ML19323A574

Motion to Compel Electric Util Industry Testimonial Antitrust Analyses Prepared by NRC Expert Economic Witness N Lerner Re Midland Proceeding.Urges Production Per Prior Rulings,Subj to Encl Protective Order.W/Certificate of Svc

ML19323A574
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	03/27/1980
From:	Franklin W BAKER & BOTTS, HOUSTON LIGHTING & POWER CO., LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19323A569	List: ML19323A568 ML19323A570 ML19323A571 ML19323A572 ML19323A574
References
NUDOCS 8004210400
Download: ML19323A574 (14)

Text

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i () f UNITED STATES OF AMERICA  !

NUCLEAR REGULATORY COMMISSION  !

BEFORE THE ATOMIC SAFETY AND LICENSING BOARD f

In the Matter of )  ;

}

HOUSTON LIGHTING & POWER COMPANY ) Docket Nos. 50-498A l et al. ) 50-499A

)

(South Texas Project, Units 1 ) i and 2) )  ;

)  !

) i TEXAS UTILITIES GENERATING COMPANY ) Docket Nos. 50-445A l

) 50-446A i (Comanche Peak Steam Electric ) l Station, Units 1 and 2) )  !

i

MOTION OF HOUSTON LIGHTING & POWER COMPANY i i TO COMPEL PRODUCTION OF ANTITRUST ANALYSES l OF THE ELECTRIC UTILITY INDUSTRY PREPARED l BY NRC STAFF'S EXPERT ECONOMIC WITNESS I

Pursuant to 10 CFR S 2.740 (f) , Houston Lighting E' j Power Company (" Houston") moves to compel production, sub-ject to an appropriate protective order, of certain antitrust j l

analyses of the electric utility industry prepared by Dr.  :

Norman Lerner, the NRC Staff's expert economic witness.  !

Dr. Lerner revealed, during his initial deposition, i

that he was retained by. the NRC Staff in the Consumers Power Company - (Midland) antitrust proceeding to analyze the j economic and competitive effects of various settlement offers.1/

Dr. Lerner prepared such' analyses, which constitute his only 4

prior work in an antitrust context in the electric utility industry.

, 1/ Deposition of. Dr. Norman Lerner, July- 19, 1979, at 13, 28.

800.4210400 ,

7 Thus, Dr. Lerner's Midland work offers a unique and  !

important opportunity for insight into his views of the  ;

competitive structure and antitrust economics of the electric utility industry. Moreover, while Houston can j ask and has asked Dr. Lerner in deposition about the econoaic principles he will apply here, his work in the Midland case l f

presents the only opportunity to see how he has applied [

these principles in this industry and to test whether he will depart from that prior application in this case.

1 The NRC Staff has declined to produce Dr. Lerner's )

analyses, however, and has taken the position in informal  ;

l discussions with Houston that these analyses are protected j from discovery as settlement documents.  ! A Board Order, permitting Houston under appropriate safeguards to obtain l the documents it requires for a thorough examination of Dr. Lerner's work, is required to break this impasse.

l The documents Houston seeks fall squ:Iely with the Board's  !

prior rulings commanding a broad scope of discovery from expert witnesses:

2/ On March 26, 1980, representatives of Houston and of TU inspected documents at Dr. Lerner's offices. At that production, counsel for.the Staff took the position that such production was r otected by an oral ruling made in the course of a March 21, 1980, conference call. (See Exhibit A, attached hereto.) This conference call con-cerned the Staff's motion to quash TU's subpoena to Mr.

Rodney Frame; Houston did not participate in this. call.

~The Board's March 20, 1980 Order concerning Mr. Frame's subpoena does not address the scope of prctection to be accorded Dr. Lerner's Midland work.

1 I

i

I Various steps in the analyses and thinking processes:of expert witnesses in arriving at i- their conclusions are discoverable, as bearing upon the bases for their opinions'as well as their credibility as witnesses. . . . Counsel must remember that experts:are almost unique in being permitted to testify as to their opinions, as distinguished from fact testimony. In

. return, all factors which could condition or l affect these opinions are properly the subject of cross-examination, and hence discovery in I advance of trial.

Order Granting Production of Draft Testimony of Expert

. Witness, October 23, 1979, at 2. Here, the Staff has refused to produce the very items of Dr. Lerner's prior work having the greatest relevance to the development of his testimony in this proceeding.

