Amicus Curiae Brief — Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc.

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IN THE

Supreme Court of the United States

OcToBeR TERM, 1976

No. 76-419

VERMONT YANKEE NUCLEAR Power CorporaTION,

Petitioner,

Vv.

Natural Resources Derense Councin, INc., et al.

Respondent.

?

No. 76-528

ConsuMERS Power Company, Petitioner,

v.

NELSON AESCHLIMAN, et al., Respondent.

On Petition For Writ of Certiorari to the United States

Court of Appeals For the District of Columbia Circuit

Pursuant to this Court’s Rule 42, Pacifie Legal Foun-

dation hereby respectfully moves the Court for leave to

file its brief amicus curiae bound with this motion. Con-

sent was sought from counsel for all Respondents, one

of whom responded in the negative while the remainder

2

failed to respond. Pacifie Legal Foundation has re-

ceived the written consent of counsel for Petitioners

and also the Solicitor-General of the United States to

file its brief amicus curiae. All of these documents have

been filed with the Clerk.

The accompanying brief urges this Court to reverse

the decisions of the Court of Appeals in Natural Re-

sources Defense Council v. Nuclear Regulatory Com-

mission, 547 F.2d 633 (D.C. Cir. 1976) and Aeschliman

v. Nuclear Regulatory Commission, 547 F.2d 622 (D.C.

Cir. 1976).

Pacific Legal Foundation is a nonprofit, tax-exempt

corporation organized and existing under the laws of

California for the purpose of engaging in litigation in

matters affecting the broad public interest. Policy for

the Pacific Legal Foundation is set by a Board of

Trustees composed of concerned citizens, the majority

of whom are attorneys. The Board evaluates the merits

of any contemplated legal action and authorizes such

legal action only where the Foundation’s position has

broad support within the general community.

The Pacific Legal Foundation believes the action of

the Court below in setting aside the Commission’s * ura-

nium fuel cycle rule * and their injection of a new pro-

' The term ‘‘the Commission’’ is used herein to refer to both the

U.S. Atomie Energy Commission (AEC) and the agency that suc-

ceeded to its regulatory responsibilities on January 19, 1975, the

U.S. Nuclear Regulatory Commission. 42 U.S.C. §§ 2011-2282

(1970 & Supp. V 1975); Exee. Order No. 11834, 3A C.F.R. 111

(1975), reprinted in 42 U.S.C. 5801 (Supp. V 1975).

? The ‘‘uranium fuel cycle rule’’ (commonly called Table S-3)

was promulgated by the Atomic Energy Commission on April 22,

1974 (39 Fed. Reg. 14188) and is codified at 10 C.F.R. 51.20(e)

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3

cedural standard into agency rulemaking proceedings

will adversely affect the general welfare of the people

of this nation. Further, these rulings are squarely in

conflict with this Court’s holdings in Kleppe v. Sierra

Club, 427 U.S. 390 (1976) and Permian Basin Area

Rate Cases, 390 U.S. 747 (1968).

Pacific Legal Foundation considers the decisions be-

low to be extremely significant in that they cripple the

ability of private industry to utilize nuclear power to

meet the public requirements for energy. If the de-

cisions of the Court of Appeals are allowed to stand,

consequences on the publie will be severe, including

shortages of electricity and an escalation in consumer

prices, as well as substantial and unnecessary social,

economic and environmental costs.’

Unless these decisions are reversed the Commission

and all other agencies engaged in rulemaking pursuant

to 5 U.S.C. § 553 (1970) will be burdened with unrea-

sonably vague procedural requirements which are cer-

tain to result in costly delays in such proceedings. Fur-

ther, an additional burden will be placed on the federal

court system as a result of litigation over the meaning

(1977). The Commission intended that, with the inclusion of en-

vironmental impacts from Table 8-3, the environmental impact

statements for individual light water reactors would set forth a

full and candid assessment of costs and benefits consistent with

the legal requirements and spirit of the National Environmental

Poliey Act of 1969, 42 U.S.C. §§ 4321 et seq. See 42 Fed. Reg.

12803 (March 14, 1977).

* See, e.g., Office of Nuclear Reactor Regulation, U.S. Nuclear

Regulatory Commission, Impacts or Later Reverstne A DECISION

To Apopt or Not To Apopt aN Interim Rute Permrrrine Con-

STRUCTION OR OPERATION OF NucLEAR Powrr PLants, (1976):

Burnett, The Human Cost of Regulatory Delays, 33 Nuciear

Tecnu. 283 (1977).

Sear gerry

4

of the new requirements developed by the Court of Ap-

peals and injected into rulemaking proceedings by its

interpretation of The National Environmental Protec-

tion Act.

