ML20235V339

Prehearing Conference Order (Setting Forth Issues & Schedules).* Objections to Order May Be Filed by Licensees within 5 Days After Svc of Order & by NRC within 10 Days After Svc Order.Served on 890302.W/Certificate of Svc

ML20235V339
Person / Time
Issue date:	03/01/1989
From:	Bechhoefer C Atomic Safety and Licensing Board Panel
To:	NRC OFFICE OF THE GENERAL COUNSEL (OGC), ORION CHEMICAL CO., WRANGLER LABORATORIES
References
CON-#189-8209, REF-QA-99990004-890301 89-582-01-SC, 89-582-1-SC, EA-87-223, NUDOCS 8903100141
Download: ML20235V339 (14)

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'89 IW? -2 NCh55

. UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION Ff.h

.e.1 ATOMIC SAFETY AND LICENSING BOARD Before Administrative Judges:

Charles Bechhoefer,. Chairman 55RVl0 MAR -M989 Dr. . Jerry-R. Kline Frederick J. Shon

)

) Docket No. 9999004 In the Matter of )' .(General License

) Authority'of 10 C.F.R.

WRANGLER. LABORATORIES, ) 9 40.22)

LARSEN LABORATORIES, ) E.A.87-223 ORION CHEMICAL COMPANY )

AND JOHN =P. LARSEN ) ASLBP No. 89-582-01-SC

)

) March 1, 1989 PREHEARING CONFERENCE ORDER-(Setting'Forth' Issues and Schedules)

This proceeding invol'ves a challenge-by the Licensees to the order issued by the NRC Staff on August 15, 1988, revoking the right of the Licensees to make use of the general license authorized.by 10 C.F.R. 9 40.22. On February 22, 1989, the Atomic Safety and Licensing Board in this proceeding conducted a prehearing conference in Provo, 1

Utah. In attendance were Mr. John P. Larsen, on behalf of ,

l 1 Notice of the conference, dated February 9, 1989, was published at 54 Fed. Reg. 6980 (February 15, 1989). The  ;

conference covered transcript pages 1-76 (hereinafter, Tr. '

).

8903100141 890301 I Oggf EU o ,y

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the Licensees, and the NRC Staff. At that conference, the Board, after consultation with the parties, defined the l

precise matters at issue in the proceeding, and established discovery schedules and a tentative hearing schedule.

Following is a description of the matters discussed and decided at the conference.

A. FACTUAL ISSUES As set forth in the Staff's revocation order, the ultimate issue in the proceeding is whether the order (revoking licenses) should be sustained. The Staff, of course, has the burden of proof (and of persuasion) on this ultimate issue (Tr. 3-4). To sustain its revocation order, the Staff has set forth a number of factual matters which it views as establishing that the right of Licensees to operate under the general license should be revoked.. Those matters, set forth below, constitute factual sub-issues in the proceeding (some of which may not be in dispute).

To the extent the Staff in fact is relying on these matters to support its order, it must deal with them in its direct testimony. The Licensees may, of course, respond.

In that connection, we note that Mr. Larsen raised the matter of the "non-objectivity" of the Staff's investigations (Tr. 39-44). These matters may be used by Mr. Larsen in his response to affect the weight we might give to testimony by the Staff (as well as in our

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" consideration of-the propriety of. revocation as'a remedy in

-this case).

'1. Alleged violation of:15 lb. transfer limit with respect to two' shipments (on Junef1, 1987 and December 20, 1987, respectively) from the Licensees' facility in Wyoming.

Among other matters, this issue ~ involves whether the shipments in' question include materials which the Licensees assert'were shipped from a Utah location. This issue also involves _the precise content of a telephone inquiry from Mr.

Larsen to.the NRC Staff concerning the propriety of shipments'from multiple locations. In addition, thi s : 'i s s ue =

raises the question whether there are any " possession limits" under the general license authorized by 10 C.F.R. 9 40.22. (See Tr. 11-14.)  !

