[Federal Register Volume 62, Number 214 (Wednesday, November 5, 1997)]
[Notices]
[Pages 59906-59907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29242]


=======================================================================
-----------------------------------------------------------------------

NUCLEAR REGULATORY COMMISSION

[Docket No. 150-00005; License No. Colorado 580-1; EA 96-459]


Western Colorado Testing, Inc., Grand Junction, CO; Order 
Imposing Civil Monetary Penalty

I

    Western Colorado Testing, Inc., (WCTI or Licensee) is the holder of 
a General License pursuant to the provisions of 10 CFR 150.20(a). This 
authorizes any person who holds a specific license from an Agreement 
State to conduct the same activity in non-Agreement States subject to 
the provisions of 150.20(b). WCTI holds a specific license from the 
state of Colorado, an Agreement State, License No. 580-1.

II

    An inspection of the Licensee's activities was conducted from 
October 11, 1996, through February 3, 1997, and an investigation was 
conducted from August 14, 1996, through January 8, 1997. The results of 
the inspection and investigation indicated that the Licensee had not 
conducted its activities in full compliance with NRC requirements. A 
written Notice of Violation and Proposed Imposition of Civil Penalty 
(Notice) was served upon the Licensee by letter dated June 13, 1997. 
The notice states the nature of the violation, the provisions of NRC 
requirements that the Licensee had violated, and the amount of the 
civil penalty proposed for the violation.
    The Licensee responded to the Notice in a letter dated July 16, 
1997. In its response, the Licensee stated that facts of the case 
warrant a reconsideration of both the characterization of the violation 
(as willful) and the proposed civil penalty.

III

    After consideration of the Licensee's response and the arguments 
for mitigation or reconsideration of the civil penalty contained 
therein, the NRC staff has determined, as set forth in the Appendix to 
this Order, that the violation occurred as stated and that the penalty 
proposed for the violation designated in the Notice should be imposed.

IV

    In view of the foregoing and pursuant to Section 234 of the Atomic 
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, 
it is hereby ordered That:

    The Licensee pay a civil penalty in the amount of $2,500 within 
30 days of the date of this Order, by check, draft, money order, or 
electronic transfer, payable to the Treasurer of the United States 
and mailed to Mr. James Lieberman, Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, One White Flint North, 11555 
Rockville Pike, Rockville, MD 20852-2738.

V

    The Licensee may request a hearing within 30 days of the date of 
this Order. Where good cause is shown, consideration will be given to 
extending the time to request a hearing. A request for extension of 
time must be made in writing to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, Washington, DC 20555, and include a 
statement of good cause for the extension. A request for a hearing 
should be clearly marked as a ``Request for an Enforcement Hearing'' 
and shall be addressed to the Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, Washington, DC 20555, with a copy to the 
Commission's Document Control Desk, Washington, DC 20555. Copies also 
shall be sent to the Assistant General Counsel for Hearings and 
Enforcement at the same address and to the Regional Administrator, NRC 
Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, TX 76011.
    If a hearing is requested, the Commission will issue an Order 
designating the time and place of the hearing. If the Licensee fails to 
request a hearing within 30 days of the date of this Order (or if 
written approval of an extension of time in which to request a hearing 
has not been granted), the provisions of this Order shall be effective 
without further proceedings. If payment has not been made by that time, 
the matter may be referred to the Attorney General for collection.
    In the event the Licensee requests a hearing as provided above, the 
issue to be considered at such hearing shall be:
    Whether on the basis of the violation admitted by the Licensee, 
this Order should be sustained.

    Dated at Rockville, Maryland this 28th day of October 1997.

    For the Nuclear Regulatory Commission.
James Lieberman,
Director, Office of Enforcement.

