ML20086A934

Motion for Stay of ASLB 831110 & Aslab 831114 Orders Re Discussions Between Employee Witnesses & Intervenors.Since Hearing in Progress,Contact Between Util Employee Witnesses & Intervenor Inappropriate.Certificate of Svc Encl

ML20086A934
Person / Time
Site:	Catawba
Issue date:	11/15/1983
From:	Mcgarry J DEBEVOISE & LIBERMAN, DUKE POWER CO.
To:	NRC COMMISSION (OCM)
References
NUDOCS 8311160160
Download: ML20086A934 (50)

Text

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00CKETED USNRC UNITED STATES OF. AMERICA 13 RN 15 P4:41 NUCLEAR REGULATORY COMMISSION BEFORE THE COMMISSION f[OCP NG& Ei:IICE & EECEFDh-SEP.'

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In the Matter of )

)

DUKE POWER COMPANY, ~~ --et al. ) Docket Nos. 50-413-

) 50-414 (Catawba Nuclear Station, )

Units 1 and 2) )

APPLICANTS' MOTION FOR STAY OF ORDERS ISSUED BY THE ATOMIC SAFETY AND LICENSING BOARD AND THE ATOMIC SAFETY AND LICENSING APPEAL BOARD Pursuant to 10 C.F.R. 2.788, Duke Power Company, et al., (" Applicants") herein request that the Commission issue an order which stays the effectiveness of a ruling made by the Atomic Safety and Licensing Board (" Licensing Board") in this operating license proceeding on November.10, 1983, and T.odified by a ruling of the Atomic Safety and Licensing Appeal Board (" Appeal Board") on November 14, 1983.1 The ruling issued by the Licensing Board is as follows:

Neither counsel nor responsible officials of Duke Power Company.shall instruct future witnesses, other than executive level witnesses, not to-speak, to or cooperate with counsel for the intervenor, 1 This matter is now : properly before the Commission. As shown in the relevant hearing transcript pages (Attach-ment A), the Licensing Board denied both' Applicants' oral "3

request for a stay of the ruling (Tr. 6647), and their request that the ruling l be - referred to the _ Appeal Board rg (Id.). Applicants-subsequently filed with the Appeal

,,g Board a motion 1to stay'the ruling. The_ Appeal 1 Board, O denied Applicants' motion after hearing argument-in-a n conference call._ The Appeal Board _ also modified the '

-$g

'$ ruling in two. respects: .(1) counsel for Applicants ,may instruct its witnesses not to disclose any. communication av between the~ witness and counsel bearing on the licensing 13 0 - proceeding and issues being '. litigated therein; and1(2)

04 Intervenor Palmetto Alliance's 1 counsel ;is to refrain ~ from w a: inquiringLinto,the existence'of such~ communication. A

'mko -transcription of the_ Appeal Board's' order.is-included as J Attachment ' B.-

Palmetto Alliance, from now until the conclusion of this hearing Any such instruction previously given shall be withdrawn. Palmetto may contact these witnesses at reasonable times and places and the witnesses may decide for themselves whether to cooperate with Palmetto. [Tr. 6646].

Applicants submit that since discovery is over and the hearing is ongoing, it is inappropriate for Intervenor to discuss matters with Applicants' employee witnesses. In any event, if contact outside the hearing is sought Applicants submit that access to Applicants' witnesses requires either the presence or the permission of Applicants' counsel.2 To hold otherwisc interferes with the attorney-client privilege (and, in particular, violates the ABA Code of Professional-Responsibility) and prejudices Applicants' ability to prepare and conduct their case. As will be demonstrated below, Applicants satisfy the showing for relief required by 10 C.F.R. $2.788(e).

I. BACKGROUND On November 9, 1983, the Licensing Board denied Palmetto Alliance's request that communications between i Applicants' counsel and Applicants' witnesses during breaks and overnight be prohibited.-(Tr. 6477). In response to the Board's ruling, counsel for Palmetto' Alliance then requested' l- that Palmetto Alliance also be given the-right to contact ,

l t-2 As. indicated during discussion with the Board, Applicants will instruct their witnesses not to talk to counsel for Palmetto Alliance except ' during cross-examination. (Tr.

6483).. This instruction would apply regardless of whether Applicants' counsel is permitted to be-present during the interviews Intervenor. seeks.

J

.I i

Applicants' witnesses, stating:

Then we would move that we have an opportunity under the direction of'this Board during such breaks and recesses .to -- on an equal basis --

consult with and speak with [ Applicants'] wit-

, nesses. We have not spoken with any of these

witnesses except~ under the- limited circumstances that their own testimony discloses, and that has not been'with this party or counsel for this party. We would seek an equal access, if you will, to be able to speak with witnesses off i the -- off the stand, to be able to talk with l ,them during breaks , to be able to speak to them overnight. (Tr. 6478).

Since the Board had previously determined that Inter-

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venor's counsel.could probe on the record the nature of the discussions between Applicants' counsel and their witnesses, I (Tr. 6491),3 it asked Palmetto's counsel to clarify his purpose in seeking this relief. Counsel indicated that.he l sougnit to discover "the nature of the consultation" (Tr.

6491) between Applicants' counsel.and their witnesses,

, stating:

I have general preparation [in mind], but I am asking specifically for the right to confer with

[ Applicants' ] witness [es] during ' breaks' about the-i nature of [their] consultation so that I can have intelligent information,, discovery, if you will, some kind of preparation to get on the witness -

! stand instead of.asking a question blindi what ~

did you have to.say to your lawyer and he to you?

(Tr. 6491-6492) (emphasis added).

Applicants strongly opposed Intervenor's unusual re-

_ quest, emphasizing that it constituted a clear' violation ofl Applicants' attorney-client relationship with their wit-3 This ruling-by theLLicensing-Board:also' infringes._upon

, the attorney-client relationship.between~ Applicants' '

. counsel and Applicants' employee; witnesses..

.ng. y-, . ' ' , w. u -,

4 f

i nesses. Applicants also noted that Palmetto Alliance had ample opportunity to consult with the witnesses in question during both the original discovery period and the extension

, of discovery granted by the Board this past summer, and that it had chosen not to do so. Counsel for the NRC Staff supported Applicants' position. (Tr. 6479-6480).

{-

i The Licensing Board took Intervenor's request under consideration (Tr. 6491-6492). On November 10, after j hearing additional comments from counsel, the Board granted Intervenor's unique request, based largely on the view that i

i the employee witnesses in question were not " clients" whose i

communications to their attorney were protected.

i II. ARGUMENT Traditionally, discretionary interlocutory review in i

NRC proceedings is undertaken only where i the ruling below either (1) threatened the party 1 adversely af fected by it with immediate and

! serious irreparable impact which, as a practical matter, could not be alleviated by a later appe.a1 or (2) affected the basic structure of the pro j ceeding in a pervasive or unusual manner. [Public j Service Company of Indiana, Inc. (Marble Hill-Nuclear Generating Station, Units 1 and 2 ) , .NLAB-405, 51NRC 1190, 1192 (1977).] ,

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! Applicants submit that both of these criteria have been met l here.

t I

r In addition,-in determining whether or not to' grant an A

application:for a stay,-10 C.F.R. $2.788(e)~provides that the commission will consider four factors.- Applicants have addressed each of ~ these factors . below, . clearly demonstrating -

that the relief requested'should be granted.

(1) Likelihood of Applicants' prevailing on the merits Applicants submit that there is a strong likelihood of their prevailing on the merits. The Board's ruling clearly infringes upon the attorney-client privilege which exists between Applicants' counsel and their employee witnesses.4 See Upjohn Co. v. United States, 449 U.S. 383, 389-90 (1981). In its order, the Board adopted the " control group test *5 for determining whether an attorney-client relationship exists between a corporate employee and corporate counsel, stating:

The company is claiming a right to be able to instruct all the Duke Power Company employee witnesses not to discuss the case with counsel for Palmetto during the hearing. Legally the claim 4 The Licensing Board based its ruling in part on the view that the employee witnesses in question are considered the witnesses of both Applicants and Palmetto Alliance, thereby justifying access to them ~ by the Intervenor. (Tr.

6480-85). Palmetto Alliance filed subpoena requests for many of those witnesses, but only after Applicants had designated each of these employees as their own witnesses and had submitted prefiled testimony for them. After it became apparent that the witnesses would be available for cross-examination by Palmetto Alliance, the Board ruled ~

that these subpoenas were not necessary. In any event, the fact that a party has subpoenaed a particular witness does not in itself make that individual a witness for that party. See State v. Tilley, 239 N.C. 245, 79 S.E.2d 473, 477 (1954). Once Applicants have designated their witnesses, submitted prefiled testimony for them, and established an attorney-client relationship with these employees, this relationship cannot be. circumvented by

. requests for subpoenas by the opposing party.

5 The control group test, formulated in Philadelphia v.

Westinghouse Electric Corp., 210 F.Supp. 483 (E.D.Pa.