We are aware of no reason why the settlement privilege claimed by the Staff simply should bar the production of Dr. Lerner's Midland documents here. To be sure, documents relating to settlement may well be sheltered from discovery in the proceeding in which they are generated. But that is hardly pertinent here: this is a different proceeding.

1 Save for Dr. Lerner's antitrust analyses,-the Midland pro-ceeding bears no relationship to this proceeding. No private party in Midland is a party here. The Midland case.

is in fact settled; 3/ disclosure cannot affect that case at all. In short,. limited disclosure of Dr. Lerner's.

i Midland work subject to appropriate safeguards will' advance the search for truth'here and plainly is warranted.

3/ See Joint Motion of Consumers Power Company and Intervenors

, Eup::orting Imposition'of License ~. Conditions,. Consumers' Power-Comgaln (Midland Plant, Units l' and - 2) ,'NRC Docket Nos.

E WA,L50-330A, September.25, 1979.

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In requesting Dr. Lerner's antitrust analyses, Houston l is willing to accommodate any legitimate interest the l Staff and Dr. Lerner have with respect to the confidentiality of his prior work. Attached to this motion is a proposed protective order of confidentiality. This order would i restrict access to Dr. Lerner's Midland work solely to attorneys in this case, specifically excluding the ~ parties themselves ,-

outside consultants, and both fact and expert witnesses, and would require that any deposition or testimony in connection with these documents be taken under seal. This protective i

order is based on the Stipulation to Protective Order with respect to the Gulf States Utilities' documents, as executed by the NRC Staff and approved by the Board on July 23, 1979.

In this way, any conceivable interest in settlement con-fidentiality will be maintained while Houston obtains the materials essential for a thorough examination of Dr. Lerner.

Accordingly, Houston requests that the Board order the NRC Staff and Dr. Norman Lerner produce, subject to the attached protective order and any amendments thereto as may be negotiated by the parties, all antitrust analyses Dr.

Lerner performed for the Staff in connection with the Midland proceeding.

Respectfully submitted,

,A OF COUNSEL:

11 am . Fpanklin Attorney for Houston Lighting

& Power Company BAKER AND BOTTS 3000 One Shell Plaza Houston, Texas 77002 LOWENSTEIN, NEWMAN, REIS, AXELRAD & TOLL 1205 Connecticut, Avenue, NW Washington,:DC 20036 March 27, 1980

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t UNITED STATES OF AMERICA  !

NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD ,

In the Matter of )

) I HOUSTON LIGHTING & POWER COMPANY ) Docket Nos. 50-498A  !

et al. ) 50 -499A  !

) I (South Texas Project, Units 1 )  :

and 2) )  !

. ) l

)  !

TEXAS UTILITIES GENERATING COMPANY ) Docket Nos. 50-445A i

) 50-44.6A  !

(Comanche Peak Steam Electric )  !

Station, Units 1 and 2) ) l l

PROTECTIVE ORDER OF CONFIDENTIALITY  :

. I WHEREAS, by subpoena of the Atomic Safety and Licensing .

l Board (Licensing Board") in these proceedings dated February 1, i l

1980, Transcomm, Inc. ("Transcomm") and the NRC Staff's expert i witness Dr. Norman Lerner were, at the request of Houston  !

Lighting & Power Company pursuant to 10 C.F.R. S 2.720, com-

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manded to make available for inspection and copying the docu- l ments described in the Schedule attached to said subpoena; l AND, WHEREAS certain of the documents called for in the i

Schedul(- are confidential antitrust analyses Dr. Lerner and i

Transcomm, Inc. performed for the NRC Staff in connection with the Consumers Power Company (Midland) antitrust proceeding i

settlement negotiations (hereinafter called _" Midland dccuments");-

l AND,_WHEREAS.it appears that good cause exists for the

, i imposition of terms.and conditions for compliance with said subpoena under 10 C.F.R. SS 2.720 (f) ' and 2.740 (c) as set

! forth below; i

l l

IT IS HEREBY ORDERED THAT: j

1. Transcomm shall immediately make available for inspec- l tion and copying all Midland docaments required for production ,

pursuant to the aforementioned subpoena, subject to the terms l and conditions below. . i

2. The parties shall reimburse Transcomm for its actual  !

i copying costs for each copy made at the party's request of a )

' I document produced in response to this subpoena.  ;

i

3. As used herein, " confidential settlement information" -

is information which Transcomm or Dr. Lerner received solely in i I

the performance of their work for the NRC Staff in connection

with the Consumers Power Company (Midland) antitrust proceeding, l

. 1 NRC Docket Nos. 50-329A and 50-330A, or any analyses prepared by l 1

Transcamm or Dr. Lerner in connection with the Midland settlement. ,

r Any Midland document (as defined above) is deemed to contain con-fidential settlement informatio't.