Appendix--Evaluation and Conclusions

    On June 13, 1997, a Notice of Violation and Proposed Imposition 
of Civil Penalty (Notice) was issued for the violation identified 
during an NRC inspection and investigation. Western Colorado 
Testing, Inc., (WCTI or Licensee) responded to the Notice in a 
letter dated July 16, 1997. In its response, the Licensee stated 
that facts of the case warrant a reconsideration of both the 
characterization of the violation (as willful) and the proposed 
civil penalty. However, the Licensee did not dispute the violation 
in its response and, in its April 1, 1997 letter responding to the 
inspection report, admitted the violation. The NRC's evaluation of 
the Licensee's request and conclusion regarding the Licensee's 
requests are as follows:

Summary of Licensee's Request for Mitigation

    WCTI stated that, although management was aware of the 
requirement to inform the NRC prior to working in areas under NRC 
jurisdiction, this fact alone does not justify designation of the 
violation as willful, and the corresponding penalty of $2,500. In 
support of its position, the Licensee stated that the Radiation 
Safety Officer (RSO), who was ``not as honest and forthright'' as 
WCTI's president, had represented to WCTI's president that he filed 
the required Form 241; and that WCTI's president made every effort 
to ensure compliance with NRC requirements. WCTI also noted that its 
compliance efforts are reflected by the fact that there has never 
been any previous escalated enforcement action against it. WCTI 
pointed out that, according to the NRC's Enforcement Policy, 
previous escalated enforcement is a factor that is considered in 
assessing a civil penalty, and that this factor was not considered 
in the proposed assessment of the civil penalty.
    WCTI noted that, in cases where the NRC concludes that no 
willful violation has occurred, and no escalated enforcement action 
has been taken within the two prior years or during the two prior 
inspections,

[[Page 59907]]

generally no penalty assessment is even proposed. WCTI maintained 
that its situation was distinguishable from that of other testing 
companies that had been ``fined'' by the NRC for willful violations 
of the same regulations. In this regard, WCTI claimed that it should 
not be classified together with those testing firms in which the 
principals were deliberately ignoring compliance requirements.
    Finally, the Licensee argued that, upon being notified that Form 
241 had not been filed, WCTI took prompt corrective action to ensure 
compliance and effective comprehensive action to prevent recurrence 
of the violation.

