ML19270H198
| ML19270H198 | |
| Person / Time | |
|---|---|
| Site: | Black Fox |
| Issue date: | 10/30/1978 |
| From: | Edgar G, Gallen K MORGAN, LEWIS & BOCKIUS |
| To: | |
| Shared Package | |
| ML19270H188 | List: |
| References | |
| NUDOCS 7906250205 | |
| Download: ML19270H198 (44) | |
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UNITED STATES OF 'AFERICA NUCLEAR REGULATORY COFSIISSION IN THE MATTER ^' )
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FUBLIC SERVICE COMPANY OF ) Docket Nos. ,
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OKLAHOMA, ASSOCLiTED ELECTRIC ) STN 50-556 COOPERATIVE, INC., and ) STN 50-557 WESTERN FAR'ERS ELECTRIC )
COOPERATI'E , INC . )
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(Black Fox Stations, )
Units 1 and 2) )
MEMORANDUM IN SUPPORT OF S GENERAL ELECTRIC MOTION TO QUASH gg g h $Yp d, ./ I
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2238 012 Dated: October 30, 1978
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TASLE OF CONTENTS ABSTRACT OF FACTS During evidentiary hearings on October 12, 1978, the Inter-venors antered a motion for production of the " Reed Report," a proprie-tary 1975 GE product inprove=ent study, which was not a safety review, and according to confidential reviews by the ERC and Congressional Committee Staff, did not consider matters related to cafety which were not otherwise previously known to the NRC Staff. On October 18, 1978, the Board granted the Intervenors' =otion and issued a subpoena for the entire Report, in soite of the facts that: 1) as recently as June 29, 1978, it denied, on grounds cf inexcusable unti=eliness, an additional Intervonor contention which sought the production of the Reed Report;
- 2) the Intervenors' October 12 motion only sought the Reed Report as it related to their existing contentions; 3) the record is devo. of any showing of relevance, good cause for unti=ely filing, and necessity for a sound decision; 4) production, even under a protective order, would raise a substantial likelihood of competitive har= to GE; and 5) the Board's June 29 ruling found that permitting production of the Reed ,
Report at that ti=e would certainly~ delay the proceedings.
Page(s)
I. STATEMENT OF FACTS . . . .. . . . . . . .. . . . . . 2 A. Purpose and Objectives of the Reed Report . . . . 2 B. Structure of the Reed Report . . . . ... . . . 7 C. Regulatory History / Significance of the Reed Report . . . . . . . . . . . . . . . . . . . 9 II. PROCEDURAL BACRGRCUND OF THE SUBJECT SU3POENA . . . . 16
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III.,SIECE THE INFORMATION SOUGHT SY THE SU3POENA IS NEITHER RELEVANT NOR NECESSARY TO A DECISION, AND ISSUANCE OF THE SU3POENA WILL RESULT IN SUBSTANTIAL ADVERSE DEPACTS UPON GE, THE APPLICANT, AND THE PUBLIC INTEREST, THE DISCOVERY SECULD NOT BE HAD . . . 23 A. The Scope and Timing of the Subpcena are I=-
propeg . . . . . . . . . . . . . . . . . . . . . 24
- 1. 1 Showing of Relevance sufficient to Support Issuance of the Subpoena is Absent from the Record . . . . . . . . . . . 24
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- 2. The Intervenors' Motion was Unti=cly, and the Record is Devoid of any Showing of Good Cause for Unti=ely Filing . . . . . . . . . 28 B. The Infor=ation Sought by the Subpoena Is Not Necessary to a Sound Decision in these Proceedings . . . . . . ............ 32 C. Issuance and Enforce =ent of the Instant Sub- -
poena Will Result in Severe and Irreparable Harm to CE, the Applicant, and the Public Interest . . . . . . . . . .. . . . . . . . . . . . 35
- 1. GE's Interests are not Reficcted in the Board's Consideration of the Intervenors' Motion . . . . . . . . .. . . . . . . . . . . . 35
- 2. Issuance of the Subpoena has and will Continue to Adversely I= pact the Applicant Unless the Motion to Quash is Granted . . . . . 40
- 3. The Board's Ruling siils to Consider the Substantial Hars to the Public Interest . . . . 42 IV. CONCLUSION . . . . . . . . . . . .. . . . . . . . . . . . 44
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION IN THE MATTER OF ) ,
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PUBLIC SERVICE COMPANY OF ) Docket Nos.
OKLAHOMA, ASSOCIATED ELECTRIC ) STN 50-556 COOPERATIVE, INC., and ) STN 50-557 WESTERN FARMERS ELECTRIC )
COOPERATIVE, INC. )
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(Black Fox Stations, )
Units 1 and 2) )
MEMORANDUM IN SUPPORT OF GENERAL ELECTRIC MOTION TO QUASH General Electric (GE) hereby files its Memorandum in Support of its Motion to Quash dated October 30, 1978 in
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the above-cap,tioned. proceeding. GE's Motion to Quash is ad-p: o dressed to a subpoena, issued in response to the Intervenors' motion on October 18, 1978, which subpoena seeks the produc-tion of GE's " Reed Report," and inspection of that Report by the Intervenors' counsel and consultants. GE submits that the subpoena should be quashed since, in its present form, it: ' 1) contravenes the recent ruling by the Board in these proceedings, the NRC's Rules of Practice, and well-settled case law relating to relevance and timeliness, 2) seeks in-
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formation which is not necessary to a sound decision in these proceedings, and 3) fails to give any consideration to
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theadverseimpactswhichthesubpoenawouldimposeupon GE, the Applicant, and the public interest. In what follows,
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GE will show that, in view of the foregoing considerations, the subj ect subpoena must be quashed.
I. Statement of Facts
- Upon review of the record as it pertains to the subject subpoena, GE believes that the facts applicable to the Reed Report and the instant controversy have not been comprehensively, and in certain instances, a'ecurately developed for the benefit of the Board. Consequently, befere proceeding
.to consideration of the procedural history of the controversy and analysis of those factors which are dispositive of that controversy, the facts in the public record pertaining to the Reed Report's: 1) purpose and obj ectives , 2) structure, and
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- 3) regulatory significance will be addressed.
A. Purnose and Objectives of the Reed Reoort In hearings before the Joint Committee on Atomic Energy of the Congress of the United Sectes, which were
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held on February 18, 23, and 24 and March 2 and 4, 1976, the purpose and objectives of the Reed Report were the sub-ject of testimony by Dr. Charles E. Reed, Senior Vice President for Corporate Strategic Planning and Studies, General Electric Company, and ;,Chaiqman of the Task Force which authored the ereport.;
t Id In response 'to testimony from Messrs. Bridenbaugh, 7 y .- 2238 016
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Minor and Hubbard, which implic'd'that the Reed Report con-tained undisclosed safety issues, Dr. Reed described the purpose and objectives of the Reed Report by quoting the opening paragraph of that report:
Obj ective of Study. The Nuclear Reactor Study was a highly tech- ,
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nical study with the obj ectives of determining the bcsic requirements -
for implementing the Nuclear Energy Division's (NED) quality strategy through continuing improvement in the availability and capability of -
Boiling Water Reactor Nuclear Plants (BWR's) . This strategy is predicated on the view that leadership of the BWR in these characteristics repre-
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sents the greatest opportunity for reducing the Utility customer's power generation cost, with resulting lower power cost for industry and for
..the ultimate consuming public. The study included review of the broad range of opportunities for development of BWR leadership in all aspects of availability and capability across the entire range of design, development, manufacturing, construction and opera-tion. 1/
Dr. Reed elaborated on the. purpose and objectives as follows:
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1/ Investigation of Charges Relating to Nuclear Reactor Safety, Hearings Before the Joint Ccemittee on Atomic Energy, 94th Cong., 2d Sess., February 13, 23, and 24, and Mar.ch 2 and 4, 1976, Volume 1 [ hereinafter, "JCAE Hearings"), at 187.
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The principal pu ose of the study was to provide a basis for assessing the level of corporate resources --
including engineering and develop-ment faciliti.es, technical personnel and financial support -- required to enable our boiling water reactor product line to achieve the same tech- '
nical and competitive success as our -
turbine generators enj oy. General Electric has grown into a highly diversified company operating in many different fields of technology. While each of our businesses is managed with a great deal of decentralired authority we use a process of study and review through which the top management can obtain obj ective appraisals of our major business ventures by persons who are not involved in the day-to-day management of the individual business.
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- The task force made numerous recommenda- .
tions intended to improve the availability level of the BWR. These recommendations dealt with overall reactor design con-siderations, as well as with specific plant components and services. We also made recommendations concerning develop-ment and test facilities, and concerning questions of management and organization.
The report is, or course a document of considerable sensitivity from a competitive standpoint. It candidly discusses oppor-tunities for improvement in our product line and our organization and reconcends steps to strengthen our competitive position. 2/
. In response to allegations advanced in prior hearing sessions by Messrs. Minor, Bridenbaugh, and Hubbard, Dr. Reed
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-2/ JCAE Hearings at 187.
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explained that the Reed Report was not a safety review. In this regard, Dr. Reed again quoted from the Reed Report:
Safety Aspects. The Nuclear Reactor Study Group concentrated on reviewing opportunities for improvement.in the availability and capability factors of the BUR plants. Although in the course of the Study Group's review, nuclear -
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safety aspects were considered, this study was not a safety review. However, the Study Group founc no reason to believe that applicable safety require-ments are not being met for operating BWR plants or will not be met for future BWR plants. 3/
In response to a question by Congressman McCormick concerning the manner in whic,h the Reed Report addressed safety considerations Dr. Reed responded as follows:
. . . [i]n going over all the safety aspects the task force found no reason to believe that there were any aspects of safety that had not been completely
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covered with the Nuclear Regulatory Commission. When you talk about per-formance, maybe I can put it in a little more perspective by recalling some re-ports I think that have recently been made comparing the availability of nuclear plants with fossil plants on the Conmonwealth Edison system. They pointed out that the availability of nuclear plants of the larger size is about the same as the fossil plants.
As I recall it for the period they talked about, it was 72 percent or scmething like that. Now if we can only find out how to improve this performance all the way along the line so that we could get that availability up to 85 percent, for s'
3/, , JCAE Hearings at 187 - 188.
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example, it would be extremely valuable to any utility system. Our turbine gen-erators have an availability of something like 98.5 percent. They are so good that we have been able to have that superior availability recognized when our customers evaluate the lifetime cost of the whole unit.
We feel one of our objectives is to try -
to get similar high performance levels on the part of nuclear reactors. We considered all factors affecting performance and, quite obviously, we can improve the performance. 4/
On February 22 - 24, 1976, a review was made by the NRC Staff of the Reed Report at the General Electric 5/
offices in Washington, D . C . ~. As a result of that review, the NRC Staff acknowledged the stated purpose of the Reed Report, and its incidental consideration of safety matters as follows:
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In our review of the GE nuclear reactor study it was apparent that the study was mainly directed at marketing rather than safety per se.
The report does contain items which had implications on the safe con-struction and operation of BWR's;
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4/ JCAE Hearings at 195.
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- As more fully discussed below, the NRC Staff review of this report was made for two specific purposes: 1) to determine if any information in the report expressing safety concerns by GE had not previously been known to the Nuclear Regulatory Ccamission (NRC), and 2) to de:er-mine ifsSection 206 of the Energy Reorganization Act of 1974 had been met by the reporting of significant safety items. Upon review, the MRC Staff found that:
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'hu de ;In our review of the reocre we dic not identify
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any instances of new ar'eas of safety concerns- ,
nor were any instances identified where signifi-
- cant to thesafc NRC'. v concerns were not oreviousiv reosreed JCAE Hearings at 'S S3.
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however, the examples were used to illustrate the point that identified problems (some of which had safety significance) do have an effect on the availability of BWR plants and hence the cost and marketing potential of that plant. In those instances .
where problems having safety signifi- .
cance were cited there was no analysis ~
in the GE report of the significance from a safety standpoint of the particu- '
lar phenomena. 6/
B. Structure of the Reed Renort The structure of the report and the manner of its preparation were likewise the subject of testimony in the aforementioned JCAE hearings. In this regard Dr. Reed
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testified as follows:
. . . I undertook the study in the fall of 1974 at the request of our -
chairman, Reginald H. Jones. The general purpose of the study was to chart the technical course whereby GE's boiling water reactor could im-prove its competitive position by achieving a superior availability factor.
We organited a task force which included nine of our most experienced scientists and engineers. Two were from our Nuclear Division and the re- .
maining seven were from other parts of General Electric. The task force held 11 ceetings, each of 2 or 3-days duration. It utilized 10 subtask forces , which made indepth studies of specific areas such as nuclear fuel;
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mechanical systems, materials, pro-cesses and chemistry. Members of the task force and of the subtask forces met with scores of engineers and scientists involved in our nuclear operations. 7/
In response to a question from the Board, the
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Applicant's counsel advised, upon information from GE, that the Reed Report itself was a 1,000 page document. Unfor-tunately, the information furnished the Applicant's counsel was not entirely accurate. The Reed Report itself consists
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of a 21 page executive summary, and a main Report of some 140 pages, which was endorsed by all members of the Task Force.
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This main Report is organited into 10 sub-task subj ects addressing the following issues: a) nuclear systems, b) fuel, c) electrical control and instrumentation, d) mechanical systems and equipment, e) materials , processes and chemistry, f) production, procurement and construction, g) quality con-
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trol systems overview, h) management /information systems, i) regulatory consideration, j) scope and standardization. -9/
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7/ JCAE Hearings at 186.
8/ JCAE Hearings at 315,
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9/ JCAE Hearings at 883. In the course of preparing the Reed Report, each member of the Task Force chaired a sub-task review, which resulted in the preparation of a sub-task report. The ten sub-tash reports comprise 713 pages, and were input documents for consideratica by the Reed Task Force in preparing their findings and conclusions, which are found in the main Report. The sub-task recorts did not have the endorsement of and did.not represent the findings and conclusions of the Reed Task Force. The "five foot" shelf referred to by
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C. Regulacory History / Significance of the Reed Report The matters raised as implicit in the Intervenors' motion have been previously reviewed by the NRC Staff and three Congressional Coc'mittee Staffs. Those reviewers have
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recognized: 1) the commercial sensitivity of and need for confidential treatment of the Reed Report; 2) that'the Reed Report was not a safety review; and 3) 't:o the extent that the Report addressed matters with possible safety implications, those matters were previously and otherwise known to the URC.
The Reed Report is hot an isolated instance of
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critical self-analysis by GE. Indeed, since the inception
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of GE's involvement in the nuclear industry, it has conducted critical internal reviews, including safety reviews, as a matter of prudent management. --10/
In this spirit, upon completion of the Reed Report in the su==er of 1975, GE undertook a review of the report to determine whether the report contained information which con-
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stituted a potentially reportable deficiency within the meaning 9/ cont.
GE's chairman (see Tr. 5553, 5558) was simply an over-statement. Beyonc the Reed Report itself and the 713 page sup-task reports, each sub-task force assembled technical papers, reviewed existing reports, and hearc oral presentations. This source data was never assembled for retention and was never intended to be parr of the Reed Report. Consequently, it does not now exist in any assemoled or retained form.
-rh/r/SeeJCAEHearingsat
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of Section 206 of the Energy Reorganization Act of 1974. --
Dr. Reed's testimony before the JCAE noted that "the work of the task force was carefully reviewca by.the Safety and Licensing staff of our Nuclear Division in San Jose to deter-mine whether anything reportable had been discovered which had' 12/
not been previously disclosed to the NRC." -~ This screening review by GE yielded a preliminary list of 27 issues which, if not otherwise reported, might give rise to a potential obliga-tion to report those issues to the NRC in accordance with Section 206 of the Energy Reorganization Act. GE's further review concluded that NRC had,been aware of each of the 27 issues which had safety significance, and that there was no obligation
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to report pursuant to Section 206. --
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JCAE Hearings at 188. Section 206 of the Energy Reorgan-iration Act of 1974 and 10 CFR Part 21, the NRC Regulations implementing that statute, obligate directors or responsible officers of firms engaged in supplying nuclear equip-ment to report any defects or items of noncompliance which relate to a substantial safety hazard. This "section 206 review" did not attempt to define every matter dis-cussed in the Reed Report which might arguably relate to safety. The standards contained in 10 CFR Part 21 and Section 206 contemplate a higher threshold to trigger a reporting obligation than a mere relationship. to safety-Thus, the 27 issues which were preliminarily identified by GE pursuant to this review were reviewed against the more stringent standards arising frca Section 206, and did not nece,ssarily include all natters discussed in the Recc Report yhich might arguably relate to safety.
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13/ JCAE~ Hearings at 188. 2238 024
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Although the testimony of Messrs. Minor, Hubbard, and Bridengaugh may have implied that NRC had not been aware of the Reed Report until the JCAE Hearings, this was
, not the case. During the latter stages of the Task Force re-view, GE advised two of the Commissioners of the nature and purpose of the review. Subsequently, when the misplaced al-legations concerning the safety significance of the Reed Re-port were made, the NRC accepted GE's invitation to review 14/
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the Reed Report, and thus satisfy itself that the Report did not include any otherwise undiscloced safety information, and that GE had cet its obligations pursuant to Section 206.
On February 22, 23, and 24, 1976, in response to GE's invita-tion, the NRC. Staff met in the GE Washington, D.C. off' ices to
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review the Reed Report.
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During the latter two days two senior members of the NRC technical staff reviewed the entire 16/
report in detail. -- The NRC Staff reported the results of that review to the Joint Committee on Atomic Energy on 14/ JCAE Hearings at 188. .
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JCAE Hearings at 315. NRC's General Counsel recognized the commercial sentitivity of the Reed Report, and in view of the potential for leaks inherent in any government agency organization, agreed that it was appropriate to conduct the review at GE's offices, and that it was un-necessary to retain a copy of the Report. JCAE Hearings at 254-5. .
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February 25, 1976. -- In that regard, the NRC Staff re-viewers concl:1ded that they "did not identify any instances of new areas of safety concern; nor, were any instances identified where significant safety concerns were not pre-18/
viously reported to the NRC." -- The Staff also indicated their
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view that the Reed Report "was mainly directed at marketing 19/
rather than safety per se," -- and noted that "in those in-stances where problems having safety significance were cited, there was no analysis in the GE report of the significance from 20/
a safety standpoint of the particular phenomena." -- Based upon GE's testimony, the NRC Staff review, and its own con-fidential Staff review of the Reed Report, the Joint Com- .
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mittee on Atomic' Energy took no further action.
In the fall of 1977, at the behest of Congressman Moss, Chairman of the House Subconnitte on Oversight and Investigations of the House Committee on Interstate and Foreign Commerce, Subcocmittee staff members undertook a review of the Reed Report subject to safeguards designed to protect the cocmercial sensitivity of the Report. After an additional February 22, 1977, meeting with the Subcotsittee 17/ JCAE Hearings at 883-4 18/ JCAE Heg.ings at 883; see also Attachment A hereto.
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Staff to review GE's response to the Reed Report, the Sub-21/
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committee Staff did not pursue the matter further.
On December 15, 1977 Congressman Dingell, Chairman of the Subeccmittee on Energy and Power of the House Inter-state and Foreign Co=merce Committee, request'ed that the NRC Staff provide the subcocmittee with a list of safety related items discussed in the Reed Report, and an explanation
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of what actions have been taken by either GE or the NRC to correct each problem. In a letter of March 6, 1978, the NRC Staff requested that GE provide it with a copy of the study or a list of the safety issues identified in the study and further requested that GE meet with the Staff to confir5 their understanding of each issue, and status of actions taken by CE to resolve them. --22/ By a letter of March 22, 1978, GE provided the NRC Staff with a list of 27 issues identified in its prior review pursuant to Section 206 of the Energy 23/
Reorganization Act of 1974. --
On April 11, 1978, GE met with the NRC Staff and a member of Congressman Dingell's staff in Washington to review 21/' See Attachment B hereto.
22/ See Attachment C hereto.
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--23/ See Attachment D hereto. This list was accompanied bv appropriate affidavits supporting GE's reques't that the
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.information submitted be withheld frc= pu'olic disclosure
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pursuant to 10 CFR S 2.790.
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those issues. The Reed Report was made available for a con ,
fidential review by the NRC and Congressional Staff member at that time. As a result of this meeting the Staff apprised GE that it was satisfied with the status of the issues as
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either having been resolved or having been identified as an integral part of current NRC programs to resolve generic issues.
The NRC Staff further requested that GE provide a written status report on each issue reviewed in the April 11 meeting.
By letter dated May 26, 1978, GE provided the status report requested by the NRC, and further requested that the report be withheld from public disclosure pursuant 24/
to 10 CFR 5 2.790. -- By letter dated July 10, 1978, the NRC Staff responded to the request contained in GE's letters dated March 22, 1978 and May 26, 1978, in which it requested that the list and status report, respectively, be withheld from public disclosure pursuant to 10 CFR S 2.790. Upon review of the supporting affidavits contained in both sub-mittals, the NRC Staff concluded that In essence your claim is that public disclosure of the list of safety related items in the Sucmary Status Report is likely to cause substantial harm to the competitive position of GE. We agree thac if the Reed Report in its entirety were subcitted, it should be afforded the protecticn of
= proprietary information under the
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24/ 5 $ee/ Atyac'nSent?E hereto. 2238 028
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Commission's regulations because it is a product improvement study of in-portant competitive value and because disclosure of this sort of study would act to inhibit thoughtful self-criticism by nuclear equipment vendors since it would enable competitors to obtain a better understanding of a manufacturer's product concerne and programs. ,
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The aggregate list in the Summary Status Report of the 27 safety related items .
is derived from the report and therefore can be afforded the same protection of
. proprietary information. Because of the historical context of a product improvements study, we agree that the public disclosure of the aggregate list of the 27 issues could cause substantial
. harm to the competitive position of GE. 25/
Based upon the fore' going, the purpose, structure, and regulatory significance of the Reed Report can be briefly summarized as'follows:
a) It is a confidential commercially sensitive generic product improvement study which was intended to in-prove the availability and performance of GE's BWR product.
In recognition of the commercial sensitivity and non-safety purpose of the Report, respectively, the NRC and Congressional
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Staffs reviewing the Report have found it appropriate to employ safeguards against disclosure, and unnecessary to retain a copy of the Report.
b) The report was not focused upon safety con-siderations )nd did not attempc to determine the safety significance of matters addressed in that study.
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22 % 029 25/ See Attach =cne F hereto.
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c) Reviews of the Reed Report and the 27 issues identified in GE's Section 206 review by the NRC Staff and by congressional cocmittee Staff concluded that the Reed Report was coc=ercially sensitive, was not a safety study, and did not diclose any safety matters that were not otherwise known to the NRC. Further, the NRC Staff has expressly deter-mined that the Reed Report and the list and Status Report pro-duced by GE pursuant to its Section 206 review were entitled to confidential treatment pursuant to 10 CFR S 2.790, and that those issues addressed in the Section 206 review were either in-significant, resolved, or were being addressed in current NRC licensing programs.
II. Procedural Background of the Subj ect Subcoena In a motion dated May 19, 1978, the Intervenors requested that two additional contentions be ad=itted in the above-captioned prceeeding. The second of these two additional contentions involved the Reed Report. The grava=en of this contention was that the Applicant and NRC Staff had not ade-quately assessed the icpact of numerous unresolved safety ite=s in evaluating and reviewing the Black Fox Nuclear Plant and that the unresolved 3NR safety issues were discussed by GE in the Reed Report. Further, the contention asserted that information concerning the NRC review of the Reed Report and specific infor-i50 mation. 5rconcerning safety related items within the report should
, .be..made available to Intervenors to permit a complete and thorougi-review of the plant. Upon review of the Intervenors' totion anc
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the Applicant's and NRC Staff's'fesponse, the Board denied the admission of additional Contention No. 2 on the grounds of un-timeliness and Intervenors' failure to make a showing on the remaining four criteria enunciated in the West Valley pro-26/
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ceeding. ~~ In so ruling, the Board stated that:
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This extremely belated application -
to admit contention number 2'is"in-excusable. This is so because, first, Mr. Hubbard, one of the Intervenors' consultants, in testi-mony before the Joint Committee on Atomic Energy on February 18, 1976 averred to, and thus was aware of the Reed Report.
