ML20206S968
| ML20206S968 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 04/16/1987 |
| From: | Martland D ROPES & GRAY, TEXAS UTILITIES ELECTRIC CO. (TU ELECTRIC) |
| To: | Atomic Safety and Licensing Board Panel |
| References | |
| CON-#287-3172 CPA, OL, NUDOCS 8704230087 | |
| Download: ML20206S968 (29) | |
Text
I 33/72L-9
-o DOCKETED USNRC Filed:
April 16, 1987 17 ART 20 P2 :47 UNITED STATES OF AMERICA NUCLEAR REGULATORY CCMMISSION OCKIT t Ydk~
BfGNCH before the ATOMIC SAFETY AND LICENSING BOARD
)
In the Matter of
)
)
TEXAS UTILITIES ELECTRIC
)
Docket Nos. 50-445-OL COMPANY, et al.
)
50-446-OL
)
and (Comanche Peak Steam
)
50-445-CPA 1
Electric Station, Units 1 and 2 )
)
)
RESPONSE 1 TO CASE AND MEDDIE GREGORY MOTION FOR APPOINTMENT OF LEGAL COUNSEL FOR MINORITY APPLICANTS AND FOR CLARIFICATION OF DISCOVERY RESPONSES On March 9, 1987, CASE and Meddie Gregory filed a motion comprising two separate requests:
(i) that the Board order the Minority Owners of Comanche Peak to respond under oath to past discovery requests and (ii) that it direct the Minority owners to obtain counsel in these proceedings.
For the reasons discussed herein, it is submitted that a 1
This response is timely pursuant to the oral extension j
agreed to by Anthony Z. Roisman, Esq., counsel for movants.
l G704230007 870416 PDR ADOCK 05000445 D})
O PDR
a a-Board answer to the first request is unnecessary.
It is
(
accepted that the Owners of Comanche Peaka must collectively and fully answer Intervenors' discovery requests.
An effort designed to produce adequate assurance that this obligation z.
has been met is currently nearing completion.
There is, therefore, no current basis for attempting to craft other t
provisions intended to confirm that' obligation has-been met.
No answer to the second question is warranted, either, but for very different reasons:
The second request is simply not currently justiciable before this Board.
Issues concerning who should represent which owner, and how that representation should be effectuated, may be entertained if, I
and only if, the only entities affected thereby -- one or
}
more of the Joint Owners -- seek to place the issue before this Board.
i
)
a As he Joint Ownership Agreement contemplates, the arguments, analysis and legal positions this Response contains were selected by TU Electric.
The Board has requested, however, that the views of the Minority Owners be directly reflected in this filing.
For the reasons expressed hereinafter, it is our view that separate statements reflecting differences in the desired legal positions among the Joint Owners are not contemplated by the i
Joint Ownership Agreement or by Commission practice or i
policy.
See also notes 9 and 18, infra.
We have nevertheless decided to acquiesce in the Board's expression l
of interest on this occasion and have polled the Minority i
Owners for their views on the fundamental issues -- legal j
and factual -- addressed by this filing.
Their views are summarized in Part III, infra.
i 2-1 f
i I
Intervenors' motion makes much of an alleged concern that the past answers to discovery may have been incomplet<
It claims this Board should allay those doubts by ordering the Minority Owners to (i) respond, under oath, to Intervenors' past discovery requests and (ii) obtain counsel to represent them in these proceedings.
To put the Intervenors' reque'sts in perspective, their discovery concerns appear to comprise a de facto motion to compel further discovery on the grounds that prior answers were incomplete or evasive pursuant to 10 C.F.R. $ 2.740(b).
While such a motion appears to be procedurally defective in several respects,8 it will not be challenged on legal 8
Intervenors are presumably moving to compel further answers to discovery under 10 C.F.R. $ 2.740(f) on the grounds that the initial answers were " evasive or incomplete."
Id.
We are obliged to observe that the Motion is legally inadequate in three regards.
N First, 10 C.F.R.
$ 2.740(f) requireo that the movant identify the questions he believes to have been incompletely answered.
Intervenors concede some discovery was fully answered, Intervenors' Motion at 4, but nevertheless fail to explain which discovery they wish answered more fully.
Second, Intervenors have not satisfied their burden, as moving party, of demonstrating the answers were incomplete.
- See, e.g.,
Beck v. Teague, 534 F.2d 300, 305 (Cust. & Pat. App. 1976); Usery v. Brandel, 87 F.R.D.
- 670, 685 (W.D. Mich. 1980); Plummer v. Chicago Journeyman Plumbers' Local Union No. 130, U.A.,
77 F.R.D.
399, 406 (N.D. Ill. 1977).
Intervenors' only basis for their assertion that past discovery answers are incomplete are Intervenors' doubts about whether " counsel for ' Applicants' spoke for (and consulted with) all Applicants in
grounds.
Rather, we expect soon to confirm that all legitimately requested discovery has been provided.
In view of that expectation, and inasmuch as its fulfillment has no relationship to the other request advanced by Intervenors, the orders they seek are wholly inappropriate.
responding to discovery."
Intervenors' Motion at 4.
