, the union, or special friend the reasons why they should not attend an interview of a service employee in a particular case. Similarly, if such counsel, union representative or friend appears at an interview, there is nothing to prevent the Of fice of Investigations from following a procedure analogous to that which an Internal Revenue Service officer may pursue at an interview of a summoned third party 2/ The law, of course, makes it unlawful to obstruct an Investigation by agents authorized to conduct investigations of criminal conduct. 18 U.S.C. S 1510. Any communication, oral or written, that appeared to violate this law would, we l assume, be referred to the Department of Justice for appropriate investigation. It was suggested that guidelines be adopted setting forth what advice could properly be communicated to l_ employees and others without exposure to the charge of l obstruction of justice. The Advisory Committee considers this i impractical. What is controlling in such matters is the intent j with which advice is given, an intent that will be predicated on an assessment of surrounding circumstances. No simple formulation is possible.
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witness. See Internal Revenue Service Manual f 4022.42, MT 4000-181. The IRS of ficer may first explore the potential conflict of interest with the attorney, and if the matter is. not resolved, he may ask the witness such questions as whether
, the witness wishes an attorney to be present, who hired the attorney, who is paying for the attorney, whether the witness understands that the attorney represents others, and whether the witness realizes that there is a potential conflict of interest. As the IRS Manual recognizes, the witness ordinarily is entitled to have counsel of his choice present. Only under
" extreme circumstances" will the IRS attempt to seek disqualification of counsel in court. Although these IRS procedures apply to witnesses formally summoned for an interview, the Advisory Committee believes that these procedures can be adapted to the voluntary setting of field interviews by NRC investigators.
The remaining question is whether the Commission, in a situation where it undertakes to compel testimony by issuance of a subpoena, may appropriately issue an order, or seek a court order, limiting the witness' choice of counsel. Section 6(a) of the Administrative Procedure Act broadly provides, "A person compelled to appear in person before an agency or representative thereof is entitled to be accompanied, represented and advised by counsel. . . ." 5 U.S.C. S 555(a) . The " plain and necessary meaning of this provision" is that the person summoned is entitled to " counsel of [his) choice," Backer v. Commissioner, l l l l .=
l - t 15 275 F.2d 141, 144 (5th Cir. 1960). Accordingly, the courts have been restrictive of occasional efforts by administrative agencies to exclude, on conflict-of-interest grounds, counsel chosen by a witness. The issue posed by the Commission's Question 2 has much in common with the issue presented to the court of appeals in S.E.C. v. Csapo, 533 F.2d 7 (D.C. Cir. 1976). That case involved the application of an S.E.C. sequestration rule providing that absent permission no counsel for a witness "shall be permitted to be present during the examination of any other witness called in such proceeding." The court stated (p. 11): We are of course mindful of the historical antecedents of the sequestration rule and of the important purposes which it is designed to serve. See Torras v. Stradley, 103 F. Supp. 737 (N.D. Ga. 1951); United States v. Smith, ~ 87 F. Supp. 293 (D. Conn.1949 ) . We do not question its utility in preserving the integrity of an investigation and recognize its practical necessity under certain circumstances. But we are not for that reason at liberty to ignore the clear congressional mandate [Section 6(a), Administrative Procedure Act] referred to above. Thus, before the SEC may exclude an attorney from its proceedings, it muct come forth, as it has not done here, with
" concrete evidence" that his presence would obstruct and impede its investigation.
An earlier Ninth Circuit case involving the same sequestration rule likewise upheld its " general propriety," but . held that it must be accommodated to the demands imposed by the ( Administrative Procedure Act. S.E.C. v. Higashi, 359 F.2d 550 (9th Cir.1966) . The court concluded that Higashi, a corporate l 1
director, might not be deprived of the services of corporate counsel because that would deny him the services of the attorney who might be of greatest help to him. We are satified that a blanket rule excluding "any attorney who also represents the entity being investigated" would not be sustained by the courts. An order of exclusion addressed to a particular situation might be upheld, in the words of the Csapo opinion, if there was
" concrete evidence" that the attorney's presence would obstruct the proceeding.
We are accordingly of the view that it would be appropriate to enter or seek an order of exclusion only where (a) a witness has been ordered to testify, and (b) there is concrete evidence that the chosen representative of that witness is in such a position that his participation as counsel would seriously prejudice the investigation. l i i
- - Question 3. Should the NRC allow interviewees to tape record the interview and/or should the NRC record the interview at the request of an interviewee?
In responding, we have limited our consideration to interviews that are voluntary or conducted without the aid of legal process. These represent the large majority of NRC investigatory interviews. Being voluntary, we believe the interviews accordingly should be conducted in a manner agreeable to the parties. If an interviewee insists upon tape-recording the interview or having it tape recorded by the NRC, we would expect the NRC to accommodate this wish or terminate the interview. As subsidiary questions, it is asked: (a) whether the NRC should advise the interviewee, prior to the interview, of the right to tape record it; and, if so, what form the advice should take? Tape recording is a privilege or an option available to the interviewer and interviewee. We do not think it rises to the dignity of a right in the context of a voluntary interview. Similar privileges extend to the time and place of an interview and to whether third parties are present or whether a written summary is prepared and signed by the interviewee. If the circumstances of. the interview are agreeable to the participants, we do not think any advice need be given as to
4 . l
-i the other optional ways in which the interview might be l 6
conducted. (b) under what circumstances should the interviewee be ! allowed to keep the tape or a copy of the tape? ; If the interviewee has arranged for the tape recording, it seems to us the dominion over the tape belongs to the-interviewee, not to the NRC. It is for the interviewee to , decide who is to have custody of the tape and whether copies
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should be made. If on-the other hand the NRC makes the tape recording, the situation is reversed and the decisions are up to the NRC to make. Normally, we would think the NRC should make a copy available to the interviewee, with such charge for its ; costs as may be deemed appropriate. (c) whether, if the interviewee records the interview, i and the NRC does not, the NRC may insist on having a copy to the tape? I We do not think the NRC is in any position to insist on receiving a copy of the tape. It _may request a copy. The interviewee may offer a copy. But if the NRC really wants a copy, it has the option of recording the interview for itself. j 2 4 3
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Question 4. Should the NRC give all Interviewees express grants of confidentiality? The Advisory Committee believes that the term
" confidentiality" must be precisely defined for meaningful
, discussion and coverage in NRC's investigatory policies. As understood by the Committee, it is the withholding from dissemination to the public (including licenseos, vendors, or other employer organization) of the name and other personal identifiers of certain individuals who provide information to the Commission, subject to some limitations as discussed below.
It is to be distinguished from formal " Informer" designation whereby some agencies essentially contract with carefully screened individuals not to divulge their identities under almost any circumstances in return for information. This latter category may include such measures as providing the individual with money, job and even a new identity if he/she is compromised. We believe that the considerations against granting confidentiality to all interviewees outweigh those in favor of such a universal grant. The considerations weighing against such a blanket approach are as follows: Ef fective confidentiality agreements are extremely difficult to implement. Not only must the name and obvious personal identifiers, such as position or job title, be protected, but other information as well. This could include relationships to other individuals, presence at events or meetings, and other i
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matarial from which the interviewee's identity might be inferred. While dif ficult, this is achievable on a selective basis but as a practical matter not feasible for wholesale use. Me perceive that inadvertent breach of the confidentiality promise is very likely if there are widespread confidentiality grants. The publicity resulting from breach of these agreements, however unintentional the breaches may have been, can seriously harm the investigative program by deterring others from coming forward who had important information but who will disclose it only on a promise of confidentiality. Reports of investigations which contain confidentiality grants are more difficult to use. The more reports are expurgated to preserve confidentiality, the more cryptic they become. Confidentiality requires that the Commission staff endeavor to keep some information from adjudicatory boards and parties or, alternatively, seek protective orders. It may also impede the staff's enforcement purposes. Finally, it could restrict the use of these ' reports by Congressional overeight committees. Confidentiality grants can make it more dif ficult to conduct the investigation. For example, when a person has been given confideratiality, the investigators are not free to use his name and other information which M -
may identify him as the source in eliciting information from other interviewees. In some instances, confidentiality conceivably may serve to protect wrongdoers. The major reason for considering a universal express grant of confidentiality is the possibility that it might increase the flow of information to the NRC. However, we are aware of no empirical evidence that this would occur. Indeed, as noted above, the widespread employment of such grants could decrease the flow of unsolicited information through inadvertent breaches of confidentiality. In addition, we believe an experienced investigator will normally not need confidentiality to obtain information from the great majority of witnesses.
- a. What limitations, if any, should be placed on grants of confidentiality by the NRC?
The Committee believes that grantn of confidentiality should be in writing, signed by an NRC investigator, and contain an acknswledgement by the interviewee that he understands the agreement. Further, we believe it prudent to include in the agreement the following limitations: That the interviewee's identity may be communicated to other public agencies if necessary to fulfill their statutory responsibilities; That the interviewee may waive confidentiality by taking action inconsistent with confidentiality such as disclosing his/her identity or providing
information to another person that contradicts the information provided to the NRC That the confidentiality is not absolute and the NRC may have to disclose his/her identity in response to an order of a hearing board or a court. The limitations set out above are not all-inclusive. Because the NRC is free to grant or withhold confidenticlity as it sees fit, it may impose any conditions or limitatics;s on the grant which it considers appropriate in a particular case. We deem it most important that the agreement candidly reflect the limitations on the grant of confidentiality.
- b. Should there be different policies for different types of interviewees, e.g., those who come forward on their cwn, and those whom the NRC has to seek out?
There are various types of interviewees for whom different policies on confidentiality could be forged, e.g., supervisory /non-supervisory, licensee /non-licensee employees, voluntary / compelled, executive /non-executive, those who come forward on their own/those approached by the NRC. rsc *use the subject matter of investigations varies widely, we do .'c c believe that any rigid policy differentiations should be adopted for . these various groups. Rather, we believe that the status of various types of interviewees may, on a case-by case basis, be one of several relevant factors which should be considered in determining whether to grant confidentiality to a particular i l i P
i interviewee, the principal factor being the investigation's need for information. We are aw6re, however, that Part 21 of the Commission's regulations can be read as providing express confidentiality to certain individuals who voluntarily come forward with information, as opposed to those who are sought out. 10 CPR 21.2. Nonetheless, for the reasons set forth above, we do not believe drawing such a distinction outside of Part 21 is warranted,
- c. Should the NRC grant confidentiality in the absence of a request for confidentiality?
The Committee does not believe that the NRC should normally grant confidentiality in the absence of a request. However, if it is apparent to an investigator that there is unusual apprehension on the part of the interviewee or a withholding of information, he should explore this and use sound judgment as to raising the subject of confidentiality on his own initiative. I
- d. Should the NRC advise witnesses of the availability of confidentiality, and, if so, what form should this notification take?
The Committee believes that the NRC should normally advise individual witnesses of the availability of confidentiality only when, in the judgment of the investigator, the grant of confidentiality may be appropriate and the advice of its availability may persuade an otherwise reluctant interviewee to provide information. The form of notice should be left to 1
, , the discretion of the investigator. If confidentiality is granted, howe ver, it should be in writing as discussed above.
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Respectfully submitted, f Earl J. Silbert,-Esq. ! Chairperson n uw es A. Fitz@rald, Es4 Qw h. L,; O wen Oscar M. Ruebh hsen, Ecq. JosphB.fcott, Esq. t I. t (. . h 2,.rr..f~ Ralph.S. Spritzer Esqj-September 13, 1983
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,', " UNITED STATES NUCLEAR REGULATORY COP. MISSION Charter for Advisory Co=mittee for Review of Investigation policy on Rights of Licensee Employees Under Investigation
- 1. Official Designation Advisory Committee for Review of office of Investigation
- Policy on Rights of Licensee Employees Under Investigation
- 2. Objectives and Scope of Activities and Duties To provide the Co==1ssion comments on the subject of rights of licensee employees under investigation.
Specifically the Committee is to provide comments on what these rights ought to be, whether such employees should be informed by NRC of their rights, and, if they are to be informed, when and how they should be informed. The Committee is also expected to identify and comment on the considerations that bear upon discretionary NRC actions, including the effectiveness of NRC investigations ' and fairness to the interviewee and the licensee.
- 3. Time Period Three to five months.
- 4. Acrney to Whom the Committee Reports U. S. Nuclear Regulatory Commission
- 5. Acency Responsible for Providing Necessary Support U. S. Nuclear Regulatory Commission
- 6. Duties As set forth in Item 2 above.
- 7. Cest
- a. $8,000 (allowed expenses, including travel and per dien).
- b. Less than one man-year. .
B. Estimated Numi.ser of Meetings Two to three mee{ings. . e
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9.. ,ffrmination Datn - Approximately three to.five months from date'of filing.-
- 10. Date'of Filing John C. Hoyle Advisory Committee
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ss o ... April 11,1983 o w nuau Earl J. Silbert, Esq. Schwalb, Donnenfeld, Bray & Silbert Suite 400 2828 Pennsylvania-Avenue, N.W.
. Washington, D.C. 20007 Ret NRC Advisory Committee on Rights of Employees Under Investigation
Dear Mr. Silbert:
The Commission believes that in: order to aid the Advisory i committee in its deliberations it would be advisable to delineate oxactly what questions the Advisory Committee should address. Those questions are as follows:
- 1. Should the NRC as a matter _of policy apprise all interviewees priorito an interview that they have a j right to have an attorney present? *
(a) Should there.be different. policies for those merely being questioned to obtain information and D for those being personally investigated, 1.e.,
" suspects"?
(b) If the NRC should advise-interviewees of their right to an attorney, what form shuuld that advice take, i.e. acknewTe3ge, ment, etc.? published rule, oral advice, signed 2
- 2. May, and, if so, should the Commission liinit.an interviewee's choice of counsel-by excluding'from the interview any attorney who also represents the. entity being-investigated?
- 3. Should the NRC allow interviewees to. tape record the 1
. interview and/or should-the NRC record;the~ interview atl the: request of an interviewee?- n
'(a) If_so,.should the NRC advise of this right prior to the interview, and, if so, what form should
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2 l (b) Under what circumstances should the interviewee be allowed to keep the tape or a copy of the tape? (c) If the interviewee records the interview but the NRC does not, should the NRC insist on having a copy of the tape?
