ML19305C000

Petition for Certification of ASLB 800307 Order Granting DOJ & NRC Joint Motion to Compel Production & Testimony Re Cost Feasibility of Interconnections.Settlement Discussions Must Be Protected Per Wolf Creek Case.W/Certificate of Svc

ML19305C000
Person / Time
Site:	South Texas, Comanche Peak
Issue date:	03/12/1980
From:	Stahl D CENTRAL & SOUTH WEST CORP., SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	NRC ATOMIC SAFETY & LICENSING APPEAL PANEL (ASLAP)
References
NUDOCS 8003250456
Download: ML19305C000 (11)

Text

. ,

UNITED STATES OF A!! ERICA NUCLEAR REGULATORY cot 1 MISSION BEFORE THE ATO!!IC SAFETY AND LICENSING APPEAL BOARD In the Matter of: S S

HOUSTON LIGHTING & POWER S NRC DOCKET NOS . 50-498A COMPANY, THE CITY OF SAN S 50-499A ANTONIO, THE CITY OF AUSTIN,5 (ASLB) and CENTRAL POWER AND LIGHT S cot 1PANY S (South Texas Project, Unit S Nos. I and 2) S S

TEXAS UTILITIES GENERATING S NRC DOCKET NOS. 50-445A COMPANY , ET AL. S 50-446A (Comanche Peak Steam 5 (ASLB)

Electric Station, S

, Unit Nos. I and 2) S PETITION OF CENTRAL AND SOUTH WEST CORPORATION, et al., FOR CERTIFICATION OF ORDER GRANTING JOINT MOTION OF DEPART!!ENT OF JUSTICE AND THE NUCLEAR REGULATORY COMMISSION STAFF FOR MODIFICATION Of THE BOARD 'S ORDER REGARDING PROTECTION OF JETTLE!!ENT DISCUSSIONS On March 7, 1980, the Atomic Safety and Licensing Board (the " Board") granted the Joint Motion of the Department of Justice and the Nuclear Regulatory Commission Staff to compel production of and testimony about certain documents in the possession of Texas Utilities Generating Company

( "TUGCO " ) and Houston Lighting and Power Company ("HLP")

which assessed the feasibility or cost of interconnections between the Texas Interconnected System (" TIS") and the Southwest Power Pool ( "SW PP ") . Prior to the !! arch 7 Order, the Board's Order of April 16, 1979 had permitted HLP, TUGCO and other parties to withhold documents generated M 800:250 VSC

l l

" solely as a part of negotiations to settle this pro-  !

ceeding."

Central and South West Corporation, Central Power and Light Company, West Texas Utilities Company, Southwestern Electric Power Company and Public Service Company of Oklahoma (collectively, "CSW") petition the l Appeal Board to direct certification and review of the question whether documents prepared during settlement should now be disclosed, and for reversal of the March 7 Order. In addition, CSW request that, preliminarily, the Appeal Board stay the effectiveness of the March 7 Order until the Appeal Board rules on the merits of this dispute.

An Appeal Board panel has already held that directed certification under.10 C.F.R. 2.718(i) is appro-priate under circumstances almost identical to those pre-sented here. In Kansas Gas and Electric Company (Wolf Creek Unit No. 1), 3 NRC 408, ALAB-327 (ALAB, 1976), the Appeal Board was requested to direct certification of a Licensing Board's Order which required license applicants to disclose to third parties a nuclear fuel supply contract between applicants and Westinghouse Electric Corporation. Recogniz-ing that the underlying issue was one of importance, that the interests of the parties were substantial and that the The Licensing Board stayed the effectiveness of the March 7 Order only until March 17, 1980.

l ,

m

Ordsr "must be reviewed now or not at all" (3 NRC at 413) the' Appeal Board directed certification. The' importance of the issue here and the interests of the parties in maintain-ing the confidential nature of the documents underlying their settlement negotiations are at least as great as. the import-ance of the issue and the interests of the parties in Wolf Creek.

Rule 2.759 of this Commission's Rules of Practice explicitly states the Commission's recognition "that the public interest may be served through the settlement of particular issues in a proceeding, or the entire proceeding." An order requiring parties to disclose generally all documents generated in connection with settlement would very likely frustrate the policy favoring settlement stated in Rule 2.759. Parties, knowing that settlement-related appraisals of their posi-tions would be discoverable in the event settlement was not effected, would hesitate to engage in settlement discussions at all. Owing to the complexity of most licensing proceedings, no party to a contested proceeding could undertake even pre-liminary settlement discussions without a relatively detailed analysis of the strengths and weaknesses of its case.

