ML20209E852
| ML20209E852 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 04/28/1987 |
| From: | Blair B BRAZOS ELECTRIC POWER COOPERATIVE, INC., SPIEGEL & MCDIARMID |
| To: | Bloch P, Johnson E, Mccollom K Atomic Safety and Licensing Board Panel |
| References | |
| CON-#287-3241 CPA, OL, NUDOCS 8704300135 | |
| Download: ML20209E852 (21) | |
Text
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Gomv J NEWELL uoaC a OaEa April 28, 1987 mm.m u ANNE SWANSON REN4 STEINZOR Peter B. Bloch, Esq., Chairman Dr. Kenneth A. McCollom Administrative Judge Administrative Judge Atomic Safety and Licensing Board 1107 West Knapp U.S. Nuclear Regulatory Stillwater, OK 74075 Commission Washington, D.C. 20555 Dr. Walter H. Jordan Administrative Judge Elizabeth B. Johnson 881 W. Outer Drive Administrative Judge Oak Ridge, TN 37830 Oak Ridge National Laboratory P.O. Box X, Building 3500 Oak Ridge, TN 37830 Re: Texas Utilities Electric Company, et al. (Comanche Peak Steam Electric Station, Unit 1 and 2), Docket Nos. 50-445-OL and 50-446-OL, 50-445 CPA
Dear Licensing Board Members:
Brazos Electric Power Cooperative ("Brazos") has received Texas Utilities Electric Company's ("TUEC's") " Response to CASE and Meddie Gregory Motion for Appointment of Legal Counsel for Minority Applicants and for Clarification of Discovery Responses," docketed April 20, 1987 (" Response").
To avoid any possible misimpression, Brazos appears specially and states as follows:
- 1. Brazos has not retained separate licensing counsel for these proceedings. It has relied on licensing counsel for Applicants to represent it in these proceedinas.
8704300135 870428 PDR ADOCK 05000445 o G PDR SDD
Licensing Board Page 2 '
April 28, 1987
- 2. Although TUEC and the licensing counsel for the co-owners were specifically requested to consult with Brazos' attorneys concerning the Response, licensing counsel failed to do so except to the extent that Brazos' management was sent a list of written questions from TUEC management to which Brazos responded. It is noteworthy that TUEC has not incorporated or submitted Brazos' answer in the Response.
- 3. Brazos disagrees with many of TUEC's statements (and implications) in its Response, including statements concerning TUEC's obligations under the Joint Ownership Agreement and its statements concerning legal representation of Brazos before the Nuclear Regulatory Commission.
- 4. As an applicant for a license, Brazos recognizes that it has independent obligations to the Commission and to this Board, and it desires to fulfill them. See, e.g., 10 C.F.R. S 2.713(b)
(1986); Public Service Company of Indiana, ALAB-459, 7 NRC 179 (1978); Cleveland Electric Illuminating Co., DD-83-17, 18 NRC 1289 (1983).
However, Brazos fears reprisals by TUEC if it were to make an uninvited and independent appearance before this Board. While TUEC has taken the position that Brazos can fulfill its obligations through special appearances, such as this one, 1/
it has taken the inconsistent position that
"[bjeyond any peradventure, Defendants have contracted away any right they may have had to control or separately to appear (by counsel or otherwise) in the licensing proceedings." (P. 7, 1/ "While neither this firm nor any of the other counsel who Eave appeared in support of the license application has or ever had any attorney / client relationship with any CPSES owner other than TU Electric, nor have they undertaken, or will they undertake, to provide legal advice or counsel the other joint owners as to any matter, they, of course, will do nothing to prevent the minority owners from bringing any matter to this Board's attention which they would be required to do by law or to prevent them from appearing specially at any time required to protect a purely individual interest such as the assertion of a privilege running only to one of them individually." (Letter from Robert A. Wooldridge to Administrative Judges dated February 19, 1987, attached as Exhibit A to TUEC's " Motion to Reopen and for Reconsideration of the Order of February 9, 1987 Disqualifying Worsham, Forsythe, Sampels & Wooldridge as Counsel for Plaintiff," cited in text).
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Lic@ncing Board Page 3 April 28, 1987
" Motion to Reopen and for Reconsideration of the Order of February 9, 1987 Disqualifying Worsham, Forsythe, Sampels & Wooldridge as Counsel for Plaintif f," Texas Utilities Electric Co. v. Tex-La Electric Cooperative of Texas, Inc., No. 86-6809 (Tex. D. Dallas, 14th Dist.) (attached)). Brazos fears that if it seeks to exercise its obligations in a substantive way it may be subject to a (totally groundless) suit for having done so.
Further, TUEC argues that the Board does not have the power to reach the representation questions.
Therefore, while Brazos has strong interests in the matter, unless there is a Board order that it respond on the merits, Brazos feels constrained not to do so. Brazos will, of course, seek to comply with any Board order in this matter.
Respectfully submitted, M 5. (h Bonnie S. Blair Barbara S. Esbin Spiegel & McDiarmid Joseph R. Riley Law offices of Joseph R. Riley Appearing specially for Brazos E 9:tric Power Cooperative, Inc.
cc: All parties to this proceeding William Burchette, Esq.
Blake Tartt, Esq.
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NO. 86 6809 TEX A5 UTILITIES ELECTRIC : IN THE DISTRICT COURT COMPANY. :
Plaintif f. :
V 5. .
OF DALL A5 COUNTY. TEX A5 TEX-LA ELECTRIC COOPERATIVE :
0F TEX AS. INC. et al.. :
Defendants. : l'sTH JUDICIAL DISTRICT MOTION TO REOPEN AND FOR RECONSIDERATION OF THE ORDER OF FEBRUARY 9.1987 DI5 QUALIFYING WOR 5 HAM FOR5YTHE.
