ML20127M434
| ML20127M434 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 11/17/1992 |
| From: | Kohn M AFFILIATION NOT ASSIGNED, KOHN, SAVETT, MARION & GRAF |
| To: | |
| References | |
| CON-#492-13392 92-668-01-CPA, 92-668-1-CPA, CPA, NUDOCS 9211300198 | |
| Download: ML20127M434 (70) | |
Text
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. ;tr ! ;i.D "5Nr:C UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION ATOMIC SAFETY AND LICENSING BOARD
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)
In the Matter of
)
)
Docket No. 50-446-CFA
TEXAS UTILITIES ELECTRIC COMPANY,
)
ASLBP NO. 92-668-01-CPA'
)
(Construction Permit (Comanche Peak Steam Electric
)
Amendment)
Station, Unit 2)
)
)
NOTIFICATION OF ADDITIONAL EVIDENCE SUPPORTING PETITION TO INTERVENE FILED BY B.
- ORR, D.
- ORR, J.
HACKTAL, AND 8.
HASAN B.
Irene Orr, D.I.
Orr, Joseph J.
Macktal and S.M.A.
Hasan (hereinafter " Petitioners") hereby submit to the Panel newly obtained evidence not available to Petitioners as of October 5, 1992.
I.
NEWLY OBTAINED EVIDENCE On September 15, 1992, the staff of the Nuclear Regulatory Commission ("NRC") instructed Texas Utilities Electric Company
("TUEC") to submitted for review copies of agreements it executed with Brazos Electric Power Cooperative, Inc. ("BEPC"), and Texas Municipal Power Agency ("TMPA").1/
On September 24, 1992, Petitioners requested through NRC staff that TUEC provide copies of the TMPA and BEPC Agreements to Petitioners' counsel.E' Thereafter, pursuant to the scheduling order of this Panel, Petitioners, on October 5, 1992, filed a supplement to their original intervention petition, and note therein that they were unable to secure copies of the BEPC and TMPA Agreements as of 1/
See Enclosure 1.
II See Enclosure 2.
I
$b T)b 9211300198 921117 PDR ADOCK 05000446
/
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October 5, 1992.3' On October 13, 1992 NRC Staff Petitioners' counsel that copies of these agree.
ow available for inspection at the NRC's Public Dot
_ u. i' Because these agreements were not available to Petitioners prior to the filing of Petitioners' October 5, 1992 Supplement, Petitioners hereby submit excerpts of the BEPC and TMPA Agreements to the Panel for consideration.I' Argument related to this newly obtained evidence follows.
II.
THE NEWLY RELEASED DEPC AND TMPA AGREEMENTS RESTRICT THE RIGHTS OF THE PUBLIC, THE NRC AND CITIZEN INTERVENORS TO OBTAIN SAFETY RELATED INFORMATION Like other settlement agreemento executed by TUEC, such as the agreement with Tex-La and the now disgraced Macktal and Polizzi settlements, the BEPC and TMPA agreements contain restrictive clauses which interfere with the full and complete disclosure of essential information directly at issue before this Atomic Safety and Licensing Board ("ASLB").
The BEPC and TMPA agreements directly restrict the right of the former minority owners (and their attorneys, employees, consultants and others) to disclose information to a variety of persons, including the !;RC, the public and citizen intervenors.
Additionally, these agreements turned over physical possession and control of all documents and other information TMPA and BEPC I/
See October 5, 1992 Supplement to Intervention Petition at p.
7.
E' See Enclosure 3.
1/
Excerpts of the TMPA Agreement appear at " Enclosure 4".
BEPC Agreement excerpts appear at " Enclosure 5".
2
had amassed as co-owners of Comanche Peak Steam Electric Stations
("CPSES") and by virtue of extensive discovery conducted in the state court proceedings.
1.
Information withheld directly p_ertains to Petitioners' Contentions The contention Petitioners seek for admission before this Board regarding the delay in the construction of Unit 2 of the CPSES is based on a former contention previously admitted by the NRC concerning the delay in the construction of Unit 1 of the CPSES plant.
This contention considered TUEC's request to amend the construction permit for CPSES Unit 1 (Docket No. 50-445-CPA),
hereinafter referred to as the "CPA-1 proceeding".
During the pendency of the CPA-1 proceedings, CPSES's minority owners (i.e. BEPC, TMPA and Tex-La) initiated suit against TUEC seeking damages stemming from, inter alia, TUEC's l
" willful misconduct," " misrepresentation and non-disclosure of material facts," including TUEC's refusal to "promptly identify and correct design deficiencies," " develop a quality l
assurance / quality control program adequate to detect and correct design and construction defects," and, to " address the concerns of the NRC Licensing Board."
See Plaintiff's Original Petition filed in Brazos Electric Power Cooperative, Inc.
v.
Texas l
l Utilities Electric Company, et al.,
Case No. 399,482 (District l
Court of Travis County, Texas, 345th Judicial District). at pp.
13, 21, 25.
BEPC specifica'.ly alleged that TUEC had willfully and intentionally deceived it, the U.S. Securities and Exchange 3
0
Commission, and the NRC about delays in construction of both Units of the CPSES, see, id., at pp. 14-15, 20-21, 25-26, 27-28 and alleged that TUEC's misconduct resulted in the delays of construction of the CPSES, id., at pp. 21-22, and that TUEC lacked the requisito character and competence to construct the CPSES, id., ct pp.13-28.
Through formal discovery in state court, and by virtue of their status as co-owners of the CPSES, both BEPC and TMPA were in a position and did gather extensive amounts of information concerning the reasons for the delay in construction of both units of the CPSES; TUEC's character, integrity and competence to construct a nuclear facility; what corporate polices TUEC practiced which resulted in violations of NRC requiremerits and design and construction defects; which of TUEC's managers and agents were most culpable and directly responsible for the design defects, delays and material misrepresentations.4/
f/
The scope of documentary evidence in the possession of BEPC and TMPA at the time they settled with TUEC can be gleaned from answers to interrogatories BEPC filed with the ASLB during the course of the CPA-1 proceeding.
See, Objections and Responses of Brazos Electric Power Cooperative, Inc. to Consolidated Intervenors' Interrogatories and Request for Production of Documents, dated August 14, 1987 (Exhibit 1 to l
Supplemental Petition).
Therein, BEPC asserted that evidence in its possession demonstrates that TUEC had a corporate policy of l
making " misrepresentations" and "non-disclosures" to the minority owner and to the NRC; that TUEC had " threat (ened]" its minority owners; and that-TUEC had "not been discarded or repudiated" this-corporate policy.
Moreover, BEPC specifically alleged that TUEC had made scores of " misrepresentations" and repeatedly " fail [ed) to disclose material information" concerning the " licensing" of the CPSES, including:
(continued...)
4
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The information obtained by TUEC's joint owners is essential to the contention Petitioners herein seek admission.
- Indeed, Petitioners contend that the same managers responsible for the prior delays, material nisrepresentations and other gross acts of omission and commission are responsible for the construction of i
F(... continued)
" Misrepresentations and failures to disclose material
- information as to the construction of CPSES and the adequacy thereof;"
" Misrepresentations and failures to disclose material
>information as to TUEC's compliance with applicable regula-tions;"
" Misrepresentations and failures to disclose material information as to TUEC's adherence to commitments made to the NRC;"
" Misrepresentations and failures to disclose material information as to the competence of TU Electric to perform the duties of project manager;"
" Misrepresentations and failures to disclose material l
information as to the competence of contractors and subcon-tractors;"
" Misrepresentations and failures to disclose material information as to the competence of the archi-tect/ engineers;"
" Misrepresentations and failures to disclose material information as to the viability of CPSES QA/QC programs;"
" Misrepresentations and failures to disclose material information as to the vampetence of TU Electric and other Texas Utilities personnel;"
" Misrepresentations and failures to disclose material information as to the accuracy of statements made by TU Electric to the NRC."
Exhibit 1 to Supplemental Petition at pp.
3-4.
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'l the CPSES Unit 2 and the current delays of construction with j
respect to Unit 2.
2.
The Agreements prohibit the release of safety related information to the NRC, Petitioners and other covernmental acencies d
I TUEC concluded the TMPA Agreement on February 12, 1988 and j
thereafter concluded the BEPC Agreement on July 5, 1988.I/
Therein, TUEC, through restrictive settlement terms, was able to i
ensure that information calling into question aspects of the design and construction of the CPSES and information concerning the character, integrity and competence of TUEC to safely construct and operate the CPSES was withheld from the then convened ASLB panel, the NRC, citizen intervenor groups, the 4
public and all other governmental agencies.
TUEC accomplished the secreting of information in three steos.
First, by requiring i
BEPC and TMPA to given TUEC physical possession and control over 1
all information.
Second, TUEC then intentionally secreted this information from the ASLB in violation of a standing order requiring TUEC to make such information public.
Third, THEC i
contractually bound TMPA and BEPC to never voluntarily release this information; to actively impede others from releasing this i
information; and to raise any and all defenses and take affirmative action as a surrogate of TUEC to prohibit the disclosure of any information related to the CPSES to the ASLB, the NRC, other governmental agancies, and to Petitioners.
I/
The CPA-1 proceedings were thereafter dissolved on July 13, 1992 by order of the ASLB.
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TLCC's Physical Secreting of Information from the ASLB 1
j Through the BEPC and TMPA Agreements, TUEC arranged to secret all information TMPA and BEPC had gained by virtue of their status as former co-owners and particularly gathered in discovery during the course of protracted state law proceedings j
which directly bara on all prior and current NRC proceedings related to CPSES.
This was accomplished by requiring BEPC and TMPA to gather all documentation in their control and possession, including documents in the control and possession of their agents, consultants and attorneys possession, and physically turn this documentation directly over to TUEC.
See BEPC Agreement at p.
25, 5 5. 2 (c).
In this respect, the TMPA Agreement i
specifically provides that:
TMPA shall have delivered to TU Electric the originals and all copies of all documents and other written material in i ;s custody, control or possession (including without limitation those held by TMPA' agents, l
attorneys and consultants) pertaining to or involving Comanche Peak or the Pending Litigation.
Agreement at p. 25, $5.2(c).E' al This provision is particularly disturbing because TUEC's present licensing counsel were involved with its drafting.
Unquestionably, TUEC's counsel had full and complete knowledge that the secreting of information from the then convened ASLB panels violated standing orders of the ASLB.
The intentional secreting of information from the NRC and willingness to mislead the ASLB about the existence of information in TUEC's possession l
is a manifestation of the corporate policy TUEC employed which l
caused extensive delays in construction and is responsible for current delay in' construction of Unit 2.
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BEPC and TMPA not only were required to give TUEC
.dete control and possession of all information, they remait. coligated to function as a surrogate of TUEC and " cooperate" with TUEC's efforts to conceal this information from the ASLB, the NRC and Petitioners.
Under the heading " Covenant of Cooperation," the Agreements state:
The parties hereby covenant and agree to assist, cooperate with, and support each other (other than financial) on the event that a third party institutes any action against either of them with respect to Comanche Peak and any incident or attribute thereof...
TMPA Agreement at p. 42, 59.5; BEPC Agreement at p.
46, 59.6.
The Agreements explicitly provided that, "to the full extent permitted by law," TMPA and BEPC must " exercise such privileges and claims of confidentiality as may be available to prevent disclosure thereof to any person or entity, private or governmental."2/
TMPA and BEPC Agreements at p.
25, 55.2(c).
As such, TMPA and BEPC are required to invoke any applicable privilege or legal coctrine to protect TUEC's interest in the l
continued secreting of information from the NRC, ASLB, and f
Petitioners.E' Clearly, under the Agreements, TMPA and BEPC l
2/
The BEPC duty of cooperation specificully addresses situations where statements " contrary to the truth" are made before NRC proceedings.
BEPC Agreement at p.
46, 59.6.
Under the duty of cooperation, although TUEC cannot force BEPC to make a material false statement, TUEC is free to make material false statements on behalf of BEPC and, in such situations, BEPC is l
absolutely prohibited from alerting NRC to this fact.
- Indeed, l
BEPC is actually required to take steps to prohibit the release l
of information to the NRC.
U/
BEPC~and TMPA are specifically required to cooperate and assist TUEC, to the fullest extent possible, obtain "the continued...)
s 8
prohibited from c/er cooperating with any governmental investigation of TUEC and the CPSES, and to the fullest extent permitted by law, must evade subpoena, invoke Fifth Amendment privileges, etc.
b)
Prohibiting employees, consaltants, Attorneys, Agents and others from contactino the NRC. ASLB. and others The BEPC and TMPA Agreements prohibit BEPC and TMPA employees, consultants, attorneys and all other persons associated with BEPC and TMPA from assisting the NRC or any proceading concerning CPSES.
The agreements person befe=c m?
4 specifically reference BEPC's and TMPA's " officers," " directors,"
" consultants," " attorneys," " agents," " servants" and i
" representatives" (BEPC Agreement at p.
37, 59.2; TMPA Agreement at p.
37, 59.2); and specifically seek to restrict their conduct and speech so as to prohibit them from doing or saying any9hing
" involving, concerning, arising out of, or related to, the design, constr:1ction, management and licensing of, or any other matter relating to, Comanche Peak..."
TMPA Agreement at p.
37, 59.2.
Accord BEPC Agreement at p.
41, 59.4.
Moreover, under the duty of cooperation provision, BEPC and TMPA must take action i
aimed at impeding and otherwise prohibiting their employees, f
attorneys, consultants and others from ever releasing safety-l l
M/(... continued) requisite licenses and approvals for Comanche Peak pending before the NRC and its Atomic Safety and Licensing Boards and Atomic Safety and Licensing Appeal Boards, including, without i
limitation, in NRC Dockets Nos. 50-445-OL, 50-446-OL and 50-445-l CPA."
BEPC Agreement at p. 47, 59.7; TMPA Agreement at p.
43, 59.6.