The Pacifie Legal Foundation, due to its unique pub-

lic interest perspective, believes that it can provide this

Court with a more complete argument of the public in-

terests at stake in this litigation.

Respectfully submitted,

Ronaup A. ZUMBRUN

RayMonp M. Mompsorsse

Rosert K. Best

Pactric LecaL FounDATION

655 Capitol Mall, Suite 465

Sacramento, California 95814

ALBERT FERRI, JR.

W. Huan O’Riorpan

Pactric LecaL FounDATION

1990 M Street, N.W., Suite 550

Washington, D.C. 20036

Counsel for Amicus Curiae

Pacific Legal Foundation

GLENN E. Davis

LAWRENCE P. JONES

Pactric LecaL FouNDATION

1990 M Street, N.W.

Suite 550

Washington, D.C. 20036

Of Counsel

SSS. aaa”

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ad -

SUBJECT INDEX

Page

I ie ae 1

adi Bila the et eae 2

ARGUMENT

I. The Decision Of The Court Of Appeals Is Con-

os To The Best Interests Of The American ,

ha iat inhale heres ene Din aie a Ree an he i

II. The Court Of Appeals Has Devised A Novel And

Inapplicable Standard Of Review Of The Rule-

making Procedures Of The Nuclear Regulatory

SOE Sb eSN hs dncsbbs0cedensntececensesss 6

A. Mandate and Function of the Nuclear Reg-

GENE GED oc che cdcccnsceenseseces 6

B. The Commission’s Promulgation of Table S-3

Was In Total Compliance With the Informal

Rulemaking Provisions of Both the AEA

SUED: si. divincdvcscuscdensseevesess cine 7

C. The Court of Appeals Improperly Disregarded

the Distinction Between Informal Rulemaking

Procedures and Formal Adjudieatory Pro-

ED 6 0660 50:6 04060 6edbenreadiescensss cee 9

III. The Court Of Appeals yaar | Used NEPA

To Impose Novel And Unworkable Procedural

Requirements On Agency Rulemaking .......... 11

IV. Agency Action Is Presumed Valid Unless Found

To Be Arbitrary, Capricious, An Abuse Of Its

aay Or Otherwise Not In Accordance With .

MF onbb0000008006000600000660R66b One O CNN STS 1

TABLE OF AUTHORITIES CITED

CASEs:

Aberdeen & Rockfish Railroad Co. v. SCRAP, 422 US.

DT sie cede bE Cel ns ac pad en aee anes enn 11

Aeschliman vy. Nuclear Regulatory Commission, 547

F.2d 662 (D.C. Cir. 1976) .............cccceeee 2, 12

ii Table of Authorities Continued

Page

California Citizen's Band Association vy, United States,

375 F.2d 43 (Oth Cir.) cert, denied, 389 U.S, 844

CREED See eeccnercdcocvecccecvacctdceseesuese "

Camp v. Pitts, AL US. TIS (V9TS) ccs ty

Carolina Environmental Study Group v, United States,

510 F.2d 796 (D.C, Cir, 1975) ccc cece eee e eee I

Citizens for Safe Power vy, Nuclear Regulatory Com-

mission, 624 F.2d 1201 (D.C. Cin, TWIT) oes 5

Ethul Corp. vy. EPA, DAL Ped 1 (DC, Cir, 1976). 1M

FPC vy, Transcontinental Pipe Line Corp, 423 Us

SB ORR rrr rrr 14, 15

Flint Ridge Development Co, ¥. Scenic Rivers Associa.

tion of Oklahoma, 426 US, 776 (A9TB) oo... 11

Interstate Commerce Commission v, Jersey City, 322

Ee GE CIBER: kccccccnccccececsccccccnnccess 12

eppe ¥, Sierra Club, 427 US. 890 (W9TB) ca 12

va er v. Nuelear Reaqulatory Commission, 513 Pld

BOGS (TAO. Cle, TOTO) cc ccc Geis csossccvescecse: 8

“s Resources Defense Council ¥, Morton, 458 F.2d

Fs CL CEE doce cdccprevesecgesesgees 12,15

Naturet Resources Defense Council vy. Nuclear Requ-

latory Commission, DAT PQd 689 (DC. Cir,

DT. ili een ne dendc0seesehogeesaanennt Ve eis ae

Natural Resources Defense Council v. Nuclear Reau-

latory Commission, No, 77-1448 (D.C. Cir, filed

BROT BO, TOPE) cccccvcscccccccscsceccvcccscesss 6

Permian Sooke Area Rate Cases, 890 US, 747 (1968) 18, 14

Power Reactor Development Co. v, International Union

¥ Electrical, Radio and Machine Workers, 367

Sy EE oo Gteb on 50666050000000000060058 6

Stesel v AFC, 400 F.2d 778 (D.C, Cir, 1968) 000... 6,7, 8,9

United States Vv. AlMeaheny-Ludlhim Steel Corp, 406

U.S, 742 ty vaeemanesks caces ceneonans 7,8 10,14

United States vo Carla Rianchi & Co. STR US, TOO

TUE. 6 ccacacacasocetasepccreccesscooseecsocs

United States v. Flovida Bast Coast Railean, MOUS,

Me CEU ccconescecceccsocoseseessssasspecse 8,10

Wong Yang Sung vy. MeGrath, 889 US. 88 (1950) 6... 10

STATUTES:

Administrative Procedure Aet, 5 U.S.C, © 500

CO BOG. cocvcccccccccccscenscceeececesseenns 7,122,015

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Table of Authorities Continued iii

Page

Atomie Energy Act of 1954, 42 U.S.C, § 2011

GF GEM cacctccecccsccccevesececcosecsceccs 6,7,0,15

National Environmental Policy Act of 1969, 42 U.S.C,

N's CONUS UNSC hae KadEeokadeseecas 11,12, 13

Energy Reorganization Act of 1974, 58 U.S.C, § 5801

GF BOR, cacoscecisccrccoevcccecccecceseccceeere 3

Apmenternative Reaviations:

10 C.PLR, $51,.20(0) (1977) cc. ccc cccceeeeeeeees 2,5, 8, 9

BD Ges GEO GOED ccevccscccitccccccncccccecs s

88 Fed, Rog. 49 (Jan, 14, 1978) oo... ccc ccc cece eues s

39 Fed, Reg, 14188 (April 16, 1974) 0.6, &, 9

42 Fed, Reg, 18808 (March 14, 1977)... 6.6.60. cc a, 5

Texts AND TREATIARS :

I, Forbes, M, Goldsmith, A. Kadak, J. Muckerheide, J,

Turnage & G, Brown, Tie Necuran Denares A

Cart TO Reason (2d od, WTB) Co.cc e ees 3

Nuclear Energy Policy Study Group, Neerean Tsscns

Se Ge ID oa Obed ccaccénccecccévecae 3

Wright, J., Court of Appeals Review of Federal

Agency Rulemaking, 26 Avmix, L. Rev, 199 (1974) 4,11

MISCELLANROUS:

Nueleonics Week, Mareh 24, V9TT © occ ccc ccs 4

Pet, No, 76-419, Petitioner's Supplemental Brief and

Supplemental Appendix oo... 666666 4

Uranium Fuel Cyele, U.S, AEC Docket No, RM-50.8 ., 8

Washington Post, Mareh 17, 1TT oo... cece ee 4

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onus a Se ee er ee

IN THE

Supreme Court of the United States

Ocronen Team, 1976

No, 76-419

Vermont YANKEE Nuciean Powrn Corporation,

Petitioner,

v.

NATURAL Resources Derense Councin, INxc., et al.,

Respondent,

No, 76-528

ConsuUMERS Powrn Company, Petitioner,

v.

NELSON AgscHLiMAN, ct al, Respondent,

On Petition For Writ of Certiorari to the United States

Court of Appeals For the District of Columbia Circuit

!

:

BRIEF OF AMICUS CURIAE |

PACIFIC LEGAL FOUNDATION IN SUPPORT

OF PETITIONERS

.

INTEREST OF AMICUS |

The interest of the amicus curiae is set out in the pre-

coding motion to file this brief,

a —- ee ~

OPINIONS BELOW

The United States Court of Appeals for the District

of Columbia Cirenit, Natural Resources Defense Coun- |

cil, nev. United States Nuclear Regulatory Commia-

sion, O47 B22 O83 ODL, Cir, 1976) concluded, cuter alia,

that the Atomic Energy Commission's rule [hereinafter

Table 8-3") codifying the environmental effects of the

uraniim fuel evele for individual light-water reactors,

10 CPLR. 51.2000) (1977), must be set aside and re-

mended bocanse the rulemaking proceedings underlying

ite promulgation were inadequate,

In a companion opinion, Nelson Aesehliman’ vy,

Unled States Nuclear Regulatory Commission, 547

Pd 622 (D.C, Cin, 1976), the Court of Appeals incor-

porated by reference its decision reported at 547 F.2d

O'S ond remanded to the Commission its decision

granting permits to construet two nuclear reactors

With instructions that there be further clarification of

a report of the Advisory Committee on Reactor Safety,

The Commission was further instructed to consider |

iasiies relating to fuel conservation and to restrike the |

cost-benefit: balance in view of the reconsideration of

ihe fuel evele and energy conservation issues,

THE DECISION OF THE COURT OF APPEALS IS CONTRARY

TO THE BEST INTERESTS OF THE AMERICAN PUBLIC

The United States is presently faced with an unprece-

dented energy shortage which threatens the economic

and social well-being of the nation, Declining domestic

production of oil, the real threat of future cut-offs of

foreign supplies, and the growing realization that

dwindling supplies of fossil fuels must be conserved for

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future generations have forced this country into a

