People of State of Ill. v. Nuclear Regulatory Com'n

• Decision Date: 08 February 1979
• Docket Number: No. 78-1171,78-1171
• Citation: 591 F.2d 12
• Parties: , 9 Envtl. L. Rep. 20,100 PEOPLE OF the STATE OF ILLINOIS, Petitioner, v. NUCLEAR REGULATORY COMMISSION and the United States of America, Respondents, and General Electric Company, Intervenor.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 12

591 F.2d 12

12 ERC 1652, 9 Envtl. L. Rep. 20,100

PEOPLE OF the STATE OF ILLINOIS, Petitioner, v. NUCLEAR REGULATORY COMMISSION and the United States of America, Respondents and General Electric Company, Intervenor.

No. 78-1171.

United States Court of Appeals Seventh Circuit.

Argued Nov. 3, 1978.

Decided Jan. 10, 1979.

As Amended Feb. 8, 1979.

Russell R. Eggert, Asst. Atty. Gen., Chicago, Ill., for petitioner.

Richard S. Mallory, U. S. Nuclear Reg. Comm., Washington, D. C., for respondents.

Before SPRECHER, BAUER and WOOD, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

On September 16, 1977, the Attorney General of Illinois filed with the Nuclear Regulatory Commission a "Request to Institute a Proceeding and Motion to Modify, Suspend or Revoke Special Nuclear Material License, No. SNM-1265." ¹ Approximately three months later the Director of the NRC's Office of Nuclear Material Safety and Safeguards denied the request. ² Illinois petitioned for review of the final order of the Commission and the two issues presented are (1) whether the Commission has the discretion to deny a request to institute a proceeding and hearing under the Atomic Energy Act of 1954 (Act), and (2) whether the Commission's denial of the request was arbitrary and capricious. We affirm the Commission.

I.

According to the Act from which the Commission derives its authority, Illinois has no right to a hearing. Section 189(a) of the Act, 42 U.S.C. § 2239(a), provides in part:

In any proceeding under this Act, for the granting, suspending, revoking, or amending of any license . . . the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding, and shall admit any such person as a party to such proceeding.

This section requires the NRC to hold hearings only after a formal proceeding has already begun, and petitioner concedes as much. ³ As there was no proceeding in this case and as the Act contains no provision for a hearing when no proceeding has been commenced under this section, the state is clearly without a right to a hearing.

Contrary to petitioner's contention the Administrative Procedure Act does not require the NRC to hold a hearing. The provision of the APA requiring hearings applies only to agency action which, according to that agency's governing statute, must be preceded by a hearing. Robertson v. Federal Trade Commission, 415 F.2d 49 (4th Cir. 1969); LaRue v. Udall, 116 U.S.App.D.C. 396, 324 F.2d 428 (1963). See also Camp v. Pitts, 411 U.S. 138, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). The fact that the Atomic Energy Act does not require a hearing thus renders the hearing requirements of the APA inapplicable.

The Commission's own regulations, which set forth the procedures to be followed by the Commission in responding to enforcement requests such as this one by the state, are reasonable and consistent both with Section 189(a) of the Atomic Energy Act and Section 555(e) of the Administrative Procedure Act. Thus we regard the administrative interpretation as controlling. Northern Indiana Public Service Co. v. Porter County Chapter of the Izaak Walton League of America, 423 U.S. 12, 96 S.Ct. 172, 46 L.Ed.2d 156 (1975). Illinois asked the Commission to institute a proceeding pursuant to 10 C.F.R. 2.206(a) which provides in pertinent part:

Any person may file a request for the . . . Director of Nuclear Material Safety and Safeguards . . . to institute a proceeding pursuant to § 2.206 to modify, suspend or revoke a license, or for such other action as may be proper.

The director denied the request in accordance with 10 C.F.R. 2.206(b) which states:

Within a reasonable time after a request pursuant to paragraph (a) of this section has been received, the . . . Director of Nuclear Material Safety and Safeguards . . . shall either institute the requested proceeding in accordance with this subpart or shall advise the person who made the request in writing that no proceeding will be instituted in whole or in part, with respect to his request, and the reasons therefor.

Therefore the director complied with these provisions, as well as with Section 555(e) of the APA, by advising the state that no proceeding would be instituted and by presenting a complete statement of reasons supporting his decision to deny the request.

