Agency Funding of Indigent Public Interest Intervenors in Administrative Proceedings

Introduction: Full, Fair Representation

Students of the administrative process generally agree that all interested and affected persons should have an opportunity to participate in agency decision making.¹ Full participation is thought to serve the public interest because it achieves thorough exposition and consideration of information relevant to a particular rulemaking or adjudication; in short, it is thought to contribute to a better-informed, and, therefore, wiser decision. In addition, it serves to enhance public confidence in the legitimacy of the final result and thus to lessen the number of after-the-fact judicial challenges to agency actions.

In recent years, the correlative judicial expansion of the law of standing has removed one traditional barrier to broadened public participation in administrative proceedings.² But some would-be intervenors have often been unable to put into practice their theoretical right to participate in agency proceedings, particularly in cases where the administrative result sought promises no direct economic benefit. The financial circumstances of many would-be intervenors are precarious, and the expense of such participation is in many instances quite simply beyond their means. While the high cost of a protracted court suit is generally recognized, it is not commonly appreciated that the cost to an intervenor of full participation in an administrative proceeding may be just as great. Attorney's fees may run over $100,000 in complicated agency proceedings, and the expenses of expert witnesses in such cases can easily reach $40,000 or $50,000.³ A growing number of observers have thus come to believe that

if the quality of administrative decisionmaking depends upon the participation of interested groups, assistance for those groups unable to command sufficient resources may be necessary.⁴

Federal Agency Experience

Several federal agencies have addressed this problem, either sua sponte, or by congressional mandate, or judicial suggestion. The first to consider the problem of agency assistance to needy intervenors was the Federal Trade Commission (FTC). In response to a 1972 FTC request for his opinion, the Comptroller General concluded that the agency's general statutory authority to "ensure proper case preparation" gave it the power to subsidize the transcript, witness and travel expenses of indigent intervenors.⁵ This opinion was also based on the FTC's own determination three years earlier in American Chinchilla Corp.⁶ that it was required to assist an indigent respondent in an unfair practices hearing in obtaining counsel. The agency did not, however, institute such an assistance program in the wake of the Comptroller General's ruling.

So in 1975 Congress enacted legislation⁷ expressly authorizing the FTC to provide compensation for attorney and expert witness fees and "other costs" to indigent parties who represent an interest which would not otherwise be adequately represented. Congress also appropriated $1 million for this purpose. The agency quickly promulgated rules implementing its authority.⁸

The Federal Power Commission (FPC) also had to face the intervenor assistance question in its 1971 licensing proceedings for the Gilboa-Leeds high-voltage transmission line in Greene County, New York. Intervenors, who included the Greene County Planning Board, requested reimbursement for out-of-pocket expenses, expert witness costs and attorneys' fees from either the utility applying for the license or from the FPC itself. The FPC denied the requests on the ground that the Federal Power Act did not authorize such a grant. On appeal, the Second Circuit refused to order either the utility or the Commission to compensate the intervenors without "a far clearer congressional mandate to afford the relief requested, especially … counsel fees…."⁹ But noting that it was dealing with a "rapidly changing area of administrative law," the court also implied that the initiative should be left with the agencies as well as with the Congress: "[w]ithout a showing of compelling need, it would be premature for us to inject the federal courts into this area of administrative discretion, perhaps foreclosing more flexible approaches through agency action or rules."¹⁰

The Nuclear Regulatory Commission (NRC) is the latest federal agency to grapple with the problem of needy intervenors. In November 1974,¹¹ the NRC's [6 ELR 10053] predecessor, the Atomic Energy Commission (AEC), tentatively concluded that it had the power to provide direct financial assistance to indigent intervenors in agency proceedings and announced its intention to hold a rulemaking on the question of whether it should institute such assistance. The NRC proceeded to contract with the law firm of Boasberg, Hewes, Klores & Kass for preparation of a study considering the policy issues surrounding the provision of compensation to intervenors. The NRC has received more than 60 comments on the Boasberg study,¹² which was completed in July 1975, but the agency has not yet set a commencement date for the rulemaking or published notice of the procedures which will be followed.