search for safe, economical, and viable alternatives to

supply energy to its homes, factories, and schools, Both

Congress, in enacting the Energy Reorganization Act

of 1974, 42 U.S.C, 6 5801 (1975) ef seq., and President

Carter, in his recent proposals for a national energy

policy, have recognized the importance of nuclear

power as an alternative souree of energy, In fact, as

experts have pointed out, nuclear power is the only non-

fossil energy souree which is economically and techni-

cally feasible to meet this nation’s immediate need for

electricity, Forbes, etal, Tae Nuciear Denate: A CALL

ro Reason 1 (2d ed.) (1976); Nuclear Energy Poliey

Study Group, Neciean Issces any Crorrs, 109-155

(1977),

The ability of nuclear power to meet the public's

growing need for electricity is amply demonstrated by

its past performance and the publie’s reliance thereon,

Nuclear powered electric generating plants in the Unit-

ed States accounted for about 40,000 megawatts of elee-

tric enpacity (MWe), or about 8% of total national

capacity in mid-1976, In early 1977, some 170,000 MWe

of additional nuclear capacity was under construetion

or on order and scheduled to begin operation by the

mid-1980's, Nuclear Energy Poliey Study Group, supra

at 5. Despite the demonstrated need for increased use of

alternative power sources and the demonstrated ability

of nuclear power to fill this need, proposals to build

niclear power plants are being strangled by unneces-

sary procedural delays, Although Congress has en-

trusted the responsibility for determining the safety

and feasibility of nuclear energy use to the Commis-

sion, 42 U.S.C, § 2201(b), the Court of Appeals has at-

fompted to second-guess the Commission's decision.

-—— ee — ee

4

As Judge Skelly Wright pointed out, the result of

stich post hoe procedural requirements imposed by the

courts is “to foree the agencies to over-proceduralize

their rulemaking deliberations , .. eliminating one of

rulemaking’s principal advantages over individualized

proceedings: expeditions action to meet our society's

needs.”’ Wright, Court of Appeala Review of Federal

Regulatory Rulemaking, 26° Apmis... Rev, 199, 207

(1974). In the ease of nuclear power plants, the result

has been an ever-increasing delay between the develop-

ment of nuclear power proposals and the issuance of

licenses to begin construction, and a similar delay be- |

tween construction and final operations,

The uncertainties injected in the Commission's licens-

ing proceedings by the Court of Appeals’ decisions have

already imposed a moratorium on the issuance of final

construction permits and operating licenses for nuclear

fuel light water reactors, See Pet, No, 76-419, Petition-

er’ Supplemental Brief and Supplemental Appendix,

at 8. These procedural delays have contributed sub-

stantially to decisions by private utilities to abandon

nuclear powered electrical generating facilities and re-

sulted in substantial cost being ineurred by the public.’

Delays in licensing procedures and abandonment of

planned facilities not only entail substantial economic

loss but will also result in significant health and envi-

ronmental costs, See note 3 supra, The economic losses

are inevitably passed on to the utilities’ investors and

‘See, e.g. Nucleonica Week, March 24, 1977, at 6 (". . . PPAL

has just canceled two 1,160-MW nuclear unite after a #20 million

investment ‘out of frustration with the licensing process and em

ealating costa’ '') ; Washington Post, Mareh 17, 1977, at B1, col, 1,

(‘Customers of the Virginia Electric and Power Co, may lowe as

much ax #146 million if the company cancels construction of two

reactor unite at ite Surry nuclear power plant... ."'),

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5

consumers, while the environmental and health costs are

borne by all.

With full knowledge of the risks inherent in the con-

tinued use of nuclear energy, Congress and the Com-

mission have determined that the benefits to the public

outweight the risks to the public. This determination

by Congress and the Commission should not be over-

turned lightly by the courts. The vague procedural re-

quirements of the Court of Appeals improperly permit

mere argument alone “against the principled judgment

of agencies charged with the protection of the public

interest to bring essential economic development to a

standstill by magnification of slight possibilities into

the horror of impending doom.”’ Citizens for Safe

Power vy. Nuclear Regulatory Commission, 524 F.2d

1291, 1301 n.15 (D.C, Cir. 1975).

In addition, the vagueness of the additional proce-

dural requirements imposed by the Court of Appeals

under the rubric of “hybrid” proceedings will certainly

lead to additional dilatory litigation. This litigation will

impose an additional burden on an already over-bur-

dened judicial system, at substantial cost to the public.

