80 FR 63409 - Hearings on Challenges to the Immediate Effectiveness of Orders
NUCLEAR REGULATORY COMMISSION Federal Register Volume 80, Issue 202 (October 20, 2015)
Federal Register Volume 80, Issue 202 (October 20, 2015)
| Page Range | 63409-63420 | |
| FR Document | 2015-26590 |
[Federal Register Volume 80, Number 202 (Tuesday, October 20, 2015)] [Rules and Regulations] [Pages 63409-63420] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-26590] ======================================================================== Rules and Regulations Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. ======================================================================== Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations [[Page 63409]] NUCLEAR REGULATORY COMMISSION 10 CFR Parts 2 and 150 [NRC-2013-0132] RIN 3150-AJ27 Hearings on Challenges to the Immediate Effectiveness of Orders AGENCY: Nuclear Regulatory Commission. ACTION: Final rule. ----------------------------------------------------------------------- SUMMARY: The U.S. Nuclear Regulatory Commission (NRC) is amending its regulations regarding challenges to the immediate effectiveness of NRC enforcement orders to clarify the burden of proof and to clarify the authority of the presiding officer to order live testimony in resolving these challenges. DATES: This final rule is effective on November 19, 2015. ADDRESSES: Please refer to Docket ID NRC-2013-0132 when contacting the NRC about the availability of information for this final rule. You may obtain publicly-available information related to this final rule by any of the following methods:Federal rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2013-0132. Address questions about NRC dockets to Carol Gallagher; telephone: 301-415- 3463; email: [email protected]. For technical questions contact the individual listed in the FOR FURTHER INFORMATION CONTACT section of this final rule. NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select ``ADAMS Public Documents'' and then select ``Begin Web-based ADAMS Search.'' For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected]. The ADAMS accession number for each document referenced (if it is available in ADAMS) is provided the first time that it is mentioned in the SUPPLEMENTARY INFORMATION section. NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room 01-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852. FOR FURTHER INFORMATION CONTACT: Esther Houseman, Office of the General Counsel, telephone: 301-415-2267, email: [email protected]; or Eric Michel, Office of the General Counsel, telephone: 301-415-1177, email: [email protected]; U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. SUPPLEMENTARY INFORMATION: Executive Summary The U.S. Nuclear Regulatory Commission (NRC) is amending its regulations regarding the issuance of immediately effective orders to clarify the burden of proof in proceedings on challenges to the immediate effectiveness of such orders and the authority of the presiding officer in such proceedings to order live testimony. In NRC enforcement proceedings, the recipient of an order ordinarily may challenge the validity of that order before its terms become effective at a later specified date. However, in certain circumstances, the NRC may issue orders to regulated entities or individuals that are ``immediately effective,'' meaning the order's terms are effective upon issuance and remain in effect even during the pendency of a challenge. These amendments confirm that the recipient of the immediately effective order has the burden to initiate a challenge regarding the order's immediate effectiveness and present evidence that the order, including the need for immediate effectiveness, is not based on adequate evidence. The amendments also clarify that the NRC staff ultimately bears the burden of persuasion that immediate effectiveness is warranted. Additionally, these amendments confirm that the presiding officer in a challenge to the immediate effectiveness of an order may order live testimony, including cross examination of witnesses, if it will assist in the presiding officer's decision. These are not substantive changes to the agency's enforcement procedures, but rather confirm existing burdens and presiding officer authority. In this final rule, the Commission is not adopting the previously proposed amendment \1\ that would have incorporated the concept of ``deliberate ignorance'' as an additional basis upon which the NRC could take enforcement action against an individual for violating the rule. The Commission agrees with public commenters' concern that the subjectivity of the deliberate ignorance standard makes it difficult to implement. This difficulty would make the enforcement process more complex and burdensome, and any corresponding benefits would not outweigh these disadvantages. This decision is discussed in more detail in Section IV, ``Public Comment Analysis,'' of this document. --------------------------------------------------------------------------- \1\ On February 11, 2014, the NRC published the proposed amendments in a proposed rule entitled, ``Deliberate Misconduct Rule and Hearings on Challenges to the Immediate Effectiveness of Orders'' (79 FR 8097). The NRC changed the title of this final rule to ``Hearings on Challenges to the Immediate Effectiveness of Orders'' to more clearly reflect that the proposed changes to the Deliberate Misconduct Rule were not adopted. --------------------------------------------------------------------------- Table of Contents I. Background II. Discussion III. Opportunities for Public Participation IV. Public Comment Analysis V. Section-by-Section Analysis VI. Regulatory Flexibility Certification VII. Regulatory Analysis VIII. Backfitting and Issue Finality IX. Cumulative Effects of Regulation X. Plain Writing XI. National Environmental Policy Act XII. Paperwork Reduction Act XIII. Congressional Review Act XIV. Compatibility of Agreement State Regulations XV. Voluntary Consensus Standards I. Background On January 4, 2006, the U.S. Nuclear Regulatory Commission (NRC) issued an immediately effective order to Mr. David Geisen, a former employee at the Davis-Besse Nuclear Power Station, barring him from employment in the nuclear industry for 5 years.\2\ The order [[Page 63410]] charged Mr. Geisen with deliberate misconduct in contributing to the submission of information to the NRC that he knew was not complete or accurate in material respects. The U.S. Department of Justice (DOJ) later obtained a grand jury indictment against Mr. Geisen on charges under 18 U.S.C. 1001 for submitting false statements to the NRC.\3\ In the criminal case, the judge gave the jury instructions under the prosecution's two alternative theories: The jury could find Mr. Geisen guilty if he either knew that he was submitting false statements or if he acted with deliberate ignorance of their falsity. The jury found Mr. Geisen guilty on a general verdict; that is, the jury found Mr. Geisen guilty without specifying whether it found Mr. Geisen acted out of actual knowledge or deliberate ignorance. The United States Court of Appeals for the Sixth Circuit upheld Mr. Geisen's conviction on appeal.\4\ --------------------------------------------------------------------------- \2\ David Geisen, LBP-09-24, 70 NRC 676 (2009), aff'd, CLI-10- 23, 72 NRC 210 (2010). \3\ United States v. Geisen, 612 F.3d 471, 485-86 (6th Cir. 2010), cert. denied, 131 S. Ct. 1813 (2011), (citing United States v. Geisen, 2008 WL 6124567 (N.D. Ohio May 2, 2008)). \4\ Id. at 485-86. --------------------------------------------------------------------------- In the parallel NRC enforcement proceeding, brought under the agency's Deliberate Misconduct Rule, Sec. 50.5 of title 10 of the Code of Federal Regulations (10 CFR), Mr. Geisen's criminal conviction prompted the NRC's Atomic Safety and Licensing Board (the Board) to consider whether Mr. Geisen was collaterally estopped \5\ from denying the same wrongdoing in the NRC proceeding.\6\ The Board found and the Commission upheld, on appeal, that collateral estoppel could not be applied because the NRC's Deliberate Misconduct Rule did not include deliberate ignorance and the general verdict in the criminal proceeding did not specify whether the verdict was based on actual knowledge or deliberate ignorance.\7\ --------------------------------------------------------------------------- \5\ Collateral estoppel precludes a defendant convicted in a criminal proceeding from challenging in a subsequent civil proceeding any facts that were necessary for the criminal conviction. Collateral estoppel applies to quasi-judicial proceedings such as enforcement hearings before the NRC. See, e.g., SEC v. Freeman, 290 F.Supp. 2d 401, 405 (S.D.N.Y. 2003) (``It is settled that a party in a civil case may be precluded from relitigating issues adjudicated in a prior criminal proceeding and that the Government may rely on the collateral estoppel effect of the conviction in support of establishing the defendant's liability in the subsequent civil action.'') (citations omitted). \6\ Geisen, LBP-09-24, 70 NRC at 709-26; see 10 CFR 50.5. \7\ The Board stated that ``the [NRC] Staff flatly and unmistakably conceded that the `deliberate ignorance' theory is not embraced within the `deliberate misconduct' standard that governs our proceedings.'' Geisen, LBP-09-24, 70 NRC at 715 (alteration added). In its decision, the Commission stated ``[t]he distinction between the court's `deliberate ignorance' standard and the [NRC's] `deliberate misconduct' standard applied in this case is highly significant, indeed, decisive. The Staff, when moving for collateral estoppel, itself conceded that `the 6th Circuit's deliberate ignorance instruction does not meet the NRC's deliberate misconduct standard'.'' Geisen, CLI-10-23, 72 NRC at 251 (emphasis in the original) (alteration added). --------------------------------------------------------------------------- The lack of certainty as to the specific basis of the jury's verdict was significant, because if the verdict was based on actual knowledge, the Board could have applied collateral estoppel based on the NRC's identical actual knowledge standard and the same facts in the criminal case.\8\ However, because the general verdict could have been based on deliberate ignorance, the Board could not apply collateral estoppel, because the NRC does not recognize conduct meeting the deliberate ignorance knowledge standard as deliberate misconduct. The Commission affirmed the Board's decision.\9\ This outcome shows that the Deliberate Misconduct Rule, as presently written, does not provide for an enforcement action on the basis of deliberate ignorance and the Board cannot apply collateral estoppel where a parallel DOJ criminal prosecution proceeding may be based on a finding of deliberate ignorance. --------------------------------------------------------------------------- \8\ Geisen, CLI-10-23, 72 NRC at 249. \9\ Id. at 254. --------------------------------------------------------------------------- In the Staff Requirements Memorandum (SRM) to SECY-10-0074, ``David Geisen, NRC Staff Petition for Review of LBP-09-24 (Aug. 28, 2009),'' dated September 3, 2010 (ADAMS Accession No. ML102460411), the Commission directed the NRC's Office of the General Counsel (OGC) to conduct a review of three issues: (1) How parallel NRC enforcement actions and DOJ criminal prosecutions affect each other, (2) the issuance of immediately effective enforcement orders in matters that DOJ is also pursuing, and (3) the degree of knowledge required for pursuing violations against individuals for deliberate misconduct. In 2011, OGC conducted the requested review and provided recommendations to the Commission for further consideration. In response, in 2012, the Commission directed OGC to develop a proposed rule that would incorporate the deliberate ignorance standard into the Deliberate Misconduct Rule. As part of this effort, the Commission directed OGC to examine the definitions of deliberate ignorance from all Federal circuit courts to aid in developing the most appropriate definition of this term for the NRC. The Commission also directed OGC to clarify two aspects of the regulations regarding challenges to immediate effectiveness of NRC orders as part of this rulemaking: (1) The burden of proof and (2) the authority of the presiding officer to order live testimony in resolving such a challenge. This final rule amends 10 CFR 2.202, which governs challenges to, and the presiding officer's review of, the immediate effectiveness of an order. Currently, the Commission may make orders immediately effective under 10 CFR 2.202(a)(5) if it finds that the public health, safety, or interest so requires or if willful conduct caused a violation of the Atomic Energy Act of 1954, as amended (AEA), an NRC regulation, license condition, or previously issued Commission order. This final rule amends the NRC's regulations by clarifying the following: (1) Which party bears the burden of proof in a hearing on a challenge to the immediate effectiveness of an order, and (2) the authority of the presiding officer to call for live testimony in a hearing on a challenge to the immediate effectiveness of an order. In developing these amendments to 10 CFR 2.202, the NRC reviewed the way in which the Board has interpreted the burden of proof in hearings on challenges to the immediate effectiveness of an order. The NRC also reviewed its current regulations and practices regarding the authority of the presiding officer to call for live testimony in hearings on challenges to the immediate effectiveness of an order. This final rule also makes conforming amendments to 10 CFR 150.2 by adding a cross reference to 10 CFR 61.9b and replacing the cross reference to 10 CFR 71.11 with a cross reference to 10 CFR 71.8. These conforming amendments are necessary because when the NRC first promulgated the Deliberate Misconduct Rule in 1991, it failed to list 10 CFR 61.9b as a cross reference in 10 CFR 150.2; and, although the NRC listed 10 CFR 71.11, which at the time was the 10 CFR part 70 Deliberate Misconduct Rule, as a cross reference in 10 CFR 150.2, the NRC later redesignated the provision as 10 CFR 71.8 and failed to make a conforming amendment to update 10 CFR 150.2. As discussed further in the following sections, the Commission is not adopting in this final rule the previously proposed amendment to the Deliberate Misconduct Rule to incorporate the concept of deliberate ignorance as an additional basis upon which the NRC can take enforcement action against an individual for violating the rule. Immediately Effective Orders The NRC's procedures to initiate formal enforcement action are found in subpart B of 10 CFR part 2. These regulations include 10 CFR 2.202, [[Page 63411]] ``Orders.'' An order is a written NRC directive to modify, suspend, or revoke a license; to cease and desist from a given practice or activity; or to take another action as appropriate.\10\ The Commission's statutory authority to issue an order is Section 161 of the AEA.\11\ The Commission may issue orders in lieu of or in addition to civil penalties.\12\ When the Commission determines that the conduct that caused a violation was willful or that the public health, safety, or interest requires immediate action, the Commission may make orders immediately effective, meaning the subject of the order does not have an opportunity for a hearing before the order goes into effect.\13\ Making enforcement orders immediately effective has been an integral part of 10 CFR 2.202 since 1962, and Section 9(b) of the Administrative Procedure Act (APA), 5 U.S.C. 558(c), expressly authorizes immediately effective orders. --------------------------------------------------------------------------- \10\ 10 CFR 2.202(a). \11\ 42 U.S.C. 2201. \12\ Section 2.3.5 of the NRC Enforcement Policy (2013) (ADAMS Accession No. ML13228A199). \13\ 10 CFR 2.202(b). --------------------------------------------------------------------------- On the same day that the Commission published the 1990 proposed Deliberate Misconduct Rule, ``Willful Misconduct by Unlicensed Persons,'' \14\ it also published a related proposed rule, ``Revisions to Procedures to Issue Orders,'' \15\ that would expressly allow the Commission to issue orders to unlicensed persons. The Commission may issue these orders ``when such persons have demonstrated that future control over their activities subject to the NRC's jurisdiction is deemed to be necessary or desirable to protect public health and safety or to minimize danger to life or property or to protect the common defense and security.'' \16\ This proposed rule concerned amendments to 10 CFR 2.202 and other 10 CFR part 2 provisions.\17\ At the time of these proposed rules, the Commission's regulations only authorized the issuance of an order to a licensee. Therefore, the intent of the 1990 proposed Deliberate Misconduct Rule and its companion proposed rule was to establish a mechanism to issue ``an order . . . to an unlicensed person who willfully causes a licensee to be in violation of Commission requirements or whose willful misconduct undermines, or calls into question, the adequate protection of the public health and safety in connection with activities regulated by the NRC under the [AEA].'' \18\ These proposed changes were adopted, with some modifications, in the 1991 final Deliberate Misconduct Rule.