SAMPELS & WOOLDRIDGE A5 COUNSEL FOR PL AINTIFF TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW the Plaintif f ("TU Electric") and moves the Court to reopen, reconsider, and set aside (or in the alternative modify or clarify) the Order dasqualif ying Worsham. Forsythe. Sampels & Wooldridge ("WF5&W") from further participation as counsel for TU Electric in this case, respectfully showing this Honorable Court the following:
1.
Since the entry of the Order disqualif ying WF5&W, substantial developments have occurred which compel the Court to reopen and reconssder such Order.
Recent statements by the Def endants to Piaantif f and filings before the Nuclear Regulatory Commission ("NRC") in Washington now make at abundantly clear that the Defendants have made misrepresentations either to this Court or to the NRC and are speaking out of both sides of their mouths. The foundation of Defendants' disqualification motion has been totally eroded by inconsistent theories and tactics employed by Defendants against Plaintiff in the NRC licensing proceedings. By way of example Brazos Electric Power Cooperative ("BEPC"), in the Motion to Dis-qualif y WF5&W in this Court, represented to this Court that "Worsham.
Forsythe also has represented aj of the other owners of Comanche Peak . . ." and that "Worsham. Forsythe has represented al owners and
, the Project Manager as joint applicants in the extensive proceedings before the ASLB . . . .
Mr. Jablon, BEPC's attorney at the oral i
arguments on such motion, stated that. "They (WF5&W) are repre-senting them and uj at the NRC and they sre representing TUEC here."
Compare these statements with a recent filing oy BEPC before the
.l.
NRC in a Request for Modification of Licenses *herein BEPC states that it "has been placed by TU Electric in a position of having hg no actual attorney representation in its capacity as joint owner of Comanche Peax before the NRC and of not now having such repre.
sentation." (Emphasis added.) Furthermore. BEPC states that, "It has become apparent that the project's attorneys of record have not in fact spoken for all applicants." Even more startling is that BEPC, in an effort to have the NRC require that Plaintiff buy BEPC out af Comanche Peak, has stated unequivocally that the very pleadings and correspondence which BEPC relied upon to establish before this Court WFMW's alleged representation of BEPC at the N(C are now " false."
Specifically, such Request for Modification of Licenses states:
"Recent actions by TU Electric . . . have demonstrated that the lawfirm of Worsham Forsythe Sampels & Wooldridge designation of itself as the lead attorney for the project and as counsel for applicants, including Brazos, in proceedings before this Commission were material ta Se statements . . .
concerning the representation of Brazos and other co.
owners in the Comancne Peau proceedings." (Emphasis added.)
"!f. as TU E'ectric now asserts, licensing counsel had no attorney / client relationship with Brazos, the statements contained in all of the aforementioned NRC filings that counsel emploved by TU Electric appeared on benail of applicants, one of which is Brazos, are necessarily f aise.*
(Emphasis added.)'
Tex.La Electric Cooperative of Texas (" Tex-La") has recently stated to Plaintiff that:
". . . Tex-La cannot reasonably be expected to rely for legal ,
representation at the NRC on any of the attorneys repre. I senting TU Electric." ". . . accordingly, separate repre.
Sentation now may be necessary." "Any counsel selected to represent Tex.La. ther La." (Emphasis added.)ffore, must be satisf actory to Tex.
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Furthermore. Plaintif f recently uncovered in discovery in this Case a l l
December S.1986 '" quest for Additional REA Loan Commitment j wherein Tex.La states that:
~.
1 Plaintiff and WFMW of course emphatically deny that any f alse statement was made by them either to the NRC or this Court.
The point that '
Defendants have at least to date been able to deceptively obfuscate is that '
the attorneys' appearance at the NRC has alwa s been solely because they a
have an attorney /citent relationship with T Aectric, the Proiect Manager solely responsible for the licensing of the plant. WFMW has never said that it has or had an attorney / client relationship with any of the Def encants.
2 Letter of Apri! 1.1987 to Thomas G. Dignan from William Burchette.
2
O "TUEC. as lead appheant in the Comanche Peak licensing proceedings'iieTore the NRC is responsible for securing all the necessary regulatory app. ?qls in connection with Comanche Peak. Tex.La. througa its formal monitoring program, stays abreast and inf ormed on TUEC's progress in those proceedings." (Emphasis added.)
How can a statement appearing in a loan document submitted by Tex.
La to the Rural Electrification Administration that TUEC had tne responsibility to secure all necessary regulatory approvals and that Tex.
La merely monitored TtMC's progress in NRC proceedings be con.
sidered consister.t with Tex La's assertion to this Court that it was actively involved in the NRC proceedings by virtue of W F% W's representation?
Texas Municipal Power Agency ("TMPA"), also in recent statements to Plaintiff. has now stated that if the current licensing lawyers (including WFMW) are not willing to represent TMP A. "TMPA has no option but to obtain legal representation before the NRC through lawyers who will i represent the best interests of TMPA." Furthermore. TMPA has stated that:
"TMPA does not believe that NRC Rules and Regulations have been fully Comphed with when only one appheant out of several is rearesented by counsel before the N R C."
(Empnasis added.F nas statement of TMPA comes from the same party who in oral argument on the Motion to Disqualify in this Court stated that WFMW "are continuing to represent us there." referring to the NRC.
