[Federal Register Volume 80, Number 202 (Tuesday, October 20, 2015)]
[Rules and Regulations]
[Pages 63409-63420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26590]
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Rules and Regulations
Federal Register
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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.
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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.
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\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.
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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\
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\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.
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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\
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\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).
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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.
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\8\ Geisen, CLI-10-23, 72 NRC at 249.
\9\ Id. at 254.
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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.
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\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).
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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.
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\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.
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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\
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\20\ 55 FR 27645.
\21\ Id.
\22\ Id.
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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\
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\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.
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\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).
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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,
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\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\
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\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.
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\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).
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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\
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\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.
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\34\ 57 FR at 20196.
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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\
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\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).
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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.
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\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).
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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\
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\41\ 79 FR 8097.
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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.
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\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