NRC Evaluation of Licensee's Request for Mitigation

    Section VI.A. of the Enforcement Policy provides that, in 
general, licensees are held responsible for the acts of their 
employees. The Commission formally considered the responsibility 
issue between a licensee and its employees in its decision 
concerning the Atlantic Research Corporation case, CLI-80-7, dated 
March 14, 1980. In that case, the Commission stated, in part, that 
``a division of responsibility between a licensee and its employees 
has no place in the NRC regulatory regime which is designed to 
implement our obligation to provide adequate protection to the 
health and safety of the public in the commercial nuclear field.''
    Not holding the licensee responsible for the actions of its 
employees, whether such actions result from negligence or willful 
misconduct, is tantamount to not holding the licensee responsible 
for the use or possession of licensed material. If the NRC adopted 
this position, there would be less incentive for licensees to 
monitor their own activities to assure compliance because licensees 
could attribute noncompliance to employee negligence or misconduct. 
Therefore, notwithstanding WCTI's argument that the blame for the 
violation rests with the former company RSO, under long-established 
Commission Policy and case law, the company is still responsible for 
the actions of its former RSO. Further, the NRC notes that the 
violation continued to exist in 1996, after the assignment of a 
newly trained RSO. This detracts from the Licensee's argument that 
the blame lay with one particular former RSO.
    As WCTI noted, Section VI.B.2 of the NRC's Enforcement Policy 
provides for consideration of previous escalated enforcement in the 
civil penalty assessment process. However, the civil penalty 
assessment process considers several factors, including whether the 
violation is willful. If any one of these considerations applies, 
the policy states that the NRC should normally consider 
identification in addition to corrective action in the civil penalty 
assessment process (regardless of the licensee's previous escalated 
enforcement). In this case, the NRC considered both identification 
and corrective action in determining the civil penalty because the 
NRC concluded that the violation was willful.
    The term ``willfulness,'' as defined by Section IV.C. of the NRC 
Enforcement Policy embraces a spectrum of violations ranging from 
deliberate intent to violate or falsify, to and including careless 
disregard for requirements (emphasis added). In this case, as 
described in the NRC's Notice, the NRC concluded that WCTI (not its 
president), through the action of one or more of its 
representatives, committed a violation with careless disregard for 
NRC regulations, a condition that clearly meets the NRC's definition 
of a willful violation. As described in the Notice, the NRC's 
conclusion was based on several grounds, including the fact that 
WCTI had knowledge of the requirement to file NRC Form 241 (which 
WCTI admits in its response).
    As to Licensee's discussion of the NRC Enforcement Policy, civil 
penalties are not normally proposed in cases where the NRC concludes 
that no willful violation has occurred and no escalated enforcement 
action has been taken within the two prior years or two prior 
inspections, provided that prompt and comprehensive corrective 
action is taken. However, the policy provides for consideration of 
civil penalties in cases involving willfulness.
    The NRC reviews each case being considered for enforcement 
action on its own merits to ensure that the severity of a violation 
and enforcement sanction are best suited to the significance of the 
particular violation. In this case, as noted above, the NRC 
concluded that the violation was willful. Therefore, in accordance 
with Section VI.B of the Enforcement Policy, the NRC concluded that: 
(1) No credit was warranted for identification because the NRC 
identified the violation; and (2) credit was warranted for WCTI's 
prompt and comprehensive corrective action (had the NRC concluded 
otherwise, a civil penalty of $5,000 would have been proposed).
    In its response, WCTI claimed that its case was ``readily 
distinguishable'' from other similar enforcement actions such as EA 
95-270, ``Foley Construction Services,'' EA 95-101, ``Testco, 
Inc.,'' and EA 93-241, ``S.K. McBryde, Inc.'' The NRC agrees that 
WCTI's case is distinguishable from the cases cited by WCTI in that 
the cases cited involved deliberate violations, not violations 
involving careless disregard. However, WCTI's comparison of the 
civil penalty in this case to that in the cases cited in flawed in 
that: (1) The civil penalty in the Foley Construction Services case 
was based on the civil penalty assessment process described in an 
earlier Enforcement Policy; 1 (2) the enforcement action 
taken against Testco, Inc., involved an Order Prohibiting 
Involvement in NRC-Licensed Activities to President of the company, 
as well as a civil penalty to the licensee, which was initially 
based on enforcement discretion and subsequently reduced from $5,000 
to $1,000; and (3) the S. K. McBryde case did not involve an NRC 
Form-241 violation, it involved a Severity Level IV violation for 
failure to maintain complete and accurate records and a civil 
penalty that was based on the civil penalty assessment process 
described in the earlier Enforcement Policy.\1\ Furthermore, the 
enforcement action against WCTI is consistent with other recent 
cases involving careless disregard by testing companies to submit 
Form-241 where corrective action credit was warranted. For example, 
penalties of $2,500 were assessed in enforcement actions involving 
EA 96-382, ``Energy Technologies, Inc.,'' EA 96-382, ``Grandin 
Testing Lab, Inc.,'' and EA 96-447, ``Testing Laboratories, Inc.'' 
2
---------------------------------------------------------------------------

    \1\ In this earlier Enforcement Policy, the base amount for a 
Severity Level III was $500 and the civil penalty assessment process 
involved consideration of 6 factors. Under the current Enforcement 
Policy, the base amount for a Severity Level III is $2,500 and the 
civil penalty assessment process involves consideration of 2 
factors.
    \2\ These cases are available on the NRC web site at ``http://
www.nrc.gov/oe/'', which is maintained by the Office of Enforcement.
---------------------------------------------------------------------------

NRC Conclusion

    The NRC concludes that the violation occurred as stated and that 
the Licensee has not provided adequate justification for 
reconsideration of the characterization of the violation as 
``willful'' or for mitigation of the civil penalty. Consequently, 
the proposed civil penalty in the amount of $2,500 should be 
imposed.

[FR Doc. 97-29242 Filed 11-4-97; 8:45 am]
BILLING CODE 7590-01-P