\19\ Specifically, the 1991 final Deliberate Misconduct Rule amended 10 CFR 2.202 and other provisions of 10 CFR part 2 (10 CFR 2.1, 2.201, 2.204, 2.700, and appendix C), to authorize the issuance of an order to unlicensed persons otherwise subject to the NRC's jurisdiction. --------------------------------------------------------------------------- \14\ 55 FR 12374; April 3, 1990. \15\ 55 FR 12370; April 3, 1990. \16\ Id. at 12371. \17\ Id. at 12373-74. \18\ Id. at 12372. \19\ 56 FR 40664; August 15, 1991. --------------------------------------------------------------------------- On July 5, 1990, the Commission published another proposed rule that would make additional changes to 10 CFR 2.202.\20\ These additional changes pertained to immediately effective orders. Primarily, the July 5, 1990, proposed rule would have required that challenges to immediately effective orders be heard expeditiously. The statement of considerations for the July 5, 1990, proposed rule noted that ``the Commission believes that a proper balance between the private and governmental interests involved is achieved by a hearing conducted on an accelerated basis.'' \21\ The statement of considerations also stated that a ``motion to set aside immediate effectiveness must be based on one or both of the following grounds: The willful misconduct charged is unfounded or the public health, safety or interest does not require the order to be made immediately effective.'' \22\ --------------------------------------------------------------------------- \20\ 55 FR 27645. \21\ Id. \22\ Id. --------------------------------------------------------------------------- In addition, the July 5, 1990, proposed rule provided the following statement regarding the respective burdens of a party filing a motion to challenge the immediate effectiveness of an immediately effective order and of the NRC staff: The burden of going forward on the immediate effectiveness issue is with the party who moves to set aside the immediate effectiveness provision. The burden of persuasion on the appropriateness of immediate effectiveness is on the NRC staff.\23\ --------------------------------------------------------------------------- \23\ Id. at 27646. After receiving public comments on the July 5, 1990, proposed rule, the Commission published a final rule on May 12, 1992.\24\ The Commission acknowledged in the May 12, 1992, final rule that ``an immediately effective order may cause a person to suffer loss of employment while the order is being adjudicated'' but recognized that the effects of health and safety violations are paramount over an individual's right of employment.\25\ Accordingly, the final rule amended 10 CFR 2.202(c) ``to allow early challenges to the immediate effectiveness aspect of immediately effective orders.'' \26\ The final rule also provided for an expedited hearing on both the merits of the immediately effective order and a challenge to set aside immediate effectiveness. The presiding officer in an immediate effectiveness challenge must dispose of a person's motion to set aside the immediate effectiveness of the order ``expeditiously,'' generally within 15 days.\27\ Therefore, the Commission struck a balance between the governmental interests in protecting public health and safety and an interest in fairness by requiring that challenges to immediately effective orders be heard expeditiously. --------------------------------------------------------------------------- \24\ 57 FR 20194. \25\ Id. at 20195. \26\ Id. at 20194. \27\ Id. at 20196. See also 10 CFR 2.202(c)(2)(i). --------------------------------------------------------------------------- Burden of Going Forward and Burden of Persuasion In opposing the immediate effectiveness aspect of an order, the party subject to the order, or respondent, must initiate the proceeding by filing affidavits and other evidence that state that the order and the NRC staff's determination that it is necessary to make the order immediately effective ``is not based on adequate evidence but on mere suspicion, unfounded allegations, or error.'' \28\ The respondent's obligation to challenge the order is known as the ``burden of going forward.'' \29\ Section 2.202, however, has been interpreted to mean that the NRC staff bears the ``burden of persuasion'' to demonstrate that the order itself, and the immediate effectiveness determination, are supported by ``adequate evidence.'' \30\ In a 2005 proceeding, the Board described what the NRC staff must prove, stating, --------------------------------------------------------------------------- \28\ 10 CFR 2.202(c)(2)(i). \29\ United Evaluation Servs, Inc., LBP-02-13, 55 NRC 351, 354 (2002). \30\ Id. [T]he staff must satisfy a two-part test: It must demonstrate that adequate evidence--i.e., reliable, probative, and substantial (but not preponderant) evidence--supports a conclusion that (1) the licensee violated a Commission requirement (10 CFR 2.202(a)(1)), and (2) the violation was `willful,' or the violation poses a risk to `the public health, safety, or interest' that requires immediate action (id. Sec. 2.202(a)(5)).\31\ --------------------------------------------------------------------------- \31\ Safety Light Corp. (Bloomsburg, Pennsylvania Site), LBP-05- 02, 61 NRC 53, 61 (2005) (emphasis in original). Although Mr. Geisen never challenged the immediate effectiveness of the Commission's order, one of the Board's judges raised the concern that 10 CFR 2.202(c)(2)(i) could be interpreted to place the burden of persuasion on the [[Page 63412]] party subject to the order to show that the order is based on mere suspicion, unfounded allegations, or error.\32\ This final rule clarifies that the burden of persuasion is the obligation of the NRC staff, not the party subject to the order. --------------------------------------------------------------------------- \32\ Geisen, ``Additional Views of Judge Farrar,'' LBP-09-24, 70 NRC at 801 n.12 (``To succeed under the terms of [10 CFR 2.202(c)(2)(i)], the challenge brought by the Order's target must show that `the order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error.' In addition to having the burden on immediate effectiveness, the target is apparently expected to address the merits at that point as well, as is indicated by the next sentence, which requires the challenge to `state with particularity the reasons why the order is not based on adequate evidence' and to `be accompanied by affidavits or other evidence relied on.' 10 CFR 2.202(c)(2)(i). All in 20 days, unless extended. Id. Sec. 2.202(a)(2).'') (emphasis in the original). --------------------------------------------------------------------------- Authority of the Presiding Officer to Order Live Testimony The July 5, 1990, proposed rule's statement of considerations contemplated the possibility of an evidentiary hearing as part of a challenge to immediate effectiveness: It is expected that the presiding officer normally will decide the question of immediate effectiveness solely on the basis of the order and other filings on the record. The presiding officer may call for oral argument. However, an evidentiary hearing is to be held only if the presiding officer finds the record is inadequate to reach a proper decision on immediate effectiveness. Such a situation is expected to occur only rarely.\33\ --------------------------------------------------------------------------- \33\ 55 FR 27645-46. The May 12, 1992, final rule, however, simply stated that ``[t]he presiding officer may call for oral argument but is not required to do so.'' \34\ Section 2.319 outlines the presiding officer's authority to ``conduct a fair and impartial hearing according to law, and to take appropriate action to control the prehearing and hearing process, to avoid delay and maintain order,'' including the power to examine witnesses, but this power is not specified in 10 CFR 2.202. This final rule clarifies the presiding officer's authority to order live testimony on challenges to the immediate effectiveness of orders. --------------------------------------------------------------------------- \34\ 57 FR at 20196. --------------------------------------------------------------------------- II. Discussion Immediately Effective Orders This rule amends 10 CFR 2.202(c)(2) to clarify that in any challenge to the immediate effectiveness of an order, the NRC staff bears the burden of persuasion and the party challenging the order bears the burden of going forward.\35\ Specifically, the rule states that the NRC staff must show that (1) adequate evidence supports the grounds for the order and (2) immediate effectiveness is warranted.\36\ --------------------------------------------------------------------------- \35\ The party challenging the order has the obligation to initiate the proceeding, namely, by filing the appropriate motion under 10 CFR 2.202(c)(2)(i). This motion ``must state with particularity the reasons why the order is not based on adequate evidence and must be accompanied by affidavits or other evidence relied on.'' 10 CFR 2.202(c)(2)(i). \36\ The Administrative Procedure Act provides ``[e]xcept as otherwise provided by statute, the proponent of a rule or order has the burden of proof.'' 5 U.S.C. 556(d). --------------------------------------------------------------------------- This rule further amends 10 CFR 2.202(c)(2) to confirm the presiding officer's authority to order live testimony, including cross examination of witnesses, in hearings on challenges to the immediate effectiveness of orders if the presiding officer concludes that taking live testimony would assist in its decision on the motion. Similarly, the rule allows any party to the proceeding to file a motion requesting the presiding officer to order live testimony. The amendments allow the NRC staff, in cases where the presiding officer orders live testimony, the option of presenting its response through live testimony rather than a written response made within 5 days of its receipt of the motion. The NRC does not anticipate that permitting the presiding officer to allow live testimony would cause delay, and even if it were to cause delay, public health and safety would not be affected because the immediately effective order would remain in effect throughout the hearing on immediate effectiveness. The rule also amends 10 CFR 2.202(c)(2) to clarify that the presiding officer shall conduct any live testimony pursuant to its powers in 10 CFR 2.319, except that no subpoenas, discovery, or referred rulings or certified questions to the Commission shall be permitted for this purpose. Finally, the rule amends 10 CFR 2.202(c)(2) by dividing the paragraph into smaller paragraphs, adding a cross reference to 10 CFR 2.202(a)(5) (the regulation that authorizes the Commission to make an order immediately effective), and making other minor edits to improve clarity and readability. Conforming Amendments Section 150.2, ``Scope,'' provides notice to Agreement State licensees conducting activities under reciprocity in areas of NRC jurisdiction that they are subject to the applicable NRC Deliberate Misconduct Rule provisions. When the NRC first promulgated the Deliberate Misconduct Rule in 1991, it failed to list 10 CFR 61.9b as a cross reference in 10 CFR 150.2. At the time, 10 CFR 150.2 listed 10 CFR 30.10, 40.10, and 70.10 as the Deliberate Misconduct Rule provisions applicable to Agreement State licensees conducting activities under reciprocity in areas of NRC jurisdiction. On January 13, 1998, the NRC revised its regulations to extend the Deliberate Misconduct Rule to include applicants for or holders of certificates of compliance issued under 10 CFR part 71, ``Packaging and Transportation of Radioactive Material.'' \37\ This rule designated the 10 CFR part 71 Deliberate Misconduct Rule provision as 10 CFR 71.11.\38\ The NRC made a conforming amendment to 10 CFR 150.2 by listing 10 CFR 71.11 as a cross reference.\39\ The NRC later redesignated the provision as 10 CFR 71.8 \40\ but did not make a conforming amendment to update the cross reference in 10 CFR 150.2. The current 10 CFR 150.2 rule text still lists the 10 CFR part 71 Deliberate Misconduct Rule provision as 10 CFR 71.11. --------------------------------------------------------------------------- \37\ 63 FR 1890. \38\ Id. at 1899. \39\ Id. at 1901. \40\ In a 2004 rulemaking amending its regulations concerning the packaging and transport of radioactive materials, the NRC renumbered 10 CFR 71.11 to 10 CFR 71.8 (69 FR 3698, 3764, 3790; January 26, 2004). --------------------------------------------------------------------------- This rule makes conforming amendments to 10 CFR 150.2 by adding a cross reference to 10 CFR 61.9b and deleting the cross reference to 10 CFR 71.11 and replacing it with a cross reference to 10 CFR 71.8. III. Opportunities for Public Participation The proposed rule was published on February 11, 2014, for a 90-day public comment period that ended on May 12, 2014.\41\ --------------------------------------------------------------------------- \41\ 79 FR 8097. --------------------------------------------------------------------------- IV. Public Comment Analysis The NRC received comments from six commenters: The Nuclear Energy Institute, Inc. (NEI), the National Association of Criminal Defense Lawyers (NACDL), STARS Alliance LLC (STARS), Hogan Lovells LLP (Hogan Lovells), Troutman Sanders LLP (Troutman Sanders), and an individual, Mr. James Lieberman. All six provided comments on the proposed amendment to the Deliberate Misconduct Rule incorporating the concept of deliberate ignorance. One commenter, Mr. Lieberman, supported the amendment. The other five commenters opposed the amendment. All comments are summarized in this section, by topic. Additionally, two commenters (NEI and STARS) provided comments on the proposed amendments to 10 CFR [[Page 63413]] 2.202(c) concerning the immediate effectiveness of orders. The NRC received no comments on the proposed amendments to 10 CFR 150.2. Comments Concerning Deliberate Ignorance Comment 1: Confusion and Practical Difficulties Associated With Distinguishing Between Deliberate Ignorance and Carelessness, Recklessness, or Negligence The NEI, NACDL, STARS, Hogan Lovells, and Troutman Sanders commented that deliberate ignorance is an inherently vague and highly subjective criminal knowledge standard and that distinguishing deliberate ignorance from other, non-deliberate states of mind, such as carelessness, recklessness, or negligence, would be difficult in practice. These commenters expressed concern that adoption of the deliberate ignorance standard into the NRC's regulations may confuse NRC staff and could possibly result in enforcement action against individuals who do not commit deliberate violations. Specifically, Hogan Lovells expressed concern that NRC staff would have difficulty assessing what an individual ``subjectively believed'' and whether the individual deliberately took action to ``avoid learning'' a material fact. The NEI commented that the ``complex, legalistic deliberate ignorance standard would be difficult to apply and would promote unnecessary and wasteful litigation without a counterbalancing benefit to the public.'' The NACDL expressed concern that the ``theoretical distinction between a person who is deliberately ignorant and one who is reckless or negligent'' would be ``almost impossible to maintain'' in the NRC enforcement setting. As additional support for these concerns, NEI, STARS, and Hogan Lovells stated that legal scholars and courts, including the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), have cautioned that a ``deliberate ignorance'' jury instruction in Federal criminal trials should only be used sparingly because of the heightened risk that defendants may be inadvertently or impermissibly convicted on a lesser basis than deliberate ignorance, such as recklessness or negligence. The NACDL, NEI, and Troutman Sanders also argued that in the majority of cases evidence used to support a finding of deliberate ignorance would also serve as circumstantial evidence of actual knowledge, thereby further diminishing the utility of the proposed rule. One commenter, Mr. Lieberman, expressed support for the incorporation of the deliberate ignorance standard because the text of the rule ``clearly'' distinguished deliberate ignorance from persons who act with recklessness or careless indifference. Mr. Lieberman recommended that the Commission provide several hypothetical examples of how and under what circumstances the deliberate ignorance standard might be applied in the future to more clearly explain how the NRC staff would differentiate between deliberate ignorance and careless disregard in practice. NRC Response: The Commission agrees with the comments expressing concern that the difficulties in implementing the deliberate ignorance standard would likely outweigh its corresponding benefits. The text of the proposed rule contains multiple subjective elements that would require NRC staff to assess and demonstrate the subjective belief for an individual's actions or inactions. The Commission believes the text of the proposed rule correctly defines ``deliberate ignorance'' in such a way as to distinguish it from careless disregard or other, non- deliberate standards.