Secondly, in a letter dated April 1,
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1976, Mrs. Younghein filed a copy of that testimony as part of the amended petition to intervenor. 27/
In light of these and other considerations,'the Board concluded:
. . . Had the Intervenors timely moved to amend their petition to plead addi-tional contention number 2, in at least generalized form, in a timely manner prior to July 21, 1976, and had we ad-mitted it, the Intervenors could move for discovery. If there were obj ections to the production of the Reed Report, said report might have been subj ect to inspection in this proceeding and ad- ,
mission under 10 CFR S 2. 790(b) (6) ,
Proper Safeguards. Obviously, at this late date, to begin that procedure could broaden the issues and cost cer-tainly will delay this proceeding.
- Thus, criterion IV in 10 CFR S 2. 714(a)(1) does not justify the accission of ad-
,
- ditional contention number 2. 28/
c 2238 031 26/ Tr. 4172-73.
27/ Tr. 4172.
(;28g Tr '.at a t 71 __ ___ __
-
.. .
.
.
-18
( ':
On October 11, 1978, during Intervenors' cross-examination of a GE expert witness on the subj ect of inter-granular stress corrosion cracking, the Intervenors made a motion for production of the Reed Report insofar as it re-29/
laced to the Intervenors' contentions. -- Intervenors indi- ,
cated that they wished to use the Reed Report to cross-30/
examine GE witnesses in relation to their contentions.
--
Counsel'did not offer any excuse for the untimeliness of the motion, nor was any showing made in relation to the four factors enunciated in the West Valley decision. After hearing argument, the Board or,dered the parties to negotiate a protective agreement _and the Applicant to produce the Reed 31/
Report insofar as it relates the "27 safety issues." --
Counsel for the Applicant advised the Board that it did not own and did not have possession of the Report and.that it would contact GE to determine whether the report would be 32/
produced pursuant to the Board's order. -- The Board sub-sequently advised Counsel for the Applicant that it uould issue a subpoena in blank to the Intervenors for production of the Report, and that it did not wish to bear from GE. --33/
,
29/ Tr. 4708-09.
30/ Id.
--31/ Tr. 4721'.
33/ Tr. 4721; 4725-26.
2238 032 i ; -
- Tr 31gtu.qp961-2.
_
.
- *
. .
.
,
.
.
'
-19
( '
'.
Upon reconsideration, the Board deferred ruling en the production of the Reed Report until October 16, 1978 in order to provide the Applicant with an opportunity to reach some accommodation with the General Electric Company regarding pro-34/
duction of the Reed Report.
--
~
On October 15, 1978 Counsel for General Electric, the Applicant, the NRC Staff, and the Intervenors met in Tulsa to discuss production of the Reed Report. At th'at time, GE made an offer of settlement in an effort to avoid pro-trate litigation concerning production of the Reed Report.
GE's offer of settlement consisted of two basic elements.
It would prepare a report, which would extract and discuss, on an issue-by-issue basis, all matters addressed in the Reed
.
-
Report which relate to safety. This report would also include a discussion of the current status of the issue from an NRC licensing standpoint. In recognition of the fact that a party
'
might raise a question as to the faithfulness of the extraction, GE offered to provide the Board with a copy of the Reed Report for in camera inspection to determine if the extraction was faithful to the Reed Report.
Having made that offer, GE did not, as a matter of .
law or fact, admit that the Reed Report was relevant to any matter in issue, contained infor=ation which would lead to s
relevant information, or that any party was entitled to obtain u o .
!
34/ Tr. 4962. 2238 03T
_ _ _ _ _ _ _ _ .--
.
- -
.
,
.
.
.
.
.
-20 35/
--
access to the Reed Report.
'
pon consideration of GE's offer, the Intervenors were unwilling to accept the Board's review for faithfulness of extraction and no accommodation was reached. .
On October 16, 1978 Counsel for the Applicant re- .
ported GE's offer of settlement to the Board and urged the Board to adopt that offer as the basis for compliance with 36/
the Board's order. -- Upon consideration of arguments pre-sente'd by'all parties of record in the Black Fox proceeding,
- the Board took the matter under advisement. --37/
On October 17, 1978, the Board ruled that the Applicant and/or GE must produce the entire Reed Report for
-
inspection by Intervenors' counsel and by Intervenors' three 38/
experts, Messrs. Minor, Hubbard, and Bridenbaugh. ~~
35/
~~ It has long been settled that an offer of stipulation or compromise by a litigant cannot be deemed to con-stitute, or even infer, an admission on the part of that litigant as to liability, the existance of certain underlying facts, or the relevance of any information.
.. West v. Smith, 101 U.S. 263, 273 (1879), Hawthorne
- v. Eckerson Co., 77 F.2d 844 -(2d Cir. 1935); Lewis
- v. Dixie - Portland Flour Mills, Inc., 356 F.2c 54 (6th Cir. 1906); McCormick on ivicence , Section 274 (2d Ed. 1972).
36/ Tr. 5547-53. -
31/ Tr. 3572.
2238 034
{' [jj,/ .3 ,Tr . 5 72 %.
.
e G
. . - . . , , .
.
-
.
.
'
-21
.
.
The bases for the Board's decision were as follows:
a) The (verbatim) extraction from the Reed Report of the 27 safety related items would be difficult, if not i=-
possible.
'
b) A summnry would not serve the purpose of
.
allowing the Intervonors to cross-examine fully and intel-
.
ligently.
c) It would not be appropriate for the Board to make a comparison between the Reed Report and any summary or extraction without the benefit of input and argument of the
.
Intervenors' counsel in an adversary setting.
d) The inspection will not be a detriment to General Electric's competitive position because inspection will be conducted under the aegis of a protective order.
e) Intervenors' experts would be more competent to spearhead the inspection of the Reed Report than would Intervenors' attorneys who admittedly are not nuclear ex-39/
perts.
.
GE submits that the foregoing bases are legally and factually erEoneous in the following respects:
a) The verbatin e,xtraction from the Reed Report of the "27. safety related" items would be difficult, but not
~'O 40/
impossible; I whether or not the Board's mi rqqgging
, .
39/ Tr. 5728-29.
40/ Tr. 5549-5550.
. - - - - . - . - . _ - _. ._ -
.
'
. .
.
,
-22
'
'
, . .
,
~
resulted from the Board's reluctance to hear directly from GE, the representations were advanced in furtherance of GE's sincere belief that a verbatim extraction would not p,rovide a form..wh'i~ch approaches the substantive value of an issue-41/ 42/ .
by-issue extraction in terms of clarity, conciseness, 43/ 44/
--
comprehensiveness, -- comprehensibility, and (particu-45/
~~
larly in view of the age of the material) usefulness.
(See Affidavit, Attachment G hereto).
b) There is no basis in the record for the finding
..
that either the Reed Report, an issue-by-issue extraction, or a verbatim extraction is ndeessary for the Intervenors to cross-examine fully and intelligently (see Section III. B.
below). .
c) To the extent that the Board would have access to the entire Reed Report, GE's offer of settlement was
. predicated upon satisfying the Board's unexpressed desires to independently inquire, and well-settled judicial and quasi-judicial p.ractice by which it is appropriate for the trier of fact to review the proprietary Report in camera.
41/ Id. .
42/ Id.
43/ Tr. 555$.
-
2238 036
-
1 .
144T Tr. 5549-50.
ria , , .
45l.\Yd. ,.
__
-
. .
.
. . .
.
.
-23
.,
without regard for the more topical adversary interests of 46/
the Intervenors.
--
d) The inspection of the entire Reed Report, irrespective of whether it is pursuant to a protective order, would result in the disclosure of information without a '
.
showing of relevance, necessity, or good cause, and would
.
expose GE to a risk of disclosure for which the NRC's Rules of Practice do not clearly contain commensurate enforcement authority (see Sections III. A., III. B., and III. C.l.,
below).
e) Neither Intervenors' attorneys nor their con-sultants are entitled to inspect the Reed Report (see
'Section III. below).
III. Since The Information Sought By The Subpoena Is Neither Relevant Nor Necessary To A Decision, And Issuance of The Subpoena Will Result In Substantial Adverse Impacts Upon GE, The Applicant, And the Public Interest. The Discovery Should Not Be Had _
GE submits that the Board's order directing production
-
of the Reed Report pursuant to the subj ect subpoena is predicated upon substantial errors of law and fact. In what follows GE will demonstrate that: 1) the scope and timing of the sub-
'
poena are improper, 2) the information sought by the subpoena
'
is not nececsary to a sound decision in these proceedings, and 23)} severe'adTerse impacts upon GE, the applicant, and the
.
_4_6/ See Section III.B., below. 2238 037
, , , , , _ . _m . *'" " " ~ ~ ' '
.
.
. ..
. .
.
.
-24
{'
-
,.
public interest would inevit'51y result from its issuance and enforcement.
A. The Scope and Timing of the Subpoena are Improper In grr.nting the Intervenors' motion for production
.
of the Reed Report, and issuing the subj ect subpoena to the
- Intervenors, the Board erred in two fundamental respects:
- 1) the information encompassed by the subpoena goes well beyond the parameters of the Interver.or's motion and appli-cable law governing discovery in NRC proceedings; and 2) the Intervenor's motion was inexcusably untimely and in direct
,
, conflict with the Board's June 29, 1978 ruling denying ad-mission of an additional, late-filed contention concerning the Reed Report.
- 1. A Showing Of Relevance Sufficient To Support Issuance Of A Subpoena Is Absent From The Record The instant subpoena resulted from an Intervenor motion requesting production of the Reed Report only insofar as it related to the Intervenors' , contentions in the Black Fox proceeding. In ultimately granting the Intervenors' motion, the Board ordered production of the Reed Report in-sofar as it relates to the "27 safety-related items", the Board's questions, and, in effect, all matters covered in the Reed Repd'rt, whether or not related to safety. The Inter-venors, *!however, have made no shouing' that the information
( 4 cJ r. --
2238 038
_ _
..
-
. . . ,
-25
'
..
(
sought is at least reasonably calculated to lead to infor-mation relevant to any matter in issue. In apparent recog-nition of this fundamental deficiency in the record, on the .
. day after its ruling the Board made reference to the fact that GE's offer of settlement should, in the Board's view, operate as a generalized showing of relevance which it believed 47/
to be sufficient to support issuance of the subpoena. --
In issuing the subpoena in spite of these faccc and circumstances, the Board erred in three fundamental re-spects. First, GE's offer of settlement is inadmissible as a matter of law in these proceedings, and the Board's reliance upon that offer as a generalized showing of relevance was improper. GE's offer was designed to settle and thus avoid protracted litigation,.and it cannot operate as a concession of even the generalized relevance of the subj ect matter of the 48/
--
Reed Report. Therefore, the record does not contain any showing of the generalized relevance of the Reed Report.
Second, the Board erred in finding that only a generalized showing of relevance was sufficient to justify issuance of the subpoena. At the very least, the Intervenors 47/ Tr. 6042-43.
48/ See n. 3.5 and accompanying text, suora.
6o 2238 039
_
. . _ = __ _ _ _ _ -
.
. .-
.* .
.
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.
-26
( ...
must show that the information sought is reasonably calcu-49/
laced to lead to information relevant to their contentions. --
The record is barren of any evidence to suggest that the Reed Report as it relates to the "27 safety-related items",,much less the entire Reed Report, constitutes infor-
.
mation which could lead to information relevant to any of the
'
Intervenors' contentions. In snore, the secpe of the subpoena patently exceeds the scope of the Intervenors' contentions and,
. absent any basis in the record to support a subpoena of such 50/
scope, it must be considered excessive and tmproper.
.
49/
-- Section 2.740(b)(1) of the Commission's Rules of Practice only permits discovery of information and documents, not privileged, which are " relevant to the subj ect matter of the proceeding" and then further qualifies and limits the term "subj ect matter" to the contentions admitted by the presiding officer in the proceeding. 10 CFR S 2.740(b)(1) .
This provision has invaribly been interpreted as requiring that the information sought must be reasonably calculated to lead to the discovery of admissible evidence related to such contentions. See e.g., Allied-General Nuclear Services et. al. (Barnwell) , L3P-77-13, 5 NRC 439, 692 (1977);
E6ston Edison Co. (Pilgrim 2), LEP-75-30, 1 NRC 579, 5S1 (1975). The scope of discovery permissible against third parties is in no event more extensive than that permitted against actual parties to the proceeding pursuant to this provision, (see e.g., Toledo Edison Co. (Davis-Besse 1-3),
CCH NRR 7 307U59-(July 20, 1976)) anc subpoenas have been quashed in the past in situations where Intervenors have failed to establish that the information sought is relevant to one or more of their contentions. See e.g., Centenwealth Edison Co. (Zion 1 and 2) , ALA3-ll6, 6 AEC 258, 259 (1973).
50/
-- As the United States Court of Acceals for the District of Columbia Circuit recently notedin SEC v. Arthur Younz and Co., F.2d , No. 76-1716 (D.C. Cir. ac_y 2 ,
19/o), SI p Op. at zu, citina Oklahoma Press Publishine
_
g Co. v. Walling, 327 U.S. 186, 206-209 (1946), tne c sciosure
_
.iVO :(
22381240
.
"
'. -
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.
.
.
.
-27
.
Third, the Board gave no consideration to the ad-
_ ditional burdens in regard to a showing of relevance which the Intervenor must assume if discovery is to be had in this case in light of the untimeliness of the Intervenors' motion.
The Intervenors' motion is not only defective by reason of
'
,
its inexcusable untimeliness per se, but it also failed to meet the higher threshold showing of relevance necessary to 51/
support an untimely discovery request.
--
Inasmuch as the record does not contain so much as a generalized showing of relevance, a fortiori, the Intervenors did not, and cannot,
.
50/ cont.
sought under a subpoena "shall not be unreasonable" and "the requirement of reasonableness . . . comes down to specification of the documents to be produced adequate, but not excessive, for the purposes of the relevant inquiry." (empnasis added). The NRC Rules of Practice likewise provide for the quashing of any subpoena that is " unreasonable or re
~
any matter in issue." quires 10 CFR evidence not relevant S 2.720(f)(1). See to Commonwealth Edison Co. (Zion 1 and 2), ALAB-leo?
6 AEC 258, 259 (1973).
--51/ See Toledo Edison Co., et. al. (Davis-Besse 1, 2, and 177 Clevelanc Electric illuminatina Co., et al., (Perry 1 and 2), L3P-76-o, 3 NRC 199, 201 (1976) (higher standard of probative value beyond the relevance test set forth in 10 CFR 9 2.740 is appropriate in situations where the application for the subpoena is made after the termina-tion date for discovery established by the Licensing Board) .
See also Illinois Power Co. (Clinton 1 and 2) , ALA3-340, 4 NRC 27, 32-33 (19)o) (affirming Licensing Board order denying' request for suopoena for production of documents made aesthe time of cross examination).
.
2238 041
. 1-
. _ _ _ _ _ , _ _ . . . _ _ . . . _ _
.
.
,
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.
.
.
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.
.
-28 t ..
meet the higher threshold burden which must apply in the 52/
--
instant case.
In light of: a) Intervenors' failure to make the required showing as to the general relevance of the Reed Reporr
.
and the particularized relevance of the report to their contentions, and b) Intervenors' failure to meet the higher threshold burden of relevance associated with untimely dis-covery requests, it is clear that the instant subpoena was erroneously issued and must.therefore be quashed.
-
- 2. 171e Intervenors ' Motion Was Untimely, And The Record Is Devoid Of Any Showing Of Good Cause For Untimely Filing On June 29, 1978, the Board denied the Intervenors' contention concerning the Reed Report on the ground, inter alia, that the contention was inexcusably untimely. The Board made specific reference to the fact that Mr. Hubbard, one of the Intervenors' consultants, had been well aware of the Reed Report since February of 1976, and that, accordingly, there was no basis in the record to excuse the Intervenors' untimeliness in raising the issue'. More significantly, the
--52/ In addition, the issuance of a subpoena against a third party at this late date should properly be preceded by a showing that the infornation requested is "necessary" y[,[, n>" to the Intervenors' case, a showing which they have also
'
-
not even attempted to make. See Commonwealth Edison (Zion l'and 2), 6 AEC at 259, n. 4 -Cr. A111ed-General
. Nuclear Services (Barnwell), 5 NRC at E91.
>
. u
.
2238 042
- .
.
- -
..
.
-29 c .
.
Board found compelling reason to deny the contention in light of the fact that, had the Intervenors filed the con-tention in a timely manner, the Intervonors could have moved for discovery and objections to the production of the Reed Report could have been resolved in a timely manner. Since the Intervenors inexcusably failed to do so, the Board ex-pressly found that, ". . . (a}e this late date co begin that procedure could broaden the issues and most certainly will 53/
delay this proceeding." --
In spite of the compelling logic inherent in this ruling of the Board, on October 17, 1978 the Board reversed its position and granted an even more untimely Intervenor motion for production of the Reed Report. GE submits that:
- 1) circumstances have not changed in the meantime to erode the validity of the Board's June 29 order; and 2) the record is absolutely devoid of any showing of good cause for an un-timely motion entered several months after the Board's June 29 order and after the evidentiary hearings were well underway.
In light of this, it is inevitable that the Board's belated reversal of its prior ruling will now broaden the issues, and, as previously found by the Board, most certainly delay this 54/
proceeding. --
-
2238 043
- _5_3/ Tr. 4172-73.
54/ Delay in a hearing is a well recogniced basis for limiting
--(" n or denying requests for the production of documents. See
'4A Moore's Federal Practice (2d Ed.), 7 34.06, Bernsteta
- v. N. V. Necertencscne-Anerikcnnsche Stocavaart-:122tscnaanv, 15 F.R.D.
in . .. s .., v J2 (S.D. N.Y. 1933), Corr.cnweni:n scison Co.
..s, ,n- , .- as , .-, , -.
__
.
-
.
. , . .
.
.
-30 t ..
The Intervenors have made it plain that they not only wish to inquire of witnesses concerning their conten-tions, but also to look beyond their contentions in connection 55/
~~
with the Reed Report. In its ruling granting the Inter-venors' motion, the Board forewarned that the Reed Report ,
could be employed only in relation to the Intervenors' con-
.
tentions. The Intervenors expressed intentions, however, cannot be harmonized with a narrow and expedient use of the Reed Report in these proceedings. Moreovet, the fact that the Board's rationale for issuing the subpoena contemplaces a broader scope of issues than the Intervenors' contentions, and in fact encompasses the entire Reed Report, lends a hollow 56/
ring to the Board's forewarning. --
--55/ Tr. 5570-71. In contrast, Intervenors' original motion was predicated upon use of the Report only for questioning GE witnesses with respect to the remaining Intervenor contentions. Tr. 4208-09.
56/
--
The Appeal, Board's decision in the Clinton proceeding is particularly relevant here. As in the situation here, the controversy in Clinton arose after one of the applicant's witnesses was una'le o to answer certain questions on cross-examination during the hearings because some of the under-lying data supporting his testimony was at his home office in New York, and the Intervenors sought discovery of this underlying data. The Licensing Board denied this discovery
. r e o u e.s t since it was untimely and might delay the proceeding.
-The Appeals Board affirmed this decision since it was satisfied that the additional data sought was far more ex-tensive than necessary to provide answers to the cuestions to whicE (the witness) was unable to respond and, further, that the particular information bearing upon such ansuers would have been of too little potential uorth to justifv 2h0 holding up the evidentiary hearing to await its receipt'and analysis. Illinois Power Co. (Clinton 1 and 2), ALAB-340, 4 NRC at 33.
-
2238 044
-
.
~
. .
. .
.
. . .
-31
( .
GE submits that the Board's June 29, 1978 ruling was well founded and properly recognized the Intervenors'
,
obvious failure to assume its obligations in regard to ex-57/
pedient conduct of these proceedings. -- The record contains no subsequent showing of good cause for the Intervenors' most recent untimely motion. By necessary implication, the Board's prior ruli.ng concedes that there is a certainty for broadening 58/
the issues and delaying the proceedings. -- In view of these
. circumstances, the Board must reaffirm its prior ruling and
' tin ' subpoena must be quashed.
_
57/
--
Intervenors have an obligation to "make the system work" by fulfilling the responsibilities such as compliance with discovery schedules and the Rules of Practice, which they have assumed by virtue of their participation in URC proceedings. Consumers Pouer Co. (Midland 1 and 2) ,
ALAB-123, 6 AEC 331, 332 (1973); Northern States Power Co.
(Prairie Island 1 and 2) , ALAB-288, 2 NRC 390, 393 (1975);
Northern Indiana Public Service Co. (Bailly 1) , ALAB-224, 8 AEC 244, 250 (1975); Norchern States Power Co. (Tyrone 1),
58/
~~
Moreover, the doctrines of repose apply to NRC proceedings (see Alabama Power Co. (Farley 1 and 2), ALAB-182, 7 AEC 2T67 212-13, remanded on ocher zrounds, CLI-74-12, 7 AEC 203 (1974)), anc ' c oth the applicant and GE justifiably relied upon the Board's earlier ruling excluding the Reed Report. Since Intervenors have made no showing of changed circumstances which mighc undermine the validity of the reasoning which supported the original order, that order can, by analogy, be viewed as the law of the case and should not be disturbed. Cf. In re Sanford Fork and Tool Co., 160 U.S. 247, 255 (ISFI); Banco .iacional cc Cuca v7 Farr, 383 F.2d 166, 178 (2d Cir. 1906), cert. cen d, 390 U.Ss 956 (1968).
2238 04s
- n 3 p>
-
3 7 3. t
_.. _ __ __ ___ - - - . _ ~ . -.
~
.
'
'
. .. ,
. -32
'
i B. The Infornation Sought By The Subpoena Is Not Necessary To A Sound Decision In These Proceedings Having establishe'd that the record is insufficient in regard to the required showings of relevance and excusable untimeliness, it follows that the Board must quash the sub-
.
poena for these reasons alone. The inquiry, however, might
.
be extended to consider whether some overriding reason may exist for production of the Reed Report, even in the absence of a sufficient showing of relevance and good cause for un-timely productio.n. In that regard, the Board's ruling pre-supposes that the Intervenors must have the Reed Report in order to conduct meaningful cross-examination in regard to their contentions. As with relevance and good cause, the record is barren of any showing on this point.
The public record clearly demonstrates that:.1) the Reed Report was not a safety review; 2) it did not attempt to assess the safety significance of matters addressed within the report; and 3) the information in that 1975 report does not disclose any safety issues not otherwise known to NRC, and
.
- 4) all significant and unresolved safety issues are being ad-dressed by the NRC Staff in its generic licensing programs.
The Intervenors' consultants have been well aware of these facts and findings since February of 1976, and tarough reason-able efforts 'could have obtained all substantive informatica
2238 046
>:.5:#db)L\ _
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-
.. .
. .
.
.
9
-33
'.
relating to any generic NRC safety issue or program without need for the Reed Report. Further, it is simply inconceivable that a report which was not a safety review and was completed in the summer of 1975 could be useful, much less necessary, for
'
meaningful cross-examination. There is simply no basis in this record for.the finding that Intervenors must have the Reed Report in order to cross-examine meaningfully on their con-59/
tentions.
