[Federal Register Volume 72, Number 249 (Monday, December 31, 2007)]
[Notices]
[Pages 74347-74350]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-25412]


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

NUCLEAR REGULATORY COMMISSION

 [IA-07-048]


In the Matter of Cary W. Hedger; Order Prohibiting Involvement in 
NRC-Licensed Activities (Effective Immediately)

I

    Cary W. Hedger was employed as the Operations Manager and Assistant 
Radiation Safety Officer (RSO) at Alpha Omega Services, Inc. (AOS) in 
January

[[Page 74348]]

2003. Currently, Mr. Hedger is the RSO, President, and an owner of AOS. 
In January 2003, AOS was the holder of a U.S. Nuclear Regulatory 
Commission (NRC or Commission) Certificate of Compliance (CoC) No. 
5979, Revision 10, for the Model No. 5979 package (NRC Docket Number 
71-5979) issued by the NRC, and an NRC-approved Quality Assurance (QA) 
Program Approval holder (NRC Docket Number 71-0086) pursuant to Part 71 
of Title 10 of the Code of Federal Regulations (10 CFR). The CoC 
authorized use of the Model No. 5979 package under the general license 
provisions of 10 CFR 71.12 [currently 10 CFR 71.17]. The QA Program 
Approval satisfied the requirements of 10 CFR 71.12(b) [currently 10 
CFR 71.17(b)], and 10 CFR 71.101(c) [currently 10 CFR 71.101(c)(1)] by 
authorizing activities be conducted under criteria of Subpart H of 10 
CFR Part 71, ``Quality Assurance.''

II

    On November 18, 2004, an NRC inspection was conducted at the AOS 
facility. During that inspection, certain nonconformances regarding a 
shipping package, serial number 1B, CoC No. 5979, Model No. 5979, were 
brought to the NRC's attention. Subsequently, concerns about the 
nonconformances led to an investigation by the NRC's Office of 
Investigation.
    Based on the investigation and Mr. Hedger's presentation at a 
November 8, 2007, pre-decisional enforcement conference, the NRC has 
concluded that Mr. Hedger engaged in two examples of deliberate 
misconduct in violation of 10 CFR 71.8, ``Deliberate misconduct.''
    First, Cary W. Hedger deliberately provided materially inaccurate 
information to an NRC licensee and to a contractor to the licensee. 
Specifically, in January 2003, Mr. Hedger performed a maintenance 
inspection of a Model 5979 shipping package, serial number 1B, NRC 
Certificate of Compliance (CoC) No. 5979, and certified that the 
package conformed to CoC No. 5979, Revision 10. Mr. Hedger purposely 
indicated on the maintenance inspection checklist that the cask end 
caps conformed to the CoC when he knew they did not. The cask end caps 
did not conform to the drawings in the CoC because they were physically 
(weight and materials) and dimensionally (end cap thickness and length 
of bolts) different from the approved end cap designs. AOS then 
returned the package to its owner, Foss Therapy Services (FTS), along 
with the inaccurate maintenance inspection checklist. SPEC was an NRC 
licensee pursuant to 10 CFR Part 110, and a CoC and QA Program Approval 
holder under 10 CFR Part 71. FTS subsequently provided the package to 
Source Production and Equipment Company (SPEC) for export of licensed 
radioactive material on FTS's behalf. AOS specifically provided the 
inaccurate maintenance inspection checklist to FTS by, at minimum, 
giving it to an official of FTS, who in his capacity as a contractor to 
SPEC performed inspections of packages exported by SPEC. When 
performing pre-shipment inspections of the subject FTS package for 
SPEC, the contractor relied on the inaccurate checklist, instead of 
comparing the package to the drawings in CoC No. 5979, to certify that 
the package met all federal requirements. The contractor also supplied 
the inaccurate maintenance inspection checklist to SPEC. The inaccurate 
checklist was material to the NRC because it concealed the fact that 
the package did not comply with CoC No. 5979.
    Second, Cary W. Hedger deliberately caused an NRC licensee to 
violate NRC requirements. SPEC made at least three export shipments of 
licensed radioactive material between July 2003 and May 2004, when the 
Model No. 5979 package was in a nonconforming condition. SPEC relied 
upon its contractor's certification that the package met all federal 
requirements, and upon the inaccurate maintenance inspection checklist 
created by Mr. Hedger. Because SPEC used the nonconforming package to 
deliver for transport and to transport licensed material, and pursuant 
to 10 CFR 71.17(c)(2) [formerly 71.12(c)(2)], ``General license: NRC-
approved package,'' SPEC did not have a license to deliver for 
transport or to transport licensed material. As a result, SPEC violated 
10 CFR 71.3, ``Requirement for license,'' which provides that a license 
is necessary to deliver for transport or to transport licensed 
material.

