ML20212P188
| ML20212P188 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 03/11/1987 |
| From: | Jablon R, Jeffrey Riley BRAZOS ELECTRIC POWER COOPERATIVE, INC., SPIEGEL & MCDIARMID |
| To: | Office of Nuclear Reactor Regulation |
| References | |
| CON-#187-2786 2.206, NUDOCS 8703160019 | |
| Download: ML20212P188 (187) | |
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PRO D. 2. UTIL FAC.. . .v. . . v. . . .-
(z. 2a) y UNITED ~ STATES OF AMERICA
' NUCLEAR REGULATORY COMMISSION BEFORE THE DIRECTOR OF NUCLEAR ~ REACTOR REGU -TONi~
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In the Matter o'f ) N ,
[Y. N 11198/d
) ' I TEXAS UTILITIES ELECTRIC ) .
COMPANY, et a1. ) #~f$[. /
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(Comanche Peak Steam Electric ) -
j Station,_ Units 1 and 2) ) m
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REQUEST FOR MODIFICATION OF LICENSES-t Brazos Electric Power Cooperative, Inc. ("Brazos")
files this request pursuant to Section 186 of the Atomic Energy Act of 1954 ("the Act") as amended, 42 U.S.C. S 2236 (1986), and the rules and regulations-issued thereunder in Title 10, Chapter I of the Code'of Federal Regulations, including specifically-10 C.F.R. SS 2.206, 50.54(e), and 50.55(c) (1986). 1/- Brazos hereby requests the Director of Nuclear Reactor Regulation to institute a "show'cause" proceeding pursuant to 10 C.F.R. S 2.202 to mo'dify the construction permits and licenses already issued and to
-impose a prospective condition to any permits and licenses subsequently issued or renewed for the Comanche Peak Steam Electric Station Units 1 and 2 (" Comanche Peak" or the
" Project"), or for such other action as may be proper.
Specifically, Brazos requests that the Nuclear Regulatory V- 1/ Brazos also specifically relies on Section 161 of the Act, 42 V' 'U.S.C._S 2201, and the provisions of the Act as a whole, 42 U.S.C. SS 2011-2296.
8703160019 870311
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(J } Commission ("NRC" or "the Commission") order permittee and license applicant Texas Utilities Electric Company
-("TU Electric")'2/ to assume co-owner / applicant Brazos' ownership interest in the Project by purchase at Brazos' net book cost, and for such other relief as may be appropriate. 3/ By this motion, Brazos seeks not to delay or interfere in the permit or licensing process. Indeed, Brazos would hope the license conditions it proposes.would resolve issues that might otherwise arise.
Introduction A situation has recently come to light with respect to the Comanche Peak Project which Brazos believes is unprecedented and which necessitates a license condition' requiring that the plant's majority owner, TU Electric, assume ownership of the 3.8 percent interest of its co-owner, Brazos, or such other relief as
- the Commission determines is appropriate. TU Electric has made material false statements to the NRC concerning Brazos and has 4
2/ On January 16, 1987, Texas Utilities Electric Company announced the change of its corporate signature from "TUEC" to "TU Electric." The corporate name has not changed. The division of TU Electric formerly known as Texas Utilities Generating Company ("TUGCO") is now called the Generating Division of TU Electric.
3/ TU Electric and Brazos both currently stand before the t Commission as permittees, licensees and applicants in various L matters relating to the jointly-owned Comanche Peak Steam Electric Station. For ease of reference, both parties will
- sometimes be referred to herein as " Applicants." Similarly, inasmuch as both construction permits and operating licenses are
- 3 known as " licenses," see 42 U.S.C. S 2235, both will sometimes be referred to herein as " licenses," and their holders' as
" licensees."
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participated in conduct which, if known at the time, would have clearly mandated prompt corrective action. These statements and actions have been directly harmful to the licensing process and to Brazos; therefore, relief from this commission is urgently needed.
At the outset, Brazos wishes to emphasize that it ~is neither Brazos' desire nor its object that the licensing of the Comanche Peak Steam Electric Station, Units 1 and 2 be blocked, impeded or impaired in any manner as a result of this motion.
Brazos does-seek to bring to the Commission's attention Brazos' concern that it can no longer rely, as it has in the past, on TU Electric and the Comanche Peak licensing counsel to provide Brazos with timely information about the Project and to represent and speak on behalf of Brazos in the proceedings before the
' Commission with respect to Comanche Peak. As is discussed more fully below, TU Electric's actions with respect to the
. representation of Brazos before the Commission impede Brazos ability to discharge its obligations to the NRC as well as impeding the NRC's ability to discharge.its statutory mandate to determine whether the owners of Comanche Peak have given the Commission reasonable assurance that the plant has been constructed soundly and therefore can be operated safely.
Because of the nature of nuclear generation, both Congress and this Commission insist that all co-owners apply for and receive an NRC license before undertaking to construct or s_-
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, ) operate a nuclear power plant. 4/ The practical import of this requirement is that every co-owner is subject to NRC jurisdiction and has obligations running directly to the NRC and.to the public in furtherance of the objectives of owner accountability and plant safety. Thus, for example, all applicants for permits to-construct or licenses to operate nuclear power plants must provide the NRC information about their financial qualifications and character to receive an NRC license. Atomic Energy Act, S 182, 42 U.S.C. S 2232(a). See Coalition For The Environment v.
Nuclear Regulatory Commission, 795 F.2d 168, 170, 176 (D.C. Cir.
1986) (at both permit and operating license stages, " applicants are required to provide the Commission with the information necessary to demonstrate their fitness to meet Commission requirements," including financial qualification and " management integrity").
Furthermore, all licensees have indepenc!ent obligations to report information when they have knowledge that the public safety might be affected. Atomic Energy Act, S 206, 42 U.S.C.
S 5846(a). Of course, in the case of minority interest owners of a jointly owned nuclear plant, much of their reporting i
responsibility is undertaken by the majority interest owner or owners under a joint ownership agreement. But private contractual arrangements between joint owners do not relieve the minority owners of their independent responsibility as NRC I
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4/ Atomic Energy Act, SS 101, 103, 42 U.S.C. SS 2131, 2133; Public Service Comoany of Indiana, ALAB-459, 7 N.R.C. 179 (1978).
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l permittees, licensees, and applicants to be informed of, and to fulfill, their reporting obligations to this Commission. Nor do such private contractual arrangements bind, or in any way diminish the authority of, the Commission over the parties before it, especially if those arrangements would restrict those parties' communication to the Commission of information regarding the safety'and compliance of a nuclear power plant under investigation. In such a situation, the Commission may pierce through the contractual arrangements of the private parties and order appropriate relief, placing responsibility where it properly lies.
In the case of the Comanche Peak Steam Electric Station, the 1979 Joint Ownership Agreement ("the JOA") made Texas Utilities Generating Company ("TUGCO") the minority owners' agent for construction and licensing. TU Electric succeeded TUGCO in this capacity in 1984 in the wake of a corporate reorganization.
That same reorganization resulted in TU Electric's obtaining ownership of over 87% of Comanche Peak from other affiliated corporations. 5/ Thus, as Project Manager as well as majority owner of the plant, TU Electric is contractually responsible for
! licensing; but it is required to carry out its obligations as i
fiduciary for all owners. Subsequent to the issuance of appropriate construction permit amendments and license amendments l
l to reflect Brazos' (and the other minority owners') participation i
5/ For the sake of readability, references to TU Electric herein
[NN_,) include TU Electric's predecessors in interest.
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f\, ,/. in the Project, lawfirmshire{byTUElectric,pursuanttoits contractual obligation to act for all of the parties, undertook the representation of all co-owners before this Commission in all legal proceedings relating to comanche Peak; this representation included sponsoring witnesses, taking appeals, seeking construction permit extensions, responding to discovery requests and-generally purporting to state all owners' positions on '
various matters.
As developed more fully below, the law firms hired to
, perform these functions have specifically and repeatedly informed the Commission and its Boards that they represented all Comanche Peak'co-owners, by means of pleadings signed on behalf of all r
applicants as " Counsel for Applicants" or "AttoSneys for Applicants," by sworn affidavits indicating that.they spoke for all owners, and by responding to a direct Atomic Safety and Licensing Board inquiry on whether they in fact represented all o s-co-owners. Thus, the Commission, its Bohrds, and Brazos itself-U were led to believe that through these law firms, Brazos had attorney representation before this Commission such that if matters arose where Brazos had obligations or interests separate from TU Electric's, Brazos' separate obligations would be 1
( fulfilled and its positions communicated to the appropriate body.
The criterion of whether or not such obligations or interests
- coincided or diverged from TU Electric's obligations or interests was never made a condition of such attorney representation.
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(v ) Now, despite the submission of signed statements of counsel and affidavits attesting to the joint representation of the Comanche Peak co-owners, it has become apparent that the Project's attorneys of record have not, in fact, spoken for all applicants. TU' Electric has filed various pleadings in the District Court for the 14th Judicial District of Texas in Dallas, Dallas County, Texas, in connection with litigation initiated by TU Electric (referred to herein as the " Texas state court" litigation), 6/ which pleadings state that attorneys purportedly retained to appear for all Comanche Peak owners before the NRC do not now represent, and never have represented, Brazos in any traditionally recognizable attorney-client relationship. As a result, statements made to the Commission and positions taken "on behalf of" all owners apparently have never been formulated in consideration of Brazos' obligations to the Commission, or in consideration of Brazos' interests whatsoever. 7/ To the contrary, Brazos' interests and.the licensing process may have been damaged by statements and positions taken by " Counsel for Applicants." Although all co-owners may have a common interest in constructing a safe and licensable plant, the manner in which the majority owner seeks a license and the nature of positions 6/ Texas Utilities Electric Company v. Tex-La Electric Cooperative of Texas, Inc., Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc., Cause No. 86-6809, 14th Judicial District Court, Dallas County, Texas, filed May 29, 1986.
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7/ See, e.g., Letter dated September 18, 1986 from Mr. Thomas G.
Dignan, Jr. of Ropes & Gray to counsel for Brazos, Tex-La and TMPA (attached hereto as Exhibit 1).
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which are taken are not necessarily matters of joint agreement; particularly in a context in which the majority owner has sued its co-owners principally for a declaratory judgment that the plant has been const'ructed, managed and submitted for. licensing in accordance with " Prudent Utility Practice" as agreed to in the Joint Ownership Agreement, when the co-owners allege the contrary and have pled counterclaims so asserting.
This is more than just an intramural squabble over contract rights between private parties. Although this situation creates real and pressing problems for Brazos both in the Texas state court litigation and in its relations with Comanche Peak's majority owner, on whom, if it remains in the Project, Brazos must depend for accurate and timely information about the plant, the problem posed for the NRC and for the public is ultimately of greater significance. Brazos believes that as a license applicant, it has an independent obligation to inform the Commission if it cannot verify and affirm the safety of the plant either independently or by relying on TU Electric. Under the Joint Ownership Agreement, Brazos had been attempting to exercise its reporting obligations through TU Electric. And, until recently, Brazos believed TU Electric was qualified to seek and obtain a license in accordance with NRC standards. However, after discovering TU Electric to be in breach of various of its obligations to Brazos under the Joint Ownership Agreement, including the use of Brazos' own licensing counsel, Worsham, Forsythe, Sampels & Wooldridge, to bring suit against Brazos (an
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action which has brought to light these attorneys' disavowal of any attorney-client relationship with Brazos), Brazos is no longer in position to obtain the information from TU Electric necessary to gain any degree of comfort or confidence in TU Electric's assurances or to reasonably assure itself, let alone the Commission, that the plant meets NRC standards, that it has been constructed soundly and therefore can be operated safely. See Houston Lighting and Power Co., (South Texas Project, Units 1 and 2), CLI-80-32, 12 N.R.C. 281, 287-288 (1980); Power Reactor Development Co. v. International Union of Electrical, Radio & Machine Workers, 367 U.S. 396, 414 (1961);
Carstens v. Nuclear Regulatory Comm'n, 742 F.2d 1546, 1557 (D.C.
Cir. 1984), cert. denied, 105 S. Ct. 2675 (1985) (courts.have long accepted the Commission's definition of its statutory mandate under Section 182 of the Act, 42 U.S.C. S 2232(a), to
" provide adequate protection to the health and safety of the public" as requiring not a risk-free environment, but a
" reasonable assurance" that the reacter could be safely operated). In light of Brazos' resulting inability to gain sufficient information to support TU Electric's assertions of plant safety, or independently to make such assertions, and in l
order for Brazos' inabilities not to delay or interfere with licensing, Brazos seeks relief in the form of license conditions from this Commission so that the NRC may pursue licensing issues with TU Electric and so that Brazos may be relieved of
( h obligations which it cannot fulfill before the NRC with respect iw ,/
to Comanche Peak.
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/ I Background Facts V
The background of this petition is as follows: Brazos is a generation and transmission rural electric cooperative, owned by i~s t twenty member cooperatives. In the 1970's, largely as a. result of license conditions imposed following the NRC's order that an antitrust review of the Comanche Peak Project be instituted, Brazos was given the opportunity to. purchase a 3.8 percent share of Comanche Peak from the Project's-majority owner, TU Electric, under the 1979 Joint' Ownership Agreement. The remaining shares of Comanche Peak are owned by Texas Municipal Power Agency ("TMPA"), which purchased a 6.2 percent share of the Project in January, 1979, and Tex-La Electric Cooperative of Texas, Inc. (" Tex-La"), which obtained a 2 1/6 percent interest in February, 1982.
Brazos, as a joint owner of Comanche Peak, is one of the holders of the construction permits and fuel-related licenses that have been issued in connection with the plant, and is one of the applicants in the operating license proceedings. Recent actions by TU Electric have breached the agency relationship established under the Joint Ownership Agreement, and the have demonstrated that the law firm of Worsham, Forsythe, Samples &
Wooldridge's ("Worsham, Forsythe's") designations of itself as the " lead attorney" for the Project and as " Counsel for Applicants," including Brazos, in proceedings before this Commission were material false statements by TU Electric to the b)
(_ Commission concerning the representation of Brazos and the other
Jx ,) co-owners in the Comanche Peak proceedings. Such material false statements, and the situation created with respect to the representation issue in these proceedings, cast doubt on the veracity of all of TU Electric's statements as they pertain to Brazos and constitute grounds for an appropriate modification of the construction permit and fuel licenses and the imposition of prospective conditions to any permits and licenses subsequently issued or_ renewed for Comanche Peak Units 1 and 2 pursuant to Section 186 of the Atomic Energy Act.
Under Paragraph 3.04 of the Joint Ownership Agreement, TU Electric, as Project Manager, is the fiduciary of the other owners, including Brazos, and has " sole responsibility for, and is fully authorized to act for the Parties with respect to the-
. licensing, design, construction, operation, maintenance . . . and decommissioning of the Project." (Emphasis added.) TU Electric, as fiduciary and " Project Manager," has used Worsham, Forsythe as legal counsel to act "for the Parties" as applicants (i.e.,
including Brazos) in all matters before the NRC relating to Comanche Peak. Worsham, Forsythe served as lead counsel for the applicants in the NRC proceedings for several years and in that capacity directed the appearance of three other law firms on behalf of the joint owners. 8/ Currently, the law firm of Ropes 8/ The other counsel are Ropes & Gray of Boston, Massachusetts; Bishop, Liberman, Cook, Purcell & Reynolds of Washington, D.C.;
and Roy Lessy, also of Washington, D.C. (The four firms named in the letter will sometimes be referred to hereinafter collectively as " licensing counsel".) See Letter dated August 28, 1986 from
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(_ - Mr. Robert A. Wooldridge (Worsham, Forsythe) to Administrative
, Judges, NRC (attached hereto as Exhibit 2).
(FOOTNOTE CONTINUED ON NEXT PAGE)
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/(_,) & Gray is.primarily responsible for.the conduct of the Comanche Peak proceedings.
Pursuant to the obligations of the JOA and the requirements of NRC rules and' regulations, TU Electric has been responsible for.providing legal. representation for all of the owners of. Comanche Peak before the NRC in all matters related to
.the Comanche Peak Project. See 10 C.F.R. S 2.713(b).(1986).
This representation 1 obligation relates back to 1978, when TU-Electric (then TUGCO) filed to amend the construction permits
'for Comanche Peak Units 1 and 2 to add the prospective'co-owners as permittees. From that time forward, Brazos became a permittee and license applicant subject to this Commission's regulatory authority. Brazos has never retained counsel to represent it as a co-owner / applicant in any of the NRC proceedings concerning Comanche Peak separate from the counsel retained by TU Electric. 9/
(FOOTNOTE CONTINUED FROM PRECEDING PAGE]
The fact that Worsham, Forsythe served as lead counsel for applicants in the NRC proceedings was pointed out by TUGCO's Division President Mr. Michael D. Spence in a memorandum distributed to the Comanche Peak Owners Committee dated January 9, 1985 (attached hereto as Exhibit 3).
By letter dated February 19, 1987 (attached hereto as Exhibit 4), Worsham, Forsythe's Mr. Robert A. Wooldridge informed the Administrative Judges of the ASLB that Worsham, Forsythe would no longer serve as lead counsel in the Comanche Peak proceedings, i
that the law firm of Ropes & Gray has assumed " lead responsibility" in both dockets, and that the Bishop, Liberman, Cook, Purcell & Reynolds firm and Roy P. Lessy have withdrawn their appearances.
t 9/ However, on November 4, 1986, counsel for Brazos sought leave l-[N_-
- to specially appear before the ASLB in the operating license
. proceedings in order to lodge a statement about the representation problem. Brazos had requested that the statement l
i (FOOTNOTE CONTINUED ON NEXT PAGE]
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1 t,v) . Instead, throughout the NRC proceedings, Brazos has believed that Worsham, Forsythe and the other licensing counsel represented Brazos and Brazos has relied on Worsham, Forsythe and the other licensing counsel for such representation before the NRC. See Affidavit of Brazos' Assistant General Manager, J.D. Copeland (attached hereto as Exhibit 5).
Furthermore, under the JOA, each co-owner of Comanche Peak is obligated to pay its percentage share of the costs of construction, which have included legal fees. 10/ TU Electric, in its response to Brazos' requests for admission in the Texas state court litigation, as described more fully below, has admitted that the costs of construction as defined in the JOA include more than S700,000 for legal services performed by licensing counsel. 11/ Accordingly, a substantial part of the fees collected by Worsham, Forsythe for its efforts in connection with the licensing of the Project has been paid by Brazos.
(FOOTNOTE CONTINUED FROM PRECEDING PAGE]
, be included in a pleading being filed by the law firm of Ropes &
Gray, but Ropes & Gray declined to do so following consultation with TU Electric. In addition, Brazos has appeared by separate counsel in antitrust review proceedings initiated by the Commission in 1986. TU Electric had specifically requested-that Brazos respond independently to these NRC inquiries.
10/ Paragraph 1.03 of the JOA defines costs of construction to include "all direct and indirect costs and expenses reasonably incurred by or on behalf of the Parties with respect to the Project that are properly chargeable under the Uniform System of Accounts to the study, acquisition, design, engineering, licensing, installation, and construction of the Project."
11/ " Plaintiff's Response To Requests For Admission," filed
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January 5, 198', Cause No. 86-6809 (attached hereto as Exhibit 6).
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( )' While continuing to represent jointly the interests of v-the Comanche Peak co-owners before the NRC, Worsham, Forsythe instituted the aforementioned action on behalf of TU Electric against.Brazos and the other co-owner / applicants'in the State of~
Texas, 14th District Court of Dallas County, Texas.
TU Electric's Original Petition 12/ sought a declaratory judgment under SS 37.001 et sea. of the Texas Civil Practices and-Remedies Code concerning TU Electric's performance of its obligations under the Joint Ownership Agreement and its alleged rights as against its co-owners. Subsequently, after Brazos filed counterclaims against TU Electric, TU Electric amended its Original Petition to. include breach of contract claims against Brazos. Thus, Brazos found itself being sued by its co-owner and agent, TU Electric, in a Texas state court action filed by the-Comanche Peak Project's and Brazos' own lead licensing counsel concerning the subject of the prior and continuing joint representation--the Comanche Peak Project.
In response to the intolerable conflict of interest i
created by TU Electric's action in using Comanche Peak's lead licensing counsel to institute suit against its co-owners, Brazos (together with Tex-La and TMPA) raised the issue of attorney a
disqualification with Worsham, Forsythe and TU Electric. On October 6, 1986, TU Electric filed a " Motion For Protective Order And Other Relief" essentially seeking a declaration by the court that Worsham, Forsythe's actions raised no ethical problems v 12/ Attached hereto as Exhibit 7.
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because "no attorney-client relationship exists between WFSW and the defendants [Brazos]." (Motion, attached hereto as Exhibit 8, at 3.) TU Electric further asserted that "[a]ny appearance by WFSW before the NRC or in any related proceeding was for the account of TUEC, and the defendan[t] [Brazos'] formal designation as 'applican[t]' before the NRC was merely a procedural requirement by virtue of [its] status as 'owne[r].'" (Id.)
On November 26, 1986, Brazos, Tex-La and TMPA jointly brought a " Motion To Disqualify Attorneys For TUEC And Response To TbEC'S Motion For Protective Order And Other Relief" relying principally on Canon 5 of the Texas Code of Professional Responsibility. 13/ TU Electric resisted the motion to disqualify, inter alia, on its asserted ground that no attorney-client relationship existed between Brazos and Worsham, Forsythe.
Each side, in support of its position, submitted various pleadings filed in the Comanche Peak NRC proceedings as well as affidavits attesting to the issue of representation.
Brazos bases this motion, in part, on the diametrically opposed representations contained in TU Electric's filings before the NRC and those representations contained in its Texas state court submissions opposing disqualification, and on TU Electric's responses to Brazos' discovery requests. TU Electric submitted affidavits and pleadings flatly denying the existence of an attorney-client relationship between Brazos and Worsham, Forsythe and other licensing co-counsel. Following an evidentiary hearing
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8 j 12/ Attached hereto as Exhibit 9.
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, and oral argument, Brazos' and the other co-owners' disqualification motion was sustained by oral order of District Court Judge John McClellan Marshall on January 23, 1987 and by written order on February 9, 1987. 14/
The positions taken and representations relied on by TU Electric in opposing Brazos' Texas state court motion to disqualify are in direct conflict with statements which TU Electric, through the Project's licensing counsel, has lodged with.this Commission. For example, in a letter responding to a telephone inquiry from Atomic Safety and Licensing Board ("ASLB")
Chairman Peter B. Bloch, Mr. Robert A. Wooldridge of Worsham, Forsythe stated:
The attorneys who have appeared on behalf of the Applicants in this case are:
Bishop, Liberman, Cook, Purcell & Reynolds Worsham, Forsythe, Samples & Wooldridge Ropes & Gray
. Roy P. Lessy Letter dated August 28, 1986 from Mr. Robert A. Wooldridge of Worsham, Forsythe to Administrative Judges, NRC (attached hereto as Exhibit '2 ) . The letter states further that "[t]hese firms have been retained by Texas Utilities Electric Company and appear in this proceeding on behalf of all of the Applicants pursuant to 14/ By Order dated February 9, 1987, Judge John McClellan Marshall held that "the firm of Worsham, Forsythe, Sampels &
Wooldridge is hereby disqualified from representing Plaintiff
{TU Electric) and its subsidiaries and its affiliated conganies in this case." Order, February 9, 1987, Texas Utilities Electric Company v. Tex-la Electric Cooperative of Texas, Inc., Texas
/ Municipal Power Agency and Brazos Electric Power Cooperative, j (m,,} Inc., Cause No. 86-6809, 14th Judicial District, District Court, Dallas County, Texas (attached hereto as Exhibit 10).
( ) a Joint Ownership Agreement among them." (Id.) In concluding, Mr. Wooldridge acknowledged that the listed " attorneys in every instance-will appear on behalf of all Applicants as has been the case in the past." (Id.) (Emphasis added.)
In addition, Mr. Wooldridge has submitted pleadings and affidavits to the NRC on behalf of all applicants. See, e.a.,
" Applicants' Supplemental Responses To Case's Interrogatories Re:
The MAC Report And Issues Raised By The MAC Report," of November 27, 1985, Docket Nos. 50-445, 50-446, 50-445-2, and 50-446-2. In his sworn affidavit attached to the pleading, dated November 27, 1985, Mr. Robert A. Wooldridge stated "upon his oath that he is attorney for Applicants," authorized to represent them in the licensing proceedings. (Affidavit, attached hereto as Exhibit 11.)
However, in the Texas state court litigation, TU Electric and the licensing counsel have taken a position directly contrary to Mr. Wooldridge's oath to the NRC. For example, in its " Reply To Defendants' Motion To Disqualify,"
TU Electric states: "There is not now and there has never been an attorney-client relationship between WFSW and (Brazos)." (Reply, 7
attached hereto as Exhibit 12, at 1.) TU Electric opportunistically asserts that the NRC requires only that all entities owning a percentage ownership in Comanche Peak "be named l as de facto applicants" (Reply at 2), and labels this a
" technical requirement *' of the NRC. ("Brief In Support Of I / '} Plaintiff's Reply To Defendants' Motion To Disqualify," attached
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hereto as Exhibit 13, at 18).
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( ,! In its response to Brazos' discovery requests (attached hereto as Exhibit 6), TU Electric admitted .that TU Electric, "as the entity solely responsible for the licensing of Comanche Peak, has employed Worsham, Forsythe, Samples & Wooldridge as one of its attorneys to make an appearance for it before the Nuclear Regulatory Commission to aid it in obtaining an operating license on behalf of the owners of Comanche Peak;" however, TU Electric denies that Worsham, Forsythe in so doing appears before the NRC "on behalf of Brazos." (' Plaintiff's Response To Requests For Admission," at 5-6.) In that same document, TU Electric denies that "any attorney / client relationship exists between Worsham, Forsythe, Smaples [ sic) & Wooldridge and Brazos," and denies that "Worsham, Forsythe acts as Brazos' attorney in some matters relating to Comanche Peak." (Response at 6.) Similarly, in TU Electric's " Reply To Defendants' Motion To Disqualify,"
(Exhibit 12) TU Electric takes the position that although Worsham, Forsythe made filings before the NRC on behalf of all owners, including Brazos, as "de facto applicants" (Reply at 2),
"there is not now and there has never been an attorney-client relationship" between Worsham, Forsythe and its co-counsel and Brazos (Reply at 1).
In its "Brief In Support Of Plaintiff's Reply To Defendants' Motion To Disqualify," (Exhibit 13) TU Electric acknowledges that under NRC rules and regulations, each of the Comanche Peak joint owners is " legally required to be a party" to
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LJ the licensing proceedings (Brief at 17), that each must be named
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(,) as an applicant for the requisite licenses and that pursuant to those requirements, " counsel employed by (TU Electric) pursuant to its responsibility under the Joint Ownership Agreement indicated on-filings that they were making such filings on behalf of all of the ' applicants.'" (Brief at 5.) However, TU Electric asserts that despite these representations to the NRC, in fact
"(n]one of the attorneys" consider, or have ever considered, that an attoracy-client relationship exists between themselves and the applicant Brazos. (Id.) In TU Electric's words, licensing counsel made "a mere technical appearance on behalf of" Brazos (Brief at 17), and "any action in the licensing proceeding on behalf of (Brazos] by WFSW is purely technical in nature" (Brief at 18).
If, as TU Electric now asserts, licensing counsel had no attorney-client relationship with Brazos, the statements contained in all of the aforementioned NRC filings that counsel employed by TU Electric appeared on behalf of " Applicants," one of which is Brazos, are necessarily false. Under 10 C.F.R.
S 2.713(b) an appearance may be made on behalf of a corporation such as Brazos only by an officer or by an attorney-at-law, and the rules governing the conduct of attorneys in Texas and the District of Columbia do not permit representation without the attendant ethical and fiduciary obligations that characterize the attorney-client relationship.
In his Affidavit submitted in opposition to
() disqualification, Worsham, Forsythe's Mr. Robert A. Wooldridge
- ) stated that he had "nevet- represented or given legal advice to
'A.%#
. . . Brazos," and that, in the two formal Notices of Appearance Mr. Wooldridge filed with the NRC concerning Comanche Peak, he had stated that he represented only the TU Electric companies, and not Brazos. (Affidavit, attached hereto as Exhibit 14, at 1-2.) 15/ Mr. Wooldridge explained that "the law firms representing TU Electric in the licensing proceedings have indicated on filings before the NRC and its Atomic Safety and Licensing Board that they were appearing for all ' applicants' since all attorneys represented TU Electric, which, by contract, was obligated to appear for all of them; neither Tex-La, Brazos, nor TMPA, however, were ever my client and there has never existed an attorney / client relationship between me or WFS&W and any of those entities." (Affidavit at 2.) Mr. Wooldridge stated further that although he realizes that "it is necessary under NRC Rules of Practice that all owners of a plant have an appearance 15/ Although Mr. Robert A. Wooldridge may have filed a formal Notice of Appearance naming only TU Electric, he has nonetheless signed pleadings and affidavits submitted to the ASLB as " Counsel for Applicants," including Brazos. See, e.g., " Applicants' Supplemental Responses To Case's Interrogatories Re: The MAC Report And Issues Raised By The MAC Report," of November 27, 1985, Docket Nos. 50-445, 50-446, 50-445-2, and 50-446-2. The
" Applicants" at this time and at all times pertinent to this motion were the four Comanche Peak joint owners: TU Electric, Brazos, TMPA and Tex-La. See, e.g., Application of Texas Utilities Generating Company, Dallas Power & Light Company, Texas Electric Service Company, Texas Power & Light company, Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc., Tex-La Electric Cooperative of Texas, Inc. for Operating Licenses (Class 103) for the Comanche Peak Steam Electric Station, Units 1 and 2, Amendment 1, November 23, 1981, Docket 7-s
/ Nos. 50-445 and 50-446. Moreover, until February 19, 1987,
(_,}/ Mr. Wooldridge had never informed the NRC that he did not represent Brazos as an attorney.
/N
(., before the NRC for licensing purposes," it had been his j
understanding that "such appearance" was accomplished through the licensing counsel appearing as attorneys solely on TU Electric's behalf. (Affidavit at 3.) Other Worsham, Forsythe attorneys filed affidavits to similar effect.
In addition, TU Electric submitted the affidavit of Mr. Nicholas S. Reynolds, a partner in.the law firm of Bishop, Liberman, Cook, Purcell & Reynolds (formerly "Debevoise &
Liberman") who has appeared before the NRC in connection with the licensing of Comanche Peak since 1974. In his affidavit, Mr. Reynolds explained that in 1979, he filed a formal Notice of Appearance in the licensing proceeding for Comanche Peak "on behalf of Texas Utilities Generating Company, et al., the et al.
referring to the above Applicants, DP&L, TP&L and TESCO and not the minority owners who were later added to the Operating License Application to reflect their respective ownership interests in Comanche Peak." (Affidavit, attached hereto as Exhibit 15, at 3.) Mr. Reynolds stated further: "I have neither represented nor given advic'e to Brazos, TMPA or Tex-La either in the above proceeding or in any other proceeding before a court of law or government agency. I have never . . . filed a Notice of Appearance stating or otherwise represented that I served as counsel to those entities." (Affidavit at 3.) 16/
16/ Although Ropes & Gray did not submit an affidavit supporting TU Electric's Texas state court argument, it has repeatedly
/~' advised Brazos that its position was consistent with that of the
( ,)h other licensing counsel. See Letter dated September 18, 1986 from Mr. Thomas G. Dignan, Jr. of Ropes & Gray to counsel for (FOOTNOTE CONTINUED ON NEXT PAGE)
) In sum, in the Texas state court litigation, TU Electric acknowledged that worsham, Forsythe and its co-counsel have
" appeared" on behalf of Brazos before the NRC, but denied that they have thereby " represented" Brazos in the capacity of its attorneys; and TU Electric has denied that the " appearances" by the law firms hired pursuant to the Comanche Peak JOA for representation before the NRC have thereby established an attorney-client relationship with Brazos which is accompanied by the professional and ethical obligations traditionally attendant upon such a relationship.
Thus, while TU Electric repeatedly affirmed to the NRC that the Comanche Peak licensing counsel appeared on behalf of
[ FOOTNOTE CONTINUED FROM PRECEDING PAGE]
Brazos, Tex-La and TMPA; Letter dated December 9, 1986 from Mr. William S. Eggeling of Ropes & Gray to counsel for Brazos; Letter dated December 19, 1986 from Mr. Thomas G. Dignan, Jr. of Ropes & Gray to counsel for Tex-La; and Letter dated January 12, 1987 from Mr. William S. Eggeling of Ropes & Gray to counsel for Brazos (attached hereto as Exhibits 1, 16, 17, and 18).
Furthermore, by Letter dated February 20, 1987, Mr. Thomas G.
Dignan, Jr. of Ropes & Gray advised counsel for Brazos that the position of Ropes & Gray on the representation issue is as follows:
So far as we are aware, moreover, no one in this firm or any lawyer from any of the other firms who have appeared in this (NRC licensing) proceeding in support of the applications have consulted with or were ever consulted by, any of the minority owners.
Since taking this matter on, no one in these firms, so far as we are aware, has agreed to undertake any attorney / client relationship with any of the minority owners, nor have they given any legal advice to any of the minority
/,] owners . . . .
V (Letter, attached herein as Exhibit 19, at 2-3.)
r~N.
y j) all " Applicants," TU Electric now takes the position that this representation consisted of only the appearance of an
" appearance," and that counsel did not in reality " represent" Brazos or act as its attorneys in the NRC proceedings. These representations, contained in signed pleadings and sworn affidavits in the Texas state court litigation, are directly contrary to TU Electric's response to the ASLB; therefore, TU Electric's August 28, 1986 response constitutes a material false statement in the licensing application proceeding. The representations are also directly contrary to the statements of attorney representation contained in the many appearances and filings by " Attorneys for Applicants" in the Comanche Peak dockets, thus those filings also constitute material false statements.
Additionally, TU Electric's position in the Texas state court proceedings that co-owners of a nuclear power plant are merely "de facto" applicants with no need for attorney representation before, and with no attendant responsibilities to, the Commission with respect to licensing is contrary to commission precedent and policy on this matter. See Public Service Company of Indiana, ALAB-459, 7 N.R.C. 179 (1978);
Cleveland Electric Illuminating Co., DD-83-17, 18 N.R.C. 1289 (1983).
Moreover, TU Electric's positions are also directly contrary to the ASLB's recent determination that "for the purposes of this litigation, Applicants are one party," and that
A p.
k ,) it " appears that-[Brazos) is a client of the law firm, which was paid by its client to acquire expertise and knowledge that now appears to be available for use in state court against it."
(Texas Utilities Electric Company, et al., (Comanche Peak Steam Electric Station, Units 1 and 2), ASLBP 'h- 79-430-06 OL, (Memorandum and Order), November 28, 1981 attached hereto as Exhibit 21, at 3-4.) ll/ Remarkably, in-his most recent response to the concern expressed by the ASLB in its November 28, 1986 Memorandum, Worsham, Forsythe's Mr. Robert A. Wooldridge continues to employ the Alice-in-Wonderland-like distinction between an " appearance" by attorneys-at-law on behalf of a party.
(licensing counsels' relationship to Brazos) and the existence of an " attorney / client relationship" (licensing counsels' relationship with TU Electric). Mr. Wooldridge stated:
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 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.
17/ Although the November 28, 1986 Memorandum and Order refers
[\s /) only to Tex-La, the two joint owners stand in the same position vis-a-vis the representation issue.
f^N
- l.
w ,'
) Exhibit 4, Letter dated February 19, 1987 from Mr. Robert A.
Wooldridge of Worsham, Forsythe to Administrative Judges, NRC, at
- 3. This misleading use of language has already affected the pace and course of the licensing proceedings 18/ and figures largely among the factors causing Brazos to request relief from this Commission.
Clearly, TU Electric and the Comanche Peak Project's licensing counsel now assert directly to the Commission that, contrary to their prior oaths, affirmations and representations, they do not in fact appear as attorneys on behalf of or provide legal representation for Brazos before the NRC when they sign pleadings'and affidavits as " Counsel for Applicants" or
" Attorneys for Applicants" in connection with Comanche Peak or any other matter. The import of the foregoing for Brazos and the Commission is that all prior representations made in Brazos' name by TU Electric are called into question by the fact that TU Electric has made material false statements to the Commission on an important aspect of the licensing application procedure.
In its November 28, 1986 Memorandum and Order, the Atomic Safety and Licensing Board noted that the representation situation "may require our action in the future." (Id. at 4.) By this motion, Brazos seeks the Commission's action on this matter.
18/ See Texas Utilities Electric Co., LBP-85-39, 22 N.R.C. 755,
[ 758 (1985), petition for directed certification denied mem. (ALAB Nov. 8, 1985).
26 -
! The NRC's Statutory Authority The NRC's authority to grant the relief Brazos seeks is drawn from the Atomic Energy Act of 1954, as amended, 42 U.S.C.
SS 2011-2296. See also 10 C.F.R. Part 2, Appendix C, Subpart IIA (1986). Section 161 of the Act, 42 U.S.C. S 2201, gives the Commission broad administrative powers to exercise in the performance of its functions, including the authority to
" prescribe such regulations or orders as it may deem necessary
. . . to govern any activity authorized pursuant to this chapter." 42 U.S.C. 5 2201(i)(3). Section 186(a) of the Act, 42 U.S.C. S 2236, authorizes the NRC to revoke or modify any license under certain circumstances (e.g., for material false statements, in response to conditions that would have warranted refusal of a license on an original application and for violation of NRC regulations). The express revocation power has been held to include the lesser power to suspend or modify a license. See, e.g., Virginia Electric and Power Co., (North Anna Power Station, Units 1 and 2), LBP-75-54, 2 N.R.C. 498, 534-35, 538-39 (1975),
modified, ALAB-324, 3 N.R.C. 347, 390, aff'd in relevant part, CLI-76-22, 4 N.R.C. 480, 482, 492 n.12 (1976), aff'd, 571 F.2d 1289 (4th Cir. 1978).
One regulation implementing Section 186 of the Act is 10 C.F.R. S 50.54(e). This regulation provides that every NRC license 19/ is subject to " revocation, suspension, modification, O
(_,/ 19/ This regulation is made applicable to construction permits through 10 C.F.R. S 50.55(c).
7 sy
( /- or amendment for cause as provided in'the act and regulations."
(Emphasis added.) This language provides the substantive foundation for 10 C.F.R. S 2.206, permitting "any person" to invoke the "show cause" procedures in 10 C F.R. S 2.202.
Four distinct categories of violations can trigger the Commission's Section 186(a) revocation, suspension or modification powers. 20/ These categories are reiterated in 10 C.F.R. S 50.100, which specifies that the fourth, broad category includes " violation of, or failure to observe, any of the terms and provisions of the act, regulations, license, permit, or order of the Commission." Thus, the NRC can invoke its Section 186 powers of revocation or modification in response to a S 2.202 "show cause" proceeding which reveals (1) material-false statements, (2) conditions that would have warranted refusal to grant a license on an original application, (3) a licensee's failure to build or operate a facility in accordance with the 20/ As set forth in that section:
Any license may be revoked for (1) any material false statement in the application or any statement of fact required under section 2232 of this title, or (2) because of conditions revealed by such application or statement of fact or any report, record, or inspection or other means which would warrant the Commission to refuse to grant a license on an original application, or (3] for failure to construct or operate a facility in accordance with the terms of the construction permit or license or the technical specifications in the application, or (4) for violation of, or for failure to observe any of the terms and
(~ provisions of this chapter or of any regulation of the Commission.
(
1, .
, ,, ,- ...-,,-,.--,enn - - - , n._,-,----.,--,--e, . . - .,w..-.-~~------a, ,r .
,e-.- - ,,- ,,m>- , -
f( )v) terms of a permit or license, and (4) violations of any NRC rules, regulations or orders.
In Virginia Electric and Power Company v. United States Nuclear Regulatory Commission, 571 F.2d 1289, 1291 (4th Cir.
1978) the Commission's " stringent interpretation" of its authority under Section 186 and its decision to impose civil penalties on the applicant for making seven material false statements to the Commission were affirmed by the Fourth Circuit Court of Appeals. The Court quoted with approval from the following language in the Commission's order:
(K)nowledge of falsity is not necessary for liability under Section 186 of the Atomic Energy Act, . . . and materiality should be judged by whether a reasonable staff member should consider the information in question in doing his job.
We think . . . that " material false statement" may appropriately be read to insure that the Commission has access to true and full information so that it can perform its job Id. See Virginia Electric and Power Company (North Anna Power Station, Units 1 and 2), CLI-76-22, 4 N.R.C. 480, 486, 489 (1976).
I In that case, the Court affirmed the Commission's determination that the false statements were material despite the
, fact that the conditions which VEPCO had failed to reveal in its application for construction permits ultimately had no bearing on the safety of the site selected. Thus, a statement may be deemed
("\
t 4
(._ / '" material" for the purposes of Section 186 even though it does not necessarily lead to an erroneous determination on the part of the Commission. The Court stated that such a stringent interpretation of Section 186 was consistent with both "the legislative history and with the Commission's statutory mandate to assure that the utilization of nuclear material 'will provide adequate protection to the health and safety of the public.' 42 U.S.C. S 2232(a)." 571 F.2d at 1291. See also Houston Lighting and Power Co., 12 N.R.C. at 291 n.4 (the Commission cannot ignore false statements in documents submitted to it; in addition to the Commission's Section 186 authority to revoke licenses for material false statements, " initial license applications or renewal applications may also be denied on this ground, certainly if the falsehoods were intentional, FCC v. WOKO, 329 U.S. 223 (1946), and perhaps even if they were made only with disregard for the truth. Leflore Broadcasting Company v. FCC, (636 F.2d 454 (D.C. Cir. 1980)); Virginia Electric and Power Company v.