The NRC, the Atomic Energy Act, and Alyeska

The NRC stands onsomewhat different footing than the other agencies which have attempted to come to grips with the intervenor assistance question. While the Atomic Energy Act, as amended by the Energy Reorganization Act of 1974,¹³ contains no express authorization for NRC reimbursement of indigent intervenors, the latter statute's legislative history strongly supports the view that the Commission does have such authority. The Senate-passed version of the Energy Reorganization Act contained in Title V an express authorization for an NRC intervenor compensation program; the House version did not. The Senate provision was deleted in conference, but in dropping it the Conference Committee emphasized that

[t]he deletion of Title V is in no way intended to express an opinion that parties are or are not entitled to some reimbursement for any or all costs incurred in licensing proceedings. Rather, it was felt that because there are currently several cases on this subject pending before the Commission, it would be best to withhold Congressional action until these issues have been definitively determined. The resolution of these issues will help the Congress determine whether a provision similar to Title V is necessary since it appears that there is nothing in the Atomic Energy Act, as amended, which would preclude the Commission from reimbursing parties where it deems it necessary.¹⁴ (Emphasis added.)

It was this language in the legislative history, along with the Comptroller General's 1972 opinion regarding the FTC's powers in this area, and the AEC's broad powers relating to public participation¹⁵ that led the Commission to its tentative conclusion that it had the power to assist intervenors if the agency found it "necessary."

But two intervening court decisions, Alyeska Pipeline Service Co. v. Wilderness Society¹⁶ and Turner v. Federal Communications Commission,¹⁷ caused the NRC, by the time it issued notice of the proposed rulemaking,¹⁸ to question whether its predecessor's tentative conclusion remained correct and to ask for both further public comment and for the Comptroller General's opinion on the issue In Alyeska, the Supreme Court invalidated the emerging "private attorney general" rationale for awards of attorneys' fees against the losing party to plaintiffs who successfully vindicate the public interest. Such judicial fee-shifting is impermissible, the Court held, in the absence of specific statutory authorization. Turner applied Alyeska to administrative proceedings, holding that the Federal Communications Commission does not have the authority to order one party in a proceeding before it to pay another party's attorneys' fees.

Both Alyeska and Turner dealt with fee-shifting as between private parties, not with agency compensation of a party out of its own funds. Thus they do not seem to control the issue of direct agency financial assistance to an indigent party. This distinction is reinforced to the extent that the "American Rule" against awarding attorneys' fees to prevailing parties — upon which Alyeska was based — is concerned primarily with barring mandatory fee-shifting from one party to another, i.e., that no party may be forced to pay for its opponent's lawyer. Seen in this light, the "American rule" does not purport to condemn an arrangement by which the cost of an indigent party's legal representation is subsidized on an essentially voluntary basis either by pro bono assistance, by a legal aid program, or by the agency before which it is appearing.

The foregoing analysis, while it removes the doctrinal bar to finding NRC authority to assist intervenors without additional enabling legislation, does not supply a clear answer on this point. A recent opinion¹⁹ issued by the Comptroller General in reply to the NRC's request for an analysis of its authority is more definite. The opinion dismissed Alyeska, Turner and Greene County as distinguishable and noted both the Commission's broad public participation powers and the Energy Reorganization Act conference report's finding that there is nothing to preclude reimbursement where the NRC determines it to be necessary. It also cited Siegel v. AEC²⁰ for the proposition that the NRC oversees "a regulatory scheme which is virtually unique in the degree to which broad responsibility is reposed in the administrative agency free of close prescription in its charter as to how it shall proceed in achieving the statutory objectives." The Comptroller General therefore held that the "NRC has the statutory authority to facilitate public participation in its proceedings by using its own funds to reimburse intervenors when (1) it believes that such participation is required by statute or necessary to represent adequately opposing points of view on a matter, and (2) when it finds that the intervenor is indigent or otherwise unable to bear the financial costs of participation in the proceedings."

As noted above, the conference report concluded that the Commission's authority turned on its finding it [6 ELR 10054] "necessary" to subsidize needy intervenors. In policy terms there is little doubt of such necessity, particularly in the context of the environmental values impacted by nuclear development and given the complexity of nuclear regulatory issues.

Support from the Judiciary

This view is reinforced by dicta appearing in three federal appellate court opinions rendered over the last three years. In Citizens for a Safe Environment v. AEC,²¹ the Third Circuit upheld the agency's denial of an interlocutory request for attorneys' and expert witness fees by an environmental intervenor in alicensing proceeding. For the purposes of the Administrative Orders Review Act, the court said, the denial order was not final, since the proceeding was ongoing, and the intervenor had not alleged that it was being denied effective participation by virtue of indigency. While not expressing an opinion as to whether an allegation of indigency would have produced a different result, the court left the strong implication that the Comptroller General's 1972 finding that the FTC has discretionary assistance authority where indigency is alleged is applicable to the AEC (now NRC) because of the similar role that intervention plays in the regulatory structures of these two agencies.