III

    Based on the above, it appears that Cary W. Hedger has engaged in 
deliberate misconduct in violation of 10 CFR 71.8, ``Deliberate 
misconduct.'' The NRC must be able to rely on the certificate and QA 
Program Approval holder and its employees to comply with NRC 
requirements, including the requirement to provide information that is 
complete and accurate in all material respects. Mr. Hedger's actions in 
causing SPEC, an NRC Licensee, to violate 10 CFR 71.3, and his 
misrepresentations to SPEC, have raised serious doubt as to whether he 
can be relied upon to comply with NRC requirements.
    While the NRC is not aware of actual safety consequences associated 
with the shipments, the potential safety consequences were significant, 
considering the potential adverse impact of shipping radioactive 
materials in an unapproved package design that had not been 
demonstrated to meet the transportation package approval standards for 
both normal and hypothetical accident conditions as required by 10 CFR 
part 71. Of the many controls that are in place to assure public health 
and safety during the transport of radioactive materials, one of the 
most important is that the configuration of the package conforms to 
that analyzed and approved by the NRC staff, through the package CoC 
process, so as to assure integrity of the package during transportation 
for both normal and hypothetical accident conditions. In this case, the 
package integrity is of particular safety concern given the quantities 
of licensed radioactive material that were transported between July 
2003 and May 2004.
    Consequently, I lack the requisite reasonable assurance that 
licensed, certificated or QA activities can be conducted in compliance 
with the Commission's requirements, and that the health and safety of 
the public will be protected, if Cary W. Hedger is permitted at this 
time to be involved in NRC-licensed, certificated or QA activities. 
Therefore, the public health, safety, and interest require that Mr. 
Hedger be prohibited from any involvement in all NRC-licensed 
activities, including those associated with 10 CFR part 71 packaging QA 
Program Approval or certificate holder activity, for a period of three 
years from the date of this Order. Ordinarily, NRC would prohibit 
involvement in licensed activities for a period of five years in a case 
such as this. However, the NRC is mitigating the prohibition to three 
years because Mr. Hedger identified certain nonconformances in the 
shipping package number 1B, CoC No. 5979, Model No. 5979, to the NRC. 
Although he did not identify the nonconforming end-caps to the NRC, Mr. 
Hedger's disclosure ultimately led to the discontinued use of the 
package in the nonconforming condition. Furthermore, pursuant to 10 CFR 
2.202, ``Orders,'' I find that the significance of Mr. Hedger's conduct 
described above is such that the public health, safety, and interest 
require that this Order be immediately effective.