NRC, 571 F.2d 1289 (4th Cir. 1978)").
Brazos submits that TU Electric's material misrepresentations with respect to licensing counsels' representation of Brazos as a co-owner / applicant in proceedings before the NRC concerning Comanche Peak constitute intentional material false statements under Section 186 of the Atomic Energy Act and thus more than a " sufficient grour.d" under 10 C.F.R.
S 2.202 for the Commission to modify the construction permit to require that TU Electric assume Brazos* interest in the Project
(
.:( j -) by purchase'at Brazos' net cost. These false representations are clearly information a'" reasonable staff member" should consider in. performing the task of evaluating the character and management integrity of ~sn NRC ' permittee, fuel licensee and operating license applicant such as TU Electric. See Atomic Energy Act, S 182, 42 U.S.C. S 2232(a); coalition For The Environment v.
Nuclear Regulatory Commission, 795 F.2d 168; see also Houston Lighting and Power Co., 12 N.R.C. at 291 (material false statements-in documents submitted to the Commission reflect upon
" character qualification" under 42 U.S.C. S 2232(a) and may form
. an independent and sufficient basis for the revocation or modification of a license or denial of a license application under Section 186(a) of the Atomic Energy Act).
Necessity For The Relief Requested As a co-owner of a nuclear power plant, co-holder of its construction permits and' fuel-related licenses, and applicant for its operating license, Brazos finds itself in the following uncomfortable and untenable situation: it has never independently undertaken to seek or secure the permits and licenses for i
comanche Peak and now it has no practical, independent way of t
knowing or obtaining information as to whether the plant should be licensed. Under the Joint Ownership Agreement, Brazos is entitled to rely and has relied on TU Electric and the Comanche i
.{ Peak licensing counsel to advise it and to act in a fiduciary capacity on its behalf, both in the construction of Comanche Peak i
(v and in proceedings before the NRC. Because of TU Electric's exclusive possession of the Project, Brazos has never been in a position to affirm independently the safety of the plant or the level of quality control and quality assurance present in the construction process. Brazos has relied, as it was led to believe it could, on TU Electric and the licensing counsel for that information and representation before the Commission. The suit brought by TU Electric against Brazos, using Worsham, Forsythe as litigation counsel, violates the agency agreement and the fiduciary relationship between the joint owners and renders Brazos unable to rely on TU Electric to affirm to the NRC the safety of the Comanche Peak units in Brazos' name or independently to affirm to the Board the safety of the Comanche Peak units, as is Brazos' responsibility.
Furthermore, in the past, Brazos' attorneys for licensing (hired by TU Electric pursuant to the JOA) have signed pleadings before the NRC on behalf of the co-owner / applicants for the Comanche Peak Project and have thus represented to the NRC that they a'ppear on behalf of, and represent, Brazos in the NRC proceedings. Now, however, TU Electric takes the position both in the Texas state court litigation and before the NRC that the licensing counsel provide only pro forma or " mere technical" representation of Brazos before the NRC (the appearance of an
" appearance") and do not act as Brazos' attorneys. Thus, all of TU Electric's pleadings and statements which were represented as
(h having been made on behalf of Brazos are suspect and questionable C'
s
. ,/m (v ) as to'their applicability to Brazos. As a result, Brazos has been placed by TU Electric in a' position of having had no actual ,
attorney representation in its capacity as joint owner of Comanche Peak before the NRC and of not now having such representation. Brazos must disavow TU Electric's self-serving statements.
In essence, TU Electric's position would seem to be that-Brazos is represented in the licensing proceeding by or through TU Electric, which in turn is represented by its own counsel.
There are two major difficulties with this position--it.is contrary to the' multitude of. pleadings that have been filed by
" Counsel for Applicants" and " Attorneys for Applicants," and it is contrary to 10 C.F.R. 5 2.713(b), which does not allow one; corporation to be represented by another corporation. ,
TU Electric's position that the licensing counsel represent only TU Electric as an applicant before the Commission is directly contrary to NRC precedent and to the NRC's regulations governing representation.
As noted above, the ASLB has already recognized that for the " purposes of this (licensing) litigation, Applicants are one party." (November 28, 1986 Memorandum and. Order at 3) Thus, by force, TU Electric's licensing counsel must jointly be Brazos' licensing counsel. Second, pursuant to 10 C.F.R. S 2.713(b),
Brazos must have representation by an attorney-at-law or by one of its officers in these proceedings. 21/ TU Electric's
(
xj 21/ No officer of Brazos has entered an appearance in these proceedings on Brazos' behalf.
assertions that licensing counsel may " appear" before the Commission in these proceedings and take actions on behalf of Brazos without also acting as Brazos' attorneys in the full sense of the word contravenes the letter and the spirit of S 2.713(b).
Section 2.713(b) specifically states that representat. ion be only by an " attorney-at-law provided the attorney is in good standing and has been admitted to practice before any Court of the United States, the District of Columbia, or the highest court of any State, territory, or possession of the United States." Clearly this requirement is imposed so that the attorney making the
" appearance" will be subject to the ethical obligations of his respective Code of Professional Responsibility. TU Electric's assertion of a class of pro forma or " technical" attorney representation of Brazos by comanche Peak licensing counsel, with no attendant attorney-client relationship and ethical obligations thereby created, stands in violation of 5 2.713(b).
In Public Service Company of Indiana, ALAB-459, 7 N.R.C.
179 (1978), the NRC's Atomic Safety and Licensing Appeal Board flatly rejected Public Service's argument that a " mere owner need not be an applicant or hold a Commission license," because Sections 101 and 103 of the Atomic Energy Act, 42 U.S.C. SS 2131 and 2133, do not forbid one to "own" a nuclear plant without a license, only to " possess" it. 7 N.R.C. at 199. After observing that the company had presented no reason why Congress would want to exempt owners of nuclear power plants from Commission ln)
%/
regulation as licensees, the ALAB stated:
i 34 -
('~,) To the contrary, it takes little to appreciate that an owner can influence the actions and attitudes of its tenants and agents without technically being in " possession" of the premises. Given the safety considerations with which Congress was primarily concerned in the Atomic Energy Act, it takes much more than bare assertion and imaginative statutory construction to convince us that those who would own a nuclear power plant do not need to apply for a license from the Commission.
7 N.R.C. at 200 (emphasis added). Additionally, the Board noted that "significant areas of the Commission's regulatory authority could be placed under a cloud by accepting Public Service's reading of the Act." Id. at 201. Thus, in Public Service company of Indiana, the Commission held that co-owners of nuclear power plants must be co-applicants for the operating license so as to bring them under the Commission's regulatory authority.
Clearly, as a joint owner of Comanche Peak, Brazos is required by the NRC to be an " applicant" for the Comanche Peak operating license in the full sense of the term, and to the same extent as TU Electric, regardless of the fact that Brazos owns a smaller percentage of the plant than TU Electric.
Moreover, oespite the fact that the licensing counsels' licensing efforts may be directed by TU Electric, any representations made to the NRC must be made on behalf of all co-owners as "the Applicants" in an operating license proceeding.
See Cleveland Electric Illuminating Co., 18 N.R.C. 1289 (the applicant, CEI, as agent for the other plant co-owners, held to have made material false statements by failing to include information concerning and on behalf of its co-owners during the
[}
V licensing review for the Perry Nuclear Power Plant) .
( ,)i-t The ASLB has taken the position that the NRC holds all applicants for an operating license for a nuclear power plant to a very high standard concerning the completeness and persuasiveness of proof supporting the application, adding that
"(ijn licensing cases, applicants are expected to master the
, ,v technical issues affecting their plant. Their mastery flows from: the availability of the sophisticated technical staff needed to build a sound nuclear plant and to defend it before the Nuclear Regulatory Commission . . . and the seriousness of their commitment to understand their plant in sufficient depth to be g
able to assure themselves, the public and their stockholders of the soundness and safety of their plant." Texas Utilities il ,
Electric Company, LBP-85-47, 22 N.R.C. 835, 836 (1985). The present adversary relationship between TU and Brazos blocks the flow of information necessary if Brazos is to be able to make or subscribe to such reasonable assurances of soundness and safety.
Moreover, TU Electric's actions with respect to representation of Brazos effectively leave Brazos without a voice in the licensing proceedings, and call into question the voice of Brazos as it has been heard through TU Electric to this time.
It is clear that under Public Service Company of Indiana, all applicants have independent obligations before the NRC to fulfill the requirements of " completeness and persuasiveness of proof," in the licensing proceedings. See Texas Utilities Electric Company, supra. It is also clear that all applicants need adequate and responsible representation of
[t j)
/ \
k ,)' counsel to fulfill these obligations. Thus, the attorneys who appear on behalf of applicants must speak equally for all applicants, not merely for the " lead applicant." Insofar as representation before the NRC is concerned, the concept of " lead" versus " minority" applicant has no significance; counsel must speak equally on behalf of all owner / applicants. See Public Service Company of Indiana, suora; Cleveland Electric Illuminating Company, supra.
It is obvious
- hat Brazos can fulfill no obligations to the Commission without appropriate representation at the NRC.
For example, Brazos must have. representation to interpret and respond to discovery requests. Further, if Brazos has discovery obligations, these must be reported to it by its licensing counsel. The problem is exacerbated by the fact that the licensing board which must rule on whether the Comanche Peak
' joint owners are entitled to an operating license has specifically criticized TU. Electric for having used language in a sense that can only be characterized as misleading. For example, on November 25, 1965, the Atomic Safety and Licensing Board issued an order in which it reprimanded the Comanche Peak Applicants for filings which repeatedly fell short of what is l
expected in licensing proceedings and raised serious questions concerning Applicants' credibility before the NRC. Texas Utilities Electric Company, 22 N.R.C. at 839 ("We expect Applicants to be forthright about what they do, the problems that
, [v ')
remain, the regulatory context, the areas of uncertainty. By i
a e, -,----------n- , - - - - - . - , - - - - . - .- -
( ,) living up to that ideal, Applicants will facilitate timely Board action. If that ideal remains elusive, we will have to be suspicious, and action on our part will be delayed or will be unfavorable.") Unfortunately, Applicants' attorneys of record before the NRC have continued, rather than cured, their less than forthright conduct as demonstrated by their Texas state court filings (appended hereto) on the representation issue and by their recent submission to the ASLB Administrative Judges on February 19, 1987. Brazos is loath to be tainted by such lack of candor.
These facts plus the many criticisms, fines and questions concerning the plant require that, as a co-owner, Brazcs be able to inquire independently into the matter to assure that statements are not being made on its behalf to which it cannot subscribe. If its attorneys of record are not its attorneys in fact (and they openly say they do not concern themselves with Brazos' interests), 22/ Brazos cannot possibly meet its obligations and thus the Commission will be hampered in fulfilling its statutory mandate.
22/ In the course of five letters directed, variously, to all comanche Peak minority owners, licensing counsel Ropes & Gray has made it clear that the firm responds solely to, and considers its ethical and other attorney obligations to run solely to, TU Electric. See Letter dated September 18, 1986 from Mr. Thomas G. Dignan, Jr. of Ropes & Gray to counsel for Brazos, Tex-La and TMPA (Exhibit 1); Letter dated December 9, 1986 from Mr. William S. Eggeling of Ropes & Gray to counsel for Brazos (Exhibit 16);
Letter dated December 19, 1986 from Mr. Thomas G. Dignan, Jr. of f-~s Ropes & Gray to counsel for Tex-La (Exhibit 17); Letter dated
( January 12, 1987 from Mr. William S. Eggeling of Ropes & Gray to
\m /)
counsel for Brazos (Exhibit 18) and Letter dated February 20, 1987 from Mr. Thomas G. Dignan, Jr. of Ropes & Gray to counsel for Brazos (Exhibit 19).
l I
j- ,
1 i
) Moreover, TU Electric has plainly signalled that if Brazos seeks to represent itself before the Commission, TU Electric will sue Brazos for alleged violation of the Joint Ownership Agreement by interfering with the NRC licensing process. In other words, TU Electric will not provide representation-for Brazos in this matter and will not permit Brazos to represent itself. While Brazos does not seek by this motion to represent itself or to undertake independently to obtain licenses for the plant, it-points out the representation dilemma as a ground for imposition of the license condition sought.
Brazos is confident that had it applied to che Commission to transfer its interest in Comanche Peak, either to TU Electric or some third party, but reported that it had already so completely delegated all authority to TU Electric that its license transfer application was a mere formality or sham, this Commission would have refused the transfer. Brazos is equally confident that had the attorneys involved reported that they do make " appearances" for, but do not represent, Brazos, the Licensing Boards would have insisted that Brazos obtain the means to assure that its licensing obligations would be met. Yet, through misleading actions and language, TU Electric has engaged in just such behavior. TU Electric has claimed that Brazos has no obligations to the NRC that TU Electric cannot discharge on Brazos' behalf and that TU Electric has purported to act in
[~'\)
\
Brazos' interests, when in fact it did not. Such conduct, even wi-
t \
( ,)' if permissible in other contexts, has no place in the context of nuclear power plant licensing where safety and, indeed, lives are involved and where public confidence in the Commission and the entire licensing process is at stake. 23/
From both the client's and the Commission's perspective, attorney representation lies at the heart of the licensing process because it is only through the attorney's authorized representations to the NRC that the client / applicant can fulfill its reporting obligations. Because the NRC is an administrative agency with limited investigative and financing resources, it is necessarily dependent upon the applicants to provide the information necessary for the Commission to fulfill its statutory mandate. The frank exchange of information from the applicants
-and the NRC, through the medium of the licensing attorneys, is thus a crucial part of the licensing process, and it is in this endeavor-that Brazos finds itself completely hampered by TU Electric's actions.
23/ Brazos is further concerned lest TU Electric's actions concerning representation further delay nuclear power plant licensing. Responding to Mr. Wooldridge's letter of February 19, counsel for the Citizens Association for Sound Energy wrote the ASLB on March 2, 1987, requesting both that Brazos and the other co-owners be ordered to obtain independent representation in Dockets 50-445-OL, 50-446-OL, and 50-445-CPA, and that the ASLB determine to what extent Brazos and the others should be required to review and supplement responses previously made by TU Electric without consultation with the co-owners to CASE discovery requests and ASLB and Staff inquiries directed to " Applicants."
Without commenting on the merits or the reasonableness of CASE's request, Brazos believes it apparent that TU Electric's failure to employ licensing counsel to represent all Applicants has the
[e s') potential to unnecessarily complicate licensing proceedings that
\m ' .have already consumed immense resources, contrary to the interest of the Applicants, the public, and this agency. The relief
- sought by Brazos herein would moot CASE's concerns.
! 4
( ,/ Under the foregoing circumstances, relief from this Commission is urgently needed. Since TU Electric has maintained that attorneys for the Comanche Peak Project do not and have not represented Brazos in the licensing process, then Brazos cannot independently affirm to this Commission any confidence in what licensing attorneys have represented to the Commission to be the state of the project. Brazos suggests that the most effective and appropriate remedy is for TU Electric to be ordered to assume Brazos' interest in Comanche Peak so that TU Electric's role with respect to the Project will comport with the positions its attorneys have recently taken on TU Electric's behalf:
TU Electric alone may direct the licensing effort and licensing counsel will no longer purport to represent Brazos in its capacity of joint owner of the Comanche Peak Steam Electric Station. In that way, Brazos will not have responsibility for actions taken in its name, but not in fact on its behalf.
The remedy requested is especially appropriate where licensing may well have been and continue to be delayed because of actions which have been taken in furtherance of TU Electric's corporate interests, but not in furtherance of Brazos' interests or in the public interest. For example, although TU Electric has been informed on many occasions of the Commission's desire that Applicants evaluate the root causes of the problems at Comanche Peak, TU Electric continues to resist such requests. 24/
24/ All construction permit holders are required to identify, (m\_s) determine the cause of, and correct significant conditions adverse to quality. 10 C.F.R. Part 50, App. B, Sect. XVI (1986).
[ FOOTNOTE CONTINUED ON NEXT PAGE]
p k_,) TU Electric is also presently at odds with the ASLB in the operating license proceeding over the relevance of past management policies and competence, while it simultaneously seeks to quash hearings on that same subject in connection with its application (purportedly on behalf of itself, Brazos, and the other owners) for extension of the construction permit for Unit
- 1. 25/ TU Electric also continues to resist the ASLB's directives that it examine previously sponsored testimony and
[ FOOTNOTE CONTINUED FROM PRECEDING PAGE]
When NRR Licensing Division Director Eisenhut informed TU Electric by letter dated January 8, 1985, of the Commission's substantial concerns regarding TU Electric's quality control and quality assurance programs as a result of the findings of the Technical Review Team ("TRT") he requested submission of a program that would, inter alia, address the " root cause" and
" generic implications on safety-related systems" of each of the TRT's construction QA/QC findings. The ASLB has expressed its concerns regarding the critical importance of root cause evaluations on many occasions. E.c., Texas Utilities Electric Co., Docket Nos. 50-445-OL, 50-446-OL, Memorandum (Definition of
" Root Cause") (ASLB June 6, 1986); see also Texas Utilities Electric Co., LBP-86-20, 23 N.R.C. 844, 846 (1986).
Nevertheless, TU Electric continues to downplay the significance of root cause determinations, recently responding to an ASLB concern over the ability of the Comanche Peak Response Team ("CPRT"), TU Electric's program to establish the safety of the plant, to detect problems caused by specific mid-level plant management personnel by declaring that "the power of the CPRT program to detect deficiencies is not dependent on one's ability to hypothesize or identify root cause." Applicants' Response to Board Concerns, Texas Utilities Electric Co., Dockets No. 50-445, 50-446, at 51 (ASLB filed December 1, 1986). See also id. at 13-14 & n.8 (root cause determination is but a means to the end of determining an appropriate corrective action program, and serves no function if the end can otherwise be satisfied); Cf. id. at 39 (the proposition that a flawed root cause determination might
. lead to a flawed corrective action program "is axiomatic").
25/ See, e.g., Brief of Permittees On Appeal From A Memorandum p-, ) and Order of the ASLB Entered October 30, 1986, Texas Utilities
\s / Electric Co., Docket No. 50-445-CPA, at 18-20 (ALAB filed November 10, 1986).
t
(g) _ filings in order to correct statements no longer believed to be s_-
accurate and to evaluate the significance of any prior errors. 26/
TU Electric's efforts to resist certain lines of inquiry damaging to its present litigation interests against Brazos, as well as future ratemaking proceedings, have undoubtedly delayed and will further delay licensing, thus requiring continuing participation by Brazos in the licensing process over the same period of time during which TU Electric and Brazos stand as adversaries in the Texas state court litigation. Obviously, TU Electric is unlikely to admit its mistakes in the licensing process even if to do so could further that process, when such admissions would enhance Brazos' position in the Texas state court proceedings where TU Electric's failure to secure a license in a timely manner is a central issue.
26/ Compare Texas Utilities Electric Co., LBP-85-32, 22 N.R.C.
434, 437-39, modified, LBP-85-39, 22 N.R.C. 755 (1985), petition for directed certification denied mem. (ALAB Nov. 8, 1985) (ASLB is interested in CPRT evaluations of summary judgment motions filed and withdrawn by Applicants and of "whether Applicants incorrectly defended design errors or incomplete design documents before this Board," as well as management's responsibility for inadequate technical analyses in Applicants' filings and the
" apparent inability to understand and properly evaluate the engineering contentions of Mark Walsh and Jack Doyle") and Texas Utilities Electric Co., LBP-85-39, 22 N.R.C. 755, 758 (1985),
petition for directed certification denied mem. (ALAB Nov. 8, 1985) ("To the extent that the evidence [previously submitted to us] was inaccurate or misleading, we still expect Applicants to fulfill their obligation to correct our record") and Texas Utilities Electric Co., LBP-86-20, 23 N.R.C. 844, 846 & n.4 (1986) (if the CPRT does not adequately address matters relating to quality assurance for design, including possible errors in l technical materials previously submitted to the ASLB, "then the l Board's prior findings on this subject will stand as the law of i this case and an inquiry may be made into the proper remedy for l
(('~')N
~ ,
such a failure") with Applicants' Response to Board Concerns at 14-16 (review of testimony of pricr witnesses is pointless and will not be undertaken).
t,,- I
( ,/ As described above, the current adversarial relations between the joint owners, resulting in large part from TU Electric's filing of the Texas state court action against Brazos, have been further exacerbated by TU Electric's actions with respect to attorney representation of Brazos before this Commission. Brazos believes that its interests as well as those of the Commission and the public would be best served by remedial action in the form of the l'icense conditions outlined above.
It is axiomatic that the Commission has broad authority and responsibility to consider and appropriately remedy wrong-doing in the course of licensing when brought to its attention.
There is no doubt that the conduct of TU Electric and the Comanche Peak licensing attorneys with regard to the representation of Brazos raises serious questions which bear upon the question of the " character qualification" or " management integrity" of TU Electric in the licensing proceedings. See Coalition For The Environment v. Nuclear Regulatory Commission, 795 F.2d 168; Houston Lighting and Power Co., 12 N.R.C. 281; see also Mester v. United States v. United States, 70 F. Supp. 118 (E.D. N.Y. 1947) (where public safety concerns are at issue, i
licensee " character" cannot be ignored). 27/ As the Supreme Court stated in Southern Steamship Co. v. NLRB, 316 U.S. 31, 46 27/ Compare Calvert Cliffs' Coordinating Committee v. AEC, 449 7-s F.2d 1109 (D.C. Cir. 1971) (Commission severely criticized for
( )
\s / attempting to unduly limit its functions).
i \
( ,) (1942), an administrative agency, in fulfilling its regulatory functions, may not ignore a party's wrong-doing. 28/
Given the breadth of the commission's governing statutes and'its administrative powers under Section 161 of the Act, 42 U.S.C. S 2201, there can be no doubt of the commission's power to order the relief Brazos requests. Moreover, the authority of the commission is especially broad when it is concerned with a license to use valuable Federally developed technology such as nuclear power. See Kansas Gas and Electric Company and Kansas City Power and Light Co. (Wolf Creek Generating Station, Unit No.
1), ALAB-279, 1 N.R.C. 559, 564-565 (1975); see also Niagara Mohawk Power Corp. v. FPC, 379 F.2d 153 (D.C. Cir. 1967); FPC v.
Idaho Power Corp., 344 U.S. 17, 23 (1952). TU Electric's intentional material false statements with regard to Brazos and its wrong-doing as revealed herein fully justify the Commission's exercise of its remedial powers.
Conclusion TU Electric has made intentional material false i statements to the NRC with regard to Brazos and has participated 28/ In overturning a National Labor Relations Board order which failed to consider illegal activities of certain employees, the Supreme Court. stated: "[T]he Board has not been commissioned to
! effectuate the policies of the Labor Relations Act so singlemindedly that it may wholly ignore other and equally
(_,
! /'~)s .important Congressional objectives." 316 U.S. at 47.
t L
r-3 m\,,)_4 in conduct which, if known at the time, would have clear.ly
- mandated prompt corrective action. These actions have been directly harmful to Brazos, to the licensing process, and are contrary L to the public interest. While'Brazos does not seek to impede or interfere with licensing,-or independently to undertake a licensing burden it is not equipped to handle, it does submit that the necessary and appropriate remedy for the wrong TU Electric committed is the Commission's modification of the Comanche Peak construction permits and licenses already issued ,
and the imposition of a prospective condition to any permits and licenses subsequently issued or renewed for the Comanche Peak Project that TU Electric assume Brazos' ownership share in the Project by purchase at Brazos' net book cost. Such a result
- would convert TU Electric's material false statements, as they pertain to Brazos, to statements pertaining to TU Electric's own, expanded interests, and Brazos would be released from the need fornits participation in Dockets Nos. 50-445 and 50-446.
3
.Where, as here, a nuclear power plant majority owner i
insists on maintaining such complete control of the licensing process _that the Project's licensing attorneys do not take into account-the interests of owners having smaller ownership interests, the Commission can have no assurance that the obligations of such minority interest owners will be met and the licensing process breaks down. If, as it appears to, TU Electric insists on such complete control, with that control must go l D\ complete responsibility. The only solution is for TU Electric to 4 j i
f
m assume Brazos' ownership interest in the Project. Wherefore, Brazos moves the' institution of the "show cause" proceeding and the imposition of the license conditions as herein requested and any other relief as may be appropriate.
T Respectfully submitted, I
Robert A. Eablon Alan J. Roth Bonnie S..Blair Ben Finkelstein Barbara S. Esbin Law Offices of:
Spiegel & McDiarmid 1350 New York Ave. N.W.
Washington, D.C. 20005-4798 (202) 879-4000
/ & x. A 4r.
[doseph Robert Rifep7 Law offices of:
l Joseph Robert Riley 500 Republic Bank Tower 501 Franklin Avenue Waco, Texas 76701 (817) 754-5456 Attorneys for Brazos Electric Power Cooperative, Inc.
i March 11, 1987 O-(v)
_ . , - . . _ _ . . . _ . . - _ _ . . _ _ _ . _ . . . - - - . _ . - =
LIST OF EXHIBITS
- ( '
\
/
- 1. Letter dated September 18, 1986, from Thomas G. Dignan, Jr.
of Ropes & Gray to counsel for Brazos, Tex-La and TMPA
- 2. Letter dated August 28, 1986, from Robert A. Wooldridge (Worsham, Forsythe) to Administrative Judges, NRC.
- 3. Memorandum from TUGCO Division President Michael D. Spence distributed to the Comanche Peak owners Committee dated January 9, 1985
- 4. Letter dated February 19, 1987, from Robert A. Wooldridge of Worsham, Forsythe, Sampels & Wooldridge to Administrative Judges, NRC
- 5. Affidavit of Brazos' Assistant General Manager, J.D.
Copeland dated January 23, 1987
- 6. Plaintiff's Response To Requests For Admission, filed January 5, 1987, Texas Utilities Electric Company v. Tex-la Electric Cooperative of Texas, Inc., Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc., Cause No. 86-6809, 14th Judicial District, District Court, Dallas
- 7. Plaintiff's Original Petition, filed May 29, 1986, Texas Utilities Electric Company v. Tex-la Electric Cooperative of Texas, Inc., Texas-Municipal Power Agency and Brazos Electric Power Cooperative, Inc., Cause No. 86-6809, 14th Judicial District, District Court, Dallas
- 8. Motion for Protective Order and Other Relief, dated October 6, 1986
- 9. Motion To Disqualify Attorneys For TUEC And Response To TUEC'S Motion For Protective Order And Other Relief
- 10. Order dated February 9, 1987, Texas Utilities Electric Company v. Tex-la Electric Cooperative of Texas, Inc., Texas Municipal Power Agency and Brazos Electric Power Cooperative, Inc., Cause No. 86-6809, 14th Judicial District, District Court, Dallas
- 11. Affidavit of Robert A. Wooldridge, dated November 27, 1985
- 12. Reply To Defendants' Motion To Disqualify, dated January 21, 1987
- 13. Brief In Support Of Plaintiff's Reply To Defendants' Motion To Disqualify, dated January, 1987
[ h 14. Affidavit of Robert A. Wooldridge, dated January 20, 1987 O
e-rm -e --
, e - --g+
. . 15. Affidavit of Nicholas S. Reynolds, dated January 20, 1987
.y
( ) 16. Letter dated December 9, 1986, from William S. Eggeling of Ropes & Gray to Joseph Robert Riley 17.. Letter dated December 19, 1986, from Thomas G. Dignan, Jr.
Lof Ropes & Gray to Foster De Reitzes
- 18. . Letter dated January 12, 1987, from William S. Eggeling of Ropes & Gray to Ben Finkelstein and Robert A. Jablon
- 19. Letter dated February 20, 1987, Thomas G. Dignan, Jr. of Ropes & Gray to Robert A. Jablon
-Utilities Electric Co., et al.
EXHIBIT 1
)
R O P E S & G R AY tool fwC N T Y-S ECO N O sf A C E'. N W
[} WAS HI NGTO N. O. C. 2OO37
( :.e.c .oo. css acacentem c.c. w-era s osis 202 429 e c ,.:3 3 aas ****n = s ac c
- c.c::.- aca aae seas 805*o% "* S 5'c-w S c "5 3 4 :
o r us s 2:
September 18, 1986
/
William H. Burchette Robert A. Jablon Heron, Burchette, Ruckert Spiegel & McDiarmid
& Rothwell Suite 1100 Suite 700 1350 New York Avenue, N. W.
1025 Thomas Jefferson St., N. W. Washington, D. C. 200G5 Washington, D. C. 20007 Blake Tartt Fulbright & Jaworski 1301 McKinney Street Houston, Texas 77010 Centlemen:
This will acknowledge yours of September 10, 1986. I am not sure the gulf between our views as to this Firm's relationship with your respective clients is all that wide.
However, certain statements in your letter require a response.
I First, we appear to agree that.our role is to represent "the Applicants" in the Operating License proceedings before the NRC. Further we agree that "the Applicants" before the NRC includes your clients. It does not appear, however, that you understand fully the fact that our representation of the Applicants is confined to the effort to obtain an operating license for CPSES from the NRC. As we understand the joint ownership agreement, your clients have signed away to TUEC any right they might otherwise have had to direct the attorneys representing "the Applicants" in this effort.
They also have no right to receive advice separate and apart from TUEC. It thus seems doubtful that there exists any
" attorney-client relationship" between the office and your
! clients, at least as that term is usually understood.
1 In any event, whatever semantic characterizations may be given to the relationship, Ropes & Gray's only obligation is to execute faithfully all proper instructions it receives l
l
,7 s 3, N,l A >
We have from TUEC with respect to the NRC licensing effort.
undertaken no responsibility to advise your individual clients as to those instructions or how the execution of those instructions may affect your individual client's interests, except to the extent that TUEC may direct us otherwise in furtherance of any duties it may have to its Co-owners.
As to your assertion that you expect us to " treat our conversations and discussions as well as documentation [wel are furnished, as privileged information" you may expect we will endeavor not to disclose your communications to persons other than the Joint Owners of the project. We cannot, however, agree to any interpretation that would preclude us from disclosing to TUEC such information as we may receive from you or your clients in the course of our representation of "the Applicants" in these matters. You must understand that our duty and loyalty is to completing our mission, as the Lead Owner charts it for us. The responsibility which that entails further requires us to be able to disclose to TUEC all information that we may from time to time possess which could in any way affect the licensing process. In addition, we must maintain the confidentiality of any information disclosed to us by TUEC in the course of its efforts to carry out its role as project manager; at least until TUEC frees us from that obligation. This is essential for us to be able to accomplish our representation of all "the Applicants" before the NRC.
In any event, we do not perceive that this should present any problem for you or your clients which was not There is, for anticipated by the joint ownership agreement.
example, no reason for you to disclose to us information which you have the right to withhold from TUEC. As we have cautioned in the few occasions where coordinated discovery responses have thus far been necessary, you should simply not disclose to us anything you are unwilling to share with the Lead owner TUEC. To the extent this requires you to withhold information legitimately called for by the discovery requests of the other parties -- whether i
Intervenor or Staff -- you will have to fight your own battles on it. If on the other hand, the information is l
l something which your clients have a duty to disclose to TUEC as a function of their responsibilities under the joint l
ownership agreement, disclosure to us will disadvantage them l
6 not at all, and it will permit us to pursue our task of responding to appropriate discovery -- and opposing that which is inappropriate.
l dd(
(-s x-
-p O With respect to the last paragraph of your letter, please be advised as follows: It goes without saying that if any obvious conflict appears to us we will advise you.
However, Ropes & Gray cannot, and does not, undertake to' guarantee its actions will have no adverse effect upon your clients in their differences with TUEC. We are not sufficiently acquainted, nor do we intend to become so acquainted, with the facts, circumstances, and law of the extant litigation between TUEC and the other Joint owners.
We shall, moreover, continue to be guided by our prime directive: to obtain, as efficiently as possible, a license for the operation of the CPSES plant.
While I appreciate that you and your clients have wholly separate agendas with respect to your disputes with TUEC, this constant sniping as to our firm's role must come to an end. We see no useful purpose in continuing to spend time needed for the effort to obtain a license for Comanche Peakin further bickering between Joint Owners. Such endeavors are wasteful and do not serve the only interest we have been retained to protect. Therefore, all further communications regarding this subject should be directed to Mr. Wooldridge, who is the attorney in charge of the licensing effort.
, Very truly yogrs l,k/ -f Thomas G. Dfgnan, Jr.
TCDJr./ajp cc: Roy P. Lessy, Jr., Esq.; Wright & Tallisman, P. C.
1050 17th Street, N. W.; Washington, D. C. 20036-6666 i
Nicholas S. Reynolds, Esq.; Bishop, Liberman, Cook, Purcell & Reynolds, P. C.; 1200 17th Street, N. W.;
Washington, D. .C. 20036 1
Robert A. Wooldridge, Esq.; Worsham, Forsythe, Sampels & Wooldridge; 32nd Floor; 2001 Bryan Tower; Dallas, Texas 75201 i
O
EXHIBIT 2 WORSHAM, FonsrrnE, S AMPELS Oc WOOLDRIDOE '
N (m :o:,::J';;o60..co,
....... . ........, .....a......
o u... rm. 7saoi ' "
- s t '6 o ass ot alose set =Ct e C s t 69 t
- ec=a o = =an son, itLEPuoset taealeF9 3000 or Coves stk s o*= some==a= JCS tesOes wongwaas
'ma v t t ve=otescok Camk A. romSTTMC s w o.* = a somau so=
m eC Ca 6a Cavec o 6.=a ca ne s t mo a se TC6Ecoret#:(SeeB S40 COss so= = w us a g '**060 9 9.somes r 6esumo soggera win g ves.or=. a waCa mo ngst ee. as6sasong w ee STgrat se 0070 esame a wastes Cae*Stoont e m aeostgwe g nota moeget e 06evge ,
maan SCa** Af t ascuano o. escoat o.a=C.. m... ... .
~
- M*1'*of; *.""" August 28, 1986 -
.... ......O.
.46,.. . . . . .
Peter B. Bloch, Esquire Dr. Kenneth A. McCollom Chairman Administrative Judge
. Atomic hfety.and.1.lcansing Board .H07. West Knapp.-.; .
U. S. Nuclear Regulatory Commission Stillwater, Oklahoma 74075 Washington, D. C. 20535 Elizabeth B. Johnson -
Dr. Walter H. Jordan Oak Ridge National Laboratory Administrative Judge -
P. O. Box X, Building 3500 881 West Outer Drive Oak Ridge, Tennessee 37830 Oak-Ridge, Tennessee 37830 RECOVED.
Re: Texas Utilities Electric Company, et at A(JG 2 91986 (Comanche Peak Steam Electric Station, Units 1 & 2): Docket Nos. 50=445 and 50=446 M12 E COMSit
Dear Administrative Judges:
In a telephone call from the Board Chairman to Mr. Dignan late last week, we
_were. asked to respond to Mr. Roisman's question concerning representation of the Applicants in this proceeding.1 hat question is contained on Transcript page 24606.
The attorneys who have appeared on behalf of the Applicants in this case are:
Bishop, l.iberman, Cook, Purcell & Reynolds l Worsham, Forsythe, Sampels & Wooldridge Ropes & Gray Roy P. Lessy These firms have been retained by Texas Utilities Electric Company and appear in this proceeding on behalf of all of the Applicants pursuant to a Joint Ownership Agreement among them. Under that Agreement, Texas Utilities Electric Company is responsible for the licensing proceedings concerning this N facility.
-% ?9 W 4
a I
Administrative Judges
{s y) August 23,1986 Page Two In recent weeks, and because specific requests for documents and information have been directed to the minority owners, we recognize that in certain instances such minority owners may have specific objections relating to their information which might not otherwise apply to project files. We are presently in discussion with the attorneys who represent the minority owners and hope to be able to resolve any questions in this regard within the next few days. In the meantime, and unless otherwise specifically stated, the above-listed attorneys in every instance will appear on behalf of all Applicants as has been the case in the past.
Res#tlully, -
- % L,_
~
Robert A. Wooldridgel RAW /klw
- cc:. Service List .
i ,. . . . , , . . . . , .
l
- e. ,
l 1
i EXHIBIT 3 g 's January 9, 1955 f
MDtORANDUM To: Messrs. L. F. Fikar B. R. Clements ""
Joe B. George l
John W. Beck l Homer Schmidt Richard Werner .
Robert A. Wooldridge 1
Because of the substantial workload that lies ahead in resolving all issues before the ASLB and possible appeals of l Board actions, I have retained Mr. Tom Dignan and his law firm. !
Ropes & Gray, of Boston, Massachusetts, to provide additional '
legal assistance on licensing matters. Mr. Dignan has substan-tial experience-in licensing nuclear plants and we look forward to his active participation on our behalf.
Mr. Dignan becomes a part of a new legal team which includes Nick Reynolds, Bob Wooldridge and their respective law firms. Effective immediately, Bob Wooldridge will assu=e lead responsibility for the legal side of our licensing effort.
He will be responsible for the assignment of work among the t
firms involved and will be the principal liason between the lawyers and our company personnel on licensing matters.
~
x 3 - al. 5?., -e Michael D. Spence xc: Messes. Perry C. Brittain R. J. Gary J. S. Farrington Leon Loveless Erle Nye Max Tanner /
Tom Locke Mike Ozymy W. W. Aston Bill McDonough R. X. Campbell W. G. Marquardt l
l l
{__ . _ _ _ _
EXHIBIT 4 Woasu Ax. Fonov?M t. S Axprt.s as Woot.samos
.l.!!".";'
....., can...::=. 7.eei
-"l,-=;;;..
- '".*.::'t.T ................x..
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1..".*:.~/.":;-
c.t::.'.c..!;
f!."
- . t"l71.'" ...u...............
- !!!7.'./.Ul" ,
.7." *.; *.*..
,:,a;- o rebruary 19, t987
......f..-l ==
Peter 8. Bloch, Esquire Dr. Kenneth A. McCollom '
Chairman Administrative Judge Atomic Safety and Licensing Board 1107 West Knapp U.S. Nuclear Regulatory Commission 5tillwater, Oklahoma 7a073 Washington, D.C. 20335 Dr. Walter M. Jorden Ellaabeth B. Johnson Administrative Judge Oak Ridge National Laboratory 481 West Outer Drive P. O. Box X, Su!1 ding 3300 Oak Ridge, Tennessee 37830 Oak Ridge, Tennessee 37830 i
Re Texas Utilities Electric Comoany, et al (Comanche Peak Steam Electric station, Units 1 k 2)
Docket Nes. 30.aa5. 30.as4. and 30.aa3.CPA _
Dear Administrative Judges:
We purpose of this letter is to report to the Soard :ertain matters regarding the appearances of counselin the above referenced dockets.
(
Se firm of Worsham, Forsythe, Sampels & Wooldridge has recently beert disquaufled from further representation of TU Electric in a proceeding in a Texas State Court breupt by TU Electric against the other owners of Comanche Peak Steam Electric 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 Tex.
1.4 Documents) dated November 28, 1984, this Board (wnile finding that this matter was not relevant to the matter then before it) expressed concern about such firm's involvement in the State Court action.
l t
i': Si "
33cC -3:I* _S. O? 13 Ce '
400t646202 8092 00t9CEP 4 t 9" " . !Md G7:26:46 22-t
- 962 53tcOJ373A =013 l
_ W 9-5pp.
Administrative Judges February 19,1987
, page Two As you are undoubtedly aware, the firm of Ropes & Gray has been taking an increasingly 4reater share of pettnary responsibility for the conduct of these proceedings. Therefore, Ropes & Gray has, effective this date, been ansigned lead responskbility for all liconalng matters in the above referenced dockets. Te request that all communicatione from the Board, the NRC $taff, and the Intervonors relating to tnese dockets be directed to that firm at its Soston office.
Since the Ropes & Gray firm has assumed lead responsihtlity in both cockets, the Bishop,1.1berman, Cook, Purcell & Reynolds firm and Roy P. t.essy will no longer be appearing in these proceedings and have authorized me, by this letter, to withdraw their appearances. Such firms wul continue to provide counsel and advice to TU Electric on ucenalng matters.
As hea prevleusly been discussed before this Board, the undersigned law firm, the firm of Ropes & Gray, and au the other attorneys who have appeared in support of the ucensing of CPSE3 have been retained by TV Electric pursuant to its rights and duties under the CPSES Joint Ownership Agreement to retain and direct such attorneys before the NRC in this ucenalng proceeding. This firm and its co-counset have always taken and wul continue to take their instructions in this matter from W Electric as the Project Manager. Arguments and constructions which we may urge to the Board will be - as they have been in the past - these directed by TU Electric as Project Manager pursuant to its duties and responsibilities under the Joint Ownership Agreement.
More specifically, the Ownership Agreement pro.
vides, among other things, that:
. . . the Project Manager, as agent for the Parties, after giving due censideration to any recommendations and sug-seetlene of the Owners Committee, and in accordance with the abovementioned standards and guideunes, shall have sole responsibility for, and i authorized Par as r act for tje, tg censina . . . of e Project . .
This responsibility of TU Electric for the 11 censing of Comanche Peak is re.
confirmed in Section 3.01 of the Joint Ownership Agreement:
"The Project Manager, acting as agent for the Parties, shan take whatever action is necessary or appropriate to seek and obtain au licenses, permits, and other rights and regulatory approvals necessary or appropriate to the con-struction and operation of the Project and to the use of tne Fuel."