Judges Bazelon and Wright of the U.S. Court of Appeals for the D.C. Circuit have recently re-emphasized this point by voicing concern, in two separate cases, over the financial roadblocks to full public interest intervenor participation in NRC proceedings. In York Committee for a Safe Environment v. NRC,²² Judge Wright, writing for the court, did not reach petitioners' contention that they were entitled to financial assistance from the Commission, but stated in a footnote "that it would be unrealistic to expect public interest litigants to underwrite the expense of mounting the kind of preparation and presentation of evidence that is ordinarily required in this type of case."

And in Citizens for Safe Power v. NRC,²³ Judge Bazelon, in a concurring opinion, went even further. Registering concern "that public interest groups and others opposed to nuclear plant operation may not be able to finance a sufficient effort to uncover risks, harms or 'significant and adverse effects,'" the Judge emphasized that if society is to rely upon public interest intervention as an important mechanism for insuring that agency decisions protect the public health and safety, "it must … assist the objectors to state their case."

Arguments Pro and Con

The crux of the matter thus seems to boil down to this: on the one hand is the view that a federal agency may not, in the wake of Alyeska, disturb the existing balance between parties in essentially adversary administrative proceedings without a specific congressional grant of authority. On the other is the assertion that an agency such as the NRC, which deals with questions vitally affecting the public health and safety and has a strong congressional mandate and broad statutory powers to ensure full public participation in its decision making, may, within its discretion, undertake a program of intervenor compensation if it determines such assistance to be necessary for the proper resolution of important health and safety issues.

The threshold question is whether public interest intervenors actually make significant contributions in NRC proceedings, or, in other words, whether broadened public participation would actually enhance the quality of NRC decision making. Those opposed to an intervenor assistance program claim that in the past intervenors have not made such contributions. These opponents also argue that Congress has made the NRC itself the protector of the public interest from the hazards of nuclear power, and that the agency's procedures and performancehave to date amply safeguarded public health and safety. On the other hand, a panel of the Commission's Atomic Licensing Appeal Board has emphatically disagreed with such negative characterizations of the role which intervenors have played before the agency:

It does no disservice to the diligence of either applicants generally or the regulatory staff to note that many of the substantial safety and environmental issues which have received the scrutiny of licensing boards and appeal boards were raised in the first instance by an intervenor.²⁴

The other main contentions of opponents are that an NRC intervenor assistance program would entail costly delays outweighing any perceivable benefits, and that other alternatives such as establishing an Office of Public Counsel are preferable since they would be less likely to polarize the hearing process, and would present fewer administrative difficulties for the agency. The constant lament of nuclear licensees, as well as of applicants for such licenses, is that the non-final nature of AEC/NRC licensing determinations²⁵ along with delays due to the continual objections and legal challenges raised by environmental parties have bred a degree of uncertainty into the process of licensing and operating a nuclear plant which has made continued investment in nuclear power unattractive.

These objections do not, however, stand up under scrutiny. A structured intervenor assistance program at the outset of licensing proceedings might serve to remedy this uncertainty to some extent, by facilitating thorough exposition and consideration of the full range of impacts and risks prior to the granting of a license and before substantial investment has been made. Full and complete consideration of public interest group objections [6 ELR 10055] on health, safety and environmental grounds at the pre-licensing stage would arguably cut down the number of judicial challenges at later stages aimed at suspending, revoking or amending a license after construction or operation has begun.

Should an assistance program be instituted, the risk of frivolous intervention, unnecessary delay, and development of an overly adversarial hearing atmosphere could be controlled by carefully framed procedures. In addition, a certain level of procedural inconvenience and administrative burden is a small price to pay for continuation and expansion of significant intervenor contributions to NRC decision making.

This conclusion also draws strong support from the public participation policy underlying the Atomic Energy Act:

Full, free, and frank discussion in public of the hazards involved in any particular reactor would seem to be the most certain way of assuring that the reactor will indeed be safe and that the public will be fully apprised of this fact.²⁶

Alternative methods of broadening public participation, such as establishment of a Public Counsel Office or Public Advocates are presently being used in a number of states and in several federal agencies. Such devices do not promise as vigorous a presentation of the full panoply of interests of various segments of the public as does a direct intervenor assistance scheme.