Although the subpoena was issued in direct response to an Intervenor motion relating solely to the Intervenors' contentions, the Board's initial October 11 ruling encompassed the "27 safety-related issues," and, its final 0,ctober 17 ruling encompassed the entire Reed Report. Although GE acknowl-edges that the Board may have an independent duty to inquire whether or not heretofore undisclosed safety matters were in-
' 60/
--
cluded in the Reed Report, GE is and remains willing to 59/
--
In situations such as this a licensing board must balance the effects of delay against "such countervailing factors as the alacrity with which the information was requested when its materialtiy became apparent, the particular relationship of the requested information to unresolved questions in the proceeding, and the overall importance of the infor=ation to a sound decision". Illinois Power Co. (Clinton 1 and 2), ALA3-340, 4 NRC at 33. Even a cursory review of the record in this proceeding decca-strates that the Intervenors have not shown that they are entitled'to favorable consideration under any of these
" counter 9 ailing factors".
60/ Licensing Boards have the power to raise sua sconte signifi-
, cant environnental or sarety issues, however, tn_s pcwer n'
.should.be usec sparingly. See Censolidated Edison Co.
(Indian Point 1, 2, and 3), ALAB-319, 3 NRC 100, 190 (1976), 10 CFR 5 2.760(a) .
- - _. _. .-- - -. - _ . - --
2238 047 --
. *
,
- .
.
.. .
-34
.
.
accommodate the Board itself. The Board's duty to inquire further when an issue is raised by an Intervenor is not triggered unless at least a " colorable question" is presented to give rise to that duty. --61/ In the instant case, however, thc- public record clearly shows that the purpose, structure ,
and prior reviews of the Reed Report do not provide a basis for triggering the Board's independent duty to inquire. More-over, since the Board's June 29, 1978 denial of the Intervenors'
" Reed Report" contention, no information has been advanced by the Intervenors to raise as much as a " colorable question."
In fact, the instant subpoena has been issued in an adversary context in favor of a single party, and in spite of the fact that the record does not show the information sought to be .
necessary to meaningful cross-examination, much less a sound decision. '
Accordingly, in the absence of any showing or basis to conclude that the information sought by the subpoena is necessary to a sound decision, GE's motion to quash must be
- granted.
61/
-- It is clear that Licensing Boards are not required to conduct indeoendent research or de novo raviews of applications' and o ther submittals to tne NRC Staff
-
(Consumers Power Co. (Midland 1 and 2), ALA3-123, 6 AEC 331 334-35 (i973)) and need not inquire further as to afy, issues raised by Intervenors unless a thresh-old showing is made by the Intervenor as to the liti-gability of that issue. Veracnt Yankee Nuclear Power
.Corpe v: NRDC, U.S. , 55 L. Ec. 460 ac aca-50
( ,P OlV 78) ; Puolic Service Co, of New Hamoshire (Seabrook 1 and 2) , ALA3-4 71, 7 NRC 477, 466-c9 (1977).
cu 2238 048
. ,
. .
-35
( ..
C. Issuance and Enforcement of the Instant Sub-poena Will Result in Severe and Irreparable Harm to GE, the Applicant, and the Public Interest The Board's ruling granting the Intervenors' motion and directing production of the entire Reed Report focuses only upon those interests which the Intervenors
~
'
-
have asserted. As shown in the foregoing, the Board has accommodated those interests without an adequate record basis. Beyond this, the Beard must consider the severe and irreparable harm to GE, the Applicant, and the public interest which will result from issuance and enforcement of
,
the subpoena. '
- l. GE's Interests are not Reflected in the Board's Consideration of the Intervenors'
' Motion The Reed Report itself is a generic product improve-
'
ment study which was intended to provide top management with an obj ective technical evaluation of GE's SWR product for improving the reliability and perfornance of that product.
Disclosure of the Reed Report would result in substantial com-petitive harm to GE. The marketing advantages which GE's ccm-petitors could gain from negative inferences drawn from GE's self-analysis is obvious enough. Moreover, the NRC Staff has agreed with GE that GE's competitors could obtain informa-tion of const,derable strategic value, in terms of GE's
(; 2238 049 tto a .,
.
-- .- -. -- ._ --. __ ._ .
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-
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-36
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t efforts toward product improvement, if the report were 62/
disclosed. --
GE submits that the Board must recognize GE's interest in maintaining the confidentiality of their Report ,
as well as the express policy contained in the Atomic Energy -
Act favoring the promotion of competition in the peaceful 63/
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uses and development of nuclear power. To the extent that the Board's ruling orders disclosure of the Reed Report, however limited, it raises a significant potential for compe-titive harm to GE, and contravention of the express purposes and policies of the Atomic Energy Act.
62/
-- The NRC Staff has agreed that the Reed Report is also clearly entitled to proprietary designation and confiden-tial treatment under NRC case law since, inter alia, (1) the information contained in the Report is of the type customarily held in confidence by GE, (2) there is a rational basis for customarily holding such infor-mation in confidence, (3) the Report has, in fact, been kept in confidence, and (4) it is not found in public sources. See Kansas Gas and Electric Co. (Wolf Creek 1),
ALAB-327, 3 NRC 406 (1976), Wisconsin Electric Power Co.
(Point Beach 2) , ALAB-137, 6~AEC 491 (1973). Likewise the Congressional Staff's reviewing the Reed Report have recognized the commercial sensitivity of the Report and have conducted their reviews in confidence.
63/
--
The Atomic Energy Act of 1954, as amended, declares it to be the policy of the United States that "the develcpment use and control of accmic energy shall be directed to . . .
strengthsn free competition in private enterprise."
421U.Sa0. f 2011. As a result, one of the purroses of theVA ct itself, and the regulatory program established
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pursuant to the Act, is to " encourage widespreac partici-pation in the development and utilization of atomic energy
.l,(fov. peaceful purposes." 42 U.S.C.5 2013.
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2238 050
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-37 The Board ruled that a protective agreement is sufficient to preclude or minimize the risk of disclosure
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and competitive harm to GE. GE submits that the Board must carefully examine whether or not a protective ord.er will provide adequate protection to GE's interest in the circum-
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stances of this case. -- 'Moreover, the Board must examine
.this consideration in light of the fact that the harm to GE from disclosure, whether inadvertant or not, is both substan-tial and irreparable. If disclosure is made, notwithstanding a protective order, GE's competition cannot erase that dis-closure from its memory.
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'lY ' : Nor can GE avail itself of any
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adequate remedy at law to undo the harm. . !
The Intervenors' consultants are'former GE employees, and it is fair'to characterize their position as opposing nuclear power in general, and GE's participation and effectiveness in the development and deployment of nuclear power plants in par-ticular. Given the circumstances and relationship between GE and the Intervenors' consultants, it should be understandable
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--64/ In connection with the NRC Staff's February 22, 23, and 24 review of the Reed Report, the NRC General Counsel recognized the commercial sensitivity of the Reed Re-port, the possibility of leakage from any government agency, and the need for additional precautions in protecting against disclosure. JCAE Hearings ac 254-55. .'
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that GE perceives a real risk associated with disclosure of 65/
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the Reed Report to the Intervenors' consultants.
This perception of risk is fortified by GE's view that a protective order issued by this Board will'rdt be *
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accompanied by sanctions and enforcement authority against .
disclosure, which are commensurate with the magnitude and
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irreparability of harm to GE. --66/ NRC's Rules.of Practice
.:v . a do not include explicit authority or sanctions in connection
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with possible violations of protective orders, and it is questionable as to whether the Board's authority -- whatever that may be -- reaches technical consultants, as well as attorneys. In short, under the circumstances of this case, it is doubtful that a protective order can protect GE's interests, in a manner consistent with the magnitude and irreparability of harm.
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65/
-- As in Consumers Power Co. (Midland 1 and 2) , ALAB-122, 6 AEC at 329, the Board need not impugn the integrity
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of Intervenors or their consultants.to conclude that any protection accorded to GE in conjunction with dis-closure to these consultants would be "more theoretical than real." See Covey Oil Co. v. Continental Oil Co.,
340 F.2d 993, YV7 (10th Cir.) cert. cenien, 3oo U.S.
964 (1965).
--66/ The inadequacy of sanctions available to a licensing board for the violation of an NRC protective order has becn noted in prior NRC proceedings. Pacific Gas and Electric Co. (Diablo Canyon 1 and 2), ALA3-410, 5 NRC lJ96, 1402 (1977).
t 90 4 A 2238 052
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-39 Finally, GE believes tilat the Board has failed to
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consider a vital policy question in issuing the instant sub-poena. GE believes that issuance of the instant subpoena, particularly in light of the absence of any showing by the
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Intervenors of 1) the relevance, 2) the necessity for pro- . .
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duction of the report to their cross-examination and the rendering of a sound decision in this proceeding, or 3) good
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cause for their untimely motion, will have a decidedly chilling effect upon any future efforts at self-analysis, whether or not those analyses relate to product improvement, or any other 67/
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subject. Unless this adverse impact upon the future conduct of GE's business is recognized and afforded appropriate weight by requiring substantial showings of relevance, necessity, and good cause, GE anc other nuclear industry vendors similarly situated will surely be inhibited from conducting their busi-ness in the smae objective and candid manner as they have in the past.
67/ Such a concern is analogous to the public policy under-lying the inadmissibility of evidence relating to sub-sequent remedial measures in negligence proceedings since permitting such evidence to be admitted would othervise have a chilling effect on the taking of such remedial measures. Limbeck v. Interstate Power Co., 69 F.2d 249 (8th Cir. 1934), McCor=ica on Evicence, '; 275 (2d Ed. 1972).
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GE submits that each of the aforementioned interests have been ignored or inadequately accommodated by the Board's ruling. Moreover, the mere execution of a protective agree-
. ment and protective order does not provide pro.tect'i~on co==ensurate
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- n with the potential for harm to GE. Thus, unless a substantial showing of relevance, necessity, and good cause is made, the ,
motion to quash must be granted.
- z. Issuance of the Subpoena has and will Continue to adversely i= pact the Applicant Unless the Motion to Quash is Granted The Board's ruling ignores or inadequately accom-modates the Applicant's interests. The Applicant has assumed substantial burdens in connection with preparation for these proceedings. As noted previously, the Applicant had a sub-stantial right to rely on the Board's June 29, 1978 ruling, which effectively foreclosed production of the Reed Report prior to cocnencement of the evidentiary hearings. Further, the Applicant had a right to rely upon the NRC Rules of Practice and the case law interpreting those rules. Inasmuch as the instant subpoena was issued without regard for and in abrupt conflict with: 1) the prior ruling of the Board, 2) any showing of excuse for untimely filing, 3) any showing of relevance (=uch less a sufficient showing), and 4) any showing of necessity for a sound decision, or the conduct of meaningful cro s sw exa. min,a tion , the Applicant can fairly be said to have re-
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lied upon the Board's ruling and the NRC Rules of Practice to its detri=ent.
3 20 8 F F ', 2238 054
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4 -41 The Applicant is now f ced with a belated reversal of the Board's ruling without an adequate record basis for that reversal, and the virtual certainty that the issues would be broadened and the proceedings delayed while obj ections to
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production of the Reed Report are resolved. Of course, ,
there is now a much greater potential for delay if the sub-poena is not quashed. The Applicant has a substantial need
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for an expeditious and fair decision, and is utterly blameless with respect to the belated presentation of the instant contro-versy. The Board's forewarnings and cautions about the Inter-venors' narrow use of the Reed Report are small consolation.
The inconsistency. between narrow use and the scope of the 68/
subpoena, - .as well as the immediate prospect of delay re-sulting from p'otracted r litigation, have presented the 68/ Under NRC Rules of Practice, the Reed Report as " pro-prietary commercial information" pursuant to 10 CFR S 2.790(d) is to be afforded the same protection and is subject to disclosure in the same manner as security plans. Pacific Gas and Electric Co. (Diablo Canyon 1 and 2), ALA3-410, 5 NRC 1396, 1402 (1977). As the Appeals Board observed in Diablo Canyon the plans ' relevancy' must be demonstrated 5y ene carev reauest nt access to ene olan.
In ene context of a. request oy an intervenor for access to a security plan, we read that provision as contemplating that only those portions of a clan which an intervenor can demonstrate are relevant to tes contenticns shoulc ce releasec to _ t. A ene parties agree tnat a clan involves not onlv different subject areas but also c fferent leveis of
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2238 055
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t Applicant with a Hobson's choice On the one hand, it may seek reversal of the Board's order, and accept the delays inevitably attending that effort. On the other, it may accept the Board's ruling in spite of the record, and accept the delays inevitably resulting from the belated inj ection of the .
Reed R,epore. in these proceedings.
At the very least, the Applicant's legitimate inter-ests must be recognized and accommodated by requiring a sub-stantial showing of relevance, necessity and good cause for
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the untimely motion. In the absence of any showing in these respects, one must conclude that the Board has utterly dis-
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regarded the Applicant's interests.
- 3. The Board's Ruling Fails to Consider the
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Substantial Harm to the Public Intercst There are at least three vital public interests which are adversely impacted by the Board's ruling. First, the Applicant's ratepayers can now anticipate a certainty of delay and a substantial likelihood that the issues in this
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- 68/ cont . .
detail, and that all the . . . details . . .
may not be necessarv to litizate a carticu-lar contancion. 5 NRC at 140s (emphasis addec).
So also here, the Reed Report is a confidential document which involvec different subject areas and differenc levels of detail, none of which should be released to Intervenors unless and until the Intervenors specifically demonstrate such relevance.
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proceeding will be broadened. The additional costs associated with that delay will inevitably be borne by the ratepayers in the form of higher pouer costs. Inasmuch as the Board has not even paid lip service to the Applicant's interest, and, hence,
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the ratepayer's interest, in. requiring no showing of relevance, necessity, or good cause, and inasmuch as ratepayers are in-distinguishable from_the public at large, the Board's ruling will inexorably result in an adverse impact upon the public interest.
Second, the Board's own prior ruling points to a certainty for delay resulting from granting the Intervenors' belated motion for production of the Reed Report. The over-riding public interest in expeditious decision making is well recognized in the NRC case law, and the ccaflict between the instant ruling and that overriding public interest is self-evident. --69/
Thirdly, production of the Reed Report under the conditions set forth by the Board would contravene two ad-
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dicional public policies. First the potential for impeding free competition in the development of nuclear power is obvious
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--69/ It is by now well-settled that there is a comaelling public interest in arriving at an early decision in nuclearslicensing proceedings. Allied-General Nuclear Services.(Barnwell), ALA3-296 2 NRC 071, oca-ca (1375);
Potemac Electric Power Co. (Douglas Point 1 and 2),
ALAS-277, 1 NRC 539, 352 (1975).
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2238 057 eg I
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-44 enough. Second, the order will flave a decidedly chilling effect and will inevitably hinder the future efforts of GE and other vendors to undertake obj ective, critical, and candid self-analysis toward product i=provement. -70/
, IV. CONCLUSION .
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GE submits that the subj ect subpoena has an
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inadequate basis in the record in terms of relevance, good cause for untimely filing, and necessity for cross-examination or a sound decision in this proceeding. Moreover, issuance
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of the subpoena pursuant to the Board's ruling fails to consider and accommodate the legitimate interests of GE, the Applicant, and'the public. Consequently,.GE's motion to quash must be granted.
Respectfully submitted, 4 C/
gygg Special Counsel
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for General Electric Company 0F COUNSEL .
Kevin P. Gallen .
Morgan, Lewis & Sockius 1800 M Street, N.W.
Washington, D. C. 20036
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Dated: October 30, 1978
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10f0 See n. 67 and acco=panying text at p. 39.
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ATTACIDENT A .
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Attachment 4 to fection II.D
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NUCLEAR REcUtATORY COMMISSION EE
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seasm=cron.o.c. aceas
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ten C. Rusche. Director Office of Nuclear Reactor Regulation
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On February 23-24. 1976, a revicw was r.ade of the GE Nuclear Reactor Study (Reed Report) at the General Electric Offices (GE) in Washington. 0.C. The review of this report was CJee for two sp2cific purposes: (1) to deter:lir.e if any infomation in the report expressing safety concerns by GE had not previously been known to the Nuclear i Regulatory Comission (NRC); and (2) to deter =ine if Section 205 of
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the Energy Reorganization Act of 1974 had been met by the reporting of ^,
significant safety items. In our review of the report we did not '
identify any instances of new areas of safety concern; nor, were any instances identified where significant safety concerns were not previously reported to the NRC. The GE Nuclear Reactor Study consists of the rain report plus ten (10) appendiccs as folicws:
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A. Nuclear Systems B. Fuel
' C. Electrical Control and Instru: entation
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D. Mechanical Systems and Equipment E. Materials. Processes and Chtmistry F. Production. Pr'ocurrent and Construction G. Quality Control Systems Overview H. Management /Infernation Systems *
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I. Regulatory Consideration J. Scope and Standardization In our review of the CE Nuclear Reactor Study it was accarent that the +
study was mainly directed at marketing rather'than safety cer se. The report does contain items shich had iclication on the safe construction and operation of Bus; hcwever. the examples were used to illus trate the point that icer.tified prcblems (some of which had safety significance) do have an effect o't the availability of E'.!R plants and her.ce the cost g and marketing ::ctantial of that plant. To those in<tances. ecce tenolem ;
yyy $>& f q w _~**>e**.=** , n n *J:)M 1 n tne C.i re: ort of tne sicnificar.ce frc:1 a safety stanc;oint of the parbcular- .
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o fen C. Rusche I.
In our revied of the re ort, we did not attemot to provide a track record of hcw the particular issue was reported or cade known to the NRC. rather we were interested in determining whether or not tnc ::RC was Frem car 1 previously made aware of the particular issue as discussed.
- revicw of the safety related items cited in the report it was cur view that rany of the issues were raised by the ;;RC itself in its review of
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specific applications as submitted by CE. We did not find any In exacpics' our
.c - ! whercin the fiRC was not cognizant of the particular concern.
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review there were also issues raised as a consequence of cperating j problems in SVRs and again we did not attemot to trace hcw a reported problem was cemenicated to the NRC. In se=e instances probler:s could have been reported by the operator of the plant or by GE itself, but since we
' did not identify any instance where the flRC was not fully aware of the j event, we made no attempt to track the means of reporting.
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There was one category of.information which we did not have sufficient documentation to datemine if the events identified in the GE i;uclear Reactor Study were themselves reportable. This was in the area of cuality i
assurance where the report indicated that the GE task force identified instances based en their review of audit reports where detailed il procedures related to quality assurance were not followed. The specific
. examples were not provided in the report. The GE representative stated I that the GE licensing group hcwever; had reviewed the soecific ite:s reviewed by the task force itself and had detemined that tac Quality assurance breakdcwn did not have the significance indicsted in Secticn EC5 l for reportability. We are aware that the audit reports menticned in the
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I GE Nuclear Reactor Study are also available to the vendors as well as the
- NRC inspection staff. Since these reports are available and are reviewad
' on a selected basis by the NRC inspcetor:. we did not delve into this issue at any greater depth.
I I
! Warren tiinners, Section Leader Donald F. Knuth. Director Section A. Reactor Systems Eranch Reactor Safety Rascarch, RES Divisica of Systems Safety, fiRR.
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2238 060
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ATTACHMENT B
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I UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION IN THE MATTER OF )
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PUBLIC SERVICE COMPANY OF )
OKLAHOMA, ASSOCIATED ELECTRIC ) Docket Nos.
CCOPERATIVE, INC., AND ) STN 50-556 WESTERN FARMERS ELECTRIC ) STN 50-557 COOPERATIVE, INC. )
)
(Black Fox Stations, )
Units 1 and 2 )
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AFFIDAVIT OF ROBERT M. KETCHEL I, Robert M. Ketchel, being duly sworn, depose
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and state as foll'ows:
- 1. I am Manager, Regulation & Market Support in General Electric's Washington, D.C. office.
..2. On December 19,.1977, I attended a closed meeting with the Staff of the House Subecmmittee on Over-sight and Investigations of the House Committee on Interstate and Foreign Commerce in Washington, D.C. at which the Sub-ccmmittee Staff reviewed the Reed Report and the internal review of the Report prepared by General Electric's Nuclear
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Energv Division with respect to potentially reportable safety information contained in the Report.
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- 3. On February 24, 1978,'I attended another closed meeting with the Subcommittee Staff along with D. K. Willett, the Manager of GE's BWR Product Service Division, and T. R. Dankmeyer, Jr.,
GE Associate Group Counsel, to discuss the actions that GE had taken in response to the recommendations contained in the Reed Report and the. practices which GE was following in its dealings w*ith its -
customers with respect to matters discussed in the Report. Due to the commercial sensitivity of the topics under discussion, this meeting was also closed.
- 4. At the conclusion of the meeting the Subcommittee Staff thanked GE for its cooperation and assured us that it was
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satisfied concerning GE's actions in response to the Reed Report.
The Staff also informed us that the Subcommittee did not have any plans to hold hearings with respect to the Reed Report. No such hearings were held and, to the best of my knowledge and belief, the Subcommittee did not pursue this matter any further.
/ /J $hh no Rocert M. Ketchel Subscribed and sworn to before me this "' day of f '
So. _ r # 5'.
f.t.s. -Uh 9)aL u g,
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Notary'Public j
'My 'C6==hden Ex3:3:3 m.6 H,1932
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. t ATTAC10ENT C t
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!&R G B73
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Dr.' Glen Sherwood. Manager -
Safety & Licensing General Electric Ccmpany 175 Cut tner Avenue San Jose, California 951E5 ' -
Dear Dr. Sherwood:
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As you recall, in testimony -before the Joint Comnittee on Atomic Energy on February 13, 1976, Hr. Hubbard urged that the findings of the General Electric Huclear Reacter Study be shared trith the NRC. Dr. Pced, the director of the study, lates testified that all safety issucs identified in the report had been previously reported to the HRC. Subsequently two senior ccmbers of the NRC staff reviewed the study in the Hashington, D. C. offices of GE eith the purpose of verifying that all items of safety significance identified in the study had been reported to the NRC as required by Section 205 of the Energy Reorganization Act of 1974. Based I on this review, it was concluded that all of the safety-related issues discussed in the study were previously kncun to the staff.
These conclusions recre reported to the Director, HRR and included in testicony to the JCAE. .
In a Deccaber 15, 1977 letter tc Chaiman Hendric, Congressman Dingell, Chaire.an of the Subec=aittee on Energy and Power, requested a list of all safety related itcms discussed in the GE Huclear Reactor
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Study, identification of trhen the HRC became aware of cach itc=, a description of the nature of each probica, and an explanatica of what actions have been taken by either GE or the HRC to correct each probica. Since the NRC staff cembers who reviewed the study did not ret.ain a list of the itc s identified in the study, ue are unable to provide a cc plete response to this request.
Chairman Hendrie replied to Congressman Dingell that the HRC trould request GE to release the study or the list of safety-related issues in ceder ta verify that all of the safety issues identified in the study are being adequately addressed. i~ncrefore, we request that CE
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LIAR 6 1973
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Dr. G1en Sher.vood .
provide us with a copy of the study or a list of the safety issues
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identified in the study. As an aid in our response to Congress.':en l Dingell, we wish to meet with you to confirm thTt we understand the
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- nature of each issue and the status of actions taken by GE to resolve them. If we require further written information, we will advise you subsequent to that meeting. ,
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Sincerely,
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- or :- ' 7.s- W ge;,a J. i..dtson.