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related or other information concerning CPSES to the NRC or from filing a safety related complaint against CPSES.
In sum, under the express provisions set out in the Agreements, TMPA and BEPC are required to act as the surrogates of TUEC.
They must " fully cooperate with TU Electric," " provide all reasonable requested assistance," including "the assistance of (their] attorneys," and must otherwise refrain from doing anything which could result in the release of information to "the T
NRC."
TMPA Agreement at pp. 43-44, 59.6; BEPC Agreement at p.
48, 69.7.
These provisions illegally prohibited the free flow of i
information to the NRC, the ASLB and to Petitioners.
c)
Ouid Pro Ouo of the Aareements (money for silence)
From the content of the TMPA and BEPC agreements, it is clear that TUEC paid both TMPA and BEPC money in exchange for their agreeing to secret information tney had in their possession from the ASLB, NRC Citizen Intervenors, etc.
This is plainly the meaning of 55.2 (c) of the respective Agreements.
But, more t
importantly, TUEC's intent is derived from the process employed in $5.2(c) for the secreting of information.
In this respect, TUEC constructed the agreements so that it obtained possession and control of all the information TMPA and BEPC had under their control and possession and it was TUEC who thereafter secreted this information from the AC1B in violation _of a standing order to the contrary.
Thus, it is not merely the language ir. the agrcements but TUEC's conduct after it consummated the agreements which demonstrates that the cuid pro cuo TUEC sought was the i
10 e
secreting of information from the ASLB, tre NRC and Petitioners.U/
Erplicit language contained in the respective agreements further speaks to TUEC's intent.
The BEPC Agreement states that BEPC could not reach settlement until it recognized TUEC's
" equitable" right to take steps to ensure that no one associated with BEPC ever released any information to the NRC that was in any way damaging to TUEC or would effect TUEC's attempts to galas construction permits and operating licenses for the CPSES.
In this respect, the BEPC Acreement expressly provides that it was understood between the parties that in order for BEPC to "obtain a final settlement with TUEC," BEPC " understood and agreed" that it would be " inequitable" for BEPC to allow its attorneys and consultants to " assist any third party in opposing TU Electric in connection with any matters relating to Comanche Peak" and, as such, BEPC must take "all such action as may be necessary or l
M/
It is incredulous that TUEC would attempt to defend the language contained in the Macktal and Polizzi agreements based on Texas Utilities Electric Co.
(Comanche Peak Steam Electric Stations, Units 1.and 2), CLI-88-12., 28 NRC 605 (1988).
As TUEC is fully aware, this holding was withdrawn by the NRC on I
reconsideration when the NRC was, for the first time, fully briefed on the public policy and factual considerations pertaining to the Macktal agreement.
See Texas Utilities l
Electric Co.
(Comanche Peak Steam Electric Stations, Units 1 and 2), CLI-89-6, 29 NRC 348 (1989).
In any event, on April 27, 1989, NRC Staff issued a letter to TUEC requiring that it contact parties to restrictive settlements and advise them that the settlement did not preclude them from freely releasing information concerning licensing matters before the NRC.
See April 27, 1989 letter from NRC Staff to Licensees (" Enclosure 6 hereto).
The TMPA and BEPC agreements clearly impede employees j
from contacting tb NRC with information and TUEC was required to so notify TMPA's i BEPC's employees of this.
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appropriate in order to prevent the consultants and attorneys...from participating or assisting in any manner adverse to Brazos' duty of cooperation" so as to prevent BEPC attorneys and consultants from assisting anyone in any "NRC" proceeding related to " Comanche Peak."
BEPC Agreement at 99.2, at p.39.
III. THE BEPC AND TMPA AGREEMENTS DEMONSTRATE THAT TUEC'S PAST CORPORATE POLICY WHICH RESULTED IN THE DELAY OF THE CONSTRUCTION OF THE CPSES HAS NOT BEEN DISCARDED On there face, the TMPA and BEPC settlements indicate that TUEC feared that the information in the possession of its joint owners might adversely effect the licensing of CPSES. It was precisely to prevent persons such as Petitioners from obtaining information which may be harmful to TUEC's position that TUEC executed these restrictive agreements.
The language of these agreements demonstrates that TUEC knowingly and deliberately entered into restrictive settlement agreements with its joint owners and therein secured a guarantee that this information would never reach the, MRC, the CPSES intervenors, the CPA-1 i
l ASLB, the CPA-2 ASLB or Petitioners.
l This course of conduct by TUEC is prima facie evidence that I
it does not have the requisite character, competence or integrity to continue constructing the CPSES Unit 2.
TUEC's concealing of i
information directly threatens that public's health and safety.
Worse, at the time the settlements were executed, TUEC concealed this infornation knowing that to do so constitutr i a gross and wanton violation of a standing ASLB order requiring TUEC to 12 l
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timely appraise the ASLB (and thereby appraise the public) of relevant information that came to its attention.
1.
TUEC Intentionally Violated a Standina ASLB Order Unlike the settlement with Tex-La, the TMPA and BEPC settlements were both executed prior to the dissolution of the ASLB which had been adjudicating the CPA-1 contention.EU Consequently, the TMPA and BEPC settlements were executed in violation of TUEC's fiduciary and legal obligations to the NRC.
During the course of the CPA-1 proceeding, the ASLB placed TUEC under an affirmative obligation to notify the ASLB (and consequently the public) of any and all relevant information TUEC obtained while the CPA-1 proceedings were on-going.
See Exhibits 8 and 9 to Supplemental Petition.
The provisions of the TMPA and BEPC outlined 'abov2 violated the fiduciary and legal obligations of TUEC to the Board, the public, the former intervenors and Petitioners.
2.
TUEC has not Repudiated its Corrupt Corporate Practices i
To date, TUEC continues to defend the secreting of I
information from the.ASLB through settlement agreements which are l
carefully crafted to prohibit persons from contacting a convened ASLB with information, see, e.g.,
TUEC's Answer to the Supplemental Petition to Intervene at p.
24 (referring to the i
restrictive terms as "a standard provision in settlement EU i
The final TMPA settlement agreement was reached on 19' 8; the final BEPC Agreement on July 5, 1988.
The February 12, 6
CPA-1 proceedings were dissolved on July 13, 1992 by order of the ASLP.
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agreements between commercial entities"); also see Attachment B to TUEC's Answer to the supplemental Petition at p.
5 (referring to the restrictive terms as being " consistent with the public interest").
More troubling, at the time TUEC entered into these agreements it knew that not only was it illegal to conceal safety information from the ASLB but that it had an af firmative duty to provide the ASLB with all relevant information it obtained concerning the then on-gving CPA-1 and Operating License proceedings.
Yet, TUEC entered into agreements with its co-(and with individual whistleblowers and other persons) owners intending to and, in fact, keeping relevant information from the hands of the ASLB.
TUEC's continued defense of its secreting information from the NRC demonstrates that TUEC has not repudiated the corporate policy responsible for the delays in construction (e.g.,
the policy of secreting information from the NRC).
IV.
THE BEPC AND TMPA AGREEMENTS VIOLATE THE ENERGY REORGANIZATION ACT AND IMPORTANT PUBLIC POLICIES 1.
Restrictive Acreements Undermine the Reculatory Process In hearings before the U.S. Senate Subcommittee on Nuclear Regulation, the adverse impact that restrictive agreements have on the public trust and the regulatory process was fully discussed.
In regards to the appropriateness of restrictive settlements, such as the TMPA and BEPC agreements, in the area of nuclear safety, the former Chair of the Subcommittee spoke for a bi-partisan consensus:
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It is shocking to me that we should even have to hold a hearing on such questions.
It seems self-evident thut it is wrong to pay witnesses mont to testify, regardless of the content.
Any judicial procedure becomes a sham if witnesses can La paid to withhold evidence.
Yet we find that in the area of nuclear regulation the practice may be common.
I am most surprised that legality of these payments could even te an issue in light of the substantial body of law what says that agreements of this type are, in fact, illegal.
U.S. Senate Subcommittee on Nuclear Regulation,-The Secret Settlement Aareements Restrictina Testimony at Comanche Peak, etc., p. 2 (May 4, 1989).
Likewise, the relationship }
- ween restrictive settlements and the " integrity of the regulatory process" was explicated
Because the NRC did not examine these linkage issues, and because they affect the integrity of the regulatory process, the subcommittee is conducting such an examination.
Secrecy breeds distrust.
Throughout the history of nuclear regulation, the Congress has insisted upon an I
open and public licensing process to promote trust and confidence.
The public process we have today is a result of the belief that disclosure of all information will do more to advance public confidence in nuclear safety than suppression of selected information that the industry or the Commission may believe is harmful, or irrelevant, and costly to dispute.
Id.,
p.
3-4.
The regulatory process requires that the information obtained by TMPA and BEPC which relates, in any manner, to the licensing of CPSES (or the issues related to this proceeding) be fully disclosed to Petitioners.
The fact that TUEC required that this information be suppressed as a condition of settlement constitutes strong evidence in support of this Board's acceptance i
of Petitioner's contention.
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2.
E_ection 210 Section 210 of'the Energy Reorganization Act, 42 U.S.C.
S 5851 (and its implementing-regulations, 29 C.F.R.
Part 24 and 10 C.F.R. Part 50), protects the right of employees to use third persons to assist the employee raise safety concerns.
For example, in the legislative history for Section 210, the right of employees to contact non-NRC sources with information (i.e. such as a labor union) was explicitly recognized:
"Under this section, employees and union officials could help assure that employers do not violate requirements of the Atomic Energy Act.
S.
Rep.95-848, reprinted in 1978 U.S.
Code Cong, & Admin. News
?
7303-04 (emphasis added).
This recognition that persons covered under Section 210 may want to utilize third parties to engage in protected activity was codified by Congress in the statute itself.
Section 210(a) recognizes that employees may engage in protected activity 3
I directly or through third parties:
the employee (or any person acting pursuant to a request of the employee)
" 42 U.S.C. S 5851(a).
T1.s statutory right to " assist" third parties engaged in protected activity is consistent with the overall definition of protected activity.
For example, just as no Commission licensee can bar an employee from " testify [ing)" in an NRC proceeding, a licensee cannot prohibit an employee form " assisting" third parties who are engaged in any type of NRC proceeding.
42 lJ.S.C.
S 5851(a) (2)-(3).
Consequently, if an employee wanted to provide 16 i
i
testimony in support of a citizen intervenor or in support of a proceeding brought under 10 C.F.R. 52.206, such conduct is statutorily protected.
In this respect it is illegal.or TUEC to either directly or indirectly through the use of restrictive settlement agreements to impede the right of persons to." testify" or " assist" anyone intervening before an ASLB or any other proceeding before the NRC.
It is not surprising that the Department of Labor has found that an employee's contact with an intervenor in a NRC proceeding is statutorily protected conduct.3/
Moreover, these Agreemencs violate 10 C.F.R.
e 50.7(f).
Section 50.7 (f) explicitly prohibits employers, such as TUEC, BEPC and TMPA (and Tex-La) from prohibiting or inhibiting
" employees," including attorneys and paid consultants, from engaging in protected activity.
10 C.F.R. 5 50.7 incorporates by reference all of the substantive protections afforded the public by Section 210 and, in addition thereto, specifically prohibits utilities from entering into the restrictive settlements TUEC entered into with its minority owners.
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The U.S.
Department of Labor, in the case of Hunn v.
Duke Power Company, No. 84-ERA-27, D&O of Deputy Secretary of l
Labor, p. 13 (July 30, 1987), explicitly ruled that employee l
contact with citizen intervenors was protected as a matter of law.
This ruling under the Energy Reorganization Act was in accordance with the SOL's rulings in other cases under identical employee protection laws also administered by the SOL.
- See, e.o.
Wedderspoon v.
Millican, No. 80-WPCA-1, D&O of ALJ at pp. 10-11 (July 11, 1980), adopted by the SOL (July 28, 1980)(employee's contact with an environmental organization and the news media constitutes protected activity).
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Thus, the provisions contained in the BEPC and TMPA Agreements (and the Tex-La agreement) which artfully attempt to prohibit employees, attorneys, consultants and others from
" assisting" citizen intervenors are patently illegal.
3.
Public Policy a) Case Law Even without the statutory and regulatory precedent out.31ned above, restrictive settlements such as the Tex-La agreement have been voided on public policy grounds for years.
- See, e.o.
EEOC v.
Cosmair, 821 F.2d 1085, 1090 (5th Cir. 1987); Ipwn of Newton v.
Rumery, 480 U.S.
386, 392 (1987) ("[a] promise is unenforceable if the interest in its enforcement is outweighed by a_public policy harmed by enforcement of the agreement").
In case after case, the courts and the Department of Labor have found settlement provisions far less restrictive than the BEPC and TMPA agreements void against public policy.
These provisions were voided even when, unlike the BEPC and TMPA agreements, the settlements contained explicit provisions which allowed cvenues of disclosure to the NRC of safety related information.
For example, in Polizzi v. Gibbs and Hill, 87-ERA-38, D&O of SOL (July 18, 1989)
(" Enclosure 7" hereto), the SOL reviewed the legality of an agreement which restricted certain rights of Mr.
Polizzi to participate in NRC ASLB proceedings, but explicitly allowed Mr. Polizzi to inform the " Nuclear Regulatory Commission of any and all safety concerns he may have relating to the 18 i.
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Comanche Peak Stean Electric Station."
Polizzl, p 3-4 (citing t.
from the settlement agreement).
Despite this provision, the SOL struck down the legality of the restrictive provisions of the l
Polizzi agreement as violative of the Energy Reorganization Act.
According to the SOL:
)
the Settlement Agreement signiticantly restricts access.
to information (Polizzi] may be able to provide relevant to the administration and enforcement of the ERA (i.e. Energy Reorganization Act] and many other laws.
Its effect, to a large degree, would be to
' dry up' channels of communication which are essential for government agencies to carry out their responsibilities. NLRB v.