In order to further assure TU Electric's authority with respect to licensing and other matters, Section i1.02 of the Joint ownership Agreement provides:
. se 33s:= 1;;I* _f. T iL
, , , too,6 cec 0C
- eovc co W CW W % W"*!'b" '*
I
Administrativa Judges Irebruary 19,1987 page Three "1he Project Manager and the Parties will cooperate with each other in all activities in connection with the Project including, without ilmitation, the execution and filing of appilcations for autherlaation, permits, and licenses and the execution of such other documents as may be reasonably necessary to confirm tM authority of th lh_ olect
]g gg}, k 301 M in connection with the nterests in the Troject . . ..a (Imphaels added.)
While neither this firm nor any of the other counsel who have appeared in support of the license applicatten has or ever had any attorney /cuent relationsnip with any CPSES owner other than TU Electric, ner have eney undertaken, or will they undertake, to provide legal advice or counsel the other joint owners as to any matter, they, of course, will de nothing to prevent the minority owners from bringing any matter to this Seard's attentlen which they would be required to do by law or to prevent them from appearing specially at any time required to protect a purely individualInterest such as the assertion of a privilege running only to one of them individually.
Very yours, i
Robert A. Wooldrids RAW /kiv Enclosure cc: Service List et ' 33d : M:I' _i. OI 334
- , . L009640c0c + 0092 00L9Cct 4L9*'# = 'Md 4,
- gt:t6.cc-t S6C 53 iso 33 % '013
1 Ns. 64-4a09 i
TEXA8 UTILITIES 3LICTRIC 1 IN TMS O!5TRICT 00t;17 CostFAlff, i Plaintiff,
- v. '
3AttAs COU1tTT. TEXAS TEI-LA ELECTRIC CCCPERA'*IVE F TRIAS, IIsc., TEXA8 !
OUIIICIPAL pcWER AGENCY and ORA 508 ELECTRIC POWER COOPERATITE, INC.,
Defoedants. A-14 Tit JUDICIAL DISTRICT SERE 88 IT REMEMBERED that en the 23rd day of January.
1987, came for hearing the Defendants' Motion to Disqualify the firm of worsnaa, Forsythe, Sampels 6 Wooldridge as Attorneys for F1sintiff in tata case, and having considered the evidence presente. and the arguments of counsel, the Court is of the opinien that the motion should De sustained.
IT IS THtBEFORE 0A08220, ADJUDGED AMO DECREE 3 that tne Defendants' Motion to 01sque11ty the firm of worsnam. Forsytne.
Sampels & teseldridge, as attorneys for Plaintiff in unis case is sustained and the firm of wo rsham, Fctsythe, Sampets k l
Weeldridge is neresy disqualified from representing Plainti!!
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ORDER - PACE ONE M"9 T 3 ,7
- I t .- .- -- ---
APPROVED:
FULSA!GMT & JAWOR$N!
W f O.
Blake Tartt '
1301 McKinney street Houston, Temas 77010 i
COUN881. FOR TEXA8 MUNICIPAL POWER AGENCY NERON, SURCNETTE, RUCKERT & ACTMwgLL mf William R. Bur.o tte Suite 700 l 102$ Thomas Jefferson, N.W.
l Washington, D.C. 20007 COUNSEL FOR TEX-L.A ELECTRIC CCCPERATIVE OF TEXAS, INC.
SF!EGEL & McO!AAMID A?fj./>A _
, Rotert A. #ttlen
! 1350 New York Avenue, W.W.
l Washington 0.C. 20005-6794 l
COUNGEL FOR 3RA208 ELECTRIC POWER COOPERATIVE, INC.
O ,,,,, ORDER . Pact M 4
- ,....---,_.~m_.--. - - - , _ . . - - _ . - _ - - ~ , - , , . . . _ , - . - _ _ _ _ . - - - - . , - - - - .- -.---
11th 6L'L 5s
' h 4
- L NO. 86-6809 ,
f I TEXAS UTILITIES ELECTRIC (j COMPANY, ,
5 S
IN THE DISTRICT COUR? OF Plaintiff, 5 5 ,
VS. S- DALLAS COUNTY,
- TEXAS S
TEX-LA ELECTRIC CO3FERATIVE S OF TEXAS, INC., ET AL S Defendants. S 14TH -JUDICIAL DISTRICT AFFIDAVIT OF J.D._.COPELAND THE STATE OF TEXAS S S'
COUNTY OF DALLAS S BEFORE ME, the undersigned authority, on this day-personally appeared J.D'. Copeland, known to me to be a. credible ,
person of lawful age, who, after having been duly sworn \by me, upon his oath did depose and say as follows: ,
- My name 'is J.D. Copeland. I am Assistant General Manager of Brazos Electric Power Cooperative, Inc. and have been such for two years. Before that, I was Brazos' Manager of Accounting. I'have been employed at Brazos for sixteen years.
I.am a Certified Public Accountant.
"In the Comanche Peak licensing proceedings, Brazos has relied on attorr.eys hired by TUCCO (now TUEC) . to ' represent Brazos' interests at the Nuclear Regulatory CcNamission. The attorneys hired by TUEC in the licensing ~ effort hate included Worsham, Forsythe, Sampels & Wooldridgh; cnd Brazos has considered Worsham, Forsythe, Sampels & Woolitidge to be its attorneys in the licensing proceedings.
' Prior to the institution of this suit, Worsham, Forsythe, Sampels & Vooldtidge never ' advised me or, to my knowledge, anyone else at Brazos, tbat Brazos could not rely on Worsham, Forsythe, Sampels & Wooldtidgs's representation of
! Brazos' interests in the NRC licensing effort, or that Wotsham, Forsythe, Sampels & Wocidridge was representing only ,TUEC's interests before the NRC.
V t
"With regard to the NRC licensing effort, from time to f '-'N time, Brazos has received copies of filings made on its behalf
\ by Worsham, Forsythe, Sampels & Wooldridge and other information from TUEC, In late 1985 or early 1986, I attended a meeting at which Mr. Robert A. Wooldttdge of Worsham, Forsythe, Sampels & Wooldridge was present. That meeting co9cerned, among other things, litigation involving TUEC and' eacc non-TUEC owner of Comanche Peak in which iormer employees of Brown & Root were scing each of the owners. In that litigation, Brazos and the other non-TUEC' owners have hired independent counsel; but Mr. Wooldridge never suggested to me or, to my knowledge,~to anyone else at or on behalf of Brazos, that Brazos should hire its own counsel to represent its interests before the NRC in the Comanche Peak licensing effort (as opposed to antitrust concerns). To the contrary, that meeting with Mr. Wooldridge confirmed my understanding that Mr. Wooldridge and his firm were Brazos' attorneys before the NRC in the Comanche Peak licensing proceedings.*
kb
- J.D. Co'peland hot 9 SUBSCRIBED AND SWORN TO BEFORE ME this --
day of January, 1987.
. . mu..,,
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AM# . 4 tnt &
- ',5
/ 7otary Publijc in and for
[ 7; '
I
[ the S*. ate of Texas
- t.
I,,'*.'
JAM;E K. SLEMMCNS, Notary Putnc i .
In and ter the State of Texas yy Commission Erguesu T-M/-N V
2-0063g
_ ,__ _ _ - . - - ._.-__ ~ ..- - . . . _ . - . _ - -
EXHIBIT 6 gy No. 86-6809-d.
( I
\v' TEXAS UTILITIES ELECTRIC S IN THE DISTRICT COURT COMPANY, 5 S
Plaintiff, 5 S s VS. S S
TEX-LA ELECTRIC COOPERATIVE S OF DALLAS COUNTY, TEXAS OF TEXAS,INC., TEXAS MUNICIPAL 5 POWER AOENCY, and BRAZOS S ELECTRIC POWER COOPERATIVE, S IN C., S S
Defendants. S 14TH JUDICIAL D3TRICT PLAIN'ITFF'S RESPONSE TO REQUErr5 POR ADttISSION COMES NOW Texas Utilities Electric Company ("TUEC"), Plaintiff herein, and for its responses to Defendants' Requ<ast for Admissions states as follows:
- 1. (a) TMPA has paid some of the Costs of Construction of Comanche Peak, as defined in the Joint Ownership Agreement.
RESPONSE
Admitted.
(b) Brazos has paid some of the Costs of Construction of Comanche Peak, as defined in the Joint Ownership Agreement.
RESPONSE
Admitted.
(c) Tex-La has paid some of the Costs of Construction of Comanche Peak, as defined in the Joint Ownership Agreement.
RESPONSE
Admitted.
- 2. (a) Worsham, Forsythe, Sampels & Wooldridge ("Worsham, Forsythe") has been paid more than $100,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on bahalf of Texas Utilities Electric Company ("TUEC") or its predecessors and TMPA, Brazos, or Tex-La.
I
RESPONSE
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $100,000.00 for legal services performed in connection with such firm's appearance (h
( before the Nuclear Regulatory Commission, such appearance being made at the request of TUEC for the purpose of assisting TUEC in performing its responsibilities relating to the PL AINTIFF'S RESPONSE TO REOl'ESTS FOR ADVISSION -- Para 1
!! censing of Comanche Peak under the Joint Ownership Agreement. To the extent not j h specifically admitted in the foregoing sentence, such request is denied.
'u (b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $100,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
R ESPONSE:
Admitted.
- 3. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$200,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
t
RESPONSE
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $200,000.00 for legal services performed in connection with such firm % appearance before the Nuclear Regulatory Commission, such appearance being made at the request of TUEC for the pumose of assisting TUEC in performing its responsibilities relating to the licensing of Comanche Peak under the Joint Ownership Agreement. To the extent not specifically admitted in the foregoing sentence, such request is denied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $200,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
RESPONSE
Admitted.
- 4. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$300,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Ber.zos, or Tex-La.
REPONSE:
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $300,000.00 for legal services performed in connection with such firm's appearance before the Nuclear Regulatory Commission, such appearance being made at the request of TUEC for the purpose of assisting TUEC in performing its responsibilties relating to the licensing of Comanche Peak under the Joint Ownership Agreement. To the extent not specifically admitted to the foregoing sentence, such request is denied.
L Pl.AINTIFF'S R ESPONSE TO P.EQUESTS FOR AD\t!SSION -- Page 2
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership (p)
A./ ' Agreement, include more than $300,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
RESPONSE
Admitted.
- 5. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$400,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
RESPONSE
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $400,000.00 for legal services performed in connection with such firm's appearance before the Nuclear Regulatory Commission, such appearance being made at the request of TUEC for the purpose of assisting TUEC in performing its responsibilities relating to the licensing of Comanche Peak under the Joint Ownership Agreement. To the extent not specifically admitted in the foregoing sentence, such request is denied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $400,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
RESPONSE
Admitted.
- 6. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$500,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
RESPONSE
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $500,000.00 for legal services performed in connection with such firm's appearance before the Nuclear Regulatory Commission, such appearance being made at the request of TUEC for the punose of assisting TUEC in performing its responsibilities relating to the licensing of Comanche Peak under the Joint Ownership Agreement. To the extent not specifically admitted in the foregoing sentence, such request is denied.
(b) 1he Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $500,000.00 for legal services performed by Worsham, l Forsythe, Sampels & Wooldridge, l
l PL AINTIFF'S RESPONSE TO REQUESTS FOR ADVISSION -- Page 3 I - .. . -
RESPONSE
A f
) Admitted.
'Q'I
- 7. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$600,000.00 for legal services performed in connection with Worsham, Forsythe's appeamnce before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
RESPOhSE:
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $600,000.00 for legal services performed in connection with such firm's appearance before the }Tuclear Regulatory Commission, such appearance being made at the request of TUEC for the purpose of assisting TUEC in performing its responsibilities relating to the licensing of Comanche Peak under the Joint Ownership Agreement. To the extent not specifically admitted in the foregoing sentence, such request is denied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $600,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
RESPONSE
Admitted.
- 8. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$700,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
RESPONSE
TUEC admits that Worsham, Forsythe, Sampels & Wooldridge has been paid more than $700,000.00 for legal services performed in connection with such firms appearance before the Nuclear Regulatory Commission, such appearance being made at the request of TUEC for the purpose of assisting TUEC in performing its responsibilities relating to the licensing of Comanche peak under the Joint Ownership Agreement. To the extent not specifically admitted in the foregoing sentence, such request is denied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $700,000.00 for legal services performed by Worsham.
Forsythe, Sampels & Wooldridge.
R ESPONSE:
\
Admitted.
- 9. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$800,000.00 for legal services performed in connection with Worsham. Forsythe's PLAINTIFF'S RESPONSE TO REQUESTS FOR ADVISSION -- Page 4
appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities
- /O Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
t
'D RESPONSE:
Danied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $800,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
RESPONSE
Denied.
- 10. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$900,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
RESPONSE
Danied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $900,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
R ESPONSE:
Denied.
- 11. (a) Worsham, Forsythe, Sampels & Wooldridge has been paid more than
$1,000,000.00 for legal services performed in connection with Worsham, Forsythe's appearance before the Nuclear Regulatory Commission on behalf of Texas Utilities Electric Company or its predecessors and TMPA, Brazos, or Tex-La.
RESPO NSE:
Denied.
(b) The Costs of Construction of CPSES, as defined in the Joint Ownership Agreement, include more than $1,000,000.00 for legal services performed by Worsham, Forsythe, Sampels & Wooldridge.
R ESPONSE:
Denied.
- 12. (a) Worsham, Forsythe appears before the NRC on behalf of TMPA.
RESPONSE
Texas Utilities Electric Company, as the entity solely responsible for the licensing of Comanche Peak, has employed Worsham, Forsythe, Sampels & Wooldridgs as one of its attorneys to make an appearance for it before the Nuclear Regulatory Commission to aid PLAINTIFF'S RESPONSE TO REQUESTS FOR ADMISSION -- Page 5
It in obtaining an operating license on behalf of the owners of Comanche Peak. .To the extent not admitted in the foregoing sentence, such request is denied.
(b) . Worsham, Forsythe appears before the NRC on behalf of Brazos.
RESPONSE
See answer to 12.(a) above.
(c) Worsham, Forsythe appears before the NRC on behalf of Tex-La.
R ESPONSE:
See answer to 12.(a) above.
- 13. (a) Worsham, Forsythe appears before the NRC as counsel for TMPA.
RESPONSE
TUEC denies that any attorney / client relationship exists between Worsham, Forsythe, Sampels & Wooldridge and TMPA. The appearance made by Worsham, Forsythe, Sampels & Wooldridge is described more fully in answer to Request No.12.(a) above. To the extent not admitted in the foregoing sentence, such request is denied.
(b) Worsham, Forsythe appears before the NRC as counsel for Brazos.
RESPONSE
.( TUEC denies that any attorney /ellent relationship exists between Worsham, Forsythe, Smapels A Wooldridge and Brazos. The appearance made by Worsham, Forsythe, Sampels & Wooldridge is described more fully in answer to Request No.12.(a) above. To the extent not admitted in the foregoing sentence, such request is denied.
=
(c) Worsham, Forsythe appears before the NRC as counsel for Tex-La.
R ESPONSE:
TUEC denies that any attorney / client relationship exists between Worsham, Forsythe, Sampels & Wooldridge and Tex-La. The appearance made by Worsham, 1
Forsythe, Sampels & Wooldridge is described more fully in answer to Request No.12.(a) above. To the extent not admitted in the foregoing sentence, such regt.ast is denied.
- 14. (a) Worsham, Forsythe acts as TMPA's attorney in some matters relating to j Comanche Peak.
RESPONSE
, Danied.
(b) Worsham, Forsythe acts as Brazos' attorney in some matters relating to i
Comanche Peak.
i
RESPONSE
Danied.
(c) Worsham, Forsythe acts as Tex-La$s attorney in some matters relating to Comanche Peak.
i PLAINTIFF'S RESPONSE TO REQL'ESTS FOR AD\tlSSION -- Page s
RESPONSE
Denied.
V
- 15. (a) Worsham, Forsythe has filed responses to discovery requests directed to
- " Applicants" in NRC proceedings relating to Comanche Peak on behalf of Applicants without consultation with counsel representing only TMPA respecting such requests.
RESPONSE
TUEC is not aware of any situation in which Worsham, Forsythe, Sampels &
Wooldridge has purported to file a response to discovery requests in which it either speaks individually for TMPA respecting such request or in which it speaks on matters other than 1
the status and/or progress of the Comanche Peak project from facts within the knowledge of TUEC as Project Manager of the Comanche Peak project. Since the institution of litigation between TUEC and TMPA, specific discovery requests have been directed to the minority owners, including TMPA, in the NRC proceedings. Worsham, Forsythe, Sampels
& Wooldridge has not prepared or filed responses to such specific requests, but it is TUEC's understanding that responses to such specific requests were made either by the attorneys representing only TMPA or by other attorneys representing TUEC in the licensing proceedings only after the consultation with counsel representing only TMPA respecting such requests specifically directed to, or inquiring as to matters individual to, i
TMPA. Based won the foregoing, TUEC denies such request.
(b) Worsham, Forsythe has filed responses to discovery requests directed to
" Applicants" in NRC proceedings relating to Comanche Peak on behalf of Applicants without ersultation with counsel representing only Brazos.
R ESPONSE:
TUEC is not aware of any situation in which Worsham, Forsythe, Sampels &
Wooldridge has purported to file a response to discovery requests in which it either speaks individually for Brazos respecting such request or in which it speaks on matters other than 4
the status and/or progress of the Comanet.e Peak project from facts within the knowledge of TUEC as Project Manager of the Comanche Peak project. Since the institution of litigation between TUEC and Brazos, specific discovery requests have been directed to the minority owners, including Brazos, in the NRC proceedings. Worsham, Forsythe, Sampels & Wooldridge has not prepared or filed responses to such specific requests, but it is TUEC's understanding that responses to such specific requests were made either by the attorneys representing only Brazos or by other attorneys representing TUEC in the licensing proceedings only after the consultation with counsel representing only Brazos V
respecting such requests specifically directed to, or inquiring as to matters individual to, Brazos. Based won the foregoing, TUEC denies such request.
{ PLAINTIFF'S RESPONSE TO REOL'ESTS FOR ADVISSION -- Page 7 1
rwg ~ --, ,,,-v,, ,w.-,, , , - , ,--- - - - - - , --- -
l l
1 (c) Worsham, Forsythe has filed responsas to discovery requests directed to (a\
i
/ " Applicants" in NRC proceedings relating to Comanche Peak on behalf of Applicants without consultation with counsel representing only Tex-La.
RESPONSE
TUEC is not aware of any situation in which Worsham, Forsythe, Sampels &
Wooldridge has purported to 'ile a response to discovery requests in which it either speaks individually for Tex-La respecting such request or in which it speaks on matters other than the status and/or progress of the Comanche Peak project from facts within the knowle%e of TUEC as Project Manager of the Comanche Peak project. Since the institution of litigation between TUEC and Tex-La, specifle discovery requests have been directed to the minority owners, including Tex-La, in the NRC proceedings. Worsham, Forsythe, Sampels & Wooldridge has not prepared or filed responses to such specific requests, but it is TUEC's understanding that responses to such specific requests were made either by the attorneys representing only Tex-Ls or by other attorneys representing TUEC in the licensing proceedings only af ter the consultation with counsel representing only Tex-La respecting such requests specifically directed to, or inquiring as to matters individual to, Tex-La. Based Leon the foregoing, TUEC denies such request.
Respectfully submitted, WORSH A.'4, FORSYTHE, SAM PELS
& WOOLDRIDGE 2001 Bryan Tower, Suite 3200 Dallas, Texas 75201 (214) 979-3000 M. D. Sampels Robert A. Wooldridge Richard L. Adams Robert K. Wise Robert P. Oliver By:
Robert A. Wooldridge I N State Bar No. 21984000 JACKSON, W ALK ER, WINSTEAD CANTWELL & MILLER 901 Main St.
6000 InterFirst Plaza Dallas, Texas 75202 (214) 953-6000 H. Dudley Chambers John B. Kyle T. Michael Wilson G ATTORNEYS FOR PLAINTIFF AND l
- CROSS-DEFENDANTS TEXAS UTILITIES
( ELECTRIC COMPANY, TEXAS UTILTTIES COMPANY, TEXAS UTILITIES SERVICES INC. and TEXAS tiTILITIES MINING COMPANY PLAINTIFF'S R ESPONSE TO R EOl'ESTS FOR ADVISSION -- Pua 9
r N
CERTIFIC ATE OF SERVICE I hereby certify that a copy of the above and foregoing was placed in the United States mail, postage prepaid, to all counsel of record on this the __ day of January, 1987.
7
~ ~
T 4
l if l
- 1.
i t
i PL AINTIFF'S RESPONSE TO R EO!;ESTS FOR ADVISSION* -- Pere 9
NO. "
7:s TEXAS UTILITIES ELECTRIC S IN THE DISTRICT COURT COMPANY. S S
i
] VS.
Plaintiff, 5 OF DALLAS COUNTY, TEXAS S
TEX-LA ELECTRIC COOPERATIVE 5 OF TEXAS, INC., TEXAS MUNICIPAL $
POWER AGENCY and BRAZOS 5 ELECTRIC POWER COOPERATIVE, 5 WC, S 5
Defendants. 5 JUDICIAL DISTRICT PLAINTIPP's OEICDt AL PET! TION TO THE HONORABLE JUDOE OF SAID COURT:
COMES NOW Plaintiff TEXAS UTILITIES ELECTRIC COMPANY com-plaining of TEX-LA ELECTRIC COOPERAT!YE OF TEXA5, INC., TEXA8 MUNICI-PAL POWER AGENCY and BRAZOS ELECTRIC POWER COOPERATIVE, D(C.,
and for causes of action would show the following PARTIES L Plaintiff TEXA8 UTILITIIS ELECTRIC COMPANY ("TURC") is a Texas corporation with its principal place of tmsiness in Dallas, Danas County, Texas.
- 2. Defendant TEX-LA ELECTRIC COOPERATIVE OF TEXAS, INC.
(" REX-LA") is a corporation with its principal place of business in Naoogdoches, Nacogdoches County, Texas. It may be served with citation by serving its President. Juan D. Nichols, at the offlees of Wood County Electrie Cooperative, 501 South Main. Quitman, Wood County, Tomas 75783.
- 3. Defendant TEXA8 MUNICIPAL POWER AGENCY ("rMPA") is a munistpal corporation, polittsal subdivision and body polttle and corporate of the State of Texas with its prtneipal place of business in Bryan, Brases County, Texas.
It may be served with eitation by serving its General Manager, Ed L. Wagoner, at its offlees on Pld Road 244, three miles north of Carlos, Bryan, Brases County, Texas 77845.
- 4. Defendant BRAZOS ELECTRIC POWER COOPERATIVE ' 'i C.
("BEPC") is a corporation with its principal place of business in Waco, McLennan County, Texas. It may be served with ettation by serving its Ezeeutive Vice President and General Manager, Rienard E. McCaskill, at 2404 !.4Saue Avenue, Waco. McLennan County. Texas 76706-6298.
Pt.AINTIFF's ORIGIN AL PETITION - Page i
BACKGROUND
- 5. TUEC ts engaged in th3 gen:ratiori, purchase, transmisston, distri-bution and sale of electrie energy in the north central, eastern and western parts of -
the State of Texas through four divistora: Dallas Power & Light Company
("DP&L"), Texas Eleetrie Service Company ("TESCO"), Texas Power & Light Company ("rP&L") and Texas Ututtles Generating Company ("TUGCO"). On January 1,1984, DP&L, TE3CO and TP&L which., prior to such date, were separate corporate entitles, merged !nto and became operating divisions of TUEC. At the same time, certain astivities of TUGCO lavolving the engineering, construction and operstlos of electrie generating facuttles were transferred to TUEC and beamme the TUGCO division thereof. As a result of such merger and transfer.
TUEC became the sueeennor to all the rights of DP&L, TESCO, TP&L and the rights and activities et TUGCO lavolving the engineering, construction and operation of eleotrie generating faculties.
- 4. kt the early 197tPs, DP&L TE3CO and TP&L undertook the con-struction of two nualear power generating units on a site located in Hood and somervell Counties, Texas, imown as the Comanene Peak Steam Electric Station
("Comanene Peak").
- 7. Suesequently, BEPC. TMPA and TEX-LA became undivided joint owners along with DP&L, TESCO and TP&L in Comanche Peak pursuant to the Joint Ownership Agreement, as modified and amended (the " Joint Ownership Agreement"), attaehed hereto as Exhibit A. The Joint Ownership Agreement, among other things, otligates each owner to pay its share of all Costs of Construction (as defined in the Joint Ownership Agreement) in proportion to each owner's interest, which in the onse of BEPC. TMPA and TEX-LA is 3.8%,6.2% and 2-1/8%, respeettvely. TUGCO was appointed the agent for a!! owners in the
!!eensing, design, construction, operation and maintenance of Comanche Peak.
- 8. A controversy has developed with respect to the obligation of the parties under the Joint Ownership Agreement. Each Defendant has asserted or claimed, among other things, one or more of the followmg: (a) that there exssts no further obligation to pay its proportionate share of the remaining Cosu of Construetton of Comanene Peaks (D) that no further payments wiu ce made under the Jomt Ownership Agreements (c) that TUEC has failed to act with due diligence in performing its ooligettons under the Joint Ownership Agreements (d) that TUEC has failed to timely complete censtruetton of CJmanche Peak and secure a license for its operation; (e) that TUEC has failed to employ Prudent Utility Praettees (as PL AINT!"'S ORIGIN AL PETtTION - Paste 2
i
! defined in tha Jatnt Ownersnip Agrasmant) m misction witn its ootigttions uncar tha J: int Ownersnip Agreem .nt; (f) that TUEC has bracened varisus claimed expres and implied legal obligations and warranties under the Joint Ownership Agreement, including an aHaced Implied ' duty to perform in a workmanshiplike manner 1"(g) that TUIC has i4Hed to comply with numerous provisions of the Joint Ownership Agreement, including Sections t.19, 3.04, 5.01, 5.02, 5.03, 8.02, 8.03, 9.01, 9.03, 22 and 23 thereofg (h) that it is entitled to indemnification from TURC for i unspecified damages pursuant to Section 3.04 of the Joint Ownership Agreements (1) that TURC has committed violations of the Texas Consumer Protection -
Deceptive Tvede Prestices Act (the "DTPA"), Tez. Bus. Comm. Code 55 17.41 .63; and Q) that its claims asserted against TURC have not been waived, relinquished or barred by limitations.
FIRST CAUSE OF ACTION
- 9. This is a oeuse of action against TEX-LA for breach of contract.
SEPC and TMPA are necessary parties to this eeuse of action for the reason, inter sh of their respoetive obligations to cover portions of TEX-LA's share of the remaining Costs of Construation of Comanche Peak pursuant to the Joint Owner-ship Agreement.
- 10. TUIC reelleges and incorporates by reference herein Paragraphs I through 8 hereor.
H. TEX-LA has antielpatorily repudiated and breeched the Joint Owner-ship Agreement.
- 12. By reeman of the breach, TUEC has been damaged in an amount in eseems of the minimum jurisdiettonal!!mits of this Court.
SECOND CAUSE OF ACTION
- 13. 1 hts is a cause of action against SEPC, TMPA and TEX-LA for a deelerstory judgment pursuant to Sections 37.001.0u of the Texas CIvu Praettees and Remedies Code.
- 14. TUIC realleges and incorporates by reference herein Paragraphs I through 8 hereof.
- 15. Actual controversies exut between TUEC and Defendants with respect to the matters set fcrth in Parsgraph 8 hereof.
- 18. TUEC contends, and requests the Court to declare, (a) that Defend-ants have not been relieved of their respecttve collgation to pay their propor-tionate there of the rememtr:g Costs of Construction of Comanche Pesk; (b) that PL AINTIFF'S ORICIN AL PETrr!ON - Page 3 L . - - - . . - . . .- _ . .
one or more of the Defendants have antictpatottly breached the Joint Ownersnip Agreement;(c) that TUEC has not faded to act with due diligence in performing its
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obligations under the Joint Ownership Agreements (d) that TUIC has not failed to construct Comanche PenAt or to obtain a !! cense for its operation in a timely manner: (e) that TURC has not failed to employ Prudent Utility Preettees in conneetion with its obligations under the Joint Ownersnip Agreements (f) which. if.
any, impiled obilgations and warranties ertst in or by reason of the Joint Oweership Agreement and that TURC has not breeched any such imp!!ad obligation or werranty' under the Joint Ownership Agreement or otherwise, including any implied obligation to perform in a wortunanshiplike manners (g) that TUEC has not faued to comply with any prevision of the Joint Ownership Agreement, including Sections 1.19, 3.04, 5.01, 5.02, 5.03, 8.02, 8.03, 9.01, 9.03, 32 and 23 thereof; (h) that TUEC is not obilgated to indemnify Defendanta for any damages pursuant to the Joint Ownership Agreement;(!) that TUIC has not violated tne DTPA and that TLT-LA.
TMPA and SEPC are not *eensenersa within the meaning of $ 17.45 of the DTPA; and (j) that all, or a material part, of the claims asserted by Defendants agamet TUEC are barred by !!mitations or have been waived or otherwise relinquished, including that Defendants have failed timely and diligently to perform their obligations as joint owners under the Joint Ownership Agreement.
THIRD CAUSE OF ACTION
- 17. TURC realleges and ineorporates by reference herem the allegations of Paragrepas 1 through 18 hereof.
18.
Pursuant to Sections 37.009 and 38.001 of the Texas Ctvil Praettee and Remedies Code, TURC is entitled to recover its costs and reasonable attorneys' fees ineuered in brmgtng this aetten.
WHEREFORE. PREMISES CONSIDERED. TUEC preys that TEX-LA, BEPC and TMPA be cited to appear herein and that on final hearing TUEC be awarded judgment:
- 1. against TEX-LA for the damages suffered by TUEC by reason of TEX-LA's anticipatory repudiation and breech of the Jomt ownersalp Agreement;
- 2. against TEX-LA. SEPC and TMPA declartng tne matters set forth m Paragrapn 18 above:
- 3. awarding to TUEC pre- and post-judgment interest, costs of court and its reasonable attorneys' feest and Pt. AINTIFF'S OR!CIN AL PE1T* TON - Page 4 .
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- 4. cweeding TUEC such other and furthir r list to whien tt entitled.
Respectfully sunmitted.
WORSHAM. FOR5YTHE, SAM PEIJ
& WOOLDRIDGE M. D. Sampels .
State Ser No.17557000 Robert A. Wooldridge State Bar No. 21944000 -
%L g /
K. D. 3ampess s 3200 - 2001 Bryan Tower Dallas, Texas 75201 (214) 979-3000 ATTORNEYS FOR PLAINTIFF TEIAS UTILt!TES ELECTRIC COMPANY 4
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Pt. AINTIFF'S OR!CIN AL PETITION - Page $
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i EXHIBIT 8 NO. 86-6809 O
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TEXAS URIJf1ES ELECTRIC 5 IN THE DIFTRICT COURT OF COMPANY, 5 5
N intiff, 5 5
V. 5 DALLAS COUNTY, TEX AS 5
TEX-LA ELECTRIC COOPERATIVE 5 OF TEXAS, INC.,3,,gk, 5 5
Defendants. 5 14th JUDICIAL DISTRICT MOMON FOR PROTECTVE ORDEM AND OMER RELIEF l
t TO THE HONORABLE JUDGE OF SAID COURT:
Plaintiff Tesas Utilities Electric Company ("TUIC") and Cross-plaintiffs Texas Utilities Company ("TUC"). Texas Utilities Mining Company (*rUMCO"), and Texas Utilities Services Inc. ('TUS!") (hereinafter TUIC, TUC, TUMCO, and TU5! collectively will be referred to as the "TUC Parties") move the Court fort (1) an order that the representation of the TUC Parties in this setton by law firm of Worsham. Forsythe, Sampels & Wooldridge ("WFSW") does not violate the Texas Code of Professional Responsibility (the "TCPR") and that WFSW should not be disquallflod from such representation and (2) a proteettve order proeludisq the parties from engaging in any discovery unrelated to the disquallfloation question pending a ruling on that question. and base this rnotion on the followingt L
A conference was held on September 29,1986 with counsel for the defendants on the merits of this motion. Agreement could not be reached; therefore, it is presented to the Court for a determination.
IL s
This motion is necessitated by the actions of the defendants. After the commencement of this action, the defendants asserted that WFSW's representation of the t TUC Parties contravenes the TCPR and, therefore, that WFSW should withdrew from such . <
1 l representation. Despite these assertions, defendants P.sve said that they do g intend to i
f11e a motion to disqualify WFSW: rather, they intend to continue substantive discovery m this action and,in !!su of a motion to disqualify, they intend to amend their counterelaims to assert violations of the DTPA allegedly arisirg out of that representation. Attached hereto as Exhibit A is a true and correct coo
- W a September II,1986 DTPA demand letter sent on behalf of Defendant Texas Municipal Power Agency (*TMPA*) asserting that MOBON FOR PROTECTIVE ORDER AND OTHER RELIEF - Page 1
WFSW's representation of the TUEC Parties in this action violates the TCPR and the f DTPA and advising the TUC Parties that TMPA's counterclaim will be amended to assert a DTPA claim based on that representation.
III.
By this motion, the TUC Parties are seeking the followingt (1) an order that WFSW's representation of the TUC Parties In this action does not contravene the TCPR and that j WPSW should not be disquaufted and (2) a protective order, pursuant to Rule 166(4) of'the Texas Rules of CivG Procedure, proeludity the parties from engaging in any substantive discovery tarelated to the disquaufloation question pending a ruling on that issue.
BACKGROUND IV.
This action was commenced on May 28,1986. It arises out of the performance of a Joint Operating Agreement (the "JOA") between TURC and the defendants relating to the construction, operation and lleensing of Comanche Peak Steam Electric Station
(" Comanche Peak" or the "Projoet"), a proposed two-unit, nuclear-fueled electric generating station loested in Hood and Somervell Counties, Texas, near Glen Rose. Texas.
By its action TURC le seeking, among other things, money damages from two of the defendants for breach of their payment obligations tmder the JOA and a declaratory jugment declaring various matters regartling TUIC's performance and obligations under the JO A.
V.
The defendants have filed both counterelaims against TUEC and what are, in effect, third-party actions against TUIC's parent, TUC, and two of its sister corporations.
TUMCO and TUSt. By their counterelaims and third-party actions, the defendants are seeking money damages from the TUC Parties for, among other things, alleged breaches
! of the JOA and alleged violations of the DTPA. TUC, TUMCO, and TU31 have flied a eross-eetion against the defendants seeking a declaratory judgment regarding their duties to the defendants tmder the JO A and otherwise.
VI.
WFSW is the lead counsel for the TUC Parties in this action. In addition, WFSW, and its predecessors, have acted as genas! counsel for TUC, its predecessors, and its s@eldiaries, including TUIC, TUSI and TUMCO, for at least 39 years.
l MOT 10N FOR PROTECTTVE ORDER AND OTHER RE!.!EF - Page 2 a .
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wFSW SHOULD NOT BE DISQUAIJFIED VU.
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1he JOA provides that;"[lln order to provide unified management of the Project.
() the Parties authorize and designate (TUEC) as Project Manager . . .." JOA 13.04. As Project Manager, TUEC was given the " sole responsibility for, and (was) fully authorized to act for the Parties with respeet to the licensing, design, construction, operation, (andl maintenance . . . of the Project; and . . . (has) complete possession and control of the Projoet . . . .' id., 1 3.04.
YUI- .
TUEC, pursuant to its obligations as Project Manager, retained WFSW to assist it in the prosecution of the operating license application for Comanche Peak pending before the Nuclear Regulatory Commission (the "NRC") and in many other legal matters concoming the construction and !!eensing of Comanche Peak. WFSW has been engaged in that capacity since commencement of tne Project in 1972.
IX.
The defendants have asserted that WFSW's representation of the TUC Parties contravenes Disciplinary Rule ("D.R.") 5-105 of the TCPR, whleh prohibits an attorney from simultaneounty representing clients with adverse interests. The defendants claim that because they are named parties to the operating !! cense application proceeding pending before the NRC (and in an appeal from an NRC ruling relating to Comanche Peak pending before the United States District Court for the District of Columbia) and because WFSW is one of the attomeys of record in both of those proceedings, an Impermissible conflict of interest exists.
X.
In fact, no violation of D.R. 5-105 has occurred bocadee no attorney-client relationship exists betweet WFSW and the defendants. WFSW la not now, and has never been, employed by the defendants, but rather was, and is, employed by TUEC to assist it in performing one of its obligations Laider the JOA, that is, the obtaining of an operating lleense for Comanche Peak. In fact, the defendants specifleally contreeted away any right to individual representation in the NRC operating Lleense proceeding and with resomet to other matters relating to the construction and lleensing of Comanche Peak when they entered into the JOA and gave TUEC sole responsiblity for such matters. Any appearance by WF3W before the NRC or In any related proceeding was for the account of TUIC, and the defendants' formal designation as " applicants" before the NRC was merely a procedural requirement by virtue of their status as " owners".
MOTION FOR PROTEC1TVE ORDER AND OTHER REI.!EF - Page 3 l
XL Dere has never been an attorney-client relationship between WFSW and the defendants within the meaning of D.R. 5-105. This conclusion is supported by the fact, among others, that the key indicium of an attorney-ellent relationship, that is, the commimiestion of conf!dential information between client and attorney, not enly never occurred here, but could not occur beesuse of TUIC's role in the construction or Heensing of Comanche Peak as set forth in the JOA.
KE.
Furthermore, the absense of an attorney-eHent relationship between WF5W and the defendants is demonstrated by the defendants' own conduet. In connection with the negotiation and execution of the JOA and at all times thereafter, the defendants have been represented by their own counsel in connection with their deanngs with TUEC relating to Comanche Peak, and in sush dealings TUEC has t,un represented by WFSW.
More importantly, the defendants' own cotmeel have monitored the NRC operating licensing proceeding for them. WFSW has also represented the TUC Parties in connection with several adversary issues involving the defendants both related to, and unrelated to.
Comanehe Peak. Indeed, an adversial relationship between the TUC Parties and the defendants with respeet to Comanche Peak and otherwise has existed for at least two years with no challenge forthcoming until the institution of this action.
KEL Even were this Court to conclude WFSW has an attorney-cHent relationship with the defendants within the mean.ng of D.R. 5-108, the defendants have nevertheless impHedly consented to, waived any ibjection to, or are estopped to object to such adverse representation of the TUC Parties in this action. His results from the feet that the disputes taderlying this action were manifested at least as early as May,1983, when Defendant Brasos Electric Power Cooperative, Inc. began making the payments required by the JOA tmder protest. SLnee that time, the defendants have repeatedly asserted that TUIC has breached the JOA and violated the DTPA and have advised TUIC that they intended to sue TUIC for those breaches and violations. During this period. WFSW has continuously represented TUIC with respect to the dispute generally, and more specifloally, in the parties' attempts to settle it. None of the defendants ever objected to that representation, or any other representation of TUIC by WFSW in other matters which involved them.
K1V.
Not only do the principles of consent, waiver and setoppel preclude any disquellfloation of WFSW, but general principles of equity do likewise. As pointed out M0110N FOR PROTEC1TVE ORDER AND OTHER REI.!EF - Page 4
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above, WFSW ret only is the TUC Parties' general counsel and its counsel in : natters relating to Comanche Peak, but it has represented them in connection with the existent dispute long before this action was filed and long before co-counsel, Jackson, Walker, WinsteeG Cantwell & Miller, was retained in this action. Consequently, WPSW has expended considerable time and effort in investigating, and learning the lasues involved in, the dispute. To force WFSW to withdrew from this action at this late date would impose a sestantial hardship on the TUIC Parties. Aeoordingly, under applicable principle of law, WFSW shouki not be disquaufled.
MOMON FOR PROTECTTVE ORDER XV.
A protective order shouki be issued pending a runng on the disquaufication question beoeuse that question presents a peeliminary matter which shoukt be deelded at the outset of an action to avoid an taneeessary waste of funds and delay. As WFSW is the TUC Parties' toad counsel in this action, it must neessmarily partielpate in any substantive discovery. '!he importaneo of this issue and its effect upon the sestantive discovery and proceedings in this matter makes it imperative that it be deelded before the parties proceed with the sestantive case. 'the magnitude and complexity of the substantive portion of this esse establish the need for the protective order pending the Court's ruling upon the disquaufloation issue.
WHEREFORE, PREM " CONSIDERED, the TUC Parties pray that the Court enter
- 1. an order setting a briefing sehedule and hearing on the issue of WFSW's alleged disquallfloation
- 2. a protective order proeluding the parties from taking any discovery other than
- discovery relating to the issue of disquallfloation until after this Court rules J
{ on the issue of disquaHfloations and
- 3. an order that WFSW has not contravened any provision of the TCPR or is otherwise disquallflod to represent the TUC parties in this action.
i MORON FOR PROTECRVE ORDER AND OTHER RELIEF - Page $
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Respectfully submitted, WORSHAM. FORSYTHE, SAMPELS
& WOOLDRIDGE 3200-2001 Bryan Tower Dallas Texas 75201 (214) 979-3000 M.D. Sampels Robert A. WooWridge Richard L. Adams Robert E. Wise Robert J. OC
/ .) )
BY: ' .
- M.D. Sampels /
State Bar No.17587000 JACEBON, WALKER, WDirrEAD CAlfrWILL & MILLER 901 Mah St.