4. Any documents produced in response to the subpoena of February 1, 1980, which are asserted by Transcomm or the NRC Staff to contain or constitute such tonfidential settlement' information shall be so designated in writing and shall be segregated from other information being produced. Documents shall be clear tv and prominently marked on their f ace with the legend: " MIDLAND CONFIDENTIAL SETTLEMENT INFORMATION, SUBJECT.

TO PROTECTIVE ORDER," or a comparable notice. As used herein,

" document"'shall; include all contents of any portion of any 4

document so designated. Only>in, camera disclosure'of such docu-mentsoshall be made at any hearing-before the Nuclear Regulatory n

,- , o . . _ - - _

l Commission (" Commission"), the Licensing Board or the officer presiding over this proceeding. .

5. . Confidential documents produced in accordance with the -

provisions of paragraph 4 above shall not be disclosed to any person other than: (i) counsel for parties to this proceeding, j including necessary paralegal, secretarial and clerical personnel  !

! assisting such counsel; (ii) qualified persons taking testimony }

involving such documents or information and necessary stenographic l and clerical personnel thereof; and (iii) the Commission, the Licensing Board, the presiding officer, or the Commission Staff. i

6. Under no circumstances shall confidential documents pro- l duced in accordance with the provisions of paragraph 4 above be l l

disclosed to (i) nongovernmental parties to the Midland anti- '

trust proceeding or their independent consultants and technical experts and their staff and (ii) independent consultants and technical experts and their staff who are engaged directly in this litigation. No person designated in paragraph 5 (i) shall be deemed an independent consultant and technical expert for-the purposes of this paragraph.

7. Confidential settlement information submitted in accord-ance with the provisions of pragraph 4 above shall not be made available to any person designated in paragraph 5 (i) and (ii) unless they shall have first read this Order and shall have agreed, in writing:. (i) to be bound by the terms thereof; (ii) not to reveal such confidential settlement information to anyone I

other than~another person designated in paragraph.5; (iii) not to reveal-such confidential settlement information to any person designated in paragraph 6; and '(iv) to utilize such confidential T

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settlement information solely for purposes of this proceeding.  !

8. Upon a showing of good cause, this Protective Order j i

may be amended by agreement, or if the Commission or the {

i.

j Licensing Board so orders, so that access to or dissemination of documents designated confidential shall be made to persons not l included in paragraph 5 above. If so, such documents shall be i accessible to or disseminated to such other persons only upon l f

the conditions and obligations of this Order. Such persons i shall agree in writing to be bound thereby prior to such access l t

or dissemination. Upon the request of any party or by the Board upon its own motion, the NRC Staff shall make an appropriate ,

showing of confidentiality for specific information or documents as to which it has claimed confidentiality. If the Board finds that the NRC Staff has failed to make such a showing, such information or documents shall not be treated as confidential i under the terms of this Order.  :

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9. Any confidential document shall be submitted to the Commission, Licensing Board or the presiding officer only in connection with a motion or other procedure within the purview of this proceeding, and shall be submitted under seal in the manner described in paragraph 4 above. Any portion of a trans-  ;

cript in connection with this proceeding containing any confi-dential document submitted pursuant to paragraph 4 above shall be bound separately and filed under seal. When any confidential documents submitted in accordance with paragraph 4 above is

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included in an authorized transcript of a deposition or exhibits-thereto, arrangements shall be made with the court reporter s

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i taking the deposition to bind such confidential portions and separately label then "MIDIJND CONFIDENTIAL SETTLEMENT INFORMATION, i i

SUBJECT TO PROTECTIVE ORDER. " Before a court reporter receives l t

or a witness examines any such documents, he or she will have j first read this Order and shall have agreed in writing to be bound by the terms thereof. Copies of each such signed agree-  ;

i ment shall be provided to the NRC Staff.