\42\ However, after further consideration of the difficulties in assessing the facts of a case against this separate intent standard, the Commission has decided not to adopt its proposed amendment to incorporate a deliberate ignorance standard into the Deliberate Misconduct Rule. In this regard, the NRC staff already assesses cases against two intent standards cognizable in our enforcement process--deliberateness involving actual knowledge, and all other forms of willfulness, including careless disregard. Careless disregard is different only in degree from the new standard of deliberate ignorance and could frustrate the efficiency of the enforcement process, at least initially, until guidance were issued and enforcement experience established. The Commission also anticipates that, in most NRC enforcement cases, evidence supporting deliberate ignorance would also serve as circumstantial evidence supporting actual knowledge, further diminishing the utility of the proposed rule at this time.\43\ Multiple Federal circuits have characterized deliberate ignorance jury instructions as means to properly inform juries that a ``charade of ignorance'' can serve as circumstantial proof of guilty knowledge.\44\ Therefore, the benefits associated with the deliberate ignorance standard would likely not outweigh the practical difficulties of its implementation, particularly given that the Commission expects that cases where evidence supports a deliberate ignorance finding but not actual knowledge will be rare. --------------------------------------------------------------------------- \42\ The proposed rule text mirrored the definition provided by the United States Supreme Court in Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011). \43\ See, e.g., United States v. Arbizo, 833 F.2d 244, 247, 248- 49 (10th Cir. 1987) (``One can in fact not know many detailed facts but still have enough knowledge to demonstrate consciousness of guilty conduct sufficient to satisfy the `knowing' element of the crime . . . Arbizo's case presents evidence supporting both actual knowledge and deliberate avoidance of knowledge of some details of the transaction, either of which justify the [guilty] verdict . . . .''). \44\ See, e.g., U.S. v. Conner, 537 F.3d 480, 486 (5th Cir. 2008); U.S. v. Delreal-Ordones, 213 F.3d 1263, 1269 (10th Cir. 2000). --------------------------------------------------------------------------- The Commission acknowledges Mr. Lieberman's support for the rule and, as previously stated, agrees that the text of the proposed rule accurately distinguishes deliberate ignorance from non-deliberate standards, including recklessness, negligence, and carelessness. However, for the reasons previously stated, the Commission is not adopting in this final rule the proposed amendment to the Deliberate Misconduct Rule. Comment 2: Lack of a Compelling Justification The NEI, NACDL, STARS, Hogan Lovells, and Troutman Sanders all commented that the proposed rule failed to provide a compelling justification for incorporating the deliberate ignorance standard into the Deliberate Misconduct Rule. Several of these commenters stated that the only justification that the NRC provided for expanding the scope of the rule was the NRC staff's inability to invoke collateral estoppel in the Geisen case. These commenters stated that expanding the Deliberate Misconduct Rule cannot be justified by a single case in the Deliberate Misconduct Rule's 25-year history and that to fashion a rule to fit a single case is both unnecessary and bad policy. The NEI commented that the Commission should not view the Geisen proceedings as illustrative of an additional or unfair ``burden'' that the NRC staff must overcome in deliberate misconduct enforcement cases. Instead, the case simply illustrated the NRC staff's responsibility in carrying its burden when issuing an enforcement order and that the NRC should not be able to dispense with this responsibility by amending the Deliberate Misconduct Rule. The NEI and Hogan Lovells also argued that the statement in the proposed rule that ``deficiencies in the [[Page 63414]] Deliberate Misconduct Rule became apparent'' in the Geisen case was incorrect because the Geisen case was not a deliberate ignorance case. Rather, the NRC's order only alleged that Mr. Geisen had actual knowledge of the falsity of the statements that he submitted to the NRC, and that the Atomic Safety and Licensing Board agreed that the case was only an actual knowledge case. Therefore, according to the commenters, the NRC should not use the Geisen case as a basis for the rule. The commenters noted that, when promulgating the original Deliberate Misconduct Rule in 1991, the Commission stated that the range of actions subject to the rule was not expected to ``differ significantly'' from those that might subject an individual to criminal prosecution, and the commenters noted that one case in nearly 25 years does not rise to the level of a ``significant'' difference. NRC Response: The Commission disagrees with this comment. Although the Commission recognizes that the benefits of the rule would be limited because it will likely prove decisive in few cases, the Commission disagrees with the comment that the agency lacked adequate justification to consider modification of the regulations to address deliberate ignorance. When promulgating the Deliberate Misconduct Rule in 1991, the Commission stated that deliberate misconduct is a significant and serious matter that poses a distinct threat to public health and safety.\45\ The NRC's inability to invoke collateral estoppel in the Geisen proceeding was not the sole justification for proposing to amend the Deliberate Misconduct Rule. Rather, the Commission has always considered willful violations of NRC requirements to be of particular concern because the NRC's regulatory program is dependent on licensees and their contractors, employees, and agents to act with integrity and communicate with candor. Therefore, the outcome of the Geisen proceeding prompted the Commission to reevaluate the Deliberate Misconduct Rule. --------------------------------------------------------------------------- \45\ 56 FR 40664, 40674; August 15, 1991. --------------------------------------------------------------------------- The Commission also disagrees with the comment that the Geisen case was not a deliberate ignorance case. While the NRC staff did allege only actual knowledge throughout the enforcement proceeding, the NRC staff did not pursue a deliberate ignorance theory because it conceded deliberate ignorance was not a basis upon which it could pursue enforcement action under the Deliberate Misconduct Rule as currently written.\46\ Conversely, DOJ's parallel criminal prosecution of Mr. Geisen in Federal court was based on alternate theories of actual knowledge or deliberate ignorance. The district court provided the deliberate ignorance jury instruction, and Mr. Geisen was convicted on a general verdict. On appeal to the U.S. Court of Appeals for the Sixth Circuit (Sixth Circuit), Mr. Geisen challenged the district court's decision to provide the deliberate ignorance jury instruction.\47\ The Sixth Circuit reiterated that ``a deliberate ignorance instruction is warranted to prevent a criminal defendant from escaping conviction merely by deliberately closing his eyes to the obvious risk that he is engaging in unlawful conduct,'' but cautioned that this instruction should be used sparingly because of the heightened risk of conviction based on mere negligence, carelessness, or ignorance.\48\ Under this standard, the court found the instruction to be proper because the district court's instruction was a correct statement of the law and included a limiting instruction--that ``carelessness, or negligence, or foolishness on [the defendant's] part is not the same as knowledge and is not enough to convict'' foreclosed the possibility that the jury could erroneously convict Geisen on the basis of negligence or carelessness.\49\ Moreover, the court found that the evidence supported a conviction based on either actual knowledge or deliberate ignorance.\50\ Had the deliberate ignorance standard been incorporated into the NRC's Deliberate Misconduct Rule, collateral estoppel would have been available to the NRC staff in the Geisen matter. --------------------------------------------------------------------------- \46\ See David Geisen, LBP-09-24, 70 NRC 676, 715 (2009); Geisen, CLI-10-23, 72 NRC 210, 251 (2010). \47\ United States v. Geisen, 612 F.3d 471, 485 (6th Cir. 2010). \48\ Id. at 485-86 (citations and internal quotation marks omitted). \49\ Id. \50\ Id. at 487. --------------------------------------------------------------------------- As previously stated, the Commission is not adopting the proposed amendment to the Deliberate Misconduct Rule because the practical difficulties are expected to outweigh the potential benefits gained from the rule. Comment 3: Previous Rejection of the Deliberate Ignorance Standard The NEI stated that the proposed rule would conflict with the Commission's decision in the 1991 Deliberate Misconduct Rule to exclude from the rule violations based on careless disregard and negligence. Hogan Lovells stated that the Commission rejected the deliberate ignorance standard when it promulgated the original Deliberate Misconduct Rule. NRC Response: The Commission disagrees with the comment. Although the Commission is not adopting the proposed amendment to the Deliberate Misconduct Rule due to the practical difficulties associated with applying the deliberate ignorance standard, the Commission disagrees with comments suggesting that the deliberate ignorance standard was previously analyzed and explicitly rejected when the Commission promulgated the original Deliberate Misconduct Rule in 1991. The commenter points to a single sentence in the statement of considerations for the proposed rule that discussed ``careless disregard,'' which uses the phrase ``a situation in which an individual blinds himself or herself to the realities of whether a violation has occurred or will occur.'' \51\ The proposed rule and final rule did not make any other reference related to willful blindness or deliberate ignorance and did not contain detailed discussion on the standards. --------------------------------------------------------------------------- \51\ 55 FR 12375; April 3, 1990. --------------------------------------------------------------------------- The Commission eventually eliminated ``careless disregard'' from the final rule in response to public comments, which Hogan Lovells characterizes as the Commission's ``considered and intentional decision'' to exclude deliberate ignorance from the rule. However, the Commission disagrees that this limited discussion amounts to an express rejection of the deliberate ignorance standard. In the 1991 final rule, the Commission did not focus on the applicability of collateral estoppel in a parallel criminal action, which was one of the justifications for the proposed rule. Further, rejection of a proposal under previous rulemaking would not prevent future Commissions from reconsidering the matter and reaching a different conclusion. As previously stated, the NRC is not adopting the proposed amendment to the Deliberate Misconduct Rule over concerns that practical difficulties with its implementation are expected to outweigh the potential benefits. Comment 4: Unsettled Judicial Precedent The NEI, Hogan Lovells, and STARS stated that the proposed rule is premature because of unsettled judicial precedent. The NEI and Hogan Lovells cited as support the D.C. Circuit's statements in United States v. Alston-Graves about the use of the deliberate ignorance standard.\52\ The NEI also stated that the DC Circuit's opinion [[Page 63415]] should carry substantial weight in deciding whether to adopt the deliberate ignorance standard because the DC Circuit is the only Federal circuit court that always has jurisdiction and venue to consider challenges to NRC enforcement orders. --------------------------------------------------------------------------- \52\ 435 F.3d 331 (D.C. Cir. 2006). --------------------------------------------------------------------------- Additionally, NEI and Hogan Lovells stated that the Supreme Court case Global-Tech Appliances, Inc. v. SEB, S.A., is not directly applicable because it was a patent case, not a criminal case. Therefore, as Justice Kennedy noted in his dissent in the case, the Court was not briefed on whether to endorse the deliberate ignorance standard for all criminal cases requiring the government to prove knowledge.\53\ The NEI and Hogan Lovells also noted that Federal courts most commonly apply the deliberate ignorance standard in drug cases. --------------------------------------------------------------------------- \53\ Global-Tech Appliances, Inc. v. SEB, S.A., 131 S. Ct. 2060, 2073 (2011) (Kennedy, J., dissenting). --------------------------------------------------------------------------- NRC Response: The Commission disagrees with the comment. Although the Commission is not adopting the proposed amendment to the Deliberate Misconduct Rule due to the practical difficulties associated with applying the deliberate ignorance standard, the Commission disagrees that judicial precedent in this area is unsettled such that the Commission's proposal to adopt the deliberate ignorance standard is premature. In the words of the Supreme Court, the doctrine of willful blindness is ``well established'' in the Federal courts.\54\ The history of the deliberate ignorance standard is quite long--the concept has been endorsed and applied in criminal cases for more than 100 years. The Supreme Court endorsed a similar concept in 1899 in Spurr v. United States.\55\ In 1976, the Ninth Circuit in United States v. Jewell crafted the modern formulation of the deliberate ignorance standard that Federal courts have since adopted and applied.\56\ The concept of deliberate ignorance is now widely accepted in the Federal courts, which commonly give and uphold deliberate ignorance jury instructions.\57\ --------------------------------------------------------------------------- \54\ Id. at 2068-69 (majority opinion). \55\ See id. at 2069. \56\ 532 F.2d 697 (9th Cir. 1976). See also, e.g., United States v. Caminos, 770 F.2d 361, 365 (3d Cir. 1985) (``The charge, known as a `deliberate ignorance' charge, originated in United States v. Jewell.''). \57\ Global-Tech, 131 S. Ct. at 2069; Alston-Graves, 435 F.3d at 338. --------------------------------------------------------------------------- In Alston-Graves, the D.C. Circuit ruled on the appropriateness of a deliberate ignorance instruction and found that the lower court committed harmless error giving the instruction--not because the instruction itself is improper but because in this particular case the prosecution failed to present sufficient evidence to support it.\58\ At no point in Alston-Graves did the D.C. Circuit reject the deliberate ignorance standard. Indeed, the court acknowledged that it had previously supported the concept of deliberate ignorance in dicta in a prior case.\59\ --------------------------------------------------------------------------- \58\ Alston-Graves, 435 F.3d at 341-42. \59\ Id. at 340 (citing United States v. Mellen, 393 F.3d 175, 181 (D.C. Cir. 2004)). --------------------------------------------------------------------------- The Commission disagrees with the comment that it should give the D.C. Circuit's opinion in Alston-Graves more weight relative to other Federal circuits. The Hobbs Act, which NEI cited as providing the D.C. Circuit with jurisdiction and venue over all challenges to NRC enforcement orders, also states that jurisdiction and venue is proper in any court of appeals in which the petitioner resides or has its principal office.\60\ Non-licensed individuals challenging enforcement actions could file such challenges where they reside. Therefore, the Commission believes that it would be unwise to give additional weight to the D.C. Circuit's decision not to fully embrace the deliberate ignorance standard and relatively less weight to every other Federal circuit, which have each more fully embraced the deliberate ignorance standard.