ML20129K261
| ML20129K261 | |
| Person / Time | |
|---|---|
| Issue date: | 11/07/1996 |
| From: | Cordes J NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | |
| References | |
| SECY-96-230, SECY-96-230-R, NUDOCS 9611130494 | |
| Download: ML20129K261 (20) | |
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November 7, 1996 SECY-96-230 Fg:
The Commission From:
John F. Cordes, Jr.
Solicitor
Subject:
LITIGATION REPORT - 1996 - 8 unitad statae v. rnnstructinn Prnducte Raenarch, Civ. No. 3:94MC112 (AHN) (D. Conn.,
decided Oct. 11,1996)
This is a long-running subpoena enforcement suit against a supplier of cement to the nuclear industry. Earlier this year, we wor an important victory in the United States Court of Appeals for the Second Circuit that (a) found the NRC subpoena enforceable despite a claim that the NRC lacked jurisdiction over the cement supplier, and (b) rejected the cement supplier's claim that many of the subpoenaed documents fell within the attorney-client privilege. Saa 73 F.3d 464 (2d Cir.1996), dierouad in Litigation Report 1996-1, SECY 041. Very recently, the Supreme Court refused to review the Second Circuit's decision.
See Order List, October 15,1996 (denying certiorariin No. 95-2007) (copy attached).
Even so, the cement supplier has refused to comply fully with the NRC subpoena, and has continued to invoke the attorney-client privilege. Working closely with the Department of Justice, we moved for a contempt order and for a writ of assistance to enforce the court of appeals decision. The district court now has denied our motion and refused to reconsider its denial. The district court instead has ordered the government to seek in camern judicial review of the disputed documents. The court intends to undertake a document-by-document privilege review.
As we view the court's document-by-document approach as incompatible with the prior court of appeals decision rejecting the attorney-client privilege, we are consulting with the Department of Justice on whether (and when) to appeal.
CONTACT: Charles E. Mullins 415-1606 NOTE: TO BE MADE PUBLICLY AVAILABLE IN 5 WORKING DAYS FROM THE DATE OF THIS PAPER m>
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l The Commission 2
In ra Parfactinn Marvica Inc, No. 96-60311 (Bkrptcy Ct., N.D. Ohio, order issued Aug. 20, 1996)
As reported in Litigation Report 1996-6, SECY-96-155, this bankruptcy proceeding involves j
a bankrupt well-logging operation. In early July, we filed a pleading protesting against the i
bankruptcy trustee's planned abandonment of equipment belonging to the bankrupted company, because we were concerned that this could include sealed sources owned by the l
company. We then worked out an agreement with the court and the parties for the sale of the sealed ' sources to another business.
The settlemen't did not work out as planned, however, because two of the sealed sources proved to have a leak and because the site of the bankrupt's defunct business proved to contain some residual contamination. We then returned to the bankruptcy court, and after lengthy negotiations with the bankruptcy trustee and with the bankrupt's principal creditor, a local bank, we reached a fresh settlement agreement.
l The bankruptcy court embodied the new agreement in a court order. The agreement required, intar =H=, that the creditor bank and the owners of the real property where the j
bankrupt's business operated contribute money that would enable the trustee to dispose of the leaking sealed sources. The court order also provided that no property could be removed from the building without NRC approval. The NRC agreed to facilitate the removal of any leaking sealed sources. And an outside buyer agreed to purchase the remaining i
sources. This court order should wind up this unusual case.
CONTACT: Susan G. Fonner 415-1629 Naifalt v_.imekann, No. 96C-3081 (N.D. Ill., filed May 23,1996)
This lawsuit by an NRC employee alleges agency violations of the Americans with Disabilities Act and the Rehabilitation Act in conditions of employment. We are working L
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with the United States Attorney's office in defending the suit. A copy of the complaint is available from my office.
l CONTACT: J. Bradley Fewell 415-1569 ohn. Cordes Solicitor DISTRIBUTION:
Commissioners OGC OCAA OlG OPA t
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i ATTACHMENT 1 uniema s,me.. v. cnn.,n,ction Prador tm R eaarch, Civ. No. 3:94MC112 (AHN) (D. Conn" decided Oct. 11,1996) 1
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0GT-16-9614ED 12:50 JUSTICE DEPT CIV DIV FAX N0. 202 616 8460 P.02 m m:
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UNITED STATES DISTRICT COURT i
DISTRICT OF CCterECTICUT i
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UNITED STATES OF AMERICA QV t_r* ;
Civ. No. 3:94MC112 h )
V.
