ML20151K795
| ML20151K795 | |
| Person / Time | |
|---|---|
| Issue date: | 04/16/1985 |
| From: | Plaine H NRC OFFICE OF THE GENERAL COUNSEL (OGC) |
| To: | |
| Shared Package | |
| ML20151K691 | List:
|
| References | |
| FOIA-85-409, TASK-AINV, TASK-SE SECY-85-137, NUDOCS 8505030695 | |
| Download: ML20151K795 (11) | |
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'85 ADJUDICATORY ISSUES" ' '
(Notation Vote)
For:
The Commissioners From:
Herzel H.E. Plaine General Counsel
Subject:
DECISION OF THE COURT OF APPEALS IN GENERAL ELECTRIC CO. V. NRC, NO. 84-2066, INVOLVING THE GENERAL ELECTRIC REED REPORT AND COMMISSION OPTIONS FOR PROCEEDING UPON REMAND Summary:
On December 21, 1984, the United States Court of Appeals for the Seventh Circuit issued its decision on General Electric Company's (GE) lawsuit to bar agency release of GE's 1975 Reed Report.
General Electric Co. v. NRC, 750 F.2d 1394 (7th Cir. 1984).
While upholding in most respects the Commission's October 1980 s
determination to release the Reed Report, the Court nonetheless found the Commission's explanation of the basis for its decision not to withhold the report under Freedom of Information Act (FOIA) exemption 4 to be deficient and, CONTACT:
Paul Bollwerk, OGC' 4-3224 gres osee 4
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accordingly, remanded the matter to the Commission for further proceedings.
4 Discussion:
the Reed g
Report is a GE internal product improvement study that was given to the Licensing Board in the Black Fo:: proceeding as the result of a settlement agreement on a subpoena request.
Subsequently, in response to several.'SIA requests for the report, the Commission split 2-2 on the issue whether the document should'be.
released.
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(Black Fox Station, Units 1 and 2), CLI-60-35, 12 L,
NRC 409 (1980).
The result of'this tie vote was to compel the release of the document.
Id. at 412.
In an unsuccessful lawsuit before the United States District Court for the Central District of Illinois and its subsequent appeal to the Seventh Circuit, GE challenged the Commission's decision on several grounds, including:
(1) whether the Reed Report was an " agency record" so as to be subject to disclosure under the FOIA; (2) whether the Reed Report falls under FOIA exemption'3 as a
exempted from disclosure by the Atomic Energy Act or the Trade Secrets Act; and (3) whether the Reed Report was exempt from disclosure under' FOTR exemption 4 as confidential financial information whose release either would harm the agency's document gathering process or would substantially harm GE's competitive position.
Both courts declared GE's agency record and exemption 3 arguments without merit.
Both courts also found that, w'ith regard to GE's claim that FOIA.,
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4 exemption 4 was applicable, the Commission's 2-2 L,
decision rejecting the claim of' harm to the agency's document gathering processes was acceptable.
In this regard, the Seventh Circuit found that the Commission's decision to disclose, while not explained, nonetheless was sufficient.
The Court noted that the Commission may well have felt thsc its subpoena power, in conjunction with its overall sway over the nuclear industry as a result of its licensing authority, would ensure the agency has access to those documents it needs to carry out its public health and safety responsibilities.
750 F.2d at 1402.
- Further, the Court declared, since a determination that release of a document will not harm the agency's information gathering processes is a "quintessenk tially managerial judgment" that is against the agency's interest, it carries so slight a chance of judicial reversal that it would be an idle gesture to require the Commission to devote resources to writing out a rationalization of its action.
Id.
Thus, the Commission's decision that no harm to the agency's information.,
I
4-5 submission processes would occur from release of 5,.
the Reed Report was found to be adequate under the circumstances.
'The Seventh Circuit was not so willing to sustain the Commission's determination tnat disclosure of the Reed Report would not result in competitive harm to GE.
Initially, the Court noted that a number of reasons might exist for the Commission's finding of no substantial competitive harm-to GE, including GE's dominant position as a producer of nuclear reactors; the prior public disclosure at congressional hearings of many of the criticisms of GE's reactor program contained in the Reed Report; and the age of the report, which was five years old when release wab ordered in 1980.
Id. at 1402.
In addition, the Court observed that since those requesting the report were seeking for the most part to disparage the nuclear industry as a whole rather than GE in particular, any harm to GE arining from its disclosure likely would be too speculative to support an exemption 4 claim.