- 4. Should the NRC give all interviewees express grants of confidentiality?
(a) What limitations, if any, should be placed on grants of confidentiality by the NRC7 (b) Should there be different policies for different types of interviewees, e.g., those who come forward on their owr. and those whom the NRC has to seek out? (c) Should the NRC grant confidentiality in the absence of a request for confidentiality? (d) Should the NRC advise witnesses of the availability of confidentiality, and, if so, what form should this notification take? I hope this further guidance will assist the Committee in its task. The Commission would, of course, welcome any other comments which the Committee might have on these subjects. Sincerely, s '/8sE A
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?vE imti .s r;te,vit.E MEMORANDUM FOR: James L. Blaha MlM Assistant for Operations Executive Director for Operations FROM: p Ben B. Hayes, Directe d Office of InvestigafTons
SUBJECT:
DRAFT FINAL RULE ON THE SEQUESTRATI0l4 0F WITNESSES INTERVIEWED UNDER SUBPOENA AND THE EXCLUSION OF ATTORNEYS (E00 Cor, trol Number 0004630) This memorandum is provided in response to your tasking of August 2,1989, in reply to a memorardum to your off1ce from James A. Fitzgerald, Assistant General Counsel for Adjudications and Opinions, dated July as above. I would first like to thank the Office of General Counsel27,1989,(.OGC) subject for their fine work on this rule, which is most important to the Office of Investigations (01). There were no negative comments regarding the draft rule fron either my headquarters staff or the 01 field offices. I also had each field office review their files for examples of past problems with sequestration of witnesses or the exclusion of attorneys. I have attached the examples received from the field. If there are any questions, please contact Bill Hutchison of my office (2-34B4). Attachments: As stated cc: H. Thompson, DEDS, w/o attach J. Fitzgerald, CCC, w/ attach Ef'()) qvo%.
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MEMORANDUM FOR: Ben B. Hayes, Director Office of Investigations FROM: Chester W. White, Director Office of Investigations Field Office, Region I
SUBJECT:
DRAFT SEQUESTRATION AND EXCLUSION RULE Pursuant to your July 22, 1989 memorandum, following are examples of incidents where, we believe, attorneys impeded our investigation, or at a minimum, prevented full and complete disclosure of information relative to the investigation.
- 1. Case No. 1-89-006 (0ngoing) - During the course of conducting an irevestigation at an NRC licensed facility, the investigator was approached by an individual previously interviewed. This individual informed the investigator that during his interview he wanted to answer questions in greater detail but felt " uncomfortable" about doing so with the licensee corporate attorney present. When advised by the investigator that he could have requested a meeting with the NRC in the absence of the corporate attorney, he responded that, "you have to understand, I work for higher management".
- 2. Case No. 1-85-011 (Closed) - During the course of this investigation, corporate attorney's for the licensee interviewed witnesses (licensee employees) immediately after they left the interview conducted by 01 investigators. The attorneys asked each interviewee the details of their discussions with the 01 investigator. Being aware of this caused the investigator to structure their interviews in such a manner as to attempt to disguise their questions to preclude disclosure of information that may have compromised their (the NRC) investigation, yet elicit the information needed.
While it is difficult to determine the full ramifications of the above incidents, common sense tells you that once an employee knew that management was going to be made aware of statements made during their respective interviews, they would be less than candid with information negatively impacting the licensee (their employer). cc: W. Hutchison e
5 August 7, 1989 a MEMORANDUM FOR: Ben B. Hayes, Director Office of Investigations FROM: James Y. Vorse, Field Office Director Office of Investigations, Region II
SUBJECT:
DRAFT OF FINAL SEQUESTRATION RULE In response to your Memorandum of July 28, 1989, regarding subject Sequestration Rule, 01:RII hereby submits the following examples of problems encountered in the conduct of investigations in which either the Sequestration of Witnesses or Exclusion of Counsel would have been both beneficial and proper. It is appropriate, at the outset of this memorandum, to ensure that it is understood that the HRC Office of Investigations has no objection to any individual's basic right to advice and/or accompaniment by counsel in any situation, including an interview by 01. The objection arises when this counsel represents both the potential wrongdoer (licen m ' and a potential innocent witness to the alleged wrongdoing. An - inher rmt flict of interest exists in that situation. The following examples illustrate how conflict of interest situations, as described above, have impeded the progress and integrity of 01 investigations.
- 1. Case No. 2-87-002: Material False. Statement by TVA Manager of Nuclear Power regarding compliance with 10 CFR Part 50, Appendix B Licensee: Tennessee Valley Authority (TVA)
Investigators: Daniel D. Murphy E.L. Williamson Larry L. Robinson ExampleNumberj: Just prior to the final 01 interview of the TVA Manager of Nuclear Power, at the direction of-an outside law firm that was retained by TVA to represent Senior TVA Managers and Board of Directors, TVA's Office of General Counsel sent a letter to each TVA employee that had been previously interviewed by 0! without presence of counsel. At the time of their interviews, these employees were not suspected of any wrongdoing by 01, and-they did not request represen-
, tation by counsel. The aforementioned letter suggested that each addressec request a copy of his/her transcript of interview from 01. The letter also suagested that, "...we would appreciate your sharing it with us so that we can A -
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Ben B. Hayes 2 August 7, 1989 better prepared when 01 issues its findings." Attached to this letter was
< mple letter of request that could be used to obtain the transcript copy.
Or course, the letter disclaimed any TVA pressure on these employees to either request, or " share" these transcripts with the Office of General Counsel (and - suosequently, the outside law firm), but I believe it is fair to say that these employees were put in a position where it appeared to be prudent to ,
" request and share" copies of their transcripts.
Although this is not the classic example of 'che inhibition of free flow of information from a witness by a licensee attorney actually sitting in on the interview, ostensibly also representing the witness' interests as well as the licensee's; but the above example indirectly applies to the sequestration situation, in that the counsel representing the potential wrongdoers are able to assess potentially adverse testimony prior to the interview of their client during the investigative process. While the discovery process is very appro-priate during the pretrial (prehearing) phase of the prosecution (enforcement) process, it is not appropriate during the investigative phase because it compromises the objectivity and openness of the testimony. Example Number 2: Toward the end of the field investigative phase of this case. 01 received information that the Manager of Nuclear Power had contracted with some outside engineers to assess the accurncy of the alleged Material False Statement (March 20,1986, le; - to imt f rom TVA), and that these contractors had found that some of the infe" ution in the March 20, 1986, letter was not true, and had subsequently briefed the Manager of Nuclear Power to that effect. O! identified the contract engineers involved, who were no longer working at TVA, and directly contacted one of these engineers, an Ebasco employee, and arranged an interview date. Both the Ebasco corporate counsel and the TVA retained counsel became aware of the impending interview. This Ebasco engineer, through Ebasco counsel, cancelled the initial interview appointment. After a reasor.able amount of time and communication between 01 and Ebasco counsel regarding a rescheduled interview date, with no results, 01 subpoenaed the Ebasco engineer to be interviewed. Present at this interview on February 10, 1988, in addition to the witness and 01, were the Ebasco counsel, representing both Ebasco as a corporate entity and the engineer as an Ebasco employee, and the TVA retained counsel, repre-senting both the engineer personally and TVA Senior Management. When the TVA retained counsel refused to be excluded from the interview, due to 01's perception of a conflict of interest, 01 terminated the interview. Six months later on August 11, 1988, after extensive legal analysis of both the conflict of interest issue and an additional issue of privileged information under the protection of the Attorney Work Product principle, the Ebasco engineer was interviewed by 01. However, the interview was still conducted in the presence
,_ of TVA retained counsel, who was, admittedly, being paid by TVA for this representation of an Ebasco employee.
4 Ben B. Hayes 3 August 7, 1989 Example Number 3: During the interview of an attorney, who in the past had personally repre-sented a Senior TVA Manager, the attorney retained by the utility to re) resent the manager insisted on being present during the interview to protect t1e interest of her client. This was a condition of the waiver of the attorney / client privilege before conducting the interview. This situation provides the utility's retained counsel with information concerning the ongoing investigation which can be used to prepare the subject of an interview at a later date.
- 2. Case No. 2-83-038: Harassment and Intimidation of QC Welding Inspectors Licensee: Duke Power Company / Catawba Investigators: James Y. Vorse E.L. Williamson Initial interviewees advised investigators that company lawyers had gathered all welding inspectors and advised by them that " dark forces" (01) were coming to interview them and would compare testimony and attempt to find conflict which could result in criminal sanctions against the inspection personnel.
Interviewees were 2ncouraged to have company counsel present during all interviews for their protection. Licensee advised 01 that any interviews conducted on-site would be in the presence of a company attorney. To avoid potential compromise of the investigative process, 01 interviewed all QC welding inspection personnel off-site af ter normal work hours at various locations convenient to the employees. This extended the investigation by several months.
- 3. Case No. 2-85-004: Possible Deliberate and Willful False Statement Regarding R0 and SRO Training Requirements Licensee: Florida Power Corp / Crystal River Investigators: James Y. Vorse Robert H. Burch During initial investigative efforts, the company wanted to represent all parties in the interview process. O! took the position that non-senior management personnel were entitled to counsel, but counsel could not represent the company. The licensee hired individual private attorneys to represent the non-management employees. After these apparent conflict of interest issues were resolved, the investigation proceeded to its conclusion.
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- 4. ' Case-No. 2-86-005: Possible Willful Falsification'of Health Physics Records Licensee: Alabama Power Company /Farley Investigators: Robert H. Burch E.L. Williamson ,
During the early investigative process, the company attorneys demanded that .t they represent all employees to be interviewed by OI. Over a 2-year period of time this issue was resolved only when the company hired an-attorney to represent the non-management personnel and-the corporate attorney represented the Senior Management. This process-extended the investigation much longer than necessary'and actually resulted in the Comission: going to Federal Court- . to resolve normal, routine investigative issues as- they apply to- the interview process.. The licensee through its attorney continued to place restrictions on the interview process which were unacceptable-to 01.. All of these' factors. caused the investigation to be unnecessarily delayed. f i i t-F e k w.w m m
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racs.*%f F AC5NNE PO 3) 82i 23 97 ;703)7'7-9320 February 10, 1992 DEBOA AM B CH ARNOFF , (202) 60 3-eft 5 [ Mr . Samuel J . Chilk Secretary United States Nuclear Regulatory Commission Washington, D.C. 20555 Re: Proposed Attorney Exclusion Rule 56 Fed. Req. 65949 (Dec. 19, 1991)
Dear Mr. Secretary:
The following comments on the proposed new rule by the Nuclear Regulatory Commission ("NRC" or " Commission") entitled
" Exclusion of Attorneys From Interviews Under Subpoena," 56 Fed.
,, Reg. 65949 (Dec. 19, 1991), are provided on behalf of the Profes-( sional Reactor Operator Society, American Electric Power Company,
(. Baltimore Gas & Electric Company, Bechtel Power Corporation, Carolina Power & Light Ccmpany, Consumers Power Company, Northern States Power Company, Union Electric Company and Wisconsin Elec-tric Power Company. In summary, we urge the Commission to reject the rule as l proposed because it fails to meet the requirements for attorney disqualification set forth in SEC v. Csapo, 533 F.2d 7-(D.C. Cir. l 1976)("Csapo"), and recently reaffirmed in Professional Reactor O_perator Society v. NRC, 939 F.2d 1047 (D.C. Cir. 1991)(" PROS"). The proposed rule also should be rejected because, on balance, it l creates more problems than it solves, and its passage is not in l keeping with the Commission's stated objective of eliminating l prescriptive regulatory requirements that are marginal to safety. A. Summary of the Proposal l The proposed rule on attorney exclusion is intended to be "a logical outgrowth. of the court's guidance in Prof essional Reactor Operator Society v. NRC, suora." 56 Fed. Reg. at 65949. The proposal provides that when the " agency official conducting the inquiry" -- i.e t, usually, an Office of Investigations ("OI") investigator -- determines that there is " concrete evidence that the investigation or inspection will be obstructed and impeded, directly or indirectly, by an attorney's representation of multi-(O/ / ple interests," the agency investigator is authorized to prohibit 9202130030 920210 PDR PR PDR gg
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i as Mr. Samuel J. Chilk . February 10, 1992 Page Two that representation -- i.e., to disqualify the witness' chosen counsel -- by " prohibit [ing] that attorney from being present during the interview." 56 Fed. Reg. at 65951 (proposed Section 19.18(b)); see also id. (proposed Section 19.3). Procedures are then provided for challenging the disqualification and for retaining new counsel. Id. (proposed Sect. ions 19.18(b)-(e)). The proposed rule neither defines " obstruct" or " impede", nor "directly or indirectly" obstructing or impeding. See<56 Fed. Reg. at 65951 (proposed Sections 19.3 and 19.18(b)). The-term " concrete evidence" also is not defined in the proposed rule. While the proposed rule itself is silent on these pivotal . concepts, the Supplementary Information accompanying the rule is not. In it, the PRC explains that, while the " Commission cannot predict in detai. shat manner of circumstances will arise in par-ticular investigations that will lead to_ consideration of appli-cation of the exclusion rule," among those considerations that would be relevant would be " evidence that the multiple represen-tation would lead to disclosure of the substance of an interview to a future interviewee or subject in the. investigation and that this disclosure would have an adverse impact on the investiga-tion." 56 Fed. Reg. at 65950. The NRC also states that,-while it "does not view vigorous advocacy by competent counsel as improper (,) . . . invocation of the rule.would obviously be sup-ported by concrete evidence that the witness would be more forth-coming or candid during the interview if the witness were not represented by counsel who also represents the licensee- or other employees." Id. Finally, the Supplementary Information makes clear-that while there have been past instances of " perceived impairment of investigations as a result of multiple representations," id., citino, "e.c., Memorandum dated August 7, 1989, from Ben B. Hayes, Director, Of fice of Investigations, to James L. Blaha, Assistant for Operations, Of fice of the Executive Director for Operations," the proposed rule does not rest upon these - instances, but instead relies on the policy judgment that.(1): cases'"may arise" where multiple representation vould obstruct an NRC investigation;-(2) the " remedy" of attorney exclusion "should - be available"; and (3) the proposed rule "should" facilitate
" expeditious" and " satisfactory" consideration of questions con-cerning multiple representation during NRC investigations.
