ML19331A711

Comments on ASLB Oral Argument Re Saginaw Intervenors' Request to Reopen Record.Challenges Bechtel Ability Re Const & Credibility of QA Practices.Proof of Svc Encl

ML19331A711
Person / Time
Site:	Midland
Issue date:	12/02/1974
From:	Cherry M CHERRY, M.M./CHERRY, FLYNN & KANTER, Saginaw Intervenor
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19331A707	List: ML19331A705 ML19331A711
References
ISSUANCES-SC, NUDOCS 8007210710
Download: ML19331A711 (16)

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2:2?.'2 THC .c.W IC SAFETY A';D LICENSING 3 PARD la the Matter Of: )

-) Docket Nos. CPPR-81 Concumers Power Company ) CPPR-82

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(Midland Plants 1 ana 2) ') Show Cause r..'=, . . . - . - .* S. .p q,.g. c.3 4 . v bg,. e=sgt ,, ys.

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~cciinc.w _1. . 2 3 those cc:=ents :s furtScr nuppor"

. a.e e s t a.: .nc, c.. . co reopen and racci.uidar d: cision b ::t

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C.:e Lau: GO/2rning Recocnina Of The Record 7 7 ALAB-235 (RAI-74-10, 645,_ Consumers Power Co.,

.idland ':tabar 17, 1974) the Appeal Board made clear the

. allowing points:

1. The 6aginaw motion was not a dilatory tactic .

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! . 3. sing la. perm:5.i. ate relief. Sinca, as the Appc 1 20 r,1

..sid, "the power to reconsider is inherent in the power to 1.uide," (ALAB-235 at p. 646) the Licensing Board has juris-2iction to entertain the request;

2. The. Appeal Board had before.it a copy of the

.0cion tendered to :.a Licensing Board together with a copy of

..2 comp'laint. S :.r. _ : che Appeal Board viewed these documents 4 ma-good cause for en~enlargenent of time to file exceptions to

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the Licensi: c 30trd'; initial decisions concluding the shou cauce hearing, it therefoca follows that the Appeal Board thought the request ce;.orted s'. ...e complaint had substance. This issue ass nccassarily h:2:re t'. - Appeal Board inasmuch as it viewed those p.1pers as tentamount to good cause for the extension of time.

".Jhile of course the Appeal Board did not deal with the ultima:e quactica of rc peninr. it is clear tha if the Appeal Board h:d

? ; ; ri ' t c .2 at:^ -tions of the other parties (repeated at '-

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. Org:r27.:2, :r.1 : ..e paper had no mcrit, the Appeal ?c,-i

.alf c':ficualy nc: '.c'a found that gced cause 2::isted. E:;r, wA3-235, it. c a; g .1j..a.i t , stands as a decision cha: cha pe ti;_-..

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ecp ar. '. a n cri- ~ -ie validity requirin? tio et'.ier part! -

. 2nn: t'.e r2:2rancu to be drawn therefrem;

3. The Appeal Board also held in ALAB-235 at p. 64:

that

'Whether applicant's.new allegations about Bechtel's inadequate performance at Palisades should be taken into account in evaluating the atidence Of that organization's performance at Midland is a matter wnich can not be dis-missed out of hand as a dilatory. tactic."

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at cau ..geoci Jeu.e was saying, it seems to uo, as that c.w

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m.an of the connactica between the Palisades litigation-and th:

_dland lawsuit can not be determined without a-hearing inquiring into the underlying facts.. This is made abundantly clear by the zaal argument which contained no inquiry into the underlying facts oth2r than vague statements by counsel for,the various urties -that the Talisades litigation concerns a dI*ferent set

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of rules.: anst~is cicar, as obviously noted by the Appeal Board, is tnat the  :'. sades litigation indicates that Bechtel

.may have v: clated rdlas concerning QA and for purposes of this

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record it does. net nn.:ar wncthe. the rules Pechtel violated were different than :n2 rules now applicable to Midland. This is because the viclnti:n is a centinuing cne going to the v:ry heart of unchtel's bonestv and desire to build a c.ood facili:.-

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2nd taa caange in ru.23 gcVerning CA, if any, raises issues of

-r;v2 concere. since the Ob'igation upon Sachtel unlar the

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3echtel did not neet tSe QA rules in offect at Palisadoc

. 23s invo;eed ana _ess cumberscme than th2 ruits preAentir y plienble to Miditris givine rise to the arira t'ric rset- -

tion that 3echtal will have difficulty in meeting rules even

.:are c:r 1:ated.