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Roger J. [httson, Director
- - - - - - - . - -- Division of Syste:s .Safoty
Enclosures:
Dingell letter dtd 12/15/77 Hendrie response dtd 2/9/78 Rusche m2mo dtd 2/25/76 cc: L. Gifford, GE
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I Distribut6cn:
Central Files hRR Reading h3 Reading 2238 064 RJit Reading R. Boyd V. Stello H. Denton
0 f00 Lf
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( ONRR HRR: DSS
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.N RR: DSS NRR: DSS 2s 3,0. 8.,/'
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utm -- W Ne h m odnr- ECCase RJ!httson
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GENER AL h ELECTRIC nuct.eanenung PROJECTS DIVISION GENERAL CLECTRIC CCMPANY.17s CURTNER AVE., SAN JCSE. C UFCRNIA 95125 MC 676, (408) 925-5040
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March 22,1978 Dr. Roger J. Mattson, Director Division of Systems Safety " '
U. S. Nuclear Regulatory Commission ,
Washington, D. C. 20555
. .
Dear Dr. Mattson:
SUBJECT:
REQUEST FOR REED REPORT INFORMATION I am responding to your letter of March 6,1978, in which you requested that General Electric provide either a copy of the Nuclear Reactor Study (known as the Reed Report) or a list of the safety issues identified in the Study. In addition, you requested a meeting to discuss each issue and the actions taken by GE to resolve them.
In your letter you stated that Congressman Dingell had requested that
.the Nuclear Regulatory Commission (NRC) provide a report on the safety-
'related items discussed in the GE Nuclear Reactor Study. Your letter stated that you were unable to provide a complete response to Congressman Dingell's request because the NRC Staff members who had previously reviewed the Study did not retain a list of the safety items. This situation lead to your request to us.
Attached to this letter is a list of the issues in the Reed Report which GE's Safety and Licensing component had identified in 1975 as having some safety significance. A determination was then made by Safety and Licensing as to whether any of these items needed to be reported to the NRC under Section 206 of the Energy Reorganization Act of 1974. In each case it was determined either that .the item was not reportable or that it was
,, already known to the NRC, -
.' The iist is marked " General Electric Ccmpany Proprietary Informaticn."
We request that it be withheld from public disclosure. Also attached to this letter is an affidavit stating the basis for this request, particularly the commercial sensitivity of the list.
As has previously been discussed with the NRC, the Nuclear Reactor Study was conducted uncier the direction of Dr. Charles Reed, a Senior Vice President of General Electric Ccmpany, as a product improvement study.
General Electric's purpose in c:nducting the Study was to identify the
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improvements required in the Soiling Water Reactor to make it a demonstrably superior product - with the same repu;ation for quality and reliability as GE's turbine generators. The Cemeany has conducted similar studies in many technology areas, including ccmputers, aircraf t engines, plastics, etc.
C$[$M4 2238 065
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,- GENERAL @ ELECTRIC Dr. Roger J. Mattson Page 2 -
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March 22, 1978
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The Nuclear Reactor Study was not a safety study, and the report itself' does not specifically identify which of the issues discussed have safety or licensing implications.
We certainly wish to cooperate with you in answering questions concerning this m tter. I would be happy to meet with you at your convenience to discuss the current status of the issues contained on the attached list.
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Very truly yours. -
[ #
[ Glenn G. Sherwood, Manager
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Safety and Licensing Operation GGS:daj/77-78 Attachment
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cc: L. S. Gifford -
bec: AP Bray
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R. M. Ketchel TR Dank:neyer. -
J. Restrick WR Morgan
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GENERAL ELECTRIC C0MPANY I AFFIDAVITh.
I, Glenn G. Sheracod, being duly sworn, depose and state as follows:
- 1. I am Manager of Safety and Licensing Operation, General Electric Company, and have been delegated the function of reviewing the information described in paragraph 2 which is sought to be withhcid and have been authorized to apply for its withholding. -
- 2. The information sought to be withheld is a list of safety-related items derived from General Electric Company's Reed Recort and attached to a letter, dated March 22, 1978 frcm Dr. Glenn G.
Sherwood to Dr. Roger J. Mattson of the U.S. Nuclear Regulatory Commission.
- 3. In designating material as proprietary, General Electric utilizes the definition of proprictary information and trade secrets set forth in the American Law Institute's Restatement Of Torts, Section 757. This definition provides:
"A trade secret may consist of any formula, pattern, device or
. . . . . . compilation of information which is used in one's business and
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. which gives him an opportunity to obtain an advantage over -
? ^ .- competitors who do not know or use it. .. . A substantial element'of secrecy must exist, so that, except by the use of improper means, there would be difficulty in acquiring informa-tion. . . . Some factors to be considered in determining whether given information is one's trade secret are: (1) the extent to
. which the information is known outside of his business; (2) the extent to which it is known by employees and others involved in his business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended by him in developing the information;
, -(6) the ease or difficulty with which the information could be g-'
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properly acquired or duplicated' by others."
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- 4. Some examples of categories of information which fit into the definition of proprietary information are:
- a. Information that discloses a process, method or apparatus where prevention of its use by General Electric's competitors without license from General Electric const tutes a competi-
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tive e,concmic advantage over other companies;
- b. Information consisting of supcorting data and analyses, includ-ing test data, relative to a process, method or apparatus, the application of which provide a competitive econcaic advantage, e.g. , by optimization or improved marketabili ty;
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- c. Information which if used by a competitor, would reduce his expenditure of resources or' improve his conpetitive position in the design, manufacture, M1 ipment, installation, assurance C of quality or licensing of a similar product;
- d. Infomation which reveals cost or price information, produc-tion capacities, budget levels or comercial strategies of General Electric, its customers or suppliers;
- e. Information which reveals aspects of past, present or future General Electric customer-funded development plans and programs of potential comercial value to General Electric; .
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'f. Information which discloses patentable subject matter for
, which it may be desirable to obtain patent protection; .
- g. Infomation which General Electric must treat as proprietary according to agreements with other parties.
- 5. In addition to proprietary treatment given to material meeting the standards enumerated above, General Electric customarily maintains in confidence preliminary and draft material which has not been subject to complete proprietary, technical and editorial review.
This practice is based on the fact that draft documents eften do not appropriately reflect all aspects of a problem, may contain
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tentative conclusions and may contain errors that can be corrected during normal review and approval procedures. Also, until the final document is completed it may not be possible to make any -
definitive determination as to its proprietary nature. General Electric is not generally willing to release such a document to the general public in such a preliminary form. Such documents are, however, on occasion furnished to the NRC staff on a confidential basis because it is General Electric's belief that it is in tne public interest for the staff to be promptly furnished with signifi-cant or potentially significant information. Furnishing the docu-ment on a confidential basis pending completion of General Electric's internal review permits early acquaintance of the staff with the information while protecting General Electric's potential proprie-tary position and permitt;ng General Electric to insure the public documents are technically accurate and correct.
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- 6. Initial approval of proprietary treatment of a document is made by the Subsecticn Manager of the originating component, the man most likely to be acquainted with the value and sensitivity of the information in relation to industry knowledge. Access to such documents within the Company is limited cn a "need to knew" basis and such documents at all times are clearly identified as proprietary.
. s g N' h {tc:.:(The
" procedure for approval of external release of such a document is review by the Sction Manager, project Manager, Principal Scientist or other equivalent authority, by the Section Manager of the cognizan Marketing function ,(or his delegate) and by the Legal
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. Operation for :hnical content, competitive e. .ct and deter-
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mination of the accuracy of the proprietary designation in accord ' '
ance with the standards enumerated above. Disclosures outside
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General Electric are generally limited to regulatory bodies, cus-tomers and potential customers and their agents, suppliers and licensees only in accordance with hppropriate regulatory provisions or proprietary agreements.
- 8. The document mentioned in paragraph 2 above has been evaluated in accordance with the above criteria and procedures and has been found to contain information which is proprietary and which is customarily held in confidence by General Electric.
- 9. The information sought to be withheld consists of a list of safety-related items from the candid findings and conclusions of a task .
force created to improve the availability and reliability of the General Electric boiling water reactor. As such, this summary list is of important competitive commercial value.
- 10. The information, to the best of my knowledge and belief, has consis-tently been held in confidence by the General Electric Company, no public disclosure has been made, and it is not available in public sources. -All disclosures to third parties have been made pursuant to regulatery provisions or proprietary agreements which provide for maintenance of the information in confidence.
- 11. Public disclosure of the information sought to be withheld is likely to cause substantial harm to the competitive position of the General Electric Company and deprive or reduce the availability of profit making opportunities because disclosure could enable competitors to obtain a better understanding of our product concerns and' programs and utilize this information so as to adversely impact on our sales. Additionally, the value of reviews such as that conducted by General Electric depends on the participants providing their frank opinions on the matters under review. Public disclosures of the findings and opinions could well jeopardize future efforts of this type at product improvement.
Glenn G. Sheracod, being duly sworn, deposes and says that he has read the foregoing affidavit and the matters stated therein are true and correct to the best of his knowledge, information, and belief.
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Executed at San Jose, California, this/d day of 7
%[ ,197[
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k xt Glenn G. Snerwcoo O
General Electric Company STATE OF CALIFORMIA COUNTY OF SANTA.lCLARA
)) ss:
2238 .069
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Subscribed and sworn before me thi $ day of
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, [ 197[
.- m1 '-- . * -
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,< t OF FICI At. SE A L 4
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k IMARY PUGLIC IN AT/FGR 3A;0
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-.3 Now nsec-aucmA COUNTY AI'D STATE
.. 7 sonmn.mm.
- A .
- ATTACHMENT E
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G E N E R A L h E L E CT Pil C nuctE^n EnEncy
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P R 'O J E C T S DIVIS10f
- GENERAL ELECTRIC COMPANY.175 CURTNER AVE., SAN JOSE. CALIFORNIA 95125 MC 682, (408) 925-5040 May 26, 1978 .
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U. S. Nuclear Regulatory Commission Office of Nuclear Reactor Regulation 11ashington, D. C. 20555 Attention: Dr. Roger J. Ma.ttson, Director Division of Systems Safety Gentlemen:
SUBJECT:
REQUEST FOR REED REPORT INFORMATION This is to respond to your verbal request of May 1, 1978, wherein you asked that General Electric provide a status report on the 27 licensing issues identified by General Electric in the Nuclear Reactor Study (known as the Reed Report and completed in 1975). This material is to assist you in answering questions by Congress as to the status of the 27 licensing issues.
Attached to this letter is a summary of the issues in the Reed Report which M'g Safety (and Licensing component had identified in 1975 as having'some safety
- significance. A determination was then made by Safety and Licensing as to whether any of these items needed to be reported to the NRC under Section 205 of the Energy Reorganization Act of 1974. In each case it was determined that the item was not reportable or that it was already known to the NRC.
This material is marked " General Electric Company Proprietary Information."
\le request that it be withheld from public disclosure. Also attached to this letter is an affidavit stating the basis for this request, particularly the commercial sensitivity of the list.
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As ha previously been discussed with the NF0, the Nuclear Reactor Study was conducted under the direction of Dr. Charlet Reed, a Senior Vice President of yeneral Electric Company, as a product improvement study.
General Elect'ric's purpose in conducting the study was to identify the improvemer's required in the Boiling Water Reactor to make it a demonstrac'y superior product, with the same reputation for quality and
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reliability as GE's turbine generators. The Ccmpany has conducted i' ' -
similar studies in many technology areas, including computers, aircrcft engines, plastics, etc.
2238 070
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GENERAL h ELECTRIC .
U. S. Nuclear Regulatory Commission ATTN: Dr. Roger J. Mattson -
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Page 2 The Nuclear Reactor Study was not a safety study, and the report itself does not specifically identify which of the issues discussed have safety or licensing implications.
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, We trust that the enclosed material provides the status you requested.
- Very truly yours,
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Glenn G. Sherwood, Manager Safety and Licensing Operation GGS:csc/260 Attachments cc: L. S. Gifford (Wash.) .
R. M. Ketchel (Wash.) ,...-'
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J. Restrick (Fairfiel'd)- * .. ._
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GENERAL ELECTRIC C0MPANY AFFIDAVIT I, Glenn G. Sherwood, being duly sworn, depose and state as follows:
- 1. I am Manager of Safety and Licensing Operation, General Electric Company, and have been delegated the function of reviewing the information described in paragraph 2 which is sought to be withheld and have been authorized to apply for its withholding.
- 2. This information sought to be withheld is a summary status by '
General Electric of the twenty-seven (27) safety related items derived from General Electric Company's Reed Repo"t and attached to a letter, dated May 26, 1978 from Dr. Glenn G. St.c nvood to Dr. Roger J. Mattson of the U. S. Nuclear Regulatory Commission.
- 3. In designating material as proprietary, General Electric ut"
- es the definition of proprietary information and trade secrets .
forth in the American Law Institute's Restatement of Torts, Section 757. This definition provides:
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"A trade secret may consist of any formula, pattern, device or '
compilation of information which is used in one's business and
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which gives him an opportunity to obtain an advantage over competitors who do not know or use it.... A substantial element of secrecy must exist, so that, except by the use of improper means, there would be difficuity in acquiring information...
Some factors to be considered in determining whether given
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information is one's trade secret are: (1) the extent to which the informatie is known outside of his business; (2) the extent to which it~is kncwn by employees and others involved in his business; (3) the extent of measures taken by him to guard the secrecy of the information; (4) the value of the information to him and to his competitors; (5) the amount of effort or money expended by.him in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others."
- 4. Some examples of categories of information which fit into the definition of proprietary information are:
- a. Information that discloses a process, method or apparatus where prevention of its use by General Electric's competiters without license from General Electric constitutes a competi-tive economic advantage over other companies;
- b. Information consisting of supporting data and analyses, including
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test data, relative to a, process, method or apparatus, the application of which provide a competitive economic advantage, e.g., by optimization or imp /oved marketability; f _ ___ _
2238 072
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- c. Information which if used by a competitor, would reduce his expenditure of resources or improve his competitive position in the design, manufacture, shipment, installation, assurance of quality or licensing of' a similar product; d.' Information which reveals cost or price information, produc-
. tion capacities, budget levels or commercial strategies of General Electric, its customers or suppliers;
- e. Information which reveals aspects of past, present or future General Electric customer-funded development plans and programs of potential commercial value to General Electric;
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- f. Information which discloses patentable subject matter for which it may be desirable to obtain patent protection;
- g. Information which General Electric must treat as proprietary according to agreements with other parties.
- 5. In addition to proprietary treatment given to material meeting the standards enumerated above, General Electric customarily maintains in confidence preliminary and draft material which has not been subject to complete proprietary, technical and editorial review.
> This practice is based on the fact that draft documents often do not appropriately reflect all aspects of a problem, may contain
~ tentative conclusions and may contain errors that can be corrected during normal review and approval procedures. Also, until the final document is completed it may not be possible to make any definitive determination as to its proprietary nature. General Electric ~is not generally willing to release such a document to the general public in such a preliminary form. Such documents are, however, on occasion furnished to the NRC staff on a confidential basis because it is General Electric's belief that it is in the public interest for the staff to be promptly furnished with significant or potentially significant information. Furnishing the document on a confidential basis pending completion of General Electric's internal review permits early acquaintance of the staff with the information while protecting General Electric's potential proprietary position and permitting General Electric to insure the public documents are technically accurate and correct.
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- 6. Initial approval of proprietary treatment of a document is made by the Subsection Manager of the originating component, the man most likely to be acquainted with the value and sensitivity of the information in relation to industry knowledge. Access to such documents within the Company is limited on a "need to know" basis and such documents at all times are clearly identified as proprietary.
> 7J'. The procedure for approval of external release of such a document is review by the Section Manager, Project Manager, Principal Scientist or other equivalent authority, by the Section Manager of the cognizant Marketing function (or his delegate) and by the Legal Operation for technical conten't, competitive ef fect and deter-mination of the accuracy of the proprietary designation in accord-ance with the standards enumerated above. Disclosures outside
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General Electric are generally limited to regulatory bodies, customers and potential customers and their agents, suppliers and licensees only in accordance with appropriate regulatory provisions or proprietary agreements.
- 8. The document mentioned in paragraph 2 above has been evaluated in accordance with the above critoria and procedures and has been
- found to contain information which is proprietary and which is customarily held in confidence by General Electric.
- 9. The information sought to be withheld consists of a list of safety-related items from the candid findings and conclusions of a task force created to improve the availability and reliabilty of the General Electric boiling water reactor. As such, this summary list is of important competitive commercial value.
- 10. The information, to the bast of my knowledge and belief, has consistently been held in confidence by the General Electric Company, no public disclosure has been made, and it is not available in
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public sources. All disclosures to third parties have been made pursuant to regulatory provisions or proprietary agreements which provide for maintenance of the information in confidence.
- 11. Public disclosure of the information sought to be withheld is likely to cause substantial harm to the competitive position of the General Electric Company and deprive or reduce the availability of profit making opportunities because disclosure could enable competitors to obtain a better understanding of our product concerns and programs and utilize this information so as to adversely impact on our sales. Additionally, the value of reviews such as that conducted by General Electric depends on the participants providing their frank opinions on the matters under review. Public disclosures of the findings and opinions could well jeopardize future efforts of this type at product improvement.
Glenn G. Sherwood, being duly sworn, deposes and says that he has read the foregoing affidavit and the matters stated therein are true and correct to the best of his knowledge, information, and belief.
Executed at San Jose, California, this day of )/ ,197[
t r Glenn G. Sherwood
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General Electric Company STATE OF CAL {FORNIA )
COUNTY OF SANTA CLARA ) ss: 2238 074
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Subscribed and sworn before me thi d y of
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i A-u-t ' S
~ ' a 1 OFFICIAL SZAL
,3 J. PATE' CIA MASTERS (,
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NOTMY PUBLIC ILAND FG 5 AID NOTAAY PUCUC
- CAUTORMA COUNTY AND STATE
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[ % UNITED STATES j/}@ g ij
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NUCLEAn nEGULATORY CoMMissIOfJ WASHINGTON. D. C. 20355 k,
4 July 10,1978
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Dr. Glenn Sherwood General Electric Company
'175 Curtner Avenue San Jose, California 95125
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Dear Dr. Sherwood:
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Subject:
Request for Withholding Information from Public Disclosure By your application and affidavit dated !!ay 26, 1978, you requested that a list and summary status report of the 27 safety-related items derived from the General Electric Ccmpany's " Reed Report", which were attached to your letter, be withheld from public disclosure.
In accord with Section 2.790(b)(1)(ii) of 10 CFR Part 2 of the NRC regulations, your affidavit contains a statement of the reasons on the basis of which it is claimed that the infomation should be withheld from public disclosure. ~
In essence, ycur claim is that public disclosure of the list of safety-related itcas and the sumary status report is likely to cause substan-tial harm to the competitive position cf G.E. He agree that if the t' Reed Report" in its entirety were submitted, it should be afforded the protection of proprietary information under the Commission's regula-tions because it is a product improvement study of important ccmpetitive value and because disclosure of this sort of study could act to inhibit thoughtful self-criticism by nuclear equipment vendors since it would enable competitors to obtain a better understanding of a manufacturer's product concerns and programs.
. The aggregate list and summary status of the 27 safety-related items is derived from the report and therefore can be afforded the same protection of proprietary informatien. Because of the historical con-text of a product improvement study, we agree that the public disclosure of the aggregate list of the 27 issues could cause substantial harm to the competitive position of G.E.
He have reviewed your application and based on the requirements and criteria of 10 CFR 2.790 have detemined that the list of safety-e a related items, and the su=ary status report sought to be withheld E contain confidential or privileged ccmmercial information.
We also have found at this time that the right of the public to be fully apprised as to the bases for and effects of licensing actions 2238 075
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Dr. Glenn Sherwood July 10,1978
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is not affected, and therefore does not outweigh the demonstrated concern for protection of your competitive position. Accordingly, we have public determined that the information should be withheld frca disclosure.
We therefore approve your request for withholding pursuant to Section 2.790 of 10 CFR Part 2, and are withholding the list of safety-related items and summary status report from public inspection as proprietary. ,
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Withholding from public inspection shall not affect the right, if any, of persons properly and directly concerned to inspect the documents.
If the need arises, we may send copies of this information to our consultant 5 working in this area. We will, of course, assure that the consultants have signed the appropriate agreements for handling proprietary data.
. Sincerely,
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Roger o L MAA tt on, Director Division of Systems Safety
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Office of Nuclear Reactor Regulation cc: L. Gifford, GE Bethesda .
NRC Public Document Room 2238 076
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GENERAL E L E C T R I C C O ?! P A ll 'l
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I, (TT-n G. Sheru:il, bieJ daly ax;:=2, Qx- a=d strta as felim .
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- 1. I I:12' = .w." of safety s=d Liew.si.y cpe::tica in the 77-IhmEhcid
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- 2. I have reviewed tb P-'m" Pac :=- ShSj 6d Joly 1, IS75
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- 4. Ih edidi"m to ti:a n:cd W 1-1"r, there c=n tw Wen, -
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ATTAC!.!RCIT I (1 ..
NUCLEAR REACTOR STUDY
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Exec u ti v e su=a ry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I Es tabl i s h:ent of study. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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11 Su= nary of Findings and Recccmendations A. Pluclear Systc2s....................................... 27
- 8. Fue1................................................... B4 C. El ectri cai , dentro l and Instn=entati on. . . . . . . . . .. . . . . 70 D. H2chani cal Systens a nd Equip =ent. . . . . . . . . . . . . . . . . . . . . . 80 E. Materiai s, Pmcass es and Che:ristry. . . . . . . . .... .. .. . . . . 97 F. Producti ca , Pren t and Ccnstructi on . . . . . . . . . . . . . . 107
, , , ,
- ; n i) G_ Myb. s < Quality Centrol Systm 0vervies.. .. . . .. . ..... .. . . . . . . 120 -
H. tissgmt/Infctmti en systens. . .. . . . . .. . . . . . . . . . . . . . . 124 I. Regul atory Ccasi dera ti cas. . . . . . . . . . . . . . . . . .. . . . . . . . . . . 130 J. Scepe and Standardi:sti en. . . .. . . . . . . . . . . . . . . .. .. . . .. . . 141
.
.
Appendix A Dascripticn and Evolutien of The Eoiling patnr Reactor (Es!)
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Appendix B Bicgrachies
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2238 081
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- M...- UNITED STATES '0F AMERICA l'I 9 2
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k NUCLEAR REGULATORY COMMISSION q.jauhta
.
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.
.
.
-- -
IN THE MATTER OF ) - -
) -
PUBLIC SERVICE COMPANY OF ) Docket -Nos .
OKLAHOMA, ASSOCIATED ELECTRIC ) STN 50-556 COOPERATIVE, INC., and ) STN 50-557 WESTERN FARF.:.RS ELECTRIC )
C00?IRATIVE, INC. )
) Attachment 2 (Black Fox Stations, )
Units 1 and 2) )
.
PROTECTIVE ORDER
.
-
. On October 18, 1978 this Board issued a subpoena duces tecum to the General Electric Company (GE), rhe reactor
- canufacturer for Black Fox Station Units 1 and 2, directing GE to produce the Nuclear Reactor Study regarding GE's SWR Nuclear Steam Supply Syste= (NSSS) which had been prepared under the direction and supervision of Dr. Charles Reed in
.
1975 ("The Reed Report"). ,
GE appeared specially and coved to quash this subpoena on October 30, 1978, asserting, inter alia, that the subpoena was unti=ely and overly broad and that production of the report could result in co:petitive
.
harm to GE because the report contained confidential co==er-cial,information. The Applicants and Intervenors filed responses to.this cocion on Nove='cer 7, 1978 and the NRC Staff responded on Nove=ber 9, 1978. The Board heard oral 280 8? 9, 2238 082
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- A -2 ,
argument on GE's motion to quash. on December 13, 1978 in Tulsa, Oklahoma. .
In response to a suggestion made by the Board during the course of this oral argument, shortly thereafter . .
- ..GE re'sumed negotiations with the other parties.co this pro- .