{ Fed. Reg. at 65950. In short, "however rarely invoked and 56 s._
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Mr. Samuel J. Chilk February 10, 1992 Page Three applied," NRC continues to favor adoption of an. attorney exclusion rule. Id. B. There is-NorNeed"for'the" Proposed-Rule. - There is no need for an attorney exclusion rule,t as reflected in NRC's own proposal, which notes the rarityewi ths, which it can be expected to be applied. NRC has virtually noth-ing to gain, whereas vitnesses have much to lose from the persis-tent determination by NRC to control and limit witness' right ~ to counsel. No other agency, of which we are aware, has in the post-Csapo environment sought to so intrude into the protected area of individuals' right to counsel. As we pointed out in our comments on the earlier, vacated rule, while the Internal Revenue Service (" IRS") does have procedures for the conduct.of investi-gations, which include provisions for the exclusion of counsel, these iprovis ions' make"it abundantlyNreaF'that ~iFis U neit" tee" pre-rogat ive of.laEEinVes t igator,2 eve _n with-the-approvalcof.:his<,. law-f yer, : to; decide-who an --individual'si' attorney;should be. Manusl, 4022.42 (Feb. 23, 1981). See IRS It is particularly inappropriate-for the Commission to adopt the proposed rule in 1ight:of it.sgecently, published program oto elimi nate : prescr ipt ivelrequirementszthatJave~ina rg~inal;to ssaf e ty. 57 Fed? Reg.#4166 ( Feb; ~ 4=,' '1992 )^ (Elirdinat ion t o f : Requirements' Marginal-to Sa f ety) . While this program focuses on the technical requirements of Part 50, its motivating policy of improving the ef f ectiveness of the regulatory process 1by providing more fleni-bility and less prescriptiveness can-be applied squarely to the , proposed attorney exclusion rule with the result-that the Commis-sion would not adopt the proposed rule. In short, we urge the Commission to abandoa passage of an-attorney exclusion rule; therelare other_readily available mecha-nisms for ' ensuring proper conduct ^by-counsel. See, e.c., D.C. Code.of Prof. Resp. , D . R. 7-102 (representing a client within the bounds of the_lav); cf. 10 C.F.R. 52.713 (NRC provision for rep-rimanding, censuring or suspending an attorney during a proceed-ing for disorderly, disruptive or contemptuous conduct) . C. Defects in the Proposed Rule The Commission's most recent proposal on the disqualifica-tion of an NRC witness' counsel of choice does not follow
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lQ Mr. Samuel J. Chilk February 10, 1992 Page Four applicable ~ law, as ' set forth ^ in the Csapo and PROS cases, and echoed in substantial other precedent. See, e.g., Great Lakes Screw Corps'v. NLRB, 409 F.2d 375-(7th Cir.4 1969); Aetna Casualty
& Suret y Co. v. United States, 570 F.2d 1197 (4th Cir.) cert.
denied, 439 U.S. 82 (1978); Matter of Abrams, 62 N.Y. 2d 183, 465 N.E. 2d 1 (Ct. A. N.Y. 1984). There can be no dispute, in view of the PROS case decided by the District of Columbia Circuit Court of Appeals within the last year, that the prevailing law on the subject of agency disquali-fication of a witness' chosen counsel is set forth in the Csapo case. PROS involved the Commission's effort to use "a less rig-orous standard" for disqualifying counsel than that set forth in Csapo, see 56 Fed. Reg. at 65949, an effort that was vacated by the Court. See id. In the proposed new rule, the NRC now cites the " concrete evidence". standard _ set forth in Csapo. But its stated interpretation _of that standa'rd' -- the meaningEit provides
~
to the'ph' rase'" concrete;e'v.idence" thatfanc attorney's presence [ would '"obs t ruc t' and -impede"- an inves t igat ion -- ' is- flatlysincon-sistent vith Csapo. For Csapo not only involved the Court's (' invocation of a " concrete evidence" standard -- a standard that was not in dispute in that case -- but it addressed =the meaning of that_ standard. In Csapo, the Court of Appeals explained at least some of=the circumstances in which it found an absence of the' required showing of concrete evidence of obstruction of.an investigation,.a showing. deemed necessary before an agency ~ wit-ness' counsel of choice can be . disqualified.by the agency l. It is those very- circumstances, rejected in - Csano,; which NRC's' pro-posed rule maintains would. constitute," concrete evidence." In particular, the NRC states that concrete. evidence of - obstruction _would be.present, and would justify disqualification of a witness' chosen counsel, if " multiple representation would lead to disclosure of the substance of an interview to a future interviewee or subject in the investigation and that this disclo-sure vould have an adverse impact on the investigation." 56 Fed. Reg. at 65950. Similarly, evidence that-a4 witness-would be."more forthcoming"~in the~absencetof=his chosen" counsel ^could' lead to d isquali f ica t ion . " Id. In Csapo, the Court of_ Appeals. squarely rejected these rationales for disqualification;~they simply did not . constitute L evidence of obstructionism by counsel. The NRC's desire to prevent information from being, shared 2 l pI among witnesses - presumably, to prevent the-tailoring of s'ubse-quent testimony better'to conform with or' explain what has come_
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-(s,/ Mr. Samuel J. Chilk February 10, 1992 Page Five earlier, see Csaco, ~ 533 F.2d at 9 -- and the Commission's desire-to obtain"as~much " candid" infoEmadion~'from"vitnesses as possible
-- presumably, S to? prevent? pres'sure on' witnesses ~ to present a "commonDfront," see id. at 10 -- are typical and proper adversarial desires. But they do .not constitute s grounds _ ,for dis-qualifying,s' witness'~ counsel of-choice. iSee-id. at;9-10,712.1/
Once again, as in its earlier rule, and notwithstanding the lip service paid to " vigorous advocacy," NRC's proposal-on the exclusion of counsel reflects the erroneous perception that behavior commonly accepted as traditional advocacy in the legal _ prof ession can be termed obstructionism by OI investigators and, indeed, the NRC. See__n.l. But to'have "an m adverse mimpact" ..on an investigation;such_.thatjhd?should be= disqualified, an attorney --
~
wheth'sr reoresenting one or more siEnssses or affected carties -- must ben doing something; wrong.2/ In Csapo, for example', the Court noted that the district-; court judge below had;been
"[u]nvillino to sully the ' reputation 6f-- [ counsel]~in"the absence h of "' conc reie evidence of ~ wrongdoing;" 533 F.2d at 10 (emphasis
\ added). The Court of Appeals was similarly- disinclined. Id. at 12; see also IRS Manual S4022.42 (disqualificat. ion may_be_ sought where counsel has taken some action to_ improperly _or_ unlawfully imped + or obst ruct and IRS investigation).- But it ism not,yrong
~
for counsel to cause investigators to vork harder to'make their case, nor . is an attorney acting ~ improperly when he sh~aresNinfor- r ma t ionE among Tw i tnesses , or counsels witnesses to testify honestly-out-cautiously; in fact, a lawyer may be f ailing to f ully repre-sent the interests of his clients, as he: is required to do, if he 1/ It also should be noted that NRC unsuccessfully made these same arguments earlier in explaining and defending its "rea-- l sonable basis" standard. See, e.g., 55 Fed. Reg at 246. Now, NRC uses the same arguments to explain what its1new
":.nerete evidence" standard means. If both standards mean r"e san: thing, namely, that advocacy by witness' counsel H constitutes obstructionism, this rule is no more lawful than the last one. In either case, the circumssances are insuf-ficient to justify disqu.lificat'on of counsel.. ,
i 2/ an ctt'orney is engagsd in misconduct, it-ismirrelevant
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* .sH Aw, PtTTMAN, PoTTs & TROWBRIDGE A es s?%EN S** '%hQ-4G peOrC15 ON A. COppomat.og s s Mr. Samuel J. Chilk February 10, 1992 Page Six does not pursue the very activities that NRC's proposal targets as grounds for disqualification.
Furthermore, if NRC is concerned about whether the witness is getting a fair shake, as some of its commentary suggests, we can only remind the NRC of the fundamental tenet of lav of which' y the= Court-of Appeals.in_Csapo reminded the...SEC, namely;7 thatathe H
'decisictn:'of:who should represent him belongs 'to the witn'esh, not to - the agency. 2533 F.2dcatwll.
The proposed rule's use of. the qualif ying words,J"directly or indirectly," which broaden the concept of obstructionism, also is not justifiable under the Csaco standard. Neither Csapo_nor PROS uses the modifiers "directly or indirectly" hefore the terms
" impeding and obstructing," in defining and describing the type of conduct by counsel that merits disqualification. Here again, without j ustif ication, NRC impermissibly lessens and obscures the rigorous standard of proof of misconduct that the law unequivo-
_ [~' cally requires before a witness' counsel of choice can be
\, disqualified.
In its earlier, vacated rule, the NRC tried to justify its proposal by reference to unidentified " cases" which prompted'the need for it. See 55 Fed. Reg.-at 243-44. While NRC no longer makes this argument, its continued reference to such cases is troublesome. Because of the personal knowledge of the undersigned _ counsel as to three of the seven instances referred to by the NRC, we can confidently represent to the Commission that these instances in fact constitute excellent examples of circumstances in which disqualification of counsel by.the NRC would have been highly improper. Yet even in its recent pro-Rosal, NRC admits that these cases are instances where it "per-
.eived" witness' counsel as impairing pending investigations. In short, NRC's history in this area, referred to once again in its most recent proposal, confirms its persistent misunderstanding concerning when it is permissible to disqualify a witness' coun-sel of choice.
It.is no remedy for NRC to say that the proposed rule includes procedures for review of a disqualification decision. If the substantive basis for disqualification is erroneous, there-are no procedures that will cure that infirmity. See PROS, 939 J l
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(Q Mr. Samuel J. Chilk February 10, 1992 Page Seven F.2d at 1052,F Where " concrete evidence" of obstructionism is : defined as no more than vigorous advocacy, as set forth in NRC's ! proposed rule, the substantive basis for disqualification of counsel is clearly erroneous. D. Conclusion Because it fails to meet the existing legal standards, _the NRC's most' recent proposal on the disqualification of subpcenaed witnesses' counsel should be rejected by the Commission. More-over, we urge the Commission to decide, as a matter of policy, that on balance the potential problems posed by such a rule out-weigh its remote advantages and that consequently, an attorney exclusion rule will not be adopted by the NRC. , We also respectfully request an opportunity to meet with the Commissioners to discuss the atjency's latest proposal on the dis-qualification of a witness' counsel of choice. Respectfully submitted, L.nnA I ( rDJ Deborah B. Charnoff [ 0 214 : 00 70B0. 3 2 M With regard to the review procedure set forth in the pro-posed rule, see 56 Fed. Reg. at 65951 (proposed S19.18(b)), we-. note that " consultation" with"the" Office of General Coun- -- se1.is' ineffectual-without'the~ requirement;oficonsent. Com-pare _ IRS Manual,,4022.42 (Feb. 23,-1981) (IRS agent 1 requests 2 agency counsel 2to recommend to'the-Department of Justice
- _ thatt it seek _ judicial . enforcement Tofian lIRS- summons and l
exclusion =of counsel) .
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Mr. Samuel J. Chilk '*3o t.ggy .7,;r,sq '"4439; m . my Secretary U.S. Nuclear Regulatory Commission . Washington, D.C. 20555 ^ Attention: Docketing and Service Branch 3
Reference:
Proposed Rule - Attorney Exclusion Fed. Reg. Vol. 56, No. 244 - 65949
Dear Mr. Secretary,
The Professional Reactor Operator Society again opposes the proposed rule entitled " Exclusion of Attorneys from Interviews Under Subpoena". V We believe the proposed rule provides the opportunity to subvert the rights of the irdividual to qualified counsel. This is not a rule further supporting safe operation of nuclear facilities. It is a rule regarding misconduct of counsel which may coincidentally involve persons employed in the nuclear industry. We urge the commission to reject the idea of further rules already covered by existing law. In Professional Recctor Operator Society v. United States Nuclear Regulatory Commission, 939 F.2d 1047 D.C. Cir.1991, 'the court reasoned that it was not free, without express Congressional direction, to expand or contract the right to counsel at investigatory interviews dependinE on the.particular mission of the particular agency." The Professional Reactor Operatar Society fully supports complete and uninhibited disclosure of facts. We further understand Ine Commission's need to obtain those facts and that the manner of discovery can weigh in any subsequent decision. Dr. Thomas Murley, Director of Nuclear Reactor Regulation, related those thoughts to our Society very effectively during our 1991 annual meeting by stating that it is only opon the hMis pfnonest and complete e.xchange that a position of trust and conjtaence can ce n aantained between the regulator and the regulated.
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r e h - t r - s. 2 n o ta 2e: SC P D t4 p P. O2 e Page 2 k However, we oppose the rule, having " heard stories" of less than forth-right conduct by Office of Investiptiva F;cid Inve>tigatun when conducting imerviews. We are futtner apprehensive because of at least an appearance to unduly expedite the inteniew process without particular regard to (1) informing an individual of their rights to counsel, or (2) the difficulty in obtaining qualified counsel. Although an appeal provision exists for a person having had their attorney excluded, no mention is made of an independent determination as to the validity of the " concrete evidence". From that, we are led to believe that a field investigator could invoke the " concrete evidence" provision to exclude, require the individual to obtain other (pe2 haps less qualified) counsel, interview, and sometime later find the " concrete evidence" requirements had not been met. If this rule must be passed, we would propose that an additional " concrete evidence" rider be added which would require that the person being interviewed (subsequent to having their cnosen counsel excluded from that interview,) be apprised of their rights to counsel at the time of
" exclusion" and prior to any subsequent interview, and thaf further "concrett evidence" be presented to the persans in he intenhwed, demonstrating the new counsel to have a previous record of accomplishment in, and knowledge of the nuclear industry on at least the same level as the excluded counsel.