Scrivener, 405 U.S.
117, 122 (1972).
hs such, I find it against public policy.
- Polizzi, p.
5-6.
The public policy behind aggressively promoting the filing of safety complaints or concerns with the NRC is monumental.
As the U.S. Supreme Court recently recognized, the public policy behind Section 210 of the Energy Reorganization Act is not only l
to protect persons from discrimination, but to " encourage" the filing of safety complaints.
Enalish v.
General Electric, 496 U.S._72.
110 S.Ct. 2270. 110 L.Ed.2d 65 (1990).
The BEPC, TMPA (and Tex-La agreement) thwart the very Congressional policies behind the enactment of Section 210 and thwart the very NRC policies behind the enactment of 10 C.F.R. 50.7.
b)
NRC Policy Moreover, the NRC has adopted public policy considerations with respect to a licensee's conduct.
All licensees are required to possess the requisite character and integrity necessary to j
19 i
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safeguard the public.
In this respect, the NRC has determined that:
The generally applicable standard to determine licensee character and integrity is whether there is reasonable assurance that the licensee has the character to operate the facility in a manner consistent with the public health and safety, and with the NRC requirements.
To deice that issue, the Commission may consider evidence of licensee behavior having a rational connection to safe operation and some reasonable relationship to licensee's candor, truthfulness, and willingness to abide by regulatory requirements and accept responsibility to protect pubic health and safety.
i In re Pipina Specialists. Inc, LBP 92-25 (September 8, 1992)(citing Metropolitan Edison Co. (Three Mile Island Nuclear Station, Unit 1), CLI-85-9, 21 NRC 1118, 1136-37 (1985).
The secreting of safety-related information by a licensee through the use of restrictive settlement agreements as well as a licensee's intentional withholding of information from an ASLB knowing that to do so constituted a violation of an on-going duty to disclose such information 'o a sitting ASLB, is wholly inconsistent with the NRC's stated policy with respect to a licensee's integrity and character.
Additionally, the Chairman of the NRC in a prepared statement to a U.S. Senate Subcommittee stated:
...let me state emphatically, that an agreement whereby any person--not just ar employee or former employee with pending claims under Section 210 of the Energy Reorganization Act, but any person--contracts to withhold safety-significant information from the Nuclear Regulatory Commission is not acceptable... [A]
paid-for confidential commitment by an individual not to raise safety concerns with the NRC in any fashion is intolerable... The objective of this effort is to leave no uncertainty that narties to settlement agreement 20 i
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i understand that they have the opportunity to provide information directly to the Commission."
May 4, 1989 Statement submitted by the NRC to Senate Subcommittee l
on Nuclear Regulation, at pp. 4-7 (emphasis added)(" Enclosure 8" i
hereto).M/
The plain meaning of the NRC's May 4, 1989 demonstrate that restrictive clauses executed with any person which restricts the flow of information to the NRC is unacceptable.
The TMPA Agreement specifically requires TMPA to "take all such action as may be appropriate in order to prevent its consultants and attorneys... from narticipatino or assistina in any manner adverse to TMPA's duty of cooperation" and must not assist or cooperate in any manner with "any current or future proceedings or matter before...the ERC involvina or relatina to Comanche Peak."
TMPA Agreement at p. 39, @9.2 (Emphasis added).
Accord BEPC Agreement at p.
39, 59.2 (BEPC must " encourage and solicit" its attorneys and consultants and "take all such action as may be necessary or appropriate in order to prevent the consultants and l
attorneys...from participating or assisting in any manner-adverse to Brazos' duty of cooperation,"
and specifically with respect H/
Also see NRC Staff's April 27, 1989 letter (" Attachment 6"), which states
- 3xamples of restrictive clauses include but are not limited to prohibiting or in any way limiting an employee, or an attorney for such employee, from coming to and providing safety information to an NRC staff member.
21 A.
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1 J
to any proceeding before the "NRC").
These provisions are per se restrictive and violative of NRC policy.E/
J 4.
The Restrictions Against Filing Charges with the NRC and others regarding CPSES Contained in the TMPA and BEPC Acreements are Illecal and Void In addition to the problems outlined above, Section 9.2 of the BEPC agreement and its counterparts in the TMPA (and Tex La) agreements are void.
These sections prevent the former minority owners (and their employees, agents, attorneys, consultants, etc.) from filing safety related complaints "in any manner involving, concerning, arising out of, or relating to, the design, construction, management and licensing of, or any other matter relating to, Comancne Peak.
" BEPC Agreement Section
~9.2, p.
- 37. This provision bars filing, "directly or indirectly,"
"any complaint" concerning safety related matters in "any forum whatsoever." BEPC Agreement, p.
37-38.
Under this provision, i
BEPC and its " insures, agents, servants, employees, off1cers, i
l directors, consultants, attorneys and representatives," are prohibited from filing complaints with the NRC, such as a U'
The BEPC and TMPA Agreements specifically seek to restrain all of BEPC and TMFA's employees from contactii., the NRC as well.
See TMPA Agreement at p.
37-38; BEPC Agreement at p.
36-37.
Pursuant to.NRC Staff's letter of April 27, 1989, it was incumbent upon TUEC to insure that the minority owners, their attorneys and employees did not interpret the agreements in a manner which would restrict the free flow of safety related information to the NRC.
TUEC never took this step and never advised the NRC of the restrictive terms contained in these agreements pursuant to the requirement to do so set out'in NRC's April 27, 1989 letter.
TUEC's failure to comply with NRC Staff's April 27, 1989 memorandum is further indicia that TUEC continues to maintain a corporate policy of prohibiting the release of relevant information to the NRC which resulted in the delay of construction of the CPSES.
22 i
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J petition under 10 C.F.R. 2.206, or a safety related complaint to the AST".
BEPC Agreement Section 9.2.
Because the provision also enccmpasses filing of " indirect" i
complaints, the restrictions would also prevent the above-listed persons-from giving information to Petitioners for Petitioners use in their various complaints against TUEC and CPSFS.
1 Prohibitions on the right of employees to file charges have l
been voided by both the U.S.
Secretary of Labor (in an Energy se Reorganization Act case) arid the U. S. Court of Appeals for the Fifth Circuit.
In Polizzi the SOL found that prohibitions on the right to file a " charge" concerning matters made illegal under federal law was " void as against public policy." Polizzi, p.6.
In so holding, the SOL agreed with the Fifth Circuit's decision in EEOC v.
Cosmair, 821 F.2d 1085, 1090 (5th Cir. 1987):
Allowing the filing of charges to be obstructed by enforcing a waiver of the right to file a charge could impede (NRC) enforcement of the [ nuclear safety laws)
. A charge not only informs the [NRC) of [a potential safety concern) but also may identify other unlawful company actions.
Polizzi, at p.
6 (quoting Cosmair, 821 F.2d at 1090),
Under the Polizzi and Cosmair precedents, the restrictions 4
contained in the BEPC and TMPA agreements are_ illegal and void as against public policy.
CONCLUSION The TMPA and BEPC Agreements demonstrate that TUEC intended to and did secret information from the ASLB, NRC, citizen s,
intervenors and the general public about the impropriety of its 23 i
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corporate policies, how these corporate policies resulted in delay, and information demonstrating that TUEC has not repudiated this corporate policy.
This, taken together with TUEC's current willingness to argue that restrictive settlements which explicitly keep information from the NRC, intervenors and the public are acceptable, demonstrates that TUEC still maintains the same corporate policies which caused safety problems to be incorporated into the design and constructior. of the CPSES, resulting in extremo delays in construction which currently effect TUEC's ability to complete the construction of CPSES Unit 2.
TUEC's execution of the TMPA and BEPC agreements supports Petitioners' request that their contention be accepted by this Board.
Respectfully submitted, ln,
[~
s Michael D.
Kohn Stephen M.
Eohn i
Kohn, Kohn and Colapinto, P.C.
517 Florida Avenue, N.W.
Washington, D.C.
20001-1850 (202) 234-4663 Attorneys for Petitioners 053\\ suppl.cpa 24 i
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NUCLEAR REGULATORY COMMISSION
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September 15, 1992 Docket Nos. 50-445 and 50-446 Mr. William J. Cahill, Jr.
Group Vice President, Nuclear TU Electric Company 400 North Olive Street, L.8. 81 Dallas, Texas 75201
Dear Mr. Cahill:
SUBJECT:
COMANCHE PEAK STEAM ELECTRIC STATION - REQUEST FOR DOCUMENTS TO SUPPORT NRC STAFF REVIEW 0F 2.206 PETITION (TAC NO. M84073)
The NRC staff is conducting its review of materials related to the 10 CFR 2.206 Petition filed by Michael D. Kohn on June 11, 1992, on behalf of the National Whistleblower Center and Messrs. Macktal and Hasan related to the Comanche Peak Steam Electric Station (CPSES).
The staff has determined that additional documents are necessary to complete the review.
You are requested to provide Exhibits L through Q, inclusive, to the January 30, 1990, settlement agreement between TU Electric and Tex-La. Electric Cooperative of Texas, Inc. (Tex-La).
You are also requested to provide copies of settlement agreements with all other former co-owners of CPSES, and exhibits similar to those requested for TU Electric's January 30, 1990, settlement agreement with Tex-La.
The reporting requirements contained in this letter affect fewer than ten respondents, therefore OMB clearanc.e is not required under Public Law 96-511.
You are requested to provide these documents within 20 days of receipt of this letter.
Sincerely, lku W S Martin J. Virgilio, Assistant Director for Regions IV and V Reactors Division of Reactor Projects III/IV/V Office of Nuclear Reactor Regulation ls u - l ] E I cc: See next page a
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KO H N, KO H N & CO LAPINTO, P.C.
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September 24, 1992 Martin J. Virgilio, Assistant Director for Regions IV and V Reactors Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Commission Washinoton, D.C.
20001 Re:
Comanche Peak Steam Electric Station 2.206 Petition Review (TAC No. M84073)
Dear Mr. Virgilio:
In a September 15, 1992 letter addressed to Mr. William J.
Cahill, you indicate that review of the 10 C.F.R. 2.206 petition filed by me required TU Electric to submit documentation related to settlements entered into between TU Electric and its former co-owners.
I request that your office instruct TU Electric to serve a copy of their response to your September 15, 1992 letter upon petitioner.
l
-Thank you for your assistance in this matter.
Sincerely yours, f'/N W
Michael D.
Kohn CC:
William J.
Cahill, Jr.
TU Electric 400 North Olive Street, L.B.
81 Dallas, Texas 75201 M
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.g WASHING TON, D. C. 20555 t%, V October 13, 1992 Michael D. Kohn, Esq.
Kohn, Kohn and Colapinto, P.C.
517 Florida Avenue, N.W.
Washington, D.C. 20001
Dear Mr. Kohn:
SUBJECT:
MATERIALS RELATED TO COMANCHE PEAK STEAM ELECiRIC STATION 2.206 PETITION REVIEW (TAC NO. M84073)
This letter is in response to your September 24, 1992, letter requesting that TV Electric be instructed to provide you a copy of materials related to the Nuclear Regulatory Commisshn (NRC) review of the 10 CFR 2.206 petiti,n you filed on June 11, 1992.
4 In accordance with Section 50.4 of Title 10 of the Code of Federal Regulations,
TV Electric sent these materials to the NRC Document Control Desk.
These materials, which were provided by TV Electric letter dated September 21, 1992, are available for inspection at the Commission's Public Document Room, the Gelman Building, 2120 L Street, N.W., Washington, D.C. 20555.
Sincerely, c
Martir. J. Virgilio, Assistant Director for Region IV and V Reactors Division of Reactor Projects III/IV/V Office of Nuclear Reactor Regulation 4
cc:
See next page l
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.i i
I AGREEMENT between TEXAS MUNICIPAL POWER AGENCY TMPA 1
and i
TEXAS UTTIJffE5 ELECTRIC COMPAMT TU Elettrie Deted as of February 11,1984 t
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9210010020((hkig5 PDR ADOC POR O
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Esolosure V
I
(including without limitation its assumption octigations with respect to the Joint Ownership Agreement), and TU Electric shall have deuvered to TMP A a cartificate, dated as of such Closing Date, of its Chairman of the Board, a Division President or a Ylee President to the foregoing effect; l
(e)
Receipt of Payment. TU Electric shalf have deuvered to TMPA the payments referenced in paragraphs (a) and (b) of Section 1.5 hereof in the case of the Initial Closing and the payment referenced in Section 1.5(c) hereof in the case of each Subsequent Closing; and (d)
Receipt of Closing Documents. TMP A shall have received the fuuy executed Closing documerts described in Article VU hereof to be delivered at that particular Closing.
5.2 Conditions to Obligation of TU Elaetric to Close.
The collgation of TU Elec'ric to consummate the transactions contemplated by this Agreement at each and every Closity is subject to the satisfr.etion of each of the following conditions at or prior to each such Closing:
(a)
Representations ar.d Warrantles.
The representations and warranties of TMP A contained la this Agreemer" shall have been true and correct on and as of the date hereof and shall be true.
