ML19347F111

Pleading in Form of Brief,Providing Outline of Concept of Character as Guide to Evidentiary Questions on Issue of Competence & Character of Util.Character Is an Abiding Disposition to Behave in Specified Way

ML19347F111
Person / Time
Site:	South Texas
Issue date:	05/14/1981
From:	Coy P Citizens Concerned About Nuclear Power, INC.
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML19347F110	List: ML19347F109 ML19347F111 ML19347F112
References
NUDOCS 8105150262
Download: ML19347F111 (6)

Text

a 3 T\

!. .* . . UNITED STATES OF AMERICA Do(*d ut m v NUCLEAR REGULATORY COMMISSION >-

g* BEFORE THE ATOMIC SAFETY AND LICENSING BOARD hi 1$N*'

1 C* Tete of the Sec.

I D'EllEf ' - 4 In the !!atter of )

4 04-

)

4

HOUSTON LIGHTING AND POWER CO. )

(South Texas Project, Units 1 & 2) )

Docket Nos. 50-498 50-499

)

I CCANP BRIEF ON

" CHARACTER"

$ . As a result of numerous investigations resulting in findings i

of repeated violations of NRC standards and regulations, the basic I

, competence and character of the license applicant, Houston Lighting and Power Co. has come into question as a principal issue in these licensing hearings. The purpose of this brief is to provide some outline to the broad concept of " character" as a guide to evidentiary questions at trial.

G'

. 1. The Atomic Energy Act provides that:

1) Each application for a license hereunder shall be in writing and shall :pecifically state such information as the Commissic i by rule or regulation may determine to be necessary to decide

... the character of the applicant ... 42 U.S.C. 82232 (emphas.

added).

The character of the applicant is an essential and one of the very

{ few statutorily mandated criteria for receiving a license from the a

Nuclear Regulatory Commission for construction or operation of a nuclear power plant. The Act goes on to provide that:

. Any license may be revoked for any material false statement in the application ... or because of conditions revealed by such application ... or any report, record or inspection or other means which would-warrant the Commission to refuse 9 3 to grant a license on an original application. 42 U.S.C 2236.

Accordingly, a finding of inadequate character would be grounds for eitherdenying or revoking a license.

c 810313o g P00R OR GR.

2 4

2. Tha promin;nt placa which the question of character takes in the. license application process.is integral to the whole regulatory j

scheme by which the licensee is given primary responsibility for

, the construction and operation of a safe rector. The NRC does not itself take front line responsibility for assuring that a plant is either built or operated safely. Rather the licensee is..

required to follow procedures established by the NBC, or approved 5

l in the licensing process, which are designed to assure the safe construc tion or operation of the react'r.o The role of the NRC is l  ?( essentially that of an auditor, to see that procedures are followed.

I j This reliance on the licensee demands as an essential element of 1

j the whole regulatory scheme that the licensee demonstrate responsibili dI reliabilitys honesty and care in executing the procedures that are

• 4 the only assurance that a reactor will be L.11t and operated safely.

1 The character of the licensee stands, in :this regulatory scheme, i

I as the principal bulwark against the untold health consequences of 4

excessive emissions of radiction into the environment or the

potentially catastrophic effects of a nuclear reactor " class nine"

] accident. (For an instructive comparison between the effect of a 1

a serious reactor accident and that of a one-megaton nuclear weapon l see " Catastrophic Releases of Radioactivity," Scientific American,

/

April 1981, Vol. 244,No.4,pp.41-47. This article concludes that the area of land contaminated by the reactor accident is smaller (somewhat f

j more than half at a 10 rem dose rate)"but the land stays contaminated

' longer," id. 45.) Cnce tie character of the licensee is brought l'

I into doubt, as it has in t.lis proceeding, it becomes the most 2

importan t question by far to be faced by the licensing authority.

10 4

• 3. The Atomic Energy Act has not sought to define in detail the i

character required to take responsibility as a licensee for the J construction and operation of a nuclear reactor. Indeed the Supreme a

3

~

' Court hcs atetcd that, Reputation and character are quite tangible attributes, but

-there can.be no legislative definition of them that can

-; j.

automatically attach to or identify individuals possessing them, and necessarily the aid of some executive agency must be invoked. Hall v Geicer- Jones Co., 242 U.S. 539, 553 (1917)

As a general matter, where the legislature has not provided an express directive, the term character sluuld be given its commonly

'j understood definition. Mester v. U.S., 70 F.Supp. 118 (E.D.N.Y. 1947)

. at 122. But the administrator must weigh those attributes of

] character most heavily that are most significant for proper discharge of a licensee's responsibilities.

4. Most broadly, character is the moral quality of a person which

. constitutes his intrinsic nature. Daley v License Appeal Commission, 211 NE2d 573, 576. This is equally true of a real person or the corporation, which has a fictional personality comprised of all those who control the corporation. In the cited case the license of j a sma ll corporation was challenged on the basis of the character of its president. For a large diffusely controlled corporation, the character of many more persons contributes to making up the corporate character. In addition to the corporate officers and top management, there is the Board of Directors and even principal shsareholders, who through exercise of control over corporate affairs' lend to its composite corporate character. The very diffuseness of this control and inability to fix a precise locus of responsibility for determining the overall corporate character gives thecorporate character the same intrinsic nature as that of a real person.

