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To Be Argued By: RICHARD BRODSKY, ESQ In The
United States Court of Appeals
For the Second Circuit
RICHARD L. BRODSKY, New York State Assemblyman, From the 92ndAssembly District in His Official and Individual Capacities, WESTCHESTER'S CITIZENS AWARENESS NETWORK (WESTCAN), SIERRA CLUB - ATLANTIC CHAPTER (SIERRA CLUB),
PUBLIC HEALTH AND SUSTAINABLE ENERGY (Phase),
UNITED STATES NUCLEAR REGULATORY COMMISSION,
ENTERGY NUCLEAR OPERATIONS, INC.,
ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRlCT OF NEW YORK
REPLY BRIEF FOR PLAINTIFF-APPELLANTS
RlCHARD BRODSKY, ESQ.
Attorney for Plaintiffs-Appellants
2121 Saw Mill River Road White Plains, New York 10607 (914) 720-8830
TABLE OF CONTENTS
Table of Cases and Authorities Preliminary Statement. Argument.
1. The NRC Does Not Have The Legal Authority
To Issue The "Exemption" A. The NRC Does Not Have Explicit Statutory Authority To Issue The "Exemption" B. The NRC Does Not Have The Implied Authority To Issue The "Exemption" 1. The Canon of Construction" expressio unius est exclusio alterius Establishes That The AEA Did Not Grant The NRC An Implied Power To Issue The "Exemption" 2. Case Law And Commentary Establish That The AEA Did Not Grant The NRC An Implied Power To Issue The "Exemption"
3. The Leading Case On Implied Administrative Power To "Exempt", Alabama v Costle, Supports Plaintiffs' Position 6 II. The Record Before This Court Is Legally Inadequate III. The "Exemption" Violated The Binding Legal Requirements Of The NRC's Regulations A. The Required Finding That The "Exemption" Is "Authorized By Law" Is Legally Insufficient 7
B. The Required Finding That The "Exemption" Is "Consistent With The Common Defense And Security" Is Legally Insufficient
C. The Required Finding Of "Special Circumstances" Is Legally Insufficient.. 12 IV. The "Exemption" Process Failed To Provide For Public Participation Required By Law
A. The NRC Violated The AEA By Failing To Provide Any Opportunity For Public Participation 13 B. The NRC Violated NEPA By Failing To Provide Any Opportunity For Public Participation V. The NRC's Claim For Judicial Deference To Its Decisions And Actions Is Without Legal Merit.. VI. Conclusion
TABLE OF CASES AND AUTHORITIES
Alabama Power Co. v. Costie, 636 F 2d 323, (D. C. Cir. 1979) Baltimore Gas & Elec. Co. v. Natural Res. De! Counsel, Inc., 462 US 87, 103 (1983) Bethlehem Steel Corp. v. USE.P.A., 638 F3d 994, 1000 (7th Cir. 1988) Boudette v. Barnette, 923 F2d 754, 757 (9th Cir. 1991) Brodsky v. US NRC 1.,578 F3d 175 (2d Cir. 2009) Chevron USA, Inc. v. Echazabal, 536 US 73 (2002) Christensen v. Harris County, 529 U S 576, 596-597 (2000) Commercial Solvents Corp. v. Mellon, 277 F 548, 609 (1922) Continental Casualty Co. v. US, 314 U S 527,533 (1942) Cudahy Packing Co. v. Holland, 315 US 357 (1942) Edward's Lessee v. Darby, 25 U.S. 206 (1827) Florida Power & Light Co. v. Lorion, 470 US 729 (1985) Hanly v. Kleindienst, 471 F.2d 823 (2d Cir. 1972) Isbrandtsen Co., Inc. v. US, et al., 96 F. Supp. 883 (S.D.N.Y. 1951) M'Culloch v. Maryland, 17 U.S. 316 (1819) Motor Vehicles Mfrs. Ass 'n of 463 U.S. 29 (1983)
16 9 3 9, 14 3
5 3 5 .4 15 .15 9 2,4
v. State Farm Mutual,
Nat 'I Courier Ass 'n v. Bd of Governors of Fed. Reserve Sys, 516 F.2d 1229, 1241 (D.C. Cir. 1975)
New York v. NRC, 589 F.3d 551,555 (2d Cir. 2009) Osborn v. The Bank of the United States, 22 U.S. 738 (1824) Russello v. United States, 464 U.S. 16 (1983) Skidmore et. al. v. Swift & Co., 323 U.S. 134 (1944) Shoreham- Wading River Central School District v. NRC, 931 F.2d 102, 106 (D.C. Cir. 1991) Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735,741 (1996)
.l2 .l6,17 4,5 1, 16, 17, 18
us. v. Macdaniel,
32 U.S. 1, 1833 WL 4187 (1833)
United States v. Mead Corp., 533 US 218 (2001)
Felix Frankfurter, The Task Of Administrative Law, 75 U. Pa. L. Rev. 614, 616 (1926-1927) Graham Allison, Nuclear Terrorism: The Ultimate Preventable Catastrophe, Henry Holt and Company, LLC (2004) Hans 1. Morgenthau, Implied Limitations On Regulatory Powers In Administrative Law, Iowa Law Review Volume 28 Page 575 (1943).........