\61\ --------------------------------------------------------------------------- \60\ 28 U.S.C. 2342(4), 2343. \61\ The First, Third, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuit Courts of Appeals have incorporated willful blindness or deliberate ignorance into their pattern or model jury instructions. Pattern or model jury instructions are plain language formulations of case law that judges may provide to juries as legal explanations. These jury instructions are given legal weight through their use in trials and subsequent approval of that use on appeal. The Second Circuit, see, e.g., United States v. Coplan, 703 F.3d 46 (2d Cir. 2012), and Fourth Circuit, see, e.g., United States v. Poole, 640 F.3d 114 (4th Cir. 2011), have applied deliberate ignorance or willful blindness in case law. --------------------------------------------------------------------------- Additionally, the Commission disagrees with the comment that the Supreme Court's Global-Tech decision is inapplicable. The Court acknowledged that it was not briefed on the question of whether to endorse the deliberate ignorance standard for all criminal cases requiring the government to prove knowledge. In rebutting Justice Kennedy's dissent, the Court stated that it could think of no reason to ``protect . . . parties who actively encourage others to violate patent rights and who take deliberate steps to remain ignorant of those rights despite a high probability that the rights exist and are being infringed.'' \62\ The majority's rationale applies with equal force to nuclear regulation. Moreover, although Global-Tech is a civil case, it relied on criminal cases to distill a definition of deliberate ignorance and several courts of appeals have referenced or applied Global-Tech in criminal jury instructions and criminal sentencing.\63\ Additionally, Federal circuits have approved application of the deliberate ignorance standard in a variety of criminal and civil cases.\64\ --------------------------------------------------------------------------- \62\ Global-Tech Appliances, Inc. v. SEB, S.A., 131 S. Ct. 2060, 2069 n.8 (2011). \63\ See, e.g., United States v. Goffer, 721 F.3d 113, 127-28 (2d Cir. 2013); United States v. Brooks, 681 F.3d 678, 702 n.19 (5th Cir. 2012); United States v. Butler, 646 F.3d 1038, 1041 (8th Cir. 2011). \64\ See, e.g., United States v. Goffer, 721 F.3d 113, (2d Cir. 2013) (upholding a deliberate ignorance jury instruction in a case involving charges of conspiracy to commit securities fraud and securities fraud); United States v. Yi, 704 F.3d 800 (9th Cir. 2013) (upholding a deliberate ignorance jury instruction in a case involving a charge of conspiracy to violate the Clean Air Act); United States v. Brooks, 681 F.3d 678 (5th Cir. 2012) (affirming provision of the deliberate ignorance jury instruction in a case involving charges of false reporting of natural gas trades in violation of the Commodity Exchange Act and the federal wire fraud statute); United States v. Jinwright, 683 F.3d 471 (4th Cir. 2012) (finding the provision of the deliberate ignorance instruction was not an abuse of discretion in a case involving charges of a conspiracy to defraud and tax evasion); Tommy Hilfiger Licensing, Inc. v. Goody's Family Clothing, Inc., 2003 WL 22331254 (N.D. Ga. 2003) (applying a deliberate ignorance standard to a Section 1117 trademark infringement claim). --------------------------------------------------------------------------- As previously stated, the NRC is not adopting the proposed amendment to the Deliberate Misconduct Rule because the practical difficulties with its implementation would likely outweigh the potential benefits. Comment 5: Lack of Guidance The NEI and STARS stated that the NRC failed to issue draft guidance with the proposed rule and should not make the final rule effective until after the NRC publishes draft guidance for public comment and then finalizes that guidance. The NEI stated that NRC policy requires that the agency issue draft guidance in parallel with proposed rules, citing the SRM to SECY-11-0032, ``Consideration of the Cumulative Effects of Regulation in the Rulemaking Process,'' dated October 11, 2011 (ADAMS Accession No. ML112840466). The NEI further stated that the final rule should require the Director of the Office of Enforcement to formally certify to the Commission that he or she has reviewed the staff's application of deliberate ignorance before issuing any violation relying on the standard. The NEI also suggested that the NRC provide examples of circumstances that are categorically excluded (i.e., safe harbors) from enforcement on the basis of deliberate ignorance. Mr. Lieberman expressed support for the proposed rule but also suggested that the NRC provide hypothetical examples of conduct that does and does [[Page 63416]] not satisfy the deliberate ignorance standard in the statement of considerations for the final rule. NRC Response: The Commission is in general agreement that, if adopted, the rule would benefit from the development of implementing guidance. However, as stated previously, the Commission is has decided not to adopt the proposed amendments to the Deliberate Misconduct Rule. Therefore, there is no need for draft guidance as requested by the commenters. Comment 6: Proposed Rule Would Discourage Participation in Licensed Activities and Is Not Necessary To Deter Deliberate Misconduct The NEI commented that the proposed rule would discourage participation in licensed activities and nuclear employment and noted that the Commission acknowledged this concern in the 1991 Deliberate Misconduct Rule. The NEI commented that the proposed rule is not necessary for deterrent effect because the risk of criminal prosecution is a sufficient deterrent. The commenter also stated that, rather than expanding the Deliberate Misconduct Rule to encompass more individual behavior, the NRC still has the option in situations where an individual engages in improper conduct beyond the reach of the current Deliberate Misconduct Rule to issue sanctions to the company to address the NRC's concerns. NRC Response: The Commission acknowledges the commenter's concern with respect to participation and employment in the nuclear field and notes that commenters raised and the Commission responded to a similar concern with respect to the 1991 Deliberate Misconduct Rule.\65\ The Commission also acknowledges that the agency continues to have the ability to take enforcement action against a licensee for an individual's conduct that results in a violation of NRC requirements but does not amount to deliberate misconduct. However, as stated previously, the Commission has decided not to adopt the proposed changes to the Deliberate Misconduct Rule because practical difficulties outweigh the potential benefits. Therefore the Commission did not reach this issue. --------------------------------------------------------------------------- \65\ 56 FR 40675; August 15, 1991. --------------------------------------------------------------------------- Comments Concerning Immediately Effective Orders Citing statements from the Geisen Board majority and the additional statement from Judge Farrar, NEI and STARS stated that immediately effective orders should be issued less frequently and be required to contain greater detail. These commenters also stated that the NRC staff should be required to release the Office of Investigations report and all evidence to the individual challenging the order in such a proceeding. The commenters also stated that the Commission should further define what constitutes ``adequate evidence'' for immediate effectiveness challenge purposes. The commenters suggested revising 10 CFR 2.202(a)(5) to remove the reference to ``willful'' violations because the NRC need not make an order immediately effective solely based on the violation's willfulness. The NEI and STARS proposed further changes to 10 CFR 2.202(c)(2)(ii) to clarify that the person challenging an immediately effective enforcement order need not testify in such a hearing because doing so may compromise his or her Fifth Amendment right against self- incrimination. The commenters also advocated including a requirement imposing more stringent requirements and qualifications for persons testifying on behalf of the NRC staff in challenges to immediately effective orders. Additionally, the commenters stated that the final rule should include an additional sentence stating that if the presiding officer orders live testimony, the parties may cross examine witnesses when it would assist the presiding officer's decision on the motion to set aside the immediate effectiveness of the order. The NEI and STARS commented that the revision to 10 CFR 2.202(c)(2)(iii) should also require that the NRC staff reply to a motion in writing, rather than providing the option to respond orally, in order to prevent the staff's ability to ``ambush'' or ``sandbag'' the individual challenging the order. These commenters also stated that the final rule should make clear that NRC staff cannot use this opportunity to expand the scope of arguments set forth in the original immediately effective order. The NEI and STARS commented that the final rule should revise 10 CFR 2.202(c)(2)(viii) to require that if the presiding officer sets aside an immediately effective order, the order setting aside immediate effectiveness will not be stayed automatically and will only be stayed if the NRC staff files and the Commission grants a motion for a stay under 10 CFR 2.342. NRC Response: The Commission disagrees with these comments and declines to adopt these changes to the NRC's process for issuing and adjudicating immediately effective orders. The proposed rule sought comments on the changes to 10 CFR 2.202(c); however, as stated in the proposed rule, these changes were intended to clarify evidentiary burdens and the authority of the presiding officer. The final rule clarifies that the NRC staff bears the burden of persuasion in hearings challenging the immediate effectiveness of orders and clarifies that the presiding officer has authority pursuant to 10 CFR 2.319 to order live testimony. The final rule also clarifies how live testimony can be requested and in what manner it may take form. The final rule also contains non-substantive changes intended to improve the clarity and readability of 10 CFR 2.202 by dividing the lengthy paragraph (c) into shorter paragraphs. Several of the commenters' proposed changes are either already addressed in this final rulemaking, or the current rules are adequately flexible to address their concerns without adopting their proposed changes. For example, with respect to the comment recommending that if the presiding officer orders live testimony, then the parties may cross examine witnesses when it would assist the presiding officer's decision on the motion to set aside the immediate effectiveness of the order, the presiding officer already has the power to order cross examination pursuant to 10 CFR 2.319. Additionally, 10 CFR 2.319 currently describes the duty of the presiding officer in an NRC adjudication to conduct a fair and impartial hearing and to take the necessary action to regulate the course of the hearing and the conduct of its participants. Parties can direct concerns that the NRC staff is inappropriately expanding the scope of argument to the presiding officer for resolution pursuant to this authority. The Commission does not agree with concerns that the NRC staff should reply in writing in advance of live testimony to prevent it from ``ambushing'' the individual challenging the order. If testimony of individuals is truthful and complete, knowing the staff's response in advance of testifying should have little bearing on its substance. Further, with respect to the commenters' constitutional concerns, it is well established that the Fifth Amendment privilege against self- incrimination can be asserted in administrative proceedings.\66\ Parties have invoked the privilege in NRC enforcement proceedings, including the Geisen proceeding.\67\ Given the availability of [[Page 63417]] the privilege in NRC enforcement proceedings, the Commission declines to adopt the proposed change. --------------------------------------------------------------------------- \66\ See Chavez v. Martinez, 538 U.S. 760, 770 (2003) (citing Kastigar v. United States, 406 U.S. 441, 453 (1972)). \67\ See David Geisen, LBP-06-25, 64 NRC 367, 397 n.131 (2006). See also, e.g., Steven P. Moffitt, LBP-06-05, 64 NRC 431, 433 n.2 (2006). --------------------------------------------------------------------------- As for the remaining comments, the Commission appreciates the commenters' input on its process for issuing and adjudicating immediately effective orders, but additional substantive changes to 10 CFR 2.202(c)(2) or proposals to significantly overhaul its procedures for challenging immediately effective orders are beyond the scope of this rulemaking. The Commission notes that the commenters are able to submit these recommendations as a petition for rulemaking via the 10 CFR 2.802 petition for rulemaking process. The Commission takes the commenters' concerns with fairness in its adjudicatory procedures seriously; however, the proposed changes to 10 CFR 2.202 were limited to clarifying changes to address specific concerns regarding the application of 10 CFR 2.202(c) in certain circumstances. The multiple additional procedural changes that the commenters recommend would be more appropriately addressed in the context of a comprehensive assessment of the NRC's rules of practice and procedure in 10 CFR part 2, which would ensure compliance with the NRC's obligations under the Administrative Procedure Act to allow for notice and comment on proposed rules before they are adopted. Adopting the commenters' proposed changes in this rulemaking would not allow for sufficient notice-and-comment opportunities for other interested parties, and the NRC therefore declines to do so. V. Section-by-Section Analysis Immediate Effectiveness of Orders Rule Changes Section 2.202 The rule makes several changes to 10 CFR 2.202(c)(2)(i). The rule revises 10 CFR 2.202(c)(2)(i) by dividing it into several smaller paragraphs. The rule revises paragraph 10 CFR 2.202(c)(2)(i) to include only the first two sentences of the current 10 CFR 2.202(c)(2)(i), which concern the right of the party subject to an immediately effective order to challenge the immediate effectiveness of that order. The rule further revises the first sentence to add a cross reference to 10 CFR 2.202(a)(5) and make other minor, clarifying editorial changes to that sentence. The rule adds a new paragraph 10 CFR 2.202(c)(2)(ii), which allows any party to file a motion with the presiding officer requesting that the presiding officer order live testimony. Paragraph 10 CFR 2.202(c)(2)(ii) also authorizes the presiding officer, on its own motion, to order live testimony. The rule redesignates the third sentence of the current 10 CFR 2.202(c)(2)(i) as a new paragraph 10 CFR 2.202(c)(2)(iii), which authorizes the NRC staff to present its response through live testimony rather than a written response in those cases where the presiding officer orders live testimony. The rule adds a new paragraph 10 CFR 2.202(c)(2)(iv), which provides that the presiding officer shall conduct any live testimony pursuant to 10 CFR 2.319. The rule makes a minor clarifying change to 10 CFR 2.202(c)(2)(ii) and redesignates that paragraph as 10 CFR 2.202(c)(2)(v). The rule adds a new paragraph 10 CFR 2.202(c)(2)(vi), which clarifies that the licensee or other person challenging the immediate effectiveness of an order bears the burden of going forward, whereas the NRC staff bears the burden of persuasion that adequate evidence supports the grounds for the immediately effective order and that immediate effectiveness is warranted. The rule makes minor clarifying changes to the fourth and fifth sentences of 10 CFR 2.202(c)(2)(i), which direct the presiding officer's expeditious disposition of the motion to set aside immediate effectiveness and prohibit the presiding officer from staying the immediate effectiveness of the order, respectively, and redesignates those sentences as a new paragraph 10 CFR 2.202(c)(2)(vii). The rule makes minor clarifying changes to the eighth sentence of 10 CFR 2.202(c)(2)(i), and redesignates the sixth, seventh, and eighth sentences of 10 CFR 2.202(c)(2)(i) as new paragraph 10 CFR 2.202(c)(2)(viii). These sentences (1) direct the presiding officer to uphold the immediate effectiveness of the order if it finds that there is adequate evidence to support immediate effectiveness, (2) address the final agency action status of an order upholding immediate effectiveness, (3) address the presiding officer's prompt referral of an order setting aside immediate effectiveness to the Commission, and (4) states that the order setting aside immediate effectiveness will not be effective pending further order of the Commission. Conforming Amendments to 10 CFR 150.2 This rule revises the last sentence of 10 CFR 150.2 by adding a cross reference to 10 CFR 61.9b and replacing the cross reference to 10 CFR 71.11 with a cross reference to 10 CFR 71.8. VI. Regulatory Flexibility Certification Under the Regulatory Flexibility Act, as amended (5 U.S.C. 605(b)), the NRC certifies that this rule does not have a significant economic impact on a substantial number of small entities. This final rule affects a number of ``small entities'' as defined by the Regulatory Flexibility Act or the size standards established by the NRC (10 CFR 2.810). However, as indicated in Section VII, ``Regulatory Analysis,'' these amendments do not have a significant economic impact on the affected small entities. The NRC received no comment submissions from an identified small entity regarding the impact of the proposed rule on small entities. VII. Regulatory Analysis The amendments to the rule governing hearings on challenges to immediate effectiveness of orders do not change the existing processes but merely clarify the rule. The final rule makes minor, conforming amendments to 10 CFR 150.2. These amendments do not result in a cost to the NRC or to respondents in hearings on challenges to immediate effectiveness of orders, but a benefit accrues to the extent that potential confusion over the meaning of the NRC's regulations is removed. The NRC believes that this final rule improves the efficiency of NRC enforcement proceedings without imposing costs on either the NRC or on participants in these proceedings. VIII. Backfitting and Issue Finality The final rule revises the immediate effectiveness provisions at 10 CFR 2.202 to state that the respondent bears the burden of going forward with evidence to challenge immediate effectiveness and the NRC staff bears the burden of persuasion on whether adequate evidence supports immediate effectiveness. The final rule also revises 10 CFR 2.202 to clarify that the presiding officer is permitted to order live testimony, either by its own motion, or upon the motion of any party to the proceeding. The revisions to 10 CFR 2.202 clarify the agency's adjudicatory procedures with respect to challenges to immediate effectiveness of orders. These revisions do not change, modify, or affect the design, procedures, or regulatory approvals protected under the various NRC backfitting and issue finality provisions. Accordingly, the revisions to the adjudicatory procedures do not represent backfitting imposed on any [[Page 63418]] entity protected by backfitting provisions in 10 CFR parts 50, 70, 72, or 76, nor are they inconsistent with any issue finality provision in 10 CFR part 52. IX. Cumulative Effects of Regulation Cumulative Effects of Regulation do not apply to this final rule because it is an administrative rule. The final rule only (1) makes amendments to the NRC's regulations regarding challenges to the immediate effectiveness of NRC enforcement orders to clarify the burden of proof and to clarify the authority of the presiding officer to order live testimony in resolving these challenges and (2) makes conforming amendments to 10 CFR 150.2. X. Plain Writing The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, ``Plain Language in Government Writing,'' published June 10, 1998 (63 FR 31883). XI. National Environmental Policy Act The NRC has determined that the issuance of this final rule relates to enforcement matters and, therefore, falls within the scope of 10 CFR 51.10(d). In addition, the NRC has determined that the issuance of this final rule is the type of action described in categorical exclusions at 10 CFR 51.22(c)(1)-(2). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for this rulemaking. XII. Paperwork Reduction Act This final rule does not contain any new or amended collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing collections of information were approved by the Office of Management and Budget (OMB), approval number 3150-0032. Public Protection Notification The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number. XIII. Congressional Review Act The portion of this action amending 10 CFR 2.202 is a rule as defined in the Congressional Review Act (5 U.S.C. 801-808). However, OMB has not found it to be a major rule as defined in the Congressional Review Act. XIV. Compatibility of Agreement State Regulations Under the ``Policy Statement on Adequacy and Compatibility of Agreement State Programs'' approved by the Commission on June 30, 1997, and published in the Federal Register (62 FR 46517; September 3, 1997), this final rule will be a matter of compatibility between the NRC and the Agreement States, thereby providing consistency among the Agreement States and the NRC requirements. The NRC staff analyzed the rule in accordance with the procedure established within Part III, ``Categorization Process for NRC Program Elements,'' of Handbook 5.9 to Management Directive 5.9, ``Adequacy and Compatibility of Agreement State Programs'' (see http://www.nrc.gov/reading-rm/doc-collections/management-directives/). The NRC program elements (including regulations) are placed into four compatibility categories (See the Compatibility Table in this section). In addition, the NRC program elements can also be identified as having particular health and safety significance or as being reserved solely to the NRC. Compatibility Category A are those program elements that are basic radiation protection standards and scientific terms and definitions that are necessary to understand radiation protection concepts. An Agreement State should adopt Category A program elements in an essentially identical manner to provide uniformity in the regulation of agreement material on a nationwide basis. Compatibility Category B are those program elements that apply to activities that have direct and significant effects in multiple jurisdictions. An Agreement State should adopt Category B program elements in an essentially identical manner. Compatibility Category C are those program elements that do not meet the criteria of Category A or B, but the essential objectives of which an Agreement State should adopt to avoid conflict, duplication, gaps, or other conditions that would jeopardize an orderly pattern in the regulation of agreement material on a nationwide basis. An Agreement State should adopt the essential objectives of the Category C program elements. Compatibility Category D are those program elements that do not meet any of the criteria of Category A, B, or C, and, therefore, do not need to be adopted by Agreement States for purposes of compatibility. Health and Safety (H&S) are program elements that are not required for compatibility but are identified as having a particular health and safety role (i.e., adequacy) in the regulation of agreement material within the State. Although not required for compatibility, the State should adopt program elements in this H&S category based on those of the NRC that embody the essential objectives of the NRC program elements because of particular health and safety considerations. Compatibility Category NRC are those program elements that address areas of regulation that cannot be relinquished to Agreement States under the Atomic Energy Act, as amended, or provisions of 10 CFR. These program elements are not adopted by Agreement States. The following table lists the parts and sections that will be revised and their corresponding categorization under the ``Policy Statement on Adequacy and Compatibility of Agreement State Programs.'' The Agreement States have 3 years from the final rule's effective date, as noted in the Federal Register, to adopt compatible regulations. Table 1--Compatibility Table for Final Rule ---------------------------------------------------------------------------------------------------------------- Compatibility Section Change Subject --------------------------------------- Existing New ---------------------------------------------------------------------------------------------------------------- Part 2 ---------------------------------------------------------------------------------------------------------------- 2.202(c)........................ Revised........... Orders............ NRC............... NRC. ---------------------------------------------------------------------------------------------------------------- Part 150 ---------------------------------------------------------------------------------------------------------------- 150.2........................... Revised........... Scope............. D................. D. ---------------------------------------------------------------------------------------------------------------- [[Page 63419]] XV. Voluntary Consensus Standards The National Technology Transfer and Advancement Act of 1995, Public Law 104-113, requires that Federal agencies use technical standards that are developed by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or is otherwise impractical. In this rule, the NRC is clarifying two aspects of challenges to the immediate effectiveness of NRC enforcement orders: (1) The burden of proof and (2) the authority of the presiding officer to order live testimony in resolving such a challenge. The NRC is also making conforming amendments to 10 CFR 150.2. This action does not constitute the establishment of a standard that contains generally applicable requirements. List of Subjects 10 CFR Part 2 Administrative practice and procedure, Antitrust, Byproduct material, Classified information, Confidential business information; Freedom of information, Environmental protection, Hazardous waste, Nuclear energy, Nuclear materials, Nuclear power plants and reactors, Penalties, Reporting and recordkeeping requirements, Sex discrimination, Source material, Special nuclear material, Waste treatment and disposal. 10 CFR Part 150 Criminal penalties, Hazardous materials transportation, Intergovernmental relations, Nuclear energy, Nuclear materials, Penalties, Reporting and recordkeeping requirements, Security measures, Source material, Special nuclear material. For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR parts 2 and 150 as follows: PART 2--AGENCY RULES OF PRACTICE AND PROCEDURE 0 1. The authority citation for part 2 continues to read as follows: Authority: Atomic Energy Act of 1954, secs. 29, 53, 62, 63, 81, 102, 103, 104, 105, 161, 181, 182, 183, 184, 186, 189, 191, 234 (42 U.S.C. 2039, 2073, 2092, 2093, 2111, 2132, 2133, 2134, 2135, 2201, 2231, 2232, 2233, 2234, 2236, 2239, 2241, 2282); Energy Reorganization Act of 1974, secs. 201, 206 (42 U.S.C. 5841, 5846); Nuclear Waste Policy Act of 1982, secs. 114(f), 134, 135, 141 (42 U.S.C. 10134(f), 10154, 10155, 10161); Administrative Procedure Act (5 U.S.C. 552, 553, 554, 557, 558); National Environmental Policy Act of 1969 (42 U.S.C. 4332); 44 U.S.C. 3504 note. Section 2.205(j) also issued under Sec. 31001(s), Pub. L. 104- 134, 110 Stat. 1321-373 (28 U.S.C. 2461 note). 0 2. In Sec. 2.202, revise paragraph (c)(2) to read as follows: Sec. 2.202 Orders. * * * * * (c) * * * (2)(i) The licensee or other person to whom the Commission has issued an immediately effective order in accordance with paragraph (a)(5) of this section, may, in addition to demanding a hearing, at the time the answer is filed or sooner, file a motion with the presiding officer to set aside the immediate effectiveness of the order on the ground that the order, including the need for immediate effectiveness, is not based on adequate evidence but on mere suspicion, unfounded allegations, or error. The motion must state with particularity the reasons why the order is not based on adequate evidence and must be accompanied by affidavits or other evidence relied on. (ii) Any party may file a motion with the presiding officer requesting that the presiding officer order live testimony. Any motion for live testimony must be made in conjunction with the motion to set aside the immediate effectiveness of the order or any party's response thereto. The presiding officer may, on its own motion, order live testimony. The presiding officer's basis for approving any motion for, or ordering on its own motion, live testimony shall be that taking live testimony would assist in its decision on the motion to set aside the immediate effectiveness of the order. (iii) The NRC staff shall respond in writing within 5 days of the receipt of either a motion to set aside the immediate effectiveness of the order or the presiding officer's order denying a motion for live testimony. In cases in which the presiding officer orders live testimony, the staff may present its response through live testimony rather than a written response. (iv) The presiding officer shall conduct any live testimony pursuant to its powers in Sec. 2.319 of this part, except that no subpoenas, discovery, or referred rulings or certified questions to the Commission shall be permitted for this purpose. (v) The presiding officer may, on motion by the staff or any other party to the proceeding, where good cause exists, delay the hearing on the immediately effective order at any time for such periods as are consistent with the due process rights of the licensee or other person and other affected parties. (vi) The licensee or other person challenging the immediate effectiveness of an order bears the burden of going forward with evidence that the immediately effective order is not based on adequate evidence, but on mere suspicion, unfounded allegations, or error. The NRC staff bears the burden of persuading the presiding officer that adequate evidence supports the grounds for the immediately effective order and immediate effectiveness is warranted. (vii) The presiding officer shall issue a decision on the motion to set aside the immediate effectiveness of the order expeditiously. During the pendency of the motion to set aside the immediate effectiveness of the order or at any other time, the presiding officer may not stay the immediate effectiveness of the order, either on its own motion, or upon motion of the licensee or other person. (viii) The presiding officer shall uphold the immediate effectiveness of the order if it finds that there is adequate evidence to support immediate effectiveness. An order upholding immediate effectiveness will constitute the final agency action on immediate effectiveness. The presiding officer will promptly refer an order setting aside immediate effectiveness to the Commission and such order setting aside immediate effectiveness will not be effective pending further order of the Commission. * * * * * PART 150--EXEMPTIONS AND CONTINUED REGULATORY AUTHORITY IN AGREEMENT STATES AND IN OFFSHORE WATERS UNDER SECTION 274 0 3. The authority citation for part 150 continues to read as follows: Authority: Atomic Energy Act of 1954, secs. 11, 53, 81, 83, 84, 122, 161, 181, 223, 234, 274 (42 U.S.C. 2014, 2201, 2231, 2273, 2282, 2021); Energy Reorganization Act of 1974, sec. 201 (42 U.S.C. 5841); Nuclear Waste Policy Act of 1982, secs. 135, 141 (42 U.S.C. 10155, 10161); 44 U.S.C. 3504 note. 0 4. In Sec. 150.2, revise the last sentence to read as follows: Sec. 150.2 Scope. * * * This part also gives notice to all persons who knowingly provide to any licensee, applicant for a license or certificate or quality assurance program approval, holder of a certificate or quality assurance program approval, contractor, or subcontractor, any components, equipment, materials, or [[Page 63420]] other goods or services that relate to a licensee's, certificate holder's, quality assurance program approval holder's or applicant's activities subject to this part, that they may be individually subject to NRC enforcement action for violation of Sec. Sec. 30.10, 40.10, 61.9b, 70.10, and 71.8. Dated at Rockville, Maryland, this 13th day of October, 2015. For the Nuclear Regulatory Commission. Annette L. Vietti-Cook, Secretary of the Commission. [FR Doc. 2015-26590 Filed 10-19-15; 8:45 am] BILLING CODE 7590-01-P
![63409
Rules and Regulations Federal Register
Vol. 80, No. 202
Tuesday, October 20, 2015
This section of the FEDERAL REGISTER Search.’’ For problems with ADAMS, testimony, including cross examination
contains regulatory documents having general please contact the NRC’s Public of witnesses, if it will assist in the
applicability and legal effect, most of which Document Room (PDR) reference staff at presiding officer’s decision. These are
are keyed to and codified in the Code of 1–800–397–4209, 301–415–4737, or by not substantive changes to the agency’s
Federal Regulations, which is published under email to pdr.resource@nrc.gov. The enforcement procedures, but rather
50 titles pursuant to 44 U.S.C. 1510.
ADAMS accession number for each confirm existing burdens and presiding
The Code of Federal Regulations is sold by document referenced (if it is available in officer authority.
the Superintendent of Documents. Prices of ADAMS) is provided the first time that In this final rule, the Commission is
new books are listed in the first FEDERAL it is mentioned in the SUPPLEMENTARY not adopting the previously proposed
REGISTER issue of each week. INFORMATION section. amendment 1 that would have
• NRC’s PDR: You may examine and incorporated the concept of ‘‘deliberate
purchase copies of public documents at ignorance’’ as an additional basis upon
NUCLEAR REGULATORY the NRC’s PDR, Room 01–F21, One which the NRC could take enforcement
COMMISSION White Flint North, 11555 Rockville action against an individual for
Pike, Rockville, Maryland 20852. violating the rule. The Commission
10 CFR Parts 2 and 150 FOR FURTHER INFORMATION CONTACT: agrees with public commenters’ concern
[NRC–2013–0132] Esther Houseman, Office of the General that the subjectivity of the deliberate
RIN 3150–AJ27
Counsel, telephone: 301–415–2267, ignorance standard makes it difficult to
email: Esther.Houseman@nrc.gov; or implement. This difficulty would make
Hearings on Challenges to the Eric Michel, Office of the General the enforcement process more complex
Immediate Effectiveness of Orders Counsel, telephone: 301–415–1177, and burdensome, and any
email: Eric.Michel2@nrc.gov; U.S. corresponding benefits would not
AGENCY: Nuclear Regulatory Nuclear Regulatory Commission, outweigh these disadvantages. This
Commission. Washington, DC 20555–0001. decision is discussed in more detail in
ACTION: Final rule. SUPPLEMENTARY INFORMATION: Section IV, ‘‘Public Comment Analysis,’’
Executive Summary of this document.