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It is clear from both the logic of the situation and

-Se relevant ALA3 decisions that the petition to reopen repre-

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-Mnnge the result belcw. As the Appeal Board indicated in

' AB-235, at p. 648, r.6, the law governing reopening has twc iscets. First, it must be newly discovered evidence relevant

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the issues, and seccnd, the allegations concerning the newly

_iccovered svidence. #f true, would produce a different result

'ba~n would have.been reacheu initially had it been considere'd.

This petition meets those_ tests.

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71rce, the idence is newly discovered. The petition to reopen demonstrat..: that it was filed promptly upon discovery of the filing of the nplaint, and on its face zh2 newly dis-covered evidenc7 ic -^'avant in that it attacks Bechtel's honesty and responsibility ir~ connection with building a QA' facility.

That is all that is .ecded to show relevancy. Were it otherwise, t*w Licencing Board ve"1d be making a factual finding on the

?lation. ship af the isades complaint to the Midland QA, whit-

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'in net de n the en evidentiary hearing. The only :ssue

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.2 .'alic:d:: litir- in can have no effect en Midland and no-

n counsci for t?- - 'aer parties accerted that propcsition.

a r3 c ral a r 7 u.ac n t er. Show cause. Tr. 11-12 ("2 don't thi..k ::

.. 21, 12. ;u ., 10-11 cnamination of facts may show relevancj);

cr.d Tr. 27, lines 21-22 (examination of f acts wot'.lo procuce La visibili., of relevancy and materiality). Thus no one took th;

' ;ition at the oral. argument that the Palisades litigation eaer all circumstances was irrelevant and that, it seems to docila; th fi_;; in2ue in our favor.

Second,-it is clear that if the allegations of the J..ition to reopen are correct, a different result would obtain, sad thus the petition' meets the requirement of the Appeal Board's rule in ALAS-235, p. 543 as well as in ALAB-227 (RAI-74-9, at

p. 119, 3ailly S :ation , September 5, 1974.) Thus the petition

?:12.y mc~ cts the te t: S? reopening.

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Cn :his su; -..:t we would effer two additional procc-dents. Firsts the r-k rionship between CA and QC in plants cwned'and 0; crated ay sne same applicant are relevant. This is true not only beca e the oo gulatory Staff analyzes QA in thic matter 'e'00ry sciaty evaluation of the Regulatory Staff ,

refers to the perform $nce of an applicant on all matters includ-ing QA in the event th:: the applicant has been involved in a prire nucle._ 7:ver p ' .:nt) . See safety evaluatione concerning L'id;.and , r. ion and kiL3 rim 2. Similarly :ne applichnts rely ca c.aeir prior alstory a. 4videnced by the fact that the PSAR's oi cne applicants in connection with Midland, Zion and Pilgrim 2

..i relica up:n :301:. 'g.i at earlier ,:ltn:c ar. : juctificati.~

_~;r a posi;cce finding af QA on the subsequent plants.

Second, thc case law generally and in connection wi.h

• hic deche" holds that CA in other plants ic relevant. Thus in

' ;.'.B - 1 0 5 ' U. 2 - 7 3 - 3 , 182, Midland, March 26, 1973; ALAB-123 sl-73-5, '31, Midland, May 18, 1973) the Appeal Board-held

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t the Licencing Board had been in error in not considering other there was a reasonable likelihood of future QA. The Appeal Board did not reverse because it said that no evidence ac.; been refused and the evidence the Appeal Board was direc, ting its comments to was the evidence of QA at Palisades which the Intervonors hcd tendered. ' Additionally, the Appeal Board's creent decision in the Seaver Valley case (ALAB-240, RAI-74-ll, a: p. , 1974) exprassly holds that the Licensing Board-should

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have considered.the :;plicant's quality assurance at another power plant almost ..esring the end of construction.

In fact, .aansel for Consu=crs admits the applicabili-ty of this precedent .t the oral argument transcript at 16-17.