Indeed, additional litigation on similar issues is now

burdening the court system.

The Commission, in an attempt to avoid the unneces-

sary costs of the hiatus in its licensing functions oc- .

casioned by the decisions of the Court of Appeals, pro-

mulgated a ‘final interim rule” intended to replace

Table 8-3 until such time as an acceptable final rule

could be promulgated, or eighteen months, whichever

occurs first. 42 Fed. Reg. 13803 (March 14, 1977). De-

spite the extensive documentary support for this in-

terim rule, and the more than adequate notice and com-

aonsiesinsantsedsaensealialencosissinial

a a ae a

6

ment period preceeding its promulgation, Natural Re-

sources Defense Council has petitioned the United

States Court of Appeals for the District of Columbia

for review of this interim rule. Natural Resources De-

fense Council v. Nuclear Regulatory Commission, No.

77-1448 (D.C. Cir., filed May 13, 1977). While the action

of the Court of Appeals in response to this petition

is not to be presumed, there is a significant possibility

that if may vacate the Commission’s interim rule result-

ing in an absolute prohibition on licensing. Thus unless

this Court aet expeditiously to reverse the decisions of

the Court of Appeals, the American public may be un-

necessarily deprived of the beneficial use of nuclear

energy for a long time to come.

THE COURT OF APPEALS HAS DEVISED A NOVEL AND

INAPPLICABLE STANDARD OF REVIEW OF THE RULE-

MAKING PROCEDURES OF THE NUCLEAR REGULATORY

COMMISSION

A

Mandate and Function of the Nuclear Regulatory Commission

Congress, by enacting the Atomic Energy Act of 1954

(AEA), 42 U.S.C. § 2011 ef seq. (1970), entrusted the

regulation and control of the peaceful uses of nuclear

energy to the Atomic Energy Commission (the Commis-

sion). In so doing Congress created a “regulatory

scheme which 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 objec-

tives.” Siegel v. AEC, 400 F.2d. 778, 783 (D.C. Cir.

? See, note 1, Motion for Leave to File Brief; Power Reactor De-

velopment Co. v. International Union of Electrical, Radio and

Machine Workers, 367 U.S. 396, 404 (1961).

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ete "a ge Oa i Al AOE a PO

7

1968). The Commission is authorized to prescribe such

regulations or orders as it deems necessary to protect

the public health and minimize danger to life or prop-

erty, and make such other rules and regulations as are

necessary to carry out the purposes of the AEA.’

The Commission's Promulgation of Table S3 Was In Total

Compliance With the Informal Rulemaking Provisions of

Both the AEA and APA

As the Court of Appeals properly recognized, when

promulgating Table S-3 the Commission was engaged

in a rulemaking proceeding pursuant to the AEA and

Administrative Procedure Act (APA),' 5 U.S.C. § 500,

et seq. Section 181 of the AEA, 48 U.S.C, § 2251

(1970), makes the provisions of the APA applicable to

all Commission administrative actions. Siegel, 400 F.2d

at 785. The minimiim requirements of a rulemaking pro-

ceeding governed by the provisions of the APA, 5

U.S.C, § 553, are,

... that notice of proposed rulemaking shall be '

published in the Federal Register, that after notice

the ageney give interested persons an opportunity

to participate in the rulemaking through appro-

priate submissions, and that after consideration of

the record so made the agency shall incorporate in

the rules adopted a concise general statement of

their basis and purpose. (footnote omitted) United

States v. Allegheny-Ludlum Steel Corp., 406 US.

742, 758 (1972).

While Section 189(a) of the AEA, 42 U.S.C. § 2239

(a) (1970), provides interested parties the right to a

* Atomie Energy Act of 1954, § 161, 42 U.S.C, § 2201 (1970). ;

* Natural Resources Defense Council, 547 F.2d at 637-638. |

fen aeneresnenisiennemeensshessill

8 RO Na EC LOT Oy OE, I

8

hearing in such rulemaking proceedings, neither the

APA nor the Commission’s rules, 10 C.F.R. § 2.805

(1977), require an evidentiary hearing. Nader v. Nu-

clear Regulatory Commission, 513 F.24 1045, 1051 (D.C.

Cir. 1975) ; Stegel, 400 F.2d at 785. Indeed the right to

participate in a hearing before the Commission “does

not necessarily embrace either the right to present evi-

dence orally and to cross examine opposing witnesses,

or the right to present oral argument to the agency’s de-

cisionmaker.” United States v. Florida East Coast Rail-

way, 410 U.S, 224, 240 (1973). Nor is the Commission

required to hold a hearing on the record when engaged

in informal rulemaking. Allegheny-Ludlum Steel Corp.,

406 U.S. at 756; Siegel, 400 F.2d at 785-86.

When the Commission issued Table S-3, 10 C.F.R.