I submit this response on behalf of the 883 members of the Professional Reacter Operator Society. Sincerely, Carl M. Gray, Presidp t Copy: Directors 10 CFR 26 O
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February 17, 1992 Mr. Samuel J. Chilk Secretary United States Nuclear Regulatory Commission Washington, D.C. 205555 Atten ion: Docketing and Servicing Branch RE: Proposed Rule entitled " Exclusion of Attorneys from Interviews under Subpoena" 56 Fed. Rec. 65949, December 19. 1991
\x/ /
Dear Mr. Chilk:
These comments are submitted on behalf of the undersigned, practicing attorneys licensed in the States of Georgia and New York, as well as the federal bar. For many years that practice has included the representation of facilities and individuals licensed by the Nuclear Regulatory Commission (NRC) under 10 CFR l Parts 50 and 55, as well as individuals engaged in activities l subject to Part 50 regulation, t The proposed rule on exclusion of attorneys from interviews under subpoena is deficient ~and; inappropriate-for-the reasons l stated in the comments submitted'by the_ Nuclear Utility Management and Resources Council, dated February 18, 1992. We l support and endorse those comments. In addition, we offer the i following supplemental comments designed to sharpen the identification of problems inherent in the proposed rule. I Actions Subiect to Exclusion l The proposed rule focuses on the potential impact of an l attorney's representation of " multiple interests." If that I representation will " obstruct and impede" an investigation either "directly or indirectly" the investigator may prohibit the attorney from attendance at the interview of his client (proposed
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v rule 10 CFR 519.18(b)). This impact alone, particularly as 9202210032 920217 PDR PR 19 56FR65949' PDR g/O
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m i l [b \ Mr. Samuel J. Chilk February 17, 1992 Page 2 articulated in.the Supplementary Information, is patently insufficient justification for denial of an interviewee's-choice
'of counsel. Established case law articulates the requirement that some. improper, unethical-or~ illegal act-of-counsel, in addition to counsel's representation of multiple clients, is a precondition to exclusion. As observed by.the federal Circuit Court for the District of Columbia:
The mere fact that a witness' counsel also represents others who have been or are later to be questioned, is no basis whatsoever for concluding that presence of such counsel would obstruct the investigation. On the contrary, in many cases it is likely that such representation may facilitate and expedite the proceedings. SEC v. Csqng, 533 F.2d 7, 11-12 (1976). [g Therefore, based on the NRC's intended application of the rule as () stated in the Supplementary Information, the proposed rule is defective on its face because counsel misconduct or wrongdoing is not articulated in the provision as the basis for exclusion. Moreover, the supplementary Information includes several exaraples of impact which, it is suggested, would support - exclusion. These, however, are not examples of wrongdoing or misconduct by counsel in his or her representation of multiple interests. Of_ major concern is the-NRC's apparent position that disclosure of information to. multiple clients which would have "an adterse impact" on the' investigation, standing alone, would be valid grounds =for exclusion (56 Fed. Rec. 65950,.second_. column, "It would also be relevant if there wasievidence'that-the multipleErepresentation.vould. lead'to disclosure of-the substance of an interview to a future interviewee or the subject.in'the investigation and this disclosure would have an adverse impact on the investigation"). This is simply incorrect. Whatever
" adverse impact" connotes, exclusion of an individual's chosen counsel is not permissible and is precluded by Constitutional guarantees of choice of. counsel absent'a-foundation of misconduct. And mere disclosure of information to multiple clients is not misconduct regardless of impact if consistent with the witness' understanding or agreement with chosen counsel. Put bluntly, aggressive and proper advocacy of multiple clients, m
, TROUTM AN, SANDrRS, LOCKERM AN & ASHMORE 6 .g\
1 Mr. Samuel J. Chilk 1 ks- February 17, 1992 Page 3 including learning facts,1 theories and strategips of an investigation,yis not impedance orfobstruction'. The proposed rule is so devoid of an articulated standard of impedance and obstruction which properly might be the subject of exclusion that the improper application of NRC investigators is a veritable certainty.}he This proposed is rule by particularly troublesome when case law, including that cited in the Supplementary Information, provides guidance -- and could have formed a basis for a well-crafted proposed rule. Standard of Proof of Actions The proposed rule appropriately adopts the " concrete evidence" standard as the quantum of proof on which an 1 Indeed, an interviewee is free to 91scuss these matters directly with other potential witnesses and subjects in the investigation. The NRC has acknowledged this ability in g,) interpreting its " witness sequestration rule," adopted previously, as being limited in application to sequestration of multiple witnesses only from the interview itself; witnesses remain free under Constitutional guarantees of freedom of association to discuss the matter with whomever they may chose. Erofessional Reactor Operator Society v. NRC, 939 F.2d 1047, 1050 (D.C. Cir. 1991). 2 The Supplementary Information states that historical cases of impairment of investigations as a-result of multiple representation, as perceived by the NRC's Office of Investigation, are not relied upon in promulgating the proposed rule. Those cases and the positions taken by OI'in them, however, vividly foreshadow the likely improper. exclusion of counsel under the proposed rule as currently drafted and explained. OI has taken the position previously that a counsel's gathering of information in conjunction with' multiple representation-as " discovery" which is not appropriate during the-pendency of an investigation "because it compromises the objectivity and openness of the [ witness'] testimony." See, Memorandum dated August 7, 1989 from Ben B. Hayes to James-L. Blaha, second attachment, Example.1, Case No. 2-87-002. Thus, OI erroneously assumed, uithout ADy evidence,.that a witness would ' f testify"dif fer'e ntly' as2 ayresult;off multiple ' representation. 1 Recent* experience of the undersigned suggests 7that OI'stviews - have not changed. m i _ .1 _ _ _ _ _ . _ _ _ _ _ . _ _ _ _ _ _ _ _ _
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/ Mr. Samuel J. Chilk \j February 17, 1992-Page 4 investigator must base an exclusion of counsel. While the agency correctly notes that it cannot predict in detail what circumstances may arise, examples are nevertheless provided in the Supplementary Information to the proposed rule.
We do not question that concrete evidence of unethical or illegal conduct by counsel, such as encouraging or condoning perjury or a pattern of overt disruption of the interview, would be grounds for exclusion. However, the NRC's examples of
" concrete evidence" in the Supplemental Information demonstrate an intent to exclude whenever " adverse impact" is perceived, even in the absence of such unethical or illegal conduct.
Consequently, the authority to exclude counsel is not confined by the proposed rule to " permissible limits," as required by clear precedent. Professional Reactor Operator Society v. NRC 939 F.2d 1047, 1049 (D.C. Cir. 1991), citing SEC v. Hicashi 359 F.2d 550, 552 (9th Cir. 1966). Thank you for the opportunity to comment on the proposed rule.
- Very truly yours, s
Arthur H. Do, Y i ob erski (D i
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Mr. Samuel J. Chilk Secretary of the Commission U.S. Nuclear Regulatory Commission [ Washington, D. C. 20555 ATTENTION: Docketing and Service Branch RE: Proposed Rule and Final Rule Exclusion of Attorneys From Interviews Under Subpoena 56 Fed. Reg. 65949 (December 19,1991) Reouest for Comments
Dear Mr. Chilk:
These comments are submitted on behalf of the nuclear power industry by the Nuclear Managerrent and Resources Council, Inc. (NUMARC)' in response to o the notice of a final rule published by the U.S. Nuclear Regulatory Commission (NRC) on the exclusion of attorneys from interviews under subpoena. This (,)) ( proposed rule and the accompanying final rule were adopted in response to the decision by the U.S. Court of Appeals for the District of Columbia Circuit in Professional Reactor Operator Society v. NRC et al ., 939 F.2d 1047 (D.C. Cir. 1991). NUMARC supports the NRC's objective of ensuring that investigations are conducted so as to obtain information necessary to determine whether actionable violations have occurred. NUMARC agrees that no attorney representing a witness should be permitted to obstruct an investigation because of the attorney's misconduct. However, as was true with the previously proposed rule, we do not believe that a rule is necessary to achieve the NRC's objective with respect to the conduct of its investigations. The NRC rules currently in effect (10 C.F.R. Part 2) already provide a mechanism for imposing sanctions for attorney misconduct in various contexts.
'NUMARC is the organization of the nuclear power industry that is responsible for coordinating the combined efforts of all utilities licensed by the NRC to construct or operate nuclear power plants, and of other nuclear industry organizations, in all matters involving generic regulatory policy )
issues and on the regulatory aspects of generic operational and technical issues affecting the nuclear power industry. Every utility responsible for constructing or operating a commercial nuclear power plant in the United States is a member of NUMARC. In addition, NUMARC's members include major (~'s architect / engineering firms and all of the major nuclear steam supply system
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'q g j Mr. Samuel J. Chilk February 18, 1992-V Page 2 That is, attorney misconduct that would qualify under the concrete evidence test of the Professional Reactor Operator Society decision can be properly resolved under the NRC's current regulations and law. Consistent with the declaration of President Bush in his January 28, 1992, State of the Union message, we recommend that a final rule not be issued.
. The principle of attorney conduct during an 01 interview at stake when the rule was originally proposed remains unaddressed. Clearly, the attorney's Code of Ethics is intended to control an attorney's behavior during the course of his or her representation; an attorney may only be said to engage in misconduct if he or she acts unethically or unlawfully. Thus,-an attorney acting in an ethical and lawful manner during the course of an 01 investigation, regardless of the vigorousness of his or her advocacy, does not provide grounds for an investigator to remove that attorney for impeding at investigation. The fundamental flaw in the NRC's proposed rule is its inappropriate concentration on the impact of an attcrney's conduct, even though it may be legal and ethical, rather than evidence of misconduct. Unfortunately, the proposed rule does not properly focus on disqualifying counsel where " concrete evidence" exists regarding the counsel's misconduct, but instead inappropriately establishes a subjective test to be applied by an-investigator regarding whether he or she believes that their investigation is in some way impeded by the participation of counsel generally or of a
,) particular counsel. The Supplementary Information provides no additional (Q justification for the adoption of this rule. We recognize the principle that the NRC is trying to honor, that attorney misconduct cannot be allowed to impede an NRC investigation, and while such misconduct cannot be condoned, we completely disagree that the objective will only be accomplished through the adoption of this proposed rule.
The standard in the proposed rule does not comport with the requirements under Securities and Exchanae Commission v. Csaco, 533 F.2d 7 (D.C. Cir. 1976), the case that was the foundation for the Court's decision in Professional Reactor Operator Society. In fact, portions of the Supplementary Information imply a reluctance on the part of the NRC to fully comply with the Court's decision regarding application of an appropriate standard. Evidence of the NRC's reluctance to comply is the modification of the concrete evidence criteria by the phrase "directly or indirectly." This improperly qualifies the concrete evidence standard; " concrete" means solid, tangible or real, and the NRC's qualifiers essentially obviate the " concrete" aspect of the standard. In this context, it is critical to recognize that the concrete evidence standard is a minimum, setting a floor and not a ceiling, and requires demonstrable proof of how a counsel sought to be excluded has or would actually impede or impair an investigation. Therefore, the words "directly or indirectly" should be deleted from Section 19.18(b). The proposed rule fails to identify, through examples or otherwise, what conduct would appropriately satisfy the " concrete evidence" test and thus serve as a proper basis for exclusion. For example, an attorney instructing a witness to commit perjury would be " concrete evidence" that would support the exclusion ( of that' counsel. However, a temporal delay in a proceeding because of valid
- (
1 Mr. Samuel J. Chilk February 18, 1992 Page 3 questions asked or objections raised does not constitute misconduct that would justify exclusion. The Commission accedes that one cannot predict in detail the-circumstances that might arise in a particular investigation and could lead to application of the rule. However, the examples cited in the Supplementary Information do not provide confidence that, in fact, " concrete evidence" of wrongdoing by counsel will be the determinative standard but rather that an investigation might in some way be impacted in a manner not acceptable to an investigator. For example, the Supplementary Information intimates that a witness' counsel could be excluded if a witness would be "more forthcoming" or
" answer in greater detail" in the absence of the particular counsel chosen by a witness to represent him or her. That does not correctly employ the concrete evidence standard. While the Commission admits that it "does not view vigorous advocacy by competent counsel as improper," the Supplementary Information strongly suggests that the NRC would approve an investigator's exclusion of counsel simply because the counsel's vigorous advocacy could "have an adverse impact on the investigation." Indeed, as was noted earlier, only if an attorney acts unlawfully or unethically would there be grounds for his or her removal. The impact of perceived obstruction without actual wrongdoing by an attorney is simply not enough.
Also, inherent in the proposed rule's structure and logic is the bias
'[V] that simply because an attorney represents more than one witness or a witness and the licensee, an 01 investigation will be impeded. The NRC cites the memorandum dated August 7, 1989, from the Director of the Office of Investigations as evidence for its position that multiple representation impairs investigations. It does not stand for that proposition. Rather, the document suggests a fundamental bias by the Office of Investigations against a witness' counsel who has been retained by an NRC licensee. Unfortunately, statements made in the Supplementary Information, as written, could be used cs evidence of Commission support of that bias. The Commission should revise the Supplementary Information that will accompany the final rule to be consistent with the law, both in spirit and in letter.
We believe the appeal provisions in the proposed rule establish, with three exceptions, a reasonable administrative process _to resolve issues that may arise in the application of the rule. We recommend that, because exclusion of counsel is fundamentally a legal issue, the investigator seeking to exclude a witness' choice of counsel should be required to obtain a written opinion from the Office of General Counsel finding that the standard of
" concrete evidence" has been met; mere " consultation" with 0GC is not-sufficient. In addition, we recommend that Section 19.18(d) be revised to provide the witness, and the witness' counsel sought to be excluded, with an opportunity to appear before the Commission in the course of its evaluation of
, the appeal of an investigator's decision. Such a process would not impede the NRC from prompt resolution of issues, but would ensure that the parties most p directly, and potentially adversely, affected by an NRC decision would have a is right to be heard. Finally, we recommend that proposed Section 19.18(e) be
' clarified to assure that a witness' interview be delayed automatically at
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' Dm - Mr. Samuel J. Chilk l ) February 18, 1992 V Page 4 least until they receive the written statement of exclusion reasons required by 19.18(c).