10. Any document produced and designated as confidential I l

3 pursuant to paragraph 4 above shall be subject to the provisions  ;

1 of 10 C.F.R. S 2.790. l

)

11. If confidential documente produced in accordance with i

, paragraph 4 are disclosed to any person other than in the manner authorized by this Order, the person responsible for the disclo-sure shall immediately bring all pertinent facts relating to such disclosure to the attention of the NRC Staff and the. pre-siding officer and make every effort to prevent further disclo-sure by him or by the person to whom the document was-improperly ,

disclosed.

12. Nothing in this Order shall abridge the right of any person to seek judicial review or to pursue other appropriate judicial action with respect to the matters contained herein.

13. Upon final termination of this proceeding, each person 4

subject to this Order shall assemble and return to.the NRC Staff all confidential documents as well as.all other documents con-taining confidential settlement information produced in accord-ance with paragraph 4 above, including.all copies'of such matter which may have been'made, but not including copies containing

.o

e notes or other attorney's work product that may have been placed thereon by counsel for the receiving party. All copies containing notes or other attorney's work produce shall be des-troyed, and certification of same shall be made to the NRC Staff. Receipt of material returned to the NRC Staff shall be I

acknowledged in writing. This paragraph shall not apply to the commission, the Board, the presiding officer and the Commission Staff.  ;

Good cause appearing therefore, it is so ordered.

For the Atomic Safety and Licensing Board Executed at Bethesda, Maryland on i

l i

9

.e .. o i UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSIO'l BEFORE THE ATOMIC SAFETY AND LICENSING BOAPD In the Matter of )

)

HOUSTON LIGHTING & POWER ) Docket Nos. 50-498A COMPANY, et al. ) 50-499A

)

(South Texas Project, )

Units 1 and 2) )

)

)

TEXAS UTILITIES GENERATING ) Docket Nos. 50-445A COMPANY, et'al. ) 50-446A

)

(Comanche Peak Steam Electric )

Station, Units 1 and 2)

CERTIFICATE OF SERVICE I HEREBY CERTIFY that copies of the foregoing:

1. Letter to the Board from William J. Franklin

2. Motion of Houston Lighting & Power Company to Compel Production by NRC Staff of Testimonial Questions Answered by Expert Witness Robert H. Hartley

3. Motion of Houston Lighting & Power Company to Compel Production of Antitrust Analyses of the Electric Utility Industry Prepared by NRC Staff's Expert Economic Witness

4. Protective Order of Confidentiality all dated March 27, 1980 were served upon the following persons by hand *, or by deposit in the United States Mail, first class postage prepaid, this 27th day of March,1980.

0 Am William d. Franklin l

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• Marshall E. Millor, Esquira

• Fredric D. Chantnia, Egquira U.S. Nuclear Regulatory Commission Michael B. Blume, Esquire s Washington, D.C. 20555 Ann P. Hodgdon, Esquire .

U.S. Nuclear Regulatory Commission l

• Michael L. Glaser, Esquire Washington, D.C. 20555 1150 17th Street, N.W.

Washington, D.C. 20555 Roff Hardy Chairman and Chief Executive .

• Sheldon J. Wolfe, Esquire Officer U.S. Nuclear Regulatory Commission Central Power and Light Company Washington, D.C. 20555 Post Office Box 2121  :

Corpus Christi, Texas 78403 Atomic Safety and Licensing .

Appeal Board Panel G.K. Spruce, General Manager  !

U.S. Nuclear Regulatory Commission City Public Service Board Washington, D.C. 20555 Post Office Box 1771 San Antonio, Texas 78203 -

• Chase R. Stephens, Supervisor (20)

Docketing and Service Branch Mr. Perry G. Brittain "

U.S. Nuclear Regulatory Commission President ,

Washington, D.C. 20555 Texas Utilities Generating Company 2001 Bryan Tower Mr. Jarome D. Saltzman Dallas, Texas 75201  :

Chief, Antitrust and Indemnity Group G.W. Oprea, Jr.

