FLORIDA POWER & LIGHT CO. v. LORION
Legal provision: 28 U.S.C. 2342
ORAL ARGUMENT OF CHARLES A. ROTHFELD, ESQ., ON BEHALF OF THE PETITIONERS IN 83-1031, PRO HAC
Chief Justice Warren E. Burger: The Court will hear arguments first this morning in Florida Power and Light Company against Lorion and the consolidated case.
Mr. Rothfeld, you may proceed whenever you are ready.
Charles A. Rothfeld: Mr. Chief Justice, and may it please the Court, this case presents one narrow issue, whether the word 189 of the Atomic Energy Act to refer to all proceedings or only to certain types of formal agency proceedings.
This case began when the respondents sent a letter to the Nuclear Regulatory Commission asking the Commission to suspend the license of the Florida Power and Light Company's Turkey Point nuclear plant.
Under the Commission's procedures, such a so-called Section 2.206 request from the public must be evaluated by the Commission staff.
If the request is found to present a substantial health or safety concern, the Commission will issue an order to the operator of the plant asking it to show cause why its license should not be suspended, modified, or revoked.
Here, the Commission staff evaluated respondent's request, in the process compiling a 547-page record.
On the basis of this record, the director of the Commission's Office of Nuclear Reactor Regulation concluded that respondent's request did not raise a substantial health or safety concern, and be therefore issued an opinion declining to take action against the plant.
Respondent then challenged this decision in the Court of Appeals for the District of Columbia circuit, but that court decided that it lacked jurisdiction to hear the case.
The court based its decision on the language and the two-part structure of Section 189.
Section 189(a) provides for hearings in proceedings relating to the licensing of nuclear plants that are held before the Commission.
Section 189(b) then makes provision for review in Courts of Appeals of all orders entered during the course of proceedings of the kind described in Section 189(a).
Here, the Court of Appeals read the word 189(a) to refer only to formal agency action, and it therefore concluded that the types of orders made reviewable in the Court of Appeals under Section 18(b) are only orders entered during the course of such formal proceedings.
The court therefore concluded that challenges to the denial of Section 2.206 requests had to be reviewed under an abuse of discretion standard first in the District Court with the decision of those courts in turn made reviewable in Courts of Appeals.
This system of judicial review devised by the Court of Appeals in this case, which departs from the practice followed in several of the circuits, finds no support in the statutory language or legislative history, and advances no identifiable interest to the public.
If the Court of Appeals believed that the word "proceeding" generally applies only to formal agency action, it plainly was mistaken.
The Administrative Procedure Act, which is incorporated by reference into the Atomic Energy Act, and therefore should control in this case, defines the term "agency proceedings" to include a wide range of agency action, formal and informal.
Among other things, agency proceedings under the APA include all agency process respecting the grant, denial, or modification of a license.
Unidentified Justice: Mr. Rothfeld, can I interrupt you just a second to be sure I have your position correct?
Do you take the position that there was or was not a proceeding within the meaning of the first sentence of 2239(a)?
Charles A. Rothfeld: Justice Stevens, we believe that there was such a proceeding.
Unidentified Justice: There was a proceeding?
Charles A. Rothfeld: Yes.
Unidentified Justice: But it was not required.
There was no requirement that there be a hearing in that proceeding.
Charles A. Rothfeld: We believe that the agency had discretion to dispense with the hearing if one was unnecessary, as it was in this case.
Unidentified Justice: And so the word "shall" doesn't mean what it says?
Charles A. Rothfeld: Well, this Court repeatedly has indicated that statutes that create hearing rights implicitly contain the understanding that administering agencies can dispense with the hearing if one is unnecessary, or when the person seeking the hearing fails to advance any issue that a hearing might help resolve.
Unidentified Justice: In other words, the word "shall" does not mean what it says?
Charles A. Rothfeld: I think, as this Court has indicated, "shall" should be read to contain the understanding that Congress didn't want agencies to conduct meaningless hearings, and I think that that... the types of cases that have raised this issue really make that clear.
I don't think there's any doubt that in a case such as NRDC versus NRC, decided by the District of Columbia Circuit, where the NRC concluded that it lacked jurisdiction to consider the complaint, there would have been no point in holding a hearing.
It seems ridiculous that Congress would have insisted that one be held.
Or, in a case where the person demanding a hearing wants to raise issues that are outside the scope of the proceeding, it would make little sense to insist that--
Unidentified Justice: Well, you may be entirely right.
The only thing I was questioning is whether it is correct to say that there is no support in the statutory language for the contrary view.
Charles A. Rothfeld: --I wouldn't say there is no support in the statutory language.
We acknowledge, I believe, that the statute can be read as... We think that is a strained interpretation of the statute.
I think that is made... in part is made clear by the Administrative Procedures Act.
The use of the word "proceedings" refers to a wide range of informal agency actions.
It is also made clear by the Hobbs Act, which provides the vehicle for judicial review in this case, the use of the word "proceeding" to refer to informal agency action, and that, the Hobbs Act specifically provides for review in Courts of Appeals of proceedings in which hearings have not been held.
The Court of Appeals, as your question suggested, based its decision on a semantic approach to the language of Section 189.
It entirely ignored the APA and the Hobbs Act, and instead noted that Section 189(a) provides the hearing shall be held in proceedings which raise licensing related issues before the Commission.
Unidentified Justice: Well, I suppose you would still say it was a proceeding even if somebody, some court thought that you had to have a hearing.
Charles A. Rothfeld: Absolutely.
The argument that respondent made in the Court of Appeals was precisely that, that a hearing should have been held in this case, and that on remand is the type of issue that respondent is free to argue with.
The Commission abused its discretion in refusing to hold it.
Unidentified Justice: Is it your view that every time some member of the public writes a letter to the agency and says, I would like you to revoke the license of this utility, that that is enough to start a proceeding?
Charles A. Rothfeld: Yes, that is our position.
Unidentified Justice: Every letter constitutes the commencement of a proceeding?
Charles A. Rothfeld: That's true.
Every letter in fact initiates a fairly formal agency process in response.
Unidentified Justice: And if the agency just writes back and says, we're too busy, we're sorry, we can't do it, that would then be appealable to the Court of Appeals?