Defendants cannot have it both ways. They cannot use pleadings at the NRC as proof that WFMW allegedly represented them there and then go to the NRC with allegations that those same statements were false. Bey cannot deny the Plaintiff the right to their counsel of choice in this Court based upon assertions that the same counsel represents them at the NRC. and immediately thereaf ter state that they have not been represented and thus need to have separate representation in those NRC proceedings. Either WF%W has an attorney / client relationship with the Defendants, or it doesn't. It has always, consistently, oeen the position of WF%W that it does not now and never has had an attorney / client relationsnip with these Defendants. The record before this Court makes it 8
abundantly clear that WFMW does not and never has represented the Defendants herein; its loyalty has for decades been, and continues to be. to its long-time 3
Letter of April 2.1987 from Ed Wagoner. General Manager of TMPA. to John ,
W. Beck. TU Electric's Vice President. i i
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client. TU Electric, the Plaintalf herein. The new evidence referred to above m!!,
we believe, show even more clearly the true relationship of the parties an<f the Defendants'" game. playing" for what it really is.
By reason of the foregoing, as well as the correspondence to the NRC discussed in Section II, infra,it is necessary to reopen before this Court the matter of the disqualification of WFMW to consider new, relevant evidence that directly contrscicts the evidence relied upon by Defendants to support their Motion to Disqualify, and to consider other appropriate relief in light of these new developments.
11 I s, respectfully submitted that the Disqualification Orde'r'is premised upon a fundamental misunderstanding of WFMW's role in the Comanche Peak licensing proceedings pending before the NRC. It seems obvious that Defendants now realize (even if the Court assumes that they did not before) that there does not exist an attorney / client relationship between them and WF%W. WFS&W repre.
sents TU Electric and TU Electric alone. WFMW does not have now, nor has it ever had, an attorney / client relationship with any of the Defendants. Since the Order in this case. WF%W has further clarified its role in the licensing pro.
ceedings by its letter to the NRC's Administrative Law Judges dated February 19 1987, attached as Exhibit A and made a part hereof for all purposes. In addition to designating another firm as lead counsel for TU Electric, that letter discusses the Joint Ownership Agreement and concludes by saying:
"While neither this firm nor any of the other counsel who have appeared in support of the license application has or ever had any attorriey/ client relationship with any CP$ES owner other than TU Elec'rac, nor have they undertaken, or will they undertake, to provide legal adytce or counsel the other loint owners as to any matter, they, of course, will do nothing to prevent the minority owners from bringing any matter to this Board's attention which they would be re.
quared to do by law or to prevent them from appearing specially at any time required to protect a purely individual interest such as the assertion of a privilege running oily to one of them individually."
Additannally, to further clarity their role, counsel in the licensing proceedings, including WFMW, will hereaf ter make it clear that the representation is famited to TU Electric alone by specifically stating on all pleadings that weh attorneys are e appearing as " Attorneys for Texas Utilities Electric Company". What more can be said - WFMW's legal representation in the licensing proceedings is in behalf of TU Electric and TU Electric alone. WF%W has never in the past, nor does it now.
provide legal representation to any of the Defendants.
. ts .
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l Notwithstaiding this. Def endants would continue to have this Court believe that some%w WFMW is their lawyer. How can this be?
, - How can it be, as the record undisputedly shows, that TU Electric nas sole respons:Dility for the licensing proceedings - and yet Defendants say that TU Electric's lawyers have an attorney / client relationship with someone else in those licensing proceedings?
)
How can it be, as the record undisputedly shows. that Def endants have 1
no right to participate and have not been directly participating in the licensing 1 proceedings - and yet Defendants say that they have been participating in the licensing proceedings all along through WFMW' How can it be, as the record undisputedly shows, that Defendants have i
no right to direct WF5&W in the conduct of the licensing proceedings - and yet '
Defendants say that there is an attorney / client relationship between WF5&W and the Defendants an view of the principle that an attorney / client relationship is one of principal and agent? l How can it be, as the record undisputedly shows, that Defendants did not retaan and have no right to discharge WF5&W as attorneys in the licensing proceedings - and yet Defendants say that there is an attorney / client relationship between WF5&W and the Defendants?
How can it be, as the record undisputedly snows, that Defendants have always fully known and appreciated that WFMW has had a long-standing attorney /
client relationship with TU Electric and pursuant to that relationship has repre.
sented TU Electric in many instances adverse to Defendants, including settlement negotiations concerning the very subject matter of the case at bar - and yet Defendants say that a relationst.sp of confidence and trust exists between WF5&W and Defendants?
I How can it be, as the record undisputedly shows, that a Defendant has '
specially appeared in the licensing proceedings through its long. standing attorneys <
l (not associated with WF5&W) to assert the need for, and obtain, a protective order J
assuring that certain of Def enda.it's documents not be disclosed to WF5&W - and yet Defendants say that WF5&W is their attorney in the same licensing pro.
ceedings?
How can it be. as the record undisputedly shows, that Defendants allege that TU Electric as liable for damages to Defendants for the alleged nitshandling of the licensing proceedings - and yet Defendants say that they have been represented by WF5&W as their attorneys in the licensing proceedings, especially wnen 4 lawyer's actions are attributed and imputed to the lawyer's client?
5.
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The non sequiturs necessary to be drawn from the undisputed f acts in order to support a disqualsfication plainly belte the existence of an attorney / client rela.
tionship between WF5&W and Defendants or that WF5&W should be disqualafted as -
TU Electric's counsel herein.