Congressional Proposals

While the NRC has been struggling with the intervenor compensation question, the general need for such assistance has not gone unnoticed in Congress. Having already expressly authorized intervenor compensation by the FTC, Congress, through the Administrative Practice and Procedure Subcommittee of the Senate Judiciary Committee, is currently considering legislation to extend such authority to all federal proceedings under the Administrative Procedure Act.²⁷ The bill, S. 2715, would also negate the Alyeska decision by giving federal courts the power to award attorneys' fees to deserving public interest plaintiffs in suits seeking the review of administrative action.

In testifying on the bill, Assistant Attorney General Rex E. Lee voiced disapproval of its negation of Alyeska, but endorsed the concept of direct agency financial assistance to indigent participants in administrative proceedings.²⁸ One of the reasons which he gave for this seemingly paradoxical stand was that an intervenor assistance program would serve to lessen the number of public interest court challenges to agency decisions, while the possibility of attorneys' fees awards in court cases would only serve to increase such litigation. The FCC and Consumer Product Safety Commissioners concurred in Lee's endorsement of assistance to intervenors, as did former EPA Administrator William Ruckelshaus.²⁹

This testimony, along with statements by public interest groups during the subcommittee hearings, raised the further issue of the criteria upon which compensation awards should be based. This problem, though presently subordinate to the basic assistance-no assistance question, is nonetheless important, since if the criteria and procedures established are too restrictive, they could effectively negate a policy decision to establish a broad assistance program.

It is useful, in this regard, to examine the FTC's existing program for intervenor funding. The agency's compensation regulations echo the language of the FTC Improvement Act to provide that assistance will be available in rulemaking proceedings only to intervenors who represent an interest which would not otherwise be adequately represented, and the representation of which is necessary for a fair determination of the rulemaking taken as a whole. To be eligible for compensation, an intervenor must also be unable to participate effectively in the proceeding because of inability to pay the costs of making oral presentations, conducting cross-examination, and making rebuttal submissions. The regulations then go on to specify that in reaching a determination on the adequate representation qualification, the hearing officer must consider the number and complexity of the issues involved and the importance of a fair, balanced representation of all interests. As to the financial qualification, he must take into account the size of the intervenor's economic stake in the proceedings as compared with the costs of participation and the feasibility of obtaining contributions from other parties who share the intervenor's interest.

The eligibility criteria which S. 2715 would establish rely more heavily on this additional wording of the FTC's regulations than on the congressionally drafted language of the FTC Improvement Act. A participant would be eligible for compensation under the bill if he or she represents an interest which will substantially contribute to a fair determination of the proceeding, in light of the number and complexity of the issues presented and the need for representation of a fair balance of interests. The would-be intervenor would also be required either to have an economic interest in the proceeding which is small in comparison to the costs of effective participation, or to demonstrate that it does not have the resources to participate in the proceedings without compensation. In addition, assistance would not be limited to rulemakings, but would be available in licensing and adjudicatory proceedings as well.³⁰

[6 ELR 10056]

Prognosis

With Congress' passage of the intervenor compensation provision in the FTC Improvement Act of 1975, the NRC's proposed rulemaking, the Comptroller General's two opinions on the subject, and the broad-based support among crucial government agencies for the administrative assistance portion of S. 2715, direct agency assistance to indigent public interest intervenors looks like an idea whose time has come. And given the complexity and gravity of the public health and risk questions surrounding the development of nuclear power, there seems less and less basis for maintaining the long-standing imbalance in resources between the nuclear industry, with its heavy financial stake in proceeding with development, and public interest groups, who wish to explore fully the attendant risks for the protection of the public as a whole. Modern administrative theory requires broad participation of public interest groups in agency decision making. The benefits conferred by these intervenors, in the form of sounder agency decisions, flow to the general public. It is thus appropriate that the cost should be spread among the beneficiaries through the general tax revenues.

Because of the special risks presented by nuclear power, the complexity of the issues, large quanta of evidence required for effective participation, and the important role of public participation in NRC proceedings, the Commission bears a unique responsibility, compared with other federal agencies, to facilitate such public involvement. The fairest and most credible way for the NRC to do this is through a program of direct financial assistance to indigent public interest intervenors. The Commission would be justified in reaffirming its tentative determination that it has the power to initiate such assistance under its existing statutory authority.

An NRC decision to undertake intervenor compensation would serve to prod other federal agencies into looking at their own residual authority to do the same. On the other hand, a determination to wait, as did the FTC, for an explicit warrant from Congress would only serve to dramatize even further the need for enactment of the administrative intervenor assistance provisions of S. 2715.