• This precedent shouic dispose of the motion for the following reason. The main argument of the applicants here is that the

-Palisades QA is not relevant because it was perforced under a.

different sec of regulations (an argument which we think is fallacious). ~ven assuming the validity of that argu~ent, i-is disposed of by ALa3-240 (Beaver Valley) because tne plan:

• ' hose QA was considered relevant was a plant whose application

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was made to the AEC during a time when previeus OA rules. app!.:: 4 A final =ctter which we urge upon tha Licensiag sem .

as cuppert to recpen the decision is'the reopening of the Point redCh, Unit 2 record on the fuel densification issue. Tnore,

• will he recalled, the Appeal Board ordered a reopening o-

.c record under circumstances not dissimilar from those here aan the grounds that the fuel densification i.. o arose subse-

?nt to conclucier Of the proceedings and coulf pr:fuce :

alfferent result. See Wisconsin Electric Power, Point Beach,

" :it 2, ALAB-8 9 (RAI-73-1, Point Beach 2, January 5, 1973) and prior and subsequent decisions in that docket dealing

'vith reopening of the record on fuel densification issues, in-r:luding_but not limitad to ALAB-137 (RAI-73-7) ; see also ALAB-1~3, Vermont Yankee (PAI-73-7 at p. 520, July 25, 1973).

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Critinta'of-Oral Argument In Part A of these comments we have set forth what we believe to be the gov. ning 1.tw r rrounding recpening of the record. In Part C of these comments we set forth some of the

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more blatant facts of the Palisades lawsuit which must be in-vestigated, we believe,.upon a reopened hearing. !!cre 'te confir -

ourselves to direct response to the oral argument tranceript itualf. -

Cer review of this record in the prepar?'.lon of tnem.

comments leaves us (almost but not quite) speech 1 css as to how in the world the-Lizencing-Board could have h:1d Ln sr:.1 arp.-

rent with :un:21.fer all of the offending partia pr: raat .

manage to avoid asking any tough question during the entire or+1 s

argument.  ::Orcover, we are-distressed that almost at the opening at the or . .rgument (Tr. 7 at lines 6-7), the Board indicatedL acs willingness to avoid critical inquiry. At that citation the oard notes that all of the parties but Saginaw have opposed

+' opening the record. Of course all the parties but Saginaw would oppose reopening the record, since all of the other parcies are trying to keep their cover-up of the incredibly poor per-formance from ever seeing the light of day. That sentence is like having a-judge in a murder trial say that defendant opposes the sentence of hanging by the neck until he is[ dead. That sort of 3nalysis certainly won't get us anywhere and unfortunately-

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just undersecres our Ocntinual bcAlef in these proceedings that the Board has donc r.cnning but rubber-stamp whatever .t is that the utility and the R;;ulatory Staff can agree upon.*

a. Argument of Mr. Miller.

The most ".t can be said about Mr. Miller's argument is that he is not the* lawyer in charge of the prosecution of the complaint and doesn't want to pass upon another lawyer's word:

in the complaint (Tr. 11-12). Mr. Miller doesn't como to the roint at all and his arguments ring up the irrelevant curtain

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' collater ' estoppel. It doesn't matter whcihar the Rcgul -

tory Staff and Saginaw are parties to the Pailmtd99 litigation 21.- 1. doesn't matter that Welsarine, Universal, Ingersoll and Comoustion are not parties to this prccccding. The Lay 1; thether 'c'.at c litigation attacks the past 2nd pra: nt c3ility if 7echtel to perform proper QA. There'is no dispute over that.

The past history is relevant since it shows a continu~

ing course cf conduct. The present history is relavant because it shows that Bechtel is continuing its not so honest ways and

e violations disclosed at Palisades form a familiar but dis-couraging ring at Midland. A review of the type of QA viola-tions found at Midland will show that they are really a con-tinuation of the kinds found at Palisades--that is, failure to hsve appropriate organization and persons on the site and a

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• We certainly are awi.re that these comments are harsh, albeit made respectfully. Our problem is that. despite our wishes to che contrary, the adjudicatory process of the Atomic Energy Com-mission just is not working; and we hope that sooner than later someone does something about it.

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l failure to f;11ow ruloc, w.c./.:. vintage they may be, govern-ing QA.

Mr. Miller alleges that the Palisados litigation has

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no relevancy or materiality because the litigation deals with another nuclear poac: plant. Th argurent, of course, is not applicable here in light of the case law cited in "A" above.

Mr. Miller then goes on to say that there has been no willful violation at Palisades, a fact quite unimportant hora since Consumurs was fined for violation of the lcu, and then

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suggests (Tr. 3) that the lawsuit involves the f ail ora c f the

• abricator cf certain tubes -and cora intornnis. Mr. Miller ther tamarkably concludes that since the tubes were not designed or constructed by C whtel, Bechtel isn't invo i. vec la the: lawsu: .