51.20(e) (1977), it had fully complied with the require-

ments of all applicable statutes. However, the Commis-

sion went far beyond the “bare minima.”’

The Commission’s decision was based on a 260 page,

single spaced **Final Environmental Survey of the Nu-

clear Fuel Cycle’’ published by the AEC’s Directorate

of Licensing;* written comments of 46 participants °

and the Regulatory staff; a 520 page transcript of oral

proceedings on the subject;" all documents referenced

in the foregoing submissions; a report of a three mem-

ber hearing board; * and lastly, the lengthy Statement

* Environmental Survey of the Uranium Fuel Cycle, WASH-

1428, 39 Fed. Reg. 14188 ( April 16, 1974).

* Written comments were received in response to notice in the

Federal Register, 38 Fed. Rez. 49 (Jan. 14, 1973).

"Uranium Fuel Cycle, US. AEC Docket No. RM-50-3 (Janu-

ary 17, 1973 and February 1 and 2, 1973).

*The Board was appointed by notice at 38 Fed. Reg. 49 (Janu-

ary 14, 1973).

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~~ An

9

of Consideration issued by the Commission with the

final rule.” The Commission’s final conclusions were

properly based on a full rulemaking docket and its own

expertise. As such they should be sustained. Ethyl Corp.

v. EPA, 541 F.2d 1 (D.C. Cir.) (en banc), cert. denied

96 S.Ct. 2663 (1976) ; Siegel, 400 F.2d at 786 (quoting

California Citizen’s Band Association vy. United States,

375 F.2d 43, 54 (9th Cir.) cert. dented, 389 U.S. 844

(1967) ).

In light of the substantial administrative record, re-

flecting extensive public input and consideration of the

available relevant technical information prior to its

promulgation of Table 8-3, the Commission’s action was

a proper one, and should be fully sustained. Ethyl Corp.,

514 F.2d at 33-38.

Cc

The Court of Appeals Improperly Disregarded the Distinction

Between Informal Rulemaking Procedures and Formal Ad-

judicatory Procedures

Although the AEA does not require a formal hearing,

the Commission has interpreted 43 U.S.C. § 2239

(1970) to require informal notice and comment hear-

ings for rulemaking proceedings and formal on-the-

record hearings for licensing proceedings. Siegel, 400

F.2d at 785.

This distinction has consistently been upheld and

found to be important to maintain the necessary flexi-

bility for the agency in selecting the appropriate hear-

ing procedure. Id. at 786.

*39 Fed. Reg. 14188 (April 16, 1974). The Commission also

indicated that the rule and the data on which it was based would

be re-examined from time to time to accommodate new information.

alle ain” satin A

ee ee ee ee ee ee ee ~-

10

The primary purpose of the APA, as established by

this Court, was to ‘introduce greater uniformity of pro-

cedure and standardization of administrative practice

.... Wong Yang Sung v. McGrath, 339 U.S. 33, 41

(1950). The Court of Appeals, in expanding the APA

requirements, improperly circumvented this stated pur-

pose.

Further the Court of Appeals ignored this Court’s

admonition that ‘*[wJhile the line dividing them may

not always be a bright one, [there is] ... a recognized

eng in administrative law between proceedings

or the purpose of promulgating policy-type rules or

standards, on the one hand, and proceedings designed

to adjudicate disputed facts in particular cases on the

other.” Florida East Coast Railway, 410 U.S. at 245

(emphasis added). This Court has stressed that re-

viewing courts must be alert to the differing standards

governing review of an agency’s rulemaking authority

and its adjudicatory function. Allegheny-Ludlum Steel

Corp., 406 U.S, at 749. If this distinction is not main-

tained and courts create ad hoe procedures going be-

yond the requirements of the APA, “opportunities for

caprice and utter unpredictability” will abound. In-

deed,

[1 ]nsisting on such procedures after the fact, with-

out either constitutional or solid statutory warrant,

[is] ...a kind of ad hoc second guessing that can

only demoralize conscientious agency officials and

undermine the reliability of agency judgments. . . .

So long as the question of whether oral hearings,

cross examination, or use of specific interrogatories

depends on judges’ post hoc custom-made notions

of “fairness” or “importanece,”’ judicial review will

seem merely a game of Russian roulette in the

Courts of Appeals.

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Oe he et 6 ot ane LR ae “e orn

1]

Wright, Court of Appeals Review of Federal

Regulatory Rulemaking, 26 Avmin.L.Rey. 199

(1974).

The present paralysis in the Commission’s regulatory

functioning resulting from the Court of Appeals’ de-

cisions is a glaring example of the detrimental effects

of judicial ‘tad hoc second guessing.”

