Citizens Awareness Network, Inc. v. U.S., 04-1145.

• Decision Date: 10 December 2004
• Docket Number: No. 04-1359.,No. 04-1145.,04-1145.,04-1359.
• Parties: CITIZENS AWARENESS NETWORK, INC., Petitioner, and National Whistleblower Center et al., Intervenors, v. UNITED STATES of America and United States Nuclear Regulatory Commission, Respondents, and Nuclear Energy Institute, Inc., Intervenor. Public Citizen Critical Mass Energy and Environment Program et al., Petitioners, v. United States of America and United States Nuclear Regulatory Commission, Respondents.
• Court: U.S. Court of Appeals — First Circuit

391 F.3d 338

CITIZENS AWARENESS NETWORK, INC., Petitioner, and National Whistleblower Center et al., Intervenors, v. UNITED STATES of America and United States Nuclear Regulatory Commission, Respondents, and Nuclear Energy Institute, Inc., Intervenor.

Public Citizen Critical Mass Energy and Environment Program et al., Petitioners, v. United States of America and United States Nuclear Regulatory Commission, Respondents.

No. 04-1145.

No. 04-1359.

United States Court of Appeals, First Circuit.

Heard September 13, 2004.

Decided December 10, 2004.

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Jonathan Mark Block for petitioner Citizens Awareness Network.

Stephen M. Kohn on brief for intervenors National Whistleblower Center and Committee for Safety at Plant Zion.

Michael T. Kirkpatrick, with whom Bonnie I. Robin-Vergeer and Scott L. Nelson were on brief, for petitioners Public Citizen Critical Mass Energy and Environment Program and Nuclear Information and Resource Service.

Thomas F. Reilly, Attorney General (Massachusetts), and Nora J. Chorover, Assistant Attorney General (Massachusetts), on brief for Massachusetts, California, Connecticut, New Hampshire, and New York, amici curiae.

Steven F. Crockett, Special Counsel, United States Nuclear Regulatory Commission, with whom Thomas L. Sansonetti, Assistant Attorney General, Greer S. Goldman and Lisa E. Jones, Attorneys, Environment and Natural Resources Division, United States Department of Justice, Karen D. Cyr, General Counsel, John F. Cordes, Jr., Solicitor, E. Leo Slaggie, Deputy Solicitor, and Shelly D. Cole, Attorney, United States Nuclear Regulatory Commission, were on brief, for respondents.

Ellen C. Ginsberg, with whom Robert W. Bishop and Michael A. Bauser were on brief, for intervenor Nuclear Energy Institute, Inc.

Before SELYA, LIPEZ and HOWARD, Circuit Judges.

SELYA, Circuit Judge.

Disenchanted with its existing procedural framework for the conduct of adjudicatory hearings, the Nuclear Regulatory Commission (NRC or Commission) promulgated new rules designed to make its hearing processes more efficient. These new rules greatly reduce the level of formality in reactor licensing proceedings but, at the same time, place certain unaccustomed restrictions upon the parties. The petitioners and petitioner-intervenors are public interest groups. Supported by the Attorneys General of five states (who have filed a helpful amicus brief), they claim that the new rules violate a statutory requirement that all reactor licensing hearings be conducted in accordance with sections 554, 556, and 557 of the Administrative Procedure Act (APA), 5 U.S.C. §§ 554, 556 & 557.¹ In the alternative, they claim that the Commission has not put forth an adequate justification for so substantial a departure from prior practice and that, therefore, the new rules must be set aside as arbitrary and capricious. Fully cognizant of the gravity of our task, we have studied the complex statutory and regulatory framework and scrutinized the plenitudinous administrative record. After completing that perscrutation and grappling with an antecedent jurisdictional question, we find that the new procedures in fact comply with the relevant provisions of the APA and that the Commission has furnished an adequate explanation for the changes. Consequently, we deny the petitions for review.

I. BACKGROUND

The NRC is the federal agency charged with regulating the use of nuclear energy, including the licensing of reactors used for power generation. See 42 U.S.C. § 2201. The Atomic Energy Act requires the Commission to hold a hearing "upon the request of any person whose interest may be affected," id. § 2239(a)(1)(A), before granting a new license, a license amendment, or a license renewal.

The NRC's predecessor agency, the Atomic Energy Commission (AEC), originally interpreted this provision as requiring on-the-record hearings in accordance with the APA. See Hearings Before the Subcommittee on Legislation, Joint Committee on Atomic Energy, 87th Cong. 60 (1962) (letter of AEC Commissioner Loren K. Olsen). These hearings closely resembled federal court trials, complete with a full panoply of discovery devices and direct and cross-examination of witnesses by advocates for the parties. Such hearings proved to be very lengthy; some lasted as long as seven years.

