Today the NRC issued a Final Rule – “Hearings on Challenges to the Immediate Effectiveness of Orders” to amend 10 C.F.R. § 2.202, “Orders” – with respect to challenges to the immediate effectiveness of NRC enforcement orders. The rule changes clarify the burden of proof and the authority of the presiding officer to order live testimony in resolving these challenges. See 80 Fed. Reg. 63,409. Perhaps more importantly, in this final action the Commission declined to adopt a proposed change to the Deliberate Misconduct Rule, 10 C.F.R. § 50.5, that would have incorporated the concept of “deliberate ignorance” as an additional type of deliberate misconduct and therefore an additional basis on which to take enforcement action against an individual or non-licensee.
The genesis of the proposed rule changes was the Geisen matter, which involved criminal and NRC civil enforcement proceedings against a former Davis-Besse employee (Mr. Geisen) for allegedly false statements made to the NRC about the reactor vessel head.
Immediate Effectiveness of Enforcement Orders
Under 10 C.F.R. § 2.202 (and the Administrative Procedure Act), the NRC may make an enforcement order immediately effective (that is, effective in the interim, pending completion of a hearing in which the enforcement action is being challenged). However, recognizing that this may deprive an individual of employment before the matter is adjudicated, the immediate effectiveness of an order may be challenged at the outset of the hearing. Issues were raised by the NRC regarding which party bears the burden of persuasion in challenging the immediate effectiveness of an order and regarding the nature of the testimony that can be heard at this preliminary stage of the hearing process.
Under the current rule, it appears that the presiding officer or board would decide on immediate effectiveness based only on “oral argument” and the record on the order. Effective November 19, 2015, the final rule adds § 2.202(c)(2)(ii) to allow any party to file a motion with the presiding officer requesting that the presiding officer order live testimony and also authorizes the presiding officer, on its own motion, to order live testimony. Secondly, a new § 2.202(c)(2)(vi) will be added to clarify that: (1) the licensee or other person subject to the order has the burden of going forward with evidence that the order is not based on adequate evidence, but on mere suspicion, unfounded allegations, or error; and (2) the NRC staff bears the burden of ultimate persuasion that adequate evidence supports the order and that immediate effectiveness is warranted.
Deliberate Misconduct Rule
The Commission declined to adopt the “deliberate ignorance” concept. This concept from criminal and civil judicial precedent holds that an individual who does not have actual knowledge that his actions will cause a violation (and therefore lacks the normal element of intent for willful misconduct) is nonetheless guilty of willful misconduct if he or she acted to deliberately avoid knowledge of the violation (e.g., a individual transporting illegal contraband has acted with criminal intent if he or she purposely avoided knowledge of the contents of the package). The Commission declined to adopt the rule change largely due to stakeholder concerns that the “subjectivity” of the deliberate ignorance standard would make it difficult to implement.
In the criminal phase of the Geisen matter, the jury was instructed to find Mr. Geisen guilty if either he actually knew that his statements to the NRC were false or if he acted with deliberate ignorance of a violation. The jury found Mr. Geisen guilty under a general verdict, which did not reveal the specific basis for his conviction (actual knowledge or deliberate ignorance). After the criminal case, the NRC attempted to impose civil sanctions to the individual as well. Mr. Geisen challenged that action through the NRC hearing process. The Atomic Safety and Licensing Board considered whether collateral estoppel (a doctrine precluding a defendant in a criminal proceeding from challenging in a subsequent civil proceeding any facts necessary for the conviction) precluded Mr. Geisen from denying NRC wrongdoing. The NRC staff conceded that if Mr. Geisen had been criminally convicted on a deliberate ignorance theory, this would not rise to the level of knowledge required to find a violation of the NRC Deliberate Misconduct Rule. The Board ruled that collateral estoppel did not apply because there was no way to know whether the jury convicted Mr. Geisen based on actual knowledge or based on deliberate intent. In the subsequent hearing, the NRC staff failed to sustain their burden to show actual knowledge, so the enforcement order was lifted. Subsequently, the Commission upheld the Board and instructed the NRC staff to review the degree of knowledge required for pursuing enforcement against individuals for deliberate misconduct.
During the comment period, several stakeholders expressed concerns regarding the proposed rule. Most specifically, stakeholders argued 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.” The NRC agreed, noting that the “text of the proposed rule contain[ed]s multiple subjective elements that would require NRC staff to assess and demonstrate the subjective belief for an individual’s actions or inactions.”
The Commission disagreed with many other industry comments opposing this proposed rule. Ultimately, however, the Commission decided not to adopt the “deliberate ignorance” standard because the benefits of adopting the standard were outweighed by the “practical difficulties” in implementing it.