We also belseve that the Court may have misunderstood our prior reference to Public Service Company of Indiana (Marble Hill Nuclear Generating Station, Units 1 and 2). ALAB 439, 7 N.R.C.179 (1978). AL Aba59 does ny stand for the proposition that minorsty owners (who have contracted away their right to particante in the licensing proceedings) have any need or are required to be represented (by counsel or otherwise) in the licensing proceedings. Indeed, nothing in ALAN 459 or elsewhere requires even TU Electric to be represented by counsel and the governing NRC regulation,10 C.F.R. Section 2.713(b). provides just the opposate. AL AB.459 merely af firmed a licensing board's action in construing an application filed only in the name of the majority owner to be " deemed" amended to reflect the minority ownership. Nothing in f. LANA 59 even purports to address the concept of legal representatson an the licer 5 ng proceedsngs and nothing in AL AN459 requires any owner to be repre-en'ed by counsel or a!!srmatively participate in the istigatson of licensing issues.
In Public Service of Indiana (Marble Hill Nuclear Generating Station. Unats I and 2), ALAB.461, 7 N.R.C. 313 (March I,1978), the Atomic Safety and Licensing Appeal Board reviewed its AL AB.459 decissyt, making at abundantly clear that the technical, procedural requirement to identify all nuclear power plant owners as de f acto co. applicants was not intended to irnpose substantave responsibilattes upon minor.6y interest owners or abrogate contracts between point owners which placed the sole responsibility for project management upnn tr.e protect manager:
"The Licensing Board found that (No. 4L . N.R.C. at )
"(t)here 6s no evidence showing th.it WYPA (Wabash Valley Power Association, a minority owner) is technically qual.
slied to design, construct or operate the proposed f acility" but explaaned that "(t)has f act * *
- does not preclude the issuance of appropriate authorizations or permits because PSI (Public Service of Indiana, the maiority owner solely responsable for the licensing proceedangs) will be handling the lead responsibility with respect to these technical m at ters." The Board went on to discuss why, notwith.
standing the private relationships between P5I and Wabash Valley, the two had to be co. applicants."
8 The procedural requirement of the NRC to identif y all minority owners of a nuclear generating plant as dj facto co-applicants as not a requirement that suc*n owners have counsel representing them. or that they have any right to repre.
sentation, or to participate, in the licensing proceedings, especially where such 6.
minority owners have contracted away any right to be represented or to participate in such proceedings.
IV.
Beyond any peradventure. Defeidants have contracted away any right they may have had to control or separately to appear (by counsel or otherwise) in the licensing proceedings. The Joint Ownership Agreemen' unequivocally provides that the joint owners of Comanche Peak are not partners and that TU Electric has sole responsibility and authority for handling the licensing proceedings. Section 3.02 of the Joint Ownership Agreement estaelishes that the joint owners of Comanche Peak are mere co. tenants and that no " association, joint venture. trust or partnership" among them exists. Section 3.02 goes on to provide that: "Any apparent intent to create by this Agreement, or by any grant, lease, or license related hereto an association, joint venture. trust. or partnership or to impose on any Party trust or partnership rights or obligations is expressly negated." Shile expressly negating any trust or partnership undertakings, the Joint Ownership Agreement (Section 3.04) designates the Proiect Manager (formerly Texas Utilities Generating Company. now TU Electric) as the entity solely responsible for, inter a3. the licensing of Comanche Peak:
" Accordingly, the Protect Manager, as agent f or the Parties.
af ter giving due consideration to any recommendations and suggestions of the Owners Committee, and in accordance with the aforementioned standards and guidelar.es, shall have sole responsibility for. and is fully authorized to act for the Parties with respect to the licensing . . . of the Protect . .
Ths responsibility of TU Electric for the licensing of Comanche Pesk is confirmed in Section 5.01 of the Joint Ownership Agreement:
"The Protect Manager, acting as agent for the Parties, shall take whatever action is necessary or appropriate to seen and obtain all licenses. permits, and other rights and regulatory j approvals necessary or appropriate to the construction and operation of the Project and to the use of the Fuel."
The above-quoted provisions of the Joint O wnership Agreement plainly l establish that TU Electric has sole responsibility for the licensing effort and that Defendants have contracted away any rignt to be represented by counsel or j participate in the licensing proceedings. TU Electric, pursuant to these con.
tractual obligations, retained WF5&W and other lawfirms who have appeared in e
support of the licensing of Comanche Peak to represent it in discharging its contractual obligation for such licensing. All such lawisrms have been strictly accountable solely to TU Electric, have taken their instructions solely from TU Electric. and have never undertaken to render legal advice to Defendants. None of
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o such lawlirms have or have had an attorney / client relationship with Defendants.
Quite to the contrary, the only attorney / client relationship that any of these law.
firms have had with respect to tne licensing of Comanche Peak has been with the lead applicants at the NRC. TU Electric or its predecessor in interest. Texas Utilities Generating Company."
V.
It is axiomatic that an attorney / client relationship is one of principal and agent. Texas Employers Insurance Ass'n v. Wermske.162 Tex. 540, 349 5.W.2d 90 93 (1968): Dow Chemical Company v. Benton.133 Tex. 477. 357 5.W.2d 563. 568 (1962): City of San Antonio v. Aguilar. 670 5.W.2d 681. 683 (Tex. App. . San Antonio 1984 writ re!'d n.r.e.); and Portnow v. Berg 393 5.W.2d 843. 34 3 (Tex.Civ. App. .
Houston 1st Dist.1980. no writ). In Wermske, the Supreme Court held:
"The general rule is that the relationship of attorney and client is one of agency. Under this rule, the omissions. as well as the commissions, of an attorney are to be regarded as the acts of the client whom he represents: and his neglect is equivalent to the neglect of the citent himself."