, A Court of Appeals has stated that, i,

" Character" is a generalised description of one's dispostion in regard to a general trait such as honesty, temperance or carefulness... Frase v Henry, 444 F.2d 1228 (10th Cir. 1971).

A corporation, as the composite of those who control the corporation, u

. - 4 similarly displays a character defined by its inherent disposition i-with regard to certain traits such as honesty, reliability, carefulness j regard for regulations imposed by law and willingness to take responsibility.

} This intrinsic quality of character distinguishes it from i

mere questions of competence. Competence can be acquired through training and exp2rience, admonition and correction of past errors.

J' In the corporate context competence can be bought in the form of 4

hiring persons with the competence not already possessed by the l li employees of the corporation. Character though is less mutable'.

t l It persists in the face of admonitions and experience, much as i

the violations involved in this proceeding  :. lasted through i

numerous inspections and warnings. Absent a radical change in the g control of a corporation, the corporate character will remain 1: just as immutable as that of a real person.

Any repetition of 1

,' behavior that has come under continued reprimand or serious punishment I:

. in the past should be attributed to corporate character. A lack i

of willingness, even anxiousness, to conform to the requirements I of a license af ter such experience certainly displays a f ailure of Y, the character necessary to properly construct and operate a nuclear

}.

reactor.

5. The NRC has not yet had occasion to lend regulatory definition ii 11 and detail to the legislative requirement that a licensee show

I

adequate character in-its application. The first serious questioning of the adequacy of an applicant's character has occurred only in the present proceedings and those regarding the restart of Three i

Mile Island, Unit 1. The NRC, in its September 22,1980 Order did provide important contours to the concept of character for the proceedings by identifying two important patterns which I

the allegations against Houston Light and Powerrevealed:

4 4

_Z. ____

i

,l -

• 5 4

i) f ailure to keep itself knowledgeable about the j construction of the plant, and

11) abdication of responsibility for construction.

3 It is of course axiomatic that only the licensee bears responsibility l

lI ,

for the construction of the f acility. E.g. VEPCO(North Anna) 6 NRC 1127 (1977).

I n this same September 22,1980 Order the NRC also suggested

j. ' that character, rather than something of a lesser order, may be

]' involved in the applicant's deficient conduct. In response to several reasons or " root causes" offered by the applicant for its conduct the NRC queried whether these problems were "themselves t symptoms of some other and more basic deficiencies."(Slip Op. 5,n.2).

[ The.NRC also indicated that history and the repetitious nature of 1

7 1

the conduct would also be relevant to the issue of character,id. 17.

It is clearly past conduct and not promises or future projections l J th?.t consti tu tes charac ter.

d c 6. A number of cases from the analogous context of Federal Con-munications Commission licensing have helped define the term

" character" as used in the licensing context. For example in Barrow v FCC, 285 F.2d 666,668(D.C.Cir. 1960) it was said that, Character in respect to a radio operator obviously includes i reliability in the situations in which such an operator must

, pperate.

In another case " disregard for regulatory laws" was considered an important indication of character inadequacy. Mester v. U.S., supra.

Commissioners Gilinsky and Bradford have cited tuo FCC cases,in i-

.,' their separate views on the Septe7.ber 22,1980 Order,directly~ holding

, that abdication of responsibility or abdication of licensee know-ledge about operations may be grounds for denying a license. And of course a history of' repeated violations of agency rules is a ground for disqualification. United Broadcasting Co. v FCC cited at 12 NK: ,__

4 1 .. -

Conclusion Character is the single most important criteria for 1l ' judging whether a license should be granted for construction 4

cr operation of a nuclear reactor. The issues of competence I

and character are <:leorly distinguished by their respective e differing susceptibility to change and reform. Competence t

'1 can be acquired while character cannot. Character is an abiding i

i disposition to behave in a certain way. .A decision on character l1 is not to be confused with issues of simple non-compliance with i

regulato r y requiremnts. Instances of non-compliance, which to some

, limited extent may .s normally be expected, can be corrected jd if regulatory procedures are routinely and willingly followed and NRC inspectors are welcomed with openness and candor while performing

} their function as auditors.

it The issue of character arises when similar kinds of l problems are repeated, routine procedures are cubverted, numerous 4

l1 warnings and admonitions to not lead to change, and inspectors

~

intended to assure compliance or employees properly concerned with l

quality and safety are met with obstruction. Remedial actions taken after non-complince has been discovered, while relevant il

,. to the ultimate safety of a clant or even to a refurbished competence, cannot be relevant to the underiving and more endurina cuality of character. Once past actions have esta lished a f

{ disposition toward unreliability, lack of care, disregard for ll I conformance with regulatory requirements, lack of candor and i abdication of responsibilities, no amount of " remedial" action J- -

can rehabilitate rhat character.

I

j. . . ,

ij.

1 Respectfully submitted Robert Hager Esq. '

- di{ Of counsel g/f,/ ,f,,,

i Pat Coy for CCANP 1!

8 1

- . ,. - - - - - - - - , , . . . . _ .