U.S. Nuclear Regulatory Commission Executive Vice President Washington, D.C. 20555 Houston Lighting & Power Company '

Post Office Box 1700 i J. Irion Worsham, Esquire Houston, Texas 77001 Merlyn D. Sampels, Esquire i Spencer C. Relyea, Esquire R.L. Hancock, Director ,

Worsham, Forsyth & Sampels City of Austin Electric Utility l 2001 Bryan Tower, Suite 2500 Post Office Box 1086 ,

Dallas, Texas 75201 Austin, Texas 78767 l

Jon C. Wood, Esquire Joseph Gallo, Esquire Matthews, Nowlin, Macfarlane Robert H. Loeffler, Esquire j

& Barrett David M. Stahl, Esquire i 1500 Alamo National Building Isham, Lincoln & Beale  ;

San Antonio, Texas 78205 1120 Connecticut Avenue, Suite 325 Washington, D.C. 20036 Charles G. Thrash, Jr., Esquire l E.W. Barnett, Esquire Michael I. Miller, Esquire Theodore F. Weiss, Esquire James A. Carney, Esquire J. Gregory Copeland, Esquire Sarah Welling, Esquire l Baker & Botts Martha E. Gibbs, Esquire 3000 One Shell Plaza Isham, Lincoln & Beale Houston, Texas 77002 One First National Plaza i Suite 4200 R. Gordon Gooch, Esquire Chicago, Illinois 60603 Steven R. Hunsicker, Esquire Baker & Botts 1701 Pennsylvania Avenue Washington, D.C. 20006 -

I

M I,..a 1 i

i  !

L Don R. Butler, Esquire - David A. Dopsovic, Esquire l 211 East. Seventh Street Frederick H. Parmenter, Esquire  !

,~ Austin,DTexas 78701- Susan B. Cyphert, Esquire  !

Nancy A.' Luque, Esquire [

i Mr. William C. Price Robert Fabrikant, Esquire  !

' Contral Power & Light Company Energy Section Antitrust Division  !

L' Post Office Box 2121 U.S. Department of Justice  !

l Corpus Christi, Texas 78403 P.O. Box 14141 i Washington, D.C. 20044  !

Holman King l l.Mr..G.

W20t Texas Utilities Company Morgan' Hunter, Esquire i f Post Office Box 841 Bill D. St.' Clair, Esquire  :

i- Abilene, Texas 79604 McGinnis, Lockridge & Kilgore

! Fifth Floor Jerry L. Harris, Esquire Texas State Bank Building l Richard C. Balough, Esquire 900 Congress Avenue  !

i City of Austin Austin, Texas 78701  ;

l' Post Office Box 1088 Austin, Texas 787G7 W.S. Robson '

i General Manager  :

Joseph B. Knotts, Jr., Esquire South Texas Electric Cooperative, j Nicholas S. Reynolds, Esquire i Inc. i l C. Dannis Ahearn, Esquire Route 6, Building 102 l l

-Dabavoise & Liberman Victoria Regional Airport  ;

i 1200 Seventeenth Street, N.W. Victoria, Texas 77901 l Washington, D.C. 20036 l Robert C. McDiarmid, Esquire l 3

' Don H. Davidson George Spiegel, Esquire j City Manager Robert A. Jablon, Esquire ,

City of Austin Marc-R. Poirier, Esquire l Spiegel & McDiarmid

P.O. Box. 1088 i Austin, Texas 78767 2600 Virginia Avenue, N.W.  !

L Suite 312 Jay Galt, Esquire Washington, D.C. 20037-Looney, Nichols, Johnson & Hays

, 219 Couch Drive- Kevin B. Pratt .  !

Oklchoma City, Oklahoma 73102 Texas Attorney General's Office l Post Office Box 12548 '

Knolant J. Plucknett Austin, Texas 78711 Exscutive Director Committee on Power for the South- . William H._ Burchette, Esquir6 wast, Inc. Frederick'H. Ritts, Esquire 5541 East'Skelly. Drive. Law Offices of Northcutt Ely-4 LTulsa, Oklahoma 74135 Watergate 600 Building John W. Davidson,' Esquire.

Scwtell, Goode, Davidson &LTioili ' Tom W. Gregg, Esquire 1100 San Antonio Savings Building '

Post Office Box Drawer 1032 San Antonio, Texas 78205 San Angelo, Texas 76902-

. Douglas F.. John, Esquire Leland F. Leatherman,' Esquire McDermott, Will and Emery- McMath, Leatherman & Woods,fP.A.

Il01' Connecticut Avenue, N.W.-

711 West Third: Street

'Suiteil201 -

Little-Rock,-Arkansas 72201

- Washington, D.C.;20036-i

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