In 1982, the NRC relaxed its approach for certain types of licensing proceedings. See, e.g., In re Kerr-McGee Corp., 15 N.R.C. 232, 235, 1982 WL 31680 (1982) (determining that formal hearings are not necessary in materials licensing cases). Although the results were heartening, the Commission nevertheless retained the full range of trial-like procedures for reactor licensing cases. The passage of time brought further changes: faced with the prospect of hearings on many license renewal applications in the near future — a large number of reactors were initially licensed in the decade from 1960 to 1970 and the standard term for such licenses was forty years — the Commission began to reassess its adjudicatory processes, focusing particularly on the procedures used in reactor licensing cases. The NRC's issuance, in 1998, of a policy on the conduct of adjudicatory proceedings, 63 Fed.Reg. 41,872 (Aug. 5, 1998), marked the inception of this process. This policy statement reiterated the NRC's commitment to expeditious adjudication and urged hearing officers to employ a variety of innovative case-management techniques in order to improve hearing efficiency.

While encouraging better utilization of existing procedures, the Commission also began pondering possible procedural revisions. In January of 1999, the NRC's general counsel drafted a legal memorandum concluding that the Atomic Energy Act did not require reactor licensing hearings to be on the record and, accordingly, that the Commission had the option of replacing the existing format with a truncated regime. Later that year, the Commission held a widely attended workshop on hearing procedures. Building on this foundation, the Commission published a notice of proposed rulemaking on April 16, 2001, 66 Fed.Reg. 19,610, suggesting a major revision of its hearing procedures. In an accompanying statement, the Commission took the position that section 189 of the Atomic Energy Act, 42 U.S.C. § 2239, does not require reactor licensing proceedings to be on the record.

On January 14, 2004, the NRC published a final rule, along with a response to the comments that the proposed rule had generated. See 69 Fed.Reg. 2,182. With minor exceptions, the final rule replicated the proposed rule. The statement of considerations for the final rule reiterated the Commission's view that reactor licensing hearings may be informal.

The new rules took effect on February 13, 2004. Although they apply to all adjudications conducted by the NRC, the petitioners only challenge their application to reactor licensing proceedings. We therefore confine our ensuing discussion to that aspect of the new rules.

Under the old protocol, all reactor licensing hearings were conducted according to the procedures outlined in 10 C.F.R. part 2, subpart G. The subpart G rules resemble those associated with judicial proceedings.² They include a complete armamentarium of traditional discovery devices (e.g., requests for document production, interrogatories, and depositions). 10 C.F.R. § 2.705. The parties may make motions for summary disposition (although the hearing officer is not required to entertain them). Id. § 2.710. There is an evidentiary hearing at which testimony is presented through direct and cross-examination of witnesses by the parties. Id. § 2.711.

Under the new rules, reactor licensing hearings are, for the most part, to be conducted according to a less elaborate set of procedures described in 10 C.F.R. pt. 2, subpart L.³ The new subpart — which differs materially from the old subpart L — limns a streamlined hearing procedure. Unlike subpart G, subpart L does not provide for traditional discovery. 10 C.F.R. § 2.1203. Instead, parties in hearings governed by subpart L are required to make certain mandatory disclosures (akin to "open file" discovery) anent expert witnesses, expert witness reports, relevant documents, data compilations, and claims of privilege. Id. § 2.336.

The hearings themselves also differ. Under subpart L, the presumption is that all interrogation of witnesses will be undertaken by the hearing officer, not the litigants. Id. § 2.1207. Parties are allowed to submit proposed questions in advance of the hearing, but the presiding officer is under no compulsion to pose them. Id. Parties are not allowed to submit proposed questions during the hearing unless requested to do so by the presiding officer. Id. Cross-examination is not available as of right, although a party may request permission to conduct cross-examination that it deems "necessary to ensure the development of an adequate record for decision." Id. § 2.1204. A party seeking leave to conduct cross-examination must submit a cross-examination plan, which will be included in the record of the proceeding regardless of whether the request is allowed. Id.

The petitioners — we use that phrase broadly to include the petitioner-intervenors — took umbrage at these changes and brought these petitions for judicial review. Their primary claim is that the Commission erred in its determination that reactor licensing proceedings do not have to be fully formal adjudications. In their view, the new rules do not comply with the APA's requirements for on-the-record adjudication and, therefore, cannot stand. As a fallback, the petitioners assert that even if the new rules are not ultra vires, they must be set aside as arbitrary and capricious.

II. APPELLATE JURISDICTION

The parties have operated on the assumption that this court has first-instance jurisdiction to hear and determine their petitions for judicial review. We are not...