ML19329D005

Responds to City of Cleveland 760510 Hearing Memorandum Re Procedural Due Process.Recommends Affirmation of Special Board.If Board Not Affirmed,Disqualification Proceeding to Be Returned for Evidentiary Hearing.Certificate of Svc Encl

ML19329D005
Person / Time
Site:	Davis Besse, Perry
Issue date:	05/15/1976
From:	Gallagher M SQUIRE, SANDERS & DEMPSEY
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
References
NUDOCS 8002240020
Download: ML19329D005 (15)

Text

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• . -e , Smetary UNITED STATES OF AMERICA $ s.oC " /g NUCLEAR REGULATORY COMMISSION N 6 Before the Atomic Safety and Licensing Appeal Board 1

In The Matter Of O T. ' ,o Tile TOLEDO EDISON COMPANY and ) Docket Nos. 50-346 D THE CLEVELAND ELECTRIC ILLUMINATING COMPANY ) '50-500A (Davis-Besse Nuclear Power Station, ) 50-501A Units 1, 2 and 3) )

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THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, ) Docket Nos. 50-440A et al. ) 50-441A (Perry Nuclear Power Plant, Units 1 and 2) )

SQUIRE, SANDERS AND DEMPSEY'S RESPONSE TO HEARING MEMORANDUM OF CITY OF CLEVELAND ON ISSUE OF PROCEDURAL DUE PROCESS MICHAEL R. GALLACHER Attorney for Squire, Sanders & Dempsey 630 Bulkley Building Cleveland, Ohio 44115 (216) 241-5310 James B. Davis, Esq.

Special Counsel Hahn, Loeser, Freedheim, Dean & Wellman National City - E. 6th Building Cleveland, Ohio 44114 Vincent C. Campanella Director of Law Robert D. Hart First Assistant Director of Law Hay 15, 1976 213 City llall Cleveland, Ohio' 44114 (216) 649-2737 Attorneys for City of Cleveland 8 0 02 240 MO 4

For the NRC Staff Joseph Rutberg, Esq.

Chief Antitrust Counsel ,

Benjamin H. Vogler, Esq. t Assistant Chief Antitrust Counsel l Roy P. Lessy, Jr., Esq.  :

Counsel Jack R. Goldberg, Esq. f Counsel t

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INTRODUCTION The Hearing Memorandum Of City Of Cleveland On The Issue Of Procedural Due Process was handed to counsel for SS&D at the time of the oral argument before the Appeal Board on May 10, 1976. It has now been examined and re-quires only brief comment with respect to two points.

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THE CASES CITED BY THE CITY TO SUPPORT ITS POSITION ON PROCEDURAL DUE PROCESS CONFIRM THAT SSSD WAS DEPRIVED OF DUE PROCESS IN THE INSTANT PROCEEDINGS.

,The City cites In Re: Claiborne, 119 F.2d 647 (C.A. 1 1941) as directly inpoint.1/ An examination of the opinion discloses that counsel for the defendants filed a motion requesting the court to issue a rule to show cause inter alia, why discipline measures should not be taken against Attorney Claiborne. An order to show cause based upon the motion was issued by the court and a hearing of some three days duration uas thereaf ter held. Some evidence at the hearing seemed to indicate that Claiborne had engaged in un-professional conduct. The court requested an investigation be made and a report filed which was done. The court then issued its further order direct-ing Claiborne to appear to show cause why he should not be disbarred. A copy of the order and a copy of the report setting forth the charges were served on Claiborne personally. A two day hearing was held thereaf ter before a different judge. These " proceedings on the order to show cause why the appellant should not be disbarred were conducted de novo on the informal charges made in the report. . . ."2/ The charges appearing in the report served upon Claiborne were precise, related to particular specific acts of misconduct and are particularized in the court's opinion.2!

1/ earing Memorandum of City of Cleveland On Issue Of Procedural Due

-H Process, dated May 10, 1976, p. 9.

2/19'F.2d at 650 2/ Ibid., at 649 ,

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In Willner v. Committee on Character, 373 U.S. 96 (1963) the repeated refusal of the New York Appellate Division to admit an applicant to practice before the Bar of the State of New York was reversed on the ground that the applicant was denied procedural due process. Even though New York did not have any procedure whereby an applicant for admission was provided notice or a hearing prior to an adverse ruling, the Supreme Court of the United States held that:

"(f) Petitioner was clearly entitled to notice of, and a hearing on, on the grounds for his rejection, either befgye the committee or before the appellate division."-

The language from the case which the City quotes 5/ essentially states that where there are no disputed facts (essentially a Rule 56 summary judgment situation), a further hearing is unnecessary. Needless to say, the language cited is inapplicable uhere there is a factual dispute.as there is in this case.