What Mr. Miller fails to recogni?e was that it was nis client who sued Bechtel, thur involving them in the lawsuit, anc his clielt *tho alleged in the complaint that Bechtel had built

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a "dangc aus instrumentality."

Mr. Miller then proceeds to say that notwithstanding Consumers' allegation of negligence in the complaint, that is

?.trely a " lawyer's characterization" (Tr. 10) (although it is clear that it is his client's lawyer); that they don't know whether Bechtel will be guilty until the jury comes back (Tr. 11)

(although Mr. Miller does not assert that his client filed a frivolous lawsuit); and then at Tr. 11 through 14 Mr. Miller admits that he doesn't know what the precise facts are with

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respect to Bechtel's parformance in the QA area i. Tr . l? at lines 5-7), that he doecn ' t believe that the complaint alleges continu-ing negligence on tha part of Bechtel (Tr. 13, lines 13-20; and he is wrong), and then incredibly has the collosal nerve to say at Tr. 12, lines 22-25 that he doesn't know anything at Palisades which would raise questions about Bechtel's performance at Midland.

How can Mr. Miller's statement that he is not aware of anything be accepted .:n he has earlier admitted that he d20sn't havn any knowlad-=9 Incredibly, the "oerd misrod the -int .-d 217 net pursue it.

Moreover, all of Mr. Miller's assertions are inappil-cable for a reason additional to the reacion that he han ari. " - - -

ihat he ha3 nc knowledge about the complaint. The additionn'

.aason is that they are factual assertions which if relied upen by the Board will mean that the Board is making findinas of fact when all it should do, as we have pointed out in "A" above, .. c da .1 with the legal issue.

Finally, at Tr. 17, Mr. Miller tries to obfuscate the

uas once again (c;.d cpparently he succeeded since che Boara did not call him on it), that the Board should not reopen the hearing because it will have to try the Bechtel litigation. That is just " stuff and nonsense." The issue here is whether the allegations of Consumers made with the knowledge that the Federal Rulas do not permit a frivolous complaint, allegations that rechtel has been willfully negligent and that the negligence is

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continuing with respect to QA and at a time when he new QA rules are applicable, are relevant to Bechtel's performance at Midland. On a'r2cpened hearing Censumers vill ":.ve to demca-strate why the particular allegations of the complaint are not inconsistent with t"eir prior testi=cny en Bechtel end will have to demonstrate how they can continue to build the Midland facility with Bechtel in light of Consumers' view of the alle-gations disc: sed in the complaint. If Bechtel thereafter enters that re-rened hearing and chooses to dispuca the allc~

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qations, this 3 card still would not try that allcaa cion whic?.

deals with breach of contract and negligence as a claim for relief, but rather with the underlying cporati'en facts cs t. ,

effect the Atomic Energy Commission's regulations and ch: cc-tiauation of the Consumers-Bochtel team at Midland.

b. Arourent of Mr. Scoville.

Mr. Scoville first tells us that the cceplaint conte! r

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n: facts but just a series of conclusions (Tr. 13). Of course

'tr. Scoville gces on to deny that those conclusions are cerrcet.

c.ce again,-Ecchtel, as did Consumers in its oral argument, offers the reason for not reopening the record not that the allegationc of the litigation'are irrelevant as a matter of law to the Midland hearing (an argument which they can not support; but on the grounds-that because of the disputed facts in the

-Palisades litigation, the Licensing Board is precluded from ruling on the relevancy question until after a trial of the

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litigation. Once agcin the same " stuff and noncense" we heard from Mr'. Miller.*

Mr. Scoville makes no other point on the basic issu7 of materiality and relevance except to frighton the Board into the prepostercus fear that it will havo to try the Palisados litigation. Cf. the statement of chairman Glaser at'Tr.'20, lines 19-22.

c. Argumcat of Mr. Murray.

Mr. Murray offers several points.

1. The first point Mr. Murray c f f.::s 1; tho imp:.1__.

One that he hasn't read the complaint in ligh: of his stateman:

at Tr. 6 that the main problem with the licigacion is the Co.Veua-cien reactor.

2. Mr. Murray is inconsistent la that ne first says that the litigation is irrelevant to Midland but once it is : -

it will aemonstrate that Consumers is a good company because .

• sued a bad company (1,e., Bechtel) (Tr. 26).