It is likewise axiomatic that one of the essential ancidents of such a relationship is the authority of the principal (Client) to control and direct the activities of the l agent (attorney). West v. Touchstone. 620 5.W.2d 687. 690 (Tex.Civ. App. . Dallas 1981. writ ret'd n.r.e.) and Vahlsant Christina Corp. v. Ryman Well Sarvice, Inc.,
312 5.W.2d 803. 812 (Tex.Civ. App. . Corpus Christa 1974, writ rel'd n.r.e.). In West, the Da!!as Court held:
"An agent is one who consents to act on behalf of and I subi ect to the control of another, the principal, who has
- manifested consent that the agent tha!! so act."
Not only is it undisputed that WF5&W takes its instructions solely from its single client in the licensing proceedings. TU Electric, and would properly decline to take instructions from Def endants or Defendants' own separate counsel-but the above.
quoted provisions of the Joint Ownership Agreement clearly dispel ey notion that Defendants have any authority to control, direct. or instruct WF5&W in *F5&W's l
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It is common to find a single law firm appearing at the direction of a project manager or lead applicant in multa. owner licensing hearings. See_, eg .
Arizona public Service Company, et al. (Palo Verde Nuclear Generating .
I 5tation. Units 4. 2 and 3). LBP.16 21. 3 NRC 662 (1976): Public Service l l
Electric and Gas Company and Atlantic City Electric Com an (Hope Creen I 8
Generating Station. Units 6 and 2 ). LBP 77 21. ) NR 6* (1977): 6 ladelphia Electric Company, et al. (Peach Bottom Atomic Power Station.
Units 2 and J). L5P.II.62. 6 NRC 680 (1977): Puelic Service Company of New Hampshire, et al, (Seabrook Station. Units 1 and 2). LSP.77.63. 6 NRC 846 l (1977): Duquesne Light Company. et al. (Beaver Valley Power Station. IJnit l No.1). LBP 18 46, 7 NRC all (1978): Metropohtan Edison Company at st.
i (Three Wie Island Nuclear Station. Unit No. 4). LBP.83 4). 21 NRC 4%9 l (1983): Cleveland Electric fituminating Company, et al. (Perry Nuclear Power Plant, t) nits 1 and 2). LBP-8).)). 22 NRC 314 (1953).
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0 representation of TU Electric in the licensing proceedings, it simply cannot be said that an attorney / client relationship exists or has ever existed between WF5&W and Defendants.
VI.
One of the fundamental incidents of an attorney. client relationship is the absolute right of the client to discharge his attorneys, even without cause. Hume
- v. *uchi. !!9 5.W.2d 905. 906 907 (Tex.Civ. App. . San Antonio 1938, writ ref'd) and Bray v. Squires. 702 5.W.2d 266. 272 (Tex. App. . Houston 1st Dist.1983. no writ).
In Br_al, a the Court held:
"A client has the absolute right to discharge an attorney at any time. with or without cause, see Hume v. :"uchi. !!9 l
5.W.2d 905, 907 (Tex.Civ. App. . San Antonio 1938, writ ref'd), and in the absence of some vested interest in the res.
l the discharged attorney has no further rights in the matter."
No one could seriously contend that Defendants have the right to discharge WF5&W in the licensing proceedings. Why? Because no attorney / client relationship exists between WF5&W and Defendants - the only attorney /clsent relationship being between WF5&W and TU Electric. It is TU Electric alone that has the respon.
l sibility and right to participate in the licensing proceedings under the Joint Ownership Agreement and it is TU Electric alone teat has selected and retained WF5&W to represent it in such licensing proceedings.
Vi!.
The attorney / client relationship is one of trust and confidences. As held by l the Supreme Court in West v. %lito. 363 5.W.2d 260. 245 (Ten.1973):
"It has been stated that the purpose of the attorney / client privilege is to promote the unrestrained communication and contact between an attorney and client in 411 matters in which the attorney's professional advice or services are sought, without fear that these confidential communications will be disclosed by the attorney, voluntarily or involun.
tarily. in any legal proceeding."
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Def endants have fully known and appreciated the undisputed f act of WF5&W's long.
( standing attorney / client relationship with TU Electric. Its predecessors and af.
filiates. Defendants have consistently dealt with WF5&W througi Def endants' own i
j separate consel, always recognizing WF5&W's undivided loyalty to TU Electric -
and have done so in many adversarial contexts including settlement negotiations of the very claims that are the subject matter of the 1stigation pending before this l
' Court. At no time have Defendants imposed trust or confidences in WF5&W as i
' l their attorneys or otherwise. At no time have Defendants shared any secrets or confidential information with WF5&W or could have reasonably believed that WF5&W would withhold any information from its long. standing client. TU Electric.
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indeed. in the very licensing proceedings in which Def endants claim to have an l
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attorney /citent relationship with WFMW. Defendants sought and obtained a protective order to assure that certain of Defendants' documents produced in discovery would not be disclosed to WFMW. This is the very antithesis of an attorney / client relationship or the appearance of an attorney / client relationship.
Moreover, any and all doubt that may have existed before has clearly oeen removed by WFMW's statements to this Court and by the February 19.1987 letter to the licensing judges (Eshibit A) and it is beyond question that WFMW are not now Defendants' attorneys. Because Defendants have known of 4FM W's long.
standing fiduciary relationship with TU Electric f rom the very inception, and they necessarily knew that any information given to 4FMW would certainly be conveyed to WFMW's pri rit. y client. TU Electric, and not held confidential from TU Electric there can no longer be any ground for disqualification.' Allegaert v.
Perot. 363 F.2d 266 (2nd Cir.1977): Meyerland Community improvement Assx. v.
Temple 700 5.W.2d 263 (Tex. App. . Houston.1st Dist.1983. *rit ret'd n.r.e.): 7 A C.J.5. Attorne y and Client. Section 160. p. 2311 Williamsburg Was Museum inc. v.