. .ceeding in an attempt to reach a settlement agreement with -
-respect to the production of the Reed ' Report. In a conference
,
call among counsel for all parties and the members of the Board on January 2, 1979, GE, in order to avoid the possibility of protracted litigation on this issue, made an offer of settle-ment egarding the production of this report. This offer of
'
, settlement was formalized in GE's letter of the same date to -
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'
'
- the Board and all parties. . ,
Under the basic terms of this settlement, GE offered to: 1) make the entire Reed Report available to the Board in confidence, 2) prepare a verbatim extraction of the Report in-
'
sofar as it relates to intervenor's contentions and Board ques-tions and make this extraction available to counsel for all parties subject to a protective agreement, and 3) make the Reed Report available to counsel, again subj ect to a protective agreement, for the purposes of evaluating the faithfulness of
.
this extraction. Moreover, GE also offered to consult with
,
counsel and, if necessary, seek rulings from the Board in order to resolve anf disputes over the faithfulness of GE's extraction of the report. GE also offered to extract and make available to sfio 6e' 2238 Ob3
. . - - _ .
-d *
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-3 counsel and consultants for all parties, again subj ect to a protective agreement, these and any other portions of the Reed Report which the Board determined to be necessary for consideration in this proceeding.
The Board was advised during the conference call that the parties were in agreement on all aspects of the GE .
offer of settlement except one; namely, wheth r the entire Reed Report should be made available to counsel for the sole
_
purp'ose of evaluating GE's extraction of the report with re-spect to the existing intervenor contentions and Board ques-tions and other matters which the Board determined to be neces-
~
sary for consideration (the view expressed by counsel for GE, the Applicants, and the NRC Staff) or whether the report should also be made available to counsel for the purpose of enabling counsel to independently propose additional matters to the Board for consideration in thir proceeding (the view expressed by counsel for intervenors). Upon consideration of the views expressed by counsel for all parties, the Board concluded that the entire report should be made available only for the former purpose and so ruled.
Subj ect to that ruling, the Board finds the proposed
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offer of settlement to be entirely reasonable and acceptable
-
and adopts it without change, thereby rendering coot GE's 2 Jr-m'o tidn*S I) to quash the subpoena.
2238 084
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mem
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NOW THEREFORE, pursuant. co 10 CFR S 2.720(f) and 2.740(c),
/ '- - . - 1. IT IS HERE3Y ORDERED that since a rational : ..
-
-basis exists to treat as confidential the Nuclear Reactor
...
- . Study prepared under the direction and supervision of Dr.
~
Charles Reed of the General Electric Company in 1975'("The '...
--
Reed Report") and there are no countervailing considerations militating in favor of public disclosure of this report which
-
clearly outweigh the potential harm to the General Electric
.
Company which might arise from such disclosure, the scope of discovery of said report shall be linited to protect agains,c disclosure of the information ~ contained in the report to the general public. .
- 2. IT IS HEREBY FURTHER ORDERED that, subj ect to paragraphs 3 and 4 of this Order, those portions of the Reed Report, which are relevant to Intervenor Citizen's Action For Safe Energy's contentions and Board questions or otherwise necessary for consideration in this proceeding in accordance with the procedure specified in paragraph 3 of this Order, shall be produced.
- 3. IT IS HERE3Y FURTHER ORDERED that the discovery
.
granted herein be conditioned as follows:
.
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2238 085
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- a. GE will nake th,e Reed Report and the
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related Sub-Task Force Reports avail-able to the Board in confidence. .
- b. GE will prepara a verbatim extraction
- - of the Reed Report and the related Sub- ,
'
Task Force Reports, insofar as those .
documents relate to che intervenor's -
contentions and Board questions in the
,
Black Fox proceedings, and will make it available to counsel subj ect to the provisions of this Order and the
' - -
protective a5reement contained in Attachment A hereto.
.
.
.
- c. GE will cake the Reed Report and the re-
-
laced Sub-Task Force Reports available to counsel subj ect to the provisions of
.this Order an'd the protective agreecent contained in Attachnent 3 hereto.for the
,
purpose of evaluating the faithfulness of GE's verbatin extraction.
- d. Upon review by counsel, GE will consult with counsel for all parries in an atze pt
-
to resolve any disputes concerning the
.
fcithfulness of extrac icn, and failing
~+ resolution on any nacrer or natters, counsel 18 0 "">~ "~
t-2238 086
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.-6 -
.
-
- will participate in oral argument in
,
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camera before the Board in order to _
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obtain Board rulings resolving any dis- ,
puted matters. . . -
'
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- e. In the event that the Board's review of ,,
..
,
- ' - the Reed Report and the related Sub-Task Force Reports raises any additional -
'
matters beyond the existing intervenor contentions and Board questions which the Board determines to be necessary for consideration in these proceedings, GE
-
will make available to counsel, subj ect
,
to the provisions of this Order and the protective agreenent contained in Attach'-
ment B hereto, a verbatic extraction of those docu=ents insofar as they relate to any such additional catters. The parties will undertake the steps identified in
/
-
sub-paragraphs c. and d. above in regard to the =atters identified in sub-paragraph e . '. .
- f. GE will cake portions ~of the verbati: ex-
-
tractions of the Reed Report and related
.
Sub-Task Force' Reports ultirately resulting from Board rulings or agreenents of counsel
,,
~ 2238 087 enu
_ . . _ .__ . . _ . _ ._ _ . __. __
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.] .
. . . .
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-7 in accordance with sub-paragraphs
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- d. and e. above available to consul-tants for the parties subj ect to the provisions of this Order and the pro-
~ ";- tective agreement contained in Attach-
.
nent A. hereto.
- - -
- 4. IT IS HERE3Y FURTHER ORDEEED that in the event Intervenors need to utilize any of the infor=ation discovered
,
pursuant to this protective order during the evidentiarf hearing in this proceeding, the information shall onl'y be dis-closed in camera under the conditions set forth in paragraph 3 hereof and the protective agreenents accached hereto and the transcript of such porrion of the evidentiary hearing shall
-
be sealed.
FOR THE ATOMIC SAFITY AND LICENSING BOARD
.
hs 0 din
~
(b O&~
y
.,
Sheldon J. Jolfe, y Esquire
- Chairnan Dated at Bethesda, Marvland this , 5th day of January , 1979 2238 088
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Attachment 3 3 '
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.}
- r FREEDOM OF INFORMATION ACT REQ,UE.3T l EREEDOM OF INFORMATION i* Office of Administration ACT REQUEST Director, U. S. Nuclear Herulato"y Commission 80 T/? - 7 9-5/
'
'! Washino; ton, D. ( 2055
- M ~77
Dear Madam or Sir:
By this letter, I request disclosure of copies of the Reed Report which is in the possession of the NRC. The Reed Report was com-piled by 'lestinghouse's own engineers and details 27 safety prob-lens with their boiling uater reactor. This report came into the possession of the URO during the course of the licensing hearings concerning Black Fox 5tation i a 2 which are proposed to be con-structed near Inola, Oklahoma.
This request is made pursuant to 5 USC sec. 552.
I am willing to pay reasonable standard charges for actual search time and copying fees. However, I would request waiver or reduc-tion of the fee in that disclosure is in the public interest and primarily benefiting the general public, dee sec. 552 (a)(4)( A) .
I further request a response within ten days.
It is my strong belief that this Reed Report is available to the public and not exempt under the " trade secrets" or " commercial or
,
financial matters" exemptions. darety relates to safety, not bus-iness.
l If any portion of this request is deemed denied, I request a de-tailed statement of reasons for the withholding.
i
Iven if your agency feels exempt, I am asking you to invoke your i
discretionary powers which permit disclosure in the public inter-est.
l I
'
g Brian D. !?unt 4M g Vp
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3s3a E. 3 st. l R N M*..'# b Tulsa, Ok. 7h1. 20
-
February,t3, 1979 M $ eg.4* '
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% LEAR S. KOSIK
)
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g(,,s 1g y ATTORIFJf AT COf 9 3454 Cornell Place
{
$[4 g~ . - Cincinnati, Ohio 4522c (513) 221-7084 Attachment 4
.-
3
% l' arch 7,1979
' ' '
~
FREEDOM OF INFORMATION ACT. REQUEST pgg 70 .
Chairman f United States lluclcar Regulatory Commission gh a Hashington, D.C. 20555
Dear Sir:
.
This is to request that your agency provide a copy of the Reed Report, a document compiled by General Electric Company, concerning the safety of certain types of nuclear potter plants, uhich report has come into the pocsession of your agency in the course of a licencing hearing for a nuclear
- power station. This request is made purcuant to the Freedon k of Information Act 5 U.s.C. sec.552, and your acency's implementing regulations.
I understand that I am obligated to pay costs of duplication of the above requested document. Plearc send an invoice for those costs along with the copy of the document.
Very truly yours,
/ $
Leah S. Kosik 2238 090
.
,
~ / // V Y . s'
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'
GENERAL
.
.ELEUTDIC N6)bb
- orN CHAL I;t cCT Rf C COfWAfdY /2 //y) 5 f C.
IF b Cun tN L'm Avg esur f.AN .#0LE,CattrouweA u t,e P S
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Y 08 - March 15, 1979 NN
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Mr. Samuel J. Chilk t
, .
q$ 4.* /0
.
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Secretary Attachment 5
' *y United States Nuclear ~
Regulatory Commission "*..
Washington, D. C. 20555 "
.
~
Dear Sir:
_
-
.
This is to request confirmation that certain General Electric (CE) proprietary information furnished, in confidence and subject to a protective order and agreements, to several NP,C employces in connection
.
vith the Black Fox proceedings (Docket Nos. STN 50-556 and 50-557) is exempt from disclosure pursuant to 10 C.F.R. 5 2. 790 ar.d 10 C.F.R. Part 9 of the Cocmission's regulations. The information in question consists '
of a CE Nuc1 car Reactor Study on the subject of GE's Boiling Water Nuclear Steam" Supply System which had been prepared under the direction and supervision of Dr. Charles Reed in 1975 (the Reed Report) and verbatim extractions of certain portions of that Report relating to the Intervenor contentions and Board questions in the Black Fox construction permit proceedings. .
The, NRC 'has previously found, by 1cteer dated July .10,1978, that a list of certain issues in the Reed Report, and a status report on those issues, which were submitted to the NRC Staff by CE's Ictters dated March 22, and May 26, 1978, respectively, were exempt from dis-closure pursuant to 10 C.F. R. 5 2.790. While it would follow a_ fortiori
,
that the Reed Report and verbatim extractions therefrom are similarly exempt, the commercial sensitivity of those documents warrants our obtaining confirmation of that fact. Pursuant to the Atomic Safety and Licensing Board (ASLB) Protective Order, dated January 5,1979, and the related protective agreements, a copy of the Reed Report and the verbatic extra.ctions were furnished to the ASLB in confidence for its review and use in connection with the Black Fox proceedings. Pursuant to the sa=c Protective Order and agreements, the aforementioned verbatim extractions were similarly furnished in confidence to counsel and certain designated
' consultants for all parties, including the NRC Sta f f, for use in the Black Fox proceedings and any subsequent appeals. In addition, those portions of the, hearings that portained to the Reed Report were held e camcra.
.
2238 091
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}!r. , Samuci J. Chilk , }tarch 15, 1979
.
In order to assure that the confidentiality of the information furnished to the ASLB and Staff is continued in accordance with the ASLB's duly issued and authorized Order, we are herewith submitting the attached
~
af fidavit and requesting confirmation that the subject information is exempt from disclosure pursuant to 10 C.F.R. 5 2.790 and 10 C.F.R. Part 9.
. '
.
Respectfully submitted,
.- M .
- '
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TRD:rk Attachment ,
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2238 092 .
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GENERAL ELECTRIC C0MPANY
-
.
- AFFIDAVIT OF
. .
WILLIAM J. ROTHS
.
'
I, William J. Roths, being duly sworn' depose and state as follows:
,
.
- 1. I am Manager of the Reliability Engineering Operation for General Electric Company and have been authorized by the General Electric Company to state that the General Electric Company considers the information described in paragraph 2
-
as proprietary information and exempt from disclosure pursuant to 10 C.F.R. 5 2.790 and 10 C.F.R. Part 9 of the Commission's
-
regulations. ,
- 2. The Nuclear Reactor Study on the subject of'CE's Boiling Water Reactor Nuclear Steam Supply System which has been prepared under the direction and supervision of Dr. Charles Reed in 1975
,
and known as the '.' Reed Report" was the product of a study con-ducted at the request of the Chairman of the Board of . General
.
Electric Co=pany by a task force chaired by Dr. Charles E. Reed, Senior Vice President for Corporate Strategic Planning and Studies, Cencral. Electric Company. This highly technical study had the objective of determining the basic requirements for . continuing
'
improvement in the availability and capability of nuclear plants
,
manufactured by General Electric. The principal purpose of the study was to provide a basis for assessing the level of corporate resources -- including engineering and develop =ent f acilities, technical personnel and financial support - . required to enable General Electric's product to achieve technical and cc petitive success. In addition, the task force cade nucerous recc==end-ations intended to improve the availability of nuclear plants manufactured by General Electric. These recocmendations dealt with overall design considerations, as well as with specific components and services. Recocaendations were made concerning development and test faci,litics, canage=ent and organization.
The Reed Report candidly discusses opportunities for improvecent in General Electric's product line and organi:stion and reco== ends steps to strengthen General Electric's co=petitive position.
- 3. In designating caterial as proprietary, Cencral Elcetric utilizes the definition of proprietary information and trade secrets set forth In the A=erican Law Institute's Restatc=ent of Torts, Section 757. This definition provides:
.
,
"A trade secret may consist of any for=ula, pattern, device or cc=pilation of inf orma tion which is used in one's business and which gives MD 8FM _ __
223809)
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AFFIDAVIT - Page 2 William J. Roths '
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him an opportunity to obtain an advantage over competitors who do not.know or use it.... A
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substantial element of secrecy must exist, so that, except by the use of improper means. ,
~
there would be difficulty in acquiring infor-mation.... .Some factors to be considered in .
determining whether given information is one's trade secret are: (1) the extent to which the information is known outside of his business; (2) the extent to which it is known by employees and others involved in his business; (3) the
-
extent of measures taken by him to guard the
.
-
secrecy of the information; (4) the value of the information to him and to his competitors; .
(5) the amount of effort or money exfended by him in developing the information; (6) the case or difficulty with which the information could be properly acquired or duplicated by others." .
I
- 4. Some examples of categories of information which fit into the definition of proprietary information are:
- a. information that discloses a process, method or apparatus
'
where prevention of its use by General Electric's co=pe-titors without license from General Electric constitutes a competitive economic advantage over other companics;
- b. Information consisting of supporting data and analyses, including test data, . relative to a process, method or apparatus, the application of which provide a competitive economic advantage, e.g., by optimization or improved marketability;
,
.
- c. Information which if used by,a competitor, would reduce his expenditure of resources or improve his co=petitive position in the design, manufacture, shipmen t , installation, assurance of quality or licensing of a similar product;
- d. Information which reveals cost or price information, pro-
'
duction capabilities, budget 1cvels or commercial strategics of General Electric its customers or suppliers;
.
- c. Information which reveals aspects of past, present or future General Electric custcmer-funded development plans and pro- .
.
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grams of potential com=crcial value to General Electric; f.
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Information which discloses patentable subject matter for which it may be desirabic to obtain patent protection.
>
.en _ __ .
2238 094
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ATFIDAVIT - Page 3 Villiam J. Roths *
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- g.
- Information which General Electric must treat as proprietary according to agreements with other parties.
- 5. Within Cencral Electric Cobpany, access to documents containing
. proprietary information, including the Reed Report or verbatim extractions of portions thereof, is limited on a "need to know" basis and such documents, including the Reed Report or -
verbatim extractions of portions thereof, are clearly identified as proprietary.
- 6. The Reed Report or verbatim extractions of portions thereof has, to the best of my knowledge and belief, consistently been held in confidence by General Electric, no public disclosure has
-
been made and it is not available in public sources. Disclosures of the Reed Report and/or verbatim extractions of portions thereof outside of General Electric Company have been ex*remely limited:
- a. The Nuclear Regulatory.Co= mission staff examined the Reed ,
,
' Report at General Electric's offices in Washington, D. C.
in February, 1976. (No copy of the Reed Report was released.)
.
- b. In 1976, 1977, and 1978, the staffs of three congressional committees reviewed the Reed Report subject to safeguards
' designed to protect the proprietary na ture of the report.
(No copy of the Reed Report was released.)
- c. The Reed Report or verbatim extractions of portions thereof has been made available to counsel and designated technical
.. -
B Y O B.r(aoara) sconsultants members for parties in hearings and concerning Atomic Safety the and Licensing issuence of a Board construction permit for Black Fox Stations 1 and 2 to the Public Service Company of Oklahoca subject to a Protective Order issued by the Board and subject to signed protective
- agreements implecenting the Protective Order.
- 7. The Reed Report and verbdtim extractions of portions thereof have been evaluated in accordance with the criteria centioned above and have been found to contain information which is proprietary and 9hich~is customarily held in confidence by Cencral Electric.
'
- 8. Public disclosure of the information sought to be withheld (the Reed . cport or verbatim extractions of portions thereof) is likely to cadse substantial harm to the competitive position of the General Electric Co=pany and deprive or reduce the availability of profit-
'
making opportunitics because disclosure could enable competitcrs
,
to obtain a better understanding of our product concerns, designs,
,
manufacture, installation, assurance of quality, licensing, 2238 095
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- AFF3 DAVIT - Page 4
- I William J. Roths
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commercial strategy, and development programs and utilize this information so as to adversely impact Cencral Electric sales.
. Additionally, the value'of~ reviews such as.that conducted by General Electric depends o.n the participants providing their
"
frank opinions on the catters under review. Public disclosure -
of the findings and opinions could well jeopardize future efforts of this type of product improvement. . .
.
. .
- William J.Roths j
.
.
Subscribed and sworn to before me t.his /6 'd5y of de,w,(. ,
1979.
^
W ~
ze >: w .ns a v Notary Public
"
My commission expires:
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2238 096
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c# % [JNITED STATES
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NUCt. EAR REGULATORY COMMisslON E E WASHINoTON, D. C. 20555
- :j 4 *
!
%[w / p Sr s
23, 1979 Attachment 6
& v/.,
.
Mr. Brian D. Hunt -
N 9 1534 E. 3rd Street Tulsa, OK 74120 6
,
[ *g*N g V ,g ,;'$
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s.
y
% -
IN RESPONSE REFER TO FOIA-79-51
_
Dear Mr. Hunt:
.
.
..
, ,
This is in further response o your letter of February 13, 1979 in which you requested, pursuant to the Freedom of Information Act, " copies of j the Reed Report which is in the possession of the NRC." Your request was received by the Office of Administration on February 23, 1979.
.- For your information, the NRC is in possession of a General i5ectric (GE) Nuclear Reactor Study on the subject of GE's Boiling Water Nuclear Steam Supply' System which was prepared under the direction and supervision l of Dr. Charles Reed in 1975 (the Reed Report) and the related Sub-Task Force Reports which serve as appendices to the Reed Report.
-
These'as i.Odocuments n came into the possession of the NRC under a Protectiv Order issued on January 5,1979 by the Atomic Safety and Licensing Board
' in the Black Fox proceedings (Docket Nos. STN 50-556, STN 50-557).
I Specifically, this Protective Order (copy attached) provides that "GE will make the Reed Report and the related Sub-Task Force Reports available I
to the Board in confidence." In maintaining this confidence, only the l members of this Licensing Board have access to this copy of the Reed
.
Report and the related Sub-Task Force Reports.
'
' The Gene $1 Electric Company asserts that the requested documents contain confidential business (proprietary) information and it has supplied a letter and affidavit in support of this claim. The NRC is now reviewing this proprietary claim.
The NRC has asked GE to reconsider its assertion.
Pending completion of the NRC's review, the requested documents are being withheld from public disclosure pursuant to exemption (4) of the Freedom the of Information Commission's Act (5 U.S.C. 552(b)(4)) and 10 CFR 9.5(a)(4) of regulations. The person responsible for this denial is
.
the undersigned. As soon as the proprietary review is completed, the
!
NRC will make available to you any additional material which can be
1 released to the public.
l This denial may be appealed to the Commission within 30 days from the
, receipt of this letter.
i As provided in 10 CFR 9.15, any such appeal
.
', -
. 2238 097
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I must be in writing, addressed to the Secretary of the Commission, U.S.
Nuclear Regulatory Commission, Washington, DC 20555, and should clearly state on the envelope and in the letter that it is an " Appeal from an
,
Initial FOIA Decision." ,
-
'
Si erely, .
.
S , Y
.
Sheldon J Wolfe, Chairman
,
Atomi a ety and 1.icensing Board
- -
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2238 098 .
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March 23,1979
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- . Mr. Brian D. Hunt "
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1534 E. 3rd Street .
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' IN RESPONSE REFER- -
. Tulsa, 0X 74120 . T. . .TO FOIA-79-51 -
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Dear Mr. Hunt:
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This is in further response t'o your letter of February 13, 1979 in which
. you . requested, pursuant to the Freedom of Information Act, " copies of
,
'
the Reed Report which is in the possession of the flRC." Your request
- was received by the Office of Administration on February 23, 1979. ,
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s
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For your information, the NRC~is in ' possession of a General Electric
, (GE) Huclear Reactor Study on the subject of GE's Boiling Water Nuclear
!
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Steam Supply System which was orepared under the direction and supervision -
of Dr. Charles Reed in 1975 (T.he Reed Report) and the related Sub-Task
'
. Force Reports which serve as appendices to the Reed Report. - .
i
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These documents <:it::ie into the possession of the NRC under a Protective
. Order issu~ed on January 5,1979 by the Atomic Safety and Licensing Board in the Black Fox proceedings '(Docket Nos. STN 50-556, STN 50-557).
-
. Specifically, this Protective" Order (copy attached) provides that "GE will'make the Reed Report and the related Sub-Task Force Reports available
to'ithe Board;in confidence." "In maintaining this confidence, only the
( '
members of 'this Licensing Boar'd have access to this copy of the Reed
- Report and the related Sub-Task Force Reports.
.
..
The General Electric Company asserts that the requested documents contain confidential business (proprietary) information and it has supplied a letter and affidavit in support of this claim. The NRC is now reviewing this proprietary claim. The NRC has asked GE to reconsider its assertion.
-
Pending completion of the NRC's review, the requested documents are
_ being withheld frca public disclosure pursuant to exemption (4) of the Freedom of Information Act (5 U.S.C. 552(b)(4)) and 10 CFR 9.5(a)(4) of the Commission's regulations. The person responsible for this denial is the undersigned. As soon as The proprietary review is completed, the -
NRC will mak' available to you any additional material which can ba -
-
released to .ne public. j, -
This denial may be appealed t'o the Corrission within 30 days from the
.
receipt of this letter. As pr,ovided in 10 CFR 9.15, any such appeal
-
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2238 099
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must be in writing, addressed to the Secretary of the Ccamission, U.S.
Nuclear Regulatory Comnission, Washington, DC 20555, and should clearly state on the envelope and in ,the letter that it is an ." Appeal from an Initial FOIA Decision " .
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Sincerely. . .
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. S') F.A.e A L & T u s ,
- Sheldon J. Wolfe, Chairman .
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(- ,, Atomic Safety and Licensing Board
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' DISTRIBUTION: ,
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I WASHtt cTON, D. C. 20555 -
3 . l.. $
ll.AR 2 91979
,_
- "* ?\ ^. Attachment 7
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-.
k fgv .., ce Mr. Leah S. Kosik /g Attorney-at'-Law '
- -\@p T9 E
p' ? . \^fp
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- 3454 Cornell Place IN RESPONSF REFER .