1962), was rejected first by the-U.S. Court of Appeals in Harper & Row Publishers, Inc. v. Decker, 423 F.2d 487 (7 th Cir. 1970), aff'd er curiam by equally divided Court, 400 U.S. 348 (19 1 , and Diversified Industries, Inc. v. Meredith, 527 F.2d 596, 609 (8th Cir. 1977), and subsequently by the United States Supreme Court in Upjohn Co. v. United States, 449 U.S. 383, 397 (1981).

- rests basically on the attorn[e]y/ client

-privilege. It'is said to be an aspect of that privilege.

The Board accepts that claim as to executive-level employee witnesses . . . . However, we reject the

claim being made by the company with respect to 1 -employees at the site,-and more particularly-4 welding inspectors and welding inspector-supervisors. [Tr. 6644-45] (emphasis added).

i The Upjohn decision noted that the attorney-client 4

privilege exists to protect

, not only the giving of professional advice to those who can act on it but also the giving of

. information to the lawyer to enable him to give sound' and informed advice. [449 U.S. at 3903.-

i i This privilege extends to employees-beyond the " control group":

Middle level -- and indeed lower-level ---

employees can, by actions within the scope of.

their employment, embroil'the corporation.in-serious legal difficulties, and it_is only natural' that-these employees would have the relevant

, information needed by: corporate counsel if he is adequately to advise the client with respect to such actual or potential difficulties.~[449 U.S.

at 3913 i

, Clearly, the employee witnesses in: question are cli'ents,.and an attorney-client' relationship exists between them :and f Applicants' counsel.

Applicants are also prejudiced by this ruling;because it provides free access'for Palmetto Alliance's(counselitof

> the attorney work-product of~ Applicants' counsel. This; .

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work-product includes an attorney's thoughts, impressions, _

F l views'and' trial-strategy. -In.theLpresent case, Palmetto:

I l LA111ance seeks to-obtain.information clearlyLprotected by l-this doctrineLby conferring ;with- Applicants' : employee b . ,

4 witnesses. ,  ;

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" g--4rt) f- -y 9 4 + yg

l Moreover, the Licensing Board's order authorizes counsel for Palmetto Alliance to violate the American Bar

. Association's Disciplinary Rule (DR) 7-104, which provides in pertinent part as follows:

DR 7-104 Communicating With One of Adverse Interest (A) During the course of his representation of a client a lawyer shall not:

, (1) Communicate or cause another to com-municate on the subject of the repre-4 sentation with a party he knows to be represented by a lawyer in that matter unless he has the prior consent of the lawyer representing such other party or is authorized by law to do so.

The Disciplinary Rules are meant to be uniformly applied to all attorneys, regardless of the nature of their practice, and are mandatory in character.6 Counsel for Palmetto Alliance is clearly obliged to comply with the Disciplinary Rules, and any attempt by the Board to legitimize a viola-tion of the Disciplinary Rules is imprope r .

Direct contact by an attorney with a witness known to be represented by counsel, without the permission of that witnesses' attorney, is prejudicial to the administration of justice and has been.the grounds for disciplinary action,~or other reme' dial actions.7 6 In re Meeker, 414 P.2d 862, 864 (N.M. 1966); appeal dismissed, 385 U.S. 449 (1967).

7 See, .e.g., In re Mahoney, 437 N.E.2d 49 (Ind. 1982); In re Russell, 59 N.J. 315, 282 A.2d 42'(1971)(grand jury witnesses); see also NLRB v. .Autotronics, Inc., 596 F.2d

-322 (8th Cir. 1979)(enforcement denied to NLRB stipula-tion obtained directly from employer 'because NLRB attor-ney violated DR 7-104 by not dealing with employer through employer's counsel).

(2) Whether the movant will be irreparably harmed if the stay is not granted Applicants will suffer irreparable injury unless this stay is granted. The testimony of the subject witnesses is crucial to Applicants' case, and its presentation should not be undermined by interference from the Intervenor. During the time that Applicants' motion for a stay is being considered, Palmetto Alliance will be free to approach Applicants' employee witnesses and' seek information from them. While the modifying language supplied by the Appeal i

Board appears to prohibit inquiry into the nature of the

. witnesses' consultation with Applicants' lawyers, as sought by Intervenor_(Tr. 6492), Applicants will not be present to determine whether such inquiry is being pursued. This constitutes a clear denial of the right to, counsel and an infringement of the attorney-client relationship.

Applicants' ability to prepare and present their case will I

also be prejudiced, since only limited time is available _ to confer with witnesses during hearing recesses. Because an appeal-after violation of the attorney-client relationship is an inadequate remedy, a stay of-the' Licensing Board and j

Appeal Board's rulings is necessary to protect the rights of Applicants and their-witnesses. See Harper & Row Publishers, e

Inc. v. Decker,' supra, 423 F.2d at 492.

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i (3) Whether the granting of a stay would harm the other parties The requested stay would not harm the other parties in this proceeding. Palmetto Alliance has known the names and telephone numbers of all of Applicants' Quality Assurance employees since April, 1983, and has had a more than ample opportunity during both an initial and an expanded discovery peri 6d (granted expressly to allow Intervenor to conduct discovery on OA allegations related to welding) to contact these employees, to interview them and take their deposi-tions, and to obtain facts to prepare its case. Palmetto Alliance did not do so.

Since it. neglected to fulfill its discovery obligations while it was clearly proper for it.to do so, Palmetto Alliance may not now (during the sixth week of the hearing) legitimately claim harm if it is not granted another oppor-tunity to glean " intelligent information, discovery, if you will, some kind of preparation" (Tr. 6492) from Applicants' witnesses. This is particularly the case since Intervenor failed to advance any substantive reason for its being granted such an opportunity.

(4) Where the public-interest lies The public interest will clearly be better served tur the issuance of a stay of the Licensing Board's order. Such a stay would (at least temporarily) require that Palmetto

. Alliance conduct its inquiry in this hearing on the record '

by the established means of cross-examination 'of Applicants' i

1 1

employee witnesses. A grant of the relief sought herein would also require counsel for Palmetto Alliance to comport himself according to established ethical standards. This, i

promotes the public interest in preserving the integrity of adjudicatory proceedings and maintaining the ethical standards of the Bar. A failure to issue such a stay would, however, authorize unethical conduct by a member of the Bar in explicit violation of DR 7-104. This harm cannot be adequately remedied on appeal except by stay.

1 i CONCLUSION Based on the foregoing, Applicants request pursuant to 10 C.F.R. $2.788 that the Commission immediately issue an order which stays'the effectiveness of the Licensing Board and the Appeal Board's rulings.

i Respectfully submitted,

, "jj -

j",/l',J: ,l.,jk .. i j ll

• C i s :.

J. Michael McGarry, IIII s / /

Anne W. Cottingham l

DEBEVOISE & LIBERMAN-1200 Seventeenth Street, N.W.

Washington, D.C. 20036 (202) 857-9833 Albert V. Carr, Jr.

Ronald L. Gibson

. DUKE POWER COMPANY P.O. Box 33189

' Charlotte, North Carolina 28242' (704) 373-2570 Attorneys for Duke Power

Company, et:al..

Nov embe r - 15, 1983

-- e - - -

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Wednesday, November 9 ATTACHMENT A ,

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P _R O _C _E _E _D _I _N G _S i

; JUDGE KELLEY

Okay. Good morninc. We are 3 back on the record. Ne.have pendinc a lecal cue s t ic." and 4 a recuest for a ruline from the Board:on the cuestion

! 5 whether counsel should be' allowed to talk to witnesses e durino breaks in testimony or overnight or whether they i

l 7 should be barred from those Conversations. t Mr. Guild and Mr. Mc Garry argued that briefly 8f i 9l ,

in the interim. A case referred to called the Potashnick i

10 l case, 609 Fed. 2nd, Pace 1101, Fifth Circuit Decision, l ,

it  ! 1980, which the Board thinks has some bearing on the j

'2 cuestion.

3 I think all three of us had a chance to read it.

'a Mr. Guild, any comments on that case as far as ' -

25 l a bearina on 'tbis situation?

3

$l MR. GUILD: Yes, sir. First, Mr.-Chairman,

{

a 4 a 17 the Potashnick versus Port City Construction Company case

'e does not_ stand for tPo uroposition advanced by Apolicants i

j i to nor does-it-supoort the. relief that they have asked for by 1

[ .

} 20 way of a free hand,-if-you will, to confer and counsel _a i

i 2 21 ,

- witness in the course of the-witness's; cross-examination  :

r r g, 22 under the circunstances of this case.

a 3 23 Potashnick cives some cuidance on- its-

?4 tnterer.:at' ion of tho' Getters c1se.

. 3 .I note at' Pace 1119 l .

25 - of the Fedcca l 2nd Reports on Potashniek the- court there r

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6472 i

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1. says the court in Getters soecifically limited its i

decision to the particular circurstances before it. That's

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2 3 the Supreme Court in Getters.

4 An order preventina attorney-client consultation 5 about anythino durinc a seventeen-hour overnicht recess --

e aoplyino the Getters principle which was in a criminal 7 context then -- to the Potashnick civil context, the court a found as follows. That -- where a corporation -- in this  !

9 case, Port City Constructicn Company --- president and sole to shareholder, a Mr. B. G. Ouinley, was undercoinc cross-11 examination, that his richt to consult with_his attorney in s -i I

12 the context of that case, since'he was in fact actino for t

d the corporation and the sole shareholder.of the corporation, u that the defendant corocration's-richts to counsel would l 15 i be in f rinced , 'a due process richt, not a Sixth Amendment' i 2 l .,

{* 16 richt if, in the context of..that' case,_the trial court's' l 2

$ ,- 17 order barring consultation for an extent - .ovec>an. H j 0

'a extended ce riod of ' time' were .:uhe ld, and I just want to 1 4 I to, cuote.

i i

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20 i We reccanize that the Port-CityLConstruction ..

21' . Company is the named defendant in_.this case. .However, ,

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'22 ' we. find-that beina Ouinley's position as presidentLand sole 1

] 8 23 sharebolder recuired him itoMact forL the- corporation tr 24 the atterner-cli..nt relationsbio so as to afferd1him e!'ient f 25 j status,.and then they oo forward and hold that in the ,

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i l . circumstances of this case where counsel bad been enjoined i

2 from talkinc to that said sole shareholder and the president J

3 for a reriod of sever davs includinc several overnicht 4 recesses, : Pat the corporation's richt under due process --

5 under the due process clause to assistance of counse'.

t was infrinned.

I t 7ls Judce, by no stretch of the imacination can we a extend that princiole, the principle of the president and l i

i ! sole shareholder of a corporation, actinc for the to ! corporation in the exercise of the.richt to counsel, to i

i 11I 3 counsel for Duke Power Company's urcing that they be civen ,

12 a free hand over luncheon recesses or ten-minute breaks to 13 ! consult with hourly naid-weldinc inspectors whose

'4 testireny in cart is adverse to the corporation and that

. .~ 15 who certainly cannot be irt any stretch of the imacination

-- cannot be seen as sole shareholders .or president of the f 16l  ;

$ 17 company, C

f I 'B l'nder no circumstaneos can the no tashnick. case i

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! be advance.4- as _ controlline or even a cowerf ul analcous.

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j 20 ! supoort for'the principles advanced bv~ counsel-for the

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2 21 Aoplicants.

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i g 22 1 Pirst, the cases ..in the: Fif th . Circu~iti don 't I .

23 control the decision of'the.MP.C, but evenfif this-were.

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14 scuarel/ :nnerallina.authorit. or 'atharity of a controllinc~

25 J ur isdict ion; it has yirtually no bearina on the-i i

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-.ab; 6474 i

i l circunstances we find ourselves in, so we renew and 2 >I reassert the notion we made to instruct counsel for the 3 Applicants not to consult with weldina inscectors or 4 weldina inspector supervisors durino breaks in their i i

5 cross-examination, and this is the only authority that I'm ,

e- aware of that even deals in a civil context.

I 7 It has nothino to do with the circumstances' f 8 we face here. I can hand the case back up if you would i

9 like. }

}

10 l JUDCE KELLEY: I have read it. Thank you.

f +

1  !

11 Mr. McGarry?  !

]

12 MR. MC GARFY : I think:the Board is aware of 13 our cosition. I just'want to put the matter in proper 4

i 14 i context. Mr. Guild commenced his arcument by statina that 15 i

Potashnick case does not stand for.the proposition -- for -f

, i 4 4 16- the relief that we are seekina, i

'7 **

" WW"are not seekina relief. We.think we have an 4

'E absolute richt. We do not nake t"o'metton.

} Palmetto-3 e ..

i - made the motion. Palmetto did not cite the' authority. '

i j 20 We cited the authority. '

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3- 23 .

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6475 15-C-1 i

! Point Number 2. Potashnick is not to be narrowly 2 construed. We think that Potashnick is extremely relevant 3 to the Board's deliberations. I can represent to the Cour:

4 in my Shephardization of the Potashnick there were numerous 5' cases which relied upon Potashnick. Potashnick-is not the only case of a civil nature. I have two cases in front of 7 me at this moment.

8' JUDGE KELLEY: I would just as soon go on.

9  ! MR. MC GARRY: I don't think they are necessary.

10; I think the proposition applies both to criminal and civil.

i 11 : JUDGE KELLEY: I think we need to get it resolved.

12 If you need to go back to the library --

13 ' MR. MC GARRY: I think verbally is better.

I 14 Ju'DGE KELLEY: Okay.

15 '

• MR. MC GARRY: In-summary, we are talking about a 16 fundamental basic right of the Applicant to consult with its i

• 17 witnesses, to assist its witnesses in assuring that a full. .,

c

] '8 and complete record is developed in this proceeding. It is i

{ l' , more applicable when.we are talking about the representation 3

j 20 ; of our clients, which is precisely the issue before the 21 Board, and I might note that this ruling, we think', is r

g 22 extremely-important. We are discussing a basic fundamental f 23 i right in this hearing.

I

- 1 24 l JUDGE KELLEY: Very well. Well, qentlemen, we.

25 have heard your arguments and read the case .in ciuesticn',

6476

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which appears to be a rather unusual case. I know it's i

2l unique, but apparently is not a lot of authority on this 3 cuestion. It's in our view a well-researched, apparently 4 well-researched and well-reasoned opinion. Cited no 5 authority to the contrary, it does stand for the 3 proposition that clients have a Fifth Amendment right to t'

7 consult with their counsel in the course of litigation.

8 We don't read it as limited to unusual facts particularly.  !

9 Stress is on the right to communication versus the danger-10 of coaching and the right to communication wins that it balance in that case. I suppose that one might seek to P 12 distinguish or refine the analysis by saying that it's  !

ia a bit a stretch of the Potashnick -- the case cited -- you 1

14 know what I mean -- to stretch that case'to all the '

e 15 witnesses here who have somewhat different characterization e, te seems pertinent. Mr. Owen is sort of'the alter ego of the  ;

$ 17 corporation in an altruistic sense', but theLDuke Powery. _

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, 29 Company has a right to counsel, and part'of'that right is a i

, io - right to talk to witnesses, including someone who may be.

t

$ 20 hostile.

i  :- .

j 21  ! It's a wayfof' effectively presenting the case,- i r

, 22 ' so it seems to us'that.there is-a clear. striking of th'e 3.

23 { balance in favor of communcation. 'It's pointed'out there'is .

24 .' in the earlier crininal case cited.

25' rhere are other ways to come at that.. -Co un sc l -

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e, 64 "

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are entitled, of course, in their cross to inquire into 2 whether there has been consultation, what the nature of the 3 consultation was, what is the nature and extent of that 4 consultation. That avenue is available.

5 It's true -- whether it's true or not, we are not 6, bound by the Fif th Ci rcuit. On the other hand, it's a 7 persuasive analysis by an influential federal Court. We 1

8 are certainly bound by the United States Constitution.  ! l C

Everything I have seen suggested that it would H)  ! be a serious constitutional question if we barred I

11 i communication of this sort, so we are going to rule in favor ,

12 ;i of communication and against the request that communication 13 not take place. We may very well be advised to do that as 14 a matter of constitutional right.

, 15l There is the matter of prudence and' discretion .

j to , and we would do that anyway, so that is our ruling. I i

A 17 MR. GUILD: I would like to have clear that that i

[. '8' ruling is based on_all the facts and ci rcunstances _ in the i

19 record of this case, including'the continued efforts by this i i j 20 party to demonstrate that there;will be retaliation and

t l 21 ! harassment of witnesses. There has been pressure on named I i

.g 22 witnesses of the class of welding inspectors:and welding

23- inspector supervisors by. management ' of Applicants.

i.

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24 JUDGC KELLEY:

The. ruling is to be read in .the - ,

25 full context of theLcase. That's correct.

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. 64Ti

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MR. GUILDI Then we would nove that we have an

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2 opportunity under the direction of this Board during such 3

breaks and recesses to -- on an ecual basis -- consult with a and speak with witnesses. We have not spoken with any of 5 these witnesses except under the' limited circumstances that-e their own testimony discloses, and that has not been with 7 this party or counsel for this party. We would seek an a equal access, if you will, to be able to speak with 9 witness'es off the -- off the stand, to be able to talk with to i them during breaks, to be able to speak to them' overnight.

11 So far we have been restrained from doing that 12 by Applicants. ,

13 JUDGE KELhbY: Well,-I~didntt know what all the

'a history has been. That has all-taken place off the' record.

a 15 i

Any comment on-that, Mr. Mc Garry?'

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e 6479 (C-C-1 1

MR. MC GARRY: Your Honor, we think that position 2i borders on frivolous. We are talking about trial strategy.

3 We are talking about the representation of a client. There d

is an attorney-client relationship between Mr. Cauthen and 5 counsel at this table. Mr. Guild had his opportunity to

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o discuss matters with Mr. Cauthen during discovery. We are i

7 now in the trial phase. Mr. Guild is not entitled to talk 8 l to Mr. Cauthen at the breaks. He is entitled to talk to '

Mr..Cauthen on the record before this Board.

10 (Pause.)

11 JUDGE KELLEY: How about the fact that Mr. Cauthen i

12 and others are Palmetto witnesses as well as yours! '

'3' (Pause.)

'd -

MR. MC GARRY: These witnesses are subpoenaed 15 witnesses. We have called Mr. Cauthen as.our witness.

7..

i 3

16

e. Mr. Guild sought information from Mr.- Cauthen. He had an  :

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• 17 opportunity <to discuss with Mr. Cauthen. He chose not to I

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};

a 1B l exere'ise that opportunity.  !!c has not spoken-to Mr. Cauthen,

[ l' to the best-of my knowledge, until this proceeding, t

j 20 JUDGC KELLEY: Mr. Johnson, any reaction'to the 21 pending motion? Do you think -- well, you know what ~ it is.

{= ,

i<

g , 22 [ 'A'n'y . reaction? Any suggestions to the Board? ,

x .

.j MR. JOilNSON: Well, it'seems to ne'Mr. Mc Garry .

!' 2 3 'l -

L Ilj and Duke Power Comnany do have a' right to' consult with.

n 25 their client as;you have ruled. That right doesn't apply 3

s ,

' . ;t i ji '

6480

\

t l 1* obviously to Palmetto Alliance.

2 JUDGE KELLEY: The attorney-client right doesn't 3 apply?

4 MR. JO!!NSON: Right. The attorney-client 5 relationship dcesn't apply.

o' JUDGE KELLY: Right. True. Okay. What about 7

the fact that most of the witnesses are the witnesses of 8 both parties? I 9

MR. JOHNSON: I'm not clear on that. I don't 10 believe there were very many witnesses that were -- if any, 11 that were produced pursuant to the subpoena. i 12 JUDGE KELLEY: Well, we went through that. Here i

13 i

is my recollection. Palmetto submitted a list of people,

'd and the understanding was they wanted those people to.ccme is as their witnesses by subpoena, if necessary; and I didn't l 16 think the subpoena was necessary on anybody, but it isn't i

8

. . . 17.. any different analytically than' if they had been subpoenaed, I-o

[.' 13 it seems to me.

i l 10 , MR. JOilNSON: Well, if they ucre just --

just i i j 20 l assuming that they were called as-subpoenaed witnesses, it

{- 21 seems to me that they -- notwithstanding.the-fact that they i  ;

22 l .were called by an adverse- party, they would have a right

to 23 l counsel.

~

l Other than the ---other than calling them as.

I

~ i 24 lwitc.e;ses. The riqht. -to counsel and the right'to consult 25' 'under the Potashnick case rule would. apply to that;persor.'s J

---r- 6W GM9

._. . _. _ _= . . _ . ..__

6481 i

1 i

counsel. Not to the relationship between the party that 2i called them as witnesses under subpoena. We don't think 3

that relationship exists between those parties.

4 4

JUDGE KELLEY: Let me give you two propositions.

5 We are off on a coffee break for 10 or 15 minutes, and i e, Mr. Cauthen or Mr. Rockholt or anybody else -- they are out ,

7 1

in the hall and Mr. Guild wants to talk to them for a few '

e, j minutes in access to a witness. Is he barred? Should

/

9 access be barred?

10 (Pause.) .

l 11 MR. JOHNSON:

=

I can't think of.any basis for 12 barring such contact, but I also can't -- '

i 13{

JUDGE KELLY: Let's think on that for a minute.

u, A step at a time. .i-The witness is in.the hall and Mr. Guild

• 15 wants to come up to talk to him.

It's okay with the. .,

to witness. Is that all right? Should Mr.:Mc!Garry instruct'

[

8 e

C 1.7 the witnesses not to talk:.to.Mr. Guild? 25-< --

} '8 MR.' JOHNSON:

.t I think he can, clearly.

- 1.

l 10 JUDGE.KELLEY: You think he can?

i. .i g 20 MR. JOHNSON: . Surely.  !.

e l

l 21.1 JUDGE. KELLY: Okay. That'is.my question.

-i ,

.t .

22. MR. JOHNSON:- But I-think aisc -

. g .I don't think +.

; 23 there is any prohibition in general.against the witness'

. ~I  :

24 L: talking ~to anybody he wants, buttI- think it is appropriate 25 i for:Mr.'Mc Garry and his client to consult about this j;

~

.g

i

-l 6482 l 1

U 1

matter. If they elect that --

that it's inacpropriate to 2

talk to opposing party, then I think that they have a 3 right not to talk as well. I think -- if you go 'cack ::

4 your ruling in April on the question of access, it seemed

5 to me that you then ruled on a similar basis that they had 6, an absolute right to discuss the case with their employees ,

7 and to advise them of their rights, and it seems to me 8

that this is within -- this is an analogous situation.

9 JUDGE KELLY: I keep coming back to Mr. Guild's 10 access. Whether he should have a right. Maybe he should.

11 Maybe you are arguing that he should. If Duke Power 12 Company says no,. don't talk to Palmetto, you are sayinq 13! that is to be the end of that.

I Right?

14 MR. JOHNSON: Back in April we were talking is l really about discovery.

t 16

{ JUDGE KELLY: Yeah.

8 a

. . -. 17 MR. JOHNSONt- And assuming that the access to o

4

}3 18 information of these witnesses was'through discovery, then I IC <

it seems a little bit inconsistent to direct -- and it was r* i j

t 20 ! limited to ;a certain period of time'_ on certain bases --

t

[o 21 l certain types of access wereLprovided and~not othe'rs. It's i 1 g 22 a-little bit inconsistentLto now.at. trial to give some kin'd

! 23 of-broader range to~ counsel-for Palmetto, Alliance. -

~8 24 l JUDGE KELLEY: You are arguing -- I anfassuning 1

2$

~for the; moment-_-- maybe I-shouldn't -- 'that Mr. Mc Carry --

l

6483 6

i.

, Mr. McGarry, let me ask you. I don't knew 2

whether it's been, but would it be -- here we are halfway 3

through. Is it your position that if you don't uant the d

witnesses you are going to be calling with the exception, 5

I assume, of Mr. Hoopingarner and McAfee to talk to Palmetto at breaks?

i 7

, MR. MC GARRY: That is correct. '

8 l JUDGE KELLEY: That is your position. i 9k i

MR. MC GARRY: We will instruct our witnesses. I

'O JUDGE KELLEY: Not to talk?

I' MR. MC GARRY: Not to talk. ,

i 12 JUDGE KELLEY: Okay. So'that is clear. Do you

'3 agree with that, Mr. Johnson?

MR. JOHNSON: I think they have the right to tell 15 them not to talk to opposing counsel. That would interfere I I*

h with the preparation of their case. i 47 JUDGE KELLEY: Well, what about the preparation l

~

- 'B ' of Palmetto's case?

i They are cutting a case on through a I'

[ i subpoenaed witness. Every witness but'two is subpoenaed, i i

{ 20 l and they are in a hearing too. Why can't they go out in the  :

5 21 I

[= hall'and say -- I don't know what they want to talk'about --

g 22 ! whatever they want to talk about?'

E

- 23 '

I MR. JOHNSON: As I say, I don't see any reason: '

24

! why they couldn't.

' 25 JUDGE KELLEY:. Well, let's be. realistic.

I i _ _

6484 4

i Mr. Mc Garry said he doesn't want them to do it, and I am 7 willing to assume that if he instructs them not to talk to 3 Palmetto, that they are not going to d'o'that. Let's take 4 that as a given. Is that a problem or not?

i .

l 5i (Pause.)

o MR. JOHNSON: Again, I think that Mr. Cauthen b

7 and the other. Applicants' witnesses are in fact Applicants' e witnesses, and that the primary right of counsel exists -- j I '

the right to counsel and the right to consult exists as 30 between them and if that's the way they determine they want il i to prepare their case, unless there is some countervailing i

12i, reason, right, that you could identify on the part of  !

l 13 .i Mr. Guild of Palmetto Alliance, and which is analogous to 14 the right to discovery, which is closed now, it seems to 1

l-15 me there is no countervailing reason to afford Mr. Guild

. 16 i the same type of right, which is sort of what you would be i $. .

$ 17 doing. You would be giving him the right of a counse1~

q e

} ~

i !8 JUDGE KCLLEY: You're saying that -- well, I i

"O guess I know what you are sayina. I don't feel you have

+

4 20 really addressed the point I'm trying 133 get at,.and'that'

, h

! 21 is there are two cases being put on, and yours will_be r

g 22 three, but-the witnesses we'are talking about are the

!. 23 ' witnesses of the two parties, not one. Does_a lawyer at-~a 2a ' hearing havefany.right'to confer.;1th somebody.that he'is I 25 ' calling as a subpoenacd witness?

f I b

4 9

6485 I

I i, MR. MC GARRY: Your Honor, can I chime in here?

1 2 JUDGE KELLEY: Just a minute. Just a minute.

3 I just want to finish with Mr. Johnson.

4 MR. JOHNSON: You are asking me these cuestions.

5 I am not aware of-the precedents. There is probably case e law on this, and I am not aware of them.  ;

7 JUDGE KELLEY: Mr. Mc Garry, we will get back 8 to you. l i

o! MR. MC GARRY: Your Honor, I think the 10 i

fundamental principle that hos been lost in the diaglogue 11 between Board and Staff and that is we are not talking i

12 about witnesses. We are talking about parties, and that's 13 i

a fundamental distinction in federal practice -- in any i

ia judicial proceeding. A witness is fair game for anybcdy is ; to subpoena within ethical' standards. A party and a client

) je is represented by one set of attorneys.

4

$ 17 In this instance the Applicants represent the  !

is ' Applicants' clients. Mr. Cauthen is nact of the carty, and 1

io i, the canon of ethics, as welloas~the procedures, clearly r

20 l enunciate the rights that are_ associated with that l 2i_ relationship,;and under that relationship Mr. Guild-i:s not ,

f  !

, 22 ] entitled to talk ' to a party absent presence of counsel.

i 5

3 a

23 Mr. Guild is entitled tcr talk to a witness who is a 'nenparty.

4

,4 l JUDGE KELLEY: Yeah. But ydu a rei saying a ! ' , the-i

- 25 i l witnesses are identified with the party, and all the:

i

. . . ~ -

6436 h

witnesses suddenly disappear with that analysis.

i

' Right?

i 2! MR. MC GARRY: They are the party.

3 JUDGE KELLEY: Right. So there aren't any 4 witnesses. They are all the party.

5 MR. MC GARRY: Correct. And Mr. Guild cannot 3 circumvent that basic principle by seeking a subpoena.

7 The subpoena does not become the holy water that cures the s situation. The fundamental relationship remains. i

Attorney-client. And this is clearly recognized in the 10 I case law.

MR. GUILD:

1 11 Mr. Chairman --

12 MR. MC GARRY: And even if it's a subpoenaed 1

3 witness, as long as that subpoenaed witness is a client for-u one of the parties, then Mr. Guild cannot talk to.that 15 party witness unless in the presence of counsel. . -

2 ie - Now, let me tell you' another thing that. is

$ 17 disturbing,and the Board may not appreciate that 0 .

j is ' observation , but we feel . duty-bound to make it. This is

a not the fi rst instance where a- point has ~ been raised ' by; r l 2

20 ' Palmetto Alliance with absolutely.no legal citation.--We j n ' just confronted"that situation in thel last several days,

~

r- i 22 i .and ~the Board has made its ruling. LFortunately,fwe had ~

l' some ci.tations to-cite to the Board,because-we anticipated 23 c . -

3  ;

24 ; this. coming up. We don't have. citations to report-to:the 2.5 Board.---and I'think absent citations,.weishouldn't e- ame '-

.u - ~ . a,e

6487 1

belabor the point.

2 MR. GUILD: Mr. Chairman, may I be heard?

3 JUDGE KELLEY: The citations you don't even cite 4 with this problem --

5 MR. MC GARRY: But we shouldn't be put on equal

+

footing with that regard. If a party is making a motion --

i I

77 JUDGE KELLEY: Making an observation. All right.

8 Mr. Guild? i 9i MR. GUILD: Mr. Chairman, I argued Geders and i

10 l may not have recalled the name of the case when I first rose 11 -

and made the point, but I have read that case and I read  :

17 i

the Potashnick case, and it stands for the proposition that 13 , I argued. This party distinction is very, very misplaced, 14 -

Mr. Chairman. Let's look at it this way. Under the is j subpoena rule, there is a -- I did a piece of research on i I

j lo this point. The question of who.gets treated as a party for b

0 17 purposes of the subpoena rule, and the question really has l 18-to do with who you are entitled to compel attendance fron 5

e

-10 i

and who you are required to pay a price.for their d

3 20 attendance, if you will.

e i e t g"

i 21 The clear authority is that when you are-talking. i g 72 : .about a corporate party, the party status extends to a very t a j 23 limited level of . hierarchy of persons who are seen as l 5 2d acting for the corporate party, and the authority speaksJin;

~

l ,

25 ' terms of. persons, nanaging agents'of the corporation, people

f i

l 6485 i who act and are entitled to act for the corporation as 2 being afforded party status. That -- that line of authority 3 applies directly in the situation we are talking about here.

4 Now, Mr. Cauthen may independently as an 5 individual who happens to be a Duke Power Company employee i

have established an attorney-client relationrhip with ,

7i B Mr. Mc Garry, but that has nothing to do with his status as 8l;t assertedly a party. Mr. Cauthen is not a party nor are any o;

of the welding inspectors parties. They do not act for to Duke Pcwer Company. They are employees of Duke Power 11 -

Company, but under no stretch of the imagination can they 12 be seen as managing agents in the way that Mr. Owen is who

3 is the senior official who has been presented to testify,

4 Sow, in that kind of context'-- particularly l

i t

15 under the facts and circumstances of this case, people'who '

l j to t are'under the direction of' Applicants' management, and I

! 17 submit'that alF the welding inspectors are appearing here I o

t

'e because.: hey work for Duke Power Vompany, because they are l

(

l ic instructea to appear.as a decision of Duke Power's management, E

20 i

not as managing agents of the company. -They are~not the

+

-j 21 parties. They.are. simply witnesses like any other witnesses.

) i~ .

22 Witnesses who I submitr are more likely to be coached.and i

i l .23  :

influence.'-sinply because.they appear atfthe direction'of 2a managerent. They are not nanagine agentsithemselves. They l 25 are not exercising free choice being here.

). fols.

l -. -.

6489 4

ldbl  !

i MR. MC GARRY: We move that that comment be 2

stricken.

3 MR. Ct!ILD: Siy comment, Mr. Chairman -- my point is that the real -- the real absurdity of the 5' Applicant's position is manifest when they assert that the 6

welding inspectors appear in the status of parties here.

f 7

They are not under the clear line of authorities 8

that distinguish, for example, managina agents who are 9 i parties fron employees who are not entitled.to that status.

10 We assert that is exactly the basis why Potashnick is ,

11 inapplicable.

12 Mr. Cauthen is not the president or sole 13 stockholder here.

14 l JUDGE KELLEY: We been through that, and this i

15 Here is whatLwe want to do, *

- is a somewhat different coint.

a j I6 gentlemen. First place, fir. Guild, I want to'be clear on l-8 1

• 17"

,- *~ ~

your proposition. You sooke, I. believe, cirr your motion- I is i

of caual access to che witnesses.

' ~

Now,.I --

if we.crant any relief along this_line, 20 f - it has to be practical. We can't be out there in the 21 j hall giving ecual time. Are you really saying that you.  :

5 22 l want to be.able to ac..oroach the witnessos in'the' break and.-

23 I af ter Perhaos overniabt, if you want to do..that, and'just-ld

~a

. be able to talk to.then about this?'

t I

"u .

l What if you walk uo-to the-witness.and thel

4 I

6430 IL'1cb2 r

I witness says, "I don't want to talk to you"? Is that the 2 end of that? You just want the richt to ask or what?

3 MR. GUILD: New that we have seen that they are 4

4 l on the record and we have clearly reflected that all cf 5

5 these witnesses are under instructions not to talk to me-1 6 or to Palmetto Alliance, so we have to recocnize that I

7 reality; and, therefore, it's not simply a cuestion of 8 saying Mr. Guild, you are free to try to do what-is  !

9 ! clearly the inpossible, and that is talk to a witness who  !

10 , has been instructed by Mr. McGarry not to speak to me.

I 11 What I am askinc for is a direction-by this  !

12 Board in licht of your ruline allowine unrestricted,  !

23 ! unlimited, unfettered consultation, conferral by Mr. McGarry.

ld JUDGE KELLEY: There was no such ruline. There a

15

. are restrictions on.coachinc, and we know that. We-denied

, j 16 that mot' ion.

8 i

• 17 GUILD: ]

. MR And I respectfully recuest, since.

}3 18 if,the ruling is not sinc h an open- .nded huthority for j 19 counsel of Applicants to do anythino :they want to doiwith i

j 20 these witnesses, I would like.an_exclicit ruline that they

=

21 I will not discuss the substance o'f the testimony,,they wi11

~

lg -

2 I g 22 not coach these~ witnesses.

s. -

.j 23 JUDGE KELLEY: Denicd. He have1had a motion.

.2d h'e d e n ie d . i t' . Now wc . moved on to en rot her mot ion .

25 l Mr. Guild, you-cot mot wns f lyinc ,t 11 over it'hc . room'.

! _ ...._.2. ._c I _ _a 1

6491 idb3 i

1 MR. GUILD: Richt, Mr. Chairman.

2' JUDCE KELLEY: The motion before the House is 3 your access to these witnesses at breaks and overnicht, 4 and we will take that under consideration, but that is the 5 only motion before us, and it is the only motion we are going to accept richt now.

7 MR. GUILD: Here is the proposition then, e 'Mr. Chairman. Having denied my motions to get any relief .l l 3

• with respect to the issue of coachina witnesses, I ask that  !

W I be permitted under exolicit instructions to Acplicants it to confer with each witness during a break. All richt.

12 So that I can orepare myself to resume cross-examination  !

'3 on the basis of some informed knowledce of the nature of -

!4 the consultation that has taken place between that witness

, is, and counsel for the adverse party. That is my

i it propo sit ion .

f

' 17 JUDGE KELLEY: I thought your purpose was to C

'a discuss -- I didn't knew what -- we have.already-bcen over

}

5 "

the fact that you can probe what took place with opposing a

} 20 , counsel after a break. We have already' determined th'at.

I i z

g y

21 .

.You can do that on the record.  ;

g 22 I thoucht you had certain~ other thinas > in mind

'3 when you s' aid v.ou wanted to talk to them.

24 '1R . GUILD: I do. I have concra1.cre o~itlon,-

1 25 but 'I am askina - specif ically- for the right to confee with

+w

l t

,a

... 4 6492 1 the witness durine the break abcut the nature of his 2

consultation so that I can have intellicent information, 3 discovery, if iou till, scme kind of creparation to cet e .-

4 the witness stand instead of askinc a cuestion blind, 5 What did you have to say to your lawyer and he to you?

0 JUDGE KELLEY: We will consider your motion.

7 I think that it's an issue. It doesn't have an obvious 8 answer. At least not in my mind. I would like to have i 9 some citation of authority to some federal procedure book i

10 l or case or something that will indicate to us what other i

11 judges have thoucht of this problem.

12 It seems to me obviously we are tied un here i 13 , this morninc. Ne have schedules to meet. I would just i

14 sav to vot iat ce want some citation. Not any more than 15 that. Doesn't have to be a memo but at least a citation 5  :

i, it I that we can check on our shelf back here, federal cases i I

' 17 hopef ully. by. tomorrow sometime. . . j

'. 'S MP. GUILD: I will ennsult with my local 5

10 staff and see if they can do some research on the cuestion

{ l a i j 20 ' while we are conductino the rest of this hearing, e

! 21 JUDGE KELLEY: Finc.

I g 22 l :1R . GUILD: You know, you nut me in an absciutely I

23 untenable cosition. It sounds nice f rom Mr. McGarry to i .

1 1 24 l talk of lack o# authoritv. They have lecions of lawyors 25 ' that can run out and find cases, and 1 am here cross-

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

F u

6493

'1db5 examininc witnesses.

i 2

JUDGE KELLEY: I think you and I should i

3 i terminate this discussion. We want some authority from

-' you in support of your proposition.

5 j MR. GUILD: I will cite you.the Fifth Amendment

! at this point. Due process riohts to this' party, same ,

7

)

due process that Mr. McGarry cherishes.

8f JUDGE KELLEY: I want a case' decided-by a federal court preferably. At least some court.

10 MR. GUILD: I would appreciate access to you*.

4

. library and some time to do it.  :

l 12 l 1 JUDGE KELLEY: Just'as you-have always had.

2

~

It's richt back there, f We'are-now coinc to move back to the cross-1 15 i examination of Mr. Cauthen.

I 5 i ~j Good mornino, Mr. Cauthen.

8

• 37 MR. CAUTHEN: Good mornina. -

' 94

~

n

-JUDGE KELLEY: Mr. Guil ! will resume his cross-

! f . examination at this coint.

L  ;

4 j 20

-MR. GUILD: 'Mr. Chairman, is it clear now that -

~

1

- 21 i durina the subseauent ~ breaks.that counsel'is-freeitojconferj -

22 g: with -tbe. witness? -I s' tba t i the - status ? -

4

r. ,3- . . .

t- -'

JUDGE KELLEY: Which counsc1; are you - referrina 5-

"3 '

to?

'S 4 MR. GUILD: ~Nell, obviously:you'havefdenied::my 1

9

~l idb6 6494 i

1 motion, so that Mr. McGarry and the other Duke counsel are 2j and should be presumed to be conferrinc with the witnesses.

3 JUDGE KELLEY: I think that is fair. Yes.

4 Thank you, Mr. Chairman.

MR. GUILD:

5' Whereupon, o BOYCE CAUTHEN t,

7 was called as a witness, and, beine previously sworn, i 8 resumed the stand, was examined and testified as follows: l 1

• CROSS-EXAMINATION 10 BY MR. GUILD:

11 0 Good mornina, Mr. Cauthen. . Turn back to your .

12 I testimony. If you would, turn to your prefiled testimony.

l

'3 ' at Pace 7, please.

i

'd i When you took the stand vesterday, Mr. McGarry

?

is '

, ' asked you did you have corrections with respect to your o

16 testimony, and I think you did.with respect to the -'

. e,

! --- - 17- testimony here, and the question. oriainally asked tos you- -l t3 in the t re f iled te s tinonv o f - Ser. te:-b r 2 3 rd is ,. Did-yo'ur

}

a

{  ; concerns reflect a belief on your part that the Catawba I

} 20 l project is not beina constructed safely, and.your answer- -,

= -

z p 21 on'the 23rd of Sectember that you sicned.was, An swe r..

g ,

22{I don't kow if-the plant is constructed safely. Yesterday 5

i!

23 you corr :ted that a n swe r , ; d idn ' t " : u ?.

~'

24 A Yes, s i r , - I ' d i d ~.

25 . .

I E

r

f 1 Thursday , "ove::cer 10 C;91

! l 1,

3 I left it with Mr. Guild at the moment if he would come e i

l 2

forward with some legal citation. I can appreciate that }

3 while he might not have been able to do that since we last 4

spoke, we the Board have given it some thought and we would ,

5 i prefer to go ahead and make a ruling rather than it be moot 6 ! by the passage of time.  !

l 7 Any objection to that, Mr. Guild? Have you got 8 f any other further presentation you want to make?

9 MR. GUILD: Just briefly, Mr. Chairman, if I may.

10  ;

JUDGE KELLEY: All right. Why don't you go ahead.

Then we would contemplate a ruling. Mr. McGarry, if he has 11 l i

12 l a 'crie f comment can make one. We will consider.it and move 13 On-4

'l 14 Go ahead.

MR. GUILD. To recap, we had objected to_ applicants' 15

)l, 16 l counsel conferring with and counseling with witnesses'in

't 17 the process of cross-cxamination. 'The Chatr overruled I,

18 h our co p.ction and le f t! them f ree 'to . speak with -the welding i d  :

II Inspectors. We asked fer an opportunity.to' speak with the. I 19 m) welding inspectors also during. breaks in the-proceeding.and 21 I think. counsel for applicants' position was(that he was 22 inst ruct i:'g his witnesses . not to. speak with us.

23 -I spent five. minutes with C.J.S. while we.wcre 24 waiting forlone of-our in camera witnesses to concfback trom

,2 a break and'I.have.to say.that on the basis of(that;cxhaustive

___________.1_________---__________ 2________ _ _ _ _ _ _ _ - - _ _ _ _ _ - - _ _ _ - - - - a

:32 i

l 1 research I was unable to find any authority on the4 point.  ;

2 It is a pretty narrow point, Judge. There may be something ,

l 3 j out there, but five minutes access to Judge Himpel's .aw I

4 library didn't help me find it.

5 I guess I would only say that our. belief is that i t

6 to the extent that has a matter of constitutional due process 7

applicants' access to witnesses is founded in the ci111 8 context on the due process clause. We think particularly 9 in the facts and circumstances of this proceeding where

, 10 welding inspectors are witnesses who may be' sponsored by 11 applicants, but they are also sponsored by us underfsubpoena, 12 they are also witnesses who a're somewhat adverse to applicants 13 ; in some respect, that as a matter of due process in this i

14 federal proceeding Palmetto's rignts as. well necessitate l

15 i some access to key witnesses who are having access to applican,s' 16 management and counsel.

17 We think that to the extent that Getters, the U.S.

' 18 - ! Supreme Court decision in U. S. versus Getters supportsi l

19 ! .that proposition in the criminal context and that: Potashionate

1. case extends-the Fifty l Amendment.and due process analysis' 21 to the civil context, that-that same authority supports 22 our. access as wel'l. Thatois all:I can really add-a: I th,i s U- point,' Judge.

24 I. agree with you thatLthermatte": needs-tonbe-25  : ruled on or-'it.will be.fmoot, and :I don.' t 'really;want to igo:

4

- _ _ _ _ _ _ _ _ ____________m______________m_.___._, .__m_ _ . . . , _ _ _ _ _ _ _ _ . . _ _ _ _ . ,___.__.___,,__.____.__________t____J

i 1 6592 1

I

off and spend hours looking further.

I i

~'DGE r:ELLEi: Any further comment, Mr. McGarry.

2 j

.  : . . son vull speak to Cnat.

3 .'

l MR. CIBSON: Judge Kelley, we did look into the e

ll

,.. il, c.uestion of whether o.c.ecsing counsel can confer during i t

6 trail with witnesses represented by counsel presumably 7  ; cutside of the presence of that witness' counsel. i l

I '.

gq We have been unable to find any cases which allow g this kind of contact and this includes using the electronic 10 legal research means, Westlaw. We found no cases.

11 Cases which deal with the subject area fall under 12 the disciplinary rule 7-104 which privides in substance  ;

i 13 that during the course of representing someone an attorney j i

. i 14 cannot contact ancther person represented by counsel c.- the t

15 j sub]ect of the ratters that are involved without the consent l I

16 of that person's counsel. That disciplinary rule is l.

I 17 explained by ethical consideration 7-18.  !

is  ! In the context of those cases, it is a cuestion  !

I i

19 l of whether an attorney is ceing to be disciplined for so:ae i

I 20

! kind of contact with a person who is represented by counsel.  :

21 Mr. Guild during his argument, I guess tt was 1

22 yesterday, tried to make a distinction between a party and 23 a witness. As far as I can tell from reading the cases 24 under disciplinary rule 7-104, the de finition of a party 25 is not a party to a legal proceeding because it. refers to

i

?

j 6594 j i

l contact with a party,on.the subject of representation, and 1

the sub]ect of representation can be broader than a sirple 2

i 3 ; lawsuit or a simple legal proceeding.

i 4

So we think that the recuest for scmething beyond 5

the norm needs to be supported by some clear legal authority 6

or some sort of factual showing. l 1

7 Now there was one case that dealt with a similar l 4

t i

8 l fact situation and I think I ought to bring it up. It is I

g Vega versus Bloomsburgh, 427 Fed Sup 593. A government p) agency was sued. They immediately sent a memo to all d

11 employees instructing them not to confer with plaintiff's

,8 l

12 counsel. Plaintiff's counsel sought relief from the court l 4

i-13 [and the court indicated that the employees had a right, I i 4

14 l if they chose, at that early' stage to confer with anycne i,

15 they wanted to in prediscovery and pretrial.

16 The important matters were that the court indicated.

• i i

17 there had been no showing that the individual employees were j

.s Hi represented by the Attorney General,.that their interests 8-ig were adverse.to that of plaintiffs, or for that matter consist ;.

- 'l 20 with those of de fendants. j 21 So I think that casefis consi's tant with'wheie  ;

.i-

.n we find ourselves at trial where witnesses are. represented t

I u by counsel. 'Their interests 1are consistent: with; that ofi 24 their counsel.because the. bottom line testimony 1isc,1 in view; s' of . all' of ; the.c concerns that chave ,been '. raised,4they believe:

i q .

y apr - -

i

! 6555 1

l that the plant is constructed safely and that-there are no -'

1 f

2 unidentified construction deficiencies. l; i

3 Finally, Palmetto has had an opportunity to j I

i 4 confer and prepare through contact with these witnesses.

i 5 During discovery they asked for and obtained the telephone 6 numbers of these witnesses.

7 JUDGE KELLEY: I know t. hat.

8 MR. GIBSON: And also they had the opportunity I

9 to take depositions. So we don't think that relief cught 10 to be granted. It is extraordinary and, frankly, it is 11 absurd in our view.

12 MR. GUILD: Mr. Chairman, we only ask th'at-the I I

13 record reflect we disagree with :Ir. Gibson's characterization 14 about the substance of the witnesses' testimony. I don't 15 want to belabor the point, but we don't agree that their 4

16 testimony. stands for the proposition they support applicant's {

17 case as. described by 31r. Gibson.

18 JUDGE KELLEY: It seems to me that the testimony I t

i i

19 is something that would mix. l 20 MP. GUILD: ies, sir.

21 . JUDGE KELLEY: Mr. Johnsca.

'I I would like'ta) be heard briefl'y

~

22 MR. JOIINSON:

! 23 on this, i "

t l 24 JUDGE KELLEY: All.right.

i l M MR. JOHNSON: .I would-agreefto a.certai'n extent t.

i

j 65H ,

i i'

with Mr. Gibson that tne cisciplinary rule 7-104 is perhaps  :

1 i

i l

2 '

-'a most certinent rule tnat we can re:er to, and tnis, l I

1 3 as Mr. Gibson said, is a lawyer may lot communicate d rectly I

4 I' with an adverse party represented by a lawyer unless there ,

i r I

l 5  ; 1s crior consent of the lawyer.

i i

l 6 l But there are a couple of questions that that ,

! i 7 rubrick leaves unanswered in application. l 8 The first is whether the person is an adverse 9 party and, secondly, whether he is represented by a lawyer.

10 We have done a little bit of research on this 11 point on the attorney / client privilege and there is some 12 applicable law. Mr. Guild pointed out in his argument I

13  !; rhat the control group concept applies. There are some 14 l cases which apply a sucject matter test to the extension i

15 1 .s e

-"e attorney / client privilege and there is a line cf

!i 16 l cases.

i l

i 17 The T.ost recent pertinent case I have a citation

!l I.I 18 l 4

to is Diversified Industries - V. Merridith, 572 Fed Second I

i 19 j 596 Eighth Circuit, 1977 This is, however, in a discovery M  ! context and it involve the extensten of the concept of the 21 corporate client. It basically turns not so much on the 22 control group concept, but rather on the relationship, the 23 purpose of the connunication and looks at the substance 24 of what is being communicated back and forth.

25 That also doesn't necessarily give an answer

car..--- l l

l l

i' i  ; because one of the points is that the communication should 2 be made at the direction of the corporate superior for the il i

3 ;curcose of securing legal advice for the corporation.

i 4 'i

. I think the cuestion maybe 1.- this case is whether 4

il 5 ,

we have a personal attorney / client relationship between the 1

6 l witness and the attorncy, and in that case it seems to me l

, I i I 7 l that the disciplinary rule 7-104 would apply cuite clearly I i

4 i

8 'and you wouldn't have to apply diversified in that corporate  !

9 control group or subject matter test line. I think that l

end sim to l control group means people like corporate executives.

end Take 1 g 11

!i.

12 13 :

14 15 1

17 il I

! I 18 I l

1h .

l 20 L ,

t 21 I

l 22 l t

I I

U l r

24 25

l l

4

'(bl 639; , ,

! l l

r I Control group means *;etnle-1 JUDGE KELLEY:

2 like corporate executives?

- 3 MR. JOHNSON: Yes. i 4 JUDGE KELLEY: I understand.

5 MR. JOHNSON: People --

6 JUDGE KELLEY: Yes.

7 MR. JOHNSON: So it seems to me thGre is S probably a relatio'nship between the attorney-client o privilege and its sanctity and the disciplinary rule such i to that you wouldn' t allow an attorney --- an adverse attorney f

11 to talk in the presence of person's counsel to the adverse 12 party for fear you micht reveal confidences or nicht --

'3 nicht da ace the intecrity of the attorney-client

'a relatiensh ip, but- it seems to me that if'-hese witnesses:

15 are in an attorney-client relationship with Applicants' t 't counscl, that that should control.

8

• 17 JUDGE KELLEY: -All richt. Thank you.

C 4

$ tB I said we have thoucht.abrut.this. We would i

19 l'ike to take a ook at-tbe. cases and discuss i't a little

, 1 20 nore, but - I ful.ly anticipate coming back'with a rulinc-

! 21' after tbc'first break.

I

.g

22 With that, we are orepared to swear in

Mr. Ross.

E

$, 23 , Anythinc else of a1housekeepinafnature? Some other 24 nature that needs to'be raised?) _

l 25 Okay. Mr. Ross, wou'Id - yoti .- ra ise your r icht 2

f.

l. . _._.. _ . -

N

, e -

. *s 4 ,

Thursday, November 10 6644 Tak@ 5 1 JUDGE KEL LEY: Pe can resume. We have considered

)

2 further your points of counsel on the question of speaking 3 with witnesses and we have looked at the cases you have cited 4 and are prepared to deliver a ruling on that point 5 The issue arises in response to Palmetto's motion 6 requesting access to the witnesses in the case in breaks 7 and over the evening and times like that. There appears 8 to be very little case law on a trial practice question 9 of this kind. As I mentioned we looked at the cases which to were cited and we found them somewhat instructive, but not 11 controlling and we are really thrown back on our own common 12 sense and a sense of what the circumstances require in the 13 interest of fairness.

14 The company is claiming a right to be able to 15 instruct all the Duke Power Company employee witnesses not 16 to discuss the case with counsel for Palmetto during the 17 hearing. Legally the claim rests basically on the attorny/

18 client privilage. It is said to be an aspect of that privilece.

19 The Board accepts that claim as to executive 20 level employee witnesses such as, for exaple, Mr. owen and 21 Mr. Grier. The staff pointed us to a case which talked M about so-called control group configurations in corporations 23 and we think that analysis is somewhat helpful here.

24 Fawever, we reject the claim being made by the

, 25 - company-with respect to employees _at the site, and more

3-2 6645 1 particularly welding inspectors and welding inspector 2 supervisors. The main reason as we see it is that while 3 it is true that an attorney should be able to control the 4 party, and we feel that executive level employees such as 5 Mr. Owen areWWF in amr real sense a party or' a real spokesman 6 for the party, and perhaps most significantly can bind the 7 party. What somebody like Mr. Owen says about this case 8 is pretty much what the Duke Power Company says about this 9 case as we see it.

10 We just don't see that that is the case with 11 site employees and a welding inspector, for example. We 12 don't see how a statement by a welding inspector can be said

') 13 to bind the Duke Power Company or could be viewed in that 14 light.

15 Parenthetically we might just note that we 16 looked at a similar point some months ago in this case where 17 we considered whether Palmetto should be required to go 18 through counsel for the company in order to contact prospective 19 witnesses and we. ruled against that.

20 There are some similar considerations which 21 seem to us to apply in this situation. Apart from the 22 legal analysis of the attorney / client privilege and related 23 doctrines, it just seems to us as a matter of fairness.

24 Virtually all the witnesses in >5is case 25 are Duke Power Employees and they are witnesses for both

7 6646 5-3 1 sides and we just think it is unfair to grant the applicants-2 what amounts to a monopoly on their time during this time 3 of the hearing.

4 In light of those considerations, we are 5 granting the following specific relief and our words are 6 chosen with some care.

7 . Neither counsel nor responsible officials 8 of Duke Power Company shall instruct future witnesses, other 9 than executive level witnesses, not to speak to or cooperate 10 with counsel for the intervenor, Palmetto Alliance, from 11 now until the conclusion of this he'aring. Any such instruc-12 tion previously given shall be withdrawn. Palmetto may 13 contact these witnesses at reasonable times and places and 14 the witnesses may decide for themselves whether to cooperate 15 with Palmetto.

16 On the exact relief we are granting, I will 17 just add, this is a right of access and a right of contact.

18 It is not necessarily a right of communication. If the 19 particular witnesses chooses not to talk to or cooperate 20 with Palmetto, that is their choice.

21 Also, I think the wording implies, but I will 22 say it explicitly, this is not retroactive. It.is just j l

23 from now on.

24 That is our ruling.on that matter and we 26 would like.to go right back to cross.

6647 ;

5-4 i 1 j MR. McGARRY: Your Honor, we have several points, ,

It (

2 please. We have several questions.

I 3  ! First of all, does this ruling apply to the i t

remaining technical issues and emergency plans? l-4 i-5 JUDGE KELLEY: Right now it is on 6. Iwillthink-j 6l t about the question you are asking.

7 i

MR. McGARRY: Second of.all, is Palmetto Alliance i

8  : to make its request through counsel?

9 JUDGE KELLEY: I thought I made that clear.

I 10 i MR. McGARRY: Thirdly, we would ask for a stay 11 of your ruling.

12 JUDGE KELLEY: What are you going to do? A stay

13 pending what?

14  ; MR. McGARRY: A referral to the Appeal Board.

15 l JUDGE KELLEY: We will tell you after lunch.

16 Between now and lunch the request is denied.

17  : MR. McGARRY: There are two_ things. One is a f

i i 18 l stay and the second is for -you. to refer this ruling.to the 19 l Appeal Board. .Two requests.

%)

l '

JUDGE KELLEY:., Denied.

I 21 l MR. McGARRY: _Until lunch; is that correct, sir.

22 i JUDGE KELLEY: We-are_ denying the stay. We are l l -

M not going torrefer it, but if you want to see, certification 24 you go ahead.

i M MR[ McGARRY: Or.re'ferral; is: thatucorrect?:

! 6648 o' J o

[

1 JUDGE KELLEY: They call it referral when there 2 has been a ruling made, as I understand it. I don't think 3 it makes much difference.

4 MR. McGARRY: The last point, Just so the record 5 is clear, we are now free to go to the Appeal Board? ,

6 JUDGE KELLEY: Yes.

I 7 MR. McGARRY.- Thank you.  ;

i 8 JUDGE KELLEY: Okay, can we resume?

9 MR. GUILD: Yes, sir, Mr. Chairman, I am prepared 10 to resume.

11 CROSS-EXAMINATION (Resumed) 12 BY MR. GUILD:

13 O Mr. Ross, before the break we were talking about l 14 this discussion you had with Mr. Owen v :ich identified the i i

16

first two of the three subjects. That took us through vour i I

16 advocating to him about the pay reclassification and the 17 qualification issue for the welding inspectors.

18 The t' c subject I gather generally was the nature '

19 of the cor. a :a t you understood were held by welding M inspectors. Can you describe what went on in that part of 21 the conversation, please? .

22 A Well, basically I tried to pass en to Mr. Owen 23 and told him in general the type of concerns that we had 24 as far as the procedures not being followed as strictly 2 as they should, and that in a lot of cases where the problem i

ATTACHMENT B Neither counsel not responsible officials of Duke Power Company shall instruct its employees who are called as wit-nesses by the Intervenor, Palmetto Alliance, not to-speak to

. counsel for that Intervenor from now until the conclusion of 4

this hearing. Any such instruction previously given shall be wi'.hdrawn. Palmetto [ Alliance] may contact these witnesses at reasonable times and places and the witnesses may decide for themselves whether to cooperate with Palmetto [ Alliance].

Provided that: the witnesses may be instructed by counsel or responsible officials of Duke not to disclose to Palmetto or

its counsel during the course of any off-the-record contact any communication between the witnesses ~and Duke counsel bearing upon this licensing proceeding and the issues being. litigated therein. Moreover, Palmetto counsel shall refrain from making any inquiry of any witness that directlyaor indirectly solicits information pertaining to the existenceaof such a communication.

Provided further that: the foregoing proviso does notLapply-to any statement of underlying fact whether or not_that fact was communicated'to Duke counsel by the witness.'See Upjohn Co.

v. United States, 44 9 U.S. 383, 395-96 (1981).

a 4

4

\

UNITED STATES OF AMERICA DOLKETED i NUCLEAR REGULATORY COMMISSION N i I

BEFORE THE COMMISSION 83 NOV 15 P4:42 In the Matter of ) 0FFICE OF SU.R6A

) 000EEilkG & SERVN:

DUKE POWER COMPANY, et al. ) Docket Nos. 50-413 BRM

) 50-414 (Catawba Nuclear Station, )

Units 1 and 2) )

CERTIFICATE OF SERVICE I dereby certify that copies of " Applicants' Motion For Stay Of Orders Issued By The Atomic Safety And Licensing Board And The Atomic Safety And Licensing Appeal Board" in the above captioned matter have been served upon the following by deposit in the United States mail this 15th day of November, 1983.

• Nunzio J. Palladino

• Alan S. Rosenthal Chairman Chairman U.S. Nuclear Regulatory Atomic Safety and Licensing Commission Appeal Board Washington, D.C. 20555 U.S. Nuclear Regulatory Commission

• Frederick M. Bernthal Washington, D.C. 20555 Commissioner U.S. Nuclear Regulatory

• Thomas S . Moore Commission Atomic Safety and Licensing Washington, D.C, 20555 Appeal Board U.S. Nuclear Regulatory

• James K. Asselstine Commission Commissic1er Washington,'D.C. 20555 U.S. Nuclear Regulatory Commission *Howard A. Wilber Washington, D.C. 20555- Atomic Safety and Licensing Appeal Board

• Victor Gilinsky U.S. Nuclear Regulatory l Commissioner Commission I U.S.. Nuclear Regulatory Washington, D.C.:20555 Commission-Washington, D.C. 20555 James L. Kelley Chairman

• Thomas M. Roberts Atomic Safety'and Licensing I Commissioner Board Panel I

U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C. 20555 Washington, D'.C. 20555-

Dr. Paul W. Purdom Jesse L. Riley 235 Columbia Drive 854 Henley Place Decatur, Georgia 30030 Charlotte, North Carolina 28207 Dr. Richard F. Foster Carole F. Kagan, Attorney P.O. Box 4263 Atomic Safety and Licensing Sunriver, Oregon 97702 Board Panel U.S. Nuclear Regulatory Chairman Commission Atomic Safety and Licensing Washington, D.C. 20555 Board Panel U.S. Nuclear Regulatory Karen E. Long Commission Assistant Attorney General Washington, D.C. 20555 N.C. Department of Justice Post Office Box 629 Chairman Raleigh, North Carolina 27602 Atomic Safety and Licensing Appeal Board

• Scott Stucky U.S. Nuclear Regulatory Docketing and Service Section Commission U.S. Nuclear Regulatory Washington, D.C. 20555 Commission Washington, D.C. 20555 George E. Johnson, Esq.

Office of the Executive Legal Don R. Willard Director Mecklenburg County U.S. Nuclear Regulatory Department of Environmental Commission Health 4 washington, D.C. 20555 1200 Blythe Boulevard Charlotte, North Carolina 28203 Albert V. Carr, Jr., Esq.

Duke Power Company

• Martin G. Malsch P.O. Box 33189 Deputy General. Counsel and-Charlotte, North Carolina 28242 Acting General Counsel U.S. Nuclear Regulatory Richard P. Wilson, Esq. Commission Assistant Attorney General Washington, D.C. 20555 State of South Carolina P.O. Box 11549 Columbia, South Carolina 29 11 Robert Guild, Esq. ,

Attorney-at-Law. -' 4 ... #

/.['f) [ l t it / L // / 1 ///(A4.'_ /p/$,

P.O. Box 12097 ) ,L f/ /ps -q Charleston, South Carolina 29412 JL Michael McGarry, III //'

Palmetto Alliance 2135 1/2 Devine Street Columbia, South Carolina 29205

• Designates'those hand delivered.

.