IV

    Accordingly, pursuant to Sections 81, 161b, 161i, 161o, 182, and 
186 of the

[[Page 74349]]

Atomic Energy Act of 1954, as amended, and the Commission's regulations 
in 10 CFR 2.202, 10 CFR 71.8, and 10 CFR 150.20, it is hereby ordered, 
effective immediately, that:
    1. Cary W. Hedger is prohibited for three years from the date of 
this Order from engaging in NRC-licensed activities. NRC-licensed 
activities are those activities that are conducted pursuant to a 
specific or general license issued by the NRC, including, but not 
limited to, the licensing, packaging certificate and QA program 
approval requirements of 10 CFR part 71, and those activities of 
Agreement State licensees conducted pursuant to the authority granted 
by 10 CFR 150.20.
    2. If Cary W. Hedger is currently involved with another licensee in 
NRC-licensed activities, other than AOS, he must immediately cease 
those activities, and inform the NRC of the name, address, and 
telephone number of that licensee, and provide a copy of this Order to 
the employer.
    The Director, Office of Enforcement, may, in writing, relax or 
rescind any of the above conditions upon demonstration by Cary W. 
Hedger of good cause.

V

    In accordance with 10 CFR 2.202, Cary W. Hedger must submit an 
answer to this Order within 20 days of its issuance. In addition, Cary 
W. Hedger, and any other persons adversely affected by this Order may 
request a hearing on this Order within 20 days of its issuance. 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, and include a statement of good cause for the extension.
    The answer shall be in writing and under oath or affirmation, and 
shall specifically admit or deny each allegation or charge made in this 
Order. The answer shall set forth the matters of fact and law on which 
Cary W. Hedger or other persons adversely affected relies and the 
reasons as to why this Order should not have been issued. The answer 
may consent to the Order. Any answer shall be submitted to the 
Secretary, U.S. Nuclear Regulatory Commission, ATTN: Chief, Rulemakings 
and Adjudications Staff, Washington, DC 20555-0001. Copies shall also 
be sent to: the Director, Office of Enforcement, U.S. Nuclear 
Regulatory Commission, Washington, DC 20555-0001; the Assistant General 
Counsel for Materials Litigation and Enforcement at the same address; 
and to Cary W. Hedger if the answer is by a person other than Cary W. 
Hedger.
    If a person other than Cary W. Hedger requests a hearing, that 
person shall set forth with particularity the manner in which his or 
her interest is adversely affected by this Order and shall address the 
criteria set forth in 10 CFR 2.309(d) and (f).
    If Cary W. Hedger or a person whose interest is adversely affected 
requests a hearing, the Commission will issue an Order designating the 
time and place of any hearing. If a hearing is held, the issue to be 
considered at such hearing shall be whether this Order should be 
sustained.
    Pursuant to 10 CFR 2.202(c)(2)(i), Cary W. Hedger, or any other 
person adversely affected by this Order may, in addition to demanding a 
hearing, at the time the answer is filed or sooner, move 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.
    A request for a hearing or to set aside the immediate effectiveness 
of this order must be filed in accordance with the NRC E-Filing rule, 
which became effective on October 15, 2007. The NRC E-filing Final Rule 
was issued on August, 28 2007, (72 Fed. Reg. 49,139) and codified in 
pertinent part at 10 CFR Part 2, Subpart B. The E-Filing process 
requires participants to submit and serve documents over the internet 
or, in some cases, to mail copies on electronic optical storage media. 
Participants may not submit paper copies of their filings unless they 
seek a waiver in accordance with the procedures described below.
    To comply with the procedural requirements associated with E-
Filing, at least five (5) days prior to the filing deadline the 
requestor must contact the Office of the Secretary by e-mail at 
[email protected], or by calling (301) 415-1677, to request (1) a 
digital ID certificate, which allows the participant (or its counsel or 
representative) to digitally sign documents and access the E-Submittal 
server for any NRC proceeding in which it is participating; and/or (2) 
creation of an electronic docket for the proceeding (even in instances 
when the requestor (or its counsel or representative) already holds an 
NRC-issued digital ID certificate). Each requestor will need to 
download the Workplace Forms Viewer\TM\ to access the Electronic 
Information Exchange (EIE), a component of the E-Filing system. The 
Workplace Forms Viewer\TM\ is free and is available at http://www.nrc.gov/site-help/e-submittals/install-viewer.html. Information 
about applying for a digital ID certificate also is available on NRC's 
public Web site at http://www.nrc.gov/site-help/e-submittals/apply-certificates.html.
    Once a requestor has obtained a digital ID certificate, had a 
docket created, and downloaded the EIE viewer, it can then submit a 
request for a hearing through EIE. Submissions should be in Portable 
Document Format (PDF) in accordance with NRC guidance available on the 
NRC public Web site at http://www.nrc.gov/site-help/e-submittals.html. 
A filing is considered complete at the time the filer submits its 
document through EIE. To be timely, electronic filings must be 
submitted to the EIE system no later than 11:59 p.m. Eastern Time on 
the due date. Upon receipt of a transmission, the E-Filing system time-
stamps the document and sends the submitter an e-mail notice confirming 
receipt of the document. The EIE system also distributes an e-mail 
notice that provides access to the document to the NRC Office of the 
General Counsel and any others who have advised the Office of the 
Secretary that they wish to participate in the proceeding, so that the 
filer need not serve the document on those participants separately. 
Therefore, any others who wish to participate in the proceeding (or 
their counsel or representative) must apply for and receive a digital 
ID certificate before a hearing request is filed so that they may 
obtain access to the document via the E-Filing system.
    A person filing electronically may seek assistance through the 
``Contact Us'' link located on the NRC Web site at http://www.nrc.gov/site-help/e-submittals.html or by calling the NRC technical help line, 
which is available between 8:30 a.m. and 4:15 p.m., Eastern Time, 
Monday through Friday. The help line number is (800) 397-4209 or 
locally, (301) 415-4737.
    Participants who believe that they have good cause for not 
submitting documents electronically must file a motion, in accordance 
with 10 CFR 2.302(g), with their initial paper filing requesting 
authorization to continue to submit documents in paper format. Such 
filings must be submitted by (1) first class mail addressed to the 
Office of the Secretary of the Commission, U.S. Nuclear Regulatory 
Commission, Washington, DC 20555-0001, Attention: Rulemaking and 
Adjudications Staff; or (2) courier, express mail, or expedited

