ML20213F422

Answer of E Wallace to Commonwealth of PA 861027 Petition for Review of Commission Decisions CLI-85-19 & CLI-86-9 on 851219 & 860515,respectively & Aslab Decision ALAB-850.No Important Question of Fact Presented.W/Certificate of Svc

ML20213F422
Person / Time
Site:	Three Mile Island
Issue date:	11/12/1986
From:	Himmel M, Leibman A GREENBAUM, ROWE, SMITH, RAVIN, DAVIS & BERGSTEIN, WALLACE, E.
To:	NRC COMMISSION (OCM)
References
CON-#486-1464 ALAB-850, CLI-85-19, CLI-86-09, CLI-86-9, EW, NUDOCS 8611140201
Download: ML20213F422 (13)

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u mi C UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISgg0%0v 12 R2 '.03 Before the Commission

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EDWARD WALLACE ) Docket No. 50-289 EW

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(GPU Nuclear Corporation, Three )

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ANSWER OF EDWARD WALLACE IN OPPOSITION TO PETITION FOR REVIEW I. INTRODUCTION Pursuant to 10 C.F.R. 5 2.786(b)(3), Mr. Edward Wallace hereby opposes the petition for review filed by the Commonwealth of Pennsylvania (" Commonwealth") on October 27, 1986. The Commonwealth's petition seeks review of two Commission decisions, CLI-85-19, 22 NRC 886 (December 19, 1985), and CLI-86-9, 23 NRC 465 (May 15, 1986), as well as the decision of the Atomic Safety and Licensing Appeal Board, ALAB-850, 24 NRC (1986),

affirming the Administrative Law Judge's order terminating these proceedings. Because the petition for review does no more than ask the commission to reconsider its prior procedural rulings in this case and presents no important question of fact, law or policy warranting Commission review, it should be summarily denied.

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I II. STATEMENT OF THE CASE In ruling on certain motions to reopen the record of the TMI-l restart proceeding, the Commission required the licensee to notify the NRC before returning Mr. Wallace to a responsible I position at TMI-l (the " notification requirement"). Matter of Metropolitan Edison Company (Three Mile Island Nuclear Station, Unit 1), CLI-85-2, 21 NRC 282, 323 (1985). Mr. Wallace thereafter requested an opportunity to respond to statements made by various Staff offices that alleged that he was partially responsible for what the Staff said may have been a knowing material false statement in the licensee's December 5, 1979 response to a Notice of Violation ("NOV") relating to the TMI-2 accident. Mr. Wallace sought to respond to the statements because they damaged his reputation and constrained his future participation in activities regulated by the NRC.

The Commission issued an order, CLI-85-19, inviting comments on Mr. Wallace's request. The Commission stated (22 NRC at 889):

If based on the information submitted by commenters or otherwise available to it, the Commission determines that there is information which could form a reasonable basis for concluding that . . . Wallace . . .

willfully, knowingly, or with reckless disregard for the truth made a material false statement to the NRC, it will consider initiating an adjudicatory hearing to resolve whether to retain the notification requirement in CLI-85-2.

Comments were submitted by a number of entities, including the Commonwealth. In its comments, the Commonwealth stated, among other things, that it could not offer additional facts

1 l

because it had no independent means of obtaining information on the issue before the Commission.1 On May 15, 1986, the commission issued an Advisory Opinion and Notice of Hearing, CLI-86-9, which granted Mr. Wallace's request for hearing. The Commission expressly stated that the hearing was to be conducted under its Rules of Practice (10 C.F.R Part 2, Subpart G), and that any petitions to intervene should be filed in accordance with 10 C.F.R. 52.714. 23 NRC at 472. The Commission turther stated (23 NRC at 472 (emphasis added)):

Any party who advocates that Wallace made a knowing, willful, or reckless material false statement in the NOV response shall have the burden of going forward and persuasion. If no person intervenes against Wallace and NRC staff does not advocate a position against Wallace, then the proceeding shall be terminated and the TMI-l notification requirement as to Wallace shall be removed.

No person or entity petitioned to intervene under 10 C.F.R.