PRELIMINARY STATEMENT This Reply Brief is submitted after review of the NRC's Brief. It focuses on the disagreements set forth in the two Briefs. It contains an additional argument concerning the level of judicial deference, if any, to be applied to the NRC's various decisions and actions, because the NRC repeatedly misstates the law when it claims it is entitled to judicial deference to the substance and process used to grant the Indian Point "exemption". Plaintiffs ask this Court to carefully consider the holdings in United States v. Mead Corp., 533 US 218 (2001) which require that this Court show no deference to the NRC's decisions to issue the "exemption". With respect to jurisdictional statements, statement of facts, standard of review and other issues previously briefed, Plaintiffs draw the Courts attention to its earlier submissions. Plaintiffs seek the protection of this Court against NRC actions that are clearly arbitrary, capricious and abusive. To that end, we draw the Courts attention to a particularly unfortunate and inaccurate characterization of Plaintiffs position. On page 57 of its Brief the NRC calls Plaintiffs position "a generalized opposition to Indian Point operations". That is simply not the case. Plaintiffs have focused on the legal and factual errors made by the NRC as it secretly excused Entergy from compliance with an important fire safety rule. More importantly, Plaintiffs firmly believe that effective and transparent regulation of nuclear facilities is in the interest of both supporters and opponents of nuclear power. Those who wish to persuade the government that nuclear power is safe, secure and vital need a regulatory regime which is effective, trustworthy and enjoys the confidence of the public. In the wake of the Fukushima disaster and the failure of regulatory agencies to stem major financial disasters, it is unfair to characterize Plaintiffs as ideologues with an ax to grind. The exemption process used by the NRC cries out for correction and the application of the law. That is all Plaintiffs seek.
ARGUMENT I. The NRC Does Not Have The Legal Authority To Issue The "Exemption"
A. The NRC Does Not Have Explicit Statutory Authority To Issue The "Exemption."
There is no dispute about this matter. Plaintiffs assert, and the NRC concedes, that there is no language in the AEA explicitly granting to the NRC the authority to issue the "exemption." B. The NRC Does Not Have The Implied Authority To Issue The "Exem ption."
Absent such explicit language, the NRC asserts, and the District Court found, that the NRC has an implied power to issue the "exemption" contained in the general purposes of the AEA. "[T]he power to exempt is included in the broad power to regulate ..." Defendants' Brief at 26. It "inheres in its comprehensive statutory mandate to regulate the nuclear power industry.'" Defendants Brief at 20. Plaintiffs disagree. The broad purposes of the AEA, rules of statutory construction, and the case law and commentaries which consider when an implied power exists all refute the NRC claim. Attempts by federal bureaucracies to exercise powers not explicitly granted to them are as old as the Republic, and are carefully scrutinized to assure that the law and the public interest are preserved. "[T]he powers that are committed to these regulating agencies, ... carry with them great and dangerous opportunities of oppression and wrong. If we are to continue a government of limited powers, these agencies of regulation must themselves be regulated. The limits of their power over the citizen must be fixed and determined. The rights of the citizen against them must be made plain." Felix Frankfurter, The Task Of Administrative Law, 75 U. Pa. L. Rev. 614, 616 (1926-1927). From M 'Culloch v. Maryland, 17 U.S. 316 (1819) to this case, courts have struggled
The NRC and the District Court used the words "broad", "concomitant" or "inherent" power, all of which will be embraced by the use of the term "implied power" herein. See NRC Reply Brief at 22-24.
with claims of implied power, sometimes finding that they exist, sometimes not. It is a difficult line to draw, but there is ample precedent, ample analysis, and ample commentary on the question. In the absence of explicit authority to issue an exemption, the court must first look to the AEA. 1. The Canon of Construction" expressio unius est exclusio alterius" Establishes That The AEA Did Not Grant The NRC An Implied Power To Issue The "Exemption".
In its analysis of the ABA this Court is aided by a fundamental rule of statutory construction, expressio unius est exclusio alterius ("the express mention of one thing excludes all others"). "[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Russello v. United States, 464 U.S. 16, 23 (1983); See Boudette v. Barnette, 923 F.2d 754, 757 (9th Cir. 1991) ("This doctrine as applied to statutory interpretation creates a presumption that when a statute designates certain persons, things, or manners of operation, all omissions should be understood as exclusions.") See Continental Casualty Co. v. 314 U. S. 527, 533 (1942) ( "Where Congress explicitly enumerates certain exceptions to a general prohibition, additional exceptions are not to be implied, in the absence of evidence of a contrary legislative intent.")
In this case Plaintiffs and the NRC agree that the ABA contains a number of explicit textual grants of the power to issue exemptions which do not include the power to issue this "exemption". This would normally dispose of the question. (See Plaintiffs' Brief at 21-24) However, the NRC interposes a single objection to the expressio doctrine. The NRC asserts that it is inapplicable because "[t]he canon depends on identifying a series of two or more terms or things that should be understood to go hand in hand ...." Chevron USA, Inc. v. Echazabal, 536 US 73 (2002), adding that in this case " ...plaintiffs have not identified a series of terms and things that go hand in hand." Defendant's Brief at 28-29.