CONSTRUCTION PRODUCTS RESEARCH, INC., ET AL.
O I
C RULING ON PETITIONER'S MOTION IN)R RECONSIDERA2 ION c, -
Aun P;'TITronn2R'S NOTTON FOR MnTT OF ASSISTANCE 6-i Petitioner, the United States of America, moves Zor 4
reconsideration of the court's December 11, 1995 order denying its motion to hold the respondents, Construction Products Research, Inc. ("CPR"), Five Star Products ("IlliP") and E.'Nash Babcock (" Babcock"), in contempt for their failure to turn over certain documents.
Petitioner also applies for a writ of assistance to effect respondents' compliance with a judgment issued by the Second Circuit Court of Appeals in connection with the production of these documents.
j For the following reasons, Petitioner's Motion for Reconsideration [ doc. # 101] is GRANTED.
Upon reconsideration, the court's original rul.ing adopting the Magistrate's ruling is re-affirmed.
The Application for Writ of Assistance [ doc. # 103]
is DENIED.
IBCLT.
On January 2, 1996, the Second Circuit effirmed this court's enforcement of an administrative subpoena issued by the Nuclear Regulatory Commission (*NRC") to CPR, FSP and Rabcock, seeking 1
00T-16-96 WED 12:51 JUSTICE DEPT OlV DIV FAX N0. 202 616 8460 P.03 SD R BY:
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the production of employment records and employment related documents.
See United states v. Construction Products Romanvch_
Inc., 73 F.3d 4 64 (2d Cir.1996).
Prior to and subsequent to that ruling, the respondents have continually refused to turn over some of the requested documents because they claim that these are protected by the attorney-client privilege.
Among cther things, in affirming the enforcement of the subpoena, the Second Circuit stated that CPR, FSP and Babcock have failed to establish these claims of privilege.
Egg 73 F.3d at 473-474.
On January 26, 1996, in light of the Second Circuit's I
ruling, the government moved for reconsideration of this court's affirmation of Magistrate Judge Donna F. Martines's October 20, 1995 recommended ruling denying the government's motion for civil contempt and the respondents' motion for leave to file documents under seal for in c===rm inspection.
Sag un4&=A seme== wi Construction Producta Raamarch, Tn s".. Civ. No. 3:94MCll2 (D.
Conn. Dec. 11, 1995) (affirmation of recommended ruling by J.
Martinez).
On April 2, 1996, prior to a decision on its prior motion for reconsideration and after the respondents had continued to withhold allegedly privileged documents, the government applied, pursuant to Rule 70, Fed. R. Civ.
P.,
and the All Writs Act, 28 U.S.C. S 1651(a), for a writ of assistance to effect respondents' compliance with the second circuit's ruling.
In its application, the government requested that the court order the seizure of all unproduced documents covered by the 2
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.00T-16-9614ED 12:52 JUSTICE DEPT CIV DIV FAX N0. 202 616 8480 P 04 SLNr BY:
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202 616 8470;# 5/ 7 administrative subpoena.
(San Pet'r's Application Writ Assistance other Appropriate Relief Effect Compliance Second T
Circuit's Final J.
[ hereinafter " Pet r's Application Writ"] at 2.)
The governme:.! bases both its motion for reconsideration and its application for writ of assistance on the argument that the Second Circuit has already decided the privilege issue.
(Eng Pet'r's Hot. Recons. Dis t. Ct. Den. Pet'r's Not. Contempt at 4-5; Pet'r's Application Writ at 2.)
It claims that the respondents are precluded from further asserting attorney-client privilege because the Second Circuit held that no privilege existed.
(.I,sL.)
The respondents claim that the proper procedure to adopt is for the government to make a motion to compel production of the privileged documents.