Dispelling that doubt is legally irrelevant, however.
Responding parties are bound to provide Intervenors with all relevant, responsive unprivileged material in their possession, custody or control.
The Joint Ownership Agreement would seem plainly to render information in the hands of any of the Joint Owners within the Project Manager's scope of influence -- and thus capable of being obtained by TU Electric according to that standard.
Furthermore, parties, not their attorneys, are responsible for answers to interrogatories.
Whoever answers interrogatories on behalf of a party must include whatever information is available to the party.
4A Moore, Federal Practice 1 33.07, p.
33-46-47 (1984, 1987 Supp.).
Intervenors' concern about the role of counsel thus simply fails to provide a basis for their claim that complete discovery was not made.
Third, Intervenors would stretch beyond tolerance the requirement of 10 C.F.R.
$ 2.740(f) that a motion to compel be filed within ten days of the allegedly incomplete answer.
Since 1979, Intervenors have been repeatedly served with documents noting TU Electric's status, and responsibilities, as Lead Applicant, including the letters cited in footnote 4,
infra.
Indeed, CASE and its counsel specifically acquised in those arrangements last year:
they stated "Intervenors have no problem with Applicants' decision that TUEC be the lead Applicant for purposes of discovery, but, if Applicants use this method, TUEC must provide all information responsive to each request that is in the hands of any of the Applicants including the Minority Owners CASE Response to Applicants' Motion for Protective Order re 6/27/86 Discovery and Motion to Compel at 5 (Aug. 15, 1986) (emphasis added).
Accordingly, Intervenors cannot
~
justify their failure to make a timely motion to compel with the argument that they only "just found out" TU Electric is directing Applicants' license application.
i !
I.
INTERVENORS' DISCOVERY CONCERNS The scope of Intervenors' requests is dramatic indeed.
As explained more fully in Part II, ordering the Minority Owners to appoint counsel would trench upon a private contract, which is currently the focus of state court litigation and which has been reviewed
- and regularly relied upon by the Commission.8 The request that the Minority 5
- See, e.g.,
Letter from D.B. Vassallo, Acting Director, Division of Project Management, Office of Nuclear Reactor Regulating to R.J. Gary, VP TU (Dec. 19, 1979) and attached
" Safety Evaluation" at 2-3; Letter from Darrell G.
Eisenhut, Director Division of Licensing Office of Nuclear Reactor Regulation, to R.J. Gary, VP TU (Sept. 30, 1981) and attached " Safety Evaluation" at 1-3; Letter from Eisenhut to Gary (March 29, 1982) and attached " Safety Evaluation" at 1-2.
s See generally NRC Staff Response to CASE and Meddie Gregory Motion for Appointment of Legal Counsel for Minority Applicants and for Clarification of Discovery Responses at 6-7.
6 It is, moreover, of a type used in many other nuclear plants constructed and licensed by multiple owners.
- See, e.g.,
" Black Fox Nuclear Electric Generating Station ownership Agreement Among Public Service Company of Oklahoma and Associated Electric Cooperative, Inc. and Western Farmers Electric Cooperative", Section 1, filed in Public Service Company of Oklahoma, et al.
(Black Fox Station, Units 1 and 2), Docket Nos.
STN 50-556 and 557 on March 23, 1979 (lead utility " sole project manages with plenary power"); " Agreement for Joint Ownership, Construction and Operation Of New Hampshire Nuclear Units", Section 8.1 filed in Public Service Company of New Hampshire et al. (Seabrook Nuclear Power Station, Units 1 and 2), Docket Nos. 50-443 and 50-444, on March 22, 1986 (laad utility has " sole responsibility to act for the other participants"); " Grand Gulf Nuclear Station Joint Construction, Acquisition and Ownership Agreement Between Middle South Energy, Inc. and South Miss. Electric Power Association", Section 3.08 filed l l l
l l
Owners individually respond to past discovery is no less far reaching -- it would require the Minority Owners separately to review Intervenors' past discovery requests, review the in Grand Gulf Nuclear Station, Units 1 and 2, Docket Nos.
50-416 and 50-417 on April 3, 1980 (irrevocable appointment l-of lead applicant); " South Carolina Electric & Gas Company And South Carolina Public Service Authority Joint Ownership Agreement for Virgil C.
Summer Nuclear Station, Unit 1),
Sections 2.07 and 3.03 filed in South Carolina Electric &
Gas Company and South Carolina Public Service Authority (Virgil C.
Summer Nuclear Station), Docket 50-395 (designation of lead utility for design, construction, operation maintenance and sole authority for licensing).
The exception which proves the rule is " San Onofre Units 2 and 3 Participation Agreement among Southern California Edison Company, San Diego Gas & Electric Company, City of Riverside and City of Anaheim" Section 6.5, Exhibit H, filed in San Onofre Nuclear Generating Station, Units 2 and 3, Docket Nos. 50-361 and 50-362 on Nov. 14, 1980 wherein the Minority Owners expressly required the lead applicant to inform them of all significant project work, notify them of important meetings with vendors, regulatory agencies or others, meet periodically with them "on the management level" to discuss policy matters and "on the engineering level" to discuss project work and wherein the Minority Owners selected a project representative to maintain direct contact with the lead applicant.