Sof rect on and as of each Closing Date in all material respects as though such representations and warranties had been made on and as of such Closing Date, and TMPA shall have delivered to TU Electric a certificate, dated as of each Closing Date, of its Prealdent or Vlee Prealdent of its Board of Directors to the fccagoing effec *;
(b)
Com6fance with Agreement. TMPA shall have fully performed and complied witn all of the covenants, agreeraents and conditions to be performed or compiled with by it at oe prior to the partleular Chsing, and TMPA shall have delivered to TU Electric a certificate, dited as of such Cloalng Date, of its l
l President or Vlee I-realdent of its Board of Directors to the foregoing effect; 1
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(c)
Delivery of Pending Litigation Doeumontation. At the Initial Closind. TMP A shall have delivered to TU Electric the originals and all copies of ett documents and other written material in its custody, control or possession (including without limitation those held by TMPA's agents, attorneys and consultants) pertaining to oc involving Comanche Peak oc the "Pendiiig Litigation, except those which are privilegec or which may be the product of TMPA's attorney's oc consultant's joint defense activities, if any, prepared in connection wls the Pending Litigation. Such documents or other written material wl..ch are essential to the conduct of TMPA's on-going business activities may be retained by TMPA except for one copy whleh will have been delivered to TU Electric prior to the Inical Closing. As concerns privileged oc jvint defense documents or written material, TMPA shau, to the full extent permitted by la w, exercise such privileges and claims of confidentiality as may be available to prevent disclosure thereof to any person or entity, private oc governmental; (d)
Approval of the Cities. Prior to the Initial Closing, the various city councils oc other governing and approving bodies or authorit!es of each of the Cities sh'd have duly and valldly adopted and approved (i) tho ordDance in the form attached hereto as F.xhibit D and (ll) the release and covenant not to sue in the form attached hereto as Exhibit Et any variances from the form of ordinance set forth in Exhibit D or any variances.' rom the form of release -
and covenant not to sue set forth in Exhibit E shall be subject to TU Electric's reasonable satisfaction and ecceptanes, provided, however, TU Electric shall notify TMPA of any such variances which are not satisfactory to TU Electric within three (3) Business Days of TU Electric's receipt of said ordiaances and releases and covenants not to sue, provided that TU Electric receives same at least three (3) Business Days prior to the Initjal Closing Data; and 25 -
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MUMN
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I (e)
Receipt of Closing Documtents. TU Electric shall have received the C:osing documents described in Article VI hereof to be delivered at that particular Closing.
5.3 Conditioiis to Obtigation of Parties to Initially Close. The ecligation of the pattties to consummate the transactions contemplated by this Agreement at the Initial Closing Date is subject to the satisf action of each of the following conditions at or prior to the Initial Closing Date:
(a)
No Adverse Prxceding. There shall not be pending any suit, action oc other proceeding by any person before any court or arbitrator or any governmental department, commission, board, bureau, agency or instrumentality in which it is sought to restrain or prohibit any of the transactions contemplated by this Agree m ent.
(b)
Waiver of Right of First R e f tsaL Immediately upon execution of this Agreement TMP A will notify BEPC and Tex-La of the execution of this Agreement by mearts of the notles attached hereto as Exhibit P.
By the Initial Closing Date, BEPC and Tex-La~will ht"* executed an irrevocable waiver or other sufficient relinyulshment of any rights of first refusal or l
consent to sete that BEPC and Tex-La may have ur. der the Joint Ownership Agreement (it being agreed that failure to exercise such right in accordance with the terms of the Joint Ownership Agreement by BEPC or Tex-La in response to the notice from TMP A within the time period specified in the l
Joint Ownership Agreement will constitute sufficient relinquishment of the rights of first refusal of BEPC or Tex-La as the case may be) with respect to any transaction provided for herein or such rights shall have been validt/
exerelsed, in whole or in part, by either oc both cf BEPC and Tex-La and the i
purchase which arises as a result of such exercise fully consummated. In the event that either oc both of BEPC and Tex-La shall have exercised sny such rights of first refusti to the extent that BEPC and/or Tex-La acquire all of r'
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r
1 insurers, agents, servants, employees, o f ficer s, dir ec tors, shar eholders, consultants, attorneys and representatives, past and present, and any and all of their respective successors, subsidiaries and affiliates and their respective agents, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives, past and present, except Subject Claims arising out of or under this Agreement or any of the other agreements or instruments to be delivered by TU Electric or TUC pursuant hereto. TMPA hereby covenants and warrants that it has not assigned any Subject Claims that are to be I
released at the Initial Closing. At the Initial Closing, TMP A will execute and deliver to TU Electric the form of Release attached hereto as Exhibit L 9.2 Covenant Not - to Sue. Except as provided for in Section 4,2(g) hereof, upon the Initial Closing, TMP A, for itself and on behalf of any person or entity, private or t
governmental, claiming by, through or under TMP A, including without limitation its or tt.eir respective insurers, agents, servants, employees, officers, directors, consultants, attorneys and representatives shall agree and covenant that it and they, individually, collectively or in any combination, will forebear from asserting against, and never sue for or look for satisf action with res; ici w, TU Electric and TUC and their respective insurers, agents, servants, employees, o f ficers, directors, shareholders, consultants, attorneys and representatives, past and present, and any and all of their respecuve successors, subsidiaries and affiliates and their respective agents, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives, past and present, any Subject CIAlm (including without limitation any Subject CIAlm against any contractor, subcontractor, stoplier, consu"
., vendor or other person, firm or entity in privity in any mannar with any of them
...ch may therefor or as a result thereof t. ave a right over or Subject Claim in subrogation) in any manner involving, concerning, arising out of, or relating to, the design, construction, management and licensing of, or any other m'afTErmisttnf15~~~ Comanche Peak, and the management, procurement, conversion, enrichment, frbrication,Nhipping, transportation and stocage of the Fuel, except7or claims arising out of or under this Agreement oc any of the other agreements or
! 8
instruments to be delivered bj TU Electric pursuant hereto; anc TMP A for itself and on behalf of any person or entity, private or governmental, claiming by, through or under TMP A, including without limitation its or their respective insurers, agents, servants i
employees, officers, directors, consultants, attorneys and representatives herecy further agrees and covenants that, upon and after the initir,1 Ching, neither it nor the individually, collectively or in any combinetton,. wiu directly or directly, chagge, contest or assert any comptaint in any court or before any $dmiEistrative agency or body
~~
~~
~ ~~~
~ ~ ~ ~ '
or in any other forum whatsoever with respect to, or in any manc.er involving, concerning.
arising out of, or relating to, Comanche Peak and the incidents and attributes thereof including, without limitation, the design, construction, management and licensing of Comanche Peak or any other aspect thereof, the costs and schedule of construction and completion of Comanche Peak, and the reasonableness, prudency or efficiency of the plarning, design, construction, management and 11cen.uing of Comanche Peak, the costs of ccnstraiction and the schedule of construction and completion of Comanche Peak, and the reasonableness, prudency or ef ficiency of, the management, prwarement, conversion, enrichment, fabrication, shipping, transportation and storage of the Puel, mi the costs
- icurred in connection with the m anage m ent, procurement, conversion, enrichment, f abrication, shipping, transportation and storage of the fuel, and the breach of the Joint Ownership Agreement and any express or implied warranties arising out of the Joint Ownership Agreement, and any r epresenta tion, misrepresentation, disclosure or non-disclosure in connection with the negotiations or preceding the execution by TMP A of the a sint Ownership Agreement, and in connection with the performance or nonperformance by TU Electric of its duties, responsibilities or obligations under the Joint Ownership Agreement as Project Manager or otherwise, and the failure of TU Electric to pursue any remedies, either at law or otherwise, that may be, or may have been, available e. gainst any and all contractors, subcontractors, suppLlers, consultants, vendors or others with respect to Comanche Peak (including separately the Station, Fuel or Transmission Pacilitias) and on account of anything that has occurred or may have occurred, in whole or 6
= 4.eM e g.
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in p ar t, oth respect to Comanche Pena, 0ncluding seporately the Station, Fuel or Transmisaion Facilities) and the incident.s and attributes thereof and any of the foregoing whether known or unknown, except with regard to Subject Claims arising cut of or under this Agreement or any of the other agreements or instruments to be delivered by TU Electric pursuant hereto. At the Initial Closing, TMP A will execute and deliver to TU Electric the form of Ceavenant Not to Sue attached hereto as F.xhibit J.
Fur the r, TMP A covenants and agrees that it will encourage and solicit its attorneys, including i.;
Fulbright & Jaworski, and TMP A's separately employed consultants, to cooperate and
-- ~ -
~
assist TU Electric in connection with any matters relating to Comanche Peax; and, if necessary to prevent a conflict of intere5 it bemg understood and agreed that TMP A's separately employed consultants and attorneys may have obtained or developed informatica regarding Comanche Peak in the course of the Pending Litigation that J
arguably could be inequiteble for them to otherwise utilize in view of the consideration
~
being rendered by TU Electric hereundar in order to obtain a final settlemeni.of--4A matters referred to in this Agreement, TMPA covenants and agrees that it will take all
~
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such action as may be necesaary or appropriate in order to prevent the consultants and attorneys, including Fulbright & Jaworski, separately employed by it in connection with t e Pending Litigation from participating or assisting in any manner adverse to TMP As duty of cooperation herein or to TU Electric in connection with the Pending Litigation, the Pending Houston Suit or any current or future proceedings or matter before the PUC or the N RC involving oc relating to Comanche Peak, or any current or future proceedings before any court or before any admlnistrative agency or body or in any other forum what. soever with respect to, or in any manner involving, concerning, arising out of, or relating to (i) the acts or omissions of TU Electric or the Project Manager referred to or in question in the Pending Litigation or which could have been brought Into question in the Pending Litigation; or (ii) the acts oc omissions of TU Electric oc the Project Manager with respect to Comanche Peak that occur, in whole or in part, retor to the Date of Commercial Operation (as said term is defined in the Joint Ownership Agreement). The
, e
...J....- -
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or the customees of TMPA seting in such capacity or debt holders acting in such capacity (including without limitation the holder of any revenue or other bond or other obligation) of TMPA relating to TMPA's execution of the Joint Ownership Agreement, TMP A's l
execution of this Agreement and participation in the transactions provided herein, and TMP A's activities as an Owner separate and apart from joint activities with all other Owners or activities by, through and under the Project Manager. Pursuant hereto, at the initial Closing TMP A will execute and deliver to TU Electric the form of Indemnity Agreement attached hereto as Exhibit M.
9.5 Covenant of Cooperation. The parties hereby covenant and agree to assist, cooperate with, and support each other (other thartfinancial support) in the event that a third party institutes any action against either of them with respect to Comanche Peak and any incident or attribute thereof, by virtue of either of them being or having been an Owner, except that TMP A shall not cooperate with or support any party in the Pending Litigation with regard to the Subject CIAlms being made therein by Ter-La and BEPC.
9.o Terrr instion of Participation. To the extent that TMP A can and not ce n violation of Section 210 of the Energy Reorganization Act,42 USC Section 5851 (1983),
upon the execution of this Agreement, TMP A, foe itself and on beh.u' of any person or entity, private or governmental, claiming by, through or under TMP A, including without l
l Limitation its oc their respective insurers, agents, servants, employees, of ficers, l
directors, consultants, attorneys, representatives and customers (to the extent in the case of such customers of TMPA lt has legal right oc standing to do so) agrees and covenants to immediately abate any and all currently pending actions wha tsoever, dit ec tly or i
l indirectly, involving or relating to the prosecution or processing of any Subject Claims against TU Electric or TUC, or their respective directors, officers, employees, agents, insurers, consultants oc attoeneys, past or present, and any and all of their respective successors, subsidiaries and affiliates and their respective agents, servants, employees, officers, directors, shareholders, consultants, attorneys and representatives, past and present, presently oc hereafter pending in any court or before any administrative agency r
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or Dody (except Suuject Claims being made in the Pending Litigatica, which shall de governed by the provisions of Article !Y of this Agrcement), in such capacity and to the extent TMP A can and not be in violation of Section 210 of the Energy Reorganization Act.
42 USC Section 5851 (1983)(T.1P A hereby representing and warranting that it knows of no violation, actual or alleged, of Section 210 of the Energy Reorgnization Act 42 USC Section 5851 (1983) which has not heretofore been disclosed to TU Electric in writing).
TMP A agrees and covenants that TMP A for itself and on behalf any person or entity, private or governm e ntal, claiming by, through or under TMPA, including without i
Umitation its or their respective insurers, agents, servants, employees, officers, director,
consultants, attorneys, representatives and customers (to the extent in the case of such customers of TMP A it has legal right or standing to de so) shall not pro ecute, directly o-indir ectly, any Subject Claims, objections, motions or other actions adverse r.o TU Electric in connection with applica tions for granting the requisite licenses end i
approvals for Cor ciche Peak pending before the NRC and its Atomic Safety and Licensing Boards and Atomic Safety and Licensing Appeal Boards, including, without limitation, in N RC Dockets Nos. 50-445-OL, 50-446-OL and 50-445-CP'A~~We7n(61ng antitrust review relative to the licensing of Comanche Peak, and any and a 1 appeals from rulings and orders of the N RC related to, or growing out of, said Dockets which are pending before any court. Within three (3) Business Days af ter the Initial Closing, TitP A l
l shall cause the dismissal, with prejudice to the refiling of same in any form whatsoever, l
of all of its Subject Claims against TU Electric, TUC and thalt subsidiaries and affiliates in the Pending Litigation, and shall withdraw all of its Subject Claims adverse to TU Electrie in connection with ee granting of the requisite licenses and approvals for Comanche Peak pending in the NRC Dockets Noa.
50 -4 45 -O L, 50-446-OL and 50-445-CP A and any and all proceedings in any manner related to, or arising out of, said Dockets.
TMP A agrees and covenants, from and af ter the Initial Cloalng, to fully cooperate with TU Electric and provide all reasonably requested assistance, including providing the e e.
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l legal assistance of its attorneys lincluding Fuloright & Jaworski), in a timely manner.n connection with any 'egal proceedings (excluding the Pending Litigation) involving
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Comanche Peak, incluting the-Ucensing of Comanche Peak by the NRC, including without bmitation the ongo ng antitrust review in connecticn therewith, and all proceed 5gs involving Comanche Peck before the PUC, Except as specifically provided otherwise in this Agreement, TU Electric shall promptly reimburse TMP A for any and all reasonable
(
out-of-pocket expenses and any and all reasonable ontside professional fees, including, without timitation, attorneys fees, incurred by TMPA in providing such cooperation.