The Claiborne and Willner cases require notice: specification of charges and an opportunity to be heard. It is difficult to understand how the City interprets these cases to constitute support for its position.

$/373 U.S. at 97, 104-105 El Hearing Memorandum, p. 9-10

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PROCEDURAL DUE PROCESS IN THE INSTANT PROCEEDING APPLIES ONLY TO THE RESPONDENT, SS&D. IF THE APPEAL BOARD ACCEPTS THE STAFF'S POSITION THAT THE SPECIAL BOARD IS THE ADJUDI-CATORY BODY UNDER SECTION 2.713(c) THEN THE SPECIAL BOARD'S FINDINGS AND ORDER SHOULD BE AFFIR'IED BECAUSE THE CITY HAS RESTED ITS CASE AND SHOULD NOT N0',' BE PEFJ11TTED TO REOPEN IT While analogies are never on all fours and occasioaally may present more problems than solutions, an analogy here may, nevertheless, be helpful.

The City, acting as the complainant, filed its request for relief and put on its case. It then rested. Not only did it rest in the customary sense of adducing no further evidence and of announcing its intention to the court, but it ~ rested in the more formal sense of filing a " Motion To Limit Hearing" which, when granted by the Special Board, prevented SS&D. from putting on its defensive case, and which constituted a representation by the City to the Special Board that it had presented all of the evidence it intended to present (with the' limited proviso that if- SS&D vere permitted to adduce defensive evidence the City wanted an opportunity to rebut it). Rebuttal never became necessary under the City's alternative motions because SS&D was denied an opportunity to put on a defense af ter the City rested. Further annlogizing the Nuclear Regulatory Commission procedure with traditional court procedure, the City having rested, the Special' Board, acting as the finder of fact (jury or judge), made its findings on the evidence presented by the City and such additional' evidence as became part of the record through SS&D's efforts in the course of the City's case.

On the fact issues presented the Special Board found in favor of SS&D.

Whether it found on the basis of an estoppel or a waiver or on the ground I

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that the City had failed to meet its burden of proof is irrelevant. The two issue rule should apply and if the Special Board's ruling is supportable on any of the foregoing bases, it should not be reversed.

The question now before the Appeal Board is twofold; 1. Does procedural due process require the Appeal Board to permit the City to reopen its case (another bi,te at the apple)? and 2. Is there any evidence to raise a fact issue as to any of the bases upon which the Special Board might have found in favor of SS&D?

Due process is not a right of the complainant. Due process does not require that the City be given an opportunity to reopen its case. Tradi-tional notions of fair play and justice do not reauire it. The City chose to rest. It chose to close its casc. This was done e:1untarily and over the objection of SS&D in the face of initial ruling of the Special Board.

As in traditional litigation, the plaintiff having rested and the matter having been submitted to the jury, the plaintiff should not be permitted thereaf ter to reopen to adduce further eivdence.

On the question of whether there is any evidence to raise a f act issue as to any of,the bases upon which the Special Board might have found in favor of SS&D, the record is quite clear. There is evidence from which actual knowledge could be inferred on the part of the Law Director or other respon-sible City official; there is evidence of conduct and correspondence from which consent or express waiver could be inferred; there is evidence of past conduct and present inducement relied on good faith from which estoppel or

_ implied waiver could be inferred. Morcover, there is evidence of the limited

and specialized disclosures given to municipal bond counsel as contrasted with disclosures to bond counsel arranging for the public sale of private securities (at least within the historical context of public financing prior to the New York City debacle) and there is evidence that no information, confidential or otherwise, was supplied by the City or had been communicated to CEI.

Above all, there remains the threshold issue of whether the City has satisfied its burden of proof.

Can this Board say that the evidence is in such a state that reasonable minds could come to but one conclusion and that conclusion be that SS&D was guilty of the charges?$/ To reverse the Special Board on the weight of the evidence, the Appeal Board would have to disregard totally the fact that of the six reasonable minds which considered the evidence at the fact finding level, four of those reasonable minds found in favor of SS&D.

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.k/For this Appeal ' Board to so find it would, in substance, have to find that ,

the Special Board should have " directed a verdict" against SS&D and in I favor of_the City.