0000 hterFtret Plasa DeBas, Tomas 75202 (214) 983 0000 E. Dansy Chambers John 3. Kyle T. Mlahmal WDson AfrORNEYS FOR PLADr11FF AND CEO&PLA X11FFS TEXA5 UT!!I!1EB ILECTRIC COMPANT, TEXAS U11LITIES COMPANT, TRIAS U11LT!!EB SERVICES INC. and TRIAS U11IJTTER MDf!NG COMPANY CER11FICATE OF SERYtCE I heretPF eartify that a oopy of the above and foregohg Motion For Protective Order wesplaced in the United States reall, pastage prepaid, to an ooimsel ot record on this the a day of October,1900. / , [
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, { C (. ).
M0110N FOR PROTEC11VE ORDER AND 011tER RELIEF - Page 8 o .
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Fu t s mio M T & J Awoms n a amen $ ness 40
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use, anun September 18, 1986 VIA MAND DELIVERT Re: No. 46-6809-. Texas Utilities Electric Company
- v. Tea-La Electric Cooperative of Texas, Inc.
and Teaas Municipal Power Agency--In the A-14th Judicial District Court of Dallas Coun .....ty, Texas Texas Utilities Electric Company c/o Mr. Robert A. Wooldridge Worsham, Forsythe, Sampels & Wooldridge 2001 Bryan Tower, Suite 3200 Dallas, Teams 75201 Gentlemen:
This("TMPA*)
Power Agency letter is. being sent on behalf of Texas Municipal 4
The law firm of Wo rsham, Forsythe, Sampels &
, Wooldridge (*Worsham, Forsythe*) has been engaged by Texas l
Utilities Electric Company (*TUIC*) and its predecessor, as Project Manager, Applicants, to appear and represent the joint owners and including TMPA, before the Atomic Safety and Licensing Board of tha United States Nuclear Regulatory com-mission (the Operating *NRC*) in proceedings concerning applications for Licenses and for Construction permits for the Comanche Peak Steam matters concerning Comanche PeakElectric Station and forums.
in other in relation to other l Worsnam.
l Forsythe has also filed a lawsuit in the District Court of Dallas County, Texas, on behalf of TURC and against TMPA and two of the other ref erenced case") . joint owners of Comanche peak (*the above Worsham, Forsythe has unreasonably refused to withdraw from representing TUIC in the above referenced case, even though the law firm has irreconcilable conflicts of interest in suing parties whom it has and is representing in i
EXHIBff A
A U
Teaas Utilities Electric Company c/o Mr. Robert A. Wooldridge September 9, 1986 Page 2 matters arising out of the same events, and even though the firm t,as been called upon several times to so withdraw. TMPA, as one of the joint owners and Applicants being represented by Horsham, Forsythe in the various proceedings before the NRC and in other Comanche Peak matters, is now being sued by the same lawyers you chose to represent it pursuant to your undertakings and obligations under the Comanche Peak Joint ownecchip Agree-ment (*JOA*).
TUIC has led TMPA to believe that Worsham, Forsythe represented all of the joint owners and Applicants, including TMPA, before the NBC and in the other matters connected with Comanche Peak. TUIC has paid fees to Worsham, Forsythe out of I
Comanche Peak joint ownership funds belonging to TMPA and the other joint owners for legal services allegedly rendered to the joint owners and Applicants by Worsham, Forsythe. Worsham, Forsythe has signed and filed pleadings as " Counsel for Appli-cants" with the NBC and with t!ge United States Court of Appeals for the District of Columbia. Worsham, Forsythe has filed an Affidavit with the NaC stacing it is ". . . authorised to reply
. . . on behalf of the Applicants . . . .
- Worsham, Forsythe wrote a letter dated August 28, 1984, to the Administrative Judges of the NRC stating that Norsham, Forsythe *
. . . Chasl been retained by (TURC] and appear (s] in this proceeding gjl htlLgli of the Applicantg pursuant to a Joint ownership Agree-ment among them." (Emphasis added).
Itembers of Worsham, Forsythe have d6nied and continue to deny to us that their law fire is representing and has represented TMPA. If such denials are true and Wo r s ham ,
Forsythe is not and has not been representing TMPA before the NRC and in the other satters concerning Comanche Peak, then TUIC has violated $17.44(b)(S) and $17.50(a)(3) of the Texas Deceptive Trade Practices Act (*DTPA") by falsely representing to DEPA that it engaged Worsham, Forsythe as lawyers to repre-sent TMPA in joint ownership matters pertaining to Comanene Peak and in licensing proceedings before the NRC, and in 94ytnq Worsham, Forsythe legal fees out of joint ownership funds for representing TMPA in such matters.
If Worsham, Forsythe has represented TMPA before the NBC and in other matters concerning Comanche Peak and before the NRC, then Worsham, Forsythe has irreconcilable conflicts of interest, and TUIC is engaging in an unconscionable course of action by continuing to have Worsham, Forsythe represent TMPA.
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Tezas Utilities Electric Company c/o Mr. Robert A. Wooldridge September 9, 1986 Page 3 and having Worsham, Forsythe prosecute the abcVe referenced case on behalf of TUIC against TMPA.
Please consider this a formal demand on behalf of TMPA that, within thirty (30) days of receipt of this letter; l 1. TURC confirm or deny that Worsham, Forsythe has represented, and is representing, TMPA before the NBC and in other matters concerning Comanche Peak;
- 2. If Worsham, Forsythe is oct, and has not been, representing TMPA before the NRC and in other satters connected with Comanche peak, TUFC inusediately refund all joint ownership funds contributed by TMPA that were used to par Worsham, Forsythe's leq41 fees;
- 3. If Worsham, Forsythe has been representing TMPA before the NBC and in other satters related to
' Comanche Peak, that TURC famediately cease and desist f rom using such firm in any litigation where TUEC is adverse to TMPA, and that TURC order Worsham, Forsythe to wsthdraw from its representation of TUIC in the above referenced case;
- 4. TUIC notify TMPA at once what law firm, or law firme TUIC has engaged to represent TMPA before the ERC and in other matters related to Comanche peak, pursuant to TURC's obligations under the JCA;
- 5. If Worsham, Forsythe is not representing TMPA before the NRC, that TUIC notify the NRC at once that 4
l Worsham, Forsythe does not represent TMPA and clarify to the NBC what law firm or law firms are representing all of the Applicants, including TMPA before the NRC.
i If TUIC does not comply with these demands within 10 days, i TMPA's pleadings in the above referenced case will be amended to seek all relief available under $17.50(b) of the DTPA caused on account of the matters referred to above, including but not limited to treble damages and attorneys' fees.
Furthermore, TUIC's f ailure to furnish TMPA with coun-set upon which TMPA can rely for effective, confidential and o =
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l Texas Utilities Electric Company c/o Mr. Robert A. Wooldridge September 9, 1986 Page 4 proper legal advice and representation before the NRC consa.i-tutee a breach of TURC's contractual duties and responsibil-ities under the JOA for which TMPA will seek additional damages and attorneys' fees pursuant to both Article 38.004 of the Texas Civil Practice & Remedies Code and the Texas Deceptive Trade Practices Act.
Very truly yours.
A Slake Tart ST:dc j
- 0214a i
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EXHIBIT 9 i
No. 46 6809
- EXAS "TILITIES ELECTRIC $ IN TME DISTRICT COURT OF 00MPANY, 5 Plaintiff, $
V. $ DALLAS COUNTY, T E X A $
TEX-fA rLECTRIC CCCPERATIVE $
OF TEXAS, INC., TEXA8 $
MUNICIPAL POWER AGENCY and $
sAA30s ELECTRIC POWEA $
COOPERATIVE, INC., 5 Defendants. 5 A-14TE JUDICIAL DISTRICT
.10 TION TO DISQUALIFY ATTCANEYS FOR TUSC AND RESPCueE TO TURC's NOTION FOR PROTECTIVE 0805A .
. AND OTHER RELIEF i
l Teams Municipal Power Agency ('TMph'), Tes.La Eleetrtc Ceeperative of Tesse, Inc. ('Tes-La') and trasee Electric Power Ceeperative, Inc. (*Brases") (cellectively referred to se
'Movents') nereby respectfully roguest that the Court disqualify the law fire of werenas. Forsythe, Sampels &
Weeldridge (*Wersham, Forsythe') free representing Temas Utilittee Ceepony ("TU'), Teama Utilities Electric Ceepany
('TUIC*), Tomas Utilities Mining Ceepany ('TUNCO*), and Tomas Ut111tice Services Incorporated (*TUS!*) (somettaea cellective.
i Ly referred to se 'TURC*) in this action and any other action wnere TURC and the Novants are adverse.V V This setten is partially filed in reopense to TUIC's Metten For Protective Order And Otner Reitet, filed Octeter 6, 1984. TUIC's roguest for a preteettve order neiting discovery was denied by tA1e Court duttag tne hearing conducted on Oe=
tener 7, itse. Aseerdingly, by tais estion, Novants seem tne disqualification of Wrenas, Forsythe, and roepend to that per=
I tien of TURC's Retten weten seems an order taat its atterneys have not centravened any provisten of the Tomas Code of Pre-feestenal Aceponett111ty and are not etnetwtse disqualified to represent TURC in this attien. ),gg metten for Protective Order and Other 411ef 1 EV.
l l MOT!eN TO O!5 QUALIFY ATTCRN YS FOR TU.C AND R SPCNS TO TU C'S
,cTreN Fe. ,.ofie?:vi caer 0 o # . . ury .. ,a,e t i
L_ _ ___ _ _ _ _ _ _ _ _ . _ ___
Movants have both corresponded and met wtta represent-atives of Worsham, Forsythe and have requested that tne firm withdraw from representing T EC in this case. Worsham, Forsythe has declined to do so.
Movents recognise the serious nature of attorney dts-qualification and do not approach this action lightly. How=
ever, Movants have been placed in a situation where a notion to disqualify must be brought to preserve the integrity of the judicial process and to allow these proceedings to go forward in accordance with the Canons of Ethics. In essence, Novants are compelled to bring this estion because Mershes, Forsythe
- repre- sents and has represented Novants before the United States Nuclear Regulatory Commission (*WRC') in aatters i
directly re- lated to Comanche Peak, the very subject of this litigation, while at the same ties acting as counsel for TURC against Movants. W1'thout relief free this Court, Novants' interests will be seriously compromised .
PRELIMINARY STATENBr? AND St254AAY OF AAG12 TENT the case before this Court, and specifically this motion to disqualify, must be censidered in 11r e nt ci the enten-sive legal proceedings which have evolved from the construction and licensing of the Comanche Fiat Steam Electric Station
(' Comanche Feat' or 'the Project'), a two-unit nuclear-fueled I
electric generating facility located near Glen asse, Tenas.
Those entensive legal precedings predated this suit by many years. Comanche peat is joint,1y owned by four entities. TUIC, through its TUGCC division, is Project Manager of Comanche Feat.
NRC proceedings for Comanche Feat have been under way for many years. Worsham, Forsythe has long represented TU, l
MOTICN TO O!SCtlALIFY ATTORNEYS FOR TUEC AND RESPON3E TO TUEC'S MOTICN FCA PROTECTIVE ORDER AND OTHER RELIEF +- Page 2 l
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s W TUIC, and their predecessors in interest in,these proceedings %
tefore the NRC. M It also'nas rep' resented all af the Cther owners of Comanche Peam, incluoing Movants, before the NRC.
Movants nave never retaat.ed separate counsel to represent them "
as owner / Applicants in'the licensing proceedings. M Instead, Movants have relied on worsham, Forsythe and its co-cou9sel for such representation before the NRC.
While continuing to joint'.y represent the interests of the Comanche Peak co-owners before the NRC, Worsbaa, Forsythe s
\i U k
brought this suit on' behalf of TUIC against the three other owner / Applicants. TUIC's Original Petition sought a ,
declaratory judgment under $$ 37.001 11 333. of the Tease Civil practices and Remedies Code concerning TURC's saleged rights as against its ce* owners,'under the Joint Ownership -
Agreement (*JOA"). TURC.also alleged that Movents are necessary partice to that cause of action in which it seems sa j unspecified amount of actual damages free Tem-La. ,
s Subsequently, TUIC amended its Original Petition to include breach of contract clatas against Brasos.
This disqualification action rests on two separate but ti.terrelated grounds. Firs *, because of its joint representation and active involvement on behalf of Novants and ) ,
- the other Applicants in the proceeding before the NRC to license Comanche Peels, worsham, Forsythe is disqualified under Canon $ of the Temas Code of Pro *resional Ansponsibility.
j Otsqualification under these circumstances is marf.atory. A law firmwhichhasjointlyrep\ese,ntedpartiesinvolvedinacommon i y Movents herein refer to all proceedings before tne NRC with respect to tae Comanche Poet Project cellectively as "NRC proceedings' unless otNorwise specifically designated.
J/ kg 333 n.11,1[L[g,g.
80T!CN TO O!$ QUALITY ATTORNEYS FOR TUEC AND RESPONSE TO TUEC'S MOTION FOR PROTECTIVE ORDER AND OTNER RELIEF -- Page 3 l
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j pursuit is automatically disqualified tsom representing one party in a suit agatnst the ceners. Because of t
- petor and continuing representation of all the Comanene Peak owners before tne NRC, Worsnaa, Forsythe must be disqualif ted from representing TURC in this suit against Movents.
Second, the legal standards flowing from the relevant Disciplinary Rules clearly demonstrate that Worsham, Forsythe must be disqualified because its attorneys may be called as witnesses in this action. Worsham, Forsythe attorneys have been actively involved in all aspects of the Comanche peak Licensing effort. The firs undoubtedly possesses kawwledge ,
concerning some of the delays in the constructica and licensing of the project which have adversely affected Novants. Thus, the testimony of Worsham, Forsythe attorneys will be necessery. For this reason as well, Wershes, Forsythe must be disquatified. ,
STATERElst QF FACTS A. The Preiect In 1972 TURC announced its intention to design and build Comanche Peak. In February, 1978, TURC filed with the NRC en application for the issuance of operating licensee for the two Comenske Poet units. Since 1972, Wersham, Forsythe has represented TURC in preceedings and hearings before the NRC, which have yet to result in the issuance of operating Liceness for Comanche Peak.
In January,1979, TMPA became a part owner of Cceancne Poet by esecuting a Joint owneTship Agreement wtta TP6L, OP6L, TESCO, and TUGCC (TURC's predecessors in interest). Branos esecuted the same centract five months later, and Ten-La became a party to the Joint Ownership Agreement in 1980. TMFA presently owns a 4.2 percent ownershtp share in the Pro}ect, a
MOTICN TO O!SQUALITY ATTORNEYS FOR TUEC AND RESPONSE TO TUE*'S MOT!CN FCA PROTECTIVE ORDER AND OTHER RE!!EF - page 4 s
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./ Brazos presently owns 3.8 percent and Tex-La presently owns a 2-1/6 percent share. Worsham, Forsythe's representation of each Movent nefore the Nhc dates back to the time that T"CCQ filed to amend the construct &on permits for Comanche Peak Units 1 and 2 to add the prospective co-owners as permittees.
B. The Joint Ownershis Aereesent Under Paragraph 3.04 of the JCA, TURC, as Project Man.
aget, is a fiduciary for the other owners, including Movants, and has " sole responsibility for, and is fully authorised to act for the Parties with respect to the licensing, design, con- ,
struction, operation, esintenance . . . and deceamissioning of the ' proj ect. . . .
TURC aise is given
- complete possession and control of the Project
- in order to be sale to *act with due diligence in performing its obligations and (tol use its best efforts to timely complete construction et, and to place into service, each unit of the Project.*
the JOA also estaelished an Owners Cosmittee composed of one primary representative from each owner. The purposes of the owners Committee, according to JOA Paragrapa 4.01, include
" securing ef fective cooperation, interchange of information, and providing cenaultation on a prompt and orderly easts among FMe facties. . . .* Voting power on the Owners Committee is prop 6s t, ente to ownership share, JOA Paragraph 4.04, so that TUIC f or its predecessors) retains control.
TURC, as fiduciary and
- Project manager," has used Worsham, Forsythe as legal counsel on behalf of all of the App 11cante liggg, including Movents) on all matters before the NRC relating to Cossache Peak. Although three other Law firms aise provide representation before the NRC, Worsham, Forsythe MOTION 10 DISQUALIFY ATTCRNEYS FOR TUEC AND RESPCNSE TO T"EC'S MOTICH FCR PROTECTIVE CRDER AND OTHER RELIEF -- Page 5
\ has served as lead counsel for tne Appiteants in tne NRC proceedings.1/ This f act was potnted out my TUEC's Mtenael D.
Spence in a memorandue distetDuted to the Comanene Peau Cwners Committee dated January 9, 1985, a copy of which is attached as Exhtett A. See also letter of Septeater 10, 1984 from Tom Dignan of Ropes & Cray to counsel for Brazos, Tex.La and TNFA.
a copy of which is attached as Exhibit B.
Furthermore, under the JCA, each minority owner of Comanche Peak is omligeted to pay its percentage share of the costs of construction, including legal fees.I/ Paragraph 1.03 of the JOA defines costs of construction to include 'all
- direct and indirect costs and esponses reasonahiy incurred by or on behalf of the parties with respect to the project that are properly chargeable under the Uniform System of Accounts to the study, acquisition, design, engineering, licensing, installation, and construction of the Project .
- Accordingly, a suestantial part of the fees collected by Worsnaa, Forsythe for its efforts in connection with the licensing of the Project has been paid by Novants.5/
- C. Worsham. Forsythe's Conflict of Interest The worsham, Forsythe representation has permeated all aspects of the eatensive and ongeing proceedings before the NRC. A central issue in this littgation is whether TURC has 14 The other counsel are Ropes 6 Gray of Boston, Massachusetta Bishop, Liberman, Cook, Purcell 6 Reynolds of Washington, D.C.s and Roy Lessy, also of Washington, D.C. Sgg letter dated August 20, 1984 fios Roeert A. Weeldendge of Wersaan. Forsythe to Administrative Judges, Nhc (attached hereto as Kan1 bit C).
1/ The omligation to same payments as not, however, un-Limited.
1/ Altnough Brazos, TMPA and Ten-La have each requested that TUEC provide information as to the amounts of project montes expended for legal fees as payment to each of the firms representing the owners an the licenstng proceedings, TUEC has so f ar refused to do so.
MOTICN 70 O!SCCALIF" ATTCRNEYS FCA TUEC AND PESPCNSE TQ TUEC'S MCTION FOR PRCTECTIVE CRDER AND OTHEM RELIEF -- Page 6
properly performed its coligations under tne JCA to design, construct and octata an operating 1&conse for each of tne Comancne Peam units in a prudent and ttsely manner. The dispute, in part, grows out of tne severe problems TUEC has nad in retaining its construction permit and in obtaining a license from the NRC to operate Comanche Peak. At the times novants became joint owners, and in the years that followed, Movants we,e re,e.tediy a..ured ., mC that co-ncne Pea wa. .eing l
adeqt ately designed, constructed and managed and would be timely licensed by the NRC. However, the NRC has now found serious deficiencies with tae Project, involving, in part, ,
. TURC's Quality Assurance and Quality Control programs in the areas of both design and constructies. 33g, S.12.a.' TM Utilitian Generatine Comsany (Comanche Peak Steam Electric station, Units 1 and 2), neeerandus and Order (Design Cuality), 10 N.R.C.,1410 (ASLB 1983), ggg111gg, 19 N.R.C. 209 (ASLS 1984) and 19 N.A.C. 1509 (ASLS 1984). These defi=
ciencies, as well as TURC's manner of dealing with the NRC, have resulted in the NRC's ineaility to find that the Project has been designed and constructed in accordance with the NRC's requirements, and thus have prevented the issuance of operating Licenses for the Comanche Peat units.
18ersham, Forsythe has represented all owners and the Project Manager. as joint Applicants, in the entensive proceedings Defere the Atomic Safety and Licensing Board
(*ASLS*) and the Atealc Safety and Licensing Appeal Soard
(' ALAS *), divistees of the NRC, and before the NRC generally, and has had continuous contact with regional and headquarters NRC staff. Because of that continuous and substantial tavolvement, Worsham, Forsythe has knowledge about the MOTION TO O!$ QUALIFY ATTCRNEYS FOR TUEC AND RESPCNSE TO TUEC'S MOTICN TCR PROTECTIVE CRDER AND OTHER RELIEF -- Page 7 l
k circumstances surrounding ene delays in recetyt of tne NRC License, and the difficulttes in Applicants' dealings wata ene N RC . As Applicants' lead counsel, Worsham, Forsythe attorneys are uniquely qualified to testify on tasse satters. This is particularly true to the extent that delays may have been caused by the approach TUEC has taken towards the NRC in sts dealings with the agency in pleadings and statements prepared by its attorneys.1/ Therefore, resolution of the instant action will certainly require deposition and will probaaly necessitate trial testimony of Worsham, Forsythe attorneys.
In addition, on January 28, 1986, the NRC informed the Applicants that their construction permit for Unit 1 of the Cosanche Peak had espired some six months earlier. Se NRC characterized this lapse as a 'regrettatie and wholly avoidable omission by the Tomas Utilities Electric company" and noted that never before in' the history of the civilian nuclear power program had a license applicant allowed a construction permit to lapse. Texas Utilities tiectric Cossany, 23 N.R.C. 113, 115 (1984), petition for review filed sub noe. Citizens Asso-etation for Sound Enerev v. United States Nuclear Reeulatory Commission, No. 84-1149 (D.C. Cir. Mar. 13, 1986). Although the construction permit subsequently was renewed on a provistonal basis, tne propriety of that renewal is still on appeal and may also be the subject of an ASLS hearing. 11 1/ For esseple, on Nevesoer 2$.1985, the ASLS issued an order in which it repetsanded"npplicants for filings which rea peatedly fell short of what ts espected in Licenstag proceed-ange and raised serious questions concerning Appiteants' cred-thility before the NRC. Temas Utiltttes Electrte CoogenY, 22 N.R.C. 835, 839 (ASLB 1985) ( we espect Applicants to me forta =
right about what they do, the proeless that resetn, the requia.
tory content, the areas of uncertataty. By livtag up to that tdeal, Applicants walk f ac111 tate ttsely Board actton. If enat tdeal remains elusive, we will have to me susptetous, and action on our part will De celayed or will ne unfavorable.')
MOTION TO DISCUALITY ATTORNEYS FOR TUEC AND RESPONSE TO TUEC* S MCTICN FOR PROTICTIVE CRCER AND OTHER RELIEF -- Page 8
) This incident clearly wt11 :e relevant to tne issues La tais case. Agata, the teettsony of Worsnam, Forsytne wt11 : needea to help determine where the responsibility for tne timely
, renewal of sne permit may lie as among TUEC and the four law firms representing the Applicants before the NRC.
ABGUMENT I. WCASRAM, FCRSYTRE IS AUTCHATICALLY DISQUALIFIED UNCER C#%CN 3 A. A.i Attornew-Client Relationship Exists TUIC has taken the position that no conflict of inter-est exista *because no attorney-client relationship exists
- between (Worsham, Forsythe]* and Novants. (Motion for protective Order And Other Relief,1 X.) Movants maintain that the f act that worsham, Forsythe has represented and continues to represent thee may be easily demonstrated in three ways.
These three distinct arguments place that issue beyond dispute.
As a general matter, a professional relationship be-tween an attorney and client need not be a formal or even an express attorney-client relationship, but may be established by the intent of the parttee. Westinehouse Elee. Corp. v.
Kerr-4cGee Cors., $80 F.2d 1311, 1319-20 (7th Cir.), eggt dgnigg, 439 U.S. 955 (1970) . Thus, an attorney-client re-Lationship may be cr6ated by the client's perception that he or she has been in contact with an attorney in the attorney's pro-fossional capacity with a manifested intent to obtain pro-f ossional legal advice. C. McCorstet. Law of Evidence, $ 80 at 203 (3d ed. 1984). See slog E. F. Mutton 4 Co. v. Brown .
305 F.Supp. 371, 309 (S.D. Tex. 1969) (*In asking the Court to constder all the circumstances when determining whether Brown believed counsel to be his attorneys, Nutton has proposed a MOTICN TO CISCUALIFY ATTCRNEYS FOR TUEC AND RESPCNSE TO TUEC'S MOTICN FOR PROTECTIVE ORCER AND OTHER RELIEF == Page 9
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w proper inquiry. Stown's reasonsolo 2nderstanding of nas relation with ene attorneys as tne centro 11&ng factor here.*).
Througnout the NRC proceedings, Movants have believed
{
that worsnaa, Forsythe was representing them and have relied l
solely on worsham, Forsythe for all matters concerning tne 1 licensing of Comanene Feat. No reasonable belief to the contrary is possible in view of the "act that Worsham, Forsythe I and the other law firms which it directs have repeatedly represented themselves to the Nhc as counsel for g((
a pplicants.I/ Movants have relied and continue to rely on Worsham, Forsythe to help secure MAC licenses for Comanche Pe a k . Thus, Novants rely esclusively on TUSC and the four law firms led by Wersham, Forsythe, for representation before the W hC .
Apart from Novants' reasonable understanding of their relationship with We'esham, Forsythe, objective proof that the attorney-client relationship exists between Worsham, Forsythe and Movants clearly lies in the fact tbat, as previouly ex.
plained, Novants as part owners under the JCA paid a propor-tionate part of Worsham, Forsythe's fees in connection with the l
l Comanche Peam licensing satter. Sgg E. F. Eutton 6 Co. v.
Brown, 395 F. Gupp. at 388.
Moreover, under well-established case law, an attorney's appearance in a judicial or semi-3udicial proceeding i
l l
l 1/ Attached as Ennibit D is a pleading in the NRC proceedings which, typically,"Ts signed by Worsham, Forsythe as
" Counsel for Applicants." Furthermore, an the af fidavit attached to the pleading, dated Novencer 27, 1983, Rocert A.
Wooldesdge, of the Worsham, Forsythe firm, states under oath that *he is attorney for Applicants.* The ' Applicants" at all ttaes relevant to this motion were the f our Comanche Feat jotnt owners: TUIC, Brasos, TMPA, and Tem-La.
l "CTICN TO O!$ QUALITY ATTCRFEYS FOR TUEC AND RESPCNSE TO T"EC'S MCTICH FCR PRCTECTIVE CRDER AND CTHER RELIEF -- Page 10 l
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k (such as NRC licenstng proceedings)1/ creates a presa.mpeton tnat an attorney-citent relationship exists between tne 3
attorney and tne person on whose behalf no appears. E. F.
Mutton a Co..v. trown, 305 F. Supp. at 387. This presumption sntfts to TUEC, the party denying the existence of the relationship, the burden of persuasion. &$33 g tethlence Steel Corp. v. United States Metal Plastics, Inc.,
265 F.Supp. $35, aff'd sub noe. Sethlehem Steel Corp. v.
Ogvggg, 389 F.2d 441 (4th Cir. 1968). TUEC's unsupported assertion that Worsham, Forsythe's representation of Movants before tne NRC was *Derely a procedural requirement by virtue .
of their status as ' owners of Comanche Peak (Metion For Protective Order And Other Relief 1 X) is insufficient to I
rebut the presumption that an attorney-client relationship exists. TUIC cites no rule or requistion in support of this assertion, nor could it, for the NhC's position on this issue is directly to the contrary.
In Public Service Co. of Indiana, 7 N.R.C.179 ( ALAS 1978), tne Nhc flatly rejected the claim that a ' mere owner need not be an applicant or hold a Commission license
- under Sections 101 and 103 of the Atomic Energy Act, 42 U.S.C.
$$ 2131 and 2133. 7 N.R.C. at 199. After observing that the company advocating that position had presented no reason why Congress would want to esempt owners of nuclear power plants f rom Commission regulation as licensees, the Commtssion stated:
To the contrary, it takes little to appreciate that an owner can influence the actions and attttudes of its tenants and agents without. technically teing in
" possession" of the premises. Given the safety con-1/ Under Nhc requistions, a partnership, corporatton, or unincorporated association may be represented in a proceeding ettner my a duly authertzed officer or seaber, or ey an attorney-at-law. 10 C.F.R. $ 2.713(b) (1996).
MCT CN TC O!5 QUALITY ATTCRNEYS FOR TUEC AND RESPCNSE TO T"EC'S MCTICN FCR PROTECTIVE CRDER AND OTHER KELIET -- Page 11 I
N stderations wttn wnten Congress was primartly con-corned in ene atomic Energy Act, at taaes much more tnen car _e assertton ano tmagtnattve statutory een-struction to convince us enat tnose wno would own a nuclear power plant do not need to anoLY for a Licenge from sne cometaston.
7 N.R.C. at 200 (espnasts added). Additionally, the Commissten noted that *significant areas of the Commission's regulatory authority could be placed under a cloud by accepting Punkte r
Service's reading of the Act." 11 at 201. Thus, in Pgglic Service Co. of indiana, the Commission held that co-owners of nuclear power plants must be co-applicants for the operating License so as to bring thee under the Commission's regulatory authority. Clearly, as joint owners of Comanche peak, Movants are required by the NRC to be " Applicants' for the Comanche reek operating license in the full sense of the ters, and to the same estent as TUIC, regardless of the f act that each Movant owns a smaller percentage of the plant than TURC.
Moreover, despite the f act that worsham, Forsythe's licensing ef forts are directed by TUIC, any representations made to the NRC are made on behalf of gli co-owners as
- Applicants' in an operating license proceeding. !gg Cleveland Electric tiluminatine Co., it N.R.C. 1209 (DD 1983) (NRC held that one of the applicants, CEI, as agent for the other plant co-owners / applicants, had made material falso statements by f ailing to include information concerning and on behalf of its co-owners / applicants during the licensing review for the Perry Nuclear Power Plant).
Equally 1 acting in merit is TURC's assertion that the lack of an attorney-client reEationship is evidenced by the purported f act that no communication of confidential snforma-tion between Novants and Worsham, Forsythe has occurred or could occur under the terms of the JCA. (Motion For protective MOTION TO O!SCUALIFY ATTCRNEYS FOR !UEC AND RESPONSE TO TUEC'S 4 MOTION FOR PROTECTIVE CRCER AND OTHER RELIEF -- Page 12
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I r"'s
\s ,,/ Ceder And Cther Relief 1 XI). The communication of cont t- !
donces as not a prerequastte to an attorney-citent relationsnap and is by no seans a prerequisite to attorney disquaiffication on the ground of conflict of interest. Hall v. strenfield.
No. 9346 (Tex. App.--Temattana, June 7, 1986) (writ not yet reported): E. F. Mutton & Co. v. trown, 305 F. Supp. 37L. The argument that the receipt of confidential information is a prerequisite to disqualification was squarely addressed and rejected by the court in the Nutton case.
The issues before the court in the h case were identical to these presented heres whether an attorney-client
- relationship esisted and, if so, whether the attorney for two formerly joint clients should be disqualified from appearing in litigation between thee over a matter which was the subject of the former representation. The court found that an attorney-client relationship esisted by virtue of Brown's own perception and because Button's couneet had appeared on behalf of the defendant Brown in semi-judicial proceedings. The court addressed Mutton's argument that Brown was not entitled to move for disqualification because he had communicated no information to counsel which was confidential as to Mutton. Eutton relied upon cases citing the narrow duty not to disclose confidences, where the actual disclosure of confidences was required. The
- court compared these cases with the broader concept of the attorney's ethical and fiduciary duty not to represent confiteting interests. 305 F. Supp. at 393-94. The court noted that the termer duty isadounded only upon the interest of encouraging and protecting contadences, and protects only the confidential information disclosed, while the latter duty encompaeses both the protection of confidences and MCTICN TO DISCUALIFY ATTCRNEYS FCA TUEC AND RESPONSE *O TUEC'S MCTION FC A PROTECTIVE CADER AND OTHEA MELIEF -- Page 13 l
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the protection of the client's amtlity to repose trust and confidence in ene attorney. &
In resolving the sue regarding the need for demonstrating confidenttal sceaunications, the court reasoned that at must both protect a client's actual disclosures and the attorney-client relationship itself--a relationsnip which must .
l be one of trust and reliance. Therefore the Court held that I the receipt of confidential information is not a prerequistte to disqualification on the ground of conflict of interest.
& at 395. Thus, an attorney-client relationship clearly say estet in the absence of the client's disclosure of .
confidences. Whether novants have communicated confidential information to Worsham, Forsythe is irrelevant to the disqualification question, and TURC's argument against disqualification must be rejected.E Additionally, the attorney-client fiduciary relation-ship also any be evidenced by esamination of the nature of the services performed and the circumstances under which informa-tion was exchanged between attorney and client. Westinghouse Electric Corn. v. Eerr-meGee Cors., 500 F.2d at 1319-20. In other words, the attorr.ey-client relationship may be implied f rom the conduct of the parties. E. F. Mutton & Co. v. Brown, 305 F. Supp. at 388. In connection with the Comanche Peak Pro 3ect, Worsham, Forsythe held itself out to third parties and Judicial administrative tribunals as representing the interests t of all the Comanche Peak owners, not just those of TURC (Enhibit 0). TURC belatedly contends that Movents' own conduct W
present As a f actual matter, we must point out that at tne time the only tatng elocuing confidenttal communicattons between Brasos,19tPA, Tex-La, and Worsham, Forsythe is Worsnaa, Forsythe's role as counsel for TUEC in ents case.
l MCTICN TO O!$CUAI.ITY ATTORNEYS FOR TUEC AND RESPCNSE TO "'.*EC'S MOTION FOR PROTECTIVE CRCER AND OTHER RELIEF -- Page L4 O
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r demonstrates the acsonce of an attorney-client relationsat;
! Motion For Protecttve Ceder And Ctner Rettet, t XII) cecause Movants nave been represented by their own counsel in connection wata the negotiation and execution of the JCA and mecause Movants' own counsel have allegedly monitored the NRC proceedings on their beha12. This argument, to the extent that it is true, is insufficient to reaut the presumption of l l
1 representation aristrq from Worsham, Forsythe's unmistakable I conduct.
The bare f act that Movants had independent counsel prior to their execution of the JOA and during their respective '
participation negotiations is entirely without significance to the issue of whether worsham, Forsythe has a conflict of interest in this proceeding. Second, a contention that Movents' own counsel have monitored the NRC proceedings is equally irrelevant. ' movents have never retained separate
- counsel to represent them as applicants in the licensing proceedings or as construction permit-holders in the various enf orcement proceedings that have arisen over the years.11/
, That Movants have retained separate counsel to periodically t
l l 11/ On November 4, 1986, counsel for Brasos sought leave i
to specially appear before the ASLS in the operating License proceedings in order to lodge a statement about the representation probles in that proceeding. Brasos had requested that the statement be included in a pleading being
, filed by the law fire of Ropes & Gray, co-counsel with worsham, i Forsytne an the licensing proceeding, but Ropes & Cray decisned l co do so. This pleading, and the noveneer 7, 1986 supplement thereto, are attached hereto as Exhiett E.
l Similarly, on neveneir 4, 1986, counsel for Tes-La sought leave to specially appese before the ASLS in tne operating License proceedings, and filed a pleading on Tex-La's behalf, again because Ropes & Gray declined to file a pleading tattng the position whten Tex-La wtsned to advance.
t MCTICN TQ DISQUALIFY ATTCRNEYS TCR TUEC AND RESPCNSE TO TUEC'S MCTICN FCR PRCTECTIVE CRCER AND CTHER RELIEF == Page 15
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monitor tnese proceedtags certainly does notatng to 4:r:1ste the attorney-citent relattonsnty cetween Movants as
- Applicants
- and Worsham, Forsythe as counsel in the NRC proceedings. Unquestionaoly, Movants have been clients of worsnas Fersythe, together with TURC and the other Comanche Pean co-owners ' collectively' as applicants an all proceedsngs before the NRC.
- 8. Worsham, Forsythe Is Automatically Disqualified From Representing TURC Against Movants Because of Its Representation Of All Qwners In The NRC Pro-coed ine The legal stands /ds by which this action should be .
judged are clear. Canon i of the Texas Code of Professional Responsibility governs th 4 ethical conduct of all Texas lawyers who represent conflicting interests. SUPRIME COURT OF TEXAS, RULES COVERNING TEE STATE SAA CF TEXAS art. X $ 9 (Code of Pro-fossional Responsibility) (Vernon Supp. 1986) (hereinafter cited as TEXAS CODE OF PROFESSIONAL RESPONSIBILITY]. E This Canos provides that *[al lawyer should exercise independent professional Judgment on behalf of a client.' In implementing Canon S. Disciplinary Rule 5-105 prohibits accep- tance or continuation of employment if the interests of another cl.ent mag impair the independent professional judgment of the lawyer. The rule specifically provideo 13/ Forty-eight states, including Texas, have or had at one time given the Code of Professional Responsibility the force of law by adopting tt as a court rule. 3 S Developments in the Law--Conflicts of Interest in the Leeal Professton, 94 Marv. L. Rev. 1244 (1981). Because the Code 18 a untform statute, Texas courts consador optaions an other juttsdtettons to be persuasive authority. Texas dectatens on Disciplinary Rule 5-102, for emaaple, have relied on and are in accordance wt th opinions in other 3ur tsdictions. E , g;g , Untted S
Factfic Ins. Co. v. Iardenetta, 661 S.W.2d 244 (Tes. App.--San Antonto 1983, no west): c l . U. S. en rel. Sheldon tiectrte Co.
- v. Blacunawa Meattne 6 Piumanne, 423 F.Supp. 486 (S.D.M.T.
( L976).
l MCT:CF TO O!$CUALIFy ATTCRNEYS FOR !"EC AND RESPCNSE TO T'.*EC's MOTICN FCR PROTECTIVE CADER AND OTHER RELIEF -- Page 16
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\- ') (A) A lawyer snail decitne proffered employment af sne exeresse of nas tncopenoent professional ;acg.
sent in menalf of a client will ce or ts laxely to to adversely affected my tne acceptance of the proffered employment, except to the extent perettted under 3R 5-105(C).
(8) A lawyer shall P.ot conttnue multiple employ ment tf the exercise of nas independent profeestonal Judgment in Donalf of a client will me or is lately to me adversely affected by his representation of another client, except to the extent peraatted under DR 5-105(C).
(Cl In the situations covered by OR 5-105( A) and (B), a lawyer may represent multiple clients if it is oavsous tnat he can adequately represent the interest of eacn and 11 each consents to the representation af ter full disclosure of the possible effect of such representation on the exercise of his independent pro-fossional judgment on behalf of each.
(D) If a lawyer is required to decline employ-ment or to withdraw free employment under DR 5-105, no pertner or associate of his or his firs may accept or continue such employment.
(Esphasis added.)
These Disciplinary Rules, in contrast to the Ethical Considerations, are sandatory in character. They state the
- ntnimum level of conduct below which no lawyer can fall without being subject to disciplinary action, regardless of whether the lawyer believes he can adequately represent the client. Enligg Pacific Insurance Co. v. tardenetta, 661 S.W.2d 244, 249 (Tex.
App.--San Antonio 198 3, no writ) : Draeanescu v. First National Bank of mollvweed, 502 F.2d $50, SSL (5th Cir. 1974), 3313 d en i ed , 421 U.S. 929 (1975). Where etther of the specific disqualifying f actors of Rulee 5-10$( A) or 5-105(B) ta present, enere is no duty on the adverse party to seek disqualtfication. The Disciplinary Rules are self-executing and tapose a self-enf orcing duty on the lawyer.11/
11/ Worsham, rorsytne, as already noted, refused movents' r eques t that the fire watadraw f rom the representation of TUEC tn taas action.
MOTICN TC DISCCALITY ATTCRNEYS TCR 7"EC AND RESPCNSE TC TIEC'S MCTICN TCR PRCTECTIVE CRDER AND CTHER RELIEF -- Page 17 s
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The tssue whether a law firm enat nas totatly represented several citents may represent one client in a suit against another has been expressly addressed by the State Bar of Texas. In Ethics opinion 219, the State Sat of Texas issued the following opinton:
An attorney (who nas represented a partnershipt may not represent one partner of a partnership in a suit against the other partner arising out of tne partner-ship relationship . . . .
State Bar of Texas, Comm. on Interpretation of the Code of Pro-f ossional Responsibility,1A/ Op. 219 (1959), attached as Ex-hibit F. This opinion is directly applicable here and requires the disqualification of Worsham, Forsythe.11/
It naturally follows that the case authority mandates disqualification of an attorney who has represented joint owners in a joint proceeding from then representing one owner against another. In Glueck v. Jona than Loean . Inc . , 6 53 F. 2d l 746 (2d Cir. 1981), the court disqualified a law fire in a suit against one seener of a trade association because of the fire's prior representation of the association. In In Re Sanks, 283 Cr. 459, S84 p.2d 284 (1978), the Supreme Court of Oregon held that a law fire that represented a closely held corporation and its president could not represent the shareholders in a suit 13/ The State Bar of Teams is the administrative agency by which the Supreme Court of Texas regulates the practice of law. Prior to the amendments to the State Bar Act in June of 1979 (Art. 3204-1 Tex. Rev. Civ. Stats.) the State Bar of Texas Committee on Interpretation of the Code of Professional Responsibility issued Ethics opintons. Since 1979 Ethics opinions have been issued by- ane Supreme Court Ethics Consistee.
11/ Any attempt by TUEC to distinguish the relationship of the co-owners of Comanche Feat from the 'partnerentp' referred
! to in Ethics opanton 219 would be an estreme example of form over sucatance.
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MCTICN 70 3!SCUALITY ATTCANEYS FCR TUEC AND RESPCNSE TO TOEC'S
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)
Ns _- against the president. The Banes court stated: 'It ts car .
conclaston enat the only echtcal postaton for an attorney to adopt when substantially Edentacal interests wntch ne nas represented become divergent is to represent neither the individual nor the corporation." 584 F.2d at 292. See also In Re 165 Associates, 14 Sankr. 449, 451 (Bankt. Hawait 1981).
