On June 24, the US Supreme Court issued its opinion in Food Marketing Institute v. Argus Leader Media, expanding the scope of information protected under Exemption 4 of the Freedom of Information Act (FOIA). FOIA establishes an expansive right for the public to access records from executive agencies to hold the government accountable. Limiting that broad right, FOIA includes several broadly worded exceptions whereby the release of certain information may not be compelled under FOIA. One such exemption, Exemption 4, states that “trade secrets and commercial or financial information obtained from a person” that are “privileged or confidential” are protected from mandatory public disclosure. The statute does not define “confidential,” so the question of what “commercial or financial information” is protected from disclosure has resulted in much litigation.

Justice Gorsuch’s majority opinion held that commercial or financial information that is both customarily and actually treated as private by its owner—and that is provided to the government under an assurance of privacy—is exempt from disclosure under FOIA. This holding has significant implications for all businesses that turn any information over to the US government. No longer may courts require proof that the information, if disclosed, would “cause substantial harm” to the company’s competitive position. Mere confidentiality, plus agency representations that the information will remain confidential, is enough.

Staff members from the US Nuclear Regulatory Commission’s (NRC’s) Office of Nuclear Security and Incident Response and Office of Nuclear Reactor Regulation held a public meeting on June 17 to discuss a summary of the Assessment of the NRC’s Power Reactor Cyber Security Program. In response to the Nuclear Energy Institute’s (NEI’s) PRM-73-18, “Petition to Amend 10 CFR 73.54, ‘Protection of Digital Computer and Communication Systems and Networks’,” and based on NRC guidance, this Assessment marked 10 years since the publication of 10 CFR 73.54.

In the latest installment of NRC’s changes to its guidance on backfitting on May 29, the Commission approved the Staff’s proposed revisions to Management Directive (MD) 8.4, previously titled, “Management of Backfitting, Issue Finality, and Information Collection” and its companion Directive Handbook (DH). As a result of content changes (discussed herein), the title of these directives has now been modified to also provide guidance for the “forward-fitting” requirements for 10 CFR Part 52 licensees by including its analogous terms for Backfitting, “forward fitting and issue finality.” As such, NRC guidance on Backfitting is now called “Management of Backfitting, Forward Fitting, issue Finality, and Information Requests.”

As part of the US Nuclear Regulatory Commission’s (NRC’s) efforts to create efficiencies in its enforcement process, the NRC Commissioners unanimously approved a staff proposal to change Section 4.1 of the NRC’s Enforcement Policy. Under this approved change, the NRC will not typically consider fitness-for-duty (FFD) drug and alcohol violations involving non-licensed individuals for enforcement action. But the NRC will still investigate if there are apparent deficiencies in a licensee’s FFD program itself or the program’s implementation. Thus, to avoid enforcement actions in the future, licensees must continue to maintain an effective FFD program for drug and alcohol violations.

As we last reported on October 5, 2018, the NRC Staff appeared ready to recommend withdrawing a rulemaking on third-party arbitration of access authorization and fitness-for-duty determinations. On April 4, 2019, the NRC Staff formally made its recommendation in SECY-19-0033. In so doing, the NRC Staff “request[ed] Commission approval to discontinue the rulemaking activity, ‘Access Authorization and Fitness-for-Duty Determinations’,” which began nearly four years ago. As previously reported, this rulemaking activity was a response to a 2012 decision by the US Court of Appeals for the Seventh Circuit in which the court determined that NRC regulations permitted third-party arbitration of unescorted access determinations. At that time, the NRC Staff disagreed with the decision and asked for Commission approval to begin a rulemaking.

The US Nuclear Regulatory Commission (NRC) Office of Investigations (OI) recently published its Office of Investigations Annual Report FY 2018. The report provides an overview of OI’s activities during the previous fiscal year and shows that OI opened 12% fewer cases than in 2017. Of the 101 cases opened in FY 2018, 40% were discrimination cases, a 4% increase from FY 2017. “Discrimination” in this context refers to retaliation for engaging in protected activities established in Section 211 of the Energy Reorganization Act of 1974, as amended. Discrimination has remained the largest case category for the past three years. Material false statement investigations reflect 16% of the cases OI opened in FY 2018, a 4% decrease from FY 2017. Investigations into other alleged violations of NRC regulations reflect 27% of the cases OI opened in FY 2018, and investigations opened to provide assistance to the NRC staff reflect 18% of the cases OI opened in FY 2018.

The NRC issued an update to Management Directive 8.11 (MD 8.11), Review Process for 10 C.F.R. § 2.206 Petitions on March 1, culminating an on-again, off-again review process that began almost a decade ago. In issuing the updated MD 8.11, the NRC also issued a corresponding update to Directive Handbook 8.11 (DH 8.11), but pushed the detailed staff guidance that was previously in MD 8.11 to a publicly available Desktop Guide. In short, the review process in the updated MD 8.11 and DH 8.11 is not markedly different from the prior versions, but the changes also reduce some of the opportunities for licensees to directly seek clarification from a petitioner about the issue being raised and allow the NRC staff to “save” what might otherwise be deficient petitions. The updated MD 8.11 also does not resolve questions as to whether the ability to submit a Section 2.206 petition is restricted to only external stakeholders.

In a rare legal challenge related to fees the NRC charges nuclear licensees for its services, the US Court of Federal Claims recently held that the costs of certain NRC services provided in connection with Confirmatory Orders (COs) are not recoverable via hourly bills to individual licensees. The court held that COs are essentially enforcement orders, and thus cannot be viewed as conveying an “individual benefit” to licensees.

At the end of January, the US Nuclear Regulatory Commission (NRC) issued a complete rewrite of Inspection Manual Chapter (IMC) 1240 on unescorted access authorization for NRC employees and contractors. The most major change from the prior version is that the NRC will no longer issue letters to licensees requesting unescorted access for NRC employees. Instead, the NRC will implement and maintain a Site Access List that identifies NRC employees and contractors whom the NRC has certified for unescorted access. Consistent with this change, the revised inspection manual chapter provides information on how the NRC will determine the suitability of its employees and contractors for unescorted access. The revisions also change how behavioral observation and fitness for duty programs apply to NRC employees and contractors and how they should be reported.

In January, the US Nuclear Regulatory Commission’s (NRC’s) staff hosted a public meeting with industry representatives to discuss the staff’s progress in reviewing recommendations for the NRC’s Reactor Oversight Process (ROP) framework enhancement initiative. The objectives of the ROP enhancement initiative are to evaluate whether the baseline inspection program remains relevant for the current environment, eliminate redundant or unnecessary inspection areas, maximize efficient and effective use of resources, and incorporate flexibility in program implementation, where appropriate.

In 2018, the NRC solicited ideas for enhancing the ROP, which resulted in an industry proposal based on four points: US fleet maturity, improved safety margins, improved risk assessments, and greater use of risk-informed decisionmaking. Part of this proposal includes redefining labels for findings and combining Columns 1 and 2 of the Action Matrix. If the industry proposal prevails, it would mark a paradigm shift, considering Columns 1 and 2 have been in existence since the pilot program for ROP enhancement was introduced in 1999. As was stated at the public meeting, combining Columns 1 and 2 would be a long-term change. A proposal to remove Section 71152 of the Inspection Procedure, for problem identification and resolution, was also raised at the meeting but was generally dismissed.

This blog post is the first in a series that will track further progress on the ROP enhancement initiative.