9.7 TU Electrie Actions and Litigation Costs.
Within three (3) Business Days af ter the Initial Closing TU Electrie shall cause the dismissal, with prejudice to the a
reflung of same in any form whatsoever, of all of its Subject Claims against TMPA in the Pening Lit!gationt provided, however, that TU Electric shall have the right to retain TMPA as a party to the Pending Dallas Suit. not for the purpose of seeking any-affirmative reuef against or from TMP A, but for the purpose of defeating a possible contention on the part of the other parties thereto with respect to the absence of a necessary party to TU Electric's Subject Claims against the other parties in said case (it being understood that TU Electric's position is that any such contention would not be v a ud). TU Electric shall promptly reimburse TMP A for any eno u expenses reasonsoly incurred because o.' any such retention of TMPA by Tt) Electric in the Pending Dallas Suit. It is expressly understood that nothing hereir shall in any manner affect, dimish or impai~ TU Electric's right to fully prosecute any and all of its Subject Claims against the otoer parties in the Panding Litigation. Except as provided otherwise above, all costs and expenses related to or incurred in connection with the Pending Litigation shall be borne and paid by the party by &m incurred or to which they are related.
9.8 Termination of Joint Ownership Agreement It ala tionship.
Except as otherwise provided in Section 9.4 hereof with respect to TU Electric's assumption of TMP A's obilgations undar the Joint Ownership Agreement. TMP A and TU Electric hereby agree that, upon the final Subsequent Closing, the Joint Ownerr.lp Agreement, as
}
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1 J
l 1
AG REEM ENT be tween BR AZOS ELECTRIC POWER COOPERATTVE, INC.
Nasce and TEX AS UT1LMES ELECTRIC COMPANY I
/
TU Doctric I
Detad as of Ady 9,1998 I
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l 9210010022 920921 PDR ADOCK 05000445 C
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E u c lo s o re_. 5 M
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o under this Agreement to oc consumrnated peior thereto not be consummated on or before the Closing Date. TU Electric hereby waives any such con (tiet I
of interest which ' night otherwi:e exist because of any such effort or 1
coopera tion; and
]
l y)
If it is necessary to nonsuit the current Subject Cla ns, as set forth in f
paragraphs (d) and (e) above, then in such event upon or at any time af ter the Closing, if TV Liectric requests Uratos and TU Electric agree that their
$ubject Claims in the Pending Dallas Suit shall be refiled in the New lawsuit in Dallas County vid that the New Lawsuit and all such Subject C,laims shall j
then immediately be dismissed with prejudice.
4.3 Acreement to Obtain Approvals. Ikarcs shall use 6.11 reae:,nable efforts to obtain with respect to Drazos and TU Electrie shaai etse til ressonable efforts to obtain with respect to 1 U Electric all necessary consents, appro' als, authorization
- r nits,
~
i certificatss or orders of any court, tribunal or governmental agency or authorit) Q:ere t, state. county or..nicipal, or other entity which are required by any applicable stavite or other law or by any judgment, order or decree or 'any rule or regulation of any court,
~
tribunal or government:' sgency or authority, Federal, state, county or rnunicipal, or any l
agreement or other requirement to permit each of them, respectively, to execute, deliver l
or perform this Agreement and any agreement or instrument required hereby to be l
crecuted and delivered by either of them et the Closing, ART 1CLE V CONDf710N3 TO OBtJO AT10NS TO CLOSE 5.1 Conditions to_ Obligation of tvazos to Close. The obligation of Ekatos to consummate and close the transactions contemplatN by this Agreement at the Closing is v:bject tr' 'he satisfaction of each of the following ennditions at Or prior to the Closing (a)
Representations and Warrantles.
'the representations and warrantles of TU Electric contained in this Agreement shall have been true and correct on and as of the date hereof and shall be true and coerect on and as of the Closing Date in all matartet respects u though such representations and 6 g*,'L
- 'ai.'..", '-
e_
= _ _ -
Nr
.arrenties hsd been made on eno as of the Closing Date, and TU Elsetrie shall have delivered to Brazos a certificate, dated as of the Closing Date, of its Chairman of the Board, a Division Prt.ic.ent or a Vice President to the foregoing effects (b)
Compliance with Agreement.
TU Dectrie shall have fully performed and complied with all of the covenants, agreeneents and conditions to be performed or compbed with by it at or prior to the Closing (including with(,ut limitation its assumptlen obugations with respect to the Joint Ownership h
Agre em en t), and TU Llectric shall have dehvered to Drazos a certificate, I
l dated as of.he Closing Date, of its Chairman of the Board, a Division i
President or a Vice President to the foregoing effects (c)
Receipt of Paym eni.
TtJ Dectric shall have deuvered to Drazos the i
payments referenr.ed in paragraphs (a) and (b) of Section 1.5 hereoft 1
(d)
Receipt of Closing Documents. Drazos shall have received the fully executed Closing documents described in Article Yli hereof to be delivered at the
(
Closing; and f
(e)
Consent to Assignment Agreement. The REA shall have entered into the f
Consent to Assignment Agreement attached to the Assignment Agreement, i
thereby accepting assignment of the Note as a mechanism for paying the t
Orazos Comanche Peak Debt and assignment of the Mortgage and the vendors heri contained in the Special Warranty Deed with Vendors Uen and Bill of Sale as security for the payment of the Note.
(O
_Recelpt of 1.R.S. Determina tion. Brazos shall have received an acceptable Interna 1 Revenue Servlee determination or latter Ruling that reo payments to be made WWr this Agreement and the Note will, when added to other nonmembec revenues of Ikazos, advarsely affect Brazos' tax-exempt status under $4ction 501(cX12) of the Internal Revenue Code of 1986.
5.2 Conditions to Celgation of TU Electric to Closs, The obligation of TU Electric to consummate the transactions contemplated by this Agreement at the Closing is subject to the satisfaction of each of the following conditions at or prior to the Closing:
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.y
1 g) j3cpresentations and W arr an t ie s.
The representations e.nd warranties of Brazos contained in this Agreement shall have been true and correct on and as of the date hereof and shall be true and correct on and as of the Closing Date in all material respects as though such repre**ntations and warranties had been made on and as of the Closing Date, and l#azos shall have delivered to Tt; Electric a certificate, dated as of the Closing Date, of its President or i
Executivi Vice President and General Marager to the fortgoing effects (b)
Compliance with Agreement. Grazos shall have fully performed and complied i
with all of the covenants, agreements and conditions to be performed or
)
complied with by it s' or prior to the Closing, and Drazos shall have delivered to TU Electric a certificate, dated as of the Closing Date, of its President or Executive Vice leesident and General Meager to the foregoing effects (e)
Del;very of Pending Litigation Documentation. At the Closing, Brazos shall l
have delivered to TU Deetric the originals and all copies of all documents and other written mate.ial in its custody, control or possession Un' eliding
~
without !!mitation those held by Drazos'. agents, attorneys and consultants) pertaining to or involving the Pending Litigation, other than copies of those N.i are filed in the Pending Litigation or at the NRC or which are privileged or which may be the work product or the product of Brazos' attorney's or consultant's joint de fense activities, if any, prepared in connection with the Pending Litigation or correpondence to or fro m TU Coctric or its attorneys or other enrrespondence or documents copies of which have been provided to TU Dectric oc its attorneys. Such documents or other written material whleh are essential to the conduct of Brazos' on-going business activities may be retained by Brazos arcept for one copy which will have been ovlivered to TU Dectric prior to the Closing.
As concerns privileged or joint defense documents or written material, Ikazos shall, to the full extent permitted by law, exercise such privileges and claims of
(
confidantiality as may be available _ to Ergvent _dleelosur_e thereof to any person oc entity, private or governmental.md
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.i
T ic; Heeespt of Closing Documents. TU Llectrie shall have received the Closing documents described in Article VI hereof to be delivered at the Clos.ng, 5.3 Conditions to Obugation of floth Parties to Close. The obligation of the I
"arties to consummate the transactions contemplated by this d.greement at the Closing Date is subject to the satisfaction of each of the following conditions at or prior to the g
Closing Date:
g)
No Adverse Proceeding. There shall not de pending any suit, action or other k
3 l
proceeding by any person before any court or arbitrator or any governmental I
department, commission, bnard, bureau, agency or instrumentality in which it l
l is sought to restrain or prohibit any of the transactions conternplated by this l
Agree m en t.
i (b)
Waiver of Right of first Re fusal immediately upon execution of this Agreement, &atos will tiotify TMPa and Tex-la of the execution of this Agreemerit by means of the notice attached hereto as Exhibit G.
Dy the Closing Date TMP A and Tex La will have executed an irrevocable waiver or other sufficient reunquishment of any rights of first refusal or corisent to sale that TMPA and Tex-la may have under the Joint Ownership Agreement (it being agreed that fa !ure to exeresse such right tn accordance with the terms of the Joint Ownership Agreement by TMP A or Tex-La in response to the notice from &azos within the time period speelfled in the Joint Ownership Agreement will constitute sufficient relinquishment of the rights of first refusal of TMP A or Tex-La as the case may be) with respect to any transactlon provided for herein or such rights shall have be[. validly exeressed, in whole or in part, by either or both of TMFA and Tex-la and the purchase which arises as a result of such exercise fully consummated. In the event taat either or both of TMPA and Tex-La sh:ll have exercised any such rights of first refusal to the extent that TMPA and/or Tex-la acquire all of
&azoa' interest in the Purchased Assets, &azos shall promptly refutKi to TU Electric the full amount of the Slgning Payment less $15,322,581 and
&stos shall, in consideration for retaining said $15,322,581 of the Signing 1,
y
,ithout limitation, to the extent it has the standing and right under law to do so, its bers and customers (including the customers of Drntos' Members and other,, holt sale
,3.ncrs) and.ts or their respective insurers, agents, servants, employees, of ficers, stectors. consultants, attorneys and representatives, shall waive, rele9se, discharge, fenounce and relinquish any and all Subject Claims relating to Comanche Peak it has or gney have, or may heve, whether known or unknown, contingent or absolute, including,
.ithout li'nitation, those based on common law, whether contreet (expressed or implied, including express or imphed warranty) or tort (including, without limitation, intentional tort, negbgence or gross negligence, sole, joint ce emeurrent) or strict babauty or fraud, i
l and those based upon any Federal, state or local statute, l'iw, order or regulation.
l including, althout Umitation, the Atomic Energy Act of 1954, as amended, the regulations of the NRC, the Securities Act of 1933, as amended, or the Securities Act of 1934, as I
gmended, and any rule or regulation under either, the Texas Securities Act (Title 19, Articles 581-1, et seq., V. A.T.S.) and the Texas Deceptive Trade Practices and Consumer Prot ec tion Act, against TU Electric or TUC, or both, in any capacity, whether individually, as Project Manager of Comanche Peak or otherwise, and their respective insurers, agents, serv e.n ts, employees, o f ficers, direc tor s, shareholders, consult an t *,,
sttorneys and representatives, past and present, and any and all of their respective I
successors, subsidiaries and afflustes and thelt respective insurers, agents, servants,
~
employees, officers, directors, shareholders, consultants, attorneys and representatives, past and present, except Subject Claims arising out of or under this Agreement of any of l
the other agreements oc instruments to be deuwsred by TU Deetric oc TUC pursuant 1
hereto. Bratos hereby covenants and warrants that it has not assigned any Subject Claims that are to be rateued at the Closing. At the Closing, Brazos will execute and deUver to TU Electric the form of Release attached hareto as Exhibit J.
9.:
Graros Covenant Not to Sua. Except as provided for in Section 4.2(g) hereof, upon the Closirig, Draros, for itself and on b. e_hal.f.._of__any person oc entity, privatQ tovernmentsi, ela. ming by, through or under Drazos, including without limit.ation, to the
-3 6 -
extent it has the standing and right under law to do so, its Members and customers (including the customers of Brazos' Members and other wholesale custc aers) and its or their respective insurers, agents, servants, employees, officers, directors, consultants, I
attorneys and representatives, shall agree and covenant that it and they, inoividually, collectively or in any combination, will forebear fro n asserting against, and never sue for or look for satisfaction with respect t i, TU Electrie and TUC and their respective insurers, a gen ts, serv a n ts, employees, o fficers, directors, shareholders, consultants, attorneys and representatives, past and present, and any and all of their respective succes50rs, subsidiaries and affiliates and their respective insurers, agents, servants, I
l employees, officers, directors, shareholders, consultants, attorneys and representatives.
past and present, any Subject Claim (including without limitation any Subject Clair' against any contractor, subcontractor, supplier, consultant, vendor or other person, firm I
or entity in privity in any manner with any of them which may therefor or as a result thereof have a right over or Subject Claim in subrogation) in any manner involving, concerning, arising out of, or relating to, the design, construction, management and beensing of, or any other matter relating ta, Comanche Peak, and the management.