Charles A. Rothfeld: Technically, I think that would be a proceeding within the meaning of the APA and Hobbs Act, but that will never occur, because the agency had obligated itself in Section 2.206 to respond in detail to all the factual allegations or complaints presented in letters to the agency, and to issue a formal opinion articulating its rationale and addressing those points in detail if it declines to take further action.
So, those are fairly elaborate agency processes which lead to the disposition of licensing related matters, which is the APA--
Unidentified Justice: Mr. Rothfeld, how many letters of the kind that Justice Stevens was asking about does the agency get in a month or a year?
Do you have any idea?
Charles A. Rothfeld: --My understanding is that in the past ten years... this process began with the promulgation of Section 2.206 in 1974.
In that ten-year period the agency has received about 200 letters.
Unidentified Justice: There must be some favorite correspondents that you don't start a proceeding to answer.
Charles A. Rothfeld: Well, under the agency procedure, it has obligated itself to respond to each of these in detail.
Unidentified Justice: All right.
And I suppose under the statute it could change that rule, couldn't it?
Couldn't it set up a class of letters that wouldn't require such formal investigation?
Charles A. Rothfeld: I think it could.
In fact, before the promulgation of Section 2.206, there was no qualification on the agency to respond in detail.
But I think any time the agency's case to disclose a matter related to licensing is prevented, too, if that is in fact the procedure.
Unidentified Justice: Any such exchange of letters you have, agency changes through any such exchange of letters would give rise to an appealable order, appealable to the Court of Appeals?
Charles A. Rothfeld: Well, presumably it would be challenged in some court, if not in the Court of Appeals.
An action could be commenced in the District Court and then brought to the Court of Appeals to compel the agency and to argue the agency's views and its discretion to take action.
So the only question here is whether or not the agency's disposal of these licensing related issues--
Unidentified Justice: Does the record show how many letters of this kind the agency receives in a year?
Charles A. Rothfeld: --It varies from year to year, Justice Powell, but I think in a typical year it ranges from ten to thirty.
Unidentified Justice: What would happen if 400 or 500 were filed?
I suppose you don't know, but it is a curious provision in the statute.
Charles A. Rothfeld: If a tremendous number of letters were presented, it would present a burden for the agency's... but the agency has obligated itself to do so, and Congress has obligated the courts to do so.
There is really no way around it.
Unidentified Justice: Well, the Court of Appeals decision rationale wouldn't... change the court you go to on review.
Charles A. Rothfeld: That's true.
Unidentified Justice: So any one of these letters, if you answer it and say, sorry, George, that is reviewable in the District Court under the Court of Appeals.
Charles A. Rothfeld: That is true, Justice White, and that, in fact, is one of the problems with the Court of Appeals analysis.
It simply would double the burden of the courts by making every one of these actions reviewable first in the District Court under an abuse of discretion standard, and then the same record would be reviewed in the Court of Appeals.
Unidentified Justice: Well, Mr. Rothfeld, the respondent, of course, argues that Congress limited jurisdiction of the Court of Appeals to cases in which formal hearings had been held, so there would be an adequate record for review by the appellate court, which of course is the typical situation for an appellate court review.
Now, how do you respond to that in cases where a hearing is denied?
What assurance do we have that there would be the kind of record that would be appropriate for appellate court review?
Charles A. Rothfeld: Justice O'Connor, the agency has taken action to assure that in every one of these cases there will be an adequate record.
The person filing the Section 2.206 request is always free to submit whatever factual material or legal arguments he or she thinks will support their claim.
The agency has then obligated itself by its decisions and in Section 2.206 to address those facts in detail and to write an opinion articulating its reasons if Section 2.206--
Unidentified Justice: Well, I guess here the respondent contends that he was unable to submit additional information to the NRC.
Charles A. Rothfeld: --Well, in this case, respondent originally sent a brief letter.
Respondent was free initially to submit whatever she wished in this case, and is free to submit another Section 2.206 request presenting factual material that she believes the agency should have considered but didn't consider.
No one is foreclosed from presenting such material, and this case demonstrates--
Unidentified Justice: And didn't you suggest that perhaps whether there should have been a hearing is still open?
Charles A. Rothfeld: --That issue was never decided by the Court of Appeals.
The court simply dismissed the case for lack of jurisdiction, and on remand that is the type of issue that should be addressed.
Absolutely, Justice White.
Unidentified Justice: Let me ask you a practical question, counsel.
In the Commission, I assume, as in most courts, when a matter comes in that is categorized as a proceeding or a case, it is given a number.
Now, you mentioned the 200 letters over a period of ten years, I think it was.
Did every one of those letters get a number, or was there some selection?
Some of them got numbers and were treated as a proceeding, and some didn't?
Is that the way it works?
Charles A. Rothfeld: I can't speak to every one of these letters in years past.
This case certainly received a number and was treated as a proceeding.
A docket was created containing files submitted by the agency, and my understanding is that when each of these things comes in, because the agency has obligated itself to address the facts, to issue an opinion, everyone is treated as an independent proceeding in which a record of that sort is created.
Unidentified Justice: You say each one.
Do you ever have any answer that says, we have examined all of the questions, and we find no merit in any of them, period?
Charles A. Rothfeld: I am not aware that the agency has done that, Justice Marshall.
Unidentified Justice: Well, you have seen agencies do that, haven't you?
Charles A. Rothfeld: I haven't seen this agency do it in this context.
And the agency's rules are designed to prevent that from happening by obligating the agency to explain its rationale.
Unidentified Justice: Why would the agency want to prevent that from happening?
I would think, you know, given, you know, everyone has some experience... everyone in public life has some experience with citizen letters, but given the receipt of 200 letters over a period of ten years, that the agency would want kind of a short form reply to some people, just saying, we have considered what you have to say and there is nothing to it, period.
What would be wrong with that?
Charles A. Rothfeld: We don't submit that there would be anything wrong with that, but the Commission in the exercise of its discretion has decided that given the magnitude of the safety issues involved it would treat these things seriously, and will address each one in some detail.
We certainly don't suggest that the Atomic Energy Act obligates them to do this, and the agency, as I said, began doing this ten years ago.
Presumably if these things began to create a tremendous burden on the agency's resources, it would be free to change its procedures to address that.