SUMMARY: The U.S. Nuclear Regulatory
Commission (NRC) is amending its The U.S. Nuclear Regulatory Table of Contents
regulations regarding challenges to the Commission (NRC) is amending its I. Background
immediate effectiveness of NRC regulations regarding the issuance of II. Discussion
enforcement orders to clarify the burden immediately effective orders to clarify III. Opportunities for Public Participation
of proof and to clarify the authority of the burden of proof in proceedings on IV. Public Comment Analysis
the presiding officer to order live challenges to the immediate V. Section-by-Section Analysis
testimony in resolving these challenges. effectiveness of such orders and the VI. Regulatory Flexibility Certification
DATES: This final rule is effective on VII. Regulatory Analysis
authority of the presiding officer in such
VIII. Backfitting and Issue Finality
November 19, 2015. proceedings to order live testimony. In IX. Cumulative Effects of Regulation
ADDRESSES: Please refer to Docket ID NRC enforcement proceedings, the X. Plain Writing
NRC–2013–0132 when contacting the recipient of an order ordinarily may XI. National Environmental Policy Act
NRC about the availability of challenge the validity of that order XII. Paperwork Reduction Act
information for this final rule. You may before its terms become effective at a XIII. Congressional Review Act
obtain publicly-available information later specified date. However, in certain XIV. Compatibility of Agreement State
related to this final rule by any of the circumstances, the NRC may issue Regulations
orders to regulated entities or XV. Voluntary Consensus Standards
following methods:
• Federal rulemaking Web site: Go to individuals that are ‘‘immediately I. Background
http://www.regulations.gov and search effective,’’ meaning the order’s terms are
for Docket ID NRC–2013–0132. Address effective upon issuance and remain in On January 4, 2006, the U.S. Nuclear
questions about NRC dockets to Carol effect even during the pendency of a Regulatory Commission (NRC) issued an
Gallagher; telephone: 301–415–3463; challenge. These amendments confirm immediately effective order to Mr.
email: Carol.Gallagher@nrc.gov. For that the recipient of the immediately David Geisen, a former employee at the
technical questions contact the effective order has the burden to initiate Davis-Besse Nuclear Power Station,
individual listed in the FOR FURTHER a challenge regarding the order’s barring him from employment in the
INFORMATION CONTACT section of this immediate effectiveness and present nuclear industry for 5 years.2 The order
final rule. evidence that the order, including the
• NRC’s Agencywide Documents need for immediate effectiveness, is not 1 On February 11, 2014, the NRC published the
Access and Management System based on adequate evidence. The proposed amendments in a proposed rule entitled,
mstockstill on DSK4VPTVN1PROD with RULES
‘‘Deliberate Misconduct Rule and Hearings on
(ADAMS): You may obtain publicly- amendments also clarify that the NRC Challenges to the Immediate Effectiveness of
available documents online in the staff ultimately bears the burden of Orders’’ (79 FR 8097). The NRC changed the title
ADAMS Public Documents collection at persuasion that immediate effectiveness of this final rule to ‘‘Hearings on Challenges to the
http://www.nrc.gov/reading-rm/ is warranted. Additionally, these Immediate Effectiveness of Orders’’ to more clearly
reflect that the proposed changes to the Deliberate
adams.html. To begin the search, select amendments confirm that the presiding Misconduct Rule were not adopted.
‘‘ADAMS Public Documents’’ and then officer in a challenge to the immediate 2 David Geisen, LBP–09–24, 70 NRC 676 (2009),
select ‘‘Begin Web-based ADAMS effectiveness of an order may order live aff’d, CLI–10–23, 72 NRC 210 (2010).
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/1.svg)
![63410 Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations
charged Mr. Geisen with deliberate The lack of certainty as to the specific as part of this rulemaking: (1) The
misconduct in contributing to the basis of the jury’s verdict was burden of proof and (2) the authority of
submission of information to the NRC significant, because if the verdict was the presiding officer to order live
that he knew was not complete or based on actual knowledge, the Board testimony in resolving such a challenge.
accurate in material respects. The U.S. could have applied collateral estoppel This final rule amends 10 CFR 2.202,
Department of Justice (DOJ) later based on the NRC’s identical actual which governs challenges to, and the
obtained a grand jury indictment against knowledge standard and the same facts presiding officer’s review of, the
Mr. Geisen on charges under 18 U.S.C. in the criminal case.8 However, because immediate effectiveness of an order.
1001 for submitting false statements to the general verdict could have been Currently, the Commission may make
the NRC.3 In the criminal case, the judge based on deliberate ignorance, the Board orders immediately effective under 10
gave the jury instructions under the could not apply collateral estoppel, CFR 2.202(a)(5) if it finds that the public
prosecution’s two alternative theories: because the NRC does not recognize health, safety, or interest so requires or
The jury could find Mr. Geisen guilty if conduct meeting the deliberate if willful conduct caused a violation of
he either knew that he was submitting ignorance knowledge standard as the Atomic Energy Act of 1954, as
false statements or if he acted with deliberate misconduct. The Commission amended (AEA), an NRC regulation,
deliberate ignorance of their falsity. The affirmed the Board’s decision.9 This license condition, or previously issued
jury found Mr. Geisen guilty on a outcome shows that the Deliberate Commission order. This final rule
general verdict; that is, the jury found Misconduct Rule, as presently written, amends the NRC’s regulations by
Mr. Geisen guilty without specifying does not provide for an enforcement clarifying the following: (1) Which party
whether it found Mr. Geisen acted out action on the basis of deliberate bears the burden of proof in a hearing
of actual knowledge or deliberate ignorance and the Board cannot apply on a challenge to the immediate
ignorance. The United States Court of collateral estoppel where a parallel DOJ effectiveness of an order, and (2) the
Appeals for the Sixth Circuit upheld Mr. criminal prosecution proceeding may be authority of the presiding officer to call
Geisen’s conviction on appeal.4 based on a finding of deliberate for live testimony in a hearing on a
In the parallel NRC enforcement ignorance. challenge to the immediate effectiveness
proceeding, brought under the agency’s In the Staff Requirements of an order. In developing these
Deliberate Misconduct Rule, § 50.5 of Memorandum (SRM) to SECY–10–0074, amendments to 10 CFR 2.202, the NRC
title 10 of the Code of Federal ‘‘David Geisen, NRC Staff Petition for reviewed the way in which the Board
Regulations (10 CFR), Mr. Geisen’s Review of LBP–09–24 (Aug. 28, 2009),’’ has interpreted the burden of proof in
criminal conviction prompted the NRC’s dated September 3, 2010 (ADAMS hearings on challenges to the immediate
Atomic Safety and Licensing Board (the Accession No. ML102460411), the effectiveness of an order. The NRC also
Board) to consider whether Mr. Geisen Commission directed the NRC’s Office reviewed its current regulations and
was collaterally estopped 5 from of the General Counsel (OGC) to practices regarding the authority of the
denying the same wrongdoing in the conduct a review of three issues: (1) presiding officer to call for live
NRC proceeding.6 The Board found and How parallel NRC enforcement actions testimony in hearings on challenges to
the Commission upheld, on appeal, that and DOJ criminal prosecutions affect the immediate effectiveness of an order.
collateral estoppel could not be applied each other, (2) the issuance of This final rule also makes conforming
because the NRC’s Deliberate immediately effective enforcement amendments to 10 CFR 150.2 by adding
Misconduct Rule did not include orders in matters that DOJ is also a cross reference to 10 CFR 61.9b and
deliberate ignorance and the general pursuing, and (3) the degree of replacing the cross reference to 10 CFR
verdict in the criminal proceeding did knowledge required for pursuing 71.11 with a cross reference to 10 CFR
not specify whether the verdict was violations against individuals for 71.8. These conforming amendments are
based on actual knowledge or deliberate deliberate misconduct. In 2011, OGC necessary because when the NRC first
ignorance.7 conducted the requested review and promulgated the Deliberate Misconduct
provided recommendations to the Rule in 1991, it failed to list 10 CFR
3 United States v. Geisen, 612 F.3d 471, 485–86
Commission for further consideration. 61.9b as a cross reference in 10 CFR
(6th Cir. 2010), cert. denied, 131 S. Ct. 1813 (2011), 150.2; and, although the NRC listed 10
(citing United States v. Geisen, 2008 WL 6124567
In response, in 2012, the Commission
(N.D. Ohio May 2, 2008)). directed OGC to develop a proposed CFR 71.11, which at the time was the 10
4 Id. at 485–86. rule that would incorporate the CFR part 70 Deliberate Misconduct
5 Collateral estoppel precludes a defendant
deliberate ignorance standard into the Rule, as a cross reference in 10 CFR
convicted in a criminal proceeding from Deliberate Misconduct Rule. As part of 150.2, the NRC later redesignated the
challenging in a subsequent civil proceeding any provision as 10 CFR 71.8 and failed to
facts that were necessary for the criminal this effort, the Commission directed
conviction. Collateral estoppel applies to quasi- OGC to examine the definitions of make a conforming amendment to
judicial proceedings such as enforcement hearings deliberate ignorance from all Federal update 10 CFR 150.2.
before the NRC. See, e.g., SEC v. Freeman, 290 circuit courts to aid in developing the As discussed further in the following
F.Supp. 2d 401, 405 (S.D.N.Y. 2003) (‘‘It is settled sections, the Commission is not
that a party in a civil case may be precluded from most appropriate definition of this term
relitigating issues adjudicated in a prior criminal for the NRC. The Commission also adopting in this final rule the previously
proceeding and that the Government may rely on directed OGC to clarify two aspects of proposed amendment to the Deliberate
the collateral estoppel effect of the conviction in the regulations regarding challenges to Misconduct Rule to incorporate the
support of establishing the defendant’s liability in concept of deliberate ignorance as an
the subsequent civil action.’’) (citations omitted). immediate effectiveness of NRC orders
6 Geisen, LBP–09–24, 70 NRC at 709–26; see 10
additional basis upon which the NRC
can take enforcement action against an
mstockstill on DSK4VPTVN1PROD with RULES
CFR 50.5. ‘deliberate misconduct’ standard applied in this
7 The Board stated that ‘‘the [NRC] Staff flatly and case is highly significant, indeed, decisive. The individual for violating the rule.
unmistakably conceded that the ‘deliberate Staff, when moving for collateral estoppel, itself
ignorance’ theory is not embraced within the conceded that ‘the 6th Circuit’s deliberate ignorance Immediately Effective Orders
‘deliberate misconduct’ standard that governs our instruction does not meet the NRC’s deliberate
misconduct standard’.’’ Geisen, CLI–10–23, 72 NRC
The NRC’s procedures to initiate
proceedings.’’ Geisen, LBP–09–24, 70 NRC at 715
(alteration added). In its decision, the Commission at 251 (emphasis in the original) (alteration added). formal enforcement action are found in
stated ‘‘[t]he distinction between the court’s 8 Geisen, CLI–10–23, 72 NRC at 249. subpart B of 10 CFR part 2. These
‘deliberate ignorance’ standard and the [NRC’s] 9 Id. at 254. regulations include 10 CFR 2.202,
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/2.svg)
![Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations 63411
‘‘Orders.’’ An order is a written NRC proposed changes were adopted, with early challenges to the immediate
directive to modify, suspend, or revoke some modifications, in the 1991 final effectiveness aspect of immediately
a license; to cease and desist from a Deliberate Misconduct Rule.19 effective orders.’’ 26 The final rule also
given practice or activity; or to take Specifically, the 1991 final Deliberate provided for an expedited hearing on
another action as appropriate.10 The Misconduct Rule amended 10 CFR both the merits of the immediately
Commission’s statutory authority to 2.202 and other provisions of 10 CFR effective order and a challenge to set
issue an order is Section 161 of the part 2 (10 CFR 2.1, 2.201, 2.204, 2.700, aside immediate effectiveness. The
AEA.11 The Commission may issue and appendix C), to authorize the presiding officer in an immediate
orders in lieu of or in addition to civil issuance of an order to unlicensed effectiveness challenge must dispose of
penalties.12 When the Commission persons otherwise subject to the NRC’s a person’s motion to set aside the
determines that the conduct that caused jurisdiction. immediate effectiveness of the order
a violation was willful or that the public On July 5, 1990, the Commission ‘‘expeditiously,’’ generally within 15
health, safety, or interest requires published another proposed rule that days.27 Therefore, the Commission
immediate action, the Commission may would make additional changes to 10 struck a balance between the
make orders immediately effective, CFR 2.202.20 These additional changes governmental interests in protecting
meaning the subject of the order does pertained to immediately effective public health and safety and an interest
not have an opportunity for a hearing orders. Primarily, the July 5, 1990, in fairness by requiring that challenges
before the order goes into effect.13 proposed rule would have required that to immediately effective orders be heard
Making enforcement orders immediately challenges to immediately effective expeditiously.
effective has been an integral part of 10 orders be heard expeditiously. The
CFR 2.202 since 1962, and Section 9(b) statement of considerations for the July Burden of Going Forward and Burden of
of the Administrative Procedure Act 5, 1990, proposed rule noted that ‘‘the Persuasion
(APA), 5 U.S.C. 558(c), expressly Commission believes that a proper In opposing the immediate
authorizes immediately effective orders. balance between the private and effectiveness aspect of an order, the
On the same day that the Commission governmental interests involved is party subject to the order, or
published the 1990 proposed Deliberate achieved by a hearing conducted on an respondent, must initiate the proceeding
Misconduct Rule, ‘‘Willful Misconduct accelerated basis.’’ 21 The statement of by filing affidavits and other evidence
by Unlicensed Persons,’’ 14 it also considerations also stated that a that state that the order and the NRC
published a related proposed rule, ‘‘motion to set aside immediate staff’s determination that it is necessary
‘‘Revisions to Procedures to Issue effectiveness must be based on one or to make the order immediately effective
Orders,’’ 15 that would expressly allow both of the following grounds: The ‘‘is not based on adequate evidence but
the Commission to issue orders to willful misconduct charged is on mere suspicion, unfounded
unlicensed persons. The Commission unfounded or the public health, safety allegations, or error.’’ 28 The
may issue these orders ‘‘when such or interest does not require the order to respondent’s obligation to challenge the
persons have demonstrated that future be made immediately effective.’’ 22 order is known as the ‘‘burden of going
control over their activities subject to In addition, the July 5, 1990, proposed forward.’’ 29 Section 2.202, however, has
the NRC’s jurisdiction is deemed to be rule provided the following statement been interpreted to mean that the NRC
necessary or desirable to protect public regarding the respective burdens of a staff bears the ‘‘burden of persuasion’’ to
health and safety or to minimize danger party filing a motion to challenge the demonstrate that the order itself, and
to life or property or to protect the immediate effectiveness of an the immediate effectiveness
common defense and security.’’ 16 This immediately effective order and of the determination, are supported by
proposed rule concerned amendments NRC staff: ‘‘adequate evidence.’’ 30 In a 2005
to 10 CFR 2.202 and other 10 CFR part proceeding, the Board described what
2 provisions.17 At the time of these The burden of going forward on the
immediate effectiveness issue is with the the NRC staff must prove, stating,
proposed rules, the Commission’s party who moves to set aside the immediate [T]he staff must satisfy a two-part test: It
regulations only authorized the issuance effectiveness provision. The burden of must demonstrate that adequate evidence—
of an order to a licensee. Therefore, the persuasion on the appropriateness of i.e., reliable, probative, and substantial (but
intent of the 1990 proposed Deliberate immediate effectiveness is on the NRC staff.23 not preponderant) evidence—supports a
Misconduct Rule and its companion After receiving public comments on the conclusion that (1) the licensee violated a
proposed rule was to establish a July 5, 1990, proposed rule, the Commission requirement (10 CFR
mechanism to issue ‘‘an order . . . to an Commission published a final rule on
2.202(a)(1)), and (2) the violation was
unlicensed person who willfully causes ‘willful,’ or the violation poses a risk to ‘the
May 12, 1992.24 The Commission public health, safety, or interest’ that requires
a licensee to be in violation of acknowledged in the May 12, 1992, final
Commission requirements or whose immediate action (id. § 2.202(a)(5)).31
rule that ‘‘an immediately effective
willful misconduct undermines, or calls Although Mr. Geisen never challenged
order may cause a person to suffer loss
into question, the adequate protection of the immediate effectiveness of the
of employment while the order is being
the public health and safety in Commission’s order, one of the Board’s
adjudicated’’ but recognized that the
connection with activities regulated by judges raised the concern that 10 CFR
effects of health and safety violations
the NRC under the [AEA].’’ 18 These 2.202(c)(2)(i) could be interpreted to
are paramount over an individual’s right
place the burden of persuasion on the
10 10 CFR 2.202(a).
of employment.25 Accordingly, the final
11 42 U.S.C. 2201. rule amended 10 CFR 2.202(c) ‘‘to allow 26 Id. at 20194.
mstockstill on DSK4VPTVN1PROD with RULES
12 Section 2.3.5 of the NRC Enforcement Policy 27 Id. at 20196. See also 10 CFR 2.202(c)(2)(i).
19 56 FR 40664; August 15, 1991.