Likewise, as was the case with the Order in Wolf Creek, the Licensing Board's Order must be reviewed now or not at all. Stated in terms of the standard for directed certification formulated in Public Service Company of Indiana (Marb' e Hill, Units 1 & 2 ), 5 NRC 1190, 1191,-92

( ALAB , 1.F 7b < ae March 7 Order threa cens immediate and serious irreparable injury that cannot be alleviated by appellate review at the conclusion of an evidentiary hearing.

On the other hand, the Department and the Staff would not be prejudiced by appellate review at this stage of the proceed-ing. Certification.and resolution of this matter on an expedited basis as suggested herein would neither delay the hearing nor prejudice any party and would, conversely, serve to adjudicate important issues that can only be resolved at this stage of the proceeding.

The-Appeal Board should further determine that the Licensing Board erred in requiring disclosure of documents generated in connection with settlement discussions. In J Wcif Creek, supra, the Appeal Board identified two criteria which must be met before restrictions can be placed upon the disclosure of information relevant to an issue in adjudica-tion: (1) that the information be of a type " customarily held in confidence by its originator" and (2) that there is a

" rational basis" for treating it as confidential. 3 NRC at 417.

Documents prepared in connection with settlement discussions satisfy botn criteria. There can be no question that any party to any type of contested proceeding would need to protect the confidentiality of documents prepared in connection with possible settlement of that proceeding. The

" rational basis" for this need is obvious. Meaningful settlement discussions cannot be successfully concluded - or indeed even initiated - if the negotiating process is opened l

to scrutiny by third parties who have interests at odds with, or _ at least not the same as, the parties to the negotiations. ,

l The Licensing Board recognized this in Flordia Power & Light '

Company (S t. Lucie Unit No. ) 9 NRC 164, 183-84 (ASLB 1979). Florida Cities had requested the Licensing Board to compel Florida Power to produce "all documents pertaining to settlement negotiations in this proceeding. " The Licen-sing Board refused, stating that it was " guided by the policy stated in 10 C.F.R. 2.759 (which] encourages settling contested proceedings . . . Requiring a party to produce settlement documents would be inconsistent with that policy" 9 NRC at 184. The Board noted the similar policies embodied in Federal Rule of Evidence 408, which excludes evidence of statements made in compromise negotiations because admission of such evidence would chill free negotiations leading to settlement. FRE 408, advisory committee notes; See also McCormick, Evidence SS76.251. The Licensing Board noted that FRE 408 does not immunize documents merely because produced at settlement negotiations if one can discover them by other means. But this proviso did not help Florida Cities:

"Here Florida Cities is not seeking documents which may also happen to be related to settlement talks, it is directly seeking settlement papers," 9 NRC 183-84.

The settlement process in virtually every licensing proceeding will be a lengthy one requiring the resolution of complex factual issues. In this proceeding the discussions originated among the private utility companies having opposing positions, on the assumption that no final settlement acceptable to all parties could be achieved until these primary antagonists could develop the basis for a settlement among themselves. Preparation for development of this basis for an agreement required that these parties prepare written analyses and recommen-dations. Generally such analyses and recommendations are prepared on the assumption that other parties to the liti-gation will not be made privy thereto. In this case, the assumption that these analyses and recommendations would not be disclosed to others was based on the general and reasonable expectation that settlement documents would remain confidential, as well as the Licensing Board's specific Order to that effect. Rescission of that confidentiality and compelling the disclosure of docu-ments prepared as part of the settlement process would not only inhibit settlement discussions in future cases, but would be fundamentally unf air to the parties to this case who have participated in settlement discussions to this point, and may well jeopardize the continuation and ultimatu success of those discussions. The Licensing Board's March 7 Order would have precisely these adverse ef fects. i 1

l Since discouragement of settlement discussions is not in the best interest of this Commission, parties to proceedings

beforo thn Commicsion or tha public ganorally, CSW respect-fully requests that this Appeal Board reverse the March 7 Order and determine that documents prepared in connection with settlement discussions should be non-discoverable.

