EXELON GENERATION COMPANY v. LOCAL 15, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS (March 29, 2012)
In 1991, the Nuclear Regulatory Commission promulgated regulations requiring nuclear generator operators to develop programs governing unescorted access within their nuclear facilities. Among other things, the regulations provided that only a licensee could grant unescorted access, that a licensee could delegate to a contractor certain elements of the authorization program, and that a licensee had to have review procedures for any employee whose unescorted access privileges were revoked or denied. For almost 20 years, the Commission took the position that labor arbitrators could review and reverse access denials for employees in unionized plants. In 2008, in a lawsuit between Exelon and Local 15 of the International Brotherhood of Electrical Workers, a federal district court held that access denials were grievable and that the regulations did not foreclose an arbitrator's review In 2009, the Commission revised the regulations. After the revisions, an operators' consortium updated its implementation criteria in which it stated that unescorted access decisions are subject only to an internal management review and could not be reviewed by a third party (including an arbitrator). The Commission staff reviewed the implementation criteria and found that it met "the intent and substance of" the new regulations. Exelon filed another complaint for a declaratory judgment that the 2009 amendments changed the Commission's view on the issue. Judge Gettleman (N.D. Ill.) granted summary judgment to Exelon. Local 15 appeals.
In their opinion, Seventh Circuit Judges Kanne, Sykes, and Hamilton reversed. The Court applied the same rules of construction it would apply to statutes. The first of those rules is to determine whether the regulation has a plain and unambiguous meaning. If so, that meaning governs. If not, the Court will resort to other means to ascertain the intended meaning. The Court first addressed the modification that required an independent internal management review as part of the review procedure. The earlier version of the regulation allowed, but did not require, an internal management review. The Court concluded that the regulation was clear and unambiguous and did not, as Exelon urged, preclude any form of review that was not the internal management review. The Court turned to another section of the regulation that provided that a licensee was the only one who could grant unescorted access. Exelon urged that the regulation therefore prohibited an arbitrator's review. Although the Court agreed that the provision was ambiguous and susceptible to multiple meanings, it ultimately concluded based on context that Exelon's reading was wrong. Most significant to the Court was the fact that review by an arbitrator was a very controversial issue when the regulation was first promulgated, that the Commission adopted an unequivocal position that the regulation did not prohibit review by an arbitrator, and that nowhere in the text of the modified regulation or any of its history does the Commission suggest that it is adopting such a fundamental change. The Court reasoned that it can expect an agency to say something when it reverses a significant, long-standing policy. Finally, the Court rejected Exelon's contention that the Commission's acceptance of the industry consortium's position is entitled to Auer-Seminole Rock deference. Under that concept, an agency's interpretation of its own regulation is generally controlling unless it is plainly erroneous or inconsistent with the regulation. The Court declined to give deference to the Commission's action. The Commission merely described the guidance as acceptable. It did not adopt or incorporate it by reference. In fact, the APA would not have permitted the Commission staff to endorse an interpretation that contradicts the Commission's own prior interpretation. The guide is the industry's interpretation -- not the Commission's -- and is not entitled to deference.