Ill

THE COURT OF APPEALS INCORRECTLY USED NEPA TO

IMPOSE NOVEL AND UNWORKABLE PROCEDURAL RE-

QUIREMENTS ON AGENCY RULEMAKING

In Natural Resources Defense Council vy. Nuclear

Regulatory Commission, the Court of Appeals justified

its requirements for a ‘*hybrid”’ proceeding by reference

to the “statutory context created by NEPA.” 547 F.2d

at 645. However, while NEPA requires that an agency

consider environmental factors before reaching its de-

cision, it does not stipulate what procedures or format

must be used to obtain the necessary input. Environ-

mental factors are but cne consideration that an agency

such as the Commission is required to assess and weigh

objectively in determining the public convenience and

necessity. See Aberdeen & Rockfish Railroad Co. v.

SCRAP, 422 U.S. 289, (1975). In addition this Ccurt

has recently held that “where a clear and unavoidable

conflict in statutory authority exists, NEPA must give

SE PE AR Son

. al tee ie

way.” Flint Ridge Development Co. v. Scenic Rivers ;

Association of Oklahoma, 426 U.S. 776, 788 (1976). :

In evaluating the Commission’s actions under NEPA,

“(t]he only role for a court is to insure that the agency :

has taken a ‘hard look’ at environmental consequences ; |

it cannot ‘interject itself within the area of discretion

SEES

12

of the executive as to the choice of the action to be tak-

en.’’’ Kleppe vy. Sierra Club, 427 U.S, 390, 410 1.21

(1976) (quoting National Resources Defense Counsel

Vv. Morton, 48 F.2d 827, 838 (D.C, Cir, 1972)).

Just as the courts cannot impose “court devised fac-

tors’’ to dictate the seope and timing of an environ-

mental impact statement, id. at 406, neither ean the

courts devise additional requirements for administrative

rulemaking, so long as the ageney has complied with the

requirements of its governing statutes and the APA,

“Such an assertion of judicial authority would leave

the agencies uncertain as to their procedural duties wn-

der NEPA, would invite judicial involvement in the

day-to-day decisionmaking process of the agencies, and

would invite litigation.” Jd. The Court of Appeals’ use

of judicial hindsight to impose vague overbroad re-

quirements on the Commission's rulemaking proceed-

ingse leaves little hope that such proceedings can ever

be consumated in an order that would not be subject to

reopening. Interstate Commerce Commission v. Jersey

City, 322 U.S. 508, 514-515 (1944),

The danger of such judicial conduct is particularly

acute because of the Court of Appeals’ broad interpre-

tation of the substantive requirements of NEPA. In

Aeschliman, for example, the court rejects the “rule of

reason” and requires the Commission to undertake an

investigation of a “colorable alternative” brought to its

attention by an intervenor’s comments on a draft en-

vironmental impact statement. 547 F.2d at 628. This re-

quirement would reduce the Commission’s licensing

proceedings to an exercise in mental gymnastics limited

only by the scope of the commentor’s imagination.

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a oe A A ON A ke

13

Moreover, it is contrary to well settled limitations on an

agency’s duty to consider alternatives to its actions,

“The requirement is not to explore every extreme pos-

sibility which might be conjectured, Rather, . . .

NEPA’s requirement [is] one of considering alterna-

tives as they exist and are likely to exist.” Carolina En-

vironmental Study Group vy. United States, 10 F.2d

706, 801 (D.C. Cir, 1975) Cemphasis added), See also

Natural Resources Defense Council vy, Morton, 458 F.2d

827, 834, 837-38 (D.C, Cir, 1972) Ctrule of reason” re-

quires that alternatives must be reasonably available),

IV

AGENCY ACTION IS PRESUMED VALID UNLESS FOUND TO

BE ARBITRARY, CAPRICIOUS, AN ABUSE OF DISCRE-

TION OR OTHERWISE NOT IN ACCORDANCE WITH

LAW

Where Congress has entrusted the regulation of a

given activity to a regulatory agency “[the agency]

must be free, within the limitations imposed by perti-

nent constitutional and stetutory commands, to devise

methods of regulation capable of equitably reconciling

diverse and conflicting interests.’’ Permian Basin Area

Rate Cases, 3090 U.S, 747, 767 (1968). In this regard,

the Commission is expressly granted substantial disere-

tion as to how it will proceed, 42 U.S.C. § 2039(a)