It is to some degree difficult to understand the point the NRC is trying to make, since it
is clear that Plaintiffs make repeated reference to "terms or things" which constitute various "exemptions". These references to "exemptions" go " hand in hand" as they
describe the Congressional intent to permit certain kinds of "exemptions" and not others. To the extent the Echazabal rule has any relevance to this case, Plaintiffs have certainly met its apparent requirement that statutory language refer to a "series" of things. 2 The NRC's attempt in its Brief to explain away the controlling force of expressio is weak and unpersuasive. In the absence of legislative history to the contrary, expressio is the only tool of construction available to this Court. The NRC may wish that the Court ignore expressio as it wrestles with the claim of an implied power. But it cannot have it set aside on the grounds that the AEA's references to "exemptions" are not a "series of two or more terms." Plaintiffs further note that expressio is a presumption, rebuttable by other evidence of Congressional intent. It is noteworthy that the NRC offers no such evidence including nothing from the legislative history. It instead rests its entire opposition on a flimsy and technical assertion about a requirement for a "series" of terms. If the NRC had evidence of Congressional intent to grant it an implied power of this magnitude it would have presented it.
2. Case Law And Commentary Establish That The AEA Did Not Grant The NRC An Implied Power To Issue The "Exemption"
Expressio is not the only canon of analysis available when deciding whether an administrative agency actually has an implied power. Cases and commentary both help guide decisions about implied regulatory powers. These canons of analysis go back to the earliest decisions of the Supreme Court. In four seminal cases, M 'Culloch v. Maryland, 17 U.S. 316 (1819); Osborn v. The Bank of the United States, 22 U.S. 738 (1824); Edward's Lessee v. Darby, 25 U.S. 206 (1827); and us. v. Macdaniel, 32 U.S. 1, 1833 WL 4187 (1833), the Court found that there were often times when such implied powers must adhere to the sound operation of government agencies. "Whilst the great outlines of its movements may be marked out, and limitations imposed on the exercise of its powers, there are numberless things which must be done, that can neither be anticipated nor defined, and which are essential to the proper action of the government. Hence, of necessity, usages have been established in Plaintiffs speculate that the NRC has not understood that the Supreme Court specifically found that the words "may include" in the Echazabal statute showed that the listed remedies there were not intended to be exclusive.
every department of the government, which have become a kind of common law, and regulate the rights and duties of those who act within their respective limits." MacDaniel at 3 (emphases added). Not all claims of implied power are supported by law, and many are rejected. In distinguishing between permissible and impermissible claims, the courts have worked out a set of rules which establish that the NRC has no implied power to issue the instant "exemption. " The seminal commentary on when an implied power may be legally granted to an administrative agency is an article by Hans 1. Morgenthau called "Implied Limitations On Regulatory Powers In Administrative Law." Hans 1. Morganthau, Implied Limitations On Regulatory Powers In Administrative Law, Iowa Law Review Volume 28 Page 575 (1943). Implied administrative powers do exist. "Yet as Congress holds delegated powers not expressly enumerated in the Constitution, so an administrative officer may have the authority to exercise delegated powers not expressly pointed out in the statute." Id at 600 "Since without those powers the agencies were unable to perform the functions for which they were created by Congress, it seems to follow from the general premises the doctrine of implied powers that they would enjoy those powers even in the absence of express congressional delegation." Id at 603 The implied power exists when " ... it is logically impossible_for the administrator to effectuate the policies and purposes of the Act .... " without it. Id at 608 (emphases added). This restatement of the MacDaniel rule has been adopted by courts. An agency administrator" has implied authority to interpret it, because that is necessary to the performance of his administrative duty." Commercial Solvents Corp. v. Mellon, 277 F. 548, 609 (1922) (Emphasis added). In Cudahy Packing Co. v. Holland, 315 US 357 (1942), the Supreme Court refused to approve a claim of implied power because "[w]e cannot assume that Congress was of the opinion that the present agency, when appropriately organized for the purpose, would be any the less able to function without the power" Id. at 367 (emphasis added). Implied powers are limited to those circumstances when the power is "necessary" or "essential" to carry out statutory duties, or its absence would make it "less able to function." In this case, the NRC has not and cannot assert those conditions. The NRC concedes and this Court recognized that the ABA gives the NRC ample procedures to adjust the fire safety rules, saying that "...little appears to distinguish an exemption from a [licensing] amendment" and that the "NRC could have alternatively treated the order as an amendment to Indian Point's license." Defendants' Brief at 49-50. This alternative
procedure obviates any claim that the exemption process was necessary to carry out the purposes of the ABA, or that the NRC was less able to function if it had used the amendment process.