Accordingly, it is clear that worsham, Forsythe automatically is disqualified from represent;ng TUEC in any suit where TUIC is adverse to Movants, because that fica represented all owners jointly in the NRC proceedings for Comanche Feam.11/
C. The Duty of Undivided Loyetty Owed Nevants As Joint Owners Also Disqualifies Worsham, Forsythe Free Representing TUEC In Any Suit Where TURC Is An Adversary of Movants TURC argues that general principles of equity preclude disqualification of worsham, Forsythe because the firm has *es-pended considerable dine and ef fort in investigating, and learning the issues involved in, the dispute
- so that its dis-qualification *would impose a substantial hardship
- on TUEC.
(Motion For Protective Order And Other Relief.1 XIV) . TUIC's argument indicates a fundamental misunderstanding of the 11/ Because of the peculiarly close relationship existing among partners, if one partner is disqualified, his partners suet be disqualified as well. Cinema 5, Ltd. v. Cinerasa, Inc., 528 F.2d 1384, 1347 (2d Cir. 1976). M g&gg Rasan v.
Nuclear Power Servtces, Inc., Stone & Wetster Eneineertne corp., Texas Uti,ities Electr ic Co . , Inc. , U. S. Depar tment of Labor, Case me. 04= ERA-24 (Septemoer 25, 1904), a
- whistle-clower* case under the Energy Reorganization Act, as amended, 42 U.S.C. $ 1851: 29 C.F.R. Part 24, arising from an alleged retaliatory firing and failure'to rehtte of a Comanene Feen engineer. In MM , improper conduct with respect to the whistleelower on the part of an assoc & ate attorney (and the limited nummer of other firm seaters with whom ne consulted) was taputed to the entare law fare of Bisnop, Literman, Coom, Purcell & Reynolds, and the firm as a whole was accord &ngly disqualified free further representation of the defendants tn the satter. This is in accord with Disciplinary Rule 5-105(D). The Worsnaa, Forsythe attorneys representing the joint owners of Comanche Peam are presumed to have snared con-f tdences watn other worsnaa, Forsythe attorneys and therefore the enttre law ftra must ce disqualified.
MOTION TO DISCUALITY ATTCRNEYS FOR TUEC AND RISFONSE TO TUEC'S MOTION FOR PROTECTIVE ORDER AND CTMER RELIEF -- Page 19
/*h effect of an order of discualification and a "fatiare to appre- !
ctate ene duty of a lawyer to exercise an ladopendent adgment I l
on behalf of esca person he represents.' See E. F. Mutton 6 I Co. v. scown, 305 F. Supp. at 396 (rejecting a similar argument i
advanced by Hutton in opposing disqualification of its !
attorney).12/ The argument is also spectacularly blind to the true equities of the situation. Worsham, Forsythe's con-siderable knowledge of the licensing proceeding was acquired in targe part (and at a substantial cost to Movents) En its role as Applicants ' counsel, t .e. , as Movents' counsel as well as TUIC's. No equity exists to allow TUIC the benefit of this ,
expertise gained at Movents' expense for use against Movants.
One of the foremost obligations of every lawyer is the duty of undivided loyalty to his clients. Cinema 1, Ltd. v.
Cinerama, teis 528 F.2d 1384, 1386 (2d Cir. 1976) (because no man can serve two mesters, the client has the right to espect that the lawyer would ' accept no retainer to do anything that ,
might be adverse to his client's interests *). Sgg gigg Canon 5 of the Code of Professional Responsibility, STATE SAA QF TEXAS, ETHICAL CONSIDERATIONS ON CODE OF PROFESSIONAL RESPONSIBILITY EC 5-1 (1972).
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12/ Even if disqualified from representing TURC in this or any other litigation in which TURC and Movants are adverse, worsham, Forsythe will continue to be able to represent TUIC as general counsel. TUTC has already retained substitute counsel of tes cnosce in this satter.
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MCTION TO DISQUAL FY ATTORNEYS TCR TUEC AND RESpCNSE TO I"EC'S MCT:CN FOR PRCTECTIVE CRDER AND OTHER RELIEF -- Page 20 s
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- __ - - - - --, --. . - - , . - , - . . . -- - , - - . - - - , - - - , . - - , , ---,--,.-,--1-,-
The rationale centnd tais Etat a1 Constderation as tnat a lawyer's duty to his client is that of a flouctary or trustee, cinema 5, $28 F.2d at 1386.1S/ Whenever a lawyer represents interests adverse to those of a current citent, he creaches ents rule. Seg P6M tiectric Co. v. Codard. 478 S.W.2d 79, 80 (Tex. 1972). The Eth& cal Considerations further provide that a lawyer is precluded tree accepting employment that will adversely affect his judgment or dilute his loyalty.
Cinema 5, $28 F.2d at 1386.
Thus, Worsham, Forsythe owes Movants a duty of un-divided loyalty and may not participate in this litigation on
- behalf of TURC. Such representation obviously adversely aff ects the interests of Movents with respect to Comanche Peak and comproatses the }udgment and loyalty of its Nhc counsel.
All the owners of the project are entitled to place confidence in, rely upon, and c'onf er with Worsham, Forsythe in its capacity as counsel for the " Applicants
- in the NRC proceedings. Cna particular problem with Worsham, Forsythe's dual role as Applicants' NRC counsel and TURC's litigation counsel is that it effectively prevents novants from conferring with their NRC counsel. For example, the tone and substance of certain TURC Nhc pleadings and discovery responses raise, at miniaua, strategic questions. TURC has been criticised for its lack of cancor in those proceedings,12/ and it appears to be 11/ See also Fund of Funds, Ltd. v. Ar thur Andersen & Co. ,
567 F.2d 225 (2d Cir. 1977): State v. Bauer, 539 S.W.2d 367, 374 (Tes. Civ. App.--Austin 1775, west cer'd n.r.e.), M' ,
559 S.W.2d 145 (Tes. Civ. App.--Austin 1977, writ ref'd n.r.e.)
frelattonship between attorney and client ts one of *uberessa gf* which has been descrtmod as tne most soundant good fasth: ansolute and perfect canoor or openness and honesty
. . . .'*) (citations onttted) .
W $_eg note 4, s ggg,g .
"CT!ON TO O!$GUALITY ATTCANEYS TCR T'JEC AND RESPONSE TC 7"EC'S MCTION FOR PROTECTIVE ORDEA AND CTMER RELIEF -- Page 21
in open conflict witn the ASIS over tne relevance of past management polictes to significant assues raised in and my tne NRC proceedings. Compare Applicants' T.esponse to Soard's Memorandum And Order (Management Issues Under Contentton 5:
CASE Request of July 2, 1986) of Septemmer 2, 1986, Doc'et a Nos.
50-445 and 5-446 (Applicarton for an operattng Ltcensen, filed Septemmer 12, 1984 wilg Texas Utilities Electric connanv, (Comanche Peak Steam Electric Station, Units L and 2),
Memorandus and Order (Motion to Admit New Contentions or for Reconstderation), ___ N . A. C . ___, AS LDP No . 04=$28-02-CPA, filed October 30, 1986, Slip op. at 10 (attached herein respectively as Exhibits C and N). Novants cannot fruitfully discuss such setters with oppooing counsel in this lawsuit, because TUEC's activities and omissions in seeking the license are constantly in controversy.
Movants are also entitled to information free TUEC and all licensing counsel regarding the status of the overall licenstng effort.IS/ It is irrefutable that, as a result of this litigation. TUEC's and Novants' interests are stallar on the issue of obtaining a license and adverse as to all others.
Therefore, as counsel to TUIC in this litigation and to Movants oefore the NRC, Worsham, Forsythe has directly conflicting client interests which must af fect the conveying of information. It already has been demonstrated that as novants' 12/ This information includes, for example, the cause of the licensing proceeding delay, the reasons for the delay in complotton of construction, the extent of anticipated delays, and the strength of the applicants' legal position at the NhC.
As stated above, Novants need accurate information regarding cost and scneduling. For example, Brasos and Tes-La need sucn information to apply for and receive further REA financtag.
- OTICN TO DISCUALITY ATTORNEYS FOR T"EC AND RESPCNSE TO TUEC' S f MCTICN FCR PROTECTIVE CADER AND CTHER RELIEF -- Page 22 i
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attorneys, Worsnam, Forsytne will not <eep Movants' conftdences with respect to discovery requests in one pnase of tne NRC proceedings. sgg Exh1Dit 4 discussing representation regarding one such discovery request, j continued simultaneous representation adverse to a cilent must be measured against the duty of undivided loyalty which an attorney owee to each of his clients. Unified Soverage Agency of Wasnington County, Oregon v. Jelco inc., 646 F.2d 1339, 1345 (9th Cir. 1981). In a case similar to the instant one, the financial burden borne by the client forced to retain substitute counsel was held to be outweighed by the .
interests which would be promoted by disqualification. M Hutton & Co. v. Stewn, 305 F. Supp. at 398. The interests outweighing cost have been identified ass (1) vindication of the former client's trust in and reliance on his attorneys (2) promoting the use of tne legal system for the adjudication of disputes by upholding the dignity of the legal systems and (3) encouraging counsel to sete timely disclosure to clients about matters concerning representation and potential conflicts.
L E Secause all of these tapertant interests will be promoted by disqualification in this case, the cost to TURC of ontaining substitute counsel is similarly outweighed.
TURC's position, as empressed in its Motion for Pro-tective order, seems to be tnat worsham, Forsythe represents Movants before the NRC, but that Movants are nevertheless not a client of worsham, Forsythe, and that Worsham, Forsythe owes 11/ Contrary to the dictates of DR S-10S(C). Worsham, Forsythe has never advised tne Movants of any possible confitet of interest occastoned by Lts representation of the co-owners before the NRC and tta staultaneous representation of TUEC &n other matters, although such conflict ts oevious, nor has it sought their consent to such representation.
MCTICN TO CISCUALITY ATTCRNEYS FCR TUEC AND RESPCNSE TO TOEC
- S MOTICN FCR PROTECTIVE CRCER AND OTHER RELIEF -- Page 23
j Movants no duty of loyalty. This premise cannot ce correct.
Worsham, Forsythe appears as Movants' attorney pursuant to the NRC's regulation governing representation, 10 C.F.A. $ 2.713(b)
(1986).32/ Regardless of any contractual waiver of the power to direct and control the licensing activities of TUEC. Movants have not waived their right to be represented by statcal counsel. The Tesas Code of Professional Responsibility does not permit attorneys to act as representatives for individuals or corporations without thereby establishing an attorney-client relationship. TUIC has cited no authority for so novel and shocking a proposition. '
12/ $ 2.713 Appearance and practice before the Commission in adjudicatory procaedings.
e ..
(b) Reeresentation. A persen may appear in an adgJdication on his or ner own behalf or by an attorney-at-law. A partnership, corporation or unincorporated association may be represented by a duly authorized seaber or officer, or by an attorney-at-law. A party may be represented by an attorney-st-law provided the attorney is in good standing and has been admitted to practice before any Court of the United States, the District of Columnia, or the highest court of any Stats, territory, or possession of the United States.
Any person appearing in a representative capacity shall file with the Comeission a written notice of appearance watch shall state his or her name, address, and telephone nuaner, the name and address of the person on whose behalf he or she appears:
and in the case of an attorney-at-law, the basis of his or her eligibility as a representative or, in the case of another representative, the basis of his or her authority to act on behalf of the party.
MCT:CN TO CISCUALITY ATTCRNEYS FOR TUEC AND RESPCNSE TO TUEC*S MOT:CN FOR PROTECTIVE CRCER AND OTHIA RELIEF -- Page 24 N
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If tne Jotnt Cwnership Agreement limats Movants' actitty to act independently in ene NRC proceedings, as TUEC claims, then it is plain that Movants must be represented to-fore tne NRC Dy Applicants' counsel, and that said representa-tion creates an attorney-client relationship--with all the attendant obligations and duties imposed by the Texas Code of Professional Responsibility. If Worsham, Forsythe, because of its longstanding role as general counsel for the Texas Util-sties Companies, did not wish to estan11sh an attorney-client relationship with the other Comanche Peak permitees and
- co-applicants, then it should not have appeared before the Nhc as Applicants' counsel. If TUIC did not wish to waive its right to employ its General Counsel in an action against Movents under the Joint ownership Agreement, then it should not have permitted worsh'am, Forsythe to represent Novants pursuant to that contract. Having eade their choices TURC and Worsham, Forsythe must now atide the consequences.
Flying in the teeth of worsham, Forsythe's assertson that an injustice would be done to TUIC by not allowing Worsham, Forsythe to ut111:e knowledge it has gained partly at Movants' esponse are the f acts established since Worsham, Forsythe filed this suit. The Dallas firm of Jackson, Walker, Winstead, Cantwell & Miller (* Jackson, Walker") has been engageo by TURC to represent at in this matter, and was TUEC's sole representative at one of the depositions already taken in this case. Therefore, the actions of the lawyers themselves show that Worsham, Forsythe's presence is not essential to TUEC's recetving adequate representatton.
l MCTION TO 3:$ QUALIFY ATTORNEYS FOR TUIC AND RESPCNSE TO T'.'EC'S MOTION FCR PROTECTIVE CRCER AND OTHER RELIEF -- Page 25
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\ I:. WCRSHAM, FCRSYTHE MAY BE CALLED AS A WITNESS SY
- -"# MCVANTS ANO ITS TEST!McNY MAY SE PREJU::CIAL TO :TS et!ENTr THUS, WCRSKAM, FCRSYTHE MUST BE 3!$CUAL:FIE3 In addition to the issues involving the representation of confiscting interests, Canon 5 also governs the conduct of Texas lawyers who find themselves in the uneasy posttion of a witness-advocate. Disciplinary Rule 5-101, adopted pursuant to Canon 5, addresses the witness-advocate situation:
A lawyer shall not accept employment in contemplated or pending litigation if he knows or it is covtous that he or a lawyer in his firm ougni to De called as a witness . . . .
OR 5-101(a) (emphasis added).
Disciplinary Rule 5-102 sets out the two situations in .
which a witness-advocate must withdraw from a case in which he has accepted employment. Disciplinary Rule 5-102(A) provides that a lawyer who has undertaken representation of a client must wtthdraw from that representation when he learns that he or a lawyer in his firm should be called as a witness in the case on behalf of the citent. Disciplinary Rule 5-102(B) pro-vides that under no circumstances shall a lawyer continue his representation af "his testimony is or ggg_gg prejudicial to his client.' (Esphasis added) .
The rationale for the Disciplinary Rules governing the witness-advocate situation is discussed in Ethical Ccasidera-tion 5-9:
EC 5 If a lager is both counsel and witness, he
( becomes more easily impeachatte for interest and thus i
eay me a less effective witness. Conversely, the l
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"CTICN TC ::SCUA1!TY A!TORNEYS FCR TUEC AND RESPCNSE TC TUEC'S wCT::N FCR PRCTECTIVE CRCER AND CTHEA RELIEF -- Page 26 l
1 opposing counsel .may oe handscapped in cnallenging tne crectatitty of sne lawyer wnen the lawy+r also appears as an advocate in the case. An advocate wno cecomes a witness is an ene unseemly and ineffective posttton of arguing his own credibility. The roles of an advocate and of a witness are inconsistent the function of an advocate is to advance or argue the cause of another, wntle enat of a watness is to state facts onjectively.
In determining whether a lawyer ought to be called as a witness, the courts nave followed the basic principic that
- (tlhe client is entitled to every scrap of favorable evidence that is available not only the favorable evidence that is essential to his case." Supreme Beef Processors, Inc. v.
American Consumer Industries, Inc., 441 F. Supp. 1064, 1058 (N.D. Tes. 1977) (emphasis in original) . Thus, corroborative testimony (in contrast to cumulative evidence) is testimony that in many circumstances *ought to be presented to the factfinder." MacArthur v. Bank of New York, 524 F. Supp.
120 5, 120 8-0 9 (S.D.W.Y. 19 01) (counsel ought to testify regarding negotiations even though principals were present) .
Moreover, even a stipulation that a lawyer will not testify is insufficient to avoid disqualification if the court, based upon an independent osamination of the f acts, concludes that he ought to testify. Brotherhood Rail- way Carmen of U.S. and Canada v. Delsro Co., 549 F. Supp. 700, 700-89 (D. Del.
1982). Further, the Disciplinary Rule applies whether the witness ought to testify in the case in chief or on rebuttal.
United Pacific Insurance Co. v. Sardenetta, til S.W.2d at l
249: Eurocos, S.A. v. Mahoney, Cohen a Coosany, $22 F. Supp.
117 9, 1101 (S.D.W.Y. 19 81) : J. P. Poley & Co., Inc. v.
VandetDilt, $23 F.2d 1357, 1359 (2d Cir. 1975).
Testimony as pre 3udicial if Lt contradicts tne factual assertions otherwtse made on behalf of his client. Rtee v.
31E2n, 454 F. Supp. 1361, 1371 (S.D.N.Y. 1970): 333 Teleprooster of Erie, Inc. v. City of Erie, 573 F. Supp. 96 3 MOTION TO OISCUALITY ATTORNEYS FOR TCEC AND RESPONSE TO T*JEC* S MOTION FCR PROTECTIVE ORDER AND OTHER RELIEF -- Page 27 V
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l N- / tW.D. Pa. 1983): pregnotato i. hanner, No. 032-14:9A, :N.D.
Ca., Nov. 30, 1982). In Prognolato the court reasoned tnat the lawyers were disgus11fied because they had drafted certain documents and because the defendant *will almost certainly have to piace tne author of the damaging documents" on the stand.
1.$.a The relevant authorities insist upon testimony and withdrawal over continued representation. As noted in MacArthur v. sank of New Yor,1, 524 F. Supp. at 1209:
- Where the question (of testimony versus representa-tion l arises doubts should be resolved in favor of the lawyer testifying and against his becoming or continu-ing as an advocate." ECS-10 A party can be repre-sented by other attorneys, but cannot obtain sunsti-tute testimony for a counsel's relevant, personal knowledge.
The Court then summarised the rule that should be dispositive of this motion to disqualify:
(!!! an attorney chooses to become intimately involved in the client's business, then he or she must be pre-pared to step aside if the satters involved result in litigation. This may be displeasing to firms that wtsh to have some seneers act as businessmen and others as litigators. But when these firms place enessolves in the position of having an attorney acquire information that makes his testLaony neces-sary: they must accept the consequences.
Id at 1211. In this connection, Worsham, Forsythe's statement that it has been general counsel of TUIC and its af filiates for several decades should be noted. Motion For pratective Order And Other Relief,1 VI.
i Several satters esist about which Worsham, Forsythe
- will be called to testify. For example, Worsham, Forsythe l
possesses unique knowledge cincarntng the allocation of responsibility necessary to obtain a construction peratts and the requirement to renew those peretts. For reasons never disclosed by TURC or Worsham Forsythe, ge2 Mf. failed request MCT:ON TO DISCCALITY ATTCANEYS FOR TUEC AND RISPCNSE 70 TUEC'S MOTION FOR PROTECTIVE CADEA AND OTHER RELIEF -- Page 28
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) an extenston, and tne constraceton permit lapsed. Worsnam, Forsythe wt11 testtfy as to how this omission occurred, whose responsibility it was, and why the permit's ex51 ration reportedly went undetected untti dtscovered by the NRC staf f nearly sta months after it lapsed. Such testimony clearly could affect TUEC's liability in this matter.
Furthermore, the testimony of Worsham, Forsythe could be adverse to TUEC's interests. In pinpointing the blame for the permit lapse, Worsham, Forsythe may seek to deny its own responsibility, and attempt to shift the blame instead to one of the other three law firms representing Applicants, or to .
TURC itself. In the latter case, the testimony of Worsham, Forsythe would be most prejudicial to TURC.
Worsham, Forsythe, through its testimony, also can shed light on other delay-causing difficulties Applicants have encountered in their* ef forts to obtain an NRC License. For esample, the firm can esplain the circumstances surrounding the filtngs whien caused the ASL3 to question Applicants' credibility: the actions which led to the NRC's of ten critical attitude toward TUSC'S Licensing ef forts the developments which led to the withdrawal or attempted withdrawal on Septoneer 25, 1985, of all of Applicants' pending summary judgment notions pending before the ASLS: and other similar matters. These events have contributed to the entensive delay in receipt of a license and are vitally relevant to the issue of the adequacy of TUEC's performance under the JOA. The testimony of Worsham, forsythe will be needed to develop these f acts at trial.
Therefore disqualification of Worsham, Forsythe is mandatory and necessary.
MOT CN TO Q:5 QUALIFY ATTCRNEYS FOR TUEC AND RESPvNSE To !*.'EC*S 90TICN FOR PROTECTIVE CRDER AND CTHER RELIEF -- Page 29 s
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( C:sC::s::s Worsham, forsythe nas creacned the Code of Pro-fessional Responsibility by representing TUEC against its client Movants, and by representing TURC when Worsham, Forsytne attorneys will be called as witnesses, and may testify adversely to TURC. Therefore movants respectfully request that worsham, Forsythe be disqualified free representing, advising, or otherwise acting as counsel for T7EC in this action and in any other action where TUEC and the Novants are adverse.
Respectfully submitted, FULBRIGET & JAWORSKI l
I By: A M Blame Tartt State Bar No. 00000058 William W. Vernon State Bar No. 20552000 Tom A. Cunninghaa State Bar No. 05244700 1301 McKinney Houston, Texas 77010 (713) 651-5151 Nugh Mackney State Bar No. 08670000 2001 Bryan Tower, Suite 1400 Dallas, Texas 75201 (214) 949-0022
! Attorneys for Texas Municipal Power Agency i
W1111as E. turchette Foster De Reitsse Peter J. Plockt WERON, BURCERTTE, RUCREAT &
ROTHWELL Suite 700 bO25 Thomas Jefferson, N.W.
Washington, D.C. 20007 (202) 337-7700 Richard C. Balough State Bar No. 01636500 Mark C. Davis State Bar No. 05525050 MCTION TC 0:5CUALIFY ATTC ANEYS FCR TUEC ANO RESPCNSE TC TUEC'S MOTION FOR PROTECTIVE CRCER AND CTHER REL:EF -- Page 30 l
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MERON, 3"RCHI!!E, R'.0. TERT 5
[s\ R 0 !NW E '..*.
( 140C Banc Tower 221 West S&xtn Street Austin, Texas 78701
($12) 499-0606 Darrell E. Jordon State 8er No. 11007000 HUGNES & LUCE 1000 Dallas Building callas, Texas 75201 (214) 760-5756 Donald Adees State Bar No. 00854000 )
EUGNES & LUCI ;
i 1500 United Bank Tower Austin, Texas 78701 (512) 477-9910 By:
war.taa u. auschette
- - b kN
/
LAN OFFICES OF JOSEPE ROSEAT RILEY (BY '
o%h Rdter t 'R AMg State Bar wo. 14929000 P. O. Sea 153 waco, Texas 76703 (017) 754-5454 SPIMGEL & McDIAAMID suite 1100 1350 New York Avenue, N.W.
Washington, D. C. 20005-4798 (202) 879-4000 by M -
Robert Av/Jablen ~
tonnie S". Blair Barbara S. Essin Ben Finkelstein Attorneys for Brasos Electric Power Cooperattve, Inc.
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MCTION TO DISCUALIFY ATTORNEYS FOR TUEC AND RESPONSE TO TUE0'S
%7:0N FCR PROTECTI'/E ORDER AND CTMER RELIEF -- Page 31
CER7!r!:A?! Or stav::r v This pleading was served 13 =cepLlance atta A;;es *;
and 21a of ene Texas Rules of Civtl Procedure on tats 26tn day of Neverber, 1986.
Elaue Taret t
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i MOTION TO DISQUALIFY ATTORNEYS FOR TUCC AND RESPONSE TO T"EC'S l MTION FOR PROTECTIVE ORDER ANO OTMER RELIEF == Page 32 i
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(d 7tair :r 4: a:p: : s 74 t ta .0 LL* LLt sete!enem Steel Corp. v. Entted States "e s.' 71sset:s, :ne., 265 F.Supp. 535, aff'1 4.o ,om, set.1Lenem Steel Corp. v.
- eeers, Jai (.2d 441 (4tn C&c. i)64) . . . . . . . 11 .~
3roenernood Ratlway Car en of 'J.S. and Canada v. Desoro Co., 549 f.Supp. 750 (3. Del. 1552) . . . . . . . . . . . . . . . . . . 27 2 Cinema 5, Ltd. v. Cinerama, !ne., 529 F.2d i344 (2d C&c. 6976) . . . . . . . . . . . . . 20, 21 3 Cleveland tiectete Illuminating Co.,
15 N.A.C. 1255 (1553). . . .. . . . . . . . . . . 12 4 g Draganescu v. First National Bank of *
, HoLLYvoo4, 502 F.2d 550 (5th C&c.
1974), cert. dented 421 U.S. 929 (1975) . . . . 17 5 I
- t. P. Mutton 6 Commany v. Brown, 305 F.Supp. J71 (5.3. Tes. 1945) . . . . . . . . . 9, 10, 13, 14, 20 6 Eurocos, S.A. v. Mahonry, Cohen 6 Co., 522 F.Supp. 1175 (S.O.N.Y.
IIII). . . . . . . . . . . .. . . . . . . . . . . 27 7 rund of Funds, Ltd. v. Arthur Andersen 6 los, 567 F.2d 225 (24 C&c. 1977) . . . . . . . . . 21 5 claect v. Jonatnan toesn. Inc., 653 F.2d 746 62d Chr. 1981) . . . . . . . . . . . . . . . . 18 9 9all v. strchfield, No. 9344 (Tes.
App.-- emarmana, June 7, 1986) . . . . . . . . . . 13 10 1asan v. Nuclear Power Services, Inc.,
Stone 6 Wooster Enetneertne Cors., Texas UttLtetes tiectric Co., Inc., Q. S.
Department of Lacor, Case No. 88-ERA-24 (Septemmer 25, 1986) . . . . . . . . . . . . . . . 19 11 In ne sants, 283 Or. 459, 584 P.2d 284 (1975) . . . . . . . . . . . . . . . . . . . . . . 18 12 7A3*I Or A"730R:7:IS -- t s
l l
l I
i
, .,t..
\s .+ :43 .
!n Me 'is tasocta-es, 14 3an4r. 449 t3anEr. .ieda&& 19411 . . . . . . . .. . . . . .
- 13 . 3 J. 7. Foley & Co., !nc. v . */ande r3 t it .
5aJ f.;d AJ57 tac Ctr. 17754 . . . ....... . 27 ;4 l
'acAr-9ur v. Sant of ow Yoet, S24 f.5-pp. a4J5 ( 5. 3.:4. Y . 175LJ . . . ....... . 27, la '5 P6M flectete C3. s. Codard, 478 5.W.2d 79 (Ten. 1972). . . . .. ........ . 21 16 Pregnolato v. Weenel , No. C80-1429A IN.3. Ga., Nov. J0, 1982). . . . . ....... . 28 17 P'Jolic Service Co. of Indiana, 7 N.A.C. 173 (1975). . . . . . . . . ....... . 12 18 Rice v. Baron, 454 F.supp. 1361 (5.3.N.Y. 1978). . . . . . . . . . ........ 27 19 State v. taker, $39 s.w.3d 367 (Ten.
Cav. App.--Austin 1976, writ ref'd 4.r.e.),
g , 559 S.W.2d 145 (Tes. Civ.
App.--Austin 1977, writ ret'd n.c.e.). . . . . . . 21 20 Succese Beef Processors, Inc. v. American Consumer Industries. Inc., 441 F.supp.
1Q54 (M.D. Tes. 1977). . . . . . . ........ 27 21 Teleoroenter of Erie. Inc. v. City of liig, 53 F.Supp. 963 (W.O. Fa. 1953). . . . . . . 27 22 Texas Uttlittes Electric Company, (Comanche Fean steam Electrac station, Units 1 and 2), Memorandus and order
(.90tton to Adeit New Contenttons or for Reconstderation), -- N.R.C. -- , ASL8p No.
16-528-02-CpA (Octoeer 30, 1984) . .. . . . . . 22 23 Texas Utilities Electric Cocoany, 22 N.A.C. BJ5 (A5L5 1555) . . . . . . ....... . 8 24 Texas Uttlities Electric Comoany, 23 N.A.C. 113 (1956), setttton for rewtow filed sue noe . . . . . . . . . . . . . . . 8 25
!A3*: OF UJ-vCR*T:!5 - LL 1
h
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l }_ ?%CE 13 '
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(Osmanene Peas Steam Siectst: 5tation, Units 1 and 23, Memorandum and Order f?ost1n Tuatttyi, 15 N.A.O. 1410 LAS;3 is4Js, acatised. 19 N.R.C. 509 (ASL3 17843 and 13 3.R.C. 1549 (ASL3 1984) . . . . . . . 7 ;$
'J . 3. es rel. Sheadon Electete Co. v.
3iscanawa 1eettn1 6 pt..otnt, 423 f. Sepp.
456 (S.3.4.g. A376). . . . . . . . . . . . . . . . 16 !?
Unified Severaes Acenev of Washineton County. Gregon v. Jetco :nc., 646 F.2d 1J37 (7tn Cat. 1751) . . . . . . . . . . . . . . . 23 ;3 Untted Pactftc :ns. Co. v. !ardenetta, 661 5.d.2d 244 (Tes. App.--San Antonto 1983, no west) . . . . . . . . ... . . . . . . . 18, 27 29 Westinenouse Elec. Corn, v. Kerr-McGee Coin., 550 F.2d 1J11 L7th Ctr.),
cert. dented. 439 U.S. 955 (1978). . . . . . . . 9, 14 30 II. Statutes:
10 C.F.A. $ 2.713(b) (1986). . .. . . . . . . . . 11, 24 31 29 C.F.R. Part 24. . . . . . . . . . . . . . . . . 19 32 42 U.S.C. $ 1851 . . . . . . . . . . . . . . . . . 19 33 42 U.S.C. 5 2131 . . . . . . . . . . . . . . . . . 11 34 42 U.S.C. 5 2133 . . . . . . . . . . . . . . . . . 11 35
-w g 743*I 0F A.*TMCR:T IS -- tat
740E T13 :.
- . Ot er natmoetttes:
G. McCormtet, ',aw of Evidence.
(3d ed. '944). .................. 9 35 STATE 3Ad QF TEXAS, ETMICAL 00NS!:53ATI0 TIS ON CODE OF PROFESSI0t!AL AESPCNS:3:*:TY E 5-L (1972) . . . . . . . . . . . 20 37 Etn.:a1 :snstderatton S-7. . . . . . . . . . . . . 26 37 Ethtcal Consideretton 5-10 . .. . . . . . . . . . 28 37 SUPREME COURT CF TEXAS, RULES CCVERNIt!G THE
-STATE BAA QF TEXA3 art. X 5 9 (Code of Professional Responstatitty) (vernon supp.
1986). . . . . ..... . . . . . . . . . . . . . 16 37 Dasetplinary Rule 5-101. . . . . . . . . . . . . . 26 37 Disciplinary Rule 5-102. . . . . . . . . . . . . . 26, 37 Disetplinary Rule S-105. . . . . . . . . . . . 16, 17, 23 37 I
e
!A3*.I T A; MCA:!:IS -- tv e.1,.
res .e s we rate: t .x,w, : :% t EXHIBIT 10 t
M// i 0001G.:
No. 86 6809 TEXAS UT!LITIES ELECTRIC $ IN THE O!$TRICT COURT COMPANY, 9
!i Plaintiff, h H
- v. H DALLAS COUNTY, TEXAS 5
TEX-LA ELECTRIC COOPERATIVE $
MUNICIPAL POWER AGENCY and !i BRAZOS ELECTRIC POWER H COOPERATIVE. INC., !I
!i Defendants. H A-14TH JUDICIA!, DISTRICT ORDER BE IT REMEMBERED that on the 23rd day of January, 1987, came for hearing the Defendants
- Motion to Disqualify the firm of worsham, Forsythe, Sempels & Wooldridge as Attorneys s for Plaintiff in this case, and having considered the evidence presented and the arguments of counsel, the Court is of the
( opinion that the motion should be sustained.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that the 4
Defendants' Motion to Disqualify the firm of Worsham, Forsythe.
Sampels b Wooldridge, as attorneys for Plaintiff in this case is sustained and the firm of Worsham, Forsythe, Sampels &
wooldridge is hereby disqualified from representing Plaintiff e - , &
f l '
W -
l
., ,A f 9
/ /
' [fbj .'
f' / John McClellan Marshall ' Judge o !
(
- \
ks ORDER - PAGE ONE I
- . . . . _ _ _ . _ _ _ _ . _ . _ _ 1
rts te 'a* 12:4? r Arns : r- . ~:3 5 : ..-: e - l 00010., l 1
I APPROVED:
\ '\
FUL8RIGHT & JAWORSKI alate Tartt
-b[M 1301 McKinney Street Houston, Texas 77010 COUNSEL FOR TEXAS MUNICIPAL POWER AGENCY HERON, BURCHETTE RUCKERT & ROTHWELL E21#/
William M. Su rLYtttte Suite 700
/4' 1025 Thomas Jefferson, N.W.
Washington, D.C. 20007 COUWSEL FOR TEX-LA ELECTRIC COOPERATIVE OF TEXAS, INC.
, SPIEGEL & Mc0IAAMID N
Y Robert A. /helon 1350 New York Avenue, N.W.
Washington, D.C. 20005-6798 COUNSEL FOR BRAZOS ELECTRIC POWER COOPERATIVE, INC.
k ORDER - P AC E TW see*s
. LXHIBIT 11 A FF?OA VTT THE STATE OF TEXA5 :
COUNTY CF OALLAS :
Before me, the understgned authority, a Notary Public in and fer OaCas County, Texas, on this day personauy appeared ROSERT A. WCCLOR!CCE, m after being by me first duty sworn, upon his oath stated that he is attorney 1:e Appucants, is sueerized to reply to CASE's Interrogatories Re The MAC Reper and Issues Raised by the MAC Report on behatt of the Apolicants, and turtner stated that, to me extent the supplemental responses to these Interrogatories refer to statements made by others, he has celled upon such statements, and that\ he nas no reason to bedeve that any of the statements are untrue and that insofar as tne .
supplemental answers to Interrogatories refer to actions taken by him personatiy, said answers are true and correct.
~
^-
RQ5F.RT A. 7COLORIDCE/
SUSSCRIBED AND STCRN T0 before me by the said RCSERT 4. .
TCCt.OR!OCE en 21s the 27th day of November,1983, h M
- Notary Ostic in ase for Cauas County, Texas My Commissaan Expires:
R-\- p s
9
.4.
EXHIBIT 12 NO. 86-6809 TEXAS UTILITIES ELECTRIC S IN THE DISTRICT COURT
\ COMPANY, j Plaintiff, 5
VS. 5 OF DALLAS COUNTY, TEXAS S
TEX-LA ELECTRIC COOPERATIVE $
OF TEXAS,1NC., et al 5 Defendants. 5 14TH JUDICIAL DISTRICT REPLY TO DEFENDANT 5' MOTION TO DISQUALIFY TO THE HONORABLE JUDGE OF SAID COURT:
NOW COMES the Plaintiff Texas Utilities Electric Company and Cross-Plaintiffs, Texas Utilities Company, Taas Utilities Mining Company and Taas Utilities Services, Inc., hereinafter collectively called Plaintiff, and file this Reply to Defendants' Motion to Disqualify the law firm of Worsham, Forsythe, Sampels & Wooldridge (hereinafter referred to as "WFSW") as attorneys for Plaintiff herein, respectfully showing this Honorable Court the following: i
(
This Cause was commenced on May 28, 1988, and arises out of the performance of the parties of a Joint Ownership Agreement (hereinafter referred to as the "JOA") with respect to the Comanche Peak Stearn Electric Station (hereinafter referred to as "CPSES"). The JOA determines the rights of the parties pursuant to their ownership interest in C? SIS. Plaintiff is seeking, assong other things, money damages from two of the Defendants for breach of their payment obligations under the JOA, and a declaratory judgment declaring verlous mattes regarding Plaintiffs performance and obligations under the JOp.. The Defendants have filed counterclaims and thirdyarty actions against Plaintiff seeking money damages and other remedies for alleged breaches of the JO A.
G.
WFSW is the lead counsel for Plaintiff in this action. WPSW and the same law firm by different names has acted as general counsel for Plaintiff and othee corporations within the Texas Utilities System for approximately 45 years. There is not now and there has never been an attorney client relationship between WFSW and any of the Defendants.
Indeed, there is along history of adversarial relationships between WFSW (representing Plaintiff) and Defendants who, in allinstances, have been represented by their own legal counsel not in any way connected or associated with WFSW. These adversarial relationships not only have involved CPSES, but have also involved the allegations O underlytrig the litigation pending in this Court.
-t.
t;ndir the terms of the JO A, Plaintiff is solaty rcsponsibts f:r Octa;n;ng . e requisite licenses for CPSES. In the process of obtaining an operating license, the Nuclear
] Reguldtory Commission (hereinafter referred to as the "NRC") required that an entities owning a percentage ownership in CPSES be named as 5fe, f,aj;1o, applicants, even thougn they have no responsibluties in the licensing proceedings. As a result of that requirement and siner their client, Plaintiff, was contractueuy responsible for the licensing proceedings with respect to CPSES, WFSW and the several other law firms performing such legal services for Plaintiff indicated on filings before the NRC and the NRC's Atomic Safety and Licensing Board that they were making such filings for all applicants.
On each occasion, however, that Robert A. Wooldridge and his law firm, WFSW, filed a formal Notice of Appearance !n the Ucensing proceedings, said Notice of Appearance clearly showed that the apgvdance was solely on behalf of Plaintiff, and no such Notice of Appearance her Mn filed by Robert A. Wooldridge or WFSW evidencing an appearance for any of the Defendants. At all times, Robert A. Wooldridge and WFSW, as won as the other law firms representing Plaintiff in said Ucensing proceedings, took their directions solely from Plaintiff and counseled solely with Plaintiff.
Defendants have always clearly understood that Robert A. Wooldridge and WFSW enjoy an attorney-client relationship with Plaintiffs and that no attorney-client relation-l Ship has ever existed between Robert A. Wooldridge or WFSW and any of the Defendants.
No confidentialinformation has ever been sought or provided to WFSW by the Defendants and, h view of the long history of adversarial relationships, Defendants have never imposed, and would never' impose, any confidences in WFSW. In all of Defendants' dealings with WWWW, Defendants have been represented by their own counsel and have clearly understead that WFSW was representing the interests of Plaintiff.
III.
l l Robert A. Wooldridge is not a material witness in the Utigation before this Court.
Neither he not any attorney of WFSW have made business deelstons of Plaintiff. They have acted solely as legal counsel to Plaintiff. They have no independent knowledge of any of the relevant facts involved in this action. AU of the information concerning CPSES and the matters of issue in this action was acquired la their capacity as Plaintiff's attorneys in connection with giving legal advice to Plaintiff, their client. All of suen information and legal advice fans squarely within the attorney-ellent privilege and.
therefore, is not available to Defendants or admissible in evidence.
IV.
Defendants' own conduct is such that they have waived and are estopped from
!- contending that WFSW are in any way disqualified from representing their long-stanca ;
2-
client, Plsintiff, in tnis action. Moreover, disquelification of WFSW as Platnttfis : ese; herein would work a substantial, inequitante hardship and prejudice on Plaintiff.
[h U y' Attached hereto and made a part hereof are the affidavits (and referenced exhibits) of (1) Jos. Irion Worshams (2) Robert A. Wooldridge:
(3) M. D. Sampels:
(4) J. Den Bohannans (5) Spencer C. Relyear (8) Nicholas S. Reynolds: and (7) Erle A. Nye Said affidavits elaarly and unequivocaHy establish thatt (1) there is not now and never has been an attorney-client relationship between WF5W and any of the Defendants:
(2) there is no rational basis for any of the Defendants to have ever believed that an attorney-client relationship aulsts or existed between WF5W and any of the Defendants and Defendants' conduct is directly contrary to Defendants' belated assertions to the contrary in this litigation (31 Defendants, and each of them, have always been aware of the long-standing attorney-elient relationship between WF5W ano Plaintiff, that WF5W takes its directions in connection with CPSES mdtters solely from Plaintiff, and that WF5W provides its legal advice solely to Plaintiffs (4) Defendants have never disclosed any conf!dential Information to WFSW and have never imposed any confidences to WFSW (S) Defendants have consistently relied upon the legal advice of their own attorneys, not in any way connected or assoelated with WF5W, in au matters in which Plaintiff has been involved and, in au such matters, Plaintiff has reued upon the legal advice of WFSW and other attorneys not in any way connected or associated with Defendants or Defendants' own attorneys (8) there is a long history of an adversarial relationship between Defendants, represented by their own attorneys, and Plaintiff, represented by WF5W, which adversarial relationships include matters pertainir.g to CPSES and the very auegations asserted by Defendants against Plaintiff in this litigation:
(7) Defendants have, by their conduct, waived and are estopped to assert any possible claim relating to any alleged disqualification of WF5W in this litigation by
having, on numsrous occasions and over a substr.ntial time period, ac@teseed ard 7:t objected to WFSW's representation of Plaintiff in matters directly adverse to Oefendants.
' /G including matters involving the very auegations asserted by Defendants against Plaintiff in this litigations (8) Robert A. Wooldridge, acting solely as an attorney for Plaintiff on au CPSES matters, is not a material witness whose testimony is either needed or available in this litigation, all of Robert A. Wooldridge's knowledge and information concerning CPSES having been acquired as part of the attorney-client relationship extant between WFSW and Plaintiff and, thus, being privileged under the attorney-client privilege; and (9) substantial, inequitable hardship would result to Plaintiff should Plaintiff be deprived of its chosen counsella this litigation, WFSW.
Said affidavits plainly show that Defendants' ploy to disqualify WFSW is nothing but an impermissible trial tactie and an attempt to pervert the Texas Code of Professional Responsibility purposed to not dnly depe;ve Plaintiff of its chosen counsel, but also to destroy the long-standing attorney-clieet reistionship between Plaintiff and WFSW in order to gain access to privileged documents and testimony.
WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that the Court consider the attached affidavits and the exhibits referenced therein and, upon consideration thereof and Plaintiff's accompanying Brief in Support of Platatiff's Reply to Defondants' Motion to Disqualify, overrule and deny Defendants' Motion to Disqualify WFSW as attorneys for Plaintiff in this causes further, Pialntiff prays for such other relief to which it is justly entitled in the premises. '
l Respeetfully submitted, WORSH AM, FORSYTHE, SAMPELS & WOOLDRIDGE M. D. Sampels State Bar No. 17577000 Robert A. Wooldridge State Bar No. 21984000 Richard L. Adams State Bar No. 00074950 2001 Bryan Tower, Suite 3200 Dallas, Texas 75201 (214)979-3000 l
1 1
-4
JACKSON, WALKER, WINSTEAD.
CANTWELL & MILLER H. Dudley Chambers State Bar No. 07042000 John B. Kyle State Bar No. 11783000 6000 Interfirst Plaza 901 Main Street Dallas, Texas 75202 (214)953-6017 By h FgA Counsel ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE It is hereby certifled that a true and correct copy of the foregoing Reply to Defendants' Motion to Disqualify, together with the affidavit and exhibits referenced therein, was hand delivered to the Dallas Offices of Fuhright & Jaworski and Hughes &
, Luce, and was forwarded to all other attorne States mail, postage prepaid, on thisday theof&ys of record by degasiting same in t January,1987.
o -
-s.
EXHIBIT 13 NO.84-4809 TEXAS UTTIJ11ES ELECTRIC 5 IN THE DETRICT COURT COMPANY, $
Plaintiff, 5 5
VS. 5 OF DALLAS COUNTY, TEXAS S
TEX-LA ELECTRIC COOPERATIVE 5 OF TEXAS, INC., et aL, 3 Defendants. 5 14TH JUDICIAL DISTRICT BRIIF IN SUPPORT OF PLAINTIFF'S REPLY TO DEFENDANT 5' M0110N TO DISQUALIFT TO THE HONORABLE JUDOE OF SAID COURT:
NOW COMES Texas Utnities Electrie Company Owreinafter referred to es "TU Bestrie" or "Plahtiff"),1# Plaintiff la the above numbered and entitled cause, and fues this its Brief in Sgpart of Ptahtiff's Reply to Defendants' Motion to Disqualify the law firm of Worsham, Forsythe, Sempels & WooI&idge (hereinafter referred to as "WFSW"),
respeetfully showing this Honorable Cowt as fouown 08TRODUC110N Defendants have moved to disquauty WF5W from representing Plaintiff in this aetten. The espremed bases te Defendants' Motion.to Disqualify ares (1) an auegation that WFSW eurrently has an atterns5'-ellent.geistionship with Defendants in connection with the Comasahe Peak Steam Esetria Station ("CPSB")lleensing proceedings pending before the Nueleer Regalatary Commissign's ("NBC") Atomie Safety and Licensing Board
("ASLF) and, tissen eenneL ethlenny represent Plaintiff adversely to Defendants in the litigettom la thiscouts and (2) en assertion that Robert A. WooLW of WFSW may be caDed as a witness in this utJgation by the Defendants.
This Erlef stR estatdish that there is no basis, either in feet or in law, for the
<SequmEllenties of WFSW. hdeed, it wS1 he estainshed that Defendants' Motion to Disqualify is nothing more or less then an impermisslide trial tactic purposed not only to deprive Flaintiff of its chosen counsel who have represented Plaintiff for several decades, but also to destroy the long-existing attorney-elient relationship between Plaintiff and WFSW in order to gain aseems to documents and testimony that are privileged as confidential communications passing between attorney (WFSW) and client (Plaintif D.
1#F or convenience, the Texas Utilities System Companies that are parties to this litigation (i.e., Temas Utilities Beetrie Company, Texas Utilities Company Tamas Utilities Mining Company and Texas Utilities Services, Ine.) will be referred to herein as 7U Doctrie" or " Plaintiff". Said references shan also include Texas Utilities Deettie Company's divisions (i.e., Dallas Power & Light, Texas Eeetric Servlee Texas Power &
Light and the Texas Utilities Generating Company division) and those predecessors to suen divtsions whicti were formerly separate companies owned by Texas Utalties Company.
F ACTUAL
SUMMARY
As a part of Plaintiff 4 Reply to Defendants' Motion to Disqualify, Plaintiff has fi:ed seven (7) aff! davits (together with a number of exhibits referenced in those affidavita) -
the aff!devits of Joe. Irion Worsham, Robert A. Wooldridge, M. D. Sempels, J. Can Bohannen, Spacer C. Relyea, Nicholas S. Reynolds, and Erle A. Nye. As wiu be demonstrated with more prticularity, these affidavits clearly and unequivocally establish thats (1) there is not now and never has been an attorney-client relationship between WF3W and any of the Defendants:
(2) there is ne rational besis for any of the Defendants to have ever believed that an erwJ4 allent relationship exists or existed between WF5W and any of the Defendants and Defendants' eenduet is direetly contrary to Defendants' belated assertions to the contrary la this litigations (3) Defendants, and eneh of them, have always been aware of the long-standing ares i ellent relationship between WF5W and Flaintiff, that WFSW takes its direstions in connestion with CPSB mattese solely from Flaintiff, and that WFSW provides its legal advice solely to Flaintiffs
! (4)' Defedents havernever deelesed any confidential information to WFSW and have never imposed any confideneen to WF5W (S) Defendants have omaistently telled igen the legal advice of their own attorneys, not is say way connected or amoeisted with WF5W, in au matters in whfeh Pla'ntiff has best kivolved and, in aR such matters, Flaintiff has rolled Leon the legal advice of WF5W and other attorneys not in any way connected or associated with Defendants or Defendants' own attorneyes (0) there is a long history of an adversaria1 relationship between Defendants, represented by their own attorneys, and Plaintiff, represented by WF3W, which adversarial relationships inehade matters pertaining to CPSIS and the very ausgations asserted by Defendants against Flalattff in this litigationg ,
(7) Defendants have, by their conduet, waived and are estopped to assert any possible claim relating to any anaged disquallfloation of WFSW in this litigation by having, on numerous ocoesions and over a substantial time period, acquisseed and not objected to WFSW4 representation of Plaintiff la matters diteetly adverse to Defendant.s, including matters involving the very adegations asserted by Defendants against Plamtiff in this litigations
. . _ _ . - _ _ - . . , - - , _ , y--m - , . , - . - - - _
(8) Robert A. Wooldridge, acting solely as an attorney for Plaintiff en an CPSES matters,is not a material witness whose testimony is either needed or available in this !!tigation, all of Robert A. Wooldri%e's knowlege and Information concerning CPSES having been acqtdred as part of the attorney-elient relationship extant between WF3W and Plaintiff and, thus, being privileged eder the attorney-ellent privuegos and (9) substantial, ineqtdtable hardship and prejudlee would result to Plaintiff should Plaintiff be deprived of its chosen oomseiln this litigation WFSW.
/ WFSW has enjoyed an attorney-elient relationship with Plaintiff for some 45 years (Woreham affidavit). WFSW has never had m attorney elient relationship with any of the Defendants (Worsham affidavit; Wooldrige affidavit, pp.1-3 Sampels affidavit, para. 2, 3,21 and 2S: Relyes affidavits and Sohaman affidavit, pp.1, 8, 8 and 9). Absolutely no legal advice has ever been given by WFSW to any of the Defendants and no confidential commeloations have ever oeeurred between any of the Defendants and WFSW (M.) In eneh and every instance that there has been aJy eentant between WFSW and any of the Defendants, Defendants were represented by their own attorneys, not in any way.
assostated with WPSW, and Plaintiff was represented by WFSW (M.)
Indeed, most of the contaets between Plaintiff, represented by WFSW, and the Defendants, represented by their own attorneys, have been adversarial in nature -which establishes beyond doubt that none of the Defendants could or would have ever believed that an attorney elient relatleeship e5sts or has ever esisted between WFSW and
~
Defendants. Sesh adrereerlet eentaets in 1ude those involving CPSEE. Defendants' very ownership partialpation h CPSES grew out of adversarial antitrust proceedings in connection with the lleenshg of CPSB in wideh Plaintiff was represented by WFSW and other counsel not in any way eennected or assoelated with Defendants, and Defendants were represented by their own attorneys kSampels aff! davit, pers. 5-4, 8-9 and 11-14).
The Defendants and Ptahtiff nogettated the Joint Ownership Agreement and the amendments thereto to provide for Defendants' respective otmership participation in CPSIS, with Plaintiff being represented by WFSW and other counsel not in any way conneeted or associated with Defendants, and Defendants being represented by their own attorneys (Sampels affidavit, pera. 4 and 12). Estensive negotiations have occurred between Defendent Tex-La Electrie Cooperative of Tesas, ke. (Tex-La) and Plaintiff t;eginning in the Fall of 1984 and continuing through the end of April, ISIS, and, again, beginnist in early 1988 through the end of AprQ,1988, in an attempt to resolve the differenees between Tex-La and Plaintiff involving CPSIS, including the settlement of the very anegations underlying the litigation before this Court (Wooldridge aff! davit. p. 4; Behannan affidavit, pp. 4 and 5). Throug3out those negotiations, Plaintiff was represented 3
by WFSW and Tex-La was represented by its own attorneys, Heror, Burchette, Ruckert i Rothwen (Id.) Likewise, extensive negotiations have occurred between Defendants Brazcs Elsetric Power Cooperative, Inc. (Brazos) beginning in the Spring of 1985 and continuing until mid-March,1988, in an attempt to resolve the differences between Brazos and hintiff involving CPSIS, including the settlement of the very anegations underlying the litigation before this Court (Wooldridge alf! davit, p. 5 Bohannan affidavit, p. 7).
throughout those negotiations, Nintiff was represented by WFSW and Brezoo was represented by its own attorney, Joseph Rotwet RQey ($,.) h connection with the May 19, 1988 request of the Nueleer Regulatory Commission ("NRC9 for additional information pertaining to antitrust matters, au three of the Defendants fUed responses through their own attomeys (Sampels aC*1 davit, pare.19). Defendant Texas Municipal Power Agency
("TMPA") asked for (an received) legal opinion letters from WFSW, as counsal for I
I Plaintiff, addressed to eithe J. Roskey Lee or Jim Bailey, as consel for TMPA, concerning the authorization, esecution, delivery, legality, validity and binding effect of the Joint Ownership Agreement for uns k connestion with the issuance of TMPA bonds, the most reeent such occurrence being in May,1988 (Wooleic%e aff! davit, p. 5: Sampels afftdavit, pers. 20s Behannen affidavit, p. 8). These adversarial denungs undersecre the undeniable facts that Ddendants have always understood that WFSW represented Plaintiff and that Defendants would not impose any confidences to WFSW and could have absolutely no rational belief that an atterney*ellent relationship artsted between WFSW and any of the Defendants with respeet to CPSIS or say other matter.
The long history of the adversarial relationships between Plafatiff and its attorneys.
WFSW, on the one hand, ed the Defendants and their own attorneys, on the other, involve l
much more then CPSES. Such adversarial relationships involve proceedings before the Federal Energy Regulatory Comraission (Sampels affidavit, pare. 10-11,15 and 17-18),
pK "--- in various Federal courts (Sampais aff! davit, pare.15-14), and proceedings before the Pelle Utility Commission of Texas (Wooldridge aff! davit, pp. 4-5 Bohannan aff!dvait, pp.1-4). In addition to the nurnerous adversarial relationships involving Iltigated matters annotated in the referenced affldavits, there have been extensive contreet and other negotiations in whleh the interests of Plaintiff and the Defendants have been adverse, with WFSW representing Flaintiff, and other attorneys not in any way connected with WFSW or Plaintiff representity the Defendants (Sampels affidavit, pers.
20 and 21: Wooldridge aff! davit, pp. 4-5 Behanran aff! davit, pp. 2-3,5 and 8).
Despite this long history of adversarial relationships, Defendants now belatedly
\ etsim that they have an attorney-cuent relationship with WFSW. They make such a claim despite the fact that none of the Defendants ever protested the representation by WFSW 4
of its long-standing eHent, Phintiff, in any of th3 numerous encounters heremabove summarised (Wooldridge affidavit, pp. 4Hl Sempels aff! davit, para. 22; Bohannan affidavit, pp. 8, I and 9). Indeed, it was f!ve (S) months af ter the litigation was instituted in this Court before Defendants even raised their disquallfloation contention. Dis, it is respeetfully submitted, is a clear ease for the appileation of the doetrines of waiver and estoppel.
The Defedants attempt to rely sqpon the ASLB proceedings involving the application for a CPSEE operating 11eense to disque11ty WF5W from represer. ting its c!! ant, Plaintiff, in the Utigation before tNs Cowt. De fasts, to wNeh Defendants are wont for this Cowt to be obilvious, plainty show that there is not now, and never has been, an attorney-eMant relationsNp between WF3W and the Defendants in the ASLB proceedings.
De Joint Ownership Agreement, esecuted by Plaintiff and Defendants, inter ga, vests sole responsibility for the Beensing of CF5EB in Plaintiff (Joint Ownership Agreement, sostions 2.04 and 8.01: Sampels affidavit, pers. 7: Wooldridge affidavit, p. 3:
Reynolds affidsvit, para. 9). Pursuant to its responsibuities set forth in the Joint Ownerehly Agreement, Plaint!N employed the Washington, D.C. law firm now known as sishop, uberam, Cook, Purcell & Reynolds to handle the Heesing proceedings (Reynolds affidavit, pare. 2-!!: Relyon affidavit), h early 1984, Flaintiff decided to sigsplement its legal representation h the Hemming pressedings (Nye affidavit, pp.1-2). Accordingly, Robert A. Wooldrl%e, en February 20,1984, tRed a Notice of Appearance in acecedence with the NBCis Rules of Pleottee solely in behalf of Plaintiff (Wooleidge affidavit, pp.
2-3). Robert A. Weelel%e has never fred a Noties of Appearanee for any of the Defendnats in any pressedings (Wooldrige affidavit, p. 2).
De NBC rulee and regulation regidro that aR of the joint owners of CPSES be named as appliennts for the regesite Heemse (Reynotes affidavit, para. 8). Dus, counsel employed tur Fid'ntiff pesuant to its responsibGity under the Joint Ownership Agreement indiented on flungs that they were maldng such flungs on behalf of an of the "appucents" (Wooldr14e affidavit, p. 2: Reynoldr affidavit, para. 8). None of the attwneys, including Robert A. Woolette, consider or have ever considered, that an attorney-client relationship esisted between them and any of the Defendants or that Defendants were their ellents (Wooldrige affidavit, p. 2 Reynolds affidavit, para. 6-11). I.ikewise, Plaintiff has always considered that the only client of Robert A. Wooldridge and WFSW in the lleensing proceedings is Plaintiff (Nye affidavit, pp.1-2). h view of the numerous previous and contemporary adversarial relationships between Defendants, represented by their own attorneys, and Plaintiff, represented by WFSW - hereinabove summarized - it is ineoneelvable that any of the Defendants could rationaHy believe that an attorney-
elfent rel:tionship cver existed between any cf th3 Defendants and WFSW (see also Nye aff! davit, pp.1-2; Wooldridge aft! davit, pp. 2-4).
At au times during de course of the ASLB proceedings, Robert A. Wooldridge received his instructions from, and provided legal advice to, only Plaintiff (Wooldridge affidavit, p. 2). At no time has anyone connected with any of the Defendants ever attempted to Instruet Robert A. Wooleidge in connection with his representation of Plaintiff in the licensing se: _ _9_t (g.) hdeed, even had he over been requested by Defendants, Robert A. Wooldridge would not have necepted instructions in connection with the Hoensing prossedings from anyone other than his ellent, Flaintiff (Wooldridge affidav8t, p. 3). 1he same is true with respeet to Flaintiff4 Washington, D.C. counsel, Bishop, Liberman, Cook, Fureau & Reynolds (Reynolds affidavit, para. H). No confidentialInformation of any nature has bem sought from, or daaw by, any of the Defendants by or to Robert E Wooldrige or Plaintiff) Washington, D.C. consel in connection with the Hemming procesangs (Wooldridge affidavit, pp.1-2: Reynolds affidavit, pers. 6).
Snes the fBing by Robert A. Wealdrige of the Nettee of Appearance solely on behalf of Plaintiff, thee have been nurserous hearings and thousands of pages of testimmy la the ASLB pressedings (Wooldrige affdevit, p. 3). Novetheless, Robert A.
Wooiette has never personaHy erase esamined or presented a witness in the proceedings and has never taken en estive part la the presentation of testimony or evidenee, or oral arguments on administrative appeals (M.):1he vest majority of legal services to Plaintiff '
In the lleensing presseengs have bem performed by 31 shop, Liberman, Cook, Pweell &
Reynolds and by Repes & Gray (Wooleidge affidavit, p. 4). Moreover, no offleer, employee, agent, or representative of any of the Defendants has ever been celled as a witness or provided testimony in such Heenslag proecedags (Wecadridge affidavit, p. 3:
Reynekts affidavit, para 10). An of Plaintifft comsels' bulings for servlees performed in conneetten with the Heensing proceedags have been btBed dreetly to Plaintiff and paid by Flaintiff (Woolette aff! davit, pp. 3-4 Reynolds affidavit, para.11). WFSW4 billings have represented only about 10% of the total bluings for legal services rendered to Plaintiff by all attorneyu employed by Plaintiff in conneetion with the 11eensing proceedings (Wooldridge afl1 davit, p. 4).
1 hat Defendants' ploy to disqualify WFSW la merely an impermiselble trial tactic purposed not only to deprive Plaintiff of its chosen counsel, but also to destroy the long-standing attorney-ellet relationship between Plaintiff and WFSW in order to gain access to privileged documents and testimony is clear. As Defendants are wou aware, the m-depth knowlege of CPSE3, the history of the relationships between Plaintiff and the
Ddendants, the business practices and polfeies of Plaintiff and its officers and employees, and the issues underlying the litigation before this Court - an in-depth knowledge acquired through doendes of WFsW's serving as Plaintiffs legal counsel - possemed by WF5W la such that a disquallfleation of WF3W as Plaintiffs counselin this litigation would result in a substantial los and herdship to Plaintiff (Nye affidavit, pp. 2-3). Such a substantial prejudlee would especially be visited upon Plaintiff in view of the active involvement of certain of the Defendants' own attorneys with matters relating both to CPSEB and the parties to the Joint Ownership Agreement (Nye affidavit, p. 3). Moreover, Defendants' true motive and purpose is to destroy the long standing attorney-eMont relationship between Plaintiff and WF5W la order to gain necess to documents and testimony that are privGeged as confidential communloottons passing between attorney (WF5W) and ellent (Plaintiff). See, as proof-positive of this undeniable fact, p.18 of WookM4e Ishibit 7 to the affidavit of Robert A. Woolei4e which is Brason' First Request for Production of Documents and Things fred la this causet Requests Nos.102 and 103 read as follows:
101. An documents posessed by Ropes & Gray, 31 shop, Liberman, Cook.
Fween & Reynolds, Worsham, Forsythe, Sampels & Wooleidge, or Roy P.
Lamy ("the law Srmst') ooneerning the design, construction or Ueensing of Comenehe Peak.
103. AB doouments eenoeming communientions between TUIC and the law firms, as defined in Request 102, coneerning Comanche Peak.
It is likewise cient that Robert A. Woolel4e is not a material witness whose testimony is either needed or available 18 this Utigation. Robert A. Wooldridge has no ir ' ; --!-
t kaswlege of the fasts tsularlying this utigation (Wooldrige affidavit, p. 8).
AB of the knowledge sad leformation possessed by Robert A. Wooleidge concernirq the facts underlytag the Utigation before this Cowt osme to him solely in his capacity as attorney for Flalatiff in ensulestion with his advislag Flaintiff as Plaintiff's legal counsel (M.) Robert A. Woolette has not made any business deelstens of Plaintiffs he has only given Flalatiff legal advtoe and has learned information from Plaintiff in his especity as Plaintiff's attorney (M.) Thus, en of such legal advice and information is within the proteetion of the time-honored attorney ellent privGege (If.)
As the affidavits plainly estabush, there is no attorney-e!!ent relationship between WFSW and any of the Defendants and there has never been such a relationship - a matter clearly understood by Defendants, Plaintiff and WFSW. Moreover, Robert A. Wooldridge is not a material witness in this litigation. The Motion to Disqualify is nothing but an attempt to pervert the Canons of Ethias set forth in the Texas Code of Professional Responsibility.
7
AROUMENT AND AUTHORITIES A. The courts have roccanized that motions to disotalify arc often used as orocedural w ----z-:- iG and OK 2ently they have refused to ecolY ethical rtdm mechanteelly.
l Motions to disqualify are generally disfavored by the courts. % Como v. I Commerce 00 Co. 407 F. Sigp. 335,342 (S.D.N.Y.198Sh Board of Education v. Nycuist.
590 F.2d 1241,1240 (2d Cir.1979h Laker Airways. Ltd. v. Pen Amerleen World Airways.
~103 F.R.D. 22,28 (D.D.C.1944).O 1 heir disfavor arises not only because, if granted, they invariably deprive a party of his enesel of choice and delay the proceedings, but also beoense of a growing recognition by the courts that disquaufloation motions "have become l
\
ineressingly popular tools In the litigation proeems, being used . . . for purely strategie
\
purposes." Rise v. Baron. 488 F. Snpp.1361,1388 (S.D.N.Y.1978h ag Woods v.
Covinsten Consty Seset. 537 F.2d 884,813 (Sth Cir.197th Ursted Peelfte insurance Co. v.
Zardenetta. 881 S.W.Sti 244, 248.(Ten. Civ. App. - Dallas 1983, no writ). h fact, the new Model Rules of Professional Conduet, reeently adopted by the Amarteen Bar Assoelation, engilettly recognise that the purpose of ethical rules "een be adsverted when they are invoked by opposing parties as procedural weapons.' ASA, Annotated Model Rules of Profemtenal Comheet 18 (1988).
Aeecrdingly, the courts have repeateey held that esquaufloation, as a prophylatie device for preventing ettilaat violations, is a drastle meeswo wMoh should t1 imposed only when ahmolutely neessaary. Penduit Corn, v. All States Flastle Manufactwinz Co. 744 F.2d 1844,1877 (7th Cir.1884h Siement be. v. Ptaketten. SSS F. Sigp. 308, 302 (N.D.
Ind.1983). h resgAs[h metiens to enqualify, the oewts do not paint with broad strokes, and they have indformly held that the Code of Professional ResponsibGaty (the "CPR") and its -M"---i rules are not to be applied mechenteelly and rigidy. jgg, eg, City of Cleveland v. Clev" Ilestrie rn >a. Ca. 448 F, Sigg.193, las (N.D. Ohio), aff'd.
Am STS F.3d 1310 (6th Cle.1977), cert, denInd. 438 U.S. 99Ft197th Field v. Friedman.
, 527 F. Sigy. 938,948 (D.Kan.196th Pennwalt Corn v. Plough. he.. SS F.R.D. 284, 269 (D. Del.1979): Vivitar Corn. v. 8ecidv.143 Cal. App. 34 078, 192 cal Rptr. 281, 282-83 (1983). heteed, seeh case must be deelded only af ter a painstaking analysis of the facts and a proeise appliestion of preeedent to those facts. ,Eg, United States v. Standard Oil Eg ,13B F. Step. 348, 387 (S.D.N.Y.1985h City of Cleveland v. Cleveland Electete y '!here are very few Texas cases whleh construe the CFR. Nonetheless, the CPR is a model statute whleh has at one time or another governed the ethical abugations of attorneys in forty-eight states as wou as most feders! courts. See Develooments in the Ww - Confilets of Interest in the 1.egal Profession. 94 Warv. L. Rev.1244 (1981). Ahe.nigiy, the Tesas cowts as pointed out by Defendants in their Motion (p.18 n.12) consider opinions from other jurisdictions to be persuasive authority in ruling on disqtallfleation motions.
3 1
l
nluminatirw. 440 F.Supp, at 1963 Anderson v. Pryor. 537 F. Supp. 890. 893 (W.D. Mo.
1982). As held by the Second Circuit in International Electronies v. Flanzer 527 F.2d 1288 1293 (2d C!r.1975):
It behcoves this court, therefore, whuo mindful of the existing (CFR), to examine afresh the problems sought to be met by that Code, to weigh for itself what those problems are, how realin the praettaal world they are in fact, and whether a mechanteal and didaatte appuestion of the Code to all situations might not be productive of more harm than good, by requiring the ellent and the judieal system to soortflee roare then the value of the presumed benefits.
As will be discussed below, Defendants ignore these beste tenets, as well as the facts of this case and pertinent legal precedent, and ask this Court to apply the CPR in a mechanical and hyper-technical reanner. When the facts are analysed in light of existing presedent, it becomes clear that WF5W4 representation of Flaintiff in this action impinges gen no othleal rule and that Defedents' metica is " employed as a purely tactical maneuver." United Pacifle Ins. Co. v. Zardenatta. 4415.W.2d at 244.1#
B. WFSW's rearesetation of Plaintiff does not contravene DR 5-102.
'the first asserted basis for the disquallfloation of WF5W la that its representation of Plaintiff la this aetten areates an impermissitde confliet of Interest. The CPR addresses this lasus in Canon 5. That Canon reqdr'es an attorney to "esereise Independent profesional judgment on behalf of a ellent." Idore speeifleally, DR S-105 provides (A) A lawyer shan deeMas proffered employment if the essreise of his IPt preteestanal ju@nent in behalf of a euet we he er is mely to be adrersely affeeted by the asespeamse of the profferee employment, eseept to the extent pesmitted neder DR S-105(C).
(W A lawyer shnu not continue multiple employment if the esereise of his - 7 T_t professional judgment la behalf of a ellet wGl be er is likely to be adrersely affeeted by his representation of another ellent, easept to the extent permitted imder DR S-198(C).
(C) te the situations covered by DE S-10S(A) and (B), a lawyer may represent multiple eMante if it la obvious that he een adequately represent the interest of enon and if eeen consents to the representation after fun deelesure of the peeritse offset of such representation on the essreise of his independet profeestonal ju$eent on behalf of each.
(D) If a lawyer is required to deeune employment or to withdrew from employment under DR S-105, no partner or assetate of his or his firm may aseept or continue such employment.
2/ It should be noted that the bwden of proof with respeet to disqualification lies with the moving party, e Disteen v. Errill Lyneh. Fleree. Fenner at Smith. Inc., 546 FJd 1020,1028 ($ tr.), cert. den ed. 45e U.3. Its intSth DcA Food Industries.
Inc. v. Testy Foods. "ne 620 F. 5tgip. 54, 60 (W.D. Wis.1985): Alesander v. Sucerior court.141 Arts. at ,57,848 F.2d 1309,1313 (1944), and thc.t the beden of proof ts a heavy one United State Foothau 1.easue v. National FoothsH t.easue. 605 F. Supp.
1440,1482-53 (3.D.N.Y.1985h DC A Food Industries. Inc. v. Testy Foods. Inc.,626 F.
SLqip. at 40g Alexander v. Simerior Cawt.141 Arts. at a 855 P.2d at 1313.
.g.
~ .... _ _ _ _ .
r This disciplinary ruta comes into play when a lawyer brings suit against an ex: sting client.
]g, Cinema 5. Ltd. v. Cinerama. Inc. 528 F.2d 1384 (2d Cir. 1976): Interne tfenal Business Machine Coro. v. I.evin. 379 F.2d 271 (3d Cir. 1978); McCourt Co. v. FPC Procorties. Inc. 384 Mass.148, 434 N.L 2d 1234,1235-34 (1982). It is axiomatic, however, that DR 5-108 will not be triagered imless an attorney-ellent relationsnip currently exists between the movent and the lawyer whose disquallfleation is sought.
Egy Fred Weber. he. v. Shell 00 Co. 544 F.2d 802 (8th Cir.1977), cert. denied. 434 U.S.
908 (1978): CivD Servloe Commission v. *== tor Court.183 Cal. App. 3d 70,
. 209 cal Aptr.158,183 (1984): Glueek v. Jonathan Loren. he. 853 F.2d 744, 748-49 (2d Cir.1981) Deveicoments la the Law -Cannlats of hterests in the Leral Profession. 94 Harv. L. Rev. 1244,1293 n. 47 (1981). Thus, the threshold inquiry in any <#atiallfleation motion promised upon aReged simultaneous representation of adverse interests is whether the movent has a current / attorney-ellent relationship with the lawyer whose disquahfloation is sought. If no attorney elient relationship exists, then esqualifteation ismier DR S-108 is istwarranted and Impermissible.
The laqidry, however, does not and there.FNeither subpart (A) nor (B) of DR 5-105 requires disquallfloation meely beesuse a lawyer is simultaneonly representing clients with adverse interests. On the contrary, those deciplinary rules speelfleauy state that a lawyer must dealine a[Mthdraw from employment adverse to an existing ellent only if his independent professional Jimtimmt " win or is likely to be adversely affected" by that employinent. Th% a sesend question munit be answered before ruung on a esqualiftention motion promised en simidtaneous representations of adverse interesta that is, whether 3/ In their Motion (pp.10-18), Defendants assert that if an attorney-ellent relationship entses between WF5W and Defendents, then WFSW la automatiesh daquaufted.
TMs assertion simply ignores the esqullett language of DR S-101(A) and (B), whleh states that representatten adverse to an esisting euent is prohibited caly if that representation wG1 edversely affect the lawyer's enereise of his todependent profeestenal judgment on behalf of that o!! ant. Chateau DeVine Productions.
kl. v. Tase Whitmark Male Library, he 474 213, IIS (5.D.N.Y.1979):
CI Y Commel v. 3akaL 55 Hawed 390, 575 F.2d SGS, $73 (1977)t see Cinema 5.1.td.
- v. giaeama. Die. 538 F.2d 1384,1381(2d Cir.1978). For esamiiFe, in Cltv Council
- v. samaL the plaintiff eity couneS hired a law firm, wNeh was then representing private ellents in pending litigation against the etty in vertous soning matters, as spoeial investigative counsel and hearing counset with respeet to certain alleged improprieties, including soning questions, relating to an trtian renewal project. At the time the law firm was hired, it faued to diselese its adverse representation and the etty refused to pay it contending that it had violated DR S-10$'s prohibition against simultaneous representation of adverse parties.
1he city comeu and the law firm then sued the city to coueet the fees. In holdir.g that the law firm was entitled to its fee, the Supreme Cowt of Hawall esamined DR 5-10S(A) and food that it was not violated beesuse the proferred employment my the city comeS would not have adversely affeeted the law firm's exercise of its independent professional judgment on behalf of their esisting eilent. $8 Hawaii at 399,370 P.2d at 573: accord, Chateau DeVine Productions. Inc. v. Tams-Whitmark Musie !.ibrerv. Inc. 474 F.Supp. at 225 Cinema 5. Ltd. v. Cinerama. Inc. 528 F.2d at 1347.
the lawyer's independent professional judgment on behalf cf a ellent
- win be or is likely to be adversely affected" by the acceptance or continuance of representation adverse to that 4
client. Chateau DeVille Productions. Inc. v. Tams-Whitmark Music Library. Inc. 474 F.
Supp. 223, 225 (S.D.N.Y.1979): City Counell v. Sakal. 58 Hawail 390, 570 P.2d at 573 (1977): Cinema S. Ltd. v. Cinerama. Inc. 538, F.2d 1384,1387 (2d Cir.1978).
As wiR be discussed below, WFSW's representation of Plaintiff in this action does not implicate DR S-108 beesume Defendants have no attorney-elient relationship with WFSW, and even if they had one, WFSW) representation of Plaintiff la this action against Defendants simply cannot " adversely affeet" the esereise of WFSW's "tadopendent professional ju@ent" as eeneerns Defandants in the NRC Ueensing proceedngs, the only proceeding out of wideh the ausged attorney-ellent relationship arises.
- 1. WFSW has no attornew-ellent relationshio with Def"-te.
The existanee of an imperinisuihte eenfilet of Interest under Canon 5 and DR S-105 j
rests gen the existanee of an attorney ellent relationship between the movant and the lawyer whose disquallfloation is sought. Sg, Glueek v. Jonathen lmen. he.. $$3 F.2d at 748: Civil Servies Commission v. Sumerior Cowt. ISS Cal. App. 3d at . 209 Cal.
Rptr. at 783: L Ipstein, C. Careeren, J. Keene & R. Speneer, Confilet of Interest: A Trial Lawyers Guide 9 (1984)(hereinaf ter etted as "M Cmi. The Defendants' argument that they have an attorney-ellent relationship with WFSW !s based won the single promise that a lawyer's filings in an admhlstrative proceedng indloating that such ft!!ngs are on behalf of Joht ownere havisig a common interest in the proceedtrg creates an attorneNilent relationship between the attorne and every entity who la a joint owner, irrespeettve of the.renees far, or nature oi, the fUings. Defendants' Motion j pp. 9-16. As Defendants are joint appueants In the CPSEE lleensing proceedings pending
{ before the NRC and as WitW has made fulags.In these [ ^"g- indlesting that the filings are for au the aggueasts, Ddendanty argue that they M have an attorney-ellent relationship with WFSW. In sgport of their argwnent, Defendants can marshall but two esses, both of whie were deelded almost two decades ages L F. Mutton & Co. v.
Brown. 305 F.Supp. 371 (S.D. Tes. 1949) and Bethlehem Steel Corp. v. United States Metal Plastice. Inc. 20$ F.Sgp. $35 (D.Md. IMS), aff'd se nom.. Bethlehem Steel Core,
- v. Devers. 389 F.2d 44 (4th Ctr.1948). Defendants' argument is a superfleial one, which !
not only ignores the true nature of Defendants' involvement in the lleensing proceedings l
l i
and their relationship with WF3W, but which also ignores pertinent legal authority and I relles on inapposite authority.$I Under the JOA, Defendants have no right to control or even participate in the
!! censing, design, construction or operation of CPSE3. To the contrary, pursuant to l
Peregraph 3.04 of the JOA, Defendants contreeted away those rights and obilgations and
" sole responsibility" for them lies with Plaintiff. Accordingly, under the JOA, Plaintiff and Ptahtlff alone, is responsible for obtaining the necessary operating Ilcense for CPSES and it was Plalatiff who engaged its own law firm, WPSW, to eastst it In that task.
Moreover, eneh formal Notlee of Appearance fUed by WFSW shows plainly that it i
appeared solely on behalf of Plaintiff without any indention that it appeared on behalf of Defendants. Perhaps even more importantly, Defedants are parties to the lleensing proesedings only beoeuse the NRC repdses all the owners of a proposed nusteer power plant to be named as applicants In the operating Heenas. De NRC itself has recognized that minority owners of such plants, like t e Defendants, are merely "g ,f,3ejg" parties to the license appliestion p '"- -
Pelle Service Co. of hdiana. 7 NRC 179,201 (1978);
and, in feet, Plaintiff has been designated la the Operating !Jeanse Application as the entity respesible for obtakhg the opesathy license (Reynolds aff!devit, pers. 8). In sum, under the JOA, Defendants have ne rights or abugations whatsoever with respect to the CPSES Uoensing proceedings and they are parties to these proceedings only because of a teefalest rapdroment of the NBC that an owners of a nueleet power plant be named as appliennts.
h similar situations, the eeurts have talformly rejeeted claims that an attorney-cuent. '^" Venists between the lawyer and the g fggg, party on whose behalf the lawyer has appeared. jg, Sist Studs. he. v. ^-"M Deery Associates. he.,772 F.2d 1587,1844-40 (Fed. Ctr.1988): Levin v. Alanie Twist Mina. he. 414 F.Sgp. 878, 883-85 (LD. Pa. 1996). For example, in Sm Stok. Sim Stude egeged AppUed Doory Assoaistes ("ATA") to develop computercontroRed saw-mill equipment. The parties' agreement contained an invention rights elause toder which title to all patents and l
1/ Defendants also point to the fact that they Indirectly pay WFSW's etterneys' fees as evidence c.f the attorney euent relationship betweer: them and WFSW. Not only have the courts repeatedly held that the mere payment of attorneys' fees does not establish an attorney-euent relationship, DCA Food Industries. Inc. v. Tasty Foods. Int. 430 F.3gp. at 00 v. ";i;_;,11es Reso reh Coro., 504 F.5gp. 1184, !!87 (S.D.N.Y. 190 tel Corp. v. Citibank. M. A. 589 F.Supp.
1234,1239 (S.D.N.Y.1904): ef. LF. Mutton & Co. v. Brown. 305 F.5upp. 371. 388 (S.D. Tes.1969)(attorney-ellent relationship found even though movent did not pay the lawyer % fees), but until the filing of this action, Defendants did not even know what fees were paid by Plaintiff to WFSW in the Ucensing proceedings and never ,
j requested information about them. It was only after this suit was filed and
' Defendants began threatening to fDe a motion to disqualify WFSW that Defendants became interested in this information.
1
l l
inventions arising out of the engagement would be asigned to Sun Studs. ATA was also '
required to diselose such inventions to Sun Stude and to fully assist Sun Stude in obtaining patents for its orelusive benefit. Pursuant to this agreement, employees of Sun Studs, Sohn and Holmes, and ATA, Hunter, invented equipment and a patent appliestion was fHed with the Patent and Trademark Offlee on behalf of the inventors by Sun Studs' patent attorney, Chernoff. The patent was issued, and several years later Sun Studs sued ATA for infringing that patent.
ATA counterelaimed asserting that the patent was invalid and moved to disqualify Chernoff from representing Sun Stude in the litigation because he allegedly had represented ATA and Noter in the patent appliestion proceedings before the Patent and Tredessark Offlee.
1 kt reversing the trial court 4 granting of the doqiallfleation motion, the United States Court of Appeals for thei Federal Circuit found that Chernoff4 representation of ATA and Heter in the patent application F:: A was a teehnical one required by the patent laws and the parties' agreernent and that it, therefore, did not erente an attorney--
ellent relationship.
The relationship between inventor and his assignee's patent counsel who is appointed to prosecute the patent app!!eation must be eensidered in conjection with the patent laws governing the acquisition and assigrument of rights to inventions.
An inventer, who is hired or employed by a cornpany, and who develops an levantion la the oorse of his work whleh he has agreed to assta to the company, is naquired to esseute whatever papers are assemesy for the compeily) patent ecumsel to prosseute a patent applienties on behalf of the company. 1his procedwe is dotated ter SS U.S.C. S 111 (and 37 C.F.R. S 1.41) wMeh reqdres that the g must apply for the patent. That patent appliestian must genereRy eentain an antit try the inventer. 37 C.F.R. S 1.51(aM3). The cath normally includes a power of attorney. Manualof Patent Enamining Procedwe. Chap. 403 (Sth ed. 1983). Even where the invention has bem assianed to the l
--"T. the Inventer must st1B De the -~-- ^
37 C.F.R.
l 5 1.45. The assagnee rosy, however, preessute the application to the ==h=8= of the inventer. 37 C.F.R. S !.33. The PTO corresponds with the persons named in the original power of attamey even after an asignment is recorded miens the assignee otherwise requests. 37 C.F.R. S 1.33(a). Thus, it is routine for an inventor to esecute an appliestion appointing the attorneys who prepared the application at the dreetion of the party to whom the appilaation must be seulgned and on whose behalf it will be prosecuted. The choice of attorneys, like the fDing, is a decision by the assignee, not the inventor. It faellitates payment of filing fees by the assignee and insures that PTO correspondence from the beginning is dreeted to the assignee 4 representatives.
Should the company later find it necessary to sue on the potent, it is to be espected that the company would choose its regular patent counset for representation whom the inventor designated on its behalf. Where the former relationship twtween the inventar and the ostent ecunsel was soleiv teettileal in nature, and where the ostent counselIn the former relationship was chosen by and at all timas was wattrire on benalf o ' the compeny rether than the inventor, it should not serve as automatie disque12fleation
.1
-. -.. , _ , _ ,,- ,- --.-.. - ...-..... - ,,,---.~ - .. ,-...-. - ------.,. - -.--,.-,--- .- -
that thi d'fendant is ths inventor er a company with whfeh he is associated.
At all relevant times, from the 1971 negotiations to the prosecution of the application for the '579 patent, both Hunter and ATA knew that Chernoff was Sun Stude' patent counsel. As specifled in the 1971 agreement, aA rights in inventions arising from ATA's consulting work were to be assigned to Se Studs, and Se Studs had the exclusive right to f!!e and proceeute patent ma appilaations on the inventions "in its sole daeretion." Along with its duty to easign the invention rights, ATA had a duty to assist Sun Stude in perfecting its patent rights by executing and delivering aselsnments, oaths, Wanistreers, patent applientions, and other instrumenta. when H inventor wt Sohn and H
tm con to t m was e en en a .
772 F.2d at 1544-49 (footnote omitted, emphasis added).
A similar result was reached in Rignie. Twist Mius, ki that ease, Levin, an investor and owner of a patent, sought to daquellfy two patent lawyers, Edelson and Udeu, from represetting the defendant in a patent infringement suit. Levin invented the subject matter of the patent, and he entered lato an esclusive Ueense for the patent with the defendants predecessor, Newman. Pursuant to the lleense, Newman had the right to prosecute the patent appuestion in Levint name and Levin was obugated to cooperate with the lawyers chosen by Newman to do so. Newman engaged his long-standing oownsel, Edelson and UdsE, and they prosecuted'the patent application before the Patent and Trademark Offlee la Levint name and with his cooperation. When Newman died, his business, includsg the smalusive patent Ueenes, was sold to the defendant. Thereafter, Levin claimed that the license had terminated by reason of the defendant's breach of it and that the defendant's continued use of the subjoet of the patent ecastituted an infringement of it. Levin then sued the defendant for patent infringement and moved to disqualify Edelsen and Udell from representisy the defendant.
Even though the patent lawyers represented botn Levin and Newman in the i proseeution of the patent application before the Patent and Trademark Offlee, the l
Eastern District of Pennsylvania found the relationship between Levin and the lawyers to be teetmical la nature, since Levin had conveyed the right to prepare and prosecute the ,
patent application to Newman and Levin was a party to the proceeding only because the patent laws regtdre the invcator to be a party to the patent app!! cation proceeding. The Eastern District of Pennsylvania, therefore, held that the relationship did not constitute
, an attorney-client reistionship.
l__ _ __ _ - - - - - -
N;wman ...
always was Edelson/Uden's primary cuent.
Edelson/Udea acted as counsel of record on the patent application only so long as it was in Newman's Interests, and it always should have been clear to Levin that to the extent he then was Edelson/Uden's ellent, he was their secondary eUent in this matter, and that Levin might at seine future time be Utigating against their primary ellent. Under the Asreement. Newman had the riaht to orceeeute ostents in Levin's name. and Levin was oeHgated to cooperate with attorneys of Newmans choosing so long as Newman actively pursued the application. Newman pressoution, including Edelson/Udau's fees. paid Levinthe costs of the bergoined for this arrangement . . . . We cannot oreswee that the technical awyer-client relationshio between Levin and Newman's attorneys nduced Levin to L. any information which he was not
.a.stmIlv "'-=tM to "- lo them In any event.
418 F. Sapp. at 885 (footnote omitted, emphasis added).
The ocurts have also refused to find the adstense of an attorney-client relationship fe pwposes of the CPR in other analogous situations. For example, where two or more parties join together for a common undertaidng and one party loowingly agrees to use the long standng lawyer of the other party to hande legal matters relating to the ecmmon tsulertaldng, the courts have miformly retmed to esqualify the lawyer from representing his long-standng ellent in a suit against the other party arising out of the common
- t. : ;.; dig.
Blustrative of this primetple is Allesmert v. Perot. 548 F.2d 244 (3d Cir.1977). h that case, two wau street brokerage firms, duPont Glare Forgen ("DGF*), owned by Ross Perot, and duPont Walston (Walston) entered into what was in effeet a joint venture. DGF and Walston used ties ed DGPs and Perot's law firms to represent them in several mattare relating to thstr Joht activities and Walston paid a portion of the attorneys' fees incurred by that representatted. Eventuany Walston went lato bankrgtey and the trustee in bankrgtey bregnt suit, agalast DOF aniR'Faret, who engaged the same two law firms to defend them la that suit.
k affiersing the Katriot court's denial of the trateet motion to daqualify, the Second Ciredt relied gen the feets that no eenfldential information could have been I provided to the law fittas by Walston, that Wdston was represented at every step by its own cownsel, that Walston knew and that DOF and Perot were long-standng ellents of the two law firms and that they stG1 were representing DGPs and Perot's interests and would i
continue to do ao in the future.
Neither Walston nor entone comeeted with it could have thouht that the WeR Gotshal and Levs, Hawes firms [DGPs and Perot's law firmsi were representing Walston without appeuses' knowlege and approval, or that any in'ormation riven to the law firms conceivablv would have been told confidential from tie artmary eJ of the 5tms,[DGF and Perotl. At every steo D alston was
.at by Stearman & Sterlint. Moreover, Walston knew that Perot, L 'iF and the Perot interests were at aH times represented by Weil, Gotshal and Love, Hawes. Any work that Well, Gotshal or Leva. Hawes performed for Walston was pursuant to the realignment agreement. All other legal wwk in dispute on this I
.n.
1
appeal was performed by well, Gotshal and Leva, Hawes for their primarily ellents.
.eee Any representation of Walston was done with Walstont imowledre that the firms were still representfar the Perot interests and woulc continue to do so. Weil, Gotshal and Leva, Hawes never change <
sides.
565 F.2d at 250, 251 (emphasis added). See 3lgp hterstate Properties v. Pyramid Co.,547 F.Supp.178,182 (S.D.N.Y.1982) WII11amatner Wax Museum. Inc. v. National Historical Flaures. he. 501 F.3gy. 328, 330 (D.D.C.), aff'd se nom.. Souventer Center v.
Historelal Flaures. he 728 F.2d 503 (D.C. Cir.), cert. denied. 469 U.S. 825 (1984): Dom ed Stadium Hotel Ine. v. Ha88ev kna. he. 479 F.Sgp. 488, 444-49 (E.D. La.1979);
Moverland Commaity Imorovement Amoetation v. Temole. 700 S.W.2d 283, 264 (Tex.
Civ. App. - Houman (1st DistJ 1988, writ ref'd n.r.e.).1#
The feats of this ease areptrtuaEy identleal to those in M and Rioole Twist M,1,gg. ATA4 and Levint partielpation in the patent appliestion proceedings before the i
Fatet and 1)ademark Offlee in these cases is no efferent than Defendants' partleipation In the licensing appilaation proceednge before the NRC here. ATA and Levin were partit a to the patent appliestion proceedings beoeuse of the requirements of the patent j
laws and Defendants are parties to the lieeneing proceedings solely beesuse of NRC requirements. '
l S/ h their Ifetten (pp,12-13), Defendants argue that an attorney-client relationship i
i een exist even withmet the commtmioation of eenfidenees between the client and the party. Althengt a few esorts have se held, one of the prineipal polley purposes j
underlying DE Salto and other DRs is the preservation of the ellentt confidences by the lawyer and preventing inndrertent tese of these confideneer on behalf of another ellent, Vivitar v. Breidt.143 Cal. App. 3d at 191 cal Aptr. at 283-84.
Moreover, in analegeus situettens, the seerts have miformly refused to disqualify a lawyer where no eenfidenees could be asetoond. AIsseert v. Perot. Sol F.2d at 350-413 WlBlamense Was Mineum. he. v. Yaures. me.. Set F.Sgp. at 330g Domed 5tadum NoteL lhe. v. Retidat Inna. he. 479 F.3gy. at 449 (alternate holang)g Ekstein. Corceren. at 413 see Meyerland Community Imorovement Aansedation v. Temote. 700 S . at 380.
Defendants also argue that " ease authority mandates disque11fleation of an attorney who has represented joint owners in a joint proceeding from then representtry one owner against another." Motion p.18. h agpert of this proposition Defendants cite Glueek v. Jonathon Wenn. Ine.. SS3 F.2d 744 (2d Cir. 1981): In re Banks. 283 Or. 430. 554 F.2d 284 (. 975): and in re 768 Asseetates.14 Sankr. 449 (D. Hawaii 1981). Neither that prinelple, nor these eases are eentrolling here. As pointed out above, the coerts have virtusBy Leiformly refused to esqualify a lawyer who represents a common undertaking if, as is the ease here, the movent understood that the lawyer was the longMing lawyer of the other party and that he was representing the other party % interests and would continue to do so. F A. Alleraert
- v. Perot. 545 FJd at 250-513 hterstate Properties v. Pyramid Co.. HT F.Supp. at 152: WIulamsburr was Wseum, me. v. National Mistorteal Tirures. Inc. 501 F.Sep. at 530.
Moreover, Defendants, Uke ATA and Levin, contracted away their rights to actively participate and control the licensing proceedings. Just as no attorney-elfent relationship s
was created between ATA and Levin and the patent counsel by reason of those lawyers' appearance in the patent appuestion proceedngs on behalf of ATA and Levin. no attorney-client relationship between Defendants and WFSW has been created by reason of WFSW's appearance in the CPSES operating !!aense proceedngs.
'the fasts of tNs case are also simDar to those of M. Like DCF and Perot in h Plaintiff has had a long standing relationeNp with WF3W of which Defendants were eteerly aware when they became parties to the JOA. IJke Walston in Aueesert.
Defendants have never divulged any confidentiallaformation to WFSW and, in fact, have none beseuse they play no role in the lleensing, design, or construction of CPSES.
Moreover, udike the parties in gggg], Defendente and Flalatiff have had.a long-standing adrersial relationship for many years not only with respeet to CPSES but with respeet to numerous other matters and, Hke W,3lggg, have always used their own lawyers in dealing with Plaintiff both in eennection with CPSES and those other matters. h fact, Defendants' own attorneys regularly have monitored the 11eense appuestione proceedings amt have represented Defendants la their dealing with Flaintiff concerning CPSES.
Defendants never ressenably beHeved, and eeund not reasonably believe, that WFSW represented them. Allesmert v. Perot. SOS FJd at 350-81: WQ11amsener war Museum v.
HJaggiMLh Set F.Sigp. at 333-31: Interstate Prooerties v. Pyramid Co. 547 F.Sigp. at let FinaDy, neither of the esses etted by Defendants, Bethlehem Steel Corn. v. U.S.
4 Metal Plastles, he. nor EF. Muttes & Co. v. Brown. sugests that a lawyer's appearance in an administrative proceeding on behalf of a person who la legany required to be a party to that proceedsg, but who has eentreeted away Ms right to partleipate la or control that proceeding irrebuttably creates an attorney-ellent relationship between the lawyer and that pereen. Bethlehem Steel ed not evet involve a motion to disquauty. Rather, in that case, the defendant sotght to vacate a summary Mment on the groned that the lawyer l who answered on his behalf and defended against the motion for summary judgment had no authority to de so. 'the facts and lasues in that ease are not even remotely similar to i those involved la this ease and it simply is inappeelte.
i Similarly, Brown did not involve a mere teetmical appearanee on behalf of a petty by the lawyers whose disquallfloation was sought, nor did the Southern District of Texas hold that any appearance by an attorney on behalf of a person in a judicial or admtnistrative proceeding irrebuttably erentes an attorney-client relationsNp. To the contrary, the facts in Brown. unlike those in this case, established an attorney-cuent relationship.
. =. - . - . .- .- . . _ . ..
In Brown. LF. Hutton sued one of its regional vice presidents, Brown, for negilgently making a loan. Brown had approved and made a substantial!oen to Hurbrough, who used the proceeds to acequire the stock of Westec Corporation. Shortly after the loan was made, the Ameriean Stock Ezehange and the SEC suspended trading in Westee stock and Westee went into bankruptcy.
I in ese cowse, the SEC and the tristee in bankrigtey conducted hearings for purposes of identifying persons who had criminal or civu liability in connection with Westeet demise. Brown and other Mutton employees were required to tes^ify at those hearings. Brown was seeempanied at both hearings by lawyers from Hutton's New York and Housten law firms. Frier to the hearings, Brown conferred with those lawyers. At theos hearings, Brown, without objection from the lawyers, identifled them as his counsel and, during the hearings, they -ri./., took notes and trutrusted Brown to clarify some
, of his answers.
After the hearings, Hutton fired Brown and lastituted suit against him. Brown then moved to disqualify the law firms of the lawyers who had accompanied him to the hearing -
from representing Hutton in its suiL Based on the above feats, the Southern District of Teses eeneluded that the presseption, thogh rebuttable, had not been overeeme.
j 1he fasts la 333 are a far ery from these in this ease. Unlike in Brown.
Defendants have been represented by their own eeunsel in every step of the way. Unlike I
in IEEl, WFSW has neithe appeared with Defendants ner consulted Defendants about the lleensing pressedags, Rather, WFSW'has filed Nottees of Appearance only on behalf of Plaintiff and.has espely indiented that eartain fRings were made on behalf of all appueants, whleh inelude Defendants, only beoeuse their euent, Flaintiff, is required to handle the Usensing preseedings on behalf of an of the joint owners, beesuse of toehnical regidrements of the NRC and beesuse of Flatatiff's eentreetual responsibilities under the JOA. To the estant that any preewsption may arise from W73W4 settore la the licensing proesedgs, that presumption is clearly and completely retutted try the facts of this case.
M Ine. v. Acoued Theory Asseetates. Inc. 773 F.2d at 1544-49 !.evin v. Ripple Twist Mins. Inc. 418 FJupp at 843-88.
In sum, any estion in the Ueensing proceeding on behalf of Defendants by WTSW is purely teetnicalin nature and required by NRC rules and practies. Accordingly, it does not give rise to any attorney-euent relationship for pwpose of the CFR and Defendants' claim to the contrary is simply motivated to obtain a teetteal advantage in tNs uttgation.b
- 2. Even if Defendants and WFSW have an attorney-elfont relationshio, WFSWs diseuall 'lesuon is not warrented because WFSW4 continued representation of Plaantt in this setion wiu not adversely affect the excretse of 'a F 5 'a s
.se.
indeoeident orofessional fudgment on behalf of Defendants in *re CPSES license acclication orGMines DendInt before the NRC.
DR 5-10S(A) and (B) do not prohibit every simultaneous representation of adverse
\
interests. Rather, those didefplinary rules only prohibit adverse representations when the independent professional judgment of a lawyer "will be or is !!kaly to be adversely affected" by accepted or continuing representation adverse to an existing client. Accord.
City Couneu v. Sakai. 58 Hawaii at
. 570 P.2d at $733 _see Chateau Devlue Productions. Inc. v. Tame Whitmark Musle Librarv. Inc. 474 F.Supp. 223, 225 (S.D.N.Y.
1979). Thus, even if this Court were to find that Defendants have an attorney-client relationship with WFSW, this Cowt, in order to cinquellfy WFSW, must also determine that WFSW4 continued representation of Flaintiff in this action "wtB or win be likely to adversely affeet" the esereise of WFSW's independent professional jugment on behalf of Defendants la the 11eensing proceedings pendhg before the NRC.
Here, the requisite adverse effeet is abset. That this is the ease should be abytous.
Under the JOA, Flaintiff has the sole responsibility for au matters regarding the Ueensing of CPBEB, including the Ueensing proceedings. As Plaintiff, rather than Defendants, has the sole responsibuity for the Ueensing peoseedng and as Plaintiff engaged WFSW to
- asist it in fulfuling these responsibuities, it le simply impossible for WFSW to favor Plaintiff ever Defendants in these proceedings. Mero importantly, the vigor of WF5W's
- ausged representation of Defendants la the licenr9tg proceeedings wiu In no way be diminished by its representation of Plaintiff k this action. This results from several factors. Both Flahttff's and DefendsuInts' o6)estive in the 11eensing proesedings is l Identical, that les the attelement of an operating Heense for CPSES. Not only is the I
cejective idetleal, but only one Ueense for aR the CPSEB owners wGl be issued.
Additionauy, Flaintiff's position in the licensing preeeeenge a'mply is not adverse to its poultion in this action. Finally, Defendenta de not even have the right to take an adverse positten to Plaintiff la the Hoensing proeoeangs Seeeume under the JOA they contactuany 8f h their Seeend Swlemental Memorandum, Defendants assert that the NRC has already found that Defendents have an attorney-euent relationship with WFSW. In swert of their assertion, Defendants point to a November 28, 1988 Memorandum and Order of the NRC. Nothing in that order so holds. That order concerned a motion by the Intervener la the 11eense appuestion proceeding for escovery of certain doeuments of Tes IA. Nothing in that order analyses the nature of Defendants and WFSW's relationship e any pertinent auttatty and the NRC comments about Defendants' relationship with WFSW la nothing more than a spesition. h feet, the NRC speelfleauy stated that Tes-1.a's allegations that WFSW was its counsel were not " relevant to the outcome of the motion currently j before us.' bdeed, the deeovery was conettoned, at Tes-ta's insistence, upon the '
entry of a protective order which prohibits disclosure of Tes-I.a's documenu ts either Plaintiff or WFSW. Ten-!.a's said insistence is the very antithesis of an attorney-euent relationship between Tes-1.a and WFSW in the licensing proceedings.
- . - . . - . - . . . . _ _ _ _ _ . _ . ~ _ _ .--._.-l
gave Plaintiff the " sole responsibility" for obtaining the operating Heense. Aceerd,sm Stude. Inc. v. Acolled Theory Associates. Inc. 772 F.2d at 1589.
O In sum, WF5W4 continued representation of Plaintiff in this action cannot possibly have an adverse effect on the exercise of its independent professional judgment on behalf of Defendants in the license application proceedings even if this Cowt found that Defendants and WFSW have an attorney-euent relationship.
- 3. Defendants' etsims under DR S-108 are barred by equitable artnetoles.
The esse law elearly recognises that equitable considerations must play a critical role in the evaluation of an attorney esquallfloation question. Due to the harsh nature of the reuet sought and the teetteel advantage it may give to the movent, courts will not lightly derogard such equitable eensiderations in light of the harm to a petty in losing its longtime attorneys.
For example, la Sist Stude. he. v. Anelled 1heory Assoaistes. he. 772 F.2d at 1589, the Cowt recognised:
The equities aise weigh asaltet esqueufloation.1he Chernoff firm has represented Sist Stude for ever 14 yeare, has, eendueted the litigation since its ineoption in 1978 which includes over twee years of eseovery, and has undoubtedy aegidred linewledge and egertise relating to the teelenology and events involved la the suit.
It has been siellarly resegnised thats in a higtly teshaloal ease, aIsttermey miWit have acquired unique espertise with respeet to the matters in depute, and ne substitute onessai could agply the ellent with comparably adequate representations la such a esse n the serious preludes to the ellent, when weigned agelnet the signifteense of the testimony, might l
justify inveesties of the easeptien. Similarly, a tomar 4" -
- C '
esuld _ __ _ P:3 create e situst on where an a- torner has as - . -- ; and t.- .m ' ^ : - ' e rammartty wt n the arralre of 4e et ent.
Mee Arthw v. Bank of New York. S14 F.Sigy.,1216-11 (S.D.N.Y.1941)(emphasis added):
The rule sonettons the lawyer % eentinued representation Nitillt is apparent that his testimeny is or may be prejudelat to his ellent,' and, as the cowt reeegnised, the annesmeement by an advereery intends to call opposing ocamsel as a witness does not offset an automatie esquaufteetion of the lawyer under the rule. 441 5.W.2d at 244. Indeed, the Zardenetta cowt speaks of the broad daeretion vested in the trial cowt In applying the rule,14., a eserotion pesuuarly eseretsed in determinirs whether an indleated withdrawal under DR $-102(8) should not be ordered if it, on the authority of DR 5-101 (BX4),
would work a mestantial hardship on the ellent beesuse of the distinettve value of the lawyer or his firm as counsel in the partleular case.
Banics v. Soone 891 S.W.2d at 704.
Moreover, some cowts have used sa equitable approach and have considered other factors, such as the time and ergense esDertied by counsel on behalf of its cresent ellent and the profue lee that might result to counsel's present eilent if counsel were 'orced to withdrew.
, . nn .
l
-_.r-_,___ . . . _ . _ _ _ _ _ _ _ - . , _ _ _ . _ , . , . . . _ _ _ _ _ _ _ . ____ _ . _ . - . . . _ . . . . _ _ . _ . , . . . . , . _ _ _
l l
Howard Hushes Med. Inst. v. t.ummis. $96 S.W.2d 171,174 (Tex. App. -- Houston (14th DistJ 1980, writ ret'd n.r.e.)(eitations omitted).
The reened before this Cowt clearly shows the longstanding relationship betweert ;
Plaintiff and WFSW, as well as the extreme hardsNp that would result to Plaintiff should WFSW be disqualified (Nye affidavit, pp. 2-3). The comptes technical nature of this lawsuit, as well as its enormous importanee to Plaintiff, are also elear beyond dispute. It would be manifestly afair and harmful to Plaintiff to deprive it of its chosen counsel under the circumstances of this osse. Considering the clearly demonstrated adversarial relationship between the parties over many yeare and on numerous fronta, it would be a travesty that Defendants would be able to retala their comsal who have represented them throupiout their Involvement in CPSM, whue at the same time depriving Plaintiff of its counsel who has advised it and represented it throughout that same period. The damage would truly be irreparable ieder'the otroumstanees.
Indeed, the inequities inherent in Defendants' attempt to disqualify WFSW are magnified by even a oweary review of the record before the Court eoneerning the long h! story of adversity between Platatiff and Defendants. As is clearly demonstrated by the i
affidsvits on flie, Defendants have indeed been adreroe to Plaintiff for many years and in virtuany every Imaginable forwe. Indeed, as the affidavits plainly show, many of these confilets have arisen over CP5M ltself, including the very issues involved in the litigation i
before this Cowt. It is eteer that, since late 1964, Defendants, who are sophistloated utilities always represented by their o$n separete eoesel, have advaneed the same l allegations against Flalatiff which they new advanee In this lawsuit. Throughout this
! period ami even la eseussiens with Defendants aimed at an attempted settlement of the i
disputes over CFsu well prior to the institution of litigation, Flaintiff was always represented by WFSW. Dwing this lengthy posed, neither Defendants nor their attorneys ever semplained of, or even suMested that, a eent!!et of Interest esisted because of WPSW4 representation of Plaintiff. hdeed, it was not intti five months after this lawsuit was instituted that Defendants even f5ed their motion to disquality WFSW. The facts and the onse law elearly demonstrate that Defendants are equitably estopped to claim, and have walved, any such alleged confilet. Glover v. t.lbman. Sfe F.S'gy. 748, 780 (N.D.Ga.
1983): Centrs! MQir Producers Cocoerotive v. Sentry Food Stores, he.. S73 F.2d 988,992 (8th Cir.1978): INA (Jnderwriters Insurance Comment v. Nellbotsirv. $94 F.Supp.1199.
1204 (LD.Pa.1984).O bdeed, if Defendants and their comsel truly believed that a conflict did esist, they should have (and doubtless would have) raised the matter years ago. As it is, their long silence clearly operates to waive the alleged conflict, whien is quite obviously only now reised in an effort to obtain an impermissible tactical advantage.
1 t
Defendants' feigned righteous indignation concerning WFSW's representation in ths case is clearly transparent. Defendants interests in this case will not be compromised by dental of their motion. Indeed, they do not even attempt to make such a claim. On the other hand, as Defendants know and fully appreciate after dealing adversely with Plaintiff for yeare through their own lawyers, Flaintiff will most certainly be severely and l unneeemaruy crippled by not having seeems to their long-standing chosen lawyers to represent them la this case. Moreover, Defendants' ploy is an effort to destroy the long-standing attorney-ellent relationship between Plaintiff and WFSW in order to gain access to privileged documents and testimony - confidential oommunleatiosa passing between an attorney (WFSW) and euent (Flalatiff). The facts la tNs eens and the applicable case law simply do not permit such tefairness and inequity.
C. WFSW4 .
__--_Mtian of Plaintiff in tNs action does not contravene DR S-102 benen ne no wraw laws e ther r_ ~ ^_ to testify on CC " of Plaantiff or will be eene as a witness on behalf of Defendants and wtB Drovide testimony Deeludicial to Flainulfr.
Defendants also attempt to esquauty WFSW by elaiming that Defendants may call 3
attorneys from WFSW as witnesses in tNs uttgation. Defendants do so without any evidense presently before this Cowt that"any attorney with WFSW has independent knowle$ of any relevant feats.
WFSW's attorneys' sole role in the lleensing prossedings before the NRC is as attorneye for Plaintiff. They have not made business deelstens. They miny have given i
legal advice and learned of information from Flaintiff, but an of such information and
, advtee faus tander the protection of the attorney-e!! ant privGege. Certainly, the burden rests LgMei Defendsats, as movents, to estabush feats that one or more WFSW !awyers have independent knowle$ of nesquetvGeged matters wNeh etevinces the Court that the l !awyers "ought to be a witness in tNs aetion.
' Die same presautlens apply in summining this aspect of the rnotion. Again, *(t]he attesept by an oppseing party to disqualify the other side's lawyer must be viewed as a part of the tastles of an adversarf proceeding (whiefd demands judiefa! scrutiny to provent literalism . . . ." Scotherhood Railway Carmen v. Deloro Co. 549 F.Supp. 180 784 (D. Del.1942).
7/ It is clear that where, as here, sophistleated business entitles are involved, the courts are willing to flad welver and equitable estoppel where the party seewiry to disqualify counsel was aware of the facts and a!! owed the alleged simultaneous representation to entst for a period of time without complaint. See City of Cleveland v. Cleveland Eleetrie Qluminatire Co. 440 F.Supp. at 201-dFAuseent
- v. Perot. 434 F.Sg. 790, 799 n. ,3 (S.D.N.Y.1977), aff'd. 365 F.2d 240 (2d C.r.
157T).
l = 12 =
- . - - _ _ - -.-_ -_ - --- . - - . - . . . ~ . _ _ - -
l'aderstanding that a client may wish to continue with the attorney of its chotee. !
I despite the dangers, the Cowt must carefully examine the purported dsquallfleation k evidence.
The Diselplinary Rule as reLued to the witnese question does not require !
diseasseistion from the proceedings, only that the twyer not appear in open court before the jwy. "He shan withdrew from the eenduet of the trial. and . . . shan not continue representation in the trial . . . .' DR S-103 333,3lgg, Dr= za v. Flest National Bank of Hollywood. Set FJd SSO, SSI (Sth Cir.1974), M M 421 U.S. 919 (1975): United Paeifle Ins. Co. v. Zardenetta. 441 S.W.2d 244, 347-40 (Ten. App. - San Antonio 1902, no writ)t Mover v.1330 N'x^===th Street Cors. 507 F. Supp.14,17 (D.D.C.1984) Norman Narreu. he. v. Federated Denartment Storen. Ine. 454 F. Supp.127,131 (S.D.N.Y.1978)
Makastan v. heentrade. he 70 F.R.D. 219,233 n.3 (S.D.N.Y.1970)t Connen v. Ctalrol. ;
jag,444 F. Supp. If,19 (N.D. Ca.1977).
After a detaGed seemination of the featual lasues and whether the attorney has any ladspendent knowledge relative to the festa, the great majority of courts have refused to-dagiality eemsel. Only these esses where the attorney actuaHy partielpeted in the h (ggggg of the ellent, resulted in disquaufleetion. Comoert 94.. Aeme Analvels. t,td. v. tamme Co.. Set F. hop. 304-307, (S.D.N.Y.1988) gag Heatherest. Inc.
- v. Amerieen Wedeine International.'ine,. 804 P'.Sigy.1947, Illi (N.D. Ga.1945), nith Camsil for N='-' R "-- of N=M "- .lse N..L; in NJc'ri v. Ametteen Home Assuranse Co Sat F.Sigy.144, i41 (D.D.C.1948) gg ontyt Eyeweer Fashion lhternational Casm v. ftvle Cen. 700 FJd 1048,1049 (9th Cle.1988).
Such a situaties le totaRy different from the ease before this Court where WFSW has no indepedet leewlege of eventa. They have asewnulated their knowlege of this case only from privSeged commelestians which are neither admlauttne nor discoverable evidense.
CM;"ri Rule 8-101 refers to two instanees when a lawyer may be esquallfled i.
with respeet to testimony he may or oight to give in the trial. Speetfleelly the Rule l providnes DR S-102. Withdrawal as Consel When the Lawyer Becomes a Witness.
(A) If, after understaking employment in contemplated or i
I pending litigation, a lawyer learns or it is oevious that he or a lawyer in his firm ought to be eaued as a witness on behalf of his cuent, he shall withdrew from the oor. duet of the trial and his firm, if any, shall not continue the representation and he or a lawyer in his firm may testify la the etreumstaneen enumereted in DR i
S-10l(C)(1) througn (4).
I (B) If, after undertaking employment in contemplated er pending littgation, a lawyer learns or it is oevious that he or a l
4,.
I
lawyer in hb firm m:y b3 called as a witness other than on ':eralf of his ellent, he may continue the representation until it is apparent that his testimony is or may be prejudicial to his ellent.
Section(A) of the DR 5-102 deals with situations when the lawyer or his firm g to be called as a witness on behalf of his cuent. while Section (5) of DR S-102 deals with the situation where a lawyer or his firm m_d[y,be ceded as a witness other than on behalf of his c!! ant.
Defendants' Motion To Disqualify essentially makes the distinction between Section (A) and (B) of DR S-103, gggg an imaginative prediente for disquallfleation based on Section (3)- that is, WFSW may be enHed to testify other than on behalf of their ellent, and then sture the distinction between the Seetions (A) and (B) by offerirq quotes and case of tes employing the language of Seetion (A).
Virtually an of the recent esses on the general sejeet of attorney disquallfleetion due to the 'witneen rule" state and restate the abugation of the court to esamine the ederlying feats for fear of implementing a perhaps methical teetteal ploy of counsel in seeking disquallfloation where the facts de not demand it. For example, the Texas courts have held that We resegnise that a mere annemeement by an adversary of his Intetten to call opposing eeunsel as a witness is insuffletent 'e orchestrate counsel 4 c5equauflection. If this were not so, such a devlee might of te be empisyed as a purely teetical maneuver, t7nited Perifle Insurance Co. v, Zartienetta. 441 S.W.3d at 244 (ettations omitted):
Also, there is a sleer danger of such a teetle being used by an opposing esesel to tusquauty the sedutul, the stuteern, or the pesetal adversary. Therefore, appeaste eowts must look eereitsgy to the etreumstanees of enen eene in deelding whether mandamus should lesue to prevent an,atues of diserotion by the l trialeset.
Bert Wheelert. he v. Ruffine. See S.W.2d $10, $14 (Tes. App. - Houston list DistJ 1903, no writ): ,
The mere ammencement by the movent that he intends to eau oppening eeunsel as a witness is insuffletent to demand tsequaufloation.
Steelring v. Biery, off S.W.2d 791,794 (Tes. App. - San Antonio 1904, no writ) (eitation omitted):
(T1he annemeement by an adversary that he Intends to call counsel as a witness does not effect an automatie 9disquau testion of the lawyer under the rule.Indeed, the Zardenetta eeurt speaks of the breed diseretten vested in the trial eewt in applytry the rule,1d., a diserotion petullarly eserewed in determining whether en incuested withdrawat under DR S-lLl(B) should not be ordered if it, on the authority of DR $ 101(B)(4),
would work a substantial hardship on the cuent beesuse of the distinettve value of the lawyer or his firm as counsel in the partleular case.
.n.
Banks v. Soone. 691 S.W.2d 783, 784 (Tex. App. - Amartuo 1903, no wrtt) fettatters omitted).
! 4O A mere annomeement by an adversary of his intention to call opposing counsel as a witnem is insuffleient to crehestrate e
counsers disquallfleetion. There must be a menuine need for the attorneys testimony.
White v. Culver. 098 S.W. 2d 703, 785 (Tes. App. - Il Paso 1988, no writ) (ettation omitted, emphasis added).
Ample federet authority estabushes the same point, and as these motions are being filed more and more frequently, the eewto are taking longer and harder looks into the featual basis for the motions.
But, in spite of the reeltation in the Preuminary Statement of the Code that "(tlho Diselpunary Rules ... are mandatory in eherester" and " state the minimum level of conduet below which no lawyer een fat without being subject to caselpunary action,' g eeurt may riot - '; the ?"" t__ -
'^^"v in tamesins of mettons to ~ *
- ' eeunseL Tne eewt1 test is to esamine for itself the ands soup , to be twthered by the Code provistens invoked, together with the gesettee whether disqunuftention in the ease betere it would fether these ends.
U.S. Er ReL melden L Co. v. "-" wk Men **= at Mieri h - 423 F.Sgp. 444 (S.D.N.Y.
1978)(emphasis added).
Parties mipt well attempt to me this ethleal rule, like 1 othere, as a uttgstten teette. The Cowt must therefore be careful to determine whether the testimony of the impuented attorney is genuinely necessary er merely a fearteettee of his adversary.
MacArthw v Ensk of New Yet. 834 F.Sgp.1308,1210 (S.D.W.Y.1901). ,
The eensatistles that the Cowt rfekes into the facts underlying the motion to l disqualify purement to DE 9-103 (B) should lead the Cowt to a beats for determining
, 1) is there a genuine need for the testimony i
- 1) wiu the testimony be meterial, to movent4 defenoeg and 3)' wtB the teethheny be probsdela! to the interest of the attorneyt euent.
See the feuewing Teens esses etted aboves White v. Culver. ett S.W.2d at 475: tlntted l Peelfte bisuruneip Co. v. tardenetta tel S.W 3d at teos and Stoekina v. Biery, att S.W.2d at 794.
i Ample federet authority esists in sgpect of the above etted Tesas lawt and once ageln, its eeneern is for misues of the Code of Pretensional Respons6bility:
DR S 101(3), whleh governs situatlove in which the opposing party seeks to eau its adversaryt attorney as a witness, rnakes clest that the eowt must nrevent a uttaant from eing the witness
, disevallfleation rule to rob a certy of its emosen roeresentative.
l MeeArthw v. Senir of New York, $24 F.Sgp. at 1210 (emphants added).
1 Aside from the once law etted above regarding DR S-10218) disquallfleation. T'e l Code of Profeestonal Responettsuty also provides guidounes for courts and attorneys to i
I
use.1hese guidelines are found in EC S-10 of the Code and are pertinent to DR 5-10:t8).
p Bert Wheeler's. Ine. v. Ruff!no. 644 S.W.2d at $13. Specif!cally, in pertinent part, EC $-
k 10 of the CPR provideos It is not objoetionable for a lawyer who is a potential witness to be an advocate if it is unlikely that he will be aW as a witness because his testimony would be merely eumulative or if his testimony wtR relate only to an meentested lasue. In the esseptional situetten where it wiu be manLIestiv mfair to tie ellent for the lawyer to refuse employment or no withdraw when is w II imatv ne a witnam on a ee_tw tasua. he mer serve as
- te even tneuen w ma y as a w'tnes L lh mak!
such rom re ma therefrom, the materiality of his testiment, and th effectiveens of his rearementatsee In view or hie Involvemet. (emphasis edeed) 1he foregoing autherttles make it eteer that WySW le not and eennot properly be disquallfled under the "wttness rule.'
i CONCt.USION '
An esamination of the feets and pertinent legal authority establish that WFSW's continued representation of Plaintiff in this action wG1 not impuente any ethleal rule.
Defendants' elaim that the representation eentrevenes DR S-108 la devold of merit beesume no atterney-ouet relattenship esists between Defendants and WFSW. Moevover, even if such a relatiesship esisted WFSW sttu should not be disquallfted beesuse its representation of Plaintiff in thle action wiu not adversely affeet the esereise of its 1.%t professional jugment on behalf of Defendants la the Usensing proceedings j and beesme Defedents have waived and $re estopped to asset any eenfilet.
Finally, the asserties that a WF5W lawyer wiu be a witness at trial ta also without merit basense no WF5W lawyer has ladopendant knowlege of the feets, no suen lawyers 1
testimeny is gemenely nosesmary, ne such lawyer's testimony is material, and no such l 1swyert testimeny would be adverse er pre)msetal to Plaintiff.
In sun, Defendants' motion is without merit and should be denied. It ls nothing but en Impermissible trial taetle of the very type that the Code of Profeestonal Responrth(11ty, the commentators and the eene eaution assirtet.
l WifEREFORE, PREMIBER CONSIDERED, Plaintiff prays as it does la its Reply to Defendants' Motion to Disqualify.
Respeettuuy submitted, WORSHAM, FO RSYTH E.
SAMPE1J & WO0t.DRIDGE M. D. Sampets State Bar No. 17577000 Rc6ert A. Wooldridge State Bat No. 21944000
. as .
[
Richard L. Adams State Bar No. 00474950 2001 Bryan Tower, Suite 3200 Dallas, Texas 75201 (214) 979-2000 O
JACKSON, W ALXER, WINSTEAD, CAN1WELL & MILLER H. Dudley Chambers State Bar No. 07042000
.' h B. K yte State Bar Ns. 11703000 Geet hierflest Flana 941 Main Street Dauas. Teams 7930%
(214) 963 4017 By For emee!
AT'f0RNEYS FOR FLADITIFF CIATIFIC ATI 0F SERVICI It la hereby eartifled that a true and earreet espy of the foregelsq was hand delivered to the Danas Offteen et Fulartet & Jewerski and Hughes & Luoo, and was forwarded to an other atterneys of record by depeetting same in tm United States mail, postage propold, en this the day of Jemmary,1987.
p l
l 27 l
gy EXHIBIT 14 ROSERT A. TooLDRIDGE THE STATE OF TEXA5 :
I COUNTY OF DALLAS :
i BEFORE ME the undersigned authority, on tNs day personauy appeared ROSEAT A. TOOLDRIDGE well leewn to me to be a credible person of lawful ate, who, af ter having been duty sworn by me, upon Na oath cid depose and say as fouews:
Included with the " Reply to Motion to Disqualify'in this Cause No. 86 4409 is a volume ed emNhtte laheted "Teeldridge Exhibits" wNch conta&ns nine (M separate eWiihits, some with subparts, resp %tively marleed as Teeldridge Eahibit t through Tooldricgs EnNbst 9. Each of said separate exNbits are incorporated as parts of tNs Affidavit and are specificauy referenced in this Affidavit.
My name is Robert A. Teeldridge. t have been ucensed as an attorney at law in good seending by the Sapreme Court et the State of Tomas since November,1961.
My State Ser of Tomas Membership Nwnbar is 21984000. I have been engaged in the prtvese prece6es ed law in Deuse, Temes anse November,1961. I am at the present sises a persner la the law flem et versham, Forsythe, Sempels &
Tooldridge (TFS&W) and have been with such firm unce 1970. Prior to tnat tame t i
t.as a partner in the law firm of turford, Ryturn & Ford,new Burford & Ryburn,in Degas, Teme. I have representedpm er more of the Teams Uttuties Company
! subendiarias for the past twenty.five years. During sucts time period. ! 9 ave represented Teens Utluttes Company, Tesas Utilities Electric Company (TU I
Electric), Dauas Power & Lipit Compey, Teams Power 4 Light Company Temas Electric Service Company, Temas Uttuties Services Inc., Temas Utilities Ceneraung Cornpeny, Tems Utuities Mining Company, and Tenas Utgities Fuel Company. In more recent years, I have devoted virtuauy all of my time and attenuon to legal representat;on of suca clients and I warW daily with and for the officert, managers, and employees of such companies in connectlen with the providing ed legal advice 1
to such cuents. Owing the last seversi years, a substantial portion of my time has been devoeed te representation of TU tlectric on a variety of matters relaung to Coman:rie Peak, only a portion of *Ncn related to the licenung proceedingt before tne Nuclear Regulatory Commiseson (NRC).
I uve never represented or given legal advice to Ten.La Elettric Ca.
(
operative of Texas , Inc. (Ten.La). Brazos Electric Power Cooperanve. Inc.
(Brazos). or Temas Municapel Power Agency (TMPA). Ihave never been privy to any l
..----,.----n_--------,. . n -. , ,_ .-_----,,.en -
confidential commescations, written er oral, of Tee-La, traaes, or TMPA and ne confidences of any of those entities have been imparted te me in any capacity whatsoever.
On February 20, 1984 I filed with the NRC in Docket Numbers 30.443 and 30 444 entitled "In the Matter of Tomas Utluties Generating Company, et at (Comandte Peak Steam Electric Stetten. Units ! and 2" a Notice of Appearance. In such Netace, which is the only Notice of Appearance filed by me in accordance with the % clear Regidasary Comm6aelen's Rides et Practice in such Decleets, I appeared for femas Utilities Co erating Company. (See Toeidridge tahibit 1.) !
alas tuod a Notice of Appearance in Dechoes 30-443A and 30 aa4A before the Atomic Safety and tkW Soard on the 16th day of April,1980. *.n such Notice of Appearance, I appeared for Texas Utuities Generating Company. Dadas Power de Light Campany, Tomas PJoctric Service Company, and Tomas Power & Light Company. (See Teendridge Bahibit 2.) I have never filed a Notice of Appearance for Tes.La, traaes, or TMP% in any proceednen. Since the initiation of my involvement in an64 ucensing proceedngs, I have at au times received my instructens from and prov6ded legal adv6es to Teens Utuities Electr6c Company er one et its evletons. As a reunit et the regdroment la the Jeant ownership Agreemw.t for TU Electric to hande the ucensing of Comanche Peak, the law Crms representing TU tiestric in the ucensing proceedags have indicated on filings hature the NELC and its Atesgic Safety and Licensing toerd that they were appearing for au *appucents" since the attorneys represented TU Eectric =hica.
by contract, was etugated to appear for au of them neither Ten.La. Brazos. nor TMPA, however, were ever my cuent and there has never existed an atterney/ client relationshap between me or WPS&W and any of those entitles. No confidential commmications of any natura were escjosed te me in connection with such Ucenanng activities or any other matter by Ten.La. Srssos, or TMPA. At no time duri.9g the course of my representation of TU Electric in such licensing proceedngs 44 Ten.La, traaes, or TMPA er any of their agents, principais, servants, employees, or atterneys ever attempt to advise or instruct me in connection with my representanen of TU Electr6c and its avis 6 ens in such Ucensang proceedings. While I have had deaungs in my capacity as an attorney for TU Cectric witn attorneys representing Ten.La. Srssos, and TMPA. at no time prior to the instatution of this suit did any of said entities voice or raise any type of oclectione complaAnt, or suggestion that either i or TF5&T were disquallfled or in 4
any manner pronibited or restrained from representing TU Cectric because of my e
appearense as an atterney in me NRC ucensing proceedings. Prior t3 the 1
.. Institution of this suit, it never occurred to me th:t T;m.t.a. Brazos, or TMPA I
could er would assert a claim that I or WPSatt was its attorney in the NRC i licenang iw+:::2ngs or in any other mattw or capacity. The nature of the adversarial relationship that had existed prior to the institution of this suat between my calent TU Electric, and Ten-l.a. Srsaae, and TMPA, was such that, in my opinien, no attorney / client relationship could poenibly have existed between me and WF5&W en the one hand and any of the Defendente, Tom.t.a. Brases, or TMPA, on the other hand. As will be shown further below, the assertion by said '
Dededenas of a bened that I was their asterney le not agpersed by the facts.