(San Resp'ts' Opp. Mot. Recons. at 2. )
A court would then inspect each document in c== ara and determine if it was protected by the attorney-client privilege.
(IsL.)
This is the procedure recommended by Judge Martinez in her ruling on the government's motion for civil contempt.
Saa und tad statas: v.
Construction Prodticta Rasaarch. Inc.. Civ. No. 3 94MC112 at 4-5 (D. Conn. Oct. 20, 1995) (recommended ruling by J. Martinez).
DTSCUSSTON At the end of its opinion, the Second Circuit stated:
We have reviewed Respondents' privilege log, and find it deficient.
The loa contains a cursory description of each document, the date, author, recipient and " comment."
Further, under a heading entitled " Basis of Clain," each of the documents is alleged to be an " Attorney-Client 3
00T-16-96 WED 12:53 JUSTICE DEPT ClV DlV FAX N0. 202 616 8460 P.05 M DU 10-16-86 i 8:17 i 202 616 8470if 6/ 7 Communication." These general allegations of privilege, however, are not supported by the information provided.
The descrintinne a net e-nta m4=m1 v do not nrovi do anntirrh informatinn to munnort 1-he nef trilman claim, particularly in the glaring absence of any supporting affidavits or other documentation.
1 73 F.3d at 473-74 (*=ph==is added).
This came at the conclusion of an opinion affirming the enforcement of an administrative subpoena and was in response to the respondents' general claims of privilege as a defense to the subpoena. See. Construction Products. 73 F.3.d at 468.
The Court never inspected the documents to ascertain if any were in fact protected by the attorney-client privilege.
This court reads the above quoted language to mean that the Second Circuit considered the information before it to be inadequate to allow it to make a determination on the privilege issue.
The Court was not, however, ordering the alleged privileged documents to be disclosed.
While Judge Martinez advised the parties that the correct way to proceed was for the government to file a motion to compel production of the documents and allow a -judicial officer to inspect them in c-ara, no such motion has ever been filed. No judicial officer has,ever inspected the documents in em= ara to determine if they are in fact protected by the attorney-client privilege.
The court feels strongly that alleged privileged documents, particularly those alleged to be protected by the attorney-client privilege, should not be disclosed without being 4
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l reviewed by a judicial officer.
Without the benefit of an in s;amaza review which specifically addresses the privilege claims asserted / the court is reluctant to order the disclosure of such documents.
Accordingly, the government is directed to file a motion to compel production of the withheld documents. A judicial officer i
e - en to determine if it is should then review each document in protected by the attorney-client privilege.
l CONCLUSION l
For the reasons stated above, Petitioner's Motion for l
Reconsideration (doc. I 101] is GRANTED.
Upon reconsideration, l
the court's original ruling adopting the Magistraf.e's ruling is re-affirmed.
The Application for writ of Assistance [ doc. # 103]
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is DENIED.
f SO ORDERED this lith day of October, 1996 at Bridgeport, Connecticut.
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i Alan H. Novas United States District Judge i
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ftp://ftp.cwru.edu...ii/101596.ZOR.filt ftp://ftp.cwru.edu...ii/101596.ZOR.filt l
I (ORDER LIST: 519 U.S.)
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TUESDAY, OCTOBER 15, 1996 APPEAL'--
SUMMARY
DISPOSITION l
l 96-63 HANSBERGER, VICKI, ET AL. V.
UNITED STATES I
The appeal is dismissed as moot.
CERTIORARI --
SUMMARY
DISPOSITION 96-184
-LIFE INSURANCE CO. OF GA V. JOHNSON, DAISEY The petition for a writ of certiorari is granted.
The judgment is vacated and the case is remanded to the Supreme Court of Alabama for further consideration in light of BMW of North America, Inc. v. Gore, 517 U. S.
(1996).
l ORDERS IN PENDING CASES l
A-254 RICHARD McVICAR, WARDEN V. LEE OTIS GRIFFIN The application to recall the mandate addressed to The Chief Justice and referred to the Court is denied.
M-14 EDWARD EMERY V. CITY OF TOLEDO M-16 STEVEN JOHNSON V.