3. The Leading Case On Implied Administrative Power To "Exempt", Alabama v Costle, Supports Plaintiffs' Position
The leading case analyzing an administrative claim of implied power is Alabama Power Co. v. Castle, 636 F. 2d 323, (D.C. Cir. 1979). It adopts the "necessity" test as the basis for finding that EPA had an implied power to issue exemptions. "This is not a case where Congress has crafted a specified set of measures to solve a problem, so that additional measures in agency-initiated rules can be deemed not "necessary." Id. at 367 "Considerations of administrative necessity may be a basis for finding implied authority for an administrative approach not explicitly provided in the statute. " Id. at 368. Alabama is the most thorough delineation of how a court should address a claim of implied power to exempt. In the end, the Court found two bases for such implied "exemptions", where "th[ e] exemption ... situation is genuinely de minimis or one of administrative necessity." Id. at 361. "Considerations of administrative necessity may be a basis for finding implied authority for an administrative approach not explicitly provided in the statute ...." Id at 358. (See Plaintiffs' Brief at 28-29 for a fuller analysis of Alabama). The NRC Brief does not contest the wisdom and thoroughness of the Alabama analysis. It instead attempts to distinguish Alabama on the grounds that it was analyzing an exemption from a statutory requirement while the Entergy "exemption" was to a regulatory standard. No reason is given for why the Alabama analysis is the wrong approach to a regulatory or any other kind of exemption. Nor does the NRC offer a substitute for how this Court should decide whether or not the AEA grants an implied power to exempt. The NRC's Brief repeats two slogans with no reasoning behind them: The implied exemption power is inherent in the statute, and that the NRC determination that it has such implied powers should be the subject of deference by this Court. Neither is sufficient. The text of the AEA does not grant such power. The text of the AEA does contain repeated use of the term "exemption", but not for the purpose of excusing a licensee from compliance with a fire safety regulation. When the canon of interpretation expressio unius est exclusio alterius is applied to the text of the ABA, it is clear that the NRC's claim of an implied power is flatly contradicted. Nor has the NRC
shown that an implied power of exemption is "necessary" for it to carry out its mandate; it is not logically "impossible" for the NRC to do its job without this exemption power. The leading cases, having considered these principles limit exemptions to cases of administrative necessity and de minimis effect. The NRC asserts neither as the basis for this "exemption". The AEA grants no implied power of exemption. The NRC's assertion that this Court must defer to its decision is similarly unfounded. As fully argued below on page 15, below, the NRC is not entitled to any deference with respect to a decision which was taken in secret, not the subject of notice-and-comment process, excluded the public at every step, and resulted from a disastrously limited Record.
II. The Record Before This Court Is Legally Inadequate
Plaintiffs and the NRC are in agreement about the timing and contents of the Record. In 2008, after commencement of litigation, NRC staff compiled a list of 31 documents. The NRC has repeatedly stated that this is the "... list of documents that they reviewed in considering the exemption application, whether favor or unfavorable to the grant of the exemption .... meaning any document they looked at in connection with the exemption request, whether or [not]they relied upon the document.. .."(emphases in original) Letter from Robert Rader, July 22, 2008, JA-1 060. Of these 31 documents two are the "exemption" itself and the Environmental Assessment'; five are letters to and from Susan Shapiro, Esq.4 related to a citizen petition seeking a hearing on the "exemption,"? while nineteen documents are technical notices and letters transmitting and requesting information. Of these, fifteen are dated prior to the date on which Entergy submitted its request for the "exemption". Four are dated after the submission of the request. 6 The remaining five documents contain substantive information or analysis about the proposed "exemptions."? Those five
Documents 1 and 2 in the Certified Index. Ms. Shapiro served as co-counsel at earlier stages of the administrative process litigation. Documents 3, 4, 5, 6 and 7 Documents 8,9, 10, 19,20,21,22,23,24,25,26,27,28,29 and 31 pre-date request for the "exemption". Documents 12, 13, 18 and 30 post-date the request the "exemption" but are either requests for additional information, letters from NRC to Entergy, or the text of NRC regulations. Document 11, the 2006 Entergy request for the exemption (18 pages); Document
the for the 14,
documents total sixty-one pages. Those sixty-one pages are the entire substantive and analytic Record upon which the NRC decided to grant the "exemption" to the fire safety rule." In their respective Briefs, Plaintiffs and Defendants disagree about the legal and factual adequacy of the Record. Plaintiffs assert that the NRC had at least another two dozen documents in its possession that are demonstrably relevant and probative, name those documents and explain their relevance. Plaintiffs have repeatedly contended that the law requires the NRC to consider any "evidence" in its possession that is relevant and probative." The NRC counters by asserting that it has the unfettered power to make the Record, that the Record contains the documents that it actually considered, and that Plaintiffs have no legal right or basis for seeking consideration of other evidence. There is considerable confusion about the requirement to consider relevant evidence. Plaintiffs assert that the NRC could not legally ignore relevant evidence, although it has the responsibility to make the initial relevance determination. Plaintiffs point out that the NRC has never stated that it made a reasonable effort to identify and consider relevant evidence in its possession. It repeatedly insists that it is required to include in the Record only that which it actually considered. The NRC suggests that Plaintiffs seek to place an impossible burden on the NRC by requiring exhaustive review of millions of documents. That is not Plaintiffs position. We assert only that the NRC was required to make a reasonable, good faith effort to see what evidence it already possessed that would bear on the issues of public safety that it was deciding. This responsibility is of even greater import because the public was kept in the dark about the process, excluded from participation, and therefore unable to bring to the attention of the NRC relevant evidence which might have affected the result. The legal standard that the NRC must observe and the case law are clear. "[A]ny document that might have influenced agency's decision is "evidence" within meaning of 28 U.S.C. § 2112(b) and Federal Rules of Appellate Procedure, Rule 16." Nat'f Courier the 2007 Entergy response t the NRC's request for additional information (7 pages); Document 15, the second Entergy response to the NRC's request for additional information (10 pages); Document 16, the 2007 Entergy submission of supplemental information ( 11 pages); and Document 17, a 2007 NRC internal memo containing information about fire safety (15 pages). The NRC also claims to have reviewed and relied on an additional and very important document, the Fire Hazards Analysis. That document is not in the Record and the NRC now admits it has never possessed it. This matter is more fully argued on page 12 below. The facts and the cases governing this issue are set forth in Plaintiffs Brief at 30-38.