WHEREFORE, CSW respectfully requests that this Appeal Board:

(1) grant directed certification of the Licensing Board's March 7, 1980 Order; (2) expedite the hearing of this matter by requiring those parties opposing directed certification and supporting the March 7 Order to file their responses by March 19, 1980; (3) reverse the March 7 Order and hold that docu-ments prepared in connection with settlement discussions are not subject to discovery; and (4) stay the effectiveness of the March 7 Order pending resolution of this matter.

Respectfully submitted, IS -

LINCOLN & ALE By I. -

David F)( Stahl One of the Attorneys for CENTRAL AND SOUTH WEST CORPORATION, CENTRAL POWER AND LIGHT COMPANY, WEST TEXAS UTILITIES COMPANY, SOUTHWESTERN ELECTRIC POWER COMPANY and PUBLIC SERVICE COMPANY OF OKLAHOMA ISHAM, LINCOLN & BEALE 1120 Connecticut Avenue, N.W.

Suite 325 Washington, D.C. 20036 March 12, 1980

UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION 1

BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD In the Matter of: S S

4

' HOUSTON LIGHTING & POWER S NRC DOCKET NOS. 50-498A COMPANY, THE CITY OF SAN S 50-499A ANTONIO, THE CITY OF AUSTIN,S and CENTRAL: POWER AND LIGHT S COMPANY S

(South Texas Project, S Unit Nos. 1'and 2) S S

TEXAS UTILITIES GENERATING S NRC DOCKET NOS. 50-445A COMPANY, et al. S 50-446A (Comanche Peak Steam S

~ Electric Station, S

, Unit Nos.El and 2) S CERTIFICATE OF SERVICE I, David M. Stahl, hereby certify that copies of the foregoing Petition of Central and South West Corporation, 4

et al., for Certification of Order Granting Joint Motion of Department of Justice and the Nuclear Regulatory Commission Staff for Modification of the Board's Order Regarding Pro-tection of Settlement Discussions were served upon the following listed persons by deposit in the United States mail, first class postage prepaid on this 13th day of

. March, 1980.

/ ~

David M. Stahl

. . .- ~ -.... . ._ - -.--

MAILING LIST Marshall E. Miller, Esq. Roy P. Lessy, Jr., Esq.

U.S. Nuclear Regulatory Commission Michael B. Blume, Esq.

Washington, D.C. 20555 U.S. Nuclear Regulatory Comm.

Washington, D.C. 20555 Michael L. Glaser, Esq.

1150 17th Street, N. W. William C. Price -

Washington, D. C. 20036 Chairman and Chief Executive Officer Sheldon J. Wolfe, Esq. Central Power & uight Co.

U.S. Nuclear Regulatory Commission P. O. Box 2121 Washington, D.C. 20555 Corpus Christi, Texas 78403 Atomic Safety and Licensing G. K. Spruce, Gen. Manager Appeal Board Panel City Public Service Board U.S. Nuclear Regulatory Commission P. O. Box 1771 Washington, D. C. 20555 San Antonio, Texas 78203 Chase R. Stephens (20) Mr. Perry G. Brittain Docketing and Service Section President U.S. Nuclear Regulatory Commission Texas Utilities Generating Co.

Washington, D. C. 20555 2001 Bryan Tower Dallas, Texas 75201 Jerome D. Saltzman Chief, Antitrust and Indemnity Group R. L. Hancock, Director U.S. Nuclear Regulatory Commission City of Austin Electric Utility Washington, D.C. 20555 P. O. Box 108P Austin, Texas 78767 J. Irion Worsham, Esq.

Merlyn D. Sampels, Esq. G. W. Oprea, Jr.

Spencer C. Relyea, Esq. Executive Vice President Worsham, Forsythe & Sampels Houston Lighting & Power Co.

2001 Bryan Tower, Suite 2500 P. O. Box 1700 Dallas, Texas 75201 Houston, Texas 77001 Jon C. Wood, Esq. Michael I. Miller, Esq.

W. Roger Wilson, Esq. James A. Carney, Esq.

Matthewsi.Nowlin, Macfarlane & Barrett Isham, Lincoln & Beale 1500 Alamo National Building One First National Plaza San Antonio, Texas 78205 Chicago, Illinois 60603 Morgan Hunter, Esq.