And to respond just a little bit more fully to Justice O'Connor's question.
In this case, there was a 547-page record containing the materials that--
Unidentified Justice: Well, is there anything in the agency's regulations that would ensure that in every case of a denial of a hearing, that there is enough of a record that it would be appropriate for appellate court review?
Charles A. Rothfeld: --Well, I think there is, because the agency has obligated itself to articulate its rationale and explain the basis upon which it--
Unidentified Justice: What regulation are you referring to?
Charles A. Rothfeld: --Section 2.206 itself obligates the agency to do that, and that will lead to the type of record that the Courts of Appeals regularly review in cases of informal adjudication and rulemaking.
So long as the agency has articulated its rationale in an intelligent way--
Unidentified Justice: May I ask... have you finished your answer?
Charles A. Rothfeld: --Yes.
Unidentified Justice: A question about 2.026(b) which says that after you get a request within a reasonable time you will decide either to institute the request of proceeding or that no proceeding will be instituted, and is it your position that the decision of whether to institute a proceeding is the proceeding that you are talking about?
Charles A. Rothfeld: I think the agency has used the term "proceeding" to mean different things in different contexts.
Unidentified Justice: Where in the regulation does it use the word "proceeding" the way you are using it today?
Charles A. Rothfeld: In the regulation itself, it does not.
But in the agency's--
Unidentified Justice: Nor in the statute.
Charles A. Rothfeld: --Nor in the statute.
Well, we suggest the statute uses the term APA and the Hobbs Act, both of which were incorporated into the statute.
Unidentified Justice: But not in accord with the way it is used in the regulation.
Charles A. Rothfeld: The agency orders interpreting the regulation have used the term 2.206 request as proceeding, as we point out in our reply brief, it has also referred to Section 2.206 requests as requests to institute show cause proceedings or enforcement proceedings or informal proceedings, but I don't think the agency intended to interpret the word 189(a).
In fact, the agency consistently has taken the position that denials of a Section 2.206 requests are appealable to the Courts of Appeals, therefore are necessarily orders entered in proceedings of the kind described in Section 189(a).
Unidentified Justice: May I ask just one other question about the Court of Appeals?
Did the court dismiss this on its own motion?
Charles A. Rothfeld: Yes, it did.
It is one of the problems created.
The jurisdictional point was never addressed in the briefs by the parties, and the opinion actually was circulated to the full court before the parties had an opportunity to file a petition for rehearing en banc, so the issues were never really fully addressed by the court.
If there are no further questions, I will reserve the remainder of my time.
Chief Justice Warren E. Burger: Mr. Reis.
ORAL ARGUMENT OF HAROLD F. REIS, ESQ., ON BEHALF OF PETITIONERS IN 83-703
Harold F. Reis: Mr. Chief Justice, and may it please the Court, I would like to emphasize at the outset that in deciding this case, the Court below gave no consideration whatsoever to the relationship of the judicial review provision in the Atomic Energy Act, Section 189, the section we are dealing with now, to the overall scheme of regulation which the Act put into effect.
Now, whether they didn't do it because they did not permit briefing of the issue, and whether they simply overlooked it, or whether they considered the matter not to be relevant, I of course do not know, because they simply didn't consider it at all.
I submit, however, that however lacking in neatness the language of Section 189 is, that this is a very important matter to be considered in interpreting the section.
Now, a very important, if not the most important objective of the Atomic Energy Act of 1954 was to make it possible for the first time for private ownership and operation of nuclear power reactors, and the most important... that private ownership and operation was the course to be made subject to a very close type of regulation, and perhaps the most important instrument of such regulation was licensing.
The Act made it a crime to own or operate a nuclear reactor without a license, and provided elaborate provisions in Section 189 for how licenses were to be issued and provide for their revocation.
Viewed from this point of view, what you had was an Act which was creating a large national administrative system in which licensing was key.
Section 189 therefore provided that in any proceeding respecting the issuance, amendment, or suspension of a license there would be Court of Appeals review.
This, of course, was wholly consistent with this idea of a national system of regulation in which licensing was key.
It provided for judicial review of any proceeding, and it did not necessarily turn, as courts which have considered the question before, for example, D.C. Circuit, when it first considered this question, it made it applicable to proceedings relating to licenses at any stage.
Accordingly, earlier, this, the D.C. Circuit determined that consideration of the jurisdiction of the question whether enforcement or licensing action should be undertaken was the first stage of a proceeding of the type that Section 189 expressly conferred authority on the Courts of Appeals to review.
Unidentified Justice: The Commission's brief, Mr. Reis, tells us that on the basis of a 547-page record, the director issued a decision on November 5th denying the respondent's request.
The respondent's request had been filed by letter on September 11th, 1981.
Now, was that 547-page record made in direct response to the September 11th letter of the respondent, or was it made independent of that but in some way related to it?
Harold F. Reis: I think the answer is, it is related to it, and I would like to explain why, if I may.
Unidentified Justice: Related to it but independent?
Harold F. Reis: Related to it.
Well, if I explain the relationship, I think I may answer it best, if I may.
What happened was, the letter asked that the Turkey Point unit be shut down immediately.
It asked that... I believe I am quoting it, but it was pretty close to that... be shut--
Unidentified Justice: Would you raise your voice a little, Mr. Reis?
Harold F. Reis: --The letter asked that the Turkey Point unit be shut down immediately, that consideration be promptly given to suspension of the license, and the director's response to that request was, as the respondent herself characterizes it in her brief, at Page 2, I believe, as prompt.
What he did was amass the existing material relating to the matter.
He went to the material publicly at hand within the Commission, and if you look at the record in this case, what you will find is, there were not, for example, submissions in response to this thing, to this letter, as respondent suggests.
We, for example, Florida Power and Light, the licensee, did not file a response.
It was not because we didn't know it was there, but because we thought that the material was available to the director.
If you look at his decision, he looked at material relating to the two technical questions, steam generators and pressurized thermal shock, amassed them, saw, appraised the nature of the supposed threat, put this together in a coherent opinion.
In effect, he gave Ms. Lorion exactly the response she had asked for.
That is, he gave immediate consideration to it, and then, on the basis of the existing technical material, some of which had been previously submitted by us, some of which had been previously prepared by the NRC staff which was dealing with this technical problem.