2. Alleged transfer of depleted uranium (DU) on five occasions (December 9, 1986; February 2, 9,.and 17, 1987; i

and March 3, 1987) following suspension of Mr. Larsen's  !

specific license in Utah (which occurred on November 3, 1986). This. issue involves a definition, for the record, of  !

the content of the shipments in question, the facility from which each shipment emanated and, additionally, the legal question of whether NRC may take action on the basis of a i

violation of Utah regulations and, if so, under what

'I authority. (See Tr. 14-15.)

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3. Alleged. violation of 150 lb. receipt limit at the facility at Evanston, Wyoming, through receipt of "at least" 155.8 lbs. during 1987. This issueEraises the question of the precise amount received during 1987 (an OI report indicates that it may be as much as 211.34 lbs.) and also whether there is any " shipment limit".for-general licenses under 10 C.F.R.: J 40.22. (See Tr. 15-19.)

4. Contrary to Item 1 of Confirmation of Action letter (CAL) dated November 12, 1987, the asserted failure to submit baseline urine samples from two individuals. (See-Tr. .19-21.)

5. Contrary to Item-2 of CAL dated December 31, 1987, the asserted failure on one occasion to submit a background urine sample along with certain samples. (See Tr. 21-22.)

6. Contrary to Item 3 of CAL dated December-31, 1987, the alleged improper failure to collect urine samples from two individuals every three days. (See Tr. 22-23.)

7. Contrary to Item 4 of CAL' dated December 31, 1987, the alleged failure to submit to Region IV office certain high-level bioassay results when received. This allegation involved two follow-up phone calls from the Region IV Staff to Mr. Larsen, on February 4 and 9, 1988, respectively. The results of samples allegedly received by Licensees on January 10-13, 1988 are asserted not to have been forwarded to Region IV until February 4, 1988 (following a elephone l

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5 inquiry on that date). The results of samples allegedly received by Licensees on January 8, 1988 are claimed not to have been furnished to Region IV until February 9, 1988

-(following another telephone inquiry on that date). This issue involves the question whether the failures in the foregoing sequence of events amount to wi11 fulness or at least careless disregard, under NRC's enforcement criteria set forth in 10 C.F.R. Part 2, Appendix C. This issue also involves the content of the phone inquiries of February 4 and 9, 1988, and whether the February 4 inquiry put the Licensees on notice that they should have furnished (at that earlier date) the material later requested on February 9, 1988. (See Tr. 23-25.)

8. Alleged inaccurate statements in the Licensees' March 18, 1988 response to the Staff's suspension order, concerning the improved work environment at the Wyoming facility. This issue is apparently premised on alleged misstatements and must be differentiated from the alleged inadequacy of the facility itself (see Issue 11, below).

Also involved in this issue is the status of work and the condition of the Wyoming facility at various pertinent times during the course of the Staff action against the Licensees.

(See Tr. 25-27.)

6 9 .- . Alleged unacceptably high1 personnel bioassay samples. From what source are standards of acceptability derived by the Staff? (See Tr. 27-29.)

10. -Allegation of-five contaminated facilities in Utah. This issue. involves the question of whether NRC standards are applicable to facilities in Utah, an agreement' state. (See Tr. 29-30.) I'

11. Alleged' inadequate facility in Wyoming. At issue here is whether a general licensee under 10 C.F.R. 8 40.22 1

must include in its facility the " prudent engineering i

controls" such as are required under a specific Part 40 -l license and, if so, under what authority. (See Tr. 30; see also Issue 8, above.)

12. The Licensees' alleged past history of violations, beginning in 1982. (See Tr. 30.)-

B. LEGAL ISSUES l

Underlying the various factual issues set forth above are a number of legal issues. The Licensees are invited,  !

and the Staff is directed, to deal with these issues in their evidentiary presentations.