J. A. Bouknight, Esq. Bill D. St. Clair, Esq.

Bill Franklin, Esq. McGinnin, Lockridge & Kilgore Lowenstein, Newman, Reis, Axelrad Fifth Floor, Texas State

& Toll Bank Building 1025 Connecticut Avenue, N. W. 900 Congress Avenue Washington,.D. C. 20036 Austin, Texas 78701

R. Gordon Gooch, Esq. Don R. Butler, Esq.

l Baker & Botts 1225 Southwest Tower l 1701 Pennsylvania Avenue, N. W. Austin, Texas 78701 l Washington, D. C. 20006

J Jerry L. Harris, Esq. W. S. Robson Richard C. Balough, Esq. General Manager City of Austin South Texas Electric P. O. Box 1088 Cooperative, Inc.

Austin, Texas 78767 Route 6, Building 102 Victoria Regional Airport Joseph B. Knotts, Jr., Esq. Victoria, Texas 77901 Nicholas S. Reynolds, Esq.

Debevoise-& Liberman Robert _C. McDiarmid, Esq.

1200 17th Street, N. W. Robert A. Jablon, Esq.

Washington, D. C. 20036 Marc R. Poirier Speigel & McDiarmid Don H. Davidson 2600 Virginia Avenue, N.W.

City Manager Washington, D. C. 20036 City of Austin P. O. Box 1088 Kevin B. Pratt Austin, Texas 78767 Texas Attorney General's Office P. O. Box 12548 Jay Galt, Esq. Austin, Texas 78711 Looney, Nichols, Johnson & Hays 219 Couch Drive William H. Burchette, Esq.

Oklahoma City, Oklahoma 73102 Frederic H. Ritts, Esq.

Law Offices of Northcutt Ely Knoland J. Plucknett Watergate Building Executive Director Washington, D. C. 20037 Committee on Power for the Southwest, Inc. Wheatley & Wolleson 5541 East Skelly Drive 1112 Watergate Office Bldg.

Tulsa, Oklahoma 74135 2600 Virginia Avenue, N.W.

Washington, D. C. 20037 John W. Davidson, Esq.

Sawtelle, Goods, Davidson & Tiolo Joseph Rutberg, Esq.

1100 San Antonio Savings Building Antitrust Counsel San Antonio, Texas 78205 Counsel for NRC Staff U.S. NRC Washington, D. C. 20555 Douglas F. John, Esq. Linda L. Aaker, Esq.

Akin, Gump, Hauer & Feld Asst. Attorney General -

1333 New Hampshire Avenue, N. W. P. O. Box 12548 Suite 400 Capitol Station Washington, D. C. 20036 Austin, Texas 78711 l

l W. N. Woolsey, Esq. Robert M. Rader~

l Dyer and Redford Conner, Moore & Corber 1030 Petroleum Tower 1747 Pennsylvania Ave., N.W. ,

Corpus Christi, Texas 78474 Washington, D.C. 20006  :

l Donald Clements Melvin G. Berger, Esq.

l - Gulf States Utilities Company Ronald Clark, Esq.

j P. O. Box'2951 Antitrust Division, Energy

, Beaumont, Texas 77704 Section Room 8308 414 llth Street, N.W.

Washington, D.C. 20530

~~ ~

Charles G. Thrash, Jr., Esq. Joseph J. Saunders, Esq.

E. W. Barnett, Esq. Chief, Public Counsel &

Theodore F. Weiss, Esq. Legislative Section J. Gregory Copeland, Esq. Antitrust Section Baker & Botts U.S. Department of Justice 3000 One Shell Plaza P. O. Box 14141

. Houston, TX 77002 Washington, D.C. 20044 Donald A. Kaplan, Chief Robert E. Bathen Robert Fabrikant, Asst. Chief R. W.' Beck & Associates Energy Section . P. O. Box 6817 Antitrust Division- Orlando, Florida 82853 U.S. Department of Justice Washington, D.C. 20530 Mr. G. Holman King West Texas Utilities Company Nancy Luque P. O. Box 841 Susan B. Cyphert Abilene, TX 79604 Ronald H. Clark Frederick H. Parmenter John Carney, Esq.

Antitrust Division Weil, Gotshal & Manges Energy Section 767 Fifth Avenue U. S. Department of Justice New York, NY 10022 Room 8413 414 lith Street, N.W.

Washington, D.C. 20530

.