Indeed, on several occasions when an Appeal or Licensing Board has imposed licensing conditions on a plant pursuant to Section 105(c) of the Atomic Energy Act, 42 USC 6 2135, it has dictated that the Majority Owner retain power over the management and operation of the plant.
- See, e.g.,
l Alabama Power Company (Joseph M.
Farley Nuclear Plant, Units 1 and 2), ALAB-646, 13 NRC 1027, 1112 (1981); Consumers l-Power Company (Midland Plant, Units 1 and 2), LBP-80-21, 12 l
NRC 177, 187 (1980).
Accordingly, except in prelicensing antitrust review proceedings pursuant to 42 USC $ 2135, it is common to find a single lawfirm appearing at the direction of a project manager or lead applicant in multi-owner licensing hearings.
- See, e.g.,
Arizona Public Service Company, et al. (Palo Verde Nuclear Generating Station, Units 1, 2 and 3),
LBP-76-21, 3 NRC 662 (1976); Public Service Electric and Gas I
I l t
l
~. -. _ -., _
responses to those requests and confirm whether the Minority 4
Owners had any information which was not included.
Neither request need, or should, be granted.
The obligation to answer Intervenors' discovery requests is not contested.
Based upon the Project Manager's continuing investigation, it is currently believed that this obligation has been effectively discharged.
It is surely intended that it will be discharged in the future.
The confidence expressed in these views may be easily explained.
A TU Electric is the lead applicant in this case.
It owns 87 5/6% of the plant; it is the only " owner" listed in the license application as a would-be operator of the Company and Atlantic City Electric Company (Hope Creek Generating Station, Units 1 and 2), LBP-77-21, 5 NRC 694 (1977); Philadelphia Electric Company, et al., (Peach Bottom Atomic Power Station, Units 2 and 3), LBP-77-62, 6 NRC 680 (1977); Public Service Company of New Hampshire, et al.
(Seabrook Station, Units 1 and 2), LBP-77-65, 6 NRC 816 (1977); Duquesne Light Company, et al. (Beaver Valley Power Station, Unit No. 1), LBP-78-16, 7 NRC 811 (1978);
Metropolitan Edison Company, et al. (Three Mile Island Nuclear Station, Unit No. 1), LBP-85-15, 21 NRC 1409 (1985);
Cleveland Electric Illuminating Company, et al. (Perry Nuclear Power Plant, Units 1 and 2), LBP-85-35, 22 NRC 514 (1985).
7 Amendment 3 to the Application for Operating License, dated January 26, 1984, provides:
TUEC is the lead Applicant, and as such, through its operating division Texas Utilities Generating Company (TUGCO), acts as agent for the other Applicants,
O plant;7 and, under the Joint Ownership Agreement, it is designated " Project Manager" with full responsibility for, and control over, the license application.
The Agreement provides, for example, that:
the Project Manager, as agent for the Parties, after giving due consideration to any recommendation and suggestions of the Owners Committee, and in accordance with the above-mentioned standards and guidelines, shall have sole l
responsibility for, and is fully authorized to act for the Parties with respect to the licensing of the Project Joint Ownership Agreement, $3.04 at 17 (emphasis added).
Section 5.01 of the Agreement makes the same point:
The Project Manager, acting as agent for the Parties, shall take whatever action is necessary or appropriate to seek and obtain all licenses, permits, and other rights and regulatory approvals necessary or appropriate to the the construction l
t I
l for design, construction, and operation, as well as representation in licensing matters.
TUEC requests Class 103 operating licenses for a period of forty (40) years for the units described below.
TUEC proposes to operate the nuclear electric generating plant, consisting of two (2) generating units.
Similar language is contained in all amendments since the Minority owners became involved in the Comanche Peak Project.
and operation of the Project and to the use of the fuel.'
TU Electric acknowledges that, as Project Manager
. responsible for all licensing activities, it has a duty to fully disclose all relevant information' on behalf of all owners.
Indeed, TU Electric agrees with the Staff's recent j
observation "that TU Electric's response constitutes the collective response of all co-applicants, unless stated e
Section 11.02 also requires that the Minority Owners cooperate in all activities in connection with the Project and execute all documents which "may be reasonably necessary to confirm the authority of the Project Manager to act for the Parties in connection with the Parties' interests in the Project The term "information" in this and the preceding sentences (as well as elsewhere in this Memorandum) is used advisedly.
It reflects the fact that although the discovery obligations upon a Lead Applicant, or indeed upon any party in any forum, extend to the reasonably diligent identification and transmittal of factual information relevant to the matters in issue and responsive to the discovery request, they never extend to sharing with one's adversary (or of course the tribunal) (i) internal deliberations regarding legal arguments, tactics, or strategy; nor (ii) substantially more subtle and subjective concepts such as opinions upon the efficacy of evidence, analysis or arguments employed by any participants.
These principles apply a fortiori where there may be multiple entities contributing to these conclusions.
For these reasons, TU Electric has no obligation to share with Intervenors such components of its legal positions.