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Cincinnati, OH 452 , e
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TO FOIA-79-70 .
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y ., / 10 .
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k.
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Dear Mr. Kosik:
-
- This is in response to your letter of March 7,1979 in which you requeste pursuant to the Freedom of Information Act, " copies of the Reed Report which is in the possession of the NRC."
-
' For your information, the NRC is in possession of a General Electric
-
(GE) Nuclear Reactor Study on the subject of GE's Boiling Water Nuclear Steam Supply System which was prepared under the direction and supervisic
,
of Dr. Charles Reed in 1975 (the Reed Report) and the related Sub-Task
. .
Force Reports _ which serve as appendices to the Reed Report. .
hU{ Y,
.
These documents came2into the possession of the NRC under a Protective
. Order. issued on January 5,1979 by the Atomic Safety and Licensing Board in the Black Fox proceedings (Docket Nos. STN 50-556, STN 50-557).
-
Specifically, this Protective Order (copy attache'd) provides that "GE -
will make the Reed Report and the related Sub-Task Force Reports availab' to. the Board in confidence." In maintaining this confidence, only the-
-
members of this Licensing Board have access to this copy of the Reed '
.
Report and the relat d Sub-Task Force Reports.
- The General Electric Company asserts that the requested documents contai confidential business (proprietary) information and it has supplied a letter and aff.idavit in support of this claim. The NRC is now reviewing this proprietary claim. The NRC has asked GE to reconsider its assertic Pending completion of the NRC's review, the requested documents are being withheld frca public disclosure pursuant to exemption (4) of the
-
- Freedom of Information Act (5 U.S.C. 552(b)(4)) and 10 CFR 9.5(a)(4) of
- the Commission's regulations. The' person responsible for this denial is the undersigned. As soon as the proprietary review is completed, the'
. NRC will make available to you any additicnal material which can be ,
released to the public.
This denial may be appealed to the Commission within 30 days frcm the receipt of this letter. As provided in 10 CFR 9.15, any such appeal
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2238 lo;
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- t' , }f,gg2h1979
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. must be in writing, addressed to .the Secretary of the Commission, U.S.
Fluclear Regulatory Concission, liashington, DC 20555, and should clearly state on.the envelope and in the letter that it is an " Appeal frcm an
,
Initial F0IA Decision."
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Sincerely,
. .
. M Sheldon J.
.'w olfe@, Chairman .'
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, A,tomic Safety and Licensing Board , - -
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2258 102 ,
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,liarch 29, 1979
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Mr. Leah S. Kosik . .
Attorney-at-Law *
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3454 Cornell Place' IN RESPONSE REFER Cincinnati, OH 45220 -
TO.F01A-79-70 ' ,-
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Dear Mr. Kosik:
.
. ' This is in response to your letter of March 7,1979 in which you requestec
- pursuant to the Freedom of Information Act, " copies of the Reed Report j
which is in the possession of the liRC."
- ! For your information, the HRC is in possession of a General Electric
'
.
(GE) Huclear Reactor Study on the subject of GE's Boiling Water fluclear Steam Supply System which was prepared under the direction and supervistor of Dr. Charles Reed in 1975 (the Reed Report) and the related Sub-Task
-
Force Reports which serve as appendices to the Reed Report. _
~ ~
These documents came into the possession of the NRC under a Protective Order issued on January 5,1979 by the Atomic Safety and Licensing Board
! in the Black Fox proceedings (Docket Nos. STN 50-556, STN 50-557). -
Specificgl1y, this Protective Order (copy attached) provides that "GE
, will make ,the Reed Report and the related Sub-Task Force Reports available i '
to the Coard in confidence." In maintaining this confidence, only the members of this Licensing Board have access to this copy of the Reed 3.
Report and the related Sub-Task Force Reports. ,
'
The. General Electric Comp'any asserts th'at the requested documents contain
.
. confidential business (proprietary) information and it has supplic'd a ji letter and affidavit in support of this claim. The NRC is now reviewing j this proprietary claim. The NRC has asked GE to reconsider its assertion.
. Pending completion of the NRC'.s review, the requested documents are l being withheld from public disclosure pursuant to exemption (4) of the i
'
Freedom of Infomation Act (5 U.S.C. 552(b)(4)) and 10 CFR 9.5(a)(4) of the Commission's regulations. The person responsible for this denial .is '
. the undersigned. As soon as the proprietary review is completed, the HRC will make available to you any additional material which can be
- released to the public. .
This denial may be appealed to the Commission within 30 days from the receipt of this letter. As provided in 10 CFR 9.15, any such appeal
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,
2238 103
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must be in writing, addressed to the Secretary of the Commission, U.S.
!!uclear Regulatory Commission, Washington, DC 20555, and should c1carly
'
state on the envelope and in the letter that it is an " Appeal from an
-
- Initial FOIA Decision."
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Sincerely, ' ,
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.Sheldon J. Wolfe, C.hairman -
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, _ Atomic Safety and Licensing Board
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. DISTRIBUTION .
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March 28, 1979
- Attachment 8
-
HAND DELIVER Sheldon J. Wolfe, Esquire '
Atomic Safety and Licensing c g Board Panel U.S. Nuclear Regulatory 4 ,-* $
%,'"';
Commission Washington, D.C. 20555 f - ') g $Nf[.., s --
9
-
Mr. Frederick J. Shon, Member o d?*s #s Atomic Safety and Licensing 1 #c*.# 5**** $
Board Panel s U.S. Nuclear Regulatory m Commi sion Washington, D.C. 20555 Dr. Paul U. Purdom Director, Environmental Studies Group 99 Q jric Drexel University cc u iug 32nd and Chestnut Streets Philadelphia, Pennsylvania 19104 Re. Public Service Co. of Oklahoma, Associated Electric Cooperative, Inc., and Western Farmers Electric
. Cooperative (Black Fox Station Units 1 and 2), Docket Nos. STN 50-556, STN 50-557 Gentlemen:
On behalf of the General Electric Company (GE), I
}{yespgegullyrequest that the Licensing Board return to GE's
. _ . . ._
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MORGAN. LcWIS & BoCKlUs
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March 28, 1979 Page Two custody the copy of the Reed Report and related Sub-Task Force Reports which were transmitted to the Board under cover of my letter, dated January 5, 1979, for the Board's use pursuant to the provisions of the Board's Protective Order of the same date in the above-referenced proceeding.
As indicated in this Protective Order, the Reed
'
Report and the related Sub-Task Force Reports were provided
. ~"- to the Board in confidence to enable the Board to conduct an
- independent review of the Report and rule upon the faithfulness of the verbatim extractions from these reports which GE had pre-pared. These verbatim extractions were made available to the Board and all parties to this proceeding, subj ect to the terms
.
.
of the Order and the protective agreements attached thereto,
- s. with respect to existing intervenor contentions, Board ques-
.
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- tions, and other matters which the Board determined to be !
,
necessary for consideration in the Black Fox construction per-mit proceeding.
GE originally provided the Board and all parties with verbatim extra'ctions from these reports related to intervenor contentions and Board questions. Additional extractions were subsequently provided based upon the Board Ouestions Presented Pursuant To Protective Order, dated January 17, 1979, and the Board's rulings on those matters as to which disagreement existed among the parties concerning the faithfulness of the original extractions. The Board confirmed the accuracy and faithfulness of all of these verbatim extractions and then conducted hearings in which the issues related to the extractions were addressed in considerable detail. It is GE's understanding that all of the hearings in the Black Fox proceeding have now been completed.
The, Reed' Report and the related Sub-Tack Force Reports were pro-
-
vided to the Board for a very limited purpose and, now that these hearings have been completed, that purpose has been satisfied. Indeed, the use of the Report by the Board contem-plated under the Protective Order was actually completed once the faithfulness of the last set of extractions was confirmed.
As noted in prior filings by GE in this proceeding with respect to the Reed Report, the Report itself is a comprehensive product improvement study prepared under the supervicion of Dr. Charles Reed, Senior Vice President for Corporate Strategic Planning and Studies at GE, which was designed to provide GE with the information necessary to improve its overall competitive position in the nuclear reactor steam supply system business, 2238 106
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" . . .
MORGAN, LtWIS & BoCKlUS
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March 28, 1979 Page Three
' This Report contains highly confidential commercial information, the release of which could cause competitive harm to GE. Under the terms of the protective agreements which all parties in the Black Fox proceeding entered into pursuant to the Board's Pro-tective Order, the Reed Report was made available to these parties for inspection at various GE offices. The Board was provided with a copy of the Report in confidence for the purposes described above.
As the Board knows, GE has rigidly controlled the dissemination of this Report and has always scrupulously avoided any unnecessary disclosure to or retention by outside parties.
Since the Board's need for the Report no longer exists, GE therefore respectfully requests that the Board return its copy of the Report to GE. Of course, the Board would retain the extractions from the Report which GE provided. Moreover, GE is willing to make the Report itself available to the Board on an immediate basis at GE's Bethesda, Maryland office, or some other arise.
location convenient to the Board, should any need later GEs request for the return of this document is in keeping with the substantive rights and procedures estab-lished in Section 2.790 of the Commission's Rules of Practice, the pertinent case law, and the terms and conditions of the protective order itself.
Under the Commission's Rules of Practice, participants in NRC proceedings have the opportunity to request that any document which they submit in connection with these proceedings be withheld from public disclosure on the ground that it contains privileged or confidential commercial information. 10 C.F.R.
S 2.790(b) (1) . GE made.such a request in this proceeding by virtue of its October 30, 1978 Motion To 0.uash Intervenor's Sub-poena and its memorandum in support of that motion. However, the Rules of Practice also provide that even when a decision has been made that the document should be withheld from public disclosure, the document may still "be subj ect to inspection" by the Board and other parties in the proceeding under protective order. 10 C.F.R. 5 2.7 90(b) (c) . This is precisely what occurred in this proceeding pursuant to the Board's January 5, 1979 Protective Order. In this regard, the Rules aise provide that the party who originally requested that the document be withheld
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2238 107
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MORGAN. LEWts & BoCKlUS
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March 28, 1979 Page Four from public disclosure has the right to request withdrawal of the document and that the document "will be returned" without disclosure to the public in the event that the Commission denies the request for confidential treatment. 10 C.F.R. 5 2.790(c).
Indeed, in Westinghouse v. U.S. Nuclear Regulatory Cornis sion ,
555 F.2d 82, dB (3rd Cir. 1977), the U.S. dourt of Appeals for the Third Circuit noted that under the Commission's Rules of Practice:
[A]n applicant requesting con-fidentiality has the absolute right to demand the return of any document claimed to contain pro-prietary information in all NRC proceedings (except rulemaking proceedings) (emphasis added).
The various Protective Agreements under which t'he Reed Report was provided to the other parties in the Black Fox proceeding all contained the provision that In the event any NRC regulation, rule or ASLB order, other adminis-trative order, or judicial ruling requires the disclosure of the in-formation without providing the equivalent protection accorded under this Agreement, GE will have the right to immediately withdraw the information from Signator upon re-quest and Signator will promptly abide by that request.
GE originally provided the Reed Report to the Board with the understanding that the same protection would be accorded to GE under the Protective Order with respect to the Board as would be accorded to GE under the Protective Agreements with re-spect to the other parties to the proceeding. It is GE's under-standing that the Licensing Board has recently denied a recuest for disclosure of the Report under the Freedom of Information
.
2238 108 50i Bi' .-
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MORGAN. LtWIS & BoCKlUS
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Fbrch 28, 1979 Page Five Act (FOIA). 1/ The very existence of such a request raises the possibility that, if the Report is retained by the Board, 2/
it may not be afforded the same degree of protection which was-originally contemplated when the Report was provided to the .
Board.
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1/ The Reed Report is clearly exempt from disclosure under either or both of the tests utilized to determine whether a document falls within Exemption 4 of the FOIA (5 U.S.C.
S 552(b)(4)), since the disclosure of the Report would likely (1) cause substantial competitive harm to GE and (2) impair the NRC's ability to obtain such information in the future. See National Parks and Conservation Association
- v. Morton, 49E F.2d 765, 770 (D.C. Cir. 1974); Porter County
_C_hapter of the Izaak Walton League v. USAEC, 380 F. Supp.
630, 634 (N.D. Ind. 1974). It appears that the Report would also be exempt from disclosure under Exemption 3 of the FOIA (5 U.S.C. S 552(b)(3)) since it was submitted in conjunction with a reactor licensina proceeding and, therefore, under Section 103(b)(3) of the Atomic Energy Act of 1954, as amended, 42 U.S.C. S 2133 (b) (3) , "may be used by the Com-mission only for the purposes of the common defense and security and to protect the health and safety of the public."
See Westinchouse Electric Corp. v. USNRC, 555 F.2d 82, EV!92 (3rd Cir. 1977).
-2/ Even though the Board now has custody of a cocy of the Re-port, GE believes that the provisions of the FOIA would not even apply to the Report since it is not an " agency record" within the meaning of the FOIA. Only " agency records" are subj ec t to disclosure under the FOIA. See 5 U.S.C.
1 552 (a) (6) . Mere possession of, control over, or access to a document by an agency at a given point in time does not transform a document into an agency record. See e.g.,
Goland v. CIA, F. Supp. , No. 76-0166 (D.D.C.
May 23, 1978). A document, such as the Reed Report, which is not actually a part of the evidentiary record in an agency proceeding and which is not directly utilized in
_ the agency decisionmaking proces s , but wnich is prepared
, O[I Halnd! permanently held by a private party and only made avail-able to a government agency as part of the underlying basis
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a
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for other information that is a part of the record and is 2238 109
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MoncAN. LtWIS & BoCKlUS
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March 28, 1979 Fage Six Accordingly, since the Board's use of the Report con-templated'under the Order has been completed, GE respectfully requests that the Board return the Reed Report and the related Sub-Task Reports to the undersigned as soon as possible.
Respectfully submitted,
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GeorgV L. Edga Attorney for General Electric Company
/mb cc: All parties on attached Service List
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2_/ cont.
directly utilized by the agency (in this case the extractions from the Report), does not constitute an " agency record" within the meaning of the FOIA. CI3A-GEIGY Coro. v.
Mathews, 428 F. Supp. 523 (S.D. N.Y. J.977).
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2238 110 icrs.
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- BEFORE THE ATOMIC SAFETY AND LICENSING BOARD y-V.- g e'
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' A n the Matter of PUBLIC SERVICE COMPANY OF OKLAHOMA, ) Docket Nos. STN 50-556 CP ASSOCIATED ELECTRIC COOPERATIVE, INC., STN 50-557 CP and WESTERN FARMERS ELECTRIC COOPERATIVE (Black Fox Station, Units 1 and 2) Attachment 9
) ,
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ORDER In a letter dated March 28, 1979, the General Electric Ccmpany
, requested that the Board return the copy of the Reed Report and related Sub-Task Force Reports which had been sent to us under cover of a letter dated January 5,1979. Treating GE's request as a Motion, in an Order of April 2,1979 we requested that Staff advise whether or not it recem-mended that GE's Motion be granted. On April 9,1979, Staff filed its response.
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The instant Motion is deniedT In the first place, GE's reliance on 10 C.F.R. I 2.790(c) is misplaced or, at best, is premature since the NRC, to our knowledge, has not acted upon GE's letter of March 15,1979 requesting that the Reed Report and the verbatim extrac-tions therefrom be exempt from disclosure pursuant to 10 C.F.R. 5 2.790
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1/ The Board has not censidered either the conjectural's:atement at 2c !@2! age .5;of GE's letter or the FOIA arguments advanced in fco: notes 1 and Pursuant ,tc 10 C.F.R. 5 9.15, only the Chairman of a Scard (or of :he Atcmic Safety. and , Licensing Board Panel, or a designee) initially de:er-mines FOIA requests and there are no FOIA requests pending before Chairman Wolfe.
2238 111
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and 10 C.F.R. Part 9. Second, this Board was not requested to nor did it sign the Protective Agreements, and whatever GE's understanding might be, we are not bound by the cited provision of these Protective Agreements. Third, we are unable to ccmply with GE's request pending appellate review of our ultimate initial decision. For example, in reviewing our in, camera rulings on the faithfulnass of the verbatim extracts, the Appeal Board may wish to ccmpare ,in camera the Reed Report with the verhatim extracts. Finally, lest the letter or spirit of the Freedom of Information Act, 5 USC 552, be violated, we could not accede to GE's request at least until such time as the pending FOIA
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procedures have been concluded.
Dr. Purdom concurs but was unavailable to sign the instant Order.
IT IS 50 ORDERED.
THE ATOMIC SAFETY AND LICENSING 80ARD
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Frederick y Ton, Memoer'
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SheldonJ.!-@fe, Esquire Chairman
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Dated at Bethesda, Maryland gg} this 12th day of April,1979.
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s, D 4 y UNITED STATES NUCLEAR REGULATORY COT.*?.*IsslON WASHINGTON, D. C. 205L5 Qp. 'w
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Attachment 10
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Mr. T. Rognald Dankmeyer, Counsel Nuclear Energy Group , General Electric Ccmpany ,
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. 175 Curtner Avenue. IN RESPONSE REFER j San Jose, California 95125 TO F0IA-79-51 & 79-70
[
Dear Mr. Dankmeyer:
;
I We have pending Freedom of Information Act requests from Bria.n Hunt of 1 Tulsa, Oklahoma, and Leah Kosik of Cincinnati, Ohio, for copics of the
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Ree.d Report and the related Sub-Task Force Reports which are in tne
- possession of the Black Fox Atomic Safety and Licensing Board.
i . We are in receipt of your letter of March 15, 1979 and.the attached
; affidavit of William J. Roths. While this information is helpful to the
. NRC ia making its determination to release or withhold the requestad documents, it does not alone provide an adequate basis to support your
-
claim for withholding under Exemption 4 of the Freedom of Information Act and 10 CFR 9.5(a)(4) of the Commission's. regulations. In this regard, it is NRC's view that the material submitted addressing these considerations merely states conclusions and fails to provide sufficient f actual support for these conclusions. Consequently, you may wish to address with greater specificity each of the following considerations as they relate to the current status of the information claimed to be proprietary: D I )$.(i ; Whether the requested documents or any portion thereof are aiailable in public sources, and if so, please state the justification for withholding this information;
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(ii) Hov/ the public disclosure of the information sought to be withheld is likely to cause s_ubstantial comoetitive harm to the General Electric Company. Additior ally, the Freedcm of Information Act and the Commission's regulations
. require that "any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this section."' Accordingly, your response to this letter should indicate your position as to what portions,
,
if:any, of the Reed Report and the related Sub-Task Force Reports can be
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released.
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At present, the Atomic Safety and k.'icensing Board has denied access to , the. documents in issue pursuant to Exemption (4). The requestors have . i
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been informed of this denial. The requestors have also been advised . that the 11RC is reviewing the proprietary claim of the General Electric Company and that they will be notified if any material can be released to them. To enable the NRC to furnish a timely response to the requestors, it is imperative that we_ receive your com.ents no later than April 30, 1979.
. Finally, the documents in issue have been maintained in confidence .
j pursuant to the Black Fox protective Order of January 5,1979 and only j members of the Atomic Safety and Licensing Board have had access to the
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Reed Report and the related Sub-Task Force Reports. 'To enable the NRC to
! review properly your proprietary claim, it will be necessary for members I
of the NRC legal and technical staff to have access to the requested documents. .
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Sin erely,
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j J. M. Felton, Director I i
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Division of Rules and Records Office of Administration 2238 114
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- I MORGAN, LEWIS -& BOCKlUS CoVNSELORS AT LAW taco M SinctT, N. W.
WASHINGTON D. C.2co36 retc ..c:<2cu en.sooo Attachment 11 CA$Lt Accacss:MORLtBOCK TettL 69-627 e m May 4, 1979 3 q
., n unh14 5 14AT U 1973 7.,
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N @ Mr. J. M. Felton - g D:Lrector ' Division of Rules and Records Office of Administration U.S. Nuclear Regulatory Commission Washington, D.C. 20555 -
,
i Re: FOIA Nos. 79-51 and 79-70
Dear Mr. Felton:
General Electric Company (GE) is in receipt of your letter dated April 13, 1979 concerning the above-referenced Freedom of Information Act (FOIA) requests to NRC for copies of the Reed Report and the related Sub-Task Force Reports which are currently in the possession of the Atomic Safety and Licensing Board in the Black Fox construction permit proceeding. As you know,'these reports were provided to the Black Fox Licensing Board 'in conf.idence solely for the purposes spe'cTfied in the Board's Protective Order, dated January 5, 1979, in that pro-ceeding. As noted in your letter, the Licensing Board has denied these FOIA reque'sts in its initial determinations rendered pur-suant to 10 C.F.R. 5 9.15(a). In your letter you requested ad-ditional information as to (i) whether the requested documents or any portion thereof cire available in public sources, and (ii) how the public disclosure of the information sought to be withheld is likely to cause substantial competitive harri to GE. It is GE's position that 1) the requested documents er portions thereof are not a railable in public sc trees, and 2) the public disclosure of those documents is likely to cause ,,
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MORGAN, LCWis & BOCK!Us thy 4,1979 Page Two
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substantial competitive harm to GE. The Reed Report is an internal product improvement study designed to enhance the availability, and, by necessary implication, the marketability of GE's Boiling Water Reactors (BWR's). The Report contains significant information concerning GE's product improvement program and overall marketing strategy which would be of great value to GE's competitors. Accordingly, the Report has always been held in strictest confidence by GE. GE's previous submittals to NRC in connection with the Reed Report have briefly addressed both of the points which you raised in your letter. As to the first point, the March 15, 1979 affidavit of William J. Roths, the Manager of the Relia-bility Engineering Operation for General Electric Company states, inter alia, that the Reed Report or verbatim extractions or portions thereof has, to the best of my knowledge and belief, consistently been held in confidence by General Elec-tric, no public disclosure has been made and it is not available in public sources. Moreover, in response to an earlier NRC request for a report on safety-related items discussed in the Reed Report, Glenn G. Sherwood, the Manager of the Safety and Licensing Operation for General Electric Company stated in an affidavit, dated March 22, 1978, that-
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the information (from the Reed Report related to these items], to the best of my knowledge and belief, has con-sistently been held in confidence by the General Electric Company, no public disclosure has been made, and it is not available in public sources. As to the second point, both the Roths and Sherwood affidavits describe in considerable detail how the disclosure of the information contained in the Reed Report is likely to cause substantial c5mpetitive harm to GE. Further, in his July 10, 1978 response to Dr. Sherwood's request that the status report'
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MORGAN. Ltwis & Bocxius May 4, 1979 Page Three
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on the safety-related items taken from the Reed Report be with-held from public disclosure, Roger J. Mattson, the Director of the Division of Systems Safety of the NRC Office of Nuclear Reactor Regulation found that In essence, your claim is that public disclosure of the list of , safety-related items and the summary status report is likely to cause substantial harm to the competitive position of G.E. We agree that if the ' Reed Report' in its entirety were submitted, it should be afforded the protection of proprietary information under the Commission's regulations be-cause it is a product improvement study of important competitive value and be-cause cisclosure of this sort of study could act to inhibit thoughtful self-criticism by nuclear equipment vendors since it would enable competitors to ob-tain a better understanding of a manu-facturer's product concerns and programs. The aggregate list and summary status of the 27 safety-related items is derived from the report and therefore can be afforded the same protection of pro-
- prietary information. Because of the historical context of a product imorove-ment study, we agree that the public disclosure of the aggregate list of the 27 issues could cause substantial harm to the competitive position of G.E.