Since I becerne involved in the NRC ucensing proceedings,it was and remaina my bouet and inderstanding that my ellent TU EJoctric, is solely responsible for obtaining ucenses from the Nucteer Regulatory Commission la connectlan with the operation of the ComasEhe Peels Steam EJactric Stathn. Such being my under.
standing, even if regaested, I would not have accepted instructlans in connection with Menneng mesters from any entity other then my client. TU Electric. Whlle t
- reallas that it is necesesty teder NRC Rulee et Practice that an owners of a plant have an appearance betere the NRC for licensing purposes,it hee always been and is new my understanding of both the facts and, the law that such appearance is accompuaned thraup the appearance et my cuent. TU Electric, as provided for in the Jeant Ownership Agreement. (See Wooldridge Eehibit 3.) I have at all umes i
perceived my reis as one of the atterneys providing legal representauon for the .
party who, seder the Jeant ownersn6p Agreement. has the responsabdity for the liconens of the plant,i.e. TU Electric.
My reis in connection with the NRC licensing proceedings has been as one of several attorneys, and seversa law firms, represent 2ng TU Electric in sten pi+:: ings. Since my involvement in such matters commencing in early 1984 and although toere have been numerous hearings and thousands of pages of tesumony 6n 1
l such proceedings, I have personally never crees-emanuned or presented a witness in i such preenedings and have never toinen an active part in the presentation of testimeny or evidence, arguments or motions, or oral arguments on antninistrative appee&a. I personally have never sought ur received information for use in such licensing proceedings from fez.t,4, Brazos, or TMPA. To my knowledge, no l officer, et.sloyee, agent, or representauve of Ten.t.a. Brazos. or TMP A has ever been calloc as a witness in such (Acensing proceedings or has ever provided tesumony in sucn proceedings. A11 bdlings for services and expenses for oorte conc l
l 4
I 1
by me in connection wiQ me NRC licensing g+::-19 have been billed te my cuent TU Wectric, and have been paid by my ct!ent. TU Electric. Since I became involved in the NRC ucensing proceedings, billings to my client, TU Electric, by my firm. WF54W, have represented only about ten percent (10%) of the total billings for legal services rendered to TU Electric by an attorneys employed by TU Eoctric in connection with obtaining NRC licenses for Comanche peak. The vast malerity of services to TU Eactric have been performed by the !!rms of Bishop, l.1 herman, Cook, Purceu, & Reyndes and Repes & Grey. For most ei the time from January,1984 to date, I have been the only attorney with TFS&W who has had any invedvement in the NRC operesing licones er construction permit' pro.
coedings.
!
- nave had extensive denungs for a number of years in my capacity as an attemey for TU Electric,with attemeys representing Ten.l.a. The F-- m-ings involving Tea-l.a betere the puhuc Utuity Commission of Temas are set forth in dotad in the Affidavit et 3. Den Gehennen en file herein. Without repeating the contente et such affidevit, I participated in rete proceedings in August of 1983 in Dechet 3296 and in the appeal therest bedere the 201st Judicial District Court of Trevis Comty Tessa. I alas represensed TU Electric in connectlen with ar.
. rangements relaung to electricity generated at the Denison Dam and was involved.
I as TU Electric's attemeye with Ten.La's attemeys la Intensive negotiations relating I
to these mesters. I represented TU Electric in Dechet $440 before the Puhuc
- D Utuity cammission of Teens and in the appeata thereef. I was also involved in nogettattene betweet my client. TU Electric, and Ten-l.a. represented by their law firm, Heron 8urcnette, Ruckert & Rothwed breette firm) in connection with
[ nogettatione concoming the continued fisidng of Ten.l.a's ownership interest in the Comancne Peak Steam Electric $tatten. I was involved in early !?te in nego.
tlations with Tes.l.a concoming a settlement of the disputas between the parties concernma Comanche Peak and other matters. The nature of sucn adversarial l matters is reflected in corroependence and documents, referenced in 3. Dan tahannen's Affidevtt and others, constituting Wooldridge Eadtibits 4 A through 4P fUad herewith. in an of sue pressednes and nogettations. Ten La was at au times rowesented by its counsel, But threette or one of the members of the Burchette firm. At no time did either Ten.t.a or attorneys from the IWrchette firm voice or
, raise any type of celection, complaant, or suggestion that eitner I or '#FWW eere disquallfled or in any manner pronabated or restrained from representing TV Electric in connection with such matters, all of which were adversarial between my
cliest, TU Electric, and Tee.La. Many ei these matters and negotiations involved the Comanche Peak Steam Electric Station and T;x.La's ownership therein.
I have similarly had deannes in my capacity as an attorney for TU Electric
[\
with attorneys represent 4ng Brazas. Brases aise intervened in Docket 329e.
previously mentioned, and in Decket 3664, aise previously mentioned. Althougn most of the riegettations regarding areas.e' continued involvement in Comanche i
Peak Involved my partner, 3. Den Behannen, I alas participated to some extent in negotiations with Jesoph Robert Alley, the atterney who represented Brases in these discussions and who new represents Brsase as one of the Defendants in tais cause. The neeure ei such adversarial matters is reflected in correspondence and documents referenced in 3. Den Sehennan's Affidsvit and these constituting i
Tooldridge Exhibits JA throupt 33 filed herewith. At ne time did eithw Brazon or its asterneys ' voice er ralpe any type ed objection, compla&nt, or suggestion that either I or WF5dtv were disquenfled or in any manner prohibited from representing TU Electric in connection with any et the aheve mettened adversarial dealings between TU Electric and Braams and as au times. Braans was represented by other law firms and TU Electric was represented by me er members of WF5dtW.
PHer to the inesisuelen ei this suit, I had a rnenhar of cansacts wem Jim Salley, an atterney with TMPA. At all times, any contacts from TMPA were i
initiated by its asterney and I dealt solely with its atterney. The WF5&W !aw firm.
has bout anland by 3m Ba&iey to propero an opinien letter "as couneed for Temas i
Utdities Electric Companya and In the same writang actmewledged that Jim Saalev was the asunset for TMPA. hch carrespondence is set form as entubits to the Affidavits si 3. Den Senannan and M. O. Sampels filed herewith. Eshibits reflecting the nature of the adversarial rotationship between my cilent. TV Electric, and TMPA, in admitten to these conta&ned as edi6 bits to other affidavits l filed herewith, canetitute Wooldridge Esh444ts 4A throupt 64. At no time prior to i
the illing at this suas did either TMPA or its attorney, Jim Badey, voice or raae t
i any type of objection. complaint, or sugeotten that either I or WF5&W were I
disgsendled er in any mermer preh6bited from representing TU Electric in con.
nection wie any dealings relating to TMPA and at all times, TMPA was the .; ; by Jim Sailey and TU Electric was represented by me and TF54W. i Wooldridte Eshibit 11s a discovwy regaested laaeled "8raaos doctric Power i
i Cooperauve, Inc.'s First Request for Production of Documents and Thingt,* filed bv 4 Brazot Cectric Po*w Cooperative, Inc., in which Brazos now teoks througn l discavery to invade the attamey/cilent relauonense between *F5&W and its client. .
[
TU Eleesric. Cooldridge Eshibi3 4A and as are piendings signed by au (ttorneys for Defendants in Cause No. 83.29849, 213th Judicial District Court. Harris County, Teene, styled " Charles A. Atchisen, et al vs. Brown & Root. Inc., et al"
) and Civil Action No. H.43 3348, United States District Court. Southern District of femas. Houston Division, styled " Charles A. Atchison, et al vs. Brown & Root, et al.' respectively. At no time in connection with my appearances for one of the parties in that case did any of the Dedendants complain of or suggest that I was !
their attemey for Cemenche peak matters er that there emiesed the potential for a confilct of interest. Wooldridge Emhibit 9 is a paper presented by William H.
Swaftetto, perster of Heron, Eurchette, Rueinert & Rethwed, who is attemey for
! Tem-La herein, to the Committee en Joint ownership Meetin6, Ramada Renais.
[
sance Hotel. Washington, D.C., May 20 21, 1984.
2 At no time prier to the lastitusten of this suit did TMPA, Tes.La. er traans or any ed is attemeys ever state or Inter to me thes they cenaidered me or my i firm, WFS&W, to be its attemeys in any cepecity or they to be our calents in any regard.
{ l am not a maserial witness in Cause No. 4 6 4409. I have no 1.-i;it lesseledge ed the faces widerlying the lesues lavelved in Cause No. 864409. A!! of
/ my leewledge and information concerning said issues was acquired in my capacity as an attermey for TU Electric, its prodocessors, and affiliates. I have not made any buelness doeleisse ed or for TU, Electric or its prodocessers but I have acted f selety as their aetamey and, as such. have learned certain information from my said clients in order that I may give them legal advice. A11 of such information and my legni advice to my send clients is privileged as confidential attorney /etient i
comemmications.
l OeN ACBF.RT A. iFQQ4.ORIDGr. T SUSSCRittD AND SWORN TO BEFORE ME on this, the % day of 3anuary,198y, to certify which witness my official hand and saal.
l l
. ,,c, s.,e orre -
s My Commission E. spires l
'l-\ %
EXHIBIT 15 l
l V
NO. 86-6809 TEXAS UTILITIES ELECTRIC 5 IN THE DISTRICT COURT OF COMPANY, 3 Flaintiff 3 VS. 5
$ DALLAS COUNTY, TEKAS TEX-LA ELECTRIC COOPERATIVE 5 0F TEXA3, INC., TREA3 $
MUNICIPAL POWER AGENCY and S ERA 808 ELECTRIC F0WER $
COOFERATIVE, INC., 9 I
Defendente $ 14TE JUDICIAL DISTRICT AFFIBAVIT OF N!C30LAS 3. RRYMOLOS I, Micholaa S. Reynolds, having been first duly sworn, hereby depose an.d state, as follows:
- 1. My name la Nicholas S. Reynolds. I have been licensed as an l attorney at law in good standing by the District of Columbia Court of Appeale since Septenhor 1971. I have been engaged in the private practice of law in washington, D.C. eince June 1973. I as at the present time (and have been since February 1977) a partner in the law fits of Bishop. Liberman, Ceek, Purcell & Bernolde (formerly 'Debevotee & Liberman*).
- 2. I have represented Tesas Utilitise Electric Company and its predecessors and divisions before the United states Nuclear i Regulatory comatoston (NRC), formerly the Atomic Energy
[ Commiselon, in connection with the licensing of the Comanche I
i
O'f Feak Steam Electric Station since 1974. Those predecessors and divisions were Dallas Power & Light (DF&L), Texas Power &
Light (TF4L), Texas Electric Service Company (TESCO) and Texas Utilities Generating Company (tUGCO). Those companies were the original applicants for the Comanche Peak Construction Ferait and operating License, with the last being lead Applicant.
- 3. On April 24, 1978, the application for an Operating License for the comanche Peak facility was transmitted to the NRC by Texas Utilities Generating Company. That application was docketed on April 25, 1978. A notice of availability of the docketed appiteetion and opportunity for hearing was published in the Federal Register on February 5, 1979, 44 Fed. Reg. 6995. The Applicants for the Operating License were identified in the Federal Register notice as the above Texas Utilities entities. The proceeding was captioned as Temas Utilities Generating Company, el al. (Comanche Peak Steam Electric station, Units 1 and 21, Docket Nos. 50-445, 50-444. -
- 4. In the above proceeding I was retained by Tesaa Utilities Electric Company to advise and represent it in the prosecution of the Comanche Peak operating License j application before the NRC on behalf of the lead Applicant, Tomas utilities Generating Company. Accordingly, on March 15, 1979, pursuant to the rules and regulations of the NBC. :
filed a Notice of Appearance in the above proceeding on l
l I
I i
1 i
. . _ . _ _ _ _ . . , - - _ . . _ , _ _ mm_,._____ m. , _ _ , , , __ _ _ . , . , _ _ _ .
behalf of Texas Utilities Generating Company, et al., the et al. referring to the above Applicants, DF&L, TF4L and TESCO and not the minority owners who were later added to the operating License Application to reflect their respective ownership interests in Comanche Peak.
- 5. In November,1981, the Comanche Peak Operating License Application was amended to reflect the minority ownership interests of Tex-La Electric Cooperative of Texas, Inc. (Tex-La), Brasos Electric Powcr Cooperative, Inc. (Brasos), and Texas Municipal F9wer Agency (TMPA).
- 6. At all times during my involvement in the shove licensing proceedings I have received instructions exclusively from and provided legal advice exclusively to Temas Utilities Generating Company. I have neither represented nor given legal advice to Brasos TMPA or Tes-La either in the above proceeding or in any other proceeding before a court of law or government agency. I have never consulted with or taken direction from any representative of those entities been provided er sought any information confidential to those
! entitteep or filed a Notice of Appearance stating or otherwise represented that I served as counsel to those entities.
i
- 7. Throughout the proceedings involving plant licensing and antitrust review, my representation has extended solely to
- Tesas Utilities Electric Company and its predecessors and divisions. I have never considered an attorney / client I
o 4 relationship to exist between myself and Brasos, Tex-La or TMPA. Indeed, during the course of the operating license antitrust proceedings before the NRC, my law fica represented Texas Utilities and its affiliates during a period when Tex-La and its members were adverse parties. Though neither TMPA nor Brasos was an active party in that proceeding, their officers, employees, former employees, and employees of their members were deposed. Throughout that proceeding, Tex-La, Brasos, and TMPA (or their employees or acabers) were each represented by separate counsel, and no objection was advanced on the purported ground that my firm was counsel for all the owners in the operating license proceeding (i.e.,
instead of counsel for TU affiliates only in both proceedings). At no time prior to the institution of this suit did Brasos, Tex-La or TnFA voice or raise to rs any type of objection, complaint, or suggestion that representation of Texas Utilities Electric Company and its predecessors and l
divisions in the NRC licensing proceedings would act to disqualify er prohibit my representation of Tszas Utilities' coepasies in other contests. Nor have Tem-La, Brasos, or TMPA acted consistently with the presence of an attorney-i client relationship with my law firm. For example, our l
l electric utility clients authorise their auditors to contact us with regard to the status of litigation, and to confirm that we have agreed to consult with our clients regarding unasserted claims and other contingencies subject to FAss 5.
i l
j
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we have never had such inquiries from auditors for Tex-La, seamos, or TMPA with regard to cosacche Peak.
- 8. Fursuant to NRC regulations and case law governing the licensing of nuclear power reactors, Texas Utilities Generating Company was designated in the operating License Application as the lead applicant for the owners of the Comanche Peak project for design, construction, and operation, as well as representation in licensing matters.
Under NRC requirements it is necessary that all owners be named as applicants (public Service Company of Indiana (Marble sill Geneesting station, Units 1 and 21. ALAS-459, 7 NRC 179, 200-201 (1978)) even though, as in this case, one owner has sole authority and responsibility for licensing satters. Designation of a single entity as exclusive agent and lead applicant on behalf of several co-owners in the prosecution of an application for an NRC license occurs frequently (ege, e.g., Duke Power Co., et al. (Catawba Nuclear Station, Units 1 and 2), Lap-84-24, 19 NRC 1418, 1423 (1984)). In that situation the NRC looks entirely to the lead applicant to present and support the application and to denometrate satisfaction of all requirements applicable to applicants for NRC licenses (see safety Evaluation Report Related to the Operation of Comanche Peak Ste'as Electric Station, Units 1 and 2, NUREG-0797 (July 1981), at Sections 1.4 and 13.1.1.2); see also Detroit Edison Company, et al..
(Enrico Fermi Atomic Power Plant, Unit 2), LBF-79-1, 9 NRC 73, 85 (19791).
v 9. It is my understanding that the Joint ownership Agreement between the owners of Comanche Peak provides that Texas Utilities Generating Company is responsible for assuring that the activities associated with the design, construction, operation and licensing of Comanche Peak are conducted in accordance with applicable statutory and administrative requirements over which the NRC maintains authority. Such being the case, and in view of the above-described NRC precedent, even were I requested, I would not have accepted instructions connected with licensing matters from any entity other than my client, Texas Utilities Electric Company, through Texas Utilities Generating Company, and would not have accepted legal representation of Tex-La, seasos or TMFA.
- 10. During the operating license proceeding, no officer, employee, agent, or representative of Tex-La, seamos, or TMFA has ever been called as a witness in such licensing proceedings or has ever provided testimony in such proceedings.
l l
- 11. During my involvement in the licensing proceedings before the NRC, all billings for my representation therein have been to my client, Texas Utilities Electric Company, and have been paid by my client, Texas Utilities Elect c Company.
)/
Nicholas 3.flynolds ss: District of Columbia subscribed and sworn to before se this 2dhofJanuary, 1987.
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EXHIBIT 16 225 FRANEL N STREtt COSTON, MASSAcHUSETT5 02110 s6m 42F6sco , ,,,, ,e ,
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peoviocwcc.s. ossos teLes eu ece oe on esecs se., es. ..s..u :(== ates-
.o.i s e....oo .csecceisse iein .u sar, . .m .u re.. ::a .re en ett:se ce ::::: .... e s, er6cco..cma.o.. is.-eeio ..,s...,...s ..,,.o....e December 9, 1986 Joseph Robert Riley, Esq.
500 RepublicBank Tawer 501 Franklin Avenue Waco, Texas 76701 Re: Texas Utilities Electric Co., et al.
(Comanche Peak Steam Electric Station, Units 1 & 2)
Dockets No. 50-445-OL and 50-446-OL Thank you for your letter of November 19. As I understand it, it raises two separate concerne.
The first of these is your reaction to Tony Roisman's letters of October 30 and 31, in response to certain i i
discovery received from Brazos. You must first appreciate that we are at a significant handicap in evaluating the concerns you have expressed. Contrary to our wishes and advice, your counsel, Messrs. Spiegel & McDiarmid, chose to disclose these documents -- and presumably other discoverable information - to counsel for CASE on an ex parte, secret basis. Other than those documents which Mr.
Roisman then inusediately filed in the public record --
thereby apparently destroying your counsel's argument that ,
these secret discovery procedures were necessary to keep the l information from the project manager TUIC, we have no knowledge of whatever documents or other information Brazos may have disclosed to CASE.
It may therefore be more understandable that until you 2 raised it, we had never assumed that Mr. Roisman's comments about sanctions for supposed non-disclosures were directed at Brazos. We were, moreover, confident that the charges (at least that there aswere we then no previous understood them) were discovery unfounded requests calling andfor the sort of information which we are now aware Brazos has produced. Thus, the claim of late disciosure is wholly baseless.
1
)
l Rossa & Gnav J Joseph Robert Riley, Esq. Oecember 9, 1986 It was a close question, but we had decided not to respond to the implied charges in Mr. Roisman's letter.
Even if we now assume the charges were directed at Brazos, we perceive no basis for changing that decision. We know of no occasion on which the documents produced by Brazos and filed by Roisman were previously requested, thus the contention that there may be some question about the timeliness of their disclosure remains one which requires no answer. Insofar as we still may not have seen all the Brazos' disclosure, however, we of course remain hampered in the analysis of that assumed issue.
Your letter also poses a more general question with regard to this subject: the basis for our position that the Minority Owners are not solicited for their input on discovery responses except in certain instances. The basis for this procedure is quite simple, and as far as we can determine has been in effect for virtually the entire life of the licensing litigation, far antedating our entry into that case. I am somewhat surprised you believe it appropriate to so belatedly raise it.
The fact is that the only contention being litigated is a quality of construction issue. To the best of our knowledge, all information regarding construction and design of the CPSES facility is possessed by the project manager, TUEC. This is what the Joint owners Agreement says, and insofar as I understand the filings made by Brazos, Tex-La and TUEC is exactly the position all the Minority owners, including your client, have taken. The only exception has been the recently disclosed extent of analyses prepared by consultants to one or more of the Minority owners on the progress of the project which, so far as I understand it, pre.sent the first occasion on which the Minority owners may have had any " independent" information regarding the project. When questions addressed to those repositories of information, or to your own personal copies of the Joint owners Committee meetings, etc., were sought through discovery, it was clearly appropriate to request of you that info rmation. I am hardpressed to think of any other occasion in which such solicitation would be appropriate given the general nature of the discovery being undertaken in this construction case.
- If we are wrong in these assumptions and if Brazos, or any of the other Minority owners, have significant 1
i Ropes &Gmay l Joseph Robert Riley, Esq. Decer.ber 9, 1986 information relevant to the quality of construction of this project which information is not known or available to the project manager, we should of course be advised forthwith.
In that case it might be appropriate to consider revising our procedures, and most certainly to review previous discovery responsee to insure there has been full compliance with the Applicants' obligations to the Commission. Until such time as we are specifically advised of such previously assumed to be non-existent set of facts, however, we balleve it appropriate to continue on our present course.
The second concern raised in your letter revisits our November 4 filing regarding the motion to compel production of certain docgments possessed by Tex-La, and not by the project manager TUEC. You will I hope see that this situation is exactly contrary to the normally occurring one which I rehearsed above. It was clear that Tex-La had documents, which were personal to it.-and which were not possessed by the project manager nor by any of the other Minority owners so far as we were aware. Indeed, Tex-La's claim of confidentiality depends primarily upon its ability to establish that the documents have not been shared with anyone else. Tex-La's legal arguments regarding its claim of nondiscoverability of these documents were just that.
They were not facts which any of the other applicants could shed any additional light upon, and the resolution of those legal arguments could not, by definition, be harmful or helpful to the other owners (at least in the course of this licensing proceeding) because the possessory rights in the documents were personal to Tex-La. It was for that reason that we concluded, and continue to believe, that the other applicants were necessarily " neutral" on these issues.
On this topic generally, I have already responded to the most recent missive from your counsel, Messrs. Spiegel &
McDiarmid. A copy of that response is enclosed for your edification.
Very truly yours,
.111.m5,q),qq.1,g l
WSE/ime Enclosure 1
_- - . . ~ . - . - - - -. . _ - . - - - - - - - ._ -
EXHIBIT 17 ropes & GRAY 22 5 FR AN KLIN ST A EET
] 1 BOSTON, MASSACHUS ETTS O2110
( = esovcc=cc 617 423 610 0 i
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aca .as s:o i=rce rio 6.eiri .as-soos 'titcoc' a:a eas- ea, December 19, 1986 Foster De Reitzes, Esquire Heron, Burchette, Ruckert &
Rothwell Suite 700 1025 Thomas Jefferson Street, N.W.
Washington, DC 20007
Dear Foster:
Thank you for yours of December 16, 1986, in which you request that, if Ropes & Gray has occasion to express "to the NRC the position of Tex-La (or of ' Applicants') with respect to any aspect" of a certain report, we "first communicate with [youl to insure that the position (wel express in fact represents the position of Tex-La."
As you are aware, this firm has entered into no attorney / client relationship with Tex-La: it does not purport to advise Tex-La on any matter; and it has not in the past purported, and will not in the future purport, to represent Tex-La's individual views to anyone. To the contrary, our client is Texas Utilities. Texas Utilities, in turn, is the Managing Agent for all of the owners of Comanche Peak Steam Electric Station and it has retained this firm to advise and represent it in the prosecution of the CPSES Operating License application to the NRC.
If and to the extent that the separate views of Tex-La were appropriate for expression to the NRC, and we were asked to facilitate such communication, we would of course communicate with you just as we have communicated with you on those occasions to date when the separate position of Tex-La was appropriate (e.g., regarding the interposition of objections to discovery cased upon privileges personal to Tex-La). We do not, however, express any view as to the t
i l
1 Foster De Reit:es, Esquire Cecem=er ;9, '956 l
[ -,) circumstances, if any, under which such a separate
\s_/ expression of the views of Tex-La would be appropriate.
In light of the foregoing, we cannot undertake to consult with, or to take direction from, Tex-La with respect to expression of the views of "the Applicants" to the NRC on the referenced (or any other) subject. To the contrary, our view has been and remains that our obligation is to take direction from Texas Ut111 les with respect to the prosecution of the CL application, including the expression of the views of "the Applicants" as a collective on any subject relevant to the application. Insofar as Tex-La, as a minority owner of CPSES, seeks influence upon the formation of any of the views of "the Applicants" as a collective, we respectfully suggest that it must communicate with its co-owners pursuant to the terms of the Joint Ownership Agreement.
Trusting that you and yours will have a pleasant holiday season, I remain, Sincerely yours, Thomas G. Dignan, Jr.
TGDJr/kdr
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+ , is m. riu x w,.een .. *as.w e e::m, TELECOPIEE 11tANSMITTAL LETTER DATE OF TRANSMITTAL: M PLEASE DELIVER THE ACCOMPANYING TELECOP!ED MATERIAL TO:
NAME:
- M SENDER'S NAME: Eb y "2 C .
TOTAL NUMBER OF PAGES INCLUDLNO THIS TRANSMITTAL LETTER-
- PLEASE CALL IMMEDIATELY WHEN ALL THE DOCUMENTS ARE RECE!VED -
417 423 4100 Ext. 2354 or Em. 2325 THIS MATERIAL TRANSMITTED ON THE POLLOWINO MACHINE:
( ) DEX 3700 (AUTOMATIC) 417 423 7841 GROUP 1 - 4 4 MINUTES OROUP 2 - 3 MINUTES OROUP 3 - SUB MINUTES
( ) DEX 2!00 (AUTOMATIC) 617-423 4100 Ext. 2408 OROUP l - 6 MINUTES DEX 2l00 to 2t00,33 SUB MINUTES,30,70. OROUP 2 - 3 MINUTES
( ) DEX 3600 (AUTOMATIC) 617 423 490$
1 ) DEX 3600 (AUTOMATIC) 617 423 2377 OROUP 1 - 6 MINUTES, OROUP 2 - 3 MINUTES, OROUP 3 - SUB MINUTES WASHINGTON D.C. OFFICE TELECOPY DEX M00 202 429 1629
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EXHIBIT 18 Ropes & GRAY
' 225 F AANKLIN STR EET fG BOSTON, MASSACHUSETTS O2110
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January 12, 1987 Ben Finkelstein, Esq.
Robert A. Jablon, Esq.
Spiegel & McDiarmid 1350 New York Avenue, N.W.
Washington, D.C. 2005-4798 Re: Texas Utilities Electric Company, et al.
Docket No. 50-445-OL and 50-446-OL Gentlemen:
I have now had an opportunity to contemplate your letter of December 19, 1986, regarding our efforts as Licensing Counsel in the above-captioned proceeding.
While you will doubtless appreciate that we continue to disagree fairly vigorously with a number of the conclusions and assertions reflected in your letter, it appears for the most part that you now understand our position.
Two things do seem to warrant comment, however, --
if only to ensure again that no miscommunications occur. At several places in your letter you refer to the concept that Brazos Electric Company is a client of this office, or that we are its attorneys. As we have repeatedly explained to you, neither situation is true. We have never consented, and do not now consent, to be attorneys for Brazos Electric Company, and we have never accepted, and do not now accept, it as one of our clients.
With regard to your separate request that we consult with you or your client prior to any actions we may take in response to the recently released report on Region IV performance, I dirept you to the response of my partner, Tom Dignan, to an essenplally identical request received from f Tex-La's counsel. A copy of that response is enclosed for
- C 1s
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i Ropes & GaAY l Ben Finkelstein, Esq. January 12, 1987 l Robert A. Jablon, Esq.
your edification should you not have received it through your other channels. We of course adhere to the same 4
position with regard to Brazos' request.
Very truly yours,
.1111_ sg ..., n.
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4 EXHIBIT 19
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Roots & GnAv 225 ro AN4L N STREET m 80STON, MA55ACHUSC?TS 02iiO
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February 20, 1987 Robert A. Jablon, Esquire Spiegel & McDiarmid 1350 New York Avenue, N.W.
Washington, DC 20005-4798
Dear Mr. Jablon:
We have new received the second copy of your letter, and its enclosu'res, which you or:gina:Ly transmitted on February 11, 1987. :.e: .e apologize again for the error --
which appears clearly to have occurred here 6: Repee & Gray
-- with regard to 1:s original receipt. We have still been unable to turn up ycur original, although oue mailroom recordo confirm receipt.
Upon review of your istter and its proposed enclosures, however, we find ourselves uncertain whether your requests can be considered proper. Your letter did as: include a signed copy of the submission you propose 'ce submitted "immediately" to the :.1:ensing Board. I trust that this does not mean that you intended that i sign the letter, s;nce, among other things, it is captioned as having been eigned by "A torney for Brazos Electric Power Cooperative,
- nc." which, in addition to being the cap
- Lo.a. you have apcended to your own signatures in the covering istter to ms, is something that, as your letter goes to some pains to point out, we are net.
Yurthermore, we have substantial doubt wnether the contents of your proposed Letter could ever croperly be considered appropriate subjects of a Board notification, and we certain;y do not por:eive that it raises any issue that could properly warrant any response from the Board. We are I's :t * *
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/'~' Robert A. Jablon, Esquire February 20, 1987 V) thus at a loss to see how it can be placed before the Board for any meaningful consideration.
I have as well several other serious mistivings regarding your proposed submission. Among ot.her things, the document advances legal opinions that, at least at first blush, I believe to be incorrect and inconsis. tent with long-standing to= mission practice (if not also with other decisions, something I'd have to research). There are, moreover, numerous other problems, including the following:
- 1. Completeness. Prescinding from our inability to comprehend, much less to explain to the Board, why this material had been placed before it, we are constrained to observe that even the picture you propose to portray is noteworthy in its degree of incompleteness. To our eyes, it does not even begin to adequately communicatti the entirety of the facts of the matters, viz:
This firm and all other counsel who have appeared in this matter in support of the applications have been retained by TU Electric to counsel and represent it in the prosecution of the operating License and Conutruction Permi
- Extension applications now pending before the Commission.
l The current operating License application wan filed by TU Electric, for itself and the minority owners of CP5ES, pursuant to a joint ownership agreement that expressly confers upon TU Electric the exclusive prerogative to manage, direct and control the construction of CPSES and both the right and the duty to prosecute all license applications before the NRC. When issued, the Cperating License for which the application is pending. though nominally in the names of TU Electric and thu minority owners, will confer upon no owner other than TU Electric any authority to operate the facility. The Construction Permit i Extenaien application was filed by TU Electr:.c in the same capacity and relates to a construction Fermit nominally in the names of TU Electric and all of the mino31ty owners, but pursuant to which none of the owners other than TU Electric has been conferred any authority to take any action regarding CPSES.
So far as we are aware, moreover, no one in this firm or any lawyer free any of the other firms who have appeared in this proceeding in support of the applicatzens have cenaulted with or were ever consulted by, any of the minority owners. Since taking this matter on, no one in these firms, so f ar as we are aware, has agrood to undertake si
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s Rober A. Jabien, Esquare ebruary 20, 196~
any attorney /elien relationship w:th any Of the minority owners, nor have they given any legal advice 20 any of the minority owners -- and, to -he centrary, have stated -hat, if a minority owner wishes to press an ob;ection te discovery that is " personal" to the manority cwner. then the minor::y owner may file its own pleading signed by its cwn counsel specially appearing for the purpose. The assertion that, by virtue of their appearance in this proceeding, these firms and at =rneys entered into an attorney / client relationsnip with the minority owners, when first made in Septemmer, 1986, came as a surprise to us and was quickly and emphatically rejected in my letter to you of September 18, 1986.
- 2. Relevance. As noted, we are also quite anaware of why it is believed that your letter and the attachments thereto are something that should be sent to the Board. We believe that your p'roposed assertions about the "neceastty" of minority owner representation," -- if " representation is thought to mean having a lawyer with whom you have an attorney / client relationship show up at proceedings and file papers -- is plainly incorrect and certain'y not supported by the purported authority offered in support of the preposi:Lon. Nothing in Marcie Hill (ALAB-459) stands for the propos1:1on, which we find original b2: quite inconsistent with NRO practice, that each cf the minority owners of a unit for which an Operating License appi: cation is pending is entitled to representation oy 1:e own lawyer before the Commission. Indeed, nothing in ALAS-459 or elsewhere requires that any applicant for a license appear by counsel, and iC OTR I 2.713 veuid appear to be directly to the contrary. Accordingly, the logic of your assertion that, given ALAB-459, "Brazos requires representa :en before the NRC" -- the apparent point of depar-ure for the entirety of your proposed submission -- appears to us to be a non sequ::ur, which is wholly unsupported by the authority cited.
It may thus be redundant to point out that the Board l itself has previously recognized that the " squabbles" among the joint owners are no matters in which :: has any responsibility or proper ad:udicatory role.
I
- 3. Motivat:on. It is thus not clear :: us why you or your c'ient appear to believe such a submission --
irrespective of its accuracy vel non -- wou*d be .
i appropriate. If you are concerned about ensuring the Soard l understands the reia: onship between this firm, the other l
l i
Gopeo&GcAv Rober: A. Jablon, Isqu:rs February 20, 1987 m
I h
\s / attorneys retained by Texas Utilities Electric Company to prosecute the license application for the Conanche Peak Steam Electric Station, and the Minority Cwners of that F:ofect, we enticipate tha: the ruwent submission of the letter of Mr. Wooldridge to the Board (a copy of which as appended hereto) mus: in any event make these matters clear to the point where even the most obtuse could not claim confusion.
- 4. Interference with the Licensine Efforts. We are also constrained to inform you that not only'Is your proposed submission to the Licensing Board presumptively inappropriate, its injection into the ongoing process would likely be harmful to the licensing case by tending to involve the Board and the other parties in issues that simply do not belong in that fo rum. We have difficulty seeing why such a risk should be accepted in this matter.
To the contrary, as I know you are aware fron our previous communications, the Joint ownership Agreement conveys to TU Electric the sole responsibility for the licensing of Comanche Peak.
While we do not hold ourselves out as experts on the meaning and' current effect of the Joint Cunership Agreement, it is plain that its contours require us to conclude that the request you have made of me should be directed to our client TU Electric. We have accordingly sent copies cf your proposed submission along to Texas Utilities Electric company and are seeking 1:s direction as to whether we should accede to all, or any part, of your request that such information be placed before the Board through our offices.
We expect 20 receive such direction in relatively short ceder. Because : must await such direction, and for the other reasons already articulated herein, : am sure you appreciate that : cannot accede to your roguest that your submission to me be forwarded "immediately' to the Board.
You may correctly estimate from the foregoing discussions that we have advised our client that such a filing appears to us quite unnecessary and potentially detrimental. If you nevertheless wish to poruue such a course, ! urge you to encourage your client to employ its status as a Joint Cwner as soon as possible *.o influence the Project Manager with regard to the directions that we receive. That, of course, is the avenue provided in the s
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- -. _.__ -_- - . _ ~ . _ _ - ~ . . - - . . . . . - - . . . . - _ . . . . _ - . - . -
Acoss a GcAv Robert A. Jablon, Iaquire February 23, 1987 Joint Ownership Agreement for pursuing views such as apparently motivated your letter, no: a dia!ogue vs,th us.
Very truly yours, S.cmas G. Dignan, Jr.
TGDJr/kdr Enclosure I
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EXHIBIT 20
\
UNITED STATES OF AMERICA NUCLEAR REGULATORY Cn m !SSION 3efore Administrative Judges:
Peter 9. Bloch, Chaiman Dr. Kenneth A. McCollem Dr. Walter H. Jordan
)
in the Matter of ) Occket Nos. 50-4aS-CL
) 50-446-CL
)
TEXAS UTILITIES ELECTRIC COMPANY, et al.)
--)
(Comanche Peak Steam Electric Station, )
ASL8P No. 79-43C-06 CL Units 1 and 2) )
) November 28, 1986 MEMORANDUM AND ORDER MEMORANDUM (Discovery of Tex-La Documents)
On November 4, 1986, Tex-La Electric Cooperative of Texas, !rc.
(ApplicantsI ) filef their response to Citizens Association for Sourc Energy's (CASE's) motion to compel the production of certain Tex i documents. Tex-La argues that the documents are privileged because 09e.,
were prepared for litigation between it and Applicants' managing car'-
ner, Texas utilities Electric Co., et al. ; they cite Hickman v. Taylea.
329 U.S. 495, 675 5. Ct. 385 (1947) and Texas utilities Electric Cer oa-n . 20 NRC 1464, 1473 (1984).
l l
I Although Texas Utilities Electric Co., et al. is generally re'er-a-to as Applicants in this case, it has pemTtted Tex-La, a minor .
owner, to respond to this motion. See Applicants' Response to T.E (10/20/86) Motion to Compel Tex-La Ecuments, November 4. '.996.
l Exhibit A l
t W I h-
- ex-La OccwreMs: 2 We accept Tex-La's characterization of the disputed documents, as follows :
In April,1985, Tex-La requested its attorneys, with the helo of Southern Engineering, to prepare a detailed stud of the history of the problems at Comanche Peak and of TUEC's Texas Utilities Electric Company's] potential liability to Tex-La as a result of these problems. This report took several months to complete, and, around the time it was finished, a draft complaint against TUEC was prepared for filing in Texas state court.
.. . [T]he information in these reports and in their sup-porting documents go to the very heart of Tex-t.a's case against TUEC. They represent Tex-La's only opportunity for independent verification of the status of the design, construction, and licens-ing effort for the plant. . . . [T]he reports served the . . .
purpose of gathering, distilling, and analyzing information that would be used as part of the basis of a law suit against TUEC. . .
We also accept Tex-La's representations concerning the limited direct observation of plant operations contained in these Southern Engineering j documents.
However, although we have not examined these documents, we consider them relevant to CASE's prepara tion. First, CASE has argued that Applicant's management style contributed to the perception among quality I
assurance workers that they wert being harassed and quality was being
- sacrificed for schedule; it appears likely that Tex-La's consultant has 1
examined matters that CASE will consider relevant to this argument concerning management style. Second, CASE is attemoting to show a widespread breakdown of quality assurance for design and construction (an argument supported in part by our decision of December 1983}.
Although there is no certainty that Southern Engineering's view of "the
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Tex-La Occurents: 2 history of the problems at Comanche Peak" will suoport CASE's view, there is a plausible causal link between management problems in other areas and management problems with quality assurance. Hence, it is CASE, and not Applicants, that should decide whether these reports are
- helpful to it. In summary, we consider the Southern Engineering documents to be discoverable because of their relevance and because they may suggest further avenues of discovery.
We agree with Applicants in approving of the principle that the work product privilege applies to the protection of information gathered in one case that is sought in another. But we would not apply that general principle in this case.
For purposes of this litigation Applicants are ore party. Their intramural squabbles may not be asserted as a reason to deprive interve-l nors of information relevant to the preparation of their case. Once the l information exists, we do not consider it relevant to inquire whether it F ,
exists because of problems existing within Applicants' team. They are collectively responsible for meeting their discovery obligation.
That still leads to a squabble that we arguably ought to resolve.
Tex-La does not went Texas Utilities Electric Co., et al. or its lead attorney to be able to gain access to this information, which it can then use against Tex-La in the pending state court litigation. To us, this seems a private squabble related to contractual rights and claims being asserted between the parties. If Texas Utilities seeks access to this information it can obtain it by agreement with Tex-La or by compul-sion in the state proceeding. We do not consider it our role to e
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IeX-l3 OCCun"ents :
- O interfere in this private squabble, even if it makes it harder for the
" lead" attorney to prepare its entire case.
4 If indeed the infomation is not relevant or important in our case, as Tex-La has argued, then Texas Utilities will not be hamed. If it is relevant, it affects the joint interests of Texas Utilities and Tex-La, which should reach an accommodation for their mutual benefit or should settle the question in state court.
We note with some concern allegations that Worsham, Forsythe, Sampels and Wooldridge (the law fim), who are lead attorneys in this litigation, are also engaged in suing Tex-La in state court. It would appear that Tex-La is a client of the law fim, which was paid by its client to acquire expertise and knowledge that now appears to be avail-able for use in state court against it. We note that this situation threatens unnecessarily to complicate this case and may require our action in the future. However, given our view of the pending discovery i
l, motion, we do not find these allegations relevant to the outcome of the
{ motion currently before us.
To protset the information from Texas Utilities and avoid prejudic-ing the state-court contest, we shall direct CASE to write and execute a protective agreement. If Tex-La approves of the agreement and it is executed, it shall constitute an Order of this Board. Should Tex-La not approve of the agreement, it shall be submitted to the Board for its consideration.
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O Tex-La Occuments: 5 0R0EP For all the foregoing reasons and based on consideration of the entire record in this matter, it is this 28th day of November 1986 ORDERED:
That CASE shall write and execute a protective agreement, pursuant to the attached memorandum. The executed agreement shall become the Order of this Board.
That promptly after the protective order is duly executed Tex-La Electric Cooperative of Texas. Inc. shall promptly make available to CASE, in Washington, D.C. or another mutually agreed site, all of the Southern Engineering documents that are the subject of this discovery request.
FOR THE ATOMI M FETY AND t.! CENSING 80ARD l
Peter 5. Bloch, Chairman ADMINISTRATIVE JUDGE Bethesda, Maryland
[ southern /BLOCH5]
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