We also recommend that the Commission direct the modification of internal NRC procedures that will implement the final rule. Notwithstanding the current provisions of NRC Management Directive 0119, we believe that the NRC's responsibilities for fundamental fairness should be reflected in these procedures and, accordingly, that NRC investigators should be directed to advise witnesses of the right to counsel, including the witnesses right to consent to an attorney representing multiple witnesses and/or any single witness and the NRC licensee. The witness should also be advised of the provisions of Section 19.18, including the right to appeal any exclusion of counsel. We remain concerned that the rule, even if so modified, provides the opportunity for and, in essence, would condone the misuse of delegated authority to overzcalous investigators. This situation may arise under the proposed rule because an investigator could inappropriately rely on some of the comments contained in the Supplementary Information accompanying the proposed rule. Accordingly, if the Commission issues a final rule despite our recommendation to-the contrary, we urge the Commission to revise the Supplementary Information section as discussed above. We further urge the O ( Commission and the Office of General Counsel to carefully monitor the implementation of the rule and respond promptly to any suggestions of its misapplication. We would be pleased to discuss our comments further as the Commission may deem appropriate. Since ely, q
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p& - M Mr. Samuel J. Chilk WMBEN M 7 I Secretary of the Commission , , 4 U.S. Nuclear Regulatory Commission ;gp --- -<^Qf Washington, D.C. 20555 ~W" Attention: Docketing and Service Branch Re: Notice of' Proposed Rulemaking Exclusion of Attorneys From Interviews Under Subpoena (RIN 3150-AE11) 56 Fed. Rec. 65,949 (December 29, 1991)
Dear Mr. Chilk:
Introduction N In response to the above-referenced Notice of Proposed Rulemaking, we hereby submit these comments on behalf of the following NRC licensees: Commonwealth Edison Company; : Niagara . Mohawk Power . Corporation; Northeast - Utilities; __ Tennessee . Valley. Authority; TU Electric; and Washington Public Power Supply ' System. At the outset, we urge'the Commission to reconsider the'need.for an attorney exclusion rule. A. spirit' of regulatory reform currently is sweeping _ through the Federal government. In his State of the Union Address, the PresidentI- called ~ for a " top-to-bottom review" of all Federal regulations -- new and old. The goal is'to identify and expunge those which unnecessarily bloat the Federal bureaucracy, are unrelated to1the protection of.the publicl health and safety, require the needless expenditure of _ scarce Federal resources,_and thereby add to the economic malaise afflicting our nation. Although proposed Part 19 was not within the scope of the recent February 4, 1992, NRC- notice calling for the elimination of unnecessary or unduly burdensome regulations (57 ' Fed. : Reg. 4,166), the Commission still has an opportunity to: terminate the proposed rulemaking. The NRC must strike:a fair-balance.between - the right.of any American citizen to counsel of his or her choice (afforded in this context by Section 6(a) of the Administrative'
- Procedure Act, 5 U.S.C. 5 555(b)) and the needs of : the NRC- .to obtain reasonable access to and information from individuals who have relevant knowledge regarding a matter under investigation.
. The: NRC failed in its first attempt to strike that balance, ast j- . clearly _ indicated by the vacation and remand by.the Court of the
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[\ February 18, 1992 Page 2 attorney exclusion portion of its first rule. See infra. Unfortunately, the NRC nas failed again in this latest effort to strike the balance required by la9. This track record suggests a disturbing conclusion -- that the NRC may not fully appreciate the sanctity of the right to counsel and has failed' to recognize that its needs in investigations must be fulfilled in harmony with that right, rather than by riding roughshod over it. In this light, the Commission should terminate this rulemaking. Other institutional and procedural devices are available which effectively prever* attorneys from improperly interfering with agency investigatiot... The American Bar Association Rules of Professional Conduct, the canons of ethics issued by the State bars which actually license-attorneys to practice law, and both State and Federal criminal. statutes address unethical and unlawful attorney conduct. If the Commission determines that an attorney exclusion rule is warranted, then we submit that the proposed rule and accompanying supplementary information fail to accurately implement a " concrete evidence" standard for the showing required prior to the exclusion of attorneys from representation of subpoenaed witnesses in NRC investigations. The rule as proposed would k violate witnesses' right to counsel in such investigations. We, therefore, respectfully request that the proposal be revised and re-issued for public comment in-accordance with the requirements of the Administrative Procedure Act (APA). See Shell 011 Co. v. Environmental Protection Acency, No. 80-1532 eti sec. , (D.C. Cir. Dec. 6, 1991). Backcround-The United States Court of Appeals for the District of Columbia Circuit vacated the NRC's first effort to promulgate.an
-attorney exclusion rule in Professional Reactor Onerator Society
- v. United States Nuclear Reculatory Commission, 939 F.2d 1047 (D.C.
Cir. 1991) [ hereinafter referred to as " PROS"). The . Court t unequivocally rejected a rule which only required a " reasonable basis" for exclusion, rather than " concrete evidence" that an attorney's misconduct would obstruct and impede an agency investigation. d ld. The new NRC proposal on its face purports to establish a " concrete evidence" standard. The accompanying ' supplementary information, however, fails to adequately implement that standard. Upon closer analysis of the rulemaking, it becomes clear that the NRC, in proposing this rule and in explaining its intent, would implement a standard less rigorous than concrete evidence -- as a result, the NRC proposal provides for unilaterally disqualification
WINSTON & STR AWN
, Mr. Samuel J. Chilk February 18, 1992 Q Page 3 of witnesses' chosen counsel' l simply on the basis of agency discretion.
A witness's right to counsel of choice is virtually inviolate. Before an attorney can be excluded from an administrative proceeding, the agency must come forward with concrete evidence of attorney " misconduct" or " wrongdoing" supportina a conclusion that his or her presence will impede and obstruct .he investigatory process. Securities and Exchance Commission v. Csano, 533 F.2d 7, 8, 10, 11 (D.C. Cir. 1976). In essence, the " concrete evidence" standard is based on two, premises: (i) it represents the minimum circumstances prerequisite to attorney exclusion; and (ii) it requires demonstrable evidence of actual attorney misconduct leading to obstruction of an investigation. Misconduct is a necessary precursor to impediment.
" Concrete evidence" is a definitive legal standard -- not a sliding scale to be defined and applied by OI investigators on a discretionary, case-specific basis. It requires more evidence than mere allegation and innuendo, and certainly requires more than mere conjecture based on the sole fact that an attorney is representing multiple interests. See PROS, 939 F.2d 1047; Csanc, 533 F.2d 7.
The Proposed Part 19 Rule As currently drafted, the proposed Part 19 rule fails to implement the " concrete evidence" standard in accordance with the dictates of CsaDo and PROS. The NRC instead attempts to define
" concrete evidence" using a less rigorous standard of its own creation. As evidenced by the supplementary information, the NRC Staff has improperly equated many aspects of valid, permissibly vigorous, multi-party representation with " concrete evidence" of attorney misconduct impeding an NRC investigation. For- this j
reason, the proposed rule is legally deficient. Nowhere is this observation more accurately portrayed than in footnote 2 to the supplementary information accompanying the proposed rule. 56 Fed. Reg. at 65,950. There the NRC points ! to a NRC Staff memorandum dated August 7, -1989, as containing l evidence of the " perceived impairment of investigations as a result of multiple representation . " In fact, the memorandum
. . . Id.
does not contain a single example of attorney misconduct which resulted in the-impediment of an NRC investigation. Instead, its l' As interpreted by the federal courts, the APA right to counsel is equivalent to the concomitant right to be represented by the lawyer of one's choice. Backer v. Commissioner of Internal Revenue, 275 F.2d 141, 144 (10th Cir. 1960). See also Kentucky West Vircinia Gas Co. v. Pennsylvania Public Utilities Commission, 837 F.2d 600, 618 (3d Cir. 1988); Securities and Exchance Commission v. Csano, 533 F.2d 7, 11 (D.C. Cir. 1976).
. WINSTON & STR AWN Mr. Samuel J, Chilk
[~' February 18, 1992 ( Page 4 there is a " perception" of administrative delay and inconvenience, some self-imposed, rather than attorney misconduct. The Csapo Court, however, unequivocally dismissed administrative inconvenience as constituting a valid form of
" concrete evidence." Focusing again on the need for attorney misconduct, the Court indicated that attorneys suspected of professional improprieties should be reported to the appropriate bar association or made the subject of an agency disciplinary proceeding. Csano, 533 F.2d at 12. The fact that such collateral action may delay or hinder an investigation -- even to the point where statutes of limitation expire and information grows stale -- is insufficient in the eyes of the Court to warrant exclusion of chosen counsel. Id.
Examples of how the NRC has misinterpreted the " concrete evidence" standard are plentiful throughout the proposed rulemaking. For instance, in the supplementary information accompanying the proposed rule,l' the Staff repeatedly states that in the context of multiple-representation, there is a " potential for inhibiting the candor of witnesses. . . ., " and a " potential n V inhibition . . . where the counsel intends to tell the employer everything that was said during an interview . . . . " 56 Fed. Reg. at 65,949 (c.3) and 65, 950 (c .1) . This type of supposition, however, is what the Csano decision forbids agencies to rely upon as a basis for excluding attorneys from agency proceedings. , Despite the Staff's supposed recognition of this fact on page 65,950 (c.1) of the Federal Reaister notice, the proposed Part 19 rule is nevertheless based on the specter of speculation, as opposed to " concrete evidence" of attorney misconduct and interference.I' In fact, the explanation of the " concrete evidence" standard in the supplementary information is devoid of any E' The proposed Part 19 rule itself incorporates the term
" concrete evidence"; however, the supplementary information portrays a lesser, more subjective standard. In a prior NRC case involving fundamental disagreement between the supplementary information and the rule itself, the United States Court of Appeals for the District of Columbia Circuit vacated the offending rule. Union of Concerned Scientists v.
United States Nuclear Reculatory Commission, 824 F.2d 108, 112 (D.C. Cir. 1987). I' For instance, Section 19.18(b), as proposed, authorizes C- exclusion if there is " concrete evidence that the (- investigation or inspection will be obstructed and impeded, directly or indirectiv, by an attorney's representation of multiple interests" (56 Fed. Reg. at 65,951 (emphases added)) , hardly concrete evidence of attorney misconduct.
4 WINSTON & STR AWN . Mr. Samuel J. Chilk O February 18, 1992 kj Page 5 recognition or acknowledgemerit that definitive, absolute proof of attorney misconduct or wrongdoing is prerequisite to a determination that his or her presence at a witness's interview would obstruct and impede an investigation. Thus, the Staff applies the wrong test when it draws the universal conclusion that
" invocation of the rule would obviously be supported by concrete evidence that the witness would be more forthcoming or candid during the interview if the witness were not represented by counsel who also represents the licensee or other employees." 56 Fed. Reg.
at 65,950 (c.1). This conclusion is only valid if the witness's lack of candor is the result of attorney misconduct or wrongdoing. The mere fact that an attorney represents multiple witnesses does not constitute misconduct and, therefore, cannot constitute
" concrete evidence."
Absent incorporation of the misconduct criterion into the proposed Part 19 rule, the Staff would be unfettered in its discretionary determination of whether, for example, a witness would be "more forthcoming" in an interview absent his attorney. Id. The NRC has failed to incorporate the misconduct criterion on page 65,950 (c.1) of the supplementary information where the Staf f asserts that concrete evidence "might involve evidence that the witness would answer in creater detail if there were not an understanding that the counsel would, or might, report the substance of the interview to the licensee or other witness" (emphasis added). This standard lacks the requisite nexus to attorney misconduct and, therefore, falls to accurately implement the " concrete evidence" standard. As a result, it is beyond the bounds of the law. The two remaining examples of " concrete evidence" provided in the proposed rulemaking are similarly devoid of attorney misconduct. Thus, they do not accurately interpret or represent the " concrete evidence" standard. First is the example of " evidence that the employee had"a concern that his employment would be jeopardized by transmittal of information from the interview to the licensee. . . . " 56 Fed. Reg. at 65,950 (c.1 & II.2). Such concerns are routinely addressed by both the employee and attorney during the initial disclosure of multiple-representation and discussion of the . handling of client confidences and potential conflicts of interest.i' Unless an attorney fails to i' Fundamental to the concept of counsel of choice is the exercise of informed judgement in the selection of an attorney. In situations involving multiple representation, attorneys are required by the American Bar Association Model Code of Professional Responsibility to fully inform Q prospective clients of potential conflicts of interest. ABA Disciplinary Rule 5-105(C). By doing so and, in response, receiving the clients' consent, the attorney protects the (continued...)
. . _ _ _ _ . _ _ __ __ _., m __ _. _ _ _ _ _ _ - ._ _ _ __ _
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- WINSTON & STR AWN
- Mr. Samuel J. Chilk February 18, 1992
( Page 6 l adr.quately identify and address such concerns prior to obtaining ) the employce's consent to be represented, such concerns do not , constitute attorney misconduct. l 1 The second example cited by the Staff refers to "cVidence i that the n.- .le representation would lead to disclosure of the I substance o. 1 interview to a future interviewee or subject in the l investigatior ind that this disclosure would have an adverso impact on the invest >,ation" (56 Fed. Reg. 65,950 (c.2)). This simply is not evidence of attorney misconduct and therefore is not an example of " concrete evidence." Even if separate counsel is required for each witness, the attorneys could freely participate in joint defense agreements in order to share information and provide their clients with the best possible representation. In ERQII, the Court rejected the attorney exclusion provisions set forth in the Staff's first iteration of the Part 19 rulemaking because they were "less exacting" than the concrete evidence standard mandated by Csapo. 939 F.2d at 1051. The present version of the exclusion standard contained in the proposed Part 19 rule is likewise "less exacting" than the concrete evidence required by law and will not pass muster if it is again taken to the Court for review. As such, we believe the NRC should either terminate thin rulemaking and rely upon the other means availabic to govern attorney conduct, or revise and re-issue the proposal for public comment in a manner which provides full t.nd adequate recognition of the " concrete evidence" standard. Eco Shell 011 Co.
- v. Environmental Protection Acency, No. 8 0-153 2 .e1 sea. , ( D. C. Cir.
Dec. 6, 1991). Very ul yours,
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Nicho a0 S. Re nolds Robert H . Hellfrich ' Kathryn#. Kalbwsky Y y(... continued) individual interests of the various parties he represents. I
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Docket Nos. 50 321 50-424 HL 2070 50-366 50 425 ELV-03461 Mr. Samuel J. Chilk Secretary of the Comission U.S. Nuclear Regulatory Comission Washington, DC 20555 ATTENTION: Docketing and Service Branch Comments on Proposed Rule
" Exclusion of Attorneys From Interviews Under Subpoena" m (56 Federal Reatster 65949 of December 19. 1991)
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Dear Mr. Chilk:
Georgia Power Company has reviewed the proposed rule,10 CFR Part 19,
" Exclusion of Attorneys From Interviews Under Subpoena," published in the Federal Register on December 19, 1991. In accordance with the request for comments, Georgia Power Company is in total agreement with the NUMARC coments which are to be provided to the NRC.
Should you have any questions, please advise. Respectfully submitted, C. K. McCoy ,, , CKM/JHG ,'- ,-
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H<t.Ntn 50 348 C7 Docket Hos. 50 364 Q i Mr. Samuci J. Chilk Secretary of the Comission U.S. Nuclear Regulatory Comission Washington, DC 20555 ATTENTION: Docketing and Service Branch Coments on Proposed Rule
' Exclusion of Attorneys From Interviews Under Subpoena" (10 Federal Reaister 65949_9LD1gember 19. 1991)
Dear Mr. Chilk:
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Southern Nuclear Operating Company has reviewed the proposed rule,10 CFR Part 19. " Exclusion of Attorneys From Interviews Under Subpoena," published in the rederal Register on December 19, 1991. In accordance with the request for comments Southern Nuclear Operating Company is in total agreement with the NUMARC coments which are to be provided to the NRC. Should you have any questions, please advise. Respectfully submitted,
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l cci Mr. S. D. Ebneter L Mr. S. T. Hoffman Mr. G. F. Maxwell V .
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Mr. Samuel J. Chilk Secretary of the Commission l U. S. Nuclear Regulatory Commission Washington, D. C. 20555 Attention: Docketing and Service Branch Re: Proposed Rule and Final Rule Exclusion of Attorney;i From Interviews Under Subpoena 56 Fed. Reg. 65949 (December 19, 1991) Request for Cp_Dnents
Dear Mr. Chilk:
Florida Power and Light Company (FPL) is the licensed operator of ym two nuclear power plant units in Dade County, Florida and two nuclear power plant units in St. Lucio County, Florida,
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w/ FPL has reviewed the comments prepared by the Nucloac Management and Resources Council (NUMARC) and endorses the NUMARC comments submitted to you by letter dated February 18, 1992. FPL appreciates the opportunity to submit these comments. Very truly yours, (ll (L . W. H. Bohlke Vice President Nuclear Engineering and Licensing WHB/J RL/dmb I ) 9202260022 92021e n/ PDR PR 19 56FR65949 PDR
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("% RULEMAKING ISSUE November 6, 1992 SECY-92-376 EQI: The Commissioners From: William C. Parler General Counsel Subiect: Final Rule on Exclusion of Attorneys from Interviews Under Subpoena Purnose: To obtain Commission approval for publication in the Federal Recrister of a final rule amending regulations in 10 CFR Part 19. Daghground: On December 19, 1991 (56 FR 65940), the Commission published a notice of its revocation of its rule on exclusion of attorneys representing multiple interests from subpoenaed interviews during NRC investigations and inspections. That revocation effectuated the court's decision in Professional Reactor onorator society v. Nuclear Recrulatory Commission, 939 F.2d 1047, 1052 (D.C. Cir. 1991) (hereafter " PROS") which struck down those attorney exclusion provisions. The court found that the " reasonable basis" standard in that rule was an insufficient requirement for limiting the right to counsel guarantee of the Administrative Procedure Act, 5 U.S.C. 556(b). On December 19, 1991 (56 FR 65949), the Commission also published proposed amendments to replace the former rule. The proposed amendments follow the guidance of the appeals court decision by replacing the " reasonable basis" standard with the requirement that exclusion be premised on
" concrete evidence" that the investigation will be obstructed and impeded.
NOTE: TO BE MADE PUBLICLY AVAILABLE contact: WHEN THE FINAL SRM IS MADE 3y37tgggg Roger K. Davis, OGC Tel. 504-1606 i M
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I e l 2 Discussi2D: Responses to the proposed amendments were received from one individual, the Nuclear Utility Management and hesources Counsel (NUMARC), three utilities endorsing NUMARC's comments, the Professional Reactor Operators Society (PROS), a law firm commenting on behalf of PROS as well as seven utilities and a major engineering firm, a law firm commenting on behalf of six utilities, and a law firm that represents individuals and utilities holding NRC licenses. All commenters opposed the proposed amendments, although some recommended changes should the Commission still decide to issue the rule. The comments generally concern four subjects:
- 1. The need for the rule;
- 2. The necessity of misconduct or wrongdoing by counsel;
- 3. Application of the " concrete evidence" standard; and
- 4. Adequacy of the procedures.
The attached Federal Reaister notice contains a summary of the comments and proposed responses to those comments. The final rule includes three minor changes from the rule as proposed. The reasons for the changes are provided in the attached Federal Reaister nctice. Coordination: The Executive Director for Operations and the Office of Investigations have reviewed this paper and concur in its recommendation. A copy was also provided to the Office of the Inspector General. Recommendation: That the Commission:
- 1. Anorove for publication in the Federal Reaister the attached final rule notice on exclusion of counsel from interviews under subpoena (Enclosure 1).
- 2. Certify that thene amendments will not have a significant economic impact on a substantial number of small entities. This certification is l
necessary in order to satisfy the requirements of the Regulatory Flexibility Act, 5 U.S.C. S 605(a).
- 3. Note:
- a. That this final rule falls within the scope of the actions described in categorical exclusion 10 CFR 51.22(d). Therefore, L
3 neither an environmental impact statement nor an environmental assessment has been prepared for the rule.
- b. That the final rule does not contain new or amended information collection requirements subject to the Paperwork Reduction Act of 1980, 44 U.S.C. S 3501, 91 DRG
- c. That these amendments do not involve any provision which would impose backfits as defined in 10 CFR 50.109 (a) (1) . Therefore, a backfit analysis is not required for this final rule.
- d. That the Senate Committee on Environment and Public Works (Subcommittee on Nuclear Regulation), the Senate Committee on Appropriations (Subcommittee on Energy and Water Development), House Committee on Interior and Insular Affairs (Subcommittee on Energy and the Environment), and the House Committee on Energy and Commerce (Subcommittee on Energy and Power) will be informed of this rulemaking action (Enclosure 2).
- e. That a public announcement will be issued (Enclosure 3).
- f. That the Chief Counsel for Advocacy of the Small Business Administration will be informed of the certification and reason for it,
- g. That one commenter requested a meeting with the Commissioners for discussion of the proposed amendments. OGC believes, however, that the public comment period provided adequate opportunity for presenta of issues and recommendations.
i iam C. Parler General Counsel
Enclosures:
- 1. Final Rule
- 2. Congressional Letters
- 3. Public Announcement t..
4 Commissioners' comments or comment should be provided directly_ to the Office of the Secretary by COB Monday, November 23,-1992. Commission Staff Office _ comments, if any, should be submitted
- to the Commissioners NLT Monday, November 16, 1992,1with an information copy to the Orfice of the Secretary. If the paper is of such a nature that_it requires additional review and .
comment, the Commissioners and the Secretariat should be apprised of when comments may be expected. This paper is tentatively scheduled for affirmation at an Open Meeting during the Week of November 23. 1992. Please refer to the appropriate Weekly Commission Schedule, when published, for-a specific date and time. DISTRIBUTION: Commissioners OGC OCAA OIG , OCA OPA OPP EDO SECY
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[7590-01] NUCLEAR REGULATORY COMMISSION 10 CFR Part 19 RIN: 3150-AE11 Exclusion Of Attorneys From Interviews Under Subpoena AGENCY: Nuclear Regulatory Commission. ACTION: Final rule.
SUMMARY
- The Nuclear Regulatory Commission (NRC) is amending its regulations to provide for the exclusion of counsel from a subpoenaed interview when that counsel represents multiple interests in the investigation and there is concrete evidence that the counsel's presence at the interview would obstruct and impede the investigation. These amendments are designed to ensure the integrity and efficacy of the investigative and inspection process. These amendments provide a standard and procedures for making and effectuating the decision to exclude counsel.
EFFECTIVE DATE: [ Insert date 60 days after date of publication in the Federal Register] l FOR FURTHER INFORMATION CONTACT: Roger K. Davis, Office of the General Counsel, U.S. Nuclear Regulatory Commission, Washington, ! DC 20555, telephone: (301) 492-1606. l i
A SUPPLEMENTARY INFORMATION: Contents I. Background II. Response to Public Comments on the Proposed Rule I. Background On December 19, 1991 (56 FR 65949), the Nuclear Regulatory Commission (NRC) published proposed amendments to its regulations found at 10 CFR Part 19. The proposed amendments provided for the exclusion of counsel from subpoenaed interviews in connection , with an NRC investigation when that counsel represents-multiple interests in the investigation and there is concrete evidence that such representation would obstruct and impede the investigation. The proposed amendments also provided procedures to be fcllowed by the NRC and individual witnesses in connection with the NRC's exercise of its authority to exclude counsel. The Commission had published a final rule on the same subject on January 4, 1990 (55 FR 243). That rule provided, inter-alia, for the exclusion of counsel for a subpoenaed witness when that counsel represented multiple interests and there existed a reasonable basis to believe that such representation would prejudice, impede, or impair the integrity of the inquiry. Upon legal challenge, the United States Court of Appeals for the District of Columbia Circuit struck down the portion of the final rule on_ attorney exclusion. Professional Reactor Ooerator 2
f Society v. Nuclear Reaulatory Commission, 939 F.2d 1047, 1052 (D.C. Cir. 1991) (hereafter "ERQE"). Specifically, the Court of Appeals ruled that the NRC must apply the same standard for attorney exclusion that the Court had previously required of the Securities & Exchange Commission by virtue of the Court's interpretation of the right-to-counsel guarantee of the Administrative Procedure Act (APA), 5 U.S.C. 555(b). The Court stated that to exclude counsel "the agency must come forward with ' concrete evidence' that the counsel's presence would impede its investigation." PROS, 939 F.2d at 1049 (citing SEC v. Csano, 533 F.2d 7, 11 (D.C. Cir. 1976)). Thus, the Court vacated the attorney exclusion portion of the rule, since its " rational basis" standard was less rigorous than the
" concrete evidence" requirement. On December 19, 1991 (56 FR 65948), the Commission responded to the appeals court decision by publishing notice in the Federal Register of the Commission's revocation of its rule on attorney exclusion, 123., the definition of " exclusion" appearing in 10 CFR 19.3 and the standard and procedures for attorney exclusion appearing in 10 CFR 19.18(b)-(e). On December 19, 1991 (56 FR 65949), the Commission also published the proposed amendments in the Federal Register that would conform the NRC's attorney exclusion requirements to the Court's ruling.
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l II. Responses to Public Comments on the Proposed Rule The Commission received nine comments on the proposed December 19, 1991 rule. The commenters included one individual, the Nuclear Utility Management and Resources Council (NUMARC), three utilities endorsing NUMARC's comments, the Professional Reactor Operators Society (PROS), a law firm commenting on behalf of PROS as well as seven utilities and a major engineering firm, a law firm commenting on behalf of six utilities, and a law firm that represents utilities and individuals holding NRC licensees. All commenters opposed adoption of the proposed rule. The comments are available for inspection and copying in the agency's Public Document Room, 2120 L Street NW. (Lower Level), Washington, DC. The Commission has considered the comments received, but is not persuaded that the proposed amendments should be withdrawn or modified in substantial ways as some commenters requested. However, the Commission has clarified its description of the standard for exclusion by stating the threshold requiremerit as
" concrete evidence that the presence of an attorney representing multiple interests would obstruct and impede the investigation or inspection ...." A similar change was made in the definition of
"[e)xclusion." The Commission has deleted the phrase "directly or indirectly" from the standard for exclusion of counsel. The Commission has also revised the rule to provide that the interview shall not be rescheduled to a date that precedes the 4
I
expiration of the-time provided under 10 CFR 19.18(d) for appeal of exclusion of counsel, unless the witness consents to an earlier date. In addition, the tal rule requires that the ! written notice of the grounds for counsel's exclusion also describe the right to appeal the exclusion to the Commission and thereby obtain an automatic stay of the effectiveness of the subpoena pending the commission's decision. Because these changes are logical outgrowths of the proposed amendments and no other modifications are made, the Commission concludes that the final rule should become effective without further notice and comment. The Commission's responses to the concerns of the commenters are set forth below. [ A. Need for the Rule One commenter argued that the expected rarity of application of the rule demonstrated the absence of a need for the rule. The Commission does expect that the rule will be invoked ~only in rare and compelling cases. However, the Commission continues to believe that the rule should further expeditious and satisfactory resolution of some investigations and that_this is important to the Commission's fulfillment of its statutory mission. By providing to witnesses, counsel, and agency staff both a general , standard for determining whethe disqualification is appropriate and procedures for implementing and challenging these i determinations, the final rule should reduce delay, uncertainty 5
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i and confusion associated with consideration of the exclusion of counsel. Although several commenters emphasized the circumstances in which courts have found insufficient grounds for exclusion of counsel by the securities and Exchange Commission (SEC), the same P courts have explicitly recognized the propriety and utility of this type of rule. In Csano, the United States court of Appeals for the District of Columbia Circuit stated (533 F.2d at 11) with regard to the SEC's sequestration rule that -- We do not question its utility in preserving the integrity of an investigation and recognize its practical necessity in certain circumstances. 533 F.2d at 11. In SEC v. Hiaashi, the Ninth Circuit said that '
"[t]he reason for and purpose of the (SEC's) sequestration rule are clear and there can be no question as to its necessity and general propriety" (359 F.2d 550, 552 (9th Cir. 1966)). For reasons akin to those motivating the SEC rule, the NRC proposed and now finalizes its attorney exclusion rule.
The NRC's investigation of unsafe practices and potential violations of the Atomic Energy Act and NRC regulations is an important means of ensuring public health and safety in operation of nuclear power plants and other uses of nuclear material (ggg 10 CFR Part 19; 10 CFR 1.36). NRC investigators often interview licensees, their officials and employees, and other individuals having possible knowledge of matters under investigation. In many cases, investigating officials conduct extensive and difficult inquiries to d-*srmine whether violations were willful 6
and/or whether licensee's management engaged in wrongdoing. Yet, offective identification and correction of unsafe practices or regulatory violations through an investigative or inspection process can depend upon the willingness of individuals having knowledge of the practices or violations to disclose that information to interviewing officials. Therefore, as specified in 10 CFR 19.2, the rule would apply to all interviews under subpoena within the jurisdiction of the Nuclear Regulatory Commission other than those which focus on NRC i employees or its contractors. While the purposes of the rule i relate primarily to interviews conducted under subpoena by the NRC's Office of Investigations, the NRC's predominant user of investigative subpoenas, the final rule would also apply to NRC inspections and investigations conducted under subpoena by other NRC officials. The rule does not apply, however, to suopoenas , issued pursuant to 10 CFR 2.720, which applies to subpoents requested in hearings. Several commenters argued that there is no need for the rulo , because of the availability of other means for ensaring proper conduct by counsel (g2g., investigation and prosecution under Federal criminal statutes or investigation and disciplinary action or disqualification under standards of professional conduct for lawyers). In some cases, the causes of impairment of the investigation may justi?y consideration of criminal or other proceedings. However, the Commission's objectives, standard for action, burden of proof, and remedy, 12g., exclusion of counsel 7
1 from particular interviews, may differ widely from those associated with criminal statutes or rules of conduct. Therefore, the possibility of collateral or future actions addressing misconduct in some cases pursuant to other authority is an insufficient basis to ignore the potential need for a direct determination of whether the couns61 representing multiple interests should be excluded from an interview. As noted in the supplementary information included in the e notice of the proposed rule (56 FR 65950), questions regarding impairment of investigation as a result of multiple representation have arison in some cases in the past. Several of the commenters argued that the cited cases did not involve any grounds for disqualification of counsel and that any concern about multiple representation in those cases was improper. The Commission believes that the final rule will facilitate resolution of this type of question when it arises in the future. As the Commission has stated (56 FR 65950), the justification for this rule is not premised on whether any nrior case actually involved " concrete evidence" that the investigation would be impeded. NUMARC and another commenter indicated that adoption of the proposed rule would be inconsistent with the Commission's efforts to eliminate unnecessary regulatory burdens (agg, 229., 57 FR 4166; February 4, 1992 and 57 FR 39353; August 31, 1992). The Commission disagrees with the suggestion that the rule fails to strike a fair and reasonable balance between the right to counsel 8
and the need for information in investigations. In this case, the Commission is expressly adopting the judicial resolution of that issue. That resolution does not involve a highly prescriptive standard. Rather, it invo)ves a demanding general standard that is expected to have very limited application in a fraction of NRC interviews under subpoena. NUHARC stated that the rule was unnecessary because NRC J [ rules currently in effect (10 CFR Part 2) provide a mechanism for _ imposing sanctions for attorney misconduct in various contexts. The existing provisions directly relating to standards of practice (10 CFR 2.713) concern appearance and practice in adjudicatory proceedings. By this final rule, however, the Commission intends to provide specific direction for expeditious resolution of decisions to exclude counsel because of obstruction or impediment of investigative interviews resulting from multiple representation. Therefore, the final rule serves purposes that are not met by the general 10 CFR Part 2 - Rules of practice for domestic licensing proceedings and issuance of orders. B. Attorney Misconduct Most commenters indicated that the proposed standard for exclusion of counsel was deficient because it did net require a showing of misconduct or wrongdoing by the attorney representing multiple parties. These commenters generally concede that unethical or illegal conduct by counsel, such as encouraging or 9 l
1 condoning perjury or engaging in a pattern of overt disruption of the interview, would supply grounds for exclusion. Concrete i evidence that such conduct is obstructing and impeding an investigation could lead to exclusion under the rule. Ilowaver, the Commission does not find as a matter-of logic or law that there is no possibility of a finding of-concrete evidence of impairment on grounds other than misconduct or wrongdoing by ounsel. For instance, the Commission does not find it necessary to tulo out application of the rule to a case presenting concrete evidence of nondisclosure of information by a witness as a result of the presence of counsel representing multiple interests even though the counsel has not engaged in misconduct. Moreover, whether or not an investigation will be impeded could be irrelevant in a pure misconduct case. The Commission also does not interpret the legal procedent as permitting disqtialification only for misconduct, wrongdoing, or active obstruction by counsel. Indeed, in stating the standard to which the Commission must adhere, the court in Erna did not mandate " concrete evidence" of wrongdoing but rather
"' concrete evidence' that counsel's presence would impede (the agency's] investigation." Pros, 939 F.2d 1049 (citina SEC v.
1 Csano, 533 F.2d 7, 11 (D.C. Cir. 1976)). l The'commenters insisting on the necessity of misconduct or wrongdoing as the essential substantive element for l disqualification point to EEARg, in which'the Court of Appeals 10 , l
agreed with the lower court's finding that the SEC had failed to produce any " concrete evidence" of misconduct (533 F.2d at 8). While that opinion clearly affirmed an evidentiary threshold of
" concrete evidence" in relation to the alleged misconduct, the Court of Appeals also found that the record failed to disclose "any reason for barring counsel selected" by the witness (id.)
(emphasis added). And, the court's specific direction was that "before the SEC may ext...de an attorney from its proceedings, it must come forth ... with ' concrete evidence' that (counsel's) presence would obstruct and impede its investigation." Id. at 11. Therefore, the Commission does not interpret Csano as limiting the grounds for exclusion of counsel to " misconduct." C. Application of the Rule Most commenters expressed or endorsed the view that the supplementary information in the notice of the proposed rule (56 FR 65949-65950) shows that the intended application of the rule is inconsistent with judicial direction. They suggest that the Commission's identification of concerns motivating the rule and of some_of the potentially relevant evidence displaces the
" concrete evidence" standard.
While " concrete evidence" was not defined expressly in the cases referenced above, the discussion and application of that standard indicates the courts require more than speculation or even reasonable concern about potential impairment. Rather, 11
exclusion of counsel requires real or tangible evidence demonstrating that the investigation would be impeded as a result of the multiple representation. Thus, the commission recognizes that neither multiple representation nor speculation about a potential for obstruction of an investigation by, for example, the mere sharing of information provided by an interviewee to a subsequent interviewee, is a sufficient basis to exclude counsel. The Commission cannot predict in any significant detail what set of circumstances will arise in particular investigations that will lead to application of the exclusion rule. In the proposed rule, however, the Commission did endeavor to identify some of the factual circumstances which would tend to support invocation of the rule. For instance, it seems clear that the Commission's interests in the integrity and effectiveness of its investigation may outweigh a witnesses' choice of counsel for multiple interests where there is reliable, factual evidence that a witness is withholding, or will withhold, information critical to the investigation because the information will be shared with the witnesses' employer or supervisor by virtue of multiple representation. Thus, the Commission continues to believe that evidence that the employee had a concern that his employment would be jeopardized by transmittal of information from the interview to the licensee would be relevant. The Commission believes that evidence that the multiple representation would lead to disclosure of the substance of an interview to a future 12
Interviewee or subject in the investigation would also be relevant although not sufficient unless there were also concrete evidence that the disclosure would obstruct and impede the investigation. However, the Commission expects that it will be a rare case in which there is actual proof that the multiple representation will seriously obstruct and impede the investigation, 22g., critical information is being or will be withheld. Some commenters misunderstood-the Commission's statement that concerns arise about inhibition of the candor of witnesses where the interviewee is represented by counsel who is paid by the licensee and also represents the licensee or licensee's officials under investigation, particularly where the matter at issue is whether the licensee's employees have been, or are being, harassed or intimidated for raising safety issues (56 FR 65949). These commenters viewed these statements as examples of cases in which the-Commission would deem exclusion to be appropriate. The Commission recognizes that these circumstances do not necessarily lead to non-disclosure of critical information or other serious impairment of the investigation. Exclusion of counsel under the rule is warranted only when there is also concrete evidence, not just mere concern or speculation, that the investigation will be obstructed and impeded as a result of the
-presence of the counsel representing multiple interests.-
Several commenters expressed concern that the Commission would find obstruction and impediment to the investigation where 13
minor inconvenience results from such traditional activities of counsel as endeavoring to learn more about the investigation or to advise clients to testify truthfully but cautiously. The Commission recognizes that these types of activities do not establish real obstruction and impediment to the investigation. Indeed, these traditional activities of counsel are common ko legal representation of any witness. Some commenters fault the proposed rule's-statement that disqualification may be based on concrete evidence that multiple representation will "directly or indirectly" impede the investigation. Several commenters state that the Commission's use of these modifiers unjustifiably lessens and obscures the
" concrete evidence" standard.
The Commission recognizes that the court in Pros and Csaco did not use the modifiers "directly or indirectly" in referring to the requirement of concrete evidence of impediment to the investigation. However, the Commission notes that the same modifiers were present in the final rule published on January 4, 1990 (55 FR 243), and that the court of appeals did not comment on their presence in that rule. The key requirement is " concrete evidence" of obstruction and impediment. Whether the causation is described as direct or indirect, the_ question in a particular case will be whether there is concrete evidence that the presence of counsel representing multiple interests would obstruct and impede the investigation. It is the effects of multiple representation, not multiple 14-
representation standing alone, that may in some cases impede the investigation. For instance, if there were concrete evidence that a present or future witness will not answer questions or provide evidence because his attorney's representation of multiple interests will necessarily result in the sharing of the witness' testimony or evidence with a represented target, invocation of the rule could be warranted whether the cause of the impairment is described as direct or indirect. Clearly, a mere chain of inferences and speculation would not constitute
" concrete evidence." Nonetheless, the " concrete evidence" requirement does not preclude a showing of obstruction and impediment through indirect effects, but rather implicitly embraces the possibility of such a showing. Therefore, the Commission has decided to delete the phrase "directly or indirectly" from the rule as unnecessary.
For increased clarity, the Commission has also revised the standard for exclusion by stating the threshold requirement in S 19.18(b) as " concrete evidence that the presence of an attorney representing multiple interests would obstruct and impede the investigation or inspection ...." In the proposed S 19.18 (b) , the requirement was described as " concrete evidence that the investigation or inspection will be obstructed and impeded, directly or indirectly, by an attorney's representation of multiple interests." A similar change was made in the definition of "[e)xclusion" in S 19.3. The revised language tracks more precisely the judicial articulation of the threshold requirement. 15
- -_~ -. .. . . - . - . . - - . . - . -- . - ._ . - -.- l i
. 'i Thus the revisions further affirm and clarify the Commission's l
intent to follow the judicial guidance. D. Adequacy of the Procedures H NUMARC and another commenter stated that " consultation" by the investigating official with the Office of the General' Counsel before a decision to exclude counsel is ineffectual without the requirement of consent by the office of the General Counsel. Another commenter recommended:that the investigator be required to obtain a written opinion from the office of the General Counsel that the standard of'" concrete evidence" has been met. The Commission disagrees because it has already added numerous safeguards which'it considers to be sufficient, including the
" consultation" requirement,-to guide agency officials and prevent arbitrary action in the exclusion process. The rule requires that the interviewing official provide'a written statement lof reasons for the exclusion to the witness whose attorney has been excluded and to the excluded attorney. The interviewing official must. consult with the Office of the General Counsel prior to invoking the exclusion-rule. The witness whose counsel has been excluded'may appeal the decision to the Commission and automatically obtain-a stay of the effectiveness >of_that decision-
-pending decision by the Commission.