Ass'n v. Bd. of Governors of Fed. Reserve Sys., 516 F.2d 1229,1241 (D.C. Cir. 1975). "The Record on Review is intended to make available to the Court and the parties all documents in the possession of the agency that were considered or should have been considered. Bethlehem Steel Corp. v. US.E.PA., 638 F.3d 994, 1000 (7th Cir. 1988). 10 The NRC's Brief offers two defenses It characterizes Plaintiffs' legal argument as a" ... bare and unsupported assertion that certain vaguely identified documents were relevant." Defendants Brief at 42. This defense falls for two reasons. One, Plaintiffs were not "vague". The documents were specifically identified and their relevance established. Two, Plaintiffs offered the documents to establish that the NRC should have made its own determination of relevance. The NRC concedes that it never even "looked" at them (see Rader letter JA-I060) much less made a relevancy determination. The issue for decision by this Court is clear. Was the NRC required to make a good faith and reasonable effort to locate and consider relevant and probative material in its possession? It was. Did it do so? It did not. The legal inadequacy of the Record is most strikingly illuminated by the case of the mysterious missing document, the Fire Hazards Analysis referenced and relied on in the text of the "exemption." The NRC clearly believes the document is relevant. 11 However, it is not in the Record. Any reasonable effort to find relevant evidence would have led the NRC to find the Fire Hazards Analysis. It made no such effort. "The agency must always act upon the record made, and if that is not sufficient, it should see the record is supplemented before it acts. It must always preserve the elements of fair play, but it is not fair play for it to create an injustice, instead of remedying one, by omitting to inform itself and by acting ignorantly when intelligent action is possible." Isbrandtsen Co., Inc. v. u.s., et ai, 96 F. Supp. 883, 892 (S.D.N.Y 1951). Plaintiffs bring the Court attention to two of the twenty-three relevant and probative documents that should have been part of the Record, the Shutdown Analysis and the Licensee Event Reports. "Safe Shutdown Analysis" establish[ es] the acceptable NRC procedure for safe shut down in case of fire, the amount of time electric cables need to survive in a fire, the consequences of failure, and whether or not the NRC has reviewed, evaluated, tested, and/or approved the safe shutdown analysis for prior or current licensee prior to granting
This dispute was extensively briefed by the parties at every stage of the litigation, including a Motion To Supplement And Correct The Record in Brodsky v. us. NRC 1., 578 F.3d 175 (2d Cir. 2009), which was decided by this Court. That Motion was left undecided when this Court declined Hobbs Act jurisdiction. For a complete discussion of this issue see page 12, below.
the exemption. "Licensee Event Reports" contains information about Fire Protection Systems, fire related events, or changes to operational modes made as a result of a potential nonoperational system related to fire protection; [and] provide accurate information about fires that occurred at Indian Point Unit facilities to establish whether the inspection was considered, relied on, submitted to the NRC for consideration, and/or confirmed by physical inspection by NRC staff in reviewing and granting the exemption." (JA at 513 et. Seq.) These two documents mayor may not have persuaded the NRC to deny Entergy's request for the "exemption." But the failure to "look" at, or to consider, or to include them in the Record violates the clear commands of law that an administrative agency make every reasonable effort to inform itself before it decides a question. This Court should invalidate the "exemption" because the NRC failed to identify and consider all relevant and probative materials in its possession, as required by law.
III. The "Exemption" Violated The Binding Legal Requirements Of The NRC's Regulations.
Plaintiffs have established that the NRC violated the binding requirements of 10 C.R.F. § 50.12 three times, which invalidates the "exemption." Plaintiffs and the NRC agree that the NRC is required to make specific Findings that the "exemption" is " authorized by law", is "consistent with the common defense and security", and that "special circumstances" are present. See Plaintiffs' Brief at 38, and Defendants' Brief at 39.
A. The Required Finding That The "Exemption" Is "Authorized By Law" Is Legally Insufficient.
With respect to the NRC Finding that the "exemption" is "authorized by law, the only
mention of this issue in the Record is the Finding itself. "The NRC staff has determined
that granting of the licensee's proposed exemption will not result in a violation of the Atomic Energy Act of 1954, as amended, or the Commissions regulations. Therefore, the exemption is authorized by law." (JA at 514).
First, the Record is completely devoid of any discussion, analysis, evidence or document concerning whether the "exemption" is authorized by the AEA. There is simply nothing in the Record or elsewhere that satisfy the legal requirement that the NRC "offer a 'rational connection between the facts found and the choice made. '" Motor Vehicle Mfrs. Ass 'n. of us. v. State Farm Mutual, 463 US 29, 43 (1983). The NRC did nothing other than print unsupported, circular, self-serving and arbitrary sentences. Second, the Finding is facially defective because it limits itself to a declaration of legality with respect to the AEA only. The Finding does not mention any other law including the APA or NEPA both of which are integral to the legal sufficiency of the 'exemption", and both of which it extensively briefs. It admits that it is required to make a Finding that " ...the exemption not violate any law." Defendants Brief at 37. Even by that self-serving standard, the NRC failed, arbitrarily limiting its Finding to one law, not "any" law. For these two reasons, the Finding that the "exemption" is "authorized by law" is legally insufficient and the "exemption" must be invalidated.