S 2.714. Moreover, the NRC Staff elected not to advocate a position against Mr. Wallace (letter from Mary E. Wagner, Counsel for NRC Staff, to the Honorable Ivan W. Smith, dated July 17, 1986). The only request for participation in the proceeding at all came from the Commonwealth and it sought only the status of an interested State under 10 C.F.R S 2.715(c). The Commonwealth acknowledged that it "ha[d] no additional facts to offer," and contended that it "ha[d] no independent means of obtaining information on the facts in dispute." It stated expressly that

-1/ Commonwealth of Pennsylvania's Comments on Commission Order CLI-85-19, January 24, 1986, at 9.

"[t]he Commonwealth [was] not [then) advocating a position against Mr. Wallace."2 The Staff opposed the Commonwealth petition. It contended that because no one had intervened under Section 2.714 and the Staff was not advocating a position against Mr. Wallace, the proceeding must be terminated in accordance with the terms of the Commission's order.3 l By Memorandum and Order issued August 19, 1986 the Administrative Law Judge terminated the proceeding and lifted the notification requirement as to Mr. Wallace. The Appeal Board affirmed in a Decision issued October 9, 1986, ALAB-850, noting that the Commission's " explicit directive [in CLI-86-9] is just as binding upon us as it was upon the Administrative Law Judge."

Slip op. at 3.

III. REASONS FOR DENYING THE PETITION A. The Pet.ition Is Misplaced And Untimely Insofar As It Seeks Reconsideration Of The Commission's Prior Orders As noted above, the Commonwealth's petition seeks review of two prior Commission decisions in this case, CLI-85-19 and CLI-86-9. The Commonwealth complains of the procedures and standards

! established by the Commission to govern the case. Petition at 4-

5. It is clear, however, that a petition for review does not lie

-2/ Commonwealth of Pennsylvania's Petition for Leave to Participate as an Interested State, June 30, 1986, at 2.

~3/

NRC Staff Answer to Commonwealth of Pennsylvania's Petition to Participate as an Interested State, July 17, 1986, at 2.

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for this purpose. A petition under 10 C.F.R. 5 2.786 may be used only to seek review of the decisions and actions of the NRC Appeal Soard, not the Commission. Thus, to the extent the i

Commonwealth seeks review of the Commission's prior rulings, its petition is wholly misplaced and should be dismissed.

The proper method fo'r challenging a decision of the Commission is by a petition for reconsideration under 10 C.F.R. $

2.771 or a petition for review in the United States court of Appeals. A petition for reconsideration, however, must be filed within 10 days of the decision. 10 C.F.Rs 5 2.771(a). Here tha time for petitioning for reconsideration of CLI-85-19 and CLI 9 has long since passed.4 Those decisions were clear and unambiguous as to the ground rules for any subsequent j proceedings. If the Commonwealth disagreed, it was incumbent upon the commonwealth to petition for reconsideration in a timely

manner. See Matter of Consolidated Edison Company of New York, Inc. (Indian Point, Unit No. 2), 13 NRC 1, 4-8 (1981)(petition for reconsideration properly filed to challenge the terms of a Commission order directing an adjudicatory hearing). See also Natural Resources Defense Council v. NRC, 666 F.2d 595, 602 (D.C.

Cir. 1981)(rejecting "back door procedural challenges (to regulations] by those who had the opportunity to seek direct review of regulations but failed to do so in a timely fashion").5 4/ The time for petitioning for review by the Court of Appeals -

- 60 days under the Hobbs Act -- has also passed.

-5/ In an apparent attempt to excuse its untimeliness, the Commonwealth claims that "[alny appeal of this proceeding (Footnote Continued to Next page.)

B. The Petition Presents No Basis For Reconsideration Of the Commission's Underlying Orders Even if the Commonwealth's procedural challenge were not untimely, there is no reason for the Commission to re-examine its previous orders. The petition for review alleges two

" fundamental errors in CLI-85-19 and CLI-86-9": first, that in CLI-85-19 the Commission improperly included "an additional element of scienter in order to. retain the notification /

authorization requirement" imposed in CLI-85-2; and second, that in CLI-86-9 the Commission improperly placed the burden of going forward and persuasion on parties advocating a position against Mr. Wallace.6 The Commonwealth's first claim misconceives the basis for the commission's imposition of the notification requirement. The Commonwealth mischaracterizes the Commission's action in CLI-85-2 as a " finding [] of fact" that Mr. Wallace had made a material false statement. Petition at 5; see also Petition at 1-2. It is (Footnote continued from previous page.)

prior to this time would have been interlocutory. . . ."

Petition at 5. This claim is meritless. The focus of the Commonwealth's appeal is the hearing procedures set up by the Commission, not an interlocutory ruling by the Administrative Law Judge or the Appeal Board. See Petition at 4-5. The Commonwealth would not have been precluded from petitioning for reconsideration of the commission's orders in CLI-85-19 and CLI-86-9. See Consolidate Edison, supra, 13 NRC at 4-8.

-6/ It should be noted that neither of these contentions was previously made by the Commonwealth in its comments in response to CLI-85-19 or in its petition to participate as an interested State. This underscores the untimeliness of the Commonwealth's attempt now to obtain reconsideration of the Commission's orders through the indirect means of a petition for review.

apparent from that decision, however, that the notification requirement was based on Staff representations that it had

" uncovered evidence indicating that the Licensee may have knowingly provided false information to the NRC in its response to the NOV." 21 NRC at 323 (emphasis added). The Commission made no finding that a knowing material false statement had actually occurred, but simply ruled that any management integrity issues arising out of the NOV response were essentially moot because the individuals primarily responsible were no longer associated with TMI-l activities. 21 NRC at 323. Because the notification requirement was based on the possibility of a knowing violation, it was proper for the Commission to call for evidence of scienter l from parties advocating retention of the requirement.

The Commonwealth's second claim, that the Commission improperly shifted the burden of proof, effectively would stand .

American jurisprudence on its head. "In this country, persons or entities accused of criminal or tortious conduct do not have the burden of proving a negative; i.e., that no such misconduct exists." Matter of Consumers Power Company (Midland Plant, Units 1 and 2), LBP-75-39, 2 NRC 29, 45 (1975). The Commission could not, consistent with such principles, place the burden on Mr. Wallace to prove that he did not knowingly participa'te in a material false statement. A knowing material false statement could be the basis for criminal sanctions under Section 223 of the Atomic Energy Act. The Commission was therefore required to place the burden of proof on any party advocating a position against Mr. Wallace. Ibid.

Indeed, the Commission's action was akin to an order to show cause why a sanction should not be lifted. See CLI-85-19, 22 NRC at 889 (Commission intends to lift notification requirement unless there is a showing of a knowing material false statement).

In such cases, the burden of proof is on the party advocating

, retention of the sanction. Reich Geo-Physical, Inc., ALJ-85-1, 22 NRC 941, 947 (1985)(Staff bears burden of proof when licensee requests hearing to contest order imposing civil penalty). Cf.,

10 C.F.R S 2.732 ("the proponent of an order has the burden of I proof").

C. The Appeal Board's Decision Is Fully Consistent With The Orders Of The Commission Commission review of an Appeal Board decision is discretionary and is appropriate only when that decision "is erroneous with respect to an important question of fact, law, or policy." 10 C.F.R S 2.786(b)(1). The Commonwealth does not even attempt to make such a showing. In fact, the Commonwealth does t not even allege that the Appeal Board decision was erroneous and does not identify what important question of fact, law or policy is involved here.

In any case, it is evident that Commission review is not warranted. In affirming the ALJ's order the Appeal Board did no more than follow the Commission's explicit directive in CLI-86-9, as the ALJ himself had done. Because no party had intervened and the Staff had elected not to take a position against Mr. Wallace, the ALJ and the Appeal Board were required by the unambiguous

terms of CLI-86-9 to terminate the proceeding and lift the notification requirement. In these circumstances, granting the petition for review would result in the' Commission revisiting the course it charted after the parties have completed the sail.

The fact that the ALJ and Appeal Board adhered to the Commission's binding directive hardly provides a basis for review. The Commonwealth voluntarily elected to participate as an interested State under Section 2.715(c). It expressly disavowed any interest in going forward with the litigation and stated that it was not at that time advocating a position against Mr. Wallace. Petition for Leave to Participate at 2.7 In doing so, the Commonwealth was aware of the ground rules for this case and had recently been reminded of the Commission's well-established rule that the S 2.715(c) participation of an interested State alone does not trigger a hearing. Matter of Duquesne Light Co. (Beaver Valley Power Station, Unit 2), LBP 6, 19 NRC 393, 42'6-27 (1984)("[t]he filing and acceptance of the Pennsylvania petition to participate under the provision of section 2.715(c) does not trigger a hearing. . . "). See also Matter of Niagara Mohawk Power Corp. (Nine Mile Point Nuclear l