Id.
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Yet, the existence of these reasons for the Commission's determination was not sufficient, the Court declared, since the Commission did not utilize them to support its decision.
- Indeed, the Court noted, the agency's decision did not evea reference the specific material in the agency record that supported its determination, including the affidavit of NRC staff economist Maurice Messier who reviewed the Reed Report and who found that it did not contain information that would harm GE's competitive position if released.
Id.
Citina this lack of an explanation by the agency, the Seventh Circuit reversed the District Court's decision upholding the Commission's disclosure determination and returned the case to the District Court with instructions to remand the case to the Commission fcr further proceedings on the issue of competitive harm to GE.
Acting pursuant to this directive, on January 23, 1985, the District Court remanded the proceeding to the Commission.
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L J Eerzel"H. E. Plaine General Counsel Attachments:
1.
Ltr to URC frm Edgar, dtd 12/28/84 2.
Proposed ltr to Edgar g
Commissioners' comments or consent should be provided directly to the Office of the Secretary by c.o.b. Wednesday, May 1, 1985.
Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Tuesday, April 23, 1985, with an information copy to the Office of the Secretary.
If the paper is of such a nature that it requires additional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.
DISTRIBUTION:
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December 28, 1984 t.'.'.'.,.*.,,.*".".,,.
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Mr. Nunzio J. Palladino Mr. Frederick M. Bernthal Chairman Commissioner United States Nuclear United States Nuclear Regulatory Commission Regulatory Commission 1717 H Street, N.W.
1717 H Street, N.W.
I Washington, D.C.
20555 Washington, D.C.
20555 Mr. James K. Asselstine Mr. Lando W.
Zech, Jr.
Commissioner Commissioner United States Nuclear United States Nuclear Regulatory Commission Regulatory Commission 1717 H Street, N.W.
1717 H Street, N.W.
Washington, D.C.
20555 Washington, D.C.
20555 Mr. Thomas M. Roberts 5
Commissioner United States Nuclear Regulatory Commission 1717 H Street, N.W.
Washington, D.C.
20555 Re:
General Electric Co. v. NRC, No. 84-2066, Slip. Op.,
Dec. 21, 1984 (7th Cir.).
Gentlemen:
On December 21, 1984, the United States Court of Appeals for the. Seventh Circuit issued the above-referenced decision that reversed the November 30, 1983 judgment of the United States District Court for the Central District of Illinois, Danville Division and directed that Court to remand the matter for further consideration of the Commission's October 9, 1980 decision ordering General Electric's confidential product improvement study "The Reed Report" - to be made public.
In particular, the Court remanded the matter for a determination concerning whether release of the Reed Report would likely cause substantial l
,,,NawwAw & Hor.Tzzwomm,P. C.
Chairman & Commissioners United States Nuclear Regulatory Commission December 28, 1984 Page Two competitive harm to GE.
While emphasizing the narrow scope of its ruling, the Court did indicate that the Commission may consider all matters previously before it, or new evidence that the Commission may wish to gather on remand.
General Electric wishes to reiterate its strong conviction that release of the Reed Report in October of 1980 would have caused it substantial competitive harm, and that the October 9, 1980 decision did not consider all relevant information before the Commission on this subject.
Moreover, GE believes that present circumstances in the reactor manufacturing industry are such that release of the Reed Report would still result in substantial competitive harm in foreign equipment, fuel, and service markets, and in domestic service markets.
GE respectfully requests that it be given an opportunity to respond before the Commission reaches a final determination on remand.
GE submits that the matters in issue here have substantial implications for the stability of the Commission's licensing process, and for the industry's willingness t'o undertake critical self analysis for product improvement in the future.
This already protracted litigation will ultimately be more expeditiously concluded if the Commission has a complete record for a decision, including a comprehensive exposition of GE's position.
s Insofar as the October 9, 1980 decision ordered release of the Reed Report, it was the product of a 2-2 split vote by a l
sharply divided Commission.
We believe that it would be appropria~te for this fully constituted Commission to afford GE the opportunity to respond, develop a sound record, and to render a firm majority decision reflecting current industry circumstances and regulatory policies.
Accordingly, GE respectfully requests reasonable notice and an opportunity to respond prior to any final Commission determination regarding the above-referenced matter.
Very truly yours Geo h L. Edga Attorney for General Electric cc:
C. Sebastian Alcot, Esq.
Douglas Letter, Esq.
Susan McGrath, Esq.
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