As a result of discussions between the undersigned counsel and Staff counsel, it has been ascertained that the Staff agrees that the responsibilites of the Lead Applicants advanced in the Staff's Memorandum do not extend to legal positions but rather only to the duty to provide all factual information possessed by any of the Joint Owners and relevant to demonstrating the plant's compliance with Commission requirements.
_g.
t oth'erwise."
NRC Staff Response to CASE and Meddie Gregory Motion, supra, at 6.
TU Electric also acknowledges that it has the duty to exercise reasonable diligence in deciding whether any Minority Owner might reasonably have information relevant to any legitimate discovery request and to bring that information to the attention of the Board.18 While entities may delegate the job of answering interrogatories to others, whoever they select must " furnish such information as is available to the party" (emphasis added),
10 C.F.R. $ 2.740(b).11 B
TU Electric has endeavored conscientiously to fullfill its obligations regarding discovery.
As discussed above, it is currently investigating to ensure that it responded to Intervenors' discovery requests fully, thereby providing Intervenors with all relevant, non-privileged, responsive material and information known to TU Electric or to any of the other Joint Owners.
TU Electric began reviewing the l'
Lead applicants in licensing cases virtually always assume that function, see, n. 6, supra.
No one suggests the procedure is itself invalid.
11 Indeed, the interrogating party cannot complain about who that person is -- only if his answers are inadequate.
4A Moore, Federal Practice 1 33.07 at 33-46-47, (1984, 1987 Supp.)
> l
record of its historical discovery when Mr. Roisman first raised his concerns by letter.
Should it identify occasions upon which factual informationia possessed by the Minority Owners was not providad to Intervenors, TU Electric will make arrangements for it to be provided forthwith.
It is submitted that this commitment should adequately dispell Intervenors' concerns.13 C
Intervenors thus need not worry that their discovery has not or will not be fully answered.
Even if misgivings persist, moreover, ordering Minority Owners to obtain counsel would scarcely be the answer.
The fact is that no precedent exists for ordering an entity which allegedly failed to make discovery to change the nature and essential structure of its representation.
The reason is simple:
since parties, not their lawyers, bear the responsiblity for 12 See note 9, supra.
18 Of course, the NRC does not rely on Intervenors' discovery alone to make sure it receives all relevant, safety significant information.
Each Owner has an independent duty to report such information.
- See, e.g.,
Virginia Electric and Power Company (North Anna Power Station, Units 1 and 2), CLI-76-22, 4 NCR 480, 482 (1976) aff'd sub nom VEPCO v. NRC, 571 F.2d 1289 (4th Cir. 1978);
Duke Power Co. (William B. McGuire Nuclear Station, Units 1 and 2), ALAB-143, 6 AEC 623, 625 (1973).
fully answering discovery and for ensuring the answers disclose all information available to the parties, 10 C.F.R.
$ 2.740(b); 4A Moore, Federal Practice, 1 33.07 (1984, 1987 Supp.), such a " cure" would be completely unrelated to the "cause" for which it is sought.
II.
INTERVENORS' REPRESENTATION CONCERNS Intervenors also express the fear that the Minority owners are receiving inadequate representation before the Board and ask the Board to order the Minority Owners to obtain their own counsel.
Intervenors, however, lack standing to make such a request and, in fact, are aching the Board to resolve a dispute that is not ripe for adjudication.
At the outset, it should be noted that the Minority Owners employ lawyers to monitor the NRC proceedings and, when necessary, to make Special Appearances therein.
Accordingly, Intervenors' request that this Board order the Minority owners to obtain counsel must be considered moot --
or must be interpreted to ask the Board to order the Minority Owners to direct each of their counsel to submit a general appearance in the referenced dockets.
It will be assumed, for purposes of continuing this discussion, that Intervenors are making the latter request. -
Intervenors simply lack standing to make such a request.
A party may only seek relief if his own legal interests are adversely affected, not those of third parties.
Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804 (1985).24 The standing rules safeguard "the autonomy of those persons likely to be most directly affected by a judicial order."
Valley Forge Christian College v. American United, 454 U.S.
464, 473 (1982).
Among other things, they assure th'at adjudicatory bodies do not reorder people's lives according to a third party's view of what is "best" -- thereby perhaps contradicting what the party affected by their decision desires.
Id.
These principles demonstrate why Intervenors are not in a position to request relief regarding representation of their adversaries.
Intervenors, the only entities currently seeking relief from this Board, have no personal interest in which or how many lawyers may participate in these proceedings in support of the licensing of Comanche Peak.
The only personal interest Intervenors suggest they might have in the identity of the lawyers who may participate in the licensing of Comanche Peak relates to discovery, but, as 14 See also Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S.
252, 261 (1977); Craig
- v. Boren, 429 U.S.
190, 192 (1976). -
noted supra, those concerns will soon be allayed and are, in any event unrelated to representation issues.
The order Intervenors contend would be "best" would, moreover, dramatically alter the rights, relationships and liabilities of the only entities who do have a personal stake in the matter -- the Joint Owners.ts Those Owners are, however, fully capable of analyzing what is best for them and deciding for themselves how to handle any dispute over who should appear and in what role.