(2013) (ADAMS Accession No. ML13228A199). 28 10 CFR 2.202(c)(2)(i).
13 10 CFR 2.202(b). 20 55 FR 27645. 29 United Evaluation Servs, Inc., LBP–02–13, 55
14 55 FR 12374; April 3, 1990. 21 Id.
NRC 351, 354 (2002).
15 55 FR 12370; April 3, 1990. 22 Id. 30 Id.
16 Id. at 12371. 23 Id. at 27646. 31 Safety Light Corp. (Bloomsburg, Pennsylvania
17 Id. at 12373–74. 24 57 FR 20194. Site), LBP–05–02, 61 NRC 53, 61 (2005) (emphasis
18 Id. at 12372. 25 Id. at 20195. in original).
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00003 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/3.svg)
![63412 Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations
party subject to the order to show that that the NRC staff must show that (1) and 70.10 as the Deliberate Misconduct
the order is based on mere suspicion, adequate evidence supports the grounds Rule provisions applicable to
unfounded allegations, or error.32 This for the order and (2) immediate Agreement State licensees conducting
final rule clarifies that the burden of effectiveness is warranted.36 activities under reciprocity in areas of
persuasion is the obligation of the NRC This rule further amends 10 CFR NRC jurisdiction.
staff, not the party subject to the order. 2.202(c)(2) to confirm the presiding On January 13, 1998, the NRC revised
officer’s authority to order live its regulations to extend the Deliberate
Authority of the Presiding Officer to testimony, including cross examination Misconduct Rule to include applicants
Order Live Testimony of witnesses, in hearings on challenges for or holders of certificates of
The July 5, 1990, proposed rule’s to the immediate effectiveness of orders compliance issued under 10 CFR part
statement of considerations if the presiding officer concludes that 71, ‘‘Packaging and Transportation of
contemplated the possibility of an taking live testimony would assist in its Radioactive Material.’’ 37 This rule
evidentiary hearing as part of a decision on the motion. Similarly, the designated the 10 CFR part 71
challenge to immediate effectiveness: rule allows any party to the proceeding Deliberate Misconduct Rule provision as
It is expected that the presiding officer to file a motion requesting the presiding 10 CFR 71.11.38 The NRC made a
normally will decide the question of officer to order live testimony. The conforming amendment to 10 CFR 150.2
immediate effectiveness solely on the basis of amendments allow the NRC staff, in by listing 10 CFR 71.11 as a cross
the order and other filings on the record. The cases where the presiding officer orders reference.39 The NRC later redesignated
presiding officer may call for oral argument. live testimony, the option of presenting the provision as 10 CFR 71.8 40 but did
However, an evidentiary hearing is to be held its response through live testimony not make a conforming amendment to
only if the presiding officer finds the record rather than a written response made update the cross reference in 10 CFR
is inadequate to reach a proper decision on within 5 days of its receipt of the
immediate effectiveness. Such a situation is
150.2. The current 10 CFR 150.2 rule
motion. The NRC does not anticipate text still lists the 10 CFR part 71
expected to occur only rarely.33
that permitting the presiding officer to Deliberate Misconduct Rule provision as
The May 12, 1992, final rule, however, allow live testimony would cause delay, 10 CFR 71.11.
simply stated that ‘‘[t]he presiding and even if it were to cause delay, This rule makes conforming
officer may call for oral argument but is public health and safety would not be amendments to 10 CFR 150.2 by adding
not required to do so.’’ 34 Section 2.319 affected because the immediately a cross reference to 10 CFR 61.9b and
outlines the presiding officer’s authority effective order would remain in effect deleting the cross reference to 10 CFR
to ‘‘conduct a fair and impartial hearing throughout the hearing on immediate 71.11 and replacing it with a cross
according to law, and to take effectiveness. reference to 10 CFR 71.8.
appropriate action to control the The rule also amends 10 CFR
prehearing and hearing process, to avoid 2.202(c)(2) to clarify that the presiding III. Opportunities for Public
delay and maintain order,’’ including officer shall conduct any live testimony Participation
the power to examine witnesses, but pursuant to its powers in 10 CFR 2.319, The proposed rule was published on
this power is not specified in 10 CFR except that no subpoenas, discovery, or February 11, 2014, for a 90-day public
2.202. This final rule clarifies the referred rulings or certified questions to comment period that ended on May 12,
presiding officer’s authority to order live the Commission shall be permitted for 2014.41
testimony on challenges to the this purpose. Finally, the rule amends
10 CFR 2.202(c)(2) by dividing the IV. Public Comment Analysis
immediate effectiveness of orders.
paragraph into smaller paragraphs, The NRC received comments from six
II. Discussion adding a cross reference to 10 CFR commenters: The Nuclear Energy
Immediately Effective Orders 2.202(a)(5) (the regulation that Institute, Inc. (NEI), the National
authorizes the Commission to make an Association of Criminal Defense
This rule amends 10 CFR 2.202(c)(2) order immediately effective), and Lawyers (NACDL), STARS Alliance LLC
to clarify that in any challenge to the making other minor edits to improve (STARS), Hogan Lovells LLP (Hogan
immediate effectiveness of an order, the clarity and readability. Lovells), Troutman Sanders LLP
NRC staff bears the burden of
Conforming Amendments (Troutman Sanders), and an individual,
persuasion and the party challenging
Mr. James Lieberman. All six provided
the order bears the burden of going Section 150.2, ‘‘Scope,’’ provides comments on the proposed amendment
forward.35 Specifically, the rule states notice to Agreement State licensees to the Deliberate Misconduct Rule
conducting activities under reciprocity incorporating the concept of deliberate
32 Geisen, ‘‘Additional Views of Judge Farrar,’’
in areas of NRC jurisdiction that they ignorance. One commenter, Mr.
LBP–09–24, 70 NRC at 801 n.12 (‘‘To succeed under
the terms of [10 CFR 2.202(c)(2)(i)], the challenge are subject to the applicable NRC Lieberman, supported the amendment.
brought by the Order’s target must show that ‘the Deliberate Misconduct Rule provisions. The other five commenters opposed the
order, including the need for immediate When the NRC first promulgated the amendment. All comments are
effectiveness, is not based on adequate evidence but Deliberate Misconduct Rule in 1991, it
on mere suspicion, unfounded allegations, or error.’ summarized in this section, by topic.
In addition to having the burden on immediate
failed to list 10 CFR 61.9b as a cross Additionally, two commenters (NEI and
effectiveness, the target is apparently expected to reference in 10 CFR 150.2. At the time, STARS) provided comments on the
address the merits at that point as well, as is 10 CFR 150.2 listed 10 CFR 30.10, 40.10, proposed amendments to 10 CFR
indicated by the next sentence, which requires the
challenge to ‘state with particularity the reasons filing the appropriate motion under 10 CFR 37 63 FR 1890.
why the order is not based on adequate evidence’
mstockstill on DSK4VPTVN1PROD with RULES
2.202(c)(2)(i). This motion ‘‘must state with 38 Id.
and to ‘be accompanied by affidavits or other particularity the reasons why the order is not based at 1899.
evidence relied on.’ 10 CFR 2.202(c)(2)(i). All in 20 on adequate evidence and must be accompanied by
39 Id. at 1901.
days, unless extended. Id. § 2.202(a)(2).’’) (emphasis affidavits or other evidence relied on.’’ 10 CFR 40 In a 2004 rulemaking amending its regulations
in the original). 2.202(c)(2)(i). concerning the packaging and transport of
33 55 FR 27645–46.
36 The Administrative Procedure Act provides radioactive materials, the NRC renumbered 10 CFR
34 57 FR at 20196. 71.11 to 10 CFR 71.8 (69 FR 3698, 3764, 3790;
‘‘[e]xcept as otherwise provided by statute, the
35 The party challenging the order has the proponent of a rule or order has the burden of January 26, 2004).
obligation to initiate the proceeding, namely, by proof.’’ 5 U.S.C. 556(d). 41 79 FR 8097.
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00004 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/4.svg)
![Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations 63413
2.202(c) concerning the immediate One commenter, Mr. Lieberman, circuits have characterized deliberate
effectiveness of orders. The NRC expressed support for the incorporation ignorance jury instructions as means to
received no comments on the proposed of the deliberate ignorance standard properly inform juries that a ‘‘charade of
amendments to 10 CFR 150.2. because the text of the rule ‘‘clearly’’ ignorance’’ can serve as circumstantial
distinguished deliberate ignorance from proof of guilty knowledge.44 Therefore,
Comments Concerning Deliberate persons who act with recklessness or the benefits associated with the
Ignorance careless indifference. Mr. Lieberman deliberate ignorance standard would
Comment 1: Confusion and Practical recommended that the Commission likely not outweigh the practical
Difficulties Associated With provide several hypothetical examples difficulties of its implementation,
Distinguishing Between Deliberate of how and under what circumstances particularly given that the Commission
Ignorance and Carelessness, the deliberate ignorance standard might expects that cases where evidence
Recklessness, or Negligence be applied in the future to more clearly supports a deliberate ignorance finding
explain how the NRC staff would but not actual knowledge will be rare.
The NEI, NACDL, STARS, Hogan differentiate between deliberate The Commission acknowledges Mr.
Lovells, and Troutman Sanders ignorance and careless disregard in Lieberman’s support for the rule and, as
commented that deliberate ignorance is practice. previously stated, agrees that the text of
an inherently vague and highly NRC Response: The Commission the proposed rule accurately
subjective criminal knowledge standard agrees with the comments expressing distinguishes deliberate ignorance from
and that distinguishing deliberate concern that the difficulties in non-deliberate standards, including
ignorance from other, non-deliberate implementing the deliberate ignorance recklessness, negligence, and
states of mind, such as carelessness, standard would likely outweigh its carelessness. However, for the reasons
recklessness, or negligence, would be corresponding benefits. The text of the previously stated, the Commission is
difficult in practice. These commenters proposed rule contains multiple not adopting in this final rule the
expressed concern that adoption of the subjective elements that would require proposed amendment to the Deliberate
deliberate ignorance standard into the NRC staff to assess and demonstrate the Misconduct Rule.
NRC’s regulations may confuse NRC subjective belief for an individual’s Comment 2: Lack of a Compelling
staff and could possibly result in actions or inactions. The Commission Justification
enforcement action against individuals believes the text of the proposed rule
who do not commit deliberate The NEI, NACDL, STARS, Hogan
correctly defines ‘‘deliberate ignorance’’
violations. Lovells, and Troutman Sanders all
in such a way as to distinguish it from
commented that the proposed rule
Specifically, Hogan Lovells expressed careless disregard or other, non-
failed to provide a compelling
concern that NRC staff would have deliberate standards.42 However, after justification for incorporating the
difficulty assessing what an individual further consideration of the difficulties deliberate ignorance standard into the
‘‘subjectively believed’’ and whether the in assessing the facts of a case against Deliberate Misconduct Rule. Several of
individual deliberately took action to this separate intent standard, the these commenters stated that the only
‘‘avoid learning’’ a material fact. The Commission has decided not to adopt justification that the NRC provided for
NEI commented that the ‘‘complex, its proposed amendment to incorporate expanding the scope of the rule was the
legalistic deliberate ignorance standard a deliberate ignorance standard into the NRC staff’s inability to invoke collateral
would be difficult to apply and would Deliberate Misconduct Rule. In this estoppel in the Geisen case. These
promote unnecessary and wasteful regard, the NRC staff already assesses commenters stated that expanding the
litigation without a counterbalancing cases against two intent standards Deliberate Misconduct Rule cannot be
benefit to the public.’’ The NACDL cognizable in our enforcement process— justified by a single case in the
expressed concern that the ‘‘theoretical deliberateness involving actual Deliberate Misconduct Rule’s 25-year
distinction between a person who is knowledge, and all other forms of history and that to fashion a rule to fit
deliberately ignorant and one who is willfulness, including careless a single case is both unnecessary and
reckless or negligent’’ would be ‘‘almost disregard. Careless disregard is different bad policy. The NEI commented that the
impossible to maintain’’ in the NRC only in degree from the new standard of Commission should not view the Geisen
enforcement setting. As additional deliberate ignorance and could frustrate proceedings as illustrative of an
support for these concerns, NEI, STARS, the efficiency of the enforcement additional or unfair ‘‘burden’’ that the
and Hogan Lovells stated that legal process, at least initially, until guidance NRC staff must overcome in deliberate
scholars and courts, including the U.S. were issued and enforcement misconduct enforcement cases. Instead,
Court of Appeals for the District of experience established. The the case simply illustrated the NRC
Columbia Circuit (D.C. Circuit), have Commission also anticipates that, in staff’s responsibility in carrying its
cautioned that a ‘‘deliberate ignorance’’ most NRC enforcement cases, evidence burden when issuing an enforcement
jury instruction in Federal criminal supporting deliberate ignorance would order and that the NRC should not be
trials should only be used sparingly also serve as circumstantial evidence able to dispense with this responsibility
because of the heightened risk that supporting actual knowledge, further by amending the Deliberate Misconduct
defendants may be inadvertently or diminishing the utility of the proposed Rule.
impermissibly convicted on a lesser rule at this time.43 Multiple Federal The NEI and Hogan Lovells also
basis than deliberate ignorance, such as argued that the statement in the
42 The proposed rule text mirrored the definition
recklessness or negligence. The NACDL, proposed rule that ‘‘deficiencies in the
mstockstill on DSK4VPTVN1PROD with RULES
provided by the United States Supreme Court in
NEI, and Troutman Sanders also argued Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct.
that in the majority of cases evidence 2060 (2011). supporting both actual knowledge and deliberate
used to support a finding of deliberate 43 See, e.g., United States v. Arbizo, 833 F.2d 244, avoidance of knowledge of some details of the
ignorance would also serve as 247, 248–49 (10th Cir. 1987) (‘‘One can in fact not transaction, either of which justify the [guilty]
know many detailed facts but still have enough verdict . . . .’’).
circumstantial evidence of actual knowledge to demonstrate consciousness of guilty 44 See, e.g., U.S. v. Conner, 537 F.3d 480, 486 (5th
knowledge, thereby further diminishing conduct sufficient to satisfy the ‘knowing’ element Cir. 2008); U.S. v. Delreal-Ordones, 213 F.3d 1263,
the utility of the proposed rule. of the crime . . . Arbizo’s case presents evidence 1269 (10th Cir. 2000).