~
procurement, conversion, enrichment, fabrication, shipping, transportation and storage of
'~
the l'uel, except for claims arising out of or under this AgNernent or any of the other j
agreements or instruments to be delivered by TU Electric, or any of Tl' Electric's I
affibates, sutoidiaries or pat ent company, pursuant heretot and Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or under Bretos, includinr without limitation, to the extent it has the standing and right under law to do so, its Members and customers (including the customers of Brazoa' Members and other wholesale customers) and its or thelt respective insurers, agents, serv an ts, j
employees, officers, directors, consultan'*, attneneys and representatives hereby further apees and covenants that, upon and af tet the Closing. neither it nor.they, indivJdua..lly, collectively oc in any combination, will directly or indirectly, challenge; contest or assert any complaint in ery :ourt or before any administrative agency oc body or in any other
, d
forum whatsoever with respect to, or in any manner invobing, concerning, arising out of, er rela ng i, Comanche Peak and the incidents and atttsbutes thereof an:luding, without limitation, the design, construction, management and licensing of Comanche Peak or any l
other aspect thereof, the costs and schedule of const.ruction and completion of Comanche k
peak, and the reasonableness, prudency or efficiency of the planning, design, construction, s
"t anag e m en t and licensing of Comanche Peak, and the reasonsoleness, prudency or y
e f ficiency of the m an a g e m en t, pr ocur e m en t, con v er sson, enrichment, f abric a tion, 3h@pir g, transportation and storage of the Fuet, and the costs ancurred in connection with the nanagement, procuremen t, con v er sinn, enrich m en t, fabrica tion,
- shipping, transpvrtation and storage of the Fuel, and the breach of the Joint Ownership Agreement I
ed any express or implied warranties arising out of the Joint Ownership Apeement, and l
any representation, misrepresentation, disclosure or non dixtosure in conne-tion with the i
regotiations or preceding the execution by Braz.os of the Joint Ownership Agreement, and in eennection with the performance or nonperformance by TU Electric of its duties,
~
responsibilities or obbgations under the Joint Ownership Agreement as Project Manager or otherwise, and the failure of TU E!*ctric to pursue any remedies, either ett la w or ntherwise, that may be, or may have been, available against any and all contractors, subcontractors, suppbers, consultants, vendors or others with respect to Comanche Peak hnelading separately the Station, Fuel or Transmission Facilities) and on account of I
anything that has occurred or may have occurred, in whole or in part, with respect to Comanche Peak, (including sep.arate!y the Station Tuel or Transmission Faciuties) and the l
incidents and attributes thereof and any of the foregoing whether known or unknown, except with regard to Subject Claims arising out of oc under this Agreement oc any of the other agreements or instruments to be delivered by TU Cectric, or any of TU Electric's affibates, subsidiaries or parsnt company, pursuant hereto. At the Cloalng, Brazos will execute and del.iver to TU Dectric the forra of Covenant Not to Sue attached hereto as Exhibit K.
Further, Drazos covenants and agrees that it will cooperate and a2+1st TU Dectrle in cortnection with all necesaary approvals of this Agreernent and that it will d.
33
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~. _. -.
encourage and sollett its attorneys, including Joseph Robert Riley, Spiegel & McDiarmid and [ocke Purnell.74:n Harrell, and &azes' separately employed consultants, not to oppose or assist any third party in opposing TU Electric in connection with any matters j
relating to Comanche Peaf. (except that nothing herein shall be construed to prohibit s.and dtorneys eEd consultants from representing Brazos in connection with proceedings in
~~
.tich TU Electric's rates are being determined provided that no opposition, or essistance 1
.o any third paaty opposition, to Comanche Peak related costs is made); and, if necessary l
to prevent a conflict of interest, it being understood and agreed that Drazos' separately employed consultants and attorneys may have obtained or developed infor mation i
regarding Comanche Peak in the course of the Pending Litigation that arguably could be
.nequitable for them to otnerwise utilize in view of the consideration being rendered by TU Electric hereunder in order to obtain a final settlement of the matters referred to in i
this Agreement. Drazos covenants and agrees that it will take q!! such action as may be 4
necessary or appropriate in order to prevent the consultants and attoraeys, including Joseph Robert Riley, Spiegel & McDiarmid and locke Purnell Rain liarrell, separately 4
employed by it in connection with, the Pending Uttgotion, from participating or assisting 4
in any manner adverse to Nazos' duty of cooperetton herein or to TU Deetric in connection with the Penoing Litigation, the Pending Houston Suit, the Pend'ng Somervell f
County Suit or any current or future proceedirigs or matter before the PUC (except that nothing herein shall be construed to prohibit said a ttorneys and consultants from 4
representing &azos in cortnoction with proceedings in whleh TU Deetric's rates are being J
determined provided that no opposition, or assistance to any third party opposition, to Comanche Peak rotated costs is medel oc the NRC. involving or relating to Comanche
~ _ _.
_ Peak, or any current or future proceedings (ercopt that nothing herein shall be eonstrued to prohibit said attorneys and consultants from representing Brazos in connection with proceedings in which TU Doctric's rates are being determined provided thet ro opposition, or assistance to any third party opposition, ta Comanche Poe.k ratated costs is made) l 5efwe any court oc before any administrative agency oc body or in any other forum l
1 b
-3 9-
,b.
whatsoever with terject to, or in any manner involving, concerning, arising out of, or relating to:(i) the acts or omissions of TU F!ectric or the Project Manager referred to or in question in the Pending Latigation or which could have been brought into question in the l
pending Litigation; or (ii) the acts or omissions of TU Electric or the Project Manager
,ith respect to Comanche Peak that occur, in whole or in pat
- prior to the Date of Commercial Operation (as said term is defined in the,;oint Ownership Age tement). The covenant set forth in the prior sentence shall Survive Closing hereunder ard remain in l
force until the expirat.cn of any Subject Claim covered thereby.
9.)
TU Elcetric Release. Upon the Closing, TU Electrie, for itself ar.d on behalf I
3f its parent, TUC, and their subsidiaries and affiliates and on behalf of any person or i
entity, private or governmental, claiming by, through or under TU Electric or TUC, including without limitation, to the extent it has the standi9g and right under law to do so, I
their customers, and on behalf of their respective insurers, agents, servants, employees, officers, directors, consultants, attorneys and representatives shall w aiv e,
- release, discharge, renounce and relinquish any and all Subject Claims relating to Comanche Peak (including separately the S(ation Fuel or Transenission Facilities) it has or they have, or may have, whether known or ur.kno wn, contirigent or absolu t e, including, withou t l
1;mitation, those based on common law, whether contract (express or imphed, including l
e xpr e ss or implied w arr a n ty) or tort (including, without umitation, intentional tort, I
negbgence or gross negLgence, sole, Jcint or concurrent) or strict liability or fraud, and those based on any Federal, State oc local statute, law, order or regulation, including, without bmitation, the Atomic Energy Act of 1954, as amended, the regulations of the NRC, the Securities Act of 1933, se amended, or the Securities Act of 1934, as amended, and any rule or regulation unde either, the Texas Securities Act (T1tle 19, Articles 581-1, et seq., V.A.T.S.) and the Texas Deceptive '.Tade Practices and Consumer Protection Act, i
against Brazos, its Members and customees (including the customers of larazos' Members l
and other wholesale customers) in any capacity, whethat individually or otherwise, and its and their respective insurers, agents, servants, employees, offleers, directors, consultants, 40 g
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l negbgence, sole, ; int or concurrent, of T L Electrie or the Project Manager; and (sis the
)
,eu or omissions of TU Electric or the Project Manager with respect to Comanche Pesk i
j that occur, in whole or in part, prior to the Date of Commercial Operation (as said term is gned.n the Joitit Ownership Agreement), including without limitation Subject Claims
{
3,g.d upc.n the neghgence or grou negbgence, sole, joint or concurrent, of TU Electrie or the Project Manager. Pursuant hereto, at the Closing Brazos will execute and dehver to I
I g Electric the form of Indemnity Agreement attached hereto as Exhibit O.
9.ti Covenant of Cooperation. The parties hereby covenant and agree to assist, cocoerste with, and support each other (other than financial support) in the event that s third party institutes any acticci against entner of them with respect to Comanchi Peak
.... ~ ~...
and any incident or attribute thereof, except that neither of them shall be required to take any position which it bebeves is contrary to its material pecuniary interests or t
I con trar) to the truth; provided, however, that in any evei't, Brazos shall not cocperate aith or support any party in the Pending Litigation with regard to the Subject Claims 1
3eing made therein by Tex La and TMP A.
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9.7 Terminatten of Participation. To the extent that frazos can, and not be in violation of Section 210 of the Energy Reorganization Act, 42 USC Section $851 (1983),
.i upon the execution of this Agreement, Brazos, for itself and on behalf of any person or entity, private or governmental, claiming by, through or under Brazos, including without bmitation, to the extent it has the standing and right under law to do so, its Members and eustomers (including the customers of Brazos' Members and other wholesale customers) 1 and its or thatt r espectiv e insurers, agents, servants, employees, officers, directors, consultants, attorneys and representa*.ives, agrees and covenants to immediately abate f
any and all currently pending actior s whatsoever, directly or indirectly, involving or relating to the prosecution or processing of any Subject Claims in any wsy relating to Comanche Pesk against TU Electric or TUC, oc their respective directors, officers.
employees, agents, insurers, consultants oe attorneys, past or present, and any and all of their respective successors, subsidiaries and affiliates and their respective insurers, l
-4 6 -
,,,,,,,,ervonn, empiosees. of f'cers. cirectors. snarehcieers. consuiianis, attorney ind gentatives past and present, presently or hereaf ter pending in any court or before
,ny 4dministrative agency or body (encept Subject Clasms being made m the Pending
. g,g,ition, wnsen shall be governed by the provisions of Article IV of this Agreemet
'l In gn capacity.tnd to the extent Brazos can and not be in violation of Section 210 on the pergy Reorganization Act, 42 USC Section 5851 (1983) (Brazos hereby representing and 1
rsnting that it knows of no violation, actual or elleged, of Section 2:0 of the Energy georganitetion Act 42 USC Section L851 (1983) which has not heretofore been dist:losed to rt Electric in writing), Brazos agrees and covenants that Brazos for itself and on i
3,neir of any person or entity, private or governmental, cluming by, through or under Drstos, including without limitation, to the extent it has the standing and right under law tJ do so, sts \\1 embers and customers (including the customers of Drazos' \\1 embers and I
other.holesale customers) and its or their respective insurers, agents, servants, e.nployees, officers, directors, consultants, sttorneys and representatives, s*ta ll ncI pro >ecute, directly or indirectly, any Subject Claims, objections, motions or other actions ejverse to TU Electric in connection with appbeations for granting the requisite beenses snd approvals for Comanche Peak pending before the NRC enf
.ie Safety and
......... ~ _
Leensing Boards and Atomic Safety and Licensing Appeal Boards, including, without
)
ti iita tion, in TRC~D6cTeIs~,_Nos. 50-4 4 5-OL, 50-44 6-OL and 50-4 4 5 -CP A, the ongoing
- - -. ~
l vititrust review relative to the Ucensing of Comanche Peak, and any and au appeals from rulings and orders of the NRC related to, or growing out of, said Dockets which are pending before any court. Within three (3) Business Days af ter the Closang, Brazos shall l
esuse the dismissal, r ith prejudica to the refiling of same in any forum and in any form 1
-he' soever, of all of its Subject Claims against TU Electrie, TUC and their subsidiaries J
aid affauttes in the Pending Litigation, and st.all withdraw all of its Subject Claims advefse to TU Electric in connection with the granting of the requisite Ucenses and EPprovals for Comanche Faak pendirq in the NRC Dockets Noa. 5 0-4 4 5 -01, 50 -4 4 6 -O L I
4^d 50-445.CPA and any and all proceedings in any mannne related toi or arising out of said Dockets.
-4 7 -
V Brazos agrees and covenants, from and af ter the Closing, to fully cooperate =sth
~
te Electric and provide all rer.sonably requested assistance,Jncluding providing the legal mi>tance of its attorneys (including Joseph Rober t Riley, Spiegel & \\teDiarmed and l
Me Purnell Rain llarrell), in a timely manner in connection with any legal proceedings 1
(escluding the Pending Litigation) myolving Comanche Peax, including the licensing of Comanche Peak by the NRC, heluding without limitation the ongoing antitrust review in e
connection ther ewith, and all proceedings involving Comanche Peak before the PUC to the extent of not opposing, or assis'ing any third party in opposing, the position being advocated by TU Electrie. Escept as vecifically provided otherwise in this Agreement, it; Electric shall promptly reimburse Brazos for any and all reasonable out-of-pocket expenses and any and all reasonable outside professional fees, including, without lunitation, attorneys fees, incurrej by Brazos in providing such cooperatien.
9.8 TU Electric Actions and Litigation Costs. Within three (3) Business Days after the Closing, TU Electric shall cause the dismissal, with prejudice to the refibng of same in any forum and in any form whatsoever, of allof its SLbject Claims against 3razos
{
in the Pending Litigatien; provided, however, that TU Electric shall have the right to retain Brazos as a party to the Pending Dallas Suit, not for the purpose of seeking any effirmative rebel against or from Brazos, but for the purpose of defeating a possible contention on the part of the other parties thereto with respect to the absence of a I
necessary party to TU ElectricN Subject Ctalms against the other parti *s in said case (it being understood that TU Electric's position is that any such contention would not be v a bd). TU '3ectrie shall promptly reimburse Drazos for any and all expenses reasonably incurred because of any such retention of Brazos by TU Electric in the Pending Dallas Suit. It is expressly understood that nothing herein shallin any manner affect, diminish or impair TU Electric's right to fully prosecute any and all of its Subject Claims against the other parties in the Pending (Jtigation. Except as provided otherwise above, all costs and expenses related to or incurred in connectiort with the P=nding Litigation shall be bot ne l
and paid by the party by wham incurred or to wh'ch they are related.
j,
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[p.m'o, UNITED STATES NUCLEAR REGULATORY COMMISSION y
a
. n s>.nvo T o84. o. c. n ees 3,
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April 27, 1989 IDENTICAL LETTER SENT TO ATTACHED Docket No.
LIST AND DOCKET N0s.
l i
ADDRES3CE list attached
==Dear
,==
SUtJECT:
NOTIFICATION OF THE NRC OF EMPLOYEES' POTENTIAL SAFETY ISSUES The purpose of this letter is to reer:phasize to licensees their responsibilities to assure that they, and their contractors and subcontractors permit their employees to contact, without restrictions, the NRC with concerns about In particular, this letter notifies licensees that =
potential safety issues.
it is not acceptable to include in settlement agreements for discrimination matters arising under Section 210 of the Energy Reorganization Act of 1974, at amended, or in any labor agreements or other agreement affecting coepensation terms, conditions and privileges of esplopent, any restrictions on esployees or forraer empicyees providing inforr.ation to any nembers of the NRC including
+
the staff, inspectors, investigators, Administrative Law Judges Boards, or the Cocmission.
l Infomation Notice B4-08 (February 14,1984) reminded licensees that the f
public health and safety requires that eeployees be free to raise safety issues to licenset management and to the hAC.
Failure to pemit employees to do so violates 10 CFR 30.7,10 CFR 40.7,10 CFR S0.7,10 CFR 70.7 and 10 CFR 72.10 regarding " Employee Protection' and may subject licensees to l
significant enforeccent action by the NRC.
In addition te NRC action, employees who have been discriminated against for raising safety issues have the right to file complaints with the Department of Labor pursuant to Section 210 of the Energy Reorganization Act of 1974, as i
amended, for the purpose of remedying the hans caused by the discrimination.
Following the filing of a ccmplaint, the Department of Labor perfoms an investigation. If either the esployee or the eeployer is not satisfied with the outcome of the investigation a hearing can be held before an Administrative Law Judge with review by the Secretary of Labor.
j j
In many cases the employee and the employer reach settlement of the issues raised in the DOL proceeding before ccepletion of the fonnal process and a finding by the Secretary of Labor. NRC supports settlements as they provide remedies to employees without the need for litigation.
Settlement agreements in Section 210 proceedings are matters within the jurisdiction of the Department of Labor. Licensees and their contractors must not include clauses in these settlements which in any way r,estrict the ability of employees to provide allmusumunusuummunes mummusumanunumusur um
~ [n d o3v% (h
4
-2*
April 27, 1989 Examples of restrictive information atout potential safety issues to NRC.
clauses include but are not limited to prchibiting or in any way limiting an employee, or au attorney for such employee, from coming to and providing safet inforsation to an NRC staff member.
i Licensees should examine their current and previous agreecents to assure that If restrictive clauses are found, restrictive clauses are not present.
licensees should promptly inform the employee or former employee that the restriction should be disregarded, that he or she may freely come to NRC at any time without fear of any form of retribution, and that such a restriction will not be enforced.
31, 1989 if any such restrictive clauses Please notify us no later than JulyYour rssponse should be provided to your licensin have been identified.
contact in headquarters.
This request for inforr.ation was approved by the Office of Management and 4
Budget under clearance number 3150-001.1 which expire' December 31, 1989.
Comnents on burden and duplication may be directed t the Office of Managentnt and Budget, Reports Management Room 3208, New Executive Office Building, Washington, D.C.
20503.
Questions concerning this letter should be directed to the Director of the Office of Enforcement.
Sincerely, 4
Y ctor S 11, Jr.
Executive Ofrector for Operations 9,
s'
,.. ~ -
e
U S DEPARTMENT OF LABOR SICHETARY or LA0oR WASHif4GiorJ,O C, DATE:
July 18, 1989 CASE 110, 87-ERA-38 Ill THE MATTER OF l
LORE!120 MARIO POLIZZI, COMPLAll1AllT,
V.
GIBBS & IIILL, I ll C.,
P.ES PO!1 delit.
BEPORE:
THE SECRETARY OF LABOR ORDER REJECTI!1G Ill PART AllD APPROVIliG Ill PART SETTLEMEllT SUBMITTED BY THE PARTIES A11D DISMISSIllG CASE the Administrative Law Judge (AL7) in this On July 13, 1988, case arising under the employee protection provision of the as amended (EPA), 42 U.S.C.
Energy Reorganization Act of 3974, issued a Recommended Decision and Order (R.D. and 5 5 8 d.;1 (1982),
dismissing this matter with prejudice on the grounds that the 0.)
l The parties had parties had resolved the issues between them.
made a joint motion to the ALT requesting the entry of an order of dismissal on the grounds that the parties had entered into a l
I settlement agreement.
The record submitted to the Secretary with the AL7's R.D.
I include a copy of the settlement agreement.
and O.
did not the Secretary issued an Grder to Accordingly, en October 3,
- 1988, Submit Settlement Agreement ordering the parties to submit a copy MM M M l
L fwc,lofd rG 7
~
t
4 2
On of the settlement agreement for review by the Secretary.
the parties subnitted a copy of the settlement i
November 3,
- 1988, 4
4 agreement to the Secretary.
The ERA requires the Secretary to issue an order resolving is terminated by the case "unless the proceeding on the conplaint the Secretary on the basis of a settlement entered into by the 4
alleged to have committed such violation secretary and the perso.
42 U.S.C.
5 5851(b) (2) ( A).
The Secretary has held a in ERA cases that the case cannot be dismissed on number of times "unless the Secretary finds that the the basis of a settlement Fuchko and j'gphpr settlement is fair, adequate and reasonable."
]
Georcia Power Co., Case Nos. 89-ERA-9, 10, Secretary's Order v.
issued March 23, 1989, at 2, and to Suomit Settlement Agreement the Secretary hcid that "it is cases cited therein.
Furthermore, i
to dismiss a case without reviewing the error for the ALJ settlement and making a recommendation of whether the settlement l
is fair, adequate and reasorable."
Id. at 1-2.
I forum for l
The Department of Labor does not simply provide a F
discrima-private patties to litigate their private employment tion suits. I' Protected whistlebloving under the ERA may expose i
I note that in ordi?.ary lawsuits brought by one private party 1/
against another private party, where the rights of othe persons" settlemen i
will not be affected, hands of the parties."
United States v. city of Miami, 614 F.2d 1322, 1330 (5th Cir. 1980), aff'd in part and reverggd in part on 664 F.2d 435 (1981).
Thus, under Fed.
R.
Civ.
rehearina en banc, P. 41(a) (1) (ii), a -fipulation signed.by all parties who have appeared in the coute action is effective automatically, without Gardiner v. A.H. Robins.Co., Inct, 747 judicial involvement.
The trial court judge must F.2d 1180, 1189 (8th Cir. 1984).
"' stand () indifferent,'" and not interfere with the parties' 6,
,..~
-... _ - ~
3 but health and safety hazards to the l
not just private harms, in keeping The Secretary represents the public interest public.
information open by assuring that settlements channels of Cf2, Vircinia Electt.ic and adequately protect %histleblowers.
d (Federal Energy Regulatory Commission 19 FERC $ 61,333 power CO2, regardless of whether it 1982) ("[B)efore approving a settlement, the is contested or enjoyu the unanimous support of the parties, Commission is obliged to make an independent determination that is just and rearonable and in the public the settlement interest.")
The settlement agreement in this case has been carefully I find it fair, With tha exception of two provisions, reviewed.
adequate and reasonable.
of the Settlement Agreement provides:
Paragraph 7 Polizzi agrees that he will not voluntarily cooperate with or testify on behalf of any entity or individual who has or may file charges of discrimination or wrongful Hill or employment practiccs against Gibbs &
SVGCO, or their respective parents, affiliates, subsidiaries, successors or assigns, under the Energy Reorganization Act, the Atomic Energy Act of 1954 as amended, or any other federal or state law, rule, regulation or theory, nor will he voluntarily testify in or otherwise participate in any proceeding or invritigatica involving the Comanche Peak Steam Electric Station, before any state or federal court or administrative including, but not limited to,
- agency, footnote 1 (cont'd)
" unconditional right" to a dismissal by stipulation.
Id. at 1189-1190 (citation omitted).
9ec also Janus Films. Inc. v.
Miller, 801 F.2d 578, 582, 585 (2d Cir. 1986) ; City of Miami, 614.
F.2d at 1332.
f f
r
~-
-,--m.,
m.
.. - -,,, -,. ~. - - - -.. -,, <
4 licensing or safety proceedings or investigations before the Nuclear Regulatory Commission and/or regulatory or rate proceedings or investigations before the 1
Public Utility Commission of the State of except as required by lawful subpoens;
- Texas, that nothing in the provided, however, foregoing paragraph shall in any manner be interpreted to pr'3 vent Polizzi from informing the Nuclear Regulatory commission of any and all safety concerns he may have relating to the Comache Peak Steam Electric Station.
among other things, This provision prohibits complainant, f rom providing information to, or assisting or cooperating with, of Labor in invest! yations of conplaints against thelDepartment the Texas Utilities Generating Company, or any Respondent, related company under the ERA or any other environmental 29 C.F.R. 5 24.1 (1988).
whistleblower protection statute.
frcm providing Paragraph 7 also would prohibit Complainant assisting or cooparating with the Department of information o:
investigation Labor or any other federal or state agency in the or prosecution of any charge of discr2mination or wrongful in violatis a of any f ederal or state law, employment practicos, rule, or regulation.
This could include, for example, the Fair the Occupational Safety and Health Act, Labor Standards Act, Section 503 of the Rehabilitation Act Executive Order No. 22,246, This and Title VII of the Civil Rights Act of 1964.
of 1973, provision also prohibits complainant from voluntarily testifying or otherwise participating in any proceeding or investigation including involving the Comanche Peak Steam Electric Station, Nuclear Regulatory Commission licensing or safety proceedings or a
i a
l
S and state regulatory or rate proceedings or investigations, This prohibition could include investigation or investigations.
enforcement proceedings by the United States Environmental The only exception to these restrictions Protection Agency.
would be where Complainant is under lawful subpoena.
Complainant's counsel provided the On May 4,
- 1989, Department's Office of Administrative Appeals a copy cf a letter 1989, by which to him from Respondent's counsel dated May 3,
" waives now and forever any rights it maf have to Respondent imposed upon enforce any restrictions that may be construed to be under paragraph 7 of the settlement agree-(Complainant) f Complainant) may f reely go to t'ac Nuclear cent fear of any form of Regulatory Commission at any time without i
retribution from (Respondent]."
Although the first sentence of in its entirety, the this letter appears to nullify paragraph 7 second sentence could be interpreted as limiting Respondent's waive. to the restriction on Complainant?s right to go to the as well I have fully reviewed paragraph 7, NRC.
For that reason, as all other provisions of the settlement.
Paragraph 7 of the Settlement Agreement significantly as well as other restricts access by the Department of Labor, to information Complainant may be able to provide
- agencies, of the ERA and relevant to the administration and enforcement many ot!er laws.
Its effect, to a large degree, would be to " dry up" channels of communication which are essential for government NLRB v. Scrivener, agencies to carry out their responsibilities.
i f
~
~-
s
6 405 U.S. 117, 122 (1972).
As such, I find it against public policy. U In _EOC v. Cosnair, I,n21, 821 F.2d 1085 (5th Cir. 1987), the E
court held that waiver of the right to file a charge with EEOC a
was void as against public policy.
The court distinguished between waiver of the right to file a charge and waiver of the The court right to recover personally on a cause of action.
1 explained:
Allowing the filing of charges to be obstructed by enforcing a waiver of the right to file a charge could impede EEOC enforce-A ment of the civil rights laws.
charge not only informs the EEOC of discrimi-nation against the employee who files the but also may identify other charge unlawful company actions.
When the EEOC acts on this information, "albeit at the behest of and for the benefit of specific individuals, it also acts to vindicate the public interest in preventing employment discrimination."
We hold that an employer and an t
employee cannot agree to deny to EEOC the information it needs to advance the public interest.
I 821 F.2d at 1090 (citations omitted.)
Following the Supreme U
A settlement is a contract, and its construction and law.
United enforcement are governed by principles of contract I
States v.
ITT Continential Bakino Co.,
420 U.S.
223, 238 (1975);
Schwartz v. Florida Bd. of Recents, 807 F.2d 901, 905 (lith Cir.
1987); Orr v. Brown & Root, Inc., Case No. 85-ERA-6, Secretary's Decision and Order issued October 2, 1985, at 2.
The doctrine that a pror.ise or term of an agreement is unenforceable if against public policy encompasses more than illegality; it includes promises which are injurious to the public interest.
Shadis v. Beal, 685 F.2d 824, 833, n.15 (3d Cir. 1982), cert.
l denied 459 U.S. 970 (1982).
" Contracts contrary to public i
I policy, that is those which tend to be injurious to the public or even though actual against the public good, are illegal and void, injury does not result therefrom."
17 C.J.S.
Contracts 5 211, I
- p. 1013 (1963).
I i
I l.
l n
i
\\
a 7
Court's guidelines that "(a) promise is unenforceable if the
+
is outweighed by a public policy interest in its enforcement 4
Town of_pewten v.
harmed by enforenment of the agreement,"
Rumery, 480 U.S. 386, 392 (1987), the court in EEOC v.
- Cosmair, Inc., held that a " waiver of a right to file a charge is void as
~
821 F.2d at 1090.
The restriction on against public policy."
access by government agencies to Complainant's information here find if anything, greatcr than in EEOC v.Cosmair Inc., and I is, that it is unenforceable as against public policy.
In addition, the settlement appears to encompass the only one of settlement of matters arising under various laws, As stated in Poulos v. Ambassador Feel Oil which is the ERA.
)
Co.,
Inc._, Case No. 86-CAA-1, Secretary's Order, issued l
November 2, 198', slip op. at 2:
(The Secretary's] authority over settlement agreements is limited to such statutes as are within (the Secretary's] jurisdiction and is l
defined by the applicable statutes.
See Aurich v. Consolidated Edison Company of New i
l Yark, I n c._, Caca No. CAA-2, Secretary's Order l
Approving Settlerent, issued July 29, 1987, i
Chase v.
Buncombe County, N.C., Case No. 85-SWD-4, Secretary's Decision and Order on Romand, issued November 3, 1986.
I have, therefore, limited my review of the agreement to determining 2 ' her the terms thereof are a fair, adequate and 5
reasonable settlement of Complainant's allegation that Respondent violated the ERA.
Although I have found that one provision of the Settlement I
Agreement, paragraph 7, is unenforceable as against public e
1
-m_.
,y,,_
-r..-
m
8 policy, the remainder of the agreement may be enforceable when is unenforceable is not an
" performance as to which the agreement EEOC v.
Cosmair. Inc.,
essential part of the agreed exchange."
821 F.2d at 1091 (quoting the Restatement (Second) of Contracts, 5 184(1) (1981). )
See also Nichols v. Anderson, 837 T.2d 1372,
("(I]f less than all of a contract violates 1375 (5th Cir. 1988) public policy, the rest of the contract may be enforced unless the unenforceabic term is an essential part of the contract.")