Each of the Joint Owners is represented by skilled legal counsel in their dealings with one another -- in and out of court.
- Indeed, at least two of those law firms have previously made special appearances before this Board on behalf of their Minority Owner clients.
It will be time enough to consider whether the Minority owners can and should have their counsel make 15 The Joint Ownership Agreement places full responsibility for obtaining a license on TU Electric.
The Minority Owners state that they will not release TU Electric from its responsibilities, and potential liabilities, under that Agreement.
On the other hand, the Minority Owners surely i
l owe TU Electric commensurate duties of cooperation and non-interference in its attempt to carry out those responsibilities of licensing leadership.
This Board must recognize that any entry into the areas to which the l
Intervenors' invitation extends could drastically disrupt these rights, which are very important to all the Owners and l
which are currently the subject of state court litigation l
between them.
Cf. Colorado River Water Cons. Dist. v.
U.S.,
j 424 U.S.
800, 817, 821 (1976) (federal court abstains from l
deciding matter pending in state court); Moses H. Cone Hospital v. Mercury Constr. Corp., 460 U.S.
1, 13-19 (1983)
(recognizing need for same)...
general appearances herein when and if one or more of the owners directly place the issue before the Board.18 Furthermore, Intervenors' request that the Board order the Minority owners to obtain lawyers and make a general appearance simply does not implicate a controversy which is yet ripe for adjudication.
"[R]ipeness is peculiarly a question of timing."
Regional Rail Reorganization Act, Cases, 419 U.S.
102, 140 (1974).
"[I]ts basic rationale is to prevent the courts, through premature adjudication, from entangling themselves in abstract disagreements."
Abbott Laboratories v. Gardner, 387 U.S.
136, 148 (1967).
See also Thomas v. Union Carbide Agr. Products Co.,
473 U.S. 568, 105 S.
Ct. 3325, 3334 (1985).
The foregoing rule and rationale squarely apply to this case.
The Minority Owners have not sought to make a general appearance, and, on its face, the Joint Ownership Agreement provides for adequate protection of the Minority-owners'
" interests" through TU Electric.
TU Electric and the 16 Even if Intervenors had standing to seek appointment of counsel for the Minority owners, this Board's power to act on the motion would be sharply circumscribed.
Private decisions on how interests are represented in litigation l
are, in all but the most exceptional circumstances, not to be disturbed by the adjudicating tribunal.
Sanders v.
Russell, 401 F.2d 241, 246 (5th Cir. 1968); United States
- v. Dougherty, 473 F.2d 1113, 1123-24 (D.C. Cir. 1972). :
s Minority owners have the same basic " interest" in this proceeding:
pursuant to a contract between themselves they all seek a license to operate Comanche Peak.
Under the Joint Ownership Agreement, TU Electric has been vigorously working to accomplish that objective, often with the aid of its agents, who naturally include licensing counsel.
The Joint Ownership Agreement expressly authorizes TU Electric to act on behalf of the Minority owners to obtain a license and gives TU Electric absolute control over and responsibility for the application process.
Joint Ownership Agreement, $$3.04, 5.02, 11.02.
Accordingly, TU Electric, advised by the Joint Ownership Committee, necessarily, finally and solely decides what legal arguments and strategies will be used to accomplish the Joint Owners' mutual " interest" in obtaining a license.27 The plenary nature of TU Electric's authority in areas generally 4
affecting the licensing of CPSES is confirmed rather than undermined by the fact that when the Minority owners' special and personal " interests" outside of the litigation 17 Since the Minority Owners granted TU Electric the power to act on their behalf in obtaining a license, TU Electric must exercise that power in good faith and in furtherance of the legitimate interests of all the Owners.
Texaco, Inc.
- v. Letterman, 343 S.W.2d 726, 732 (Tex. Civ. App. 1961).. -
have been implicated, the Minority owners, of course, appeared specially to protect those interests.18 The fact that Licensing Attorneys are TU Electric's agents, and accordingly have no attorney / client relationship with the Minority owners,1' is immaterial.
Courts honor, 18 Note that as a general proposition, because TU Electric is prosecuting the license application on behalf of the Joint Owners, the Minority Owners' " views" or opinions about what legal argument or tactics should be employed are irrelevant.
See n.9 and accompanying text.
Indeed, it is difficult to imagine a circumstance in which the possibility that some Owners might prefer one argument or tactic rather than another would permissably warrant a Board order instructi:
the dissident owners to file a general appearance, or to disclose their disagreement with tactics selected by entities the Owners have endowed with the responsibility to make such choices.
1' As an abstract proposition, an attorney has an
" attorney / client relationship" with a party if he is that party's " agent" under basic rules of agency law.
Capital Dredge and Dock Corp. v. City of Detroit, 800 F.2d 525, 530-31 (6th Cir. 1986); Brinkley v. Farmers Elevator Mut.
Ins.
Co.,
485 F.2d 1283, 1286 (10th Cir. 1973); Committee on Professional Ethics Grievances of Virgin Island, Bar Ass'n.
- v. Johnson, 447 F.2d 169, 174 (3d Cir. 1971); Hensley
- v. United States, 281 F.2d 605, 607 (D.C. Cir. 1960); Jensen v.