B. The Required Finding That The "Exemption" Is "Consistent With The "Common Defense And Security" Is Legally Insufficient
With respect to the Required Finding that the "exemption" is "Consistent With The Common Defense and Security" the NRC did the same thing it did with respect to "Authorized By Law". The sole and only mention of this issue in the "exemption" or in the Record is the assertion that "[t]his change to the plant requirements ...has no relation to security issues." This is nonsense. The literature and public concern about threats to our common defense and security that could cause a fire at Indian Point are enormous and growing. In the widely acclaimed book called "Nuclear Terrorism: The Ultimate Preventable Catastrophe," by Graham Allison, the depth of concern about Indian Point is outlined at length. Graham Allison, Nuclear Terrorism: The Ultimate Preventable Catastrophe, Henry Holt and Company, LLC (2004). "When Secretary of Homeland Security Tom Ridge is asked about what he worries about when he wakes up at night, he answers in one word: "nuclear" ....like attacks on nuclear power plants ....The American Airlines flight that hit the North Tower of the World Trade Center could just as readily have hit the Indian Point power plant.. .. The resulting fire would spew radioactivity into the
environment in amounts that could reach three or four Chernobyls." Id. at 6-8. Plaintiffs do not offer this excerpt to prove the fire safety consequences of threats to our common defense and security. It is offered to establish only that the NRC was required to undertake some analysis, to consider some evidence, to bestir itself to some reasonable extent before it announced that the "exemption" has "no relation" to issues of common defense and security. The only defense of its inaction offered by the NRC in its Brief is a citation to language from the Shoreham- Wading River Central School District v. NRC, 931 F.2d 102, 106 (D.C. Cir. 1991) case asserting that this concern "appears nil", and that the NRC is not required "to address every conjectural objection." Defendants Brief at 38. The Shoreham case was decided in 1991, ten years before the attack on the World Trade Center on September 11, 2001 and twenty years before the catastrophe at Fukushima. The widespread concerns expressed by former Secretary Ridge and the citizens living near Indian Point, are not "conjectural. The Finding that the "exemption" is consistent with the "common defense and security" is legally insufficient and the "exemption" should be invalidated.
C. The Required Finding That "Special Circumstances" Are Present Is Legally Insufficient
Plaintiffs and the NRC agree that the required Finding refers to a document entitled the "Fire Hazards Analysis". The NRC asserts in its Brief that this is a "passing reference" in a "one- sentence summary". It is in fact the actual Finding itself, the words put into the "exemption" to satisfy the regulatory requirement. See JA at 515. The NRC attempted to minimize this fatal defect by offering testimony by counsel at the District Court hearing, an impermissible act. In its' Brief it again asserts that the information in the Fire Hazards Analysis was considered. How does the NRC know what information is in the Fire Hazards Analysis if it never possessed it and never "looked" at it? How can it aver that it considered information if it doesn't know what is in the document? The NRC simultaneously claims it considered the information in a document it doesn't possess, minimizes its importance and refuses to include it in the Record. This is the height of abusive, arbitrary and capricious behavior. The required Finding that there are "Special Circumstances" is legally insufficient and the "exemption" should be invalidated.
IV. The "Exemption" Process Failed To Provide For Public Participation Required By Law
Plaintiffs and the NRC are in agreement that there was no public notice, no opportunity for public comment, or any form of public participation including a public hearing concerning the "exemption." Plaintiffs contend that under the AEA, APA and NEPA they had a legal right to each and all of these forms of public participation. The NRC contends it had no legal obligation to provide them, and where it had discretion it correctly denied Plaintiffs requests.
A. The NRC Violated The AEA By Failing To Provide Any Opportunity For Public Participation With respect to the AEA, the NRC takes the position that the only public participation requirement is that contained in 42 U.S.C. §2239, which " ... does not mention exemptions," and for that reason no hearing is required. Defendants' Brief at 48. Exemptions "...are not within the textual scope of §2239 ..." Accordingly, the NRC is not obligated to provide an opportunity for a hearing. Defendants Brief at 51. The NRC's argument could not be more simple or clear. Because the black letter of the text of the AEA does not mention exemptions, the law does not require them. If the NRC was willing to have that standard govern the case, its positions would have the virtues of certainty and consistency. The NRC however does not take that position. For the purpose of justifying its claim to an implied power to exempt, the NRC insists on a broad, liberal construction of the AEA, pointing to its broad purposes as the legal basis of its implied power. "[T]he power to exempt is included in the broad power to regulate." Defendants Brief at 26. This places the Plaintiffs, and the public generally, in a completely untenable position. The NRC asserts a broad, implied power to change safety rules in secret. But it relies on the text of the AEA to justify its refusal to provide any form of public notice, comment or participation. This is the height of arbitrary and capricious administrative action, and an abuse of discretion. The NRC takes two different and mutually exclusive positions,
the only consequence of which is the denial of the public's right to know and participate.