Historic Figures, Inc., 501 F.Supp. 326 (D.C.C. 1980) aff'd sub nom.. souvenir Center v. Historie Firures. Inc., 728 F.2d 303 (D.C.Cir.1986), cert. den. 669 U.S.
8251 and Sun Studs Inc. v. Applied Theory Associates, Inc., 772 F.2d 1537 (Fed. Cir.
1985). In Allersert, for example, the Court held:
". . . ( A)n attorney may be disqualified pursuant to Canon 4 if he has accepted employment adverse to the interests of a former claent on a matter substantaally related to the prior litigation. Once the substantial relationship is established.
the court need not inquire whether the attorney in f act received confidential information, because the receipt of such information will be presumed . . IB)efore the substantial relationship test is even implicated it must be snown that tne attorney was in a position wnere he could have received information which his former client might reasonaoly have assumed the attorney would withnoid f rom his present client . . .. Because 4alston necessarily anew that information given to Well Gotshal and Leva. Hawes would certaanly be conveyed to their primary clients in view of the realignment agreement, the substantial relationship test is inappos4te. Neither Walston nor anyone connected with it could have thouant tnat the 4eil. Gottnal and Leva.
Hawes f arms were representing Walston without appellees' knowledge and approval, or that any information riven to the lawfirms conceivably would have been head confidential f rom tne primary clients of the firm." (Empnasis added.)
VOI.
s It is fundamental that a client is bound by the actions of his attorney within the scope of the attorney's retainer. Tenas Employers Insurance Ass'n v. Wermske.
162 Ten. 360. 369 5.W.2d 90, 93 (1%I): Thomson v. Norton 606 5.W.2d 673. 478 5
Of course, the record undisputedly shows that Defendants imparted abso.
lutely no confidences or secrets to *FMW and would not have done so under any circumstances.
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(Tex.Civ. App. .Da!!as 1980, no writ); National Cattle Loan Co. v. Armstrong. 8 5.W.2d 767. 769 (Tex.Civ. App. . Fort Worth 1928. writ re!'d): Mohnar v. plains Ins.
3 660 5.W.2d 145, 850 (Tex. App. . Amarillo, no writ); and Portnow v. Bern 393 C
5.W.2d 843, 845 846 (Tex.Civ. App. . Houston. Ist D. s t .. 1980, no writ). In Thomson, the Dallas Court held:
"The rule is well settled that a party cannot excuse f ailure to use diligence in the conduct of litigation by asserting reliance on his own counsel because he is responsible for his counsel's actions."
Defendants' pleadings in this case specifically complain and seek camages from TU Electric on account of an alleged mishandling of the licensing prxeedings:
"By their acts and omissions as set forth in paragraphs 17.
- 40. Cross Defendants have breached their fiduciary duty to . . . obtain licenses for the Project, to perform all other obligations under the Agreement in a workmanlike manner, and to exercise reasonable care, skill, and attention."(p. 21 Brazos' First Amended Counterciaim)
" Cross. Defendants' conduct as alleged in paragraphs 21 40 constitutes gross negligence of their duties with regard to the . . . licensing of the Project." (p. 29. Brazos' First Amended Counterciaim)
"Under the JOA, TUEC. as Project Manager, had the duty to take such action as is necessary or appropriate to obtain an operating license. including a duty to furnish Tex.La and TMP A with counsel before the NRC upon which Tex La and TMPA can rely for ef fective, confidental, and proper legal advice and representation. TUEC has f ailed to take such actton. Such f ailure constitutes a material breach of the JO A.* (p. 16. First Amended Counterclaim and Original Cross. Claim of Tex La and TMPA)
Defendants have judicially admitted that the lawfirms involved in the licensing proceedings, including WF5&W, are not their attorneys. If such attorneys were Defendants' attorneys. Defendants would be bound by the attorneys' actions and their claims against TU Electric in this respect wou.d have to be summarily dismissed. Defendants' pleadings are, of course, judicial admissions binding upon them, the Court, and the lury and cannot be explained away. Houston First American 54v. v. Musick. 650 5.W.2d 764. 769 (Ten.1983): M.ennesaw Lif e & Acc.
Int. Co. v. Goss. 694 5.W.2d 113.117 (Ten. App. . Houston.1st Dist., 1983. *rit ref'd n.r.e.): Hobos v. Hobbs 691 5.W.2d 13, 76 (Tez.Civ. App. . Dallas 1983. writ dism'd): De La Fuente v. Home %av. Ass'n 669 5.W.2d 137,14 5 (Ten. App. . Corpus Christi 1984, no writ): and One 198a Ford v. State. 698 5.W.2d 279, 286 (Tex. App. .
s Fort Worth 1983. no writ). In uusick, the Supreme Court heldi "The facts alleged or admitted in the live pleadings of a party are accepted as true by the court and lury and are binding on the pleader."
.I1
- l IX.
The devastating effect upon TU Electric of a disqualification of WFMW as counsel for Plaintiff in the case at bar on TU Electric's prosecution of its claims against Defendants and TU Electric's defense of the crosselaims asserted against it by Defendants is very real, given the complexity of the issues before this Court and the long time span that the pertinent f acts transpired and the f act of WFMW's intimate familiarity with TU Electric's policies and Comanche Peak. It is the potential for such an untoward effect that careful reconsideration of the Order of disqualification should be granted.