He advised Ms. Lorion why he was not going to take the action she wanted.
Now, I think I have answered your question, Mr. Justice.
Unidentified Justice: But then it is pretty clear that that 547-page record was not put together in any kind of an adversary proceeding.
Harold F. Reis: That is correct.
We didn't file briefs, she didn't file another brief, and so on.
Nevertheless, it can still be regarded as a proceeding.
Rulemaking, for example, is very frequently based upon comments, technical information, and that kind of material.
Unidentified Justice: Mr. Reis, may I ask you a question about the 547-page record that the Chief Justice mentioned?
Supposing there were no such record, but all we had before us were the letter from your opponent and a reply that simply said, we are not going to institute a procedure, proceeding because the procedures already in place are adequate to protect the public health and safety, period, and then there was review.
Would you say that would be reviewable here?
Would the case be any different?
Does the 547-page record add or subtract from the issue at all?
Harold F. Reis: Under the... I think the answer is that if there was a process, that it would be reviewable.
You might have difficulties in reviewing it without a record, as with the District Court, since the standard is arbitrary and capricious.
So far in the seven or eight cases which have been decided, which have gotten to the courts, the records have been adequate for judicial review.
Unidentified Justice: Well, Mr. Reis, if they aren't, they could be sent back.
Harold F. Reis: --Precisely.
And they could be sent, remanded for the creation, the establishment of a better record, or they could be reversed if it was on its face arbitrary and capricious, but--
Unidentified Justice: How could it ever be arbitrary and capricious for the director to say, we have a lot of people who are studying these things constantly, and we have concluded there is no need for this action?
Harold F. Reis: --I think so, and there are a number of other--
Unidentified Justice: You think it could be arbitrary and capricious?
Harold F. Reis: --questions that indicate that the court is somewhat puzzled as to why the Commission didn't do it, and I can't speak for the Commission, but I think that Mr. Rothfeld has suggested the answer, and that is that as long as there is this kind of public concern for the use of atomic energy, and as long as the Commission feels it is able to handle the matter in this way by giving serious consideration to requests, not matter how frivolous, then it is doing it this way.
It may have to change.
Unidentified Justice: If the Court of Appeals on receiving a file of the kind we have been talking about with virtually nothing in it, the Court of Appeals, Courts of Appeals frequently remand a case for the development of an appropriate record, and that could be done here, could it not?
Harold F. Reis: Yes, sir, it certainly could.
Unidentified Justice: But in effect what your... what I gather your response earlier was, that the Commission had this problem under study for a long time independent of the papers which were sent on September 11th by the respondent, and it simply used the materials it had on this subject to respond to her claim.
Harold F. Reis: Yes.
And I might say that in putting that together in one package and making it clear why it was doing what it was doing, and what it was taking into consideration, it was making it possible for the Court of Appeals to review the matter.
It was not one of these situations in which they said, no, this is silly, we are not going to do it.
We know better than you.
Unidentified Justice: The court didn't undertake to look at it at all.
Harold F. Reis: No, because it found that it had no jurisdiction to handle the matter.
Chief Justice Warren E. Burger: Very well.
Harold F. Reis: Thank you.
Chief Justice Warren E. Burger: Mr. Hodder?
ORAL ARGUMENT OF MARTIN H. HODDER, ESQ., ON BEHALF OF THE RESPONDENTS
Martin H. Hodder: Mr. Chief Justice, and may it please the Court, Ms. Lorion has alleged essentially there is a ticking nuclear time bomb in her back yard.
The Commission has admitted that reactor pressure vessel embrittlement is a serious and unresolved safety issue, but it has declined to implement a hearing in which to consider her concerns.
The utility denies the problem is severe.
The question before the Court is, where is that factual dispute to be resolved?
Unidentified Justice: Your client went to the Court of Appeals, didn't she?
Martin H. Hodder: Yes, Your Honor.
Unidentified Justice: Now you are taking the position--
Martin H. Hodder: --brought an appeal before the Court of Appeals because it was her belief based on the existing seven or eight cases that that was the appropriate path on appeal, having been denied the relief she sought by the director's decisions, which were then known as director's denials.
Unidentified Justice: --But now you are taking the opposite position?
Martin H. Hodder: I don't follow that observation.
Unidentified Justice: That jurisdiction is in the District Court.
Martin H. Hodder: We were overjoyed to find the decision of the Court of Appeals that jurisdiction lay in the District Court, because one of our major concerns in this case and the first consideration or challenge is that there has been an abuse of agency discretion on the part of the Commission.
We have just considered here this morning the version of the government and the agency on formulation of the existing record, but the fact is that the record that was assembled was selective and ex parte in nature, and because no opportunity was given to my client to participate, she did not participate in formulation of the record.
Indeed, by definition of the 2.206 process, by its very nature, one cannot participate if one is a petitioner or a requester.
Unidentified Justice: You want a hearing?
Martin H. Hodder: It was our request--
Unidentified Justice: Do you now, at this stage?
Are you seeking a hearing?
Martin H. Hodder: --Yes, we--
Unidentified Justice: Where you could put in evidence.
Martin H. Hodder: --My client, of course, seeks that opportunity, and one of the--
Unidentified Justice: Is there anything to prevent you from starting a proceeding more formally?
Without regard to whether the first was or was not a proceeding, is there any bar to your presenting your claims to the Commission now, irrespective of what this Court does?
Martin H. Hodder: --The government has argued that one could renew the request in a new and separate 2.206 request, but that would require new information not previously submitted.
Since the decision was made on the basis of the issue we wish to be heard, we are unable on that particular issue, which is reactor pressure vessel embrittlement, to resubmit the question in a way that it could be considered new.
Therefore, we persist on our request that there be an enforcement proceeding or a hearing on the substantial issue of material fact that we have raised, because the issue raised here is acknowledged to constitute an unresolved safety issue, and the record relied upon the Commission in denying the relief sought is incomplete.
And the Commission itself shared the concerns of Ms. Lorion, and I believe it is Item 21 in the joint appendix in the case below.
The Commission used another show cause device similar to the 2.202 show cause process that my client sought, but without the teeth in it, and without the requirement of a hearing.
