Conflict could further delay Yucca work

Suzanne Struglinski

Tuesday, Oct. 28, 2003 | 11:27 a.m.

WASHINGTON -- An appeals court ruling today could delay the Energy Department's plan to open a high-level nuclear waste dump at Yucca Mountain because of conflict of interest charges leveled at the law firm that worked on the department's permit application.

The U.S. Circuit Court of Appeals for the District of Columbia sent the case back to U.S. District Court to determine if the Energy Department ruled out any conflict of interest before it hired its legal counsel, Chicago-based Winston & Strawn.

The law firm, which spent two years preparing the department's application for a Nuclear Regulatory Commission permit, withdrew as counsel in November 2001 after allegations were raised. The firm, which had done work for a Yucca Mountain contractor and lobbied for a pro-nuclear group, has not admitted any conflict existed.

If a judge finds that the Energy Department didn't consider the potential conflicts with the law firm, it could award the contract to another law firm.

That could mean a delay in the project because all of Winston's work may need to be reviewed, said Washington attorney Joe Egan, who works for Nevada on its opposition to the Yucca Mountain nuclear waste site, about 90 miles northwest of Las Vegas.

"This is amazing," Egan said. "This is a blow-out victory for Nevada."

The court's ruling today came in response to a lawsuit filed by LeBoeuf, Lamb, Green and MacRae, a law firm that had bid and lost the contract.

LeBoeuf argued that Winston & Strawn had a conflict of interest that should have disqualified it because the firm had previously represented TRW Environmental Safety Services, the former main contractor for Yucca Mountain.

Winston & Strawn withdrew from the $16.5 million contract in 2001 after the Energy Department's inspector general concluded the firm did not tell the DOE it had lobbied for the pro-Yucca Nuclear Energy Institute.

The appellate court ruling said the Energy Department must provide evidence that the law firm was qualified to bid despite the conflict. If it cannot, the court could award the contract to LeBoeuf, the judges said.

Egan said if that happens, the work the law firm did was tainted. The only way to remove tainted work would be to redo it, Egan said, so the two years of work Winston did on the project would have to be revisited.

The Energy Department, which has been without a legal counsel since the law firm left, plans to submit its application by the end of 2004, and hopes to open Yucca Mountain by 2010.

Energy Department officials did not return a call asking about the issue this morning.

Steven Davis, co-chairman of LeBoeuf said he is "very gratified by the court's decision," but he would not comment further.

The appeals court disagreed with a July 2002 decision by the U.S. District Court, which had ruled that the case was moot since the old contract no longer existed and the department did not indicate it still wanted outside counsel.

"The department knew or should have known that awarding the Yucca Mountain contract to Winston created an apparent conflict of interests for Winston that required further scrutiny," according to the opinion filed by Judge Judith Rogers.

Rogers wrote that some facts were missing from the record that would have clearly shown how the department evaluated the contract. The lower court's opinion was not adequate for the appeals court to issue its own decision or award the contract to LeBoeuf, Rogers wrote.

She said just accepting Winston's statement that it did not have a conflict of interest is "inconsistent" with federal requirements.

The appeals court said the district court "shall" address whether awarding the contract to Winston violated Nevada's Code of Professional Responsibility, as set out in the Energy Department's own guidelines.

"The courts are a very different forum than the political arena," Egan said. "They are willing to apply the law."

He said that the despite "enormous repercussions" for the department, this is the second time courts have ruled against the Energy Department in a Yucca case. The same court ruled against the department when nuclear power plants sued over missing the 1998 deadline to take the nuclear waste.

Egan pointed out that appellate Judge David Tatel, who sat on this case, will also hear Nevada's oral arguments set for January on several cases against the site.

"He will have a deep understanding of DOE's lack of legal competency," Egan said.

Meanwhile, the court said the department's continuing need for a legal expert on the NRC licensing process was confirmed by a April 30 letter from Energy Secretary Spencer Abraham telling House Speaker Dennis Hastert, R-Ill., that the Energy Department was looking for an expert law firm for the project.

The Energy Department will not confirm if it has selected a new firm.

The district court would determine if a direct award of the contract would be suitable, according to the opinion.

An attorney familiar with the case said the department has 45 days to ask that the court rehear the case and 90 days to file with the Supreme Court.

After the 45 days the court will formally send the case back to the District Court in Washington to be heard and a court date could be set anytime after that.