The courts of this country were empowered to stop this kind of abusive administrative action. "The limits of their power over the citizen must be fixed and determined. "The use of the administrative discretion must meet the test of reasonableness and fairness
from the point of view of the purposes and policies of the statute .... Whenever there is an implied grant of power, there must be also an implied limitation of the power granted. Morgenthau, Implied Limitations On Regulatory Powers In Administrative Law, at 612. The inconsistency and arbitrariness of the NRC's position is illuminated by their selective application of the language of 42 U.S.C. §2239 itself. The caption of §2239 reads "42 USC § 2239 - Sec. 2239. Hearings and judicial review." (emphasis added) The NRC cites §2239 silence on exemptions as invalidating Plaintiffs claim to a hearing. But §2239 also contains the same silence with respect to judicial review: "The following Commission actions shall be subject to judicial review in the manner prescribed in chapter 158 of title 28 and chapter 7 of title 5: (1) Any final order entered in any proceeding of the kind specified in subsection (a) of this section. ,,12 Surely the NRC ought to be held to a consistent interpretation of the scope of §2239. If §2239's silence with respect to exemptions saves the NRC from a required hearing, it logically should save it from the irksome consequences of judicial review of exemptions. Yet it makes no claim that judicial review is not provided for by the AEA. The inconsistent application of the language of § 2239 further illuminates the arbitrary, capricious and abusive nature of the NRC's position. Plaintiffs assert that if §2239 is read literally with respect to the public hearing requirement than it must be read the same way with respect to the putative power to exempt and the power of judicial review. The final responsibility to ensure consistent and fair application of §2239 rests with this Court. The NRC also contends that the question of whether a hearing is required has been determined with finality by this Court in Brodsky v. NRC 1., 578 F.3d at 175. "As the district court held, this Court has "decided this issue" in dismissing the prior petition for review." Defendants Brief at 48. That argument is based another selective reading of case law and this Court's opinion. This Court explicitly stated that it made no decision on the matter. "Finally, because we lack jurisdiction, we also express no opinion as to whether the NRC's hearing denial was proper, whether the exemption at issue is arbitrary and capricious, or the other issues raised by Petitioners. We hold only that Petitioners are indeed challenging an exemption, and that exemptions cannot be reviewed under the Hobbs Act." Brodsky v. NRC 1., 578 F.3d at 183-413. The question of 42 U.S.C. § 2239 references are to the statutes popularly known as the Hobbs Act and the Administrative Procedures Act. "This explicit statement is backed by sound doctrine set forth by the Supreme Court in Florida Power & Light Co. v. Lorion, 470 US 729 (1985).
whether the NRC can avoid the ABA's public participation requirements before this court.
B. The NRC Violated NEPA By Failing To Provide Any Opportunity For Public Participation
Plaintiffs also seek a public hearing under NEPA.14 The Briefs differ on this issue. NEPA provides for a hearing where there exists a "substantial environmental controversy" or "substantial interest" in a hearing. 40 C. F.R. § 1506.6( c)( 1). Plaintiffs point to and have submitted evidence of deep public concern about the NRC's failure to require adequate fire safety, including a public hearing held by the Congress on the issue. See Plaintiffs Brief at 52. The NRC wrongly characterizes Plaintiffs evidence as "a generalized OPPOSItIonto Indian Point operations rather than anything to do with the narrow issue of the fireprotection exemptions being considered by the NRC." Defendants' Brief at 57. That is simply untrue. The NRC's assertion that the public never raised concerns about the "exemptions" is a staggering assertion of bureaucratic arrogance. The NRC chose to conduct its "exemption" process in complete secrecy. Its very existence was withheld from the public. No one except the NRC and Entergy knew of the existence of the "exemption" process until after it was concluded. Having intentionally kept these facts from the public, the NRC now baldly complains that the public showed no interest or concern in the "narrow issue of the fire-protection exemptions." Legal reasoning and the language of court submissions are inadequate to confront this kind of bureaucratic behavior. Logic alone would require that the NRC at least have notified the public before being permitted to accuse it of lethargy and disinterest. (See Hanly v. Kleindienst, 471 F.2d 823, 836 (2nd Cir. 1972) ("before a preliminary or threshold determination of significance is made the responsible agency must give notice to the public of the proposed major federal action and an opportunity to submit relevant facts which might bear upon the agency's threshold decision") It is the height of arbitrary, capricious and abusive behavior to permit the NRC to engage in this kind of Alice-in- Wonderland logic. There was in fact substantial interest and substantial controversy about this issue. To the extent that the NRC wishes to place the burden on Plaintiffs to show such interest and controversy they have done so. NEPA affords them the right to a public hearing and this Court should so require.
Although briefed and argued the District Court made no decision on this issue.
The NRC's Claim For Judicial Deference To Its' Decisions And Actions Is Without Legal Merit.