In other words, the Commission had requested information on August 21st from the utility noting that the Turkey Point reactors were in a site specific category which was causing them to reach levels of concern.
Unidentified Justice: Mr. Hodder, would you say the Commission's response to your client's letter was in the nature of saying the facts you allege are not so, or that even if the facts you allege are all true, it is still no reason for concern under the law?
Martin H. Hodder: --I think the Commission fairly addressed the question.
I don't think they denied the issue that there existed a problem, but the question is before this Court and before the director at the time the request was made, is how much information did the Commission utilize in reaching their decision.
You see, you cannot not find that there is an abuse of discretion, because the 50.54 request for information under a show cause request under the Commission's other rule hadn't been answered by the utility at the time they issued their decision in this case.
Unidentified Justice: But I am not quite sure what your answer to my question is.
Is the Commission's response to your client's letter essentially that as a matter of fact, you are wrong, or as a matter of law, you are wrong?
Martin H. Hodder: I think that as a matter of fact, of course, is the response.
Unidentified Justice: So you say you should have a hearing because you have made allegations of fact that if you could support them would be legally significant, and the Commission has just chosen to, what, disregard those allegations of fact?
Martin H. Hodder: Of course.
We raised an issue of material fact that we seek to litigate, and the Commission disagrees with us.
Unidentified Justice: Well, do you agree, Mr. Hodder, that it is reasonable to conclude that the statute only requires a hearing when the requesting party makes a certain threshold showing of health or safety risks or allegations?
Martin H. Hodder: Of course, I think that that is the basis for the definition of the rule.
It is my belief that the--
Unidentified Justice: Well, is that a reasonable interpretation of the statute, do you think?
Martin H. Hodder: --I think that it is a reasonable interpretation of the statute, and the client has made such a showing.
The agency, on the other hand, hasn't been able to show otherwise, because they answered before they had all the information in.
You have to understand that in review of the record that the agency did assemble, which was fortuitously complete in some respects, the Turkey Point reactors, unlike other reactors in the United States, fell into a worst case category.
They, having been designed in the late sixties, early seventies, had engineering flaws designed into them that weren't apparent at the time, like Pinto automobiles with their bad gas tanks, because as the copper which inadvertently was introduced into the reactor pressure vessel began to cause embrittlement, it became apparent to everyone at the Commission and members of the public as well that these particular reactors, eight in all, the Turkey Point ones being the worst in the category, subcategory, worst subcategory of the total of eight, were so bad that the Commission itself saw fit to request this additional information from the utility company.
The utility company had not responded at the time the director denied the relief Ms. Lorion sought.
I say that that is an inadequate basis for refusal to act, and that therefore he abused his discretion.
Ancillary to that is the next issue of whether or not Ms. Lorion's contentions are correct or not.
Unidentified Justice: Well, you went to the Court of Appeals on appeal, and one of your claims was, I suppose, that you were entitled to a hearing.
Martin H. Hodder: When we went to the Court of Appeals--
Unidentified Justice: Wasn't that one of your claims?
You were entitled to a hearing?
Martin H. Hodder: --Of course, we felt that the--
Unidentified Justice: That's what you wanted.
Martin H. Hodder: --director abused his discretion by not implementing a hearing under 2.202.
Unidentified Justice: And if the Court of Appeals decision is sustained, you are going to be in the District Court claiming that you were entitled to a hearing.
Martin H. Hodder: If we go into District Court, we would seek to utilize the Federal Rules of Civil Procedure and examine in that court the existing record's adequacy by presentation of evidence and--
Unidentified Justice: But you will be asking the judge to remand it to the agency for the hearing.
Martin H. Hodder: --No, sir.
Unidentified Justice: Would there be a de novo hearing?
Martin H. Hodder: --We feel that based on interpretation of the law and the nature of the 2.206--
Unidentified Justice: My point is, my point is, though, the Court of Appeals never decided, never got to the question of whether you were entitled to a hearing.
They just dismissed you for want of jurisdiction.
Martin H. Hodder: --That's true.
Unidentified Justice: And if we affirm... if we reverse them and say they have jurisdiction, they are going to have to face up to your claim that you are entitled to a hearing.
Martin H. Hodder: Of course.
That is the first consideration that that court would--
Unidentified Justice: Well, you may win.
Martin H. Hodder: --Of course.
Unidentified Justice: They may remand and say the agency abused its discretion in not giving you a hearing.
Martin H. Hodder: Of course.
I understand that.
And of course we should also take note of the fact that were we to find jurisdiction in the Court of Appeals initially in this case, the Hobbs Act would require that the case be remanded to the District Court in any event, because it fits the definition under 2347(b)(3) that requires--
Unidentified Justice: Is that normal for a case to come from an agency to a Court of Appeals, and then for the Court of Appeals to remand the case to the District Court?
Martin H. Hodder: --Well, that is the result we are trying to avoid this morning.
Unidentified Justice: I thought you said--
Martin H. Hodder: Because that would impose an extra tier of review which--
Unidentified Justice: --Will you answer my question?
Martin H. Hodder: --Yes, sir.
Unidentified Justice: I thought you said that the Hobbs Act required that result just now.
Martin H. Hodder: I didn't hear you, sir.
Unidentified Justice: I thought you said that the Hobbs Act required the result that a case coming from an agency to the Court of Appeals should be remanded to the District Court.
Martin H. Hodder: By examination of the facts in this case, that would be the result were we to find jurisdiction in the Court of Appeals and then apply the Hobbs Act.
I am only pointing out that the result would be the same in any event based on our interpretation of the Atomic Energy Act and the Hobbs Act.
Unidentified Justice: May I ask kind of a threshold question that I have never thoroughly understood in this case?
If you assume that a proceeding doesn't start until... well, that this is not a proceeding that we have here, where is there any statutory duty in the Commission to have anything more than the kind of prosecutorial discretion that a prosecutor in a criminal context would have?
What statutory obligation is there to institute proceedings?
Isn't it... Why couldn't one argue that it is totally within the discretion of the agency?
And if there is a statutory obligation, what is the standard in any statute that tells when they have to institute proceedings?
Martin H. Hodder: I think the entire Atomic Energy Act constitutes a very serious mandate to maintain the safety of the nuclear power industry.
Unidentified Justice: This specific provision, you just kind of read it in the statute as a whole?