Station, Unit 2), LBP-83-45, 18 NRC 213, 216 (1983). The Commonwealth had every opportunity to litigate this matter and voluntarily chose not to do so. In these circumstances, the ALJ

-7/ As the ALJ noted, the notification requirement has not been lifted by " default." The Commonwealth has fully participated in the TMI-l restart proceeding and was aware that if a j hearing were held it would have " complete access to any i

evidence against Mr. Wallace." ALJ-86-3, slip op. at 5.

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l and Appeal Board did not err in complying with the terms of the Commission's own directive. l IV. CONCLUSION The Commonwealth is asking this Commission to grant a petition for review for the sole purpose of revisiting its own prior procedural rulings in this case. Not only is the request, viewed as a petition for reconsideration of CLI-85-19 and CLI 9, out of time, but the request fails utterly to present an important question of fact, law or policy warranting the Commission's consideration. Indeed, the central legal theory advanced by the Commonwealth would reverse the burden of going forward that goes hand in hand with the presumption of innocence that is at the heart of the American legal tradition.

Accordingly, the petition for review should be denied.

Respectfully submitted,

/

M: hael B. Himmel Ai.ain Leibman GREENBAUM, ROWE, SMITH, RAVIN, DAVIS & BERGSTEIN Engelhard Building P.O. Box 5600 Woodbridge, NJ 07095 (201) 549-5600 November 12, 1986 Attorneys for Edward Wallace

hr UNITED STATES OF AMERICA -

NUCLEAR REGULATORY COMMISSION g6 N0y 12 pg,03 l OffP6E - I a k lill 00CYi%df In the Matter of ) .

)

EDWARD WALLACE ) Docket No. 50-289 EW

)

(GPU Nuclear Corporation, )

Three Mile Island Nuclear Station,) )

Unit No. 1) )

CERTIFICATE OF SERVICE I hereby certify that copies of " Answer of Edward Wallace in Opposition to Petition for Review" have been served on the following by deposit in the United States mail, first class, this 12th day of November, 1986:

Ivan W. Smith Henry D. Hukill Administrative Law Judge Vice President & Director, TMI-l U.S. Nuclear Regulatory Commission GPU Nuclear Corporation Washington, DC 20555 P.O. Box 480 Middletown, PA 17057 Nicholas S. Reynolds, Esq.

Bishop, Liberman, Cook, Purcell & Lynne Bernabei, Esq.

Reynolds General Counsel 1200 17th Street, NW, Suite 700 Government Accountability Project Washington, DC 20036 1555 Connecticut Ave., NW i

Washington, DC 20036 l Michael W. Maupin, Esq.

l Hunton & Williams Ellyn R. Weiss, Esq.

P.O. Box 1535 Harmon & Weiss Richmond, VA 23212 2001 S Street, NW Washington, DC 20009 Ernest L. Blake, Jr. Esq.

Shaw, Pittman, Potts & Trowbridge Michael F. McBride, Esq.

2300 N Street, NW LeBoeuf, Lamb, Leiby & MacRae Washington, DC 20036 1333 New Hampshire Ave., NW l

Washington, DC 20036 i

l

Susquehanna Valley Alliance Marjorie M. Aamodt P.O. Box 1012 Committee on Health Aspects and Lancaster, PA 17604 Nuclear Power Box 652 Joanne Doroshow, Esq. Lake Placid, NY 12946 The Christic Institute 1324 North Capitol St., NW Louise Bradford Washington, DC 20002 Three Mile Island Alert 1011 Green Street Mary E. Wagner, Esq. Harrisburg, PA 17102 U.S. Nuclear Regulatory Commission Three Mile Island Alert Washington, DC 20555 315 Peffer Street Harrisburg, PA 17102 Jack R. Goldberg Acting Deputy Assistant J. R. Thorpe General Counsel Director of Licensing U.S. Nuclear Regulatory Commission GPU Nuclear Corp.

Washington, DC 20555 100 Interpace Parkway Parsippany, NJ 07054 f'

ALAIN LEIBMAN

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