1. Applicability of 10 C.F R. Part 20 to the Licensees, pursuant to the general license authorized by 10 I l

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C.F.R. 9 40.22 (Tr. 32-33). '

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a. Is~it based on the Licensees' alleged violation of receipt or use limits (see 10 C.F.R. 9 40.22(b))?

b. Alternatively, is it premised on the c

Licensees' possession of a specific' license (see the proviso-in 10-C.F.R. 9 40.22(b))? .If so, does the Utah specific license (currently suspended but apparently not revoked) i l

constitute "a specific license issued pursuant to" part 40?-

c. The various CALs issued to the Licensees appear to be based in part on Regulatory Guide 8.22, which in part is premised on 10 C.F.R. Part 20. By its. terms,

. Regulatory Guide 8.22 applies to." bioassay at uranium mills" .

and to " applicable portions of uranium conversion facilities where the possibility of exposure to yellowcake dust exists." Under what authority is the Staff applying this i guide to the Licensees? $

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2. Does Part 40 include any " possession" limits for j general licensees under 10 C.F.R. 9 40.22? Or is it'11mited ~ )

to "use", " transfer" or receipt within a calendar year?

What is the authority for charging the Licensees with violation of possession limits? (Tr. 33.) l

3. The revocation order states that the Licensees'

" activities, which have involved the chemical processing of significant amounts of source material, are of such a nature l that the radiation safety, chemical safety, and waste

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8 disposal aspects of the operation should not be conducted under a general license. Moreover, activities of this nature were not anticipated by the AEC at the time of 10 C.F.R. 40.22 rulemaking." What relevance is this allegation? Is not the Staff bound by the terms of the regulations as written, rather than by what the Staff currently believes should be in effect? If the Licensees meet the stated criteria of 10 C.F.R. 9 40.22, is that not sufficient to-permit them to carry on activities under a general license? (See Tr. 33-34.)

C. REVOCATION AS A REMEDY The remedy of. revocation also_ raises a number of issues. In particular, there appears to be no attempt to associate the remedy of revocation with the criteria.in 10 C.F.R. part 2, Appendix C, which sets up standards for invoking several types of remedies, of which revocation is the most stringent. The Staff is directed, and the Licensees are invited, to deal with the following issues in their evidentiary presentations.

1. Under the Staff's revocation order, what is the time period under which the Licensees' general licenses 1 would remain revoked? Because a person need not apply for the right to utilize a general license, how would the Licensees regain authority to operate under a general I license, assuming they were to satisfy all the stated

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criteria? Does the revocation in effect constitute an indefinite blacklist? How broadly would the revocation order permeate through Mr. Larsen's various organizations?

(Tr. 33-36.)

2. What is the relationship in this case of the proposed revocation remedy to the criteria set forth in 10 C.F.R. Part 2, Appendix C? (Tr. 36-37.)

a. Into what severity category (App. C, Supp. VI) do I each of the asserted violations fal]?

b. In this proceeding, are there circumstances within the meaning of App. C(III) which would warrant an increase in the severity level of violations. See also App, C(V)C(3).

c. May actions of Mr. Larsen or the Licensees be deemed to be " willful", within the meaning of App. C(III) and (V)* (See Issue A.7.)

d. To what extent, if any, is the Staff relying on past violations for which a penalty has already been assessed to support the revocation order (Tr. 37)? (See Issue A.12.)

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3. What are the public health and safety implications, j 1

if any, of each of the alleged violations? Of all the alleged violations considered collectively? Are the alleged j violations each considered to be equally ses lous for I purposes of ascertaining an appropriate sanction? Is a 5 1

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10 lb. excess transfer as serious as af61 lb. excess, for purposes of imposing sanctions? (Tr. 37-38.)

4. -The Staff should develop for.the' record its, rationale for seeking revocation l(the most severe'sanct' ion) rather than some lesser sanction (Tr. 38). Did the. Staff give consideration to other sanctions--i.e., operation .4 l

-subject to specified conditions? If so, provide-details.  !

Would any other sanction have been appropriate?

j D. SETTLEMENT OR STIPULATIONS

1. The Board noted that theLCommission's' regulations encourage settlement (10 C.F.R. 9 2.203) and urged the parties to attempt to do so (Tr. 62).

2. The Board also noted that several factual' questions; appear not to be in dispute and urged the parties to. attempt to stipulate those facts (Tr. 47-49).

E. DISCOVERY

1. The Licensees requested no discovery (Tr. 50). The Staff requested the right to take the depositions of two potential witnesses named by the Licensees. In response to an inquiry of the Licensees, the Board noted that I arrangements could be made for these depositions to be -l subject to a protective order, limiting the premature  !

release of certain information (Tr. 51-53). Subject to any protective order which proves necessary, the Board grants the Staff's request for depositions.

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2. Discovery was authorized to begin immediately (Tr.

73). By Friday, March 17, 1989, the parties are to exchange lists of witnesses (Tr. 73).

3. The Board requested.the Staff to furnish to it (and  ;

~ Mr.,Larsen,.if necessary) copies of Inspection Report 99990004/88-21, dated April 26, 1988, and any other i

pertinent. inspection reports not previously furnished (Tr.  !

53-54).

4. The Board also requested the St.aff to furnish it -

with.CALs dated March 18, 1988 and April 1, 1988, and any other pertinent CALs not previously furnished-(Tr. 54-55).

5.- The Board requested the Staff to establish ~a local public document room (LPDR) for the purpose of including documents and transcripts issued following the prehearing a

conference. Upon an offer by the law library of J. Reuben Clark Law School, Brigham Young University, to house those documents, the NRC Staff agreed to establish such a LpDR-(Tr. 60).

F. REARING SCHEDULES

1. Filing of Direct Testimony;

a. Staff: Tuesday, April 4, 1989.

b. Licensees: Monday, May 1, 1989.

Among other matters, we asked the Licensees to include as part of their direct testimony (1) their March 18, 1988 response to the Staff's suspension order, and (2)

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12 their December 26, 1988 response to the Staff's revocation order (Tr. 4-5). These responses were not submitted under

. oath or affirmation and, if included in the record..this-deficiency would be remedied. The Licensees need not submit or pre-file additional copies of these responses to the {

parties or Licensing Board but should bring one copy of each to the hearing, to be. furnished to the court reporter for  !

inclusion in the record (Tr. 5-7, 65).  :

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2. Hearing to be held during week of May 15-21, 1989, in Provo, Utah. i (Exact dates, hours and location to be '

announced in a later Order.) I 1

3. During the evidentiary hearing, the Board will hear I' oral' limited appearance statements, as authorized by 10 C.F.R. 9-2.715(a) (Tr. 69-70).

1 G. RECONSIDERATION  !

In accordance with the provisions of 10.C.F.R. 9 2.752(c), objections to this Order may be filed by the Licensees within five (5) days-after service of this Order (with an additional five days added for mailing), and by the Staff within ten (10) days after service of this Order.

l IT IS SO ORDERED.

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13 FOR THE ATOMIC SAFETY AND LICENSING BOARD PA,J ~ A J L lw cTiarles Bechhoefer, C/ airman ADMINISTRATIVE JUDGE Dated at Bethesda, Maryland this 1st day of March, 1989 1

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_ _ _ _ _ _ _ _ - - - - - - . - - _ - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - --- ___ - - - . _ - - - - - - - - - - - - - - _ -------------J

(-  ; r-UNITED STATES OF AMERICA NUCLEAR RESULATORY COMMISSION In the Matter of i I

WRANGLER LAB., LARSEN LAB., ORION I Docket No.(s) 9999004 CHEMICAL COMPANY AND JOHN P. LARSEN I (General Lic. Auth, of 10 CFR 40.22 i E. A.87-223) i I

CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing LB PREHEARING CONFERENCE ORDER have been served upon the following persons by U.S. sail, first class, except as otherwise noted and in accordance with the requirements of 10 CFR Sec. 2.712.

Administrative Judge Administrative Judge Charles Bechhoefer, Chairman Jerry R. Kline Atomic Safety and Licensing Board Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 Administrative Judge Frederick J. Shon Office of the General Counsel Atomic Safety end Licensing Board U.S. Nuclear Regulatory Commission U.S. Nuclear Regulatory Commission Washington, DC 20555 Washington, DC 20555 John P. Larsen Orion Chemical Company 3853 North Sherwood Drive Provo, UT 84604 Dated at Rockville, Md. this  !

, / _ _ _

2 day of March 1989 Dif ;;its;i;;;;;;;;;i;;;E;;;t;; tan

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