Martin H. Hodder: Yes, and failure to observe that very serious mandate constitutes an abuse of agency discretion.
Unidentified Justice: But there is no statute that says that in so many words?
Martin H. Hodder: Oh, yes, I think that one could read Section 189(a) of the Act to show that parties are entitled to a hearing if a requester seeks one, and any proceeding for the--
Unidentified Justice: 189(a).
That is 2239(a).
Is that the same section?
Martin H. Hodder: --Yes, sir.
That's the section.
Unidentified Justice: When you went to the Court of Appeals, did you suggest to the Court of Appeals that the record was inadequate for review?
Martin H. Hodder: Yes, I claimed at the Court of Appeals level that the record constituted denial of due process due to the fact of a selective ex parte--
Unidentified Justice: Did you ask to have it remanded to the Commission to give you the kind of a hearing that you have been talking about?
Martin H. Hodder: --Based on my best recollection at that time, I felt that... I believe I argued that it should be remanded, and that there should be some type of 2.202 hearing implemented.
That is my best recollection.
Unidentified Justice: Any reason why that can't be done now?
Martin H. Hodder: No, because then we would win, and we would... that is, if I am understanding your question, and you were to remand to the agency--
Unidentified Justice: Well, remand to the Court of Appeals, and tell the Court of Appeals that it does have jurisdiction, and to proceed, and then that would leave the Court of Appeals free to tell you, tell everyone that the record was not adequate for review and remanded to the Commission to supplement the record.
Martin H. Hodder: --Of course, that is very true, but we must concern ourselves when we remand to the agency with the effect that is going to have on the rule and the previous teaching of this Court in the case Vermont Yankee, because if we don't remand to the agency with the direct proviso that they implement a 2.202 show cause proceeding, which is what we are seeking, that is, if anything else is requested, then you have a situation where a Court of Appeals is tampering with the procedure, the rule, 2.206, established by the agency in engrafting its own notions of judicial procedure upon that agency process, which is exclusive to the agency and which the courts have been told not to do.
In other words, it is not the business of the Courts of Appeals to amend their jurisdictional grant.
Unidentified Justice: Mr. Hodder, I think I don't understand your position that if the Court of Appeals determined that, let's say, they do have jurisdiction, and if it determined that a hearing should have been allowed, why wouldn't it remand it to the agency rather than to the District Court?
I just don't understand your position on that at all.
Martin H. Hodder: Well, of course--
Unidentified Justice: Why doesn't the Court of Appeals, if it has jurisdiction, look at the record that comes to it from the agency to determine whether it was an abuse of discretion to deny a hearing?
And if, according to the record, the Court of Appeals said that a hearing should have been provided by the agency, wouldn't it send it back to the agency, not the District Court?
Martin H. Hodder: --Your view is absolutely correct as far as it goes, but we must contemplate the nature of the procedure upon remand, whether it is specifically ordained that it be 2.202 or something else.
Because of the nature of the 2.206 process, and its definition by the agency's rule, it is not a proceeding under 189(a), because no rights as a party attach to the requester under 2.206.
Therefore, if we mandate that the director take the decision back and modify it, and consider this requester's views, then we have tampered with that procedure established by the agency for entertaining requests for enforcement action.
If, on the other hand, we remand to the agency with specific instructions that there was an abuse of discretion, and that there should have been a show cause proceeding implemented, then that would be a good result, but we must always recognize that if the Court of Appeals were to look at the Hobbs Act and its provisions under 2347(b), it could in the alternative remand the case to the District Court.
Unidentified Justice: May I just pursue that a little bit?
I still don't understand.
The Court of Appeals' order that the case be transferred to the District Court, and your brief asks that that order be affirmed, so if you prevail here, you will end up in the District Court, right?
Martin H. Hodder: Yes, and that result would please us, because we support the decision--
Unidentified Justice: Right, and what would you ask the District Court to do, ultimately to decide the merits or remand it to the Commission for it to have a normal proceeding?
Martin H. Hodder: --It would be our view that upon remand to the District Court--
Unidentified Justice: It is not remanded.
It is just transferred.
Martin H. Hodder: --Transferred.
I am misusing the word, and I apologize.
Unidentified Justice: Yes.
Martin H. Hodder: Upon transfer of the case to the District Court, then the rights as a party would attach for the first time.
Unidentified Justice: Yes.
Martin H. Hodder: And this requester would then have or proceed under the rules, the Federal Rules of Civil Procedure, and shouldn't be able to--
Unidentified Justice: To do what?
To decide the case?
Martin H. Hodder: --To examine the existing record and to present evidence and testimony and cross examination, and therefore develop a record that adequately and fairly represents her views, which was not the record established by the director below.
Unidentified Justice: So you would make a record before the District Court, and you would not go back to the Commission?
Martin H. Hodder: If the case be transferred, yes.
Unidentified Justice: In the District Court do you have pleadings?
Martin H. Hodder: My presumption is that--
Unidentified Justice: I am kind of old school, and I think if you are going to have a case in the District Court without pleadings--
Martin H. Hodder: --Well, I think we would file an amended complaint at that point, and we would avail ourselves or seek to avail ourselves of discovery rights, and then proceed under the Federal Rules of Civil Procedure, and yes, there would be pleadings.
Unidentified Justice: --Could you have done that originally?
Martin H. Hodder: Not under the definition of the 2.206 rule--
Unidentified Justice: How can you do it now if you couldn't have done it originally?
Martin H. Hodder: --Because for the first time here the rights of a party have attached because we raised an issue of material fact that the Court finds worthy of consideration.
Unidentified Justice: I must say--
Martin H. Hodder: And that question, of course, is whether or not it is safe to operate this plant at full capacity, or whether it should be derated, that is, reduced to the lesser capacity for safety considerations, or perhaps shut down.
Unidentified Justice: --You are not then taking the position that the District Court will be performing a reviewing function, but rather it is just a brand new lawsuit, and you just go right into discovery?
You are not limited to the record before the agency?
Martin H. Hodder: I believe that under the general jurisdiction statutes that would admit us to the District Court, which is 1331--
Unidentified Justice: So you think you are going into the District Court bringing an original action, not a review as you review Social Security cases or something like that on the record that is before the agency?
