ML20207J645

Memorandum & Order Directing ASLB to Reconsider Appropriateness of Contracts for Expert Witnesses & Respond to Commission Concerns Re Propriety of Hiring Eh Stier to Review NRC Work.Served on 860725

ML20207J645
Person / Time
Site:	Three Mile Island
Issue date:	07/24/1986
From:	Chilk S NRC OFFICE OF THE SECRETARY (SECY)
To:	Atomic Safety and Licensing Board Panel
References
CON-#386-118 LRP, NUDOCS 8607290208
Download: ML20207J645 (5)

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k 4k 00CHETED USNRC UNITED STATES OF AMERICA NUCLEAR REGULATORY COMf11SSION 5 M 24 P4 :22 COMMISSIONERS:

CF Lando W. Zech, Jr., Chairman $fg[Iyj%.6t g

ruv gg? 4,r Thoma: M. Roberts James K. Asselstine Frederick M. Bernthal

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In the Matter of INQUIRY INTO THREE MILE ISLAND UNIT 2 ) Docket No. LRP

.LEAX RATE DATA FALSIFICATION )

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MEMORANDUM At'D ORDER The Presiding Board on May 30, 1986 issued a declaratory order and certified the following questions to the Commission:

(1) Is the Licensing Board authorized to pay negotiated fees to prospective expert witnesses based on prevailing market rates?

(2) If so, are such negotiations to be carried out by the Board or should they be conducted by the Staff on the Board's behalf?

As explained below, the NRC may pay negotiated fees to expert witnesses based on prevailing market rates, and such negotiations should be carried out by the staff, as is the case with other contracts. However, the Commission directs the Presiding Board, with staff's assistance, before seeking to enter I

any contracts to reconsider whether they would be appropriate in the circumstances of this proceeding.

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Background

Edwin H. Stier and Winthrop A. Rockwell, both attorneys, separately conducted technical studies of leak rate testing at TMI-2 for GPU Nuclear.

Stier also investigated the responsibility of present employees at THI for leak rate falsifications. They respectively produced the "Stier Report" and the "Faegre & Benson Report."

The Presiding Board in the TMI-2 leak rate falsifications hearing believes those reports "can contribute significantly to the inquiry." The Board's inclusion of those reports in the initial documentary record was based on the assumption that appropriate sponsoring witnesses, including Messrs. Stier and Rockwell, would testify concerning them.

In addition, GPU Nuclear expressed an intention to have Mr. Stier review and comment on the NRC Staff's report on leak rate falsifications (which

, includes some review of the Stier Report), and on 01's report on the same subject. However, the Presiding Board in a May 30, 1986 Declaratory Order stated that Mr. Stier, if he is to be a " Board" witness for purposes of his

! completed report, should -- in the interests of independence and objectivity

-- be a Board witness for all purposes in this proc'eeding, including the proposed reviews and comments.

The Board in the May 30, 1986 Declaratory Order then addressed whether it could pay Messrs. Stier and Rockwell. The Board concluded that it could pay Messrs. Rockwell and Stier, and such technical experts as may be neces-

.sary, at the current Federal ceiling salary rate to testify concerning thess reports. The Board also concluded that it had the authority to pay Mr. Stier and persons working with him at the current Federal ceiling salary rate to l

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\ 3 review the staff report and 01 report, and stated its intent to seek Mr. Stier's services in this regard.1 The Board certified to the Commission the question of whether it could authorize payment at prevailing market rates for the work of experts in preparing or presenting testimony. The Board noted that " authority to pay something approaching market rates may be necessary to conduct a thorough inquiry," but "it is somewhat difficult to infer the delegation of relatively open-ended fee-payment authority to a Board that has no experience in such matters." The Board also certified to the Commission whether, if negotiated -

fees based on prevailing market rates can be paid, the negotiations should be conducted by the Board or the staff on the Board's behalf.

Analysis The Comptroller General in a decision involving the Office of Price Administration found as follows:

Expert witnesses (as distinguished from experts employed to assist in the preparation of the trial proceedings, 6 Cong. Gen.

712) are not necessarily officers or employees but are paid fees to appear and testify as private individuals. 1.2 Comp. Gen. 322. The services of expert witnesses cannot be acquired without their consent and without just compensation. In re Major William Smith, 24 C. Cls. 209; 6 Comp. Gen. 712; 7 id. 232. Accordingly, the fees, etc., to be paid expert witnesses are subject to agreement or contract.

I The Board in a July 3,1986 letter to GPU Nuclear's counsel stated that, because of scheduling concerns, the Board was withdrawing its request that GPU Nuclear refrain from retaining Mr. Stier. The Board noted that GPU Nuclear had indicated that, with the Board's objection withdrawn, GPU Nuclear would seek to obtain Mr. Stier's comments on the NRR and OI reports.

\ 4 24 Comp. Gen. 159 (1944). The relevant statutory provisions of the Office of Price Administration are analogous to those of the NRC, and that decision remains authoritative. Hence we conclude that the NRC can pay negotiated fees to prospective expert witnesses based on prevailing market rates. The Board itself does not have contractual authority, however, and negotiations for any such contracts (whether at market rates or otherwise) should be conducted in the same manner as for other contracts, by working through the appropriate staff offices.

Thus the answers to the Presiding Board's certified questions are straightforward -- negotiated fees for expert witnesses are permissible, and the negotiations should be handled by staff.

However, the Commission is concerned about the proposed contracts.2 First, the Commission is concerned about paying expert fees for testimony regarding work that has already been done, where the testimony apparently can be compelled by subpoena.

Second, the Commission is concerned about the propriety of hiring Mr. Stier to review NRC work. The Commission disagrees with the Board's apparent belief that Mr. Stier will appear more independent and objective if

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the NRC pays him.to review staff's work. Mr. Stier was originally employed by GPU Nuclear or;; this same subject matter. It seems doubtful that the 2

This is a legislative format hearing, not an adjudicatory hearing, and only the Presiding Board can call witnesses. Hence the Board's questions do not raise any concerns regarding paying a party's witnesses. Similarly, since only the Board can call witnesses in this proceeding, the Appeal Board's decision in South Carolina Electric and Gas Co. (Virgil C. Summer l Nuclear Station, Unit 1), ALAB-663,14 NRC 1140 (1981), is not directly applicable.

\ 5 appearance of a loss of objectivity because of his prior association with GPU Nuclear will be significantly lessened by now having the NRC pay him. Hence it would appear that there is no significant reason why GPU Nuclear could not now employ Mr. Stier to review the staff and OI reports, as GPU Nuclear has suggested. Finally, the Comission is concerned about the possible conflict of hiring Mr. Stier to review staff's report, where staff's report in part reviews Stier's work while employed by GPU Nuclear.

The Comission believes that the Board's letter of July 3,1986 may have mooted many of the above concerns. See note 1, supra. If the Board intends to proceed further in this regard, however, before doing so it should recon-sider whether these contracts would be appropriate. In reconsidering the Board should seek NRC staff assistance. Before seeking to have the NRC enter into any contracts the Board should inform the Comission of its response to the Comission concerns expressed above.

It is so ORDERED.

Fori the Co tssion 4 o f i 2 LS ( Ca #

(/ ~ SAMUEL @ CHILK

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• UA g g Secretary of the Comission QMf

%s Datedatgashington,D.C.

this7'bday of July,1986.

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