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3. Mr. Murray asserts without proof 'that the present

-J past QA requirements at Palisades are characteristically different than they are at Midland. Yet Mr. Murray doesn't analyze those QA regulations, and if he did, he would find that the Commission when it adopted the most recentAppendiEB QA regulations indicated that, far from being a drastic departure

• We would commend to the Board a perusal of the 224-pages of interrogatories served by Bechtel on Consumers which in and of themselves demonstra*, that the lawsuit is serious and that-thereL is basis'for the lawsuit vis-a-vis Bechtel.

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from prior practice,/O as in large part a codification of prior practice. See statement of Consideration in Adopting 10 C.F.R., Part 50, Appendix B. That fact simply destroyn the anti-relevancy argument.

4. Finally, Mr. Murray comes full circle and argues (Tr. 27) that in fact there is relevancy which can not be dis-cerned until after you see some of the facts. This admission by Mr. Murray supports the motion to reopen, since Mr. 'lurrav na; concluded th:t as a matter of law the Scard can z. : f;.rl tha; the Palisades litigation is irrelevant.

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By and large we found the oral 'rgum:n: tis t ; :2 2 ir.g . :

incomplete frem all aspects and we do .ct '21f.0c: -hat t '. : 7c : '

made the kind of inquiry which it should have made. Perhaps tne Board believes it has no obligation in'this regard.

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The Complaint As we stated in our petition to reopen the record where we set forth the general allegations of the complaint, it is clear that the complaint challenges history (that is, Bechtel's willful and wanton construction of the facility)

• but it also challenges Bechtel's present and ongoing failure properly to furnish repair work and materials. The following

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pages of the complaint have allegations of centinuing peor QA work applicable to Bechtel:

Page 17 paragraph 58

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Page 17 paragraph 59 Page 18 paragraph 63 Page 20 paragraph 67 Page 21 paragraphs 73 and 74 Page 22 paragraph 77 (willful and wanton)

Pages 22 and 23 paragraph 91 lur.;. ,. r.c.'j- d_ c m ..

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Page 23 paragraph 84 Page 25 paragraphs 92 and 93 .

Page 26 paragraphs 95 and 96 Page 27 paragraph 99 (willful and wanton)

As the referenced allegations indicate, une argumer; t-the Palisades litigation is generic to 2cchtel ir. that it ch. . .

longes Bechtel's ability to build a proper plant under ,ny se- --

c'.rcumstances, is specific to Midland in the sense that continu-ing QA violations are with respect to AEC regulations which Jresently apply to Midland and Palisades, and is historically relevant in the sense that the previous violations by Bechtel were of QA practices, albeit informal, which were incorporated into the present Appendix B.

On the basis of this showing it seems to us almost crass for Consumers, Bechtel,'and particularly the Regulatory Staff,- that supposed bastion of informed safety regulation, to

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I December 2, 1974 UNITED STATES ATOMIC ENERGY CO'?ISSION BEFORE THE ATOMIC S7sFETY AND LICENSING BOARD In the Matter of: )

) Docket Nos. CPPR-81 Consumers Pcwer Company ) CPPR-82

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(Midland Plants 1 and 2) ) Shou Cause

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PROOF OF SERVICE.

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I, MYRON M. CHERRY, certify that a egy of

" Comments of Saginaw Intervenors in Connection with Show Cause Oral Argument," together with Saginav'< , ""c.cice f a.-

Leave to File Written Corments Regarding Gral A.t oumen c ,"

was mailed postage prepaid and properly addressed prior to the close of business on December 2, 1974 te mcmbare of the Atomic Safety and Licensing Board, Secretary o f the U. S. Atomic Energy Commission, counsel for the parties and the Atomic Safety and Lice.r'cg Board Panel.

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Myrdr%y. Cherry Myron M. Cherry One IBM Pla::a, Suite 4501 e- g Chicago, Illinois 60611 s (312) 565-1177 9 p ggt 1ETEI SU.C h DEC 61974" $

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arguo that the lawsuit against'Bechtel was not meaningful and should not be explored in the limited-purposes we have shown in connection with this show cause proceeding .

Finally,1no one has raised the very practical question as to how the work relationship between Consumers and Bechtel at Midland is going to fare in view of all the names these twc ccm pa-nies are calling each other out in the Western District:of Mi-Sic -

Southern Division.

Conclusion We respectfully request that the Midland s' -" ecu r. ;

hearing be reopened in accordance-with our Perir.ic,:- chmitt date of September 30, 1974.

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Respectfully submittef,

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Myron M. Cherry ~

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Attorney- for Saginaw Int.e,rver arr Riron M. Cherry One IBM Plaza Suite 4501

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Ohicago, Illinois 60611 I'12) 565-1177

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