839 F.2d 664 in McCall v. United States Postal Sarvice,
- Thus, an employee had settled an action challenging (Fed. Ci r.
1988),
his removal by agreeing that, upon reinstatement for a one year he would not appeal any disciplinary action probationary period, taken against him and also waived his right to file a charge with The court held that "even if (the employce's] attempted EEOC.
waiver of his right to file EEOC charges is void, that would not affect the validity of other portions of the agreement."
839 l
F.2d 664, 666 at *.
of the Settlement Here, the provisions of paragraph 7 Agreement appear to be collateral to the central dispute which l
l the agreement purported to settle, alleged reta11ation by Respondent against Complai.nt for protected activities, in l
I have attached primary significance in l
violation of the ERA.
reaching this conclusion to the fact that Respondent has expressly waived any right to enforce the restrictions in paragraph 7.
In addition, most, if not all, of the restrictions e
9 l
9 placed on complainant by paragraph 7 would apply in matters only renotely related, if at all, to their dispute under the ERA.
I also note that paragraph 2 of the agreement could be I
construed as a waiver by Complainant of any causes of action he As th'c Secretary has helu in future.
ray have which arise in the prior cases, see Johnson v. Transco Products, Inc., Case No. 85-8, Secretary's Order Approving Settlement issued August ERA-7, 1985, such a provision must be interpreted as limited to the in the future on claims or causes of action arising j
right to sue out of facts or any set of f acts occurring before the date of the agreenent.
See also Alexander v. Gardner-Denver Co._,
415 U.S.
36, 51-52 (1974); Pocers v. Ceneral Electric Co.,
781 F.2d 452, l
454 (5th Cir. 1986).
With the exception of paragraph 7, and with the limitaticns find the terms of the agreement within the discussed above, I scope of my authority under the ERA to be fair, adequate and reasonable, and to that extent I approve it.
Accordingly, the complaint in this case is DISMISSED.
SO ORDERED.
4
{(9$$4AE o
Secreta of Labor 4
Washington, D. C.
4 s
t l
l STATEMENT SUS.lITTED BY THE UNITED STATES NUCLEAR REGULATORY COMMISS Ot' i
l TO THE SUSCCMMITTEE ON f.UCLEAR REGULATION CCMMITTEE ON ENVIRONMENT Af1D PUBLIC WCRKS UNITED STATES cflATE CCt<CERNING (1) AGREEPENTS RESTRICTittG INFORMATION i
(
FLOW TO THE !GC AND 1l ti (2) RANCHO SEC0
'4UCLEAr CCt Er,AT:tiG STATION FOR THE "UCLEAR REGULATORY CC:'ti!5510N FRESEt1TED BY LANDO W. ZECH, JR.
CHAIRMAN SUBillTTED: MAY 4, 1989 EN N m
&c)050 rt y
~
i Mr. Chairman and members of the Subcommittee, the Commission is pleased to j
As you are aware, Commissioner Carr is unable to be nere l
appear before you.
We are here to discuss legal and policy implications of settlement today.
agreements affect 1r.g the ability of persons to testify before the Nuclear We shall also address the recent restart of the Rancho Regulatory Commission.
f Seco plant.
1 f
With regard to the matter of settlement agreements, we would like to turn directly to the two specific issues the Subcommittee asked the -Cons.1ssion to The first is whether current law permitt NRC licenseos, license f
address.
applicants, or centractors thereof to enter into agreements with employ-des o former employees whereby, in exchange f or financial consideration, the er.plo upon his or her ability to testify or or former employee agrees to restriction j
The second issue is l
participate in proceedings under the Atomic Energy Act.
l licy.
whether such agreenents, even if they are legal, are gccd pub ic po With regard to settlement agreements, the Commissien wishes to empnas1:e trat l
t o' it strongly supports the widely-accepted general policy favcring sett ecen Settlement disputes by the affectec parties in adjudicatory proceedings.
agreements that minimize or avoid the need for expensive and tine-consunr.g I
For litigation are in the interest of all parties ard, therefore, desirable.
l In fact, NRC this reason, such agreements are r.ormally to be encouraged.
T f
t 1
.,,,_,_,,___,_..-y..
m
.- w m-,,.,.,,-_,,,,,.w o......w
j 2
'r i
See i
regulations encourage fair and reascnable settlements of contested issues.
However, to provide some as:urance J
10 CFR l 2.759; see also 10 CFR 5 2.203.
that settlement agreements will meet NRC standards, all settlennts of issues i
This was raised in NRC proceedings must be approved by the presiding officer.
done in a stipulation agreement agreed to by Texas Utilities Electric Company, Citizens Association for Scund Energy (CASE), and tt'e NRC staff in interv eno-which these parties asked the presioing licensirg boatd to cismiss the Comanche Peak opercting license proceeding. That agreement specifically provided that parties cculd bring any safety issue to the NRC.
l Nevertheless, not all agreements af fecting the ability of an individual to 1
provide saf ety information to the f;RC would necessarily come before the !;RC fo
~
i The settlement agreement between Joseph Macktal ard crown review anc approval.
& Rect is, of ccurse, an example.
This ccnfidential ageeement was intenced te j
Since Mr.
settie a Section 210 proceeding before the Department of Labor.
l' in an NRC proceeding, his t'acktal was not a party te or otherwise a participant Departrent of cettlement agreement in the Section 210 proceeding before the Thers was, Labor proceedings did not come to the NRC for its review.
j therefore, no opportunity for the NRC to ensure that l1r. Macktal uncerstcod that he could come directly to the NRC staff or the Comissicn itselt with any I
safety concern.
I It should be noted, however, that the NRC has taken actions over approximately the last nine months to address the question cf Mr. Macktal's additicnal safety j
In late September 1988, in spite of his numerous contacts with the issues.
NRC, we received information indicating that Mr. Macktal-had not provided NRC i
?
. -. - - +
+ -. -
3 inf ormation came in the f orm of an That with all his safety concerns.
affidavit by Mr. Macktal attachea to a pleading filed by Citizens for Fair To the extent itr. Macktal's affidavit provided enough Utility Regulation.
specificity, the technical staff began reviewing his allegations to determine On Decerber l
if additional staff work was needed to address the allegations.
the Commission issued CLI-88-12, which clearly inaicated that the NRC 21, 1988, did not view the settlement as prohibiting Mr. Macktal's raising saf j Although Mr. Macktal's attorneys were aware of this concerns with NRC.
.I decision, and in fact have filed pleadings adcressing that decision, Mr.
Macktal cid not bring his concerns tr the NRC after the Commission gave its Af ter attempts to contact Mr. Macktal view that he was permitted tu co so.
directly and through his attorneys, late last week the NRC staff was able to i
Although he indicated that he did have safety concarns, he reach Mr. Macktal.
declined to provide the NRC with them at this time, but instead referred the The NRC is currently working with Mr. Macktal's staff to his attorricys.
attorneys in an attempt to finc out what, if any, addit'. anal safety concerrs he nas.
ag its access to Obviousiy, the Ccn. mission is concerned with pre information bear 479 on its safety responsibilities, anc we have initiated actions to assure that settlement agreements do r.ot impermissibly burcen the i
Comm;ssion's access to infor ation or a person's ability to communicate with respresentatives af the Commission.
The staff has issu;d a generic letter to chief executive of ficers of the major a
/
licensees of the Commission and their principal contractors on the subject c,
m___._____.
4 (copy attached as Enclosure).
Among other things, this letter requests licensees to examine current and previous rettlement agreements with employees, and contact those employees as apprcpriate to ensure the employee l
or former employee understands that he or she may freely core to the knC at acy time without fear of any form of retribution.
In appropriate situations the staff will contact the individual involved to determine whether he or she has any unresolved safety cencerns.
Additionally, we are considering changes in our regulations to specifically recuire that such settlement agreements ra.
ovide an opportunity to the settling parties to bring safety issues *: ectly to the attention of the e
The Commis5icn is writing to the Secretaty of Labor on this C or.mi s s ion.
issue anc we are attempting to determine if there are other settlement agreements under Secticn 210 of the Atomic Ener,y Act with potentially The Decartment of Labor is, of ccurse, resccnsible unacceptable conditions.
- or the acministration o# the employee protection provisions of the Act anc possessc! the citimate authority to approse settlements in cases brcught before it.
To remove any possible uncertainty about the agency's position, let r.e state emphatically that an agreement whereby _ any person--not Jeit an employee or former employee with pending claims under Section 210 o# the Energy Reorganization Act, but any person--contracts to withheid saf ety-significart information. from the Nuclear Regulatory Commission is not acceptable.
The Macktal settlement agreement did not appear to go this far, for on its f ace-it did not preclude Mr. Macktal from bringing his safety concerns to the
l 5
Mr. fiacktal did agree, however, not to appear attention of the NRC.
li Comanche voluntarily as a witness or a party in licensing proceedings invo v ng In an 'nstance Peak and to take reasonable steps to resist compulsory process.
such as this, we at the Commission need to ensure that an individual who has entered into a settlement agreement always has an opportunity to bring safety We think that the revised concerns to the attention of the Commission.
procedures that we are considering will address this concern.
l The Commission believes that such agreements must provide an opportunity to t J
settling parties to bring health ond safety concerns directly to the attentien of the Commission in order to be consistent with the policies underlying the The question of whether Atcmic Energy Act cnd the Energy Reorgari:ation Act.
such agreements are actual violations of law depends largely on the specific circumstances surrcunding the agreements.
- t is difficult, however, to talk entirely in the abstract about agreements I
restrictirg participation in NRC proceedings, because a variety of agreements Not cli of these are necessarily that meet that description can be imagined.
For example, an agree-ent to settle litigation before the l
objectionable.
agency might reasonably involve a coniaitment by a party not to attempt If the facts have been exhaustively reopening the supposedly settleo issue.
explored and the settlement is based on actions that adequately address the safety concerns, such an agreer.ent could be no nore than a lawyer's normal l
precaution, not prejudicial to the Commission's authority under the Atotaic l
however, a paid-for confidential ccmmitment Energy Act. At the other extrems, i
e 9
-. ~
6 4
by an individual not to raise safety concerns with the NRC in any fashion i I
intolerable.
Whether or not restrictive agreements violate a statute or regulation on their face, a compelling case can be made that such agreements must provide e opportunity to the settling parties to bring safety issues directl; to th' For example, judicial decisions hold that a 4
attention of the Commission.
person may not waive rights to bring employment discrimination charges EE0C v. Comsair, Inc., 821 F.
the Equal Employment Opportunity Commission.
Ccro., 671 F. Supp. 351 (W.D.
2d 1C85 (5th Cir. 1987); EE0C v. U.S. Steel Pa. 1987).
Precisely how t ese matters might bear on the legality of the Macktal agreement and which way any balance of public interest versus private convenierce might l
tip are matters which I underrtand are presently before the Department of As I noted earlier, the in Macktal v. Brown & Root [ Case No. 86-ERA-23),
Department of Labor is the responsible decider of iciaims under Section 210 In pleadings filed in that proceeding i understard *.ha; a tettlements thereof.
the agreerent and rumber of 1ssues have been raised concerning the purpose of 4
These factual considerations go well how it was perceived by the parties.
beyond an analysis which would focus solely on the question cf the lega the worus of the agreement itself.
In view of the questions which are now before the Department of Labor in Section 210 proceedings, I Jo not believe that tne Commission should express a view on how the case should be deciced.
For this reason, in its order of April 20, 1989, the Commission went no fcrther than withdrawing its remarks made in a previous order about the acceptability i
9,,'
7
[In the Matter of Texas utilities Electric Co.,
of the Macktal agreement.
~
Finally, as I have said, the agency is now actively reviewing our directives The objective of this this area and will make changes in them if necessary.
effort is to leave no uncertainty that parties to settlement agreements understand that they have the opportunity to provide information directly to the Commission.
4 1 can assure you, and any percor,s who may be contemplating such agreements, that the Commission will give clo3e attertion to these arrangeEEnts.
I An now, with your permissicn, we would like to discuss the operations of the Rancho Seco Nuclear Generating Station.
.I Concerns about Rancho Seco/SMUD you expresseo your concern over the actions of Mr. Chairman, on April 12, 1989 f Nuclear the.NRC in response to the April 4, 1969 letter frcm the Institute o ir Generating Power (INPO) regarding the operation of tne Rancho Seco Nucit First, let me explain the background of the events before and Station.
subsequent to that letter.
The Executive Director for Operations (ED0) and I first were raade aware of INP0's concerns about the actions of the Sacramento Municipal Utility Distric I notified my fellow Commissioners (SMUD) Board of Directors on April 3, 1969.
9
CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing was served upon the following parties by U.S.
Mail, first class, being placed in the LeDroit Park Post Office Annex on November 17, 1992:
Secretary, U.S. Nucelar Regulatory Commission e,,
Washington, D.C.
20555 8 ~'
s$
1;:
Hon. James H.
Carpenter g.j _
g cp Atomic Safety and Licensing Bou _
h-.
p p..
Nucelar Regulatory Commission
[
c~'
v3 ry.:
Washington, D.C.
20555
":- }
rc y
2r
%J Hon. Morton B.
Margulies l ',
6 Chairman, Atomic Safety and Licensing Board
- =
Nucelar Regulatory Commission 2
Washington, D.C.
20555 i
Hon. Peter S.
Lam Atomic Safety and Licens ng Board Nucelar Regulatory Commission Washington, D.C.
20555 George Edgar, Esq.
Newman & Holt inger, P.C.
1615 L Street, N.W.,
Suite 1000 I
Washington, D.C.
20036 R.
Micky Dow f4onr e'il e Pk 5146 Janice E.
Moore, Esq.
Office of the Generrl Counsel U.S.
Nuclear Regulatory Commission Washington, D.C.
20555 Michael D.
Kohn e
9
-w.-
r g.
e n
-