To further assist you in evaluating GE's claim, and in further response to the two points raised in your letter, GE is submitting the detailed information contained herein cand in, the accompanying affidavit to show that: DI i) dl (J5
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MORGAN, lewis & BoCKlUS
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May 4, 1979 Page Four I. The Reed Report itself is not subj ect to disclosure pursuant to the FOIA since it is not an agency record within the meaning of the FOIA. (See Section 1 below) II. The Reed Report is exempt from disclosure since disclosure would not only cause sub-stantial competitive harm to GE, but also impair the Government's ability to obtain necessary information in the future. (See Section II below and the attached affidavit)
.
III. Since the Reed Report was furnished to the Licensing Board in confidence, and pursuant to the Protective Order, disclosure would con.=titute an abuse of discretion (See Section III below) IV. Since the Reed Report was submitted to the Licensing Board in connection with a licensing proceeding, disclosure of the Reed Report without GE's prior consent would violate the provisions of 10 C.F.R. 5 2.790, Section 103(b) of the Atomic Energy Act, and the Trade Secrets Act and would be contrary to the policy
. embodied in Exemption 3 of the FOIA.
(See Section IV below) V. dhy arguably non-exempt portions of the Report are " inextricably intertwined" with exempt portions and there are thus no
" reasonably segregable" portions of the Report which can be disclosed under the FOIA.
(See Section V below and the attached affidavit)
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MORGAN, Lewis A BoCKlus May 4, 1979 Page Five
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I. The Reed Report Itself Is Not Subj ect To Disclosure Pursuant To The FOIA Since It Is Not An Agency Record Within The Meaning Of The FOIA The Reed Report was submitted to and used by the Black Fox Licensing Board for certain limited purposes set forth in the Protective Order. GE had originally provided the Licensing Board and all parties to the proceeding with verbatim extractions of the Report related to intervenor con-tentions in the Black Fox proceeding. Upon completion of the Board's independent review of the Reed Report, consultation among counsel, oral argument before the Board, and rulings thereon, GE produced additional verbatim extractions of the Reed Report related to intervenor contentions and Board ques-tions. These verbatim extractions, and not the Reed Report itself, were then used for purposes of cross-examination, and were admitted into evidence in the Black Fox proceeding. Consequently, the Reed Report itself is not part of the NRC evidentiary record in the Black Fox proceeding, and will not be relied upon by the Licensing Eoard in reaching an initial decision in this proceeding. For the reasons more fully dis-cussed herein, the Reed Report is therefore not an " agency record" within the meaning of the FOIA and is not subj ect to disclosure pursuant to that statute. The only documents which are subj ect to disclosure pursuant to an FOIA request are actual " agency records." See e.g., 5 U.S.C. 5 552(a)(6) . The Act itself does not define the phrase " agency records." The NRC regulations implementing the FOIA define " record" as follows:
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(b) ' Record' means any book, paper, map, photograph, brochure, punch card, magnetic tape, paper tape, sound re-cording, pamphlet, slide, motion picture, or other documentary material regardless of form or characteristics made by, in the possession of, or under the control of NRC pursuant to Federal
. law or in connection with the transact ic 1 of cublic business as evidence of NRC ~ ' ~ '
organization, functions, policies, decisions , procedures, operations, programs or other QdNM - 2218 119 _
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MORGAN, LEWIS G BoCKlUS May 4, 1cl9 Page Six activities. ' Records' do not include ob-jects or articles such as structures, furniture, tangible exhibits or models, or vehicles and equipment. 10 C.F.R. S 9.3a(b) . (emphasis added). In CIBA-GEIGY Corp. v. Mathews, 428 F. Supp. 523 (S.D. N.Y., 1977), the district court concluded that data com-piled by private researchers working under a government grant were not " agency records" within the meaning of the FOIA and could not be reached by an FOIA request, even though the FDA relied upon a report based on this data in deciding to revise the labeling requirements for the drugs involved. The FDA was - operating under the definition of " records" contained in the
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GSA FOIA regulations, 41 C.F.R. S 105-60.107, which is essen-tially the same as the NRC definition. ' In CIBA-GEIGY, the court concluded that in evaluating whether these records are agency records, this Court holds that the goals and purposes of the Act would be served best by imposing a standard which calls for proof that the records were either Government-owned or subject to substantial Government control or use. In other words it must appear that there was significant government involvement with the records themselves in order to deem them agency recorcs. 428 F. Supp. at 529. (emphasis added) The court also concluded that the extent of the govern =cnt funding, access to, or reliance on the documents would indicate whether or not such "significant government involvement with the records themselvcs" existed. The court concluded that federal funding under the grant did not vest the documents in question with a public character. With re-spect to " access" the court pointed out that the documents were never " permanently" in the government agency's passession, and,. in any event, that " mere possession at a particular point in
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MORGAN, Lewis & BoCKlUs
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May 4, 1979 Page Seven
, time (does not transform] the nature of the documents." 428 F.
Supp. at 531. See also Goland v. CIA, F. Supp. (D.D.C. May 23, 1978). The CIBA-GEIGY court discussed several other recent FOIA cases and found that-the documents released in these other cases were ' clearly distinguishable from the data in question here, which is , permanently held by private ~oarties and not directly utilized in agency decisionmaking. 428 F. Supp. at 531 (emphasis added) . In this regard,~the Court also noted that mere access without ownership and mere reliance without control will not suffice to convert the . .. data into agency data. ---Id. (emphasis added). With respect to the " reliance" factor, the court found that there was no direct reliance on the underlying data by any of the agencies involved and finally concluded that the raw data of the research or-
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ganization's study was its own private property and not Government property. Becarse there has not been an adequate showing that the underlying data of the researchers was directly controlled or substan-tially utilized by a Government agency in the performance of govern-mental operations, the records cannot be deemed ' agency recorcs' for tne pur-poses of disclosure under the FOIA. 426 F. Supp. at 532. (emphasis added).
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MORGAN, Lewis & Socxius
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May 4, 1979 Page Eight Applying the CIBA-GEIGY approach in this instance compels the conclusion that the Reed Report is also not an agency record. The Reed Report is an internal GE product improvement study which was merely in the possession of the Licensing Board in the black Fox proceeding for certain limited purposes set forth in the Protective Order. The Reed Report was reviewed by the Board and utilized to evaluate the faithful-ness of all of the verbatim extractions which GE had provided with respect to both intervenor contentions and Board questions. Similarly, the data in CIBA-GEIGY had been made available to the ' FDA to evaluate the accuracy of the report on which FDA was actually going to base its labeling decision. The Reed Report itself is not a part of the evidentiary record in the Black Fox proceeding. The verbatim extractions, not the Recort itself, will be relied upon by the Board in making findings of fact in this proceeding. The temporary possession of the Reed Report by the Board for the purposes set forth in the Protective Order ! simply cannot transform the Report into an agency record within ' the meaning of the FOIA. The functional analysis provided in the CIBA-GEIGY decision delineating the boundaries of the FOIA's applicability has been endorsed by FOIA commentators. For example, in its annual review of developments under the FOIA for 1977, the Duke Law Journal concluded: The approach of the CIBA-GEIGY court, which focuses on the underlying pur-
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pose of the Act, provides a margin of protection for private ownership interests at the very threshold of the FOIA. . . . The flexible test relied upon in CIBA-GEIGY offers a helpful avenue or analysis which insures that the Act will not be abusively used to reach information bearing only a tangential relationship to government function. Notes, Developments Under the Freedom of Information Act - 1977, 1978 Duke L. J. 189, 192.
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MoRG AN, LE'Wis & BoCKlus
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Eby 4, 1979 Page Nine A similar approach was also followed by the U.S. Court
, of Appeals for the District of Columbia Circuit in Forsham v.
Califano_, F.2d - , Civil Action No. 75-1608 (D.C. Cir. July 11, 177E) . In Forsham, the court held that research data on the use of certain drugs in the treatment of diabetes were not agency records subj ect to disclosure within the meaning of the FOIA merely because funding for the collection of such data was provided under federal grants and various federal agencies had access to and utilized this data. The D.C. Circuit reached this conclusion even though portions of this data were relied
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upon by FDA in a proceeding before that agency related to one of the drugs under investigation and even though these portions of the data were previously made available to the parties to that proceeding. In like manner here, even though verbatim extractions from the Reed Report were made available to parties to the Black Fox proceeding pursuant to the protective agreement and even if the Board may rely on these verbatim extractions in this pro-cceding, the Reed Report itself cannot be considered to be an actual agency record within the meaning of the FOIA. See also cases cited at n. 3 in Judge Bazelon's dissenting opinion in Forsham. Under the tests set forth in both the CIBA-GEIGY and Forsham decisions, the Reed Report cannot be considered an agency record within the meaning of the FOIA. Accordingly, the pro-visions of the FOIA, and the NRC regulations in Subpart A of 10 C.F.R. Part 9 implementing FOIA, are inapplicable to the Reed Report and the Report cannot be disclosed under the FOIA.
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II. The Reed Report Is Exempt From Disclosure Since Disclosure Would Not Only Cause Substantial Ccmpetitive Harm To GE, But Also Impair The Government's Ability To Obtain Necessary.Information In The' Future . In response to NRC's request, the attached affidavit provides additional information to demonstrate that disclosure of the Reed Report would cause substantial competitive harm to GE. Although this would be sufficient to support a claim for withholding under Exemption 4 of the FOIA, the Reed Report is also exempt under Exemption 4 since its disclosure would impair
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MoRG AN, l.EWIS & BoCKlUS May 4, 1979 Page Ten the Government's ability to obtain necessary information in the future. In what follows, GE will develop the pertinent case law concerning Exemption 4 to show that the Reed Report qualifies for exemption on both of the foregoing bases. Even if the Reed Report is somehow considered to be an " agency record" within the meaning of the FOIA, the Report is exempt from disclosure under Exemption 4 of the Act. Exemption '4 of the FOIA precludes the disclosure of " trade secrets and commercial or financial information obtained from a person and privileged or confidential." 5 U.S.C. S 552(b)(4) . Although the terms " confidential" and " commercial" are not de-fined in the Act, these terms should be afforded their ordinary meaning within a business context. See American Airlines v. National Mediation Board, 453 F. Supp. 430 (S.D. N.Y. 1978); Brockway v. Dept. of Air Force, 370 F. Supp. 738, 740 (N.D. Iowa), rev'd on other. grounds, 518 F.2d 1184 (8th Cir.1975) . As noted in the various affidavits which GE has submitted to ' NRC in connection with this matter, GE has utilized the defini-tions set forth in the American Law Institute Restatement of Torts in designating the material contained in the Reed Report as proprietary. The use of this definition has been cited with approval by the Supreme Court for other purposes. Kewanee Oil Co v. Bieron Corp., 416 U.S. 470, 474-75 (1974) . As a general rule, Exemption 4 is designed to protect the confidentiality of information which is obtained by the govern-ment but which would customarily not otherwise be released to the public by the. person from whom it was obtained. Pacific Architects and Engineers, Inc. v. Renecotiation Board, 550 F.Zo 383 (D.C. Cir. 1974); Sterling. Drug v. FTC, 450 F.2d 698 (D.C. Cir. 1971). In addition, Exemption 4 serves the important function of protecting the privacy and competitive position of a company which provides information to a government agency to assist that agency in the performance of its statutory responsibilities. Bristol Myers Co. v. FTC, 424 F.2d 935 (D.C. Cir.), cert denied, 400 U.S. 824 (1970). The dual purposes of Exemption 4 are reflected in the tests to be employed to determine whether any given document is exempt from disclosure. Under Exemption 4 the tests are whether it.is likely that disclosure would either " impair the
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MORGAN, Ltwis & Bocxius May 4, 1979 Page Eleven
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Government's ability to obtain necessary information in the future" or "cause substantial harm to the competitive position of the per-son from whom the information was obtained." National Parks and Conservation Association v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974); Concinental Oil Co. v. FPC, 519 F.2d 31, 35 (5th Cir. 1975), cert denied su'o nom, Superior Ot1 Co. v. FPC, 425 U.S. 971 (1976). GE's October 30, 1978 Memorandum in Support of its Motion to Quash in the Black Fox proceeding and the affidavit attached to this letter, as weTE as the Roths affidavit sub-
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mitted on March 15, 1979, make it abundantly clear that the Reed Report qualifies for exemption from disclosure under both of these tests. As to the first test, it is noteworthy that the July 10, 1978 determination issued by the Director of the Division of Systems Safety of NRC's Office of Nuclear Reactor Regulation found that information concerning the so-called 27 safety-related items in the Reed Report qualified for withholding, based, in part, upon his view that the entire Reed Report would also qualify for withholding. Consistent logic would compel a similar result now with respect to the entire Reed Report. Moreover, the Pro-tective Order issued by the Licensing Board and the prior NRC denials of the FOIA requests explicitly recognized that disclosure of the Report could cause substantial harm to GE's competitive position. As to the second test, GE voluntarily entered into settlement negotiations and voluntarily supplied this information to NRC. Thus, the fact that the Licensing Board had previously subpoenaed this information does not negate the fact that dis-closure would also likely impair NRC's ability to obtain similar information in the future. See Amway Corp. v. FTC, Civil Action No. 75-1274, 1976-1, Trade Cas. 1 60,798 (D.D.C. Mar. 10, 1976).
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In an analogous situation in Porter County Chanter of the Izaak Walton League of America, Inc. v. USAEC, 380 F. Supp. 630 (N.D. Ind. 1974), the court upheld the AEC's denial of an FOIA request seeking disclosure of proprietary information sub-mitted to the AEC by GE in connection with the Bailly construction permit proceeding. In so ruling, the court stated
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MORGAN, LEWIS & BOCK!US May 4, 1979 Page Twelve
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(U]nrestricted release of such private commercial information would tend to adversely affect the Government's own ability to gain access to similar information in the future. Ultimately, such re-lease could seriously affect the i thoroughness of AEC review of license applications and have an
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adverse impact on public health and safety. 380 F. Supp. at 634. The attached affidavit provides additionel information to demonstrate that the disclosure of the Reed Report would cause substantial competitive harm to GE and impair NRC's ability to obtain similar information in the future. On this basis, disclosure of the Reed Report would contravene Exemption 4 in the following respects:
- a. The Reed Report is an internal product improve-ment study with the objective of enhancing the availability of GE's product. The disclosure of the Reed Report would provide GE's competi-tion with an identification of the specific area where GE's product improvement efforts would be focused, and the recommended actions which could be taken to effectuate those is-provements. This would effectively provide GE's competition with GE's " game plan" for product improvement, and without any signifi-cant expenditure of resources, enable them to adjust or modify their own activities to ob-tain a competitive advantage vis a vis GE.
In short, the competition wouTE receive a significant windfall of vital strategic in-formation. As a corollary, the same competitors would have access to frank state-ments of fact and opinion which would identify a comprehensive array of GE's views as to aviilability problem areas, the significance of those areas, and actions for addressing each . area. It goes without saying that, given the
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MORGAN, Lewis & Bocxius May 4, 1979 Page Thirteen Report to cast aspersions on the availability
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of GE's products and adversely influence pur-chasing decisions by GE's existing and po-tential customers.
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- b. The Reed Report was never intended as a safety study and was intended to provide an obj ective assessment of the need for and potential value of product improvements in regard to availability.
In spite of the essential business purpose of the document, certain availability issues dis-cussed in the Report could in another context have safety significance. Although by virtue of its purpose and objectives the Reed Report does not address the safety significance of such issues, the ASLB believed that the information may have had some relevance to the Black Fox proceeding. Notwithstanding the fact that.the subpoena in that proceeding was clearly untimely, and grounded upon a tenuous showing of relevance and necessity, GE entered into settlement negotia-tions which led to GE's providing the Board with a copy of the Reed Report. Given th'ese cir-cumstances, one could fully expect that the dis-closure of the Reed Report would have a chilling effect upon any future product improvement studies and on the willingness of GE and other vendors to reach any future accommodations in NRC pro-ceedings similar to that reached in Black Fox. This would inevitably impair NRC's. ability to obtain similar.information in the future. Accordingly, GE submits that any reasoned analysis of this information, in conjunction with the information submitted previously on this subj ect, leads to the ineluctable conclusion tha t the Reed Report is exempt from disclosure under Exemption 4 of the FOIA.
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a MORGAN, lewis & BoCKlUs May 4, 1979 Page Fourteen ' III. Since The Reed Report Was Furnished To The Licensing Board In Confidence, And Pursuant To The Protective Order, Disclosure Would Constitute An Abuse Of Discretion . The validity of any NRC determination with respect to the disclosure of the Reed Report must be viewed within the context of the unique circumstances of this case and the manner in which the Licensing Board came into possession of a copy of this Report. The Licensing Board in the Black Fox proceeding issued a subpoena duces tecum to GE for the Reed Report on
- October 10, 1978. GE appeared specially on October 30, 1978 and moved to quash this subpoena on the grounds, inter alia, that production of the Report could result in substantial com-petitive harm to GE since the Report contained confidential commercial information.
In response to a suggestion from the Board during oral argument on this motion and in order to avoid protracted litigation, GE entered into settlement negotiations with the other parties to the proceeding. A settlement agreement was negotiated by the parties and subsequently adopted by the Board whereby, inter alia, GE provided a copy of the Report to the Licensing Board in confidence for the limited purposes listed in the Board's January 5, 1979 Protective Order. The Licensing Board also adopted the Protective Order which GE had prepared for the Board's signature as part of this settlement agreement. In this Order the Board specifically ordered that "there were no countervailing considerations militating in favor of public disclosure to this report which clearly outweigh'the potential harm to the General Electric Company" and that "the scope of discovery of said report shall be limited to protect against disclosure of the information con-tained in the report to the general public." Moreover, the various Protective Agreements under which the Reed Report was provided to the other parties in the Black Fox proceeding all contained the provision that j's i 0; \
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In the event any NRC regulation, rule or ASLB order, other administrative order, or judicial ruling requires the disclosure of the information without providing the equivalent protection accorded under this Agreement, GE will have the right to immediately withdraw the information from Signator upon re-quest and Signator will promptly abide by that request. Without the assurances against public disclosure con-tained in both the Protective Order and the Protective Agreements, GE would not have voluntarily provided the Board with a copy of the Report. Although the Board itself did not sign a Protective Agreement at that time, and recently denied GE's request for the return of the Report pending completion of the Black Fox pro-ceeding, GE certainly had every reason to expect (i) that the Board would protect the Reed Report consistent with the terms of the Protective Order and the Protective Agreement when it provided the Report to the Board in confidence, and (ii) that the Report itself would receive the protection afforded by 10 C.F.R. 5 2.790. As a general rule, information which "is obtained in large part through promises of confidentiality must be kept con-fidential." See e.g., Brockway v. Dept. of Air Force, 518 F.2d 1184, 1194 (8th Cir. 1975). More specifically, the disclosure pursuant to an FOIA request of commercial information submitted to an agency by a private party after, and in reliance upon, assurances of co,nfidentiality with respect to that information have been made to the private party by that agency, constitutes an abuse of discretion. Metropolitan Life Insurance Co. v. Usery, 426 F. Supp. 150, 172 (D.D.C. 1976). See Charles River Park "A", Inc. v. HUD, 519 F.2d 935, 943 TD.C. Ctr. 1975). Cf. Cnrysler Coro. v. Brown, U.S. , No. 77-922 (April 18, IV79), n. 49. An agency action which constitutes an abuse of discretion is a violation of the Administrative Procedure Act and must be set aside upon review. 5 U.S.C.A. 5 706(2)(A), Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971). Given the fact that GE would not have voluntarily pro'-' vided NRC with a copy of the Reed Report without these assurances
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MORGAN, lewis &,8cCKlUs May 4, 1979 Page Sixteen ' of confidentiality, NRC cannot disclose the Reed Report under the FOIA without violating the provisions of the Administrative Pro-cedure Act. See Chrysler v. Brown, supra. IV. Since The Reed Report Was Submitted To The Licensing Board In Connection With A Licensing Proceeding, Disclosure Of The Reed Report Without GE's Prior Consent Would Violate The Provisions - Of 10 C.F.R. 5 2.790, Section 103(b) of The Atomic Energy Act, And The Trade Secrets Act And Would Be Contrary To The Policy Embodied In Exemption 3 Of The FOIA As indicated earlier, the Reed Report was provided to an NRC Licensing Board during the course of the Black Fox pro-ceeding in accordance with the procedures governing the conduct-of such proceeding set forth in the NRC Rules of Practice, 10 C.F.R. Part 2. More specifically, the Reed Report was pro-vided to the Licensing Board in confidence in accordance with the provisions of 10 C.F.R. . S Z.790 governing the production and protection of confidential commercial information submitted in connection with such proceedings. Pursuant to 10 C.F.R. 5 2.740(c), the Licensing Board's January 5, 1979 Protective Order restricted the disclosure of the Reed Report in that proceeding subj ect to the provisions of 10 C.F.R. 5. 2.790. Nevertheless, your letter suggests that NRC is evaluating the question of disclosure of the Reed Report solely on the basis of Subpart A of 10 C.F.R. Part 9, NRC's FOIA regulations (e.g., whether the Reed, Report is exempt under 10 C.F.R. 5 9.5(a)(4) and whether there are any " reasonably segregable" portions under 10 C.F.R. 5 9.5(b). Given the circumstances of this case, 10 C.F.R. Part 9 cannot be read in isolation in order to determine whether all or any part of the Reed Report can or should be dis-closed; rather, it is 10 C.F.R. S 2.790 which is controlling. At the very least, 10 C.F.R. Part 9 must be read in pari materia with the requirements of 10 C.F.R. 5 2.790 and the uncerlying statutory provisions related to 10 C.F.R. 5 2.790. Unde'r Section 2.790, participants in NRC proceedings. have the opportunity to request that any document which they submit in connection with such proceedings be withheld from public disclosure on the ground that it contains privileged or n, ; e , . 2238 130
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confidential commercial information. 10 C.F.R. 5 2.790(b)(1) . GE made such a request in this proceeding by virtue of its October 30, 1978 Motion To Quash Intervenor's Subpoena and its memorandum in support of that motion. This request was renewed in Mr. Dankmeyer's letter of March 15, 1979 to Mr. Samuel J. Chilk, the Secretary of the Nuclear Regulatory Commission. However, S 2.790 also provides that even when a decision has been made that the document should be withheld from public dis-closure, the document may still "be subj ect to inspection" by the Board and other parties in the proceeding under protective
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. order. 10 C.F.R. S 2.790(b)(6) . This is precisely what occurred in this proceeding pursuant to the Board's January 5, 1979 Pro-tective Order. In this regard, S 2.790 also provides that the party who originally requested that the document be withheld from public disclosure has the right to request withdrawal of the docu-ment and that the document "will be returned" without disclosure to the public in the event that the Commission denies the request for confidential treatment. 10 C.F.R. 5 2.790(c). Indeed, in Westinghouse Electric Co. v. NRC, 555 F.2d 82 (3d Cir. 1977),
the Third Circuit observed that under S 2.790: [A]n applicant requesting con-fidentiality has the absolute right to demand the return of any document claimed to contain proprietary in-formation in all NRC proceedings [except rulemaking proceedings] 555 F.2d at 88 (emphasis added). The Reed Report was obtained by the NRC as a result of a subpoena issued during the course of an adjudicatory pro-ceeding. In this regard, the Westinghouse court also concluded that " Congress must have intenced tne agency be subj ect to the established general law applicable to administrative agencies, including the case law respecting the protection of proprietary information obtained by compulsory process." 555 F.2d at 93. See also Wearly, et al. v. FTC, F. Supp. , 44 Ad. L.
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Zc 1043 (D.N.J. 1978) (f ailure to provide adequate protection to assure confidentiality of proprietary information, when dis-closure to th'e government is compelled by subpoena, amounts to unconstitutional "taking" and FTC has no right to release such information under the FOIA).