Snellings, 636 F.
Supp. 1305, 1311-12 (E.D. La. 1986);
Chrysler Credit Corp. v. Burton, 599 F.
Supp. 1313, 1318 n.10 (M.D.N.C.
1984); Dandorph v.
Fahnestock & Co.,
462 F.
Supp. 961 (D. Conn. 1979); Qualls v.
Field Enterprises Ed.
Corp., 302 F.
Supp. 152, 153 (E.D. Mo. 1969); 2 Meachum, Agency $2150 (2d Ed. 1914).
TU Electric's licensing attorneys are not, and cannot be, the Minority owners' agents.
An agency relationship can only exist if the
" Agent" acts on the " Principal's" behalf and subject to his control.
Restatement (2d) of Agency 551, 13, 14 and Comments on $9(1); 13, 14.
"It is the element of continuous subjection to the will of the principal which distinguishes the agent from the other fiduciaries and the agency I
\\,'
without qualm, arrangements in which some aspects of an entity's legal interests are protected by attorneys with whom they do not have an attorney / client relationship.
So, agreement from other agreements."
Id. Comment on 51(1).
Both contractually and under the common law, the Minority Owners do not " control" licensing counsel.
TU Electric selected and retained Licensing Counsel.
The Minority Owners never approved, nor were they required to approve, TU Electric's choice.
TU Electric directs the licensing counsel.
The Minority Owners have no power to review or countermand TU Electric's orders, Joint Ownership Agreement 553.04, 5.01, 11.02, nor have they ever attempted to do so.
Further, the Minority Owners cannot indirectly " control" the licensing counsel by " controlling" TU Electric.
TU Electric's power to control the licensing application is a
" power coupled with an interest;" the Minority Owners cannot revoke it.
It is a " power coupled with an interest" because:
(i) it is a power TU Electric held before selling 12 1/6% of its ownership share to the Minority Owners, and which TU Electric kept for itself, Day & Co.,'Inc.
- v. Texland Petroleum, Inc., 718 S.W.2d 384, 388-389 (Tex.
Civ. App. 1986); Allison v.
Smith, 278 S.W.2d 940, 945 (Tex.
Civ. App. 1955); and (ii) it is a power to act " accompanied by or connected with an interest in the property [i.e. the plant) subjected to the power," which TU Electric negotiated for, and parted with value, to receive, Superior Oil Co.
v.
Stanolind Oil & Gas Co.,
230 S.W.
2d 346, 352 (Tex. Civ.
App. 1950) affirmed 240 S.W.
2d 281 (Tex. 1951); Jones v.
Guy, 71 S.W.2d 913, 914 (Tex. Civ. App. 1934).
See also Zollar v. Smith, 710 S.W. 2d 155 (Tex. Civ. App. 1986).
The Licensing Counsel, as the agent of a holder of a power coupled with an interest, is not and cannot be the sub-agent of the grantor of that power.
Restatement (2d) Agency 514H; Sun Studs Inc. v. Applied Theory Associates, Inc., 772 F.2d 1557, 1568-69 (Fed. Cir. 1985); Levin v.
Ripple Twist Mills, Inc., 416 F.
Supp. 876, 885 (E.D. Pa. 1976), appeal dismissed, 549 F.2d 795 (3d Cir. 1977).
In addition, since the power was created by the Minority Owners for the benefit of a third party, TUElectric, TU Electric's agents cannot be the agents of the grantor of the power -- the Minority Owners.
Sun Studs, supra, 772 F.2d at 1568.
The Texas decision disqualifying Worsham, Forsythe is not to the contrary.
First, the Texas court has yet to explain the grounds for its decision.
Second, the Minority Owners contended in state court that an attorney can be for example:
the counsel hired by an inventor's company to patent the inventor's invention in the name of the inventor and the company need not have an attorney / client relationship with the inventor, Sun Studs, Inc. v. Applied Theory Associates, Inc., 772 F.2d 1557, 1568 (Fed. Cir.
1985); Lemelson v. Synergistics Research corp., 504 F.
Supp.
1164, 1166 (S.D.N.Y. 1981); Levin v. Ripple Twist Mills, Inc., 416 F. Supp. 876, 884-85 (E.D. Pa. 1976); a corporation may be represented by another corporation's counsel who has no attorney / client relationship with the first corporation, Allegaert v. Perot, 565 F.2d 246, 248 (2d Cir. 1977); and a union member may be, and usually is, represented in proceedings before the NLRB by an attorney who has an attorney / client relationship with the Union, not with the union member, Peterson v. Kennedy, 771 F.2d 1244, 1258-60 (9th Cir. 1985), cert. denied, 106 S. Ct. 1642 (1986).
Furthermore, a member's " interests" in a corporation or entity are often protected by attorneys who disqualified even if an attorney-client relationship did not exist, as when an appearance of impropriety exists or where a party believed, however mistakenly, that the attorney represented him.
It is, moreover, extremely important to note that current Licensing Counsel have repeatedly and firmly informed the Minority owners that they do not, and will not, have an attorney / client relationship with them.
A person assuredly cannot become another's agent if he expressly refuses to consent to the agency.
- See, e.g.,
Restatement (2d) of Agency $1(1). _ - - - -_.
have an attorney / client relationship with the entity, but who have no such relationship with the individual and, in fact, will act against the individual's interests if the entity orders them to.
Evans v. Artek Systems Corp., 715 F.2d 788, 792-93 (2d Cir. 1983) (corporation's attorney can act for " corporation" against wishes of some of corporation's shareholders); Lane v. Chowning, 610 F.2d 1385, 1389 (8th Cir. 1979) (same rule regarding corporate directors).
See generally, Note, " Developments In the Law
- Conflicts of Interest In the Legal Profession," 94 Harv.
L. Rev. 1244, 1334-49 (1981).
The foregoing precedents establish that the Intervenors' r.uggestion that there may be some inherent problem in the existing representation system is misplaced.
Intervenors' expression of concern, moreover, simply has not ripened into a case or controversy which this Board should accept.
Attempting now to decide whether the Minority Owners should, or can, make a general appearance would require this Board to consider an issue of sweeping import to Commission licensing proceedings in general and to this proceeding in particular.
Many jointly-owned nuclear plants are operated, and joint-ownership license applications prosecuted, under agreements similar to _
Comanche Peak's.28 If this Board attempts to reorder --
essentially sua sponte -- the Comanche Peak agreement, all similar agreements, and all the licensing decisions rendered 4
under them, may be open to question.
Worse, the assumption on which the NRC staff daily oversees operating plants would be undermined:
the Commission could no longer assume the i
commitments of the lead owner -- whether in resolving i
non-conformance reports or committing to a method of expanding a fuel storage area -- bind all the Joint Owners.
Such restructuring would also specifically and dramatically alter the present Joint Owners' expectations on how the plant is to be managed, as expressed in the contract the owners negotiated and the NRC approved.
Because Intervenors lack standing t'o make such a request, however, it is not necessary to argue the nuances of what the Joint Ownership Agreement means, whether and how it might be enforced, or what, if anything, might permissibly replace it.
It sufficies to emphasize that Intervenors' request unnecessarily implicates issues which directly and dramatically affect how the Joint Owners and l
the nuclear industry in general operate.
This Board should t
therefore abstain from involving itself in those issues unless and until they have hardened into controversy and a 4
28 See n.
6, supra.
i a
.,.-.._4
,y-,,,,,
party personally concerned demonstrates that this Board ought to resolve them.
III.
THE MINORITY OWNERS' VIEWS The Board requested that any filings in response to the Intervenors' motion include the separate views of the Minority owners.
Since the Minority owners have contractually endowed TU Electric with the right to speak for them, TU Electric might not normally file such views.
To help assuage the Board's expressed concerns, however, TU Electric has attempted to obtain and summarize the Minority owners' differing viewpoints on the legal issues covered by the motion.
We believe we are accurately recounting the Minority Owners' responses, but we caution that summarization always involves an element of condensation and simplification.
The Board should understand that the positions expressed by the Minority Owners were in fact multifaceted, complex and not always in apparent agreement with each other.
A i
The Minority Owners agree that, under the Joint Ownership Agreement, TU Electric has been given the authority to act for all the Joint Owners with respect to NRC licensing, and that, as Project Manager, TU Electric has.
.,,.,.-_,,.,__.,y-,------_,m---.
responsibility for and has exercised control of those proceedings.
They also agree with TU Electric that this combined duty and authority has conferred upon it the responsibility of ensuring that proper discovery is provided by all the Joint Owners in response to legitimate requests submitted by any other parties in the proceedings before the Commission.
They assert that they have relied upon the delegation of this duty to TU Electric in the past and that they are therefore not in a position to confirm or deny the Intervenors' premise that complete discovery --
i.e.,
including any supplementary information they may have possessed -- may not have been provided.
The Minority Owners also all acknowledge that TU Electric has selected, retained and controlled the counsel I
who have to date appeared generally in the licensing proceedings.
Nevertheless, they assert -- using various forms of analysis and argument -- that the counsel TU Electric has appointed either do, have or should represent the Minority Owners' " interests," as well as the Minority Owners as separate entities before the NRC.
Indeed, the Minority Owners urge that the lawyers TU Electric has selected and controlled as licensing attorneys had, have, or should have, an attorney / client relationship with the Minority owners..
E In view of the fact that those attorneys do not agree that they undertook to perform such a role, and would not accept it in the future under any circumstances, see n.
19, supra, the Minority Owners' view on the question of whether they desire or are willing to pursue some other arrangement is implicated.
Their views on this issue, however, are somewhat unclear.
While the Minority owners all assert that they are entitled to " representation," their views on the dimensions and theoretical implementation of that right are somewhat less coherent.
The Minority owners would apparently argue that licensing counsel selected by TU Electric must represent each of them, as individuals, and that counsel cannot act for the " Joint Owners" if any one owner vetoes any proposed action.