Martin H. Hodder: --I believe so.
I believe that--
Unidentified Justice: I don't know why you couldn't have done that without ever taking this appeal.
Martin H. Hodder: --The District Court might also examine the question of abuse of discretion.
I imagine that the District Court could upon transfer remand to the agency for a 2.202 proceeding if it is plowing new ground, but in the event that they didn't implement that remand, then we would be entitled as a party under 1331 and 1337 to proceed.
Unidentified Justice: I would expect the government to take the position that you are quite wrong about that.
I may be wrong.
I don't know what is going on in this lawsuit.
Martin H. Hodder: I suspect they would, Your Honor.
Unidentified Justice: Can you give me a case?
Can you give me a case, another case where this was done any place?
Martin H. Hodder: Yes, there is a case known as--
Unidentified Justice: Any place in the world.
Martin H. Hodder: --A case where we have transferred to the District Court and then the rights of a party attach?
Unidentified Justice: All I understand you transfer is your original action.
You are now saying that you transfer a brand new action.
That is what you said.
Martin H. Hodder: Well, the question is--
Unidentified Justice: You can't transfer a brand new action.
Martin H. Hodder: --The question is how one perceives the original request.
The original request raised an issue of material fact which might be adjudicated in an adversary proceeding in District Court.
That is our contention.
But there is another issue before that, and that is whether or not the agency has committed an abuse of discretion by denying the relief sought, which was a 2.202 proceeding.
That would have to be decided first.
Unidentified Justice: What relief do you want there?
That is the review.
That is the review proceeding.
That is a review.
That is all it is.
Martin H. Hodder: That is a proceeding where hearing rights would attach and an interested party could participate under 2.202.
You see, the 2.206 process is the threshold request.
If the director grants the request, then he implements under the 2.202 rule a full show cause proceeding where parties, interested parties may participate, and the rights of a party then attach.
Unidentified Justice: A review proceeding is the exact opposite of a de novo proceeding.
Martin H. Hodder: We are not seeking a de novo proceeding.
Unidentified Justice: I thought you said when you got down to the District Court you start all over again with discovery.
If discovery is not de novo, I would like to know what it is.
Martin H. Hodder: Well, I--
Unidentified Justice: Have you had discovery before in this case?
Martin H. Hodder: --No, we never had even notice that the director's decision--
Unidentified Justice: Well, then, it is new, then, isn't it?
Martin H. Hodder: --In a sense, Your Honor.
Unidentified Justice: Well, let's assume we affirm the Court of Appeals.
Then the next case comes up like yours.
If you don't like what the... and you are turned down, and you don't like the result, you then go right into District Court.
You don't go to the Court of Appeals.
You go into the District Court, because you have just been told that the Court of Appeals has no jurisdiction, so you go right into the District Court, and that is just... you file a complaint to review the agency's decision, don't you?
Martin H. Hodder: We could go into District Court on a new case--
Unidentified Justice: Well, how can you go to the Court of Appeals?
If we affirm the Court of Appeals, you know that the Court of Appeals has no jurisdiction at all.
So you go to the District Court.
Martin H. Hodder: --On future director's decisions, that would be the result.
Unidentified Justice: And what would you claim... wouldn't you have to claim jurisdiction under 1331?
Martin H. Hodder: Yes.
Yes, I believe that's correct.
Unidentified Justice: A review on the record, then, on the record as it exists of 547 pages?
Martin H. Hodder: I believe that we could raise, yes, a bifurcated argument alleging that that record and decision constituted abuse of discretion.
Unidentified Justice: But you say that you want to supplement that record by discovery and by more evidence.
Martin H. Hodder: If the Court were willing to entertain an amended complaint that addressed the material issue of fact raised by the requester when she sought the initial relief, then we would seek to litigate that de novo.
Unidentified Justice: You would be seeking in the District Court.
Wouldn't you review under the Administrative Procedure Act?
Martin H. Hodder: The Administrative Procedure Act would control--
Unidentified Justice: The Hobbs Act?
The Hobbs Act isn't the same thing as the Administrative Procedures Act.
Martin H. Hodder: --No, it isn't.
Unidentified Justice: It is the review of administrative--
Martin H. Hodder: It is a jurisdictional grant contained in Section 189(b).
Unidentified Justice: --Of?
Martin H. Hodder: In other words, of the Atomic Energy Act.
They provide under... see, first they define the proceeding process, then they give the jurisdiction grant.
That is Section 189(b).
And that is the Hobbs Act.
And if you read the Hobbs Act, 2347(b)(3), you see that were there to be original jurisdiction in the Court of Appeals, then transfer to the District Court is the only possible result on our reading of the Hobbs--
Unidentified Justice: Counsel, you talk about filing an amended complaint.
Where is the original complaint?
Martin H. Hodder: --Contained in the requester's letter requesting enforcement action--
Unidentified Justice: Is that a complaint?
Martin H. Hodder: --It is the only complaint I can deal with here.
Unidentified Justice: Well, you know the complaint I am talking about.
The complaint under the rules.
Martin H. Hodder: Well, of course, I--
Unidentified Justice: You really don't want to file an amended complaint, you want to file an original complaint in the District Court and start an original, new action.
Am I right or wrong?
Martin H. Hodder: --I am not sure.
I am plowing new ground.
It is my impression that I--
Unidentified Justice: Well, would new ground be a new case?
Martin H. Hodder: --I think that we would file a petition for review of an agency order in the District Court, and all that entails.
Unidentified Justice: That would give you discovery?
Martin H. Hodder: Since I am operating under the Federal Rules of Civil Procedure, I believe I would be entitled to discovery.
Yes, Your Honor.
Unidentified Justice: As I read Section 1631, which is what the Court of Appeals relied on to transfer to the District Court, all that does is say the District Court may treat the case as though it were originally filed in that court rather than the Court of Appeals, and therefore it seems to me it is open to the government... I don't know whether it's right or not... it is open to the government to say, since they decided it is not a proceeding within the meaning of the statute, it is just not reviewable at all.
The question of commencing proceedings to revoke licenses and the like are committed to agency discretion.
I don't think they have conceded... I may be wrong, but I don't think they have conceded that there is a lawsuit that is going to go forward in the District Court.