CONCLUSION It is respectfully submitted that the Appeal Board should affirm the Special Board for the reasons set forth herein and for the reasons discussed in SS&D's earlier briefs. If the Appeal Board does not affirm the Special Board, then it is required under the dictates of procedural due process to return the disqualification proceeding for a full evidentiary hearing before another special board.

M M) . A ,// Rf M MICHAEL R. GALLAGHER Attorney for Squire, Sand s & Dempsey 630 Bulkley Building Cleveland, Ohio 44115 (216) 241-5310 e

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CERTIFICATE OF SERVICE I hereby certify that copics of SQUIRE, SANDERS AND DEMPSEY'S RESPONSE TO HEARING MEMORANDUM OF CITY OF CLEVELAND ON ISSUE OF PROCEDURAL DUE PROCESS were served by mailing same on May 15, 1976 to Vincent C. Campanella, Esq.

and Robert D. Hart, Esq., Ccunsel for the City of Cleveland; to James B.

Davis, Esq. , Special Counsel for the City of Cleveland; to Alan S. Rosenthal, Esq. , Jerome E. Sharfman, Esq'. , and Richard S. Salzman, Esq. , Chairman and Members respectively of the Appeal Board, and to Benjamin H. Vogler, Esq. ,

Assistant Chief Antitrust Counsel for the 1;RC Staff, at the addresses appear-ing on the Service List attached hereto; and by mailing the original and 20 copics to the Secretary, United States Nuclear Regulatory Commission, Washington, D.C. 20555, Attention Chief, Docketing and Service Section; and by mailing one copy each to the other persons listed on the attached Service List by Regular United States 1b11, First Class, Postage Prepaid, on the 15th day of May, 1976.

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MICHAEL R. GALLAGHER /

SERVICE LIST James B. Davis, Esq.

Director of Law 213 City llall Department of Law Cleveland,, Ohio 44114 -

Robert D. Ilart, Es'q.

First Assistant, Director of Law 213~ City llall ,

Cleveland, Ohio -44114 Douglas V. Rigler, Esq.

Chairman Atomic Safety & Licensing Board Panel Foley, Lardner, IIollabaugh & Jacobs 815 Connecticut Avenue,.N.W.

Washington, D. C.

Ivan W. Smith, Esq.

Atomic Safety & Licensing Board Panel U.S. Nuclear Regulatory Com:nission Washington, D. C. 20555 John M. Frysiak,,Esq.

. Atomic Safety & Licensing Board Panel U.S. Nucicar Regulatory Commission Washington,-D. C. 20555 Cerald Charnof f, Esq.'

Wm. Bradford Reynolds, Esq.

Shau, Pittman, Potts & Trowbridge 1800 M. Street, N.W.

Washington, D. C. 20036 Mr. Chase R. Stephens

, Docketing & Service Section U.S. Nuclear Regulatory Commission

• 1717 11 Street, N.W.

Washington, D.C. 20555 f

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Donald 11. Itauser, Esq.

Corporate Solicitor -

The Cleveland Elcetric Illuminating Company .

Post Office Box 5000 Clevela.nd, Ohio 44101

' John Lansdale, Jr., Esq.

Cox, Langford & Broten 21 Dupont Circle, N.U.

Washington, D. C. 20036 -

Reuben Coldberg, Esq.

David C. Iljelmfelt, Esq. '

1700 Pennsylvania Avenue, N.W.

Suite 550 , ..,

Washington,'D. C. 20006 ,

Alan S. Posenthal, Chairman Atomic Safety and Licensing Appeals Board U.S. Nucicar Regulatory Co= mission Washington, D. C. 20555 q Dr. John II. Euch Dr. Laurence K. Quarles

' Atcaic Safety and Licensing Appeals Board U.S. l'ucicar Regulatory Com:sission Unchington, D. C. 20555 . i >v :==-  :: >

llovard K. Shapar, Esq.

E):ecutive Legal Director U.S. Nucicar Regulatorf Cocaission Washington, D. C. 20555

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Mr. Frank U. Karas, Chief Public Proceedings Branch Office of the Secretary U.S. Nuclear Regulatory Co=aission Uashington, D. C. 20555 Abraham Braitman, Esq.

Office of Antitrust & Indemnity

! U.S. Nucicar Regulatory Co=aission l Uashington, D. C. 20555 I -

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Frank R. C1okey, Esq.

Special Assistant Attorney General ,

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- Towna House Aparte.ents, Roora 219 Harrisburg, Pennsylvania 17105 - -.. .:.

Edward A. Matto, Esq.