1. E.g., Cramton, The Why, Where and How of Broadened Public Participation in the Administrative Process 60 GEO. L.J. 525 (1972); Gellhorn, Public Participation in Administrative Proceedings, 81 Yale L.J. 359 (1972); Comment, Public Participation in Federal Administrative Proceedings, 120 U. Pa. L. Rev. 702 (1972); Note, Federal Agency Assistance to Impecunious Intervenors, 88 Harv. L. Rev. 1815 (1975).

2. See, e.g., Scientists Institute for Public Information v. AEC, 481 F.2d 1079, 3 ELR 20525 (1973); In re General Electric Co., 6 ELR 30001 (N.Y. Dept. of Env. Conserv. 1975).

3. Cramton, supra n. 1, at 540.

4. Note, Federal Agency Assistance to Impecunious Intervenors, supra n. 1, at 1819.

5. Letter from Elmer B. Staats, Comptroller General, to Myles J. Kirkpatrick, Chairman, Federal Trade Commission, July 24, 1973, 31 Ad. L.2d 474 (1973).

6. 76 F.T.C. 1016 (1969).

7. Federal Trade Commission Improvement Act, Pub. L. 93-637, 15 U.S.C. § 57a(h)(1).

8. 40 Fed. Reg. 33966 (Aug. 13, 1975).

9. Greene County Planning Board v. FPC, 455 F.2d 412, 426, 2 ELR 20017, 20024 (2d Cir. 1972).

10. 455 F.2d at 427, 2 ELR at 20024.

11. Consumers Power Co., No. 50-155, 39 Fed. Reg. 41291 (Nov. 26, 1974).

12. Policy Issues Raised by Intervenor Requests for Financial Assistance in NRC Proceedings (July 18, 1975).

13. 42 U.S.C. §§ 5801 et seq. (Supp. 1975), Pub. L. 93-438.

14. S. Rep. No. 93-1252, 93d Cong., 2d Sess. 37 (1974) (Conference Report).

15. In any proceeding … for the granting, suspending, revoking, or amending of any license or construction permit, … and in any proceeding for the issuance or modification of rules and regulations dealing with the activities of licensees, … the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding, and shall admit any such person as a party to such proceeding.

42 U.S.C. § 2239(a) (emphasis added).

16. 421 U.S. 240, 5 ELR 20286 (1975).

17. 514 F.2d 1354 (D.C. Cir. 1975).

18. 40 Fed. Reg. 37056 (Aug. 25, 1975).

19. Decision of the Comptroller General, No. B-92288, Feb. 19, 1976.

20. 400 F.2d 778, 783 (D.C. Cir. 1968).

21. 489 F.2d 1018, 4 ELR 20091 (3d Cir. 1973).

22. __ F.2d __, 6 ELR 20107 (D.C. Cir. Dec. 9, 1975).

23. __ F.2d __, 6 ELR 20101 (D.C. Cir. Dec. 22, 1975).

24. Gulf States Utilities Co., Nos. 50-458, 50-459, RAI-74-3-222 (Mar. 12, 1974).

25. The Commission may at any time after the filing of the original application, and before the expiration of the license, require further written statements in order to enable the Commission to determine whether a license should be modified or revoked.

42 U.S.C. § 2232(a).

Indeed, one might argue that this unique "no-finality" provision in the Atomic Energy Act evinces a congressional intent to insure full representation, either in the long or short run. As argued in the text, assuring such representation at the front end (through subsidization to intervenors) is far preferable to an endless string of possibly weighty challenges.

26. H. Rep. No. 435, 85th Cong., 1st Sess. 12 (1957).

27. 94th Cong., 2d Sess. (1976). Copies of the bill, introduced by Senator Kennedy (D.-Mass.), are available from ELR (8 pp. $1.00, ELR Order No. M-1001).

28. Statement of Rex E. Lee, Asst. Attorney General, Civil Division, concerning S. 2715, before the Subcomm. on Administrative Practice and Procedure of the Senate Judiciary Comm., 94th Cong., 2d Sess. (Feb. 6, 1976).

29. Washington Post, Feb. 7, 1976, § C at 8.

30. One feature of the bill which might be considered a defect from the public interest groups' point of view is its apparent failure to authorize compensation for public participation in the NEPA impact statement process. Agency preparation of an EIS is neither an adjudication, a licensing nor a rulemaking; passage of S. 2715 as currently written would thus apparently not make compensable costs incurred by indigent parties in hiring attorneys or experts to submit comments on a draft impact statement or testify on it should administrative hearings be held, unless the EIS was being prepared in conjunction with a rulemaking, licensing, or adjudication.