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00005 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/5.svg)
![63414 Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations
Deliberate Misconduct Rule became as currently written.46 Conversely, promulgated the original Deliberate
apparent’’ in the Geisen case was DOJ’s parallel criminal prosecution of Misconduct Rule.
incorrect because the Geisen case was Mr. Geisen in Federal court was based NRC Response: The Commission
not a deliberate ignorance case. Rather, on alternate theories of actual disagrees with the comment. Although
the NRC’s order only alleged that Mr. knowledge or deliberate ignorance. The the Commission is not adopting the
Geisen had actual knowledge of the district court provided the deliberate proposed amendment to the Deliberate
falsity of the statements that he ignorance jury instruction, and Mr. Misconduct Rule due to the practical
submitted to the NRC, and that the Geisen was convicted on a general difficulties associated with applying the
Atomic Safety and Licensing Board verdict. On appeal to the U.S. Court of deliberate ignorance standard, the
agreed that the case was only an actual Appeals for the Sixth Circuit (Sixth Commission disagrees with comments
knowledge case. Therefore, according to Circuit), Mr. Geisen challenged the suggesting that the deliberate ignorance
the commenters, the NRC should not district court’s decision to provide the standard was previously analyzed and
use the Geisen case as a basis for the deliberate ignorance jury instruction.47 explicitly rejected when the
rule. The commenters noted that, when The Sixth Circuit reiterated that ‘‘a Commission promulgated the original
promulgating the original Deliberate deliberate ignorance instruction is Deliberate Misconduct Rule in 1991.
Misconduct Rule in 1991, the warranted to prevent a criminal The commenter points to a single
Commission stated that the range of defendant from escaping conviction sentence in the statement of
actions subject to the rule was not merely by deliberately closing his eyes considerations for the proposed rule
expected to ‘‘differ significantly’’ from to the obvious risk that he is engaging that discussed ‘‘careless disregard,’’
those that might subject an individual to in unlawful conduct,’’ but cautioned which uses the phrase ‘‘a situation in
criminal prosecution, and the that this instruction should be used which an individual blinds himself or
commenters noted that one case in sparingly because of the heightened risk herself to the realities of whether a
nearly 25 years does not rise to the level of conviction based on mere negligence, violation has occurred or will occur.’’ 51
of a ‘‘significant’’ difference. carelessness, or ignorance.48 Under this The proposed rule and final rule did not
NRC Response: The Commission standard, the court found the make any other reference related to
disagrees with this comment. Although instruction to be proper because the willful blindness or deliberate ignorance
the Commission recognizes that the district court’s instruction was a correct and did not contain detailed discussion
benefits of the rule would be limited statement of the law and included a on the standards.
limiting instruction—that ‘‘carelessness, The Commission eventually
because it will likely prove decisive in
or negligence, or foolishness on [the eliminated ‘‘careless disregard’’ from the
few cases, the Commission disagrees
defendant’s] part is not the same as final rule in response to public
with the comment that the agency
knowledge and is not enough to comments, which Hogan Lovells
lacked adequate justification to consider
convict’’ foreclosed the possibility that characterizes as the Commission’s
modification of the regulations to
the jury could erroneously convict ‘‘considered and intentional decision’’
address deliberate ignorance. When
Geisen on the basis of negligence or to exclude deliberate ignorance from the
promulgating the Deliberate Misconduct
carelessness.49 Moreover, the court rule. However, the Commission
Rule in 1991, the Commission stated
found that the evidence supported a disagrees that this limited discussion
that deliberate misconduct is a
conviction based on either actual amounts to an express rejection of the
significant and serious matter that poses
knowledge or deliberate ignorance.50 deliberate ignorance standard. In the
a distinct threat to public health and
Had the deliberate ignorance standard 1991 final rule, the Commission did not
safety.45 The NRC’s inability to invoke
been incorporated into the NRC’s focus on the applicability of collateral
collateral estoppel in the Geisen
Deliberate Misconduct Rule, collateral estoppel in a parallel criminal action,
proceeding was not the sole justification
estoppel would have been available to which was one of the justifications for
for proposing to amend the Deliberate
the NRC staff in the Geisen matter. the proposed rule. Further, rejection of
Misconduct Rule. Rather, the As previously stated, the Commission a proposal under previous rulemaking
Commission has always considered is not adopting the proposed would not prevent future Commissions
willful violations of NRC requirements amendment to the Deliberate from reconsidering the matter and
to be of particular concern because the Misconduct Rule because the practical reaching a different conclusion. As
NRC’s regulatory program is dependent difficulties are expected to outweigh the previously stated, the NRC is not
on licensees and their contractors, potential benefits gained from the rule. adopting the proposed amendment to
employees, and agents to act with
Comment 3: Previous Rejection of the the Deliberate Misconduct Rule over
integrity and communicate with candor.
Deliberate Ignorance Standard concerns that practical difficulties with
Therefore, the outcome of the Geisen
its implementation are expected to
proceeding prompted the Commission The NEI stated that the proposed rule outweigh the potential benefits.
to reevaluate the Deliberate Misconduct would conflict with the Commission’s
Rule. decision in the 1991 Deliberate Comment 4: Unsettled Judicial
The Commission also disagrees with Misconduct Rule to exclude from the Precedent
the comment that the Geisen case was rule violations based on careless The NEI, Hogan Lovells, and STARS
not a deliberate ignorance case. While disregard and negligence. Hogan Lovells stated that the proposed rule is
the NRC staff did allege only actual stated that the Commission rejected the premature because of unsettled judicial
knowledge throughout the enforcement deliberate ignorance standard when it precedent. The NEI and Hogan Lovells
proceeding, the NRC staff did not cited as support the D.C. Circuit’s
mstockstill on DSK4VPTVN1PROD with RULES
pursue a deliberate ignorance theory 46 See David Geisen, LBP–09–24, 70 NRC 676, 715
statements in United States v. Alston-
because it conceded deliberate (2009); Geisen, CLI–10–23, 72 NRC 210, 251 (2010).
Graves about the use of the deliberate
47 United States v. Geisen, 612 F.3d 471, 485 (6th
ignorance was not a basis upon which ignorance standard.52 The NEI also
Cir. 2010).
it could pursue enforcement action 48 Id. at 485–86 (citations and internal quotation stated that the DC Circuit’s opinion
under the Deliberate Misconduct Rule marks omitted).
49 Id. 51 55 FR 12375; April 3, 1990.
45 56 FR 40664, 40674; August 15, 1991. 50 Id. at 487. 52 435 F.3d 331 (D.C. Cir. 2006).
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00006 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/6.svg)
![63420 Federal Register / Vol. 80, No. 202 / Tuesday, October 20, 2015 / Rules and Regulations
other goods or services that relate to a Ground Floor, Room W12–140, 1200 labels] which introduces generator control
licensee’s, certificate holder’s, quality New Jersey Avenue SE., Washington, unit (GCU) undervoltage protection.
assurance program approval holder’s or DC. Revision 1 of this [Canadian] AD added a
GCU part number to the applicability of Part
applicant’s activities subject to this part, For service information identified in
III of this [Canadian] AD, in order to ensure
that they may be individually subject to this AD, contact Bombardier, Inc., Q- that all units are fitted with a warning label.
NRC enforcement action for violation of Series Technical Help Desk, 123 Garratt Revision 2 of this [Canadian] AD corrects
§§ 30.10, 40.10, 61.9b, 70.10, and 71.8. Boulevard, Toronto, Ontario M3K 1Y5, the GCU part number in the applicability of
Dated at Rockville, Maryland, this 13th day Canada; telephone 416–375–4000; fax Part III of this [Canadian] AD.
of October, 2015. 416–375–4539; email thd.qseries@ You may examine the MCAI in the AD
For the Nuclear Regulatory Commission. aero.bombardier.com; Internet http:// docket on the Internet at http://
Annette L. Vietti-Cook,
www.bombardier.com. You may view www.regulations.gov/#!document
this referenced service information at Detail;D=FAA-2015-1985-0003.
Secretary of the Commission.
the FAA, Transport Airplane
[FR Doc. 2015–26590 Filed 10–19–15; 8:45 am] Comments
Directorate, 1601 Lind Avenue SW.,
BILLING CODE 7590–01–P Renton, WA. For information on the We gave the public the opportunity to
availability of this material at the FAA, participate in developing this AD. We
call 425–227–1221. It is also available received no comments on the NPRM (80
DEPARTMENT OF TRANSPORTATION on the Internet at http:// FR 36493, June 25, 2015) or on the
www.regulations.gov by searching for determination of the cost to the public.
Federal Aviation Administration and locating Docket No. FAA–2015–
1985. Conclusion
14 CFR Part 39 We reviewed the available data and
FOR FURTHER INFORMATION CONTACT:
[Docket No. FAA–2015–1985; Directorate Assata Dessaline, Aerospace Engineer, determined that air safety and the
Identifier 2014–NM–214–AD; Amendment Avionics and Services Branch, ANE– public interest require adopting this AD
39–18294; AD 2015–21–02]
172, FAA, New York Aircraft as proposed, except for minor editorial
RIN 2120–AA64 Certification Office (ACO), 1600 Stewart changes. We have determined that these
Avenue, Suite 410, Westbury, NY minor changes:
Airworthiness Directives; Bombardier, 11590; telephone 516–228–7301; fax • Are consistent with the intent that
Inc. Airplanes 516–794–5531. was proposed in the NPRM (80 FR
36493, June 25, 2015) for correcting the
AGENCY: Federal Aviation SUPPLEMENTARY INFORMATION: unsafe condition; and
Administration (FAA), Department of Discussion • Do not add any additional burden
Transportation (DOT). upon the public than was already
We issued a notice of proposed proposed in the NPRM (80 FR 36493,
ACTION: Final rule.
rulemaking (NPRM) to amend 14 CFR June 25, 2015).
SUMMARY: We are adopting a new part 39 by adding an AD that would
airworthiness directive (AD) for certain apply to certain Bombardier, Inc. Model Related Service Information Under 1
Bombardier, Inc. Model DHC–8–102, DHC–8–102, –103, –106, –201, –202, CFR Part 51
–103, –106, –201, –202, –301, –311, and –301, –311, and –315 airplanes. The Bombardier has issued the following
–315 airplanes. This AD was prompted NPRM published in the Federal service information.
by reports of un-annunciated failures of Register on June 25, 2015 (80 FR 36493). • Service Bulletin 8–24–84, Revision
the direct current (DC) starter generator, Transport Canada Civil Aviation D, dated April 10, 2014, describes
which caused caution indicators of the (TCCA), which is the aviation authority incorporating Bombardier Modification
affected systems to illuminate and for Canada, has issued Canadian Summary (ModSum) 8Q101710 by
prompted emergency descents and Airworthiness Directive CF–2014–31R2, replacing the GCU with a new GCU, and
landings. This AD requires replacing the dated November 11, 2014 (referred to replacing the GCU label for airplanes
DC generator control units (GCUs) with after this as the Mandatory Continuing having certain Phoenix DC power GCU
new GCUs and replacing the GCU label. Airworthiness Information, or ‘‘the part numbers.
We are issuing this AD to prevent a low MCAI’’), to correct an unsafe condition • Service Bulletin 8–24–89, Revision
voltage condition on the left main DC for certain Bombardier, Inc. Model C, dated November 4, 2014, describes
bus, which, during critical phases of DHC–8–102, –103, –106, –201, –202, incorporating Bombardier ModSum
flight, could result in the loss of flight –301, –311, and –315 airplanes. The 8Q101925 by replacing the GCU with a
management, navigation, and MCAI states: new GCU, and replacing the GCU label
transponder systems, and could affect Four occurrences of un-annunciated failure for airplanes having certain Goodrich
continued safe flight. of the No. 1 Direct Current (DC) Starter DC power GCU part numbers.
Generator prompted emergency descents and This service information is reasonably
DATES: This AD becomes effective
landings resulting from the illumination of available because the interested parties
November 24, 2015. numerous caution indications of the affected have access to it through their normal
The Director of the Federal Register systems. The functionality of the affected course of business or by the means
approved the incorporation by reference systems such as Flight Management System, identified in the ADDRESSES section of
of certain publications listed in this AD Navigation, and transponder systems, were this AD.
as of November 24, 2015. reportedly reduced or lost. Investigation
mstockstill on DSK4VPTVN1PROD with RULES
ADDRESSES: You may examine the AD determined the failure was a result of a low Costs of Compliance
docket on the Internet at http:// voltage condition of the Left Main DC Bus.
During critical phases of flight, the loss of
We estimate that this AD affects 92
www.regulations.gov/#!docket these systems could affect continued safe airplanes of U.S. registry.
Detail;D=FAA-2015-1985; or in person flight. We also estimate that it takes about 3
at the Docket Management Facility, U.S. The original issue of this [Canadian] AD work-hours per product to comply with
Department of Transportation, Docket mandated the modification [replacing certain the basic requirements of this AD. The
Operations, M–30, West Building DC GCUs with new GCUs and replacing average labor rate is $85 per work-hour.
VerDate Sep<11>2014 16:12 Oct 19, 2015 Jkt 238001 PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 E:\FR\FM\20OCR1.SGM 20OCR1](https://thefederalregister.org/doc/80_FR_63611/page/12.svg)
Document Created: 2015-12-14 15:25:24
Document Modified: 2015-12-14 15:25:24
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Final rule. | |
| Dates | This final rule is effective on November 19, 2015. | |
| Contact | Esther Houseman, Office of the General Counsel, telephone: 301-415-2267, email: [email protected]; or Eric Michel, Office of the General Counsel, telephone: 301-415-1177, email: [email protected]; U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001. | |
| FR Citation | 80 FR 63409 | |
| RIN Number | 3150-AJ27 | |
| CFR Citation | 10
CFR
150 10 CFR 2 | |
| CFR Associated | Criminal Penalties; Hazardous Materials Transportation; Intergovernmental Relations; Security Measures; Administrative Practice and Procedure; Antitrust; Byproduct Material; Classified Information; Confidential Business Information; Freedom of Information; Environmental Protection; Hazardous Waste; Nuclear Energy; Nuclear Materials; Nuclear Power Plants and Reactors; Penalties; Reporting and Recordkeeping Requirements; Sex Discrimination; Source Material; Special Nuclear Material and Waste Treatment and Disposal |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR