ELR Citation: ELR 20822
No(s). s. 81-2034 et al (D.C. Cir. Dec 31, 1984)

The court rejects a number of challenges to Nuclear Regulatory Commission (NRC) licensing of the Diablo Canyon Nuclear Power Plant in California, including objections to NRC's consideration of the complicating effects of earthquakes on emergency planning procedures.

The court first reviews the several edicts from the Supreme Court that NRC decisions be accorded extreme deference and proceeds to use the arbitrary and capricious standard of review with those admonitions in mind. Turning first to the National Environmental Policy Act questions, the court holds that the reactor's environmental impact statement (EIS) need not be supplemented to consider the consequences of a coremelt, because the NRC policy change requiring such consideration in EISs was made subsequent to the completion of the final and supplemental EISs for the reactor. The court declined to apply the policy change retroactively, since the bases for the change, criticism of the 1975 Reactor Safety Study's core-melt risk estimates and the Three Mile Island accident, do not suggest that the risk of a core-melt is more than remote and highly speculative. Nor do the Council on Environmental Quality regulations requiring worst case analyses in cases of scientific uncertainty apply, because they were adopted after the EISs were completed and explicitly exempt EISs filed before their effective date from their requirements. Applying the requirements of the regulation to the duty to supplement EISs would undercut this exemption. Finally, the proximity of the Hosgri Fault line to the reactor is not a "special circumstance" which would require the policy change to apply retroactively. Petitioners have not challenged on appeal NRC's conclusion that the reactor's design will adequately withstand earthquakes, and the other two possible ways that the presence of the fault might be characterized as a special circumstance, that an earthquake and accident might occur simultaneously and that a core-melt might cause an earthquake, are too fantastic to be taken seriously.

The court next holds that NRC did not act arbitrarily in ignoring the complicating effects of an earthquake on emergency planning, rejecting three grounds for a contrary holding. First, NRC's conclusion that the earthquake issue is immaterial to the licensing proceedings and may therefore be excluded from the scope of the licensing proceedings is reasonable, based on its reasonable conclusions that an earthquake would not cause an accident, that a simultanous earthquake and accident is extremely unlikely, and that the emergency procedures are sufficiently flexible to allow for the complications caused by an earthquake.Second, generic rulemaking was proper, given the possibility that this reactor site is not uniquely earthquake-prone. Third, the delay in the rulemaking procedure, until after the reactor was licensed, was due to staff recommendations and was not so unreasonably long as to violate the Administrative Procedure Act or the Atomic Energy Act. The court next holds that the licensing of reactor operators without actual operating experience violated the plain meaning of NRC regulations, but that subsequent amendment of those regulations to conform to the actual practice of accepting computer simulator experience in lieu of actual operating experience renders remand unnecessary.

The court then considers the petitioners' alleged right to hearings under §189(a) of the Atomic Energy Act for the lifting of a low-power license suspension, and for a low-power license extension, and holds that a hearing is required for the latter but not the former. The court rejects the interpretation that any significant change in reactor operation mandates a hearing, because Congress intended that §189(a) be interpreted literally. The court held that reopened proceedings on the full power license gave petitioners the right to be heard on design quality assurance. However, their objections to construction quality were not considered at the reopened proceedings. The court holds that the opportunity to seek reopening is not an adequate substitute for the right to a hearing under §189, and that NRC therefore acted unlawfully in denying a §189 hearing. Nevertheless, it concludes that petitioners' construction quality objections are neither material nor safety significant and therefore do not mandate court relief.

The court refuses to reopen the record on construction quality assurance, holding: (1) that the petitioners' 1977 motion was rightfully denied on timeliness grounds, since inability to retain counsel and experts is inexcusable, (2) that the second motion submitted testimony that NRC reasonably accorded little weight and alleged deficiencies which had been corrected, and (3) that the final motion, alleging a pattern of deficiencies, did not demonstrate that the quality assurance program had failed. The court similarly refuses to reopen the record on design quality assurance, which had previously been reopened, because the petitioners' allegations of piping system design deficiencies were given full consideration and actual deficiencies have been rectified by a Peer Review Group's recommendations.

Finally, the court considers the motion to supplement the record with transcripts of an NRC licensing meeting. The motion was supported by affidavits from Representative Ottinger and NRC Commissioner James Asseltine, who alleged that NRC did not require a hearing on the effects of an earthquake on emergency planning because of its wish to avoid delay and based on material absent from the record. The court holds that it is improper to review the transcripts, relying on the Federal Rules of Appellate Procedure 16(a) and definitions of "record," cases holding that judicial review should be limited to the agency's stated rationale and findings, and its own conclusion that its holding is necessary to preserve harmonious relations between the judiciary and agencies and to avoid dampening the candid exchange of opinion in future meetings. The petitioners fail in these attempts to justify an exception to the general rule against inclusion of deliberative documents in the record. First, NRC did not fail to explain its findings, and any failure would mandate remand rather than supplementation. Second, the court is obligated to disregard any material favorable to NRC's position outside the record that it may have relied on. Third, the petitioners' charges of bad faith are conclusory and inferential, therefore falling short of the heavy burden required for allegations so easy to make and so difficult to review.

Judge Wald concurs in part and dissents in part, arguing that NRC should have considered the complicating effects of an earthquake on nuclear emergency response plans. The extraordinary history of calamitous circumstances at the Diablo Canyon plant warrants extra care in examining NRC's decision. Given the reactor's troubled safety history and the uniqueness, specificity, and credibiity of the allegations of NRC misconduct, the court should conduct an in camera inspection of the transcripts. Judge Wald would also remand the case to NRC for consideration of the earthquake problem, since the Commission cites no record support for its conclusion that the risks of simultaneous accidents and earthquakes are very low, or as low or lower than other natural phenomena that would complicate emergency planning, nor for its assertion that the flexibility of emergency planning could handle the disruptions of an earthquake.

Counsel for Petitioners
Herbert H. Brown
Kirkpatrick & Lockhart
1900 M St. NW, Washington DC 20035
(202) 452-7000

Counsel for Respondents
Peter Steenland
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2748

Counsel for Intervenors
William T. Coleman
O'Melveny & Myers
1800 M St. NW, Washington DC 20036
(202) 457-5300

Counsel for Amicus Curiae
Barton Z. Cowan
Eckert, Scamans, Cherin & Melloff
42d Fl., 600 Grant St., Pittsburg PA 15219
(412) 566-6000

Peter B. Kelsey
Edison Electric Institute
1111 19th St. NW, Washington DC 20036
(202) 828-7400

Before WALD and BORK, Circuit Judges, and WILKEY, Senior Circuit Judge.