Of course, the Commission may also quash or modify the subpoena if it finds that'the exclusion'of counsel decision is: 16
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not based upon concrete evidence or if the subpoena is otherwise unreasonable, or requires evidence not relevant to any matter in issue. Moreover, the Commission (like the SEC) must still prevail in court in a subpoena enforcement proceeding if the person under subpoena declines to comply. A court in which the basis for the exclusion is litigated may also conduct an evidentiary hearing if the factual issues require it. SEC v. Csaco, 533 F.2d at 12. NUMARC recommended that S 19.18(d) be revised to provide the witness and the witness' counsel an opportunity to appear before the Commission in the course of the Commission's evaluation of the appeal of an interviewing official's decision. The purpose would be to ensure that the adversely affected parties had a right to be heard. The Commission believes that the procedure in the final rule, providing a statement of reasons for exclusion and permitting the filing of a motion to quash, provides a reasonable mechanism for presentation of the views of affected parties. However, nothing in the rule prevents the witness moving to quash the subpoena from requesting an opportunity for an oral presentation in connection with the motion and stating the reasons supporting the need for oral presentation. The comments of PROS included the suggestion that the rule, if issued, be amended to require that the witness be advised of the right to counsel at the time of an exclusion of counsel and prior to any subsequent interview. NUMARC recommended that l internal procedures to implement the rule should be amended to l 17 l l-l-
~ direct NRC investigators to advise witnesses of the right to counsel, including a right to consent to~ multiple representation, and of the provisions of S 19.18, including thu right to appeal any exclusion of counsel. As a practical matter, a witness who is aircady represented by counsel can be expected to consult with mnsel about such issues as the right to counsel, consent to multiple representation and witnesses' rights under this final rule. Thus, while an investigator may reasonably inquire about issues of consent to multiple representation in connection with an investigative interview, it does seem necessary to require that an investigator provide general direction or advice'on rights and limitations regarding an attorney's representation of multiple intercats to a witness already represented by counsel. Moreover,- the Commission was asked to require that investigators advise witnesses of the right to consent to multiple representation, although even under standards of professional conduct for lawyers such consent is subject to various conditions and exceptions. See, e.a., Wheat v. United States, 486 U.S. 153 (1988) (district court may refuse waiver of conflicts of interest in cases where a potential for conflict exists); FTC v. Exxon, 636 F.2d 1336, 1342 (D.C. Cir. 1980) (district court's order to retain separate counsel because of potential conflict violated neither due process nor the APA). However, in order to ensure that the witness is aware of.the commission's procedures for appeal of the
-exclusion decision, the Commission has revised the text of the 18
s proposed S 19.18(c) to require that the written notice of the-reasons for exclusion include-a description of the rights provided in S 19.18(d), regarding the right to appeal the exclusion decision. NUMARC recommended that proposed 10 CFR 19.18(e) be clarified to assure that a witness' interview is delayed automatically to at least the date of the receipt of the written statement of basis for exclusion. An automatic delay is clearly unnecessary, however, if the witness chooses to proceed without counsel or with new counsel at an earlier time. Moreover, the proposed provision already permits the witness to request a reasonable period of time to obtain new counsel, and the witness-may even obtain an automatic stay of the subpoena during_an appeal of the exclusion decision to the Commission. Nonetheless, the Commission would not expect that an interviewing official would proceed .ith the interview of the witness until more than five days after the receipt by the witness and the counsel of the written statement of reasons for exclusion, unless the witness requests that the interview proceed without counsel or with new counsel at an earlier date. Therefore, the Commission has revised the text of the proposed 10 CFR 19.18(e) to provide that the interview shall not be rescheduled to a date that precedes the expiration of the time provided under 10 CFR 19.18(d) for appeal of the exclusion of counsel, unless the witness consents to an earlier date. 19
Aside from this minimum delay, however, what constitutes a reasonable period of time for the continuation of an interview after rxc sion of counsel must be determined on a case-by-case basis, with the interviewing official taking into account the relevant circumstances, including the availability of substitute counsel, the complexity of the case and the grounds for exclusion, the date of actual notice to the witness and excluded counsel of the grounds for exclusion, and the Commission's need to complete the investigation promptly in order to protect public health and safety. PROS recommended that the witness whose counsel has been excluded be presented " concrete evidence" that the new counsel has a previous record of accomplis,'s.ent in, and knowledge of, the nuclear industry that is on the same level as the excluded counsel. The Commission disagrees that it should have the burden of initiating an investigation and making a finding on this question. The witness, not the Commission, would choose new counsel. Many counsel and law firms appear in connection with Commission proceedings and investigations. Moreover, the Commission has already provided that a witness may either proceed I without counsel or request a delay for a reasonable period of time to permit retention of new counsel. 20
Environmental Impact: Categorical Exclusion The NRC has determined that this final rule is the type of action described in categorical exclusion 10 CFR 51.22 (c) (1) . Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this final rule. Paperwork Reduction Act Statement _ This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget approval number 3150-0044. Regulatory Analysis The APA affords individuals compelled to submit to agency inquiry under subpoena the right to be accompanied by counsel or other representative of choice (5 U.S.C. 555(b)). This right to counsel guarantee is not absolute and may be circumscribed within permissible limits when justice requires. An exception has been recognized for cases in which there is concrete evidence that the presence of counsel representing multiple interests during an investigative interview would impede and obstruct the agency's investigation. 21 l 1
j I 1 l Questions concerning the scope of the right to counsel have arisen in the context of NRC investigative interviews of licensee employees when the employee is represented by counsel who also represents the licensee or other witnesses or parties in the investigation. This arrangement is not improper as a general matter. This final rule provides, however, that counsel representing multiple interests may be excluded from a subpoenaed interview if there is concrete evidence that counsel's presence would obstruct and impede the investigation. This final rule also delineates responsibilities of NRC officials and rights of interviewees in connection with the exercise of the authority to exclude counsel. Thus, the rule is intended to further expeditious and satisfactory resolution of NRC's inquiry into matters concerning public health and safety. Guidance in this area should reduce delay and uncertainty in the completion of an 4 investigation when questions of multiple representation arise. The foregoing discussion constitutes the regulatory analysis for this final rule. Regulatory Flexibility Certification In accordance with the Regulatory Flexibility Act of 1980, 5 U.S.C. 605(b), the. Commission hereby certifies that this final-rule would not have a significant impact on a substantial number of small entities. The final rule concerns an attorney's i appearance at a subpoenaed interview of a licensee's employee or 22
s i I other individual during an NRC investigation or inspection in circumstances where there is concrete evidence that the attorney's representation of multiple interests would obstruct and impede the investigation or inspection. It provides procedures for exercise of the authority to exclude that attorney from the interview in these limited circunstances and for challenge of a decision to exclude the attorney. Backfit Analysis The NRC has determined that a backfit analysis is not required because these amendments do not involve any provisions which would impose backfits as defined in 10 CFR 50.109(a) (1) . List of Subjects in 10 CFR Part 19 Criminal penalties, Environmental protection, Nuclear materials, Nuclear power plants and reactors, Occupational safety and health, Radiation protection, Reporting and recordkeeping requirements, Sex discrimination. For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR Part 19. 23
i l PART 19 -- NOTICES, INSTRUCTIONS AND REPORTS TO WORKERS: INSPECTION AND INVESTIGATIONS
- 1. The authority citation for Part 19 continues to read as follows:
Authority: Secs. 53, 63, 81, 103, 104, 161, 186, 68 Stat. 930, 933, 935, 936, 937, 948, 955, as amended, sec. 234, 83 Stat. 444, as amended (42 U.S.C. 2073, 2093, 2111, 2133, 2134, 2201, 2236, 2282); sec. 201, 88 Stat. 1242, as amended (42 U.S.C. 5841). Pub. L. 95-601, sec. 10, 92 Stat. 2951 (42 U.S.C. 5851). For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273); SS 19.11(a), (c), (d), and (e) and 19.12 are issued under sec. 161b, 68 Stat. 948, as amended (42 U.S.C. 2201(b)) ; and SS 19.13 and 19.14 (a) are issued under sec. 161o, 68 Stat. 950, as amended (42 U.S.C. 2201(o)).
- 2. In S 19.3, the definition of " Exclusion" is added to read as follows:
S 19.3 Definitions. Exclusion means the removal of counsel representing multiple interests from an interview whenever the NRC official conducting the interview has concrete evidence that the presence of the counsel would obstruct and impede the particular investigation or inspection.
- 3. In S 19.18, paragraphs (b)-(e) are added to read as follows:
24 1
3, 4 S 19.18 sequestration-of witnesses and exclusions of counsel in 'I interviews conducted.under subpoena. (b) Any witness compelled by_ subpoena to appear at an interview during an agency inquiry may be accompanied, represented, and advised by. counsel of his or her choice.- However, when the agency official conducting the inquiry-determines, after consultation with the office of the General Counsel, that the agency has concrete evidence t'nat the presence of an attorney representing multiple interests'would obstruct and impede the investigation or inspection, the agency official may t prohibit that counsel.from being present during_the interview. (c) The interviewing official is to provide a witness-whose counsel has been excluded under paragraph (b) of this section'and the witness's counsel a aritten statement of the reasons supporting the decision to exclude. This statement,_which'must , be provided no later than five working days after exclusion,.must explain the basis for the counsel's exclusion. This statement must also advise-the witness of the witness'-right to appeal-the exclusion decision and obtain an automatic stay of the effectiveness of the subpoena by filing a motion to quash the-subpoena with the Commission within five days of receipt:of this written statement. i (d) Within five days after receipt of.the written-notification required in paragraph (c) of this section, a witness' whose counsel has been excluded may appeal the exclusion ~ decision 25 1 i - . . . . . .. 2. ..
by filing a motion to quash the subpoena with the Commission. The filing of the motion to quash will stay the effectiveness of the subpoena pending the Commission's decision on the motion. (e) If a witness' counsel is excluded under paragraph (b) of this section, the interview may, at the witness' request, either proceed without counsel or be delayed for a reasonable period of time to permit the retention of new counsel. The interview may also be rescheduled to a subsequent date established by the NRC, although the interview shall not be rescheduled by the NRC to a date that precedes the expiration of the time provided under S 19.18(d) for appeal of the exclusion of counsel, unless the witness consents to an earlier date. Dated at Rockville, Maryland this day of , 1992. For the Nuclear Regulatory Commission, Samuel J. Chilk, Secretary of the Commission 26 1 I
1
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unas ENCLOSURE 2 w I u, . .s. . , ..
The Honorable Philip Sharp, Chairman Subcommittee on Energy and Power Committee on Energy and Commerce United States House of Representatives Washington, D.C. 20515
Dear Mr. Chairman:
The NRC has sent to the Office of the Federal Register for publication the enclosed final rule amending 10 CFR Part 19. These amendments replace rules on exclusion of counsel from interviews under subpoena which were revoked after they were struck down by the United States Court of Appeals for the District of Columbia Circuit in'the case of Professional Reactor Operator Society v. United States Nuclear Reaulatorv' Commission, 939 F.2d 1047 (D.C. Cir. 1991).. The new amendments follow the guidance of the appeals court by providing that an agency investigator may exclude counsel representing multiple interests in connection with an NRC investigation where the agency investigator has " concrete evidence" that the investigation would be obstructed and impaired by the presence of counsel representing multiple interests at the interview. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs
Enclosures:
as stated cc: The Honorable Carlos J. Moorhead Enclosure 2
The Honorable Peter H. Kostmayer, Chairman Subcommittee on Energy and the Environment Committee on Interior and Insular Affairs United States House of Representatives Washington, D.C. 20515
Dear Mr. Chairman:
The NRC has sent to the Office of the Federal Register for publication the enclosed final rule amending 10 CFR Part 19. These amendments replace rules on exclusion of counsel-from interviews under subpoena which were revoked after they were struck down by the United States Court-of Appeals for the District of Columbia Circuit in the case of Professional Reactor Operator Society v. United States Nuclear Reculatory Commission, 939 F.2d 1047 (D.C. Cir. 1991). The new amendments follow the guidance of the appeals court-by providing that an agency investigator may exclude counsel representing multiple interests in connection with an NRC investigation where the agency investigator has " concrete evidence" that the investigation would be obstructed and impaired by the presence-of counsel representing multiple interests at the interview. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs
Enclosures:
as stated i cc: The Honorable John J. Rhodes i l
;'y _.
The Honorable Bob Graham, Chairman'. ,
. Subcommittee on Nuclear Regulation Committee on Environment and Public Works t United States Senate Washington, D.C. . 20510
Dear Mr. Chairman:
The.NRC has sent to the Office of the Federal Regist'er for publication the enclosed final rule amending 10 CFR Part 19. 3 These amendments _ replace rules on exclusion.of; counsel-from
-interviews under subpoena which were revoked after'they were. ,
struck down by the United States Court of Appeals for the > District of Columbia Circuit'in the: case of-Professional Reactor-Ooerator Society v. United-States Nuclear Reculatory Commissio.D, 939 F.2d 1047.(D.C. Cir. 1991). f The new amendments follow the guidance of the' appeals court by. providing that an agency investigator:may exclude = counsel: representing multiple. interests in connectioniwith an NRC - investigation whero the agency. investigator has " concrete-evidence" that1theLinvestigation wouldzbe obstructed and--impaired by the presence of counsel representing _ multiple-interests at.the-
-interview. <
Sincerely, . Dennis K. Rathbun, Director, ' Office of Congressional Affairs
Enclosures:
as stated , cc :. The Honorable' Alan K. Simpson K
'u" P W- F y yr-g y-y w. 'wrp y9 -
7- g- g - y+- -- w w .-,w , p -- -4 y ,, e s -we e-ew* F-
The Honorable.J. Bennett Johnson, Chairman Subcommittee on Energy and Water Development Committee on Appropriations United States Senate Washington, D.C. 20510
Dear Mr. Chairman:
The NRC has sent to the Office of the Federal Register for publication the enclosed final rule amending 10 CFR Part 19. These amendments replace rules on- exclusion of counsel from: interviews under subpoena which were revoked after they vers) struck down by the United States Court of Appeals for the District of Columbia Circuit in the case of Professional Reactor Onerator Society v. United States Nuclear Reculatory Commission, 939 F.2d 1047 (D.C. Cir. 1991). The new amendments follow the guidance of the appeals court by providing that an agency investigator may exclude counsel representing multiple interests in connection with an NRC investigation where the agency investigator has " concrete evidence" that the investigation would be obstructed and impaired by the presence of counsel representing multiple interests at the interview. Sincerely, Dennis K. Rathbun, Director Office of Congressional Affairs
Enclosures:
as stated cc: The Honorable Mark O. Hatfield
w The Honorable Tom Bevell, Chairman Subcommittee on Energy and We'er Development Committee on Appropriations United States House of Representatives Washington, D.C. 20515
Dear Mr. Chairman:
The NRC has sent to the Office of the Federal Register for publication the enclosed final rule amending 10 CFR Part 19. These amendments replace rules on exclusion of counsel from interviews under subpoena.which were revoked after they were struck down by the United States Court of Appeals for the District of Columbia Circuit in the case of-Professional Reactor Operator Society v. United States Nuclear Reaulatory Commission, 939 F.2d 1047 (D.C. Cir. 1991). The new amendments follow the guidance of the appeals court by providing that an agency investigator may exclude counsel representing multiple interests in connection with an NRC investigation where the agency investigator has " concrete ' evidence" that the investigation would be obstructed and impaired by the presence of counsel representing multiple interests at the interview. Sincerely, Deiinis K. Rathbun, Director Office of Congressional Affairs
Enclosures:
as stated cc: The Honorable John T. Eyers a i l k
9 ENCLOSURE 3
- m. _ _ _ _ _ _ . _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ - - _ - . _ _ _ _ _ _ - _ m-
r I _w 9 NRC ISSUES PROPOSED REQUIREMENTS FOR EXCLUSION OF COUNSEL FROM INTERVIEWS UNDER SUBPOENA The Nuclear Regulatory Commission has amended its regulations to provide for the exclusion of counsel from interviews of a subpoenaed witness when that counsel represents multiple interects in the investigation or inqulry and there'is concreto evidence that such representation at the interview would obstruct and impede the investigation. The amendments are designed to ensure the integrity and efficacy of the investigative and inspection process. In an earlier rule issued on January 4, 1990, the Commission-had provided for the exclusion of counsel representing multiple interests from interviews under subpoena when the NRC official conducting the interview had a " reasonable basis" to believe that the investigation might be obstructed, impeded or-impaired. In a decision on July 23, 1991, however, the United States Court of Appeals for the District of Columbia Circuit vacated those-regulatory provisions as insufficiently rigorous for infringement on the right of a witness to counsel of choice. The new rule follows the guidance of the appeals court in adopting a " concrete evidence" standard for exclusion of counsel. Enclosure 3 u_}}