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MORGAN, Lcwis & Bocxius May 4, 1979 Page Eighteen . Accordingly, GE has an absolute right to demand the return of the Reed Report if NRC should determine that5the Reed 2.790, Report is not exempt from disclosure under 10 C.F.R. and NRC must comply with this demand prior to any public disclosure of this Report. */ Any public disclosure of the to an Report, or any portions thereof, by the NRC, pursuant FOIA request or otherwise, in contravention of the procedure outlined above would constitute a violation of 10 C.F.R. $ 2.790. Moreover, as shown below, such a disclosure would also violate the underlying statutory provisions upon which 10 C.F.R. $ 2.790 . is based as well as the policies embedded in Exemption 3 of the FOIA. Exemption 3 of the FOIA precludes the disclosure of information which is "specifically exempted from disclosure by statute" provided such statute " leaves no discretion on the issue" or " establishes particular criteria for withholding" , articular types of matter to be withheld." or "ref ersS to 5~U.S.C. p(b)(3) . 552 The Reed Report is "specifically exempted from disclosure" within the meaning of Exemption 3 under both the Trade Secrets Act, 18 U.S.C. 5 1905, and Section 103(b)(3) cf the Atomic Energy Act of 1954, as amended, 42 U.S.C. 5 2133 (b)(3), by virtue of the operation of 10 C.F.R. 5. 2.790. The Trade Secrets Act, in pertinent part, imposes criminal sanctions on any " officer or empicyee of the United States or any department or agency" of the United States who
" discloses or makes known in any manner or to any extent not authorized by law any information coming to him in the course of his employment or official duties" if such information " con-cerns or relates to the trade secrets, processes, operations, style of work, or apparatus" of any business entity. 18 U.S.C.
S 1905. Section 103(b) of the Atomic Energy Act provides in pertinent part that
*/ As noted previously, GE has requested that the Licensing
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Board retnrn the Reed Report to GE's custody, subj ect to GE's making the Report available to the The Licensing Board Licensing or Board Appeal Board as needed in the future. denied this request as premature in its Crder dated April 12, 1979. Nevertheless, GE was acting within its rights in I fmaking (this request and does not intend to waive Should any such any doubt exist rights on thisinpoint, providing this response.this GE requests that letter ce treated as
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MoRG AN. Lcwis &, BoCKIUs May 4, 1979 Page Nineteen The Commission shall issue licenses on
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a non-exclusive basis to persons applying , therefor . . . (3) who agree to make available to the Commission such tech-nical information and data concerning activities under such licenses as the Commission may determine necessary to promote the common defense and security and to protect the health and safety of the public. All such information may be used by the Commission only for the pur-poses of the common defense and security and to protect the health and safety of the public. 42 U.S.C. 5 233(b) (empnasis added). Congress adopted Exemption 3 of the FOIA in its present form in response to the Supreme Court's decision in FAA v. Robertson, 422 U.S. 255 (1975) in order to narrow the scope of this exemption. However, both the Trade Secrets Act and Section 103(b)(3) of the Atomic Energy Act are still
" exemption statutes" within the meaning of Exemption 3 since they are " delegations of authority to withhold information" and " refer to the particular types of matters to be withheld."
See FAA v. Robertson; Chrysler v. Brown. The regulations which NRC has adopted to implement the requirements of the Atomic Energy Act and the Trade Secrets Act concerning the production and protection of proprietary in-formation are contained in 10 C.F.R. S 2.790, not 10 C.F.R. Part 9. Since t,hese regulations must be consistent with the requirements of both the Trade Secrets Act and Section 103(b)(3) of the Atomic Energy Act, the question of whether disclosure of the Reed Report is permissible under either or both of these statutes, and, by necessary implication, whether Exemption 3 is applicable in this instance, hinges upon whether disclosure is permissible under 10 C.F.R. S 2.790, not 10 C.F.R. Part 9. See Chrysler v. Brown, supra, n. 49; Westinzhouse Electric Corp. v. S c hle s ing er , 542 F.2d 1190, 1203 (4th Cir. 1975), Sears Roebuck & Co. v. GSA, 553 F.2d 1378, 1383-85 (D.C. Cir. 1977). . g In' upholding the validity of Section 2.790 in WestEnkhousehElectricCo.v. NRC, 555 F.2d 82 (3d Cir. 1977),
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MoacAN, lewis S BoCKlus May 4, 1979 Page Twenty . e the Third Circuit had occasion to review the interrelationships among this regulation, Section 103(b) of the Atomic Energy Act, the Trade Secrets Act and the FOIA. In particular, the Court noted that in one of the later drafts of what was to become the Atomic Energy Act of 1954, Section 103(b)(3) stipulated that proprietary information provided to the Commission in connection with licensing proceedings could be used by the Commission "only for the purposes of common defense and security and to protect the health and safety of the public and for no other purpose." 555 F.2d at 90. The Court also noted that this language "was
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added to express a strong congressional policy against disclosure of proprietary information" and, although the phrase "and for no other purpose" was subsequently deleted to insure that Section 103(b)(3) did not limit the use of such information by the govern-ment, that " deletion does not appear to have been intended to alter the congressional policy against nondisclosure of such in-formation." 555 F.2d at 91. The Court also concluded that any release of informa-tion in accordance with the 5 2.790 would be " authorized by law" and therefore permissible under the Trade Secrets Act (555 F.2d at 94) and that - there was no reason to believe that in applying this test (for release of information contained in 52.790] NRC will disregard the long-standing con-gressional policy [ articulated in S 103(b)(3) of the Act] which disfavors
~ disclosure of proprietary information or that NRC will disclose proprietary information obtained in a licensing pro-ceeding other than such as bears on de-fense and health and safety. 555 F.2d at 92.
Accordingly, any public disclosure of the Reed Report by NRC pursuant to 10 C.F.R. Part 9 without the prior consent of GE or without providing GE with the opportunity to withdraw the Report prior to such disclosure would violate 10 C.F.R. S 2.790, Section 103(b)(3) of the Atomic Energy Act and the Trade' Secrets Act. As a result, the Reed Report must
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be considered exempt from disclosure under Exemption 3 of the FOIA by virtue of the operation of 10 C.F.R. 5 2.790 and these two statutes until such time as NRC obtains GE's consent to
- its release or GE elects not to withdraw the Report upon notification by NRC that the Report is not exempt from dis-closure under 10 C.F.R. S 2.790. As is the case with Exemption 4, any disclosure of the Report in violation of 5 2.790 and these statutes would constitute an abuse of NRC discretion under the Administrative Procedure Act.
_ V. 'Any Arguably Non-Exempt P'ortions Of The Report Are
" Inextricably Intertwined" With Exempt Portions And There Are Thus No " Reasonably Segregable" Portions Of The Report Which Can Be Disclosed Under The FOIA The attached affidavit demonstrates that, given the purpose and contents of the Reed Report, there are no reasonably segregable portions which can or should be dis-closed to che public. Consequently,even if Part 9 applies in this instance, disclosure is not warranted.
The " reasonably segregable" provision of the FOIA was added by Congress in the 1974 amendments to the Act. However, this provision actually merely codified existing law. See EPA v. Mink, 410 U.S. 73 (1973) . It should be noted that material which is " inextricably intertwined" with exempt material is itself exempt from disclosure by virtue of such inextricable intertwining, and that it is only material which is non-exempt and also not " inextricably intertwined" that may or may not be " reasonably segregable," and therefore possibly subj ect to disclosure under the Act. See generally, Attorney General's Memorandum on the 1974 Amendments to the FOIA. The Reed Report is a complex array of fact and opinion which was prepared by a blue-ribbon panel of GE experts with the obj ective of improving the availability and competitive prospects of GE's product. The Report itself and the presenta-tion, selectfbn, characterization, and opinion of those facts by this blue-ribbon panel have never been made public. Surely NRC can appreciate the intense competition among nuclear steam b[[ N Sh '
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, supply vendors, and the impact which the decreasing number of orders for new nuclear plants in recent years has had upon that competition. Thus, the smallest competitive edge ob-tained by a competitor can yield a disproportionately signifi-cant competitive advantage. , In the instant case, the mere fact that a particu-lar fact is identified in the Reed Report by the blue-ribbon panel carries with it a direct signal to the competition of the significance of that fact from a product improvement stand-point. Moreover, if the facts in the Reed Report are viewed as a whole, GE's competition would obtain a complete picture of the array of issues which are significant to product im-provement. In essence, these facts would precisely define the problem of product improvement. Beyond this, the charac-terization of fact and recommendations for action by the blue-ribbon panel provide the competition with a more finely tuned definition of the problem, and ultimately, a complete game plan to track GE's future product improvements in the market-place. Consequently, any single fact in the Reed Report can-not be divorced from the fact that it was identified as significant by a task force charged with recommending product improvements. In addition, any characterization of those facts cannot be divorced from the source of that characteriza-tion. Likewise, the totality of those facts cannot be dis-closed without providing the competition with the totality of GE's problem definitions, and, of course, the ultimate recom-mendations cahnot be disclosed without providing a complete windfall to the competition. Given the particular competitive circumstances in which GE is placed, even the most limited dis-closure would enable competitors to gain a significant ad-vantage in anticipating GE's product improvement. Moreover, even the most limited disclosure of fact -- being indelibly associated with the purpose and constitution of the Reed Report and Task Force -- cannot be disclosed without significant potential for negative aspersions by GE's competition. NRC must also surely recognize the adverse impact on potential customers that would be associated with the disclosure of the details of one company's searching self-analysis on product
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MORGAN Lewis & Socxtus May 4, 1979 Page Twenty-three In situations where a document goes beyond a mere recitation of primary facts, includes a characterization of those facts as they relate to a confidential business purpose, and is indelibly identified with that confidential business purpose, the entire document is exempt from disclosure since the non-exempt portions of the document are " inextricably intertwined" with Montrose Chemical Corp. v. the exempt portions. See e.g., Train, 491 F.2d 63 (D.C. Cir. 1974); Washington Research Proj ect v. HEW, 504 F.2d 238, 250-51 (D.C. Cir. 1974). Portions of the Reed Report, whether fact or opinion, can be pieced together by competitors to reconstruct confidential information which would substantially disadvantage GE in the marketplace (see, e.g., Fisher v. Renegotiation Board, 473 F.2d 109, 113 (D . C . Cir . 197 2) ) and the release of this information to GE's competitors would be akin to giving an opposing team a
" game plan" or a " play book" before a football game. Since Cuneo v.
Schlesinger, 484 F.2d 1086, 1089 (D.C. Cir. 1973). any meaningful non-exempt portions of the Reed Report are not severable from the Report without compromising the exempt portions of the Report, those portions are not subj ect to disclosure either. See Brockway v. Dept. of Air Foreg 518 F.2d at 1194; American Federation of Gov't Employees v. Dept. of Army, 441 F. Supp. 1308 at 1312-13 (D.D.C. 1977); Amway Corp. v. FTC, 1976-1 Trade Cas. at 68,441-45. NRC is therefore not required "to commit significant time and resources to the separation of dis-jointed wopds,(phrases, or even sentences which taken separately hav5" minimal 'or no information content." Mead Data Central
- v. Dept. of Air Force, 566 F.2d 242, 261, n. 55 (D.C.Cir 1977).
To rec'apitulate, on the basis of the foregoing, GE submits that (1) the Reed Report is not an agency record and therefore not subj ect to disclosure under the FOIA, (2) the Reed Report is exempt from disclosure under Exemption 4 of the FOIA, (3) disclosure of the Reed Report by NRC would constitute an abuse of discretion, (4) disclosure of the Reed Report with-out GE's prior consent would violate 10 C.F.R. $ 2.790, the statutes upon which that regulation is based, and the policies embodied in Exemption 3 of the FOIA, and (5) the entire Reed Report is exempt from disclosure. .
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MORGAN, Lewis & Bocxius t May 4, 1979 Page Twenty-four . . Since any additional access to the Reed Report by NRC's legal and technical staff without the express consent of GE would be contrary to the spirit, if not the letter, of the Protective Order, GE respectfully requests that NRC conduct a thorough review of the foregoing analysis, the affidavit attached hereto, and the other materials previously submitted to NRC in connection with this matter.before making any deter-mination as to whether such additional access is either neces-sary or desirable.
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If GE can provide any additional information with respect to any of the matters discussed above, please contact the undersigned. Respectfull submitted,
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George L. Edgar Attorney for General Electric Company
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GENERAL E L E C T R'I C COMPANY
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AFFIDAVIT OF
, WILLIAM J. ROTHS I, William J. Roths, being duly sworn, depose and state as follows-
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- 1. I am Manager of the Reliability Engineering Operation of the Nuclear Energy Group of the General Electric Conpany
("GE") and have been authorized by GE to s ta te that GE conside rs the information described in paragraph 2 as proprietary information and exempt from disclosure under the FOIA pursuant to 10 C . F . R . S 2.790 and 10 C.F.R. Part 9 of the Commission 's regula tions. s .
- 2. The Nuclear Reactor Study da'ted July 19 75 on the subject of GE's Boiling Water Reactor Nuclear Steam Supply System and known as the " Reed Report" was the product of a study conducted at the request of the Chairman of the Board of GE by a task force chaired by Dr. Charles E. Reed, Senior Vice President for Corporate Strategic Planning and Studies.
The Reed Report or verbatim extractions of portions the reof has, to the best of my knowledge and belief, consis ten tly been held in confidence by GE, no public disclosure has been made and it is not' available in public sources.- Disclosures of the Reed Report and/or verbatim extractions of portions thereof outside of GE have been limited to the following instances:
- a. The Nuclear Regulatory Commission staff examined but was not permitted to retain a copy of the Reed Report at GE 's of fices in Washington, D. C. in February , 1976.
(No copy of the Reed Report was released.)
- b. In 1976, 1977, and 1978, the s taf fs of three congressional committees reviewed the Reed Report subject to safeguards
," ' designed to protect the proprietary nature of the report.
(No copy of the Reed Report was re le as e d . )
- c. The Reed Report or verbatim extractions of portions thereof has been made available to counsel and designa ted technical consultants for parties and Atomic Safe ty and
- Licensing Board (Board) members in hearings concerning the issuance of a cons truction permit for Black Fox S ta tions 1 and 2 to the Public Service Company o f Oklahoma subject to a Protective Orde r iss ued. by ,the Board and 7p s ub j ect to signed protective agreements implementing bP,f b,> ( (the Protective Order.
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AFFIDAVIT - Page 2 William J. Roths ,
- d. Portions o f the Report have been made available to Counsel in connection with an NRC licensing proceeding.
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- 3. The Reed Report discusses potential improvements which could be made in GE nuclear reactors, as well as organizational and other internal changes that GE could make, all to improve the availability and competitive advantage of GE's product.
While many of the separate technical issues which are discussed in the Report may be in public sources, such as the NRC public document room or GE communications to customers , neither the identity of the issues considered by the Reed Report, nor - the analyses of and opinions concerning the issues con tained in the Report have ever been available in public sources. Thus, the Reed Report is a document containing material available in public sources inextricably intertwined with material that has never been revealed to the public. No portion can be reasonably segregated so as to avoid revealing information relating to the choice of issues discussed or analyses undertaken.
- 4. a. The Reed Report is an internal product improvement study with the objective of enhancing the availability and competitive advantage of GE's product. The disclosure of the Reed Report would provide GE's competitors with an identification of the specific areas where GE's product improvement efforts would be focused, and the recommended actions which could be taken to ef fectuate those improvemen ts.
In addition, the fact daat a particular issue is identified in the Reed Report carries with it a direct signal to GE's competitors of the significance of that issue from a product improvement standpoint. Moreover, if the facts in the . Reed Report are viewed as a whole, GE 's compe titors would obtain a complete picture of the array of issues which are significant to product improvement. The characterization of fact and recommendations for action in the Reed Report provide GE's competitors with an even more finely tuned definition of the problem, and ultima tely , a comple te game plan to track GE's future product improvements in the marke tplace. This would provide GE's competitors with GE's strategic plan for product improvement, and, without any significant expenditure o f resources , enable them to adjust or modify their own activities to ob tain a competi tive advantage . In addi tion, since the intent of the Reed S tudy was to identify potential improvements in the GE product, the ' Reed Report is a very one-sided view in that it presents only weaknesses and potential changes to improve th em . Such information could be used by -compe t_ito rs to discredit GE's product. e;
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- AFFIDAVIT - Page 3 William J. Ro ths
- b. By i ts ve ry nature , the Reed Report was not ,
intended to be a document to which cus tomers had ac.ces s ; no attempt was made la the document to balance the opinions (by stating contrary opinion, analyzing the cos ts of particular changes or prioritizing the improvements in terms of , the importance of the problems addressed or the likelihood of successful implementation of an i'mp rovemen t) stated in the Report or to answer the concerns which such opinions would be likely to raise. Consequently, disclosure of the Reed Report would cause substantial competitive harm to GE because potential customers might be less , likely to buy the GE product af ter reading the one-sided view presented. .
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/ zh Wil3iam [Roths Subscribed and sworn to before me this A/ day of N s,, ,
1979. <
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My commission expires: i j e c. omb 'StD
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I 1At4TA CLARA COUNTY J.ty:c:r m, ex::res JUL 24, 1931 ' (ls
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MORGAN, LEWIS & BOCKlUS -
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COUNSELOR 3AT LAW
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April 13, 1979 , BY HAND
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Sheldon J. Wolfe, Esquire Attachment 12 Atomic Safety and Licensing Board Panel U.S. Nuclear Regulatory
- _ Commission p g Washington, D.C. 20535 b s, s 1k. Frederick J. Shon, Member 'G#'
Atomic Safety and Licensing g - Board Panel -
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;9 U.S. Nuclear Regulatory Commission 'b 9,,, ' #
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20555
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[s Dr. Paul W. Purdom Director, Environmental Studies Group
.Drexel University 32nd and Chestnut Streets Philadelphia, Pennsylvania 19104 Re: In the Matter of the Application of Public Service Company of Oklahoma, Associated Electric Cooperative, Inc.
and Western Farmers Electric Cooperative (Black Fox Station, Units 1 and 2) . Docket Nos. STN 50-556, STN 50-557 Gentlemen: In accordance with the request contained in your Order of April 2, 1979 in the above-referenced proceeding, on April 9, 1979 the NRC Staff filed its " Response to General Electric's Request For Licensing Board To Return Reed Report." In this Response, the Staff concluded that GE's request for the return of this report was " premature" and should be denied without prejudice to GE's right to resubmit the motion after the Board "hasicompleted its Partial Initial Decision in this
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matted and all appellate review is completed." The Staff
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. . , g 6 MoncAN, LtWIS & BoCKIUS
-2 opposed the return of the Report at this juncture because (1) the Board will have "a contLnuing need for access to the full report" until it completes its decision, and (2) the
- Appeal Board has indicated in other proceedings that it has ,
the authority to "take testimony and determine factual matters jb novo." The Staff has apparently misconstrued the nature of GE's request. Although the Staff correctly noted that GE has not requested the return of the verbatim extractions from the Reed Report, which was introduced into evidence and made part of the record, the Staff overlooked the fact that GE also offered
- to make the Report itself available to the Board on an immediate basis at GE's Bethesda, Maryland office, or some other location convenient to the Board, should any need later arise.
The Staff's desire that the Board continue to "have access to the full report" af ter it returns its copy to GE will thus be satisfied. In addition, the Appeal Board's authority to take testimony and determine factual matters de novo is really not germane to the question of whether the Report can
- or should be returned to GE at this juncture. Neither the Appeal Board's authority nor its ability to take testimony and make factual determinations will be impaired by returning the report to GE now. The Report was never introduced into evidence and is not a part of the record in the Black Fox proceeding. Nevertheless, if for some reas.4 the appeal Board desires to review the Reed Report at some point in the future, GE will make the Report available to the Appeals Board at that time.
Since the Staff could point to no legal impediment to the return of the report, and since the concerns which prompted the Staff's opposition to the return of the Report have been resolved, GE submits that the Reed Report and the related Sub-Task Reports'should be returned,as soon as possible. Respectfully submitted,
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. Attorney for
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UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION .
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BEFORE THE ATOMIC SAFETY AND LICENSING BOARD
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IN THE MATTER OF
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) Docket Nos. .
PUBLIC SERVICE COMPANY OF STN 50-556 OKLAHOMA, ASSOCIATED ELECTRIC ) COOPERATIVE, INC., and ) STN 50-557 WESTERN FARMERS ELECTRIC ) COOPERATIVE, INC.-- )
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(Black Fox Station, ) Units 1 and 2) )
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CERTIFICATE OF SERVICE
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I hereby certify that service has on this day been
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effected by personal delivery or first class mail on the following:
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Sheldon J. Wolfe, Esquire L. Dow Davis, Esquire Atomic Safety and Licensing William D. Paton, Esquire Board Panel Colleen Woodhead, Esquire U. S. Nuclear Regulatory Counsel for NRC Staff U. S. Nuclear Regulatory Commission Washington, D. C. 20555
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Commission Washington, D. C. 20555 Mr. Frederick J. Shon, Member Atomic Safety and Licensing Mr. Clyde Wisner Board Panel NRC Region 4 U. S. Nuclear Regulatory Public Affairs Officer Commission 611 Ryan Plara Drive, Suite 1000 20555 Arlington, Texas 76011 Washington, D. C. Dr. Paul W. Purdom Joseph R. Farris, Esquire Director, Environmental Studies Robert Franden, Esquire Group Green, Feldman, Hall & Woodard Drexel University 816 Enterprise Building Tulsa, Oklahoma 74103 32nd and Chestnut Streets Philadelphia, Pennsylvania 19104
- Andrew T. Dalton, Esquire Joseph Gallo, Esq. 1437 South Main Street, Suite 302 Isham, Lincoln & Beale Tulsa, Oklahoma 74119
( 1050 - 17th Street, N.W. Washington, D. C. 20036
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sn: - 2238 144
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- s Mrs. Ilene H. Younghein Mr. Vaughn L. Conrad 3800 Cashion Place Public Service Company of Oklahoma City, Oklahoma 73112 Oklahoma ,
Post Office Box 201 Atomic Safety and Licensing Tulsa, Oklahoma 74102 - Appeal Board Panel U. S. Nuclear Regulatory Mr. T. M. Ewing Commi's sion Acting Director Washington, D. C. 20555 Black Fox Station Nuclear Proj ect . Atomic Safety and Licensing Public Service Company Board Panel of Oklahoma U. S. Nuclear Regulatory Post Office. Box 201 Commission Tulsa, Oklahoma 74102 Washington, D. C. 20555 Mrs. Carrie Dickerson Docketing and Service Section Citizens Action for Safe Office of the Secretary of Energy, Inc. the Cocmission Post Office Box 924 U. S. Nuclear Regulatory Claremore, Oklahoma 74107 . Commission
- Washington, D. C. 20555 Mr. Maynard Human i (20 copies) General Manager
,-* Western Farmers Electric Mr. Lawrence Burrell Cooperative Post Office Box 429
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. Route 1, Box 197 Fairview, Oklahoma 73737 Andarko, Oklahoma 73005 Mr. Gerald F. Diddle Dr. M. J. Robinson General Manager Black & Veatch Associated Electric Post Office Box 8405 Cooperative, Inc. Kansas City, Missouri 64114 Post Office Box 754 Springfield, Missouri 65801 Paul M. Murphy, Esq.
Michael 1. Miller, Esq. Jan Eric Cartwright Alan P. Bielawski, Esq. Attorney General of Oklahoma Isham, Lincoln & Beale Greg Thomas One 1st National Plaza Assistant Attorney General Suite 2400 Charles S. Rogers Chicago, . Illinois 60606 Assistant Attorney General State of Oklahoca . State Capitol Oklahoma City, Oklahoma 73105 Leorge Se' Wscgar
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Specid1 Counsel fo-Dated: April 13, 1979 The General Elect.ic Company
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