)
i M-17 A. C. JONES V. LARRY E. NANCE, ET AL.
M-18 WILLIAM F. HELBLING V. SALVATORE BEVERE, ET AL.
j M-19 JAMES MEREDITH WHITAKER V. NANCY PAGE WHITAKER M-20 JANE DOE, ET AL. V.
i The motions to direct the Clerk to file petitions for wr'its of certiorari out-of-time are denied.
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M-15 MICHAEL J.
SWEENEY V. NATIONAL TRANSPORTATION SAFETY BOARD The motion to direct the Clerk to file a petition for a writ of certiorari out-of-time under Rule 14.5 is denied.
2 95-897 AUER, FRANCIS, ET AL. V. ROBBINS, DAVID, ET AL.
l The motion of International Association of Chiefs of Police for leave to file a brief as amicus curiae is granted.
1 of 14 10/16/96 14:01:22 l
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ftp://ftp.cwru edu.. 11/101596.ZOR.filt ftp://ftp.cwru du...ii/101596.ZOR.filt 96-243 SUITUM, BERNADINE V. TAHOE REGIONAL PLANNING The motion of Tahoe Sierra Preservation Council for leave to file a brief as amicus curiae is granted. The motion of Tahoe Lakefront owners' Association for leave to file a brief as amicus curiae is granted. The motion of Southeastern Legal Foundation for leave to file a brief as amicus curiae is granted. The petition for a writ of certiorari is granted.
CERTIORARI DENIED 95-1567 IlbIANA V.
BRYANT, ROSS 95-1966 RUSSO, PAUL, ET AL. V. UNITED STATES 95-1999 NEBRASKA V. RYAN, DENNIS i
95-2007 CONSTRUCTION PRODUCTS, ET AL V. UNITED STATES 95-2038 MINCIELI, JOHN V. BRUDER, AUDREY 95-9123 QUATREVINGT, STEVEN V.
LOUISIANA 95-9480 GREEN, NASHIRA V.
l 96-20
) CARIBBEAN PET. CORP. V.
COASTAL FUELS OF PR
)96-200 ) COASTAL FUELS OF PR, INC.
V.
CARIBBEAN PETROLEUM CORP.
96-25 EDMONDS, THEODORE V. UNITED STATES l
96-43 WILKINSON, DAVID V. LEGAL SERVICES CORP., ET AL.
96-53 PRICE, BILLY, ET AL. V. UNITED STATES 96-70 COLUMBIA MACHINE, INC. V.
SCHNIDRIG, HERMAN 96-73 MALONEY, THOMAS V. UNITED STATES 96-91 CSX TRANSPORTATION, INC. V.
WILSON, LANZY 96-93 LEVITOFF, MARK, ET AL. V. GLICKMAN, SEC. OF AG.96-100 FUTERNICK, SHELDON, ETC. V.
l 96-135 KEVORKIAN, JACK V. MICHIGAN j
96-156 ANGELONE, RONALD,ETC., ET AL V. MONTCALM PUBLISHING CORP.96-193 MYERS, MARTIN V. BURNS, THOMAS, ET AL.96-194 ROBOSERVE, INC. V.
KATO KAGAKU CO., LTD.
i 96-195 DILLARD DEPT. STORES V. HAROLD'S STORES, INC., ET AL.
i 96-197 REHMAN, DONALD V. GARWOOD, McKENNA, ET AL.
4 of 14 10/16/96 14:01:22
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ATTACHMENT 2 in rar parfactinn sacvica Inc., No. 96-60311 (Bkrptcy Ct., N.D. Ohio, order issued Aug. 20, 1996) l l
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BAqqyp gjgg,rgg,r IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION-CANTON, OHIO IN RE:
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CASE NO. 96-60311 l
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PERFECTION SERVICE, INC.