Reconsideration should also be granted since disqualification carries the stigma that the disqualified attorney has breached his sacred ttyst and professional responsibilities - a stigma that is wholly unmarranted under the undisputed record in this case and the authorities defining the nature and incidents of an attorney /
client relationship. WF%W takes its ethical responsibilities very seriously, including Ethical Consideration 313 read by the Court at the conclusion of the January 23, 1987 hearing on this matter. The applicability of that Ethical Consideration, however, presupposes an attorney / client relationship between WFMW and Defendants and, as has been demonstrated above, no such relationship exists. The undisputed evidence establishes WF%W's undivided loyalty to - and the exercise of its best independent judgment on behalf of its client. TU Electric, the only client at has in the licensing proceedings and in the case at bar.
1 X.
In the alternative and without waiving Plaintif f's prayer that the Order ;
disqualifying WFMW be overturned in its entirety. PlaintifI would show that at the very least an order should be entered modifying and/or clarif ying the previous Order entered by this Court on February 9,1987 so as to leave no doubt but that WFMW. subsequent to May I 1987, will have the right to confer, consult. and advise TU Electric's attorneys of record in this cause, regarding all f acets of this case. No valid basis exists to deprive a Plaintalf of such represer.tation. The entraordinary action of removing WF%W as sttorney of record for Plaintiff in this case, and from appearing before a lury herein, as more than sufficient to satisf y the Code of Professional Responsibility if, as Plaintif f believes is the case. the Court's Order herein was based upon the view that &FMW's representation in this case resulted in an " appearance of impropriety. The recent <,,evelopments referred to in Section I above certainly compel this minimum relief especially since at is uncontroverted that Defendants have shared no secrets of Confidences w h
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WFnW. Since it has been made abundantly clear. and it is now acknowledged by Defendants that WF%W does not represent the Defendants in NRC licensing proceedings no vahd basis exists to deprive the Plaintiff of its right to have its attorneys of record consult and conf er with
- F%W about this case. Furthermore.
it has become increasingly more apparent. over time. that the restraints placed upon Plaintiff by being deprived of its chosen counsel are estremely burdensome and harmful to Plaintif f and will result in substantial preludice to it in this cause unless rehef is granted.
WHEREFORE. PREMISE 5 CONSIDERED. TU Electric respectfully moves this Honorable Court to reconsider the Order disqualifying WFMW as its counsel herein and. upon reconsideration, to set said Order aside and perertit TU Electric to proceed in this cause with the counsel of its choosing and permit WFnW to fulfill its professional responsibilities to its long. standing client. TU Electric, or, in the alternative. to modify or clarify such order to at least allow Plaintiff's attorneys of record herein to confer and consult with and be advised by WF%W in prosecuting this action and in def ending Defendants' Claims herein.
Respectfully submitted.
JACK 50N.
- ALKER. WINSTEAD.
CANTWELL & MILLER H. Dudley Chambers l 5 tate Bar No. 07062000 l
John B. Kyle l 5 tate Bar No. 18783000 l 6000 Interfirst Plaza I 901 Main Street Dallas. Texas 73202 i (216) 933 6017 ;
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By l =_
ATTORNEY 5 F0R PLAINTIFF 1
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6 CERTIFIC ATE OF SERVICE It is hereby certified that true and correct copies of the foregoing were mailed in the United States mail, postage pre paid, certified mail, return receipt
. requested, to all attorneys of record on this. the day of _.
1987.
G l
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i h 0R3 H AM . FOR5YTH C. 5 AM PEL5 & WOOt.DRIDGE
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1 February it.1987 Peter 8. Bloch. Esquire Dr. Kenneth A. McCollom
! Administrative Judge i Chaarman
' Atomic Salety and Licensing Beard i107 West Knapp U.S. Nuclear Regulatory Commission $tallwater. Oklahoma ,14013 Wanhangton. D.C. 20333 Dr. Walter H. Jorden Elisabeth B. Johnson Admitustrative Judge Oak Ridge National Laboratory 881 West Outer Drive P. O. 80s X. Building 3500 Oak Ridge. Tennessee 37830 Oak Ridge. Tennessee 37830 Ret Teams Utilities Sectric Comoany, et al (Comanche Peak 5 team Doctric 5tation. Units I k 2)
Dechet Nos. 30.aa3. 30.aa6. and 30.aa3.CPA
Dear Administrative Judges:
The purpose of this letter is to report to the Soard certaan matters regarding the appearances of counselin the above referenced dockets.
The firm of Worsham. Forsythe. Sampels & Wooidridge has recently seen disqualified from further representaten of TU EJectric in a proceeding in a Tesas State Cowt brought by TU Uectric against the other owners of Comanche peak Steam Doctric Station. A copy of the order y that Court, with which you will understand we respectfully disagree,is attached .
I We provide this information because. in its Memorandum (Discovery of Ten.
La Documents) dated November 28. 1986, this Board (=hde finding that this matter was not relevant to the matter then before it) espressed concern about such firm's involvement in the State Court accon.
EXHIBIT A I
s Admanastrative Judges February 19.1987 Page Two As you are widoubtedly aware, the firm of Ropes & Gray has been taking an increaangly greater share of primary responsability for the conduct of these proceedings. Therefore. Ropes & Gray has, effect4ve this date, been assigned lead responsability for au licenang matters in the above referenced dockets. We request that au communications from the board, the NRC Staff, and the Intervenors relating to these dockets be directed to that firm at its Boston Office.
Since the Ropes & Gray firm has assumed lead responsibility in both dockets, the Bishop. Liberman, Cook, Purcell & Reynolds firm and Roy P. Lessy will no longer be appearing in these proceedings and have authorised me, by this letter, to withdraw their appearances. Such firms wdl continue to provide counsel and advice to TU Doctric on Ucensing matters.