(1970)"", A reviewing court may only set aside agency

action when its findings and conclusions are clearly

found to be arbitrary, capricious, an abuse of diseretion

or not otherwise in accordance with law. Barring this,

the ageney’s action is presumed valid and a court may

' Even the Court of Appeals has recognized this diseretion and

the desirability of this rule in previous decisions, See, e.g., Ethyl

Corp. ¥. EPA, 541 F.2d 1, 24-27; Seigel, 400 F.2d at 786,

\4

not substitute its judgment for the ageney, See Rthyl

Corp. V. RPA, DAL F.2d 1, 338-38 (D.C, Cir, 1976) Cand

cases cited therein),

In making its review of the Commission's decision,

the reviewing court must apply a three fold test: (1)

whether in light of the relevant facts and of the Com-

mission's broad regulatory duties, the ageney abused or

exceeded its authority; (2) whether the essential ele-

ments of each commission order are supported by sub-

stantial evidence; and (3) whether the Commission's

orders may be reasonably expected to implement Con-

gressional intent and protect both the existing and for-

seenble publie interests, Permian Basin Area Rate

Cases, 300 US, 747, 791-792 (1968). The Court cannot

reweigh the evidence introduced before the Commission

nor broaden its seope of review as to the wisdom of the

regulations, Allegheny-Ludlum Steel, 406 US, at 742,

Furthermore, it cannot supplant the Commission's bal-

ance of publie interests with one more nearly to its lik-

ing, Permian Basin Avea Rate Cases, 390 U.S, at 798,

Finally, “[t]he foeal point for judicial review should

he the administrative record already in existence... .”’

FPPC vy. Transcontinental Pipe Line Corp, 423 U.S, 326

(1976).

Yet, in Natural Resources Defense Council, the deei-

sion of the Court of Appeals was grounded substan-

tinlly on its own refusal to accept the testimony of

Dr. Frank K, Pittman, a witness in the proceedings

for the Nuclear Regulatory Commission, Dr. Pittman

stated that radioactive wastes could be managed with-

out unreasonable risk to publie health and safety, See

M47 F.2d at 647-653. The court based much of its

rejection of the Pittman testimony on articles pub-

lished after Table 8-3 was promulgated without af-

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15

fording Dr, Pittman or any other party an opportun-

ity to respond to these materials, In addition, the

Court of Appeals incorrectly concluded that the Com-

mission “uneritically relied on... assurances by

ageney personnel that problems as yet unsolved would

he solved.” 547 F.2d at 653,

Such statements by the Court of Appeals indicate

that it was engaged ina sifting and weighing of the evi-

dence: a substitution of its own judgment for that of

the agency's judgment.

Moreover, in relying upon materials published after

the development of the administrative record, the Court

of Appeals essentially manufactured a new administra-

tive record, Review of administrative decisions is to be

confined to “consideration of the decisions of the agency

... and of evidence upon whieh it was based.” United

States v. Carlo Bianchi & Co,, 373 USS, 709, 714-715

(1963), quoted in PPC vy. Transcontinental Gas Pipe

Line Corp, 423 U.S. 826, 331 (1976). “TT he foeal point

of judicial review should be the administrative record

already in existence, not some new record initially made

in the reviewing court.” Camp v, Pitts, 411 US, 138, 142

(1973).

Vv

CONCLUSION

By any legal yardstick, the Commission fully com-

plied with both the requirements of the APA and the

AKA, In addition, the Commission provided additional

procedural safeguards by allowing adequate publie in-

put and discussion of issues prior to promulgating

Table 8-3,

16

Yet the Court of Appeals has fashioned an infinitely

nuilleable standard of judicial review which will allow

a reviewing court to pick and choose at random from

the administrative record, or manufacture a new ree-

ord, to impose its preferences upon the Commission,

What both decisions have done is to remove con-

straints from the scope of judicial review, and permit

the court to forage among the administrative records

until it finds sustenance for its own predilections, Such

a rule works havoe upon the orderly, predictable ad-

ministrative process; it spawns endless procedural op-

portunities for litigation, dilatory challenges to agency

action,

Set in the context of a severe energy shortage facing

the nation, the Appellate Court's decisions seriously

freeze the development of an essential energy souree

and can only aggravate the national energy crisis, This

court is urged to affirm the correctness of the ageney’s

decisions and reaffirm the limitations of judicial review

of agency actions, In so doing, this Court will eut the

legal red tape which threatens to strangle the develop-

ment of nuclear power as a national energy souree,

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17

Respectfully submitted,

Ronatp A, Zumprun

RayMonp M, Momnoisse

Ronert K, Best

Pactric LeGaLt Founpation

655 Capitol Mall, Suite 465

Sacramento, California 95814

Apert Fern, Jn.

W. Hvan O'Rtonpan

Paciric Leaat Founpation

1990 M Street, N.W., Suite 550

Washington, D.C, 20036

Counsel for Amicus Curiae

Pacific Legal Foundation

GLENN EB, Davis

LAWwnence P, Jones

Pactric LeGaL FounpAtION

1990 M Street, N.W.

Suite 550

Washington, D.C, 20096

Of Counsel