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CHAPTER 7
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Debtor
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CHIEF BANKRUPTCY JUDGE
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JAMES H. WILLIAMS i
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AMENDED AND AGPWWM ORDER l
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GRANTING AND APPROVING'
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TRUSTEE'S NOTICE AND MOTION TO
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SELL PERSONAL PROPERTY FREE AND
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cT W AR OF LIENS.. t*T AIMS Aun
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ENCUMBRANCES AND 2(OTICE OF
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PROPOSED ARANDONMENT
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This matter came before the Court on an emergency and expedited hearing upon the Trustee's Notice and Motion to Sell Personal Property Pree and Clear of Liens, claims and Encumbrances sild Notice of Proposed Abandonment
(" Notice and Motion"), this court's prior Order entered on July 18, 1996, approving the Notice and Motion, and, the proposed agreed amendments thereto.
m.i.wes
e Based upon the Notice and Motion, the amendments thereto, and by agreement and stipulation of the parties, the court hereby finds:
1.
Appropriate, timely, adequate and sufficient notice of the Notice and Motion and the opportunity to interpose an objection thereto were given to and served upon all known creditors and other l
parties in interest in accordance with sections 363 and 545 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004 and 6007.
2.
With respect to the amendments to the Notice and Motion as agreed to by the parties, in that all parties affected by such amendments have agreed to such termd, no additional or further notice of the Notice and Motion as amended or the entry of this Amended order is necessary.
3.
As amended, the Trustee seeks authority and approval to sell the Trucks and Sources (as those terms are defined in the Notice and Motion), free and clear of any and all liens, claims and encumbrances to Best Wireline, Inc.
(" Rest Wireline 8) for an increased purchase price of Seventy Thousand Dollars ($70,000.00).
4.
As to the Sources to be sold to Best Wireline, only those sources found to be non-leaking and contamination free, based upon a review and inspection of the Sources, will be sold to Best Wireline.
Such sale and transfer of the Trucks and Sources by the Trustee to Best Wireline will be coordinated with and under the observation of the Nuclear Regulatory Commission ("NRC").
5.
As to the sources found to be leaking radioactive i
material, the Trustee, with the assistance and cooperation of the 2
umm.t.ws
NRC, is authorized to undertake those steps necessary to incure their proper removal and disposal. The Trustee will also undertake those steps necessary to insure the removal and clean-up of any related items.
6.
Lorena and Arthur Medford (the "Medfords") are the owners of the real property located at 110 Marrietta Street, Stone Creek, Ohio, and the building thereon
(" Premises"), where the Debtor's personal property, including the Trucks and sources, is le::sted.
The Medfords were the lessors under a lease with the Debtor for the Premises.
7.
To fac.' cate the sale of the Trucks and Sources to Best Wireline and to defray the administrative costs incurred herein, but without admitting any liability as to any costs associated with the removal, disposal or clean-up of the leaking radioactive i
Sources and related items, the Medfords have agreed to waive any and all claims for rent, relating to the Premises, incurrad by the Debtor and/or tha estate from the commencement of the this chapter 7 proceeding.
In addition, without admitting any liability as to i
the costs associated with the removal, disposal and clean-up of the j
leaking radioactive sources and related items, the Medfords have agreed to. pay to the Trustee, within ten (10) days of the entry of p
l this Order, the sum Five Thousand Dollars ($5,000.00) as and for k
I costs and expenses of administration.
8.
Huntington National Bank has agreed, without admitting i
any 13 sbility as to any costs associated with the removal, disposal
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j and clean-up of the leaking radioactive Sources and related items, 3
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to allow the Trustee to retain from the proceeds of sale of the 1
l Trucks and sources the sum of Twenty-five Thousand Dollars i
($25,000.00), subject to the terms herein, as and for the costs a :d l
l expenses of administration. The remaining proceeds of sale, Forty-five Thousand Dollars ($45,000.00), shall be paid by the Trustee to j
Huntington National Bank upon its claim and lien.
l 9.
As to the abandonment of the remaining personal property j
and its removal from the Premises, the parties have agreed that I
such abandonment shall not be effective until the NRC, after j
conducting such tests and surveys as it deems necessary, notifies the Trustee, Huntington National Bank and the Medfords, in writing, l
that the NRC has not identified any significant health or safety 1
i hazards at the Premises that would prevent the removal of the remaining personal property or the use of the Premises.
After such I
notification by the NRC, the remaining personal property shall be i
I deemed abandoned without further order of the Court, and Huntington i
J National Bank shall have thirty (30) days to remove the remaining personal property from the Premises.