As has previously been discussed before this Board, the undersigned law firm, the Grm of Ropes & Gray, and au the other atterneys who have appeared in support of the licensing of CP5g.5 have been retained by TU Doctric pursuant to its rights and duties wider the CPSES Joint Oumership Agreement to retain and direct such atterheys before the NRC in this licensing i ::Mg. This firm and its co coesel have always taket and will continue to tales their instructions in this matter from TU Doctric as sie Project Manager. Arguments and constructions which we may, wge to the heard wul be - as they have been in the past - those directed by TU Eoctric as Project Manager pursuant to its duties and responsibuities under the Joint Ownership Agreement. More specificany, the ownership Agreement pro.
vides, among other things, that:
- a. . . the Project Manager, as agent for the Parties, after giving due conanderation to any recommendations and sug.
gestions of the Owners Committee, and in accordance with the abovementioned standards and guidelines, shau have sole responsibuity for, and is [fk authertaed to act for the r
gtg h .ig's.ggg . . . of The ProtectZ Thas responsibuity of TU Uectric for the licensing of Comanche Peak is re.
confirmed in Section 3.01 of the Joint ownership Agree nent:
"The Project Manager, acting as agent for the Parties, shau take whatever actaon is necessary or appropriate to seek and obtain au ucenses, permits, and other rights and regulatory approvals necessary or appropriate to the con.
struction and operation of the Project and to the use of the Fuel."
In order to further assure TU Doctric's authority with respect to licensing and other matters. Section 11.02 of the Joint ownership Agreement provides:
e
g Administrative Judges Feoruary 19,1987 Page Three
- "The Project Manager and the Parties will cooperate with each other in all activities in connection with the Project including, without limitation, the execution and filing of applications for authorization, permits, and licenses and the execution of such other documents as may be reasonably necessary to confirm the authority of the Project Manater to act for the Parties in connection with the Parties' inierests in7heTroject . . .." (Emphasis added.)
While neither this firm nor any of the other counsel who have appeared in support of the license application has or ever had any attorney / client relationship with any CPSE5 owner other than TU Electric, nor have they undertaken, or will they undertake, to provide legal advice or counsel the other joint owners as to any matter, they, of course, will do nothing to prevent the menority owners from bringing any matter to this Board's attention which they would be required to do by law or to prevent them from appearing specia!!y at any time required to protect a purely individualinterest such as the assertion of a privilege rmning only to one of -
them individually.
Very t yours.
Robert A. Tooldridg RAW /kiv Enclosure cc: Service List 4
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s SERVICE LIST s,
Sscretary Chairman U.S. Nuclear Regulatory Comm.
Mrs. Juanita Ellis Atomic Safety and Licensing. President, CASE Washington, D.C. 20555 Appeal Board Panel ,
1426 S. Polk Street ATTN: Chief, Docketing and U.S. Nuclear Regulatory Coen. Dallas, Texas 75224 Service Section Washington, D.C. 20555 . -
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,f Patsr B. Bloch, Esq. l CIaryS.Misuno,Esq. Anthony'Z.sRoissan, Esq.
Chairman l Colleen P. Woodhead, Esq. Suite 600 Administrative Judge U.S. Nuclear Regulatory Comm. 1401 New York Avenue, N.W.
Atccic Safety and Licensing Maryland National Bank Bldg. Washington, D.C. 20005 Board . 7735 Old'Ceorgetown Road ',
U.S. Nuclear Regulatory Coas. Bethesda; Maryland 20814 Washington, D.C. 20$55 ' ,
s Dr. Walter H. Jordan Billie P , Garde, Esq. Mr. Robert D. Martin "
Administrative Judge Midwest Office Regional Administrator i 881 W. Outer Drive 3424 N. Marcos Lane Region IV r Oak Ridge, Tennessee 37830 Appleton, Wisconsin 54911 U.S. Nuclear Regulatory Comm.
SuitP1000 611 Bryan Plass Drive ~
Arlington, Texas 76011 '
s A
Dr.-Kenneth A. dcColloa '
Mr. James E. Cummins Renea Hicks, Esq.
Administrative Judge Resident Inspector Assistant Attorney General 1107 West Knapp Comanche Peak S.E.S.
Stillwater, Oklahcan 74075 Environmental Protection Div.
c/o U.S. Nuclear Regulatory P.O. Box 12548 ^ '
Commission Capitol Station - .
P.O. Box 38 Austin, Texas 78711 -
Glen Rose, Texas 76043 ' '
s Elizabeth B. Johnson Thomas G. Dignan, Jr., Esq. Nancy Williams Administrative Judge rA R.K. Gad III, Esq. Cygna Energy Services,tInc. -
Oak Ridge Nat'l Laboratory Williams S. E4geling, Esq. Suite 1000 P.O. Box X, Bldg. 3500 Kathryn Selleck, Esq. 101 California Street Oak Ridge, Tennessee 37830 topes & Gray San Francisco, CA 94111 225 Franklin Street '
Boston, MA 02110 t
Ellen Ginsberg, Esq. Robert A. Woolfridge, Esq. Mr. Lanny A. Sinkin Atoaic Safety and Licensing Worsham, Forsythe, Samples Christic Ir.stitute -
Board Panel & Wooldridge 1324 North Capitol Street U.S. Nuclear Regulatory Comm. Suite 3200 Washington, D.C.
Washington, D.C. 20555 20002 2001 Bryan Tower Dallas, Texas 75201 Chaircan Mr. W.G. Counsil ,
Atonic Safety and Licensing Executive Vice President .
Board Panel' Texas Utilities Generating Co.
U.S. Nuclear Regulatory Comm.
Cashington, D.C. 20555 '
L.B. 81 400 North Olive Street "y
s.
Dallas,. Texas 75201 ,,.,
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