ML20216D265

Memorandum & Order.Memorandum (Discovery Re Cresap Rept).* Order Requiring Applicant to Supply Joint Intervenors W/All Info & Admissions Including Factual Statements Obtained from Present or Former Employees by Cresap. Served on 870623

ML20216D265
Person / Time
Site:	Comanche Peak
Issue date:	06/22/1987
From:	Bloch P Atomic Safety and Licensing Board Panel
To:	TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC)
References
CON-#287-3877 86-528-02-CPA, CPA, LBP-87-20, NUDOCS 8706300493
Download: ML20216D265 (8)

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. DOCKETED-USNRC i LBP-87-20 '

UNITED STATES OF AMERICA- '87 JLN 23 P 1 :07. -

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NUCLEAR REGULATORY COMMISSION-

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Before Administrative Judges: fc[ckyp } ' p .;

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Peter B. Bloch, Chairman ]

Dr. Kenneth A. McCollom- 'I 7

Dr. Walter. H. Jordan gg g g g

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. In the. Matter of ' Docket No. 50-445-CPA' g.4 3 e.

• TEXASiUTILITIES: ELECTRIC. COMPANY.iet al. , I ASLBF Mo.. 86-528-02-CPA"

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) June 22,'1987; MEMORANDUM AND ORDER MEMORANDUM'  !

(DiscoveryConcerningCresapReport) ]

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In its discovery request . Joint :.Intervenors seeki access. ton a t

Retrospective Audit of the: Comanche'Peakn. Steam Electric-Station:Projact, being conducted ,by Cresap,. McCormick - & - Paget '(Cresap. Report). - Appli-j cants2 contend that the Cresap Report', which does: notryet existsfn:finali

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O form, should. not be produced for.. the Joint"Intervenors' because it is .

1 privileged under the attorney work product. privilege:.and 'the privilege-covering the work of non-testifying experts. Joint intervenors. deny the. ,

applicability of the privileges and . urge that the privileges.be narrowly -l 4

1 Citizens Association:for Soun'd Energy 'and Meddie Gregory. l-2

- Texas Utilities Electric' Co.,3 al .

8706300493:870622 ~

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J' i Cresap; Report . Discovery: '.2-construed so" that the requested information will- be: produced. They;also: .

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argue-that' the need for the information is great because 'it is difficult' to obtain.Otherwise.

I. Legal Principles

' The applicable . legal ~' principles are straightfomard and have been

' explained. by us on* June-1,.1987, in a discovery ordercinsthe'. companion-Operating License proceeding.' Under 10 CFRl92.740(b)~ parties may obtain discovery regarding any matter,.not privileged, which:is relevant to the.

subject matter involved in the . proceeding. . An exception 1has been created for ~ non-witness experts (experts hired in anticipation of.

litigation but. not expected - to testify), whose testimony. may not be.

elicited except under. special circumstances.. Kerr-McGee Chemical Corporation, LBP-85-38, 22- NRC 604, 610,u 613-614~ (1985).- The: special.

circumstances required to override the-privilege are discretionary with the court, although there' are a va'riety- of, precedents that may. bei used as guidance. 4 The purpose of the discovery rules 'is to make information..readily-available in licensing cases. The purpose ofi the non-witness c expert rule is to provide a party an incentive ta thoroughly prepare for trial ~

without having to turn over the fruits of its preparation'to its.adver '

sary. The purpose of the special circumstances exception to the privi -

lege is to- balance the interest in disclosure againstLthe need to create -

incentives- for thorough trial preparation.

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Cresap Report Discovery: .3 In this case, Applicants have argued 'that- they employed:-a-non-testifying witness for the purpose of gathering linformation: for a-related proceeding, a public utilities proceeding concerning appropriate- -

. utilityi rates. Thus, . by protecting the. confidentiality of -this- report, we would protect Applicants, rights...in the.other: proceeding. ,

Nevertheless, Applicants -still have.. obligations under Appendix B to Part 50.., ' Pursuant to that Appendix,. Applicants must:-

In the: case of significant conditions adverse-to quality . . .-

assure that the cause of the condition is'detennined and corrective = ' ,

action . taken ' to preclude ' repetition. - The identification of the significant condition" adverse to -quality, the cause of the- condi-tion, and. the corrective action taken shall be . documented and reported to appropriate levels of management. .

Consequently, whenever . Applicants have . found significant - conditions adverse to quality. - they must, detennine the - cause of the conditions.-

That is their' routine obligation.- To the extent that Applicants would have been required to collect this'.information. anyway, the purpose: of. j the privilege - --creating . an incentive , for trial preparation- is.. not-even applicable. The' infonnation -would have- been ' produced. and made available.if pertinent to this proceeding.

Of course, the task of determining the "cause" of deficiencies in a-plant with many deficiencies is a task of great complexity. Applicants. -

must consider all information available to them affecting -the judgment-about . "cause," including information about management decisions that could affect the quality of the plant and that were obtainedLin the '  :

course of a. management study commissioned for.a rate proceeding. Hence,.

information generated by the Cresap team .may ' fall within this category

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Cresap Report Discovery: 4 .l l

of relevant information. If information supplied to Cresap is relevant.

l to Appendix B "cause" determinations, then we find that it is discover-able and should be provided to joint intervenors in response to discov- j ery and should also be studied by appropriate.. personnel of Applicants j dealing with issues of cause of deficiencies. . .j l

l II. The: Nature of the.Cresap Audit. -

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A. Work Specification The work specification for the audit states that: J TUEC [ Texas Utilities Electric Co.) is initiating a retrospective audit of the . project management decisions during construction of i CPSES....The ~ auditor performing the retrospective audit will present findings in a detailed written report to TUEC.. The auditor ,

also may be called to provjde expert testimony at. public hearings in support of its findings We also ' know, based' on the Affidavit of Homer C. Schmidt, that the Cresap. Report'was begun on advice of counsel and that the audit team reports' to a Management, Review Committee,;one of. whose.. members is TUEC's a attorney responsible for rate case. litigation.4 f

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Joint' Intervenors' Opposition to Motions for Protective' Order.and Motion to Compel Re: Gregory Discovery (Sets 5 and 6)(Motion) at 3..

4 Permittees'- Response to Joint Intervenors' Opposition to -Motions for. Protective Order and Motion to Compel Re: Gregory . Discovery (Sets' 5 and 6),' March 17,1987 (Response) at attached Affidavit of.

Homer C.,Schmidt. ,

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Cresap Report Discovery: :5 -

l Under' the- circumstances _ we agree with Applicants that these.

materials were prepared in anticipation.of litigation and are covered by- ,, j l

the attorney work product privilege.5 B. Relevance-In 'its brief , 6invited .byn the . Board, the- Staff of the Nuclear .

RegulatoryL Connission (Staff) concludes that the Cresap report appears l to be relevant to: issues :in the construction permit amendment case, j which-includa' whether past delay was due to intentional. misconduct and q whether misconduct-has been repudiated.7 Staff, with whom we agree, states that'the following sub-issues are relevant to this case:

To determine TUGCO's ability to contro11 each of these factors and j related events To assess the performance og TUGC0' management in identifying and responding to these factors-i j

S' We were not persuaded by Consolidated Intervenors' argument that the Work Specification contradicts. the affidavit of, Mr. Homer Schmidt concerning the principal purpose 'of the Cresap audit. .A study of management for purposes _-of a ' utility' rate hearing necessarily would cover many of the subjects that Joint Intervenors find contradictory. Consolidated Intervenors Reply to TUEC's  ;

Opposition to Motion to compel Re: Gregory. Discovery (Sets 5 & 6),

-April 20, 1987.

6 NRC Staff Views on Discovery Dispute 1 Involving Intervenor 'Meddie Gregory's Discovery Request for: the Cresap Audit May 18, 1987' (StaffViews).

7 Staff Views at 7.

8 Staff View's at 7.

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. o Cresap Report Discovery: 6 f It- is joint intervenors' allegationiin both the Joperating license . .

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- case and the . construction permit - case that Applicants have favored completion 'of the plant on schedule over the safety .of the plant.' We j admitted ' joint: intervenors' contentioni that ; Applicants' ' favoring of- )

schedule over safety amounted.to the intentional disregard of Connission regulations. The ' contention of which that- allegation is a part cis  ;

before:usy:pending. appeal.: j III. Conclusions.

We find that Applicants are entitled to the work product privilege for the Cresap ~ report. Nevertheless, we, also.. find that Applicants are j obligated 'to supply to joint' intervenors all Linfomation 9 and ; all 10 admissions (including factual- statements obtained from . present e or former projectcemployeestby Cresap. personne111) relevant to Appendix ~ B l

9 Infomation z includes records or statementsJ about2 specific: plant . l conditions or about construction,c design, actions of particular - l managers- or supervisors,~ management. responsiveness ,.x management policy or management practices. It does : not' include information that is solely related to. plant financing;_ but- this exception does l not exclude information' related to the basic question Af .whether -

Applicants _ have placed ' schedule -or short-run efficiency above- 1 safety.

.10 1 Any statement that could. be cons +, rued unfavorably: to 1any of Applicants' ' positions 'in this . litigations : should be considered an admission. Applicants may, of course choose to _. release L all-opinion statements by interviewees:in order to balance Lthe1 record or place the' admissions-in full context;  ;

11 statements, . ..because 'they obtained ifrom These factual were  :

_ (FootnoteContinued) e l 1

Cresap Report Discovery: 7 requirements and cause determinations and supplied to Cresap.12 At an 13 doctrine,.information also should appropriate time, under the McGuire be made available to the Board by the Applicants.

We shall require Applicants . to: comply with this ' Memorandum and Order promptly.

(FootnoteContinued) responsible personnel by " friendly" fact finders, cannot readily be duplicated by interviews conducted by intervenors. We do not consider this situation analogous to giving,intervenors access to interviews- of third-party witnesses who have no relation. to applicants. Nor da we consider the balancing test to operate in the same . fashion as in civil cases where there:is less' of a public interest than occurs for issues related to the safe construction and operation of nuclear power plants.

12 It is the intent of Appendix B that~ deficiencies t be..' promptly  ;

identified and corrected.. We expect .that Applicants have a i comprehensiveL system for keeping track of the serious concerns of any responsible person (including Cresap employees or agents or consultants hired by Applicants lawyers) with access to information about this plant.

13 6 AEC at 625-26.

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Cresap Report Discovery: 8 0 R D E R: "

For all the foregoing reasons and.. based on consideration of the:

entire record in this matter, it-is- this 22nd day of June.1987 -

ORDERED:

Texas Utilities Electric Co...elal. (Applicants) shall comply promptly.with .the: Board's conclusions in the accompanying memorandum..

FOR THE ATOMIC SAFETY AND LICENSING BOARD J

, t V 4 Peter B. BloD, Chafirman j ADMINISTRATIVE JUDGE i q

Bethesda, Maryland-cresap2/BLOCH2  !

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