During such 30 day period, Huntington National Bank shall incur no liability relating to the personal property, except such costs and expenses it will incur in the removal and transportation of such property.
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10.
The issuance of the written notice from the NRC as set forth in paragraph 9 above, shall not constitute a guarantee to any of the parties herein with " respect to the acceptability of the remaining personal property or the Premises for unrestricted use. or on any environmental matters, and does not foreclose the NRC from i
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making recommendations to the parties regarding further actions related to the remaining personal property or the Premises.
11.
Should the costs and expenses to be incurred for the proper removal, disposal and clean-up of the leaking Sources and clean-up, removal and disposal of other contaminated material on the Premises, not exceed Sixteen Thousand Five Hundred Dollars
($1,6,50 0. 00 ), the Trustee shall pay over to Huntington National Bank, the difference between the actual environmental clean-up costs and $16,500.00, but in no amount greater than six Thousand Dollars ($6,000.00).
12.
Should the Trustee recover any proceeds of insurance upon a claim based upon the environmental clean-up costs incurred by the estate, from such proceeds of insurance, the Trustee will pay to the Medfords an amount up to Five Thousand Dollars ($5,000.00) as and for repayment of their prior contribution to the estate.
In addition, if not already re-paid pursuant to the terms of paragraph 11 above, the Trustee will pay to Huntington National Bank an l
amount up to $6,000.00 (minus any payments made pursuant to paragraph 11 herein) as and for re-payment of its prior contribution to the estate.
The amounts to be paid herein by the Trustee shall be paid pro-rata until paid in full.
Based upon the foregoing findings' and by agreement and stipulation of the parties, the Court finds and IT IS THEREFORE ORDERED that the order Granting and Approving Trustee's Notice and Motion to Sell Personal Property Free and Clear of Liens, Claims 5
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and Encumbrances and Notice of Proposed Abandonment, entered on July 18, 1996, is hereby AMENDED as set forth herein.
IT IS FURTHER ORDERED that all terms of this Court's prior Order not amended or modiff ed by this Order shall remain in full force and effect.
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CSEF BANKRU1TCY JU.ME JMMES H. WILLIAMS AGREED AND CONSENTED TO:
Bruce R.
Schrader, II - 0039418 Roetzel & Andress 75 E, Market Street Akron, Ohio 44308 Counsel for Trustee Dennis Traver TRAVER WORTH & FOX 309 Huntington Bank Bldg.
232 W. 3rd Street Dover, OH 44622 Counsel for Huntington National Bank Susan Fonner Senior Attorney U.S. Nuclear Regulatory Commission Division of Industrial and Medical Nuclear Safety Washington, DC 20555 6
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1 Lorena Medford 3203 State Route 516 Dover, OH 44622 1
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Arthur I. Harris Assistant U.S. Attorney 1500 Bank One Center 600' Superior Avenue, East Cleveland, OH 44114-2500 l
CERTIFICATE OF SERVICE This is to certify that a true copy of the foregoing Amended i
i and Agreed Order Granting and Approving Trustee's Notice and Motion l
to Sell Personal Property Free and clear of Liens, claims and l
Encumbrances and Notice of Proposed Abandonmant was sent by regular l
U.S. mail service this day of August, 1996, tos l
Bruce R. Schrader, II, Esq.
Roetzel & Andress 75 E. Market Street Akron, Ohio 44306 Dennis Traver, Esq.
TRAVER WORTH & FOX 309 Huntington Bank Bldg.
232 W. 3rd Street i
Dover, OH 44622 Susan Fonner S'enior Attorney U.S. Nuclear Regulatory Commission j
Division of Industrial and Medical Nuclear Safety l,
Washington, DC 20555 Lorena Medford 3203 State Route 516 i
Dover, OH 44622 a
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office of the U.S. Trustee BP America Building 200 Public Square 20th Floor, suite 3300 Cleveland, OH 44114-2301 Arthur I. Harris Assistant U.S. Attorney 1800 Bank One Center 600 Superior Avenue, East Cleveland, OH 44114-2600 Deputy Clerk i
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