Martin H. Hodder: Well, this Court--
Unidentified Justice: And I don't think the Court of Appeals order requires it.
Martin H. Hodder: --This Court did not grant the petition for cert on the issue of whether or not these decisions were reviewable at all.
If this Court were to entertain that notion--
Unidentified Justice: No, we granted cert on the question of whether there was jurisdiction in the Court of Appeals to review an order which at least on the face of these documents does not appear in the proceeding.
It is an order refusing to commence a proceeding.
Martin H. Hodder: --I am following your argument to some extent.
I am only saying that this Court hasn't taken up that issue, that there is a narrow jurisdictional order before this Court, and were this Court to seek our view on that issue, we would respectfully ask the Court to be permitted to brief that issue before the Court rules that such decisions are not reviewable at all.
Certainly as a practical observation, as I answered you earlier today, the Atomic Energy Act taken in toto doesn't permit such an abuse of discretion that would cause an atomic time bomb to be ticking in Ms. Lorion's back yard without there being some recourse to a court of law were she able to successfully show that the agency has abused its discretion.
Unidentified Justice: Well, there are situations in the law where you have a time bomb ticking in somebody's back yard and you go to the prosecutor and say, I want you to arrest that man, and he says, well, I will think about it, but you can't make him do it if he decides not to do it.
Martin H. Hodder: That is true, Your Honor.
However, I think that there is a vast distinction that can be drawn between the severity of these issues here and the APA issue on, I think it is 706 of the APA where they address the question of abuse of agency discretion and do make it reviewable.
I feel that such issues are reviewable.
I would only say that I have tried to be of help to the Court based on my understanding of the case.
I would say to this Court that if you seek to remand the case to the agency, that you be careful to consider my suggestion that we might go too far in engrafting the Court of Appeals' concepts of judicial procedure by tampering with the rule established by the agency, that is, going against the teachings of this Court in Vermont Yankee.
And I thank you for hearing me today.
Chief Justice Warren E. Burger: Very well, Mr. Hodder.
Do you have anything further, Mr. Rothfeld?
You have three minutes remaining.
ORAL ARGUMENT BY CHARLES A. ROTHFELD, ESQ., ON BEHALF OF PETITIONERS IN 83-1031, PRO HAC
Charles A. Rothfeld: Yes, three quick points, Your Honor.
First, in response to Justice Stevens' question, the government has not conceded any of respondent's points.
Unidentified Justice: So that you may well take the position in the District Court that this is an unreviewable refusal to institute a proceeding.
Charles A. Rothfeld: The Commission might very well take that position, and certainly if there were District Court proceedings, they would proceed on the record that is in existence.
I think this Court has repeatedly indicated that whatever court is reviewing agency actions, it would proceed on the record that exists, and it would not... the District Court would not be free to create a record of its own.
Unidentified Justice: Under the Administrative Procedures Act, the District Court can reopen on its own.
Can it take testimony?
Charles A. Rothfeld: I think so long as the record is adequate to support the decision of the agency, the court would have to review that record.
If it concluded that the record was inadequate to support the agency conclusions, it could remand to the agency for further proceedings.
Unidentified Justice: Couldn't it take testimony itself, though, under the APA?
Charles A. Rothfeld: I am not sure if it could, Your Honor.
To the extent that the record in this case is inadequate in some way, it would be open to whichever court reviewed it, presumably the Court of Appeals, to send it back to the agency.
Unidentified Justice: Under the APA, if there were jurisdiction, what would be the standard of review?
Would it be substantial evidence, or arbitrary and capricious?
Charles A. Rothfeld: Arbitrary and capricious, I would think, because a hearing has not been held, and the Atomic Energy Act does not require a hearing on the record.
Unidentified Justice: When you seek that kind of review under the Administrative Procedure Act, what is your jurisdictional basis?
Charles A. Rothfeld: Well, it is not clear, as the Court of Appeals noted, it is not clear precisely what jurisdictional statute respondent could proceed under.
The Court of Appeals suggested general federal question statute or--
Unidentified Justice: What do you think?
What do you think when there is APA review in a District Court because it isn't provided for somewhere else?
Charles A. Rothfeld: --Well, I think it is arguable to proceed on one of those other statutes, but the government has not conceded that it could, or that it would be appropriate in District Court in any event.
Unidentified Justice: I know you haven't, but my question was, if you were going there, what would you suppose, if you were going to try to go there, what jurisdictional basis would there be in the District Court?
Charles A. Rothfeld: If I were the respondent, I would point to one of the statutes that were noted in the Court of Appeals opinion, Section 1331, 1337.
But again, that would be as the respondent, and I am not sure the Commission would agree.
Unidentified Justice: Yes, I understand.
Charles A. Rothfeld: Finally, I think that if the Court of Appeals were to review this case and decided the record was inadequate, there would be no bar in the Hobbs Act to a remand to the agency.
The Hobbs Act provides for transfers to the District Court only when genuine issues of material fact are presented, and in this case there are no factual issues.
The question is whether the agency has properly based its decision on the record before.
Unidentified Justice: But your opponent disagrees.
At least I thought in answer to a colloquy he thought that there were factual issues in the case.
Charles A. Rothfeld: He presented factual submissions to the agency, but the question for the Court to decide is whether the determination that the agency made is appropriately based on the record.
The Court... I think as this Court has indicated repeatedly in cases like Overton Park and Kemp versus Phipps, it is not up to the Court to resolve these factual issues.
The Court can only review the accuracy of the agency's action.
Unidentified Justice: As I understand Mr. Hodder's argument is that they have never had a chance to present anything, to make a record here on which any court could review.
Charles A. Rothfeld: Well, respondent certainly had an opportunity to present whatever factual material she wished, and may present whatever factual material she has not presented to this point.
Unidentified Justice: Ordinarily, to present factual material, you have at least an invitation to a hearing.
Is that not so?
Charles A. Rothfeld: Only if it is a case of formal adjudication or formal rulemaking.
In many instances, of informal adjudication or rulemaking, there are no hearings.
The agency simply proceeds on whatever is submitted to it by both sides.
And in this case, the respondent or someone in her position has an opportunity to submit whatever factual materials he or she would like considered.
Chief Justice Warren E. Burger: Very well.
Thank you, gentlemen.
The case is submitted.