Assistant Attorney Ceneral Chief, Antitrust Section a m. i m 30 East Broad Street, 15th Floor Coltnbus, Ohio 43215 .

Richard S. Sal:x.an, Chairman .

Atomic Safety and Licensing Appeals Doard U.S. Nuclear Regulatory Co:nission Washinston, D. C. 20555

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Michael C. Farrar Dr. U. Reed Johnson Atomic Safety and Licensing Appeals Board s

U.S. Nuclear Regulatory Corraission Uashington, D. C. 20555

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Andrew F. Popper, Esq.

Office of the Exacutive Legal Director

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U.S. Muclear Regulatory Coc ission Washington, D. C. 20555 Benjamin 11. Vogler, Esq. ~

Joseph Rutberg, Esq.

Robert J. Verdisco, Esq.

Roy P. Lessy, Jr., Esq. .

Office of the Ceneral Counsel Regulation

. U.S. Nuclear Regulatory Connission Uashington, D. C. 20555 Helvin C. Berger, Esq..

Joseph J. Saunders, Esq.

Steven H. Charno, Esq.

• David A. Lechic, Esq.

Janet R. Urban, Esq. 3

• Ruth Crecuspan Bell, Esq.

Antitrust Division Department of Justice Post Office Bo:: 7513 - "

Machington, D. C. 20044 - -

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. Christopher R. Sc h raff, Esq. ,

Assistant' Attorneys General Enviro:r:: ental Law Section 361 East Broad Street, 8th Floor Colu:: bus, Ohio 43215 Thomas J. Munsch, Jr., Esq._

General Attorney Duquesne Light Company 435 Sixth Avenue PittsburS h, Pennsylvania 15219 Joseph Rieser, Esq. .

Reed, Smith, Shaw & licClay -

Suite 440 1155 Fifteenth Street, II. J.

Washington, D. C. 20005 Terrance H. Eenbou, Esq. -

Uinthrop, Sti:ason, Putnan & Roberts 40 Wall Street

!!cu York, Ucu York 10005 Uallace L. Duncan, Esq.

Jon T. Brown, Esq.

Duncan, Browa, Ucinberg & Paluer 1700 Pennsylvania Avenue, N.W.

Uashington, D. C. 20006 Robert P. Mone, Esq.

George, Greck, Iting, McMchon & McConnaughey Colunbus Center 100 East Broad Street Columbus, Chio 43215 David IIcHaill Olds, Esq. .

John Heu. Crc =cr, Esq. -

Uillica S. Lerach, Esq.

Reed, Snith, Shau & IIcClay Post Office Box 2009 Pittsburgh, Pennsylvanin' 15230 .

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John C. Engle, President . .

A12-0 Inc.

. Municipal Building ,

20 High Street ,

Hamilton, Ohio 45012

• Victor F. Creensinde, Jr., Esq.

Principal Staff Counsel The Clevpland Electric Illuainating Compa,ny. .-. .. ,_

, Post office Eox 5000 -

Cleveland, Ohio 44101 - -

Lee A. Rau, Esq. -

Joseph A. Rieser, Jr., Esq. , ,

. Reed, Smith, Shaw & McClay , . . . . . , . . . . . , , , . , , , . . , ._ ,,. ,

Suite 404

. Madison-Duilding --

Washington, D. C. 20005 .

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Leslie Henry, Esq. '

Michael M. Eriley, Esq. , _ _ . . ..a. .

Roger P. Klce, Esq. '

Fuller, Henry, Hodge & Snyder 300 Undison Avenue .

Toledo, Ohio 43604 .

Pcnnsylvania Poker. Company . . . . . , . . . . . . . . . .. .,m,,,,,,....,,,

" One East Washington-Street - , , , . . . , , . , , .

Ucw Castic, Pennsylvania 15103 Eliza'beth'S. Bokers, Esq.

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Chairman Atomic Safety & Licensing Board

U.S. Nuclear Regulatory, Commission -

Washington, D. C. 20555 ,

Eduard Luton, Esq., Member

. Ik Atomic Safety & Licensing Board .- -

U.S. Nuc1 car Regulatory C,ommission - '

Washington, D.C. 20555 ,

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Thoraas U. ncilly, Esq. , Member . -

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-l Atomic Safety & Licensing Board -

U.S. Nuc.lcar Regulatory Comnission '

Unshington, D. C. 20555 l Secretary U. S. Nuclear Regulatory Commission Washington, D. c. 20555  ;

Attn: Chief, Docketing and Service Section

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