At its heart the argument made by the NRC in support of the "exemption" has two prongs. First, the implied power to issue an "exemption" is broad and inherent in the purposes of the AEA. The NRC never explains why the power to issue exemptions is inherent and necessary, and dismisses other judicial efforts at distinguishing between legitimate and illegitimate assumption of implied powers. The reason the NRC does not explain the merits of the implied power to exempt is found in the second prong of its argument. The NRC repeats in this case, as it does in every judicial controversy, that its decisions are entitled to what it repeatedly calls" a high level of deference" (Defendants' Brief at 3) and that courts are to be "highly deferential" (Id at 31) "most deferential" (Id at 32) "duly deferential" (Id at 54) and "especially deferential" (Id at 57) when it comes to review of NRC actions. The truth is much more complicated, and essential to understanding why this Court should invalidate the "exemption". The appropriate level of deference to be accorded to the NRC, if any, varies with the kind of decision it makes and the procedures it employs to make them. The Courts have accorded the highest level of deference ("Chevron deference") to the "kind of scientific determination[ s]" made by the NRC in regulating nuclear power plants. Baltimore Gas & Elec. Co. v. Natural Res. De! Counsel, Inc., 462 U.S. 87, 103 (1983); accord New York v. NRC, 589 F.3d 551, 555 (2d Cir. 2009). But any deference claim is to be scrutinized, and courts often accord no deference or significantly less deference, according to the type of action and the procedures used. In United States v. Mead Corp., the Supreme Court set forth standards for deciding an agency's claim of deference. Deference is accorded only to actions which result from " ...a relatively formal administrative procedure tending to foster the fairness and deliberation that should underlie a pronouncement of such force. Mead, 533 U.S. at 229; Cf. Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735,741 (1996) (APA notice and comment "designed to assure due deliberation"). Thus, the overwhelming number of our cases applying Chevron deference have reviewed the fruits of notice-and-comment
rulemaking or formal adjudication." Mead, 533 U.S. at 230.
Three factors must be present if deference is to be accorded to an administrative action. First, the administrative action was pursuant to an express grant of authority explicitly
set forth in the statute. "We have recognized a very good indicator of delegation meriting Chevron treatment in express congressional authorizations." (Id at 229) Ambiguities are resolved against Chevron deference. "See also Christensen v. Harris County, 529 U. S. 576, 596-597 (2000) (Breyer, J., dissenting) (Breyer J. dissenting) (where it is in doubt that Congress actually intended to delegate particular interpretive authority to an agency, Chevron is "inapplicable")." Mead, 533 U.S. at 230. Second, the procedures used by the administrative agency were open to the public, subject to scrutiny and participation, and capable of eliciting evidence that the agency was bound to consider. Such proceedings are" ... preceded by notice and comment as under the Administrative Procedure Act." Id at 226. To qualify for any deference the ruling must be product of "a relatively formal administrative procedure tending to foster the fairness and deliberation that should underlie a pronouncement of such force. Cf. Smiley" 517 U. S. At 741 (APA notice and comment "designed to assure due deliberation"). Mead, 533 U.S. at 230. Thus, the overwhelming number of our cases applying Chevron deference have reviewed the fruits of notice-and-comment rulemaking or formal adjudication." Id at 230. Third, the action must bind third-parties, it must have force beyond the agency and the interested party. It must " ...naturally bind more than the parties to the ruling ...." (Id at 232 ) and is "..intended to clarify the rights and obligations of [parties] beyond the specific case under review." Id at 226 Where an actions' " ...binding character as a ruling stops short of third parties;" no deference is due. Id at 233. The action of the NRC in granting the "exemption" in this case fails to meet any of these three requirements. First, the NRC's exemption power is not granted by explicit statutory language, which the NRC concedes. (The NRC's implied power to issue the exemption "inheres in its comprehensive statutory mandate to regulate the nuclear power industry." ( Defendants' Brief at 20)). Second, the procedures used were secret, and no notice-and-comment opportunity or formal proceeding took place. The Record is clear that the NRC did not provide any public notice, any opportunity for public comment or participation, any public hearing, conducted the entire process in complete secrecy, and compiled a record that excluded relevant evidence. The NRC did nothing to " ...foster the fairness and deliberation that should underlie a pronouncement of such force." Mead, 533 U.S. at 230. Third, the "exemption" is intended to be and is in fact binding only on the NRC and Entergy. This "exemption" does not bind any other licensee. No third party is subject to
its' terms and conditions. The fire safety "exemption" therefore fails all three requirements for deference and is entitled to none. The Supreme Court has instructed that the NRC's actions must rise or fall on their legal and evidentiary merits as determined by the courts. As set forth in Plaintiffs' submissions, the "exemption" fails to meet these standards. In Mead the Supreme Court did consider a hybrid form of deference, as described in Skidmore et. al. v. Swift & Co., 323 U.S. 134 (1944). This significantly reduced form of deference is based on the logic and persuasiveness of the action. "The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." Skidmore at 140. Plaintiffs assert that the NRC's actions in issuing this "exemption" were so secretive, so exclusionary of public participation, so arbitrary in its exclusion of relevant evidence, so facially defective and so violative of its own regulatory mandates that it is not entitled even to limited Skidmore deference. No better example of administrative overreach could be constructed, and no better vindication of the Supreme Court's insistence that the courts "say what the law is." Under Mead no deference is due to the NRC's "exemption" decision, and the "exemption" should be invalidated by this Court based upon its own reading of the law and facts.
For the reasons set forth in Plaintiffs' Brief and Reply Brief, this Court should find and determine that the "exemption" issued by the NRC is legally insufficient and invalid.
Respectfully Submitted, Richard Brodsky, Esq. Counsel for Plaintiffs-Appellants Dated: December 28,2011