In Dunlop v. Bachowski, 421 U.S. 560, 95 S.Ct. 1851, 44 L.Ed.2d 377 (1975), the losing candidate in a disputed union election filed a complaint with the Secretary of Labor alleging violations of Section 401 of the Labor-Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 481. Pursuant to 29 U.S.C. § 482, the Secretary was compelled to investigate the complaint and decide whether to bring an action to set aside the challenged election. ⁴ After completing his investigation the Secretary, without holding a hearing, refused to institute a civil proceeding.

The Supreme Court acknowledged the special knowledge and discretion of the Secretary and ruled out the need for a hearing on the Secretary's denial:

The necessity that the reviewing court refrain from substitution of its judgment for that of the Secretary thus helps define the permissible scope of review. Except in what must be the rare case, the court's review should be confined to examination of the "reasons" statement, and the determination whether the statement, without more, evinces that the Secretary's decision is so irrational as to constitute the decision arbitrary and capricious. Thus, review may not extend to cognizance or trial of a complaining member's challenges to the factual bases for the Secretary's conclusion either that no violations occurred or that they did not affect the outcome of the election. The full trappings of adversary trial-type hearings would be defiant of congressional objectives not to permit individuals to block or delay resolution of post-election disputes, but rather "to settle as quickly as practicable the cloud on the incumbents' titles to office"; and "to protect unions from frivolous litigation and unnecessary interference with their elections." "If . . . the Court concludes . . . there is a rational and defensible basis (stated in the reasons statement) for (the Secretary's) determination, then that should be an end of this matter, for it is not the function of the Court to determine whether or not the case should be brought or what its outcome would be."

Id. at 573, 95 S.Ct. at 1860. Although detailed findings of fact were not necessary, the Court insisted that the Secretary provide a statement of reasons supporting his determination to serve as the basis for judicial review. Stating that the court of appeals impermissibly allowed an adversary trial to challenge the factual basis for the Secretary's decision, the Supreme Court reversed and remanded the case.

The Supreme Court in Gulf States Utilities Co. v. Federal Power Commission, 411 U.S. 747, 93 S.Ct. 1870, 36 L.Ed.2d 635 (1973), considered the discretionary authority of the Federal Power Commission (FPC or Commission) to refuse to hold a hearing. Gulf States Utilities Company (Gulf) applied to the FPC for authority to issue a security as required by Section 204 of the Federal Power Act, 16 U.S.C. § 824c. The Commission was thereby statutorily obligated to consider the issue's anticompetitive effect and compatibility with the public interest and was provided with the power to grant or modify such applications "after an opportunity for a hearing." ⁵

After the FPC filed notice of Gulf's application, two Louisiana cities alleging anticompetitive consequences requested a formal hearing and leave to intervene on the application. The Commission granted intervention, denied the hearing and granted the application. The Court held that although the Commission was obligated to consider the anticompetitive consequences of a security issue, the FPC need not conduct a hearing on objections in every case. The Supreme Court announced, "So strict a rule would unduly limit the discretion the Commission must have in order to mold its procedures to the exigencies of the particular case." 411 U.S. at 762, 93 S.Ct. at 1880.

In Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519, 524, 98 S.Ct. 1197, 1202, 55 L.Ed.2d 460 (1978) the Court recently repeated a long established administrative law principle: "Even apart from the Administrative Procedure Act this Court has for more than four decades emphasized that the formulation of procedures was basically to be left within the discretion of the agencies to which Congress had confided the responsibility for substantive judgments." Congress has indeed bestowed broad discretion upon the Commission. "Both the Atomic Energy Act of 1954 and the Energy Reorganization Act of 1974 confer broad regulatory functions on the (Nuclear Regulatory) Commission and specifically authorize it to promulgate rules and regulations it deems necessary to fulfill its responsibilities under the Acts." Public Service Company of New Hampshire v. Nuclear Regulatory Commission, 582 F.2d 77 (1st Cir., 1978). The Commission's regulatory scheme "is virtually unique in the degree to which broad responsibility is reposed in the administering agency, free of close prescription in its charter as to how it shall proceed in achieving the statutory objectives." Siegel v. Atomic Energy Commission, 130 U.S.App.D.C. 307, 312, 400 F.2d 778, 783 (1968).

In Vermont Yankee the court declared:

Absent constitutional constraints or extremely compelling circumstances, "the administrative agencies 'should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.' "

435 U.S. at 543, 98 S.Ct. at 1211. In the present case the record delineates neither a constitutional issue nor extremely compelling circumstances. The state has not carried its burden on the statutory claim.

II.

In the...