[[Page 74350]]

delivery service to the Office of the Secretary, Sixteenth Floor, One 
White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, 
Attention: Rulemaking and Adjudications Staff. Participants filing a 
document in this manner are responsible for serving the document on all 
other participants. Filing is considered complete by first-class mail 
as of the time of deposit in the mail, or by courier, express mail, or 
expedited delivery service upon depositing the document with the 
provider of the service.
    Documents submitted in adjudicatory proceedings will appear in 
NRC's electronic hearing docket which is available to the public at 
http://ehd.nrc.gov/EHD_Proceeding/home.asp, unless excluded pursuant 
to an order of the Commission, an Atomic Safety and Licensing Board, or 
a Presiding Officer. Participants are requested not to include personal 
privacy information, such as social security numbers, home addresses, 
or home phone numbers in their filings. With respect to copyrighted 
works, except for limited excerpts that serve the purpose of the 
adjudicatory filings and would constitute a Fair Use application, 
Participants are requested not to include copyrighted materials in 
their works.
    In the absence of any request for hearing, or written approval of 
an extension of time in which to request a hearing, this Order shall be 
final 20 days from the date of this Order without further order or 
proceedings. If an extension of time for requesting a hearing has been 
approved, the provisions specified in Section IV shall be final when 
the extension expires if a hearing request has not been received. An 
answer or request for hearing shall not stay the immediate 
effectiveness of this order.

    For the Nuclear Regulatory Commission.
    Dated this 20th day of December 2007.

Martin J. Virgilio,
Deputy Executive Director for Materials, Waste, Research, State, Tribal 
and Compliance Programs, Office of the Executive Director for 
Operations.
 [FR Doc. E7-25412 Filed 12-28-07; 8:45 am]
BILLING CODE 7590-01-P