Their responses to our inquiries clearly reflect a collective assertion that the lawyers should act in accordance with what they divine to be the interests of all the owners and must behave neut-ally (i.e., do nothing?) if conflicts in those sources of guidance are perceived.
E With respect to the specific relief prayed for by the Intervenors' motion, the Minority owners have not pro /ided an entirely clear indication of their views.
Significantly, however, none has advised that they believe that the motion should be granted in any respect.
Rather, each of them has suggested that if the licensing attorneys TU Electric has retained are unwilling or unable to accept the Minority Owners' views of relationships under the Joint Ownership Agreement,at they may soon direct their own counsel to file (presumably general) appearances before the Commission.
In any event, no Minority owner believes that separate counsel should be " appointed" for it.
E It seems also appropriate to report that the Minority owners all assert that -- even if they eventually direct their legal counsel to seek to represent them in these proceedings -- TU Electric will nevertheless still have
" sole responsibility" for obtaining a license.
TU Electric has some difficulty understanding how these two sets of premises can coexist, or what role counsel representing the Minority Owners generally -- but not responsible for the outcome of the licensing process -- should or can be afforded before the Commission.
Such questions are, moreover, but another example of the complex issues this Board c aid be obligated to entertain if the representation 21 A situation which is clearly presented.
issue in fact ripens further and if it is brought before this Board by a party with standing to raise it.
Inasmuch as that is lacking today, however, the matter is appropriately left to another time (and perhaps another forum).
IV. CONCLUSION Intervenors invoked this Board's assistance on the ground that they are unsure whether all the discovery to which they were entitled has been provided.
Based upon these limited concerns regarding the adequacy of discovery, however, they suggest the Board consider entering extraordinarily broad orders which are unnecessary and completely unrelated to Intervenors' only legitimate concern.
We have committed herein to provide adequate evidence that the Intervenors' discovery rights have been observed.
Their other concerns are ones which they lack standing to advance.
The Board should therefore, for the reasons set forth hereinabove, table further action on the adequacy of., _.. _ - _ _ _ _ _.. _ - _ _ _ - _
9 9'
the past discovery responses, and reject as currently nonjusticiable the Intervenors' requests for other relief.
TEXAS. UTILITIES ELECTRIC COMPANY For the Owners of CPSES
\\
Thomas G. Dignan
'N Robert K. Gad III William S. Eggeling David A. Martland ROPES & GRAY 225 Franklin Street Boston, Massachusetts 02210 (617) 423-6100 Attorneys for Texas Utilities Electric Company 1
i CERTIFICATE OF SERVICE I, William S.
Eggeling, hereby certify that on April 16, 1987, I made service of the within document by mailing copies thereof, postage prepaid, to:
Peter B.
Bloch, Esquire Mr. James E. Cummins Chairman Resident Inspector Administrative Judge Comanche Peak S.E.S.
Atomic Safety and Licensing c/o U.S. Nuclear Regulatory Board Commission U.S. Nuclear Regulatory P.O.
Box 38 Commission Glen Rose, Texas 76043 Washington, D.C.
20555 Dr. Walter H. Jordan Ms. Billie Pirner Garde Administrative Judge Midwest Office 881 W. Outer Drive 3424 N. Marcos Lane Oak Ridge, Tennessee 37830 Appleton, WI 54911 Chairman Chairman Atomic Safety and Licensing Atomic Safety and Licensing Appeal Panel Board Panel U.S. Nuclear Regulatory U.S. Nuclear Regulatory Commission Commission Washington, D.C.
20555 Washington, D.C.
20555 Lawrence J. Chandler, Esquire Mrs. Juanita Ellis Office of the Executive President, CASE Legal Director 1426 S.
Polk Street U.S. Nuclear Regulatory Dallas, Texas 75224 Commission Washington, D.C.
20555 8%
da 93 a
$i::.
9:
au sw"v; o
13 di bJ b?.
Wm co i
Renea Hicks, Esquire Ellen Ginsberg, Esquire Assistant Attorney General Atomic Safety and Licensing Environmental Protection Division Board Panel P.O.
Box 12548, Capitol Station U.S. Nuclear Regulatory Commission Austin, Texas 78711 Washington, D.C.
20555 Anthony Roisman, Esquire Mr. Lanny A.
Sinkin l
Suite 600 Christic Institute 1401 New York Avenue, N.W.
1324 North Capitol Street Washington, D.C.
20005 Washington, D.C.
20002 Dr. Kenneth A. McCollom Mr. Robert D. Martin Administrative Judge Regional Administrator 1107 West Knapp Region IV Stillwater, Oklahoma 74075 U.S. Nuclear Regulatory Commission Suite 1000 611 Ryan Plaza Drive Arlington, Texas 76011 Elizabeth B. Johnson Geary S. Mizuno, Esq.
Administrative Judge Office of the Executive Oak Ridge National Laboratory Legal Director P.O.
Box X, Building 3500 U.S. Nuclear Regulatory Commission Oak Ridge, Tennessee 37830 Washington, D.C.
20555 Nancy Williams Cygna Energy Services, Inc.
101 California Street Suite 1000 San Francisco, California 94111 t
William S.
Egg ng
!